SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant |_|
Filed by a Party other than the Registrant |X|
Check the appropriate box:
|_| Preliminary Proxy Statement
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Progress Financial Corporation
(Name of Registrant as Specified In Its Charter)
Frederick E. Shea, SVP & CFO
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
|X| $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2).
|_| $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
_____________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
|_| Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
1) Amount previously paid: _________________________________________________
2) Form, Schedule or Registration No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
___________
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
PROGRESS FINANCIAL CORPORATION
Plymouth Meeting Executive Campus
600 West Germantown Pike
Plymouth Meeting, PA 19462
(610) 825-8800
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 30, 1996
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of Stockholders of Progress
Financial Corporation will be held at the Plymouth Country Club, Plymouth and
Belvoir Roads, Norristown, Pennsylvania, on Tuesday, April 30, 1996 at 9:00 a.m.
for the following purposes:
1. To elect four directors for a term of three years and to elect one
director for a term of two years or until their successors have been elected and
qualified;
2. To consider and approve the 1996 Employee Stock Purchase Plan;
3. To ratify the appointment of Coopers & Lybrand L.L.P. as the Company's
independent auditors for the year ending December 31, 1996; and
4. To transact such other business as may properly come before the meeting
and all adjournments thereof.
Stockholders of record at the close of business on March 8, 1996 are
entitled to notice of and to vote at the meeting and all adjournments thereof.
A copy of the Company's Annual Report for 1995 is enclosed. The Annual
Report is not to be regarded as proxy solicitation material.
BY ORDER OF
THE BOARD OF DIRECTORS
/s/ Eric J. Morgan
Eric J. Morgan
Corporate Secretary
Plymouth Meeting, Pennsylvania
March 28, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO
BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY VOTE
EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING
OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
PROGRESS FINANCIAL CORPORATION
Plymouth Meeting Executive Campus
600 West Germantown Pike
Plymouth Meeting, PA 19462
(610) 825-8800
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
APRIL 30, 1996
INTRODUCTORY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
and on behalf of the Board of Directors of Progress Financial Corporation (the
"Company"), the holding company for Progress Federal Savings Bank (the "Bank"),
Progress Realty Advisors, L.P. ("PRA"), and Quaker State Financial Corporation
("QSFC"), of proxies to be used at the Annual Meeting of Stockholders of the
Company to be held on April 30, 1996 at 9:00 a.m., at the Plymouth Country Club,
Plymouth and Belvoir Roads, Norristown, Pennsylvania, and at any adjournment or
adjournments thereof. The approximate date on which this Proxy Statement and the
accompanying Proxy are to be mailed to stockholders is March 28, 1996.
At the Annual Meeting, stockholders will be asked to elect four directors
to serve for three year terms and one director to serve for a two year term.
John E. F. Corson, Donald F. U. Goebert and Paul M. LaNoce, each of whom is a
current director of the Company, and Janet E. Paroo who is a new director of the
Company will each serve for terms expiring at the Company's 1999 Annual Meeting.
H. Wayne Griest who is also a new director of the Company will serve for a term
expiring at the Company's 1998 Annual Meeting. In addition, stockholders will be
asked to adopt the 1996 Employee Stock Purchase Plan ("Purchase Plan") and to
ratify the appointment of Coopers & Lybrand L.L.P. as the Company's independent
auditors for the year ending December 31, 1996; and to transact such other
business as may properly come before the meeting and all adjournments thereof.
The accompanying proxy is solicited by the Board of Directors of the
Company for use at the Annual Meeting of Stockholders of the Company at the time
and place, and for the purposes, set forth above. The proxy solicited hereby, if
properly signed and returned to the Company and not revoked before it is voted,
will be voted in accordance with the instructions contained therein. If no
instructions are given, each proxy received will be voted "FOR" the slate of
directors nominated by the Board of Directors as described herein, "FOR" the
adoption of the Purchase Plan, "FOR" the appointment of Coopers & Lybrand L.L.P.
as the Company's independent auditors for the year ending December 31, 1996, and
"FOR" any other matters as may properly come before the meeting.
Any stockholder giving a proxy has the power to revoke it at any time
before it is exercised by: (i) filing with the Company written notice thereof
(Attention: Eric J. Morgan, Corporate Secretary, Progress Financial Corporation,
Plymouth Meeting Executive Campus, 600 West Germantown Pike, Plymouth Meeting,
Pennsylvania 19462); (ii) submitting a duly executed proxy bearing a later date;
or (iii) appearing at the Annual Meeting and giving the Company notice of his or
her intention to vote in person. Proxies solicited hereby may be exercised only
at the Annual Meeting and any adjournments thereof and will not be used for any
other meeting.
Only stockholders of record at the close of business on March 8, 1996 will
be entitled to receive notice of and to vote at the Annual Meeting. On the
record date, there were 3,780,000 shares of Common Stock, par value $1.00 per
share ("Common Stock") of the Company issued and outstanding and held by
approximately 1,600 holders of record, and the Company had no other class of
equity securities outstanding. Each share of Common Stock entitles the holder to
one vote, and votes may not be voted cumulatively with respect to the election
of directors. A majority of the shares of Common Stock entitled to vote, present
in person or represented by proxy, will constitute a quorum for purposes of the
meeting.
-1-
Directors will be elected by a plurality of the votes cast at the Annual
Meeting. The affirmative vote of a majority of the total votes cast at the
Annual Meeting is required for approval of the proposals to adopt the Purchase
Plan and to ratify the appointment of the Company's independent auditors.
Abstentions will be counted for purposes of determining the presence of a quorum
at the Annual Meeting, but will not be counted as votes cast for the election of
directors or the proposals to adopt the Purchase Plan and to ratify the
appointment of the Company's independent auditors and, thus, will have no effect
on the voting of these proposals. Under rules of the New York Stock Exchange,
all of the proposals for consideration at the Annual Meeting are considered
"discretionary" items upon which brokerage firms may vote in their discretion on
behalf of their client if such clients have not furnished voting instructions.
Thus, there are no proposals to be considered at the Annual Meeting which are
considered "non-discretionary" and for which there will be "broker non-votes."
ELECTION OF DIRECTORS
The Certificate of Incorporation of the Company provides that the Board of
Directors shall consist of no fewer than seven nor more than twenty one members,
the exact number to be fixed from time to time by resolution of the Board of
Directors, and shall be divided into three classes as nearly equal in number as
possible. The members of each class are to be elected for a term of three years
and until their successors are elected and qualified. One class of directors is
to be elected annually except, in the event of a change in the number of or
composition of the Board of Directors, directors may be elected to more than one
class in order to more nearly achieve equality in the classes. By affirmative
vote of a majority of the Board of Directors, a resolution was adopted which
presently fixes the number of the members of the Board at eleven.
Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted for the election of the five nominees listed below. If
any person named as nominee should be unable or unwilling to stand for election
at the time of the Annual Meeting, the proxies will vote for a replacement
nominee or nominees recommended by the Board of Directors. At this time, the
Board of Directors knows of no reason why any of the persons listed below may
not be able to serve as a director if elected.
-2-
Information with Respect to Nominees for
Director and Directors Whose Term Continues
The following tables set forth certain information regarding each nominee
for election, including the principal occupations of such persons during at
least the past five years and the number and percent of shares of Common Stock
beneficially owned by such persons as of March 8, 1996. No nominee for director
or director is related to any other nominee for director or director or
executive officer of the Company by blood, marriage or adoption, and there was
no arrangement or understanding pursuant to which any of the nominees for
director or director was selected as a nominee for director or director.
Nominees for Director for a three year term
Amount of
Principal Director Common Stock
Occupation During of Beneficially
At Least the Past Company Term Owned as of
Name Age Five Years Since Expires March 8, 1996 (1)
- --------------------------------------------------------------------------------------------------------------------------
John E. F. 55 Consultant and 1991 1999 12,000(2)
Corson President of Corson
Investments, a group of
family holding companies
in Plymouth Meeting,
Pennsylvania, since 1987.
Donald F. U. 59 Chairman of the Board 1987 1999 199,218(5.19%)(3)
Goebert of Adage Inc., a wire-
less communications
firm in West Chester,
Pennsylvania, since 1968.
Also, Director of Investors
Insurance Group, Inc.,
Jupiter/Tequesta National
Bank, and Gateway
Communications, Inc.
Paul M. 36 President of DAR 1991 1999 24,400(2)
LaNoce Industrial Products
Inc., an industrial
manufacturer in
Philadelphia,
Pennsylvania, since 1981.
Janet E. 41 Vice President of -- 1999 0
Paroo (formerly Pavloff) Global Health Group, Inc.,
a health care company in
Bala Cynwyd, Pennsylvania
involved with the
development and management
of health care facilities,
systems and programs
primarily in Eastern Europe,
South East Asia and India,
since 1995; Banker for
Meridian Bank in
Philadelphia, Pennsylvania
from 1986 to 1995.
-3-
Nominee for Director for a two year term
Amount of
Principal Director Common Stock
Occupation During of Beneficially
At Least the Past Company Term Owned as of
Name Age Five Years Since Expires March 8, 1996 (1)
- --------------------------------------------------------------------------------------------------------------------------
H. Wayne 47 Chairman and CEO -- 1998 15,286
Griest Progress Realty Advisors, L.P.
and Quaker State Financial
Corporation since December
1995. Former President of The Lee
Financing Group, Inc. in Wayne,
Pennsylvania from July 1986
until November 1995.
The Board of Directors recommends that stockholders vote FOR the election of the above nominees.
Members of Board Continuing in Office
Amount of
Principal Director Common Stock
Occupation During of Beneficially
At Least the Past Company Term Owned as of
Name Age Five Years Since Expires March 8, 1996(1)
- --------------------------------------------------------------------------------------------------------------------------
A. John May, III 40 Attorney in the law firm 1993 1997 8,193(4)
Pepper, Hamilton & Scheetz,
Philadelphia, Pennsylvania,
since 1981. Partner since
1989.
Charles J. 65 President of 1991 1997 63,158(1.66%)(5)
Tornetta Tornetta Realty
Corporation, a
real estate broker
in Norristown,
Pennsylvania, since 1952.
Also, President of
Commonwealth Insurance
Agency.
W. Kirk 38 Chairman, President and 1991 1997 248,655(6.33%)(6)
Wycoff Chief Executive Officer
of the Company and the Bank
since July 1991; Former
President and Chief
Executive Officer of
Crusader Savings Bank,
Rosemont, Pennsylvania from
January 1990 until June
1991.
-4-
Members of Board Continuing in Office (continued)
Amount of
Principal Director Common Stock
Occupation During of Beneficially
At Least the Past Company Term Owned as of
Name Age Five Years Since Expires March 8, 1996 (1)
- --------------------------------------------------------------------------------------------------------------------------
William O. 55 Managing Partner of 1990 1998 90,230 (2.38%) (7)
Daggett, Jr. Kistler-Tiffany Companies,
a firm engaged in financial
and estate planning and
employee benefits since
1984. Also, President,
Benefit Designs, Inc.; Vice
President, Group Brokerage
Associates, Inc.; and
Chairman of Board of NABCO.
Joseph R. 53 Principal of KMR 1992 1998 8,500(2)
Klinger Management, Inc.,
a management consulting
company in Glenside,
Pennsylvania, since March
1991; Chief Executive
Officer and President of
Liberty Savings Bank,
Philadelphia Pennsylvania,
from April 1990 until
January 1991;
William L. 44 Attorney with the law 1990 1998 90,726(2.38%)(8)
Mueller firm Clark, Ladner,
Fortenbaugh & Young in
Cherry Hill, New Jersey
since November 1987.
- ----------
<FN>
(1) Unless otherwise indicated, the number of shares owned is less than 1% of
the issued and outstanding Common Stock of the Company.
(2) Includes 5,500 shares subject to stock options which are exercisable within
60 days of March 8, 1996.
(3) Includes 143,718 shares owned by companies of which Mr. Goebert is a
director, officer and 10% stockholder and 50,000 common stock warrants and
5,500 shares subject to stock options, in each case which are exercisable
within 60 days of March 8, 1996.
(4) Includes 500 shares subject to stock options which are exercisable within
60 days of March 8, 1996.
(5) Includes 25,000 common stock warrants and 5,500 shares subject to stock
options, in each case which are exercisable within 60 days of March 8,
1996.
(6) Includes 12,000 shares which are held jointly by Mr. Wycoff with or for the
benefit of certain family members and 12,500 common stock warrants and
135,000 shares subject to stock options, in each case which are exercisable
within 60 days of March 8, 1996.
(7) Includes 72,230 shares owned by companies of which Mr. Daggett is a
director, officer and 10% stockholder and 12,500 common stock warrants and
5,500 shares subject to stock options, in each case which are exercisable
within 60 days of March 8, 1996.
(8) Includes 60,226 shares held jointly by Mr. Mueller with or for the benefit
of certain family members and 25,000 common stock warrants and 5,500 shares
subject to stock options, in each case which are exercisable within 60 days
of March 8, 1996.
</FN>
-5-
THE BOARD OF DIRECTORS OF THE COMPANY AND ITS COMMITTEES
The Board of Directors of the Company held seven meetings during 1995. Each
incumbent director of the Company attended no fewer than 75% of the aggregate
number of meetings of the Company's Board of Directors and all committees of the
Company's Board on which he served during 1995 except for Mr. Mueller who
attended 71% of the aggregate number of meetings of the Company's Board of
Directors and all committees of the Company's Board on which he served during
1995.
Nominations for members of the Board of Directors of the Company are made
by the Board of Directors or by any stockholder entitled to vote at the Annual
Meeting. Section 8.4(d) of the Company's Certificate of Incorporation sets forth
the procedures which stockholders must follow in order to make nominations for
election to the Board of Directors. In general, such nominations must be
submitted in writing to the Company at least 90 days prior to the date of the
Annual Meeting. The Company is not required to include such nominations in its
proxy statement. The Board of Directors has determined that if any stockholder
properly makes such a nomination, the ballots provided for use by stockholders
at the Annual Meeting will bear the name of such nominee or nominees.
Listed below are the Company's committees, along with directors who are
serving as members of each committee in 1996.
The Audit Committee of the Company and the Bank recommends to the Board
independent auditors to perform audit and non-audit services, reviews the scope
and results of such services, reviews with management and the independent
auditors the systems of internal control and audit, assures adherence in
accounting and financial reporting to generally accepted accounting principles,
and performs such other duties deemed appropriate by the Board of Directors. The
Audit Committee met three times in 1995. For 1996, the following Board members
are serving on the Audit Committee: John E. F. Corson, William O. Daggett, Jr.
and Paul LaNoce.
The Board of Directors of the Company has a Stock Compensation Committee to
review the Company's Key Employee Stock Compensation Program and to recommend to
the Board changes or additions to this program. For 1996, the following Board
members are serving on the Stock Compensation Committee: Donald F. U. Goebert,
William O. Daggett, Jr. and William L. Mueller.
The Capital Committee is responsible for analyzing capital raising
alternatives for the Company. This committee did not meet in 1995. For 1996, the
following Board members are serving on the Board Capital Committee: Donald F. U.
Goebert, Joseph R. Klinger and William L. Mueller.
The entire Board of Directors, except for Mr. Wycoff, determines
compensation for executive officers. The Stock Compensation Committee, which
consists of Messrs. Goebert, Daggett and Mueller, administer and award grants
under the Company's Key Employee Stock Compensation Program. No member of either
of these committees is a current or former officer or employee of the Company or
its subsidiaries.
-6-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information relating to the only
persons known to the Company to be the beneficial owners of 5% or more of the
Company's Common Stock as of March 8, 1996, and the amount of Common Stock of
the Company held by all directors and executive officers of the Company as a
group as of such date.
Amount of Common Stock Percent
Name and Address of Beneficially Owned of Common
Beneficial Owner as of March 8, 1996 Stock
- --------------------------------------------------------------------------------
SOP Partners, L.P. 295,000(1) 7.24%
Two World Trade Center
104th Floor
New York, NY 10048
Directors and executive 778,816(2) 17.08%
officers of the Company as a
group (13 persons)
- ----------
(1) Includes 50,000 common stock warrants which are exercisable within 60 days
of March 8, 1996.
(2) Includes 12,000 shares which are held jointly by Mr. Wycoff with or for the
benefit of certain family members, 72,230 shares which are owned by
companies of which Mr. Daggett is a director, officer or 10% stockholder,
143,718 shares owned by companies of which Mr. Goebert is a director,
officer or 10% stockholder and 60,226 shares held jointly by Mr. Mueller
with or for the benefit of certain family members. Also includes 189,000
shares subject to stock options and 125,0000 common stock warrants held by
the group, in each case which are exercisable within 60 days of March 8,
1996.
-7-
EXECUTIVE COMPENSATION AND TRANSACTIONS
Executive Compensation
The following table sets forth a summary of certain information concerning
the compensation awarded to or paid by the Company to the following executive
officers of the Company for services rendered in all capacities during the last
three fiscal years. No other executive officer of the Company received annual
compensation in excess of $100,000 during the last fiscal year.
Summary Compensation Table
- ------------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term Compensation
---------------------------------------- ------------------------------
Other Awards Payouts All Other
Name and Base Annual ------------------------------ Compensation
Principal Position Year Salary Bonus Compensation Options LTIP (6)
(3) (4) Payouts (5)
- ------------------------------------------------------------------------------------------------------------------------------------
W. Kirk Wycoff 1995 $235,420(1) $ 9,181 -- -- N/A $ 3,204
President and 1994 $226,042(1,2) $ 20,000 -- -- N/A $ 5,850
Chief Executive 1993 $190,465(1,2) $ 18,500 -- 70,000 N/A $ 4,439
Officer
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Includes amounts deferred pursuant to the Company's 401(k) Profit Sharing
Plan, which generally allows employees to defer up to 12% of their
compensation, subject to applicable limitations set forth in the Internal
Revenue Code.
(2) Includes directors fees of $2,850 and $6,100 paid to Mr. Wycoff in 1993 and
1994, respectively. Mr. Wycoff did not receive director fees in 1995.
(3) Does not include amounts attributable to miscellaneous benefits received by
the named executive officer. In the opinion of management of the Company,
the costs to the Company of providing such benefits to any individual
executive officer during the year ended December 31, 1995 did not exceed
the lesser of $50,000 or 10% of the total of annual salary and bonus
reported for the individual.
(4) Represents options granted pursuant to the Company's Key Employee Stock
Compensation Program.
(5) The Company does not have a long term incentive program as of December 31,
1995.
(6) Consists of $2,652, $5,014, and $4,439 of employer contributions made by
the Company pursuant to the 401(k) profit sharing plan in 1995, 1994, and
1993, respectively, and allocations pursuant to the Company's Employee
Stock Ownership Plan ("ESOP") during 1995 and 1994. There were no
allocations under the plan in 1993. The market value of the ESOP
allocations for 1995 and 1994 were $552 and $836, respectively.
</FN>
-8-
STOCK OPTION GRANTS
The following table sets forth certain information concerning exercises
of stock options by the named executive officer during the year ended December
31, 1995 and options held at December 31, 1995.
Aggregate Option Exercises in Last Fiscal Year and Year End Option Values
- ------------------------------------------------------------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised
Options at Year End Options at Year End (1)
Shares ----------------------------- ------------------------------
Acquired on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------------------------
W. Kirk Wycoff -- -- 121,250 23,750 $407,656 $87,969
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Based on a per share market price of $5.63 at December 31, 1995.
</FN>
REPORT OF THE COMPENSATION COMMITTEE
The entire Board of Directors, except for Mr. Wycoff, establishes the
policy for compensation of executive officers of the Company. The Stock
Compensation Committee review's the Company's Key Employee Stock Compensation
Program and recommends to the Board changes or additions to this program. The
Committee and the Board members establishing executive officer compensation are
composed entirely of outside directors who are not eligible to participate in
the plans over which they have authority.
The overall goal of the Company's compensation policy is to motivate,
reward and retain its key executive officers. The Board believes this is best
accomplished through an appropriate mix of competitive base salaries, bonus and
stock incentives.
The Board considers the following in determining base salary levels:
1. the amount of responsibility the executive officer has,
experience and the number of years in office, and
2. compensation levels of corresponding positions at other thrift
companies of similar size within the Mid-Atlantic region. For
1995, Mr. Wycoff's salary was near the average of comparative
thrift companies.
The Board grants bonuses to executive officers, including the Chief
Executive Officer, based upon the degree of attainment of performance objectives
for the year. The performance objectives include net interest income,
non-interest income, non-interest expense and net income. For 1995, Mr. Wycoff
did not receive the maximum bonus payment because all targeted performance goals
were not met. Positives for the year included reduction of non-performing
assets, growth in core business and consumer deposits, and repositioning of
deposit services. These were offset by expenses related to a merger termination
and lower mortgage originations than expected.
John E. F. Corson Donald F. U. Goebert
Paul M. LaNoce A. John May, III
Charles J. Tornetta Joseph R. Klinger
William L. Mueller William O. Daggett, Jr.
-9-
EMPLOYMENT AGREEMENTS
The Company and the Bank (the "Employers") have entered into an employment
contract commencing January 1, 1995 with W. Kirk Wycoff which provides for his
employment for a period of three years with provisions for automatic one-year
extensions unless sooner terminated by death, disability or termination for
cause. The employment contract provides for a base salary, the most recent of
which is listed in the Summary Compensation table, and entitles Mr. Wycoff to
participate in all benefit plans and programs available to executive officers.
The employment agreement is terminable with or without cause by the
Employers or Mr. Wycoff. Mr. Wycoff shall have no right to compensation or other
benefits pursuant to the employment agreement for any period after voluntary
termination or termination by the Employers for cause, disability, retirement or
death, provided, however, that if the employment agreement is terminated by the
Employers other than for cause, disability, retirement or death or by Mr. Wycoff
following a change in control of the Company, as defined, Mr. Wycoff will be
entitled to a cash severance amount equal to the greater of the amount of
compensation remaining to be paid under the agreement or Mr. Wycoff's annual
compensation.
A change in control is generally defined in the employment agreement to
mean a change in control of a nature that would be required to be reported in
response to Item 6(e) of the SEC proxy rules, provided that a change of control
shall be deemed to have occurred if (i) the acquisition by any person of 25% or
more of the Company's outstanding voting securities, or (ii) during any two-year
period a change in a majority of the directors of the Company has occurred
without the approval of at least two-thirds of the persons who were directors of
the Company at the beginning of such period.
DIRECTORS' FEES
The Board of the Bank meets monthly and the Board of the Company meets
quarterly. Cash compensation is paid to Directors for attendance at regularly
scheduled and special Board meetings. Each non-officer director receives a fee
of $350 for attendance at each regular or special Board meetings and each
non-officer director who attends a committee meeting also receives $150 per
meeting attended.
DIRECTORS' STOCK OPTION PLAN
The Company has adopted the 1993 Directors' Stock Option Plan (the
"Directors' Plan") which provides for the grant of compensatory stock options to
non-employee directors of the Company and the Bank. Pursuant to the Directors'
Plan, in June 1993 each director of the Company or the Bank who was not an
employee of the Company or any subsidiary was granted a compensatory stock
option to purchase 5,000 shares of Common Stock, at an exercise price of $3.50
per share. In addition, options to purchase 250 shares were granted to each
non-employee director on December 31, 1993, 1994 and 1995 and will also be
granted on December 31 of each year thereafter until December 31, 1997. The
exercise price is equal to the fair market value of a share of Common Stock on
the date of grant. Options granted pursuant to the Directors' Plan are vested
and exercisable six months from the date of grant.
-10-
PERFORMANCE GRAPH
The following graph compares the yearly cumulative total return on the
Common Stock of Progress Financial Corporation over the five year period ending
December 31, 1995 with (i) the yearly cumulative total return on all stocks
included on the NASDAQ Stock Market and (ii) the yearly cumulative total return
on the stocks included in the NASDAQ Bank Stocks Index. All of the cumulative
returns are computed assuming the reinvestment of dividends at the frequency
with which dividends were paid during the applicable years.
[THE FOLLOWING TABLE IS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL]
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
Progress Financial Corporation 100 375 463 425 563
NASDAQ Stock Market 100 116.381 133.599 130.594 184.54
NASDAQ Bank Stock 100 145.561 166.6 165.401 246.419
The index level for all series was set to 100 on 12/31/91.
-11-
INDEBTEDNESS OF MANAGEMENT
The Bank offers certain loans to its directors, officers and employees. It
is the belief of management that these loans do not involve more than the normal
risk of collectibility. Except for the waiving in most cases of loan origination
fees for officers and employees during their employment or association with the
Bank, these loans are made on substantially the same terms as those prevailing
at the time for comparable transactions with non-affiliated persons. Executive
officers, directors, officers and employees of the Bank receive no discount from
the market interest rate for loans made by the Bank. However, the Bank in most
cases continues to discount loan origination fees for loans to officers and
employees. As of December 31, 1995, thirteen loans totalling $567,589 (or 3.00%
of the Company's total stockholders' equity) were outstanding to the Company's
directors and executive officers as a group.
As of December 31, 1995, the following director and senior officer of the
Company had loans from the Bank which exceeded an aggregate of $60,000
outstanding during 1995.
Principal
Highest Balance
Principal as of
Interest Type Balance December 31,
Name Rate of Loan During 1995 1995
- --------------------------------------------------------------------------------
Eric J. Morgan 6.875% Residential Mortgage $280,215 $276,975
(Senior Vice President)
William L. Mueller 6.75% Residential Mortgage $198,233 $195,794
(Director)
-12-
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Pursuant to Item 405 of Regulation S-K, the Company is required to disclose
(based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Company pursuant to Rule 16a-3(e) during its most recent fiscal year and
Forms 5 and amendments thereto furnished to the Company with respect to its most
recent year) each person who, at any time during the fiscal year, was a
director, executive officer or beneficial owner of more than ten percent of the
Company's common stock that failed to file on a timely basis, as disclosed in
the above Forms, reports required by Section 16(a) of the Exchange Act during
the most recent fiscal year or prior fiscal years.
Based upon its review of Forms 3, 4 and 5 and amendments thereto furnished
to the Company during and with respect to 1995, the Company is not aware of any
director, officer, beneficial owner of more than 10 percent of the Company's
common stock or any other person subject to Section 16 of the Securities
Exchange Act of 1934 who has failed to file any such form on a timely basis
during 1995.
PROPOSAL TO ADOPT THE 1996 EMPLOYEE STOCK PURCHASE PLAN
General
The Board of Directors of the Company has adopted the 1996 Employee Stock
Purchase Plan, which is intended as an incentive to encourage all eligible
employees of the Company to acquire stock ownership in the Company through
payroll deductions so that they may share in its future growth and performance.
Description of the Purchase Plan
The following description of the Purchase Plan is a summary of its terms,
and is qualified in its entirety by reference to the Purchase Plan, a copy of
which is available on request from the secretary of the Company.
The Purchase Plan will be administered by a committee of the Board of
Directors of the Company ("Committee"). All questions of interpretation of the
Purchase Plan or any option under the plan shall be determined by the Committee.
The Committee may delegate any or all administrative functions under the
Purchase Plan and it is anticipated that the Company's transfer agent will
assist in administering the Purchase Plan.
Pursuant to the Purchase Plan, shares of the Company's Common Stock will be
offered to employees of the Company in up to two phases known as "Offering
Periods" during which payroll deductions will be accumulated under the Purchase
Plan during any calendar year. Generally, the Company will have two six month
Offering Periods each year. It is anticipated that the first Offering Period
will commence on July 1, 1996, and that Offering Periods will continue
consecutively on each January 1 and July 1 thereafter.
The aggregate number of shares of Common Stock which may be purchased
pursuant to the Purchase Plan is 100,000 shares, subject to any adjustment in
the event of stock dividends, stock splits, recapitalizations or other changes
in the outstanding Common Stock. Such shares may be authorized but unissued
shares of Common Stock or shares of Common Stock reacquired by the Company in
private or open market transactions, subject to any required regulatory
approval.
All regular employees of the Company or any parent or subsidiary, including
officers whether or not directors, employed for more than 25 hours per week are
eligible to enroll in the Purchase Plan by completing a payroll deduction form
provided by the Company. Upon enrollment, an employee shall elect to make
contributions to the Purchase Plan by payroll deductions in an aggregate amount
not less than 2% nor more than 10% of such employee's total compensation.
Employees may not make any separate cash payment to purchase shares pursuant to
the Purchase Plan. No Participant may purchase Common Stock under the Purchase
Plan at a rate that exceeds $25,000 of Common Stock, determined at the time
options are granted, during each calendar year.
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Proposal to Adopt the 1996 Employee Stock Purchase Plan (continued)
On the first business day of each Offering Period, the Company will grant
to each eligible employee who is then a Participant in the Purchase Plan an
option to purchase shares of the Common Stock of the Company at an option price
determined by the Committee, which shall not be less than ninety-five percent
(95%) of the lesser of (a) the fair market value of the shares on the first
business day of an Offering Period, or (b) the fair market value of the shares
on the last business day of such Offering Period. Shares are purchased on the
last day of the Offering Period. A participant may voluntarily withdraw from the
Purchase Plan at any time during an Offering Period by filing notice with the
Company, and any accumulated payroll deductions applicable to such option will
be refunded.
Amendments
The Board may at any time amend or terminate the Purchase Plan, except that
such termination cannot affect options previously granted under the plan, nor
may any amendment make any change in an option previously granted which would
adversely affect the right of any Participant, nor may any amendment be made
without approval of the stockholders of the company within twelve (12) months of
the adoption of such amendment if such amendment would authorize the sale of
more shares than are authorized for issuance under the Purchase Plan or would
change the designation of corporations whose employees may be offered options
under the plan. Notwithstanding any other provision of the plan to the contrary,
in the event of an amendment to the Purchase Plan which affects the rights or
privileges of options to be offered under the plan, each Participant with an
outstanding option shall have the right to exercise such outstanding option on
the effective date of the amendment and to participate in the Purchase Plan for
the remaining term of such outstanding option pursuant to the terms and
conditions of the plan as amended.
Federal Income Tax Consequences
The Purchase Plan is intended to qualify as an employee stock purchase plan
within the meaning of Section 423 of the Internal Revenue Code of 1986 ("Code").
Under the Code, an employee who elects to participate in an offering under the
plan will not realize income at the time the offering commences or when the
shares purchased under the Purchase Plan are transferred to him or her. If an
employee disposes of such shares after two years from the date the offering of
such shares commences and after one year from the date of the transfer of such
shares to him or her, the employee will be required to include in income as
compensation for the year in which such disposition occurs, an amount equal to
the lesser of (i) the excess of the fair market value of such shares at the time
of disposition over the purchase price, or (ii) the excess of the fair market
value of the shares at the time the option was granted over the exercise price
(determined as if the option were exercised on the date of grant). The employee
basis in the shares disposed of will be increased by an amount equal to the
amount so includable in his or her income as compensation, and any gain or loss
computed with reference to such adjusted basis which is recognized at the time
of the disposition will be a capital gain or loss, either short-term or
long-term, depending on the holding period for such shares. In such event, the
Company will not be entitled to any tax deduction from income.
If any employee disposes of the shares purchased under the Purchase Plan
within such two-year or one-year period, the employee will be required to
include in income, as compensation for the year in which such disposition
occurs, an amount equal to the excess of the fair market value of such shares on
the date of purchase over the purchase price. The employee's basis in such
shares disposed of will be increased by an amount equal to the amount includable
in his or her income as compensation, and any gain or loss computed with
reference to such adjusted basis which is recognized at the time of disposition
will be a capital gain or loss, either short-term or long-term, depending on the
holding period for such shares. In the event of a disposition within such
two-year or one-year period, the Company will be entitled to a tax deduction
from income equal to the amount the employee is required to include in income as
a result of such disposition.
-14-
Proposal to Adopt the 1996 Employee Stock Purchase Plan (continued)
Benefits
Participation in the Purchase Plan and the level of contributions are
totally at the discretion of employees of the Company. Accordingly, it is not
possible to set forth amounts of such shares to be purchased or the benefits to
be received by officers and employees under the Purchase Plan. In general,
Participants will receive a benefit equal to the discount from the market price
on the Common Stock, which will be five percent of the market value of a share
of Common Stock as reported by the Nasdaq Stock Market, times the number of
shares purchased under the plan.
Stockholder Approval
Stockholder ratification of the Purchase Plan will enable Participants to
qualify for certain exemptive treatment from the short-swing profit provisions
of Section 16 (b) of the Exchange Act, to satisfy requirements for employee
stock purchase plans under the Code and to comply with listing requirements for
the Nasdaq Stock Market.
The Board of Directors recommends that stockholders vote FOR adoption of
The 1996 Employee Stock Purchase Plan.
PROPOSAL TO RATIFY THE APPOINTMENT OF THE INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed Coopers & Lybrand
L.L.P. as independent auditors of the Company for the year ending December 31,
1996, and further directed that the selection of auditors be submitted for
ratification by stockholders at the Annual Meeting.
The Company has been advised by Coopers & Lybrand L.L.P. that neither that
firm nor any of its associates has any relationship with the Company other than
the usual relationship that exists between independent certified public
accountants and clients. Coopers & Lybrand L.L.P. will have representatives at
the Annual Meeting who will have an opportunity to make a statement, if they so
desire, and will be available to respond to appropriate questions.
The Board of Directors recommends that stockholders vote FOR the
ratification of the appointment of Coopers & Lybrand L.L.P. as independent
auditors for the year ending December 31, 1996.
-15-
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have presented at the next
annual meeting and included in the management proxy materials relating to such
meeting must be received at the main office of the Company no later than
November 28, 1996. If such proposal is in compliance with all of the
requirements of Rule 14a-8 promulgated under the Securities Exchange Act of
1934, it will be included in the proxy statement and set forth on the form of
proxy issued for the next annual meeting of stockholders. It is urged that any
such proposals be sent by certified mail, return receipt requested.
OTHER MATTERS
Management is not aware of any business to come before the Annual Meeting
other than those matters described herein. However, if any other matters should
properly come before the Annual Meeting, it is intended that the proxies
solicited hereby will be voted with respect to those other matters in accordance
with the judgment of the persons voting the proxies.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of the Company's Common Stock. In addition to
solicitations by mail, directors, officers and employees of the Company may
solicit proxies personally or by telephone without additional compensation.
ANNUAL REPORTS AND FINANCIAL STATEMENTS
A copy of the Company's Annual Report to Stockholders for the year ended
December 31,1995 accompanies this Proxy Statement. Copies of the Company's Form
10-K and/or additional copies of the Company's Annual Report to Stockholders may
be obtained by written request. Such written request should be directed to
Patricia Ellick, Progress Financial Corporation, Plymouth Meeting Executive
Campus, 600 West Germantown Pike, Plymouth Meeting, PA 19462.
By Order of the Board of Directors
/s/ Eric J. Morgan
Eric J. Morgan
Corporate Secretary
Plymouth Meeting, Pennsylvania
March 28, 1996
PROXY
PROGRESS FINANCIAL CORPORATION
Plymouth Meeting Executive Campus
600 West Germantown Pike
Plymouth Meeting, PA 19462
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS OF PROGRESS FINANCIAL
CORPORATION FOR USE ONLY AT AN ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
APRIL 30, 1996 AND AT ANY ADJOURNMENTS THEREOF.
The undersigned, being a stockholder of the Company, hereby appoints Eric
J. Morgan as proxy, with full power of substitution, to represent the
undersigned at the Annual Meeting of Stockholders of the Company to be held at
Plymouth Country Club, Plymouth and Belvoir Roads, Norristown, Pennsylvania on
Tuesday April 30, 1996 at 9:00 a.m., and at any adjournments of the said
meeting, and thereat to act with respect to all votes that the undersigned would
be entitled to cast, if then personally present, on the following matters and in
their discretion upon such other matters as may properly come before the
meeting.
(Continued and to be signed on the reverse side)
-----------------
SEE REVERSE
SIDE
-----------------
[ x } Please mark your
votes as in this
example
FOR WITHHELD
1. To elect four directors for a term of [ ] [ ]
three years and one director for a
two year term or until their
successors have been elected and
qualified.
Vote for, except vote withheld from the following nominee(s)
- ------------------------------------------------------------
Nominees for Director for a three year term
John E. F. Corson
Donald F. U. Goebert
Paul M. LaNoce
Janet E. Paroo
Nominee for Director for a two year term
H. Wayne Griest
FOR AGAINST ABSTAIN
2. To adopt the 1996 Employee Stock [ ] [ ] [ ]
Purchase Plan.
3. To ratify the appointment of [ ] [ ] [ ]
Coopers & Lybrand L.L.P. as the
Company's independent auditors for
the year ending December 31, 1996.
4. To transact such other business as may properly come before the meeting and
all adjournments thereof.
This Proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If not otherwise specified, this Proxy will be
voted "FOR" the election of nominees for Directors hereon and "FOR" Proposals 2
and 3 and otherwise at the discretion of the proxies with respect to any other
business which may properly come before the meeting or any adjournments thereof.
This Proxy may be revoked at any time prior to the time it is voted at the
annual meeting.
SIGNATURE(S) ____________________________________________ DATE ____________
SIGNATURES ______________________________________________ DATE ____________
Note: Sign exactly as name appears hereon. When signing in a representative
capacity please give title.