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 [ ] Confidential, for Use of the
Commission Only
[X] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
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:______________________________________________________
(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 (set forth the
amount on which the filing fee is calculated and state how it
was determined):______________________________________________
(4) Proposed maximum aggregate value of transaction:______________
(5) Total fee paid:_______________________________________________
[ ] 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:_______________________________________
(2) Form, schedule or registration statement no.:_________________
(3) Filing party:_________________________________________________
(4) Date filed: __________________________________________________
[WILLOW GROVE BANCORP, INC. LETTERHEAD]
October 10, 2001
Dear Stockholder:
You are cordially invited to attend the third 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 Thursday, November 8, 2001 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,
/s/ Frederick A. Marcell Jr.
Frederick A. Marcell Jr.
President and Chief Executive Officer
WILLOW GROVE BANCORP, INC.
Welsh & Norristown Roads
Maple Glen, Pennsylvania 19002
(215) 646-5405
__________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on November 8, 2001
__________________
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 Thursday, November 8, 2001 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 two directors for a three-year term expiring in 2004 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, 2002; and
(3) To transact such other business as may properly come before the
meeting or at any adjournment thereof. Management is not aware of any other such
business.
The Board of Directors has fixed September 20, 2001 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
/s/ John T. Powers
John T. Powers
Corporate Secretary
Maple Glen, Pennsylvania
October 10, 2001
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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.
__________________
PROXY STATEMENT
__________________
ANNUAL MEETING OF STOCKHOLDERS
November 8, 2001
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 Thursday, November 8, 2001 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 10, 2001.
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 2002, 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 September 20,
2001 ("Voting Record Date") are entitled to notice of and to vote at the Annual
Meeting. On the Voting Record Date, there were 4,937,387 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 (a majority of the outstanding
shares of the Company entitled to vote represented in person or by proxy)
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 authorized by the Bylaws permits. The directors are elected by the
stockholders of the Company for staggered terms and until their successors are
elected and qualified.
At the Annual Meeting, stockholders of the Company will be asked to
elect one class of directors, consisting of two directors, for a three-year term
expiring in 2004 and until their successors are elected and qualified. Mr. J.
Ellwood Kirk, who has served as a director of the Bank since 1978, will retire
effective October 31, 2001 and therefore was not nominated for re-election to a
new term. The Company's Bylaws provide for eight directors upon Mr. Kirk's
retirement.
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, the MHC 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. Messrs. Marcell and
Weihenmayer also serve as directors of the Bank and the MHC.
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERMS EXPIRING IN 2004
Company
Principal Occupation During Director
Name Age (1) the Past Five Years Since
---------------------- ----------- ------------------------------------------------------ -------------
Frederick A. Marcell Jr. 63 Director of the Bank since 1992; President and Chief 1998
Executive Officer of the Bank since July 1992.
William B. Weihenmayer 54 Director of the Bank since 1996; real estate investor, 1998
Huntingdon Valley, Pennsylvania. Previous partner of
the Linpro Company, a national real estate developer.
-------------
(1) As of June 30, 2001.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ELECTION OF THE NOMINEES FOR DIRECTOR.
- 3 -
DIRECTORS WHOSE TERMS ARE CONTINUING
DIRECTORS WITH A TERM EXPIRING IN 2002
Company
Principal Occupation During Director
Name Age (1) the Past Five Years Since
---------------------- ----------- ------------------------------------------------------ -------------
William W. Langan 60 Chairman of the Board; Director of the Bank since 1998
1986; retired President of Marmetal Industries, Inc.,
Horsham, Pennsylvania.
A. Brent O'Brien 63 Director of the Bank since 1996; insurance consultant 1998
and former President and Owner of the insurance
broker firm Bean, Mason & Eyer, Inc., Doylestown,
Pennsylvania.
Samuel H. Ramsey, III 58 Director of the Bank since 1988; Owner of Samuel H. 1998
Ramsey, III, Certified Public Accountants since 1973.
-------------------
(1) As of June 30, 2001.
DIRECTORS WITH A TERM EXPIRING IN 2003
Company
Principal Occupation During Director
Name Age (1) the Past Five Years Since
---------------------- ----------- ------------------------------------------------------ -------------
Lewis W. Hull 84 Director of the Bank since 1973; Chairman and 1998
controlling shareholder of Hull Corp., a manufacturing
company located in Warminster, Pennsylvania.
Charles F. Kremp, 3rd 58 Director of the Bank since 1994; Owner of Kremp 1998
Florist, Willow Grove, Pennsylvania.
Rosemary C. Loring, Esq. 51 President of the Remedy Intelligent Staffing franchise 2000
in Bucks and Montgomery Counties, Pennsylvania since
1996; previously, Regional Vice President - Consumer
Banking for First Union National Bank.
-------------------
(1) As of June 30, 2001.
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, 2001, 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.
- 4 -
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 to the Corporate
Secretary. Generally, to be timely, a stockholder's notice must be made in
writing and delivered to the Corporate Secretary 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 with respect to the Annual
Meeting must be delivered or received no later than the close of business on
November 3, 2001.
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 49 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.
Christopher E. Bell 43 Senior Vice President and Chief Financial Officer of the Company and the
Bank since July 2000; previously, Vice President and Controller of the Bank;
and prior thereto, served as Assistant Vice President of the Bank.
John T. Powers 51 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.
------------------
(1) As of June 30, 2001.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange 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 57.0% 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, 2001,
the Company's officers and directors complied in all respects with the reporting
requirements promulgated under Section 16(a) of the Exchange Act, except Ms.
Loring who was late filing a Form 3, which was subsequently filed.
- 5 -
COMMITTEES
The Board of Directors of the Company has established an Audit
Committee and Compensation and Benefits Committee. Nominations for director of
the Company are made by the full Board of Directors of the Company.
AUDIT COMMITTEE. The primary purpose of the Audit Committee, as set
forth in the committee's charter adopted by the Board of Directors and attached
hereto as Appendix A, 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 directors who are independent
directors as defined in Rule 4200(a)(15) of the National Association of
Securities Dealers' listing standards. The current members of the Audit
Committee are Messrs. Hull and Weihenmayer, Ms. Loring and Mr. Kirk, who is
Chairman of the committee. The Audit Committee met six times in fiscal 2001.
REPORT OF THE AUDIT COMMITTEE
The functions of the Audit Committee include the following: performing
all duties assigned by the Board of Directors; reviewing with management and
independent public accountants the basis for the reports issued by the Bank and
the Company pursuant to federal regulatory requirements; meeting with the
independent public accountants to review the scope of audit services,
significant accounting changes and audit conclusions regarding significant
accounting estimates; assessments as to the adequacy of internal controls and
the resolution of any significant deficiencies or material control weaknesses;
and assessing compliance with laws and regulations and overseeing the internal
audit function.
The Audit Committee has reviewed and discussed the Company's audited
financial statements with management. The Audit Committee has discussed with the
Company's independent auditors, KPMG LLP, the matters required to be discussed
by Statement on Auditing Standards No. 61, "Communication with Audit
Committees." The Audit Committee has received the written disclosures and the
letter from the independent auditors required by Independence Standards Board
Standard No. 1, and has discussed with the Company's independent auditor, the
independent auditor's independence. Based on the review and discussions referred
to above in this report, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for fiscal year 2001 for filing with the Securities
and Exchange Commission.
J. Ellwood Kirk, Audit Committee Chairman
Lewis W. Hull
William B. Weihenmayer
Rosemary C. Loring, Esq.
COMPENSATION AND BENEFITS COMMITTEE. It is the responsibility of the
Compensation and Benefits Committee of the Board of Directors ("Compensation
Committee") to institute a program which effectively provides incentive for
executive management to lead the Company to its full potential. The current
members of the committee are Messrs. Langan, Hull and O'Brien. No member of the
Compensation Committee is a current officer or employee of the Company, the Bank
or any of its subsidiaries. The report of the Compensation Committee with
respect to compensation and benefits for the Chief Executive Officer and all
other executive officers is set forth below. The Compensation Committee met six
times in fiscal 2001.
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REPORT OF THE COMPENSATION COMMITTEE
The principal responsibility of the Compensation Committee is to
establish policy for the compensation of senior management of the Company and
Bank consisting of a Chief Executive Officer, and three executive officers. The
scope of the program includes the Compensation Committee's assistance in
recruiting and retaining the highest possible level of qualified management, the
development and implementation of methods of motivating executives, rewarding
management for exemplary performance, and ensuring that senior management's
compensation is aligned with the Company's objectives in enhancing stockholder
value.
The Compensation Committee considers the following factors, among
others, in determining base salary levels for senior management: the individual
performance of the officer; the Company's overall financial performance; the
achievement of specific goals in the Company's business plan; and the
compensation paid by similar sized competitors with closely related
responsibilities.
All Compensation Committee recommendations and issues regarding
executive compensation were submitted to the full Board of Directors for
approval. During the fiscal year 2001, the Board of Directors approved a base
salary increase for Mr. Marcell of $23,000 to $205,000. The Compensation
Committee also reviewed and approved salary increases and bonuses as recommended
by the Bank's senior officers for the Bank's other officers and employees. No
officer or employee participated in the review of his or her respective
compensation. During the fiscal year 2001, no members of the Compensation
Committee were considered insiders, nor were there any interlocking
relationships or relationships with the Company.
William W. Langan, Compensation Committee Chairman
Lewis W. Hull
A. Brent O'Brien
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. The Bank's policy is in
compliance with Section 22(h) of the Federal Reserve Act.
- 7 -
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, 2001, 2000 and 1999 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 has not paid separate compensation
to officers and directors.
====================================================================================================================================
Annual Compensation Long Term Compensation
----------------------------------------- ---------------------------
Awards
---------------------------
Restricted Securities All Other
Name and Fiscal Other Annual Stock Underlying Compensation
Principal Position Year Salary Bonus Compensation (2) Awards(3)(4) Options (5)(6)(7)
------------------------------------------------------------------------------------------------------------------------------------
Frederick A. Marcell Jr. (1) 2001 $204,558 $27,000 $ - - $ - - - - $26,108
President and Chief 2000 182,000 31,500 - - 162,500 16,800 24,238
Executive Officer 1999 167,000 27,500 20,043 - - - - 17,213
------------------------------------------------------------------------------------------------------------------------------------
Christopher E. Bell 2001 $99,577 $12,000 $ - - $ - - - - $15,662
Senior Vice President, 2000 78,020 11,000 - - 41,878 4,000 12,620
Chief Financial Officer 1999 70,000 8,700 - - - - - - 8,564
and Treasurer
------------------------------------------------------------------------------------------------------------------------------------
Thomas M. Fewer 2001 $119,760 $16,000 $ - - $ - - - - $19,129
Senior Vice President and 2000 107,500 18,000 - - 84,870 11,200 17,164
Senior Lending Officer 1999 92,500 19,500 - - - - - - 11,475
------------------------------------------------------------------------------------------------------------------------------------
John T. Powers 2001 $119,760 $16,000 $ - - $ - - - - $19,129
Senior Vice President, 2000 107,500 18,000 - - 84,870 11,200 17,164
Community Banking and 1999 92,500 19,500 - - - - - - 10,802
Corporate Secretary
====================================================================================================================================
---------------
(1) In fiscal 1998, the Bank adopted a supplemental executive retirement
plan ("SERP") for the benefit of Mr. Marcell. The Bank accrued $18,000
with respect to such SERP in fiscal 2001, 2000 and 1999.
(2) Excluding the amount paid Mr. Marcell in fiscal 1999, in the opinion of
management of the Bank, the costs to the Bank of providing such
benefits to the named executive officers during the years ended June
30, 2001, 2000 and 1999 did not exceed the lesser of $50,000 or 10% of
the total annual salary and bonus reported for the individual. 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) Reflects the value of shares of restricted stock on the date of grant
granted pursuant to the Recognition and Retention Plan (the "RRP").
Such restricted stock vests over five years, 20% per year from the date
of the grant. Dividends paid on the restricted Common Stock are held in
the RRP Trust and paid to the recipient when the restricted stock is
earned.
(4) As of June 30, 2001, Messrs. Marcell, Bell, Fewer and Powers had
14,345, 3,697, 7,492 and 7,492 shares of unearned restricted stock,
respectively, pursuant to the RRP, which had fair market values of
$177,304, $45,695, $92,601 and $92,601 at June 30, 2001.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
- 8 -
(FOOTNOTES CONTINUED FROM PREVIOUS PAGE)
(5) Under the Bank's 401(k) profit sharing plan for fiscal 2001, $5,880,
$5,008, $5,600 and $5,600 was allocated to the accounts of Messrs.
Marcell, Bell, Fewer and Powers, respectively.
(6) Under the Bank's money purchase pension plan in fiscal 2001, $12,750,
$6,649, $8,523 and $8,523 was allocated to the accounts of Messrs.
Marcell, Bell, Fewer and Powers, respectively.
(7) Represents the fair market value on June 30, 2001 of a share of Common
Stock ($12.36) multiplied by the 605, 324, 405 and 405 shares allocated
to the ESOP accounts of Messrs. Marcell, Bell, Fewer and Powers,
respectively, during fiscal 2001.
EMPLOYMENT AGREEMENTS
In connection with the Reorganization, the Bank (the "Employer")
entered into employment agreements with each of Messrs. Marcell, Fewer and
Powers (the "Executives"), which agreements superseded existing employment
agreements with such persons. The Employer agreed to employ Mr. Marcell for a
term of two years and Messrs. Fewer and Powers for a term of one year, in each
case in their current respective positions. The agreements with the Executives
set a base salary at their current salary levels at the time of the
Reorganization, which may be increased from time to time by the Board of
Directors. The Employer entered into an employment agreement with Mr. Bell (also
an "Executive") in July 2000, for a term of one year at his then current salary
level and which otherwise was substantially identical to the agreements with
Messrs. Fewer and Powers. 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 are 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 other
than the MHC 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 $1,100 per Board meeting held and $500 per
committee meeting attended, except members of the Audit Committee who
- 9 -
receive $800 per committee meeting, and the Loan Committee members who receive
$600 per committee meeting. The Chairman of the Board of Directors receives
$1,700 per Board meeting and the chairman of each committee receives $600 per
committee meeting, except the chairman of the Audit Committee who received $900
per 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.
Non-employee directors of the Bank may receive additional compensation
pursuant to the Bank's incentive compensation plan calculated as a percentage of
the director's fees paid on an annual basis. The percentage is determined by
several criteria related to the Bank's financial performance. During fiscal
2001, non-employee directors (excluding Ms. Loring who was elected director in
October 2000) received incentive compensation ranging from $1,300 to $2,100.
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, Bell, Fewer 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 $269,000 for fiscal 2001, $222,000
for fiscal year 2000 and $193,000 for fiscal year 1999.
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 $18,000 on a pre-tax basis and $11,000 after tax, for
each of the years ended June 30, 2001, 2000 and 1999, which included estimated
costs for past service.
STOCK OPTIONS
The Company did not grant any stock options to the named executive
officers during fiscal 2001. The following table sets forth, with respect to
each executive officer named in the Summary Compensation Table, information with
respect to the number of options held at the end of the fiscal year ended June
30, 2001 and the value with respect thereto.
Number of Value of Unexercised
Unexercised Options in the Money Options
at Fiscal Year End at Fiscal Year End(1)
------------------------------------ ---------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
------------------ ------------- ---------------- ------------- ----------------
Frederick A. Marcell Jr. 3,360 13,440 $11,080 $44,318
Christopher E. Bell 800 3,200 2,638 10,552
Thomas M. Fewer 2,240 8,960 7,386 29,546
John T. Powers 2,240 8,960 7,386 29,546
------------------------
(1) Calculated by determining the difference between the fair market value
of a share of the Common Stock underlying the options at June 30, 2001
($12.36) and the exercise price of the options.
- 10 -
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 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, 2001.
Willow Grove Bancorp, Inc.
--------------------------
[TOTAL RETURN PERFORMANCE** GRAPH HERE]
PERIOD ENDING
-----------------------------------------------------------------
INDEX 12/24/98 6/30/99 12/31/99 6/30/00 12/31/00 06/30/01
---------------------------------------------------------------------------------------------
Willow Grove Bancorp, Inc. $100.00 $ 98.33 $ 89.97 $102.80 $124.41 $132.05
NASDAQ* 100.00 122.68 185.83 181.38 111.76 98.32
SNL Thrift Index 100.00 99.50 81.69 83.68 130.44 144.86
-----------------
* Source: CRSP, Center for Research in Security Prices, Graduate School
of Business, The University of Chicago 2001. Used with permission. All
rights reserved.
** Source: SNL Securities, LC
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.
- 11 -
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
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 September 20, 2001(1) Common Stock
-------------------- --------------------- ------------
Willow Grove Mutual Holding Company
Welsh & Norristown Roads
Maple Glen, Pennsylvania 19002 2,812,974 57.0%
Directors:
Lewis W. Hull 19,681(2)(3) *(12)
J. Ellwood Kirk 20,681(2)(3)(4) *(12)
Charles F. Kremp, 3rd 17,681(2)(3) *(12)
William W. Langan 23,961(2)(5) *(12)
Rosemary C. Loring, Esq. 5,000 *
Frederick A. Marcell Jr. 56,242(6) 1.1(12)
A. Brent O'Brien 22,681(2)(3)(7) *(12)
Samuel H. Ramsey, III 25,581(2)(3)(8) *(12)
William B. Weihenmayer 35,181(2)(3) *(12)
Other Executive Officers:
Christopher E. Bell 17,851(9) *(12)
Thomas M. Fewer 44,570(10) *(12)
John T. Powers 22,279(11) *(12)
All Directors and Executive Officers of the
Company as a group (12 persons) 311,389 6.3(12)
-------------------------------
* 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 3,585 shares held in the Recognition and Retention Plan Trust
("Recognition Plan") and allocated to the accounts of each of the
directors other than Ms. Loring and Mr. Marcell.
(3) Includes 3,200 shares, which may be acquired upon the exercise of stock
options, exercisable within sixty (60) days of the Voting Record Date.
(FOOTNOTES CONTINUE ON FOLLOWING PAGE)
- 12 -
(FOOTNOTES CONTINUED FROM PREVIOUS PAGE)
(4) Includes 3,000 shares held by Mr. Kirk's spouse.
(5) Includes 15,000 shares held by Mr. Langan's spouse and 4,480 shares
which may be acquired upon the exercise of stock options exercisable
within sixty (60) days of the Voting Record Date.
(6) Includes 30,000 shares held in Mr. Marcell's account in the Bank's
(401)(k) retirement plan, 14,345 shares held in the Recognition Plan
allocated to Mr. Marcell, 6,720 shares which may be acquired upon the
exercise of stock options exercisable within sixty (60) days of the
Voting Record Date, 1,291 shares which have been allocated to Mr.
Marcell's account in the Company's Employee Stock Ownership Plan
("ESOP") and 300 shares held by Mr. Marcell's spouse in her IRA account
over which Mr. Marcell disclaims beneficial ownership.
(7) Includes 15,869 shares held by Mr. O'Brien's spouse.
(8) Includes 7,400 shares held in a trust for which Mr. Ramsey is a
beneficiary.
(9) Includes 1,800 shares held jointly with Mr. Bell's spouse, 1,500 shares
held by Mr. Bell's children, 5,105 shares held in Mr. Bell's account in
the Bank's 401(k) retirement plan, 1,600 shares which may be acquired
upon the exercise of stock options exercisable within sixty (60) days
of the Voting Record Date, 641 shares which have been allocated to Mr.
Bell's account in the ESOP and 3,697 shares held in the Recognition
Plan allocated to Mr. Bell.
(10) Includes 11,873 shares held jointly with Mr. Fewer's spouse, 1,000
shares held by Mr. Fewer's children, 18,881 shares held in Mr. Fewer's
account in the Bank's 401(k) retirement plan, 4,480 shares which may be
acquired upon the exercise of stock options exercisable within sixty
(60) days of the Voting Record Date, 844 shares which have been
allocated to Mr. Fewer's account in the ESOP and 7,492 shares held in
the Recognition Plan allocated to Mr. Fewer.
(11) Includes 1,500 shares held jointly with Mr. Power's spouse, 100 shares
held by Mr. Powers' children, 6,000 shares held in Mr. Powers' account
in the Bank's 401(k) retirement plan, 4,480 shares which may be
acquired upon the exercise of stock options exercisable within sixty
(60) days of the Voting Record Date, 834 shares which have been
allocated to Mr. Power's account in the ESOP and 7,492 shares held in
the Recognition Plan allocated to Mr. Powers.
(12) Each beneficial owner's percentage ownership is determined by assuming
that options held by such person (but not those held by any other
person) and that are exercisable within 60 days of the Voting Record
Date have been exercised.
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, 2002, 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.
- 13 -
In determining whether to appoint KPMG LLP as the Company's auditors,
the Company's Audit Committee considered whether the provision of services,
other than auditing services, by KPMG LLP is compatible with maintaining the
auditor's independence. In addition to performing auditing services, the
Company's auditors performed tax-related services, including the completion of
the Company's corporate tax returns, in fiscal 2001. The Audit Committee
believes that KPMG LLP's performance of these other services is compatible with
maintaining the auditor's independence.
AUDIT FEES
The aggregate amount of fees billed by KPMG LLP for its audit of the
Company's annual financial statements for fiscal 2001 and for its reviews of the
Company's unaudited interim financial statements included in reports filed by
the Company under the Exchange Act during fiscal 2001 was $101,260.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION
The Company did not engage or pay any fees to KPMG LLP with respect to
the provision of financial information systems design and implementation
services during fiscal 2001.
ALL OTHER FEES
The aggregate amount of fees billed by KPMG LLP for all other services
rendered to the Company during fiscal 2001 was $24,400. The majority of these
services consisted of preparing federal and state income tax returns and other
tax-related services.
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, 2002.
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 November 2002, 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 12, 2002. If such proposal is in compliance with all of the
requirements of Rule 14a-8 under the Exchange 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 Exchange Act may be
brought before an annual meeting pursuant to Article II Section 15 of the
Company's Bylaws. Notice of the proposal must be given in writing, delivered or
mailed by first class United States mail, postage prepaid, to the Corporate
Secretary not less than 30 days nor more than 60 days before the date of the
next annual meeting. However, if less than 30 days' notice of the meeting is
given to shareholders, such written notice must be delivered or mailed, as
prescribed, to the Corporate Secretary not later than the close of the tenth day
following the day on which notice of the meeting was mailed to shareholders.
In the event the Company completes its recently announced
reorganization into the stock-form holding company structure prior to November
2002, as is anticipated, stockholder proposals will be subject to different
procedures and time requirements which are expected to be described in the
prospectus and the proxy materials with respect to the to-be-formed stock
holding company.
- 14 -
ANNUAL REPORTS
A copy of the Company's Annual Report to Stockholders for the year
ended June 30, 2001 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 2001 REQUIRED TO BE FILED WITH THE COMMISSION UNDER THE EXCHANGE ACT.
SUCH WRITTEN REQUESTS SHOULD BE DIRECTED TO MR. CHRISTOPHER E. BELL, CHIEF
FINANCIAL OFFICER, 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
/s/ John T. Powers
John T. Powers
Corporate Secretary
October 10, 2001
- 15 -
APPENDIX A
WILLOW GROVE BANCORP, INC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
Purpose
-------
The primary purpose of the Audit Committee is to assist the Board of Directors
in fulfilling its fiduciary responsibilities relating to corporate accounting
and reporting practices.
To carry out their responsibilities, the Audit Committee believes its policies
and procedures should remain flexible in order that it be able to react to
changing conditions and the environment, and to assure the directors and
shareholders that the corporate accounting and reporting practices of the
Company are in accordance with all requirements and are of the highest quality.
Composition
-----------
The Audit Committee will be comprised of three or more outside directors as
determined by the Board of Directors. All members of the Committee shall have a
working familiarity with basic finance and accounting practices, and at least
one member of the Committee shall have accounting or related financial
management expertise. Each member of the committee shall serve a term of one
continuous year after appointment.
Meetings
--------
The Committee shall meet at least four times per year or more frequently as
deemed necessary. The committee may ask members of management or others to
attend the meeting and provide pertinent information as necessary.
Goals and Objectives
--------------------
Oversee and appraise the quality of the audit effort of the Company's internal
audit function and that of its external auditors.
Maintain, by scheduling regular meetings, open lines of communication among the
Board, internal auditors, and the external auditors to exchange views and
information as well as confirm their respective authority and responsibilities.
Serve as an independent and objective party to review the annual financial
information presented by management to shareholders, regulators and the general
public.
Determine the adequacy of the Company's administrative, operating, and internal
accounting controls and evaluate adherence.
Responsibilities and Duties
---------------------------
Recommend to the full Board the yearly appointment or change of the external
auditor.
Recommend to the full Board the selection or change of the Director of Internal
Audit.
Ensure that an external audit is conducted in compliance with regulatory
requirements.
Review and approve the audit plan of the external auditor.
Review and approve the audit plan of the Internal Audit Department.
Evaluate the effectiveness of both the internal and external audit effort
through regular meetings.
Determine that no management restrictions are being placed upon either the
internal or external auditors.
Evaluate the adequacy of the Company's internal accounting control system,
review written reports from the internal and external auditors, and monitor
management's response and action to correct any noted deficiencies.
Review all regulatory reports submitted to the Company and evaluate management's
response.
Require periodic reports from management, the external auditors and internal
auditors on any significant proposed regulatory accounting, or reporting issue,
to assess the potential impact upon the Company's financial reporting process.
Review all significant accounting principles.
Review the annual financial statements, including Form 10-K and Form 10-Qs,
prior to filing.
Identify and direct any special projects or investigations deemed necessary.
Submit minutes of all meetings of the Audit Committee to the Board of Directors.
Review this Charter on an annual basis.
A-2
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 8, 2001 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
September 20, 2001 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 Thursday, November 8, 2001, 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 2004: Frederick A. Marcell Jr. and
William B. Weihenmayer.
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, 2002.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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.
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: __________________, 2001
___________________________________
___________________________________
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.
--------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
--------------------------------------------------------------------------------
401(K)/ESOP VOTING INSTRUCTION BALLOT
WILLOW GROVE BANCORP, INC.
The undersigned hereby instructs the Trustees of the 401(k)/Employee
Stock Ownership Plan ("401(k)/ESOP") of Willow Grove Bank to vote, as designated
below, all the shares of Common Stock of Willow Grove Bancorp, Inc. (the
"Company") allocated to my accounts pursuant to the 401(k)/ESOP as of September
20, 2001 at the Annual Meeting of Shareholders to be held in the Fairway Room at
North Hills Country Club located at 99 Station Avenue, North Hills,
Pennsylvania, on Thursday, November 8, 2001, at 11:00 a.m., Eastern Time, and
any adjournment thereof.
1. ELECTION OF DIRECTORS FOR THREE-YEAR TERM
[ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT
Nominees for three-year term expiring in 2004: Frederick A. Marcell Jr. and
William B. Weihenmayer.
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 fiscal year ending June 30,
2002.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In its discretion, the Trustee is authorized to vote upon such other
business as may properly come before the meeting.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE BOARD'S
NOMINEES FOR DIRECTOR AND FOR PROPOSAL 2. SUCH VOTES ARE HEREBY SOLICITED BY THE
COMPANY'S BOARD OF DIRECTORS.
Dated: _____________, 2001
______________________________
Signature
IF YOU RETURN THIS CARD PROPERLY SIGNED BUT YOU DO NOT OTHERWISE SPECIFY, SHARES
WILL BE VOTED FOR THE BOARD OF DIRECTORS' NOMINEES FOR DIRECTOR AND FOR PROPOSAL
2. IF YOU DO NOT RETURN THIS CARD, YOUR SHARES WILL BE VOTED BY THE TRUSTEES IN
THE SAME PROPORTION AS ALL ALLOCATED SHARES UNDER THE 401(k)/ESOP ARE VOTED.
[LOGO]
WILLOW GROVE Welsh & Norristown Roads * P.O. Box 8030
BANCORP, INC. Maple Glen, Pennsylvania 19002-8030
--------------------------------------------------------------------------------
Telephone: 215-646-5405
Fax: 215-643-2112
October 10, 2001
To: Participants in the Company's 401(k)/Employee Stock Ownership Plan
As described in the attached materials, proxies are being solicited in
connection with the proposals to be considered at the upcoming Annual Meeting of
Shareholders of Willow Grove Bancorp, Inc. (the "Company"). We hope you will
take advantage of the opportunity to direct the manner in which shares of Common
Stock of the Company allocated to your accounts pursuant to the 401(k)/Employee
Stock Ownership Plan ("401(k)/ESOP") will be voted.
Enclosed with this letter is the Proxy Statement, which describes the
matters to be voted upon, the Annual Report to Stockholders and a voting
instruction ballot, which will permit you to vote the shares in your account.
After you have reviewed the Proxy Statement, we urge you to vote your restricted
shares held pursuant to the 401(k)/ESOP by marking, dating, signing and
returning the enclosed voting instruction ballot to the administrator of the
401(k)/ESOP. The Plan Administrator will certify the totals to the 401(k)/ESOP
Trustees for the purpose of having those shares voted by the Trustees.
We urge each of you to vote, as a means of participating in the
governance of the affairs of the Company. If your voting instructions for the
401(k)/ESOP are not received, the shares allocated to your accounts will be
voted in the same proportion as all allocated shares under the 401(k)/ESOP are
voted. While I hope that you will vote in the manner recommended by the Board of
Directors, the most important thing is that you vote in whatever manner you deem
appropriate. Please take a moment to do so.
Please note that the enclosed material relates only to those shares
which have been allocated to you under the 401(k)/ESOP. If you also own shares
of Company Common Stock outside of the 401(k)/ESOP, you will receive other
voting material for those shares owned by you individually and not under the
401(k)/ESOP. Please return all your voting material so that all your shares may
be voted.
Sincerely,
/s/ Frederick A. Marcell Jr.
Frederick A. Marcell Jr.
President and Chief Executive Officer
RECOGNITION PLAN VOTING INSTRUCTION BALLOT
WILLOW GROVE BANCORP, INC.
The undersigned hereby instructs the Trustee of the Recognition and Retention
Plan and Trust ("Recognition Plan") of Willow Grove Bancorp, Inc. (the
"Company") to vote, as designated below, all the shares of Common Stock of the
Company granted pursuant to the Recognition Plan to the undersigned as of
September 20, 2001 at the Annual Meeting of Shareholders to be held in the
Fairway Room at North Hills Country Club located at 99 Station Avenue, North
Hills, Pennsylvania, on Thursday, November 8, 2001, at 11:00 a.m., Eastern Time,
and any adjournment thereof.
1. ELECTION OF DIRECTORS FOR THREE-YEAR TERM
[ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT
Nominees for three-year term expiring in 2004: Frederick A. Marcell Jr. and
William B. Weihenmayer.
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, 2002.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In its discretion, the Trustee is authorized to vote upon such other
business as may properly come before the meeting.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE BOARD'S
NOMINEES FOR DIRECTOR AND FOR PROPOSAL 2. SUCH VOTES ARE HEREBY SOLICITED BY THE
COMPANY'S BOARD OF DIRECTORS.
Dated: _____________, 2001
______________________________
Signature
IF YOU RETURN THIS CARD PROPERLY SIGNED BUT YOU DO NOT OTHERWISE SPECIFY, SHARES
WILL BE VOTED FOR THE BOARD OF DIRECTORS' NOMINEES FOR DIRECTOR AND FOR PROPOSAL
2. IF YOU DO NOT RETURN THIS CARD, YOUR SHARES WILL NOT BE VOTED.
[LOGO]
WILLOW GROVE Welsh & Norristown Roads * P.O. Box 8030
BANCORP, INC. Maple Glen, Pennsylvania 19002-8030
--------------------------------------------------------------------------------
Telephone: 215-646-5405
Fax: 215-643-2112
October 10, 2001
To: Persons Granted Restricted Stock Under the Company's Recognition and
Retention Plan
As described in the attached materials, proxies are being solicited in
connection with the proposals to be considered at the upcoming Annual Meeting of
Shareholders of Willow Grove Bancorp, Inc. (the "Company"). We hope you will
take advantage of the opportunity to direct the manner in which shares of
restricted Common Stock of the Company granted to you pursuant to the
Recognition and Retention Plan and Trust ("Recognition Plan") will be voted.
Enclosed with this letter is the Proxy Statement, which describes the
matters to be voted upon, the Annual Report to Stockholders and a voting
instruction ballot, which will permit you to vote the restricted shares granted
to you. After you have reviewed the Proxy Statement, we urge you to vote your
restricted shares held pursuant to the Recognition Plan by marking, dating,
signing and returning the enclosed voting instruction ballot to the
administrators of the Recognition Plan. The Plan Administrators will certify the
totals to the Trustee of the Recognition Plan for the purpose of having those
shares voted by the Trustee.
We urge each of you to vote, as a means of participating in the
governance of the affairs of the Company. If your voting instructions for the
shares held in the Recognition Plan are not received, the shares will not be
voted. While I hope that you will vote in the manner recommended by the Board of
Directors, the most important thing is that you vote in whatever manner you deem
appropriate. Please take a moment to do so.
Please note that the enclosed material relates only to those shares
which have been granted to you under the Recognition Plan. You will receive
other voting material for those shares owned by you individually and not under
the Recognition Plan.
Sincerely,
/s/ Frederick A. Marcell Jr.
Frederick A. Marcell Jr.
President and Chief Executive Officer