WFS FINANCIAL INC
DEF 14A, 1999-04-02
PERSONAL CREDIT INSTITUTIONS
Previous: ASTEA INTERNATIONAL INC, SC 13D/A, 1999-04-02
Next: GLOBAL TELESYSTEMS GROUP INC, SC 14D1/A, 1999-04-02



<PAGE>   1
                            SCHEDULE 14A INFORMATION

                PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                                (AMENDMENT NO.  )

Filed by the Registrant [ ]

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 240.14a-11(c) or 240.14a-12

                                WFS FINANCIAL INC
- --------------------------------------------------------------------------------
                (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.

[ ]  $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
     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
 
                                    WFS LOGO
 
                                23 PASTEUR ROAD
                            IRVINE, CALIFORNIA 92618
 
                                                                  March 29, 1999
 
TO OUR SHAREHOLDERS
 
     You are cordially invited to attend the Annual Meeting of Shareholders of
WFS Financial Inc (the "Company") to be held at 11:00 a.m. on April 27, 1999, at
the Corporate Headquarters in Irvine, California. The Board of Directors and
management hope that you will be able to attend the Annual Meeting in person.
 
     At the Annual Meeting, holders of the Company's Common Stock will be asked
to vote (i) for the election of Directors, and (ii) to ratify the appointment of
Ernst & Young LLP as the independent accountants for the Company for fiscal
1999. A formal Notice of Annual Meeting of Shareholders, WFS' 1998 Annual
Report, the Company's Proxy Statement and a proxy card for the Annual Meeting
accompany this letter.
 
     To assure that your shares will be represented, we ask that you read the
enclosed materials and complete, sign, date and return the proxy card as soon as
possible. Your vote, regardless of the number of shares you own, is important.
 
     We urge you to indicate your approval by voting FOR the matters indicated
in the Notice and ask that you vote promptly. If you attend the Annual Meeting,
you may vote in person if you desire, even if you have previously mailed your
proxy card.
 
     On behalf of the Board of Directors, we thank you for your cooperation and
continuing support.
 
                                          Sincerely,
 
                                          Ernest S. Rady
                                          Chairman of the Board
<PAGE>   3
 
                                    WFS LOGO
 
                                23 PASTEUR ROAD
                            IRVINE, CALIFORNIA 92618
 
                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
 
                          TO BE HELD ON APRIL 27, 1999
 
To the Shareholders of WFS Financial Inc:
 
     The Annual Meeting of Shareholders of WFS Financial Inc, a California
corporation ("the Company"), will be held at the Corporate Headquarters, 23
Pasteur Road, Irvine, California, on Tuesday, April 27, 1999, at 11:00 a.m., for
the following purposes:
 
     1. To elect four Directors for terms expiring in 2001.
 
     2. To ratify the appointment of Ernst & Young LLP as the independent
        accountants for the Company for fiscal 1999.
 
     3. To transact such other business as may properly come before the Annual
        Meeting or any adjournment thereof.
 
     The Board of Directors has selected March 8, 1999, as the record date (the
"Record Date") for the Annual Meeting. Those holders of record of the Company's
Common Stock at the close of business on that date are entitled to notice of and
to vote at the Annual Meeting and any adjournment thereof.
 
     All shareholders are requested to complete, date and sign the enclosed
proxy card promptly and return it in the accompanying postage prepaid
self-addressed envelope, whether or not they expect to attend the Annual
Meeting, in order to assure that their shares will be represented.
 
     Since mail delays occur, it is important that the proxy card be mailed well
in advance of the Annual Meeting. Any shareholder giving a proxy has the right
to revoke it at any time before it is voted. If you receive more than one proxy
card because your shares are registered in different names or at different
addresses, each proxy card should be signed and returned to ensure that all your
shares will be properly voted.
 
                                          By Order of the Board of Directors
 
                                          Guy Du Bose
                                          Secretary
 
                                   IMPORTANT
 
     WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
 
     FOR BANKS, BROKERAGE HOUSES AND NOMINEE HOLDERS, REQUESTS FOR ADDITIONAL
COPIES OF THE COMPANY'S PROXY MATERIALS SHOULD BE ADDRESSED TO GUY DU BOSE,
ESQ., WFS FINANCIAL INC, 23 PASTEUR ROAD, IRVINE, CALIFORNIA 92618.
<PAGE>   4
 
                                      LOGO
 
                                23 PASTEUR ROAD
                            IRVINE, CALIFORNIA 92618
 
                                PROXY STATEMENT
 
   APPROXIMATE DATE PROXY MATERIAL FIRST SENT TO SHAREHOLDERS: APRIL 2, 1999
 
     This Proxy Statement constitutes the Proxy Statement of WFS Financial Inc,
a California corporation, (the "Company" or "WFS"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Shareholders of the Company to be held on April 27, 1999, and
any adjournments thereof (the "Meeting").
 
MEETING DATE AND LOCATION
 
     The Meeting to consider the business described below will be held on April
27, 1999, at 11:00 a.m., at the Corporate Headquarters, 23 Pasteur Road, Irvine,
California 92618.
 
PURPOSES
 
     At the Meeting, the shareholders will consider and vote on proposals to (i)
elect Class I Directors of the Company to serve until 2001, and (ii) ratify the
appointment of Ernst & Young LLP as the Company's independent public accountants
for fiscal 1999.
 
RECORD DATE; SHAREHOLDERS ENTITLED TO VOTE
 
     The close of business on March 8, 1999, is the Record Date (the "Record
Date") for determination of the shareholders of the Company entitled to notice
of and to vote at the Meeting. On that date there were approximately 25,708,611
shares of the Company's Common Stock, no par value ("Common Stock"), outstanding
and no shares of any other class of stock outstanding.
 
VOTE REQUIRED
 
     Each share of the Common Stock outstanding on the Record Date will be
entitled to one vote with respect to approval of the various proposals submitted
to the shareholders. Ratification of the appointment of Ernst & Young LLP as the
Company's independent accountants is not required to be submitted for
shareholder approval and although shareholder approval is not binding, the Board
of Directors has elected to seek ratification by the affirmative vote of a
majority of the shares of Common Stock represented and voting at the Meeting.
 
MARKET VALUE OF STOCK
 
     As of Monday, March 8, 1999, WFS Financial Inc Common Stock had a market
price of $8.125 per share. The Common Stock of WFS Financial Inc is traded on
NASDAQ.
 
                     SOLICITATION AND REVOCATION OF PROXIES
 
     A form of proxy is being furnished herewith by the Company to each
shareholder, and, in each case, is solicited on behalf of the Board of Directors
of the Company for use at the Meeting for the purposes stated in the Notice of
Annual Meeting of Shareholders preceding this Proxy Statement. The entire cost
of soliciting these proxies will be borne by the Company.
<PAGE>   5
 
     Proxies duly executed and returned by shareholders and received by the
Company before the Meeting will be voted FOR the election of Class I Directors
specified herein; and FOR the ratification of the appointment of Ernst & Young
LLP as the Company's independent accountants for fiscal 1999, unless a contrary
choice is specified in the proxy. Where a specification is indicated as provided
on the proxy card, the shares represented by the proxy will be voted and cast in
accordance with the specification made. As to other matters, if any, to be voted
upon, the person designated as proxy will take such actions as he or she, in his
or her discretion, may deem advisable. The persons named as proxy and alternate
were selected by the Board of Directors of the Company. They are Officers and
Directors of the Company.
 
     Your execution of the enclosed proxy will not affect your right as a
shareholder to attend the Meeting and to vote in person. Any shareholder giving
a proxy has a right to revoke it at any time by either (a) a later dated proxy,
(b) a written revocation sent to and received by the Secretary of the Company
prior to the Meeting, or (c) attendance at the Meeting and voting in person.
 
                               VOTING SECURITIES
 
     The Company has outstanding Common Stock, of which approximately 25,708,611
shares were outstanding as of the Record Date. Only shareholders of record on
the books of the Company at the close of business on the Record Date will be
entitled to vote at the Meeting. Each share of the Common Stock is entitled to
one vote.
 
                             ELECTION OF DIRECTORS
 
     At the Annual Meeting, four nominees, Ernest S. Rady, Howard C. Reese,
James R. Dowlan and Joy Schaefer are nominated for election as Class I
Directors, each Director to serve until 2001 and until his or her successor is
elected and qualified. All nominees have been Directors since 1995. The person
named as proxy, and his alternate, in the accompanying proxy have advised the
Company of their intention to vote shares covered by proxies received in favor
of the election of the nominees named above, each of whom have consented to be
named and have indicated their intent to serve if elected. If any nominee
becomes unavailable for any reason, the proxy or his alternate in his or her
discretion will vote for substitute nominees of the Board, unless otherwise
instructed.
 
     The following information is submitted concerning the Directors of the
Company, including nominees for election, Ernest S. Rady, Howard C. Reese, James
R. Dowlan and Joy Schaefer.
 
<TABLE>
<CAPTION>
                                                  DIRECTOR
             NAME OF DIRECTOR               AGE    SINCE                POSITION
             ----------------               ---   --------              --------
<S>                                         <C>   <C>        <C>
Ernest S. Rady*...........................  61      1995     Chairman of the Board, Director
Howard C. Reese*..........................  67      1995     Vice Chairman, Director
Joy Schaefer*.............................  39      1995     Vice Chairman, Director, Chief
                                                             Executive Officer
James R. Dowlan*..........................  61      1995     Vice Chairman, Director
Bernard E. Fipp**.........................  58      1995     Director
Duane A. Nelles**.........................  55      1995     Director
Stanley E. Foster**.......................  71      1998     Director
</TABLE>
 
- ---------------
 * Class I Director, to serve until 2001.
 
** Class II Director, nominee for term expiring in 2000.
 
     The following information is submitted concerning each of the Directors:
 
     ERNEST S. RADY is Chairman of the Board of the Company. He has also served
as Chairman of the Board and Chief Executive Officer of Westcorp since 1982. He
has been Chairman of the Board of Western Financial Bank (the "Bank"), the
parent of WFS, since 1992; a director since 1982; and President and Chief
 
                                        2
<PAGE>   6
 
Executive Officer from June, 1994 to January, 1996, and again, from March 23,
1998 to March 23, 1999. He is currently Chairman of the Board and Chief
Executive Officer. He also served as Chairman of the Board of Western Thrift and
Loan Association, a predecessor of the Bank, from 1972. Mr. Rady is a principal
shareholder, manager and consultant to a group of companies engaged in real
estate management and development; property and casualty insurance; oil and gas
exploration and development; and beverage distribution.
 
     HOWARD C. REESE, a Director, joined the Company in 1987 as President and
Chief Executive Officer of Westcorp Financial Services, Inc. (now WFS). He
retired as President and CEO in 1996, and continues to serve in a consulting
capacity. He began his career in consumer finance with Household Finance
Corporation in 1953 where he managed several branch offices in southern
California. In 1963, he joined Fireside Thrift Company as a manager. He
progressed through the ranks as Supervisor, Assistant Vice President and
Regional Director, and ultimately to Operations Vice President in charge of 73
branch offices within the State of California.
 
     JOY SCHAEFER is Chief Executive Officer and Vice Chairman of the Board of
Directors of the Company. She served first as Senior Vice President, Chief
Financial Officer and Treasurer of the Bank since March, 1992, and was elected
Executive Vice President in January, 1994; and Chief Operating Officer and
Senior Executive Vice President in December, 1994. She was elected President of
WFS Financial in February, 1996 and Chief Executive Officer in December, 1997.
Ms. Schaefer joined the Bank on January 1, 1990, as Assistant Vice President and
Assistant Treasurer. Prior to her association with the Bank, she was a Manager
in the financial institutions group now known as Ernst & Young LLP, in the Long
Beach, California and Springfield, Illinois offices, and with Illinois National
Bank in Springfield, Illinois. Ms. Schaefer also held various positions with
Liberty National Bank in Oklahoma City, Oklahoma, from 1985 to 1988.
 
     JAMES R. DOWLAN has been a Director and Vice Chairman of the Board since
1995 and was Senior Executive Vice President of the Company from 1995 through
January, 1999. He started as Senior Vice President of the Bank from 1984 and
then as Executive Vice President of the Bank from 1989 until the Auto Finance
Division of the Bank was combined into WFS in 1995. He also served as Chairman
of the Board of Western Financial Insurance Agency, Inc., and Chairman of
Westhrift Life Insurance Company, subsidiaries of the Bank; and President and
CEO of WFS Financial Auto Loans, Inc., and WFS Financial Auto Loans 2, Inc.,
subsidiaries of WFS. Prior to his association with the Bank, Mr. Dowlan was Vice
President, Loan Administration of Union Bank where he held several positions
since 1973. He served for several years on the National Advisory Board, American
Bankers Association and the Consumer Lending Committee of the California Bankers
Association. He is a graduate of the Pacific Coast Banking School, University of
Washington.
 
     BERNARD E. FIPP has been a Director of the Company since 1995. Mr. Fipp
graduated from the University of Oregon and served five years as a carrier-based
naval aviator/officer and two years as a commercial pilot for United Airlines
before beginning his business career. Mr. Fipp has been active in commercial
real estate development, general contracting, real estate acquisition and
marketing since 1976. Investments in automobile dealerships in 1988 brought him
into the retail automobile industry where he acted as president of Ritchey-Fipp
Chevrolet for six years and served as president of the San Diego County
Chevrolet Dealer's Association and Chairman of the San Diego County New Car
Dealer's Association. Mr. Fipp is president of Fipp Investments LLC, a real
estate acquisition, management and development company.
 
     DUANE A. NELLES has been a Director of the Company since 1995. Mr. Nelles
has been in the private, personal investment business since 1987. Prior to 1987,
Mr. Nelles was a partner in the international accounting firm which is now known
as Coopers & Lybrand L.L.P., which he joined in 1968 after receiving his M.B.A.
degree from the University of Michigan. Since 1988, Mr. Nelles has been a member
of the board of directors of QUALCOMM, Inc., a world leader in digital wireless
communications.
 
     STANLEY E. FOSTER was elected to the Board of the Company in 1998 and has
been a Director of the Bank since 1992 and of Westcorp since 1978. Mr. Foster
has been President and Chief Executive Officer of Foster Investment Corporation
and its predecessor Ratner Corporation, an apparel manufacturing and investment
company headquartered in San Diego, California, since 1954. Mr. Foster also
serves as the Chairman of the
                                        3
<PAGE>   7
 
Board of Directors of Hang Ten International, Inc., and is a director of Postal
Annex Plus, Inc.; Accucom, Inc.; Cartronics, Inc.; and Hot Topic, Inc.
 
COMMITTEES OF THE BOARD
 
     The Company has a standing Audit Committee, consisting at present of Duane
A. Nelles (Chairman), Stanley E. Foster and Bernard E. Fipp. The functions of
the Audit Committee are to make recommendations to the Board with respect to the
engagement of the Company's independent public accountants; to review the
effectiveness of the Company's systems of internal controls; and to review, upon
the request of management, professional services to be provided to the Company
by outside auditors. The Company has contracted with its outside auditors to
perform expanded audit procedures previously performed by an internal audit
department. The Audit Committee held six meetings in 1998.
 
     The Company has a standing Compensation Committee whose current members are
Stanley E. Foster (Chairman), Bernard E. Fipp and Duane A. Nelles. The
Compensation Committee reviews and approves recommendations for annual salaries
of employees paid by the Company and reviews and sets the levels of compensation
of senior management, as well as establishing policies applicable to,
performance related to, and basis for compensation. The Compensation Committee
held three meetings during 1998.
 
     The Executive Committee has the powers of the Board of Directors except as
precluded by law and the Company's bylaws. The Executive Committee was comprised
of Messrs. Rady and Dowlan and Ms. Schaefer and held three meetings during 1998.
 
     The Directors of the Company, the Bank and Westcorp, being cognizant of the
risks associated with Year 2000 computer issues ("Y2K"), recognize the need to
be actively involved in the Company's plans to mitigate exposure to those risks.
Therefore, the joint WFS/Bank Year 2000 Committee, consisting of Stanley E.
Foster, Bernard E. Fipp, Charles E. Scribner, Duane A. Nelles and Ernest S.
Rady, was established and met two times in 1998. The Committee oversees and
monitors the Y2K remediation plans and provides guidance to the Year 2000
project.
 
MEETINGS OF THE BOARD
 
     The Board of Directors of the Company held a total of nine meetings during
1998. All directors have attended at least 75% of the meetings of the Board of
Directors.
 
COMPENSATION OF DIRECTORS
 
     Each director who is not also an officer of the Company or any of its
subsidiaries received $4,500 per quarterly Board meeting and $2,250 for
non-quarterly Board meetings attended, and $1,000 for each committee meeting
which is not held in conjunction with a Board meeting. Directors who are also
officers of the Company or any of its subsidiaries are not compensated for their
services as directors, and directors who attend a Company or Westcorp board
meeting on the same day are compensated for only one of the two meetings.
 
                                        4
<PAGE>   8
 
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
 
     The following information is provided with respect to the executive
officers of the Company who are not directors. Some officers providing services
to the Company are employed by related companies of the Company, and provide
those services at fair market value to the Company, while also serving as
officers of the Company.
 
<TABLE>
<CAPTION>
                                                                                 OFFICER
               NAME                               POSITION                AGE     SINCE
               ----                               --------                ---    -------
<S>                                  <C>                                  <C>    <C>
Thomas Wolfe.......................  President and Chief Operating        39      1998
                                     Officer
Lee A. Whatcott....................  Executive Vice President, Chief      39      1992
                                     Financial Officer
Richard W. Stephan.................  Executive Vice President             60      1994
J. Keith Palmer....................  Senior Vice President and Treasurer  38      1995
Mark Olson.........................  Senior Vice President and            35      1995
                                     Controller
Guy Du Bose........................  Senior Vice President, General       44      1995
                                     Counsel and Secretary
Anne M. FitzGerald.................  Senior Vice President, Director of   39      1995
                                     Human Resources
Ralph Boulware.....................  Senior Vice President                55      1996
Dawn M. Martin.....................  Senior Vice President, Chief         39      1997
                                     Information Officer
Donna Lesch........................  Senior Vice President, Dir. Of       39      1998
                                     Performance Support Group
Dennis Morris......................  Senior Vice President, Chief Credit  34      1998
                                     Officer
</TABLE>
 
     The following is a brief account of the business experience of each
executive officer who is not a director.
 
     THOMAS WOLFE became President and Chief Operating Officer of the Company in
March, 1999. He previously served as Executive Vice President and National
Production Manager of the Company since April of 1998. Prior to joining WFS, he
held the position of National Production Manager at Key Auto Finance, where he
oversaw the production of the indirect auto finance business which included
prime, sub-prime, leasing and commercial lending. Mr. Wolfe has been in the auto
finance and consumer credit industry since 1982. He previously held positions
with Citibank, Inc., and General Motors Acceptance Corporation. He graduated
from Oregon State University in 1981 with a degree in finance.
 
     LEE A. WHATCOTT has served as Executive Vice President since 1996 and Chief
Financial Officer of the Company since 1995. He also serves as Executive Vice
President and Chief Financial Officer of the Bank and Senior Vice President and
Chief Financial Officer of Westcorp. Mr. Whatcott joined the Company in 1988 and
became Vice President, Controller in 1992. Prior to joining the Company, he was
employed by what is now known as Ernst & Young LLP, independent auditors, and an
international accounting firm. He is licensed as a Certified Public Accountant
in the state of California and is a member of the American Institute of
Certified Public Accountants.
 
     RICHARD W. STEPHAN has served as Executive Vice President of the Company
since 1995; and as Chief Information Officer from 1996 to December, 1998. He is
also Senior Vice President and Chief Information Officer of Westcorp, and
Executive Vice President and Chief Information Officer of the Bank. Mr. Stephan
has over 25 years of experience in the information technology field with the
last 20 years in the financial institution services industry. Prior to his
association with the Company, Mr. Stephan was an Executive Vice President of
FiServ, Inc., a major provider of information services to the banking industry
and he was a partner with the company now known as Ernst and Young LLP, where he
managed the consulting practice for the Western Region, served as the Senior
Technology Partner for the firm for the banking industry and was a member of the
planning committee for the firm-wide banking practice. Mr. Stephan is a member
of the Chief Information Officer National Association and is a Certified Systems
Professional.
 
                                        5
<PAGE>   9
 
     J. KEITH PALMER has served as Senior Vice President and Treasurer of the
Company since 1995; and of the Bank since 1993. He also serves as Vice President
and Treasurer of Westcorp. Prior to joining the Bank in 1993, Mr. Palmer served
as a Capital Markets Examiner with the Office of Thrift Supervision from 1991 to
1993. From 1986 to 1991, Mr. Palmer served in various capacities with the Office
of Thrift Supervision. Mr. Palmer has worked in the banking industry for 14
years.
 
     MARK OLSON, Senior Vice President, Controller, has been with the Company
since December, 1995. He is also Vice President, Controller, of Westcorp. He
joined the Bank in 1991 as Accounting Systems Director, and he is presently
Senior Vice President and Controller of the Bank. Prior to joining the Company,
Mr. Olson was employed by what is now known as Ernst & Young LLP, independent
auditors, and an international accounting firm. Mr. Olson is a licensed
Certified Public Accountant in the state of California and is a member of the
American Institute of Certified Public Accountants.
 
     GUY DU BOSE is Senior Vice President, General Counsel and Secretary of the
Company and the Bank; and Vice President, General Counsel and Secretary of
Westcorp. He started as Vice President and Legal Counsel of the Bank in
November, 1992. Prior to his association with the Company, Mr. Du Bose was Chief
Operating Officer and General Counsel of Guardian Federal Savings, Senior Vice
President and General Counsel of Mercury Federal Savings and Loan Association
and Corporate Counsel of Southern California Savings. He earned a B.A. from USC,
a J.D. from Whittier College and LL.M. from Cambridge University. Mr. Du Bose is
an active member of the California State Bar Association and a member of various
professional associations.
 
     ANNE M. FITZGERALD has served as Senior Vice President, Director of Human
Resources, of the Company; and Vice President, Director of Human Resources, of
Westcorp since January, 1996. She joined the Bank in 1995 as Vice President,
Director of Human Resources. Ms. FitzGerald has over 15 years experience in the
Human Resources field, and spent 5 1/2 years, prior to joining Westcorp, working
for Pepsi Cola, ultimately as Director of Human Resources for the southern
California business unit. Previous experience includes various Human Resources
positions working for Pier 1 Imports and Texas Instruments. Ms. FitzGerald holds
her Masters in Labor and Industrial Relations from Michigan State University and
her Masters in Business Administration from Southern Methodist University.
 
     RALPH BOULWARE is Senior Vice President of the Company and the Bank; and
Vice President of Westcorp. He received a B.S. degree in Information Systems
Management from the University of San Francisco, and an Executive M.B.A. degree
from the University of California at Los Angeles. His previous experience has
included First Interstate Bank and both domestic and international assignments
with Electronic Data Systems (EDS). He was with ARNI, Inc. from 1992-1996. Mr.
Boulware joined WFS in 1996 as Vice President of Operations in Information
Services. In 1997, he was promoted to Senior Vice President of WFS, as Director
of Regional Service Center Operations. Among his areas of responsibilities at
WFS are corporate real estate, corporate support functions, and two regional
business centers (located in Dallas, TX, and Irvine, CA) which provide back
office support for auto financing. In 1998, the Bank promoted him to Senior Vice
President.
 
     DAWN M. MARTIN is Senior Vice President and Chief Information Officer at
WFS. Ms. Martin joined WFS in April, 1997 as Senior Vice President, Manager of
Network Computing. In February, 1998 she was named Manager of Business Unit
Support. Prior to joining WFS, Ms. Martin was Senior Vice President and System
Integration Officer at American Savings Bank where she was employed from 1984 to
1997. Ms. Martin has more than 19 years of experience in Information Technology
within the financial services industry.
 
     DONNA J. LESCH serves as the Senior Vice President, Director of the
Performance Support Group (PSG). PSG develops and delivers training,
documentation/forms, corporate communication and supports business owners in
project management. Donna has over 20 years experience in the training and
education field. Previous to joining WFS, she managed training functions at
American Savings Bank and Executrain. She graduated from the University of
Washington with a B.A. in Psychology/Education.
 
     DENNIS MORRIS, Senior Vice President and Chief Credit Officer, has been
with WFS Financial since January of 1998. His background includes over 10 years
experience in national indirect automotive finance and
 
                                        6
<PAGE>   10
 
leasing with American Honda Finance Corporation and Nissan Motor Acceptance
Corporation. Among the many positions held within these companies, Dennis was
responsible for implementation of first generation, custom developed credit
scoring technology and risk based pricing in both centralized and regionalized
processing environments. He holds a B.S. degree in Accounting from San Diego
State University.
 
                       COMPENSATION OF EXECUTIVE OFFICERS
 
     The following table discloses compensation received for the three fiscal
years ended December 31, 1998, by the Company's Chairman of the Board, President
and Chief Executive Officer, and the next four most highly compensated executive
officers in 1998 (the "Named Executive Officers").
 
                           SUMMARY COMPENSATION TABLE
 
     Compensation described in this table is compensation paid by the Company
unless otherwise noted:
 
<TABLE>
<CAPTION>
                                                                                   LONG-TERM COMPENSATION
                                                                             ----------------------------------
                                                                              WESTCORP       WFS
                                                ANNUAL COMPENSATION(1)         STOCK        STOCK
                                            ------------------------------   OPTIONS(4)   OPTIONS(5)    AWARDS       ALL OTHER
    NAME AND PRINCIPAL POSITION      YEAR    SALARY    BONUS(2)   OTHER(3)    (SHARES)     (SHARES)    (SHARES)   COMPENSATION(6)
    ---------------------------      ----   --------   --------   --------   ----------   ----------   --------   ---------------
<S>                                  <C>    <C>        <C>        <C>        <C>          <C>          <C>        <C>
Ernest S. Rady.....................  1998   $420,000   $      0   209,135      48,419       21,198        0          $ 21,999(7)
  Chairman of the Board of           1997    420,000          0         0      50,000            0        0            33,875  
    Directors                        1996    400,000    116,000   551,121      20,000       55,000        0            48,372
                                     
Joy Schaefer.......................  1998    315,000     75,000    70,616      21,145       16,958        0             9,117(9)
  President, Chief Executive         1997    268,740     80,622   152,109      15,000       35,000        0            24,540
  Officer, Chief Operating Officer   1996    225,000     65,250   189,446      15,000       44,000        0            35,047
  and a Vice Chairman of the Board       
  of Directors of the Company;
  Chief Operating Officer and Senior
  Executive Vice President of
  Westcorp and the Bank(8)
Lee A. Whatcott....................  1998    200,000     56,100         0      14,772        5,870        0            10,165(10)
  Executive Vice President and       1997    175,000     58,275         0      11,000       11,000        0            21,586
  Chief Financial Officer of the     1996    149,790     43,440    22,900      10,000            0        0            30,248
  Company and the Bank; Senior 
  Vice President and Chief 
  Financial Officer of Westcorp
Richard W. Stephan.................  1998    189,000     43,376         0       8,397            0        0             7,312(11)
  Executive Vice President of the    1997    180,000     36,000         0       7,000            0        0            19,462
  Company; Senior Vice President,    1996    168,500     42,125         0       5,000            0        0            29,757
  Chief Information Officer of
  Westcorp; and Executive Vice
  President and Chief Information
  Officer of the Bank
James R. Dowlan....................  1998    230,247          0         0       8,827       16,958        0           181,571(12)
  Vice Chairman of the Board of      1997    242,500          0         0           0            0        0            29,640
  Directors                          1996    210,900     61,161         0      12,000       44,000        0            36,855
</TABLE>
 
- ---------------
 (1) The compensation of Ms. Schaefer, Mr. Stephan and Mr. Dowlan was paid by
     WFS. The compensation for Mr. Rady and Mr. Whatcott was paid by Westcorp.
 
 (2) 1996 and 1997 Bonus restated for comparison using bonus earned in the year
     indicated and payable the following year.
 
 (3) Includes the spread between market price and exercise price on Westcorp
     options exercised, plus, for 1996, the $3.00 per share spread between
     market price and exercise price of WFS SARs exercised in 1996.
 
 (4) Stock options for shares of Westcorp, the parent company, were awarded in
     the year indicated pursuant to a stock repricing program and exercisable in
     the future.
 
 (5) Stock options for shares of WFS were awarded in the year indicated pursuant
     to a stock repricing program and exercisable in the future. Awards in 1996
     were conditioned upon the recipient's exercise of all his/her SARs.
 
 (6) Includes above market preferential interest accrued on salary deferral by
     executive under deferred compensation plans, plus Company contribution to
     EDP4 in 1996 and 1997 (described below), 401(k) and ESOP. A contribution of
     $759,313 was funded for 1998 to the Consolidated Plan (401(k) and
 
                                        7
<PAGE>   11
 
     ESOP) which benefits other employees in addition to those named in the
     Table. The Consolidated Plan is described below.
 
 (7) Includes $16,949 in accrued above-market earnings on deferred compensation
     plus $5,050 employer contribution to 401(k)/ESOP Plan.
 
 (8) Effective March 23, 1999, Mr. Wolfe became President and Chief Operating
     Officer of WFS. Ms. Schaefer remains Chief Executive Officer and a Vice
     Chairman of the Board of Directors of the Company; President and Chief
     Operating Officer of Westcorp; and Chief Operating Officer and Senior
     Executive Vice President of the Bank.
 
 (9) Includes $4,067 in accrued above-market earnings on deferred compensation
     plus $5,050 employer contribution to 401(k)/ESOP Plan.
 
(10) Includes $5,115 in accrued above-market earnings on deferred compensation
     plus $5,050 employer contribution to 401(k)/ESOP Plan.
 
(11) Includes $2,262 in accrued above-market earnings on deferred compensation
     plus $5,050 employer contribution to 401(k)/ESOP Plan.
 
(12) Includes $11,246 in accrued above-market earnings on deferred compensation,
     $5,050 employer contribution to the 401(k)/ESOP Plan and $165,275 for a one
     time realignment incentive payment.
 
                                        8
<PAGE>   12
 
                                   REPRICING
 
     In 1998, the Compensation Committee determined that it was in the best
long-term interest of the Company to effectively reprice stock options which
were outstanding in favor of not only the Named Executive Officers but all
outstanding options by issuing new options proportionally reduced in number to
reflect the new share price, based upon the book value of the Company's stock in
exchange for the options outstanding. Pursuant to applicable rules, the
following ten-year option repricing table is presented.
 
                           TEN-YEAR OPTION REPRICINGS
 
<TABLE>
<CAPTION>
                           NUMBER OF SECURITIES   MARKET PRICE OF    EXERCISE PRICE                  LENGTH OF ORIGINAL
                            UNDERLYING OPTIONS    STOCK AT TIME OF     AT TIME OF                       OPTION TERM
                               REPRICED OR          REPRICING OR      REPRICING OR    NEW EXERCISE      REMAINING AT
                                 AMENDED             AMENDMENT         AMENDMENT        PRICE(1)     DATE IF REPRICING
     NAME         DATE             (#)                  ($)               ($)             ($)           OR AMENDMENT
     ----        -------   --------------------   ----------------   --------------   ------------   ------------------
<S>              <C>       <C>                    <C>                <C>              <C>            <C>
Ralph Boulware   9/16/98           3,000               6.9375            13.00           6.9375       6 yrs., 1 mo.
James Dowlan     9/16/98          17,180               6.9375            18.00           6.9375       2 yrs., 10 mos.
James Dowlan     9/16/98          26,820               6.9375            18.00           6.9375       2 yrs., 10 mos.
Bernard Fipp     9/16/98           1,834               6.9375            18.00           6.9375       2 yrs., 10 mos.
Bernard Fipp     9/16/98           5,000               6.9375            18.00           6.9375       2 yrs., 10 mos.
Bernard Fipp     9/16/98           3,500               6.9375            13.00           6.9375       6 yrs., 1 mo.
Bernard Fipp     9/16/98           3,400               6.9375             9.00           6.9375       6 yrs., 4 mos.
Donna Lesch      9/16/98           2,500               6.9375            13.00           6.9375       6 yrs., 1 mo.
Duane Nelles     9/16/98           1,834               6.9375            18.00           6.9375       2 yrs., 10 mos.
Duane Nelles     9/16/98           5,000               6.9375            18.00           6.9375       2 yrs., 10 mos.
Duane Nelles     9/16/98           3,500               6.9375            13.00           6.9375       6 yrs., 1 mo.
Duane Nelles     9/16/98           3,400               6.9375             9.00           6.9375       6 yrs., 4 mos.
Mark Olson       9/16/98          10,000               6.9375            13.00           6.9375       6 yrs., 1 mo.
Ernest Rady      9/16/98          55,000               6.9375            18.00           6.9375       2 yrs., 10mos.
Howard Reese     9/16/98          33,458               6.9375            18.00           6.9375       2 yrs., 10 mos.
Howard Reese     9/16/98          17,876               6.9375            18.00           6.9375       2 yrs., 10 mos.
Joy Schaefer     9/16/98           4,744               6.9375            18.00           6.9375       2 yrs., 10 mos.
Joy Schaefer     9/16/98          39,256               6.9375            18.00           6.9375       2 yrs., 10 mos.
Joy Schaefer     9/16/98          35,000               6.9375            13.00           6.9375       6 yrs., 1 mo.
Lee Whatcott     9/16/98          11,000               6.9375            13.00           6.9375       6 yrs., 1 mo.
Thomas Wolfe     9/16/98          25,000               6.9375            11.00           6.9375       6 yrs., 7 mos.
</TABLE>
 
- ---------------
(1) The new exercise price of the options granted on 9/16/98 was based on fair
    market value as of that 9/16/98 date. The number of options were
    proportionately reduced based on the new grant at the then fair market
    value. For purposes of example only, an optionee holding 10,000 options at
    an exercise price of $18.00 received 3,854 options at an exercise price of
    $6.9375.
 
                       OPTION GRANTS IN LAST FISCAL YEAR
 
     There were no option grants, only repriced grants, in the last fiscal year
for Named Executive Officers.
 
                                        9
<PAGE>   13
 
                AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                       AND FISCAL YEAR-END OPTION VALUES
 
     The following table provides information on aggregated option exercises in
the last fiscal year and fiscal year-end option values in 1998 for the Named
Executive Officers.
 
<TABLE>
<CAPTION>
                                                                                              VALUE OF
                                                                                            UNEXERCISED
                                                            NUMBER OF UNEXERCISED           IN-THE-MONEY
                                                           WESTCORP ("W") OPTIONS/    WESTCORP ("W") OPTIONS/
                          NUMBER OF                          WFS ("WF") OPTIONS          WFS ("WF") OPTIONS
                       WESTCORP SHARES                         AT 12/31/98 (#)            AT 12/31/98 ($)
                         ACQUIRED ON     VALUE REALIZED      EXERCISABLE ("E")/          EXERCISABLE ("E")/
        NAME             EXERCISE(1)          ($)            UNEXERCISABLE ("U")       UNEXERCISABLE ("E")(2)
        ----           ---------------   --------------   -------------------------  --------------------------
<S>                    <C>               <C>              <C>            <C>         <C>             <C>
Ernest S. Rady.......     39,966(W)        209,135(W)           9,096 E  (W)              63,104 E   (W)
                                                               48,419 U  (W)             335,907 U   (W)
                                                                    0 E  (WF)                  0 E   (WF)
                                                               21,198 U  (WF)            132,488 U   (WF)
Joy Schaefer.........     14,376(W)         70,616(W)           9,056 E  (W)              62,826 E   (W)
                                                               23,245 U  (W)             161,262 U   (W)
                                                                    0 E  (WF)                  0 E   (WF)
                                                               35,636 U  (WF)            222,725 U   (WF)
Lee A. Whatcott......            0                 0            6,458 E  (W)              44,802 E   (W)
                                                               15,822 U  (W)             109,765 U   (W)
                                                                    0 E  (WF)                  0 E   (WF)
                                                                5,870 U  (WF)             36,688 U   (WF)
Richard W. Stephan...            0                 0           14,175 E  (W)              98,339 E   (W)
                                                                9,447 U  (W)              65,539 U   (W)
                                                                    0 E  (WF)                  0 E   (WF)
                                                                    0 U  (WF)                  0 U   (WF)
James R. Dowlan......            0                 0            9,151 E  (W)              63,485 E   (W)
                                                                8,827 U  (W)              61,237 U   (W)
                                                                    0 E  (WF)                  0 E   (WF)
                                                               16,958 U  (WF)            105,988 U   (WF)
</TABLE>
 
- ---------------
(1) Westcorp Options.
 
(2) Options based on the closing price on the New York Stock Exchange of
    Westcorp Common Stock on December 31, 1998 ($6.9375) and the closing price
    on NASDAQ of WFS Common Stock on December 31, 1998 ($6.25).
 
EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL ARRANGEMENTS
 
     Westcorp executed an employment contract in 1987 with Mr. Dowlan, certain
provisions of which are triggered by a change in control. Under the agreement,
Mr. Dowlan is guaranteed salary for a period of 24 months from the initiation of
change of control proceedings based on the average of the preceding three years'
salary and bonus. Westcorp reserves the right to terminate the agreement for
cause, which includes fraud or other misconduct of the employee.
 
     Ms. Schaefer and Mr. Whatcott are subject to written employment agreements.
Ms. Schaefer's employment agreement is with WFS, while Mr. Whatcott's employment
agreement is with both the Company and Westcorp. Both agreements were executed
as of February 27, 1998 and are similar as to their terms and conditions. Each
agreement establishes an initial base salary subject to annual review and
provides to Ms. Schaefer and Mr. Whatcott the same basic benefits otherwise
offered to those executive officers with whom no written employment agreement
exists. Both employment agreements also provide that if, as a result of or
following a change of control, Ms. Schaefer or Mr. Whatcott are terminated other
than for cause or are required to relocate they will be entitled to two years'
compensation, based upon the average of their salary and bonus for the three
calendar years preceding the triggering event. Both employment agreements may be
terminated by the employer at any time for cause.
 
                                       10
<PAGE>   14
 
CERTAIN BENEFITS
 
COMPENSATION PURSUANT TO BANK AND WESTCORP BENEFIT PLANS
 
     During 1998, the Company's Executive Officers participated in various
benefit plans maintained by the Bank and Westcorp, as described in further
detail below. WFS does not currently maintain any benefit plans independent of
those discussed below as maintained by the Bank and Westcorp, except for the WFS
Plan.
 
EXECUTIVE DEFERRAL PLANS
 
     Certain senior Executives of WFS are eligible to participate in Westcorp's
1985 Executive Deferral plan (the "1985 EDP"). A participant in the 1985 EDP may
defer a portion of his or her compensation from a minimum of $2,000 a year to a
maximum of 75% of his or her gross annual salary. The employer matches
contributions up to 5% of a participant's annual salary, excluding bonus. After
the seventh year of participation, there is a mandatory lump sum distribution to
the participant of the first four years' deferrals with interest thereon at
Moody's Investors Service Seasoned Corporate Bond Rate (the "Moody's Rate") plus
3%. Upon retirement following not less than 10 years participation in the 1985
EDP and the attainment of at least age 65, a participant's account will yield a
compound interest rate equal to the Moody's Rate plus 8%. A participant's
account balance is (i) the employer's contribution and (ii) deferrals for the
fifth and subsequent years of participation. Retirement benefits are paid out
over a 15-year period.
 
     Benefits owing under the 1985 EDP are paid by the employer through
borrowings against or proceeds from insurance policies on the lives of the
participants purchased by the employer.
 
     Certain senior Executives of WFS are also eligible to participate in
Westcorp's 1988 Executive Deferral Plan (the "1988 EDP"). A participant in the
1988 EDP may defer a portion of compensation from a minimum of $2,000 a year to
a maximum of 5% of base annual salary, excluding bonus. The employer matches
contributions up to 5% of a participant's base annual salary, excluding bonus.
Interest is credited to a participant's account at Moody's Rate plus 5%.
 
     Benefits provided by the 1988 EDP are paid by the employer through
borrowings against or proceeds from insurance policies on the lives of the
participants purchased by the employer. Participants who make contributions to
the Plan during or before attaining age 54, will receive distributions from the
plan prior to retirement. These payments will be made on the seventh, eighth and
ninth anniversaries of the annual deferral provided the participant has not
died, retired or terminated employment. The amount to be paid on each of the
seventh, eighth and ninth year anniversaries will be equal to the initial annual
deferral amount (participant deferral plus Company match). If a participant
retires from employment with the Company on or after the attainment of age 65 or
ten years of plan participation, a participant's account will yield a compounded
interest rate equal to Moody's plus 5 percent. Account balances of less than
$25,000 will be paid in a lump sum after separation, account balances of more
than $25,000 will be paid over 180 months with the interest on the unpaid
balance credited at Moody's Rate.
 
     Certain senior Executives of WFS are also eligible to participate in
Westcorp's 1992 Executive Deferral Plan (the "1992 EDP"). A participant may
defer a portion of compensation from a minimum of $2,000 a year to a maximum of
5% of base annual salary. There is no employer match in the 1992 EDP, unlike the
1985 EDP and the 1988 EDP. Interest is credited to a participant's account at
the Moody's Rate. A participant's first year's contribution plus interest will
be distributed beginning in the sixth year. A participant's second year's
contribution plus interest will be distributed in year seven and so on. If a
participant terminates employment, he receives all deferrals plus interest.
 
     Certain senior Executives of WFS are eligible to participate in Westcorp's
1995 Executive Deferral Plan (the "1995 EDP"). A participant in the 1995 EDP may
defer a portion of compensation from a minimum of $2,000 per year to a maximum
of 10% of base annual salary. There may be an employer match in the 1995 EDP at
the discretion of the Board of Directors.
 
                                       11
<PAGE>   15
 
     Additionally, employees required to take distribution from earlier EDP
plans, may elect, under the 1992 EDP and the 1995 EDP, to defer an additional
amount up to the distribution they are required to take. This additional
deferral is not eligible for any Company matching provisions.
 
     All deferrals under the 1995 EDP are eligible for interest payments and
interest is credited to a participant's account at the Moody's Rate. A
participant's distributions are intended to occur upon retirement following not
less than 5 years of participation in the 1995 EDP and the attainment of at
least age 65, or upon termination of employment. Participants receiving
distributions can elect to receive them paid out over five, ten or fifteen years
or in a lump sum option. The Plan was amended in 1997 to allow greater
flexibility in changing retirement elections in the year prior to planned
retirement.
 
STOCK OPTION PLANS
 
     1991 STOCK OPTION PLAN. The stock option plan of Westcorp was adopted by
the Board of Directors of Westcorp in April, 1991, and approved by its
shareholders in May, 1991, (the "1991 Stock Option Plan"). Employees and
directors of Westcorp and employees of its subsidiaries are eligible to
participate under the 1991 Stock Option Plan. The 1991 Stock Option Plan is
administered by the Westcorp Compensation Committee and, in such capacity, the
committee selects employees and directors to whom options are to be granted and
the number of shares to be granted based on established criteria. No further
options may be granted under the 1991 Stock Option Plan after April 15, 2001.
 
     Options granted under the 1991 Stock Option Plan may be either "incentive
stock options" or "non-qualified options" within the meaning of the Internal
Revenue Code ("the Code"). However, only non-qualified options may be granted to
directors who are not also employees. The term of the options may not exceed 10
years from the date of grant. However, optionees who own, prior to a grant,
directly or indirectly, 10.0% or more of the outstanding Common Stock of the
Company, may not be granted "incentive stock options" with a term greater than 5
years. Options may be terminated earlier, however, in the event of the death or
disability of the optionee or the optionee ceasing to perform services for
Westcorp or its subsidiaries, as provided in the 1991 Stock Option Plan. The
options are also subject to all of the other terms and conditions of the written
stock option agreement between the optionee and Westcorp. In 1998, a total of
355,225 options were granted, of which 37,500 were new grants and 317,725 were
options granted pursuant to a voluntary stock repricing program. Pursuant to
that repricing program during 1998, Westcorp repriced most of the options
outstanding by replacing those options with new options. The 317,725 repriced
options granted is a number that was proportionately reduced from 405,250
options held before the repricing in order to reflect the new exercise price.
All option holders taking part in this repricing program forfeited their
existing options and were issued a reduced number of new options at a reduced
exercise price.
 
     In the aggregate, 3,150,000 shares of Westcorp Common Stock may be the
subject of options granted under the 1991 Stock Option Plan. However, the number
of shares subject to options granted under that plan (and the exercise prices
for the options) are subject to adjustment in the event of any change in the
outstanding shares of Westcorp as a result of stock dividends, stock splits or
conversions of shares. If any option expires or terminates without having been
exercised in full, the unpurchased shares become available again for purposes of
future incentive and non-qualified stock options to be granted under the 1991
Stock Option Plan.
 
WFS STOCK OPTION PLAN
 
     In 1996, the Company adopted the WFS 1996 Stock Option Plan ("WFS Plan").
In the aggregate, 550,000 shares of WFS Common Stock were the subject of options
which may be granted pursuant to the WFS Plan. In 1997, the WFS Plan was amended
to increase WFS shares subject to the Plan to 1,100,000. Certain options granted
under the WFS Plan are intended to qualify as "incentive stock options" within
the meaning of the Code with other options to be "non-qualified" options;
options may also be granted under the WFS Plan that are not intended to qualify
as "incentive stock options". Options may be granted under the Plan to employees
and directors. Options may be granted under the WFS Plan to any WFS optionee
who, in the opinion of the Compensation Committee, is or gives promise of
becoming of exceptional importance to
 
                                       12
<PAGE>   16
 
WFS because of experience and ability. The Compensation Committee has the
discretion to determine the amounts and times of exercise of options. In 1998, a
total of 326,052 options were granted, of which 38,200 were new grants and
287,852 were options granted pursuant to a voluntary stock repricing program.
Pursuant to that repricing program during 1998, WFS repriced most of the options
outstanding by replacing those options with new options. The 287,852 repriced
options granted is a number that was proportionately reduced from 624,539
options held before the repricing in order to reflect the new exercise price.
All option holders taking part in this repricing program forfeited their
existing options and were issued a reduced number of new options at a reduced
exercise price. The options were repriced in the same manner as were the options
for Westcorp described above.
 
     As a result of several events, including increased losses resulting from
extraordinary increases in the rate of bankruptcies beyond historical highs and
dislocations following the consolidation and restructuring of the Company's
business lines, as well as the direct effect of the charges taken upon those
restructurings, the market price of the Company's stock has been adversely
affected. The market price of the Company's stock was significantly below the
exercise price of stock options previously granted to Named Executive Officers,
as well as those granted to other employees and to some directors of Westcorp
and its subsidiaries. As such, the essential value of stock options as a device
to incentivize the Named Executive Officers and other option holders and to
induce them to focus on long-term profitability at the expense of short-term
gain was lost. The Compensation Committee also appreciated that the Named
Executive Officers took the significant acts necessary to complete the
restructuring of the Company's business, notwithstanding the immediate and
negative effect that activity would have upon their options. Accordingly, the
Compensation Committee determined that it was in the best long-term interest of
Westcorp and its subsidiaries to effectively reprice the options which were
outstanding in favor of not only the Named Executive Officers but all
outstanding options by issuing new options proportionally reduced in number to
reflect the new share price, based upon the then market value of the Company's
stock in exchange for the options outstanding.
 
CONSOLIDATED PLAN
 
     In 1990, Westcorp consolidated its Employee Stock Ownership and Salary
Savings Plan and its Employee Stock Ownership Plan into the Westcorp Employee
Stock Ownership and Salary Savings Plan (the "Consolidated Plan"). The
Consolidated Plan is administered by an Administration Committee appointed by
the Board of Directors of Westcorp. All employees of the Company and its
subsidiaries are eligible to participate in the Consolidated Plan after
satisfaction of minimum service and age requirements. Each year Westcorp may, in
its discretion, make an ESOP contribution to the Consolidated Plan. Each
participant is credited with one "unit" for each $100 in earnings paid to such
participant by the employer in that year, and an additional "unit" for each full
year of service to the employer. If Westcorp makes an ESOP contribution, it is
allocated to each participant's ESOP Contribution Account (as defined in the
Consolidated Plan) in the same proportion as that participant's "units" bear to
the total number of "units" credited to all participants for that year. Eligible
employees may also elect to contribute from 1.0% to 10.0% of their earnings to a
Salary Savings Contribution Account (as defined in the Consolidated Plan). Each
year the employer may, in its discretion, make a matching employer contribution
which is allocated to the Matching Contribution Account (as defined in the
Consolidated Plan) for each participant that makes a Salary Savings contribution
for such year. If Westcorp makes a matching employer contribution, it is
allocated to the Matching Contribution Account in the same proportion that each
employee's contribution of up to 6.0% of earnings bears to the total of all
contributions of up to 6.0% of earnings. Westcorp's annual contribution to a
participant's ESOP Contribution Account and Matching Employer Contribution
Account, and a participant's contribution to such participant's Salary Savings
Contribution Account, may not exceed in the aggregate the lesser of 25.0% of
such participant's annual compensation or one-fourth of the dollar limitation
established under Section 415(b)(1)(A) of the Code.
 
     The contributions of Westcorp to a participant's ESOP Contribution Account
are invested in Westcorp common stock or approved investments at the direction
of the plan administrator. Each participant who has completed ten years of
service and has attained the age of 55 may also direct the plan administrator to
diversify the investments allocated to such participant's ESOP Contribution
Account. A participant's
 
                                       13
<PAGE>   17
 
contributions to his or her Salary Savings Contribution Account are invested by
the plan administrator in fixed income, stock or other permitted investment
alternatives selected by the participant. The plan administrator selects the
investment alternatives for the amount contributed by the employer to the
Matching Employer Contribution Account. Interest, earnings, dividends, gains and
losses are allocated to each participant's ESOP Contribution Account, Salary
Savings Contribution Account and Matching Employer Contribution Account, as the
case may be, in the proportion such account bears to the total accounts of all
participants in that investment alternative. Shares of Westcorp common stock
allocated to any of a participant's accounts are voted in accordance with the
proxy of such participant. Each participant is also entitled to direct the plan
administrator regarding the exercise of rights, other than voting rights,
arising in connection with shares of Westcorp common stock allocated to such
participant's accounts.
 
     Participants have a 100% non-forfeitable interest in the value of their
Salary Savings Contribution Account at all times. The participant's interest in
his or her ESOP Contribution Account and Employer Matching Contribution Account
becomes 20.0% vested after the completion of three calendar years of service. An
additional 20.0% becomes vested each following year, until the participant
completes 7 years of service and the participant's interests become fully
vested.
 
     A participant is entitled to receive all benefits under the Consolidated
Plan, whether or not vested, upon death, permanent disability, or retirement
upon attainment of at least age 65. Upon termination of employment for any other
reason, participants will receive the full amount of their Salary Savings
Contribution Account and the vested portions of their ESOP Contribution Account
and Matching Employer Contribution Account.
 
     In 1998, Westcorp made a $759,313 contribution to the Consolidated Plan,
which provided for a salary savings matching contribution by Westcorp but no
contribution to the ESOP Contribution Account.
 
                      REPORT OF THE COMPENSATION COMMITTEE
 
     The Company applies a consistent philosophy to compensation for all
employees, including senior management. This philosophy is based on the premise
that the achievements of the Company result from the coordinated efforts of all
individuals working toward common objectives. Each member of the Compensation
Committee is a non-employee director.
 
COMPENSATION PHILOSOPHY
 
     Under the supervision of the Compensation Committee of the Board of
Directors, the Company has developed and implemented compensation policies,
plans and programs which seek to enhance the profitability of the Company, and
thus shareholder value, by aligning closely the financial interests of the
Company's senior managers with those of its shareholder. The Compensation
Committee endorses the belief that stock ownership by management and the
granting of stock options to senior executives and key employees furthers that
goal and fosters decision-making by its key employees with the Company's
long-term safety and soundness in mind. Peer compensation information is
obtained from a variety of surveys and, in 1998, a thorough review of market
information for the Company's size and location was undertaken. Peer information
for the Company's performance was compiled from a number of sources, including
Watson Wyatt Worldwide.
 
     The compensation plans and programs are structured to integrate pay with
the Company's annual and long-term performance goals. The plans and programs are
designed to recognize initiative and achievement and to assist the Company in
attracting and retaining qualified executives. In furtherance of these goals,
annual base salaries are generally set at or below competitive levels so that
the Company relies to a large degree on annual incentive compensation to attract
and retain corporate officers and other key employees with outstanding abilities
and to motivate them to perform to the full extent of their abilities. For the
longer term, incentive stock options are awarded by Westcorp, the stock of which
is publicly traded. Incentive compensation is variable and closely tied to
corporate, business unit and individual performance in a manner that encourages
a sharp and continuing focus on building profitability and shareholder value. As
a result of the increased emphasis on tying executive compensation to corporate
performance, in any particular year the total
 
                                       14
<PAGE>   18
 
compensation of the Company's executives may be more or less than the executives
of the Company's competitors, depending upon the Company's or the individual
business unit's performance.
 
     In evaluating the performance and setting the incentive compensation of the
Chief Executive Officer and other senior executives, the Compensation Committee
takes into account their consistent commitment to long-term success of the
Company through conservative management of certain business units and aggressive
management of other business units as dictated by existing and anticipated
market conditions. Certainly the Compensation Committee expects and rewards
recognition by the Chief Executive Officer and senior executives of both adverse
and advantageous market conditions for each of the Company's major businesses.
 
     At the beginning of each year, performance goals to determine annual
incentive compensation are established for each business unit and for each
executive. Financial goals include overall profitability, loan volume growth,
operating earnings, loan delinquency levels and return on equity and return on
assets, Community Reinvestment Act results, cost controls and productivity. The
most weight is given to profitability as it relates to established goals.
Management goals were established at the beginning of 1998 for those executives
and managers who do not manage business units with direct financial goals. These
goals were tailored to the particular functions required to be performed. After
the close of the fiscal year, generally in early January, performance against
these goals and objectives is measured on both a predetermined arithmetic method
and, to a certain extent, on subjective evaluation, in light of market
conditions for the particular business unit. The results of these evaluations
are then considered by the Compensation Committee when determining the amounts
to be awarded (which appear as "Bonus" in the Summary Compensation Table).
 
     Most of the business units of the Company performed substantially in
accordance with their established budget. As a result, the senior executives of
those business units received bonuses in an amount slightly less than a full
performance bonus. The senior executives of other business units of the Company
which failed to meet performance goals by wider margins received either
significantly lower or no performance bonuses.
 
COMPENSATION OF CHIEF EXECUTIVE OFFICER
 
     In determining the Chief Executive Officer's compensation for 1998, the
Compensation Committee discussed and considered all of the factors discussed
above.
 
     In addition, target versus actual operating performance of the Company
overall, and various subjective performance criteria were utilized to determine
the extent to which the targeted annual bonus to the Chief Executive Officer
would be paid. The Committee analyzed her performance in comparison to specific
management objectives that were established. In addition, the Compensation
Committee evaluated how the Company, as a whole, performed, as measured against
its peers.
 
     The Compensation Committee considered the factors stated above in setting
Ms. Schaefer's bonus. At the same time, the Compensation Committee placed
significant emphasis upon the Company-wide restructuring accomplished during
1998, and Ms. Schaefer's role in guiding the Company through that difficult
process. The Compensation Committee also noted her contribution and efforts
towards the Company's progress in automation, centralization, credit quality and
cost reduction initiatives during 1998. The Compensation Committee decided a
partial award would be made for 1998. The Compensation Committee established
1999 management objectives for the CEO.
 
STOCK OPTION GRANTS
 
     Westcorp, the holding company, uses stock options as long-term incentives
and expects that it will continue to use this compensation alternative in the
future. In 1991, Westcorp adopted, and the shareholders approved, a new stock
option plan that made 3,150,000 shares of common stock of Westcorp available for
such purposes and is described above. The Westcorp Compensation Committee grants
incentive stock options to employees of the Company and its subsidiaries and
views such grants less as compensation and more as an incentive mechanism.
(Certain grants of Westcorp and WFS stock options were made in 1998 to some
executives as shown in the Summary Compensation Table, and to other key
employees, and will also be disclosed in the Westcorp's 10-K and the WFS 10-K
for their annual meetings to be held on April 27, 1999.)
 
                                       15
<PAGE>   19
 
OTHER COMPENSATION PLANS
 
     Other compensation benefits have from time to time been established for the
benefit of senior executives and other managers and officers of the Company,
each of which are discussed in the above materials. The results of these
compensation plans on the most highly compensated executives are reflected in
the Compensation Table.
 
POLICY REGARDING COMPLIANCE WITH I.R.C. SEC. 162(M)
 
     Section 162(m) of the Internal Revenue Code, as enacted by the Omnibus
Budget Reconciliation Act of 1993, provides in general that, beginning in 1994,
compensation paid to certain Executives of publicly held corporations will not
be deductible for federal income tax purposes to the extent it exceeds
$1,000,000 per year unless certain conditions are met. It is the present policy
of the Compensation Committee that individual compensation shall not exceed the
deductibility requirements of Internal Revenue Code, Section 162(m) and the
Company intends to take the necessary steps to comply, but also reserves the
right to enter into incentive and other compensation arrangements that do not so
comply when it determines that the benefits to the Company outweigh the cost of
the possible loss of federal income tax deductions.
 
                                          COMPENSATION COMMITTEE
 
                                          Stanley E. Foster, Chairman
                                          Bernard E. Fipp
                                          Duane A. Nelles
 
                                       16
<PAGE>   20
 
                         STOCK PRICE PERFORMANCE GRAPH
 
     Set forth below is a line graph depicting the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock against
the cumulative total return of the S & P Small Cap 600 Index and a compiled peer
group (NASDAQ Financial Index) for the period commencing August 8, 1995, (the
date of initial registration of the Company's securities for public sale), for
the Company's stock, and July 31, 1995, for the index, and ending December 31,
1998.
 
     The Stock Price Performance Graph below shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent the Company specifically
incorporated this information by reference, and shall not otherwise be deemed
filed under such Acts.
 
                COMPARISON OF 41 MONTH CUMULATIVE TOTAL RETURN*
             AMONG WFS FINANCIAL INC, THE S & P SMALLCAP 600 INDEX
                         AND THE NASDAQ FINANCIAL INDEX
 
<TABLE>
<CAPTION>
                                                   WFS FINANCIAL INC.           S&P SMALL CAP 600           NASDAQ FINANCIAL
                                                   ------------------           -----------------           ----------------
<S>                                             <C>                         <C>                         <C>
'8/9/95'                                                 100.00                      100.00                      100.00
'12/95'                                                  107.00                      105.00                      117.00
'12/96'                                                  120.00                      128.00                      150.00
'12/97'                                                   68.00                      160.00                      229.00
'12/98'                                                   38.00                      165.00                      221.00
</TABLE>
 
                * $100 INVESTED ON 8/9/95 IN STOCK OR ON 7/31/95
                IN INDEX -- INCLUDING REINVESTMENT OF DIVIDENDS.
                        FISCAL YEAR ENDING DECEMBER 31.
 
                                       17
<PAGE>   21
 
                SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                             AND MANAGEMENT -- WFS
 
     The following table sets forth, as of December 31, 1998, certain security
ownership information as to (a) the person who is beneficial owner of more than
5% of the outstanding shares of the Common Stock, (b) each Director and nominee
of the Company, (c) each of the Named Executive Officers and (d) all Officers
and Directors of the Company as a group. Management knows of no person in this
group, other than the person set forth below, who owns more than 5% of the
outstanding shares of Common Stock.
 
<TABLE>
<CAPTION>
                                                                             SHARES OF
                                                                            COMMON STOCK
                                                                               OF WFS
                                                                            BENEFICIALLY
                                                                            OWNED AS OF
                                                                            DECEMBER 31,      PERCENT OF
    NAME OF BENEFICIAL OWNER               POSITION WITH WFS                 1998(1)(2)         CLASS
    ------------------------       ----------------------------------    ------------------   ----------
<S>                                <C>                                   <C>                  <C>
Ernest S. Rady...................  Chairman of the Board and Director          11,000             --(3)
Howard C. Reese..................  Vice Chairman of the Board of
                                   Directors                                        0            N/A
Joy Schaefer.....................  Vice Chairman of the Board of
                                   Directors, President, Chief
                                   Executive Officer and Chief
                                   Operating Officer(4)                        10,700             --(3)
James R. Dowlan..................  Vice Chairman of the Board of
                                   Directors                                    1,000             --(3)
Bernard E. Fipp..................  Director                                       200             --(3)
Duane A. Nelles..................  Director                                     3,300             --(3)
Stanley E. Foster................  Director                                    21,000             --(3)
Lee A. Whatcott..................  Executive Vice President and Chief
                                   Financial Officer                            2,500             --(3)
Richard W. Stephan...............  Executive Vice President                     3,000             --(3)
Directors and Executive Officers
  as a Group (18 persons)........                                              60,600             --(3)
</TABLE>
 
- ---------------
(1) As of December 31, 1998, the Bank owns 86.7% of the Common Stock of the
    Company and Westcorp owned 100% of the Common Stock of the Bank; therefore,
    such indirect ownership of Management, Directors and nominees through their
    ownership of Westcorp Common Stock is set forth separately in the chart
    below.
 
(2) Includes present rights to acquire shares pursuant to the exercise of stock
    options within 60 days of December 31, 1998.
 
(3) The percentages are calculated on the basis of the number of shares
    outstanding. All shares are Common Stock. The Directors and Officers, as a
    group, own less than 0.24%.
 
(4) Effective March 23, 1999, Mr. Wolfe became President and Chief Operating
    Officer of WFS. Ms. Schaefer remains Chief Executive Officer and a Vice
    Chairman of the Board of Directors of the Company; President and Chief
    Operating Officer of Westcorp; and Chief Operating Officer and Senior
    Executive Vice President of the Bank.
 
                                       18
<PAGE>   22
 
                SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                           AND MANAGEMENT -- WESTCORP
 
     The Bank currently owns 86.7% of the shares of WFS' Common Stock. Under
California law, the Bank will, therefore, be able, acting alone, to elect the
entire Board of Directors of the Company and to control the vote on matters
submitted to a vote of the Company's stockholders, including extraordinary
corporate transactions. The Bank is wholly-owned by Westcorp and Mr. Rady
controls approximately 65% of Westcorp. The following table reflects the
ownership of Westcorp Common Stock as of December 31, 1998, by the Named
Executive Officers and the Directors and Executive Officers of WFS as a group.
 
<TABLE>
<CAPTION>
                                                                           AMOUNT AND
                                                                           NATURE OF          PERCENT OF
    NAME OF BENEFICIAL OWNER               POSITION WITH WFS          BENEFICIAL OWNERSHIP     CLASS(1)
    ------------------------               -----------------          --------------------    ----------
<S>                                <C>                                <C>                     <C>
Ernest S. Rady...................  Chairman of the Board and
                                   Director                                17,053,830(2)        64.42%
Howard C. Reese..................  Vice Chairman of the Board of
                                   Directors                                   53,939(3)         0.20%
Joy Schaefer.....................  Vice Chairman of the Board of
                                   Directors, President, Chief
                                   Executive Officer and Chief
                                   Operating Officer(4)                        22,251(5)         0.08%
James R. Dowlan..................  Vice Chairman of the Board of
                                   Directors                                   31,923(6)         0.12%
Bernard E. Fipp..................  Director                                         0              NA
Duane A. Nelles..................  Director                                     2,205              --(7)
Stanley E. Foster................  Director                                   186,039(8)         0.70%
Lee A. Whatcott..................  Executive Vice President and
                                   Chief Financial Officer                     14,417(9)           --(7)
Richard W. Stephan...............  Executive Vice President                    15,530(10)          --(7)
Directors and Executive Officers
  as a Group (18 persons)........                                          17,390,362           67.64%
</TABLE>
 
- ---------------
 (1) The percentages are calculated on the basis of the number of shares
     outstanding, plus the number of shares which such person or group has a
     present right to acquire pursuant to the exercise of stock options within
     60 days of December 31, 1998. All shares are Common Stock.
 
 (2) Includes beneficial ownership of 9,096 shares which may be acquired within
     60 days of December 31, 1998, pursuant to stock options awarded under stock
     option plans plus vested ESOP/401K shares as of December 31, 1998. Mr. Rady
     disclaims beneficial ownership of 36,015 shares owned by the DHM Trust #2.
 
 (3) Includes beneficial ownership of 8,242 shares which may be acquired within
     60 days of December 31, 1998, pursuant to stock options awarded under stock
     option plans plus vested ESOP/401K shares as of December 31, 1998.
 
 (4) Effective March 23, 1999, Mr. Wolfe became President and Chief Operating
     Officer of WFS. Ms. Schaefer remains Chief Executive Officer and a Vice
     Chairman of the Board of Directors of the Company; President and Chief
     Operating Officer of Westcorp; and Chief Operating Officer and Senior
     Executive Vice President of the Bank.
 
 (5) Includes beneficial ownership of 9,056 shares which may be acquired within
     60 days of December 31, 1998, pursuant to stock options awarded under stock
     option plans plus vested ESOP/401K shares as of December 31, 1998.
 
 (6) Includes beneficial ownership of 9,151 shares which may be acquired within
     60 days of December 31, 1998, pursuant to stock options awarded under stock
     option plans plus vested ESOP/401K shares as of December 31, 1998.
 
 (7) Less than 0.06%
 
                                       19
<PAGE>   23
 
 (8) Includes beneficial ownership of 1,213 shares which may be acquired within
     60 days of December 31, 1998, pursuant to stock options awarded under stock
     option plans plus vested ESOP/401K shares as of December 31, 1998.
 
 (9) Includes beneficial ownership of 6,458 shares which may be acquired within
     60 days of December 31, 1998, pursuant to stock options awarded under stock
     option plans plus vested ESOP/401K shares as of December 31, 1998.
 
(10) Includes beneficial ownership of 14,175 shares which may be acquired within
     60 days of December 31, 1998, pursuant to stock options awarded under stock
     option plans plus vested ESOP/401K shares as of December 31, 1998.
 
            SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and Executive Officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission reports of ownership and changes in ownership of Common
Stock and other equity securities of the Company. Officers, Directors and
greater than 10% shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
 
     Based solely on review of the copies of such reports furnished to the
Company or written representations that no other reports were required, the
Company believes that, during the 1998 fiscal year, all filing requirements
applicable to its Officers, Directors and greater than 10% beneficial owners
were complied with except that Ralph Boulware, Senior Vice President, filed a
late Form 4.
 
                SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                             WHO ARE NOT MANAGEMENT
 
     As of March 29, 1999, no person or group other than the Bank, and,
indirectly, Mr. Rady, was known to the Company to have owned beneficially more
than 5% of the outstanding shares of the Company's Common Stock.
 
         RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
 
     Upon recommendation of the Audit Committee, the international accounting
firm of Ernst & Young LLP, certified public accountants, serves the Company as
its auditors at the direction of the Board of Directors of the Company. One or
more representatives of Ernst & Young LLP are expected to be present at the
Meeting and will have an opportunity to make a statement if they desire to do so
and to be available to respond to appropriate questions.
 
     This matter is not required to be submitted for shareholder approval, and
although shareholder approval is not binding, the Board of Directors has elected
to seek ratification of the appointment of Ernst & Young LLP by the affirmative
vote of a majority of the shares represented and voted at the Meeting.
 
               SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
 
     Shareholders who wish to present proposals for action at the 2000 Annual
Meeting should submit their proposals in writing and in conformance with the
bylaws to the Secretary of the Company at the address of the Company set forth
on the first page of this Proxy Statement. Proposals must be received by the
Secretary no fewer than 30 days, nor more than 60 days, prior to the date of the
scheduled annual meeting for inclusion in next year's Proxy Statement and proxy
card. The scheduled date of the Annual Meeting may be obtained from the
Secretary after January 1, 2000.
 
                                       20
<PAGE>   24
 
                         ANNUAL REPORT TO SHAREHOLDERS
 
     The Annual Report to Shareholders of the Company for the year ended
December 31, 1998, including audited consolidated financial statements, has been
mailed to the shareholders, but such report is not incorporated in this Proxy
Statement and is not deemed to be a part of the proxy solicitation material.
 
                                 OTHER MATTERS
 
     The Management of the Company does not know of any other matters which are
to be presented for action at the Meeting. Should any other matters come before
the Meeting or any adjournment thereof, the persons named in the enclosed proxy
will have the discretionary authority to vote all proxies received with respect
to such matters in accordance with their judgments.
 
                           ANNUAL REPORT ON FORM 10-K
 
     A copy of the Company's Annual Report on Form 10-K, as filed with the
Securities and Exchange Commission (exclusive of Exhibits), is included in the
Annual Report. An additional copy will be furnished without charge to any person
from whom the accompanying proxy is solicited upon written request to Guy Du
Bose, Esq., WFS Financial Inc, 23 Pasteur Road, Irvine, California 92618. If
Exhibit copies are requested, a copying charge of $.20 per page will be made.
 
                                          BY ORDER OF THE BOARD OF DIRECTORS
 
                                          Guy Du Bose
                                          Secretary
 
Irvine, California
March 29, 1999
 
     SHAREHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN, AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL AND YOUR
COOPERATION WILL BE APPRECIATED.
 
                                       21
<PAGE>   25

REVOCABLE PROXY

                                WFS FINANCIAL INC
                                 23 PASTEUR ROAD
                            IRVINE, CALIFORNIA 92618

       THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
    ANNUAL MEETING OF THE SHAREHOLDERS OF WFS FINANCIAL INC ON APRIL 27, 1999

    The undersigned appoints Ernest S. Rady (and in his absence or inability to
serve, Joy Schaefer as alternate proxy) with the power to appoint his
substitute, as proxy and hereby authorizes him and his alternate to represent
and to vote all of the shares of Common Stock held of record by and standing in
the name of the undersigned on March 8, 1999, at the Annual Meeting of
Shareholders of WFS FINANCIAL INC to be held April 27, 1999, or any adjournment
thereof, in accordance with the instructions below and IN FAVOR OF ANY PROPOSAL
AS TO WHICH NO INSTRUCTION IS INDICATED.

    THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE SECRETARY OF THE COMPANY AN
INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR
BY BEING PRESENT AT THE ANNUAL MEETING AND ELECTING TO VOTE IN PERSON.

    THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2.

                          (PROXY CONTINUED ON REVERSE)
- --------------------------------------------------------------------------------
                              FOLD AND DETACH HERE

<PAGE>   26

                                                      Please mark your votes as
                                                      indicated in this example.
                                                      [X]

<TABLE>
<S>                                                         <C>           <C>                <C>            
                                                                            WITHHOLD            WITHHOLD
                                                                            AUTHORITY          AUTHORITY
                                                                          TO VOTE FOR        TO VOTE FOR ANY
                                                                          ALL NOMINEES         INDIVIDUAL
                                                            FOR           LISTED BELOW           NOMINEE
1.   ELECTION OF DIRECTORS

     Nominees:  Ernest S. Rady,                             [ ]               [ ]                  [ ]
                Howard C. Reese,
                James R. Dowlan and
                Joy Schaefer to serve as
                Class I Directors of the Company.

     WITHHOLD AUTHORITY to vote for any INDIVIDUAL 
     nominee. (Write name of such nominee below.)

                                                            FOR             AGAINST              ABSTAIN

2.   RATIFICATION OF THE APPOINTMENT OF ERNST               [ ]               [ ]                  [ ]
     & YOUNG LLP  AS THE INDEPENDENT AUDITORS
     OF THE COMPANY FOR FISCAL YEAR 1999.

3.   OTHER BUSINESS. In accordance with the recommendation of the
     Company's Board of Directors, the Proxy is authorized to vote
     upon such other business as may properly come before the Meeting
     and any adjournments thereof.
</TABLE>

I expect to attend the Meeting. [ ]

Number of Shares Owned:

Signature(s)_____________________________________________  Date_________________

Please date this Proxy and sign your name exactly as it appears on your stock
certificate(s). When shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee, or guardian, please give
the full title as such. If a corporation, please sign in full corporate name by
President or other authorized Officer. If a partnership, please sign in
partnership name by authorized person.

                              FOLD AND DETACH HERE


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission