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:
[X] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)14a-6(e)(2))e
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
First Hawaiian Inc.BANCWEST CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee requiredrequired.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set(set forth the amount on which
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
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was paid previously. Identify HHI (Herfindahl-Hirschman Index) the previous
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Notes:
PRELIMINARY COPY
[LOGO OF FIRST HAWAIIAN INC.]BANCWEST CORPORATION
P.O. Box 3200
Honolulu, Hawaii 96847
March ___, 2001
Dear Fellow Stockholder:
On behalf of the Board of Directors of BancWest Corporation, I
cordially invite you to attend the 2001 annual meeting of stockholders. The
annual meeting will be held at 10:30 a.m., Pacific Time, on Thursday, April
19, 2001, in the Bank of the West Board Room, 25th Floor, 180 Montgomery
Street, San Francisco, California.
We also invite stockholders to view the annual meeting via live
videoconference in the 30th Floor Board Room of First Hawaiian Center, 999
Bishop Street, Honolulu, Hawaii, beginning at 7:30 a.m., Hawaii Standard
Time. Stockholders present at the Honolulu site will be able to view and
listen to the annual meeting as it occurs and ask questions. However,
stockholders will not be able to cast votes at that site, nor withdraw any
proxies they submitted previously.
We urge all stockholders to read the enclosed Notice of Annual Meeting
of Stockholders and Proxy Statement and to sign and return their proxies.
You may also vote by telephone or Internet by following the instructions on
the enclosed proxy card. It is important that your views be represented,
whether or not you are able to be present at the annual meeting.
We appreciate your continued interest in BancWest Corporation, which
is reflected by the fact that so many of you cast your votes each year. We
are confident that you will continue to do so.
Sincerely,
/s/ Walter A. Dods, Jr.
Walter A. Dods, Jr.
Chairman and Chief Executive Officer
BANCWEST CORPORATION
P.O. Box 3200
Honolulu, Hawaii 96847
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS OF FIRST HAWAIIAN, INC.STOCKHOLDERS:
The Annual Meetingannual meeting of the Stockholdersstockholders of First Hawaiian, Inc.BancWest Corporation (the
"Corporation") will be held on April 16, 199819, 2001 at 9:10:30 o'clock A.M.a.m., Pacific Time, (the
"Annual Meeting") in the 30th
floorBank of the West Board Room, of First Hawaiian Center, 999 Bishop25th Floor, 180 Montgomery
Street, Honolulu, Hawaii,San Francisco, California, for the following purposes:
1. For the holders of Common Stock to elect four Non-Class A Directors to
serve terms of three years.
2. For the holders of Class A Common Stock to elect three Class A Directors
to serve terms of three years.
3. To elect 5 directors forvote upon a term of 3 years untilproposal to increase the Annual Meeting of
Stockholders in 2001, or until their successors are elected and qualified.
2. To fix the total number of Directors at 15.
3.authorized shares of
Common Stock and of Class A Common Stock.
4. To approvevote upon a proposal to increase the number of shares available for
grants under the 1998 Stock Incentive Plan.
4.5. To elect the Auditorvote upon a proposal to approve certain material terms of the Corporation.
5.Long-Term
Incentive Plan, so as to make certain awards tax deductible.
6. To vote upon a proposal to elect PricewaterhouseCoopers LLP as the
Corporation's auditor.
7. To transact such other business as may properly be brought before the
meeting and any adjournments thereof. The Corporation knows of no other
business to be brought before the meeting.
Only stockholders of record at the close of business on February 20, 1998,
will be26, 2001 are
entitled to notice of, and to vote at, the Annual Meeting and any
adjournments thereof.Meeting.
BY ORDER OF THE BOARD OF DIRECTORS:
HerbertWilliam E. WolffAtwater
Senior Vice President, General
Counsel and Secretary
Dated: March 4, 1998___, 2001
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING. PLEASE MARK,
DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ACCOMPANYING POSTAGE-
PAID ENVELOPE. YOU MAY ALSO VOTE BY TELEPHONE OR INTERNET BY FOLLOWING THE
INSTRUCTIONS ON THE ENCLOSED PROXY. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW
YOUR PROXY AND VOTE IN PERSON IF YOU WISH TO DO SO.
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[LOGO OF FIRST HAWAIIAN INC.]BANCWEST CORPORATION
P.O. Box 3200
Honolulu, Hawaii 96847
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of First Hawaiian, Inc.BancWest Corporation (the "Corporation") of proxies from
the holders of Common Stock of the Corporation to be used in the voting at the
Annual Meetingannual meeting of Stockholdersstockholders of the Corporation to be held on April 16, 1998,19, 2001,
and any adjournments thereof.thereof (the "Annual Meeting").
The annual report of the Corporation, containingand consolidated financial statements
as at and for the year ended December 31, 1997, is2000, are being mailed to all stockholders
simultaneously with the mailing of this proxy statement. This proxy statement
and the form of proxy are first being distributed to stockholders on or about
March 4, 1998.
First Hawaiian, Inc.___, 2001.
BancWest Corporation is a holding company for Bank of the West, First
Hawaiian Bank (the
"Bank"), First Hawaiian Creditcorp, Inc.,and FHL Lease Holding Company, Inc., FHI
International, Inc., and Pacific One Bank.
OUTSTANDING SHARES; The principal offices of the
Corporation are located at 999 Bishop Street, Honolulu, Hawaii 96813.
RECORD DATE AND VOTING RIGHTS
AtThe Board of Directors has fixed the close of business on February 20, 199826, 2001
as the record date (the "record date""Record Date") there were
_____________for the determination of stockholders
entitled to receive notice of, and to vote at, the Annual Meeting. Only
stockholders of record as of the Record Date will be entitled to vote at the
Annual Meeting or any adjournment thereof. The Corporation has two classes of
capital stock ("Voting Stock") outstanding: Common Stock, par value $1.00 per
share ("Common Stock"), and Class A Common Stock, par value $1.00 per share
("Class A Common Stock"). As of the close of business on January 31, 2001, the
Corporation had outstanding 68,560,949 shares of common stock (the "Common Stock")Common Stock and 56,074,874
shares of Class A Common Stock.
Each share of Voting Stock outstanding on the Corporation
outstanding. Each outstanding shareRecord Date is entitled to one
vote on each matter submitted to a vote of stockholders; there is no cumulative voting.
The following table sets forth information asstockholders at the Annual Meeting,
other than the election of directors. Only the holders of Common Stock will be
entitled to vote for the election of the record dateNon-Class A Directors, and only the
holders of Class A Common Stock will be entitled to vote for each
person known by the Corporation to be the beneficial owner of more than 5%election of the
Class A Directors (the terms "Non-Class A Directors" and "Class A Directors" are
defined below under "Election of Directors"). Each outstanding share of Common
Stock:
Name and Amount and
Address of Nature of Percent
Beneficial Beneficial of
Owner Ownership Class
---------- ---------- -------
David M. Haig, Fred C. Weyand, Paul Mullin Ganley and 7,900,000 shares _____
Walter A. Dods, Jr., as Trustees under the Will and of the
Estate of S.M. Damon, 999 Bishop Street,
Honolulu, Hawaii 96813(1)
Trust and Investments Division, First Hawaiian Bank, 2,567,238 shares(2) _____
P.O. Box 3200, Honolulu, Hawaii 96847
Alexander & Baldwin, Inc., 822 Bishop Street 1,692,894 shares _____
Honolulu, Hawaii 96813(3)
(1)Messrs. Haig, Weyand, Ganley and Dods are Directors of the Corporation. Mr.
Dods is the Chairman and Chief Executive Officer of the Corporation. The
Trustees have shared voting and investment power as to sharesStock (other than Common Stock owned by the Damon Estate.
(2)The shares held byholders of Class A Common Stock)
will be entitled to one vote in the Trustelection of Non-Class A Directors, and Investments Divisioneach
outstanding share of Class A Common Stock will be entitled to one vote in fiduciary accounts
include: 1,061,950 shares as to which it has sole voting powerthe
election of Class A Directors. Unless otherwise noted, the term "director"
includes the Non-Class A Directors and 978,236
shares as to which it has sole investment power; 1,260,864 shares as to which
it has shared voting powerthe Class A Directors.
VOTING AND REVOCABILITY OF PROXIES
Your vote is important and 1,328,688 shares as to which it has shared
investment power; 244,424 shares as to which sole voting power is retained by
the settlors of the trusts; and 260,314 shares as to which sole investment
power is held by outside investment advisers.
(3)Mr. John C. Couch, a Director of the Corporation, is the Chairman of the Board of Directors urges you to exercise your
right to vote.
Stockholders of Alexander & Baldwin, Inc. Alexander & Baldwin, Inc. has
solerecord may submit proxies by mail, by Internet, or by
telephone. Stockholders voting by mail should mark, date, sign and investment power as to shares shownreturn the
proxy card in the above table.
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PROXY VOTINGenvelope furnished. Stockholders voting by Internet or by
telephone should follow the instructions on the enclosed proxy card. Telephone
and Internet voting procedures are designed to verify stockholders through use
of a control number that is provided on each proxy card. Stockholders who hold
shares beneficially through a nominee (such as a bank or broker) may be able to
vote by telephone or the Internet if those services are offered by the nominee.
Proxies in the accompanying form duly executed and received by the Corporation at any time before the Annual Meeting,
and not revoked or superseded before being voted, will be voted at the Annual
Meeting. Where a specification is indicated inby the proxy, it will be voted in
accordance with the specification. Where no specification is indicated, the
proxy will be voted "for" the election of each nominee for Non-Class A Director,
and "for" each other proposal recommended by the Board of Directors in this
Proxy Statement. If any other proposals are brought before the meeting and
submitted to a vote, all proxies will be voted in accordance with the recommendations set forth in this Proxy Statement and in the
discretionjudgment
of the proxies named therein on all other matters properly to come
beforepersons holding the meeting or any adjournment thereof.
Proxies inproxies.
Until exercised at the accompanying formAnnual Meeting, proxies may be revoked or superseded
at any time
before they are voted by submitting a proxy of a later date (whether by mail, Internet or telephone),
by written notification received by the Secretary of the Corporation prior to
the Annual Meeting.Meeting or by attending the Annual Meeting and voting in person.
Attendance in person at the Annual
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Meeting does not of itself revoke a proxy previously given, but any stockholder
who attendspersonally present at the Annual Meeting in person
is free tomay revoke any proxy previously given
and vote his or her shares in person.
PROXY SOLICITATION
The Corporation will pay the cost of solicitation of proxies for the Annual
Meeting. In addition to solicitation by use of the mails, proxies may be
solicited personally or by telephone, facsimile or telegraph by certain officers
and regular employees of the Corporation, who will not receive any added
compensation for so doing.such solicitation. The Corporation may reimburse brokers and
others holding shares in their names as nominees for their expenses in sending
proxy material to beneficial owners.
ELECTION OF DIRECTORS
The BylawsQUORUM, REQUIRED VOTES, ABSTENTIONS AND BROKER NON-VOTES
Holders of outstanding shares of capital stock of the Corporation
providerepresenting at least a majority of the votes entitled to vote at the Annual
Meeting, present in person or represented by proxy, will constitute a quorum (a
"Quorum") with respect to all matters other than the election of directors. A
majority of the shares of Common Stock entitled to vote at the Annual Meeting,
present in person or represented by proxy, will constitute a quorum for the
election of Non-Class A Directors (a "Non-Class A Quorum"). A majority of the
shares of Class A Common Stock entitled to vote at the Annual Meeting, present
in person or represented by proxy, will constitute a quorum for the election of
Class A Directors (a "Class A Quorum"). The absence of a Non-Class A Quorum
will not prevent the election of Class A Directors, and the absence of a Class A
Quorum will not prevent the election of Non-Class A Directors.
Abstentions and broker "non-votes" are counted as present and entitled to
vote for purposes of determining a quorum. A broker "non-vote" occurs when a
nominee holding shares for a beneficial owner does not have discretionary voting
power with respect to that item and has not received instructions from the
Board ofbeneficial owner.
The Non-Class A Directors is divided
into 3 equal classes of Directors. Each class of Directors is elected to serve a
3 year staggered term, with the term of one class expiring at each Annual
Meeting. The total number of Directors on the current Board is fixed at 15. The
Board of Directors recommends that the stockholders again fix the total number
of Directors at 15.
Directors arewill be elected by a plurality of the votes cast by
the holders of the Corporation's Common Stock atentitled to vote thereon.
Abstentions and broker non-votes will not count as either "for" or "against" in
the Annual Meeting at whichtabulation of votes on Non-Class A Directors. Class A Directors will be
elected by a quorum is present.
Underplurality of the votes cast by the holders of the Class A Common
Stock entitled to vote thereon.
The proposal to increase the Corporation's Certificateauthorized stock requires the
approval of Incorporationholders of Common Stock and BylawsClass A Common Stock representing: (1)
a majority of all outstanding shares voting together as a single class, and under
Delaware law,(2)
a majority of the outstanding shares of the Common Stock and of the Class A
Common Stock, each voting as a separate class. Since these majorities are based
on outstanding shares, abstentions and broker non-votes will not have the effect of
votes
in oppositionnegative votes.
Each other proposal to electionbe considered at the meeting will require the
affirmative vote of the holders of a Director.
Proxiesmajority in voting power of shares present
in person or by proxy and entitled to vote, with the accompanying formCommon Stock and Class A
Common Stock voting together as a single class. For these purposes, any broker
non-votes on a proposal will (unless a contrary direction is
indicated onbe treated as not entitled to vote and therefore
will not affect the proxy) be voted to electoutcome. Abstentions will have the nominees named below (who have
been nominated by the present Boardeffect of Directors) as Directors to serve subject
to the Certificatenegative
votes.
ELECTION OF DIRECTORS
The members of Incorporation and Bylaws of the Corporation. If elected,
each will serve for a term of 3 years or until a successor is duly elected and
qualified.
If any of the nominees listed are not available for election at the Annual
Meeting (a contingency which the Board of Directors of the Corporation does not
now foresee),(the "Board of
Directors") are divided into three classes, one of which is elected at each
annual meeting of stockholders to hold office for a three-year term and until
their respective successors are elected and duly qualified.
The Board of Directors has fixed the number of directors to serve on the
Board of Directors intendsat 20. The holders of the Class A Common Stock are entitled
to recommendelect nine of the election20 directors of such
other personsthe Corporation (the "Class A Directors").
The holders of Common Stock (other than those who held Class A Common Stock) are
entitled to elect the remaining 11 directors (the "Non-Class A Directors").
The terms of four Non-Class A Directors will expire at the Annual Meeting,
and the current Non-Class A Directors acting as a committee of the Board may select in orderof
Directors have nominated the persons set forth below for election to fillthree-year
terms expiring at the vacancies.2004 annual meeting of stockholders. The terms of three
Class A Directors will expire at the Annual Meeting, and the holders of the
Class A Common Stock have designated the persons set forth below for election to
three-year terms expiring at the 2004 annual meeting of stockholders.
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Nominees for Non-Class A Directors for Terms Expiring at the 2004 Annual Meeting
Proxies in
the accompanying form will be voted for the election of such other persons
unless authority to vote the proxies in the electioneach nominee listed below, all of Directors has been
withheld.
The nominees designated bywhom
are now members of the Board of Directors, are named below, with brief
statements setting forth their presentunless (with respect to any nominee)
the authority to vote for such nominee has been withheld in the applicable
proxy. In the event, which is not now anticipated, that any of such nominees
should become unavailable to serve for any reason, shares for which proxies have
been received will be voted for a substitute nominee selected by a committee
comprised of current Non-Class A Directors unless the number of directors
constituting the full Board of Directors is reduced.
The principal occupations of, and certain other information including directorships in public companies:
Sharesregarding, these
nominees are set forth below.
Dr. Julia Ann Frohlich, 60, has been a director of the Corporation since 1992
and a director of First Hawaiian Bank since August 1991. She was a director of
First Hawaiian Creditcorp, Inc. from 1990 to June 1998 and was a director of Common
Stock of the Corporation Percent
Nominees for a Term of Three Years Beneficially Owned of
Until the Annual Meeting of Stockholders in 2001 at February 20, 1998 Class
------------------------------------------------ ------------------------ -------
Dr. Julia Ann Frohlich, 57, has been a Director of the Corporation ______ *
since 1992 and a Director of the Bank since August, 1991. She has
been a Director of First Hawaiian Creditcorp, Inc. since 1990, and FHL
Lease Holding Company, Inc. from 1990 to June 1, 1997. She has been President of
the Blood Bank of Hawaii since 1985.
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Shares of Common
StockBert T. Kobayashi, Jr., 61, has been a director of the Corporation since 1991
and a director of First Hawaiian Bank since 1974. He is a principal of the law
firm of Kobayashi, Sugita & Goda, Honolulu, Hawaii. He is a director of Schuler
Homes, Inc., a land development company.
Fred C. Weyand, 84, has been a director of the Corporation since 1986 and a
director of First Hawaiian Bank since 1981. He was Vice President of the
Corporation from 1976 to 1982, Senior Vice President of First Hawaiian Bank from
1980 to 1982 and Corporate Secretary from 1978 to 1981. He served as a
commissioned officer in the United States Army from 1940 to 1976 and held the
office of Chief of Staff as a member of the Joint Chiefs of Staff from 1974 to
1976. He is a trustee under the Will and of the Estate of S.M. Damon.
Robert C. Wo, 76, was a director of the Corporation from 1974 to 1989 and
again since 1992 and has been a director of First Hawaiian Bank since 1963. He
has been President and Secretary of BJ Management Corporation, Percent
Nominees for a Term of Three Years Beneficially Owned of
Until the Annual Meeting of Stockholders in 2001 at February 20, 1998 Class
------------------------------------------------ ------------------------ -------
John A. Hoag, 65, was President of the Corporation from 1991 until ______ *
April 20, 1995 and was an Executive Vice President of the Corporation from
1982 to 1991. He has been a Director of the Corporation since 1991. He
has been a Director of the Bank since October, 1989. From 1989 until
June 30, 1994, Mr. Hoag was President of the Bank; from that date until
his date of retirement, June 1, 1995, he was Vice Chairman of the Bank.
He has been with the Bank since 1960. His reported beneficial ownership
of the Common Stock includes __________ shares in his wife's revocable
living trust as to which Mr. Hoag disclaims beneficial ownership. Mr.
Hoag is Chairman of the Board of Hawaii Reserves, Inc., a land management
corporation, and he is on the Board of Castle Medical Center.
Bert T. Kobayashi, Jr., 57, has been a Director of the Corporation since ______ *
1991 and a Director of the Bank since 1974. He is a principal of the law
firm of Kobayashi, Sugita & Goda. He is a Director of Schuler Homes, Inc.,
a land development company.
Fred C. Weyand, 81, has been a Director of the Corporation since 1986 ______ ____
and a Director of the Bank since 1981. He was Vice President of the
Corporation from 1976 to 1982; Senior Vice President of the Bank from
1980 to 1982 and Corporate Secretary from 1978 to 1981. He served as a
commissioned officer in the United States Army from 1940 to 1976 and
held the office of Chief of Staff from 1974 to 1976. He is a Trustee
under the Will and of the Estate of S.M. Damon. His reported beneficial
ownership of the Common Stock includes _______________ shares owned by
the Estate of S.M. Damon as to which he shares voting and investment
powers and __________ shares in his wife's revocable living trust as
to which he shares voting and investment powers.
Robert C. Wo, 72, was a Director of the Corporation from 1974 to 1989 ______ *
and again since 1992 and has been a Director of the Bank since 1963.
He has been President and Secretary of BJ Management Corp., a management
consulting company, since 1979. He has been Chairman of C.S. Wo & Sons, Ltd., a
manufacturer and retailer of home furnishings, since 1973. His reported beneficial ownership of the Common Stock includes
__________ shares in the Betty and Bob Wo Foundation as to which he
shares voting and investment powers, and __________ shares held
jointly with his wife.
*The percentage of shares beneficially owned, including shares that can be
acquired within 60 days through the exercise of stock options, does not exceed
1% of the shares currently outstanding.
Each of the foregoing nominees attended 75% or more of the combined total
number of meetings held during 1997 of the Board and Committees on which he
sits. The Board of Directors met 12 times in 1997.
The Board of Directors recommends a vote to fix the total number of Directors
at 15 and a vote FOR the above nominees.
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DIRECTORS CONTINUING IN OFFICE AND EXECUTIVE OFFICERSDesignees for Class A Directors for Terms Expiring at the 2004 Annual Meeting
The principal occupations of, and certain other information regarding, the
designees for election as Class A Directors continuing to serve onare set forth below.
Robert A. Fuhrman, 76, has been a director of the Corporation since November
1998 and a director of Bank of the West since August 1981. He has been Chairman
of the Board of Directors pursuant to
their prior elections,of Bank of the West since April 1991. He is the
retired Vice Chairman, President and the named executive officers listed in the Summary
Compensation Table below, are listed here. The Directors will serve subject to
the CertificateChief Operating Officer of Incorporation and the BylawsLockheed
Corporation.
Pierre Mariani, 44, has been a director of the Corporation untiland of Bank of the
West since December 1999. Mr. Mariani is Executive Vice President,
International Retail Banking, of BNP Paribas. He served as Senior Advisor and
Chief of Staff of the Minister of Budget and Government Spokesman from 1993 to
1995; Chief Executive Officer and director of Societe D'investissements
Immobiliers Et De Gestion (SEFIMEG), a major French property company, from 1995
to 1996; and Chief Executive Officer and director of BANEXI, the investment bank
of Banque Nationale de Paris ("BNP"), from 1996 to 1999.
Rodney R. Peck, 55, has been a director of the Corporation since November
1998 and a director of Bank of the West since July 1990. He is a Senior Partner
with the law firm of Pillsbury Winthrop LLP, San Francisco, California.
Directors Continuing in Office
Set forth below are the principal occupations of, and certain other
information regarding, the directors whose terms of office will continue after
the Annual Meeting. The term of each director will expire at the annual meeting
of stockholders held in the year shownindicated parenthetically after each namesuch director's
name.
Non-Class A Directors
John W. A. Buyers, 72, (2003) has been a director of the Corporation since
1994 and until their respective successors have been duly elected and qualified.
Shares of Common
Stock of the Corporation Percent
Beneficially Owned of
Directors Continuing to Serve at February 20, 1998 Class
----------------------------- ------------------------ -------
John W. A. Buyers, 70, (2000) has been a Director of the Corporation ______ *
since 1994 and a Director of thea director of First Hawaiian Bank since 1976. He has been Chairman
of the Board and Chief Executive Officer of C. Brewer and Company, Limited,
a diversified agribusiness and specialty food company, since 1992. From 1982
to 1992, he was Chairman and President of C. Brewer and Company, Limited,
Hawaii's oldest company. From 1975 to 1982, he was President and Chief
Executive Officer of C. Brewer and Company, Limited. From 1971 to 1975,
Mr. Buyers was President and Chief Executive Officer of General Waterworks
Company in Philadelphia, Pennsylvania. Since 1986, he has been Chairman
of Mauna Loa Resources, the managing general partner of Mauna Loa Partners,
a master limited partnership trading on the New York Stock Exchange.
The partnership is engaged in agribusiness. In 1993, he was elected
Chairman of C. Brewer Homes, Inc., a publicly-traded real estate
development company. He is also a Director of John B. Sanfilippo & Sons,
Inc. located in Elk Grove Village, Illinois.
John C. Couch, 58, (2000) has been a Director of the Corporation ______ *
since 1991 and a Director of the Bank since 1985. He has been Chairman
of the Board of Alexander & Baldwin, Inc. ("A&B") since April 1, 1995
and has been President and Chief Executive Officer of that company since
April, 1992. He was President and Chief Operating Officer of A&B from
October, 1985 until April, 1989 and from April, 1991 to March, 1992. From
April, 1989 to December, 1996, he was Chief Executive Officer of A&B-Hawaii,
Inc., a wholly-owned subsidiary of A&B. He was President from
April, 1989 until April, 1995, when he became Chairman. He has been a
Director of A&B since 1985. He was President and Chief Operating Officer
of Matson Navigation Company, Inc., a wholly-owned subsidiary of A&B,
from January, 1985 to September, 1985 and Executive Vice President and
Chief Operating Officer from January, 1984 to December, 1984. From
April, 1992 to April, 1995, he had been Vice Chairman and since
April, 1995 he has been Chairman of Matson Navigation Company, Inc. A&B,
which is engaged in ocean transportation, agribusiness, property
development and property management, holds _______________ shares of
Common Stock, as to which Mr. Couch disclaims beneficial ownership.
5
Shares of Common
Stock of the Corporation Percent
Beneficially Owned of
Directors Continuing to Serve at February 20, 1998 Class
----------------------------- ------------------------ -------
Walter A. Dods, Jr., 56, (1999) has been Chairman of the Board and ______ ____
Chief Executive Officer of the Corporation and the Bank since September,
1989. He was President of the Corporation from March, 1989 to March,
1991. He was President of the Bank from November, 1984 to October, 1989
and has been a Director of the Bank since 1979. He was an Executive Vice
President of the Corporation from 1982 to 1989 and has been a Director
of the Corporation since 1983. He has been with the Bank since 1968.
His reported beneficial ownership of the Common Stock includes _____
shares held in his wife's individual retirement account as to which
Mr. Dods disclaims beneficial ownership, and _______________
shares that Mr. Dods has the right to acquire within 60 days through the
exercise of stock options. He is a Trustee under the Will and of the
Estate of S. M. Damon and his reported beneficial ownership of the
Common Stock includes _______________ shares owned by the Estate of
S. M. Damon as to which Mr. Dods shares voting and investment powers.
He is a Director of Alexander & Baldwin, Inc., which holds
_______________ shares of the Common Stock, as to which Mr.
Dods disclaims beneficial ownership. He is a Trustee of Punahou School,
which owns __________ shares of the Common Stock; he has shared voting
and investment powers with respect to such shares and disclaims
beneficial ownership thereof.
Paul Mullin Ganley, 58, (1999) has been a Director of the Corporation ______ ____
since 1991 and a Director of the Bank since 1986. He is a Trustee under
the Will and of the Estate of S.M. Damon and a partner in the Carlsmith
Ball Wichman Case & Ichiki law firm. His reported beneficial ownership
of the Common Stock includes _______________ shares owned by the
Estate of S.M. Damon as to which Mr. Ganley shares voting and
investment powers; __________ shares in his revocable living trust as
to which he has sole voting and investment powers; __________ shares
in a money purchase pension plan as to which he has sole voting and
investment powers; __________ shares in an individual retirement
account as to which he has sole voting and investment powers; and _____
shares for which he has shared voting and investment powers, as
successor trustee.
David M. Haig, 46, (2000) has been a Director of the Corporation ______ ____
since 1989 and a Director of the Bank since 1983. Mr. Haig is a
beneficiary and, since 1982, a Trustee, under the Will and of the
Estate of S. M. Damon. His reported beneficial ownership of the
Common Stock includes _______________ shares owned by the Estate of
S. M. Damon as to which Mr. Haig shares voting and investment powers.
He is beneficiary of an HR-10 plan which holds __________ shares of
the Common Stock as to which he has sole voting and investment powers.
Dr. Richard T. Mamiya, 73, (1999) has been a Director of the ______ ____
Corporation since 1994 and a Director of the Bank since 1980. He is on
the active staff of Queen's Medical Center for thoracic, cardiovascular,
and general surgery.
6
Shares of Common
Stock of the Corporation Percent
Beneficially Owned of
Directors Continuing to Serve at February 20, 1998 Class
----------------------------- ------------------------ -------
Dr. Fujio Matsuda, 73, (1999) has been a Director of the Corporation ______ *
since 1987 and a Director of the Bank since 1985. Since July 1996, he
has been Chairman, Pacific International Center for High Technology
Research. He was President of the Japan-America Institute of Management
Science from September 1994 to June 1996. He was Executive Director of
the Research Corporation of the University of Hawaii from 1984 until
1994; he was the President of the University of Hawaii from 1974 to 1984.
Dr. Roderick F. McPhee, 69, (2000) has been a Director of the ______ *
Corporation since 1972, and a Director of the Bank since 1972. From 1968
through 1994, he was President of Punahou School, a kindergarten
through 12th grade college preparatory school. Dr. McPhee was President
and ex-officio non-voting member of the Board of Trustees of Punahou School,
which owns _______ shares of the Common Stock. He has no voting or
investment powers with respect to such shares and disclaims
beneficial ownership thereof.
George P. Shea, Jr., 59, (1999) has been a Director of the Corporation ______ *
since March, 1993 and the Bank since March, 1989. He was Chairman,
President and Chief Executive Officer of First Insurance Company of Hawaii,
Ltd. ("First Insurance") from 1988 until his retirement on March 1, 1995.
He was a Certified Public Accountant with the public accounting firm,
Peat Marwick Mitchell & Company, from 1965 to 1971 when he joined First
Insurance and was promoted to Treasurer. He was Vice President, Secretary
and Treasurer of First Insurance from 1978 to 1982 and President and Chief
Executive Officer from 1982 to 1988.
John K. Tsui, 59, (2000) was elected as a Director of the Corporation ______ *
to fill the unexpired term of Mr. Robert J. Pfeiffer on July 20, 1995 (Mr.
Pfeiffer retired as a Director of the Corporation on June 30, 1995). He has
been a Director of the Bank since July 1994. He was Executive Vice President of
Bancorp Hawaii, Inc. (now known as Pacific Century Financial Corporation) from
1986 to June 1994 and Vice Chairman at Bank of Hawaii from 1984 to 1994. He
became President and Chief Operating Officer of First Hawaiian Bank on July 1,
1994. He has been President of the Corporation since April 20, 1995. His
reported beneficial ownership of the Common Stock includes __________ shares
that Mr. Tsui has the right to acquire within 60 days through the exercise of
stock options.
Executive Officers
------------------
Donald G. Horner--His reported beneficial ownership of the ______ *
Common Stock includes ______ shares that Mr. Horner has the right to acquire
within 60 days through the exercise of stock options.
Howard H. Karr--His reported beneficial ownership of the Common ______ *
Stock includes ______ shares that Mr. Karr has the right to acquire within 60
days through the exercise of stock options.
7
Shares of Common
Stock of the Corporation Percent
Beneficially Owned of
Executive Officers at February 20, 1998 Class
------------------ ------------------------ -------
Gerald M. Pang--His reported beneficial ownership of the Common ______ *
Stock includes ______ shares that Mr. Pang has the right to acquire within 60
days through the exercise of stock options.
Nominees, Directors Continuing to Serve and Executive Officers
- --------------------------------------------------------------
Beneficial Ownership of all Nominees, Directors, and Executive ______ ____
Officers as a Group (18 persons).
- -------------
*The percentage of shares beneficially owned does not exceed 1% of the shares
currently outstanding, including shares that can be acquired within 60 days
through the exercise of stock options.
Each of the foregoing Directors attended 75% or more of the combined total
number of meetings held during 1997 of
the Board and Chief Executive Officer of C. Brewer and Company, Limited, a
diversified agribusiness and specialty food company, since 1992. From 1982 to
1992, he was Chairman and President of C. Brewer and Company, Limited, Hawaii's
oldest company. Since 1986, he has been Chairman of ML Resources, Inc., the
managing general partner of ML Macadamia Orchards, L.P., a master limited
5
partnership traded on the New York Stock Exchange. The partnership is engaged
in agribusiness. From 1993 to 1999, he served as Chairman and as a director of
Hawaii Land and Farming Co., Inc., a publicly traded real estate development
company. He is also a director of John B. Sanfilippo & Sons, Inc., a nut
marketing company located in Elk Grove Village, Illinois.
Walter A. Dods, Jr., 59, (2002) has been a director of the Corporation since
1983, a director of First Hawaiian Bank since 1979, and a director of Bank of
the West since November 1998. He has been Chairman of the Board and Chief
Executive Officer of the Corporation and First Hawaiian Bank since September
1989 and Vice Chairman of Bank of the West since November 1998. He was
President of the Corporation from March 1989 to March 1991. He was President of
First Hawaiian Bank from November 1984 to October 1989. He was an Executive
Vice President of the Corporation from 1982 to 1989. He has been with First
Hawaiian Bank since 1968. He is a trustee under the Will and of the Estate of
S.M. Damon and a director of Alexander & Baldwin, Inc., a diversified ocean
transportation, property development and management, and food products company.
David M. Haig, 49, (2003) has been a director of the Corporation since 1989
and a director of First Hawaiian Bank since 1983. Mr. Haig is a beneficiary
and, since 1982, has been a trustee, under the Will and of the Estate of S.M.
Damon. He has served as Chairman of the Estate of S.M. Damon since 1993.
John A. Hoag, 68, (2003) has been a director of the Corporation since 1991
and a director of First Hawaiian Bank since October 1989. He was President of
the Corporation from 1991 until April 1995 and was an Executive Vice President
of the Corporation from 1982 to 1991. From 1989 until June 1994, Mr. Hoag was
President of First Hawaiian Bank. From that date until his retirement in June
1995, he was Vice Chairman of First Hawaiian Bank. Mr. Hoag is Chairman of the
Board of Hawaii Reserves, Inc., a land management corporation that is a
subsidiary of Deseret Management Corporation.
Paul Mullin Ganley, 61, (2002) has been a director of the Corporation since
1991 and a director of First Hawaiian Bank since 1986. He is a trustee under
the Will and of the Estate of S.M. Damon and a partner in the law firm of
Carlsmith Ball, Honolulu, Hawaii.
Fujio Matsuda, 76, (2002) has been a director of the Corporation since 1987
and a director of First Hawaiian Bank since 1985. Since July 1996, he has been
Chairman, Pacific International Center for High Technology Research. He was
President of the Japan-America Institute of Management Science from September
1994 to June 1996. He was Executive Director of the Research Corporation of the
University of Hawaii from 1984 until 1994, and he was the President of the
University of Hawaii from 1974 to 1984.
John K. Tsui, 62, (2003) has been a director of the Corporation since July
1995 and a director of First Hawaiian Bank since July 1994. He has been Vice
Chairman and Chief Credit Officer of the Corporation since November 1998. He was
President of the Corporation from April 1995 through October 1998. He became
President and Chief Operating Officer of First Hawaiian Bank in July 1994 and
Vice Chairman of Bank of the West in November 1998. He was Executive Vice
President of Bancorp Hawaii, Inc. (now known as Pacific Century Financial
Corporation) from 1986 to June 1994 and Vice Chairman of Bank of Hawaii from
1984 to June 1994.
Class A Directors
Jacques Ardant, 48, (2002) has been a director of the Corporation since
November 1998 and a director of Bank of the West since September 1998. He has
been a member of the Executive Committee of International Retail Banking, BNP
Paribas since September 1999, and Director for International Banking and
Finance, North America Area, of BNP Paribas or BNP since April 1997. He was
Deputy General Manager of BNP Greece from 1994 to April 1997. He was Secretary
Generale of BNP Italy from 1989 to 1994. He has been with BNP Paribas or BNP
since 1978.
Michel Larrouilh, 65, (2003) has been a director of the Corporation since
November 1998 and a director of Bank of the West since February 1984. He was
Chief Executive Officer of Bank of the West from February 1984 to December 1995.
He was Chairman and Chief Executive Officer of Bank of the West's holding
company ("Old BancWest") from January 1996 to December 1997. He was Chairman
and Advisor to the Chief Executive Officer of Old BancWest from January 1998 to
October 1998.
Yves Martrenchar, 44, (2002) has been a director of the Corporation since
November 1998 and a director of Bank of the West since March 1994. He has been
the Executive Vice President for Distribution, Products and Markets at BNP
Paribas since September 2000, and was Executive Vice President for Products and
Markets at BNP from October 1996 to September 2000. He was head of private
banking for the branch system of BNP in France from 1993 to September 1996. He
joined BNP 1980.
Don J. McGrath, 52, (2002) has been a director of the Corporation since
November 1998, a director of Bank of the West since July 1989, and a director of
First Hawaiian Bank since November 1998. He has been President and
6
Chief Operating Officer of the Corporation since November 1998, President and
Chief Executive Officer of Bank of the West since January 1996 and Vice Chairman
of First Hawaiian Bank since November 1998. He was President and Chief Operating
Officer of Bank of the West from 1991 to 1996. He has been with Bank of the West
since 1975. Mr. McGrath became a public member of the Pacific Stock Exchange
Board of Governors in January 2001.
Joel Sibrac, 53, (2003) has been a director of the Corporation since November
1998 and a director of Bank of the West since January 1995. He has been Vice
Chairman of the Corporation since November 1998. He has been Senior Executive
Vice President, Commercial Banking Group, of Bank of the West since 1996. He was
General Manager, North American Desk, of BNP from 1994 to 1996 and General
Manager of BNP Italy from 1990 to 1994. He joined BNP in 1974.
Jacques Henri Wahl, 68, (2003) has been a director of the Corporation since
November 1998 and a director of Bank of the West since July 1982. He served as
Senior Adviser to the Chief Executive Officer of BNP Paribas, and of BNP, from
January 1997 until his retirement in February 2001. He was a member of the
Managing Committee of the BNP Group, and a director of BNP, from January 1997
until May 2000. He served as Vice Chairman of BNP and Chairman of Banque
Nationale de Paris Intercontinentale from 1993 to 1996. He was President and
Chief Operating Officer of BNP from 1982 to 1993.
COMMITTEES, ATTENDANCE AND COMPENSATION OF THE BOARD
Committees on which he or
she sits.of the Board
The Board of Directors of the Corporation has an Executive Committee, an
Executive Compensation Committee and an Audit Committee. There is no standing
nominating committee. However, Non-Class A Directors may be nominated by a
majority vote of a committee comprised of all the Non-Class A Directors then in
office.
The Executive Committee, which met 12 times in 1997.
Beneficial Ownership Reporting Compliance
To the Corporation's knowledge, which is based solely on a review2000, has authority to
exercise all powers of reports
of changes in ownership of the Common Stock as received by the Corporation from
directors, executive officers and other persons owning more than 10% of the
Common Stock, the Corporation believes that all such reports required to be
filed in 1997 and to date in 1998 were timely filed.
Committees of the Board
Among the standing committees of the Board are the Executive Committee,
Executive Compensation Committee and the Joint Audit Committee. The Executive
Committee also acts as the Nominating Committee.
The Executive Committee, acting as the Nominating Committee, advises the Board of Directors with respect tobetween its meetings (to the
total number of Directors to be elected
toextent not otherwise restricted by law or the Board and recommends the persons to be nominated for election as
Directors.Corporation's Bylaws). The
Committee will consider nominees recommended by the stockholders
for election as Director. Any such recommendation, together with the nominee's
qualifications and consent to be considered as a nominee, should be sent to the
Secretarymembers of the Corporation in a sufficient time prior to the Annual Meeting of
the Corporation's stockholders for theExecutive Committee to consider and act upon such
recommendation. The Committee, acting as the Nominating Committee, met one time
in 1997. It met two additional times for other matters. Its members are Walter A. Dods, Jr. (Chairman), Bert T.
Kobayashi, Jr. (Chairman), Walter A. Dods, Jr., Fred C. WeyandDon J. McGrath, Joel Sibrac, and Robert C. Wo.John K. Tsui
The Executive Compensation Committee acts upon the executive compensation
program of the Corporation and its subsidiaries. The Committee administers the
Incentive Plan for Key Executives, (the "IPKE"), the Long-Term Incentive Plan, (the "LTIP"), the Stock
Incentive Plan approved by the stockholders in 1992 and
effective November 22, 1991 (the "1991 SIP"),Plans, and the Deferred Compensation Plan
(the "DCP").Plan. It reviews the performance
and salariesapproves the salary of the Corporation's Chief Executive Officer and reviews
the performance and salaries of other senior management officers of the
Corporation and its subsidiaries. The Committee also makes recommendations to
the Board of Directors with respect to the appropriate senior management
compensation structure. The Committee met 5seven times in 1997.2000. Its members
areduring 2000 were Fujio Matsuda (Chairman), John C. Couch,Dr. Julia Ann Frohlich, Robert A.
Fuhrman, David M. Haig, Richard T. MamiyaMichel Larrouilh (until February 12, 2000) and Roderick F. McPhee.
The JointPierre
Mariani (beginning April 20, 2000).
Information concerning the Audit Committee which met 5 times during 1997, determines on
behalfis set forth below under "Report
of the Audit Committee."
Attendance at Meetings
The Board whether the performance and examinationof Directors met ten times in 2000. Each incumbent Director
attended 75% or more of the independent
public accounting firmcombined total number of meetings held during such
person's service in 2000 on the Board of Directors and the Corporation's internal auditor are satisfactory
and adequate to meet the Board's supervisory responsibility. The Committee
reviews internal auditing reports, the adequacy of internal financial and
accounting controls, the work of the external and internal auditors and
management's responses to their audit reports and recommendations. It recommends
the independent public accounting firm proposed for election as Auditor of the
Corporation. It also reviews the Corporation's reports to stockholders and other
financial statements. The Committee reviewed and approved the 1997 audit plan.
The members of the Joint Audit Committee are George P. Shea, Jr. (Chairman),
John W.A. Buyers, Warren
8
H. Haruki, Howard K. Hiroki, Glenn A. Kaya and Stuart A. Hall. Messrs. Haruki
and Hiroki are Directors of the Bank and hold certified public accountant's
certificates, as does Mr. Shea. Mr. Kaya is a Director of the Bank and of First
Hawaiian Creditcorp, Inc., a subsidiary of the Corporation. Mr. Hall is a
Director of Pacific One Bank.its committees.
Compensation of Directors
In 1997, theThe Corporation paid a quarterly retainerretainers of $3,000 for the first two quarters
of 2000 and $3,750 per quarter thereafter to each member of the Board of
Directors who was not an employee of the Corporation or its subsidiaries. All
such non-employee members of the Board received a fee of $800
and reimbursement for transportation expenses for each Board meeting
attended and $700 for each committee meeting attended. As chairman of the Joint Audit
Committee which involves numerous other meetings with the externalattended, as well as reimbursement
for transportation and internal
auditors and evaluation of operations, procedures and controls, Mr. Shea is paid
an additional $2,000 per month. For periods after 1996,lodging expenses. Directors who are also employees of
the Corporation or one of its subsidiaries do not receive Board andboard or committee
fees.fees or retainers.
The Corporation has a Directors' Retirement Plan for non-employee Directorsdirectors of the
Corporation and First Hawaiian Bank who are not employed by the BankCorporation or
its affiliates and who are not covered by any of the Corporation's employees'employee
retirement programs. Following retirement from the Boardone of these boards after
reaching age 55 and at least 10ten years of service as director, the retired
Directordirector or his or her beneficiary will be entitled to receive monthly payments
for a 10 yearten-year period at an annual rate equal to one-half of the annual retainer
fee in effect at the time of the Director'sdirector's retirement.
7
REPORT OF THE AUDIT COMMITTEE
The Audit Committee met six times during 2000. Its members are John A. Hoag
(Chairman), John W.A. Buyers and Robert A. Fuhrman. The Board of Directors
determined during 2000 that each of those directors satisfied independence
requirements and other criteria established by New York Stock Exchange listing
standards.
During 2000, the Audit Committee developed and the Board of Directors
approved an Audit Committee Charter, which appears as Annex A to this proxy
statement. As more fully set forth in the Charter, the Committee's
responsibilities include review of the Corporation's quarterly and annual
financial statements with financial management of the Corporation and with the
independent auditor; review of the independence and performance of the
independent auditor; review with the independent auditor of all significant
relationships between it and the Corporation that could impair the auditor's
objectivity and independence; review of the Corporation's internal audit
function; and review of the integrity of the Corporation's financial controls
and reporting processes.
PricewaterhouseCoopers ("PWC") served as the Corporation's independent
auditor for 2000, and the Audit Committee has recommended that PWC be elected in
that capacity for 2001. (See "Election of Auditor.") Set forth below is
certain information concerning aggregate fees billed for professional services
rendered by PWC during 2000.
Audit Fees $ 716,715
Financial Information Systems
Design and Implementation Fees $ 0
All Other Fees $2,170,462
The Audit Committee has considered whether the provision of non-audit
functions provided by PWC is compatible with maintaining PWC's independence and
concluded that performing such functions does not affect PWC's independence in
performing its function as auditor of the Corporation.
The Audit Committee has reviewed and discussed with management the
Corporation's audited financial statements for the year ended December 31, 2000.
It has also discussed with PWC the matters required to be discussed by
Codification of Statements on Auditing Standards No. 61. The Committee has
received the written disclosures and the letter from PWC required by
Independence Standards Board Standard No. 1, and has discussed with PWC its
independence. As the result of such review and discussions, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Corporation's Annual Report on Form 10-K for the year ended
December 31, 2000.
Audit Committee
John A. Hoag, Chairman
John W.A. Buyers
Robert A. Fuhrman
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and persons who own more than
ten percent of any class of the Corporation's capital stock, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC") and the New York Stock Exchange. Based on the Corporation's records and
certain written representations received by the Corporation, the Corporation
believes that during 2000, all such filing requirements applicable to its
directors, executive officers and ten-percent stockholders were complied with,
except that Mr. Kobayashi filed two reports covering four transactions that were
not reported on a timely basis.
SECURITY OWNERSHIP OF DIRECTORS,
NAMED EXECUTIVE OFFICERS AND OTHERS
The following table shows the beneficial ownership of all classes of Voting
Stock of the Corporation for: each director, nominee and designee; each named
executive officer; all of the current directors and executive officers as a
group; and each person known by the Corporation to be a beneficial owner of more
than 5% of the Common Stock or the Class A Common Stock (a "5% Owner"). Each
individual has sole voting and investment power with respect to the shares he or
she beneficially owns, unless otherwise reflected in a footnote. The table is
based upon information furnished by each such person or, in the case of each 5%
Owner, based upon a Schedule 13D or 13G filed with the
8
SEC. The listing for BNP Paribas pertains to Class A Common Stock. All other
listings refer to Common Stock.. All information is, unless otherwise indicated,
as of January 31, 2001. Percentages are based upon the number of shares of
Common Stock or Class A Common Stock outstanding, plus any shares the indicated
person or group had a right to acquire within 60 days.
Shares Beneficially Percent
Owned/(1)/ of Class
- ------------------------------------------------------------------------------
Continuing Directors, Nominees and Designees
- ------------------------------------------------------------------------------
Jacques Ardant 0/(2)/ *
John W. A. Buyers 14,409 *
Walter A. Dods, Jr. 17,134,650/(3)/ 24.78%
Dr. Julia Ann Frohlich 6,450 *
Robert A. Fuhrman 4,000 *
Paul Mullin Ganley 15,871,917/(4)/ 23.15%
David M. Haig 15,854,895/(5)/ 23.13%
John A. Hoag 78,106/(6)/ *
Bert T. Kobayashi, Jr. 15,729/(7)/ *
Michel Larrouilh 8,000/(2)/ *
Pierre Mariani 0/(2)/ *
Yves Martrenchar 0/(2)/ *
Fujio Matsuda 9,453 *
Don J. McGrath 265,842/(2)/ *
Rodney R. Peck 400 *
Joel Sibrac 24,625/(2)/ *
John K. Tsui 509,206/(8)/ *
Jacques Henri Wahl 0/(2)/ *
Fred C. Weyand 15,873,922/(9)/ 23.15%
Robert C. Wo 206,208/(10)/ *
Other Named Executive Officers
- ------------------------------------------------------------------------------
Donald G. Horner 316,633/(11)/ *
Howard H. Karr 386,335/(12)/ *
All nominees, designees, directors and
executive officers as a group (24 persons) 18,834,203 26.92%
5% Owners of Common Stock
- ------------------------------------------------------------------------------
David M. Haig, Fred C. Weyand,
Paul Mullin Ganley and Walter A. Dods, Jr.,
as trustees under the Will and of the
Estate of S.M. Damon, 999 Bishop Street,
Honolulu, Hawaii 96813 15,800,000/(13)/ 23.05%
Trust and Investments Division,
First Hawaiian Bank,
P.O. Box 3200,
Honolulu, Hawaii 96847 3,441,514/(14)/ 5.02%
5% Owners of Class A Common Stock
- ------------------------------------------------------------------------------
BNP Paribas
16, Boulevard des Italiens
75009 Paris, France 56,074,874/(15)/ 100%
* Less than 1%.
Notes to Security Ownership Table:
Note (1) All amounts and percentages refer to Common Stock, unless otherwise
indicated. Data includes the number of shares of Common Stock that may
be acquired through exercise of stock options within 60 days from
January 31, 2001 for the following: Mr. Dods, 575,829; Mr. McGrath,
132,223; Mr. Tsui, 302,623; Mr. Horner, 119,681; Mr. Karr, 164,110
(including options to acquire 4,343 shares held by his wife); Mr.
Sibrac, 24,007; all directors, nominees, designees and executive
officers as a group, 1,401,941.
9
Note (2) The designated Class A Directors and Class A Directors continuing in
office hold a beneficial interest in an aggregate of [39,400] shares
of common stock of BNP Paribas, including the number of shares that
may be acquired through exercise of stock options within 60 days from
[February 26, 2001].
Note (3) Mr. Dods' reported beneficial ownership of Common Stock includes 1,848
shares held in his wife's individual retirement account, as to which
Mr. Dods disclaims beneficial ownership; 15,800,000 shares owned by
the Estate of S. M. Damon, as to which Mr. Dods shares voting and
investment powers; and 166,952 shares owned by First Hawaiian
Foundation, as to which Mr. Dods holds shared voting and investment
powers. Mr. Dods disclaims beneficial ownership of the shares owned by
the First Hawaiian Foundation, and of all shares owned by Alexander &
Baldwin, Inc., of which Mr. Dods is a director.
Note (4) Mr. Ganley's reported beneficial ownership of Common Stock includes
15,800,000 shares owned by the Estate of S.M. Damon as to which Mr.
Ganley shares voting and investment powers; 71,858 shares in his
revocable living trust, a money purchase pension plan and an
individual retirement account as to which he has sole voting and
investment powers; and 57 shares for which he has shared voting and
investment powers.
Note (5) Mr. Haig's reported beneficial ownership of Common Stock includes
15,800,000 shares owned by the Estate of S. M. Damon as to which Mr.
Haig shares voting and investment powers. He is beneficiary of an HR-
10 plan holding 12,444 shares of Common Stock, as to which he has sole
voting and investment powers.
Note (6) Mr. Hoag's reported beneficial ownership of Common Stock includes
38,040 shares in his wife's revocable living trust as to which Mr.
Hoag disclaims beneficial ownership and 3,790 shares held jointly with
his wife.
Note (7) Mr. Kobayashi's reported beneficial ownership of Common Stock includes
4,447 shares held in his wife's IRA account and revocable living trust
as to which he disclaims beneficial ownership.
Note (8) Mr. Tsui's reported beneficial ownership of Common Stock includes
4,000 shares held as trustee of his daughter's trust, as to which he
holds sole voting and investment powers; 4,000 shares held in his
wife's trust; and 166,952 shares owned by First Hawaiian Foundation,
as to which Mr. Tsui holds shared voting and investment powers. Mr.
Tsui disclaims beneficial ownership of the shares owned by his wife's
trust and First Hawaiian Foundation. Mr. Tsui's reported stock options
include an option to acquire 40,340 shares of Common Stock held by his
daughter's trust.
Note (9) Mr. Weyand's reported beneficial ownership of Common Stock includes
15,800,000 shares owned by the Estate of S.M. Damon as to which he
shares voting and investment powers and 32,642 shares in his wife's
revocable living trust as to which he shares voting and investment
powers.
Note (10) Mr. Wo's reported beneficial ownership of Common Stock includes 16,000
shares in the Betty and Bob Wo Foundation as to which he shares voting
and investment powers, 600 shares held jointly with his wife, and
174,000 shares held by C.S. Wo & Sons, Ltd., as to which he shares
voting and investment powers.
Note (11) Mr. Horner's reported beneficial ownership of Common Stock includes
166,952 shares owned by First Hawaiian Foundation, as to which Mr.
Horner holds shared voting and investment powers. Mr. Horner disclaims
beneficial ownership of the shares owned by First Hawaiian Foundation.
Note (12) Mr. Karr's reported beneficial ownership of Common Stock includes 156
shares owned by his wife directly or as custodian, certain options
held by his wife (see Note (1)), and 166,952 shares owned by First
Hawaiian Foundation, as to which Mr. Karr holds shared voting and
investment powers. Mr. Karr disclaims beneficial ownership of the
shares and options owned by his wife and of the shares owned by First
Hawaiian Foundation.
Note (13) Messrs. Haig, Weyand, Ganley and Dods are directors of the
Corporation. Mr. Dods is also the Chairman and Chief Executive Officer
of the Corporation. The trustees have shared voting and investment
powers as to shares owned by the Estate of S.M. Damon.
Note (14) The shares held by the Trust and Investments Division in fiduciary
accounts include: 1,764,848 shares as to which it has sole voting
power; 1,447,032 shares as to which it has shared voting power;
1,683,926 shares as to which it has sole dispositive power; and
1,498,404 shares as to which it has shared dispositive power.
Note (15) Represents 45% of outstanding Voting Stock. BNP Paribas holds sole
voting and dispositive power with respect to 54,993,962 shares, and
shared voting and dispositive power with respect to 1,080,912 Class A
shares owned by an indirect wholly owned subsidiary.
10
EXECUTIVE OFFICERS
Listed below are the executive officers of the Corporation, with their ages
and positions and offices held with the Corporation.
Name, Age Positions and Offices With the Corporation
- --------- ------------------------------------------
Walter A. Dods, Jr., 59 Please see "Election of Directors -- Directors
Continuing in Office"
Don J. McGrath, 52 Please see "Election of Directors -- Directors
Continuing in Office"
John K. Tsui, 62 Please see "Election of Directors -- Directors
Continuing in Office"
Joel Sibrac, 53 Please see "Election of Directors -- Directors
Continuing in Office"
Howard H. Karr, 58 Executive Vice President and Chief Financial
Officer of the Corporation since November 1998;
Executive Vice President and Treasurer of the
Corporation from 1989 to October 1998; Vice
Chairman of First Hawaiian Bank since 1997; Vice
Chairman, Chief Financial Officer and Treasurer
of First Hawaiian Bank from September 1993 to
1997. Mr. Karr has been with First Hawaiian Bank
since 1973.
Douglas C. Grigsby, 48 Executive Vice President and Treasurer of the
Corporation since November 1998 and Chief
Financial Officer of Bank of the West since
1989. Mr. Grigsby has been with Bank of the West
since 1977.
Bernard Brasseur, 62 Executive Vice President and Risk Manager of the
Corporation since November 1998; Risk Manager of
Bank of the West since 1983; Vice Chairman of
First Hawaiian Bank since November 1998. Mr.
Brasseur has been with BNP since 1966, and Bank
of the West since 1983.
Donald G. Horner, 50 Executive Vice President of the Corporation
since 1989; Vice Chairman of First Hawaiian Bank
since July 1994; Executive Vice President of
First Hawaiian Bank from 1993 to 1994. Mr.
Horner has been with First Hawaiian Bank since
1978.
11
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes the compensation for the Chief Executive
Officer and the other four most highly compensated executive officers of the
Corporation for the years ended December 31, 1997, 19962000, 1999 and 1995.1998. All figures
concerning shares and options have been adjusted to reflect a two-for-one stock
split in December 1999.
Long-Term Compensation
------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------
Annual Compensation(1)Compensation/(1)/ Awards Payouts(1)
---------------------------------- ------------------------ ----------Payouts
- ------------------------------------------------------------------------------------------------------------------------------------
Name Other
and Annual Restricted Securities All Other
Principal Compen- Stock Underlying LTIP Compen-
Position Year Salary(2) Bonus(3) sation(4) Awards(5)Salary Bonus/(2)/ sation/(3)/ Awards Options Payouts(6) sation(7)Payouts/(4)/ sation/(5)/
- --------------------- ---- --------- -------- --------- ---------- ---------- ---------- ---------------------------------------------------------------------------------------------------------------------------------------------
Walter A. Dods, Jr. 1997 $851,167 $498,483 $32,0542000 $973,548 $637,868 -- 80,000 None $76,268-- 203,914 -- $154,407
Chairman, of the 1996 $825,267 $462,691 $29,463Chief 1999 $927,188 $607,493 -- 22,000 None $78,500
Board of Directors, 1995 $776,100 $336,666 $23,761 -- 21,000 None $59,408133,100 $280,933 $161,856
Executive Officer 1998 $860,000 $547,189 -- -- 132,300 -- $198,794
and Director
Don J. McGrath 2000 $733,346 $450,014 $ 2,077 128,929 -- $ 78,842
President, Chief Executive1999 $650,016 $390,010 -- -- 89,098 -- $ 76,044
Operating Officer 1998 $108,336 $268,818/(6)/ -- 173,474/(7)/ 55,442 -- --
and Director*
John K. Tsui 2000 $638,555 $289,645 $ 4,934 -- 101,331 -- $186,474
Vice Chairman, 1999 $609,721 $280,875 $ 5,637 -- 73,900 $131,026 $197,442
Chief Credit 1998 $573,000 $274,310 $ 3,256 -- 73,460 -- $224,351
Officer and
Director
of the Corporation
and Bank
John K. Tsui 1997 $566,334 $273,512 $25,444 -- 50,000 None $25,462
President and 1996 $547,133 $131,437 $25,220 $110,006 11,680 None $26,562
Director of the 1995 $501,733 $ 7,733 $28,658 $100,011 11,760 None $12,029
Corporation and
President and Chief
Operating Officer and
Director of the Bank
Howard H. Karr 1997 $337,834 $130,648 $14,1462000 $389,476 $176,659 -- 25,000 None $16,349-- 49,451 -- $ 79,144
Executive Vice 1996 $321,033 $124,914 $14,0441999 $370,643 $163,940 -- 5,840 None $17,034-- 35,288 $ 55,860 $ 87,222
President and 1995 $296,033 $109,520 $13,2101998 $342,000 $147,744 -- 5,880 None $11,324
Treasurer of the
Corporation and
Vice Chairman of
the Bank-- 35,080 -- $104,568
Chief Financial
Officer
Donald G. Horner 1997 $305,833 $115,355 $13,3322000 $355,356 $179,128 $ 9,933 -- 25,000 None $11,08045,072 -- $ 88,386
Executive Vice 1996 $287,633 $111,791 $16,0361999 $337,523 $149,864 $10,650 -- 5,310 None $12,96631,986 $ 50,633 $ 92,381
President of the 1995 $262,6331998 $310,000 $132,240 $ 98,641 $14,3757,527 -- 5,290 None $ 9,633
Corporation and
Vice Chairman of
the Bank
9
Long-Term Compensation
------------------------------------
Annual Compensation(1) Awards Payouts(1)
---------------------------------------- ------------------------ ----------
Name Other
and Annual Restricted Securities All Other
Principal Compen- Stock Underlying LTIP Compen-
Position Year Salary(2) Bonus(3) sation(4) Awards(5) Options Payouts(6) sation(7)
- --------------------- ---- --------- -------- --------- ---------- ---------- ---------- ---------
Gerald M. Pang 1997 $176,700 $67,050 $12,73231,800 -- 5,000 None $ 7,797
Senior Vice 1996 $170,863 $66,761 $13,235 -- 2,950 None $ 9,270
President and 1995 $165,680 $62,062 $12,188 -- 3,150 None $ 6,595
Chief Credit Officer
of the Corporation
and Executive Vice
President and Chief
Credit Officer of
the Bank$105,715
Notes to Summary Compensation Table:
* Mr. McGrath became an executive officer and director of the Corporation on
November 1, 1998, the effective date of the merger of Bank of the West's
holding company into the Corporation (the "Merger").
Note (1) Includes amounts earned but deferred under the DCP.Corporation's Deferred
Compensation Plan (the "DCP").
Note (2) IncludesAmounts are reported for the year in which earned, even if paid in
the following for the above-named executive officers:
Base Director and Total
Year Salary Committee Fees* Salary
------------------------------------------
Dods.... 1997 $851,167 $-- $851,167
1996 $741,667 $83,600 $825,267
1995 $687,500 $88,600 $776,100
Tsui.... 1997 $566,334 $-- $566,334
1996 $473,333 $73,800 $547,133
1995 $433,333 $68,400 $501,733
Karr.... 1997 $337,834 $-- $337,834
1996 $295,833 $25,200 $321,033
1995 $270,833 $25,200 $296,033
Horner.. 1997 $305,833 $-- $305,833
1996 $270,833 $16,800 $287,633
1995 $245,833 $16,800 $262,633
Pang.... 1997 $176,700 $-- $176,700
1996 $170,863 $-- $170,863
1995 $165,680 $-- $165,680
*For periods after 1996, employees of the Corporation or its subsidiaries
do not receive director or committee fees. Effective January 1, 1997, the
Executive Compensation Committee increased the base salary of inside
directors to replace the board and/or committee fees no longer received.
The amount of this adjustment was reduced to avoid the effect that a base
salary increase would have on other bonus and incentive programs measured
in part by base salary. The adjustments to base salary for named executive
officers were Mr. Dods, $57,000; Mr. Tsui, $53,000; Mr. Karr, $17,000; and
Mr. Horner, $10,000.
Note (3) Includesyear. Amounts include cash payments under the
Corporation's Cash Bonus Plan ("Cash
Bonus Plan") for all three years1998 and cash payments under the
IPKECorporation's Incentive Plan for 1996 and 1995. IPKE paymentsKey Executives ("IPKE") for the calendar year 1995 were paid in
1996 and for calendar year 1996 in 1997.all
years. The Cash Bonus Plan and IPKE
payments for calendar year 1997 are inwas discontinued commencing with the
process of being calculated
and will be reported in the Proxy Statement for theJanuary 1, 1999 annual
meeting.plan year.
Note (4) Includes primarily imputed income, including "gross-up" for income
taxes, related to social club memberships and dues and automobile
allowances. Also includes(3) Reported amount represents above-market interest earned on amounts
deferred under the DCP in 1996.DCP. The amountsaggregate amount of Other Annual
Compensation forperquisites and other
personal benefits received as compensation by each of the above-namednamed
executive officers in each of the three most recent years werewas less
than $50,000 orand 10% of Salarysalary and Bonus.
10
bonus.
Note (5) The Executive Compensation Committee may, at its sole discretion, pay
IPKE awards(4) LTIP payouts are reported in restricted Common Stock withthe year payment is made, not the years
for which payments are earned. To address the impact of the Merger
under change-in-control provisions of the Long Term Incentive Plan, a
fair market valuepayment equal to the payment amount, in lieu of cash. As of December 31, 1997, the
aggregate number of non-vested restricted shares by the year of vesting
of such shares for eachone-third of the above-named executive officersmaximum value attainable for the
1998-2000 performance cycle was made to participants in the LTIP
(based upon 1998 compensation levels) in January 1999. Messrs. Dods,
Tsui, Karr and aggregate market value (based onHorner waived all other payments under the market priceLTIP change
-in-control provisions arising out of the stock at
December 31, 1997) follow:
Number of Market
Shares Vesting In Value
1998 12/31/97
----------------- ---------
Dods....... -- --
Tsui....... 7,816 310,686
Karr....... -- --
Horner..... 17,666 702,224
Pang....... -- --
----------------- ---------
Total.. 25,482 $1,012,910
Dividends are paid to the above-named executive officers on their
restricted stock holdings. Participants are entitled to vote the
restricted shares. Restricted IPKE shares become vested upon the
participant attaining 60 years of age, completion of 20 full years of
employment, retirement, death, or termination of employment prior to
retirement with the approval of the Corporation, whichever occurs
earliest. For those participants who had previously met the minimum
restrictions for vesting by completion of 20 full years of employment or
attaining 60 years of age, the Committee imposes a five-year minimum
waiting period from the date of any subsequent stock awards. The IPKE also
provides for forfeiture by the participant and reversion to the
Corporation of all non-vested shares previously awarded in certain cases
of termination of employment.Merger.
Note (6) Because the Corporation did not exceed its minimum threshold average
return on equity ("ROE") of 15% for the 1993-1995 performance cycle its minimum
threshold ROE of 14% for the 1994-1996 performance cycle and its other
performance standards for the 1995-1997 performance cycle, no awards were paid
in 1996 or 1997, or will be payable in 1998, for the cycles which ended December
31, 1995, 1996 and 1997, respectively.
Note (7)(5) Includes (i) premiums for term life insurance, including "gross-up" for
income taxes; (ii) amounts related to split dollarsplit-dollar insurance
agreements as discussed below; and (iii) Corporation contributions for the
account of the above-namedabove
12
-named executive officers to the Corporation's Profit Sharing Plan
("Profit Sharing Plan") and amounts credited to the accounts of such
executive officers under the profit-sharing portion of the
Corporation's nonqualified, unfunded Supplemental Executive
Retirement Plan (the "SERP") that provides benefits that would have
been provided under the Profit Sharing Plan but for Internal Revenue
Code (the "Code") restrictions on such benefits. (In determining
profit-sharing benefits under the SERP, the participant's covered
compensation includes base pay, commissions, overtime, short-term
incentive pay, and the annual cash bonus earned under IPKE; a
participant's covered compensation does not include the cash portion
of the Corporation's Cash Bonus Plan.) Profit-sharing contributions
to the Profit Sharing Plan were discontinued commencing with the
January 1, 1999 plan year. Accordingly, the Profit Sharing Plan
column in the table below includes only 401(k) matching
contributions, if any, made on the executive's behalf. Details of All
Other Compensation for each ofreceived by the above-named executive officers for
19972000 are as follows:
Profit Sharing Plan
Term Split Dollar (including SERP)
Insurance Insurance Contributions Total
--------- ------------ ------------------- -------
Dods.... $32,483 $5,302 $38,483 $76,268
Tsui.... $-- $5,125 $20,337 $25,462
Karr.... $-- $2,991 $13,358 $16,349
Horner.. $-- $1,175 $ 9,905 $11,080
Pang.... $-- $ 847 $ 6,950 $ 7,797
Split-Dollar Insurance
---------------------- Profit
Life Term Interest Sharing Plan
Name Insurance Element Element Contributions Total
- --------------------------------------------------------------------------------
Dods $32,395 $5,641 $116,371 -- $154,407
McGrath -- $3,223 $ 70,269 $5,250 $ 78,742
Tsui -- $6,845 $179,629 -- $186,474
Karr -- $2,906 $ 76,238 -- $ 79,144
Horner -- $1,550 $ 86,836 -- $ 88,386
The Corporation has split dollarsplit-dollar insurance agreements with the above-namednamed
executive officers, as well as certain other senior officers. TheUnder
each agreement, the Corporation pays all premiums for a policy on the
insurance premiumlife of the executive. The executive is entitled to a portion of the
death benefits equal to three times salary, and imputes the economic benefitCorporation is
entitled to the remainder. If the executive utilizing the PS58 table publishedremains employed by the
Internal Revenue
Service. UnderCorporation, the agreement,policy splits (typically at age 65) and the
executive ownsretains a policy with a death benefit equal to three times
final salary, and a portion of the accumulated cash values. The
policies are designed so that the Corporation owns an
interest in the policy on the life of the executive sufficient towill recover all insurance
premiums previously paid plus any foregonean interest netfactor from its share of
death benefits or cash values. The amounts under "Split-Dollar
Insurance - Term Element" represent the income tax
11
benefit, on such premium payments upon the deathportion of the executive. The
amount for each named executive officer under this split dollar
insurance agreement includedpremiums paid in 2000 corresponding to the above table representsinsurer's lowest
term insurance rate for the foregone interest,
netrelevant death benefit, plus related
gross-ups for income taxes. The amounts under "Split-Dollar Insurance
-Interest Element" represent the present values of applicable income tax benefit.hypothetical
interest-free loans of the non-term elements of 2000 split-dollar
insurance premiums. This methodology has also been used in
calculating the split-dollar elements of 1998 and 1999 amounts shown
under "All Other Compensation." The Corporation also has a $1,000,000
whole life insurance policy on the life of Mr. Dods. The premium and
related "gross-up"gross-up for income taxes on this policy are included under
the Term Insurance column."Life Insurance." The death benefit under this policy is deducted
from the death benefit under Mr. Dods' split dollarsplit-dollar policy.
Note (6) The 1998 bonus amount shown for Mr. McGrath is the annual bonus he
earned for all of calendar year 1998 under the Bank of the West
Senior Management Incentive Plan, although he was an executive
officer of the Corporation only from November 1, 1998.
Note (7) These restricted shares were awarded pursuant to requirements of the
Merger and were not part of a recurring compensation arrangement.
Option Grants in Last Fiscal Year
The following table sets forth the stock options granted during 19972000 option grants to each of the above-namednamed
executive officers under the 1991 SIP. The table also listsCorporation's 1998 Stock Incentive Plan ("1998
SIP") and the potential realizable values of such options on the basis of assumed annual
compounded stock appreciation rates of 5% and 10% over the life of the options,
which is set at 10 years.options.
13
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Grants(1)Grants/(1)/ for Option Term(2)
------------------------------------------------ -----------------------------Term/(2)/
- ------------------------------------------------------------------------------------------------------------------------------------
Number of Percent of
Securities Total Options Exercise
Underlying Granted to or
Expira-
Options Employees in Base Price tionExpiration Dollar Value of
Name Granted(3)Granted Fiscal Year Per Share Date Options Granted 5% 10%
---- ---------- ------------ ---------- ------- --------- ---------- ------------------------------------------------------------------------------------------------------------------------------------
Walter A.
Dods Jr... 80,000 26.0% $33.25203,914 15.3% $15.125 3/05/07 $1,672,860 $4,239,355
John K. Tsui......... 50,000 16.3% $33.2501/10 $3,084,199 $1,939,636 $4,915,419
McGrath 128,929 9.7% $15.125 3/05/07 $1,045,537 $2,649,597
Howard H. Karr....... 25,000 8.1% $33.2501/10 $1,950,051 $1,226,377 $3,107,879
Tsui 101,331 7.6% $15.125 3/05/0701/10 $1,532,631 $ 522,769 $1,324,798
Donald G. Horner..... 25,000 8.1% $33.25963,864 $2,442,620
Karr 49,451 3.7% $15.125 3/05/0701/10 $ 522,769 $1,324,798
Gerald M. Pang....... 5,000 1.6% $33.25747,946 $ 470,379 $1,192,034
Horner 45,072 3.4% $15.125 3/05/0701/10 $ 104,554681,714 $ 264,960428,726 $1,086,477
Notes to Option Grants in Last Fiscal Year:
Note (1) Options under the 1991 SIP arewere granted at 100% of the market value of the stock on the
date of the grant. OptionsThe options vest 25% per year afteron the day following the
first anniversary of the date of grant. No option may be exercised
prior to vesting (and in no event earlier than 6 months after the date
of grant) or later than 10 years after the date of grant.grant and 25% per year thereafter. The
exercise price of an option is payable either in cash by tendering previously
acquired shares by the optionee, and/or by a combination of cash and previously
acquired shares. In the event of a change in control, as
defined in the 1991 SIP, all options granted and held at least 6 months
become immediately exercisable and vested. In the event of death,
disabilityTax withholding may be accomplished by cash payments
or retirement, the(with Executive Compensation Committee has the discretion to
accelerate the vesting of options previously granted. The 1991 SIP
provides for the shortening of the exercise period for vested options
if termination is due to death, disability or retirement. The 1991 SIP
also provides for the Corporation to withhold statutory income taxes
upon the exerciseapproval) share
withholding. None of the options by the option holder paying cash or
tendering previously acquired Common Stock or by the Corporation
withholding the appropriate number of option shares which would have
been issued following the option exercise. Without the approval of the
stockholders of the Corporation, the 1991 SIP cannot be terminated,
amended, or modified to (a) increase the total amount of shares which
may be issued except as provided in the 1991 SIP; (b) change the class
of eligible employees; (c) materially increase the cost of the 1991 SIP
or benefits to the participants; (d) extend the maximum period after
the date of grant during which the options may be exercised; or (e)
change the provisions of the exercise price.were reloads.
Note (2) The potential realizable value is reported net of the option exercise
price, but before income taxes associated with exercise. These
amounts represent assumed annual compounded rates of appreciation of
the underlying stock of 5% and 10% from the date of grant to the end
of the option. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Corporation's Common Stock, overall stock
market conditions, and the optionees'optionee's continued employment through
the vesting period. The amounts reflected in these columns may not
necessarily be achieved.
Note (3) None of the options granted represents a reload option.
12
OptionAggregated Option/SAR Exercises in Last Fiscal Year and FY-End
Option/SAR Values at December 31, 1997
The following table reflects the securities underlying unexercised options
and the value of these options as of December 31, 1997:
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
December 31, 19972000 December 31, 19972000
Shares Acquired Excercisable/ Exercisable/
Exercisable/on Exercise Value Realized Unexercisable Unexcercisable
Name Unexercisable Unexercisable
------------------------------------- ----------------- -----------------(#) ($) (#) ($)
----------------------------------------------------------------------------------------------------------------------------
Walter A.
Dods Jr................... 69,300/112,500 $861,000/37,600 $432,400 491,575/303,739 $4,650,384/$932,250
John K. Tsui......................... 16,300/67,140 $207,370/2,847,994
Tsui 0 $539,530
Howard H. Karr....................... 18,025/33,735 $222,826/ 0 258,815/156,756 $2,388,531/$273,514
Donald G. Horner..................... 14,254/32,596 $177,026/1,450,517
Karr 8,840 $258,822
Gerald M. Pang....................... 9,914/9,546 $123,346/ 97,240 138,582/ 75,917 $1,313,181/$90,437 704,345
Horner 10,800 $103,356 122,697/ 69,061 $1,146,297/$ 641,165
McGrath 0 $ 0 77,716/195,753 $ 474,563/$1,823,172
There were no options exercised by the above-named executive officers in 1997.
Ten-Year Option Repricings
For the year ended December 31, 1997,2000, there was no adjustment or amendment to
the exercise price of the stock options previously awarded.
Long-Term Incentive Plans-AwardsPlans--Awards in Last Fiscal Year
The LTIP applies to a group of key executives approved by the Executive
Compensation Committee, much smaller than the group eligible for IPKE and 1991
SIP awards. It is intended to provide incentive compensation to participants
based on the Corporation's ability to sustain a target level of performance over
a 3-year performance cycle. The LTIP is administered by the Executive
Compensation Committee and has no expiration date.
Under the LTIP, no "awards" of shares, units or other rights, as such, are
granted. Instead, at the beginning of each 3-year performance cycle, the
Executive Compensation Committee designates which key executives will be
eligible to participate in the LTIP for the cycle. Additional key executives may
be declared eligible during the cycle. The Committee also establishes target
amounts of individual payouts and corporate performance standards to be met over
the 3-year performance cycle.
In 1997, the Executive Compensation Committee established the formula forFor information concerning LTIP awards for the 3-year cycle 1997 through 1999. Under the formula for this
cycle, LTIP payouts are based on target percentages (ranging from 10% to 50%) of
each participant's average base salary over the 3-year performance cycle. If the
Corporation does not achieve a minimum threshold average annual return on assets
("ROA") of 1% over the 3-year performance cycle, no payouts will be due under
the LTIP. When the Corporation's ROA exceeds the minimum threshold level, the
target awards to participants are adjusted by a factor (ranging from 0% to 140%)
based on the Corporation's financial performance compared to a peer group, as
measured by relative return on average equity ("ROE"), and based upon the
relative Total Stockholder Return ("TSR"). Relative ROE and relative TSR are
equally weighted in the payout calculation. In addition, LTIP payouts to
participants may be adjusted by the Executive Compensation Committee based on
that individual's performance (from 0% to 140% of the individual's targeted
amount as adjusted for the Corporation's performance).during 2000, see "Proposal To Approve
Certain Material Terms Of The peer group used in the LTIP for comparison of ROE is comprised of
regional bank holding companies similar to the Corporation in size, performance
and nature of operations. The group is updated and approved annually by the
Executive Compensation Committee. The peer group for TSR comparison is the S&P
Major Regional Bank Index. The former group includes some, but not all, of the
companies in the S&P Major Regional Bank Index.
Cash payouts are made after each 3-year performance cycle. There were no
payouts in 1997 for the three-year cycle 1994-1996 because the Corporation did
not achieve the minimum threshold average ROE required for that cycle. (For 3-
year performance cycles ending in years before 1997, the minimum threshold
performance measure was average ROE rather than average ROA.) A participant can
elect to have the cash award deferred for future payment under the DCP.
13
The following table reflects the estimated future payouts, with respect to
the named executive officers, at threshold, target and maximum award levels for
the 3-year performance cycle beginning in 1997 and ending in 1999. Actual
payouts are contingent upon the Corporation meeting its minimum threshold ROA
and are subject to adjustment by the Executive Compensation Committee as
described above, based upon corporate and individual performances, which will be
determined in 2000 for the 1997-1999 performance cycle.
Performance
Number of or Other Estimated Future Payouts
Shares, Units Period Until under Non-Stock Price-Based Plans(2)
or Other Maturation or -------------------------------------------
Name Rights Payout(1) Threshold(3) Target Maximum(4)
- --------------------- ------------- ------------- ------------ -------- ----------
Walter A. Dods, Jr... None 12/31/99 None $425,584 $851,168
John K. Tsui......... None 12/31/99 None $198,217 $396,434
Howard H. Karr....... None 12/31/99 None $ 84,459 $168,918
Donald G. Horner..... None 12/31/99 None $ 76,458 $152,916
Gerald M. Pang....... None 12/31/99 None $ 35,340 $ 70,680
Notes to Long-Term Incentive Plans--Awards inPlan-LTIP Awards In Last
Fiscal Year:
Note (1) Performance period beginning January 1, 1997 and ending December 31,
1999.
Note (2) Estimated future payouts under the Target and Maximum columns are based
upon the above-named executive officer's salary for the year ended
December 31, 1997.
Note (3) If the Corporation does not meet its minimum threshold average ROA or
the participant receives a 0% individual performance rating, there is
no payout.
Note (4) Under the current formula, the maximum individual payout is limited to
200% of the target amount.Year."
Defined Benefit Pension and Supplemental Executive Retirement Plans
The Corporation has an Employees' Retirement Plan (the "ERP") for employees
of the Corporation and participating subsidiaries. Under the ERP, covered
compensation includes salary, including overtime, but excluding bonuses.
Pension compensation is also limited to the maximum allowable under the Internal Revenue
Code.
Retirement benefits become payable effective upon an employee's retirement at
the normal retirement age of 65 years. Normal retirement benefits payable under
the ERP are based on total or finalaverage compensation and years of credited service. Under
specified circumstances, an employee who has attained a certain age and length
of service may retire early with reduced benefits.
14
The ERP was "frozen" as of December 31, 1995 and no participantnone of the executive officers
named in the Summary Compensation Table accrues such benefits under the ERP for
service after December 31, 1995.
Effective as of January 1, 1999, assets attributable to certain Bank of the
West employees in the BNP US Retirement Plan (the "BNP Plan") were merged into
the ERP and the ERP was amended to provide eligible Bank of the West employees
with accrual of benefits comparable to those provided under the BNP Plan.
Benefits accrue based upon an employee's years of service and compensation over
his/her years of employment. Except for Mr. McGrath, none of the executive
officers named in the Summary Compensation Table is eligible to accrue such
benefits.
The Corporation also maintains a grandfathered pension portion of the SERP
under which the
above-named executive officers named in the Summary Compensation Table continue
to earn benefits based on the ERP formula. In determining grandfathered pension
benefits under the SERP, the participant's covered compensation includes base
pay, commissions, overtime, short-term incentive pay, and the annual cash bonus
earned under IPKE; a participant's covered compensation does not include the
cash portion of the Corporation's Cash Bonus Plan or any LTIP bonus. The
grandfathered pension benefit payable under the SERP is reduced by the
participant's "frozen" accrued benefit under the ERP.
Effective as of January 1, 1998, the SERP was amended to provide that
eligible executive officers, including the executive officers named in the
Summary Compensation Table, would receive benefits under the SERP in an amount
equal to the greater of (i) the benefits payable under the profit-sharing
portion of the SERP and the grandfathered SERP pension benefits or (ii) a target
percentage (60% for executives with 20 or more years of service) of his/her
final average compensation (see Note (1) below).
As required by the Merger agreement, the SERP was amended to provide that
certain Bank of the West employees, including Mr. McGrath, would be entitled to
a minimum benefit equal to the minimum benefit under the terminated Bank of the
West Excess Benefit Plan. To be eligible for such minimum benefit, Mr. McGrath
must have completed at least 20 years of service and attained at least age 55 at
retirement. The minimum benefit will be 50% of his base salary at the annual
rate in effect on the date he retires from service ("final pay") if he is at
least age 60 at retirement and 30% of his final pay if he is at least age 55 but
less than 60 at retirement. Mr. McGrath is currently age 52 with 25 years of
service and at December 31, 2000 his base salary was $750,024.
The following table illustrates the estimated annual pension benefits payable
under the ERP and the SERP to an executive officer at age 65. Whether these
amounts become payable depends on the contingencies and conditions set forth in
the ERP and the SERP.
14
Final Average
Compensation/(1)/ Years of Service(2)
Average -----------------------------------------------------------
Compensation(1)Service/2)/
- ------------------------------------------------------------------------------------
15 20 25 30 35 40
--------------- -------- -------- -------- -------- -------- ----------- ------------------------------------------------------------------------------------
$200,000 $ 50,082 $ 66,777 $ 83,471 $100,165 $116,859 $100,165 116,859 133,553
300,000 76,332 101,777 127,221 152,665 178,109 203,553
400,000 102,582 136,777 170,971 205,165 239,359 273,553
500,000 128,832 171,777 214,721 257,665 300,609 343,553
600,000 155,082 206,777 258,471 310,165 361,859 413,553
700,000 181,332 241,777 302,221 362,665 423,109 483,553
800,000 207,582 276,777 345,971 415,165 484,359 553,553
900,000 233,832 311,777 389,721 467,665 545,609 623,553
1,000,000 260,082 346,777 433,471 520,165 606,859 693,553
1,100,000 286,332 381,777 477,221 572,665 668,109 763,553
1,200,000 312,582 416,777 520,971 625,165 729,359 833,553
1,300,000 338,832 451,777 564,721 677,665 790,609 903,553
1,400,000 365,082 486,777 608,471 730,165 851,859 973,553
1,500,000 391,332 521,777 652,221 782,665 913,109 1,043,553
1,600,000 417,582 556,777 695,971 835,165 974,359 1,113,553
Notes to Defined Benefit Pension Plans Table:
Note (1) Final average compensation represents the average annual compensation
during the highest 60 consecutive calendar months in the last 120
calendar months of creditable service. Compensation for the purpose
of this table includes base salary plus the value of awards under the
IPKE as shown on the Summary Compensation Table (but not bonuses
under the LTIP or the Cash Bonus Plan). The amount of the IPKE bonus
included in compensation for any year for purposes of the ERP and the SERP is the
amount earned for the performance year, though
15
not paid until March of the following year. The estimated annual
benefits are computed on the basis of a straight-life annuity form of
payment with no social security offset.
Note(2)Note (2) As of December 31, 1997,2000, the number of years of creditable service
under the Corporation's defined benefit plans for each of the
executive officers named in the Summary Compensation Table was as
follows: Mr. Dods, 2932 years; Mr. McGrath, 25 years; Mr. Tsui, 1417
years (4(seven years actual service plus 10ten years added by the
Executive Compensation Committee when Mr. Tsui was hired); Mr. Karr,
25 years; Mr. Horner, 1928 years; and Mr. Pang,Horner, 22 years.
The Merger constituted a change in control for purposes of the SERP. As a
result, if a SERP participant is "involuntarily terminated" within 36 months of
the Merger, he/she will be granted three extra years of credited service, the
SERP benefit will be based on the greater of covered compensation over the 12
months prior to termination or the final average compensation otherwise provided
in the SERP, and benefit payments will commence on the later of attaining age 55
or the date of termination. The SERP defines "involuntary termination" to
include a discharge or resignation in response to a (i) change in day-to-day
duties; (ii) reduction in compensation or benefits; (iii) downward change of
title; or (iv) relocation requested by the employer.
Change-in-Control and Employment Arrangements
Prior to the Merger, Mr. McGrath was a party to an employment agreement with
Bank of the West. To replace that agreement, the Corporation entered into an
employment agreement with Mr. McGrath (the "Agreement"), effective upon the
consummation of the Merger. Pursuant to the Agreement, Mr. McGrath will serve as
President and Chief Operating Officer of the Corporation and President and Chief
Executive Officer of Bank of the West, with his principal business office in the
San Francisco Bay area. Either party may terminate Mr. McGrath's employment upon
30 days' advance notice under the Agreement. Mr. McGrath is entitled to receive
a base salary at the annual rate of at least $650,000, receive at least four
weeks of paid vacation per year, and participate in all of the Corporation's
employee benefit plans and executive compensation programs. In addition, if (1)
he voluntarily resigns his employment for "Good Reason" (as defined in the
Agreement) or (2) the Corporation terminates his employment at any time for any
reason other than "Cause" (as defined in the Agreement) or "Disability" (as
defined in the Agreement), then he will be entitled to a severance payment equal
to 300% of the sum of his then-current annual rate of "Base Compensation" (as
defined in the Agreement), plus the average of the annual bonuses awarded to him
for the three years ending immediately prior to the date of his termination. He
would also be entitled to continue participation in the Corporation's group
insurance plans for one year and he would be credited with an additional year of
service for purposes of determining the vested portion of his stock options. If
a "Change in Control" (as defined in the Agreement) occurs, all of the stock
options he holds at termination will become 100% vested and remain exercisable
for 18 months following termination of employment. The Corporation would also be
obligated to provide Mr. McGrath with a tax restoration payment if any payments
or benefits caused an excise tax to be imposed upon him. If he receives such
severance benefits, he will be subject to a non-competition covenant for three
years following the termination of his employment (provided a Change in Control
Arrangements
There are no employment contracts, change-in-control arrangements (other thanhas not occurred). He is also subject, under all circumstances and at all times,
to a confidentiality covenant. As of the effective time of the Merger, he was
also appointed to the Board of Directors of the Corporation and of First
Hawaiian Bank.
Pursuant to a Standstill and Governance Agreement between the Corporation and
BNP, Mr. Dods is to continue as Chief Executive Officer of the Corporation and
First Hawaiian Bank, and Mr. McGrath is to continue as Chief Operating Officer
of the Corporation and Chief Executive Officer of Bank of the West, unless
removed by a vote of two-thirds of the Board of Directors or until their death,
voluntary retirement or resignation.
If there is a change in control of the Corporation, benefits will be
accelerated or paid under various compensation plans. Options issued under the
1998 SIP or the 1991 Stock Incentive Plan (the "1991 SIP") that have not yet
vested will become fully exercisable; all LTIP awards that have been outstanding
six or more months will automatically be deemed fully earned at the maximum
target value; SERP participants will be entitled to additional benefits if
"involuntarily terminated" within 36 months following the change in control (as
described under "Defined Benefit Pension and Supplemental Executive Retirement
Plans"); and participants in the LTIP, 1991 SIPDeferred Compensation Plan will be entitled to
an immediate lump sum distribution of certain amounts if that plan is not
assumed by the successor organization. In addition, the Corporation maintains a
rabbi trust with a third-party trustee for the SERP and DCP)the Deferred
Compensation Plan and if an actual or termination of employment arrangements withpotential change in control occurs, the
above-named executive officers.Corporation will be required to contribute sufficient funds to the trust to fund
all benefits payable to participants.
16
Compensation Committee Interlocks and Insider Participation
The members of the Executive Compensation Committee areduring 2000 were Fujio
Matsuda (Chairman), John C. Couch,Dr. Julia Ann Frohlich, Robert A. Fuhrman, David M. Haig,
Richard T. MamiyaMichel Larrouilh (until February 12, 2000) and Roderick F. McPhee.
No memberPierre Mariani (since April 20,
2000).
The Corporation's bank subsidiaries have made loans to members of the
Executive Compensation Committee, was, at any time duringand entities related to those directors
(including the last completed fiscal year, an officer or employeeEstate of the Corporation or anyS.M. Damon, of its subsidiaries.
The Corporation has in the ordinary course of business extended credit to
Messrs. Couch andwhich Mr. Haig and to Doctors Matsuda, Mamiya and McPhee (consisting of
real estate mortgages and consumer credit lines) as follows:
Largest Aggregate Interest
Aggregate Indebtedness Rate
Indebtedness Outstanding Per
Name in 1997 December 31, 1997 Annum
-------------------- ------------ ----------------- -------------
John C. Couch....... $1,857,704 $1,832,182 5.000%-9.250%
David M. Haig....... $1,046,419 $ 977,248 8.000%-8.250%
Richard T. Mamiya... $2,611,528 $ 444,444 5.000%-9.875%
Fujio Matsuda....... $ 357,973 $ 326,919 5.000%-8.375%
Roderick F. McPhee.. $ 280,217 $ 276,248 8.125%-8.375%
15
Mr. Couch is Chairman of the Board and a director of A&B, which owns ____% of
the Corporation's outstanding Common Stock. Mr. Dods is a director of A&Btrustee and
the Trust and Investments Division of First Hawaiian Bank holds __________
shares of A&B's common stock in a fiduciary capacity. Mr. Dods does not serve on
the executive compensation committee (or other board committee performing the
equivalent function) of A&B.
The Bank has (a) made loans to, and issued letters of credit on behalf of,
A&B and its wholly-owned subsidiary, A&B-Hawaii, Inc., (b) made loans to, and
issued a letter of credit on behalf of, Matson Navigation Company, Inc., a
subsidiary of A&B, and (c) made loans to, and issued letters of credit on behalf
of, California and Hawaiian Sugar Company, Inc., a subsidiary of A&B-Hawaii,
Inc.beneficiary). These loans and the letters of credit were made in the ordinary course of business, were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and did
not involve more than normal risks of collectibility or present other
unfavorable features.
ReportThe Corporation has in the ordinary course of Executive Compensation Committee.
Thebusiness extended credit to
directors, including Mr. Matsuda. During 2000, the largest aggregate amount of
such loans from the Corporation to Mr. Matsuda was $280,290, the aggregate
amount outstanding on December 31, 2000 was $273,694, and the interest rates on
those loans ranged from 5.0% to 8.75% per annum.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
This report covers the following topics:
. Role of the Executive Compensation Committee of the Board of Directors (the "Committee")
is composed of independent, outside Directors. Executive Compensation Principles
. Components of the Corporation.Executive Compensation Program
. Compensation of the Chief Executive Officer
Role of the Executive Compensation Committee
The Board of Directors has delegated to the Committee responsibility for
administering the Corporation's executive compensation program. No member of the
Committee was, during the last completed fiscal year, an officer or employee of
the Corporation or any of its subsidiaries.
Executive Compensation Principles
The executive compensation program is designed to provide short-term and long
- -term incentives, build stockholder value and reward top performers. Key goals
include:
. Encouraging managers to improve the performance of the Corporation, and
its subsidiaries to. Attracting, motivating and retaining highly talented individuals.
Components of the Committee.Executive Compensation Program
The three components of the executive compensation philosophy of the Corporation is to provide
remuneration to top performers that is consistent with the quality of their
contributions and the sacrifices they make on behalf of the organization. We
believe that the overall compensation package of executives who contribute to
the long-term advancement of the company should reflect their influence on that
growth. The Corporation intends to make it rewarding for these key executives to
remain until retirement. Key objectives of this philosophy include:program are:
. providing a pay system designed to attract, retain and motivate
executives;Base Salary
. establishing compensation plans which emphasize performance-based pay
opportunities, as measured by strategic, financial and operating objectives
and goals; andAnnual Incentives
. providing longer-term, equity-based incentives for executives to ensure
they are motivated and rewarded for growth in equity value and enhanced
value to the stockholders.
The compensation program administered by the Committee includes three
components designed to implement the foregoing objectives: (1) base salaries;
(2) annual incentives; and (3) long-term incentives. Each of these components of
compensation is discussed separately below.Long-Term Incentives
Base Salaries
Base salaries of executive officers are set annually. Factorsdetermined by evaluating factors such
as varying levelsscope of responsibility,responsibilities, individual experience and performance, consistencythe
competitive marketplace, and fairness, cost of living factors, the Corporation's operating results and
financial performance and cost control are considered.consistency. No particular weight is placed on, or
relative importance given to, any single factor in evaluating and adjusting base
salaries.
Annual Incentives
Annual incentives for executive officers are provided pursuantby a short-term bonus
plan called the Incentive Plan for Key Executives ("IPKE"). The IPKE is designed
to the IPKE,
which providespay a bonus in cash and deferred bonusesor restricted stock based uponon the Corporation's
profitability and the executive's performance over the course of the year. The
IPKE promotes the Corporation's pay-for-performance philosophyobjectives by providing executives with
direct financial incentives in the formtied directly to achievement of annual cash bonuses
or restricted stock awards, to achieve corporate and individual
performance goals. Moreover, annual bonus opportunities allow the Corporation to
communicate specific goals that are of primary importance during the coming year
and to motivate executives to achieve thesethose goals.
The IPKE was originally approved byprovides that the stockholders in 1969 and has subsequently been amended several times by the
stockholders.
The totalaggregate amount availableof awards for bonuses under the IPKE is a bonus pool equal
to 2 1/2%any fiscal year may
not exceed 2.5% of that year's consolidated income before income taxes and
securities gainsgains. The Committee, in consultation with the Corporation's Chief
Executive Officer and/or Chief Financial Officer, may make such adjustments to
the reported amount of such consolidated income as the Committee deems
appropriate. The maximum award to any individual for any fiscal year is the
performanceamount of that individual's basic annual salary for that year. Guideline percentagesThe Committee
has discretion (subject to
17
limitations that apply to "covered executives") to determine the amount and form
of all IPKE awards. The Committee establishes award guidelines (targets)
expressed as a percentage of base salary are set, increasingsalary. These target percentages increase as
an executive'sexecutives' pay grade increases.grades increase. The Chief Executive Officer, at his discretion,
allocates a portion of the annual bonus pool to each business unit. The manager
of each business unit recommends how this allocated amount should be distributed
to individual participants in the business unit. Individual awards above or
below guideline percentages are generally based upon the participant's grade
level and performance during the performance period. The business unit manager's
recommendations are 16
reviewed and approved or adjusted by the Chief Executive
Officer. These recommendations are then presented to the Committee for final
review and approval. The Committee grants individual bonuses above or below
guideline percentages based upon the Committee's judgment, after reviewing the
recommendation of the Chief Executive Officer, as to individual performance and
relative levels of responsibility. All IPKE decisions concerning the CEO and
other "covered executives," as defined below, are made by the Committee. The
IPKE performance year is the fiscal year of the Corporation, which is the
calendar year. Calculationdetermination and award of IPKE bonuses for each year's performance are deferred
until the first quarter of the following March.year. This allows management and the
Committee to base the awards upon finalyear-end performance resultsresults.
In 2000, the Committee adopted and stockholders approved a policy that
applies to annual IPKE incentive awards to persons the Committee has designated
for that year as "covered executives." Mr. Dods, Mr. McGrath and Mr. Tsui were
covered executives for 2000. The policy is intended to qualify those awards as
"performance based" for purposes of Section 162(m) of the Internal Revenue Code
so that IPKE awards to covered executives will be tax deductible. Subject to the
Committee's right to reduce the amount of any award made under the policy, each
covered executive for a plan year is granted an incentive award for that year
equal to the lesser of (i) .4% of the Corporation's net income before taxes for
that year, or (ii) 100% of the covered executive's annualized base salary in
effect on the ninetieth day of the year. Therefore,The Committee has no IPKE awards fordiscretion to
increase the 1997 performance year have been calculated and they are not
reportedamount of an incentive award payable to a covered executive above
the amount determined pursuant to the formula in this Proxy Statement. IPKE awards granted in 1996 and 1997 for 1995
and 1996 performances for the named executive officers are reported in
"Executive Compensation - Summary Compensation Table."
Executive officers are also eligiblepolicy. However, at any
time prior to receive annual contributions and
bonuses under the Corporation's Profit Sharing Plan and Cash Bonus Plan, which
are plans with fixed profit sharing formulas in which all eligible employeespayment of the Corporation participate and which are not administeredan award governed by the Committee.policy, the Committee, in its
sole discretion, may reduce or eliminate entirely the amount payable under that
award.
Long-Term Incentives
Long-term incentives are provided in the form of cash awards under the
Corporation's LTIP and grants of stock options under the 1991
SIP. In keeping
withSIP and the Corporation's commitment to provide a total compensation package which
places a significant amount of pay "at-risk", long-term incentives, together
with1998 SIP, and cash awards under the IPKE, generally comprise approximately 40% of the value of
an executive's total compensation package if the Corporation meets its target
performance levels.
The Corporation's LTIP applies to a group of key executives approved by the
Committee that is much smaller than the group eligible for IPKE and 1991 SIP
awards. It is intended to provide incentive compensation to participants based
on the Corporation's ability to sustain target levels of performance over 3-year
performance cycles. Under the formula in effect for the 3-year cycle ending in
1997, LTIP awards were based on target percentages (ranging from 10% to 50%) of
each participant's average base salary over the 3-year performance cycle. If the
Corporation did not achieve a threshold average ROA of 1.00% over the 3-year
performance cycle, no payouts were to be made under the LTIP.
When the
Corporation's average ROA exceeded the threshold level, the target payouts to
participants were to be adjusted by a factor (ranging from 0% to 140%) based on
the Corporation's financial performance compared to peer groups, as measured by
ROE, and based upon the Corporation's total stockholder return ("TSR") over the
period. Relative ROE and TSR were equally weighted in the payout determination.
In addition, LTIP awards to participants were to be adjusted by the Committee
based on each individual's performance (from 0% to 140% of the individual's
targeted amount as adjusted for the Corporation's performance). In the
Committee's judgment, these performance measures were closely linked to
stockholder value creation and reinforced desired long-term strategies and
performance.
For a description of the peer groups used for comparison of ROE and TSR see
"Long-Term Incentive Plan - Awards in Last Fiscal Year."
The Corporation has completed the 1995-1997 performance cycle. The
Corporation's average ROA for the period met the minimum threshold level.
However, the Corporation's performance factors did not compare favorably enough
with those of the peer groups to support an award for the period. Accordingly,
no awards will be payable for the 1995-1997 cycle.
Under the 1991 SIP, applicable in 1997, stockStock Options. Stock options are granted atannually to officers. The options
have an
option exercise price not less thanequal to the fair market value of the Common Stock on
the date of grant. Accordingly, stock options have value only if the stock price
appreciates from the
date the options are granted. This design focuses
executives onThe options generally vest over four years of
service and expire ten years from the enhancementdate of stockholder value over the long term and
encourages equity ownership in the Corporation.
Guidelines for setting the size of stock optiongrant.
The target grants were set by the
Committee at the time the 1991 SIP was established,are based on the recommendation
of an independent consultant. The guideline for stock option grants is a percentage of base salary (rangingsalary. The target
percentage ranges from 10% to 85%)300%, based upon officer grades
(increasingincreasing as grade increases), resulting in a dollar target which is then
converted into the target numberlevel of shares by dividing the dollar target by the
Corporation's stock price on the date of grant.responsibility
increases. The size of individual annual
awards isindividual's award may be increased or decreased from the guideline leveltarget
amounts based on individual performance at the sole discretion of the Committee.
17
Committee,
after considering management's recommendations.
Long-Term Incentive Plan. The Long-Term Incentive Plan provides incentive
compensation if the Corporation achieves specified performance objectives over a
multi-year performance cycle. The LTIP is administered by the Committee recommended and thehas
no expiration date.
The Board of Directors approved a new stock
incentive plan whichhas amended the LTIP, and is described under "Approvalseeking approval of
certain of its material terms, so that certain awards made for the 2000-2002 and
subsequent cycles will meet tax deductibility requirements of Section
18
162(m) of the 1998 StockInternal Revenue Code. That proposal is discussed under "Proposal
to Approve Certain Material Terms of the Long-Term Incentive Plan" in this Proxy Statement. If approved by.
Compensation of the stockholders, the 1998 Stock
Incentive Plan would apply to option grants in 1998 and thereafter. Chief Executive Officer's Compensation
Base SalaryOfficer
In March, 1997,late February 2000, the Committee reviewed the 1999 performance of Mr.
Dods' performance for
1996.Dods and the Corporation. The Committee consideredmost important events of 1999 involved
implementation of the merger that corporate earnings had increased in 1996
underbrought First Hawaiian Bank and Bank of the
West into a single holding company. Under Mr. Dods' leadership, notwithstanding the continuing Hawaii economic
slowdown. The Committee also noted several outstanding achievements during the
year, including: successful expansion and geographical diversification into the
Pacific Northwest; the merger of Pioneer Federal Savings Bank into First
Hawaiian Bank; and other re-engineering and cost cutting initiatives. Based on
these factors, the Committee concluded that a merit increase in base salary was
warranted and accordingly set his salary at $860,000 effective March 1, 1997.
Mr. Dods' base salary included $57,000 paid as salary in lieu of board and
committee fees he received under prior policies. See Note 2 to Summary
Compensation Table.
Mr. Dods' salary will be reviewed by the Committee in March 1998. However,
in view of the economic conditions facing the Corporation
in Hawaii, Mr. Dods
has instituted further cost control initiatives. The program includes Mr. Dods'
request to the Committee that his base salary and the base salaries of the other
four executive officers listed in the Summary Compensation Table,its subsidiaries accomplished 1999 merger objectives as well as 52
other senior officers of the Corporation, be frozen at 1997 levels for the
balance of 1998.
Annual Incentives As stated above, IPKE payments for 1997 have not yet been
determined. The IPKE payment for Mr. Dods to be granted in 1998 for 1997
performance will be reflected in the proxy statement for the 1999 annual
meeting.planned, creating a
more profitable and geographically diversified western U.S. regional franchise.
As a result of this geographic diversification, 73% of BancWest's 1999 cash
earnings were from U.S. mainland markets, compared to less than 30% two years
previously. In addition, the Corporation reported record annual earnings and
earnings per share. The 1999 efficiency ratio, excluding amortization of
intangible assets, improved to 54.47%. In addition, the year 2000 conversion
effort, which began five years earlier, was completed successfully and below
budget. Based on the Committee's evaluation of these and other factors, without
any specific weighting, the Committee increased Mr. Dods' salary by 5%, from
$934,608 to $981,335, effective March 1, 2000, and also determined his 1999 IPKE
award would be $607,493.
In March 2000, the Committee granted Mr. Dods a stock option for 203,914
shares. That award represented 110% of the amount calculated under the 1998 SIP
guideline percentage applicable to Mr. Dods. The Committee awarded an amount
above the guideline percentage to reward Mr. Dods for corporate achievements in
1999, and to provide him with further incentives tied directly to performance of
the Corporation's and his performance for 1996,stock price.
In January 2001, the Committee awarded him $460,000 underreviewed the IPKE, which was paid in 1997.
Long-Term Incentives In March, 1997, Mr. Dods received options to purchase
80,000 shares pursuant to the 1991 SIP, as set forth in the Summary Compensation
Table under the section "Option Grants in Last Fiscal Year." This award was
based upon the 1991 SIP's guideline percentage2000 performance of base salary. The number of
shares awarded was then substantially increased over the target amount for Mr. Dods and
approximately 15 other senior officersthe Corporation for purposes of evaluating Mr. Dods' compensation. The Committee
considered a series of quantitative and qualitative factors pertaining to
corporate performance. The Corporation reported record earnings for the year.
Its operating earnings, excluding nonrecurring items, were up 18% over 1999. The
balance sheet also showed significant growth. At December 31, 2000, total assets
increased 10.6%, loans and leases increased 11.6%, deposits increased 9.7% and
stockholders' equity increased 8.0% over amounts at the close of 1999. The
Corporation's efficiency ratio continued to improve in 2000, and at year-end
reached 51.53%, excluding amortization of intangibles. During the year, the
Corporation continued its strong emphasis on credit quality, completed
consolidation of data processing operations into a single facility in Honolulu
managed by a national information management service provider, and executed
agreements to acquire 30 branches in New Mexico and Nevada. Also, in September
2000, First Hawaiian Bank became the largest domestic depository bank in Hawaii,
as measured by individual, partnership and corporate deposits reported by the
FDIC. In view of the Corporation. This
increase was based not only upon individualextremely strong performance but also to make a
larger portiondemonstrated by these and
other factors, without giving those factors any specific weighting, and after
taking account of totalthe other elements of Mr. Dods' 2000 compensation, "at risk" and conditioned upon enhancement
of future stockholder value.
Based on the
Corporation's financial performance for the 1993-1995 and 1994-
1996 performance cycles, no LTIP payouts were made toCommittee determined Mr. Dods in 1996 and 1997.
As discussed above, Mr. Dods will notwould receive an LTIP payout in 1998IPKE award of $637,868 for the
1995-1997 performance cycle because the corporate performance factors were not
met.2000.
This award represented 65% of Mr. Dods' year-end salary.
Policy with Respect to the $1 Million$1,000,000 Deduction Limit
Section 162(m) of the Internal Revenue Code limitsgenerally prevents the deductibilitydeduction
of compensation in excess of $1,000,000 paid in any year to certainan individual who on
the last day of the taxable year is the Corporation's Chief Executive Officer or
is among its four other most highly compensated executive officers, unless
certaindetermined
in accordance with proxy disclosure rules. The $1,000,000 deductibility limit
does not apply to compensation that meets Section 162(m) requirements are met. The Corporation's pay philosophy is performance
focusedfor
qualified performance-based compensation, including requirements that
compensation be paid due to attainment of pre-established objective measures
that have been approved by stockholders and the Committee believes in retainingthat preclude discretion to increase
the resulting amounts. Stockholder approval must generally be obtained every
five years, and must be obtained earlier if the material terms of the
performance-based arrangement are modified. The 1998 Stock Incentive Plan is
structured so that stock options can qualify as well
as decrease incentivedeductible performance-based
compensation under Section 162(m). In 2000, the Committee adopted and
stockholders approved an IPKE award policy for certain executives to enable IPKE
awards based onto those executives to satisfy Section 162(m) deductibility
19
requirements for 2000 and subsequent plan years. In 2000, the Committee's assessmentBoard also amended
the LTIP, and if at the 2001 annual meeting stockholders approve its "material
terms" (as discussed under "Proposal to Approve Certain Material Terms of individual
performance and other relevant factors. The Committee will continue to review
its compensation programsthe
Long-Term Incentive Plan"), LTIP awards should satisfy Section 162(m)
deductibility requirements for the executive officers subject2000-2002 and subsequent cycles. However,
because the Committee seeks to maintain flexibility in accomplishing the
deductibility limit while preserving its focus on performance-driven
compensation.Corporation's compensation goals, it has not adopted a policy that all
compensation must be fully deductible.
Executive Compensation Committee
Fujio Matsuda, Chairman
John C. CouchDr. Julia Ann Frohlich
Robert A. Fuhrman
David M. Haig
Richard T. Mamiya
Roderick F. McPhee
18
Pierre Mariani
Stockholder Return Performance Graph
The attached Comparison of Five-Year Cumulative Total Stockholder Returnfollowing performance graph showscompares the cumulative total stockholder return
(stock price appreciation and reinvestment of dividends) on the Common Stock
during the last five years as compared to the S&PStandard & Poor's Major Regional Bank Index
and the broader S&PStandard & Poor's 500 Stock Index.
Comparison of Five-Year
Cumulative Total Stockholder Return*
- -----------------------------------------------------------------------------
Among First Hawaiian, Inc. Common Stock, S&P 500 Index and S&P Major Regional
Bank Index (companies appear in published industry index).
[GRAPH APPEARS HERE]
*Total return assumes reinvestment of dividends and $100 invested on December
31, 1992 in the First Hawaiian, Inc. Common Stock, S&P 500 Index and S&P
Major Regional Bank Index.
19------------------------------------
[graph]
- -------------------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
BancWest Corporation Common Stock
100 121 143 178 149 208
S&P 500 Index
100 123 164 211 255 232
S&P Major Regional Bank Index
100 137 205 227 195 249
* Total return assumes reinvestment of dividends and $100 invested on December
31, 1995 in BancWest Corporation Common Stock, the S&P 500 Index and the S&P
Major Regional Bank Index
---------------------------------------------------------------------------------------------------------------------
20
Certain Transactions
The total amountIn the ordinary course of business, the Corporation's bank subsidiaries
have made loans outstanding to the Corporation's directors and executive officers, to
members of the Corporation from the Bank aggregated $3,979,844, at December 31, 1997. Thesetheir families, and to entities related to such persons. Those loans
were made in the ordinary course of business, on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and did not involve more than normal
risks of collectibility or present other unfavorable features.
The following schedule shows detailedtable provides information on loans made byfrom the Corporation to
those Directors (including nominees)its directors and executive officers of
the Corporation whose aggregate indebtedness exceededthat had balances exceeding $60,000 at any
time during 1997. All loans are2000. Each such loan is secured by a real estate mortgages or are consumer credit
lines:
Aggregate
Largest Indebtedness Interest
Aggregate Outstanding Rate
Indebtedness December 31, Per
Name and Title in 1997 1997 Annum
- ----------------------- ------------ ------------ -------------
John W. A. Buyers $ 942,867 $ 929,829 5.000%-8.875%
Director
John C. Couch $1,832,182 $1,579,061 5.000%-8.375%
Director
Walter A. Dods, Jr. $ 500,000 0 7.625%-9.600%
Chairman,
Chiefproperty mortgage.
Aggregate
Largest Indebtedness Interest
Aggregate Outstanding Rate
Indebtedness December 31, Per
Name and Title in 2000 2000 Annum
- --------------------------------------------------------------------------
Howard H. Karr* $189,686 $187,192 7.125%-8.125%
Executive Vice President
and Chief Financial Officer
Bert T. Kobayashi, Jr. $710,588 $672,779 5.0%-8.0%
Director
Fujio Matsuda $280,290 $273,694 5.0%-8.75%
Director
John K. Tsui $429,409 $423,276 7.375%-8.25%
Vice Chairman, Chief Credit
Officer
and Director
David M. Haig $1,408,658 $ 965,639 8.125%-8.750%
Director
John A. Hoag $ 100,000 0 9.570%
Director
Donald G. Horner $ 374,129 $ 321,969 5.000%-9.600%
Executive Vice President
Howard H. Karr $ 196,289 $ 194,297 7.250%
Executive Vice President
and Treasurer
Bert T. Kobayashi, Jr. $ 792,824 $ 770,347 5.000%-8.000%
Director
Richard T. Mamiya $ 444,444 $ 435,710 8.625%
Director
Fujio Matsuda $ 326,919 $ 292,974 5.000%-8.375%
Director
Roderick F. McPhee $ 276,248 $ 272,068 8.375%
Director
John K. Tsui $ 445,260 $ 440,512 7.750%
President and Director
The*Cosigner of mortgage loan to an adult son.
First Hawaiian Bank leases a parcel of land, on which a branch of the Bankbank
is located, from the Estate of S.M. Damon pursuant to a lease commencing July 1,
1967. This lease is for a term of 50 years, requiring the payment of a fixed
annual rent of $156,800 annually from July 1, 1997 to June 30, 2002.2002 and $179,200
annually from July 1, 2002 to June 30, 2007. Rents thereafter are to be fixed
for each of two succeeding 10-year periodsthe next ten-year period by agreement or, failing agreement, by appraisal.
Messrs. Haig, Weyand, Ganley and Dods are Directorsdirectors of the Corporation and
the Bank and Trusteestrustees of the Estate. Management of the Corporation believes that this
transaction is as favorable to the Corporation and theFirst Hawaiian Bank as that
which would have been obtainable in transactions with persons or companies not
affiliated with the Corporation or theFirst Hawaiian Bank.
20
TheFirst Hawaiian Bank leases 6,074 square feet of office space to the Estate
of S.M. Damon in the downtown Honolulu headquarters building of the Bank.bank. The
Estate leasedpays rent for the space inat the same rate as would be paid by unrelated
parties for the same space. The rent is a prior headquarters building at $2.00minimum of $3.12 per square foot per
month for
the period ending April 30, 1997. In consideration($227,410 per annum), plus common area maintenance expenses, until
December 7, 2002. Rents thereafter are to be fixed by agreement or, failing
agreement, by appraisal. The lease will expire in December 2007.
Bank of the EstateWest leases approximately 48,382 square feet of office space in
San Francisco, California under a commercial office lease (the "Master Lease")
commencing November 1, 1993 and expiring October 31, 2003. Bank of the West has
subleased approximately 22,485 square feet of this space to BNP Paribas, or
approximately 46.5% of the leased premises (the "Subtenant's Percentage Share").
The sublease term is the same as the Master Lease, and BNP Paribas pays pro-rata
rent and certain expenses directly to the landlord under the Master Lease. BNP
Paribas' share of rent and expenses is based primarily on the Subtenant's
Percentage Share. The subleased premises were leased "as is," and BNP Paribas
must look solely to the landlord under the Master Lease for all services and
benefits provided by the Master Lease landlord applicable to the subleased
space. Bank of the West indemnifies BNP Paribas against losses incurred by BNP
Paribas as a result of any breach by Bank of the West of its obligations as
tenant under the Master Lease, except those assumed by BNP Paribas.
Bank of the West and First Hawaiian Bank participate in various
transactions with BNP and its affiliates. These transactions are subject to
review by the Federal Deposit Insurance Corporation (the "FDIC") and other
tenants of the old headquarters building agreeingregulatory authorities and are required to temporarily relocate their
offices to allow for construction of the present building, the Bank offered the
Estate and 3 other unrelated tenants comparable space in the new buildingbe on terms at the
same aggregate rent as previously applied in the old building. Management of the
Corporation believes that, while the rent charged to the Estate and the other
tenants may not be market rate rents for the new building, the arrangements made
for the Estate described above areleast as favorable to
each bank as those prevailing at the Corporationtime for similar non-affiliate
transactions.
21
During 1999, Bank of the West issued to BNP a $50,000,000, 7.35% Subordinated
Capital Note due June 24, 2009. The maximum principal amount of that note
outstanding in 2000, and the outstanding principal balance at December 31, 2000,
was $50,000,000.
Bank as those that would have been obtainableof the West holds deposits and purchases federal funds from BNP Paribas.
The deposits generally are for terms up to six months. Federal funds purchases
are generally for one to four days. The maximum daily amount owed by Bank of
the West to BNP Paribas in a similar transaction2000 in connection with persons
or companies not affiliated withsuch deposits and federal
funds purchases was $517,500,000, and the Corporation or the Bank.balance outstanding on December 31,
2000 was $517,000,000.
Mr. Kobayashi is a director of the Corporation and theFirst Hawaiian Bank, and
his law corporation is a partner ofin the law firm of Kobayashi, Sugita & Goda.
In 19972000, the Corporation and its subsidiaries paid legal fees to Kobayashi,
Sugita & Goda in the amount of $____________.
APPROVAL OF$1,386,288. Of this amount, $420,466 is
reimbursable by bank customers. Kobayashi, Sugita & Goda leases from First
Hawaiian Bank 26,788 square feet of office space in the headquarters building.
Rent paid in 2000 was $989,715 plus operating expenses and will increase
periodically through the lease's final year, 2006.
Mr. Peck is a director of the Corporation and Bank of the West and a Senior
Partner of Pillsbury Winthrop LLP, which provides legal services to the
Corporation and its subsidiaries.
PROPOSAL TO INCREASE AUTHORIZED STOCK
The Board of Directors believes it is in BancWest's best interests to
increase the number of shares of Common Stock and Class A Common Stock that the
Corporation is authorized to issue. Accordingly, the Board of Directors
proposes that the Certificate of Incorporation be amended to double the
authorized amount of Common Stock (from 200,000,000 to 400,000,000 shares) and
double the authorized amount of Class A Common Stock (from 75,000,000 to
150,000,000 shares). This proposal would not change the amount of the Preferred
Stock currently authorized.
As of January 31, 2001, there were 128,955,050 shares of authorized and
unissued Common Stock, and 18,925,126 shares of authorized and unissued Class A
Common Stock. There were 2,484,001 shares of Common Stock and no shares of
Class A Common Stock held in treasury. Because the Class A Common Stock is
convertible into Common Stock under certain circumstances, the Corporation's
Certificate of Incorporation requires that it reserve from authorized but
unissued shares or treasury shares a number of shares of Common Stock equal to
the number of outstanding shares of Class A Common Stock. Additional shares are
reserved for employee options. At January 31, 2001, there were approximately
70,686,000 shares of authorized but unissued and unreserved Common Stock
available for future issuance.
The existing levels of authorized stock were established in the November 1998
merger that created BancWest. In December 1999, BancWest completed a 2-for-1
stock split. Doubling the authorized shares of Common Stock and Class A Common
Stock will restore the ratio of outstanding to authorized shares to
approximately the ratio that existed before the 1999 split, thereby maintaining
the same relative degree of flexibility to meet the Corporation's future stock
needs.
Although it has no present plans to implement further stock splits, the Board
believes that increasing the authorized shares will provide the Corporation with
additional flexibility to accomplish future stock splits, without having to
incur the expense of a special stockholder meeting or wait until the next annual
meeting. Stock splits can be used to maintain the market price of the Common
Stock in a range that may be more attractive to investors, particularly
individuals, and may result in a broader market for the Common Stock. At
present, the levels of authorized Common Stock and Class A Common Stock are
insufficient to accomplish a 2-for-1 stock split, and the amount of authorized
but unissued Class A Common Stock is insufficient for a 3-for-2 stock split.
The Board also believes that increasing the number of authorized shares is
desirable to maintain the Corporation's flexibility in negotiating acquisitions.
BancWest utilized Common Stock to accomplish a tax-free merger of SierraWest
Bancorp in 1999, and in the future may acquire additional companies or assets
using stock as consideration. The Board believes that increasing the number of
authorized shares will also help maintain the Corporation's flexibility in
completing other corporate actions, such as accomplishing equity offerings to
raise capital.
In general, if the Board decides to issue any of the additional shares that
will be authorized by this proposal, no further stockholder action will be
required to complete that issuance, unless that approval is required by
applicable law, regulatory authorities, policies of the New York Stock Exchange
or any other stock exchange on which BancWest shares are then listed or specific
provisions of the Certificate of Incorporation. For example, the Certificate of
Incorporation requires the approval of either two-thirds of the authorized
directors of the Corporation, or the affirmative consent or vote of the holders
of a majority of the outstanding shares of Common Stock and Class A Common Stock
voting together, in order to issue any voting securities to any person that will
represent voting power in
22
excess of 20% of the aggregate voting power of all voting securities outstanding
as of the date of such issuance, or 35% of the aggregate voting power of the
average number of voting securities outstanding over the previous 12 months. In
addition, the Certificate of Incorporation precludes the Board of Directors from
issuing any Class A Common Stock except in accordance with terms of the
Certificate of Incorporation or the Standstill and Governance Agreement between
the Corporation and BNP. Holders of the Corporation's shares do not have
preemptive rights.
The Corporation does not, as of the date of this proxy statement, have any
current plans, agreements or understandings involving stock issuances. The
Board has not proposed the increase in the authorized number of shares with the
intention of using additional shares for anti-takeover purposes, although the
Board could, subject to its fiduciary duties to stockholders, theoretically use
additional shares in ways that have the effect of discouraging or impeding an
attempt to acquire control of the Corporation.
To accomplish the proposed increase, the Board of Directors has recommended
that stockholders amend the first sentence of Article Fourth of the Certificate
of Incorporation so that it reads as follows:
Fourth. The total number of shares of stock which the corporation
------
shall have authority to issue is Six Hundred Million (600,000,000) shares
having a par value of One Dollar ($1.00) per share, divided into three
classes: Four Hundred Million (400,000,000) shares designated as Common
Stock (the "Common Stock"); One Hundred Fifty Million (150,000,000)
shares designated as Class A Common Stock (the "Class A Common Stock");
and Fifty Million (50,000,000) shares designated as Preferred Stock (the
"Preferred Stock").
The Board has unanimously adopted resolutions setting forth the proposed
amendment to the Certificate of Incorporation, declaring its advisability and
directing that the proposed amendment be submitted to the stockholders for their
approval at the annual meeting. If approved by the stockholders, the amendment
will become effective on filing of an appropriate certificate with the Secretary
of State of the State of Delaware.
This proposal requires the approval of holders of Common Stock and Class A
Common Stock representing:
. a majority of all outstanding shares voting together as a single
class, and
. a majority of the outstanding shares of the Common Stock and of the
Class A Common Stock, each voting as a separate class.
The Board of Directors recommends a vote FOR approval of the increase in
authorized stock.
PROPOSAL TO INCREASE SHARES AVAILABLE FOR THE 1998 STOCK INCENTIVE PLAN
AtThe Board of Directors has adopted an amendment to the Annual Meeting held on March 19, 1992,1998 Stock Incentive
Plan (the "1998 SIP") to replenish the pool of Common Stock available for grants
under that plan. If approved by stockholders, approvedthat amendment will increase the
adoptiontotal number of shares that may be granted under the 1991 SIP.1998 SIP from 4,000,000 to
8,000,000 shares.
The 19911998 SIP provided for the granting of incentiveis an omnibus stock options, nonqualified stock options, reload stock options, and restricted
stock.
The 1991 SIP was adoptedplan intended to support the achievement of
the Corporation'sBancWest's business objectives by providing incentives linking key employees' interests to
stockholder interests through equity-based awards. These awards are key aspectsWhen approved by
stockholders at the 1998 annual meeting, the 1998 SIP authorized issuance of
2,000,000 shares. That amount was increased to 4,000,000 shares in December
1999 due to a 2-for-1 stock split and the adjustment provisions in Section 3.3
of the Corporation's compensation programs, which are designedplan. Plan awards (adjusted for the stock split) totaled 1,330,761
shares in 2000, 929,804 shares in 1999 and 1,608,390 shares in 1998. As of
January 31, 2001, there were 162,628 shares available for grants under the 1998
SIP (in addition to attract,
retain, and motivate173,006 shares available under the best possible employees to accomplish the Corporation's
business objectives.
Management1991 SIP).
The Board of Directors continues to believe that it is in the Corporation's best interest
to utilizeBancWest's interests are
furthered by using equity-based awards as an integral part of its compensation
programs. TheAccordingly, the Board of Directors considersrecommends that stockholders approve the
above-outlined purposes for these programs
toproposed increase, which will be key contributors to the Corporation's on-going success.
The First Hawaiian, Inc. 1998 Stock Incentive Plan (the "1998 SIP")
represents a continuationeffectuated by amending Section 3.1(a) of the 1991 SIP, of which only 76,979 shares of Common
Stock remain available for award. For the most part, the
1998 SIP retainsto read:
(a) Subject to adjustment as provided in Section 3.3, the 1991 SIP provisions and practices. Revisions have been made to create an
"omnibus" plan that authorizes any form of equity-based awards similar to plans
adopted by other corporations (see "Award Forms" below) and to reflect changes
in tax laws.
With regard to the tax laws, the Omnibus Budget Reconciliation Act of 1993
added Section 162(m) to the Internal Revenue Code (the "Code"). Section 162(m)
limits the deductibility of compensation that the Corporation pays to each of
the Chief Executive Officer and the four highest paid executives of the
Corporation to $1,000,000 unless certain requirements are met. For compensation
over $1,000,000 paid to any of these executives to be deductible, it must be (i)
performance related; (ii) administered by outside, independent directors; and
(iii) paid pursuant to stockholder approved plans. The Section 162(m)
regulations specify atotal number
of other items that mustShares available for grant under the Plan shall not exceed
8,000,000, which Shares shall be satisfied to comply
fully with these criteria.
The Corporation intends to structure awards underreacquired or treasury shares.
Summary of the 1998 SIP
so that
compensation resulting therefrom would be deductible performance-based
compensation. Accordingly,Set forth below is a summary of the Corporation is seeking approvalmaterial features of the 1998 SIP.
Plan ProvisionsStockholders should refer to the full text of the 1998 SIP for its complete
terms and conditions. A copy of the 1998 SIP is included in this Proxy Statement as Appendix A andcan be obtained by writing the
following description is qualified in its entirety by reference toCorporate Secretary, BancWest Corporation, P.O. Box 3200, Honolulu, Hawaii 96847
(E-mail: csdbarbv@fhwn.com).
23
Purpose
The purpose of the 1998 SIP.
Plan Administration.SIP is to promote the success and enhance the value
of the Corporation by linking the personal interests of eligible employees to
those of stockholders, and by providing eligible employees with an incentive for
outstanding performance. The 1998 SIP willis intended to provide flexibility to the
Corporation and enhance its ability to motivate, attract and retain the services
of employees upon whose judgment, interest and special effort its successful
operation is largely dependent.
Plan Administration
The 1998 SIP must be administered by a Committee composed of at least two
members of the Board of Directors. The Board intends
thatexpects the Committee willto be
composed entirely of non-employeeoutside directors who meet
the criteria of "outside director"as described under Section 162(m) of the
Code and "non-
employee director" under Section 16 of the Securities Exchange Act of 1934 (the
"Exchange Act"). Initially, theInternal Revenue Code. The Executive Compensation Committee will servecurrently serves as
the Committee.
Eligibility
To be eligible to participate in the 1998 SIP, an individual must be an
officer or employee of the Corporation or a subsidiary who, by the nature and
scope of his or her position, influences the success of the Corporation. Non-
employee directors are not eligible to participate in the 1998 SIP. The
Committee will selectselects the officers and key employees who will receive awards, the form of
those awards, the number of shares or dollar targets of the awards, and all
terms and conditions of the awards. Currently,
21
approximately 229In 2000, 382 officers and key employees
are eligible to receive awards
under the 1998 SIP. It is anticipated that approximately 175 to 200 officers and
key employees will receive awards in any calendar year.received awards.
Award Forms.Forms
The 1998 SIP authorizes the Committee to enter into any type of arrangement
with an eligible employee that, by its terms, involves or might involve the
issuance of Common Stock or any other security or benefit with a value derived
from the value of Common Stock. Awards are not restricted to any specified form
or structure and may include, without limitation, incentive stock options,
nonqualified stock options, reload stock options, restricted stock, limited
stock appreciation rights and performance shares. An award may consist of one
such security or benefit or two or more of them in connection with each other
("in tandem") or in the alternative. The terms of each award will beare established by
the Committee and set forth in the agreement evidencing the award.
The Board believes that this flexibility to design forms of awards will
assist in keeping the Corporation's compensation programs current with
competitive programs.
Maximum Stock Award Levels. TheLevels
If this proposal is approved, the maximum number of shares of Common Stock
available for award will be 2,000,0008,000,000 shares, all of which must be treasury or
reacquired shares. If awards are forfeited, terminate or lapse, the shares
subject to that award are available for further grants under the 1998 SIP. No
individual may receive options or awards during any calendar year, as a maximum amount, in any form allowed
under the 1998 SIP, which in the aggregate exceed 200,000400,000 shares of Common
Stock.
Stock Options. As in the 1991 SIP, stockOptions
Stock options awarded may either be incentive stock options ("ISOs") or nonqualified
stock options ("NSOs"). Options will expire no later thanThe Committee establishes the duration of each option
at the time it is granted. The maximum term for an ISO is ten years, and no ISO
may be granted under the plan after the date of grant and may not
be exercised prior to six months following the date of grant.January 21, 2008. The exercise price of
stock options may not be less than the Common Stock's fair market value (that
is, the average of the high and low sales prices for the Common Stock) on the
date of grant. (On January 31, 2001 that average was $26.92 per share.) The
Committee may establish other vesting or performance requirements, which must be met
prior to the exercise of the options. Options may be granted in tandem with stock
appreciation rights ("SARs") or other types of awards. The 1998 SIP provides
that ISOs are nontransferable other than by the laws of descent and
distribution. The Committee may, in its discretion, allow for the
transferability of any other form of NSO's.
The closing price of CommonNSOs.
Restricted Stock on the Nasdaq Stock Market on ____________,
1998 was $________.
Restricted Stock.
The Committee may also grant shares of restricted stock. These grants will beare
subject to the continued employment of the recipient and may also be subject to
performance criteria at the discretion of the Committee. If the recipient's
employment terminates prior to the completion of the specified employment or the
attainment of the specified performance goals, the awards will lapse and the
shares will return to the Corporation. The Committee may provide for a prorated
attainment of the performance criteria or a prorated attainment of time-based
restrictions. During the restriction period, the recipient would beis entitled to vote
the shares and receive dividends. Restricted stock certificates wouldare held in
escrow and may bear a legend giving notice of the restrictions relating to the
grant.
Performance Standards and Section 162(m)
Performance criteria for restricted stock or performance shares may relate to
the total Corporation, a subsidiary or any business unit and/or individual
performance. Performance targets may be set at a specific level or may be
expressed relative to measures at comparison companies or a defined index. The
Committee will establish specific targets for recipients. In general, Section
162(m) of the Internal Revenue Code prevents deductibility of compensation
24
in excess of $1,000,000 paid in any taxable year to an individual who on the
last day of that year is the Corporation's Chief Executive Officer or is among
its four other most highly compensated executive officers, except that a
deduction may be taken for compensation that qualifies as "performance-based
compensation" under Section 162(m). Options granted at fair market value
ordinarily satisfy the "performance-based" requirements of Section 162(m), if
shareholder disclosure and approval requirements are met. If restricted stock or
performance share awards are intended to satisfy Section 162(m) deductibility
requirements, payments under such awards must be conditioned on attainment of
pre-established objective performance measures that have been established and
certified by a committee of outside directors and approved by stockholders. The
performance criteria that have been approved for such purposes include:
earnings, revenue, operating or net cash flows, financial return ratios, total
stockholder return, and/or market share.
Reload Options.Options
The Committee may grant concurrently with the award of any option (the
"underlying option") a reload option that permits the optionee to purchase a
number of shares of Common Stock equal to the number of shares of Common Stock
delivered by the optionee to exercise the underlying option. Although the
underlying option may be an ISO, a reload option will be an NSO. The reload
option will have the same expiration date as the underlying option and an
exercise price equal to the fair market value of the shares on the date of the
exercise of the underlying option.
A reload option permits an optionee to retain the potential appreciation in
the number of already-owned shares that are used to exercise the underlying
option. Retention of such potential appreciation is accomplished by the grant
of the reload option in the number of shares used to pay the exercise of the
underlying option.
Stock Appreciation Rights.Rights
Stock appreciation rights ("SARs") may be granted in tandem with the grant of
an option. AnA SAR is exercisable only if the underlying option is exercisable.
Upon the exercise of ana SAR, the recipient is entitled to receive cash from the
Corporation in an amount equal to the excess of the fair market value of the
shares covered by the option over the exercise price of such shares. Upon
exercise of ana SAR, the tandem option automatically terminates. Conversely, upon
the exercise of an option, the tandem SAR automatically terminates.
Performance Standards. To avoid the deductibility limits of Section 162(m)
of the Code, the performance standards relating to awards underChange in Control Provisions
If a change in control occurs, unless otherwise prohibited by the 1998 SIP,
mustparticipants' outstanding awards will become immediately vested and exercisable,
any period of restriction or other restrictions on restricted stock will lapse,
and within ten business days after the change in control stock certificates
representing shares of restricted stock will be based upon objective performance measures.delivered to participants
without restrictions or legends. Also, the Committee may modify awards as it
deems appropriate prior to the effective date of the change in control. The
performance criteria
applicable to awards under"change in control" definition in the 1998 SIP may include oneincludes (among other things)
stockholder approval of BancWest's merger, consolidation or more ofreorganization with
another entity (unless the following:
22
earnings, revenue, operating or net cash flows, financial return ratios, total
stockholder return, or market share.
Performance criteria may relate totransaction would result in the total Corporation or any business
unit. Performance targets may be set at a specific level or may be expressed as
relative to the comparable measures at comparison companies or a defined index.
The Committee will establish specific targets for recipients.
Acceleration. An award granted under the 1998 SIP may include a provision
accelerating the receipt of benefits upon the occurrence of specified events,
such as a change of controlvoting stock of the
Corporation outstanding immediately before the transaction continuing to
represent at least 80% of the combined voting power of the stock outstanding
immediately after that event, unless the Board determines by majority vote that
no change in control will occur due to the merger, consolidation or
reorganization). The change in control definition also includes (among other
things) stockholder approval of a dissolution,plan of complete liquidation merger, reclassification,of the
Corporation, stockholder approval of an agreement for the sale or disposition of all or
substantially all of the property andCorporation's assets, a change during any period of two
consecutive calendar years of the Corporation,Corporation's directors such that the
individuals who at the beginning of that period constituted the Board (including
any new directors whose election by stockholders was approved by a vote of at
least two-thirds of the directors then in office who were directors at the
beginning of the period or other significant corporate transaction.
Payment.whose election or nomination for election was so
approved) cease for any reason to constitute a majority of the Board, or a Board
determination by majority vote that an event has or is about to occur that in
fairness to a participant is tantamount to a change in control.
Payment
An award may permit the recipient to pay all or part of the exercisepurchase price
offor the shares or other property issuable pursuant thereto,to the award, and/or to pay
all or part of such recipient's tax withholding obligation with respect to such
issuance, by (i) delivering previously-ownedpreviously owned shares of Common Stock (ii)or (for options)
through cashless exercise procedures. Article VII of the plan also gives the
Committee discretion to permit payment by reducing the amount of shares or other
property otherwise issuable pursuant to the award, or (iii) delivering a promissory
note, the terms and conditions of which will be determined by the Committee. If anAn
option award permits the
recipient to pay for the shares issuable pursuant thereto with previously-owned
shares,under Article VII may also permit "pyramiding", in which the
recipient would be able to exercise the option in successive transactions starting with a relatively small number of shares and,
by a series
of exercises using shares acquired from each such transaction to pay the purchase price of the
shares acquired in the following transaction, to exercise an option for a large
number of shares with no more investment than the original share or shares delivered.
Adjustments. The25
Adjustments
Section 3.3 of the plan provides that the number, class and price of stock optionshares
subject to outstanding awards
performance awards, and restricted stock are subject to appropriate adjustment in the event
of certain changes in the Common Stock including(including stock dividends,
recapitalization, mergers, consolidations, split-ups, combinations or exchanges
of shares and the like.like) in such manner as the Committee determines is
appropriate to prevent dilution or enlargement of rights.
Amendment or Termination
The Board may amend or terminate the 1998 SIP in its discretion. However,
any amendment that (i) increases the total number of shares of Common Stock that
may be issued under the 1998 SIP, (ii) materially increases the cost of the 1998
SIP or the benefits to participants, or (iii) changes plan provisions regarding
the exercise price will be subject to stockholder approval if such approval is
required by the Internal Revenue Code; Section 16 of the Securities Exchange Act
of 1934; any national securities exchange or system on which the Common Stock is
then listed, traded, or reported; or any regulatory body having jurisdiction
with respect thereto.
Federal Income Tax Consequences
The following is a brief description of the federal income tax treatment that
will generally applyapplies to awards issued under the 1998 SIP, based on federal income
tax laws in effect on the date hereof. The exact federal income tax treatment
of an award will depend on the specific nature of the award. Such an award may,
depending on the conditions applicable to the award, be taxable as an option,
restricted stock, a cash payment, or otherwise. Recipients of options or other
awards should not rely on this discussion for individual tax advice, as each
recipient's situation and tax consequences of any particular award will vary
depending upon the specific facts and circumstances involved. Each recipient is
advised to consult with his or her own tax advisor for particular federal, as
well as state and local, income and other tax advice. In general, the ability
of the Corporation to take any deduction described below with respect to certain
employees may be limited by Section 162(m), as described above.
Stock Option Awards. The granting of ISOsAwards
Granting an ISO or NSOsNSO does not result in immediate taxable income to the
optionee.
The exercise of an NSO will result in ordinary income to the optionee in the
amount by which the fair market pricevalue of the shares acquired exceeds the
exercise price. Income tax withholding may be met either through cash payment
at the time of exercise or through share withholding. The Corporation will
receive a tax deduction in an amount that corresponds to the optionee's ordinary
income.
The exercise of an ISO will not result in taxable income to the optionee if
the optionee does not dispose of the stock within two years of the date the
option was granted and one year after the option is exercised. (However, the
difference betweenexcess of the fair market value of the shares upon exercise andover the exercise
price is an item of tax preference subject to the possible application of the
alternative minimum tax.) If the exercise and disposition requirements are met,
any gain realized by the optionee when such shares are sold will be taxed as
capital gain. The Corporation will not receive a tax deduction for the
resulting gain. If these holding periods are not met, the option will be
treated generally as an NSO for tax purposes.
Restricted Stock Awards.Awards
The granting of an award of restricted stock does not result in taxable
income to the recipient unless the recipient elects to report the award as
taxable income under Section 83(b) of the Code. Absent such election, the value
of the award is considered taxable income once it is vested
and distributed.vested. Dividends are paid
concurrent with, and in an amount equal to, ordinary dividends and are taxable
as paid. If a Section 83(b) election is made, the recipient recognizes ordinary
income in the amount of the total value on the date of grant and the Corporation
receives a corresponding tax deduction. Any gain or loss 23
subsequently
experienced will be a capital gain or loss to the recipient and the Corporation
does not receive an additional tax deduction.
Performance Awards
The granting of a performance award does not result in taxable income to the
recipient. When the award is paid or distributed, the full value paid or
distributed will be considered as ordinary income to the recipient. The
Corporation will receive a corresponding tax deduction.
26
Reload Options.Options
The receipt of a reload option by the holder of an ISO or NSO should not (i)
affect the tax treatment of the exercise of such ISO or NSO or (ii) result in
the recognition of income. A reload option will constitute an NSO for federal
income tax purposes and will be taxed as such in the manner described above.
Stock Appreciation Rights.Rights
The granting of ana SAR does not result in taxable income to the recipient.
When the SAR is exercised, the gain will be considered as ordinary income to the
recipient. The Corporation will receive a corresponding tax deduction.
Performance Awards. The granting of a performance award does not result in
taxable income to the recipient. When the award is paid or distributed, the full
value paid or distributed will be considered as ordinary income to the
recipient. The Corporation will receive a corresponding tax deduction.
Other Forms of Awards.Awards
Awards may be granted under the 1998 SIP that do not fall clearly into the
categories described above. The federal income tax treatment of such awards
will depend upon the specific terms of such awards. Generally, the Corporation
will obtain an income tax deduction equal to the ordinary income recognized by
the recipient of the award and will be required to make arrangements for
withholding applicable taxes with respect to any ordinary income recognized by a
recipient.
TermFuture Awards
The Corporation cannot presently determine the amount and Amendmentnature of 1998 SIP
The 1998 SIP, if approved by stockholders,awards
that will be effective as of February
19, 1998. It will expire on February 18, 2008 unless suspended or discontinued
by action ofissued from the Board of Directors. The Board may amend the 1998 SIP as
appropriate. Any amendment that (i) increases the total number of shares of
Common Stock that may be issued under the 1998 SIP, (ii) materially increases
the cost of the 1998 SIP or the benefits to participants, or (iii) changes plan
provisions regarding the exercise price will be subject to stockholder approvaladditional stock made available for grants if such approvalthis
proposal is required by federal or state law or regulation or by any
national securities exchange or system on which shares are then listed, traded,
or reported.approved.
Recommendation
The Board of Directors recommends a vote FOR approval of the proposal to
increase the number of shares available for grants under the 1998 SIP.
PROPOSAL TO APPROVE CERTAIN MATERIAL TERMS OF THE LONG-TERM INCENTIVE PLAN
The Corporation maintains the Long-Term Incentive Plan (the "LTIP") to
provide incentive compensation to a limited group of key executives if the
Corporation meets specified performance levels over multi-year performance
cycles. The Board of Directors proposes that stockholders approve certain
"material terms" of the LTIP designated by Section 162(m) of the Internal
Revenue Code and related regulations ("Section 162(m)"), so that certain awards
made under the LTIP will be deductible by the Corporation.
Section 162(m) generally precludes deduction of compensation in excess of $1
million paid in any year to an individual who on the last day of the taxable
year is the Corporation's Chief Executive Officer or is among its four other
most highly compensated executive officers, determined in accordance with proxy
disclosure rules. However, compensation that qualifies as "performance-based
compensation" under Section 162(m) is deductible. On March 16, 2000, the Board
of Directors amended the LTIP so that plan awards may qualify as performance-
based compensation. The material terms of LTIP awards must also be approved by
stockholders to satisfy Section 162(m) deductibility requirements. Set forth
below is a summary of the LTIP, as amended, as well as a description of those
matters that are treated as material terms by Section 162(m) and as to which
stockholder approval is sought.
Summary of the LTIP
The following brief description of the principal features of the LTIP, as
amended, applies to awards granted under the plan for performance periods
commencing on or after January 1, 2000.
Administration and Eligibility
The LTIP is administered by the Executive Compensation Committee (the
"Committee"). In accordance with Section 162(m), the Committee is comprised
solely of outside directors. Key employees of the Corporation and its
subsidiaries are eligible to participate in the plan. "Key employees" are
officers and other employees who regularly and directly make or influence policy
decisions that impact the overall long-term results or success of the
Corporation. The Committee determines whether an individual is a key employee
and also selects those key employees who will be given awards under the LTIP.
Performance Periods
Performance periods are established by the Committee and must exceed six
months in length.
Grant of Awards
For each performance period, the Committee determines in its discretion a
target award for each participant. That award is expressed as a percentage of
the participant's average annual base salary during the performance period.
Average annual base salary is computed by averaging annualized base salary in
effect on the last calendar day of each year of the performance period following
determination of the participant's target award.
27
Performance Goals
For each performance period, the Committee establishes in writing one or more
objective performance goals that will modify the target awards to determine the
amounts that become payable to participants. The performance goals must state,
in terms of an objective formula or standard, the method for computing the
amount of compensation payable to each participant upon attainment of the
specified goals. The formula or standard must also specify the individual
employees or the class of employees to which it applies. The Committee does not
have any discretion under the objective formula or standard to increase the
amount of compensation that would otherwise be due upon attainment of any
performance goal. However, the Committee does have discretion prior to payment
of any award to reduce the amount of the award derived from the formula or
standard. In the case of awards intended to satisfy the deductibility
requirements of Section 162(m), the performance goals must be established within
the first 90 days of the performance period (or any shorter period required by
applicable regulations).
The Committee may establish different performance goals for each performance
period. Those goals are described below under "Approval of Certain Material
Terms".
Payments
After the applicable performance period has ended, the Committee determines
the extent to which the performance goals were met. If the performance goals
are not attained, no award payments are made. If the minimum performance goals
are met or exceeded, the Committee certifies that the performance goals and any
other material terms were satisfied, and determines the amount of award
payments. The Corporation pays earned awards in a cash lump sum as soon as
possible after the Committee determines their amount. The maximum payout to any
participant with respect to an award for any performance period is $3,000,000.
Termination of Employment During Performance Period
If a participant terminates employment during a performance period due to
death, disability, or retirement (as defined in the Employees' Retirement Plan
of BancWest Corporation), the participant (or his/her designated beneficiary in
the case of death) will receive a prorated payout of the participant's award, if
any, for the performance period. The Committee will, in its sole discretion,
determine the amount, if any, to be so paid. If a participant terminates
employment during a performance period for any other reason, he/she will
normally forfeit his/her right to any award. However, the Committee may, in its
sole discretion, determine to vest all or a portion of the participant's award.
Change in Control
Upon a change in control of the Corporation, the maximum target value
attainable for all awards that have been outstanding six or more months will
automatically be deemed fully earned. The LTIP change-in-control definition
corresponds to that in the 1998 Stock Incentive Plan, discussed above.
Nontransferability
LTIP awards may not be assigned or alienated in any manner.
Right to Amend
The Corporation may amend or terminate the LTIP, in whole or in part, at any
time. Such amendment or termination may not adversely affect any award
previously granted under the plan without the written consent of the participant
holding such award.
The foregoing summary of the terms and features of the LTIP is qualified by
reference to the LTIP itself, including amendments. A copy of the LTIP, as
amended, may be obtained by written request to the Corporate Secretary's office
at the address shown on page 23.
Approval of Certain Material Terms
Section 162(m) requires, as a condition to deductibility of performance-based
compensation exceeding $1,000,000 to certain executives, that the material terms
of the performance goals be disclosed to and approved by stockholders before the
compensation is paid. Those material terms include the employees eligible, the
business criteria on which the performance goals are based, and the maximum
amount of compensation that could be paid to any employee if the goal is
attained. Accordingly, the Corporation is seeking stockholder approval of the
following material terms for awards granted for LTIP performance periods
commencing on and after January 1, 2000:
. Employees Eligible:
The class of employees eligible to participate in the LTIP are those
key employees of the Corporation or its subsidiaries selected by the
Committee.
. Business Criteria:
28
LTIP performance goals may be based on one or more of the following: net
income, net income before taxes, operating earnings, cash earnings,
operating cash earnings, financial return ratios (including return on
average total assets, return on tangible total assets, return on average
stockholders' equity, return on average tangible stockholders' equity,
average stockholders' equity to average total assets, risk-adjusted return
on capital, economic value added, efficiency ratio, expense ratio, revenue
growth, noninterest income to total revenue ratio, and net interest
margin), total stockholder return, earnings per share, cash earnings per
share, diluted earnings per share, diluted cash earnings per share, and
stock price.
The performance goals may be measured (i) solely on a corporate,
subsidiary, or business unit basis or a combination thereof and/or (ii) on
actual or targeted growth factors. Performance goals may reflect absolute
entity performance or a relative comparison of entity performance to the
performance of a peer group of entities or other external measure of the
selected performance goals. The formula for any award may include or
exclude items that measure specific objectives, such as the cumulative
effect of changes in generally accepted accounting principles, losses
resulting from discontinued operations, securities gains and losses,
restructuring, merger-related and other nonrecurring costs, amortization
of goodwill and intangible assets, extraordinary gains or losses, and any
unusual, nonrecurring gain or loss that is separately quantified in the
Corporation's financial statements. In addition, any performance measure
expressed on a per-share basis will, in case of a recapitalization, stock
dividend, stock split or reverse stock split affecting the number of
outstanding shares, be mathematically adjusted so that the change in
outstanding shares does not cause a substantive change in the relevant
goal.
. Maximum Payout:
The maximum payout to any LTIP participant with respect to an award for
any performance period is $3,000,000.
LTIP Awards in Last Fiscal Year
The Committee used the criteria described above to set target awards and
other parameters for the 2000-2002 performance period. In March 2000, the
Committee approved participation of 112 employees for that LTIP cycle, and
established target awards that ranged from 10% to 50% of participants' average
annual base salary for the performance period. The Committee also determined
that no payouts will be made unless the Corporation achieves a minimum threshold
of diluted earnings per share of $2.03 for the year ended December 31, 2002.
If that threshold is met, awards for the 2000-2002 performance period will be
based on two measures of corporate performance. Those measures are relative
average total stockholder return versus the S&P Mid-Cap Bank Index ("TSR"), and
the annual compounded growth rate in diluted earnings per share ("ACGR"). Total
stockholder return is stock price appreciation plus reinvestment of dividends
divided by the beginning stock price, and diluted earnings per share is
determined exclusive of restructuring and extraordinary nonrecurring items and
accounting changes, if any.
After the performance period is complete, if threshold requirements have been
met target awards will be multiplied by a corporate performance factor of 0% to
200%. The corporate performance factor will be established by applying the
Corporation's TSR and ACGR to a matrix that shows an array of percentages. One
axis of that matrix consists of TSR values ranging from the 40th percentile to
the 80th percentile, and the other axis consists of ACGR values of 8% to 12%.
No awards will be paid if the TSR is less than the 40th percentile or if the
ACGR is less than 8%. The maximum corporate performance factor of 200% will
apply if the TSR is at or above the 80th percentile and the ACGR equals or
exceeds 12%. A 100% corporate performance factor will apply if (among other
possible combinations) the TSR is at the 60th percentile and the ACGR is 10%.
The award methodology for 2000-2002 is similar to that used for prior
performance periods, but eliminates an individual performance multiplier that
formerly ranged from 0% to 140%. That change was made because awards cannot
qualify as performance-based compensation under Section 162(m) unless they
preclude discretion to increase the amount of compensation payable upon
achievement of objective performance goals. To maintain approximately
equivalent award opportunities after elimination of the individual performance
multiplier, the maximum corporate performance factor was increased from 140% to
200%. Although the Committee retains discretion to reduce awards that result
from application of the LTIP's objective criteria, it generally does not expect
to do so.
The following table reflects estimated LTIP payouts for the 2000-2002
performance period at threshold, target and maximum award levels to the named
executive officers, to all current executive officers as a group and to all
employees who are not executive officers. If this proposal is not approved by
stockholders, no payouts of the 2000-2001 LTIP awards described above will be
made to persons whose compensation is subject to Section 162(m) limitations in
the year of payment.
29
Number of Performance or Estimated Future Payouts
Shares, Other Period until under Non-Stock Price-Based Plans(2)
Units or Maturation ---------------------------------------------
Name Other Rights or Payout(1) Threshold Target Maximum
- --------------------------------------------------------------------------------------------------------------------------
Dods......................... None 12/31/2002 None $ 486,774 $ 973,548
McGrath...................... None 12/31/2002 None $ 311,676 $ 623,353
Tsui......................... None 12/31/2002 None $ 223,494 $ 446,989
Karr......................... None 12/31/2002 None $ 97,369 $ 194,738
Horner....................... None 12/31/2002 None $ 88,839 $ 177,678
Executive Group.............. None 12/31/2002 None $1,439,434 $2,878,869
Non-Executive Officer
Employee Group.............. None 12/31/2002 None $1,714,471 $3,428,942
Note (1) Performance period begins on January 1, 2000.
Note (2) Target and Maximum payout estimates correspond to corporate
performance factors of 100% and 200%, and are computed using salary
paid during 2000.
Recommendation
The Board of Directors recommends a vote FOR approval of the proposal to
approve certain material terms of the LTIP.
ELECTION OF AUDITOR
The Board of Directors, on recommendation of the Joint Audit Committee, recommends
the election of Coopers & Lybrand L.L.P.PricewaterhouseCoopers ("Coopers & Lybrand"PWC") as Auditorauditor of the Corporation to
serve for the ensuing year. Coopers & LybrandPWC has served the Corporation in the capacity of
independent Auditorsauditor since 1973. Proxies in the accompanying form will be votedFor information concerning fees billed by PWC
for the election of Coopers &
Lybrand unless a contrary specification is indicated therein, in which event
they will be voted as specified. Election2000, see "Report of the Auditor requires the
affirmative voteAudit Committee." The Board of a majority of the shares present or represented at the
meeting. Under the Corporation's Certificate of Incorporation and Bylaws,
abstentions and broker non-votes will not have the effect of votes in opposition
to the election of Coopers & Lybrand.
It is expected thatDirectors expects
representatives of Coopers & Lybrand willPWC to be present at the Annual Meeting and will be available to
respond to questions andappropriate questions. Such representatives may make a statement if
they choose.
If the proposal to elect PWC is not approved by the stockholders, or if prior
to the 2002 annual meeting PWC declines to act or otherwise becomes incapable of
acting, or if its employment is discontinued by the Board of Directors, then the
Board of Directors will appoint other independent accountants whose employment
for any period subsequent to the 2002 annual meeting will be subject to
ratification by the stockholders at that meeting.
The Board of Directors recommends a vote FOR the election of Coopers &
LybrandPWC as Auditor.auditor.
OTHER BUSINESS
At the date of this proxy statement, managementManagement does not know of any business to be presented at the Annual
Meeting other than the matters set forth above. If any other matters properly
come before the Annual Meeting, it is the intention of the persons named in the
accompanying form of proxy to vote in accordance with their judgment on such matters.
24
STOCKHOLDER PROPOSALS FOR 1999
Proposals of stockholders2002 ANNUAL MEETING
Stockholder proposals intended to be presented at and included in the 1999 Annual Meetingproxy
statement for the 2002 annual meeting of the CorporationCorporation's stockholders must be
received by the Corporate SecretaryCorporation no later than November 1, 2001. If the date of the
2002 annual meeting is more than 30 days before or after April 19, 2002,
however, the new deadline will be described in one of the Corporation's
quarterly reports on Form 10-Q. Under the Corporation's bylaws, a stockholder
proposal not intended to be included in the proxy material for the 2002 annual
meeting must be received by the Corporation on or priorno later than February 8, 2002. Any
such proposal must also comply with the other provisions contained in the
Corporation's bylaws relating to December 31, 1998.stockholder proposals.
BY ORDER OF THE BOARD OF DIRECTORS
FIRST HAWAIIAN, INC.
HerbertBANCWEST CORPORATION
William E. WolffAtwater
Senior Vice President, General
Counsel and Secretary
Dated: March 4,___, 2001
30
The Corporation's Annual Report on Form 10-K for the year ended December 31,
2000 has been mailed to stockholders with this proxy statement. Additional
copies of the Form 10-K (other than certain exhibits) will be provided to
stockholders upon written request without charge, and may be obtained by writing
Howard H. Karr, Executive Vice President and Chief Financial Officer, BancWest
Corporation, P.O. Box 3200, Honolulu, Hawaii 96847 (E-mail:
howard.karr@fhwn.com).
31
ANNEX A
-------
BANCWEST CORPORATION
AUDIT COMMITTEE CHARTER
I. PURPOSE
The Audit Committee shall, in the manner set forth in this Charter, assist
the Corporation's Board of Directors in fulfilling its financial oversight
responsibilities.
While the Audit Committee has the responsibilities and authority set forth
in this Charter, it is not the responsibility of the Audit Committee to
plan or conduct audits or to determine that the Corporation's financial
statements are complete and accurate and are in accordance with generally
accepted accounting principles. This is the responsibility of management
and the independent auditors. Nor is it the responsibility of the Audit
Committee to conduct investigations, to resolve disagreements, if any,
between management and the independent auditors or to assure compliance
with laws and regulations.
In carrying out its responsibilities, the Audit Committee's policies and
procedures shall remain flexible in order to best react to changing
conditions and environments.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors, as
determined by the Board of Directors. Audit Committee members shall have no
relationship with the Corporation that, in the business judgment of the
Board of Directors, may interfere with the exercise of their independence
from management and the Corporation. The members of the Audit Committee
shall also satisfy other applicable independence requirements under the
rules of the New York Stock Exchange. Each member of the Audit Committee
shall be financially literate (as the Board of Directors interprets such
requirement in its business judgment), or shall become financially literate
within a reasonable time after his or her appointment to the Audit
Committee. At least one member of the Audit Committee shall have accounting
or related financial management experience, as the Board of Directors
interprets such requirement in its business judgment.
The members of the Audit Committee shall be elected by the Board of
Directors at the annual meeting of the Board of Directors and shall serve
until their resignation or removal or until their successors have been duly
elected. Audit Committee members shall serve at the pleasure of the Board
of Directors.
III. MEETINGS
The Audit Committee shall meet at least four times annually, or more
frequently as circumstances dictate. To the extent deemed appropriate by
the Audit Committee, it shall periodically meet separately with management,
the internal auditors and/or the independent auditors to discuss any
matters that the Audit Committee or any of these groups believes should be
discussed privately.
IV. RESPONSIBILITIES AND AUTHORITY
The Audit Committee shall:
A. Review Procedures
-----------------
1. Review and reassess the adequacy of this Charter at least annually.
Submit the Charter to the Board of Directors for approval once every
three years or more frequently as circumstances dictate. Include the
Charter as an appendix to the Corporation's proxy statement at least
once every three years.
32
2. Review with financial management and the independent auditors the
Corporation's quarterly and annual financial statements included in
its Reports on Forms 10-Q and 10-K, respectively, prior to their
filing.
3. Review significant findings prepared by the independent auditors,
together with management's responses.
4. Discuss with the independent auditors any significant changes to the
Corporation's accounting principles and any items required to be
communicated by the independent auditors in accordance with Statement
of Auditing Standards No. 61 ("SAS 61"), "Communications with Audit
Committees."
B. Independent Auditors
--------------------
5. Review the independence and performance of the independent auditors
and annually recommend to the Board of Directors for stockholders'
approval the appointment of the independent auditors and, when
circumstances warrant, recommend that the Board of Directors replace
the independent auditors. The Audit Committee and the Board of
Directors have the ultimate authority and responsibility to select,
evaluate, and where appropriate replace the independent auditors.
The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors for such auditor's review of the
financial statements and controls of the Corporation.
6. Obtain from the independent auditors, on a periodic basis, a formal
written statement delineating all relationships between the
independent auditors and the Corporation consistent with Independence
Standards Board Standard 1 ("ISB No. 1").
7. Review and discuss, on an annual basis, with the independent auditors
all significant relationships that they have with the Corporation
that could impair their objectivity and independence as independent
auditors. Engage in a dialog with the independent auditors with
respect to any disclosed relationships or services that may impact
the objectivity and independence of the independent auditors, and
recommend that the Board of Directors take appropriate action in
response to the independent auditors' report of such relationships to
satisfy itself of the independent auditors' independence.
8. Review the independent auditors' audit plan - discuss scope,
staffing, locations, and reliance upon management and internal audit
personnel.
9. Approve the fees to be paid to the independent auditors.
C. Internal Auditors
-----------------
10. Review the internal audit function of the Corporation including the
proposed annual audit plan and schedule.
11. Review significant reports prepared by the internal auditors together
with management's responses and follow-up to these reports.
12. Review the appointment, replacement and performance of the senior
internal auditing executives.
D. Financial Reporting Process
---------------------------
13. Review the integrity of the Corporation's financial controls and
reporting processes, both internal and external, by consulting with
management, the independent auditors and internal auditors.
33
14. Consider and approve, if appropriate, major changes to the
Corporation's auditing and accounting principles and practices as
suggested by the independent auditors, management, or the internal
auditors.
15. Establish regular systems of reporting to the Audit Committee by each
of management, the independent auditors and the internal auditors
regarding any significant judgments made in management's preparation
of the financial statements and any significant difficulties
encountered during the course of the review or audit, including any
restrictions on the scope of work or access to required information.
16. Review any significant disagreement among management and the
independent auditors or the internal auditors in connection with the
preparation of the financial statements.
E. General
-------
17. Review with the Corporation's general counsel any legal matters that,
in the Audit Committee's business judgment, could have a significant
impact on the Corporation's financial statements.
18. To the extent deemed appropriate by the Audit Committee in the
exercise of its business judgment, investigate any matter brought to
the Audit Committee's attention within the scope of its
responsibilities, with the power to retain outside independent
counsel for this purpose.
19. Prepare an annual report to stockholders as required by the
Securities and Exchange Commission and include such report in the
Corporation's annual proxy statement. The report should delineate
that the Audit Committee has (1) reviewed and discussed the audited
financial statements with management; (2) discussed with the
independent auditors the matters required to be discussed by SAS 61;
(3) received from the independent auditors the written disclosures
and the letter required by ISB No. 1, and discussed the independence
of the independent auditors with them; and (4) based on such review
and discussions, recommended to the Board of Directors that the
Corporation's audited financial statements be included in the
Corporation's Annual Report on Form 10-K.
20. Maintain minutes or other records of meetings and activities of the
Audit Committee and submit such minutes to the Board of Directors of
the Corporation for review.
V. APPROVAL
As adopted by the BancWest Corporation Board of Directors on March 16, 2000.
34
Appendix 1
(not part of proxy statement)
FIRST HAWAIIAN, INC.
1998 A COPYSTOCK INCENTIVE PLAN
(Amended and Restated as of February 19, 1998)
FIRST HAWAIIAN, INC.
1998 STOCK INCENTIVE PLAN
TABLE OF THE ANNUAL REPORT OF THE CORPORATION ON FORM 10-K TO BE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PRIOR TO MARCH 31, 1998, WILL BE AVAILABLE
AFTER THAT DATE TO EACH STOCKHOLDER UPON WRITTEN REQUEST THEREFOR.
25CONTENTS
-----------------
Article Section Page
- ------- ------- ----
PROLOGUE 4
ARTICLE I DEFINITIONS 5-8
ARTICLE II ADMINISTRATION
Section 2.1 The Committee 9
Section 2.2 Authority of the Committee 9
Section 2.3 Indemnification, Insurance 9
ARTICLE III SHARES SUBJECT TO PLAN
Section 3.1 Number of Shares 10
Section 3.2 Lapsed Awards 10
Section 3.3 Adjustments in Authorized Shares 10
ARTICLE IV ELIGIBILITY AND PARTICIPATION
Section 4.1 Eligibility 11
Section 4.2 Participation 11
ARTICLE V OPTIONS
Section 5.1 Type of Options 12
Section 5.2 ISO's 12
Section 5.3 Reload Options 12
Section 5.4 Award Agreement 12
Section 5.5 Exercise Price 12-13
Section 5.6 Duration of Options 13
Section 5.7 Exercise of Options 13
Section 5.8 Payment 13
Section 5.9 Restrictions on Share Transferability 14
Section 5.10 Termination of Employment due to Death
Disability, or Retirement 14-15
Section 5.11 Termination of Employment for Other
Reasons 15
2
APPENDIX A
ARTICLE VI RESTRICTED STOCK
Section 6.1 Grant of Restricted Stock 16
Section 6.2 Award Agreement 16
Section 6.3 Transferability 16
Section 6.4 Other Restrictions 16
Section 6.5 Removal of Restrictions 16
Section 6.6 Voting Rights 17
Section 6.7 Dividends and Other Distributions 17
Section 6.8 Escrow 17
Section 6.9 Termination of Employment 17
ARTICLE VII OTHER AWARDS
Section 7.1 Types of Awards 18
Section 7.2 Terms and Conditions 18
ARTICLE VIII TRANSFERABILITY OF AWARDS;
BENEFICIARY RIGHTS
Section 8.1 Transferability of Awards 19
Section 8.2 Beneficiary Rights 19
ARTICLE IX CHANGE IN CONTROL 20
ARTICLE X WITHHOLDING
Section 10.1 Tax Withholding 21
Section 10.2 Share Withholding 21
ARTICLE XI AMENDMENT AND TERMINATION
Section 11.1 Amendment 22
Section 11.2 Awards Previously Granted 22
Section 11.3 Rule 16b-3 22
ARTICLE XII MISCELLANEOUS
Section 12.1 Rights of Participants 23
Section 12.2 Miscellaneous Rules 23
3
FIRST HAWAIIAN, INC.
1998 STOCK INCENTIVE PLAN
PROLOGUE
The purpose of the First Hawaiian, Inc. 1998 Stock Incentive Plan (the "Plan")
is to promote the success and enhance the value of First Hawaiian, Inc. (the
"Company") by linking the personal interests of eligible employees to those of
Company stockholders and by providing eligible employees with an incentive for
outstanding performance. The Plan is further intended to provide flexibility to
the Company in its ability to motivate, attract, and retain the services of
employees upon whose judgment, interest, and special effort the successful
conduct of its operation is largely dependent.
The Board of Directors of the Company adopted the Plan on February 19, 1998,
subject to approval by the Company's stockholders. If the Plan's adoption is not
approved by the Company's stockholders prior to February 18, 1999, the Plan
shall automatically be and become cancelled and terminated on February 18, 1999.
All awards granted pursuant to the Plan prior to such stockholder approval shall
not be exercisable until such approval and any such awards shall automatically
be and become cancelled and terminated if such approval is not obtained.
4
ARTICLE I
DEFINITIONS
As used herein the following terms shall have the following meanings unless the
context clearly requires otherwise.
"Beneficiary" means the person, persons, or legal entity designated by the
Participant to receive his benefits under this Plan in the event of his death.
If a Participant fails to make any designation, the person designated shall not
survive the Participant, or the legal entity designated shall no longer be in
existence or shall be legally incapable of receiving benefits hereunder,
Beneficiary shall mean the estate of the Participant.
"Board" means the Board of Directors of the Company.
"Cause" means one or more of the following reasons for the termination of
employment:
(a) The willful and continued failure by the Participant to substantially
perform his duties with the Company or a Subsidiary (other than any such failure
resulting from the Participant's Disability or incapacity due to mental illness)
after a written demand for substantial performance is delivered to the
Participant that specifically identifies the manner in which the Company or
Subsidiary believes that the Participant has not substantially performed his
duties, and the Participant has failed to remedy or take substantial steps to
remedy the situation within ten business days of receiving such notice;
(b) The Participant's conviction for committing a felony (all rights of
appeal having been exhausted); or
(c) The Participant's willfully engaging in gross misconduct that is
materially and demonstrably injurious to the Company or a Subsidiary. However,
no act or failure to act on the Participant's part shall be considered "willful"
unless such act or omission was not in good faith and without reasonable belief
that such action or omission was in the best interest of the Company or its
Subsidiaries.
The Company or the Subsidiary shall notify the Committee if it believes a
Participant's employment has been terminated for Cause. The Committee shall
determine whether a Participant's employment has been terminated for Cause for
purposes of the Plan. The Committee shall notify the Participant in writing if
it has made a preliminary determination that the Participant's employment was
terminated for Cause. The 26
Participant (and, if he chooses, his legal
representative) shall have an opportunity to be heard by the Committee
concerning the Committee's preliminary determination. After taking into
consideration the points raised by the Participant, the Committee shall make a
final determination as to whether the Participant's employment was terminated
for Cause and shall notify the Participant in writing of its final
determination. If the Company or the Subsidiary notifies the Committee that it
believes that a Participant has been terminated for Cause, the Participant shall
not be able to exercise any option, make any other election, or take any action
that would not be permitted under the terms of the Plan following termination of
employment for Cause unless
5
and until the Committee makes its final decision that the Participant was not
terminated for Cause.
"Change in Control" means any of the following:
(a) Any "person" (within the meaning of Section 3(a)(9) of the Exchange
Act and as used in Sections 13(d) and 14(d) thereof, including a "group" as
defined in Section 13(d) thereof) other than those listed in items (i), (ii), or
(iii) of this Section becomes the "beneficial owner" (within the meaning of Rule
13d-3 of the Exchange Act), directly or indirectly, of securities of the Company
representing 35% or more of the combined voting power of the Company's
securities then outstanding.
(i) The Trustees under the Will and of the Estate of Samuel M.
Damon, deceased, and any other persons acting together with them.
(ii) A trustee or other fiduciary holding Shares under an
employee benefit plan of the Company or a Subsidiary.
(iii) A corporation owned directly or indirectly by the
stockholders of the Company (in substantially the same proportions as their
ownership of Shares) becomes the beneficial owner (within the meaning of said
Rule 13d-3), directly or indirectly, of securities of the Company representing
35% or more of the combined voting power of the Company's securities then
outstanding.
(b) During any period of two consecutive calendar years, individuals
who at the beginning of such period constitute the Board (and any new Director
whose election by the Company's stockholders was approved by a vote of at least
two-
thirdstwo-thirds of the Directors then in office who either were Directors at the
beginning of the period or whose election or nomination for election was so
approved) cease for any reason to constitute a majority thereof.
(c) The stockholders of the Company approve:
(i) A plan of complete liquidation of the Company;
(ii) An agreement for the sale or disposition of all or
substantially all the Company's assets; or
(iii) A merger, consolidation, or reorganization of the Company
with or involving any other corporation, other than a merger, consolidation, or
reorganization that would result in the voting stock of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting stock of the surviving entity) at
least 80% of the combined voting power of the stock that is outstanding
immediately after such merger, consolidation, or reorganization unless the Board
determines by a majority vote prior to such merger, consolidation, or
reorganization that no Change in Control will occur as a result of such
transaction.
6
(d) The Board agrees by a majority vote that an event has or is about to
occur that, in fairness to the Participant, is tantamount to a Change in
Control.
A Change in Control shall occur on the first day on which any of the preceding
conditions has been satisfied.
However, notwithstanding the above, in no event shall a Change in Control be
deemed to have occurred, with respect to a Participant, if the Participant is
part of a purchasing group that consummates the Change in Control transaction. A
Participant shall be deemed "part of a purchasing group" for purposes of the
preceding sentence if he is an equity participant in the purchasing company or
group, except for (i) passive ownership of less than 3% of the common stock of
the purchasing company or (ii) ownership of equity participation in the
purchasing company or group that is otherwise not significant, as determined
prior to the Change in Control by a majority of the continuing Directors who are
not employees of the Company or a Subsidiary.
"Code" means the Internal Revenue Code of 1986, as amended from time to time, or
such other provision of law of similar purport as may at any time be substituted
therefor.
"Committee" means the Plan's administrative committee appointed pursuant to
Article II.
27
"Company" means First Hawaiian, Inc.
"Director" means any individual who is a member of the Board.
"Disability" means a disability, as determined by the Social Security
Administration, that is not the result of self-inflicted injury or criminal
conduct on the part of the Participant, and in the case of a determination with
respect to an ISO, meets any additional requirements that may be necessary to
qualify as a permanent and total disability under Section 22(e)(3) of the Code.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time, or such other provision of law of similar purport as may at any time be
substituted therefor.
"Fair Market Value" means the average of the highest and lowest prices of a
Share as reported in publications of general circulation for the Autoquote
System of the National Association of Securities Dealers, Inc. on the relevant
date. If there are no sales on such date, the Fair Market Value shall be
determined as of the immediately preceding date on which there were Share
transactions.
"ISO" means an option to purchase Shares that is designated by the Committee as
an incentive stock option intended to meet the requirements of Section 422 of
the Code.
"Participant" means an employee of the Company or a Subsidiary who has received
an award under the Plan.
"Retirement" means the termination of service as an employee of the Company and
the Subsidiaries on or after (i) attainment of age 65, (ii) attainment of age 55
and completion of
7
ten years of Vesting Service (as defined in the First Hawaiian, Inc. Profit
Sharing Plan), or (iii) attainment of age 62 with the approval of the committee.Committee.
"Shares" means shares of common stock of the Company.
"Subsidiary" means any corporation, partnership, joint venture, or business
trust of which 50% or more of the control thereof is owned, directly or
indirectly, by the Company, provided that for ISO purposes, "Subsidiary" shall
be defined as provided in Section 424(f) of the Code.
8
ARTICLE II
ADMINISTRATION
Section 2.1 The Committee.
- -------------------------
The Committee shall be composed of at least two members of the Board as
designated from time to time by the Board.
Section 2.2 Authority of the Committee.
- --------------------------------------
(a) The Committee shall select the employees to whom awards shall be
granted under the Plan; determine the size, types, terms, and conditions of
awards; cancel and reissue awards; construe and interpret the Plan and any
agreement or instrument entered into under the Plan; establish, amend, or waive
rules and regulations for the Plan's administration; amend, subject to Article
XI, the terms and conditions of any outstanding award to the extent such terms
and conditions are within its discretion; and make any determination that may be
necessary or advisable for administration of the Plan.
(b) The Committee may from time to time delegate to any other person or
persons any or all of its powers hereunder.
(c) All determinations and decisions of the Committee shall be final,
conclusive, and binding on all persons.
Section 2.3 Indemnification, Insurance.
- --------------------------------------
The Company and the Subsidiaries shall indemnify and save harmless and/or insure
each member of the Committee against any and all claims, losses, damages,
expenses, and liabilities arising from his responsibilities in connection with
this Plan, if the member acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company and the
Subsidiaries.
289
ARTICLE III
SHARES SUBJECT TO PLAN
Section 3.1 Number of Shares.
- ----------------------------
(a) Subject to adjustment as provided in Section 3.3, the total number
of Shares available for grant under the Plan shall not exceed 2,000,000, which
Shares shall be reacquired or treasury shares.
(b) Notwithstanding any other provision of this Plan, no employee shall
be granted awards in excess of 200,000 Shares during any calendar year. This
limitation is intended to satisfy the requirements of Section 162(m) of the Code
so that compensation attributable to awards hereunder qualify as
performance-
basedperformance-based compensation under Section 162(m) of the Code. The limitation
under this Section 3.1(b) shall be subject to adjustment under Section 3.3
hereof, but only to the extent permitted under Section 162(m) of the Code.
Section 3.2 Lapsed Awards.
- -------------------------
Subject to the rules under Section 16 of the Exchange Act, if any award granted
under this Plan is canceled, is forfeited, terminates, expires, or lapses for
any reason, any Shares subject to such award shall be available for the grant of
an award under the Plan.
Section 3.3 Adjustments in Authorized Shares.
- --------------------------------------------
In the event of any merger, reorganization, consolidation, recapitalization,
separation, liquidation, stock dividend, split-up, share combination, or other
change in the corporate structure of the Company affecting the number or value
of Shares, then the number, class, and price of Shares subject to outstanding
awards under the Plan shall be adjusted as the Committee may determine in its
sole discretion to be appropriate or equitable to prevent dilution or
enlargement of rights. The number of Shares subject to any award shall always be
a whole number. Any adjustment of an ISO under this Section 3.3 shall be made in
such manner so as not to constitute a "modification" within the meaning of
Section 425(h)(3) of the Code.
10
ARTICLE IV
ELIGIBILITY AND PARTICIPATION
Section 4.1 Eligibility.
- -----------------------
To be eligible to participate in the Plan, an individual must be an officer or
employee of the Company or a Subsidiary who by the nature and scope of his
position influences the long-term results or success of the Company. The
Committee in its sole discretion shall determine if an officer or employee is
eligible. A Director who is not an employee of the Company or a Subsidiary shall
not be eligible to participate in the Plan.
Section 4.2 Participation.
- -------------------------
The Committee shall determine from time to time eligible employees to whom
awards shall be granted and the nature and amount of each award. No eligible
employee shall have any right to be granted an award under this Plan. In
addition, nothing in this Plan shall interfere with or limit in any way the
right of the Company or a Subsidiary to terminate any Participant's employment
at any time, nor confer upon any Participant any right to continue in the employ
of the Company or a Subsidiary.
2911
ARTICLE V
OPTIONS
Section 5.1 Type of Options.
The Committee shall designate at the time of the grant of an option whether it
is a nonqualified stock option or ISO and whether such option shall be in whole
or in part a reload option.
Section 5.2 ISOs.
- ----------------
(a) No ISO may be granted after January 21, 2008.
(b) No employee may receive an award of ISOs that are first exercisable
during any calendarc alendar year to the extent that the aggregate Fair Market Value of
the Shares (determined at the time the ISOs are granted) exceeds $100,000.
(c) Nothing in this Section 5.2 shall be deemed to prevent the grant of
nonqualified stock options in excess of the maximum amount that may be granted
to a Participant as ISOs under Section 422 of the Code.
Section 5.3 Reload Options.
- --------------------------
The Committee may grant reload options subject to such conditions and provisions
as the Committee shall determine. Reload options shall not exceed the number of
Shares used to pay the exercise price of the underlying options and shall not
include any Shares used to satisfy any tax withholding requirements on account
of the exercise of the underlying options. The reload option may not be
exercised during a period longer than the exercise period of the underlying
option that it replaces. The grant of a reload option shall become effective
upon the exercise of the underlying option through the use of Shares. The option
price for a reload option shall not be less than the Fair Market Value of the
Shares on the date the grant of the reload option becomes effective.
Section 5.4 Award Agreement.
- ---------------------------
Each option grant shall be evidenced by an award agreement that shall specify
the exercise price, the duration of the option, the number of Shares to which
the option pertains, and such other provisions as the Committee shall determine.
The award agreement also shall specify whether the option is intended to be an
ISO.
Section 5.5 Exercise Price.
- --------------------------
(a) The exercise price of options shall be determined by the Committee,
provided, however, that the exercise price per Share shall not be less than the
Fair Market Value of a Share on the date the option is granted.
12
(b) An ISO granted to a Participant who at the time of grant owns (taking
into account Section 424(d) of the Code) Shares representing more than 10% of
the total combined voting power of all classes of stock of the Company (herein a
"Ten Percent Stockholder") shall have an exercise price that is at least 110% of
the Fair Market Value of the Shares subject to the option.
Section 5.6 Duration of Options.
- -------------------------------
Each option shall expire at such time as the Committee shall determine at the
time of grant, provided that no ISO shall be exercisable later than the tenth
anniversary date of its grant. Notwithstanding the prior sentence, an ISO
granted to a Ten Percent Stockholder shall not be exercisable later than the
fifth anniversary date of its grant.
Section 5.7 Exercise of Options.
- -------------------------------
Options granted under the Plan shall be exercisable at such times and be subject
to such restrictions and conditions as the Committee shall in each instance
approve, which times, restrictions, and conditions need not
30
be the same for each
grant or for each Participant. However, in no event may any option granted under
this Plan become exercisable earlier than six months after the date of its
grant.
Section 5.8 Payment.
- -------------------
(a) Options shall be exercised by the delivery of a written notice of
exercise to the Secretary of the Company that sets forth the number of Shares
with respect to which the option is to be exercised and is accompanied by full
payment for the exercise price of the Shares.
The exercise price shall be payable to the Company in full either:
(i) in cash or cash equivalent, or
(ii) if permitted under the award agreement, by tendering previously
acquired Shares having a Fair Market Value at the time of exercise equal to the
total exercise price pursuant to the options being exercised, provided, however,
that any Shares so tendered by a Participant must be acceptable to the Committee
in its sole discretion.
(b) The Committee also may allow cashless exercise of options as permitted
under any law or regulation applicable to the Company or by any other means that
the Committee determines to be consistent with the Plan's purpose. The proceeds
from such a payment shall be added to the general funds of the Company and shall
be used for general corporate purposes.
(c) As soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the Participant or
permitted assignee, Share certificates in an appropriate amount based upon the
number of options exercised.
13
Section 5.9 Restrictions on Share Transferability.
- -------------------------------------------------
The Committee shall impose such restrictions on any Shares acquired pursuant
to the exercise of an option under the Plan as it may deem advisable, including
without limitation restrictions under applicable Federal securities laws, the
requirements of any stock exchange or market upon which the Shares are then
listed and/or traded, and any blue sky or state securities laws applicable to
the Shares. The Committee shall legend the certificates representing the Shares
to give appropriate notice of such restrictions.
Section 5.10 Termination of Employment Due to Death, Disability, or Retirement.
- ------------------------------------------------------------------------------
If the employment of a Participant is terminated by reason of death, Disability,
or Retirement, options granted to the Participant under this Plan may be
exercised only as follows:
(a) Death. If the Participant's employment is terminated by reason of
death, any outstanding options granted to such Participant that are vested as of
the date of his death shall, subject to Section 5.6, remain exercisable at any
time prior to their expiration date or for one year after the date his
employment terminated, whichever period is shorter. The options may be exercised
by the Participant's Beneficiary or by such persons who have acquired the
Participant's rights under the options by will or by the laws of descent and
distribution or permitted transfer.
(b) Disability. If the Participant's employment is terminated by reason
of Disability, any outstanding options granted to such Participant that are
vested as of the date his employment terminates shall remain exercisable at any
time prior to their expiration date or for one year after the date that his
Disability is determined by the Committee to be total and permanent, whichever
period is shorter.
(c) Retirement. If the Participant's employment is terminated by reason
of Retirement, any outstanding options granted to such Participant that are
vested as of the effective date of his Retirement shall remain exercisable at
any time prior to their expiration date or for three years after his date of
Retirement, whichever period is shorter.
(d) Exercise Limitations on ISOs. Notwithstanding Sections 5.10(a), (b),
and (c), the right of a Participant to exercise an ISO shall be subject to the
limitations of Section 422 of the Code.
(e) Vesting at Termination Date. The following options shall be considered
vested as of the date the Participant's employment terminates:
31
(1) Options that were exercisable as of the date of employment
termination shall remain exercisable;
(2) An additional portion of the options shall become exercisable
upon termination of employment. This portion shall be a percentage of the
options equal to the product of (A) and (B) where:
14
(A) is the percentage of the options that otherwise would
have first become exercisable at the end of the calendar year in which the
employment termination occurs; and
(B) is a fraction, the numerator of which is the number of
full weeks of employment during the calendar year in which employment
termination occurs, and the denominator of which is 52; and
(3) Except as provided in Section 5.10(f), options that are
scheduled to vest in a year that begins after the end of the calendar year in
which employment termination occurs shall be cancelled.
(f) Notwithstanding the foregoing provisions of this Section 5.10, the
Committee shall have the authority in its sole discretion to accelerate the
vesting of options that are outstanding as of the date a Participant's
employment terminates.
Section 5.11 Termination of Employment for Other Reasons.
- --------------------------------------------------------
(a) If the employment of a Participant shall terminate for any reason
other than the reasons set forth in Section 5.10 (other than for Cause), all
nonvested options held by the Participant shall vest only if the Committee
determines in its sole discretion to vest all or any portion of such options.
Thereafter, all vested options shall remain exercisable at any time prior to
their expiration date or for three months after the date that the Participant's
employment was terminated, whichever period is shorter. If the Committee does
not vest such options, the options shall be deemed for all purposes to have
remained unvested upon the termination of the Participant's employment.
(b) If a Participant's employment is terminated for Cause, all of his
outstanding options shall immediately be surrendered to the Company and no
additional exercise periods shall be allowed, regardless of the otherwise vested
status of the options.
15
ARTICLE VI
RESTRICTED STOCK
Section 6.1 Grant of Restricted Stock.
- -------------------------------------
The Committee may grant Shares of restricted stock to eligible employees in
such amounts as the Committee shall determine in its sole discretion. Such
Shares of restricted stock may be issued for no consideration other than
services rendered.
Section 6.2 Award Agreement.
- ---------------------------
Each restricted stock grant shall be evidenced by an award agreement that
specifies the period (or periods) of restriction, the number of Shares of
restricted stock granted, and such other provisions as the Committee shall
determine.
Section 6.3 Transferability.
- ---------------------------
Except as provided in this Article VI or Section 8.1, Shares of restricted stock
may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated until the end of the applicable period of restriction or upon
earlier satisfaction of any other conditions as specified by the Committee in
its sole discretion and set forth in the award agreement. Subject to approval by
the Committee, Shares of restricted stock may be surrendered to satisfy the
exercise price of options granted to a Participant prior to the lapse of the
period of restriction. However, in no event may any restricted stock vest
earlier than six months following the date of its grant. Prior to the lapse of
the period of restriction, the rights with respect to a Participant's restricted
stock shall be available only to the Participant during his lifetime.
32
Section 6.4 Other Restrictions.
- ------------------------------
The Committee (i) may impose such other restrictions on any Shares of restricted
stock as it deems advisable, including without limitation restrictions based
upon the achievement of specific performance goals (Company-
wide,(Company-wide, subsidiary, or
business unit of the Company, and/or individual), (ii) shall impose restrictions
upon transfer of Shares after the period of restriction as may be required under
applicable Federal or state securities laws, and (iii) may legend the
certificates representing restricted stock to give appropriate notice of such
restrictions.
Section 6.5 Removal of Restrictions.
- -----------------------------------
Except as otherwise provided in this Article VI, Shares of restricted stock
shall become freely transferable by the Participant after the last day of the
period of restriction. Once the restrictions on such Shares lapse, the
Participant shall be entitled to have any legend that was added pursuant to
Section 6.4 removed from his Share certificate.
16
Section 6.6 Voting Rights.
- -------------------------
During the period of restriction, the Participant may exercise full voting
rights with respect to his Shares of restricted stock.
Section 6.7 Dividends and Other Distributions.
- ---------------------------------------------
Participants holding Shares of restricted stock shall be entitled to receive all
dividends and other distributions paid with respect to such Shares while they
are held during the period of restriction. The Committee shall establish in its
discretion the time at which the Participant shall receive such dividends and
distributions, which time may be any time from the date on which they are paid
generally to stockholders to the end of the period of restriction. If any such
dividends and distributions are paid in Shares, such Shares shall be subject to
the same restrictions on transferability and vesting as the Shares of restricted
stock with respect to which they were paid.
Section 6.8 Escrow.
- ------------------
Even though the certificates evidencing Shares of restricted stock shall be
issued in the name of the Participant, such certificates shall be held by the
Company in escrow subject to delivery to the Participant or to the Company at
such times and in such amounts as shall be directed by the Committee.
Certificates evidencing whole Shares issued as a stock dividend on or split-up
of Shares held in escrow shall be held in escrow on the terms set forth above.
Any fractional Shares so issued and any Shares acquired by a Participant's
exercise of subscription rights in respect of Shares held in escrow shall not be
subject to the escrow provisions and shall be the property of the Participant.
Section 6.9 Termination of Employment.
- -------------------------------------
(a) The number of Shares of restricted stock that are vested as of the
date a Participant's employment terminates shall be determined in accordance
with the terms of the award agreement described in Section 6.2. The
Participant's nonvested Shares of restricted stock shall vest only if the
Committee determines in its sole discretion that they shall vest.
(b) With the exception of termination of employment for Cause, the
Committee in its sole discretion may provide that the restrictions shall lapse
on restricted stock after termination of employment, upon such terms and
provisions as it deems proper. If the Committee does not do so, the restrictions
upon restricted shares shall be deemed for all purposes not to have lapsed.
3317
ARTICLE VII
OTHER AWARDS
Section 7.1 Types of Awards.
- ---------------------------
(a) In addition to awards granted under Articles V and VI, the Committee
may grant under this Plan any other type of arrangement with an employee that by
its terms involves or might involve the issuance of (i) Shares or (ii) a
derivative security (as such term is defined in Rule 16a-1 of the Exchange Act,
as such Rule may be amended from time to time) with an exercise or conversion
privilege at a price related to the Shares or with a value derived from the
value of the Shares.
(b) Such awards are not restricted to any specified form or structure
and may include, without limitation, sales or bonuses of stock, restricted
stock, IS's,ISOs, nonqualified stock options, reload stock options, stock purchase
warrants, other rights to acquire stock, securities convertible into or
redeemable for stock, stock appreciation rights, limited stock appreciation
rights, phantom stock, dividend equivalents, performance units or performance
shares, and an award may consist of one such security or benefit, or two or more
of them in tandem or in the alternative.
(c) Shares may be issued pursuant to an award for any lawful consideration
as determined by the Committee, including, without limitation, services rendered
by the recipient of such award.
Section 7.2 Terms and Conditions.
- --------------------------------
Subject to the provisions of this Plan, the Committee, in its sole and absolute
discretion, shall determine all of the terms and conditions of each award
granted under this Article VII, which terms and conditions may include, among
other things, a provision permitting the recipient of such award, including any
recipient who is a director or officer of the Company, to pay the purchase price
of the Shares or other property issuable pursuant to such award, or such
recipient's tax withholding obligation with respect to such issuance, in whole
or in part, by any one or more of the following:
(i) the delivery of previously owned Shares (including
"pyramiding") or other property, provided that the Company is not then
prohibited from purchasing or acquiring Shares or such other property,
(ii) a reduction in the amount of Shares or other property
otherwise issuable pursuant to such Award, or
(iii) the delivery of a promissory note, the terms and conditions
of which shall be determined by the Committee.
18
ARTICLE VIII
TRANSFERABILITY OF AWARDS;
BENEFICIARY RIGHTS
Section 8.1 Transferability of Awards.
- -------------------------------------
Each ISO granted under the Plan shall not be transferable other than by will or
the laws of descent or distribution. Except as otherwise set forth in the Plan,
any other award under the Plan may be transferable subject to the terms and
conditions as may be established by the Committee and set forth in the award
agreement.
Section 8.2 Beneficiary Rights.
- ------------------------------
To the extent permitted under the Plan and the award agreement, after a
Participant's death his Beneficiary may elect within the applicable period to
(i) exercise the Participant's vested awards, (ii) have restrictions removed on
restricted stock, and (iii) make such other elections and take such other
actions as permitted under the Plan and the award agreement.
3419
ARTICLE IX
CHANGE IN CONTROL
If a Change in Control occurs, then unless otherwise specifically prohibited
by the Plan (i) any and all awards held by a Participant for at least six months
shall become immediately vested and exercisable, (ii) any period of restrictions
and other restrictions on restricted stock shall lapse, (iii) within ten
business days after the occurrence of a Change in Control, the stock
certificates representing Shares of restricted stock shall be delivered to the
Participant without any restrictions or legends thereon (except such
restrictions or legends that are required by Federal or state securities laws),
and (iv) the Committee may modify an award as it deems appropriate prior to the
effective date of the Change in Control.
20
ARTICLE X
WITHHOLDING
Section 10.1 Tax Withholding.
- ----------------------------
The Company may deduct or withhold, or require the Participant to remit to the
Company, such withholding taxes as may be required by law in connection with the
Plan.
Section 10.2 Share Withholding.
- ------------------------------
A Participant may elect, subject to the Committee's approval, to satisfy any
withholding taxes incurred in connection with a transaction or event under the
Plan by having the Company withhold from the Shares to be issued Shares, or by
tendering to the Company Shares, having a Fair Market Value on the date in an
amount sufficient to satisfy federal and state withholding taxes as required by
law on the applicable transaction or event. If the Participant is subject to
Rule 16b-3 of the Exchange Act, any such election must comply with the
requirements, if any, of said Rule and be approved by the Committee.
21
ARTICLE XI
AMENDMENT AND TERMINATION
Section 11.1 Amendment.
- ----------------------
The Board may amend or terminate the Plan. IfAny amendment, termination, or
modification that (i) increases the total number of Shares that may be issued
under the Plan, (ii) materially increases the cost of the Plan or the benefits
to Participants, or (iii) changes the Plan provisions regarding the exercise
price shall be subject to approval of the stockholders of the Company if such
approval is required by the Code; Section 16 of the Exchange Act; any national
securities exchange or system on which Shares are then listed, traded, or
reported; or any regulatory body having jurisdiction with respect thereto, no amendment, termination, or modification
may without the approval of the stockholders of the Company (i) increase the
total number of Shares that may be issued under the Plan, (ii) materially
increase the cost of the Plan or the benefits to Participants, or (iii) change
the Plan provisions regarding the exercise price.thereto.
Section 11.2 Awards Previously Granted.
- --------------------------------------
No amendment or termination of the Plan shall in any manner adversely affect any
award previously granted under the Plan without the written consent of the
affected Participant.
Section 11.3 Rule 16b-3.
- -----------------------
The Plan is intended to comply with Rule 16b-3 of the Exchange Act. If the
requirements of Rule 16b-3 change, the Board may amend the Plan to comply with
such changes.
3522
ARTICLE XII
MISCELLANEOUS
Section 12.1 Rights of Participants.
- -----------------------------------
(a) No Participant shall, by reason of his participation in this Plan,
have any interest in any specific asset or assets of the Company or a
Subsidiary.
(b) Neither the adoption of this Plan, the granting of any awards under
this Plan, nor any action of the Board or the Committee in connection with the
Plan shall be held or construed to confer upon any person any legal right to be
continued as an officer or employee of the Company or a Subsidiary.
(c) No Participant shall have the right to assign, pledge, encumber, or
otherwise dispose of (except to a Beneficiary upon his death) any of his
interest in this Plan; nor shall his interest be subject to garnishment,
attachment, transfer by operation of law, or any legal process.
Section 12.2 Miscellaneous Rules.
- --------------------------------
(a) Wherever used herein the masculine gender shall include the feminine
and the singular number shall include the plural, unless the context clearly
indicates otherwise.
(b) The headings of articles and sections are included herein solely for
convenience of reference, and if there is any conflict between such headings and
the text of the Plan, the text shall be controlling.
(c) To the extent not preempted by Federal law, the Plan shall be
governed, construed, administered, and regulated according to the laws of the
State of Hawaii.
(d) Any transaction under the Plan involving a grant, award, or other
acquisition of Shares subject to Section 16(b) of the Exchange Act shall not be
effected unless exempt under Rule 16b-3 thereunder.
(e) The Company's obligations with respect to awards granted under the
Plan shall, if not otherwise covered by Article XI, be binding on any successor
to the Company.
(f) The Committee may condition any award under the Plan upon the
Participant's agreement that all disputes under the Plan be settled by
arbitration or another procedure prescribed by the Committee.
3623
Appendix 2
(not part of proxy statement)
BANCWEST CORPORATION LONG-TERM INCENTIVE PLAN
WITH
AMENDMENTS 1, 2 AND 3
FIRST HAWAIIAN, INC.
LONG-TERM INCENTIVE PLAN
TABLE OF CONTENTS
-----------------
Article Section Page
- ------- ------- ----
1 Establishment, Purpose, and Duration
------------------------------------
1.1 Establishment of the Plan 1
1.2 Purpose of the Plan 1
1.3 Duration of the Plan 1
2 Definitions and Construction
----------------------------
2.1 Definitions 2
2.2 Gender and Number 6
2.3 Severability 6
3 Administration
--------------
3.1 The Committee 6-7
3.2 Authority of the Committee 7
3.3 Decisions Binding 8
4 Eligibility and Participation
-----------------------------
4.1 Eligibility 8
4.2 Actual Participation 8
5 Awards
------
5.1 Grant of Awards 8
5.2 Value of Awards 9
5.3 Earning of Awards 9
5.4 Form and Timing of Payment of
Awards 9
5.5 Termination of Employment Due to
Death, Disability, or Retirement 9
5.6 Termination of Employment for
Other Reasons 9
-i-
5.7 Nontransferability 10
5.8 No Derivative Securities 10
FIRST HAWAIIAN, INC.
LONG-TERM INCENTIVE PLAN
TABLE OF CONTENTS
-----------------
Article Section Page
- ------- ------- ----
6 Beneficiary Designation
-----------------------
6.1 Beneficiary Designations 10
7 Rights of Employees
-------------------
7.1 Employment 10-11
7.2 Participation 11
7.3 Interest in Particular Property 11
7.4 Additional Incentive Plans 11
8 Change in Control
-----------------
8.1 Consequences of Change in Control 11-12
9 Amendment, Modification, and
----------------------------
Termination
-----------
9.1 Amendment, Modification, and
Termination 12
9.2 Awards Previously Granted 12
10 Withholding
-----------
10.1 Tax Withholding 12
11 Indemnification
---------------
11.1 Indemnification 13
12 Successors
----------
12.1 Successors 13
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FIRST HAWAIIAN, INC.
LONG-TERM INCENTIVE PLAN
TABLE OF CONTENTS
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Article Section Page
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13 Requirements of Law
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13.1 Requirements of Law 13
13.2 Dispute Resolution 14
13.3 Governing Law 14
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FIRST HAWAIIAN, INC.
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LONG-TERM INCENTIVE PLAN
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Article 1. Establishment, Purpose, and Duration
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1.1 Establishment of the Plan. Effective as of January 1, 1992, First
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Hawaiian, Inc., a Delaware corporation, hereby establishes this "First
Hawaiian, Inc. Long-Term Incentive Plan" (the "Plan"), as set forth in this
document. The Plan permits the grant of Awards designed to provide cash
payments in amounts that are a function of (i) a predetermined target for each
Participant and (ii) the extent to which specified performance goals are
achieved.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
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success, and enhance the value, of the Company by linking the personal interests
of Employees to those of Company shareholders, and by providing Participants
with an incentive for outstanding performance. The Plan is further intended to
enable the Company to motivate, attract, and retain the services of Participants
upon whose judgment, interest, and special effort the successful conduct of its
operation is largely dependent.
1.3 Duration of the Plan. Subject to prior termination by law or by the
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Board pursuant to the right of termination it has reserved under Article 9
herein, the Plan shall continue in effect indefinitely.
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Article 2. Definitions And Construction
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2.1 Definitions. Whenever used in the Plan, the following terms shall
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have the meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized:
(a) "Award" means, individually or collectively, an award granted under
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this Plan.
(b) "Board" means the Board of Directors of First Hawaiian, Inc.
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(c) "Change in Control" means any of the following:
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(1) Any "persons" (within the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
and 14(d) thereof, including a "group" as defined in Section
13(d) thereof) other than the Trustees under the Will and of the
Estate of Samuel M. Damon, deceased, and any other persons acting
together with them, or other than a trustee or other fiduciary
holding common stock of First Hawaiian, Inc. under an employee
benefit plan of the Company, or a corporation owned directly or
indirectly by the stockholders of First Hawaiian, Inc., in
substantially the same proportions as their ownership of common
stock of First Hawaiian, Inc., becomes the beneficial owner
(within the meaning ascribed to such term in Rule 13d-3 of the
General Rules and Regulations under the Exchange Act) directly or
indirectly, of securities of First Hawaiian, Inc. representing
thirty-five percent (35%) or more of the combined voting power of
First Hawaiian, Inc.'s Shares then outstanding; or
(2) During any period of two (2) consecutive calendar years (not
including any period prior to the adoption of this
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Plan), individuals who at the beginning of such period constitute
the Board (and any new Director, whose appointment or election as
a Director was approved by a vote of at least two-thirds (2/3) of
the Directors then still in office who either were Directors at
the beginning of the period or whose appointment or election was
so approved), cease for any reason (other than natural causes) to
constitute a majority thereof; or
(3) The stockholders of First Hawaiian, Inc. approve:
(A) a plan of complete liquidation of First Hawaiian, Inc.;
(B) an agreement for the sale or disposition of all or
substantially all First Hawaiian Inc.'s assets; or
(C) a merger, consolidation, or reorganization of First
Hawaiian, Inc. with or involving any other corporation,
other than a merger, consolidation, or reorganization that
would result in the voting stock of First Hawaiian, Inc.
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
converted into voting stock of the surviving entity), at
least eighty percent (80%) of the combined voting power of
the stocks which is outstanding immediately after such
merger, consolidation or reorganization, unless the Board
determines by a majority vote prior to the merger,
consolidation or reorganization that no Change in Control
will occur as a result of such transaction; or
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(4) The Board agrees by a majority vote that an event has or is about
to occur that, in fairness to the Employee, is tantamount to a
Change in Control of First Hawaiian, Inc.
A Change of Control shall occur on the first day on which any of the
preceding conditions has been satisfied. However, notwithstanding the
above, a Change in Control shall not be deemed to have occurred, with
respect to an Employee, if the Employee is part of a purchasing group
which consummates the Change in Control transaction. An Employee
shall be deemed "part of a purchasing group" for purposes of the
preceding sentence if the Employee is an equity participant in the
purchasing company or group (except for: (i) passive ownership of
less than three percent (3%) of the common stock of the purchasing
company; or (ii) ownership of equity participation in the purchasing
company or group which is otherwise not significant, as determined
prior to the Change in Control by a majority of the continuing
Directors who are not Employees).
(d) "Code" means the Internal Revenue Code of 1986, as amended from time
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to time.
(e) "Committee" means the committee, as specified in Article 3, appointed
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by the Board to administer the Plan with respect to grants of Awards.
(f) "Company" means First Hawaiian, Inc., a Delaware corporation
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(including any and all Subsidiaries), or any successor thereto as
provided in Article 12 herein.
(g) "Director" means any individual who is a member of the Board.
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(h) "Disability" means a disability, as determined by the Social Security
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Administration, which is not the result of self-inflicted injury,
addiction to alcohol or narcotic drugs, or
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criminal conduct on the part of the Participant concerned, and which,
in the case of a determination with respect to an ISO, meets any
additional requirements that may be necessary to qualify as a
permanent and total disability under Code section 22(e)(3).
(i) "Employee" means any full-time, nonunion employee of the Company.
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Directors who are not otherwise employed by the Company shall not be
considered Employees under this Plan.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended
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from time to time, or any successor Act thereto.
(k) "Insider" shall mean an Employee who is, at the time an Award is made
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under this Plan, the beneficial owner, directly or indirectly, of more
than ten percent of any class of equity securities of the Company
registered pursuant to Section 12 of the Exchange Act, or is an
officer (as defined in Rule 16a-1(f) or any successor rule under the
Exchange Act) or a director of the Company.
(l) "Key Employee" means an officer and any other Employee who, by the
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nature and scope of his or her position, is considered "key" in that
he or she regularly and directly makes or influences policy decisions
which impact the overall long-term results or success of the Company.
Whether any individual Employee is a Key Employee shall be determined
in the sole discretion of the Committee.
(m) "Participant" means an Employee of the Company who has outstanding an
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Award granted under the Plan.
(n) "Retirement" means that the Participant is eligible for a normal or
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early retirement benefit under Article 6 of the Employees' Retirement
Plan of First Hawaiian, Inc.
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(o) "Subsidiary" means any corporation in which the Company owns directly,
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or indirectly through subsidiaries, at least fifty percent (50%) of
the total combined voting power of all classes of stock, or any other
entity (including, but not limited to, partnerships and joint
ventures) in which the Company owns at least fifty percent (50%) of
the combined equity thereof.
2.2 Gender and Number. Except where otherwise indicated by the context,
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any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
2.3 Severability. In the event any provision of the Plan shall be held
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illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
Article 3. Administration
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3.1 The Committee. This section shall be applied so as to comply with the
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disinterested administration requirement of Rule 16b-3 of the Exchange Act,
regardless of whether or not any Awards constitute derivative securities that
are affected by such requirement. The Plan shall be administered by the
Executive Compensation Committee of the Board, or by any other committee
appointed by the Board consisting of Directors who are not Employees. For
periods before September 1, 1992 or such earlier date as the Company shall apply
the exemptions under Exchange Act Rule 16b-3, as amended to be effective
starting on or after May 1, 1991, the Committee shall consist of not less than
three (3) such members. Thereafter, the Committee shall consist of not less than
two (2) directors. The members of the Committee
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shall be appointed from time to time by, and shall serve at the discretion of,
the Board.
Except as permitted under Rule 16b-3(c)(2)(i)(A), (B), (C), and (D) under the
Exchange Act, no member of the Committee shall have received a grant of an Award
under the Plan or any similar plan of the Company or any of its Subsidiaries
while serving on the Committee, or shall have so received such a grant at any
time within one (1) year prior to his or her service on the Committee, or, if
different, for the time period just necessary to fulfill the then current Rule
16b-3 requirements under the Exchange Act. However, if for any reason the
Committee does not qualify to administer the Plan, as contemplated by Rule 16b-3
of the Exchange Act, the Board may appoint a new Committee so as to comply with
Rule 16b-3.
3.2 Authority of the Committee. The Committee shall have full power
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except as limited by law or by the Articles of Incorporation or Bylaws of the
Company, and subject to the provisions herein: to select Key Employees to whom
Awards are granted; to determine the size and types of Awards; to determine the
terms and conditions of such Awards in a manner consistent with the Plan; to
cancel and reissue any Awards granted hereunder; to construe and interpret the
Plan and any agreement or instrument entered into under the Plan; to establish,
amend, or waive rules and regulations for the Plan's administration; and
(subject to the provisions of Article 9 herein) to amend the terms and
conditions of any outstanding Award to the extent such terms and conditions are
within the discretion of the Committee as provided in the Plan. Further, the
Committee shall make all other determinations which may be necessary or
advisable for the administration of the Plan.
To the extent permissible under applicable law, the Committee may delegate to
any other person or persons any or all of its powers hereunder and the
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responsibility of performing ministerial acts in the administration of the Plan;
provided, however, that only the Committee or the Board may take action
affecting an Insider.
3.3 Decisions Binding. All determinations and decisions made by the
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Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board shall be final, conclusive, and binding on all persons,
including the Company, its stockholders, Employees, Participants, and their
estates and beneficiaries.
Article 4. Eligibility and Participation
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4.1 Eligibility. Persons eligible to participate in this Plan include all
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Key Employees of the Company, as determined by the Committee, including
Employees who are members of the Board, but excluding Directors who are not
Employees.
4.2 Actual Participation. Subject to the provisions of the Plan, the
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Committee may, from time to time, select from all eligible Key Employees, those
to whom Awards shall be granted and shall determine the nature and amount of
each Award. No Employee shall have any right to be granted an Award under this
Plan. In addition, nothing in this Plan shall interfere with or limit in any
way the right of the Company to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of the
Company.
Article 5. Awards
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5.1 Grant of Awards. Subject to the terms of the Plan, Awards may be
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granted to eligible Employees at any time and from time to time, as shall be
determined by the Committee. The Committee shall have complete discretion in
determining the target amount (expressed as a percentage of base salary) of the
Award granted to each Participant.
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5.2 Value of Awards. The Committee shall set performance goals in its
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discretion which, depending on the extent to which they are met, will modify the
amount of target Awards to an amount that may be greater or less than the
original target and will determine, in the manner specified by the Committee,
the Award value that becomes payable to Participants. The time period during
which the performance goals must be met shall be called a "Performance Period."
Performance Periods shall, in all cases, exceed six (6) months in length.
5.3 Earning of Awards. After the applicable Performance Period has ended,
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the holder of a Award shall be entitled to receive payout as a function of the
extent to which the corresponding performance goals have been achieved.
5.4 Form and Timing of Payment of Awards. Payment of earned Awards shall
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be made in cash equal to the value of the earned Award.
5.5 Termination of Employment Due to Death, Disability, or Retirement. In
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the event the employment of a Participant is terminated by reason of death,
Disability or Retirement during a Performance Period, the Participant shall
receive a prorated payout of the Award for the Performance Period as determined
by the Committee.
Payment of Awards earned pursuant to this section shall be made at the same time
payments are made to Participants who did not terminate employment during the
applicable Performance Period.
5.6 Termination of Employment for Other Reasons. In the event that a
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Participant terminates employment with the Company for any reason other than
those reasons set forth in Section 5.5, all Awards for incomplete Performance
Periods shall be returned by the Participant to the Company without any payment
by the Company to the Participant, unless the Committee, in its sole discretion,
determines that all or any portion of such Awards should instead be treated as
vested.
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5.7 Nontransferability. Awards may not be sold, transferred, pledged,
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assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, a Participant's rights under the
Plan shall be exercisable during the Participant's lifetime only by the
Participant or the Participant's legal representative.
5.8 No Derivative Securities. Awards are intended not to be "derivtive
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securities" as that term is defined in Rule 16a-1(c) under the Exchange Act, as
amended and interpreted by the Securities and Exchange commission from time to
time. The Committee will use its best efforts to assume that Awards are not
derivative securities and shall, if necessary, amend any outstanding Award to an
Insider, with the consent of the Insider, to comply with any changes in the
definition or interpretation of the term derivative securities.
Article 6. Beneficiary Designation
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6.1 Beneficiary Designations. Each Participant under the Plan may, from
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time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid
in case of his or her death before he or she receives any or all of such
benefit. Each such designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Company, and will be effective
only when filed by the Participant in writing with the Secretary of the Company
during the Participant's lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall be paid to the
Participant's estate.
Article 7. Rights of Employees
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7.1 Employment. Nothing in the Plan shall interfere with or limit in any
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way the right of the Company to terminate any Participant's employment at
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any time, nor confer upon any Participant any right to continue in the employ of
the Company.
For purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Subsidiaries (or between Subsidiaries) shall not be
deemed a termination of employment.
7.2 Participation. No Employee shall have the right to be selected as a
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Key Employee or to receive an Award under this Plan, or, having been so
selected, to be selected to receive a future Award.
7.3 Interest in Particular Property. No Participant shall have, under any
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circumstances, any interest whatsoever, vested or contingent, in any particular
property or asset of the Company or any Subsidiary, or in any particular Share
or Shares of the Company that may be held by the Company or any Subsidiary by
virtue of any Award.
7.4 Additional Incentive Plans. The Plan shall not be deemed a substitute
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for, and shall not preclude the establishment or continuation of any other plan,
practice, or arrangement that may now or hereafter be provided for the payment
of compensation, special awards, or employee benefits to Employees of the
Company and its Subsidiaries generally, or to any class or group of Employees,
including without limitation, any savings, thrift, profit-sharing, pension,
retirement, excess benefit, insurance, health care plans, or other employee
benefit plans. Any such arrangements may be authorized by the Company and its
Subsidiaries and payment thereunder made independently of the Plan.
Article 8. Change in Control
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8.1 Consequences of Change of Control. Upon the occurrence of a Change in
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Control, unless otherwise specifically prohibited by the terms of Article 13:
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(a) The maximum target value attainable under all Awards shall be deemed to
have been fully earned for the entire Performance Period as of the
effective date of the Change in Control, except that all Awards which
shall have been outstanding less than six (6) months on the effective
date of the Change in Control shall not be deemed to have earned the
target value; and
(b) Subject to Articles 9 and 13, the Committee shall have the authority to
make any modifications to the Awards as determined by the Committee to
be appropriate before the effective date of the Change in Control.
The Committee may, at its discretion, include such further provisions and
limitations in any Participant's Award Agreement, as the Committee may deem
equitable and in the best interests of the Company.
Article 9. Amendment, Modification, and Termination
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9.1 Amendment, Modification, and Termination. With the approval of the
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Board, at any time and from time to time, the Committee may terminate, amend, or
modify the Plan.
9.2 Awards Previously Granted. No termination, amendment, or modification
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of the Plan shall in any manner adversely affect any Award previously granted
under the Plan, without the written consent of the Participant holding such
Award.
Article 10. Withholding
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10.1 Tax Withholding. The Company shall have the power and the right to
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deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any grant of an Award or payment made under or as a result of this Plan or any
other taxable event resulting from this Plan.
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Article 11. Indemnification
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11.1 Indemnification. Each person who is or shall have been a member of
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the Committee, or of the Board, shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
him or her in settlement thereof, with the Company's approval, or paid by him or
her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's Certificate of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.
Article 12. Successors
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12.1 Successors. All obligations of First Hawaiian, Inc. under the Plan,
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with respect to Awards granted hereunder, shall be binding on any successor
thereto, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of First Hawaiian, Inc..
Article 13. Requirements of Law
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13.1 Requirements of Law. The granting of Awards and payments made under
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the Plan shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national securities exchanges as
may be required.
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13.2 Dispute Resolution. The Committee may condition any Award under this
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Plan upon the Participant's agreement that all disputes concerning Awards under
this Plan be settled by arbitration or another procedure prescribed by the
Committee.
13.3 Governing Law. To the extent not preempted by Federal law, the Plan,
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and all agreements hereunder, shall be construed in accordance with and governed
by the laws of the State of Hawaii.
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AMENDMENT NO. 1 TO
FIRST HAWAIIAN, INC.
LONG-TERM INCENTIVE PLAN
In accordance with Section 9.1 of the First Hawaiian, Inc. Long-Term
Incentive Plan (hereinafter the "Plan"), the Plan is hereby amended in the
following respects.
1. Section 2.1(i) of the Plan is hereby amended to read in its
entirety as follows:
(i)"Employee" means any full-time, nonunion employee of the Company or a
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Subsidiary. A member of the Board or the board of directors of
a Subsidiary who is not otherwise employed by the Company or a
Subsidiary shall not be considered an Employee under this Plan.
2. Section 2.1(m) of the Plan is hereby amended to read in its
entirety as follows:
(m)"Participant" means an Employee who has outstanding an Award granted under
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the Plan.
3. Section 4.1 of the Plan is hereby amended to read in its entirety
as follows:
4.1 Eligibility. Persons eligible to participate in this Plan include
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all Key Employees, as determined by the Committee, including Employees
who are members of the Board.
4. The last sentence of Section 4.2 of the Plan is hereby amended to
read in its entirety as follows:
In addition, nothing in this Plan shall interfere with or limit in any
way the right of the Company or a Subsidiary to terminate any
Participant's employment at any time, nor confer upon any Participant
any right to continue in the employ of the Company or a Subsidiary.
The amendments set forth herein shall be effective as of January 1,
1992.
To record the adoption of this amendment, First Hawaiian, Inc. has
executed this document this 16th day of May, 1996.
FIRST HAWAIIAN, INC.
By /s/ Herbert E. Wolff
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Its Senior Vice President and
Secretary
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AMENDMENT NO. 2 TO
FIRST HAWAIIAN, INC.
LONG-TERM INCENTIVE PLAN
In accordance with Article 9 of the First Hawaiian, Inc. Long-Term Incentive
Plan (hereinafter the "Plan"), the Plan is hereby amended as follows:
1. Section 2.1(c) of the Plan is hereby amended by adding the
following at the end of such section:
In addition, notwithstanding the above, a Change in Control
shall not be deemed to have occurred as a result of any one or series
of transactions or events that in any way result from or are related
to the Agreement and Plan of Merger, dated as of May 28, 1998, between
BancWest Corporation and First Hawaiian, Inc. (hereinafter the "Merger
Agreement").
2. Section 9.1 of the Plan is hereby amended by adding the following
at the end of such section:
In connection with the Merger Agreement, awards granted
under the Plan for the Performance Period beginning January 1, 1998
and ending December 31, 2000 (hereinafter the "Original 1998 Awards")
are hereby modified as follows:
(i) For each recipient the maximum target value
attainable shall be deemed to have been attained and shall
be multiplied by the recipient's compensation for calendar
year 1998. The amount determined by the prior sentence shall
be divided by three, and the result shall then be paid to
the recipient as soon as practicable after the later of (a)
December 31, 1998 or (b) the closing of the transactions
contemplated by the Merger Agreement.
(ii) Each recipient shall be granted a new Award with
performance criteria established in connection therewith for
the period commencing January 1, 1999 and ending December
31, 2000, which performance criteria shall reflect the
transactions contemplated by the Merger Agreement.
(iii) Except as provided in subsections (i) and (ii)
above, no other
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payment shall be made for the Original 1998 Awards.
The amendment set forth herein shall be effective immediately, but only with
respect to those individuals who consent in writing to such amendment, or who
first become a Participant in the Plan subsequent to the date hereof.
Notwithstanding the foregoing sentence, if the transactions contemplated by the
Merger Agreement do not close, then the amendment set forth herein shall become
null and void.
To record the adoption of this amendment, First Hawaiian, Inc. has executed this
document this 5/th/ day of May, 1998.
FIRST HAWAIIAN, INC.
By /s/ Herbert E. Wolff
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Its Senior Vice President and
Secretary
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RESOLUTIONS OF EXECUTIVE COMPENSATION COMMITTEE
OF
BANCWEST CORPORATION
Re: Long-Term Incentive Plan
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WHEREAS, this Committee wishes, subject to the approval of the Board of
Directors of BancWest Corporation, to amend the BancWest Corporation Long-Term
Incentive Plan (hereinafter the "Plan");
NOW, THEREFORE, BE IT
RESOLVED, that the Committee hereby amends the Plan as set forth in Exhibit
I attached hereto.
RESOLVED, FURTHER, that any officer of BancWest Corporation is hereby
authorized, directed, and ordered to take such other action as he may deem
necessary or proper in order to consummate the matters authorized in these
resolutions.
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RESOLUTIONS OF BOARD OF DIRECTORS
OF
BANCWEST CORPORATION
Re: Long-Term Incentive Plan
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WHEREAS, this Board wishes to approve an amendment to the BancWest
Corporation Long-Term Incentive Plan (hereinafter the "Plan");
NOW, THEREFORE, BE IT
RESOLVED, that the Board hereby approves the amendment to the Plan as set
forth in Exhibit I attached hereto.
RESOLVED, FURTHER, that any officer of BancWest Corporation is hereby
authorized, directed, and ordered to take such other action as he may deem
necessary or proper in order to consummate the matters authorized in these
resolutions.
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Exhibit 1
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AMENDMENT NO. 3 TO
BANCWEST CORPORATION
LONG-TERM INCENTIVE PLAN
In accordance with Section 9.1 of the BancWest Corporation Long-Term
Incentive Plan (hereinafter the "Plan"), the Plan is hereby amended in the
following respects:
1. Section 5.1 of the Plan is hereby amended to read in its entirety as
follows:
5.1 Grant of Awards. Subject to the terms of the Plan, Awards may be
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granted to eligible Employees at any time and from time to time, as
shall be determined by the Committee. Subject to the terms of the
Plan, the Committee shall have complete discretion in determining the
target amount (expressed as a percentage of the Participant's average
annual base salary during the Performance Period) of the Award granted
to each Participant. Average annual base salary shall be computed for
each Participant by averaging the annualized base salary in effect on
the last calendar day of each year of the Performance Period following
the determination of that Participant's target amount.
2. Section 5.2 of the Plan is hereby amended to read in its entirety as
follows:
5.2 Awards.
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(a) Value of Awards. For each Performance Period, the Committee
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shall establish in writing one or more objective performance
goals that shall modify the target amount of Awards to determine
the Award value that becomes payable to Participants. The
performance goals shall state, in terms of an objective formula
or standard, the method for computing the amount of the Award
payable to each Participant upon attainment of the goals. The
formula or standard shall specify the individual employees or the
class of employees to which it applies. There shall be no
discretion under the objective formula or standard to increase
the amount of compensation that would otherwise be due upon
attainment of any performance goal. However, the Committee shall
have discretion prior to payment of any Award to reduce the
amount of the Award derived from the formula or standard. In the
case of Awards intended to satisfy the deductibility requirements
of
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Section 162(m) of the Internal Revenue Code, the performance
goals shall be established within the first 90 days of the
Performance Period (or any shorter period required by applicable
regulations).
(b) Performance Periods. The time period during which the
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performance goals apply shall be called a "Performance Period."
Performance Periods shall, in all cases, exceed six months in
length.
(c) Performance Goals. The performance goals for Awards shall
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consist of objective criteria based on one or more of the
following: net income, net income before taxes, operating
earnings, cash earnings, operating cash earnings, financial
return ratios (including return on average total assets, return
on tangible total assets, return on average stockholders' equity,
return on average tangible stockholders' equity, average
stockholders' equity to average total assets, risk-adjusted
return on capital, economic value added, efficiency ratio,
expense ratio, revenue growth, noninterest income to total
revenue ratio, and net interest margin), total stockholder
return, earnings per share, cash earnings per share, diluted
earnings per share, diluted cash earnings per share, and stock
price.
Performance goals may be measured (i) solely on a corporate,
subsidiary, or business unit basis or a combination thereof
and/or (ii) on actual or targeted growth factors. Performance
goals may reflect absolute entity performance or a relative
comparison of entity performance to the performance of a peer
group of entities or other external measure of the selected
performance goals. The formula for any Award may include or
exclude items that measure specific objectives, such as the
cumulative effect of changes in generally accepted accounting
principles, losses resulting from discontinued operations,
securities gains and losses, restructuring, merger-related and
other nonrecurring costs, amortization of goodwill and intangible
assets, extraordinary gains or losses, and any unusual,
nonrecurring gain or loss that is separately quantified in the
Corporation's financial statements. In addition, any performance
measure expressed on a per-share basis shall, in case of a
recapitalization, stock dividend, stock split or reverse stock
split affecting the number of outstanding shares, be
mathematically adjusted so that the change in outstanding shares
does not cause a substantive change in the relevant goal.
-2-
(d) Maximum Payout. The maximum payout to any Participant with
--------------
respect to an Award for any Performance Period shall be
$3,000,000.
The amendments set forth herein shall be for Performance Periods commencing
on or after January 1, 2000.
TO RECORD the adoption of these amendments, BancWest Corporation has
executed this document this 16/th/ day of March, 2000.
FIRST HAWAIIAN, INC.
By /s/ Herbert E. Wolff
--------------------
Its Senior Vice President and
Secretary
-3-
ANNUAL MEETING OF STOCKHOLDERS
BANCWEST CORPORATION
April 19, 2001
TO VOTE BY MAIL
- ---------------
Please date, sign and mail your proxy card in the envelope provided as soon as
possible.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
- --------------------------------------------
Please call toll-free 1-800-PROXIES and follow the instructions. Have your
control number and the proxy card available when you call.
TO VOTE BY INTERNET
- -------------------
Please access the web page at "www.voteproxy.com" and follow the on-screen
instructions. Have your control number available when you access the web page.
YOUR CONTROL NUMBER IS YOUR PROXY FORM
PROXY-
-----------------------
- Please Detach and Mail in the Envelope Provided -
- --------------------------------------------------------------------------------
A [X]Please mark your
votes as in this example.
Nominees: Dr. Julia Ann Frohlich
FOR Bert T. Kobayashi, Jr.
all nominees WITHHOLD Fred C. Weyand
listed at right AUTHORITY Robert C. Wo
1. ELECTION OF [_] [_]
NON-CLASS A
DIRECTORS
*(INSTRUCTIONS: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
2. Proposal to increase the number of FOR AGAINST ABSTAIN
authorized shares of Common Stock and [_] [_] [_]
of Class A Common Stock.
3. Proposal to increase the number of FOR AGAINST ABSTAIN
shares available for grants under the [_] [_] [_]
1998 Stock Incentive Plan.
4. Proposal to approve certain material FOR AGAINST ABSTAIN
terms of the Long-Term Incentive Plan, [_] [_] [_]
so as to make certain awards tax
deductible.
5. Proposal to elect PricewaterhouseCoopers FOR AGAINST ABSTAIN
LLP as the Corporation's auditor. [_] [_] [_]
This proxy will be voted as directed, but if no direction is specified, it will
be voted FOR Proposals 1 through 5.
Please mark, sign, date and return this proxy card promptly, using the enclosed
envelope.
SIGNATURE DATE SIGNATURE DATE
--------------- --------- --------------- ---------
Note: Stockholder(s) should sign above exactly as name(s) appear(s) hereon, but
minor discrepancies in such signatures will not invalidate this proxy. If
more than one stockholder, all should sign.
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF
FIRST HAWAIIAN, INC.BANCWEST CORPORATION
ANNUAL MEETING --- APRIL 16, 199819, 2001
The undersigned hereby appoints F. MATSUDA, R.F. McPHEE,DR. J.A. FROHLICH, R.A. FUHRMAN, and F.C. WEYAND,J.A.
HOAG, and each of them, each with full power of substitution, the proxies of the
undersigned to attend the Annual Meeting of Stockholders of FIRST HAWAIIAN, INC.BANCWEST CORPORATION
(the "Corporation") to be held at 9:10:30 o'clock A.M.a.m., Hawaiian StandardPacific Time, on April 16, 199819, 2001 in
the 30th floor BoardroomBank of First Hawaiian Center, 999 Bishopthe West Board Room, 25th Floor, 180 Montgomery Street, Honolulu, Hawaii,San
Francisco, California, and any adjournments thereof, and to vote at said meeting
and any adjournments thereof all shares of stock of the Corporation standing in
the name of the undersigned, as instructed on the reverse side, and in their
judgment on any other business which may properly come before said meeting:meeting.
(To Be Continued And Signed On The Other Side)
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
FIRST HAWAIIAN, INC.
April 16, 1998
Please Detach and Mail in the Envelope Provided
A [X] Please mark your
votes as in this
example.
FOR all
nominate listed WITHHOLD
at right AUTHORITY
1. ELECTION [ ] [ ] Nominee: Julia Ann Frohlich
OF John A. Hoag
DIRECTORS Bert T. Kobayashi, Jr.
*(INSTRUCTIONS: To withhold authority to vote Fred C. Weyand
for any individual nominee write that nominee's Robert C. Wo
name in the space provided below.)
- --------------------------------------------------
FOR AGAINST ABSTAIN
2. Fix the total number of Directors at fifteen. [ ] [ ] [ ]
3. Proposal to approve the 1998 Stock Incentive Plan. [ ] [ ] [ ]
4. Proposal to approve the election of Coopers & [ ] [ ] [ ]
Lybrand L.L.P. as Auditor.
This proxy will be voted as directed, but if no direction is specified, it will
be voted FOR Proposals 1, 2, 3 and 4.
SIGNATURE DATE SIGNATURE DATE
------------------ -------- ----------------- -----
IF HELD JOINTLY
NOTE: Stockholder(s) should sign above exactly as name(s) appears hereon. But
minor discrepancies in such signatures shall not invalidate their proxy; if more
than one Stockholder, all should sign.