<PAGE>
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:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
UNIONBANCAL 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):
/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:
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4) Date Filed:
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<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 26, 1999
------------------------
The Annual Meeting of the Shareholders of UNIONBANCAL CORPORATION (the
"Company") will be held on Wednesday, May 26, 1999, at 10:30 a.m. at the
Mandarin Oriental Hotel, Embassy Room, 222 Sansome Street, San Francisco,
California, for the following purposes:
1. To elect twenty directors to hold office until the next Annual Meeting
of Shareholders or until their successors are elected;
2. To approve the Year 2000 UnionBancal Corporation Management Stock Plan;
3. To ratify the selection of Deloitte & Touche LLP as independent auditors
for the Company for the year ending December 31, 1999; and
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on April 2, 1999, as
the record date for determining shareholders entitled to notice of and to vote
in person or by proxy at the Annual Meeting or any adjournment thereof.
Whether or not you presently plan to attend the meeting in person, the Board
of Directors urges you to date, sign, and promptly return the enclosed proxy.
Your giving of such proxy does not preclude your right to vote in person if you
attend the meeting. A postage-prepaid return envelope is enclosed for your
convenience in returning the signed proxy.
Your early attention to the proxy will be appreciated.
By Order of the Board of Directors,
JEAN C. NOMURA
CORPORATE SECRETARY
San Francisco, California
Dated: [April 23], 1999
This notice was accompanied by a mailing of the Company's 1998 Annual Report
to Shareholders. Additional Copies of the Annual Report may be obtained from the
Investor Relations Department, UnionBanCal Corporation, 400 California Street,
San Francisco, California 94104, (415) 765-2969.
<PAGE>
UNIONBANCAL CORPORATION
400 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94104
(415) 765-2969
------------------------
PROXY STATEMENT
---------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of UNIONBANCAL CORPORATION (the "Company") to
be used in voting at the Company's Annual Meeting of Shareholders to be held on
Wednesday, May 26, 1999, at 10:30 a.m. at the Mandarin Oriental Hotel, Embassy
Room, 222 Sansome Street, San Francisco, California, and at any adjournment
thereof (the "Annual Meeting").
This Proxy Statement and the accompanying form of proxy were first sent or
given to shareholders on or about [April 23, 1999].
All expenses incident to the preparation and mailing of, or otherwise making
available to all shareholders, the notice, proxy statement, and proxy will be
paid by the Company. In addition to solicitation of proxies by the use of the
mails, some of the officers and employees of the Company, who will receive no
additional compensation for such services, may solicit proxies personally or by
telephone. The Company will request brokers and nominees who hold Company stock
in their name to furnish proxy material to beneficial owners of the stock and
will reimburse such brokers and nominees for their reasonable expenses incurred
in forwarding solicitation material to such beneficial owners.
On April 2, 1999, the date for determining shareholders entitled to vote at
the meeting, there were [ ] shares outstanding of Common Stock ("Common
Stock") of the Company. To the knowledge of the Company, the only shareholders
owning of record or beneficially on such date more than 5% of the outstanding
voting securities are shown in the following table:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- -------------------------------------- --------------------------------------- ---------------------- -----------
<S> <C> <C> <C>
Common Stock.......................... The Bank of Tokyo-Mitsubishi, Ltd. [] []
("BTM") 7-1, Marunouchi 2-chome,
Chiyoda-ku, Tokyo, 100, Japan
</TABLE>
BTM, WHICH HOLDS AN AGGREGATE OF APPROXIMATELY [ ] OF THE SHARES OF THE
COMPANY'S COMMON STOCK OUTSTANDING ON THE RECORD DATE, INTENDS TO VOTE ITS
SHARES IN FAVOR OF: THE ELECTION OF THE PERSONS NAMED AS NOMINEES FOR DIRECTOR
IN THIS PROXY STATEMENT, THE APPROVAL OF THE YEAR 2000 UNIONBANCAL CORPORATION
MANAGEMENT STOCK PLAN AND THE RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE
LLP AS INDEPENDENT AUDITORS FOR THE COMPANY FOR THE YEAR ENDING DECEMBER 31,
1999. APPROVAL OF THESE PROPOSALS BY THE SHAREHOLDERS IS THEREFORE ASSURED.
Each outstanding share of Common Stock is entitled to one vote on all
matters coming before the meeting. A majority of shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. The affirmative vote of a majority of shares represented and
voting at a duly held meeting at which a quorum is present (which shares voting
affirmatively also constitute at least a majority of the required quorum) shall
be the act of the shareholders. The shareholders' right to cumulate votes for
the election of directors has been eliminated pursuant to the amendment and
restatement of the
1
<PAGE>
Company's Articles of Incorporation and Bylaws approved by the Company's
shareholders at the 1998 annual meeting.
When proxies in the accompanying form are returned, properly dated and
executed, the shares they represent will be voted at the Annual Meeting in
accordance with the shareholder's directions. If no contrary instructions are
given, the persons named in the proxy intend to vote the shares represented by
the proxies (1) in favor of the election of the persons named as nominees for
director in this Proxy Statement, (2) for the approval of the Year 2000
Management Stock Plan, (3) for ratification of the selection of Deloitte &
Touche LLP as independent auditors for the Company for the year ending December
31, 1999, and (4) in accordance with their best judgment on any other matter
which may come before the meeting. If any proxy is marked "withhold authority"
with regard to the election of directors, the shares which such proxy represents
will not be voted either for or against the election of such directors.
The giving of the proxy does not affect any shareholder's right to vote in
person at the Annual Meeting, and a proxy may be revoked by appropriate notice
in writing to the Corporate Secretary of the Company at 400 California Street,
San Francisco, CA 94104, at any time before it is voted. Abstentions and "broker
non-votes" (shares held by brokers or nominees which are present in person or
represented by proxy at the Annual Meeting but as to which voting instructions
have not been received from the beneficial owners or persons entitled to vote
such shares and the broker or nominee does not have discretionary voting power
under rules applicable to brokers) are treated as shares that are present for
purposes of determining the presence of a quorum.
CORPORATE GOVERNANCE
The Company is a bank holding company registered under the Bank Holding
Company Act of 1956, as amended, and is incorporated in the State of California.
The Company's principal subsidiary is Union Bank of California, N.A. (the
"Bank"), a national banking association organized under the laws of the United
States. The Company's 1998 Annual Report provides a review of the Company's
operations during the past year.
The Board of Directors met nine (9) times in 1998. All incumbent directors
attended at least 75% of the Company's Board of Directors and committee meetings
held in 1998, except for Tsuneo Wakai 33%, Blenda J. Wilson 69%, and Kenji
Yoshizawa 11%. Directors who are not full-time officers of the Company or BTM or
its affiliates received an annual combined retainer for service on the Company
and Bank boards and meeting fees for Board meetings attended and for Board
committee meetings attended. The annual combined retainer for service on the
Company and Bank boards is $20,000 which is prorated and payable quarterly in
advance. Directors who are not full-time officers of the Company or BTM or its
affiliates were paid the following: a fee of $1,000 for each Board of Directors
meeting attended except that when Board meetings of the Company and the Bank
were held on the same day, the total fee was limited to $1,000; and, a fee of
$1,000 for each Board committee meeting attended except that when the same
committees of the Company and the Bank had a combined meeting, the total fee was
limited to $1,000. In addition, the annual combined retainer for service on the
Company and Bank Boards for each non-officer committee chair is $5,000 pro-rated
and payable quarterly in advance.
The Company and the Bank have each established the Board committees
described below. The membership of each committee is the same for the Company
and the Bank, and the corresponding committees of both institutions usually hold
combined meetings. Effective January 1999, certain changes in the Board
committee structure were adopted as described below.
The Audit & Examining Committee oversees the Company's financial reporting
and control environment. It meets regularly with the Company's general auditor
and its independent auditors to review the scope and results of their work as
well as to review the Company's quarterly and annual financial statements and
regulatory disclosures with the officers in charge of the Company's financial
reporting, control and disclosure functions. The Committee also makes an annual
recommendation to the Board of
2
<PAGE>
Directors of the Company's independent auditors (see Section III., Ratification
of the Selection of Independent Auditors). In addition, the Committee reviews
reports of examination conducted by bank and bank holding company regulatory
agencies and follows up with appropriate management, so that recommendations and
corrective actions may be implemented. Directors who served on the Committee at
December 31, 1998, were: Sidney R. Petersen, Chair; Mary S. Metz; and Henry T.
Swigert. Charles R. Scott served on the Committee until May 1998. The Committee
met eight (8) times in 1998.
The Credit Policy & Review Committee oversees the credit functions of the
Company including the overall credit portfolio, composite credit policies,
credit review and examination policies, and the methodology and adequacy of the
allowance for credit losses. It also reviews a compliance program for credit
functions and the establishment and delegation of credit authority. In addition,
the Committee reviews reports of examination conducted by bank and bank holding
company regulatory agencies and follows up with appropriate management, so that
recommendations and corrective actions may be implemented. Directors who served
on the Committee at December 31, 1998, were: Stanley F. Farrar, Chair; Richard
D. Farman; Harry W. Low; and Raymond E. Miles. The Committee met eight (8) times
in 1998.
The Executive Compensation & Benefits Committee reviews and approves
executive officer compensation criteria and levels and oversees the Company's
and the Bank's employee benefit plans. The Committee approves the compensation
of the Chief Executive Officer and other executive officers. In addition, it
approves restricted stock awards and stock option grants under the Company's
Management Stock Plan. The Executive Compensation & Benefits Committee Report on
Executive Compensation appears on page 19. Directors who served on the Committee
at December 31, 1998, were: Richard D. Farman, Chair; Jack L. Hancock; Carl W.
Robertson; and Henry T. Swigert. The Committee met nine (9) times in 1998.
The Nominating Committee is responsible for screening, interviewing, and
proposing qualified candidates to fill vacancies on the Board of the Company
and/or the Bank as they occur and recommending to the respective Board the
director nominees to be elected by the shareholders at the annual meeting. In
carrying out its responsibilities, the Committee also considers candidates
recommended by shareholders. Directors who served on the Committee at December
31, 1998, were: Takahiro Moriguchi, Chair; Richard D. Farman; Jack L. Hancock;
J. Fernando Niebla; Carl W. Robertson and Yoshihiko Someya. The Committee met
one (1) time in 1998.
Section 3.2 of the Bylaws of the Company regarding shareholder nomination
for members of the Board of Directors, was revised effective January 27, 1999
and can be summarized as follows: Nominations for election of members of the
Board of Directors may be made by the Board of Directors or by any shareholder
of any outstanding capital stock of the Company entitled to vote for the
election of directors at the Annual Meeting of Shareholders. Notice of intention
to make any nominations by a shareholder shall be made in writing and shall be
delivered or mailed to the Secretary at 400 California Street, San Francisco, CA
94104, not less than one hundred twenty (120) calendar days in advance of the
date the Corporation's proxy statement was released to the shareholders in
connection with the previous year's annual meeting of shareholders. In the event
that no annual meeting was held in the previous year or the date of the annual
meeting has been changed by more than thirty (30) days from the date
contemplated at the time of the previous year's proxy statement, notice by the
shareholder must be received by the Secretary of the Corporation a reasonable
time before the Corporation mails its proxy statement. The notice is to contain
the following information to the extent known to the notifying shareholder: (a)
the name and address of each proposed nominee; (b) the principal occupation of
each proposed nominee; (c) the number of shares of capital stock of the Company
owned by each proposed nominee; (d) the name and residence address of the
notifying shareholder; (e) the number of shares of capital stock of the Company
owned by the notifying shareholder. Nominations not made in accordance with
these procedures may, in the discretion of the chair of the meeting, be
disregarded and upon the chair's instructions, the inspectors of election can
disregard all votes cast for each such nominee.
3
<PAGE>
The Public Policy Committee is responsible for identifying relevant
political, social and environmental trends. The Committee monitors the Bank's
programs which carry out the purposes of the Community Reinvestment Act, equal
employment opportunity laws and other related federal, state and local programs.
Directors who served on the Committee at December 31, 1998, were: Herman E.
Gallegos, Chair; Raymond E. Miles; J. Fernando Niebla; and Blenda J. Wilson. The
Committee met four (4) times in 1998.
During 1998, the Risk Review Committee was responsible for review, oversight
and monitoring of the Company's and the Bank's risk management program in
coordination with other committees of the Board. The committee considered both
bank and bank holding company regulatory agency guidance in connection with its
responsibilities. The committee, through reviews and monitoring of risk
assessments, various management reports, and oversight of the corporate risk
management function, ensured that management had appropriate programs in place
for the effective identification, measurement, control and monitoring of risk.
Directors who served on the Committee at December 31, 1998, were: Henry T.
Swigert, Chair; Harry W. Low; Mary S. Metz; and Carl W. Robertson. The Committee
met four (4) times in 1998. As discussed below, the Risk Review Committee was
disbanded in January 1999.
Other Company Board committees are a Common & Preferred Stock Committee,
which did not meet in 1998, and an Executive Committee which met one (1) time in
1998.
The Trust Committee, a committee of the Bank board only, supervises the
administration of the fiduciary powers of the Bank and the Bank's non-fiduciary
investment management activities. In addition, the Committee reviews reports of
examination conducted by bank and bank holding company regulatory agencies, the
Company's general auditor and its independent auditors and follows up with
appropriate management, so that recommendations and corrective actions may be
implemented. Directors who served on the Committee at December 31, 1998, are:
Carl W. Robertson, Chair; Herman E. Gallegos; Jack L. Hancock; and J. Fernando
Niebla. The Committee met eight (8) times in 1998.
Other Bank Board committees are a National Bank Act Committee (five (5)
meetings), and an Executive Committee which did not meet in 1998.
The following changes to the Board committee structure were adopted as of
January, 1999.
The Risk Review Committee was disbanded. Its duty to oversee business risk
management processes and risk management systems which monitor risk exposures
was transferred to the Audit & Examining Committee, and its duty to oversee
credit risk and related risk management processes was transferred to the Credit
Policy & Review Committee.
The Common & Preferred Stock Committee was also disbanded. All of its duties
were transferred to a newly created Finance and Capital Committee, whose
function is to oversee all aspects of the Company's financial matters (except
those that are the specific responsibility of the Audit & Examining Committee,
Executive Compensation & Benefits Committee, or the Credit Policy & Review
Committee) focusing on financial planning, financial performance compared to
plan, financial processes, capital management, dividend and investment policies,
management of net interest margin and other Asset and Liability management
processes.
Public Policy Committee transferred its responsibility to review fair
lending matters to the Credit Policy & Review Committee. The Nominating
Committee duties were expanded to include corporate governance.
The Trust Committee became a Board committee of the Company as well as the
Bank.
The Board of Directors has adopted a retirement policy which provides that
any director who is employed full time by the Company or the Bank shall retire
from the Board at age 65 and any director who is not employed full time by the
Company or the Bank shall not stand for reelection at the Annual Meeting of
Shareholders following the director's seventieth birthday. The Board has
provided an exception to this
4
<PAGE>
policy for director Tsuneo Wakai who is over age 70 and may stand for reelection
as a director of the Company and the Bank until his successor is elected.
I. ELECTION OF DIRECTORS
Twenty directors of the Company are to be elected at the Annual Meeting to
serve until the next Annual Meeting of Shareholders or until earlier retirement,
resignation or their successors are elected. The nominees as set forth below are
all presently directors of the Company. A resolution of the Company's Board
pursuant to the Bylaws of the Company sets the exact number of directors at
twenty. All nominees, except for Messrs. Wakai and Yoshizawa, are also directors
of the Bank. If relected as directors of the Company, all nominees, except for
Messrs. Wakai and Yoshizawa, are expected to be relected as directors of the
Bank.
Unless authority to vote for directors is withheld as to any or all of them,
it is intended that shares represented by proxies in the accompanying form will
be voted FOR the election of the persons listed below or, if one or more of such
persons shall become unable or unwilling to accept nomination or election, FOR
the election of such other persons as the President or Board of Directors of the
Company may recommend in their place. The Board of Directors has no reason to
believe that any such nominee will be unable or unwilling to serve.
The following information is furnished with respect to the nominees for
director: name, age, the number of shares of the Company's and BTM's Common
Stock beneficially owned by the nominee as of December 31, 1998, the nominee's
business experience during the past five years, directorships in other
corporations, and periods of service as a director of the Company.
<TABLE>
<CAPTION>
SHARES OF SHARES OF COMMON STOCK
COMMON STOCK OF OF THE BANK OF
UNIONBANCAL TOKYO-MITSUBISHI, LTD.
NAME AND PRINCIPAL OCCUPATIONS AGE AS OF CORPORATION OWNED OWNED BENEFICIALLY AS
DURING THE LAST FIVE YEARS APRIL 30, BENEFICIALLY AS OF OF DECEMBER 31,
OF NOMINEES FOR DIRECTOR 1999 DECEMBER 31, 1998+(2) 1998++(2)
- ---------------------------------------- --------- ---------------------- ----------------------
<S> <C> <C> <C>
Richard D. Farman....................... 63 1,500 -0-
Mr. Farman has served as Chairman of
the Board and Chief Executive
Officer of Sempra Energy since July
1998. Mr. Farman has served as a
director of Catellus Development
Corporation since May 1997. Mr.
Farman served as President and Chief
Operating Officer of Pacific
Enterprises since September 1993 to
July 1998 and as Chief Executive
Officer of Southern California Gas
Company, a subsidiary of Pacific
Enterprises from January 1989
through December 1994. Mr. Farman
has been a director of the Company
since November 1988.
Stanley F. Farrar....................... 55 -0- 1,250
Mr. Farrar has been a partner of
Sullivan & Cromwell since October
1984. He served as a director of the
former BanCal Tri-State Corporation
and the former Bank of California,
N.A. from June 1984 until March
1996. Mr. Farrar has been a director
of the Company since April 1996.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
SHARES OF SHARES OF COMMON STOCK
COMMON STOCK OF OF THE BANK OF
UNIONBANCAL TOKYO-MITSUBISHI, LTD.
NAME AND PRINCIPAL OCCUPATIONS AGE AS OF CORPORATION OWNED OWNED BENEFICIALLY AS
DURING THE LAST FIVE YEARS APRIL 30, BENEFICIALLY AS OF OF DECEMBER 31,
OF NOMINEES FOR DIRECTOR 1999 DECEMBER 31, 1998+(2) 1998++(2)
- ---------------------------------------- --------- ---------------------- ----------------------
<S> <C> <C> <C>
Herman E. Gallegos...................... 68 468 -0-
Mr. Gallegos has been an independent
management consultant since January
1982. He has served as a director of
SBC Communications Inc. since April
1997 and The California Endowment
since May 1996. Mr. Gallegos has
been a director of the Company since
November 1988.
Jack L. Hancock......................... 69 1,500(3) -0-
Mr. Hancock was Executive Vice
President of Pacific Bell from
February 1988 until December 1993.
He has been a director of Whittaker
Corporation since February 1994, MGC
Communications and Bankserv, LLP
since July 1996, Interlink
Technology since December 1997 and
Persistence Software since September
1998. Mr. Hancock has been a
director of the Company since July
1994.
Richard C. Hartnack..................... 53 148,713(4)(5) -0-
Mr. Hartnack has served as Vice
Chairman and head of the Community
Banking Group of the Company and the
Bank since April 1996. He served as
Vice Chairman of the former Union
Bank from June 1991 until March
1996. Mr. Hartnack has served as a
director of the Company since June
1991.
Kaoru Hayama............................ 64 -0- 34,612
Mr. Hayama has served as Chairman of
the Company and the Bank since
September 1998. Mr. Hayama served as
Deputy President of BTM from April
1996 to June 1998. Mr. Hayama had
previously served as a director of
former Union Bank during 1992-94,
while also serving as The Bank of
Tokyo, Ltd. resident senior managing
director for the Americas. He was
simultaneously chairman of the Bank
of Tokyo Trust Company in New York.
Mr. Hayama has served as a director
of the Company since September 1998.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
SHARES OF SHARES OF COMMON STOCK
COMMON STOCK OF OF THE BANK OF
UNIONBANCAL TOKYO-MITSUBISHI, LTD.
NAME AND PRINCIPAL OCCUPATIONS AGE AS OF CORPORATION OWNED OWNED BENEFICIALLY AS
DURING THE LAST FIVE YEARS APRIL 30, BENEFICIALLY AS OF OF DECEMBER 31,
OF NOMINEES FOR DIRECTOR 1999 DECEMBER 31, 1998+(2) 1998++(2)
- ---------------------------------------- --------- ---------------------- ----------------------
<S> <C> <C> <C>
Harry W. Low............................ 68 5,425(3) -0-
Justice Low has been a mediator and
arbitrator with Judicial Arbitration
& Mediation Services/ Endispute,
Inc. (JAMS/Endispute) since March
1992. He was the Presiding Justice
for the State of California Court of
Appeal, 1st District until his
retirement in January 1992. Justice
Low has been a director of the
Company since January 1993.
Mary S. Metz............................ 61 1,217(3) -0-
Dr. Metz has been President of S. H.
Cowell Foundation since January 5,
1999. She was the Dean of University
Extension, University of California,
Berkeley, from July 1991 to
September 1998. She was President of
Mills College from 1981 to June
1990. Dr. Metz has served as a
director of SBC Communications, Inc.
and its predecessors since July
1986, Pacific Gas & Electric Co.
since March 1986, and Longs Drugs
Stores since February 1991. Dr. Metz
has been a director of the Company
since November 1988.
Raymond E. Miles........................ 66 -0- 1,214
Professor Miles is Professor Emeritus
and former Dean of the Haas School
of Business at the University of
California in Berkeley where he has
served since July 1963. He served as
a director of the former BanCal
Tri-State Corporation and the former
Bank of California, N.A. from
January 1987 to March 1996. He has
served as a director of Granite
Construction Co., Inc., since May
1988. Professor Miles has been a
director of the Company since April
1996.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
SHARES OF SHARES OF COMMON STOCK
COMMON STOCK OF OF THE BANK OF
UNIONBANCAL TOKYO-MITSUBISHI, LTD.
NAME AND PRINCIPAL OCCUPATIONS AGE AS OF CORPORATION OWNED OWNED BENEFICIALLY AS
DURING THE LAST FIVE YEARS APRIL 30, BENEFICIALLY AS OF OF DECEMBER 31,
OF NOMINEES FOR DIRECTOR 1999 DECEMBER 31, 1998+(2) 1998++(2)
- ---------------------------------------- --------- ---------------------- ----------------------
<S> <C> <C> <C>
Takahiro Moriguchi...................... 54 6,000(1) 7,400
Mr. Moriguchi has served as President
and Chief Executive Officer of the
Company and the Bank since May 1997.
He served as Vice Chairman and Chief
Financial Officer of the Company and
the Bank from April 1996 to May
1997. He served as Vice Chairman and
Chief Financial Officer of the
former Union Bank from June 1993
until March 1996. He served as
General Manager of the former Bank
of Tokyo, Ltd.'s Capital Markets
Division 2 from May 1992 to May
1993. He has served as a director of
The Bank of Tokyo-Mitsubishi, Ltd.
since April 1996 and as a director
of the former Bank of Tokyo, Ltd.
prior thereto. Mr. Moriguchi has
served as a director of the Company
since June 1993.
J. Fernando Niebla...................... 59 150 105(6)
Mr. Niebla has served as Chairman of
Infotec Commercial Systems since
December 1995 and as its Chief
Executive Officer until June 30,
1998. From September 1979 to June
1996, he served as Chairman and
Chief Executive Officer of Infotec
Development, Inc. He served as a
director of the former BanCal
Tri-State Corporation and the former
Bank of California, N.A. from July
1994 through March 1996. Mr. Niebla
has been a director of the Company
since April 1996.
Sidney R. Petersen...................... 68 2,228(3) -0-
Mr. Petersen has been a consultant and
private investor since August 1984.
He served as Chairman and Chief
Executive Officer of Getty Oil
Company until his retirement in July
1984. He has been a director of
Avery Dennison Corporation since
December 1981; NICOR, Inc. since May
1987; Sypris Solutions, Inc. since
March 1998; and Seagull Energy
Corporation since October 1996. Mr.
Petersen has been a director of the
Company since November 1988.
Carl W. Robertson....................... 62 -0- 1,250
Mr. Robertson has been the Managing
Director of Warland Investments
Company since January 1985. He
served as a director of the former
BanCal Tri-State Corporation and the
former Bank of California, N.A. from
April 1975 to March 1996. Mr.
Robertson has been a director of the
Company since April 1996.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
SHARES OF SHARES OF COMMON STOCK
COMMON STOCK OF OF THE BANK OF
UNIONBANCAL TOKYO-MITSUBISHI, LTD.
NAME AND PRINCIPAL OCCUPATIONS AGE AS OF CORPORATION OWNED OWNED BENEFICIALLY AS
DURING THE LAST FIVE YEARS APRIL 30, BENEFICIALLY AS OF OF DECEMBER 31,
OF NOMINEES FOR DIRECTOR 1999 DECEMBER 31, 1998+(2) 1998++(2)
- ---------------------------------------- --------- ---------------------- ----------------------
<S> <C> <C> <C>
Yoshihiko Someya........................ 51 -0- 23,350
Mr. Someya has served as Deputy
Chairman of the Company since July
1998. He served as Executive Vice
President of the Company from March
1998 until July 1998. He served as
Deputy General Manager of the Osaka
Branch of The Bank of Tokyo
Mitsubishi, Ltd. from May 1996 until
March 1998. He served as General
Manager, Financial Institutions
Division of former Mitsubishi Bank,
Ltd. from May 1995 until May 1996.
He served as Director and General
Manager of DC Card Co., Ltd., a
subsidiary of former Mitsubishi
Bank, Ltd. from May 1993 until May
1995. Mr. Someya has served as a
director of the Company since July
1998.
Henry T. Swigert........................ 68 -0- 5,250(7)
Mr. Swigert has served as Chairman of
ESCO Corporation since January 1979.
From April 1989 until April 1996, he
served as a director of the former
BanCal Tri-State Corporation and the
former Bank of California, N.A. Mr.
Swigert has been a director of the
Company since April 1996.
Tsuneo Wakai............................ 72 -0- 69,890
Mr. Wakai has been the Senior Advisor
of The Bank of Tokyo-Mitsubishi,
Ltd. since January 1998. Prior
thereto, he was Chairman of the
Board of The Bank of
Tokyo-Mitsubishi, Ltd. from April
1996 through December 1997, and the
President of the former Mitsubishi
Bank, Ltd. from June 1990 through
March 1996. Mr. Wakai has been a
director of the Company since April
1996.
Robert M. Walker........................ 57 203,700(3)(4)(5) -0-
Mr. Walker has served as Vice Chairman
of the Commercial Financial Services
Group for the Company and the Bank
since April 1996. He served as Vice
Chairman in the same position with
the former Union Bank from July 1992
until March 1996. He has served as a
director of the Company since July
1992.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
SHARES OF SHARES OF COMMON STOCK
COMMON STOCK OF OF THE BANK OF
UNIONBANCAL TOKYO-MITSUBISHI, LTD.
NAME AND PRINCIPAL OCCUPATIONS AGE AS OF CORPORATION OWNED OWNED BENEFICIALLY AS
DURING THE LAST FIVE YEARS APRIL 30, BENEFICIALLY AS OF OF DECEMBER 31,
OF NOMINEES FOR DIRECTOR 1999 DECEMBER 31, 1998+(2) 1998++(2)
- ---------------------------------------- --------- ---------------------- ----------------------
<S> <C> <C> <C>
Hiroshi Watanabe........................ 58 -0- 22,506
Mr. Watanabe has served as the
Managing Director and Chief
Executive Officer of The Bank of
Tokyo-Mitsubishi, Ltd., Headquarters
for the Americas, since July 1998.
Prior to that he served as Managing
Director and General Manager,
Corporate Planning Division of The
Bank of Tokyo-Mitsubishi from April
1996 to July 1998, and he served in
the same capacity in the Planning
Division of the former Bank of
Tokyo, Ltd. from June 1995 to April
1996. Mr. Watanabe served as a
Director and General Manager
Planning Division of the former Bank
of Tokyo, Ltd. from June 1992 to
June 1995, and in various positions
with the former Bank of Tokyo, Ltd.
prior to 1992. Mr. Watanabe has been
a director of the Company since July
1998.
Blenda J. Wilson........................ 58 600 -0-
Dr. Wilson has served as the President
of California State University,
Northridge since September 1992. She
is the former Chancellor of the
University of Michigan-Dearborn. Dr.
Wilson has been a director of the
Company since July 1993.
Kenji Yoshizawa......................... 66 663(1) 45,186
Mr. Yoshizawa has served as the Deputy
President and director of The Bank
of Tokyo-Mitsubishi, Ltd. since
April 1996. He served as Deputy
President and director of the former
Bank of Tokyo, Ltd. from June 1990
through March 1996. He served as
Chairman and Chief Executive Officer
of The Bank of Tokyo Trust Company
from September 1989 to September
1990. He also served as a Senior
Managing Director and Managing
Director of the former Bank of
Tokyo, Ltd. from April 1986 to June
1990. Mr. Yoshizawa has been a
director of the Company since
September 1989.
All directors and executive officers as
a group (28 persons)(1)(2)(4)(5)(6)... [] []
</TABLE>
- ------------------------
+ All mention of UnionBanCal Corporation stock refers to shares of Common
Stock. The number of shares reflect the 3 for 1 stock split effective
December 21, 1998
++ As of December 31, 1998, there were [ ] shares outstanding of Common
Stock of BTM.
1 The 142,925,616 shares of Company Common Stock owned by BTM as of December
31, 1998, do not include the shares of Company Common Stock owned by
Takahiro Moriguchi, Yoshihiko Someya,
10
<PAGE>
Hiroshi Watanabe, Kenji Yoshizawa and executive officers of the Company who
are associated as officers or directors of BTM.
2 All shares of Common Stock of the Company and BTM are held directly by the
directors and executive officers of the Company and BTM, unless otherwise
indicated. No director or executive officer of the Company or BTM,
individually or as a group, owns beneficially more than 1% of the
outstanding shares of Common Stock of the Company or BTM.
3 Of the 1,500 shares, 600 shares are owned by the Hancock Family Trust of
which Jack L. Hancock and Patricia B. Hancock are trustees. Of the 5,425
shares, 4,825 shares are owned by the Harry W. Low and Mayling J. Low Trust
of which Harry W. Low and Mayling J. Low are trustees. Of the 1,217 shares,
150 shares are owned by the Mary S. Metz Trust of which Mary S. Metz is a
trustee. The 2,228 shares are owned by the Petersen Family Trust of which
Sidney R. Petersen and Nancy M. Petersen are trustees. Of the 203,700
shares, 39,150 shares are owned by the Robert and Judith Walker 1998 Trust
of which Robert M. Walker and Judith Walker are trustees.
4 The shares indicated under the Company column include the following shares
of restricted stock granted from the inception of the Management Stock Plan
in 1990 through December 31, 1998, to and held by the named individuals and
the group as a whole including restricted stock vested within 60 days of
December 31, 1998:
<TABLE>
<S> <C>
Richard C. Hartnack................................................ 65,700
Robert M. Walker................................................... 22,050
Executive Officers as a group...................................... 112,056
</TABLE>
5 The shares indicated under the Company column include the following shares
of stock options granted from the inception of the Management Stock Plan in
1990 through December 31, 1998, to and exercisable by the named individuals
and the group as a whole including stock options vested within 60 days of
December 31, 1998:
<TABLE>
<S> <C>
Richard C. Hartnack................................................ 47,001
Robert M. Walker................................................... 106,998
Executive Officers as a group...................................... 258,690
</TABLE>
6 The shares indicated are held as American Depository Shares, each of which
represents one share of BTM Common Stock.
7 The shares indicated are American Depository Shares held by the Henry T.
Swigert Trust, each of which represents one share of BTM Common Stock.
11
<PAGE>
II. APPROVAL OF YEAR 2000 UNIONBANCAL CORPORATION MANAGEMENT STOCK PLAN
The Board of Directors recommends a vote FOR the approval of the Year 2000
UnionBanCal Management Stock Plan (the "2000 Management Stock Plan") attached as
Exhibit A, which will take effect upon the expiration of the UnionBanCal
Corporation Management Stock Plan ("Management Stock Plan"). The Board of
Directors has approved the 2000 Management Stock Plan subject to shareholder
approval.
MATERIAL PROVISIONS OF THE 2000 MANAGEMENT STOCK PLAN
The 2000 Management Stock Plan authorizes awards of up to 10,000,000 shares
of Common Stock of the Company by means of stock grants, incentive stock options
(as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code")), nonqualified stock options, stock appreciation rights ("SARs"), and
stock grants or sales. As of , the market value of the Common Stock
is per share. The size of the award will depend on the individual's
contribution to overall results of the Company and other factors that the Board
considers significant.
The purposes of the Plan are to (1) provide competitive long-term
compensation that will attract and retain key executives, non-employee directors
and/or consultants who contribute significantly to the financial success of the
Company and (2) further align shareholder and management interest through
increased employee stock ownership. The Plan is to be administered by the
Executive Compensation & Benefits Committee of the Company's Board of Directors
(the "Committee").
Employees, Non-employee Directors and/or consultants of the Company and its
subsidiaries are eligible for awards of stock options, stock grants/sales or
SARs under the 2000 Management Stock Plan. The approximate number of eligible
persons currently in each category are as follows: Employees (750) and
Non-Employee Directors (12). The Company does not currently intend to grant any
awards to consultants. The Committee will determine the categories of the
persons eligible for such awards and determine the number of shares to be
subject to each option or grant. Individual stock awards will be based upon each
person's duties and responsibilities, value of his/her services, his/her present
and potential contributions to the success of the Company, the anticipated years
of future services, and other relevant factors. The Committee will then approve
awards to such eligible persons.
The exercise price for stock options granted pursuant to the 2000 Management
Stock Plan shall not be less than the fair market value of the Common Stock on
the date of grant. In general, the option shall vest over three years and its
term shall not exceed ten years except that option awards to non-employee
directors shall vest immediately. The consideration to be received by the
Company for the exercise of stock options or purchase of stock shall be cash,
provided that the Committee, in its sole discretion, may permit a participant to
pay the exercise price or stock purchase price in whole or in part by: (a)
delivery of an irrevocable direction to a securities broker or brokers to sell
shares and deliver all or a portion of the proceeds to the Company in payment
for the Common Stock, or (b) Common Stock.
The Board of Directors may amend or terminate the 2000 Management Stock Plan
at any time without the approval of the shareholders; provided, however, that
the approval of the holders of a majority of the outstanding shares of the
Company entitled to vote is required for any amendment which increases the
number of shares for which options or stock grants/sales may be awarded or
materially changes the standards of eligibility under the 2000 Management Stock
Plan. However, no such action by the Board of Directors or shareholders may
unilaterally alter or impair an employee's rights under any option or stock
grant/sale previously awarded under the 2000 Management Stock Plan unless the
employee consents. In any event, the 2000 Management Stock Plan will terminate
on January 1, 2010.
The awards to be granted to participants pursuant to the 2000 Management
Stock Plan are not determinable at this time.
12
<PAGE>
TAX TREATMENT OF AWARDS UNDER THE 2000 MANAGEMENT STOCK PLAN
STOCK OPTIONS
Options granted under the 2000 Management Stock Plan may either be
"incentive stock options" as defined under Section 422 of the Code or
"non-qualified stock options". If an option granted under the 2000 Management
Stock Plan is an incentive stock option, the optionee will recognize no income
upon grant of the incentive stock option and incur no tax liability due to the
exercise if requisite holding periods are met, unless the optionee is subject to
alternative minimum tax. The Company will not be allowed a deduction for federal
income tax purposes as a result of the exercise of an incentive stock option
regardless of the applicability of the alternative minimum tax. Upon the sale or
exchange of the shares at least two years after the grant of the option and one
year after the receipt of the shares by the optionee due to the exercise of the
option, any gain will be treated as long-term capital gain. If these holding
periods are not satisfied, the optionee will recognize ordinary income equal to
the difference between the exercise price and the lower of the fair market value
of the stock at the date of the option exercise or the sale price of the stock.
The Company will be entitled to a deduction in the same amount as the ordinary
income recognized by the optionee. Any gain recognized on such premature
disposition of the shares in excess of the amount treated as ordinary income
will be characterized as long-term or short-term capital gain depending on how
long the optionee held the stock.
All other options that do not qualify as incentive stock options are
referred to as "non-qualified" options. An optionee will not recognize any
taxable income at the time he is granted a non-qualified option. Upon exercising
a non-qualified option, an optionee will recognize ordinary income for tax
purposes measured by the excess of the then fair market value of the shares over
the option price. Upon resale of such shares by the optionee, any difference
between the sales price and the exercise price, to the extent not recognized as
ordinary income as provided above, will be treated as capital gain or loss, and
will qualify for long term capital gain or loss treatment if the shares have
been held for the requisite holding period. For non-qualified stock options, the
Company will receive an income tax deduction for the amount of income recognized
by the optionee.
STOCK GRANTS/SALES
Stock grants/sales under the 2000 Management Stock Plan are taxable to the
recipient on the earlier of when the shares received are transferable or not
subject to a substantial risk of forfeiture. Taxable income equals the excess of
the fair market value of the stock received less the amount paid, if any, for
the shares. The Company will receive an income-tax deduction for the amount of
income recognized by the recipient.
SARS
Upon exercising an SAR, an optionee will recognize ordinary income for
federal tax purposes measured by the excess of the fair market value of the
option shares subject to the SAR over the option price. For SARs, the Company
will receive an income tax deduction for the amount of income recognized by the
optionee.
The foregoing is only a summary of the federal income tax rules governing
stock options, stock grants/ sales and SARs under the Plan. The rules on this
area are complex and subject to frequent change. State and local income tax
rules may differ.
13
<PAGE>
III. RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The Board of Directors recommends a vote FOR ratifying the selection of
Deloitte & Touche LLP as independent auditors for the Company.
The Board has appointed Deloitte & Touche LLP as the Company's independent
auditors for the year ending December 31, 1999. The appointment was recommended
by the Audit and Examining Committee. Shareholders are being asked to ratify
this selection at the Annual Meeting. The firm of Deloitte & Touche LLP has
audited the accounts of the Company since 1996 and is considered well qualified.
Audit services include the annual audit examination, limited reviews of
unaudited quarterly financial data, assistance in filings with various
regulatory authorities and with the Annual Report to Shareholders, and
discussions regarding accounting principles and practices followed by the
Company in preparing its financial statements.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so,
and are also expected to be available to answer questions.
14
<PAGE>
IV. COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENT AND OTHERS
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation for the last three fiscal
years of the Chief Executive Officer of the Company, and the four next most
highly compensated named executive officers of the Company (other than the Chief
Executive Officer) who served as executive officers on December 31, 1998 ("named
executive officers").(1)
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------------------------------
ACTUAL OTHER ANNUAL
NAME & PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(2)
- --------------------------------------------- ---- -------- -------- ----------------
<S> <C> <C> <C> <C>
Takahiro Moriguchi........................... 1998(1) $329,735 $ 0
President and Chief 1997 $378,785 $ 0
Executive Officer 1996 $433,258 $ 0 $77,834
Kaoru Hayama ................................ 1998(1) $143,949 $ 0
Chairman of the Board 1997 $ 0 $ 0
1996 $ 0 $ 0
Yoshihiko Someya ............................ 1998(1) $299,651 $ 0
Deputy Chairman of the Board 1997 $ 0 $ 0
1996 $ 0 $ 0
Richard Hartnack ............................ 1998(1) $415,000 $250,000
Vice Chairman of the Board 1997 $353,842 $240,000
1996 $340,962 $138,000
Robert Walker ............................... 1998(1) $413,627 $300,000
Vice Chairman of the Board 1997 $353,842 $240,000
1996 $340,962 $138,000
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------------------
AWARDS
------------------------------ PAYOUTS
RESTRICTED SECURITIES ---------
STOCK AWARDS IN UNDERLYING LONG-TERM ALL OTHER
NAME & PRINCIPAL POSITION DOLLARS(3) OPTIONS(4) INCENTIVES COMPENSATION(5)
- --------------------------------------------- --------------- ---------- --------- ----------------
<S> <C> <C> <C> <C>
Takahiro Moriguchi........................... $ 0 -0- -0- $ 0
President and Chief $ 0 -0- -0- $ 0
Executive Officer $ 0 -0- -0- $ 0
Kaoru Hayama ................................ $ 0 -0- -0- $ 0
Chairman of the Board $ 0 -0- -0- $ 0
$ 0 -0- -0- $ 0
Yoshihiko Someya ............................ $ 0 -0- -0- $ 0
Deputy Chairman of the Board $ 0 -0- -0- $ 0
$ 0 -0- -0- $ 0
Richard Hartnack ............................ $ 0 19,500 -0- $4,800
Vice Chairman of the Board $ 53,100 15,000 -0- $4,750
$ 32,925 18,000 $100,000 $4,500
Robert Walker ............................... $447,000 19,500 -0- $4,800
Vice Chairman of the Board $ 53,100 15,000 -0- $6,263
$ 32,925 18,000 $100,000 $6,193
</TABLE>
- ------------------------------
(1) Messrs. Moriguchi, Hayama and Someya are not eligible to receive restricted
stock awards, stock option grants, performance share awards, long term
incentive payments or the annual bonus to be paid in 1999 for 1998
performance. Their compensation takes into consideration the BTM Expatriate
Pay Program; see Executive Compensation & Benefits Committee Report on
Executive Compensation--Overview, Policy Making Expatriate Officer
Compensation, and Chief Executive Compensation.
Mr. Hayama was elected Chairman of the Board in September of 1998,
succeeding Mr. Tamotsu Yamaguchi.
Mr. Someya began employment with the Company in March 1998, and was elected
Deputy Chairman in July 1998.
The data set forth in this table for the above five (5) officers includes
all compensation awarded to, earned by or paid to them from any source for
services rendered to the Company and its subsidiaries. Two additional
executive officers received 1998 cash compensation that was greater than Mr.
Moriguchi's compensation and less than Mr. Walker's compensation. They are
not included as named executive officers, because they are lower ranking
policy making officers than the listed named executive officers and because
of anomalies created by the BTM Expatriate Pay Program.
(2) Perquisites or personal benefits provided to named executive officers in
each of the years indicated did not exceed the lesser of $50,000 or 10% of
annual salary and bonus except as indicated. The value of an initiation fee
for a club membership paid for in the name of Mr. Moriguchi in 1996 was
$46,476.
(3) The value listed for restricted stock awards was based on the market price
of the Company's Common Stock at grant date. A three-for-one (3-for-1) split
of the Company's Common Stock took place on December 21, 1998 (the "3-for-1
Split"). Mr. Hartnack was granted 0 shares in 1998, 2,400 shares in 1997,
and 1,800 shares in 1996 of restricted stock, as calculated after the
3-for-1 Split. Mr. Walker was granted 18,000 shares in 1998, 2,400 shares in
1997, and 1,800 shares in 1996 of restricted stock as calculated after the
3-for-1 Split.
The aggregate value of restricted stock awards as of December 31, 1998, held
by Mr. Hartnack was $2,237,906 and by Mr. Walker was $751,078 based on the
post 3-for-1 Split market price on December 31, 1998. Each award granted to
Messrs. Hartnack and Walker vests ratably over four years on the anniversary
of the grant date for each award, except for the 1997 award which vests 100%
on January 1, 2000. As of December 31, 1998, the total vested and unvested
shares of restricted stock awards held by Mr. Hartnack was 65,700 and by Mr.
Walker, 22,050. Program participants have the right to vote their restricted
shares and receive dividends.
(4) Option shares granted to Mr. Hartnack and Mr. Walker reflect the number of
shares as a result of the 3-for-1 Split.
(5) Includes dollar value of match and stock discount contributions to the Union
Bank of California 401(k) Plan.
15
<PAGE>
STOCK OPTIONS
The following tables summarize grants and exercises of options to purchase
Common Stock during 1998 to or by the named executive officers, and the grant
date present value of options held by such persons at the end of 1998. The
Company did not reprice any options during 1998 or any prior year, and did not
provide executives Stock Appreciation Rights (SARs). In 1998, officers who are
expatriates, including the Chairman; the President and Chief Executive Officer;
and the Deputy Chairman were not eligible to receive stock options; please refer
to the Executive Compensation & Benefits Committee Report on Executive
Compensation: Overview.
OPTION GRANTS IN LAST FISCAL YEAR (1998)(1)
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS GRANTED GRANT DATE
UNDERLYING OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION PRESENT
GRANTED(3) FISCAL YEAR PRICE(3) DATE VALUE(2)
------------------- ----------------- --------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Richard C. Hartnack....................... 19,500 3.65% $ 35.083 5/1/08 $ 217,035
Robert M. Walker.......................... 19,500 3.65% $ 35.083 5/1/08 $ 217,035
</TABLE>
- ------------------------
(1) All options are nonqualified stock options to purchase shares of the
Company's Common Stock. The exercise price of the options is 100% of the
fair market value on the date the option was granted adjusted to the post
3-for-1 Split price. Options are granted for a term of no more than ten (10)
years. The options become exercisable pro rata over three (3) years from the
grant date, subject to continuous employment or earlier forfeiture if the
employee terminates.
(2) Estimated present value at grant date, based on the Black-Scholes option
pricing model with assumptions applicable to the Company. The assumptions
used in the model were projected volatility of 29.20% risk-free rate of
return of 5.77%, annual dividend yield of 2.17%, and average time to
exercise of 6 years. The actual value, if any, an executive may realize will
depend on the excess of the actual stock price over the exercise price on
the date the option is exercised.
(3) Option shares and pricing have been adjusted to reflect the result of the
3-for-1 Split.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR-END(3) AT FISCAL YEAR-END(1)(2)
ACQUIRED ON VALUE -------------------------- ------------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------- ----------- ----------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard C. Hartnack................... -0- $ 0.00 47,001 35,502 $ 903,355.56 $ 214,023.87
Robert M. Walker...................... -0- $ 0.00 106,998 35,502 $ 2,327,038.62 $ 214,023.87
</TABLE>
- ------------------------
(1) The exercise price of post 3-for-1 Split outstanding options for these
officers ranges from $8.92 to $22.13.
(2) The value of options is calculated based on the amount by which the closing
price of the stock as of the end of the last fiscal year, ended December 31,
1998 ($34.06) exceeds the exercise price. This value is represented by the
post 3-for-1 Split closing price.
(3) Option shares have been adjusted to reflect the result of the 3-for-1 Split.
16
<PAGE>
LONG-TERM INCENTIVE PLAN
The following table summarizes awards made during 1998 under the 1997
UnionBanCal Corporation Performance Share Plan to the named executive officers,
with estimated future payouts. Messrs. Hartnack and Walker each were awarded the
target number of 6,600 performance shares in 1998. In 1998, officers who are
expatriates, including the Chairman, the President and Chief Executive Officer,
and the Deputy Chairman were not eligible to receive Performance Share Plan
Awards; please refer to the Executive Compensation & Benefits Committee Report
on Executive Compensation: Overview.
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK PRICE-BASED PLANS
---------------------------------------
NUMBER OF SHARES, PERFORMANCE OR OTHER PERIOD TARGET
UNITS OR OTHER RIGHTS UNTIL MATURATION OR PAYOUT THRESHOLD (#) (#) MAXIMUM (#)
--------------------- --------------------------- --------------- --------- -----------
<S> <C> <C> <C> <C> <C>
Richard C. Hartnack................... 6,600 3 years 0 6,600 13,200
Robert M. Walker...................... 6,600 3 years 0 6,600 13,200
</TABLE>
- ------------------------
(1) Performance share awards shown in this table were granted in accordance with
the 1997 UnionBanCal Corporation Performance Share Plan approved by the
shareholders at the Annual Meeting, May 28, 1997. Under this plan,
performance shares may be earned based on the Company's financial
performance relative to its Peer Group. The value of a performance share
will be equal to the average price of the Company's common stock during the
final six (6) months of the performance period.
(2) Performance Shares have been adjusted to reflect the result of the 3-for-1
Split.
PENSION PLANS
The following table indicates the estimated annual benefit payable to a
covered participant in the Union Bank of California Retirement Plan, retiring at
age 65, based on compensation and years of service to the Company, its
participating subsidiaries and certain affiliates. Employees covered by the
retirement plans of BTM, including Messrs. Moriguchi, Hayama and Someya, are
excluded from participation. The amounts shown in the table reflect straight
life annuity amounts and do not reflect any Social Security offsets and have
been calculated without reference to the maximum limitations imposed by the
Internal Revenue Code of 1986, as amended (the "Code").
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ANNUAL BENEFIT
YEARS OF SERVICE(2)
-------------------------------
COMPENSATION(1) 10 20 30
- ------------------------------------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
100,000............................................................ 20,000 40,000 60,000
200,000............................................................ 40,000 80,000 120,000
300,000............................................................ 60,000 120,000 180,000
400,000............................................................ 80,000 160,000 240,000
500,000............................................................ 100,000 200,000 300,000
600,000............................................................ 120,000 240,000 360,000
</TABLE>
- ------------------------
(1) Compensation includes base salary only as of December 31, 1998, which was
$415,000 for Mr. Hartnack, and $415,000 for Mr. Walker.
(2) As of December 31, 1998, Mr. Hartnack and Mr. Walker had 8 and 7 years of
service, respectively.
17
<PAGE>
Benefits in excess of limitations imposed by the Code may be paid by the
Company through individual supplemental retirement contracts, or to certain
officers of the Company pursuant to its Supplemental Executive Retirement Plan.
The Union Bank Supplemental Executive Retirement Plan benefits were extended to
senior vice presidents and other senior executives of the former Union Bank,
including named executive officers of the Company, except Messrs. Moriguchi,
Hayama and Someya, on November 17, 1995. The Supplemental Executive Retirement
Plan was amended on December 10, 1997, extending benefits to senior vice
presidents and other senior executives of Union Bank of California, N.A. Certain
officers of the pre-1988 Union Bank are participants in the Executive
Supplemental Benefit Plan which provides a benefit equal to 20% or 30% of the
officer's compensation, fixed at 1990 levels, payable for ten years.
EMPLOYMENT AGREEMENTS
Richard C. Hartnack entered into an Employment Agreement with the Company
when he began employment with the Company in 1991. The Company entered into a
new Employment Agreement with Mr. Hartnack effective January 1, 1998 which
supersedes the 1991 Employment Agreement. Mr. Hartnack is entitled, under
certain circumstances, to severance benefits including (a) the greater of (i)
salary continuation of base salary for two years plus a prorated bonus amount
equal to the average of Mr. Hartnack's annual bonus (excluding an award of long
term incentives) for the three most recent bonus determination years, or (ii)
the salary continuation amount payable under the Bank's then existing separation
pay plan, (b) benefits payable to participants at or above the level of
Executive Vice Presidents for this salary continuation period under the Bank's
separation plan, and (c) vesting in full of any target award amount under his
outstanding grants of performance shares under the UNBC Performance Share Plan,
and payment of such vested shares within 120 days following his termination of
employment. Additionally, Mr. Hartnack will receive a supplement which will
provide the actuarial equivalent of the extra amount Mr. Hartnack would receive
under the Union Bank of California Retirement Plan if the limitations on
benefits set forth in Sections 415 and 401(a)(17) of the Code did not apply. In
addition, the supplement will provide the actuarial equivalent of the extra
amount Mr. Hartnack would receive if the Union Bank of California Retirement
Plan had taken into account Mr. Hartnack's nine previous years of service with
the First National Bank of Chicago. The supplement will be reduced by the
actuarial equivalent of the lump sum distributions Mr. Hartnack has received
from the qualified and non-qualified plans of First National Bank of Chicago and
amounts payable under the Bank's Supplemental Executive Retirement Plan.
Robert M. Walker entered into an Employment Agreement with the Company when
he began employment with the Company in 1992. The Company entered into a new
Employment Agreement with Mr. Walker effective January 1, 1998, which supersedes
the 1992 Employment Agreement. Mr. Walker is entitled, under certain
circumstances, to severance benefits including (a) the greater of (i) salary
continuation of base salary for two years plus a prorated bonus amount equal to
the average of Mr. Walker's annual bonus (excluding an award of long term
incentives) for the three most recent bonus determination years, or (ii) the
salary continuation amount payable under the Bank's then existing separation pay
plan, (b) benefits payable to participants at or above the level of Executive
Vice Presidents for this salary continuation period under the Bank's separation
plan, and (c) vesting in full of any target award amount under his outstanding
grants of performance shares under the UNBC Performance Share Plan, and payment
of such vested shares within 120 days following his termination of employment.
Additionally, Mr. Walker will receive a pension supplement which consists of the
actuarial equivalent of the extra amount Mr. Walker would receive under the
Union Bank of California Retirement Plan if the limitations on benefits set
forth in Sections 415 and 401(a)(17) of the Code did not apply. This supplement
also credits Mr. Walker with an additional five (5) years of credited service.
This pension supplement will be reduced by any amounts payable under the Bank's
Supplemental Executive Retirement Plan.
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EXECUTIVE COMPENSATION & BENEFITS COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW
The Company's Executive Compensation & Benefits Committee (the "Committee")
reviews and approves executive officer compensation criteria and levels, as well
as overseeing the Company's employee benefit plans. It is the policy of the
Committee to focus executives on the sustained creation of shareholder value by
aligning senior management compensation directly with shareholder interests. In
developing and monitoring these programs the Committee and the Company employ
the services of a nationally known executive compensation consulting firm.
For compensation purposes, the Company's executive officers are divided into
three groups: 1) executive officers of the Company named in the Summary
Compensation Table ("named executive officers"), including the Company's
Chairman, its President and Chief Executive Officer, its Deputy Chairman, and
its two Vice Chairmen, 2) other policy making officers, who are the eight
Executive Vice Presidents who serve on the Executive Management Committee, and
3) other Executive Vice Presidents and certain Senior Vice Presidents with
responsibility for matters that impact overall Company performance.
The Committee approves all elements of the Company's primary executive
compensation and benefits program specifically for the named executive officers
and the other policy making officers, and broadly oversees the design and
implementation of all executive incentive plans, subject to shareholder approval
where required and/or appropriate. The Committee receives reports from the
Company's management on all elements of the compensation and benefits program
for executives below the policy making level.
Three of the named executive officers, Messrs. Moriguchi, Hayama (a retired
officer of BTM) and Someya, plus two additional policy making officers, serve as
executive officers of the Company on a rotational assignment from BTM ("policy
making expatriate officers"). Accordingly, and as described below, during their
tenure at the Company their compensation and benefits are approved by the
Committee, taking into account the applicable compensation policies of BTM. In
1998, none of the policy making expatriate officers were eligible to receive
annual bonuses, restricted stock awards, stock option grants, or performance
share awards. Some compensation for services rendered to the Company is paid to
the expatriate named executive officers from BTM and reimbursed by the Company
to BTM under a Services Agreement. Such compensation is included in the Summary
Compensation Table above.
EXECUTIVE COMPENSATION PHILOSOPHY
It is the Company's philosophy to compensate executives in a manner that
promotes the recruitment, motivation and retention of exceptional employees who
will help the Company achieve its strategic business objectives and who can
influence shareholder value.
The Company's executive compensation philosophy is implemented through
compensation programs based upon the following principles:
- In general, an executive's total compensation and benefits package should
be positioned at median competitive levels, taking into account the
relative responsibilities of the executives involved and reflecting the
Company's performance against both its business plans and the performance
of its peers. In particular, base salaries should be at the median level
of competitive salaries, and incentives should relate to the Company's
performance in comparison with the Company's business objectives and with
peer group performance levels (see "Peer Group" below).
- The total compensation and benefits package is designed to provide an
appropriate mix of fixed and variable compensation to support a strong
pay-for-performance relationship, subject to the special circumstances
applicable to policy making expatriate officers.
- Compensation and benefits programs are intended to promote teamwork and
mutual support among the Company's executives.
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- Performance-based compensation is tied to performance measures that
heavily influence shareholder value and which can be influenced by the
Company's executives. These measures include both growth and returns.
- Annual bonuses are based on the achievement of the Company's annual
Financial Plan.
- A long-term incentive program, including stock options granted at market
value, restricted stock awards and long-term performance share awards is
designed to encourage executive retention and link executive compensation
directly to long term shareholder interests; the performance share awards
component is based on the Company's performance compared to the
performance of the specified peer group.
- Compensation plans should be easy to understand and communicate.
PEER GROUP
The Company uses a peer group of banks to compare all of the primary
elements of the executive officer compensation and benefits program. The
Company's current peer group includes 21 banks drawn from the 50 included in the
KBW 50 Index, published by Keefe, Bruyette & Woods, Inc. These peer banks are
compared on a variety of financial ratios and are used for the competitive
compensation analysis. The peer group was developed in part in consultation with
the consulting firm retained by the Company. As a result of the consolidation in
the banking industry, for 1999, the Company has added or changed some of the
banks in the peer group.
BASE SALARY
Executive base salaries are established relative to comparable positions in
other banks, taking into account the relative responsibilities of the executives
involved. In general, the Company targets base salaries at the median
competitive levels to attract and retain highly experienced and qualified
executives. Where the responsibilities of executive positions in the Company
exceed those typically found among other banks or play a particularly critical
role at the Company, base salaries may be targeted above median competitive
levels. In determining salaries, the Committee also takes into account
individual leadership and vision, experience and performance, as well as
internal equity relative to other positions within the Company, and specific
issues particular to the Company and the position involved.
ANNUAL BONUSES
The purpose of the annual bonus plan is to provide a median competitive
annual incentive opportunity at target performance levels. Target awards under
the plan represent the median of the competitive market for comparable executive
positions at banks of similar size and focus. Actual awards are determined based
on the performance of the Company and the individual participant.
For 1998, participating executives were eligible to earn annual bonuses
under the Company's Senior Management Bonus Plan based on the Company's
achievement of predetermined return on assets and net income performance
objectives, as well as individual performance and contributions.
For 1999, participants under the Senior Management Bonus Plan include all
Senior Vice Presidents and above with responsibility for matters that impact
overall Company performance (including the named executive officers other than
the three policy making expatriate officers). Participants are assigned target
bonuses comparable to median competitive levels. The size of the bonus fund will
be based on the Company's performance on two measures: (1) return on average
common equity (in prior years, return on average assets), and (2) net income,
relative to the Company's 1999 Financial Plan. The Committee has changed the
Senior Management Bonus Plan, substituting return on average common equity in
place of return on average assets because it believes that this change provides
a stronger link between compensation and shareholder value creation.
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The bonus fund size may vary up to two times aggregate target bonuses based
on the Company's performance on these two measures. In addition, the Committee
may increase or decrease the bonus fund within certain limits based on the
Company's performance in other areas, including strategic and organizational
achievements, other financial measures, and relative performance against its
peers. Individual bonus awards will be based on individual performance and
contributions.
LONG-TERM INCENTIVE PROGRAM
The Company provides long-term incentive awards to individuals who can
directly impact the Company's long-term performance and value. Target awards are
comparable to median competitive levels. For 1998, participants were eligible to
receive grants consisting of one or more types of long-term incentives,
including stock options, restricted stock, and performance shares. Grants are
based on an individual's scope and level of responsibilities within the Company
and reflect competitive practices for similar positions in peer companies. The
performance share awards are based on the Company's performance compared to the
performance of its peers.
STOCK OPTIONS AND RESTRICTED STOCK
The Company believes in tying rewards for eligible executives directly to
the Company's long-term success and increases in shareholder value through stock
option grants and restricted stock awards. These also enable executives to
develop and maintain a stock ownership position of the Company's Common Stock.
The amounts of long-term incentives are targeted at median competitive levels
(taking into account the responsibilities of the officers involved). It is the
Company's intention to place greater emphasis on the use of stock options rather
than restricted stock in future incentive awards.
The UnionBanCal Corporation Management Stock Plan ("Management Stock Plan")
authorizes the issuance of up to 6,600,000 shares of the Company's Common Stock
(after December 21, 1998 3-for-1 Split) to certain employees of the Company and
its subsidiaries as grants of stock options and awards of restricted stock. The
6,600,000 share maximum represented approximately 3.8 percent of the Company's
Common Stock outstanding as of December 31, 1998. Canceled or forfeited options
and restricted stock become available for future grants. In 1998, expatriate
officers were not eligible to participate in the Management Stock Plan. In 1999,
the Company plans to grant stock options to non-employee directors.
The Committee determines the term of each stock option grant, up to a
maximum of ten years from the date of grant. The exercise price must not be less
than the fair market value on the grant date. In general, options vest or become
exercisable in thirds over three years, provided that the employee has completed
the specified continuous service requirement, or earlier if the employee dies or
is permanently and totally disabled or retires under certain grant, age and
service conditions.
In general, awards of restricted stock vest in fourths over four years from
grant date, provided that the employee has completed the specified continuous
service requirement, or earlier if the employee dies or is permanently and
totally disabled or retires under certain grant, age and service conditions.
Restricted stockholders have the right to vote their restricted shares and to
receive dividends.
The Company intends to institute stock ownership guidelines for its
executives and Board members by the end of 1999.
The Management Stock Plan will expire on January 1, 2000. The Company
believes that it is in the best interest of the Company to continue to provide
equity incentives to the employees and non-employee directors of the Company and
its subsidiaries. For that reason, the Committee and the Board approved the Year
2000 UnionBanCal Corporation Management Stock Plan (the "2000 Management Stock
Plan") which contains terms similar to the Management Stock Plan to take effect
upon the expiration of the Management Stock Plan. Policy making expatriate
officers and consultants of the Company and its subsidiaries will no longer be
excluded from eligibility for equity incentives pursuant to the 2000
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Management Stock Plan. The adoption of the 2000 Management Stock Plan is subject
to shareholder approval as solicited in this Proxy Statement.
UNIONBANCAL CORPORATION PERFORMANCE SHARE PLAN
The UnionBanCal Corporation Performance Share Plan provides compensation in
the form of performance shares that is linked to shareholder value in two ways:
(1) the market price of the Company's Common Stock, and (2) performance as
measured on return on assets, a performance measure closely linked to value
creation. Pursuant to the Plan, the Committee sets performance goals and
participants will only earn and be paid for performance shares upon the
attainment of such performance goals.
For 1998, eligible participants received grants of performance shares which
may be redeemed in cash three years after the date of grant. The value of a
performance share is equal to the market price of the Company's Common Stock.
The number of performance shares actually earned at the end of the performance
period will be based on the Company's percentile ranking among its peer group in
performance on return on assets. A participant must be an employee in good
standing throughout the three year performance period, except in the case of
death, permanent disability, or retirement, in order to be eligible for an
award. In 1998, policy making expatriate officers did not participate in this
plan.
OTHER BENEFITS
Certain executives are eligible to defer base salary and incentives and
outside directors are eligible to defer directors' fees for payment at a future
date designated by the executive under the Union Bank of California Deferred
Compensation Plan. The average Treasury Constant Maturities Rate, calculated
quarterly based on a rolling average for the previous 12 months, is credited on
deferred funds at the end of each calendar quarter.
Selected executives, excluding policy making expatriate officers, are also
eligible for retirement benefits under supplemental plans designed to continue
coverage amounts otherwise limited under the qualified plan. Executives may also
be eligible for other benefits and perquisites.
POLICY MAKING EXPATRIATE OFFICER COMPENSATION
Policy making expatriate officer compensation is approved by the Committee,
taking into account the BTM Expatriate Pay Program. The BTM Expatriate Pay
Program incorporates a number of different elements, including overseas base
salary, certain allowances, and tax gross up payments. The BTM Expatriate Pay
Program is a Japanese Yen based system and, as a result, exchange rate
fluctuations may yield significantly differing dollar denominated compensation
levels from year to year.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Chief Executive Officer's base salary is approved by the Committee,
taking into account the BTM Expatriate Pay Program, which the Committee reviews
in comparison with competitive bank chief executive officer compensation. His
compensation is therefore only indirectly related to the performance of the
Company from year to year. In 1998, the Chief Executive Officer was also
ineligible for annual bonuses, stock option grants, restricted stock grants, and
performance share awards generally available to peer group chief executive
officers and to non-expatriate Company officers. However, the Committee believes
that the Chief Executive Officer's past performance and his long-term
relationship with BTM manifest ample motivation, notwithstanding his
ineligibility for these compensation programs.
DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), limits the tax deductibility by a company of certain compensation in
excess of $1 million paid to the chief executive
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officer of the company or the four most highly compensated officers. However,
performance based compensation is excluded from the $1 million limit.
Compensation attributable to stock options under the Management Stock Plan
is treated as performance-based under Code Section 162(m) if (1) the grant is
made by the Committee, (2) the Management Stock Plan restricts the number of
shares for which options may be awarded to an executive during a specified
period, and (3) the compensation that the executive may receive is based solely
on an increase in the value of the stock after the date of grant. The
UnionBanCal Corporation Performance Share Plan also is designed to provide
compensation which is treated as performance-based under Code Section 162(m).
Grants of restricted stock under the Management Stock Plan are not considered
performance-based compensation under Code Section 162(m) of the Code and
Treasury Regulations promulgated thereunder.
While the tax impact of any compensation arrangement is one factor to be
considered, such impact is evaluated in light of the Committee's overall
compensation philosophy. The Committee intends to establish executive officer
compensation programs which will maximize the Company's tax deductions, if the
Committee determines that such actions are consistent with its philosophy and in
the best interests of the Company and its shareholders. From time to time, the
Committee may award compensation which is not fully tax deductible if the
Committee determines that such award is consistent with its philosophy and in
the best interests of the Company and its shareholders.
EXECUTIVE COMPENSATION &
BENEFITS COMMITTEE
Richard D. Farman--Chairman
Jack L. Hancock
Carl W. Robertson
Henry T. Swigert
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COMMON STOCK PERFORMANCE GRAPH
The following Common Stock Performance Graph compares the yearly percentage
change, on a dividend reinvested basis, in the cumulative total stockholder
return on the Common Stock with the cumulative total return of the Standard &
Poor's 500 Stock Index and the KBW 50 Index, published by Keefe, Bruyette &
Woods, Inc., for the five-year period commencing December 31, 1993. The stock
price performance depicted in the Performance Graph is not necessarily
indicative of future price performance.
UNIONBANCAL CORPORATION
COMPARISON OF FIVE YEAR
CUMULATIVE TOTAL RETURN(1)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
UNBC KBW50 S&P500
<S> <C> <C> <C>
12/31/93 100 100 100
12/31/94 111 95 101
12/31/95 233 152 139
12/31/96 234 215 171
12/31/97 487 314 229
12/31/98 471 340 294
</TABLE>
- ------------------------
(1) Assumes $100 invested on December 31, 1993, in Company Common Stock, S&P500
Index and KBW50 Index and assumes quarterly dividend reinvestment.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The Company and the Bank have had, and expect to have in the future, banking
and other transactions in the ordinary course of business with BTM and with its
affiliates and associates. During the year ending December 31, 1998, such
transactions included, but were not limited to, origination, participation,
servicing and remarketing of loans and leases, purchase and sale of acceptances
and interest rate derivatives, foreign exchange transactions, funds transfers,
custodianships, electronic data processing, investment advice and management,
deposits and trust services. In the opinion of management, such transactions
were made at prevailing rates, terms and conditions and do not involve more than
the normal risk of collectibility or present other unfavorable features.
In addition, the Bank has had and expects in the future to have banking
transactions in the ordinary course of its business with many of the Company's
directors and executive officers and their associates, including transactions
with corporations and other entities of which such persons are directors,
officers or controlling shareholders, on substantially the same terms (including
interest rates and collateral) as those prevailing at the time for comparable
transactions with others. The loans included among such transactions do not
involve more than the normal risk of collectibility or present other unfavorable
features.
Loans by the Bank to directors and executive officers of the Company and to
entities controlled by them are subject to limitations as to amount and purpose
as prescribed by the Federal Reserve Act. For example, extensions of credit by
the Bank in excess of $500,000 to directors and executive officers of the
Company and their related interests require the prior approval of a majority of
disinterested directors of
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the Bank. All extensions of credit to such persons must be made on
nonpreferential terms. In addition, the Bank may not extend credit in excess of
$100,000 to any executive officer of the Bank, unless the purpose is to finance
the education of the officer's children or the purchase, construction,
maintenance or improvement of the officer's residence.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following persons served as members of the Executive Compensation &
Benefits Committee during 1998: Richard D. Farman, Chair; Jack L. Hancock; Carl
W. Robertson; and Henry T. Swigert. In the case of each such director (except
Jack L. Hancock), either the individual director, or an entity controlled by the
director had loans or other extensions of credit outstanding from the Bank
during 1998. These loans were made in the ordinary course of business and on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time of comparable transactions with other persons. Such loans
did not involve more than the normal risk of collectibility or present
unfavorable features.
COMPLIANCE WITH SECTION 16(a) OF THE 1934 ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and holders of more than 10% of a
registered class of the Company's equity securities to file with the Securities
and Exchange Commission ("SEC") and Nasdaq reports of ownership and changes in
ownership of any equity securities of the Company. Officers, directors and
greater than ten percent (10%) shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on its review of the copies of such forms received by it, or written
representations from certain reporting persons that all required forms were
filed, the Company believes that, during 1998, all Section 16 filing
requirements applicable to its officers and directors were complied with.
V. SHAREHOLDER PROPOSALS FOR 2000 PROXY STATEMENT
Shareholders who expect to present a proposal at the 2000 Annual Meeting of
Shareholders for publication in the Company's proxy statement and action on the
proxy form or otherwise for such meeting must submit their proposal by December
27, 1999. The proposal must be mailed to the Corporate Secretary of the Company
at 400 California Street, San Francisco, CA 94104.
VI. OTHER MATTERS
The Board of Directors does not know of any business to be presented for
action at the Annual Meeting other than that set forth in the Notice of Annual
Meeting of Shareholders. However, if other business properly comes before the
meeting, the persons named in the accompanying form of proxy intend to vote on
such matters in accordance with their best judgment.
By Order of the Board of Directors,
JEAN C. NOMURA
CORPORATE SECRETARY
Dated: [April 23], 1999
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EXHIBIT A
YEAR 2000 UNIONBANCAL CORPORATION MANAGEMENT STOCK PLAN
1. ESTABLISHMENT, PURPOSE AND DEFINITIONS.
(a) This Year 2000 UnionBanCal Corporation Management Stock Plan (the
"Plan") was adopted by the Board on [March 24, 1999], effective upon the
approval of UNBC's shareholders, to take effect upon the expiration of
the UnionBanCal Corporation Management Stock Plan due to expire on
January 1, 2000; provided, however, that the Plan is approved within 12
months after [March 24, 1999], and on or prior to the date of the first
annual meeting of UNBC's shareholders held subsequent to the acquisition
of Common Stock by a Participant pursuant to the Plan. Notwithstanding
any provision of the Plan or of any Option Agreement to the contrary, no
Option may be exercisable and no Common Stock may be granted pursuant to
the Plan prior to such shareholder approval.
(b) The purpose of the Plan is to provide a means whereby:
(i) Employees may be given an opportunity to purchase shares of Common
Stock pursuant to options which may qualify as incentive stock
options under Section 422 of the Code (referred to as "incentive
stock options");
(ii) Employees and Non-Employee Directors, and designated Consultants
may be given an opportunity to purchase shares of Common Stock
pursuant to options which do not so qualify (referred to as
"nonqualified stock options");
(iii) Employees and Non-Employee Directors, and designated Consultants
may acquire Stock and Stock Appreciation Rights for such
consideration (if any) and subject to such restrictions (if any) as
the Committee of UNBC determines appropriate.
(c) Definitions.
(i) AWARD refers collectively to Common Stock grants, Common Stock sales
and Options to purchase Common Stock, made pursuant to the Plan.
(ii) BOARD refers to UNBC's board of directors.
(iii) CODE refers to the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any Section of the Code shall be deemed to
include any amendments or successor provisions to such Section and
any regulations under such Section.
(iv) COMMITTEE refers to the Executive Compensation and Benefits
Committee of UNBC's Board.
(v) COMMON STOCK refers to the Common Stock of UNBC.
(vi) CONSULTANT refers to any person designated by the Committee who is:
(i) an independent contractor retained to perform services for UNBC
or its Subsidiaries; or (ii) a person who provides services to UNBC
or its Subsidiaries pursuant to an agreement between UNBC or its
Subsidiaries and any other person or organization except The Bank
of Tokyo-Mitsubishi, Ltd. ("BTM").
(vii) FAIR MARKET VALUE as of any specified date refers to the closing
per share price of the Common Stock on the Nasdaq National Market
or on any national securities stock exchange on which the Common
Stock is traded, as applicable, on that date, or if no price is
reported on that date, on the last preceding date on which such
price of the Common Stock is reported.
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(viii) EMPLOYEE refers to any common law employee of UNBC or its
Subsidiaries except: (1) any independent contractor retained to
perform services for UNBC or its Subsidiaries, including
consultants; and (2) any person who provides services to UNBC or
its Subsidiaries pursuant to an agreement between UNBC or its
Subsidiaries and any other person or organization except BTM.
(ix) NON-EMPLOYEE DIRECTOR refers to a member of the Board who is not an
Employee.
(x) OPTION refers to an Award granted under Section 6 of the Plan and
includes both incentive stock options and nonqualified stock
options.
(xi) OPTION AGREEMENT refers to a written agreement between UNBC and an
Employee, Non-Employee Director or Consultant with respect to an
Option.
(xii) OPTIONEE refers to an Employee, Non-Employee Director or Consultant
who has been granted an Option.
(xiii) OUTSIDE DIRECTOR refers to a member of the Board who qualifies as
an "outside director" as such term is used in Section 162(m) of the
Code and defined in any applicable Treasury regulations promulgated
thereunder, including Treasury regulation 1.162-27(e)(3). Such
member must also qualify as a "non-employee director" under Rule
16b-3(b)(3) of the general Rules and Regulations of the Securities
and Exchange Commission under the Securities Exchange Act of 1934,
as amended.
(xiv) PARTICIPANT refers to a recipient of an Award.
(xv) SUBSIDIARIES refers to subsidiary corporations, as defined in
Section 424(f) of the Code (but substituting "UNBC" for "employer
corporation"), including Subsidiaries of UNBC which become such
after the adoption of the Plan.
2. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Committee, which shall be composed
as hereinafter set forth in Section 2(b).
(b) The Committee shall consist solely of not less than two Outside
Directors elected by the Board. The Board may from time to time increase
(and thereafter may decrease) the size of the Committee, elect or remove
members thereto (with or without cause) and fill any vacancies however
created; provided, however, that the minimum number of members on the
Committee must be two.
(c) The Committee shall meet at such times and places and upon such notice
as the Committee's Chair determines. A majority of the Committee shall
constitute a quorum. Any acts by the Committee may be taken at any
meeting at which a quorum is present and shall be by majority vote of
those members entitled to vote.
(d) The Committee shall determine which Employees, Non-Employee Directors,
or Consultants of UNBC or its Subsidiaries shall be granted Awards under
the Plan, the timing of such Awards, the terms thereof and the number of
shares of Common Stock subject to each Award.
(e) The Committee shall have the sole authority, in its absolute discretion,
to adopt, amend and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the Plan, to construe
and interpret the Plan, its rules and regulations, and the instruments
evidencing Awards granted under the Plan, and to make all other
determinations deemed necessary or advisable for the administration of
the Plan. All decisions, determinations and interpretations of the
Committee shall be binding on all Participants.
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3. STOCK SUBJECT TO THE PLAN.
(a) Awards may be granted under the Plan to eligible persons for an
aggregate of not more than 10,000,000 shares of Common Stock. If an
Option is surrendered for cash or other consideration or for any other
reason ceases to be exercisable in whole or in part, the shares of Common
Stock which were subject to such Option but as to which the Option had
not been exercised shall continue to be available under the Plan. If
Common Stock is granted or sold subject to restrictions and is
subsequently forfeited, the forfeited shares shall again be available for
Awards under the Plan.
(b) If there is any change in the Common Stock subject to the Plan or the
Common Stock subject to any Award granted under the Plan, through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
split, stock dividend, or other change in the corporate structure of
UNBC, the Board and the Committee shall make appropriate adjustments in
order to preserve but not to increase the benefits to the Participants,
including adjustments in the aggregate number of shares of Common Stock
subject to the Plan and the number of shares of Common Stock and the Fair
Market Value subject to outstanding Awards.
4. ELIGIBILITY. Persons who shall be eligible to have Awards granted to them
shall be such Employees, Non-Employee Directors, and Consultants as the
Committee, in its discretion, shall designate from time to time. Only
Employees shall be eligible to receive incentive stock options.
5. OPTION EXERCISE PRICE. The exercise price of the Common Stock covered by
each Option shall not be less than the Fair Market Value of such Common
Stock on the date the Option is granted. Notwithstanding the foregoing, in
the case of an incentive stock option granted to a person possessing more
than 10% of the combined voting power of UNBC or its Subsidiaries, the
exercise price shall not be less than 110% of the Fair Market Value of the
Common Stock on the date the Option is granted. The exercise price of an
Option shall be subject to adjustment to the extent provided in Section
3(b), above.
6. TERMS AND CONDITIONS OF OPTIONS.
(a) Each Option granted pursuant to the Plan shall be evidenced by an Option
Agreement executed by the Union Bank of California, N.A. ("UBOC")
Director of Human Resources or his or her designee and the person to whom
such option is granted.
(b) The Committee shall determine the term of each Option granted under the
Plan, but the term of each Option shall be for no more than ten years;
provided, however, that in the case of an Option granted to a person
possessing more than 10% of the combined voting power of UNBC or its
Subsidiaries, the term of each incentive stock option shall be for no
more than five years.
(c) In the case of incentive stock options, the aggregate Fair Market Value
(determined as of the time such option is granted) of the Common Stock
with respect to which incentive stock options are exercisable for the
first time by the Optionee in any calendar year (under the Plan and any
other plans of UNBC or its Subsidiaries) shall not exceed $100,000.
(d) An Option Agreement may contain such other terms, provisions and
conditions as may be determined by the Committee (not inconsistent with
the Plan), including, without limitation, stock appreciation rights
pursuant to Section 7 of the Plan with respect to Options granted under
the Plan. If an Option, or any part thereof, is intended to qualify as an
incentive stock option, the Option Agreement shall contain those terms
and conditions which are necessary to so qualify it as required by
Section 422 of the Code and any applicable Treasury Regulations
promulgated thereunder.
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(e) Each incentive stock option granted pursuant to the Plan shall, during
the Optionee's lifetime, be exercisable only by him, and neither the
incentive stock option nor any right hereunder shall be transferable by
the Optionee by operation of law or otherwise other than by will or the
laws of descent and distribution. The transferability of a nonqualified
stock option will be established in the Option Agreement to be entered
into between UNBC and the Optionee.
(f) The maximum number of shares of Common Stock with respect to which the
Committee may make Awards during any calendar year to any Employee, any
Non-Employee Director, or any Consultant shall not exceed 300,000.
7. STOCK APPRECIATION RIGHTS. The Committee may, under such terms and
conditions as it deems appropriate, authorize the surrender by an Optionee
of all or part of an unexercised Option and authorize a payment in
consideration therefor in an amount equal to the difference obtained by
subtracting the Option exercise price of the shares then subject to exercise
under such Option from the Fair Market Value of the Common Stock represented
by such shares on the date of surrender, provided that the Committee
determines that such settlement is consistent with the purpose of the Plan.
Such payment may be made in shares of Common Stock valued at their Fair
Market Value on the date of surrender of such Option or in cash, or partly
in shares and partly in cash. Acceptance of surrender and the manner of
payment shall be in the discretion of the Committee. Any payments of cash
under this Section shall be from the general assets of UNBC. Notwithstanding
anything to the contrary herein, the maximum number of shares of Common
Stock with respect to which the Committee may award stock appreciation
rights during any calendar year to any Employee, any Non-Employee Director,
or any Consultant shall not exceed 300,000.
8. COMMON STOCK GRANTS AND COMMON STOCK SALES. The Committee may, in its
discretion, issue Common Stock, with or without consideration, to eligible
persons as compensation for services rendered to UNBC or its Subsidiaries,
on whatever basis and subject to such terms and conditions as the Committee
determines. The terms and conditions of such an Award shall be evidenced by
a written agreement executed by UNBC and the Participant.
9. RESTRICTIONS ON TRANSFER OF COMMON STOCK. Common Stock acquired under the
Plan shall be subject to such restrictions and agreements regarding vesting,
sale, assignment, encumbrance or other transfer as the Committee deems
appropriate at the time of making an Award; subject, however, to compliance
with applicable state and federal laws.
10. USE OF PROCEEDS. Any cash proceeds realized from the sale of Common Stock
pursuant to the Plan or from the exercise of Options granted under the Plan
shall constitute general funds of UNBC.
11. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.
(a) The Board may at any time amend, suspend or terminate the Plan as it
deems advisable; provided, however, except as provided in Section 3(b),
above, the Board shall not amend the Plan in the following respects
without the consent of UNBC's shareholders then sufficient to approve the
Plan in the first instance:
(i) to increase the maximum number of shares of Common Stock subject to
the Plan; or
(ii) to change the designation or class of persons eligible to receive
Awards under the Plan.
(b) No Award may be granted during any suspension or after the termination
of the Plan, and no amendment, suspension or termination of the Plan
shall, without the Participant's consent, alter or impair any rights or
obligations under any Award previously made under the Plan.
29
<PAGE>
(c) The Plan shall terminate ten years from the original effective date of
the Plan, unless previously terminated by the Board pursuant to this
Section 11.
(d) Upon a termination of the Plan, UNBC or the Committee may authorize the
surrender by an Optionee of all or part of an unexercised Option and
authorize a payment in consideration therefor in the same manner as if
the Participant had surrendered an Option under Section 7 regarding stock
appreciation rights. The payment received by the Optionee pursuant to
this Section 11(d) shall not be considered remuneration for services
performed by the Optionee under Section 162(m) of the Code.
12. CONSIDERATION. Payment of the exercise price of an Option or payment of any
consideration required for an Award granted under the Plan shall be made in
cash; provided, however, that the Committee, in its sole discretion, may
permit a Participant to pay the exercise or purchase price in whole or in
part by (a) delivery (on a form prescribed by the Committee) of an
irrevocable direction to a securities broker or brokers approved by the UBOC
Director of Human Resources or his or her designee to sell shares and
deliver all or a portion of the proceeds to UNBC in payment for the Common
Stock, or (b) Common Stock. For purposes of determining the amount of
exercise price or purchase price satisfied by payment of Common Stock, such
Common Stock shall be valued at its Fair Market Value as of the date of
exercise of Option or purchase of Award, whichever is applicable.
13. PERFORMANCE-BASED COMPENSATION. The Plan shall be interpreted to be in
compliance with requirements under Section 162(m) of the Code and all
applicable Treasury Regulations promulgated thereunder so that grants of
Options or Stock Appreciation Rights under the Plan will be treated as
"Performance-Based Compensation" as such term is used in Section
162(m)(4)(C) of the Code. To the extent that any provision in the Plan would
cause the Options or Stock Appreciation Rights not to be treated as
"Performance-Based Compensation" under Section 162(m)(4)(C) of the Code,
such provision will be stricken from the Plan, and the remaining provisions
shall nevertheless continue in full force and effect without being impaired
or invalidated.
14. GOVERNING LAW. The Plan will be administered in accordance with the laws of
the State of California and all applicable federal law.
30
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed the Year 2000 UnionBanCal
Corporation Management Stock Plan, at San Francisco, California, on this
.
UNIONBANCAL CORPORATION
By:
------------------------------------
Takahiro Moriguchi
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
By:
------------------------------------
Paul E. Fearer
DIRECTOR OF HUMAN RESOURCES
Date Approved By Executive Compensation and Benefits Committee:
Date Adopted By UnionBanCal Corporation Board of Directors:
Date Approved By Shareholders:
Effective Date:
31
<PAGE>
UNIONBANCAL CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
MAY 26, 1999
Yoshihiko Someya and Nobuhiko Fukaya, or either of them, each with the
power of substitution, is hereby authorized to represent and to vote the
Common Stock of the undersigned at the Annual Meeting of Shareholders of
UnionBanCal Corporation, to be held at 10:30 a.m. on Wednesday, May 26, 1999,
at the Mandarin Oriental Hotel, Embassy Room, 222 Sansome Street, San
Francisco, California, or any adjournment thereof as follows:
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON
THE REVERSE SIDE, BUT IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED
FOR ALL NOMINEES LISTED ON THE REVERSE SIDE, FOR PROPOSALS 2 AND 3, AND, WITH
RESPECT TO ANY OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF, IN ACCORDANCE WITH THE DISCRETION OF THE PROXIES.
<PAGE>
UNIONBANCAL CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY /X/
1. ELECTION OF DIRECTORS
For all nominees listed below (except as listed to the contrary) / /
WITHHOLD AUTHORITY to vote for all nominees listed / /
R. Farman, S. Farrar, H. Gallegos, J. Hancock
R. Hartnack, K. Hayama, H. Low, M. Metz, R. Miles, T. Moriguchi,
J. Niebla, S. Petersen, C. Robertson, Y. Someya,
H. Swigert, T. Wakai, R. Walker, H. Watanabe
B. Wilson, and K. Yoshizawa
2. PROPOSAL TO APPROVE THE YEAR 2000 UNIONBANCAL CORPORATION MANAGEMENT
STOCK PLAN
For / / Against / / Abstain / /
3. PROPOSAL TO RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT
AUDITORS FOR UNIONBANCAL CORPORATION FOR THE YEAR ENDING DECEMBER 31, 1999
For / / Against / / Abstain / /
This Proxy will be voted as specified, or if no choice is specified, will be
voted FOR proposals 1, 2, and 3.
Dated: , 1999
--------------------
- ---------------------------------
Signature
- ---------------------------------
Signature, if held jointly
(Please sign EXACTLY as your name appears on your stock certificate and
this proxy. Executors, administrators, trustees, guardians, attorneys, etc.,
should give their full title. If signer is a corporation, please give full
corporate name and sign by a duly authorized officer, stating the officer's
title. If a partnership, please sign in partnership name by authorized
person.)
