WSFS FINANCIAL CORPORATION
838 Market Street
Wilmington, Delaware 19801
(302) 792-6000
March 24, 2005
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 Hotel duPont, Eleventh
and Market Streets, Wilmington, Delaware 19801 on Thursday, April 28, 2005 at
4:00 p.m. Parking validation will be available for the Hotel duPont garage or
valet. ASL Interpreter services will be provided during the meeting.
At this meeting, stockholders will be asked to consider a proposal to re-elect
four directors whose terms are expiring, to ratify the appointment of
independent auditors and to approve the WSFS Financial Corporation 2005
Incentive 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 28, 2005
To the Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders of WSFS Financial
Corporation (the "Company") will be held at the Hotel duPont, Eleventh and
Market Streets, Wilmington, Delaware 19801 on Thursday, April 28, 2005, at 4:00
p.m. The meeting will be held for the purpose of considering and acting upon the
following:
1. Election of four directors for terms of three years each;
2. Ratification of the appointment of independent auditors for the fiscal year
ending December 31, 2005;
3. Approval of the WSFS Financial Corporation 2005 Incentive Plan; and
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 8, 2005, as the record date
for the determination of stockholders entitled to notice of, and to vote, at the
Annual 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,
/s/Mark A. Turner
Mark A. Turner
Chief Operating Officer and Secretary
March 24, 2005
--------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE YOUR COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
--------------------------------------------------------------------------------
WSFS FINANCIAL CORPORATION
838 Market Street
Wilmington, Delaware 19801
(302) 792-6000
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 28, 2005
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 28, 2005, 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 25, 2005.
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, properly signed proxies will be voted FOR the nominees for directors
and for the other proposals as set forth herein. By signing, dating and
returning the enclosed proxy, you will give us the discretionary authority to
vote your shares for the election of any person we choose as a director in the
event that any nominee is unable or refuses to serve as a director. You will
also give us the discretionary authority to vote on any matters relating to the
conduct of the Annual Meeting. If any other business is presented at the Annual
Meeting, proxies will be voted by those named herein in accordance with the
determination of a majority of the Board of Directors.
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 sent 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 8, 2005 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 7,085,208
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, as set forth in 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 the
nominees being proposed. Directors are elected by a plurality of votes of the
shares present, in person or represented by proxy, at a meeting and entitled to
vote in the election of directors, without regard to either (i) broker non-votes
or (ii) proxies as to which authority to vote for the nominee being proposed is
withheld. The proxy confers discretionary authority on the persons named therein
to vote with respect to the election of any person as a director should the
nominee be unable to serve, or for good cause, will not serve.
As to the ratification of independent auditors as set forth in Proposal 2, by
checking the appropriate box, a stockholder may: (i) vote "FOR" the item, (ii)
vote "AGAINST" the item, or (iii) vote to "ABSTAIN" on such item. Unless
otherwise required by law, Proposal 2 and any other matters shall be determined
by a majority of votes cast affirmatively or negatively without regard to (a)
Broker Non-Votes or (b) proxies marked "ABSTAIN" as to that matter.
As to the approval of the 2005 Incentive Plan as set forth in Proposal 3, by
checking the appropriate box, a stockholder may: (i) vote "FOR" the item; (ii)
vote "AGAINST" the item, or (iii) vote to "ABSTAIN" on such item. Proposal 3
shall be determined by a majority of votes cast affirmatively or negatively
without regard to Broker Non-Votes. Proxies marked "ABSTAIN" will have the same
impact as a vote "AGAINST" Proposal 3.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Associates, officers and directors of the Company have an interest in certain
matters to be voted upon at the Annual Meeting. Following stockholder approval,
Associates, officers and directors of the Company may be awarded shares of
Common Stock and may be granted stock options pursuant to the 2005 Incentive
Plan. The approval of this plan is being presented as "Proposal 3 - Approval of
the WSFS Financial Corporation 2005 Incentive Plan."
SOLICITATION OF QUESTIONS BY THE BOARD OF DIRECTORS
The Board of Directors recognizes that the annual meeting is an opportunity
where the Board is available to its stockholders in a public forum. The Board of
Directors invites stockholders to submit questions for the Board in advance of
the meeting. While legal and timing issues may prevent the Board of Directors
from answering all questions submitted, the Board believes such dialogue will be
helpful in increasing communication between stockholders and the Board of
Directors.
Any stockholder wishing to present a question to the Board of Directors is
invited to send questions to:
WSFS Financial Corporation
Investor Relations
838 Market St.
Wilmington, DE 19801
or
stockholderrelations@wsfsbank.com
The Board will attempt to answer as many of the questions received as is
possible and post the responses on our website: www.wsfsbank.com.
2
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
---- ------------- --------
Private Capital Management (2) 627,701 shares 8.86 %
8889 Pelican Bay Boulevard
Naples, FL 34108
R. Ted Weschler (3) 608,400 shares 8.58 %
Peninsula Capital Advisors, LLC
Peninsula Partners, L.P.
404B East Main Street
Charlottesville, VA 22902
Barclays Global Investors, NA (4) 517,439 shares 7.30 %
45 Freemont Street
San Francisco, CA 94105
Wellington Management Company, LLP (5) 474,400 shares 6.70 %
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 of any shares of
Common Stock if he or she has or shares voting and/or investment power with
respect to such Common Stock or has a right to acquire beneficial ownership
at any time within 60 days from the Record Date. As used herein, "voting
power" 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
groups exercise sole voting and investment power over the shares of the
Common Stock.
(2) According to the Statement on Schedule 13G/A of Private Capital Management
filed on February 14, 2005, shares are held by its investment advisory
clients as to which it shares voting and investment power.
(3) Includes 600,000 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 4,100 shares held directly by Mr. Weschler and 4,300
shares of Common Stock that may be acquired through the exercise of options
within 60 days of the Record Date.
(4) According to the Statement on Schedule 13G/A of Barclays Global Investors,
NA filed on February 14, 2005, the shares reported are held by Barclays
Global Investors, NA and its affiliates.
(5) According to the Statement on Schedule 13G/A of Wellington Management
Company, LLP filed on February 14, 2005, shares are held by its investment
advisory clients as to which it shares voting and/or investment power.
3
PROPOSAL 1 -- ELECTION OF DIRECTORS
The number of directors is currently fixed at thirteen 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. 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"). Mr. Wolf's term is
expiring and he is not standing for re-election as a director of the Company and
will no longer be a director emeritus for the Bank. Directors of the Company are
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 Certificate of 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 four 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, it 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.
Julian, Dennis E. Klima and Calvert A. Morgan, Jr., 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. Alternatively, the Board of Directors may elect to reduce the number
of authorized directors to eliminate the vacancy.
The Board of Directors Recommends Voting "FOR" the Directors Nominated in
Proposal 1.
4
Directors and Nominees
The following table sets forth information for each nominee and each director
continuing in office. It includes their name, age (as of December 31, 2004),
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) (1)
---- --- -------- ------ -------------------- -------------------
NOMINEES FOR A TERM TO EXPIRE IN 2008
Charles G. Cheleden 61 1990 2005 October 1992 to present: Vice WSFS
Chairman of WSFS Financial
Corporation; Lead Director;
Former Chairman, WSFS
Financial Corporation;
Self-employed attorney
Joseph R. Julian 67 1988 2005 Chairman and CEO, JJID, Inc. WSFS;
(highway construction company) JJID, Inc.
Dennis E. Klima 60 2004 2005 President and CEO, Bayhealth, Inc. WSFS;
CEO and Chairman, Bayhealth, Inc.;
Bayhealth Medical Center, Inc. Bayhealth Medical Center, Inc.
Calvert A. Morgan, Jr. 56 2004 2005 Consultant; WSFS;
Chairman, President and CEO Chesapeake Utilities
PNC Bank, Delaware (retired) Corporation
DIRECTORS CONTINUING IN OFFICE
Linda C. Drake 56 1999 2006 Founder and Chair WSFS;
TCIM Services, Inc. TCIM Services, Inc.;
(business services and software LTD Direct
technology companies)
David E. Hollowell 57 1996 2006 Executive Vice President and WSFS
University Treasurer
University of Delaware
Claibourne D. Smith 66 1994 2006 Vice President - Technology and WSFS
Professional Development, E.I.
duPont de Nemours & Company,
Incorporated, (multinational
chemical and energy company)
(1964-1998) (retired)
5
DIRECTORS CONTINUING IN OFFICE (Continued)
Year First Current
Elected or Term
Appointed to
Name Age Director Expire Principal Occupation Directorship(s)
---- --- -------- ------ -------------------- ---------------
Eugene W. Weaver 72 1998 2006 Vice President of Finance of WSFS;
John W. Rollins & Associates Dover Motorsports, Inc.
(Investment Management
Company)(retired), Chief Financial
Officer/Senior Vice President
of Dover Downs Entertainment, Inc.
(1970-1999) (retired)
John F. Downey 67 1998 2007 Executive Director of the WSFS
Office of Thrift Supervision (OTS),
1989-1998 (retired)
Thomas P. Preston 58 1990 2007 Partner, Blank Rome, LLP; WSFS
previously Partner,
Reed Smith, LLP and
Duane, Morris & Heckscher LLP
(Law firms)
Marvin N. Schoenhals 57 1990 2007 Chairman of WSFS Financial WSFS and affiliates (1);
Corporation since 1992; President Federal Home Loan Bank
and Chief Executive Officer of of Pittsburgh (Chairman);
WSFS Financial Corporation Brandywine Fund, Inc. and
since November 1990 affiliates (2);
Delaware State Chamber of
Commerce (Chairman)
R. Ted Weschler 43 1992 2007 Managing Member, WSFS;
Peninsula Capital Advisors, LLC, Virginia National Bank;
an investment advisory firm; First Avenue Networks, Inc.
October 1989 to December 1999, Wilsons The Leather
Partner and Officer of Quad-C, Experts, Inc.
Inc., a Delaware corporation which
acts as the general partner for
several investment partnerships
(1) WSFS affiliates include: WSFS Credit Corporation, WSFS Investment Group,
Inc., WSFS Reit, Inc. and Montchanin Capital Management, Inc. and are
subsidiaries of the Company. It also includes WSFS Foundation, Inc., a
charitable foundation associated with the Company.
(2) Brandywine Fund, Inc. affiliates include: Brandywine Blue Fund, Inc. and
Brandywine Advisors Fund, Inc.
6
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 officers 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) 14,100 shares *
John F. Downey (4)(5) 8,800 shares *
Linda C. Drake (6) 8,300 shares *
David E. Hollowell (6) 14,400 shares *
Joseph R. Julian (4) 67,576 shares *
Dennis E. Klima (7) 1,650 shares *
Calvert A. Morgan, Jr. 1,100 shares *
Thomas P. Preston (8) 10,912 shares *
Marvin N. Schoenhals (9) 251,348 shares 3.45%
Claibourne D. Smith (4) 9,530 shares *
Eugene W. Weaver (10) 12,200 shares *
R. Ted Weschler (4)(11) 608,400 shares 8.58%
Dale E. Wolf (4) 26,040 shares *
Karl L. Johnston (12) 48,814 shares *
Stephen A. Fowle 500 Shares *
Mark A. Turner (13) 135,830 shares 1.89%
Deborah A. Powell (14) 18,454 shares *
Directors and executive officers
as a group (17 persons) 1,237,954 shares 16.51%
--------------
* 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
and/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, 3,200 shares; Mr. Downey, 3,900
shares, Ms Drake, 5,000 shares; Mr. Hollowell, 7,000 shares; Mr. Julian,
59,676 shares; Mr. Johnston, 4,533 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 6,600 shares of Common Stock held in an Individual Retirement
Account ("IRA").
(4) Includes 4,300 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 3,300 shares of Common Stock that may be acquired through the
exercise of options within 60 days of the Record Date.
(7) Includes 500 shares of Common Stock held in a 401(k) Plan.
(8) Includes 3,660 shares of Common Stock that may be acquired through the
exercise of options within 60 days of the Record Date and 1,275 shares of
Common Stock held in an IRA.
(9) Includes 20,771 shares of Common Stock held in Mr. Schoenhals' account in
the Company's 401(k) Plan and 205,711 shares of Common Stock that may be
acquired through the exercise of options within 60 days of the Record Date.
(Footnotes continued on next page)
7
(10) Includes 1,200 shares of Common Stock that may be acquired through the
exercise of options within 60 days of the Record Date, 1,000 shares of
Common Stock held in an IRA and 800 shares of Common Stock held by Mr.
Weaver's wife. Mr. Weaver disclaims beneficial ownership of his wife's
shares.
(11) Includes 600,000 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.
(12) Includes 394 shares of Common Stock held in Mr. Johnston's account in the
Company's 401(k) Plan and 43,887 shares of Common Stock that may be
acquired through the exercise of options within 60 days of the Record Date.
(13) Includes 9,350 shares of Common Stock held in Mr. Turner's account in the
Company's 401(k) Plan and 116,200 shares of Common Stock that may be
acquired through the exercise of options within 60 days of the Record Date.
(14) Includes 1,684 shares of Common Stock held in Ms Powell's account in the
Company's 401(k) Plan and 10,950 shares of Common Stock that may be
acquired through the exercise of options within 60 days of the Record Date.
Position and Duties of the Lead Director
The Board of Directors has designated Charles G. Cheleden, Vice Chairman, as
Lead Director. The Lead Director is an outside and independent director
designated by the Board of Directors of the Company to lead the Board to fulfill
its duties effectively, efficiently and independent of management.
The responsibilities of the Lead Director include: (1) Enhancing Board
effectiveness, (2) Managing the Board and (3) Acting as a liaison between the
Board, management and major shareholders.
o Responsibilities for enhancing Board effectiveness include ensuring the
Board has adequate training and resources to carry out its duties.
o Responsibilities for managing the Board include: providing input on Board
and Committee meeting agendas; consulting with Chairman on effectiveness of
Board Committees; ensuring that Directors have adequate opportunities to
meet to discuss issues without management's presence; chairing Board
meetings in the absence of the Chairman; ensuring that Committee functions
are carried out and reported to the Board. In addition the lead director
has the authority to call meetings of the independent directors.
o Responsibilities as liaison include: communicating to management, as
appropriate, to discuss the results of private discussions among
independent directors to resolve conflicts; and being available, as
necessary, for consultation and direct communication with major
shareholders.
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, 2004 the Board of
Directors held nine (9) 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, or more frequently if required, and exercises the powers of the Board of
Directors between meetings of the
8
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 twenty-four (24) times during 2004.
Corporate Governance and Nominating Committee. The Corporate Governance and
Nominating Committee consists of directors who are independent in accordance
with the listing requirements of the Nasdaq Stock Market. 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. Members of the Corporate Governance and
Nominating Committee are Charles G. Cheleden, Chairman, John F. Downey, Linda C.
Drake, Thomas P. Preston and Dale E. Wolf. Each member of the Corporate
Governance and Nominating Committee is "independent" as defined in the listing
standards of the National Association of Securities Dealers. The Corporate
Governance and Nominating Committee met three times during 2004. The Corporate
Governance and Nominating Committee has adopted a written charter governing the
Committee's responsibilities. A copy of the Corporate Governance and Nominating
Committee Charter is available on the Company's website at www.wsfsbank.com.
Director Nomination Process. The Company does not currently pay fees to any
third party to identify, evaluate or assist in identifying or evaluating
potential nominees for the Board of Directors. The Committee's process for
identifying and evaluating potential nominees includes soliciting
recommendations from directors and officers of the Company and its wholly-owned
subsidiary, Wilmington Savings Fund Society, FSB. Additionally, the Committee
will consider persons recommended by stockholders of the Company in selecting
the Committee's nominees for election. There is no difference in the manner in
which the Committee evaluates persons recommended by directors or officers and
persons recommended by stockholders in selecting Board nominees.
To be considered in the Committee's selection of Board nominees, recommendations
from stockholders must be received by the Company in writing not less than 60
days nor more than 90 days prior to the anniversary date of the mailing date of
the proxy statement for the previous year's annual meeting. Recommendations
should identify as to the stockholder giving notice and for each person the
stockholder proposes to recommend as a nominee to the Board (1) the name, age,
business address of such person; (2) the principal occupation or employment of
such person; (3) the Class and number of shares of the Company's Voting Stock
(as defined in the Company's Bylaws) which are beneficially owned by such
stockholder on the date of such notice; and (4) any other information required
to be included in such notice pursuant to the Company's Bylaws or disclosed in
solicitations of proxies with respect to nominees for election of directors set
forth in the Securities Exchange Act of 1934.
Persons recommended for consideration as nominees by the Board are subject to
the director qualification requirements set forth in Article II, Sections 6 and
7 of the Company's Bylaws, which require that (i) directors must be shareholders
of the Company; and (ii) directors must be persons of good character and
integrity and must also have been nominated by persons of good character and
integrity.
The Board desires that its membership be geographically diverse and as a result,
potential directors should enhance the Board's state-wide representation. The
Board also desires that its membership have
9
expertise in a diversity of business sectors. As a commitment to this
diversification, the Board believes potential directors should be knowledgeable
about the business activities and market areas in which the Company and its
subsidiaries engage.
Stockholder Communications. The Board of Directors does not have a formal
process for stockholders to send communications to the Board. In view of the
infrequency of stockholder communications to the Board of Directors, the Board
does not believe that a formal process is necessary. The Board, however,
strongly encourages communications from stockholders and gives such
communications its prompt attention. See "Solicitation of Questions By The Board
of Directors" on page 2 of this Proxy for information about submitting questions
in advance of the Annual Meeting of Shareholders. Written communications
received by the Company from stockholders are shared with the full Board no
later than the next regularly scheduled Board meeting. In addition, Directors
are accessible to shareholders on an informal basis throughout the year and
formally at the Annual Meeting. The Board encourages, but does not require,
directors to attend the Annual Meeting of Stockholders. All Board Members,
except one, attended the 2004 Annual Meeting of Stockholders.
Audit Committee. The Audit Committee is comprised 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. It also meets quarterly with the
internal loan review department. 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, to review financial statements prior to their
public release. They also meet annually to review the Company's risk analysis
and 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 John F. Downey, Chairman, Joseph R. Julian, Claibourne D.
Smith and Eugene W. Weaver. Each member of the Audit Committee is "independent"
as defined in the listing standards of the Nasdaq Stock Market. The Audit
Committee met ten (10) times during fiscal year 2004. The Board of Directors has
determined that Mr. Weaver, a member of the Company's Audit Committee, is an
"Audit Committee Financial Expert" as that term is defined in the Securities
Exchange Act of 1934. The Board of Directors has determined that Mr. Weaver is
independent as that term is used in item 7(d)(3)(iv)(A) of Schedule 14A of the
Securities Act of 1934.
Personnel and Compensation Committee. The Personnel and Compensation Committee
("Personnel Committee") is comprised of directors who are independent in
accordance with the listing standards of the Nasdaq Stock Market. 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 Associates. 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. They will
oversee the administration of the 2005 Incentive Plan, if approved by
stockholders. Present members of the Personnel Committee are David E. Hollowell,
Chairman, Linda C. Drake, Claibourne D. Smith, and R. Ted Weschler. The
Personnel Committee met five (5) times during 2004.
Directors' Compensation. During 2004, each non-Associate director received an
annual retainer of $14,000 plus 500 shares of the Company's Common Stock and a
grant of 1,000 options under the 1997 Stock Option Plan. Chairpersons of board
committees received an additional annual retainer as follows:
10
Personnel and Compensation Committee, $1,500; Audit Committee, $2,500; Corporate
Governance and Nominating Committee, $2,500. Each member of a committee or
subsidiary board received $550 for each meeting attended. The Lead Director
receives an additional monthly fee of $1,500. Mr. Schoenhals does not receive
director fees as Chairman, President and Chief Executive Officer.
During 2004, the Corporate Governance and Nominating Committee ("CGNC")
undertook an extensive review and survey of director compensation benchmarked
against a high performing peer group of the Company and the industry in general.
After a review of the survey data and findings submitted by the CGNC, on
December 16, 2004, the Board of Directors approved new director compensation for
2005. In 2005, each non-Associate director will receive an annual retainer of
$15,500 plus 600 shares of the Company's Common Stock and a grant of 1,000
options under the 1997 Stock Option Plan, or the 2005 Incentive Plan if approved
by stockholders. Audit Committee members will receive an additional annual
retainer of $10,000. Chairpersons of board committees will receive an additional
annual retainer as follows: Audit Committee, $5,000; Corporate Governance and
Nominating Committee and Personnel and Compensation Committee, $3,500. Each
member of a committee will receive $650 for each meeting attended. Directors do
not receive meeting fees for Board meetings. The Lead Director receives an
additional monthly fee of $1,500. Mr. Schoenhals will continue to receive no
director fees as Chairman, President and Chief Executive Officer.
EXECUTIVE OFFICERS
Marvin N. Schoenhals, age 57, 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 currently serves as its Chairman. Since 1998
he has served on the Boards of Directors of Brandywine Fund, Inc., Brandywine
Blue Fund, Inc. and Brandywine Advisors Fund, Inc. He serves as Chairman of the
Delaware State Chamber of Commerce and is a volunteer board member of numerous
community-based organizations.
Karl L. Johnston, age 56, serves as Chief Operating Officer and Chief Lending
Officer. He was appointed Chief Operating Officer in 2001. Mr. Johnston joined
the Bank in May 1997 as Chief Lending Officer. Mr. Johnston has over 33 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 41, serves as Chief Operating Officer and Corporate
Secretary. He was appointed Chief Operating Officer in 2001. From 1998 to 2004
he also served as Chief Financial Officer. 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.
Stephen A. Fowle, age 39, was appointed Executive Vice President and Chief
Financial Officer in January 2005. From 2000 to 2004, Mr. Fowle was Chief
Financial Officer at Third Federal Savings and Loan Association of Cleveland,
MHC, in Cleveland, Ohio. From 1994 to 2000, Mr. Fowle was Vice President of
Corporate Finance at Robert W. Baird & Co, Incorporated in Milwaukee, Wisconsin,
a regional investment banking firm.
Deborah A. Powell, age 48, has served as Executive Vice President and Director
of Human Resources since May 2000. From November 1997 to May 2000, Ms Powell was
Vice President of Human Resources at Huffy Service First, a national retail
services company. From November 1996 to October 1997, she was Human Resources
Manager of The Limited-Alliance Data System, a retail call center operation.
From 1991 to 1996, she was National Practice Director of Midwest Resources,
Inc., a Human Resources and Organizational Development consulting practice.
11
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, 2004;
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, 2004 for filing with the SEC.
The Audit Committee comprised of Messrs. Downey, Julian, Smith and Weaver has
provided this report.
Personnel and Compensation Committee Report on Executive Compensation
Overview and Philosophy. The Personnel Committee oversees the Company's
executive compensation programs. 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
is responsible for compliance with Rule 16b-3 of the Exchange Act. The
Committee's charter is shown in Appendix B.
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 achieving specific performance based criteria and stock-based compensation
for building long-term stockholder value.
In setting the compensation levels of senior executives of the Company, the
Committee evaluates many different sources of information. These include, but
are not limited to, the experience level of the executive; the executive's
performance in the current as well as prior years; an assessment of the
executive's potential for future development; and the executive's immediate
level of responsibility. In addition, the Committee regularly monitors the
compensation program of similar sized institutions that are generally high
performing in nature. This peer group consists of public companies in the $1 to
$3 billion size category that are usually in the upper quartile of performance
with respect to return on equity, return on assets, and growth in earnings per
share. Approximately every three to four years, the Committee retains an outside
consultant to review the Company's total compensation program. The Committee
retained such a consultant during 2004 and previously had retained a consultant
in February 2002.
12
The Consultant's study compared the WSFS compensation levels for eight senior
positions to similar positions at high performing institutions over a three-year
period, ending with 2003. The conclusion of the Consultant's study is that the
compensation practices of WSFS, for the eight senior positions, are competitive.
While there were minor deviations, total compensation for each position
approximated the fiftieth percentile of the high performing peer group
comparison. The Consultant did recommend that WSFS consider enhancing the
long-term incentive component of its Executive Compensation Program. After
careful consideration, the Committee concluded that the total compensation
program was functioning appropriately and consequently made no changes in the
long-term incentive component of executive compensation.
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.
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. As
discussed above, the Personnel Committee evaluates many different sources
of information to determine appropriate levels of base salaries for its
executives.
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 2004, the corporate
performance criteria were: return on assets, return on equity and growth
in earnings per 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 three criteria above, and in completion of specific individual
performance criteria. Total awards earned under the MIP during 2004 were
approximately $1.5 million and were paid in cash during 2005.
In addition to the awards program described above, certain subsidiaries of
the Corporation employ incentive programs that provide bonus opportunities
to its executives based on the performance of their respective
subsidiaries.
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 87,495
stock options in 2004. 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 2004, Mr.
Schoenhals earned $397,708 in base salary. Mr. Schoenhals earned $400,000 in
bonus for fiscal year 2004 under the MIP that was paid after the end of the
fiscal year. This bonus reflects the Company's achievement of specific financial
goals for the 2004 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
13
executing the Company's business strategy. In addition to the foregoing cash
compensation, Mr. Schoenhals was awarded options to purchase 9,500 shares of
Common Stock under the 1997 Stock Option Plan representing 10.9% of the regular
options granted to all Associates during the year.
Compensation of Special Advisor to Management. On August 23, 2004, Calvert A.
Morgan, Jr. was elected a Director of WSFS Financial Corporation and also serves
in a consulting capacity as a Special Advisor to Management. In his role as a
Special Advisor to Management, Mr. Morgan performs such duties as requested by
the Board of Directors and the Chairman to assist in improving the performance
of WSFS Financial Corporation. In addition to his Director fees, Mr. Morgan will
receive an annual base consulting fee of $100,000, with the opportunity to earn
a supplemental payment ranging from 0% to 100% of the base fee, with the amount
to be determined at the discretion of the Chairman, based on the overall results
of WSFS for the year, loan and deposit growth, and the Chairman's subjective
assessment of Mr. Morgan's overall contribution to those results. Additionally,
Mr. Morgan is provided with other benefits including stock option awards (5,000
options were awarded during 2004). As part of the terms of his consulting
engagement with the Company, Mr. Morgan is also entitled to a separation payment
of up to $110,000, based on the length of the term of his engagement.
During 2004, Mr. Morgan was deemed "independent" as defined in the listing
standards of the National Association of Securities Dealers. However in 2005,
Mr. Morgan will not be considered an independent director of the Company under
those listing standards. The Board of Directors weighed the benefits of
retaining Mr. Morgan and determined that his extraordinary industry background,
market knowledge, customer relationships and community involvement would be
invaluable to both the Board of Directors and management. Mr. Morgan was
formerly Chairman, President and CEO of PNC Bank, Delaware and has 35 years
experience in the banking industry in Delaware.
Compensation Committee Interlocks and Insider Participation. The Company had no
"interlocking" relationships existing on or after December 31, 2004 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 are David E. Hollowell, Chairman,
Linda C. Drake, Claibourne D. Smith and R. Ted Weschler, each of whom are
directors of the Company.
14
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 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,
1999, 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, 1999 in the Common Stock of the Company and in each of
the indexes. There can be no assurance that the Company's future stock
performance will be the same or similar to the historical stock performance
shown in the graph below. The Company neither makes nor endorses any predictions
as to stock performance.
CUMULATIVE TOTAL SHAREHOLDER RETURN
COMPARED WITH PERFORMANCE OF SELECTED INDEXES
December 31, 1999 through December 31, 2004
[GRAPHIC OMITTED]
Cumulative Total Return
-------------------------------------------------
1999 2000 2001 2002 2003 2004
-------------------------------------------------
WSFS Financial Corporation $100 $97 $140 $268 $366 $492
Dow Jones Total Market Index 100 90 78 60 77 85
Nasdaq Bank Index 100 117 131 141 187 212
15
SUMMARY COMPENSATION TABLE
The following table sets forth compensation for the years ended December 31,
2004, 2003 and 2002 for the Company's Chief Executive Officer and the four other
most highly compensated executive officers of the Company whose salary and bonus
earned in 2004 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 2004 $ 397,708 $400,000 9,500 $18,350
Chairman of the Board, 2003 384,375 536,250 12,650 18,000
President and Chief 2002 366,250 674,400 16,800 15,614
Executive Officer
Karl L. Johnston 2004 217,667 200,000 5,750 18,350
Chief Operating Officer 2003 205,000 198,000 5,350 18,000
and Chief Lending Officer 2002 198,333 255,400 20,100 15,614
Mark A. Turner (4) 2004 217,667 180,000 5,950 18,350
Chief Operating Officer and 2003 205,000 270,000 7,700 18,000
Secretary 2002 198,333 334,400 22,900 14,741
Stephen A. Fowle (4) 2004 - - - -
Executive Vice President and 2003 - - - -
Chief Financial Officer 2002 - - - -
Deborah A. Powell 2004 150,500 94,000 2,000 18,290
Executive Vice President, 2003 147,500 90,000 1,750 18,658
Director, Human Resources 2002 144,167 66,700 4,300 15,261
(1) For 2002 and 2003, includes special bonuses paid resulting from the
extraordinary performance of the Company in each of those years. For each
fiscal year, includes bonuses 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.
(4) In January 2005, Mr. Fowle was appointed Chief Financial Officer, which
were duties performed by Mr. Turner during 2004 and prior periods. Mr.
Turner was appointed Chief Operating Officer in 2001.
16
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 2004.
Potential Realizable
Number of % of Total Value at Assumed
Securities Options Annual Rates of Stock
Underlying Granted to Price Appreciation
Options Associates in Exercise Expiration for Option Term (3)
Name Granted (1) Fiscal Year Price (2) Date 5% 10%
---- ----------- ----------- --------- ----------- ---------- ----------
Marvin N. Schoenhals 9,500 10.9 $58.75 12/16/2014 $ 353,490 $ 893,470
Karl L. Johnston 5,750 6.6 58.75 12/16/2014 213,955 540,784
Mark A. Turner 5,950 6.8 58.75 12/16/2014 221,396 559,594
Stephen A. Fowle - - - - - -
Deborah A. Powell 2,000 2.3 58.75 12/16/2014 74,419 188,099
(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 Company
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 may, 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 or the 2005 Incentive Plan,
if approved by stockholders.
(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.
17
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
Shares Options at Fiscal Year End at Fiscal Year End (1)
Acquired Value ---------------------------- ---------------------------
Name at Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
Marvin N. Schoenhals 48,743 $ 1,854,501 183,711 72,740 $8,138,016 $2,413,872
Karl L. Johnston 31,551 1,091,383 52,259 42,990 2,284,222 1,461,630
Mark A. Turner - - 106,200 45,450 4,778,441 1,484,683
Stephen A. Fowle - - - - - -
Deborah A. Powell 9,200 370,174 10,950 13,880 461,154 463,547
(1) Based on the closing price of $60.00 per share as reported for the Common
Stock on the Nasdaq National Market on December 31, 2004 less the exercise
price. Options are considered in-the-money if the market value of the
underlying securities exceeds their exercise prices.
SEVERANCE POLICY
WSFS has 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
following a 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.
18
Based on salary levels at December 31, 2004 (and at January 1, 2005 in the case
of Mr. Fowle), 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 $440,000, Mr. Turner
$440,000, Mr. Fowle $360,000 and Ms Powell $302,000.
BUSINESS RELATIONSHIPS AND RELATED TRANSACTIONS
During 2004 Thomas P. Preston was a partner with the law firm of Blank Rome,
LLP. The law firm represented the Company and its affiliates in certain matters
during fiscal year 2004. The Company expects Mr. Preston to continue such
representation in fiscal year 2005.
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 2004. 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 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.
19
PROPOSAL 2 -
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company, upon recommendation of the Audit
Committee, has re-appointed, subject to stockholder ratification, KPMG LLP, as
independent auditors of the Company for the year ending December 31, 2005. 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.
Principal Accounting Firm Fees
Audit Fees. The aggregate fees billed by KPMG LLP for professional services
rendered for the audit of the Company's annual consolidated financial statements
and for the review of the consolidated financial statements included in the
Company's quarterly reports on Form 10Q for the fiscal years ended December 31,
2004 and 2003 were $648,000 and $233,000, respectively. Of the amount paid in
2004, $400,000 were costs associated with the Company's compliance with Section
404 of the Sarbanes-Oxley Act of 2002.
Audit Related Fees. The aggregate fees billed by KPMG LLP for assurance and
related services primarily related to the audit of the financial statements, the
review of the quarterly financial statements and due diligence activities on
proposed transaction for the years ended December 31, 2004 and 2003 were $16,000
and $55,000, respectively.
Tax Fees. The aggregate fees billed by KPMG LLP for professional services
rendered for tax compliance, tax advice or tax planning for the years ended
December 31, 2004 and 2003 were $90,000 and $50,000, respectively.
All Other Fees. The aggregate fees billed by KPMG LLP for professional services
rendered for services or products other than those listed under the captions
"Audit Fees," "Audit-Related Fees," and "Tax Fees" for the years ended December
31, 2004 and 2003, were $0 and $11,000, respectively.
The Audit Committee has determined that the non-audit services performed by its
principal accountants during 2004 were compatible with maintaining the principal
accountants' independence.
It is the Audit Committee's policy to approve all audit and non-audit services
prior to the engagement of the Company's independent auditor to perform any
service. Under certain circumstances, management is authorized to spend up to 5%
of the total audit fees as approved by the Audit committee in the Engagement
Letter without obtaining any additional approval. These additional fees are
reported to the Audit Committee on a timely basis. Additional audit fees ranging
from 5% to 10% of the total audit fees as approved by the Audit Committee in the
Engagement Letter require the approval of the Chairman of the Audit Committee
prior to the engagement. These additional fees are reported to the other
Committee members on a timely basis. Additional audit fees which exceed 10% of
the total audit fees as approved by the Audit Committee in the Engagement Letter
require the approval of the full Audit Committee prior to the engagement.
No services were approved pursuant to the de minimus exception of the
Sarbanes-Oxley Act of 2002. All of the services listed above for 2004 were
approved by the Audit Committee prior to the service being rendered.
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 2.
20
PROPOSAL 3-
APPROVAL OF THE WSFS FINANCIAL CORPORATION 2005 INCENTIVE PLAN
On February 23, 2005, the Board of Directors adopted, subject to stockholder
approval at the Annual Meeting, the WSFS Financial Corporation 2005 Incentive
Plan. The plan will become effective as of the date it is approved by the
stockholders.
The Company maintains the WSFS Financial Corporation 1986 Stock Option Plan (the
"1986 Plan") and the 1997 Stock Option Plan (the "1997 Plan") under which stock
options with respect to an aggregate of 854,493 shares of the Company's common
stock were outstanding and 370,170 stock options remained available for award as
of March 8, 2005. If the stockholders approve the 2005 Incentive Plan, all
future equity grants to the Company's Associates, officers and directors will be
made from the 2005 Incentive Plan, and the Company will not grant any awards
under the 1997 Plan. No future awards may be granted under the 1986 Plan.
However, the Company reserves the right to pay discretionary bonuses, or other
types of compensation, outside of the 2005 Incentive Plan.
As of March 8, 2005, approximately 81 of the Company's Associates, officers and
directors would be eligible to participate in the 2005 Incentive Plan.
A summary of the 2005 Incentive Plan is set forth below. This summary is
qualified in its entirety by reference to the full text of the plan, which is
attached to this Proxy Statement as Appendix A.
Summary of the Plan
Purpose. The purpose of the plan is to promote the Company's success by linking
the personal interests of its Associates, officers and directors more closely to
those of the Company's stockholders, and by providing participants with an
additional incentive for outstanding performance.
Permissible Awards. The plan authorizes the granting of awards in any of the
following forms:
o options to purchase shares of common stock, which may be nonstatutory stock
options or incentive stock options under the Internal Revenue Code of 1986,
as amended (the "Code");
o stock appreciation rights, which give the holder the right to receive the
difference between the fair market value per share of common stock on the
date of exercise over the grant price;
o performance awards, which are payable in cash or stock upon the attainment
of specified performance goals;
o restricted stock, which is subject to restrictions on transferability and
subject to forfeiture on terms set by the Personnel and Compensation
Committee;
o restricted stock units, which represent the right to received shares of
common stock (or an equivalent value in cash or other property) in the
future, based upon the attainment of stated vesting or performance
criteria;
o deferred stock units, which represent the vested right to received shares
of common stock (or an equivalent value in cash or other property) in the
future;
o dividend equivalents, which entitle the participant to payments (or an
equivalent value payable in stock or other property) equal to any dividends
paid on the shares of stock underlying an award;
21
o other stock-based awards in the discretion of the Personnel and
Compensation Committee, including unrestricted stock grants; and
o purely cash-based awards.
Shares Available for Awards. Subject to adjustment as provided in the plan, the
aggregate number of shares of common stock reserved and available for issuance
pursuant to awards granted under the plan is 400,000, but each share issued
under the plan pursuant to an award other than an option or stock appreciation
right shall reduce the number of available shares under the plan by four shares.
Limitations on Awards. The maximum number of shares of common stock that may be
covered by options and stock appreciation rights granted under the plan to any
one person during any one calendar year is 50,000. The maximum number of shares
of common stock that may be granted under the plan in the form of restricted
stock, restricted stock units, deferred stock units, performance shares or other
stock-based awards under the plan to any one person during any one calendar year
is 50,000. The aggregate dollar value of any performance-based cash award that
may be paid to any one participant during any one calendar year under the plan
is $2,000,000. The aggregate maximum fair market value (measured as of the grant
date) of any other awards that may be granted to any one person (less any
consideration paid by the person for such award) during any one calendar year
under the plan is $2,000,000.
Administration. The plan will be administered by the Personnel and Compensation
Committee. The Personnel and Compensation Committee will have the authority to
designate participants; determine the type or types of awards to be granted to
each participant and the number, terms and conditions thereof; establish, adopt
or revise any rules and regulations as it may deem advisable to administer the
plan; and make all other decisions and determinations that may be required under
the plan. The Board of Directors may at any time administer the plan. If it does
so, it will have all the powers of the Personnel and Compensation Committee
under the plan.
Performance Goals. All options and stock appreciation rights granted under the
plan will be exempt from the $1,000,000 deduction limit imposed by Code Section
162(m). The Personnel and Compensation Committee may designate any other award
granted under the plan as a qualified performance-based award in order to make
the award fully deductible without regard to the $1,000,000 deduction limit
imposed by Code Section 162(m). If an award is so designated, the Personnel and
Compensation Committee must establish objectively determinable performance goals
for the award based on one or more of the following business criteria, which may
be expressed in terms of company-wide objectives or in terms of objectives that
relate to the performance of a division, business unit, affiliate, department or
function within the company or an affiliate:
o Revenue
o Sales
o Profit (net profit, gross profit, operating profit, economic profit, profit
margins or other corporate profit measures)
o Earnings (EBIT, EBITDA, earnings per share, or other corporate earnings
measures)
o Earnings per share growth
o Net income (before or after taxes, operating income or other income
measures)
o Cash (cash flow, cash generation or other cash measures)
o Stock price or performance
o Total stockholder return (stock price appreciation plus reinvested
dividends divided by beginning share price)
o Return measures (including, but not limited to, return on assets, capital,
equity, or sales, and cash flow return on assets, capital, equity, or
sales);
o Market share
o Improvements in capital structure
o Expenses (expense management, expense ratio, expense efficiency ratios or
other expense measures)
22
o Business expansion or consolidation (acquisitions and divestitures)
o Internal rate of return or increase in net present value
o Working capital targets relating to inventory and/or accounts receivable
o Planning accuracy (as measured by comparing planned results to actual
results)
The Personnel and Compensation Committee must establish such goals prior to the
beginning of the period for which such performance goal relates (or such later
date as may be permitted under applicable tax regulations) and the Personnel and
Compensation Committee may for any reason reduce (but not increase) any award,
notwithstanding the achievement of a specified goal.
Limitations on Transfer; Beneficiaries. No award will be assignable or
transferable by a participant other than by will or the laws of descent and
distribution or (except in the case of an incentive stock option) pursuant to a
qualified domestic relations order; provided, however, that the Personnel and
Compensation Committee may permit other transfers where it concludes that such
transferability does not result in accelerated taxation, does not cause any
option intended to be an incentive stock option to fail to qualify as such, and
is otherwise appropriate and desirable, taking into account any factors deemed
relevant, including without limitation, any state or federal tax or securities
laws or regulations applicable to transferable awards. A participant may, in the
manner determined by the Personnel and Compensation Committee, designate a
beneficiary to exercise the rights of the participant and to receive any
distribution with respect to any award upon the participant's death.
Acceleration Upon Certain Events. Unless otherwise provided in an award
certificate, if a participant's service terminates by reason of death,
disability or retirement, all of such participant's outstanding options, stock
appreciation rights and other awards in the nature of rights that may be
exercised will become fully vested and exercisable, all time-based vesting
restrictions on his or her outstanding awards will lapse, and the target payout
opportunities attainable under all outstanding performance-based awards will be
deemed to have been fully earned as of the date of termination based upon an
assumed achievement of all relevant performance goals at the "target" level and
there will be a pro rata payout to the participant or his or her estate within
30 days after date of termination based upon the length of time within the
performance period that has elapsed prior to the date of termination. If a
participant is terminated without cause or resigns for good reason (as such
terms are defined in the plan) within two years after a change in control of the
Company, all of such participant's outstanding options, stock appreciation
rights and other awards in the nature of rights that may be exercised will
become fully vested and exercisable and all time-based vesting restrictions on
his or her outstanding awards will lapse. Except as otherwise provided in an
award certificate, upon the occurrence of a change in control, the target payout
opportunities attainable under all outstanding performance-based awards will be
deemed to have been fully earned as of the effective date of the change in
control and there shall be pro rata payout to participants within 30 days after
the effective date of the change in control based upon an assumed achievement of
all relevant targeted performance goals and upon the length of time within the
performance period that has elapsed prior to the change in control. In addition,
subject to limitations applicable to certain qualified performance-based awards,
the Personnel and Compensation Committee may accelerate awards for any other
reason in its discretion. The Personnel and Compensation Committee may
discriminate among participants or among awards in exercising such discretion.
Adjustments. In the event of a stock split, a dividend payable in shares of
common stock, or a combination or consolidation of the common stock into a
lesser number of shares, the share authorization limits under the plan will
automatically be adjusted proportionately, and the shares then subject to each
award will automatically be adjusted proportionately without any change in the
aggregate purchase price for such award. If the Company is involved in another
corporate transaction or event that affects the common stock, such as an
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares, the share
authorization limits under the plan will be adjusted proportionately, and the
Personnel and Compensation Committee may adjust outstanding awards to preserve
the benefits or potential benefits of the awards.
23
Termination and Amendment
The Board of Directors or the Personnel and Compensation Committee may, at any
time and from time to time, terminate or amend the plan, but if an amendment to
the plan would materially increase the benefits accruing to participants,
materially increase the number of shares of stock issuable under the plan,
expand the types of awards provided under the plan, materially expand the class
of participants eligible to participate in the plan, materially extend the term
of the plan or otherwise constitute a material amendment requiring stockholder
approval under applicable listing requirements, laws, policies or regulations,
then such amendment will be subject to stockholder approval. In addition, the
Board of Directors or the Personnel and Compensation Committee may condition any
amendment on the approval the stockholders for any other reason. No termination
or amendment of the plan may adversely affect any award previously granted under
the plan without the written consent of the participant.
The Personnel and Compensation Committee may amend or terminate outstanding
awards. However, such amendments may require the consent of the participant and,
unless approved by the stockholders, the exercise price of an outstanding option
may not be reduced, directly or indirectly, and the original term of an option
may not be extended.
Prohibition on Repricing
As indicated above under "Termination and Amendment," outstanding stock options
cannot be repriced, directly or indirectly, without the prior consent of the
Company's stockholders. The exchange of an "underwater" option (i.e., an option
having an exercise price in excess of the current market value of the underling
stock) for another award would be considered an indirect repricing and would,
therefore, require the prior consent of the Company's stockholders.
Certain Federal Tax Effects
Nonstatutory Stock Options. There will be no federal income tax consequences to
the optionee or to the Company upon the grant of a nonstatutory stock option
under the plan. When the optionee exercises a nonstatutory option, however, he
or she will recognize ordinary income in an amount equal to the excess of the
fair market value of the common stock received upon exercise of the option at
the time of exercise over the exercise price, and the Company will be allowed a
corresponding deduction. Any gain that the optionee realizes when he or she
later sells or disposes of the option shares will be short-term or long-term
capital gain, depending on how long the shares were held.
Incentive Stock Options. There typically will be no federal income tax
consequences to the optionee or to the Company upon the grant or exercise of an
incentive stock option. If the optionee holds the option shares for the required
holding period of at least two years after the date the option was granted or
one year after exercise, the difference between the exercise price and the
amount realized upon sale or disposition of the option shares will be long-term
capital gain or loss, and the Company will not be entitled to a federal income
tax deduction. If the optionee disposes of the option shares in a sale,
exchange, or other disqualifying disposition before the required holding period
ends, he or she will recognize taxable ordinary income in an amount equal to the
excess of the fair market value of the option shares at the time of exercise
over the exercise price, and the Company will be allowed a federal income tax
deduction equal to such amount. While the exercise of an incentive stock option
does not result in current taxable income, the excess of the fair market value
of the option shares at the time of exercise over the exercise price will be an
item of adjustment for purposes of determining the optionee's alternative
minimum taxable income.
Stock Appreciation Rights. A participant receiving a stock appreciation right
under the plan will not recognize income, and the Company will not be allowed a
tax deduction, at the time the award is granted. When the participant exercises
the stock appreciation right, the amount of cash and the fair market value of
any shares of
24
common stock received will be ordinary income to the participant and the Company
will be allowed as a corresponding federal income tax deduction at that time.
Restricted Stock. Unless a participant makes an election to accelerate
recognition of the income to the date of grant as described below, a participant
will not recognize income, and the Company will not be allowed a tax deduction,
at the time a restricted stock award is granted, provided that the award is
nontransferable and is subject to a substantial risk of forfeiture. When the
restrictions lapse, the participant will recognize ordinary income equal to the
fair market value of the common stock as of that date (less any amount he or she
paid for the stock), and the Company will be allowed a corresponding federal
income tax deduction at that time, subject to any applicable limitations under
Code Section 162(m). If the participant files an election under Code Section
83(b) within 30 days after the date of grant of the restricted stock, he or she
will recognize ordinary income as of the date of grant equal to the fair market
value of the stock as of that date (less any amount paid for the stock), and the
Company will be allowed a corresponding federal income tax deduction at that
time, subject to any applicable limitations under Code Section 162(m). Any
future appreciation in the stock will be taxable to the participant at capital
gains rates. However, if the stock is later forfeited, the participant will not
be able to recover the tax previously paid pursuant to the Code Section 83(b)
election.
Restricted or Deferred Stock Units. A participant will not recognize income, and
the Company will not be allowed a tax deduction, at the time a stock unit award
is granted. Upon receipt of shares of common stock (or the equivalent value in
cash or other property) in settlement of a stock unit award, a participant will
recognize ordinary income equal to the fair market value of the common stock or
other property as of that date (less any amount he or she paid for the stock or
property), and the Company will be allowed a corresponding federal income tax
deduction at that time, subject to any applicable limitations under Code Section
162(m).
Performance Awards. A participant generally will not recognize income, and the
Company will not be allowed a tax deduction, at the time performance awards are
granted. Upon receipt of shares of cash, stock or other property in settlement
of a performance award, the cash amount or the fair market value of the stock or
other property will be ordinary income to the participant, and the Company will
be allowed a corresponding federal income tax deduction at that time, subject to
any applicable limitations under Code Section 162(m).
Dividend Equivalent Rights. To the extent that a participant shall be granted
dividend equivalent rights with respect to an award, upon receipt of taxable
compensation attributable to dividends paid on the common stock represented by
such award, the participant shall recognize taxable compensation equal to the
compensation received. The Company shall recognize a corresponding tax deduction
attributable to such taxable compensation.
Code Section 409A. It is intended that options, stock appreciation rights,
restricted stock awards and stock unit awards granted under the plan will be
exempt from the application of Code Section 409A. If any award is structured in
a way that would cause Code Section 409A to apply and if the requirements of
409A are not met, the taxable events as described above could apply earlier than
described above and could result in the imposition of additional taxes and
penalties.
Benefits to Named Executive Officers and Others
The Personnel and Compensation Committee has approved the grant under the plan
of 6,500 restricted stock units to three non-officer Associates of the Company.
If the stockholders approve the plan at the Annual Meeting, these awards will be
settled in stock. If the stockholders do not approve the plan at the Annual
Meeting, these awards will be settled in cash and no further awards will be
granted under the plan. Any future awards will be made at the discretion of the
Personnel and Compensation Committee. Therefore, it is not presently possible to
determine the benefits or amounts that will be received by such persons or
groups pursuant to the plan in the future.
25
2005 Incentive Plan
Restricted Stock Unit Awards(1)
-------------------------------
Dollar Value Target Award (#
Name and Position of Awards Units)
----------------- --------- ------
Marvin N. Schoenhals - -
President and
Chief Executive Officer
Karl L. Johnston - -
Chief Operating Officer and
Chief Lending Officer
Mark A. Turner - -
Chief Operating Officer and
Secretary
Stephen A. Fowle - -
Executive Vice President and
Chief Financial Officer
Deborah A. Powell - -
Executive Vice President and
Director, Human Resources
All Executive Officers as a Group - -
All Non-Executive Directors as a Group - -
All Non-Executive Officer Associates as $382,200 (2) 6,500
a Group
(1) The restricted stock units will vest and convert to shares of common stock
as to 25% of the units on July 1, 2007 and July 1, 2008 and the remaining
50% on July 1, 2009, provided that the holder is then still employed with
the Company or an affiliate. If and when dividends or distributions are
paid with respect to the Company's common stock while the units are
outstanding, the dollar amount or fair market value of such dividends or
distributions will be converted into additional units in the grantee's
name, which will be subject to the same transfer restrictions and
conversion provisions as apply to the original stock units.
(2) The dollar value of the restricted stock units is dependent on the fair
market value of the underlying shares. As of March 8, 2005, the fair market
value of the shares was $370,825, based on the closing price of the
Company's common stock on that day.
26
Set forth below is information as of December 31, 2004 with respect to
compensation plans under which equity securities of the Company are authorized
for issuance.
Equity Compensation Plan Information
(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 and Options and (excluding securities
Phantom Stock Awards Phantom Stock Awards reflected in column (a)
-------------------- -------------------- -----------------------
Equity compensation plans
approved by stockholders (1) 873,360 $ 23.48 373,860
Equity compensation plans
not approved by stockholders n/a n/a n/a
------- ------- -------
TOTAL 873,360 $ 23.48 373,860
======= ======= =======
(1) Plans approved by stockholders include the 1986 Stock Option Plan and the
1997 Stock Option Plan, as amended.
The Board has approved and declared the advisability of the 2005 Incentive Plan
and believes that it is fair to, and in the best interest of the Company and
its stockholders. The Board recommends that stockholders vote "FOR" Proposal 3.
27
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 2004 the Reporting Persons, with the exception
of one untimely filing, each, on Form 4 by Mr. Johnston, Mr. Klima and Dr.
Smith, have complied with such reporting requirements.
ADVANCE NOTICE OF CERTAIN MATTERS
TO BE CONSIDERED 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 sixty nor more than ninety days prior to the anniversary date of the
mailing date of the Company's proxy statement for the immediately preceding
Annual Meeting. 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 2006 ANNUAL MEETING
It is anticipated that the proxy statement and form of proxy for the 2006 Annual
Meeting of Stockholders will be mailed during March of 2006. Stockholder
proposals intended to be presented at the 2006 annual meeting of stockholders of
WSFS Financial Corporation must be received by November 28, 2005, 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.
28
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. The Company's directors and management
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, FINANCIAL STATEMENTS AND CODE OF ETHICS
The Company's Annual Report to Stockholders for the fiscal year ended December
31, 2004, 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 materials. A copy of the Company's
Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2004 (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.
The Company has adopted a Code of Ethics that applies to its principal executive
officer, principal financial officer, principal accounting officer or controller
or persons performing similar functions. A free copy of the Code of Ethics may
be obtained upon request by writing to: Investor Relations Department, WSFS
Financial Corporation, 838 Market Street, Wilmington, Delaware 19801.
29
APPENDIX A
-------------------------------------------------
WSFS FINANCIAL CORPORATION
2005 INCENTIVE PLAN
-------------------------------------------------
WSFS FINANCIAL CORPORATION
2005 Incentive PLAN
Table of Contents
ARTICLE 1 PURPOSE...........................................................A1
1.1 General....................................................A1
ARTICLE 2 DEFINITIONS.......................................................A1
2.1 Definitions................................................A1
ARTICLE 3 EFFECTIVE TERM OF PLAN............................................A6
3.1 Effective Date.............................................A6
3.2 Termination of Plan........................................A6
ARTICLE 4 ADMINISTRATION....................................................A6
4.1 Committee..................................................A6
4.2 Actions and Interpretations by the Committee...............A6
4.3 Authority of Committee.....................................A6
4.4 Award Certificates.........................................A7
ARTICLE 5 SHARES SUBJECT TO THE PLAN........................................A7
5.1 Number of Shares...........................................A7
5.2 Share Counting.............................................A7
5.3 Stock Distributed..........................................A7
5.4 Limitation on Awards.......................................A8
ARTICLE 6 ELIGIBILITY.......................................................A8
6.1 General....................................................A8
ARTICLE 7 STOCK OPTIONS.....................................................A8
7.1 General....................................................A8
7.2 Incentive Stock Options....................................A8
ARTICLE 8 STOCK APPRECIATION RIGHTS.........................................A9
8.1 Grant of Stock Appreciation Rights.........................A9
ARTICLE 9 PERFORMANCE AWARDS................................................A10
9.1 Grant of Performance Awards................................A10
9.2 Performance Goals..........................................A10
9.3 Right to Payment...........................................A10
9.4 Other Terms................................................A10
-i-
ARTICLE 10 RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS................A10
10.1 Grant of Restricted Stock and Restricted Stock Units.......A10
10.2 Issuance and Restrictions..................................A10
10.3 Forfeiture.................................................A11
10.4 Delivery of Restricted Stock...............................A11
ARTICLE 11 DEFERRED STOCK UNITS.............................................A11
11.1 Grant of Deferred Stock Units..............................A11
ARTICLE 12 DIVIDEND EQUIVALENTS.............................................A11
12.1 Grant of Dividend Equivalents..............................A11
ARTICLE 13 STOCK OR OTHER STOCK-BASED AWARDS................................A11
13.1 Grant of Stock or Other Stock-Based Awards.................A11
ARTICLE 14 PROVISIONS APPLICABLE TO AWARDS..................................A12
14.1 Stand-Alone and Tandem Awards..............................A12
14.2 Term of Awards.............................................A12
14.3 Form of Payment of Awards..................................A12
14.4 Limits on Transfer.........................................A12
14.5 Beneficiaries..............................................A12
14.6 Stock Certificates.........................................A12
14.7 Acceleration upon Death or Disability......................A12
14.8 Acceleration upon Retirement...............................A13
14.9 Acceleration upon a Change in Control......................A13
14.10 Acceleration for Any Other Reason..........................A13
14.11 Effect of Acceleration.....................................A13
14.12 Qualified Performance-Based Awards.........................A14
14.13 Termination of Employment..................................A15
14.14 Deferral...................................................A15
14.15 Forfeiture Events..........................................A15
ARTICLE 15 CHANGES IN CAPITAL STRUCTURE.....................................A15
15.1 General....................................................A15
-ii-
ARTICLE 16 AMENDMENT, MODIFICATION AND TERMINATION..........................A16
16.1 Amendment, Modification and Termination....................A16
16.2 Awards Previously Granted..................................A16
ARTICLE 17 GENERAL PROVISIONS...............................................A17
17.1 No Rights to Awards; Non-Uniform Determinations............A17
17.2 No Stockholder Rights......................................A17
17.3 Withholding................................................A17
17.4 No Right to Continued Service..............................A17
17.5 Unfunded Status of Awards..................................A17
17.6 Relationship to Other Benefits.............................A17
17.7 Expenses...................................................A17
17.8 Titles and Headings........................................A17
17.9 Gender and Number..........................................A17
17.10 Fractional Shares..........................................A17
17.11 Government and Other Regulations...........................A17
17.12 Governing Law..............................................A18
17.13 Additional Provisions......................................A18
17.14 No Limitations on Rights of Company........................A18
17.15 Indemnification............................................A18
-iii-
WSFS FINANCIAL CORPORATION
2005 INCENTIVE PLAN
ARTICLE 1
PURPOSE
1.1 GENERAL. The purpose of the WSFS Financial Corporation 2005
Incentive Plan (the "Plan") is to promote the success, and enhance the value, of
WSFS Financial Corporation (the "Company"), by linking the personal interests of
Associates, officers and directors of the Company or any Affiliate (as defined
below) to those of Company stockholders and by providing such persons with an
incentive for outstanding performance. The Plan is further intended to provide
flexibility to the Company in its ability to motivate, attract, and retain the
services of Associates, officers and directors upon whose judgment, interest,
and special effort the successful conduct of the Company's operation is largely
dependent. Accordingly, the Plan permits the grant of incentive awards from time
to time to selected Associates, officers and directors of the Company and its
Affiliates.
ARTICLE 2
DEFINITIONS
2.1 DEFINITIONS. When a word or phrase appears in this Plan with
the initial letter capitalized, and the word or phrase does not commence a
sentence, the word or phrase shall generally be given the meaning ascribed to it
in this Section or in Section 1.1 unless a clearly different meaning is required
by the context. The following words and phrases shall have the following
meanings:
(a) "Affiliate" means (i) any Subsidiary or Parent, or (ii) an
entity that directly or through one or more intermediaries controls, is
controlled by or is under common control with, the Company, as
determined by the Committee. The term Affiliate shall include the Bank.
(b) "Associate" means any person employed by the Company, the
Bank or an Affiliate.
(c) "Award" means any Option, Stock Appreciation Right,
Restricted Stock Award, Restricted Stock Unit Award, Deferred Stock
Unit Award, Performance Award, Dividend Equivalent Award, or Other
Stock-Based Award, Performance-Based Cash Awards, or any other right or
interest relating to Stock or cash, granted to a Participant under the
Plan.
(d) "Award Certificate" means a written document, in such form
as the Committee prescribes from time to time, setting forth the terms
and conditions of an Award. Award Certificates may be in the form of
individual award agreements or certificates or a program document
describing the terms and provisions of an Awards or series of Awards
under the Plan.
(e) "Bank" means Wilmington Savings Fund Society, Federal
Savings Bank.
(f) "Board" means the Board of Directors of the Company.
(g) "Cause" as a reason for a Participant's termination of
employment shall have the meaning assigned such term in the employment,
severance or similar agreement, if any, between such Participant and
the Company or an Affiliate, provided, however that if there is no such
employment, severance or similar agreement in which such term is
defined, and unless otherwise defined in the applicable Award
Certificate, "Cause" shall mean any of the following acts by the
Participant, as determined by the Board: personal dishonesty, breach of
fiduciary duty involving personal profit, intentional failure to
perform stated duties, prolonged absence from duty without the consent
of the Company, intentionally engaging in any activity that is in
conflict with or adverse to the business or other interests of the
Company, or willful misconduct, misfeasance or malfeasance of duty
which is reasonably determined by the Board to be detrimental to the
Company.
-A1-
(h) "Change in Control" means and includes the occurrence of
any one of the following events:
(i) individuals who, on the Effective Date,
constitute the Board of Directors of the Company (the
"Incumbent Directors") cease for any reason to constitute at
least a majority of such Board, provided that any person
becoming a director after the Effective Date and whose
election or nomination for election was approved by a vote of
at least a majority of the Incumbent Directors then on the
Board shall be an Incumbent Director; provided, however, that
no individual initially elected or nominated as a director of
the Company as a result of an actual or threatened election
contest with respect to the election or removal of directors
("Election Contest") or other actual or threatened
solicitation of proxies or consents by or on behalf of any
Person other than the Board ("Proxy Contest"), including by
reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest, shall be deemed an
Incumbent Director; or
(ii) any person becomes a "beneficial owner" (as
defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, of either (A) 25% or more of the then-outstanding
shares of common stock of the Company ("Company Common Stock")
or (B) securities of the Company representing 25% or more of
the combined voting power of the Company's then outstanding
securities eligible to vote for the election of directors (the
"Company Voting Securities"); provided, however, that for
purposes of this subsection (ii), the following acquisitions
of Company Common Stock or Company Voting Securities shall not
constitute a Change in Control: (w) an acquisition directly
from the Company, (x) an acquisition by the Company or a
Subsidiary of the Company, (y) an acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any Subsidiary of the Company, or (z) an
acquisition pursuant to a Non-Qualifying Transaction (as
defined in subsection (iii) below); or
(iii) the consummation of a reorganization, merger,
consolidation, statutory share exchange or similar form of
corporate transaction involving the Company or a Subsidiary (a
"Reorganization"), or the sale or other disposition of all or
substantially all of the Company's assets (a "Sale") or the
acquisition of assets or stock of another corporation (an
"Acquisition"), unless immediately following such
Reorganization, Sale or Acquisition: (A) all or substantially
all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding Company Common Stock
and outstanding Company Voting Securities immediately prior to
such Reorganization, Sale or Acquisition beneficially own,
directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such
Reorganization, Sale or Acquisition (including, without
limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of
the Company's assets or stock either directly or through one
or more subsidiaries, the "Surviving Corporation") in
substantially the same proportions as their ownership,
immediately prior to such Reorganization, Sale or Acquisition,
of the outstanding Company Common Stock and the outstanding
Company Voting Securities, as the case may be, and (B) no
person (other than (x) the Company or any Subsidiary of the
Company, (y) the Surviving Corporation or its ultimate parent
corporation, or (z) any employee benefit plan (or related
trust) sponsored or maintained by any of the foregoing is the
beneficial owner, directly or indirectly, of 25% or more of
the total common stock or 25% or more of the total voting
power of the outstanding voting securities eligible to elect
directors of the Surviving Corporation, and (C) at least a
majority of the members of the board of directors of the
Surviving Corporation were Incumbent Directors at the time of
the Board's approval of the execution of the initial agreement
providing for such Reorganization, Sale or Acquisition (any
Reorganization, Sale or Acquisition which satisfies all of the
criteria specified in (A), (B) and (C) above shall be deemed
to be a "Non-Qualifying Transaction"); or
(iv) approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
Notwithstanding the foregoing, for any Awards that constitute
a nonqualified deferred compensation plan within the meaning
of Section 409A(d) of the Code, Change of Control shall have
the same meaning as set forth in any regulations, revenue
procedure or revenue rulings issued by the Secretary of the
United States Treasury applicable to such plans.
(i) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and includes a reference to the underlying final
regulations.
-A2-
(j) "Committee" means the committee of the Board described in
Article 4.
(k) "Company" means WSFS Financial Corporation, a Delaware
corporation or any successor corporation.
(l) "Continuous Status as a Participant" means the absence of
any interruption or termination of service as an Associate, officer or
director of the Company or any Affiliate, as applicable; provided,
however, that for purposes of an Incentive Stock Option, or a Stock
Appreciation Right issued in tandem with an Incentive Stock Option,
"Continuous Status as a Participant" means the absence of any
interruption or termination of service as a common law employee of the
Company or any Parent or Subsidiary, as applicable, pursuant to
applicable tax regulations. Continuous Status as a Participant 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 Outside
Director's performance of services in an emeritus or advisory capacity.
Notwithstanding the foregoing, for any Awards that constitute a
nonqualified deferred compensation plan within the meaning of Section
409A(d) of the Code, Continuous Status as a Participant shall mean the
absence of any "separation from service" or similar concept as set
forth in any regulations, revenue procedure or revenue rulings issued
by the Secretary of the United States Treasury applicable to such
plans.
(m) "Covered Employee" means a covered employee as defined in
Code Section 162(m)(3).
(n) "Disability" or "Disabled" has the same meaning as
provided in the long-term disability plan or policy maintained by the
Company or if applicable, most recently maintained, by the Company or
if applicable, an Affiliate, for the Participant, whether or not such
Participant actually receives disability benefits under such plan or
policy. If no long-term disability plan or policy was ever maintained
on behalf of the Participant or if the determination of Disability
relates to an Incentive Stock Option, or a Stock Appreciation Right
issued in tandem with an Incentive Stock Option, Disability means
Permanent and Total Disability as defined in Section 22(e)(3) of the
Code. In the event of a dispute, the determination whether a
Participant is Disabled will be made by the Committee and may be
supported by the advice of a physician competent in the area to which
such Disability relates. Notwithstanding the foregoing, for any Awards
that constitute a nonqualified deferred compensation plan within the
meaning of Section 409A(d) of the Code, Disability shall have the same
meaning as set forth in any regulations, revenue procedure or revenue
rulings issued by the Secretary of the United States Treasury
applicable to such plans.
(o) "Deferred Stock Unit" means a right granted to a
Participant under Article 11.
(p) "Dividend Equivalent" means a right granted to a
Participant under Article 12.
(q) "Effective Date" has the meaning assigned such term in
Section 3.1.
(r) "Eligible Participant" means an Associate, officer or
director of the Company or any Affiliate.
(s) "Exchange" means the Nasdaq National Market or any
national securities exchange on which the Stock may from time to time
be listed or traded.
(t) "Fair Market Value", on any date, means (i) if the Stock
is listed on a securities exchange or is traded over the Nasdaq
National Market, the average of the high and low sales prices on such
exchange or over such system on such date or, in the absence of
reported sales on such date, the average of the high and low sales
prices on the immediately preceding date on which sales were reported,
or (ii) if the Stock is not listed on a securities exchange or traded
over the Nasdaq National Market, the mean between the bid and asked
prices as quoted by Nasdaq for such trading date, or, in the absence of
bid and asked prices on such date, then on the next prior business day
on which there was a bid and asked price; provided that if it is
determined that the fair market value is not properly reflected by such
Nasdaq quotations, Fair Market Value will be determined by such other
method as the Committee determines in good faith to be reasonable.
(u) "Full Value Award" means an Award other than in the form
of an Option or SAR, and which is settled by the issuance of Stock.
-A3-
(v) "Good Reason" has the meaning assigned such term in the
employment, severance or similar agreement, if any, between a
Participant and the Company or an Affiliate, provided, however that if
there is no such employment, severance or similar agreement in which
such term is defined, and unless otherwise defined in the applicable
Award Certificate, "Good Reason" shall mean any of the following acts
by the Company or an Affiliate, without the consent of the Participant
(in each case, other than an isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied by the Company or
the Affiliate promptly after receipt of notice thereof given by the
Participant): (i) the assignment to the Participant of duties
materially inconsistent with, or a material diminution in, the
Participant's position, authority, duties or responsibilities as in
effect immediately prior to a Change in Control, (ii) a reduction by
the Company or an Affiliate in the Participant's base salary, (iii) the
Company or an Affiliate requiring the Participant, without his or her
consent, to be based at any office or location more than 35 miles from
the location at which the Participant was stationed immediately prior
to a Change in Control, or (iv) the continuing material breach by the
Company or an Affiliate of any employment agreement between the
Participant and the Company or an Affiliate after the expiration of any
applicable period for cure.
(w) "Grant Date" of an Award means the first date on which all
necessary corporate action has been taken to approve the grant of the
Award as provided in the Plan, or such later date as is determined and
specified as part of that authorization process. Notice of the grant
shall be provided to the grantee within a reasonable time after the
Grant Date.
(x) "Incentive Stock Option" means an Option that is intended
to be an incentive stock option and meets the requirements of Section
422 of the Code or any successor provision thereto.
(y) "Nonstatutory Stock Option" means an Option that is not an
Incentive Stock Option.
(z) "Option" means a right granted to a Participant under
Article 7 of the Plan to purchase Stock at a specified price during
specified time periods. An Option may be either an Incentive Stock
Option or a Nonstatutory Stock Option.
(aa) "Other Stock-Based Award" means a right, granted to a
Participant under Article 13, that relates to or is valued by reference
to Stock or other Awards relating to Stock.
(bb) "Outside Director" means a director of the Company who is
not an Associate of the Company or an Affiliate.
(cc) "Parent" means a corporation, limited liability company,
partnership or other entity which owns or beneficially owns a majority
of the outstanding voting stock or voting power of the Company.
Notwithstanding the above, with respect to an Incentive Stock Option,
Parent shall have the meaning set forth in Section 424(e) of the Code.
(dd) "Participant" means a person who, as an Associate,
officer or director of the Company or any Affiliate, has been granted
an Award under the Plan; provided that in the case of the death of a
Participant, the term "Participant" refers to a beneficiary designated
pursuant to Section 14.5 or the legal guardian or other legal
representative acting in a fiduciary capacity on behalf of the
Participant under applicable state law and court supervision.
(ee) "Performance Award" means Performance Shares, Performance
Units or Performance-Based Cash Awards granted pursuant to Article 9.
(ff) "Performance-Based Cash Award" means a right granted to a
Participant under Article 9 to a cash award to be paid upon achievement
of such performance goals as the Committee establishes with regard to
such Award.
(gg) "Performance Share" means any right granted to a
Participant under Article 9 to a unit to be valued by reference to a
designated number of Shares to be paid upon achievement of such
performance goals as the Committee establishes with regard to such
Performance Share.
-A4-
(hh) "Performance Unit" means a right granted to a Participant
under Article 9 to a unit valued by reference to a designated amount of
cash or property other than Shares, to be paid to the Participant upon
achievement of such performance goals as the Committee establishes with
regard to such Performance Unit.
(ii) "Person" means any individual, entity or group, within
the meaning of Section 3(a)(9) of the 1934 Act and as used in Section
13(d)(3) or 14(d)(2) of the 1934 Act.
(jj) "Plan" means the WSFS Financial Corporation 2005
Incentive Plan, as amended from time to time.
(kk) "Qualified Performance-Based Award" means an Award that
is either (i) intended to qualify for the Section 162(m) Exemption and
is made subject to performance goals based on Qualified Business
Criteria as set forth in Section 14.12, or (ii) an Option or SAR having
an exercise price equal to or greater than the Fair Market Value of the
underlying Stock as of the Grant Date.
(ll) "Qualified Business Criteria" means one or more of the
Business Criteria listed in Section 14.12(b) upon which performance
goals for certain Qualified Performance-Based Awards may be established
by the Committee.
(mm) "Restricted Stock Award" means Stock granted to a
Participant under Article 10 that is subject to certain restrictions
and to risk of forfeiture.
(nn) "Restricted Stock Unit Award" means the right granted to
a Participant under Article 10 to receive shares of Stock (or the
equivalent value in cash or other property if the Committee so
provides) in the future, which right is subject to certain restrictions
and to risk of forfeiture.
(oo) "Retirement" in the case of an Associate Participant,
means the Participant's termination of employment with the Company or
an Affiliate with the Committee's approval after attaining any normal
or early retirement age specified in any pension, profit sharing or
other retirement program sponsored by the Company, or, in the event of
the inapplicability thereof with respect to the Participant in
question, as determined by the Committee in its reasonable judgment.
"Retirement" in the case of an Outside Director means retirement of the
director in accordance with the provisions of the Company's bylaws as
in effect from time to time or the failure to be re-elected or
re-nominated as a director.
(pp) "Section 162(m) Exemption" means the exemption from the
limitation on deductibility imposed by Section 162(m) of the Code that
is set forth in Section 162(m)(4)(C) of the Code or any successor
provision thereto.
(qq) "Shares" means shares of the Company's Stock. If there
has been an adjustment or substitution pursuant to Section 15.1, the
term "Shares" shall also include any shares of stock or other
securities that are substituted for Shares or into which Shares are
adjusted pursuant to Section 15.1.
(rr) "Stock" means the $0.01 par value common stock of the
Company and such other securities of the Company as may be substituted
for Stock pursuant to Article 15.
(ss) "Stock Appreciation Right" or "SAR" means a right granted
to a Participant under Article 8 to receive a payment equal to the
difference between the Fair Market Value of a Share as of the date of
exercise of the SAR over the grant price of the SAR, all as determined
pursuant to Article 8.
(tt) "Subsidiary" means any corporation, limited liability
company, partnership or other entity of which a majority of the
outstanding voting stock or voting power is beneficially owned directly
or indirectly by the Company. Notwithstanding the above, with respect
to an Incentive Stock Option, Subsidiary shall have the meaning set
forth in Section 424(f) of the Code.
(uu) "1933 Act" means the Securities Act of 1933, as amended
from time to time.
(vv) "1934 Act" means the Securities Exchange Act of 1934, as
amended from time to time.
-A5-
ARTICLE 3
EFFECTIVE TERM OF PLAN
3.1. EFFECTIVE DATE. The Plan shall be effective as of the date it is
approved by both the Board and the stockholders of the Company (the "Effective
Date").
3.2. TERMINATION OF PLAN. The Plan shall terminate on the tenth
anniversary of the Effective Date unless earlier terminated as provided herein.
The termination of the Plan on such date shall not affect the validity of any
Award outstanding on the date of termination.
ARTICLE 4
ADMINISTRATION
4.1. COMMITTEE. The Plan shall be administered by a Committee appointed
by the Board (which Committee shall consist of at least two directors) or, at
the discretion of the Board from time to time, the Plan may be administered by
the Board. It is intended that at least two of the directors appointed to serve
on the Committee shall be "non-employee directors" (within the meaning of Rule
16b-3 promulgated under the 1934 Act) and "outside directors" (within the
meaning of Code Section 162(m)) and that any such members of the Committee who
do not so qualify shall abstain from participating in any decision to make or
administer Awards that are made to Eligible Participants who at the time of
consideration for such Award (i) are persons subject to the short-swing profit
rules of Section 16 of the 1934 Act, or (ii) are reasonably anticipated to
become Covered Employees during the term of the Award. However, the mere fact
that a Committee member shall fail to qualify under either of the foregoing
requirements or shall fail to abstain from such action shall not invalidate any
Award made by the Committee which Award is otherwise validly made under the
Plan. The members of the Committee shall be appointed by, and may be changed at
any time and from time to time in the discretion of, the Board. The Board may
reserve to itself any or all of the authority and responsibility of the
Committee under the Plan or may act as administrator of the Plan for any and all
purposes. To the extent the Board has reserved any authority and responsibility
or during any time that the Board is acting as administrator of the Plan, it
shall have all the powers of the Committee hereunder, and any reference herein
to the Committee (other than in this Section 4.1) shall include the Board. To
the extent any action of the Board under the Plan conflicts with actions taken
by the Committee, the actions of the Board shall control.
4.2. ACTION AND INTERPRETATIONS BY THE COMMITTEE. For purposes of
administering the Plan, the Committee may from time to time adopt rules,
regulations, guidelines and procedures for carrying out the provisions and
purposes of the Plan and make such other determinations, not inconsistent with
the Plan, as the Committee may deem appropriate. The Committee's interpretation
of the Plan, any Awards granted under the Plan, any Award Certificate and all
decisions and determinations by the Committee with respect to the Plan are
final, binding, and conclusive on all parties. Each member of the Committee is
entitled to, in good faith, rely or act upon any report or other information
furnished to that member by any officer or other Associate of the Company or any
Affiliate, the Company's or an Affiliate's independent certified public
accountants, Company counsel or any executive compensation consultant or other
professional retained by the Company to assist in the administration of the
Plan.
4.3. AUTHORITY OF COMMITTEE. Except as provided below, the Committee
has the exclusive power, authority and discretion to:
(a) Grant Awards;
(b) Designate Participants;
(c) Determine the type or types of Awards to be granted to
each Participant;
(d) Determine the number of Awards to be granted and the
number of Shares or dollar amount to which an Award will relate;
(e) Determine the terms and conditions of any Award granted
under the Plan, including but not limited to, the exercise price, grant
price, or purchase price, any restrictions or limitations on the Award,
any schedule for lapse of forfeiture restrictions or restrictions on
the exercisability of an Award, and accelerations or waivers thereof,
based in each case on such considerations as the Committee in its sole
discretion determines;
(f) Determine whether, to what extent, and under what
circumstances an Award may be settled in, or
-A6-
the exercise price of an Award may be paid in, cash, Stock, other
Awards, or other property, or an Award may be canceled, forfeited, or
surrendered;
(g) Prescribe the form of each Award Certificate, which need
not be identical for each Participant;
(h) Decide all other matters that must be determined in
connection with an Award;
(i) Establish, adopt or revise any rules, regulations,
guidelines or procedures, as it may deem necessary or advisable to
administer the Plan;
(j) Make all other decisions and determinations that may be
required under the Plan or as the Committee deems necessary or
advisable to administer the Plan;
(k) Amend the Plan or any Award Certificate as provided
herein; and
(l) Adopt such modifications, procedures, and subplans as may
be necessary or desirable to comply with provisions of the laws of
non-U.S. jurisdictions in which the Company or any Affiliate may
operate, in order to assure the viability of the benefits of Awards
granted to participants located in such other jurisdictions and to meet
the objectives of the Plan.
Notwithstanding the foregoing, grants of Awards to Outside Directors
hereunder shall be made only in accordance with the terms, conditions and
parameters of a plan, program or policy for the compensation of Outside
Directors as in effect from time to time, and the Committee may not make
discretionary grants hereunder to Outside Directors.
Notwithstanding the above, the Board may, by resolution, expressly
delegate to a special committee, consisting of one or more directors who are
also officers of the Company, the authority, within specified parameters, to (i)
designate Associates to be recipients of Awards under the Plan, and (ii) to
determine the number of such Awards to be received by any such Associates;
except that such delegation of duties and responsibilities to officers of the
Company may not be made with respect to grants of Awards to Eligible
Participants who as of the Grant Date are persons subject to the short-swing
profit rules of Section 16 of the 1934 Act, or who as of the Grant Date are
reasonably anticipated to be become Covered Employees during the term of the
Award. The acts of such delegates shall be treated hereunder as acts of the
Committee and such delegates shall report to the Committee regarding the
delegated duties and responsibilities and any Awards so granted.
4.4. AWARD CERTIFICATES. Each Award shall be evidenced by an Award
Certificate. Each Award Certificate shall include such provisions, not
inconsistent with the Plan, as may be specified by the Committee.
ARTICLE 5
SHARES SUBJECT TO THE PLAN
5.1. NUMBER OF SHARES. Subject to adjustment as provided in Section
15.1, the aggregate number of Shares reserved and available for issuance
pursuant to Awards granted under the Plan shall be 400,000; provided, however,
that each Share issued under the Plan pursuant to a Full Value Award shall
reduce the number of available Shares by four (4) shares.
5.2. SHARE COUNTING.
(a) To the extent that an Award is canceled, terminates,
expires, is forfeited or lapses for any reason, any unissued Shares
subject to the Award will again be available for issuance pursuant to
Awards granted under the Plan.
(b) Shares subject to Awards settled in cash will again be
available for issuance pursuant to Awards granted under the Plan.
5.3. STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.
-A7-
5.4. LIMITATION ON AWARDS. Notwithstanding any provision in the Plan to
the contrary (but subject to adjustment as provided in Section 15.1), the
maximum number of Shares with respect to one or more Options and/or SARs that
may be granted during any one calendar year under the Plan to any one
Participant shall be 50,000. The maximum aggregate grant with respect to Awards
of Restricted Stock, Restricted Stock Units, Deferred Stock Units, Performance
Shares or other Stock-Based Awards granted in any one calendar year to any one
Participant shall be 50,000 Shares. The aggregate dollar value of any
Performance-Based Cash Award that may be paid to any one Participant during any
one calendar year under the Plan shall be $2,000,000. The aggregate maximum fair
market value (measured as of the Grant Date) of any other Awards that may be
granted to any one Participant (less any consideration paid by the Participant
for such Award) during any one calendar year under the Plan shall be $2,000,000.
ARTICLE 6
ELIGIBILITY
6.1. GENERAL. Awards may be granted only to Eligible Participants;
except that Incentive Stock Options may be granted to only to Eligible
Participants who are common law employees of the Company or a Parent or
Subsidiary as defined in Section 424(e) and (f) of the Code.
ARTICLE 7
STOCK OPTIONS
7.1. GENERAL. The Committee is authorized to grant Options to
Participants on the following terms and conditions:
(a) EXERCISE PRICE. The exercise price per Share under an
Option shall be determined by the Committee, but shall not be less than
the Fair Market Value as of the Grant Date.
(b) TIME AND CONDITIONS OF EXERCISE. The Committee shall
determine the time or times at which an Option may be exercised in
whole or in part, subject to Section 7.1(d). The Committee shall also
determine the performance or other conditions, if any, that must be
satisfied before all or part of an Option may be exercised or vested.
The Committee may waive any exercise or vesting provisions at any time
in whole or in part based upon factors as the Committee may determine
in its sole discretion so that the Option becomes exercisable or vested
at an earlier date. The Committee may permit an arrangement whereby
receipt of Stock upon exercise of an Option is delayed until a
specified future date.
(c) PAYMENT. The Committee shall determine the methods by
which the exercise price of an Option may be paid, the form of payment,
including, without limitation, cash, Shares, or other property
(including "cashless exercise" arrangements), and the methods by which
Shares shall be delivered or deemed to be delivered to Participants;
provided, however, that if Shares are used to pay the exercise price of
an Option, such Shares must have been held by the Participant for at
least such period of time, if any, as necessary to avoid the
recognition of an expense under generally accepted accounting
principles as a result of the exercise of the Option.
(d) EXERCISE TERM. In no event may any Option be exercisable
for more than ten years from the Grant Date.
7.2. INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Options
granted under the Plan must comply with the following additional rules:
(a) LAPSE OF OPTION. Subject to any earlier termination
provision contained in the Award Certificate, an Incentive Stock Option
shall lapse upon the earliest of the following circumstances; provided,
however, that the Committee may, prior to the lapse of the Incentive
Stock Option under the circumstances described in subsections (3), (4)
or (5) below, provide in writing that the Option will extend until a
later date, but if an Option is so extended and is exercised after the
dates specified in subsections (3) and (4) below, it will automatically
become a Nonstatutory Stock Option:
(1) The expiration date set forth in the Award
Certificate.
-A8-
(2) The tenth anniversary of the Grant Date.
(3) Three months after termination of the
Participant's Continuous Status as a Participant for any
reason other than the Participant's Disability or death.
(4) One year after the Participant's Continuous
Status as a Participant by reason of the Participant's
Disability.
(5) One year after the termination of the
Participant's death if the Participant dies while employed, or
during the three-month period described in paragraph (3) or
during the one-year period described in paragraph (4) and
before the Option otherwise lapses.
Unless the exercisability of the Incentive Stock Option is
accelerated as provided in Article 14, if a Participant exercises an
Option after termination of employment, the Option may be exercised
only with respect to the Shares that were otherwise vested on the
Participant's termination of employment. Upon the Participant's death,
any exercisable Incentive Stock Options may be exercised by the
Participant's beneficiary, determined in accordance with Section 14.5.
(b) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market
Value (determined as of the Grant Date) of all Shares with respect to
which Incentive Stock Options are first exercisable by a Participant in
any calendar year may not exceed $100,000.00.
(c) TEN PERCENT OWNERS. No Incentive Stock Option shall be
granted to any individual who, at the Grant Date, owns stock possessing
more than ten percent of the total combined voting power of all classes
of stock of the Company or any Parent or Subsidiary unless the exercise
price per share of such Option is at least 110% of the Fair Market
Value per Share at the Grant Date and the Option expires no later than
five years after the Grant Date.
(d) EXPIRATION OF AUTHORITY TO GRANT INCENTIVE STOCK OPTIONS.
No Incentive Stock Option may be granted pursuant to the Plan after the
day immediately prior to the tenth anniversary of the date the Plan was
adopted by the Board, or the termination of the Plan, if earlier.
(e) RIGHT TO EXERCISE. During a Participant's lifetime, an
Incentive Stock Option may be exercised only by the Participant or, in
the case of the Participant's Disability, by the Participant's guardian
or legal representative.
(f) ELIGIBLE GRANTEES. The Committee may not grant an
Incentive Stock Option to a person who is not at the Grant Date a
common law employee of the Company or a Parent or Subsidiary.
ARTICLE 8
STOCK APPRECIATION RIGHTS
8.1. GRANT OF STOCK APPRECIATION RIGHTS. The Committee is authorized to
grant Stock Appreciation Rights to Participants on the following terms and
conditions:
(a) RIGHT TO PAYMENT. Upon the exercise of a Stock
Appreciation Right, the Participant to whom it is granted has the right
to receive the excess, if any, of:
(1) The Fair Market Value of one Share on the date of
exercise; over
(2) The grant price of the Stock Appreciation Right as
determined by the Committee, which shall not be less than the
Fair Market Value on the Grant Date.
(b) OTHER TERMS. All awards of Stock Appreciation Rights shall
be evidenced by an Award Certificate. The terms, methods of exercise,
methods of settlement, form of consideration payable in settlement, and
any other terms and conditions of any Stock Appreciation Right shall be
determined by the Committee at the time of the grant of the Award and
shall be reflected in the Award Certificate.
-A9-
ARTICLE 9
PERFORMANCE AWARDS
9.1. GRANT OF PERFORMANCE AWARDS. The Committee is authorized to grant
Performance Shares, Performance Units or Performance-Based Cash Awards to
Participants on such terms and conditions as may be selected by the Committee.
The Committee shall have the complete discretion to determine the number of
Performance Awards granted to each Participant, subject to Section 5.4, and to
designate the provisions of such Performance Awards as provided in Section 4.3.
All Performance Awards shall be evidenced by an Award Certificate or a written
program established by the Committee, pursuant to which Performance Awards are
awarded under the Plan under uniform terms, conditions and restrictions set
forth in such written program.
9.2. PERFORMANCE GOALS. The Committee may establish performance goals
for Performance Awards which may be based on any criteria selected by the
Committee. Such performance goals may be described in terms of Company-wide
objectives or in terms of objectives that relate to the performance of the
Participant, an Affiliate or a division, region, department or function within
the Company or an Affiliate. If the Committee determines that a change in the
business, operations, corporate structure or capital structure of the Company or
the manner in which the Company or an Affiliate conducts its business, or other
events or circumstances render performance goals to be unsuitable, the Committee
may modify such performance goals in whole or in part, as the Committee deems
appropriate. If a Participant is promoted, demoted or transferred to a different
business unit or function during a performance period, the Committee may
determine that the performance goals or performance period are no longer
appropriate and may (i) adjust, change or eliminate the performance goals or the
applicable performance period as it deems appropriate to make such goals and
period comparable to the initial goals and period, or (ii) make a cash payment
to the participant in amount determined by the Committee. The foregoing two
sentences shall not apply with respect to a Performance Award that is intended
to be a Qualified Performance-Based Award if the recipient of such award (a) was
a Covered Employee on the date of the modification, adjustment, change or
elimination of the performance goals or performance period, or (b) in the
reasonable judgment of the Committee, may be a Covered Employee on the date the
Performance Award is expected to be paid.
9.3. RIGHT TO PAYMENT. The grant of a Performance Share to a
Participant will entitle the Participant to receive at a specified later time a
specified number of Shares, or the equivalent cash value, if the performance
goals established by the Committee are achieved and the other terms and
conditions thereof are satisfied. The grant of a Performance Unit to a
Participant will entitle the Participant to receive at a specified later time a
specified dollar value in cash or other property, including Shares, variable
under conditions specified in the Award, if the performance goals in the Award
are achieved and the other terms and conditions thereof are satisfied. The grant
of a Performance-Based Cash Award to a Participant will entitle the Participant
to receive at a specified later time a specified dollar value in cash variable
under conditions specified in the Award, if the performance goals in the Award
are achieved and the other terms and conditions thereof are satisfied. The
Committee shall set performance goals and other terms or conditions to payment
of the Performance Awards in its discretion which, depending on the extent to
which they are met, will determine the value of the Performance Awards that will
be paid to the Participant.
9.4. OTHER TERMS. Performance Awards may be payable in cash, Stock, or
other property, and have such other terms and conditions as determined by the
Committee and reflected in the Award Certificate. For purposes of determining
the number of Shares to be used in payment of a Performance Award denominated in
cash but payable in whole or in part in Shares or Restricted Stock, the number
of Shares to be so paid will be determined by dividing the cash value of the
Award to be so paid by the Fair Market Value of a Share on the date of
determination by the Committee of the amount of the payment under the Award, or,
if the Committee so directs, the date immediately preceding the date the Award
is paid.
ARTICLE 10
RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS
10.1. GRANT OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS. The
Committee is authorized to make Awards of Restricted Stock or Restricted Stock
Units to Participants in such amounts and subject to such terms and conditions
as may be selected by the Committee. An Award of Restricted Stock or Restricted
Stock Units shall be evidenced by an Award Certificate setting forth the terms,
conditions, and restrictions applicable to the Award.
10.2. ISSUANCE AND RESTRICTIONS. Restricted Stock or Restricted Stock
Units shall be subject to such restrictions on transferability and other
restrictions as the Committee may impose (including, without limitation,
limitations on the right to vote Restricted Stock or the right to receive
dividends on the Restricted Stock). These restrictions may lapse separately or
in combination at such times, under such circumstances, in such installments,
upon the satisfaction of
-A10-
performance goals or otherwise, as the Committee determines at the time of the
grant of the Award or thereafter. Except as otherwise provided in an Award
Certificate or any special Plan document governing an Award, the Participant
shall have all of the rights of a stockholder with respect to the Restricted
Stock, and the Participant shall have none of the rights of a stockholder with
respect to Restricted Stock Units until such time as Shares of Stock are paid in
settlement of the Restricted Stock Units.
10.3. FORFEITURE. Except as otherwise determined by the Committee at
the time of the grant of the Award or thereafter, upon termination of Continuous
Status as a Participant during the applicable restriction period or upon failure
to satisfy a performance goal during the applicable restriction period,
Restricted Stock or Restricted Stock Units that are at that time subject to
restrictions shall be forfeited; provided, however, that the Committee may
provide in any Award Certificate that restrictions or forfeiture conditions
relating to Restricted Stock or Restricted Stock Units will be waived in whole
or in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part restrictions or
forfeiture conditions relating to Restricted Stock or Restricted Stock Units.
10.4. DELIVERY OF RESTRICTED STOCK. Shares of Restricted Stock shall be
delivered to the Participant at the time of grant either by book-entry
registration or by delivering to the Participant, or a custodian or escrow agent
(including, without limitation, the Company or one or more of its Associates)
designated by the Committee, a stock certificate or certificates registered in
the name of the Participant. If physical certificates representing shares of
Restricted Stock are registered in the name of the Participant, such
certificates must bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such Restricted Stock.
ARTICLE 11
DEFERRED STOCK UNITS
11.1. GRANT OF DEFERRED STOCK UNITS . The Committee is authorized to
grant Deferred Stock Units to Participants subject to such terms and conditions
as may be selected by the Committee. Deferred Stock Units shall entitle the
Participant to receive Shares of Stock (or the equivalent value in cash or other
property if so determined by the Committee) at a future time as determined by
the Committee, or as determined by the Participant within guidelines established
by the Committee in the case of voluntary deferral elections. An Award of
Deferred Stock Units shall be evidenced by an Award Certificate setting forth
the terms and conditions applicable to the Award.
ARTICLE 12
DIVIDEND EQUIVALENTS
12.1. GRANT OF DIVIDEND EQUIVALENTS. The Committee is authorized to
grant Dividend Equivalents to Participants subject to such terms and conditions
as may be selected by the Committee. Dividend Equivalents shall entitle the
Participant to receive payments equal to dividends with respect to all or a
portion of the number of Shares subject to an Award, as determined by the
Committee. The Committee may provide that Dividend Equivalents be paid or
distributed when accrued or be deemed to have been reinvested in additional
Shares, or otherwise reinvested.
ARTICLE 13
STOCK OR OTHER STOCK-BASED AWARDS
13.1. GRANT OF STOCK OR OTHER STOCK-BASED AWARDS. The Committee is
authorized, subject to limitations under applicable law, to grant to
Participants such other Awards that are payable in, valued in whole or in part
by reference to, or otherwise based on or related to Shares, as deemed by the
Committee to be consistent with the purposes of the Plan, including without
limitation Shares awarded purely as a "bonus" and not subject to any
restrictions or conditions, convertible or exchangeable debt securities, other
rights convertible or exchangeable into Shares, and Awards valued by reference
to book value of Shares or the value of securities of or the performance of
specified Parents or Subsidiaries. The Committee shall determine the terms and
conditions of such Awards.
-A11-
ARTICLE 14
PROVISIONS APPLICABLE TO AWARDS
14.1. STAND-ALONE AND TANDEM AWARDS. Awards granted under the Plan may,
in the discretion of the Committee, be granted either alone or in addition to,
in tandem with, any other Award granted under the Plan. Subject to Section 16.2,
awards granted in addition to or in tandem with other Awards may be granted
either at the same time as or at a different time from the grant of such other
Awards.
14.2. TERM OF AWARD. The term of each Award shall be for the period as
determined by the Committee, provided that in no event shall the term of any
Incentive Stock Option or a Stock Appreciation Right granted in tandem with the
Incentive Stock Option exceed a period of ten years from its Grant Date (or, if
Section 7.2(c) applies, five years from its Grant Date).
14.3. FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and
any applicable law or Award Certificate, payments or transfers to be made by the
Company or an Affiliate on the grant or exercise of an Award may be made in such
form as the Committee determines at or after the Grant Date, including without
limitation, cash, Stock, other Awards, or other property, or any combination,
and may be made in a single payment or transfer, in installments, or on a
deferred basis, in each case determined in accordance with rules adopted by, and
at the discretion of, the Committee.
14.4. LIMITS ON TRANSFER. No right or interest of a Participant in any
unexercised or restricted Award may be pledged, encumbered, or hypothecated to
or in favor of any party other than the Company or an Affiliate, or shall be
subject to any lien, obligation, or liability of such Participant to any other
party other than the Company or an Affiliate. No unexercised or restricted Award
shall be assignable or transferable by a Participant other than by will or the
laws of descent and distribution or, except in the case of an Incentive Stock
Option, pursuant to a domestic relations order that would satisfy Section
414(p)(1)(A) of the Code if such Section applied to an Award under the Plan;
provided, however, that the Committee may (but need not) permit other transfers
where the Committee concludes that such transferability (i) does not result in
accelerated taxation, (ii) does not cause any Option intended to be an Incentive
Stock Option to fail to be described in Code Section 422(b), and (iii) is
otherwise appropriate and desirable, taking into account any factors deemed
relevant, including without limitation, state or federal tax or securities laws
applicable to transferable Awards.
14.5. BENEFICIARIES. Notwithstanding Section 14.4, a Participant may,
in the manner determined by the Committee, designate a beneficiary to exercise
the rights of the Participant and to receive any distribution with respect to
any Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award Certificate applicable to the
Participant, except to the extent the Plan and Award Certificate otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If no beneficiary has been designated or survives the
Participant, payment shall be made to the Participant's estate. Subject to the
foregoing, a beneficiary designation may be changed or revoked by a Participant
at any time provided the change or revocation is filed with the Committee.
14.6. STOCK CERTIFICATES. All Stock issuable under the Plan is subject
to any stop-transfer orders and other restrictions as the Committee deems
necessary or advisable to comply with federal or state securities laws, rules
and regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The Committee
may place legends on any Stock certificate or issue instructions to the transfer
agent to reference restrictions applicable to the Stock.
14.7. ACCELERATION UPON DEATH OR DISABILITY. Except as otherwise
provided in the Award Certificate, upon the Participant's death or Disability
during his or her Continuous Status as a Participant, (i) all of such
Participant's outstanding Options, SARs, and other Awards in the nature of
rights that may be exercised shall become fully exercisable, (ii) all time-based
vesting restrictions on the Participant's outstanding Awards shall lapse, and
(iii) the target payout opportunities attainable under all of such Participant's
outstanding performance-based Awards shall be deemed to have been fully earned
as of the date of termination based upon an assumed achievement of all relevant
performance goals at the "target" level and there shall be a prorata payout to
the Participant or his or her estate within thirty (30) days following the date
of termination based upon the length of time within the performance period that
has elapsed prior to the date of termination. Any Awards shall thereafter
continue or lapse in accordance with the other provisions of the Plan and the
Award Certificate. To the extent that this provision causes Incentive Stock
Options to exceed the dollar limitation set forth in Section 7.2(b), the excess
Options shall be deemed to be Nonstatutory Stock Options.
-A12-
14.8. ACCELERATION UPON RETIREMENT. Except as otherwise provided in the
Award Certificate, upon the Participant's Retirement, (i) all of such
Participant's outstanding Options, SARs, and other Awards in the nature of
rights that may be exercised shall become fully exercisable, (ii) all time-based
vesting restrictions on the Participant's outstanding Awards shall lapse, and
(iii) the target payout opportunities attainable under all of such Participant's
outstanding performance-based Awards that are not intended to be Qualified
Performance-Based Awards under Section 14.12(b)) shall be deemed to have been
fully earned as of the date of termination based upon an assumed achievement of
all relevant performance goals at the "target" level and there shall be a
prorata payout to the Participant within thirty (30) days following the date of
Retirement based upon an assumed achievement of all relevant targeted
performance goals and upon the length of time within the performance period that
has elapsed prior to the date of Retirement. Any Awards shall thereafter
continue or lapse in accordance with the other provisions of the Plan and the
Award Certificate; provided, however, that any Awards in the nature of rights
that may be exercised shall remain exercisable until the earlier of (i) the
original expiration of the Award, or (ii) the first anniversary of the
Participant's Retirement. To the extent that this provision causes Incentive
Stock Options to exceed the dollar limitation set forth in Section 7.2(b), the
excess Options shall be deemed to be Nonstatutory Stock Options.
As consideration for the accelerated vesting and extended exercise
period of Options and SARs provided in this Section 14.8, an Associate must
agree in writing that he or she will not compete with the 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 or SARs that would have otherwise been
forfeited but for the provisions of this Section 14.8. For purpose of this
Section 14.8 "compete with 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.
14.9. ACCELERATION UPON A CHANGE IN CONTROL. Except as otherwise
provided in the Award Certificate, if a Participant's employment is terminated
without Cause or the Participant resigns for Good Reason within two years after
the effective date of a Change in Control, then (i) all of that Participant's
outstanding Options, SARs and other Awards in the nature of rights that may be
exercised shall become fully exercisable, and (ii) all time-based vesting
restrictions on his or her outstanding Awards shall lapse. Except as otherwise
provided in the Award Certificate, upon the occurrence of a Change in Control,
the target payout opportunities attainable under all outstanding
performance-based Awards shall be deemed to have been fully earned as of the
effective date of the Change in Control based upon an assumed achievement of all
relevant performance goals at the "target" level and there shall be pro rata
payout to Participants within thirty (30) days following the effective date of
the Change in Control based upon the length of time within the performance
period that has elapsed prior to the Change in Control.
14.10. ACCELERATION FOR ANY OTHER REASON. Regardless of whether an
event has occurred as described in Section 14.7, 14.8 or 14.9 above, and subject
to Section 14.12 as to Qualified Performance-Based Awards, the Committee may in
its sole discretion at any time determine that all or a portion of a
Participant's Options, SARs, and other Awards in the nature of rights that may
be exercised shall become fully or partially exercisable, that all or a part of
the restrictions on all or a portion of the outstanding Awards shall lapse,
and/or that any performance-based criteria with respect to any Awards shall be
deemed to be wholly or partially satisfied, in each case, as of such date as the
Committee may, in its sole discretion, declare. The Committee may discriminate
among Participants and among Awards granted to a Participant in exercising its
discretion pursuant to this Section 14.10.
14.11. EFFECT OF ACCELERATION. If an Award is accelerated under Section
14.7, 14.8, 14.9 or Section 14.10, the Committee may, in its sole discretion,
provide (i) that the Award will expire after a designated period of time after
such acceleration to the extent not then exercised, (ii) that the Award will be
settled in cash rather than Stock, (iii) that the Award will be assumed by
another party to a transaction giving rise to the acceleration or otherwise be
equitably converted or substituted in connection with such transaction, (iv)
that the Award may be settled by payment in cash or cash equivalents equal to
the excess of the Fair Market Value of the underlying Stock, as of a specified
date associated with the transaction, over the exercise price of the Award, or
(v) any combination of the foregoing. The Committee's determination need not be
uniform and may be different for different Participants whether or not such
Participants are similarly situated. To the extent that such acceleration causes
Incentive Stock Options to exceed the dollar limitation set forth in Section
7.2(b), the excess Options shall be deemed to be Nonstatutory Stock Options.
-A13-
14.12. QUALIFIED PERFORMANCE-BASED AWARDS.
(a) The provisions of the Plan are intended to ensure that all
Options and Stock Appreciation Rights granted hereunder to any Covered
Employee shall qualify for the Section 162(m) Exemption; provided that
the exercise or base price of such Award is not less than the Fair
Market Value of the Shares on the Grant Date.
(b) When granting any other Award (including a below-market
priced Option or SAR), the Committee may designate such Award as a
Qualified Performance-Based Award, based upon a determination that the
recipient is or may be a Covered Employee with respect to such Award,
and the Committee wishes such Award to qualify for the Section 162(m)
Exemption. If an Award is so designated, the Committee shall establish
performance goals for such Award within the time period prescribed by
Section 162(m) of the Code based on one or more of the following
Qualified Business Criteria, which may be expressed in terms of
Company-wide objectives or in terms of objectives that relate to the
performance of an Affiliate or a division, region, department or
function within the Company or an Affiliate:
- Revenue
- Sales
- Profit (net profit, gross profit, operating profit, economic
profit, profit margins or other corporate profit measures)
- Earnings (EBIT, EBITDA, earnings per share, or other
corporate earnings measures)
- Net income (before or after taxes, operating income or other
income measures)
- Cash (cash flow, cash generation or other cash measures)
- Stock price or performance
- Total stockholder return (stock price appreciation plus
reinvested dividends divided by beginning share price)
- Return measures (including, but not limited to, return on
assets, capital, equity, or sales, and cash flow return on
assets, capital, equity, or sales);
- Market share
- Improvements in capital structure
- Expenses (expense management, expense ratio, expense
efficiency ratios or other expense measures)
- Business expansion or consolidation (acquisitions and
divestitures)
- Internal rate of return or increase in net present value
- Working capital targets relating to inventory and/or
accounts receivable
- Planning accuracy (as measured by comparing planned results
to actual results)
Performance goals with respect to the foregoing Qualified
Business Criteria may be specified in absolute terms, in percentages,
or in terms of growth from period to period or growth rates over time,
as well as measured relative to an established or specially-created
performance index of Company competitors or peers. Any member of an
index that disappears during a measurement period shall be disregarded
for the entire measurement period. Performance Goals need not be based
upon an increase or positive result under a business criterion and
could include, for example, the maintenance of the status quo or the
limitation of economic losses (measured, in each case, by reference to
a specific business criterion).
In the event that applicable tax and/or securities laws change
to permit Board or Committee discretion to alter the governing
Qualified Business Criteria without obtaining stockholder approval of
such changes, the Board or Committee shall have sole discretion to make
such changes without obtaining stockholder approval.
(c) Each Qualified Performance-Based Award (other than a
market-priced Option or SAR) shall be earned, vested and payable (as
applicable) only upon the achievement of performance goals established
by the Committee based upon one or more of the Qualified Business
Criteria, together with the satisfaction of any other conditions, such
as continued employment, as the Committee may determine to be
appropriate; provided, however, that the Committee may provide, either
in connection with the grant thereof or by amendment thereafter, that
achievement of such performance goals will be waived upon the death or
Disability of the Participant, or upon termination of the Participant's
employment without Cause or for Good Reason within two years after the
effective date of a Change in Control. Performance periods established
by the Committee for any such Qualified Performance-Based Award may be
as short as three months and may be any longer period.
-A14-
(d) The Committee may provide in any Qualified
Performance-Based Award that any evaluation of performance may include
or exclude any of the following events that occurs during a performance
period: (a) asset write-downs or impairment charges; (b) litigation or
claim judgments or settlements; (c) the effect of changes in tax laws,
accounting principles or other laws or provisions affecting reported
results; (d) accruals for reorganization and restructuring programs;
(e) extraordinary nonrecurring items as described in Accounting
Principles Board Opinion No. 30 and/or in management's discussion and
analysis of financial condition and results of operations appearing in
the Company's annual report to stockholders for the applicable year;
(f) acquisitions or divestitures; and (g) foreign exchange gains and
losses. To the extent such inclusions or exclusions affect Awards to
Covered Employees, they shall be prescribed in a form that meets the
requirements of Code Section 162(m) for deductibility.
(e) Any payment of a Qualified Performance-Based Award granted
with performance goals pursuant to subsection (c) above shall be
conditioned on the written certification of the Committee in each case
that the performance goals and any other material conditions were
satisfied. Except as specifically provided in subsection (c), no
Qualified Performance-Based Award may be amended, nor may the Committee
exercise any discretionary authority it may otherwise have under the
Plan with respect to a Qualified Performance-Based Award under the
Plan, in any manner to waive the achievement of the applicable
performance goal based on Qualified Business Criteria or to increase
the amount payable pursuant thereto or the value thereof, or otherwise
in a manner that would cause the Qualified Performance-Based Award to
cease to qualify for the Section 162(m) Exemption.
(f) Section 5.4 sets forth the maximum number of Shares or
dollar value that may be granted in any one-year period to a
Participant in designated forms of Qualified Performance-Based Awards.
14.13. TERMINATION OF EMPLOYMENT. Whether military, government or other
service or other leave of absence shall constitute a termination of employment
shall be determined in each case by the Committee at its discretion, and any
determination by the Committee shall be final and conclusive. A Participant's
Continuous Status as a Participant shall not be deemed to terminate (i) in a
circumstance in which a Participant transfers from the Company to an Affiliate,
transfers from an Affiliate to the Company, or transfers from one Affiliate to
another Affiliate, or (ii) in the discretion of the Committee as specified at or
prior to such occurrence, in the case of a spin-off, sale or disposition of the
Participant's employer from the Company or any Affiliate. To the extent that
this provision causes Incentive Stock Options to extend beyond three months from
the date a Participant is deemed to be a common law employee of the Company, a
Parent or Subsidiary for purposes of Sections 424(e) and 424(f) of the Code, the
Options held by such Participant shall be deemed to be Nonstatutory Stock
Options.
14.14. DEFERRAL. The Committee may permit or require a Participant to
defer such Participant's receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant by virtue of the exercise
of an Option or SAR, the lapse or waiver of restrictions with respect to
Restricted Stock or Restricted Stock Units, or the satisfaction of any
requirements or goals with respect to Performance Awards, and Other Stock-Based
Awards. If any such deferral election is required or permitted, the Board shall,
in its sole discretion, establish rules and procedures for such payment
deferrals.
14.15. FORFEITURE EVENTS. The Committee may specify in an Award
Certificate that the Participant's rights, payments and benefits with respect to
an Award shall be subject to reduction, cancellation, forfeiture or recoupment
upon the occurrence of certain specified events, in addition to any otherwise
applicable vesting or performance conditions of an Award. Such events shall
include, but shall not be limited to, termination of employment for cause,
violation of material Company or Affiliate policies, breach of noncompetition,
confidentiality or other restrictive covenants that may apply to the
Participant, or other conduct by the Participant that is detrimental to the
business or reputation of the Company or any Affiliate.
ARTICLE 15
CHANGES IN CAPITAL STRUCTURE
15.1. GENERAL. In the event of a corporate event or transaction
involving the Company (including, without limitation, any stock dividend, stock
split, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares), the
authorization limits under Section 5.1 and 5.4 shall be adjusted
proportionately, and the Committee may adjust the Plan and Awards to preserve
the benefits or potential benefits of the Awards. Action by the Committee may
include: (i) adjustment of the number and kind of shares which may be delivered
under the Plan; (ii) adjustment of the number and kind of shares subject to
outstanding Awards; (iii) adjustment of the exercise price of outstanding Awards
or the measure to be used to determine the amount of the benefit payable on an
-A15-
Award; and (iv) any other adjustments that the Committee determines to be
equitable. In addition, the Committee may, in its sole discretion, provide (i)
that Awards will be settled in cash rather than Stock, (ii) that Awards will
become immediately vested and exercisable and will expire after a designated
period of time to the extent not then exercised, (iii) that Awards will be
assumed by another party to a transaction or otherwise be equitably converted or
substituted in connection with such transaction, (iv) that outstanding Awards
may be settled by payment in cash or cash equivalents equal to the excess of the
Fair Market Value of the underlying Stock, as of a specified date associated
with the transaction, over the exercise price of the Award, (v) that performance
targets and performance periods for Performance Awards will be modified,
consistent with Code Section 162(m) where applicable, or (vi) any combination of
the foregoing. The Committee's determination need not be uniform and may be
different for different Participants whether or not such Participants are
similarly situated. Without limiting the foregoing, in the event of a
subdivision of the outstanding Stock (stock-split), a declaration of a dividend
payable in Shares, or a combination or consolidation of the outstanding Stock
into a lesser number of Shares, the authorization limits under Section 5.1 and
5.4 shall automatically be adjusted proportionately, and the Shares then subject
to each Award shall automatically be adjusted proportionately without any change
in the aggregate purchase price therefore. To the extent that any adjustments
made pursuant to this Article 15 cause Incentive Stock Options to cease to
qualify as Incentive Stock Options, such Options shall be deemed to be
Nonstatutory Stock Options.
ARTICLE 16
AMENDMENT, MODIFICATION AND TERMINATION
16.1. AMENDMENT, MODIFICATION AND TERMINATION. The Board or the
Committee may, at any time and from time to time, amend, modify or terminate the
Plan without stockholder approval; provided, however, that if an amendment to
the Plan would, in the reasonable opinion of the Board or the Committee, either
(i) materially increase the benefits accruing to Participants, (ii) materially
increase the number of Shares available under the Plan, (iii) expand the types
of awards under the Plan, (iv) materially expand the class of participants
eligible to participate in the Plan, (v) materially extend the term of the Plan,
or (vi) otherwise constitute a material change requiring stockholder approval
under applicable laws, policies or regulations or the applicable listing or
other requirements of an Exchange, then such amendment shall be subject to
stockholder approval; and provided, further, that the Board or Committee may
condition any other amendment or modification on the approval of stockholders of
the Company for any reason, including by reason of such approval being necessary
or deemed advisable to (i) permit Awards made hereunder to be exempt from
liability under Section 16(b) of the 1934 Act, (ii) to comply with the listing
or other requirements of an Exchange, or (iii) to satisfy any other tax,
securities or other applicable laws, policies or regulations.
16.2. AWARDS PREVIOUSLY GRANTED. At any time and from time to time, the
Committee may amend, modify or terminate any outstanding Award without approval
of the Participant; provided, however:
(a) Subject to the terms of the applicable Award Certificate,
such amendment, modification or termination shall not, without the
Participant's consent, reduce or diminish the value of such Award
determined as if the Award had been exercised, vested, cashed in or
otherwise settled on the date of such amendment or termination (with
the per-share value of an Option or Stock Appreciation Right for this
purpose being calculated as the excess, if any, of the Fair Market
Value as of the date of such amendment or termination over the exercise
or base price of such Award);
(b) The original term of an Option may not be extended without
the prior approval of the stockholders of the Company;
(c) Except as otherwise provided in Article 15, the exercise
price of an Option may not be reduced, directly or indirectly, without
the prior approval of the stockholders of the Company; and
(d) No termination, amendment, or modification of the Plan
shall adversely affect any Award previously granted under the Plan,
without the written consent of the Participant affected thereby. An
outstanding Award shall not be deemed to be "adversely affected" by a
Plan amendment if such amendment would not reduce or diminish the value
of such Award determined as if the Award had been exercised, vested,
cashed in or otherwise settled on the date of such amendment (with the
per-share value of an Option or Stock Appreciation Right for this
purpose being calculated as the excess, if any, of the Fair Market
Value as of the date of such amendment over the exercise or base price
of such Award).
-A16-
ARTICLE 17
GENERAL PROVISIONS
17.1. NO RIGHTS TO AWARDS; NON-UNIFORM DETERMINATIONS. No Participant
or any Eligible Participant shall have any claim to be granted any Award under
the Plan. Neither the Company, its Affiliates nor the Committee is obligated to
treat Participants or Eligible Participants uniformly, and determinations made
under the Plan may be made by the Committee selectively among Eligible
Participants who receive, or are eligible to receive, Awards (whether or not
such Eligible Participants are similarly situated).
17.2. NO STOCKHOLDER RIGHTS. No Award gives a Participant any of the
rights of a stockholder of the Company unless and until Shares are in fact
issued to such person in connection with such Award.
17.3. WITHHOLDING. The Company or any Affiliate shall have the
authority and the right to deduct or withhold, or require a Participant to remit
to the Company, an amount sufficient to satisfy federal, state, and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any exercise, lapse of restriction or other taxable event
arising as a result of the Plan. If Shares are surrendered to the Company to
satisfy withholding obligations in excess of the minimum withholding obligation,
such Shares must have been held by the Participant as fully vested shares for
such period of time, if any, as necessary to avoid the recognition of an expense
under generally accepted accounting principles. The Company shall have the
authority to require a Participant to remit cash to the Company in lieu of the
surrender of Shares for tax withholding obligations if the surrender of Shares
in satisfaction of such withholding obligations would result in the Company's
recognition of expense under generally accepted accounting principles. With
respect to withholding required upon any taxable event under the Plan, the
Committee may, at the time the Award is granted or thereafter, require or permit
that any such withholding requirement be satisfied, in whole or in part, by
withholding from the Award Shares having a Fair Market Value on the date of
withholding equal to the minimum amount (and not any greater amount) required to
be withheld for tax purposes, all in accordance with such procedures as the
Committee establishes.
17.4. NO RIGHT TO CONTINUED SERVICE. Nothing in the Plan, any Award
Certificate or any other document or statement made with respect to the Plan,
shall interfere with or limit in any way the right of the Company or any
Affiliate to terminate any Participant's employment or status as an officer or
director at any time, nor confer upon any Participant any right to continue as
an Associate, officer or director of the Company or any Affiliate, whether for
the duration of a Participant's Award or otherwise.
17.5. UNFUNDED STATUS OF AWARDS. The Plan is intended to be an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award Certificate shall give the Participant any rights that
are greater than those of a general creditor of the Company or any Affiliate.
This Plan is not intended to be subject to ERISA.
17.6. RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall
be taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or benefit plan of the Company
or any Affiliate unless provided otherwise in such other plan.
17.7. EXPENSES. The expenses of administering the Plan shall be borne
by the Company and its Affiliates.
17.8. TITLES AND HEADINGS. The titles and headings of the Sections in
the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.
17. 9. GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
17.10. FRACTIONAL SHARES. No fractional Shares shall be issued and the
Committee shall determine, in its discretion, whether cash shall be given in
lieu of fractional Shares or whether such fractional Shares shall be eliminated
by rounding up or down.
17.11. GOVERNMENT AND OTHER REGULATIONS.
(a) Notwithstanding any other provision of the Plan, no
Participant who acquires Shares pursuant to the Plan may, during any
period of time that such Participant is an affiliate of the Company
(within the meaning of the rules and regulations of the Securities and
Exchange Commission under the 1933 Act), sell such Shares, unless
-A17-
such offer and sale is made (i) pursuant to an effective registration
statement under the 1933 Act, which is current and includes the Shares
to be sold, or (ii) pursuant to an appropriate exemption from the
registration requirement of the 1933 Act, such as that set forth in
Rule 144 promulgated under the 1933 Act.
(b) Notwithstanding any other provision of the Plan, if at any
time the Committee shall determine that the registration, listing or
qualification of the Shares covered by an Award upon any Exchange or
under any foreign, federal, state or local law or practice, or the
consent or approval of any governmental regulatory body, is necessary
or desirable as a condition of, or in connection with, the granting of
such Award or the purchase or receipt of Shares thereunder, no Shares
may be purchased, delivered or received pursuant to such Award unless
and until such registration, listing, qualification, consent or
approval shall have been effected or obtained free of any condition not
acceptable to the Committee. Any Participant receiving or purchasing
Shares pursuant to an Award shall make such representations and
agreements and furnish such information as the Committee may request to
assure compliance with the foregoing or any other applicable legal
requirements. The Company shall not be required to issue or deliver any
certificate or certificates for Shares under the Plan prior to the
Committee's determination that all related requirements have been
fulfilled. The Company shall in no event be obligated to register any
securities pursuant to the 1933 Act or applicable state or foreign law
or to take any other action in order to cause the issuance and delivery
of such certificates to comply with any such law, regulation or
requirement.
17.12. GOVERNING LAW. To the extent not governed by federal law, the
Plan and all Award Certificates shall be construed in accordance with and
governed by the laws of the State of Delaware.
17.13 ADDITIONAL PROVISIONS. Each Award Certificate may contain such
other terms and conditions as the Committee may determine; provided that such
other terms and conditions are not inconsistent with the provisions of the Plan.
17.14. NO LIMITATIONS ON RIGHTS OF COMPANY. The grant of any Award
shall not in any way affect the right or power of the Company to make
adjustments, reclassification or changes in its capital or business structure or
to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of
its business or assets. The Plan shall not restrict the authority of the
Company, for proper corporate purposes, to grant or assume awards, other than
under the Plan, to or with respect to any person. If the Committee so directs,
the Company may issue or transfer Shares to an Affiliate, for such lawful
consideration as the Committee may specify, upon the condition or understanding
that the Affiliate will transfer such Shares to a Participant in accordance with
the terms of an Award granted to such Participant and specified by the Committee
pursuant to the provisions of the Plan.
17.15. INDEMNIFICATION. Each person who is or shall have been a member
of the Committee, or of the Board, or an officer of the Company to whom
authority was delegated in accordance with Article 4 shall be indemnified and
held harmless by the Company against and from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be involved by reason
of any action taken or failure to act under the Plan and against and from any
and all amounts paid by him or her in settlement thereof, with the Company's
approval, or paid by him or her in satisfaction of any judgment in any such
action, suit, or proceeding against him or her, provided he or she shall give
the Company an opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her own behalf,
unless such loss, cost, liability, or expense is a result of his or her own
willful misconduct or except as expressly provided by statute. The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
charter or bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.
The foregoing is hereby acknowledged as being the WSFS Financial
Corporation 2005 Incentive Plan as adopted by the Board on February 23, 2005 to
be submitted to the stockholders for approval at the 2005 annual meeting.
WSFS Financial Corporation
By: Mark A. Turner
Its: Corporate Secretary
-A18-
APPENDIX B
PERSONNEL AND COMPENSATION COMMITTEE CHARTER
Purpose
The Personnel and Compensation Committee will serve the Board of Directors by
providing oversight and guidance with respect to Personnel and Compensation
policies and practices. Also, the Committee will provide oversight to Management
so that the Bank creates and maintains competitive programs which attract,
develop, motivate, reward and retain Associates committed to superior
performance and the highest professional and ethical standards. The Committee
will ensure that Personnel and Compensation policies support the Bank's
strategic mission and comply with all applicable legal and regulatory
requirements. The Committee has specific responsibility for the review of Bank
officer appointments at the level of Executive Vice President and above.
Responsibilities
The Committee shall have the following primary responsibilities:
1. Recommend to the Board levels of salary and incentive compensation payable
to the Senior Officers1 and other key Associates of the Company.
2. Recommend to the Board of Directors the establishment of incentive
compensation plans and programs.
3. Recommend to the Board of Directors the adoption and administration of
certain Associate benefit plans and programs of the Company.
4. Recommend to the Board of Directors payment of additional year-end
contributions by the Company under certain of its retirement plans.
5. Oversee the Company's stock incentive plans.
6. Determine and recommend to the Board stock incentive awards to key
Associates of the Company.
7. Annually, review and recommend to the Board performance goals and
objectives with respect to the compensation of the Chief Executive Officer
consistent with approved compensation plans. Further, recommend the CEO's
total compensation level based on such evaluation.
8. Determine whether to retain or terminate any compensation consulting firm
used by the Company to assist in the evaluation of director, CEO, or senior
executive compensation. Exercise sole authority to approve the terms and
fees relating to such retention.
9. Perform such other functions as are from time to time assigned by the
Board.
Membership and Meetings
The Board of Directors shall annually appoint the members (at least three
independent Directors) of the Personnel and Compensation Committee. The
Committee shall designate its Chairperson. A majority of Committee members shall
constitute a quorum for the transaction of business. The Director of the Bank's
Human Resources Department shall serve as the Secretary to the Committee. The
action of a majority of those present at a meeting, at which a quorum is
attained, shall be the act of the Committee. The Committee may delegate matters
within its responsibility to subcommittees. The Committee shall meet as
required, keep a record of its proceedings, and report thereon from time to time
to the Board of Directors.
--------
1 Direct reports to the President.
-B1-
ANNUAL MEETING OF STOCKHOLDERS OF
WSFS FINANCIAL CORPORATION
April 28, 2005
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible
Please detach along perforated line and mail in the envelope provided.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES AND ITEMS
LISTED BELOW. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
--------------------------------------------------------------------------------------------------------------------------------
1. Election of Directors: FOR AGAINST ABSTAIN
2. Ratification of the appointment of [ ] [ ] [ ]
|_| FOR ALL NOMINEES o Charles G. Cheleden KPMG LLP as independent auditors
o Joseph R. Julian for the fiscal year ending December
|_| WITHHOLD AUTHORITY o Dennis E. Klima 31, 2005.
FOR ALL NOMINEES o Calvert A. Morgan, Jr.
3. Approval of the WSFS Financial [ ] [ ] [ ]
Corporation 2005 Incentive Plan.
|_| FOR ALL EXCEPT Each for a three year term
(See instructions below) expiring 2008. 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 proxy will be voted
INSTRUCTION: To withhold authority to vote for any individual FOR each of the nominees and the other proposals. The
nominee(s), mark "FOR ALL EXCEPT" and fill in the undersigned, by executing and delivering this proxy,
circle next to each nominee you wish to withhold, revokes the authority given with respect to any earlier
shown here: o dated proxy submitted by the undersigned.
Unless contrary direction is given, the right is reserved
in the sole discretion of the Board of Directors to
distribute votes among some or all of the above nominees
in a manner other than equally so as to elect as directors
the maximum possible number of such nominees.
In their discretion the proxies are authorized to vote
upon such other business as may properly come before
the Annual Meeting.
The undersigned acknowledges receipt of the Notice of
Annual Meeting of Stockholders, a Proxy Statement and
Annual Report of WSFS Financial Corporation.
To change the address on your account, please check the box PLEASE MARK, SIGN, DATE AND RETURN THIS CARD
at the right and indicate your new address in the address PROMPTLY USING THE ENCLOSED ENVELOPE.
space above. Please note that changes to the the registered
name(s) on the account may not be submitted via this method. [ ]
Signature of Stockholder_________________Date ___________ Signature of Stockholder _______________Date _____________
Note: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
This Proxy is Solicited on Behalf of the Board of Directors
WSFS FINANCIAL CORPORATION
for the
2005 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 28, 2005 at 4:00 p.m., or at any adjournments
thereof, as follows:
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.