<PAGE>
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 Section 240.14a-11(c) or
Section 240.14a-12
BENEFICIAL CORPORATION
---------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
SCOTT A. SIEBELS, ESQ. (BENEFICIAL CORPORATION)
---------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
[LOGO] BENEFICIAL
CORPORATION(SM)
April 7, 1995
Dear Stockholder:
On behalf of the Board of Directors of Beneficial Corporation, I am
pleased to invite you to attend the 1995 Annual Meeting of Stockholders of the
Company which will be held on Thursday, May 18, 1995 at One Christina Centre,
301 North Walnut Street, Wilmington, Delaware.
The business to be transacted at the meeting is set forth in the Notice of
Meeting and is more fully described in the accompanying Proxy Statement.
It is important that your shares be represented at the meeting, regardless
of the number you hold. Whether or not you can be present in person, please
sign, date and return your proxy in the enclosed envelope as soon as possible.
If you do attend the meeting and wish to vote in person, your proxy can be
revoked at your request.
A summary report of the meeting will be mailed to all stockholders with
the financial results of the second quarter of 1995.
We look forward to seeing you at the meeting.
Best wishes.
/s/ FINN M. W. CASPERSEN
FINN M. W. CASPERSEN
Chairman of the Board
<PAGE>
BENEFICIAL CORPORATION
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 18, 1995
- ------------------------------------------------------------------------------
The annual meeting of stockholders of Beneficial Corporation, a Delaware
corporation, will be held on Thursday, May 18, 1995 at the office of the
Company, One Christina Centre, 301 North Walnut Street, Wilmington, Delaware
19801, at 11 A.M. Wilmington time, for the following purposes:
(1) To elect directors of the Company.
(2) To ratify the selection of the firm of Deloitte & Touche LLP,
Certified Public Accountants, as the independent auditors of the Company
for 1995.
(3) To transact such other business as may properly be brought before the
meeting.
The holders of Common Stock, $4.30 Dividend Cumulative Preferred Stock and
$5.50 Dividend Cumulative Convertible Preferred Stock of record at the close
of business on March 20, 1995 are entitled to notice of and to vote at the
meeting. A list of stockholders entitled to vote will be available for
inspection during business hours at the offices of the Company for a period of
ten days prior to the meeting.
SCOTT A. SIEBELS
Vice President and Secretary
Dated: April 7, 1995
<PAGE>
BENEFICIAL CORPORATION
ONE CHRISTINA CENTRE, 301 NORTH WALNUT STREET, WILMINGTON, DELAWARE 19801
---------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 18, 1995
---------------
PROXY STATEMENT
---------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Beneficial Corporation (the "Company") to
be voted at the Annual Meeting of Stockholders to be held on May 18, 1995.
The shares represented by each proxy will be voted at the meeting in
accordance with the specifications made thereon by the stockholder. A
stockholder has the power to revoke his or her proxy at any time before it has
been voted by giving written notice to Mr. Scott A. Siebels, Vice President
and Secretary, One Christina Centre, 301 North Walnut Street, Wilmington,
Delaware 19801, or by voting in person at the Annual Meeting. This Proxy
Statement and the accompanying proxy card are being mailed to stockholders on
or about April 7, 1995.
All properly signed proxies will be treated as present at the meeting for
purposes of determining whether a quorum is present. Directors will be
elected by a plurality of the votes cast. Votes withheld and non-votes will
have no effect on the election of candidates. All other matters to come
before the meeting, including the proposal to ratify the selection of the
auditors of the Company, will require the approval of a majority of the shares
present and entitled to vote on such matters. Abstentions will have the same
effect as a vote against any such matter. Non-votes will be deemed not
entitled to vote and will not be counted as votes for or against any such
matter. Non-votes also will not be included in calculating the number of
votes necessary for the approval of any such matter.
Each share of Common Stock and $4.30 Dividend Cumulative Preferred Stock
is entitled to one vote, and each share of $5.50 Dividend Cumulative
Convertible Preferred Stock is entitled to nine votes. All of such classes
will vote as a single class. On March 20, 1995, the record date for the
meeting, the shares outstanding and entitled to vote were 52,351,335 shares of
Common Stock, 836,585 shares of $4.30 Dividend Cumulative Preferred Stock and
22,271 shares of $5.50 Dividend Cumulative Convertible Preferred Stock. The
aggregate number of votes entitled to be cast at the Annual Meeting is
53,388,359.
PROPOSAL 1 -- ELECTION OF DIRECTORS
---------------------
The Board of Directors recommends a vote "FOR" the election of a Board of
Directors (hereinafter "Board of Directors" or "Board") consisting of the 18
persons named below for terms of one year or until their successors are chosen
as provided in the By-Laws. All of such nominees are currently directors and
each has expressed willingness to serve as a director during the coming year.
The proxy may be voted for the election of other persons as directors in the
event any of those named below are unable to serve for any reason.
1
<PAGE>
The names of the nominees for director, the committees of the Board of
Directors on which they serve and certain other information regarding them are
as follows:
YEAR
NAME OF DIRECTOR, AGE, FIRST
PRINCIPAL OCCUPATION* AND ELECTED
OTHER AFFILIATIONS A DIRECTOR
------------------------- ----------
CHARLES W. BOWER, 73.......................... 1969
Former Senior Vice President and Treasurer
of the Company; Member of Audit Committee
and Committee on Corporate Policy.
ROBERT J. CALLANDER, 64....................... 1992
Executive in Residence, Columbia University
Business School; Chairman of Compensation
Committee and Member of Strategic
Planning Committee; Director: The ARAMARK
Group, Inc.; Barnes Group, Inc.; Latin
American Dollar Income Fund; Omnicom
Group, Inc.; Scudder New Asia Fund;
Scudder World Income Opportunities Fund.
ROBERT C. CANNADA, 74......................... 1975
Senior Counsel, Butler, Snow, O'Mara,
Stevens & Cannada; Member of Audit
Committee and Committee on Corporate
Policy.
FINN M. W. CASPERSEN, 53...................... 1975
Chairman of Board of Directors and Chief
Executive Officer, Chairman of Executive
Committee and Member of Finance
Committee.
LEONARD S. COLEMAN, JR., 46................... 1990
President, The National League, Major
League Baseball; Chairman of Strategic
Planning and Member of Compensation
Committees and Committee on Corporate
Policy; Director: Omnicom Group, Inc.
DAVID J. FARRIS, 59........................... 1982
Member of the Office of the President,
Chief Operating Officer and Member of
Executive and Finance Committees;
President and Chief Executive Officer of
Beneficial Management Corporation, a
subsidiary of the Company.
JAMES H. GILLIAM, JR., 49..................... 1984
Executive Vice President, General Counsel
and Member of Executive Committee;
Chairman of Board of Directors of
Beneficial National Bank, a subsidiary of
the Company; Trustee: Howard Hughes
Medical Institute; Director: Bell
Atlantic Corporation; Delmarva Power &
Light Company.
ANDREW C. HALVORSEN, 48....................... 1984
Member of the Office of the President and
Chief Financial Officer, Chairman of
Finance Committee and Member of Executive
Committee.
ROLAND A. HERNANDEZ, 37....................... 1992
President, Chief Executive Officer and a
director of Telemundo Group, Inc.;
President, Interspan Communications;
Member of Strategic Planning and Audit
Committees.
J. ROBERT HILLIER, 57......................... 1982
Chairman and Chief Executive Officer of The
Hillier Group, architects; Chairman of
Nominating Committee and Member of
Strategic Planning Committee.
GERALD L. HOLM, 56............................ 1979
Former Vice Chairman of the Company; Member
of Strategic Planning and Nominating
Committees.
THOMAS H. KEAN, 59............................ 1990
President, Drew University; Member of
Nominating and Compensation Committees;
Director: Amerada Hess Corp.; The ARAMARK
Group, Inc.; Bell Atlantic Corporation;
Fiduciary Trust Company International;
United HealthCare Corporation.
STEVEN MULLER, 67............................. 1983
President Emeritus, The Johns Hopkins
University; Chairman of Committee on
Corporate Policy and Member of Strategic
Planning and Compensation Committees;
Director: Van Kampen American Capital
Closed End and Common Sense Funds; Alex.
Brown, Inc.; Law Companies Group, Inc.;
Millipore, Inc.
SUSAN JULIA ROSS, 51.......................... 1979
Attorney-at-Law, Natelson and Ross; Member
of Compensation and Nominating
Committees.
Robert A. Tucker, 68.......................... 1959
Former Chief Financial Officer of the
Company; Member of Audit and Nominating
Committees.
SUSAN M. WACHTER, 51.......................... 1985
Associate Professor of Real Estate and
Finance, the Wharton School of the
University of Pennsylvania; Member of
Strategic Planning and Nominating
Committees.
CHARLES H. WATTS, II, 68...................... 1959
Business and Educational Consultant;
Chairman of Audit Committee and Member of
Committee on Corporate Policy.
K. MARTIN WORTHY, 74.......................... 1977
Senior Counsel, Hopkins & Sutter; Member of
Nominating Committee and Committee on
Corporate Policy.
*During the last five years the principal occupation of each director has
been as listed above except as follows: Mr. Callander was Vice Chairman,
Chemical Banking Corporation (1987-1992); Mr. Coleman was Executive Director,
Market Development, Major League Baseball (1992 to March, 1994) and Vice
President, Kidder Peabody (1989-1991); Mr. Gilliam was Senior Vice President
(1985-1989) and Secretary (1985-1992) of the Company; Mr. Kean was Governor of
New Jersey (1982 to 1990); and Dr. Muller was President of The Johns Hopkins
University (1972-1990).
2
<PAGE>
The following table sets forth information regarding beneficial
ownership of the Company's equity securities of each director, the five
most highly compensated executive officers of the Company and its
subsidiaries and the directors and executive officers of the Company as a
group, as of February 28, 1995.
<TABLE>
<CAPTION>
EQUITY SECURITIES OF THE COMPANY
BENEFICIALLY OWNED (1)
------------------------------------------
COMMON
STOCK 5%
COMMON OPTION % OF PFD. % OF
NAME OF PERSON OR GROUP STOCK SHARES(10) CLASS(11) STOCK CLASS
- ----------------------- ------ ---------- --------- ----- -----
<S> <C> <C> <C> <C> <C>
Charles W. Bower (3) (4) (9).... 115,295 8,000 * -- --
Robert J. Callander............. 1,446 4,000 * -- --
Robert C. Cannada (2)........... 22,107 8,000 * -- --
Finn M. W. Caspersen
(2) (3) (4) (5) (6) (7) (9)... 1,744,227 90,000 3.33 2,636 *
Leonard S. Coleman, Jr. ........ 2,161 8,000 * -- --
David J. Farris (2)............. 229,992 105,300 * -- --
James H. Gilliam, Jr. .......... 68,182 127,350 * -- --
Robert M. Grohol................ 38,703 54,600 * -- --
Andrew C. Halvorsen............. 81,297 127,350 * -- --
Roland A. Hernandez............. 726 4,000 * -- --
J. Robert Hillier............... 16,701 8,000 * -- --
Gerald L. Holm (4) (6).......... 139,522 4,000 * -- --
Thomas H. Kean.................. 3,206 8,000 * -- --
Steven Muller................... 3,744 8,000 * -- --
Susan Julia Ross................ 9,640 8,000 * -- --
Robert A. Tucker
(2) (3) (4) (7) (8)........... 300,818 8,000 * 679 *
Susan M. Wachter................ 13,532 8,000 * -- --
Charles H. Watts, II (2) (3) (9) 166,999 8,000 * 737 *
K. Martin Worthy 6,769 8,000 * -- --
All directors and officers
as a group (25 persons)
(2)(3)(4)(5)(6)(7)(8)(9)...... 2,499,808+ 626,800 4.76 4,052 *
</TABLE>
*Less than 1.0% of class.
+Pursuant to Item 403 of Regulation S-K, this total does not reflect
multiple counting of shares reflected above. This represents an increase of
227,268 shares over the comparable 1994 level of 2,272,540 shares.
(1) Unless otherwise indicated below in footnotes (2) through (8), each
director possesses sole voting and investment power with respect to the shares
shown opposite his or her name.
(2) Includes shares of Common Stock owned by spouses or certain members of
the families of directors, as to which such directors disclaim beneficial
ownership, as follows: Cannada 3,632 shares; Caspersen 14,662 shares; Farris
138 shares; Tucker 2,378 shares; and Watts 5,592 shares.
(3) Includes 99,996 shares of Common Stock held by a trust as to which
Messrs. Bower, Caspersen, Tucker, Watts and others serve as trustees (sharing
voting and investment power), shown as beneficially owned by each of them.
(4) Excludes shares owned by The Hodson Trust. For information concerning
shares held by this trust see Principal Stockholders on page 5.
(5) Includes 638,258 shares of Common Stock other than shares referred to
in notes (2), (3), (4), (6) and (7), as to which Mr. Caspersen shares voting
and investment power with others.
(6) Includes 106,722 shares of Common Stock owned by The Hodson
Scholarship Foundation, Inc., as to which Messrs. Caspersen and Holm share
voting and investment power with others.
(7) Includes 119,222 shares of Common Stock and 679 shares of 5% Pfd.
Stock owned by the Beneficial Foundation, Inc., as to which Messrs.
Caspersen, Tucker and others share voting and investment power.
(8) Includes 16,350 shares of Common Stock, other than those referred to
in notes (2), (3), (4) and (7), as to which Mr. Tucker shares voting and
investment power with others.
(9) Includes shares of Common Stock which will vest in March or April of
1995 under the Employees' Stock Purchase Plan.
(10) Sets forth the number of shares that could be acquired as of such
date by the exercise of options granted under the Company's Non-Qualified
Stock Option Plan.
(11) Not included in this percentage are the shares that could be acquired
under the Company's Non-Qualified Stock Option Plan as set forth in the second
Column above.
3
<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board held 4 meetings during 1994 and the committees held 38 meetings
in total. The overall attendance record of directors at Board and committee
meetings during 1994 was 100%.
Audit Committee. The Audit Committee met 4 times in 1994. Its duties are
(a) to recommend to the Board a firm of independent public accountants whose
selection would be submitted to the stockholders for ratification; (b) to
confer with the Company's independent auditors as to the scope of their
proposed audit; (c) to review the findings and recommendations of the
independent auditors on completion of the audit and to consider any problems
encountered by them in conducting the audit; and (d) to review the Company's
internal audit controls and to provide a liaison with the Company's internal
auditors.
Committee on Corporate Policy. The Committee on Corporate Policy held 4
meetings in 1994. Its responsibilities are (a) to advise the Board and
recommend from time to time corporate policies with respect to revisions in
the Restated Certificate of Incorporation and By-Laws; (b) to advise the Board
and recommend from time to time any other appropriate action relating to the
structure of the Board, the relationship of the Board to the stockholders and
action which might be taken by the Board or the stockholders as being in the
best interests of the stockholders; and (c) to advise the Board and recommend
from time to time corporate governance policies that, among other things,
enhance the quality and training of the human resources of the Company and its
subsidiaries, that assure adequate succession for senior management of the
Company and its subsidiaries, and that assure adequate diversification of the
human resources of the Company and its subsidiaries.
Compensation Committee. The Compensation Committee held 6 meetings in
1994. Its function is to consider and determine appropriate policies
regarding compensation and benefits issues. In doing so, the Committee shall
assure that the Company's compensation and incentive programs, including those
for its officers and the executives of its management and operating
subsidiaries, are properly administered, and shall review and make
recommendations regarding the terms and administration of the Company's
retirement, health and other employee benefit programs.
Executive Committee. In 1994 the Executive Committee held 7 meetings.
This committee may exercise substantially all the authority of the Board
(other than powers which the Board has specifically delegated to other
committees) during the intervals between Board meetings.
Finance Committee. The Finance Committee met 9 times in 1994. This
committee, between meetings of the Board, may exercise all powers of the Board
with respect to financing the operations of the Company.
Strategic Planning Committee. This Committee held 4 meetings in 1994.
Its purpose is to focus on major challenges facing the Company and its
subsidiaries and to assist management in conceptualizing and developing
strategies to maximize shareholder value.
Nominating Committee. The Nominating Committee met 4 times in 1994. Its
purposes are to (a) make recommendations to the Board with respect to the size
and composition of the Board; (b) make recommendations to the Board with
respect to a slate of nominees for election as directors for inclusion in the
Company's annual proxy statement; and (c) identify, evaluate and recommend to
the Board candidates to fill vacancies on the Board. Nominations for the
election of directors may be made by the Board of Directors or by any
stockholder entitled to vote for the election of directors. A notice of the
intent of a stockholder to make any such nomination must be made in writing,
delivered or mailed by first class United States mail, postage prepaid, to the
Secretary of the Company not less than 90 days in advance of the annual
meeting or, in the event of a special meeting of stockholders for the election
of directors, such notice must be delivered or mailed to the Secretary of the
Company not later than the close of the seventh day following the day on which
notice of the meeting is first mailed to stockholders. Every such notice by a
stockholder must set forth: (a) the name and residence of the stockholder who
intends to make the nomination; (b) a representation that the stockholder is a
holder of record of the Company's voting stock and intends to appear in person
or by proxy at the meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings among the
stockholders and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be
made by the stockholder; (d) such other information regarding each nominee
proposed by such stockholder as would have been required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and
Exchange Commission (the "Commission") had each nominee been nominated, or
intended to be nominated, by the Board of Directors of the Company; and (e)
the consent of each nominee to serve as director of the Company if so elected.
4
<PAGE>
COMPENSATION OF DIRECTORS
Directors who are not also employees of the Company receive for their
services $1,500 per quarter and $7,000 for each Board meeting attended.
Directors who are employees receive $200 for each Board meeting attended. In
addition to the quarterly fee, non-employee directors who are members of the
Audit, Compensation, Nominating, Corporate Policy, Strategic Planning or any
Ad Hoc committee receive $1,000 for each meeting attended or for each day
services are performed on behalf of any such committee or the Board. Non-
employee directors who are committee chairpersons receive an additional $500
for each meeting they chair or for each day services are performed on behalf
of such committee. At the option of any director, payment of meeting and
service fees may be deferred until a director either reaches the age of 70 or
terminates his or her relationship with the Company. Such deferred fees bear
interest at an annual rate equal to the average annual interest cost of all
short- and long-term borrowings by the Company and its consolidated
subsidiaries. Non- employee directors also receive an annual award of 2,000
options to purchase the Company's Common Stock under the 1990 Non-Qualified
Stock Option Plan, and they are entitled to participate in the Company's
Employees' Stock Purchase Plan and in a health insurance arrangement made
available by the Company.
In order to allow the Company to avail itself of the experience of retired
directors, it is the Company's policy to pay each director who (a) ceases to
be a director after having attained the age of 70 years and completed at least
five years of service or (b) has served for ten years and either resigns
voluntarily or decides not to stand for re-election, the sum of $8,500 per
quarter if such director agrees to be available to render advice to the Board,
its Executive Committee or any of its members. In addition, upon a change in
control of the Company, wherein directors and directors emeriti would cease to
hold such positions, such persons would receive quarterly payments ranging
from $4,250 to $8,500, depending on their years of service, for the remainder
of their lives in consideration for and subject to their continued
availability to the Company or its successor for purposes of consultation.
The Company will purchase annuities to provide for such payments in the event
of a change of control of the Company.
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding each person who, to
the Company's knowledge, owns more than 5% of any class of the Company's
outstanding voting securities:
<TABLE>
<CAPTION>
$4.30 DIVIDEND
NAME AND ADDRESS COMMON CUMULATIVE % OF CLASS
OF STOCKHOLDER STOCK PREFERRED STOCK OWNED
---------------- ------ --------------- ----------
<S> <C> <C> <C>
FMR Corp.
82 Devonshire Street
Boston, MA 02109................ 4,910,751 (1) -- 9.35%
Putnam Investments Inc., Putnam
Investment Management, Inc. and
The Putnam Advisory Company, Inc.
One Post Office Square
Boston, MA 02109................ 4,308,282 (2) -- 8.20%
The Capital Group, Inc. and Capital
Research and Management Company
333 South Hope Street
Los Angeles, CA 90071........... 4,044,000 (3) -- 7.70%
The Hodson Trust
100 Beneficial Center
Peapack, NJ 07977............... 3,518,231 (4) -- 6.70%
The Life Insurance Company
of Virginia
6610 West Broad Street
Richmond, VA 23230.............. -- 75,000 (5) 8.97%
</TABLE>
------------
(1) Based on information contained in a report on Schedule 13G of FMR
Corp. ("FMR"), dated February 13, 1995, filed with the Commission under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). According
to such report, FMR is the parent holding company of several investment
adviser or investment manager subsidiaries which together beneficially own
4,910,751 shares (9.35%) of the Company's Common Stock. FMR has the sole
power to vote 244,697 of such shares and the sole power to dispose of all
4,910,751 shares.
5
<PAGE>
(2) Based on information contained in a report on Schedule 13G of Putnam
Investments Inc. ("Putnam") dated January 30, 1995 filed with the Commission
under the Exchange Act. According to such information, as of December 31,
1994, Putnam, a wholly owned subsidiary of Marsh & McLennan Companies, Inc.
and an investment advisor registered under Section 203 of the Investment
Advisers Act of 1940, is parent of two registered investment advisers, Putnam
Investment Management, Inc. ("PIM") and The Putnam Advisory Company, Inc.
("PAC") which together beneficially own 4,308,282 shares (8.20%) of the
Company's Common Stock. Putnam shares the power to vote 53,800 of such shares
and shares the power to dispose of all 4,308,282 shares; PIM shares the power
to dispose of 4,193,570 of such shares; and PAC shares the power to vote
53,800 of such shares and shares the power to dispose of 114,712 of such
shares.
(3) Based on information contained in a report on Schedule 13G of The
Capital Group Companies, Inc. and Capital Research and Management Company,
dated February 6, 1995, filed with the Commission under the Exchange Act.
According to such information, as of December 31, 1994, certain operating
subsidiaries of The Capital Group Companies, Inc., exercised investment
discretion over various institutional accounts which held 4,044,000 shares
(7.70%) of the Company's Common Stock. Capital Research and Management
Company, a registered investment adviser, and Capital International, S.A.,
another operating subsidiary, had investment discretion with respect to
3,902,000 and 142,000 of such shares, respectively.
(4) As of March 1, 1995, The Hodson Trust held of record the number of
shares of Common Stock indicated in the table, 38 shares of $4.30 Dividend
Cumulative Preferred Stock (less than 1.0% of such class) and 8 shares of
$5.50 Dividend Cumulative Convertible Preferred Stock (less than 1.0% of such
class). Messrs. Bower, Caspersen, Holm, Tucker and three other persons serve
as trustees of such trust and share voting and investment power, but have no
interest in the principal or income of such trust. Such shares may be
regarded as beneficially owned by each such person under Rule 13d-3
promulgated by the Commission under the Exchange Act.
(5) Based on information contained in a report on Schedule 13G of The Life
Insurance Company of Virginia ("Life of Virginia"), dated May 21, 1987, filed
with the Commission under the Exchange Act. According to such report, Life of
Virginia, an insurance company as defined in Section 3(a)(19) of the Exchange
Act, shares voting and dispositive power with an affiliated investment manager
which together with Life of Virginia beneficially own 75,000 shares, or 8.97%
of the $4.30 Dividend Cumulative Preferred Stock.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Company's executive compensation program is independently administered
by the Compensation Committee of the Board of Directors ("the Committee").
The Committee is composed of the five unaffiliated non-employee directors
named on page 9 of this report. Decisions of the Committee with respect to
the compensation of the Company's executive officers are reviewed and approved
by the full Board of Directors, except for decisions as to individual awards
under the Company's stock-based incentive plans. Those awards must be made
solely by the Committee in order to satisfy Rule 16b-3 under the Exchange Act.
The Company is required to provide certain information with respect to the
compensation and benefits provided to the Company's Chairman and Chief
Executive Officer and to the four other most highly compensated executive
officers (the "Executive Officers"). This report is submitted by the
Committee in fulfillment of those requirements and discusses the rationale and
considerations constituting the basis for fundamental compensation decisions
affecting the Executive Officers.
COMPENSATION PHILOSOPHY
The executive compensation policies of the Company are designed to
encourage superior corporate and individual performance, provide competitive
levels of compensation, complement the Company's strategic planning
initiatives, and assist the Company in attracting, retaining and motivating
qualified executives.
6
<PAGE>
The Company has historically emphasized long-term, stock-based incentive
compensation, on the basis that such programs more effectively advance
corporate interests and better align the interests of its executive officers
with those of its stockholders. The Company does not maintain an annual cash
bonus or cash incentive program for its executive officers. All compensation
for services rendered other than cash compensation (and certain taxable
employee benefits) is subject to vesting requirements and forfeiture if such
requirements are not met. During the vesting period, the value of stock-based
awards relates directly to the market performance of the Company's Common
Stock.
On August 10, 1993, Congress adopted new Section 162(m) of the Internal
Revenue Code. For compensation payable to certain senior executives beginning
on January 1, 1994, this new tax provision limits the annual amounts
deductible by the Company to $1,000,000, per executive. The provision exempts
amounts payable under certain qualifying arrangements (which includes amounts
deemed to be performance-based and amounts payable under tax-qualified
pension arrangements), as well as certain payments that the executive had a
fixed contractual right to receive from prior years. Amounts payable
following retirement, relating to services during prior years of employment,
are also exempt. In the interest of its stockholders, it is the policy of the
Company, acting through the Board and the Committee, to structure its
compensation programs to preserve full deductibility of all amounts paid to
its Executive Officers, to the maximum extent possible.
On May 19, 1994, the Company's stockholders overwhelmingly approved
amendments to the Company's Non-Qualified Stock Option Plan ("Option Plan")
and its Employee Stock Purchase Plan ("ESPP"). The Option Plan amendments
brought that plan into compliance with Section 162(m). The ESPP amendments,
together with other changes as described more fully in the Company's 1994
Proxy Statement, generally limit the Company's Executive Officers'
compensation (not otherwise exempt under Section 162(m)) to $1,000,000 per
year, with any excess deferred until such time as it is payable by the Company
without loss of deductibility. During such time, all funded deferred
compensation remains subject to forfeiture, invested in the Company's Common
Stock with the Executive Officers' future benefit directly correlated to
stockholder return. The Company does not anticipate any loss of deductibility
pursuant to Section 162(m) during 1994 or 1995.
RELATIONSHIP OF CORPORATE PERFORMANCE TO COMPENSATION
As discussed further in this report, both objective and subjective
measures of the Company's performance are directly relevant to executive
compensation determinations, particularly as to awards of long-term
stock-based incentive compensation. Among the criteria used are: (1) net
earnings of the Company, (2) earnings per share, (3) balance sheet and income
statement soundness, (4) return on assets, (5) return on equity, (6) stock
market performance of the Company's common shares, (7) growth in quality
receivables, (8) net chargeoffs and delinquencies as a percentage of average
receivables, (9) growth in book value per common share, and (10) growth in
cash dividends payable. All of these criteria are relevant both as to current
and long-term performance, and are measured in light of the industry and
general economic conditions within which the Company operates.
The Committee does not attach specific weighting to these objective
factors in its deliberations. The Committee deems each factor to be
important, to be considered by it, together with subjective criteria, in
reaching an overall determination as to appropriate levels of compensation.
The Committee does not measure each of the factors, or the factors as a whole,
in relation to any set objective target or goal. Actual performance under
these factors, individually and collectively, is subjectively reviewed in
light of expectations and prevailing economic and competitive conditions. The
Committee does not attempt to maintain a direct relationship between each
specific measure of corporate performance and any element of executive officer
compensation discussed in this report.
COMPONENTS OF EXECUTIVE COMPENSATION
Cash compensation for the Company's executives is set at levels deemed
competitive within its industry, and appropriate to the Company's overall
long-term performance within that comparative group. It also reflects
individual levels of performance and overall responsibility with the Company.
Long-term, stock-
7
<PAGE>
based incentive compensation has increased significantly in recent years
as a percentage of the Company's Executive Officers' total compensation.
The Company maintains two long-term, stock-based incentive compensation
arrangements for its executives. The Beneficial Corporation Key Employees
Stock Bonus Plan ("Key Plan"), approved by stockholders in 1983, provides
annual awards to a broad group of employees (349 current participants),
including middle and senior managers and executives, from a compensation pool
tied to the Company's net after-tax consolidated earnings for the year of the
award. The percentage of such net earnings that is available for awards is
determined annually by the full Board of Directors following a recommendation
by the Committee, and cannot exceed 5%. The Committee need not distribute all
funds made available by the Board. An amount up to 4% of net earnings was
approved for awards granted with respect to each of 1993 and 1994, with actual
grants totaling 3.2% and 3.2%, respectively.
Individual awards are made by the Committee, in amounts which reflect
personal achievement relative to corporate goals, the importance of the
individual to the Company's future, and the Company's overall performance
based on relevant, objective and subjective financial criteria. Once Key Plan
awards are made, they are invested in the Company's Common Stock. Awards are
forfeited if the executive terminates employment voluntarily or for cause
during a five year period which includes the year for which the award was
made. During the vesting period dividends are reinvested and the executive is
permitted to direct the voting of the shares awarded as well as shares
purchased with reinvested dividends.
The Option Plan, approved by stockholders in 1991, allows the Committee
the discretion to make stock option awards to eligible executives on such
terms as the Committee deems appropriate within parameters established by
the Option Plan. The price at which the optionee is permitted to purchase
shares of Common Stock may not be less than the fair market value on the
date of grant. The vesting period for option awards may not be less than
one year, but the Committee has uniformly utilized a four-year schedule,
with 25% vesting on each of the first through fourth anniversaries of the
award. If the executive terminates employment for any reason other than
death, disability or retirement, the award is forfeited.
The Committee makes individual awards to executives based on both
corporate and individual performance measures, particularly emphasizing the
perceived importance of the individual to the future profitability and success
of the Company.
As to both cash compensation and long-term incentive awards, the Committee
also considers comparative data from peer companies in determining the
appropriateness and structure of the Company's executive compensation program.
In this connection, the Committee reviews studies periodically conducted by
independent executive compensation consulting firms at its request, as well as
publicly available data. This review focuses on peer companies in the
consumer finance and financial services industry to which the Company's
financial results are commonly compared. The peer companies are chosen at the
time of each review based on attributes which are most closely comparable to
the Company, and which make the overall peer group as balanced as possible for
purposes of comparison.
The Committee does not follow a policy of setting executive pay levels in
a specific relationship to the range of salaries paid by this group of peer
companies. Nor does the Committee strive to determine the overall
relationship of the Company's compensation to the high, median or low end of
any comparative group. While this comparative information is valuable to the
Committee as an indicator of competitive trends, salary levels are set based
upon the measures of Company performance discussed above, individual
performance, the Company's needs, and such other factors as the Committee
considers appropriate.
The peer group of companies used for such studies is not necessarily
the same as the S&P Financial Index, which is used for comparison in the
Performance Graph included with this Proxy Statement. The S&P Financial
Index is deemed by the Company to be the published industry index most
relevant to a consistent, long-term comparison of the total shareholder
return associated with the Company's Common Stock. The peer group of
companies used for comparative salary information is adjusted periodically
to include only those deemed most directly relevant for the time period,
and the specific job classifications
8
<PAGE>
being studied. This peer group is generally smaller than, but overlaps
significantly with the S&P Financial Index.
The Committee recommended or approved cash compensation, Key Plan awards,
and Option Plan grants with respect to 1994 performance to the Executive
Officers at the levels shown in the Summary Compensation Table which is
included as a part of this Proxy Statement.
The Committee's recommendation with respect to Mr. Caspersen's cash
compensation was based upon its review of the criteria outlined in this
report with respect to cash compensation, including the objective measures
of the Company's performance listed above as well as subjective, individual
performance measures. While the Committee considered each of the objective
performance measures in making its determination, no single criterion was
positively or negatively determinative of its decision. A balancing of all
subjective and objective criteria resulted in the determination of Mr.
Caspersen's cash compensation for 1994.
On November 15, 1994, the Committee approved an Option Plan award to Mr.
Caspersen, the Chief Executive Officer of the Company, potentially exercisable
for 117,300 shares of the Company's Common Stock, with an exercise price equal
to the fair market price on the date of grant. The award is subject to a
four-year vesting schedule, ten year duration and is in all respects identical
to all other grants approved by the Committee under the Option Plan. Grants
to all employees during 1994, including Mr. Caspersen, are potentially
exercisable for 911,350 shares of the Company's Common Stock.
In awarding this 117,300 share grant, the Committee considered the
criteria generally relevant to Option Plan awards, including objective
measures of the Company's performance. Subjective considerations of
individual performance were also relevant. Mr. Caspersen received Option Plan
grants of 120,000, 120,000 and 86,200 shares for 1993, 1992 and 1991,
respectively. When considering the award to Mr. Caspersen, the Committee
reviewed the Company's favorable performance to date during 1994 under each of
the ten objective performance measures listed above.
On February 23, 1995, the Committee approved a Key Plan award to Mr.
Caspersen with respect to his 1994 performance. In making this award, the
Committee considered the criteria outlined in this report with respect to Key
Plan awards, as well as subjective, individual performance measures. The
Committee determined that an award of $900,000 was appropriate. When
considering this Key Plan award to Mr. Caspersen, the Committee reviewed the
Company's performance for 1994 under each of the ten objective performance
measures listed above. Mr. Caspersen's Key Plan awards for 1993, 1992 and
1991 were $1,000,000, $350,000 and $625,000, respectively.
------------
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S
BOARD OF DIRECTORS
Robert J. Callander (Chair) Steven Muller
Leonard S. Coleman Susan Julia Ross
Thomas H. Kean
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None.
9
<PAGE>
EXECUTIVE COMPENSATION
The following tables and narrative text discuss the compensation paid
in 1994 and the two prior fiscal years to the Company's Chief Executive
Officer and the four other most highly compensated officers of the Company
and its subsidiaries.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
AWARDS PAYOUTS
------ -------
SECURITIES
UNDER-
OTHER RESTRICTED LYING
NAME AND ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
PRINCIPAL COMPEN- AWARD(S) SARS PAYOUTS COMPEN-
POSITION YEAR SALARY($) BONUS($) SATION($) ($)(1)(2) (#)(3) ($) SATION($)(4)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Finn M. W. Caspersen 1994 $1,051,300(5) -0- -0- $1,350,000(6) 117,300 -0- $ 33,270
Chairman and Chief 1993 $1,483,500 -0- -0- $1,000,000 120,000 -0- $ 32,759
Executive Officer 1992 $1,366,800 -0- -0- $ 350,000 120,000 -0- $ 26,645
David J. Farris 1994 $ 971,332(5) -0- -0- $ 752,468(6) 78,200 -0- $ 36,218
Chief Operating 1993 $1,037,300 -0- -0- $ 750,000 80,000 -0- $ 35,821
Officer 1992 $ 953,300 -0- -0- $ 350,000 80,000 -0- $ 29,925
Andrew C. Halvorsen 1994 $ 606,800 -0- -0- $ 300,000 48,800 -0- $ 10,594
Chief Financial 1993 $ 590,750 -0- -0- $ 300,000 50,000 -0- $ 12,236
Officer 1992 $ 551,800 -0- -0- $ 200,000 50,000 -0- $ 6,220
James H. Gilliam, Jr. 1994 $ 606,800 -0- -0- $ 300,000 48,800 -0- $ 10,594
Executive Vice 1993 $ 590,750 -0- -0- $ 300,000 50,000 -0- $ 11,155
President and 1992 $ 466,800 -0- -0- $ 290,000 50,000 -0- $ 5,259
General Counsel
Robert M. Grohol 1994 $ 293,443 -0- -0- -0- -0- -0- $113,750
Senior Vice Presi- 1993 $ 286,443 -0- -0- $ 100,000 16,000 -0- $ 5,896
dent-Operations-- 1992 $ 273,443 -0- -0- $ 75,000 16,000 -0- $ -0-
Beneficial Management
Corporation
</TABLE>
(1) The number of shares and the aggregate value of such shares of
restricted stock held by such persons as of year-end 1994 are as
follows: Caspersen--110,130 shares--$4,295,070; Farris--85,322
shares--$3,327,558; Halvorsen--35,984 shares--$1,403,376;
Gilliam--48,556 shares--$1,893,684; and Grohol--5,390 shares-$210,210.
Awards under the Key Plan (described below in footnote (2)) for 1994
were made in February of 1995. The aforementioned shares of restricted
stock for Messrs. Caspersen and Farris include 11,512 and 2,049
shares, respectively, held in the Company's ESPP subject to mandatory
deferral under the terms of the ESPP and the Company's Deferred
Compensation Plan. Under the terms of the ESPP (described more fully
in the Company's 1994 Proxy Statement) and the Company's Deferred
Compensation Plan, restricted shares held for Messrs. Caspersen and
Farris in the Company's ESPP will vest on (a) death, (b) voluntary
retirement on or after age 65, (c) involuntary termination other than
for cause, (d) disability or (e) on a change of control (as defined in
the ESPP). Unvested shares are forfeited. Dividends are paid on the
deferred shares at the current dividend rate for the Company's Common
Stock and used to purchase additional restricted shares of Common
Stock.
(2) Under the Company's Key Employees Stock Bonus Plan (the "Key Plan"), each
year the Board of Directors determines the maximum percentage, not to
exceed 5%, of the Company's consolidated net after tax income which may be
contributed to the Key Plan. The Compensation Committee then determines
(a) the dollar amount of the contribution to the Key Plan for such
calendar year; (b) which employees will receive an award for such year;
and (c) the amount of each award. The Committee makes awards to employees
based on each person's performance, as well as such other factors as the
Committee deems appropriate. These awards vest the earlier of January 1
of the fifth year after the award year, or the date on which the employee
involuntarily terminates employment other than for cause. If on such date
deductibility to the Company is restricted under Internal Revenue Code
section 162(m), deferral is mandatorily extended until full deductibility
is available to the Company, generally following the employee's termination
of employment. Awards which do not vest are forfeited. Awarded shares
are placed in trust while unvested, and while in trust the employee has
the right to vote the shares in his or her account. Dividends are paid on
such shares at the current dividend rate for the Company's Common Stock
and used to purchase additional shares of stock for each employee who has
received an award.
(3) The Company's Option Plan does not provide for the award of stand alone
stock appreciation rights (SARs). Limited tandem SARs may be awarded to
such persons under the Option Plan with respect to then outstanding
options in the event of a change in control of the Company.
10
<PAGE>
(4) All Other Compensation includes contributions made by the Company under
the Beneficial Corporation Savings Plan (a 401k plan), ordinary life
insurance premiums paid on behalf of Messrs. Caspersen, Farris, Halvorsen
and Gilliam by the Company and an additional amount paid in connection
with the termination of Mr. Grohol's employment upon retirement. No
contributions were made to the Savings Plan for Messrs. Caspersen,
Farris, Halvorsen, Gilliam or Grohol in year 1992 and each received $5,896
in contributions in 1993 and $3,750 in contributions in 1994. With
respect to life insurance premiums, Mr. Caspersen received $26,645 in
1992, $26,863 in 1993 and $29,520 in 1994; Mr. Farris received $29,925 in
1992, $29,925 in 1993 and $32,468 in 1994; Mr. Halvorsen received $6,220
in 1992, $6,340 in 1993 and $6,844 in 1994; and Mr. Gilliam received
$5,259 in 1992, $5,259 in 1993 and $6,844 in 1994. The Company does not
maintain split dollar life insurance arrangements. Mr. Grohol received
$110,000 in connection with Mr. Grohol's retirement from Beneficial
Management Corporation.
(5) Subject to the Company's mandatory deferral arrangement, the Compensation
Committee approved a salary of $1,500,000 for Mr. Caspersen and $1,045,000
for Mr. Farris. The salary for Mr. Caspersen includes $79,520 mandatorily
deferred on an unfunded basis under the Company's Deferred Compensation
Plan.
(6) Includes $900,000 and $675,000 awarded to Messrs. Caspersen and Farris,
respectively, under the Key Employees Stock Bonus Plan during February of
1995 with respect to 1994 performance.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
OPTION GRANTS IN 1994
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
10 YEAR OPTION TERM
INDIVIDUAL GRANTS THROUGH 11/15/2004(3)
----------------- ---------------------
(A) (B) (C) (D) (E) (F) (G)
NUMBER % OF TOTAL
OF OPTIONS
SECURITIES GRANTED
UNDERLYING TO EXERCISE
OPTIONS EMPLOYEES OR BASE
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#)(1)(2) YEAR ($/SH) DATE 5% ($) 10% ($)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Finn M. W. Caspersen 117,300 12.48% $37.4375 11/15/04 $2,761,740 $6,998,790
David J. Farris 78,200 8.32% $37.4375 11/15/04 $1,841,160 $4,665,860
Andrew C. Halvorsen 48,800 5.19% $37.4375 11/15/04 $1,148,959 $2,911,688
James H. Gilliam, Jr. 48,800 5.19% $37.4375 11/15/04 $1,148,959 $2,911,688
Robert M. Grohol -0- N/A N/A N/A N/A N/A
- -------------------------------------------------------------------------------------------
</TABLE>
(1) 25% of the total grant vests on each of 11/15/95, 11/15/96, 11/15/97 and
11/15/98.
(2) Options were awarded on November 15, 1994 under the 1990 Beneficial
Corporation Non-Qualified Stock Option Plan. All options were granted for
a ten-year term, subject to forfeiture upon certain termination of
employment events. The option price may be no lower than the fair market
value of the Company's Common Stock on the date of grant. Unexercisable
stock options become exercisable upon an optionee's retirement when
certain conditions are met and upon a change in control. The plan permits
optionees to satisfy the exercise price and tax withholding requirements
by delivery of previously owned shares of Common Stock.
(3) The Potential Realizable Value to all common stockholders is
$1,238,474,753 under column (f) and $3,125,674,377 under column (g).
Potential Realizable Value represents the aggregate net gain to all common
stockholders, assuming a beginning market price of $37.4375 (the fair
market value option price determined on November 15, 1994) and
appreciation at the assumed annual rates of 5% and 10% for the ten-year
period from November 15, 1994 to November 15, 2004. The assumed rates of
appreciation are set as part of the proxy rules. There can be no
assurance that the Common Stock will perform at the assumed annual rates
used for purposes of this table. The Company does not make or endorse any
predictions as to future stock performance.
11
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN 1994
AND 1994 YEAR-END OPTION VALUES
(A) (B) (C) (D) (E)
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES 1994 YEAR-END 1994 YEAR-END(1)
ACQUIRED (#) ($)
ON VALUE
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Finn M. W. Caspersen 100,500 $2,009,639 194,150/288,850 $1,892,142/$1,125,608
David J. Farris -0- -0- 205,300/193,300 $2,574,449/$756,822
Andrew C. Halvorsen -0- -0- 127,350/121,250 $1,578,577/$477,357
James H. Gilliam, Jr. -0- -0- 127,350/121,250 $1,578,577/$477,357
Robert M. Grohol -0- -0- 30,600/24,000 $305,277/$130,614
- ------------------------------------------------------------------------------------
</TABLE>
(1) Based on a value per share at December 30, 1994 of $39.3125.
PERFORMANCE GRAPH
The following table sets forth a comparison of the yearly percentage
change in the Company's cumulative total shareholder return. It assumes that
$100 was invested on December 31, 1989 in the Company's Common Stock, the S&P
500 and the S&P Financial Index. It also assumes the reinvestment of
dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
BNL, S&P 500 INDEX & S&P FINANCIAL INDEX
250 | ------------------------------------
| YR. BNL S&P 500 S&P FIN
| 1990 $ 93 $ 97 $ 79
| 1991 $146 $126 $118
200 | 1992 $155 $136 $146
| 1993 $186 $150 $162
| 1994 $198 $152 $157
| ------------------------------------
150 |
|
|
| ID: GRAPHIC (PERFORMANCE GRAPH)
100 |
|
|
|
50 |
--|------------|------------|------------|------------|------------|----
1989 1990 1991 1992 1993 1994
BENEFICIAL CORPORATION (Represented on graph by a solid line with
solid bullets at yearly data points)
S&P 500 (Represented on graph by long dashes with solid
boxes at yearly data points)
S&P FIN INDEX (Represented on graph by short dashes with
solid triangles at yearly data points)
(NOTE -- THE BOX IN THE UPPER LEFT PORTION OF THE PERFORMANCE GRAPH
CONTAINS THE VALUES OF THE DATA POINTS AS REPRESENTED BY THE
LINES AND DASHES IN THE PERFORMANCE GRAPH.)
12
<PAGE>
PENSION AND SUPPLEMENTAL PENSION TABLE
The following table illustrates the estimated annual benefits, based on
the indicated applicable average annual compensation and years of service
upon retirement, payable under the Beneficial Corporation Pension Plan (the
"Pension Plan") and the Supplemental Retirement Plan (the "Supplemental
Plan") (prior to any offset) to a participant who retires at the end of the
calendar year in which age 65 is attained.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
ESTIMATED ANNUAL RETIREMENT BENEFIT
-----------------------------------
15 20 25 30 35 40
APPLICABLE AVERAGE YEARS OF YEARS OF YEARS OF YEARS OF YEARS OF YEARS OF
ANNUAL COMPENSATION SERVICE SERVICE SERVICE SERVICE SERVICE SERVICE
- ------------------- -------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 150,000........... $ 34,125 $ 46,125 $ 58,500 $ 71,250 $ 84,375 $ 97,875
$ 250,000........... 56,875 76,875 97,500 118,750 140,625 163,125
$ 450,000........... 102,375 138,375 175,500 213,750 253,125 293,625
$ 650,000........... 147,875 199,875 253,500 308,750 365,625 424,125
$ 850,000........... 193,375 261,375 331,500 403,750 478,125 554,625
$1,000,000........... 227,500 307,500 390,000 475,000 562,500 652,500
$1,250,000........... 284,375 384,375 487,500 593,750 703,125 815,625
$1,500,000........... 341,250 461,250 585,000 712,500 843,750 978,750
$1,750,000........... 398,125 538,125 682,500 831,250 984,375 1,141,875
- ------------------------------------------------------------------------------
</TABLE>
The basic benefit formula under the Pension Plan (before the reduction
discussed below) provides benefits of from 1.5% to 1.8% of average annual
compensation, with the benefit accrual rate increasing with years of service.
The maximum annual retirement benefit under the Pension Plan is generally
65.25% of an employee's highest applicable average annual compensation for
three consecutive years. Compensation under the Pension Plan is defined to
include wages paid, year-end adjustments (if any), bonuses, overtime, salary
deferral contributions to the Beneficial Corporation Savings Plan (a 401k
plan), any amounts subject to mandatory deferral under the Company's Deferred
Compensation Plan and other special earnings. Company contributions under the
Employees' Stock Purchase Plan and the Key Employees Stock Bonus Plan, income
recognized pursuant to the Stock Option Plan, certain moving expenses, taxable
group life insurance premiums, certain commissions and incentive payments and
severance pay are excluded from the definition of compensation.
In determining benefits payable under the Pension Plan, amounts payable
are reduced by (1) one-half of an employee's annual social security benefit,
(2) benefits actuarially determined from Company contributions under the
Beneficial Corporation Savings Plan and the earnings thereon and (3) any
amount vested under the Company's prior pension plan which terminated in 1983.
The actuarial value of an employee's annual retirement benefit may, at an
employee's option, be paid in a single payment upon retirement. Benefits
under the Pension Plan are fully vested after five years of cumulative service
or at age 65. The Pension Plan also contains provisions for early retirement,
disability and death benefits and payments to a vested employee who leaves the
Company prior to retirement.
The Company also has a Supplemental Plan to restore to employees of the
Company those retirement benefits earned by such persons under the Pension
Plan but not payable because of the limitations imposed on qualified plan
benefits by the Internal Revenue Code. Payment of benefits under the
Supplemental Plan may be made at the same time and in the same manner benefits
under the Pension Plan are paid. If a participant's employment is terminated
and such person is entitled to a deferred vested benefit under the Pension
Plan, such person will be entitled to receive benefits under the Supplemental
Plan upon retirement. The Supplemental Plan also provides a lump sum death
benefit to certain key employees equal to the amounts they have accrued under
the Pension Plan.
Messrs. Caspersen, Farris, Halvorsen, Gilliam and Grohol had
approximately 23, 35, 17, 15 and 40 years of service, respectively, credited
under the Pension Plan and the Supplemental Plan through 1994.
OTHER INFORMATION WITH RESPECT TO OFFICERS AND DIRECTORS
Employment Contracts. The Company has employment contracts with
approximately 300 management level employees of the Company and its
subsidiaries to assure such employees of equitable treatment in the event
of a change of control of the Company (as defined in the contracts) not
approved by the
13
<PAGE>
Company's Board of Directors. Messrs. Caspersen, Farris, Halvorsen and
Gilliam are not covered by such agreements but, instead, have Severance
Agreements as described below. The employment contracts are operative for a
three-year period if a change of control occurs. They will provide such
employees (a) compensation during the employment period at a rate equal to
that existing immediately prior to the change in control, adjusted through
such period to reflect increases based upon the Company's prior practices and
(b) continued eligibility during such period under the Company's employee
benefit plans. An employee's good faith determination that the nature and
scope of his or her duties have been limited following a change of control
would entitle the employee to terminate employment with the Company. In that
event or in the event of a termination of employment by the Company other than
for "cause" (as defined in the contract), most components of such compensation
and benefits would continue through the remainder of the three-year period.
The contracts also provide that in the event any payments thereunder become
subject to excise tax under the Internal Revenue Code, the Company will make
an additional cash payment to the employee to offset such tax.
Severance Agreements. The Company has severance agreements with key
officers of the Company and its subsidiaries. Messrs. Caspersen, Farris,
Halvorsen and Gilliam are covered by such agreements. These agreements
provide, among other things, for severance payments in the event of
termination by the Company other than for "cause" (as defined in the
agreements) or by such officer for "good reason" (as defined in the
agreements) following a "change of control" (as defined in the agreements and
including a liquidation) of the Company. Severance benefits under the
Severance Agreements consist principally of (i) the officer's accrued base
salary including a year-end adjustment, if any; (ii) either one or two times
the sum of the officer's (a) annual base salary, (b) the greater of such
officer's 1985 annual year-end adjustment or the adjustment, if determined,
for the year in which such officer's termination occurs and (c) the greater of
the officer's 1985 award under the Key Plan or any subsequent award under such
plan; (iii) a lump sum payment equal to (a) the aggregate nonvested share
units credited to the officer's account under the Employees' Stock Purchase
Plan and (b) the aggregate value of the officer's account under the Key Plan
and; (iv) with some restrictions, two years of continued coverage under the
Company's benefit plans. In addition to the foregoing, each Severance
Agreement for Messrs. Caspersen, Farris, Halvorsen and Gilliam, provides (i)
that if he remains with the Company for three months following a change in
control, he may terminate employment for any reason during the fourth month
and upon such termination receive the severance benefits set forth above and
(ii) for additional cash payments to offset any federal excise tax that may be
imposed by reason of payments made pursuant to the Severance Agreements.
Directors' Indemnification Agreements. The Company entered into
indemnification agreements with each of its directors which provide that such
directors will be indemnified against expenses, judgments, penalties, fines
and amounts paid in settlement with respect to threatened, pending or
completed actions, suits or proceedings to which any such person is, or is
threatened to be made, a party, to the fullest extent permitted by applicable
law as in effect from time to time. Such agreements also require the Company
to advance all reasonable expenses incurred by a director in any such
proceeding provided that he or she undertakes to repay the amount advanced if
it is ultimately determined that he or she is not entitled to indemnification
for such expenses. The agreements provide that upon the occurrence of a
"change in control" (defined in the agreements) of the Company, the Company
has the burden of proof to establish that a director who has requested
indemnification is not entitled to it.
Loans. Certain banking and mortgage company subsidiaries of the Company
have made, and will continue to make, mortgage and other loans, in the
ordinary course of business, to directors and officers of the Company. These
loans have been and will be made on substantially the same terms, including
interest rate and collateral, as those prevailing at the time for comparable
transactions with other customers and do not and will not involve more than
the normal risk of collectibility or present other unfavorable features.
Compliance with Section 16(a) of the Securities Exchange Act. Section
16(a) of the Securities Exchange Act of 1934 requires the Company's officers
and directors to file reports of ownership and changes in ownership with the
Commission. During 1994, the following individuals had late filings: (a)
Robert A. Tucker, a director, filed two required forms late with respect to
two transactions involving a trust of which he is the beneficiary and
co-trustee; (b) Eileen F. Caulfield, former Vice President and Secretary,
filed one required form late with respect to two transactions; (c) Robert M.
Grohol, former Senior Vice President- Operations of Beneficial Management
Corporation, a subsidiary, filed one required form late with respect
14
<PAGE>
to two transactions; and (d) Thomas P. McGough, Senior Vice President-Finance
and Treasurer, filed one required form late with respect to three
transactions.
Professional Associations. The law firms of Butler, Snow, O'Mara, Stevens
& Cannada, of which Mr. Cannada is senior counsel, and Hopkins & Sutter, of
which Mr. Worthy is senior counsel, performed legal services for the Company
and its subsidiaries in 1994. Such firms are currently performing services
for the Company and its subsidiaries.
PROPOSAL 2 -- RATIFICATION OF SELECTION OF AUDITORS
-------------------------------------
The Board of Directors, upon recommendation of the Audit Committee, which
is composed of five directors who are not officers or employees of the
Company, has selected, subject to stockholder approval, the firm of Deloitte &
Touche LLP, Certified Public Accountants, as the independent auditors of the
Company for 1995, and it is intended that, unless otherwise specified on the
accompanying proxy, votes will be cast pursuant to the proxy for the
ratification of such action. As in prior years, a representative of Deloitte
& Touche LLP will be present at the meeting and available to respond to
appropriate questions. The representative also will have an opportunity to
make a statement if he or she so desires.
Audit services rendered by Deloitte & Touche LLP to the Company in 1994
included examination of the annual financial statements, review of unaudited
quarterly financial information, assistance and consultation in connection
with reports and registration statements filed with the Commission and
consultation in connection with various accounting matters. Services provided
by Deloitte & Touche LLP were approved by the Audit Committee in most but not
all cases before they were rendered.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 2 TO RATIFY THE
SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS OF THE COMPANY
FOR 1995.
An affirmative vote by the holders of outstanding shares of Common
Stock, $4.30 Dividend Cumulative Preferred Stock and $5.50 Dividend
Cumulative Convertible Preferred Stock together having a majority of the
votes represented at the meeting is required for approval of Proposal 2.
OTHER BUSINESS
The Board of Directors does not know of any matters to come before the
meeting other than those referred to in the Notice of Meeting. If any other
matters should come before the meeting, the accompanying proxy will be voted
on such other matters in accordance with the judgment of the person or persons
voting the proxy.
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Stockholder proposals for the 1996 Annual Meeting must be received at the
office of the Company, 301 North Walnut Street, Wilmington, Delaware 19801,
Attn. Corporate Secretary, not later than December 8, 1995 for inclusion in
the 1996 proxy statement and form of proxy.
INFORMATION INCORPORATED BY REFERENCE
The Company will promptly provide a copy of the Company's 1994 Proxy
Statement referred to on pages 7 and 10 to any stockholder upon request.
Such requests should be directed to the Corporate Secretary at (800)
688-0534 or to the address listed above.
COST OF SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company. Solicitation
of proxies from some stockholders of the Company may be made by personal
interview, mail, telephone or facsimile by the directors, officers and
employees of the Company or its subsidiaries. The Company also will request
brokerage houses, custodians, nominees and fiduciaries to forward the proxy
material and annual report to stockholders to the beneficial owners of the
stock held of record by such persons and will reimburse them, upon request,
for reasonable expenses incurred in connection therewith.
By order of the Board of Directors,
SCOTT A. SIEBELS
Vice President and Secretary
15
<PAGE>
[LOGO] BENEFICIAL
CORPORATION
[LOGO]
RECYCLED
PAPER
<PAGE>
COMMON STOCK PROXY
[LOGO] PLEASE SIGN AND DATE THIS PROXY ON THE REVERSE SIDE
Beneficial Corporation AND RETURN IT IN THE ENCLOSED ENVELOPE IF YOU DO
Wilmington, DE 19899 NOT EXPECT TO ATTEND THE MEETING IN PERSON.
The undersigned hereby appoints James H. Gilliam, Jr. and Scott A.
Siebels, and each of them, proxies, with full power of substitution, to
represent and vote, as designated below, at the Annual Meeting of Stockholders
of the Company on May 18, 1995 including adjournments, the number of votes to
which the undersigned would be entitled if personally present.
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE ELECTION OF ALL DIRECTORS
LISTED BELOW, AND FOR PROPOSAL 2.
1. ELECTION OF FOR all nominees listed WITHHOLD AUTHORITY to P
DIRECTORS: below (except as marked vote for all nominees
to the contrary below) / / listed below / /
Charles W. Bower, Robert J. Callander, Robert C. Cannada, Finn M. W. R
Caspersen, Leonard S. Coleman, Jr., David J. Farris, James H. Gilliam, Jr.,
Andrew C. Halvorsen, Roland A. Hernandez, J. Robert Hillier, Gerald L.
Holm, Thomas H. Kean, Steven Muller, Susan Julia Ross, Robert A. Tucker,
Susan M. Wachter, Charles H. Watts, II, and K. Martin Worthy. O
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
X
- ---------------------------------------------------------------------------
2. RATIFICATION OF THE SELECTION OF THE FIRM OF DELOITTE & TOUCHE as the
auditors of the Company for 1995.
Y
FOR / / AGAINST / / ABSTAIN / /
- ---------------------------------------------------------------------------
3. In their discretion, the proxies are authorized to vote upon any other
business that may properly come before the meeting.
<PAGE>
(Continued from other side)
P
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IF NO
DIRECTION IS MADE, THE PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES
FOR DIRECTORS LISTED ON THIS PROXY, AND FOR PROPOSAL 2.
R
Receipt of a copy of the Annual Report to Stockholders for 1994, Notice
of said meeting and Proxy Statement relating to said meeting is hereby
acknowledged.
O
________________________________(L.S.) X
*(Signature)
Y
________________________________(L.S.)
*(Signature)
_____________ , 1995
*Please sign exactly as your name(s)
appears on this proxy. Joint owners should
each sign. When signing in a representative
capacity, please give title.
