SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Act of 1934
(Amendment No.)
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[ ] Soliciting Material Pursuant to Rule 240.14a-12
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Wilmington Trust Corporation
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(Name of Registrant as specified In Its Charter)
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[WILMINGTON TRUST LOGO]
WILMINGTON TRUST
ANNUAL MEETING -- APRIL 20, 2006
March 10, 2006
Dear Shareholders:
You are invited to attend our 2006 Annual Meeting on Thursday, April 20, 2006,
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 20 for our Annual Meeting.
Sincerely,
/s/ Ted T. Cecala
Ted T. Cecala,
Chairman of the Board and Chief Executive Officer
[WILMINGTON TRUST LOGO]
WILMINGTON TRUST March 10, 2006
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 20, 2006, 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 and
other business that may properly come before the meeting.
Holders of record of our common stock at the close of business on February 21,
2006, 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
2006 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.............................. 7
Committee Membership................................. 8
Audit Matters.......................................... 9
Directors' Compensation................................ 10
Proposal You May Vote On: Election of Directors............. 11
Nominee Biographies.................................. 11
Executive Officers Who are Not Directors............. 12
Ownership of Wilmington Trust Stock.................. 14
Board Compensation Committee Report on Executive
Compensation........................................ 15
Compensation Committee Interlocks and Insider
Participation....................................... 17
Summary Compensation Table........................... 18
Option Grant Table................................... 19
Option Exercises and Year-End Value Table............ 20
Long-Term Incentive Plans -- Awards in Last Fiscal
Year................................................ 21
Change in Control Agreements......................... 21
Retirement Benefits.................................. 22
Stock Performance Graph.............................. 24
Section 16(a) Beneficial Ownership Reporting
Compliance.......................................... 24
Transactions with Management......................... 24
Availability of Form 10-K............................ 25
Independent Registered Public Accounting Firm Services
Policy.................................................... Exhibit A
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 20, 2006. 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 2005, 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 20, 2006.
WHO MAY VOTE
All holders of our common stock as of the close of business on February 21, 2006
(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, 68,061,434 shares of our
common stock were outstanding. A plurality of the shares voted in person or by
proxy is required to elect directors. 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
19, 2006, 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 2007 Annual
Shareholders' Meeting, shareholder proposals must be received in writing by the
Company's Secretary no later than November 9, 2006. 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
2007 Annual Shareholders' Meeting and received by the Company's Secretary by
February 19, 2007. 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 2007 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
1
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 $6,000 plus reasonable expenses. Proxies may be solicited by officers,
directors, and staff members 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.
2
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 director or any member of his or her immediate family is a
current or past executive officer of the Company;
-- The director or any member of his or her immediate family has been
employed by the present or former internal auditor or independent
registered public accounting firm of the Company within the last
three years;
-- The director 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 director is
employed within the last three years;
-- Loans to the director 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");
3
-- The director or any member of his or her immediate family received
more than $100,000 in direct compensation, other than directors'
fees, from the Company within any of the last three years;
-- The Company's total payments to or from a firm that employs the
director 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 to a charitable organization that employs
the director exceeded $200,000 within any of the last three years.
Under these standards, Mss. Burger, Krug, and Whiting and Messrs. Collins,
Crompton, 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. A staff member 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.
4
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 at least one month 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.(R) All such
communications are provided to the Company's General Counsel and the chair of
the Audit Committee; those addressed to individual directors or the Board
generally will be provided directly to those directors, and those involving
human resources-related issues also are provided to the Company's senior
management.
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.
Stock Ownership Guidelines
--------------------------
Each of our directors is required to own 4,000 shares of our stock, and each of
our senior officers is required to own a number of shares of our stock with a
value equal to a multiple of his or her base salary, depending on the officer's
level, within four years after first becoming a director or senior officer.
These Stock Ownership Guidelines are posted on our Website at
www.wilmingtontrust.com under "About Us."
5
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," and is available in print
to any shareholder who requests it. 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," and is available in print to any
shareholder who requests it.
6
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
auditor and independent registered public
accounting firm
-- Reviewing reports of governmental
agencies
All members of the Audit Committee are
independent directors. See the Audit Committee
Report on page 9.
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 15 to 17.
NOMINATING AND CORPORATE
GOVERNANCE COMMITTEE Responsibilities include:
-- 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," and is available in print to any
shareholder who requests it.
7
COMMITTEE MEMBERSHIP
The following chart provides information about Board committee membership and
the number of meetings that each committee held in 2005.
NOMINATING AND
CORPORATE
NAME AUDIT COMPENSATION GOVERNANCE
---- ----- ------------ --------------
Carolyn S. Burger X** X X
Ted T. Cecala
Richard R. Collins X
Charles S. Crompton Jr. X
R. Keith Elliott X* X
Robert V. A. Harra Jr.
Gailen Krug X
Rex L. Mears X X
Hugh E. Miller X X*
Stacey J. Mobley X** X**
David P. Roselle X* X
H. Rodney Sharp III X
Thomas P. Sweeney
Robert W. Tunnell Jr. X
Susan D. Whiting
Number of meetings in 2005 10 2 7
* Chairperson
** Committee member through April 2005, 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 2005, seven meetings of the Board
of Directors were held. No director attended less than 75% of the meetings of
the Board and the committees on which he or she served in 2005.
8
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, 2005:
-- The Audit Committee has reviewed and discussed with management the
Company's fiscal 2005 audited financial statements;
-- The Audit Committee has discussed with the Company's independent registered
public accounting firm, 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 2005 audited
financial statements be included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2005.
Submitted by the Audit Committee of the Company's Board of Directors:
R. Keith Elliott, Chair
Richard R. Collins
Charles S. Crompton Jr.
Rex L. Mears
Robert W. Tunnell Jr.
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 Mr. Elliott qualifies as an audit committee financial expert for
purposes of the Securities and Exchange Commission's rules. However, as those
rules provide, Mr. Elliott is not 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 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 Mr. Elliott as an audit committee
financial expert does not affect the duties, obligations, or liabilities 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 U.S.
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 registered public accounting firm and
not the Audit Committee is 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 Company's independent registered public accounting firm provides audit,
review, and attest services and permissible non-audit services in accordance
with pre-approval policies and procedures the Audit Committee has established or
which the Audit Committee or the Chair of the Audit Committee has pre-approved.
The Company's policies with respect to the approval and pre-approval of services
the independent registered public accounting firm provides are reflected in the
Independent Registered Public Accounting Firm 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
9
statements in 2005 and fees for other services rendered by KPMG in 2005 and
2004:
2005 2004
---------- ----------
Audit fees(1) $2,046,428 $2,436,044
Audit-related fees(2) $ 455,368 $ 359,495
Tax fees(3) $ 29,824 $ 23,013
All other fees $ -- $ --
---------- ----------
(1) Audit fees for 2005 and 2004 included approximately $931,220 and $1,300,000,
respectively, for compliance with Section 404 of the Sarbanes-Oxley Act.
(2) Audit-related fees for 2005 and 2004 consisted principally of: audits of
financial statements of employee benefit plans, common trust funds, and the
Company's broker-dealer and other subsidiaries; and accounting consultation
regarding potential acquisitions.
(3) Tax fees for 2005 and 2004 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.
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 paid its outside directors an annual retainer of $20,000 and a
$2,000 fee for each Board meeting they attended in 2005. It also paid 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 seven Board meetings and 19
committee meetings were held in 2005. The annual retainer will increase to
$30,000 beginning in 2006.
Directors receive the first half of their annual retainer in the Company's
common stock. Each director may elect to receive the second half of the annual
retainer either in cash or the Company's common stock. Directors can elect each
year to defer receipt of the cash and/or stock portion of their directors' fees
until they are no longer a director.
If a director elects to defer receipt of any cash portion 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. If a director elects to defer receipt of any stock portion of his or
her director's fees, the deferred portion will accrue dividend equivalents until
paid.
Under the 2005 Long-Term Incentive Plan, which was approved by shareholders,
directors also are entitled to receive stock options. Twenty-seven thousand five
hundred nonstatutory stock options have been granted to each outside director
except for Mss. Krug and Whiting; nine thousand nonstatutory stock options have
been granted to Ms. Krug, and four thousand nonstatutory stock options have been
granted to Ms. Whiting. Options in respect of 3,017,788 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.
10
PROPOSALS YOU MAY VOTE ON
PROPOSAL ONE -- ELECTION OF DIRECTORS
There are two nominees in the Company's Class of 2009 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 either 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 2009
VOTING IS FOR THIS CLASS
Ted T. Cecala, Age 56
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 and Roxbury Capital
Management, LLC.
David P. Roselle, Age 66
Director since 1991
Mr. Roselle has served as President of the University of Delaware since 1990.
Richard R. Collins, Hugh E. Miller, and Thomas P. Sweeney 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.
The following individuals currently serve as directors in the two other classes.
Their terms will end at the annual shareholders' meetings in 2007 and 2008,
respectively.
CLASS OF 2007 -- ONE YEAR TERM REMAINING
THIS CLASS WAS ELECTED AT THE 2004 ANNUAL SHAREHOLDERS' MEETING
Charles S. Crompton Jr., Age 69
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 63
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 the lead director of Checkpoint Systems, Inc., a director of
QSGI, Inc., and a director of The Institute for Defense Analyses.
11
Gailen Krug, Age 51
Director since 2004
Ms. Krug has served as Chief Investment Officer and Vice President of Waycrosse,
Inc., a private investment company that oversees two globally diversified
portfolios of financial assets, since 1999.
Stacey J. Mobley, Age 60
Director since 1991
Mr. Mobley has served as Senior Vice President, General Counsel, and Chief
Administrative Officer of E.I. du Pont de Nemours and Company since 2000.
H. Rodney Sharp III, Age 70
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.
CLASS OF 2008 -- TWO YEAR TERM REMAINING
THIS CLASS WAS ELECTED AT THE 2005 ANNUAL SHAREHOLDERS' MEETING
Carolyn S. Burger, Age 65
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.
Robert V. A. Harra Jr., Age 56
Director since 1996
Mr. Harra has served as a director, President, and Chief Operating Officer of
the Company since 1996.
Rex L. Mears, Age 64
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 51
Director since 1992
Mr. Tunnell became managing partner of Tunnell Companies, an owner and developer
of real estate, in 1981.
Susan D. Whiting, Age 49
Director since 2005
Ms. Whiting has served as president and chief executive officer of Nielsen Media
Research, Inc. since 2001.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following contains information about the Company's executive officers who
are not directors.
Michael A. DiGregorio, Age 59
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.
William J. Farrell II, Age 47
Executive officer since March 2005
Mr. Farrell became an Executive Vice President of the Company and WTC in 2002.
In 2005, he assumed oversight of WTC's Corporate Client Services Department. He
previously oversaw all areas of WTC's Trust Operation and Systems Development
and Information Technology Departments since 1998.
12
David R. Gibson, Age 48
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.
Rodney P. Wood, Age 45
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.
13
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 18, and by all directors and executive officers as a group as of
December 31, 2005.
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 5,783 0 11,500 17,283
T. T. Cecala 308,704 0 545,000 853,704 1.25%
R. R. Collins 7,447 5,286 11,500 24,233
C. S. Crompton Jr. 7,718 9,000 11,500 28,218 9,285
R. K. Elliott 5,673 0 11,500 17,173 2,931
W. J. Farrell 68,427 0 140,690 209,117
D. R. Gibson 50,679 92 117,000 167,771
R.V.A. Harra Jr. 307,980 566 301,348 609,894
G. Krug 277 500 1,000 1,777
R. L. Mears 482 10,345 11,500 22,327
H. E. Miller 3,771 11,600 11,500 26,871 9,899
S. J. Mobley 4,981 0 11,500 16,481 5,044
D. P. Roselle 9,106 0 11,500 20,606
H. R. Sharp III 6,548 2,111,680(3) 11,500 2,129,728 3.136%
T. P. Sweeney 14,649 6,006 11,500 32,155 8,415
R. W. Tunnell Jr. 73,105 332,556 11,500 417,161
S. D. Whiting 0 0 0 0
R. P. Wood 16,274 3,858 134,666 154,798
Directors, Nominees,
and Executive
Officers as a Group
(20 persons) 901,217 2,493,289 1,409,378 4,803,884 7.074%
======= ========= ========= ========= =====
(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 he may be deemed in his capacity as trustee of a non-profit entity to
have voting and/or investment power, directly or indirectly, of 2,111,680 shares
that entity holds, Mr. Sharp is listed as the beneficial owner of those shares.
(4) This column includes shares which directors or executive officers have the
right to acquire within 60 days after December 31, 2005.
14
(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 dividend
equivalents 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.
BOARD COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
General
-------
We award compensation to executive officers to assure that we 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 compare the
Company's growth in net income to the corresponding performance of those
institutions, the performance of the executive's area of responsibility against
business plan objectives that have been established for that area, and his or
her leadership and contribution to the Company's financial goals.
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
restricted stock and stock options. Since the ultimate value of the stock made
available through these awards depends on the Company's success, restricted
stock and 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 the Company's long-term incentive plans. 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.
Base Salaries
-------------
We determine base salaries for each executive officer by evaluating his or her
responsibilities and performance. We also consider the competitive market for
executive talent, and compare salaries we pay our executive officers to those
paid to comparable 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
performance.
Executive Incentive Plan
------------------------
We adopted and the Company's shareholders approved our 2004 Executive Incentive
Plan (the "Incentive Plan") 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 officers the Compensation Committee designates from time to time
participate in the Incentive Plan. For 2005, six officers participated in the
Plan.
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 income, net income, growth in income or net income,
earnings per share, growth in earnings per share, cash flow measures,
15
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,
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 third
among the performance of a company-constructed 12 member banking-oriented peer
group that includes itself as well as 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,
Valley National Bancorp, and Zions Bancorporation. The percentage growth in net
income of the Company's fee-based businesses ranked third among the performance
of a company-constructed eight member peer group of fee-oriented banks that
includes itself as well as 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").
The available pool for bonus payments under the Incentive Plan was determined by
a formula 50% of which was based on the Company's performance against its plan
in the percentage growth in net income and 50% of which was based on the
Company's performance against the Peer Group in the percentage growth in net
income. For 2005, payments under this plan to the six officers who participated
in the plan aggregated $3,224,798, compared to $1,470,035 for the seven officers
who participated in the plan in 2004.
A portion of awards granted under the Incentive Plan typically is made in the
form of restricted stock. Restricted stock awards generally vest over three
years at the rate of one-third of the award each year, and are subject to
forfeiture prior to vesting. Any value that accrues to our officers from
restricted stock is based entirely on our stock performance, and bears a direct
relationship to the value our shareholders realize.
Long-Term Incentive Plan
------------------------
Under the Company's 2005 Long-Term Incentive Plan, which shareholders have
approved, cash-based and stock-based awards may be made. Stock options granted
under that plan typically vest in 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. We do not employ any
formula in awarding options. All stock options are granted with exercise prices
equal to the last sale price of our stock on the date of grant. Accordingly, any
value that accrues to our officers from stock options is based entirely on our
stock performance, and bears a direct relationship to the value our shareholders
realize.
Compensation of Chief Executive Officer
---------------------------------------
In establishing Mr. Cecala's compensation, the Compensation Committee considered
the same basic factors as those described above for all members of 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 institutions with comparable characteristics and financial
performance; and
-- The development under the Company's strategic planning process to expand
significantly and profitably the geographic outreach of its fee-based
businesses.
16
Mr. Cecala's bonus for 2005 was determined by a formula 50% of which was based
on the Company's performance against its business plan in the percentage growth
in net income and 50% of which was based on the Company's performance against
the Peer Group in the percentage growth in net income.
Submitted by the Compensation Committee of the Company's Board of Directors:
David P. Roselle, Chair
Carolyn S. Burger
Rex L. Mears
Hugh E. Miller
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 $1 million unless
that compensation is "performance-based." Compensation attributable to the
Company's stock options is performance-based, and the Incentive Plan is designed
so that compensation attributable to awards under that plan can qualify as
"performance-based."
The Compensation Committee believes it is unlikely that the Company paid any
amounts in respect of 2005 that will result in our loss of a federal income tax
deduction under Section 162(m).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee's members are David P. Roselle (Chair), Carolyn S.
Burger, Rex L. Mears, Hugh E. Miller, and H. Rodney Sharp III. No member of the
Compensation Committee is a current or past officer or employee of the Company.
No executive officer of the Company serves as a member of the compensation
committee or Board of Directors of any other company whose members include an
individual who also serves on our Board of Directors or the Compensation
Committee.
Ms. Burger and Mr. Sharp are indebted to WTC on the same terms and conditions as
those for comparable transactions with others.
17
SUMMARY COMPENSATION TABLE
The following table shows information about compensation the Company awarded
over the last three years to its chief executive officer and its four other most
highly compensated executive officers (the "Named Executive Officers").
Long-Term
Annual Compensation Compensation Awards
-----------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Restricted
Other Annual Stock Securities LTIP
Name and Salary Bonus Compensation Awards Underlying Payouts All Other
Principal Position Year ($) ($)(1) ($) ($)(1)(2) Options ($) Compensation(3)
------------------ ---- ------ ------ ------------ ---------- ---------- ------- ---------------
Ted T. Cecala, 2005 $ 608,923 $ 892,296 -- $256,535 90,000 -- $ 8,916
Chairman of the Board and 2004 $ 588,154 $ 467,301 -- $134,349 90,000 -- $ 8,340
Chief Executive Officer 2003 $ 567,769 $ 480,036 -- $138,010 90,000 -- $ 8,280
Robert V.A. Harra, Jr., 2005 $ 438,846 $ 557,248 -- $160,209 40,000 -- $ 8,916
President and Chief 2004 $ 423,731 $ 367,698 -- $105,713 40,000 -- $ 8,430
Operating Officer 2003 $ 410,000 $ 314,162 -- $ 90,321 40,000 -- $ 6,307
Rodney P. Wood, 2005 $ 349,308 $ 433,668 -- $124,679 30,000 -- $ 8,537
Executive Vice 2004 $ 337,115 $ 291,805 -- $ 83,894 30,000 -- $ 8,099
President 2003 $ 317,308 $ 320,182 -- $ 92,052 30,000 -- $ 7,410
William J. Farrell II, 2005 $ 265,230 $ 277,020 -- $ 79,643 30,000 -- $ 7,890
Executive Vice 2004 $ 237,269 $ 120,063 -- $ 34,510 20,000 -- $ 7,471
President 2003 $ 228,461 $ 109,099 -- $ 31,356 20,000 -- $ 7,140
David R. Gibson, 2005 $ 231,768 $ 213,894 -- $ 61,495 20,000 -- $ 7,803
Executive Vice President 2004 $ 223,269 $ 129,007 -- $ 37,089 20,000 -- $ 7,608
and Chief Financial Officer 2003 $ 214,365 $ 118,221 -- $ 33,988 20,000 -- $ 7,303
Total Salary, Bonus, and
All Other Compensation 2005 $1,894,075 $2,374,126 $42,062
for Named Executive 2004 $1,810,346 $1,428,035 $40,117
Officers(4) 2003 $1,737,519 $1,366,877 $36,440
(1) Represents awards made under the Incentive Plan (described on pages 15 and
16 above) in respect of services performed during the year.
(2) These restricted shares were issued in lieu of 20% of the cash bonus
otherwise payable to the Named Executive Officers. Since it is in the form of
restricted stock, this portion of each executive's bonus is subject to
forfeiture prior to vesting.
As required by the Securities and Exchange Commission's rules, the dollar
amounts in this column are based on the closing price of our stock on the date
of the grant while the dollar amounts in this footnote are based on the closing
price of our stock on December 31, 2005. At December 31, 2005, Mr. Cecala owned
6,447 shares of restricted stock with a value of $250,852.77, Mr. Harra owned
4,744 shares of restricted stock with a value of $184,589.04, Mr. Wood owned
4,131 shares of restricted stock with a value of $160,737.21, Mr. Farrell owned
1,582 shares of restricted stock with a value of $61,555.62, and Mr. Gibson
owned 1,706 shares of restricted stock with a value of $66,380.46. One-third of
these shares vests each year following the grant, and dividends are payable on
the shares prior to vesting.
(3) Represents: (a) the Company's contributions to its 401-k Thrift Savings Plan
for Mr. Cecala of $6,300 in 2005, $6,060 in 2004, and $6,000 in 2003; Mr. Harra
of $6,300 in 2005, $6,150 in 2004, and $4,027 in 2003; Mr. Wood of $6,300 in
2005, $6,150 in 2004, and $6,000 in 2003; Mr. Farrell of $6,085 in 2005, $6,150
in 2004, and $6,000 in 2003; and Mr. Gibson of $6,067 in 2005, $6,150 in 2004,
and $6,000 in 2003; and (b) premiums the Company paid for term life insurance
for each of Messrs. Cecala and Harra of $2,616 in 2005 and $2,280 in each of
2004 and 2003; Mr. Wood of $2,237 in 2005, $1,949 in
18
2004, and $1,410 in 2003; Mr. Farrell of $1,805 in 2005, $1,321 in 2004, and
$1,140 in 2003; and Mr. Gibson of $1,736 in 2005, $1,458 in 2004, and $1,303 in
2003.
(4) The numbers in this line for 2003 and 2004 include salary, bonus, and other
compensation paid to Howard K. Cohen, who was an executive officer in those
years, but do not include those for Mr. Farrell.
No named Executive Officer received perquisites in 2005 valued at more than
$11,000.
OPTION GRANT TABLE
The following table presents additional information about the option awards in
the Summary Compensation Table for 2005. (1)
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option
Individual Grants Term(2)
--------------------------- ------------------------------------
(a) (b) (c) (d) (e) (f) (g)
Number of Percent of
Securities Total Options
Underlying Granted To All Exercise or
Options Employees in Base Price Expiration
Name Granted Fiscal Year ($/Share) Date 5%($) 10%($)
---- ---------- -------------- ----------- ---------- ----- ------
Ted T. Cecala 90,000 9.7% $33.90 2/20/2015 $1,918,758 $4,862,508
Robert V. A. Harra 40,000 4.3% $33.90 2/20/2015 $ 852,781 $2,161,115
Rodney P. Wood 30,000 3.2% $33.90 2/20/2015 $ 639,586 $1,620,836
William J. Farrell II 30,000 3.2% $33.90 2/20/2015 $ 639,586 $1,620,836
David R. Gibson 20,000 2.2% $33.90 2/20/2015 $ 426,391 $1,080,557
(1) These options vest three years after grant, expire ten years after
grant, and may be terminated earlier (a) at the termination of the officer's
employment if his or her employment ceases for any reason other than retirement,
death, or disability or (b) upon the earlier of (1) the end of the option's term
or (2) three years after the officer's death, retirement, or disability.
(2) These values are computed on a pre-tax basis.
19
OPTION EXERCISES AND YEAR-END VALUE TABLE
The table below presents information about (1) options exercised during 2005 by
the Named Executive Officers and (2) the amount and value of unexercised options
as of December 31, 2005.
Aggregated Option Exercises in Last
Fiscal Year and Fiscal Year-End Option Value
(a) (b) (c) (d) (e)
Shares Shares Underlying Value of Unexercised
Acquired Unexercised Options at In-the-Money Options at
On Exercise Value Realized Fiscal Year End(#) Fiscal Year End($)(2)
Name (Number)(1) ($)(1) Exercisable/Unexercisable Exercisable/Unexercisable
---- ----------- -------------- -------------------------- --------------------------
Ted T. Cecala 12,380 $271,184 455,000/270,000 $5,788,525/$1,611,000
Robert V. A. Harra 20,300 $444,672 261,348/120,000 $ 3,608,732/$716,000
Rodney P. Wood -- -- 104,666/90,000 $ 1,043,001/$537,000
William J. Farrell II 6,380 $143,072 120,690/70,000 $ 1,294,827/$408,100
David R. Gibson 7,070 $101,397 97,000/60,000 $ 887,970/$358,000
(1) Value realized reflects the difference between the market value of the
Company's stock on the date the option was exercised and the exercise price,
multiplied by the number of shares acquired upon exercise.
(2) These values are computed on a pre-tax basis, and reflect the
difference between the last sale price of the Company's stock on December 31,
2005, and the exercise price of each option the Named Executive Officer holds,
or the total amount by which the officer's options were "in the money" at that
date.
20
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
The following table presents additional information about the restricted stock
granted to the Named Executive Officers in 2005 reflected in the Summary
Compensation Table. This restricted stock was received in lieu of 20% of the
cash bonus otherwise payable to the Named Executive Officers in 2005. Since it
is in the form of restricted stock, this portion of each executive's bonus is
subject to forfeiture prior to vesting.
Estimated Future Payouts under
Non-Stock Price-Based Plans
-------------------------------
(a) (b) (d) (e) (f)
Number of (c)
Shares, Units, Performance or Other
or Other Period Until Maturation Threshold Target Maximum
Name Rights(#) or Payout(1) ($ or #) ($ or #) ($ or #)
----------------------------------------------------------------------------------------------------------
Ted T. Cecala 3,963 2/23/2006 N/A N/A N/A
2/23/2007
2/23/2008
Robert V. A. Harra Jr. 3,118 2/23/2006 N/A N/A N/A
2/23/2007
2/23/2008
Rodney P. Wood 2,474 2/23/2006 N/A N/A N/A
2/23/2007
2/23/2008
William J. Farrell II 1,018 2/23/2006 N/A N/A N/A
2/23/2007
2/23/2008
David R. Gibson 1,094 2/23/2006 N/A N/A N/A
2/23/2007
2/23/2008
CHANGE IN CONTROL AGREEMENTS
The Company and WTC have entered into change in control agreements with the
Named Executive Officers and 19 other 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 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
21
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) Annual Retirement Benefits with Years of Service Indicated on
Average December 31, 2005(1)
Annual -----------------------------------------------------------------------
Earnings 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
-------- -------- -------- ---------- ---------- ---------- ----------
$ 200,000 $ 60,000 $ 80,000 $ 100,000 $ 120,000 $ 120,000 $ 120,000
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
1,800,000 540,000 720,000 900,000 1,080,000 1,080,000 1,080,000
2,000,000 600,000 800,000 1,000,000 1,200,000 1,200,000 1,200,000
2,200,000 660,000 880,000 1,100,000 1,320,000 1,320,000 1,320,000
----------------------------------
(1) The table above reflects annual retirement benefits with years of
service indicated on December 31, 2005. 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, 2005.
The Company provides retirement benefits for staff members, 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 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.
For purposes of determining amounts to which participants are entitled under the
Pension Plan,
22
for years before 1994, earnings include base salary and amounts paid under our
Profit-Sharing Bonus Plan (the "Profit-Sharing Bonus Plan"), but do not include
incentive payments. The Profit-Sharing Bonus Plan was terminated in 2003. For
years after 1993, earnings also include incentive payments. 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 $210,000 through December 31, 2005.
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 21 and 22.
The estimated years of credited service under the Pension Plan and SERP through
December 31, 2005, for each of the Named Executive Officers are: Mr.
Cecala - 26.2 years; Mr. Harra - 32.6 years; Mr. Wood - 6.5 years; Mr. Farrell -
29.6 years; and Mr. Gibson - 22.7 years.
23
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 50 Bank Index.(2)
[Stock Performance Graph]
12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05
Wilmington Trust Corporation $ 100 $ 105.30 $ 108.80 $ 128.00 $ 132.50 $ 147.30
Keefe, Bruyette & Woods, 50 Bank Index $ 100 $ 95.90 $ 89.10 $ 119.50 $ 131.50 $ 133.00
S&P 500 Index $ 100 $ 88.10 $ 68.70 $ 88.40 $ 98.00 $ 102.80
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, 2000. 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,
certain officers, and 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 required filings were made on a
timely basis, except that a stock option grant to Gerald F. Sopp inadvertently
was reported two days after the due date, Ms. Whiting's Form 3 was filed one day
after the due date, and gifts to each of Mr. Tunnell's four children were
reported late.
TRANSACTIONS WITH MANAGEMENT
Certain of the Company's subsidiaries have banking transactions in the ordinary
course of business with directors, officers, and their associates on the same
terms, including interest rates and collateral on loans, as those prevailing at
the time for comparable transactions with others and that do not involve more
than the normal risk
24
of collectibility or present other unfavorable features.
During 2005, the firm of Richards, Layton & Finger, P.A., of which Thomas P.
Sweeney, a director of the Company, is a member, rendered legal services to the
Company.
AVAILABILITY OF FORM 10-K
THE COMPANY WILL FILE WITH THE SEC AN ANNUAL REPORT ON FORM 10-K FOR 2005. 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.
25
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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 registered public accounting
firm (the "Auditor"). In light of recent public concerns regarding non-audit
services provided to companies by their 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 Auditor.
The Audit Committee has agreed that the following services may 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; and
8. Consents and comfort letters required for the Company's filings under the
1933 Securities Act and the 1934 Securities and Exchange Act.
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.
EXHIBIT A
(WILMINGTON TRUST LOGO) WILMINGTON TRUST CORPORATION
WILMINGTON TRUST ANNUAL SHAREHOLDERS' MEETING
THURSDAY, APRIL 20, 2006
10:00 A.M.
WILMINGTON TRUST PLAZA
MEZZANINE LEVEL
301 WEST ELEVENTH STREET
WILMINGTON, DELAWARE
WILMINGTON TRUST CORPORATION
RODNEY SQUARE NORTH
1100 NORTH MARKET STREET
(WILMINGTON TRUST LOGO) WILMINGTON, DE 19890-0001 PROXY
WILMINGTON TRUST
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON APRIL 20, 2006.
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" ITEM 1.
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, acting in the absence of the other, with full power of substitution, to
vote your shares on the matter 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 20, 2006.
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 item 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 19, 2006.
- Please have your proxy card and the last four digits of your Social
Security Number or Tax Identification 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 19, 2006.
- Please have your proxy card and the last four digits of your Social
Security Number or Tax Identification 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
Services(SM), 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
Please detach here
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1.
1. Election of directors: 01 Ted T. Cecala [ ] Vote FOR [ ] Vote WITHHELD
02 David P. Roselle 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.) _____________________________________
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ] Indicate changes below: Date
--------------------
-------------------------
Signature(s) in Box
Please sign exactly as
your name(s) 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.