<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/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
</TABLE>
FIRST HAWAIIAN, INC.
- --------------------------------------------------------------------------------
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[First Hawaiian, Inc. Logo]
P.O. Box 3200
Honolulu, Hawaii 96847
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS OF FIRST HAWAIIAN, INC.
The Annual Meeting of the Stockholders of First Hawaiian, Inc. (the
"Corporation") will be held on April 20, 1995 at 9:30 o'clock A.M. in the 20th
floor Dining Room of The Plaza Club, 900 Fort Street, Honolulu, Hawaii, for the
following purposes:
1. To elect 5 directors for a term of 3 years until the Annual Meeting of
Stockholders in 1998, and until their successors are elected and
qualified.
2. To fix the number of Directors at 15.
3. To approve an amendment to the Corporation's Certificate of
Incorporation (the "Charter") to increase the number of shares of
authorized stock of the Corporation by authorizing 50,000,000 shares of
a new class of preferred stock, par value $5.00 per share, which may be
issued from time to time in one or more series, with such voting rights,
designations, dividend and liquidation preferences, conversion and other
rights, qualifications, limitations and restrictions as shall be
determined by the Board of Directors at the time of issuance.
4. To approve an amendment to the Charter to eliminate Article Ninth of
the Charter, which currently requires the Board of Directors, upon any
increase in the authorized capital stock of the Corporation, to offer to
stockholders preemptive rights to subscribe for such additional shares
of capital stock.
5. To approve an amendment to the Charter to eliminate the right of
holders of the Common Stock to act by written consent in lieu of a
stockholders' meeting.
6. To elect the Auditor of the Corporation.
7. To transact such other business as may properly be brought before the
meeting and any adjournments thereof.
Only stockholders of record at the close of business on February 24, 1995,
will be entitled to notice of and to vote at the Annual Meeting and any
adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS:
Herbert E. Wolff
Senior Vice President and Secretary
Dated: March 1, 1995
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING. PLEASE MARK,
DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ACCOMPANYING
POSTAGE-PAID ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY
AND VOTE IN PERSON IF YOU WISH TO DO SO.
<PAGE> 3
[First Hawaiian, Inc. Logo]
P.O. Box 3200
Honolulu, Hawaii 96847
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of First Hawaiian, Inc. (the "Corporation") of proxies to be
used in the voting at the Annual Meeting of Stockholders of the Corporation to
be held on April 20, 1995, and any adjournments thereof.
The annual report of the Corporation, containing consolidated financial
statements as at and for the year ended December 31, 1994, is being mailed to
all stockholders simultaneously with the mailing of this proxy statement. This
proxy statement and the form of proxy are first being distributed to
stockholders on or about March 1, 1995.
First Hawaiian, Inc. is a holding company for First Hawaiian Bank (the
"Bank"), First Hawaiian Creditcorp, Inc., First Hawaiian Leasing, Inc., FHI
International, Inc., and Pioneer Federal Savings Bank.
OUTSTANDING SHARES; VOTING RIGHTS
At the close of business on February 24, 1995 (the "record date") there were
31,984,826 shares of common stock (the "Common Stock") of the Corporation
outstanding. Each share is entitled to one vote on each matter submitted to a
vote of stockholders; there is no cumulative voting.
The following table sets forth information as of the record date for each
person known by the Corporation to be the beneficial owner of more than 5% of
the Common Stock:
<TABLE>
<CAPTION>
Name and Amount and
Address of Nature of Percent
Beneficial Owner Beneficial Ownership of Class
---------------- -------------------- --------
<S> <C> <C>
David M. Haig, Fred C. Weyand, Paul Mullin Ganley and 8,000,000 shares 25.01
Walter A. Dods, Jr., as Trustees under the Will and
of the Estate of S.M.Damon, 1132 Bishop Street,
Honolulu, Hawaii 96813(1)
Asset Management Division, First Hawaiian Bank, 3,538,774 shares(2) 11.06
P.O. Box 3200, Honolulu, Hawaii 96847
Alexander & Baldwin, Inc., 822 Bishop Street 1,692,894 shares 5.29
Honolulu, Hawaii 96813(3)
</TABLE>
- --------------
(1) Messrs. Haig, Weyand, Ganley and Dods are Directors of the Corporation.
Mr. Dods is the Chairman and Chief Executive Officer of the Corporation.
The Trustees have shared voting and investment power as to shares owned by
the Damon Estate.
(2) The shares held by the Asset Management Division in fiduciary accounts
include: 1,484,830 shares as to which it has sole voting power and
1,468,624 shares as to which it has sole investment power; 1,573,015
shares as to which it has shared voting power and 1,598,223 shares as to
which it has shared investment power; 480,929 shares as to which sole
voting power is retained by the settlors of the trusts; and 471,927 shares
as to which sole investment power is held by outside investment advisers.
(3) Mr. Robert J. Pfeiffer, a Director of the Corporation, is Chairman of the
Board of Alexander & Baldwin, Inc. Mr. John C. Couch, a Director of the
Corporation, is President and Chief Executive Officer of Alexander &
Baldwin, Inc. Alexander & Baldwin, Inc. has sole voting and investment
power as to shares shown in the above table.
2
<PAGE> 4
PROXY VOTING
Proxies in the accompanying form duly executed and received by the
Corporation at any time before the Annual Meeting, and not revoked or
superseded before being voted, will be voted at the Annual Meeting. Where a
specification is indicated in the proxy, it will be voted in accordance with
the specification. Where no specification is indicated, the proxy will be voted
in accordance with the recommendations set forth in this Proxy Statement and in
the discretion of the proxies named therein on all other matters properly to
come before the meeting or any adjournment thereof.
Proxies in the accompanying form may be revoked or superseded at any time
before they are voted by a proxy of a later date, or by written notification
received by the Secretary of the Corporation prior to the Annual Meeting.
Attendance in person at the Annual Meeting does not of itself revoke a proxy
previously given, but any stockholder who attends the Annual Meeting in person
is free to revoke any proxy previously given and vote his or her shares in
person.
The Corporation will pay the cost of solicitation of proxies for the Annual
Meeting. In addition to solicitation by use of the mails, proxies may be
solicited personally or by telephone, facsimile or telegraph by certain
officers and regular employees of the Corporation, who will not receive any
added compensation for so doing. The Corporation may reimburse brokers and
others holding shares in their names as nominees for their expenses in sending
proxy material to beneficial owners.
ELECTION OF DIRECTORS
The Bylaws of the Corporation provide that the Board of Directors is divided
into 3 equal classes of Directors. Each class of Directors is elected to serve
a 3 year staggered term, with the term of one class expiring at each Annual
Meeting. The number of Directors on the current Board is fixed at 15. The Board
of Directors recommends that the stockholders again set the total number of
Directors at 15.
Directors are elected by a plurality of the votes cast by the holders of the
Corporation's Common Stock at the Annual Meeting at which a quorum is present.
Under the Corporation's Certificate of Incorporation and Bylaws and under
Delaware law, abstentions and broker non-votes will not have the effect of
votes in opposition to election of a Director.
Proxies in the accompanying form will (unless a contrary direction is
indicated on the proxy) be voted to elect the nominees named below (who have
been nominated by the present Board of Directors) as Directors to serve subject
to the Certificate of Incorporation and Bylaws of the Corporation. If elected,
each will serve for a term of 3 years or until a successor is duly elected and
qualified.
If any of the nominees listed are not available for election at the Annual
Meeting (a contingency which the Board of Directors of the Corporation does not
now foresee), the Board of Directors intends to recommend the election of such
other persons as the Board may select in order to fill the vacancies. Proxies
in the accompanying form will be voted for the election of such other persons
unless authority to vote the proxies in the election of Directors has been
withheld.
The nominees designated by the Board of Directors are named below, with
brief statements setting forth their present principal occupations and other
information, including directorships in public companies:
<TABLE>
<CAPTION>
Shares of Common
Stock of the Corporation Percent
Nominees for a Term of Three Years Beneficially Owned of
Until the Annual Meeting of Stockholders in 1998 at February 24, 1995 Class
------------------------------------------------ ------------------------ -------
<S> <C> <C>
DR. JULIA ANN FROHLICH, 54, has been a Director of the Corporation 1,200 *
since 1992 and a Director of the Bank since August, 1991. She has
been a Director of First Hawaiian Creditcorp, Inc. and
First Hawaiian Leasing, Inc. since 1990. She has been President
of the Blood Bank of Hawaii since 1985.
JOHN A. HOAG, 62, was an Executive Vice President of the 62,545 *
Corporation from 1982 to 1991 and has been President and a
</TABLE>
3
<PAGE> 5
<TABLE>
<CAPTION>
Shares of Common
Stock of the Corporation Percent
Nominees for a Term of Three Years Beneficially Owned of
Until the Annual Meeting of Stockholders in 1998 at February 24, 1995 Class
------------------------------------------------ ----------------------- -------
<S> <C> <C>
Director of the Corporation since 1991. He has been a Director
of the Bank since October, 1989. From 1989 until June 30, 1994,
Mr. Hoag was President of the Bank; since that date, he has been
Vice Chairman of the Bank. He has been with the Bank since 1960.
His reported beneficial ownership of the Corporation's stock includes
928 shares owned jointly with his wife as to which Mr. Hoag shares voting
and investment powers, 19,781 shares in his wife's revocable living trust
as to which Mr. Hoag disclaims beneficial ownership and 15,905 shares
that Mr. Hoag has the right to acquire within 60 days through the exercise
of stock options.
BERT T. KOBAYASHI, JR., 54, has been a Director of the Corporation since 5,895 *
1991 and a Director of the Bank since 1974. He is a principal of the
law firm of Kobayashi, Sugita and Goda. He is a Director of
Schuler Homes, Inc.
FRED C. WEYAND, 78, has been a Director of the Corporation since 1986 8,021,086 25.08
and a Director of the Bank since 1981. He was Vice President of the
Corporation from 1976 to 1982; Senior Vice President of the Bank
from 1980 to 1982 and Corporate Secretary from 1978 to 1981. He served
as a commissioned officer in the United States Army from 1940 to 1976
and held the office of Chief of Staff from 1974 to 1976. He is a Trustee
under the Will and of the Estate of S.M. Damon. His reported beneficial
ownership of the Corporation's stock includes 8,000,000 shares owned by
the Estate of S.M. Damon as to which he shares voting and investment
powers and 11,086 shares in his wife's revocable living trust as to which
he shares voting and investment powers.
ROBERT C. WO, 69, was a Director of the Corporation from 1974 to 1989 14,092 *
and again since 1992 and has been a Director of the Bank since 1963.
He has been President and Secretary of BJ Management Corp.,
a management consulting company, since 1979. He has been Chairman
of C.S. Wo & Sons, Ltd., a manufacturer and retailer of home furnishings,
since 1973. His reported beneficial ownership of the Corporation's stock
includes 8,000 shares in the Betty and Bob Wo Foundation as to which
he shares voting and investment powers.
</TABLE>
- --------------
* The percentage of shares beneficially owned does not exceed 1% of the shares
currently outstanding, including shares that can be acquired within 60 days
through the exercise of stock options.
Each of the foregoing nominees attended 75% or more of the combined
total number of meetings held during 1994 of the Board and Committees on which
he or she sits. The Board of Directors met 12 times in 1994.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO SET THE TOTAL NUMBER OF
DIRECTORS AT 15 AND A VOTE FOR THE ABOVE NOMINEES.
4
<PAGE> 6
DIRECTORS CONTINUING IN OFFICE AND EXECUTIVE OFFICERS
The Directors continuing to serve on the Board of Directors, pursuant
to their prior elections, and the named executive officers listed in the
Summary Compensation Table below, are listed here. The Directors will serve
subject to the Certificate of Incorporation and the Bylaws of the Corporation
until the annual meeting of stockholders in the year shown parenthetically
after each name and until their respective successors have been duly elected
and qualified.
<TABLE>
<CAPTION>
Shares of Common
Stock of the Corporation Percent
Beneficially Owned of
Directors Continuing to Serve at February 24, 1995 Class
----------------------------- ------------------------ -------
<S> <C> <C>
JOHN W. A. BUYERS, 67, (1997) has been a Director of the 1,912 *
Corporation since 1994 and a Director of the Bank since 1976.
He has been Chairman of the Board and Chief Executive Officer
of C. Brewer and Company, Limited, a diversified land and
agriculture business, since 1992. From 1982 to 1992 he was
Chairman and President of C. Brewer and Company, Limited.
From 1975 to 1982, he was President and Chief Executive Officer
of C. Brewer and Company, Limited. Since 1989, he has been
Chairman of Mauna Loa Resources, the managing general partner
of Mauna Loa Partners, a master limited partnership trading on the
New York Stock Exchange. The partnership is engaged in agribusiness.
In 1993, he was elected Chairman of C. Brewer Homes, Inc., a new
publicly-traded real estate developer. He is also a Director of
John B. Sanfilippo & Sons, Inc. located in Elk Grove Village, Illinois.
JOHN C. COUCH, 55, (1997) has been a Director of the Corporation 8,437 *
since 1991 and a Director of the Bank since 1985. He has been
President and Chief Executive Officer of Alexander & Baldwin, Inc.
since April, 1992. He was President and Chief Operating Officer of
Alexander & Baldwin, Inc. from October, 1985 until April, 1989
and from April, 1991 to March, 1992. Since April, 1989, he has been
President and Chief Executive Officer of A&B-Hawaii, Inc., a
wholly-owned subsidiary of Alexander & Baldwin, Inc. He has been
a Director of Alexander & Baldwin, Inc. since 1985. He was President
and Chief Operating Officer of Matson Navigation Company, Inc.
from January, 1985 to September, 1985 and Executive Vice President
and Chief Operating Officer from January, 1984 to December, 1984.
Since April, 1992 he has been Vice Chairman of Matson Navigation
Company, Inc. Alexander & Baldwin, Inc., which is engaged in ocean
transportation, container leasing, agribusiness, property development
and property management, holds 1,692,894 shares of stock of the
Corporation, as to which Mr. Couch disclaims beneficial ownership.
</TABLE>
5
<PAGE> 7
<TABLE>
<CAPTION>
Shares of Common
Stock of the Corporation Percent
Beneficially Owned of
Directors Continuing to Serve at February 24, 1995 Class
----------------------------- ------------------------ -------
<S> <C> <C>
WALTER A. DODS, JR., 53, (1996) has been Chairman of the Board and 8,300,317 26.13
Chief Executive Officer of the Corporation and the Bank since
September, 1989. He was President of the Corporation from March, 1989
to March, 1991. He was President of the Bank from November, 1984
to October, 1989 and has been a Director of the Bank since 1979.
He was an Executive Vice President of the Corporation from 1982 to
1989 and has been a Director of the Corporation since 1983. He has
been with the Bank since 1968. His reported beneficial ownership of
the Corporation's stock includes 924 shares held in his wife's individual
retirement account as to which Mr. Dods disclaims beneficial ownership,
and 28,600 shares that Mr. Dods has the right to acquire within 60 days
through the exercise of stock options. He is a Trustee under the Will and
of the Estate of S.M. Damon and his reported beneficial ownership of the
Corporation's stock includes 8,000,000 shares owned by the Estate of
S.M. Damon as to which Mr. Dods shares voting and investment powers.
He is a Director of Alexander & Baldwin, Inc., which holds 1,692,894 shares
of the stock of the Corporation, as to which Mr. Dods disclaims beneficial
ownership. He is a trustee of Punahou School, which owns 209,316 shares
of the Corporation's stock; he has shared voting and investment powers
with respect to such shares and disclaims beneficial ownership thereof.
PAUL MULLIN GANLEY, 55, (1996) has been a Director of the Corporation 8,070,038 25.16
since 1991 and a Director of the Bank since 1986. He is a Trustee
under the Will and of the Estate of S.M. Damon and a partner in the
Carlsmith Ball Wichman Murray Case & Ichiki law firm. His reported
beneficial ownership of the Corporation's stock includes 8,000,000
shares owned by the Estate of S.M. Damon as to which Mr. Ganley
shares voting and investment powers; 19,108 shares in his revocable
living trust as to which he has sole voting and investment powers;
19,150 shares in his wife's revocable living trust as to which Mr. Ganley
disclaims beneficial ownership; 12,336 shares in a profit sharing plan
as to which he has sole voting and investment powers; and 17,094 shares
in two individual retirement accounts as to which he has sole voting and
investment powers.
DAVID M. HAIG, 43, (1997) has been a Director of the Corporation since 8,018,109 25.07
1989 and a Director of the Bank since 1983. Mr. Haig is a beneficiary and,
since 1982, a Trustee under the Will and of the Estate of S.M. Damon.
His reported beneficial ownership of the Corporation's stock includes
8,000,000 shares owned by the Estate of S.M. Damon as to which Mr. Haig
shares voting and investment powers, and 2,500 shares owned by a trust as
to which Mr. Haig shares voting and investment powers. He is beneficiary
of an HR-10 plan which holds 8,000 shares of the Corporation's stock as to
which he has sole voting and investment powers.
</TABLE>
6
<PAGE> 8
<TABLE>
<CAPTION>
Shares of Common
Stock of the Corporation Percent
Beneficially Owned of
Directors Continuing to Serve at February 24, 1995 Class
----------------------------- ------------------------ -------
<S> <C> <C>
DR. RICHARD T. MAMIYA, 70, (1996) has been a Director of the Corporation 4,000 *
since 1994 and a Director of the Bank since 1980. He is on the
active staff of Queen's Medical Center for thoracic, cardiovascular, and
general surgery; he is on the courtesy staff of Straub, Kuakini, and
Kapiolani Children's hospitals. In accordance with the Corporation's
Bylaws and Delaware law, the Corporation's Board of Directors elected
Dr. Mamiya in January, 1994 to fill the unexpired term of the late
Mr. Sheridan C.F. Ing.
DR. FUJIO MATSUDA, 70, (1996) has been a Director of the Corporation 2,559 *
since 1987 and a Director of the Bank since 1985. He was Executive
Director of the Research Corporation of the University of Hawaii from
1984 until 1994; he was the President of the University of Hawaii from
1974 to 1984. He is President of the Japan American Institute of
Management Science.
DR. RODERICK F. MCPHEE, 66, (1997) has been a Director of the 11,405 *
Corporation or the Bank since 1972. From 1968 through 1994, he was
President of Punahou School, a kindergarten through 12th grade
college preparatory school. Dr. McPhee was President and ex-officio
non-voting member of the Board of Trustees of Punahou School, which
owns 209,316 shares of the Corporation's stock. He has no voting or
investment powers with respect to such shares and disclaims beneficial
ownership thereof.
ROBERT J. PFEIFFER, 75, (1997) has been a Director of the Corporation 1,045 *
since 1982 and a Director of the Bank since 1980. He has been Chairman
of the Board of Alexander & Baldwin, Inc. since October, 1980. He was
President of Alexander & Baldwin, Inc. from October, 1979 until
January, 1985 and from April, 1989 until April, 1991. He was Chief
Executive Officer from January, 1980 until April, 1992. He was Chief
Executive Officer of Matson Navigation Company, Inc. from April, 1973
to April, 1992. He has been Chairman of the Board since October, 1979.
Alexander & Baldwin, Inc., which is engaged in ocean transportation,
container leasing, agribusiness, property development and property
management, holds 1,692,894 shares of stock of the Corporation, as to
which Mr. Pfeiffer disclaims beneficial ownership.
GEORGE P. SHEA, JR., 56, (1996) has been a Director of the Corporation 2,669 *
since March, 1993 and the Bank since March, 1989. He has been Chairman,
President and Chief Executive Officer of First Insurance Company of
Hawaii, Ltd. since 1988. He was a Certified Public Accountant with
Peat Marwick Mitchell & Company from 1965 to 1971 when he joined
First Insurance and was promoted to Treasurer. He was Vice President,
Secretary and Treasurer of First Insurance from 1978 to 1982 and President
and Chief Executive Officer from 1982 to 1988.
</TABLE>
7
<PAGE> 9
<TABLE>
<CAPTION>
Shares of Common
Stock of the Corporation Percent
Beneficially Owned of
Executive Officers at February 24, 1995 Class
------------------ ------------------------ -------
<S> <C> <C>
PHILIP H. CHING -- His reported beneficial ownership of the Corporation's 28,283 *
stock includes 10,808 shares held in his wife's revocable living trust as to
which Mr. Ching disclaims beneficial ownership and 5,569 shares that
Mr. Ching has the right to acquire within 60 days through the exercise
of stock options.
DONALD G. HORNER -- His reported beneficial ownership of the 27,373 *
Corporation's stock includes 5,569 shares that Mr. Horner has the right
to acquire within 60 days through the exercise of stock options.
HOWARD H. KARR -- His reported beneficial ownership of the Corporation's 63,664 *
stock includes 2,118 shares held in his wife's revocable living trust, 602
shares held in his wife's individual retirement account, 2,500 shares held
in a custodial account for a child for which he has sole voting and
investment powers, and 7,210 shares that Mr. Karr has the right to acquire
within 60 days through the exercise of stock options.
Nominees, Directors Continuing to Serve and Executive Officers
- --------------------------------------------------------------
Beneficial Ownership of all Nominees, Directors, and Executive 8,646,629 27.03
Officers as a Group (19 persons).
</TABLE>
- ---------------
*The percentage of shares beneficially owned does not exceed 1% of the shares
currently outstanding, including shares that can be acquired within 60 days
through the exercise of stock options.
Each of the foregoing Directors attended 75% or more of the combined
total number of meetings held during 1994 of the Board and Committees on which
he or she sits. The Board of Directors met 12 times in 1994. To the
Corporation's knowledge, which is based solely on a review of reports of
changes in ownership of the Corporation's Common Stock as received by the
Corporation from directors, executive officers and other persons owning more
than 10% of the Corporation's Common Stock, the Corporation believes that all
such reports were timely filed.
COMMITTEES OF THE BOARD
Among the standing committees of the Board are the Executive
Committee, Executive Compensation Committee, and the Joint Audit Committee.
The Executive Committee also acts as the Nominating Committee.
The Executive Committee, acting as the Nominating Committee, advises
the Board of Directors with respect to the number of Directors to be elected to
the Board and recommends the persons to be nominated for election as Directors.
The Committee will consider nominees recommended by the stockholders for
election as Director. Any such recommendation, together with the nominee's
qualifications and consent to be considered as a nominee, should be sent to the
Secretary of the Corporation in a sufficient time prior to the Annual Meeting
of the Corporation's stockholders for the Committee to consider and act upon
such recommendation. The Committee, acting as the Nominating Committee, met
once in 1994. Its members are Robert J. Pfeiffer (Chairman), Walter A. Dods,
Jr., Bert T. Kobayashi, Jr., and Fred C. Weyand.
The Executive Compensation Committee acts upon the executive
compensation program of the Corporation and its subsidiaries. The Committee
administers the Incentive Plan for Key Executives, the Long-Term Incentive Plan,
the Stock Incentive Plan, and the Deferred Compensation Plan, reviews the per-
8
<PAGE> 10
formance and salaries of the Corporation's Chief Executive Officer and
other senior management officers of the Corporation and its subsidiaries
and makes recommendations to the Board of Directors with respect to the
appropriate senior management compensation structure. The Committee met 7 times
in 1994. Its members are Robert J. Pfeiffer (Chairman), Julia Ann Frohlich,
Bert T. Kobayashi, Jr., Fred C. Weyand and Glenn A. Kaya, a Director of the
Bank.
The Joint Audit Committee, which met 5 times during 1994, determines
on behalf of the Board whether the performance and examination of the
independent public accounting firm and the Corporation's internal auditor are
satisfactory and adequate to meet the Board's supervisory responsibility. The
Committee reviews internal auditing reports, the adequacy of internal financial
and accounting controls, the work of the external and internal auditors and
management's responses to their audit reports and recommendations. It
recommends the independent public accounting firm proposed for election as
Auditor of the Corporation. It also reviews the Corporation's reports to
stockholders and other financial statements. The Committee reviewed and
approved the 1994 audit plan. The members of the Joint Audit Committee are
George P. Shea, Jr. (Chairman), Warren H. Haruki, Howard K. Hiroki, Roderick
F. McPhee, and Fujio Matsuda. Messrs. Haruki and Hiroki are Directors of the
Bank and hold certified public accountants certificates, as does Mr. Shea.
COMPENSATION OF DIRECTORS
In 1994, the Corporation paid a quarterly retainer of $3,000 to each
member of the Board of Directors who was not an employee of the Corporation or
its subsidiaries. All members of the Board received a fee of $800 and
reimbursement for transportation expenses for each Board meeting attended and
$700 for each committee meeting attended.
The Corporation has a Directors' Retirement Plan for non-employee
Directors of the Corporation and the Bank who are not covered by the
Corporation's Employees' Retirement Plan. Following retirement from the Board
after at least 10 years of service, the retired Director or his or her
beneficiary will be entitled to receive monthly payments for a 10 year period
at an annual rate equal to one-half of the annual retainer fee in effect at the
time of the Director's retirement.
9
<PAGE> 11
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation for the Chief
Executive Officer and the `other four most highly compensated executive
officers for the years ended December 31, 1994, 1993 and 1992.
<TABLE>
<CAPTION>
Long-Term Compensation
-------------------------------------------------
Annual Compensation Awards Payouts
------------------------------------------- ----------------------- -----------------------
Other
Name and Annual Restricted Securities All Other
Principal Compen- Stock Underlying LTIP Compen-
Position Year Salary(1) Bonus(2) sation(3) Awards(4) Options Payouts(5) sation(6)
-------- ---- --------- -------- --------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Walter A. Dods, Jr. 1994 $714,580 $ 31,250 $42,887 -- 22,000 None $34,158
Chairman of the 1993 $711,190 $334,021 $34,645 -- 18,000 $306,822 $41,432
Board of Directors, 1992 $652,400 $375,587 $37,273 -- 18,800 -- $35,939
Chief Executive
Officer, and
Director of the
Corporation
and Bank
John A. Hoag 1994 $502,356 $ 16,000 $19,555 -- 11,320 None $ 4,945
President and 1993 $493,648 $195,896 $19,494 -- 9,920 $75,268 $24,018
Director of the 1992 $453,700 $210,477 $18,808 -- 10,820 -- $12,410
Corporation and
Vice Chairman and
Director of the
Bank
Howard H. Karr 1994 $278,144 $ 12,500 $19,464 -- 5,600 None $1,317
Executive Vice 1993 $271,992 $124,646 $19,447 -- 4,960 $62,039 $9,480
President and 1992 $247,500 $132,460 $17,430 -- 4,420 -- $1,764
Treasurer of the
Corporation and
Vice Chairman and
Chief Financial
Officer of the Bank
Philip H. Ching 1994 $243,486 $ 10,624 $25,612 -- 4,010 None $ 2,941
Executive Vice 1993 $243,664 $106,249 $22,115 -- 3,510 $45,815 $12,282
President of the 1992 $218,800 $112,340 $20,006 -- 3,750 -- $ 5,639
Corporation and
Vice Chairman
of the Bank
Donald G. Horner 1994 $232,615 $ 10,750 $19,101 -- 3,870 None $ 695
Executive Vice 1994 $222,550 $102,500 $18,999 -- 3,730 $51,091 $6,351
President of the 1992 $206,800 $109,460 $16,086 -- 3,650 -- $ 885
Corporation and
Vice Chairman of
the Bank
</TABLE>
10
<PAGE> 12
NOTES TO SUMMARY COMPENSATION TABLE:
Note (1) Includes the following for the above named executive officers:
<TABLE>
<CAPTION>
Base Director and Total
Year Salary Committee Fees Other Salary
---- ------ -------------- ----- ------
<S> <C> <C> <C> <C> <C>
Dods . . . . . . 1994 $625,000 $85,800 $3,780 $714,580
1993 $625,000 $82,200 $3,990 $711,190
1992 $575,000 $77,400 $ -- $652,400
Hoag . . . . . . 1994 $400,000 $93,500 $8,856 $502,356
1993 $400,000 $84,300 $9,348 $493,648
1992 $375,000 $78,700 $ -- $453,700
Karr . . . . . . 1994 $250,000 $25,200 $2,944 $278,144
1993 $250,000 $20,300 $1,692 $271,992
1992 $230,000 $17,500 $ -- $247,500
Ching . . . . . 1994 $212,500 $25,200 $5,786 $243,486
1993 $212,500 $25,900 $5,264 $243,664
1992 $195,000 $23,800 $ -- $218,800
Horner . . . . . 1994 $215,000 $16,800 $ 815 $232,615
1993 $205,000 $16,800 $ 750 $222,550
1992 $190,000 $16,800 $ -- $206,800
</TABLE>
Note (2) Includes cash payments under the qualified Profit Sharing Plan and
Cash Bonus Plan for all 3 years and 1992 and 1993 cash payments
under the Incentive Plan for Key Employees ("IPKE"). IPKE payments
for 1994 are in the process of being determined and will be paid in
1995 and reported in the Proxy Statement for the 1996 annual
meeting.
Note (3) Includes primarily imputed income, including "gross-up" for income
taxes, related to social club memberships and dues and personal use
of automobiles. The amounts of Other Annual Compensation for the
above named officers other than Mr. Ching in each of the 3 most
recent years were less than $50,000 and 10% of Salaries and Bonuses.
Mr. Ching received imputed income, including "gross-up," related to
club memberships and dues in the amounts of $8,542, $8,322 and
$7,932, respectively, for 1994, 1993 and 1992 and imputed amounts,
including "gross-up," related to automobiles, of $17,070, $13,793,
and $12,074, respectively, for 1994, 1993 and 1992.
Note (4) The Executive Compensation Committee may, at its sole discretion,
pay IPKE awards in restricted Common Stock of the Corporation with a
fair market value equal to the payment amount, in lieu of cash.
There were no restricted stock awards to the above named executive
officers under the IPKE for the years shown. As of December 31,
1994, the aggregate number of non-vested restricted shares by the
year of vesting of such shares for each of the above named executive
officers and aggregate market value (based on the market price of
the stock at December 31, 1994) follow:
<TABLE>
<CAPTION>
Number of
Shares Vesting In Market
------------------ Total Value
1995 1998 Shares 12/31/94
---- ---- ------ --------
<S> <C> <C> <C> <C>
Dods . . . . . . . . . . . 8,163 -- 8,163 $193,871
Hoag . . . . . . . . . . . 5,612 -- 5,612 133,285
Karr . . . . . . . . . . . -- -- -- --
Ching . . . . . . . . . . 2,755 -- 2,755 65,431
Horner . . . . . . . . . . -- 17,666 17,666 419,568
Total . . . . . . . . 16,530 17,666 34,196 $812,155
</TABLE>
11
<PAGE> 13
NOTES TO SUMMARY COMPENSATION TABLE (continued):
Dividends are paid to the above named executive officers on their
restricted stock holdings. Participants are entitled to vote the
restricted shares. Restricted IPKE shares become vested upon the
participant attaining 60 years of age, completion of 20 full years
of employment, retirement, death, or termination of employment prior
to retirement with the approval of the Corporation, whichever occurs
earliest. Beginning in 1989, for those participants who had
previously met the minimum restrictions for vesting by completion of
20 full years of employment or attaining 60 years of age, the
Committee imposed a five-year minimum waiting period from the date
of any subsequent stock awards. The IPKE also provides for
forfeiture by the participant and reversion to the Corporation of
all non-vested shares previously awarded in certain cases of
termination of employment.
Note (5) The amounts of LTIP payouts for the first LTIP cycle (1991-1993)
were determined and paid in 1994. Because the Corporation did not
exceed its threshold average return on equity ("ROE") of 15% over
the 1992-1994 performance cycle, no awards will be payable under the
LTIP in 1995 for the cycle, which ended December 31, 1994.
Note (6) Includes premiums for term life insurance, including "gross-up" for
income taxes, and split dollar insurance agreements as discussed
below. Details of All Other Compensation for each of the above named
executive officers for 1994 are as follows:
<TABLE>
<CAPTION>
Term Split Dollar
Insurance Insurance Total
--------- ------------ -------
<S> <C> <C> <C>
Dods . . . . . . . . . . $32,483 $ 1,675 $34,158
Hoag . . . . . . . . . . $ -- $ 4,945 $ 4,945
Karr . . . . . . . . . . $ -- $ 1,317 $ 1,317
Ching . . . . . . . . . $ -- $ 2,941 $ 2,941
Horner . . . . . . . . . $ -- $ 695 $ 695
</TABLE>
The Corporation has split dollar insurance agreements with the named
executive officers, as well as certain other senior officers. The
Corporation pays the insurance premium and imputes the economic
benefit to the executive utilizing the PS58 table published by the
Internal Revenue Service. Under the agreement, the executive owns a
policy with a death benefit equal to three times final salary and
the Corporation owns an interest in the policy on the life of the
executive sufficient to recover all premiums previously paid plus
any foregone interest, net of the income tax benefit, on such
premium payments upon the death of the executive. The amount for
each named executive officer under this split dollar insurance
agreement included in the above table represents the foregone
interest, net of applicable income tax benefit. The Corporation also
has a $1,000,000 whole life insurance policy on the life of Mr.
Dods. The premium and related "gross-up" for income taxes on this
policy are included under the Term Insurance column. The death
benefit under this policy is deducted from the death benefit under
Mr. Dods' split dollar insurance policy.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth the stock options granted on March 9,
1994 to each of the above named executive officers under the Corporation's
Stock Incentive Plan ("SIP"). The table also lists the potential realizable
values of such options on the basis of assumed annual compounded stock
appreciation rates of 5% and 10% over the life of the options, which is set
at 10 years. The Corporation does not have a stock appreciation rights ("SAR")
program.
12
<PAGE> 14
<TABLE>
<CAPTION> Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Grants}(1) for Option Term(2)
---------------------------------------- -----------------------------
Number of Percent of
Securities Total Options Exercise
Underlying Granted to or Expira-
Options Employees in Base Price tion
Name Granted(3) Fiscal Year Per Share Date 5% 10%
---- ---------- ------------- ---------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Walter A. Dods, Jr. . . . . . . 22,000 17.1% $26.50 3/09/04 $366,646 $929,152
John A. Hoag . . . . . . . . . 11,320 8.8% $26.50 3/09/04 $183,141 $478,091
Howard H. Karr . . . . . . . . 5,660 4.4% $26.50 3/09/04 $ 91,570 $239,045
Philip H. Ching . . . . . . . . 4,010 3.1% $26.50 3/09/04 $ 64,876 $169,359
Donald G. Horner . . . . . . . 3,870 3.0% $26.50 3/09/04 $ 58,901 $159,736
</TABLE>
NOTES TO OPTION GRANTS IN LAST FISCAL YEAR:
Note (1) Options under the SIP are granted at 100% of the market value of the
stock on the date of the grant. Options vest 25% per year after the
first anniversary of the date of grant. No option may be exercised
prior to vesting (and in no event earlier than 6 months after the
date of grant) or later than 10 years after the date of grant. The
exercise price of an option is payable either in cash, by tendering
previously acquired shares by the optionee, or by a combination of
cash and previously acquired shares. In the event of a change in
control, as defined in the SIP, all options granted and held at
least 6 months become immediately exercisable and vested. In the
event of death, disability or retirement, the Committee has the
discretion to accelerate the vesting of options previously granted.
The SIP provides for the shortening of the exercise period for
vested options if termination is due to death, disability or
retirement. The SIP also provides for the Corporation to withhold
statutory income taxes upon the exercise of the options by the
option holder paying cash or tendering previously acquired
Corporation shares or by the Corporation withholding the appropriate
number of option shares which would have been issued following the
option exercise. Without the approval of the stockholders of the
Corporation, the SIP cannot be terminated, amended, or modified to
(a) increase the total amount of shares which may be issued except
as provided in the SIP; (b) change the class of eligible employees;
(c) materially increase the cost of the SIP or benefits to the
participants; (d) extend the maximum period after the date of grant
during which the options may be exercised; or (e) change the
provisions of the exercise price.
Note (2) The potential realizable value is reported net of the option
exercise price, but before income taxes associated with exercise.
These amounts represent assumed annual compounded rates of
appreciation of the underlying stock of 5% and 10% from the date of
grant to the end of the option. Actual gains, if any, on stock
option exercises are dependent on the future performance of the
Corporation's Common Stock, overall stock market conditions, and the
optionees' continued employment through the vesting period. The
amounts reflected in these columns may not necessarily be achieved.
Note (3) None of the options granted represent reload options.
OPTION VALUES AT DECEMBER 31, 1994
The following table reflects the securities underlying unexercised
options and the value of these options as of December 31, 1994:
13
<PAGE> 15
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
December 31, 1994 December 31, 1994
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
---- ----------------- -----------------
<S> <C> <C>
Walter A. Dods, Jr. . . . . . . . 13,900/44,900 None/None
John A. Hoag . . . . . . . . . . . 7,890/24,170 None/None
Howard H. Karr . . . . . . . . . . 3,450/11,590 None/None
Philip H. Ching . . . . . . . . . 2,753/8,517 None/None
Donald G. Horner . . . . . . . . . 2,758/8,492 None/None
</TABLE>
There were no options exercised by the named executive officers in
1994.
TEN-YEAR OPTION REPRICINGS
For the year ended December 31, 1994, there was no adjustment or
amendment to the exercise price of the stock options previously awarded.
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
The Corporation's LTIP applies to a group of key executives approved
by the Executive Compensation Committee, much smaller than the group eligible
for IPKE and SIP awards. It is intended to provide incentive compensation to
participants based on the Corporation's ability to sustain a target level of
performance over a 3-year performance cycle. The LTIP is administered by the
Executive Compensation Committee and has no expiration date.
Under the LTIP, no "awards" of shares, units or other rights, as such,
are granted. Instead, at the beginning of each 3-year cycle, the Executive
Compensation Committee designates which key executives will be eligible to
participate in the LTIP for the cycle. Additional key executives may be
declared eligible during the cycle. The Committee also establishes target
amounts of individual payouts and corporate performance standards to be met
over the 3-year performance cycle.
In 1994, the Executive Compensation Committee established the formula
for LTIP awards for the 3-year cycle 1994 to 1996. Under the formula for this
cycle, LTIP payouts are based on target percentages (ranging from 10% to 35%) of
each participant's average base salary over the 3-year performance cycle. If the
Corporation does not achieve a threshold average ROE of 14% over the 3-year
performance cycle, no payouts will be due under the LTIP. When the
Corporation's ROE exceeds the threshold level, the target awards to participants
are adjusted by a factor (ranging from 0% to 140%) based on the Corporation's
financial performance compared to a peer group, as measured by return on average
assets ("ROAA"), and based upon the Corporation's average efficiency ratio.
Relative ROAA and average efficiency ratio are equally weighted in the payout
calculation. In addition, LTIP payouts to participants may be adjusted by the
Committee based on that individual's performance (from 0% to 140% of the
individual's targeted amount as adjusted for the Corporation's performance).
The peer group used for comparative ROAA purposes is comprised of
regional bank holding companies similar to the Corporation in size, performance
and nature of operations. The group includes some but not all of the companies
in the S&P Major Regional Bank Index.
Cash payouts are made after each 3-year performance cycle. The payouts
in 1994 for the 3-year cycle 1991-1993 are reported in the "Summary
Compensation Table." A participant can elect to have the cash award deferred
for future payment under the Corporation's Deferred Compensation Plan.
The following table reflects the estimated future payouts, with
respect to the named executive officers, at threshold, target and maximum award
levels for the 3-year performance cycle beginning in 1994 and ending in 1996.
Actual payouts are contingent upon the Corporation meeting its threshold ROE
and are subject to adjustment by the Committee as described above, based upon
corporate and individual performances, which will be determined in 1997 for the
1994-1996 performance cycle.
14
<PAGE> 16
<TABLE>
<CAPTION>
Performance
Number of or Other Estimated Future Payouts
Shares, Units Period Until under Non-Stock Price-Based Plans(2)
or Other Maturation or ------------------------------------------------
Name Rights Payout(1) Threshold(3) Target Maximum(4)
---- ------------- ------------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Walter A. Dods, Jr. . . None 12/31/96 None $218,750 $428,750
John A. Hoag . . . . . None 12/31/96 None $120,000(5) $235,200(5)
Howard H. Karr . . . . None 12/31/96 None $ 50,000 $ 98,000
Philip H. Ching . . . . None 12/31/96 None $ 42,500 $ 83,300
Donald G. Horner . . . None 12/31/96 None $ 43,000 $ 84,280
</TABLE>
NOTES TO LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR:
Note (1) Performance period beginning January 1, 1994 and ending December 31,
1996.
Note (2) Estimated future payouts under the Target and Maximum columns are
based upon the named executive officer's base salary as of December
31, 1994.
Note (3) If the Corporation does not meet its threshold ROE or the
participant receives a 0% individual performance rating, there is no
payout.
Note (4) Under the current formula, the maximum individual payout is limited
to 196% of the target amount.
Note (5) Mr. Hoag has announced his retirement in 1995. He will be entitled
to participate in the LTIP for the 1993-1995, 1994-1996 and 1995-
1997 cycles, but any payout would be prorated to reflect the portion
of the cycle during which he remains an employee.
PROFIT SHARING PLAN AND CASH BONUS PLAN
The Corporation has a defined contribution Profit Sharing Plan and a
defined contribution Cash Bonus Plan (together, the "Plans"). All regular
employees of the Corporation and participating subsidiaries (including those
who are officers and directors) become members of the Plans on the first of the
month coincident with or next following their completion of one year of service
in which they work at least 1,000 hours. The Profit Sharing Plans provide that
for every taxable year, the Corporation and its participating subsidiaries
shall each contribute to the Profit Sharing Plan an amount of cash equal to
one-half of the applicable percentage of the total compensation of Plan
participants employed by each company, respectively, for such year. Such
percentage of the total compensation is a function of the percentage increase
in the Corporation's consolidated net earnings for such year as determined from
the following table:
<TABLE>
<CAPTION>
Percent Increase In Percent of Total
Consolidated Net Earnings Compensation
------------------------- ----------------
<C> <C>
0 or less 5.0
5 8.0
10 11.5
15 15.5
20 20.0
25 25.0
</TABLE>
The other half of the amount of the Corporation's contribution to the
Plans is distributed in the form of a cash bonus under the Cash Bonus Plan that
is currently taxable to the employee.
A Profit Sharing Plan participant's share of the total profit sharing
contribution bears the same proportion to the total as is represented by the
participant's compensation for the plan year divided by the total compensation
of participants entitled to an allocable share of the profit sharing
contribution.
DEFINED BENEFIT PENSION PLANS
The Corporation has an Employees' Retirement Plan (the "ERP") for
employees of the Corporation and participating subsidiaries who have completed
certain age and service requirements. Under the ERP, covered compensation
includes salary, including overtime, but excluding bonuses. Pension
compensation is also limited
15
<PAGE> 17
to a maximum allowable under the Internal Revenue Code. Retirement benefits
become payable effective upon an employee's retirement at the normal retirement
age of 65 years. Normal retirement benefits payable under the ERP are based on
total or final compensation and years of credited service. Under specified
circumstances, an employee who has attained a certain age and length of service
may retire early with reduced benefits.
The Corporation has a non-qualified, unfunded Supplemental Executive
Retirement Plan (the "SERP") for executives of the Corporation and
participating subsidiaries. To be eligible, an executive must have had benefits
under the Corporation's tax-qualified plans that are limited by certain laws or
regulations governing such plans and their benefits. The SERP provides the
difference between an unrestricted benefit and the restricted benefit allowed
under the qualified plan. In determining the pension benefits under the SERP, a
participant's covered compensation includes salary and the annual bonus earned
under the IPKE.
The following table illustrates the estimated annual pension benefits
payable to an executive officer at age 65. Whether these amounts become payable
depends on the contingencies and conditions governing the Corporation's ERP and
SERP.
<TABLE>
<CAPTION>
Final Years of Service(2)
Average -----------------------------------------------------------------------------------------
Compensation(1) 15 20 25 30 35 40
- --------------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 200,000 $ 50,494 $ 67,326 $ 84,157 $100,989 $117,820 $134,651
250,000 63,619 84,826 106,032 127,239 148,445 169,651
300,000 76,744 102,326 127,907 153,489 179,070 204,651
350,000 89,869 119,826 149,782 179,739 209,695 239,651
400,000 102,994 137,326 171,657 205,989 240,320 274,651
450,000 116,119 154,826 193,532 232,239 270,945 309,651
500,000 129,244 172,326 215,407 258,489 301,570 344,651
600,000 155,494 207,326 259,157 310,989 362,820 414,651
700,000 181,744 242,326 302,907 363,489 424,070 484,651
800,000 207,994 277,326 346,657 414,989 485,320 544,651
900,000 234,244 312,326 390,407 468,489 546,570 624,651
1,000,000 260,494 347,326 434,157 520,989 607,820 694,651
1,100,000 286,744 382,326 477,907 573,489 669,070 764,651
1,200,000 312,994 417,326 521,657 625,989 730,320 834,651
</TABLE>
NOTES TO DEFINED BENEFIT PENSION PLANS TABLE:
Note (1) Final average compensation represents the average annual
compensation during the highest 60 consecutive calendar months in
the last 120 calendar months of creditable service. Compensation for
the purpose of this table includes base salary plus the value of
awards under the IPKE as shown on the Summary Compensation Table
(but not bonuses under the Profit Sharing Plan and Cash Bonus Plan).
The estimated annual benefits are computed on the basis of a
straight-life annuity form of payment with no social security
offset.
Note(2) As of December 31, 1994, the number of years of creditable service
under the Corporation's defined benefit plans for each of the named
executive officers in the Summary Compensation Table was as follows:
Mr. Dods, 26 years; Mr. Hoag, 35 years; Mr. Karr, 22 years; Mr.
Ching, 37 years; and Mr. Horner, 16 years.
CHANGE IN CONTROL ARRANGEMENTS
There are no employment contracts, change-in-control arrangements
(other than in the LTIP, SIP and Deferred Compensation Plan) or termination of
employment arrangements with the named executive officers.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Executive Compensation Committee are Robert J.
Pfeiffer, Chairman, Julia Ann Frohlich, Glenn A. Kaya, Bert T. Kobayashi, Jr.,
and Fred C. Weyand.
16
<PAGE> 18
No member of the Executive Compensation Committee was, at any time
during the last completed fiscal year, an officer or employee of the
Corporation or any of its subsidiaries. General Weyand was Vice President of
the Corporation from 1976 to 1982, Senior Vice President of the Bank from 1980
to 1982 and Corporate Secretary from 1978 to 1981.
The Corporation has in the ordinary course of business extended credit
to Messrs. Kaya and Kobayashi and Dr. Frohlich (consisting of real estate
mortgages and consumer credit lines) as follows:
<TABLE>
<CAPTION>
Aggregate
Largest Indebtedness Interest
Aggregate Outstanding Rate
Indebtedness December 31, Per
Name in 1994 1994 Annum
---- ------------ ------------ -------------
<S> <C> <C> <C>
Glenn A. Kaya . . . . . . $416,415 $411,512 7.625%-8.125%
Bert T. Kobayashi, Jr. . . $867,098 $838,365 5.000%-6.000%
Julia Ann Frohlich. . . . $ 14,371 $ 0 9.600%
</TABLE>
In 1994, the subsidiaries of the Corporation paid fees to the law firm
of Kobayashi, Sugita & Goda in the amount of $602,292. Mr. Kobayashi is a
partner of Kobayashi, Sugita & Goda.
Mr. Pfeiffer is Chairman of the Board and a director of Alexander &
Baldwin, Inc., which owns 5.29% of the Corporation's outstanding common stock.
Mr. Dods is a director of Alexander & Baldwin, Inc. and the Asset Management
Division of First Hawaiian Bank holds 2,709,064 shares of Alexander & Baldwin,
Inc.'s common stock in a fiduciary capacity. Mr. Dods does not serve on the
executive compensation committee (or other board committee performing the
equivalent function) of Alexander & Baldwin, Inc.
The Bank has (a) made loans to Alexander & Baldwin, Inc. and (b) made
loans to, and issued a letter of credit on behalf of, Matson Navigation
Company, Inc., a subsidiary of Alexander & Baldwin, Inc. These loans and the
letter of credit were made in the ordinary course of business, were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and did
not involve more than normal risks of collectibility or present other
unfavorable features.
REPORT OF EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee of the Board of Directors (the
"Committee") is composed of independent, outside Directors of the Corporation
and one independent, outside director of the Bank. The Board of Directors has
delegated responsibility for administering the executive compensation program
of the Corporation and its subsidiaries to the Committee.
The philosophy underlying the administration of the Corporation's
executive compensation program is an appropriate linkage between executive
compensation, financial and operating performance, and the creation of
stockholder value. Key objectives of this philosophy include:
o providing a pay system designed to attract, retain and
motivate executives;
o establishing compensation plans which emphasize
performance-based pay opportunities, as measured by operating,
financial and strategic objectives and goals;
o providing longer-term, equity-based incentives for executives
to ensure they are motivated and rewarded for growth in equity
value and enhanced value to the stockholders.
The compensation program adopted by the Committee includes three
components designed to implement the foregoing objectives: (1) base salaries;
(2) annual incentives; and (3) long-term incentives. Each of these components
of compensation is discussed separately below.
BASE SALARIES
Base salaries of executive officers are set annually by the Committee.
The Committee takes into consideration factors such as varying levels of
responsibility, individual performance, consistency and fairness, cost of
living factors, the Corporation's operating results and financial performance
and cost control. The Committee places no particular weight on, or relative
importance to, any single factor in adjusting base salaries.
17
<PAGE> 19
ANNUAL INCENTIVES
Annual incentives for executive officers are provided pursuant to the
IPKE, which provides cash and deferred bonuses based upon the Corporation's
profitability and the executive's performance over the course of the year. The
IPKE promotes the Corporation's pay-for-performance philosophy by providing
executives with direct financial incentives, in the form of annual cash bonuses
or restricted stock awards, to achieve corporate and individual performance
goals. Moreover, annual bonus opportunities allow the Corporation to
communicate specific goals that are of primary importance during the coming
year and to motivate executives to achieve these goals. The IPKE was originally
approved by the stockholders in 1969 and has subsequently been amended several
times by the stockholders.
The total amount of bonuses available under the IPKE is a bonus pool
equal to 2 1/2% of consolidated income, before income taxes and securities
gains, for the performance year. Guideline percentages of base salary are set,
increasing as the executives' pay grades increase. The Chief Executive
Officer, at his discretion, allocates a portion of the annual bonus pool to
each business unit. The manager of each business unit recommends how this
allocated amount should be distributed to individual participants in the
business unit. Individual awards above or below guideline percentages are
generally based upon the participant's management level and performance during
the performance period. The business unit manager's recommendations are
reviewed and approved or adjusted by the Chief Executive Officer. These
recommendations are then presented to the Committee for final review and
approval. The Committee grants individual bonuses above or below guideline
percentages based upon the Committee's judgment, after reviewing the
recommendation of the Chief Executive Officer, as to individual performance and
relative levels of responsibility.
Before 1994, IPKE bonuses were calculated and awarded in December of
the performance year based upon year-end projections. For 1994, however, the
Chief Executive Officer recommended, and the Committee approved, deferral of
calculation and award of IPKE bonuses for 1994 performance until March, 1995.
This will allow management and the Committee to base the awards upon final,
rather than projected, performance results for the year. Therefore, no IPKE
awards for the 1994 performance year have been calculated and they are not
reported in this Proxy Statement. IPKE awards granted in 1995 for 1994
performance for the named executive officers will be reported in the proxy
statement for the 1996 annual meeting.
Executive officers are also eligible to receive annual bonuses under
the Corporation's Profit Sharing Plan and Cash Bonus Plan, which are plans with
fixed profit sharing formulas in which all eligible employees of the
Corporation participate and which are not administered by the Committee.
LONG-TERM INCENTIVES
Long-term incentives are provided in the form of cash awards under the
Corporation's LTIP and grants of stock options under the SIP. In keeping with
the Corporation's commitment to provide a total compensation package which
places a significant amount of pay "at-risk", long-term incentives, together
with awards under the IPKE, comprise approximately 40% of the value of an
executive's total compensation package if the Corporation meets its target
performance levels.
The Corporation's LTIP applies to a group of key executives approved
by the Committee that is much smaller than the group eligible for IPKE and SIP
awards. It is intended to provide incentive compensation to participants based
on the Corporation's ability to sustain target levels of performance over a
3-year performance cycle. Under the formulas in effect for 3-year cycles ending
in 1994 and 1995, LTIP awards are based on target percentages (ranging from
10% to 35%) of each participant's average base salary over the 3-year
performance cycle. If the Corporation does not achieve a threshold average ROE
set by the Committee over the 3-year performance cycle, no payouts are made
under the LTIP. When the Corporation's average ROE exceeds the threshold level,
the target payouts to participants are adjusted by a factor (ranging from 0% to
140%) based on the Corporation's financial performance compared to a peer
group, as measured by ROAA, and based upon the Corporation's asset growth over
the period. Relative ROAA and growth of assets are equally weighted in the
payout determination. In addition, LTIP awards to participants may be adjusted
by the Committee based on each individual's performance (from 0% to 140% of the
individual's targeted amount as adjusted for the Corporation's performance). In
the Committee's judgment, these performance measures are closely linked to
stockholder value creation and reinforce desired long-term strategies and
performance.
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<PAGE> 20
The peer group used for LTIP purposes is comprised of regional bank
holding companies similar to the Corporation in size, performance and nature of
operations. The group, which is updated and approved annually by the Committee,
includes some, but not all, of the companies in the S&P Major Regional Bank
Index.
The Corporation has completed the 1992-1994 performance cycle. The
Corporation's average ROE for the period was 13.96%, which did not exceed the
current threshold level for awards to be earned. Accordingly, no awards will
be payable for the 1992-1994 cycle.
The amounts of the LTIP payouts determined by the Committee in 1994
with respect to the named executive officers for the 1991-1993 cycle are
reported in the "Summary Compensation Table" in this proxy statement. The
formula for calculating LTIP payouts for the 1994-1996 performance cycle is
described under "Long-Term Incentive Plans - Awards in Last Fiscal Year" in
this proxy statement.
Under the SIP approved by the stockholders, stock options are granted
at an option exercise price not less than the fair market value of the
Corporation's stock on the date of grant. Accordingly, stock options have value
only if the stock price appreciates from the date the options are granted. This
design focuses executives on the enhancement of stockholder value over the long
term and encourages equity ownership in the Corporation.
Guidelines for setting the size of stock option grants were set by the
Committee at the time the SIP was established, based on the recommendation of
an independent consultant. The guideline for stock option grants is a
percentage of base salary (ranging from 10% to 85%), based upon officer grades
(increasing as grade increases), resulting in a dollar target which is then
converted into the target number of shares by dividing the dollar target by the
Corporation's stock price on the date of grant. The size of individual annual
awards is increased or decreased from the guideline level based on individual
performance at the sole discretion of the Committee.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
Mr. Dods has been Chief Executive Officer of the Corporation since
October, 1989. In addition to his corporate responsibilities, Mr. Dods is
regarded as one of Hawaii's premier business leaders and is also respected for
his numerous community, charitable and educational activities. His involvement
in these activities has contributed considerably to the favorable image of the
Corporation in the community.
BASE SALARY In December, 1993, the Committee reviewed Mr. Dods'
performance and concluded that his management performance was outstanding and
that well-conceived plans were executed, including corporate acquisitions and
the development of a new corporate headquarters building. Based on those
factors and the Corporation's sustained financial performance during a
difficult economic period, the Committee concluded that a merit increase in
base salary was warranted. However, in view of the economic conditions facing
the Corporation and the emphasis on cost controls, Mr. Dods requested that his
base salary and the base salaries of the other 4 executive officers listed
in the Summary Compensation Table, Messrs. Hoag, Karr, Ching and Horner, not be
increased for 1994. Accordingly, the Committee set Mr. Dods' base salary at
$625,000 for 1994, which is the same as it was in 1993. The base salaries for
the other key officers noted above also were set at 1993 levels. In mid-1994,
however, Mr. Horner's salary was increased, due to a promotion and increased
responsibilities.
ANNUAL INCENTIVES As stated above, IPKE payments for 1994 have not yet
been determined. The IPKE payment for Mr. Dods to be granted in 1995 for 1994
performance will be reflected in the proxy statement for the 1996 annual
meeting. Mr. Dods received a cash bonus of $14,254 for 1994 from the
Corporation's Cash Bonus Plan in which all eligible employees participate and
receive payments based on the formulas set forth in the Plan.
LONG-TERM INCENTIVES In March, 1994, Mr. Dods received options to purchase
22,000 shares pursuant to the SIP, as set forth in the table under the section
"Option Grants in Last Fiscal Year." This award was based upon the SIP's
guideline percentage of base salary, and the number of shares was rounded up to
the closest 1,000 shares. The Committee has determined that in its judgment the
number of options granted was appropriate in light of other elements of
compensation awarded and would serve the objective of directly linking a
significant portion of Mr. Dods' compensation to future creation of
stockholder value.
Mr. Dods also received a payout of $306,822 under the LTIP in 1994
based on the Corporation's financial performance for the 1991-1993 performance
cycle. As discussed above, based on the Corporation's performance for the
1992-1994 cycle, Mr. Dods will not receive an LTIP payout for this cycle.
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<PAGE> 21
POLICY WITH RESPECT TO THE $1 MILLION DEDUCTION LIMIT
Section 162(m) of the Internal Revenue Code generally limits the
deductibility by corporations of compensation in excess of $1,000,000 paid to
certain executive officers beginning in 1994, unless certain requirements are
met. The Committee continues to consider the impact of this new tax code
provision on the Corporation, and, in due course, will review its compensation
programs for the executive officers subject to the deduction limit while
preserving its focus on performance-driven compensation.
Executive Compensation Committee
Robert J. Pfeiffer, Chairman
Julia Ann Frohlich
Glenn A. Kaya
Bert T. Kobayashi, Jr.
Fred C. Weyand
STOCKHOLDER RETURN PERFORMANCE GRAPH
The attached Comparison of Five-Year Cumulative Total Stockholder
Return performance graph compares the cumulative total stockholder return
(stock price appreciation and reinvestment of dividends) on the Corporation's
common stock during the last five years as compared to the S&P Major Regional
Bank Index and the broader S&P 500 Index.
First Hawaiian, Inc.
100 81 118 128 115 115
________________________________________________________________________________
S&P 500 Index
100 97 126 136 150 152
________________________________________________________________________________
S&P Major Regional Bank Index
100 71 127 163 172 163
________________________________________________________________________________
*Total return assumes reinvestment of dividends and $100 invested on
December 31, 1989 in the First Hawaiian, Inc. common stock, S&P 500 Index and
S&P Major Regional Bank Ruler.
20
<PAGE> 22
CERTAIN TRANSACTIONS
The total amount of loans outstanding to directors and executive
officers of the Corporation from the Bank aggregated $1,557,878 at December 31,
1994. These loans were made in the ordinary course of business, were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and did
not involve more than normal risks of collectibility or present other
unfavorable features.
The following schedule shows detailed information on loans made by the
Corporation to those Directors (including nominees) and executive officers of
the Corporation whose aggregate indebtedness exceeded $60,000 at any time
during 1994. All loans are secured by real estate mortgages or are consumer
credit lines:
<TABLE>
<CAPTION>
Aggregate
Largest Indebtedness Interest
Aggregate Outstanding Rate
Indebtedness December 31, Per
Name and Title in 1994 1994 Annum
-------------- ------------ ------------ --------
<S> <C> <C> <C>
John W. A. Buyers $ 984,523 $ 971,121 5.000%-6.375%
Director
Philip H. Ching $ 440,995 $ 430,161 5.000%-9.600%
Executive Vice President
John C. Couch $2,112,387 $1,993,915 5.000%-9.500%
Director
Walter A. Dods, Jr. $1,257,461 $1,242,226 5.000%-9.600%
Chairman,Chief
Executive Officer
and Director
David M. Haig $1,221,214 $1,115,477 8.000%
Director
John A. Hoag $ 354,127 $ 342,900 6.000%-9.600%
President and Director
Donald G. Horner $ 464,766 $ 443,441 5.000%-9.600%
Executive Vice President
Howard H. Karr $ 526,504 $ 519,124 5.000%-9.600%
Executive Vice President
and Treasurer
Bert T. Kobayashi, Jr. $ 867,098 $ 838,365 5.000%-6.000%
Director
Dr. Richard T. Mamiya $2,696,597 $2,654,613 5.000%-9.125%
Director
Dr. Fujio Matsuda $ 413,308 $ 387,577 5.000%-7.625%
Director
Dr. Roderick F. McPhee $ 371,968 $ 283,957 5.625%-8.000%
Director
John K. Tsui $ 458,000 $ 456,996 4.500%-8.000%
Vice Chairman
</TABLE>
The Bank leases a parcel of land, on which a branch of the Bank is
located, from the Estate of S.M. Damon pursuant to a lease commencing July 1,
1967. This lease is for a term of 50 years, requiring the payment of a fixed
annual rent of $95,713 annually from July 1, 1993 to June 30, 1997. Rents
thereafter are to be fixed for each of two succeeding 10-year periods by
agreement or failing agreement by appraisal. Messrs. Haig, Weyand, Ganley and
Dods are Directors of the Corporation and the Bank and Trustees of the Estate.
Management of the Corporation believes that this transaction is as favorable to
the Corporation and the Bank
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<PAGE> 23
as that which would have been obtainable in transactions with persons or
companies not affiliated with the Corporation or the Bank.
The Bank leases 4,178 square feet of office space to the Estate of
S.M. Damon in a downtown Honolulu office building in which the Bank's
headquarters are temporarily located pending the construction of a new
headquarters building. The Estate leased 4,031 square feet in the old
headquarters building at $2.00 per square foot per month for the period ending
April 30, 1997. In consideration of the Estate and other tenants of the old
headquarters building agreeing to temporarily relocate their offices to allow
for construction of the new building, the Bank offered the Estate and 3 other
unrelated tenants comparable space in the temporary location at the same
aggregate rent as previously applied in the old building. Management of the
Corporation believes that, while the rent charged to the Estate and the other
tenants may not be market rate rents for the temporary location, the temporary
arrangements made for the Estate described above are as favorable to the
Corporation and the Bank as those that would have been obtainable in a similar
transaction with persons or companies not affiliated with the Corporation or
the Bank.
CHARTER AMENDMENTS
The Board of Directors believes, for the reasons set forth below, that
it is advisable and in the best interests of the Corporation's stockholders to
amend the Corporation's Certificate of Incorporation (the "Charter") by
approving the amendments to the Charter described below (collectively, the
"Charter Amendments"). The Charter Amendments would effect the following
changes to the Charter:
(i) create a new class of preferred stock (the "Preferred Stock")
consisting of 50,000,000 shares of a par value of $5.00 each, which
may be issued from time to time in one or more series in the future
(the "Preferred Stock Amendment");
(ii) eliminate Article Ninth of the Charter, which currently requires
the Board of Directors, upon any increase in the authorized capital
stock of the Corporation, to offer to stockholders preemptive rights
to subscribe for such additional shares of capital stock (the
"Preemptive Rights Amendment"); and
(iii) eliminate the right of holders of the Common Stock to act by
written consent in lieu of a stockholders' meeting (the "Consent
Amendment").
Each of the Charter Amendments will be voted on separately by
stockholders and the adoption of any of the Charter Amendments is not
contingent on the adoption of any of the other Charter Amendments. The
affirmative vote of a majority of the votes entitled to be cast by the holders
of all of the outstanding shares of Common Stock is required to approve each
Charter Amendment. Accordingly, abstentions and broker non-votes as to any
Charter Amendment will have the same effect as votes against such Charter
Amendment. The full text of the proposed Charter Amendments is attached as
Appendix I to this Proxy Statement and incorporated herein by reference.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL
OF EACH OF THE CHARTER AMENDMENTS, DESIGNATED AS PROPOSALS 3, 4 AND 5 ON YOUR
PROXY CARD.
PREFERRED STOCK AMENDMENT
The Charter currently authorizes the Corporation to issue 100,000,000
shares of Common Stock having a par value of $5.00 each. The Preferred Stock
Amendment would increase the number of shares of stock which the Corporation is
authorized to issue to 150,000,000 shares of a par value of $5.00 each and
would divide such shares into two classes: 100,000,000 shares which would be
designated as shares of Common Stock, and 50,000,000 shares which would be
designated as shares of Preferred Stock. The Preferred Stock Amendment would
provide the Board of Directors with the authority (without action by the
stockholders, unless such action is required for a particular transaction by
applicable law or the rules of NASDAQ) to issue shares of Preferred Stock in
one or more series from time to time in the future and to determine the voting
rights, designations, preferences as to dividends and in liquidation (including
any preferences or priorities over the Common Stock as to the payment of
dividends or upon liquidation), conversion and other rights,
22
<PAGE> 24
qualifications, limitations and restrictions of each such series at the time of
the issuance thereof. The Preferred Stock Amendment would not affect the
number of authorized or outstanding shares of Common Stock or change the terms
of the Common Stock as set forth in the Charter.
The Board of Directors believes that it is in the best interests of
the Corporation and its stockholders to create a class of Preferred Stock so
that shares of Preferred Stock will be available for issuance from time to time
in the future in connection with possible future financing programs and
acquisitions and for other general corporate purposes. Having such authorized
shares of Preferred Stock available for issuance in the future will give the
Corporation significantly greater flexibility than it now has to take advantage
of opportunities to obtain additional capital on favorable terms, to use
different types of capital stock as consideration for possible acquisitions,
and to take advantage of other corporate opportunities. The Preferred Stock
Amendment would, for example, permit the Corporation to strengthen and expand
its capital base by issuing securities that qualify as additional Tier 1 or
core capital under the Federal Reserve Board's regulatory capital rules without
diluting the voting or equity interests of existing holders of the
Corporation's Common Stock.
PREEMPTIVE RIGHTS AMENDMENT
The Charter currently provides that, upon any increase in the
authorized capital stock of the Corporation, except for stock issuances in
connection with certain mergers or acquisitions or as otherwise provided by
resolution of the stockholders of the Corporation, the Board of Directors must
first offer the additional authorized stock pro rata to all current
stockholders of record. The Preemptive Rights Amendment would delete Article
Ninth of the Charter in order to eliminate these "preemptive rights" of the
Corporation's stockholders to subscribe for such additional authorized stock.
Complying with the preemptive rights provision in the Charter
generally involves considerable delay and substantial expense to the
Corporation, because in most situations the Corporation must either initiate
and complete a rights offering, or solicit and obtain stockholder consents to a
waiver of the preemptive rights, before issuing any shares of capital stock.
Among other things, this may limit the Corporation's flexibility to take
advantage of opportunities to raise capital for business growth or to finance
acquisitions that may become available in the rapidly changing financial
markets, and may also limit some of the benefits that the Corporation could
otherwise obtain (as described above) from the approval and adoption of the
Preferred Stock Amendment. The elimination of preemptive rights from the
Charter will also give the Corporation the option to use unissued stock, rather
than open market purchases, for its benefit plans and its dividend reinvestment
plan, thus providing another vehicle for raising capital necessary to expand
the Corporation's business.
Historically, preemptive rights originated when companies were small
and had relatively few stockholders and market liquidity was limited. Their
primary purpose was to preserve the stockholders' proportionate interests in
their corporation. Today, however, there exists a broad base of corporate
ownership and a ready market for the stock of such corporations. Stockholders
wishing to maintain or increase their holdings in the Corporation may do so
through market purchases on NASDAQ, or through the Corporation's dividend
reinvestment plan without paying brokerage commissions.
Over the past several decades, virtually every major U.S. corporation
which had a preemptive rights provision in its charter has acted to eliminate
it, and the Corporation believes that it is now one of the few remaining
publicly-traded U.S. companies to have a preemptive rights provision in its
charter.
CONSENT AMENDMENT
Under Delaware law, unless otherwise provided in a corporation's
certificate of incorporation, any action which is required or permitted to be
taken at an annual or special meeting of stockholders may instead be taken
without prior notice, without a meeting and without a vote if a written consent
setting forth the action to be taken is signed by the holders of outstanding
shares of stock having at least the number of votes that would be required to
authorize such action at a meeting of stockholders at which all shares entitled
to vote thereon were present and voted. The Charter currently does not
restrict the rights of holders of Common Stock to act by written consent in
lieu of a stockholders' meeting, as permitted by Delaware law. The Consent
Amendment would amend the Charter to eliminate the right of holders of Common
Stock to act by written consent in lieu of a stockholders' meeting.
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<PAGE> 25
Accordingly, holders of Common Stock would be able to act only at an
annual meeting or at a special meeting (which under the Corporation's Bylaws as
currently in effect may be called only by the Board of Directors, the Chairman
of the Board or the President or upon the written request of holders of at
least 25% of the outstanding shares of Common Stock). By requiring that
actions by holders of Common Stock be taken only at a meeting, the Consent
Amendment ensures that all of the Corporation's stockholders will have the
opportunity to consider any matter that could affect their rights. The Board
of Directors believes it is appropriate and important for the Corporation's
stockholders to be afforded the protection of notice and a meeting in
connection with significant corporate actions by some stockholders that may
affect the interests of all stockholders.
POSSIBLE EFFECTS OF CHARTER AMENDMENTS
The Corporation has no current plans to issue Preferred Stock in the
event that the Preferred Stock Amendment and the Preemptive Rights Amendment
are approved. However, the issuance of shares of Preferred Stock, or the
issuance of rights to purchase such shares, and the elimination of the
preemptive rights of existing stockholders to acquire such shares or rights,
could be used by the Corporation in the future, subject to the Board's
fiduciary duties to the stockholders, to discourage an unsolicited acquisition
proposal. For instance, the issuance of a series of Preferred Stock might
impede a proposed business combination by including class voting rights that
would enable the holders of shares of such series to block such a transaction,
or facilitate a business combination by including voting rights that would
provide a required percentage vote of the holders with respect to specified
matters, subject in each case to any applicable requirements of NASDAQ. In
addition, the approval of the Preferred Stock Amendment together with the
Preemptive Rights Amendment would enable the Corporation to adopt a
shareholders' rights plan providing for the issuance of Preferred Stock
purchase rights to holders of the Common Stock. Shareholders' rights plans are
generally designed to deter coercive or abusive takeover tactics and other
takeover attempts that the Board determines are not in the best interests of
stockholders; such plans typically provide that upon the occurrence of certain
triggering transactions by a potential acquiror not approved in advance by the
board of directors, all of the corporation's stockholders (other than the
potential acquiror) will have the right to purchase additional common stock or
preferred stock (or in certain cases, common stock of the acquiror) at a
substantial discount. The Board of Directors has no plans at this time to
adopt a shareholders' rights plan, although it reserves the right to adopt such
a plan in the future if it determines, based upon circumstances at that time,
that it is in the stockholders' best interests to do so. Any of the foregoing
actions by the Board of Directors would be subject to the Board's fiduciary
duties under applicable law to act in a manner that the Board determines to be
in the best interests of the Corporation and its stockholders. However, such
actions could have the effect of discouraging a hostile acquisition attempt
that some stockholders might wish to accept.
If the Consent Amendment is adopted, a single majority stockholder or
group of stockholders would no longer be able to take unannounced action. The
inability of a majority stockholder or group of stockholders to act without a
meeting might adversely affect the decision of such person or group to purchase
voting securities of the Corporation. For example, a person may be discouraged
or deterred from attempting to obtain control of the Corporation if a necessary
element of such program is to take action immediately and without any prior
notice to the other stockholders of the Corporation.
ELECTION OF AUDITOR
The Board of Directors, on recommendation of the Joint Audit
Committee, recommends the re-election of Coopers & Lybrand L.L.P. ("Coopers &
Lybrand") as Auditor of the Corporation to serve for the ensuing year. Coopers
& Lybrand has served the Corporation in the capacity of independent Auditors
since 1973. Proxies in the accompanying form will be voted for the election of
Coopers & Lybrand unless a contrary specification is indicated therein, in
which event they will be voted as specified. Election of the Auditor requires
the affirmative vote of a majority of the shares present or represented at the
meeting. Under the Corporation's Certificate of Incorporation and Bylaws,
abstentions and broker non-votes will not have the effect of votes in
opposition to the election of Coopers & Lybrand.
24
<PAGE> 26
It is expected that representatives of Coopers & Lybrand will be at
the Annual Meeting and will be available to respond to questions and make a
statement if they choose.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RE-ELECTION OF
COOPERS & LYBRAND AS AUDITOR.
OTHER BUSINESS
At the date of this proxy statement, management does not know of any
business to be presented at the Annual Meeting other than the matters set forth
above. If any other matters properly come before the Annual Meeting, it is the
intention of the persons named in the accompanying form of proxy to vote in
accordance with their judgment on such matters.
STOCKHOLDER PROPOSALS FOR 1996
Proposals of stockholders intended to be presented at the 1996 Annual
Meeting of the Corporation must be received by the Corporate Secretary of the
Corporation on or prior to November 3, 1995.
BY ORDER OF THE BOARD OF DIRECTORS
FIRST HAWAIIAN, INC.
Herbert E. Wolff
Senior Vice President and Secretary
Dated: March 1, 1995
A COPY OF THE ANNUAL REPORT OF THE CORPORATION ON FORM 10-K TO BE FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION PRIOR TO APRIL 1, 1995, WILL BE
AVAILABLE AFTER THAT DATE TO EACH STOCKHOLDER UPON WRITTEN REQUEST THEREFOR.
APPENDIX I
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
FIRST HAWAIIAN, INC.
* * * * *
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
* * * * *
First Hawaiian, Inc., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware (hereinafter,
the "Corporation"), DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of the Corporation
held on February 16, 1995, resolutions were adopted setting forth proposed
amendments to the Certificate of Incorporation of the Corporation, declaring
said amendments to be advisable, and directing that said amendments be
considered at the annual meeting of the stockholders of the Corporation. The
resolution setting forth the proposed amendments is as follows:
"RESOLVED, that the Board of Directors of the Corporation
hereby declares it advisable that Article Fourth of the Certificate of
Incorporation of the Corporation be amended by deleting said article
in its entirety and by substituting in lieu thereof the following:
25
<PAGE> 27
'Fourth. The total number of shares of stock which this corporation
shall have authority to issue is One Hundred Fifty Million
(150,000,000) shares having a par value of Five Dollars ($5.00) per
share, divided into two classes: One Hundred Million (100,000,000)
shares designated as Common Stock (hereinafter, the "Common Stock");
and Fifty Million (50,000,000) shares designated as Preferred Stock
(hereinafter, the "Preferred Stock"). The Board of Directors of the
corporation is authorized to fix, by resolution or resolutions, the
designation of each series of Preferred Stock and the voting rights,
preferences as to dividends and in liquidation, conversion and other
rights, qualifications, limitations and restrictions thereof and such
other subjects or matters as may be fixed by resolution or resolutions
of the Board of Directors under the General Corporation Law of the
State of Delaware.'
and
RESOLVED, FURTHER, that the Board of Directors of the Corporation
hereby declares it advisable that the Certificate of Incorporation of the
Corporation be amended by repealing Article Ninth thereof in its entirety and
by substituting in lieu thereof the following:
'Ninth. Holders of the Common Stock may not take any action that is
required or permitted to be taken by them at an annual or special
meeting of such stockholders without a meeting, without prior notice
or without a vote, and the right of the holders of the Common Stock to
act by written consent in lieu of a meeting is expressly denied.
SECOND: That thereafter, pursuant to resolution of the Board of
Directors of the Corporation, a meeting of the stockholders of the Corporation
was duly called and held, upon notice in accordance with Section 222 of the
General Corporation Law of the State of Delaware, at which meeting the
necessary number of shares as required by statute and the Certificate of
Incorporation were voted in favor of the amendments.
THIRD: That said amendments were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to
be affixed and this Certificate to be signed by its_____________ and attested
to by its____________this_________day of____________, 1995.
FIRST HAWAIIAN, INC.
By: ____________________________________
Name:
Title:
(Corporate Seal)
ATTEST:
_____________________________
Name:
Title:
26
<PAGE> 28
First Hawaiian, Inc. THIS IS YOUR PROXY FORM
- -------------------------------------------------------------------------------
PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF FIRST HAWAIIAN, INC.
ANNUAL MEETING - APRIL 20, 1995
The undersigned hereby appoints R.F. McPHEE, R.J. PFEIFFER, and F. MATSUDA, and
each of them, each with full power of substitution, the proxies of the
undersigned to attend the Annual Meeting of Stockholders of FIRST HAWAIIAN,
INC. (the "Corporation") to be held at 9:30 o'clock A.M., Hawaiian Standard
Time, on April 20, 1995 in the 20th floor Dining Room of THE PLAZA CLUB, 900
Fort Street, Honolulu, Hawaii, and any adjournments thereof, and to vote at
said meeting and any adjournments thereof all shares of stock of the
Corporation standing in the name of the undersigned, as instructed on the
reverse side, and in their judgment on any other business which may properly
come before said meeting.
(To Be Continued And Signed On The Reverse Side)
[X] Please mark your
votes as in this
example
1. ELECTION [ ] FOR all nominess [ ] WITHOLD AUTHORITY
OF listed at right
DIRECTORS
NOMINEES: Julia Ann Frohlich, John A. Hoag, Bert T. Kobayashi, Jr.
Fred C Weyand and Robert C. Wo
*(INSTRUCTIONS: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below.)
2. Fix the total number of Directors at fifteen.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Amend the Corporation's Certificate of Incorporation to increase the number
of shares of authorized capital stock of the Corporation by authorizing
50,000,000 shares of a new class of preferred stock, par value $5.00.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Eliminate Article Ninth of the Certificate of Incoporation which upon any
increase in authorized capital stock of the Corporation requires the offer to
stockholders of preeemptive rights.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Add a new Article to the Certificate of Incorporation to eliminate the
ability of stockholders of the Corporation to take action by written
consent in lieu of a meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. Proposal to approve the election of Coopers & Lybrand L.L.P. as Auditor:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WILL BE VOTED UPON AS DIRECTED, BUT IF NO DIRECTION IS SPECIFIED, IT
WILL BE VOTED FOR PROPOSALS 1, 2, 3, 4, 5 AND 6.
Signature ____________ Date ________ Signature _________________ Date _________
IF HELD JOINTLY
NOTE: Stockholder(s) should sign above exactly as name(s) appears hereon. But
minor discrepancies in such signatures shall not invalidate their proxy;
if more than one Stockholder, all should sign.
