<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
</TABLE>
<TABLE>
<S> <C>
UNIONBANCAL CORPORATION
- ------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 26, 2000
------------------------
The Annual Meeting of the Shareholders of UNIONBANCAL CORPORATION (the
"Company") will be held on Wednesday, April 26, 2000, at 11:00 a.m. at the
Mandarin Oriental Hotel, Embassy Room, 222 Sansome Street, San Francisco,
California, for the following purposes:
1. To elect twenty (20) directors to hold office until the next Annual
Meeting of Shareholders or until their successors are elected;
2. To ratify the selection of Deloitte & Touche LLP as independent auditors
for the Company for the year ending December 31, 2000; and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 10, 2000, 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 Annual 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 Annual 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,
[/S/ JEAN C. NOMURA]
Jean C. Nomura
CORPORATE SECRETARY
San Francisco, California
Dated: March 30, 2000
This notice was accompanied by a mailing of the Company's 1999 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, April 26, 2000, at 11:00 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 March 30, 2000.
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 March 10, 2000, the date for determining shareholders entitled to vote at
the Annual Meeting, there were 163,419,889 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") 105,566,801 64.60%
7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo,
100, Japan
</TABLE>
BTM INTENDS TO VOTE ITS SHARES IN FAVOR OF: THE ELECTION OF THE PERSONS
NAMED AS NOMINEES FOR DIRECTOR IN THIS PROXY STATEMENT AND THE RATIFICATION OF
THE SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS FOR THE COMPANY
FOR THE YEAR ENDING DECEMBER 31, 2000. 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 Annual 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.
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
1
<PAGE>
the proxies (1) in favor of the election of the persons named as nominees for
director in this Proxy Statement; (2) for ratification of the selection of
Deloitte & Touche LLP as independent auditors for the Company for the year
ending December 31, 2000; and (3) in accordance with their best judgment on any
other matter which may come before the Annual Meeting. If any proxy is marked
"withhold all" 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 1999 Annual Report provides a review of the Company's
operations during the past year.
The Board of Directors met eleven (11) times in 1999. All incumbent
directors attended at least 75% of the Company's Board of Directors and
committee meetings held in 1999, except for Satoru Kishi and Kenji Yoshizawa.
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.
On March 24, 1999, the Board of Directors approved the award pursuant to the
UnionBanCal Management Stock Plan of non-qualified stock options to purchase
3,000 shares of the Company's common stock to be granted on June 1, 1999 (the
"Grant Date") to each non-employee, non-expatriate director in office on
June 1, 1999. The exercise price for the options is $35.50. The options are 100%
vested and are exercisable 33 1/3% on the first three (3) anniversaries of the
Grant Date. The term of the options is ten (10) years from the Grant Date or
three (3) years after the director's retirement from service, whichever is
earlier.
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.
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,
2
<PAGE>
control and disclosure functions. The Committee also makes an annual
recommendation to the Board of Directors of the Company's independent auditors
(see Section II, 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.
The Committee has a written charter, duly adopted by the Board of Directors.
Directors who served on the Committee at December 31, 1999, were: Mary S. Metz,
Chair; Raymond E. Miles; Sidney R. Petersen; and Henry T. Swigert. The Committee
met nine (9) times in 1999.
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, 1999, were: Stanley F. Farrar, Chair;
Richard D. Farman; Harry W. Low; and Robert M. Walker. The Committee met seven
(7) times in 1999.
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. Please refer to the Executive Compensation & Benefits
Committee Report on Executive Compensation. Directors who served on the
Committee at December 31, 1999, were: Richard D. Farman, Chair; Jack L. Hancock;
Carl W. Robertson; and Henry T. Swigert. The Committee met seven (7) times in
1999.
The Finance & Capital Committee is responsible for reviewing the Company's
financial planning and performance, tax and capital management, dividend and
investment policies, management of net interest margin and asset and liability
management. Directors who served on the Committee at December 31, 1999, were:
Sidney R. Petersen, Chair; Stanley F. Farrar; Mary S. Metz; Takahiro Moriguchi;
Carl W. Robertson; and Yoshihiko Someya. The Committee met four (4) times in
1999.
The Nominating & Corporate Governance 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, including those
submitted by the shareholders, if any, 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, 1999, were: Takahiro Moriguchi, Chair; Jack L. Hancock, Vice Chair;
Richard D. Farman; J. Fernando Niebla; Carl W. Robertson; and Yoshihiko Someya.
The Committee met three (3) times in 1999.
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
3
<PAGE>
Secretary of the Corporation in 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; and
(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.
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, 1999, were: Herman E.
Gallegos, Chair; Richard C. Hartnack; Harry W. Low; Raymond E. Miles; and
J. Fernando Niebla. The Committee met four (4) times in 1999.
The Trust Committee supervises the administration of the fiduciary powers of
the Bank and the Company'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, 1999, are: Carl W. Robertson, Chair; Herman E.
Gallegos; Jack L. Hancock; J. Fernando Niebla; and Yoshihiko Someya. The
Committee met nine (9) times in 1999.
Other Company Board Committees are the Executive Committee of the Company
Board which did not meet in 1999, and the Pricing Committee and Special
Committee established in connection with the secondary offering of the Company's
stock which met four (4) times and one (1) time, respectively in 1999.
The other Bank Board committee is a National Bank Act Committee which met
three (3) times in 1999.
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 provided an
exception to this policy for director Kaoru Hayama who is 65 and for director
Satoru Kishi who is over age 70.
I. ELECTION OF DIRECTORS
Twenty (20) directors of the Company are to be elected at the Annual Meeting
to serve until the next Annual Meeting of shareholders or until the earlier of
retirement, resignation or their successors are elected. The nominees as set
forth below are all presently directors of the Company, except for Mr. Andrews.
A resolution of the Company's Board pursuant to the Bylaws of the Company sets
the exact number of directors at twenty (20). All nominees, except for
Messrs. Andrews, Kishi and Yoshizawa, are also directors of the Bank. If
reelected as directors of the Company, all nominees, except for Messrs. Kishi
and Yoshizawa, are expected to be reelected 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.
4
<PAGE>
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, 1999, the nominee's
business experience during the past five (5) years, directorships in other
corporations, and periods of service as a director of the Company.
<TABLE>
<CAPTION>
SHARES OF COMMON
SHARES OF COMMON STOCK OF THE BANK OF
STOCK OF UNIONBANCAL TOKYO-MITSUBISHI,
NAME AND PRINCIPAL OCCUPATIONS AGE AS OF CORPORATION OWNED LTD. OWNED
DURING THE LAST FIVE YEARS MARCH 31, BENEFICIALLY AS OF BENEFICIALLY AS OF
OF NOMINEES FOR DIRECTOR 2000 DECEMBER 31, 1999(2)(3) DECEMBER 31, 1999(2)
------------------------------ --------- ----------------------- --------------------
<S> <C> <C> <C>
David R. Andrews.......................... 58 -0- -0-
Mr. Andrews has served as legal adviser
to the US Department of State since
August 1997. Mr. Andrews was a partner
of McCutchen, Doyle, Brown & Enersen
from 1981 through 1997.
Richard D. Farman......................... 64 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 from September
1993 to July 1998. Mr. Farman has been
a director of the Company since
November 1988.
Stanley F. Farrar......................... 57 -0- 1,250
Mr. Farrar has been a partner of
Sullivan & Cromwell since October
1984. He served as a director of
BanCal Tri-State Corporation and The
Bank of California, N.A. from June
1984 until March 1996. Mr. Farrar has
been a director of the Company since
April 1996.
Herman E. Gallegos........................ 69 479 -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 its predecessors since 1974
and The California Endowment since May
1996. Mr. Gallegos has been a director
of the Company since November 1988.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
SHARES OF COMMON
SHARES OF COMMON STOCK OF THE BANK OF
STOCK OF UNIONBANCAL TOKYO-MITSUBISHI,
NAME AND PRINCIPAL OCCUPATIONS AGE AS OF CORPORATION OWNED LTD. OWNED
DURING THE LAST FIVE YEARS MARCH 31, BENEFICIALLY AS OF BENEFICIALLY AS OF
OF NOMINEES FOR DIRECTOR 2000 DECEMBER 31, 1999(2)(3) DECEMBER 31, 1999(2)
------------------------------ --------- ----------------------- --------------------
<S> <C> <C> <C>
Jack L. Hancock........................... 69 1,500 -0-
Mr. Hancock was Executive Vice President
of Pacific Bell from February 1988
until December 1993. He has been a
director of Mpower Communications,
Inc. 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....................... 54 128,210(4)(5) -0-
Mr. Hartnack has served as Vice Chairman
and head of the Community Banking
Group of the Company and the Bank from
April 1996 to September 1999 and as
head of the Community Banking &
Investment Services Group since
September 1999. He served as Vice
Chairman of Union Bank from June 1991
until March 1996. Mr. Hartnack has
been a director of the Company since
June 1991.
Kaoru Hayama.............................. 65 1,000(1) 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 and as Deputy
President of Bank of Tokyo, Ltd. from
June 1994 to April 1996. Mr. Hayama
had previously served as a director of
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 and chief executive officer
of The Bank of Tokyo Trust Company in
New York. Mr. Hayama has been a
director of the Company since
September 1998.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
SHARES OF COMMON
SHARES OF COMMON STOCK OF THE BANK OF
STOCK OF UNIONBANCAL TOKYO-MITSUBISHI,
NAME AND PRINCIPAL OCCUPATIONS AGE AS OF CORPORATION OWNED LTD. OWNED
DURING THE LAST FIVE YEARS MARCH 31, BENEFICIALLY AS OF BENEFICIALLY AS OF
OF NOMINEES FOR DIRECTOR 2000 DECEMBER 31, 1999(2)(3) DECEMBER 31, 1999(2)
------------------------------ --------- ----------------------- --------------------
<S> <C> <C> <C>
Satoru Kishi.............................. 70 -0- 45,224
Mr. Kishi has been President of The Bank
of Tokyo-Mitsubishi, Ltd., since
January, 1998. Prior to that, he was
Deputy President of BTM, from April,
1996 and Deputy President of
Mitsubishi Bank, Ltd. from February
1992 through April 1996. Mr. Kishi
has been a director of the Company
since July 1999.
Harry W. Low.............................. 69 5,536 -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.............................. 62 1,741 -0-
Dr. Metz has been President of S. H.
Cowell Foundation since January 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.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
SHARES OF COMMON
SHARES OF COMMON STOCK OF THE BANK OF
STOCK OF UNIONBANCAL TOKYO-MITSUBISHI,
NAME AND PRINCIPAL OCCUPATIONS AGE AS OF CORPORATION OWNED LTD. OWNED
DURING THE LAST FIVE YEARS MARCH 31, BENEFICIALLY AS OF BENEFICIALLY AS OF
OF NOMINEES FOR DIRECTOR 2000 DECEMBER 31, 1999(2)(3) DECEMBER 31, 1999(2)
------------------------------ --------- ----------------------- --------------------
<S> <C> <C> <C>
Raymond E. Miles.......................... 67 -0- 1,214
Professor Miles is Professor Emeritus of
Organizational Behavior and Dean
Emeritus 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 BanCal Tri-State
Corporation and The 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.
Takahiro Moriguchi........................ 55 6,000(1) 9,400
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 Union Bank from
June 1993 until March 1996. He served
as General Manager of Bank of Tokyo,
Ltd's Capital Markets Division 2 from
May 1992 to May 1993. He has served as
a director of BTM since April 1996 and
as a director of Bank of Tokyo prior
thereto. Mr. Moriguchi has been a
director of the Company since June
1993.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
SHARES OF COMMON
SHARES OF COMMON STOCK OF THE BANK OF
STOCK OF UNIONBANCAL TOKYO-MITSUBISHI,
NAME AND PRINCIPAL OCCUPATIONS AGE AS OF CORPORATION OWNED LTD. OWNED
DURING THE LAST FIVE YEARS MARCH 31, BENEFICIALLY AS OF BENEFICIALLY AS OF
OF NOMINEES FOR DIRECTOR 2000 DECEMBER 31, 1999(2)(3) DECEMBER 31, 1999(2)
------------------------------ --------- ----------------------- --------------------
<S> <C> <C> <C>
J. Fernando Niebla........................ 60 150 105(6)
Mr. Niebla has served as President of
International Technology Investors,
LLC since December 1998. From December
1995 through June 1998 he was Chairman
and Chief Executive Officer of Infotec
Commercial Systems and he was Chairman
and CEO of Infotec Development Inc.
from September 1979 to June 1996. He
currently serves on the Boards of
Pacific Life Corporation and Union
Bank of California. He served as
director of BanCal Tri-State
Corporation and The Bank of
California, N.A. from June 1994
through March 1996. Mr. Niebla has
been a director of the Company since
April 1996.
Sidney R. Petersen........................ 69 2,279 -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. Mr. Petersen has been a
director of the Company since November
1988.
Carl W. Robertson......................... 63 -0- 1,250
Mr. Robertson has been the Managing
Director of Warland Investments
Company since January 1985. He served
as a director of BanCal Tri-State
Corporation and The Bank of
California, N.A. from April 1975 to
March 1996. Mr. Robertson has been a
director of the Company since April
1996.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
SHARES OF COMMON
SHARES OF COMMON STOCK OF THE BANK OF
STOCK OF UNIONBANCAL TOKYO-MITSUBISHI,
NAME AND PRINCIPAL OCCUPATIONS AGE AS OF CORPORATION OWNED LTD. OWNED
DURING THE LAST FIVE YEARS MARCH 31, BENEFICIALLY AS OF BENEFICIALLY AS OF
OF NOMINEES FOR DIRECTOR 2000 DECEMBER 31, 1999(2)(3) DECEMBER 31, 1999(2)
------------------------------ --------- ----------------------- --------------------
<S> <C> <C> <C>
Yoshihiko Someya.......................... 52 -0- 23,350
Mr. Someya has served as Deputy
Chairman, Credit and Administration
since July 1998. He served as
Executive Vice President, Credit
Management Support and Liaison from
March 1998 to July 1998. He served as
Deputy General Manager of BTM's Osaka
Branch from June 1996 to March 1998.
From June 1995 until May 1996, he was
the General Manager of The Mitsubishi
Bank, Ltd's Financial Institutions
Division and from June 1993 until May
1995, he was Director and General
Manager, Management Planning Division
of DC Card Company, Ltd., a subsidiary
of The Mitsubishi Bank. Mr. Someya has
been a director of the Company since
July 1998.
Henry T. Swigert.......................... 69 -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 BanCal
Tri-State Corporation and The Bank of
California, N.A. Mr. Swigert has been
a director of the Company since April
1996.
Robert M. Walker.......................... 58 183,897(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 with Union Bank from July
1992 until March 1996. He has been a
director of the Company since July
1992.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
SHARES OF COMMON
SHARES OF COMMON STOCK OF THE BANK OF
STOCK OF UNIONBANCAL TOKYO-MITSUBISHI,
NAME AND PRINCIPAL OCCUPATIONS AGE AS OF CORPORATION OWNED LTD. OWNED
DURING THE LAST FIVE YEARS MARCH 31, BENEFICIALLY AS OF BENEFICIALLY AS OF
OF NOMINEES FOR DIRECTOR 2000 DECEMBER 31, 1999(2)(3) DECEMBER 31, 1999(2)
------------------------------ --------- ----------------------- --------------------
<S> <C> <C> <C>
Hiroshi Watanabe.......................... 59 -0- 26,079
Mr. Watanabe has served as the Managing
Director and Chief Executive Officer
of BTM Headquarters for the Americas
since July 1998. Prior to that he
served as Managing Director and
General Manager, Corporate Planning
Division of BTM from April 1996 to
July 1998, and he served in the same
capacity in the Planning Division of
Bank of Tokyo, Ltd. from June 1995 to
April 1996. Mr. Watanabe served as a
Director and General Manager Planning
Division of the Bank of Tokyo, Ltd.
from June 1992 to June 1995, and in
various positions with the Bank of
Tokyo, Ltd. prior to 1992.
Mr. Watanabe has been a director of
the Company since July 1998.
Kenji Yoshizawa........................... 68 663(1) 46,665
Mr. Yoshizawa has served as the Deputy
President and director of BTM, since
April 1996. He served as Deputy
President and director of the 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 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)....... 511,465 209,988
</TABLE>
- ------------------------
1 The 105,566,801 shares of Company Common Stock owned by BTM as of
December 31, 1999, do not include the shares of Company Common Stock owned
by Kaoru Hayama, Takahiro Moriguchi, 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. Of the 23,250 shares beneficially owned by Mr. Someya, 2,408.3
shares are held by an association in Japan which administers BTM's employee
stock purchase plan. Of the 26,079 shares beneficially owed by
Mr. Watanabe, 1,573 shares are held by the association. Of the 46,665 shares
beneficially owned by Mr. Yoshizawa, 1,049 shares are held by the
association. Messrs. Someya, Watanabe and Yoshizawa
11
<PAGE>
retain investment power for their shares held by said association. 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 Includes shares beneficially owned, directly and indirectly, together with
associates. Subject to applicable community property laws and shared voting
or investment power with a spouse, the persons listed have sole voting and
investment power with respect to such shares unless otherwise noted.
4 The shares indicated under the Company column include the following shares
of restricted stock granted pursuant to the Management Stock Plan which are
beneficially owned by the named individuals and the group as a whole:
<TABLE>
<CAPTION>
VESTED AND
UNVESTED UNVESTED
SHARES SHARES
-------- ----------
<S> <C> <C>
Richard C. Hartnack...................................... 2,850 41,700
Robert M. Walker......................................... 16,350 16,350
Executive Officers as a group............................ 32,562 78,247
</TABLE>
5 The shares indicated under the Company Column include the following stock
options granted pursuant to the Management Stock Plan which are beneficially
owned by the named individuals and the group as a whole including stock
options which became exercisable within sixty (60) days after December 31,
1999:
<TABLE>
<S> <C>
Richard C. Hartnack......................................... 64,500
Robert M. Walker............................................ 124,497
Executive Officers as a group............................... 309,987
</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.
II. 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, 2000. The appointment was recommended
by the Audit & 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.
12
<PAGE>
III. 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 (4) next most
highly compensated named executive officers of the Company (other than the Chief
Executive Officer) who served as executive officers on December 31, 1999 ("named
executive officers").
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------------------ ---------------------------------------
AWARDS PAYOUTS
-------------------------- ----------
RESTRICTED SECURITIES
ACTUAL OTHER ANNUAL STOCK AWARDS UNDERLYING LONG-TERM
NAME & PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(2) IN DOLLARS(3) OPTIONS(4) INCENTIVES
- ------------------------- -------- -------- -------- --------------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Takahiro Moriguchi ....... 1999(1) $468,995 $ 0 $24,894 $ 0 0 $ 0
President and Chief 1998 $329,735 $ 0 $18,809 $ 0 0 $ 0
Executive Officer 1997 $378,785 $ 0 $25,500 $ 0 0 $ 0
Kaoru Hayama ............. 1999(1) $520,091 $ 0 $26,894 $ 0 0 $ 0
Chairman of the Board 1998 $143,949 $ 0 $10,022 $ 0 0 $ 0
Yoshihiko Someya .........
Deputy Chairman 1999(1) $423,502 $ 0 $15,062 $ 0 0 $ 0
of the Board 1998 299,651 $ 0 $13,903 $ 0 0 $ 0
Richard Hartnack ......... 1999(1) $429,615 $350,000 $24,944 $ 0 36,000 $171,046
Vice Chairman 1998 $415,000 $250,000 $24.593 $ 0 19,500 $ 0
of the Board 1997 $353,842 $240,000 $29,260 $ 53,100 15,000 $ 0
Robert Walker ............ 1999(1) $429,615 $450,000 $45,647 $ 0 36,000 $171,046
Vice Chairman 1998 $413,627 $300,000 $38,816 $447,000 19,500 $ 0
of the Board 1997 $353,842 $240,000 $24,124 $ 53,100 15,000 $ 0
<CAPTION>
ALL OTHER
NAME & PRINCIPAL POSITION COMPENSATION(5)
- ------------------------- ---------------
<S> <C>
Takahiro Moriguchi ....... $ 0
President and Chief $ 0
Executive Officer $ 0
Kaoru Hayama ............. $ 0
Chairman of the Board $ 0
Yoshihiko Someya .........
Deputy Chairman $ 0
of the Board $ 0
Richard Hartnack ......... $6,921
Vice Chairman $6,400
of the Board $4,750
Robert Walker ............ $7,200
Vice Chairman $6,400
of the Board $6,263
</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 annual bonuses to be paid in 2000 for 1999
performance. Their compensation takes into consideration the BTM Expatriate
Pay Program which takes into account exchange rates, housing cost, and other
related factors; see Executive Compensation & Benefits Committee Report on
Executive Compensation-Overview, Policy Making Expatriate Officer
Compensation, and Chief Executive Compensation for additional information.
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. One (1) additional
executive officer received 1999 cash compensation that was greater than one
(1) or more of the top five (5) officers' compensation. He is not included
as a named executive officer because he is a lower ranking policy making
officer than the listed named executive officers and because of anomalies
created by the BTM Expatriate Pay Program.
(2) Includes perquisites and other personal benefits which did not exceed
$50,000 or 10% of annual salary and bonus for the named executive officers.
(3) The value listed for restricted stock awards was based on the closing 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 1999, -0- shares in
1998, and 2,400 shares in 1997 of restricted stock. Mr. Walker was granted
-0- shares in 1999, 18,000 shares in 1998, and 2,400 shares in 1997 of
restricted stock.
The aggregate value of restricted stock awards as of December 31, 1999, held
by Mr. Hartnack was $1,644,544 and by Mr. Walker was $644,803 based on the
closing market price on December 31, 1999. Each award granted to
Messrs. Hartnack and Walker vests ratably over four (4) years on the
anniversary of the grant date for each award, except for the 1997 award
which vested 100% on January 1, 2000. As of December 31, 1999, the total
vested and unvested shares of restricted stock awards held by Mr. Hartnack
was 41,700 and by Mr. Walker, 16,350. 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, profit sharing, and stock discount
contributions to the Union Bank of California 401(k) Plan.
13
<PAGE>
STOCK OPTIONS
The following two (2) tables summarize grants and exercises of options to
purchase Common Stock during 1999 to or by the named executive officers, and
with respect to option grants, the per-share exercise price, the expiration date
of the options, and the grant date present value of options held by such persons
at December 31, 1999. The second table also provides information concerning the
total number of securities underlying unexercised options and the aggregate
dollar value of in-the-money, unexercised options. The Company did not reprice
any options during 1999 or any prior year, and did not provide executives Stock
Appreciation Rights (SARs). In 1999, 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 (1999)(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES PERCENT OF TOTAL OPTIONS
UNDERLYING OPTIONS GRANTED TO EMPLOYEES EXERCISE EXPIRATION GRANT DATE PRESENT
NAME GRANTED IN FISCAL YEAR PRICE DATE VALUE(2)
- ---- -------------------- ------------------------ -------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
Richard C. Hartnack.. 36,000 2.06% $34.125 5/1/09 $351,720
Robert M. Walker..... 36,000 2.06% $34.125 5/1/09 $351,720
</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. Options are granted
for a term of 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 employment terminates.
(2) The grant date present value is based on the Black-Scholes option pricing
model with assumptions believed applicable to the Company. The assumptions
used in the model were projected volatility of 30.12%, risk-free rate of
return of 5.15%, annual dividend yield of 2.23%, and average time to
exercise of five (5) 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.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS
ACQUIRED FISCAL YEAR-END(1) AT FISCAL YEAR-END(2)
ON VALUE --------------------------- -----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- -------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard C. Hartnack.............. -0- $-0- 64,500 54,003 $1,397,736.29 $334,447.02
Robert M. Walker................. -0- $-0- 124,497 54,003 $3,143,903.23 $334,447.02
</TABLE>
- ------------------------
(1) Option shares have been adjusted to reflect the result of the 3-for-1 Split.
(2) The value of in-the-money options is calculated based on the amount by which
the closing price of the stock at December 31, 1999 ($39.44) exceeds the
exercise price. This value is represented by the post 3-for-1 Split closing
price.
LONG-TERM INCENTIVE PLAN
The following table provides information regarding awards made during 1999
under the 1997 UnionBanCal Corporation Performance Share Plan to the named
executive officers, with the number of
14
<PAGE>
shares awarded under said plan, the applicable performance period, and the
number of shares under the award (target and maximum amount). Messrs. Hartnack
and Walker each were awarded the target number of 6,000 performance shares in
1999. In 1999, 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 THRESHOLD TARGET MAXIMUM
NAME UNITS OR OTHER RIGHTS UNTIL MATURATION OR PAYOUT (#) (#) (#)
- ---- --------------------- --------------------------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Richard C. Hartnack...... 6,000 3 years -0- 6,000 12,000
Robert M. Walker......... 6,000 3 years -0- 6,000 12,000
</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 on 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. The amounts payable at the
end of the performance cycle will be equal to the earned award multiplied by
the average price.
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 deduction for Social Security and
other offset amounts 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 covered by the Retirement Plan includes base salary only as of
December 31, 1999, which was $435,000 for Mr. Hartnack, and $435,000 for
Mr. Walker.
(2) As of December 31, 1999, Mr. Hartnack and Mr. Walker had 9 and 8 years of
service, respectively.
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
15
<PAGE>
Executive Retirement Plan. The Union Bank Supplemental Executive Retirement Plan
benefits were extended to senior vice presidents and other senior executives of
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. An enhanced Supplemental Executive Retirement Plan was extended
to policy making officers on November 17, 1999. 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 (including termination by the Company without cause), to
severance benefits including (a) the greater of (i) salary continuation of base
salary for two (2) 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 (3) 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 pay 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 (including termination by the Company without cause), to severance
benefits including (a) the greater of (i) salary continuation of base salary for
two (2) 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 (3) 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.
16
<PAGE>
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 philosophy of the
Committee to focus executive officers 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 (3) groups: (1) executive officers of the Company named in the Summary
Compensation Table, including the Company's Chairman, its President and Chief
Executive Officer, its Deputy Chairman, and its two (2) Vice Chairmen;
(2) other policy making officers, who are the eight (8) 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 key 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 management incentive plans, subject to
shareholder approval where required and/or appropriate. The Committee reviews
reports from the Company's management on all elements of the compensation and
benefits program for executive officers below the policy making level.
Three (3) of the named executive officers, Messrs. Moriguchi, Hayama (a
retired officer of BTM) and Someya, plus two (2) 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 1999, 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 executive officers 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 executive officers 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 peer group performance levels.
- 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.
17
<PAGE>
- Compensation and benefits programs are intended to promote teamwork and
mutual support among the Company's executive officers.
- Performance-based compensation is tied to performance measures believed to
heavily influence shareholder value and which can be influenced by the
Company's executive officers. 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; 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. Although
the exact identity of peer group institutions varies from time to time, the
Company's current peer group includes 18 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 2000, 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 peer banks, taking into account the relative responsibilities of the
executive officers involved. In general, the Company targets base salaries at
the median competitive levels to attract and retain highly experienced and
qualified executive officers. 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 1999, participating executive officers were eligible to earn annual
bonuses under the Company's Senior Management Bonus Plan based on the Company's
achievement of predetermined return on equity and net income performance
objectives, as well as individual performance and contributions.
For 2000, 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 (3) 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 (2) measures: (1) return
on average common equity; and (2) net income, relative to the Company's 2000
Financial Plan.
18
<PAGE>
The bonus fund size may vary up to two (2) times aggregate target bonuses
based on the Company's performance on these two (2) 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
impact the Company's long-term performance and value. Target awards are
comparable to median competitive levels. For 1999, participants were eligible to
receive grants consisting of one (1) or more types of long-term incentives,
including stock options and performance share awards. 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 peer group.
STOCK OPTIONS AND RESTRICTED STOCK
The Company believes in tying rewards for eligible executive officers
directly to the Company's long-term success and increases in shareholder value
through stock option grants and restricted stock awards. These enable executive
officers to develop and maintain a stock ownership position in the Company's
Common Stock. The amounts of long-term incentives are generally targeted at
median competitive levels (taking into account the responsibilities of the
officers involved). The Company continues to place greater emphasis on the use
of stock options rather than restricted stock in incentive awards. In 1999, the
Company also granted stock options to non-employee directors. No restricted
stock awards were granted in 1999 to executive officers. In 1999, expatriate
officers were not eligible to participate in the Management Stock Plan.
In addition to equity awards to executive officers and non-employee
directors, the Company grants stock options to those employees who make an
exceptional contribution to the results of the Company throughout the year. The
Company believes that these awards are in the best interests of the shareholders
and that they are highly motivational and further align high-performing
employees with shareholder interests.
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
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 4% of the Company's Common Stock outstanding as of December 31,
1999. Canceled or forfeited options and restricted stock become available for
future grants.
Effective January 1, 2000, the shareholders approved the Year 2000
UnionBanCal Corporation Management Stock Plan (the "2000 Management Stock Plan")
with a 10,000,000 share authorization.
The Committee determines the term of each stock option grant to executive
officers, up to a maximum of ten (10) 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 (3) 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 (4) years
from the 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. Holders of restricted stock have the right to vote their restricted
shares and to receive dividends.
19
<PAGE>
On November 17, 1999, the Company instituted stock ownership guidelines for
its policy making officers and Board members as recommended by the Committee and
approved by the full Board of Directors. Within the five (5) year compliance
period, each non-employee, non-expatriate director should own shares of the
Company's common stock with a value of five (5) times the director's annual
retainer, currently $20,000.00. Each non-expatriate executive officer should own
common stock with a value of two (2) times the officer's annual salary. Each
Vice Chairman should own common stock with a value of four (4) times annual
salary.
Stock ownership under these guidelines includes (a) common stock owned
personally or in trust for the benefit of the Director and policy making
officers; (b) vested shares held in any benefit plan, including any IRA; and
(c) 50% of the embedded value of vested "in the money" stock options.
Directors and policy making officers should comply with these ownership
guidelines by November 17, 2004 or, in case of new directors or executive
officers, within five (5) years of the date of election or appointment.
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 equity, 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 1999, non-expatriate policy making officers received grants of
performance shares which may be redeemed in cash three (3) 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 equity. A participant must be
an employee in good standing throughout the three (3) year performance period,
except in the case of death, permanent disability, or retirement, in order to be
eligible for an award. In 1999, policy making expatriate officers did not
participate in this plan.
OTHER BENEFITS
Senior Vice Presidents and above 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 officers or outside
directors 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 executive officers, 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. Executive
officers 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.
20
<PAGE>
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 1999, 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 Code limits the tax deductibility by a company of
certain compensation in excess of $1 million paid to the chief executive officer
of the company or the four (4) 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 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
21
<PAGE>
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, 1994. The stock
price performance depicted in the Performance Graph is not necessarily
indicative of future price performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DATE UB KBW50 S&P500 UNBC KBW50 S&P500
<S> <C> <C> <C> <C> <C> <C>
12/31/94 100 100 100 154.653 214.61 232.98
03/31/95 131 113 110 202.156 243.34 255.66
06/30/95 162 130 120 250.234 278.14 280.07
09/30/95 205 150 130 316.659 322.90 302.32
12/31/95 211 160 138 326.525 343.72 320.52
03/31/96 215 177 145 332.548 380.23 337.73
06/30/96 209 178 151 322.569 381.91 352.88
09/30/96 197 200 156 304.084 428.81 363.79
12/31/96 212 227 169 327.985 486.21 394.12
03/31/97 223 237 174 344.263 508.77 404.68
06/30/97 292 272 204 450.829 584.55 475.33
09/30/97 353 313 219 545.270 671.64 510.93
12/31/97 440 331 226 681.056 710.80 525.61
03/31/98 410 369 257 634.689 792.00 598.93
06/30/98 399 370 266 616.770 793.55 618.70
09/30/98 361 291 239 557.746 623.99 557.16
12/31/98 426 359 290 659.405 769.64 675.82
03/31/99 429 370 305 663.309 793.02 709.49
06/30/99 458 395 326 707.743 847.77 759.49
09/30/99 462 336 306 714.020 720.93 712.07
12/31/99 505 346 351 780.906 742.91 818.02
</TABLE>
- ------------------------
(1) Assumes $100 invested on December 31, 1994, in Company Common Stock, S&P500
Index and KBW50 Index and reinvestment of all quarterly dividends.
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, 1999, 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 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
22
<PAGE>
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 1999: 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 1999. 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 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") reports of ownership and changes in ownership of
any equity securities of the Company. Officers, directors and greater than 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
1999, all Section 16 filing requirements applicable to its officers and
directors were complied with, except with respect to Charles L. Pedersen.
During 1999, Mr. Pedersen inadvertently failed to file a timely report on a
Form 4 concerning a sale within his 401(k) account effective June 21, 1999. This
transaction was reported on a Form 4 filed in August, 1999.
V. SHAREHOLDER PROPOSALS FOR 2001 PROXY STATEMENT
Shareholders who expect to present a proposal at the 2001 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 31, 2000. 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,
[/S/ JEAN C. NOMURA]
JEAN C. NOMURA
CORPORATE SECRETARY
Dated: March 30, 2000
23
<PAGE>
UNIONBANCAL CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY [ ]
[---------------------------------------------------------------------------]
For All except
nominees
1. Election of directors For All Withheld All written in below
[ ] [ ] [ ]
D. Andrews,
R. Farman, S. Farrar,
H. Gallegos, J. Hancock,
R. Hartnack, K. Hayama,
S. Kishi, H. Low, M. Metz,
R. Miles, T. Moriguchi,
J. Niebla, S. Petersen,
C. Robertson, Y. Someya,
H. Swigert, R. Walker,
H. Watanabe, K. Yoshizawa
2. Proposal to ratify the Selection of Deloitte & For Against Abstain
Touche LLP as independent Auditors for UnionBanCal [ ] [ ] [ ]
Corporation for the year ending December 31, 2000
[ ] Will attend
[ ] Will not attend
This Proxy will be
voted as specified,
or if no choice is
specified, will be
voted for proposals
1 and 2.
Dated: , 2000
--------------------------
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.)
FOLD AND DETACH HERE
<PAGE>
UNIONBANCAL CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
APRIL 26, 2000
Yoshihiko Someya and Nobuhiro 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 11:00 a.m. on Wednesday, April 26, 2000, 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.
