WHG BANCSHARES CORP
DEF 14A, 1998-12-18
SAVINGS INSTITUTION, FEDERALLY CHARTERED
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                                  SCHEDULE 14A
                                 (Rule 14a-101)

                     INFORMATION REQUIRED IN PROXY STATEMENT

                            SCHEDULE 14A INFORMATION
           Proxy Statement Pursuant to Section 14(a) of the Securities
                      Exchange Act of 1934 (Amendment No. )

Filed by the registrant [X]
Filed by a party other than the registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement      [ ] Confidential, for use of the Commission
                                         Only (as permitted by Rule 14a 6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to ss. 240.14a-11(c) or ss. 240.14a-12

                           WHG Bancshares Corporation
- --------------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)


- --------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):
  [X] No fee required
  [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

     (1)  Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
     (2)  Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
     (3)  Per unit  price  or other  underlying  value of  transaction  computed
          pursuant to Exchange Act Rule 0-11. (set forth the amount on which the
          filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
     (4)  Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
     (5)  Total fee paid:
- --------------------------------------------------------------------------------

  [ ]   Fee paid previously with preliminary materials.

  [ ] Check box if any part of the fee is offset as  provided  by  Exchange  Act
Rule  0-11(a)(2)  and identify the filing for which the  offsetting fee was paid
previously.  Identify the previous filing by registration  statement  number, or
the Form or Schedule and the date of its filing.

     (1)  Amount previously paid:
- --------------------------------------------------------------------------------
     (2)  Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
     (3)  Filing Party:
- --------------------------------------------------------------------------------
     (4)  Date Filed:
- --------------------------------------------------------------------------------

<PAGE>


                                     [LOGO]

                     [WHG Bancshares Corporation Letterhead]









December 18, 1998

Dear Fellow Stockholder:

         On behalf of the Board of Directors and  management  of WHG  Bancshares
Corporation,  (the  "Company"),  I  cordially  invite  you to attend  the Annual
Meeting of Stockholders to be held at the Holiday Inn, 2004  Greenspring  Drive,
Timonium,  Maryland,  on January 19, 1999, at 10:00 a.m. The attached  Notice of
Annual Meeting and Proxy Statement describe the formal business to be transacted
at the Annual Meeting. During the Annual Meeting, the Chairman of the Board will
report on the  operations of the Company.  Directors and Officers of the Company
will be present to respond to any questions stockholders may have.

         The matters to be considered by  stockholders at the Annual Meeting are
described in the accompanying Notice of Annual Meeting and Proxy Statement.  The
Board  of  Directors  of the  Company  has  determined  that the  matters  to be
considered  at the Annual  Meeting are in the best  interests of the Company and
its stockholders. For the reasons set forth in the Proxy Statement, the Board of
Directors unanimously recommends a vote "FOR" each matter to be considered.

         WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL  MEETING,  PLEASE SIGN AND
DATE THE  ENCLOSED  PROXY  CARD AND RETURN IT IN THE  ACCOMPANYING  POSTAGE-PAID
RETURN  ENVELOPE AS PROMPTLY AS POSSIBLE.  This will not prevent you from voting
in person at the Annual  Meeting,  but will  assure that your vote is counted if
you are unable to attend the Annual Meeting. YOUR VOTE IS VERY IMPORTANT.

                                           Sincerely,

                                           /s/ Peggy J. Stewart  
                                           -------------------------------------
                                           Peggy J. Stewart
                                           President and Chief Executive Officer



              1505 York Road o Lutherville, Maryland o 21093-5651
                      Phone: 410-583-8700 FAX 410-583-1863
<PAGE>

- --------------------------------------------------------------------------------
                           WHG BANCSHARES CORPORATION
                                 1505 YORK ROAD
                           LUTHERVILLE, MARYLAND 21093
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                         TO BE HELD ON JANUARY 19, 1999
- --------------------------------------------------------------------------------

NOTICE IS HEREBY GIVEN that the Annual Meeting of  Stockholders  (the "Meeting")
of WHG Bancshares Corporation ("the Company"),  will be held at the Holiday Inn,
2004 Greenspring Drive, Timonium, Maryland, on January 19, 1999, at 10:00 a.m.

The Meeting is for the  purpose of  considering  and acting  upon the  following
matters:

     1.   The election of three directors of the Company;

     2.   Such other  matters as may  properly  come  before the  Meeting or any
          adjournments thereof.

         The  Board of  Directors  is not aware of any  other  business  to come
before the Meeting.  Any action may be taken on the  foregoing  proposals at the
Meeting  on the date  specified  above or on any  date or  dates  to  which,  by
original or later  adjournment,  the Meeting may be adjourned.  Stockholders  of
record at the close of  business  on  December  4,  1998,  are the  stockholders
entitled to vote at the Meeting and any adjournments thereof.

EACH  STOCKHOLDER,  WHETHER  OR NOT HE OR SHE PLANS TO ATTEND  THE  MEETING,  IS
REQUESTED  TO SIGN,  DATE AND RETURN THE  ENCLOSED  PROXY  WITHOUT  DELAY IN THE
ENCLOSED  POSTAGE-PAID  ENVELOPE.  ANY  PROXY  GIVEN BY THE  STOCKHOLDER  MAY BE
REVOKED BY FILING WITH THE  SECRETARY OF THE COMPANY A WRITTEN  REVOCATION  OR A
DULY EXECUTED PROXY BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING
MAY REVOKE  HIS PROXY AND VOTE  PERSONALLY  ON EACH  MATTER  BROUGHT  BEFORE THE
MEETING.  HOWEVER,  IF YOU ARE A STOCKHOLDER  WHOSE SHARES ARE NOT REGISTERED IN
YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO
VOTE PERSONALLY AT THE MEETING.

                                              BY ORDER OF THE BOARD OF DIRECTORS



                                              /s/Diana L. Rohrback
                                              ----------------------------------
                                              Diana L. Rohrback
                                              Corporate Secretary
Lutherville, Maryland
December 18, 1998

- --------------------------------------------------------------------------------
IMPORTANT:  THE PROMPT  RETURN OF PROXIES  WILL SAVE THE  COMPANY THE EXPENSE OF
FURTHER  REQUESTS  FOR  PROXIES  IN ORDER TO INSURE A QUORUM AT THE  MEETING.  A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
                                 PROXY STATEMENT
                                       OF
                           WHG BANCSHARES CORPORATION
                                 1505 YORK ROAD
                           LUTHERVILLE, MARYLAND 21093
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                         ANNUAL MEETING OF STOCKHOLDERS
                                JANUARY 19, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                                     GENERAL
- --------------------------------------------------------------------------------

         This Proxy Statement is furnished in connection  with the  solicitation
of  proxies  by the  Board  of  Directors  of WHG  Bancshares  Corporation  (the
"Company") to be used at the Annual Meeting of Stockholders of the Company which
will be held at the Holiday Inn, 2004 Greenspring Drive, Timonium,  Maryland, on
January 19, 1999, 10:00 a.m. local time (the "Meeting"). The accompanying Notice
of Annual  Meeting of  Stockholders  and this Proxy  Statement  are being  first
mailed to stockholders on or about December 18, 1998.

         At the  Meeting,  stockholders  will  consider  and  vote  upon (i) the
election of three  directors  and (ii) such other  matters as may properly  come
before the Meeting or any  adjournments  thereof.  The Board of Directors of the
Company (the "Board" or the "Board of Directors") knows of no additional matters
that will be presented for  consideration at the Meeting.  Execution of a proxy,
however,  confers on the designated proxy holder discretionary authority to vote
the shares  represented by such proxy in accordance  with their best judgment on
such other  business,  if any,  that may properly come before the Meeting or any
adjournment thereof.


- --------------------------------------------------------------------------------
                       VOTING AND REVOCABILITY OF PROXIES
- --------------------------------------------------------------------------------

         Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the  Meeting  and all  adjournments  thereof.  Proxies may be revoked by written
notice to the  Secretary of the Company at the address above or by the filing of
a later dated proxy prior to a vote being taken on a particular  proposal at the
Meeting.  A proxy will not be voted if a  stockholder  attends  the  Meeting and
votes in person.  Proxies  solicited by the Board of Directors  will be voted in
accordance  with  the  directions  given  therein.  Where  no  instructions  are
indicated,  signed  proxies will be voted "FOR" the nominees for  directors  set
forth below.  The proxy  confers  discretionary  authority on the persons  named
therein to vote with respect to the  election of any person as a director  where
the  nominee is unable to serve,  or for good cause will not serve,  and matters
incident to the conduct of the Meeting.


- --------------------------------------------------------------------------------
                 VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
- --------------------------------------------------------------------------------

         Stockholders  of record as of the close of business on December 4, 1998
(the "Record Date"),  are entitled to one vote for each share of common stock of
the Company (the "Common  Stock") then held. As of the Record Date,  the Company
had 1,385,780 shares of Common Stock issued and outstanding.

         The   articles  of   incorporation   of  the  Company   ("Articles   of
Incorporation")  provide  that  in no  event  shall  any  record  owner  of  any
outstanding Common Stock which is beneficially owned, directly or indirectly, by
a person who beneficially  owns in excess of 10% of the then outstanding  shares
of Common Stock (the  "Limit") be entitled or permitted to any vote with respect
to the shares held in excess


<PAGE>



of the Limit.  Beneficial  ownership is determined pursuant to the definition in
the Articles of  Incorporation  and includes shares  beneficially  owned by such
person  or any of his or her  affiliates  (as  such  terms  are  defined  in the
Articles of Incorporation), or which such person or any of his or her affiliates
has the right to acquire upon the exercise of  conversion  rights or options and
shares as to which such  person or any of his or her  affiliates  or  associates
have or share  investment  or voting  power,  but  neither  any  employee  stock
ownership or similar plan of the Company or any subsidiary, nor any trustee with
respect  thereto  or any  affiliate  of such  trustee  (solely by reason of such
capacity of such  trustee),  shall be deemed,  for  purposes of the  Articles of
Incorporation, to beneficially own any Common Stock held under any such plan.

         The  presence  in  person  or by  proxy of at  least  one-third  of the
outstanding  shares of Common  Stock  entitled  to vote (after  subtracting  any
shares held in excess of the Limit) is necessary  to  constitute a quorum at the
Meeting.  With respect to any matter, any shares for which a broker indicates on
the proxy that it does not have  discretionary  authority  as to such  shares to
vote on such matter (the  "Broker  Non-Votes")  will be  considered  present for
purposes of determining  whether a quorum is present. In the event there are not
sufficient  votes  for a quorum or to ratify  any  proposals  at the time of the
Meeting,   the  Meeting  may  be  adjourned  in  order  to  permit  the  further
solicitation of proxies.

         As to the election of directors  (Proposal I), 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.

         Unless otherwise required by law, all 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.

         Persons  and  groups  owning in excess  of 5% of the  Common  Stock are
required  to file  certain  reports  regarding  such  ownership  pursuant to the
Securities  Exchange Act of 1934,  as amended (the "1934  Act").  The  following
table sets forth, as of the Record Date,  persons or groups who own more than 5%
of the Common Stock and the ownership of all executive officers and directors of
the Company as a group. Other than as noted below, management knows of no person
or group that owns more than 5% of the outstanding shares of Common Stock at the
Record Date.
<TABLE>
<CAPTION>

                                                            Amount and          Percent of Shares
                                                             Nature of            of Common Stock
Name and Address of Beneficial Owner                   Beneficial Ownership      Outstanding (%)
- ------------------------------------                   --------------------      ---------------
<S>                                                       <C>                     <C>  
Heritage Savings Bank, F.S.B.
Employee Stock Ownership Plan and Trust ("ESOP")
1505 York Road
Lutherville, Maryland 21093                                160,220 (1)             11.56

Jerome H. Davis and Susan B. Davis
c/o David H. Perlmutter, Esq.
200 Park Avenue, Suite 4515                                                         7.97
New York, New York  10166                                  110,448 (2)

All directors and officers of the Company as a group
(14 persons)                                               253,388 (3)             17.43

</TABLE>


                                       -2-

<PAGE>



- -------------------------------------
(1)  The Bank's Employee Stock Ownership Plan ("ESOP") purchased such shares for
     the exclusive benefit of ESOP participants with funds borrowed from a third
     party.  See "Proposal I Information  With Respect To Nominees For Director,
     Directors Whose Terms Continue, and Executive Officers."
(2)  Based upon an amended  Schedule 13D filed with the  Securities and Exchange
     Commission,  dated July 21, 1998,  for which shared voting and  dispositive
     power is shown with respect to such shares.
(3)  Includes  shares of Common  Stock  held  directly  as well as by spouses or
     minor children,  in trust and other indirect  ownership,  over which shares
     the  individuals  effectively  exercise sole voting and  investment  power,
     unless otherwise  indicated.  Includes options to purchase 67,610 shares of
     Common  Stock that may be  exercised  within 60 days of the Record  Date to
     purchase  shares of Common  Stock  under the 1996  Stock  Option  Plan (the
     "Option Plan").  Excludes 30,816 shares of Common Stock previously  awarded
     but presently subject to forfeiture held by the Management Stock Bonus Plan
     ("MSBP") and excludes 141,335 shares held by the ESOP (160,220 total shares
     minus 18,885  shares  allocated to executive  officers)  over which certain
     directors, as trustees to the ESOP and the MSBP, exercise shared voting and
     investment  power.  Such  individuals  disclaim  beneficial  ownership with
     respect to such  shares.  See  Proposal  I -  Information  With  Respect To
     Nominees  For  Director,  Directors  Whose Terms  Continue,  and  Executive
     Officers."


- --------------------------------------------------------------------------------
             SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- --------------------------------------------------------------------------------

         Section  16(a) of the 1934 Act  requires  the  Company's  officers  and
directors,  and persons who own more than ten  percent of the Common  Stock,  to
file reports of ownership and changes in ownership of the Common Stock, on Forms
3, 4 and 5, with the Securities and Exchange  Commission  ("SEC") and to provide
copies of those Forms 3, 4 and 5 to the Company. The Company is not aware of any
beneficial  owner of more than ten  percent  of its Common  Stock.  Based upon a
review  of the  copies  of  the  forms  furnished  to the  Company,  or  written
representations  from certain  reporting  persons that no Forms 5 were required,
the Company  believes that all Section 16(a) filing  requirements  applicable to
its  officers and  directors  were timely  complied  with during the 1998 fiscal
year.


- --------------------------------------------------------------------------------
         PROPOSAL I - INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR;
             DIRECTORS WHOSE TERMS CONTINUE; AND EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------

General

         The  Articles of  Incorporation  require that the Board of Directors be
divided into three classes,  each of which contains  approximately  one-third of
the members of the Board.  The directors are elected by the  stockholders of the
Company for staggered  three-year  terms, or until their  successors are elected
and qualified.  The Board of Directors currently consists of ten members.  Three
directors will be elected at the Meeting to serve for three-year terms and until
a successor has been elected and qualified.

         Philip W. Chase,  Jr.,  Edwin C. Muhly,  Jr. and Peggy J.  Stewart have
each been  nominated by the Board of Directors  to serve as  directors.  Messrs.
Chase and Muhly and Ms. Stewart are currently members of the Board and have each
been nominated for a three-year  term to expire in 2002. It is intended that the
persons  named in the proxies  solicited by the Board will vote for the election
of the named  nominees.  If any of the nominees are unable to serve,  the shares
represented  by all  valid  proxies  will  be  voted  for the  election  of such
substitute as the Board of Directors may recommend or the size of

                                       -3-

<PAGE>



the Board may be reduced to eliminate the vacancy. At this time, the Board knows
of no reason why the nominees might be unavailable to serve.

         The  following  table  sets  forth  information  with  respect  to  the
nominees,  their name, age, the year they first became a director of the Company
or the Bank,  the expiration  date of their current term as a director,  and the
number and  percentage of shares of the Common Stock  beneficially  owned.  Each
director of the Company is also a member of the Board of  Directors of the Bank.
Beneficial  ownership of executive  officers and directors of the Company,  as a
group, is shown under "Voting Securities and Principal Holders Thereof."
<TABLE>
<CAPTION>

                                                                              Shares of Common
                                                                             Stock Beneficially
                                        Age at       Year First    Current       Owned as of     Percent
                                       September     Elected or    Term to       December 4,      Owned
Name and Title                         30, 1998    Appointed (1)   Expire          1998 (2)        (%)
- --------------                         --------    -------------   ------         ---------       ----
<S>                                      <C>           <C>        <C>        <C>                 <C> 
BOARD NOMINEES FOR TERM TO EXPIRE IN 2002
Philip W. Chase, Jr.                      80            1947       1999       17,718   (3)(5)      1.28
Edwin C. Muhly, Jr.                       68            1976       1999       14,218   (3)(5)      1.02
Peggy J. Stewart                          62            1982       1999       54,866   (4)         3.91
                                                                   
DIRECTORS CONTINUING IN OFFICE                                     
Urban P. Francis, Jr.                     72            1981       2000       19,018   (3)(5)      1.37
John E. Lufburrow                         73            1966       2000       37,009   (4)         2.64
Hugh P. McCormick                         78            1947       2000       23,718   (3)(6)      1.71
Herbert A. Davis                          73            1953       2001       13,718   (3)(5)(6)   --(7)
D. Edward Lauterbach, Jr.                 74            1970       2001       13,718   (3)(5)      --(7)
August J. Seifert                         81            1981       2001        6,318   (3)         --(7)     
Herbert W. Spath                          78            1976       2001       28,718   (3)         2.07
                                                                
</TABLE>

- ------------------------------
(1)  Refers to the year the individual first became a director of the Bank.
(2)  Includes  shares of Common  Stock  held  directly  as well as by spouses or
     minor children,  in trust, and other indirect ownership,  over which shares
     the individuals  effectively  exercise sole or shared voting and investment
     power, unless otherwise indicated.
(3)  Excludes 1,458 restricted shares granted to such individual pursuant to the
     MSBP which remain subject to forfeiture and for which such  individual does
     not  exercise  voting  control,  and  will  continue  to  vest at a rate of
     one-fifth  of the total  initially  granted  (2,430)  each  year  beginning
     October 8, 1997.  Also  includes  2,745 shares (as adjusted for the special
     cash distribution)  which may be acquired pursuant to the exercise of stock
     options  which are  exercisable  within  60 days of the  Record  Date.  See
     "Director and Executive Officer Compensation - Director Compensation."
(4)  Excludes 7,776 restricted shares granted to such individual pursuant to the
     Management  Stock Bonus Plan which  remain  subject to  forfeiture  and for
     which such individual  does not exercise voting control,  and will continue
     to vest at a rate of one-fifth of the total initially granted (12,960) each
     year beginning  October 8, 1997.  Also includes  18,304 shares (as adjusted
     for the special cash  distribution)  which may be acquired  pursuant to the
     exercise  of stock  options  which  are  exercisable  within 60 days of the
     Record Date.  See "Director and Executive  Officer  Compensation - Director
     Compensation."

(footnotes continued on next page)

                                       -4-

<PAGE>



(5)  Excludes  160,220 shares of Common Stock held under the ESOP for which such
     individual  serves as either a member of the ESOP  committee  or as an ESOP
     trustee.  Such individual  disclaims  beneficial  ownership with respect to
     shares held in a fiduciary capacity. The ESOP purchased such shares for the
     exclusive  benefit of ESOP  participants  with funds  borrowed from a third
     party.  These  shares are held in a suspense  account and will be allocated
     among ESOP  participants  annually on the basis of compensation as the ESOP
     debt is repaid. The Board of Directors has appointed Messrs.  Chase, Davis,
     Lauterbach,  Francis, and Muhly to serve on the ESOP committee and to serve
     as ESOP  trustees.  The ESOP  committee  or the  Board  instructs  the ESOP
     trustee  regarding  investment of ESOP plan assets.  The ESOP trustees must
     vote  all  shares  allocated  to  participant  accounts  under  the ESOP as
     directed by ESOP  participants.  Unallocated shares and shares for which no
     timely  voting  direction is received will be voted by the ESOP trustees as
     directed by the Board or the ESOP committee.
(6)  Mr. Herbert A. Davis and Mr. Hugh P. McCormick are first cousins.  (7) Less
     than 1.0% of outstanding shares of Common Stock.

Executive Officers of the Company

         The following  individuals hold the executive offices in the Company as
set forth below.
<TABLE>
<CAPTION>

                            Age at
                           September
Name                       30, 1998       Positions Held With the Company
- ----                       --------       -------------------------------
<S>                          <C>         <C>                     
John E. Lufburrow             73          Chairman of the Board
Peggy J. Stewart              62          President, Chief Executive Officer and Director
Robin L. Taylor               38          Controller
Diana L. Rohrback             46          Vice President and Corporate Secretary
Daniel J. Gallagher           41          Vice President, Chief Financial Officer and
                                          Senior Compliance Officer
Nicholas C. Tracht            51          Vice President, Security Officer and Compliance Officer
</TABLE>

Biographical Information

         Set forth below is certain  information  with respect to the directors,
including director nominees and executive officers of the Company. All directors
and executive  officers have held their present  positions for five years unless
otherwise stated.

         Philip W.  Chase,  Jr. has served as a director of the Bank since 1947.
From 1980 to 1995, he was the Chairman of the Board of Chase,  Fitzgerald & Co.,
Inc., and he also served as President from 1967 to 1980.

         Herbert A. Davis has served as a director of the Bank since  1954.  Mr.
Davis  is the  President/Owner  of  Herbert  Davis  Associates,  a  real  estate
brokerage and development firm. Mr. Davis and Mr. McCormick are first cousins.

         Urban P. Francis,  Jr. has been a director of the Bank since 1981.  Mr.
Francis  retired from Urban Francis Inc., an electrical  contracting  company in
1994 and is currently the majority stockholder.


                                       -5-

<PAGE>



         D. Edward  Lauterbach,  Jr. has been a director of the Bank since 1970.
Mr.  Lauterbach  served as  President  of H.U.  Dove & Co.,  Inc.,  an insurance
company,  from  which he  retired  in 1991.  Mr.  Lauterbach  continues  to be a
consultant to H.U. Dove & Co., Inc.

         John E.  Lufburrow  joined the Bank in 1950, has been a director of the
Bank since 1966 and  currently  serves as Chairman of the Board.  Mr.  Lufburrow
preceded Ms. Stewart as President and Chief Executive Officer of the Bank.

         Hugh P.  McCormick  has been a  director  of the Bank  since  1947.  He
retired in 1982 from  McCormick & Co.,  Inc.,  a  manufacturer  and  importer of
spices  and  flavorings.  Prior  to  retirement,  Mr.  McCormick  served  as the
Corporate Assistant Secretary and the Director of a division of McCormick & Co.,
Inc. He also served as  President of a  subsidiary  of McCormick & Co.,  Inc. of
Baltimore County.  Mr. McCormick and Mr. Davis are first cousins.

         Edwin C.  Muhly,  Jr. has served as a director  of the Bank since 1976.
Mr. Muhly  retired in 1992 as President and Chief  Executive  Officer of Muhly's
Bakery, a retail bakery of which he held the majority stockholder interest.

         August J. Seifert has served as a director of the Bank since 1981.  Mr.
Seifert  holds a one-third  partnership  interest  and serves as Chairman of the
Board of Seifert's Florist Inc.

         Herbert W. Spath has been a director of the Bank since 1976.  Mr. Spath
was retained by the Bank as an advisor  from  January 1994 to December  1994 and
served as the  Bank's  Treasurer  from 1991 to 1993.  Prior to 1991,  Mr.  Spath
served as Executive  Vice  President and Treasurer of the Bank and was President
of Hallmark Savings and Loan Association from 1962 to 1976.

         Peggy J. Stewart was appointed Chief  Executive  Officer of the Bank in
1995 and has served as  President  since 1994.  From 1981 to 1994,  Ms.  Stewart
served as Senior Vice President and Corporate Secretary of the Bank. Ms. Stewart
also served as  Treasurer  of the Bank and was  appointed  in 1982 to the Bank's
Board of Directors. Ms. Stewart has been employed by the Bank since 1953.

         Set forth below is biographical information of those executive officers
of the Company who are not also directors of the Company:

         Daniel J.  Gallagher  has been employed by the Bank since January 1997.
Mr. Gallagher is Vice President,  Chief Financial Officer, and Senior Compliance
Officer.  From 1993 to 1997,  Mr.  Gallagher  was  employed  by Liberty  Federal
Savings and Loan Association in Baltimore,  Maryland,  during which time he also
served as president of that  institution.  From 1985 to 1993, Mr.  Gallagher was
employed by First National Bank of Maryland.

         Diana L.  Rohrback  has been  employed by the Bank for 29 years and has
served as an officer of the Bank since 1993.  Ms.  Rohrback is a Vice  President
and the Corporate Secretary for the Bank and has served as a branch manager.

         Robin L. Taylor has been an officer of the Bank since 1990 and has been
employed by the Bank for 20 years. Ms. Taylor is a certified  public  accountant
and currently serves as the Controller for the Bank.


                                       -6-

<PAGE>



         Nicholas C.  Tracht has been  employed by the Bank for 30 years and has
been an officer since 1985.  Currently,  he is a Vice  President of the Bank and
also serves as the Security Officer and a Compliance Officer.

Meetings and Committees of the Board of Directors

         The Board of Directors  conducts  its business  through the meetings of
the Board and through activities of its committees.  All committees act for both
the Company and the Bank.  During the fiscal year ended  September 30, 1998, the
Board of Directors held seventeen regular meetings and two special meetings.  No
director  attended  fewer  than  75% of the  total  meetings  of the  Boards  of
Directors and committees  during the time such director served during the fiscal
year ended September 30, 1998.

         The Company's  full Board of Directors  acts as a nominating  committee
("Nominating Committee") for selecting the management's nominees for election of
directors in accordance  with the Company's  Bylaws.  Nomination to the Board of
Directors made by  stockholders  must be made in writing to the Secretary of the
Company  and  received  by the  Company  not  less  than  60 days  prior  to the
anniversary date of the immediately  preceding annual meeting of stockholders of
the Company.  Notice to the Company of such  nominations  must  include  certain
information  required  pursuant  to  the  Company's  Bylaws.  This  non-standing
committee met once during the 1998 fiscal year.

         The Company does not have a standing Audit Committee.  The entire Board
of Directors  regularly  reviews the  financial  statements  of the Company.  In
addition,  the Board of Directors of the Bank meets  annually with the Company's
independent  accountants to review audit matters.  The Board of Directors of the
Bank met once during the 1998 fiscal year with the  independent  accountants for
this purpose.

         The  Compensation  and Benefits  Committee is comprised of non-employee
Directors, Chase, Davis, Lauterbach,  Francis and Muhly. This standing committee
establishes  the Bank's salary budget,  director and committee  member fees, and
employee  benefits  provided by the Bank for approval by the Board of Directors.
The Committee met once during the 1998 fiscal year.


- --------------------------------------------------------------------------------
                   DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
- --------------------------------------------------------------------------------

Director Compensation

         In the fiscal  year ended  1998,  each  non-employee  Director  and the
Chairman of the Board of Directors  of the Bank  received a monthly fee of $700,
regardless of attendance, and $300 for each meeting attended. Each member of the
Compensation and Benefits  Committee  received an additional $300 for attendance
at each meeting attended. Each non-employee director who is a member of the Loan
Committee  is each  paid  $50 for  the  first  loan  reviewed  and $25 for  each
additional loan reviewed.  For the fiscal year ended  September 30, 1998,  total
fees paid by the Bank to Directors were $129,250.

         During the 1997  fiscal  year,  non-employee  directors  each  received
restricted  stock  awards of 2,430  shares  under  the MSBP and 6,075  shares of
Common Stock under the Option Plan. Each employee director  received  restricted
stock awards of 12,960 under the MSBP and 40,501 under the Option Plan. The MSBP
and the stock  options  began  vesting at the rate of 20% per year on October 8,
1997. On September  10, 1998,  the Company paid a special cash  distribution  of
$3.00 per share. The stock options  previously  granted were adjusted to reflect
the special cash distribution. Non-employee

                                       -7-

<PAGE>



directors and employee  directors each received  additional stock options of 789
and  5,264,  respective.  See  "Executive  Compensation  - Summary  Compensation
Table," for  information  regarding the MSBP and stock  options  received by the
chief executive officer, who is also a member of the Board of Directors.

Executive Compensation

         Summary Compensation Table. The following table sets forth the cash and
non-cash  compensation  awarded to or earned by the chief executive officer.  No
other executive officer of either the Bank or the Company had a salary and bonus
during the two years ended  September  30,  1998,  that  exceeded  $100,000  for
services rendered in all capacities to the Bank or the Company.
<TABLE>
<CAPTION>


                              Annual Compensation                          Long Term Compensation
                              -------------------                                  Awards
                                                                                   ------
                                                                                         Securities
                                                                           Restricted    Underlying               All
Name and             Fiscal                             Other Annual          Stock       Options                Other
Principal Position    Year   Salary($)  Bonus($)(1)   Compensation(2)       Award($)        (#)           Compensation($)(5)
- ------------------    ----   ---------  -----------   ---------------       --------        ---           ------------------
<S>                  <C>     <C>        <C>              <C>             <C>           <C>                    <C>   
Peggy J. Stewart      1998    120,000    8,462             --                   --           --                 34,968
President and CEO     1997    110,000    8,077             --              174,150(3)    45,765(4)              43,758
</TABLE>

- ----------------------
(1)  Payment under the Incentive Bonus Plan.
(2)  For  perquisites  and other  personal  benefits,  aggregate  value does not
     exceed the lesser of $50,000 or 10% of the named executive  officer's total
     salary and bonuses for the year. For the periods  presented  there were (a)
     payments of above-market  preferential  earnings on deferred  compensation;
     (b) payments of earnings with respect to long term incentive plans prior to
     settlement or maturity; (c) tax payment reimbursements; or (d) preferential
     discounts on stock.
(3)  Represents  awards of 12,960  shares of Common  Stock  under the MSBP based
     upon the value of such stock of  $13.4375  per share as of the date of such
     award. Such stock awards become non-forfeitable at the rate of 2,592 shares
     per year  commencing on October 8, 1997.  Dividend  rights  associated with
     such stock are accrued and held in arrears to be paid at the time that such
     stock becomes  non-forfeitable.  At September 30, 1998, 7,776 shares with a
     market value of $90,396 at such date (based on the closing  price of Common
     Stock $11.625 at such date) remain unvested.
(4)  Represents  award of 36,613  options as of October 8, 1996, at $11.8916 and
     9,152  options as of December 9, 1996,  at $11.1726 per share.  Such awards
     were adjusted for the special cash distribution in fiscal 1998.
(5)  For fiscal years 1998 and 1997,  respectively,  represents an allocation of
     3,008  shares and 2,652  shares of Common  Stock under the ESOP (based upon
     the closing  price of the Common  Stock of $11.625 and $16.50 on  September
     30, 1998 and 1997, respectively.)

         Employment  Agreement.  The Bank entered into an  employment  agreement
with  Peggy  J.  Stewart,  President  and  CEO of the  Bank  ("Agreement").  The
Agreement  has a three year term.  Ms.  Stewart's  base  compensation  under the
Agreement is $120,000.  Under the  Agreement,  Ms.  Stewart's  employment may be
terminated by the Bank for "just cause" as defined in the Agreement. If the Bank
terminates  Ms.  Stewart  without just cause,  Ms. Stewart will be entitled to a
continuation  of her salary from the date of  termination  through the remaining
term of the Agreement,  but not less than one year's salary. In the event of the
termination  of employment in connection  with any change in control of the Bank
during  the term of the  Agreement,  Ms.  Stewart  will be paid in a lump sum an
amount  equal  to 2.99  times  the  five  year  average  of her  annual  taxable
compensation.  In the event of a change in control at September  30,  1998,  Ms.
Stewart  would  have  been  entitled  to a lump  sum  payment  of  approximately
$308,000.


                                       -8-

<PAGE>



         1996 Stock Option Plan. The Board of Directors  adopted the Option Plan
which was approved by stockholders on October 8, 1996. Such plan was amended and
ratified by  stockholders on January 20, 1998. The amendment to the plan did not
increase  the number of shares  reserved  for  issuance  under the option  plan.
Pursuant to the Option  Plan,  183,058  shares (as adjusted for the special cash
distribution)  of the Common Stock are reserved for issuance by the Company upon
exercise of stock  options  granted to officers,  directors and employees of the
Company and Bank from time to time under the Option Plan. No options to purchase
shares of Common Stock were granted in fiscal 1998.

         The following tables set forth additional  information concerning stock
options granted during the 1998 fiscal year.
<TABLE>
<CAPTION>

                     Aggregated Option/SAR Exercises in Last Fiscal Year, and FY-End Option/SAR Values
                     ---------------------------------------------------------------------------------

                                                        Number of Securities   
                                                       Underlying Unexercised        Value of Unexercised
                                                            Options/SARs             In-The-Money Options
                                                          at FY-End (#)(1)               at FY-End ($)
                                                          ----------------               -------------
                    Shares Acquired     Value
Name                on Exercise(#)    Realized ($)  Exercisable/Unexercisable    Exercisable/Unexercisable
- ----                -------------    -------------  -------------------------    -------------------------
<S>                     <C>            <C>                 <C>                         <C> 
Peggy J. Stewart         --            $   --              14,644 / 21,969                 -- / -- (2)
                         --            $   --               3,660 /  5,492              1,684 / 2,562(3)

</TABLE>

- ------------------------
(1)  No Stock Appreciation Rights (SARs) are authorized under the Option Plan.
(2)  Based  upon an  exercise  price of $11.89  per share (as  adjusted  for the
     special cash  distribution)  and estimated  price of $11.63 as of September
     30, 1998.
(3)  Based  upon an  exercise  price of $11.17  per share (as  adjusted  for the
     special cash  distribution)  and estimated  price of $11.63 as of September
     30, 1998.


- --------------------------------------------------------------------------------
                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------

         The Bank,  like many financial  institutions,  has followed a policy of
granting various types of loans to officers, directors, and employees. The loans
have been made in the ordinary course of business and on substantially  the same
terms, including interest rates and collateral,  as those prevailing at the time
for comparable transactions with the Bank's other customers,  and do not involve
more than the  normal  risk of  collectibility,  or  present  other  unfavorable
features.


- --------------------------------------------------------------------------------
                                  MISCELLANEOUS
- --------------------------------------------------------------------------------

         The Board of  Directors is not aware of any business to come before the
Meeting  other  than those  matters  described  above in this  proxy  statement.
However,  if any other matters  should  properly come before the Meeting,  it is
intended that proxies in the accompanying  form will be voted in respect thereof
in accordance with the judgment of the person or persons voting such proxies. If
the Company did not have notice of a matter on or before  November 21, 1998,  it
is  expected  that the persons  named in the  accompanying  proxy will  exercise
discretionary authority when voting on that matter.


                                       -9-

<PAGE>



         The  cost of  soliciting  proxies  will be borne  by the  Company.  The
Company will  reimburse  brokerage  firms and other  custodians,  nominees,  and
fiduciaries for reasonable  expenses  incurred by them in sending proxy material
to the beneficial  owners of Common Stock. In addition to solicitations by mail,
directors,  officers,  and regular  employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation.

         The Company's 1998 Annual Report to Stockholders has been mailed to all
stockholders  of record  as of the  Record  Date.  Any  stockholder  who has not
received  a copy of the  annual  report  may  obtain  a copy by  writing  to the
Secretary of the Company.


- --------------------------------------------------------------------------------
                              STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------

         In order to be eligible for inclusion in the Company's  proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the  Company's  executive  offices at
1505 York Road, Lutherville, Maryland 21093, no later than August 20, 1999.

         In the event the Company  receives notice of a stockholder  proposal to
take action at next year's annual meeting of stockholders  that is not submitted
for inclusion in the Company's proxy material, or is submitted for inclusion but
is properly  excluded  from the proxy  material,  the persons named in the proxy
sent by the Company to its  stockholders  intend to exercise their discretion to
vote on the  stockholder  proposal  in  accordance  with their best  judgment if
notice of the proposal is not received at the Company's  main office by November
20, 1999.


- --------------------------------------------------------------------------------
                                   FORM 10-KSB
- --------------------------------------------------------------------------------

A COPY OF THE  COMPANY'S  ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1998,  WILL BE FURNISHED  WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY,  WHG BANCSHARES  CORPORATION,
1505 YORK ROAD, LUTHERVILLE, MARYLAND 21093.

                                              BY ORDER OF THE BOARD OF DIRECTORS

                                              /s/ Diana L. Rohrback
                                              ----------------------------------
                                              Diana L. Rohrback
                                              Corporate Secretary
Lutherville, Maryland
December 18, 1998


                                      -10-

<PAGE>
Appendix A




- --------------------------------------------------------------------------------
                           WHG BANCSHARES CORPORATION
                                 1505 YORK ROAD
                           LUTHERVILLE, MARYLAND 21093
- --------------------------------------------------------------------------------
                         ANNUAL MEETING OF STOCKHOLDERS
                                JANUARY 19, 1999
- --------------------------------------------------------------------------------

         The  undersigned   hereby  appoints  the  Board  of  Directors  of  WHG
Bancshares  Corporation  (the "Company"),  or its designee,  with full powers of
substitution,  to act as attorneys and proxies for the undersigned,  to vote all
shares of Common Stock of the Company which the  undersigned is entitled to vote
at the Annual Meeting of Stockholders (the "Meeting"), to be held at the Holiday
Inn, 2004 Greenspring  Drive,  Timonium,  Maryland on January 19, 1999, at 10:00
a.m. and at any and all adjournments thereof, in the following manner:

                                                     FOR            WITHHELD

1. The election as directors of the nominees
   listed below with terms to expire in 2002:        |_|              |_|

   Philip W. Chase, Jr.
   Edwin C. Muhly, Jr.
   Peggy J. Stewart


(Instruction:  To withhold authority to vote
for any individual nominee, write that nominee's name
in the space provided below)

          -----------------------------------------------------------           

          The Board of  Directors  recommends  a vote  "FOR"  the  above  listed
proposition.


- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY  WILL BE VOTED  FOR THE  PROPOSITION  STATED.  IF ANY  OTHER  BUSINESS  IS
PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY
IN THEIR BEST JUDGMENT.  AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO
OTHER BUSINESS TO BE PRESENTED AT THE MEETING.                              
- --------------------------------------------------------------------------------
                                      -11-
<PAGE>



                THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

          Should the undersigned be present and elect to vote at the Meeting, or
at any  adjournments  thereof,  and after  notification  to the Secretary of the
Company at the Meeting of the  stockholder's  decision to terminate  this proxy,
the power of said  attorneys  and proxies shall be deemed  terminated  and of no
further force and effect. The undersigned may also revoke this proxy by filing a
subsequently  dated proxy or by written  notification  to the  Secretary  of the
Company of his or her decision to terminate this proxy.

          The  undersigned  acknowledges  receipt from the Company  prior to the
execution of this proxy of a Notice of Annual Meeting of  Stockholders,  a Proxy
Statement dated December 18, 1998, and the 1998 Annual Report to Stockholders.



Dated:                              , 199
      -----------------------------      --


- ------------------------------------        ------------------------------------
PRINT NAME OF STOCKHOLDER                   PRINT NAME OF STOCKHOLDER


- ------------------------------------        ------------------------------------
SIGNATURE OF STOCKHOLDER                    SIGNATURE OF STOCKHOLDER


Please  sign  exactly  as your name  appears  on this  proxy.  When  signing  as
attorney, executor,  administrator,  trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.



- --------------------------------------------------------------------------------
PLEASE  COMPLETE,  DATE,  SIGN,  AND MAIL THIS PROXY  PROMPTLY  IN THE  ENCLOSED
POSTAGE-PREPAID ENVELOPE.
- --------------------------------------------------------------------------------



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