SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
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
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Willow Grove Bancorp, Inc.
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(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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Willow Grove Bancorp, Inc.
Welsh & Norristown Roads
Maple Glen, Pennsylvania 19002
(215) 646-5405
October 8, 1999
Dear Stockholder:
You are cordially invited to attend the first Annual Meeting of
Stockholders of Willow Grove Bancorp, Inc. The meeting will be held in the
Fairway Room at North Hills Country Club located at 99 Station Avenue, North
Hills, Pennsylvania, on Tuesday, November 9, 1999 at 11:00 a.m., Eastern Time.
The matters to be considered by stockholders at the Annual Meeting are described
in the accompanying materials.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend the
meeting in person. We urge you to mark, sign, and date your proxy card today and
return it in the envelope provided, even if you plan to attend the Annual
Meeting. This will not prevent you from voting in person, but will ensure that
your vote is counted if you are unable to attend.
Your continued support of and interest in Willow Grove Bancorp, Inc. is
sincerely appreciated.
Very truly yours,
Frederick A. Marcell, Jr.
President and Chief Executive Officer
WILLOW GROVE BANCORP, INC.
Welsh & Norristown Roads
Maple Glen, Pennsylvania 19002
(215) 646-5405
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on November 9, 1999
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Annual
Meeting") of Willow Grove Bancorp, Inc. (the "Company") will be held in the
Fairway Room at North Hills Country Club located at 99 Station Avenue, North
Hills, Pennsylvania, on Tuesday, November 9, 1999 at 11:00 a.m., Eastern Time,
for the following purposes, all of which are more completely set forth in the
accompanying Proxy Statement:
(1) To elect three directors for a three-year term expiring in 2002 and
one director for a one-year term expiring in 2000, and until their successors
are elected and qualified;
(2) To ratify the appointment by the Board of Directors of KPMG LLP as the
Company's independent auditors for the fiscal year ending June 30, 2000; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof. Management is not aware of any other such
business.
The Board of Directors has fixed October 1, 1999 as the voting record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting and at any adjournment thereof. Only those stockholders of record
as of the close of business on that date will be entitled to vote at the Annual
Meeting or at any such adjournment.
BY ORDER OF THE BOARD OF DIRECTORS
John T. Powers
Corporate Secretary
Maple Glen, Pennsylvania
October 8, 1999
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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.
- --------------------------------------------------------------------------------
WILLOW GROVE BANCORP, INC.
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
November 9, 1999
This Proxy Statement is furnished to holders of common stock, $0.01 par
value per share ("Common Stock"), of Willow Grove Bancorp, Inc. (the "Company"),
the parent holding company of Willow Grove Bank (the "Bank"). The Company
acquired all of the Bank's common stock issued in connection with the
reorganization of the Bank into the federal mutual holding company form of
ownership (the "Reorganization") in December 1998. Proxies are being solicited
on behalf of the Board of Directors of the Company to be used at the Annual
Meeting of Stockholders ("Annual Meeting") to be held in the Fairway Room at
North Hills Country Club located at 99 Station Avenue, North Hills,
Pennsylvania, on Tuesday, November 9, 1999 at 11:00 a.m., Eastern Time, and at
any adjournment thereof for the purposes set forth in the Notice of Annual
Meeting of Stockholders. This Proxy Statement is first being mailed to
stockholders on or about October 8, 1999.
The proxy solicited hereby, if properly signed and returned to the Company
and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. If no contrary instructions are given, each
proxy received will be voted for the nominees for director described herein, for
ratification of the appointment of KPMG LLP for fiscal 2000, and, upon the
transaction of such other business as may properly come before the meeting, in
accordance with the best judgment of the persons appointed as proxies. Any
stockholder giving a proxy has the power to revoke it at any time before it is
exercised by (i) filing with the Secretary of the Company written notice thereof
(Mr. John T. Powers, Corporate Secretary, Willow Grove Bancorp, Inc., Welsh &
Norristown Roads, Maple Glen, Pennsylvania 19002); (ii) submitting a
duly-executed proxy bearing a later date; or (iii) appearing at the Annual
Meeting and giving the Secretary notice of his or her intention to vote in
person. Proxies solicited hereby may be exercised only at the Annual Meeting and
any adjournment thereof and will not be used for any other meeting.
VOTING
Only stockholders of record at the close of business on October 1, 1999
("Voting Record Date") are entitled to notice of and to vote at the Annual
Meeting. On the Voting Record Date, there were 5,143,487 shares of Common Stock
issued and outstanding and the Company had no other class of equity securities
outstanding. Each share of Common Stock is entitled to one vote at the Annual
Meeting on all matters properly presented at the meeting. Directors are elected
by a plurality of the votes cast with a quorum present. Abstentions are
considered in determining the presence of a quorum and will not affect the
plurality vote required for the election of directors. The affirmative vote of a
majority of the total votes present in person and by proxy is required to ratify
the appointment of the independent auditors. The proposal for ratification of
the auditors is considered a "discretionary" item upon which brokerage firms may
vote in their discretion on behalf of their clients if such clients have not
furnished voting instructions and for which there will not be "broker
non-votes."
As indicated below under "Beneficial Ownership of Common Stock by Certain
Beneficial Owners and Management," Willow Grove Mutual Holding Company (the
"MHC") owns a majority of the outstanding Common Stock as of the Voting Record
Date. The MHC intends to vote all of the shares it owns for the Board's nominees
for director and for the proposal to ratify the appointment of KPMG LLP as the
Company's independent auditors, thereby ensuring that a quorum will exist at the
Annual Meeting, and that each of such proposals will be adopted.
- 2 -
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR
AND EXECUTIVE OFFICERS
Election of Directors
The Bylaws of the Company provide that the Board of Directors shall be
divided into three classes as nearly equal in number as the then total number of
directors constituting the Board of Directors permits. The directors shall be
elected by the stockholders of the Company for staggered terms, or until their
successors are elected and qualified. Pursuant to the Bylaws of the Company,
Elizabeth Gemmill was elected as a director by the Board of Directors of the
Company to a term expiring at the Annual Meeting in order to fill the vacancy
created upon the retirement of former director Stanley Kitzelman in July 1999.
In order to keep the three classes of directors as nearly equal in number as
possible, Elizabeth Gemmill has been nominated for a one-year term expiring in
2000.
At the Annual Meeting, stockholders of the Company will be asked to elect
one class of directors, consisting of three directors, for a three-year term
expiring in 2002, and one director for a one-year term expiring in 2000, and
until their successors are elected and qualified.
No nominee for director is related to any other director or executive
officer of the Company by blood, marriage or adoption. Each nominee currently
serves as a director of the Company and of the Bank.
Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted for the election of the nominees for director listed
below. If any person named as a nominee should be unable or unwilling to stand
for election at the time of the Annual Meeting, the proxies will nominate and
vote for any 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 nominees listed below may not be able to serve as a director if elected.
The following tables present information concerning the nominees for
director of the Company, including tenure as a director. All of the below-listed
directors also serve as directors of the Bank.
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERMS EXPIRING IN 2002
Company
Principal Occupation During Director
Name Age (1) the Past Five Years Since
- ------------------------- -------- ------------------------------------------------------ ---------
William W. Langan 58 Chairman of the Board; Director of the Bank since 1998
1986; President and owner of Marmetal Industries,
Inc., Horsham, Pennsylvania.
A. Brent O'Brien 61 Director of the Bank since 1996; President and owner 1998
of the insurance broker firm Bean, Mason & Eyer,
Inc., Doylestown, Pennsylvania.
Samuel H. Ramsey, III 56 Director of the Bank since 1988; President and owner 1998
of Samuel H. Ramsey, III, Certified Public
Accountants since 1973.
- -------------
(1) As of June 30, 1999.
- 3 -
NOMINEE FOR DIRECTOR FOR ONE-YEAR TERM EXPIRING IN 2000
Company
Principal Occupation During Director
Name Age (1) the Past Five Years Since
- ------------------------- -------- ------------------------------------------------------ ---------
Elizabeth H. Gemmill 53 Director of the Bank since 1999; 1999
Managing Trustee of Warwick
Foundation, Jamison, Pennsylvania;
previously Vice President and
Secretary of Tasty Baking Company,
Philadelphia, Pennsylvania.
The Board of Directors recommends that you vote FOR election of the
nominees for director.
DIRECTORS WHOSE TERMS ARE CONTINUING
Directors with a Term Expiring in 2000
Company
Principal Occupation During Director
Name Age (1) the Past Five Years Since
- ------------------------- -------- ------------------------------------------------------ ---------
Lewis W. Hull 82 Director of the Bank since 1974; 1998
Chairman of Hull Corp and Hull
Company, manufacturing companies
located in Hatboro, Pennsylvania and
controlling shareholder of Hull Corp.
Charles F. Kremp, 3rd 56 Director of the Bank since 1994; 1998
President and owner of Charles F.
Kremp, 3rd, Florist, Willow Grove,
Pennsylvania.
Directors with a Term Expiring in 2001
Company
Principal Occupation During Director
Name Age (1) the Past Five Years Since
- ------------------------- -------- ------------------------------------------------------ ---------
J. Ellwood Kirk 69 Director of the Bank since 1978; 1998
Currently retired; Previously, Mr.
Kirk served as President of the Bank.
Frederick A. Marcell, Jr. 61 Director of the Bank since 1992; 1998
President and Chief Executive
Officer of the Bank since July 1992.
William B. Weihenmayer 52 Director of the Bank since 1996; 1998
self-employed real estate investor,
Huntingdon Valley, Pennsylvania.
- -------------------
(1) As of June 30, 1999.
- 4 -
Executive Officers Who Are Not Directors
Set forth below is information with respect to the principal occupations
during the last five years for the three executive officers of the Company and
the Bank who do not serve as directors of the Company.
Name Age (1) Principal Occupation During the Past Five Years
- ---------------------- ------- -----------------------------------------------
Thomas M. Fewer 47 Senior Vice President of the Company;
Senior Vice President and Senior Lending Officer
of the Bank since 1997; and prior thereto, served
as Vice President and Senior Lending Officer of
the Bank.
John J. Foff, Jr. 48 Senior Vice President, Chief Financial Officer and
Treasurer of the Company and the Bank since 1997;
and previously, Vice President and Treasurer of the
Bank.
John T. Powers 49 Senior Vice President and Corporate
Secretary of the Company; Senior Vice President,
Community Banking and Corporate Secretary of the
Bank since 1997; and prior thereto, Vice President
and Corporate Secretary of the Bank.
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(1) As of June 30, 1999.
Compliance with Section 16(a) of the 1934 Act
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), requires the officers and directors, and persons who own more than
10% of the Company's Common Stock to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the Nasdaq National
Market. Officers, directors and greater than 10% stockholders are required by
regulation to furnish the Company with copies of all Section 16(a) forms they
file. The Company knows of no person who owns 10% or more of the Company's
Common Stock other than Willow Grove Mutual Holding Company which owns 54.7% of
the Company's outstanding stock.
Based solely on review of the copies of such forms furnished to the
Company, or written representations from its officers and directors, the Company
believes that during, and with respect to, the fiscal year ended June 30, 1999,
the Company's officers and directors complied in all respects with the reporting
requirements promulgated under Section 16(a) of the 1934 Act.
Director Nominations; Meetings of the Board of the Company
Nominations for director of the Company are made by the Board of Directors
of the Company. During the fiscal year ended June 30, 1999, the Board of
Directors of the Company met 14 times. No director of the Company attended fewer
than 75% of the aggregate of the total number of Board meetings held during the
period for which he/she has been a director and the total number of meetings
held by all committees of the Board on which he/she served during the periods
that he/she served.
Stockholder Nominations
Article II, Section 14 of the Bylaws governs nominations for election to
the Board of Directors and requires all such nominations, other than those made
by the Board of Directors or committee appointed by the Board, to be made at a
meeting of stockholders called for the election of directors, and only by a
stockholder who has complied with the notice provisions in that section.
Stockholder nominations must be made pursuant to timely notice in writing to the
secretary of the Company. Generally, to be timely, a stockholder's notice must
be made in writing and delivered to the secretary of the Company not later than
five (5) days prior to the date of the annual meeting of stockholders of the
Company. Upon delivery, such nominations shall be posted in a conspicuous place
in each office of the Company. Any such nomination by a stockholder must be
delivered or received no later than the close of business on November 3, 1999.
- 5 -
Committees
The Board of Directors has established the following committees, among
others:
Audit Committee
The primary purpose of the Audit Committee, as set forth in the
committee's charter, is to assist the Board of Directors in fulfilling its
fiduciary responsibilities relating to corporate accounting and reporting
practices. The Audit Committee reviews with management and the independent
auditors the systems of internal control, reviews the annual financial
statements, including the Form 10-K and monitors the Company's adherence in
accounting and financial reporting to generally accepted accounting principles.
The Audit Committee is comprised of three or more outside directors; and the
current members of the Audit Committee are Messrs. Hull, Weihenmayer and Kirk,
who is Chairman of the committee. The Audit Committee met five times in 1999.
Compensation and Benefits Committee
It is the responsibility of the new Compensation and Benefits Committee of
the Board of Directors ("Committee") to institute a program which effectively
provides incentive for executive management to lead the Company to its full
potential. In January 1999, directors appointed to this Committee were Messrs.
Langan, Hull, and O'Brien. No member of the Committee is a current officer or
employee of the Company, the Bank or any of its subsidiaries. The report of the
Committee with respect to compensation and benefits for the Chief Executive
Officer and all other executive officers is set forth below.
Report of the Compensation Committee
The purpose of the Compensation Committee is to assist the Company and the
Bank in attracting and retaining qualified management, motivating executives to
achieve performance goals as outlined in the Company's business plan and to
ensure that executive compensation is related to and supports the Company's
overall objective of enhancing stockholder value.
In order to establish base salary levels for the Company's Chief Executive
Officer and the three other Senior Officers, the Compensation Committee
considered the financial performance of the Company, including net income of the
Company and various financial ratios. The Compensation Committee also considered
the additional responsibilities related to being a public company. Further, with
respect to the Bank's other officers and employees, the Compensation Committee
reviewed and approved the salary increases and bonuses as submitted by the
Bank's Senior Officers.
Based upon the above factors, the Compensation Committee increased Mr.
Marcell's base salary by $25,000 or 17.6% to $167,000 for the fiscal year 1999.
The Compensation Committee provided for an average 5.7% salary increase for the
three other Senior Officers.
Following review and approval by the Compensation Committee, all issues
pertaining to executive compensation are submitted to the full Board of
Directors for their approval. No officer participates in the review of his or
her respective compensation.
William W. Langan, Chairman
Lewis W. Hull, Director
A. Brent O'Brien, Director
- 6 -
MANAGEMENT COMPENSATION
Summary Compensation Table
The following table sets forth a summary of certain information concerning
the compensation paid by the Bank (including amounts deferred to future periods
by the officers) for services rendered in all capacities during the fiscal years
ended June 30, 1999 and 1998 to the President and Chief Executive Officer of the
Bank and the three other officers of the Bank whose compensation exceeded
$100,000. The Company had not paid separate compensation to officers and
directors.
===================================================================================================================================
Annual Compensation Long Term Compensation
- -------------------------------------------------------------------------------------------------------------------
Other Awards Payouts
Name and Fiscal Annual --------------------------------------- All Other
Principal Position Year Salary Bonus Compensation Restricted Securities Compensation
Stock Underlying LTIP (3) (4)
Awards Options Payouts
- -----------------------------------------------------------------------------------------------------------------------------------
Frederick A. Marcell, Jr. (1)
President and Chief 1999 $167,000 $27,500 $20,043 (2) -- -- -- $18,150
Executive Officer 1998 142,000 21,675 -- -- -- -- 15,700
- -----------------------------------------------------------------------------------------------------------------------------------
Thomas M. Fewer
Senior Vice President and 1999 92,500 19,500 -- -- -- -- 11,475
Senior Lending Officer 1998 87,500 13,977 -- -- -- -- 10,937
- -----------------------------------------------------------------------------------------------------------------------------------
John J. Foff, Jr.
Senior Vice President, 1999 92,500 19,500 -- -- -- -- 11,475
Chief Financial Officer and 1998 87,500 13,977 -- -- -- -- 10,937
Treasurer
- -----------------------------------------------------------------------------------------------------------------------------------
John T. Powers
Senior Vice President,
Community Banking and 1999 92,500 19,500 -- -- -- -- 10,802
Corporate Secretary 1998 87,500 13,977 -- -- -- -- 10,079
===================================================================================================================================
- ---------------
(1) In fiscal 1998, the Bank adopted a supplemental executive retirement plan
("SERP") for the benefit of Mr. Marcell. The Bank accrued $234,000 with
respect to such SERP in fiscal 1998 and $18,000 in fiscal 1999.
(2) In fiscal 1999, the Bank awarded perquisites and other personal benefits
to Mr. Marcell including $7,718 for health insurance and a supplemental
life insurance premium of $7,435.
(3) Under the Bank's 401(k) profit sharing plan for fiscal 1999, $5,625,
$4,725, $4,725 and $4,052, respectively, was allocated to the accounts of
Messrs. Marcell, Fewer, Foff and Powers. In fiscal 1998, $5,050, $4,375,
$4,375 and $3,516, respectively, was allocated to the executive officers'
accounts.
(4) Under the Bank's money purchase pension plan in fiscal 1999, $12,525,
$6,750, $6,750 and $6,750, respectively, was allocated to the accounts of
Messrs. Marcell, Fewer, Foff and Powers. In fiscal 1998, $10,650, $6,562,
$6,562 and $6,562, respectively, was allocated to the executive officers'
accounts.
Employment Agreements
In connection with the Reorganization, the Bank (the "Employer") entered
into employment agreements with each of Messrs. Marcell, Fewer, Foff and Powers
(the "Executives"), which agreements superseded existing employment agreements
with such persons. The Employer has agreed to employ Mr. Marcell for a term of
two years
- 7 -
and Messrs. Fewer, Foff and Powers for a term of one year, in each case in their
current respective positions. The agreements with the Executives are at their
current salary levels. The Executives' compensation and expenses shall be paid
by the Bank in the same proportion as the time and services actually expended by
the Executives on behalf of the Employer. With respect to the Executives, the
employment agreements will be reviewed annually by the Board of Directors of the
Employer. The term of the Executives' employment agreements shall be extended
annually for a successive additional one-year period unless the Bank provides
notice not less than 30 days prior to such date, not to extend the employment
term.
Each of the employment agreements is terminable with or without cause by
the Employer. The Executives have no right to compensation or other benefits
pursuant to the employment agreements for any period after voluntary termination
or termination by the Employer for cause, disability, retirement or death. In
the event that (i) the Executive terminates his employment because of failure to
comply with any material provision of the employment agreement by the Employer
or the Employer changes the Executive's title or duties or (ii) the employment
agreement is terminated by the Employer other than for cause, disability,
retirement or death or by the executive as a result of certain adverse actions
which are taken with respect to the executive's employment following a change in
control of the Company, as defined, the Executives will be entitled to a cash
severance amount equal to their base salary plus bonus received in the prior
year, multiplied by the number of years in the initial term of the employment
agreement (two in the case of Mr. Marcell and one in the case of the other
Executives).
A change in control is generally defined in the employment agreements to
include any change in control of the Company required to be reported under the
federal securities laws, as well as (i) the acquisition by any person of 20% or
more of the Company's outstanding voting securities and (ii) a change in a
majority of the directors of the Company during any three-year period without
the approval of at least two-thirds of the persons who were directors of the
Company at the beginning of such period.
Although the above-described employment agreements could increase the cost
of any acquisition of control of the Company, management of the Company does not
believe that the terms thereof would have a significant anti-takeover effect.
The Company and/or the Bank may determine to enter into similar employment
agreements with other officers of the Company and/or the Bank in the future.
Directors' Compensation. Members of the Bank's Board of Directors, except
for Mr. Marcell, receive $1,000 per Board meeting and $500 per committee
meeting. The Chairman of the Board of Directors receives $1,260 per Board
meeting and the chairman of each committee receives $600 per committee meeting.
To receive such compensation, directors may not be absent for more than two
Board meetings. Unattended committee meetings are not compensated. Board fees
are subject to periodic adjustment by the Board of Directors.
In 1998, the Company adopted a non-qualified retirement plan for the
Bank's non-employee directors. Assuming the completion of ten years of service,
this plan provides for fixed annual payments at retirement of $12,000 a year for
a period of ten years. After six years, the individual director becomes 20%
vested with the vesting benefit increasing by 20% per year through year ten.
This plan provided credit for years of service prior to the plan's adoption.
Money Purchase Plan. The Bank maintains a Money Purchase Plan (the
"Retirement Plan") which provides retirement benefits for all full-time
employees who have attained the age of 21 and have completed one year of service
with the Bank. The Retirement Plan is a tax-qualified money purchase plan
pursuant to which the Bank's contributions are fixed based upon the compensation
of each participant. For each participant, the Bank's contribution is an amount
equal to 7.5% of the participant's base salary. With the consent of the
Retirement Plan's administrator, the Retirement Plan may also accept rollover
contributions from employees. Messrs. Marcell, Fewer, Foff and Powers are
trustees of the Retirement Plan. A participant's account balance becomes 100%
vested after completion of seven years of service. A participant also becomes
100% vested in his account balance in the event of death, disability or
retirement. Normal retirement age under the Retirement Plan is 65. Retirement
expense is funded as accrued and amounted to $182,000 for fiscal year 1998 and
$193,000 for fiscal year 1999.
- 8 -
Supplemental Executive Retirement Plan. The Bank adopted a supplemental
executive retirement plan ("SERP") in fiscal 1998 in order to supplement the
retirement benefits payable to Mr. Marcell pursuant to the Bank's qualified
plans. The SERP provides for payments for a period of ten years beginning at
retirement based on a percentage of annual cash compensation. Assuming Mr.
Marcell remains in the Bank's employ at age 68, the SERP provides for an annual
benefit equal to 50% of his annual cash compensation. In the event that Mr.
Marcell retires prior to age 68, his benefit will be reduced in increments of 5%
per year. The Bank accrued $234,000 and $18,000 on a pre-tax basis, $144,000 and
$11,000 after tax, for the years ended June 30, 1998 and 1999, respectively,
which included estimated costs for past service.
Transactions With Certain Related Persons
In accordance with applicable federal laws and regulations, the Bank
offers mortgage loans to its directors, officers and employees as well as
members of their immediate families for the financing of their primary
residences and certain other loans. These loans are generally made on
substantially the same terms as those prevailing at the time for comparable
transactions with non-affiliated persons. It is the belief of management that
these loans neither involve more than the normal risk of collectibility nor
present other unfavorable features.
Section 22(h) of the Federal Reserve Act generally provides that any
credit extended by a savings institution, such as the Bank, to its executive
officers, directors and, to the extent otherwise permitted, principal
stockholder(s), or any related interest of the foregoing, must be on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions by the savings institution
with non-affiliated parties; unless the loans are made pursuant to a benefit or
compensation program that (i) is widely available to employees of the
institution and (ii) does not give preference to any director, executive officer
or principal stockholder, or certain affiliated interests of either, over other
employees of the savings institution, and must not involve more than the normal
risk of repayment or present other unfavorable features.
- 9 -
Performance Graph
The following graph demonstrates comparison of the cumulative total
returns for the Common Stock of the Company, the NASDAQ Composite Index and the
SNL Securities All Thrift Index for the period commencing on December 24, 1998,
the day the common stock began trading on the Nasdaq, to the close of trading on
June 30, 1999.
Willow Grove Bancorp, Inc.
[GRAPHIC OMITTED]
Period Ending
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Index 12/24/98 12/31/98 1/31/99 2/28/99 3/31/99 4/30/99 5/31/99 6/30/99
- -------------------------------------------------------------------------------------------------------------------
Willow Grove Bancorp, Inc. 100.00 101.84 102.45 100.00 95.70 98.15 97.71 98.33
NASDAQ 100.00 101.37 116.08 105.67 113.30 116.33 113.60 123.72
SNL Thrift Index 100.00 104.71 106.37 103.56 105.44 110.99 105.80 104.18
The above graph represents $100 invested in the Common Stock at $10.00 per
share on December 24, 1998, the date it commenced trading on the Nasdaq. The
cumulative total returns include the payment of dividends by the Company.
- 10 -
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Voting Record Date, certain
information as to the Common Stock beneficially owned by (i) each person or
entity, including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), who or which was
known to the Company to be the beneficial owner of more than 5% of the issued
and outstanding Common Stock, (ii) the directors of the Company, (iii) certain
executive officers of the Company; and (iv) all directors and executive officers
of the Company as a group.
Amount and Nature
Name of Beneficial of Beneficial
Owner or Number of Ownership as of Percent of
Persons in Group October 1, 1999(1) Common Stock
- -------------------- ------------------ ------------
Willow Grove Mutual Holding Company
Welsh & Norristown Roads
Maple Glen, Pennsylvania 19002 2,812,974 54.7%
Directors:
Lewis W. Hull 20,000 *
J. Ellwood Kirk 13,000(2) *
Elizabeth H. Gemmill --
Charles F. Kremp, 3rd 10,000 *
William W. Langan 15,000(3) *
Frederick A. Marcell, Jr. 30,650(4) *
A. Brent O'Brien 15,000(5) *
Samuel H. Ramsey, III 28,900(6) *
William B. Weihenmayer 32,500(7) *
Other Executive Officers:
Thomas M. Fewer 25,938(8) *
John J. Foff, Jr. 8,000(9) *
John T. Powers 7,600(10) *
All Directors and Executive Officers of the
Company as a group (12 persons) 206,588 4.0%
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* Represents less than 1% of the outstanding stock.
(1) Based upon filings made pursuant to the Exchange Act and information
furnished by the respective individuals. Under regulations promulgated
pursuant to the Exchange Act, shares of Common Stock are deemed to be
beneficially owned by a person if he or she directly or indirectly has or
shares (i) voting power, which includes the power to vote or to direct the
voting of the shares, or (ii) investment power, which includes the power
to dispose or to direct the disposition of the shares. Unless otherwise
indicated, the named beneficial owner has sole voting and dispositive
power with respect to the shares.
(2) Includes 3,000 shares held by Mr. Kirk's spouse.
(3) All 15,000 shares are held by Mr. Langan's spouse.
(Footnotes continue on following page)
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(Footnotes continued from previous page)
(4) Includes 350 shares held by Mr. Marcell's children, 30,000 shares held in
Mr. Marcell's account in the Bank's (401)(k) retirement plan and Mr.
Marcell disclaims beneficial ownership of 300 shares held by Mr. Marcell's
spouse in her IRA account.
(5) All 15,000 shares are held jointly with Mr. O'Brien's spouse.
(6) Includes 3,000 shares held by Mr. Ramsey's spouse, 1,000 shares held in
Mr. Ramsey's IRA account and 6,400 shares held in a trust for which Mr.
Ramsey is a beneficiary.
(7) Includes 5,000 shares held by Mr. Weihenmayer's children.
(8) Includes 1,000 shares held by Mr. Fewer's children and 14,938 shares held
in Mr. Fewer's account in the Bank's 401(k) retirement plan.
(9) Includes 1,300 shares held in Mr. Foff's IRA account and 6,700 shares held
in Mr. Foff's account in the Bank's 401(k) retirement plan.
(10) Includes 100 shares held by Mr. Powers' children and 6,000 shares held in
Mr. Powers' account in the Bank's 401(k) retirement plan.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed KPMG LLP, independent
certified public accountants, to perform the audit of the Company's financial
statements for the year ending June 30, 2000, and further directed that the
selection of auditors be submitted for ratification by the stockholders at the
Annual Meeting.
The Company has been advised by KPMG LLP that neither that firm nor any of
its associates has any relationship with the Company or its subsidiaries other
than the usual relationship that exists between independent certified public
accountants and clients. KPMG LLP will have one or more 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 you vote FOR the ratification of
the appointment of KPMG LLP as independent auditors for the fiscal year ending
June 30, 2000.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
materials of the Company relating to the next annual meeting of stockholders of
the Company, which is scheduled to be held in October 2000, must be received at
the principal executive offices of the Company, Welsh & Norristown Roads, Maple
Glen, Pennsylvania 19002, Attention: John T. Powers, Corporate Secretary, no
later than June 10, 2000. If such proposal is in compliance with all of the
requirements of Rule 14a-8 under the 1934 Act, it will be included in the proxy
statement and set forth on the form of proxy issued for such annual meeting of
stockholders. It is urged that any such proposals be sent certified mail, return
receipt requested.
Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the 1934 Act may be
brought before an annual meeting pursuant to Article II Section 15 of the
Company's Bylaws.
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ANNUAL REPORTS
A copy of the Company's Annual Report to Stockholders for the year ended
June 30, 1999 accompanies this Proxy Statement. Such annual report is not part
of the proxy solicitation materials.
Upon receipt of a written request, the Company will furnish to any
stockholder without charge a copy of the Company's Annual Report on Form 10-K
for fiscal 1999 required to be filed with the Commission under the Exchange Act.
Such written requests should be directed to Mr. John J. Foff, Jr., Senior Vice
President, Willow Grove Bancorp, Inc., Welsh & Norristown Roads, Maple Glen,
Pennsylvania 19002. The Form 10-K is not part of the proxy solicitation
materials.
OTHER MATTERS
Management is not aware of any business to come before the Annual Meeting
other than the matters described above in this Proxy Statement. However, if any
other matters should properly come before the 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 the 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 the 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.
BY ORDER OF THE BOARD OF DIRECTORS
John T. Powers
Corporate Secretary
October 8, 1999
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REVOCABLE PROXY
WILLOW GROVE BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF WILLOW
GROVE BANCORP, INC. FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
NOVEMBER 9, 1999 AND AT ANY ADJOURNMENT THEREOF.
The undersigned hereby appoints the Board of Directors of Willow Grove
Bancorp, Inc. (the "Company"), or any successors thereto, as proxies with full
powers of substitution, to represent and vote, as designated below, all the
shares of Common Stock of the Company held of record by the undersigned on
October 1, 1999 at the Annual Meeting of Stockholders to be held in the Fairway
Room at North Hills Country Club, located at 99 Station Avenue, North Hills,
Pennsylvania on Tuesday, November 9, 1999, at 11:00 a.m., Eastern Time, and any
adjournment thereof.
1. The election as directors of all nominees listed
(except as marked to the contrary below):
|_| FOR |_| WITHHOLD |_| FOR ALL EXCEPT
Nominees for three-year term expiring in 2002: William W. Langan, A. Brent
O'Brien and Samuel H. Ramsey, III.
Nominee for one-year term expiring in 2000: Elizabeth H. Gemmill.
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
- ------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT by the Board of Directors of KPMG LLP as
the Company's independent auditors for the year ending June 30, 2000
|_| FOR |_| WITHHOLD |_| FOR ALL EXCEPT
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
The Board of Directors recommends that you vote "FOR" all of the nominees listed
above and "FOR" the ratification of KPMG LLP.
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. THE SHARES OF THE
COMPANY'S COMMON STOCK WILL BE VOTED AS SPECIFIED. IF NOT OTHERWISE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE BOARD OF DIRECTORS' NOMINEES TO
THE BOARD OF DIRECTORS, FOR RATIFICATION OF THE COMPANY'S INDEPENDENT AUDITORS,
AND OTHERWISE AT THE DISCRETION OF THE PROXIES. YOU MAY REVOKE THIS PROXY AT ANY
TIME PRIOR TO THE TIME IT IS VOTED AT THE ANNUAL MEETING.
Dated: ____________, 1999
--------------------------------
--------------------------------
Signatures
Please sign this proxy exactly as your names(s) appear(s) on this proxy. When
signing in a representative capacity, please give title. When shares are held
jointly, only one holder need sign.
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PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
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