WSFS FINANCIAL CORPORATION
838 Market Street
Wilmington, Delaware 19801
(302) 792-6000
March 12, 2004
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 du Pont,
Eleventh and Market Streets, Wilmington, Delaware 19801 on Thursday, April 22,
2004 at 4:00 p.m. At this meeting, stockholders will be asked to consider a
proposal to re-elect four directors whose terms are expiring and to ratify the
appointment of independent auditors.
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 22, 2004
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 du Pont,
Eleventh and Market Streets, Wilmington, Delaware 19801 on Thursday, April 22,
2004, at 4:00 p.m., 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, 2004;
3. 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 1, 2004, 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,
Chief Financial Officer and Secretary
March 12, 2004
--------------------------------------------------------------------------------
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 22, 2004
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 22, 2004, 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 12, 2004.
VOTING AND REVOCABILITY OF PROXIES
Proxies solicited by the Board of Directors of the Company will be
voted in accordance with the directions given therein. Where no instructions are
indicated, proxies will be voted FOR the nominees for directors and for the
other proposals as set forth 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 1, 2004 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
7,376,144 shares of Common Stock outstanding. The presence, in person or by
proxy, of the holders of a majority of the
1
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
required for a quorum.
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.
Brokers who do not receive instructions are entitled to vote on the election of
directors and the ratification of the appointment of independent auditors
pursuant to discretionary voting authority.
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.
2
Amount and Nature
Of Beneficial Percent
Name Ownership (1) of Class
---- ------------- --------
R. Ted Weschler (2) 740,700 shares 10.04 %
Peninsula Capital Advisors, LLC
Peninsula Partners, L.P.
4048 East Main Street
Charlottesville, VA 22902
Private Capital Management (3) 714,170 shares 9.68 %
8889 Pelican Bay Boulevard
Naples, FL 34108
Barclays Global Investors, NA (4) 568,567 shares 7.71 %
45 Freemont Street
San Francisco, CA 94105
Wellington Management Company, LLP (5) 554,500 shares 7.52 %
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 or investment power with
respect to such Common Stock or has a right to acquire beneficial ownership
at any time within 60 days from the Record Date. As used herein, "voting
power" is the power to vote or direct the voting of shares and "investment
power" is the power to dispose or direct the disposition of shares. Except
as otherwise noted, ownership is direct, and the named individuals and
group exercise sole voting power over the shares of the Common Stock.
(2) Includes 734,100 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 3,500 shares held directly by Mr. Weschler and 3,100
shares of Common Stock that may be acquired through the exercise of options
within 60 days of the Record Date.
(3) According to the Statement on Schedule 13G of Private Capital Management
filed on February 13, 2004, shares are held by its investment advisory
clients as to which it shares voting or investment power.
(4) According to the Statement on Schedule 13G of Barclays Global Investors, NA
filed on February 17, 2004, 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 13, 2004, shares are held by its investment
advisory clients as to which it shares voting or investment power.
3
PROPOSAL 1 -- ELECTION OF DIRECTORS
The number of directors is currently fixed at eleven members. The Board
of Directors is divided into three classes. The members of each class are
elected for a term of three years and until their successors are elected and
qualified; provided that in the event the number of directors has been increased
during the preceding year and such new directorships have been filled by action
of the Board of Directors, the terms of those newly appointed directors expire
at the annual meeting when the class to which they have been elected expires.
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"). 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 John F. Downey,
Thomas P. Preston, Marvin N. Schoenhals and R. Ted Weschler, 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 One.
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,
2003), 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 2007
John F. Downey 66 1998 2004 Executive Director of the WSFS
Office of Thrift Supervision (OTS),
1989-1998 (retired)
Thomas P. Preston 57 1990 2004 Partner, Blank Rome, LLP; WSFS
previously Partner,
Reed Smith, LLP and
Duane, Morris & Heckscher LLP
(Law firms)
Marvin N. Schoenhals 56 1990 2004 Chairman of WSFS Financial WSFS;
Corporation since 1992; President WSFS Credit Corporation;
and Chief Executive Officer of WSFS Investment Group, Inc.;
WSFS Financial Corporation WSFS Reit Inc;
since November 1990 WSFS Foundation, Inc. (2);
Montchanin Capital Mgmt., Inc.;
Federal Home Loan Bank of
Pittsburgh (Chairman);
Brandywine Fund, Inc.;
Brandywine Blue Fund, Inc.;
Brandywine Advisors Fund, Inc.;
Delaware State Chamber of
Commerce (Chairman)
R. Ted Weschler 42 1992 2004 Managing Member, WSFS;
Peninsula Capital Advisors, LLC, Virginia National Bank;
an investment advisory firm; First Avenue Networks, Inc.
October 1989 to December 1999,
Partner and Officer of Quad-C,
Inc., a Delaware corporation which
acts as the general partner for
several investment partnerships
5
DIRECTORS CONTINUING IN OFFICE
Year First Current
Elected or Term
Appointed to
Name Age Director Expire Principal Occupation Directorship(s) (1)
---- --- -------- ------ -------------------- -------------------
Charles G. Cheleden 60 1990 2005 October 1992 to present: Vice WSFS
Chairman of WSFS Financial
Corporation; Lead Director;
August 1990 to October 1992:
Chairman, WSFS
Financial Corporation;
January 1990 to present:
self-employed attorney
Joseph R. Julian 66 1988 2005 President, JJID, Inc. WSFS;
(highway construction company) JJID, Inc.
Dale E. Wolf 79 1993 2005 March 1998 to present: WSFS (emeritus);
Vice Chairman of WSFS WSFS Credit Corporation;
Financial Corporation; Emerald BioAgriculture
1989-1993, Lieutenant Corporation;
Governor/Governor of the
State of Delaware
Linda C. Drake 55 1999 2006 Founder and Chair WSFS;
TCIM Services, Inc. TCIM Services, Inc.;
(a direct marketing and LTD Direct
business services company)
David E. Hollowell 56 1996 2006 Executive Vice President and WSFS
University Treasurer
University of Delaware
Claibourne D. Smith 65 1994 2006 Vice President - Technology and WSFS
Professional Development, E.I.
duPont de Nemours & Company,
Incorporated, (multinational
chemical and energy company)
(1964-1998) (retired)
Eugene W. Weaver 71 1998 2006 Vice President of Finance of WSFS;
John W. Rollins & Associates Dover Motorsports, Inc.
(Investment Management
Company), Chief Financial
Officer/Senior Vice President
of Dover Downs Entertainment,
Inc. (1970-1999) (retired)
(1) WSFS Credit Corporation, WSFS Investment Group, Inc., WSFS Reit, Inc. and
Montchanin Capital Management, Inc. are subsidiaries of the Company.
(2) WSFS Foundation, Inc., a charitable foundation, is associated with the
Company.
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) 13,200 shares *
John F. Downey (4)(5) 6,500 shares *
Linda C. Drake (6) 5,900 shares *
David E. Hollowell (4) 13,600 shares *
Joseph R. Julian (4) 65,776 shares *
Thomas P. Preston (7) 8,385 shares *
Marvin N. Schoenhals (8) 234,464 shares 3.10%
Claibourne D. Smith (4) 7,830 shares *
Eugene W. Weaver (4)(9) 11,400 shares *
R. Ted Weschler (4)(10) 740,700 shares 10.04%
Dale E. Wolf (4) 28,240 shares *
Karl L. Johnston (11) 45,833 shares *
Mark A. Turner (12) 110,290 shares 1.48%
Deborah A. Powell (13) 19,681 shares *
Directors and executive officers
as a group (14 persons) 1,311,799 shares 16.94%
---------------
* Less than 1.0%.
(1) For purposes of this table, a person is deemed to be the beneficial owner
of any shares of Common Stock over which he or she has or shares voting or
investment power or of which he or she has the right to acquire beneficial
ownership within 60 days of the Record Date. As used herein, "voting power"
is the power to vote or direct the voting of shares and "investment power"
is the power to dispose or direct the disposition of shares. Other than as
noted below, all persons shown in the table above have sole voting and
investment power, except that the following directors and executive
officers held the following numbers of shares jointly with their respective
spouses: Mr. Cheleden, 3,500 shares; Ms Drake, 3,800 shares; Mr. Hollowell,
7,000 shares; Mr. Julian, 59,676 shares; Mr. Johnston, 1,500 shares; and
Mr. Turner, 7,780 shares.
(2) In calculating the percentage ownership of each named individual and the
group, the number of shares outstanding is deemed to include any shares of
the Common Stock which the individual or the group has the right to acquire
within 60 days of the Record Date.
(3) Includes 6,600 shares of Common Stock held in an Individual Retirement
Account ("IRA").
(4) Includes 3,100 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 2,100 shares of Common Stock that may be acquired through the
exercise of options within 60 days of the Record Date.
(7) Includes 2,300 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.
(8) Includes 20,344 shares of Common Stock held in Mr. Schoenhals' account in
the Company's 401(k) Plan and 189,254 shares of Common Stock that may be
acquired through the exercise of options within 60 days of the Record Date.
(9) Includes 1,000 shares of Common Stock held in an IRA and 800 shares of
Common Stock held by Mr. Weaver's wife. Mr. Weaver disclaims beneficial
ownership of his wife's shares.
(Footnotes continued on next page)
7
(10) Includes 734,100 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.
(11) Includes 34 shares of Common Stock held in Mr. Johnston's account in the
Company's 401(k) Plan and 44,299 shares of Common Stock that may be
acquired through the exercise of options within 60 days of the Record Date.
(12) Includes 8,786 shares of Common Stock held in Mr. Turner's account in the
Company's 401(k) Plan and 91,224 shares of Common Stock that may be
acquired through the exercise of options within 60 days of the Record Date.
(13) Includes 1,281 shares of Common Stock held in Ms Powell's account in the
Company's 401(k) Plan and 12,580 shares of Common Stock that may be
acquired through the exercise of options within 60 days of the Record Date.
Responsibilities of 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; and
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, 2003 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.
8
Executive Committee. The Executive Committee is scheduled to meet one
time each month and as needed, and exercises the powers of the Board of
Directors between meetings of the Board. The Executive Committee is presently
composed of Marvin N. Schoenhals, Chairman, Charles G. Cheleden, David E.
Hollowell, Eugene W. Weaver and R. Ted Weschler. The Executive Committee met
twenty-six (26) times during 2003.
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. The Corporate Governance and
Nominating Committee met three (3) times during 2003. 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 and residence 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
9
character and integrity. The Board also 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. 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
attended the 2003 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 which is attached to this Proxy Statement as Appendix A.
The Committee oversees the audit program and reviews the financial statements of
the Company and its subsidiaries. It reviews the examination reports of federal
regulatory agencies as well as reports of the internal auditors and independent
auditors. The Audit Committee meets quarterly with the head of the Audit
Department and representatives of the Company's independent auditors, with and
without representatives of management present, to review accounting and auditing
matters, 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 eight (8) times
during fiscal year 2003. 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, and the compensation of directors. In addition, the Personnel
Committee is responsible for the overseeing the administration of the 1986 Stock
Option Plan and the 1997 Stock Option Plan (the "Stock Option Plans") and the
executive incentive plans, including recommendations to the Board of Directors
for awards under such plans. Present members of the Personnel Committee are
David E. Hollowell, Chairman, Linda C. Drake, Claibourne D. Smith and R. Ted
Weschler. The Personnel Committee met three (3) times during 2003.
Directors' Compensation. During 2003, each non-Associate director received an
annual retainer of $9,000 plus 500 shares of the Company's Common Stock and a
grant of 1,500 shares under the 1997 Stock Option Plan. Chairpersons of board
committees received an additional annual retainer as follows: Personnel and
Compensation Committee, $1,500; Audit Committee,
10
$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.
EXECUTIVE OFFICERS
Marvin N. Schoenhals, age 56, 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 55, serves as Chief Operating Officer and Chief
Lending Officer. Mr. Johnston joined the Bank in May 1997 as Chief Lending
Officer. He was appointed Chief Operating Officer in 2001. 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 40, serves as Chief Operating Officer, Chief
Financial Officer and Corporate Secretary. He has served as Chief Financial
Officer and Corporate Secretary since May 1998. He was appointed Chief Operating
Officer in 2001. Mr. Turner joined the Company in 1996 as Managing Vice
President and Controller. From 1994 to 1996 Mr. Turner was Vice President of
Finance for the Capital Markets Division of Meridian Bank, and Vice President of
Corporate Development for Meridian Bancorp, both in Reading, Pennsylvania. Prior
to that, he was a Senior Audit Manager with KPMG LLP in Philadelphia,
Pennsylvania.
Deborah A. Powell, age 47, 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.
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, 2003;
11
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, 2003 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 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.
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. In
determining base salaries, the committee refers to data obtained from
nationally recognized compensation surveys as well as information from
similar-sized banks and thrifts in the Mid-Atlantic region.
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 2003, 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.
12
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 2003 were
approximately $1.4 million and were paid in cash during 2004.
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 91,455
stock options in 2003. 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 2003, Mr.
Schoenhals earned $384,375 in base salary. Mr. Schoenhals earned $386,250 in
bonus for fiscal year 2003 under the MIP that was paid after the end of the
fiscal year. In addition, Mr. Schoenhals earned a special bonus of $150,000 as a
result of the extraordinary performance of the Company during 2003. These
bonuses reflects the Company's achievement of specific financial goals for the
2003 fiscal year as well as the Personnel Committee's assessment of Mr.
Schoenhals' contribution to the achievement of those goals. Factors considered
by the Personnel Committee in assessing Mr. Schoenhals' contribution included
his leadership role in formulating and executing the Company's business
strategy. In addition to the foregoing cash compensation, Mr. Schoenhals was
awarded options to purchase 12,650 shares of Common Stock under the 1997 Stock
Option Plan representing 13.8% of the regular options granted to all Associates
during the year.
Compensation Committee Interlocks and Insider Participation. The Company had no
"interlocking" relationships existing on or after December 31, 2003 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.
13
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,
1998, 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, 1998 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, 1998 through December 31, 2003
[GRAPHIC OMITTED]
Cumulative Total Return
---------------------------------------------
1998 1999 2000 2001 2002 2003
---------------------------------------------
WSFS Financial Corporation $100 $ 76 $ 78 $106 $202 $276
Dow Jones Total Market Index 100 122 109 95 73 93
Nasdaq Bank Index 100 94 111 124 133 176
14
SUMMARY COMPENSATION TABLE
The following table sets forth compensation for the years ended
December 31, 2003, 2002 and 2001 for the Company's Chief Executive Officer and
the three other most highly compensated executive officers of the Company whose
salary and bonus earned in 2003 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 2003 $ 384,375 $536,250 12,650 $18,000
Chairman of the Board, 2002 366,250 674,400 16,800 15,614
President and Chief 2001 322,500 175,000 26,300 11,900
Executive Officer
Karl L. Johnston 2003 205,000 198,000 5,350 18,000
Chief Operating Officer 2002 198,333 255,400 20,100 15,614
and Chief Lending Officer 2001 184,583 100,000 42,800 11,900
Mark A. Turner 2003 205,000 270,000 7,700 18,000
Chief Operating Officer, 2002 198,333 334,400 22,900 14,741
Chief Financial Officer 2001 181,307 125,000 21,000 11,900
and Secretary
Deborah A. Powell 2003 147,500 90,000 1,750 18,658
Executive Vice President, 2002 144,167 66,700 4,300 15,261
Director, Human Resources 2001 140,000 44,100 7,700 6,690
(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.
15
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 2003.
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 12,650 13.8 % $43.70 12/18/2013 $ 351,262 $886,771
Karl L. Johnston 5,350 5.8 43.70 12/18/2013 148,557 375,037
Mark A. Turner 7,700 8.4 43.70 12/18/2013 213,812 539,773
Deborah A. Powell 1,750 1.9 43.70 12/18/2013 48,594 122,676
(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.
(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.
16
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
Shares Number of Securities Underlying Unexercised
Acquired Value Underlying Unexercised In-the Money Options
On Exercise Realized Options at Fiscal Year End at Fiscal Year End (1)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- --- --- ----------- ------------- ----------- -------------
Marvin N. Schoenhals 130,561 $3,917,292 157,494 138,200 $4,640,714 $3,636,601
Karl L. Johnston -- -- 63,480 57,570 1,939,433 1,458,609
Mark A. Turner -- -- 80,284 65,416 2,474,604 1,610,271
Deborah A. Powell 5,820 193,049 12,580 19,450 388,020 501,870
(1) Based on the closing price of $44.85 per share as reported for the Common
Stock on the Nasdaq National Market on December 31, 2003 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
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
17
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.
Based on salary levels at December 31, 2003, 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
$412,000, Mr. Turner $412,000 and Ms Powell $296,000.
BUSINESS RELATIONSHIPS AND RELATED TRANSACTIONS
During 2003 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 2003. The Company expects Mr. Preston to continue
such representation in fiscal year 2004.
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 2003. 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.
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, 2004. 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, 2003 and 2002 were $233,000 and $387,000,
respectively. These fees also included the audit of the Company's former
subsidiary, Wilmington Finance, Inc.
18
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, 2003 and
2002 were $55,000 and $32,000, 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, 2003 and 2002 were $50,000 and $191,000,
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, 2003 and 2002, were $11,000 and $39,000, respectively,
and consisted of services related to a reverse mortgage matter and the review of
financials in connection with the sale of a non-wholly owned subsidiary.
The Audit Committee has determined that the non-audit services
performed by its principal accountants during 2003 were compatible with
maintaining the principal accountants' independence.
It is the Audit Committee's policy to pre-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 pre-approval of the Chairman of
the Audit Committee. 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 pre-approval of the full Audit Committee.
No services were approved pursuant to the de minimus exception of the
Sarbanes-Oxley Act of 2002. All of the services listed above for 2003 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 Two.
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
19
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 2003 the Reporting Persons, with the exception of one
untimely filing on Form 4 by each of Mr. Cheleden and Mr. Schoenhals, 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 2005 ANNUAL MEETING
It is anticipated that the proxy statement and form of proxy for the
2005 Annual Meeting of Stockholders will be mailed during March of 2005.
Stockholder proposals intended to be presented at the 2005 annual meeting of
stockholders of WSFS Financial Corporation must be received by November 22,
2004, 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.
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
20
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 for the fiscal year ended December 31,
2003, 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, 2003 (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 also 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.
21
APPENDIX A
WSFS FINANCIAL CORPORATION
AUDIT COMMITTEE CHARTER
WSFS Financial Corporation has created a Committee of the Board of Directors to
be known as the AUDIT COMMITTEE with its goals and objectives, composition, term
of office, and duties and responsibilities as follows:
GOALS AND OBJECTIVES
--------------------
The primary goal of the Committee will be to assist the Board of Directors in
fulfilling its fiduciary responsibilities relating to corporate accounting and
reporting practices of the holding company, WSFS, and all related subsidiaries.
In addition, the Committee will:
o Oversee and appraise the quality of the audit effort of the Company's
Internal Audit function and that of its independent auditors;
o Maintain, by scheduling regular meetings, open lines of communication among
the Board, internal auditors, and the independent accountants to exchange
views and information as well as confirm their respective authority and
responsibilities; and
o Determine the adequacy of the Company's administrative, operating, and
internal accounting controls and evaluate adherence.
COMPOSITION
-----------
The Board of Directors shall annually elect the membership of the Audit
Committee, upon the recommendation of the Chairman, which will be comprised of a
minimum of three outside directors, each of whom will be independent of senior
management and operating executives of the holding company, WSFS, and all
related subsidiaries, and free from any relationships which might in the opinion
of the Board of Directors be construed as a conflict of interest. One of the
members shall be elected chairperson of the Committee by the members of the
Committee.
o Each member of the Audit Committee must be "Independent". An Audit
Committee member is not allowed to accept any consulting, advisory or other
compensatory fee, either directly or indirectly, from the company or an
affiliate of the company, other than in the member's capacity generally as
a director, including as a member of any Board committee.
o The Audit Committee must have at least one member, who is considered a
"financial expert" as defined by the SEC or appropriate regulatory agency.
The company will make the required public disclosures regarding the
"financial expert".
TERM OF MEMBERSHIP
------------------
Each member of the Committee shall serve a term of one continuous year after
election. The chairperson shall be elected annually by the members of the
Committee, and no chairperson shall
A1
serve more than three consecutive years as chairperson of the Audit Committee.
Exceptions to the above noted terms will require a formal approval process by
the Board of Directors.
MEETINGS
--------
The Committee will hold at least eight regular meetings each year. Four meetings
will be held to review the Corporation's earnings and financial statements prior
to their release to the public. Four additional meetings will be held to review
the reports of the Internal Audit and Loan Review Departments, as well as other
auditing or loan review matters.
A meeting quorum requires that three Committee members be present at the
meeting. Items requiring the approval of the Committee will require a majority
vote by the Committee.
DUTIES AND RESPONSIBILITIES
---------------------------
The Committee will hold its regular meetings each year, and such additional
meetings as the Chairperson of the Committee shall require in order to meet the
following duties:
o Review the annual audited financial statements with management,
including major issues regarding accounting and auditing principles
and practices as well as the adequacy of internal controls that could
significantly affect the Company's financial statements;
o Review an analysis prepared by management and the independent auditor
of significant financial reporting issues and judgments made in
connection with the preparation of the Company's financial statements;
o Meet periodically with management to review the Company's major
financial risk exposures and the steps management has taken to monitor
and control such exposures;
o Review with management the Company's quarterly financial statements
prior to the release of quarterly earnings;
o Review and reassess the adequacy of this Charter annually and submit
it to the Board for approval;
o Responsible for the appointment, compensation, retention and oversight
of the work of the independent public accounting firm engaged for the
purpose of preparing or issuing an audit report or related work or
performing other similar services for the company, and each such
independent public accounting firm must report directly to the Audit
Committee. Recommend to the full Board the appointment of the
independent accountant for the coming year;
o Pre-approve all audit and non-audit services being provided by the
independent accountants in accordance with the Audit Committee
Pre-Approval Policy (a copy of this policy is attached). The company
will make the required public disclosures regarding the pre-approval
policies and procedures.
A2
o Monitor the independence of the public accounting firm. This
monitoring should include:
o Prohibiting certain partners on the audit engagement team from
providing audit services to the company for more than five or
seven consecutive years, depending on the partner's involvement
in the audit;
o Prohibiting an accounting firm from auditing the company's
financial statements if certain members of senior management
(i.e., CEO, CFO, Controller, etc.) of the company had been
members of the accounting firm's audit engagement team within the
one-year period preceding the commencement of audit procedures;
and
o Reviewing that an audit partner's receipt of compensation based on the
sale of engagements to the Company for services other than audit,
review, and attest services would impair the accountant's
independence.
o Ensure that members of the Committee have unrestricted access to the
independent accountants (without management present) to review and
discuss Corporate financial or other matters at such times and under
such circumstances as the Committee may deem necessary or appropriate;
o Approve the scope of external audit services; review adjustments
recommended by the independent public accountant and address
disagreements between the independent public accountant and
management; review documents required by this part, and meet with
independent public accountants (without management present) prior to
the filing of reports upon completion of the audit services;
o Ensure that an external audit is conducted in compliance with
statutory requirements;
o Review and approve the audit plan of the independent accountants;
o Review and approve the audit plan of the Internal Audit Department;
o Oversee the internal audit function, approve the selection,
compensation, and termination of internal auditors; approve the scope
of internal audits to assure regular testing of the systems and
controls associated with preparing financial reports, complying with
laws and regulations, and preventing management from overriding the
internal control system or compromising the control environment.
o Evaluate the effectiveness of both the internal and external audit
effort through regular meetings with each respective group;
o Determine that no management restrictions are being placed upon either
the internal or external auditors;
A3
o Review the adequacy of internal controls and management's handling of
identified material inadequacies and reportable conditions in the
internal controls over financial reporting and compliance with laws
and regulations;
o Evaluate the adequacy of the Company's internal accounting control
system by review of written reports from the internal and external
auditors, and monitor management's response and actions to correct any
noted deficiencies;
o Establish procedures for the receipt, retention and treatment of
complaints regarding accounting, internal controls or auditing
matters, including procedures for the confidential, anonymous
submission by Associates of the company of concerns regarding
questionable accounting or auditing matters;
o Ensure compliance with all applicable statutes and regulations setting
forth duties, responsibilities and obligations for Audit Committees
contained in the FDIC Improvement ACT (FDICIA) of 1991 and the
Securities and Exchange Commission (SEC) - Blue Ribbon Committee
Recommendations on Improving the Effectiveness of Audit Committees;
o Ensure that there are no members of the Committee who are not
independent as required by applicable regulation;
o Ensure that members of the Committee have the expertise required by
applicable regulation; that the Committee has the authority to engage
independent counsel and other advisors, as it determines necessary to
carry out its duties. The company must provide appropriate funding to
pay the independent counsel or advisors, as well as the independent
accountants;
o Review all regulatory reports submitted to the Company and monitor
management's response to them;
o Require periodic reports from management, the independent accountants,
and internal auditors on any significant proposed regulatory,
accounting, or reporting issue to assess the potential impact upon the
Company's financial reporting process;
o Receive periodic reports from the independent auditor regarding the
auditor's independence, discuss such reports with the auditor,
consider whether the provision of non-audit services is compatible
with maintaining the auditor's independence and, if so determined by
the Audit Committee, recommend that the Board take appropriate action
to satisfy itself of the independence of the auditor;
o Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit;
o Review with the independent auditor any management letter provided by
the auditor and the Company's response to that letter;
A4
o Obtain from the independent auditor assurance that Section 10A of the
Securities Exchange Act of 1934 (i.e., discovery and reporting of
illegal acts) has not been implicated;
o Review and approve all significant accounting changes;
o Review and approve the report required by the rules of the Securities
and Exchange Commission to be included in the Company's annual proxy
statement;
o Identify and direct any special projects or investigations deemed
necessary;
o Offer to meet with the Chief Financial Officer, the Senior Internal
Auditing Executive and the independent auditor in separate executive
sessions at any time, upon their request;
o Shall maintain minutes and other relevant records of their meetings
and activities. Such minutes shall be made available for review by the
FDIC, SEC and the appropriate federal banking agency.
o Submit minutes of all meetings of the Audit Committee to the Board of
Directors of the Corporation.
CERTIFICATIONS
--------------
Management must report to the Audit Committee that the quarterly and annual
certifications required by Section 302 and the annual internal control report
required by Section 404 (when effective) of the Sarbanes-Oxley Act have been
completed, and any material concerns or control deficiencies have been reported
to the Committee.
In carrying out their responsibilities, the Audit Committee believes its
policies and procedures should remain flexible in order that it be able to react
to changing conditions and the environment, and to assure the directors and
shareholders that the corporate accounting and reporting practices of the
Corporation are in accordance with all requirements and are of the highest
quality. While the Audit Committee has the responsibilities and powers set forth
in this Charter, it is the responsibility of management and the independent
auditor to determine that the Company's financial statements are complete and
accurate and are in accordance with Generally Accepted Accounting Principles
(GAAP).
A5
This Proxy is Solicited on Behalf of the Board of Directors
WSFS FINANCIAL CORPORATION
for the
2004 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 22, 2004 at 4:00 p.m., or at any
adjournments thereof, as follows:
The Board of Directors recommends a vote FOR all nominees and items listed
below.
WITHHOLD AUTHORITY
to vote for all
FOR nominees listed at right Nominees:
1. Election of [ ] [ ] John F. Downey
Directors Thomas P. Preston
Marvin N. Shoenhals
R. Ted Weschler
Each for a three year term
expiring 2007
(To withhold authority to vote any individual nominee write
the nominee's name on the line provided below).
---------------------------------------
2. Ratification of the appointment of KPMG, LLP as independent auditors for
the fiscal year ending December 31, 2004.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
The proxy is revocable and, when properly executed will be voted in the
manner directed hereby by the undersigned. If no directions are made, this
signed proxy will be voted FOR each of the nominees and the other proposal.
The undersigned, by executing and delivering this proxy, revokes the
authority given with respect to any earlier dated proxy submitted by the
undersigned.
Unless contrary direction is given, the right is reserved in the sole
discretion of the Board of Directors to distribute votes among some or all
of the above nominees in a manner other than equally so as to elect as
directors the maximum possible number of such nominees.
In their discretion the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders, a Proxy Statement and Annual Report of WSFS Financial
Corporation.
Please sign exactly as name appears hereon. If signing as
attorney, executor, administrator, trustee or guardian, please
indicate the capacity in which you are acting. Proxies
executed by corporations should be signed by a duly authorized
officer.
SIGNATURE(S) Date
------------------------- ------------------
PLEASE SIGN, DATE AND RETURN
PROMPTLY USING THE ENCLOSED ENVELOPE.