<PAGE> 1
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 Rule 14a-11(c) or Rule 14a-12
WILMINGTON TRUST 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)(4) 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> 2
[WILIMINGTON TRUST LOGO]
NOTICE OF ANNUAL SHAREHOLDERS' MEETING
AND
PROXY STATEMENT
Dear Wilmington Trust Shareholder:
On Thursday, May 20, 1999, Wilmington Trust Corporation will hold its 1999
Annual Shareholders' Meeting at the Wilmington Trust Plaza, Mezzanine Level, 301
West Eleventh Street, Wilmington, Delaware. The meeting will begin at 10:00 a.m.
Only shareholders who owned stock at the close of business on March 22,
1999 can vote at the meeting or any adjournment. At the meeting, we will:
1. Elect five directors;
2. Approve our 1999 Long-term Incentive Plan;
3. Approve our Executive Incentive Plan;
4. Ratify the appointment of our independent auditors for 1999; and
5. Attend to other business properly presented at the meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE FOUR
PROPOSALS DESCRIBED IN THIS PROXY STATEMENT.
At the meeting, we also will report on our 1998 business results and other
matters of interest to shareholders.
We are enclosing with this proxy statement a copy of our 1998 Annual Report
to Shareholders. The approximate date this proxy statement and card(s) are being
mailed is March 30, 1999.
By Order of the Board of Directors
/s/ Ted T. Cecala
Ted T. Cecala,
Chairman of the Board and
Chief Executive Officer
March 22, 1999
\
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
Questions and Answers....................................... 1
Proposals You May Vote On................................... 3
Nominees for the Board of Directors......................... 4
Committees of the Board of Directors........................ 7
Directors' Compensation..................................... 8
Executive Officers Who are Not Directors.................... 8
Directors' and Executive Officers' Ownership of Wilmington
Trust Stock............................................... 10
Wilmington Trust Stock Held in A Fiduciary Capacity......... 11
Executive Compensation...................................... 12
Compensation Committee Interlocks and Insider
Participation............................................. 20
Section 16(a) Beneficial Ownership Reporting Compliance..... 20
Transactions with Management................................ 20
Approval of the 1999 Long-term Incentive Plan............... 21
Approval of the Executive Incentive Plan.................... 24
Availability of Form 10-K................................... 26
</TABLE>
i
<PAGE> 4
QUESTIONS AND ANSWERS
1. Q: WHAT MAY I VOTE ON?
A: - The election of nominees to serve on our Board of Directors;
- The approval of our 1999 Long-term Incentive Plan;
- The approval of our Executive Incentive Plan; and
- The ratification of the appointment of our independent auditors for
1999.
2. Q: HOW DOES THE BOARD RECOMMEND I VOTE ON THE PROPOSALS?
A: Your Board recommends a vote FOR each of the nominees, FOR the approval
of our 1999 Long-term Incentive Plan and Executive Incentive Plan and
FOR the appointment of Ernst & Young LLP as our independent auditors
for 1999.
3. Q WHO IS ENTITLED TO VOTE?
A: Shareholders as of the close of business on March 22, 1999 (the
"Record Date") are entitled to vote at the Annual Meeting.
4. Q: HOW DO I VOTE?
A: Please sign and date each proxy card you receive and return it in the
prepaid envelope. If you return your signed proxy card but do not mark
the boxes showing how you wish to vote, your shares will be voted FOR
the four proposals. You have the right to revoke your proxy at any time
before the meeting by:
- notifying our Secretary;
- voting in person; or
- returning a later-dated proxy card.
5. Q: WHO WILL COUNT THE VOTE?
A. Norwest Bank Minnesota, National Association will count the votes.
Messrs. James C. Stewart and Philip C. Collins will act as inspectors
of election.
6. Q: HOW MANY SHARES CAN VOTE?
A: As of the Record Date, 33,216,980 shares of our common stock were
issued and outstanding. Every shareholder of our common stock as of the
Record Date is entitled to one vote for each share held.
7. Q: WHAT IS A "QUORUM"?
A. A "quorum" is a majority of the outstanding shares. They may be present
at the meeting or represented by proxy. There must be a quorum for the
meeting to be held. A proposal, other than for election of directors,
must receive the vote of more than 50% of our outstanding shares to be
adopted. A proposal for election of directors must receive a plurality
of the shares at the meeting to be adopted. If you submit a properly
executed proxy card, you will be considered part of the quorum, even if
you abstain from voting. In addition, shares represented by "broker
non-votes" will be considered part of the quorum. Abstentions are not
counted in tallying votes. A WITHHELD vote is the same as an
abstention.
8. Q: HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?
A: We do not know of any business to be considered at our 1999 Annual
Meeting other than the proposals described in this proxy statement.
However, if any other business is presented at the
1
<PAGE> 5
Annual Meeting, your signed proxy card gives authority to David R.
Gibson, our Senior Vice President and Chief Financial Officer, and
Thomas P. Collins, our Vice President and Secretary, to vote on those
matters at their discretion.
9. Q: WHEN ARE SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING DUE?
A. You must submit any shareholder proposal to be considered for inclusion
in next year's proxy statement in writing to Mr. Thomas Collins at
Wilmington Trust Corporation, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890 by January 19, 2000. Our advance
notice bylaw provisions require that any shareholder proposal to be
presented from the floor of the 2000 Annual Meeting other than to elect
directors must be submitted in writing to Mr. Collins at the above
address by March 20, 2000. That notice must include a brief description
of the business desired to be brought before the meeting, the
shareholder's name and address, the number and class of shares the
shareholder holds, and any material interest the shareholder has in
that business.
10. Q: CAN A SHAREHOLDER NOMINATE SOMEONE TO BE A DIRECTOR OF WILMINGTON
TRUST?
A. As a shareholder, you may recommend a person as a nominee for director
of Wilmington Trust by writing to Mr. Thomas Collins at the above
address. We must receive recommendations by March 20, 2000 for the 2000
Annual Meeting. These recommendations must include the information
required in the response to Question 9 above as well as the nominee's
name and address, a representation that the shareholder is a
recordholder of our stock or holds our stock through a broker and
intends to appear in person or by proxy at our 2000 Annual Meeting to
nominate the person, information regarding the nominee that would be
required to be included in our proxy statement, a description of any
arrangement or understanding between the shareholder and that nominee,
and the written consent of the nominee to serve as a director if
elected.
11. Q: HOW MUCH DID THIS PROXY SOLICITATION COST?
A. We hired Morrow and Co., Inc. to assist in distributing proxy materials
and soliciting votes for $6,500, plus estimated out-of-pocket expenses
of $20,000. We also reimburse brokerage houses and other custodians,
nominees, and fiduciaries for their reasonable out-of-pocket expenses
in forwarding proxy and solicitation materials to shareholders.
2
<PAGE> 6
PROPOSALS YOU MAY VOTE ON
1. ELECTION OF DIRECTORS
There are five nominees in our Class of 2002 for election as directors this
year. We have provided detailed information on each on page 4. Each class of
directors is elected for a three-year term. If any director is unable to stand
for re-election, your Board may reduce its size or designate a substitute. If a
substitute is designated, proxies voting on the original director candidate will
be cast for the substituted candidate.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THESE DIRECTORS.
2. APPROVAL OF 1999 LONG-TERM INCENTIVE PLAN
Our Compensation Committee and your Board have approved our 1999 Long-term
Incentive Plan to assist us in attracting and retaining key officers and
employees and motivate them to achieve our long-term business objectives. We
have provided detailed information about this plan on pages 21 to 24 and in
Exhibit A.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PLAN.
3. APPROVAL OF EXECUTIVE INCENTIVE PLAN
Our Compensation Committee and your Board have approved our Executive
Incentive Plan to further motivate executive officers to achieve corporate
performance goals. We have provided detailed information about this plan on
pages 24 to 26 and in Exhibit B.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PLAN.
4. RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS
Your Board has recommended the appointment of Ernst & Young LLP as our
independent auditors for 1999, subject to your approval. Ernst & Young has
served as our independent auditors since 1981. They have access to our Audit
Committee to discuss audit findings and other financial matters. Representatives
of Ernst & Young will attend the Annual Meeting to answer appropriate questions.
During 1998, Ernst & Young audited our consolidated financial statements
and the separate financial statements of certain of our affiliates and employee
benefit plan financial statements. They also reviewed our annual report to
shareholders and certain other filings we made with the SEC in 1998. In
addition, Ernst & Young provided us with various non-audit services during 1998.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF ERNST &
YOUNG'S APPOINTMENT AS INDEPENDENT AUDITORS FOR 1999.
3
<PAGE> 7
NOMINEES FOR THE BOARD OF DIRECTORS
CLASS OF 2002
VOTING IS FOR THIS CLASS
<TABLE>
<S> <C> <C>
Carolyn S. Burger......... Director since 1991 Ms. Burger became a principal in CB
Age 58 Associates, Inc., a consulting firm specializing
in legislation, technology deployment for
senior executives, and executive coaching,
in 1996. She served as President and Chief
Executive Officer of Bell Atlantic-Delaware,
Inc. from 1991 to 1996. Ms. Burger also is a
director of PJM Interconnection, L.L.C. and
Rodel, Inc.
Robert V.A. Harra Jr...... Director since 1996 Mr. Harra became a director, President, Chief
Age 49 Operating Officer, and Treasurer of Wilmington
Trust in 1996. He previously served as our
Executive Vice President and Treasurer from
1992 to 1995.
Rex L. Mears.............. Director since 1992 Mr. Mears has served as President of Ray S. Mears
Age 57 and Sons, Inc., a family corporation, since
1967.
Leonard W. Quill.......... Director since 1990 Mr. Quill retired as Chairman of the Board and
Age 67 Chief Executive Officer of Wilmington Trust in
1996. He had held those positions since
1995. He previously served as Chairman of
the Board, President, and Chief Executive
Officer of Wilmington Trust since 1992.
Robert W. Tunnell Jr...... Director since 1992 Mr. Tunnell became managing partner of Tunnell
Age 44 Companies, an owner and developer of real
estate, in 1981.
</TABLE>
Robert C. Forney, a director since 1975, will not stand for re-election in
compliance with our Bylaws, which provide that no person who has attained the
age of 72 may be nominated for election to our Board.
The following individuals currently serve as directors in the two other
classes. Their terms will end at the annual meetings in 2000 and 2001,
respectively.
4
<PAGE> 8
CLASS OF 2000 -- ONE-YEAR TERM REMAINING
THIS CLASS WAS ELECTED AT THE 1997 ANNUAL MEETING
<TABLE>
<S> <C> <C>
Ted T. Cecala............... Director since 1996 Mr. Cecala became a director, Chairman of
Age 49 the Board, and Chief Executive Officer of
Wilmington Trust in 1996. He previously
served as our Executive Vice President and
Chief Financial Officer from 1990 to 1995.
Mr. Cecala also serves as a member of the
Board of Managers of Cramer Rosenthal
McGlynn, LLC and Roxbury Capital
Management, LLC.
Richard R. Collins.......... Director since 1989 Mr. Collins became Chairman of Collins,
Age 62 Inc., a consulting firm for various insurance
industry associations and financial and
non-financial companies focusing on
international expansion, in 1993. He also
is a consultant for American Life
Insurance Company. Mr. Collins previously
served as Chief Executive Officer and
Chief Operating Officer of that company
from 1981 to 1992.
Andrew B. Kirkpatrick Jr.... Director since 1983 Mr. Kirkpatrick became counsel to the law
Age 69 firm of Morris, Nichols, Arsht and Tunnell in
1995. He served as a partner in that firm from
1958 to 1995.
Hugh E. Miller.............. Director since 1982 Mr. Miller retired as Vice Chairman of ICI
Age 63 Americas in 1990. He served with its parent,
Imperial Chemical Industries PLC, for 20
years until 1990, including management
positions in Europe and the United States.
Mr. Miller also serves as Chairman and a
director of MGI Pharma, Inc.
David P. Roselle............ Director since 1991 Mr. Roselle has served as President of the
Age 59 University of Delaware since 1990.
Thomas P. Sweeney........... Director since 1983 Mr. Sweeney has served as a member in the
Age 62 law firm of Richards, Layton & Finger, P.A.
since 1967.
Mary Jornlin-Theisen........ Director since 1981 Ms. Theisen is a civic leader who retired as
Age 71 manager of the public affairs program of
Hercules Incorporated in 1981. She
previously served as New Castle County
Executive from 1976 to 1980 and as
Treasurer of the State of Delaware from
1972 to 1976.
</TABLE>
5
<PAGE> 9
CLASS OF 2001 -- TWO-YEAR TERM REMAINING
THIS CLASS WAS ELECTED AT THE 1998 ANNUAL MEETING
<TABLE>
<S> <C> <C>
Charles S. Crompton Jr...... Director since 1982 Mr. Crompton has served as a partner in the
Age 62 law firm of Potter, Anderson & Corroon since
1966.
H. Stewart Dunn Jr. ........ Director since 1988 Mr. Dunn has served as a partner in the law
Age 69 firm of Ivins, Phillips & Barker since 1962.
Edward B. duPont............ Director since 1986 Mr. DuPont is a private investor and a
Age 64 director of E.I. du Pont de Nemours and Company.
R. Keith Elliott............ Director since 1997 Mr. Elliott became Chairman of the Board and
Age 56 Chief Executive Officer of Hercules
Incorporated in 1997. He previously served
as President and Chief Executive Officer
of that company in 1996, President and
Chief Operating Officer of that company
from 1995 to 1996, and Chief Financial
Officer from 1991 to 1995. Mr. Elliott is
a director of that company, PECO Energy,
and Computer Task Group.
Stacey J. Mobley............ Director since 1991 Mr. Mobley has served as Senior Vice
Age 53 President, External Affairs, E.I. du Pont de Nemours
and Company since 1992.
H. Rodney Sharp III......... Director since 1998 Mr. Sharp served in several management
Age 62 positions at E.I. du Pont de Nemours and Company from
1961 to 1991, and retired from du Pont in
1991. He is a director of that company.
</TABLE>
6
<PAGE> 10
COMMITTEES OF THE BOARD OF DIRECTORS
Our full Board considers all major decisions of Wilmington Trust. However,
the Board has established the following three standing committees so that
certain important areas can be addressed in more depth than may be possible at
full Board meetings:
- The Executive Committee exercises most of the Board's authority between
Board meetings. It consists of six permanent members plus three members
of the Board selected to serve on the committee on a rotating basis for
six months at a time.
- The Audit Committee examines our Audit Division and its accounting
processes and reporting systems, assesses the adequacy of internal
controls and risk management, reviews examination reports of governmental
agencies and independent auditors, and makes recommendations on those to
the Board. It consists of five members, none of whom is an employee of
Wilmington Trust.
- The Compensation Committee in general advises on matters of policy
concerning Wilmington Trust, reviews major organizational matters with
management, including salaries and employee benefits, and administers our
executive incentive plan and stock option plans. It consists of five
members, none of whom is an employee of Wilmington Trust. That
committee's report on executive compensation appears on pages 17 to 19
below.
The table below provides information about our Board committee membership
during 1998.
BOARD COMMITTEE MEMBERSHIP
(AS OF DECEMBER 31, 1998)
<TABLE>
<CAPTION>
NAME AUDIT COMPENSATION EXECUTIVE
- ---- ----- ------------ ----------
<S> <C> <C> <C>
Carolyn S. Burger......................................... X
Ted T. Cecala............................................. X*
Richard R. Collins........................................ X X
Charles S. Crompton Jr. .................................. X* X
H. Stewart Dunn Jr........................................ X(Rotating)
Robert C. Forney.......................................... X* X
Robert V.A. Harra Jr. .................................... X
Rex L. Mears.............................................. X(Rotating)
Hugh E. Miller............................................ X X
Stacey J. Mobley.......................................... X
David P. Roselle.......................................... X X(Rotating)
Thomas P. Sweeney......................................... X
Mary Jornlin Theisen...................................... X
Robert W. Tunnell Jr...................................... X
-----------------------------------
Number of meetings in 1998................................ 3 5 5
</TABLE>
- ---------------
* Chairperson
Messrs. Crompton, DuPont, and Kirkpatrick also served as rotating members
of the Executive Committee during 1998.
7
<PAGE> 11
DIRECTORS' COMPENSATION
We pay our outside directors an annual retainer of $15,000 in addition to a
$1,200 fee for each Board meeting they attend. We also pay them a $1,000 fee for
each Executive Committee meeting they attend and an $800 fee for each Audit or
Compensation Committee meeting they attend. We held a total of seven Board
meetings and 13 committee meetings in 1998. Directors' fees and retainers the
Board earned for 1998 totaled $490,400.
We pay each director the first half of the annual retainer in our common
stock. In addition, each director may elect to receive the balance of the annual
retainer in our common stock. Under our Directors' Deferred Fee Plan, directors
can elect each year to defer receipt of the cash portion of their directors'
fees until they are no longer a director. If a director elects to defer receipt
of his or her directors' fees, the director may elect to earn a yield on the
deferred portion based on (1) yields we pay on certain of our deposit products
and/or (2) changes in the price of our common stock, together with dividends on
that stock.
Directors who are also officers of Wilmington Trust do not receive any
additional compensation for service on any committee.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following contains information about our executive officers who are not
directors.
<TABLE>
<S> <C> <C>
Robert J. Christian....... Executive Officer Mr. Christian became a member of Wilmington
Age 49 since 1996 Trust's Management Committee and a Senior Vice
President of Wilmington Trust Company, our
principal banking subsidiary ("WTC"), in its
Asset Management Department in 1996. He
previously served as President and Chief
Investment Officer of PNC Asset Management
Group from 1994 to 1996 and as Chief
Investment Officer of PNC Bank Corp. from 1992
to 1996.
Howard K. Cohen........... Executive Officer Mr. Cohen became a member of Wilmington Trust's
Age 50 since 1992 Management Committee and a Senior Vice
President of WTC in its Corporate Financial
Services Department in 1992.
William J. Farrell II..... Executive Officer Mr. Farrell became a member of Wilmington
Age 40 since 1993 Trust's Management Committee and a Senior Vice
President of WTC in its Trust Operations and
Systems Development Department in 1993. In
1998, he also assumed oversight over all areas
of WTC's Information Technology Department.
David R. Gibson........... Executive Officer Mr. Gibson became Senior Vice President and
Age 41 since 1992 Chief Financial Officer of Wilmington Trust in
1997 and of WTC in 1996. He previously served
as Senior Vice President of WTC in its Finance
Department from 1992 to 1997.
Joseph M. Jacobs Jr. ..... Executive Officer Mr. Jacobs became a member of Wilmington Trust's
Age 60 since 1992 Management Committee and Senior Vice President
of WTC in its Administration Department in
1992.
Hugh D. Leahy Jr.......... Executive Officer Mr. Leahy became a member of Wilmington Trust's
Age 51 since 1992 Management Committee and Senior Vice President
of WTC in its Personal Banking Department in
1992.
</TABLE>
8
<PAGE> 12
<TABLE>
<S> <C> <C>
Robert A. Matarese........ Executive Officer Mr. Matarese became a member of Wilmington
Age 52 since 1990 Trust's Management Committee in 1991 and Senior
Vice President of WTC in its Commercial
Banking Department in 1990.
Ronald K. Pendleton....... Executive Officer Mr. Pendleton became Wilmington Trust's auditor
Age 49 since 1991 in 1991.
Rita C. Turner............ Executive Officer Ms. Turner became a member of Wilmington Trust's
Age 44 since 1996 Management Committee and Senior Vice President
of WTC in its Marketing Department in 1996.
She previously served as Vice President of WTC
in its Marketing Division from 1985 to 1996.
</TABLE>
9
<PAGE> 13
DIRECTORS' AND EXECUTIVE OFFICERS' OWNERSHIP OF WILMINGTON TRUST STOCK
The following table shows how much of our stock each director and each of
our five most highly compensated officers during 1998 (the "Named Executive
Officers") owned, as well as the total stock all directors and executive
officers owned, as of January 29, 1999. Except as indicated below, no director
or executive officer owns more than one percent of our stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL SHARES
------------------------------------------------
VOTING
(NUMBER OF AND/OR PHANTOM
SHARES) INVESTMENT RIGHT TO % OF STOCK
DIRECT(1) POWER(2) ACQUIRE(4) TOTAL CLASS UNITS(5)
---------- ---------- ---------- --------- ----- ----------
<S> <C> <C> <C> <C> <C> <C>
C. S. Burger.................. 1,478 1,478
T.T. Cecala................... 106,440 155,265 261,705
R.J. Christian................ 1,242 42,448 43,690
R.R. Collins.................. 1,806 1,061 2,867
C.S. Crompton Jr.............. 2,728 2,728 888.2569
H.S. Dunn Jr.................. 13,497 13,497
E.B. duPont................... 8,651 1,087,840(3) 1,096,491 3.3%
R.K. Elliott.................. 485 485
W. J. Farrell II.............. 8,434 551 73,882 82,867
R.C. Forney................... 6,662 45,776 52,438 1,263.8893
R.V.A. Harra Jr. ............. 117,993 243 115,761 233,997
A.B. Kirkpatrick Jr. ......... 6,078 6,078
R.A. Matarese................. 14,515 5,546 111,882 131,943
R.L. Mears.................... 1,653 38 1,691
H.E. Miller................... 978 5,800 6,778 1,323.0296
S.J. Mobley................... 1,078 1,078 597.7904
L.W. Quill.................... 159,596 18,200 67,284 245,080
D.P. Roselle.................. 2,771 2,771
H.R. Sharp III................ 625 1,055,840(3) 1,056,465 3.2%
T.P. Sweeney.................. 7,849 7,849 1,090.5859
M.J. Theisen.................. 6,584 8,000 14,584 327.3205
R.W. Tunnell Jr. ............. 11,029 3,242 14,271
Directors, Nominees, and
Executive Officers as a
Group (27 persons).......... 540,280 2,234,159 744,995 2,763,043 8.4% 5,490.8726
======= ========= ======= ========= === ==========
</TABLE>
- ---------------
(1) This column includes stock held by directors and executive officers or
certain members of their immediate families.
(2) This column includes stock for which directors or executive officers are
deemed to have sole or shared voting power.
(3) Since they may be deemed to share voting and/or investment power directly or
indirectly, Messrs. duPont and Sharp are listed as beneficial owners of the
same 1,055,840 shares. However, these shares are reported only once in the
total for directors and executive officers as a group.
(4) This column includes shares which directors or executive officers have the
right to acquire within 60 days after December 31, 1998.
(5) These phantom stock units were acquired in lieu of directors' fees. Their
value is based on the market price of our common stock, together with
dividends on that stock. The units can be redeemed only for cash following
termination of the individual's service as a director, and do not have
voting rights.
10
<PAGE> 14
WILMINGTON TRUST STOCK HELD IN A FIDUCIARY CAPACITY
On January 29, 1999, certain of our subsidiaries held shares of our common
stock in a fiduciary capacity as follows:
<TABLE>
<CAPTION>
PERCENT OF
NUMBER TOTAL SHARES
OF SHARES OUTSTANDING
--------- ------------
<S> <C> <C>
Category #1 -- Shares which Wilmington Trust may vote in its
sole discretion........................................... 1,802,335 5.45%
Category #2 -- Shares which Wilmington Trust may vote only
on the direction of someone else.......................... 2,212,187 6.69%
Category #3 -- All other shares Wilmington Trust holds...... 427,780 1.29%
</TABLE>
We will calculate the number of shares we hold in each category as of the Record
Date. These will be voted as follows:
Category #1 -- Will be voted by the relevant fiduciary area.
Category #2 -- Will be voted in accordance with the direction given by
someone other than a fiduciary area.
Category #3 -- Will be voted by the relevant fiduciary area.
Although none of our fiduciary areas has yet considered the proposals in
this proxy statement, as a matter of policy our fiduciary areas tend to support
management of the companies in which they have invested.
11
<PAGE> 15
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table presents information about compensation Wilmington
Trust awarded over the last three years to the Named Executive Officers.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
- -----------------------ANNUAL-COMPENSATION-------------------------------AWARDS---------------------
(A) (B) (E) (F)
(C) (D) SECURITIES ALL OTHER
SALARY BONUS(1) UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS (#) ($)(2)
--------------------------- ---- ------ -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Ted T. Cecala..................... 1998 $ 476,667 $533,521 12,500 $6,328
Chairman of the Board 1997 425,000 403,604 15,000 8,784
and Chief Executive Officer 1996 352,167 322,888 53,174 7,798
Robert V. A. Harra Jr. ........... 1998 $ 372,500 $341,668 10,000 $8,421
President, Treasurer, and 1997 356,667 319,985 12,500 8,184
Chief Operating Officer 1996 333,000 270,553 38,174 7,669
Robert J. Christian............... 1998 $ 227,250 $184,132 6,000 $7,010
Senior Vice President 1997 217,917 183,485 10,000 6,853
1996 186,932 152,771 30,535 5,128
Robert A. Matarese................ 1998 $ 215,333 $148,419 6,000 $6,893
Senior Vice President 1997 205,500 175,919 7,500 6,733
1996 196,167 157,890 8,719 6,389
William J. Farrell II............. 1998 $ 190,833 $152,025 6,000 $6,655
Senior Vice President 1997 155,666 129,425 7,500 6,124
1996 132,334 113,634 7,519 5,348
Total salary, bonus, and other 1998 $2,877,655 Percentage of 2.52%
compensation for Named 1997 $2,670,485 net operating 2.52%
Executive Officers(3) 1996 $2,593,923 income 2.67%
</TABLE>
- ---------------
(1) Includes awards made under Wilmington Trust's Executive Incentive
Compensation Plan (described on pages 18 and 19 below) and Profit-sharing
Bonus Plan (described on page 18 below) in respect of services performed
during the year.
(2) Represents: (a) Wilmington Trust's contributions to its 401-K Thrift Savings
Plan of $3,239 for Mr. Cecala and $4,800 for each of the other Named
Executives Officers in 1998; $4,750 in 1997 for each of the Named Executive
Officers; and $4,500 for Messrs. Cecala, Harra, and Matarese, $4,078 for Mr.
Farrell, and $3,937 for Mr. Christian in 1996; and (b) premiums we paid for
term life insurance for Mr. Cecala of $3,089 in 1998, $4,034 in 1997, and
$3,298 in 1996; Mr. Harra of $3,620 in 1998, $3,434 in 1997, and $3,169 in
1996; Mr. Christian of $2,210 in 1998, $2,103 in 1997, and $1,191 in 1996;
Mr. Matarese of $2,083 in 1998, $1,983 in 1997, and $1,889 in 1996; and Mr.
Farrell of $1,855 in 1998, $1,374 in 1997, and $1,270 in 1996.
(3) Numbers in this table for 1996 and 1997 include salary, bonus, and other
compensation paid to George W. Helme IV, who was Senior Vice President in
those years, but do not include those for Mr. Farrell.
12
<PAGE> 16
OPTION GRANT TABLE
The following table presents additional information about the option awards
in the Summary Compensation Table for 1998.(1)
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(2)
- ----------------------------------------------------------------------------------- ---------------------
(A) (B) (C) (D) (E) (F) (G)
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO ALL EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
---- ---------- -------------- ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Ted T Cecala............ 12,500 4.8% $63.00 2/18/2008 $495,255 $1,255,072
Robert V.A. Harra
Jr. .................. 10,000 3.8% 63.00 2/18/2008 396,204 1,044,058
Robert J. Christian..... 6,000 2.3% 63.00 2/18/2008 237,722 602,435
Robert A. Matarese...... 6,000 2.3% 63.00 2/18/2008 237,722 602,435
William J. Farrell II... 6,000 2.3% 63.00 2/18/2008 237,722 602,435
</TABLE>
- ---------------
(1) One Thousand Five Hundred Eighty-Seven of these options vest two years after
grant, and the balance vest one year after grant. All of these options
expire ten years after grant, and may be terminated earlier (a) at the
termination of the officer's employment if his employment ceases for any
reason other than retirement, death, or disability or (b) upon the earlier
of (1) the end of the option's term or (2) three years after the officer's
death, retirement, or disability.
(2) These values are computed on a pre-tax basis, and are calculated using the
last sale price of our stock on December 31, 1998.
13
<PAGE> 17
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table presents information about (1) options exercised during
1998 by the Named Executive Officers and (2) the amount and value of unexercised
options as of December 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
NUMBER OF VALUE OF
SHARES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED ON FISCAL YEAR-END(#) FISCAL YEAR-END($)
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (NUMBER) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
---- ----------- -------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Ted T. Cecala.................... 0 0 144,352/17,500 $4,834,362/$ 65,938
Robert V. A. Harra Jr. .......... 4,672 $220,752 107,348/15,000 $3,539,859/$ 66,875
Robert J. Christian.............. 0 0 25,357/21,178 $ 668,433/$366,265
Robert A. Matarese............... 0 0 107,469/11,000 $4,264,213/$ 72,375
William J. Farrell II............ 6,000 $251,750 69,469/11,000 $2,338,488/$ 72,375
</TABLE>
- ---------------
(1) Value realized reflects the difference between the market value of our stock
on the date the option was exercised and the exercise price, multiplied by
the number of shares acquired upon exercise.
CHANGE IN CONTROL AGREEMENTS
We have entered into change in control agreements with our 11 executive
officers. These provide severance pay and continuation of certain benefits if a
"Change in Control" occurs. To receive benefits under the agreements, an
executive officer's employment must be terminated involuntarily, either actually
or constructively, without cause within two years after a Change in Control.
In general, the agreements deem a "Change in Control" to have occurred if
any of the following happens:
- We or WTC consolidate or merge with a third party;
- We or WTC transfer substantially all assets to a third party or
completely liquidate or dissolve;
- A third party acquires any combination of beneficial ownership of and
voting proxies for more than 15% of our or WTC's voting stock or the
ability to control the election of our directors or our management or
policies;
- The persons serving as our directors on February 29, 1996, and those
replacements or additions subsequently nominated by that Board or by
persons nominated by them, are no longer at least a majority of our
Board; or
- A regulatory agency determines that a change in control of Wilmington
Trust has occurred.
Under these agreements, the officer is entitled to severance pay in a lump
sum of 115% times three years' of the officer's highest base salary in the 12
months preceding the termination of his or her employment, discounted to present
value. In addition, the officer generally would receive medical, life,
disability, health-and-accident, profit-sharing, and retirement benefits at our
expense for three years.
PENSION BENEFITS
The table on the next page shows the estimated annual retirement benefits
payable to a covered participant based on the final average pay formulas of our
Pension Plan and Supplemental Executive Retirement Plan.
14
<PAGE> 18
PENSION TABLE(1)
<TABLE>
<CAPTION>
ANNUAL RETIREMENT BENEFITS WITH YEARS OF SERVICE INDICATED ON DECEMBER 31, 1998
AVERAGE ANNUAL ---------------------------------------------------------------------------------
EARNINGS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
- -------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 200,000 $ 32,278 $ 40,656 $ 48,752 $ 58,764 $ 70,517 $ 82,270
400,000 86,981 115,974 144,968 173,961 202,955 231,948
600,000 131,981 175,974 219,968 263,961 307,955 351,948
800,000 176,981 235,974 294,968 353,961 412,955 471,948
1,000,000 221,981 295,974 369,968 443,961 517,955 591,948
1,200,000 266,981 355,974 444,968 533,961 622,955 711,948
1,400,000 311,981 415,974 519,968 623,961 727,955 831,948
</TABLE>
- ---------------
(1) The table above reflects annual retirement benefits with years of service
indicated on December 31, 1998. The benefits listed in the table are not
subject to deduction for Social Security or other offset amounts. The Social
Security-covered compensation level and the primary insurance amount are
based on reaching age 65 on December 31, 1998.
The estimated years of credited service under the Pension Plan and the SERP
through December 31, 1998 for each of the Named Executive Officers are: Mr.
Cecala -- 19.3 years; Mr. Harra -- 27.6 years; Mr. Christian -- 2.9 years;
Mr. Matarese -- 29.5 years; and Mr. Farrell -- 22.5 years.
We provide retirement benefits for employees, including executive officers.
The normal retirement benefit for executive officers is the sum of benefits
provided by our Pension Plan and the SERP. The normal annual retirement benefit
from the Pension Plan is the greater of:
(a) 1.5% of the officer's average annual earnings for the five-year period
ending December 31, 1993, multiplied by years of service as of December
31, 1993; or
(b) (1) 1.5% of the officer's average annual earnings for the five-year
period ending December 31, 1987, less 1.25% of the Social Security
Primary Insurance Amount (the "PIA") as of December 31, 1987, all
multiplied by years of service as of December 31, 1987; plus (2) 1.0%
of the officer's earnings during 1988 up to one-half of the 1988 Social
Security taxable wage base, plus 1.8% of earnings during 1988 in excess
of one-half of the 1988 Social Security taxable wage base; plus (3) for
each year after 1988, 1.25% of the officer's earnings in that year up
to one-half of the Social Security taxable wage base for that year (the
"SSTWB"), plus 1.6% of earnings during that year in excess of one-half
of the SSTWB.
For purpose of determining amounts to which participants are entitled under
the Pension Plan, for years before 1994, earnings include base salary and
amounts paid under the Profit-sharing Bonus Plan, but do not include incentive
payments. For years after 1993, earnings also include incentive payments other
than amounts paid under the Executive Incentive Compensation Plan. The normal
form of pension provided under the Pension Plan is a 50% joint and survivor
benefit. For purposes of determining benefit accruals under the Pension Plan,
current law limits earnings to $160,000.
The normal annual retirement benefit from the SERP is the sum of (1) for
years of credited service before 1994, 60% of the officer's average annual
earnings for the 60-month period ending with his or her retirement date, less
one-half of the PIA multiplied by a fraction the numerator of which is the
officer's years of credited service at retirement and the denominator of which
is 40 and (2) for each year of credited service after 1993, 1.25% of the lesser
of the officer's earnings for the year or one-half the SSTWB. All such amounts
are reduced by benefits payable from the Pension Plan.
For purposes of determining amounts to which participants are entitled
under the SERP, under part (1) of the formula described above, average annual
earnings include base salary and amounts paid under the Profit-sharing Bonus
Plan, but do not include amounts paid under our Executive Incentive Compensation
15
<PAGE> 19
Plan. For purposes of part (2) of that formula, beginning in 1995, earnings also
include one-half of the bonus awarded under our executive incentive plan. The
SERP pays a monthly pension, beginning at the same time the officer begins to
receive his or her Pension Plan benefit, in the form of a single life annuity or
a 50% joint and survivor annuity. Benefits under the SERP vest in the event of a
"Change in Control" as that term is defined in the change in control agreements
discussed on page 14 above.
STOCK PERFORMANCE GRAPH
The line graph below compares cumulative total stockholder return (1) over
the past five years for our common stock with (a) all companies in the Standard
and Poors' 500 Index, (b) institutions in the Keefe, Bruyette & Woods 50 Bank
Index, (2) (c) all companies in the Nasdaq Composite Index, and (d) institutions
in the previous company-constructed peer group we have used for purposes of this
stock performance graph since 1995 (the "Peer Group").(3) As discussed in Note 3
below, we do not intend to compare our stockholder return to that of the Nasdaq
Composite Index or the Peer Group in the future.
TOTAL RETURN -- WEIGHTED FOR MARKET CAPITALIZATION
<TABLE>
<CAPTION>
PEER GROUP KEEFE, S&P 500 INDEX
WILMINGTON ---------- BRUYETTE & NASDAQ -------------
TRUST WOODS 50 COMPOSITE
CORPORATION BANK INDEX INDEX
----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
12/31/93 $100.00 $100.00 $100.00 $100.00 $100.00
12/31/94 $ 90.33 $ 95.86 $ 94.90 $ 96.80 $ 98.46
12/31/95 $128.06 $151.18 $152.00 $135.44 $132.05
12/31/96 $170.41 $203.24 $215.01 $164.75 $158.80
12/31/97 $277.24 $359.14 $314.32 $200.39 $206.05
12/31/98 $281.15 $466.70 $340.34 $279.81 $263.53
</TABLE>
ASSUMES AN INITIAL INVESTMENT OF $100 ON 12/31/93
16
<PAGE> 20
NOTES TO STOCK PERFORMANCE GRAPH
(1) Cumulative total stockholder return includes appreciation in stock price and
assumes the reinvestment of dividends.
The graph reflects appreciation in stock price assuming an initial investment of
$100 at the close of business on December 31, 1993. The table below the graph
reflects the graph's data points.
(2) The Keefe, Bruyette & Woods 50 Bank Index is a
market-capitalization-weighted bank stock index that includes all money center
banks and most major regional banks, and is meant to be representative of the
stock price performance of large banks throughout the United States.
(3) Our stock was listed on Nasdaq until January 1999. Accordingly, we
previously compared our stockholder return with that of institutions in the
Nasdaq Composite Index for purposes of this stock performance graph. However, in
light of our recently listing our stock on the New York Stock Exchange, we do
not believe that comparing our stockholder return with that of institutions in
the Nasdaq Composite Index is meaningful any longer, and do not intend to do so
in the future.
Similarly, in 1995, we adopted the Peer Group, which was comprised of 13
institutions whose business lines, financial condition, and performance
resembled ours at that time. The Peer Group is composed of banks which, at
December 31, 1993, had substantially the following characteristics: (1) asset
sizes ranging from $3 billion to $40 billion (our asset size at December 31,
1998 was $6.3 billion), (2) fee income of more than 25% of gross revenues (our
fee income for 1998 constituted 41.3% of gross revenues), (3) an annual return
on average assets greater than 1% (our return on average assets for 1998 was
1.83%), (4) an annual return on average equity in excess of 15% and a five-year
return on average equity in excess of 14.5% (our return on average equity for
1998 was 21.70% and our five-year return on average equity for the period from
January 1, 1994 through December 31, 1998 was 21.35%), (5) a ratio of
nonperforming loans to total loans of less than 2.5% (the ratio of our
nonperforming loans to total loans at December 31, 1998 was .74%), and (6)
annual net chargeoffs of less than .75% of average loans (our net chargeoffs for
1998 were .28% of our average loans).
However, by the end of 1998, as a result of acquisitions, the Peer Group had
been reduced to eight institutions. The institutions remaining in the Peer Group
are Comerica Incorporated, Compass Bancshares Incorporated, Fifth Third Bancorp,
Firstar Corporation, Old Kent Financial Corporation, Northern Trust Corporation,
State Street Corporation, and Wachovia Corporation. In light of the relatively
large asset size and market capitalization of those institutions, we do not
believe that comparing our stockholder return with that of those institutions is
as meaningful as when we first adopted the Peer Group, and accordingly do not
intend to do so in the future.
Instead, we expect in the future to compare our cumulative stockholder return
with those of institutions in the Standard and Poors' 500 Index and the Keefe,
Bruyette & Woods 50 Bank Index.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
We award compensation to executive officers to assure that we can continue
to be able to attract, motivate, and retain executives of outstanding abilities.
To achieve this, we provide compensation for executive officers at levels
broadly comparable to those earned by executive officers at institutions with
comparable characteristics and financial performance. In compensating our
executive officers, we take into account the performance of those institutions
compared to ours. We generally compare our return on assets, return on equity,
and growth in earnings per share to the corresponding performance of those
institutions.
Our executive compensation program also rewards executive officers for
their efforts to enhance shareholder value, including through their long-term
strategic management. We do this by providing executive officers with ownership
interests in Wilmington Trust through stock options. Since the ultimate value of
the stock made available through options depends on our success, stock options
provide executive officers with continuing incentives long after the award is
granted.
17
<PAGE> 21
The key elements of our compensation program for executive officers are
base salary, the Profit-sharing Bonus Plan, the Executive Incentive Compensation
Plan, and stock options. The Compensation Committee's policies with respect to
each of these elements, including the bases for the compensation awarded to Mr.
Cecala, are discussed below. The Compensation Committee takes into account the
full compensation package Wilmington Trust provides each individual, including
pension, insurance, and other benefits, in addition to the programs described
below. In reviewing the performance of Wilmington Trust's executive officers
other than Messrs. Cecala and Harra, the Compensation Committee takes their
views into account. In reviewing Mr. Harra's performance, the Compensation
Committee takes Mr. Cecala's views into account.
BASE SALARIES
We determine base salaries for each executive officer by evaluating his or
her responsibilities and performance and experience in rendering that
performance. We also consider the competitive market for executive talent, and
compare salaries we pay our executive officers to those paid to executive
officers at comparable institutions.
Wilmington Trust typically adjusts executive officers' salaries annually to
take into account its and the individual's performance, as well as any new
responsibilities the executive officer assumed during the year. We also consider
the financial results of the business department over which the executive
officer has responsibility.
PROFIT-SHARING BONUS PLAN
Executive officers also participate in Wilmington Trust's Profit-sharing
Bonus Plan. For each plan year, the bonus fund is determined by:
- Multiplying our return on stockholders' equity by 67% (the "Bonus
Percent");
- Multiplying the Bonus Percent times eligible salaries; and
- Including a multiplier based on (a) an employee's job level and (b) the
percentage growth in our net income.
As a result, our executive officers can earn a profit-sharing bonus ranging
from 50% to 100% of their base salaries multiplied by the Bonus Percent. For
1997 and 1998, the Corporation paid each executive officer a profit-sharing
bonus of 12.67% and 10.17%, respectively, of base salary.
EXECUTIVE INCENTIVE COMPENSATION PLAN
We adopted this incentive plan in 1981 to motivate participating executive
officers to earn incentive payments for outstanding achievement and performance
and to enable Wilmington Trust to attract and retain executives of superior
caliber. Currently, 11 executive officers are eligible to participate in this
plan. These include the Named Executive Officers. The formula used to generate
the cash bonus fund considers Wilmington Trust's corporate performance in
relation to the performance of institutions in the Peer Group. In a plan year,
the bonus fund, if any, equals an amount which is 12% of Wilmington Trust's
annual net income in excess of a threshold amount that is determined by
multiplying Wilmington Trust's average stockholders' equity by the average
return on equity for the year of the Peer Group. The plan provides a guideline
maximum for any individual bonus award in any year of 75% of base salary, but
allows the Compensation Committee the flexibility to award a bonus of up to 100%
of an individual's base salary for truly outstanding individual performance. The
Compensation Committee, which determines amounts payable under this plan, may
not approve awards unless it judges corporate performance in the plan year
generally to be superior relative to the Peer Group. In evaluating corporate
performance, the Compensation Committee considers, among other factors,
Wilmington Trust's return on equity, return on assets, and the percentage growth
in earnings per share. Wilmington Trust's performance in 1998 in return on
assets exceeded that of all members of the Peer Group and its performance in
return on equity exceeded that of all but one member of the Peer Group. Its
performance in growth in earnings per share was below the average performance of
the Peer Group. Wilmington Trust does not use any formula or other specific
criterion in awarding bonuses under this plan
18
<PAGE> 22
based on Wilmington Trust's performance in any or all of these areas.
Notwithstanding corporate performance, no awards may be paid unless there are
also aggregate dividends declared for a plan year which exceed six percent of
average stockholders' equity. For 1998, payments under this plan to the
executive officers who participated in the plan aggregated $1,851,750, compared
to $1,781,000 for the executive officers who participated in the plan in 1997.
In part as a result of the reduction in the number of institutions in the
Peer Group described in Note 3 on page 17 above, we expect to make future
incentive payments to executive officers under the Executive Incentive Plan
described under the caption "Approval of the Executive Incentive Plan" on pages
24 to 26 and which is attached as Exhibit B to this proxy statement. The
Compensation Committee recommended, and your Board of Directors approved,
adoption of the Executive Incentive Plan as a successor to the Executive
Incentive Compensation Plan to preserve the ability to deduct compensation paid
under that plan, and recommends that our shareholders approve that plan.
STOCK OPTIONS
Under our 1996 Long-term Incentive Plan, which our shareholders have
approved, the Compensation Committee may make cash-based and stock-based awards.
Our stock options have an exercise price equal to the last sale price of our
stock on the date of grant, typically vest in one or two years and have terms of
up to ten years. In granting stock options, we do not consider the number of
options an executive officer received previously, but we do consider new duties
and responsibilities the executive officer assumed during the year. We do not
employ any formula in awarding options.
The Compensation Committee recommended, and your Board of Directors
approved, adoption of the 1999 Long-term Incentive Plan, and recommends that our
shareholders approve that plan. That plan is designed to be a successor to our
1996 Long-term Incentive Plan, and is described under the caption "Approval of
the 1999 Long-term Incentive Plan" on pages 21 to 24 and Exhibit A.
Section 162(m) of the Internal Revenue Code (the "Code") and the
regulations thereunder (collectively, "Section 162(m)") prohibit companies from
deducting compensation paid to certain executive officers in excess of $1
million unless that compensation is "performance-based." Payments under the
Profit-sharing Bonus Plan and the Executive Incentive Compensation Plan do not
qualify as "performance-based." However, compensation attributable to our stock
options is performance-based. In addition, the 1999 Long-term Incentive Plan and
the Executive Incentive Plan are designed so that compensation attributable to
awards under those plans can qualify as "performance-based."
COMPENSATION OF CHIEF EXECUTIVE OFFICER
In establishing Mr. Cecala's compensation, the Compensation Committee
considered the same basic factors as those described above for all members of
Wilmington Trust's senior management, including especially:
- Wilmington Trust's performance against the Peer Group in return on assets
and return on equity and its performance in the percentage growth in
earnings per share;
- The base salaries, annual bonuses, and stock option awards paid to top
executives at banks of comparable size; and
- The development under Wilmington Trust's strategic planning process to
expand significantly the geographic outreach of its fee-based businesses.
Robert C. Forney (Chairman)
Richard R. Collins
Charles S. Crompton, Jr.
Hugh E. Miller
Stacey J. Mobley
19
<PAGE> 23
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee's members are Robert C. Forney (Chairman),
Richard R. Collins, Charles S. Crompton, Jr., Hugh E. Miller, and Stacey J.
Mobley. No member of the Compensation Committee is a current or past officer or
employee of Wilmington Trust or any subsidiary. No executive officer of
Wilmington Trust serves as a member of the compensation committee or Board of
Directors of any other company whose members include an individual who also
serves on our Board of Directors or the Compensation Committee.
Messrs. Collins, Crompton, Forney, and Miller are indebted to WTC on the
same terms and conditions as those for comparable transactions with others.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires our directors and
executive officers and certain others to file reports of their ownership of our
stock with the SEC and the New York Stock Exchange.
After reviewing copies of those forms we have received and written
representations, we believe that all of those filing requirements were complied
with, except that a sale by Mr. Helme, a transfer by Mr. Matarese from a
custodial account for his daughter to his daughter, a previous acquisition by
Mr. Gibson's wife, certain stock option exercises and a sale by Mr. Jacobs, a
sale by Ms. Turner, a purchase by Mr. Richard Collins, and the acquisition of
"phantom stock" units in lieu of meeting fees for the second half of 1998 by Mr.
Miller were reported late in 1998 or 1999.
TRANSACTIONS WITH MANAGEMENT
Certain of our subsidiaries have banking transactions in the ordinary
course of business with directors, officers, and their associates on the same
terms, including interest rates and collateral on loans, as those prevailing at
the time for comparable transactions with others and that do not involve more
than the normal risk or collectibility or present other unfavorable features.
During 1998, the firm of Richards, Layton & Finger, P.A., of which Thomas
P. Sweeney, one of our directors, is a member, rendered legal services to us.
20
<PAGE> 24
APPROVAL OF THE 1999 LONG-TERM INCENTIVE PLAN
Your Board of Directors adopted the 1999 Long-term Incentive Plan on
February 18, 1999. Under that plan, we can award both cash-based and stock-based
awards. In addition, non-employee directors will receive payment of the first
half, and may elect to receive payment of the second half, of their annual
retainers in our common stock.
The 1999 Long-term Incentive Plan's primary purpose is to assist us in
attracting and retaining highly competent officers and other key employees. The
plan will act as an incentive in motivating key officers and employees to
achieve our long-term business objectives, while giving us the flexibility to
tailor individual awards to meet changing business and tax strategies.
Our shareholders approved our 1996 Long-term Incentive Plan on April 20,
1996. Your Board recommends that shareholders approve the 1999 Long-term
Incentive Plan as a successor to that plan. The provisions of the 1999 plan are
similar in many respects to the provisions of the 1996 plan. The 1999 plan is
summarized below. That summary is qualified by reference to the 1999 plan, which
is attached to this proxy statement as Exhibit A.
We are seeking shareholder approval of the 1999 Long-term Incentive Plan in
part to preserve our ability to deduct compensation paid to executive officers
under the plan. Shareholder approval of the plan is a condition to our ability
to grant awards under the plan.
GENERAL PROVISIONS
DURATION OF THE 1999 LONG-TERM INCENTIVE PLAN; SHARE AUTHORIZATION
The 1999 Long-term Incentive Plan will remain effective until the fourth
anniversary after our shareholders approve it, unless the Board of Directors
terminates it earlier. The maximum number of shares with respect to which we may
grant awards under the plan is 1,500,000 shares. We may not grant any person
options or other awards in respect of more than 100,000 shares in any year
during the plan's term. The amount of awards payable to participants under the
1999 Long-term Incentive Plan cannot be predicted with accuracy because those
awards are contingent on the Compensation Committee's selecting participants
from time to time and determining the size of awards. The shares to be issued
under the plan will be authorized but unissued shares or issued shares that we
have re-acquired and hold in treasury.
Shares covered by any unexercised portions of terminated options, shares
forfeited by participants, and shares subject to any awards a participant
otherwise surrenders without receiving any payment or other benefit may again be
subject to new awards under the plan. If a participant pays the purchase price
of an option in whole or part by delivering our shares, the number of shares
issuable in connection with the exercise of the option will not again be
available for awards under the plan. Shares used to measure the amount payable
to a participant in respect of an earned performance award will not again be
available for awards. Shares issued in payment of performance awards that are
denominated in cash amounts are not again available for awards.
LONG-TERM INCENTIVE PLAN PARTICIPANTS
Our Compensation Committee will administer the 1999 Long-term Incentive
Plan and select persons eligible to receive awards under the plan. Approximately
800 employees currently are eligible for consideration to participate in the
plan.
Non-employee directors will receive payment of the first half, and may
elect to receive payment of the second half, of their annual retainers in shares
of our stock. Our 16 non-employee directors will participate in this portion of
the plan.
AWARDS AVAILABLE UNDER LONG-TERM INCENTIVE PLAN
The Compensation Committee may grant awards under the 1999 Long-term
Incentive Plan in the form of stock options, performance awards, and other
stock-based and cash-based awards. Awards under the plan may be granted alone or
in combination with other awards.
21
<PAGE> 25
STOCK OPTIONS
The Compensation Committee may grant stock options meeting the requirements
of Section 422 of the Code ("Incentive Stock Options") and stock options that do
not meet those requirements ("Nonstatutory Stock Options"). The Compensation
Committee will determine the term of each option, but no option will be
exercisable more than ten years after grant. The Compensation Committee also may
impose restrictions on exercise. The exercise price for options must at least
equal 100% of the fair market value of our common stock on the date of grant.
The exercise price is payable in cash or, if the Compensation Committee permits
in the award agreement, in shares of our stock or other property, by reducing
the number of shares issuable on the option's exercise, or by cashless exercise
with an optionee's broker.
Options and other awards granted under the plan are not transferable except
by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order. If a participant's employment terminates due to death,
disability, or retirement, unexercised options previously granted under the plan
which have vested may be exercised by the participant or his or her beneficiary,
as the case may be, until the earlier of the option's expiration or three years
after the termination of the participant's employment. If a participant's
employment terminates for other reasons, unexercised options previously granted
under the plan generally terminate on that termination.
PERFORMANCE AWARDS
The Compensation Committee also may grant performance awards under the
plan. These awards are earned by recipients if specified performance targets the
Compensation Committee sets are met. The awards may be paid in cash or shares of
our stock. The performance targets can be based on financial performance
criteria, such as net income or earnings per share, individual performance
criteria, or a combination of both. The amount of the award can be a fixed
dollar amount or a payment based on the increase in the value of our common
stock over a specified award period. When circumstances occur that cause the
performance targets to be an inappropriate measure of achievement, the
Compensation Committee may adjust the targets. That committee will determine the
appropriate award period for each performance award.
A participant has no right to receive a performance award on the
termination of his or her employment before the end of a performance award
period, except in the case of death, disability, or retirement. If a
participant's employment terminates due to death, disability, or retirement
before the end of a performance award period, the Compensation Committee may
award the participant or his or her beneficiary, as the case may be, a pro rata
portion of the performance award.
OTHER STOCK-BASED AWARDS
The Compensation Committee may grant any other type of award valued in
whole or in part by reference to the value of our common stock. The committee
will determine the terms and conditions of any such awards.
NON-EMPLOYEE DIRECTORS
While the 1999 Long-term Incentive Plan is in effect, each non-employee
director will receive payment of the first half, and may elect to receive
payment of the second half, of his or her annual retainer in shares of our
common stock. Before the time when the annual retainer is earned, each director
will be required to elect the form of payment of the second half of his or her
annual retainer. If no election is made, the second half of the annual retainer
will automatically be paid in cash.
For the portion of the annual retainer payable in shares of our stock, we
will issue shares having a fair market value equal to the fees payable. We will
pay cash in lieu of any fractional shares.
The awards payable to non-employee directors under the plan in respect of
their annual retainers cannot be determined because those awards are contingent
on the amount of the annual retainer and the election each director makes each
year regarding the second half of his or her annual retainer.
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SECTION 162(m)
If the Compensation Committee desires to structure any award under the plan
so that the compensation payable thereunder will qualify as "performance based"
under Section 162(m), the committee may establish objective performance goals as
the basis for that award. Those performance goals will be based on any
combination the Compensation Committee selects of earnings per share, return on
equity, return on assets, income, fees, assets, stockholder return, expenses,
chargeoffs, nonperforming assets, and overhead ratio. Those goals may be
company-wide or on a departmental, divisional, regional, or individual basis.
Any goal may be measured in absolute terms, by reference to internal performance
targets, or as compared to another company or companies, and may be measured by
the change in that performance target compared to a previous period. The goals
may be different each year, and will be established with respect to a particular
year by the latest date permitted by Section 162(m).
CHANGE IN CONTROL
Upon a change in control of Wilmington Trust, all options under the 1999
Long-term Incentive Plan will become exercisable immediately, and all
performance targets for performance awards will be deemed to have been met. A
change in control for purposes of the plan has the same meaning as for the
change in control agreements described on page 14 of this proxy statement.
TERMINATION, AMENDMENT, AND ERISA STATUS
The Board may amend or terminate the 1999 Long-term Incentive Plan, and the
Compensation Committee may amend or alter awards. No action may impair a
participant's rights under any award granted previously without the
participant's consent. The Board may not make any amendment to the plan without
shareholder approval if that amendment would require shareholder approval under
the Code or other applicable law.
The 1999 Long-term Incentive Plan is not subject to ERISA.
ANTIDILUTION PROVISIONS
The number of shares of our stock authorized to be issued under the 1999
Long-term Incentive Plan and subject to outstanding awards, the purchase or
exercise price, and the number of shares which may be granted to any recipient
may be adjusted to prevent dilution or enlargement of rights in the event of any
stock dividend, reorganization, reclassification, recapitalization, stock split,
combination, merger, consolidation, or other relevant change in our
capitalization.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the principal Federal income tax
consequences of awards under the 1999 Long-term Incentive Plan. This summary is
not intended to be exhaustive. It does not describe state, local, or foreign tax
consequences.
INCENTIVE STOCK OPTIONS
A participant in the 1999 Long-term Incentive Plan generally is not subject
to Federal income tax either at the time of grant or at the time an Incentive
Stock Option is exercised. However, upon exercise, the difference between the
fair market value of the shares underlying the option and the exercise price is
includable in the participant's alternative minimum taxable income. If a
participant does not dispose of shares acquired upon exercise of an Incentive
Stock Option within one year after receipt of those shares (and within two years
after the date the option is granted), he or she will be taxed only on the sale
of those shares, and that tax will be at the capital gains rate.
We will not receive any tax deduction on exercise of an Incentive Stock
Option or, if the holding requirements are met, on the sale of the shares
underlying that option. If a disqualifying disposition occurs (e.g., one of the
holding requirements mentioned above is not met), the participant will be
treated as receiving
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compensation subject to ordinary income tax in the year of the disqualifying
disposition. We will be entitled to a deduction equal to the amount the
participant includes in income. The tax generally will be imposed on the
difference between the fair market value of the shares at the time of exercise
and the exercise price or, if less, the gain the participant realized on the
sale. Any appreciation in value after exercise will be taxed as capital gain and
not result in any deduction by us.
NONSTATUTORY STOCK OPTIONS
There are no Federal income tax consequences to a participant at the time
we grant a Nonstatutory Stock Option. On exercise of the option, the participant
must pay tax at ordinary income rates on an amount equal to the difference
between the exercise price and the fair market value of the underlying shares on
the date of exercise. We will receive a commensurate tax deduction at the time
of exercise. Any appreciation in value after exercise will be taxed as capital
gain and not result in any deduction by us.
PERFORMANCE AND OTHER STOCK-BASED AWARDS
The grant of performance awards is not a taxable event for Federal income
tax purposes at grant. A participant will be required to pay ordinary income tax
when the award vests in an amount equal to the amount of cash and the value of
any shares included in the distribution. In some circumstances, a participant
may be able to file a "Section 83(b) election" and accelerate his or her
ordinary income tax liability. We will have a commensurate tax deduction.
ANNUAL RETAINERS
Non-employee directors will recognize ordinary income equal to the fair
market value of the shares of our stock they receive in payment of their annual
retainers. We will be entitled to a deduction in the same amount.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares of stock
issued and outstanding on the Record Date is required to approve this proposal.
APPROVAL OF THE EXECUTIVE INCENTIVE PLAN
Our Compensation Committee and your Board of Directors have approved and
recommend for shareholder approval the Wilmington Trust Corporation Executive
Incentive Plan (the "Incentive Plan"). The Incentive Plan provides the
opportunity for key executives to earn cash and stock awards that recognize and
reward the achievement of corporate performance goals. The Incentive Plan is
intended as a successor plan to our Executive Incentive Compensation Plan.
We are seeking shareholder approval of the Incentive Plan so that we can
preserve our ability to deduct compensation paid under the plan to executive
officers a portion of whose compensation would be subject to Section 162(m)
("Section 162(m) Participants"). Shareholder approval of the Incentive Plan and
certification by the Compensation Committee that targeted performance has been
achieved are each required for payments under the plan to Section 162(m)
Participants to qualify for exemption from the deduction limit of Section
162(m). If shareholder approval is not obtained, no payments under the Plan will
be made to Section 162(m) Participants. The Compensation Committee has the
discretion to determine, on a case-by-case basis, whether awards under the plan
to Section 162(m) Participants will be designed to be eligible for this
exemption.
The following summarizes the Incentive Plan. That summary is qualified by
reference to the plan, which is attached to this proxy statement as Exhibit B.
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ELIGIBLE PARTICIPANTS
The Chief Executive Officer, the President, and other key executives the
Compensation Committee may designate from time to time may participate in the
Incentive Plan. To receive an award with respect to a calendar year, a
participant generally must be an employee of Wilmington Trust or one of its
subsidiaries on December 31 of that year.
PERFORMANCE GOALS
The Compensation Committee may establish one or more quantitative or
qualitative performance goals or other criteria as the basis for awarding
executives bonuses under the Incentive Plan. With respect to Section 162(m)
Participants, Section 162(m) of the Code provides guidelines within which the
Incentive Plan must generally be operated if payments are to qualify for
exemption from Section 162(m). For other participants, however, the Incentive
Plan gives the Compensation Committee discretion to determine performance
criteria and award amounts. In addition, the committee retains discretion to
grant awards under the plan to Section 162(m) Participants that do not comply
with the exemption from Section 162(m).
For Section 162(m) Participants whose bonuses Wilmington Trust desires to
be able to deduct, the performance goals will be quantitative and will be based
on any combination the Compensation Committee selects of earnings per share,
return on equity, return on assets, income, fees, assets, stockholder return,
expenses, chargeoffs, nonperforming assets, and overhead ratio. Those goals may
be company-wide or on a departmental, divisional, regional, or individual basis.
Any goal may be measured in absolute terms, by reference to internal performance
targets, or as compared to another company or companies, and may be measured by
the change in that performance target compared to a previous period. The goals
may be different each year, and will be established with respect to a particular
year by the latest date permitted by Section 162(m).
AWARDS
The Compensation Committee may provide for varying levels of payment under
an award depending on, for example, whether and to what extent performance goals
have been met or exceeded. No more than $2,000,000 will be payable as an award
to any one individual for any award year. All payments will be made in cash,
stock, or "phantom stock" units. The Compensation Committee may grant awards in
respect of up to 100,000 shares of stock under this plan.
ADMINISTRATION
The Compensation Committee has complete discretion to interpret and
administer the Incentive Plan and to determine eligibility to participate,
performance goals, and other criteria, whether the performance goals have been
achieved, the amount of payment to be made under an award, and everything else
necessary to carry out the Incentive Plan.
AMENDMENT AND TERMINATION
The Board may amend the Incentive Plan or the awards, as long as any
amendments are consistent with the plan's continued qualification under Section
162(m). The Board may terminate the Incentive Plan at any time.
Except for the cap on the maximum amount payable to any individual in any
award year set forth above, the actual amounts payable under the Incentive Plan
cannot be predicted because payment of those awards is contingent on attainment
of performance goals that may be modified from year to year. In addition, actual
awards may reflect the Compensation Committee's exercise of discretion to reduce
the award otherwise payable on achievement of the performance goals. Mr. Cecala
has been designated as the only Section 162(m) Participant in the Incentive Plan
for 1999.
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For a description of amounts paid under our Executive Incentive
Compensation Plan for 1998, see the Summary Compensation Table under the caption
"Executive Compensation" on page 12 of this proxy statement.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares of stock
issued and outstanding on the Record Date is required to approve this proposal.
AVAILABILITY OF FORM 10-K
WE WILL FILE WITH THE SEC AN ANNUAL REPORT ON FORM 10-K FOR 1998. WE WILL
PROVIDE A COPY OF THAT REPORT ON WRITTEN REQUEST WITHOUT CHARGE TO ANY PERSON
WHOSE PROXY WE ARE SOLICITING. PLEASE ADDRESS YOUR REQUEST TO ELLEN J. ROBERTS,
VICE PRESIDENT, MEDIA AND INVESTOR RELATIONS, WILMINGTON TRUST CORPORATION,
RODNEY SQUARE NORTH, 1100 NORTH MARKET STREET, WILMINGTON, DELAWARE 19890.
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1999 LONG-TERM INCENTIVE PLAN OF
WILMINGTON TRUST CORPORATION
EXHIBIT A
1. PURPOSE. The 1999 Long-term Incentive Plan (the "Plan") of Wilmington
Trust Corporation ("Wilmington Trust") is designed to encourage and facilitate
ownership of stock by, and provide additional incentive compensation based on
appreciation of that stock to, key employees and directors of Wilmington Trust
and other entities to whom Wilmington Trust's Compensation Committee (the
"Committee") grants Awards. Wilmington Trust hopes thereby to provide a
potential proprietary interest as additional incentive for the efforts of those
key employees and directors in promoting Wilmington Trust's continued growth and
the success of its business. The Plan also will aid Wilmington Trust in
attracting and retaining professional and managerial personnel.
2. ADMINISTRATION. The Committee shall administer the Plan. The Committee
shall have exclusive and final authority in each determination, interpretation,
or other action affecting the Plan and the Participants. The Committee shall
have the sole and absolute discretion to interpret the Plan, establish and
modify administrative rules for the Plan, select persons to whom Awards may be
granted, determine the terms and provisions of Award Agreements (which need not
be identical), determine all claims for benefits hereunder, impose conditions
and restrictions on Awards it determines to be appropriate, and take steps in
connection with the Plan and Awards it deems necessary or advisable.
A majority of the Committee's members shall constitute a quorum thereof,
and action by a majority of a quorum shall constitute action by the Committee.
Committee members may participate in meetings by conference telephone or other
similar communications equipment by means of which all members participating in
the meeting can hear each other. Any decision or determination reduced to
writing and signed by all of the Committee's members shall be as effective as if
that action had been taken by a vote at a meeting of the Committee duly called
and held.
3. THE SHARES. The Committee shall not authorize issuance of more than a
total of 1,500,000 shares hereunder, except as otherwise provided in Section
9(i) below. These may either be authorized and unissued shares or previously
issued shares Wilmington Trust has reacquired. The shares covered by any
unexercised portions of terminated Options granted under Section 5 and shares
subject to any Awards the Participant otherwise surrenders without receiving any
payment or other benefit may again be subject to new Awards hereunder. If a
Participant pays the purchase price of an Option or tax liability associated
with that exercise in whole or part by delivering Wilmington Trust stock, the
number of shares issuable in connection with the Option's exercise shall not
again be available for the grant of Awards. Shares used to measure the amount
payable to a Participant in respect of Performance Awards or Other Awards shall
not again be available for the grant of Awards. Shares issued in payment of
Performance Awards denominated in cash amounts shall not again be available for
the grant of Awards.
4. PARTICIPATION. The Committee shall designate Participants from time to
time in its sole and absolute discretion. Those Participants may include
officers, other key employees of, and consultants to Wilmington Trust or its
subsidiaries or affiliates. In making those designations, the Committee may take
into account the nature of the services the officers, key employees, and
consultants render, their present and potential contributions to Wilmington
Trust, and other factors the Committee deems relevant in its sole and absolute
discretion.
If the Committee designates a Participant in any year, it need not
designate that person to receive an Award in any other year. In addition, if the
Committee designates a Participant to receive an Award under one portion hereof,
it need not include that Participant under any other portion hereof. The
Committee may grant more than one type of Award to a Participant at one time or
at different times.
5. OPTIONS.
a. GRANT OF OPTIONS. The Committee shall designate the form of Options
and additional terms and conditions not inconsistent with the Plan. The
Committee may grant Options either alone or in addition to
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other Awards. The terms and conditions of Option Awards need not be the same
with respect to each Participant. The Committee may grant to Participants one or
more incentive stock options ("Incentive Stock Options") that meet the
requirements of Section 422 of the Code, stock options that do not meet those
requirements ("Nonstatutory Stock Options"), or both. To the extent any Option
does not qualify as an Incentive Stock Option, whether because of its
provisions, the time or manner of its exercise, or otherwise, that Option or the
portion thereof that does not so qualify shall constitute a separate
Nonstatutory Stock Option.
b. INCENTIVE STOCK OPTIONS. Each provision hereof and in any Award
Agreement the Committee designates as an Incentive Stock Option shall be
interpreted to entitle the holder to the tax treatment afforded by Section 422
of the Code, except in connection with the exercise of Options: (1) following a
Participant's Termination of Employment; (2) in accordance with the Committee's
specific determination with the consent of the affected Participant; or (3) to
the extent Section 9 would cause an Option to no longer be entitled to that
treatment. If any provision herein or the Award Agreement is held not to comply
with requirements necessary to entitle that Option to that tax treatment, then
except as otherwise provided in the preceding sentence: (x) that provision shall
be deemed to have contained from the outset the language necessary to entitle
the Option to that tax treatment; and (y) all other provisions herein and in
that Award Agreement shall remain in full force and effect. Except as otherwise
specified in the first sentence of this Section 5(b), if any Award Agreement
covering an Option the Committee designates to be an Incentive Stock Option does
not explicitly include any term required to entitle that Option to that tax
treatment, all those terms shall be deemed implicit in the designation of that
Option, and that Option shall be deemed to have been granted subject to all of
those terms.
c. OPTION PRICE. The Committee shall determine the per share exercise
price of each Option. That price shall be at least the greater of (1) the par
value per share of Wilmington Trust stock and (2) 100% of the last sale price of
Wilmington Trust stock on the Date of Grant.
d. OPTION TERM. The Committee shall fix the term of each Option, but no
Option shall be exercisable more than ten years after the date the Committee
grants it.
e. EXERCISABILITY. The Committee may at the time of grant determine
performance targets, waiting periods, exercise dates, and other restrictions on
exercise and designate those in the Award Agreement.
f. METHODE OF EXERCISE. Subject to any waiting periods that may apply
under Section 5(e) above, a Participant may exercise Options in whole or in part
at any time during the period of time, if any, set forth in the Award Agreement
during which that Option or portion thereof is exercisable by giving Wilmington
Trust written notice specifying the number of shares to be purchased. The
Participant must accompany that notice by payment in full of the purchase price
in a form the Committee may accept. If the Committee determines in its sole
discretion at or after grant, a Participant also may make payment in full or in
part in the form of shares of Wilmington Trust stock already owned and/or in the
form of shares otherwise issuable upon exercise of the Option. In either case,
the value of that stock shall be based on the Market Value Per Share of
Wilmington Trust stock tendered on the date the Option is exercised.
Notwithstanding the foregoing, the right to pay the purchase price of an
Incentive Stock Option in the form of already-owned shares or shares otherwise
issuable upon exercise of the Option may be authorized only at the time of
grant. No shares shall be issued until payment therefor has been made as
provided herein, except as otherwise provided herein. In general, a Participant
shall have the right to dividends and other rights of a shareholder with respect
to Wilmington Trust stock subject to the Option only when certificates for
shares of that stock are issued to the Participant.
g. ACCELERATION OR EXTENSION OF EXERCISE TIME. The Committee may, in its
sole and absolute discretion, on or after the Date of Grant, permit shares
subject to any Option to become exercisable or be purchased before that Option
would otherwise become exercisable under the Award Agreement. In addition, the
Committee may, in its sole and absolute discretion, on or after the Date of
Grant, permit any Option granted hereunder to be exercised after its expiration
date, subject to the limitation in Section 5(d) above.
h. TERMINATION OF EMPLOYMENT. Unless the Committee provides otherwise in
an Award Agreement or after granting an Option, if the employment of a
Participant who has received an Option terminates on other
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than: (1) the Participant's Normal Retirement Date; (2) the Participant's Other
Retirement Date; (3) the Participant's death; or (4) the Participant's
Disability, all Options previously granted to that Participant but not exercised
before that Termination of Employment shall expire as of that date.
i. DEATH, DISABILITY, OR RETIREMENT OF A PARTICIPANT. If a Participant
dies while employed by the employer he or she was employed with when he or she
was last granted Options, an Option theretofore granted to that Participant
shall not be exercisable after the earlier of the expiration of that Option or
three years after the date of that Participant's death, and only (1) by the
person or persons to whom the Participant's rights under that Option passed
under the Participant's will or by the laws of descent and distribution and (2)
if and to the extent the Participant was entitled to exercise that Option at the
date of his or her death.
If a Participant's employment with the employer he or she was employed with
when he or she was last granted Options terminates due to Disability or on the
Participant's Normal Retirement Date or Other Retirement Date, an Option
theretofore granted to that Participant shall not be exercisable after the
earlier of the expiration date of the Option or three years after the date of
the Disability or retirement. If the Participant has died before then, an Option
theretofore granted to that Participant shall be exercisable (1) only by the
person or persons to whom the Participant's rights under the Option passed under
the Participant's will or by the laws of descent and distribution and (2) if and
to the extent the Participant was entitled to exercise that Option on the date
of his or her death.
6. PERFORMANCE AWARDS.
a. GRANT OF PERFORMANCE AWARDS. The Committee also may grant awards
payable in cash or shares or a combination of both at the end of a specified
performance period ("Performance Awards") hereunder. These shall consist of the
right to receive payment measured by (1) a specified number of shares at the end
of an Award Period, (2) the Market Value Per Share of a specified number of
shares at the end of an Award Period, (3) the increase in the Market Value Per
Share of a specified number of shares during an Award Period, or (4) a fixed
cash amount payable at the end of an Award Period, contingent on the extent to
which certain pre-determined performance targets are met during the Award
Period. The Committee shall determine the Participants, if any, to whom
Performance Awards are awarded, the number of Performance Awards awarded to any
Participant, the duration of the Award Period during which any Performance Award
will be vested, and other terms and conditions of Performance Awards.
b. PERFORMANCE TARGETS. The Committee may establish performance targets
for Performance Awards in its sole and absolute discretion. These may include
individual performance standards or specified levels of revenues from
operations, earnings per share, return on shareholders' equity, and/or other
goals related to the performance of Wilmington Trust or any of its subsidiaries
or affiliates. The Committee may, in its sole and absolute discretion, in
circumstances in which events or transactions occur to cause the established
performance targets to be an inappropriate measure of achievement, change the
performance targets for any Award Period before the final determination of a
Performance Award.
c. EARNED PERFORMANCE AWARDS. In granting a Performance Award, the
Committee may prescribe a formula to determine the percentage of the Performance
Award to be earned based upon the degree performance targets are attained. The
degree of attainment of performance targets shall be determined as of the last
day of the Award Period.
d. PAYMENT OF EARNED PERFORMANCE AWARDS. Wilmington Trust shall pay
earned Performance Awards granted under Section 6(a)(2) or 6(a)(3) above in cash
or shares based on the Market Value Per Share of Wilmington Trust stock on the
last day of an Award Period, or a combination of cash and shares, at the
Committee's sole and absolute discretion. Wilmington Trust shall normally make
payment as soon as practicable after an Award Period. However, the Committee may
permit deferral of payment of all or a portion of a Performance Award payable in
cash upon a Participant's request made on a timely basis in accordance with
rules the Committee prescribes. Those deferred amounts may earn interest for the
Participant under the conditions of a separate agreement the Committee approves
and the Participant executes. In its sole and absolute discretion, the Committee
may define in the Award Agreement other conditions on paying earned Performance
Awards it deems desirable to carry out the purposes hereof.
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e. TERMINATION OF EMPLOYMENT. Unless the Committee provides otherwise in
the Award Agreement or as otherwise provided below, in the case of a
Participant's Termination of Employment before the end of an Award Period, the
Participant will not be entitled to any Performance Award.
f. DISABILITY, DEATH, OR RETIREMENT. Unless the Committee provides
otherwise in the Award Agreement or after the grant of a Performance Award, if a
Participant's Disability Date or the date of a Participant's Termination of
Employment due to death or retirement on or after his or her Normal Retirement
Date or Other Retirement Date occurs before the end of an Award Period, the
Participant or the Participant's Beneficiary shall be entitled to receive a
pro-rata share of his or her Award in accordance with Section 6(g) below.
g. PRO-RATA PAYMENT. The amount of any payment Wilmington Trust makes to
a Participant or that Participant's Beneficiary under circumstances described in
Section 6(f) above shall be determined by multiplying the amount of the
Performance Award that would have been earned, determined at the end of the
Performance Award Period, if that Participant's employment had not been
terminated, by a fraction, the numerator of which is the number of whole months
the Participant was employed during the Award Period and the denominator of
which is the total number of months in the Award Period. That payment shall be
made as soon as practicable after the end of that Award Period, and shall relate
to attainment of the applicable performance targets over the entire Award
Period.
h. OTHER EVENTS. Notwithstanding anything to the contrary contained in
this Section 6, the Committee may, in its sole and absolute discretion,
determine to pay all or any portion of a Performance Award to a Participant who
has terminated employment before the end of an Award Period under certain
circumstances, including a material change in circumstances arising after the
date the Performance Award is granted, and subject to terms and conditions the
Committee deems appropriate.
7. OTHER STOCK-BASED AWARDS.
a. GRANT OF OTHER AWARDS. The Committee may grant other Awards under this
Section 7 ("Other Awards"), valued in whole or in part by reference to, or
otherwise based on, shares of Wilmington Trust stock. Subject to the provisions
hereof, the Committee shall have the sole and absolute discretion to determine
the persons to whom and the time or times at which those Awards are made, the
number of shares to be granted pursuant thereto, if any, and all other
conditions of those Awards. Any Other Award shall be confirmed by an Award
Agreement. The Award Agreement shall contain provisions the Committee determines
necessary or appropriate to carry out the intent hereof with respect to the
Award.
b. TERMS OF OTHER AWARDS. In addition to the terms and conditions
specified in the Award Agreement, Other Awards made under this Section 7 shall
be subject to the following:
(1) Any shares subject to Other Awards may not be sold, assigned,
transferred, pledged, or otherwise encumbered before the date on which
those shares are issued or, if later, the date on which any applicable
restriction, performance, or deferral period lapses;
(2) If specified in the Award Agreement, the recipient of an Other
Award shall be entitled to receive, currently or on a deferred basis,
dividends or dividend equivalents with respect to the shares covered by
that Award, and the Committee may, in its sole and absolute discretion,
provide in the Award Agreement that those amounts be reinvested in
additional shares;
(3) The Award Agreement shall contain provisions dealing with the
disposition of the Award in the event of the Participant's Termination of
Employment before the exercise, realization, or payment of the Award. The
Committee may, in its sole and absolute discretion, waive any of the
restrictions imposed with respect to any Other Award; and
(4) Shares issued as a bonus pursuant to this Section 7 shall be
issued for the consideration the Committee determines is appropriate, in
its sole and absolute discretion, but rights to purchase shares shall be
priced at least 100% of the Market Value Per Share on the date the Other
Award is granted.
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8. PAYMENT OF ANNUAL RETAINER. During the term hereof, each non-employee
director of each company the Committee designates to participate in this Section
8 shall be paid the first half of his or her Annual Retainer in Wilmington Trust
stock. Each director also may elect to receive the second half of his or her
Annual Retainer in cash or Wilmington Trust stock, or a combination of both. The
Committee shall establish rules with respect to electing the form of payment
provided for in the preceding sentence to facilitate compliance with Rule 16b-3.
The number of shares to be issued to a non-employee director who receives shares
pursuant to this Section 8 shall be the dollar amount of the portion of the
Annual Retainer payable in shares divided by the Market Value Per Share of a
share of Wilmington Trust stock on the business day immediately preceding the
date that installment of the Annual Retainer is otherwise paid to that company's
directors. Wilmington Trust shall not be required to issue fractional shares.
Whenever under this Section 8 a fractional share would otherwise be required to
be issued, Wilmington Trust shall pay an amount in lieu thereof in cash based
upon the Market Value Per Share of that fractional share.
9. TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN.
a. EFFECT OF CHANGE IN CONTROL. Upon a Change in Control:
(1) Any and all Options shall become exercisable immediately; and
(2) The target values attainable under all Performance Awards and
Other Awards shall be deemed to have been fully earned for the entire Award
Period as of the effective date of the Change in Control.
b. LIMITATION. No person may be granted Awards in respect of more than
100,000 shares in any calendar year during the term hereof.
c. PLAN PROVISIONS CONTROL AWARD TERMS. The terms of the Plan govern all
Awards granted hereunder. The Committee shall not have the power to grant a
Participant any Award that is contrary to any provision hereof. If any provision
of an Award conflicts with the Plan as it is constituted on the date the Award
is granted, the terms of the Plan shall control. Except as provided in Sections
6(b) and 9(i) of the Plan, or unless the Committee provides otherwise in its
sole and absolute discretion in the Award Agreement, the terms of any Award
granted hereunder may not be changed after the date it is granted to materially
decrease the value of the Award without the express written approval of the
holder thereof. No person shall have any rights with respect to any Award until
Wilmington Trust and the Participant have executed and delivered an Award
Agreement or the Participant has received a written acknowledgement from
Wilmington Trust that constitutes an Award Agreement.
d. LIMITATIONS ON TRANSFER. A Participant may not transfer or assign his
or her rights or interests with respect to Awards except by will, the laws of
descent and distribution, or pursuant to a qualified domestic relations order,
as defined by the Code, Title I of ERISA, or the rules thereunder. Except as
otherwise specifically provided herein, a Participant's Beneficiary may exercise
the Participant's rights only to the extent they were exercisable hereunder at
the date of the Participant's death and are otherwise currently exercisable.
e. TAXES. If the Committee deems it necessary or desirable, Wilmington
Trust shall be entitled to withhold (or secure payment from a Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or that Wilmington Trust pays (1) with respect to any amount
payable and/or shares issuable under that Participant's Award, (2) with respect
to any income recognized upon the lapse of restrictions applicable to an Award,
or (3) upon a disqualifying disposition of shares received upon the exercise of
any Incentive Stock Option. Wilmington Trust may defer payment or issuance of
the cash or shares upon the grant, exercise, or vesting of an Award unless
indemnified to its satisfaction against any liability for that tax. The
Committee or its delegate shall determine the amount of that withholding or tax
payment. The Participant shall make that payment at the time the Committee
determines. In each Award Agreement, the Committee shall prescribe one or more
methods by which the Participant may satisfy his or her tax withholding
obligation. This may include the Participant's paying Wilmington Trust cash or
shares of Wilmington Trust stock or Wilmington Trust's withholding from the
Award, at the appropriate time, a number of shares sufficient to satisfy those
tax withholding requirements, based on the Market Value Per Share of those
shares. In its sole and absolute discretion, the Committee may establish rules
and procedures relating to any withholding methods it deems necessary or
appropriate. These may include rules and
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procedures relating to elections by Participants who are subject to Section 16
of the Exchange Act to have shares withheld from an Award to meet those
withholding obligations.
f. AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES. Income a Participant
recognizes pursuant to the provisions hereof shall not be included in
determining benefits under any employee pension benefit plan, as that term is
defined in Section 3(2) of ERISA, group insurance, or other benefit plan
applicable to the Participant that the Participant's employer maintains, except
if those plans or the Committee provide otherwise.
g. COMPLIANCE WITH RULE 16b-3 AND SECTION 162(m).
(1) If the Committee desires to structure any Award so that the
compensation payable thereunder will qualify as "performance based" under
Section 162(m), the Committee may establish objective performance goals as
the basis for that Award. Those performance goals will be based on any
combination the Committee selects of earnings per share, return on equity,
return on assets, income, fees, assets, stockholder return, expenses,
chargeoffs, nonperforming assets, and overhead ratio. Those goals may be
company-wide or on a departmental, divisional, regional, or individual
basis. Any goal may be measured in absolute terms, by reference to internal
performance targets, or as compared to another company or companies, and
may be measured by the change in that performance target compared to a
previous period. The goals may be different each year, and will be
established with respect to a particular year by the latest date permitted
by Section 162(m). No payment under such an Award will be made under the
Plan to a Section 162(m) Participant unless the pre-established performance
goals are met or exceeded.
(2) It is intended that the Plan be applied and administered in
compliance with Rule 16b-3 and the exception from Section 162(m). If any
provision of the Plan would be in violation of the exception from Section
162(m) if applied as written, that provision shall not have effect as
written and shall be given effect so as to comply with that exception as
the Committee determines in its sole and absolute discretion. Wilmington
Trust's Board of Directors is authorized to amend the Plan, and the
Committee is authorized to make any such modifications to Award Agreements,
to comply with Rule 16b-3 and the exception from Section 162(m), as they
may be amended from time to time, and to make any other amendments or
modifications deemed necessary or appropriate to better accomplish the
purposes of the Plan in light of any amendments to Rule 16b-3 or the
exception from Section 162(m). Notwithstanding the foregoing, Wilmington
Trust's Board of Directors may amend the Plan so that it (or certain of its
provisions) no longer comply with either or both of Rule 16b-3 or the
exception from Section 162(m) if the Board specifically determines that
compliance is no longer desired. The Committee may grant Awards that do not
comply with Rule 16b-3 and/or the exception from Section 162(m) if the
Committee determines, in its sole and absolute discretion, that it is in
Wilmington Trust's interest to do so.
h. AMENDMENT AND TERMINATION.
(1) AMENDMENT. Wilmington Trust's Board of Directors shall have
complete power and authority to amend the Plan at any time it deems it
necessary or appropriate. However, those directors shall not, without the
affirmative approval of Wilmington Trust's shareholders, make any amendment
that requires shareholder approval under Rule 16b-3, the Code, or any other
applicable law or rule of any exchange on which Wilmington Trust's shares
are listed unless the directors determine that compliance with Rule 16b-3,
the Code, or those laws or rules is no longer desired. No termination or
amendment hereof may, without the consent of the Participant to whom any
Award has been granted, adversely affect the right of that individual under
that Award. However, the Committee may make provision in the Award
Agreement for amendments it deems appropriate in its sole and absolute
discretion.
(2) TERMINATION. Wilmington Trust's Board of Directors may terminate
the Plan at any time. No Award shall be granted hereunder after that
termination. However, that termination shall not have any other effect. Any
Award outstanding at the termination hereof may be exercised or amended
after that termination at any time before the expiration of that Award to
the same extent that Award would have been exercisable or could have
been amended if the Plan had not terminated.
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i. CHANGES IN WILMINGTON TRUST'S CAPITAL STRUCTURE. The existence of
outstanding Awards shall not affect the right of Wilmington Trust or its
shareholders to make or authorize any and all adjustments, recapitalizations,
reclassifications, reorganizations, and other changes in Wilmington Trust's
capital structure, Wilmington Trust's business, any merger or consolidation of
Wilmington Trust, any issue of bonds, debentures, or preferred stock, Wilmington
Trust's liquidation or dissolution, any sale or transfer of all or any part of
Wilmington Trust's assets or business, or any other corporate act or proceeding,
whether of a similar nature or otherwise.
The number and kind of shares subject to outstanding Awards, the purchase
or exercise price of those Awards, the number and kind of shares available for
Awards subsequently granted, and the limitation in Section 9(b) hereof shall be
adjusted appropriately to reflect any stock dividend, stock split, combination
or exchange of shares, merger, consolidation, or other change in capitalization
with a similar substantive effect on the Plan or Awards granted hereunder. The
Committee shall have the power and sole and absolute discretion to determine the
nature and amount of the adjustment to be made in each case. However, in no
event shall any adjustment be made under the provisions of this Section 9(i) to
any outstanding Award if an adjustment has been made or will be made to the
shares of Wilmington Trust stock awarded to a Participant in that person's
capacity as a shareholder.
If Wilmington Trust is merged or consolidated with another entity and
Wilmington Trust is not the surviving entity, or if Wilmington Trust is
liquidated or sells or otherwise disposes of all or substantially all of its
assets to another entity while unexercised Awards remain outstanding, then (1)
subject to the provisions of Section 9(i)(2) below, after the effective date of
that merger, consolidation, liquidation, or sale, each holder of an outstanding
Award shall be entitled to receive, upon exercise of that Award in lieu of
shares, other stock or other securities as the holders of shares of Wilmington
Trust stock received in the merger, consolidation, liquidation, or sale; and (2)
the Committee may cancel all outstanding Awards as of the effective date of that
merger, consolidation, liquidation, or sale, provided that (x) notice of that
cancellation has been given to each holder of an Award and (y) in addition to
any rights he or she may have under Section 9(a) above, each holder of an Award
shall have the right to exercise that Award in full, without regard to any
limitations set forth in or imposed pursuant to Section 5, 6, or 7 above, during
a 30-day period preceding the effective date of the merger, consolidation,
liquidation, or sale. The exercise and/or vesting of any Award that was
permissible solely because of this Section 9(i)(2)(y) shall be conditioned on
consummation of the merger, consolidation, liquidation, or sale. Any Awards not
exercised as of the date of the merger, consolidation, liquidation, or sale
shall terminate as of that date.
If Wilmington Trust is consolidated or merged with another entity under
circumstances in which Wilmington Trust is the surviving entity, and its
outstanding shares are converted into shares of a third entity, a condition to
the merger or consolidation shall be that the third entity succeed to Wilmington
Trust's rights and obligations hereunder, and that the Plan be administered by a
committee of the Board of that entity.
Comparable rights shall accrue to each Participant in the event of
successive reorganizations, mergers, consolidations, or other transactions
similar to those described above.
Except as expressly provided herein, Wilmington Trust's issuance of shares
or any other securities for cash, property, labor, or services, either upon
direct sale, the exercise of rights or warrants to subscribe therefor, or
conversion of shares or obligations of Wilmington Trust convertible into shares
or other securities shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number, class, or price of shares then subject to
Awards outstanding.
After any reorganization, merger, or consolidation in which Wilmington
Trust or one of its subsidiaries or affiliates is a surviving entity, the
Committee may grant substituted Awards replacing old options or other awards
granted under a plan of another party to the reorganization, merger, or
consolidation whose stock subject to the old options or awards may no longer be
issued following that reorganization, merger, or consolidation. The Committee
shall determine the foregoing adjustments and the manner in which the foregoing
provisions are applied in its sole and absolute discretion. Any of those
adjustments may provide for eliminating any fractional shares of Wilmington
Trust stock that might otherwise become subject to any Options or other Awards.
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j. PERIOD OF APPROVAL AND TERM OF PLAN. The Plan shall be submitted to
Wilmington Trust's shareholders at their annual meeting scheduled to be held on
May 20, 1999 or any adjournment or postponement thereof. The Plan shall be
adopted and become effective only when approved by Wilmington Trust's
shareholders. Awards may be granted hereunder at any time up to and including
May 19, 2003, at which time the Plan will terminate, except with respect to
Awards then outstanding. Those shall remain in effect until their exercise,
expiration, or termination in accordance herewith.
k. COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES. No Award shall
be exercisable, and no shares shall be delivered hereunder, except in compliance
with all applicable Federal and state laws and regulations, the rules of the New
York Stock Exchange, and all other stock exchanges on which Wilmington Trust
shares are listed. Any certificate evidencing shares issued hereunder may bear
legends the Committee deems advisable to ensure compliance with Federal and
state laws and regulations. No Award shall be exercisable, and no shares shall
be delivered hereunder, until Wilmington Trust has obtained consent or approval
from Federal and state regulatory bodies that have jurisdiction over matters as
the Committee deems advisable.
If a Participant's Beneficiary exercises an Award, the Committee may
require reasonable evidence regarding the ownership of the Award and consents,
rulings, or determinations from taxing authorities the Committee deems
advisable.
l. NO RIGHT OF EMPLOYMENT. Neither the adoption of the Plan nor its
operation, nor any document describing or referring to the Plan or any part
hereof, shall confer upon any Participant any right to continue in the employ of
the Participant's employer, nor in any other way affect the employer's right or
power to terminate the Participant's employment at any time, to the same extent
as might have been done if the Plan had not been adopted.
m. USE OF PROCEEDS. Funds Wilmington Trust receives on the exercise of
Awards shall be used for its general corporate purposes.
n. SEVERABILITY. Whenever possible, each provision hereof and of every
Award granted hereunder shall be interpreted in a manner as to be effective and
valid under applicable law. If any provision hereof or of any Award granted
hereunder is held to be prohibited by or invalid under applicable law, then (1)
that provision shall be deemed amended to accomplish the provision's objectives
as originally written to the fullest extent permitted by law and (2) all other
provisions hereof and of every other Award granted hereunder shall remain in
full force and effect.
o. CONSTRUCTION OF THE PLAN. The place of administration of the Plan
shall be in Delaware, and the validity, construction, interpretation,
administration, and effect hereof, its rules and regulations, and rights
relating hereto shall be determined solely in accordance with Delaware law,
other than the conflict of law provisions of those laws, and except as that law
is superseded by Federal law.
p. INTERPRETATION OF THE PLAN. Headings are given to the sections hereof
solely as a convenience for reference. Those headings and the numbering and
paragraphing hereof shall not be deemed in any way material or relevant to the
construction of any provision hereof. The use of a singular shall also include
within its meaning the plural, and vice versa, where appropriate.
q. NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against Wilmington Trust, the Committee, or any other person
interpreting any term of the Plan, any Award granted under the Plan, or any rule
or procedure the Committee establishes.
r. COSTS AND EXPENSES. Wilmington Trust shall bear all costs and expenses
incurred in administering the Plan.
s. UNFUNDED PLAN. The Plan shall be unfunded. Wilmington Trust shall not
be required to establish any special or separate fund or otherwise segregate
assets to assure payment of any Award.
t. SURRENDER OF AWARDS. Any Award granted to a Participant may be
surrendered to Wilmington Trust for cancellation on terms the Committee and the
Participant approve.
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10. DEFINITIONS. For purposes of the Plan, capitalized terms not
otherwise defined herein have the following meanings:
a. "Annual Retainer" means the payment(s) the Board of Directors of each
company the Committee designates to participate in Section 8 determines from
time to time to be the annual retainer payable each year to each non-employee
director thereof.
b. "Award" means (1) any grant to a Participant of any one or a combination
of Incentive Stock Options, Nonstatutory Stock Options, Performance Awards, or
Other Awards or (2) shares of Wilmington Trust stock received with respect to an
Annual Retainer pursuant to Section 8.
c. "Award Agreement" means a written agreement between Wilmington Trust and
a Participant or a written acknowledgement from Wilmington Trust specifically
setting forth the terms and conditions of an Award granted to a Participant
under the Plan.
d. "Award Period" means, with respect to an Award, the period of time, if
any, set forth in the Award Agreement during which specified performance goals
must be achieved or other conditions set forth in the Award Agreement must be
satisfied.
e. "Beneficiary" means an individual, trust, or estate who or that, by will
or the laws of descent and distribution, succeeds to a Participant's rights and
obligations under the Plan and an Award Agreement upon the Participant's death.
f. "Cause" means, with respect to a Participant who is an employee of
Wilmington Trust or one of its subsidiaries or affiliates or who is a
consultant, termination for, as the Committee determines in its sole and
absolute discretion, the Participant's personal dishonesty, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule, or regulation (other
than traffic violations or similar offenses), or a final cease-and-desist order.
g. "Change in Control" means any of the events described below, directly or
indirectly or in one or more series of transactions. However, the Committee may,
in its sole and absolute discretion, specify in any Award Agreement a more
restrictive definition of Change in Control. In that event, the definition of
Change in Control set forth in that Award Agreement shall apply to the Award
granted thereunder:
(1) Approval by Wilmington Trust Company's ("WTC's") or Wilmington
Trust's shareholders of a consolidation or merger of WTC or Wilmington
Trust with any Third Party, unless WTC or Wilmington Trust is the entity
surviving that merger or consolidation;
(2) Approval by WTC's or Wilmington Trust's shareholders of a transfer
of all or substantially all of the assets of WTC or Wilmington Trust to a
Third Party or of a complete liquidation or dissolution of WTC or
Wilmington Trust;
(3) Any person, entity, or group that is a Third Party, without prior
approval of WTC's or Wilmington Trust's Board of Directors, by itself or
through one or more persons or entities:
(a) Acquires beneficial ownership of 15% or more of any class of
WTC's or Wilmington Trust's Voting Stock;
(b) Acquires irrevocable proxies representing 15% or more of any
class of WTC's or Wilmington Trust's Voting Stock;
(c) Acquires any combination of beneficial ownership of Voting
Stock and irrevocable proxies representing 15% or more of any class of
WTC's or Wilmington Trust's Voting Stock;
(d) Acquires the ability to control in any manner the election of a
majority of WTC's or Wilmington Trust's directors; or
(e) Acquires the ability to directly or indirectly exercise a
controlling influence over the management or policies of WTC or
Wilmington Trust;
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(4) Any election occurs of persons to Wilmington Trust's Board of
Directors that causes a majority of that Board of Directors to consist of
persons other than (a) persons who were members of that Board of Directors
on February 29, 1996 (the "Effective Date") and/or (b) persons who were
nominated for election as members of that Board of Directors by Wilmington
Trust's Board of Directors (or a committee thereof) at a time when the
majority of that Board of Directors (or that committee) consisted of
persons who were members of Wilmington Trust's Board of Directors on the
Effective Date. However, any person nominated for election by Wilmington
Trust's Board of Directors (or a committee thereof), a majority of whom are
persons described in clauses (a) and/or (b), or are persons who were
themselves nominated by that Board of Directors (or a committee thereof),
shall be deemed for this purpose to have been nominated by a Board of
Directors composed of persons described in clause (a) above.
A Change in Control shall not include any of the events described above if
they (x) occur in connection with the appointment of a receiver or conservator
for WTC or Wilmington Trust, provision of assistance under Section 13(c) of the
Federal Deposit Insurance Act (the "FDI Act"), the approval of a supervisory
merger, a determination that WTC is in default as defined in Section 3(x) of the
FDI Act, insolvent, or in an unsafe or unsound condition to transact business,
or, with respect to any Participant, the suspension, removal, and/or temporary
or permanent prohibition by a regulatory agency of that Participant from
participating in WTC's or Wilmington Trust's business or (y) are the result of a
Third Party inadvertently acquiring beneficial ownership or irrevocable proxies
or a combination of both for 15% or more of any class of WTC's or Wilmington
Trust's voting stock, and that Third Party as promptly as practicable thereafter
divests itself of the beneficial ownership or irrevocable proxies for a
sufficient number of shares so that the Third Party no longer has beneficial
ownership or irrevocable proxies or a combination of both for 15% or more of any
class of WTC's or Wilmington Trust's Voting Stock.
h. "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor thereto. References to a section of the Code shall
include that section and any comparable section or sections of any future
legislation that amends, supplements, or supersedes that section.
i. "Committee" means a committee of Wilmington Trust's Board of Directors
that may be appointed by that Board from time to time. That Board may, from time
to time, appoint members of the Committee in substitution for members who were
previously appointed and may fill vacancies in the Committee, however caused.
The Committee shall be composed of at least two directors of Wilmington Trust,
each of whom is a "non-employee director" as defined in Rule 16b-3 and an
"outside director" within the meaning of Section 162(m). The Committee shall
have the power and authority to administer the Plan in accordance with Section
2.
j. "Date of Grant" means the date designated by the Plan or the Committee
as the date as of which an Award is granted. The Date of Grant shall not be
earlier than the date on which the Committee approves the granting of the Award.
k. "Disability" means any physical or mental injury or disease of a
permanent nature that renders a Participant incapable of meeting the
requirements of the employment or other work the Participant performed
immediately before that disability commenced. The Committee shall make the
determination of whether a Participant is disabled and when the Participant
becomes disabled in its sole and absolute discretion.
l. "Disability Date" means the date which is six months after the date on
which a Participant is first absent form active employment or work due to a
Disability.
m. "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
n. "Exchange Act" means the Securities Exchange Act of 1934, as amended.
o. "Market Value Per Share" of a share of Wilmington Trust stock means, as
of any date, the last sale price of a share of Wilmington Trust stock on that
date on the principal national securities exchange on which Wilmington Trust
stock is then traded. If Wilmington Trust stock is not then traded on a national
securities exchange, "Market Value Per Share" shall mean the last sale price or,
if none, the average of the bid and asked prices of Wilmington Trust stock on
that date as reported on the National Association of Securities
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Dealers Automated Quotation System ("Nasdaq"). However, if there were no sales
reported as of that date, the Market Value Per Share shall be computed as of the
last date preceding that date on which a sale was reported. If any such exchange
or quotation system is closed on any day on which the Market Value Per Share is
to be determined, the Market Value Per Share shall be determined as of the first
date immediately preceding that date on which that exchange or quotation system
was open for trading.
p. "Normal Retirement Date" means the date on which a Participant
terminates active employment with the employer he or she was employed with when
he or she was last granted Awards on or after attaining age 65, but does not
include termination for Cause.
q. "Option" means any option to purchase Wilmington Trust stock the
Committee grants to a Participant under Section 5.
r. "Other Retirement Date" means a date, on or after a Participant attains
age 55 but earlier than the Participant's Normal Retirement Date, that the
Committee in its sole and absolute discretion specifically approves and
designates in writing to be the date upon which a Participant retires for
purposes hereof, but does not include termination for Cause.
s. "Participant" means any employee of or consultant to Wilmington Trust or
any of its subsidiaries or affiliates whom the Committee selects to receive
Options, Performance Awards, or Other Awards or a director who receives some or
all of an Annual Retainer in shares of Wilmington Trust stock.
t. "Rule 16b-3" means Rule 16b-3 promulgated by the SEC under Section 16 of
the Exchange Act and any successor rule.
u. "SEC" means the Securities and Exchange Commission.
v. "Section 162(m)" means Section 162(m) of the Code and its regulations.
w. "Section 162(m) Participant" means a Participant a portion of whose
compensation would be subject to Section 162(m).
x. "Subsidiary" means a company more than 50% of the equity interests of
which Wilmington Trust beneficially owns, directly or indirectly.
y. "Termination of Employment" means, with respect to an employee
Participant, the voluntary or involuntary termination of the Participant's
employment with Wilmington Trust or any of its subsidiaries or affiliates for
any reason (including, without limitation, death, Disability, retirement, or as
the result of the sale or other divestiture of the Participant's employer or any
similar transaction in which the Participant's employer ceases to be Wilmington
Trust or one of its subsidiaries or affiliates). With respect to a consultant,
Termination of Employment means termination of the Participant's services as a
consultant to Wilmington Trust or one of its subsidiaries or affiliates.
z. "Third Party" includes a person or entity or a group of persons or
entities acting in concert not wholly-owned by Wilmington Trust or WTC, directly
or indirectly.
aa. "Voting Stock" means the classes of stock of Wilmington Trust or WTC
entitled to vote generally in the election of directors of Wilmington Trust or
WTC, as the case may be.
bb. "Wilmington Trust stock" means Wilmington Trust's common stock, par
value $1 per share.
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WILMINGTON TRUST CORPORATION
EXECUTIVE INCENTIVE PLAN
EXHIBIT B
1. PURPOSE. The purpose of the Wilmington Trust Corporation ("Wilmington
Trust") Executive Incentive Plan (the "Incentive Plan") is to provide senior
management annual cash awards that recognize and reward the achievement of
performance goals.
2. EFFECTIVE DATE OF PLAN. The Incentive Plan shall be effective as of
January 1, 1999, but any payments under the Incentive Plan to individuals
("Section 162(m) Participants") a portion of whose compensation would be subject
to Section 162(m) of the Internal Revenue Code and the related regulations
("Section 162(m)") shall be made contingent on the Incentive Plan's approval by
Wilmington Trust's shareholders.
3. PLAN ADMINISTRATOR. Wilmington Trust's Compensation Committee shall
administer the Incentive Plan. The Compensation Committee consists of members
appointed by the Board of Directors from time to time. Each member of the
Compensation Committee shall be an "outside director" within the meaning of
Section 162 (m). The Compensation Committee shall have full power and authority,
subject to the provisions of the plan and applicable law, to (a) establish,
amend, suspend, or waive rules and regulations and appoint agents it deems
necessary or advisable for the plan's proper administration, (b) construe,
interpret, and administer the plan and any instrument or agreement relating to
the plan, and (c) make all other determinations and take all other actions
necessary or advisable for the plan's administration. Unless the Incentive Plan
expressly provides otherwise, each determination the Compensation Committee
makes and each action it takes pursuant to the plan or any instrument or
agreement relating to the plan (x) shall be within the Compensation Committee's
sole discretion, (y) may be made at any time, and (z) shall be final, binding,
and conclusive for all purposes on all persons, including participants in the
plan, their legal representatives, and beneficiaries and employees of Wilmington
Trust and its subsidiaries.
4. ELIGIBILITY. The Chief Executive Officer, the President, and other
senior officers of Wilmington Trust and its subsidiaries are eligible to
participate in the Incentive Plan if the Compensation Committee designates them.
5. AWARDS.
5.1 For each calendar year (a "Plan Year"), at such times as the
Compensation Committee determines, it shall establish the basis and terms
of participation of participants who are not Section 162(m) Participants.
In doing so, the Compensation Committee may establish one or more
quantitative or qualitative performance or other goals or criteria as the
basis for awarding executives bonuses under the Incentive Plan.
5.2 For Section 162(m) Participants, unless the Compensation
Committee determines otherwise, within 90 days after the commencement of
each Plan Year, it shall designate:
a. The officers who will be deemed Section 162(m) Participants for
that Plan Year;
b. The Financial Criteria that will apply to awards to Section
162(m) Participants for the Plan Year; and
c. The Performance Goals the Corporation must meet for Section
162(m) Participants to earn awards for the Plan Year and a payout matrix
or formula for those Financial Criteria and Performance Goals.
After the 90(th) day of a Plan Year, the Compensation Committee may
designate additional officers as participants in the Plan for that Plan Year.
However, any award a participant who also is a Section 162(m) Participant earns
for that partial Plan Year will be pro-rated based on the number of days during
the Plan Year in which the participant participates in the Plan. The Performance
Goals for those additional
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Section 162(m) Participants will be established before 25% of the days remaining
in that partial Plan Year have expired.
Any participant who terminates employment, either voluntarily or
involuntarily, before awards are paid for a Plan Year will be ineligible for an
award under the Plan. However, the Compensation Committee may, in its sole and
complete discretion, determine to pay an award if termination was due to death,
disability, retirement, or a Change in Control of the Corporation, but:
x. No such payment shall be made to any participant for a Plan Year
before awards for that Plan Year are payable generally; and
y. No such payment shall be made to any Section 162(m) Participant
unless the Performance Goals established for that participant have been
attained.
For purposes hereof, the term "Change in Control" means any of the events
described below, directly or indirectly or in one or more series of
transactions:
(1) Approval by Wilmington Trust Company's ("WTC's") or Wilmington
Trust's stockholders of a consolidation or merger of WTC or Wilmington
Trust with any third party (including a single person or entity or a group
of persons or entities acting in concert) not wholly-owned, directly or
indirectly, by WTC or Wilmington Trust (a "Third Party"), unless WTC or
Wilmington Trust is the entity surviving that merger or consolidation;
(2) Approval by WTC's or Wilmington Trust's stockholders of a
transfer of all or substantially all of the assets of WTC or Wilmington
Trust to a Third Party or of a complete liquidation or dissolution of WTC
or Wilmington Trust;
(3) Any person, entity, or group which is a Third Party, without
prior approval of WTC's or Wilmington Trust's Board of Directors, by itself
or through one or more subsidiaries:
(a) Acquires beneficial ownership of 15% or more of any class of
WTC's or Wilmington Trust's voting stock;
(b) Acquires irrevocable proxies representing 15% or more of any
class of WTC's or Wilmington Trust's voting stock;
(c) Acquires any combination of beneficial ownership of voting
stock and irrevocable proxies representing 15% or more of any class of
WTC's or Wilmington Trust's voting stock;
(d) Acquires the ability to control in any manner the election of
a majority of WTC's or Wilmington Trust's directors; or
(e) Acquires the ability to exercise a controlling influence over
the management or policies of WTC or Wilmington Trust, directly or
indirectly; or
(4) Any election occurs of persons to Wilmington Trust's Board of
Directors that causes a majority of that Board of Directors to consist of
persons other than (x) persons who were members of that Board of Directors
on February 29, 1996 (the "Effective Date") and/or (y) persons who were
nominated for election as members of that Board of Directors by Wilmington
Trust's Board of Directors (or a committee thereof) at a time when the
majority of that Board of Directors (or that committee) consisted of
persons who were members of Wilmington Trust's Board of Directors on the
Effective Date. However, any person nominated for election by Wilmington
Trust's Board of Directors (or a committee thereof), a majority of whom are
persons described in clauses (x) and/or (y), or are persons who were
themselves nominated by that Board of Directors (or a committee thereof),
shall be deemed for this purpose to have been nominated by a Board of
Directors composed of persons described in clause (x) above.
However, a Change in Control shall not include any of the events described
above if they (i) occur in connection with the appointment of a receiver or
conservator for WTC or Wilmington Trust, provision of assistance under Section
13(c) of the Federal Deposit Insurance Act (the "FDI Act"), the approval of a
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<PAGE> 43
supervisory merger, a determination that WTC is in default as defined in Section
3(x) of the FDI Act, insolvent or in an unsafe or unsound condition to transact
business, or, with respect to any participant, the suspension, removal, and/or
temporary or permanent prohibition by a regulatory agency of that participant
from participating in WTC's or Wilmington Trust's business or (ii) are the
result of a Third Party inadvertently acquiring beneficial ownership or
irrevocable proxies or a combination of both for 15% or more of any class of
WTC's or Wilmington Trust's voting stock, and that Third Party as promptly as
practicable thereafter divests itself of the beneficial ownership or irrevocable
proxies for a sufficient number of shares so that the Third Party no longer has
beneficial ownership or irrevocable proxies or a combination of both for 15% or
more of any class of WTC's or Wilmington Trust's voting stock.
6. FINANCIAL CRITERIA. For each Plan Year, unless the Compensation
Committee determines otherwise, it shall designate one or more financial
criteria (the "Financial Criteria") set forth in this Section 6 for use in
determining awards for Section 162(m) Participants for that Plan Year. Financial
Criteria shall consist of one or more of the following financial measures:
earnings per share, return on equity, return on assets, income, fees, assets,
stockholder return, expenses, chargeoffs, nonperforming assets, and overhead
ratio. Any of the Financial Criteria may be company-wide or on a departmental,
divisional, regional, or individual basis. In addition, any of the Financial
Criteria may be measured in absolute terms, by reference to internal performance
targets, or as compared to another company or companies, and may be measured by
the change in that performance target compared to a previous period. The
Compensation Committee retains the discretion to determine whether an award will
be paid under any one or more of the Financial Criteria.
7. PERFORMANCE GOALS. For each Plan Year, the Compensation Committee
shall establish specific, objective performance goals (the "Performance Goals"),
the outcome of which is substantially uncertain at the time they are
established, for each of the Financial Criteria the Compensation Committee
designates for that Plan Year against which actual performance is to be measured
to determine the amount of awards to Section 162(m) Participants. Performance
Goals the Compensation Committee establishes may be described by means of a
matrix or formula providing for goals resulting in the payment of awards under
the plan.
8. DETERMINATION AND PAYMENT OF AWARDS.
8.1. As soon as practicable after the end of a Plan Year, the
Compensation Committee will determine the amount of the award each
participant has earned. The Compensation Committee may, in its sole and
absolute discretion, reduce the amount which would otherwise be payable
under the Incentive Plan. Payments will be made promptly after the
Compensation Committee determines the amount of the awards unless payment
of an award has been deferred pursuant to Section 10.6. The Compensation
Committee's determination with respect to Section 162(m) Participants must
include its certification in writing that the Performance Goals and any
other terms of the award were satisfied. Minutes of the Compensation
Committee's meeting or any action by written consent shall satisfy the
written certification requirement.
8.2. The Corporation shall pay awards under the Incentive Plan in
cash, stock, or "phantom stock" units. The Compensation Committee may grant
awards in respect of up to a total of 100,000 shares of stock under the
Incentive Plan.
8.3. Notwithstanding anything to the contrary contained herein, the
maximum dollar amount with respect to which awards may be granted under the
Incentive Plan for any Plan Year to any participant may not exceed
$2,000,000.
9. TERMINATION, SUSPENSION, OR MODIFICATION OF THE PLAN. The Board of
Directors may at any time, with or without notice, terminate, suspend, or modify
the Incentive Plan in whole or in part. The Board of Directors shall not amend
the Incentive Plan in violation of law or in contravention of Section 162(m).
The Compensation Committee may make any amendments to the Incentive Plan not in
violation of law required to conform the Incentive Plan to the requirements of
Section 162 (m). The Compensation Committee also may correct any defect, supply
any omission, or reconcile any inconsistency in the Incentive Plan in the manner
and to the extent it deems desirable to carry the Incentive Plan into effect.
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<PAGE> 44
10. MISCELLANEOUS.
10.1 NO ASSIGNMENT. No award under the Incentive Plan shall be
subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution, or levy of
any kind, either voluntary or involuntary, including any liability which is
for alimony or other payment for the support of a spouse or former spouse,
or for any other relative of a participant, prior to actually being
received by the participant or his or her designated beneficiary. Any
attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge, or otherwise dispose of any right to an award hereunder shall be
void.
10.2 NO RIGHT OF EMPLOYMENT. Neither the adoption of the Incentive
Plan, the determination of eligibility to participate in the Incentive
Plan, nor the granting of an award under the Incentive Plan shall confer
upon any participant any right to continue in the employ of Wilmington
Trust or any of its subsidiaries or interfere in any way with the right of
Wilmington Trust or its subsidiaries to terminate that employment at any
time.
10.3 TAX WITHHOLDING. Wilmington Trust shall have the right to
withhold the amount of any tax attributable to amounts payable under the
Incentive Plan.
10.4 GOVERNING LAW. The Incentive Plan and all determinations under
it shall be governed by and construed in accordance with Delaware law,
other than the conflict of law provisions of those laws, and except as that
law is superseded by Federal law.
10.5 OTHER PLANS. Nothing in the Incentive Plan shall be construed
as limiting the authority of the Compensation Committee, the Board of
Directors, Wilmington Trust, or any subsidiary of Wilmington Trust to
establish any other compensation plan or as in any way limiting its or
their authority to pay bonuses or supplemental compensation to any persons
employed by Wilmington Trust or a subsidiary of Wilmington Trust, whether
that person is a participant and regardless of how the amount of that
compensation or bonus is determined.
10.6 DEFERRALS OF AWARDS. A participant may elect to defer payment
of his or her award under the Incentive Plan if deferral of the award under
the Incentive Plan is permitted pursuant to the terms of a deferred
compensation program of Wilmington Trust existing at the time the election
to defer is permitted to be made and the participant complies with the
terms of that program.
10.7 SECTION 162(m). Unless the Board of Directors expressly
determines otherwise, if any provision of the Incentive Plan is found not
to be in compliance with the exception from Section 162(m), that provision
shall be deemed amended so that the provision does comply to the extent
permitted by law. In every event, the Incentive Plan shall be construed in
favor of payments to Section 162(m) Participants meeting the
"performance-based compensation" exception contained in Section 162(m).
Notwithstanding anything to the contrary contained herein, the Compensation
Committee retains discretion to grant awards hereunder to participants that
do not comply with that exception.
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<PAGE> 45
[WILMINGTON TRUST LOGO]
WILMINGTON TRUST CORPORATION
ANNUAL SHAREHOLDERS' MEETING
THURSDAY, MAY 20, 1999
10:00 A.M.
WILMINGTON TRUST PLAZA
MEZZANINE LEVEL
301 WEST ELEVENTH STREET
WILMINGTON, DELAWARE
[WILMINGTON WILMINGTON TRUST CORPORATION
TRUST RODNEY SQUARE NORTH
LOGO] 1100 NORTH MARKET STREET
WILMINGTON, DE 19890-0001 PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON MAY 20, 1999.
The shares of stock you hold in your account or in a dividend reinvestment
account will be voted as you specify below.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1, 2, 3, AND 4.
By signing the proxy, you revoke all prior proxies and appoint David R. Gibson
and Thomas P. Collins, and each of them, with full power of substitution, to
vote your shares on the matters shown on the reverse side and any other matters
which may come before the Annual Meeting and all adjournments.
SEE REVERSE FOR VOTING INSTRUCTIONS.
<PAGE> 46
To Our Shareholders,
You are cordially invited to attend our Annual Shareholders' Meeting, to be held
at the Wilmington Trust Plaza, Mezzanine Level, 301 West Eleventh Street,
Wilmington, Delaware, at 10:00 A.M. on Thursday, May 20, 1999.
At the Annual Meeting, we will review our performance and answer any questions
you may have. The enclosed proxy statement provides you with more details about
items that will be addressed at the Annual Meeting. After reviewing the proxy
statement, please sign, date, and indicate your vote for the items listed on the
proxy card below and return it in the enclosed, postage-paid envelope whether or
not you plan to attend the Annual Meeting.
Thank you for your prompt response.
Sincerely,
Ted T. Cecala
Chairman of the Board and
Chief Executive Officer
Wilmington Trust Corporation Rodney Square North 1100 North Market Street
Wilmington, DE 19890-0001
[DOWN ARROW] Please detach here [DOWN ARROW]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2, 3, AND 4.
1. Election of directors: 01 Carolyn S. Burger
02 Robert V. A. Harra Jr.
03 Rex L. Mears
04 Leonard W. Quill
05 Robert W. Tunnell Jr.
[ ] Vote FOR all [ ] Vote WITHHELD
nominees, except from all nominees
as indicated below
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, WRITE
THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.)
2. Approval of 1999 Long-term Incentive Plan
[ ] For [ ] Against [ ] Abstain
3. Approval of Executive Incentive Plan
[ ] For [ ] Against [ ] Abstain
4. Ratification of Appointment of Independent Accountants
[ ] For [ ] Against [ ] Abstain
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ] Indicate changes below: Date __________________
Signature(s) in Box
Please sign exactly as your name(s) appear
on Proxy. If held in joint tenancy, all
persons must sign. Trustees, administrators,
etc., should include title and authority.
Corporations should provide full name of
corporation and title of authorized officer
signing the proxy.
