SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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by Rule 14a-6(e)(2))
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[_] Soliciting Material Pursuant to
SS.240.14a-12
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Wilmington Trust Corporation
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[WILMINGTON TRUST LOGO]
ANNUAL MEETING -- APRIL 15, 2004
March 10, 2004
Dear Shareholders:
You are invited to attend our 2004 Annual Meeting on Thursday, April 15, 2004,
at 10:00 a.m. at the Wilmington Trust Plaza, Mezzanine Level, 301 West Eleventh
Street, Wilmington, Delaware.
The enclosed Notice of Annual Meeting and Proxy Statement provide information
about the governance of our Company and describe the various matters to be acted
upon during the meeting. In addition, there will be a report on the state of our
Company's business and an opportunity for you to express your views on subjects
related to our operations.
The Annual Meeting gives us an opportunity to review the actions our Company is
taking to achieve our mission of maximizing shareholder value. We appreciate
your ownership of Wilmington Trust, and I hope you will be able to join us on
April 15 for our Company's first Annual Meeting of our second century.
Sincerely,
/s/ Ted T. Cecala
Ted T. Cecala,
Chairman of the Board and Chief Executive Officer
[WILMINGTON TRUST LOGO]
March 10, 2004
To the Holders of Common Stock of
Wilmington Trust Corporation
NOTICE OF ANNUAL MEETING
The Annual Meeting of Stockholders of Wilmington Trust Corporation will be held
on Thursday, April 15, 2004 at 10:00 a.m. local time, at the Wilmington Trust
Plaza, Mezzanine Level, 301 West Eleventh Street, Wilmington, Delaware. The
meeting will be held to consider and act upon the election of directors, the
approval of our 2004 Employee Stock Purchase Plan and our 2004 Executive
Incentive Plan and other business that may properly come before the meeting.
Holders of record of our common stock at the close of business on March 8, 2004,
are entitled to vote at the meeting.
This notice and the accompanying proxy materials are sent to you by order of the
Board of Directors.
/s/ Michael A. DeGregorio
Michael A. DiGregorio,
Secretary
2004 ANNUAL SHAREHOLDERS' MEETING
PROXY STATEMENT
General Information......................................... 1
Board of Directors.......................................... 3
Governance of the Company.............................. 3
Summary of Corporate Governance Principles........... 3
Committees of the Board.............................. 6
Committee Membership................................. 7
Audit Matters.......................................... 8
Directors' Compensation................................ 9
Proposals You May Vote On................................... 10
Proposal One -- Election of Directors.................. 10
Nominee Biographies.................................. 10
Executive Officers Who are Not Directors............. 12
Ownership of Wilmington Trust Stock.................. 13
Wilmington Trust Stock Held in a Fiduciary
Capacity............................................ 14
Board Compensation Committee Report on Executive
Compensation........................................ 14
Compensation Committee Interlocks and Insider
Participation....................................... 16
Summary Compensation Table........................... 17
Option Grant Table................................... 18
Option Exercises and Year-End Value Table............ 18
Long-Term Incentive Plans -- Awards in Last Fiscal
Year................................................ 19
Change in Control Agreements......................... 19
Retirement Benefits.................................. 20
Stock Performance Graph.............................. 22
Section 16(a) Beneficial Ownership Reporting
Compliance.......................................... 22
Transactions with Management......................... 22
Availability of Form 10-K............................ 23
Proposal Two -- Approval of the 2004 Employee Stock Purchase
Plan...................................................... 24
Proposal Three -- Approval of the 2004 Executive Incentive
Plan...................................................... 26
Audit Committee Charter and Independent Auditor Services
Policy.................................................... Exhibit A
2004 Employee Stock Purchase Plan........................... Exhibit B
2004 Executive Incentive Plan............................... Exhibit C
GENERAL INFORMATION
The enclosed proxy material is being sent at the request of our Board of
Directors to encourage you to vote your shares at our Annual Shareholders'
Meeting (the "Annual Meeting") to be held on April 15, 2004. This proxy
statement contains information on matters that will be presented at the Annual
Meeting and is provided to assist you in voting your shares.
Our Annual Report to Shareholders for 2003, containing management's discussion
and analysis of financial condition and results of operations of our Company,
its audited financial statements, and this Proxy Statement are distributed
together beginning on or about March 17, 2004.
WHO MAY VOTE
All holders of our common stock as of the close of business on March 8, 2004
(the "Record Date") are entitled to vote at the Annual Meeting. Each share of
stock is entitled to one vote. As of the record date, 66,214,996 shares of our
common stock were outstanding. A plurality of the shares voted in person or by
proxy is required to elect directors. A majority of the shares voted in person
or by proxy is required to approve each of the other proposals described in this
proxy statement. Abstentions and broker non-votes are not counted in the vote.
HOW TO VOTE
Even if you plan to attend the meeting, we encourage you to vote by proxy. You
may vote by proxy by returning the enclosed proxy card (signed and dated) in the
envelope provided.
You also may vote by telephone or by using the Internet. Please refer to the
instructions on your proxy card.
When you vote by proxy, your shares will be voted according to your
instructions. If you sign your proxy card or otherwise give your proxy but do
not specify how you want your shares to be voted, they will be voted as the
Board of Directors recommends. You can change or revoke your proxy at any time
before the polls close at the Annual Meeting by:
-- Notifying the Company's Secretary;
-- Voting in person; or
-- Returning a later-dated proxy card.
You also can change or revoke your proxy at any time before 12:00 p.m., April
14, 2004 by telephone or by using the Internet. Please refer to the instructions
on your proxy card.
If you are a present or former staff member and participate in our Thrift
Savings Plan, you will receive a voting instruction card for shares you hold in
that plan. The plan trustee will vote according to the instructions on your
proxy.
PROXY STATEMENT PROPOSALS
Proposals other than to elect directors may be submitted by the Board of
Directors or shareholders to be included in our proxy statement. To be
considered for inclusion in the proxy statement for our 2005 Annual
Shareholders' Meeting, shareholder proposals must be received in writing by the
Company's Secretary no later than November 10, 2004. Those proposals must
include a brief description of the business to be brought before the meeting,
the shareholder's name and address, the number and class of shares the
shareholder holds, and any material interest the shareholder has in that
business.
SHAREHOLDER NOMINATIONS FOR ELECTION OF DIRECTORS
The Nominating and Corporate Governance Committee recommends nominees to the
Board of Directors for election as directors at the annual meeting. That
committee will consider nominations submitted by shareholders of record for our
2005 Annual Shareholders' Meeting and received by the Company's Secretary by
January 21, 2005. Nominations must include the information required under "Proxy
Statement Proposals" above as well as the nominee's name and address, a
representation that the shareholder is a recordholder of the Company's stock or
holds the Company's stock through a broker and intends to appear in person or by
proxy at the 2005
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Annual Meeting to nominate a person, information regarding the nominee that
would be required to be included in the Company's proxy statement, a description
of any arrangement or understanding between the shareholder and that nominee,
and the written consent of the nominee to serve as a director if elected.
PROXIES
Your completed proxy card instructs David R. Gibson, the Company's Executive
Vice President and Chief Financial Officer, and Michael A. DiGregorio, the
Company's Senior Vice President, Secretary, and General Counsel, to vote as
instructed the shares of our stock for which they receive proxies. In addition,
your signed proxy card gives them direction to vote on any other matter properly
brought before the Annual Meeting.
SOLICITATION OF PROXIES
The Company will pay its costs relating to the solicitation of proxies. We have
retained Morrow and Co., Inc. to assist in soliciting proxies at an estimated
cost of $5,000 plus reasonable expenses. Proxies may be solicited by officers,
directors, and employees of the Company personally, by mail, by telephone, or by
other electronic means. The Company will also reimburse brokers, custodians,
nominees, and fiduciaries for reasonable expenses in forwarding proxy materials
to beneficial owners of our stock.
SECRECY IN VOTING
As a matter of policy, we hold confidential proxies, ballots, and voting
tabulations that identify individual shareholders. These documents are available
for examination only by Wells Fargo Bank, N.A., our tabulation agents. The
identity of the vote of any shareholder is not disclosed except as may be
necessary to meet legal requirements.
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Board of Directors
Governance of the Company
SUMMARY OF CORPORATE GOVERNANCE PRINCIPLES
This summary of the Company's corporate governance principles describes certain
of our Board's corporate governance practices. These practices assist our Board
in carrying out its responsibilities effectively. The Board reviews these
Guidelines periodically and may modify them as appropriate.
The Board
Responsibility
The Board has responsibility for broad corporate policy and overall performance
of the Company through oversight of management to enhance the Company's
long-term value for our shareholders.
Role
In addition to the general oversight of management and the Company's business
performance, the Board provides input and perspective in evaluating alternative
strategic initiatives; reviews and, where appropriate, approves fundamental
financial and business strategies and major corporate actions; ensures processes
are in place to maintain the integrity of the executive management team;
evaluates our executive management team; and assists in succession planning for
key executive positions.
Duties
Our directors are expected to expend sufficient time, energy, and attention to
assure diligent performance of their responsibilities. Directors will attend
meetings of the Board and its committees on which they serve, review materials
distributed in advance of the meetings, and make themselves available for
periodic updates and briefings with management.
Leadership
The positions of Chairman of the Board and Chief Executive Officer are held by
Mr. Cecala.
Independence
The Nominating and Corporate Governance Committee as well as the Board at least
annually review relationships that directors have with the Company to determine
whether there are any material relationships that would preclude a director from
being independent. A candidate is not independent if:
-- The candidate or any member of his or her immediate family is a
current or past executive officer of the Company;
-- The candidate or any member of his or her immediate family has been
employed by the present or former internal or independent auditor of
the Company within the last three years;
-- The candidate has served as a consultant to the Company within the
last three years;
-- Any of the Company's executive officers has served on the
Compensation Committee of the company by which the candidate is
employed within the last three years;
-- Loans to the candidate and his or her affiliates exceed fifty percent
(50%) of the loan-to-one borrower limit of Wilmington Trust Company,
the Company's principal banking subsidiary ("WTC");
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-- The candidate or any member of his or her immediate family received
more than $100,000 in direct compensation from the Company within any
of the last three years;
-- The Company's total payments to or from a firm that employs the
candidate or for which his or her immediate family member is an
executive officer exceeded the greater of $1 million or 2% of the
firm's gross revenues within any of the last three years; or
-- The Company's contributions and sponsorships to a charitable
organization that employs the consulting, advisory and other
candidate exceeded $200,000 within any of the last three years.
Under these standards, Ms. Burger and Messrs. Collins, Crompton, du Pont,
Elliott, Mears, Miller, Mobley, Roselle, Sharp, Sweeney, and Tunnell are
independent.
In addition, no member of the Audit Committee or his or her immediate family may
have received any consulting, advisory, or other compensatory fee, other than
directors' fees, from the Company in its most recent fiscal year.
Qualifications
Directors are selected for their integrity and character, sound, independent
judgment, breadth of experience, insight and knowledge, and business acumen.
Leadership skills, business experience, and diversity are among the relevant
criteria, which may vary over time depending on the Board's needs. The
Nominating and Corporate Governance Committee considers candidates with these
qualifications for recommendation to the full Board for approval.
The Board does not limit the number of other public company boards on which a
director may serve.
In general, no director may stand for reelection to the Board after reaching age
69. The Board may in unusual circumstances ask a director to stand for
reelection after the prescribed retirement date. An employee director who has
served as the Chief Executive Officer retires from the Board when retiring from
employment with the Company.
Orientation and Continuing Education
New directors are provided an orientation process to become familiar with the
Company and its strategic plans and businesses, significant financial matters,
core values and ethics, compliance programs, corporate governance practices, and
other key policies and practices, through a review of background materials and
meetings with senior executives. On a periodic basis, the Board is provided with
continuing education relevant to its duties and responsibilities.
Compensation
The Board believes that compensation for outside directors should be
competitive. Our common stock is a key component, with payment of a portion of
director compensation in the form of our stock and/or phantom stock units.
Directors also receive stock options from the Company from time to time. The
Compensation Committee reviews the level and form of director compensation
periodically and, if appropriate, proposes changes for the Board's
consideration.
Attendance at Annual Shareholders' Meeting
All of our directors attended last year's annual shareholders' meeting.
Annual Self-Evaluation
The Board and each of the Audit, Compensation, and Nominating and Corporate
Governance Committees makes an annual self-evaluation of its performance, with a
particular focus on overall effectiveness.
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Access to Management and Advisors
Directors have access to the Company's management, and are encouraged to visit
the Company's facilities. The Board and its committees may retain outside legal,
financial, or other advisors.
Interaction with the Investment Community, Media, and Others
The Board believes that management generally should speak for the Company and
recommends that directors refer inquiries to the Company.
Board Meetings
Selection of Agenda Items
The Chairman of the Board prepares the initial draft of the agenda for Board
meetings. This is provided to the directors prior to the Board meeting, and they
are encouraged to suggest items for inclusion on the agenda and may raise
subjects not specifically on the agenda.
Attendance of Senior Executives
The Board welcomes regular attendance of the Company's senior executives at
Board meetings to participate in discussions. Presentation of matters to be
considered by the Board are generally made by the responsible executives and
their staff.
Executive Sessions
Board meetings regularly include an executive session of all non-management
directors. The chair of the Nominating and Corporate Governance Committee leads
these executive sessions. Interested parties may communicate directly with the
chair of the Nominating and Corporate Governance Committee as well as the
Company's other independent directors at www.ethicspoint.com. All such
communications are provided to the Company's senior management and Audit
Committee; those addressed to individual directors or the Board generally will
be provided directly to those directors.
Leadership Assessment
Succession Planning
The Board has responsibility for selecting the Chief Executive Officer and
assisting in planning for succession of members of the Company's executive
management team. To assist the Board, the Chief Executive Officer periodically
provides the Board with an assessment of certain of the Company's senior
executives and their potential to succeed to the position of Chief Executive
Officer. The Chief Executive Officer also provides the Board with an assessment
of potential successors to other key positions within the Company.
Evaluation and Compensation of the Chief Executive Officer
Through an annual process, outside directors evaluate the Chief Executive
Officer's performance and the Compensation Committee sets his compensation.
Code of Conduct and Ethics
The Company has adopted a Code of Conduct and Ethics for all of its directors
and staff members, including its executive officers. This Code is posted on our
Website at www.wilmingtontrust.com under "About Us." The Company will post
changes to and waivers of any provisions of the Code of Conduct and Ethics
applicable to these directors and executive officers on its Website promptly.
The full text of our corporate governance principles is posted on our Website at
www.wilmingtontrust.com under "About Us."
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COMMITTEES OF THE BOARD
AUDIT COMMITTEE Responsibilities include:
-- Monitoring the quality and integrity of
the Company's accounting policies,
financial statements, disclosure
practices, and compliance with legal and
regulatory requirements
-- Overseeing the independence and
performance of the Company's internal and
independent auditors
-- Reviewing reports of governmental
agencies
All members of the Audit Committee are
independent directors. See the Audit Committee
Report on page 8.
COMPENSATION COMMITTEE Responsibilities include:
-- Providing counsel and making
recommendations to the Chairman of the
Board and the full Board of Directors
with respect to the performance of the
Chairman of the Board and Chief Executive
Officer
-- Advising on compensation, including
salaries and employee benefits
-- Administering the Company's Executive
Incentive Plan, stock purchase and stock
option plans, and the Directors' Deferred
Fee Plan
All members of the Compensation Committee are
independent directors. See the Board
Compensation Committee Report on Executive
Compensation on pages 14 to 16.
NOMINATING AND CORPORATE Responsibilities include:
GOVERNANCE
COMMITTEE -- Recommending candidates for membership on
the Board of Directors and its committees
-- Overseeing matters of corporate
governance
-- Overseeing succession planning for the
Company's executive management
-- Addressing significant shareholder
relations issues
All members of the Nominating and Corporate
Governance Committee are independent directors.
Each of these committees' charters is posted on
our Website at www.wilmingtontrust.com under
"About Us."
EXECUTIVE COMMITTEE Responsibilities include most of the Board's
other responsibilities between Board meetings.
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COMMITTEE MEMBERSHIP
The following chart provides information about Board committee membership and
the number of meetings that each committee held in 2003.
NOMINATING AND
CORPORATE
NAME EXECUTIVE AUDIT COMPENSATION GOVERNANCE
---- --------- ----- ------------ --------------
Carolyn S. Burger X* X
Ted T. Cecala X*
Richard R. Collins X
Charles S. Crompton Jr. X X
Edward B. du Pont X X
R. Keith Elliott X X X
Robert V. A. Harra Jr. X
Rex L. Mears X X X**
Hugh E. Miller X** X*
Stacey J. Mobley X*
David P. Roselle X** X
H. Rodney Sharp III X X
Thomas P. Sweeney X
Robert W. Tunnell Jr. X X**
Number of meetings in 1 4 1 2
2003
* Chairperson
** Committee member through April 2003, when the Board's committees were
reappointed.
Directors fulfill their responsibilities not only by attending Board and
committee meetings, but also by communicating with the Chairman of the Board and
Chief Executive Officer and other members of management relative to matters of
mutual interest and concern to the Company. In 2003, eight meetings of the Board
of Directors were held. Mr. du Pont attended less than 75% of the meetings of
the Board and the committees on which he served in 2003.
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AUDIT MATTERS
Audit Committee Report
The Audit Committee provides the following report with respect to the Company's
audited financial statements for the fiscal year ended December 31, 2003:
-- The Audit Committee has reviewed and discussed with management the
Company's fiscal 2003 audited financial statements;
-- The Audit Committee has discussed with the Company's independent auditors,
KPMG LLP, the matters required to be discussed by Statement on Auditing
Standards No. 61 and Staff Accounting Bulletin No. 99;
-- The Audit Committee has received the written disclosures and letter from
KPMG required by Independence Standards Board No. 1, relating to the
auditors' independence from the Company and its related entities, and has
discussed with the auditors their independence from the Company; and
-- Based on the review and discussions referred to above, the Audit Committee
has recommended to the Board of Directors that the fiscal 2003 audited
financial statements be included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2003.
Submitted by the Audit Committee of the Company's Board of Directors:
Carolyn S. Burger, Chair
Richard R. Collins
Edward B. du Pont
R. Keith Elliott
Rex L. Mears
All of the Committee's members are independent of the Company and are
financially literate, and at least one member of the Committee has financial
management expertise. In addition, the Company's Board of Directors has
determined that each of Ms. Burger and Mr. Elliott qualify as audit committee
financial experts for purposes of the Securities and Exchange Commission's
rules. However, as those rules provide, neither of those individuals is thereby
deemed to be an "expert" for any purpose under the securities laws or has any
duty, obligation, or liability greater than the duties, obligations, and
liabilities he or she would have as a member of the Audit Committee and the
Board of Directors in the absence of that designation. In addition, the
designation of those individuals as audit committee financial experts does not
affect the duties, obligations or liability of any other member of the Audit
Committee or the Board of Directors.
While the Audit Committee oversees the Company's financial reporting process for
the Board of Directors consistent with that Committee's charter, the Company's
management has primary responsibility for this process and for the preparation
of the Company's consolidated financial statements in accordance with generally
accepted accounting principles. The responsibility for the completeness and
accuracy of the Company's financial statements rests with its management. In
addition, our independent auditors and not the Audit Committee are responsible
for auditing those financial statements. None of the Committee's members is a
certified public accountant, and each member of the Committee is entitled to
rely on the integrity of persons and organizations within and outside the
Company from which he or she receives information and the accuracy of the
financial and other information provided to the Committee.
The Audit Committee or the Chair of the Audit Committee pre-approves audit,
review, and attest engagements and permissible non-audit services the Company's
independent auditor provides, or those services are performed in accordance with
pre-approval policies and procedures the Audit Committee has established. The
Company's policy with respect to the approval and pre-approval of services the
independent auditor provides are reflected in the Independent Auditor Services
Policy the Audit Committee has adopted and which is attached to this proxy
statement as part of Exhibit A.
Audit, Audit-Related, Tax, and All Other Fees
The following table represents fees for professional services rendered by KPMG
for the audit of the Company's annual consolidated financial
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statements for 2003 and fees billed for other services rendered by KPMG for 2003
and 2002:
2003 2002
-------- --------
Audit fees $646,546 $555,343
Audit-related fees(1) $381,962 $394,900
Tax fees(2) $ 46,332 $ 75,353
All other fees $ -- $ --
-------- --------
(1) Audit-related fees for 2003 consisted principally of audits of financial
statements of employee benefit plans, common trust funds, and the Company's
broker-dealer and other subsidiaries, audits of the Company's affiliates,
attestations and agreed-upon procedures, issuances of consents, and due
diligence in connection with the Company's potential acquisitions.
(2) Tax fees for 2003 consisted of tax consulting and advice in connection with
potential acquisitions and advice related to international and state tax
issues.
The Audit Committee has considered whether the provision of the foregoing audit,
audit-related, and tax services is compatible with maintaining KPMG's
independence, and believes that it is.
Independence and Audit Committee Charter
Each member of the Audit Committee is "independent" under the definition of
independence contained in the New York Stock Exchange's current listing
standards. The Board of Directors has adopted a written Audit Committee Charter,
which is attached hereto as Exhibit A.
Representatives of KPMG are expected to be present at our Annual Meeting, will
have an opportunity to make a statement if they desire to do so, and are
expected to be available to respond to appropriate questions.
DIRECTORS' COMPENSATION
The Company pays its outside directors an annual retainer of $15,000 and a
$2,000 fee for each Board meeting they attend. It also pays them a $1,200 fee
for each committee meeting they attend. The Chairpersons of the Compensation
Committee and the Nominating and Corporate Governance Committee receive an
additional $2,500 annually; the Chairperson of the Audit Committee receives an
additional $5,000 annually. A total of eight Board meetings and seven committee
meetings were held in 2003.
Each director may elect to receive the first and/or second half of the annual
retainer in the Company's common stock. Under the Company's Directors' Deferred
Fee Plan, directors can elect each year to defer receipt of the cash portion of
their directors' fees until they are no longer a director.
If a director elects to defer receipt of his or her directors' fees, he or she
may elect to earn a yield on the deferred portion based on (1) yields WTC pays
on certain of its deposit products and/or (2) changes in the price of the
Company's common stock, together with dividends on that stock.
Under the 2002 Long-Term Incentive Plan, which was approved by shareholders,
directors also are entitled to receive stock options. Nineteen thousand five
hundred nonstatutory stock options have been granted to each outside director.
Options in respect of 1,657,650 shares remain available for grant under that
plan.
Directors who are also officers of the Company do not receive any fees or other
compensation for service on any committee.
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PROPOSALS YOU MAY VOTE ON
PROPOSAL ONE -- ELECTION OF DIRECTORS
There are four nominees in the Company's Class of 2007 for election as directors
this year. Detailed information on each is provided below. Each class of
directors is elected for a three-year term. If any director is unable to stand
for re-election, your Board may reduce its size or designate a substitute. If a
substitute is designated, proxies voting on the original director candidate will
be cast for the substituted candidate.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THESE DIRECTORS.
NOMINEE BIOGRAPHIES
CLASS OF 2007
VOTING IS FOR THIS CLASS
Charles S. Crompton Jr., Age 67
Director since 1982
Mr. Crompton is of counsel in the law firm of Potter, Anderson & Corroon since
January 2000. He previously served as a partner in that firm from 1966 to 1999.
R. Keith Elliott, Age 61
Director since 1997
Mr. Elliott is retired Chairman and Chief Executive Officer of Hercules
Incorporated. From 1991 through April 2000, he served the company as Chairman
and Chief Executive Officer, President and Chief Executive Officer, President
and Chief Operating Officer, and Executive Vice President and Chief Financial
Officer. He is a director of Computer Task Group, Checkpoint Systems, Inc.,
Windsor Tech, Inc., and The Institute for Defense Analyses.
Stacey J. Mobley, Age 57
Director since 1991
Mr. Mobley became Senior Vice President, General Counsel, and Chief
Administrative Officer of E.I. du Pont de Nemours and Company in 2000. He
previously served as Senior Vice President, External Affairs, of that company
from 1992 to 1999.
H. Rodney Sharp III, Age 68
Director since 1998
Mr. Sharp served in several management positions at E.I. du Pont de Nemours and
Company from 1961 to 1991, and retired from that company in 1991. He is a
director of that company.
Edward B. du Pont will not stand for re-election in accordance with the
Company's bylaws, which provide in general that no director who has attained the
age of 69 can stand for re-election.
10
The following individuals currently serve as directors in the two other classes.
Their terms will end at the annual shareholders' meeting in 2005 and 2006,
respectively.
CLASS OF 2005 -- ONE YEAR TERM REMAINING
THIS CLASS WAS ELECTED AT THE 2002 ANNUAL SHAREHOLDERS' MEETING
Carolyn S. Burger, Age 63
Director since 1991
Ms. Burger was a principal in CB Associates, Inc., a consulting firm
specializing in legislation, technology deployment for senior executives, and
executive coaching, from 1996 through 2002. She served as President and Chief
Executive Officer of Bell Atlantic -- Delaware, Inc. from 1991 to 1996. Ms.
Burger also is a director of PJM Interconnection, L.L.C.
Robert V. A. Harra Jr., Age 54
Director since 1996
Mr. Harra has served as a director, President, and Chief Operating Officer of
the Company since 1996.
Rex L. Mears, Age 62
Director since 1992
Mr. Mears has served as President of Ray S. Mears and Sons, Inc., a farming
corporation, since 1967.
Robert W. Tunnell Jr., Age 49
Director since 1992
Mr. Tunnell became managing partner of Tunnell Companies, an owner and developer
of real estate, in 1981.
CLASS OF 2006 -- TWO YEAR TERM REMAINING
THIS CLASS WAS ELECTED AT THE 2003 ANNUAL SHAREHOLDERS' MEETING
Ted T. Cecala, Age 54
Director since 1996
Mr. Cecala became a director, Chairman of the Board, and Chief Executive Officer
of the Company and WTC in 1996. Mr. Cecala also serves as a member of the Board
of Managers of each of Cramer Rosenthal McGlynn, LLC, Roxbury Capital
Management, LLC, and Balentine Delaware Holding Company, LLC.
Richard R. Collins, Age 67
Director since 1989
Mr. Collins became Chairman of Collins, Inc., a consulting firm for various
insurance industry associations and financial and non-financial companies
focusing on international expansion, in 1993. He previously served as Chief
Executive Officer and Chief Operating Officer of American Life Insurance Company
from 1981 to 1992.
Hugh E. Miller, Age 68
Director since 1982
Mr. Miller retired as Vice Chairman of ICI Americas in 1990. He served with its
parent, Imperial Chemical Industries PLC, for 20 years until 1990, including in
management positions in Europe and the United States. Mr. Miller also serves as
a director of MGI Pharma, Inc.
David P. Roselle, Age 64
Director since 1991
Mr. Roselle has served as President of the University of Delaware since 1990.
Thomas P. Sweeney, Age 67
Director since 1983
Mr. Sweeney has served as a member of the law firm of Richards, Layton & Finger,
P.A. since 1967.
11
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following contains information about the Company's executive officers who
are not directors.
Howard K. Cohen, Age 55
Executive officer since 1992
Mr. Cohen became an Executive Vice President of the Company and of WTC in 2002.
He previously served as a Senior Vice President of the Company since 2001 and as
a Senior Vice President of WTC in its Corporate Client Services Department since
1992.
Michael A. DiGregorio, Age 57
Executive officer since 2003
Mr. DiGregorio became a Senior Vice President, Secretary, and General Counsel of
the Company and of WTC in 2003. He previously served as Vice President and
Secretary of the Company from 2001 to 2003 and as Vice President of WTC from
1991 to 2003.
David R. Gibson, Age 46
Executive officer since 1992
Mr. Gibson became an Executive Vice President and Chief Financial Officer of the
Company and of WTC in 2002. He previously served as Senior Vice President and
Chief Financial Officer of the Company since 1997 and of WTC since 1996.
Gerald F. Sopp, Age 47
Executive officer since 2003
Mr. Sopp became Vice President and Controller of the Company in 2000.
Previously, he served as Vice President and Controller of the Clarks Companies,
NA from 1993 to 2000.
Rodney P. Wood, Age 43
Executive officer since 1999
Mr. Wood became an Executive Vice President of the Company and WTC in 2002. He
previously served as a Senior Vice President of the Company since 2001 and as a
Senior Vice President of WTC in its Wealth Advisory Services Department since
1999. Prior to joining the Company, he served as First Vice President of
Comerica Incorporated in its private banking department from 1992 to 1999.
12
OWNERSHIP OF WILMINGTON TRUST STOCK
The following table includes shares in the Company beneficially owned by each
director and nominee, each executive officer named in the Summary Compensation
Table on page 17, and by all directors and executive officers as a group as of
December 31, 2003.
Under rules of the Securities and Exchange Commission, "beneficial ownership"
includes shares for which an individual, directly or indirectly, has or shares
voting or investment power, whether or not the shares are held for the
individual's benefit.
Phantom
Name of Percent of Stock
Beneficial Owner Amount and Nature of Beneficial Ownership Total Class Units(5)
---------------- ------------------------------------------ --------- ---------- --------
(Number Voting and/or
of Shares) Investment Right to
Direct(1) Power(2) Acquire(4)
----------- -------------- -----------
C. S. Burger 5,045 0 8,000 13,045 0
T. T. Cecala 294,114 0 467,380 761,494 1.15% 0
H. K. Cohen 20,646 325 99,090 120,061 0
R. R. Collins 6,965 5,286 8,000 20,251 0
C. S. Crompton Jr. 7,029 9,000 8,000 24,029 5,348
E. B. du Pont 19,864 2,181,680(3) 8,000 2,209,544 3.34% 0
R. K. Elliott 4,984 0 8,000 12,984 1,992
D. R. Gibson 46,041 88 113,070 159,199 0
R.V.A. Harra Jr. 289,465 1,392 281,648 572,505 0
R. L. Mears 0 10,345 8,000 18,345 0
H. E. Miller 3,289 11,600 8,000 22,889 8,190
S. J. Mobley 4,486 0 8,000 12,486 4,378
D. P. Roselle 7,885 0 8,000 15,885 0
H. R. Sharp III 5,605 2,111,680(3) 8,000 2,125,285 3.21% 0
T. P. Sweeney 5,801 13,668 8,000 27,469 7,089
R. W. Tunnell Jr. 72,416 302,285 8,000 382,701 0
R. P. Wood 3,598 2,343 110,934 116,875 0
Directors, Nominees,
and Executive
Officers as a Group
(19 persons) 802,733 2,538,012 1,199,582 4,540,327 6.88% 26,997
======= ========= ========= ========= ==== ======
(1) This column includes stock held by directors and executive officers or
certain members of their immediate families.
(2) This column includes stock for which directors or executive officers are
deemed to have sole or shared voting power.
(3) Since they may be deemed in their capacity as trustees of a non-profit
entity to share voting and/or investment power directly or indirectly, Messrs.
duPont and Sharp are listed as beneficial owners of the same 2,111,680 shares.
However, these shares are reported only once in the total for directors and
executive officers as a group. Mr. duPont is also deemed to own an additional
70,000 shares indirectly.
(4) This column includes shares which directors or executive officers have the
right to acquire within 60 days after December 31, 2003.
13
(5) These phantom stock units were acquired in lieu of directors' fees. Their
value is based on the market price of our common stock, together with dividends
on that stock. The units can be redeemed only for cash following termination of
the individual's service as a director, and do not have voting rights.
WILMINGTON TRUST STOCK HELD IN A FIDUCIARY CAPACITY
On December 31, 2003, certain of the Company's banking subsidiaries held shares
of its common stock in a fiduciary capacity as follows:
Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner Beneficial Ownership Class
-------------- ---------------- -------------------- ----------
Common Wilmington Trust Company 2,459,618 sole voting power 5.9%
Rodney Square North 1,377,010 shared voting power
1100 North Market Street 1,308,340 sole voting power
Wilmington, DE 19890 1,429,776 shared dispositive
power
Common Wilmington Trust of 19,964 sole voting power 0.0%
Pennsylvania 4,468 shared voting power
795 East Lancaster Avenue 19,964 sole dispositive power
Suite 6 4,468 shared dispositive power
Villanova, PA 19085
Common Wilmington Trust FSB 35,716 sole voting power 0.1%
One South Street 46,442 shared voting power
Suite 2160 15,570 sole dispositive power
Baltimore, MD 21201 41,574 shared dispositive
power
Although none of the fiduciary areas has yet considered the proposals in this
proxy statement, as a matter of policy the fiduciary areas tend to support
management of the companies in which they have invested.
BOARD COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
General
We award compensation to executive officers to assure that we can continue to be
able to attract, motivate, and retain executives of outstanding abilities. To
achieve this, we provide compensation for executive officers at levels broadly
comparable to those earned by executive officers at institutions with comparable
characteristics and financial performance. In compensating our executive
officers, we take into account the performance of those institutions compared to
ours. We compare the Company's growth in net income to the corresponding
performance of those institutions and the performance of the executive's area of
responsibility against business plan objectives we have established for that
area.
Our executive compensation program also rewards our executive officers for their
long-term strategic management to enhance shareholder value. We do this by
providing executive officers with ownership interests in the Company through
stock options. Since the ultimate value of the stock made available through
options depends on the Company's success, stock options provide executive
officers with continuing incentives long after the award is granted.
The key elements of our compensation program for executive officers are base
salary, the Executive Incentive Plan (including restricted stock that may be
awarded under that plan), and stock options. The Compensation Committee's
policies with respect to each of these elements, including the basis for the
compensation awarded to Mr. Cecala, are discussed below. The Compensation
Committee takes into account the full compensation package the Company provides
each individual, including pension, insurance, and other benefits, in addition
to the programs described below. In reviewing the performance of the Company's
executive officers other than Mr. Cecala, the Compensation Committee takes his
views into account.
14
Base Salaries
We determine base salaries for each executive officer by evaluating his or her
responsibilities and performance and experience in rendering that performance.
We also consider the competitive market for executive talent, and compare
salaries we pay our executive officers to those paid to executive officers at
comparable institutions.
The Company typically adjusts executive officers' salaries annually to take into
account its and the individual's performance, as well as any changes in the
executive officer's responsibilities during the year. We also consider the
financial results of the business department over which the executive officer
has responsibility and his or her leadership and contribution to the Company's
financial goals.
Executive Incentive Plan
We adopted and the Company's shareholders approved our Executive Incentive Plan
(the "Incentive Plan") in 1999 to provide the opportunity for key executives to
earn cash and stock awards that recognize and reward the achievement of
corporate performance goals. The Chief Executive Officer, the President, and
other executives the Compensation Committee designates from time to time
participate in the Incentive Plan. For 2003, ten executives participated in the
Plan. That plan is being submitted to our shareholders again for approval as
described at pages 26 and 27 of this proxy statement.
The Compensation Committee can establish one or more quantitative or qualitative
performance goals or other criteria as the basis for awarding executives bonuses
under that plan. Under the Incentive Plan, the Company is able to deduct
compensation paid to executive officers a portion of whose compensation would be
subject to Section 162(m) of the Internal Revenue Code ("Section 162(m)
Participants"). For Section 162(m) Participants whose bonuses we want to be able
to deduct, the performance goals are based on any combination the Compensation
Committee selects of earnings per share, revenue, return on equity, return on
assets, income, fees, assets, stockholder return, expenses, chargeoffs,
nonperforming assets, and overhead ratio. Those goals may be company-wide or on
a departmental, divisional, regional, or individual basis. Any goal may be
measured in absolute terms, by reference to internal performance targets, or as
compared to another company or companies.
In evaluating business line performance for purposes of making awards under the
Incentive Plan, the Compensation Committee considers, among other factors, the
percentage growth in net income for the Company's banking and fee-based
businesses compared to peer institutions of the Company and the Company's
performance against various components of the Company's business plan. The
percentage growth in net income of the Company's banking business ranked fifth
among the performance of a company-constructed 14 member banking-oriented peer
group that includes Associated Bank-Corp, BOK Financial Corporation, City
National Corporation, Commerce Bancorp, Inc., Commerce Bancshares, Inc., Compass
Bancshares, Inc., FirstMerit Corporation, Fulton Financial Corporation, Hibernia
Corporation, Mercantile Bankshares Corporation, Provident Financial Group, Inc.,
Valley National Bancorp, and Zions Bancorporation. The percentage growth in net
income of the Company's fee-based businesses ranked seventh among the
performance of a company-constructed eight member peer group of fee-oriented
banks that includes The Bank of New York Company, Inc., Boston Private Financial
Holdings, Inc., Bryn Mawr Bank Corporation, Investors Financial Services Corp.,
Mellon Financial Corporation, Northern Trust Corporation, and the PNC Financial
Services Group, Inc. (all institutions in the banking-oriented peer group and
the fee-oriented peer group are hereinafter collectively referred to as the
"Peer Group"). For 2003, payments under this plan to the ten officers who
participated in the plan aggregated $2,215,103, compared to $2,089,870 for the
ten executives who participated in the plan in 2002.
Under the Company's 2002 Long-Term Incentive Plan, which shareholders have
approved, cash-based and stock-based awards may be made. Those stock options
have an exercise price equal to the last sale price of our stock on the date of
grant, typically vest in between one to three years and have terms of up to ten
years. In granting stock options, we do not consider the number of options an
executive officer received previously, but we do consider changes in the
executive officer's duties and responsibilities during the year.
15
We do not employ any formula in awarding options.
All stock options are granted with exercise prices equal to the fair market
value of the Company's stock on the date they are granted. Accordingly, any
value that accrues to our executive officers from these options is based
entirely on our stock performance, and bears a direct relationship to value our
shareholders realize.
Compensation of the Chief Executive Officer
In establishing Mr. Cecala's compensation, the Compensation Committee considered
the same basic factors as those described above for all members of the Company's
executive management, including especially:
-- The Company's performance against its business plan and the Peer Group in
the percentage growth in net income;
-- The base salaries, annual bonuses, and stock option awards paid to top
executives at banks of comparable size; and
-- The development under the Company's strategic planning process to expand
significantly and profitably the geographic outreach of its fee-based
businesses.
Submitted by the Compensation Committee of the Company's Board of
Directors:
Stacey J. Mobley, Chair
Carolyn S. Burger
Charles S. Crompton Jr.
R. Keith Elliott
H. Rodney Sharp III
Tax Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code (the "Code") and the regulations
thereunder (collectively, "Section 162(m)") prohibits companies from deducting
compensation paid to certain executive officers in excess of $1 million unless
that compensation is "performance-based." Compensation attributable to the
Company's stock options is performance-based, and the Executive Incentive Plan
is designed so that compensation attributable to awards under those plans can
qualify as "performance-based."
The Compensation Committee believes it is unlikely that the Company paid any
amounts in respect of 2003 that will result in our loss of a federal income tax
deduction under Section 162(m).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee's members are Stacey J. Mobley (Chair), Carolyn S.
Burger, Charles S. Crompton Jr., R. Keith Elliott, and H. Rodney Sharp III. No
member of the Compensation Committee is a current or past officer or employee of
the Company. No executive officer of the Company serves as a member of the
compensation committee or Board of Directors of any other company whose members
include an individual who also serves on our Board of Directors or the
Compensation Committee.
Ms. Burger and Messrs. Crompton, Elliott, and Sharp are indebted to WTC on the
same terms and conditions as those for comparable transactions with others.
16
SUMMARY COMPENSATION TABLE
The following table shows information about compensation the Company awarded
over the last three years to its chief executive officer and its four other most
highly compensated executive officers (the "Named Executive Officers").
Long-Term
Annual Compensation Compensation Awards
----------------------------------------------------------------------------------------------------
(b) (c) (d) (e) (f) (g)
(a) Other Annual Restricted Securities
Name and Salary Bonus(1) Compensation Stock Underlying
Principal Position Year ($) ($) ($)(2) Awards(3) Options(4)
------------------ ---- ------ -------- ------------ ---------- ----------
Ted T. Cecala 2003 $ 567,769 $ 480,036 $ 8,280 3,727 90,000
Chairman of the Board 2002 $ 550,000 $ 625,240 $ 7,780 0 90,000
and Chief Executive Officer 2001 $ 546,308 $ 692,229 $ 7,380 0 80,000
Robert V.A. Harra Jr. 2003 $ 410,000 $ 314,162 $ 6,307 2,439 40,000
President and Chief 2002 $ 410,000 $ 396,388 $ 5,985 0 40,000
Operating Officer 2001 $ 408,154 $ 440,793 $ 5,486 0 40,000
Rodney P. Wood 2003 $ 317,308 $ 320,182 $ 7,410 2,486 30,000
Executive Vice President 2002 $ 283,115 $ 252,574 $ 7,456 0 26,000
2001 $ 270,385 $ 245,246 $ 6,952 0 25,000
Howard K. Cohen 2003 $ 228,077 $ 134,276 $ 7,140 1,042 20,000
Executive Vice President 2002 $ 214,231 $ 168,009 $ 6,971 0 10,000
2001 $ 186,538 $ 148,168 $ 6,379 0 10,000
David R. Gibson 2003 $ 214,365 $ 118,221 $ 7,303 918 20,000
Executive Vice and 2002 $ 206,058 $ 177,011 $ 6,911 0 15,000
Chief Financial Officer 2001 $ 198,704 $ 157,111 $ 6,462 0 7,500
Total Salary, Bonus, and 2003 $1,737,519 $1,366,877 $36,440
Other Compensation For 2002 $1,663,404 $1,694,491 $35,103
Named Executive Officers(5) 2001 $1,610,089 $1,683,547 $32,659
(1) Includes awards made under the Company's Executive Incentive Plan (described
on page 15 above) and, for 2002 and 2001, its Profit-Sharing Bonus Plan (the
"Profit-Sharing Bonus Plan") in respect of services performed during the year.
The Profit-Sharing Bonus Plan was terminated in 2003.
(2) Represents: (a) the Company's contributions to its 401K Thrift Savings Plan
for Mr. Cecala of $6,000 in 2003, $5,500 in 2002, and $5,100 in 2001; Mr. Harra
of $4,027 in 2003, $3,705 in 2002, and $3,206 in 2001; Mr. Wood of $6,000 in
2003, $5,500 in 2002, and $5,100 in 2001; Mr. Cohen of $6,000 in 2003, $5,500 in
2002, and $5,100 in 2001; and Mr. Gibson of $6,000 in 2003, $5,500 in 2002, and
$5,100 in 2001; and (b) premiums the Company paid for term life insurance for
Mr. Cecala of $2,280 in each of 2003, 2002, and 2001; Mr. Harra of $2,280 in
each of 2003, 2002, and 2001; Mr. Wood of $1,410 in 2003, $1,956 in 2002, and
$1,853 in 2001; Mr. Cohen of $1,140 in 2003, $1,471 in 2002, and $1,279 in 2001;
and Mr. Gibson of $1,303 in 2003, $1,411 in 2002, and $1,362 in 2001.
(3) These restricted shares were issued in lieu of 20% of the cash bonus
otherwise payable to the Named Executive Officers for 2003. Since it is in the
form of restricted shares, this portion of each executive's bonus is subject to
forfeiture prior to vesting.
(4) The number of options granted reflects the 100% stock dividend the Company
paid on June 17, 2002.
(5) The numbers in this line for 2002 and 2001 include salary, bonus, and other
compensation paid to Robert A. Matarese and Robert J. Christian, who were
executive officers in those years, but do not include those for Mr. Cohen or Mr.
Gibson.
17
OPTION GRANT TABLE
The following table presents additional information about the option awards in
the Summary Compensation Table for 2003.(1)
Option Grants in Last Fiscal Year
Potential Realizable Value at Assumed
Annual Rates of Stock Price
Appreciation
Individual Grants for Option Term(2)
---------------------------- ---------------------------------------
(a) (b) (c) (d) (e) (f) (g)
Number of Percent of
Securities Total Options
Underlying Granted To All Exercise or
Options Employees in Base Price Expiration
Name Granted Fiscal Year ($/Share) Date 5%($) 10%($)
---- ---------- -------------- ----------- ---------- ----- ------
Ted T. Cecala 90,000 6.0% $27.91 2/19/2013 $1,579,720 $4,003,323
Robert V.A. Harra Jr. 40,000 2.7% $27.91 2/19/2013 702,098 1,779,255
Rodney P. Wood 30,000 2.0% $27.91 2/19/2013 526,573 1,334,441
Howard K. Cohen 20,000 1.3% $27.91 2/19/2013 351,049 889,627
David R. Gibson 20,000 1.3% $27.91 2/19/2013 351,049 889,627
(1) These options vest three years after grant, expire ten years after
grant, and may be terminated earlier (a) at the termination of the officer's
employment if his or her employment ceases for any reason other than retirement,
death, or disability or (b) upon the earlier of (1) the end of the option's term
or (2) three years after the officer's death, retirement, or disability.
(2) These values are computed on a pre-tax basis.
OPTION EXERCISES AND YEAR-END VALUE TABLE
The table below presents information about (1) options exercised during 2003 by
the Named Executive Officers and (2) the amount and value of unexercised options
as of December 31, 2003.
Aggregated Option Exercises in Last
Fiscal Year and Fiscal Year-End Option Value
(a) (b) (c) (d) (e)
Shares Shares Underlying Value of Unexercised
Acquired Unexercised Options at In-the-Money Options at
on Exercise Value Fiscal Year-End(#) Fiscal Year-End($)(2)
Name (Number) Realized($)(1) Exercisable/Unexercisable Exercisable/Unexercisable
---- ----------- -------------- ------------------------- -------------------------
Ted T. Cecala 4,000 $ 83,500 473,380/90,000 $4,723,707/$728,100
Robert V. A. Harra
Jr. 10,400 $217,100 255,248/40,000 $3,644,022/$323,600
Rodney P. Wood 0 0 110,934/30,000 $ 764,153/$242,700
Howard K. Cohen 0 0 99,090/20,000 $ 801,832/$161,800
David R. Gibson 16,748 $102,703 113,070/20,000 $ 903,077/$161,800
(1) Value realized reflects the difference between the market value of the
Company's stock on the date the option was exercised and the exercise price,
multiplied by the number of shares acquired upon exercise.
18
(2) These values are computed on a pre-tax basis, and reflect the
difference between the last sale price of the Company's stock on December 31,
2003 and the exercise price of each option the Named Executive Officer holds, or
the total amount by which the officer's options were "in the money" at that
date.
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
The following table presents additional information about the restricted stock
granted to the Named Executive Officers for 2003 reflected in the Summary
Compensation Table. This restricted stock was received in lieu of 20% of the
cash bonus otherwise payable to the Named Executive Officers for 2003. Since it
is in the form of restricted stock, this portion of each executive's bonus is
subject to forfeiture prior to vesting.
Estimated Future Payouts under
Non-Stock Price-Based Plans
(a) (b) (c) -------------------------------
Number of Performance or Other (d) (e) (f)
Shares, Units or Period Until Maturation Threshold Target Maximum
Name Other Rights(#) or Payout(1) ($ or #) ($ or #) ($ or #)
----------------------------------------------------------------------------------------------------------
Ted T. Cecala 3,727 2/25/2005 N/A N/A N/A
2/25/2006
2/25/2007
Robert V.A. Harra Jr. 2,439 2/25/2005 N/A N/A N/A
2/25/2006
2/25/2007
Rodney P. Wood 2,486 2/25/2005 N/A N/A N/A
2/25/2006
2/25/2007
Howard K. Cohen 1,042 2/25/2005 N/A N/A N/A
2/25/2006
2/25/2007
David R. Gibson 918 2/25/2005 N/A N/A N/A
2/25/2006
2/25/2007
(1) One-third of these restricted shares vests on each of the first three
anniversaries of the grant date, but the right to these shares may be terminated
earlier at the termination of the officer's employment if his or her employment
ceases for any reason other than death, retirement, or disability.
CHANGE IN CONTROL AGREEMENTS
The Company has entered into change in control agreements with 10 of its
officers. These provide severance pay and continuation of certain benefits if a
"Change in Control" occurs. To receive benefits under the agreements, an
officer's employment must be terminated involuntarily, either actually or
constructively, without cause within two years after a Change in Control.
In general, the agreements deem a "Change in Control" to have occurred if any of
the following happens:
-- The Company or WTC consolidates or merges with a third party;
-- The Company or WTC transfers substantially all assets to a third party
or completely liquidates or dissolves;
-- A third party acquires any combination of beneficial ownership of and
voting proxies
19
for more that 15% of the Company's or WTC's voting stock or the
ability to control the election of the Company's directors or its
management or policies;
-- The persons serving as the Company's directors on February 29, 1996,
and those replacements or additions subsequently nominated by that
Board or by persons nominated by them, are no longer at least a
majority of the Company's Board; or
-- A regulatory agency determines that a change in control of the Company
has occurred.
Under these agreements, the officer is entitled to severance pay in a lump
sum of 115% times three years' of the officer's (1) highest base salary in the
12 months preceding the termination of his or her employment and (2) bonus and
incentive payments for the preceding calendar year, all discounted to present
value. In addition, the officer generally would receive medical, life,
disability, and health-and-accident benefits at the Company's expense for three
years.
RETIREMENT BENEFITS
The table below shows the estimated annual retirement benefits payable to a
covered participant based on the final average pay formulas of the Company's
Pension Plan and Supplemental Executive Retirement Plan (the "SERP").
PENSION TABLE(1)
Average Annual Retirement Benefits with Years of Service Indicated on December 31, 2003
Annual ---------------------------------------------------------------------------------
Earnings 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
-------- -------- -------- -------- -------- -------- --------
$ 200,000 $ 33,775 $ 42,637 $ 51,500 $ 60,362 $ 69,224 $ 78,086
400,000 120,000 160,000 200,000 240,000 240,000 240,000
600,000 180,000 240,000 300,000 360,000 360,000 360,000
800,000 240,000 320,000 400,000 480,000 480,000 480,000
1,000,000 300,000 400,000 500,000 600,000 600,000 600,000
1,200,000 360,000 480,000 600,000 720,000 720,000 720,000
1,400,000 420,000 560,000 700,000 840,000 840,000 840,000
1,600,000 480,000 640,000 800,000 960,000 960,000 960,000
----------------------------------
(1) The table above reflects annual retirement benefits with years of
service indicated on December 31, 2003. The benefits listed in the table are not
subject to deduction of Social Security or other offset amounts. The Social
Security-covered compensation level and the primary insurance amount are based
on reaching age 65 on December 31, 2003.
The Company provides retirement benefits for employees, including executive
officers. The normal retirement benefit for executive officers is the sum of
benefits provided by the Pension Plan and the SERP. The normal annual retirement
benefit from the Pension Plan is the greater of:
(a) 1.5% of the officer's average annual earnings for the five-year period
ending December 31, 1993, multiplied by years of service as of December 31,
1993; or
(b) (1) 1.5% of the officer's average annual earnings for the five-year period
ending December 31, 1987, less 1.25% of the Social Security Primary
Insurance Amount (the "PIA") as of December 31, 1987, all multiplied by
years of service as of December 31, 1987; plus (2) 1.0% of the
20
officer's earnings during 1988 up to one-half of the 1988 Social Security
taxable wage base, plus 1.8% of earnings during 1988 in excess of one-half
of the Social Security taxable wage base; plus (3) for each year after 1988,
1.25% of the officer's earnings in that year up to one-half of the Social
Security taxable wage base for that year (the "SSTWB"), plus 1.6% of
earnings during that year in excess of one-half of the SSTWB.
The estimated years of credited service under the Pension Plan and SERP through
December 31, 2003 for each of the Named Executive Officers are: Mr.
Cecala - 24.2 years; Mr. Harra - 30.6 years; Mr. Wood - 4.5 years; Mr. Cohen -
20.6 years; and Mr. Gibson - 20.7 years.
For purposes of determining amounts to which participants are entitled under the
Pension Plan, for years before 1994, earnings include base salary and amounts
paid under the Profit-Sharing Bonus Plan, but do not include incentive payments.
For years after 1993, earnings also include incentive payments other than
amounts paid under executive incentive plans. The normal form of pension
provided under the Pension Plan is a 50% joint and survivor benefit. For
purposes of determining benefit accruals under the Pension Plan, annual earnings
were limited to $200,000 through December 31, 2003.
The normal monthly retirement benefit from the SERP is 60% of the officer's
average monthly earnings for the 60-month period ending with his or her
retirement date, multiplied by a fraction the numerator of which is the
officer's years of credited service at retirement and the denominator of which
is 30. All such amounts are reduced by benefits payable from the Pension Plan.
For purposes of determining amounts to which participants are entitled under the
SERP, average monthly earnings include base salary and amounts paid under the
profit-sharing bonus plan and executive incentive plans. The SERP pays a monthly
pension, beginning at the same time the officer begins to receive his or her
Pension Plan benefit, in the form of a single life annuity or a 50% joint and
survivor annuity. Benefits under the SERP begin to vest after five years'
participation in the plan at the rate of one-fifteenth per year, but accelerate
and vest in full (a) upon reaching 55 with ten years participation or (b) in the
event of a "Change in Control" as that term is defined in the change in control
agreements discussed on pages 19 and 20.
21
STOCK PERFORMANCE GRAPH
The line graph below compares cumulative total stockholder return (1) over the
past five years for the Company's common stock with (a) all companies in the
Standard and Poor's 500 Index and (b) institutions in the Keefe, Bruyette &
Woods 500 Bank Index.(2)
TOTAL RETURN
[STOCK PERFORMANCE GRAPH]
12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03
Wilmington Trust Corporation $100 $ 80.79 $107.58 $113.25 $117.05 $137.68
Keefe, Bruyette & Woods, 50 Bank Index $100 $ 96.23 $115.51 $110.74 $102.95 $138.01
S&P 500 Index $100 $121.02 $109.99 $ 96.98 $ 75.60 $ 97.24
NOTES TO STOCK PERFORMANCE GRAPH
(1) Cumulative total stockholder return includes appreciation in stock price
and assumes the reinvestment of dividends.
The graph reflects appreciation in stock price assuming an initial
investment of $100 at the close of business on December 31, 1998. The table
below the graph reflects the graph's data points.
(2) The Keefe, Bruyette & Woods 50 Bank Index is a
market-capitalization-weighted bank stock index that includes all money
center banks and most major regional banks, and is meant to be
representative of the stock price performance of large banks throughout the
United States.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires the Company's directors
and executive officers and certain others to file reports of their ownership of
our stock with the SEC and the New York Stock Exchange.
After reviewing copies of those forms it has received and written
representations, the Company believes that all of those filing requirements were
complied with, except that a sale effected on Mr. Tunnell's behalf by his
investment agent inadvertently against Mr. Tunnell's instructions and without
his knowledge was reported late in 2004 and 466 shares that became reportable on
the death of Mr. Harra's mother were reported late in 2003.
TRANSACTIONS WITH MANAGEMENT
Certain of the Company's subsidiaries have banking transactions in the ordinary
course of business with directors, officers, and their
22
associates on the same terms, including interest rates and collateral on loans,
as those prevailing at the time for comparable transactions with others and that
do not involve more than the normal risk or collectibility or present other
unfavorable features.
AVAILABILITY OF FORM 10-K
THE COMPANY WILL FILE WITH THE SEC AN ANNUAL REPORT ON FORM 10-K FOR 2003. THE
COMPANY WILL PROVIDE A COPY OF THAT REPORT ON WRITTEN REQUEST WITHOUT CHARGE TO
ANY PERSON WHOSE PROXY IT IS SOLICITING. PLEASE ADDRESS YOUR REQUEST TO ELLEN J.
ROBERTS, VICE PRESIDENT, INVESTOR RELATIONS, WILMINGTON TRUST CORPORATION,
RODNEY SQUARE NORTH, 1100 NORTH MARKET STREET, WILMINGTON, DELAWARE 19890.
23
PROPOSAL TWO - APPROVAL OF THE
2004 EMPLOYEE STOCK PURCHASE PLAN
General Provisions
On February 26, 2004, your Board of Directors adopted the 2004 Employee Stock
Purchase Plan (the "Stock Purchase Plan") to encourage wider ownership of our
stock by our employees. The Stock Purchase Plan is designed to replace our 2000
Employee Stock Purchase Plan, which expires in 2004. The plan's provisions are
similar to those of the 2000 Employee Stock Purchase Plan. The following summary
is qualified in its entirety by reference to the Stock Purchase Plan, which is
attached as Exhibit B to this proxy statement. The Stock Purchase Plan will be
adopted and become effective only when and if approved by our shareholders at
the Annual Shareholders' Meeting. Accordingly, no options or other awards have
been granted under the plan.
A maximum of 800,000 shares of our common stock may be issued under the Stock
Purchase Plan. The number of shares to be issued to a participant cannot be
predicted with accuracy because that number is contingent on the participant's
election to acquire shares under the plan from time to time. The shares to be
issued under the Stock Purchase Plan may be authorized but unissued shares, or
issued shares that we have reacquired and hold in treasury. We anticipate that
this number of shares will be adequate for the plan for the next four years. On
the first day of each plan year, each participating employee will be offered
options to purchase a number of shares (to be chosen by the employee, but with a
minimum of five shares) of our common stock at a price per share equal to 85% of
the last sale price of our common stock that day. That initial option price will
be funded by payroll deductions, which will be credited to an interest-bearing
account. On the last day of the plan year, shares of our common stock will be
purchased at the lower of the initial option price or 85% of the last sale price
of our common stock on the last day of the plan year, if that price is lower.
The shares of common stock will be issued to participating employees promptly
after the end of the plan year.
Eligibility
All regular employees of the Company and its designated subsidiaries on the
payroll and with one month of continuous service on the first day of the plan
year will be eligible to participate in the offering under the Stock Purchase
Plan for that plan year. An employee may terminate participation in the Stock
Purchase Plan at any time.
Limitations
The maximum permissible payroll deduction for any employee under the Stock
Purchase Plan may not exceed the lesser of 10% of the employee's base salary or
$21,250. In addition, no employee may be granted an option under the plan if he
or she would own and/or hold outstanding options to purchase five percent or
more of the total number of shares of our common stock which are outstanding.
Administration of Plan
The Stock Purchase Plan will be administered by a committee the Board of
Directors appoints. Members of the committee must either be directors, officers,
or employees of the Company or one of our subsidiaries, and that committee will
have authority to make, administer, and interpret rules it deems necessary to
administer the plan.
Amendment or Termination
The Board of Directors may amend or terminate the Stock Purchase Plan at any
time. Any options previously granted will not be affected by a termination or
amendment. No amendment may be made without prior approval of our shareholders
if it would permit the issuance of more than 800,000 shares of our common stock,
permit payroll deductions at a rate in excess of 10% of an employee's base
salary, or otherwise be required by law.
Tax Implications
The following is a brief summary of the principal federal income tax
consequences of transactions under the Stock Purchase Plan based on current
federal income tax law. This summary is not intended to be exhaustive and, among
other things, does not describe state, local, or foreign tax consequences.
24
A participant will not recognize taxable income in purchasing shares of common
stock under the Stock Purchase Plan at the time he or she purchases those
shares. The federal income tax treatment to a participant who sells stock
acquired under the plan will depend in part on how long the participant holds
it.
If a participant disposes of stock acquired under the Stock Purchase Plan more
than two years after the first day of the applicable offering period in respect
of which the participant acquired it, the participant will recognize long-term
capital gain (or loss) in an amount equal to the difference between the amount
realized on the disposition and the participant's tax basis in the stock.
However, if a participant acquired that stock at less than 100 percent of its
fair market value on the first day of the applicable offering period, upon the
sale of that stock, the participant will also recognize as ordinary income an
amount equal to the lesser of (1) the difference between 15% of the fair market
value of the stock on the first day of the applicable offering period and the
price the participant paid for the stock or (2) the difference between the fair
market value of the stock on the date it is sold and the price the participant
paid for it.
If a participant disposes of stock acquired under the Stock Purchase Plan before
the end of the two-year holding period described in the preceding paragraph (a
"disqualifying" disposition), he or she will recognize ordinary income in an
amount equal to the difference between (1) the fair market value of that stock
at the time it was purchased (determined by reference to the New York Stock
Exchange price on the last day of the applicable offering period) and (2) the
price the participant paid for the stock. A participant will recognize this
amount of ordinary income even if the amount realized on the disposition is less
than the value of the stock on the date the participant purchased it. If the
amount realized on the disqualifying disposition exceeds the value of the stock
as of the date it was purchased, the participant also will recognize short-term
or long-term capital gain, depending upon how long the stock was held, in an
amount equal to that excess.
We are entitled to a tax deduction for any ordinary income participants
recognize.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE STOCK PURCHASE PLAN.
25
PROPOSAL THREE - APPROVAL OF THE
2004 EXECUTIVE INCENTIVE PLAN
General
Our Compensation Committee and Board of Directors have approved and recommend
for shareholder approval the 2004 Executive Incentive Plan (the "Incentive
Plan"). The Incentive Plan provides additional incentive to senior executives to
achieve targeted levels of achievement. The Incentive Plan is intended as a
successor plan to the existing Executive Incentive Plan for eligible
participants.
We are asking shareholders to approve the Incentive Plan so that we may deduct
compensation paid under that plan under Section 162(m). For a more complete
discussion of Section 162(m), see the Compensation Committee Report on Executive
Compensation at pages 14 to 16 of this proxy statement. Shareholder approval of
the Incentive Plan and certification by the Compensation Committee that targeted
performance has been achieved are each conditions to the rights of eligible
participants to receive any benefits under the Incentive Plan that would be
deductible under Section 162(m).
The following summarizes the Incentive Plan. The summary is qualified by
reference to the Incentive Plan, which is attached to this proxy statement as
Exhibit C.
Eligible Participants
The Chief Executive Officer, the President, and other key officers the
Compensation Committee may designate from time to time may participate in the
Incentive Plan. To receive an award with respect to a calendar year, a
participant must generally be an employee of the Corporation or one of its
subsidiaries on December 31 of that year. If an individual is no longer an
employee at the time the Compensation Committee approves awards under the
Incentive Plan, the Compensation Committee may cause any award otherwise payable
under the Incentive Plan to be forfeited.
Performance Goals
Our achievement of performance goals determines whether, and the extent to
which, a participant earns his or her award under the Incentive Plan. The goals
are based on any combination the Compensation Committee selects of income, net
income, growth in income or net income, earnings per share, growth in earnings
per share, cash flow measures, return on equity, return on assets, return on
investment, fees, growth in fees, assets, growth in assets, stockholder return,
stock price, achievement of balance sheet or income statement objectives,
expenses, reduction in expenses, chargeoffs, nonperforming assets, loan loss
reserves, market share, and overhead ratio. The goals may be company-wide or on
a departmental, divisional, regional, or individual basis. Any goal may be
measured in absolute terms or as compared to another company or companies. The
goals may be different each year, and will be established with respect to a
particular year by the latest date permitted by Section 162(m).
Awards
The Compensation Committee may provide for varying levels of payment under an
award depending on whether performance goals have been met or exceeded. No more
than $3,000,000 will be payable under an award to any one individual for any
award year. All payments will be made in cash, stock, restricted stock,
restricted stock units, or phantom stock units. The number of shares to be
issued to a participant cannot be predicted with accuracy because those awards
are contingent on the selection by the Compensation Committee of participants
from time to time and determining the size of awards.
Administration
The Compensation Committee has complete discretion to construe and administer
the Incentive Plan and to determine eligibility to participate, the performance
goals, achievement of the performance goals, the amount of payment to be made
under an award, and everything else necessary to carry out the Incentive Plan.
Amendment and Termination
The Compensation Committee may amend the Incentive Plan or the awards, as long
as any amendments are consistent with the Plan's continued qualification under
Section 162(m). The Compensation Committee may terminate the Incentive Plan at
any time.
26
Mr. Cecala has been designated as a Section 162(m) Participant in the Incentive
Plan for 2004. The awards payable under the Incentive Plan cannot be determined
because payment of those awards is contingent upon attainment of pre-
established performance goals, and the actual award may reflect the Compensation
Committee's exercise of discretion to reduce the award otherwise payable upon
achievement of the performance goals. For a description of and amounts paid
under the Company's Executive Incentive Plan for 2003, see the Report of the
Compensation Committee on Executive Compensation on pages 14 to 16 and the
Summary Compensation Table on page 17.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE INCENTIVE PLAN.
27
WILMINGTON TRUST CORPORATION
WILMINGTON TRUST COMPANY
AUDIT COMMITTEE CHARTER
PURPOSE:
The purpose of the Audit Committee ("Committee") of the Board of Directors of
Wilmington Trust Corporation ("Board") is to assist the Board in monitoring, on
behalf of Wilmington Trust Corporation and its subsidiaries (collectively, the
"Company"): (A) the quality and integrity of the accounting policies, financial
statements and disclosure practices of the Company; (B) the compliance by the
Company with legal and regulatory requirements; and (C) the independence,
qualifications and performance of the Company's internal and independent
auditors. The Committee also shall prepare the report required by the rules of
the Securities and Exchange Commission to be included in the Company's annual
proxy statement.
COMPOSITION:
The Committee shall be composed of not less than three (3) nor more than five
(5) members, who shall be selected by the Board of Directors from its own
members, none of whom shall be an officer or employee of the Company, and shall
hold office at the pleasure of the Board of Directors. The members of the
Committee shall meet the independence and experience requirements of the
Securities and Exchange Commission and the New York Stock Exchange. The
Committee shall elect its own chairperson.
RESPONSIBILITIES AND DUTIES:
The Committee shall:
1. Review the annual audited financial statements with management, including
major issues regarding accounting and auditing principles and practices as
well as the adequacy of internal controls that could significantly affect
the Company's financial statements.
2. Review with management and the independent auditor ("Auditor") significant
financial reporting issues and judgments made in connection with the
preparation of the Company's financial statements, including an analysis of
the effect of alternative GAAP methods on the Company's financial statements
and a description of any transactions as to which management obtained
Statement on Auditing Standards No. 50 letters and make recommendations with
respect to any matters pertaining to auditing the Company as the Committee
shall deem desirable.
3. Review with the Auditor any audit problems or difficulties and management's
response, and resolve any disagreements between the Auditor and management
regarding financial reporting.
4. Review with management and the Auditor the effect of regulatory and
accounting initiatives as well as off-balance sheet structures on the
Company's financial statements.
5. Consider whether or not to recommend to the Board that the audited financial
statements be included in the Company's annual report on Form 10-K for the
last fiscal year for filing with the Securities and Exchange Commission.
6. Review and discuss with management and the Auditor the Company's annual
audited financial statements and quarterly financial statements, including
(a) the Company's disclosures under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and (b) the results of the
Auditor's reviews of the quarterly financial statements.
7. Discuss earnings press releases, as well as financial information and
earnings guidance provided to analysts and rating agencies.
EXHIBIT A
8. Meet periodically with management to review the Company's major financial
risk exposures and the steps management has taken to monitor and control
such exposures, discuss the Company's policies with respect to risk
assessment and risk management and review and make recommendations with
respect to the Company's insurance coverages as the Committee deems
appropriate.
9. Review major changes to the Company's auditing and accounting principles and
practices as suggested by the Auditor, internal auditors ("Internal
Auditor") or management.
10. Require the Auditor to report directly to it and, each year, evaluate the
performance of the Auditor (including the lead partner of the Auditor), and,
as determined by the Committee, directly reappoint, retain, compensate
and/or terminate and replace the Auditor.
11. Receive reports from the Auditor at least annually regarding the Auditor's
objectivity and independence, delineating all relationships between the
Auditor and the Company, discuss such reports with the Auditor and, if so
determined by the Committee, after consultation with the Board that the
Committee deems appropriate, take appropriate action to insure the
objectivity and independence of the Auditor.
12. Review the experience and qualifications of the senior members of the
Auditor's team.
13. Review compliance with the Auditor Services Policy, determine that the
provision of non-audit services is compatible with maintaining the Auditor's
independence and pre-approve the use of the Auditor for those non-audit
services itemized on a list to be mutually developed by the Company's
management and the Internal Auditor and attached to this Charter as Schedule
1.
14. Review the appointment and replacement and provide input into the
performance evaluation of the senior Internal Auditing executive and have
general supervision over the Audit Services Division in all matters subject
to the approval of the Board of Directors.
15. Review the significant reports to management prepared by the Internal
Auditor.
16. Meet with the Auditor prior to the audit to review the planning and staffing
of the audit.
17. Discuss with the Auditor the matters required by Statement on Auditing
Standards No. 61 relating to the scope, conduct and results of the audit.
18. Review the Company's compliance policies and any material reports or
inquiries received from regulators or governmental agencies, including all
reports of examination of the Company made by any governmental agency or any
independent auditor employed for that purpose, and make recommendations to
the Board of Directors with respect thereto as the Committee shall deem
desirable.
19. Meet periodically with management (including the chief financial officer),
the Auditor and the Internal Auditor in separate executive sessions.
20. Establish procedures for the receipt, retention and treatment of complaints
from the Company's employees on accounting, internal accounting controls or
auditing matters, as well as for confidential, anonymous submissions by the
Company's employees of concerns regarding questionable accounting or
auditing matters.
21. The Committee shall have the authority at the expense of the Company to
retain special legal or other consultants to advise it. The Committee may
request any officer or employee of the Company or the Company's outside
counsel or other consultants to attend a meeting of the Committee or to meet
with any members of, or consultants to, the Committee.
22.Obtain and review a report by the Auditor at least annually describing:
(a) The firm's internal quality control procedures; and
(b) Any material issues raised by the most recent internal quality control
review, or peer review, of the firm or by any inquiry or investigation
by governmental or professional authorities within the preceding five
years, respecting one or more independent audits carried out by the
firm, and any steps taken to deal with any such issues.
2
23. Establish clear hiring policies for employees or former employees of the
Auditor.
24. Conduct an evaluation of its own performance annually.
25. Review and reassess the adequacy of this Charter at least annually and
submit any changes to the Board for approval.
MEETINGS:
1. The Committee's Chairperson, the Chairman of the Board, the Chief Executive
Officer, the President or a majority of the Committee's members may call a
meeting of the Committee at any time and at any place they deem it proper
for the transaction of the Committee's business.
2. A majority of the Committee's members shall constitute a quorum. The acts of
a majority of the members present at a meeting at which a quorum is present
shall constitute action by the Committee.
3. Committee members may participate in Committee meetings by conference
telephone or video facilities.
4. A report of all Committee meetings will be provided to the Board of
Directors at a subsequent meeting.
5. The Committee may adopt rules and procedures for the conduct of its affairs
that it deems necessary and which are not inconsistent with this Charter or
the Company's Bylaws.
The Committee also shall perform such other functions as it deems appropriate
from time to time with respect to and within the scope of its specified duties
and responsibilities or such other duties as the Board may assign to it from
time to time.
3
INDEPENDENT AUDITOR SERVICES POLICY
The Audit Committee of the Board of Directors of Wilmington Trust Corporation
and its subsidiaries (collectively, the "Company") reviews regularly all
services provided to the Company by its independent auditor (the "Auditor"). In
light of recent public concerns regarding non-audit services provided to
companies by their independent auditor and requirements imposed by the
Sarbanes-Oxley Act, the Securities and Exchange Commission and the New York
Stock Exchange, the Audit Committee of the Company's Board of Directors has
adopted the following policy regarding services provided by the independent
auditor.
The Audit Committee has agreed that the following services can be procured from
the Auditor without further prior approval of the Audit Committee:
1. Annual consolidated and subsidiary financial statement audits, including
reviews of unaudited quarterly consolidated financial statements and
procedures developed in response to new or pending pronouncements by
governing authorities, such as the Public Company Accounting Oversight
Board, the Financial Accounting Standards Board, the American Institute of
Certified Public Accountants, the Securities and Exchange Commission or the
New York Stock Exchange;
2. Statement of Auditing Standards No. 70 Report of the Company's Corporate
Retirement and Custody Services Division;
3. Annual financial statements audits of the Company's defined benefit, defined
contribution and other employee benefit plans and common and short-term
trust funds;
4. Review of audits of the Company's affiliates;
5. Tax compliance assistance in preparing the Company's federal and state
income tax returns;
6. Tax planning research;
7. Reports on the effectiveness of internal controls required by FDICIA and/or
the Sarbanes-Oxley Act;
8. Consents and comfort letters required for the Company's filings under the
1933 Securities Act and the 1934 Securities and Exchange Act; and
9. Services for acquisitions, including due diligence.
All such services provided by the Auditor shall be reported to the Audit
Committee at its next meeting.
It is the intent of the Audit Committee to adhere to these listed services being
provided by the Auditor. However, the Audit Committee is willing to consider a
recommendation by the Company's management as to a specific service if
management believes that the provision of such services would not compromise the
Auditor's independence.
Any engagement of the Auditor for the performance of "consulting services" other
than the services listed above shall be reviewed by the Audit Committee prior to
engagement. Situations requiring urgency may be authorized by the Committee
Chair. In no circumstance will the Auditor be engaged to provide services
prohibited by the Sarbanes-Oxley Act or its implementing regulations, including
financial information systems design and implementation, or to prepare personal
tax returns of any of the Company's executive officers.
SCHEDULE 1
WILMINGTON TRUST CORPORATION
2004 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of Wilmington Trust Corporation's 2004 Employee Stock
Purchase Plan (the "Plan") is to provide all regular employees of Wilmington
Trust Corporation (the "Company") and those of its subsidiaries that may be
designated as participating companies by the Company's Board of Directors
from time to time an opportunity to purchase shares of the Company's common
stock, par value $1 per share ("Common Stock"), through annual offerings to
be made from time to time for the duration of the Plan; and to foster
interest in the Company's success, growth, and development. The Company
intends that the Plan qualify as an "Employee Stock Purchase Plan" within
the meaning of Section 423 of the Internal Revenue Code of 1986, as amended
(the "Code"). Accordingly, the Plan's provisions shall be construed to
extend and limit participation in a manner consistent with the requirements
of that section of the code.
2. Eligibility.
a. Any Employee shall be eligible to participate in the Plan as of the
beginning of the Plan year coincident with or next following the completion
of at least one month of continuous service with one or more Employers,
subject to the limitations imposed by Section 423(b) of the Code.
b. Any provision of the Plan to the contrary notwithstanding, no Employee
shall be granted an option:
(1) If, immediately after that grant, the Employee would own shares, and/or
hold outstanding options to purchase shares, possessing 5% or more of
the total combined voting power or value of all classes of stock of the
Company or of any subsidiary of the Company; or
(2) That permits an Employee rights to purchase shares under all employee
stock purchase plans of the Company and its subsidiaries to accrue at a
rate that exceeds $25,000 of the fair market value of the shares
(determined at the time that option is granted) for each calendar year
in which those stock options are outstanding at any time.
3. Offerings. The Company will make one or more annual offerings to Employees
to purchase stock hereunder. The terms and conditions of each such offering
shall specify the number of shares that may be purchased thereunder. The
fixed term of any offering shall include a Purchase Period of specified
duration, during which (or during that period thereof during which an
Employee may elect to participate) the amounts received by an Employee as
Base Salary shall constitute the measure of that Employee's participation in
the offering.
4. Participation. An Employee who is, on the effective date of any offering,
eligible to participate in that offering, may participate by completing and
forwarding a "Payroll Deduction Authorization for Purchase of Wilmington
Trust Corporation Stock" form to the designated payroll location. Payroll
deductions for a Participant shall commence on the date when the
authorization for a payroll deduction becomes effective and end on the
termination date of the offering to which that authorization applies, unless
terminated sooner by the Participant in accordance with Paragraph 8 below.
5. Payroll Deductions. A Participant's payroll deduction authorization shall
authorize deductions each payday during a Purchase Period at a rate not to
exceed 10% of the Participant's Base Salary at the beginning of that
Purchase Period but, at a minimum, at a rate that will accumulate an amount
equal to the offering price of at least five shares by the end of the
Purchase Period.
EXHIBIT B
a. All payroll deductions made for a Participant shall be credited to a
bookkeeping account under the Plan. A Participant may not make separate cash
payments into that account.
b. A Participant may at any time prospectively decrease the amount
authorized to be deducted per period, provided the minimum deduction
required above is maintained. That change may not become effective sooner
than the next pay period ending after receipt of the form by the appropriate
payroll location. Notwithstanding anything to the contrary contained herein,
a Participant may reduce payroll deductions hereunder only once during any
Purchase Period.
c. A Participant may discontinue participation in the Plan in accordance
with Paragraph 8 below.
6. Granting of an Option.
a. In any offering hereunder, each Participant shall be granted an option,
on the Date of Offering, for as many full shares of Common Stock as he or
she elects to purchase with the payroll deductions credited to the
Participant's account during the Purchase Period, based on the option price
for the Purchase Period, as described in Subparagraph 6(b) below.
b. The option price per share of shares purchased with payroll deductions
made for a Participant during any Purchase Period shall be the lower of:
(1) Eighty-five percent of the last sale price of the Common Stock on the
first day of the Purchase Period or, if there was no such reported sale
of Common Stock on that date, on the next preceding date on which there
was such a reported sale; or
(2) Eighty-five percent of the last sale price of the Common Stock on the
last day of the Purchase Period or, it there was no such reported sale
of Common Stock on that date, on the next preceding date on which there
was such a reported sale.
7. Exercise of Option.
a. As of the last day of the Purchase Period for any offering, the account
of each Participant shall be totaled and the option price determined. If a
Participant has sufficient funds (including interest credited on his or her
account at the rate computed in accordance with Paragraph 9 below) to
purchase five or more full shares at the option price, that Participant
shall be deemed to have exercised the option to purchase the number of
shares for which he or she has subscribed at that price, and his or her
account shall be charged for the number of shares so purchased.
b. Participation in an offering will not bar an Employee from participating
in any subsequent offering hereunder. Payroll deductions may be made under
each offering to the extent the Employee authorizes, subject to the maximum
and minimum limitations for that offering imposed hereby. A separate account
shall be maintained for each Participant with respect to each offering. Any
unused balance in a Participant's account at the end of a Purchase Period
shall be refunded, with interest computed in accordance with Paragraph 9
below.
c. If a Participant does not accumulate sufficient funds in his or her
account to purchase at least five shares during a Purchase Period, the
Participant thereupon shall be deemed to have withdrawn from that offering,
and his or her account will be refunded, with interest computed in
accordance with Paragraph 9 below.
d. The shares of Common Stock purchased by a Participant upon the exercise
of his or her option in accordance herewith shall not include fractional
shares. Amounts credited to a Participant's account which would have been
used to purchase fractional shares shall be refunded to the Participant,
with interest computed in accordance with Paragraph 9 below.
8. Withdrawal.
a. A Participant may withdraw all payroll deductions credited to an account
hereunder at any time before the end of a Purchase Period by giving the
Company written notice. All payroll deductions credited to that account
shall be paid to the Participant, with interest computed in accordance with
Paragraph 9
2
below, promptly after receipt of notice of withdrawal, and no further
payroll deductions shall be made for that Participant in respect of that
offering.
b. Except as provided in the following sentence, an Employee's withdrawal
from the Plan shall not have any effect upon his or her eligibility to
participate in any succeeding offering hereunder; provided that Section 16
Officers who make withdrawals or otherwise cease participation in the Plan
during any Purchase Period shall be precluded from re-participation in the
Plan until the next Purchase Period that begins at least six months after
that withdrawal or cessation of participation.
c. If an Employee retires or otherwise terminates employment, no payroll
deduction shall be made from any pay due and owing at that time, and the
balance in the Employee's account shall be paid to the Employee, with
interest computed in accordance with Paragraph 9 below or, at the Employee's
election, used to purchase Common Stock in accordance with Paragraph 7
above.
d. If an Employee dies, that Employee's beneficiary may elect to withdraw
the balance in his or her account, with interest computed in accordance with
Paragraph 9 below, or apply it to the purchase of the appropriate number of
full shares of Common Stock at a price determined in accordance with
Paragraph 6 above, using the date of death as though it were the last day of
the Purchase Period. Any balance in that account remaining after that
purchase shall be paid, with interest computed in accordance with Paragraph
9 below, to the person or persons entitled thereto in accordance with
Paragraph 12 below.
9. Interest. Each Participant's account shall be credited with interest at the
rate in effect from time to time on statement savings accounts of Wilmington
Trust Company that may not be accessed by check.
10. Stock.
a. The shares to be sold to Participants hereunder are to be authorized and
unissued shares of Common Stock, or issued shares of Common Stock that the
Company has reacquired and holds in its treasury. The maximum number of
shares that shall be made available for sale hereunder during all offerings
shall be 800,000 shares, subject to adjustment upon changes in the Company's
capitalization as provided in Paragraph 14 below.
b. None of the rights or privileges of a stockholder of the Company shall
exist with respect to shares purchased hereunder until the end of the
Purchase Period with respect to which those shares were acquired.
c. If in any offering Employees subscribe for more shares than remain
available under the Plan, the shares in that offering shall be allocated pro
rata among employees by multiplying the number of shares remaining under the
Plan by a fraction, the numerator of which is the number of shares the
Employee subscribed for in that offering and the denominator of which is the
number of shares all Employees subscribed for in that offering.
d. Shares to be delivered to an Employee hereunder will be registered in the
Employee's name or, if directed by written notice to Wilmington Trust
Company's Human Resources Department before the end of a Purchase Period, in
the names of the Employee and one other person, as joint tenants with rights
of survivorship, to the extent permitted by applicable law.
11. Administration. The Plan shall be administered by a committee (the
"Committee") consisting of not less than three members who shall be
appointed by the Company's Board of Directors. Each member of the Committee
shall be either a director, an officer, or an Employee of an Employer. The
Committee shall be vested with full authority to make, administer, and
interpret rules and regulations that it deems necessary or desirable to
administer the Plan. Any determination, decision, interpretation,
administration, or application hereof shall be final, conclusive, and
binding upon all Participants and any and all persons claiming under or
through any Participant.
12. Designation of Beneficiary. A Participant may file with Wilmington Trust
Company's Human Resources Department a written designation
3
of a beneficiary who is to receive any shares and/or cash for the
Participant's credit hereunder in the event of that Participant's death
before the delivery of those shares and/or cash. The Participant may change
that designation at any time by providing written notice to Wilmington Trust
Company's Human Resources Department. Upon the death of a Participant and
receipt by Wilmington Trust Company's Human Resources Department of proof of
the Participant's death and the identity and existence of a beneficiary
validly designated hereunder, the Company shall deliver those shares and/or
that cash to the executor or administrator of the Participant's estate. If
no such executor or administrator has been appointed to the Company's
knowledge, the Company may, in its discretion and in such form as the
Committee may prescribe, deliver those shares and/or that cash to the
Participant's spouse or to any one or more dependents, or relatives of the
Participant. If no spouse, dependent or relative is known to the Company,
then the Company may, in its discretion and in such form as the Committee
may prescribe, deliver those shares and/or that cash to such other person as
the Committee may designate. No such designated beneficiary shall, before
the death of the Participant by whom the beneficiary has been designated,
acquire any interest in the shares and/or cash credited to the Participant
hereunder.
13. Transferability. No rights with respect to the exercise of any option or to
receive shares hereunder may be assigned, transferred, pledged, or otherwise
disposed of by an Employee. Options granted hereunder are not transferable
by an Employee otherwise than by will or the laws of descent and
distribution, and are exercisable during an Employee's lifetime only by the
Employee.
14. Changes in Capitalization. The number and kind of shares subject to
outstanding options hereunder, the purchase price of those options, and the
number and kind of shares available for options subsequently made available
hereunder shall be adjusted appropriately to reflect any stock dividend,
stock split, combination, or exchange of the Company's shares, merger,
consolidation, or other change in the Company's capitalization with a
similar substantive effect upon the Plan or options granted or to be granted
hereunder. The Committee shall have the power and sole discretion to
determine the nature and amount of the adjustment to be made in each case.
15. Use of Funds. All payroll deductions received or held by an Employer
hereunder may be used by the Employer for any corporate purpose, and the
Employer shall not be obligated to segregate those payroll deductions.
16. Government Regulations. The Company's obligations to sell and deliver the
Company's stock hereunder are subject to the approval of any governmental
authority required in connection with the authorization, issuance, or sale
of that stock. The Company's Board of Directors may, in its discretion,
require as conditions to the exercise of any option granted hereunder that
the shares of Common Stock reserved for issuance upon the exercise of the
option have been duly listed, upon official notice of issuance, on a stock
exchange or the National Association of Securities Dealers Automated
Quotation System, and that either:
a. A Registration Statement with respect to those shares is effective under
the Securities Act of 1933; or
b. The Participant has represented at the time of purchase, in form and
substance satisfactory to the Company, that he or she intends to purchase
those shares for investment and not for resale or distribution.
17. Amendment or Termination. Unless terminated sooner by the Company's Board of
Directors, the Plan shall terminate automatically as of May 31, 2008. The
Company's Board of Directors may terminate or amend the Plan at any time. No
such termination shall affect options previously granted hereunder. No such
amendment may make any change in any option theretofore granted hereunder
that would adversely affect the rights of any Participant, nor be made
without the prior approval of a majority of the shares of the Company's
outstanding stock if
4
that approval would be required by law, including if that amendment would:
a. Permit the sale of more shares than are authorized under Paragraph 10
above; or
b. Permit payroll deductions at a rate in excess of 10% of a Participant's
Base Salary.
18. No Employment Rights. The Plan does not, directly or indirectly, create any
right for the benefit of any Employee or class of Employees to purchase any
shares hereunder, or create in any Employee or class of Employees any right
with respect to continuation of employment by the Company or any direct or
indirect subsidiary thereof. The Plan shall not be deemed to interfere in
any way with the right of the Company or any direct or indirect subsidiary
thereof to terminate, or otherwise modify, an Employee's employment at any
time.
19. Governing Law. Delaware law, other than the conflict-of-laws provisions of
that law, shall govern all matters relating to the Plan, except as that law
is superseded by the laws of the United States.
20. Definitions. Unless otherwise defined herein, capitalized terms used herein
shall have the following meanings:
a. "Base Salary" means regular straight-time earnings, excluding payments
for overtime, incentive compensation, bonuses, and other special payments
except to the extent the Committee specifically approves including any such
item.
b. "Committee" means the committee established pursuant to Paragraph 11
above to administer the Plan.
c. "Date of Offering" shall be the first day of each Purchase Period.
d. "Employee" shall mean any person, including an officer, who is
customarily employed by an Employer for 15 hours or more per week and for
more than five months in a calendar year.
e. "Employer" means the Company and any subsidiary company designated as a
participating company by the Company's Board of Directors, 15% or more of
the voting stock of which is owned directly or indirectly by the Company.
f. "Participant" means an Employee who has agreed to participate in an
offering and has met the requirements of Paragraph 4 above.
g. "Purchase Period" means each of the periods during which a Participant
may purchase Common Stock pursuant to any particular offering hereunder.
h. "Section 16 Officers" means officers of the Company, or of any subsidiary
of the Company 25% or more of the voting stock of which is owned directly or
indirectly by the Company, designated as Section 16 Officers by resolution
of the Board of Directors of the Company from time to time.
5
EXHIBIT C
WILMINGTON TRUST CORPORATION
2004 EXECUTIVE INCENTIVE PLAN
1. Purpose. The purpose of the Wilmington Trust Corporation (the "Company")
2004 Executive Incentive Plan (the "Incentive Plan") is to provide senior
management annual awards that recognize and reward the achievement of
performance goals.
2. Effective Date of Plan. The Incentive Plan shall be effective as of January
1, 2004, but any payments under the Incentive Plan to individuals a portion of
whose compensation would be subject to Section 162(m) of the Internal Revenue
Code and the related regulations ("Section 162(m)") and that the Company desires
to deduct ("Section 162(m) Participants") shall be made contingent on the
Incentive Plan's approval by the Company's shareholders.
3. Plan Administrator. The Company's Compensation Committee shall administer
the Incentive Plan. The Compensation Committee consists of members appointed by
the Board of Directors from time to time. Each member of the Compensation
Committee shall be an "outside director" within the meaning of Section 162(m).
The Compensation Committee shall have full power and authority, subject to the
provisions of the plan and applicable law, to (a) establish, amend, suspend, or
waive rules and regulations and appoint agents it deems necessary or advisable
for the plan's proper administration, (b) construe, interpret, and administer
the plan and any instrument or agreement relating to the plan, and (c) make all
other determinations and take all other actions necessary or advisable for the
plan's administration. Unless the Incentive Plan expressly provides otherwise,
each determination the Compensation Committee makes and each action it takes
pursuant to the plan or any instrument or agreement relating to the plan (x)
shall be within the Compensation Committee's sole discretion, (y) may be made at
any time, and (z) shall be final, binding, and conclusive for all purposes on
all persons, including participants in the plan, their legal representatives,
and beneficiaries and employees of the Company and its subsidiaries.
4. Eligibility. The Chief Executive Officer, the President, and other senior
officers of the Company and its subsidiaries are eligible to participate in the
Incentive Plan if the Compensation Committee designates them.
5. Awards.
5.1 For each calendar year (a "Plan Year"), at such times as the
Compensation Committee determines, it shall establish the basis and terms of
participation of participants who are not Section 162(m) Participants. In doing
so, the Compensation Committee may establish one or more quantitative or
qualitative performance or other goals or criteria as the basis for awarding
executives bonuses under the Incentive Plan.
5.2 For Section 162(m) Participants, within 90 days after the commencement
of each Plan Year, the Compensation Committee shall designate:
a. The officers who will be deemed Section 162(m) Participants for that
Plan Year;
b. The Financial Criteria that will apply to awards to Section 162(m)
Participants for the Plan Year; and
c. The Performance Goals the Company must meet for Section 162(m)
Participants to earn awards for the Plan Year and a payout matrix or
formula for those Financial Criteria and Performance Goals.
After the 90th day of a Plan Year, the Compensation Committee may designate
newly-hired officers as participants in the Plan for that Plan Year. The
Performance Goals for those additional Section 162(m) Participants will be
established before 25% of the days remaining in that partial Plan Year have
expired.
Any participant who terminates employment, either voluntarily or
involuntarily, before awards are paid for a Plan Year will be ineligible
for an award under the Plan. However, the Compensation Committee may, in
its sole and complete discretion, determine to pay an award if termination
was due to
death, disability, retirement, or a Change in Control of the Corporation,
but:
x. No such payment shall be made to any participant for a Plan Year before
awards for that Plan Year are payable generally; and
y. No such payment shall be made to any Section 162(m) Participant unless
the Performance Goals established for that participant have been attained.
For purposes hereof, the term "Change in Control" means any of the events
described below, directly or indirectly or in one or more series of
transactions:
(1) Approval by Wilmington Trust Company's ("WTC's") or the Company's
stockholders of a consolidation or merger of WTC or the Company with any
third party (including a single person or entity or a group of persons or
entities acting in concert) not wholly-owned, directly or indirectly, by
WTC or the Company (a "Third Party"), unless WTC or the Company is the
entity surviving that merger or consolidation;
(2) Approval by WTC's or the Company's stockholders of a transfer of all
or substantially all of the assets of WTC or the Company to a Third Party
or of a complete liquidation or dissolution of WTC or the Company;
(3) Any person, entity, or group which is a Third Party, without prior
approval of WTC's or the Company's Board of Directors, by itself or through
one or more subsidiaries:
(a) Acquires beneficial ownership of 15% or more of any class of WTC's or
the Company's voting stock;
(b) Acquires irrevocable proxies representing 15% or more of any class of
WTC's or the Company's voting stock;
(c) Acquires any combination of beneficial ownership of voting stock and
irrevocable proxies representing 15% or more of any class of WTC's or
the Company's voting stock;
(d) Acquires the ability to control in any manner the election of a
majority of WTC's or the Company's directors; or
(e) Acquires the ability to exercise a controlling influence over the
management or policies of WTC or the Company, directly or indirectly;
or
(4) Any election occurs of persons to the Company's Board of Directors
that causes a majority of that Board of Directors to consist of persons
other than (x) persons who were members of that Board of Directors on
February 29, 1996 (the "Effective Date") and/or (y) persons who were
nominated for election as members of that Board of Directors by the
Company's Board of Directors (or a committee thereof) at a time when the
majority of that Board of Directors (or that committee) consisted of
persons who were members of the Company's Board of Directors on the
Effective Date. However, any person nominated for election by the Company's
Board of Directors (or a committee thereof), a majority of whom are persons
described in clauses (x) and/or (y), or are persons who were themselves
nominated by that Board of Directors (or a committee thereof), shall be
deemed for this purpose to have been nominated by a Board of Directors
composed of persons described in clause (x) above.
However, a Change in Control shall not include any of the events described
above if they (i) occur in connection with the appointment of a receiver or
conservator for WTC or the Company, provision of assistance under Section
13(c) of the Federal Deposit Insurance Act (the "FDI Act"), the approval of
a supervisory merger, a determination that WTC is in default as defined in
Section 3(x) of the FDI Act, insolvent or in an unsafe or unsound condition
to transact business, or, with respect to any participant, the suspension,
removal, and/or temporary or permanent prohibition by a regulatory agency
of that participant from participating in WTC's or the Company's business
or (ii) are the result of a Third Party inadvertently acquiring beneficial
ownership or irrevocable proxies or a combination of both for 15% or more
of any class of WTC's or the Company's voting stock, and that Third Party
as promptly as practicable thereafter divests itself of the beneficial
ownership or irrevocable proxies for a sufficient number of
2
shares so that the Third Party no longer has beneficial ownership or
irrevocable proxies or a combination of both for 15% or more of any class
of WTC's or the Company's voting stock.
6. Financial Criteria. For each Plan Year, the Compensation Committee shall
designate one or more financial criteria (the "Financial Criteria") set forth in
this Section 6 for use in determining awards for Section 162(m) Participants for
that Plan Year. Financial Criteria shall consist of one or more of the following
financial measures: income, net income, growth in income or net income, earnings
per share, growth in earnings per share, cash flow measures, return on equity,
return on assets, return on investment, loan loss reserves, market share, fees,
growth in fees, assets, growth in assets, stockholder return, stock price,
achievement of balance sheet or income statement objectives, expenses, reduction
in expenses, chargeoffs, nonperforming assets, loan loss reserves, market share,
and overhead ratio. Any of the Financial Criteria may be company-wide or on a
departmental, divisional, regional, or individual basis. In addition, any of the
Financial Criteria may be measured in absolute terms, by reference to internal
performance targets, or as compared to another company or companies, and may be
measured by the change in that performance target compared to a previous period.
The Compensation Committee retains the discretion to determine whether an award
will be paid under any one or more of the Financial Criteria.
7. Performance Goals. For each Plan Year, the Compensation Committee shall
establish specific, objective performance goals (the "Performance Goals"), the
outcome of which is substantially uncertain at the time they are established,
for each of the Financial Criteria the Compensation Committee designates for
that Plan Year against which actual performance is to be measured to determine
the amount of awards to Section 162(m) Participants. Performance Goals the
Compensation Committee establishes may be described by means of a matrix or
formula providing for goals resulting in the payment of awards under the plan.
8. Determination and Payment of Awards.
8.1. As soon as practicable after the end of a Plan Year, the Compensation
Committee will determine the amount of the award each participant has earned.
For Section 162(m) Participants, that determination will be made based on
application of the criteria specified in Section 6. However, the Compensation
Committee may, in its sole and absolute discretion, reduce the amount that would
otherwise be payable under the Incentive Plan. Payments will be made promptly
after the Compensation Committee determines the amount of the awards unless
payment of an award has been deferred pursuant to Section 10.6. The Compensation
Committee's determination with respect to Section 162(m) Participants must
include its certification in writing that the Performance Goals and any other
terms of the award were satisfied. Minutes of the Compensation Committee's
meeting or any action by written consent shall satisfy the written certification
requirement.
8.2. The Corporation shall pay awards under the Incentive Plan in cash,
stock, restricted stock, restricted stock units, "phantom stock" units, or other
types of awards valued in whole or in part by reference to, or otherwise based
on, shares of the Company's stock. Subject to the provisions hereof, the
Compensation Committee shall have the sole and absolute discretion to determine
the persons to whom and the time or times at which those awards are made, the
number of shares to be granted pursuant thereto, if any, and all other
conditions of those awards. Any award other than cash shall be confirmed by an
award agreement. The award agreement shall contain provisions the Compensation
Committee determines are necessary or appropriate to carry out the intent hereof
with respect to the award. Any awards may be represented in whole or in part by
certificated shares or uncertificated shares, at the Compensation Committee's
sole discretion. The Compensation Committee may grant awards in respect of up to
a total of 300,000 shares of stock under the Incentive Plan.
8.3. Notwithstanding anything to the contrary contained herein, the maximum
dollar amount with respect to which awards may be granted under the Incentive
Plan for any Plan Year to any participant may not exceed $3,000,000.
3
8.4. In addition to the terms and conditions specified in the award
agreement, awards shall be subject to the following:
(a) Any shares subject to awards may not be sold, assigned, transferred,
pledged, or otherwise encumbered before the date on which those shares are
issued or, if later, the date on which any applicable restriction,
performance, or deferral period lapses;
(b) If specified in the award agreement, the recipient of an award shall be
entitled to receive, currently or on a deferred basis, dividends or
dividend equivalents with respect to the shares covered by that award, and
the Compensation Committee may, in its sole and absolute discretion,
provide in the award agreement that those amounts be reinvested in
additional shares;
(c) The award agreement shall contain provisions dealing with the
disposition of the award in the event of the termination of the
participant's employment before the exercise, realization, or payment of
the award. The Compensation Committee may, in its sole and absolute
discretion, waive any of the restrictions imposed with respect to any
award; and
(d) Shares issued as a bonus pursuant hereto shall be issued for the
consideration the Compensation Committee determines is appropriate, in its
sole and absolute discretion, but rights to purchase shares shall be priced
at least 100% of the market value per share on the date the award is
granted.
9. Taxes. If the Compensation Committee deems it necessary or desirable, the
Company shall be entitled to withhold (or secure payment from a participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or that the Company pays (1) with respect to any amount payable
and/or shares issuable under that participant's award or (2) with respect to any
income recognized upon the lapse of restrictions applicable to an award. The
Company may defer payment or issuance of the cash, shares or units upon the
grant, exercise or vesting of an award unless indemnified to its satisfaction
against any liability for that tax. The Compensation Committee or its delegate
shall determine the amount of that withholding or tax payment. The participant
shall make that payment at the time the Compensation Committee determines. In
each award agreement, the Compensation Committee shall prescribe one or more
methods by which the participant may satisfy his or her tax withholding
obligation. This may include the participant's paying the Company cash or shares
of the Company's stock or the Company's withholding from the award, at the
appropriate time, a number of shares sufficient to satisfy those tax withholding
requirements, based on the market value per share of those shares. In its sole
and absolute discretion, the Compensation Committee may establish rules and
procedures relating to any withholding methods it deems necessary or
appropriate. These may include rules and procedures relating to elections by
participants who are subject to Section 16 of the Securities Exchange Act to
have shares withheld from an award to meet those withholding obligations.
10. Termination, Suspension, or Modification of the Plan. The Board of Directors
may at any time, with or without notice, terminate, suspend, or modify the
Incentive Plan in whole or in part. The Board of Directors shall not amend the
Incentive Plan in violation of law or in contravention of Section 162(m). The
Compensation Committee may make any amendments to the Incentive Plan not in
violation of law required to conform the Incentive Plan to the requirements of
Section 162(m). The Compensation Committee also may correct any defect, supply
any omission, or reconcile any inconsistency in the Incentive Plan in the manner
and to the extent it deems desirable to carry the Incentive Plan into effect.
11. Miscellaneous.
11.1. No award under the Incentive Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution, or levy of any kind, either voluntary or
involuntary, including any liability which is for alimony or other payment for
the support of a spouse or former spouse, or for any other relative of a
participant, prior to actually being received by the participant or his or her
designated beneficiary. Any attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber, charge, or otherwise dispose of any right to an award
hereunder shall be void.
4
11.2. Neither the adoption of the Incentive Plan, the determination of
eligibility to participate in the Incentive Plan, nor the granting of an award
under the Incentive Plan shall confer upon any participant any right to continue
in the employ of the Company or any of its subsidiaries or interfere in any way
with the right of the Company or its subsidiaries to terminate that employment
at any time.
11.3. The Incentive Plan and all determinations under it shall be governed
by and construed in accordance with Delaware law, other than the conflict of law
provisions of those laws, and except as that law is superseded by federal law.
11.4. The existence of outstanding awards shall not affect the right of the
Company or its shareholders to make or authorize any and all adjustments,
recapitalizations, reclassifications, reorganizations, and other changes in the
Company's capital structure, the Company's business, any merger or consolidation
of the Company, any issue of bonds, debentures, or preferred stock, the
Company's liquidation or dissolution, any sale or transfer of all or any part of
the Company's assets or business, or any other corporate act or proceeding,
whether of a similar nature or otherwise.
The number and kind of shares subject to outstanding awards, the purchase
or exercise price of those awards, and the number and kind of shares available
for awards subsequently granted shall be adjusted appropriately to reflect any
stock dividend, stock split, combination or exchange of shares, merger,
consolidation, or other change in capitalization with a similar substantive
effect on the Incentive Plan or awards granted hereunder. The Compensation
Committee shall have the power and sole and absolute discretion to determine the
nature and amount of the adjustment to be made in each case. However, in no
event shall any adjustment be made under the provisions of this Section 11.4 to
any outstanding award if an adjustment has been made or will be made to the
shares of the Company's stock awarded to a participant in that person's capacity
as a shareholder.
If the Company is merged or consolidated with another entity and the
Company is not the surviving entity, or if the Company is liquidated or sells or
otherwise disposes of all or substantially all of its assets to another entity
while unexercised awards remain outstanding, then (a) subject to the provisions
of Section 11.4(b) below, after the effective date of that merger,
consolidation, liquidation, or sale, each holder of an outstanding award
hereunder shall be entitled to receive, upon exercise or vesting of that award
in lieu of shares, other stock or other securities as the holders of shares of
the Company's stock received in the merger, consolidation, liquidation, or sale;
and (b) the Compensation Committee may cancel all outstanding awards as of the
effective date of that merger, consolidation, liquidation, or sale, provided
that (i) notice of that cancellation has been given to each holder of an award
and (ii) in addition to any rights he or she may have under Section 5.2 above,
each holder of an outstanding award hereunder shall have the right to that award
or the exercise in full, without regard to any limitations set forth in or
imposed pursuant hereto or contained in the award agreement, during a 30-day
period preceding the effective date of the merger, consolidation, liquidation,
or sale. The exercise and/or vesting of any award that was permissible solely
because of this Section 11.4(b)(ii) shall be conditioned on consummation of the
merger, consolidation, liquidation, or sale shall terminate as of that date.
If the Company is consolidated or merged with another entity under
circumstances in which the Company is the surviving entity, and its outstanding
shares are converted into shares of a third entity, a condition to the merger or
consolidation shall be that the third entity succeed to the Company's rights and
obligations hereunder, and that the Incentive Plan be administered by a
committee of the Board of that entity.
Comparable rights shall accrue to each participant in the event of
successive reorganizations, mergers, consolidations, or other transactions
similar to those described above.
Except as expressly provided herein, the Company's issuance of shares or
any other securities for cash, property, labor, or services, either upon direct
sale, the exercise of rights or warrants to subscribe therefor, or conversion of
shares or obligations of the Company convertible into shares or other securities
shall not affect, and no adjustment by reason thereof shall be made
5
with respect to, the number, class, or price of shares then subject to awards
outstanding.
After any reorganization, merger, or consolidation in which the Company or
one of its subsidiaries or affiliates is a surviving entity, the Compensation
Committee may grant substituted awards replacing old awards granted under a plan
of another party to the reorganization, merger, or consolidation whose stock
subject to the old options or awards may no longer be issued following that
reorganization, merger, or consolidation. The Compensation Committee shall
determine the foregoing adjustments and the manner in which the foregoing
provisions are applied in its sole and absolute discretion. Any of those
adjustments may provide for eliminating any fractional shares of the Company's
stock that might otherwise become subject to any awards.
11.5. Nothing in the Incentive Plan shall be construed as limiting the
authority of the Compensation Committee, the Board of Directors, the Company, or
any subsidiary of the Company to establish any other compensation plan or as in
any way limiting its or their authority to pay bonuses or supplemental
compensation to any persons employed by the Company or a subsidiary of the
Company, whether that person is a participant and regardless of how the amount
of that compensation or bonus is determined.
11.6. A participant may elect to defer payment of his or her award under
the Incentive Plan if deferral of the award under the Incentive Plan is
permitted pursuant to the terms of a deferred compensation program of the
Company existing at the time the election to defer is permitted to be made and
the participant complies with the terms of that program.
11.7. It is the Company's intention that all payments made under the
Incentive Plan to Section 162(m) Participants shall constitute
"performance-based compensation" as that term is defined for purposes of Section
162(m). Accordingly, unless the Board of Directors determines otherwise, if any
provision of the Incentive Plan is found not to be in compliance with that
provision, that provision shall be deemed amended so that the provision does
comply to the extent permitted by law. In every event, the Incentive Plan shall
be construed in favor of those payments meeting the "performance-based
compensation" exception contained in Section 162(m). Notwithstanding anything to
the contrary contained herein, the Compensation Committee retains discretion to
grant awards hereunder that do not comply with Section 162(m).
11.8.
a. "Cause" means, with respect to a participant who is an employee of the
Company or one of its subsidiaries or affiliates or who is a consultant,
termination for, as the Compensation Committee determines in its sole and
absolute discretion, the participant's personal dishonesty, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule, or
regulation (other than traffic violations or similar offenses), or a final
cease-and-desist order.
b. "Disability" means any physical or mental injury or disease of a
permanent nature that renders a participant incapable of meeting the
requirements of the employment or other work the participant performed
immediately before that disability commenced. The Compensation Committee or
its designee shall make the determination of whether a participant is
disabled and when the participant becomes disabled in its sole and absolute
discretion.
c. "Normal Retirement Date" means the date on which a participant
terminates active employment with the employer he or she was employed with
when he or she was last granted awards on or after attaining age 65, but
does not include termination for Cause.
d. "Other Retirement Date" means a date, on or after a participant attains
age 55 but earlier than the participant's Normal Retirement Date, that the
Compensation Committee in its sole and absolute discretion approves and
designates to be the date upon which a participant retires for purposes
hereof, but does not include termination for Cause.
6
WILMINGTON TRUST CORPORATION
ANNUAL SHAREHOLDERS' MEETING
THURSDAY, APRIL 15, 2004
10:00 A.M.
[WILMINGTON TRUST LOGO]
WILMINGTON TRUST PLAZA
MEZZANINE LEVEL
301 WEST ELEVENTH STREET
WILMINGTON, DELAWARE
WILMINGTON TRUST CORPORATION
[SMALL WILMINGTON TRUST LOGO] Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON APRIL 15, 2004.
The shares of stock you hold in your account or in a dividend reinvestment
account will be voted as you specify on the reverse side.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1, 2, AND 3.
By signing the proxy or voting by telephone or the Internet, you revoke all
prior proxies and appoint David R. Gibson and Michael A. DiGregorio, and each of
them, with full power of substitution, to vote your shares on the matters shown
on the reverse side and any other matters which may come before the Annual
Meeting and all adjournments.
See reverse for voting instructions.
COMPANY #
To Our Shareholders,
You are cordially invited to attend our Annual Shareholders' Meeting, to be held
at the Wilmington Trust Plaza, Mezzanine Level, 301 West Eleventh Street,
Wilmington, Delaware, at 10:00 A.M. on Thursday, April 15, 2004.
At the Annual Meeting, we will review our performance and answer any questions
you may have. The enclosed proxy statement provides you with more details about
items that will be addressed at the Annual Meeting. After reviewing the proxy
statement, please sign, date, and indicate your vote for the items listed on the
proxy card below and return it in the enclosed, postage-paid envelope whether or
not you plan to attend the Annual Meeting.
Thank you for your prompt response.
Sincerely,
Ted T. Cecala
Chairman and Chief Executive Officer
THERE ARE THREE WAYS TO VOTE YOUR PROXY
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED, AND RETURNED YOUR PROXY CARD.
VOTE BY PHONE -- TOLL FREE -- 1-800-560-1965
- Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week, until 12:00 p.m. (CT) on April 14, 2004.
- Please have your proxy card and the last four digits of your Social Security
Number available. Follow the simple instructions the voice provides you.
- VOTE BY INTERNET -- HTTP://WWW.EPROXY.COM/WL/ - Use the Internet to vote your
proxy 24 hours a day, 7 days a week, until 12:00 p.m. (CT) on April 14, 2004.
- Please have your proxy card and the last four digits of your Social Security
Number available. Follow the simple instructions to obtain your records and
create an electronic ballot.
- VOTE BY MAIL
- Mark, sign, and date your proxy card and return it in the postage-paid
envelope we have provided or return it to Wilmington Trust Corporation, c/o
Shareowner ServicesSM, P.O. Box 64873, St. Paul, MN 55164-0873.
IF YOU VOTE BY TELEPHONE OR INTERNET, PLEASE DO NOT MAIL YOUR PROXY CARD
Wilmington Trust Corporation Rodney Square North 1100 North Market Street
Wilmington, DE 19890-0001
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2, AND 3.
1. Election of 01 Charles S. Crompton Jr. 03 Stacey J. Mobley [ ] Vote FOR [ ] Vote WITHHELD
directors: 02 R. Keith Elliott 04 H. Rodney Sharp III all nominees, except from all nominees
as indicated below
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, WRITE
THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.)
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2. Approval of 2004 Employee Stock Purchase Plan. [ ] For [ ] Against [ ] Abstain
3. Approval of 2004 Executive Incentive Plan. [ ] For [ ] Against [ ] Abstain
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ] Indicate changes below:
Date
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Signature(s) in Box
Please sign exactly as your name(s) appears on your
proxy card. If held in joint tenancy, all persons
must sign. Trustees, administrators, etc.,
should include title and authority. Corporations
should provide full name of corporation and title of
authorized officer signing the proxy.