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TABLE OF CONTENTS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 2
TO
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION
Proxy Statement Pursuant to Section 14(a) OF THE SECURITIES EXCHANGE ACT OFof
the Securities Exchange Act of 1934 FILED BY THE REGISTRANT /X/
FILED BY A PARTY OTHER THAN THE REGISTRANT / /
CHECK THE APPROPRIATE BOX:
/X/ PRELIMINARY PROXY STATEMENT
/ / CONFIDENTIAL, FOR THE USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2)(Amendment No. )
/ / DEFINITIVE PROXY STATEMENT
/ / DEFINITIVE ADDITIONAL MATERIALS
/ / SOLICITING MATERIAL PURSUANT TO RULE 14a11(c) OR 14a-12
BANCWEST CORPORATION
- --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/ / NO FEE REQUIRED.
/X/ FEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT
RULES 14a-6(i)(1) AND 0-11.
(1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION
APPLIES: COMMON STOCK, PAR VALUE $1 PER SHARE, AND CLASS A
COMMON STOCK, PAR VALUE $1 PER SHARE, OF BANCWEST CORPORATION
(2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION
APPLIES: 68,696,529 SHARES OF BANCWEST COMMON STOCK, OPTIONS TO
PURCHASE 5,145,318 SHARES OF BANCWEST COMMON STOCK AND
56,074,874 SHARES OF BANCWEST CLASS A COMMON STOCK
(3) PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION
COMPUTED PURSUANT TO EXCHANGE ACT RULE 0-11 (SET FORTH THE
AMOUNT ON WHICH THE FILING FEE IS CALCULATED AND STATE HOW IT
WAS DETERMINED):
THE TRANSACTION VALUATION WAS BASED UPON THE SUM OF
(i) THE PRODUCT OF 68,696,529 SHARES OF BANCWEST
COMMON STOCK AT A PRICE OF $35 PER SHARE IN CASH AND
(ii) A CASH-OUT OF 5,145,318 SHARES OF BANCWEST COMMON
STOCK COVERED BY OUTSTANDING OPTIONS AT AN AGGREGATE
COST OF $86,646,407.
(4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:
$2,491,024,922
(5) TOTAL FEE PAID:
$498,205
/X/ FEE PAID PREVIOUSLY WITH PRELIMINARY MATERIALS.
$498,205
/ / CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS
PROVIDED BY EXCHANGE ACT RULE 0-11(a)(2) AND IDENTIFY
THE FILING FOR WHICH THE OFFSETTING FEE WAS PAID
PREVIOUSLY. IDENTIFY THE PREVIOUS FILING BY
REGISTRATION STATEMENT NUMBER, OR THE FORM OR
SCHEDULE AND THE DATE OF ITS FILING.
(1) AMOUNT PREVIOUSLY PAID: N/A
(2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.: N/A
(3) FILING PARTY: N/A
(4) DATE FILED: N/A
2
[BANCWEST CORPORATION LOGO]
| Filed by the Registrantý | ||
Filed by a Party other than the Registranto | ||
Check the appropriate box: | ||
o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
ý | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material under §240.14a-12 | |
| FIRST HAWAIIAN, INC. | ||||
(Name of Registrant as Specified In Its Charter) | ||||
N/A | ||||
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||
Payment of Filing Fee (Check the appropriate box): | ||||
ý | No fee required. | |||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
| (1) | Title of each class of securities to which transaction applies: | |||
| (2) | Aggregate number of securities to which transaction applies: | |||
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
| (4) | Proposed maximum aggregate value of transaction: | |||
| (5) | Total fee paid: | |||
o | Fee paid previously with preliminary materials. | |||
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
(1) | Amount Previously Paid: | |||
| (2) | Form, Schedule or Registration Statement No.: | |||
| (3) | Filing Party: | |||
| (4) | Date Filed: Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. | |||
March 22, 2017
Dear Stockholder:
On behalf of the Board of Directors and management of First Hawaiian, Inc., I am pleased to invite you to the 2017 Annual Meeting of Stockholders. The Annual Meeting will be held at The Bankers Club, 999 Bishop Street, 30th Floor, Honolulu, Hawaii 96813
Dear Fellow Stockholder:
As you may know, on May 8, 2001, we entered into a merger agreement with
BNP ParibasWednesday, April 26, 2017 at 8:00 a.m., local time.
The attached Notice of Annual Meeting and a subsidiary of BNP Paribas pursuant to which we will become a
wholly owned subsidiary of BNP Paribas. We called a special meeting of
stockholdersProxy Statement describe the formal business to be held on , 2001conducted at 9:00 a.m. local time, to consider a
proposal to adopt the merger agreement so that the merger can occur. The meetingAnnual Meeting. Our Board of Directors and senior officers, as well as representatives from our independent registered public accounting firm, will be held in the Board Room, 30th Floor, First Hawaiian Center, 999 Bishop
Street, Honolulu, Hawaii. Notice of the special meeting is enclosed.
In the merger, you will be entitledpresent to receive $35 in cash for each share
of common stock that you own. This price represents a 40.1% premium over the
closing price per share of $24.98 on May 4, 2001, the last trading day priorrespond to the public announcement of BNP Paribas' proposal to acquire the shares of
BancWest it does not already own, a 28.4% premium over the highest closing share
price of $27.25 prior to the public announcement of BNP Paribas' proposal and a
150% premium over the 52-week low trading price of $14.00. As of August ,
2001, the closing share price of the BancWest common stock was $ . BNP
Paribas currently owns all of our outstanding shares of Class A common stock,
representing 45% of our total outstanding voting shares. Each share of Class A
common stock will remain issued and outstanding as Class A common stock of the
surviving corporation. Since you will only have the right to receive cash in the
merger, after the merger occurs, you will no longer be a stockholder of BancWest
and BNP Paribas will be the sole stockholder of BancWest.
Based on the number of shares of common stock and the number of options to
purchase common stock outstanding as of July 27, 2001, the aggregate cash
consideration to be paid by BNP Paribas in the merger is approximately
$2,489,826,000.
The receipt of cash in exchange for your shares of common stock in the
merger will constitute a taxable transaction for U.S. federal income tax
purposes. Please read this proxy statement carefully regarding the tax
consequences of the merger.
This proxy statement gives you detailed information about the special
meeting, the merger agreement and the merger and includes the merger agreement
as Annex A. We encourage you to read the proxy statement and the merger
agreement carefully. In particular, please note that if the merger agreement is
terminated under specified circumstances, BancWest may be required to pay BNP
Paribas a termination fee of $100 million.
Our board of directors formed a special committee, consisting solely of
directors who are neither officers of BancWest nor affiliated with BNP Paribas,
to consider and evaluate the merger. The special committee unanimously
recommended to our board of directors that the merger agreement be approved. In
connection with its evaluation of the merger, the special committee engaged
Goldman, Sachs & Co. to act as its financial advisor. Goldman Sachs has rendered
its opinion stating that, as of the date of the opinion and based upon and
subject to the assumptions, limitations and qualifications set forth in the
opinion, the merger consideration of $35 in cash per share of common stock is
fairappropriate questions from a financial point of view to our unaffiliated stockholders. The
Goldman Sachs opinion is not a recommendation as to how any holder of shares of
BancWest common stock should vote with respect to the merger. The written
opinion of Goldman Sachs is attached as Annex B to this proxy statement, and you
should read it carefully.
Our board of directors, based on the unanimous recommendation of the
special committee, has, by the unanimous vote of directors not elected by BNP
Paribas, approved and declared the advisability of the merger agreement, and has
determined that the merger agreement and the merger are fair to and in the best
interests of BancWest and our unaffiliated stockholders. Our board of directors,
by the unanimous vote of directors not
3
elected by BNP Paribas, recommends that you vote "FOR" adoption of the merger
agreement. When you consider the recommendation of our board of directors to
adopt the merger agreement, you should be aware that some of our directors have
interests in the merger that may be different than the interests of our
stockholders generally. In particular, four of our directors are executive
officers of BancWest and these executive officers will be entitled to receive
payments for all of their options of approximately $42.4 million and payments
under long term incentive plan awards of approximately $8.9 million in
connection with the merger.
Your vote is important. We cannot complete the merger unless holders of at
least two-thirds of the outstanding common stock and Class A common stock,
voting together as a single class, vote to adopt the merger agreement. As of the
record date for the special meeting, BNP Paribas, our directors and executive
officers and the Estate of S.M. Damon owned or controlled a total of 72,876,433
voting shares, which is approximately 58.4% of all outstanding shares. BNP
Paribas has agreed to vote in favor of the merger and we also expect our
directors and executive officers and the Damon Estate to vote for the
transaction. If that occurs, we will need affirmative votes from approximately
10,324,078 additional common shares (which is another 15% of our total common
stock and another 8.3% of our total voting shares) for the merger to occur.
Therefore, it is very important that your shares be represented at the special
meeting. Whether or not you plan to attend the special meeting, please complete, sign, date and return the enclosed proxy card in the envelope provided or vote telephonically or electronically using the telephone and Internet voting procedures described on the proxy card at your earliest convenience.
| Sincerely, | ||
 | ||
| Robert S. Harrison | ||
| Chairman and Chief Executive Officer |
FIRST HAWAIIAN, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 26, 2017
NOTICE HEREBY IS GIVEN that the 2017 Annual Meeting of Stockholders of First Hawaiian, Inc., will be held at The Bankers Club, 999 Bishop Street, 30th Floor, Honolulu, Hawaii on Wednesday, April 26, 2017, at 8:00 a.m., local time, for the purpose of considering and voting upon:
- 1.
- The election of nine directors named in this Proxy Statement to serve until the 2018 Annual Meeting of Stockholders;
- 2.
- The appointment of Deloitte & Touche LLP to serve as the independent registered public accounting firm for fiscal year 2017; and
- 3.
- Such other business as properly may come before the Annual Meeting or any adjournments or postponements thereof. The Board of Directors is not aware of any other business to be presented to a vote of the stockholders at the Annual Meeting.
The Board of Directors has fixed the close of business on March 13, 2017 as the record date for determining the stockholders entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof.
A list of stockholders entitled to vote at the 2017 Annual Meeting will be available for inspection upon request of any stockholder for a purpose germane to the meeting at our principal executive offices at 999 Bishop St., 29th Floor, Honolulu, Hawaii 96813, during the ten days prior to the meeting, during ordinary business hours, and at The Bankers Club, 999 Bishop Street, 30th Floor, Honolulu, Hawaii, during the meeting.
If you hold your shares of common stock through a broker or nominee and you plan to attend the 2017 Annual Meeting, you will need to bring either a copy of the voting instruction card provided by your broker or nominee or a copy of a brokerage statement showing your ownership as of March 13, 2017.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE SUBMIT YOUR PROXY WITH VOTING INSTRUCTIONS. YOU MAY VOTE BY TELEPHONE OR INTERNET (BY FOLLOWING THE INSTRUCTIONS ON THE PROXY CARD) OR BY MAIL.
| By order of the Board of Directors, | ||
 | ||
| Joel E. Rappoport | ||
| Executive Vice President, General Counsel and Secretary |
Honolulu, Hawaii
March 22, 2017
| Page | ||||
|---|---|---|---|---|
About the Meeting | 2 | |||
Proposal No. 1—Election of Directors | 6 | |||
Directors and Executive Officers | 8 | |||
Board of Directors, Committees and Governance | 14 | |||
Security Ownership of Certain Beneficial Owners, Directors and Management | 22 | |||
Executive Compensation | 24 | |||
Director Compensation | 34 | |||
Our Relationship with BNPP and Certain Other Related Party Transactions | 36 | |||
Section 16(a) Beneficial Ownership Reporting Compliance | 49 | |||
Audit Committee Report | 49 | |||
Principal Accountant Fees | 50 | |||
Proposal No. 2—Ratification of Independent Registered Public Accounting Firm | 51 | |||
Other Business | 51 | |||
Stockholder Proposals for the 2018 Annual Meeting | 51 | |||
Distribution of Certain Documents | 53 | |||
i
FIRST HAWAIIAN, INC.
999 Bishop St., 29th Floor
Honolulu, Hawaii 96813
PROXY STATEMENT
FOR THE 2017 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY, APRIL 26, 2017
These proxy materials are furnished in connection with the solicitation by the board of directors (the "Board" or our "Board") of First Hawaiian, Inc. ("First Hawaiian" or the "Company"), a Delaware corporation, of proxies to be voted at the 2017 Annual Meeting of Stockholders of the Company and at any adjournment of such meeting (the "Annual Meeting"). This Proxy Statement (this "Proxy Statement"), together with the Notice of Annual Meeting and proxy card, is first being mailed to stockholders on or about March 22, 2017.
The Company completed the initial public offering of shares of its common stock (the "IPO") in August 2016 and is a publicly traded bank holding company with its shares listed on the NASDAQ Global Select Market ("NASDAQ") under the ticker symbol "FHB." Prior to the IPO, the Company was a wholly-owned indirect subsidiary of BNP Paribas ("BNPP"), a financial institution based in France. BNPP undertook a series of transactions (the "Reorganization Transactions") in the months prior to the IPO in order to effect the IPO and comply with certain regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve"). Following the IPO and the secondary offering of the Company's common stock completed on February 6, 2017 (including the full exercise of the underwriters' option to purchase additional shares of common stock completed on February 17, 2017) in which, collectively, BNPP sold 53,000,000 shares of our common stock, BNPP continues to own approximately 62.0% of the Company's common stock. BNPP exercises considerable control over the Company as a controlling stockholder and pursuant to a Stockholder Agreement between the Company and BNPP entered into in connection with the IPO (the "Stockholder Agreement"). The Company owns 100% of the outstanding common stock of First Hawaiian Bank ("FHB" or the "Bank").
When used in this Proxy Statement, the terms "First Hawaiian," "FHI," "we," "our," "us" and the "Company" refer to First Hawaiian, Inc., a Delaware corporation, and its consolidated subsidiaries, which include only First Hawaiian Bank and its subsidiaries, and the term "fiscal year" refers to our fiscal year, which is based on a 12-month period ending December 31 of each year (e.g., fiscal year 2016 refers to the 12-month period ended December 31, 2016).
When and where is the Annual Meeting?
The Annual Meeting will be held on Wednesday, April 26, 2017 at 8:00 a.m., local time, at The Bankers Club, 999 Bishop Street, 30th Floor, Honolulu, Hawaii.
What is the purpose of the Annual Meeting?
At the Annual Meeting, stockholders will act upon the matters described in the Notice of Annual Meeting that accompanies this Proxy Statement, including the election of nine nominees for director named in this Proxy Statement and the ratification of the appointment by the Audit Committee of the Board of Deloitte & Touche LLP as the Company's independent registered public accounting firm for fiscal year 2017.
Who may vote at the Annual Meeting?
Only record holders of our common stock, par value $0.01 per share (our "common stock"), as of the close of business on March 13, 2017 (the "Record Date"), will be entitled to vote at the Annual meeting. On the Record Date, the Company had outstanding 139,546,615 shares of common stock. Each outstanding share of common stock entitles the holder to one vote.
What constitutes a quorum?
The Annual Meeting will be held only if a quorum is present. A quorum will be present if the holders of a majority of the shares of common stock outstanding on the Record Date and entitled to vote on a matter at the Annual Meeting are represented, in person or by proxy, at the Annual Meeting. Shares represented by properly completed proxy cards either marked "abstain" or "withhold," or returned without voting instructions are counted as present and entitled to vote for the purpose of determining whether a quorum is present at the Annual Meeting. If shares are held by brokers who are prohibited from exercising discretionary authority for beneficial owners who have not given voting instructions ("broker non-votes"), those shares will not be counted as represented at the Annual Meeting for the purpose of determining whether a quorum is present at the Annual Meeting.
How are votes counted?
Stockholder Voting Generally
Each stockholder entitled to vote at the Annual Meeting will be entitled to one vote for each share of stock held by such stockholder as of the Record Date, which has voting power upon the matter in question.
Shares of capital stock of the Company (i) belonging to the Company or (ii) held by another corporation if the Company owns, directly or indirectly, a sufficient number of shares entitled to elect a majority of the directors of such other corporation, are not counted in determining the total number of outstanding shares and will not be not voted. Notwithstanding the foregoing, shares held by the Company in a fiduciary capacity are counted in determining the total number of outstanding shares at any given time and may be voted.
Proposal 1: Election of Directors
A plurality of the votes cast for their election is required for the election of each of the nine nominees for director. This means that the nine nominees receiving the highest number of votes will be elected regardless of whether the number of votes received by any such nominee constitutes a majority
of the number of votes cast. Abstentions, votes to withhold and broker non-votes will not be counted for purposes of this proposal and will not affect the result of the vote.
Proposal 2: Ratification of the Appointment of Deloitte & Touche LLP
The affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on Proposal 2 is required for the ratification of the appointment of our independent registered public accounting firm. Abstentions will have the effect of voting against this proposal.
How do I submit my vote?
If you are a stockholder of record, you can vote by:
- •
- attending the Annual Meeting and voting by ballot;
- •
- signing, dating and mailing in your proxy card;
- •
- using your telephone, according to the instructions on your proxy card; or
- •
- visiting http://www.voteproxy.com and then following the instructions on the screen.
What do I do if I hold my shares through a broker, bank or other nominee?
If you hold your shares through a broker, bank or other nominee, that institution will instruct you as to how your shares may be voted by proxy, including whether telephone or Internet voting options are available.
How do I attend the Annual Meeting and vote in person, and what do I need to bring?
All stockholders who attend the Annual Meeting in person will be asked to check-in at the registration desk prior to admittance to the meeting. Stockholders who own Company stock through a broker, or other nominee, will need to bring an account statement as proof of ownership along with photo identification. No cameras or recording equipment will be permitted in the Annual Meeting, and all cell phones must be turned off. If you hold your shares through a broker, bank or other nominee and would like to vote in person at the Annual Meeting, you will need to ask the holder for a legal proxy. You will need to bring the legal proxy with you to the Annual Meeting and turn it in with a signed ballot that will be provided to you at the Annual Meeting.
Can I change or revoke my vote after I return my proxy card?
Yes. If you are a stockholder of record, you may change your vote by:
- •
- voting in person by ballot at the Annual Meeting;
- •
- returning a later-dated proxy card;
- •
- entering a new vote by telephone or on the Internet; or
- •
- delivering written notice of revocation to our Corporate Secretary by mail at 999 Bishop St., 29th Floor, Honolulu, Hawaii 96813.
Who will count the votes?
Joel E. Rappoport, Executive Vice President, General Counsel, and Secretary of First Hawaiian, will act as inspector of election at the Annual Meeting and will count the votes.
Will my vote be kept confidential?
Yes. As a matter of policy, stockholder proxies, ballots and tabulations that identify individual stockholders are kept secret and are available only to the Company and its inspectors, who are required to acknowledge their obligation to keep your votes confidential.
Who pays to prepare, mail and solicit the proxies?
The Company pays all of the costs of preparing, mailing and soliciting proxies in connection with this Proxy Statement. In addition to soliciting proxies through the mail by means of this Proxy Statement, we may solicit proxies through our directors, officers and employees in person and by telephone, facsimile or email. The Company asks brokers, banks, voting trustees and other nominees and fiduciaries to forward proxy materials to the beneficial owners and to obtain authority to execute proxies. The Company will reimburse the brokers, banks, voting trustees and other nominees and fiduciaries upon request. In addition to solicitation by mail, telephone, facsimile, email or personal contact by its directors, officers and employees, the Company has retained the services of D. F. King & Co., Inc., 40 Wall Street, New York, NY 10005, to solicit proxies for a fee of $7,500 plus expenses.
What are the Board's recommendations as to how I should vote on each proposal?
The Board recommends a vote:
- •
- FOR the election of each of the nine director nominees named in this Proxy Statement; and
- •
- FOR the ratification of the Audit Committee's appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm for fiscal year 2017.
How will my shares be voted if I sign, date and return my proxy card?
If you sign, date and return your proxy card and indicate how you would like your shares voted, your shares will be voted as you have instructed. If you sign, date and return your proxy card but do not indicate how you would like your shares voted, your proxy will be voted:
- •
- FOR the election of each of the nine director nominees named in this Proxy Statement; and
- •
- FOR the ratification of the Audit Committee's appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm for fiscal year 2017.
With respect to any other business that may properly come before the Annual Meeting, or any adjournment of the Annual Meeting, that is submitted to a vote of the stockholders, including whether or not to adjourn the Annual Meeting, your shares will be voted in accordance with the best judgment of the persons voting the proxies.
How will broker non-votes be treated?
A broker non-vote occurs when a broker who holds its customer's shares in street name submits proxies for such shares, but indicates that it does not have authority to vote on a particular matter. Generally, this occurs when brokers have not received any instructions from their customers. In these cases, the brokers, as the holders of record, are permitted to vote on "routine" matters only, but not on other matters. Shares for which brokers have not received instructions from their customers will only be permitted to vote on the following proposal:
- •
- The ratification of the Audit Committee's appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm for fiscal year 2017.
Shares for which brokers have not received instructions from their customers will not be permitted to vote on the following proposal:
- •
- To elect the nine director nominees named in this Proxy Statement.
What if other matters come up during the Annual Meeting?
If any matters other than those referred to in the Notice of Annual Meeting properly come before the Annual Meeting, the individuals named in the accompanying proxy card will vote the proxies held by them in accordance with their best judgment. First Hawaiian is not aware of any business other than the items referred to in the Notice of Annual Meeting that will be considered at the Annual Meeting.
Your vote is important.
Because many stockholders cannot personally attend the Annual Meeting, it is necessary that a large number be represented by proxy in order to satisfy that a quorum be present to conduct business at the Annual Meeting. Whether or not you plan to attend the meeting in person, prompt voting will be appreciated. Stockholders of record can vote their shares via the Internet or by using a toll-free telephone number. Instructions for using these convenient services are provided on the proxy card. Of course, you may still vote your shares on the proxy card. To do so, we ask that you complete, sign, date and return the enclosed proxy card promptly in the enclosed prepaidpostage-paid envelope. Failure
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Stockholders to return a properly executed proxy card orBe Held on April 26, 2017:
This Proxy Statement and our 2016 Annual Report to voteStockholders Are Available Free of Charge at:
http://proxy.fhb.com.
PROPOSAL NO. 1—ELECTION OF DIRECTORS
Board of Directors
Our Board currently has nine members, consisting of our Chief Executive Officer, five directors designated for nomination and election by BNPP and three other directors who are "independent" under the listing standards of NASDAQ. The terms of office of all directors expire at the Annual Meeting.
Our Amended and Restated Bylaws provide that the Board will consist of no less than five directors and that there initially will be nine directors. Pursuant to our Certificate of Incorporation and the Stockholder Agreement, the number of directors constituting our Board will be fixed from time to time by resolution of the Board; provided that, until the date BNPP ceases to directly or indirectly beneficially own at least 25% of our outstanding common stock, we cannot change the size of our Board without either the approval of a majority of the BNPP designated directors on the Board at the time of such action or BNPP's waiver of its rights under the Stockholder Agreement.
Until the date BNPP ceases to beneficially own at least 5% of our common stock, in connection with any meeting of our stockholders at which directors are to be elected, the Stockholder Agreement provides BNPP the right to designate a number of individuals for nomination and election to our Board determined by a formula described in the agreement. BNPP currently has the right to designate five individuals for nomination and election to our Board. We are required to recommend and solicit proxies in favor of, and to otherwise use our best efforts to cause the election of, each person designated by BNPP whose nomination has been approved. For background on our relationship with BNPP and the Stockholder Agreement, see "Related Party Transactions—Relationship with BNPP."
Nominees for Election as Directors at the 2017 Annual Meeting
The Corporate Governance and Nominating Committee of the Board seeks candidates for nomination to the Board who are qualified to be directors consistent with the Company's corporate governance guidelines, as described below under the section entitled "Board of Directors Committees and Governance—Corporate Governance Guidelines." In nominating candidates, the Governance Committee takes into account many factors. Those factors include: whether the individual may meet various independence requirements, the individual's general understanding of the varied disciplines relevant to the success of a publicly traded company in today's business environment; understanding of the Company's business and markets; professional expertise and educational background; and other factors that promote diversity of views and experience. The Governance Committee evaluates each individual in the context of the Board as a whole, with the objective of recruiting and recommending a slate of directors that can best perpetuate the Company's success and represent stockholder interests through the exercise of sound judgment, using its diversity of experience. In determining whether to recommend a director for re-nomination, the Governance Committee also considers the director's attendance at, participation in, and contributions to Board and committee activities.
On the recommendation of the Governance Committee, the Board has determined that the size of the Board is currently appropriate and has nominated all nine current members of the Board for re-election as directors at the Annual Meeting, each to serve for a one-year term expiring at the next annual meeting of stockholders in 2018.
The following table sets forth certain information regarding the director nominees standing for re-election at the Annual Meeting. Additional biographical information on each of the nominees is included below under the section entitled "Directors and Executive Officers."
Director Name | Age | Director Since | Principal Occupation | ||||
|---|---|---|---|---|---|---|---|
Robert S. Harrison | 56 | 2016 | Chairman and Chief Executive Officer of First Hawaiian | ||||
Matthew Cox | 55 | 2016 | President and Chief Executive Officer of Matson, Inc. | ||||
W. Allen Doane | 69 | 2016 | Retired Chairman and Chief Executive Officer of Alexander & Baldwin, Inc. | ||||
Thibault Fulconis | 51 | 2016 | Chief Operating Officer and Vice Chairman of Bank of the West, Vice Chairman of BancWest Corporation | ||||
Gérard Gil | 67 | 2016 | Senior finance and accounting advisor to BNPP | ||||
Jean-Milan Givadinovitch | 61 | 2016 | Executive Vice President of Bank of the West | ||||
J. Michael Shepherd | 61 | 2016 | Chairman of BNP Paribas USA, Inc., BancWest Corporation and Bank of the West | ||||
Allen B. Uyeda | 67 | 2016 | Retired Chief Executive Officer of First Insurance Company of Hawaii | ||||
Michel Vial | 59 | 2016 | Head of Group Strategy and Development of BNPP | ||||
In considering the nominees' individual experience, qualifications, attributes, skills and past Board participation, the Governance Committee and the Board have concluded that when considered all together, the appropriate experience, qualifications, attributes, skills and participation are represented for the Board as a whole and for each of the Board's committees. There are no family relationships among any directors and executive officers. Each nominee has indicated a willingness to serve, and the Board has no reason to believe that any of the nominees will not be available for election. However, if any of the nominees is not available for election, proxies may be voted for the election of other persons selected by the Board. Proxies cannot, however, be voted for a greater number of persons than the number of nominees named. Stockholders of the Company have no cumulative voting rights with respect to the election of directors.
Required Vote
With regard to the election of the director nominees, votes may be cast in favor or withheld. The nominees receiving the greatest number of affirmative votes cast at the Annual Meeting will be elected directors; therefore, abstentions, votes withheld and broker non-votes will have no effect on the results of the vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR NAMED ABOVE.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information regarding each of our directors and executive officers.
Name | Age | Position | |||
|---|---|---|---|---|---|
Robert S. Harrison | 56 | Chairman of the Board of Directors and Chief Executive Officer | |||
Matthew Cox | 55 | Director | |||
W. Allen Doane | 69 | Director | |||
Thibault Fulconis | 51 | Director | |||
Gérard Gil | 67 | Director | |||
Jean-Milan Givadinovitch | 61 | Director | |||
J. Michael Shepherd | 61 | Director | |||
Allen B. Uyeda | 67 | Director | |||
Michel Vial | 59 | Director | |||
Eric K. Yeaman | 49 | President and Chief Operating Officer | |||
Alan H. Arizumi | 57 | Vice Chairman of Wealth Management and Consumer Banking | |||
Robert T. Fujioka | 65 | Vice Chairman and Chief Lending Officer | |||
Michael Ching | 45 | Executive Vice President, Chief Financial Officer and Treasurer | |||
Ralph M. Mesick | 57 | Executive Vice President and Chief Risk Officer | |||
A brief biography of each person who serves as a director or executive officer of our First Hawaiian is set forth below:
Robert S. Harrison, the Chairman and Chief Executive Officer of First Hawaiian, has been the Chief Executive Officer of First Hawaiian Bank since January 2012 and the Chairman of the Bank's board of directors since May 2014. Mr. Harrison served as the Chief Operating Officer of First Hawaiian Bank from December 2009 to January 2012 and as its President from December 2009 to June 2015. He was named Vice Chairman of First Hawaiian Bank in 2007 and served as the Bank's Chief Risk Officer from 2006 to 2009. Mr. Harrison joined First Hawaiian Bank's Retail Banking group in 1996 and has over 28 years of experience in the financial services industry in Hawaii and on the U.S. mainland. Prior to the Reorganization Transactions, Mr. Harrison served as Vice Chairman of BancWest. Following the completion of the Reorganization Transactions, Mr. Harrison continues to serve as Vice Chairman of BancWest Corporation. Mr. Harrison serves on the board of Alexander & Baldwin, Inc., a Hawaii publicly traded company with interests in, among other things, commercial real estate and real estate development. He also serves as the Chairman of Hawaii Medical Service Association and is the President of the Hawaii Bankers Association. He is a member of the boards of Hawaii Community Foundation, Hawaii Business Roundtable and Blood Bank of Hawaii. Mr. Harrison holds a bachelor's degree in applied mathematics from the University of California, Los Angeles and an M.B.A. from Cornell University.
Mr. Harrison's qualifications to serve on the Board include his operating, management and leadership experience as First Hawaiian Bank's Chairman and Chief Executive Officer, as well as his prior experience as First Hawaiian Bank's President and Chief Operating Officer and as its Chief Risk Officer. Mr. Harrison has extensive knowledge of, and has made significant contributions to, the growth of First Hawaiian and First Hawaiian Bank. Mr. Harrison also brings to First Hawaiian's Board his expertise in the financial services industry generally and in Hawaii in particular.
Matthew Cox, a member of the Board and both the Audit and Compensation Committees of First Hawaiian, has served on the First Hawaiian Bank board of directors since 2014. He has been President
and Chief Executive Officer of Matson, Inc., a public company and leading carrier for ocean transportation services in the Pacific, since 2012, having previously served as President, Chief Operating Officer and Chief Financial Officer. Mr. Cox brings to the Board of First Hawaiian extensive experience in supervising and performing company financial functions. Prior to joining Matson, Inc. in 2001, he served as Chief Operating Officer and Chief Financial Officer for Distribution Dynamics, Inc., a provider of outsourced logistics, inventory management and integrated information services that is now a division of Anixter Industries, a Fortune 500 public company. Mr. Cox also previously held executive and financial positions with American President Lines, Ltd., a global container transportation company. Mr. Cox serves on the board and the audit committee of the Standard Club, the board of Gallo Glass Company, a subsidiary of Gallo, Inc. and the advisory boards of Catholic Charities of Hawaii and the University of Hawaii Shidler College of Business, and, from 2008 to 2012, he served on the board of the Pacific Maritime Association. Mr. Cox holds a bachelor's degree in accounting and finance from the University of California, Berkeley.
W. Allen Doane, a member of the Board and the Risk Committee and the chair of the Audit Committee of First Hawaiian, has served on the board of First Hawaiian Bank since 1999 and the board of BancWest from 2004 to 2006 and since 2012, and he has been the chairman of the First Hawaiian Bank audit committee since 2012. As retired Chairman and Chief Executive Officer of Alexander & Baldwin, Inc., a Hawaii public company with interests in, among other things, commercial real estate and real estate development, Mr. Doane brings to the First Hawaiian Board broad-based knowledge about Hawaii and its business environment, as well as extensive financial and managerial experience. Mr. Doane served as Chief Executive Officer of Alexander & Baldwin, Inc. from 1998 until his retirement in 2010. Prior to joining Alexander & Baldwin, Inc. in 1991, Mr. Doane served as Chief Operating Officer of Shidler Group, a real estate investment organization. He also held executive positions at IU International Corporation, a Philadelphia-based public company, and C. Brewer & Co., Ltd., one of Hawaii's oldest operating companies, which has since been dissolved. He currently serves on the board and audit committee of Alexander & Baldwin, Inc. and on the board and audit committee of Pacific Guardian Life Insurance Company, the largest domestic life and disability insurer in Hawaii. Mr. Doane holds a bachelor's degree from Brigham Young University and an M.B.A. from Harvard Business School.
Thibault Fulconis, a member of the Board and the Risk Committee of First Hawaiian, has served as Chief Operating Officer and Vice Chairman of Corporate Functions at Bank of the West since 2015 and as Vice Chairman at BancWest since 2012. Previously, Mr. Fulconis was Chief Financial Officer and Treasurer of BancWest from 2006 to 2012. He brings to the First Hawaiian Board extensive experience in the financial services industry, having held numerous other senior management positions, including Head of Finance and Development for BNPP's International Retail and Financial Services Division from 2003 to 2006, Head of Financial Management at BNPP from 1995 to 2003, Senior Corporate Banking Officer at Banque Paribas Luxembourg from 1992 to 1995 and Head of Management Accounting at Banque Paribas Luxembourg from 1989 to 1992. Mr. Fulconis also served as a business analyst in the mergers and acquisitions division of Booz Allen Hamilton in Paris from 1988 to 1989. Mr. Fulconis graduated from the business school at Ecole des Hautes Etudes Commerciales with a major in finance. Mr. Fulconis was nominated to First Hawaiian's Board by BNPP consistent with its rights under the Stockholder Agreement.
Gérard Gil, a member of the Board and the chair of both the Compensation and Corporate Governance and Nominating Committees of First Hawaiian, has been Senior Advisor to BNPP's executive committee since 2012. Mr. Gil brings to the First Hawaiian Board extensive experience in financial reporting and accounting, as he was Deputy Chief Financial Officer of BNPP from 2009 to 2011 and Group Chief Accounting Officer of BNPP from 1999 to 2009, supervising BNPP's accounting department from its creation. Before joining BNPP, he served as Group Chief Accounting Officer with Banque Nationale de Paris from 1985 to 1999, during which time he developed accounting and internal
control policies and oversaw group financial and regulatory reporting. Mr. Gil previously held positions with Banque Française du Commerce Extérieur and KPMG. He was Chairman of the accounting committee of the French Banking Association from 1998 to 2016 and of the accounting committee of the European Banking Federation from 2006 to 2011. Mr. Gil serves on the audit and finance committees of CLS Group Holdings AG, Zurich and CLS International, NY, on the audit committee of Banco BNP Paribas Brazil, as a board member of the French High Council for Statutory Auditors and as a member of the audit committee of BNP Paribas USA, Inc., New York, New York. He also chairs the audit committee of BNP Paribas US Wholesale Holdings, Corp. He also served on the audit committee of BGL BNP Paribas, Luxembourg from 2012 to 2015. Mr. Gil graduated from the business school of École Supérieure de Commerce de Paris and holds a graduate degree in accounting. Mr. Gil was nominated to First Hawaiian's Board by BNPP consistent with its rights under the Stockholder Agreement.
Jean-Milan Givadinovitch, a member of the Board and the Risk Committee of First Hawaiian, has been Executive Vice President of Bank of the West and Head of its Business Compliance Project Office since January 2016. Mr. Givadinovitch brings to the First Hawaiian Board extensive experience in overseeing audit functions and risk management in the banking industry. He previously was Director of Audit and Inspection at Bank of the West from 2002 to 2008, and prior to joining Bank of the West, he held positions at Turk Ekonomi Bankasi ("TEB"), a commercial bank in Turkey that is owned more than 70% by BNPP. From 2009 to 2015, he served on the board of TEB Investment, a TEB brokerage firm. From 2010 to 2015, Mr. Givadinovitch served on the board of TEB, as chairman of TEB's audit committee and as vice-chairman of its credit committee. During this time, he also served on the board of TEB N.V. (Netherlands), a bank specialized in commodity financing, the board of TEB Asset Management and the board of TEB Factoring, an affiliate of TEB that renders factoring services, where he served as chairman of the audit committee as well. From 2008 to 2010, Mr. Givadinovitch served as Chief Risk Officer of TEB and headed the working groups on risks and recovery during TEB's merger with Fortis Turkey. Mr. Givadinovitch holds a bachelor's degree in public administration from the Paris Institute of Political Studies and an M.B.A. from HEC—Business School. Mr. Givadinovitch was nominated to First Hawaiian's Board by BNPP consistent with its rights under the Stockholder Agreement.
J. Michael Shepherd, a member of the Board and the Corporate Governance and Nominating Committee of First Hawaiian, has served on the board of directors of each of First Hawaiian Bank, Bank of the West and BancWest since 2008, including as a member of the First Hawaiian Bank compensation committee since 2010. Mr. Shepherd brings to the First Hawaiian Board extensive legal and managerial experience as well as knowledge of the banking industry. He is Chairman of BNP Paribas USA, Inc., BancWest Corporation and Bank of the West, having served as Chairman and Chief Executive Officer of BancWest and Bank of the West from January 2008 to June 2016. Prior to 2008, Mr. Shepherd served as President, General Counsel, Chief Risk Officer and Chief Administrative Officer of Bank of the West. Before joining Bank of the West, Mr. Shepherd was General Counsel of The Bank of New York Company, Inc. from 2001 to 2004 and a partner in the San Francisco law firm Brobeck, Phleger & Harrison LLP from 1995 to 2000. He was previously General Counsel of Shawmut National Corporation (currently a Bank of America affiliate) from 1993 to 1995 and Special Counsel to Sullivan & Cromwell LLP from 1991 to 1993. Mr. Shepherd also served as Senior Deputy Comptroller of the Currency, Associate Counsel to the President of the United States and Deputy Assistant Attorney General. He was President of the Federal Advisory Council to the Federal Reserve in 2014 and was a member of the Council from 2012 to 2014. Mr. Shepherd also serves on the boards of Pacific Mutual Holdings, which engages in insurance, financial services and other investment-related businesses, and Pacific Life Insurance Company, a provider of various life insurance products, mutual funds and investment advisory services. He holds a bachelor's degree from Stanford University and a J.D. from University of Michigan Law School. Mr. Shepherd was nominated to First Hawaiian's Board by BNPP consistent with its rights under the Stockholder Agreement.
Allen B. Uyeda, the lead independent director and a member of both the Audit and Corporate Governance and Nominating Committees and the chair of the Risk Committee of First Hawaiian, has served on the board of directors and risk committee of First Hawaiian Bank since 2001 and 2012, respectively, and the board and risk committee of BancWest since 2012, and he has been the chairman of the First Hawaiian Bank risk committee since 2012. Mr. Uyeda brings to the First Hawaiian Board extensive knowledge of Hawaii and experience in supervising and performing company financial functions. From 1995 to 2014, he was Chief Executive Officer of First Insurance Company of Hawaii, a Honolulu-based property and casualty insurance company that, during the course of Mr. Uyeda's leadership, became a subsidiary of Tokio Marine Holdings, Inc., a multinational insurance holding company listed on the Tokyo Stock Exchange. Previously, Mr. Uyeda served as Vice President and Chief Financial Officer of the Agency and Brokerage Group of Continental Insurance Company, prior to its acquisition by CNA Financial Corporation, a public unified holding company for insurance entities. Mr. Uyeda also has several years of management, financial analyst and project engineering experience with International Paper, a public company with interests in paper-based packaging, paper and pulp industries, and Johnson Controls, Inc., a public company that provides batteries and builds efficiency services. He serves on the boards of The Queen's Health Systems and The Queen's Medical Center and is a Special Advisor to the Oahu Economic Development Board. Mr. Uyeda holds a bachelor's degree in electrical engineering from Princeton University and an M.B.A. from the Wharton School at the University of Pennsylvania.
Michel Vial, a member of the Board and the Compensation Committee of First Hawaiian, has been Head of Group Strategy and Development at BNPP since 2011. Mr. Vial brings to the First Hawaiian Board extensive experience in the financial services industry, having been an employee and officer of BNPP for over three decades. He served as Head of BNP Corporate Finance from 1992 to 1996, Head of French Coverage for Large Corporates from 2004 to 2006 and Head of BNPP Development from 2007 to 2011. During his time as Head of BNPP Development, he was in charge of BNPP's acquisition of Fortis Bank. Prior to joining BNPP, Mr. Vial worked at Arthur Andersen Consulting, now known as Accenture. Mr. Vial serves on the supervisory boards of BNP Paribas Leasing Solutions and 441 Trust Company Ltd. (a United Kingdom company representing former Visa Europe Ltd. members). He is a graduate of Ecole Polytechnique and Ecole Nationale Supérieure des Télécommunications in Paris and holds a master's degree from Stanford University. Mr. Vial was nominated to First Hawaiian's Board by BNPP consistent with its rights under the Stockholder Agreement.
Eric K. Yeaman, the President and Chief Operating Officer of First Hawaiian, has been President and Chief Operating Officer of First Hawaiian Bank and a member of the Bank's board of directors since June 2015. Prior to joining First Hawaiian Bank, Mr. Yeaman was the President and Chief Executive Officer of Hawaiian Telcom (NASDAQ: HCOM), Hawaii's leading telecommunications provider, from 2008 until 2015. In December 2008, Hawaiian Telcom filed a petition for bankruptcy under Chapter 11 of the federal bankruptcy laws. Under Mr. Yeaman's leadership, the company emerged from bankruptcy in October 2010 and operated profitably throughout his remaining tenure with that company. Mr. Yeaman's prior experience also includes consulting and audit work from 1989 to 2000 at Arthur Andersen LLP, where he was a Senior Manager. From 2000 until 2003, Mr. Yeaman served as Chief Operating and Financial Officer at Kamehameha Schools, and from 2003 until 2008, he served as Financial Vice President and Chief Financial Officer of Hawaiian Electric Industries Inc. (NYSE: HE), a publicly traded electric utility holding company owning the largest supplier of electricity in Hawaii, taking responsibility for financial strategy and reporting, investor relations and pension plan management. He later served as Senior Executive Vice President and Chief Operating Officer of its Hawaiian Electric Company subsidiary. Mr. Yeaman serves on the publicly traded company boards of Alaska Air Group, Inc., Alexander & Baldwin, Inc. and Hawaiian Telcom as well as the not-for-profit boards of the Queen's Health Systems (currently Chairman of the Board), Harold K.L. Castle Foundation and Hawaii Community Foundation. Mr. Yeaman holds a bachelor's in business
administration degree in accounting from the University of Hawaii at Manoa and is a Certified Public Accountant (not in public practice) in Hawaii.
Alan H. Arizumi, the Vice Chairman of Wealth Management and Consumer Banking of both First Hawaiian and First Hawaiian Bank, oversees all areas of the Wealth Management Group, which includes Personal Trust, Private Banking, Wealth Advisory, Institutional Wealth Management, Investment Services, Wealth Management Service Center, Trust Compliance and Bishop Street Capital Management Corporation. He is also responsible for the Company's Consumer Banking Group, which is comprised of the Bank's residential mortgage loan origination and servicing operations and consumer loan products. At the Bank level, he has overseen the Wealth Management Group since 2013 and the Consumer Banking Group since 2014. Previously, Mr. Arizumi was Executive Vice President of the Bank's Business, Dealer and Card Services Group from 2010 to 2013 and Executive Vice President and Chief Risk Officer of the Bank's Risk Management Group from 2009 to 2010. Since 2013, he has served as the Chairman and Chief Executive Officer of Bishop Street Capital Management Corporation (Chairman only since 2016) and as the Vice Chairman of FHB Guam Trust Co., both of which are subsidiaries of the Bank. Mr. Arizumi serves on the boards of BancWest Investment Services, Inc., a subsidiary of Bank of the West, Bishop Street Capital Management Corporation, FHB Guam Trust Co. and First Hawaiian Bank Foundation. He also serves on the local boards of Hawaii Community Foundation, Hawaii Youth Symphony, Kuakini Medical Center, Kuakini Health System, McKinley High School Foundation and KCAA Preschools of Hawaii, and he is a special advisor to the Oahu Economic Development Board. Mr. Arizumi holds a bachelor's degree in business administration from the University of Hawaii and is a graduate of the Pacific Coast Banking School.
Robert T. Fujioka, the Vice Chairman and Chief Lending Officer of both First Hawaiian and First Hawaiian Bank, is responsible for the Company's Commercial Real Estate, Corporate Banking, Automobile Dealer and Business Services divisions and has overseen these units at the Bank level since 2007. Mr. Fujioka is also the Chief Executive Officer of First Hawaiian Leasing, a subsidiary of the Bank. He previously served in various executive positions with the Bank's Wealth Management, Trust, and Retail Branch groups, as well as with the Bank's subsidiary, Bishop Street Capital Management. Prior to joining the Bank in 1996, Mr. Fujioka held numerous executive positions at Bank of Hawaii, including President of its leasing subsidiary and Senior Vice President & Manager of Commercial Real Estate and all Hawaii Business Banking Centers. He served as Vice President and Manager of the Corporate Banking, Note and International Banking Departments at Liberty Bank from 1979 to 1986, and as Operations Officer of the Northern California Main Office of Mitsubishi Bank of California (now known as Union Bank) from 1974 to 1978. In addition to his forty-two years of experience in the banking industry in both Hawaii and California, Mr. Fujioka serves on the Boards of Trustees of the Japanese American National Museum and the Clarence T.C. Ching Foundation and the not-for-profit board of the First Hawaiian Bank Foundation, and he previously chaired and served on the boards of numerous other not-for-profit organizations. Mr. Fujioka holds a bachelor's degree from the University of Michigan and an M.B.A. from the University of Hawaii.
Michael Ching, the Executive Vice President, Chief Financial Officer and Treasurer of First Hawaiian, has been the Chief Financial Officer and Treasurer of First Hawaiian Bank since June 1, 2015. Prior to joining First Hawaiian Bank, Mr. Ching was the managing partner of the Hawaii Office of Ernst & Young LLP, where he had worked in banking and capital markets, among other areas, since 1993. He was promoted to partner in 2007 and became managing partner of the Hawaii office in 2013. Mr. Ching serves on the national and local boards of the American Diabetes Association and on the local boards of the Boy Scouts of America (Aloha Council), Chinese Chamber of Commerce, Hawaiian Humane Society and the Hawaii Theatre. Mr. Ching holds a bachelor's degree in commerce and accounting from Santa Clara University and is a Certified Public Accountant (not in public practice) in Hawaii.
Ralph M. Mesick, the Executive Vice President and Chief Risk Officer of both First Hawaiian and First Hawaiian Bank, is responsible for the design, implementation and oversight of the Company's risk management strategy and framework. Mr. Mesick previously served as Manager, Deputy Manager and Senior Vice President of the Bank's Commercial Real Estate Division. Prior to joining the Bank in 2012, he spent over twenty-five years at Bank of Hawaii, where he was Executive Vice President and managed Bank of Hawaii's business lines and functions, such as private banking and wealth management, credit risk and commercial real estate. He also served on Bank of Hawaii's operating, credit and trust executive committees. In addition to his over thirty years of experience in the banking industry, Mr. Mesick serves on the not-for-profit boards of Hawaii Community Reinvestment Corporation, Saint Francis Healthcare Systems, Kapiolani Hospital Foundation, Chaminade University, HomeAid Hawaii and the Boys and Girls Club of Hawaii. He holds a bachelor's degree in business administration from the University of Hawaii at Manoa and an M.B.A. with a concentration in banking, finance and investments from the University of Wisconsin-Madison.
BOARD OF DIRECTORS, COMMITTEES AND GOVERNANCE
Overview
Our Board provides oversight with respect to our overall performance, strategic direction and key corporate policies. It approves major initiatives, advises on key financial and business objectives, and monitors progress with respect to these matters. Members of the Board are kept informed of our business by various reports and documents provided to them on a regular basis, including operating and financial reports and audit reports made at Board and committee meetings by our Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Risk Officer and other officers. The Board has four standing committees, the principal responsibilities of which are described below under the section entitled "—Committees of Our Board of Directors." Additionally, the directors meet in regularly scheduled executive sessions, without First Hawaiian management (generally other than Mr. Harrison) present, at each regularly scheduled meeting of the Board. An executive session may not occur for a special meeting willof the Board called for a specific purpose.
Meetings
The Board held its first meeting on April 1, 2016 in connection with the Reorganization Transactions. The Board met ten times in 2016. Each member of the Board attended more than 75% of the total number of meetings of the Board and the committees on which he served. We strongly encourage, but do not require, the members of our Board to attend annual meetings of our stockholders.
Status as a "Controlled Company"
Our common stock is listed on NASDAQ and, as a result, we are subject to the corporate governance listing standards of the exchange. However, under NASDAQ rules, a listed company that satisfies the definition of a "controlled company" (i.e., a company of which more than 50% of the voting power is held by a single entity or group) may elect not to comply with certain of these requirements.
Pursuant to the Stockholder Agreement, so long as BNPP directly or indirectly owns more than 50% of our outstanding common stock, and we are therefore a "controlled company," and during the 12-month transition phase following the date on which we are no longer a "controlled company" as a result of BNPP's ownership of shares of our outstanding common stock, we expect to elect not to comply with the corporate governance standards of NASDAQ requiring: (i) a majority of independent directors on the board of directors; (ii) a fully independent corporate governance and nominating committee; and (iii) a fully independent compensation committee. BNPP currently beneficially owns approximately 62.0% of our outstanding common stock. Five of our nine directors, including at least one member of each of the Corporate Governance and Nominating Committee, the Compensation Committee and the Risk Committee of our Board are directors designated by BNPP who do not qualify as "independent directors" under the applicable rules of NASDAQ.
A director is independent if the Board affirmatively determines that he or she satisfies the independence standards set forth in the applicable rules of NASDAQ, has no material relationship with the Company that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, and is independent within the meaning of Rule 10A-3 of the Exchange Act. The Board has reviewed the independence of our current non-employee directors and has determined that Matthew Cox, W. Allen Doane, Allen B. Uyeda are each an independent director.
Board Leadership Structure and Qualifications
We believe that our directors should have the same effecthighest professional and personal ethics and values, consistent with our longstanding values and standards. They should have broad experience at the policy-making level in business, government or banking. They should be committed to enhancing stockholder value and should have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. Their service on boards of other companies should be limited to a number that permits them, given their individual circumstances, to perform responsibly all director duties. Each director must represent the interests of all stockholders. When considering potential director candidates, our Board also considers the candidate's character, judgment, diversity, skills, including financial literacy, and experience in the context of our needs and those of the Board.
The corporate governance guidelines of our Board provide that the Board may, in its sole discretion, designate one of the independent directors who is not a BNPP-designated director as a vote againstits lead director to preside over meetings of the merger
agreement.
Sincerely,
/s/ Walter A. Dods, Jr.
Walter A. Dods, Jr.Board held in the absence of any director who is also an executive officer and to have such additional responsibilities and authority as the Board may direct from time to time.
Currently, Robert Harrison serves as our Chief Executive Officer and as the Chairman of our Board, and Allen B. Uyeda has been designated to serve as the lead independent director of our Board.
Our Chief Executive Officer is generally in charge of our business affairs, subject to the overall direction and supervision of the Board and its committees, and is the only member of our management team that serves on the Board. Our Board believes that combining the roles of Chairman of the Board and Chief Executive Officer This transactionand appointing a lead independent director is the most effective board leadership structure for us and that it provides an effective balance of strong leadership and independent oversight. Having one individual serve as both Chief Executive Officer and Chairman contributes to and enhances the Board's efficiency and effectiveness, as the Chief Executive Officer is generally in the best position to inform our independent directors about our operations, the competitive market and other challenges facing our business. Our Board believes that the Chief Executive Officer is in the best position to most effectively serve as the Chairman of the Board for many reasons as he is closest to many facets of our business, and has frequent contact with our customers, regulators and other stakeholders in our business. The Board believes that combining roles of Chief Executive Officer and Chairman of the Board also promotes timely communication between management and the Board on critical matters, including strategy, business results and risks because of Mr. Harrison's direct involvement in the strategic and day-to-day management of our business.
Board Oversight of Risk Management
Our Board believes that effective risk management and control processes are critical to our safety and soundness, our ability to predict and manage the challenges that we face and, ultimately, our long-term corporate success. Our Board, both directly and through its committees, is responsible for overseeing our risk management processes, with each of the committees of our Board assuming a different and important role in overseeing the management of the risks we face.
The Risk Committee of our Board oversees our enterprise-wide risk management framework, which establishes our overall risk appetite and risk management strategy and enables our management to understand, manage and report on the risks we face. Our Risk Committee also reviews and oversees policies and practices established by management to identify, assess, measure and manage key risks we face, including the risk appetite metrics developed by management and approved by our Board. The Audit Committee of our Board is responsible for overseeing risks associated with financial matters (particularly financial reporting, accounting practices and policies, disclosure controls and procedures and internal control over financial reporting), reviewing and discussing generally the identification,
assessment, management and control of our risk exposures on an enterprise-wide basis and engaging as appropriate with our Risk Committee to assess our enterprise-wide risk framework. The Compensation Committee has primary responsibility for risks and exposures associated with our compensation policies, plans and practices regarding both executive compensation and the compensation structure generally. In particular, our Compensation Committee, in conjunction with our Chief Executive Officer and Chief Risk Officer and other members of our management as appropriate, reviews our incentive compensation arrangements to ensure these programs are consistent with applicable laws and regulations, including safety and soundness requirements, and do not encourage imprudent or excessive risk-taking by our employees. The Corporate Governance and Nominating Committee oversees risks associated with the independence of our Board and potential conflicts of interest.
Our senior management is responsible for implementing and reporting to our Board regarding our risk management processes, including by assessing and managing the risks we face, including strategic, operational, regulatory, investment and execution risks, on a day-to-day basis. Our senior management is also responsible for creating and recommending to our Board for approval appropriate risk appetite metrics reflecting the aggregate levels and types of risk we are willing to accept in connection with the operation of our business and pursuit of our business objectives.
The role of our Board in our risk oversight is consistent with our leadership structure, with our Chief Executive Officer and the other members of senior management having responsibility for assessing and managing our risk exposure, and our Board and its committees providing oversight in connection with those efforts. We believe this division of risk management responsibilities presents a consistent, systemic and effective approach for identifying, managing and mitigating risks throughout our operations.
Committees of Our Board of Directors
The standing committees of our Board were organized in April 2016 in connection with our IPO and consist of an audit committee, a corporate governance and nominating committee, a compensation committee and a risk committee. The responsibilities of these committees are described below. Our Board may also establish various other committees to assist it in its responsibilities. However, the Stockholder Agreement provides that, until the date BNPP ceases to directly or indirectly beneficially own at least 5% of our outstanding common stock, without either the approval of a majority of the BNPP designated directors on our Board at the time of such action or BNPP's waiver of its rights under the Stockholder Agreement, we may not form, or delegate any authority to, any new committee of our Board or to any subcommittee thereof. The following table summarizes the current membership of the Board and each of its committees:
Director Name | Audit Committee | Corporate Governance & Nominating Committee | Compensation Committee | Risk Committee | ||||
|---|---|---|---|---|---|---|---|---|
| Matthew Cox* | Member | Member | ||||||
| W. Allen Doane* | Chair | Member | ||||||
| Thibault Fulconis** | Member | |||||||
| Gérard Gil** | Chair | Chair | ||||||
| Jean-Milan Givadinovitch** | Member | |||||||
| Robert S. Harrison | ||||||||
| J. Michael Shepherd** | Member | |||||||
| Allen B. Uyeda* | Member | Member | Chair | |||||
| Michel Vial** | Member |
- *
- "Independent" under NASDAQ listing standards.
- **
- BNPP-designated director.
Audit Committee. The Audit Committee assists the Board in fulfilling its responsibilities for general oversight of the integrity of our financial statements and regulatory reporting, our compliance with legal and regulatory requirements, our independent auditors' qualifications and independence and the performance of our internal audit function and independent auditors. Among other things, the Audit Committee:
- •
- appoints, oversees and determines the compensation of our independent auditors;
- •
- reviews and discusses our financial statements and the scope of our annual audit to be conducted by our independent auditors and approves all audit fees;
- •
- reviews and discusses our financial reporting activities, including our annual report, and the accounting standards and principles followed in connection with those activities;
- •
- discusses guidelines and policies governing the process by which our overall risk exposure is assessed and managed (and the steps management has taken to monitor and control these risks);
- •
- pre-approves audit and non-audit services provided by our independent auditors;
- •
- meets with management and our independent auditors to review and discuss our financial statements and financial disclosure;
- •
- establishes and oversees procedures for the treatment of complaints regarding accounting and auditing matters;
- •
- reviews the scope and staffing of our internal audit function and our disclosure and internal controls; and
- •
- monitors our legal, ethical and regulatory compliance.
Pursuant to the Audit Committee's charter and the terms of the Stockholder Agreement, the Audit Committee must consist of at least three members, all of whom are required to be "independent" under the listing standards of NASDAQ and meet the requirements of Rule 10A-3 of the Exchange Act. The Audit Committee also must include at least one "audit committee financial expert." Under the Stockholder Agreement, and unless BNPP waives its rights to appoint members to our Audit Committee, until the date BNPP ceases to directly or indirectly beneficially own at least 5% of our outstanding common stock, if any of the directors designated for nomination and election to our Board by BNPP qualifies as an independent director and satisfies the requirements of Rule 10A-3 and the NASDAQ listing standards, at least one member of the Audit Committee will be a director designated for nomination and election to our Board by BNPP. Because no director designated for nomination and election to our Board by BNPP currently qualifies as an independent director and satisfies the requirements of Rule 10A-3 and the NASDAQ listing standards, no member of the Audit Committee is a director designated for nomination and election to our Board by BNPP and no member of our Audit Committee will be a BNPP-designated director, unless BNPP designates an independent director for election to our Board. Currently, our Audit Committee members are W. Allen Doane (chair), Allen Uyeda and Matthew Cox, all of whom have been approved or disapproveddetermined by the SecuritiesBoard to be "independent" under the listing standards of NASDAQ and to meet the requirements of Rule 10A-3 of the Exchange CommissionAct, and all of whom serve as "audit committee financial experts."
The Audit Committee has adopted a written charter that specifies the scope of its rights and responsibilities, including those listed above. The charter is available on our website at www.fhb.com under the Investor Relations tab. The Audit Committee held its first meeting on May 9, 2016 and met six times in 2016.
Compensation Committee. The Compensation Committee is responsible for discharging the responsibilities of our Board relating to compensation of our executives and directors. Among other things, the Compensation Committee:
- •
- reviews and approves our compensation programs and incentive plans, including those for our executive officers, subject to the terms of the Stockholder Agreement;
- •
- reviews our overall compensation philosophy;
- •
- if applicable, prepares our Compensation Committee report, reviews and discusses with management our compensation discussion and analysis and recommends its inclusion in our annual proxy statement or report;
- •
- reviews and approves director compensation and recommends to the Board any changes thereto;
- •
- reviews and approves corporate goals and objectives relevant to the compensation of our Chief Executive Officer; and
- •
- oversees, in consultation with management, regulatory compliance with respect to compensation matters.
Pursuant to the Compensation Committee's charter and the terms of the Stockholder Agreement, the Compensation Committee must consist of at least three members. Under the Stockholder Agreement, and unless BNPP waives its rights to appoint members to our Compensation Committee, at all times prior to the date when BNPP ceases to beneficially own at least 50% of our outstanding common stock, at least one of the members of the Compensation Committee must be a director designated for nomination and election to the Board by BNPP. After BNPP ceases to beneficially own at least 50% of our common stock, the Compensation Committee will transition to full compliance with the governance standards of NASDAQ, as follows. By the date when BNPP ceases to beneficially own at least 50% of our outstanding common stock, at least one member must be independent. On or before 90 days after the date when BNPP ceases to beneficially own at least 50% of our outstanding common stock, the Compensation Committee will consist of a majority of independent directors. On the date one year after the date that BNPP ceases to beneficially own at least 50% of our outstanding common stock, the committee will consist solely of independent directors. After such time as the Compensation Committee transitions to full independence, but prior to the date BNPP ceases to directly or indirectly beneficially own at least 5% of our outstanding common stock, if any of the directors designated for nomination and election to our Board by BNPP qualifies as an independent director, at least one such director will be a member of the Compensation Committee. Because no director designated for nomination and election to our Board by BNPP currently qualifies as an independent director, no member of our Compensation Committee will be a BNPP-designated director following such time as the Compensation Committee transitions to full independence, unless BNPP designates an independent director for election to our Board. Currently, our Compensation Committee members are Gérard Gil (chair), Michel Vial and Matthew Cox.
The Compensation Committee has adopted a written charter that specifies the scope of its rights and responsibilities, including those listed above. The charter is available on our website at www.fhb.com under the Investor Relations tab. The Compensation Committee held its first meeting on May 10, 2016 and met six times in 2016. The Compensation Committee also met two times in 2017 to make certain determinations with respect to 2016 compensation.
In 2016, the Compensation Committee retained the services of Pay Governance as an independent outside compensation consultant (the "Compensation Consultant") to perform a competitive assessment of First Hawaiian's executive and director compensation programs, as well as to provide guidance on the changing regulatory environment governing executive compensation. Pay Governance provides the Company annual executive and director assessments that include, but are not limited to,
an assessment of First Hawaiian's financial performance relative to its peers, an assessment of First Hawaiian's compensation program compared to its peers, recommendations for total cash compensation (base salary and cash incentives), a review of equity compensation, assessment of perquisites, retirement benefits and bonuses for named executive officers, and a review of Board and committee compensation. The annual executive and director compensation assessments provide the Compensation Committee with a broad array of information from which to assess the effectiveness of its compensation programs and serve as a foundation for compensation decisions.
In addition to providing annual assessments, our Compensation Consultant advises the Compensation Committee on best practices in light of the changes in bank regulations applicable to the Company or the Bank, assists in developing a relevant peer group for use in the executive and director market assessments and provides guidance to the Compensation Committee regarding the design of compensation arrangements that reflect First Hawaiian's compensation philosophy.
The Compensation Consultant attends the Compensation Committee meetings upon request to review compensation data and participate in general discussions on compensation and benefits for the named executive officers and Board members. While the Compensation Committee considers input from the Compensation Consultant when making compensation decisions, the Compensation Committee's final decisions reflect many factors and considerations.
The Compensation Committee regularly reviews the services provided by its outside Compensation Consultant and believes that Pay Governance is independent in providing executive compensation consulting services.
Our Chief Executive Officer, in conjunction with members of the Compensation Committee and the Human Resources Division, develops recommendations regarding the appropriate mix and level of compensation for our named executive officers (other than himself). The recommendations consider the objectives of our compensation philosophy and the range of compensation programs authorized by the Compensation Committee. The Chief Executive Officer meets with the Compensation Committee to discuss the compensation recommendations for the other named executive officers. Our Chief Executive Officer does not participate in Compensation Committee discussions relating to his compensation.
Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee is responsible for ensuring an effective and efficient system of corporate governance for First Hawaiian by clarifying the roles of our Board and its committees; identifying, evaluating and recommending to our Board candidates for directorships; and reviewing and making recommendations with respect to the size and composition of our Board. In addition, the Corporate Governance and Nominating Committee is responsible for reviewing and overseeing our corporate governance guidelines and for making recommendations to our Board concerning governance matters. Among other things, the Corporate Governance and Nominating Committee:
- •
- identifies individuals qualified to be directors consistent with our corporate governance guidelines and evaluates and recommends director nominees for approval by our Board;
- •
- reviews Board committee assignments and makes recommendations to our Board concerning the structure and membership of Board committees;
- •
- annually reviews our corporate governance guidelines and recommends any changes to our Board; and
- •
- assists management with the preparation of the disclosure in our annual proxy statement regarding director independence and the operations of the Corporate Governance and Nominating Committee.
Pursuant to the Corporate Governance and Nominating Committee's charter and the terms of the Stockholder Agreement, the Corporate Governance and Nominating Committee must consist of at least three members. Under the Stockholder Agreement, and unless BNPP waives its rights to appoint members to our Corporate Governance and Nominating Committee, at all times prior to the date when BNPP ceases to beneficially own at least 50% of our outstanding common stock, at least one of the members of the Corporate Governance and Nominating Committee must be a director designated for nomination and election to our Board by BNPP. After BNPP ceases to beneficially own at least 50% of our common stock, the Corporate Governance and Nominating Committee will transition to full compliance with the governance standards of NASDAQ, as follows. By the date when BNPP ceases to beneficially own at least 50% of our outstanding common stock, at least one member must be independent. On or before 90 days after the date when BNPP ceases to beneficially own at least 50% of our outstanding common stock, the Corporate Governance and Nominating Committee will consist of a majority of independent directors. On the date one year after BNPP ceases to be beneficial owner of at least 50% of our outstanding common stock, the committee will consist solely of independent directors. After such time as the Corporate Governance and Nominating Committee transitions to full independence, but prior to the date BNPP ceases to directly or indirectly beneficially own at least 5% of our outstanding common stock, if any of the directors designated for nomination and election to our Board by BNPP qualifies as an independent director, at least one such director will be a member of the Corporate Governance and Nominating Committee. Because no director designated for nomination and election to our Board by BNPP currently qualifies as an independent director, no member of our Corporate Governance and Nominating Committee will be a BNPP-designated director following such time as the governance and nominating committee transitions to full independence unless BNPP designates an independent director for election to our Board. Currently, our Corporate Governance and Nominating Committee members are Gérard Gil (chair), J. Michael Shepherd and Allen Uyeda.
The Corporate Governance and Nominating Committee has adopted a written charter that specifies the scope of its rights and responsibilities, including those listed above. The charter is available on our website at www.fhb.com under the Investor Relations tab. The Corporate Governance and Nominating Committee held its first meeting on January 23, 2017.
Risk Committee. The Risk Committee assists the Board in fulfilling its responsibilities for oversight of our enterprise-wide risk management framework, including reviewing our overall risk appetite, risk management strategy, and policies and practices established by our management to identify and manage risks we face. Among other things, the Risk Committee, subject to the terms of the Stockholder Agreement:
- •
- reviews and approves our risk management framework, including a clearly articulated risk appetite statement;
- •
- oversees significant credit policies and reviews and approves major changes to them;
- •
- oversees significant policies and practices governing the management of market risk;
- •
- annually approves the acceptable level of liquidity risk that we may assume in connection with our operating strategies;
- •
- reviews consolidated reports on operational risk, including, to the extent available, key risk indicators;
- •
- provides oversight responsibility and accountability for capital planning and oversee and approves significant capital policies;
- •
- reviews and approves the policies and procedures of the stress testing processes; and
- •
- evaluates and discusses summary information about stress test results to ensure that the stress tests are consistent with our risk appetite and overall business strategy.
Pursuant to the Risk Committee's charter and the terms of the Stockholder Agreement, the Risk Committee must consist of at least four members. Under the Stockholder Agreement, and unless BNPP waives its rights to appoint members to our Risk Committee, until the date BNPP ceases to control us for purposes of the Bank Holding Company Act (the "BHC Act"), up to two members may be directors designated for nomination and election to our Board by BNPP. Currently, our Risk Committee members are Allen Uyeda (chair), Jean-Milan Givadinovitch, Thibault Fulconis and W. Allen Doane.
The Risk Committee has adopted a written charter that specifies the scope of its rights and responsibilities, including those listed above. The Risk Committee held its first meeting on May 9, 2016 and met five times in 2016.
Compensation Committee Interlocks and Insider Participation
No member of our Compensation Committee is or has been one of our officers or employees, and none will have any relationships with us of the type that is required to be disclosed under Item 404 of Regulation S K. None of our executive officers serves or has served as a member of the Board, Compensation Committee or other Board committee performing equivalent functions of any entity that has one or more executive officers serving as one of our directors or on our Compensation Committee.
Corporate Governance Guidelines and Code of Conduct and Ethics
Our Board has adopted corporate governance guidelines, which are accessible through our principal corporate website at www.fhb.com under the Investor Relations tab, that set forth a framework within which our Board, assisted by Board committees, will direct the Company's affairs. These guidelines address, among other things, the composition and functions of our Board, director independence, compensation of directors, management succession and review, Board committees and selection of new directors.
Our Board has adopted a code of conduct and ethics applicable to our officers, directors and employees. A copy of that code is available on our principal corporate website at www.fhb.com under the Investor Relations tab. We expect that any amendments to the code, or any state securities commission. Neitherwaivers of its requirements, will be disclosed on our principal corporate website at www.fhb.com as required by applicable law or listing requirements.
Stockholder Communications with the SecuritiesBoard of Directors
Stockholders and Exchange Commission nor any state securities commission has passed uponinterested parties may communicate with the fairness or merits of this transaction or upon the accuracy or adequacy of the
information contained in this document. Any representationBoard by sending correspondence addressed to the contrary is a
criminal offense.
This proxy statement is dated Board or one or more specific directors at the following address: First Hawaiian, Inc., 2001, and is first being mailed to
stockholders of BancWest on or about , 2001.
4
[BANCWEST CORPORATION LOGO]c/o the Secretary, 999 Bishop Street, Honolulu, Hawaii 96813
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
- - Date: , 2001
- - Time: 9:00 a.m., local time
- - Place: Board Room, 30th Floor, First Hawaiian Center, 999 Bishop Street,
Honolulu, Hawaii
To the stockholders of BancWest Corporation:
We are pleased to notify you of and invite you to a special meeting of
stockholders. At the meeting, you96813. All communications will be asked:
- To vote on a proposal to adoptsubmitted by the Agreement and Plan of Merger, dated as
of May 8, 2001, as Amended and Restated as of July 19, 2001, by and among
BancWest Corporation, BNP Paribas and Chauchat L.L.C., as the merger
agreement may be further amended from time to time;
- To vote on a proposal to adjourn the special meeting, if necessary, to
solicit additional votes in favor of adoption of the merger agreement; and
- To consider any other matters that are properly brought before the
special meeting or any adjournments or postponements of the special
meeting.
Only stockholders of record at the close of business on July 27, 2001 may
vote at the special meeting.
We urge you to read the accompanying proxy statement carefully as it sets
forth details of the proposed merger and other important information relatedSecretary to the merger.
Under Delaware law, holdersrelevant director or directors as addressed.
SECURITY OWNERSHIP OF CONTENTS
PAGE
----
SUMMARY TERM SHEET.......................................... 1
What You Will Be Entitled to Receive in the Merger........ 1
Recommendations of the Special Committee and Our Board of
Directors.............................................. 1
Opinion of Goldman, Sachs & Co. .......................... 2
Our Position as to the Fairness of the Merger............. 2
BNP Paribas' and Chauchat's Positions as to the Fairness
of the Merger.......................................... 2
Interests of Directors and Executive Officers in the
Merger................................................. 3
Material U.S. Federal Income Tax Consequences............. 4
Appraisal Rights.......................................... 4
Regulatory Approvals...................................... 5
The Special Meeting....................................... 5
Accounting Treatment...................................... 6
The Merger Agreement...................................... 7
Information About BancWest, BNP Paribas and Chauchat...... 8
Selected Consolidated Financial Data of BancWest.......... 9
Consolidated Ratios of Earnings to Fixed Charges.......... 11
Trading Market and Price; Dividends....................... 11
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS........... 13
SPECIAL FACTORS............................................. 14
Background of the Merger.................................. 14
Recommendations of the Special Committee and Our Board of
Directors; Fairness of
the Merger............................................. 18
Preliminary Presentation by Goldman, Sachs & Co. ......... 21
Opinion of Goldman, Sachs & Co. .......................... 22
Our Forecasts............................................. 27
BNP Paribas' and Chauchat's Positions as to the Fairness
of the Merger.......................................... 28
Summary of Financial Analyses of Merrill Lynch & Co. ..... 30
Purpose and Reasons for the Merger; Structure of the
Merger................................................. 35
Effects of the Merger; Plans or Proposals After the
Merger................................................. 36
Interests of Directors and Executive Officers in the
Merger................................................. 37
Certain Relationships Between BancWest and BNP Paribas.... 41
Material U.S. Federal Income Tax Consequences of the
Merger to our Stockholders............................. 45
Litigation................................................ 46
THE SPECIAL MEETING......................................... 47
Date, Time and Place of the Special Meeting............... 47
Proposal to be Considered at the Special Meeting.......... 47
Record Date............................................... 47
Voting Rights; Vote Required for Adoption................. 47
Voting and Revocation of Proxies.......................... 48
Solicitation of Proxies................................... 49
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PAGE
----
THE MERGER.................................................. 50
Effective Time of Merger.................................. 50
Payment of Merger Consideration and Surrender of Stock
Certificates........................................... 50
Accounting Treatment...................................... 51
Fees and Expenses of the Merger........................... 51
Financing of the Merger................................... 52
Appraisal Rights.......................................... 52
Regulatory Approvals and Other Consents................... 55
The Merger Agreement...................................... 56
OTHER MATTERS............................................... 63
Security Ownership of Certain Beneficial Owners and
Management............................................. 63
Transactions in Capital Stock by Certain Persons.......... 65
Certain Transactions with Directors, Executive Officers
and Affiliates......................................... 67
Other Matters for Action at the Special Meeting........... 67
Proposals by Holders of Shares of Common Stock............ 67
Experts................................................... 68
WHERE YOU CAN FIND MORE INFORMATION......................... 69
Annex A -- Amended and Restated Agreement and Plan of
Merger.................................................... A-1
Annex B -- Opinion of Goldman, Sachs & Co................... B-1
Annex C -- Section 262 of the General Corporation Law of the
State of Delaware......................................... C-1
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SUMMARY TERM SHEET
This summary term sheet highlights important information in this proxy
statement and does not contain all of the information that is important to you.
You should carefully read this entire proxy statement and the other documents we
refer you to for a more complete understanding of the matters being considered
at the special meeting. In addition, we incorporate by reference important
business and financial information about BancWest into this proxy statement. You
may obtain the information incorporated by reference into this proxy statement
without charge by following the instructions in the section entitled "Where You
Can Find More Information."
THE PROPOSED TRANSACTION
- In the merger, a wholly owned subsidiary of BNP Paribas will merge into
BancWest with BancWest continuing as the surviving corporation.
- As a result of the merger, we will cease to be an independent, publicly
traded company and will become a wholly owned subsidiary of BNP Paribas.
WHAT YOU WILL BE ENTITLED TO RECEIVE IN THE MERGER (SEE PAGE 50)
If we complete the merger:
- holders of our common stock will be entitled to receive $35 in cash,
without interest, for each share of common stock that they own, and
- holders of Class A common stock will retain their shares as Class A
common stock of the surviving corporation. BNP Paribas or its wholly
owned subsidiaries own all the outstanding shares of Class A common
stock.
After we complete the merger, holders of our common stock will no longer
own BancWest common stock, and BNP Paribas will be the sole stockholder of
BancWest.
RECOMMENDATIONS OF THE SPECIAL COMMITTEE AND OUR BOARD OF DIRECTORS (SEE PAGE
18)
Because BNP Paribas was making the merger proposal and nine of our twenty
directors are designees of BNP Paribas, our board of directors established a
special committee of independent directors to consider and evaluate the BNP
Paribas merger proposal. The special committee consists of five of our directors
who are not members of our management or affiliated with BNP Paribas. After
careful consideration, the special committee unanimously:
- determined that the merger agreement and the merger are fair to, and in
the best interests of, BancWest and unaffiliated holders of our common
stock, and
- recommended to our board of directors that it
- declare the merger agreement to be advisable,
- determine that the merger agreement and the merger are fair to and in
the best interests of BancWest and unaffiliated holders of our common
stock,
- approve the merger agreement, and
- recommend that our stockholders vote to adopt the merger agreement.
Based on this unanimous recommendation, our board of directors, by the
unanimous vote of all eleven directors not elected by BNP Paribas, determined
the merger agreement to be advisable and the merger agreement and the merger to
be fair to and in the best interests of BancWest and our unaffiliated public
stockholders. Accordingly, our board of directors, by the unanimous vote of all
eleven directors not elected by BNP Paribas, approved the merger agreement and
recommends that you vote "FOR" the proposal to adopt the
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merger agreement. Our board of directors makes no recommendation as to how you
should vote on the proposal to adjourn the special meeting.
For a discussion of the material factors considered by the special
committee and our board of directors in reaching their conclusions and the
reasons why the special committee and the board of directors determined that the
merger is fair, see "Special Factors -- Recommendations of the Special Committee
and Our Board of Directors; Fairness of the Merger."
OPINION OF GOLDMAN, SACHS & CO. (SEE PAGE 22)
In connection with the merger, the special committee and our board of
directors considered the opinion of the special committee's financial advisor,
Goldman, Sachs & Co. Goldman Sachs delivered its oral opinion to the special
committee on May 6, 2001, which was later confirmed in writing as of May 8,
2001. The opinion stated that as of the date of the opinion, the $35 per share
in cash to be received by the unaffiliated holders of our common stock in the
merger is fair from a financial point of view to those holders. The full text of
this opinion, which sets forth the assumptions made, matters considered and
limitations on the review undertaken by Goldman Sachs in connection with its
opinion, is attached as Annex B to this proxy statement. Goldman Sachs provided
its opinion for the information and assistance of the special committee in
connection with its consideration of the merger. Goldman Sachs' opinion is not a
recommendation as to how any holder of BancWest common stock should vote with
respect to the merger. We urge you to read that opinion in its entirety.
OUR POSITION AS TO THE FAIRNESS OF THE MERGER (SEE PAGE 18)
We believe the merger is fair to the unaffiliated holders of our common
stock. Many facts support this conclusion, including:
- the merger consideration of $35 in cash per common share represents a 40%
premium over the common stock's $24.98 closing price on May 4, 2001, the
last trading day before BNP Paribas' May 7, 2001 announcement of its
merger proposal;
- the merger was approved and recommended by the special committee and by
all eleven of our directors who were not elected by BNP Paribas; and
- Goldman Sachs delivered an opinion that, as of the date of the opinion,
the $35 per share in cash to be received by the unaffiliated holders of
our common stock is fair from a financial point of view to those holders.
BNP PARIBAS' AND CHAUCHAT'S POSITIONS AS TO THE FAIRNESS OF THE MERGER (SEE PAGE
28)
Although neither BNP Paribas nor its subsidiary, Chauchat, has performed or
engaged a financial advisor to perform any valuation analysis for the purpose of
assessing the fairness of the merger to unaffiliated holders of BancWest common
stock, both believe that the merger is substantively and procedurally fair to
unaffiliated holders of BancWest common stock. BNP Paribas and Chauchat believe
this conclusion is supported by the factors described above and by other
factors, including:
- the merger and the terms and conditions of the merger agreement were the
result of arm's-length negotiations between the special committee and BNP
Paribas and their respective advisors;
- the limitations on BNP Paribas' ability to act on a unilateral basis
contained in the standstill agreement between BancWest and BNP Paribas,
negotiated at the time of the 1998 merger of the former holding company
of Bank of the West and our predecessor, First Hawaiian, Inc., required
BNP Paribas to engage in an arm's-length negotiation with the special
committee; and
- the merger is conditioned upon adoption of the merger agreement by the
holders of no less than two-thirds of the shares of common stock and
Class A common stock outstanding and entitled to vote at the special
meeting, voting together as a single class. While BancWest may waive this
condition, BancWest has advised BNP Paribas that it has no present
intention of waiving this condition.
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9
INTERESTS OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND EXECUTIVE OFFICERS IN THE MERGER (SEE PAGE 37)
In considering the recommendation of our board of directors to adopt the
merger agreement so that the merger can occur, you should be aware that some of
our executive officers and members of our board of directors have interests in
the merger that may be different than the interests of our stockholders
generally. These interests include:
- due to the merger, all options on common stock issued under our stock
incentive plans will vest and become exercisable. Also, at the time of
the merger, BNP Paribas will cash out all the options on common stock at
a price equal to the excess, or the spread, of the $35 in cash per share
merger consideration over the per share exercise price of each option.
Our executive officers, four of whom are directors, hold options to
purchase a total of approximately 2.6 million shares and the aggregate
spread for these options is approximately $42.4 million.
- approximately 120 of our employees, including all of our executive
officers, participate in our long term incentive plan. Due to change in
control provisions in the plan, if the merger occurs every participant
will be entitled to receive his or her maximum possible award for each of
the three open cycles.MANAGEMENT
As a result, if the merger is completed our
executive officers, four of whom are directors, will become entitled to
long term incentive plan awards totaling approximately $8.9 million.
- approximately 130 of our employees, including all of our executive
officers, participate in our supplemental executive retirement plan, or
SERP. If a participant is "involuntarily terminated" within 36 months of
the merger, that participant will be granted three extra years of
credited service under the SERP for purposes of calculating target
benefits, and those calculations will be based on the greater of covered
compensation over the 12 months before termination or the final average
compensation otherwise provided in the SERP. In addition, payment of the
participant's benefits will begin at the later of the date of termination
or age 55, unless the participant elects to delay receipt of change in
control benefits. If we were to complete the merger and then terminate
our named executive officers involuntarily on November 1, 2001, and each
such officer chose to delay receipt of retirement payments until age 62,
his annual SERP benefit would be approximately: Mr. Dods -- $817,481; Mr.
McGrath -- $614,095; Mr. Tsui -- $441,342; Mr. Karr -- $210,523; and Mr.
Horner -- $157,140.
- Walter A. Dods, Jr. has entered into an employment agreement with us that
will run for three years from the closing of the proposed merger. Mr.
Dods' employment agreement includes provisions for:
- a base salary of $1,030,403, subject to discretionary annual
increases;
- an annual performance bonus of up to 100% of his base salary which is
guaranteed to be at least 65% of his base salary (or $669,762 based on
his initial base salary);
- participation in incentive plans, including stock option or stock
purchase programs of BNP Paribas;
- participation in a new long term incentive plan, under which we will
have a target award of at least 50% of his base salary and a maximum
award opportunity that is at least 200% of the target award; and
- severance payments in the event his employment is terminated other
than for cause (or due to death or disability), Mr. Dods quits for
good reason or Mr. Dods quits with or without good reason during the
thirteenth month following a change of control subsequent to the
merger (the merger does not constitute a change of control for this
purpose). The amount of any severance payment will be a multiple of
Mr. Dods' base salary, bonus and incentive plan amount plus a pro rata
portion of the year of termination's annual target bonus and target
awards under the long term incentive plan. For example, if the merger
occurs and then on November 1, 2001 Mr. Dods is terminated without
cause, he would be entitled to a severance payment of $7,570,529 plus
a prorated portion of the target awards then in effect under long term
incentive plans adopted after the merger and under our annual bonus
program. Mr. Dods would also be entitled by his employment agreement
to three additional years of age and service credit under our pension
plans.
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10
- John K. Tsui, Howard H. Karr and Donald G. Horner, three of our executive
officers, are entitled to receive severance benefits under termination
protection agreements with us if, following the merger, their employment
is terminated without cause, the executive officers quit for good reason
or the executive officers quit with or without good reason during the
thirteenth month following a change of control subsequent to the merger.
The merger does not constitute a change of control for this purpose. The
amount of any severance payment will be a multiple of the executive's
base salary, bonus and incentive plan amounts plus a pro rata portion of
the year of termination's annual target bonus and target awards under the
long term incentive plan. For example, if the merger occurs and then on
November 1, 2001 Mr. Tsui, Mr. Karr or Mr. Horner is terminated without
cause, he would be entitled to a severance payment of $2,222,411,
$1,273,240, or $1,161,000, respectively, plus a prorated portion of his
target awards then in effect under any long term incentive plans adopted
after the merger and under our annual bonus program. Under these
circumstances, these officers would also be entitled by their termination
protection agreements to two years of additional age and service credit
under our pension plans (in addition to three years of credited service
under the SERP that would affect only Mr. Tsui's SERP benefits).
- nine of our directors are Class A directors elected by BNP Paribas. These
directors did not, however, participate in the vote by the board of
directors to approve the merger.
- after the merger, the surviving corporation will continue indemnification
arrangements and directors' and officers' liability insurance for our
present and former directors and officers.
- Messrs. Dods, Ganley, Haig and Weyand, directors of BancWest, serve as
trustees of the Estate of S. M. Damon. Under a statutory fee schedule,
they will be entitled to receive trustees' fees totaling about $15.9
million based on a percentage of the cash proceeds the Damon Estate
receives for its BancWest stock in the merger.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES (SEE PAGE 45)
The receipt of $35 in cash for each share of our common stock pursuant to
the merger will be a taxable transaction for U.S. federal income tax purposes.
For U.S. federal income tax purposes, each of our stockholders generally will
realize taxable gain or loss as a result of the merger measured by the
difference, if any, between $35 per share and the adjusted tax basis in that
share owned by the stockholder. For additional information regarding material
U.S. federal income tax consequences of the merger to our stockholders, see
"Special Factors -- Material U.S. Federal Income Tax Consequences of the Merger
to our Stockholders."
APPRAISAL RIGHTS (SEE PAGE 52)
Stockholders who do not wish to accept the $35 per share cash consideration
payable pursuant to the merger may seek, under Delaware law, judicial appraisal
of the fair value of their shares by the Delaware Court of Chancery. This value
could be more or less than or the same as the merger consideration of $35 in
cash per share. This "right of appraisal" is subject to a number of restrictions
and technical requirements. Generally, in order to exercise appraisal rights,
among other things:
- you must NOT vote in favor of the merger agreement;
- you must make a written demand for appraisal in compliance with Delaware
law BEFORE the vote on the merger agreement; and
- you must hold your shares of record continuously from the time of making
a written demand for appraisal until the effective time of the merger.
Merely voting against the merger agreement will not preserve your right of
appraisal under Delaware law. Also, since a submitted proxy not marked "against"
or "abstain" will be voted for the adoption of the merger agreement, the
submission of a proxy not marked "against" or "abstain" will result in the
waiver of appraisal rights. If you hold shares in the name of a broker or other
nominee, you must instruct your nominee to take the
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11
steps necessary to enable you to assert appraisal rights. If you or your nominee
fail to follow all of the steps required by the statute, you will lose your
right of appraisal.
Annex C to this proxy statement contains the Delaware statute relating to
your right of appraisal.
REGULATORY APPROVALS (SEE PAGE 55)
To complete the merger, we must obtain approval from the Federal Reserve
Board under Section 3 of the Bank Holding Company Act.
THE SPECIAL MEETING (SEE PAGE 47)
DATE, TIME, PLACE AND MATTERS TO BE CONSIDERED (SEE PAGE 47).
Our special meeting will be held in the Board Room, 30th Floor, First
Hawaiian Center, 999 Bishop Street, Honolulu, Hawaii on , 2001 at 9:00
a.m., local time. At the special meeting, you will be asked to vote on the
adoption of the merger agreement and a proposal to adjourn the special meeting,
if necessary, to solicit additional votes in favor of the adoption of the merger
agreement. A copy of the merger agreement is attached as Annex A to this proxy
statement.
RECORD DATE FOR VOTING (SEE PAGE 47).
You may vote at the special meeting if you owned shares of our common stock
or Class A common stock at the close of business on July 27, 2001. On that date,
there were 68,738,373 shares of our common stock and 56,074,874 shares of our
Class A common stock outstanding.
PROCEDURES RELATING TO YOUR VOTE AT THE SPECIAL MEETING (SEE PAGE 47).
Quorum Required.
- In order to have a quorum at the special meeting, a majority of the total
number of all outstanding shares of common stock and Class A common stock
as of the record date, counted together, must be present, in person or by
proxy.
Vote Required.
- In order to adopt the merger agreement under Delaware law and our
certificate of incorporation, we must obtain the affirmative vote of the
holders of a majority of the shares of common stock and Class A common
stock outstanding and entitled to vote at the special meeting, voting
together as a single class. In addition, we agreed with BNP Paribas in
the merger agreement that the holders of at least two-thirds of all
shares of common stock and Class A common stock outstanding and entitled
to vote at the special meeting, voting together as a single class, must
adopt the merger agreement before we can complete the merger. The
proposal to adjourn the special meeting must be adopted by the
affirmative vote of the holders of a majority of the shares of common
stock and Class A common stock present in person or by proxy and entitled
to vote on the proposal, voting together as a single class. Abstentions
and broker non-votes will have the effect of a vote "AGAINST" the
adoption of the merger agreement. Abstentions will have the same effect
as a vote against, and broker non-votes will have no effect on, any
proposal to adjourn the special meeting.
- BNP Paribas owns 56,074,874 shares of our Class A common stock,
representing approximately 45% of the total votes entitled to be cast on
the merger. BNP Paribas has agreed to vote all of its shares in favor of
the adoption of the merger agreement.
- On the record date for the meeting, our directors and executive officers
owned or controlled 16,801,559 shares of common stock, which was 13.5% of
our total voting stock outstanding. That amount included 15,200,000 common
shares (or about 12.2% of our total outstanding stock) that are owned by
the Estate of S.M. Damon. The Estate's affairs are managed by four
trustees, one of whom is our chief executive officer and all of whom serve
on our board of directors. The trustees have told us they presently intend
to vote the Estate's shares for adoption of the merger agreement. However,
they have no obligation to do so. BNP Paribas, our directors and executive
officers, and the Damon Estate thus
5
12
own or control a total of 72,876,433 voting shares, or about 58.4% of all
stock entitled to vote at the record date. If all those shares are voted
for the transaction, holders of about 10,324,078 additional common shares
(which is another 15% of our total common stock and another 8.3% of our
total voting shares) must vote for adoption of the merger agreement in
order for the transaction to occur.
Completion of Your Proxy Card.
- After carefully reading and considering the information contained in this
proxy statement, you should complete, date and sign your proxy card and
mail it in the enclosed return envelope as soon as possible so that your
shares are represented at the special meeting, even if you plan to attend
the meeting in person. You can also submit your proxy by telephone by
calling the number on your proxy card or over the Internet by going to
the web site designated on your proxy card. Unless you specify to the
contrary, all of your shares represented by valid proxies will be voted
"FOR" the adoption of the merger agreement and "FOR" the proposal to
adjourn the special meeting, if necessary, to solicit additional votes in
favor of the adoption of the merger agreement.
- If your shares are held in "street name" by your broker, your broker will
vote your shares, but only if you provide written instructions to your
broker on how to vote. You should follow the procedures provided by your
broker regarding how to instruct it to vote your shares. Without
instructions, your shares will not be voted by your broker and the
failure to vote will have the same effect as a vote against the adoption
of the merger agreement.
- DO NOT SEND IN YOUR STOCK CERTIFICATES WITH YOUR PROXY CARD.
Revocation of Your Proxy.
- Until exercised at the special meeting, you can revoke your proxy and
change your vote in any of the following ways:
- by delivering written notification to our Corporate Secretary at our
executive offices at 999 Bishop Street, Honolulu, Hawaii 96813;
- by delivering a proxy of a later date by mail, Internet or telephone;
- by attending the special meeting and voting in person. Your attendance
at the meeting will not, by itself, revoke your proxy; you must vote
in person at the meeting; or
- if you have instructed a broker to vote your shares, by following the
directions received from your broker to change those instructions.
Questions and Additional Information.
- For additional information regarding the procedure for delivering your
proxy see "The Special Meeting -- Voting and Revocation of Proxies" and
"-- Solicitation of Proxies."
- If you have more questions about the merger or how to submit your proxy,
or if you need additional copies of this proxy statement or the enclosed
proxy card or voting instructions, you should contact Georgeson
Shareholder Communications Inc. at 17 State Street, 10th Floor, New York,
New York 10004, or by telephone at 800-223-2064 or our Corporate
Secretary at our executive offices at 999 Bishop Street, Honolulu, Hawaii
96813, or by telephone at 808-525-8144.
ACCOUNTING TREATMENT (SEE PAGE 51)
We will account for the merger under the purchase method of accounting. For
a discussion of the accounting treatment for the merger see "The
Merger -- Accounting Treatment."
6
13
THE MERGER AGREEMENT (SEE PAGE 56)
CONDITIONS TO THE MERGER (SEE PAGE 56).
The completion of the merger depends on the satisfaction or waiver of a
number of conditions, including the following:
- we must obtain the affirmative vote of the holders of at least two-thirds
of all shares of common stock and Class A common stock outstanding and
entitled to vote at the special meeting, voting together as a single
class (BancWest has no present intention of waiving this condition);
- we must obtain all necessary regulatory approvals and those approvals
must be in full force and effect, other than those approvals the failure
of which to obtain would not reasonably be expected to have a material
adverse effect on the completion of the merger or the surviving
corporation;
- the regulatory approvals must not impose any condition that would
reasonably be expected to materially and adversely impact the surviving
corporation after the merger or materially reduce the benefits of the
merger to the extent that BNP Paribas would not have entered into the
merger agreement had the condition been known at the time;
- no legal prohibition to completion of the merger may be in effect;
- our and BNP Paribas' respective representations and warranties in the
merger agreement must be true and correct, subject to exceptions that
would not have a material adverse effect on the party making the
representations and warranties; and
- BancWest and BNP Paribas must each be in compliance in all material
respects with its respective covenants in the merger agreement.
TERMINATION OF THE MERGER AGREEMENT (SEE PAGE 58).
We and BNP Paribas may agree to terminate the merger agreement at any time
before the completion of the merger.
In addition, we or BNP Paribas may terminate the merger agreement by
written notice to the other if:
- any governmental entity that must grant a required regulatory approval
has denied approval of the merger and the denial has become final and
nonappealable, or any governmental entity of competent jurisdiction
issues a final and nonappealable injunction permanently enjoining or
otherwise prohibiting the merger, except that this right to terminate
will not be available to any party whose failure to comply with the
merger agreement causes or results in that action;
- the merger is not completed on or before January 30, 2002, except that
this right to terminate will not be available to any party whose failure
to comply with the merger agreement causes or results in the failure to
complete the merger by that date;
- the other party materially breaches a representation, warranty or
covenant in the merger agreement and the breach is not cured within 30
days after notice of the breach; or
- at the special meeting the merger agreement is not adopted by two-thirds
of the shares outstanding and entitled to vote at the special meeting.
BNP Paribas may terminate the merger agreement without our consent if:
- the special committee or our board of directors, by vote or consent of a
majority of the directors who were not elected by BNP Paribas, whom we
refer to as "non-Class A directors," either withdraws or changes its
recommendation for adoption of the merger agreement in a manner which is
adverse to BNP Paribas, or recommends to our stockholders any acquisition
proposal by a third party; or
- any required regulatory approval is granted subject to any final and
nonappealable conditions which would reasonably be expected to materially
and adversely impact the surviving corporation after the
7
14
merger or materially reduce the benefits of the merger so that BNP
Paribas would not have entered into the merger agreement had the
condition been known at the time.
We may terminate the merger agreement without BNP Paribas' consent before
obtaining stockholder approval if our board of directors, acting upon the
recommendation of the special committee, authorizes us to accept an acquisition
proposal from a third party concurrently with the termination. This right,
however, is subject to the following requirements:
- our board of directors must have complied with the provisions of the
merger agreement relating to solicitation of other offers,
- our board of directors, in consultation with the financial advisor to the
special committee, must have determined in good faith that the
acquisition proposal is superior to the merger from a financial point of
view and, other than with respect to obtaining stockholder approval, is
reasonably capable of being completed,
- BNP Paribas must have declined to offer a proposal superior to the
acquisition proposal, and
- we pay a fee to BNP Paribas as described below.
TERMINATION FEE (SEE PAGE 59).
The merger agreement provides that upon termination in specified
circumstances, we must pay a termination fee of $100 million to BNP Paribas.
INFORMATION ABOUT BANCWEST, BNP PARIBAS AND CHAUCHAT
- BancWest. We are a Delaware corporation and a bank holding company. We
are headquartered in Honolulu, Hawaii, and we have administrative
headquarters in San Francisco, California. We are the parent company of
Bank of the West and First Hawaiian Bank. We have 252 branches and serve
more than 1.1 million households and businesses in California, Hawaii,
Oregon, New Mexico, Nevada, Washington, Idaho, Guam and Saipan. Our
principal address is 999 Bishop Street, Honolulu, Hawaii 96813 and our
telephone number is 808-525-7000.
- BNP Paribas. BNP Paribas is a societe anonyme or limited liability
banking corporation organized under the laws of the Republic of France.
Headquartered in Paris, France, BNP Paribas is a world leader in banking
and financial services. It offers retail banking and financial services
(consumer credit, leasing, e-brokerage, insurance, car fleet management)
to millions of individual customers and corporations mainly in France,
Europe, the United States, the Mediterranean basin and Africa. BNP
Paribas' principal address is 16, boulevard des Italiens, 75009 Paris,
France, and its telephone number is 011-33-1-4014-7286. BNP Paribas is an
affiliate of ours by virtue of its ownership of approximately 45% of our
total outstanding capital stock.
- Chauchat L.L.C. Chauchat is a Delaware limited liability company and a
wholly owned subsidiary of BNP Paribas. Chauchat was formed for the
purpose of entering into the merger agreement and consummating the merger
and has not engaged in any business except in furtherance of the merger.
Chauchat's principal address is c/o French American Banking Corporation,
787 Seventh Avenue, New York, New York 10019 and its telephone number is
212-841-3197.
8
15
SELECTED CONSOLIDATED FINANCIAL DATA OF BANCWEST
Set forth below is selected historical consolidated financial information
of BancWest and its subsidiaries. The historical financial information was
derived from the historical financial statements and related notes of BancWest.
Interim unaudited data for the three months ended March 31, 2001 and 2000
reflect, in the opinion of our management, all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation of that data.
Results for the three months ended March 31, 2001 do not necessarily indicate
results that may be obtained for any other interim period or for the year as a
whole.
On July 1, 1999, we acquired SierraWest Bancorp. That merger was accounted
for as a pooling of interests. Therefore, all financial information has been
restated for all periods presented.
AS OF OR FOR THE
THREE MONTHS ENDED
MARCH 31, AS OF OR FOR THE YEAR ENDED DECEMBER 31,
------------------- --------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
-------- -------- ---------- ---------- -------- -------- --------
(IN THOUSANDS)
INCOME STATEMENTS AND DIVIDENDS
Interest income................. $338,851 $301,387 $1,309,856 $1,135,711 $749,541 $651,048 $620,511
Interest expense................ 149,478 122,115 562,922 446,877 315,822 281,232 270,755
Net interest income............. 189,373 179,272 746,934 688,834 433,719 369,816 349,756
Provision for credit losses..... 35,200 12,930 60,428 55,262 30,925 20,010 25,048
Noninterest income.............. 98,499 50,037 216,076 197,632 134,182 110,550 95,575
Noninterest expense............. 150,088 131,577 533,961 535,075 392,075 322,171 296,567
Income before income taxes...... 102,584 84,802 368,621 296,129 144,901 138,185 123,716
Provision for income taxes...... 40,837 35,371 152,227 123,751 60,617 44,976 38,533
Net income...................... 61,747 49,431 216,394 172,378 84,284 93,209 85,183
Cash dividends.................. 23,687 21,187 84,731 77,446 40,786 41,116 38,946
Average shares outstanding...... 124,658 124,629 124,634 124,048 79,516 70,939 68,738
AS OF OR FOR THE
THREE MONTHS ENDED
MARCH 31, AS OF OR FOR THE YEAR ENDED DECEMBER 31,
------------------- --------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
-------- -------- ---------- ---------- -------- -------- --------
COMMON STOCK DATA, PER SHARE(1)
Basic earnings.................. $ 0.50 $ 0.40 $ 1.74 $ 1.39 $ 1.06 $ 1.31 $ 1.24
Diluted earnings................ 0.49 0.40 1.73 1.38 1.05 1.29 1.20
Cash dividends.................. 0.19 0.17 0.68 0.62 0.58 0.58 0.57
Book value...................... 16.40 15.00 15.97 14.79 14.15 11.30 10.85
Market price.................... 24.00 19.75 26.13 19.50 24.00 19.88 17.50
AS OF OR FOR THE
THREE MONTHS ENDED
MARCH 31, AS OF OR FOR THE YEAR ENDED DECEMBER 31,
------------------- --------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
-------- -------- ---------- ---------- -------- -------- --------
(IN MILLIONS)
BALANCE SHEETS
AVERAGE BALANCES:
Total assets.................... $ 18,874 $ 16,820 $ 17,600 $ 16,294 $ 10,033 $ 8,635 $ 8,306
Total earning assets............ 16,791 14,971 15,742 14,492 9,036 7,768 7,558
Loans and leases................ 14,146 12,655 13,286 12,291 7,659 6,477 5,907
Deposits........................ 14,253 12,814 13,380 12,517 7,710 6,541 6,102
Long-term debt and capital
securities.................... 1,013 704 964 790 354 279 265
Stockholders' equity............ 2,042 1,850 1,903 1,793 938 786 720
AT PERIOD END:
Total assets.................... $ 19,419 $ 17,528 $ 18,457 $ 16,681 $ 15,929 $ 8,880 $ 8,642
Loans and leases................ 14,203 12,856 13,972 12,524 11,965 6,792 6,243
Deposits........................ 14,710 13,326 14,128 12,878 12,043 6,790 6,507
Long-term debt and capital
securities.................... 1,031 704 967 802 734 324 218
Stockholders' equity............ 2,045 1,870 1,989 1,843 1,746 801 753
9
16
AS OF OR FOR THE
THREE MONTHS ENDED
MARCH 31, AS OF OR FOR THE YEAR ENDED DECEMBER 31,
------------------- --------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
-------- -------- ---------- ---------- -------- -------- --------
SELECTED RATIOS:
RETURN ON AVERAGE:
Total assets.................... 1.33% 1.18% 1.23% 1.06% 0.84% 1.08% 1.03%
Stockholders' equity............ 12.26 10.74 11.37 9.61 8.99 11.86 11.82
SELECTED OPERATING AND CASH
RATIOS(2): (ANNUALIZED)
RETURN ON AVERAGE:
Tangible total assets........... 1.62% 1.44% 1.48% 1.39% 1.19% 1.17% 1.11%
Tangible stockholders' equity... 22.26 19.92 20.32 19.70 16.31 15.14 14.94
OTHER SELECTED DATA:
Dividend payout ratio........... 38.78% 42.50% 39.31% 44.93% 55.24% 44.96% 47.50%
Average stockholders' equity to
average total assets.......... 10.82 11.00 10.81 11.00 9.35 9.10 8.67
Net interest margin............. 4.58 4.82 4.75 4.76 4.81 4.77 4.63
Net loans and leases charged off
to average loans and leases... 0.61 0.37 0.37 0.42 0.31 0.33 0.42
Efficiency ratio(3), (4)........ 52.90 53.36 51.53 54.47 62.50 65.53 64.54
AT PERIOD END:
RISK-BASED CAPITAL RATIOS: (ANNUALIZED)
Tier 1.......................... 9.10% 8.63% 9.73% 8.80% 8.32% 9.63% 8.49%
Total........................... 11.11 10.34 11.39 10.56 10.18 11.87 11.93
Tier 1 leverage ratio........... 8.48 8.18 9.09 8.11 9.13 9.09 7.24
Allowance for credit losses to
total loans and leases........ 1.31 1.27 1.23 1.29 1.32 1.33 1.46
Nonperforming assets to total
loans and leases and other
real estate owned and
repossessed personal
property...................... 0.90 0.96 0.86 1.01 1.11 1.42 1.68
Allowance for credit losses to
nonperforming loans and
leases........................ 1.72x 1.68x 1.84x 1.64x 1.61x 1.40x 1.15x
- ---------------
(1) All per share data have been calculated to include both shares of common
stock and shares of Class A common stock and have been adjusted to give
retroactive effect to the two-for-one stock split in the fourth quarter of
1999.
(2) Defined as operating cash earnings as a percentage of average total assets
or average stockholders' equity minus average goodwill and core deposit
intangible.
(3) Excluding after-tax restructuring, merger-related and other nonrecurring
costs of:
(a) $755,000 recorded in 2000 for the acquisition of new branches in Nevada
and New Mexico completed in the first quarter of 2001,
(b) $11.6 million in connection with the acquisition of SierraWest Bancorp
and the consolidation of data centers in 1999, and
(c) $21.9 million in connection with the merger of the former BancWest
Corporation with and into First Hawaiian, Inc. on November 1, 1998.
(4) Excluding amortization of goodwill and core deposit intangible.
10
17
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Set forth below is the ratio of earnings to fixed charges for the three
months ended March 31, 2001 and 2000 and for each of the last five fiscal years.
For purposes of calculating the ratio of earnings to fixed charges, "earnings"
consists of earnings before equity in earnings of affiliates, taxes on earnings
and "fixed charges." "Fixed charges" consists of interest, amortization of debt
financing costs and the estimated interest components of rent and preferred
dividends.
FOR THE
THREE MONTHS
ENDED
MARCH 31, FOR THE YEAR ENDED DECEMBER 31,
--------------- ------------------------------------------
2001 2000 2000 1999 1998 1997 1996
------ ------ ------ ------ ------ ------ ------
(ANNUALIZED)
RATIO OF EARNINGS TO FIXED CHARGES:
Excluding interest on deposits......... 4.13x 4.22x 4.07x 4.17x 2.92x 2.88x 2.58x
Including interest on deposits......... 1.67x 1.67x 1.64x 1.64x 1.44x 1.47x 1.45x
TRADING MARKET AND PRICE; DIVIDENDS
Our common stock is traded on the New York Stock Exchange under the symbol
"BWE." The Class A common stock is not publicly traded. We have set forth below
our quarterly per share data, computed using the shares of common stock and
Class A common stock and restated for the effects of a two-for-one stock split
effective December 15, 1999:
CASH SALES PRICE
DIVIDENDS ----------------
PAID HIGH LOW
--------- ------ ------
(PER SHARE)
2001
First Quarter........................................... $0.19 $27.25 $22.50
Second Quarter.......................................... 0.19 34.78 23.50
Third Quarter (through , 2001)......
2000
First Quarter........................................... $0.17 $19.75 $14.44
Second Quarter.......................................... 0.17 19.38 14.44
Third Quarter........................................... 0.17 20.19 16.44
Fourth Quarter.......................................... 0.17 26.13 17.25
1999
First Quarter........................................... $0.15 $24.25 $19.44
Second Quarter.......................................... 0.15 21.22 18.50
Third Quarter........................................... 0.15 22.03 18.56
Fourth Quarter.......................................... 0.17 22.75 19.06
On May 4, 2001, the last full trading day prior to BNP Paribas'
announcement of its preliminary proposal to acquire us, the last reported sales
price per share of BancWest common stock was $24.98. On ,
2001, the most recent practicable trading day prior to the date of this proxy
statement, the last reported sales price per share was $ .
Stockholders should obtain current market price quotations for BancWest common
stock in connection with voting their shares.
11
18
Except as noted below, we agreed in the merger agreement not to, and to
cause our subsidiaries not to, declare or pay any dividend until the closing of
the merger without the prior written consent of BNP Paribas. However, we are
permitted under the merger agreement to declare and pay regular annual or
quarterly cash dividends consistent with past practice, not in excess of $0.19
per share per quarter, and our wholly owned subsidiaries may declare and pay
dividends in the ordinary course of business. We are also permitted, and intend,
to pay a pro rata dividend to holders of BancWest common stock based on the
number of days between the record date for the prior regular quarterly dividend
to the date the merger becomes effective. Although we expect to continue our
policy of paying quarterly cash dividends in compliance with the merger
agreement, the declaration and payment of cash dividends is subject to our
future earnings, capital requirements and financial condition. Further, the
primary source of funds that we use to pay dividends to stockholders is
dividends that we receive from our subsidiaries. Regulations limit the amount of
dividends Bank of the West and First Hawaiian Bank may declare or pay.
12
19
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
The Securities and Exchange Commission encourages companies to disclose
forward-looking information so that investors can better understand a company's
future prospects and make informed investment decisions. These statements may be
made directly in this proxy statement referring to us, and they may also be made
a part of this proxy statement by reference to other documents filed by us with
the Securities and Exchange Commission, which is known as "incorporation by
reference." Any references to the Private Securities Litigation Reform Act in
BancWest's publicly filed documents which are incorporated in the proxy
statement by reference are specifically not incorporated by reference into this
proxy statement, and other forward-looking statements otherwise made in
connection with the merger, are not protected under the safe harbor provisions
of the Private Securities Litigation Reform Act.
Words such as "anticipate," "estimate," "expect," "project," "intend,"
"plan," "believe," "target," "objective," "goal" and words and terms of similar
substance used in connection with any discussion of future operating or
financial performance, or the acquisition of us by BNP Paribas, identify
forward-looking statements. Our forward-looking statements are based on
management's current views about future events and are subject to a number of
factors and uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. The following risks
related to our business, among others, could cause or contribute to actual
results differing materially from those described in the forward-looking
statements:
- global, national and local economic and market conditions, specifically
with respect to changes in the United States economy and the impact
recent increases in energy costs will have on the California economy;
- the level and volatility of interest rates and currency values;
- government fiscal and monetary policies;
- credit risks inherent in the lending process;
- loan and deposit demand in the geographic regions where we conduct
business;
- the impact of intense competition in the rapidly evolving banking and
financial services business;
- extensive federal and state regulation of our business, including the
effect of current and pending legislation and regulations;
- whether expected revenue enhancements and cost savings are realized
within expected time frames;
- whether Bank of the West is successful in retaining and further
developing loan, deposit, customer and employee relationships relating to
its recently acquired New Mexico and Nevada branches;
- matters relating to the integration of our business with that of past and
future merger partners, including the impact of combining these
businesses on revenues, expenses, deposit attrition, customer retention
and financial performance;
- our reliance on third parties to provide certain critical services,
including data processing;
- the proposal or adoption of changes in accounting standards by the
Financial Accounting Standards Board, the Securities and Exchange
Commission or other standard setting bodies;
- technological changes;
- other factors impacting our operational plans; and
- management's ability to manage risks that result from these and other
factors.
We caution you not to place undue reliance on our forward-looking
statements, which speak only as of the date of this proxy statementProxy Statement, we have 139,546,615 shares of common stock issued and outstanding, of which BNPP (through its subsidiary, BancWest Corporation, which we refer to as the "BNPP selling stockholder") beneficially owns approximately 62.0%.
The following table sets forth information, based on data provided to us or the date
of the document incorporated by reference in this proxy statement. Except as
required by law, we are under no obligation, and expressly disclaim any
obligation, to update or alter any forward-looking statements, whether as a
result of new information, future events or otherwise.
For additional information about factors that could cause actual results to
differ materially from those described in the forward-looking statements, please
see the quarterly reports on Form 10-Q and the annual reports on Form 10-K that
BancWest has filed with the Securities and Exchange Commission (the "SEC"), with respect to beneficial ownership of shares of our common stock as described
under "Where You Can Find More Information."
All forward-looking statements attributableof March 13, 2017 for (i) all persons known by us to usown beneficially more than 5% of our outstanding common stock, (ii) each of our named executive officers, (iii) each of our directors and (iv) all of our directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or any person acting onshared voting power or investment power with respect to such securities. Except as otherwise indicated, all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws. Except as otherwise indicated, the address for each stockholder listed below is c/o First Hawaiian, Inc., 999 Bishop St., Honolulu, Hawaii 96813.
Name and Address of Beneficial Owner | Number of Shares Beneficially Owned(6) | Percent of Class | |||||
|---|---|---|---|---|---|---|---|
BNPP(1) | 86,459,620 | 62.0 | % | ||||
Directors and Named Executive Officers | |||||||
Robert S. Harrison(2) | 20,565 | * | |||||
Eric K. Yeaman(3) | 27,826 | * | |||||
Robert T. Fujioka(4) | 12,000 | * | |||||
Albert M. Yamada(5) | 38,694 | * | |||||
Matthew Cox | 5,000 | * | |||||
W. Allen Doane | 40,000 | * | |||||
Thibault Fulconis | — | * | |||||
Gérard Gil | — | * | |||||
Jean-Milan Givadinovitch | — | * | |||||
J. Michael Shepherd | — | * | |||||
Allen B. Uyeda | 4,000 | * | |||||
Michel Vial | — | * | |||||
Directors and executive officers as a group (16 persons) | 181,546 | * | |||||
- *
- Less than 1%
- (1)
- BNPP, as the ultimate parent of the BNPP selling stockholder, beneficially owns all shares of our
behalf are expressly qualified in their entiretycommon stock owned of record by thecautionary statements contained or referred to in this section. 1320 SPECIAL FACTORS BACKGROUND OF THE MERGER In November 1998, as a result of the Bank of the West merger, BNP Paribas acquired all of the outstanding shares of Class A common stock of BancWest, representing approximately 45% of the voting power of BancWest and entitling BNP Paribas to elect nine of the twenty members of ourBNPP selling stockholder. BNPP's investment decisions are made by its board of directors.In connectionBNPP is a public company withthis acquisition, BNP Paribas and BancWest entered into a standstill and governance agreement.shares listed on the Euronext Paris exchange. Thestandstill agreementaddress of BNPP issignificant because it governs our relationship with BNP Paribas and, without a waiver of certain of its provisions approved by our directors not affiliated with BNP Paribas, BNP Paribas would not have been permitted to make its proposal to acquire your shares. Specifically, the standstill agreement contains provisions restricting BNP Paribas' ability to make an offer to acquire the publicly held16 Boulevard des Italiens, 75009 Paris (France). - (2)
- Excludes 20,348 shares of
BancWest during a four-year standstill period that ends on November 1, 2002. During the standstill period, BNP Paribas was generally only permitted to make a confidential offer to the executive committee of the board of directors of BancWest, which the executive committee was under no obligation to consider or cause to be submitted to the full board of directors. In order to permit BNP Paribas to make its proposal, we waived those and other provisions in a limited manner, as discussed below. The standstill restrictions are described in greater detail under " -- Certain Relationships between BancWest and BNP Paribas." During the Fall of 2000, members of BNP Paribas management undertook a review of the development of its U.S. retail banking strategy, including consideration of the desirability and feasibility of increasing its investment in BancWest. In connection with its consideration of such a transaction, BNP Paribas engaged Merrill Lynch & Co. as its financial advisor. During the first week of February 2001, while attending a BNP Paribas executive conference, Pierre Mariani, a director of BancWest and Executive Vice President, International Retail Banking, of BNP Paribas, raised with Walter A. Dods, Jr., Chairman and Chief Executive Officer of BancWest, the general feasibility of a transaction whereby BNP Paribas would acquire all of the publicly held shares of BancWest common stock. At that time, no specific terms of a transaction were discussed although Mr. Dods indicated that if BNP Paribas were to consider making such an offer, it should take into account that the value offered to BancWest stockholders would need to be compelling in order to convince the eleven independent directors to waive the standstill provisions. In mid-March 2001, Mr. Mariani again raised with Mr. Dods the possibility of such a transaction and suggested that if BNP Paribas were to determine to make an offer, it would consider an offer in the range of about $32 in cash per share of BancWest common stock. Mr. Dods indicated to Mr. Mariani that he personally did not believe that a $32 per share offer would be compelling, but that BNP Paribas should continue to evaluate whether it could offer greater value for the shares. In addition, Mr. Mariani emphasized that in any transaction BNP Paribas might propose, it would insist that current management of BancWest remain in place. On April 2, 2001, the executive committee of the board of directors of BNP Paribas met to review, among other things, BNP Paribas' U.S. retail strategy. Among the options reviewed was the possibility of acquiring the publicly held shares of BancWest. The executive committee authorized Mr. Mariani to ask Mr. Dods to raise with the BancWest executive committee BNP Paribas' interest in having exploratory discussions concerning a possible offer to acquire the publicly held shares of BancWest common stock. Following this meeting, Mr. Mariani telephoned Mr. Dods to suggest the possibility of pursuing exploratory discussions with the BancWest executive committee or a special committee of the board of directors consisting of independent directors. Shortly thereafter, Mr. Dods called a meeting of the executive committee of the board of directors of BancWest on April 6, 2001 at which he described his discussions with Mr. Mariani and the desirability of establishing a special committee of independent directors who are neither designees of BNP Paribas nor members of management to be available to conduct any such exploratory discussions with BNP Paribas concerning a possible offer to acquire the publicly heldcommon stockof BancWest. At the recommendation of Mr. Dods, the BancWest executive committee appointed to the special committee John A. Hoag (the chair), Dr. Julia Ann Frohlich, Bert T. Kobayashi, Jr., Fujio Matsuda and Robert C. Wo, none of whom is employed by or affiliated with BancWest or BNP Paribas or any of their 1421 respective affiliates (except in their respective capacities as directors of BancWest). The executive committee gave the special committee full authority to take any and all actions that the special committee determined in its judgment to be necessary or advisableunderlying performance share units granted in connection with thereceiptIPO awards andevaluation24,739 shares ofany offer or proposal submitted by BNP Paribas or any other person to acquire the publicly heldcommon stock underlying performance share units that were granted under the LTIP, which are each subject to vesting. For a discussion ofBancWest. The special committee was also authorized to retain financial, legalthese awards, see "Executive andother advisors to assist it at BancWest's expense,Director Compensation—IPO andwas expressly authorized to take any action it deemed appropriate with respect to any BNP Paribas proposal or proposal from any other party. Following the April 6 BancWest executive committee meeting, Mr. Dods called eachLTIP Awards" and "Executive and Director Compensation—Long Term Incentive Plan."
- (3)
- Excludes 11,739 shares of
BancWest and the $32 price percommon stock underlying performance shareraised by Mr. Mariani. Mr. Dods also discussed with the special committee the fact that the special committee had been formed by the executive committee in order to be in a position to evaluate any offer from BNP Paribas or any other person should BNP Paribas or any other person make an offer at a later time. The special committee determined that it would retain Simpson Thacher & Bartlett as its legal advisor and Goldman, Sachs & Co. as its financial advisor. Both firms had represented BancWest's predecessor company, First Hawaiian, Inc., for a number of years prior to BNP Paribas' becoming a stockholder in it and had been First Hawaiian's advisorsunits granted in connection with theBankIPO awards and 24,347 shares of common stock underlying performance share units that were granted under theWest mergerLTIP, whichresulted in BNP Paribas becomingare each subject to vesting. For astockholderdiscussion ofBancWest (the old First Hawaiian). Accordingly, both firms were familiar with BancWest's businessthese awards, see "Executive andoperationsDirector Compensation—IPO andwith the standstillLTIP Awards" andother agreements between BancWest"Executive andBNP Paribas. At a meetingDirector Compensation—Long Term Incentive Plan." - (4)
- Excludes 7,826 shares of
the special committee on April 18, 2001, representatives of Simpson Thacher & Bartlett reviewed with the special committee its role and duties under applicable lawcommon stock underlying performance share units granted in connection withany proposal BNP Paribas might makethe IPO awards and 9,391 shares of common stock underlying performance share units that were granted under the LTIP, which are each subject to vesting. For a discussion of these awards, see "Executive and Director Compensation—IPO and LTIP Awards" and "Executive and Director Compensation—Long Term Incentive Plan." - (5)
- Excludes 15,652 shares of common stock underlying performance share units granted in connection with the IPO awards and 11,043 shares of common stock underlying performance share units that were granted under the LTIP, which are each subject to vesting. For a discussion of these awards, see "Executive and Director Compensation—IPO and LTIP Awards" and "Executive and Director Compensation—Long Term Incentive Plan."
- (6)
- The amounts shown do not include 4,195, 2,155, 2,768, 1,500, 27,376, 17,882 and 56,742 ordinary shares of BNPP owned by Messrs. Harrison, Fujioka, Yamada, Fulconis, Gil, and Vial, and all directors and executive officers as a group, respectively, or 5,280, 3,320, 5,280, 10,500, 6,300 and 42,677 ordinary shares of BNPP that Messrs. Harrison, Fujioka, Yamada, Gil and Vial, and all directors and executive officers as a group, respectively, have the right to acquire upon the
publicly held common stockexercise ofBancWest,options. All such amounts represent less than 1% of BNPP's outstanding ordinary shares.
EXECUTIVE AND DIRECTOR COMPENSATION
Summary Compensation Table
The following table presents compensation awarded in the resolutions
establishingfiscal years ended December 31, 2015 and 2016 to our principal executive officer, our two other most highly compensated persons serving as executive officers as of December 31, 2016 and our former Vice Chairman and Chief Administrative Officer, or paid to or accrued for those executive officers for services rendered during fiscal years 2015 and 2016. We refer to these executive officers as our "named executive officers".
Name and Principal Position | Year | Salary(3) | Bonus(4) | Stock Awards(5) | Non-Equity Incentive Plan Compensation(6) | All Other Compensation(7) | Total | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Robert S. Harrison | 2016 2015 | $ | 1,065,000 800,000 | $ | 893,000 725,000 | $ | 1,612,966 — | $ | 648,200 739,808 | $ | 110,974 110,838 | $ | 4,330,141 2,375646 | |||||||||
Eric K. Yeaman(1) | 2016 | 743,125 | 979,682 | 1,250,298 | — | 165,865 | 3,138,970 | |||||||||||||||
Robert T. Fujioka(1) | 2016 | 495,950 | 376,339 | 616,429 | 347,404 | 217,127 | 2,053,249 | |||||||||||||||
Albert M. Yamada(2) | 2016 2015 | 538,629 569,842 | 443,043 430,139 | 987,241 — | 427,357 486,861 | 89,872 158,757 | 2,486,142 1,645,599 | |||||||||||||||
- (1)
- Messrs. Yeaman and Fujioka were not named executive officers in 2015.
- (2)
- Mr. Yamada retired from First Hawaiian effective December 1, 2016.
- (3)
- The amount in this column for Mr. Harrison for fiscal year 2016 represents his salary ($875,000) and his role-based allowance ($190,000).
- (4)
- The amounts in this column for fiscal year 2015 represent annual incentive cash awards earned under the
special committeeFirst Hawaiian Incentive Plan for Key Employees (the "IPKE"). The amounts in this column for fiscal year 2016 represent annual incentive cash awards earned under the First Hawaiian, Inc. Bonus Plan (the "Bonus Plan"). To facilitate compliance with the fourth EU Capital Requirements Directive and EU Capital Requirements Regulation (collectively, ``CRD IV"), a portion of the amounts payable for certain awards under the IPKE and thepowersBonus Plan were deferred as follows: for Mr. Harrison's 2015 award, $454,000 will be paid out in semi-annual installments between 2016 and 2019, for Mr. Fujioka's 2016 award, $178,468 will be paid out later in 2017, and for Mr. Yamada's 2015 award, $264,588 will be paid out in semi-annual installments between 2016 and 2019. As described under "Annual Incentive Awards" below, a portion of thespecial committee. Representativesdeferred bonus amounts are variable based on the performance ofSimpson Thacher & Bartlett also reviewed the rights and obligations of BancWestBNPP's stock price and thespecial committeeexchange rate of euros to U.S. dollars. The amount in this column for Mr. Yeaman for fiscal year 2016 also includes the portion of his transition award underthe terms of the standstill and governance agreement if BNP Paribas requested permission to make a proposal at the present time, compared to the rights and obligations if BNP Paribas made anhis offerafter the expiration of the standstill period. Simpson Thacher & Bartlett notedletter that was payable inparticular that2016, as discussed underthe standstill and governance agreement, the special committee had the unconditional power to refuse to permit BNP Paribas to submit a business combination proposal to either the special committee or the board or to the stockholders of BancWest and that if the special committee exercised this power, BNP Paribas would be contractually prevented from proceeding with, or even publicly disclosing, any business combination proposal for BancWest. Also at this meeting, representatives of Goldman Sachs presented to and reviewed with the special committee relevant financial information relating to BancWest and financial analyses with respect to a cash offer at various prices, including the $32 price indicated by Mr. Mariani in his conversation"Offer Letter with Mr.DodsYeaman" below. - (5)
- The amounts in
early April. Eachthis column for fiscal year 2016 represent the grant date fair value, as determined in accordance with FASB ASC Topic 718, ofGoldman Sachs and management also discussed with the special committee their assessment of the likelihood that (based on knowledge of the industry but without having made specific inquiries) other financial institutions would be interested in making an offer for BancWest, including at the valuations indicated by BNP Paribas. Based on these discussions, the special committee concluded that it would not contact (and would instruct its representatives not to contact) any other financial institutions at this time. After lengthy discussion, the special committee instructed its legal and financial advisors to inform BNP Paribas, through its advisors, that the special committee would not consider a potential offer of $32 in cash perperformance shareif made, compelling enough to recommend a waiver of the standstill agreement and that in order for the special committee to consider such a waiver, BNP Paribas would need to improve the value of any such offer significantly. After discussion with its advisors, the special committee proposed $37 in cash per share as a price for BNP Paribas to consider. In addition, in light of Mr. Mariani's statement regarding retention of key executive officers, the special committee requested that its advisors determine what type of assurance BNP Paribas would require from existing management as well as BNP Paribas' position with respect to future incentive compensation for employees of BancWest following any merger. The special committee also requested that BNP Paribas advise it as to what measures BNP Paribas was prepared to take to maintain First Hawaiian Bank's historic strong commitments to Hawaii and to the Hawaii community. 1522 Over the next week, representatives of Goldman Sachs and Simpson Thacher & Bartlett held numerous exploratory discussions with representatives of Merrill Lynch & Co., BNP Paribas' financial advisor, and Cleary, Gottlieb, Steen & Hamilton, BNP Paribas' legal counsel, regarding the financial and other terms of any proposed offer and the actions required to be taken under the standstill agreement before BNP Paribas would be willing to make such an offer. Mr. Dods also held several conversations with Mr. Mariani to exchange additional detail on the matters described above that had previously been raised by Mr. Mariani. On April 27, 2001, at a telephonic meeting of the special committee, representatives of Goldman Sachs and Simpson Thacher & Bartlett each updated the special committee on the status of the exploratory discussions with BNP Paribas' legal and financial advisors. Representatives of Goldman Sachs informed the special committee that BNP Paribas continued to contemplate a potential valuation of $32 in cash per share. The special committee instructed its advisors to convey to BNP Paribas that it was essential to increase the valuations being discussed in order for the special committee to recommend a waiver of the standstill agreement so as to permit BNP Paribas to make an offer. Later that day, BNP Paribas' counsel delivered to Simpson Thacher & Bartlett a draft merger agreement reflecting the non-financial terms and conditions upon which BNP Paribas would expect to make an offer, should it determine to do so. On May 1, 2001, the special committee held a telephonic meeting with its counsel and financial advisor so that it could be informed of developments with respect to the exploratory discussions with BNP Paribas and to instruct its counsel and financial advisor on how to respond to BNP Paribas. During this discussion, representatives of Simpson Thacher & Bartlett reviewed with the special committee the proposed terms of the draft merger agreement as well as the terms of the executive employment arrangements proposed by BNP Paribas and the terms of the other incentive compensation programs proposed to be implemented by BNP Paribas following any potential transaction. BNP Paribas' initial proposals with respect to maintaining First Hawaiian Bank's historic commitment to the Hawaii community -- including a contribution of $5 millionunit awards granted pursuant to the First Hawaiian,FoundationInc. Long-Term Incentive Plan (the "LTIP") for the 2016-2018 cycle (the "2016-2018 LTIP Awards") andBNP Paribas' intentionone-time grant of restricted shares and performance share units granted in connection with our IPO. Each of the 2016-2018 LTIP Awards and performance share unit award amounts are based on performance achievement of 100%, which is the highest level of performance share unit award amounts that may be earned. - (6)
- The amounts in this column for fiscal year 2015 represent the cash incentive awards earned under the LTIP for the 2013-2015 cycle (the "2013-2015 LTIP Awards") ($621,810 for Mr. Harrison and $420,081 for Mr. Yamada) and cash incentive awards earned pursuant to
include representationawards granted in 2013 under the BNPP International Sustainability and Incentive Scheme (the "BNPP ISIS") ($117,998 for Mr. Harrison and $66,780 for Mr. Yamada). The amounts earned pursuant to the BNPP ISIS were previously omitted fromHawaiithe Summary Compensation Table for fiscal year 2015 and are being disclosed here for the first time. The amounts in this column for fiscal year 2016 represent the cash incentive awards earned under the LTIP for the 2014-2016 cycle (the "2014-2016 LTIP Awards"). Mr. Yeaman commenced employment with First Hawaiian effective June 15, 2015 and was not eligible for a 2014-2016 LTIP Award.
- (7)
- The items comprising "All Other Compensation" for 2016 are:
Name | Perquisites and Other Personal Benefits(a) | Consulting Services(b) | Tax Reimbursements(c) | Contributions to Defined Contribution Plans(d) | Insurance Premiums(e) | Total | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Robert S. Harrison | $ | 43,226 | — | $ | 38,839 | $ | 19,875 | $ | 9,034 | $ | 110,974 | ||||||||
Eric K. Yeaman | 30,386 | — | 1,782 | 131,342 | 2,355 | 165,865 | |||||||||||||
Robert T. Fujioka | 27,669 | — | 20,645 | 15,625 | 153,189 | 217,127 | |||||||||||||
Albert M. Yamada | 26,052 | $ | 16,667 | 32,780 | — | 14,374 | 89,872 | ||||||||||||
- (a)
- "Perquisites and Other Personal Benefits" include: for Messrs. Harrison and Yeaman, company-provided parking, automobile allowance and related expenses, club dues and fees, spousal travel expenses and non-cash gifts provided to First Hawaiian Bank directors; for Mr. Fujioka, company-provided parking, automobile allowance and related expenses, club dues and fees and spousal travel expenses; for Mr. Yamada, company-provided parking, automobile allowance and related expenses, spousal travel expenses and home security expenses.
- (b)
- On December 13, 2016, First Hawaiian Bank entered into a two-year consulting agreement with Mr. Yamada pursuant to which First Hawaiian Bank will pay Mr. Yamada a monthly fee of $16,667 for his consulting services in addition to certain benefits and reimbursement of certain business expenses.
- (c)
- Reflects the reimbursement of taxes in 2016 payable by Mr. Harrison in respect of his 2016 SERP accrual ($35,508) and group variable universal life insurance policy ($3,331); by Mr. Yeaman in respect of his group variable universal life insurance policy ($1,782); by Mr. Fujioka in respect of his executive life insurance plan ($13,479) and group variable universal life insurance policy ($7,166); and by Mr. Yamada in respect of his executive life insurance plan ($23,169), group variable universal life insurance policy ($9,081) and home security expenses ($529).
- (d)
- Reflects company contributions for Messrs. Harrison and Fujioka under the BancWest Corporation 401(k) Savings Plan and the BancWest Corporation Future Plan; and for Mr. Yeaman under the BancWest Corporation Future Plan and the First Hawaiian Bank Deferred Compensation Plan ($124,717), as discussed under "Savings and Retirement Plans" below.
- (e)
- Reflects insurance premiums paid for the benefit of the named executive officers, including: for Messrs. Harrison and Yeaman in a group variable universal life insurance policy, an individual disability insurance policy and a group life insurance plan; for Mr. Fujioka in an executive life insurance plan ($140,300), group variable universal life insurance policy, an individual disability insurance policy and a group life insurance plan; for Mr. Yamada in a group variable universal life insurance policy, an individual disability insurance policy, a special life insurance plan and a group life insurance plan.
Narrative Disclosure to Summary Compensation Table
Base Salary
Each named executive officer's base salary is a fixed component of compensation for each year for performing specific job duties and functions. The total base salaries earned by our named executive officers in fiscal years 2015 and 2016 are disclosed in the Summary Compensation Table above.
Base salaries for our named executive officers are reviewed periodically by our Compensation Committee. Mr. Harrison's base salary was initially set pursuant to his employment agreement with BancWest and First Hawaiian Bank, as described under "Employment Agreement with Mr. Harrison" below, but is subject to review and approval of our Compensation Committee and the Compensation Committee of the First Hawaiian Bank board of directors. Mr. Yeaman's base salary was initially set pursuant to his offer letter with BancWest and First Hawaiian Bank, as described under "Offer Letter with Mr. Yeaman" below, but is subject to review and approval of our Compensation Committee and the Compensation Committee of the First Hawaiian Bank board of directors.
Annual Incentive Awards
Beginning in 2016, annual incentive awards are made under the Bonus Plan. The Bonus Plan provides for the grant of cash-based or equity-based awards to any employee who, in the discretion of the Compensation Committee, is likely to be a "covered employee" under Section 162(m) of the
Internal Revenue Code of 1986, as amended, for the year in which an award is payable and any other executives selected by the Compensation Committee for participation in the Bonus Plan. Awards that are granted in the form of equity-based awards will be issued pursuant to the First Hawaiian, Inc. 2016 Omnibus Incentive Compensation Plan (the "2016 Equity Plan") or any other plan maintained by the Company for equity-based awards at the time of grant. Each of our named executive officers has performance goals and targets established at the beginning of each year, which are taken into account in determining the executive's annual incentive awards, but our Board or Compensation Committee has discretion to determine the final award amount. For 2016, due to the IPO, annual incentive targets were established for our named executive officers in July. The Compensation Committee determined actual incentive awards for 2016 in March 2017 based on the BancWest board of directors followingCompany's performance against financial targets and individual performance against qualitative performance measures, with discretionary modifications where deemed warranted. Annual incentive awards for 2016 are disclosed in the merger, include substantial representation on the boardsSummary Compensation Table above and were: Mr. Harrison: $893,000; Mr. Yeaman: $672,000; Mr. Fujioka: $376,339; and Mr. Yamada: $443,043.
Prior to 2016, cash incentive awards were made to key employees of First Hawaiian Bank and Bankits subsidiaries under the IPKE, a discretionary annual cash bonus program. Each of our named executive officers had performance goals and targets established at the beginning of each year, which were taken into account in determining the executive's annual incentive awards. All awards under the IPKE were discretionary as determined by the Compensation Committee of the WestFirst Hawaiian Bank board of residents from each bank's market, anddirectors. The aggregate amount of all incentive awards granted under the IPKE in any one fiscal year to maintain bank
headquarters in Hawaii -- were also discussed.
On May 3, 2001,one employee could not exceed the employee's annual base salary at a telephonic meetingthe close of the special committee,
representatives of Goldman Sachs reported that Merrill Lynch had informed them
that if BNP Paribas determined to make any offer, it would consider an offer of
$35 in cash per share of BancWest common stock. Goldman Sachs advised the
special committee that, pending review of final documents, it would expect to be
able to render an opinion that the price was fair frompreceding fiscal year.
To facilitate compliance with CRD IV, as discussed under "CRD IV Compensation Standards" below, a financial point of view
to the holders of BancWest common stock. Also at that meeting, representatives
of Simpson Thacher & Bartlett updated the special committee as to the
negotiations relating to the provisionsportion of the merger agreementamounts payable for certain awards under the IPKE and BNP Paribas'
current positions with respectthe Bonus Plan were deferred and paid out over a period of one to the management, employee, Hawaii commitment
and other issues being considered by the special committee. Representatives of
Simpson Thacher & Bartlett also reminded the special committee that, withoutfour years. In addition, a waiverportion of the standstill agreement, BNP Paribas would be contractually prevented
from making a proposal for BancWest.amounts that were deferred are variable based on the performance of BNPP's stock price and the exchange rate of euros to U.S. dollars. The special committee then discussedamounts shown in the possibility of recommending a limited waiverBonus column of the standstill agreement solelySummary Compensation Table above include the full amount of the annual incentive plan awards made to permit BNP Paribas to submit toour NEOs and, of those amounts, the special committee a $35 per share cash
offer to purchasefollowing amounts were deferred: Mr. Harrison's 2015 award: $454,000 will be paid out in semi-annual installments between 2016 and 2019; Mr. Fujioka's 2016 award: $178,468 will be paid out later in 2017; and Mr. Yamada's 2015 award: $264,588 will be paid out in semi-annual installments between 2016 and 2019. Of the publicly held shares of BancWestamounts deferred, the following amounts are variable based on the terms that BNP
Paribas had conveyed to the special committee through its advisors during the
exploratory discussions but which waiver would otherwise not change the
restrictions on BNP Paribas under the termsperformance of the standstill agreement which
would continue to remain in effect. After full discussion, the special committee
unanimously determined to waive the standstill agreement in the limited manner
described, and on May 4, 2001, a written waiver was delivered to BNP Paribas.
The executive committee of the BNP Paribas board also met on May 3, 2001.
At this meeting, the committee was apprised of the discussions between BNP
Paribas and BancWest's special committeeBNPP's stock price and the conditions it was anticipated
that BancWest would impose in connection with granting a waiverexchange rate of the
standstill agreement.euros to U.S. dollars: Mr. Harrison's 2015 award: $91,500; Mr. Fujioka's 2016 award: $197,871; and Mr. Yamada's 2015 award: $49,518.
Long-term Incentive Plan Awards
The BNP Paribas executive committee determined to
recommend to the full BNP Paribas board of directors that it consider making a
proposal to acquire the publicly held shares of common stock of BancWest should
the BancWest special committee agree to a waiver of the standstill agreement.
16
23
On May 4, 2001, the board of directors of BNP Paribas metFirst Hawaiian Bank adopted the First Hawaiian Bank Long-Term Incentive Plan, effective January 2008, which was intended to consider
making a proposalpromote the success and enhance the value of First Hawaiian Bank by providing participants with an incentive to BancWest. During this meeting, managementremain employees of BNP Paribas
described to the BNP Paribas board of directors the current restrictions on BNP
Paribas' ability to acquire 100% of BancWest and the structure of the proposal
the board was being asked to approve. Representatives of Merrill Lynch made a
presentation regarding U.S. regional bank market conditions and the financial
implications of the transaction under consideration. The board discussed the
strategic and financial implications of the transaction for BNP Paribas and
authorized management, subject to receipt of a waiver under the standstill
agreement, to submit a proposal to BancWest on terms consistent with those
discussed by the board. After the close of business on May 4, 2001 (New York
time), BNP Paribas submitted to the special committee a written proposal to
acquire all of the outstanding shares of common stock of BancWest for $35 in
cash per share and also delivered a proposed form of merger agreement. BNP
Paribas stated in the proposal letter that it would not consider reducing or
disposing of its interest in BancWest to a third party.
On May 6, 2001, the special committee met to consider the BNP Paribas
proposal with representatives of Simpson Thacher & Bartlett and Goldman Sachs
present. Also present at this meeting were all six of the non-Class A directors
who were not members of the special committee. At this meeting, representatives
of Goldman Sachs reviewed with the special committee its financial analysis with
respect to the proposed transaction and orally rendered its opinion as to the
fairness from a financial point of view to the holders of BancWest common stock
of the proposed $35 per share cash consideration. This opinion was later
delivered in writing. In addition, at this meeting, representatives of Simpson
Thacher & Bartlett reviewed the terms of the merger agreement with the special
committee. After full discussion and based on the factors described below, the
special committee unanimously determined that the merger agreement and the
merger were fair to and in the best interests of BancWest and the public holders
of BancWest common stock. The special committee then unanimously voted to
recommend to the full board of directors that it declare the merger agreement
advisable and the merger agreement and the merger to be fair to and in the best
interests of BancWest and its unaffiliated stockholders, approve the merger
agreement and recommend that the BancWest stockholders vote to adopt the merger
agreement.
Before the opening of business on May 7, 2001, BNP Paribas issued a press
release announcing its proposal and BancWest similarly issued a press release
stating that it had received the proposal from BNP Paribas and that the special
committee had unanimously determined to recommend the proposal to the full board
of directors of BancWest.
During the day on May 7, 2001, at the instruction of the special committee,
representatives of Goldman Sachs contacted other financial institutions that
potentially could have an interest in engaging in a business combination
transaction with BancWest to apprise them of the BNP Paribas proposal. None of
those financial institutions expressed an interest in pursuing a transaction
with BancWest.
On the evening of May 7, 2001 (Hawaii time), the board of directors of
BancWest met to consider the recommendation of the special committee with
respect to the BNP Paribas proposal. Representatives of Simpson Thacher &
Bartlett and Goldman Sachs were present at the meeting. Following a review of
BNP Paribas' proposal, the terms of the merger agreement, Goldman Sachs'
fairness opinion to the special committee and further discussions, the nine
Class A directors and the eleven non-Class A directors, voting as separate
classes as required by the standstill agreement, voted to approve a second
waiver of the standstill agreement to allow BNP Paribas to enter into the merger
agreement with BancWest. The board of directors, by a unanimous vote of all of
the directors not affiliated with BNP Paribas (constituting a majority of the
full board), and with the Class A directors present at the meeting abstaining,
then voted to approve the merger agreement, having determined it to be fair to
and in the best interests of BancWest and the unaffiliated holders of BancWest
common stockFirst Hawaiian Bank and to recommend adoption ofhelp it accomplish financial and other goals over the merger agreement by the BancWest
stockholders.
On May 8, 2001 (Paris time), the merger agreement was executed and the
agreement of the parties was publicly announced.
The merger agreement waslong term. Our Board amended and restated as of July 19, 2001 to
reflect some technical corrections, including the ability of BancWest to pay a
pro rata dividend to its stockholders.
17
24
RECOMMENDATIONS OF THE SPECIAL COMMITTEE AND OUR BOARD OF DIRECTORS; FAIRNESS OF
THE MERGER
RECOMMENDATIONS OF THE SPECIAL COMMITTEE AND OUR BOARD OF DIRECTORS.
On May 6, 2001,First Hawaiian Bank Long-Term Incentive Plan effective August 9, 2016, which was assumed by First Hawaiian and retitled the special committee unanimously determined that the termsFirst Hawaiian, Inc. Long-Term Incentive Plan. The Compensation Committee of the merger andFirst Hawaiian Board sets performance goals under the other transactions contemplated by the merger agreement
are fair to, andLTIP for overlapping three-year performance periods. Each of our named executive officers participates in the best interests of, BancWestLTIP.
Awards made prior to 2016 were paid in cash within two and its unaffiliated
stockholders and unanimously determined to recommend thata half months after the board of directors
of BancWest:
- approve the merger agreement and the merger and the other transactions
contemplated by the merger agreement;
- determine that the termsend of the merger agreementapplicable performance period. The 2013-2015 LTIP Awards were granted in 2013 and the merger are fairhad a performance period from 2013-2015 with an earn-out range of 0% to and200% of target. The 2013-2015 LTIP Awards were earned for each of our named executive officers at a total payout rate of 180.2%.
The 2013-2015 LTIP Awards, as reported in the best interestsSummary Compensation Table above, were $621,810 for Mr. Harrison and $420,081 for Mr. Yamada. The 2014-2016 LTIP Awards were granted in 2014 and had a performance period from 2014-2016 with an earn-out range of BancWest and its unaffiliated
stockholders;
- declare that the merger agreement is advisable; and
- recommend that BancWest's stockholders adopt the merger agreement.
At0% to 200% of target. The 2014-2016 LTIP Awards were earned for each of our named executive officers at a meeting held on May 7, 2001, the boardtotal payout rate of directors of BancWest, by a
unanimous vote of the eleven non-Class A directors (with the eight Class A
directors present at the meeting abstaining) determined to accept the special
committee's recommendation and:
- approved the merger agreement and the merger and the other transactions
contemplated by the merger agreement;
- determined that the terms of the merger agreement and the merger are fair
to, and181.0%. The 2014-2016 LTIP Awards, as reported in the best interests of, BancWestSummary Compensation Table above, were $648,200 for Mr. Harrison, $347,404 for Mr. Fujioka, and its unaffiliated
stockholders;
- declared that$427,357 for Mr. Yamada.
Awards made in 2016 were made under the merger agreement is advisable;amended and - determinedrestated LTIP, which provides for performance share unit awards with successive, overlapping three-year performance periods to recommend that BancWest's stockholders adopt the merger
agreement.
Neither the special committee nor the board of directors makes any
recommendation as to how you should vote with respect to the proposal to adjourn
the special meeting.
FAIRNESS OF THE MERGER.
Reasons for the Special Committee's Determination. In reaching the
conclusions described above, the special committee considered the following
material factors, each of which, in the special committee's judgment, supported
its conclusions as to fairness:
- the presentation from and the opinion delivered by Goldman, Sachs & Co.,
that, based uponbe granted under and subject to the assumptions and limitations stated in
the opinion, as of the date of the opinion, the consideration to be
received by unaffiliated holders of shares of BancWest common stock
pursuant to the merger agreement is fair from a financial point of view
to such holders. The presentation of Goldman Sachs involved various
valuation analyses of BancWest that are described under "-- Opinion of
Goldman, Sachs & Co." The full text of the opinion of Goldman Sachs,
which sets forth assumptions made, matters considered and limitations on
the review undertaken in connection with the opinion, is attached as
Annex B to this proxy statement; we encourage stockholders to read the
opinion in its entirety;
- valuations of BancWest compared to its peer group using standard
valuation methodologies based on projected GAAP and cash earnings per
share. The special committee noted that BancWest generally traded at
prices consistent with its peer group based on these valuation
methodologies. The special committee also compared BancWest's financial
condition and operating performance to its peer group based on three key
financial ratios -- tangible common equity as a percentage of tangible
assets, cash return on average common equity, and efficiency ratio -- and
noted that BancWest was significantly below the median of its peer group
in terms of cash return on average common equity and consistent with the
median on the other two measures; see "-- Opinion of Goldman, Sachs &
Co.";
- the relationship of the consideration to be paid in the merger to the
recent and historical market prices of the BancWest common stock. The
special committee noted that the merger consideration of $35 per
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share of common stock represents a premium of 40.1% over the closing
price per share on May 4, 2001, the last trading day before BNP Paribas'
proposal was publicly announced, a 47.6% premium to the closing stock
price per share on April 4, 2001, one month before the public
announcement, and a 28.4% premium to the closing stock price per share on
January 29, 2001, the highest closing stock price ever of the common
stock before the public announcement of the BNP Paribas proposal;
- the relationship of the consideration to be paid in the merger compared
to prices paid in comparable bank mergers since 1997. The special
committee noted that the price proposed to be paid by BNP Paribas was
significantly above the median prices paid in the past several years based
on standard valuation methodologies (including price to last twelve
months' earnings per share; price to estimated next fiscal year earnings
per share; price to tangible book value per share; and premium to market
price); see "-- Opinion of Goldman, Sachs & Co.";
- the special committee's belief that, after extensive negotiations by and
on behalf of the special committee with BNP Paribas and its
representatives, BancWest had obtained the highest price per share that
BNP Paribas was willing to pay. The special committee formed its belief
based on statements made by BNP Paribas and its representatives during
the negotiations as well as the special committee's understanding of the
impact of the merger on BNP Paribas' earnings per share;
- BNP Paribas' beneficial ownership of approximately 45% of the currently
outstanding voting stock of BancWest and the effects of such ownership on
the alternatives available to BancWest. The special committee further
considered that BNP Paribas had stated that it would not consider
reducing or disposing of its interest in BancWest to a third party;
- the fact that BNP Paribas was currently restricted in making an offer to
acquire the publicly held shares of BancWest by the terms of the
standstill agreement with BancWest, which restriction would terminate in
November 2002. The special committee considered, after discussions with
representatives of Goldman Sachs and management of BancWest, whether or
not it was likely that a third party would make an offer for BancWest at
a value comparable to or in excess of that being offered by BNP Paribas.
As part of this analysis, the special committee took into account that,
under the terms of the standstill and governance agreement, if BNP
Paribas were to make an offer after the expiration of the standstill
period, BancWest would be permitted to seek third party offers for
BancWest and that BNP Paribas would be required to vote its shares in
favor of any superior offer received by BancWest if BNP Paribas chose not
to make a better proposal. Based on these discussions, the special
committee believed that it was unlikely to achieve better terms following
the expiration of the standstill period than those currently proposed by
BNP Paribas and there was no assurance that BNP Paribas or another
acquiror would be willing to make any offer in the future;
- the likelihood that the merger would be consummated, including the
absence of unusual requirements or conditions to the merger. The special
committee further considered that BNP Paribas has the financial capacity
to consummate the merger expeditiously;
- other provisions of the merger agreement, including the ability of
BancWest to, subject to specified conditions, (a) provide information to,
and negotiate with, a third party which makes an unsolicited acquisition
proposal for BancWest and (b) terminate the merger agreement if the
BancWest board of directors, acting upon the recommendation of the
special committee, accepts a superior proposal from a third party,
subject to the payment of a termination fee; and
- that fact that appraisal rights will be available under Delaware law with
respect to the merger.
Reasons for the Special Committee's Determination -- Net Book Value and
Going Concern Value. In reaching its conclusions described above, the special
committee also considered the following factors, each of which, in the special
committee's judgment, supported its conclusions as to fairness:
- Net Book Value. The special committee considered the relationship
between the $35 per share of cash consideration to be paid in the merger
to the per share tangible book value of BancWest of approximately $10.33
as of May 6, 2001. The special committee noted that this premium
represents an offer price to tangible book value ratio of approximately
3.4 to 1. This multiple was higher than the ratio of BancWest's trading
price to tangible book value of 2.4 to 1, the median trading price to
tangible
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book value for selected west coast banks of 2.8 to 1 and the median ratio
of share price to tangible book value for selected bank transactions from
1999 through 2001.
- Going Concern Value. The special committee considered the internally
generated forecasts for BancWest compiled by BancWest's management and the
risks associated with meeting those projections. After discussion with its
advisors and with BancWest management, the special committee believed that
the opportunity to achieve $35 per share in cash under the terms of the
merger agreement was a superior alternative to attempting to achieve value
in excess of $35 per share in cash as an independent publicly traded
company. In making this determination, the special committee considered
the outlook for the banking industry and the merger environment for
financial institutions generally. Some of the factors considered by the
special committee were the elimination of pooling accounting (which might
adversely affect both the level of merger activity and the prices that
acquirors are prepared to pay) and the impact of a slowing economy on
BancWest, including the risks of slowing revenue growth and rising levels
of non performing assets in the future. The special committee was also
aware that using certain assumptions, the discounted cash flow analysis
prepared by Goldman Sachs resulted in values greater than the $35 per
share in cash merger consideration; however the special committee also
recognized that achieving those higher values would require cash net
income multiples that would be significantly greater than the current
BancWest multiple and the median multiple of selected west coast banks.
Accordingly, the special committee did not regard these higher valuations
as likely to be obtainable under foreseeable circumstances. The special
committee also recognized that there were risks involved with the
assumptions contained in management's projections as well as the analyses
prepared by Goldman Sachs summarized below underlying an implied value of
BancWest common stock in excess of $35 per share in cash, including
achieving the financial results set forth in the forecasts as well as
market conditions occurring which would provide favorable valuation
multiples.
In making its recommendation to the full board of directors at the May 7
meeting, the special committee also noted that after the public announcement of
the BNP Paribas proposal that morning, no third party had contacted BancWest or
its advisors -- either on its own or subsequent to the telephone calls from
Goldman Sachs described above under "Background of the Merger" -- about the
possibility of discussing a business combination proposal with BancWest.
During its consideration of the transaction with BNP Paribas described
above, the special committee and the board of directors were also aware that
some of the directors and members of management of BancWest may have interests
in the merger that are different than or in addition to those of BancWest
stockholders generally, all as described under "-- Interest of Directors and
Executive Officers in the Merger."
Reasons for the Board's Determination. In reaching its determinations
referred to above, the board of directors of BancWest considered the following
material factors, each of which, in the view of the board of directors of
BancWest, supported its determinations as to fairness:
- the conclusions and recommendations of the special committee;
- the factors referred to above as having been taken into account by the
special committee, including the receipt by the special committee of the
opinion of Goldman Sachs that, based upon and subject to the assumptions
made, matters considered and limitations on review undertaken in
connection with its opinion, as of the date of the opinion, the per share
consideration to be received by the unaffiliated stockholders of BancWest
in the merger is fair from a financial point of view to such holders; and
- the fact that the merger consideration and the terms and conditions of the merger2016 Equity Plan. The amended and restated LTIP is administered by our Compensation Committee, which will designate employees to participate in the amended and restated LTIP and set performance goals for the performance share units. We granted 2016-2018 LTIP Awards in the form of performance share units to certain executives, including 24,739 performance share units to Mr. Harrison; 24,347 performance share units to Mr. Yeaman; 9,391 performance share units to Mr. Fujioka; and 11,043 performance share units to Mr. Yamada. The performance share unit award agreement for the 2016-2018 LTIP Awards provides for cliff vesting of performance share units within 90 days following the end of a three-year performance period. Performance share units for the 2016-2018 LTIP Awards will be earned between 0-100% of target based on performance.
The 2014-2016 LTIP Awards, which were paid in cash in 2017, and the result2016-2018 LTIP Awards, which were granted in performance share units in 2016, are both reported in the Summary Compensation Table as compensation for the 2016 fiscal year.
BNPP Cash Incentive Awards
Prior to the IPO, BNPP granted awards under the BNPP Contingent Sustainable and International Scheme (the "BNPP CSIS") and the BNPP Group Sustainability and Incentive Scheme (the "BNPP GSIS") to certain executives, including each of arm's-length negotiations betweenour named executive officers. BNPP granted cash-based awards under the BNPP CSIS in 2016 with a performance period from 2016-2018 to certain executives, including awards at target of $110,000 for Mr. Harrison, $50,000 for Mr. Yeaman and $25,000 for each of Messrs. Fujioka and Yamada. BNPP granted cash-based awards under the BNPP GSIS in 2015 with a performance period from 2015-2017 to certain executives, including awards at target of $110,000 for Mr. Harrison and $60,000 for each of Messrs. Fujioka and Yamada. The performance measures for these awards are based on BNPP's operating performance, corporate social responsibility performance and positive pre-tax income. These BNPP awards will be reported in the Summary Compensation Table in the year in which they are earned.
IPO Awards
In connection with the IPO, our Board approved the award of special committeeone-time grants of restricted shares and BNP Paribas and their respective advisors.
The boardperformance share units (the "IPO awards") to certain key executives, including each of directors consideredour named executive officers, which were granted upon the recommendationcompletion of the special
committee but made its own evaluation, based on the factors enumerated above and
below,IPO. An aggregate of the substantive and procedural fairness of the merger.
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The members of the board of directors of BancWest, including the members of
the special committee, evaluated the merger in light of their knowledge of the
business, financial condition and prospects of BancWest, and considered the
advice of financial and legal advisors.
Procedural Fairness. The board of directors of BancWest, including the
members of the special committee, believes that the merger is procedurally fair
because, among other things:
- the special committee consisted of independent directors appointed to
represent the interests of unaffiliated BancWest stockholders and was
advised by independent financial and legal advisors;
- the executive committee of the board of directors delegated broad powers
to the special committee to conduct its evaluation of BNP Paribas' offer,
negotiate with BNP Paribas and consider alternatives to a transaction
with BNP Paribas. In addition to these broad powers,192,609 shares were granted pursuant to the termsIPO awards.
The restricted share portion of the standstill agreement, the special committee had the
unconditional ability to prohibit BNP Paribas from submitting a proposal
and to reject in its sole discretion any proposal it permitted BNP
Paribas to submit, and if the special committee took any of these
actions, BNP Paribas would be prohibited by the standstill agreement from
submitting its proposal to either the board of directors or the
stockholders of BancWest and, accordingly, that the terms of the
standstill agreement facilitated an arm's-length negotiation between the
special committee and BNP Paribas; and
- the per share price to be paid by BNP Paribas resulted from the active
arm's-length bargaining between representatives of the special committee,IPO awards was fully vested on the one hand, and representatives of BNP Paribas, on the other.
- the board of directors of BancWest and the special committee recognized
that the merger is not conditioned on the adoption of the merger
agreement by the holders of a majority of the outstanding shares of
BancWest capital stock other than shares held by BNP Paribas and its
affiliates. However, the board of directors of BancWest and the special
committee noted that the merger agreement requires that holders of
66 2/3% of the outstanding shares of common stock and Class A common
stock, voting together as a single class, vote to adopt the merger
agreement. Although this super-majority vote can be waived by BancWest,
neither the special committee nor the board of directors has any present
intention of waiving this condition.
Neither the special committee nor the board of directors of BancWest
considered the liquidation value of BancWest because BNP Paribas had advised the
special committee and the board of directors that it intended to continue to
operate BancWest as a going concern after the merger and because liquidation
value is not a conventional method of evaluating financial services businesses.
Therefore, no appraisal of the liquidation values was sought for purposes of
evaluating the merger. In addition, neither the special committee nor the board
of directors of BancWest considered the purchase price paid in previous
purchases of BancWest common stock, as described under "Other
Matters -- Transactions in Capital Stock by Certain Persons -- BancWest
Purchases of Common Stock" because all of these purchases constituted share
repurchases from employees at prevailing market prices of stock they acquired
under various benefit plans.
In view of the wide variety of factors considered in connection with the
evaluation of the merger, neither the special committee nor the board of
directors of BancWest found it practicable to, and did not, quantify or
otherwise attempt to assign relative weights to the specific factors they
considered in reaching their determinations.
This discussion of the information and factors considered and given weight
by the special committee and the board of directors of BancWest is not intended
to be exhaustive but is believed to include all material factors considered by
the special committee and the board of directors of BancWest.
PRELIMINARY PRESENTATION BY GOLDMAN, SACHS & CO.
As noted above under "-- Background of the Merger," Goldman Sachs made a
preliminary presentation to the special committee on April 18, 2001. The
financial information and financial analyses presented to the special committee
at that meeting comprised a significant part of the information that ultimately
formed the basis for Goldman Sachs' opinion as described below under "-- Opinion
of Goldman, Sachs & Co." and were
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substantially the same as the information and analyses summarized in that
section (except that the April 18 materials included analyses of a transaction
at a variety of prices, rather than specifying the merger consideration of $35
per share that was ultimately negotiated).
OPINION OF GOLDMAN, SACHS & CO.
On May 6, 2001, Goldman Sachs delivered its opinion, subsequently confirmed
in writing on May 8, 2001, to the special committee of the BancWest board of
directors that, as of the date of its opinion and based upongrant and subject to transfer restrictions that lapsed six months following the considerations set forth in its opinion, the merger consideration of $35 in cash
per share to be received by the unaffiliated holders of BancWest common stock
under the merger agreement was fair from a financial point of view to those
stockholders.
The full textgrant date for 50% of the opinion, which sets forthrestricted shares and 18 months following the assumptions made,
procedures followed, matters considered and limits ongrant date for the review undertaken, is
attached as Annex B to this proxy statement. The advisory services of Goldman
Sachs and the opinion were provided to the special committee for its information
and assistance in connection with its considerationremaining 50% of the merger and the
opinion is directed only to the fairnessrestricted shares. The performance share units portion of the merger consideration from a
financial point of view to BancWest stockholders and does not constitute a
recommendation to any BancWest stockholder as to how that stockholder should
vote at the special meeting. The description of the opinion set forth below is
qualifiedIPO awards will vest in its entirety by reference to Annex B. We urge you to read the
opinion in its entirety.
In connection with its opinion, Goldman Sachs reviewed, among other things:
- the merger agreement;
-three equal annual reports to stockholders and annual reportsinstallments on Form 10-K of
BancWest for the five years ended December 31, 2000;
- annual reports to stockholders of BNP Paribas for the five years ended
December 31, 2000;
- specified interim reports to stockholders and quarterly reports on Form
10-Q of BancWest;
- specified interim reports to stockholders of BNP Paribas;
- specified other communications from BancWest to its stockholders;
- specified internal financial analyses and forecasts regarding BancWest
prepared by its management and approved by its management for use by
Goldman Sachs in connection with its opinion;
- the current and historical reported price and trading activity for shares
of BancWest common stock;
- specified financial and stock market information for BancWest, which it
compared with similar information for specified other companies in the
banking industry, the securities of which are publicly traded;
- the financial terms of specified recent business combinations in the
banking industry specifically and in other industries generally; and
- other information, studies and analyses as it considered appropriate in
the circumstances.
Goldman Sachs also held discussions with members of the senior management of
BancWest regarding their assessment of the past and current business operations,
financial condition and future prospects of and for BancWest.
Goldman Sachs relied upon the accuracy and completeness of all of the
financial, accounting and other information discussed with or reviewed by it and
assumed the accuracy and completeness of that information for purposes of
rendering its opinion. In that regard, Goldman Sachs assumed, with the special
committee's consent, that the internal financial forecasts prepared by the
management of BancWest were reasonably prepared reflecting the best currently
available estimates and judgments of BancWest. Goldman Sachs did not make any
independent evaluation or appraisal of the assets and liabilities of BancWest
(including off-balance sheet assets and liabilities) and neither BancWest nor
any other party provided Goldman Sachs with any such
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evaluation or appraisal. Goldman Sachs noted that BNP Paribas owns 45% of the
outstanding capital stock of BancWest and has expressed no interest in a
business combination involving BancWest other than a transaction as a purchaser
of shares of BancWest capital stock.
The following is a brief summary of the material financial analyses
presented by Goldman Sachs to the special committee of the BancWest board of
directors and each of the other non-BNP Paribas directors who were also present
on May 6, 2001 in connection with providing its opinion.
THIS SUMMARY INCLUDES INFORMATION PRESENTED IN TABULAR FORMAT. THESE TABLES
ALONE ARE NOT A COMPLETE DESCRIPTION OF GOLDMAN SACHS' FINANCIAL ANALYSES. THESE
TABLES SHOULD BE READ TOGETHER WITH THE TEXT OF EACH SUMMARY.
SELECTED COMPANIES ANALYSIS.
Goldman Sachs reviewed and compared certain financial and stock market
information as well as certain asset, equity and profitability ratios of
BancWest with the following publicly traded commercial banking organizations:
Wells Fargo & Company U.S. Bancorp
Comerica Incorporated Zions Bancorp
UnionBanCal Corporation City National Corporation
Pacific Century Financial Corp. Westamerica Bancorporation
Silicon Valley Bancshares Pacific Capital Bancorp
The financial data used were as of the latest twelve months ended March 31,
2001 and the market data and earnings estimates were as of May 4, 2001.
Projected earnings per share were based on analysts' estimates from I/B/E/S
International, Inc., or I/B/E/S, an independent data service that compiles
earnings estimates of institutional securities research analysts.
The following table summarizes the results of the selected companies
analysis:
SELECTED
COMPANIES
MEDIAN BANCWEST
--------- --------
Price to projected earnings multiple, based on estimates of
2001 GAAP earnings per share.............................. 13.2x 13.1x
Price to projected earnings multiple, based on estimates of
2002 GAAP earnings per share.............................. 11.1x 11.6x
Price to projected earnings multiple, based on estimates of
2001 cash earnings per share.............................. 11.9x 11.6x
Price to projected earnings multiple, based on estimates of
2002 cash earnings per share.............................. 10.4x 10.4x
Price to tangible book value per share multiple............. 2.8x 2.4x
Price to projected earnings multiple, based on estimates of
2002 earnings per share to projected five-year growth rate
of earnings per share..................................... 1.0x 1.4x
Tangible common equity as a percentage of tangible assets... 7.8% 6.9%
Cash return on average common equity........................ 27.2% 20.9%
Efficiency ratio (non-interest expense, excluding
non-recurring items and intangible amortization, divided
by the sum of net interest income and non-interest
income)................................................... 52.3% 51.4%
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MARKET HISTORY ANALYSIS.
Goldman Sachs compared the $35 in cash per share purchase price provided
for in the merger agreement with the closing price per share of BancWest common
stock on selected dates to identify the premium reflected by the $35 per share
purchase price. The selected dates, and the premiums, were as follows:
BASIS FOR PREMIUM
DATE SELECTION TO MARKET
- ---------------- ---------------- ---------
January 29, 2001 All-time High 28.4%
June 23, 2000 52-week Low 150.0
May 4, 2001 One Day Prior* 40.1
April 27, 2001 One Week Prior* 40.9
April 4, 2001 One Month Prior* 47.6
- ---------------
* Based on the date of preparation of the relevant materials.
PRO FORMA ANALYSIS.
Goldman Sachs analyzed the pro forma impact of the merger on earnings per
share of BNP Paribas to determine whether the transaction would be earnings
accretive or dilutive. In a cash transaction such as the present one, the
analysis of the estimated pro forma impact of a transaction on the other party
could indicate the degree to which a proposed acquisition price is attractive to
the other party. This analysis is therefore a factor that may indicate whether
the other side would be willing to consider further adjustments to a proposed
acquisition price. Based upon earnings estimates from the management of BancWest
and I/B/E/S median estimates of earnings for BNP Paribas (and management's
anticipation that there would be no meaningful cost or revenue synergies to BNP
Paribas from the transaction), this analysis indicated that as to GAAP earnings,
the merger would be earnings dilutive to holders of BNP Paribas common stock by
0.8% for 2001 and 0.4% for 2002. As to cash earnings per share, the same
analysis indicated that the merger would be earnings accretive to holders of BNP
Paribas common stock by 1.0% for 2001 and 1.3% for 2002.
DISCOUNTED CASH FLOW ANALYSIS.
Goldman Sachs performed two discounted cash flow analyses, which are
analyses of the present value of projected cash flows using discount rates and
forward earnings multiples, to determine a range of notional present values per
share of BancWest common stock. The range was determined using a dividend
discount model, with all cash flows discounted back to December 31, 2001. In
performing this analysis, Goldman Sachs used both I/B/E/S median estimates and
estimates provided by the management of BancWest. The I/B/E/S case projected
"Old" GAAP earnings per share of $1.90 and $2.15 for 2001 and 2002, respectively
and forecast a growth rate on earnings of 8.5% for 2003 - 2005, per I/B/E/S
long-term growth rate. The management case projected "Old" GAAP earnings per
share of $1.92, $2.10 and $2.30 for 2001, 2002, and 2003, respectively, and
forecast a growth rate on earnings of 10% for 2004 - 2005. "Old" GAAP earnings
are earnings that include the impact of goodwill amortization in BancWest's
earnings. Using discount rates ranging from 10% to 15%, and terminal price to
forward earnings value multiples ranging from 12.0x to 18.0x, the I/B/E/S case
resulted in a range of implied notional present values from $23.52 to $39.68 per
share of BancWest common stock and the management case resulted in a range of
implied notional present values from $24.15 to $40.79 per share of BancWest
common stock, as compared with the merger consideration of $35 in cash per share
of BancWest common stock provided for in the merger agreement. Goldman Sachs
used discount rates in this analysis that are commonly used by financial
advisors in conducting similar discounted cash flow analyses of commercial
banking organizations comparable to BancWest. The terminal forward earning
multiples used are consistent with current price earnings multiples for BancWest
and for other comparable commercial banking organizations.
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The following table summarizes this analysis:
Implied notional present values per share based on I/B/E/S earnings
estimates:
TERMINAL PRICE TO FORWARD EARNINGS MULTIPLE
--------------------------------------------
12X 14X 16X 18X
-------- -------- -------- --------
DISCOUNT 10.0% $27.80 $31.76 $35.72 $39.68
RATE 12.5 25.54 29.16 32.78 36.40
15.0 23.52 26.83 30.15 33.46
Implied notional present values per share based on management earnings
projections:
TERMINAL PRICE TO FORWARD EARNINGS MULTIPLE
--------------------------------------------
12X 14X 16X 18X
-------- -------- -------- --------
DISCOUNT 10.0% $28.55 $32.63 $36.71 $40.79
RATE 12.5 26.23 29.96 33.68 37.41
15.0 24.15 27.56 30.97 34.39
SELECTED TRANSACTION ANALYSIS.
Goldman Sachs reviewed publicly available information for pending and
completed merger and acquisition transactions in the banking industry. The
selected transactions reviewed by Goldman Sachs comprised 30 transactions
completed or announced since January 1, 1997 and prior to May 6, 2001 with a
value greater than $1.0 billion, including the following 11 transactions
announced during 2000 and 2001, but excluding all merger of equals transactions
using the pooling of interests method of accounting:
2000 TRANSACTIONS:
- BB&T Corp./One Valley Bancorp Inc.
- Wells Fargo & Co./First Security Corp.
- M&T Bank Corp/Keystone Financial Inc.
- Chase Manhattan Corporation/J.P. Morgan & Co., Inc.
- FleetBoston Financial Corp./Summit Bancorp
- Firstar Corp./U.S. Bancorp
- Comerica Inc./Imperial Bancorp
- Fifth Third Bancorp/Old Kent Financial Corp.
2001 TRANSACTIONS (TO MAY 6, 2001):
- BB&T Corp./F&M National Corp
- Royal Bank of Canada/Centura Banks Inc.
- First Union Corp./Wachovia Corp.
The following table compares information with respect to the merger and the
medians for the selected transactions for the years indicated:
MEDIAN OF SELECTED TRANSACTIONS ANNOUNCED IN THE YEAR
THE -------------------------------------------------------
MERGER 2001 2000 1999 1998 1997
------ ------- ------- ------- ------- -------
Price to last twelve months' earnings
per share............................. 19.0x 18.8x 15.0x 21.1x 27.8x 23.4x
Price to estimated next fiscal year
earnings per share.................... 18.40 15.90 13.30 19.00 20.80 20.10
Price to tangible book value per
share................................. 3.40 2.79 3.11 3.36 4.11 3.98
Premium to market price, one day prior
to announcement....................... 40.1% 29.5% 18.6% 26.4% 20.5% 22.4%
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The preceding discussion is a summary of the material financial analyses
that Goldman Sachs performed and presented to the special committee of the
BancWest board of directors on May 6, 2001, but it does not purport to be a
complete description of the analyses performed by Goldman Sachs or of its
presentation. The preparation of a fairness opinion is a complex process and is
not generally susceptible to partial analysis or summary description. Goldman
Sachs believes that selecting portions of the analyses or of the summary set
forth above, without considering the analyses as a whole, could create an
incomplete view of the processes underlying Goldman Sachs' opinion. In arriving
at its fairness determination, Goldman Sachs considered the results of all the
analyses and did not attribute any particular weight to any particular factor or
analysis considered by it. Rather, Goldman Sachs made its determination as to
fairness on the basis of its experience and professional judgment after
considering the results of all the analyses. No company used in the above
analyses as a comparison is directly comparable to BancWest and no transaction
used is directly comparable to the proposed merger.
In performing its analyses, Goldman Sachs made numerous assumptions with
respect to industry performance, general business, economic and regulatory
conditions and other matters, many of which are beyond the control of BNP
Paribas or BancWest. These analyses were prepared solely for purposes of Goldman
Sachs providing its opinion to the special committee of the BancWest board of
directors as to the fairness from a financial point of view of the merger
consideration of $35 in cash per share to be received by the holders of BancWest
common stock under the merger agreement. The analyses do not purport to be
appraisals or to reflect the prices at which businesses or securities actually
might be sold. The analyses performed by Goldman Sachs are not necessarily
indicative of actual values, trading values or actual future results, which may
be significantly more or less favorable than suggested by such analyses. Because
such estimates are inherently subject to uncertainty, being based upon numerous
factors or events beyond the control of BNP Paribas or BancWest or their
respective advisors, none of BNP Paribas, BancWest, Goldman Sachs or any other
person assumes responsibility if future results are materially different from
those forecasted. In addition, as described above, Goldman Sachs' opinion was
one of many factors taken into consideration by the special committee of the
BancWest board of directors in making its determination to approve the merger.
See "-- Recommendations of the Special Committee and Our Board of Directors;
Fairness of the Merger."
Goldman Sachs, as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for estate, corporate and other purposes. The special committee
selected Goldman Sachs as its financial advisor because Goldman Sachs is an
internationally recognized investment banking firm that has substantial
experience in investment banking in general, including transactions similar to
the proposed merger, and because of its familiarity with, and prior work for,
BancWest. In addition, Goldman Sachs may from time to time effect transactions
with, or hold securities, including derivative securities, of, BancWest or BNP
Paribas or affiliated entities for its own account or for the accounts of
customers. Goldman Sachs is familiar with BancWest having provided certain
investment banking services to BancWest from time to time, including having
acted as financial advisor to First Hawaiian, Inc., predecessor to BancWest, in
connection with its merger with BancWest, then a wholly owned subsidiary of BNP
Paribas, in November 1998; having acted as BancWest's financial advisor in
connection with a block trade of 350,000 shares of BancWest common stock in June
1999; having acted as joint-bookrunning manager with respect to an offering of
$150 million aggregate principal amount of Quarterly Income Preferred Securities
of BancWest in December 2000; and having acted as financial advisor to the
special committee in connection with, and having participated in certain of the
negotiations leading to, the merger agreement. Goldman Sachs also has provided
certain investment banking services to BNP Paribas from time to time, including
having acted as financial advisor to BNP Paribas in connection with its
acquisition of Compagnie Financiere de Paribas SA in October 1999 and having
acted as joint-lead manager in connection with the offer of $500 million of
non-cumulative trust preferred securities of BNP Paribas in November 2000. In
addition, Goldman Sachs may provide investment banking services to BNP Paribas
in the future.
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BancWest has agreed to pay Goldman Sachs an advisory fee equal to 0.25% of
the aggregate consideration paid in the transaction. Pursuant to the engagement
letter, BancWest (1) has paid Goldman Sachs $500,000 upon announcement of the
merger and (2) upon completion of the merger will pay Goldman Sachs a
transaction fee currently calculated to be approximately $6.13 million, reduced
by the fee previously paid at announcement. In addition, BancWest has agreed to
reimburse Goldman Sachs for its reasonable out-of-pocket expenses, including
attorneys' fees, incurred in connection with the services provided by it and to
indemnify and hold harmless Goldman Sachs and certain related parties from and
against certain liabilities and expenses, including certain liabilities under
the federal securities laws, incurred in connection with its engagement.
OUR FORECASTS
We do not, as a matter of course, publicly disclose forecasts as to future
revenues or earnings. However, we did prepare forecasts which we provided to
Goldman Sachs in connection with its fairness opinion analyses. We included the
forecasts in this proxy statement only because we provided that information to
Goldman Sachs and Goldman Sachs used the data in connection with its fairness
opinion and related presentation to the special committee. See "-- Opinion of
Goldman, Sachs & Co."
Our forecasts were not prepared with a view to public disclosure. We expect
the actual and forecasted results to differ, and actual results may be
materially different than those set forth below. We did not prepare the
forecasts with a view to complying with the published guidelines of the
Securities and Exchange Commission regarding forecasts, and we did not prepare
the forecasts in accordance with the guidelines established by the American
Institute of Certified Public Accountants for preparation and presentation of
financial forecasts. The projected financial information set forth below has
been prepared by and is the responsibility of our management. Moreover,
PricewaterhouseCoopers, our independent auditors, has not examined, compiled or
applied any procedures to the forecasts in accordance with standards established
by the American Institute of Certified Public Accountants and expresses no
opinion or any assurance on their reasonableness, accuracy or achievability. The
PricewaterhouseCoopers report which is incorporated by reference in this proxy
statement relates to our historical financial information. It does not extend to
the projected financial information and you should not read it to do so.
The projected financial information set forth below constitutes
forward-looking statements. It is not possible to predict whether the
assumptions made in preparing the forecasts will be valid, and we caution
stockholders that any such forward-looking statements are not guarantees of
future performance. We cannot assure you that our forecasts will be realized,
and actual results may be materially more or less favorable than those contained
in the forecasts set forth below. Investors should consider the risks and
uncertainties in our business that may affect future performance and that are
discussed under "Special Note Regarding Forward-Looking Statements" and in the
documents incorporated by reference in this proxy statement.
Our inclusion of the forecasts should not be regarded as an indication that
we, the special committee, our board of directors, BNP Paribas or any of our or
their respective financial advisors considered or consider the forecasts to be a
reliable prediction of future events, and the forecasts should not be relied
upon as such. To the extent that our forecasts represent our management's best
estimate of possible future performance, this estimate is made only asfirst three anniversaries of the date of the forecasts and not as of any later date. We do not intend to update,
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revise or correct these forecasts if they become inaccurate. Stockholders should
take this into account when evaluating any factors or analyses based on our
forecasts.
FISCAL YEARS ENDED DECEMBER 31,
---------------------------------------
2001 2002 2003
--------- ----------- -----------
($ IN MILLIONS, EXCEPT DILUTED EARNINGS
PER SHARE)
Operating Revenues.......................................... $983.3 $1,113.8 $1,202.7
Net Income.................................................. 241.8 265.2 293.2
Pre-tax Income.............................................. 403.0 442.1 488.7
Diluted Earnings Per Share
-- Reported............................................... 1.92 2.10 2.30
-- Operating.............................................. 1.93 2.10 2.30
-- Cash................................................... 2.20 2.36 2.56
- ---------------
Source: BancWest management.
BNP PARIBAS' AND CHAUCHAT'S POSITIONS AS TO THE FAIRNESS OF THE MERGER
BNP Paribas and Chauchat believe that the merger is substantively and
procedurally fair to unaffiliated holders of BancWest common stock. However,
neither BNP Paribas nor Chauchat has performed or engaged a financial advisor to
perform any valuation analysis for the purpose of assessing the fairness of the
merger to unaffiliated holders of BancWest common stock. Moreover, neither BNP
Paribas nor Chauchat participated in the deliberations of the special committee
or received advice from the special committee's financial advisor.
BNP Paribas' and Chauchat's belief that the merger is substantively fair to
unaffiliated holders of BancWest common stock is based on the following factors,
each of which BNP Paribas and Chauchat consider to support their belief:
- the conclusions and recommendations of the special committee that the
merger is fair to, and in the best interests of, unaffiliated holders of
BancWest common stock;
- the fact that the special committee received an opinion from Goldman
Sachs stating that, based upon andIPO, subject to the assumptionscontinued employment (other than a termination of employment by reason of death, disability or retirement) and limitations contained in the opinion, the $35 per share merger
consideration to be received by the holders of BancWest common stock
pursuant to the merger agreement is fair from a financial point of view
to those holders;
- the merger consideration of $35 per share of BancWest common stock
represents a 40.1% premium over the closing price per share on May 4,
2001, the last trading day before BNP Paribas' proposal was publicly
announced, a 47.6% premium to the closing stock price per share on April
4, 2001, one month before the public announcement, and a 28.4% premium to
the closing stock price per share on January 29, 2001, the highest
closing stock price ever of the BancWest common stock before the public
announcement of the BNP Paribas merger proposal;
- the consideration to be paid in the merger represents a multiple of
almost 17 times BancWest's cash earnings per share for the twelve months
ended April 30, 2001;
- the consideration to be paid in the merger represents a multiple of 2.1
times BancWest's book value per share of approximately $16.40 and 3.4
times BancWest's tangible book value per share of approximately $10.33;
- with respect to going concern value, the fact that, based upon the
analyses of Merrill Lynch described below under "Summary of Financial
Analyses of Merrill Lynch & Co. -- Precedent Transaction Analysis," the
transaction multiples represented by the $35 per share merger
consideration were generallypositive First Hawaiian Core Net Income, as defined within the ranges implied by such analyses
(although one ratio was slightly higher and one ratio was slightly lower).
In addition, BNP Paribas noted the conclusion of the special committee,
based upon BancWest's internally generated forecasts not available to BNP
Paribas, that the
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opportunity to achieve $35 per share in cash under the terms of the mergerperformance share unit award agreement, in the fiscal year immediately preceding the applicable vesting date. Performance share units are subject to transfer
restrictions that will lapse six months following the applicable vesting date. On a termination of employment by reason of disability or retirement, outstanding performance share units will continue to vest as scheduled based on actual performance. On a termination of employment by reason of death, outstanding performance share units will vest in full and all transfer restrictions will immediately lapse. Mr. Harrison's IPO award was in an amount of 13,565 restricted shares and 20,348 performance share units; Mr. Yeaman's IPO award was in an amount of 7,826 restricted shares and 11,739 performance share units; Mr. Fujioka's IPO award was in an amount of 5,217 restricted shares and 7,826 performance share units; and Mr. Yamada's IPO award was in an amount of 10,434 restricted shares and 15,652 performance share units.
Employment Agreement with Mr. Harrison
We previously entered into an employment agreement with Mr. Harrison, which became effective on January 1, 2012. The agreement was a superior alternative tofor an initial term of two years with automatic one-year extensions at the BancWest shareholders to
attempting to achieve value in excessend of $35 per share in cash as an
independent publicly traded company as described above under
"Recommendationseach year unless notice of termination is provided. During the initial term of the Special Committeeagreement, Mr. Harrison served as President and Our Board of Directors;
Fairness of the Merger -- Recommendations of the Special Committee and Our
Board of Directors."
- the merger will provide consideration to BancWest common stockholders
entirely in cash; and
- the likelihood that the merger will be consummated, including the absence
of unusual requirements or conditions to the merger, including any
financing conditions.
BNP Paribas' and Chauchat's belief that the merger is procedurally fair to
unaffiliated holders of BancWest common stock is based on the following factors:
- the merger and the terms and conditions of the merger agreement were the
result of arm's-length negotiations between the special committee and BNP
Paribas and their respective advisors;
- the limitations in the standstill agreement on BNP Paribas' ability to
act on a unilateral basis required BNP Paribas to engage in an
arm's-length negotiation with the special committee;
- although the merger is not conditioned upon approval by the holders of a
majority of outstanding shares other than shares held by BNP Paribas, the
merger is conditioned upon adoption of the merger agreement by the
holders of no less than two-thirds of the shares of common stock and
Class A common stock outstanding and entitled to vote at the special
meeting, voting together as a single class. Although this super-majority
vote could be waived by BancWest, BancWest has advised BNP Paribas that
neither the special committee nor the board of directors of BancWest has
any present intention of waiving this condition;
- the special committee retained and was advised by independent legal
counsel and an independent financial advisor, Goldman Sachs, and the
special committee received a fairness opinion from Goldman Sachs as to
the $35 in cash per share merger consideration;
- the merger was unanimously approved by all members of BancWest's board of
directors who are not affiliates of BNP Paribas or BancWest employees;
and
- holders of common stock who do not vote in favor of the merger will have
the right to demand a judicial appraisal of their shares if they take the
actions necessary to perfect their rights.
BNP Paribas and Chauchat considered each of the foregoing factors to
support their determinations as to the fairness of the merger. Neither BNP
Paribas nor Chauchat found it practicable to assign, nor did it assign, relative
weights to the individual factors considered in reaching its conclusion as to
fairness. The liquidation of BancWest's assets was not considered to be a viable
course of action based on BNP Paribas' desire for BancWest to continue as a
subsidiary of BNP Paribas. Therefore, no appraisal of liquidation value was
sought for purposes of valuing the shares of BancWest common stock. In addition,
BNP Paribas and Chauchat did not consider the purchase prices paid in previous
purchases of BancWest stock, as described in "Other Matters -- Transactions in
Capital Stock by Certain Persons -- BNP Paribas and Chauchat Purchases of Common
Stock" to be a material factor in their consideration of the merger, because the
prices paid in those stock purchases may not reflect the value of BancWest as a
whole. None of the factors considered by BNP Paribas and Chauchat failed to
support their belief in the fairness of the merger.
Although Merrill Lynch generally assisted BNP Paribas in connection with
the merger and, in particular, analyzed the financial aspects of the proposed
merger, Merrill Lynch was not requested to, and did not, deliver any opinion to
either holders of BancWest common stock or BNP Paribas as to the fairness of the
$35 per share which the unaffiliated holders of BancWest common stock will be
entitled to receive in the merger.
The view of BNP Paribas and Chauchat as to the fairness of the merger is
not a recommendation to any stockholder as to how such stockholder should vote
on the merger. The foregoing discussion of the information and factors
considered and weight given by BNP Paribas and Chauchat is not intended to be
exhaustive but is believed to include all material factors considered by BNP
Paribas and Chauchat.
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SUMMARY OF FINANCIAL ANALYSES OF MERRILL LYNCH & CO.
In connection with its consideration of a potential transaction, BNP
Paribas engaged Merrill Lynch as its financial advisor. On May 4, 2001, Merrill
Lynch made a presentationChief Executive Officer, reporting to the board of directors of BNP Paribas. The
following is a summaryFirst Hawaiian Bank and the Chief Executive Officer of BancWest. Mr. Harrison has since been named Chairman and he continues to serve as Chief Executive Officer of First Hawaiian. Material terms of the material financial analyses furnished by Merrill
Lynchemployment agreement include: an annual base salary of $650,000 (which has since been increased to $875,000 for 2016 and to $935,000 for 2017); participation in the boardBonus Plan with an annual target bonus of directors80% of BNP Paribas. However, it does not purporthis annual base salary (which has since been increased to be85% for 2016 and a complete descriptionmaximum of $1,047,000 for 2017) with an earn-out range of 0% to 200% of the analyses performed by Merrill Lynch ortarget (which has since been changed to an earn-out rate of its
presentation to BNP Paribas' board of directors. The analyses performed by
Merrill Lynch were for the purpose of assisting BNP Paribas in assessing the
financial and strategic implications of any potential transaction for BNP
Paribas and the likelihood that a proposal made by BNP Paribas would be
acceptable to BancWest. BNP PARIBAS DID NOT REQUEST, AND MERRILL LYNCH DID NOT
PROVIDE, ANY OPINION TO EITHER BNP PARIBAS OR THE HOLDERS OF BANCWEST COMMON
STOCK AS TO THE FAIRNESS OF THE MERGER CONSIDERATION OF $35 PER SHARE TO BE
RECEIVED BY THE UNAFFILIATED HOLDERS OF BANCWEST COMMON STOCK OR ANY VALUATION
OF BANCWEST FOR THE PURPOSE OF ASSESSING THE FAIRNESS OF THE MERGER.
THE FOLLOWING SUMMARY IS INCLUDED HERE ONLY FOR INFORMATIONAL PURPOSES AND
TO COMPLY WITH APPLICABLE SECURITIES AND EXCHANGE COMMISSION DISCLOSURE
REQUIREMENTS.
Somefrom 0% of the summaries of financial analyses described below include
information presented in tabular format. In ordertarget to understand fullya designated percentage above the financial analyses performedtarget as approved by Merrill Lynch, the tables must be read together
withCompensation Committee at the text of each summary. The tables alone do not constitute a complete
descriptionbeginning of the financial analyses performed by Merrill Lynch. The following
quantitative information,year); and participation in the LTIP, with a target bonus equal to 50% of his annual base salary (which has since been increased to 65% for 2016 and 139% for 2017) with an earn-out range of 0% to 200% of the extent it is based on market data, is, except
as otherwise indicated, based on market data as it existed on or prior to May 2,
2001,target (which has since been changed and is not necessarily indicative0% to 100% of current or future market conditions.
COMPARATIVE STOCK PRICE PERFORMANCE.
Merrill Lynch reviewedthe target for 2016 and 0% to $1,300,000 for 2017).
Mr. Harrison's employment agreement also includes severance benefits, which have since been replaced by his participation in the Executive Change-in-Control Retention Plan of First Hawaiian Bank (the "Executive CIC Plan") as described under "Executive Change-In-Control Retention Plan of First Hawaiian Bank" below.
The employment agreement also contains (i) a confidentiality provision that applies during the term of employment and for one year following any termination of employment, (ii) a non-competition provision that applies during the term of employment and for one year following any termination of employment that results in severance benefits and (iii) an employee non-solicit provision that applies during the term of employment and for one year following any termination of employment.
Role-Based Allowance for Mr. Harrison
On July 6, 2016, our Board approved a role-based allowance for Mr. Harrison commensurate with the board of directors of BNP Paribas the
recent stock price performance of Standard & Poor's index of U.S. regional
banks, commonly referred tohis duties and responsibilities as the S&P Regional Banks Index, and compared this
performance with that of Standard & Poor's index of 500 industrial stocks,
commonly referred to as the S&P 500 Index, and Nasdaq.
Merrill Lynch observed that during the periods from (1) December 31, 1999
through December 29, 2000 and (2) January 1, 2001 through May 2, 2001, the
closing market prices appreciated and depreciated as set forth below:
PERCENT APPRECIATION/(DEPRECIATION)
------------------------------------
12/31/99-12/29/00 1/1/01-5/2/01
------------------ --------------
S&P Regional Banks Index...................... 24.5% (6.9)%
S&P 500 Index................................. (10.1) (4.0)
Nasdaq........................................ (39.3) (10.1)
In addition, Merrill Lynch noted to the BNP Paribas board of directors that
over the last twelve months, the S&P Regional Banks Index appreciated 20% as
compared to the S&P 500 Index, which depreciated 13.7% during the same period.
HISTORICAL STOCK PRICE PERFORMANCE.
Merrill Lynch reviewed and analyzed the daily closing per share market
prices and trading volumes for BancWest common stock from November 1, 1998
through May 2, 2001. The following table sets forth the
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37
results of this analysis, adjusted for the stock split of BancWest common stock
effective on December 15, 1999:
CLOSING PRICE
NOVEMBER 1, 1998 THROUGH MAY 2, 2001 PER SHARE
- ------------------------------------ -------------
High (January 29, 2001)..................................... $27.25
Low (February 25, 2000)..................................... 14.44
52-Week High................................................ 27.25
52-Week Low................................................. 14.44
2-Year Average.............................................. 20.29
1-Year Average.............................................. 21.14
6-Month Average............................................. 24.90
3-Month Average............................................. 25.25
Last (May 2, 2001).......................................... 25.09
COMPARABLE PUBLIC COMPANIES ANALYSIS.
Merrill Lynch reviewed and compared certain financial information and
public market trading multiples relating to BancWest to corresponding financial
data for comparable publicly traded U.S. regional banks.
The group of comparable public companies reviewed included: Commerce
Bancshares, Inc., Compass Bancshares, Inc., Cullen Frost Bankers Inc., Pacific
Century Financial Corp., Provident Financial Group, Inc., Trustmark Corporation,
UnionBanCal Corporation and Westamerica Bancorporation.
For each of these comparable companies and for BancWest, Merrill Lynch
calculated and compared, among other things, the ratio of the closing stock
price on May 2, 2001 to:
- the next twelve months' estimated earnings per share;
- the next twelve months' estimated cash earnings per share;
- March 31, 2001 book value per share; and
- March 31, 2001 tangible book value per share.
The following table reflects the results of the analysis:
COMPARABLE COMPANIES
----------------------
RATIO OF CLOSING STOCK PRICE ON MAY 2, 2001 TO: BANCWEST LOW MEAN HIGH
- ----------------------------------------------- -------- ---- ----- -----
Next twelve months' estimated earnings per
share........................................... 12.67x 9.51x 12.50x 15.61x
Next twelve months' estimated cash earnings per
share........................................... 10.86 9.25 11.80 15.15
March 31, 2001 book value per share............... 1.53 1.32 2.11 3.99
March 31, 2001 tangible book value per share...... 2.43 1.45 2.35 4.25
For purposes of this analysis, Merrill Lynch relied on publicly available
financial information, SNL Securities estimates and First Call estimates.
No company used in the comparable public companies analysis is identical to
BancWest. Accordingly, an analysis of the results of the foregoing necessarily
involves complex considerations and judgments concerning differences in
financial and operating characteristics of BancWest and other factors that could
affect the public trading value of the companies to which they are being
compared. In evaluating the comparable companies, Merrill Lynch made judgments
and assumptions with regard to industry performance, general business, economic,
market and financial conditions and other matters, many of which are beyond the
control of BNP Paribas and BancWest. These judgments and assumptions include:
- the impact of competition on BNP Paribas, BancWest and the industry
generally,
- industry growth and
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- the absence of any adverse material change in the financial conditions
and prospects of BNP Paribas, BancWest or the industry or in the
financial markets in general.
Mathematical analysis, including determining the average or median, is not
itself a meaningful method of using publicly traded comparable company data.
PRECEDENT TRANSACTION ANALYSIS.
Merrill Lynch reviewed publicly available financial, operating and stock
market information for four selected merger and acquisition transactions in the
regional banking industry involving the acquisitionchief executive officer of a publicly traded company and to facilitate compliance with CRD IV, as discussed under "
Offer Letter with Mr. Yeaman
We previously entered into an offer letter with Mr. Yeaman, which became effective on June 15, 2015. Pursuant to the letter agreement, Mr. Yeaman is an "at will" employee and serves as President and Chief Operating Officer of First Hawaiian Bank. Mr. Yeaman has since been named President and Chief Operating Officer of First Hawaiian. Material terms of the offer letter include: an annual base salary of $725,000 (which has since been increased to $746,750 for 2016 and to $761,685 for 2017), subject to periodic review; a one-time sign-on bonus of $100,000, which was subject to repayment if Mr. Yeaman's employment terminated prior to the first anniversary of his start date; participation in the IPKE with an annual target bonus of 90% of Mr. Yeaman's annual base salary; participation in the LTIP with a value ranging from $1 billiontarget bonus equal to $5 billion. The precedent transactions
reviewed were:
Insurance Plans
Our named executive officers participate in a variety of insurance plans, including a group variable universal life insurance policy, an individual disability insurance policy, a group life insurance plan, a special life insurance policy and an executive life insurance plan. Company-paid premiums under those policies are disclosed in the Summary Compensation Table above.
Under the executive life insurance plan we provide pre- and post-retirement life insurance benefits for certain executives, including the named executive officers. For Messrs. Fujioka and Yamada, death benefits under this plan are equal to three times current base salary while actively employed and three times final salary post-retirement. For Mr. Yamada, upon his retirement in December 2016, we transferred ownership of a company-owned life insurance policy to the participating executive with cash value sufficient, using reasonable actuarial assumptions, to support the policy to the policy maturity date.
Outstanding Equity Awards at Fiscal Year End
As of December 31, 2016, our long term incentive plan. That plan pays cashnamed executive officers held outstanding equity-based awards if we achieve specifiedof First Hawaiian as listed in the table below.
| | Stock Awards | ||||||
|---|---|---|---|---|---|---|---|
Name | Number of Unearned Shares or Units That Have Not Yet Vested (#)(1) | Market Value of Unearned Shares or Units That Have Not Yet Vested ($)(2) | |||||
Robert S. Harrison | 45,087 | $ | 1,569,929 | ||||
Eric K. Yeaman | 36,086 | 1,256,515 | |||||
Robert T. Fujioka | 17,217 | 599,496 | |||||
Albert M. Yamada | 26,695 | 929,520 | |||||
- (1)
- Includes performance
levels over multi-year performance cycles. Ordinarily, we would apply predetermined performance measures aftershare units granted to each of theclosenamed executive officers in connection with our IPO and the 2016-2018 LTIP Awards, each at 100% performance.
Performance share units granted in connection with our IPO vest in three equal annual installments on each of August 9, 2017, August 9, 2018 and August 9, 2019. The 2016-2018 LTIP Awards cliff vest within 90 days following the end of the three-year periods endedperformance period.
- (2)
- Based on the closing sale price of First Hawaiian common stock on NASDAQ of $34.82 per share on December
31, 2001, 200230, 2016.
Potential Payments upon Termination or Change in Control
Executive Change-In-Control Retention Plan of First Hawaiian Bank
In May 2015, the First Hawaiian Bank board of directors adopted the Executive CIC Plan to advance the interests of First Hawaiian Bank by ensuring the continued employment, dedication and 2003 to
determinefocused attention of its executive officers, notwithstanding the amountpossibility, threat or occurrence of any awards to be paid for those three cycles. However,
due toa change in control provisionscontrol. Executive officers of First Hawaiian Bank become eligible to participate in the plan upon designation by the Compensation Committee of the First Hawaiian Bank board of directors. Messrs. Harrison, Yeaman and Fujioka participate in the Executive CIC Plan. Mr. Harrison's participation in the Executive CIC Plan replaces the severance benefits he would otherwise be entitled to pursuant to his employment agreement. Severance benefits provided under the Executive CIC Plan vary based on the level of employee. The following description and level of severance benefits applies to our named executive officers and not necessarily to other participants in the Executive CIC Plan.
Under the Executive CIC Plan, if within two years after a "change in control" (x) an executive's employment is involuntarily terminated without "cause" or (y) an executive terminates employment for "good reason", such executive is entitled to (i) a lump sum payment generally payable on the mergerlast day of the month following such termination of employment equal to (A) one times the executive's highest annual base salary earned at any time during the preceding three fiscal years; and (B) one times the largest of (1) the actual annual bonus earned under the IPKE during the fiscal year in which termination occurs, every
participant(2) the executive's target annual bonus under the IPKE at the date of termination and (3) the highest bonus actually paid to the executive under the IPKE in any of the three fiscal years prior to termination; (ii) health benefits in the form of a subsidy toward the premium cost of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) for two years after termination of employment; and (iii) reimbursement for reasonable expenses incurred for outplacement services, up to a maximum of $20,000. In addition, if an executive in the Executive CIC Plan executes a supplemental participation agreement to be bound by a non-competition provision and an employee and customer non-solicitation provision for one year after termination of employment and refrains from competing and soliciting employees and customers during such one-year period, the executive will also be entitled to a lump sum payment in the thirteenth month after termination equal to (i) one times the highest annual base salary earned at any time during the last three completed fiscal years; and (ii) one times the largest of (1) the executive's actual annual bonus earned under the IPKE during the fiscal year in which termination occurs, (2) the executive's target annual bonus under the IPKE at the date of termination and (3) the highest bonus actually paid under the IPKE to the executive in any of the three most recent consecutive fiscal years prior to termination of employment.
Under the Executive CIC Plan, if outside of the two years after a "change in control", including during any period prior to a "change in control", (x) an executive is involuntarily terminated by First Hawaiian Bank without "cause" or (y) an executive terminates employment with First Hawaiian Bank for "good reason", such executive will be entitled to receive(i) a lump sum paid one month after termination of employment equal to (A) two times the executive's highest annual base salary at any time during the preceding three fiscal years; and (B) two times the largest of (1) the actual annual bonus earned under the IPKE during the fiscal year in which termination occurs, (2) the participant's target annual bonus
under the IPKE at the date of termination and (3) the highest bonus actually paid under the IPKE to the executive in any of the three most recent consecutive fiscal years prior to termination.
For purposes of the Executive CIC Plan, "cause" generally means the executive's (i) willful failure to perform his or her maximum possible award forduties, which is not remedied within fifteen business days' following written notice; (ii) gross negligence in the performance of duties; (iii) conviction of, or plea of guilty or no contest to, any felony or any other crime involving the personal enrichment of the executive at First Hawaiian Bank's expense; (iv) willful engagement in conduct that is demonstrably and materially injurious to First Hawaiian Bank; (v) material violation of any federal or state banking law or regulation; (vi) material violation of any provision of First Hawaiian Bank's code of conduct and ethics or other established code of conduct to which the executive is subject; and (vii) willful violation of confidentiality, non-disparagement, non-competition, and employee and customer non-solicitation covenants.
"Good reason" generally means an executive (i) has incurred a material reduction in base salary, authority, duties or responsibilities, or in the budget over which the participant has authority; (ii) has incurred a material reduction in the authority, duties or responsibilities of the executive's supervisor; or (iii) has been provided notice that his principal place of work will be relocated to a different Hawaiian Island or to a place more than 50 miles from the executive's base of employment immediately prior to the change in control.
"Change in control" generally means, (i) any transaction as a result of which, immediately thereafter, BNPP owns directly or indirectly (A) securities of BancWest representing no more than 50% or less of the combined voting power of BancWest then outstanding or (B) securities of First Hawaiian Bank representing no more than 50% or less of the combined voting power of First Hawaiian Bank then outstanding or (ii) the sale of all or substantially all of the assets of First Hawaiian Bank to an unrelated third party.
The Executive CIC Plan also contains (i) a confidentiality provision and (ii) a non-disparagement provision, each of which applies during employment and for one year following any qualifying termination of employment under the three open cycles. AsExecutive CIC Plan.
Savings and Retirement Plans
We maintain the BancWest Corporation 401(k) Savings Plan, which we renamed the First Hawaiian, Inc. 401(k) Savings Plan, effective January 6, 2017 (the "401(k) Plan"), which is a result, iftax-qualified defined contribution savings plan for all eligible employees of First Hawaiian, including each of our named executive officers. Under the merger401(k) Plan, eligible employees may contribute up to 75% of their pay (subject to Internal Revenue Service limitations) to the 401(k) Plan commencing upon their date of hire. Contributions are withheld by payroll deductions on a pre-tax basis. After participants have completed one year and 1,000 hours of service, First Hawaiian will match 100% of the first 5% of the pay that an employee contributes on a pre-tax basis to the 401(k) Plan. Messrs. Harrison, Yeaman and Fujioka are eligible for such First Hawaiian matching contributions. Participants are 100% vested in their pre-tax contributions and, upon completion of one year and 1,000 hours of service, the employer matching contributions. In addition, participants become 100% vested in the employer matching contributions upon death or disability (as defined in the 401(k) Plan), in each case, while an employee, or upon retirement.
In addition, we maintain the BancWest Corporation Future Plan, which we renamed the First Hawaiian, Inc. Future Plan, effective May 16, 2016 (the "Future Plan"). The Future Plan is completeda money purchase plan that is designed to help eligible employees build long-term savings through First Hawaiian contributions toward retirement. Messrs. Harrison, Yeaman and Fujioka participate in the Future Plan. Under the Future Plan, First Hawaiian contributes an amount equal to 2.5% of an eligible employee's pay. Employees may direct how contributions will be invested. Contributions are made each
calendar quarter to a Future Plan account that is held in the name of each participant. Employees vest in the plan after completing five years of service with First Hawaiian, or upon death, disability (as defined in the Future Plan) or attainment of age 65.
We also maintain the First Hawaiian Bank Deferred Compensation Plan (the "First Hawaiian Bank DCP"), the Employees' Retirement Plan of BancWest Corporation (the "ERP") and the BancWest Corporation Supplemental Executive Retirement Plan (the "SERP"). In connection with the IPO, we adopted the First Hawaiian, Inc. Deferred Compensation Plan (2016 Restatement) (the "First Hawaiian, Inc. DCP") effective December 13, 2016 for First Hawaiian participants. Messrs. Harrison, Fujioka and Yamada participate in the SERP, and Mr. Yamada participates in the ERP. We expect that each of our named executive officers four of whom are directors, will become entitled to long
term incentive plan awards totaling approximately $8.9 million, which will be
paid as soon as practicable afterparticipate in the merger.
37
44
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN.
Approximately 130First Hawaiian, Inc. DCP. Mr. Yeaman participates in the First Hawaiian Bank DCP.
Under the First Hawaiian, Inc. DCP, the Compensation Committee of our Board may designate employees including allfor retirement contributions and participants may defer portions of their base salary or cash-based incentive award. None of our named executive officers participatereceive retirement contributions under the First Hawaiian, Inc. DCP. Under the First Hawaiian Bank DCP, participating employees may defer a portion of their base salary, commission, or incentive compensation. Under the First Hawaiian Bank DCP, the Compensation Committee may also, in our supplementalits discretion, designate employees on whose behalf First Hawaiian Bank may make executive retirement plan,contributions. Mr. Yeaman receives an executive retirement contribution under the First Hawaiian Bank DCP equal to 7.5% of base salary and any incentive compensation payments, excluding LTIP awards. Such retirement contributions vest over five years of service with First Hawaiian Bank with automatic vesting upon attainment of age 65, disability or SERP.
The SERP contains change in control provisions that affect target benefit
calculations for SERP participants who are involuntarily terminated within three
years after the merger.
SERP benefitsdeath prior to termination of employment. Executive retirement contributions are paid in addition to benefits payableeither a lump sum or annual installments, as elected by the executive.
The ERP is a defined benefit retirement plan under other
retirement programs. When the SERP was amended in January 1998, certain benefit
provisions were grandfathered. Under the amended plan,which participants receive (i)
ina benefit calculated by multiplying the casetotal base salary, commissions, overtime pay and shift and other premiums earned during each year of grandfathered participants, benefits calculatedemployment by 1.50%, subject to reduction for early retirement. Benefits under the grandfatheredERP are paid in a monthly annuity elected by each participant, although certain benefits may be received as a lump-sum payment. Benefits under the ERP were frozen effective December 31, 1995, with no benefits accruing under the plan for compensation earned or services performed after such date. The SERP provisions, and (ii) benefits derived fromis a targetnon-qualified plan under which participating executives generally receive a benefit equal to a percentage of their qualifying compensation, less offsets for grandfathered SERP
benefits and for benefits under various other programs.
Our executive officers' maximum target percentage is 60% of qualifying
compensation. Ordinarily, qualifying compensation for this purpose is the average annual rate of compensation (salary plus annual bonuses under our
Incentive Plan for Key Executives) forearned during the 60 consecutive calendar months out of the last 120 calendar months of employment that results in the highest such
average.
To qualify foraverage, subject to reduction in the case of early retirement. In the case of Messrs. Harrison, Fujioka and Yamada, they receive a benefit equal to a percentage of the highest consecutive 12 months of compensation earned during their final 60 months of service prior to retirement, subject to reduction in the case of early retirement. The target percentage, in the case of Messrs. Harrison, Fujioka and Yamada, is 60% target, our executive officers must retiremultiplied by a fraction based on or after
their 62nd birthdays with 20credited years of credited service. Their target percentages
areservice under the SERP. The benefit is also reduced by 3%benefits received pursuant to other retirement plans, including, among others, the 401(k) Plan, the Future Plan, the ERP and 50% of an executive's monthly primary social security benefit, determined as if the executive was age 65. Executive participants may elect to receive benefits in a monthly annuity, monthly installments or a lump sum, subject to certain restrictions.
Under each of the First Hawaiian, Inc. DCP and the SERP, within thirty days after a "change in control of the company", any amounts credited to accounts of participants in each respective plan that have not previously been contributed to a trust are required to be contributed to a trust. Similarly within thirty days after a "change in control of a bank subsidiary" any amounts credited to accounts of participants in each respective plan who are employees of that bank subsidiary that have not previously been contributed to a trust are required to be contributed. "Change in control of the company", as used in the First Hawaiian, Inc. DCP and the SERP, generally means, (i) any person other than BNPP, any affiliate of BNPP or a fiduciary holding shares under an employee benefit plan, becomes the
beneficial owner of more than 50% of the combined voting power of BancWest, (ii) a merger or consolidation of BancWest, a result of which either (A) any person other than BNPP or an affiliate becomes the beneficial owner of more than 50% of the voting power of BancWest or (B) the shares of BancWest outstanding immediately prior to such transaction do not represent a majority of the voting power of all voting securities of such entity outstanding immediately after such transaction or (iii) the sale of all or substantially all of the assets of BancWest. "Change in control of a bank subsidiary" generally means (i) any person other than BNPP, any affiliate of BNPP or a fiduciary holding shares under an employee benefit plan, becomes the beneficial owner of more than 50% of the combined voting power of either First Hawaiian Bank or Bank of the West, (ii) a merger or consolidation of either First Hawaiian Bank or Bank of the West, a result of which either (A) any person other than BNPP or an affiliate becomes the beneficial owner of more than 50% of the voting power of either First Hawaiian Bank or Bank of the West or (B) the shares of either First Hawaiian Bank or Bank of the West outstanding immediately prior to such transaction do not represent a majority of the voting power of all voting securities of such entity outstanding immediately after such transaction or (iii) the sale of all or substantially all of the assets of either First Hawaiian Bank or Bank of the West.
CRD IV Compensation Standards
As a banking organization headquartered in France, which is within the European Union ("EU"), BNPP is subject to CRD IV. As long as First Hawaiian is a controlled subsidiary of BNPP, we are subject to the compensation standards of CRD IV. As a result of the implications of CRD IV, certain of our most senior employees, including, for 2016, each year by which benefit commencement precedes the
participant's 62nd birthday. All of our named executive officers, (Messrs. Dods,
McGrath, Tsui, Karr and Horner) already have more than 20 yearsmay not receive variable compensation in excess of credited
service, except100% of fixed compensation (200% with shareholder approval). CRD IV also imposes a requirement for covered employees that Mr. Tsui currently has 17 years. (He would be entitled to
two years of additional credit under the termination protection agreement
described below if he is terminated without cause within three years after the
merger).
The SERP's change in control provisions apply to participants who are
"involuntarily terminated" within 36 months of a change in control, such as the
merger. (The SERP defines "involuntary termination" to include a discharge or
resignation in response to a (1) change in day-to-day duties; (2) reduction in
compensation or benefits; (3) downward change of title; or (4) relocation
requested by the employer). Affected SERP participants will be granted three
extra years of credited service in computing their target benefits. That
computation will also be based on the greater of covered compensation over the
12 months before termination, or the final average compensation otherwise
provided in the SERP. In addition, their SERP benefits will begin(i) at the laterleast 40% of the datevariable compensation must be deferred over a specified period of termination or age 55, though the participant may electat least three to delay
receipt of change in control benefits to a date not beyond age 65. If we were to
complete the merger and then terminate our named executive officers
involuntarily on November 1, 2001, and each such officer chose to delay receipt
of retirement payments until age 62, his annual SERP benefits after giving
effect to the SERP's grandfathered provisions and its change in control
provisions would be approximately: Mr. Dods -- $817,481; Mr.
McGrath -- $614,095; Mr. Tsui -- $441,342; Mr. Karr -- $210,523; and Mr.
Horner -- $157,140.
EMPLOYMENT AGREEMENTS.
Walter A. Dods, Jr., one of our directors and our chairman and chief
executive officer, has entered into an employment agreement with us, which will
become effectivefive years, (ii) at the effective timeleast 50% of the mergervariable remuneration is paid in equity-linked instruments and which will terminate
three years after the date the merger becomes effective, unless earlier
terminated by us(iii) a clawback or by Mr. Dods. Under the terms of his agreement, Mr. Dods is
entitled to:
- a base salary of $1,030,403, which may be increased annually at our
discretion after review by the board of directors,
- an annual target bonus ofmalus arrangement must cover up to 100% of base salary payable, if
performance targets are met, but guaranteedthe variable compensation. We intend to maintain competitive total compensation levels for affected employees, although it is possible that the structure of our compensation packages may not be considered in line with our peers. Once we cease to be subject to CRD IV, we will evaluate and modify our compensation structure as appropriate so that it is more aligned with our peers and allows us to continue to attract and retain the high-caliber talent necessary to maximize long-term shareholder value.
2016 First Hawaiian Director Compensation Table
The following table lists the individuals who received compensation in 2016 for their service as non-employee directors of First Hawaiian.
Name | Fees Earned or Paid in Cash($)(1) | Stock Awards(2) | All Other Compensation($)(3) | Total($) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Matthew Cox | $ | 46,500 | $ | 43,767 | $ | 59,751 | $ | 150,018 | |||||
W. Allen Doane | 55,500 | 43,767 | 84,751 | 184,018 | |||||||||
Thibault Fulconis | — | — | 1,751 | 1,751 | |||||||||
Gérard Gil | — | — | 1,751 | 1,751 | |||||||||
Jean-Milan Givadinovitch | — | — | 1,751 | 1,751 | |||||||||
J. Michael Shepherd | — | — | 1,751 | 1,751 | |||||||||
Allen Uyeda | 70,625 | 43,767 | 82,751 | 197,143 | |||||||||
Michel Vial | — | — | 1,751 | 1,751 | |||||||||
- (1)
- The amounts in this column represent annual cash retainers, committee chair and committee membership fees, which, in each case, were prorated to reflect 2016 service commencing April 1. Any director who is an officer of the company and any director who is nominated by BNPP, including Messrs. Fulconis, Gil, Givadinovitch, Shepherd and Vial, did not receive any First Hawaiian director compensation.
- (2)
- The amounts in this column represent the grant date fair value, as determined in accordance with FASB ASC Topic 718, of awards of restricted stock units granted pursuant to the First Hawaiian, Inc. 2016 Non-Employee Director Plan. Awards for 2016 were prorated to reflect 2016 service commencing April 1 and vest and settle one year after grant. Aggregate restricted stock unit awards outstanding as of December 31, 2016 are 1,793 for each of Messrs. Cox, Doane and Uyeda.
- (3)
- For each of Messrs. Cox, Doane and Uyeda, "All Other Compensation" reflects amounts paid to directors in respect of their service on the First Hawaiian Bank board of directors, including a non-cash gift provided to First Hawaiian Bank directors. For each of Messrs. Fulconis, Gil, Givadinovitch, Shepherd and Vial, "All Other Compensation" reflects a non-cash gift provided to First Hawaiian Bank directors.
Narrative Disclosure to 2016 First Hawaiian Director Compensation Table
In connection with our IPO, we adopted a new director compensation program that provides the following compensation for non-employee members of our Board:
- •
- An annual cash retainer of $40,000;
- •
- An annual equity award with a value of $55,000;
- •
- An additional annual cash retainer of $12,000 for the chair of the audit committee, $10,000 for each of the chairs of the Compensation Committee and the risk committee, and $8,000 for the chair of the corporate governance and nominating committee;
- •
- An additional annual membership fee of $12,000 for each member of the audit committee, $10,000 for each member of the Compensation Committee and/or risk committee, and $8,000 for each member of the corporate governance and nominating committee; and
- •
- An additional annual cash retainer of $15,000 for serving as our lead director.
We also reimburse all directors for reasonable out-of-pocket expenses incurred in connection with the performance of their duties as directors.
Our Board adopted the First Hawaiian, Inc. 2016 Non-Employee Director Plan effective July 22, 2016. The initial equity awards granted in connection with our IPO were in the form of restricted stock units that vest and settle in shares one year after the grant date subject to continued service (or upon an earlier change in control), and were prorated to reflect 2016 service commencing April 1. In connection with our IPO, we granted 5,379 shares of our common stock underlying the restricted stock units to certain of our non-employee directors.
Notwithstanding the above, any director who is an officer of the Company and any director who is nominated by BNPP will not receive any director compensation.
OUR RELATIONSHIP WITH BNPP AND CERTAIN OTHER RELATED PARTY TRANSACTIONS
We or one of our subsidiaries may occasionally enter into transactions with certain "related persons." Related persons include our executive officers, directors, nominees for director, 5% or more beneficial owners of our common stock, immediate family members of these persons and entities in which one of these persons has a direct or indirect material interest. We generally refer to transactions with these related persons as "related party transactions."
Related Party Transaction Policy
Our Board has adopted a written policy governing the review and approval of transactions with related parties that will or may be expected to exceed $120,000 in any fiscal year. The policy calls for the related party transactions to be reviewed and, if deemed appropriate, approved or ratified by our Audit Committee. Upon determination by our Audit Committee that a transaction requires review under the policy, the material facts are required to be presented to the Audit Committee. In determining whether or not to approve a related party transaction, our Audit Committee will take into account, among other relevant factors, whether the related party transaction is in our best interests, whether it involves a conflict of interest and the commercial reasonableness of the transaction. In the event that we become aware of a related party transaction that was not approved under the policy before it was entered into, our Audit Committee will review such transaction as promptly as reasonably practical and will take such course of action as may be deemed appropriate under the circumstances. In the event a member of our Audit Committee is not disinterested with respect to the related party transaction under review, that member may not participate in the review, approval or ratification of that related party transaction.
Certain decisions and transactions are not subject to the related party transaction approval policy, including: (i) decisions on compensation or benefits relating to directors or executive officers and (ii) indebtedness to us in the ordinary course of business, on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable loans with persons not related to us and not presenting more than the normal risk of collectability or other unfavorable features.
Relationship with BNPP
BNPP indirectly beneficially owns, through the BNPP selling stockholder, 62.0% of our common stock and, as a result, BNPP has considerable control over us.
Historically, BNPP and its affiliates provided certain services to us. In connection with the IPO, we and BNPP entered into certain agreements that provide a framework for our ongoing relationship with BNPP. We entered into a Stockholder Agreement with BNPP that gives BNPP certain consent and other rights with respect to our business, including the ability to nominate candidates for election to our Board (and appointment to Board committees) and consent rights with respect to dividends and various other significant corporate actions we may pursue. The scope of the rights held by BNPP under the Stockholder Agreement will depend on the level of BNPP's beneficial ownership of our outstanding common stock. We also entered into a Transitional Services Agreement with First Hawaiian Bank, BNPP, Bank of the West and BancWest Holding, Inc. ("BancWest Holding"), which governs the transition of certain shared services, which primarily consist of shared services provided pursuant to agreements with third-party vendors, during specified transition periods, and a Registration Rights Agreement which requires us to register shares of our common stock beneficially owned by BNPP under certain circumstances.
In addition to the foregoing agreements, in connection with the Reorganization Transactions and the U.S. intermediate holding company restructuring on April 1, 2016 and July 1, 2016, respectively, we entered into certain agreements with BNPP and its affiliates that govern our relationship following the
Reorganization Transactions: a Master Reorganization Agreement; an Expense Reimbursement Agreement; a Tax Sharing Agreement; and the IHC Tax Allocation Agreement. The Master Reorganization Agreement with BNPP and certain of its affiliates memorializes the Reorganization Transactions, allocates assets and liabilities between us and BNPP and its affiliates and details certain other agreements that govern our relationship with BNPP following the Reorganization Transactions. Pursuant to the Expense Reimbursement Agreement, BancWest Holding and BancWest Corporation, respectively, agreed to reimburse us for expenses associated with certain services that First Hawaiian Bank performs for the benefit of BNPP and its affiliates. The Tax Sharing Agreement and the IHC Tax Allocation Agreement are two separate agreements that govern the respective rights and obligations of the contracting parties, including us, in respect of federal, state and local income taxes, including those arising from or in connection with the Reorganization Transactions.
Agreements Related to our IPO
In connection with the IPO, we entered into the following agreements with BNPP and certain of its affiliates.
Stockholder Agreement
The Stockholder Agreement governs the relationship between BNPP and us following our IPO, including matters related to our corporate governance and BNPP's right to approve certain actions we might desire to take in the future. BNPP may, in its sole discretion, waive any of its rights under the Stockholder Agreement at any time, including its rights to designate individuals for nomination and election to our Board and to designate individuals to serve on the committees of our Board.
Corporate Governance. Until such time as BNPP ceases to directly or indirectly beneficially own at least 65%5% of base
salary,
- participate in, and receiveour outstanding common stock, and other equityunless BNPP chooses to waive its rights at an earlier point in time, BNPP is entitled to designate individuals for nomination and election to our Board (each such BNPP designated director, a "BNPP Director"). The number of designees will depend on the level of BNPP's beneficial ownership of our outstanding common stock, as follows:
- •
- Until the earlier of (i) the one year anniversary of the first date on which BNPP ceases to directly or
equity-based awards under, the stock option programs and stock purchase programs of BNP Paribas at levels and on terms consistent with those provided to similarly situated executives of BNP Paribas and/or its subsidiaries, and - other perquisites, including specified transportation benefits. 3845 Mr. Dods has the opportunity to earn awards under a new long term incentive plan that are no less favorable than those he currently has the opportunity to earn, with a guaranteed target award ofindirectly beneficially own at least 50% ofbase salaryour outstanding common stock (the "50% Date") and (ii) the date BNPP ceases to directly or indirectly beneficially own at least 25% of our outstanding common stock (the "25% Date"), BNPP will have the right to designate for nomination and election amaximum award opportunitymajority (or five members) of200%our Board. - •
- If the 25% Date has not occurred, upon the first anniversary of the
target award. Mr. Dods is entitled50% Date, BNPP will have the right toreceive a lump sum cash severance payment indesignate for nomination and election three members of our Board. - •
- From the
following circumstances: - BancWest terminates Mr. Dods' employment other than for cause (as defined in25% Date until theemployment agreement),date BNPP ceases to directly ordueindirectly beneficially own at least 5% of our outstanding common stock, BNPP will have the right todeathdesignate one individual to serve on our Board. - •
- Following the date BNPP ceases to directly or
disability, - Mr. Dods quits for good reason (as defined inindirectly beneficially own at least 5% of our outstanding common stock, BNPP will no longer have theemployment agreement), or - Mr. Dods terminates his employment with us with or without good reason atright to designate anytime during the thirteenth month following a change in control of BNP Paribas or BancWest. The merger is not a change of control for this purpose. The severance payment would be equalindividual to serve on our Board.
Pursuant to the sum of:
(1) three timesStockholder Agreement, following the sum of:
- his then current base salary,
- his average annual bonus based on the preceding three fiscal years,
and
- a long term incentive plan amount equal to his average award from
the three preceding fiscal years, but not less than his award paid
for the award cycle ended in 2000; and
(2) a pro rata portion for the year of terminationearlier of the annual
target bonusone year anniversary of the 50% Date and the target awards in respect25% Date, and until the date on which BNPP ceases to directly or indirectly beneficially own at least 5% of allour outstanding performance periods undercommon stock, our long term incentive plan.
For example, ifBoard will consist of a majority of independent directors, our Chief Executive Officer, who is also the merger occursChairman of our Board, and then on November 1, 2001 Mr. Dods is
terminated without cause, he wouldthe BNPP Directors.
BNPP will also be entitled to a severance paymenthave the BNPP Directors serve on the Audit Committee, Corporate Governance and Nominating Committee, Compensation Committee and Risk Committee of $7,570,529 plus prorated portionsour Board under certain circumstances. Under the Stockholder Agreement, the composition of these committees will depend on the target awards then in effect under long
term incentive planslevel of BNPP's beneficial ownership of our outstanding common stock and under our annual bonus program. Mr. Dods would alsowhether any BNPP Directors are independent. BNPP will be entitled by his employment agreement to three additional years of age and
service credit under our pension plans.
Mr. Dods is also entitledmake the following committee appointments:
- •
- Audit Committee. Until BNPP ceases to
be grossed up, on an after-tax basis, for any excise taxes imposed under the Internal Revenue Code on any "excess parachute payment" that he receives in connection with benefits and payments provided to him in connection with any change in control, as defined in the Internal Revenue Code, of BancWest. Since 1998, Don J. McGrath, onedirectly or indirectly beneficially own at least 5% of ourdirectors and our president and chief operating officer, has had an employment agreement with us, which provides for a perpetual term and currently entitles Mr. McGrath to a base salary of at least $800,000. His base salary may be increased annually at our discretion after review by our board of directors, but may not be decreased. Mr. McGrath is entitled to receive a lump sum cash severance payment in the following circumstances, whether they occur following a change in control or otherwise: - BancWest terminates Mr. McGrath's employment other than for cause (as defined in the employment agreement) or due to disability, or - Mr. McGrath quits for good reason (as defined in the employment agreement). This severance payment would be equal to three times the sum of: (1) his then current base salary, and (2) his average annual bonus, if any, based on the preceding three fiscal years. Mr. McGrath is also entitled to be grossed up, on an after-tax basis, for any excise taxes imposed under the Internal Revenue Code on any "excess parachute payment" that he receives in connection with benefits and payments provided to him in connection with any change in control, as defined in the Internal Revenue Code, of BancWest. 3946 TERMINATION PROTECTION AGREEMENTS. John K. Tsui, Howard H. Karr and Donald G. Horner, three of our executive officers, have entered into termination protection agreements with us. Each agreement becomes effective at the effective time of the merger and terminates three years later. In no event, however, will it terminate within two years after any change in control of BNP Paribas or BancWest. Under the terms of each agreement, we will provide the relevant executive officer with the severance benefits discussed belowoutstanding common stock, if any of thefollowing events occurs: - we terminateBNPP Directors satisfies theexecutive officer's employment without cause (as defined inapplicable independence requirements established by theagreements), - the executive officer quits for good reason (as defined in the agreements), or - the executive officer terminates his employment with us with or without good reason at any time during the thirteenth month following a change in control of BNP Paribas or BancWest. The merger is not a change in control for this purpose. Each executive's severance benefitsSEC and NASDAQ, BNPP willbe a lump sum cash payment equal to the sum of: (1) two times the sum of: - his then current base salary, - his average annual bonus based on the preceding three fiscal years, and - his long term incentive plan award amount equal to his average award from the three preceding fiscal years but not less than his award paid for the award cycle that ended in 2000; and (2) a pro rata portion for the year of termination of the executive's annual target bonus and his target awards in respect of all outstanding performance periods under our long term incentive plan. For example, if the merger occurs and then on November 1, 2001 Mr. Tsui, Mr. Karr or Mr. Horner is terminated without cause, he wouldbe entitled to appoint one independent BNPP Director as aseverance paymentmember of$2,222,411, $1,273,240,the Audit Committee. - •
- Compensation Committee and Corporate Governance and Nominating Committee. Initially, BNPP will be entitled to appoint one BNPP Director as a member of each of the Compensation Committee and the Corporate Governance and Nominating Committee. Following the 50% Date, the Compensation and Corporate Governance and Nominating Committees will transition in accordance with NASDAQ rules to being comprised solely of directors satisfying the applicable independence requirements established by the SEC and NASDAQ. Following this transition and until BNPP ceases to directly or
$1,161,000, respectively, plusindirectly beneficially own at least 5% of our outstanding common stock, if any of the BNPP Directors satisfies the applicable independence requirements established by the SEC and NASDAQ, BNPP will be entitled to appoint one independent BNPP Director as aprorated portionmember ofhis target awards theneach of the Compensation and Corporate Governance and Nominating Committees. - •
- Risk Committee. Until BNPP ceases to control us for purposes of the BHC Act, BNPP will be entitled to appoint up to two BNPP Directors as members of the Risk Committee.
Stockholder Approval Rights. Until BNPP ceases to directly or indirectly beneficially own at least 25% of our outstanding common stock, and unless BNPP chooses to waive any of its approval rights under the Stockholder Agreement before they would otherwise terminate, we may not (and may not permit our subsidiaries to) take various significant corporate actions in effectexcess of certain thresholds, as applicable, without the approval of a majority of the BNPP directors on our Board at the time of such action, including entrance into mergers or consolidations, acquiring or disposing of securities, assets or liabilities, incurrence or guarantee of indebtedness, entrance into amendments to or terminations of material agreements, amendments to any of our or any of our subsidiaries' constituent documents, materially changing the scope of our business as conducted immediately prior to the IPO, terminating our or the Bank's Chief Executive Officer or Chief Financial Officer (other than for cause), increasing or decreasing the size of our Board, and engaging in certain other significant transactions.
Until BNPP no longer consolidates our financial statements with its financial statements under International Financial Reporting Standards ("IFRS"), and unless BNPP chooses to waive any long term
incentive plan adopted afterof its approval rights under the merger and underStockholder Agreement before they would otherwise terminate, we may not (and may not permit our subsidiaries to) approve our annual bonus program.
Under these circumstance, these officers would also be entitled by their
termination protection agreements to two years of additional age and service
credit under our pension plans (in addition to three years of credited service
under the SERP that would affect only Mr. Tsui's SERP benefits).
Each of Messrs. Tsui, Karr and Horner is also entitled to be grossed up, on
an after-tax basis, for any excise taxes imposed under the Internal Revenue Code
on any "excess parachute payment" that such executive receives in connection
with benefits and payments provided to him in connection withbudget or make any change in control, as defined inour auditor without the Internal Revenue Code,approval of BancWest.
ELECTION OF DIRECTORS BY BNP PARIBAS.
Ninea majority of the BNPP directors on our Board at the time of such action.
Until BNPP ceases to directly or indirectly beneficially own at least 5% of our directors are Class A directors elected directlyoutstanding common stock, and unless BNPP chooses to waive any of its approval rights under the Stockholder Agreement before they would otherwise terminate, we may not (and may not permit our subsidiaries to) increase or decrease our authorized capital stock or create a new class or series of our capital stock, issue capital stock or acquire our or our subsidiaries' capital stock (subject to certain exceptions), list or delist our securities listed on a national securities exchange or form or delegate authority to any committee of our Board other than as required by BNP
Paribas. These directors did not, however, participate inapplicable law without the vote by the boardapproval of directors to approve the merger, but did vote to approve the waiversa majority of the standstill agreement sinceBNPP directors on our Board at the waivers could not be grantedtime of such action.
Until BNPP ceases to control us for purposes of the BHC Act, and unless BNPP chooses to waive any of its approval rights under the standstill
agreement without their approval.
INDEMNIFICATION AND INSURANCE.
The merger agreement provides that, for six years after the merger, the
surviving corporation's certificate of incorporationStockholder Agreement before they would otherwise terminate, we may not (and may not permit our subsidiaries to) change certain policies related to, among other things, risk appetite and by-laws will contain
the provisionsasset-liability managements, enter into material written agreements or commitments with a regulatory agency, make any bankruptcy filing or petition by or with respect to indemnification, expense advancement and
exculpationus or any of our subsidiaries or declare or pay a dividend or other "capital distribution" as set forth in our certificatedefined by the Federal Reserve without the approval of incorporation and by-laws. The
merger agreement also requires the surviving corporation to maintain in effect
the current directors' and officers' liability insurance or substantially
similar insurance. This insurance must cover those persons who were covered on
the datea majority of the merger agreement byBNPP Directors on our directors'Board at the time of such action.
Compliance Obligations. Until BNPP no longer controls us for purposes of the BHC Act, we and officers' liability
insurance policy, for a period of at least six years. However, if the annual
premium forour subsidiaries must maintain and comply with the policy exceeds 225% of the last annual premium paidframework implemented and enforced by us priorBNPP applicable to 40
47
May 8, 2001, then the surviving corporation in the merger is required only to
get as much comparable insurance as possible for an annual premium equal to 225%
of the last annual premium paid by us prior to May 8, 2001. We may satisfy the
surviving corporation's obligation with respect to the directors' and officers'
insurance policy by purchasing prior to the completion of the merger a prepaid
policy for an aggregate periodour IPO (subject to waivers of six years with respect to claims arising from
factssuch requirements or events that occurred before the effective time of the merger. The
merger agreement also requires the surviving corporation to indemnify and hold
harmless any of our former or current officers or directors against any losseschanges indicated in connection with any threatened or actual action, suit or proceeding, based in
whole or in part on, or arising in whole or in part out of, the fact that the
person is or was our officer or director. BNP Paribas has agreed to cause the
surviving corporation to perform these obligations.
TRUSTEES' FEES.
Messrs. Dods, Ganley, Haig and Weyand, directors of BancWest, serve as
trustees of the Estate of S.M. Damon. Under a statutory fee schedule, they will
be entitled to receive trustees' fees totaling about $15.9 million based on a
percentage of the cash proceeds Damon Estate receives for its BancWest stock
pursuant to the merger.
CERTAIN RELATIONSHIPS BETWEEN BANCWEST AND BNP PARIBAS
We have a number of contractual relationships with BNP Paribas relating to
its ownership of Class A Common Stock and other matters.
STANDSTILL AND GOVERNANCE AGREEMENT.
In connection with the 1998 merger of the former holding company of Bank of
the West with First Hawaiian, Inc., we entered into a standstill and governance
agreement with BNP Paribas which governs our relationship with BNP Paribas and
places restrictions on BNP Paribas' ability to acquire additional shares of our
common stock.
Standstill Period. The standstill agreement provides that, until November
1, 2002, BNP Paribas and its affiliates, directors or executive officers may not
acquire beneficial ownership of any of our voting shares if the acquisition of
those shares would give BNP Paribas and its affiliates more than 45% of our
outstanding voting shares. These restrictions are subject to limited exceptions.
These standstill restrictions were waivedwriting by BNPP) to the extent necessary for BNPP to enable BNP
Paribas to enter into the merger agreementcomply with usits legal and regulatory obligations under applicable law. In addition, we may not adopt or implement policies or procedures, and at BNPP's reasonable request must not take allany actions,
necessary to complete the merger and the transactions contemplated by the merger
agreement. See "-- Background of the Merger."
Other Standstill Provisions. BNP Paribas also agreed in the standstill
agreement that until November 1, 2002, except in specified circumstances,
neither it nor any of its affiliates will:
(1) solicit our securityholders for the approval of any securityholder
proposals or induce any other person to initiate any securityholder
proposal, or seek representation on our board of directors, other than a
nominee for a Class A directorship, or seek to remove any director, other
than a Class A director,
(2) propose a merger, sale of substantially all assets or any other
type of transaction that would result in a change of control of BancWestcause BNPP or inits subsidiaries to violate applicable laws. We must also consult with BNPP prior to implementing or changing any increase in BNP Paribas' ownership percentage. We referrisk, capital investment, asset liability management or regulatory compliance policy. Further, until BNPP no longer consolidates our financial statements with its financial statements under IFRS, we must comply with CRD IV and any similar regulations to the
actions described in this clause (2) as a "company transaction proposal,"
(3) seek to exercise any control over us, other than solely by virtue
of representation on our board of directors,
(4) advise or otherwise assist any other person on any matter
restricted by, or seek to circumvent the limitations of, the standstill
agreement,
(5) present to us, our stockholders or any third party any proposal
that can reasonably be expected to result in a company transaction proposal
or in an increase in BNP Paribas' ownership percentage,
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(6) publicly suggest its willingness to engage directly or indirectly
in a transaction that could reasonably be expected to result in a company
transaction proposal or in an increase in BNP Paribas' ownership percentage
or take any action that might require us to make a public announcement
regarding any company transaction proposal,
(7) initiate, encourage or assist any other person in making, or enter
into negotiationswhich BNPP is subject with respect to any proposal that can reasonably be
expected to result in a company transaction proposal or in an increase in
BNP Paribas' ownership percentage,
(8) directly or indirectly solicit proxies or written consents, or
otherwise become a "participant" in a "solicitation," or assist any
"participant" in a "solicitation" in opposition to the recommendation or
proposalcompensation.
Information Rights. Until BNPP no longer controls us for purposes of the board of directors, or induce or attempt to induce any
other person to take these actions, or seek to influence any other person
with respect to the voting of or a written consent in respect of our
securities carrying rights to vote for directors or, except as otherwise
expressly contemplated by the standstill agreement or our Certificate of
Incorporation, grant a proxy to any person other than an officer or agent
of BNP Paribas or BancWest.
(9) enter into any agreement or otherwise act in concert with any
other person, for the purpose of acquiring, holding, voting or disposing of
our equity securities,
(10) take any other actions to effect a change of control of BancWest
or an increase in BNP Paribas' ownership percentage or otherwise seek to
circumvent any of the limitations set forth in (1) - (9) above, or
(11) directly or indirectly request that we amend or waive any of the
provisions of the standstill agreement.
Exceptions to Standstill Provisions. Notwithstanding the restrictions
described above, under the standstill agreement, BNP Paribas may at any time
submit a business combination proposal to us. It may only do this, however, if:
- it makes the business combination proposal in writing and delivers it
only to our executive committee in a manner which does not require us to
publicly disclose the proposal, and
- BNP Paribas and its representatives keep confidential and refrain from
disclosing to any other person the fact that they have made a business
combination proposal or any of the terms thereof.
The standstill agreement provides that during the standstill period the
executive committee will be under no obligation to BNP Paribas or its affiliates
to accept any business combination proposal or to submit any business
combination proposal to the full board of directors.
In addition,
(1) if part of the agenda of any meeting of our board of directors or
any committee of our board of directors includes the review of any proposal
submitted by a third party with respect to a company transaction proposal
which would result in a change of control of us, other than any proposal
included as a result of action taken by BNP Paribas, or
(2) if our board of directors or any committee of our board of
directors determines to solicit proposals for this type of transaction from
third parties,
thenBHC Act, we will be required to give prompt written notice of this determinationcontinue to BNP Paribas. We must then give BNP Paribas a reasonable opportunity to:
- in the case of (1) above, participate as a potential bidder priorprovide to accepting the third party proposal, or
- in the case of (2) above, participate in the solicitation process as a
potential bidder.
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Post-Standstill Provisions. The standstill agreement provides for a
post-standstill period, which starts on November 1, 2002BNPP information and lasts until either:
- BNP Paribas' ownership percentage falls below 10% or
- BNP Paribas consummates a business combination proposal pursuantdata relating to the
procedures described below or any other tender or exchange offer in which
BNP Paribas and its affiliates acquire at least 90% of the outstanding
BancWest shares of common stock not beneficially owned by BNP Paribas and
its affiliates.
During the post-standstill period BNP Paribas may contact or respond to
contacts from our other stockholders regarding our business and affairs on a
confidential basis. However, during this post-standstill period, neither BNP
Paribas norfinancial results to the extent that such information and data is required for BNPP to meet any of its affiliates may:
- take any action resulting in a majority of our board of directors being
BNP Paribas nomineeslegal, financial, regulatory, compliance, tax, audit (internal and external) or otherwise not constituting independent directors,
- increase its beneficial ownership of our equity securities so that its
ownership percentage becomes greater than its maximum permitted ownership
percentage on November 1, 2002,risk management requirements consistent with past practice or - take any other action that could result in an increase in their ownership
percentage or other material transactions between us and BNP Paribas or
its affiliates.as may be required for BNPP to comply with applicable law. In addition, forduring the first four years of the post-standstill period, BNP
Paribas may not,time BNPP consolidates our financial statements with its financial statements under IFRS, we will be required to maintain accounting principles, systems and may not permit any of its affiliates to, directly or
indirectly:
(1) solicit, finance or become a participant in a solicitation of
proxies or written consents:
- for the election of our non-Class A directors,
- for any stockholder proposal opposed by our board of directors or
- against any proposal submitted to the stockholders and recommended
by our board of directors;
(2) make or submit any proposal to our stockholders opposed by the
board of directors;
(3) make any public statement as to any intention to take actions notreporting formats that are consistent with the terms of the standstill agreement;
(4) publicly announce, except as otherwise legally required, any
intention to dispose of some or all of our securities or acquire additional
BancWest equity securities;
(5) form or join a group with the objective orBNPP's financial accounting practices in effect of effecting a
change of control of BancWest;
(6) take any action inconsistent with the procedures described below
regarding submission of business combination proposals or
(7) publicly request or encourage others to request that we waive any
of the provisions contained in the standstill agreement.
These restrictions are subject to important exceptions. During the
post-standstill period, BNP Paribas may submit a business combination proposal,
including a tender or exchange offer for all our outstanding shares of common
stock, to our executive committee on a confidential basis. When it receives any
business combination proposal, the executive committee must promptly retain an
independent investment banking firm and outside legal counsel to assist it in
its review of the proposal. We will pay the fees of these advisors.
If the independent investment banking firm:
- is unable to conclude within 60 days following BNP Paribas' submission of
the business combination proposal to the executive committee that the
business combination proposal is fair from a financial point of view to
our stockholders, other than BNP Paribas and its affiliates, or
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- concludes that it is inadequate,
then BNP Paribas must withdraw its business combination proposal and may not
submit another one to us for a period of twelve months from the date on which
the independent investment banking firm reached its conclusion, or failed to
reach its conclusion, as the case may be.
If the independent investment banking firm concludes that the business
combination proposal is fair and adequate, then the executive committee will
submit the proposal to the full board of directors for consideration. If a
majority of the independent directors on the board of directors concludes that
the transaction contemplated by the business combination proposal is not in the
best interests of all of our stockholders at that time, then BNP Paribas must
withdraw its business combination proposal and may not submit another business
combination proposal to us for twelve months from the date on which the
independent directors made their conclusion. We use the term independent
director in this section to mean any director who:
- is not an affiliate or a past or present officer, director or employee
of, and was not nominated by, BNP Paribas or any of its affiliates, and
- is not associated with an entity that performs substantial services for
any of the foregoing.
Approval of any business combination proposal and related matters by our
board of directors will require:
- the affirmative vote of a majority of its independent directors, and
- any other vote required by applicable law.
Further, the business combination proposal may be subject to any "market check"
procedures for up to 90 days, as our board of directors, including a majority of
the independent directors, may determine to be appropriate.
If we receive a proposal from a third party that is superior to the
business combination proposal submitted by BNP Paribas we must offer BNP Paribas
a reasonable period, but no more than five business days after we notify them of
the third party's superior proposal, to revise its business combination
proposal. If it chooses, BNP Paribas may revise its proposal so that its terms
are superior to the third party's superior proposal. If BNP Paribas does not
submit a proposal that is superior to the third party's superior proposal within
the five business day period, then we may enter into an agreement for the third
party's superior proposal and our board of directors may recommend that our
stockholders accept that proposal. In that event, BNP Paribas has agreed that,
unless our board of directors withdraws its recommendation of the third party
proposal, it will vote all of our securities beneficially owned by BNP Paribas
in favor of the third party's superior proposal (or tender its securities in the
case of a tender or exchange offer).
If we do not receive a superior proposal during the market check period,
then we and BNP Paribas may enter into a definitive agreement to consummate BNP
Paribas' business combination proposal. This definitive agreement will contain
customary terms and conditions, including customary "fiduciary out" provisions.
Before we can enter into a definitive agreement, however, our board of directors
must receive a reaffirmation of the fairness opinion as of the date of the agreementAnnual Meeting. During this time, we also will be required to maintain appropriate disclosure controls and procedures and internal control over financial reporting, and to provide certifications to BNPP in formaccordance with BNPP's internal standards, and substanceto inform BNPP promptly of any events or developments that might reasonably be expected to materially affect our financial results.
The Stockholder Agreement also provides that, until BNPP no longer controls us for purposes of the BHC Act, we shall consult and coordinate with BNPP with respect to public disclosures and filings, including in connection with our quarterly and annual financial results. Among other requirements, we will, to the extent practicable, provide BNPP with a copy of any public release at least two business days prior to publication and consider in good faith satisfactoryincorporating any comments provided by BNPP.
In addition, we and BNPP will have mutual rights with respect to a
majorityany information and access each may require in connection with regulatory or supervisory reporting obligations or inquiries.
Share Exchange. At BNPP's option, we will be required to exchange some or all of the independent directors. Ifoutstanding common stock beneficially owned by BNPP for an equal number of shares of our non voting common stock.
Indemnification. Each party to the independent investment banking
firm does not reaffirmStockholder Agreement will indemnify the other for breaches of the Stockholder Agreement.
Other Provisions. The Stockholder Agreement also contains covenants and provisions with respect to the confidentiality of our and BNPP's information, subject to certain exceptions, including permitting our directors to share information with BNPP and its fairness opinion, wesubsidiaries, and restrictions on our ability to
take any actions that would cause BNPP or any of its subsidiaries to violate any applicable law or regulation.
The Stockholder Agreement will notify BNP Paribas. BNP
Paribas will thengenerally have 15 days to improve its proposal so that the fairness
opinion may be reaffirmed. If,no further effect on and after BNP Paribas submits an improved proposal,
if any, the independent investment bank still does not reaffirm its fairness
opinion, then the proposed transaction will terminate and BNP Paribas may not
submit another proposal for twelve months following the date on which BNPP ceases to directly or indirectly beneficially own any shares of our outstanding common stock, except certain obligations such as indemnification that will survive termination.
Insurance Agreement
The Insurance Agreement governs the executive committee first submitted the proposal to the boardobligations of directors.
The standstill agreement provides that after weBNPP and BNP Paribas execute a
definitive agreement, BNP Paribas does not haveUSA to vote its shares in favorprocure and maintain director and officer liability insurance for us, our subsidiaries, and each of our respective directors, officers and employees (including any alternative proposalBNPP designated director) generally until such time as BNPP ceases to directly or tender its shares in any alternative tender or
exchange offer thatindirectly beneficially own at least 50% of our outstanding common stock. After such time, we enter into or that a thirdwill be responsible for procuring our own director and officer insurance to cover our directors and officers, including BNPP designated directors. Each party makes after that time.
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TRANSFER RESTRICTIONS.
The standstill agreement also contains specified restrictions on BNP
Paribas' ability to transfer its BancWest securities which restrictions are
subject to specified exceptions. In some circumstances, BNP Paribas must offer
BancWest a rightthe Insurance Agreement will indemnify the other for breaches of first refusal to purchase its shares prior to any transfer
to a third party.
VOTING; OTHER MATTERS.the Insurance Agreement.
Registration Rights Agreement
Pursuant to the standstill agreement, unless specified events have
occurred, BNP Paribas is requiredRegistration Rights Agreement, upon BNPP's request, we will use our reasonable best efforts to voteeffect the registration under applicable federal and state securities laws of any shares of our securitiescommon stock beneficially owned by itBNPP. BNPP may assign its rights under the Registration Rights Agreement to any wholly owned subsidiary of BNPP that acquires from BNPP our common stock so long as such person agrees to be bound by the terms of the Registration Rights Agreement. The rights of BNPP and its permitted transferees under the Registration Rights Agreement will remain in the same
proportion as our unaffiliated stockholders vote, excepteffect with respect to all shares covered by the electionagreement until those shares are sold pursuant to an effective registration statement under the Securities Act, sold pursuant to Rule 144 of Class A directors with respect to which BNP Paribas may vote its
sharesthe Securities Act, transferred in its sole discretion. The standstill agreement also contains specified
agreements with respect to BNP Paribas nominees to our board of directors,
committee representation and other similar governance matters.
REGISTRATION RIGHTS AGREEMENT.
In addition to the standstill agreement, we and BNP Paribas entered into a registration rights agreement at the time of BNP Paribas' original acquisitiontransaction where subsequent public distribution of the shares of our Class A common stock. Underwould not require registration under the Securities Act, or are no longer outstanding.
Demand Registration. BNPP may request registration rights
agreement, BNP Paribas has the right to require us to use our best efforts to
register for resale under the Securities Act of 1933 (the "Securities Act") of all or any portion of our shares of common stockcovered by the agreement, and we will be obligated, subject to limited exceptions, to register such shares as requested by BNPP. BNPP may request that we issue to BNP Paribas upon its transfercomplete five demand registrations and underwritten offerings during the term of the Registration Rights Agreement subject to limitations on, among other things, minimum offering size. Subject to certain exceptions, we may defer the filing of a registration statement after a demand request has been made if at the time of such request we are engaged in confidential business activities, which would be required to be disclosed in the registration statement, and our Board determines that such disclosure would be materially detrimental to us and our stockholders. BNPP will be able to designate the terms of each offering effected pursuant to a demand registration, subject to market "cut back" exceptions regarding the size of the offering.
S-3 Registration. Once we become eligible, BNPP will be able to request on up to three occasions that we file a registration statement on Form S-3 to register all or any portion of our shares of Class A common stock
that it ownscovered by the agreement and we will be obligated, subject to limited exceptions, to register such shares as requested by BNPP. BNPP may, at any time and from time to time, or any securities distributed to BNP Paribas in
respect of the Class A common stock or the common stock.
We agreed in the registration rights agreement to pay all registration
expenses in connection with each registration of securities.
BNP Paribas may require us to register these securities in up to five
demand registrations andrequest that we complete an unlimited number of incidental registrations.
However, BNP Paribas may not make more than a total of three demand and
incidental registration requests in any 12-month period and two demand
registration requests in any 12-month period. The registration rights agreement
contains other customary terms and conditions.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER TO OUR STOCKHOLDERS
The following is a summary of United States federal income tax consequencesshelf take downs subject to certain exceptions such as minimum offering size over the term of the mergerRegistration Rights Agreement. BNPP will be able to stockholders whose sharesdesignate the terms of BancWest common stock are
converted into the righteach offering effected pursuant to receive cash under the merger. The discussion is for
general information only and does not purport to consider all aspects of United
States federal income taxation that might be relevant to our stockholders. The
discussion is baseda registration statement on current law which isForm S-3, subject to change possiblymarket "cut back" exceptions regarding the size of the offering.
Piggy Back Registration. If we at any time intend to file on our behalf or on behalf of any of our other security holders a registration statement in connection with retroactive effect. The discussion applies only to stockholders who hold sharesa public offering of any of our
securities on a form and in a manner that would permit the registration for offer and sale of our common stock as capital assets, and may not applyheld by BNPP, BNPP will have the right to shares of our common
stock received in connection with the exercise of employee stock options or
otherwise as compensation, or to certain types of stockholders (such as
insurance companies, tax-exempt organizations, financial institutions and
broker-dealers) who may be subject to special rules. This discussion does not
discuss the tax consequences to any of our stockholders who, for United States
federal income tax purposes, is a non-resident alien individual, foreign
corporation, foreign partnership or foreign estate or trust, and does not
address any aspect of state, local or foreign tax laws.
The receipt of cash forinclude its shares of our common stock in the mergerthat offering. BNPP's ability to participate in any such offering will be subject to market "cut back" exceptions.
Registration Procedures Expenses. BNPP is generally responsible for all registration expenses, including expenses incurred by us, in connection with the registration, offer and sale of securities under the Registration Rights Agreement. The Registration Rights Agreement sets forth customary registration procedures, including an agreement by us to make our management available for road show presentations in connection with any underwritten offerings. We have also agreed to indemnify BNPP and its permitted transferees with respect to liabilities resulting from untrue statements or omissions in any registration statement used in any such registration, other than untrue statements or omissions resulting from information furnished to us for use in the registration statement by BNPP or any permitted transferee.
Transitional Services Agreement
The Transitional Services Agreement that we and First Hawaiian Bank entered into with BNPP, BancWest Holding and Bank of the West governs the continued provision of certain services by and among the parties to the agreement. Prior to the Reorganization Transactions, Bank of the West and First Hawaiian Bank were the two bank subsidiaries of BancWest. Because Bank of the West and First Hawaiian Bank were under common ownership and were the only two U.S. bank subsidiaries of BNPP, each provided certain services to the other, they shared certain services and they relied on certain third-party service providers to provide them services pursuant to various shared contracts. Bank of the West relied on certain contracts to which BancWest or First Hawaiian Bank was a taxable transactionparty for United States federal income tax purposes. In general,the provision of services that are important to its business. Likewise, First Hawaiian Bank relied on certain contracts to which BancWest, Bank of the West or BNPP was a stockholder who surrenders sharesparty for the provision of certain key services. As we transition toward operating as a stand-alone public company, the parties to the Transitional Services Agreement will cease to provide services to one another and we will cease to rely on the contracts that we have historically shared with Bank of the West or BNPP and replace them with new contracts between us and third-party service providers to the extent necessary. The Transitional Services Agreement governs the continued provision of certain services and our migration away from shared services with Bank of the West, BancWest Holding and BNPP during specified transition periods.
The Transitional Services Agreement provides for the continuation of services pursuant to the following types of arrangements:
- •
- services BNPP, BancWest Holding and/or Bank of the West receive pursuant to a contract with a third-party service provider, which BNPP, BancWest Holding and/or Bank of the West then provide to us on a pass through basis;
- •
- services we and/or First Hawaiian Bank receive pursuant to a contract with a third-party service provider, which we and/or First Hawaiian Bank then provide to BancWest Holding and/or Bank of the West on a pass through basis;
- •
- certain services we receive directly from BancWest Holding and/or Bank of the West; and
- •
- certain services we currently provide to BancWest Holding and/or Bank of the West.
The Transitional Services Agreement governs the continued provision of these types of arrangements relating to the following categories of services:
- •
- information technology services, including, without limitation, data processing, data transmission, various software applications and platforms, services related to the management and operation
- •
- various services that support or relate to financial transactions and budgeting, including, without limitation, access to wire transfer systems, consulting and other management and advisory services, risk management software and trading desk and trade execution software used by Bank of the West's and First Hawaiian Bank's trading desks;
- •
- human resources, such as employee insurance policies, third-party services (e.g., consulting arrangements) related to retirement and 401(k) plans, services related to deferred compensation arrangements and other administrative services;
- •
- services related to bank credit operations, including, without limitation, a commercial loan lending system (which includes an accounting system and loan boarding system), certain services related to our credit cards business and various other analytical software applications and credit related services;
- •
- operations, including, without limitation, debit and credit card processing, ATM processing, item processing and storage and back office solutions;
- •
- support services and other services related to our and Bank of the West's online banking services;
- •
- an insurance policy currently shared by First Hawaiian, BancWest Holding, Bank of the West and First Hawaiian Bank (or some subset of these entities); and
- •
- brokerage services related to the investment services we and Bank of the West offer.
of both a production data center and a disaster recovery center and other related pass through services, such as network circuits;
The fees for each of the services provided under the Transitional Services Agreement have been mutually agreed upon as part of the negotiation of the Transitional Services Agreement and may vary on the basis of usage and other factors. We expect to incur additional annual costs for services provided to us under the Transitional Services Agreement. Although we believe the Transitional Services Agreement contains commercially reasonable terms (including fees for the services provided) that could have been negotiated with an independent third-party, the terms of the agreement may later prove to be more or less favorable than arrangements we could make to provide these services internally or to obtain them from unaffiliated service providers in the future.
The Transitional Services Agreement will terminate on December 31, 2018 or an earlier date as provided therein. The services provided under the Transitional Services Agreement will terminate at various times specified in the agreement, which for certain services may occur at such time as BNPP's beneficial ownership of our common stock for cash ingenerally falls below 51% (if the merger
will recognize capital gain or loss for United States federal income tax
purposes equalagreement has not otherwise terminated at such time). The party receiving services may terminate any service by giving at least 30 days prior written notice to the difference, ifprovider of the service. In addition, subject to consent rights or requirements under third-party agreements, the Transitional Services Agreement provides that the parties may agree to up to one extension of each service term for a period of no longer than 180 days.
Except for breaches of certain intellectual property, confidentiality, systems security and data protection provisions, and breaches of applicable law, in connection with provision or receipt of the services being provided or received under the Transitional Services Agreement, and losses resulting from our or First Hawaiian Bank's or any betweenof BNPP's, BancWest Holding's or Bank of the West's fraud, gross negligence, willful misconduct or bad faith and certain indemnification responsibilities, none of First Hawaiian, First Hawaiian Bank, BNPP, BancWest Holding or Bank of the West will be liable for claims in connection with or arising out of the Transitional Services Agreement in an aggregate amount exceeding the aggregate fees paid to the liable party for services under the Transitional Services Agreement.
Agreements Related to the Reorganization Transactions
In connection with the Reorganization Transactions, we entered into the following agreements with BNPP and certain of its affiliates.
Master Reorganization Agreement
On April 1, 2016, we entered into a Master Reorganization Agreement with BNPP, BancWest Holding and BancWest Corporation. The Master Reorganization Agreement (i) memorializes the Reorganization Transactions, (ii) provides for the simultaneous execution or subsequent negotiation and execution of other agreements that govern certain aspects of our and First Hawaiian Bank's relationship with BNPP, BancWest Holding, BancWest Corporation and Bank of the West after the separation (including, among others, the Transitional Services Agreement, the Tax Sharing Agreement and the Expense Reimbursement Agreement) and (iii) provides for the release of claims by and indemnification rights and obligations of the parties thereto.
Transfer of Assets and Assumption of Obligations. The Master Reorganization Agreement identified the assets transferred to, and liabilities and obligations assumed by, BancWest Holding from First Hawaiian.
All of First Hawaiian's assets, except those solely related to First Hawaiian Bank (including all of the shares of stock of Bank of The West), other than an amount of cash receivedequal to approximately $72 million (which we expect to use to pay certain state and local income taxes and certain non-tax expenses) were transferred to BancWest Holding and all of the liabilities of First Hawaiian, other than the liabilities solely related to First Hawaiian Bank, were assumed by BancWest Holding.
Other Agreements between the Parties. The Master Reorganization Agreement required First Hawaiian, BancWest Holding and BNPP, as applicable, to execute the Tax Sharing Agreement and to cooperate in negotiating and executing the Transitional Services Agreement, the Stockholder Agreement, the Registration Rights Agreement and the stockholder's adjusted tax basisExpense Reimbursement Agreement.
Pursuant to the Master Reorganization Agreement, BancWest Holding or Bank of the West was required to identify to First Hawaiian all contracts that were not, as of April 1, 2016, contemplated to be included in the sharesTransitional Services Agreement and that were entered into between BancWest and a third-party. With respect to any such contracts identified, we have the right to determine whether to terminate, retain or amend any contract that was related solely to the "FHI Business" (defined as the business and operations of First Hawaiian Bank and its subsidiaries and the business and operations of BancWest Common Stock
surrendered. Gainprior to April 1, 2016 as a stand-alone entity related solely to the business and operations of First Hawaiian Bank). We are responsible for any fees, costs or lossexpenses arising from the termination, assignment or amendment of any such contract related solely to the FHI Business. Similarly, BancWest Holding has the right to determine whether to terminate, retain or amend any such identified contract that was related solely to the "BWHI Business" (defined as the business and operations of Bank of the West and its subsidiaries and the business and operations of BancWest prior to April 1, 2016 as a stand-alone entity not related to the business and operations of First Hawaiian Bank (including all assumed obligations that were assigned by BancWest and assumed by BancWest Holding, respectively)). BancWest Holding is responsible for any fees, costs or expenses arising from the termination assignment or amendment of any such contract related solely to the BWHI Business. With respect to any contracts identified that are not solely related to the FHI Business or the BWHI Business, we and BancWest Holding must mutually determine, by good faith cooperation, whether such contracts will be determined separately for each block of shares
(i.e., shares acquired atretained by us, assigned by us and assumed by BancWest Holding or terminated. We had the same cost in a single transaction) surrendered for
cash pursuantright, where there was no mutual agreement, to terminate any such contract prior to the merger. Such gainoffering with BancWest Holding being responsible for any related fees, costs or loss will be long-term capital gain or
loss provided that a stockholder's holding period for such shares is more than
12 months atexpenses.
Release of Claims. Under the timeterms of the consummationMaster Reorganization Agreement, we, BNPP and BancWest Holding provided for the full and complete release and discharge of all liabilities existing or arising from acts or events that occurred or failed to occur prior to April 1, 2016 between BNPP and BancWest Holding and its subsidiaries (the "BWHI Group"), on the one hand, and First Hawaiian and our subsidiaries (the "FHI Group"), on the other hand. In addition, at any time upon the reasonable request of the merger. Capital gainsother, each of individuals derived in respect of capital assets held for more than one year are
eligible for reduced rates of taxation. There are limitations onFirst Hawaiian and BancWest Holding agreed to execute and deliver such further releases as may be deemed necessary or desirable to carry out the deductibility of capital losses.
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Under the U.S. federal backup withholding tax rules, unless an exemption
applies, the paying agent will be required to withhold, and will withhold, 31%
of all cash payments to which a holder of shares or other payee is entitled
pursuant to the merger agreement, unless the stockholder or other payee provides
a tax identification number (social security number, in the case of an
individual, or employer identification number, in the case of other
stockholders), certifies that such number is correct, and otherwise complies
with such backup withholding tax rules. Each of our stockholders, and, if
applicable, each other payee, should complete and sign the Substitute Form W-9
included as partpurposes of the letterprovisions of transmittalthe Master Reorganization Agreement governing each respective party's release of claims.
Indemnification. The Master Reorganization Agreement requires us to be returned toindemnify BancWest Holding and the paying
agent, in order to provide the informationformer and certification necessary to avoid
backup withholding tax, unless an exemption appliescurrent directors, officers and is established in a
manner satisfactory to the paying agent. Congress recently passed legislation
that if, as is expected, signed into law by the President, would reduce the rateemployees of backup withholding. Such reduced rate would be effective 60 days after
enactment.
THE U.S. FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE ARE FOR GENERAL
INFORMATION ONLY AND ARE NOT INTENDED TO CONSTITUTE A COMPLETE DESCRIPTION OF
ALL TAX CONSEQUENCES RELATING TO THE MERGER. BECAUSE INDIVIDUAL CIRCUMSTANCES
MAY DIFFER, EACH STOCKHOLDER SHOULD CONSULT THE STOCKHOLDER'S TAX ADVISOR
REGARDING THE APPLICABILITY OF THE RULES DISCUSSED ABOVE TO THE STOCKHOLDER AND
THE PARTICULAR TAX EFFECTS TO THE STOCKHOLDER OF THE MERGER, INCLUDING THE
APPLICATION OF STATE, LOCAL AND FOREIGN TAX LAWS.
LITIGATION
On May 7, 2001, eight purported class action suits were filed in the
Delaware Court of Chancery against BNP Paribas, BancWest and the members of our
board of directors. On May 9, 2001, a BancWest stockholder filed a purported
class action suit (Index No. 321199) in the Superior CourtBWHI Group from all liabilities, damages, costs and expenses relating to:
- •
- the FHI Business, whether arising prior to or after April 1, 2016;
- •
- any breach by any member of the
State of California, County of San Francisco, against the same defendants and specified officers of BancWest. On May 24, 2001, a substantially similar complaint was filed by another BancWest stockholder in the same California court (Index No. 321646). Plaintiffs in both California suits have stipulated to stay all proceedings in those suits pending entry of final judgment in allFHI Group of theDelaware suits, and those stipulations have been submittedMaster Reorganization Agreement or any ancillary agreement executed by one or more of the parties to theCalifornia court to be so ordered. On consent of all parties, all eight of the Delaware suits have been consolidated into a single action (Civil Action No. 18858-NC) by order of the Delaware court. The various complaints allege, among other things, that the defendants have breached fiduciary and other duties to our public stockholders in connection with BNP Paribas' preliminary proposal to acquire all of our outstanding shares that BNP Paribas does not own at a price of $35 per share. These complaints variously seek, among other things, a court order enjoining any proposed transaction with BNP Paribas and an award of unspecified damages and attorneys' fees. We believe that these complaints are without merit and we intend to defend them vigorously. 4653 THE SPECIAL MEETING This proxy statement is furnishedMaster Reorganization Agreement in connection with thesolicitationimplementation ofproxies by our board of directors in connection with a special meetingthe Reorganization Transactions (each, an "Ancillary Agreement"); and - •
- any contract to which we or any of our
stockholders. DATE, TIME AND PLACE OF THE SPECIAL MEETING The special meeting is scheduledsubsidiaries was a party, and from which both the BWHI Business and the FHI Business derived a benefit, that terminated prior tobe held as follows: Date: , 2001 Time: 9:00 a.m., local time Place: Board Room, 30th Floor,April 1, 2016 to the extent (but only to the extent) that the liabilities arise out of or result from the negligence, recklessness, violation of law, fraud or misrepresentation by or of First HawaiianCenter, 999 Bishop Street, Honolulu, Hawaii PROPOSAL TO BE CONSIDERED AT THE SPECIAL MEETING AtBank or any of its subsidiaries.
Additionally, the special meeting, youMaster Reorganization Agreement requires BancWest Holding to indemnify us and the former and current directors, officers and employees of the members of the FHI Group (the "FHI Indemnitees") from all liabilities, damages, costs and expenses relating to:
- •
- the BWHI Business, whether arising prior to or after April 1, 2016;
- •
- any breach by any member of the BWHI Group of the Master Reorganization Agreement or any Ancillary Agreement; and
- •
- any contract to which we or any of our subsidiaries was a party, and from which both the BWHI Business and the FHI Business derived a benefit, that terminated prior to April 1, 2016, except that this indemnity obligation does not apply to the extent (but only to the extent) that the liabilities arise out of or result from the negligence, recklessness, violation of law, fraud or misrepresentation by or of First Hawaiian Bank or any of its subsidiaries.
BNPP must also indemnify the FHI Indemnitees from and against all liabilities directly resulting from the execution and implementation of the Reorganization Transactions and the separation of BancWest into two independent bank holding companies. However, to the extent any such liability results from the negligence of any member of the BWHI Group or any former or current director, officer or employee of the members of the BWHI Group prior to or as of April 1, 2016, the related indemnification obligations will considerbe the obligations of BancWest Holding and vote uponBancWest Holding shall indemnify as described above.
In addition, under the Master Reorganization Agreement, we, BancWest Holding and BNPP agreed that the Transitional Services Agreement will provide that we and BancWest Holding, respectively, will indemnify the other for any liabilities owed to third parties under the shared services contracts included in the Transitional Services Agreement that arise out of our and BancWest Holding's respective bad acts. See "—Transitional Services Agreement."
Expense Reimbursement Agreement
Prior to the Reorganization Transactions on April 1, 2016, First Hawaiian Bank provided BancWest with certain services for the ultimate benefit of BNPP and its subsidiaries, including BancWest. First Hawaiian Bank provided these services to BancWest pursuant to a proposal to adopt
an agreement and plan of merger,Management Services Agreement dated as of May 8, 2001, amongNovember 28, 2012. Following the Reorganization Transactions, the Management Services Agreement remained in effect, but between First Hawaiian and First Hawaiian Bank, and we entered into an interim expense reimbursement agreement with BancWest BNP
Paribas and Chauchat, a wholly owned subsidiary of BNP Paribas.
RECORD DATEHolding, pursuant to which certain services provided by First Hawaiian Bank under the Management Services Agreement were reimbursable by BancWest Holding.
Effective July 1, 2016, we entered into an Expense Reimbursement Agreement with BancWest Corporation, which replaced the interim expense reimbursement agreement. The board of directors has fixed the close of business on July 27, 2001 as
the record dateExpense Reimbursement Agreement provides that BancWest Corporation will, or will cause BancWest Holding to, reimburse us for certain expenses incurred by us related to services performed for the special meetingultimate benefit of BNPP and only holders of common stockits subsidiaries. Such services include:
- •
- services provided by First Hawaiian Bank pursuant to the Management Services Agreement, including services related to the Federal Reserve's Comprehensive Capital Analysis and
Class A common stock on the record date are entitled to noticeReview ("CCAR") process, BNPP's subsidiaries' implementation of and compliance with certain reporting requirements, certain compliance, treasury and risk services and the preparation of our financial statements in accordance with IFRS ("Covered Services"); and - •
- services we and our subsidiaries perform, or will perform, pursuant to
vote atthespecial meeting.Stockholder Agreement, including services to comply with BNPP's policy framework and to provide BNPP and its subsidiaries with certain information and access ("Other Services").
With respect to the Covered Services, BancWest Corporation will, or will cause BancWest Holding to, reimburse reasonable expenses covered under the Management Services Agreement to the extent such expenses relate to: (i) a certain portion of salary and benefits attributable to time spent by First Hawaiian Bank employees and management on Covered Services; (ii) reliance on third parties for completion of Covered Services and (iii) travel, lodging and meal expenses related to the foregoing. With respect to the Other Services, we will only be reimbursed for reasonable expenses related to our implementation of policies, procedures, programs or systems required to comply with BNPP's policy framework to the extent such expenses relate to policies, procedures, programs or systems (x) created, adopted, developed and/or implemented after July 1, 2016 or (y) existing as of July 1, 2016, but with respect to which expenses incurred significantly exceed amounts historically incurred (in which case the excess will be reimbursed).
The Expense Reimbursement Agreement may be terminated upon mutual written agreement of First Hawaiian and BancWest Corporation.
Tax Sharing Agreement
On April 1, 2016, we entered into a Tax Sharing Agreement with BNPP and BancWest Holding. The Tax Sharing Agreement operates in conjunction with tax allocation agreements that date, there were approximately 5,082 holders of
record of common stock,in existence prior to the Reorganization Transactions and 68,738,373 shares of common stock outstanding. On
the record date, BNP Paribas beneficially owned all 56,074,874 outstanding
shares of Class A common stock, representing approximately 45%allocates rights and responsibilities among First Hawaiian, BNPP and BancWest Holding for certain tax refunds and liabilities, including tax liabilities arising prior to and as a result of the total
voting powerReorganization Transactions and tax return preparation and filing requirements.
Preparation and Payment of BancWest.
VOTING RIGHTS; VOTE REQUIRED FOR ADOPTION
Each share of common stock and Class A common stock entitles its holderIncome Taxes Post Reorganization. Prior to one vote on all matters properly coming before the special meeting. A majoritycompletion of the total numberReorganization Transactions, BancWest was responsible for preparing and filing tax returns and ensuring the timely payment of all outstanding shares of common stockU.S. federal income taxes and Class A common
stock entitled to vote, represented in person or by proxy, will constitute a
quorum atstate and local taxes for BancWest and its subsidiaries under the special meeting. Each share of common stock and Class A common
stock entitles the holder to cast one vote at the special meeting.
If you hold your shares in an account with a broker or bank, you must
instruct the broker or bank on how to vote your shares. If an executed proxy
card returned by a broker or bank holding shares indicates that the broker or
bank does not have discretionary authority to vote on the adoptionterms of the merger
agreement,tax allocation agreements then in existence. Under the shares willTax
Sharing Agreement, BancWest Holding assumed responsibility for preparing and filing tax returns and collecting, paying, receiving and refunding such income taxes on behalf of itself and First Hawaiian for all relevant tax periods. The Tax Sharing Agreement requires that we provide BancWest Holding with information and documents necessary for completing any relevant tax returns and gives us a right to review and approve items on such returns that are directly related to taxes for which First Hawaiian would be considered present atliable.
Until the meeting for purposes of
determiningReorganization Transactions occurred, U.S. federal income taxes were allocated among the presencemembers of a quorum, but will not be voted onconsolidated group of which BancWest was the proposals to
adopt the merger agreement or to adjourn the special meeting, if necessary. This
is called a broker non-vote. Your broker or bank will vote your shares only if
you provide instructions on how to vote by following the instructions provided
to you by your broker or bank.
Under Delaware law, the merger agreement must be adopted by the affirmative
vote of the holders of a majority of the shares of common stock and Class A
common stock outstanding and entitled to vote at the special meeting, voting
together as a single class. In addition, we agreed with BNP Paribas in the
merger agreement that the holders of at least two-thirds of the shares of common
stock and Class A common stock outstanding and entitled to vote at the special
meeting, voting together as a single class, must adopt the merger agreement
before we can complete the merger. The proposal to adjourn the special meeting
must be adopted by the affirmative vote of the holders of a majority of the
shares of common stock and Class A common stock, present in person or by proxy
and entitled to vote on the proposal, voting together as a single class.
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Abstentions and broker non-votes will have the same effect as a vote
against the proposal to adopt the merger agreement. Abstentions will have the
same effect as a vote against, and broker non-votes will have no effect on, the
proposal to adjourn the special meeting.
BNP Paribas has agreed to vote its shares in favor of the adoption of the
merger agreement. No voting agreement exists between BNP Paribas and any of the
directors obligating the directors to vote their shares in favor of the
transaction. However, each of our directors and executive officers has indicated
that he or she intends to vote his or her own shares in favor of adoption of the
merger agreement. Four of our directors are also trustees of the Estate of S.M.
Damon,parent corporation (and which owns 15,200,000 shares of our common stock. The trustees have the
authority to vote the shares of our common stock held by the trust. BancWest
currently expects the trustees to vote in favor of the transaction, but they are
not obligated to do so. BNP Paribas and our directors and executive officers
possess or control another 57,676,433 voting shares. If BNP Paribas, each of our
directors and officers and Damon Estate vote their shares for adoption of the
merger agreement, 58.4% of the outstanding shares of common stock and Class A
common stock, voting together as a single class, will have voted for adoption of
the merger agreement. This means that holders of only an additional 8.3% of all
shares entitled to vote at the meeting would need to vote for adoption of the
merger agreement in order for it to be adopted. If BNP Paribas and our directors
and executive officers vote their shares for the merger but Damon Estate does
not, we will need affirmative votes from holders of about 25,524,078 additional
shares (representing 37.1% of our outstanding common stock and 20.5% of our
total outstanding voting securities) to complete the transaction. Votes will be
tabulated by our transfer agent, American Stock Transfer & Trust Company.
As of July 27, 2001, two of our banking subsidiaries,included Bank of the West and First Hawaiian Bank as fiduciaries, custodianswholly owned subsidiaries of BancWest) in accordance with the relevant tax allocation agreements then in existence. The Tax Sharing Agreement provides that all U.S. federal income taxes for taxable periods ending on or agents, heldprior to the Reorganization Transactions will be allocated among the BancWest consolidated entities under the relevant tax allocation agreements then in existence. Any U.S. federal income taxes of BancWest for a totaltaxable period beginning before the Reorganization Transactions and ending after the Reorganization Transactions will be allocated on a "closing of the books" basis, which is a method of allocating income taxes owed on a pro rata basis, by assuming that the books of the BancWest consolidated entities existing prior to the Reorganization Transactions were closed at the end of April 1, 2016.
For purposes of state and local taxes owed in various U.S. jurisdictions, members of a unitary group of corporations to which we and BancWest Holding belong under applicable state tax laws and regulations will allocate tax liabilities according to the tax allocation agreements and the IHC Tax Allocation Agreement (as defined below), as applicable, except as described below under the section entitled "Tax Liability Arising from the Reorganization Transactions."
Tax Liability Arising from the Reorganization Transactions. As part of the Reorganization Transactions, First Hawaiian distributed all of BancWest Holding's shares to BNPP. The distribution of BancWest Holding was a taxable event under certain state tax laws, including California law. Under the provisions of the Tax Sharing Agreement, we are responsible for all state and local taxes resulting from or arising out of the distribution of BancWest Holding that are expected to be allocated to First Hawaiian under the tax allocation agreements. We paid state and local income taxes of approximately 3.5$95.4 million sharesin June 2016 (which we expect to be partially offset by an expected federal tax reduction of common stock. Onapproximately $33.4 million in 2017) in connection with the Reorganization Transactions (the "Expected Taxes").
First Hawaiian's state and local tax liabilities shown on tax returns filed by BancWest Holding in connection with the distribution (the "Return Taxes") may be different from the amount of Expected Taxes in a relevant jurisdiction (each such difference, a "Return Difference"). Each Return Difference is subject to First Hawaiian's right to review and approve the tax items directly related to such Return Difference, and, in the event of any related disagreements between First Hawaiian and BancWest Holding, to good faith negotiation and final determination by a third-party. If the Return Taxes exceed the Expected Taxes, the difference (after taking into account any tax benefits and costs to First Hawaiian resulting from such difference) is payable by BancWest Holding to First Hawaiian, and if the Return Taxes are less than the Expected Taxes, the difference (after taking into account any U.S. federal income tax costs to First Hawaiian resulting from such difference) is payable by First Hawaiian to BancWest Holding.
The Tax Sharing Agreement also provides that, date those banks held
solein the event that any tax authority makes a determination under federal, state or shared voting powerlocal tax law that the tax liability of First Hawaiian arising out of the Reorganization Transactions is greater than the Return Taxes (the "Unexpected Taxes"), BancWest Holding will make a payment to First Hawaiian in the amount of such Unexpected Taxes (after taking into account any tax benefits and costs to First Hawaiian resulting from such increase in tax liability). In the event that any tax authority makes a determination under federal, state or local tax law that the
tax liability of First Hawaiian arising out of the Reorganization Transactions is less than the Return Taxes (the "Unexpected Tax Reduction"), First Hawaiian will make a payment to BancWest Holding in the amount of such Unexpected Tax Reduction (after taking into account any U.S. federal income tax costs to First Hawaiian resulting from such decrease in tax liability).
Under the Tax Sharing Agreement, no payment with respect to tax liability arising from the Reorganization Transactions will be made by either First Hawaiian or BancWest Holding, unless the aggregate amount of payments required exceeds $10,000.
Treatment of Refunds and Other Tax Benefits ("Refunds"). Under the provisions of the Tax Sharing Agreement, if, pursuant to the tax allocation agreements, we receive any Refund with respect to (1) the taxes paid in respect of taxable periods prior to the Reorganization Transactions or (2) the Return Taxes, we will make a payment to BancWest Holding in the amount of such Refund reduced by any tax costs incurred by First Hawaiian as a result of such Refund. Our obligation to pay such Refund amounts to BancWest Holding is subject to all applicable U.S. banking laws and regulations.
Tax Contests. In the event of an audit, review, examination or any other administrative or judicial action involving any tax reported under the Tax Sharing Agreement ("Tax Contest"), BancWest Holding generally has the responsibility, control and discretion in handling, defending, settling or contesting such Tax Contest. The Tax Sharing Agreement requires all parties to cooperate with each other to furnish necessary information and documents and take any remedial actions to minimize the effects of any adjustment to be made as a result of such Tax Contest. To the extent that such Tax Contest could result in a tax liability that is allocated to us under the Tax Sharing Agreement, we are, at our own cost and expense, entitled to participate in such Tax Contest and BancWest Holding may not settle or compromise such Tax Contest without obtaining our prior written consent.
Tax Allocation Agreement
In connection with the Restructuring Transactions, we and BancWest Holding each became an indirect subsidiary of BNP Paribas USA. Accordingly, we entered into an Agreement for approximately 3.2 millionAllocation and Settlement of these shares. The
address ofIncome Tax Liabilities with BNPP, BNP Paribas Fortis, BNP Paribas USA, BancWest Corporation, BancWest Holding and Bank of the West, is 180 Montgomery Street, San Francisco, California
94104to be effective as of July 1, 2016 (the "IHC Tax Allocation Agreement"), which governs the parties' respective rights and obligations in respect of federal income taxes for taxable periods ending after July 1, 2016, and state and local income taxes for taxable periods ending within or after 2016. The IHC Tax Allocation Agreement replaces all previous tax allocation and sharing agreements to which BNP Paribas USA or any of its subsidiaries, including us, may have been a party, other than the Tax Sharing Agreement. In the event of conflict between the IHC Tax Allocation Agreement and the addressTax Sharing Agreement, the Tax Sharing Agreement controls, except that the allocation of First Hawaiian Bank is 999 Bishop Street, Honolulu,
Hawaii 96813.
VOTING AND REVOCATION OF PROXIES
Stockholders of record may submit proxies by mail, by Internet, or by
telephone. Stockholders who wish to submit a proxy by mail should mark, date,
signstate and return the proxy card in the envelope furnished. Stockholders who wish
to submit a proxy by Internet may do so by going to the website,
www.voteproxy.com. Stockholders who wish to submit a proxy by telephone may do
so by calling 1-800-PROXIES. Telephone and Internet proxy submission 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 submit a proxy by telephone or
the Internet if those services are offered by the nominee.
Proxies received at any time before the special meeting, and not revoked or
superseded before being voted, will be voted at the special meeting. Where a
specification is indicated by the proxy, it will be voted in accordance with the
specification. Where no specification is indicated, the proxy will be voted
"FOR" the proposals to adopt the merger agreement and to adjourn the special
meeting if necessary and in the discretion of the persons named in the proxy
with respect to any other business which may properly come before the meeting or
any adjournment of the meeting. Our board of directors is not currently aware of
any business to be brought before the special meetinglocal income taxes, other than that described
in this proxy statement.
Until your proxy is exercised at the special meeting, you can revoke your
proxystate and change your vote in any of the following ways:
- by delivering written notification to our Corporate Secretary at our
executive offices at 999 Bishop Street, Honolulu, Hawaii 96813,
- by delivering a proxy of a later date by mail, Internetlocal income tax liabilities arising from or telephone,
- by attending the special meeting and voting in person. Your attendance at
the meeting will not, by itself, revoke your proxy; you must vote in
person at the meeting, or
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- if you have instructed a broker to vote your shares, by following the
directions received from your broker to change those instructions.
SOLICITATION OF PROXIES
We will bear the expenses in connection with the solicitationReorganization Transactions, is governed by the IHC Tax Allocation Agreement. In addition, the IHC Tax Allocation Agreement is intended to comply with and be interpreted in accordance with federal and state regulatory tax sharing guidelines outlined in the Interagency Policy Statement dated January 2015.
License Agreement
We and First Hawaiian Bank have entered into a License Agreement with BancWest Holding, BancWest Corporation and Bank of proxies.
Arrangements will also be madethe West with brokerage housesrespect to (1) models, data and other custodians,
nomineesrelated documentation for CCAR and fiduciariesDFAST purposes (the "Models"), (2) processes and coding for the forwarding of solicitation material to the
beneficial owners of common stock held of record by such persons, and we may
reimburse them for their reasonable transaction and clerical expenses.
Solicitation of proxies will be made principally by mail. Proxies may also be
solicited in person, or by telephone, facsimile, telegram or other means of
communication, by our officers and regular employees. These people will receive
no additional compensation for these services, but will be reimbursed for any
transaction expenses incurred by them in connection with these services. We have
retained Georgeson Shareholder Communications Inc., a proxy solicitation firm,
for assistanceuse in connection with the solicitationimplementation of, proxies forand compliance with, the special
meeting atreporting requirements of BNP Paribas USA and BancWest Corporation (the "Reporting Processes") and (3) certain technology developed in connection with services provided under the Transitional Services Agreement (the "Services Technology"), in each case developed by the parties to the License Agreement.
Under the License Agreement, each party has granted each other party a cost of approximately $10,000 plus reimbursement of reasonable
out-of-pocket expenses.
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THE MERGER
This section ofperpetual, non-exclusive license to its rights in the proxy statement describes material aspects of the
proposed merger, including the merger agreement. While we believeModels, Reporting Processes and Services Technology, it being understood that the description covers the material termsparties must obtain any necessary third-party rights to intellectual property, data, models, materials and information included or incorporated in or with any Model, Reporting Process or Services Technology.
Other Related Party Transactions with BNPP
BNPP Equity Options and Stock Awards
Certain of the merger, this summary may not
contain all of the information that is important to you. You should carefully
read this entire proxy statementour named executive officers have received BNPP equity option and the other documents we refer you to for astock awards, as more complete understanding of the merger. In addition, we incorporate important
business and financial information into this proxy statement by reference. You
may obtain the information incorporated by reference into this proxy statement
without charge by following the instructionsfully described in the section entitled "Where You
Can Find More Information" that begins on page 64 of this proxy statement.
EFFECTIVE TIME OF MERGER
If the merger agreement is adopted by the requisite vote of stockholders"Executive and the other conditions to the merger are satisfied, or waived to the extent
permitted, the merger will be consummated and become effective at the time a
certificate of merger is filed with the Secretary of State of the State of
Delaware or any later time as we, BNP Paribas and Chauchat agree upon and
specify in the certificate of merger. If our stockholders adopt the merger
agreement, we expect to complete the merger during the third quarter of 2001.
We or BNP Paribas may terminate the merger agreement prior to the effective
time of the merger in some circumstances, whether before or after the adoption
of the merger agreement by stockholders. Additional details on termination of
the merger agreement are described in "-- The Merger Agreement -- Termination of
the Merger Agreement.Director Compensation."
PAYMENT OF MERGER CONSIDERATION AND SURRENDER OF STOCK CERTIFICATES
If we complete the merger, our common stockholders will be entitled to
receive $35 in cash for each share of common stock that they own. Class A common
shares will remain issued and outstanding as Class A common stock of the
surviving corporation. BNP Paribas or its wholly owned subsidiaries own all
shares of Class A common stock.
BNP Paribas will designate a paying agent reasonably acceptable to the
special committee to make the cash payments contemplated by the merger
agreement. At or prior to the effective time of the merger, BNP Paribas will, or
will cause Chauchat to, deposit in trust with the paying agent funds in an
aggregate amount equal to the merger consideration for all stockholders. The
paying agent will deliver to you your merger consideration according to the
procedure summarized below.
At the close of business on the day of the effective time of the merger, we
will close our stock ledger. After that time, the surviving corporation will not
transfer common stock and Class A common stock on its stock transfer books. If
you present common stock certificates to the surviving corporation after the
effective time of the merger, the surviving corporation will cancel them in
exchange for cash as described in this section.
As soon as practicable after the effective time of the merger, the
surviving corporation will send you, or cause to be sent to you, a letter of
transmittal and instructions advising you how to surrender your certificates in
exchange for the merger consideration.
The paying agent will promptly pay you your merger consideration, together
with any dividends to which you are entitled, after you have (1) surrendered
your certificates to the paying agent and (2) provided to the paying agent any
other items specified by the letter of transmittal.
Interest will not be paid or accrue in respect of cash payments of merger
consideration. The surviving corporation will reduce the amount of any merger
consideration paid to you by any applicable withholding taxes.
If the paying agent is to pay some or all of your merger consideration to a
person other than you, you must have your certificates properly endorsed or
otherwise in proper form for transfer, and you must pay any transfer
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or other taxes payable by reason of the transfer or establish to the surviving
corporation's satisfaction that the taxes have been paid or are not required to
be paid.
YOU SHOULD NOT FORWARD YOUR STOCK CERTIFICATES TO THE PAYING AGENT WITHOUT
A LETTER OF TRANSMITTAL, AND YOU SHOULD NOT RETURN YOUR STOCK CERTIFICATES WITH
THE ENCLOSED PROXY.
The transmittal instructions will tell you what to do if you have lost your
certificate, or if it has been stolen or destroyed. You will have to provide an
affidavit to that fact and, if required by paying agent, BNP Paribas or the
surviving corporation, post a bond in an amount that the paying agent, BNP
Paribas or the surviving corporation, as the case may be, reasonably directs as
indemnity against any claim that may be made against those parties in respect of
the certificate.
After the merger, subject to the exceptions in the next sentence, you will
cease to have any rights as our stockholder. The exceptions include the right to
receive dividends or other distributions with respect to your shares with a
record date before the effective time of the merger, the right to surrender your
certificate in exchange for payment of the merger consideration or, if you
exercise your appraisal rights, the right to perfect your right to receive
payment for your shares pursuant to Delaware law.
One year after the merger occurs, the paying agent will return to the
surviving corporation all funds in its possession that constitute any portion of
the merger consideration, and the paying agent's duties will terminate. After
that time, stockholders may surrender their certificates to the surviving
corporation and, subject to applicable abandoned property laws, escheat and
similar laws, will be entitled to receive the merger consideration without
interest. We, the paying agent, BNP Paribas and Chauchat will not be liable to
stockholders for any merger consideration delivered to a public official
pursuant to applicable abandoned property laws, escheat and similar laws.
ACCOUNTING TREATMENT
For U.S. accounting and financial reporting purposes, the merger is
intended to be treated as a purchase of us by BNP Paribas under generally
accepted accounting principles. Under the purchase method of accounting, the
assets and liabilities of the corporation not surviving a merger are, as of the
effective date of the merger, recorded at their respective fair values and added
to those of the surviving corporation. Financial statements of the surviving
corporation issued after consummation of the merger reflect such values and are
not restated retroactively to reflect the historical financial position or
results of operations of the corporation not surviving.
FEES AND EXPENSES OF THE MERGER
Whether or not the merger is completed and except as otherwise provided in
the merger agreement, all fees and expenses in connection with the merger will
be paid by the party incurring those fees and expenses, except that we and
Chauchat will share equally the expenses related to the printing and mailing of
this proxy statement and all filing and other fees paid to the Securities and
Exchange Commission in connection with the merger.
Other Related Party Transactions
In addition to any
termination fee that we may have to pay under the merger agreement, our total
fees and expenses in connection with the merger are estimated to be
approximately $10.1 million.
Certain of BancWest's fees and expenses in connection with the merger are
set forth in the table below:
Table of these
loans is secured by a real property mortgage.
AGGREGATE
INDEBTEDNESS
OUTSTANDING CURRENT
NAME AND TITLE JULY 27, 2001 INTEREST RATE
- -------------- ------------- -------------
Howard H. Karr(1)........................................... $185,634 7.25%(2)
Executive Vice President and Chief Financial Officer
Bert T. Kobayashi, Jr. ..................................... $404,364 8.625%(2)
Director $246,878 5.0%(3)
Fujio Matsuda............................................... $ 52,161 7.25%(2)
Director $168,042 5.0%(3)
- ---------------
(1) Cosigner of mortgage loan to adult son.
(2) Rate adjusted annually to equal one-year U.S. Treasury index plus 2.5%.
(3) Fixed rate.
During 1999, Bank of the West issued to BNP Paribas a $50,000,000, 7.35%
Subordinated Capital Note due June 24, 2009. That note bears interest at a fixed
rate of 7.35% per annum. The maximum principal amount of that note outstanding
in 2000, and the outstanding principal balance at December 31, 2000 was
$50,000,000.
Bank of the West holds deposits and purchases federal funds from BNP
Paribas. The deposits are generally for terms up to six months and bear interest
at market rates. Federal funds purchases are generally for one to four days. The
maximum daily amount owed by Bank of the West to BNP Paribas in 2000 in
connection with interest-bearing deposits and federal funds purchases was
$517,500,000, and the balance outstanding on December 31, 2000 was $517,000,000.
We and our banking subsidiaries also engage in other transactions in the
ordinary course of business with our affiliates and other related persons as
discussed in our proxy statement for our 2001 annual meeting of stockholders,
which is incorporated by reference into this proxy statement.
OTHER MATTERS FOR ACTION AT THE SPECIAL MEETING
Our board of directors is not aware of any matters to be presented for
action at the special meeting other than those described in this proxy
statement. However, if other matters should properly come before the special
meeting, we intend that the holders of proxies solicited by this proxy statement
will vote on those matters in their discretion; provided that no proxies marked
"against" the proposal to adopt the merger agreement will be voted in favor of a
motion to adjourn or postpone the special meeting for the purpose of soliciting
further proxies in favor of the adoption of the merger agreement.
PROPOSALS BY HOLDERS OF SHARES OF COMMON STOCK
Due to the contemplated consummation of the merger, we do not currently
expect to hold a 2002 annual meeting of stockholders because, following the
merger, we will not be a publicly held company. If the merger is not consummated
for any reason, under the rules of the Securities and Exchange Commission, we
must receive proposals of stockholders intended to be presented at and included
in proxy statement for the 2002 annual meeting of stockholders at our principal
executive offices no later than November 1, 2001. If the date
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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 our quarterly reports on
Form 10-Q.
Our by-laws govern the submission of nominations for director or other
business proposals that a stockholder wishes to have considered at a meeting of
stockholders, but that are not included in our proxy statement for that meeting.
Under our by-laws, nominations for directors or other business proposals to be
addressed at the 2002 annual meeting may be made by a stockholder entitled to
vote who has delivered a notice to our Secretary not later than the close of
business on February 8, 2002 and not earlier than January 19, 2002. Any proposal
must also comply with the other provisions contained in our by-laws relating to
stockholder proposals.
EXPERTS
Our consolidated financial statements incorporated in this proxy statement
by reference to our Annual Report on Form 10-K for the year ended December 31,
2000, have been incorporated in reliance on the report of PricewaterhouseCoopers
LLP, our independent accountants, given on the authority of that firm as experts
in accounting and auditing. It is not anticipated that a representative of
PricewaterhouseCoopers will attend the special meeting.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file at the Securities and Exchange Commission's public
reference rooms in Washington, D.C., New York, New York and Chicago, Illinois.
Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further
information on the public reference rooms. Our Securities and Exchange
Commission filings are also available to the public at the Securities and
Exchange Commission's website at http://www.sec.gov. Copies of documents filed
by us with the Securities and Exchange Commission are also available at the
offices of The New York Stock Exchange, 20 Broad Street, New York, New York
10005
We, BNP Paribas and Chauchat have filed a Schedule 13E-3 with the
Securities and Exchange Commission with respect to the merger. As permitted by
the Securities and Exchange Commission, this proxy statement omits certain
information contained in the Schedule 13E-3. The Schedule 13E-3, including any
amendments and exhibits filed or incorporated by reference as a part of it, is
available for inspection or copying as set forth above. Statements contained in
this proxy statement or in any document incorporated in this proxy statement by
reference regarding the contents of any contract or other document are not
necessarily complete and each such statement is qualified in its entirety by
reference to such contract or other document filed as an exhibit with the
Securities and Exchange Commission.
The Securities and Exchange Commission allows us to "incorporate by
reference," into this proxy statement documents we file with the Securities and
Exchange Commission. This means that we can disclose important information to
you by referring you to those documents. The information incorporated by
reference is considered to be a part of this proxy statement, and later
information that we file with the Securities and Exchange Commission will update
and supersede that information. We incorporate by reference the documents listed
below and any documents filed by us pursuant toContents
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 13(a), 13(c), 14 or
15(d)16(a) of the Exchange Act after the date of this proxy statementrequires directors, executive officers and before the
dategreater than 10% beneficial owners of the special meeting:
The Audit Committee of the special meetingBoard, which consists entirely of directors who meet the independence requirements of applicable SEC regulations and the NASDAQ listing standards for audit committee members, has furnished the following report:
Report of the Audit Committee
The Company's management is responsible for the Company's internal controls and financial reporting process. The Company's independent registered public accounting firm is responsible for performing an independent audit of the Company's consolidated financial statements and issuing an opinion on the conformity of those financial statements with accounting principles generally accepted in order to receive timely
deliverythe United States of such documents priorAmerica ("GAAP"). The Audit Committee oversees the Company's internal controls and financial reporting process on behalf of the Board of Directors and in accordance with the Audit Committee Charter.
In this context, the Audit Committee has met and held discussions with management and the independent registered public accounting firm. Management represented to the special meeting.
This proxy statementAudit Committee that the Company's consolidated financial statements were prepared in accordance with GAAP and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee discussed with the independent registered public accounting firm matters required to be discussed by Statement on Auditing Standards No. 16,Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board, including the quality, and not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of the disclosures in the financial statements.
In addition, the Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm's communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm the firm's independence from the Company and its management. In concluding that the registered public accounting firm is independent, the Audit Committee considered, among other factors, whether the non-audit services provided by the firm were compatible with its independence.
The Audit Committee discussed with the Company's independent registered public accounting firm the overall scope and plans for their audit. The Audit Committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of their examination, their evaluation of the Company's internal controls, and the overall quality of the Company's financial reporting.
In performing all of these functions, the Audit Committee acts only in an oversight capacity. In its oversight role, the Audit Committee relies on the work and assurances of the Company's management, which has the primary responsibility for financial statements and reports, and of the independent registered public accounting firm who, in its report, expresses an opinion on the conformity of the
Company's financial statements to GAAP. The Audit Committee's oversight does not constituteprovide it with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the solicitationAudit Committee's considerations and discussions with management and the independent registered public accounting firm do not assure that the Company's financial statements are presented in accordance with GAAP, that the audit of a proxythe Company's financial statements has been carried out in any
jurisdiction toaccordance with auditing standards generally accepted in the United States of America or from any person to whom or from whom itthat the Company's independent registered public accounting firm is unlawful to make
such proxy solicitation in such jurisdiction. You should rely only"independent."
In reliance on the information contained or incorporated by reference in this proxy statementreviews and discussions referred to vote your shares atabove, the special meeting. We have not authorized anyone to
provide you with information that is different from what is contained in this
proxy statement. This proxy statement is dated , 2001. You should not
assume that the information contained in this proxy statement is accurate as of
any date other than that date, and the mailing of this proxy statement to
stockholders does not create any implication to the contrary.
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ANNEX A
AGREEMENT AND PLAN OF MERGER
DATED AS OF MAY 8, 2001
AS AMENDED AND RESTATED
AS OF JULY 19, 2001
AMONG
BANCWEST CORPORATION,
BNP PARIBAS
AND
CHAUCHAT L.L.C.
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TABLE OF CONTENTS
PAGE
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ARTICLE I
The Merger
SECTION 1.01. The Merger.................................................. 2
SECTION 1.02. Effective Time; Closing..................................... 2
SECTION 1.03. Effect of the Merger........................................ 2
SECTION 1.04. Certificate of Incorporation; By-laws....................... 2
SECTION 1.05. Directors and Officers...................................... 2
SECTION 1.06. Additional Actions.......................................... 3
SECTION 1.07. Change in Structure......................................... 3
ARTICLE II
Conversion of Securities; Exchange of Certificates;
Deposit; Disclosure Schedules
SECTION 2.01. Effect on Capital Stock and LLC Interests................... 3
SECTION 2.02. Exchange Procedures......................................... 4
SECTION 2.03. Company Stock Options; Company Restricted Stock; Plans...... 5
SECTION 2.04. Shares of Dissenting Stockholders........................... 6
SECTION 2.05. Adjustment of Merger Consideration.......................... 6
SECTION 2.06. Disclosure Schedules........................................ 6
ARTICLE III
Representations and Warranties of the Company
SECTION 3.01. Corporate Organization...................................... 7
SECTION 3.02. Capitalization.............................................. 7
SECTION 3.03. Authority; No Violation..................................... 8
SECTION 3.04. Consents and Approvals...................................... 9
SECTION 3.05. Reports..................................................... 9
SECTION 3.06. Financial Statements........................................ 10
SECTION 3.07. Company Action.............................................. 10
SECTION 3.08. Opinion of Financial Advisor................................ 10
SECTION 3.09. Broker's Fees............................................... 10
SECTION 3.10. Absence of Certain Changes or Events........................ 11
SECTION 3.11. Legal Proceedings........................................... 11
SECTION 3.12. Tax Matters................................................. 11
SECTION 3.13. Employee Benefit Plans; ERISA............................... 11
SECTION 3.14. SEC Reports................................................. 13
SECTION 3.15. Licenses; Compliance with Applicable Law.................... 13
SECTION 3.16. Certain Contracts........................................... 13
SECTION 3.17. Agreements with Regulatory Agencies......................... 13
SECTION 3.18. Undisclosed Liabilities..................................... 13
SECTION 3.19. Environmental Matters....................................... 14
SECTION 3.20. Transactions with Affiliates................................ 14
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PAGE
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ARTICLE IV
Representations and Warranties of Parent
SECTION 4.01. Corporate Organization...................................... 14
SECTION 4.02. Authority; No Violation..................................... 15
SECTION 4.03. Consents and Approvals...................................... 15
SECTION 4.04. Financing................................................... 16
SECTION 4.05. Litigation; Regulatory Action............................... 16
SECTION 4.06. Absence of Certain Changes.................................. 16
ARTICLE V
Conduct of Business Pending the Merger
SECTION 5.01. Conduct of Business Prior to the Effective Time............. 16
SECTION 5.02. Forbearances of the Company................................. 16
SECTION 5.03. Covenants of Parent......................................... 18
ARTICLE VI
Additional Agreements
SECTION 6.01. Stockholders' Meeting....................................... 18
SECTION 6.02. Regulatory Matters.......................................... 19
SECTION 6.03. Access to Information; Confidentiality...................... 20
SECTION 6.04. Other Offers................................................ 21
SECTION 6.05. Indemnification and Insurance............................... 22
SECTION 6.06. Notification of Certain Matters............................. 23
SECTION 6.07. Public Announcements........................................ 23
SECTION 6.08. Exchange Act and NYSE Filings............................... 23
SECTION 6.09. Reasonable Best Efforts..................................... 23
SECTION 6.10. Performance by Merger Sub................................... 24
SECTION 6.11. Takeover Statutes........................................... 24
SECTION 6.12. Standstill Agreement........................................ 24
SECTION 6.13. Employee Benefits........................................... 24
ARTICLE VII
Conditions Precedent
Conditions to Each Party's Obligation To Effect the
SECTION 7.01. Merger...................................................... 25
SECTION 7.02. Conditions to Obligations of Parent and Merger Sub.......... 26
SECTION 7.03. Conditions to Obligations of the Company.................... 26
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination................................................. 26
SECTION 8.02. Effect of Termination....................................... 28
SECTION 8.03. Amendment................................................... 29
SECTION 8.04. Extension; Waiver........................................... 29
ARTICLE IX
General Provisions
Non-Survival of Representations, Warranties and
SECTION 9.01. Agreements.................................................. 29
SECTION 9.02. Expenses.................................................... 29
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PAGE
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SECTION 9.03. Notices..................................................... 29
SECTION 9.04. Definitions and Usage....................................... 30
SECTION 9.05. Accounting Terms............................................ 33
SECTION 9.06. Severability................................................ 33
SECTION 9.07. Entire Agreement; Assignment................................ 33
SECTION 9.08. Parties in Interest......................................... 33
SECTION 9.09. Specific Performance........................................ 33
SECTION 9.10. Governing Law; Consent to Jurisdiction...................... 33
SECTION 9.11. Headings.................................................... 34
SECTION 9.12. Counterparts................................................ 34
SECTION 9.13. Construction................................................ 34
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
This AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of July
19, 2001 (this "Agreement"), is by and among BancWest Corporation, a Delaware
corporation (the "Company"), BNP Paribas, a societe anonyme or limited liability
banking corporation organized under the laws of the Republic of France
("Parent"), and Chauchat L.L.C., a Delaware limited liability company ("Merger
Sub");
WHEREAS, the Company, Parent and Merger Sub entered into an Agreement and
Plan of Merger, dated as of May 8, 2001 (the "Original Merger Agreement"), and
they now desire to amend and restate the Original Merger Agreement to, among
other things, permit the Company to pay a pro rata dividend to holders of
Company Common Shares (as defined below) under specified circumstances (it being
understood that all references herein to "the date here of " refer to May 8,
2001);
WHEREAS, the Company has authority to issue (i) 400,000,000 shares of
Common Stock, par value $1.00 per share (the "Company Common Stock"), 68,635,656
of which were outstanding as of May 2, 2001, (ii) 150,000,000 shares of Class A
Common Stock, par value $1.00 per share (the "Class A Common Stock" and together
with the Company Common Stock, the "Company Common Shares"), 56,074,874 of which
were outstanding as of the date hereof and (iii) 50,000,000 shares of Preferred
Stock (the "Company Preferred Stock"), none of which are outstanding;
WHEREAS, Parent and its Subsidiaries own all of the outstanding shares of
Class A Common Stock;
WHEREAS, Parent has proposedAudit Committee recommended to the Board of Directors, of the Company that
Parent or an affiliate acquire all of the Company Common Stock;
WHEREAS, Merger Sub is a limited liability company, the sole member of
which is Chauchat Holdings Corporation, a Delaware corporation ("US Parent") and
wholly-owned subsidiary of Parent, formed for the purpose of entering into this
Agreement and consummating the transactions contemplated hereby;
WHEREAS, the Executive Committee of the Board of Directors of the Company
has established a special committee (the "Special Committee"), consisting only
of non-management directors elected by holders of the Company Common Stock, to
consider, among other things, the transactions contemplated by this Agreement
and to make a recommendation to the Board of Directors of the Company with
respect thereto;
WHEREAS, the Special Committee (i) has determined that it is fair to and in
the best interests of the Company and the holders of Company Common Stock to
consummate the merger (the "Merger") of Merger Sub with and into the Company
upon the terms and subject to the conditions set forth in this Agreement and in
accordance with the Delaware General Corporation Law (the "DGCL") and the
Delaware Limited Liability Company Act (the "DLLCA") and (ii) has approved the
Merger and determined that the Merger and the other transactions contemplated by
this Agreement should be approved and declared advisable by the Board of
Directors of the Company and that the Board of Directors of the Company should
resolve to recommend that the holders of Company Common Shares adopt this
Agreement;
WHEREAS, the respective Boards of Directors of the Company and Parent, and
US Parent, as the sole member of Merger Sub, and US Parent have approved and
declared advisable this Agreement and the Merger and the other transactions
contemplated hereby upon the terms and subject to the conditions set forth in
this Agreement and in accordance with the DGCL and the DLLCA and the Board of
Directors of the Company has resolved to recommendapproved, that the Company's
stockholders adopt this Agreement and the Merger; and
WHEREAS, the respective Boards of Directors of the Company and Parent have
determined that the Merger is fair to and in the best interests of their
respective stockholders.
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NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained and intending to be legally bound hereby, the
parties agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01 The Merger. Upon the terms and subject to the conditions set
forth in Article VII, and in accordance with the provisions of the DGCL and the
DLLCA, at the Effective Time (as defined below), Merger Sub shall be merged with
and into the Company. As a result of the Merger, the separate existence of
Merger Sub shall cease, and the Company shall continue as the surviving
corporation (the "Surviving Corporation") under the name BancWest Corporation.
SECTION 1.02 Effective Time; Closing. The closing of the Merger (the
"Closing") shall take place (i) at the offices of Cleary, Gottlieb, Steen &
Hamilton, One Liberty Plaza, New York, New York at 9:00 a.m. New York City time
on the third business day after all of the conditions set forth in Article VII
have been satisfied or, subject to applicable law, waived (other than those
conditions that by their nature are to be satisfied at the Closing, but subject
to the satisfaction or waiver of those conditions) in accordance with this
Agreement or (ii) at such other place and time and/or on such other date as
Parent and the Company may agree in writing (the "Closing Date"). Subject to the
provisions of this Agreement, as soon as practicable on the Closing Date, the
parties hereto shall file a certificate of merger (the "Certificate of Merger")
with the Secretary of State of the State of Delaware, in such form as required
by, and executed in accordance with, the DGCL and the DLLCA. The term "Effective
Time" means the date and time of the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware (or such later time as may be
agreed by the parties hereto and specified in the Certificate of Merger).
SECTION 1.03 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of the DGCL and the
DLLCA. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time, without further act or deed, all the property, rights,
immunities, privileges, powers, franchises and licenses of the Company and
Merger Sub shall vest in the Surviving Corporation and all debts, liabilities,
obligations, restrictions and duties of each of the Company and Merger Sub shall
become the debts, liabilities, obligations, restrictions and duties of the
Surviving Corporation.
SECTION 1.04 Certificate of Incorporation; By-laws.
(a) Certificate of Incorporation. At the Effective Time, the Certificate
of Incorporation of the Company as in effect immediately prior to the Effective
Time shall be amended so as to read in its entirety as set forth in Exhibit A
hereto, and as so amended shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter amended in accordance with its terms and
as provided by the DGCL.
(b) By-laws. At the Effective Time, the By-laws of the Company as in
effect immediately prior to the Effective Time shall be amended so as to read in
their entirety as set forth in Exhibit B hereto, and as so amended shall be the
By-laws of the Surviving Corporation until thereafter amended in accordance with
their terms and as provided by the DGCL and the Certificate of Incorporation of
the Surviving Corporation.
SECTION 1.05 Directors and Officers.
(a) Directors. From and after the Effective Time, the directors of the
Company shall be the directors of the Surviving Corporation until the earlier of
their resignation or removal or until their respective successors are duly
elected and qualified, as the case may be, in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation, the DGCL and this
Agreement.
(b) Officers. From and after the Effective Time, the officers of the
Company immediately prior to the Effective Time shall be the officers of the
Surviving Corporation and shall hold office until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be, in
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accordance with the Certificate of Incorporation and By-laws of the Surviving
Corporation, the DGCL and this Agreement.
SECTION 1.06 Additional Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any further deeds,
assignments or assurances in law or any other acts are necessary or desirable to
(a) vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation its rights, title or interest in, to or under any of the rights,
properties or assets of the Company or its Subsidiaries, or (b) otherwise carry
out the provisions of this Agreement, the Company and its officers and directors
shall be deemed to have granted to the Surviving Corporation an irrevocable
power of attorney to execute and deliver all such deeds, assignments or
assurances in law and to take all acts necessary, proper or desirable to vest,
perfect or confirm title to and possession of such rights, properties or assets
in the Surviving Corporation and otherwise to carry out the provisions of this
Agreement, and the officers and directors of the Surviving Corporation are
authorized in the name of the Company to take any and all such action.
SECTION 1.07 Change in Structure. Parent may, at any time prior to the
mailing of the Proxy Statement to the stockholders of the Company, change the
method of effecting the combination with the Company to substitute a direct or
indirect Delaware corporate subsidiary of Parent for Chauchat L.L.C., in which
case (i) all references to Merger Sub in this Agreement shall be deemed to refer
to such subsidiary and all references to Merger Sub being a limited liability
company shall be deemed to refer to Merger Sub being a corporation, (ii) all
references to Merger Sub Units shall be deemed to refer to the common stock of
such subsidiary, and (iii) all references to the DLLCA shall be disregarded;
provided, that no such change shall alter or change in any way the consideration
to be issued to holders of Company Common Stock or the holders of Options or
Restricted Shares or impede or delay consummation of the Merger.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES; DEPOSIT;
DISCLOSURE SCHEDULES
SECTION 2.01 Effect on Capital Stock and LLC Interests. As of the
Effective Time, by virtue of the Merger and without any action on the part of
the holder of any Company Common Shares or any limited liability company
interests of Merger Sub (the "Merger Sub Units"):
(a) Cancellation of Merger Sub Units. All of the Merger Sub Units
issued and outstanding immediately prior to the Effective Time shall be
canceled and retired and shall cease to exist without any consideration
payable therefor.
(b) Cancellation of Company Owned Stock. All shares of Company Common
Stock and Class A Common Stock (if any) that are held in the treasury of
the Company or by any wholly owned Subsidiary of the Company (other than
Company Common Shares owned, directly or indirectly, in trust accounts,
managed accounts and the like or otherwise held in a fiduciary or custodial
capacity that are beneficially owned by third parties ("Fiduciary Shares")
and other than any Company Common Shares held in respect of a debt
previously contracted) shall be canceled and shall cease to exist without
any consideration payable therefor.
(c) Conversion of Company Common Stock. Each share of Company Common
Stock issued and outstanding immediately prior to the Effective Time (other
than (i) Dissenting Shares, if applicable, and (ii) shares of Company
Common Stock referred to in Section 2.01(b)), shall be converted into the
right to receive from the Surviving Corporation $35.00 in cash (the "Merger
Consideration") without interest thereon upon surrender of the certificate
previously representing such share of Company Common Stock as provided in
Section 2.02(c). As of the Effective Time, all shares of Company Common
Stock (other than (i) Dissenting Shares, if applicable, and (ii) shares of
Company Common Stock referred to in Section 2.01(b)) shall no longer be
outstanding and shall automatically be canceled and shall cease to exist,
and each certificate (a "Certificate") which immediately prior to the
Effective Time represented any such share of Company Common Stock (other
than Certificates representing (i) Dissenting Shares, if applicable, and
(ii) shares of Company Common Stock referred to in Section 2.01(b)) shall
cease to
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have any rights with respect thereto, except the right to receive the
Merger Consideration and any dividends or other distributions to which
holders become entitled in accordance with this Article II upon the
surrender of such Certificate.
(d) Treatment of Class A Common Stock. Each share of Class A Common
Stock issued and outstanding immediately prior to the Effective Time (other
than shares of Class A Common Stock to be canceled pursuant to Section
2.01(b)) shall remain issued and outstanding as Class A Common Stock of the
Surviving Corporation, which shall have the terms and conditions specified
in the Certificate of Incorporation of the Surviving Corporation set forth
in Exhibit A hereto.
SECTION 2.02. Exchange Procedures. (a) At and after the Effective Time,
each Certificate formerly representing shares of Company Common Stock shall
(except as specifically set forth in Section 2.01 and subject to applicable law
in the case of Dissenting Shares) represent only the right to receive the Merger
Consideration, without interest.
(b) At or prior to the Effective Time, Parent shall or shall cause Merger
Sub to deposit, or cause to be deposited, with a bank or trust company
reasonably satisfactory to the Company (it being understood that an affiliate of
Parent or the Company is reasonably satisfactory to the Company) (the "Paying
Agent"), for the benefit of the holders of the Certificates, funds in the
aggregate amount to be paid pursuant to this Article II in exchange for
outstanding shares of Company Common Stock. Any cash deposited with the Paying
Agent shall hereinafter be referred to as the Exchange Fund.
(c) As promptly as practicable after the Effective Time, the Surviving
Corporation shall send or cause to be sent to each holder of record of shares of
Company Common Stock (other than shares that are not to be canceled in exchange
for Merger Consideration pursuant to Section 2.01(c)) immediately prior to the
Effective Time transmittal materials for use in exchanging Certificates for the
Merger Consideration. The Surviving Corporation shall cause any check in respect
of the Merger Consideration (together with any dividends or other distributions
to which holders become entitled in accordance with this Article II upon
surrender of such Certificate) which such person shall be entitled to receive to
be delivered to such stockholder upon delivery to the Paying Agent of
Certificates formerly representing such shares of Company Common Stock (or
indemnity reasonably satisfactory to the Surviving Corporation and the Paying
Agent, if any of such Certificates are lost, stolen or destroyed) owned by such
stockholder. In the event of a transfer of ownership of the shares of Company
Common Stock that is not registered in the transfer records of the Company,
payment may be made to a person other than the person in whose name the
Certificate so surrendered is registered, if such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the person requesting
such payment shall pay any transfer or other taxes required by reason of the
payment to a person other than the registered holder of such Certificate or
establish to the satisfaction of the Surviving Corporation that such tax has
been paid or is not applicable. No interest will be paid on any such cash to be
paid pursuant to this Article II upon such delivery. The Surviving Corporation
shall be entitled to deduct and withhold from the Merger Consideration otherwise
payable to any holder of Certificates such amounts (if any) as the Surviving
Corporation determines are required to be deducted or withheld under the Code,
or any provision of United States, state or local tax law or any foreign tax law
applicable as a result of the residence, location, domicile or other facts
relating to the stockholder. To the extent that amounts are so withheld by the
Surviving Corporation, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of such Certificates.
(d) Subject to Section 2.04, at the Effective Time, holders of Company
Common Stock shall cease to be, and shall have no rights as, stockholders of the
Company, other than to receive any dividend or other distribution with respect
to the Company Common Stock with a record date occurring prior to the Effective
Time (including any Pro Rata Dividend) and the Merger Consideration. From and
after the Effective Time, there shall be no transfers on the stock transfer
records of the Company of any shares of the Company Common Stock that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation or the Paying
Agent for transfer, they shall be canceled and exchanged for the Merger
Consideration deliverable in respect thereof pursuant to this Agreement in
accordance with the procedures set forth in this Section 2.02 together with any
dividends or other distributions
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to which the holder becomes entitled in accordance with this Article II upon the
surrender of such Certificates.
(e) Any funds (including any interest with respect thereto) which have been
made available to the Paying Agent and that remain unclaimed by the former
stockholders of the Company for twelve months after the Effective Time shall be
paid to the Surviving Corporation. Any former stockholders of the Company who
have not theretofore complied with this Article II shall thereafter look only to
the Surviving Corporation and Parent for payment of the Merger Consideration in
respect of each share of Company Common Stock formerly held by such stockholder
as determined pursuant to this Agreement, in each case, without any interest
thereon. Any Merger Consideration remaining unclaimed as of a date which is
immediately prior to such time as such amounts would otherwise escheat to or
become property of any Governmental Entity shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation free and clear
of any claims or interest of any person previously entitled thereto.
Notwithstanding the foregoing, none of the Paying Agent, Parent, the Company,
Merger Sub or the Surviving Corporation shall be liable to any former holder of
Company Common Stock for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws.
(f) In the event any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if required by the Paying
Agent, the Surviving Corporation or Parent, as the case may be, the posting by
such person of a bond in such amount as the Paying Agent, the Surviving
Corporation or Parent, as the case may be, may reasonably direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Paying Agent, the Surviving Corporation or Parent, as the case may be, shall
issue in exchange for such lost, stolen or destroyed Certificate the applicable
Merger Consideration deliverable in respect thereof pursuant to this Agreement
and any dividends or other distributions to which holders become entitled in
accordance with this Article II upon the surrender of such Certificate.
(g) Any portion of the Merger Consideration made available to the Paying
Agent pursuant to this Section 2.02 to pay for shares of Company Common Stock
for which appraisal rights have been perfected in accordance with Section 262 of
the DGCL shall be returned to the Surviving Corporation upon demand.
(h) The Paying Agent shall invest any cash included in the Exchange Fund,
as directed by Parent, on a daily basis; provided, that in the case of any
losses incurred in the Exchange Fund as a result of such investments, Parent
shall, or shall cause the Surviving Corporation, to take all actions necessary
(including by depositing additional cash) to ensure that the Exchange Fund
includes cash sufficient to satisfy the obligations of Parent and the Surviving
Corporation to pay the Merger Consideration payable pursuant to this Article II
and any dividends or other distributions to which holders become entitled in
accordance with this Article II upon the surrender of Certificates. Any interest
and other income resulting from such investments shall be paid to or at the
direction of the Surviving Corporation.
SECTION 2.03. Company Stock Options; Company Restricted Stock; Plans.
(a) Stock Options. At the Effective Time, each option (and any stock
appreciation rights associated therewith) to purchase a share of Company Common
Stock (an "Option" and, collectively, the "Options") outstanding and unexercised
as of the Effective Time granted pursuant to the 1998 Stock Incentive Plan (as
amended), the Stock Incentive Plan (as amended), the California Community
Bancshares Corporation 1993 Stock Option Plan, the Continental Pacific Bank 1990
Amended Stock Option Plan, the SierraWest Bancorp 1996 Stock Option Plan (as
amended), the Sierra Tahoe Bancorp 1988 Stock Option Plan (as amended) and any
other equity-based plans or agreements of or with the Company or any of its
Subsidiaries providing for the granting of options with respect to Company
Common Stock (collectively, the "Company Stock Option Plans") shall be canceled,
whether or not then exercisable or vested, and shall represent the right to
receive the following consideration in settlement thereof. Each Option shall
vest as a result of the Merger and shall become exercisable at or immediately
prior to the Effective Time. The Surviving Corporation (or any trust that is
adopted in connection with any such Company Stock Option Plan) shall pay to the
holder of any Option the excess (rounded to the nearest $0.01), if any, of the
Merger Consideration over such Option's exercise price (the "Option Spread") as
soon as practicable after the Effective Time. All payments made
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pursuant to this Section 2.03(a) shall be reduced by all applicable withholding
taxes and other similar charges.
(b) Restricted Shares. At the Effective Time, each share of restricted
stock (a "Restricted Share" and, collectively, the "Restricted Shares")
outstanding as of the Effective Time issued pursuant to a Company Stock Option
Plan, the Incentive Plan for Key Executives (as amended) or any other
equity-based plans or agreements of or with the Company or any of its
Subsidiaries providing for the granting of restricted stock awards with respect
to Company Common Stock (collectively, the "Company Equity Plans" and together
with the Company Stock Option Plans, the "Company Stock Plans"), to the extent
not already vested, shall vest and shall represent the right to receive the
following consideration in settlement thereof. The Surviving Corporation (or any
trust that is adopted in connection with any such Company Equity Plan) shall pay
to the holder of a Restricted Share the Merger Consideration as soon as
practicable after the Effective Time. All payments made pursuant to this Section
2.03(b) shall be reduced by all applicable withholding taxes and other similar
charges.
(c) As of the Effective Time, the Company shall use its reasonable best
efforts, in consultation with Parent, to remove, or cause to be removed from
each and every plan, program, agreement or arrangement any right of any
participant thereunder to invest in, or receive a distribution in, Company
Common Stock.
SECTION 2.04. Shares of Dissenting Stockholders. (a) Notwithstanding
anything in this Agreement to the contrary, any shares (the "Dissenting Shares")
of Company Common Stock that are issued and outstanding as of the Effective Time
and that are held by a holder who has not voted in favor of the Merger or
consented thereto in writing and who properly demands appraisal of such
Dissenting Shares pursuant to, and who complies in all respects with, Section
262 of the DGCL, shall not be converted into the right to receive the Merger
Consideration as provided in Section 2.01(c), unless and until such holder shall
have failed to perfect, or shall have effectively withdrawn or lost, his or her
right to appraisal under the DGCL, and instead shall be entitled to receive such
consideration as may be determined to be due with respect to such Dissenting
Shares pursuant to and subject to the requirements of Section 262 of the DGCL.
If, after the Effective Time, any such holder shall have failed to perfect or
shall have effectively withdrawn or lost such right, each share of such holder's
Company Common Stock shall thereupon be deemed to have been converted into and
to have become, as of the Effective Time, the right to receive, without
interest, the Merger Consideration, in accordance with Section 2.01 (together
with any dividends or other distributions to which holders of Certificates
become entitled in accordance with this Article II upon the surrender of such
Certificates).
(b) The Company shall give Merger Sub and Parent (i) prompt notice of any
notices or demands (or withdrawals of notices or demands) for appraisal or
payment for shares of Company Common Stock received by the Company and (ii) the
opportunity to participate in and direct all negotiations and proceedings with
respect to any such demands or notices. The Company shall not, without prior
written consent of Merger Sub and Parent, make any payments, or settle, offer to
settle or otherwise negotiate, with respect to any such demands.
(c) Dissenting Shares, if any, after payments of fair value in respect
thereof have been made to the holders thereof pursuant to the DGCL, shall be
canceled.
SECTION 2.05. Adjustment of Merger Consideration. In the event that,
subsequent to the date of this Agreement but prior to the Effective Time, the
outstanding shares of Company Common Stock shall have been changed into a
different number of shares of a different class as a result of a stock split,
reverse stock split, stock dividend, subdivision, reclassification, split,
combination, exchange, recapitalization or other similar transaction, the Merger
Consideration and any other number or amount which is based upon the number of
shares of Company Common Stock shall be appropriately adjusted.
SECTION 2.06. Disclosure Schedules. (a) Prior to the execution and
delivery of this Agreement, the Company has delivered to Parent and Merger Sub,
and Parent and Merger Sub have delivered to the Company, a schedule (in the case
of the Company, the "Company Disclosure Schedule," and, in the case of Parent
and Merger Sub, the "Parent Disclosure Schedule") setting forth, among other
things, in each case with respect to specified sections of this Agreement, items
the disclosure of which is necessary or appropriate
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either in response to an express disclosure requirement contained in a provision
hereof or as an exception to one or more of such party's representations or
warranties contained in Article III, in the case of the Company, or Article IV,
in the case of Parent and Merger Sub, or to one or more of such party's
covenants contained in Article V; provided, however, that notwithstanding
anything in this Agreement to the contrary, (i) no such item is required to be
set forth in a Disclosure Schedule as an exception to a representation or
warranty if its absence would not result in the related representation or
warranty being deemed untrue or incorrect under the standard established by
Section 2.06(b), and (ii) the mere inclusion of an item in a Disclosure Schedule
as an exception to a representation or warranty shall not be deemed an admission
by a party that such item represents a material exception or material fact,
event or circumstance or that such item has had or would have a Material Adverse
Effect with respect to the Company or Parent, respectively. Matters disclosed in
any particular section of a Disclosure Schedule shall be deemed to have been
disclosed in any other section with respect to which such matter is relevant so
long as the relevance of such disclosure is readily apparent.
(b) No representation of the Company contained in Article III (other than
Section 3.02, which shall be true in all meaningful respects, and Section
3.10(a)) or of Parent or Merger Sub contained in Article IV shall be deemed
untrue or incorrect for any purpose under this Agreement, and no party hereto
shall be deemed to have breached a representation or warranty for any purpose
under this Agreement, in any case as a consequence of the existence or absence
of any fact, circumstance or event unless such fact, circumstance or event,
individually or when taken together with all other facts, circumstances or
events inconsistent with any representations or warranties contained in Article
III, in the case of the Company, or Article IV, in the case of Parent or Merger
Sub, has had or would be reasonably likely to have a Material Adverse Effect
with respect to the Company or Parent, respectively. For all purposes of
determining whether any facts or events contravening a representation or
warranty contained herein constitute, individually or in the aggregate, a
Material Adverse Effect, representations and warranties contained in Article III
(other than Section 3.10(a)) or IV shall be read without regard to any reference
to materiality or to Material Adverse Effect set forth therein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in the Company Disclosure Schedule, the Company hereby
represents and warrants to each of Parent and Merger Sub as follows:
SECTION 3.01. Corporate Organization. (a) The Company and each of its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization. The Company is duly registered as a
bank holding company under the Bank Holding Company Act of 1956, as amended (the
"BHCA"). The Company and each of its Subsidiaries has the corporate or other
power and authority to own or lease all of its properties and assets and to
carry on its business as it is now being conducted, and is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary.
(b) All of the outstanding shares of capital stock or other securities
evidencing ownership of the Company's Subsidiaries are validly issued, fully
paid and (except as otherwise required by law) non-assessable and, except as set
forth in Section 3.01(b) of the Company Disclosure Schedule, such shares or
other securities are owned by the Company or its wholly owned Subsidiaries free
and clear of any lien, claim, charge, option, encumbrance, mortgage, pledge or
security interest (a "Lien") with respect thereto. The Company Disclosure
Schedule sets forth a list of all persons deemed to be a Subsidiary of the
Company or any of its Subsidiaries within the meaning of the BHCA together with
each such entity's jurisdiction of organization.
SECTION 3.02. Capitalization. The authorized capital stock of the Company
consists solely of (a) 400,000,000 shares of Company Common Stock, of which
68,635,656 shares (including 29,778 Restricted Shares) were outstanding as of
May 2, 2001; (b) 150,000,000 shares of Class A Common Stock, of which 56,074,874
are outstanding as of the date hereof; and (c) 50,000,000 shares of Company
Preferred Stock, none of which are outstanding as of the date hereof. As of May
2, 2001, 2,421,106 shares of Company
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Common Stock, no shares of Class A Common Stock and no shares of Company
Preferred Stock were held in the Company's treasury. As of May 2, 2001, no
shares of Company Common Stock or Class A Common Stock were reserved for
issuance, except for 8,605,476 shares of the Company Common Stock reserved for
issuance in connection with the Company Stock Option Plans and except for
56,074,874 shares of Company Common Stock reserved for issuance upon conversion
of Class A Common Stock. All of the issued and outstanding shares of Company
Common Stock and Class A Common Stock have been duly authorized and validly
issued and are fully paid, non-assessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof. As of May 2, 2001,
5,180,806 shares of Company Common Stock were subject to outstanding Options.
There are not any bonds, debentures, notes or other indebtedness of the Company
or any of its Subsidiaries having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on matters on which
holders of Company Common Stock may vote ("Voting Debt"). Except as set forth
above and except as provided in this Agreement, there are not any options,
warrants, rights, scrip, rights to subscribe to, calls, convertible or
exchangeable securities, "phantom" stock rights, stock appreciation rights,
stock-based performance units, commitments, Contracts, arrangements or
undertakings of any kind to which the Company or any of its Subsidiaries is a
party or by which any of them is bound (i) obligating the Company or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock of, or other equity interests in, or
any security convertible into or exercisable for or exchangeable into any
capital stock of, or other equity interest in, the Company or any of its
Subsidiaries or any Voting Debt, (ii) obligating the Company or any of its
Subsidiaries to issue, grant, extend or enter into any such option, warrant,
right, scrip, call, security, commitment, Contract, arrangement or undertaking
or (iii) that give any person the right to receive any economic benefit or right
similar to or derived from the economic benefits and rights accruing to holders
of capital stock of, or other equity interests in, the Company or any of its
Subsidiaries. Except as set forth in Section 3.02 of the Company Disclosure
Schedule, since May 2, 2001, the Company has not (i) issued any shares of its
capital stock or any securities convertible into or exercisable for any shares
of its capital stock, other than shares of Company Common Stock issued upon the
exercise, settlement or conversion of Options, outstanding as of such date or
(ii) taken any actions which would cause an antidilution adjustment under any
outstanding Options. Except as set forth in Section 3.02 of the Company
Disclosure Schedule, there are no outstanding contractual obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire,
or to register for sale, any shares of capital stock of, or other equity
interests in, the Company or any of its Subsidiaries. Except as set forth in
Section 3.02 of the Company Disclosure Schedule, there are no outstanding
contractual obligations of the Company or any of its Subsidiaries to vote or to
dispose of any shares of the capital stock of any of its Subsidiaries.
SECTION 3.03 Authority; No Violation. (a) The Company has full corporate
power and authority to execute and deliver this Agreement and, subject to the
adoption of this Agreement by the requisite vote of holders of Company Common
Shares and the filing and recordation of appropriate merger documents under
applicable law, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby have been duly and validly
approved by all necessary corporate action and no other corporate proceedings on
the part of the Company (other than the Company Stockholder Approval (as defined
below) and the filing and recordation of appropriate merger documents as
required by the DGCL and the DLLCA) are necessary to approve this Agreement and
to consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by the Company and (assuming due
authorization, execution and delivery by Parent and Merger Sub) constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms.
(b) Neither the execution and delivery of this Agreement by the Company,
nor the consummation by the Company of the Merger, nor compliance by the Company
with any of the terms or provisions hereof, will (i) violate any provision of
the Certificate of Incorporation, By-laws or other organizational documents of
the Company or any of its Subsidiaries or (ii) assuming that the consents and
approvals and waiting periods referred to in Section 3.04 are duly obtained or
satisfied, violate any statute (including Section 203 of the DGCL), code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to the Company or any of its Subsidiaries or any of their respective
properties or assets, or violate, conflict with,
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result in a breach of any provision of or the loss of any material benefit
under, constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, result in the termination of or a right
of termination or cancellation under, accelerate the performance required by, or
result in the creation of any Lien (or have any of such results or effects, upon
notice or lapse of time, or both) upon any of the respective properties or
assets of the Company or any of its Subsidiaries under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement, contract, permit, concession, franchise, or other
instrument, ("Contract") to which the Company or any of its Subsidiaries is a
party, or by which they or any of their respective properties, assets or
business activities may be bound or affected.
(c) The only vote of holders of any class or series of the Company's
capital stock necessary to adopt this Agreement and the Merger is the adoption
of this Agreement by the holders of a majority of the outstanding Company Common
Shares, voting together as a single class (the "Company Stockholder Approval").
SECTION 3.04. Consents and Approvals. Except for (a) the requisite filings
with, notices to and approval of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board") under the BHCA, (b) the filing of any
required applications or notices with the California State Banking Department
and Oregon, Washington, Idaho, Nevada, New Mexico and Hawaii banking
authorities, (c) the filing with the U.S. Securities and Exchange Commission
(the "SEC") of the Proxy Statement in definitive form, (d) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware
pursuant to the DGCL and the DLLCA, (e) any consents, authorizations, approvals,
filings or exemptions in connection with compliance with the applicable
provisions of supranational, federal, state and foreign laws (including, without
limitation, securities and insurance laws) relating to the regulation of
broker-dealers, futures commission merchants, commodities trading advisors,
commodities pool operators, investment advisers and insurance agencies and any
applicable domestic or foreign industry self-regulatory organization or stock
exchange ("SRO"), and the rules of the New York Stock Exchange (the "NYSE"), (f)
the Company Stockholder Approval, (g) the expiration of any applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act") or any consents, authorizations, approvals, filings or
exemptions required by any other applicable antitrust law or merger regulation,
(h) such additional consents and approvals set forth in Section 3.04 of the
Company Disclosure Schedule, and (i) consents, authorizations, approvals,
filings and registrations the failure of which to obtain or make would not be
reasonably likely to result, individually or in the aggregate, in a Material
Adverse Effect with respect to the Company, no consents, authorizations or
approvals of or filings or registrations with any supranational, federal, state,
local or foreign court, administrative agency or commission or other
governmental or regulatory authority or instrumentality (each a "Governmental
Entity") or of or with any other person by or on behalf of the Company, are
necessary in connection with the execution and delivery by the Company of this
Agreement, and the consummation by the Company of the transactions contemplated
hereby.
SECTION 3.05. Reports. (a) The Company and each of its Subsidiaries have
filed all material reports, registrations, statements and other documents,
together with any amendments required to be made with respect thereto, that they
were required to file since January 1, 1999 with (a) the SEC, (b) any SRO and
(c) any other federal, state, local or foreign governmental or regulatory agency
or authority (collectively with the SEC and the SROs, "Regulatory Agencies"),
and have paid all fees and assessments due and payable in connection therewith.
Except for normal examinations conducted by a Regulatory Agency in the regular
course of the business of the Company and its Subsidiaries, no Regulatory Agency
has initiated any proceeding or, to the Knowledge of the Company, investigation
into the business or operations of the Company or any of its Subsidiaries since
January 1, 1999.
(b) Presentation materials and reports prepared by or under the direction
of management of the Company and distributed or made available to the members of
the Board of Directors of the Company since January 1, 1999 and prior to the
date hereof were, taking into account the subject matter and purpose thereof,
complete and accurate in all material respects and, except to the extent
superseded by materials made available to the directors of the Company prior to
the date hereof, did not contain any untrue statement of a material fact or fail
to state any material fact required to be stated therein or necessary in order
to make the
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statements therein, in light of the circumstances in which they were made (and
other information generally available to the directors), not misleading.
SECTION 3.06. Financial Statements. The Company has previously made
available to Parent copies of (a) the consolidated balance sheets of the Company
and its Subsidiaries as of December 31, 1999 and December 31, 2000, (b) the
related consolidated statements of income, changes in stockholders' equity and
cash flows for the fiscal years 1998 through 2000, inclusive, as reported in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2000, filed with the SEC under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), in each case accompanied by the audit report of the
Company's independent public accountants, and (c) the unaudited consolidated
balance sheets of the Company at March 31, 2000 and March 31, 2001 and related
consolidated statements of income, changes in stockholders' equity and cash
flows for each of the three month periods then ended to be included in the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2001. The financial statements referred to in the preceding sentence (including
the related notes, where applicable) fairly present in all material respects the
consolidated financial position of the Company and its consolidated Subsidiaries
for the respective fiscal periods or as of the respective dates therein set
forth, and any financial statements filed by the Company with the SEC under the
Exchange Act after the date of this Agreement (including the related notes,
where applicable) will fairly present in all material respects (including the
related notes, where applicable) (subject, in the case of the unaudited
statements, to recurring audit adjustments normal in nature and amount) the
results of the consolidated operations and changes in stockholders' equity and
consolidated financial position of the Company and its Subsidiaries for the
respective fiscal periods or as of the respective dates therein set forth; each
of such statements (including the related notes, where applicable) comply (and,
in the case of the financial statements filed after the date of this Agreement,
will comply) in all material respects with applicable accounting requirements
and with the published rules and regulations of the SEC with respect thereto;
and each of such statements (including the related notes, where applicable) has
been prepared (and, in the case of the financial statements filed after the date
of this Agreement, will be prepared) in all material respects in accordance with
United States generally accepted accounting principles ("GAAP") consistently
applied during the periods involved, except, in each case, as indicated in such
statements or in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q promulgated by the SEC.
SECTION 3.07. Company Action. (a) The Special Committee (i) has been duly
authorized and constituted and (ii) at a meeting duly called and held has (A)
determined that this Agreement and the Merger are fair to, and in the best
interests of, the Company and the holders of Company Common Stock and (B)
recommended that this Agreement and the transactions contemplated hereby should
be approved and adopted by the Board of Directors of the Company and that the
Board of Directors of the Company recommend that the holders of Company Common
Stock adopt this Agreement.
(b) The Board of Directors of the Company (at a meeting duly called and
held) has by the requisite vote of directors under the DGCL, the Standstill
Agreement and the Company's Certificate of Incorporation and By-Laws (i)
approved and declared advisable this Agreement, the Merger and the other
transactions contemplated hereby, and (ii) subject to Sections 6.01(a) and 6.04
hereof, resolved to recommend that the holders of Company Common Stock adopt
this Agreement.
SECTION 3.08. Opinion of Financial Advisor. The Special Committee and the
Board of Directors of the Company have received the opinion, dated as of the
date hereof, of Goldman, Sachs & Co. (the "Special Committee Financial
Advisor"), to the effect that, as of the date thereof, and subject to the
matters set forth therein, the Merger Consideration is fair to the holders of
the Company Common Stock from a financial point of view.
SECTION 3.09. Broker's Fees. Neither the Company nor any of its
Subsidiaries nor any of their respective officers or directors has employed any
broker or finder or incurred any liability for any broker's fees, commissions or
finder's fees in connection with the Merger or the other transactions
contemplated hereby, except that the Company has retained the Special Committee
Financial Advisor, pursuant to compensation arrangements which have been
disclosed in writing to Parent prior to the date of this Agreement.
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SECTION 3.10. Absence of Certain Changes or Events. (a) Except as
disclosed in the Company Reports (as defined in Section 3.14) filed prior to the
date of this Agreement, since December 31, 2000, no event has occurred and no
fact or circumstance has come to exist or come to be known which, directly or
indirectly, individually or taken together with all other facts, circumstances
and events (described in any paragraph of this Article III or otherwise), has
had, or is reasonably likely to have, a Material Adverse Effect with respect to
the Company.
(b) As of the date of this Agreement, except as disclosed in the Company
Reports filed prior to the date hereof or as set forth in Section 3.10 of the
Company Disclosure Schedule, since December 31, 2000, the Company and its
Subsidiaries have carried on their respective businesses in the ordinary and
usual course consistent with their past practices (excluding the incurrence of
fees and expenses of professional advisors related to this Agreement and the
transactions contemplated hereby) and, except insofar as required by a change in
GAAP or applicable regulatory accounting, there has not been any material change
in accounting methods, principles or practices by the Company or any of its
Subsidiaries.
SECTION 3.11. Legal Proceedings. (a) Except as disclosed in Company
Reports filed prior to the date of this Agreement, neither the Company nor any
of its Subsidiaries is a party to any, and there are no pending or, to the
Knowledge of the Company, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory investigations of any
nature ("Claims and Proceedings") (i) against the Company or, to the Knowledge
of the Company, any of its Subsidiaries or (ii) as of May 6, 2001, for which, to
the Knowledge of the Company, the Company or any of its Subsidiaries has a
material obligation to indemnify any person.
(b) There is no injunction, order, judgment or decree imposed upon the
Company or, to the Knowledge of the Company, any of its Subsidiaries or the
assets of the Company or any of its Subsidiaries.
SECTION 3.12. Tax Matters. (a) The Company and each of its Subsidiaries
has duly filed all Tax returns and reports required to be filed by it, or
requests for extensions to file such returns or reports have been timely filed
and granted and have not expired, and such returns and reports are true, correct
and complete in all material respects. The Company and each of its Subsidiaries
have paid (or the Company has paid on their behalf) all Taxes that are shown as
due on such filed returns and have made provision in their financial statements
(in accordance with GAAP) for all Taxes for current periods for which the
Company or any of its Subsidiaries has not yet filed Tax returns.
(b) As used in this Agreement, the term "Taxes" includes all federal,
state, local and foreign income, franchise, property, sales, use, excise and
other taxes, including, without limitation, obligations for withholding Taxes
from payments due or made to any other person and any interest, penalties or
additions to tax.
SECTION 3.13. Employee Benefit Plans; ERISA. (a) Except as set forth in
Section 3.13(a) of the Company Disclosure Schedule, neither the Company nor any
of its Subsidiaries maintain or contribute to, or have any obligation to
contribute to, or have any liability, direct or indirect, contingent or
otherwise (including, without limitation, a liability arising out of an
indemnification, guarantee, hold harmless or similar agreement) with respect to,
any material employment, consulting, severance pay, termination pay, retirement,
deferred compensation, retention or change in control plan, program,
arrangement, agreement or commitment, or an executive compensation, incentive
bonus or other bonus, pension, stock option, restricted stock or equity-based,
profit sharing, savings, life, health, disability, accident, medical, insurance,
vacation, or other employee benefit plan, program, arrangement, agreement, fund
or commitment, including any "employee benefit plan" as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")
providing benefits to any current or former employee, consultant or director of
the Company or any of its Subsidiaries or any current or former employee,
consultant or director of any entity with respect to which the Company or its
Subsidiaries is a successor (including, without limitation, (i) any written
promise or commitment, whether legally binding or not, to create any new or
modify any existing Company Benefit Plan that would reasonably be expected to
materially increase the benefits provided to any employee or former employee,
consultant or director of the Company or any Subsidiary thereof, and (ii) any
obligation to provide health, life insurance, or death benefits with respect to
current or former employees, consultants or directors of the Company or any of
its Subsidiaries beyond their termination of employment or service)
(collectively the
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"Company Benefit Plans"). True and complete copies of each Company Benefit Plan,
including, but not limited to, any trust instruments and/or insurance contracts,
if any, forming a part thereof, all amendments thereto and the most recent
determination letters issued by the Internal Revenue Service, all government and
regulatory approvals received from any foreign Regulatory Agency, the most
recent summary plan descriptions (including any material modifications) and the
most recent audited financial reports for any funded Company Benefit Plan have
been supplied or made available to Parent, including by way of documents filed
with the SEC.
(b) Except as set forth in Section 3.13(b) of the Company Disclosure
Schedule, with respect to each Company Benefit Plan that is not a multiemployer
plan (within the meaning of Section 3(2) of ERISA): (i) if intended to qualify
under Section 401(a), 401(k) or 403(a) of the Code such plan has received a
favorable determination letter from the Internal Revenue Service, and the
Company is not aware of any circumstances likely to result in revocation of such
favorable determination or such qualification; (ii) it has been operated and
administered in all material respects in compliance with its terms and all
applicable laws and regulations (including but not limited to ERISA, the Code
and any relevant foreign laws and regulations); (iii) there are no material
pending or, to the Knowledge of the Company, threatened claims against, by or on
behalf of any Company Benefit Plans (other than routine claims for benefits);
and (iv) all contributions, premiums and expenses to or in respect of such
Company Benefit Plan have been timely paid in full or, to the extent not yet
due, have been accrued on the Company's consolidated financial statements except for any failures to make or accrue such contributions, premiums and
expenses that, individually or in the aggregate, would not reasonably be
expected to result in any material liability to the Company.
(c) With respect to each Company Benefit Plan, neither the Company nor any
of its Subsidiaries has incurred or reasonably expects to incur, either directly
or by reason of their affiliation with any "ERISA Affiliate" (defined as any
organization which is a member of a controlled group of organizations with the
Company within the meaning of Sections 414(b), (c), (m) or (o) of the Code), any
material liability under Title IV of ERISA, and neither the Company nor any of
its Subsidiaries has incurred or reasonably expects to incur, either directly or
by reason of their affiliation with any ERISA Affiliate, any material liability
under Sections 412 or 4971 of the Code.
(d) With respect to each "employee pension benefit plan" (within the
meaning of Section 3(2) of ERISA), no such plan is a "multiemployer plan"
(within the meaning of Section 3(37) of ERISA) or a "multiple employer plan"
(within the meaning of Section 413(c) of the Code).
(e) Except as set forth in Section 3.13(e) of the Company Disclosure
Schedule, the consummation of the transactions contemplated hereby, either alone
or in combination with another event (whether contingent or otherwise), will not
(i) entitle any current or former employee, consultant or director of the
Company or any Subsidiary or any group of such employees, consultants or
directors to any payment; (ii) increase the amount of compensation due to any
such employee, consultant or director; (iii) accelerate the vesting or funding
of any compensation, stock incentive or other benefit; or (iv) be reasonably
expected to result in the payment of any "parachute payment" under Section 280G
of the Code (whether or not such payment is considered to be reasonable
compensation for services rendered), except for any such parachute payments that
are not reasonably expected to result in any material liability to the Company
or in a loss of a material deduction in respect of such payments.
(f) Except as set forth in Section 3.13(f) of the Company Disclosure
Schedule, to the Knowledge of the Company, no Company Benefit Plan, or Company
or any Subsidiary, is under audit or is the subject of an audit or investigation
by the IRS, the U.S. Department of Labor, the Pension Benefit Guaranty
Corporation (the "PBGC") or any other federal or state governmental agency, nor
is any such audit or investigation pending or threatened.
(g) Except as set forth in Section 3.13(g) of the Company Disclosure
Schedule, neither the Company nor any Subsidiary maintains any plan, program or
arrangement or is a party to any contract that provides any benefits or provides
for payments to any person in, based on or measured by the value of, any equity
security of, or interest in, the Company or any Subsidiary.
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SECTION 3.14. SEC Reports. No final registration statement, prospectus,
report, schedule or definitive proxy statement filed since January 1, 1999 by
the Company or any of its Subsidiaries with the SEC pursuant to the Securities
Act of 1933, as amended (the "Securities Act"), or the Exchange Act (the
"Company Reports"), or communication mailed by the Company to its stockholders
since January 1, 1999, as of the date of filing or mailing, as the case may be,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading, except that information as of a later date (but filed before the
date hereof) shall be deemed to modify information as of an earlier date. As of
their respective dates, all Company Reports complied in all material respects
with the published rules and regulations of the SEC with respect thereto.
SECTION 3.15. Licenses; Compliance with Applicable Law. The Company and
each of its Subsidiaries hold all licenses, franchises, permits and
authorizations which are material to the lawful conduct of their respective
businesses under and pursuant to all, and have complied with and are not in
material default under any, applicable law, statute, order, rule, regulation,
policy and/or guideline of any Governmental Entity relating to the Company or
any of its Subsidiaries, and, except as disclosed in the Company Reports filed
prior to the date of this Agreement, neither the Company nor any of its
Subsidiaries has Knowledge of, or has received notice of, any violations of any
of the above.
SECTION 3.16. Certain Contracts. Except as set forth in Section 3.16 of
the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries
is a party to or bound by any Contract (a) as of the date hereof, with respect
to the employment, termination or compensation of any directors, executive
officers, key employees or material consultants (other than oral contracts of
employment at will which may be terminated without penalty and other than those
contracts which do not and, insofar as reasonably can be expected, in the future
will not, have a Material Adverse Effect with respect to the Company), (b) which
is a "material contract" (as such term is defined in Item 601(b)(10) of
Regulation S-K of the SEC) that has not been filed with or incorporated by
reference in the Company Reports or (c) which contains any material non-compete
or exclusivity provisions with respect to any business or geographic area in
which the Company or any of its affiliates conducts business or which restricts
the conduct of any business by the Company or any of its affiliates in any
geographic area or requires exclusive referrals of any business. The Company has
previously made available to Parent true and correct copies of all employment,
termination and compensation agreements (including deferred compensation) with
executive officers, key employees or material consultants which are in writing
and to which the Company or any of its Subsidiaries is a party. Each contract,
arrangement, commitment or understanding of the type described in this Section
3.16, whether or not set forth in Section 3.16 of the Company Disclosure
Schedule, is referred to herein as a "Company Contract", and neither the Company
nor any of its Subsidiaries has Knowledge of, or has received notice of, any
violation of any Company Contract by any of the other parties thereto.
SECTION 3.17. Agreements with Regulatory Agencies. Except as set forth in
Section 3.17 of the Company Disclosure Schedule, neither the Company nor any of
its Subsidiaries is subject to any cease-and-desist order issued by, or is a
party to any written agreement, consent agreement or memorandum of understanding
with, or is a party to any commitment letter or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any extraordinary
supervisory letter from or has adopted any board resolutions at the request of,
any Regulatory Agency or other Governmental Entity, that materially restricts
the conduct of its business or that in any manner relates to its capital
adequacy, its credit policies, its management or its business (each, whether or
not set forth in the Company Disclosure Schedule, a "Company Regulatory
Agreement"), nor has the Company or any of its Subsidiaries been advised since
January 1, 1999 by any Regulatory Agency or other Governmental Entity that it is
considering issuing or requesting any such Company Regulatory Agreement.
SECTION 3.18. Undisclosed Liabilities. Except for those liabilities that
are fully reflected or reserved against in the financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000 or
in2016 for filing with the unauditedSecurities and Exchange Commission. The Audit Committee also has approved, subject to stockholder ratification, the selection of the Company's independent registered public accounting firm for the fiscal year ending December 31, 2017.
Audit Committee Members
W. Allen Doane (Chair) Allen Uyeda Matthew Cox
The following table presents fees for professional audit services rendered by Deloitte & Touche LLP for the audit of the Company's annual consolidated financial statements referred to in clause (c) of Section 3.06,
liabilities identified in Section 3.18 ofat and for the Company Disclosure Schedule and
liabilities incurred in the ordinary course of business consistent with past
practice since December 31, 2000, neither the Company nor
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any of its Subsidiaries has incurred any liability of any nature required by
GAAP to be reflected in a balance sheet prepared in accordance with GAAP.
SECTION 3.19. Environmental Matters. Except as set forth in Section 3.19
of the Company Disclosure Schedule or in the Company Reports filed prior to the
date of this Agreement, there are no legal, administrative, arbitral or other
proceedings, claims, actions, causes of action, private environmental
investigations or remediation activities or governmental investigations of any
nature seeking to impose, or that are reasonably likely to result in the
imposition, on the Company or any of its Subsidiaries of any liability or
obligation arising under common law standards relating to environmental
protections, human health or safety, or under any local, state or federal
environmental statute, regulation or ordinance, including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (collectively, the "Environmental Laws"), pending or, to the
Knowledge of the Company, threatened, against the Company or any of its
Subsidiaries. To the Knowledge of the Company, there is no reasonable basis for
any such proceeding, claim, action or governmental investigation that would
impose any liability or obligation. To the Knowledge of the Company, during or
prior to the period of (i) its or any of its Subsidiaries' ownership or
operation of any of their respective properties, (ii) its or any of its
Subsidiaries' participation in the management of any property, or (iii) its or
any of its Subsidiaries' holding of a security interest or other interest in any
property, there were no releases or threatened release of hazardous, toxic,
radioactive or dangerous materials or other materials regulated under
Environmental Laws in, on, under or affecting any such property. Neither the
Company nor any of its Subsidiaries is subject to any agreement, order,
judgment, decree, letter or memorandum by or with any Governmental Entity or
third party imposing any material liability or obligation pursuant to or under
any Environmental Law.
SECTION 3.20. Transactions with Affiliates. Except as disclosed in the
Company Reports filed prior to the date hereof, during thefiscal year ended December 31, 2000 there were no transactions, agreements or arrangements between2016 and annual combined financial statements at and for the Company or any of its Subsidiaries, on the one hand, and the Company's
affiliates (other than Subsidiaries of the Company and Parent or persons that
are also Subsidiaries or affiliates of Parent) or other persons, on the other
hand, that would be required to be disclosed under Item 404 of Regulation S-K
under the Securities Act. Since January 1, 2001 through the date hereof, there
have been no such transactions, agreements or arrangements except in amounts and
of types consistent with those that occurred during 2000.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Except as disclosed in the Parent Disclosure Schedule, Parent represents
and warrantsfiscal year ended December 31, 2015 (which give effect to the Company that:
SECTION 4.01. Corporate Organization. Parent is a societe anonyme or
limited liability banking corporation duly organizedReorganization Transactions), and validly existing underfees billed for other services rendered by Deloitte & Touche LLP during those periods.
The following table sets forth the laws of the Republic of France. Merger Sub is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and all of the outstanding Merger Sub Units are owned
directly or indirectly by Parent. Merger Sub has been formed solely for the
purpose of engaging in the transactions contemplated hereby, will conduct its
operations only as contemplated hereby and will engage in no other business
activities other than activities conducted in furtherance of the transactions
contemplated hereby; provided, however, that Merger Sub may incur indebtedness
that does not contravene any other provision hereof, including Section 4.04.
Parent has the requisite power and authorityfees billed to own or lease all of its
properties and assets and to carry on its business as it is now being conducted,
and is duly licensed or qualified to do business (to the extent the concept of
"qualification to do business" exists) in each jurisdiction in which the nature
of the business conducted by it or the character or location of the properties
and assets owned or leased by it makes such licensing or qualification
necessary. Merger Sub has the limited liability company power and authority to
own or lease all of its properties and assets and to carry on its business as it
is now being conducted, and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
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character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary.
SECTION 4.02. Authority; No Violation. (a) Parent has full corporate power
and authority to execute and deliver this Agreement and to consummate the Merger
and the other transactions contemplated hereby. Merger Sub has full limited
liability company power and authority to enter into and deliver this Agreement
and to consummate the Merger and the other transactions contemplated hereby.
(b) The consummation of the Merger and the other transactions contemplated
hereby has been duly and validly approved by a duly authorized committee of the
Board of Directors of Parent, and by the holder of all of the outstanding Merger
Sub Units. No other corporate proceedings on the part of Parent and no vote of
Parent's stockholders are necessary to consummate the transactions contemplated
hereby.
(c) The execution and delivery of this Agreement by Parent and Merger Sub
has been duly and validly authorized in accordance with applicable law and duly
and validly approved by all necessary action and no other proceedings on the
part of Parent or Merger Sub are necessary to approve this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Parent and Merger Sub and (assuming due
authorization, execution and delivery by the Company) constitutes a valid and
binding obligation of Parent and Merger Sub, enforceable against Parent and
Merger Sub in accordance with its terms.
(d) Neither the execution and delivery of this Agreement by Parent or
Merger Sub, nor the consummation by Parent or Merger Sub of the Merger, nor
compliance by Parent or Merger Sub with any of the terms or provisions hereof,
will (i) violate any applicable law or the memorandum and articles of
association, certificate of incorporation, bylaws or other organizational
documents of Parent or Merger Sub, as applicable, or (ii) assuming that the
consents and approvals and waiting periods referred to in Section 4.03 are duly
obtained or satisfied, violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to Parent, Merger Sub or
any of their respective Subsidiaries or any of their respective properties or
assets, or violate, conflict with, result in a breach of any provision of or the
loss of any benefit under, constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, result in the
termination of or a right of termination or cancellation under, accelerate the
performance required by, or result in the creation of any Lien (or have any of
such results upon notice, or lapse of time or both) upon any of the respective
properties or assets of Parent, Merger Sub or any of their respective
Subsidiaries under, any of the terms, conditions or provisions of any Contract
to which Parent, Merger Sub or any of their respective Subsidiaries is a party,
or by which they or any of their respective properties or assets may be bound or
affected.
SECTION 4.03. Consents and Approvals. Except for (a) the requisite filings
with, notices to and approval of the Federal Reserve Board under the BHCA, (b)
the filing of any required applications or notices with the California State
Banking Department and Oregon, Washington, Idaho, Nevada, New Mexico and Hawaii
banking authorities, (c) the filing with the SEC of the Proxy Statement in
definitive form, (d) the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware pursuant to the DGCL and the DLLCA, (e) any
consents, authorizations, approvals, filings or exemptions in connection with
compliance with the applicable provisions of supranational, federal, state,
local and foreign laws (including, without limitation, securities and insurance
laws) relating to the regulation of broker-dealers, investment advisers and
insurance agencies and any applicable SRO, and the rules of the NYSE and the
ParisBourse(SBF) S.A., (f) the Company Stockholder Approval, (g) the expiration
of any applicable waiting period under the HSR Act or any consents,
authorizations, approvals, filings or exemptions required by any other
applicable antitrust law or merger regulation, (h) such additional consents and
approvals set forth in Section 4.03 of the Parent Disclosure Schedule, and (i)
consents, authorizations, approvals, filings and registrations the failure of
which to obtain or make would not be reasonably likely to result, individually
or in the aggregate, in a Material Adverse Effect with respect to Parent, no
consents, authorizations or approvals of or filings or registrations with any
Governmental Entity or, of or with any other person by or on behalf of Parent or
Merger Sub, are necessary in connection with the execution and delivery by
Parent and Merger Sub of this Agreement and the consummation by Parent and
Merger Sub of the Merger.
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SECTION 4.04. Financing. Parent has or has access to, and will make
available to Merger Sub on or prior to the Closing Date, all the funds necessary
to perform its obligations under this Agreement, including consummating the
transactions contemplated by this Agreement on the terms contemplated hereby and
paying of all of its fees and expenses relating to such transactions.
SECTION 4.05. Litigation; Regulatory Action. (a) No litigation, claim or
other proceeding before any court or governmental agency is pending against
Parent or, to its Knowledge, any of its Subsidiaries and, to its Knowledge, no
such litigation, claim or other proceeding has been threatened, in each case
that would or would reasonably be expected to have a Material Adverse Effect on
Parent.
(b) Neither Parent nor, to its Knowledge, any of its Subsidiaries or
properties, is a party to or is subject to any order, decree, agreement,
memorandum of understanding or similar arrangement with, or a commitment letter
of similar submission to, or extraordinary supervisory letter from or has
adopted any board resolutions at the request of, any Regulatory Agency or other
Governmental Entity (each a "Parent Regulatory Agreement").
(c) Neither Parent nor, to its Knowledge, any of its Subsidiaries, has been
advised by any Regulatory Agency that such Regulatory Agency or any other
Governmental Agency is contemplating issuing or requesting (or is considering
the appropriateness of issuing or requesting) any such Parent Regulatory
Agreement.
SECTION 4.06. Absence of Certain Changes. Except as disclosed in writing
to the Company prior to the date hereof, since December 31, 2000, (i) Parent and
its Subsidiaries have carried on their respective businesses in the ordinary and
usual course consistent with past practice and (ii) no event has occurred and no
fact or circumstance has come to exist or come to be known which, directly or
indirectly, individually or taken together with all other facts, circumstances
and events (described in any paragraph of this Article IV or otherwise), has
had, or is reasonably expected to have a Material Adverse Effect with respect to
Parent.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business Prior to the Effective Time. During the
period from and including the date of this Agreement to the Effective Time,
except as expressly contemplated or permitted by this Agreement, the Company
shall, and shall cause its Subsidiaries to, (a) conduct their business only in
the usual, regular and ordinary course consistent with past practice, (b) use
commercially reasonable best efforts to maintain and preserve intact their
business organization, employees and advantageous business relationships and
retain the services of their key officers and key employees, (c) take no
intentional action which would adversely affect or delay in any material respect
the ability of Parent, Merger Sub or the Company to obtain any Requisite
Regulatory Approvals and (d) use commercially reasonable best efforts to obtain
any third party approvals that are necessary or appropriate for the Surviving
Corporation to conduct the business of the Company and its Subsidiaries as
currently conducted following the Effective Time.
SECTION 5.02. Forbearances of the Company. During the period from the date
of this Agreement to the Effective Time, except as set forth in Section 5.02 of
the Company Disclosure Schedule or except as expressly contemplated or permitted
by this Agreement, the Company shall not, and shall cause its Subsidiaries not
to, without the prior written consent of Parent (which, except in the case of
clause (b), shall not be unreasonably withheld or delayed):
(a) other than in the ordinary course of business consistent with past
practice, incur (i) any long-term indebtedness for borrowed money or
assume, guarantee, endorse or otherwise as an accommodation become
responsible for the long-term indebtedness of any other person (other than
deposits and similar liabilities, indebtedness of the Company's
Subsidiaries to the Company or any of its wholly owned Subsidiaries and
indebtedness under existing lines of credit and renewals or extensions
thereof), or (ii) any capital expenditures, obligations or liabilities;
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(b)(i) adjust, split, combine or reclassify any capital stock; (ii)
make, declare or pay any dividend (except (A) regular annual or quarterly
cash dividends (with record and payment dates consistent with past
practice) at a rate not in excess of $0.19 per Company Common Share per
quarter; (B) if the Effective Time is scheduled to occur on a date other
than a date the Board of Directors of the Company would normally establish
as a record date for a regular quarterly cash dividend, a dividend (1) with
a record date immediately prior to the Effective Time and (2) at a rate per
Company Common Share not in excess of the product (rounded to the nearest
$0.0001) of (x) the number of days that have or are scheduled to elapse
from (but excluding) the record date for the last regular quarterly
dividend paid by the Company to (but excluding) the date on which the
Effective Time occurs and (y) $0.00208219 (a "Pro Rata Dividend");
provided, that the Company shall consult with Parent to determine the
appropriate number of days to take into account in calculating any Pro Rata
Dividend; and (C) dividends paid in the ordinary course of business by any
wholly owned Subsidiary of the Company) or make any other distribution on,
or directly or indirectly redeem, purchase or otherwise acquire, any shares
of its capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock; (iii) grant any
additional Options or Restricted Shares or grant any person any right to
acquire any shares of its capital stock or any right the value of which is
based on the value of shares of its capital stock, (iv) issue any
additional shares of capital stock, other than with respect to the
exercise, conversion or settlement of Options or Restricted Shares granted
prior to the date hereof pursuant to the Company Stock Plans and issuances
by a wholly owned Subsidiary of the Company of its capital stock to the
Company; or (v) enter into any agreement, understanding or arrangement with
respect to the voting of its capital stock;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of
its material properties or assets, including, without limitation, capital
stock in any Significant Subsidiaries of the Company, to any person other
than a direct or indirect wholly owned Subsidiary, or cancel or release any
material indebtedness to any such person or any claims held by any such
person, except (i) internal reorganizations, liquidations or consolidations
involving existing Subsidiaries of the Company, (ii) subject to Section
6.02(c), as may be required by law to consummate the transactions
contemplated hereby, (iii) other activities in the ordinary course of
business consistent with past practice or (iv) pursuant to contracts or
agreements in force at the date of this Agreement;
(d) except for transactions in the ordinary course of business
consistent with past practice, make any material investment either by
purchase of stock or securities, contributions to capital, property
transfers, or purchase of any property or assets of any other individual,
corporation, limited partnership or other entity other than a wholly owned
Subsidiary; provided, however, that the foregoing shall not prohibit (A)
internal reorganizations, liquidations or consolidations involving existing
Subsidiaries or (B) foreclosures and other debt-previously-contracted
acquisitions in the ordinary course of business;
(e) except for transactions in the ordinary course of business
consistent with past practice, enter into or terminate any material lease,
contract or agreement, or make any material change in any of its material
leases, contracts or agreements, other than renewals of leases, contracts
or agreements without material changes of terms;
(f) other than in the ordinary course of business consistent with past
practice or as required by law or contracts in effect as of the date hereof
set forth in Section 3.13 or Section 5.02 of the Company Disclosure
Schedule, increase in any manner the wages, salaries, compensation, pension
or other fringe benefits or perquisites of any current or former employees,
consultants or directors of the Company or any of its Subsidiaries, or
vest, fund or pay any pension or retirement allowance other than as
required by any existing Company Benefit Plans disclosed in the Company
Disclosure Schedule to any such current or former employees, consultants or
directors or become a party to, amend or commit itself to any pension,
retirement, profit-sharing or welfare benefit plan or agreement or
employment, severance, consulting, retention, change in control,
termination, deferred compensation or incentive pay agreement with or for
the benefit of any current or former employee, consultant or director or,
except as expressly contemplated by this Agreement, accelerate the vesting,
funding or payment of any compensation payment or benefit
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(except pursuant to the mandatory terms of existing plans or agreements
disclosed on the Company Disclosure Schedule);
(g) settle any material claim, action or proceeding involving money
damages or waive or release any material rights or claims, except in the
ordinary course of business consistent with past practice;
(h) change its methods of accounting in effect at December 31, 2000,
except as required by changes in GAAP, or change any of its methods of
reporting material items of income and deductions for Tax purposes from
those employed in the preparation of the Tax returns of the Company for the taxablefiscal years endingended December 31, 20002016 and 1999, except as required2015 by changesDeloitte & Touche LLP.
| | 2016 | 2015 | |||||
|---|---|---|---|---|---|---|---|
Audit Fees | $ | 2,342,000 | $ | 2,924,000 | |||
Audit Related Fees(1) | 79,000 | 15,000 | |||||
Tax Fees | — | — | |||||
All Other Fees | — | — | |||||
| | | | | | | | |
Total | $ | 2,421,000 | $ | 2,939,000 | |||
- (1)
- Includes fees for professional services rendered for the completion of agreed upon procedures related to consolidated financial reporting in
law or regulation or as set forth2016 and the termination of the Grand Cayman branch operations in 2015.
The Audit Committee Charter requires the Company Disclosure
Schedule;
(i) adopt or implement any amendmentpre-approval of all fees and services to its articles or certificatebe provided by the Company's independent auditors. These services may include audit services, audit-related services, tax services and other services. The Audit Committee has sole authority, without action by the Board, for the review and approval of incorporation, articlessuch services and fees. Since the Audit Committee had not been formed prior to the retention of association, bylaws (or similar documents) or
any plan of consolidation, merger or reorganization other thanour independent auditors to perform the audit and audit-related services referenced above for fiscal year 2015, these fees and services were ultimately approved by BNPP, our then sole shareholder. Since the IPO, all such fees and services were pre-approved by the Audit Committee in accordance with the provisionsthese procedures.
PROPOSAL NO. 2—RATIFICATION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP, independent registered public accounting firm, served as the case may be, and any of
their respective Subsidiaries, which appear in any filing made with, or written
materials submitted to, any third party or any Governmental Entity in connection
with the transactions contemplated hereby. In exercising the foregoing right,
each of the parties hereto shall act reasonably and as promptly as practicable.
The parties hereto agree that they will consult with each other with respect to
the obtaining of all permits, consents, approvals and authorizations of all
third parties and Governmental Entities necessary or advisable to consummate the
transactions contemplated hereby and each party will keep the other apprised of
the status of matters relating to completion of the transactions contemplated
hereby. For purposes of this Agreement, "Burdensome Condition" means any
conditions, restrictions or requirements which the Board of Directors of Parent
reasonably determines would, individually or in the aggregate, (a) reduce the
benefits of the Merger to such a degree that Parent would not have entered into
this Agreement had such conditions, restrictions or requirements been known at
the date hereof or (b) have, or would reasonably be expected to have, a material
and adverse effect on the Surviving Corporation following the Effective Time.
(d) Parent, Merger Sub and the Company shall, upon request, furnish each
other with all information concerning themselves, their Subsidiaries, directors,
officers and stockholders and such other matters as may be reasonably necessary
or advisable in connection with any statement, filing, notice or application
made by or on behalf of Parent, Merger Sub, the Company or any of their
respective Subsidiaries to any Governmental Entity in connection with the Merger
and the other transactions contemplated hereby.
SECTION 6.03. Access to Information; Confidentiality. (a) From the date
hereof to the Effective Time, the Company shall (and shall cause each of its
Subsidiaries to) provide to Parent and Merger Sub (and their respective
officers, directors, employees, accountants, consultants, legal counsel, agents
and other representatives, collectively, "Representatives") (i) reasonable
access, during normal business hours and in a manner so as to not unduly
interfere with the Company's business, to all properties, offices and other
facilities, information, books, records and documents which Parent or Merger Sub
may reasonably request regarding the business, properties, contracts, assets,
liabilities, employees and other aspects of the Company or its Subsidiaries and
(ii) reasonable access at reasonable times upon prior notice to the officers,
employees and agents of the Company and its Subsidiaries.
(b) Notwithstanding any other provision in this Agreement, the Company and
its Subsidiaries shall not be required to provide access to or disclose
information where such access or disclosure would violate or prejudice the
rights of its customers, jeopardize the attorney-client privilege of the entity
in control or possession of such information or contravene any law, rule,
regulation, order, judgment or decree, or any binding agreement entered into
prior to the date of this Agreement. In any such event the parties will make
appropriate substitute disclosure arrangements to the extent possible in the
circumstances.
(c) No investigation by any party, whether prior to the execution of this
Agreement or pursuant to this Section 6.03, shall affect any representation or
warranty in this Agreement of any party hereto or any condition to the
obligations of the parties hereto.
(d) For a period of two years from the date hereof, Parent shall, and shall
cause its Subsidiaries and its and their respective Representatives, to keep
confidential any and all Confidential Information furnished by or on behalf of
the Company or any of its Subsidiaries pursuant to this Agreement. "Confidential
Information" means any information furnished pursuant to this Agreement,
regardless of the form in which such information is communicated or maintained,
and all notes, reports, analyses, compilations, studies, files or other
documents or material, whether prepared by the Company, Parent, Merger Sub or
others, which are based on, contain or otherwise reflect such information;
provided, that "Confidential Information" does not include information that (i)
is or becomes available to theindependent registered public other than as a result of a disclosure in
breach of this Section 6.03, (ii) was available, or has become available, to
Parent, Merger Sub or any of their respective Representatives, on a
non-confidential basis from a source other than the Company or its
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Representatives; provided, that such source was not, to the Knowledge of Parent
or Merger Sub or such Representatives, prohibited from disclosing such
information by a legal, contractual or fiduciary obligation owed to the Company,
or (iii) Parent or Merger Sub or any of their respective Representatives
independently developed without reference to Confidential Information.
(e) Notwithstanding anything in this Agreement to the contrary, in the
event that any party to this Agreement is legally required pursuant to
applicable law or regulation or regulatory, legal or judicial process (including
interrogatories, requestsaccounting firm for information or documents, subpoena, civil
investigative demand or similar process), to disclose Confidential Information,
such party will provide the other parties with prompt notice of such event so
that the other parties may seek a protective order or other appropriate remedy
or waive compliance with Section 6.03(d). In the event any party determines to
seek such protective order or other remedy, the other parties will cooperate
with such party in seeking such protective order or other remedy. In the event
that such protective order or other remedy is not obtained and disclosure of
Confidential Information is required, or a party grants a waiver hereunder,
Parent or Merger Sub, or any of their respective Representatives, as the case
may be, (i) may, without liability hereunder furnish that portion (and only that
portion) of the Confidential Information which it is legally required to
disclose and (ii) will exercise its commercially reasonable best efforts to have
confidential treatment accorded any Confidential Information so furnished.
SECTION 6.04. Other Offers. The Company and its Subsidiaries will not,
directly or indirectly, and will use their reasonable best efforts to cause
their Representatives not to (a) take any action to solicit, initiate or
knowingly encourage any Acquisition Proposal (as defined below) or (b) engage in
negotiations with, or disclose any nonpublic information relating to the Company
or any of its Subsidiaries or afford access to the properties, books or records
of the Company or any of its Subsidiaries to, any person that may, to the
Company's Knowledge, be considering making, or has made, an Acquisition
Proposal; provided that the Company may, in response to an unsolicited bona fide
written proposal from a third party regarding an Acquisition Proposal, engage in
the activities specified in clause (b) of this Section 6.04, if (i) following
consultation with outside counsel, the Board of Directors of the Company (acting
upon the recommendation of the Special Committee) determines in good faith that
failure to do so would be reasonably likely to constitute or result in a breach
of its fiduciary duties under applicable law, (ii) following consultation with
the Special Committee Financial Advisor, the Board of Directors of the Company
(acting upon the recommendation of the Special Committee) determines in good
faith that such Acquisition Proposal constitutes or has a reasonable likelihood
of resulting in a Superior Proposal, and (iii) the Company has received from
such third party an executed confidentiality agreement with terms not materially
less favorable to the Company than those contained in Section 6.03. The Company
will as promptly as practicable (and in no event later than one business day
after the relevant event) notify Parent in writing (which notice shall identify
the person making the Acquisition Proposal or request for information and set
forth the material terms thereof) after having received any Acquisition
Proposal, or request for nonpublic information relating to the Company or any of
its Subsidiaries or for access to the properties, books or records of the
Company or any of its Subsidiaries by any person who is, to the Company's
Knowledge, considering making or has made an Acquisition Proposal. The Company
will keep Parent currently informed of the status and material developments and
terms of any such Acquisition Proposal or request and any related material
discussions or negotiations. The Company and its Subsidiaries shall, and shall
use their reasonable best efforts to cause their respective Representatives to,
cease immediately and cause to be terminated all activities, discussions or
negotiations, if any, with any persons conducted heretofore with respect to any
Acquisition Proposal. Nothing in this Section 6.04 shall prohibit the Company,
its Board of Directors or the Special Committee from taking and disclosing to
the stockholders of the Company a position with respect to an Acquisition
Proposal by a third party to the extent required under the Exchange Act or from
making such disclosure to the stockholders of the Company which, after
consultation with outside counsel of the Company, the Special Committee (or the
Board of Directors of the Company acting upon the recommendation of the Special
Committee) determines is required under applicable law; provided that nothing in
this sentence shall affect the obligations of the Company, its Board of
Directors or the Special Committee under any other provision of this Agreement.
For purposes of this Agreement, "Acquisition Proposal" means any offer or
proposal (other than an offer or proposal by or on behalf of Parent or its
affiliates) for, or any indication of interest in (w) a merger or consolidation,
or any
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similar transaction, involving the Company or any Significant Subsidiary of the
Company, (x) a purchase, lease or other acquisition or assumption of all or
substantially all of the assets of the Company or all or substantially all of
the assets or deposits of any Significant Subsidiary of the Company, (y) a
purchase or other acquisition (including by way of merger, consolidation, share
exchange, tender offer or otherwise) of beneficial ownership (the term
"beneficial ownership" for purposes of this Agreement having the meaning
assigned thereto in Section 13(d) of the Exchange Act, and the rules and
regulations thereunder) of securities representing 25% or more of the voting
power of the Company or 25% or more of the voting power of any Significant
Subsidiary of the Company, or (z) any substantially similar transaction.
SECTION 6.05. Indemnification and Insurance. (a) The Surviving Corporation
shall, for six years from and after the Effective Time, maintain in effect the
indemnification, expense advancement and exculpation obligations set forth in
the Company's or any Subsidiary's Certificate of Incorporation and the Company's
By-Laws, as amended, or other organizational documents, in each case as of the
date of this Agreement as continuing obligations of the Surviving Corporation
and such provisions shall not be amended, repealed or otherwise modified during
such period in any manner that would adversely affect the rights thereunder of
the individuals who on or at any time prior to the Effective Time were entitled
to rights thereunder with respect to matters occurring prior to the Effective
Time. In addition, Merger Sub and the Company agree that the indemnification and
advancement obligations of the Company or any Subsidiary as set forth in
indemnification agreements to which it is a party shall be continuing
obligations of the Surviving Corporation or such Subsidiary, as applicable, and
shall not be amended, repealed or otherwise modified after the Effective Time,
except as permitted by the terms and provisions of those agreements.
(b) The Surviving Corporation and the Company shall maintain in effect, for
six years from and after the Effective Time, directors' and officers' liability
insurance policies covering the persons who are currently covered in their
capacities as directors and officers (the "Covered Parties") by the Company's
current directors' and officers' policies and on terms not materially less
favorable than the existing insurance coverage with respect to matters occurring
at or prior to the Effective Time; provided, however, in the event the annual
premium for such coverage exceeds an amount equal to 225% of the last annual
premium paid immediately prior to the date hereof by the Company for such
coverage, the Surviving Corporation shall obtain as much comparable insurance as
possible for an annual premium equal to 225% of the last annual premium paid
immediately prior to the date hereof by the Company. The provisions of the
immediately preceding sentence shall be deemed to have been satisfied if prepaid
policies have been obtained by the Company prior to the Closing for purposes of
this Section 6.05, which policies provide such directors and officers with
coverage for an aggregate period of six years with respect to claims arising
from facts or events that occurred on or before the Effective Time, including,
without limitation, in respect of the transactions contemplated by this
Agreement; provided, that the Company shall not purchase any such policies if
the cost thereof would exceed the amount specified in the preceding sentence and
shall consult with Parent prior to purchasing any such policy in order to
determine the most cost-effective and efficient means of obtaining such
coverage. If such prepaid policies have been obtained by the Company prior to
the Closing, Parent shall and shall cause the Surviving Corporation to maintain
such policies in full force and effect, and continue to honor the Company's
obligations thereunder. If the Surviving Corporation or any of its successors
and assigns (i) consolidates with or merges with or into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially all of
its properties and assets to any person, then, and in each such case, to the
extent necessary, proper provision shall be made so that the successors and
assigns of the Surviving Corporation assume the obligations set forth in this
Section 6.05.
(c) In addition to, and not in lieu of the foregoing, Merger Sub agrees
that Surviving Corporation shall indemnify, defend (with mutually acceptable
counsel) and hold harmless all current and former officers and directors of the
Company and its Subsidiaries (the "Indemnified Parties") to the fullest extent
permitted by the DGCL, as amended from time to time, from and against all
liabilities (including amounts paid in settlement; provided the Surviving
Corporation has approved such settlement), costs, expenses and claims (including
without limitation reasonable legal fees and disbursements, which shall be paid,
reimbursed or advanced by the Surviving Corporation in advance of the final
disposition thereof arising out of actions taken prior to the Effective Time in
performance of their duties as directors or officers of the Company or any
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Subsidiary; provided, however, that the Surviving Corporation's obligations to
the Indemnified Parties under this Section 6.05(c) shall not be effective until
consummation of the Merger.
(d) In the event that any action, suit, proceeding or investigation
relating thereto or to the transactions contemplated by this Agreement is
commenced, whether before or after the Effective Time, the parties hereto agree
to cooperate and use their respective reasonable efforts to vigorously defend
against and respond thereto.
(e) Following the Effective Time Parent shall cause Merger Sub and the
Surviving Corporation to perform their obligations under this Section 6.05.
SECTION 6.06. Notification of Certain Matters. From and after the date of
this Agreement until the Effective Time, each party hereto shall promptly notify
the other parties hereto of:
(a) any change or event, or series of changes or events, having, or
which could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on it or would be reasonably likely to
cause any of the conditions in Article VII not to be satisfied or to cause
the satisfaction thereof to be materially delayed;
(b) the receipt of any material notice or other material communication
from any person alleging that the consent of such person is or may be
required in connection with the transactions contemplated hereby;
(c) the receipt of any material notice or other material communication
from any Governmental Entity in connection with the transactions
contemplated hereby; and
(d) any actions, suits, claims, investigations or proceedings
commenced or, to the Knowledge of the party, threatened against Parent,
Merger Sub or the Company which seeks to prohibit or prevent consummation
of the transactions contemplated hereby;
in each case, to the extent such event or circumstance is or becomes known to
the party required to give such notice; provided, however, that the delivery of
any notice pursuant to this Section 6.06 shall not be deemed to be an amendment
of this Agreement or any Section in the Company Disclosure Schedule or the
Parent Disclosure Schedule, as the case may be, and shall not cure any breach of
any representation or warranty requiring disclosure of such matter prior to the
date of this Agreement.
SECTION 6.07. Public Announcements. Parent, Merger Sub and the Company
shall use their reasonable best efforts to consult with each other before
issuing any press release or otherwise making any public statements with respect
to this Agreement or any of the transactions contemplated hereby. Prior to the
Closing, Parent, Merger Sub and the Company shall not issue any such press
release or make any such public statement without the prior consent of the other
parties (which consent shall not be unreasonably withheld or delayed), except as
may be required by law or regulation or any listing agreement with the NYSE or
any national or non-U.S. securities exchange to which Parent or the Company is a
party and, in such case, shall use their reasonable best efforts to consult with
all the parties hereto prior to such release or statement being issued. The
parties shall agree on the text of a joint press release by which Parent, Merger
Sub and the Company will announce the execution of this Agreement.
SECTION 6.08. Exchange Act and NYSE Filings. Unless an exemption shall be
expressly applicable, or unless Parent, Merger Sub or the Company, as the case
may be, agrees otherwise in writing, Parent, Merger Sub and the Company and
their respective affiliates will timely file with the SEC and the NYSE all
reports required to be filed pursuant to the rules and regulations of the SEC
and NYSE (including, without limitation, all required financial statements).
Such reports and other information shall comply in all material respects with
all of the requirements of the SEC and NYSE rules and regulations, and when
filed, will not include an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
SECTION 6.09. Reasonable Best Efforts. Subject to the terms and conditions
hereof, each of the Parent, Merger Sub and the Company will use their reasonable
best efforts to take all action necessary and to
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do all things necessary, proper or desirable, or advisable under applicable
laws, so as to permit the consummation of the Merger as promptly as practicable
and otherwise to enable the consummation of the transactions contemplated
hereby.
SECTION 6.10. Performance by Merger Sub. Parent shall cause Merger Sub to
perform its obligations hereunder.
SECTION 6.11. Takeover Statutes. The Company will take all steps necessary
to exempt (or continue the exemption of) the Merger, this Agreement and the
transactions contemplated hereby from, or if necessary challenge the validity or
applicability of, any applicable "moratorium", "control share", "fair price" or
other anti-takeover laws and regulations of any state or, upon the reasonable
request of Parent, any non-U.S. jurisdiction, as now or hereafter in effect.
SECTION 6.12. Standstill Agreement. Notwithstanding Section 2.2 of the
Standstill Agreement, Parent or any of its Subsidiaries may take any and all
action necessary or, in the reasonable judgment of Parent (subject to the prior
approval of the Company, which shall not be unreasonably withheld or delayed),
desirable in order to fulfill any and all express obligations and rights under
this Agreement, including, without limitation, pursuant to Section 6.01(b) and
Section 8.01(h) hereof and to make public announcements or solicit proxies in
response to any Acquisition Proposal made to the Company. The Standstill
Agreement shall terminate automatically at the Effective Time. Except as
provided in this Section 6.12, nothing in this Agreement shall be deemed to be a
waiver, modification or amendment of the Standstill Agreement or any provision
of the Company's Certificate of Incorporation or By-Laws.
SECTION 6.13. Employee Benefits. (a) From and after the Effective Time,
Parent shall, or shall cause the Surviving Corporation to, recognize prior
actual and credited service recognized under the plans of the Company or any of
its Subsidiaries of each employee of the Company or any of its Subsidiaries as
of the Effective Time (the "Company Employees") as service under the employee
benefit plans of Parent or its Subsidiaries for all purposes (other than for
purposes of benefit accruals) in which such Company Employee is eligible to
participate following the Effective Time, it being intended that such credits of
service shall not result in duplication of benefits under such plans.
(b) Parent shall maintain, or shall cause the Surviving Corporation to
maintain, employee benefit plans, programs, policies and arrangements for
Company Employees which provide benefits that are no less favorable in the
aggregate to those provided under the applicable employee benefit plans (as
defined in Section 3(3) of ERISA (excluding plans exempt under Section 201(2) of
ERISA)) of the Company and its Subsidiaries generally available to Company
Employees in effect immediately prior to the Effective Time until the earlier of
(i) two years after the Effective Time and (ii) the time that Parent or its
Subsidiaries makes available to such Company Employees employee benefit plans,
programs, policies and arrangements that are no less favorable in the aggregate
than are provided to similarly situated employees of Parent or its Subsidiaries
in the applicable jurisdiction. Any such plans, programs, policies and
arrangements, and any awards thereunder to the extent not paid in connection
with the Merger, that currently provide for benefits based on performance
targets, including without limitation the Long-Term Incentive Plan and the
Incentive Plan for Key Executives, shall be amended by Parent in consultation
with the Chairman and Chief Executive Officer of the Company as soon as
practicable following the Effective Time to reflect new and reasonable
performance targets. Notwithstanding the provisions of this Section 6.13(b),
neither Parent nor the Surviving Corporation shall be required to maintain any
such employee benefit plan, program, policy or arrangement if adjustment to such
plan, program, policy or arrangement would be necessary or desirable under the
Code or any similar law.
(c) From and after the Effective Time, Parent shall, or shall cause the
Surviving Corporation to, (i) give credit for all current year deductibles,
co-payments and annual out-of-pocket limits paid or incurred by any Company
Employee in respect of claims incurred by such Company Employee during the
portion of the current calendar year prior to the Effective Time, and (ii) waive
any pre-existing conditions provisions under any group health plans of Parent or
its Subsidiaries covering the Company Employees and their eligible dependents to
the same extent that such provisions were waived with respect to such Company
Employees and their eligible dependents pursuant to the terms of the group
health plans of the Company immediately prior to
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the Effective Time (the "Company Group Health Plans") and to the extent that
such Company Employees and their eligible dependents were covered under the
Company Group Health Plans.
(d) Parent intends to provide, after the Closing, (i) an opportunity for
senior executives of the Surviving Corporation to participate in a Parent stock
option program as may be in effect at such time, at the same level as similarly
situated employees of Parent participate and (ii) an opportunity for other
salaried employees (not including such senior executives) of the Surviving
Corporation to participate in a Parent discounted stock purchase program as may
be in effect at such time (together with such stock option program, "Parent
Equity Programs"); provided that, in each case, any awards granted under the
Parent Equity Programs will be subject to a determination by Parent that such
awards will not subject Parent or any of its Subsidiaries to additional or
different SEC reporting requirements than the requirements to which Parent or
any of its Subsidiaries are currently subject, including, without limitation, a
requirement that Parent reconcile its financial statements in accordance with
GAAP. Awards granted under the Parent Equity Programs will be determined by
Parent in consultation with the Chief Executive Officer of the Surviving
Corporation.
(e) As of the Effective Time, Parent shall cause the Surviving Corporation
to expressly assume the BancWest Corporation Deferred Compensation Plan (in
accordance with Section 4.4 of such plan), the BancWest Corporation Excess
Benefit Plan (in accordance with Section 6.4 of such plan), the Supplemental
Cooke Trust Plan (in accordance with Section 5.4 of such plan) and the BancWest
Supplemental Executive Retirement Plan (in accordance with Section 4.3 of such
plan) and all obligations and liabilities thereunder, in accordance with the
terms of such plans.
(f) At the Effective Time, the maximum target value attainable under all
outstanding Awards (as defined in the BancWest Corporation Long Term Incentive
Plan (the "Long Term Incentive Plan")) outstanding less than six months shall be
deemed to have been fully earned, and all such Awards shall be paid as soon as
practicable after the Effective Time to the holders of such Awards (reduced by
all applicable withholding taxes and other similar charges). All other
outstanding Awards shall be paid in accordance with the Long Term Incentive Plan
as soon as practicable after the Effective Time.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01. Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. This Agreement shall have been adopted by
the affirmative vote of (i) holders of a majority of the outstanding
Company Common Shares, in accordance with the DGCL and the Company's
Certificate of Incorporation and (ii) holders of Company Common Shares
constituting no less than two-thirds of the Company Common Shares
outstanding and entitled to vote at the Company Meeting.
(b) Other Approvals. All regulatory approvals and non-objections
required to consummate the Merger shall have been obtained, and all
statutory waiting periods shall have expired (including, if applicable, the
expiration or termination of any waiting period under the HSR Act or any
other applicable antitrust laws or merger regulations), other than
regulatory approvals or non-objections, or the expiration of waiting
periods the failure to be obtained or to expire which would not reasonably
be expected to have a material adverse effect on the consummation of the
Merger or on the Surviving Corporation following the Effective Time (such
approvals, non-objections and the expiration of all such waiting periods
being referred to herein as the "Requisite Regulatory Approvals"), and all
such Requisite Regulatory Approvals shall be in full force and effect.
(c) No Injunctions or Restraints; Illegality. No order, injunction or
decree issued by any court or agency of competent jurisdiction or other
legal restraint or prohibition (an "Injunction") preventing the
consummation of the Merger shall be in effect. No statute, rule,
regulation, order, injunction or decree
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shall have been enacted, entered, promulgated or enforced by any
Governmental Entity which prohibits or makes illegal the consummation of
the Merger or would constitute a Burdensome Condition.
SECTION 7.02. Conditions to Obligations of Parent and Merger Sub. The
obligation of each of Parent and Merger Sub to consummate the Merger is also
subject to the satisfaction or waiver by Parent at or prior to the Effective
Time of the following conditions:
(a) Representations and Warranties. Subject to the standard set forth
in Section 2.06(b), the representations and warranties of the Company set
forth in this Agreement shall be true and correct in all respects as of the
Closing Date (except to the extent such representations and warranties
expressly speak as of a specified earlier date, in which case such
representations and warranties shall be true as of such earlier date) as
though made on and as of the Closing Date; and Parent shall have received a
certificate signed on behalf of the Company by the chief executive officer
of the Company to such effect.
(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects each of the obligations required to be
performed by the Company under this Agreement on or prior to the Closing
Date and Parent shall have received a certificate signed on behalf of the
Company by the chief executive officer of the Company to such effect.
(c) Approvals. All third party approvals (other than the Requisite
Regulatory Approvals) that are necessary for the conduct, immediately
following the Effective Time, by the Surviving Corporation of the business
of the Company and its Subsidiaries, substantially as currently conducted
(except for any such approval the failure of which to obtain would not
result in a Material Adverse Effect on the Surviving Corporation) shall
have been obtained and shall remain in full force and effect.
(d) No Burdensome Condition. No Requisite Regulatory Approval shall
have imposed any Burdensome Condition.
SECTION 7.03. Conditions to Obligations of the Company. The obligation of
the Company to consummate the Merger is also subject to the satisfaction or
waiver by the Company at or prior to the Effective Time of the following
conditions:
(a) Representations and Warranties. Subject to the standard set forth
in Section 2.06(b), the representations and warranties of Parent and Merger
Sub set forth in this Agreement shall be true and correct, as of the
Closing Date (except to the extent such representations and warranties
speak as of a specified earlier date, in which case such representations
and warranties shall be true as of such earlier date) as though made on and
as of the Closing Date; and the Company shall have received a certificate
signed on behalf of each of Parent and Merger Sub by an executive officer
of Parent and Merger Sub, as the case may be, to such effect.
(b) Performance of Obligations of Parent. Each of Parent and Merger
Sub shall have performed in all material respects each of the obligations
required to be performed by it under this Agreement at or prior to the
Closing Date and the Company shall have received a certificate signed on
behalf of each of Parent and Merger Sub by an executive officer of Parent
and Merger Sub, as the case may be, to such effect.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, notwithstanding any
requisite adoption of this Agreement by the stockholders of the Company:
(a) by mutual written consent of the Company (provided that such
termination has been approved by the Special Committee) and Parent;
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(b) by either the Company (provided that such termination has been
approved by the Special Committee) or Parent if any Governmental Entity
which must grant or satisfy, as the case may be, a Requisite Regulatory
Approval has denied approval of the Merger and such denial has become final
and nonappealable, or any Governmental Entity of competent jurisdiction
shall have issued a final nonappealable injunction permanently enjoining or
otherwise prohibiting the consummation of the transactions contemplated by
this Agreement; provided, however, that the right to terminate this
Agreement under this Section 8.01(b) shall not be available to any party
whose failure to comply with Section 6.02(c) has been the primary cause of
such action;
(c) by either the Company (provided that such termination has been
approved by the Special Committee) or Parent if the Merger shall not have
been consummated on or before January 30, 2002, unless the failure of the
Closing to occur by such date shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe the covenants and
agreements of such party set forth herein;
(d) by either the Company (provided that such termination has been
approved by the Special Committee) or Parent if there shall have been a
material breach of any of the covenants or agreements or any of the
representations or warranties set forth in this Agreement on the part of
the Company (in the case of Parent) or Parent or Merger Sub (in the case of
the Company), which breach is not cured, in the case of a breach of Section
6.04, within 5 days and, in all other cases, within 30 days following
written notice to the party committing such breach, or which breach, by its
nature or timing, cannot be cured prior to the date referred to in Section
8.01(c); provided that such breach, if occurring or continuing on the
Closing Date, would constitute, individually or in the aggregate with other
such breaches occurring prior to such time and then continuing, the failure
of the conditions set forth in Sections 7.02(a), 7.02(b), 7.03(a) or
7.03(b), as applicable;
(e) by either the Company (provided that such termination has been
approved by the Special Committee) or Parent, if the Company Meeting shall
have been held and the holders of Company Common Shares shall have failed
to adopt this Agreement by the vote specified in Section 7.01(a) at such
meeting (including any adjournment or postponement thereof in accordance
with applicable law); provided, that Parent shall not have the right to
terminate this Agreement under this Section 8.01(e) if Parent has failed to
comply with Section 6.01(b);
(f) by Parent if the Special Committee or the Board of Directors of
the Company (by a vote or consent of a majority of the non-Class A
directors then in office) shall have (i) withdrawn or modified in a manner
adverse to Parent its favorable recommendation of this Agreement, or (ii)
recommended any Acquisition Proposal to the stockholders of the Company;
(g) by Parent if any Governmental Entity which must grant or satisfy,
as the case may be, a Requisite Regulatory Approval has granted such
approval subject to a Burdensome Condition, and such grant and related
Burdensome Condition have become final and nonappealable; and
(h) by the Company if the Board of Directors of the Company (acting
upon the recommendation of the Special Committee) shall concurrently with
such termination authorize the Company to enter into an agreement with
respect to an Acquisition Proposal; provided, however, that the Company may
only exercise its right to terminate this Agreement pursuant to this
Section 8.01(h) if (i) the stockholders of the Company have not yet adopted
this Agreement at the Company Meeting or any adjournment or postponement
thereof or by written consent; (ii) the Company shall have complied in all
material respects with Section 6.04; (iii) the Board of Directors of the
Company (acting upon the recommendation of the Special Committee) and after
consultation with the Special Committee Financial Advisor determines in
good faith that such Acquisition Proposal is a Superior Proposal; (iv) at
least five business days shall have passed since Parent received written
notice from the Company advising Parent that the Board of Directors of the
Company (acting upon the recommendation of the Special Committee) is
prepared to accept such Acquisition Proposal, which notice shall specify
the material terms and conditions of such Acquisition Proposal and if by
such fifth business day, Parent shall not have agreed to increase the
Merger Consideration and/or revise the other terms of this Agreement so
that the Merger
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Consideration and such terms, taken together as so revised, are, in the
good faith judgment of the Board of Directors of the Company (acting upon
the recommendation of the Special Committee), superior to such the
consideration and terms of such Acquisition Proposal and (v) simultaneously
with such termination, the Company shall make the payment specified in
Section 8.02(b).
SECTION 8.02. Effect of Termination. (a) In the event of termination of
this Agreement by either Parent or the Company as provided in Section 8.01, this
Agreement shall forthwith become void and have no effect, and none of Parent,
Merger Sub, the Company, any of their respective Subsidiaries or any of the
officers or directors of any of them shall have any liability of any nature
whatsoever hereunder, or in connection with the transactions contemplated
hereby, except that Sections 6.03(d), 6.03(e), 8.02, 8.04 and Article IX shall
survive any termination of this Agreement, and notwithstanding anything to the
contrary contained in this Agreement, neither Parent, Merger Sub, nor the
Company shall be relieved or released from any liabilities or damages arising
out of its willful breach of any provision of this Agreement; provided that in
no event shall any party hereto be liable for any punitive damages.
(b) In the event that:
(i) (x) Parent terminates this Agreement pursuant to (A) Section
8.01(d) as a result of an intentional breach by the Company of any
representation, warranty, covenant or agreement contained herein, or (B)
Section 8.01(f) or (y) the Company or Parent terminates this Agreement
pursuant to Section 8.01(e),
(ii) prior to such termination an Acquisition Proposal shall have been
communicated to the executive management, the Special Committee or Board of
Directors of the Company or any person shall have publicly announced an
intention (whether or not conditional) to make an Acquisition Proposal, and
(iii) within 12 months of such termination, the Company or any of its
Subsidiaries consummates an Acquisition Proposal or enters into a
definitive agreement with respect to an Acquisition Proposal,
then the Company shall pay to Parent a termination payment equal to $100 million
($100,000,000.00) (the "Company Termination Amount"), by wire transfer of
immediately available funds upon the earlier of (A) signing of a definitive
agreement with respect to an Acquisition Proposal and (B) consummation of an
Acquisition Proposal.
(c) In the event that the Company terminates this Agreement pursuant to
Section 8.01(h), then the Company shall pay the Company Termination Amount by
wire transfer of immediately available funds concurrently with delivery of
notice of termination by the Company and the making of such payment shall be a
condition of such termination.
(d) For purposes of Sections 8.01 and 8.02, "Acquisition Proposal" shall
mean a transaction or series of transactions which, if consummated as proposed,
would constitute an Acquisition Proposal (as defined in Section 6.04) which
would result in a person or group (as such term is defined in Section 13(d) of
the Exchange Act), other than Parent and its affiliates, owning, directly or
indirectly, 50% of the voting interests in the Company then outstanding or 50%
or more of the assets of the Company and its Subsidiaries, taken as a whole.
(e) The Company acknowledges that the agreements contained in this Section
8.02 are an integral part of the transactions contemplated by this Agreement,
and that, without these agreements, Parent would not enter into this Agreement;
accordingly, if the Company fails promptly to pay any amount due pursuant to
this Section 8.02 and, in order to obtain such payment, Parent commences a suit
which results in a judgment against the Company for the payment set forth in
this Section 8.02,fiscal year ended December 31, 2016, and the Audit Committee has appointed Deloitte & Touche LLP as auditors for the Company shall payfor the fiscal year ending December 31, 2017. The Board and the Audit Committee recommend that stockholders ratify the appointment of Deloitte & Touche LLP as independent auditors for the Company. The Company's organizational documents do not require that stockholders ratify the selection of Deloitte & Touche LLP as the Company's independent registered public accounting firm. However, the Board believes such ratification is a matter of good corporate practice. If stockholders do not ratify the appointment, the Audit Committee will reconsider its selection but may still retain Deloitte & Touche LLP. One or more representatives of Deloitte & Touche LLP are expected to Parent its costs and expenses
(including reasonable attorneys' fees) in connection with such suit, together
with interest on the Company Termination Amount from each date for payment until
the date of such paymentbe present at the prime rate of Citibank N.A. in effect on the
date such payment was requiredAnnual Meeting and afforded an opportunity to be made. For the avoidance of doubt, approval
by the stockholders of the Company shall not bemake a conditionstatement, if they desire to the payment of
any amount specified in this Section 8.02.
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SECTION 8.03. Amendment. Subject to compliance with applicable law, this
Agreement may be amended by Parent, Merger Sub and the Company at any time
before or after adoption of this Agreement by the stockholders of the Company;
provided, however, that after any adoption of this Agreement by the stockholders
of the Company, no amendment shall be made which by law requires further
approval by such stockholders without such further approval. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
SECTION 8.04. Extension; Waiver. At any time prior to the Effective Time,
subject to compliance with applicable law, Parent, Merger Sub and the Company
may, to the extent legally allowed, (a) extend the time for the performance of
any of the obligations or other acts of the other parties hereto for its
benefit, (b) waive any inaccuracies in the representations and warranties of the
other parties for its benefit contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein for the waiving party's benefit. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in a written instrument signed on behalf of such party, but such
extension or waiver or failure to insist on strict compliance with an
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement
and any certificate delivered pursuant hereto by any person shall terminate at
the Effective Time or upon the termination of this Agreement pursuant to Section
8.01, as the case may be, except that the agreements set forth in Articles I and
II and Sections 6.05, 6.10, 6.12 and 6.13 shall survive the Effective Time
indefinitely, and those set forth in Sections 6.03(d), 6.03(e), 8.02, 8.04 and
this Article IX shall survive termination indefinitely.
SECTION 9.02. Expenses. Except as otherwise provided in this Section, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expense; provided, however, that the costs and expenses of printing and mailing
the Proxy Statement, and all filing and other fees paid to the SEC in connection
with the Merger, shall be borne equally by Merger Sub and the Company.
SECTION 9.03. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
or by registered or certified mail (postage prepaid, return receipt requested)
or by a nationally recognized overnight courier service to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 9.03):
if to Parent or Merger Sub:
c/o BNP Paribas
12 rue Chauchat
75009 Paris, FRANCE
Telecopy: 011-33-1-40-14-57-65
Attention: Pierre Mariani
with copies to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, NY 10006
Telecopy: (212) 225-3999
Attention: Daniel S. Sternberg, Esq.
Paul E. Glotzer, Esq.
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if to the Company:
c/o BancWest Corporation
999 Bishop Street
Honolulu, Hawaii 96813
Telecopy: (808) 533-7844
Attention: Howard H. Karr
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Telecopy: (212) 455-2502
Attention: Lee Meyerson, Esq.
Marni J. Lerner, Esq.
SECTION 9.04. Definitions and Usage. (a) For purposes of this Agreement,
the term:
(i) "affiliate" of a specified person means a person who directly or
indirectly through one or more intermediaries controls, is controlled by,
or is under common control with, such specified person;
(ii) "beneficial owner" with respect to any shares means a person who
shall be deemed to be the beneficial owner of such shares which such person
beneficially owns, as defined in Rule 13d-3 under the Exchange Act;
(iii) "business day" means any day other than a Saturday, Sunday or
one on which banks are authorized by law to close in New York, New York,
Paris, France, San Francisco, California or Honolulu, Hawaii;
(iv) "Code" means the Internal Revenue Code of 1986, as amended;
(v) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, as trustee or executor, by contract or credit
arrangement or otherwise;
(vi) "Material Adverse Effect" means,
(A) with respect to the Company, any effect that (1) is or is
reasonably likely to be material and adverse to the financial condition,
business or results of operations of the Company and its Subsidiaries
taken as a whole other than any change, effect, event or occurrence
arising out of the performance by the parties of their obligations under
this Agreement or (2) would prevent or materially impair the ability of
such person to perform its obligations under this Agreement or to
consummate the transactions contemplated hereby; and
(B) with respect to Parent, any effect that would prevent or
materially impair or delay the ability of Parent and Merger Sub to
perform their obligations under this Agreement or to consummate the
transactions contemplated hereby;
provided, however, that Material Adverse Effect shall not be deemed to
include the impact of (i) changes in banking and other laws of general
applicability or interpretations thereof by courts or governmental
authorities, (ii) changes in GAAP or regulatory accounting requirements
applicable to banks and their holding companies generally, (iii) this
Agreement and the transactions contemplated hereby and the announcement
hereof, (iv) actions or omissions of a party to this Agreement taken
with the prior written consent of the other parties to this Agreement,
in contemplation of the transactions contemplated hereby, (v) changes in
prevailing interest rates, currency exchange rates or general economic
conditions, or the occurrence of other events or developments affecting
banks and their holding companies generally except to the extent that
such changes, events or develop-
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ments have an adverse effect on the Company and its Subsidiaries taken
as a whole that is materially greater than the adverse effect on
comparable entities and (vi) any modifications or changes to valuation
policies and practices of the Company or any of its Subsidiaries in
connection with the Merger or restructuring charges, in each case taken
with the prior approval of Parent, in connection with the Merger, in
each case in accordance with GAAP;
(vii) "person" means an individual, corporation, limited liability
company, partnership, limited partnership, syndicate, person (including,
without limitation, a "person" as defined in Section 13(d)(3) of the
Exchange Act), trust, association or entity or government, political
subdivision, agency or instrumentality of a government;
(viii) "Standstill Agreement" means the Standstill and Governance
Agreement, dated as of November 1, 1998, between the Company and Parent.
(ix) "Subsidiary" and "Significant Subsidiary" shall have the meanings
ascribed to them in Rule 1-02 of Regulation S-X of the SEC. Notwithstanding
the foregoing, for purposes of this Agreement, the Company shall not be
deemed a Subsidiary or a Significant Subsidiary of Parent.
(x) "Superior Proposal" means any Acquisition Proposal which the Board
of Directors of the Company determines in its good faith judgment (A)
would, if consummated, be more favorable than the Merger to the holders of
Company Common Stock from a financial point of view and (B) constitutes a
transaction that, other than with respect to obtaining stockholder
approval, is reasonably capable of being consummated on the terms set
forth, taking into account all legal, financial, regulatory and other
aspects of such proposal.
A reference in this Agreement to any statute shall be to such statute as
amended from time to time, and to the rules and regulations promulgated
thereunder.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
- ---- ----------
Acquisition Proposal........................................ 6.04, 8.02
Agreement................................................... Recitals
BHCA........................................................ 3.01(a)
Burdensome Condition........................................ 6.02(d)
Certificate of Merger....................................... 1.02
Certificate................................................. 2.01
Claims and Proceedings...................................... 3.11(a)
Class A Common Stock........................................ Recitals
Closing..................................................... 1.02
Closing Date................................................ 1.02
Company..................................................... Recitals
Company Benefit Plans....................................... 3.13(a)
Company Common Shares....................................... Recitals
Company Common Stock........................................ Recitals
Company Contract............................................ 3.16
Company Disclosure Schedule................................. 2.06(a)
Company Employees........................................... 6.11(b)
Company Equity Plans........................................ 2.03(b)
Company Meeting............................................. 6.01(a)
Company Preferred Stock..................................... Recitals
Company Regulatory Agreement................................ 3.17
Company Reports............................................. 3.14
Company Stockholder Approval................................ 3.03(c)
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TERM SECTION
- ---- ----------
Company Stock Option Plans.................................. 2.03(a)
Company Stock Plans......................................... 2.03(b)
Company Termination Amount.................................. 8.02(b)
Confidential Information.................................... 6.03(d)
Contract.................................................... 3.03(b)
Covered Parties............................................. 6.05(b)
DGCL........................................................ Recitals
Dissenting Shares........................................... 2.04(a)
DLLCA....................................................... Recitals
Effective Time.............................................. 1.02
Environmental Law........................................... 3.19(a)
ERISA....................................................... 3.13(a)
Exchange Act................................................ 3.06
Federal Reserve Board....................................... 3.04
Fiduciary Shares............................................ 2.01(b)
GAAP........................................................ 3.06
Governmental Entity......................................... 3.04
HSR Act..................................................... 3.04
Incentive Compensation Plan................................. 6.11(a)
Indemnified Parties......................................... 6.05(c)
Injunction.................................................. 7.01(c)
Lien........................................................ 3.01(b)
Litigation.................................................. 9.10
Merger...................................................... Recitals
Merger Consideration........................................ 2.01(c)
Merger Sub.................................................. Recitals
Merger Sub Units............................................ 2.01
NYSE........................................................ 3.04
Option...................................................... 2.03(a)
Option Spread............................................... 2.03(a)
Original Merger Agreement................................... Recitals
Parent...................................................... Recitals
Parent Disclosure Schedule.................................. 2.06
Parent Plans................................................ 6.11(c)
Parent Regulatory Agreement................................. 4.05(b)
Paying Agent................................................ 2.02(b)
PBGC........................................................ 3.13(g)
Pre-Termination Acquisition Proposal Event.................. 8.02(d)
Process Agent............................................... 9.10
Pro Rata Dividend........................................... 5.02(b)
Proxy Statement............................................. 6.02(a)
Regulatory Agencies......................................... 3.05
Representatives............................................. 6.03(a)
Requisite Regulatory Approvals.............................. 7.01(b)
Restricted Shares........................................... 2.03(b)
SEC......................................................... 3.04
Securities Act.............................................. 3.14
Special Committee........................................... Recitals
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TERM SECTION
- ---- ----------
Special Committee Financial Advisor......................... 3.08
SRO......................................................... 3.04
Standstill Agreement........................................ 3.07(c)
Surviving Corporation....................................... 1.01
Surviving Corporation Common Stock.......................... Recitals
Taxes....................................................... 2.01(d)
US Parent................................................... Recitals
Voting Debt................................................. 3.02
(c) A fact, event, circumstance or occurrence shall be within a person's
"Knowledge" if, with respect to the Company or any of its Subsidiaries, such
fact, event, circumstance or occurrence is or was actually known by any of the
Company's or the relevant Subsidiary's executive officers or directors, or, with
respect to the Parent or any of its Subsidiaries, such fact, event or
circumstance or occurrence is or was actually known by any of Parent's or the
relevant Subsidiary's executive officers or directors.
(d) The symbol "$" and the word "dollar" or "dollars" shall refer to the
lawful currency of the United States of America.
SECTION 9.05. Accounting Terms. All accounting terms used herein which are
not expressly defined in this Agreement shall have the respective meanings given
to them in accordance with GAAP.
SECTION 9.06. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effectdo so, long as the major economic or
legal substance of the Merger is not affected in any manner materially adverse
to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the Merger be consummated as originally contemplated to the fullest
extent possible.
SECTION 9.07. Entire Agreement; Assignment. This Agreement (including the
Parent Disclosure Schedule and the Company Disclosure Schedule, which are hereby
incorporated herein and made a part hereof for all purposes as if fully set
forth herein) constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all prior agreements and undertakings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof. This Agreement shall not be assigned by operation of law
or otherwise without the prior written consent of the other parties, which shall
not be unreasonably withheld, except that Merger Sub may assign all or any of
its rights and obligations hereunder to any wholly owned subsidiary of Parent or
Merger Sub; provided, that no such assignment shall change the amount or nature
of the Merger Consideration or relieve the assigning party of its obligations
hereunder if such assignee does not perform such obligations.
SECTION 9.08. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, other than Section 6.05 (which is intended to be for the
benefit of the persons covered thereby and may be enforced by such persons).
SECTION 9.09. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to specific performance of the terms hereof, in addition to any other remedy
at law or in equity.
SECTION 9.10. Governing Law; Consent to Jurisdiction. (a) This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware applicable to contracts made and to be performed entirely in such
State. Eachavailable to respond to questions from stockholders.
Required Vote
Ratification of the parties hereto hereby irrevocably and unconditionally
consents to
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submit toappointment of Deloitte & Touche LLP as the non-exclusive jurisdiction of the courts of the State of New York
and of the United States of America, in each case located in the County of New
York, for any action, proceeding or investigation in any court or before any
governmental authority ("Litigation") arising out of or relating to this
Agreement and the transactions contemplated hereby. Each of the parties hereto
hereby irrevocably and unconditionally waives, and agrees not to assert, by way
of motion, as a defense, counterclaim or otherwise, in any such Litigation, the
defense of sovereign immunity, any claim that it is not personally subject to
the jurisdiction of the aforesaid courts for any reason other than the failure
to serve process in accordance with this Section 6.12, that it or its property
is exempt or immune from jurisdiction of any such court or from any legal
process commenced in such courts (whether through service of notice, attachment
prior to judgment, attachment in aid of execution of judgment, execution of
judgment or otherwise), and to the fullest extent permitted by applicable law,
that the Litigation in any such court is brought in an inconvenient forum, that
the venue of such Litigation is improper, or that this Agreement, or the subject
matter hereof, may not be enforced in or by such courts and further irrevocably
waives, to the fullest extent permitted by applicable law, the benefit of any
defense that would hinder, fetter or delay the levy, execution or collection of
any amount to which the party is entitled pursuant to the final judgment of any
court having jurisdiction. Each of the parties irrevocably and unconditionally
waives, to the fullest extent permitted by applicable law, any and all rights to
trial by jury in connection with any Litigation arising out of or relating to
this Agreement or the transactions contemplated hereby.
(b) Parent hereby irrevocably designates French American Banking
Corporation (in such capacity, the "Process Agent"), with an office at 499 Park
Avenue New York, New York, 10022 its designee, appointee and agent to receive,
for and on its behalf, service of process in such jurisdiction in any Litigation
arising out of or relating to this Agreement and such service shall be deemed
complete upon delivery thereof to the Process Agent; provided that in the case
of any such service upon the Process Agent, the party effecting such service
shall also deliver a copy thereof to Parent in the manner provided in Section
9.03. Each of the parties further irrevocably consents to the service of process
out of any of the aforementioned courts in any such Litigation by the mailing of
copies thereof byCompany's independent registered mail, postage prepaid, to such party at its address
set forth in this Agreement, such service of process to be effective upon
acknowledgment of receipt of such registered mail. Parent expressly acknowledges
that the foregoing waiver is intended to be irrevocable under the laws of the
State of New York and of the United States of America; provided that Parent's
consent to jurisdiction and service contained in this Section 9.10 is solelypublic accounting firm for the purpose referred to in this Section 9.10 and shall not be deemed to be a
general submission to said courts or infiscal year ending December 31, 2017 requires the State of New York other than for
such purpose. If the Process Agent shall cease to act as such or to exist, BNP
covenants that it shall appoint without delay another such agent reasonably
satisfactory to the Company.
(c) Notwithstanding the foregoing, nothing in this Agreement shall be
deemed consent by any party to jurisdiction in any litigation initiated, or
service of process, by any person who is not a party hereto.
SECTION 9.11. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 9.12. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
SECTION 9.13. Construction. This Agreement and any documents or
instruments delivered pursuant hereto or in connection herewith shall be
construed without regard to the identity of the person who drafted the various
provisions of the same. Each and every provision of this Agreement and such
other documents and instruments shall be construed as though all of the parties
participated equally in the drafting of the same. Consequently, the parties
acknowledge and agree that any rule of construction that a document is to be
construed against the drafting party shall not be applicable either to this
Agreement or such other documents and instruments.
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IN WITNESS WHEREOF, the Company, Parent and Merger Sub have caused this
Agreement to be executed as of July 19, 2001 by their respective officers
thereunto duly authorized.
BANCWEST CORPORATION
By: /s/ WALTER A. DODS, JR.
-------------------------------------------------------------------------------
Name: Walter A. Dods, Jr.
Title: Chairman and Chief Executive
Officer
BNP PARIBAS
By: /s/ PIERRE MARIANI
------------------------------------
Name: Pierre Mariani
Title: Head of International Retail
Banking
CHAUCHAT L.L.C.
By its sole Member, Chauchat Holdings
Corporation
By: /s/ JACQUES ARDANT
------------------------------------
Name: Jacques Ardant
Title: President
SIGNATURE PAGE TO AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
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EXHIBIT A
FORM OF
CERTIFICATE OF INCORPORATION
OF
BANCWEST CORPORATION
FIRST: The name of the corporation is BancWest Corporation (hereinafter
referred to as the "Corporation").
SECOND: The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle 19801. The name and address of its resident
agent is The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware
19801.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The total number of shares of stock which the Corporation is
authorized to issue is 150,000,000 shares of common stock and the par value of
each of such shares is $0.01.
FIFTH: The following provisions are inserted for the management of the
business and for the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
(1) The number of directors of the Corporation shall be such as from
time to time shall be fixed by, or in the manner provided in, the by-laws.
Election of directors need not be by ballot unless the by-laws so provide.
(2) The Board of Directors shall have powers without the assent oraffirmative vote of the stockholders to make, alter, amend, change, add to or repeal
the by-laws of the Corporation; to fix and vary the amount to be reserved
for any proper purpose; to authorize and cause to be executed mortgages and
liens upon all or any part of the property of the Corporation; to determine
the use and disposition of any surplus or net profits; and to fix the times
for the declaration and payment of dividends.
(3) The directors in their discretion may submit any contract or act
for approval or ratification at any annual meeting of the stockholders or
at any meeting of the stockholders called for the purpose of considering
any such act or contract, and any contract or act that shall be approved or
be ratified by the vote of the holders of a majority of the stock of the
Corporation which is represented in person or by proxy at such meeting and
entitled to vote thereat (provided that a lawful quorum of stockholders be
there represented in person or by proxy) shall be as valid and as binding
upon the Corporation and upon all the stockholders as though it had been
approved or ratified by every stockholder of the Corporation, whether or
not the contract or act would otherwise be open to legal attack because of
directors' interest, or for any other reason.
(4) In addition to the powers and authorities herein before or by
statute expressly conferred upon them, the directors are hereby empowered
to exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation; subject, nevertheless, to the
provisions of the statutes of Delaware, of this certificate, and to any
by-laws from time to time made by the stockholders; provided, however, that
no by-laws so made shall invalidate any prior act of the directors which
would have been valid if such by-law had not been made.
SIXTH: To the fullest extent permitted by the Delaware General Corporation
Law as it exists or may hereafter be amended, a director of the Corporation
shall not be liable to the Corporation or its stockholders for monetary damages
for breach of a fiduciary duty as a director.
SEVENTH: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any
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court of equitable jurisdiction within the State of Delaware, may, on the
application in a summary way of the Corporation or of any creditor or
stockholder thereof or on the application of any receiver or receivers appointed
for the Corporation under the provisions of section 291 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or of any
receiver or receivers appointed for the Corporation under the provisions of
section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of the Corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of the Corporation, as the case
may be, and also on the Corporation.
EIGHTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation in the
manner now or hereafter prescribed by law, and all rights and powers conferred
herein on stockholders, directors and officers are subject to this reserved
power.
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EXHIBIT B
FORM OF
AMENDED AND RESTATED
BY-LAWS
OF
BANCWEST CORPORATION
ARTICLE I
SHAREHOLDERS
SECTION 1. Place of Meetings. Meetings of the shareholders may be held at
such place or places, within or without the State of Delaware, as shall be fixed
by the directors and stated in the notice of the meeting.
SECTION 2. Annual Meeting. The annual meeting of shareholders for the
election of directors and the transaction of such other business as may properly
come before the meeting shall be held on such date as may be fixed by the
directors and stated in the notice of the meeting.
SECTION 3. Notice of Annual Meeting. Notice of the annual meeting shall be
given to each shareholder entitled to vote, at least ten days prior to the
meeting.
SECTION 4. Special Meetings. Special meetings of the shareholders for any
purpose or purposes may be called by the President or Secretary and must be
called upon receipt by either of them of the written request of the holders of
twenty-five percent of the stock then outstanding and entitled to vote.
SECTION 5. Notice of Special Meeting. Notice of a special meeting, stating
the time, place and purpose or purposes thereof, shall be given to each
shareholder entitled to vote, at least ten days prior to the meeting. The notice
shall also set forth at whose direction it is being issued.
SECTION 6. Quorum. At any meeting of the shareholders, the holders of a majority of the shares of common stock then entitled to vote shall constitute a quorum
for all purposes, except as otherwise provided by law orrepresented at the Certificate of
Incorporation.
SECTION 7. Voting. At each meeting of the shareholders, every holder of
stock then entitled to vote may vote in person or by proxy, and, except as may
be otherwise provided by the Certificate of Incorporation, shall have one vote
for each share of stock registered in such holder's name.
SECTION 8. Adjourned Meeting. Any meeting of shareholders may be adjourned
to a designated time and place by a vote of a majority in interest of the
shareholders presentAnnual Meeting, in person or by proxy, and entitled to vote even though
less thanthereon. Abstentions will have the same effect as a quorum is so present. No notice of such an adjourned meeting need be
given, other than by announcement at the meeting, and any business may be
transacted which might have been transacted at the meeting as originally called.
SECTION 9. Action by Written Consent of Shareholders. Whenever by any
provision of statute orvote against ratification.
THE BOARD OF DIRECTORS AND AUDIT COMMITTEE UNANIMOUSLY RECOMMEND THAT YOU VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP TO SERVE AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2017.
As of the Certificate of Incorporation or of these By-Laws,
the vote of shareholders at a meeting thereof is required or permitted to be
taken in connection with any corporate action, the meeting and vote of
shareholders may be dispensed with, if holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted shall consent in writing to such corporate action being taken.
ARTICLE II
DIRECTORS
SECTION 1. Number. The number of directors shall be determined from time
to time by resolution adopted by affirmative vote of a majority of such
directors then in office. The directors shall hold office for the
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term of one year and until their successor or successors is or are elected and
shall qualify. The number of directors may be less than three when all of the
shares are owned by less than three shareholders, but in such event the number
of directors may not be less than the number of shareholders. Directors need not
be shareholders.
SECTION 2. Powers. The Board of Directors may adopt such rules and
regulations for the conduct of its meetings, the exercise of its powers and the
management of the affairs of the corporation as it may deem proper, not
inconsistent with the laws of the State of Delaware, the Certificate of
Incorporation or these By-Laws.
In addition to the powers and authorities by these By-Laws expressly
conferred upon them, the directors may exercise all such powers of the
corporation and do such lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these By-Laws directed or required to be
exercised or done by the shareholders.
SECTION 3. Meeting, Quorum, Action without Meeting. Meetings of the Board
may be held at any place, either within or outside the State of Delaware,
provided a quorum be in attendance. Except as may be otherwise provided by the
Certificate of Incorporation or by the Delaware General Corporation Law, a
majority of the directors in office shall constitute a quorum at any meeting of
the Board and the vote of a majority of a quorum of directors shall constitute
the act of the Board.
The Board of Directors may hold an annual meeting, without notice,
immediately after the annual meeting of shareholders. Regular meetings of the
Board of Directors may be established by a resolution adopted by the Board. The
Chairman of the Board (if any) or the President or Secretary may call, and at
the request of any two directors, must call a special meeting of the Board of
Directors, five days' notice of which shall be given by mail, or two days'
notice personally or by telegraph or cable to each director.
Any one or more members of the Board or any Committee thereof may
participate in a meeting of such Board or Committee by means of a conference
telephone or similar communications equipment allowing all persons participating
in the meeting to hear each other at the same time. Participation by such means
shall constitute presence in person at a meeting.
Any action required or permitted to be taken by the Board or any Committee
thereof may be taken without a meeting if all members of the Board or the
Committee consent in writing to the adoption of a resolution authorizing the
action.
The resolution and the written consents thereto by the members of the Board
or Committee shall be filed with the minutes of the proceedings of the Board or
Committee.
SECTION 4. Vacancies, Removal. Except as otherwise provided in the
Certificate of Incorporation or in the following paragraph, vacancies occurring
in the membership of the Board of Directors, from whatever cause arising
(including vacancies occurring by reason of the removal of directors without
cause and newly created directorships resulting from any increase in the
authorized number of directors), may be filled by a majority vote of the
remaining directors, though less than a quorum, or such vacancies may be filled
by the shareholders.
Except where the Certificate of Incorporation contains provisions
authorizing cumulative voting or the election of one or more directors by class
or their election by holders of bonds, or requires all action by shareholders to
be by a greater vote, any one or more of the directors may be removed, (a)
either for or without cause, at any time, by vote of the shareholders holding a
majority of the outstanding stock of the corporation entitled to vote, present
in person or by proxy, at any special meeting of the shareholders or, (b) for
cause, by action of the Board of Directors at any regular or special meeting of
the Board. A vacancy or vacancies occurring from such removal may be filled at
the special meeting of shareholders or at a regular or special meeting of the
Board of Directors.
SECTION 5. Committees. The Board of Directors, by resolution adopted by a
majority of the entire Board, may designate from its members an Executive
Committee or other committee or committees, each
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consisting of three or more members, with such powers and authority (to the
extent permitted by law) as may be provided in said resolution.
ARTICLE III
OFFICERS
SECTION 1. Executive Officers. The executive officers of the corporation
shall be a President, one or more Vice-Presidents, a Treasurer and a Secretary,
all of whom shall be elected annually by the directors, who shall hold office
during the pleasure of the directors. In addition, the Board of Directors may
elect a Chairman of the Board of Directors. Except for the offices of President
and Secretary, any two offices or more may be held by one person. Provided,
however, when all of the issued and outstanding stock of the corporation is
owned by one person, such person may hold all or any combination of offices. All
vacancies occurring among any of the officers shall be filled by the directors.
Any officer may be removed at any time by the affirmative vote of a majority
(unless the Certificate of Incorporation required a larger vote) of the
directors present at a special meeting of directors called for the purpose.
SECTION 2. Other Officers. The Board of Directors may appoint such other
officers and agents with such powers and duties as it shall deem necessary.
SECTION 3. The Chairman of the Board. The Chairman of the Board of
Directors, if one be elected, shall preside at all meetings of the Board of
Directors and he shall have and perform such other duties as from time to time
may be assigned to him by the Board of Directors or the Executive Committee.
SECTION 4. The President. The President, who may, but need not be a
director, shall, in the absence or non-election of a Chairman of the Board,
preside at all meetings of the shareholders and directors. While the directors
are not in session, he shall have general management and control of the business
and affairs of the corporation.
SECTION 5. The Vice-President. The Vice-President, or if there be more
than one, the senior Vice President, as determined by the Board of Directors, in
the absence or disability of the President, shall exercise the powers and
perform the duties of the President and each Vice-President shall exercise such
other powers and perform such other duties as shall be prescribed by the
directors.
SECTION 6. The Treasurer. The Treasurer shall have custody of all funds,
securities and evidences of indebtedness of the corporation; he shall receive
and give receipts and acquittances for money paid in on account of the
corporation, and shall pay out of the funds on hand all bills, pay-rolls, and
other just debts of the corporation, of whatever nature, upon maturity; he shall
enter regularly in books to be kept by him for that purpose, full and accurate
accounts of all moneys received and paid out by him on account of the
corporation, and he shall perform all other duties incident to the office of
Treasurer and as may be prescribed by the directors.
SECTION 7. The Secretary. The Secretary shall keep the minutes of all
proceedings of the directors and of the shareholders; he shall attend to the
giving and serving of all notices to the shareholders and directors or other
notice required by law or by these By-Laws; he shall affix the seal of the
corporation to deeds, contracts and other instruments in writing requiring a
seal, when duly signed or when so ordered by the directors; he shall have charge
of the certificate books and stock books and such other books and papers as the
Board may direct, and shall perform all other duties incident to the office of
Secretary.
SECTION 8. Salaries. The salaries of all officers shall be fixed by the
Board of Directors, and the fact that any officer is a director shall not
preclude him from receiving a salary as an officer, or from voting upon the
resolution providing the same.
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ARTICLE IV
CAPITAL STOCK
SECTION 1. Form and Execution of Certificates. Certificates of stock shall
be in such form as required by the Delaware General Corporation Law and as shall
be adopted by the Board of Directors. They shall be numbered and registered in
the order issued; shall be signed by the Chairman or a Vice-Chairman of the
Board (if any) or by the President or a Vice-President and by the Secretary or
an Assistant Secretary or the Treasurer or an Assistant Treasurer and may be
sealed with the corporate seal or a facsimile thereof. When such a certificate
is countersigned by a transfer agent or registered by a registrar, the
signatures of any such officers may be facsimile.
SECTION 2. Transfer. Transfer of shares shall be made only upon the books
of the corporation by the registered holder in person or by attorney, duly
authorized, and upon surrender of the certificates for such shares properly
assigned for transfer.
SECTION 3. Lost or Destroyed Certificates. The holder of any certificate
representing shares of stock of the corporation may notify the corporation of
any loss, theft or destruction thereof, and the Board of Directors may
thereupon, in its discretion, cause a new certificate for the same number of
shares to be issued to such holder upon satisfactory proof of such loss, theft
or destruction, and the deposit of indemnity by way of bond or otherwise, in
such form and amount and with such surety or sureties as the Board of Directors
may require, to indemnify the corporation against loss or liability by reason of
the issuance of such new certificates.
SECTION 4. Record Date. In lieu of closing the books of the corporation,
the Board of Directors may fix, in advance, a date not exceeding fifty days,
nor less than ten days, as the record date for the determination of shareholders
entitled to receive notice of, or to vote, at any meeting of shareholders, or to
consent to any proposal without a meeting, or for the purpose of determining
shareholders entitled to receive payment of any dividends, or allotment of any
rights, or for the purpose of any other action.
ARTICLE V
INDEMNIFICATION
SECTION 1. Indemnification. To the extent permitted by Delaware law from
time to time in effect, the corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action or suit by or in the right of the
corporation to procure a judgment in its favor) by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation, or,
while a director, officer, employee or agent of the corporation, is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
SECTION 2. Indemnification. To the extent permitted by Delaware law from
time to time in effect, the corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or, while a director,
officer, employee or agent of the corporation, is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture,
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trust or other enterprise, against expenses (including attorneys' fees) actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Delaware Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper.
SECTION 3. Expenses. To the extent that a present or former director or
officer or an employee or agent of the corporation has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to in
Sections 1 and 2 of this Article, or in defense of any claim, issue or matter
therein, such person shall be indemnified by the corporation against expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection therewith.
SECTION 4. Authorization of Indemnification Payments. Any indemnification
under Sections 1 and 2 of this Article (unless ordered by a court) shall be made
by the corporation only as authorized in the specific case upon a determination
that indemnification of the present or former director, officer, employee or
agent is proper in the circumstances because such person has met the applicable
standard of conduct set forth in said Sections 1 and 2 of this Article. Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination, (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum, or (2) by a committee of such directors designated by
majority vote of such directors, event though less than a quorum, or (3) if
there are no such directors, or if such directors so direct, by independent
legal counsel (compensated by the corporation) in a written opinion, or (4) by
the stockholders.
SECTION 5. Interim Reimbursement of Expenses. Expenses incurred by a
present or former director or officer of the corporation in defending a civil or
criminal action, suit or proceeding shall be paid by the corporation in advance
of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the corporation as authorized in this Article. Expenses incurred
in defending a civil or criminal action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the employee or
agent to repay such amount if it shall ultimately be determined that such person
is not entitled to be indemnified by the corporation as authorized in this
Article.
SECTION 6. Non-Exclusive Remedy. The indemnification and advancement of
expenses provided by this Article shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office.
SECTION 7. Former Directors, Officer, Employees and Agents. The
indemnification and advancement of expenses provided by or granted pursuant to
this Article shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
SECTION 8. Insurance. The corporation may purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation, or who is or was serving at the request of the corporation, as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against any liability asserted against
such person and incurred by such person in any such capacity, or arising out of
his status as such, whether or not the corporation would have the power to
indemnify such person against such liability under the provisions of this
Article or of Section 145 of the General Corporation Law of Delaware, as it may
be amended or substituted for.
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SECTION 9. Claims Commenced by Indemnitee. Notwithstanding Sections 1 and
2 of this Article, except as otherwise provided in Section 10 hereof, the
corporation shall be required to indemnify an indemnitee in connection with any
action, suit or proceeding (or part thereof) commenced by such indemnitee only
if the commencement of such action, suit or proceeding (or part thereof) by the
indemnitee was authorized by the Board of Directors.
SECTION 10. Enforcement by Indemnitee. If a claim for indemnification or
advancement of expenses under this Article is not paid in full within sixty days
after a written claim therefor by the indemnitee has been received by the
Corporation, the indemnitee may file suit to recover the unpaid amount of such
claim and, if successful in whole or in part, shall be entitled to be paid the
expense of prosecuting such claim. In any such action the Corporation shall have
the burden of proving that the indemnitee is not entitled to the requested
indemnification or advancement of expenses under applicable law.
SECTION 11. Effect of Repeal or Modification. Any repeal or modification
of the foregoing provisions of this Article shall not adversely affect any right
or protection hereunder of any indemnitee in respect of any act or omission
occurring prior to the time of such repeal or modification.
ARTICLE VI
MISCELLANEOUS
SECTION 1. Dividends. The directors may declare dividends from time to
time upon the capital stock of the corporation from the surplus or net profits
available therefor.
SECTION 2. Seal. The directors shall provide a suitable corporate seal
which shall be in the charge of the Secretary and shall be used as authorized by
the By-Laws.
SECTION 3. Fiscal Year. The fiscal year of the corporation shall be fixed
by the directors.
SECTION 4. Checks, Notes, etc. Checks, notes, drafts, bills of exchange
and orders for the payment of money shall be signed or endorsed in such manner
as shall be determined by the directors.
The funds of the corporation shall be deposited in such bank or trust
company, and checks drawn against such funds shall be signed in such manner, as
may be determined from time to time by the directors.
SECTION 5. Notice and Waiver of Notice. Any notice required to be given
under these By-Laws may be waived by the person entitled thereto, in writing, by
telegram, cable or radiogram, and the presence of any person at a meeting shall
constitute waiver of notice thereof as to such person.
Whenever any notice is required by these By-Laws to be given, personal
notice is not meant unless expressly so stated; and any notice so required shall
be deemed to be sufficient if given by depositing it in a post office or post
box in a sealed postpaid wrapper, addressed to such shareholder, officer or
director, at such address as appears on the books of the corporation and such
notice shall be deemed to have been given on the day of such deposit.
ARTICLE VII
AMENDMENTS
SECTION 1. By Shareholders. These By-Laws may be amended at any
shareholders' meeting by vote of the shareholders holding a majority (unless the
Certificate of Incorporation requires a larger vote) of the outstanding stock
having voting power, present either in person or by proxy, provided notice of
the amendment is included in the notice or waiver of notice of such meeting.
SECTION 2. By Directors. The Board of Directors may also amend these
By-Laws at any regular or special meeting of the Board by a majority (unless the
Certificate of Incorporation requires a larger vote) vote of the entire Board,
but any By-Laws so made by the Board of Directors may be altered or repealed by
the shareholders.
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ANNEX B
PERSONAL AND CONFIDENTIAL
May 8, 2001
Special Committee of the Board of Directors
BancWest Corporation
999 Bishop Street
Honolulu, Hawaii 96813
Ladies and Gentlemen:
You have requested our opinion as to the fairness from a financial point of
view to the holders of the outstanding shares of Common Stock, par value $1.00
per share (the "Shares"), of BancWest Corporation (the "Company") of the $35.00
per Share in cash to be received by such holders pursuant to the Agreement and
Plan of Merger, dated as of May 8, 2001, among BNP Paribas ("BNP"), Chauchat
L.L.C., a wholly owned subsidiary of BNP, and the Company (the "Agreement").
Goldman, Sachs & Co., as part of its investment banking business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, competitive
biddings, secondary distributions of listed and unlisted securities, private
placements and valuations for estate, corporate and other purposes. We are
familiar with the Company, having provided certain investment banking services
to the Company from time to time, including having acted as financial advisor to
First Hawaiian, Inc. (predecessor to BancWest Corporation) in connection with
its merger with BancWest Corporation, then a wholly owned subsidiary of BNP, in
November 1998, having acted as the Company's financial advisor in connection
with a block trade of 350,000 Shares in June 1999, having acted as
joint-bookrunning manager with respect to an offering of $150 million aggregate
principal amount of Quarterly Income Preferred Securities ("QUIPS") of the
Company in December 2000, and having acted as the Company's financial advisor in
connection with, and having participated in certain of the negotiations leading
to, the Agreement. We have also provided certain investment banking services to
BNP from time to time, including having acted as financial advisor to BNP in
connection with its acquisition of Compagnie Financiere de Paribas SA in October
1999 and having acted as joint-lead manager in connection with the offer of $500
million of non-cumulative trust preferred securities of BNP in November 2000,
and we may provide investment banking services to BNP in the future. Goldman,
Sachs & Co. provides a full range of financial advisory and securities services
and, in the course of its normal trading activities, may from time to time
effect transactions and hold positions in securities, including derivative
securities, of the Company and BNP for its own account and for the accounts of
customers.
In connection with this opinion, we have reviewed, among other things, the
Agreement; Annual Reports to Stockholders and Annual Reports on Form 10-K of the
Company for the five years ended December 31, 2000; Annual Reports to
Stockholders of BNP for the five years ended December 31, 2000; certain interim
reports to stockholders and Quarterly Reports on Form 10-Q of the Company;
certain interim reports to stockholders of BNP; certain other communications
from the Company to its stockholders; and certain internal financial analyses
and forecasts for the Company prepared by its management and approved for use in
connection with this opinion by the management of the Company. We also have held
discussions with members of the seniorProxy Statement, management of the Company regarding their
assessmenthas no knowledge of its past and current business operations, financial condition and
future prospects. In addition, we have reviewedany matters to be presented for consideration at the current and historical
reported price and trading activity forAnnual Meeting other than those referred to above. If any other matters properly come before the Shares, compared certain financial
and stock market information forAnnual Meeting, the Company with similar information for
certain other companies the securities of which are publicly traded, reviewed
the financial terms of certain recent business combinationspersons named in the banking
industry specifically andaccompanying proxy card intend to vote each proxy, to the extent entitled, in other industries generally and performed such other
studies and analyses as we considered appropriate.
We have relied uponaccordance with their best judgment.
STOCKHOLDER PROPOSALS FOR THE 2018 ANNUAL MEETING
Stockholders who, in accordance with the accuracy and completeness of all ofSEC's Rule 14a-8, wish to present proposals for inclusion in the financial,
accounting and other information discussed with or reviewedproxy materials to be distributed by us and have
assumed such accuracy and completeness for purposes
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Special Committee of the Board of Directors
BancWest Corporation
May 8, 2001
Page 2
of rendering this opinion. In that regard, we have assumed, with your consent,
that the financial forecasts provided to us were reasonably prepared on a basis
reflecting the best currently available judgments and estimates of the Company.
In addition, we have not made an independent evaluation or appraisal of the
assets and liabilities of the Company (including off-balance sheet assets and
liabilities), and we have not been furnished with any such evaluation or
appraisal. We note that BNP owns 45% of the outstanding capital stock of the
Company and has expressed no interest in a business combination involving the
Company other than a transaction as a purchaser of Shares. Our advisory services
and the opinion expressed herein are provided for the information and assistance
of the Special Committee of the Board of Directors of the Company in connection with its considerationour 2018 Annual Meeting of the transaction contemplatedStockholders must submit their proposals by the Agreementcertified mail, return receipt requested, and such
opinion does not constitute a recommendation as to how any holder of Shares
should vote with respect to such transaction.
Based upon and subject to the foregoing and based upon such other matters
as we consider relevant, it is our opinion that as of the date hereof the $35.00
per Share in cash tomust be received by the holdersCorporate Secretary at our principal offices in Honolulu, Hawaii on or before November 22, 2017, to be eligible for inclusion in our proxy statement and proxy card relating to that meeting. In the event that we hold our 2018 Annual Meeting of Shares pursuant toStockholders more than 30 days before or after the Agreement is fair from a financial point of view to such holders.
Very truly yours,
/s/ GOLDMAN, SACHS & CO.
(GOLDMAN, SACHS & CO.)
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ANNEX C
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
SECTION 262. APPRAISAL RIGHTS.
(a) Any stockholder of a corporation of this State who holds shares of
stock on theone-year anniversary date of the making of a demand pursuantAnnual Meeting, we will disclose the new deadline by which stockholders' proposals must be received in our earliest possible Quarterly Report on Form 10-Q or, if impracticable, by any means reasonably calculated to subsection (d) of this
section with respect to such shares, who continuously holds such shares throughinform stockholders. As the effective daterules of the merger or consolidation, who has otherwise compliedSEC make clear, simply submitting a proposal does not guarantee its inclusion.
In accordance with subsection (d)the Company's Bylaws, proposals of this section and who has neither voted in favorstockholders intended to be presented at the 2018 Annual Meeting of the
merger or consolidation nor consented thereto in writing pursuant to sec. 228 of
this title shallStockholders (other than director nominations) must be entitled to an appraisalreceived by the Court of Chancery of the
fair value of the stockholder's shares of stock under the circumstances
described in subsections (b) and (c) of this section. As used in this section,
the word "stockholder" means a holder of record of stock in a stock corporation
and also a member of record of a nonstock corporation; the words "stock" and
"share" mean and include what is ordinarily meant by those words and also
membership or membership interest of a member of a nonstock corporation; and the
words "depository receipt" mean a receipt or other instrument issued by a
depository representing an interest in one or more shares, or fractions thereof,
solely of stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to sec. 251 (otherCompany's Secretary no later than a merger effected pursuant to
sec. 251(g) of this title), sec. 252, sec. 254, sec. 257, sec. 258, sec. 263 or
sec. 264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by moreJanuary 26, 2018, nor earlier than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of sec. 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to
sec.sec. 251, 252, 254, 257, 258, 263 and 264 of this title to accept for
such stock anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a, b and c of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under sec. 253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
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(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsections (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of such
stockholder's shares shall deliver to the corporation, before the taking of
the vote on the merger or consolidation, a written demand for appraisal of
such stockholder's shares. Such demand will be sufficient if it reasonably
informs the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such stockholder's
shares. A proxy or vote against the merger or consolidation shall not
constitute such a demand. A stockholder electing to take such action must
do so by a separate written demand as herein provided. Within 10 days after
the effective date of such merger or consolidation, the surviving or
resulting corporation shall notify each stockholder of each constituent
corporation who has complied with this subsection and has not voted in
favor of or consented to the merger or consolidation of the date that the
merger or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to sec.228 or
sec.253 of this title, then, either a constituent corporation before the
effective date of the merger or consolidation, or the surviving or
resulting corporation within ten days thereafter, shall notify each of the
holders of any class or series of stock of such constituent corporation who
are entitled to appraisal rights of the approval of the merger or
consolidation and that appraisal rights are available for any or all shares
of such class or series of stock of such constituent corporation, and shall
include in such notice a copy of this section. Such notice may, and, if
given on or after the effective date of the merger or consolidation, shall,
also notify such stockholders of the effective date of the merger or
consolidation. Any stockholder entitled to appraisal rights may, within 20
days after the date of mailing of such notice, demand in writing from the
surviving or resulting corporation the appraisal of such holder's shares.
Such demand will be sufficient if it reasonably informs the corporation of
the identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date that shall be
not more than 10 days prior to the date the notice is given,December 27, 2017 provided that if the 2018 Annual Meeting is held more than 30 days before, or 60 days after, April 26, 2018, such notice ismust be given on or afterby the effective datelater of the merger or
consolidation, the record date shall be such effective date. If no record
date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the date 90 days prior to the meeting date or the tenth day next precedingfollowing the day on whichdate the noticemeeting date is given.
(e) Within 120 days afterfirst publicly announced or disclosed.
Furthermore, in order for any stockholder to properly propose any business for consideration at the effective date2018 Annual Meeting, including the nomination of any person for election as a director, or any other matter raised other than pursuant to Rule 14a-8 of the merger or
consolidation,proxy rules adopted under the surviving or resulting corporation or any stockholder who has
compliedExchange Act, written notice of the stockholder's intention to make such proposal must be furnished to the Company in accordance with, subsections (a) and (d) hereof and whoincluding such information required by, the Company's Bylaws. A copy of the Company's Bylaws is otherwise
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entitledavailable on our website at www.fhb.com.
The Governance Committee considers nominees recommended by stockholders as candidates for election to appraisal rights, may file a petitionthe Board using the same criteria as candidates selected by the Governance Committee discussed in the Courtsection entitled "Proposal No. 1—Election of Chancery
demandingDirectors." A stockholder wishing to nominate a determinationcandidate for election to the Board at an annual meeting is required to give written notice to the Company's Secretary of his or her intention to make a nomination in accordance with the valuerequirements contained in the Company's Bylaws. Pursuant to the Company's Bylaws, notice of director nominations to be presented at the stock2018 Annual Meeting of all such stockholders.
NotwithstandingStockholders must be received by the foregoing, at any time withinCompany's Secretary no later than January 26, 2018, nor earlier than December 27, 2017 provided that if the 2018 Annual Meeting of Stockholders is held more than 30 days before, or 60 days after, April 26, 2018, such notice must be given by the effective
datelater of the mergerclose of business on the date 90 days prior to the meeting date or consolidation,the tenth day following the date the meeting date is first publicly announced or disclosed. If the number of directors to be elected to the Board is increased and either all of the nominees for director or the size of the increased Board is not publicly announced or disclosed by the Company at least 100 days prior to the first anniversary of the preceding year's annual meeting, notice of any stockholder nominees to serve as directors for any newly created positions resulting from the increased size may be delivered to the Company's Secretary no later than the close of business on the tenth day following the first date all of such nominees or the size of the increased Board shall have the right to
withdraw such stockholder's demand for appraisal and to accept the terms offered
upon the mergerbeen publicly announced or consolidation. Within 120 days after the effective datedisclosed. A copy of the merger or consolidation, any stockholder who has compliedCompany's Bylaws is available on our website at www.fhb.com.
DISTRIBUTION OF CERTAIN DOCUMENTS
This Proxy Statement and our 2016 Annual Report to Stockholders are available at www.fhb.com.
The Annual Report of First Hawaiian, Inc. for the fiscal year ended December 31, 2016 (the "2016 Annual Report"), which includes our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, is being made available with this Proxy Statement to our stockholders. Stockholders are referred to the 2016 Annual Report for financial and other information about us. The 2016 Annual Report is not a part of this Proxy Statement. This Proxy Statement and the 2016 Annual Report are also available on our website at http://proxy.fhb.com.
We are required to file annual, quarterly and current reports, proxy statements and other reports with the requirementsSEC. Copies of subsections (a)these filings are available through our website at www.fhb.com or the SEC's website at www.sec.gov. We will furnish copies of our SEC filings (without exhibits), including this Proxy Statement, the 2016 Annual Report and (d) hereof,our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, without charge to any stockholder upon written request shall be
entitledor verbal request to receive from the corporation surviving the merger or resulting from
the consolidation a statement setting forth the aggregate number of shares not
voted in favorour Company's Corporate Secretary at First Hawaiian, Inc., 999 Bishop Street, Honolulu, Hawaii 96813.
| By order of the Board of Directors, | ||
| ||
| Joel E. Rappoport | ||
| Executive Vice President, General Counsel and Secretary |
A copy of the merger or consolidation andCompany's 2016 Annual Report as filed with respect to which demands
for appraisal have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the stockholder within 10 days
after such stockholder's written request for such a statementSEC is received by the
surviving or resulting corporation or within 10 days after expirationbeing furnished together with this Proxy Statement. The Company's 2016 Annual Report does not form any part of the periodmaterial for deliverythe solicitation of demandsproxies.
- 0 FIRST HAWAIIAN, INC. Proxy for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filingAnnual meeting of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the officestockholders on April 26, 2017 solicited on Behalf of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addressesBoard of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by publication
shall be approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted
such stockholder's certificates of stock to the Register in Chancery, if such is
required, may participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal rights under this
section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation is a corporation of this State or of any state.
C-3
128
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the effective date of the merger or consolidation); provided, however, that
if no petition for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder shall deliver to the
surviving or resulting corporation a written withdrawal of such stockholder's
demand for an appraisal and an acceptance of the merger or consolidation, either
within 60 days after the effective date of the merger or consolidation as
provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court
of Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court deems
just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
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PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
BANCWEST CORPORATION
SPECIAL MEETING - 2001directors The undersigned stockholder hereby appoints Dr. Julia Ann Frohlich,
John A. HoagMatthew Cox, W. Allen Doane and Robert A. Fuhrman,Allen B. Uyeda, and each of them, each with full power of substitution and power to act alone, as proxies to vote all the proxies and attorneys-in-factshares of Common Stock which the undersigned would be entitled to attendvote if personally present and acting at the SpecialAnnual Meeting of Stockholders of BANCWEST CORPORATION (the "Corporation")First Hawaiian, Inc., to be held on September , 2001April 26, 2017 at 9:8:00 a.m., Hawaiian Standard Time, in the Board
Room, 30th Floor, First Hawaiian Center, local time at The Bankers Club, 999 Bishop Street, 30th Floor, Honolulu, Hawaii, and at any adjournments or postponements thereof, as follows: (continued and to votebe signed on the reverse side.) 14475 1.1
ANNUAL meeTiNG oF sTocKhoLdeRs oF FiRsT hAWAiiAN, iNc. April 26, 2017 8:00 a.m. Go GReeN e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access. NoTice oF iNTeRNeT AvAiLABiLiTY oF PRoXY mATeRiAL: The Notice of Meeting, proxy statement and proxy card are available at said meeting and
any adjournments or postponements thereof all shares of stock of the Corporation
standing in the name of the undersigned stockholder.
This proxy is solicited on behalf of the board of directors. This
proxy, when properly executed, will be voted in a manner directed herein by the
undersigned stockholder. If no direction is made, the proxy will be voted FOR
proposals 1 and 2 and in the judgment of the persons named herein on any other
matter which may properly come before the meeting or any adjournments or
postponements of the special meeting.
(Continued and To Be Dated and Signed On The Other Side)
- --------------------------------------------------------------------------------
SPECIAL MEETING OF STOCKHOLDERS OF
BANCWEST CORPORATION
, 2001
-----------------------------
PROXY VOTING INSTRUCTIONS
-----------------------------
TO VOTE BY MAIL
- --------------http://proxy.fhb.com Please sign, date sign and mail your proxy card in the envelope provided as soon as possible. Please detach along perforated line and mail in the envelope provided. 20930000000000001000 2 042617 properly come before the Annual Meeting. At the present time, the Board of Directors revocable and, when properly executed, will be voted as directed herein by the NomiNees in Proposal 1 and FoR Proposal 2. This proxy also confers discretionary the conduct of the Annual Meeting. changes to the registered name(s) on the account may not be submitted via Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. The BoARd oF diRecToRs RecommeNds A voTe "FoR" ALL The NomiNees LisTed ANd "FoR" PRoPosAL 2. PLeAse siGN, dATe ANd ReTURN PRomPTLY iN The eNcLosed eNveLoPe. PLeAse mARK YoUR voTe iN BLUe oR BLAcK iNK As shoWN heRe x 1. Election of Directors: NomiNees: FOR ALL NOMINEESO Matthew Cox O W. Allen Doane WITHHOLD AUTHORITYO Thibault Fulconis FOR ALL NOMINEESO Gérard Gil O Jean-Milan Givadinovitch FOR ALL EXCEPTO Robert S. Harrison (See instructions below)O J. Michael Shepherd O Allen B. Uyeda O Michel Vial INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: FOR AGAINST ABSTAIN 2. Ratification of the appointment of Deloitte and Touche LLP to serve as the independent registered public accounting firm for the year ending December 31, 2017. In their discretion, the proxies are authorized to vote upon such other business as may knows of no other business to be presented at the Annual Meeting. This proxy is undersigned stockholder. if no direction is made, this proxy will be voted FoR ALL authority to vote (1) with respect to the election of any person as director, where the nominee is unable to serve or for good cause will not serve and (2) on matters incident to MARK“X” HERE IF YOU PLAN TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)ATTEND THE MEETING. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that this method. Signature of Stockholder Date: Signature of StockholderDate:
ANNUAL meeTiNG oF sTocKhoLdeRs oF FiRsT hAWAiiAN, April 26, 2017 8:00 a.m. iNc. iNTeRNeT - --------------
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"Access “www.voteproxy.com” and follow the on-screen instructions.instructions or scan the QR code with your smartphone. Have your control numberproxy card available when you access the web page. YOUR CONTROL NUMBER IS --
* Please Detach and MailTeLePhoNe - Call toll-free 1-800-PRoXies (1-800-776-9437) in the Envelope Provided *United States or 1-718-921-8500 from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call. Vote online/phone until 11:59 PMESTthe day before the meeting. mAiL - -----------------------------------------------------------
130
[X]Sign, date and mail your proxy card in the envelope provided as soon as possible. iNPeRsoN - You may vote your shares in person by attending the Annual Meeting. Go GReeN - e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access. Please mark your votesdetach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. 20930000000000001000 2 042617 ending December 31, 2017. O Matthew Cox FOR ALL NOMINEES properly come before the Annual Meeting. At the present time, the Board of Directors revocable and, when properly executed, will be voted as directed herein by the NomiNees in this example.
The board of directorsProposal 1 and FoR Proposal 2. This proxy also confers discretionary the conduct of the Corporation recommendsAnnual Meeting. changes to the registered name(s) on the account may not be submitted via Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. The BoARd oF diRecToRs RecommeNds A voTe "FoR" ALL The NomiNees LisTed ANd "FoR" PRoPosAL 2. PLeAse siGN, dATe ANd ReTURN PRomPTLY iN The eNcLosed eNveLoPe. PLeAse mARK YoUR voTe iN BLUe oR BLAcK iNK As shoWN heRe x 1. Election of Directors: NomiNees: O W. Allen Doane WITHHOLD AUTHORITYO Thibault Fulconis FOR ALL NOMINEESO Gérard Gil O Jean-Milan Givadinovitch FOR ALL EXCEPTO Robert S. Harrison (See instructions below)O J. Michael Shepherd O Allen B. Uyeda O Michel Vial INSTRUCTIONS: To withhold authority to vote for adoption ofany individual nominee(s), mark “FOR ALL EXCEPT” and fill in the Agreement and Plan of Merger.
1. Proposalcircle next to adopt the Agreement andeach nominee you wish to withhold, as shown here: FOR AGAINST ABSTAIN Plan2. Ratification of Merger, dated asthe appointment of May 8, 2001, [_] [_] [_]
as AmendedDeloitte and Restated as of July 19, 2001,
among BancWest Corporation, BNP
Paribas and Chauchat L.L.C.,Touche LLP to serve as the Merger
Agreementindependent registered public accounting firm for the year In their discretion, the proxies are authorized to vote upon such other business as may knows of no other business to be further amended from
time to time.
2. Proposal to adjournpresented at the special meeting, FOR AGAINST ABSTAINAnnual Meeting. This proxy is undersigned stockholder. if necessary, to solicit additional votes [_] [_] [_]
in favor of adoption of the Merger Agreement.
Please mark, sign, date and returnno direction is made, this proxy card promptly, usingwill be voted FoR ALL authority to vote (1) with respect to the enclosed
envelope.
SIGNATURE DATE SIGNATURE DATE
- --------------- --------- -------------- -----------
NOTE: Stockholder(s) should sign above exactlyelection of any person as name(s) appear(s) hereon, but
minor discrepancies in such signaturesdirector, where the nominee is unable to serve or for good cause will not invalidateserve and (2) on matters incident to MARK“X” HERE IF YOU PLAN TO ATTEND THE MEETING. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that this proxy. If
more than one stockholder, all should sign.
method. Signature of Stockholder Date: Signature of StockholderDate: NoTice oF iNTeRNeT AvAiLABiLiTY oF PRoXY mATeRiAL: The Notice of Meeting, proxy statement and proxy card are available at http://proxy.fhb.com comPANY NUmBeR AccoUNT NUmBeR PRoXY voTiNG iNsTRUcTioNs
