<PAGE>
================================================================================
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
GOLDEN WEST FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
J. L. HELVEY, EXECUTIVE VICE PRESIDENT
- --------------------------------------------------------------------------------
(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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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF GOLDEN WEST FINANCIAL CORPORATION]
1901 HARRISON STREET, OAKLAND, CALIFORNIA 94612
March 14, 1997
Dear Stockholder:
The Annual Meeting of Stockholders of Golden West Financial Corporation will
be held May 1, 1997, at 11:00 a.m. on the fourth floor of the Company's
headquarters located at 1901 Harrison Street, Oakland, California. The
management and directors of Golden West Financial Corporation look forward to
meeting with you at that time.
Attached to this letter is the formal notice of meeting and proxy statement.
We urge you to complete and return the enclosed proxy immediately. A prepaid
return envelope is provided for that purpose. If you attend the meeting, you
may withdraw your previously mailed proxy and vote at the meeting.
Sincerely yours,
/s/ Herbert M. Sandler /s/ Marion O. Sandler
HERBERT M. SANDLER MARION O. SANDLER
Chairman of the Board and Chairman of the Board and
Chief Executive Officer Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF
GOLDEN WEST FINANCIAL CORPORATION
The Annual Meeting of Stockholders of Golden West Financial Corporation (the
"Company") will be held on the fourth floor of the Company's headquarters
located at 1901 Harrison Street, Oakland, California on Thursday, May 1, 1997,
at 11:00 a.m. for the following purposes:
(1) To elect three members of the Board of Directors to hold office for
three-year terms and until their successors are duly elected and
qualified;
(2) To approve the adoption of the Golden West Financial Corporation
Annual Incentive Bonus Plan;
(3) To ratify the selection of independent auditors; and
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on March 3, 1997 has been fixed as the record date for
the determination of stockholders entitled to notice of and to vote at this
meeting or any adjournment thereof. A list of such stockholders will be
available at the time and place of the meeting and, during ten days prior to
the meeting, at the office of the Secretary of Golden West Financial
Corporation, 1901 Harrison Street, Oakland, California.
By order of the Board of Directors
/s/ Robert C. Rowe
ROBERT C. ROWE
Senior Vice President and Secretary
March 14, 1997
IMPORTANT: TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND MAIL THE ENCLOSED PROXY PROMPTLY IN THE RETURN
ENVELOPE WHICH HAS BEEN PROVIDED.
<PAGE>
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Directors of
Golden West Financial Corporation (the "Company") to be used at the Annual
Meeting of Stockholders on May 1, 1997 for the purposes set forth in the
foregoing notice. Any stockholder may revoke his proxy at any time prior to
exercise by filing with the Secretary of the Company a written revocation or
duly executed proxy bearing a later date, or upon request if such stockholder
is present at the meeting and chooses to vote in person.
The expense of soliciting proxies will be paid by the Company. Proxies may
be solicited by regular employees of the Company personally or by telephone or
telegraph, and the Company will upon request reimburse persons holding shares
in their names, or the name of their nominees, but not owning the shares
beneficially, for reasonable expenses of forwarding proxy materials to their
principals.
The principal executive offices of the Company are located at 1901 Harrison
Street, Oakland, California 94612. This Proxy Statement and the enclosed Proxy
are being sent or given to stockholders commencing March 14, 1997.
VOTING SECURITIES
Only stockholders of record on the books of the Company as of 5:00 p.m.,
March 3, 1997 will be entitled to vote at the Annual Meeting. As of the close
of business on March 3, 1997, there were outstanding 57,306,339 shares of
Common Stock of the Company, $.10 par value. Stockholders are entitled to one
vote for each share held except that, in the election of directors, each
stockholder has cumulative voting rights and is entitled to as many votes as
equal the number of shares held by such stockholder multiplied by the number
of directors to be elected (three), which votes may be cast for a single
candidate or distributed among any or all candidates as such stockholder sees
fit. The three candidates for director receiving the highest number of votes
shall be elected. Consistent with Delaware law, abstentions and broker non-
votes will not be counted, except that shares owned by stockholders submitting
signed proxies will be counted for the purpose of determining whether a quorum
of stockholders is present at the Annual Meeting.
ELECTION OF DIRECTORS
Pursuant to Article Seventh of the Company's Certificate of Incorporation,
the Board of Directors is divided into three classes. The first class of
directors consists currently of four directors, while the second and third
classes consist of three directors each. One of the four directors in the
first class has announced his intention not to stand for reelection at the
1997 Annual Meeting. The Board of Directors has amended the Bylaws of the
Company to reduce the number of directors from ten to nine and reduce the
number of directors in the first class from four to three. Such amendment is
effective at the close of business on April 30, 1997. The first class of
directors is being elected at the 1997 Annual Meeting and will serve until the
2000 Annual Meeting. The second class of directors will serve until the 1998
Annual Meeting and the third class of directors will serve until the 1999
Annual Meeting.
Three directors are to be elected at the 1997 Annual Meeting. Maryellen B.
Cattani, Kenneth T. Rosen and Herbert M. Sandler are nominees for directors.
Mr. Rosen and Mr. Sandler were elected directors by a vote of the stockholders
at the 1994 Annual Meeting of Stockholders. Ms. Cattani was appointed by the
Board of Directors in July 1996 to fill a vacancy in the first class of
directors. Ms. Cattani is Executive Vice President, General Counsel and
Secretary of APL Limited, which is a company providing container
transportation services in Asia, the Americas, Europe and the Middle East
through an intermodal system combining ocean, rail and truck transportation.
In the absence of instructions to the contrary, shares represented by the
enclosed proxy will be voted FOR the election of the above nominees to the
Board of Directors. If any of such persons are unable or unwilling to be
nominated for the office of director at the date of the Annual Meeting, or any
adjournment thereof, the proxy holders will vote for such substitute nominees
as the Company's Board of Directors may propose. The
1
<PAGE>
management has no reason to believe that any of such nominees will be unable
or unwilling to serve if elected a director. Notwithstanding the foregoing, if
one or more persons other than those named above are nominated as candidates
for the office of director, the proxy holders may cumulate votes and the
enclosed proxy may be voted in favor of any one or more of the nominees named
above, to the exclusion of others, and in such order of preference as the
proxy holders may determine in their discretion.
Set forth below is certain information concerning the nominees and the
members of the Board of Directors who will continue in office after the 1997
Annual Meeting:
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY
OWNED AS OF
FEBRUARY 28, 1997(1)
CONTINUING DIRECTORS BUSINESS EXPERIENCE SERVED AS ----------------------------------
AND NOMINEES FOR DURING PAST FIVE YEARS DIRECTOR NUMBER OF PERCENT
DIRECTOR (CLASS) AND OTHER INFORMATION SINCE AGE SHARES OF CLASS
-------------------- ---------------------- --------- --- --------------- ------------
<S> <C> <C> <C> <C> <C>
Maryellen B. Cattani (I) Executive Vice President, 1996 53 2,000 --
General Counsel and
Secretary of APL Limited (2)
Louis J. Galen (III) Retired (Since 1982) Company 1959 71 1,169,998(3) 2.0%
Officer, Private Investor;
Director of Trans World Bank
Antonia Hernandez (III) President and General 1995 49 100 --
Counsel of The Mexican
American Legal Defense and
Educational Fund
Patricia A. King (II) Professor of Law, Georgetown 1994 54 100 --
University, Washington,
D.C.; Adjunct Professor,
Department of Health Policy
and Management, School of
Hygiene and Public Health,
Johns Hopkins University
Bernard A. Osher (III) Chairman, Butterfield and 1970 69 3,164,150 5.5%
Butterfield, Auctioneers
Kenneth T. Rosen (I) Professor of Business 1984 48 3,000 --
Administration, Haas School
of Business; Chairman of the
Center for Real Estate and
Urban Economics, University
of California, Berkeley
Herbert M. Sandler Chairman of the Board and 1963 65 5,241,375(5)(6) 9.1%
(I)(4) Chief Executive Officer of
the Company, World Savings
and Loan Association and
World Savings Bank, FSB
Marion O. Sandler Chairman of the Board and 1963 66 5,674,025(5)(7) 9.8%
(II)(4) Chief Executive Officer of
the Company, World Savings
and Loan Association and
World Savings Bank, FSB
Leslie Tang Schilling President of L.T.D.D., Inc. 1996 42 1,000 --
(II) and Golden Bay Investments,
Inc.
All directors and officers as a group (14 persons) 11,093,713(8) 18.9%
</TABLE>
- --------
(1) Held directly with sole voting and investment powers unless otherwise
noted, subject to community property laws where applicable.
(2) Maryellen B. Cattani is a member of the Board of Directors of ABM
Industries Incorporated.
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<PAGE>
(3) Includes 1,065,498 shares held in trust by Mr. Galen with sole voting and
investment powers, 34,000 shares with shared voting and investment powers,
held in a charitable trust for which Mr. Galen is trustee, and 70,500
shares held in the trust for the benefit of his spouse, with Mr. Galen and
his spouse as co-trustees.
(4) Member of the Executive Committee.
(5) Includes for both Herbert M. Sandler and Marion O. Sandler, husband and
wife, 4,724,075 shares, with shared voting and investment powers, held
jointly by Mr. and Mrs. Sandler, as co-trustees.
(6) Includes for Herbert M. Sandler 900 shares with voting and investment
powers in trust for the benefit of his sister-in-law, 163,208 shares with
shared voting and investment powers held in trusts for the benefit of Mr.
and Mrs. Sandler's descendents with Mr. and Mrs. Sandler as co-trustees,
and 499,820 shares which Mr. Sandler may acquire upon exercise of employee
stock options exercisable on February 28, 1997, or within 60 days
thereafter.
(7) Includes for Marion O. Sandler 30,060 shares with voting and investment
powers in trust for the benefit of herself and descendents, 356,580 shares
with voting and investment powers held in trusts for the benefit of Mr.
and Mrs. Sandler's descendents, 163,208 shares with shared voting and
investment powers held in trusts for the benefit of Mr. and Mrs. Sandler's
descendents with Mr. and Mrs. Sandler as co-trustees, and 551,710 shares
which Mrs. Sandler may acquire upon exercise of employee stock options
exercisable on February 28, 1997, or within 60 days thereafter.
(8) Includes 5,489,985 shares as to which officers and directors share with
others voting and/or investment powers. Also includes 1,329,940 shares
which certain officers may acquire upon the exercise of employee stock
options exercisable on February 28, 1997, or within 60 days thereafter.
The continuing directors and nominees for elections as directors have had
the principal occupations or employments set forth in the foregoing table for
at least the past five years, except for Marion O. Sandler who was President
and Chief Executive Officer of the Company and World Savings and Loan
Association until January 1993 at which time she became Chairman of the Board
and Chief Executive Officer of the Company and World Savings and Loan
Association along with Herbert M. Sandler.
Herbert M. Sandler and Marion O. Sandler are husband and wife. Bernard A.
Osher is the brother of Mrs. Sandler. Herbert M. Sandler, Marion O. Sandler
and Bernard A. Osher may be deemed to be "control" persons of the Company,
within the meaning of the General Rules and Regulations adopted by the
Securities and Exchange Commission under the Securities Exchange Act of 1934.
The business address for Mr. and Mrs. Sandler is 1901 Harrison Street,
Oakland, California 94612. The business address for Mr. Osher is 220 San Bruno
Avenue, San Francisco, California 94103.
During 1996, the Company's Board of Directors held four meetings. The Board
of Directors has standing Nominating, Audit, Compensation and Stock Option
Committees. The members of the Nominating Committee in 1996 were Louis J.
Galen, Antonia Hernandez and Paul Sack. The Nominating Committee's principal
function is to identify and propose to the Board qualified individuals as
potential candidates for the position of Director. The Nominating Committee
does not consider recommendations from stockholders for nominations for
Director. The members of the Audit Committee in 1996 were Louis J. Galen,
William D. McKee and Kenneth T. Rosen. Maryellen B. Cattani was appointed a
member of the Audit Committee at the January 1997 Board Meeting. The principal
function of the Audit Committee is to assist the Board of Directors in
reviewing the financial statements of the Company and its subsidiaries as
issued to its stockholders and others. Such Committee held four meetings of
its members during 1996. The members of the Compensation and Stock Option
Committees in 1996 were Patricia A. King, Kenneth T. Rosen, and, until his
resignation from the Board of Directors in December 1996, Paul Sack. Leslie
Tang Schilling was nominated to the Compensation and Stock Option Committees
at the January 1997 Board Meeting. The report of the Compensation Committee is
set forth below:
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
To the Board of Directors:
The Compensation Committee's primary function is to review and recommend,
for review by the Board of Directors, the salaries and other compensation of
the Company's senior executive officers. In addition, the members of the
Compensation Committee serve as the Company's Stock Option Committee which
approves the
3
<PAGE>
grants of stock options pursuant to the Company's Stock Option Plan, including
grants of stock options to executive officers of the Company. The Compensation
Committee met in April of 1996 to recommend to the Board of Directors salaries
and stock options, for the period May 1, 1996 through April 30, 1997, for the
Company's chief executive officers ("Chief Executive Officers"), and its
President and Senior Executive Vice President (together with the Chief
Executive Officers, the "Senior Executive Officers"). The cash compensation of
the Company's other executive officers was determined through normal annual
reviews by their managers, who included one or more of the Chief Executive
Officers, the President, or the Senior Executive Vice President. The
compensation of each such officer was determined in those reviews with
reference to the officer's individual performance in such officer's area of
responsibility and the manager's assessment of the officer's contribution to
the performance of the Company.
COMPENSATION GOALS AND APPROACH
The Committee's goals were to provide compensation that: (a) reflects both
the Company's and the executives' performance; (b) compares reasonably with
compensation in the relevant market; and (c) attracts and retains high quality
executives. In its evaluation of executive compensation for the Senior
Executive Officers, the Committee considered factors relating to the Company's
performance, compared to a peer group, and the compensation of the Company's
Senior Executive Officers relative to the compensation of executives in the
peer group. The peer group included the top performing regional bank holding
companies that had between $30 billion and $50 billion in assets as of
December 31, 1995 and a primary bank operating subsidiary with a rating from
Moody's of A1 or better and from Standard & Poor's of A+ or better (Boatmen's
Bancshares, First Bank System, Mellon Bank Corp., National City Corp.,
Republic New York Corp., SunTrust Banks, Inc., U.S. Bancorp and Wachovia
Corp.) and the two largest savings and loan holding companies in the nation
(H.F. Ahmanson & Co. and Great Western Financial Corporation). Some companies
which were included in the list of companies reflected in the Common Stock
Performance Graph in the proxy statement for the Company's 1996 Annual Meeting
were not included by this Committee in the peer group for purposes of
reviewing compensation because the Committee determined that, in setting
compensation for the period May 1, 1996 through April 30, 1997, it was more
appropriate to limit the peer group to companies with total assets in a range
relatively close to the Company's asset size. Each company which was included
in the peer group for compensation analysis purposes except H.F. Ahmanson &
Co. and Great Western Financial Corporation, was also included in the list of
companies reflected in the Common Stock Performance Graph in the proxy
statement for the Company's 1996 Annual Meeting.
The Committee considered several measures of performance in evaluating the
Company's performance relative to the peer group, including: total assets;
yearend stock prices; net earnings; fully-diluted net income per share; return
on average assets; return on average equity; capital levels; the ratio of non-
performing assets ("NPAs") and troubled debt restructured ("TDRs") to period-
end loans; the ratio of net charge-offs to average loans and leases; loan loss
coverage; the ratio of general and administrative expenses ("G&A") to interest
income and other income; the ratio of non-interest expenses to pretax
earnings; and the ratio of pretax earnings to net interest income and non-
interest income. In addition, in evaluating compensation, the Committee also
considered other factors, including: the attainment of long-term plans and
budgets; the attainment of goals and objectives; the attainment of credit
ratings by nationally-recognized rating services; the attainment of regulatory
examination ratings by the Company and its operating subsidiary, World Savings
and Loan Association; the attainment of regulatory capital standards by World
Savings and Loan Association; the strategic accomplishments of the Company;
and the general assessment of the executives by peers, equity analysts and
others.
With respect to total compensation, the Committee considered annual
compensation of the Company's Senior Executive Officers relative to executives
in the peer group, for the period 1993 through 1995, including: (i) salary,
bonuses and other forms of cash compensation; and (ii) equity-based
compensation, including restricted stock and stock options. In general, the
Committee concluded that while exact comparisons could not be made, the
compensation of the Company's Senior Executive Officers for the period in
question was in accordance with compensation for the peer group.
4
<PAGE>
The Committee also considered stock option awards for the Company's
executive officers. In general, each executive officer's eligibility for and
the amount of those awards were determined considering such officer's
performance, the amount of options previously granted and the Company's
objectives of encouraging strong performance in the future, providing an
opportunity for employees to acquire a proprietary interest in the Company and
encouraging employees to remain in the employ of the Company.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code limits the federal income tax
deductibility of compensation paid to the Company's two Chief Executive
Officers and to each of the other three most highly compensated executive
officers. The Company generally may deduct compensation paid to such an
officer only to the extent that the compensation does not exceed $1 million
during any fiscal year or is "performance-based" as defined in section 162(m).
A plan that is designed to preserve the deductibility of certain cash
compensation by qualifying it as "performanced-based" will be voted on at the
1997 Annual Meeting. In addition, non-qualified stock options granted under
the Company's Stock Option Plan qualify as "performance-based" under Section
162(m).
1996 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICERS
In setting the salary and stock option awards for the Chief Executive
Officers, the Committee took into account the Company's performance in return
on average equity; return on average assets; ratio of Tier 1 capital to total
assets; ratio of Total Risk-Weighted capital to assets; ratio of NPAs and TDRs
to period-end loans; ratio of net charge-offs to average loans; loan loss
coverage ratio; ratio of G&A to net interest income and other income; ratio of
non-interest expense to pretax earnings; and ratio of pretax earnings to net
interest income and non-interest income.
In considering the compensation of the Chief Executive Officers, the
Committee also considered the attainment of goals and objectives and plans and
budgets in key areas of operations, including expense control, loan
production, asset quality, branch network growth and capital growth. The
Committee also considered the generally favorable results attained by the
Company and its operating subsidiary, World Savings and Loan Association
during examination by the Office of Thrift Supervision. The Committee also
acknowledged the continued positive recognition of the Chief Executive
Officers by the business press, equity analysts and others, with respect to
the performance of the Chief Executive Officers and their contributions to the
performance of the Company.
The Committee considered the foregoing factors as a group without assigning
relative weight to any one factor over another. Based upon its review of the
Company's performance and the performance of the Chief Executive Officers, the
Committee arrived at recommendations with respect to salaries and stock option
awards.
The Committee also evaluated the recommended compensation of the Chief
Executive Officers by comparing their compensation for the period 1993 through
1995 to that of chief executive officers of companies in the peer group over
the comparable period. The Committee recognized that the Chief Executive
Officers' compensation included only salary and stock option components, while
the components of chief executive officer compensation for the peer group
included not only salary and stock options but also included other forms of
cash compensation, such as bonuses and long-term incentives, and other forms
of stock-based compensation, such as restricted stock. These differences in
the form of compensation received by the Chief Executive Officers and that
received by chief executives of companies in the peer group made exact
comparisons difficult; however, the Committee reached certain general
conclusions regarding the Chief Executive Officers' compensation.
In general, the trends in the increase in the Chief Executive Officers' cash
compensation for the period reviewed were consistent with such trends in the
peer group. Further, for a number of the chief executives of companies in the
peer group, the total amount of cash compensation received significantly
exceeded the cash compensation of the Chief Executive Officers. In addition,
the number of stock options awarded to the Chief Executive Officers had been
lower than awards made to chief executives of companies in the peer group in a
number of cases.
5
<PAGE>
The Committee concluded, after reviewing this data, that the compensation of
the Chief Executive Officers for the period 1993 through 1995 was in
accordance with the compensation for executives of companies in the peer group
for the comparable period.
Based upon its review of the Company's performance and the performance of
the Chief Executive Officers, and considering the level of compensation of the
Chief Executive Officers compared to the peer group, the Committee concluded
that the recommendations it had arrived at were consistent with the
Committee's traditional approach to executive compensation and were
appropriate in a comparative context. Accordingly, the Committee determined to
recommend to the Board of Directors salaries and stock option grants, for the
period May 2, 1996 through April 30, 1997, in the amounts reflected in the
Summary Compensation Table located elsewhere in this proxy statement.
COMPENSATION COMMITTEE
Patricia A. King, Chairman
Kenneth T. Rosen
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC").
Based solely on the Company's review of such reports and written
representations from certain persons that certain of such reports were not
required to be filed by such persons, no officer, director or person who owns
more than ten percent of a registered class of the Company's equity securities
failed to file on a timely basis reports required by Section 16(a) of the
Securities Exchange Act of 1934 during the year ended December 31, 1996,
except that, with respect to newly appointed director Leslie Tang Schilling,
the Form 3 report of initial stock ownership and a Form 4 filing covering one
stock transaction were not filed in a timely manner.
6
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership, as of the dates
indicated, of each stockholder other than Herbert M. Sandler, Marion O.
Sandler, and Bernard A. Osher, known to the Company to be the beneficial owner
of more than 5% of the Company's Common Stock. The table also sets forth the
beneficial ownership, as of February 28, 1997, of each of the executive
officers named in the Summary Compensation Table located elsewhere in this
proxy statement who are not also directors of the Company:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
------------------------------------ -------------------- ----------
<S> <C> <C>
Sanford C. Bernstein & Co., Inc. ........ 2,955,480(1) 5.2%
767 Fifth Avenue
New York, NY 10153
The Capital Group Companies, Inc. ....... 3,039,070(2) 5.3%
333 South Hope Street
Los Angeles, CA 90071
Dodge & Cox, Incorporated................ 4,177,403(3) 7.3%
One Sansome Street
San Francisco, CA 94104
FMR Corp. ............................... 3,098,255(4) 5.4%
82 Devonshire Street
Boston, MA 02109
Wellington Management Company/........... 5,652,100(5)(7) 9.9%
Thorndike, Paine & Lewis
75 State Street
Boston, MA 02109
The Windsor Funds, Inc.,................. 5,652,100(6)(7) 9.9%
a member of the Vanguard Group
of Investment Companies
Vanguard Financial Center
Valley Forge, PA 19482
James T. Judd............................ 100,710(8) .2%
Senior Executive Vice President of the
Company and President and Chief Operating
Officer of World Savings and Loan
Association and World Savings Bank, FSB
1901 Harrison Street
Oakland, CA 94612
Russell W. Kettell....................... 405,730(8) .7%
President and Treasurer of the Company
and Senior Executive Vice President of
World Savings and Loan Association and
World Savings Bank, FSB
1901 Harrison Street
Oakland, CA 94612
Dirk S. Adams............................ 30,700(8) .1%
Group Senior Vice President
of the Company, World Savings and
Loan Association and World Savings Bank,
FSB
1901 Harrison Street
Oakland, CA 94612
</TABLE>
- --------
(1) Includes 2,955,480 shares with sole disposition power and 1,602,821 with
sole voting power, based upon SEC Schedule 13G dated January 30, 1997.
(2) Includes 3,039,070 shares with sole disposition power and 1,479,170 with
sole voting power, based upon SEC Schedule 13G dated February 12, 1997.
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<PAGE>
(3) Includes 4,177,003 shares with sole disposition power and 3,731,603 with
sole voting power, based upon SEC Schedule 13G dated February 13, 1997.
(4) Includes 3,098,255 shares with sole disposition power and 34,251 shares
with sole voting power, based upon SEC Schedule 13G dated February 14,
1997.
(5) Includes 5,652,100 shares with shared disposition power based upon SEC
Schedule 13G dated January 24, 1997.
(6) Includes 5,652,100 shares with shared disposition power based upon SEC
Schedule 13G dated February 7, 1997.
(7) The shares reported by the Windsor Fund are also included in those
reported by Wellington Management Company.
(8) Includes 80,710, 165,000, and 25,700 shares which Messrs. Judd, Kettell,
and Adams, respectively, may acquire upon exercise of employee stock
options exercisable on February 28, 1997 or within 60 days thereafter.
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The compensation paid to each of the two Chief Executive Officers and to the
three most highly compensated executive officers of the Company for services
in all capacities to the Company and its subsidiaries is set forth below:
SUMMARY COMPENSATION TABLE
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- ------------
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL COMPENSATION OPTIONS COMPENSATION
POSITION YEAR SALARY ($)(A) ($)(B) (#)(C) ($)(D)
- ------------------------- ---- ------------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C>
HERBERT M. SANDLER 1996 $973,080 $ 8,014 35,000 $5,650
Chairman of the Board 1995 931,176 9,427 25,000 5,133
and Chief Executive
Officer of the Company, 1994 889,704 11,613 35,000 5,201
World Savings and
Loan Association and
World Savings Bank, FSB
MARION O. SANDLER 1996 973,080 8,112 35,000 5,650
Chairman of the Board 1995 931,176 9,416 25,000 5,133
and Chief Executive
Officer of the Company, 1994 889,704 11,344 35,000 5,201
World Savings and
Loan Association and
World Savings Bank, FSB
JAMES T. JUDD 1996 680,968(E) 9,146 17,500 5,650
Senior Executive Vice 1995 655,952(E) 7,309 15,000 5,133
President of the Company
and President and Chief 1994 631,192(E) 6,419 17,500 5,201
Operating Officer of
World Savings and Loan
Association and World
Savings Bank, FSB
RUSSELL W. KETTELL 1996 527,492 8,676 17,500 5,650
President and Treasurer 1995 504,772 2,659 15,000 5,133
of the Company and
Senior Executive Vice 1994 482,288 1,188 17,500 5,201
President of World
Savings and Loan
Association and World
Savings Bank, FSB
DIRK S. ADAMS 1996 319,804 2,158 0 5,650
Group Senior Vice 1995 297,000 2,044 2,400 5,133
President of the Company
and World Savings and 1994 282,852 1,968 3,000 5,201
Loan Association and
World Savings Bank, FSB
</TABLE>
- --------
(A) Amounts shown include cash compensation earned and received by executive
officers.
(B) Amounts are for cash reimbursement for income taxes on account of certain
fringe benefits provided to such individuals.
8
<PAGE>
(C) Options granted are under the Company's 1996 Stock Option Plan which
provides for the issuance of both incentive stock options and non-
qualified stock options.
(D) Amounts shown in this column represent Company contributions on behalf of
each of these officers to the Company's 401(K) plan, $4,750 (1996) and
$4,620 (1995 and 1994), and payments by the Company for term life
insurance for executive officers in excess of their individual
contributions, $900 (1996), $513 (1995) and $581 (1994).
(E) Amounts for Mr. Judd also include $100,000 in each year, which amounts
were vested and available to be paid to Mr. Judd at his election pursuant
to a deferred compensation agreement. Such amount was received during
1995. In 1996 and 1994 he elected to receive $41,667 and $91,663,
respectively.
INDEBTEDNESS OF MANAGEMENT
During 1996, J. L. Helvey, Executive Vice President of the Company, World
Savings and Loan Association and World Savings Bank, FSB, was indebted to the
Company for a residential loan. The largest aggregate balance outstanding from
January 1, 1996 to February 28, 1997 was $130,321. The annual interest rate
charged on this indebtedness was from 6.06% to 6.37%. The amount of
indebtedness outstanding at February 28, 1997 was $127,523.
DEFERRED COMPENSATION
The Company has entered into deferred compensation agreements with certain
of the key employees of the Company and its subsidiaries, as selected by the
Office of the Chairman, including Messrs. Judd, Kettell and Adams.
The agreements provide for benefits payable in monthly installments over ten
years upon retirement at age 65 or upon the death of the employee (paid to his
beneficiary). The agreements contain vesting schedules that provide for full
vesting by ages ranging from 58 to 63, depending upon the age of the employee
at time the agreement was executed. The vesting schedules provide that one-
third of the benefits vest during the first half of the vesting period and
two-thirds vest during the second half.
The annual installments payable upon retirement at age 65 or death to
Messrs. Judd, Kettell and Adams are $300,000, $375,000, and $200,000,
respectively. As of December 31, 1996, Messrs. Judd, Kettell, and Adams had
accumulated vested benefits of $1,221,800, $1,670,000, and $132,000,
respectively, pursuant to the agreements. During 1996, the following amounts
under the agreements were vested for the accounts of Messrs. Judd, Kettell,
and Adams, respectively: $269,800, $347,300 and $38,800. In addition, Mr. Judd
has $400,000 in fully vested benefits remaining from a separate deferred
compensation agreement that provides for an aggregate of 120 monthly
installments of $8,333 each to be paid to him at his election.
The Company carries life insurance policies on the lives of these employees
in amounts estimated to be sufficient to cover its obligations under the
agreements. If assumptions as to mortality experiences, future policy
dividends and other factors are realized, the Company will recover an amount
equal to all retirement payments under the agreements, plus the premiums on
the insurance contracts and the interest that could have been earned on the
use of the retirement and premium payments.
COMPENSATION OF DIRECTORS
An annual retainer of $18,000, paid monthly, and a fee of $2,500 for each
Board of Directors meeting attended is paid to directors who are not employees
of the Company. In addition, the Chairman of the Audit Committee receives a
fee of $1,500 per Audit Committee meeting attended and each of the other
members of the Audit Committee receives a fee of $1,250 for each Audit
Committee meeting attended.
9
<PAGE>
STOCK OPTIONS
Information concerning individual grants of stock options made to the two
Chief Executive Officers and the three most highly compensated executive
officers of the Company during the year ended December 31, 1996 is set forth
below:
OPTION GRANTS TABLE
OPTION GRANTS FOR YEAR ENDED DECEMBER 31, 1996
INDIVIDUAL GRANTS (A)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK
OPTIONS PRICE APPRECIATION FOR
OPTIONS GRANTED TO OPTION TERM
GRANTED EMPLOYEES IN EXERCISE OR EXPIRATION -----------------------
NAME (#) FISCAL YEAR BASE PRICE($/SH) DATE 5%($) 10%($)
---- ------- ------------ ---------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Herbert M. Sandler...... 35,000 30.2% $52.625 04/30/2006 $ 1,158,000 $ 2,935,000
Marion O. Sandler....... 35,000 30.2 52.625 04/30/2006 1,158,000 2,935,000
James T. Judd........... 17,500 15.1 52.625 04/30/2006 579,000 1,468,000
Russell W. Kettell...... 17,500 15.1 52.625 04/30/2006 579,000 1,468,000
Dirk S. Adams........... None
</TABLE>
- --------
(A) All options were granted with a per share exercise price equal to the fair
market value of a share of Company Common Stock on the date of grant. The
options become exerciseable on the second anniversary of the grant date.
The Company did not grant any stock appreciation rights.
Information concerning exercises of stock options by the two Chief Executive
Officers and the three most highly compensated executive officers of the
Company during the year ended December 31, 1996 and certain information
concerning unexercised stock options is set forth below:
OPTION EXERCISES AND YEAREND VALUE TABLE
AGGREGATED OPTION EXERCISES FOR THE YEAR ENDED DECEMBER 31, 1996 AND
DECEMBER 31, 1996 YEAREND OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF IN-THE-MONEY OPTIONS
UNEXERCISED OPTIONS AT DECEMBER 31,
AT DECEMBER 31, 1996(#) 1996($)(B)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE (#) REALIZED($)(A) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Herbert M. Sandler...... 41,580 $2,147,506 499,820 80,000 $22,159,384 $1,203,125
Marion O. Sandler....... 70,700 3,479,013 551,710 80,000 24,866,692 1,203,125
James T. Judd........... 12,000 637,500 80,710 42,500 2,938,567 644,375
Russell W. Kettell...... 44,000 1,961,375 165,000 42,500 7,141,813 644,375
Dirk S. Adams........... 5,000 199,000 25,700 5,400 841,063 108,975
</TABLE>
- --------
(A) Market value of underlying securities at exercise date less the option
price.
(B) Market value of unexercised "in-the-money" options at year end less the
option price of such options.
10
<PAGE>
COMMON STOCK PERFORMANCE GRAPH
The graph below compares the yearly change in the Company's cumulative total
stockholder return on its Common Stock for the five years ended December 31,
1996 with the cumulative total return, assuming reinvestment of dividends, of
each of the Standard & Poor's 500 Stock Index and the Standard & Poor's
Regional Bank Index. The returns of each component company of each index have
been weighted according to the stock market capitalization of the respective
company. Cumulative total stockholder return is measured by dividing (i) the
sum of (A) the cumulative amount of dividends for the measurement period,
assuming dividend reinvestment and (B) the difference between the Company's
share price at the beginning and the end of the measurement period by (ii) the
share price at the beginning of the measurement period.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG GOLDEN WEST FINANCIAL CORP, S&P 500 INDEX AND BANKS
(MAJOR REGIONAL) - 500
TOTAL SHAREHOLDER RETURN PERFORMANCE GRAPH
<TABLE>
<CAPTION>
GOLDEN WEST
Measurement Period FINANCIAL S&P BANKS (MAJOR
(Fiscal Year Covered) CORP 500 INDEX REGIONAL) - 500
- --------------------- ----------- --------- ---------------
<S> <C> <C> <C>
Measurement Pt- 1991 $100 $100 $100
FYE 1992 $100 $108 $127
FYE 1993 $ 90 $118 $135
FYE 1994 $ 82 $120 $128
FYE 1995 $130 $165 $201
FYE 1996 $150 $203 $275
</TABLE>
Assumes $100 invested on December 31, 1991 in the stock of Golden West
Financial Corporation, S&P 500 Index, and the S&P Regional Banks (weighted by
market capitalization). Total return assumes reinvestment of dividends.
11
<PAGE>
APPROVAL OF THE ADOPTION OF AN ANNUAL INCENTIVE BONUS PLAN
In response to certain tax law changes, discussed more fully below, the
Compensation Committee of the Board of Directors ("Committee") recommended to
the Board a performance-based Annual Incentive Bonus Plan ("Plan"), to be
effective as of January 1, 1997, subject to approval by the affirmative vote
of the holders of a majority of the shares of common stock of the Company
present in person or by proxy at the Annual Meeting and entitled to vote
thereon.
The Board of Directors believes that adoption of the Plan is in the best
interests of stockholders, because it is designed to preserve the tax
deductibility to the Company of executive compensation paid thereunder.
Further, the Plan offers the additional benefit of having a portion of
executive compensation directly linked to the Company's performance as
measured using certain key factors. The Board of Directors recommends a vote
FOR this proposal.
DESCRIPTION OF THE ANNUAL INCENTIVE BONUS PLAN
The Plan is set forth in its entirety as Exhibit A to this Proxy Statement
and the following description is qualified in its entirety by reference to
Exhibit A.
PURPOSE
The Plan's primary purpose is to preserve the federal income tax
deductibility to the Company of certain compensation paid to key executives.
In addition, although the Company's performance is always considered in
setting such executives' compensation, as reflected in the Compensation
Committee Report on Executive Compensation herein, the Plan would directly
link a portion of compensation to the Company's performance, as measured using
certain key factors.
ELIGIBILITY TO RECEIVE AWARDS
Key executives of the Company and its affiliates who are likely to have a
significant impact on the performance of the Company are eligible to
participate in the Plan only if approved by the Committee no later than the
90th day of the applicable calendar year ("Plan Year"). For 1997, the
participants in the Plan will be the Chief Executive Officers. It is possible
that in future years other executive officers of the Company may be added as
participants.
AWARDS AND ADMINISTRATION OF THE PLAN
No later than the 90th day of each Plan Year, the Committee establishes each
participant's Target Award under the Plan. Target Awards are expressed as a
dollar amount payable for attainment of specified levels of performance as
determined under certain "Performance Measures." Actual awards are based on
the level of the Company's performance under the "Performance Measures."
The Performance Measures are Return on Average Assets, Return on Average
Equity, Earnings Per Share, General and Administrative Expenses to Average
Assets and Non-Performing Assets to Total Assets. The Committee will use one
or more such measures to set the performance standards that must be achieved
in a Plan Year for a Plan participant to earn the right to receive payment of
an award. Using the performance standards thus established, the Committee will
adopt, no later than the 90th day of each Plan Year, a payout table which
includes the level of performance for which participants will receive their
Target Awards, as well as the level of awards payable to participants for
performance results that are greater than or less than the predetermined
target levels. The Committee may modify prospectively the table from year to
year provided that such modification is made no later than the 90th day of the
Plan Year. In addition, the Committee may also prospectively amend or
terminate the Plan at any time for any reason. Before any award is paid, the
Committee will certify the level of performance achieved and the resulting
awards earned.
12
<PAGE>
No participant's annual award under the Plan may exceed one and one-half
times his or her target award and in no event may any participant's award
exceed $750,000 for any Plan Year. The Committee retains discretion to reduce
the award for any Plan participant below the award that would otherwise be
payable in accordance with the Plan.
Awards under the Plan generally will be payable in cash on or before the
March 20th next following the end of the Plan Year during which the award was
earned.
The following table sets forth the Target Awards that would be payable to
the persons who are eligible to participate in the Plan currently if the
Company's performance meets the performance targets established for the 1997
Plan Year. The Committee has determined to use all of the Performance Measures
for the 1997 Plan Year and to give them equal weight. There is no assurance
that the Company will achieve the level of performance that will result in the
payment of the Target Awards or any awards under the Plan.
ANNUAL INCENTIVE BONUS PLAN
<TABLE>
<CAPTION>
NAME AND POSITION 1997 TARGET AWARDS(1)
----------------- ---------------------
<S> <C>
Herbert M. Sandler, $100,000
Chairman and Chief Executive Officer
Marion O. Sandler, $100,000
Chairman and Chief Executive Officer
James J. Judd, N/A(2)
Senior Executive Vice President
Russell W. Kettell, N/A(2)
President
Dirk S. Adams, N/A(2)
Group Senior Vice President
All executive officers, as a group $200,000
All directors who are not executive officers, as a N/A(2)
group
All employees who are not executive officers, as a N/A(2)
group
</TABLE>
- --------
(1) The maximum award payable is 150 percent of each individual's target
award.
(2) Not participating in the Plan for 1997.
CERTAIN TAX ASPECTS
Section 162(m) of the Internal Revenue Code limits the tax deductibility to
the Company of compensation paid to the Company's two Chief Executive Officers
and to each of the three other most highly compensated executive officers. The
Company generally may deduct compensation paid to such an officer only to the
extent that the compensation does not exceed $1 million during any fiscal year
or is "performance-based" as defined in Section 162(m). Because compensation
paid under the Plan is intended to be "performance-based" under Section
162(m), adoption of the Plan will preserve the tax deductibility of
compensation paid under the Plan to the Chief Executive Officers and any other
executive officers participating in the Plan.
13
<PAGE>
APPROVAL OF AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP to serve as the
Company's independent auditors for the year ending December 31, 1997, subject
to stockholder approval. If the stockholders do not vote in favor of the
appointment of Deloitte & Touche LLP, the Board of Directors will consider the
selection of other auditors.
Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting of Stockholders and will be available to respond to appropriate
questions. They will be given the opportunity to make a statement, if they
desire to do so.
Deloitte & Touche LLP has served as the Company's independent auditors since
1963 and was selected by the Board of Directors to serve in 1996, which
selection was ratified and approved by the stockholders of the Company on
April 30, 1996. In order to be adopted, the proposal to approve the
appointment of Deloitte & Touche LLP as auditors for the Company must be
approved by the holders of a majority of the outstanding shares of Common
Stock present or represented by proxy and entitled to vote at the meeting. The
Board of Directors recommends a vote FOR the appointment of Deloitte & Touche
LLP to serve as the Company's independent auditors for the year ending
December 31, 1997.
STOCKHOLDERS' PROPOSALS FOR NEXT ANNUAL MEETING
Stockholders' proposals intended to be presented at the 1998 Annual Meeting
of Stockholders of the Company must be received by the Company not later than
November 11, 1997, for inclusion in the Company's Proxy Statement and form of
proxy relating to that meeting. Proposals should be addressed to the Company
at 1901 Harrison Street, Oakland, California, 94612, Attention: Corporate
Secretary.
OTHER MATTERS
The management knows of no business other than that mentioned above to be
transacted at the Annual Meeting, but if other matters do properly come before
the meeting it is the intention of the persons named in the enclosed proxy to
vote thereon in accordance with their judgment, and discretionary authority to
do so is included in the proxy.
GOLDEN WEST FINANCIAL CORPORATION
Oakland, California
March 14, 1997
14
<PAGE>
EXHIBIT A
GOLDEN WEST FINANCIAL CORPORATION
ANNUAL INCENTIVE BONUS PLAN
(EFFECTIVE JANUARY 1, 1997)
SECTION 1. ESTABLISHMENT AND PURPOSE
1.1 Purpose. Golden West Financial Corporation (the "Company") hereby
establishes the Golden West Financial Corporation Incentive Bonus Plan (the
"Plan"), effective as of January 1, 1997. The Plan is designed to preserve the
deductibility to the Company of certain compensation paid to executive
officers of the Company. Further, the Plan is intended to offer the additional
benefit of having a portion of executive compensation directly linked to the
Company's performance.
1.2 Effective Date. The Plan is effective as of January 1, 1997, subject to
the approval by an affirmative vote, at the 1997 Annual Meeting of
Stockholders, or any adjournment thereof, of the holders of a majority of the
outstanding shares of the common stock of the Company, present in person or by
proxy and entitled to vote at such meeting.
SECTION 2. DEFINITIONS
2.1 Defined Terms. When used in the Plan, the following terms shall have the
meanings specified below:
2.1.1 "Board" means the Company's Board of Directors.
2.1.2 "Committee" means the Compensation Committee of the Board of Directors
of the Company.
2.1.3 "Earnings Per Share" means the number derived by dividing net earnings
after taxes available to common shareholders for the Plan Year by the
weighted-average number of common shares outstanding (calculated using daily
averages, based on actual days during the year) for the Plan year.
2.1.4 "General and Administrative Expenses to Average Assets" means the
ratio derived by dividing non-interest expense (excluding FDIC insurance
premiums and expenses related to mutual funds) for the Plan Year by average
assets for the Plan Year. For the purposes of this definition, average assets
is computed by adding the beginning balance and each monthend balance during
the year and dividing by 13.
2.1.5 "Maximum Award" means the maximum award pursuant to this Plan to any
individual Participant for any one Plan Year, which shall be $750,000.
2.1.6 "Non-Performing Assets to Total Assets" means the ratio derived by
dividing the sum of real estate acquired through foreclosure plus loans 90
days or more past due by the total assets of the Company as of the end of the
Plan Year.
2.1.7 "Participant" means as to any Plan Year a key executive of the Company
who is likely to have a significant impact on the performance of the Company.
An employee must be approved as a Participant by the Committee.
2.1.8 "Performance Measures" means one or more of the following: Return on
Average Assets; Return on Average Equity; Earnings Per Share; General and
Administrative Expenses to Average Assets; and Non-Performing Assets to Total
Assets.
2.1.9 "Plan Year" means the 1997 calendar year and each succeeding calendar
year, through 2002.
2.1.10 "Return on Average Assets" means the percentage derived by dividing
the Company's net earnings after taxes for the Plan Year by the average assets
for the Plan Year. For the purposes of this definition, average assets is
computed by adding the beginning balance and each monthend balance during the
Plan Year and dividing by 13.
15
<PAGE>
2.1.11 "Return on Average Equity" means the percentage derived by dividing
the Company's net earnings after taxes for the Plan Year by the average
stockholders' common equity for the Plan Year. For the purposes of this
definition average stockholders' common equity is calculated by adding the
beginning balance and each monthend balance during the Plan Year and dividing
by 13.
2.1.12 "Target Award" means the target incentive opportunity for an
individual, expressed as a dollar amount payable for the attainment of a
target level of performance. The schedule of individual Target Awards shall be
determined by the Committee in accordance with Section 3.1.
SECTION 3. AWARDS AND COMMITTEE DETERMINATIONS
3.1 Opportunity. The Committee shall approve participation in the Plan and
establish a Target Award for each Participant, based on his or her role and
responsibilities, within the first 90 days of the applicable Plan Year.
3.2 Awards. Payment under this Plan will be based on a payout table adopted
by the Committee (in its sole discretion) in writing within the first 90 days
of the Plan Year. The Committee reserves the right (in its sole discretion) to
modify the table from year to year, provided that such modification is done
within the first 90 days of the applicable Plan Year. The payout table will
provide 100% of a Participant's Target Award if a certain level of
performance, as determined using the Performance Measures, is achieved and
greater or lesser awards for performance that exceeds or is less than,
respectively, the level at which 100% of Target Awards are paid. No
participant's award under this Plan may exceed 1.5 times his or her Target
Award, and in no event may a Participant's award under this Plan exceed the
Maximum Award.
3.3 Reduction Prior to Payment. The Committee, in its sole discretion, may
reduce (but not increase) the award for any Participant below the award that
would otherwise be payable in accordance with the Plan.
3.4 Determination. The Committee shall determine, in writing, the level of
performance achieved and the respective percentage of Target Awards earned for
the Plan Year prior to payment of awards.
SECTION 4. PAYMENT OF AWARDS
4.1 Right to Receive Payment. Any award that may become due under this Plan
shall be made solely from the general assets of the Company, normally on or
before the March 20th next following the end of the Plan Year during which the
award was earned. Nothing in this Plan shall be construed to create a trust or
to establish or evidence any Participant's claim of any right other than as an
unsecured general creditor with respect to any payment to which he or she may
be entitled.
4.1.1 Employment for Plan Year. If a Participant's employment with the
Company continues for the entire Plan Year, the Participant shall be entitled
to receive full payment of the award amount determined under Section 3 for
such Plan Year in accordance with the terms of the Plan.
4.1.2 Resignation, Disability or Death. In the event of the death,
disability or resignation of a Participant during a Plan Year, the Committee
(in its sole discretion) will determine the amount of the partial award (if
any) to be paid to such Participant for such Plan Year. Payments will be made
in cash at the same time as other awards to Participants are made for the same
Plan Year.
4.1.3 Discharge. If during a Plan Year, a Participant's employment with the
Company terminates by reason of discharge, then the Participant will not be
eligible for and shall forfeit any award under this Plan for the Plan Year.
4.2 Form of Payment. Awards under this Plan will be made in cash.
4.3 Beneficiaries. Each Participant may designate, in writing and on such
form as the Company may prescribe, one or more beneficiaries to receive any
amount that is payable after the individual's death. In the
16
<PAGE>
event of a Participant's death, any award that is payable to such Participant
shall be paid to his or her beneficiary or, in the event that no beneficiary
has been designated, to his or her estate.
SECTION 5. ADMINISTRATION
5.1 Committee. The Plan shall be administered by the Committee.
5.2 Rules and Interpretation. The Committee shall be vested with all
discretion and authority as it deems necessary or appropriate to administer
the Plan and to interpret the provisions of the Plan. Any determination,
decision or action of the Committee in connection with the construction,
interpretation, administration or application of the Plan shall be final,
conclusive and binding upon all persons and shall be given the maximum
deference permitted by law.
5.3 Records. The records of the Committee with respect to the Plan shall be
conclusive on all Participants and their beneficiaries and on all other
persons.
5.4 Tax Withholding. The Company shall withhold all applicable taxes
required by law from any payment, including any federal, FICA, state and local
taxes.
SECTION 6. GENERAL PROVISIONS
6.1 Nonassignability. Prior to the time of any payment under the Plan, a
Participant shall have no right by way of anticipation or otherwise to assign
or transfer any interest under this Plan.
6.2 Employment Rights/Participation. The establishment and subsequent
operation of the Plan, including eligibility as a Participant, shall not be
construed as conferring any legal or other rights upon any Participant or any
other individual for the continuation of his or her employment for any Plan
Year or any other period. The Company expressly reserves the right, which may
be exercised at any time and without regard to when during a Plan Year or
other accounting period such exercise occurs, to discharge any individual
and/or treat him or her without regard to the effect which such treatment
might have upon him or her as a Participant in this Plan. Being a Participant
in any one Plan Year does not confer any right to be named as a Participant
for any succeeding Plan Year.
6.3 No Individual Liability. No member of the Committee or the Board, or any
officer of the Company, shall be liable for any determination, decision or
action made in good faith with respect to the Plan or any award made under the
Plan.
6.4 Severability; Governing Law. If any particular provision of this Plan is
found to be invalid or unenforceable, such provision shall not affect the
other provisions of the Plan, but the Plan shall be construed in all respects
as if such invalid provision had been omitted. The provisions of the Plan
shall be governed by and construed in accordance with the laws of the State of
California.
6.5 Affiliates of the Company. Requirements referring to employment with the
Company or payment of awards can be performed through the Company or any
affiliate of the Company, as determined by the Committee.
6.6 1997 Plan Year. For Plan Year 1997, all actions that would otherwise be
required to be taken prior to the beginning of a Plan Year shall be taken
prior to April 1, 1997.
SECTION 7. AMENDMENT AND TERMINATION
The Committee may prospectively amend or terminate the Plan at any time and
for any reason.
17
<PAGE>
GOLDEN PROXY PROXY SOLICITED BY BOARD OF DIRECTORS
WEST The undersigned hereby appoints Marion O. Sandler, Bernard A.
FINANCIAL Osher, and J. L. Helvey, or any of them, each with power of
CORPORATION substitution, as proxies of the undersigned to attend the
- ------------ Annual Meeting of Stockholders of Golden West Financial
Corporation (the "Company"), to be held on the fourth floor
of the Company's headquarters located at 1901 Harrison
Street, Oakland, California on May 1, 1997, at 11:00 a.m.,
and any adjournment thereof, and to vote the number of shares
of Common Stock, $.10 par value, of the Company, which the
undersigned would be entitled to vote if personally present
on the following:
(1)ELECTION OF DIRECTORS
[_FOR]all nominees (except as marked to the contrary below)
[_WITHHOLD]AUTHORITY to vote for all nominees listed below
Maryellen B. Cattani, Kenneth T. Rosen, Herbert M. Sandler
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL, WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
(2)APPROVE THE ADOPTION OF THE COMPANY'S ANNUAL INCENTIVE BONUS PLAN.
[_] FOR [_] AGAINST [_] ABSTAIN
(3) RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP, to serve as the
Company's independent auditors for the year ended December 31, 1997.
[_] FOR [_] AGAINST [_] ABSTAIN
(4)In their discretion, upon all other matters as may properly be brought
before the meeting or any adjournment thereof.
(Continued and to be signed on reverse side)
FOLD AND DETACH HERE
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF
GOLDEN WEST FINANCIAL CORPORATION
The Annual Meeting of Stockholders of Golden West Financial Corporation (the
"Company") will be held on the fourth floor of the Company's headquarters
located at 1901 Harrison Street, Oakland, California on Thursday, May 1, 1997,
at 11:00 a.m. for the following purposes:
(1) To elect three members of the Board of Directors to hold office for
three-year terms and until their successors are duly elected and
qualified;
(2) To approve the adoption of the Golden West Financial Corporation Annual
Incentive Bonus Plan;
(3) To ratify the selection of independent auditors; and
(4) To transact such other business as may properly come before the meeting
or any adjournment thereof.
The close of business on March 3, 1997 has been fixed as the record date for
the determination of stockholders entitled to notice of and to vote at this
meeting or any adjournment thereof. A list of such stockholders will be
available at the time and place of the meeting and, during ten days prior to
the meeting, at the office of the Secretary of Golden West Financial
Corporation, 1901 Harrison Street, Oakland, California.
By order of the Board of Directors
ROBERT C. ROWE
Senior Vice President and Secretary
LOGO
March 14, 1997
IMPORTANT: TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE, DATE,
SIGN AND MAIL THE ENCLOSED PROXY PROMPTLY IN THE RETURN ENVELOPE WHICH
HAS BEEN PROVIDED.
<PAGE>
(Continued from other side)
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH INSTRUCTIONS GIVEN. IN THE
ABSENCE OF SUCH INSTRUCTIONS, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS NOMINATED BY MANAGEMENT AND FOR PROPOSALS 2 AND 3.
Please date and sign below exactly as your name or names appear hereon. If
more than one name appears, all should sign. Joint owners should each sign
personally. Corporate proxies should be signed in full corporate name by an
authorized officer and attested. Persons signing in a fiduciary capacity should
indicate their full names in such capacity.
__________________________________
(Signature of Stockholder)
__________________________________
(Signature of Stockholder)
Dated ______________________, 1997
STOCKHOLDERS ARE URGED TO COMPLETE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE.
FOLD AND DETACH HERE
