<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 240.14a-11(c) or 240.14a-12
Golden West Financial 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
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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
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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<PAGE> 2
GOLDENWEST LOGO
1901 HARRISON STREET, OAKLAND, CALIFORNIA 94612
March 16, 1998
Dear Stockholder:
The Annual Meeting of Stockholders of Golden West Financial Corporation
will be held May 5, 1998, commencing 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,
-------------------------- ---------------------------
SIG SIG
HERBERT M. SANDLER MARION O. SANDLER
Chairman of the Board and Chairman of the Board and
Chief Executive Officer Chief Executive Officer
<PAGE> 3
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 Tuesday, May 5, 1998,
commencing 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 ratify the selection of independent auditors; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on March 9, 1998 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
SIG
ROBERT C. ROWE
Senior Vice President and Secretary
March 16, 1998
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> 4
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 5, 1998 ("Annual Meeting") 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 16, 1998.
VOTING SECURITIES
Only stockholders of record on the books of the Company at the close of
business on March 9, 1998 ("Record Date") will be entitled to vote at the Annual
Meeting. On the Record Date there were outstanding 57,162,754 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. Each class of directors
consists of three directors. The second class of directors is being elected at
the 1998 Annual Meeting and will serve until the 2001 Annual Meeting. The third
class of directors will serve until the 1999 Annual Meeting and the first class
of directors will serve until the 2000 Annual Meeting.
Three directors are to be elected at the 1998 Annual Meeting. Patricia S.
King, Marion O. Sandler and Leslie Tang Schilling are nominees for directors.
Ms. King and Mrs. Sandler were elected directors by a vote of the stockholders
at the 1995 Annual Meeting of Stockholders. Ms. Tang Schilling was appointed by
the Board of Directors in July 1996 to fill a vacancy in the second class of
directors. Ms. Schilling is President of L.T.D.D., Inc. and Golden Bay
Investments, Inc., which are real estate and investment management companies.
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 management of the Company 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.
1
<PAGE> 5
Set forth below is certain information concerning the nominees and the
members of the Board of Directors who will continue in office after the 1998
Annual Meeting:
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED AS OF
FEBRUARY 28, 1998(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) Attorney-at-Law and Executive 1996 54 2,000 --
Vice President, General
Counsel and Secretary of APL,
Ltd. (2)
Louis J. Galen(III) Retired (Since 1982) Company 1959 72 1,167,998(3) 2.0%
Officer, Private Investor
Antonia Hernandez(III) President and General Counsel 1995 50 720 --
of The Mexican American Legal
Defense and Educational Fund
Patricia A. King(II) Professor of Law, Georgetown 1994 55 100 --
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 70 3,147,150 5.4%
Butterfield, Auctioneers
Kenneth T. Rosen(I) Professor of Business 1984 49 3,000 --
Administration, Haas School
of Business; Chairman of the
Fisher Center for Real Estate
and Urban Economics,
University of California,
Berkeley
Herbert M. Sandler(I)(4) Chairman of the Board and 1963 66 5,255,547(5)(6) 9.0%
Chief Executive Officer of
the Company, World Savings
and Loan Association and
World Savings Bank, FSB
Marion O. Sandler(II)(4) Chairman of the Board and 1963 67 5,665,377(5)(7) 9.7%
Chief Executive Officer of
the Company, World Savings
and Loan Association and
World Savings Bank, FSB
Leslie Tang President of L.T.D.D., Inc. 1996 43 1,000 --
Schilling(II) and Golden Bay Investments,
Inc.(8)
All directors and officers as a group (16 persons) 11,093,585(9) 19.0%
</TABLE>
- ---------------
(1) Held directly with sole voting and investment powers unless otherwise noted,
subject to community property laws where applicable.
(2) Ms. Cattani ended her employment with APL, Ltd. in December, 1997. She is a
member of the Board of Directors of ABM Industries Incorporated.
(3) Includes 1,063,498 shares held in trust by Mr. Galen with sole voting and
investment powers. Also includes 34,000 shares, with shared voting and
investment powers, held in a charitable trust for which Mr. Galen is
trustee.
(4) Member of the Executive Committee.
(5) Includes for both Herbert M. Sandler and Marion O. Sandler, husband and
wife, 4,752,027 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
2
<PAGE> 6
Mr. and Mrs. Sandler's descendants with Mr. and Mrs. Sandler as co-trustees,
and 468,420 shares which Mr. Sandler may acquire upon exercise of employee
stock options exercisable on February 28, 1998, 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 descendants, 356,580 shares
with voting and investment powers held in trusts for the benefit of Mr. and
Mrs. Sandler's descendants, 163,208 shares with shared voting and investment
powers held in trusts for the benefit of Mr. and Mrs. Sandler's descendants
with Mr. and Mrs. Sandler as co-trustees, and 476,710 shares which Mrs.
Sandler may acquire upon exercise of employee stock options exercisable on
February 28, 1998, or within 60 days thereafter.
(8) Leslie Tang Schilling is a member of the Board of Directors of Tristate
Holdings, Ltd.
(9) Includes 5,546,589 shares as to which officers and directors share with
others voting and/or investment powers. Also includes 1,275,570 shares which
certain officers may acquire upon the exercise of employee stock options
exercisable on February 28, 1998, 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.
Herbert M. Sandler and Marion O. Sandler are husband and wife. Bernard A.
Osher is the brother of Mrs. Sandler. Herber 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 1997, 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 1997 were Maryellen B.
Cattani, Louis J. Galen, and Antonia Hernandez. Maryellen B. Cattani was
appointed a member of the Nominating Committee at the May 1997 Board Meeting.
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 Nominating Committee did not meet
during 1997. The members of the Audit Committee in 1997 were Maryellen B.
Cattani, Louis J. Galen, and Kenneth T. Rosen. 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. The Audit Committee held four meetings of its members during 1997. The
members of the Compensation and Stock Option Committees in 1997 were Patricia A.
King, Kenneth T. Rosen, and Leslie Tang Schilling. The Compensation Committee
met twice during 1997. 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 and to administer the Company's Annual
Incentive Bonus Plan (the "Incentive Plan"), which was approved by the Company's
stockholders at the 1997 Annual Meeting and became effective as of January 1,
1997. In addition, the members of the Compensation Committee serve as the
Company's Stock Option Committee which approves the 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 January
1997 to review and recommend to the Board of Directors the Incentive Plan and to
establish the performance standards and targets under such plan. At that time,
the Compensation Committee also reviewed and recommended to the Board of
Directors the salaries for 1997 of the Company's chief executive officers
("Chief Executive Officers") who had voluntarily taken a reduction in annual
salary in order to preserve the deductibility to the Company of their total
compensation (see Tax Deductibility of Executive Compensation below). The
3
<PAGE> 7
Compensation Committee also met in May of 1997 to recommend to the Board of
Directors salaries, for the period May 1, 1997 through April 30, 1998, for the
Company's President and Senior Executive Vice President (together with the Chief
Executive Officers, the "Senior Executive Officers"). The Compensation Committee
also met in February 1998 to determine the incentive awards payable to the
Company's Chief Executive Officers under the terms of the Incentive Plan for the
Company's 1997 performance. 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 addition, concerning the incentive awards payable under the
Incentive Plan, the amounts paid are directly tied to the Company's performance.
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. As determined by
the Committee, the peer group consisted of the top performing regional bank
holding companies that had between $30 billion and $50 billion in assets as of
December 31, 1996 and a primary bank operating subsidiary with a rating from
Moody's of A1 or better and from Standard and Poor's of A+ or better (Boatmen's
Bancshares, Corestates Financial Corp., First Bank System, Mellon Bank Corp.,
National City 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).
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 chargeoffs 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 subsidiaries, World Savings
and Loan Association and World Savings Bank, FSB; the attainment of regulatory
capital standards by the operating subsidiaries; 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 1994 through 1996, 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.
The Committee elected not to award stock options to the Company's executive
officers during 1997.
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
4
<PAGE> 8
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). The Incentive Plan,
which is designed to preserve the deductibility of certain cash compensation by
qualifying it as "performanced-based," was approved 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). Incentive stock
options granted under the Company's Stock Option Plan generally do not entitle
the Company to a tax deduction without regard to Section 162(m).
1997 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICERS
Effective as of January 1, 1997, the Chief Executive Officers' salaries
were reduced, voluntarily, from their previous levels. This was done in order to
ensure the continued deductibility to the Company of the Chief Executive
Officers' compensation. Such reduction was accompanied by the adoption of the
Incentive Plan, which provides for the potential award of incentive-based
compensation which will be fully deductible to the Company.
The Committee met in January 1997 to review and recommend to the Board of
Directors the adoption of the Incentive Plan and the establishment of
performance standards and targets for 1997. At that time, the Compensation
Committee also reviewed the salaries of the Company's Chief Executive Officers
and determined to recommend no change in such salaries in light of the Company's
performance and the adoption of the Incentive Plan. The Committee also met in
February 1998 to certify the Company's 1997 performance under the Incentive Plan
and to determine the amount of awards payable to the Chief Executive Officers
for 1997. During the year ended December 31, 1997 (the "1997 Plan Year"), the
Company met or exceeded the performance targets established by the Committee at
the beginning of the 1997 Plan Year. Such targets were based on 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. As a result of the Company's performance during the 1997 Plan Year, the
Committee confirmed an award under the Incentive Plan to each Chief Executive
Officer in the amount of $71,734. This award was determined based on an
indicated award under the Incentive Plan of $105,000, adjusted pursuant to the
Committee's discretionary authority so that the total of salary and incentive
award did not exceed a five percent increase over the Chief Executive Officers'
salaries during 1996.
COMPENSATION COMMITTEE
Patricia A. King, Chairman
Kenneth T. Rosen
Leslie Tang Schilling
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, 1997, except
that, with respect to Director Hernandez, neither a Form 4 nor a Form 5 were
filed in a timely manner for certain stock purchases by Ms. Hernandez for the
benefit of her minor children.
5
<PAGE> 9
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, 1998, 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>
Dodge & Cox, Incorporated...................... 4,375,612(1) 7.7%
One Sansome Street
San Francisco, CA 94104
Wellington Management Company/................. 5,463,500(2)(4) 9.6%
Thorndike, Paine & Lewis
75 State Street
Boston, MA 02109
The Windsor Funds, Inc.,....................... 5,463,300(3)(4) 9.6%
a member of the Vanguard Group of
Investment Companies
Vanguard Financial Center
Valley Forge, PA 19482
James T. Judd.................................. 115,710(5) .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............................. 414,310(5) .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.................................. 31,100(5) .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 4,375,612 shares with sole disposition power and 3,859,512 with
sole voting power, based upon SEC Schedule 13G dated February 12, 1998.
(2) Includes 5,463,500 shares with shared disposition power and 200 shares with
shared voting power, based upon SEC Schedule 13G dated January 14, 1998.
(3) Includes 5,463,300 shares with shared disposition power based upon SEC
Schedule 13G dated February 9, 1998.
(4) The shares reported by the Windsor Fund are also included in those reported
by Wellington Management Company.
(5) Includes 90,000, 144,240, and 22,900 shares which Messrs. Judd, Kettell, and
Adams, respectively, may acquire upon exercise of employee stock options
exercisable on February 28, 1998 or within 60 days thereafter.
6
<PAGE> 10
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, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------------------- ------------
OTHER ANNUAL ALL OTHER
COMPENSATION OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY (A) BONUS (B) (C) (#)(D) (E)
--------------------------- ---- ---------- --------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
HERBERT M. SANDLER 1997 $950,000 $71,734 $9,319 0 $ 4,795
Chairman of the Board and 1996 973,080 -- 8,014 35,000 5,650
Chief Executive Officer of 1995 931,176 -- 9,427 25,000 5,133
the Company, World Savings and
Loan Association and World
Savings Bank, FSB
MARION O. SANDLER 1997 950,004 71,734 14,760 0 4,795
Chairman of the Board and 1996 973,080 -- 8,112 35,000 5,650
Chief Executive Officer 1995 931,176 -- 9,416 25,000 5,133
of the Company, World Savings and
Loan Association and World
Savings Bank, FSB
JAMES T. JUDD 1997 607,108 -- 13,376 0 5,020
Senior Executive Vice President 1996 580,968 -- 9,146 17,500 47,317(F)
of the Company and President and 1995 555,952 -- 7,309 15,000 105,135(F)
Chief Operating Officer of World
Savings and Loan Association and
World Savings Bank, FSB
RUSSELL W. KETTELL 1997 551,232 -- 7,273 0 5,020
President and Treasurer of the 1996 527,492 -- 8,676 17,500 5,650
Company and Senior Executive 1995 504,772 -- 2,659 15,000 5,133
Vice President of World Savings
and Loan Association and World
Savings Bank, FSB
DIRK S. ADAMS 1997 350,004 -- 1,522 0 5,020
Group Senior Vice President of 1996 319,804 -- 2,158 0 5,650
the Company and World Savings 1995 297,000 -- 2,044 2,400 5,133
and Loan Association and World
Savings Bank, FSB
</TABLE>
- ---------------
(A) Amounts shown include cash compensation earned by executive officers.
(B) Amounts shown include cash compensation earned under the Company's
Incentive Plan.
(C) Amounts are for cash reimbursement for income taxes on account of certain
fringe benefits provided to such individuals.
(D) 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.
(E) Amounts shown in this column represent, primarily, except for Mr. Judd,
Company contributions on behalf of each of these officers to the Company's
401(K) plan, $4,750 (1997 and 1996) and $4,620 (1995).
(F) Includes $41,667 in 1996 and $100,000 in 1995, representing the portion of
previously vested and available amounts which Mr. Judd elected to receive
in these years pursuant to a deferred compensation agreement.
7
<PAGE> 11
INDEBTEDNESS OF MANAGEMENT
The following table sets forth information relating to all loans made to
each individual who was a director or officer of the Company during 1997:
<TABLE>
<CAPTION>
HIGHEST UNPAID RANGE OF
INDEBTEDNESS BALANCE INTEREST RATES
SINCE AS OF FROM JAN. 1, 1997
NAME DEC. 31, 1996 FEB. 28, 1998 TO FEB. 28, 1998
---- ------------- ------------- -----------------
<S> <C> <C> <C>
J. L. Helvey $127,957 $125,005 6.009% to 6.207%
Carl M. Andersen 294,585 289,017 6.059 to 6.263
189,806 185,906 7.209 to 7.413
William C. Nunan 304,107 295,626 5.759 to 5.963
</TABLE>
All of the above loans are secured by first trust deeds on single family
residences. J. L. Helvey is an Executive Vice President of the Company and Carl
M. Andersen and William C. Nunan are Senior Vice Presidents of the Company. All
three officers hold their same titles with World Savings and Loan Association
and World Savings Bank, FSB.
DEFERRED AND RETIREMENT 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
the 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, 1997, Messrs. Judd, Kettell, and Adams had
accumulated vested benefits which would entitle them to annual installments
payable as described above of $155,510, $217,550, and $20,940, respectively.
During 1997, the following amounts under the agreements were vested for the
accounts of Messrs. Judd, Kettell, and Adams, respectively: $333,300, $505,500,
and $77,400. In addition, Mr. Judd has $400,000 in fully vested benefits
remaining from a separate deferred compensation agreement that originally
provided 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.
8
<PAGE> 12
STOCK OPTIONS
Information concerning individual grants of stock options made to the two
Chief Executive Officers and to the three most highly compensated executive
officers of the Company during the year ended December 31, 1997 is set forth
below:
OPTION GRANTS TABLE
OPTION GRANTS FOR YEAR ENDED DECEMBER 31, 1997
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
NAME
----
<S> <C>
Herbert M. Sandler No stock options were granted to the two Chief Executive
Marion O. Sandler Officers or to the three most highly compensated executive
James T. Judd officers of the Company during the year ended December 31,
Russell W. Kettell 1997. The Company also did not grant any stock appreciation
Dirk S. Adams rights.
</TABLE>
Information concerning exercises of stock options by these individuals
during the year ended December 31, 1997, 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, 1997 AND
DECEMBER 31, 1997 YEAREND OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED AT DECEMBER 31, 1997 AT DECEMBER 31, 1997(B)
ON EXERCISE VALUE --------------------------- ---------------------------
NAME (#) REALIZED(A) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Herbert M. Sandler............. 76,400 $6,255,632 448,420 55,000 $34,141,078 $2,682,813
Marion O. Sandler.............. 120,000 9,825,600 456,710 55,000 34,851,945 2,682,813
James T. Judd.................. 15,710 1,134,503 80,000 27,500 5,191,375 1,341,406
Russell W. Kettell............. 45,760 3,330,956 134,240 27,500 9,667,330 1,341,406
Dirk S. Adams.................. 8,200 445,141 22,900 0 1,392,881 0
</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.
9
<PAGE> 13
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, 1997 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.
TOTAL SHAREHOLDER RETURN PERFORMANCE GRAPH
LEGENDS
Assumes $100 invested on December 31, 1992 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.
10
<PAGE> 14
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, 1998, 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 1997, which
selection was ratified and approved by the stockholders of the Company on May 1,
1997. 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, 1998.
STOCKHOLDERS' PROPOSALS FOR NEXT ANNUAL MEETING
Stockholders' proposals intended to be presented at the 1999 Annual Meeting
of Stockholders of the Company must be received by the Company not later than
November 16, 1998, 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 16, 1998
11
<PAGE> 15
<TABLE>
<S> <C>
GOLDEN PROXY PROXY SOLICITED BY BOARD OF DIRECTORS
WEST
FINANCIAL The undersigned hereby appoints Herbert M. Sandler, Bernard
CORPORATION A. Osher, and J. L. Helvey, or any of them, each with power
of 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 5, 1998, commencing 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 listed below
(except as marked to the contrary below)
<CAPTION>
<S> <C>
(1) ELECTION OF DIRECTORS [ ] WITHHOLD AUTHORITY to vote
for all nominees listed below
</TABLE>
Patricia A. King, Marion O. Sandler, Leslie Tang Schilling
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL, WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
(2) RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP, to serve as the
Company's independent auditors for the year ended December 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) 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)
- ------------------------------------------------------------------------
O FOLD AND DETACH HERE O
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 Tuesday, May 5, 1998,
commencing 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 ratify the selection of independent auditors; and
(3) To transact such other business as may properly come before the meeting
or any adjournment thereof.
The close of business on March 9, 1998 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
SIG
ROBERT C. ROWE
Senior Vice President and Secretary
March 16, 1998
IMPORTANT: TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE DETACH,
COMPLETE, DATE, SIGN AND MAIL THE ATTACHED PROXY PROMPTLY IN THE
RETURN ENVELOPE WHICH HAS BEEN PROVIDED.
<PAGE> 16
(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 PROPOSAL 2.
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 , 1998
Stockholders are Urged to Complete, Sign and Return This Proxy Promptly in the
Enclosed Envelope.
- ------------------------------------------------------------------------
FOLD AND DETACH HERE O
