SCHEDULE 14A INFORMATION

Proxy Statement Pursuant To Section 14(a) of the Securities Exchange Act of 1934 (Amendment No.)
Filed by the Registrant    þ
Filed by a Party other than the Registrant    o
Check the appropriate box:
o      Preliminary Proxy Statement
o      Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ      Definitive Proxy Statement
o      Definitive Additional Materials
o      Soliciting Material Pursuant to Rule 240.14a-12

Wilmington Trust Corporation

(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):
þ		No fee required.
o		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:
o		Fee paid previously with preliminary materials.

o      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:

 

 

Annual Meeting — April 17, 2008

 

March 10, 2008

 

Dear Shareholders:

 

You are invited to attend our 2008 Annual Meeting on Thursday, April 17, 2008, at 10:00 a.m. at the Wilmington Trust Plaza, Mezzanine Level, 301 West Eleventh Street, Wilmington, Delaware.

 

The enclosed Notice of Annual Meeting and Proxy Statement provide information about the governance of our Company and describe the various matters to be acted upon during the meeting. In addition, there will be a report on the state of our Company’s business and an opportunity for you to express your views on subjects related to our operations.

 

The Annual Meeting gives us an opportunity to review the actions our Company is taking to achieve our mission of maximizing shareholder value. We appreciate your ownership of Wilmington Trust, and I hope you will be able to join us on April 17 for our Annual Meeting.

 

Sincerely,

 

 

Ted T. Cecala,

Chairman of the Board and Chief Executive Officer

March 10, 2008

 

To the Holders of Common Stock of

Wilmington Trust Corporation

 

NOTICE OF ANNUAL MEETING

 

 

The Annual Meeting of Shareholders of Wilmington Trust Corporation will be held on Thursday, April 17, 2008, at 10:00 a.m. local time, at the Wilmington Trust Plaza, Mezzanine Level, 301 West Eleventh Street, Wilmington, Delaware. The meeting will be held to consider and act upon the election of directors, the approval of our 2008 Employee Stock Purchase Plan and 2008 Long-Term Incentive Plan, and other business that may properly come before the meeting.

 

Holders of record of our common stock at the close of business on February 19, 2008, are entitled to vote at the meeting.

 

This notice and the accompanying proxy materials are sent to you by order of the Board of Directors.

 

Michael A. DiGregorio,

Secretary

2008 ANNUAL SHAREHOLDERS’ MEETING

 

PROXY STATEMENT

 

 

 

 

The enclosed proxy material is being sent at the request of our Board of Directors to encourage you to vote your shares at our Annual Shareholders’ Meeting (the “Annual Meeting”) to be held on April 17, 2008. This proxy statement contains information on matters that will be presented at the Annual Meeting and is provided to assist you in voting your shares.

 

Our Annual Report to Shareholders for 2007, containing management’s discussion and analysis of financial condition and results of operations of our Company, its audited financial statements, and this Proxy Statement are distributed together beginning on or about March 21, 2008.

 

 

Who May Vote

 

All holders of our common stock as of the close of business on February 19, 2008 (the “Record Date”) are entitled to vote at the Annual Meeting. Each share of stock is entitled to one vote. As of the record date, 67,173,250 shares of our common stock were outstanding. A plurality of the shares voted in person or by proxy is required to elect directors. A majority of the shares voted in person or by proxy is required to approve the other proposals in this proxy statement. Abstentions and broker non-votes are not counted in the vote.

 

How to Vote

 

Even if you plan to attend the meeting, we encourage you to vote by proxy. You may vote by proxy by returning the enclosed proxy card (signed and dated) in the envelope provided.

 

You also may vote by telephone or by using the Internet. Please refer to the instructions on your proxy card.

 

When you vote by proxy, your shares will be voted according to your instructions. If you sign your proxy card or otherwise give your proxy but do not specify how you want your shares to be voted, they will be voted as the Board of Directors recommends. You can change or revoke your proxy at any time before the polls close at the Annual Meeting by:

 

 

You also can change or revoke your proxy at any time before 12:00 p.m., April 16, 2008, by telephone or by using the Internet. Please refer to the instructions on your proxy card.

 

If you are a present or former staff member and participate in our Thrift Savings Plan, you will receive a voting instruction card for shares you hold in that plan. The plan trustee will vote according to the instructions on your proxy.

 

Proxy Statement Proposals

 

Proposals other than to elect directors may be submitted by the Board of Directors or shareholders to be included in our proxy statement. To be considered for inclusion in the proxy statement for our 2009 Annual Shareholders’ Meeting, shareholder proposals must be received in writing by the Company’s Secretary no later than November 10, 2008. Those proposals must include a brief description of the business to be brought before the meeting, the shareholder’s name and address, the number and class of shares the shareholder holds, and any material interest the shareholder has in that business.

 

Shareholder Nominations for Election of Directors

 

The Nominating and Corporate Governance Committee recommends nominees to the Board of Directors for election as directors at the annual meeting. That committee will consider nominations submitted by shareholders of record for our 2009 Annual Shareholders’ Meeting and received by the Company’s Secretary by February 17, 2009. Nominations must include the information required under “Proxy Statement Proposals” above as well as the nominee’s name and address, a representation that the shareholder is a recordholder of the Company’s stock or holds the Company’s stock through a broker and intends to appear in person or by proxy at the 2009 Annual Meeting to nominate a person, information regarding the nominee that would be required to be included in the Company’s proxy statement, a description of any arrangement or understanding between the shareholder and that

nominee, and the written consent of the nominee to serve as a director if elected.

 

Proxies

 

Your completed proxy card instructs David R. Gibson, the Company’s Executive Vice President and Chief Financial Officer, and Michael A. DiGregorio, the Company’s Senior Vice President, Secretary, and General Counsel, to vote as instructed the shares of our stock for which they receive proxies. In addition, your signed proxy card gives them direction to vote on any other matter properly brought before the Annual Meeting.

 

Solicitation of Proxies

 

The Company will pay its costs relating to the solicitation of proxies. We have retained Morrow and Co., Inc. to assist in soliciting proxies at an estimated cost of $7,500 plus reasonable expenses. Proxies may be solicited by officers, directors, and staff members of the Company personally, by mail, by telephone, or by other electronic means. The Company will also reimburse brokers, custodians, nominees, and fiduciaries for reasonable expenses in forwarding proxy materials to beneficial owners of our stock.

 

Secrecy in Voting

 

As a matter of policy, we hold confidential proxies, ballots, and voting tabulations that identify individual shareholders. These documents are available for examination only by Wells Fargo Bank, N.A., our tabulation agents. The identity of the vote of any shareholder is not disclosed except as may be necessary to meet legal requirements.

 

Board of Directors

Governance of the Company

 

Summary of Corporate Governance Principles

	•	The director or any member of his or her immediate family is a current or past executive officer of the Company;
	•	(a) The director is a current employee of the independent registered public accounting firm of the Company; (b) the director or any member of his or her immediate family is a current partner of that firm; (c) any immediate family member of the director is a current employee of that firm who participates in the firm’s audit, assurance, or tax compliance practice; or (d) the director or an immediate family member was within the last three years a partner or employee of that firm and personally worked on the Company’s audit within that time;
	•	The director has served as a consultant to the Company within the last three years;
	•	Any of the Company’s executive officers has served on the Compensation Committee of the company by which the director is employed within the last three years;
	•	Loans to the director and his or her affiliates exceed fifty percent (50%) of the loan-to-one borrower limit of Wilmington Trust Company, the Company’s principal banking subsidiary (“WTC”);
	•	The director or any member of his or her immediate family received more than $100,000 in direct compensation, other than directors’ fees, from the Company within any of the last three years;

	•	The Company’s total payments to or from a firm that employs the director or for which his or her immediate family member is an executive officer exceeded the greater of $1 million or 1% of the firm’s gross revenues within any of the last three years; or
	•	The Company’s contributions to a charitable organization that employs the director exceeded $200,000 within any of the last three years.

 

 

 

The following chart provides information about Board committee membership and the number of meetings that each committee held in 2007.

 

 

*  Chairperson

 

**  Committee member through April 2007, when the Board’s committees were reappointed.

 

Directors fulfill their responsibilities not only by attending Board and committee meetings, but also by communicating with the Chairman of the Board and Chief Executive Officer and other members of management relative to matters of mutual interest and concern to the Company. In 2007, eight meetings of the Board of Directors were held. Mr. Elliott attended less than 75% of the meetings of the Board and the committees on which he served in 2007.

 

 

 

Audit Committee Report.

 

The Audit Committee provides the following report with respect to the Company’s audited financial statements for the fiscal year ended December 31, 2007:

 

 

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

 

R. Keith Elliott, Chair
Donald E. Foley
Gailen Krug
David P. Roselle
Robert W. Tunnell Jr.

 

All of the Committee’s members are independent of the Company and are financially literate, and at least one member of the Committee has financial management expertise. In addition, the Company’s Board of Directors has determined that Messrs. Elliott, Foley, and Tunnell and Ms. Krug qualify as audit committee financial experts for purposes of the Securities and Exchange Commission’s rules. However, as those rules provide, none of those Committee members is thereby deemed to be an “expert” for any purpose under the securities laws or has any duty, obligation, or liability greater than the duties, obligations, and liabilities he or she would have as a member of the Audit Committee and the Board of Directors in the absence of that designation. In addition, the designation of those Committee members as audit committee financial experts does not affect the duties, obligations, or liabilities of any other member of the Audit Committee or the Board of Directors.

 

While the Audit Committee oversees the Company’s financial reporting process for the Board of Directors consistent with that Committee’s charter, the Company’s management has primary responsibility for this process and for the preparation of the Company’s consolidated financial statements in accordance with U.S. generally accepted accounting principles. The responsibility for the completeness and accuracy of the Company’s financial statements rests with its management. In addition, our independent registered public accounting firm and not the Audit Committee is responsible for auditing those financial statements. None of the Committee’s members is a certified public accountant, and each member of the Committee is entitled to rely on the integrity of persons and organizations within and outside the Company from which he or she receives information and the accuracy of the financial and other information provided to the Committee.

 

The Audit Committee or the Chair of the Audit Committee pre-approves audit, review, and attest engagements and permissible non-audit services the Company’s independent registered public accounting firm provides, or those services are performed in accordance with pre-approval policies and procedures the Audit Committee has established. The Company’s policies with respect to the approval and pre-approval of services the independent registered public accounting firm provides are reflected in the Independent Registered Public Accounting Firm Services Policy the Audit Committee has adopted and which is attached to this proxy statement as part of Exhibit A.

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

 

The following table sets forth the aggregate fees for professional services rendered by KPMG to the Company for calendar years 2007 and 2006.

 

 

 

 

The Audit Committee has considered whether the provision of the foregoing audit, audit-related, and tax services is compatible with maintaining KPMG’s independence, and believes that it is.

 

Independence and Audit Committee Charter.

 

Each member of the Audit Committee is “independent” under the definition of independence contained in the New York Stock Exchange’s current listing standards. The Board of Directors has adopted a written Audit Committee Charter.

 

Representatives of KPMG are expected to be present at our Annual Meeting, will have an opportunity to make a statement if they desire to do so, and are expected to be available to respond to appropriate questions.

 

 

There are five nominees in the Company’s Class of 2011 for election as directors this year. Detailed information on each is provided below. Each class of directors is elected for a three-year term. If any director is unable to stand for re-election, your Board may reduce its size or designate a substitute.

 

If a substitute is designated, proxies voting on the original director candidate will be cast for the substituted candidate.

 

Your Board unanimously recommends a vote FOR each of these directors.

 

 

Carolyn S. Burger, Age 67

Director since 1991

 

Ms. Burger was a principal in CB Associates, Inc., a consulting firm specializing in legislation, technology deployment for senior executives, and executive coaching, from 1996 through 2002. She served as President and Chief Executive Officer of Bell Atlantic — Delaware, Inc. from 1991 to 1996.

 

Robert V.A. Harra Jr., Age 58

Director since 1996

 

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

 

Rex L. Mears, Age 66

Director since 1992

 

Mr. Mears has served as President of Ray S. Mears and Sons, Inc., a farming corporation, since 1967.

 

Robert W. Tunnell Jr., Age 53

Director since 1992

 

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

 

Susan D. Whiting, Age 51

Director since 2005

 

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

 

The following individuals currently serve as directors in the two other classes. Their terms will end at the annual shareholders’ meetings in 2009 and 2010, respectively.

 

Class of 2009 — One Year Term Remaining
This Class was Elected at the 2006 Annual Shareholders’ Meeting

 

Ted T. Cecala, Age 58

Director since 1996

 

Mr. Cecala became a director, Chairman of the Board, and Chief Executive Officer of the Company and WTC in 1996. Mr. Cecala also serves as a member of the Board of Managers of each of Cramer Rosenthal McGlynn, LLC and Roxbury Capital Management, LLC, a member of the Board of Trustees of WT Mutual Fund, and a member of the Board of Directors of the Federal Reserve Bank of Philadelphia.

 

Thomas L. du Pont, Age 59

Director since 2006

 

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

 

Donald E. Foley, Age 56

Director since 2006

 

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

 

David P. Roselle, Age 68

Director since 1991

 

Mr. Roselle served as President of the University of Delaware from 1990 through 2007. He serves as a director of OCLC, Inc. and Blue Cross/Blue Shield of Delaware.

 

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

 

R. Keith Elliott, Age 65

Director since 1997

 

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

and Chief Executive Officer, President and Chief Operating Officer, and Executive Vice President and Chief Financial Officer. He is the lead director of Checkpoint Systems, Inc., a director of QSGI, Inc., and a director of The Institute for Defense Analyses.

 

Gailen Krug, Age 53

Director since 2004

 

Ms. Krug has served as Chief Investment Officer and Vice President of Waycrosse, Inc., a private investment company that oversees two globally diversified portfolios of financial assets, since 1999.

 

Stacey J. Mobley, Age 62

Director since 1991

 

Mr. Mobley has served as Senior Vice President, General Counsel, and Chief Administrative Officer of E.I. du Pont de Nemours and Company since 2000.

 

Michele M. Rollins, Age 62

 

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

 

Oliver R. Sockwell, Age 64

 

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

 

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

 

Robert M. Balentine, Age 50

Executive officer since January 2008

 

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

 

Michael A. DiGregorio, Age 61

Executive officer since 2003

 

Mr. DiGregorio became a Senior Vice President, Secretary, and General Counsel of the Company and of WTC in 2003. He previously served as Vice President and Secretary of the Company from 2001 to 2003.

 

William J. Farrell II, Age 49

Executive officer since 2005

 

Mr. Farrell became an Executive Vice President of the Corporation and WTC in 2002. In 2005, he assumed oversight of WTC’s Corporate Client Services Department.

 

David R. Gibson, Age 50

Executive officer since 1992

 

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

 

Mark A. Graham, Age 46

Executive officer since January 2008

 

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

 

Kevyn N. Rakowski, Age 54

Executive officer since 2006

 

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

 

 

The following table includes shares in the Company beneficially owned by each director and nominee, each executive officer named in the Summary Compensation Table on page 21, and by all directors and executive officers as a group as of January 31, 2008.

 

Under the SEC’s rules, “beneficial ownership” includes shares for which an individual, directly or indirectly, has or shares voting or investment power, whether or not the shares are held for the individual’s benefit.

 

 

 

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

 

(2) Sixty-nine thousand four hundred six of these shares are pledged.

 

(3) Forty-seven thousand six hundred fifty-three of these shares are pledged.

 

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

 

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

 

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

 

(7) Fifty thousand five hundred forty-three of these shares are pledged.

 

(8) This column includes shares which directors or executive officers have the right to acquire within 60 days after December 31, 2007.

 

(9) These phantom stock units were acquired in lieu of directors’ fees. Their value is based on the market price of our common stock, together with dividend equivalents on that stock. The units can be redeemed only for cash following termination of the individual’s service as a director, and do not have voting rights.

 

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

 

 

Overview

 

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

 

Total Compensation Philosophy

 

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

 

 

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

 

Elements of Compensation

 

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

 

 

We target total cash compensation at roughly an even split between an executive officer’s base salary and potential target cash bonus, but provide an opportunity for our executives to earn even larger bonuses for performance that exceeds expectations. We do not target any specific relation between an executive’s cash and non-cash compensation, but executives have the potential to earn a substantial portion of their total compensation from equity compensation.

 

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

Our equity compensation awards are also structured to retain our executives. Restricted stock awards typically vest over three or four years after grant, thus facilitating retention of the executive officer. Stock option awards typically vest only after three years.

 

Each of our executive officers is required to own a number of shares of our stock with a value equal to a multiple of four to six times his or her base salary, depending on the officer’s level, within four years after first becoming an executive officer. Other senior officers are required to own a number of shares of our stock with a value equal to three times their base salaries, while each of our directors is required to own 4,000 shares of our stock.

 

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

 

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

 

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

 

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

 

Base Salaries

 

We determine base salaries for each executive officer by evaluating his or her responsibilities and performance. We also consider the competitive market for executive talent, and compare salaries we pay our executive officers to those paid to executive officers in comparable positions at comparable institutions. For compensation paid to our executive officers for 2007, the institutions against which we compared our executives’ compensation included:

 

 

 

We typically set executive officers’ base salaries at or near the median of base salaries awarded at those institutions, based on the executive officer’s duties. This is consistent with our Company’s practice in paying our staff members generally. We believe this target best enables us to attract and retain executive talent consistent with our shareholders’ interests. We typically adjust executive officers’ salaries annually to take into account our company’s and the individual’s performance, as well as any changes in the executive officer’s responsibilities during the most recent year. We also consider the financial results of the business line or area over which the executive officer has responsibility and his or her leadership and contribution to our company’s performance. In establishing increases to base salaries for our Named Executive Officers for 2007, the Compensation Committee considered the same performance factors it considered in awarding cash bonuses, stock options, and restricted stock. The Compensation Committee considers the recommendations of Mr. Cecala in awarding any increases in base salary other than his. In 2007, the base salary for Mr. Cecala was increased by $35,000; the base salary for Mr. Gibson was increased by $125,000; the base salary for Mr. Harra was increased by $20,000; the base salary for Mr. Farrell was increased by $86,000; and the base salary for Mr. DiGregorio was increased by $45,000. The base salary increases for Messrs. Gibson and DiGregorio included amounts the Compensation Committee determined to be appropriate to make their compensation more competitive, while the base salary increase for Mr. Farrell included an amount the Compensation Committee determined to be appropriate to reward for the successful completion of his first full year as head of the Corporate Client Services business line.

 

Bonuses

 

We provide our executive officers incentives in the form of cash and stock awards to recognize and reward the achievement of individual and corporate performance goals. No bonus is guaranteed but, if earned, executive officers can earn bonuses under this plan ranging from 0% to up to 200% of their base salaries. At the beginning of each year, the Compensation Committee approves potential bonus amounts expressed as a percentage of base salary for each executive officer. For 2007, the bonus target for Messrs. Harra, Farrell, Gibson, and DiGregorio was 100% of base salary and for Mr. Cecala was 200% of base salary. Officers can earn additional bonus amounts for performance we deem outstanding.

 

We multiply each executive officer’s anticipated bonus potential by a factor determined (1) 50% based upon the growth in our net income against the net income of peer institutions and (2) 50% based upon our net income against our plan (the “Corporate Performance Factor”). For 2007, the percentage growth in net income of our Company’s banking business ranked fifth among the performance of a company-constructed thirteen-member banking-oriented peer group that includes ourselves as well as:

 

 

The percentage growth in net income of our Company’s fee-based businesses ranked first among the performance of a company-constructed six-member peer group of fee-oriented banks that includes ourselves as well as:

 

 

We chose these companies as the comparator group for our banking and fee-based businesses because they are in general similar to our business in terms of net income growth, return on equity, and return on assets. All institutions in the banking-oriented

group and fee-oriented peer group are collectively referred to as the “Peer Group.”

 

With respect to the relative performance metric (the first metric above), target performance is achieved when the annual growth in our net income is equal to or greater than the median growth in the net income of the members of the Peer Group. For 2007 that median net income growth was −6.39%. With respect to the absolute performance metric (the second metric above), target performance is achieved when we reach the annual net income target established by the Board of Directors in our business plan, which was $203 million for 2007. The difference between business plan and actual results is due primarily to the business plan assumption for net interest income (stable versus declining market interest rates) and a higher provision for loan losses. Over the long-term, we believe that these targets are achievable, although in any year our strategic priorities, the performance of other institutions in the Peer Group, and market forces may make achieving the targets more challenging. When we do not reach or we exceed target performance for either metric, bonus payouts are reduced or increased commensurately. Based on the Corporation’s performance in 2007 in terms of its net income against the Peer Group, each officer’s bonus potential was increased 12.9%, and in terms of its net income against the business plan the bonus potential was decreased 25%, with the result that the Corporate Performance Factor for 2007 was -12.12%.

 

Beginning in 2008, (1) the comparator group will include all banks with asset sizes from 50% to 200% as large as ours at year-end, and (2) the Corporate Performance Factor will be determined 25% based on the Corporation’s performance against its business plan and 25% based on its performance against the performance of the new comparator group in terms of return on assets, return on equity, and earnings per share over the preceding three-year period.

 

The Compensation Committee retains discretion to increase or decrease the size of the bonus pool available for all executive officers based on extraordinary events such as restructuring charges or gain or loss on disposal of a business unit. For cash bonus awards for 2007, the bonus pool available for all executive officers was $2,499,860. Using the bonus pool, the Committee then determines how much of each executive’s available bonus is earned based on its subjective evaluation of his or her achievement of qualitative performance factors established for the executive at the beginning of the prior year.

 

The performance factors considered in establishing Mr. Cecala’s bonus for 2007 included our net income compared to our business plan, the change in our net income compared to the Peer Group, and his leadership.

 

The performance factors considered in establishing Mr. Gibson’s bonus for 2007 included continued monitoring of our funding strategies and balance sheet risk, fostering the Company’s long-term corporate development, and his leadership.

 

The performance factors considered in establishing Mr. Harra’s bonus for 2007 included expansion of the Company’s regional banking business, implementing new technology, developing new deposit-gathering channels, and his leadership.

 

The performance factors considered in establishing Mr. Farrell’s bonus for 2007 included increasing the presence of the Corporate Client Services’ business outside the United States through new offices or acquisitions, increasing sales of new products, and his leadership.

 

The performance factors considered in establishing Mr. DiGregorio’s bonus for 2007 included his work assisting the business lines with acquisitions, coordinating the Company’s corporate governance, working to simplify the Company’s legal structure, implementing a companywide compliance program, and his leadership.

 

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

 

The Committee reviewed Mr. Cecala’s performance in 2007 and considered how he fostered a culture of risk management that enabled the Company to avoid excessive risk, successfully completed two

acquisitions, managed interest rate risk, and controlled expenses for the Company. Based on the bonus target for Mr. Cecala, the Corporate Performance Factor, and the Committee’s subjective evaluation of his performance, the Committee awarded Mr. Cecala a bonus of $842,500 for 2007.

 

The Committee reviewed Mr. Gibson’s performance in 2007, noting in particular his contributions to the Company’s strategic objectives to implement its interest rate risk programs to help protect its net interest margin and earnings from fluctuations in market interest rates; and developing the Corporation’s funding management function to maximize the Company’s liquidity and capital objectives; and leadership. Based on the bonus target for Mr. Gibson, the Corporate Performance Factor, and the Committee’s subjective evaluation of his achievement of his performance factors, the Committee awarded Mr. Gibson a bonus of $471,500 for 2007.

 

The Committee reviewed Mr. Harra’s performance in 2007, noting in particular his contributions to the Company’s strategic objectives to expand its regional banking footprint in the Lehigh Valley and Princeton, New Jersey areas and especially in the Baltimore, Maryland market, including making important staff additions in that market; and grow its new Internet banking deposit product; and his leadership. Based on the bonus target for Mr. Harra, the Corporate Performance Factor, and the Committee’s subjective evaluation of his achievement of his performance factors, the Committee awarded Mr. Harra a bonus of $451,280 for 2007.

 

The Committee reviewed Mr. Farrell’s performance in 2007, noting in particular his contributions to the Company’s strategic objectives to expand the presence of the Corporate Client Services business line in Europe by acquiring a corporate service provider in Luxembourg, adding senior staff in Europe, and continuing to expand the Company’s business in Ireland and Germany; and develop the Company’s services to the collateralized debt obligation and tender auction bond markets; and his leadership. Based on the bonus target for Mr. Farrell, the Corporate Performance Factor, and the Committee’s subjective evaluation of his achievement of his performance factors, the Committee awarded Mr. Farrell a bonus of $446,500 for 2007.

 

The Committee reviewed Mr. DiGregorio’s performance in 2007, noting in particular his contributions to the Company’s Board of Directors and its committees on all aspects of corporate governance; assisting in the Company’s acquisitions of a registered investment adviser in Boston, Massachusetts and a corporate services provider in Luxembourg; centralizing the Corporation’s compliance program; and simplifying the Corporation’s legal structure; and his leadership. Based on the bonus target for Mr. DiGregorio, the Corporate Performance Factor, and the Committee’s subjective evaluation of his achievement of his performance factors, the Committee awarded Mr. DiGregorio a bonus of $205,920 for 2007.

 

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

 

Tax Considerations

 

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

 

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

performance period: income, net income, growth in income or net income, earnings per share, growth in earnings per share, cash flow measures, return on equity, return on assets, return on investment, loan loss reserves, market share, fees, growth in fees, assets, growth in assets, stockholder return, stock price, achievement of balance sheet or income statement objectives, expenses, reduction in expenses, charge-offs, non-performing assets, and overhead ratio. These goals may be company-wide or on a departmental, divisional, regional, or individual basis. Any goal may be measured in absolute terms, by reference to internal performance targets, or compared to another company or companies.

 

Mr. Cecala was the Company’s only Section 162(m) Participant for 2007. The performance factors on which his bonus was based were the Company’s net income against its plan and the growth in its net income against the Peer Group. We believe that bonuses we paid for 2007 will be deductible under Section 162(m).

 

Annual bonus awards are paid in cash, except that a portion of bonus awards granted typically is made in the form of restricted stock; for 2007, this represented 20% of the executive officer’s bonus amount plus a 15% premium to compensate for (1) the delay in the executive’s receiving the award and (2) the fact that this portion of the award is made in stock and not in cash. This is the same allocation method generally used to award bonuses to other senior officers of the Company. We award restricted stock to our executive officers annually only at the regularly scheduled meeting of the Compensation Committee held in February of each year. Restricted stock awards generally vest over three or four years, and are subject to forfeiture prior to vesting. Any increase in value that accrues to our executive officers from restricted stock is based entirely on our stock’s performance subsequent to the date of grant, and bears a direct relationship to the value our shareholders realize.

 

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

 

Stock Options

 

Under our 2005 Long-Term Incentive Plan, we can make cash-based and stock-based awards. Stock options granted under that plan typically vest after three years and have terms of up to ten years, and are intended to motivate the recipients to increase our Company’s long-term value. In granting stock options to our executive officers, we consider the number of options the officer received previously; the officer’s level; changes in his or her duties and responsibilities during the year; and our Company’s current and prospective performance. We do not employ any formula in awarding stock options. Instead, the Compensation Committee compares each executive officer’s performance against the totality of performance factors established for that executive officer at the beginning of the year, taking into account the recommendations of Mr. Cecala with respect to stock option awards other than his own. We award stock options to our executive officers annually only at the regularly scheduled meeting of the Compensation Committee held in February of each year, and all stock options are granted with exercise prices equal to the last sale price of our stock on the date of grant. Any value that accrues to our officers from stock options is based entirely on appreciation in our stock price following the date of grant, and bears a direct relationship to the value our shareholders realize. In general, we prefer awarding executive officers stock options as incentives over restricted stock, since with options the officers must pay the exercise price to receive the stock and thus the only time the officer receives value from the option is if our stock price increases from the date of grant. In addition, although our 2005 Long-Term Incentive Plan permits the Compensation Committee to make cash awards under that plan, it has never done so. Instead, it has granted only stock options and restricted stock under that plan, since we believe these types of awards most closely align our executives officers’ interests with those of our shareholders over the long term. The performance factors the Compensation Committee considers in awarding stock options are the same as those it considers in setting our executives’ base salary and bonus awards.

 

Our shareholders have approved our option plans.

 

Perquisites

 

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

 

 

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

 

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

 

David P. Roselle, Chair

Thomas L. duPont

Gailen Krug

Rex L. Mears

Susan D. Whiting

 

 

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

 

Our Human Resources Department monitors nationally published compensation surveys on a continuous basis, and would recommend review at an intermediate time if national trends indicated a need to reevaluate our competitive positioning.

 

 

Certain of our Company’s subsidiaries have banking transactions in the ordinary course of business with directors, officers, and their associates on the same terms, including interest rates and collateral on loans, as those prevailing at the time for comparable transactions with others not related to the lender and that do not involve more than the normal risk of collectibility or present other unfavorable features.

 

Compensation Committee Interlocks and Insider Participation

 

The Compensation Committee’s members are David P. Roselle (Chair), Thomas L. duPont, Gailen Krug, Rex L. Mears, and Susan D. Whiting. No member of the Compensation Committee is a current or past officer or employee of the Company. No executive officer of the Company serves as a member of the compensation committee or Board of Directors of any other company whose members include an individual who also serves on our Board of Directors or the Compensation Committee.

 

Ms. Krug and Messrs. DuPont and Mears are indebted to WTC on the same terms and conditions as those for comparable transactions with others not related to the lender.

 

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

 

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

 

 

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

 

 

(1) The Named Executive Officers were awarded the following total bonuses under the Company’s Incentive Plan for services performed during 2007 and 2006: $842,500 for 2007 and $656,400 for 2006 for Mr. Cecala; $471,500 for 2007 and $307,688 for 2006 for Mr. Gibson; $451,280 for 2007 and $396,302 for 2006 for Mr. Harra; $446,500 for 2007 and $323,072 for 2006 for Mr. Farrell; and $205,920 for 2007 and $191,997 for 2006 for Mr. DiGregorio.

 

Twenty percent of those amounts, together with an additional 15% of that 20% to compensate for (a) the delay in the executive’s receiving the award and (b) the fact that this portion the award is made in stock and not cash, was made in the form of restricted stock and will be reported in the Summary Compensation Table of the Company’s proxy statement for future Annual Shareholders’ Meetings. Since it is in the form of restricted stock, this portion of each Named Executive’s Officer’s bonus is subject to forfeiture prior to vesting.

 

(2) Three thousand four hundred fifty-four of these restricted shares for Mr. Cecala, 1,619 of these restricted shares for Mr. Gibson, 2,085 of these restricted shares for Mr. Harra, and all of these restricted shares for Messrs. Farrell and DiGregorio were issued in lieu of 20% of the incentive compensation otherwise payable to the Named Executive Officers, together with an additional 15% of that 20% to compensate for (a) the delay in the executive’s receiving the award and (b) the fact that this portion of the award is made in stock and not in cash. Since it is in the form of restricted stock, this portion of each Named Executive Officer’s bonus is subject to forfeiture prior to vesting. These restricted stock awards vest in three equal annual installments over the three-year period beginning with the date of the award.

Fifteen thousand four hundred forty-six of these restricted shares for Mr. Cecala, 6,178 of these restricted shares for Mr. Gibson, and 3,661 of these restricted shares for Mr. Harra vest in one installment four years after the date of the award. These restricted shares are subject to forfeiture prior to vesting.

 

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

 

(3) The assumptions used in valuing these stock and option awards are detailed in Note 19 to the consolidated financial statements contained in our Annual Report to Shareholders for 2007. These valuations were calculated with respect to the amounts we expensed under Statement of Financial Accounting Standards 123R.

 

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

 

(5) The assumptions used in valuing these benefits are detailed in Note 18 to the consolidated financial statements contained on our Annual Report on Form 10-K for 2007 and our Annual Report to Shareholders for 2006. These valuations were calculated with respect to the amounts we expensed under Statement of Financial Accounting Standards 123R.

 

(6) Represents: (a) the Company’s contributions to its 401-k Thrift Savings Plan for each of Messrs. Cecala, Harra, Gibson, and DiGregorio of $6,750 and Mr. Farrell of $6,600 in 2007; and each of Messrs. Cecala, Gibson, Harra, and Farrell of $6,600 and Mr. DiGregorio of $6,600 in 2006; and (b) premiums the Company paid for term life insurance for each of Messrs. Cecala and Harra of $2,280 in 2007 and $2,616 in 2006; Mr. Gibson of $1,539 in 2007 and $1,766 in 2006; Mr. Farrell of $1,573 in 2007 and $1,804 in 2006; and Mr. DiGregorio of $1,140 in 2007 and $1,308 in 2006; and (c) expense the Company recognized for country club memberships for Mr. Cecala of $13,319 in 2007 and $12,649 in 2006 and Mr. Harra of $10,525 in 2007 and $10,314 in 2006.

 

The following provides information about grants of plan-based awards for 2007:

 

 

(1)      Three thousand four hundred fifty-four of these restricted stock awards for Mr. Cecala, 1,619 of these restricted stock awards for Mr. Gibson, 2,085 of these restricted stock awards for Mr. Harra, and all of these restricted stock awards for Messrs. Farrell and DiGregorio vested one-third on February 13, 2008, and one-third will vest on each of February 13, 2009, and February 15, 2010. This restricted stock was received in lieu of 20% of the cash bonus otherwise payable to the Named Executive Officers for 2007, together with an additional 15% of that 20% to compensate for (a) the delay in the executive’s receiving the award and (2) the fact that this portion of the award is made in stock and not in cash. Since it is in the form of restricted stock, this portion of each Named Executive Officer’s bonus is subject to forfeiture prior to vesting.

 

Fifteen thousand four hundred forty-six of these restricted stock awards for Mr. Cecala, 6,178 of these restricted stock awards for Mr. Gibson, and 3,661 of these restricted stock awards for Mr. Harra vest on February 14, 2011.

 

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

 

The following table sets forth information about outstanding equity awards to the Named Executive Officers at December 31, 2007:

 

 

(1)      These options vest on 2/25/2008 and expire ten years after grant.

 

(2)      These options vest on 2/23/2009 and expire ten years after grant.

 

(3)      These options vest on 2/15/2010 and expire ten years after grant.

 

(4)      Restricted stock will vest on 2/25/2008.

 

(5)      Restricted stock will vest in equal annual installments on 2/22/2008 and 2/23/2009.

 

(6)      Restricted stock will vest in equal installments on 2/13/2008, 2/13/2009, and 2/15/2010.

 

(7)      Restricted stock will vest on February 14, 2011.

 

The following table provides information about stock options exercised by and restricted stock vested for each Named Executive Officer during 2007:

 

 

The following table provides information about benefits under our Pension Plan and Supplemental Executive Retirement Plan (“SERP”), for the Named Executive Officers at December 31, 2007:

 

 

(1)      Based on the American Academy of Actuaries 1983 Group Annuity Mortality (Male) table and an assumed interest rate of 6.5%.

 

(2)      Based on the American Academy of Actuaries 1983 Group Annuity Mortality (Male) table and an assumed interest rate of 6.5%.

 

Pension Plan and SERP

 

Our Pension Plan is designed to provide retirement benefits to the Company’s staff members, including the Named Executive Officers. The SERP is designed to provide retirement benefits that would not be permitted to be paid under the Pension Plan by the Internal Revenue Code. The Company does not grant extra years of credited service under the Pension Plan or the SERP.

 

The normal annual retirement benefit from the Pension Plan is the greater of:

 

 

 

(2) 1.0% of the Named Executive Officer’s earnings during 1988 up to one-half of the 1988 Social Security taxable wage base, plus 1.8% of earnings during 1988 in excess of one-half of the Social Security taxable wage base; plus

 

(3) For each year after 1988, (a) 1.25% of the Named Executive Officer’s earnings in that year up to one-half of the Social Security taxable wage base for that year, plus (b) 1.6% of

earnings during that year in excess of one-half of the SSTWB.

 

For purposes of determining amounts to which participants are entitled under the Pension Plan, for years before 1994, earnings include base salary and amounts paid under our Profit-Sharing Bonus Plan (the “Profit-Sharing Bonus Plan”), but do not include bonus or incentive payments. The Profit-Sharing Bonus Plan was terminated in 2003. For years after 1993, earnings also include bonus and incentive payments. Benefits under the Pension Plan vest in full after five years of participation in the plan. The normal form of pension provided under the Pension Plan is a single life annuity or a 50% joint and survivor benefit. The Pension Plan also provides for an actuarially-equivalent joint and survivor annuity with a survivor benefit of 662/3% or 100%, as selected by the participant.

 

The normal monthly retirement benefit from the SERP is 60% of the Named Executive Officer’s average monthly earnings for the 60-month period ending with his or her retirement date, multiplied by a fraction the numerator of which is the Named Executive Officer’s years of credited service at retirement and the denominator of which is 30. All such amounts are reduced by benefits payable from the Pension Plan.

 

For purposes of determining amounts to which participants are entitled under the SERP, average monthly earnings include base salary and amounts paid under the Profit-Sharing Bonus Plan and bonus and incentive plans. The SERP pays a monthly pension, beginning at the same time the Named Executive Officer begins to receive his or her Pension Plan benefit, in the form of a single life annuity or a 50% joint and survivor annuity. Benefits under the SERP begin to vest after five years’ participation in the plan at the rate of one-fifteenth per year, but accelerate and vest in full (a) upon reaching 55 with ten years participation or (b) in the event of a “Change in Control” as that term is defined in the change in control agreements discussed below.

 

Messrs. Cecala, Harra, and DiGregorio are eligible for early retirement under the Pension Plan and the SERP. Each plan provides for a reduction in benefits in the event of early retirement. The maximum reduction is 40% of the benefit available on the normal retirement date if retirement is seven years before that date.

 

 

The assumptions used in valuing the benefits reflected in the table above are detailed in Note 18 to the consolidated financial statements contained in our Annual Report to Shareholders for 2007. Those benefits are not subject to deduction of Social Security or other offset amounts.

 

 

Under change-in-control agreements certain of the Company’s subsidiaries have entered into with certain of their officers, including the Named Executive Officers, those subsidiaries pay severance pay and a continuation of certain benefits if (a) a “Change in Control” occurs and (b) the officer’s employment is terminated involuntarily, either actually or constructively, without cause within two years after that Change in Control. In general, the agreements deem a “Change in Control” to have occurred if any of the following happens:

 

 

Under these agreements, the Named Executive Officer is entitled to severance pay in a lump sum of 115% times three years’ of the Named Executive Officer’s (1) highest base salary in the 12 months preceding the termination of his or her employment and (2) bonus and incentive payments for the preceding calendar year, all discounted to present value at a discount rate of the rate paid on the termination date on U.S. Treasury bills with maturities of one and one-half years. In addition, the Named Executive Officer generally would receive medical, life, disability, and health-and-accident benefits at the subsidiary’s expense for three years. The Compensation Committee concluded that, following a change-in-control and termination of an executive officer’s employment or a diminution of his or her duties, payment of three years’ of the executive officer’s base salary and bonus payments for the preceding year discounted to present value, together with medical, life, disability, and health coverage for three years, is consistent with change-in-control payments offered to executive officers at other institutions. The Compensation Committee believes that these benefits further our corporate goals to provide incentives that promote the retention to our executive officers and further our overall corporate objectives to compensate our executive officers appropriately.

 

In addition, the Named Executive Officers’ unvested stock options and restricted stock awards vest automatically upon a Change in Control. Those payments and the value of thoese benefits upon a Change in Control at December 31, 2007 would have been: Mr. Cecala — $4,440,452; Mr. Gibson — $2,108,176; Mr. Harra — $2,703,426; Mr. Farrell — $1,972,921; and Mr. DiGregorio — $1,293,608. These amounts assume the costs of the Named Executive Officer receiving family coverage for medical, dental, and vision benefits for three years after termination of employment.

 

The vesting of unvested stock options and restricted stock awards accelerates upon a staff member’s disability or retirement. The value of the unvested stock options and restricted stock awards that would accelerate upon the disability or retirement on December 31, 2007 of Mr. Cecala was $967,890; Mr. Gibson was $346,602; Mr. Harra was $377,706; Mr. Farrell was $153,928; and Mr. DiGregorio was $83,928.

 

In addition, the vesting of unvested restricted stock awards accelerates upon a staff member’s death. The value of the unvested restricted stock awards that would accelerate upon the death on December 31, 2007 of Mr. Cecala was $850,890; Mr. Gibson was $320,602; Mr. Harra was $325,706; Mr. Farrell was $114,928; and Mr. DiGregorio was $64,428.

These amounts are independent of retirement benefits payable to these officers.