UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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Golden West Financial Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
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EDGARLink 7.0 (8/00) Ver. 3.1
[LOGO]
GOLDEN WEST
FINANCIAL CORPORATION
1901 HARRISON STREET, OAKLAND, CALIFORNIA 94612
March 12, 2001
Dear Stockholder:
The Annual Meeting of Stockholders of Golden West Financial Corporation will
be held May 1, 2001, commencing at 11:00 a.m. on the fourth floor of the
Company's headquarters located at 1901 Harrison Street, Oakland, California. The
Management and Directors of Golden West Financial Corporation look forward to
meeting with you at that time.
Attached to this letter is the formal notice of meeting and proxy statement.
We urge you to complete and return the enclosed proxy immediately. A prepaid
return envelope is provided for that purpose. If you attend the meeting, you may
withdraw your previously mailed proxy and vote at the meeting.
Sincerely yours,
/s/ Herbert M. Sandler /s/ Marion O. Sandler
HERBERT M. SANDLER MARION O. SANDLER
Chairman of the Board and Chairman of the Board and
Chief Executive Officer Chief Executive Officer
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF
GOLDEN WEST FINANCIAL CORPORATION
The Annual Meeting of Stockholders of Golden West Financial Corporation (the
"Company") will be held on the fourth floor of the Company's headquarters
located at 1901 Harrison Street, Oakland, California on Tuesday, May 1, 2001,
commencing at 11:00 a.m., for the following purposes:
(1) To elect three members of the Board of Directors to hold office for
three-year terms and until their successors are duly elected and
qualified;
(2) To ratify the selection of independent auditors; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on March 5, 2001 has been fixed as the record date for
the determination of stockholders entitled to notice of and to vote at this
meeting or any adjournment thereof. A list of such stockholders will be
available at the time and place of the meeting and, during ten days prior to the
meeting, at the office of the Secretary of Golden West Financial Corporation,
1901 Harrison Street, Oakland, California.
By order of the Board of Directors
/s/ Michael Roster
MICHAEL ROSTER
Executive Vice President and Secretary
March 12, 2001
IMPORTANT: We want to assure that you are represented at the meeting. Please
complete, date, sign and mail the enclosed proxy promptly in the
return envelope, which we have provided.
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Directors of Golden
West Financial Corporation (the "Company") to be used at the Annual Meeting of
Stockholders on May 1, 2001 ("Annual Meeting") for the purposes set forth in the
foregoing notice. Any stockholder may revoke his or her proxy at any time prior
to exercise by filing with the Secretary of the Company a written revocation or
duly executed proxy bearing a later date, or upon request if such stockholder is
present at the meeting and chooses to vote in person.
The expense of soliciting proxies will be paid by the Company. Proxies may be
solicited by regular employees of the Company either in person or by telephone
or other electronic media, and the Company will upon request reimburse persons
holding shares in their names, or in the names of their nominees, but not owning
the shares beneficially, for reasonable expenses of forwarding proxy materials
to their principals.
The principal executive offices of the Company are located at 1901 Harrison
Street, Oakland, California 94612. This proxy statement and the enclosed proxy
are being sent or given to stockholders commencing March 12, 2001.
VOTING SECURITIES
Only stockholders of record on the books of the Company at the close of
business on March 5, 2001 ("Record Date") will be entitled to vote at the Annual
Meeting. On the Record Date there were outstanding 158,503,537 shares of
Common Stock of the Company, $.10 par value. Stockholders are entitled to one
vote for each share held except that, in the election of Directors, each
stockholder has cumulative voting rights and is entitled to as many votes as
equal the number of shares held by such stockholder multiplied by the number of
Directors to be elected (three), which votes may be cast for a single candidate
or distributed among any or all candidates as such stockholder sees fit. The
three candidates for Director receiving the highest number of votes shall be
elected. Consistent with Delaware law, abstentions and broker non-votes will not
be counted, except that shares owned by stockholders submitting signed proxies
will be counted for the purpose of determining whether a quorum of stockholders
is present at the Annual Meeting.
ELECTION OF DIRECTORS
Pursuant to Article Seventh of the Company's Certificate of Incorporation,
the Board of Directors is divided into three classes. Each class of Directors
consists of three Directors. The second class of Directors is being elected at
the 2001 Annual Meeting and will serve until the 2004 Annual Meeting. The third
class of Directors will serve until the 2002 Annual Meeting and the first class
of Directors will serve until the 2003 Annual Meeting.
Three Directors are to be elected at the 2001 Annual Meeting. Patricia A.
King, Marion O. Sandler and Leslie Tang Schilling are nominees for Directors.
All three nominees were elected Directors by a vote of the stockholders at the
1998 Annual Meeting of Stockholders.
In the absence of instructions to the contrary, shares represented by the
enclosed proxy will be voted FOR the election of the above nominees to the Board
of Directors. If any of such persons are unable or unwilling to be nominated for
the office of Director at the date of the Annual Meeting, or any adjournment
thereof, the proxy holders will vote for such substitute nominees as the
Company's Board of Directors may propose. The management of the Company has no
reason to believe that any of such nominees will be unable or unwilling to serve
if elected a Director. Notwithstanding the foregoing, if one or more persons
other than those named above are nominated as candidates for the office of
Director, the proxy holders may cumulate votes and the enclosed proxy may be
voted in favor of any one or more of the nominees named above, to the exclusion
of others, and in such order of preference as the proxy holders may determine in
their discretion.
Set forth below is certain information concerning the nominees and the
members of the Board of Directors who will continue in office after the 2001
Annual Meeting:
Common Stock
Beneficially Owned as of
February 28, 2001(1)
------------------------
Continuing Directors and Business Experience Served as
Nominees for Director During Past Five Years Director Number Percent
(Class) and Other Information Since Age of Shares of Class
- ------------------------ ------------------------- -------- ------ ------------ --------
Maryellen Cattani Attorney-at-Law (2) 1996 57 6,000 --
Herringer(I)
Louis J. Galen (III) Retired (Since 1982)Company 1959 75 3,464,344(3) 2.2%
Officer,Private Investor
Antonia Hernandez (III) President and General 1995 53 3,660 --
Counsel of The Mexican
American Legal Defense
and Educational Fund
Patricia A. King (II) Professor of Law, 1994 58 450 --
Georgetown University,
Washington, DC; Adjunct
Professor, Department of
Health Policy and
Management, School of
Hygiene and Public Health,
Johns Hopkins University
Bernard A. Osher (III) Private investor 1970 73 8,061,450 5.0%
Kenneth T. Rosen (I) Professor of Business 1984 52 9,000 --
Administration, Haas School
of Business; Chairman of
the Fisher Center for Real
Estate and Urban Economics,
University of California,
Berkeley
Herbert M. Sandler (I)(4) Chairman of the Board and 1963 69 15,692,005(5)(6) 9.8%
Chief Executive Officer of
the Company, World Savings
Bank, FSB, and World
Savings Bank, FSB (Texas)
Marion O. Sandler (II)(4) Chairman of the Board and 1963 70 16,849,225(5)(7) 10.5%
Chief Executive Officer of
the Company, World Savings
Bank, FSB, and World
Savings Bank, FSB (Texas)
Leslie Tang Schilling (II) President of L.T.D.D., Inc. 1996 46 3,005 --
and Chairperson of Union
Square Investment Company(8)
All Directors and officers as a group(14 persons) 30,369,454(9) 19.0%
- --------------------
(1) Held directly with sole voting and investment powers unless otherwise
noted, subject to community property laws where applicable.
(2) Ms. Cattani Herringer is a member of the Board of Directors of ABM
Industries Incorporated.
(3) Includes 3,163,744 shares held in trust by Mr.Galen with sole voting and
investment powers. Also includes 88,500 shares, with shared voting and
investment powers, held in a charitable trust for which Mr. Galen is
trustee.
(4) Member of the Executive Committee.
(5) Includes for both Herbert M. Sandler and Marion O. Sandler, husband and
wife, 15,171,805 shares, with shared voting and investment powers, held
jointly by Mr. and Mrs. Sandler, as co-trustees.
(6) Includes for Herbert M. Sandler 2,700 shares with voting and investment
powers in trust for the benefit of his sister-in-law, 489,624 shares with
shared voting and investment powers held in trusts for the benefit of Mr.
and Mrs. Sandler's descendants with Mr. and Mrs. Sandler as co-trustees,
and 517,500 shares which Mr. Sandler may acquire upon exercise of employee
stock options exercisable on February 28, 2001, or within 60 days
thereafter.
(7) Includes for Marion O. Sandler 90,180 shares with voting and investment
powers in trust for the benefit of herself and descendants, 1,069,740
shares with voting and investment powers held in trusts for the benefit of
Mr.and Mrs. Sandler's descendants, 489,624 shares with shared voting and
investment powers held in trusts for the benefit of Mr.and Mrs. Sandler's
descendants with Mr. and Mrs. Sandler as co-trustees, and 517,500 shares
which Mrs. Sandler may acquire upon exercise of employee stock options
exercisable on February 28, 2001, or within 60 days thereafter.
(8) Leslie Tang Schilling is a member of the Board of Directors of Tristate
Holdings, Ltd.
(9) Includes 17,573,630 shares as to which officers and Directors share with
others voting and/or investment powers. Also includes 1,507,750 shares,
which certain officers may acquire upon the exercise of employee stock
options exercisable on February 28, 2001, or within 60 days thereafter.
The continuing Directors and nominees for elections as Directors have had
the principal occupations or employments set forth in the foregoing table for at
least the past five years, except for: Maryellen Cattani Herringer, who was
Executive Vice President, General Counsel and Secretary of APL, Ltd., a shipping
company, until December 1997; and Bernard A. Osher who until October 1999 was
Chairman of Butterfield and Butterfield, Auctioneers.
Herbert M. Sandler and Marion O. Sandler are husband and wife. Bernard A.
Osher is the brother of Mrs. Sandler. Herbert M. Sandler, Marion O. Sandler and
Bernard A. Osher may be deemed to be "control" persons of the Company, within
the meaning of the General Rules and Regulations adopted by the Securities and
Exchange Commission under the Securities Exchange Act of 1934. The business
address for Mr. and Mrs. Sandler is 1901 Harrison Street, Oakland, California
94612. The business address for Mr. Osher is 909 Montgomery Street, Suite 300,
San Francisco, California 94133.
During 2000, the Company's Board of Directors held four meetings. The Board
of Directors has standing Nominating, Audit, Compensation and Stock Option
Committees. The members of the Nominating Committee in 2000 were Maryellen
Cattani Herringer, Louis J. Galen and Antonia Hernandez. The Nominating
Committee's principal function is to identify and propose to the Board qualified
individuals as potential candidates for the position of Director. The Nominating
Committee does not consider recommendations from stockholders for nominations
for Director. The Nominating Committee met once during 2000. The members of the
Audit Committee in 2000 were Maryellen Cattani Herringer, Louis J. Galen and
Kenneth T. Rosen. The Audit Committee members are independent as defined in
Section 303.01 (B)(2)(a) and (3) of the New York Stock Exchange listing
standards. The principal function of the Audit Committee is to assist the Board
of Directors in overseeing the corporate financial reporting process and the
internal and external audits of the Company. The Audit Committee held four
meetings of its members during 2000. The report of the Audit Committee is set
forth below:
Report of the Audit Committee
The Audit Committee reviews the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for
the financial statements and the reporting process. The Company's independent
auditors are responsible for expressing an opinion on the conformity of our
audited financial statements to accounting principles generally accepted in the
United States of America.
In this context, the Audit Committee has reviewed and discussed with
management and the independent auditors the audited financial statements. The
Audit Committee has discussed with the independent auditors the matters required
to be discussed by Statement on Auditing Standards No. 61 (Communication with
Audit Committees). In addition the Audit Committee has received from the
independent auditors the written disclosures and letter required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees)
and discussed with them their independence from the Company and its management.
In addition, the Audit Committee has considered whether the independent
auditor's provision of non-audit services to the Company is compatible with the
auditor's independence.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board has approved,
that the audited financial statements be included in the Company's Annual Report
on SEC Form 10-K for the year ended December 31, 2000, for filing with the
Securities and Exchange Commission.
Submitted by the Audit Committee
Kenneth T. Rosen
Maryellen Cattani Herringer
Louis J. Galen
On July 20, 2000, the Audit Committee adopted an Audit Committee Charter
in the form attached hereto as Appendix A.
Compensation Committee Report on Executive Compensation
The members of the Compensation and Stock Option Committees in 2000 were
Patricia A. King, Kenneth T. Rosen and Leslie Tang Schilling. The Compensation
Committee met twice during 2000. The report of the Compensation Committee is set
forth below:
To the Board of Directors:
The Compensation Committee's primary functions are to review, and to
recommend for review by the Board of Directors, the salaries and other
compensation of the Company's senior executive officers, and to administer the
Company's Annual Incentive Bonus Plan (the "Incentive Plan"). The Compensation
Committee also serves as the Company's stock option committee, and in that
capacity approves the grants of stock options pursuant to the Company's Stock
Option Plan, including grants of stock options to executive officers of the
Company.
The Compensation Committee met in February 2000 (a) to review and recommend
to the Board of Directors the salaries of the Company's chief executive officers
(the "Chief Executive Officers") for 2000 and (b) to determine the incentive
awards payable to the Chief Executive Officers under the terms of the Incentive
Plan for the Company's 1999 performance. Incentive awards payable under the
Incentive Plan are tied to specific Company performance criteria. In April 2000,
the Committee met (i) to set performance criteria under the Incentive Plan for
2000, and (ii) to recommend to the Board of Directors salaries, for the period
from May 1, 2000 through April 30, 2001 for the Company's President and Senior
Executive Vice President (together with the Chief Executive Officers, the
"Senior Executive Officers"). In February 2001, the Committee met (a) to certify
the Company's 2000 performance under the Incentive Plan and (b) to determine the
amount of awards payable to the Chief Executive Officers for 2000.
The cash compensation of the Company's other executive officers was
determined through normal annual reviews by their respective managers, who
included one or more of the Chief Executive Officers, the President or the
Senior Executive Vice President. The compensation of each such officer was
determined in such reviews according to the officer's individual performance in
such officer's area of responsibility and the manager's assessment of the
officer's contribution to the performance of the Company.
Compensation Goals and Criteria
The Committee's goals were to provide compensation that (a) reflects both
the Company's and the executives' performance; (b) compares reasonably with
compensation in the relevant market; and (c) attracts and retains high quality
executives. In evaluating compensation for the Senior Executive Officers, the
Committee compared the Company's performance, according to the criteria set
forth below, to the performance of a peer group, and the compensation of the
Company's Senior Executive Officers to the compensation of executives in the
peer group. The Committee selected a peer group consisting of the top performing
regional bank holding companies with between $30 billion and $75 billion in
assets as of December 31, 1999 and a primary bank operating subsidiary with a
rating from Moody's of A1 or better and from Standard and Poor's of A+ or better
(Bank of New York Corp., Fifth Third Bancorp, Mellon Bank Corp., Northern Trust
Corp., Regions Financial Corp., and Wachovia Corp.), and the nation's largest
savings and loan holding company (Washington Mutual).
The criteria according to which the Committee compared the performance of
the Company to the peers included the following: total assets; year-end stock
prices; net earnings; fully-diluted net income per share; return on average
assets; return on average equity; capital levels; the ratio of non-performing
assets ("NPAs") and troubled debt restructured ("TDRs") to period-end loans; the
ratio of net charge-offs to average loans and leases; loan loss coverage; the
ratio of general and administrative expenses ("G&A") to interest income and
other income; the ratio of non-interest expenses to pretax earnings; and the
ratio of pretax earnings to net interest income and non-interest income.
Additional factors considered by the Committee in evaluating compensation
included: compliance with long-term plans and budgets; attainment of regulatory
examination ratings by the Company and its operating subsidiaries, World Savings
Bank, FSB, World Savings and Loan Association (now merged with World Savings
Bank, FSB) and World Savings Bank, FSB (Texas); attainment of regulatory capital
standards by the operating subsidiaries; strategic accomplishments of the
Company; and the general assessment of the executives by peers, equity analysts
and others.
With respect to total compensation, the Committee considered annual
compensation of the Company's Senior Executive Officers relative to executives
in the peer group for the period 1997 through 1999, including: (i) salary,
bonuses and other forms of cash compensation; and (ii) equity-based
compensation, including restricted stock and stock options. The Committee
concluded that while exact comparisons could not be made, the compensation of
the Company's Senior Executive Officers was reasonable in light of the Company's
performance and the compensation of peer group executives.
Tax Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code limits the federal income tax
deductibility of compensation paid to the Company's two Chief Executive Officers
and to each of the other three most highly compensated executive officers. The
Company generally may deduct compensation paid to an executive officer only to
the extent that any such compensation in excess of $1 million during the
relevant fiscal year is based on the attainment of performance goals determined
by a compensation committee of the board of directors. The Incentive Plan, which
is designed to assure that certain cash compensation is "performance-based" and
therefore deductible, was approved at the 1997 Annual Meeting. Non-qualified
stock options granted under the Company's Stock Option Plan qualify as
"performance-based" under Section 162(m). Even without the provisions of Section
162(m), however, incentive stock options granted under the Company's Stock
Option Plan generally would not entitle the Company to a tax deduction.
2000 Compensation for the Chief Executive Officers
In April 2000, the Committee established performance standards and targets
for 2000. The performance standards upon which the targets were based included
Return on Average Assets, Return of Average Equity, Diluted Earnings Per Share,
General and Administrative Expenses to Average Assets and Nonperforming Assets
to Total Assets. In February 2001, the Committee met to certify the Company's
2000 performance under the Incentive Plan and to determine the amount of awards
payable to the Chief Executive Officers for 2000. At that time, the Compensation
Committee also reviewed the salaries of the Company's Chief Executive Officers
and determined that the current salaries were appropriate in light of the
Company's performance and the existence of the Incentive Plan. With respect to
the Incentive Plan, during the year ended December 31, 2000 (the "2000 Plan
Year"), the Company met or exceeded the performance targets established by the
Committee at the beginning of the 2000 Plan Year. As a result of the Company's
performance during the 2000 Plan Year, the Committee confirmed an award under
the Incentive Plan to each Chief Executive Officer in the amount of $236,500.
COMPENSATION COMMITTEE
Patricia A. King, Chair
Kenneth T. Rosen
Leslie Tang Schilling
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and Directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC").
Based solely on the Company's review of such reports and written
representations from certain persons that certain of such reports were not
required to be filed by such persons, no officer, Director or person who owns
more than ten percent of a registered class of the Company's equity securities
failed to file on a timely basis reports required by Section 16(a) of the
Securities Exchange Act of 1934 during the year ended December 31, 2000, except
that, with respect to James T. Judd, due to an administrative oversight, neither
a Form 4 nor a Form 5 were filed in a timely manner for the sale of 17,130
shares of stock in September 1997.
Securities Ownership of Certain Beneficial Owners and Management
The following table sets forth the beneficial ownership, as of the dates
indicated, of each stockholder other than Herbert M. Sandler, Marion O. Sandler
and Bernard A. Osher, known to the Company to be the beneficial owner of more
than 5% of the Company's Common Stock. The table also sets forth the beneficial
ownership, as of February 28, 2001, of each of the executive officers named in
the Summary Compensation Table located elsewhere in this proxy statement who are
not also Directors of the Company:
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership of Class
------------------------------------ -------------------- --------
Davis Selected Advisors, L.P........ 12,286,165(1) 7.8%
2949 East Elvira Road, Suite 101
Tucson, AZ 85706
Dodge & Cox, Incorporated........... 11,526,235(2) 7.3%
One Sansome Street, 35th Floor
San Francisco, CA 94104
Russell W. Kettell.................. 1,163,370(3) .7%
President and Treasurer of the Company
and Senior Executive Vice President of
World Savings Bank, FSB, and
World Savings Bank, FSB (Texas)
1901 Harrison Street
Oakland, CA 94612
James T. Judd....................... 201,050(3) .1%
Senior Executive Vice President
of the Company and President and
Chief Operating Officer of
World Savings Bank, FSB, and
World Savings Bank, FSB (Texas)
1901 Harrison Street
Oakland, CA 94612
- ----------------------
(1) Includes 12,286,165 shares with sole voting power, 12,286,165 shares with
sole disposition power, based upon SEC Schedule 13G dated February 14, 2001.
(2) Includes 11,526,235 shares with sole disposition power, 10,740,960 with sole
voting power and 99,200 with shared voting power, based upon SEC Schedule
13G dated February 14, 2000.
(3) Includes 257,100 and 151,050 shares, which Messrs. Kettell and Judd,
respectively, may acquire upon exercise of employee stock options
exercisable on February 28, 2001 or within 60 days thereafter.
EXECUTIVE COMPENSATION
Compensation of Executive Officers
The compensation paid to each of the two Chief Executive Officers and to the
three most highly compensated executive officers of the Company for services in
all capacities to the Company and its subsidiaries is set forth below:
SUMMARY COMPENSATION TABLE
For the Years Ended December 31, 2000, 1999, and 1998
Long Term
Annual Compensation Compensation
-------------------------------- ----------------------
Other Annual All Other
Compensation Options Compensation
Name and Principal Position Year Salary(A) Bonus(B) (C) (#)(E) (F)
- --------------------------- ------ --------- --------- ------------ --------- -----------
HERBERT M. SANDLER . . . . . . . . 2000 $950,004 $236,500 $23,067 120,000 $5,250
Chairman of the Board and Chief 1999 950,004 180,000 22,048 60,000 5,000
Executive Officer of the 1998 950,004 124,864 10,954 37,500 5,000
Company, World Savings Bank,
FSB, and World Savings Bank, FSB
(Texas)
MARION O. SANDLER . . . . . . . . 2000 950,004 236,500 15,629 120,000 5,250
Chairman of the Board and Chief 1999 950,004 180,000 16,737 60,000 5,000
Executive Officer of the 1998 950,004 124,864 13,408 37,500 5,000
Company, World Savings Bank,
FSB, and World Savings Bank, FSB
(Texas)
JAMES T. JUDD . . . . . . . . . . 2000 720,923 -- 25,439 120,000 5,250
Senior Executive Vice President 1999 668,312 -- 19,408 30,000 5,000
of the Company and President and 1998 636,484 -- 76,531(D) 30,000 5,284
Chief Operating Officer of World
Savings Bank, FSB, and World
Savings Bank, FSB (Texas)
RUSSELL W. KETTELL. . . . . . . . 2000 646,758 -- 12,738 120,000 5,250
President and Treasurer of the 1999 606,808 -- 11,867 30,000 5,000
Company and Senior Executive 1998 577,908 -- 12,002 30,000 6,336
Vice President of World Savings
Bank, FSB, and World Savings
Bank, FSB (Texas)
MICHAEL ROSTER . . . . . . . . . 2000 307,566 -- 359 75,000 5,250
Executive Vice President and 1999 -- -- -- -- --
General Counsel of the Company, 1998 -- -- -- -- --
World Savings Bank, FSB, and
World Savings Bank, FSB (Texas)
- -----------------------
(A) Amounts shown include cash compensation earned by executive officers.
(B) Amounts shown include cash compensation earned under the Company's
Incentive Plan.
(C) Amounts are for cash reimbursement for income taxes on account of certain
fringe benefits provided to such individuals.
(D) Includes $62,000 for cash reimbursement for moving expenses incurred during
1998.
(E) Options granted are under the Company's 1996 Stock Option Plan.
(F) Amounts shown in this column represent, primarily, Company contributions on
behalf of each of these officers to the Company's 401(K) plan, $5,250
(2000)and $5,000 (1999 and 1998).
Indebtedness of Management
The following table sets forth information relating to all loans made to
each individual who was a Director or officer of the Company during 2000:
Range of
Highest Unpaid Interest Rates
Indebtedness Balance as of from Jan.1, 2000
Name Since Dec.31, 1999 Feb.28, 2001 to Feb.28, 2001
----- ------------------ --------------- ------------------
Carl M. Andersen.... $178,284 $174,217 7.22% to 8.07%
277,295 272,391 6.07 to 6.92
William C. Nunan.... 278,297 269,326 5.77 to 6.62
All of the above loans are secured by first trust deeds on single-family
residences. Carl M. Andersen and William C. Nunan are Group Senior Vice
Presidents of the Company. Both officers hold their same titles with World
Savings Bank, FSB and World Savings Bank, FSB (Texas).
Deferred and Retirement Compensation
The Company has entered into deferred compensation agreements with certain
of the key employees of the Company and its subsidiaries, as selected by the
Office of the Chairman, including Messrs. Judd, Kettell and Roster.
The agreements provide for benefits payable in monthly installments over ten
years upon retirement at age 65 or upon the death of the employee (paid to his
beneficiary). The agreements contain vesting schedules that provide for full
vesting by ages ranging from 58 to 65, depending upon the age of the employee at
the time the agreement was executed. The vesting schedules provide that
one-third of the benefits vest during the first half of the vesting period and
two-thirds vest during the second half.
The annual installments payable upon retirement at age 65 or death to
Messrs. Judd, Kettell and Roster are $400,000, $375,000 and $200,000,
respectively. As of December 31, 2000, Messrs. Judd, Kettell and Roster had
accumulated vested benefits which would entitle them to annual installments
payable, as described above, of $355,500, $334,263 and $11,655, respectively.
During 2000, the following amounts under the agreements were vested for the
accounts of Messrs. Judd, Kettell and Roster, respectively: $333,300, $305,530
and $116,550. In addition, Mr. Judd has $400,000 in fully vested benefits
remaining from a separate deferred compensation agreement that originally
provided for an aggregate of 120 monthly installments of $8,333 each, to be paid
to him at his election.
The Company carries life insurance policies on the lives of these employees
in amounts estimated to be sufficient to cover its obligations under the
agreements. If assumptions as to mortality experiences, future policy dividends
and other factors are realized, the Company will recover an amount equal to all
retirement payments under the agreements, plus the premiums on the insurance
contracts and the interest that could have been earned on the use of the
retirement and premium payments.
Compensation of Directors
An annual retainer of $22,000, paid monthly, and a fee of $4,000 for each
Board of Directors meeting attended is paid to Directors who are not employees
of the Company. In addition, the Chairman of the Audit Committee receives a fee
of $1,500 per Audit Committee meeting attended and each of the other members of
the Audit Committee receives a fee of $1,250 for each Audit Committee meeting
attended.
Stock Options
Information concerning individual grants of stock options made to the two
Chief Executive Officers and to the three most highly compensated executive
officers of the Company during the year ended December 31, 2000 is set forth
below:
OPTION GRANTS TABLE
Option Grants for Year Ended December 31, 2000
Individual Grants (A)
--------------------------------------------- Potential Realizable
Value at Assumed Annual
% of Total Rates of Stock Price
Options Options Granted Exercise or Appreciation for Option Term
Granted to Employees in Base Price Expiration ----------------------------
Name (#) Fiscal Year ($/Share) Date 5% 10%
- ---- --------- --------------- -------- ---------- ---------- ----------
Herbert M. Sandler.... 120,000 8.7% $30.38 4/7/2010 $2,292,600 $5,809,800
Marion O. Sandler..... 120,000 8.7 30.38 4/7/2010 2,292,600 5,809,800
James T. Judd......... 120,000 8.7 30.38 4/7/2010 2,292,600 5,809,800
Russell W. Kettell.... 120,000 8.7 30.38 4/7/2010 2,292,600 5,809,800
Michael Roster........ 75,000 5.5 29.00 2/15/2010 1,368,000 3,466,500
- --------------------
(A) All options were granted with a per share exercise price equal to the fair
market value of a share of Company Common Stock on the date of grant. The
options become exercisable on the second anniversary of the grant date. The
Company did not grant any stock appreciation rights.
Information concerning exercises of stock options by these individuals
during the year ended December 31, 2000, and certain information concerning
unexercised stock options is set forth below:
OPTION EXERCISES AND YEAREND VALUE TABLE
Aggregated Option Exercises for the Year Ended December 31, 2000 and
December 31, 2000 Yearend Option Values
Number of Value of Unexercised
Unexercised Options at In-the-Money Options at
Shares December 31, 2000(#) December 31, 2000(B)
Acquired on Value -------------------------- ---------------------------
Name Exercise(#) Realized(A) Exercisable Unexercisable Exercisable Unexercisable
----------- ----------- ----------- ------------- ------------ -------------
Herbert M. Sandler.. 60,000 $1,302,500 457,500 180,000 $23,651,719 $6,656,250
Marion O. Sandler... 60,000 2,778,125 457,500 180,000 23,651,719 6,656,250
James T. Judd....... 67,500 2,975,000 127,500 150,000 6,167,187 5,555,625
Russell W. Kettell.. 20,400 985,450 227,100 150,000 11,540,887 5,555,625
Michael Roster...... 0 0 0 75,000 0 2,887,500
- --------------------
(A) Market value of underlying securities at exercise date less the option
price.
(B) Market value of unexercised "in-the-money" options at year-end less the
option price of such options.
Common Stock Performance Graph
The graph below compares the yearly change in the Company's cumulative total
stockholder return on its Common Stock for the five years ended December 31,
2000 with the cumulative total return, assuming reinvestment of dividends, of
each of the Standard & Poor's 500 Stock Index and the Standard & Poor's Major
Regional Bank Index. The returns of each component company of each index have
been weighted according to the stock market capitalization of the respective
company. Cumulative total stockholder return is measured by dividing (i) the sum
of (A) the cumulative amount of dividends for the measurement period, assuming
dividend reinvestment and (B) the difference between the Company's share price
at the beginning and the end of the measurement period by (ii) the share price
at the beginning of the measurement period.
TOTAL SHAREHOLDER RETURN PERFORMANCE GRAPH
[OBJECT OMITTED]
1995 1996 1997 1998 1999 2000
GOLDEN WEST FINANCIAL CORPORATION 100 115 179 169 186 378
S&P 500 INDEX 100 123 164 211 255 232
S&P MAJOR REGIONAL BANKS 100 137 205 227 195 249
Assumes $100 invested on December 31, 1995 in the stock of Golden West
Financial Corporation, S&P 500 Index and the S&P Major Regional Banks (weighted
by market capitalization). Total return assumes reinvestment of dividends.
APPROVAL OF AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP to serve as the
Company's independent auditors for the year ending December 31, 2001, subject to
stockholder approval. If the stockholders do not vote in favor of the
appointment of Deloitte & Touche LLP, the Board of Directors will consider the
selection of other auditors.
Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting of Stockholders and will be available to respond to appropriate
questions. They will be given the opportunity to make a statement, if they
desire to do so.
Deloitte & Touche LLP has served as the Company's independent auditors since
1963 and was selected by the Board of Directors to serve in 2000, which
selection was ratified and approved by the stockholders of the Company on May 2,
2000. In order to be adopted, the proposal to approve the appointment of
Deloitte & Touche LLP as auditors for the Company must be approved by the
holders of a majority of the outstanding shares of Common Stock present or
represented by proxy and entitled to vote at the meeting. The Board of Directors
recommends a vote FOR the appointment of Deloitte & Touche LLP to serve as the
Company's independent auditors for the year ending December 31, 2001.
Audit Fees
The Company's independent auditors, Deloitte & Touche, were paid the
following fees during the year ended December 31, 2000:
Audit Fees . . . . . . . . . . . . . . . . . . . . . . .$521,670
Financial Information Design and Implementation Fees . . 0
All Other Fees . . . . . . . . . . . . . . . . . . . . . 167,956
STOCKHOLDERS' PROPOSALS FOR NEXT ANNUAL MEETING
Stockholders'proposals intended to be presented at the 2002 Annual Meeting
of Stockholders of the Company must be received by the Company not later than
November 12, 2001, for inclusion in the Company's Proxy Statement and form of
proxy relating to that meeting. Proposals should be addressed to the Company at
1901 Harrison Street, Oakland, California, 94612, Attention: Corporate
Secretary.
The attached proxy card grants the proxy holders discretionary authority to
vote on any matter raised at the Annual Meeting. If a stockholder intends to
submit a proposal at the 2002 Annual Meeting of Stockholders of the Company,
which proposal is not intended to be included in the Company's proxy statement
and form of proxy relating to such meeting, the stockholder should give
appropriate notice no later than January 26, 2002. If a stockholder fails to
submit the proposal by such date, the Company will not be required to provide
any information about the nature of the proposal in its proxy statement, and the
proxy holders will be allowed to use their discretionary voting authority if the
proposal is raised at the 2002 Annual Meeting of Stockholders of the Company.
OTHER MATTERS
The management knows of no business other than that mentioned above to be
transacted at the Annual Meeting, but if other matters do properly come before
the meeting it is the intention of the persons named in the enclosed proxy to
vote thereon in accordance with their judgment, and discretionary authority to
do so is included in the proxy.
GOLDEN WEST FINANCIAL CORPORATION
Oakland, California
March 12, 2001
Appendix A
Charter for the Audit Committee
of the Board of Directors
Golden West Financial Corporation
Adopted July 20, 2000
Purpose
The purpose of the Audit Committee established by this charter is to oversee
the corporate financial reporting process and the internal and external audits
of Golden West Financial Corporation (the "Company"). The Audit Committee will
undertake those specific duties, responsibilities and processes listed below,
and such other duties as the Board of Directors (the "Board") from time to time
may prescribe. In fulfilling this role, the Audit Committee will ensure that
there is effective communication among the Board, management and outside
auditors. In this way, the Committee will help the Board fulfill its oversight
responsibility to the stockholders and the investment community relating to the
Company's financial statements and financial reporting process.
Charter Review
The Audit Committee will review and reassess the adequacy of this charter at
least once a year. This review initially will be conducted prior to the July 20,
2000 meeting of the Board, and in subsequent years at the first Audit Committee
meeting following the Company's annual meeting of stockholders, but may be
conducted at any time the Audit Committee desires to do so. In addition, to the
extent and in the manner that the Company is legally required to do by the rules
of the Securities and Exchange Commission (the "SEC"), the Audit Committee will
cause the Company to publicly file this charter (as then constituted).
Membership
The Audit Committee will be comprised of at least three members of the
Board. The members will be appointed by and will serve at the pleasure of the
Board. The members of the Audit Committee will not be officers or employees of
the Company. Each member of the Audit Committee will be "independent" as defined
by and to the extent required by the rules of the New York Stock Exchange
("NYSE").
Each member of the Audit Committee also must be "financially literate" as
interpreted by the Board, in its business judgment, or must become "financially
literate" within a reasonable period of time after his or her appointment to the
Audit Committee. Among other things, this means that members must be able to
read and understand fundamental financial statements, including the Company's
balance sheet, income statement and cash flow statement. In addition, at least
one member of the Audit Committee must have "accounting or related financial
management expertise," as interpreted by the Board in its business judgment.
This may include past employment experience in finance or accounting, requisite
professional certification in accounting or any other comparable experience or
background which results in the individual's financial sophistication, including
being or having been a chief executive officer, chief financial officer or other
senior officer with financial oversight responsibilities.
Responsibilities
The responsibilities of the Audit Committee include:
1. Recommending outside auditors for approval by the Board and, if
necessary, the termination of the outside auditors presently engaged;
2. Reviewing the plan for the audit and related services at least
annually;
3. Reviewing audit results and annual and interim financial statements
and discussing the audited financial statements with both the
Company's outside auditors and the Company's management prior to any
public filing of those reports;
4. Reviewing any significant disputes between management and the outside
auditors that arise in connection with the preparation of the audited
financial statements;
5. Reviewing major issues regarding accounting principles and practices
that could significantly impact the Company's financial statements;
6. Discussing with the Company's outside auditors the quality of
accounting principles applied in the Company's financial statements
and the other matters required by SAS 61 (including amendments or
supplements), such as management judgments and accounting estimates
that affect financial statements, significant new accounting policies
and disagreements with management;
7. Ensuring the receipt of, and reviewing, a formal written statement
from the Company's outside auditors delineating all relationships
between the outside auditor and the Company, consistent with
Independence Standards Board Standard No.1;
8. Reviewing and actively discussing with the Company's outside auditors
the auditors' independence, including any disclosed relationship or
service that may impact the objectivity and independence of the
outside auditors;
9. Recommending that the Board take appropriate action to ensure the
independence of the outside auditors;
10. Overseeing the adequacy of the Company's system of internal accounting
controls, including obtaining from the outside auditors management
letters or summaries on such internal accounting controls;
11. Overseeing the Company's procedures for preparing published annual
statements and management commentaries;
12. Overseeing the effectiveness of the internal audit function;
13. Overseeing the Company's compliance with SEC requirements for
disclosure of auditors' services and Audit Committee members and
activities; and
14. Ensuring that the Company provides annual written affirmation to the
NYSE regarding (i)any Board determination regarding the independence
of the Audit Committee members, (ii) the financial literacy of the
Audit Committee members, (iii) the determination that at least one
member has the requisite accounting or financial expertise, and (iv)
the annual review of this charter.
In addition to the above responsibilities, the Audit Committee will
undertake such other duties as the Board delegates to it. It shall have the
power to investigate any matter falling within its jurisdiction and to retain
counsel and other advisors.
Finally, the Audit Committee will ensure that the outside auditors
understand both (i) their ultimate accountability to the Board and to the Audit
Committee, as representatives of the Company's stockholders, and (ii) the
Board's and the Audit Committee's ultimate authority and responsibility to
select, evaluate and, where appropriate in the exercise of the Board's business
judgment, replace the Company's outside auditors (or to nominate the outside
auditor to be proposed for stockholder approval in any proxy statement).
Meetings
The Audit Committee will meet with the Company's outside auditors upon the
completion of the annual audit (which meeting may be held without the presence
of management), and at such other times as it deems appropriate, to review the
outside auditors' examination and management report. It also shall meet
regularly with members of management to discuss, among other things, any matters
that could have a material financial effect on the Company.
Reports
The Audit Committee will, to the extent deemed appropriate, record its
summaries of recommendations to the Board in written form that will be
incorporated as a part of the minutes of the Board. To the extent required, the
Audit Committee also will prepare and sign a report for inclusion in the
Company's proxy statement for its annual meeting of stockholders.
GOLDEN Proxy PROXY SOLICITED BY BOARD OF DIRECTORS
WEST
FINANCIAL The undersigned hereby appoints Russell W. Kettell, Michael
CORPORATION Roster and Herbert M. Sandler and, or any of them, each with
- ----------- power of substitution, as proxies of the undersigned to
attend the Annual Meeting of Stockholders of Golden West
Financial Corporation (the "Company"), to be held on the
fourth floor of the Company's headquarters located at 1901
Harrison Street, Oakland, California on May 1, 2001,
commencing at 11:00 a.m., and any adjournment thereof, and
to vote the number of shares of Common Stock, $.10 par
value, of the Company, which the undersigned would be
entitled to vote if personally present on the following:
(1) ELECTION OF DIRECTORS |_| FOR all nominees listed below |_| WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed below
contrary below)
Patricia A. King, Marion O. Sandler, Leslie Tang Schilling
(INSTRUCTION: To withhold authority to vote for any individual, write that
nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
(2) RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP, to serve as the
Company's independent auditors for the year ended December 31, 2001.
|_| FOR |_| AGAINST |_| ABSTAIN
(3) In their discretion, upon all other matters as may properly be brought
before the meeting or any adjournment thereof.
(Continued and to be signed on reverse side)
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF
GOLDEN WEST FINANCIAL CORPORATION
The Annual Meeting of Stockholders of Golden West Financial Corporation
(the "Company") will be held on the fourth floor of the Company's headquarters
located at 1901 Harrison Street, Oakland, California on Tuesday, May 1, 2001,
commencing at 11:00 a.m.for the following purposes:
(1) To elect three members of the Board of Directors to hold office for
three-year terms and until their successors are duly elected and
qualified;
(2) To ratify the selection of independent auditors; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on March 5, 2001 has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at this
meeting or any adjournment thereof. A list of such stockholders will be
available at the time and place of the meeting and, during ten days prior to the
meeting, at the office of the Secretary of Golden West Financial Corporation,
1901 Harrison Street, Oakland, California.
By order of the Board of Directors
/s/ Michael Roster
MICHAEL ROSTER
Executive Vice President and Secretary
March 12, 2001
IMPORTANT: To assure your representation at the meeting, please detach,
complete, date, sign and mail the attached Proxy promptly in the
return envelope, which has been provided.
(Continued from other side)
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH INSTRUCTIONS GIVEN. IN THE
ABSENCE OF SUCH INSTRUCTIONS, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS NOMINATED BY MANAGEMENT AND FOR PROPOSAL 2.
Please date and sign below exactly as your name or names appear hereon. If
more than one name appears, all should sign. Joint owners should each sign
personally. Corporate proxies should be signed in full corporate name by an
authorized officer and attested. Persons signing in a fiduciary capacity should
indicate their full names in such capacity.
------------------------------
(Signature of Stockholder)
------------------------------
(Signature of Stockholder)
Dated__________________________,2001
Stockholders are Urged to Complete, Sign and Return This Proxy Promptly in the
Enclosed Envelope.
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *