SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/registrant [X]
Filed by a Partyparty other than the Registrant / /registrant [ ]
Check the appropriate box:
/ /[ ] Preliminary Proxy Statement / /[ ] Confidential, for Useuse of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/[x] Definitive Proxy Statement
/ /[ ] Definitive Additional Materials
/ /[ ] Soliciting Material Underpursuant to Rule 14a-12
WSFS FINANCIAL CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other thanOther Than the Registrant)
Payment of Filing Feefiling fee (Check the appropriate box):
/X/[X] No fee required
/ /[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1)(1) Title of each class of securities to which transaction applies:
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2)- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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3)- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-110-11. (set forth the amount on which the filing
fee is calculated and state how it was determined):
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4)- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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5)- --------------------------------------------------------------------------------
(5) Total fee paid:
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/ /- --------------------------------------------------------------------------------
[ ] 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)(1) Amount Previously Paid:
___________________________________________________________________________
2)previously paid:
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(2) Form, Schedule or Registration Statement No.no.:
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(3) Filing Party:
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(4) Date Filed:
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WSFS FINANCIAL CORPORATION
838 Market Street
Wilmington, Delaware 19801
(302) 792-6000
March 22, 200221, 2003
Dear Stockholder:
I am pleased to invite you to attend the Annual Meeting of Stockholders of WSFS
Financial Corporation (the "Company"), to be held at the Delaware National
Country Club, (formerly the Hercules Country Club), 400 Hercules Road, Wilmington, Delaware 19808 on Thursday, April
25, 200224, 2003 at 4:00 p.m. At this meeting, stockholders will be asked to consider a
proposal to re-elect threefour directors whose terms are expiring.expiring, to ratify the
appointment of independent auditors and to approve amendments to the 1997 Stock
Option Plan.
Your vote is important regardless of how many shares of Company stock you own.
If you hold stock in more than one account or name, you will receive a proxy
card for each account. Please sign and return each card since each represents a
separate number of shares. Postage-paid envelopes are provided for your
convenience.
You are cordially invited to attend the Annual Meeting. REGARDLESS OF WHETHER
YOU PLAN TO ATTEND THE ANNUAL MEETING, WE URGE YOU TO SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD AS SOON AS POSSIBLE. This will not prevent you from voting
in person but will assure that your vote is counted if you are unable to attend
the meeting.
Sincerely,
/s/ Marvin N. Schoenhals
-----------------------------------------------
Marvin N. Schoenhals
Chairman, President and Chief Executive Officer
WSFS FINANCIAL CORPORATION
838 Market Street
Wilmington, Delaware 19801
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on April 25, 200224, 2003
To the Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders of WSFS Financial
Corporation (the "Company") will be held at the Delaware National Country Club,
400 Hercules Road, Wilmington, Delaware 19808 on Thursday, April 25, 2002,24, 2003, at
4:00 p.m., for the purpose of considering and acting upon the following:
1. Election of threefour directors for terms of three years each.each;
2. Ratification of the appointment of independent auditors for the fiscal year
ending December 31, 2003;
3. Approval of amendments to the 1997 Stock Option Plan;
4. Such other matters as may properly come before the meeting or any
adjournment thereof.
Any action may be taken on any one of the foregoing proposals at the Annual
Meeting on the date specified above or any date or dates to which, by original
or later adjournment, the Annual Meeting may be adjourned. The Board of
Directors has fixed the close of business on March 15, 2002,14, 2003, as the record date
for the determination of stockholders entitled to notice of, and to vote, at the
meetingAnnual Meeting and any adjournment thereof.
You are requested to fill in and sign the enclosed form of proxy which is
solicited by the Board of Directors and to mail it promptly in the enclosed
envelope. The proxy will not be used if you attend and vote in person at the
Annual Meeting.
By Order of the Board of Directors,BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Mark A. Turner
-------------------------------------
Mark A. Turner
Chief Operating Officer,
Chief Financial Officer and Secretary
March 22, 200221, 2003
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE YOUR COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSUREENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
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WSFS FINANCIAL CORPORATION
838 Market Street
Wilmington, Delaware 19801
(302) 792-6000
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 25, 200224, 2003
This Proxy Statement and the accompanying proxy card are being furnished to
stockholders of WSFS Financial Corporation (the "Company") by the Board of
Directors in connection with the solicitation of proxies for use at the Annual
Meeting of Stockholders of the Company to be held on April 25, 2002,24, 2003, and at any
adjournments or postponements thereof (the "Annual Meeting"). This Proxy
Statement and the accompanying proxy card are first being mailed to stockholders
on or about March 22, 2002.24, 2003.
VOTING AND REVOCABILITY OF PROXIES
Proxies solicited by the Board of Directors of the Company will be voted in
accordance with the directions given therein. Where no instructions are
indicated, proxies will be voted FOR the nominees for directors and for the
other proposals as set forth.
Theforth herein. By signing, dating and returning the
enclosed proxy, confersyou will give us the discretionary authority on the persons named therein to vote with respect toyour shares
for the election of any person we choose as a director wherein the event that any
nominee is unable or refuses to serve or for good causeas a director. You will not serve, and with respectalso give us the
discretionary authority to vote on any matters incidentrelating to the conduct of the
Annual Meeting. If any other business is presented at the Annual Meeting,
proxies will be voted by those named thereinherein in accordance with the determination
of a majority of the Board of Directors.
Proxies marked as abstentions will not be counted as votes cast. In addition,
shares held in street name which have been designated by brokers on proxy cards
as not voted will not be counted as votes cast. Proxies marked as abstentions or
as broker no votes will be treated as shares present for purposes of determining
whether a quorum is present.
Stockholders who execute proxies retain the right to revoke them at any time.
Unless so revoked, the shares represented by properly executed proxies will be
voted at the Annual Meeting and any adjournments or postponements thereof.
Proxies may be revoked by written notice to the Secretary of the Company atsent to
the address above or by the filing of a later dated proxy prior to a vote being
taken on the proposal at the Annual Meeting. A proxy will not be voted if a
stockholder attends the Annual Meeting and votes in person. The presence of a
stockholder at the Annual Meeting alone will not revoke such stockholder's
proxy.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The securities entitled to vote at the Annual Meeting consist of the Company's
common stock, $.01 par value per share (the "Common Stock"), the holders of
which are entitled to one vote for each share of Common Stock held, except in
elections of directors, in which holders have cumulative voting rights. The
close of business on March 15, 200214, 2003 has been fixed as the record date for
determination of stockholders entitled to notice of, and to vote at, the Annual
Meeting (the "Record Date"). As of the Record Date, the Company had 9,116,5428,142,832
shares of Common Stock outstanding. The presence, in person or by proxy, of the
holders of a majority of the outstanding shares of Common Stock entitled to vote
at the Annual Meeting is required for a quorum.
1
As to the election of directors (Proposal 1), the proxy being provided by the
Board enables a stockholder to vote for the election of the nominees proposed by
the Board, or to withhold authority to vote for one or more of the nominees
being proposed. Directors are elected by a plurality of votes of the shares
present in person or represented by proxy at the Annual Meeting and entitled to
vote in the election of directors.
Ratification of the appointment of the Company's independent auditors for the
fiscal year ending December 31, 2003 (Proposal 2), requires the affirmative vote
of a majority of the votes actually cast in person or by proxy at the Annual
Meeting. Approval of the amendments to the 1997 Stock Option Plan (Proposal 3)
requires the affirmative vote of a majority of the votes eligible to be cast in
person or by proxy at the Annual Meeting. With regard to the election of
directors, votes may be cast in favor of, or withheld from, each nominee; votes
that are withheld will be excluded entirely from the vote and will have no
effect. Abstentions may be specified on all proposals except the election of
directors and will be counted as present for purposes of the proposal on which
the abstention is noted. Abstentions on the proposal to approve the amendments
to the 1997 Stock Option Plan will have the effect of a negative vote.
Abstentions will have no effect on the proposal to ratify the selection of
independent auditors. A broker non-vote (i.e., proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owners or other persons as to certain proposals on which such beneficial owners
or persons are entitled to vote their shares but with respect to which the
brokers or nominees have no discretionary power to vote their shares without
such instruction) will have no effect on the election of directors or the
ratification of the appointment of independent auditors but will have the effect
of a negative vote on the approval of the amendments to the 1997 Stock Option
Plan. Brokers who do not receive instructions are entitled to vote on the
election of directors and the ratification of the appointment of independent
auditors pursuant to discretionary voting authority but are not entitled to use
their discretionary voting authority to vote on the amendments to the 1997 Stock
Option Plan. Concerning any other matter that may properly come before the
Annual Meeting, all such matters shall be determined by a majority of votes cast
affirmatively or negatively without regard to broker non-votes, unless otherwise
required by law.
Stock Ownership of Certain Beneficial Owners
Persons and groups beneficially owning in excess of 5% of the Common Stock are
required to file certain reports with respect to such ownership pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The following
table sets forth, as of the Record Date, certain information as to those persons
who have filed the reports required of persons beneficially owning more than 5%
of the Common Stock or who were known to the Company to beneficially own more
than 5% of the Company's Common Stock outstanding at the Record Date.
Amount and Nature
Of Beneficial Percent
Name Ownership (1) of Class
- ---- ------------- --------
R. Ted Weschler (2) 1,248,011 shares 13.64%
Peninsula Capital Advisors, LLC
Peninsula Partners, L.P.
404 B East Main Street
Charlottesville, VA 22902
Wellington Management Company, LLP (3) 955,500 shares 10.45%
75 State Street
Boston, MA 02109
Quaker Capital Management Corporation (4) 920,225 shares 10.06%2
Amount and Nature
Of Beneficial Percent
Name Ownership (1) of Class
- ---- ------------------ --------
R. Ted Weschler (2) 1,332,500 shares 16.36%
Peninsula Capital Advisors, LLC
Peninsula Partners, L.P.
4048 East Main Street
Charlottesville, VA 22902
Quaker Capital Management Corporation (3) 791,235 shares 9.72%
401 Wood Street, Suite 1300
Pittsburgh, PA 15222
Wellington Management Company, LLP (4) 502,600 shares 6.17%
75 State Street
Boston, MA 02109
- --------------------
(1) In accordance with Rule 13d-3 under the Exchange Act, for the purposes of
this table, a person is deemed to be the beneficial owner for purposes of this table, of any shares of
Common Stock if he or she has or shares voting 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" is the power to vote or direct the voting of shares and "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
group exercise sole voting power over the shares of the Common Stock.
(2) Includes 1,237,0001,328,000 shares owned by Peninsula Partners, L.P., an investment
partnership and Peninsula Capital Advisors, LLC, an investment advisory
firm, both of which are controlled by R. Ted Weschler, a director of the
Company. Mr. Weschler disclaims beneficial ownership of these shares.
Shares also include 9,8112,500 shares held directly by Mr. Weschler and 1,2002,000
shares of Common Stock that may be acquired through the exercise of options
within 60 days of the Record Date.
(3) According to the Statement on Schedule 13G of Wellington Management
Company, LLP, shares are held by its investment advisory clients as to
which it shares voting or investment power.
(4) According to the Statement on Schedule 13G13G/A of Quaker Capital Management
Corporation 885,550filed on February 14, 2003, 761,060 shares are held by its
investment advisory clients as to which it disclaims beneficial ownership.
Quaker Capital Management Corporation has shared voting and investment
power with respect to 558,250433,760 shares.
2(4) According to the Statement on Schedule 13G/A of Wellington Management
Company, LLP filed on February 12, 2003, shares are held by its investment
advisory clients as to which it shares voting or investment power.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Officers, directors and Associates of the Company and its subsidiaries have an
interest in a matter being presented for stockholder approval. Upon stockholder
approval of the amendments to the 1997 Stock Option Plan, officers, directors
and Associates of the Company and its subsidiaries may be granted additional
stock options under the 1997 Stock Option Plan. The approval of the amendments
to the 1997 Stock Option Plan is presented herein as Proposal 3.
3
PROPOSAL 1 -- ELECTION OF DIRECTORS
The number of directors is currently fixed at eleven members. The Board of
Directors is divided into three classes. The members of each class are elected
for a term of three years and until their successors are elected and qualified;
provided that in the event the number of directors has been increased during the
preceding year and such new directorships have been filled by action of the
Board of Directors, the terms of those newly appointed directors expire at the
annual meeting when the class to which they have been elected expires. With one
exception,Other
than Mr. Dale E. Wolf, a director emeritus of the Bank, each of the current
members of the Board of Directors of the Company also serves on the Board of
Directors of the Company's principal subsidiary, Wilmington Savings Fund
Society, Federal Savings Bank ("WSFS" or the "Bank"). The exception is Mr. Dale Wolf who is a director emeritus of the Bank. In
accordance with the Delaware General Corporation Law, directorsDirectors of the Company
will beare elected by a plurality vote of the outstanding shares of Common Stock
present in person or represented by proxy at the Annual Meeting.
Pursuant to the Company's certificateCertificate of incorporation,Incorporation, every stockholder voting
for the election of directors is entitled to cumulate his or her votes by
multiplying his or her shares times the number of directors to be elected. Each
stockholder will be entitled to cast his or her votes for one director or
distribute his or her votes among any number of the nominees being voted on at
the Annual Meeting. The Board of Directors intends to vote the proxies solicited
by it equally among the threefour nominees of the Board of Directors. Stockholders
may not cumulate their votes on the form of proxy solicited by the Board of
Directors. In order to cumulate votes, stockholders must attend the meeting and
vote in person or make arrangements with their own proxies. Unless otherwise
specified in the proxy, however, the right is reserved, in the sole discretion
of the Board of Directors, to distribute votes among some or all of the nominees
of the Board of Directors in a manner other than equally so as to elect as
directors the maximum possible number of such nominees.
At the Annual Meeting, threeit is expected that four directors will be elected for
terms of three years each and until their successors have been elected and
qualified. The Board of Directors has nominated Charles G. Cheleden, Joseph R. JulianLinda C. Drake, David E.
Hollowell, Claibourne D. Smith and Dale E. WolfEugene W. Weaver, all of whom are currently
directors, for election as directors at the Annual Meeting. If any nominee is
unable to serve, the shares represented by all properly executed proxies will be
voted for the election of such substitute as the Board of Directors may
recommend orrecommend. Alternatively, the Board of Directors may elect to reduce the number
of authorized directors to eliminate the vacancy.
3The Board of Directors Recommends Voting "FOR" the Directors Nominated in
Proposal One.
4
Directors and Nominees
The following table sets forth information for each nominee and each director
continuing in office, includingoffice. It includes their name, age (as of December 31, 2001)2002),
year first elected or appointed as a director of the Company, year of expiration
of current term as a director of the Company, principal occupation for at least
the last five years and directorships in subsidiaries of the Company and in
other companies:
Year First Current
Elected or Term
Appointed to
Name Age Director Expire Principal Occupation Directorship(s)
- ---- ---- -------- ------ -------------------- ---------------
NOMINEES FOR A TERM TO EXPIRE IN 2005
Charles G. Cheleden 58 1990 2002 October 1992 to present:2006
Linda C. Drake 54 1999 2003 Founder and Chair WSFS;
TCIM Services, Inc. TCIM Services, Inc.;
(a direct marketing and LTD Direct
business services company)
David E. Hollowell 55 1996 2003 Executive Vice President and WSFS
University Treasurer
University of Delaware
Claibourne D. Smith 64 1994 2003 Vice President - Technology and WSFS
Professional Development, E.I.
duPont de Nemours & Company,
Incorporated, (multinational
chemical and energy company)
(1964-1998) (retired)
Eugene W. Weaver 70 1998 2003 Vice President of Finance of WSFS;
Star States Development
ChairmanJohn W. Rollins & Associates Dover Motorsports, Inc.
(Investment Management
Company), Chief Financial
Officer/Senior Vice President
of WSFS Financial Company
Corporation; August 1990 to
October 1992: Chairman WSFS
Financial Corporation;
January 1990 to present:
self-employed attorney
Joseph R. Julian 64 1988 2002 President, JJID,Dover Downs Entertainment,
Inc. WSFS; JJID, Inc.
(highway construction company)
Dale E. Wolf 77 1993 2002 March 1998 to present: WSFS (emeritus);
Vice Chairman of WSFS WSFS Credit Corp.;
Financial Corporation; Daynel International, Inc;
1989-1993, Lieutenant Emerald Bio Corporation
Governor/Governor of the SocraticLaw.com
State of Delaware(1970-1999) (retired)
45
DIRECTORS CONTINUING IN OFFICE
Year First Current
Elected or Term
Appointed to
Name Age Director Expire Principal Occupation Directorship(s)
- ---- ---- -------- ------ -------------------- ---------------
DIRECTORS CONTINUING IN OFFICE
Linda C. Drake 53 1999 2003 Founder and Chair WSFS; TCIM Services, Inc.
TCIM Services, Inc.
(a direct marketing and
business services company)
David E. Hollowell 54 1996 2003 Executive Vice President, WSFS
University of Delaware
Claibourne D. Smith 63 1994 2003 Vice President - Technology and WSFS;
Professional Development, E.I. Wilmington National Finance, Inc.
duPont de Nemours & Company,
Incorporated, (multinational
chemical and energy company)
(1964-1998) (retired)
Eugene W. Weaver 69 1998 2003 Vice President of Finance of WSFS; Dover Downs
John W. Rollins & Associates Entertainment, Inc.
(Investment Management
Company), Chief Financial
Officer/Senior Vice President
of Dover Downs Entertainment,
Inc. (1970-1999) (retired)
John F. Downey 6465 1998 2004 Executive Director of the WSFS
Office of Thrift Supervision (OTS),
1989-1998 (retired)
Thomas P. Preston 5556 1990 2004 Partner, Blank Rome, LLP; WSFS
previously Partner,
Reed Smith, LLP; WSFS; Wood Royalty
previously Partner, Management CompanyLLP and
Duane, Morris & Heckscher LLP
(Law firms)
Marvin N. Schoenhals 5455 1990 2004 Chairman of WSFS Financial WSFS;
Star States Development
Corporation since 1992; President Company; WSFS Credit Corporation;
and Chief Executive Officer of Corporation;WSFS Investment Group, Inc.;
WSFS Financial Corporation 838 Investment Group, Inc.;WSFS Reit Inc;
since November 1990 Wilmington National Finance, Inc;
CustomerOne Financial Network, Inc.; Federal Home Loan Bank of
Pittsburgh;
Brandywine Fund, Inc.;
Brandywine Blue Fund, Inc.;
Brandywine Advisors Fund, Inc.;
Burris Foods, Inc.
R. Ted Weschler 4041 1992 2004 Since January 2000, Managing Member, WSFS; Star States Development
Partner of
Peninsula Capital Company; CustomerOne Financial
Advisors, L.L.C., an investment Network;LLC, Virginia National Bank;
an investment advisory firm; First Avenue Networks, Inc.
October 1989 to Nucentrix Broadband Networks;
December 1999,
Executive First Avenue NetworksPartner and Officer of Quad-C,
Inc., a Delaware corporation which
acts as the general partner for
several investment partnerships
Charles G. Cheleden 59 1990 2005 October 1992 to present: Vice WSFS
Chairman of Quad-C,WSFS Financial
Corporation; August 1990 to
October 1992: Chairman, WSFS
Financial Corporation;
January 1990 to present:
self-employed attorney
Joseph R. Julian 65 1988 2005 President, JJID, Inc., a
Delaware corporation which
acts as WSFS;
(highway construction company) JJID, Inc.
Dale E. Wolf 78 1993 2005 March 1998 to present: WSFS (emeritus);
Vice Chairman of WSFS WSFS Credit Corp.;
Financial Corporation; Emerald BioAgriculture
1989-1993, Lieutenant Corporation;
Governor/Governor of the general partner for
several investment partnershipsSocratic Law.com
State of Delaware
56
Stock Ownership of Management
The following table sets forth, as of the Record Date, the amount of Common
Stock beneficially owned by the Company's directors, by each of the named
executive officer
namedofficers in the Summary Compensation Table, and by all directors and
executive officers as a group:
Amount and Nature
of Beneficial Percent
Name Ownership (1) of Class (2)
- ---- ----------------- ------------
Charles G. Cheleden (3)(4) 40,900 shares *
John F. Downey (4)(5) 3,600 shares *
Linda C. Drake (6) 3,100 shares *
David E. Hollowell (4) 10,200 shares *
Joseph R. Julian (4) 62,376 shares *
Thomas P. Preston (4)(7) 8,481 shares *
Marvin N. Schoenhals (8) 357,138 shares 3.83%
Claibourne D. Smith (4) 4,930 shares *
Eugene W. Weaver (4)(9) 8,200 shares *
R. Ted Weschler (4)(10) 1,248,011 shares 13.64%
Dale E. Wolf (4) 24,840 shares *
Karl L. Johnston (11) 34,746 shares *
Mark A. Turner (12) 57,150 shares *
Deborah A. Powell (13) 5,297 shares *
Directors and executive officers
as a group (14 persons) 1,868,969 shares 19.88%
Amount and Nature
of Beneficial Percent
Name Ownership (1) of Class (2)
- ---- ----------------- ------------
Charles G. Cheleden (3)(4) 37,600 shares *
John F. Downey (4)(5) 4,900 shares *
Linda C. Drake (6) 3,700 shares *
David E. Hollowell (4) 11,500 shares *
Joseph R. Julian (4) 63,676 shares *
Thomas P. Preston (4)(7) 6,010 shares *
Marvin N. Schoenhals (8) 398,852 shares 4.76%
Claibourne D. Smith (4) 5,730 shares *
Eugene W. Weaver (4)(9) 9,500 shares *
R. Ted Weschler (4)(10) 1,332,500 shares 16.36%
Dale E. Wolf (4) 26,140 shares *
Karl L. Johnston (11) 57,574 shares *
Mark A. Turner (12) 83,009 shares 1.01%
Deborah A. Powell (13) 12,407 shares *
Directors and executive officers
as a group (14 persons) 2,053,098 shares 24.06%
- --------------------
* Less than 1.0%.
(1) For purposes of this table, a person is deemed to be the beneficial owner
of any shares of Common Stock over which he or she has or shares voting or
investment power or of which he or she has the right to acquire beneficial
ownership within 60 days of the Record Date. As used herein, "voting power"
is the power to vote or direct the voting of shares and "investment power"
is the power to dispose or direct the disposition of shares. Other than as
noted below, all persons shown in the table above have sole voting and
investment power, except that the following directors and executive
officers held the following numbers of shares jointly with their respective
spouses: Mr. Cheleden, 18,00016,500 shares; Ms Drake, 5002,500 shares; Mr.
Hollowell, 6,5007,000 shares; Mr. Julian, 59,176 shares; Mr. Johnston, 1,500
shares; and Mr. Turner, 7,780 shares.
(2) In calculating the percentage ownership of each named individual and the
group, the number of shares outstanding is deemed to include any shares of
the Common Stock which the individual or the group has the right to acquire
within 60 days of the Record Date.
(3) Includes 16,700 shares of Common Stock held in an Individual Retirement
Account ("IRA"), 2,200 shares of Common Stock which are held in an IRA for
Mr. Cheleden's wife, 1,800200 shares of Common Stock held by Mr. Cheleden's
children, over which he has power of attorney. Mr. Cheleden disclaims
beneficial ownership of his wife's shares.
(4) Includes 1,2002,000 shares of Common Stock that may be acquired through the
exercise of options within 60 days of the Record Date.
(5) Includes 600 shares of Common Stock held in an IRA.
(6) Includes 6001,200 shares of Common Stock that may be acquired through the
exercise of options within 60 days of the Record Date.
(7) Includes 1,275 shares of Common Stock held in an IRA.
(8) Includes 32,06933,179 shares of Common Stock held in Mr. Schoenhals' account in
the Company's 401(k) Plan and 168,877244,326 shares of Common Stock that may be
acquired through the exercise of options within 60 days of the Record Date.
(9) Includes 1,000 shares of Common Stock held in an IRA and 1,000 shares of
Common Stock held by Mr. Weaver's wife. Mr. Weaver disclaims beneficial
ownership of his wife's shares.
(10) Includes 1,237,0001,328,000 shares held by Peninsula Partners, L.P., an investment
firm managed by Peninsula Capital Advisors, LLC of which Mr. Weschler is
the Managing Member. Mr. Weschler disclaims beneficial ownership of the
shares held by Peninsula Partners, L.P.
6(Footnotes continued on next page)
7
(11) Includes 4,2665,074 shares of Common Stock held in Mr. Johnston's account in the
Company's 401(k) Plan 300 shares owned by Mr. Johnston's son and 28,68051,000 shares of Common Stock that may be
acquired through the exercise of options within 60 days of the Record Date.
(12) Includes 6,3187,841 shares of Common Stock held in Mr. Turner's account in the
Company's 401(k) Plan and 40,55264,888 shares of Common Stock that may be
acquired through the exercise of options within 60 days of the Record Date.
(13) Includes 4771,227 shares of Common Stock held in Ms Powell's account in the
Company's 401(k) Plan and 4,82011,180 shares of Common Stock that may be
acquired through the exercise of options within 60 days of the Record Date.
Meetings and Committees of the Board of Directors
The Board of Directors conducts its business through its meetings and the
meetings of its committees. During the year ended December 31, 20012002 the Board of
Directors held 1110 meetings. All directors attended more than 75% of the total
aggregate meetings of the Board of Directors and committees on which such Board
member served during this period.
A list of the Committees of the Board of Directors and a general description of
their respective duties follows.
Executive Committee. The Executive Committee is scheduled to meet one time each
month and as needed, and exercises the powers of the Board of Directors between
meetings of the Board. The Executive Committee is presently composed of Marvin
N. Schoenhals, Chairman, Charles G. Cheleden, David E. Hollowell, Eugene W.
Weaver and R. Ted Weschler. The Executive Committee met 1720 times during 2001.2002.
Corporate Governance and Nominating Committee. During 2002 the Board created the
Corporate Governance and Nominating Committee consisting of directors who are
not officers of the Company. The purpose of this committee is: (i) to recommend
to the Board the corporate governance guidelines and policies applicable to the
Company; (ii) to assist the Board by identifying individuals qualified to become
Board members, (iii) to recommend to the Board the director nominees for the
next annual meeting of stockholders, (iv) to lead the Board in its annual review
of the Board's performance, and (v) to recommend to the Board director nominees
to each committee. The Committee will also consider nominees recommended by
stockholders in accordance with the procedures set forth in the bylaws of the
Company. Present members of the Corporate Governance and Nominating Committee
are Charles G. Cheleden, Chairman, Linda C. Drake, Dale E. Wolf and John F.
Downey. The Corporate Governance and Nominating Committee met twice during 2002.
Audit Committee. The Audit Committee is composed of directors who are not
officers of the Company. The Board of Directors has adopted a written charter
for the Audit Committee. The Committee oversees the audit program and reviews
the financial statements of the Company and its subsidiaries. It reviews the
examination reports of federal regulatory agencies as well as reports of the
internal auditors and independent auditors. The Audit Committee meets quarterly
with the head of the Audit Department and representatives of the Company's
independent auditors, with and without representatives of management present, to
review accounting and auditing matters, including an annualto review offinancial statements prior to
their public release. They also meet annually to review the Company's risk
analysis and
the associated audit plan. The Board of Directors appoints the
independent auditors upon the recommendation of the Audit Committee. Present
members of the Audit Committee are Thomas P. Preston, Chairman, Joseph R.
Julian, John F. Downey and Eugene W. Weaver. Each member of the Audit Committee
is "independent" as defined in the listing standards of the National Association
of Securities Dealers. The Audit Committee met 9nine times during fiscal year
2001.
Nominating Committee. The Nominating Committee consists of the entire Board of
Directors and considers candidates for nomination for election as directors. The
Nominating Committee will consider nominees recommended by stockholders in
accordance with the procedures set forth in the bylaws of the Company. The Board
of Directors met once as a Nominating Committee during 2001.2002.
8
Personnel and Compensation Committee. The Personnel and Compensation Committee
("Personnel Committee") is composed of directors who are not officers of the
Company. The Personnel Committee reviews and recommends to the Board of
Directors, for their approval, the compensation and benefits of the executive
officers, broad guidelines for the salary and benefits administration of other
officers and employees,Associates, and the compensation of directors. In addition, the
Personnel Committee is responsible for the overseeing the administration of the
1986 Stock Option Plan and the 1997 Stock Option Plan (the "Stock Option Plans")
and the executive incentive plans, including recommendations to the Board of
Directors for awards under such plans. Present members of the Personnel
Committee are Charles G. Cheleden, Chairman, David E. Hollowell, Chairman, Linda C. Drake, Claibourne D. Smith
and Dale E.
Wolf.R. Ted Weschler. The Personnel Committee met two times during 2001.
7
2002.
Directors' Compensation. During 2001,2002, each non-employeenon-Associate director received an
annual retainer of $9,000 plus 500 shares of the Company's Common Stock and a
grant of 1,000 shares under the 1997 Stock Option Plan. Chairpersons of board
committees or subsidiary boards received an additional $1,000 annual retainer,
and each member of a committee or subsidiary board received $400 for each
meeting attended. Mr. Schoenhals does not receive director fees as Chairman,
President and Chief Executive Officer. Beginning in June 2002, Mr. Cheleden
received monthly compensation of $1,500 in lieu of a meeting fee for chairing
the Corporate Governance and Nominating Committee. He received meeting fees for
other meetings attended.
EXECUTIVE OFFICERS
Marvin N. Schoenhals, age 54,55, has served as President and Chief Executive
Officer of the Company since November 1990 and was elected Chairman in October
1992. Mr. Schoenhals was elected to the Board of Directors of the Federal Home
Loan Bank of Pittsburgh in 1997, and to the Board of Directors of Brandywine
Fund, Inc., Brandywine Blue Fund, Inc. and Brandywine Advisors Fund, Inc.Inc in
1998 and
to the Board of Directors of CustomerOne Financial Network, Inc. and Wilmington
National Finance, Inc. in 1999.1998. He is also a volunteer board member of numerous community-based
organizations.
Karl L. Johnston, age 53,54, serves as Chief Operating Officer and Chief Lending
Officer. Mr. Johnston joined the Bank in May 1997 as Chief Lending Officer. He
was also appointed Chief Operating Officer in 2001. Mr. Johnston has over 3132
years of banking experience in the Bank's local market area. Prior to joining
the Bank, Mr. Johnston spent his banking career at the Delaware Trust Company
where he was Executive Vice President and Commercial Banking Group executive.
When Delaware Trust was merged into CoreStates Bank, he was a Senior Vice
President responsible for middle market business relationships for the State of
Delaware, Delaware County, Pennsylvania and northern Maryland and Virginia.
Mark A. Turner, age 39, serves as Chief Operating Officer, and Chief Financial
Officer.Officer and Corporate Secretary. He has served as Chief Financial Officer and
Corporate Secretary since May 1998. He was also appointed Chief Operating
Officer in 2001. Mr. Turner joined the Company in 1996 as Managing Vice
President and Controller. From 1994 to 1996 Mr. Turner was Vice President of
Finance for the Capital Markets Division of Meridian Bank, and Vice President of
Corporate Development for Meridian Bancorp, both in Reading, Pennsylvania. Prior
to that, he was a Senior Audit Manager with KPMG LLP in Philadelphia,
Pennsylvania.
9
Deborah A. Powell, age 45,46, has served as Executive Vice President and Director
of Human Resources since May 2000. Before joining WSFS,From November 1997 to May 2000, Ms Powell was
Vice President of Human Resources at Huffy Service First, a national retail
services company, fromcompany. From November 19971996 to May 2000. Prior to that,October 1997, she was Human Resources
Manager of The Limited-Alliance Data System, a retail call center operation,
from November 1996 to October 1997.operation.
From 1991 to 1996, she was National Practice Director of Midwest Resources,
Inc., a Human Resources and Organizational Development consulting practice.
8
Audit Committee Report
In accordance with rules established by the SEC, the Audit Committee has
prepared the following report for inclusion in this proxy statement:
As part of its ongoing activities, the Audit Committee has:
o Reviewed and discussed with management the Company's audited consolidated
financial statements for the fiscal year ended December 31, 2001;2002;
o Discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61, Communications with
Audit Committees, as amended; and
o Received the written disclosures and the letter from the independent
accountants required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees, and has discussed with the
independent accountants 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 the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 20012002 for filing with the SEC.
The Audit Committee comprised of Messrs. Preston, Julian, Downey and Weaver has
provided this report.
Personnel and Compensation Committee Report on Executive Compensation
Overview and Philosophy. The Personnel Committee administersoversees the Company's
executive compensation program. The Personnel Committee's responsibilities
include reviewing and making recommendations to the Board of Directors regarding
compensation of the Chief Executive Officer and reviewing and approving the
compensation paid to other executive officers of the Company (the "Named
Executive Officers") listed in the "Summary Compensation Table" that follows
this report. The Committee also administers stock option and incentive plans and
administers compliance with Rule 16b-3 of the Exchange Act.
The objective of the compensation program is to establish levels of compensation
sufficient to attract and retain highly qualified and motivated executives. The
program also seeks to align the interests of the Company's executive management
with those of stockholders through the use of both incentive-based compensation
for specific performance based criteria and stock-based compensation for
long-term stockholder value.
Compensation Program Elements. The Company's executive compensation program
consists of base salaries, a short-term cash incentive plan, a stock option plan
and miscellaneous other fringe benefits.
10
Base Salary. Base salary levels are determined by the Personnel Committee
with reference to corporate and individual performance in relation to
strategic goals established each year, competitive market trends and
special circumstances particular to the Company's staffing needs. In
determining base salaries, the committee refers to data obtained from
nationally recognized compensation surveys as well as information from
similar-sized banks and thrifts in the Mid-Atlantic region.
9
Short-Term Incentive Plan. The Board of Directors approved a Management
Incentive Program (MIP) designed to reward the accomplishment of specific
corporate and individual performance criteria. For 2001,2002, the corporate
performance criteria were: return on assets, return on equity level of net income,and growth in
earnings per share and the efficiency ratio.share. Plan participants include members of management from
certain vice presidents to the Chief Executive Officer. Each year the
Personnel Committee establishes a bonus pool based on the level and quality
of the Company's earnings as compared to its plan.
Individual awards are earned for successfully attaining objectives based on
the fourthree criteria above, and in completion of specific individual
performance criteria. Total awards accrued under the MIP during 20012002 were
approximately $932,200$1,624,000 and were paid in cash during 2002.2003. This amount
does not include approximately $982,500$1,032,000 of bonuses earned in 2001,2002, and
paid in cash during 2002,2003 to executives at Wilmington National Finance, Inc, a
51%
ownedmajority-owned subsidiary of the Bank.Bank that was sold in January 2003.
Stock Options. As a performance incentive, to encourage ownership of Common
Stock and to further align the interests of management and stockholders,
the Personnel Committee issues stock options under the 1997 Stock Option
Plan. Under that Plan, the Personnel Committee issued 196,500125,075 stock options
in 2001.2002. The Personnel Committee periodically reviews and awards stock
options to management based on factors it deems important; however, the
Personnel Committee is not required to issue awards on an annual basis.
Compensation of the Chief Executive Officer. For fiscal year 2001,2002, Mr.
Schoenhals earned $322,500$366,250 in base salary. Mr. Schoenhals earned $175,000$449,400 in
bonus for fiscal year 20012002 under the MIP that was paid after the end of the
fiscal year. ThisIn addition, Mr. Schoenhals earned a special bonus reflectsof $225,000 as a
result of the extraordinary performance of the Company during 2002. These
bonuses reflect the Company's achievement of specific financial goals for the
20012002 fiscal year as well as the Personnel Committee's assessment of Mr.
Schoenhals' contribution to the achievement of those goals. Factors considered
by the Personnel Committee in assessing Mr. Schoenhals' contribution included
his leadership role in formulating and executing the Company's business
strategy. In addition to the foregoing cash compensation, Mr. Schoenhals was
awarded options to purchase 26,30016,800 shares of Common Stock under the 1997 Stock
Option Plan representing 13.4% of the regular options granted to all employeesAssociates
during the year.
Compensation Committee Interlocks and Insider Participation. During fiscal year
2001,The Company had no
"interlocking" relationships existing on or after December 31, 2002 in which (i)
any executive officer is a member of the Board of Directors of another financial
institution, one of whose executive officers is a member of the Company's Board
of directors, or where (ii) any executive officer is a member of the
compensation committee of another entity, one of whose executive officers is a
member of the Company's Board of Directors. See "Business Relationships and
Related Transactions" for information regarding other relationships such persons
may have with the Company.
Present members of the Personnel Committee were considered insiders nor were
there any interlocking relationships or relationships withare David E. Hollowell, Chairman,
Linda C. Drake, Claibourne D. Smith and R. Ted Weschler, each of whom are
directors of the Company other
than as disclosed in the "Business Relationships and Related Transactions"
section of this Proxy Statement.
The Personnel and Compensation Committee comprised of Messrs. Cheleden,
Hollowell, and Wolf and Ms Drake has provided this report.
10Company.
11
COMPARATIVE STOCK PERFORMANCE GRAPH
The graph and table which follow show the cumulative total return on the Common
Stock of the Company over the last five years compared with the cumulative total
return of the Dow Jones Total Market Index and the Nasdaq Bank Index over the
same period.period as obtained from Bloomberg L.P. Cumulative total return on the
Common Stock or the index equals the total increase in value since December 31,
1996,1997, assuming reinvestment of all dividends paid into the Common Stock or the
index, respectively. The graph and table were prepared assuming that $100 was
invested on December 31, 19961997 in the Common Stock of the Company and in each of
the indexes. InThere can be no assurance that the previous fiscal year,Company's future stock
performance will be the same or similar to the historical stock performance
shown in the graph below. The Company included theneither makes nor endorses any predictions
as to stock performance.
CUMULATIVE TOTAL SHAREHOLDER RETURN
COMPARED WITH PERFORMANCE OF SELECTED INDEXES
December 31, 1997 through December 31, 2002
[GRAPHIC OMITTED]
Cumulative Total Return
---------------------------------------------
1997 1998 1999 2000 2001 2002
---------------------------------------------
WSFS Financial Corporation $100 $ 85 $ 64 $ 66 $ 90 $172
Dow Jones Savings & Loan
AssociationsTotal Market Index in this graph. The Company has elected to replace it with the100 123 149 134 117 89
Nasdaq Bank Index because the new index includes a broader selection of
like-financial institutions, including those that would be considered "peers" of
the Company.
In this transition year, the table below includes the comparative performance of
the new index with the replaced index.
CUMULATIVE TOTAL SHAREHOLDER RETURN
COMPARED WITH PERFORMANCE OF SELECTED INDEXES
December 31, 1996 through December 31, 2001
Cumulative Total Return
-----------------------------------------------------------
1996 1997 1998 1999 2000 2001
-----------------------------------------------------------
WSFS Financial Corporation $100 $196 $167 $126 $130 $176
Dow Jones Total Market Index 100 130 160 194 174 151
Nasdaq Bank Index (new index) 100 166 149 141 165 185
Dow Jones Savings & Loan Assn. Index
(replaced index) $100 $160 $142 $108 $190 $186
11100 90 85 99 112 119
12
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation for the years ended December 31,
2002, 2001 2000 and 19992000 for the Company's Chief Executive Officer and the three
other most highly compensated executive officers of the Company whose salary and
bonus earned in 20012002 exceeded $100,000 (herein referred to as "Named Executive
Officers").
Long Term
Compensation
Awards
Securities
Name and Underlying All Other
Principal Position Year Salary Bonus (1) Options (2) Compensation (3)
- ------------------ ---- ------ --------- ----------- ----------------
Marvin N. Schoenhals 20012002 $ 322,500 $175,000 26,300 $11,900366,250 $674,400 16,800 $15,614
Chairman of the Board, 2001 322,500 175,000 26,300 11,900
President and Chief 2000 319,375 -- 162,600 11,900
President and Chief 1999 297,600 100,000 156,445 11,200
Executive Officer
Karl L. Johnston 2002 198,333 255,400 20,100 15,614
Chief Operating Officer 2001 184,583 100,000 42,800 11,900
and Chief OperatingLending Officer 2000 169,167 15,000 18,900 11,900
and Chief Lending Officer 1999 163,750 53,000 14,500 11,200
Mark A. Turner 2002 198,333 334,400 22,900 14,741
Chief Operating Officer, 2001 181,307 125,000 21,000 11,900
Chief OperatingFinancial Officer 2000 155,399 21,000 56,000 11,900
Chief Financial Officer 1999 123,540 68,000 21,980 11,098
and Secretary
Deborah A. Powell 2002 144,167 66,700 4,300 15,261
Executive Vice President, 2001 140,000 44,100 7,700 6,690
Executive Vice President, 2000 84,695 30,000 24,100 --
Director, Human Resources 1999 -- -- --2000 84,695 30,000 24,100 --
- --------------------
(1) For 2002, includes special bonuses paid in December 2002 to Messrs.
Schoenhals, Johnston and Turner resulting from the extraordinary
performance of the Company. For each fiscal year, includes bonuses earned but not paid
until the following fiscal year under the Company's Management Incentive
Program.
(2) Represents stock options granted under the Company's 1997 Stock Option
Plan.
(3) Represents contributions made by the Company to the individual's account in
the Company's 401(k) Plan.
1213
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the grant of stock options
under the Company's 1997 Stock Option Plan to the Chief Executive Officer and
each of the other Named Executive Officers during 2001.2002.
Potential Realizable
Value at Assumed
Number of % of Total Annual Rates of Stock
Securities Options Price Appreciation
Underlying Granted to for Option Term (3)
Options EmployeesAssociates in Exercise Expiration -----------------------------------------
Name Granted (1) Fiscal Year Price (2) Date 5% 10%
- ---- ----------- ------------------------ --------- ---- --- ------------- -------- ---------
Marvin N. Schoenhals 26,300 13.4% $17.2016,800 13.4 % $33.40 12/19/2011 $284,4872012 $352,885 $ 720,945894,281
Karl L. Johnston 25,000 12.7 13.02 4/26/2011 204,705 518,763
17,800 9.1 17.2010,000 8.0 17.35 02/29/2012 109,113 276,514
10,100 8.1 33.40 12/19/2011 192,542 487,9402012 212,151 537,633
Mark A. Turner 21,000 10.7 17.2010,000 8.0 17.35 02/29/2012 109,113 276,514
12,900 10.3 33.40 12/19/2011 227,157 575,6602012 270,966 686,680
Deborah A. Powell 7,700 3.9 17.204,300 3.4 33.40 12/19/2011 83,291 211,0752012 90,322 228,893
- --------------------
(1) Options vest and become exercisable at the rate of 20% per year beginning
one year from grant date, and expire ten years from the grant date. To the
extent not already exercisable, the options generally become immediately
exercisable in the event of a change in control of the Company, generally
defined as the acquisition of beneficial ownership of 25% or more of the
Company's voting securities by any person or group of persons. The Stock Option Plan permitsCompany
has previously adopted a program permitting the award of a reload option
that allows for the additional grant of options under certain
circumstances. If the grantee uses cash to exercise options within one year
of the options becoming vested, the optionee willmay, within the discretion of
the Stock Option Committee, receive an equivalent number of additional
options (at the then current market price). The original shares received
upon exercise must be held for two years from the date of receipt for the
reload options to vest. The reload options also vest in 20% annual
increments. Reload options will not be granted if no shares are available
for issuance under the 1997 Stock Option Plan.
(2) In each case, the exercise or base price was no lower than the fair market
value of the Common Stock on the date of grant.
(3) The potential realizable dollar value of a grant consists of the product
of: (a) the difference between (i) the product of the per share market
price at the time of grant and the sum of 1 plus the adjusted stock price
appreciation rate (the assumed rate of appreciation compounded annually
over the term of the option) and (ii) the per share exercise price of the
option; and (b) the number of securities underlying the grant at fiscal
year-end.
1314
OPTION EXERCISES AND YEAR-END OPTION VALUE
The following table sets forth information concerning the exercise of options by
the Chief Executive Officer and the other Named Executive Officers during the
last fiscal year, as well as the value of such options held by such persons at
the end of the fiscal year.
Value of Securities
Number of Securities Underlying Unexercised
Underlying Unexercised In-the Money Options
Options at Fiscal Year End at Fiscal Year End (1)
-------------------------- -------------------------------------------------- ---------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
Marvin N. Schoenhals 137,117 259,688 $440,602 $721,928212,566 201,039 $4,006,562 $3,458,556
Karl L. Johnston 23,680 71,920 81,983 233,22342,800 72,900 826,840 1,171,641
Mark A. Turner 31,612 83,488 116,658 307,17453,948 84,052 1,051,086 1,362,413
Deborah A. Powell 4,820 26,980 29,145 117,73611,180 24,920 236,845 417,253
- --------------------
(1) Based on the closing price of $17.35$32.97 per share as reported for the Common
Stock on the Nasdaq National Market on December 31, 20012002 less the exercise
price. Options are considered in-the-money if the market value of the
underlying securities exceeds their exercise prices.
SEVERANCE POLICY
In 2001, WSFS adopted a severance policy that provides benefits to its Chief
Operating Officers and Executive Vice Presidents (collectively, the
"Executives"). The policy provides for payments in the event of being released
without cause or change of control.
Release without cause - In the event an Executive is released without cause, a
minimum of six months severance and one year of professional level outplacement
will be offered. If the former Executive does not find new employment within six
months after termination, severance pay would continue for another six months,
or until the former Executive found employment, whichever occurs first. If the
former Executive finds another job at a lower rate of pay than previously
received at WSFS, then WSFS would make up the difference until the second
six-month period ends. Health benefits would continue at the Associate rate
through the severance period.
Change in control - Benefits would be paid to an Executive released without
cause within one year of change in control or if offered a position that is not
within 35 miles of their current work-site and at their current WSFS salary and
bonus opportunity. The Executive would receive 24 months base salary severance
offset by the value arising from the acceleration of stock option vesting
triggered by the change in control. The value of the accelerated vesting would
account for no more than 12 months of the 24-month minimum commitment. Twelve
months of executive level outplacement will be offered and health benefits would
continue at the Associate rate through the 24-month period.
In the event an Executive decides to leave WSFS after being offered the same
salary and bonus opportunity and the position is within 35 miles of their work
location, then the value of the severance benefit will equal at least 12 months
base pay. If the value of the accelerated vesting of stock options is less than
12 months of base pay, then severance pay will be added to the value of the
accelerated options to equal 12 months of base pay. No additional severance will
be paid if the value of accelerated options is greater than, or equal to, 12
months of base pay. Six months of professional level outplacement will be
offered and health benefits would continue at the Associate rate through the
12-month period.
15
Based on salary levels at December 31, 2001,2002, the maximum benefit that would be
received by each Executive under the WSFS severance policy, exclusive of health
benefit and executive outplacement costs, would be as follows: Mr. Johnston
$380,000,$400,000, Mr. Turner $380,000$400,000 and Ms Powell $280,000.
14
$288,000.
BUSINESS RELATIONSHIPS AND RELATED TRANSACTIONS
During 2001,2002, Thomas P. Preston was a partner with the law firm of Reed Smith,
LLP. The law firm represented the Company and its affiliates in certain matters
during fiscal year 2001.2002. In January 2003, Mr. Preston became a partner with the
law firm of Blank Rome, LLP. The Company expects Mr. Preston to continue such
representation in fiscal year 2002.2003.
Certain directors and executive officers of the Company and their associates
were customers of, and had transactions with, the Company and the Bank in the
ordinary course of business during fiscal year 2001.2002. Similar transactions may be
expected to take place with the Company and the Bank in the future. Loans and
commitments included in such transactions were made on substantially the same
terms, including interest rate and collateral, as those prevailing at the time
for comparable transactions with other persons and did not involve more than the
normal risk of collectibility, nor did such loans present other unfavorable
features.features to the Company. Loans and commitments to directors and executive
officers of the Company by the Bank are subject to limitations and restrictions
under Federal banking laws and regulations with which the Bank believes it has
complied in all material respects.
16
PROPOSAL 2 - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company, expectsupon recommendation of the Audit
Committee, has re-appointed, subject to appointstockholder ratification, KPMG LLP, as
independent auditors of the Company for the year endedending December 31, 2002.2003. KPMG
LLP has served as the Company's independent auditors since 1994. A
representative of KPMG LLP is 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 following table presents feesPrincipal Accounting Firm Fees
Audit Fees. For the year ended December 31, 2002, the Company paid
approximately $387,000 to the Company's independent auditor, KPMG LLP, for
professional services rendered in connection with the audit of the annual
financial statements and review of the quarterly financial statements. These
fees also included the audit of the Company's subsidiaries, Wilmington Finance,
Inc. and CustomerOne Financial Network (C1FN).
Financial Information Systems Design. There were no fees billed by KPMG LLP
for professional services rendered for information technology services relating
to financial information systems design and implementation for the fiscal year
ended December 31, 2002.
Audit Related Fees. The fees billed by KPMG LLP for the fiscal year ended
December 31, 2002 amounted to approximately $32,000 for professional services
rendered in connection with the audit of financial statements of certain
Associate benefit plans, the audit of C1FN's brokerage unit and the sale of the
Company's reverse mortgage portfolio.
Tax Fees. Tax fees consisted of professional services rendered by KPMG LLP
for the audit of the Company's annual financial statementsfiscal year ended December 31, 2002 for 2001,tax consultation and tax
compliance services. These fees amounted to approximately $191,000.
All Other Fees. The aggregate fees billed by KPMG LLP for other services rendered
by KPMG LLP.
Audit fees, excluding audit related (1) $238,000
========
Financial information systems design and implementation $ --
========
All Other Fees:
Audit related fees (2) $ 18,000
Tax compliance and other tax related services 147,000
Other non-audit services 15,000
--------
Total all other fees $180,000
========
(1) Audit fees include audit fees of the consolidated
financial statements of the Company as well as the audit
of the Company's subsidiaries, Wilmington National Finance
(WNF) and CustomerOne Financial Network (C1FN).
(2) Audit related fees consisted of the audit of financial
statements of certain employee benefit plans and the audit
of C1FN's brokerage unit.
to the Company, other than the services described above, for the fiscal year
ended December 31, 2002, were $39,000. Such services consisted of assistance
with the sale of C1FN.
The Audit Committee has determined that the non-audit services performed by
its principal accountants during 20012002 were compatible with maintaining the
principal accountants' independence.
KPMG LLP has advised the Company that neither the firm, nor any member of
the firm, has any financial interest, direct or indirect, in any capacity in the
Company or its subsidiaries.
The Board of Directors Recommends Voting "FOR" Proposal Two.
17
PROPOSAL 3 - APPROVAL OF AMENDMENTS TO THE 1997 STOCK OPTION PLAN
General
Subject to approval of the Company's stockholders, the Board of Directors
of the Company proposes to amend the WSFS Financial Corporation 1997 Stock
Option Plan (the "1997 Option Plan"). Specifically, the Board intends to:
1. Increase the number of shares of Common Stock reserved for issuance
thereunder by 450,000 shares from 1,165,000 shares to 1,615,000
shares. The Board of Directors is proposing the amendment in order to
ensure that sufficient shares are available for future grants of
options.
2. Limit new grants of Company stock (either in the form of options,
stock appreciation rights or phantom stock) to any one individual to
50,000 shares annually.
3. Allow options issued prospectively to vest immediately upon retirement
of a participant subject to the following conditions: (i) Incentive
stock options (ISOs) must be exercised within 90 days of retirement,
(ii) Non-qualified options (Non-ISOs) must be exercised within one
year of retirement (but not later than the date on which the Option
would otherwise expire), and (iii) provided that participant must
agree to not compete for a period of three years following the date on
which the last option is exercised.
The following is a summary of the proposed amendments to the 1997 Stock
Option Plan. The full text of the Amended and Restated 1997 Stock Option Plan is
attached to this Proxy Statement as Appendix A and incorporated herein by this
reference. Stockholders are urged to read Appendix A in its entirety.
Purpose of the 1997 Option Plan and the Amendments
The purpose of the 1997 Option Plan is to advance the interests of the
Company by providing directors and selected Associates of the Company and its
affiliates, including the Bank, with the opportunity to acquire shares of Common
Stock. By encouraging such stock ownership, the Company seeks to attract, retain
and motivate the best available personnel for positions of substantial
responsibility and to provide additional incentive to directors and Associates
of the Company and its affiliates to promote the success of the business of the
Company.
To ensure that the 1997 Option Plan continues to serve its purpose, the
Board of Directors believes that it is imperative that the Company increase the
number of shares reserved for issuance thereunder by the 450,000 shares proposed
in the Amendment. As of the Record Date, awards to purchase a total of 1,095,550
shares of Common Stock have been granted under the 1997 Option Plan. The shares
remaining in the plan would not be sufficient to allow the Company to continue
attract, retain and provide an incentive to high quality executives and
directors by continuing to grant options at similar rates as in prior years. The
Board is also recommending that new grants of Company stock to any participant
be limited to 50,000 shares in any one calendar year.
Previously, the Company amended the 1997 Option Plan to increase the number
of shares of Common Stock reserved for issuance thereunder from 625,000 shares
to 1,165,000 shares. Such amendment was approved by the stockholders of the
Company at their Annual Meeting in 2000.
The proposed amendment also adds an annual limit of 50,000 shares to the
number of new awards of Options, SARs or Phantom Stock any individual may
receive. If approved, this limitation will encourage a broader
18
utilization of the additional shares available for future awards under the 1997
Option Plan rather than such awards being concentrated among a few individuals.
The proposed amendment, if approved, would also permit individuals who receive
option awards after the date of this amendment, and who retire from the
employment or service with the Company, to have any unvested awards become
immediately exercisable and to have additional time to exercise such Options,
provided that such individuals enter into an agreement not to compete with the
Company or its subsidiaries for a period of three years following the date of
exercise of such Options. In the event the proposed amendment is not approved,
the increase in the number of shares available for grant under this Plan, the
annual limit on the grant of awards and the acceleration of vesting of awards
upon retirement provided that an award holder enters into a non-compete
agreement, will not be effective.
Description of the 1997 Option Plan
Effective Date. The 1997 Option Plan originally became effective April 25,
1997, the date of its approval by the Company's stockholders (the "Effective
Date"). Awards made prior to the Effective Date were contingent on stockholder
approval of the 1997 Option Plan.
Administration. The 1997 Option Plan is administered by a committee (the
"Committee"), appointed by the Board of Directors, consisting of at least two
directors of the Company who are "non-employee directors" within the meaning of
the federal securities laws. The Personnel and Compensation Committee acts as
the Committee for purposes of administering the 1997 Option Plan. The Committee
has discretionary authority to select participants and grant awards, to
determine the form and content of any awards made under the 1997 Option Plan, to
interpret the 1997 Option Plan and to make any other decisions necessary or
advisable in connection with administering the 1997 Option Plan. All decisions,
determinations and interpretations of the Committee are final and conclusive on
all persons affected thereby. Members of the Committee are indemnified to the
full extent permissible under the Company's governing instruments in connection
with any claims or other actions relating to any action taken under the 1997
Option Plan. Under the 1997 Option Plan, in the absence of a duly appointed
Committee, the Board of Directors may act in lieu of the Committee.
Eligible Persons; Types of Awards. The 1997 Option Plan authorizes the
Committee to grant stock options ("Options"), stock appreciation rights ("SARs")
and phantom stock ("Phantom Stock")(collectively, "Awards") to such Associates
as the Committee shall designate, although only Associates who are one of a
"select group of management or highly compensated Associates" (within the
meaning of the Employee Retirement Income Security Act, as amended) are eligible
to receive Phantom Stock. Only the Board may make Awards to non-Associate
directors. As of the Record Date, the Company and its subsidiaries had 57
Associates and 10 non-Associate directors who participated in the 1997 Option
Plan.
Shares eligible for Grants. If the proposed amendments are approved, the
1997 Option Plan will authorize the issuance of up to 1,615,000 shares of Common
Stock of which 1,095,550 shares will have already been reserved for options
previously granted. Such shares may be (i) authorized by unissued shares, (ii)
shares held in treasury or (iii) shares held in a grantor trust. In the event of
a any merger, consolidation, recapitalization, reorganization, reclassification,
stock dividend, split-up, combination of shares, or similar event in which the
number of kind of shares is changed without receipt or payment of consideration
by the Company, the Committee will adjust the number and kind of shares reserved
for issuance under the 1997 Option Plan, the number and kind of shares subject
to outstanding Awards, and the exercise prices of such Awards. Generally, the
number of shares as to which SARs are granted are charged against the aggregate
number of shares available for grant under the
19
1997 Option Plan, provided that, in the case of an SAR granted in conjunction
with an Option, under circumstances in which the exercise of the SAR results in
termination of the Option and vice versa, only the number of shares of Common
Stock subject to the Option shall be charged against the aggregate number of
shares of Common Stock remaining available under the 1997 Option Plan. If awards
should expire, become unexercisable or be forfeited for any reason without
having been exercised, the shares of Common Stock subject to such Awards shall,
unless the 1997 Option Plan shall have been terminated, be available for the
grant of additional Awards under the 1997 Option Plan.
Options. Options may be either incentive stock options ("ISOs") as defined
in Section 422 of the Internal Revenue Code of 1986 (the "Code"), or options
that are not ISOs ("Non-ISOs"). The exercise price as to any Option may not be
less than the fair market value (determined under the 1997 Option Plan) of the
optioned shares on the date of grant. In the case of a participant who owns more
than 10% of the outstanding Common Stock on the date of grant, such option price
may not be less than 110% of fair market value of the shares. As required by
federal tax laws, to the extent that the aggregate fair market value (determined
when an ISO is granted) of the Common Stock with respect to which ISOs are
exercisable by a participant for the first time during any calendar year (under
all plans of the Company and of any subsidiary) exceeds $100,000, the Options
granted in excess of $100,000 will be treated as Non-ISOs, and not as ISOs. At
March 14, 2003, the fair market value of the Common Stock was $32.65 per share
based on the closing price reported on the Nasdaq National Market.
SARs. An SAR may be granted in tandem with all or part of any Option
granted under the 1997 Option Plan, or without any relationship to any Option.
For SARs granted in tandem with Options, the participant's exercise of the SAR
may cancel his or her right to exercise the Option, and vice versa. An SAR
granted in tandem with an ISO in circumstances in which the exercise of the SAR
affects the right to exercise the ISO, or vice versa, must expire no later than
the ISO, must have the same exercise price as the ISO and may be exercised only
when the ISO is exercisable and when the fair market value of the shares subject
to the ISO exceeds the exercise price of the ISO. Regardless of whether an SAR
is granted in tandem with an Option, exercise of the SAR will entitle the
participant to receive, as the Committee prescribes in the grant, all or a
percentage of the difference between (i) the fair market value of the shares of
Common Stock subject to the SAR at the time of its exercise, and (ii) the fair
market value of such shares at the time the SAR was granted (or, in the case of
SARs granted in tandem with Options, the exercise price). The exercise price as
to any particular SAR may not be less than the fair market value of the optioned
shares on the date of grant. At the record date there were no SARs outstanding.
Exercise of Options and SARs. The exercise of Options and SARs are subject
to such terms and conditions as are established by the Committee in a written
agreement between the Committee and the 1997 Option Plan participant, provided
that each Option shall become exercisable no more rapidly than with respect to
20% of the underlying shares on each of the five anniversary dates of the date
on which the Award occurred. Such vesting shall accelerate to 100% upon a
participant's termination of service as an Associate or director due to death or
disability (as defined in the 1997 Option Plan) or upon a "Change in Control"
(as such term is defined below) of the Company or the Bank. See "Change in
Control." If the proposed amendments are approved, 100% vesting will also
accelerate for grants made after the date of the 2003 Annual Meeting, under
certain circumstances, upon a participant's retirement from the Company.
In the absence of Committee action to the contrary, an otherwise unexpired
Option shall cease to be exercisable upon (i) a participant's termination of
employment for "just cause" (as defined in the 1997 Option Plan), (ii) the date
30 days after a participant terminates service for a reason other than just
cause, death or disability (iii) the date one year after a participant
terminates service due to disability, or (iv) the date two years
20
after a participant terminates service due to death. If the proposed amendments
are approved, Options awarded toa retired participant after the date of the 2003
Annual meeting shall cease to be exercisable upon (i) in the case of ISOs, the
date 90 days after the date of retirement, and (ii) in the case of Non-ISOs, the
date one year after the date of retirement, but in no case later than the date
on which the Option would otherwise have expired.
A participant may exercise Options or SARs subject to provisions relative
to their termination and limitations on their exercise, only by (i) written
notice of intent to exercise the Option or SAR with respect to a specified
number of shares of Common Stock, and (ii) payment to the Company
(contemporaneously with delivery of such notice) in cash, in Common Stock owned
for more than six months or a combination of cash and Common Stock owned for
more than six months, of the amount of the exercise price for the number of
shares with respect to which the Option is then being exercised. Common Stock
owned for more than six months utilized in full or partial payment of the
exercise price for Options shall be valued at its market value at the date of
exercise. An election to exercise an SAR may only be made during the period
beginning on the third business day following the release for publication of
quarterly or annual financial information and ending on the twelfth business day
following such date.
Phantom Stock Awards. The Committee may make Phantom Stock awards through
credits of Common Stock to separate accounts established for 1997 Option Plan
participants. Any cash and stock dividends attributable to the phantom shares
will also be credited to participant accounts. The Committee has broad
discretion at the time of making a Phantom Stock award to impose conditions that
must be satisfied in order for the Phantom Stock to become unrestricted (i.e.,
vested or non-forfeitable). For example, the Committee may condition vesting
upon continued employment or upon the Company's attainment of specified
performance goals. The vesting period and conditions for vesting may be
different for each participant, provided that a participant's Phantom Stock
award will automatically become 100% vested in the event of the participant's
death or disability prior to the expiration of the restriction period, the
satisfaction of the restrictions applicable to an award of Phantom Stock or upon
a Change in Control of the Company or the Bank. See "Change in Control." In
addition, the Committee may shorten the restriction period or waive any
restrictions in the Committee concludes that it is in the best interests of the
Company to do so.
After a participant terminates service as a director or as an Associate,
the participant will receive the vested portion of his or her account in a
lump-sum cash payment, unless the participant elects, more than six months
before first becoming vested in any portion of the Phantom Stock award, to
receive all or part of his or her vested account (i) in substantially equal
annual installments over a period of up to five years, beginning with the year
in which the participant terminates service, and/or (ii) in unrestricted whole
shares of Common Stock, with cash paid in lieu of fractional shares. The
Committee has the discretion to make payments in cash regardless of the
participant's election. At the record date there were no Phantom Stock awards
outstanding.
Conditions on Issuance of Shares. The Committee has the discretionary
authority to impose, in agreements, such restrictions on shares of Common Stock
issued pursuant to the 1997 Option Plan as it may deem appropriate or desirable,
including but not limited to the authority to impose a right of first refusal or
to establish repurchase rights or both of these restrictions. In addition, the
Committee may not issue shares unless the issuance complies with applicable
securities laws, and, to that end, may require that a participant make certain
representations or warranties.
21
If the proposed amendments are approved, in any one calendar year, a
Participant may not receive an award of more than 50,000 shares of the Company
Stock in the form of Options, SARs, Phantom Stock or any combination thereof.
Change in Control. The provisions of any Award for its exercise or vesting
in installments shall immediately and permanently lapse on the date of a Change
in Control. Consequently, all Options, SARs and Phantom Stock awards shall
become immediately exercisable and fully vested on the date of the Change in
Control. For purposes of the 1997 Option Plan a "Change in Control" means any
one of the following events: (i) the acquisition of ownership, holding or power
to vote more than 25% of the voting stock of the Bank or the Company; (ii) the
acquisition of the ability to control the election of a majority of the Bank's
or the Company's directors; (iii) the acquisition of a controlling influence
over the management or policies of the Bank or of the Company by any person or
by persons acting as a "group" (within the meaning of Section 13(d) of the
Exchange Act); or (iv) during any period of two consecutive years, individuals
(the "Continuing Directors") who at the beginning of such period constitute the
Board of Directors of the Bank or of the Company (the "Existing Board") cease
for any reason to constitute at least two-thirds thereof, provided that any
individual whose election or nomination for election as a member of the Existing
Board was approved by a vote of at least two-thirds of the Continuing Directors
then in office shall be considered a Continuing Director. Notwithstanding the
forgoing, the Company's ownership of the Bank shall not of itself constitute a
Change in Control for purposes of the Agreement. For purposes of the definition
of Change in Control only, the term "person" refers to an individual or a
corporation, partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form of entity.
With respect to Options, at the time of a Change in Control, the
participant shall, at the discretion of the Committee, be entitled to receive
cash in an amount equal to the excess of the fair market value of the Common
Stock subject to such Option over the exercise price of such shares, in exchange
for the cancellation of such Options by the participant. Although these
provisions are included in the 1997 Option Plan primarily for the protection of
a participant in the event of a Change in Control of the Company, they may also
be regarded as having a takeover defensive effect, which may reduce the
Company's vulnerability to hostile takeover attempts and certain other
transactions which have not been negotiated with and approved by the Board of
Directors.
Nontransferability. Participants may transfer their Awards to family
members or trusts under specified circumstances. Awards may otherwise not be
sold, pledged, assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent and distribution.
Effect of Dissolution and Related Transactions. In the event of a (i) the
liquidation or dissolution of the Company, (ii) a merger or consolidation in
which the Company is not the surviving entity, or (iii) the sale or disposition
of all or substantially all of the Company's assets (any of the foregoing to be
referred to herein as a "Transaction"), all outstanding Awards, together with
the exercise prices thereof, will be equitably adjusted for any change or
exchange of shares for a different number or kind of shares which results from
the Transaction. However, any such adjustment will be made in such a manner as
to not constitute a modification, within the meaning of Section 424(h) of the
Code, of outstanding ISOs.
Duration of the 1997 Option Plan and Grants. The 1997 Option Plan has a
term of 10 years from the Effective Date, after which date no Awards may be
granted. The maximum term for an Award is 10 years from the date of grant,
except that the maximum term of an ISO (and an SAR granted in tandem with an
ISO) may not exceed five years if the participant owns more than 10% of the
Common Stock on the date of grant. The
22
expiration of the 1997 Option Plan, or its termination by the Committee, will
not affect any Award then outstanding.
Amendment, Suspension or Termination of the 1997 Option Plan. The Board of
Directors of the Company may from time to time amend the terms of the 1997
Option Plan and, with respect to any shares at the time not subject to Awards,
suspend or terminate the 1997 Option Plan. No amendment, suspension, or
termination of the 1997 Option Plan will, without the consent of any affected
participant, alter or impair any rights or obligations under any Award
previously granted. Stockholder approval will not be required for plan
amendments that would not materially increase the benefits accruing to plan
participants, materially increase the number of securities which may be issued
under the plan or materially modify eligibility requirements for plan
participation. The Board of Directors has previously amended the 1997 Stock
Option Plan to increase the number of shares reserved for issuance. The
amendment was approved by the Company stockholders in 2000.
Financial Effects of Awards. The Company receives no monetary consideration
for the granting of Awards under the 1997 Option Plan. It receives no monetary
consideration other than the exercise price for shares of Common Stock issued to
participants upon the exercise of the Options, and receives no monetary
consideration upon the exercise of SARs. Under current accounting standards,
recognition of compensation expense is not required when Options are granted at
an exercise price equal to or exceeding the fair market value of the Common
Stock on the date the Option is granted (although footnote disclosure is
required). Options may have a potentially dilutive impact on earnings per share
in future periods.
The granting of SARs requires charges to the income of the Company based on
the amount of the appreciation, if any, in the market price of the Common Stock
to which the SARs relate over the exercise price of those shares. If the average
market price of the Common Stock declines subsequent to a charge against
earnings due to estimated appreciation in the Common Stock subject to SARs, the
amount of the decline will reverse such prior charges against earnings (but not
by more than the aggregate of such prior charges).
Neither the Company nor the Bank receives any monetary consideration for
the granting of awards of Phantom Stock. Under current accounting standards,
when Phantom Stock awards are granted, the Company must recognize compensation
expense based on the fair market value of the underlying Common Stock on the
date the awards are granted, with such amount being amortized over the expected
vesting period for the award. The awarding of Phantom Stock requires charges to
the income of the Company based on the amount of the appreciation, if any, in
the market price of the Common Stock to which the Phantom Stock relates over the
initial amounts credited to each participant's account. If the average market
price of the Common Stock declines subsequent to a charge against earnings due
to estimated appreciation in the Common Stock, the amount of the decline will
reverse such prior charges against earnings (but not by more than the aggregate
of such prior charges). If Phantom Stock awards are paid in Common Stock, such
payment will have a dilutive impact on earnings.
In that the stockholders of the Company do not have preemptive rights, to
the extent that the Company settles awards under the 1997 Option Plan, in whole
or in part, with authorized but unissued shares of Common Stock, the interests
of current stockholders may be diluted. If the proposed amendments are approved
and an additional 450,000 shares are issued by the Company in the future upon
the exercise of options or settlement of SARs or Phantom Stock awards, then the
dilutive effect to current stockholders would be approximately 5%. The Company
can avoid dilution resulting from awards under the 1997 Option Plan by
delivering shares repurchased in the open market or settling such awards with a
cash payment.
23
Federal Income Tax Consequences
There are no tax consequences to participants or the Company on the mere
granting of an Option, SAR or Phantom Stock award. Subsequent taxation depends
on the type of award and is highlighted below.
ISOs. If the participant holds the shares purchased upon exercise of an ISO
for at least two years from the date the ISO is granted, and for at least one
year from the date the ISO is exercised, any gain realized on the sale of the
shares received upon exercise of the ISO is taxed as long-term capital gain.
However, the difference between the fair market value of the Common Stock on the
date of exercise and the exercise price of the ISO will be treated by the
participant as an item of tax preference in the year of exercise for purposes of
the alternative minimum tax. If a participant disposes of the shares before the
expiration of either of the two special holding periods noted above, the
disposition is a "disqualifying disposition." In this event, the participant
will be required, at the time of the disposition of the Common Stock, to treat
the lesser of the gain realized or the difference between the exercise price and
the fair market value of the Common Stock at the date of exercise as ordinary
income and the excess, if any, as capital gain.
The Company will not be entitled to any deduction for federal income tax
purposes as the result of the grant or exercise of an ISO, regardless of whether
or not the exercise of the ISO results in liability to the participant for
alternative minimum tax. However, if a participant has ordinary income taxable
as compensation as a result of a disqualifying disposition, the Company will be
entitled to deduct an equivalent amount.
Non-ISOs. In the case of a Non-ISO, generally a participant will recognize
ordinary income upon the exercise of the Non-ISO in an amount equal to the
difference between the fair market value of the shares on the date of exercise
and the option price. Upon a subsequent disposition of such shares, any amount
received by the participant in excess of the fair market value of the shares as
of the exercise will be taxed as capital gain. The Company will be entitled to a
deduction for federal income tax purposes at the same time and in the same
amount as the ordinary income recognized by the participant in connection with
the exercise of a Non-ISO.
SARs. The grant of an SAR has no tax effect on the participant or the
Company. Upon exercise of the SARs, however, any cash or Common Stock received
by the participant in connection with the surrender of the participant's SAR
will be treated as compensation income to the participant, and the Company will
be entitled to a business expense deduction for the amounts treated as
compensation income.
Phantom Stock. When cash or shares are transferred to the participant
pursuant to the vesting of a Phantom Stock award, the participant will recognize
ordinary income equal to the cash received and the fair market value of the
shares delivered under the Phantom Stock award. A participant may instead elect
to accelerate recognition of taxable income pursuant to Section 83(b) of the
Code.
Stock Option Grants
As of the Record Date, 1,095,550 Options had been granted pursuant to the 1997
Option Plan including 394,045, 115,700, 134,580 and 36,100 options granted to
Messrs. Schoenhals, Johnston, Turner and Ms Powell, respectively, 680,425
options granted to all executive officers as a group, 54,000 options granted to
all directors who are not executive officers as a group and 361,125 granted to
all Associates who are not executive officers as a group.
24
Equity Compensation Plan Information
Set forth below is information as of December 31, 2002 with respect to
compensation plans under which equity securities of the Registrant are
authorized for issuance.
(a) (b) (c)
Number of securities
Number of Securities Weighted-Average remaining available for
to be issued upon exercise price of future issuance under
exercise of outstanding outstanding equity compensation plans
Options, SARs and Options, SARs and (excluding securities
Phantom Stock Awards Phantom Stock Awards reflected in Column (a)
----------------------- -------------------- --------------------------
Equity compensation plans
approved by stockholders (1) 1,080,060 $ 14.55 69,450
Equity compensation plans
not approved by stockholders (2) - - -
--------- ------- ------
TOTAL 1,080,060 $ 14.55 69,450
========= ======= ======
- --------------------
(1) Plans approved by stockholders include the 1986 Stock Option Plan and the
1997 Stock Option Plan.
(2) There are no equity compensation plans that have not been approved by
stockholders.
Recommendation and Vote Required
The Board of Directors has determined that the proposed amendments are
necessary to maintain the 1997 Option Plan as an effective incentive plan.
Because the amendments will materially increase the number of shares of Common
Stock that may be issued under the 1997 Option Plan, the Board of Directors is
seeking stockholder approval of the amendments.
Stockholder approval of the amendments to the 1997 Option Plan requires the
affirmative vote of the holders of a majority of the votes eligible to be cast
at the Annual Meeting.
The Board of Directors recommends a vote "FOR" approval of Proposal Three.
25
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to regulations promulgated under the Exchange Act, the Company's
officers and directors and all persons who beneficially own more than ten
percent of the Common Stock ("Reporting Persons") are required to file reports
with the SEC detailing their ownership and changes of ownership in the Common
Stock and to furnish the Company with copies of all such ownership reports that
are filed. Based solely on the Company's review of the copies of such ownership
reports which it has received in the past fiscal year or with respect to the
past fiscal year, or written representations from the Reporting Persons that no
annual report of changes in beneficial ownership were required, the Company
believes that during fiscal year 2001 and prior fiscal years all2002 the Reporting Persons have complied with
thesesuch reporting requirements.
15
ADVANCE NOTICE OF CERTAIN MATTERS
TO BE CONDUCTEDCONSIDERED AT AN ANNUAL MEETING
The bylaws of the Company provide an advance notice procedure for certain
business, or nominations to the Board of Directors, to be brought before the
Annual Meeting. In order for a stockholder to properly bring business before the
Annual Meeting or to propose a nominee to the Board of Directors, the
stockholder must give written notice to the Secretary of the Company not less
than thirty days before the time originally fixed for such meeting; provided,
however, that in the event that less than forty days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder to be timely must be received no later than the close of
business on the tenth day following the day on which such notice of the date of
the Annual Meeting was mailed or such public disclosure was made. The notice
must include the stockholder's name and address as they appear on the records of
the Company, number of shares beneficially owned by the stockholder, a brief
description of the proposed business, the reasons for bringing the business
before the Annual Meeting and any material interest of the stockholder in the
proposed business. In the case of nominations to the Board of Directors, certain
information regarding the nominee must also be provided.
STOCKHOLDER PROPOSALS FOR 20032004 ANNUAL MEETING
It is anticipated that the proxy statement and form of proxy for the 20032004 Annual
Meeting of Stockholders will be mailed during March of 2003.2004. Stockholder
proposals intended to be presented at the 20032004 annual meeting of stockholders of
WSFS Financial Corporation must be received by November 22,
2002,21, 2003, to be
considered for inclusion in the proxy statement and form of proxy relating to
such meeting and should be addressed to the Secretary at the Company's principal
office.
ADDITIONAL INFORMATION
No matters other than those set forth in the Notice of Meeting accompanying this
Proxy Statement are expected to be presented to stockholders for action at the
Annual Meeting other than matters incident to the conduct of the Annual Meeting.
However, if other matters are presented which are proper subjects for action by
stockholders, and which may properly come before the meeting, it is the
intention of those named in the accompanying proxy to vote such proxy in
accordance with the determination of a majority of the Board of Directors upon
such matters.
26
MISCELLANEOUS
The expenses of the solicitation of the proxies, including the cost of preparing
and distributing the Company's proxy materials, the handling and tabulation of
proxies received and charges of brokerage houses and other institutions,
nominees or fiduciaries in forwarding such documents to beneficial owners, will
be paid by the Company. In addition to the mailing of the proxy materials,
solicitation may be made in person or by telephone, telegraph or other modes of
electronic communication by the Company or its employees.Company. The Company's directors management and employeesmanagement
will receive no compensation for their proxy solicitation services other than
their regular salaries and overtime, if applicable, but may be reimbursed for
out-of-pocket expenses.
ANNUAL REPORT AND FINANCIAL STATEMENTS
The Company's Annual Report for the fiscal year ended December 31, 2001,2002,
including financial statements prepared in conformity with generally accepted
accounting principles, accompanies this Proxy Statement. Such Annual Report is
not part of the Company's proxy solicitation materials. A copy of the Company's Annual Report
on Form 10-K for the Fiscal Year Ended December 31, 20012002 (without exhibits) as
filed with the SEC will be furnished without charge to stockholders as of the
Record Date upon written request to: Investor Relations Department, WSFS
Financial Corporation, 838 Market Street, Wilmington, Delaware, 19801.
1627
EXHIBIT A
WSFS FINANCIAL CORPORATION
AMENDED AND RESTATED - APRIL 2003
1997 STOCK OPTION PLAN
1. Purpose of the Plan.
The purpose of this Plan is to advance the interests of the Company through
providing select key Associates and Directors of the Bank, the Company, and
their Affiliates with the opportunity to acquire Shares. By encouraging such
stock ownership, the Company seeks to attract, retain and motivate the best
available personnel for positions of substantial responsibility and to provide
additional incentives to Directors and key Associates of the Company or any
Affiliate to promote the success of the business.
2. Definitions.
As used herein, the following definitions shall apply:
(a) "Account" shall mean a bookkeeping account maintained by the Company in
the name of a Participant who has received an Award of Phantom Stock.
(b) "Affiliate" shall mean any "parent corporation" or "subsidiary
corporation" of the Company, as such terms are defined in Sections 424(e) and
(f), respectively, of the Code.
(c) "Agreement" shall mean a written agreement entered into in accordance
with Paragraph 5(c).
(d) "Associate" shall mean any person employed by the Company, the Bank or
an Affiliate.
(e) "Awards" shall mean, collectively, Options, SARs, and Phantom Stock
unless the context clearly indicates a different meaning.
(f) "Bank" shall mean Wilmington Savings Fund Society, Federal Savings
Bank.
(g) "Board" shall mean the Board of Directors of the Company.
(h) "Change in Control" shall mean any one of the following events: (i) the
acquisition of ownership, holding or power to vote more than 25% of the voting
stock of the Bank or the Company; (ii) the acquisition of the ability to control
the election of a majority of the Bank's or the Company's directors; (iii) the
acquisition of a controlling influence over the management or policies of the
Bank or of the Company by any person or by persons acting as a "group" (within
the meaning of Section 13(d) of the Securities Exchange Act of 1934); or (iv)
during any period of two consecutive years, individuals (the "Continuing
Directors") who at the beginning of such period constitute the Board of
Directors of the Bank or of the Company (the "Existing Board") cease for any
reason to constitute at least two-thirds thereof, provided that any individual
whose election or nomination for election as a member of the Existing Board was
approved by a vote of at least two-thirds of the Continuing Directors then in
office shall be considered a Continuing Director. Notwithstanding the foregoing,
the Company's ownership of the Bank shall not of itself constitute a Change in
Control for purposes of the Agreement. For purposes of this paragraph only, the
term "person" refers to an individual or a corporation, partnership, trust,
A-1
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed herein.
(i) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(j) "Committee" shall mean either the Personnel and Compensation Committee
------
appointed by the Board in accordance with Paragraph 5(a) hereof, or the Board
--
itself (which may act, at any time and from time to time, in lieu of the
Personnel and Compensation Committee).
(k) "Common Stock" shall mean the common stock, $.01 par value, of the
Company.
(l) "Company" shall mean WSFS Financial Corporation or any successor
thereto.
(m) "Continuous Service" shall mean the absence of any interruption or
termination of service as an Associate or Director of the Company or an
Affiliate. Continuous Service shall not be considered 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 Company or
between the Company, an Affiliate or a successor, or in the case of a Director's
performance of services in an emeritus or advisory capacity.
(n) "Director" shall mean any member of the Board, and any member of the
board of directors of any Affiliate that the Board has, by resolution,
designated as being eligible for participation in this Plan.
(o) "Disability" shall mean a physical or mental condition which, in the
sole and absolute discretion of the Committee, is reasonably expected to be of
indefinite duration and to substantially prevent a Participant from fulfilling
his or her duties or responsibilities to the Company or an Affiliate.
(p) "Effective Date" shall mean the date specified in Paragraph 15 hereof.
(q) "Exercise Price" shall mean the price per Optioned Share at which an
Option or SAR may be exercised.
(r) "ISO" shall mean an option to purchase Common Stock which meets the
requirements set forth in the Plan, and which is intended to be and is
identified as an "incentive stock option" within the meaning of Section 422 of
the Code.
(s) "Market Value" shall mean the fair market value of the Common Stock, as
determined under Paragraph 7(b) hereof.
(t) "Non-Employee Director" shall have the meaning provided in Rule 16b-3.
(u) "Non-ISO" means an option to purchase Common Stock which meets the
requirements set forth in the Plan but which is not intended to be and is not
identified as an ISO.
(v) "Option" means an ISO and/or a Non-ISO.
(w) "Optioned Shares" shall mean Shares subject to an Award granted
pursuant to this Plan.
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(x) "Participant" shall mean any person who receives an Award pursuant to
the Plan.
(y) "Phantom Stock" shall mean an Award pursuant to Paragraph 10 hereof.
(z) "Plan" shall mean the WSFS Financial Corporation 1997 Stock Option
Plan.
(aa) "Rule 16b-3" shall mean Rule 16b-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended.
(bb) "Share" shall mean one share of Common Stock.
(cc) "SAR" (or "Stock Appreciation Right") means a right to receive the
appreciation in value, or a portion of the appreciation in value, of a specified
number of shares of Common Stock.
(dd) "Year of Service" shall mean a full twelve-month period, measured from
the date of an Award and each annual anniversary of that date, during which a
Participant has not terminated Continuous Service for any reason.
3. Term of the Plan and Awards.
(a) Term of the Plan. The Plan shall continue in effect for a term of ten
years from the Effective Date, unless sooner terminated pursuant to Paragraph 17
hereof. No Award shall be granted under the Plan after ten years from the
Effective Date.
(b) Term of Awards. The term of each Award granted under the Plan shall be
established by the Committee, but shall not exceed ten (10) years; provided,
however, that in the case of an Associate who owns Shares representing more than
10% of the outstanding Common Stock at the time an ISO is granted, the term of
such ISO shall not exceed five years.
4. Shares Subject to the Plan.
(a) General Rule. Except as otherwise required under Paragraph 12 hereof,
the aggregate number of Shares deliverable pursuant to Awards shall not exceed
1,615,000 Shares. Such Shares may either be authorized or unissued Shares,
Shares held in treasury, or Shares held in a grantor trust created by the
Company. If an Award should expire, become unexercisable, or be forfeited for
any reason without having resulted in the issuance of Shares, the Shares subject
to the Awards shall, unless the Plan has been terminated, become available for
the grant of additional Awards under the Plan.
(b) Special Rule for SARs. The number of Shares with respect to which an
SAR is granted, but not the number of Shares which the Company delivers or could
deliver to an Associate or individual upon exercise of an SAR, shall be charged
against the aggregate number of Shares remaining available under the Plan;
provided, however, that in the case of an SAR granted in conjunction with an
Option, under circumstances in which the exercise of the SAR results in
termination of the Option and vice versa, only the number of Shares subject to
the Option shall be charged against the aggregate number of Shares remaining
available under the Plan. The Shares involved in an Option as to which option
rights have terminated by reason of the exercise of a related SAR, as provided
in Paragraph 9 hereof, shall not be available for the grant of further Options
under the Plan.
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5. Administration of the Plan.
(a) Composition of the Committee. The Plan shall be administered by the
Committee, which shall consist of not less than two (2) members of the Board who
are Non-Employee Directors. Members of the Committee shall serve at the pleasure
of the Board. In the absence at any time of a duly appointed Committee, the Plan
shall be administered by the Board.
(b) Powers of the Committee. Except as limited by the express provisions of
the Plan or by resolutions adopted by the Board, the Committee shall have sole
and complete authority and discretion (i) to select Participants and grant
Awards, (ii) to determine the form and content of Awards to be issued in the
form of Agreements under the Plan, (iii) to interpret the Plan, (iv) to
prescribe, amend and rescind rules and regulations relating to the Plan, and (v)
to make other determinations necessary or advisable for the administration of
the Plan. The committee shall have and may exercise such other power and
authority as may be delegated to it by the Board from time to time. A majority
of the entire Committee shall constitute a quorum and the action of a majority
of the members present at any meeting at which a quorum is present, or acts
approved in writing by a majority of the Committee without a meeting, shall be
deemed the action of the Committee.
(c) Agreement. Each Award shall be evidenced by a written agreement
containing such provisions as may be approved by the Committee. Each such
Agreement shall constitute a binding contract between the Company and the
Participant, and every Participant, upon acceptance of such Agreement shall be
bound by the terms and restrictions of the Plan and of such Agreement. The terms
of each such Agreement shall be in accordance with the Plan, but each Agreement
may include such additional provisions and restrictions determined by the
Committee, in its discretion, provided that such additional provisions and
restrictions are not inconsistent with the terms of the Plan. In particular, the
Committee shall set forth in each Agreement (i) the Exercise Price of an Option
or SAR, (ii) the number of Shares subject to the Award, and its expiration date,
(iii) the manner, time, and rate (cumulative or otherwise) of exercise or
vesting of such Award, and (iv) the restrictions, if any, to be placed upon such
Award, or upon Shares which may be issued upon exercise of such Award. The
Chairman of the Committee and such other Directors and officers as shall be
designated by the Committee are hereby authorized to execute Agreements on
behalf of the Company and to cause them to be delivered to the recipients of
Awards.
(d) Effect of the Committee's Decisions. All decisions, determinations and
interpretations of the Committee shall be final and conclusive on all persons
affected thereby.
(e) Indemnification. In addition to such other rights of indemnification as
they may have, the members of the Committee shall be indemnified by the Company
in connection with any claim, action, suit or proceeding relating to any action
taken or failure to act under or in connection with the Plan or any Award,
granted hereunder to the full extent provided for under the Company's governing
instruments with respect to the indemnification of Directors.
6. Eligibility for Awards.
(a) General Rule. The Committee may make Awards only to key Associates of
the Company, the Bank or an Affiliate. Only the Board may make Awards to
Non-Employee Directors.
(b) Special Rule for Phantom Stock. A Phantom Stock Award shall be null and
void retroactive to its grant date if the recipient is an Associate who is not
one of a "select group of
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management or highly compensated employees" within the meaning of the Employee
Retirement Income Security Act as amended.
(c) Limitation of Awards. In any one calendar year, an Associate may not
receive new awards of more than 50,000 shares of the Company in the form of
options, SARs or Phantom Stock. In the event that the number of outstanding
shares of stock of the company as of the date that this Amendment is approved by
the Stockholders of the Company ever increases due to a stock split, stock
dividend or other recapitalization, this 50,000 share annual limitation shall be
increased in the same percentage as the percentage increase in the total
outstanding stock of the Company as a result of such recapitalization. This
Paragraph (c) shall control when the Board is applying the provisions of
Paragraph (d) of this Section 6.
(d) Special Rules for ISOs. The aggregate Market Value, as of the date the
Option is granted, of the Shares with respect to which ISOs are exercisable for
the first time by an Associate during any calendar year (under all incentive
stock option plans, as defined in Section 422 of the Code, of the Company or any
present or future Affiliate of the Company) shall not exceed $100,000.
Notwithstanding the foregoing, the Committee may grant Options in excess of the
foregoing limitations, in which case Options granted in excess of such
limitation shall be Non-ISOs.
7. Exercise Price for Options.
(a) Limits on Committee Discretion. The Exercise Price as to any particular
Option shall not be less than 100% of the Market Value of the Optioned Shares on
the date of grant. In the case of an Associate who owns Shares representing more
than 10% of the Company's outstanding Shares of Common Stock at the time an ISO
is granted, the Exercise Price shall not be less than 110% of the Market Value
of the Optioned shares at the time an ISO is granted.
(b) Standards for Determining Exercise Price. If the Common Stock is listed
on a national securities exchange (including the Nasdaq National Market) on the
date in question, then the Market Value per Share shall be the average of the
highest and lowest selling price on such exchange on such date, or, if there
were no sales on such date, then the Exercise Price shall be the mean between
the bid and asked price on such date. If the Common Stock is traded otherwise
than on a national securities exchange on the date in question, then the Market
Value per Share shall be the mean between the bid and asked price on such date,
or, if there is no bid and asked price on such date, then on the next prior
business day on which there was a bid and asked price. If no such bid and asked
price is available, then the Market Value per Share shall be its fair market
value as determined by the Committee, in its sole and absolute discretion.
8. Exercise of Options.
(a) Generally. The Committee shall specify in each Agreement the period of
years over which the underlying Options shall become exercisable, provided that
such vesting shall occur no more rapidly than with respect to twenty percent
(20%) of the Optioned Shares upon the Participant's completion of each of five
Years of Service. Notwithstanding the foregoing, an Option shall become fully
(100%) exercisable immediately upon termination of the Participant's Continuous
Service due to Disability, death or retirement as defined in paragraphs
(f)(1)(a) and (b) of this Section 8.
(b) Procedure for Exercise. A Participant may exercise Options, subject to
provisions relative to its termination and limitations on its exercise, only by
(1) written notice of intent to exercise
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the Option with respect to a specified number of Shares, and (2) payment to the
Company (contemporaneously with delivery of such notice) in cash, in Common
Stock, or a combination of cash and Common Stock, of the amount of the Exercise
Price for the number of Shares with respect to which the Option is then being
exercised. Each such notice (and payment where required) shall be delivered, or
mailed by prepaid registered or certified mail, addressed to the Chief Financial
Officer of the Company at its executive offices. Common Stock utilized in full
or partial payment of the Exercise Price for Options shall be valued at its
Market Value at the date of exercise, and may consist of Shares subject to the
Option being exercised. An Option may not be exercised for a fractional Share.
(c) Timing of Exercise. Any election by a Participant to exercise Options
shall be made during the period beginning on the third business day following
the release for publication of quarterly or annual financial information and
ending on the 12th business day following such date. This condition shall be
deemed to be satisfied when the specific financial data is first made publicly
available.
(d) Period of Exercisability. Except to the extent otherwise provided in
the terms of this Plan or an Agreement, an Option may be exercised by a
Participant only while he or she has maintained Continuous Service from the date
of the grant of the Option, or within 30 days after termination of such
Continuous Service (but not later than the date on which the Option would
otherwise expire), except if the Participant's Continuous Service terminates by
reason of -
(1) "Just Cause" which for purposes hereof shall have the meaning set
forth in any unexpired employment or severance agreement between the
Participant and the Bank and/or the Company (and, in the absence of
any such agreement, shall mean termination because of the
Participant's personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule
or regulation (other than traffic violations or similar offenses) or
final cease and desist order), then the Participant's rights to
exercise such Option shall expire on the date of such termination;
(2) Death, then to the extent that the Participant would have been
entitled to exercise the Option upon his or her death, such Option of
the deceased Participant may be exercised within two years from the
date of his or her death (but not later than the date on which the
Option would otherwise expire) by the personal representatives of his
or her estate or person or persons to whom his or her rights under
such Option shall have passed by will or by laws of descent and
distribution;
(3) Disability, then to the extent that the Participant would have
been entitled to exercise the Option immediately prior to his or her
Disability, such Option may be exercised within one year from the date
of termination of employment due to Disability, but not later than the
date on which the Option would otherwise expire;
(4) Retirement, then in accordance with paragraph (f) of this Section
8.
(e) Effect of the Committee's Decisions. The Committee's determination as
to whether a Participant's Continuous Service has ceased, and the effective date
thereof, shall be final and conclusive on all persons affected thereby.
(f) Retirement.
(1) If an Associate or Director retires from the Company possessing ISOs
and NQOs that were awarded after April 24, 2003 and that are not fully, one
hundred percent (100%) vested at the
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time of such retirement, the unvested options awarded after April 24, 2003,
shall immediately become one hundred percent (100%) vested upon retirement.
In addition, such retiring Associate or Director may exercise those ISOs
awarded after April 24, 2003 that became fully vested upon retirement
within 90 days of the date of his retirement rather than the 30 days
provided for in Section 8(d) above; and may exercise the NQOs awarded after
April 24, 2003 that became fully vested upon retirement within one year of
the date of his retirement rather than the 30 days provided for in Section
8(d) above (but not later than the date on which the Option would otherwise
expire). For purposes of paragraph 8(f) "retires" means
(i) for an Associate of the Company, to leave the employment of the
Company after the Associate completes five years of employment with
the Company and attains age 55 under circumstances that would permit
the Associate to continue to participate in the Company's group health
plan until the Associate attains age 65 and becomes eligible to
participate in the Medicare supplemental group health plan offered by
the Company, as these plans now exist.
(ii) for a member of the Board of Directors of the Company, resigning
as a director of the Company after the director has served as a member
of the Board of Directors for a period of at least six consecutive
years and has attained age 55.
(2) As consideration for the accelerated vesting and extended exercise
period of the options set forth in sub-paragraph 8(f)(1) above, the
Associate must agree in writing that he or she will not compete with the
Company anywhere within the State of Delaware and within an area that is
fifty miles from the borders of the State of Delaware for a period of three
years following the date on which the Associate exercises his or her last
option. 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 the exercise of any
options that would have otherwise been forfeited but for the provisions of
this Paragraph 8(f). For purpose of this Paragraph 8(f), "compete with the
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.
9. SAR'S (Stock Appreciation Rights)
(a) Granting of SARs. In its sole discretion, the Committee may from time
to time grant SARs either in conjunction with, or independently of, any Options
granted under the Plan. An SAR granted in conjunction with an Option may be an
alternative right wherein the exercise of the Option terminates the SAR to the
extent of the number of Shares purchased upon the exercise of the Option and,
correspondingly, the exercise of the SAR terminates the Option to the extent of
the number of Shares with respect to which the SAR is exercised. Alternatively,
an SAR granted in conjunction with an Option may be an additional right wherein
both the SAR and the Option may be exercised. An SAR may not be granted in
conjunction with an ISO under circumstances in which the exercise of the SAR
affects the right to exercise the ISO or vice versa, unless the SAR, by its
terms, meets all of the following requirements:
(1) The SAR will expire no later than the ISO;
(2) The SAR may be for no more than the difference between the
Exercise Price of the ISO and the Market Value per Share of the
Shares subject to the ISO at the time the SAR is exercised;
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(3) The SAR is transferable only when the ISO is transferable, and
under the same conditions;
(4) The SAR may be exercised only when the ISO may be exercised; and
(5) The SAR may be exercised only when the Market Value of the Shares
subject to the ISO exceeds the aggregate Exercise Price of the
Shares subject to the ISO.
(b) Exercise Price. The Exercise Price as to any particular SAR shall not
be less than the Market Value per Share of the Optioned Shares on the date of
grant.
(c) Exercise of SARs. The provisions of Paragraph 8(c) hereof regarding the
period of exercisability of Options are incorporated by reference herein, and
shall determine the period of exercisability of SARs. An SAR granted hereunder
shall be exercisable at such times and under such conditions as shall be
exercisable at such times and under such conditions as shall be permissible
under the terms of the Plan and of the Agreement granted to a Participant,
provided that an SAR may not be exercised for a fractional Share. Upon exercise
of an SAR, the Participant shall be entitled to receive, without payment to the
Company except for applicable withholding taxes, an amount equal to the excess
of (or, in the discretion of the Committee if provided in the Agreement, a
portion of) the then aggregate Market Value of the number of Optioned Shares
with respect to which the Participant exercises the SAR, over the aggregate
Exercise Price of such number of Optioned Shares. This amount shall be payable
by the Company, in the discretion of the Committee, in cash or in Shares valued
at the then Market Value thereof, or any combination thereof.
(d) Timing of Exercise. Any election by a Participant to exercise SARs
shall be made during the period beginning on the third business day following
the release for publication of quarterly or annual financial information and
ending on the 12th business day following such date. This condition shall be
deemed to be satisfied when the specified financial data is first made publicly
available.
(e) Procedure for Exercising SARs. To the extent not inconsistent herewith,
the provisions of Paragraph 8(b) hereof as to the procedure for exercising
Options are incorporated by reference, and shall determine the procedure for
exercising SARs.
10. Phantom Stock Awards.
Any Phantom Stock Awards that the Committee may grant shall be subject to
the following terms and conditions, and to such other terms and conditions as
are either applicable generally to Awards, or are prescribed by the Committee in
an Agreement with the Participant.
(a) Awards Generally. With respect to each Phantom Stock Award, the Company
shall establish an Account in the Participant's name, and shall credit that
Account with the number of Shares specified in the Agreement effecting the
Award.
(b) Vesting Restrictions. At any time, the Committee may at its discretion
impose a restriction period for the Phantom Stock (the "Restriction Period").
The Restriction Period may differ among Participants and may have different
expiration dates with respect to Shares covered by the Award. The Committee
shall determine the restrictions applicable to the award of Phantom Stock,
including, but not limited to, requirements of Continuous Service for a
specified term, or the attainment
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of specific corporate, divisional or individual performance standards or goals,
which restrictions may differ with respect to each Participant. The Agreement
shall provide for forfeiture of Shares covered thereby if the specified
restrictions are not met during the Restriction Period, and may provide for
early termination of any Restriction Period in the event of satisfaction of the
specified restrictions prior to expiration of the Restriction Period.
(c) Acceleration of Vesting. Phantom Stock shall vest automatically to the
Participant in the event of his or her death or Disability prior to the
expiration of the Restriction Period or the satisfaction of the restrictions
applicable to an award of Phantom Stock. Notwithstanding the Restriction Period
and the restrictions imposed on the Phantom Stock, as set forth in any
Agreement, the Committee may shorten the Restriction Period or waive any
restrictions, if the Committee concludes that it is in the best interests of the
Company to do so.
(d) Payment of Awards. Upon the expiration of the Restricted Period and the
full vesting of shares in a Participant's account, the Participant may receive
the fully vested portion of his or her Account, provided that the Participant
has notified the Committee six months prior to the date such expiration of the
Restriction Period and full vesting occur, that the Participant intends to
withdraw the fully vested portion of his or her account. The Company shall make
such payment in cash, and in a lump sum unless the Participant has elected, more
than six months before first becoming vested in any portion of the Phantom Stock
Award, to receive all or part of his or her vested Account - (i) in
substantially equal annual installments over a period of up to five years,
beginning with the year in which the Participant's Continuous Service ends,
and/or (ii) in unrestricted whole Shares, with cash paid in lieu of fractional
shares, provided that the Committee shall at all times have the discretion to
make payments in cash regardless of the Participant's election.
(e) Forfeiture of Stock. Each Agreement shall provide for forfeiture of any
Phantom Stock which is not vested in the Participant or for which the
restrictions have not been satisfied during the Restriction Period.
11. Change of Control.
The provisions of any Award which provides for its exercise or vesting in
installments shall immediately and permanently lapse on the date of a Change in
Control. Consequently, all Options, SARs, and Phantom Stock Awards shall become
immediately exercisable and fully vested on the date of the Change in Control.
With respect to Options, at the time of a Change in Control, the Participant
shall, at the discretion of the Committee, be entitled to receive cash in an
amount equal to the excess of the Market Value of the Common Stock subject to
such Option over the Exercise Price of such Shares, in exchange for the
cancellation of such Options by the Participant.
12. Effect of Changes in Common Stock Subject to the Plan.
(a) Recapitalizations: Stock Splits, Etc. The number and kind of Shares
reserved for issuance under the Plan, and the number and kind of shares subject
to outstanding Awards, and the Exercise Price thereof, shall be proportionately
adjusted for any increase, decrease, change or exchange of Shares for a
different number or kind of shares or other securities of the Company which
results from a merger consolidation, recapitalization, reorganization,
reclassification, stock dividend, split-up, combination of shares or similar
event in which the number or kind of shares is changed without the receipt or
payment of consideration by the Company.
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(b) Transactions in which the Company is Not the Surviving Entity. In the
event of (i) the liquidation or dissolution of the Company, (ii) a merger or
consolidation in which the Company is not the surviving entity, or (iii) the
sale or disposition of all or substantially all of the Company's assets (any of
the foregoing to be referred to herein as a "Transaction"), all outstanding
Awards, together with the Exercise Prices thereof, shall be equitably adjusted
for any change or exchange of Shares for a different number or kind of shares or
other securities which results from the Transaction.
(c) Special Rule for ISOs. Any adjustment made pursuant to subparagraphs
(a) or (b)(1) hereof shall be made in such a manner as not to constitute a
modification, within the meaning of Section 424(h) of the Code, of outstanding
ISOs.
(d) Conditions and Restrictions on New, Additional, or Different Shares or
Securities. If, by reason of any adjustment made pursuant to this paragraph, a
Participant becomes entitled to new, additional, or different shares of stock or
securities, such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and restrictions which were
applicable to the Shares pursuant to the Award before the adjustment was made.
(e) Other Issuances. Except as expressly provided in this Paragraph 12, the
issuance by the Company or an Affiliate of Shares of stock of any class, or of
securities convertible into Shares or stock of another class, for cash or
property or for labor or services either upon direct sale or upon the exercise
of rights or warrants to subscribe therefore, shall not affect, and no
adjustment shall be made with respect to, the number, class or Exercise Price of
Shares then subject to Awards or reserved for issuance under the Plan.
(f) Certain Special Dividends. The Exercise Price of Shares subject to
outstanding Awards shall be proportionately adjusted upon the payment of a
special large and nonrecurring dividend that has the effect of a return of
capital to the stockholders.
13. Non-Transferability of Awards.
Awards may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent and
distribution. Notwithstanding the foregoing, or any other provision of this
Plan, a Participant who holds Awards may transfer such Awards (but not ISOs) to
his or her spouse, lineal ascendants, lineal descendants, or to a duly
established trust for the benefit of one or more of these individuals. Awards so
transferred may thereafter be transferred only to the Participant who originally
received the grant or to an individual or trust to whom the Participant could
have initially transferred the Awards pursuant to this Paragraph 13. Awards
which are transferred pursuant to this Paragraph 13 shall be exercisable by the
transferee according to the same terms and conditions as applied to the
Participant.
14. Time of Granting Awards.
The date of grant of an Award shall, for all purposes, be the date on which
the Committee makes the determination of granting such Award. Notice of the
determination shall be given to each Participant to whom an Award is so granted
within a reasonable time after the date of such grant.
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15. Effective Date.
This Amended and Restated Plan shall become effective immediately upon its
approval by a favorable vote of stockholders owning at least a majority of the
total votes eligible to be cast at a duly called meeting of the Company's
stockholders held in accordance with applicable laws. Any Awards made prior to
approval of the Plan by the stockholders of the Company shall be contingent on
such approval.
16. Modification of Awards.
At any time, and from time to time, the Board may authorize the Committee
to direct execution of an instrument providing for the modification of any
outstanding Award, provided no such modification shall confer on the holder of
said Award any right or benefit which could not be conferred on him or her by
the grant of a new Award at such time, or impair the Award without the consent
of the holder of the Award.
17. Amendment and Termination of the Plan.
The Board may from time to time amend the terms of the Plan, and, with
respect to any Shares at the time not subject to Awards, suspend or terminate
the Plan. No amendment, suspension or termination of the Plan shall, without the
consent of any affected holders of an Award, alter or impair any rights or
obligations under any Award theretofore granted.
18. Conditions Upon Issuance of Shares.
(a) Compliance with Securities Laws. Shares of Common Stock shall not be
issued with respect to any Award unless the issuance and delivery of such Shares
shall comply with all relevant provisions of law including, without limitation,
the Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, any applicable state securities law, and the requirements of any
stock exchange upon which the Shares may then be listed.
(b) Special Circumstances. The inability of the Company to obtain approval
from any regulatory body or authority deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder shall relieve
the Company of any liability in respect of the non-issuance or sale of such
Shares. As a condition to the exercise of an Option or SAR, the Company may
require the person exercising the Option or SAR to make such representations and
warranties as may be necessary to assure the availability of an exemption from
the registration requirements of federal or state securities law.
(c) Committee Discretion. The Committee shall have the discretionary
authority to impose in Agreements such restrictions on Shares as it may deem
appropriate or desirable, including but not limited to the authority to impose a
right of first refusal or to establish repurchase rights or both of these
restrictions.
19. Reservation of Shares.
The Company, during the term of the Plan, will reserve and keep available a
number of Shares sufficient to satisfy the requirements of the Plan.
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20. Withholding Tax.
The Company's obligation to deliver cash or Shares upon vesting of Phantom
Stock or upon exercise of Options and/or SARs shall be subject to the
Participant's satisfaction of all applicable federal, state and local income and
employment tax withholding obligations. Each Participant may satisfy the
obligation, in whole or in part, by irrevocably electing to have the Company
withhold Shares, or to deliver to the Company Shares that he or she already
owns, having a value equal to the amount required to be withheld. The value of
the Shares to be withheld, or delivered to the Company, shall be based on the
Market Value of the Shares on the date the amount of tax to be withheld is to be
determined. As an alternative, the Company may retain, or sell without notice, a
number of such Shares sufficient to cover the amount required to be withheld.
21. No Employment or Other Rights.
In no event shall an Associate's or Director's eligibility to participate
or participation in the Plan create or be deemed to create any legal or
equitable right of the Associate, Director, or any other party to continue
service with the Company, the Bank or any Affiliate of such corporations. Except
to the extent provided in Paragraphs 6(b) and 9(a) hereof, no Associate or
Director shall have a right to be granted an Award or, having received an Award,
the right to again be granted an Award. However, an Associate or Director who
has been granted an Award may, if otherwise eligible, be granted an additional
Award or Awards.
22. Nonexclusivity of the Plan.
Neither the adoption of the Plan by the Board nor the submission of the
Plan to the stockholders of the Company for approval shall be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under this Plan, and such arrangements
may be either applicable generally or only in specific cases.
23. Governing Law.
The Plan shall be governed by and construed in accordance with the laws of
the State of Delaware, except to the extent that federal law shall be deemed to
apply.
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This Proxy is Solicited on Behalf of the Board of Directors
WSFS FINANCIAL CORPORATION
for the
2003 Annual Meeting of Stockholders
The 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 24, 2003 at 4:00 p.m., or at any
adjournments thereof, as follows:
The Board of Directors recommends a vote FOR all nominees and items listed
below.
1. Election of
Directors
WITHHOLD AUTHORITY
FOR ALL NOMINEES FOR ALL NOMINEES FOR ALL EXCEPT
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Nominees:
Linda C. Drake
David E. Hollowell
Claibourne D. Smith
Eugene W. Weaver
Each for a three year term
expiring 2006
Instruction: To withhold authority to vote any individual nominee(s) mark
"FOR ALL EXCEPT" and write the nominee's name you wish to withhold on the
line provided below.
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2. Ratification of the appointment of KPMG, LLP as independent auditors for
the fiscal year ending December 31, 2003.
FOR AGAINST ABSTAIN
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3. Approval of amendments to the 1997 Stock Option Plan
FOR AGAINST ABSTAIN
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The proxy is revocable and, when properly executed will be voted in the
manner directed hereby by the undersigned. If no directions are made, this
signed 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 dated March 21, 2003 and the 2002 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
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PLEASE SIGN, DATE AND RETURN
PROMPTLY USING THE ENCLOSED ENVELOPE.