WL Wilmington Trust Corp. (DE)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant To Section 14(a) of the Securities Exchange Act of 1934 (Amendment No.)
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Wilmington Trust Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person (s) Filing Proxy Statement if other than the Registrant)

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Annual Meeting — April 22, 2009

 

March 10, 2009

 

Dear Shareholders:

 

You are invited to attend our 2009 Annual Meeting on Wednesday, April 22, 2009, 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 22 for our Annual Meeting.

 

Sincerely,

 

 

Ted T. Cecala,

Chairman of the Board and Chief Executive Officer

March 10, 2009

 

To the Holders of Common Stock of

Wilmington Trust Corporation

 

NOTICE OF ANNUAL MEETING

 

The Annual Meeting of Shareholders of Wilmington Trust Corporation will be held on Thursday, April 22, 2009, 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 three directors, the approval of our 2009 Executive Incentive Plan, 2009 Long-Term Incentive Plan, and executive compensation, and other business that may properly come before the meeting.

 

Holders of record of our common stock at the close of business on February 23, 2009, 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.

 

Michael A. DiGregorio,

Secretary

2009 ANNUAL SHAREHOLDERS’ MEETING

 

PROXY STATEMENT

 

 

 

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 22, 2009. 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 2008, 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, 2009.

 

 

Who May Vote

 

All holders of our common stock as of the close of business on February 23, 2009 (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, 69,112,585 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 outstanding shares is required to approve the other proposals 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:

 

 

You also can change or revoke your proxy at any time before 12:00 p.m., April 21, 2009, 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 2010 Annual Shareholders’ Meeting, shareholder proposals must be received in writing by the Company’s Secretary no later than November 10, 2009. 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 2010 Annual Shareholders’ Meeting and received by the Company’s Secretary by February 22, 2010. 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 2010 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 $7,500 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.

 

 

Board of Directors

 

Summary of Corporate Governance Principles

	•	The director or any member of his or her immediate family is a current or past executive officer of the Company;
	•	(a) The director is a current employee of the independent registered public accounting firm of the Company; (b) the director or any member of his or her immediate family is a current partner of that firm; (c) any immediate family member of the director is a current employee of that firm and personally worked on the Company’s audit; or (d) the director or an immediate family member was within the last three years a partner or employee of that firm and personally worked on the Company’s audit within that time;
	•	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”);
	•	The director or any member of his or her immediate family received more than $120,000 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 1% 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.

Committees of the Board

 

 

Committee Membership

 

The following chart provides information about Board committee membership and the number of meetings that each committee held in 2008.

 

 

*  Chairperson

 

**  Committee member through April 2008, 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 2008, nine meetings of the Board of Directors were held. Each director attended at least 80% of the meetings of the Board and its committees on which he or she served in 2008.

 

 

 

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, 2008:

 

 

Submitted by the Audit Committee of the Company’s Board of Directors:

 

Carolyn S. Burger
Donald E. Foley, Chair
Gailen Krug
David P. Roselle
Oliver R. Sockwell

 

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. Foley qualifies as an audit committee financial expert for purposes of the Securities and Exchange Commission’s rules. However, as those rules provide, Mr. Foley 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. Foley 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 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 registered public accounting firm provides, or those services are performed in accordance with pre-approval policies and procedures the Audit Committee has established. 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 Exhibit A.

Audit, Audit-Related, Tax, and All Other Fees

 

The following table sets forth the aggregate fees for professional services rendered by KPMG to the Company for calendar years 2008 and 2007.

 

 

 

 

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.

 

 

There are three nominees in the Company’s Class of 2012 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.

 

 

Ted T. Cecala, Age 59

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, a member of the Board of Trustees of WT Mutual Fund, and a member of the Board of Directors of the Federal Reserve Bank of Philadelphia.

 

Thomas L. du Pont, Age 60

Director since 2006

 

Mr. du Pont is Chairman and Publisher of DuPont Publishing, Inc., a fully integrated publisher of specialty marketplace magazines featuring luxury lifestyle products for sale, which was founded in 1984.

 

Donald E. Foley, Age 57

Director since 2006

 

Mr. Foley has been Senior Vice President, Treasurer, and Director of Taxes at ITT Corporation, a diversified manufacturer of electrical, defense, fluid technologies, and other industrial products, since 2003. He has served as Vice President, Treasurer, and Director of Taxes of that company since 2000.

 

David P. Roselle 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 2010 and 2011, respectively.

 

Class of 2010 — One Year Term Remaining
This Class was Elected at the 2007 Annual Shareholders’ Meeting

 

R. Keith Elliott, Age 66
Director since 1997

 

Mr. Elliott is retired Chairman and Chief Executive Officer of Hercules Incorporated. From 1991 through April 2000, he served that 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.

 

Gailen Krug, Age 54

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 63

Director since 1991

 

Mr. Mobley has served as senior counsel to Dickstein Shapiro LLP since 2008. He previously has served as Senior Vice President, General Counsel, and Chief Administrative Officer of E.I. du Pont de Nemours and Company from 2000 to 2008. He is a director of International Paper Co.

 

Michele M. Rollins, Age 63

Director since 2007

 

Ms. Rollins has served as Chairman of Rollins Jamaica, Ltd., the holding company of Rose Hall, Ltd. (“Rose Hall”), since 2000. Rose Hall owns a variety of hotel, retail, and housing developments and golf courses in Jamaica.

 

Oliver R. Sockwell, Age 64

Director since 2007

 

Mr. Sockwell most recently served as Executive-in-Residence at the Columbia University Graduate School of Business from 1998 to 2003. Previously, he served as President and Chief Executive Officer of the Construction Loan Insurance Corporation and its subsidiary Connie Lee Insurance Company, from 1987 until 1997. He also is a director of R. R. Donnelley & Sons Company and Liz Claiborne, Inc.

 

Class of 2011
This Class was Elected at the 2008 Annual Shareholders’ Meeting

 

Carolyn S. Burger, Age 68

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 59

Director since 1996

 

Mr. Harra has served as a director, President, and Chief Operating Officer of the Company since 1996.

 

Rex L. Mears, Age 67

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 54

Director since 1992

 

Mr. Tunnell became managing partner of Tunnell Companies, an owner and developer of real estate, in 1981.

 

Susan D. Whiting, Age 52

Director since 2005

 

Ms. Whiting has served as Executive Vice President of the Nielsen Company and Chairman of Nielsen Media Research, Inc. since 2006. She previously served as President of Nielsen Media Research, Inc. from 2001 to 2006.

 

 

The following contains information about the Company’s executive officers who are not directors.

 

Robert M. Balentine, Age 51

Executive officer since 2008

 

Mr. Balentine became an Executive Vice President of the Company in January 2008. He has also served as Chief Executive Officer of Wilmington Trust Investment Management, LLC (“WTIM”) since 2006. From 2005 to 2006, he served as President and Chief Executive Officer of WTIM; from 2002 to 2005, he served as Chairman of the Board, Chief Executive Officer, and Treasurer of Balentine & Company, LLC, WTIM’s predecessor.

 

Michael A. DiGregorio, Age 62

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.

 

William J. Farrell II, Age 50

Executive officer since 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.

 

David R. Gibson, Age 51

Executive officer since 1992

 

Mr. Gibson became an Executive Vice President and Chief Financial Officer of the Company and of WTC in 2002.

 

Mark A. Graham, Age 47

Executive officer since January 2008

 

Mr. Graham became an Executive Vice President of the Company in January 2008. He previously served as President — Mid Atlantic for Wilmington Trust FSB from 2007 to 2008 and as President of Wilmington Trust of Pennsylvania from 2001 to 2007.

 

Kevyn N. Rakowski, Age 55

Executive officer since 2006

 

Ms. Rakowski became a Senior Vice President and Controller of the Company in 2006. She previously served as Vice President and Controller of Marlin Leasing Corporation from June 2004 to April 2006 and as Director of Accounting and Reporting for Infrasource, Inc. from 2000 to 2004.

 

 

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 23, and by all directors and executive officers as a group as of January 31, 2009.

 

Under the SEC’s rules, “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.

 

 

 

(1) This column includes stock held by directors and executive officers or certain members of their immediate families.

 

(2) Thirty-one thousand four hundred forty-six of these shares are pledged.

 

(3) Forty-nine thousand six hundred seventy-eight of these shares are pledged.

 

(4) One hundred forty-one thousand one hundred twenty-one of these shares are pledged.

 

(5) Seventy-one thousand nine-hundred forty-five of these shares are pledged.

 

(6) This column includes stock for which directors or executive officers are deemed to have sole or shared voting power.

 

(7) This column includes shares which directors or executive officers have the right to acquire within 60 days after December 31, 2008.

 

(8) Four hundred seventy-four thousand one hundred ninety-six of these shares are pledged.

 

(9) One hundred thirty-four thousand four hundred eighty-eight of these shares are pledged.

 

(10) 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.

 

(11) These restricted stock units were acquired in lieu of stock which the director was entitled to receive for his annual retainer. They earn dividend equivalents, and can be redeemed only for stock following termination of the individual’s service as a director.

 

In a Schedule 13G filed with the Securities and Exchange Commission, Barclays Global Investors (Deutschland) AG (“Barclays”) reported that, as of December 31, 2008, certain of its subsidiaries held shares of our common stock as follows:

 

 

 

 

Overview

 

Our overall corporate strategies are to invest in businesses that have the most potential for long-term growth or high operating profit margins, be the market leader in each of our businesses, and increase profitability without compromising our overall risk profile.

 

We describe our compensation program below in two sections. The first, captioned “General” below, describes our general and historical compensation philosophy and programs. Under the second section, captioned “CPP,” we summarize additional components of our compensation programs under the United States Department of the Treasury’s (the “Treasury’s”) Capital Purchase Program (the “CPP”), some of which became effective on February 17, 2009, and effected compensation awarded in 2009 for performance in 2008.

 

General

 

Total Compensation Philosophy

 

To accomplish our strategies, we award compensation to executive officers to help assure that we attract, motivate, and retain qualified executives and provide them the opportunity to be rewarded for superior performance. The objectives for our compensation practices include:

 

 

Compensation awarded to our executive officers for 2008 reflected the downturn in the economy in general and results for the financial services industry in particular.

 

We believe our total compensation philosophy best serves to further our overall corporate objectives and rewards our executive officers appropriately.

Elements of Compensation

 

We seek to attract executive talent and motivate and retain executive officers by offering a balanced mix of pay that incorporates the following key components:

 

 

Certain limitations on these benefits during the period the U.S. Treasury owns any security we issued under the CPP and are summarized under the section captioned “CPP” below. We typically target total cash compensation at roughly an even split between an executive officer’s base salary and potential target cash bonus, but provide an opportunity for our executives to earn even larger bonuses for performance that exceeds expectations. We do not target any specific relation between an executive’s cash and non-cash compensation, but executives have the potential to earn a substantial portion of their total compensation from equity compensation.

 

Our executive compensation program focuses our executive officers on enhancing shareholder value through their successful long-term strategic management. In addition to our cash bonus program, we seek to do this by providing executive officers with ownership interests in our Company in the form of restricted stock and stock options. Since the ultimate value of the stock made available through these awards depends on our company’s success, restricted stock and stock options provide executive officers continuing incentives to increase stockholder value after the award is granted. Restricted stock provides compensation to the executive if the Company’s stock maintains its value, and increased compensation if the value of the Company’s stock increases. By contrast, an executive obtains compensation from stock options only if the value of the Company’s stock increases from the date of grant. We believe this mix of equity compensation awards helps us achieve an appropriate balance between short- and long-term performance and value objectives.

 

Our equity compensation awards are also structured to retain our executives. Restricted stock awards typically vest over three or four years after grant, thus facilitating retention of the executive officer. Stock option awards typically vest only after three years. Certain additional limitations on long-term compensation for our Named Executive Officers are summarized in the section captioned “CPP” below.

 

Each of our executive officers is required to own a number of shares of our stock with a value equal to a multiple of four to six times his or her base salary, depending on the officer’s level, within four years after first becoming an executive officer. Other senior officers are required to own a number of shares of our stock with a value equal to three times their base salaries, while each of our directors is required to own 4,000 shares of our stock. The following table reflects the stock ownership requirements and stock ownership as of January 31, 2009, of our Named Executive Officers identified on page 23 below:

 

 

Each executive officer’s total compensation package further includes benefits under our broad-based pension plan and a supplemental executive retirement plan, as well as under change-in-control agreements. These benefits foster the retention and stability of our executive management team. The supplemental plan is designed in part to provide executive officers with benefits to which they would otherwise be entitled under the broad-based pension plan, but which are limited under the terms of that plan by legislative and regulatory restrictions. Benefits under the supplemental plan are not currently funded, generally vest over a period of 15 years, and may be terminated upon a termination for cause or for competing with Wilmington Trust following termination of employment.

 

In addition to our pension and supplemental retirement plans, we provide change-in-control severance benefits and protections under separate

agreements into which we have entered with our executive and certain other officers. These change-in-control agreements require a “double trigger,” meaning that our executive officers are not eligible to receive any payments under the agreements unless there is both a change-in-control and, within two years of the change-in-control, an actual or constructive termination of the executive officer’s employment by the Company. We do not have written employment agreements with our executive officers.

 

Early in each year, the Compensation Committee approves executive officers’ base salaries, bonus targets and performance factors for bonuses, and long-term equity awards for the current year, as well as bonuses earned for the prior year. In reviewing the performance of the Company’s executive officers other than Mr. Cecala, the Compensation Committee considers his recommendations regarding the bonus targets and performance factors against which each executive officer other than himself should be evaluated, his views of their performance with respect to each element of compensation, and his views with respect to the amount of each element of compensation to be paid to each executive officer other than himself. Mr. Cecala attends the meetings of the Compensation Committee except when the Committee is determining his compensation or meeting in executive session. The Compensation Committee can modify a recommended amount at its discretion. The total compensation for each of our Named Executive Officers for 2008 declined from 2007.

 

The Compensation Committee believes that the compensation awarded to Mr. Cecala is commensurate with the compensation awarded to our other named executive officers, taking into consideration the level of his responsibilities as the Chairman of the Board and Chief Executive Officer of our Company. The Compensation Committee’s goals in setting Mr. Cecala’s compensation are similar to its goals for compensation to our executive officers generally: to provide compensation that is competitive with the compensation practices of those peer companies with which we compete for talent; put a significant portion of compensation at risk; align his interests with those of our shareholders through long-term incentives; and provide incentives that promote his retention.

 

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, engaging a compensation consultant to conduct a market review of compensation paid to executives at comparable financial institutions every two years. For 2009, we engaged McLagen Partners, as compensation consultants (“McLagan”), to compare base salaries, cash compensation, long-term compensation, and total compensation we pay our senior officers to those paid to senior officers in comparable positions at institutions with comparable businesses identified as the Compensation Peer Group on Exhibit B to this proxy statement. McLagan provides unrelated consulting services to Wilmington Trust Investment Management, LLC (“WTIM”). Our Human Resources Department also monitors nationally published compensation surveys on a continuous basis, and would recommend review at an intermediate time if national trends indicated a need to reevaluate our competitive positioning.

 

We typically set executive officers’ base salaries at or near the median of base salaries awarded at those institutions with comparable businesses. This is consistent with our Company’s practice in paying our staff members generally. We believe this target best enables us to attract and retain executive talent consistent with our shareholders’ interests. We typically adjust executive officers’ salaries annually to take into account our company’s and the individual’s performance, as well as any changes in the executive officer’s responsibilities during the most recent year. We also consider the financial results of the business line or area over which the executive officer has responsibility and his or her leadership and contribution to our company’s performance. In establishing increases to base salaries for our Named Executive Officers for 2008, the Compensation Committee considered the same performance factors it considered in awarding cash bonuses and restricted stock. The Compensation Committee considers the recommendations of Mr. Cecala in awarding any increases in base salary other than his. In February 2008, the base salary for Mr. Cecala was increased by $75,000; the base salary for Mr. Gibson was increased by $15,000; the base salary for Mr. Harra was increased by $20,000; the base salary for Mr. Balentine was increased by $40,000; and the base salary for Mr. Farrell was

increased by $25,000. There will not be any base salary adjustments for executive officers for 2009.

 

Bonuses

 

We provide our executive officers incentives in the form of cash and stock awards to recognize and reward the achievement of individual and corporate performance goals. No bonus is guaranteed but, if earned, executive officers can earn bonuses under this plan ranging from 0% to up to 200% of their base salaries. At the beginning of each year, the Compensation Committee approves potential bonus amounts expressed as a percentage of base salary for each executive officer. For 2008, the bonus target for Messrs. Gibson and Harra was 100% of base salary, for Mr. Farrell it was 110% of base salary, for Mr. Balentine it was 140% of base salary, and for Mr. Cecala it was 200% of base salary. Officers can earn additional bonus amounts for performance we deem outstanding.

 

We multiply each executive officer’s anticipated bonus potential by a factor determined (1) 25% based upon our average return on equity over the most recent three years against the average return on equity over that period of financial institutions with asset sizes ranging from one-half to twice our asset size at December 31, 2008, identified on Exhibit B to this proxy statement (the “Performance Peer Group”), (2) 25% based upon our average return on assets over the most recent three years against the average return on assets over that period of the Performance Peer Group, (3) 25% based upon the growth in our average earnings per share over the most recent three years against the growth in average earnings per share over that period of the Performance Peer Group, and (4) 25% based upon our net income against our business plan (the “Corporate Performance Factor”). For the three years ending with 2008, our average return on equity ranked us at the 52nd percentile among the Performance Peer Group, our average return on assets ranked us at the 55th percentile among the Performance Peer Group, and the percentage growth in our average earnings per share ranked us at the 32nd percentile among the Performance Peer Group.

 

With respect to the relative performance metrics (the first three metrics identified in the preceding paragraph), target performance is achieved when each of our average return on equity, average return on assets, and the annual growth in our average earnings per share for the most recent three years is equal to or greater than the median average return on equity, average return on assets, and growth in the average earnings per share, for the most recent three years of the members of the Performance Peer Group. For the three years ending with 2008, the three-year median average return on equity was 9.29%, the three-year median average return on assets was .92%, and the three-year median earnings per share growth was an average loss per share of 16.84%.

 

With respect to the absolute performance metric (the fourth metric identified in the second preceding paragraph), target performance is achieved when we reach the annual net income target established by the Board of Directors in our business plan, which was $198 million for 2008. The difference between business plan and our actual results of a loss of $23.6 million for 2008 was due primarily to writedowns taken in connection with other-than-temporary impairments of preferred stock of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and other financial institutions, and the carrying value of the Company’s investment in its affiliate Roxbury Capital Management, LLC; a significantly increased provision for loan losses; and sharply reduced market interest rates, which compressed our net interest margin. When we do not reach or we exceed target performance for any metric, bonus payouts are reduced or increased commensurately. Based on the Corporation’s performance in the most recent three years ending in 2008 in terms of its performance against the Peer Group and its net income against the business plan, the bonus potential was decreased 12.87%. For bonus awards for 2008, the bonus pool available for our Named Executive Officers under this formula was $2,462,100.

 

The Compensation Committee retains discretion to increase or decrease the size of the bonus pool available for all executive officers based on extraordinary events such as restructuring charges or gain or loss on disposal of a business unit. The extraordinary developments in the economy generally and in the financial services industry and our Company in particular during 2008 led the Compensation Committee to further reduce the bonus pool for our Named Executive Officers for 2008 to $982,500. Using this bonus pool, the Committee then determines how much of each executive’s available bonus is earned based on its evaluation of his or her achievement of performance factors established for the executive at the beginning

of the prior year. The CPP requires that those bonuses be in the form of restricted stock that does not vest until the funds we received from the Treasury in the CPP are repaid.

 

The performance factors considered in establishing Mr. Cecala’s bonus for 2008 included the Company’s net income compared to its net income goal and its average return on equity, average return on assets, and average growth in earnings per share over the most recent three years compared to the Performance Peer Group.

 

The performance factors considered in establishing Mr. Gibson’s bonus for 2008 included continued monitoring of our funding strategies and balance sheet risk, and assistance with acquisitions and divestitures.

 

The performance factors considered in establishing Mr. Harra’s bonus for 2008 included deposit growth, implementing new technology, and business development in our mid-Atlantic markets.

 

The performance factors considered in establishing Mr. Balentine’s bonus for 2008 included the investment performance of WTIM compared to its benchmarks, improving the organizational structure of Wilmington Brokerage Services Company, internalizing assets being managed by outside investment firms in appropriate circumstances, and expanding the distribution of WTIM’s products and services through external parties.

 

The performance factors considered in establishing Mr. Farrell’s bonus for 2008 included increasing the presence of the Corporate Client Services business outside the United States, increasing sales of investment management products, and integrating the corporate retirement services businesses of AST Capital Trust Company and our Company.

 

We do not assign specific weightings to these separate performance factors in awarding our executive officers bonuses, and do not set any specific standards or parameters or any specific quantitative financial or other performance threshold that must be reached to generate a minimum or a maximum bonus amount for any executive officer or any threshold, target, or maximum bonus threshold for any executive officer. Instead, the Compensation Committee compares each executive officer’s performance against the totality of performance factors established for the executive officer at the beginning of the year, taking into account the recommendations of Mr. Cecala with respect to bonuses other than his own.

 

The Committee reviewed Mr. Cecala’s performance in 2008 and considered how he successfully managed interest rate risk for the Company and completed two acquisitions. Based on the bonus target for Mr. Cecala, the Corporate Performance Factor, the Committee’s subjective evaluation of his and the Company’s performance, and the CPP’s requirements, the Committee awarded Mr. Cecala a bonus of $200,000 for 2008 in the form of restricted stock.*

 

The Committee reviewed Mr. Gibson’s performance in 2008, noting in particular his contributions to the Company’s strategic objectives to maintain its interest rate risk program to help protect its net interest margin and earnings from fluctuations in market interest rates; implement the Corporation’s funding management function to maximize the Company’s liquidity and capital objectives; and assist in our Company’s acquistions. Based on the bonus target for Mr. Gibson, the Corporate Performance Factor, the Committee’s subjective evaluation of his and the Company’s performance, and the CPP’s requirements, the Committee awarded Mr. Gibson a bonus of $195,000 for 2008 in the form of restricted stock.*

 

The Committee reviewed Mr. Harra’s performance in 2008, noting in particular his contributions to the Company’s deposit growth; implementing new technology in our branches; and business development in our mid-Atlantic markets; and our loan growth. Based on the bonus target for Mr. Harra, the Corporate Performance Factor, the Committee’s subjective evaluation of his and the Company’s performance, and the CPP’s requirements, the Committee awarded Mr. Harra a bonus of $200,000 for 2008 in the form of restricted stock.*

 

The Committee reviewed Mr. Balentine’s performance in 2008, noting in particular the investment performance of WTIM against its benchmarks; the improvement in Wilmington Brokerage Services Company’s organizational structure; and WTIM’s internalizing assets being managed by outside investment firms in appropriate circumstances. Based on the bonus target for Mr. Balentine, the Corporate Performance Factor, the Committee’s subjective evaluation of his and the Company’s performance, and the CPP’s requirements, the Committee awarded Mr. Balentine

a bonus of $187,500 for 2008 in the form of restricted stock.*

 

The Committee reviewed Mr. Farrell’s performance in 2008, noting in particular his contributions to the Company’s strategic objectives to expand the presence of the Corporate Client Services business line outside the United States; increasing sales of investment management products; and completion of two acquisitions in the corporate retirement services business. Based on the bonus target for Mr. Farrell, the Corporate Performance Factor, the Committee’s subjective evaluation of his and the Company’s performance, and the CPP’s requirements, the Committee awarded Mr. Farrell a bonus of $200,000 for 2008 in the form of restricted stock.*

 

*All such bonuses for 2008 were in the form of restricted stock which will vest in three equal installments over the three-year period beginning with the date of the award, but not before the Treasury no longer holds any debt or equity security we issued under the CPP. Since it is in the form of restricted stock, these bonuses are subject to forfeiture prior to vesting.

 

The Committee believes that its process of providing bonus targets and quantitative corporate and individual performance objectives to each executive officer at the beginning of the year, its subjective review of those officers’ achievement of those objectives at the end of the year relying substantially on Mr. Cecala’s evaluation of each executive’s performance, and its award to those officers of incentive and long-term compensation at the end of the year based in part on corporate performance and in part on its assessment of the totality of each executive’s achievement of those objectives, provides the most appropriate incentives to those officers to maximize returns to the Corporation’s shareholders and to achieve the Corporation’s long-term objectives.

 

Tax Considerations

 

Section 162(m) of the Internal Revenue Code and the regulations thereunder (collectively, “Section 162(m)”) prohibit companies from deducting compensation paid to certain executive officers in excess of $1 million unless that compensation is “performance-based.” Accordingly, salary and certain other compensation not tied to achievement of pre-established performance goals are included in Section 162(m)’s $1 million deduction cap.

 

Under our bonus plan, the Company is able to award compensation to executive officers a portion of which will be excluded from the deduction cap under Section 162(m) of the Internal Revenue Code (“Section 162(m) Participants”). In order to be able to deduct bonuses payable to our executive officers who qualify as Section 162(m) Participants, the performance goals applicable to those officers are based on any combination of one or more of the following criteria selected by the Compensation Committee at the beginning of the applicable performance period: 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, charge-offs, non-performing assets, and overhead ratio. These 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 compared to another company or companies.

 

Mr. Cecala was the Company’s only Section 162(m) Participant for 2008. The performance factors on which his bonus was based were the Company’s net income against its plan and its average return on equity, average return on assets, and the growth in its average earnings per share over the most recent three years against the Performance Peer Group over that period. As noted below, while the Treasury holds any debt or equity security we issued to it under CPP, we cannot deduct compensation awarded to any of our Named Executive Officers in excess of $500,000 annually, provided that this limitation is pro-rated for 2008, the initial year we participated in the CPP.

 

Annual bonus awards are typically paid in cash, except that a portion of bonus awards granted is made in the form of restricted stock. This generally represents 20% of the executive officer’s bonus amount plus a 15% premium to compensate for (1) the delay in the executive’s receiving the award and (2) the fact that this portion of the award is made in stock and not in cash. This is the same allocation method generally used to award bonuses

to other senior officers of the Company. We award restricted stock to our executive officers annually only at the regularly scheduled meeting of the Compensation Committee held in February of each year at which annual compensation awards are made. Restricted stock awards generally vest over three or four years and are subject to forfeiture prior to vesting. Any increase in value that accrues to our executive officers from restricted stock is based entirely on our stock’s performance subsequent to the date of grant, and bears a direct relationship to the value our shareholders realize.

 

Our shareholders have approved the bonus plan for our executive officers. Bonus awards for the prior fiscal year typically are approved at the Compensation Committee’s regularly scheduled meeting held in February of each year.

 

Stock Options

 

Under our 2009 Long-Term Incentive Plan, if approved by our shareholders, we will be able to make cash-based and stock-based awards. Stock options we have granted previously typically vest after three years and have terms of up to ten years, and are intended to motivate the recipients to increase our Company’s long-term value. In granting stock options to our executive officers, we typically consider the number of options the officer received previously; the officer’s level; changes in his or her duties and responsibilities during the year; and our Company’s current and prospective performance. We do not employ any formula in awarding stock options. Instead, the Compensation Committee compares each executive officer’s performance against the totality of performance factors established for that executive officer at the beginning of the previous year, taking into account the recommendations of Mr. Cecala with respect to stock option awards other than his own. When we have a long-term incentive plan that has been approved by our shareholders, we generally award stock options to our executive officers annually only at the meeting of the Compensation Committee at which such awards are granted each year, and all stock options are granted with exercise prices equal to the last sale price of our stock on the date of grant. Any value that accrues to our officers from stock options is based entirely on appreciation in our stock price following the date of grant, and bears a direct relationship to the value our shareholders realize. In addition, although our 2009 Long-Term Incentive Plan, if approved by our shareholders, would permit our Compensation Committee or Select Committee to make cash awards under that plan, neither of those committees has ever done so under any of our prior long-term incentive plans. Instead, they have granted only stock options and restricted stock under those plans, since we believe these types of awards most closely align our executive officers’ interests with those of our shareholders over the long term. The performance factors the Compensation Committee considers in awarding stock options are the same as those it considers in setting our executives’ base salaries and bonus awards.

 

All option plans under which we have granted option awards have been approved by our shareholders. No options held by our Named Executive Officers were in-the-money at December 31, 2008.

 

Perquisites

 

We provide country club memberships for executive and other senior officers who have customer entertainment responsibilities.

 

CPP

 

On December 12, 2008, we entered into agreements (the “Agreements”) with the Treasury pursuant to the CPP. Under the Agreements, we received a total purchase price of $330,000,000 and issued to the Treasury 330,000 shares of our fixed-rate perpetual preferred stock and a warrant (the “Warrant”) to purchase up to 1,856,714 shares of our common stock.

 

In connection with our participation in the CPP, each Named Executive Officer delivered to the Treasury a waiver waiving any claims against us or the Treasury for any changes to that officer’s compensation or benefits required to comply with the CPP during the period the Treasury holds any debt or equity security we issue under the Agreements or the Warrant. During the period the Treasury holds any debt or equity security we issue under the Agreements or the Warrant, we cannot deduct compensation awarded to any such officer in excess of $500,000 annually, provided that this limitation is pro-rated for the initial year we participate in the CPP.

 

In addition, under the CPP:

 

 

 

Compensation Committee Report

 

Consistent with the requirements of the CPP, the Committee certifies that: (1) within 90 days of our participation in the CPP, it reviewed with our senior risk officer the incentive compensation arrangements for the Named Executive Officers to ensure that those arrangements do not encourage those officers to take unnecessary and excessive risks that threaten the value of the Company, and (2) it has met with our senior risk officer to discuss and review the relationship between our risk management policies and practices and the incentive compensation arrangements for those officers. In concluding that the incentive compensation arrangements for the Named Executive Officers do not encourage them to take unnecessary and excessive risks that threaten the value of the Company, the Committee considered a number of factors, including that (1) those incentives are awarded based on a number of performance factors for each officer and not on a single, short-term factor, (2) it subjectively reviews each officer’s achievement of those performance factors with the goal of maximizing return to our shareholders and achieving our long-term objectives, (3) several of those performance factors are expressly directed at mitigating risk and improving controls, business integration, and succession planning for us, (4) those incentives, which currently must be in the form of restricted stock, do not vest until we have repaid all funds we received in the CPP, (5) the amount of that restricted stock is limited to one-third of the officer’s annual compensation, (6) with respect to the relative performance metrics, we consider our performance against the Performance Peer Group in terms of average return on equity, average return on assets, and growth in average earnings per share over a three-year period, and not just over a single year, (7) the Performance Peer Group is wide, as opposed to a narrow peer group, (8) the overall level of the incentive compensation of the Named Executive Officers is not excessive compared with incentive compensation awarded to executive officers of comparable institutions, and (9) each Named Executive Officer has executed an agreement authorizing us to recover, or ‘claw back,’ incentive compensation paid to that officer based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria.

 

The Compensation Committee has reviewed all components of the Named Executive Officers’ compensation, including:

 

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis above with management, and has recommended to the Board of Directors that this disclosure be included in this proxy statement.

 

Submitted by the Compensation Committee of the Company’s Board of Directors:

 

Stacey J. Mobley, Chair

Thomas L. DuPont

Donald E. Foley

Gailen Krug

Susan D. Whiting

 

 

The Committee’s charter is posted on our Web site at www.wilmingtontrust.com under “Investor Relations — Corporate Governance.” The Committee does not delegate its authority to any person, but, as noted above, does consider Mr. Cecala’s views in setting compensation for executive officers other than himself.

 

Certain Relationships and Related Transactions

 

Certain of our Company’s subsidiaries have banking transactions in the ordinary course of business with Ms. Burger, Messrs. duPont and Tunnell, and certain of our 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 not related to the lender and that do not involve more than the normal risk of collectability or present other unfavorable features.

 

Compensation Committee Interlocks and Insider Participation

 

The Compensation Committee’s members are Stacey J. Mobley (Chair), Thomas L. duPont, Donald E. Foley, Gailen Krug, and Susan D. Whiting. 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.

 

Mr. duPont is indebted to WTC on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other not related to the lender and that do not involve more than the normal risk of collectability or present other unfavorable features.

 

Our Code of Conduct and Ethics, which we post on our Web site, prohibits directors and executive officers from engaging in transactions that may raise even the appearance of a conflict of interest with our Company. Our Company’s General Counsel reviews any significant transaction a director or executive officer proposes to have with the Company that could give rise to a conflict of interest or the appearance of a conflict of interest, including any transaction that would require disclosure under Item 404(a) of Regulation S-K. Our policy defines such a transaction as any transaction between our Company and designated individuals, other than transactions available to all employees or that involve less than $5,000.

 

In conducting this review, the General Counsel ensures that all such transactions are reasonable and fair to our Company and its subsidiaries. Among the factors the General Counsel considers in determining whether a transaction is fair to our Company and its subsidiaries is the aggregate value of the transaction and whether it represents an opportunity that may be equally available to the Company itself. The Company’s policies and procedures for the review and approval of related party transactions are in writing, posted on our Web site at www.wilmingtontrust.com under “Investor Relations-Corporate Governance,” and are available in print to any shareholder who requests them. No transaction has been entered into with any director or executive officer that does not comply with those policies and procedures.

 

Summary Compensation Table

 

The following table shows information about compensation the Company awarded in 2008, 2007, and 2006 to its chief executive officer, chief financial officer, its three other most highly compensated executive officers at December 31, 2008 (the “Named Executive Officers”).

 

 

(1) The Named Executive Officers were awarded the following total bonuses under the Company’s Incentive Plan for services performed during 2008, 2007, and 2006: $200,000 for 2008, $842,500 for 2007, and $656,400 for 2006 for Mr. Cecala; $195,000 for 2008, $471,500 for 2007, and $307,688 for 2006 for Mr. Gibson; $200,000 for 2008, $451,280 for 2007, and $396,302 for 2006 for Mr. Harra; $187,500 for 2008, $603,000 for 2007, and $452,250 for 2006 for Mr. Balentine; and $200,000 for 2008, $446,500 for 2007, and $323,072 for 2006 for Mr. Farrell.

 

For 2008, all of these amounts were in the form of restricted stock which will vest in three equal installments over the three-year period beginning with the date of the award, but not before the Treasury no longer holds any debt or equity security we issued under the CPP. For 2006 and 2007, twenty percent of these amounts, together with an additional 15% of that 20% to compensate for (a) the delay in the executive’s receiving the award and (b) the fact that this portion of the award is made in stock and not cash, was made in the form of restricted stock. This restricted stock will be reported in the Summary Compensation Table of the Company’s proxy statement for future Annual Shareholders’ Meetings.

 

Since it is in the form of restricted stock, these portions of each Named Executive’s Officer’s bonus are subject to forfeiture prior to vesting.

 

(2) For 2008, 5,857 of these restricted shares for Mr. Cecala, 3,278 of these restricted shares for Mr. Gibson, 3,137 of these restricted shares for Mr. Harra, 3,493 of these restricted shares for Mr. Balentine, and 3,104 these restricted shares for Mr. Farrell were issued in lieu of 20% of the incentive compensation otherwise payable to the Named Executive Officers, together with an additional 15% of that 20% to compensate for

(a) the delay in the executive’s receiving the award and (b) the fact that this portion of the award is made in stock and not in cash. Since it is in the form of restricted stock, this portion of each Named Executive Officer’s bonus is subject to forfeiture prior to vesting. These restricted stock awards vest in three equal annual installments over the three-year period beginning with the date of the award.

 

Twenty-one thousand one hundred sixty-one of these restricted shares for Mr. Cecala, 8,162 of these restricted shares for Mr. Gibson, 4,534 of these restricted shares for Mr. Harra and 3,023 of these restricted shares for each of Messrs. Balentine and Farrell vest in one installment four years after the date of the award. These restricted shares are subject to forfeiture prior to vesting.

 

The value shown includes dividends received on the restricted stock awards in 2008, 2007, and 2006.

 

(3) The assumptions used in valuing these stock and option awards are detailed in Note 19 to the consolidated financial statements contained in our Annual Report to Shareholders for 2008. These valuations were calculated with respect to the amounts we expensed under Statement of Financial Accounting Standards 123R.

 

(4) Because Messrs. Cecala and Harra are past the age of early retirement, age 55, under Statement of Financial Accounting Standards 123R restricted stock awards to them are expensed in full in the year in which they are granted, rather than over their three- or four-year vesting periods.

 

(5) The assumptions used in valuing these benefits are detailed in Note 18 to the consolidated financial statements contained on our Annual Report on Form 10-K for 2008 and our Annual Report to Shareholders for 2008. These valuations were calculated with respect to the amounts we expensed under Statements of Financial Accounting Standards 158, 132, and 87.

 

(6) Represents: (a) the Company’s contributions to its Thrift Savings Plan for each Named Executive Officer of $6,900 in 2008; Messrs. Cecala, Harra, and Gibson of $6,750, and Messrs. Balentine and Farrell of $6,600 in 2007; and each Named Executive Officer of $6,600 in 2006; (b) premiums the Company paid for term life insurance for each of Messrs. Cecala, Harra, and Balentine of $2,280 in 2008 and 2007; each of Messrs. Cecala and Harra of $2,616 in 2006; Mr. Balentine of $2,600 in 2006; Mr. Gibson of $2,095 in 2008, $1,539 in 2007, and $1,766 in 2006; and Mr. Farrell of $2,103 in 2008, $1,573 in 2007, and $1,804 in 2006; and (c) expense the Company recognized for country club memberships for Mr. Cecala of $25,168 in 2008, $13,319 in 2007, and $12,649 in 2006; Mr. Harra of $11,248 in 2008, $10,525 in 2007, and $10,314 in 2006; and Mr. Balentine of $19,250 in 2008, $25,179 in 2007, and $15,738 in 2006.

Grants of Plan-Based Awards for 2008

 

The following provides information about grants of plan-based awards for 2008:

 

 

(1) Five thousand eight hundred fifty-seven of these restricted shares for Mr. Cecala, 3,278 of these restricted shares for Mr. Gibson, 3,137 of these restricted shares for Mr. Harra, 3,493 of these restricted shares for Mr. Balentine, and 3,104 of these restricted shares for Mr. Farrell vested one-third on February 13, 2009, and one-third will vest on each of February 16, 2010, and February 14, 2011. This restricted stock was received in lieu of 20% of the cash bonus otherwise payable to the Named Executive Officers for 2008, together with an additional 15% of that 20% to compensate for (a) the delay in the executive’s receiving the award and (2) the fact that this portion of the award is made in stock and not in cash. Since it is in the form of restricted stock, this portion of each Named Executive Officer’s bonus is subject to forfeiture prior to vesting.

 

Twenty-one thousand one hundred sixty-one of these restricted shares for Mr. Cecala, 8,162 of these restricted shares for Mr. Gibson, 4,534 of these restricted shares for Mr. Harra, and 3,023 of these restricted shares for each of Messrs. Balentine and Farrell vest on February 13, 2012.

 

Dividends are paid on restricted stock at the rate paid on the Company’s outstanding stock.

Outstanding Equity Awards at 2008 Fiscal Year-End

 

The following table sets forth information about outstanding equity awards to the Named Executive Officers at December 31, 2008:

 

 

 

 

Option Exercises and Stock Vested in 2008

 

The following table provides information about stock options exercised by and restricted stock vested for each Named Executive Officer during 2008:

 

Pension Benefits as of December 31, 2008

 

The following table provides information about benefits under our Pension Plan and Supplemental Executive Retirement Plan (“SERP”) for the Named Executive Officers at December 31, 2008: