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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:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
-- Bancwest Corporation --
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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[LETTERHEAD OF BANCWEST]
March 15, 2000
Dear Fellow Stockholder:
On behalf of the Board of Directors of BancWest Corporation, I cordially
invite you to attend the 2000 annual meeting of stockholders of the Corporation.
The annual meeting will be held at 9:00 a.m., Hawaii Standard Time, on Thursday,
April 20, 2000, in the Board Room, 30th Floor, First Hawaiian Center, Honolulu,
Hawaii. The Corporation intends to alternate the site of its annual meetings
between San Francisco and Honolulu. Therefore, the annual meeting in the year
2001 will be in San Francisco.
As a convenience to our stockholders residing on the mainland, we also
invite stockholders to view the annual meeting via live video conference in the
Bank of the West Board Room, 25th Floor, 180 Montgomery Street, San Francisco,
California, beginning at 12:00 noon, Pacific Daylight Time. Stockholders present
at the San Francisco site will be able to view and listen to the annual meeting
as it occurs and also ask questions. However, stockholders will not be able to
cast votes at that site, nor withdraw any proxies they submitted previously.
We urge all stockholders to read the enclosed Notice of Annual Meeting of
Stockholders and Proxy Statement and to sign and return their proxies as
described in the Notice and Proxy Statement. You may also vote by telephone or
Internet by following the instructions on the enclosed proxy. It is important
that your views be represented, whether or not you are able to be present at
the annual meeting.
We appreciate your continued interest in BancWest Corporation, which is
reflected by the fact that so many of you cast your votes each year. We are
confident that you will continue to do so.
Sincerely,
Walter A. Dods, Jr.
Chairman and Chief Executive Officer
<PAGE>
[LETTERHEAD OF BANCWEST]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS:
The annual meeting of the stockholders of BancWest Corporation (the
"Corporation") will be held on April 20, 2000 at 9:00 a.m., Hawaii Standard
Time, (the "Annual Meeting") in the Board Room, 30th Floor, First Hawaiian
Center, 999 Bishop Street, Honolulu, Hawaii, for the following purposes:
1. For the holders of Common Stock to elect four Non-Class A Directors, each
to serve for a term of three years.
2. For the holders of Common Stock and Class A Common Stock to vote upon a
proposal to approve a policy addressing tax deductibility of awards to
certain executives under the Incentive Plan for Key Executives.
3. For the holders of Common Stock and Class A Common Stock to vote upon a
proposal to elect PricewaterhouseCoopers LLP as the Corporation's auditor.
4. For the holders of Class A Common Stock of the Corporation to elect three
Class A Directors, each to serve for a term of three years.
5. To transact such other business as may properly be brought before the
meeting and any adjournments thereof. The Corporation knows of no other
business to be brought before the meeting.
Only stockholders of record at the close of business on February 21, 2000,
will be entitled to notice of, and to vote at, the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS:
Herbert E. Wolff
Senior Vice President and Secretary
Dated: March 15, 2000
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. YOU MAY ALSO VOTE BY TELEPHONE OR INTERNET BY FOLLOWING THE
INSTRUCTIONS ON THE ENCLOSED PROXY. IF YOU ATTEND THE MEETING IN HONOLULU, YOU
MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON IF YOU WISH TO DO SO.
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[LETTERHEAD OF BANCWEST]
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of BancWest Corporation (the "Corporation") of proxies for
the holders of Common Stock of the Corporation to be used in the voting at the
annual meeting of stockholders of the Corporation to be held on April 20, 2000,
and any adjournments thereof (the "Annual Meeting").
The annual report of the Corporation, containing consolidated financial
statements as at and for the year ended December 31, 1999, 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 15, 2000.
BancWest Corporation is a holding company for Bank of the West, First
Hawaiian Bank, and FHL Lease Holding Company, Inc. The principal offices of the
Corporation are located at 999 Bishop Street, Honolulu, Hawaii 96813. The
Corporation's name was First Hawaiian, Inc. ("First Hawaiian") until November 1,
1998, the date of the merger (the "Merger") of BancWest Corporation ("Old
BancWest") into the Corporation.
RECORD DATE AND VOTING RIGHTS
The Board of Directors has fixed the close of business on February 21, 2000
as the record date (the "Record Date") for the determination of stockholders
entitled to receive notice of, and to vote at, the Annual Meeting. Only
stockholders of record as of the Record Date will be entitled to vote at the
Annual Meeting or any adjournment thereof. On the Record Date, the Corporation
had two classes of capital stock ("Voting Stock") outstanding: Common Stock, par
value $1.00 per share ("Common Stock"), and Class A Common Stock, par value
$1.00 per share ("Class A Common Stock"). As of the close of business on the
Record Date, the Corporation had outstanding 70,091,454 shares of Common Stock
and 54,539,936 shares of Class A Common Stock.
Each share of Voting Stock outstanding on the Record Date is entitled to one
vote on each matter submitted to a vote of stockholders at the Annual Meeting,
other than the election of directors. Only the holders of Common Stock will be
entitled to vote for the election of the Non-Class A Directors, and only the
holders of Class A Common Stock will be entitled to vote for the election of the
Class A Directors (the terms "Non-Class A Directors" and "Class A Directors" are
defined below under "Election of Directors"). Each outstanding share of Common
Stock (other than Common Stock owned by the holders of Class A Common Stock)
will be entitled to one vote in the election of Non-Class A Directors, and each
outstanding share of Class A Common Stock will be entitled to one vote in the
election of Class A Directors. Unless otherwise noted, the term "director"
includes the Non-Class A Directors and the Class A Directors.
VOTING AND REVOCABILITY OF PROXIES
Your vote is important and the Board of Directors urges you to exercise your
right to vote.
Stockholders of record may submit proxies by mail, by Internet, or by
telephone. Stockholders voting by mail should mark, date, sign and return the
proxy card in the envelope furnished. Stockholders voting by Internet or by
telephone should follow the instructions on the enclosed proxy card. Telephone
and Internet voting procedures are designed to verify stockholders through use
of a control number that is provided on each proxy card. Stockholders who hold
shares beneficially through a nominee (such as a bank or broker) may be able to
vote by telephone or the Internet if those services are offered by the nominee.
Proxies 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 by 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 of the Board of
Directors set forth in this Proxy Statement (that is, "for" the election of each
nominee for Non-Class A Director, "for" approval of the policy addressing tax
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deductibility of awards to certain executives under the Incentive Plan for Key
Executives, and "for" election of PricewaterhouseCoopers LLP as the
Corporation's auditor). If any other proposals are brought before the meeting
and submitted to vote, all proxies will be voted in accordance with the judgment
of the persons voting the respective proxies.
Until exercised at the Annual Meeting, proxies may be revoked or superseded
by submitting a proxy of a later date (whether by mail, Internet or telephone),
by written notification received by the Secretary of the Corporation prior to
the Annual Meeting or by attending the Annual Meeting in Honolulu and voting in
person. Attendance in person at the Annual Meeting does not of itself revoke a
proxy previously given, but any stockholder personally present at the Annual
Meeting in Honolulu may revoke any proxy previously given and vote his or her
shares in person.
PROXY SOLICITATION
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 such solicitation. The Corporation may reimburse brokers and
others holding shares in their names as nominees for their expenses in sending
proxy material to beneficial owners.
QUORUM, REQUIRED VOTES, ABSTENTIONS AND BROKER NON-VOTES
Holders of outstanding shares of capital stock of the Corporation
representing at least a majority of the votes entitled to vote at the Annual
Meeting, present in person in Honolulu or represented by proxy, will constitute
a quorum (a "Quorum") with respect to all matters other than the election of
directors. At least a majority of the shares of Common Stock entitled to vote at
the Annual Meeting, present in person or represented by proxy, shall constitute
a quorum of Common Stock for the election of Non-Class A Directors (a "Non-Class
A Quorum"). At least a majority of the shares of Class A Common Stock entitled
to vote at the Annual Meeting, present in person or represented by proxy, shall
constitute a quorum of the Class A Common Stock for the election of Class A
Directors (a "Class A Quorum"). The absence of a Non-Class A Quorum will not
prevent the election of Class A Directors, and the absence of a Class A Quorum
will not prevent the election of Non-Class A Directors.
Abstentions and broker "non-votes" are counted as present and entitled to
vote for purposes of determining a quorum. A broker "non-vote" occurs when a
nominee holding shares for a beneficial owner does not have discretionary voting
power with respect to that item and has not received instructions from the
beneficial owner.
The Non-Class A Directors will be elected by a plurality of the votes cast by
the holders of the Corporation's Common Stock entitled to vote thereon.
Abstentions and broker non-votes will not count as either "for" or "against" in
the tabulation of votes on Non-Class A Directors. Class A Directors will be
elected by a plurality of the votes cast by the holders of the Class A Common
Stock entitled to vote thereon.
Each other proposal to be considered at the meeting will require the
affirmative vote of the holders of a majority in voting power of shares present
in person or by proxy and entitled to vote, with the Common Stock and Class A
Common Stock voting together. For these purposes, any broker non-votes on a
proposal will be treated as not entitled to vote and therefore will not affect
the outcome. Abstentions will have the effect of negative votes.
ELECTION OF DIRECTORS
The members of the Board of Directors of the Corporation (the "Board of
Directors") are divided into three classes, one of which is elected at each
annual meeting of stockholders to hold office for a three-year term and until
their respective successors are elected and duly qualified.
The Board of Directors has fixed the number of directors to serve on the
Board of Directors at 20. Based upon the ratio of the number of shares of Class
A Common Stock issued and outstanding to the total number of shares of common
stock issued and outstanding, the holders of shares of the Class A Common Stock
are entitled to elect nine of the 20 directors of the Corporation (the "Class A
Directors"). The holders of Common Stock outstanding on the Record Date (other
than persons who are also holders of Class A Common Stock) are entitled to elect
the remaining 11 directors of the Corporation (the "Non-Class A Directors").
The terms of four Non-Class A Directors will expire at the Annual Meeting,
and the current Non-Class A
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Directors acting as a committee of the Board of Directors have nominated the
four persons set forth below for election for a term of three years expiring at
the annual meeting of the stockholders in 2003. The terms of three Class A
Directors will expire at the Annual Meeting, and the holders of the Class A
Common Stock have designated the three persons set forth below for election to a
term of three years expiring at the annual meeting of the stockholders in 2003.
Proxies will be voted for election of each nominee listed below, all of whom
are now members of the Board of Directors, unless (with respect to any nominee)
the authority to vote for such nominee has been withheld in the applicable
proxy. In the event, which is not now anticipated, that any of such nominees
should become unavailable to serve for any reason, shares for which proxies have
been received will be voted for a substitute nominee selected by a committee
comprised of current Non-Class A Directors unless the number of directors
constituting the full Board of Directors is reduced.
Nominees for Non-Class A Directors for Terms Expiring at the 2003 Annual Meeting
A committee comprised of the current Non-Class A Directors has nominated the
persons set forth below for election as Non-Class A Directors at the Annual
Meeting, each for a three-year term expiring at the 2003 annual meeting. The
principal occupations of, and certain other information regarding, these
nominees are set forth below.
John W. A. Buyers, 72, has been a director of the Corporation since 1994 and
a director of First Hawaiian Bank since 1976. He has been Chairman of the Board
and Chief Executive Officer of C. Brewer and Company, Limited, a diversified
agribusiness and specialty food company, since 1992. From 1982 to 1992, he was
Chairman and President of C. Brewer and Company, Limited, Hawaii's oldest
company. Since 1986, he has been Chairman of ML Resources, Inc., the managing
general partner of ML Macadamia Orchards, L.P., a master limited partnership
traded on the New York Stock Exchange. The partnership is engaged in
agribusiness. From 1993 to 1999, he served as Chairman and as a director of
Hawaii Land and Farming Co., Inc., a publicly traded real estate development
company. He is also a director of John B. Sanfilippo & Sons, Inc., a nut
marketing company located in Elk Grove Village, Illinois.
David M. Haig, 48, has been a director of the Corporation since 1989 and a
director of First Hawaiian Bank since 1983. Mr. Haig is a beneficiary and, since
1982, has been a trustee, under the Will and of the Estate of S.M. Damon. He has
served as Chairman of the Estate of S.M. Damon since 1993.
John A. Hoag, 67, has been a director of the Corporation since 1991 and a
director of First Hawaiian Bank since October 1989. He was President of the
Corporation from 1991 until April 1995 and was an Executive Vice President of
the Corporation from 1982 to 1991. From 1989 until June 1994, Mr. Hoag was
President of First Hawaiian Bank. From that date until his retirement in June
1995, he was Vice Chairman of First Hawaiian Bank. Mr. Hoag is Chairman of the
Board of Hawaii Reserves, Inc., a land management corporation that is a
subsidiary of Deseret Management Corporation.
John K. Tsui, 61, has been a director of the Corporation since July 1995 and
a director of First Hawaiian Bank since July 1994. He has been Vice Chairman and
Chief Credit Officer of the Corporation since November 1998. He was President of
the Corporation from April 1995 through October 1998. He became President and
Chief Operating Officer of First Hawaiian Bank in July 1994 and Vice Chairman of
Bank of the West in November 1998. He was Executive Vice President of Bancorp
Hawaii, Inc. (now known as Pacific Century Financial Corporation) from 1986 to
June 1994 and Vice Chairman of Bank of Hawaii from 1984 to June 1994.
The Board of Directors recommends a vote FOR the above nominees.
Designees for Class A Directors for Terms Expiring at the 2003
Annual Meeting
The holders of the Class A Common Stock have designated the persons set forth
below for election as Class A Directors at the Annual Meeting for a three-year
term expiring at the 2003 annual meeting. The principal occupations of, and
certain other information regarding, these designees are set forth below.
Michel Larrouilh, 64, has been a director of the Corporation since November
1998 and a director of Bank of the West since February 1984. He was Chief
Executive Officer of Bank of the West from February 1984 to December 1995. He
was Chairman and Chief Executive Officer of Old BancWest from January 1996 to
December 1997. He was Chairman and Advisor to the Chief Executive Officer of Old
BancWest from January 1998 to October 1998.
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Joel Sibrac, 52, has been a director of the Corporation since November 1998
and a director of Bank of the West since January 1995. He has been Vice Chairman
of the Corporation since November 1998. He has been Senior Executive Vice
President, Commercial Banking Group, of Bank of the West since 1996. He was
General Manager, North American Desk, of Banque Nationale de Paris ("BNP") from
1994 to 1996 and General Manager of BNP Italy from 1990 to 1994. He has been
with BNP since 1974.
Jacques Henri Wahl, 67, has been a director of the Corporation since November
1998 and a director of Bank of the West since July 1982. He has been a member of
the Managing Committee of the BNP Group, Director and Senior Advisor to the
Chief Executive Officer of BNP since January 1997. He was Vice Chairman of BNP
and Chairman of Banque Nationale de Paris Intercontinentale from 1993 to 1996.
He was President and Chief Operating Officer of BNP from 1982 to 1993. He has
been with BNP since 1982.
Directors Continuing in Office
Set forth below are the principal occupations of, and certain other
information regarding, the directors whose terms of office will continue after
the Annual Meeting. The terms of such directors will expire at the annual
meeting of stockholders held in the year indicated parenthetically after such
director's name.
Non-Class A Directors
Walter A. Dods, Jr., 58, (2002) has been a director of the Corporation since
1983, a director of First Hawaiian Bank since 1979, and a director of Bank of
the West since November 1998. He has been Chairman of the Board and Chief
Executive Officer of the Corporation and First Hawaiian Bank since September
1989 and Vice Chairman of Bank of the West since November 1998. He was President
of the Corporation from March 1989 to March 1991. He was President of First
Hawaiian Bank from November 1984 to October 1989. He was an Executive Vice
President of the Corporation from 1982 to 1989. He has been with First Hawaiian
Bank since 1968. He is a trustee under the Will and of the Estate of S.M. Damon
and a director of Alexander & Baldwin, Inc., a diversified ocean transportation,
property development and management, and food products company.
Dr. Julia Ann Frohlich, 59, (2001) has been a director of the Corporation
since 1992 and a director of First Hawaiian Bank since August 1991. She was a
director of First Hawaiian Creditcorp, Inc. from 1990 to June 1998 and was a
director of FHL Lease Holding Company, Inc. from 1990 to June 1997. She has been
President of the Blood Bank of Hawaii since 1985.
Paul Mullin Ganley, 60, (2002) has been a director of the Corporation since
1991 and a director of First Hawaiian Bank since 1986. He is a trustee under the
Will and of the Estate of S.M. Damon and a partner in the law firm of Carlsmith
Ball, Honolulu, Hawaii.
Bert T. Kobayashi, Jr., 60, (2001) has been a director of the Corporation
since 1991 and a director of First Hawaiian Bank since 1974. He is a principal
of the law firm of Kobayashi, Sugita & Goda, Honolulu, Hawaii. He is a director
of Schuler Homes, Inc., a land development company.
Fujio Matsuda, 75, (2002) has been a director of the Corporation since 1987
and a director of First Hawaiian Bank since 1985. Since July 1996, he has been
Chairman, Pacific International Center for High Technology Research. He was
President of the Japan-America Institute of Management Science from September
1994 to June 1996. He was Executive Director of the Research Corporation of the
University of Hawaii from 1984 until 1994, and he was the President of the
University of Hawaii from 1974 to 1984.
Fred C. Weyand, 83, (2001) has been a director of the Corporation since 1986
and a director of First Hawaiian Bank since 1981. He was Vice President of the
Corporation from 1976 to 1982, Senior Vice President of First Hawaiian 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 as a member of the Joint Chiefs of Staff from 1974 to
1976. He is a trustee under the Will and of the Estate of S.M. Damon.
Robert C. Wo, 74, (2001) was a director of the Corporation from 1974 to 1989
and again since 1992 and has been a director of First Hawaiian Bank since 1963.
He has been President and Secretary of BJ Management Corporation, 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.
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Class A Directors
Jacques Ardant, 47, (2002) has been a director of the Corporation since
November 1998 and a director of Bank of the West since September 1998. He has
been Director for International Banking and Finance, North America Area, BNP
since April 1997. He was Deputy General Manager of BNP Greece from 1994 to April
1997. He was Secretary Generale of BNP Italy from 1989 to 1994. He has been with
BNP since 1978.
Robert A. Fuhrman, 75, (2001) has been a director of the Corporation since
November 1998 and a director of Bank of the West since August 1981. He has been
Chairman of the Board of Directors of Bank of the West since April 1991. He is
the retired Vice Chairman, President and Chief Operating Officer of Lockheed
Corporation.
Pierre Mariani, 43, (2001) was elected in December 1999 to succeed Mr. Vivien
Levy-Garboua as a director of the Corporation and of Bank of the West. Mr.
Mariani is Executive Vice President, International Retail Banking, of BNP. He
served as Senior Advisor and Chief of Staff of the Minister of Budget and
Government Spokesman from 1993 to 1995; Chief Executive Officer and director of
Societe D'investissements Immobiliers Et De Gestion (SEFIMEG), a major French
property company, from 1995 to 1996; and Chief Executive Officer and director of
BANEXI, the investment bank of BNP, from 1996 to 1999.
Yves Martrenchar, 42, (2002) has been a director of the Corporation since
November 1998 and a director of Bank of the West since March 1994. He has been
the Executive Vice President for Products and Markets at BNP since October 1996.
He was head of private banking for the branch system of BNP in France from 1993
to October 1996. He has been with BNP since 1980.
Don J. McGrath, 51, (2002) has been a director of the Corporation since
November 1998, a director of Bank of the West since July 1989, and a director of
First Hawaiian Bank since November 1998. He has been President and Chief
Operating Officer of the Corporation since November 1998, President and Chief
Executive Officer of Bank of the West since January 1996 and Vice Chairman of
First Hawaiian Bank since November 1998. He was President and Chief Operating
Officer of Bank of the West from 1991 to 1996. He has been with Bank of the West
since 1975.
Rodney R. Peck, 54, (2001) has been a director of the Corporation since
November 1998 and a director of Bank of the West since July 1990. He is a Senior
Partner with the law firm of Pillsbury Madison & Sutro LLP, San Francisco,
California.
COMMITTEES, ATTENDANCE AND COMPENSATION OF THE BOARD
Committees of the Board
The Board of Directors of the Corporation has an Audit Committee and an
Executive Compensation Committee. The Board of Directors does not have a
standing nominating committee. However, Non-Class A Directors may be nominated
by a majority vote of a committee comprised of all the Non-Class A Directors
then in office.
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 Plans, and the Deferred Compensation Plan. It reviews the performance
and approves the salary of the Corporation's Chief Executive Officer and reviews
the performance and salaries of other senior management officers of the
Corporation and its subsidiaries. The Committee also makes recommendations to
the Board of Directors with respect to the appropriate senior management
compensation structure. The Committee met six times in 1999. Its members during
1999 were Fujio Matsuda (Chairman), Dr. Julia Ann Frohlich, Robert A. Fuhrman,
David M. Haig and Michel Larrouilh.
The Audit Committee, which met five times during 1999, determines on behalf
of the Board whether the performance and examination of the Corporation's
independent public accounting firm and 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
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internal auditors and management's responses to their audit reports and
recommendations. It recommends the independent public accounting firm proposed
to be selected as auditor of the Corporation. It also reviews the Corporation's
reports to stockholders and other financial statements of the Corporation. The
Committee reviewed and approved the 1999 audit plan. The members of the Audit
Committee during 1999 were John A. Hoag (Chairman), John W.A. Buyers and Robert
A. Fuhrman.
Attendance at Meetings
The Board of Directors met 12 times in 1999. Each incumbent Director attended
75% or more of the combined total number of meetings held during such person's
service in 1999 on the Board of Directors and its committees.
Compensation of Directors
In 1999, 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 such non-employee members of the Board received a fee of $800
for each Board meeting attended and $700 for each committee meeting attended, as
well as reimbursement for transportation and lodging expenses. Directors who are
also employees of the Corporation or one of its subsidiaries do not receive
board or committee fees or retainers.
The Corporation has a Directors' Retirement Plan for directors of the
Corporation and First Hawaiian Bank who are not employed by the Corporation or
its affiliates and who are not covered by any of the Corporation's employee
retirement programs. Following retirement from one of these boards after
reaching age 55 and at least ten years of service as director, the retired
director or his or her beneficiary will be entitled to receive monthly payments
for a ten-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.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and persons who own more than
ten percent of any class of the Corporation's capital stock, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC") and the New York Stock Exchange. Based on the Corporation's records and
certain written representations received by the Corporation, the Corporation
believes that during 1999 all such filing requirements applicable to its
directors, executive officers and ten-percent stockholders were complied with,
except that BNP filed one late report covering one transaction.
SECURITY OWNERSHIP OF DIRECTORS,
NAMED EXECUTIVE OFFICERS AND OTHERS
The beneficial ownership of all classes of Voting Stock of the Corporation
for each nominee for director, each current director and the named executive
officers of the Corporation, all of the current directors and executive officers
as a group, as well as all persons known by the Corporation to be the beneficial
owner of more than 5% of the Common Stock or the Class A Common Stock (each a
"5% Owner"), is shown in the following table. Each of the individuals or groups
listed below owns less than one percent of the outstanding shares and voting
power of any class of Voting Stock, unless otherwise indicated. Each individual
has sole voting and investment power with respect to the shares he or she
beneficially owns, unless otherwise reflected in a footnote. The table is based
upon information furnished by each such person or, in the case of each 5% Owner,
based upon a Schedule 13D or 13G filed with the SEC. All listings are with
respect to the Common Stock, except the listing for BNP pertains to the Class A
Common Stock. All information is, unless otherwise indicated, as of February 21,
2000. Percentages are based upon the number of shares of Common Stock or Class A
Common Stock outstanding on such date, plus, where applicable, the number of
shares the indicated person or group had a right to acquire within 60 days of
such date.
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<TABLE>
<CAPTION>
Shares Beneficially Percent
Owned(1) of Class
<S> <C> <C> <C>
Nominees for Non-Class A Directors
- ----------------------------------
John W. A. Buyers 10,985 *
David M. Haig 15,852,814(2) 22.62%
John A. Hoag 78,106(3) *
John K. Tsui 465,399(4) *
Designated Class A Directors
- ----------------------------
Michel Larrouilh 8,000(5) *
Joel Sibrac 8,151(5) *
Jacques Henri Wahl 0(5)(6) *
Directors Continuing in Office
- ------------------------------
Walter A. Dods, Jr. 17,087,773(7) 24.20%
Dr. Julia Ann Frohlich 6,450 *
Paul Mullin Ganley 15,871,915(8) 22.64%
Bert T. Kobayashi, Jr. 13,107(9) *
Fujio Matsuda 8,322 *
Fred C. Weyand 15,874,191(10) 22.65%
Robert C. Wo 205,651(11) *
Jacques Ardant 0(5) *
Robert A. Fuhrman 4,000 *
Pierre Mariani 0(5) *
Yves Martrenchar 0(5) *
Don J. McGrath 208,748(5) *
Rodney R. Peck 400 *
Other Named Executive Officers
- ------------------------------
Donald G. Horner 346,664(12) *
Howard H. Karr 374,246(13) *
All nominees, designees, directors and
executive officers as a group (24 persons) 19,159,201 26.91%
5% Owners of Common Stock
- -------------------------
David M. Haig, Fred C. Weyand,
Paul Mullin Ganley and Walter A. Dods, Jr.,
as trustees under the Will and of the
Estate of S.M. Damon, 999 Bishop Street,
Honolulu, Hawaii 96813 15,800,000(14) 22.54%
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071 4,919,000(15)(16) 7.02%
The Income Fund of America, Inc.
333 South Hope Street
Los Angeles, California 90071 3,800,000(15)(17) 5.42%
Trust and Investments Division,
First Hawaiian Bank,
P.O. Box 3200,
Honolulu, Hawaii 96847 4,356,657(18) 6.22%
Alexander &Baldwin, Inc.
822 Bishop Street
Honolulu, Hawaii 96813 3,385,788 4.83%
5% Owners of Class A Common Stock
- ---------------------------------
Banque Nationale de Paris
16, Boulevard des Italiens
75009 Paris, France 56,074,874(19) 100%
</TABLE>
*The percentage of shares beneficially owned, including shares that can be
acquired within 60 days from February 21, 2000 through the exercise of stock
options, does not exceed 1% of the shares currently outstanding.
9
<PAGE>
Notes to Security Ownership Table:
Note (1) All amounts and percentages refer to Common Stock, unless otherwise
indicated. Data includes the number of shares of Common Stock that may
be acquired through exercise of stock options within 60 days from
February 21, 2000 for the following: Mr. Dods, 529,175; Mr. McGrath,
22,274; Mr.Tsui, 258,815; Mr. Horner, 133,496; Mr. Karr, 151,985; Mr.
Sibrac, 7,551; all directors, nominees, designees, and executive
officers as a group: 1,117,292.
Note (2) Mr. Haig's reported beneficial ownership of Common Stock includes
15,800,000 shares owned by the Estate of S. M. Damon as to which Mr.
Haig shares voting and investment powers. He is beneficiary of an HR-
10 plan which holds 12,000 shares of Common Stock as to which he has
sole voting and investment powers.
Note (3) Mr. Hoag's reported beneficial ownership of Common Stock includes
38,040 shares in his wife's revocable living trust as to which Mr.
Hoag disclaims beneficial ownership and 3,790 shares held jointly with
his wife.
Note (4) Mr. Tsui's reported beneficial ownership of Common Stock includes
4,000 shares held as trustee of his daughter's trust, as to which he
holds sole voting and investment powers; 4,000 shares held in his
wife's trust; and 166,952 shares owned by First Hawaiian Foundation,
as to which Mr. Tsui holds shared voting and investment powers. Mr.
Tsui disclaims beneficial ownership of the shares owned by his wife's
trust and First Hawaiian Foundation. Mr. Tsui's reported stock options
include an option to acquire 40,340 shares of Common Stock held by the
aforesaid trust for his daughter.
Note (5) The designated Class A Directors and Class A Directors continuing in
office hold a beneficial interest in an aggregate of 39,400 shares of
common stock of BNP, including the number of shares that may be
acquired through exercise of stock options within 60 days from
February 21, 2000.
Note (6) Mr. Wahl is a director of BNP. He disclaims beneficial ownership of
shares held by BNP, described in Note (19).
Note (7) Mr. Dods' reported beneficial ownership of Common Stock includes 1,848
shares held in his wife's individual retirement account as to which
Mr. Dods disclaims beneficial ownership; 15,800,000 shares owned by
the Estate of S. M. Damon as to which Mr. Dods shares voting and
investment powers; and 166,952 shares owned by First Hawaiian
Foundation, as to which Mr. Dods holds shared voting and investment
powers. Mr. Dods is a director of Alexander & Baldwin, Inc., which
owns 3,385,788 shares of Common Stock of the Corporation. Mr. Dods
disclaims beneficial ownership of the shares owned by Alexander &
Baldwin, Inc. and First Hawaiian Foundation.
Note (8) Mr. Ganley's reported beneficial ownership of Common Stock includes
15,800,000 shares owned by the Estate of S.M. Damon as to which Mr.
Ganley shares voting and investment powers; 71,858 shares in his
revocable living trust, a money purchase pension plan and an
individual retirement account as to which he has sole voting and
investment powers; and 57 shares for which he has shared voting and
investment powers.
Note (9) Mr. Kobayashi's reported beneficial ownership of Common Stock includes
4,155 shares held in his wife's IRA account and revocable living trust
as to which he disclaims beneficial ownership.
Note (10) Mr. Weyand's reported beneficial ownership of Common Stock includes
15,800,000 shares owned by the Estate of S.M. Damon as to which he
shares voting and investment powers and 32,191 shares in his wife's
revocable living trust as to which he shares voting and investment
powers.
Note (11) Mr. Wo's reported beneficial ownership of Common Stock includes 16,000
shares in the Betty and Bob Wo Foundation as to which he shares voting
and investment powers, 600 shares held jointly with his wife, and
174,000 shares held by C.S. Wo & Sons, Ltd., as to which he shares
voting and investment powers.
Note (12) Mr. Horner's reported beneficial ownership of Common Stock includes
166,952 shares owned by First Hawaiian Foundation, as to which Mr.
Horner holds shared voting and investment powers. Mr. Horner disclaims
beneficial ownership of the shares owned by First Hawaiian Foundation.
Note (13) Mr. Karr's reported beneficial ownership of Common Stock includes 156
shares owned by his wife directly or as custodian and 166,952 shares
owned by First Hawaiian Foundation, as to which Mr. Karr holds shared
voting and investment powers. Mr. Karr disclaims beneficial ownership
of the shares owned by his wife and First Hawaiian Foundation.
10
<PAGE>
Note (14) Messrs. Haig, Weyand, Ganley and Dods are directors of the
Corporation. Mr. Dods is also the Chairman and Chief Executive Officer
of the Corporation. The trustees have shared voting and investment
powers as to shares owned by the Estate of S.M. Damon.
Note (15) Based on a Schedule 13G filed for the period ended December 31, 1999.
Note (16) Although deemed to hold sole dispositive power with respect to these
shares as a result of acting as an investment advisor to various
investment companies, Capital Research and Management Company
disclaims beneficial ownership of these shares.
Note (17) The Income Fund of America, Inc., an investment company advised by
Capital Research and Management Company, has sole voting power with
respect to these shares.
Note (18) The shares held by the Trust and Investments Division in fiduciary
accounts include: 1,886,829 shares as to which it has sole voting
power and 1,819,027 shares as to which it has sole investment power;
2,230,848 shares as to which it has shared voting power and 2,276,150
shares as to which it has shared investment power; 238,979 shares as
to which sole voting power is retained by the settlors of the trusts;
and 261,479 shares as to which sole investment power is held by
outside investment advisers.
Note (19) Represents 45% of outstanding Voting Stock. BNP holds sole voting and
dispositive power with respect to 54,993,962 shares (including
53,459,024 Class A shares and 1,534,938 shares of Common Stock
convertible by BNP into an equivalent number of Class A shares), and
shared voting and dispositive power with respect to 1,080,912 Class A
shares owned by an indirect wholly owned subsidiary of BNP.
EXECUTIVE OFFICERS
Listed below are the executive officers of the Corporation, with their ages
and positions and offices held with the Corporation.
<TABLE>
<CAPTION>
Name, Age Positions and Offices With the Corporation
- ----------------------- ------------------------------------------
Walter A. Dods, Jr., 58 Please see "Election of Directors -- Directors Continuing in Office" (page 6)
Don J. McGrath, 51 Please see "Election of Directors -- Directors Continuing in Office" (page 6)
John K. Tsui, 61 Please see "Election of Directors -- Nominees for Non-Class A Directors for
<S> <C>
Terms Expiring at the 2003 Annual Meeting" (page 5)
Joel Sibrac, 52 Please see "Election of Directors -- Designees for Class A Directors for Terms
Expiring at the 2003 Annual Meeting" (page 5)
Howard H. Karr, 57 Executive Vice President and Chief Financial Officer of the Corporation
since November 1998; Executive Vice President and Treasurer of the
Corporation from 1989 to October 1998; Vice Chairman of First Hawaiian
Bank since 1997; Vice Chairman, Chief Financial Officer and Treasurer of
First Hawaiian Bank from September 1993 to 1997. Mr. Karr has been with
First Hawaiian Bank since 1973.
Douglas C. Grigsby, 47 Executive Vice President and Treasurer of the Corporation since November
1998 and Chief Financial Officer of Bank of the West since 1989. Mr. Grigsby
has been with Bank of the West since 1977.
Bernard Brasseur, 61 Executive Vice President and Risk Manager of the Corporation since
November 1998; Risk Manager of Bank of the West since 1983; Vice
Chairman of First Hawaiian Bank since November 1998. Mr. Brasseur has
been with BNP since 1966, and Bank of the West since 1983.
Donald G. Horner, 49 Executive Vice President of the Corporation since 1989; Vice Chairman of
First Hawaiian Bank since July 1994; Executive Vice President of First
Hawaiian Bank from 1993 to 1994. Mr. Horner has been with First Hawaiian
Bank since 1978.
</TABLE>
11
<PAGE>
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 of the
Corporation for the years ended December 31, 1999, 1998 and 1997. All figures
concerning shares and options have been adjusted to reflect a two-for-one stock
split in December 1999.
<TABLE>
<CAPTION>
Long-Term Compensation
----------------------
Annual Compensation (1) Awards Payouts
-------------------------------------------- -------------- --------
Name Other
and Annual Restricted Securities All Other
Principal Compen- Stock Underlying LTIP Compen-
Position Year Salary Bonus (2) sation(3) Awards (4) Options Payouts (5) sation(6)
- ------------------- ----- -------- ---------- --------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Walter A. Dods, Jr. 1999 $927,188 $ 607,493 -- -- 133,100 $280,933 $39,087
Chairman, Chief 1998 $860,000 $ 547,189 -- -- 132,300 -- $69,349
Executive Officer 1997 $851,167 $ 508,483 -- -- 160,000 -- $76,268
and Director
Don J. McGrath 1999 $650,016 $ 390,010 -- -- 89,098 -- $ 8,485
President, Chief 1998 $108,336 $ 268,818(7) -- 173,474(8) 55,442 -- --
Operating Officer
and Director*
John K. Tsui 1999 $609,721 $ 280,875 $ 5,637 -- 73,900 $131,026 $ 5,892
Vice Chairman, 1998 $573,000 $ 274,310 $ 3,256 -- 73,460 -- $21,413
Chief Credit 1997 $566,334 $ 278,187 $ 351 -- 100,000 -- $25,462
Officer and
Director
Howard H. Karr 1999 $370,643 $ 163,940 -- -- 35,288 $ 55,860 $ 3,765
Executive Vice 1998 $342,000 $ 147,744 -- -- 35,080 -- $13,935
President and 1997 $337,834 $ 138,058 -- -- 50,000 -- $16,349
Chief Financial
Officer
Donald G. Horner 1999 $337,523 $ 149,864 $10,650 -- 31,986 $ 50,633 $ 2,062
Executive Vice 1998 $310,000 $ 132,240 $ 7,527 -- 31,800 -- $11,817
President 1997 $305,833 $ 123,405 $ 1,581 -- 50,000 -- $11,080
</TABLE>
Notes to Summary Compensation Table:
*Mr. McGrath became an executive officer and director of the Corporation on
November 1, 1998, the effective date of the Merger.
Note (1) Includes amounts earned but deferred under the Corporation's Deferred
Compensation Plan (the "DCP").
Note (2) Amounts are reported for the year in which earned, even if paid in the
following year. Amounts include cash payments under the Corporation's
Cash Bonus Plan for 1998 and 1997 and cash payments under the
Corporation's Incentive Plan for Key Executives ("IPKE") for 1999, 1998
and 1997. The Bonus Plan was discontinued commencing with the January
1, 1999 plan year.
Note (3) Reported amount represents above-market interest earned on amounts
deferred under the DCP. The aggregate amount of perquisites and other
personal benefits received as compensation by each of the named
executive officers in each of the three most recent years was less than
$50,000 and 10% of Salary and Bonus.
Note (4) The Executive Compensation Committee may, at its sole discretion, make
awards under the IPKE and 1998 SIP (as defined below) in restricted
Common Stock. No unvested awards of restricted Common Stock are
outstanding to Messrs. Dods, Tsui, Karr or Horner. Mr. McGrath holds
173,474 shares of restricted Common Stock, which on December 31, 1999
had a market value of $3,382,743. These restricted shares pay
dividends, and will vest on November 1, 2000.
12
<PAGE>
Note (5) Because the Corporation did not achieve its minimum performance
standards for the three-year cycle that ended December 31, 1997, no
amounts were paid under the Corporation's Long-Term Incentive Plan
("LTIP") for such cycle. For the reasons described under "Long-Term
Incentive Plans--Awards in Last Fiscal Year" (page 15), a payment equal
to one-third of the maximum value attainable for the 1998-2000
performance cycle was made to participants in the LTIP (based upon 1998
compensation levels) in January 1999. Messrs. Dods, Tsui, Karr and
Horner waived all other payments under the LTIP change-in-control
provisions arising out of the Merger.
Note (6) Includes (i) premiums for life insurance, including "gross-up" for
income taxes; (ii) amounts related to split-dollar insurance agreements
as discussed below; and (iii) contributions for the account of the
above-named executive officers to the Corporation's Profit Sharing Plan
("Profit Sharing Plan") and amounts credited to the accounts of such
executive officers under the profit-sharing portion of the
Corporation's nonqualified, unfunded Supplemental Executive Retirement
Plan (the "SERP") that provides benefits that would have been provided
under the Profit Sharing Plan but for Internal Revenue Code (the
"Code") restrictions on such benefits. (In determining profit-sharing
benefits under the SERP, the participant's covered compensation
includes base pay, commissions, overtime, short-term incentive pay, and
the annual cash bonus earned under IPKE; a participant's covered
compensation does not include the cash portion of the Corporation's
Cash Bonus Plan.) Profit-sharing contributions to the Profit Sharing
Plan were discontinued commencing with the January 1, 1999 plan year.
Accordingly, the Profit Sharing Plan column in the table below includes
only 401(k) matching contributions, if any, made on the executive's
behalf. Details of All Other Compensation received by the above-named
executive officers for 1999 are as follows:
<TABLE>
<CAPTION>
Profit
Sharing Plan
Life Split-Dollar (including SERP)
Name Insurance Insurance Contributions Total
- ---------------------------------- ---------- ----------- ---------------- -------
<S> <C> <C> <C> <C>
Dods............................... $32,483 $6,604 -- $39,087
McGrath............................ -- $3,485 $5,000 $ 8,485
Tsui............................... -- $5,892 -- $ 5,892
Karr............................... -- $3,765 -- $ 3,765
Horner............................. -- $2,062 -- $ 2,062
</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 insurance 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 Life Insurance column. The
death benefit under this policy is deducted from the death benefit
under Mr. Dods' split-dollar policy.
Note (7) The 1998 bonus amount shown for Mr. McGrath is the annual bonus he
earned for all of calendar year 1998 under the Bank of the West Senior
Management Incentive Plan, although he was an executive officer of the
Corporation only from November 1, 1998.
Note (8) These restricted shares were awarded pursuant to requirements of the
Merger and were not part of a recurring compensation arrangement.
13
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth 1999 option grants (as adjusted to reflect a
two-for-one stock split in December 1999) to each of the named executive
officers under the Corporation's 1998 Stock Incentive Plan ("1998 SIP") and the
potential realizable values of such options.
<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
Options Employees in Base Price Expiration
Name Granted (3) Fiscal Year Per Share Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
- -------------------- ------------ ------------- ---------- ---------- ---------- ----------
Dods................ 133,100 14.3% $20.065 3/03/09 $1,679,558 $4,256,331
McGrath............. 89,098 9.6% $20.065 3/03/09 $1,124,307 $2,849,215
Tsui................ 73,900 7.9% $20.065 3/03/09 $ 932,527 $2,363,207
Karr................ 35,288 3.8% $20.065 3/03/09 $ 445,291 $1,128,455
Horner.............. 31,986 3.4% $20.065 3/03/09 $ 403,624 $1,022,862
</TABLE>
Notes to Option Grants in Last Fiscal Year:
Note (1) Options were granted at 100% of the market value of the stock on the
date of the grant. The options vest 25% on the first anniversary of the
grant and 25% per year thereafter. No option may be exercised prior to
vesting (and in no event earlier than six months after the date of
grant) or later than ten 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 death, disability or
retirement, the Executive Compensation Committee has the discretion to
accelerate the vesting of options previously granted. The 1998 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 Common Stock 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 1998 SIP cannot be terminated,
amended, or modified to: (a) increase the total amount of shares which
may be issued except as provided in the 1998 SIP; (b) change the class
of eligible employees; (c) materially increase the cost of the 1998 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. The 1998 SIP and the
Corporation's 1991 Stock Incentive Plan ("1991 SIP") provide that in
the event of a change in control, as defined in each plan, all options
granted and held at least six months become immediately exercisable and
vested.
Note (2) The potential realizable value is reported netof 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 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 represents reload options.
14
<PAGE>
Option Values at December 31, 1999
The following table reflects the securities underlying unexercised options
held by the named executive officers and the value of these options as of
December 31, 1999:
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
December 31, 1999 December 31, 1999
Exercisable/ Exercisable/
Unexercisable Unexercisable
Name (#) ($)
--------------------------------------- --------------------- ------------------------
<S> <C> <C>
Dods.................................. 495,900/133,100 $1,656,900/$75,202
McGrath............................... 0/144,540 $ 0 /$50,340
Tsui.................................. 240,340/ 73,900 $ 684,320/$41,754
Karr.................................. 138,600/ 35,288 $ 457,520/$19,938
Horner................................ 125,500/ 31,986 $ 400,710/$18,072
</TABLE>
No options were exercised by the named executive officers in 1999.
Ten-Year Option Repricings
For the year ended December 31, 1999, there was no adjustment or amendment to
the exercise price of the stock options previously awarded, other than
adjustments made pursuant to antidilution provisions in connection with a two-
for-one stock split.
Long-Term Incentive Plans--Awards in Last Fiscal Year
The LTIP applies to a group of key executives approved by the Executive
Compensation Committee, which is much smaller than the group eligible for IPKE
and 1998 SIP awards. The LTIP provides incentive compensation to participants
based on the Corporation's ability to sustain a target level of performance over
a three-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 performance cycle, the Executive
Compensation Committee designates which key executives will be eligible to
participate in the LTIP for the cycle. Additional key executives could be
declared eligible during the cycle. The Executive Compensation Committee also
establishes target amounts of individual payouts and corporate performance
standards to be met over the performance cycle.
The Merger constituted a "change in control" within the definition of the
LTIP (an "LTIP change in control"). Upon the occurrence of an LTIP change in
control, the LTIP provides that the maximum value attainable by participants
will be deemed to have been fully earned for the entire performance cycle as of
the effective date of the LTIP change in control, regardless of the
Corporation's actual financial performance. Based on actual performance to
November 1, 1998, it did not appear that any payments would be made for either
of the three-year performance cycles that began in 1996 and 1997. Implementation
of the LTIP change in control provisions, on the other hand, would have resulted
in payments under the LTIP for the three-year performance cycles that began on
January 1, 1996, 1997, and 1998 even though the Corporation was the surviving
corporation in the Merger. The Corporation also recognized that because of the
Merger, the performance goals that were established for the LTIP for the three-
year performance cycle that began January 1, 1998 would no longer be
appropriate. As a result, the Executive Compensation Committee amended the LTIP
to (i) specify that the Merger would not be considered an LTIP change in
control, and (ii) pay the maximum value attainable to each participant for one
year of the three-year performance cycle that began January 1, 1998. A payment
equal to one-third of the maximum value attainable for the three-year 1998-2000
performance cycle (based on 1998 compensation levels) was made in January 1999
to participants who waived LTIPchange in control rights arising from the Merger.
To reflect consummation of the Merger, the Executive Compensation Committee
subsequently established new target amounts and corporate performance standards
and designated eligible participants for the performance cycles (i) commencing
January 1, 1999 and ending on December 31, 2000 ("1999-2000 Performance Cycle")
and (ii) commencing January 1, 1999 and ending on December 31, 2001 ("1999-2001
Performance Cycle").
Under the formula for the 1999-2000 Performance Cycle, LTIP payouts for
eligible executives are based on
15
<PAGE>
target percentages (ranging from 10% to 50%) of each participant's average base
salary over the two-year performance cycle. If the Corporation does not achieve
a minimum threshold of diluted earnings per share ("EPS") of at least $1.73 for
the calendar year ending December 31, 2000, no payouts will be due under the
LTIP for the 1999-2000 Performance Cycle. When the Corporation's EPS exceeds the
minimum 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 relative average total
stockholder return ("TSR"), and the annual compounded growth rate ("ACGR") of
the EPS. In addition, LTIP payouts to participants may be adjusted by the
Executive Compensation 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 maximum amount that may be paid is 200% of the participant's
average base salary.
Under the formula for the 1999-2001 Performance Cycle, LTIP payouts for
eligible executives are based on target percentages (ranging from 10% to 50%) of
each participant's average base salary over the three-year performance cycle. If
the Corporation does not achieve a minimum threshold of diluted earnings per
share ("EPS") of at least $1.85 for the calendar year ending December 31, 2001,
no payouts will be due under the LTIP for the 1999-2001 Performance Cycle. When
the Corporation's EPS exceeds the minimum 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
TSR, and the annual compounded growth rate ("ACGR") of the EPS. In addition,
LTIP payouts to participants may be adjusted by the Executive Compensation
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
maximum amount that may be paid is 200% of the participant's average base
salary.
The peer group used in the LTIP for comparison of TSR is the Standard &
Poor's Mid-Cap Regional Bank Index, which is comprised of regional bank holding
companies similar to the Corporation in size, performance and nature of
operations.
Cash payouts are made after each performance cycle. A participant can elect
to have the cash award deferred for future payment under the DCP.
The following table reflects the estimated future payouts, with respect to
the named executive officers, at threshold, target and maximum award levels for
the 1999-2000 Performance Cycle and the 1999-2001 Performance Cycle. Actual
payouts are contingent upon the Corporation meeting its minimum threshold EPS
and are subject to adjustment by the Executive Compensation Committee as
described above, based upon corporate and individual performances, which will be
determined in 2001 for the 1999-2000 Performance Cycle and 2002 for the 1999-
2001 Performance Cycle.
<TABLE>
<CAPTION>
Number of Performance or Estimated Future Payouts
Shares, Other Period until under Non-Stock Price-Based Plans/(2)/
Units Or Maturation -------------------------------------------------
Name Other Rights or Payout/(1)/ Threshold/(3)/ Target Maximum/(4)/
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dods.......................... None 12/31/2000 None $311,535 $623,070
Dods.......................... None 12/31/2001 None $467,303 $934,605
McGrath....................... None 12/31/2000 None $184,171 $368,342
McGrath....................... None 12/31/2001 None $276,257 $552,514
Tsui.......................... None 12/31/2000 None $143,046 $286,092
Tsui.......................... None 12/31/2001 None $214,569 $429,139
Karr.......................... None 12/31/2000 None $ 62,329 $124,659
Karr.......................... None 12/31/2001 None $ 93,494 $186,988
Horner........................ None 12/31/2000 None $ 56,809 $113,619
Horner........................ None 12/31/2001 None $ 85,214 $170,428
</TABLE>
Notes to Long-Term Incentive Plans -- Awards in Last Fiscal Year:
Note (1) Each performance period begins on January 1, 1999.
Note (2) Estimated future payouts under the Target and Maximum columns are based
upon the above-named executive officer's salary for the year ended
December 31, 1999.
Note (3) If the Corporation does not meet its minimum threshold EPS 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
200% of the target amount.
16
<PAGE>
Defined Benefit Pension and Supplemental Executive Retirement Plans
The Corporation has an Employees' Retirement Plan (the "ERP") for employees
of the Corporation and participating subsidiaries. Under the ERP, covered
compensation includes salary, including overtime, but excluding bonuses. Pension
compensation is also limited to the maximum allowable under the 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 average 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 ERP was "frozen" as of December 31,
1995 and none of the executive officers named in the Summary Compensation Table
accrues such benefits under the ERP for service after December 31, 1995.
Effective as of January 1, 1999, assets attributable to certain Bank of the
West employees in the BNP US Retirement Plan (the "BNP Plan") were merged into
the ERP and the ERP was amended to provide eligible Bank of the West employees
with accrual of benefits comparable to those provided under the BNP Plan.
Benefits accrue based upon an employee's years of service and compensation over
his/her years of employment. Except for Mr. McGrath, none of the executive
officers named in the Summary Compensation Table is eligible to accrue such
benefits.
The Corporation also maintains a grandfathered pension portion of the
SERP under which executive officers named in the Summary Compensation Table
continue to earn benefits based on the ERP formula. In determining grandfathered
pension benefits under the SERP, the participant's covered compensation includes
base pay, commissions, overtime, short-term incentive pay, and the annual cash
bonus earned under IPKE; a participant's covered compensation does not include
the cash portion of the Corporation's Cash Bonus Plan or any LTIP bonus. The
grandfathered pension benefit payable under the SERP is reduced by the
participant's "frozen" accrued benefit under the ERP.
Effective as of January 1, 1998, the SERP was amended to provide that
eligible executive officers, including the executive officers named in the
Summary Compensation Table, would receive benefits under the SERP in an amount
equal to the greater of (i) the benefits payable under the profit-sharing
portion of the SERP and the grandfathered SERP pension benefits or (ii) a target
percentage (60% for executives with 20 or more years of service) of his/her
final average compensation (see Note (1) below).
As required by the Merger agreement, the SERP was amended to provide that
certain Bank of the West employees, including Mr. McGrath, would be entitled to
a minimum benefit equal to the minimum benefit under the terminated Bank of the
West Excess Benefit Plan. To be eligible for such minimum benefit, Mr. McGrath
must have completed at least 20 years of service and attained at least age 55 at
retirement. The minimum benefit will be 50% of his base salary at the annual
rate in effect on the date he retires from service ("final pay") if he is at
least age 60 at retirement and 30% of his final pay if he is at least age 55 but
less than 60 at retirement. Mr. McGrath is currently age 51 with 24 years of
service and at December 31, 1999 his base salary was $650,016.
The following table illustrates the estimated annual pension benefits payable
under the ERP and the SERP to an executive officer at age 65. Whether these
amounts become payable depends on the contingencies and conditions set forth in
the ERP and the SERP.
<TABLE>
<CAPTION>
Years of Service /(2)/
Final Average -------------------------------------------------------------
Compensation/(1)/ 15 20 25 30 35 40
- ----------------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
$200,000 50,082 66,777 83,471 100,165 116,859 133,553
300,000 76,332 101,777 127,221 152,665 178,109 203,553
400,000 102,582 136,777 170,971 205,165 239,359 273,553
500,000 128,832 171,777 214,721 257,665 300,609 343,553
600,000 155,082 206,777 258,471 310,165 361,859 413,553
700,000 181,332 241,777 302,221 362,665 423,109 483,553
800,000 207,582 276,777 345,971 415,165 484,359 553,553
900,000 233,832 311,777 389,721 467,665 545,609 623,553
1,000,000 260,082 346,777 433,471 520,165 606,859 693,553
1,100,000 286,332 381,777 477,221 572,665 668,109 763,553
1,200,000 312,582 416,777 520,971 625,165 729,359 833,553
1,300,000 338,832 451,777 564,721 677,665 790,609 903,553
1,400,000 365,082 486,777 608,471 730,165 851,859 973,553
1,500,000 391,332 521,777 652,221 782,665 913,109 1,043,553
1,600,000 417,582 556,777 695,971 835,165 974,359 1,113,553
</TABLE>
17
<PAGE>
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
LTIP or the Cash Bonus Plan). The amount of the IPKE bonus included in
compensation for any year for purposes of the SERP is the amount earned
for the performance year, though not paid until March of the following
year. 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, 1999, the number of years of creditable service
under the Corporation's defined benefit plans for each of the executive
officers named in the Summary Compensation Table was as follows: Mr.
Dods, 31 years; Mr. McGrath, 24 years; Mr. Tsui, 16 years (six years
actual service plus ten years added by the Executive Compensation
Committee when Mr. Tsui was hired); Mr. Karr, 27 years; and Mr. Horner,
21 years.
The Merger constituted a change in control for purposes of the SERP. As a
result, if a SERP participant is "involuntarily terminated" within 36 months of
the Merger, he/she will be granted three extra years of credited service, the
SERP benefit will be based on the greater of covered compensation over the 12
months prior to termination or the final average compensation otherwise provided
in the SERP, and benefit payments will commence on the later of his/her
attaining age 55 or his/her date of termination. The SERP defines "involuntary
termination" to include a discharge or resignation in response to a (i) change
in day-to-day duties; (ii) reduction in compensation or benefits; (iii) downward
change of title; or (iv) relocation requested by the employer.
Change-in-Control and Employment Arrangements
Except as provided in the next two paragraphs, there are no employment
contracts, change-in-control arrangements (other than in the LTIP, 1998 SIP,
1991 SIP, SERP and DCP) or termination of employment arrangements with the named
executive officers.
Prior to the Merger, Mr. McGrath was a party to an employment agreement with
Bank of the West. To replace that agreement, the Corporation entered into an
employment agreement with Mr. McGrath (the "Agreement"), effective upon the
consummation of the Merger. Pursuant to the Agreement, Mr. McGrath will serve as
President and Chief Operating Officer of the Corporation and President and Chief
Executive Officer of Bank of the West, with his principal business office in the
San Francisco Bay Area. Either party may terminate Mr. McGrath's employment upon
30 days' advance notice under the Agreement. Mr. McGrath is entitled to receive
a base salary at the annual rate of at least $650,000, receive at least four
weeks of paid vacation per year, and participate in all of the Corporation's
employee benefit plans and executive compensation programs. In addition, if (1)
he voluntarily resigns his employment for "Good Reason" (as defined in the
Agreement) or (2) the Corporation terminates his employment at any time for any
reason other than "Cause" (as defined in the Agreement) or "Disability" (as
defined in the Agreement), then he will be entitled to a severance payment equal
to 300% of the sum of his then-current annual rate of "Base Compensation" (as
defined in the Agreement), plus the average of the annual bonuses awarded to him
for the three years ending immediately prior to the date of his termination. He
would also be entitled to continue participation in the Corporation's group
insurance plans for one year and he would be credited with an additional year of
service for purposes of determining the vested portion of his stock options. If
a "Change in Control" (as defined in the Agreement) occurs, all of the stock
options he holds at termination will become 100% vested and remain exercisable
for 18 months following termination of employment. The Corporation would also be
obligated to provide Mr. McGrath with a tax restoration payment if any payments
or benefits caused an excise tax to be imposed upon him. If he receives such
severance benefits, he will be subject to a non-competition covenant for three
years following the termination of his employment (provided a Change in Control
has not occurred). He is also subject, under all circumstances and at all times,
to a confidentiality covenant. As of the effective time of the Merger, he was
also appointed to the Board of Directors of the Corporation and of First
Hawaiian Bank.
Pursuant to a Standstill and Governance Agreement between the Corporation and
BNP, Mr. Dods is to continue as Chief Executive Officer of the Corporation and
First Hawaiian Bank, and Mr. McGrath is to continue as Chief Operating Officer
of the Corporation and Chief Executive Officer of Bank of the West, unless
removed by a vote of two-thirds of the Board of Directors or until their death,
voluntary retirement or resignation.
Compensation Committee Interlocks and Insider Participation
The members of the 1999 Executive Compensation Committee were Fujio Matsuda
(Chairman), Dr. Julia Ann Frohlich, Robert A. Fuhrman, David M. Haig and Michel
Larrouilh.
18
<PAGE>
The Corporation's bank subsidiaries have made loans to members of the
Executive Compensation Committee, and entities related to those directors
(including the Estate of S.M. Damon, of which Mr. Haig is a trustee and
beneficiary). These loans were made in the ordinary course of business, 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 Corporation has in the ordinary course of business extended credit to
directors, including Mr. Matsuda. The largest aggregate amount of Mr. Matsuda's
indebtedness in 1999 was $286,650, the aggregate amount outstanding on December
31, 1999 was $280,290, and those loans bore interest during 1999 at rates
ranging from 5% to 7.875% per annum.
Report of Executive Compensation Committee
The report of the Executive Compensation Committee (the "Committee") covers
the following topics:
. Role of the Committee
. Executive Compensation Principles
. Components of the Compensation Program
. Compensation of the Chief Executive Officer
Role of the Executive Compensation Committee
The Committee was made up of five directors in 1999. No member of the
Committee was, during the last completed fiscal year, an officer or employee of
the Corporation or any of its subsidiaries. The Board of Directors has delegated
to the Committee responsibility for administering the executive compensation
program of the Corporation and its subsidiaries.
Executive Compensation Principles
The executive compensation program is designed to provide short-term and
long-term incentives, build stockholder value and reward top performers. Key
goals include:
. Encouraging managers to improve the performance of the Corporation, and
. Attracting, motivating and retaining highly talented individuals.
Components of the Compensation Program
The three components of the compensation program are:
. Base Salary
. Annual Incentives
. Long-Term Incentives
Base Salaries
Base salaries of executive officers are determined by evaluating factors such
as scope of responsibilities, individual experience and performance, the
competitive marketplace, and consistency. No particular weight is placed on, or
relative importance given to, any single factor in adjusting base salaries.
Annual Incentives
Anual incentives for executive officers are provided by a short-term bonus
plan called the Incentive Plan for Key Executives ("IPKE"). It is designed to
pay a bonus in cash or restricted stock awards based on 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, tied to achievement of 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 those goals.
The IPKE provides that the aggregate amount of awards for any fiscal year may
not exceed 21/2% of that year's consolidated income before income taxes and
securities gains. The Committee, in consultation with the Corporation's Chief
Executive Officer and/or Chief Financial Officer, may make such adjustments to
the reported amount of such consolidated income as the Committee deems
appropriate in the circumstances. The maximum award to any individual for any
fiscal year is the amount of that individual's basic annual salary for that
year. The IPKE gives the Committee discretion to determine the amount and form
of all awards. Under current practice, award guidelines (targets) expressed as a
percentage of base salary are set for all participants.
19
<PAGE>
The target percentages increase as 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 grade 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. All
IPKE decisions concerning the CEO are made by the Committee.
The IPKE performance year is the fiscal year of the Corporation, which is the
calendar year. Determination and award of IPKE bonuses for each year's
performance are deferred until the following March. This allows management and
the Committee to base the awards upon final performance results for the year.
Executive officers were formerly eligible to receive annual contributions and
bonuses under the Corporation's Profit Sharing Plan and Cash Bonus Plan. Those
plans, which covered all eligible employees of the Corporation, used fixed
profit-sharing formulas and were not administered by the Committee.
Contributions to these plans terminated for periods commencing after December
31, 1998.
The Committee has adopted a policy that, if approved by stockholders at the
Annual Meeting, will affect IPKE awards to certain executive officers. That
policy is described at page 24.
Long-Term Incentives
Long-term incentives are provided in the form of stock options under the 1991
SIP and the 1998 SIP, and cash awards under the LTIP. In keeping with the
Corporation's commitment to provide a total compensation package that places a
significant amount of pay "at-risk," long-term incentives, together with awards
under the IPKE, generally comprise approximately 40% of the value of an
executive's total compensation package if the Corporation meets its target
performance levels.
Stock Options
Stock options are granted annually to officers. The options have an exercise
price equal to the fair market value of Common Stock on the date the options are
granted. The options generally vest over four years of service and expire ten
years from the date of the grant.
The target grants are a percentage of base salary based on the individual's
position and responsibilities. The target percentage ranges from 10% to 300%,
increasing as the level of responsibility increases. The individual's award may
be increased or decreased based on individual performance at the discretion of
the Committee.
Long-Term Incentive Plan
The LTIP is discussed under "Long-Term Incentive Plans--Awards in Last Fiscal
Year" (page 15). That section also discusses the impact of the Merger on LTIP
payouts.
Compensation of the Chief Executive Officer
Base Salary
The Committee reviewed Mr. Dods' 1998 performance in March 1999. In 1998, the
Corporation completed the merger that made it the parent of both Bank of the
West and First Hawaiian Bank, thereby continuing the Corporation's West Coast
expansion. Operating earnings increased 16.9% over 1997, with both Bank of the
West and the former Pacific One Bank in the Northwest posting double-digit
earnings growth. First Hawaiian Bank increased its net income by 5.9% over the
prior year despite the eighth year of a sluggish economy. Efforts to reduce
costs resulted in the Corporation's efficiency ratio improving from 65.8% in
1997 to 61.2% in 1998, and the efficiency ratio was expected to improve further
in 1999. Furthermore, the year 2000 project was on schedule and on budget.
In view of the significant performance of the Corporation and the fact that
Mr. Dods' base salary had remained at the 1997 level due to a salary freeze for
senior officers, Mr. Dods' salary was increased effective March 1, 1999 by 5%
from $890,103 to $934,608. The increase was in addition to a 3.5% salary
increase that was made effective January 1, 1999 for all employees of First
Hawaiian Bank who were hired before July 1, 1998 (excluding peak employees) due
to the termination of the Profit Sharing Plan.
20
<PAGE>
Annual Incentives
As a result of the Corporation's and Mr. Dods' performance for 1998, the
Committee awarded him $516,000 under the 1998 IPKE, which was paid in 1999.
In late February 2000, the Committee reviewed the 1999 performance of Mr.
Dods and the Corporation. The most important events of 1999 involved
implementation of the merger that brought First Hawaiian Bank and Bank of the
West into a single holding company. Under Mr. Dods' leadership, the Corporation
and its subsidiaries accomplished 1999 merger objectives as planned, creating a
more profitable and geographically diversified western U.S. regional franchise.
As a result of this geographic diversification, 73% of BancWest's 1999 cash
earnings were from U.S. mainland markets, compared to less than 30% two years
ago. In addition, the Corporation reported record annual earnings and earnings
per share. The 1999 efficiency ratio, excluding amortization of intangible
assets, improved to 54.47%. And the year 2000 conversion effort, which began
five years earlier, was completed successfully and below budget. Based on the
Committee's evaluation of these and other factors, without any specific
weighting, the Committee awarded Mr. Dods $607,493 under the 1999 IPKE.
Long-Term Incentives
In March 1999, the Committee granted Mr. Dods a stock option for 133,100
shares (as adjusted to reflect the two-for-one stock split in December 1999), as
set forth in the Summary Compensation Table under the section "Option Grants in
Last Fiscal Year." This award was based upon the 1998 SIP's guideline percentage
of base salary.
For the reasons described under "Long-Term Incentive Plans--Awards in Last
Fiscal Year" (page 15), a payment equal to one-third of the maximum value
attainable for the three-year 1998-2000 performance cycle was made to all
participants in the LTIP (based upon 1998 compensation levels) in January 1999.
Mr. Dods received such a payout of $280,933 in January 1999. That payment is
reported as 1999 LTIP Payouts in the Summary Compensation Table. Mr. Dods waived
all other payments under the change-in-control provisions of the LTIP arising
out of the Merger.
Policy with Respect to the $1 Million Deduction Limit
Section 162(m) of the Internal Revenue Code limits the deductibility of
compensation in excess of $1,000,000 paid in any year to an individual who on
the last day of the taxable year is the Corporation's Chief Executive Officer or
is among its four other most highly compensated executive officers, determined
in accordance with proxy disclosure rules. The $1,000,000 limit on
deductibility does not apply to compensation that meets the requirements for
qualified performance-based compensation as further described in the Code,
including requirements that compensation be paid due to attainment of pre-
established objective measures that have been approved by stockholders and that
preclude discretion to increase the resulting amounts. The Corporation's pay
philosophy is performance based, and some compensation arrangements are designed
to satisfy Section 162(m) deductibility requirements. The 1998 Stock Incentive
Plan is structured so that stock options can qualify as deductible performance-
based compensation under Section 162(m). The Committee has also adopted an IPKE
award policy for certain executives that, if approved by stockholders, should
enable IPKE awards to those executives to satisfy Section 162(m) deductibility
requirements for the 2000 and subsequent plan years. (That policy is being
submitted for stockholder approval at this Annual Meeting and is discussed at
page 24.) The Committee expects to review periodically other compensation
programs for executives who are subject to Section 162(m) limitations, and
consider Section 162(m) modifications to such programs in light of the
materiality of potential deductibility benefits and the potential impact of such
modifications on other compensation objectives. However, because the Committee
seeks to maintain flexibility in accomplishing the Corporation's compensation
goals, it has not adopted a policy that all compensation must be fully
deductible.
Executive Compensation Committee
Fujio Matsuda, Chairman
Dr. Julia Ann Frohlich
Robert A. Fuhrman
David M. Haig
Michel Larrouilh*
*Mr. Larrouilh ceased to serve on the Committee on February 12, 2000 and did not
participate in Committee actions after that date, including its determination of
IPKE awards for 1999 and its adoption of the policy concerning IPKE awards to
certain executives.
21
<PAGE>
Stockholder Return Performance Graph
The following performance graph compares the cumulative total stockholder
return (stock price appreciation and reinvestment of dividends) on the Common
Stock during the last 5 years to the Standard & Poor's Major Regional Bank Index
and the broader Standard & Poor's 500 Stock Index.
[PERFORMANCE GRAPH]
---- BancWest Corporation Common Stock
100 132 160 188 235 197
- --------------------------------------------------------------------------------
[--] S&P 500 Index
100 138 169 226 290 351
- --------------------------------------------------------------------------------
-- -- S&P Major Regional Bank Index
100 153 202 363 386 344
- --------------------------------------------------------------------------------
*Total return assumes reinvestment of dividends and $100 invested on December
31, 1994 in BancWest Corporation Common Stock, the S&P 500 Index and the S&P
Major Regional Bank Index.
22
<PAGE>
Certain Transactions
In the ordinary course of business, the Corporation's bank subsidiaries have
made loans to the Corporation's directors and executive officers, to members of
their families, and to entities related to such persons. Those loans were made
in the ordinary course of business, 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 table provides information on loans from the Corporation to its
directors and executive officers that had balances exceeding $60,000 at any time
during 1999. Each such loan is secured by a real property mortgage.
<TABLE>
<CAPTION>
Aggregate
Largest Indebtedness Interest
Aggregate Outstanding Rate
Indebtedness December 31, Per
Name and Title in 1999 1999 Annum
- ----------------------- ------------ ------------- ---------
<S> <C> <C> <C>
John W. A. Buyers $271,734 $265,150 5.000%
Director
Bert T. Kobayashi, Jr. $747,086 $710,588 5.000%-7.000%
Director
Fujio Matsuda $286,650 $280,290 5.000%-7.875%
Director
John K. Tsui $435,296 $429,409 7.375%
Vice Chairman, Chief Credit
Officer and Director
Howard H. Karr* $192,178 $189,686 7.125%-7.750%
Executive Vice President
and Chief Financial Officer
</TABLE>
*Cosigner of mortgage loan to an adult son.
First Hawaiian 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 $156,800 annually from July 1, 1997 to June 30, 2002 and $179,200
annually from July 1, 2002 to June 30, 2007. Rents thereafter are to be fixed
for the next ten-year period by agreement or, failing agreement, by appraisal.
Messrs. Haig, Weyand, Ganley and Dods are directors of the Corporation and
trustees of the Estate. Management of the Corporation believes that this
transaction is as favorable to the Corporation and First Hawaiian Bank as that
which would have been obtainable in transactions with persons or companies not
affiliated with the Corporation or First Hawaiian Bank.
First Hawaiian Bank leases 6,074 square feet of office space to the Estate of
S.M. Damon in the downtown Honolulu headquarters building of the bank. The
Estate pays rent for the space at the same rate as would be paid by unrelated
parties for the same space. The rent is a minimum of $3.12 per square foot per
month ($227,410 per annum), plus common area maintenance expenses, until
December 7, 2002. Rents thereafter are to be fixed by agreement or, failing
agreement, by appraisal. The lease will expire in December 2007.
Bank of the West leases approximately 48,382 square feet of office space in
San Francisco, California under a commercial office lease (the "Master Lease")
commencing November 1, 1993 and expiring October 31, 2003. Bank of the West has
subleased approximately 22,485 square feet of this space to BNP, or
approximately 46.5% of the leased premises (the "Subtenant's Percentage Share").
The sublease term is the same as the Master Lease, and BNP pays pro-rata rent
and certain expenses directly to the landlord under the Master Lease. BNP's
share of rent and expenses is based primarily on the Subtenant's Percentage
Share. The subleased premises were leased to BNP "as is," and BNP must look
solely to the landlord under the Master Lease for all services and benefits
provided by the Master Lease landlord applicable to the subleased space. Bank of
the West indemnifies BNP against losses incurred by BNP as a result of any
breach by Bank of the West of its obligations as tenant under the Master Lease,
except those assumed by BNP.
23
<PAGE>
Bank of the West and First Hawaiian Bank participate in various transactions
with BNP and its affiliates. These transactions are subject to review by the
Federal Deposit Insurance Corporation (the "FDIC") and other regulatory
authorities and are required to be on terms at least as favorable to each bank
as those prevailing at the time for similar non-affiliate transactions.
During 1999, Bank of the West redeemed its $50,000,000, 7.50% Subordinated
Capital Note due August 2002 held by BNP at par value plus a "make-whole" amount
of $2,345,611, for a total of $52,345,611. Concurrently, Bank of the West issued
to BNP a new $50,000,000, 7.35% Subordinated Capital Note due June 24, 2009. The
maximum principal amount of that note outstanding in 1999, and the outstanding
principal balance at December 31, 1999, was $50,000,000.
Bank of the West holds deposits and purchases federal funds from BNP. The
deposits generally are for terms up to six months. Federal funds purchases are
generally for one to four days. The maximum daily amount owed by Bank of the
West to BNP in 1999 in connection with such deposits and federal funds purchases
was $396,400,000, and the balance outstanding on December 31, 1999 was
$305,000,000.
Mr. Kobayashi is a director of the Corporation and First Hawaiian Bank, and
his law corporation is a partner in the law firm of Kobayashi, Sugita & Goda. In
1999, the Corporation and its subsidiaries paid legal fees to Kobayashi, Sugita
& Goda in the amount of $1,519,876. Of this amount, $421,819 is reimbursable by
customers. Kobayashi, Sugita & Goda leases from First Hawaiian Bank 26,788
square feet of office space in the headquarters building. The rent is set at
annual amounts ranging from $989,715 per annum in 1999 to $1,412,621 per annum
in the lease's final year, 2006, plus common area maintenance expenses.
Mr. Peck is a director of the Corporation and Bank of the West and a Senior
Partner of Pillsbury Madison & Sutro LLP, which provides legal services to the
Corporation and its subsidiaries.
APPROVAL OF POLICY ADDRESSING TAX DEDUCTIBILITY
OF IPKE AWARDS TO CERTAIN EXECUTIVES
Section 162(m) of the Internal Revenue Code limits the deductibility of
compensation in excess of $1,000,000 paid in any year to an individual who on
the last day of the taxable year is the Corporation's Chief Executive Officer or
is among its four other most highly compensated executive officers, determined
in accordance with proxy disclosure rules. However, compensation that qualifies
as "performance-based compensation" under Section 162(m) is deductible
regardless of this limit. The Executive Compensation Committee (the
"Committee") has adopted the following policy, subject to stockholder approval,
to address application of Section 162(m) to certain awards under the Incentive
Plan for Key Executives (the "IPKE"). The policy applies to annual IPKE
incentive awards made to persons the Committee has designated for that year as
"covered executives," and is intended to qualify those awards as "performance
based" for purposes of Section 162(m). The material terms of the policy must be
approved by stockholders to satisfy Section 162(m) requirements.
The policy applies to those key executives whose compensation may, in the
Committee's judgment, be or become subject to Section 162(m), and who, no later
than the ninetieth day of a calendar year (a "plan year"), have been designated
by the Committee in its discretion as "covered executives." Subject to the
Committee's right to reduce the amount of any award made under the policy, each
covered executive for a plan year will be granted an incentive award for that
year equal to the lesser of (i) .4% of the Corporation's "Net Income Before
Taxes" for that year, or (ii) 100% of the covered executive's annualized base
salary in effect on the ninetieth day of the year. For purposes of the policy,
"Net Income Before Taxes" means the Corporation's net income before income taxes
as reported in its consolidated financial statements for the plan year, as
adjusted to eliminate the effects of any of the following: (a) the cumulative
effect of changes in generally accepted accounting principles; (b) losses
resulting from discontinued operations; (c) securities gains and losses; (d)
restructuring, merger-related and other nonrecurring costs; (e) amortization of
goodwill and intangible assets; (f) extraordinary gains and losses; and (g) any
other unusual, nonrecurring gain or loss that is separately quantified in the
Corporation's consolidated financial statements. Net Income Before Taxes will be
calculated on the assumption that all incentive awards to covered executives for
the corresponding plan year will be paid without reduction by the Committee.
The Committee has no discretion to increase the amount of an incentive award
payable to a covered executive above the amount determined pursuant to the
formula in the policy. However, at any time prior to payment of an award
governed by the policy, the Committee in its sole discretion may reduce or
eliminate entirely the amount payable under that award. Any reduction in the
amount payable to a covered executive
24
<PAGE>
under an incentive award will not result in recalculation of Net Income Before
Taxes for purposes of calculating amounts to be paid to other covered executives
for the plan year. So long as the IPKE remains in effect, the amount of
incentive awards paid under the policy will reduce the maximum aggregate amount
of awards that may be paid under the IPKE for that year to persons who are not
covered executives.
Unless otherwise determined by the Committee, incentive awards to covered
executives are to be paid within 90 days following the close of the plan year,
and may be paid in cash or (subject to IPKE requirements) restricted stock. If a
covered executive terminates employment before the end of a plan year, the
Committee has discretion (subject to the policy's limits) to determine the
amount of the incentive award that will paid to the covered executive. Any such
payment will be made no earlier than the date incentive awards for the plan year
are to be paid to other covered executives.
The Committee may amend or terminate the policy at any time. Unless the
policy is expressly terminated by the Committee, it will remain in effect
notwithstanding any termination of the IPKE. Thereafter it will apply to such
short-term incentive or bonus plans, if any, as are designated by the Committee.
Because the component of the formula limiting annual awards to 100% of
annualized base salary is an IPKE limitation, that limitation would not apply if
the IPKE is terminated.
The policy applies only to awards or payments to covered executives made
under the IPKE (or if the IPKE is terminated, any other short-term incentive or
bonus plan designated by the Committee). The policy does not preclude the
Committee or the Corporation from making any other payment or award to a covered
executive, regardless of whether such payment or award qualifies for tax
deductibility under Section 162(m). If stockholders do not approve the policy it
will be void, and no payments will be made under the policy.
If approved, the policy will first be applied to incentive awards made for
the 2000 plan year. As discussed above, the amount of incentive awards paid
under the policy will depend on the Corporation's future financial performance,
and will be subject to reduction by the Committee in its discretion. No such
incentive awards have yet been earned by any covered executive because no
performance period has yet been completed. As a result, the amount of incentive
awards to be paid in the future to covered executives cannot be determined at
this time. Such amounts will depend on actual corporate performance and on the
Committee's discretion to reduce incentive award amounts. If the policy had
been in effect in 1999, the Committee believes that payments made under the
policy to named executive officers would have been essentially the same as their
1999 IPKE payments reported in the Summary Compensation Table on page 12.
The Board of Directors recommends a vote FOR approval of the policy.
ELECTION OF AUDITOR
The Board of Directors, on recommendation of the Audit Committee, recommends
the election of PricewaterhouseCoopers ("PWC") as auditor of the Corporation to
serve for the ensuing year. PWC has served the Corporation in the capacity of
independent auditors since 1973. The Board of Directors expects representatives
of PWC to be present at the Annual Meeting and be available to respond to
appropriate questions. Such representatives may make a statement if they choose.
If the proposal to elect PWC is not approved by the stockholders, or if prior
to the 2001 annual meeting PWC declines to act or otherwise becomes incapable of
acting, or if its employment is discontinued by the Board of Directors, then the
Board of Directors will appoint other independent accountants whose employment
for any period subsequent to the 2001 annual meeting will be subject to
ratification by the stockholders at that meeting.
The Board of Directors recommends a vote FOR the election of PWC as Auditor.
OTHER BUSINESS
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
proxy to vote in accordance with their judgment on such matters.
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<PAGE>
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Stockholder proposals intended to be presented at and included in the proxy
statement for the 2001 annual meeting of the Corporation's stockholders must be
received by the Corporation no later than November 1, 2000. If the date of the
annual meeting for the year 2001 is more than 30 days before or after April 20,
2001, however, the new deadline will be described in one of the Corporation's
quarterly reports on Form 10-Q. Under the Corporation's By-Laws, a stockholder
proposal not intended to be included in the proxy material for the 2001 annual
meeting must be received by the Corporation no later than February 9, 2001. Any
such proposal must also comply with the other provisions contained in the
Corporation's By-Laws relating to stockholder proposals.
BY ORDER OF THE BOARD OF DIRECTORS
BANCWEST CORPORATION
Herbert E. Wolff
Senior Vice President and Secretary
Dated: March 15, 2000
A copy of the Corporation's Annual Report on Form 10-K, to be filed with the
Securities and Exchange Commission prior to March 30, 2000, will be available
after that date to stockholders upon written request. The Form 10-K (other than
certain exhibits) will be provided to stockholders without charge, and may be
obtained by writing Howard H. Karr, Executive Vice President and Chief Financial
Officer, BancWest Corporation, P.O. Box 3200, Honolulu, Hawaii 96847 (E-mail:
[email protected]).
26
<PAGE>
ANNUAL MEETING OF STOCKHOLDERS
BANCWEST CORPORATION
April 20, 2000
TO VOTE BY MAIL
- ---------------
Please date, sign and mail your proxy card in the envelope provided as soon as
possible.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
- --------------------------------------------
Please call toll-free 1-800-PROXIES and follow the Instructions. Have your
control number and the proxy card available when you call.
TO VOTE BY INTERNET
- -------------------
Please access the web page at "www.voteproxy.com" and follow the on-screen
instructions. Have your control number available when you access the web page.
YOUR CONTROL NUMBER IS -
-----------------------
- Please Detach and Mail in the Envelope Provided -
- -------------------------------------------------------------------------------
A [X]Please mark your
votes as in this example.
Nominees: John W.A. Buyers
FOR David M. Haig
all nominees WITHHOLD John A. Hoag
listed at right AUTHORITY John K. Tsui
1. ELECTION OF [_] [_]
NON-CLASS A
DIRECTORS
*(INSTRUCTIONS: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below.)
- -------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Proposal to approve a policy addressing [_] [_] [_]
tax deductibility of awards to certain
executives under the Incentive Plan for
Key Executives.
3. Proposal to approve the election of FOR AGAINST ABSTAIN
PricewaterhouseCoopers LLP as [_] [_] [_]
auditor
This proxy will be voted as directed, but if no direction is specified, it will
be voted FOR Proposals 1, 2 and 3.
Please mark, sign, date and return this proxy card promptly, using the enclosed
envelope.
SIGNATURE DATE SIGNATURE DATE
---------------- --------- ---------------- ---------
Note: Stockholder(s) should sign above exactly as name(s) appears hereon, but
minor discrepancies in such signatures will not invalidate this proxy. If
more than one stockholder, all should sign.
<PAGE>
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF
BANCWEST CORPORATION
ANNUAL MEETING - APRIL 20, 2000
The undersigned hereby appoints DR. J.A. FROHLICH, R.A. FUHRMAN, and J.A.
HOAG, and each of them, each with full power of substitution, the proxies of the
undersigned to attend the Annual Meeting of Stockholders of BANCWEST CORPORATION
(the "Corporation") to be held at 9:00 a.m., Hawaii Standard Time, on April 20,
2000 in the Board Room, 30th Floor, First Hawaiian Center, 999 Bishop 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 Other Side)
<PAGE>
APPENDIX
--------
(Not part of proxy statement)
RESOLUTION OF
EXECUTIVE COMPENSATION COMMITTEE
OF
BANCWEST CORPORATION
Re: IPKE Award Policy for Certain Executives
----------------------------------------
WHEREAS, Section 162(m) of the Internal Revenue Code ("Section 162(m)")
precludes an income tax deduction for compensation in excess of $1,000,000 per
year paid to a publicly held corporation's chief executive officer and its four
other highest paid executive officers unless certain performance-based criteria
are satisfied;
WHEREAS, this Committee desires to establish a policy regarding Section
162(m) applicable to annual incentive awards to certain executives under the
BancWest Corporation Incentive Plan for Key Executives (the "IPKE");
NOW, THEREFORE, BE IT RESOLVED, that this Committee hereby establishes the
following policy regarding Section 162(m) and the IPKE:
1. This policy shall apply to any key executive of BancWest
Corporation (the "Corporation") and its subsidiaries whose compensation,
in the Committee's judgement, may be or become subject to the provisions
of Section 162(m)and who is designated by the Committee, in its
discretion, no later than the ninetieth day of a calendar year (a "plan
year"), as an executive covered by this policy for such plan year. Such an
executive is referred to herein as a "Covered Executive".
2. Subject to this Committee's discretion to reduce the amount
of any award that is subject to this policy, each Covered Executive for a
plan year shall be granted an award (an "Incentive Award") equal to the
lesser of (i).4% of the Corporation's "Net Income Before Taxes" for such
year or (ii) 100% of the Covered Executive's annualized base salary in
effect on the ninetieth day of the plan year. Such an Incentive Award may,
in the Committee's discretion, be paid in any form permitted by Section
3.c of the IPKE, and unless otherwise determined by the Committee shall be
paid within 90 days after the close of the plan year. Solely for purposes
of this policy, "Net Income Before Taxes" means for any plan year the
Corporation's net income before income taxes as reported in the
Corporation's consolidated financial statements for that year, as adjusted
to eliminate the effects of any of the following: (a) the cumulative
effect of changes in generally accepted accounting principles; (b) losses
resulting from
1
<PAGE>
discontinued operations; (c) securities gains and losses; (d) restructuring,
merger-related and other nonrecurring costs; (e) amortization of goodwill and
intangible assets; (f) extraordinary gains or losses; and g) any other unusual,
nonrecurring gain or loss that is separately quantified in the Corporation's
financial statements. Net Income Before Taxes shall be calculated on the
assumption that all Incentive Awards under this policy for a plan year will be
paid without reduction by the Committee.
3. Notwithstanding any other provisions of this policy or the IPKE:
a. This Committee shall not have discretion to increase the
amount of an Incentive Award payable for a plan year to a Covered
Executive above the amount determined in accordance with paragraph
2.
b. At any time prior to payment of an Incentive Award covered
by this policy, this Committee in its sole discretion may reduce
(including a reduction to zero) the amount payable under such
Award.
c. Any such reduction in the amount payable to a Covered
Executive under an Incentive Award shall not, for purposes of
calculating the amount to be paid to other Covered Executives
under this policy, result in recalculation of Net Income Before
Taxes.
4. In accordance with the requirements of Section 162(m), prior to
any payment of an Incentive Award under this policy, this Committee shall
certify in writing the amount of the Corporation's Net Income Before Taxes for
the applicable plan year.
5. If a Covered Executive terminates employment with the
Corporation and its subsidiaries prior to the end of the plan year, this
Committee may in its discretion determine the amount, if any, of the Incentive
Award determined for such year pursuant to paragraph 2 that shall be paid to the
Covered Executive. Any such payment shall be made no earlier than the date
Incentive Awards for the plan year are to be paid to other Covered Executives.
6. For each plan year during which the IPKE remains in effect, the
amount of Incentive Awards paid under this policy shall reduce the aggregate
amount of awards that may be paid for such year to non-Covered Executives under
the limitation imposed by Section 3.b of the IPKE.
2
<PAGE>
7. This policy applies only to awards or payments to Covered Executives
made under the IPKE (or a short-term incentive or bonus plan designated by the
Committee pursuant to paragraph 8). Nothing in this policy shall preclude this
Committee or the Corporation from making any other payment or award to a Covered
Executive, regardless of whether such payment or award qualifies for tax
deductibility under Section 162(m).
8. This Committee may amend or terminate this policy at any time. Unless
this policy is expressly terminated by the Committee, it shall remain in effect
notwithstanding any termination of the IPKE. This policy (other than paragraph
6 and the salary-based limitation set forth in the first sentence of paragraph
2) shall thereafter be applied to such short-term incentive or bonus plans, if
any, as are designated in writing by the Committee. So long as the IPKE remains
in effect, any provision of this policy that is inconsistent with those of
the IPKE shall supersede the corresponding IPKE provisions with respect to
Covered Executives for any plan year.
9. In accordance with the requirements of Section 162(m), this policy
shall be submitted to the Corporation's stockholders for approval. If the
Corporation's stockholders fail to approve this policy, this policy shall be
void and no payments shall be made under this policy.
CERTIFICATE
-----------
I, HERBERT E. WOLFF, the duly elected and acting Secretary of BANCWEST
CORPORATION, a Delaware corporation (the "Company"), do hereby certify that the
foregoing resolution was duly and validly adopted at a meeting of the Executive
Compensation Committee of the Company duly convened and held on February 28,
2000, and that such resolution is in full force and effect on the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 9th day of March 2000.
/s/ Herbert E. Wolff
-------------------------
Secretary
3
