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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
H.F. AHMANSON & COMPANY
(Name of Registrant as Specified in Its Charter)
H.F. AHMANSON & COMPANY
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
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/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, schedule or registration statement no.:
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3) Filing party:
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4) Date filed:
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[LOGO]
4900 RIVERGRADE ROAD
IRWINDALE, CALIFORNIA 91706
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 10, 1994
------------------------
The Annual Meeting of Stockholders of H. F. Ahmanson & Company ("Ahmanson")
will be held at the Ritz-Carlton Huntington Hotel, 1401 South Oak Knoll Avenue,
Pasadena, California, on May 10, 1994, at 10:00 a.m., for the following
purposes:
1. To elect 13 directors to serve until the next Annual Meeting of
Stockholders and until their successors are elected and qualified.
2. To consider and vote upon a proposal to approve Ahmanson's 1993
Stock Incentive Plan.
3. To consider and vote upon a proposal to approve Ahmanson's
Executive Long-Term Incentive Plan.
4. To consider and vote upon a proposal to approve Ahmanson's
Executive Short-Term Incentive Plan.
5. To consider and act upon such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 15, 1994 as
the record date for determining stockholders of Ahmanson entitled to notice of
and to vote at the meeting. A list of stockholders entitled to vote will be
available during ordinary business hours at 301 North Lake Avenue, Eighth Floor,
Pasadena, California, for ten days before the meeting.
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. TO INSURE YOUR
REPRESENTATION AT THE MEETING, PLEASE COMPLETE AND PROMPTLY MAIL YOUR PROXY IN
THE RETURN POSTAGE PREPAID ENVELOPE PROVIDED. THIS WILL NOT PREVENT YOU FROM
VOTING IN PERSON, SHOULD YOU SO DESIRE.
By Order of the Board of Directors
George G. Gregory
Secretary
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[LOGO]
4900 RIVERGRADE ROAD
IRWINDALE, CALIFORNIA 91706
March 31, 1994
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 10, 1994
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of H. F. Ahmanson & Company, a Delaware
corporation ("Ahmanson"), for use at the Annual Meeting of Stockholders to be
held May 10, 1994, and all adjournments and postponements thereof. This Proxy
Statement and the accompanying form of proxy were first mailed to stockholders
on or about March 31, 1994.
The cost of preparing, assembling and mailing the Notice of Annual Meeting
of Stockholders, Proxy Statement and form of proxy and the solicitation of
proxies will be paid by Ahmanson. Proxies may be solicited by personnel of
Ahmanson and others who will not receive any additional compensation for such
solicitation. Proxies may be solicited in person or by telephone or telegraph.
Ahmanson will pay brokers or other persons holding stock in their names or the
names of their nominees for the expenses of forwarding soliciting material to
their principals. In addition, Ahmanson has engaged MacKenzie Partners, Inc., a
proxy solicitation firm, to assist in soliciting proxies for a fee not to exceed
$10,000 plus reimbursement of reasonable out-of-pocket expenses.
VOTING
The close of business on March 15, 1994 has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
meeting. On that date there were outstanding 116,900,911 shares of Ahmanson's
Common Stock, $.01 par value (the "Ahmanson Common Stock"), 7,000,000 Depositary
Shares, each representing a one-half interest in a share of Ahmanson's 9.60%
Preferred Stock, Series B (which shares are not entitled to vote at the
meeting), 7,800,000 Depositary Shares, each representing a one-tenth interest in
a share of Ahmanson's 8.40% Preferred Stock, Series C (which shares are not
entitled to vote at the meeting), and 5,750,000 Depositary Shares, each
representing a one-tenth interest in a share of Ahmanson's 6% Cumulative
Convertible Preferred Stock, Series D (which shares are not entitled to vote at
the meeting). A majority of the shares entitled to vote, present in person or
represented by proxy, will constitute a quorum at the meeting. Each share of
Ahmanson Common Stock is entitled to one vote on any matter that may be
presented for consideration and action by the stockholders at the meeting. In
all matters other than the election of directors, the affirmative vote of the
majority of shares of Ahmanson Common Stock present in person or represented by
proxy at the meeting and entitled to vote on the subject matter will be the act
of the stockholders. Directors will be elected by a plurality of the votes of
the shares of Ahmanson Common Stock present in person or represented by proxy
and entitled to vote on the election of directors. Abstentions will be treated
as the equivalent of a negative vote for the purpose of determining whether a
proposal has been adopted and will have no effect for the purpose of determining
whether a director has been elected. As to certain proposals, New York Stock
Exchange rules require that when shares are registered in street or nominee name
its member brokers receive specific instructions from the beneficial owners in
order to vote on such proposals. If a member broker indicates on the proxy that
such broker does not have discretionary authority as to certain shares to vote
on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.
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Proxies will be voted for (i) management's nominees for election as
directors, (ii) the approval of Ahmanson's 1993 Stock Incentive Plan, (iii) the
approval of Ahmanson's Executive Long-Term Incentive Plan and (iv) the approval
of Ahmanson's Executive Short-Term Incentive Plan, unless in any such case the
stockholder otherwise directs in his or her proxy. Where the stockholder has
appropriately directed how the proxy is to be voted, it will be voted according
to his or her direction. Any stockholder has the power to revoke his or her
proxy at any time before it is voted at the meeting by submitting written notice
of revocation to the Secretary of Ahmanson or by filing a duly executed proxy
bearing a later date. A proxy will not be voted if the stockholder who executed
it is present at the meeting and elects to vote the shares represented thereby
in person.
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ELECTION OF DIRECTORS
The directors of Ahmanson are elected annually. The term of office of all
present directors expires on the date of the Annual Meeting of Stockholders of
Ahmanson, at which 13 directors are to be elected to serve for the ensuing year
and until their successors are elected and qualified. The nominees of management
for election as directors (all of whom are presently directors) are set forth
below along with certain information regarding these nominees. Should any
nominee become unavailable to serve as a director or should any vacancy occur
before the election (which events are not anticipated), the proxies may be voted
for a substitute nominee selected by the Board of Directors or the authorized
number of directors may be reduced. If for any reason the authorized number of
directors is reduced, the proxies will be voted, in the absence of instructions
to the contrary, for the election of the remaining nominees named in this Proxy
Statement. To the best of Ahmanson's knowledge, all nominees are and will be
available to serve.
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
---- --- -------------------------------------------- --------
Robert H. Ahmanson 67 Trustee and President of The Ahmanson Foundation, a 1969
charitable foundation
William H. Ahmanson 68 Trustee of the Ahmanson Foundation, a charitable 1954
foundation
Byron Allumbaugh 62 Chairman of the Board and Chief Executive Officer of 1987
Ralphs Grocery Company, a Los Angeles-based
supermarket company; director of El Paso Natural Gas
Company and Ultramar Corp.
Richard M. Bressler 63 Retired Chairman of the Board of El Paso Natural Gas 1987
Company; director of General Mills, Inc. and Rockwell
International Corporation
Lodwrick M. Cook 65 Chairman of the Board and Chief Executive Officer of 1986
ARCO, a petroleum company; Chairman of the Board of
ARCO Chemical Company and director of Lockheed
Corporation
Richard H. Deihl 65 Chairman of the Board of Ahmanson and retired Chief 1968
Executive Officer of Ahmanson and Home Savings of
America, FSB; director of ARCO
Robert M. De Kruif 75 Vice Chairman of the Board of Ahmanson 1951
David S. Hannah 71 Retired Senior Vice President and Secretary of 1958
Ahmanson
Delia M. Reyes 52 Business consultant; President and co-owner of Reyes 1992
Consulting Group, a market research firm
Charles R. Rinehart* 47 President, since December 1989, and Chief Executive 1990
Officer, since November 1993, of Ahmanson; Chairman of
the Board and Chief Executive Officer of Home Savings
of America, FSB; prior thereto, President and Chief
Executive Officer of AVCO Financial Services, a
consumer finance and insurance company
Elizabeth Sanders 48 Business consultant; Vice President and General 1990
Manager of the Southern California Division of
Nordstrom, Inc., a retail department store, until
February 1990; director of Carl Karcher Enterprises,
Sport Chalet, Inc., The Vons Companies, Inc. and Wal-
Mart Stores, Inc.
Arthur W. Schmutz 72 Retired partner of Gibson, Dunn & Crutcher, a law 1993
firm; director of Ducommun Incorporated
William D. Schulte 61 Retired Vice Chairman of KPMG Peat Marwick, a firm of 1991
independent certified public accountants; director of
Leslie's Poolmart
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* Executive officer.
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Messrs. Robert H. Ahmanson, William H. Ahmanson, Deihl, De Kruif and Hannah
served prior to their retirement in 1986, 1987, 1993, 1993 and 1988,
respectively, as officers of Ahmanson and/or one or more of its subsidiaries for
more than five years. Robert H. Ahmanson and William H. Ahmanson are brothers.
No other directors or officers of Ahmanson are related. Each of the directors of
Ahmanson listed above also serves as a director of Home Savings of America, FSB
("Home Savings").
Ahmanson's executive officers not listed above are Fredric J. Forster, age
49, Senior Executive Vice President of Ahmanson and President of Home Savings
since February 1993; George G. Gregory, age 61, Executive Vice President,
General Counsel and Secretary of Ahmanson and Executive Vice President of Home
Savings; Kevin M. Twomey, age 47, Executive Vice President and Chief Financial
Officer of Ahmanson and Home Savings since June 1993; and George Miranda, age
46, First Vice President and Principal Accounting Officer of Ahmanson and Home
Savings. Mr. Forster is a director of Home Savings and the Federal Home Loan
Bank of San Francisco. Prior to joining Ahmanson Mr. Forster was President of
ITT Federal Bank. Mr. Gregory is a director of Home Savings and has served as an
officer of Ahmanson and/or one of its subsidiaries for more than five years.
Prior to joining Ahmanson Mr. Twomey worked in corporate finance at MacAndrews
and Forbes since February 1993, was Executive Vice President, Finance,
Administration and Chief Financial Officer of First Gibraltar Bank from July
1989 to February 1993 and prior thereto was Group Chairman, Finance and
Administration and Chief Financial Officer of Deposit Insurance Bridge Bank. Mr.
Miranda has served as an officer of Ahmanson and/or one of its subsidiaries for
more than five years.
Bill Daniels, age 73 and a director since 1983, and George G. Gregory, a
director since 1989, have chosen not to stand for reelection to the Board of
Directors. In accordance with Ahmanson's By-Laws, the authorized number of
directors of Ahmanson has been reduced to 13, effective immediately prior to the
election of directors at the Annual Meeting of Stockholders. Mr. Gregory will
remain an executive officer of Ahmanson and a director and executive officer of
Home Savings.
The Board of Directors has an Executive Committee, an Audit Committee, a
Compensation Committee and a Nominating Committee. The Executive Committee is
composed of Byron Allumbaugh, Lodwrick M. Cook, Richard H. Deihl (Chairperson),
Robert M. De Kruif and Charles R. Rinehart and held no meetings during 1993. The
Audit Committee is composed of William H. Ahmanson, Byron Allumbaugh, Richard M.
Bressler, Bill Daniels, Arthur W. Schmutz and William D. Schulte (Chairperson).
The Compensation Committee is composed of Byron Allumbaugh, Richard M. Bressler
(Chairperson), Bill Daniels, David S. Hannah, Delia M. Reyes, Elizabeth Sanders,
Arthur W. Schmutz and William D. Schulte. The Nominating Committee is composed
of William H. Ahmanson, Byron Allumbaugh (Chairperson), Richard M. Bressler,
Lodwrick M. Cook, Bill Daniels, Richard H. Deihl and Robert M. De Kruif.
The Audit Committee held four meetings in 1993. The function of the Audit
Committee is to direct the internal audit activities of Ahmanson, to review and
approve the scope of audit procedures employed by Ahmanson's independent
auditors, to review and approve the audit reports rendered by both Ahmanson's
independent auditors and its internal audit staff and to approve the audit fee
charged by the independent auditors. The Audit Committee reports to the Board of
Directors with respect to such matters and recommends the selection of
independent auditors.
The Compensation Committee held six meetings in 1993. The primary function
of the Compensation Committee is to determine the compensation of officers of
Ahmanson, to administer and grant awards under Ahmanson's 1993 Stock Incentive
Plan and 1984 Stock Incentive Plan and to administer Ahmanson's 1979 Long-Term
Management Performance Plan.
The Nominating Committee held one meeting in 1993. The function of the
Nominating Committee is to seek, evaluate and recommend to the Board of
Directors qualified individuals for election to the Board of Directors by the
stockholders, or by the Board of Directors to fill vacancies thereon whenever
vacancies occur or whenever the Nominating Committee or the Board of Directors
considers it advisable to add or change directors. The Nominating Committee also
advises the Board of Directors on matters pertaining to the size and composition
of the Board of Directors. The Nominating Committee will consider nominees for
director whose names are timely submitted by holders of Ahmanson Common Stock in
writing addressed to the
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Chairperson of the Nominating Committee accompanied by such information
regarding the nominee as would be required under the rules of the Securities and
Exchange Commission were the stockholder soliciting proxies with regard to the
election of such nominee.
In 1993 the Board of Directors held nine meetings. All directors attended
at least 75 percent of the meetings held during 1993 by the Board of Directors
and the committees on which they served.
PRINCIPAL HOLDERS OF AHMANSON COMMON STOCK
The following table sets forth as of December 31, 1993 (i) the name and
address of the beneficial owners of more than five percent of the outstanding
shares of Ahmanson Common Stock, (ii) the total number of shares of Ahmanson
Common Stock beneficially owned and (iii) the percent of the outstanding shares
of Ahmanson Common Stock so owned.
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------- ----------------- --------
Wellington Management Company 12,761,162(1) 10.81%
75 State Street
Boston, MA 02109
The Capital Group, Inc. 12,482,440(2) 10.68%
333 South Hope Street
Los Angeles, CA 90071
FMR Corp. 11,675,317(3) 9.99%
82 Devonshire Street
Boston, MA 01209
Sanford C. Bernstein & Co., Inc. 10,965,882(4) 9.4%
One State Street Plaza
New York, NY 10004
---------------
(1) Wellington Management Company is deemed to be the beneficial owner of these
shares by virtue of the direct or indirect investment and/or voting
discretion it possesses pursuant to the provisions of investment advisory
agreements with various clients, none of whom is known to Ahmanson to own
beneficially more than five percent of the outstanding shares of Ahmanson
Common Stock except The Windsor Funds, Inc., which has sole voting power as
to 10,859,145 of these shares.
(2) The Capital Group, Inc. is deemed to be the beneficial owner of these shares
by virtue of the direct of indirect investment and/or voting discretion its
subsidiaries possess pursuant to the provisions of investment advisory
agreements with various clients, none of whom is know by Ahmanson to own
beneficially more than five percent of the outstanding shares of Ahmanson
Common Stock except Capital Research and Management Company, which has sole
investment power as to 7,375,410 of these shares. Through its subsidiaries,
The Capital Group, Inc. has sole voting power with respect to 3,374,120 of
these shares. Beneficial ownership with respect to all these shares has been
disclaimed by The Capital Group, Inc.
(3) These shares represent the aggregate reported beneficial ownership of FMR
Corp., its Chairman Edward C. Johnson III, and its wholly-owned subsidiary
Fidelity Management & Research Company. These shares are owned by several
investment companies for which Fidelity Management & Research Company acts
as investment adviser and by one or more institutional accounts for which
another subsidiary of FMR Corp. acts as investment manager. None of such
investment companies or institutional accounts is known to Ahmanson to own
beneficially more than five percent of the outstanding shares of Ahmanson
Common Stock. FMR Corp. has sole investment power as to all such shares and
sole voting power as to 520,319 of such shares.
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(4) All such shares are held in client discretionary accounts managed by Sanford
C. Bernstein & Co., Inc., which has sole investment power with respect to
all such shares and sole voting power as to 6,156,051 of such shares.
All information with respect to beneficial ownership of the shares referred
to above and under "Security Ownership of Management" below is based upon
filings made by the respective beneficial owners with the Securities and
Exchange Commission or information provided to Ahmanson by such beneficial
owners.
SECURITY OWNERSHIP OF MANAGEMENT
The following information sets forth the number of shares of Ahmanson
Common Stock beneficially owned as of February 28, 1994 by each of the present
directors and nominees of Ahmanson, each of the individuals included in the
"Summary Compensation Table" below and all directors and executive officers as a
group. In addition to the shares listed below, Robert H. Ahmanson and Richard H.
Deihl own 20,000 and 3,712 Depositary Shares, respectively, each representing a
one-tenth interest in a share of Ahmanson's 8.40% Preferred Stock, Series C,
which is less than one percent of the outstanding shares in each instance and in
the aggregate, and Fredric J. Forster owns 175 Depositary Shares each
representing a one-tenth interest in a share of Ahmanson's 6% Cumulative
Convertible Preferred Stock, Series D, which is less than one percent of the
outstanding shares. No other director or executive officer owns Depositary
Shares representing interests in Ahmanson's Preferred Stock.
NAME OR NUMBER OF PERSONS NUMBER OF VOTING PERCENT OF
IN GROUP SHARES OWNED OPTIONS(1) POWER ONLY TOTAL CLASS(2)
------------------------- ------------ --------- ----------- --------- -----------
Robert H. Ahmanson 255,087(3) 11,000 266,087 -- %
William H. Ahmanson 259,335(3) 23,000 282,335 --
Byron Allumbaugh 2,500 11,000 13,500 --
Richard M. Bressler 20,000 11,000 31,000 --
Lodwrick M. Cook 1,000 11,000 12,000 --
Bill Daniels 50,000 11,000 61,000 --
Richard H. Deihl 100,000 606,934 837,454(4) 1,544,388 1.32
Robert M. De Kruif 122,821(3) 44,986 167,807 --
Fredric J. Forster 5,959(5) -- 5,959 --
George G. Gregory 127,208 67,966 195,174 --
David S. Hannah 2,850(4)(6) 11,000 13,850 --
George Miranda 26,980 15,459 42,439 --
Delia M. Reyes -- 2,000 2,000 --
Charles R. Rinehart 133,684 36,423 170,107 --
Elizabeth Sanders 3,000 6,000 9,000 --
Arthur W. Schmutz 1,000 1,000 2,000 --
William D. Schulte 2,500 5,000 7,500 --
Kevin M. Twomey 4,317 -- 4,317 --
All directors and
executive officers as a
group (18 persons) 1,118,241 874,768 837,454 2,830,463 2.42
- ---------------
(1) Represents shares subject to options which are presently exercisable or
exercisable within 60 days after February 28, 1994 for an average price of
$17.74 for the total number.
(2) Percentage information is omitted for those individuals whose beneficially
owned shares represent less than one percent of the outstanding shares of
Ahmanson Common Stock.
(3) Does not include 3,664,351 shares of Ahmanson Common Stock owned by The
Ahmanson Foundation (the "Foundation"). These individuals and a relative of
Robert H. Ahmanson and William H. Ahmanson serve as members of the
Foundation's eight member board of trustees. Except for their powers and
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responsibilities as trustees of the Foundation, these persons have
disclaimed any interest in the Ahmanson Common Stock owned by the
Foundation. The Foundation has sole investment and voting power as to these
shares.
(4) Mr. Deihl has disclaimed beneficial ownership of such shares because his
interest in such shares is limited to an irrevocable proxy from Wells Fargo
Bank, as trustee. The trust instruments covering such shares provide that
the trustee shall grant to the Chairman of the Board of Ahmanson upon
request a proxy to vote such shares, and the trustee has granted an
irrevocable proxy for a term of seven years, expiring in January 2001, to
Mr. Deihl as Chairman of the Board and his successors as Chairman of the
Board. Mr. Hannah serves as a member of the three member investment
committee for the trust. The investment committee has investment power with
respect to such shares. Except for his powers and responsibilities as a
member of the investment committee, Mr. Hannah has disclaimed beneficial
ownership of such shares.
(5) Includes 359 shares which may be acquired upon conversion of Depositary
Shares, each representing a one-tenth interest in a share of Ahmanson's 6%
Cumulative Convertible Preferred Stock, Series D, at a conversion price of
$24.335 per share of Ahmanson Common Stock.
(6) Does not include 540,000 shares held in trusts for which First Interstate
Bank of California serves as trustee and for which Mr. Hannah serves as a
member of a three member board of governors. The board of governors has
investment power as to such shares and the trustee has voting power as to
such shares. Except for his powers and responsibilities as a member of the
board of governors, Mr. Hannah has disclaimed beneficial ownership of such
shares.
Section 16(a) of the Securities Exchange Act of 1934 requires directors and
certain officers of Ahmanson and persons who own more than ten percent of a
registered class of Ahmanson's equity securities to file with the Securities and
Exchange Commission and any national securities exchange on which Ahmanson's
equity securities are registered initial reports of ownership and reports of
changes in ownership of Ahmanson Common Stock and other equity securities of
Ahmanson. Officers, directors and beneficial owners of more than ten percent of
Ahmanson's equity securities are required by regulations of the Securities and
Exchange Commission to furnish Ahmanson with copies of all Section 16(a) forms
they file.
To Ahmanson's knowledge, based solely upon a review of the copies of such
forms furnished to Ahmanson and written representations that no other reports
were required, during the fiscal year ended December 31, 1993 all Section 16(a)
filing requirements applicable to its officers, directors and beneficial owners
of more than ten percent of Ahmanson's equity securities were complied with by
such persons.
EXECUTIVE COMPENSATION
The following table sets forth the compensation for services rendered in
all capacities to Ahmanson and its subsidiaries earned during the years
indicated by each of Ahmanson's Chief Executive Officer, the four most highly
compensated executive officers of Ahmanson (other than the Chief Executive
Officer) who were employed by Ahmanson as of December 31, 1993, and two
additional individuals who would have been among the most highly compensated
executive officers of Ahmanson but for the fact that they were no longer
executive officers of Ahmanson as of December 31, 1993 (collectively referred to
as the "named executive officers").
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SUMMARY COMPENSATION TABLE(1)
LONG-TERM COMPENSATION(2)
--------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------- ------------------- ----------
RESTRICTED
OTHER ANNUAL STOCK OPTIONS LTIP ALL OTHER
NAME AND TITLE YEAR SALARY BONUS COMPENSATION(3) AWARDS(4) (#)(5) PAYOUTS(6) COMPENSATION(7)
-------------- ---- -------- -------- --------------- --------- ------- ---------- ---------------
Charles R. Rinehart 1993 $643,758 $312,817 $ -- $ -- 110,109 $ -- $ 72,448
President and Chief 1992 550,000 329,955 -- -- -- 852,159 58,048
Executive Officer 1991 468,750 270,000 -- -- -- 532,308
Fredric J. Forster(8) 1993 348,599 151,342 -- 114,800 82,853 -- 1,956
Senior Executive 1992 -- -- -- -- -- -- --
Vice President and 1991 -- -- -- -- -- --
Chief Operating Officer
George G. Gregory 1993 323,508 110,128 -- -- 42,547 -- 37,429
Executive Vice President, 1992 313,000 138,485 -- -- -- 339,641 31,001
General Counsel and 1991 283,750 148,500 -- -- -- 243,978
Secretary
Kevin M. Twomey(9) 1993 169,891 40,704 74,481 74,468 62,943 -- 1,455
Executive Vice President 1992 -- -- -- -- -- -- --
and Chief Financial
Officer 1991 -- -- -- -- -- --
George Miranda 1993 196,005 61,792 -- -- 18,157 -- 28,584
First Vice President and 1992 187,250 64,279 -- -- -- 143,603 25,953
Principal Accounting
Officer 1991 177,500 82,688 -- -- -- 109,956
Richard H. Deihl(10) 1993 666,670 473,203 -- -- 302,000 -- 104,884
Chairman of the Board 1992 743,750 538,497 -- -- -- 1,323,935 72,500
and Chief Executive
Officer 1991 725,000 489,375 -- -- 50,000 911,232
Robert M. De Kruif(10) 1993 266,667 189,100 -- -- 2,000 -- 30,000
Vice Chairman of the Board 1992 281,250 246,597 -- -- -- 334,777 27,500
1991 275,000 153,450 -- -- -- 243,978
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(1) Includes bonuses and long-term compensation payouts in the year the payout
is authorized by the Compensation Committee although the performance
measurement period ends September 30 of each year.
(2) Stockholdings of Messrs. Rinehart, Forster, Gregory, Twomey and Miranda of
94,240, 0, 21,031, 0 and 17,767 shares, respectively, were subject to
vesting restrictions and had a net market value at December 31, 1993 of
$1,849,460, $0, $412,733, $0 and $348,677, respectively, not accounting for
the effect of the vesting restrictions. Except for Messrs. Forster and
Twomey, who received restricted stock awards upon joining Ahmanson, all such
stock represents shares issued as payouts under Ahmanson's Executive Long-
Term Incentive Plan and is reflected in the table under the heading "LTIP
Payouts" as of the date of issuance for the years indicated.
(3) Excludes compensation in the form of other personal benefits, which, for
each of the named executive officers, other than Mr. Twomey in 1993, did not
exceed the lesser of $50,000 or 10 percent of the total of annual salary and
bonus reported for each year. Other Annual Compensation for Mr. Twomey in
1993 includes reimbursement of relocation expense of $40,421.
(4) All 9,917 restricted stock award shares granted to Messrs. Forster and
Twomey have vested in full. Dividends were paid on such restricted stock
awards prior to the lapse of restrictions to the same extent that dividends
are paid on all other shares of Ahmanson's Common Stock.
(5) Includes option grants made as payouts in 1993 under Ahmanson's Executive
Long-Term Incentive Plan. Also includes additional option grants made in
1993 to Messrs. Forster and Twomey in connection with their joining
Ahmanson, to Mr. Deihl in connection with his retirement and to Messrs.
Deihl and De Kruif under Ahmanson's 1988 Directors' Stock Incentive Plan.
(6) Represents the market value as of the payout date of stock payouts under the
Executive Long-Term Incentive Plan described below under "Long-Term
Incentive Plan." All such stock payouts are subject to restrictions which
lapse in equal one-third annual installments after the payout date or, if
earlier, in full upon the officer's death, disability or normal retirement
or a change in control of Ahmanson.
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(7) In accordance with the transition provisions covering disclosure of
executive compensation adopted by the Securities and Exchange Commission,
amounts of All Other Compensation are excluded for 1991.
Includes (i) contributions by Ahmanson to the 1989 Contingent Deferred
Compensation Plan, a nonqualified, defined contribution plan in which
contributions vest pro rata over 10 years or, if earlier, in full upon the
death, disability or retirement of the participant or a change in control
of Ahmanson, (ii) interest earned on Elective Deferred Compensation Plan
accounts at a rate greater than 120% of the applicable federal rate and
(iii) the value to the participant of premiums paid by Ahmanson under the
Senior Executive Life Insurance Plan.
CHARLES R. FREDRIC J. GEORGE G. KEVIN M. GEORGE RICHARD H. ROBERT M.
YEAR RINEHART FORSTER GREGORY TWOMEY MIRANDA DEIHL DE KRUIF
---- ----------- ----------- --------- -------- ------- ----------- ----------
Contingent Deferred 1993 $62,501 $ -- $32,201 $ -- $19,400 $80,000 $ 30,000
Compensation Plan 1992 52,500 -- 31,001 -- 18,500 72,500 27,500
Elective Deferred 1993 4,453 -- -- -- 7,749 -- --
Compensation Plan 1992 5,548 -- -- -- 7,453 -- --
Senior Executive Life 1993 5,494 1,956 5,228 1,455 1,435 24,884 --
Insurance Plan
(8) Mr. Forster became an executive officer of Ahmanson in February 1993.
(9) Mr. Twomey became an executive officer of Ahmanson in June 1993.
(10) Mr. Deihl and Mr. De Kruif retired as executive officers of Ahmanson
effective November 1, 1993.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to stock
options granted to the named executive officers during 1993.
INDIVIDUAL GRANTS
-----------------------------------------------------------------------------------------
PERCENTAGE
OF TOTAL
NUMBER OF SHARES OPTIONS
UNDERLYING GRANTED TO GRANT DATE
NAME OPTIONS GRANTED EMPLOYEES EXERCISE PRICE EXPIRATION DATE PRESENT VALUE(1)
- --------------------- ----------------- ------------- -------------- ----------------- ----------------
Charles R. Rinehart 110,109 9.08% $17.75 December 23, 2003 $ 477,273
Fredric J. Forster 30,000 2.47 17.125 July 23, 2003 133,729
52,853 4.36 17.75 December 23, 2003 229,094
George G. Gregory 42,547 3.51 17.75 December 23, 2003 184,422
Kevin M. Twomey 20,000 1.65 17.125 July 23, 2003 89,153
42,943 3.54 17.75 December 23, 2003 186,139
George Miranda 18,157 1.50 17.75 December 23, 2003 78,702
Richard H. Deihl 300,000 24.74 20.0625 October 29, 2003 1,672,611
2,000 0.16 18.25 December 1, 2003 8,574
Robert M. De Kruif 2,000 0.16 18.25 December 1, 2003 8,574
- ---------------
(1) Options which expire on July 23, 2003, October 29, 2003, December 1, 2003
and December 23, 2003 were granted on June 23, 1993, September 29, 1993,
November 1, 1993 and November 23, 1993, respectively. Present values were
calculated using the Black-Scholes option valuation model with the following
assumptions:
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JUNE 23, 1993 SEPTEMBER 29, 1993 NOVEMBER 1, 1993 NOVEMBER 23, 1993
GRANT GRANT GRANT GRANT
------------- ------------------ ---------------- -----------------
Term.................... 10 years 10 years 10 years 10 years
Exercise price.......... $17.125 $20.0625 $18.25 $17.75
Volatility.............. 36.85% 33.44% 31.95% 31.11%
Dividend yield.......... 5.14% 4.39% 4.82% 4.96%
Risk-free interest
rate.................. 6.37% 6.10% 6.00% 5.93%
Discount for forfeiture
risk.................. 5.0 % 2.5 % 7.5 % 2.5 %
The actual value, if any, which a named executive officer may realize will
be based upon the difference between the market price of Ahmanson's Common Stock
on the date of exercise and the exercise price. The dividend yield assumption is
based upon the dividend rate on the respective grant dates. There is no
assurance that the assumed dividend rate will be maintained or that the actual
realized value will be at or near the value estimated by the Black-Scholes
model.
The June 23, 1993 grants were made to Messrs. Forster and Twomey in
connection with their joining Ahmanson. The options become exercisable one year
after grant or, if earlier, in full upon the employee's death, disability or
normal retirement or a change in control of Ahmanson and expire three months
after termination of employment other than as a result of death, disability or
retirement. Payment of the option exercise price and tax withholding obligations
may be satisfied by withholding shares otherwise issuable upon exercise.
The September 29, 1993 grant was made to Mr. Deihl in connection with his
retirement from Ahmanson. The options became exercisable upon his retirement on
November 1, 1993 and remain exercisable throughout the remainder of their term.
The November 1, 1993 grants were made to Messrs. Deihl and De Kruif under
Ahmanson's 1988 Directors' Stock Incentive Plan which provides, among other
things, that whenever a person becomes a nonemployee director of Ahmanson such
person is granted automatically an option to purchase 2,000 shares of Ahmanson
Common Stock. The options become exercisable one year after grant as to half of
the shares subject to the options and two years after grant as to the balance of
the shares or, if earlier, in full upon the director's death, disability or
normal retirement or a change in control of Ahmanson, and expire three months
after termination of directorship other than upon the director's death,
disability or normal retirement.
The November 23, 1993 grants were made under Ahmanson's Executive Long-Term
Incentive Plan for the performance period ended in 1993. The options become
exercisable six months after grant or, if earlier, in full upon the employee's
death, disability or normal retirement or a change in control of Ahmanson and
expire three months after termination of employment other than as a result of
death, disability or retirement. Payment of the option exercise price and tax
withholding obligations may be satisfied by withholding shares otherwise
issuable upon exercise.
AGGREGATED OPTION/SAR EXERCISES AND YEAR-END OPTION/SAR VALUES
The following table sets forth certain information with respect to
exercises by the named executive officers of stock options and stock
appreciation rights ("SARs") during 1993 and the value of all unexercised
employee stock options and SARs as of December 31, 1993 held by the named
executive officers.
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VALUE OF UNEXERCISED
NUMBER OF SHARES UNDERLYING IN-THE-MONEY OPTIONS/SARS
SHARES UNEXERCISED OPTIONS/SARS AT FISCAL YEAR-END(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ --------- ----------- ------------- ----------- -------------
C>
Charles R. Rinehart -- $ -- 36,423 110,109 $ 95,774 $ 206,454
Fredric J. Forster -- -- -- 82,853 -- 174,099
George G. Gregory 60,000 607,500 67,966 42,547 439,386 79,776
Kevin M. Twomey -- -- -- 62,943 -- 130,518
George Miranda 9,680 62,920 15,459 18,157 25,596 34,044
Richard H. Deihl 67,500 828,056 606,934 2,000 952,077 2,750
Robert M. De Kruif 24,000 302,670 44,986 2,000 146,386 2,750
- ------------------
(1) The actual amount realized from unexercised options is dependent upon the
price of Ahmanson's Common Stock at the time shares obtained upon exercise
of such options are sold and, as to unexercisable options, whether
restrictions upon exercise of such options lapse.
LONG-TERM INCENTIVE PLAN
The following description of Ahmanson's Executive Long-Term Incentive Plan
applies to the awards and payouts for the three-year performance measurement
cycle ended in 1993. Senior executives of Ahmanson and its subsidiaries who are
designated by the Compensation Committee as participants are assigned a target
award opportunity expressed as a percentage of base annual salary in the last
year of the performance measurement cycle. Seventy-five percent of the award
opportunity is based upon Ahmanson's total stockholder return ("TSR") over a
three-year performance measurement cycle relative to the TSR of companies that
comprise the Standard & Poors Banking Index and the Standard & Poors 500 Index
and 25 percent of the award opportunity is based upon Ahmanson's return on
equity ("ROE") over the performance measurement cycle relative to the ROE of a
peer group of savings institutions.
The actual award earned by a participant may vary from zero percent to 150
percent of the target award opportunity. The target amount will be earned if
Ahmanson's TSR is at the 50th percentile and ROE is at the 60th percentile. The
threshold amount will be earned if Ahmanson's TSR and ROE are at the 40th
percentile and the maximum amount will be earned if Ahmanson's TSR is at or
above the 75th percentile and ROE is at or above the 90th percentile. Half of
the award is paid in cash and half is paid in the form of nonqualified stock
options. For performance measurement cycles ended prior to 1993, the award
earned was paid in the form of Ahmanson Common Stock subject to further
restrictions. The actual award earned is subject to reduction of up to 20
percent based upon an assessment of the executive's performance during the last
12 months of the performance measurement cycle. Unless otherwise determined by
the Compensation Committee in its discretion, no amounts are payable under the
Plan if Ahmanson's ROE for the last 12 months of the performance measurement
cycle is below five percent or if Home Savings' core capital is below the level
mandated by law.
Ahmanson's Executive Long-Term Incentive Plan has been amended as described
below under "Proposal to Approve Ahmanson's Long-Term Incentive Plan." The
amendments to the plan will affect target award opportunities for the
performance measurement cycle commencing in 1994 and thereafter and will affect
the calculation of actual payouts for the performance measurement cycle ending
in 1994 and thereafter. The amendments also changed the timing of grants of
options from the end to the beginning of the performance measurement cycle.
However, for the performance measurement cycles ending in 1996 and prior, any
grants of options will continue to be made at the end of the performance
measurement cycle.
The following table sets forth certain information as to target award
opportunities, under the Executive Long-Term Incentive Plan as most recently
amended for the performance measurement cycle commencing on January 1, 1994,
including the portion of the award payable in the form of stock options. Actual
payout amounts will be based upon Ahmanson's relative TSR using the criteria
described above. Notwithstanding the
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satisfaction of such criteria, the Compensation Committee may, in its
discretion, reduce the amount paid out by up to 100 percent if Home Savings'
core capital is below the level mandated by law and by up to 20 percent based
upon an assessment of the executive's performance during the last 12 months of
the performance measurement cycle. Estimated future payout amounts indicated are
calculated using the named executive officers' current salaries. These awards
are contingent upon stockholder approval of the Executive Long-Term Incentive
Plan as amended.
LONG-TERM INCENTIVE PLAN -- AWARDS IN LAST FISCAL YEAR
(This table sets forth target award opportunities, not actual payouts)
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE NON-STOCK PRICE-BASED PLANS
MEASUREMENT -------------------------------------
NAME PERIOD THRESHOLD TARGET MAXIMUM
---- ----------- --------- ---------- ----------
Charles R. Rinehart 3 years $ 630,000 $1,260,000 $1,890,000
Fredric J. Forster 3 years 339,200 678,400 1,017,600
George G. Gregory(1) 3 years 221,400 442,800 664,200
Kevin M. Twomey(1) 3 years 219,375 438,750 658,125
George Miranda 3 years 85,850 171,700 257,550
- ------------------
(1) The Compensation Committee has the discretion to reduce the target award
opportunities applicable to Executive Vice Presidents from 135 percent of
salary to 100 percent of salary (with corresponding adjustments to the
threshold and maximum award opportunities) prior to any discretionary
reduction based upon an assessment of the executive's performance.
RETIREMENT PLANS
Retirement Plan. Ahmanson's Retirement Plan is a qualified,
noncontributory, defined benefit retirement plan governed by the Employee
Retirement Income Security Act of 1974. The Retirement Plan is administered by a
committee appointed by the Board of Directors. With some exceptions, all
employees of Ahmanson and its participating subsidiaries (including officers)
are eligible to participate provided they meet certain service requirements.
The following table illustrates the estimated annual retirement benefits
payable under the Retirement Plan to participants in the following specific
average annual earnings and years of service classifications. Benefits under the
Retirement Plan are reduced in part to the extent a participant receives Social
Security benefits. Benefits paid to a participant in the Retirement Plan who is
also a participant in Ahmanson's Supplemental Executive Retirement Plan ("SERP")
or Senior Supplemental Executive Retirement Plan reduce any benefit payable to
such participant under the SERP or Senior Supplemental Executive Retirement Plan
by 100 percent of the amount of the benefit under the Retirement Plan.
YEARS OF SERVICE
FINAL AVERAGE -------------------------------------------------------------------------------------
ANNUAL EARNINGS 5 10 15 20 25 30 35 40
- ---------------- -------- -------- -------- -------- -------- -------- -------- --------
$ 250,000 $ 27,083 $ 54,167 $ 81,250 $108,333 $115,641 $115,641 $115,641 $115,641
500,000 54,167 108,333 115,641 115,641 115,641 115,641 115,641 115,641
750,000 81,250 115,641 115,641 115,641 115,641 115,641 115,641 115,641
1,000,000 108,333 115,641 115,641 115,641 115,641 115,641 115,641 115,641
1,250,000 115,641 115,641 115,641 115,641 115,641 115,641 115,641 115,641
1,500,000 115,641 115,641 115,641 115,641 115,641 115,641 115,641 115,641
Benefits are paid to or on behalf of each participant upon retirement,
normally at age 65, and under certain circumstances upon death or disability.
The Retirement Plan provides for an annual benefit equal to 65 percent of final
average annual earnings reduced by 40 percent of the participant's Social
Security benefits. "Final average annual earnings" is the annual average
compensation paid to a participant during the final 120 months of employment,
subject to certain adjustments and a cap as to the amount of compensation which
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may be included for each year. If the participant has fewer than 30 years of
credited service in the Retirement Plan, the participant's final average
earnings are proportionately reduced. Participants with more than 20 years of
credited service receive an additional benefit amount equal to 1/2 of 1 percent
of final average earnings for each year of credited service in excess of 20.
Participants with more than 30 years of credited service receive an additional
1/2 of 1 percent of final average annual earnings for each year of credited
service in excess of 30. However, in no event may a participant's benefits
exceed the maximum amount permitted under the Internal Revenue Code, which for
1993 was $115,641. Retirement benefits generally vest after five years or upon
the participant's 65th birthday while employed by Ahmanson or a participating
subsidiary. The benefits payable under the Retirement Plan are actuarially
adjusted to reflect the form of payment elected by the participant and are
subject to limitations on maximum benefits imposed by applicable law. As of
February 28, 1994 the full years of credited service for Messrs. Rinehart,
Forster, Gregory, Twomey and Miranda were 4, 0, 10, 0 and 20, respectively.
Messrs. Deihl and De Kruif retired effective as of November 1, 1993 with 31 and
42 full years of credited service, respectively.
Supplemental Executive Retirement Plan. Ahmanson's Supplemental Executive
Retirement Plan ("SERP") is a defined benefit, nonqualified plan under which
Ahmanson pays benefits to certain officers of Ahmanson and its subsidiaries
designated by the Compensation Committee of the Board of Directors in an amount
equal to a specified percentage of the participant's average annual earnings for
the 36 consecutive months during the final ten years of the participant's
employment which produce the highest average annual earnings.
The following table illustrates the estimated annual retirement benefits
payable under the SERP to participants in the following specific average annual
earnings and years of service classifications. Benefits under the SERP are
reduced to the extent a participant receives benefits from primary Social
Security or Ahmanson's Retirement Plan.
YEARS OF SERVICE
THREE YEAR AVERAGE --------------------------------------
ANNUAL EARNINGS 5 10 15 AND OVER
------------------ -------- -------- ------------
$ 250,000 $ 50,000 $100,000 $150,000
500,000 100,000 200,000 300,000
750,000 150,000 300,000 450,000
1,000,000 200,000 400,000 600,000
1,250,000 250,000 500,000 750,000
1,500,000 300,000 600,000 900,000
The participant's average annual earnings include salary, cash bonuses and
contingent deferred compensation grants. The compensation for purposes of the
SERP of each of the named executive officers is substantially equivalent to the
respective amounts set forth in the Summary Compensation Table under the
headings "Salary" and "Bonuses" and opposite the caption "Contingent Deferred
Compensation Plan" in the footnote to the heading "All Other Compensation."
The annual benefit payable to a participant under the SERP is equal to four
percent of the participant's average annual earnings multiplied by the
participant's years of credited service, subject to a maximum of 15 years of
credited service. Service must generally continue to at least the participant's
normal retirement date for a participant to receive full benefits under the
SERP. However, a participant may retire early and receive reduced benefits upon
early retirement if the sum of his age and his years of service equals at least
75 and the participant is at least 55. The SERP provides for accelerated accrual
and vesting of participants' interests in the event of a change in control of
Ahmanson. Benefits generally commence under the SERP upon the participant's
retirement and are paid on a joint and survivor basis, which provides for a
lesser annual benefit to the participant's designated beneficiary upon the death
of the participant. The SERP provides for a pre-retirement survivor benefit
equal to the survivor benefits a participant's spouse would have received if the
participant had elected early retirement, offset by executive life insurance.
The SERP permits participants to elect to receive a lump sum benefit, equal to
90 percent of the participant's accrued benefits at any time after retirement or
100 percent of the participant's accrued benefits upon retirement if the
election is made in a timely manner before retirement. Full years of credited
service under the SERP are generally the same as
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those under Ahmanson's Retirement Plan, subject to a maximum of 15 years except
for determination of whether a participant is entitled to benefits upon early
retirement.
Senior Supplemental Executive Retirement Plan. Certain officers of Ahmanson
and its subsidiaries, as designated by the Compensation Committee, participate
in an auxiliary version of the SERP, the Senior Supplemental Executive
Retirement Plan, under which a portion of the amount otherwise payable to the
participant under the SERP is offset by the participant's interest in the cash
value of split-dollar life insurance policies purchased under Ahmanson's Senior
Executive Life Insurance Plan. The post-retirement survivor benefit payable to
the participant's designated beneficiary is equal to the amount which would have
been payable under Ahmanson's SERP reduced by the additional post-retirement
death benefit payable under Ahmanson's Senior Executive Life Insurance Plan. The
pre-retirement survivor benefit payable to the participant's designated
beneficiary is equal to the amount which would have been payable under
Ahmanson's SERP reduced by the death benefit payable under Ahmanson's Senior
Executive Life Insurance Plan. The Compensation Committee granted Messrs.
Rinehart and Gregory additional years of service for purposes of the Senior
Supplemental Executive Retirement Plan, effective December 31, 1993, to bring
each of such individuals up to 15 years of credited service.
EMPLOYMENT AGREEMENTS
Ahmanson has entered into employment agreements with each of its executive
officers. Such agreements provide for continually renewed terms of employment
and for minimum annual salaries, payable regardless of the disability of the
employee and under certain circumstances payable for a period of time after the
termination of the officer's actual employment. The agreements with Messrs.
Rinehart, Forster, Gregory, Twomey and Miranda provide for minimum annual
salaries of $700,000, $424,000, $328,000, $325,000 and $202,000, respectively.
Prior to their retirements, the agreements with Messrs. Deihl and De Kruif
provided for minimum annual salaries of $800,000 and $100,000, respectively.
The employment agreements with Messrs. Rinehart, Forster, Gregory, Twomey
and Miranda also provide that the employee may terminate the agreement at any
time with or without cause. Cause includes, among other things, Ahmanson's
failure to perform its obligations under the employment agreement. Upon
termination by the employee with cause or termination by Ahmanson without cause,
as defined in the employment agreements, Ahmanson is obligated to pay or provide
the employee, for a specified period of time after the date of termination, his
current salary, his current medical and other insurance type benefits and a
continuation of vesting of all unvested restricted stock, stock options, SARs
and certain deferred compensation awards. Such benefits will be paid or provided
to Messrs. Rinehart, Forster and Twomey for a period of three years, to Mr.
Gregory for a period of two years and to Mr. Miranda for a period of one year.
Special provisions apply in the event of the employee's death or receipt of any
salary, cash bonus or other benefits from another employer during the specified
period following such termination.
COMPENSATION OF DIRECTORS
Directors who are also employees of Ahmanson or any of its subsidiaries
receive no additional compensation for their services as directors, including
service on committees of the Board of Directors. Each other director receives an
annual fee of $24,000 for serving on the Board of Directors and $1,200 for each
meeting of the Board of Directors attended. Each member of the Executive
Committee receives an annual fee of $3,000 and each member of the Audit,
Compensation and Nominating Committee receives an annual fee of $2,400 for each
such committee on which the director serves. The Chairperson of the Audit
Committee receives an additional fee of $7,500 and each Chairperson of the
Compensation and Nominating Committees receives an additional fee of $3,000.
Each director receives an additional payment of $600 for each meeting of the
Executive Committee and $500 for each meeting of the Audit, Compensation or
Nominating Committee attended. Directors are reimbursed for travel and other
expenses related to attendance at Board of Directors and committee meetings.
Directors of Ahmanson who are not employees of Home Savings or any of its
subsidiaries receive an annual fee for service on committees of the Home Savings
Board of Directors if they do not also serve on the corresponding committee of
the Ahmanson Board of Directors, and they receive additional fees for attending
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meetings of the Home Savings Board of Directors or committees thereof that are
not held jointly with meetings of the Ahmanson Board of Directors or the
corresponding committees thereof. The Home Savings Board of Directors held no
meetings during 1993 separately from the Ahmanson Board of Directors. The Home
Savings Board of Directors has an Executive Committee, an Audit Committee and a
Community Reinvestment Act ("CRA") Committee. The Executive Committee is
composed of Robert H. Ahmanson, Richard H. Deihl (Chairperson), Robert Jacobson,
Charles R. Rinehart, Elizabeth Sanders and Arthur W. Schmutz and held four
meetings during 1993. Each member of the Executive Committee received an annual
fee of $3,000 and an additional fee of $400 for each meeting attended. The CRA
Committee is composed of Robert H. Ahmanson, Lodwrick M. Cook, David S. Hannah,
Robert Jacobson, Delia M. Reyes (Chairperson) and Elizabeth Sanders and held two
meetings during 1993. Each member of the CRA Committee received an annual fee of
$2,400 and an additional fee of $500 for each meeting attended. The Chairperson
of the CRA Committee received an additional fee of $3,000. The membership of the
Audit Committee of the Home Savings Board of Directors is the same as the
membership of the Audit Committee of the Ahmanson Board of Directors. The Audit
Committee of the Home Savings Board of Directors held no meetings during 1993
separately from the Audit Committee of the Ahmanson Board of Directors.
Ahmanson's Outside Director Retirement Plan is a nonqualified retirement
plan for directors of Ahmanson who are not also employees of Ahmanson or any of
its subsidiaries. Under the Plan a participating director receives an annual
retirement benefit equal to the director's annual fee during the 12 month period
immediately preceding the participant's retirement from the Board. Benefits
under this Plan generally are payable for a period equal to the participant's
aggregate years and months of service on the Board of Directors plus time spent
in certain governmental service, with a lifetime benefit payable to participants
with 15 or more years of service. Benefit payments commence when the participant
ceases being a director. Upon the death of the participant, the participant's
designated beneficiary is entitled to 50 percent of the benefits otherwise
payable to the participant. Such death benefits commence one month after the
participant's death and continue for the payment period applicable to the
participant or, if the participant had already begun receiving benefits under
the Plan, for the participant's remaining payment period with a maximum of 15
years of payment. The Plan permits participants to elect to receive a lump sum
benefit equal to 90 percent of the participant's accrued benefits at any time
after retirement.
Ahmanson's 1988 Directors' Stock Incentive Plan (the "1988 Plan") provides
for the grant to any director of Ahmanson who is not an employee of Ahmanson or
any of its present or future parent or subsidiary corporations (a "Nonemployee
Director") of stock options. Whenever any person becomes a Nonemployee Director,
such person is granted automatically options, the date of grant of which is the
date such person becomes a Nonemployee Director, to purchase 2,000 shares of
Ahmanson Common Stock. In addition, on the first business day of each calendar
year during the term of the 1988 Plan, each Nonemployee Director then in office
is granted automatically options to purchase 2,000 shares of Ahmanson Common
Stock. However, no Nonemployee Director may receive in any calendar year under
the foregoing provisions of the 1988 Plan options to purchase more than 2,000
shares of Ahmanson Common Stock.
Additional options will be granted automatically on the first business day
of each calendar year to any Nonemployee Director who files with Ahmanson an
irrevocable election to receive options in lieu of all or part of annual
directors' fees to be earned in each succeeding calendar year.
Options granted under the 1988 Plan may be exercisable for a term no longer
than ten years and one month. The options become exercisable one year after
grant (six months for options granted in lieu of directors' fees) as to half of
the shares subject to the options and two years (one year for options granted in
lieu of directors' fees) after grant as to the balance of the shares or, if
earlier, in full upon the director's death, disability or normal retirement or a
change in control of Ahmanson and expire three months after termination of
directorship other than as a result of death, disability or normal retirement.
Ahmanson also provides at no charge to its nonemployee directors health and
dental benefits and retireee health benefits substantially comparable to those
afforded to its employees under Ahmanson's group insurance plans.
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In connection with his retirement in 1986 Robert H. Ahmanson entered into
an agreement with Ahmanson that superseded his prior employment agreement. The
agreement provides, among other things, for the equivalent of a 100 percent
joint and survivor annuity which pays $75,000 annually, for the payment of
certain club dues on his behalf and for a death benefit of $250,000.
In connection with his retirement in 1987 William H. Ahmanson entered into
an agreement with Ahmanson that converted his prior employment agreement into a
consultant agreement. The consultant agreement required him to serve until
February 28, 1993 as a consultant to Ahmanson and, if elected, as a director of
Ahmanson or any of its subsidiaries. The agreement provided, among other things,
for the continuation until February 28, 1993 of annual payments to him of
$165,000. Ahmanson was also obligated until February 28, 1993 to provide an
automobile to him, to pay certain club dues on his behalf and to provide him
with benefits under Ahmanson's Executive Medical Reimbursement Plan and
Financial Counseling Plan. During the term of the agreement he was not eligible
for other benefits provided to nonemployee directors of Ahmanson.
In connection with his retirement in 1993 Robert M. De Kruif entered into a
consulting agreement with Ahmanson pursuant to which he will provide consulting
services to Ahmanson until October 31, 1994 and Ahmanson will pay $100,000. In
addition, pursuant to the terms of his prior employment agreement, Mr. De Kruif
will be paid $100,000 (the minimum annual salary provided by the agreement)
annually for seven years following his retirement on November 1, 1993.
CERTAIN TRANSACTIONS
The following table sets forth as to each present director and each present
executive officer of Ahmanson who had a home loan from Home Savings under the
home loan program described under "Compensation Committee Interlocks and Insider
Participation" (i) the largest aggregate indebtedness outstanding from January
1, 1993 to February 25, 1994, (ii) the amount of such indebtedness outstanding
on February 25, 1994 and (iii) the rate of interest on such indebtedness on
February 25, 1994.
HIGHEST
INDEBTEDNESS UNPAID BALANCE INTEREST RATE ON
SINCE ON FEBRUARY 25, FEBRUARY 25,
NAME DECEMBER 31, 1992 1994 1994
---- ----------------- --------------- ----------------
Richard H. Deihl(1)........ $ 518,977 $ 466,739 4.783%
Robert M. De Kruif(1)...... 186,523 179,427 4.822
George G. Gregory(1)(2).... 525,889 510,510 4.822
David S. Hannah(1)......... 471,940 453,158 5.072
George Miranda(2).......... 223,174 213,266 4.822
- ------------------
(1) Director.
(2) Executive Officer.
In August 1993 Ahmanson purchased a residence owned jointly by Mr. Twomey
and his spouse in connection with his joining Ahmanson. The purchase price of
$500,000 was determined by negotiation, taking into consideration the listing
price and two appraisals of the property. Mr. Twomey had acquired the residence
more than two years prior to the purchase by Ahmanson.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1993 Byron Allumbaugh, Richard M. Bressler, Bill Daniels, David S.
Hannah, Delia M. Reyes, Elizabeth Sanders, Arthur M. Schmutz and William D.
Schulte served on the Compensation Committee. David S. Hannah was an officer of
Ahmanson until his retirement in 1987.
Certain directors, including three members of the Compensation Committee,
officers and stockholders of Ahmanson and their associates were depositors,
borrowers and customers of and engaged in transactions with Home Savings, and
certain other subsidiaries of Ahmanson in the ordinary course of business during
1993. Similar transactions are expected to occur in the future. Except for loans
under the home loan program
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described in the following paragraph, all such loans and transactions were made
on substantially the same terms, including interest rates, fees and security, as
those prevailing at the time for comparable loans and transactions with other
persons and did not involve more than the normal risk of collectibility or
present any other unfavorable features.
For many years Home Savings had a home loan program under which directors,
officers and employees of Home Savings, Ahmanson and certain affiliated
companies could obtain loans, secured by a first deed of trust on the borrower's
principal residence, at a fixed rate at least one percent above Home Savings'
cost of funds for the first six months and adjusted thereafter based upon
changes in the monthly weighted average cost of funds of member institutions of
the Eleventh District of the Federal Home Loan Bank System as long as the
borrower remained, or retired as, a director, officer or employee of Home
Savings, Ahmanson or certain affiliated companies. The program currently
prohibits directors, executive officers and certain other senior officers from
obtaining loans at a discounted rate.
The following table sets forth as to each member of the Compensation
Committee who had a home loan from Home Savings under the home loan program
described above (i) the largest aggregate indebtedness outstanding from January
1, 1993 to February 25, 1994, (ii) the amount of such indebtedness outstanding
on February 25, 1994 and (iii) the rate of interest on such indebtedness on
February 25, 1994.
HIGHEST
INDEBTEDNESS SINCE UNPAID BALANCE ON INTEREST RATE ON
NAME DECEMBER 31, 1992 FEBRUARY 25, 1994 FEBRUARY 25, 1994
---- ------------------ ----------------- -----------------
David S. Hannah..... $471,940 $453,158 5.072%
Richard H. Deihl, Ahmanson's Chairman of the Board and, until his
retirement effective November 1, 1993, Chief Executive Officer, serves as a
director of ARCO and as a member of its Compensation Committee. Lodwrick M.
Cook, ARCO's Chairman of the Board and Chief Executive Officer, is a director of
Ahmanson but is not a member of Ahmanson's Compensation Committee.
Arthur W. Schmutz, a director of Ahmanson and a member of its Compensation
Committee, is a retired partner of the law firm of Gibson, Dunn & Crutcher,
which has represented Ahmanson and its subsidiaries for more than the past year
and continues to do so.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors, which is comprised
exclusively of nonemployee directors, is responsible for developing Ahmanson's
executive compensation polices, administering Ahmanson's various management
incentive programs, and making recommendations to the Board with respect to
those policies and programs. In addition, the Committee determines the
compensation paid to the Chief Executive Officer and to each of the other senior
officers of Ahmanson.
EXECUTIVE COMPENSATION POLICY
The policy of the Committee is to closely link the compensation of
Ahmanson's senior officers to Ahmanson's financial performance and the total
returns (price appreciation and dividends) generated for Ahmanson's
stockholders. To this end, it is the Committee's policy to generally position
senior officer salaries at median competitive levels and to rely on variable,
performance-based incentives to play a significant role in determining total
compensation. As a rule, Ahmanson's financial and stockholder return performance
must exceed the median performance of other comparable financial institutions
before executive total compensation exceeds median competitive practice.
Each year the Committee reviews external compensation data prepared by
Strategic Compensation Associates ("SCA"), a nationally recognized compensation
consulting firm, as a basis for confirming the competitiveness of officer
salaries and total compensation. The external data provided by SCA includes
information on base salary, annual cash compensation and annualized total
compensation for other large, financially sound savings institutions as well as
comparable-size regional banks with a meaningful portion of
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their loan portfolio focused on residential real estate. It is the Committee's
view that this group represents the most appropriate reference point for
establishing senior officer compensation levels within Ahmanson due to
similarities in size and management challenge between Ahmanson and the peer
group. In contrast, it is the Committee's view that differences in investor
perceptions regarding commercial banks and savings institutions make past
performance comparisons between banks and savings institutions problematic at
this time. Hence, the specialized peer group used for comparing Ahmanson's
stockholder return performance in the performance graph consists solely of other
large savings institutions.
The key components of Ahmanson's executive compensation program include
base salary, an annual incentive plan tied to the annual performance of Ahmanson
and the individual participant, and a long-term incentive program with earned
awards payable in stock options and cash, with payment based on Ahmanson's
financial and total stockholder return performance over a three-year period. In
keeping with the Committee's policy of linking senior officer pay closely to
performance, approximately 60 percent of the target total compensation of
Ahmanson's senior officer group consists of variable, performance-based
compensation delivered through the annual bonus and long-term incentive plans.
As described earlier in this proxy statement, each of Ahmanson's executive
officers is covered by an employment agreement which, among other things,
specifies a minimum annual base salary for each officer. See "Employment
Agreements" above. The Committee may, in its discretion, increase base salaries
above the minimum level specified in the agreements, but, in the absence of
cause, may not thereafter decrease salaries below those levels.
Based on external compensation information provided by SCA and reviewed by
the Committee in September 1993, the current base salaries of Ahmanson's senior
officer group as a whole fall approximately 10 percent below the median base
salaries of other comparable organizations. The target total compensation (the
sum of base salary, the target annual incentive opportunity and the target value
of long-term incentives) of the group falls approximately 15 percent below the
market median.
The 1993 Omnibus Budget Reconciliation Act ("OBRA") became law in August
1993. Under OBRA, income tax deductions of publicly-traded companies in tax
years beginning on or after January 1, 1994 may be limited to the extent that
total compensation (including base salary, annual and longer-term incentives,
gains from stock option exercises and certain benefits) for certain executive
officers exceeds $1 million. Under OBRA, the deduction limit does not apply to
payments which qualify as "performance-based." To qualify as
"performance-based," compensation payments must be based solely upon the
achievement of objective performance goals under a plan that is administered by
a committee of outside directors. In addition, the material terms of the plan
must be disclosed to and approved by stockholders, and the compensation
committee must certify that the performance goals were achieved before payments
can be made.
It is the intent of the Committee to structure Ahmanson's compensation
programs to conform with the OBRA legislation and related regulations so that
total compensation paid to any employee will not exceed $1 million in any one
year, except for compensation payments which qualify as "performance-based" or
are exempt for other reasons. However, Ahmanson may in limited circumstances pay
compensation which is not deductible if sound management of Ahmanson so
requires. In furtherance of Ahmanson's intention to structure compensation
programs to conform with the OBRA legislation, Ahmanson is requesting that its
stockholders approve Ahmanson's 1993 Stock Incentive Plan, which is designed to
permit performance-based equity awards, and approve the Executive Short-Term
Incentive Compensation Plan and Executive Long-Term Incentive Plan.
SHORT-TERM INCENTIVE PLAN
Ahmanson's short-term incentive plan for its senior officers provides for
an annual cash award opportunity based 50 percent on Ahmanson's performance
measured in terms of return on equity ("ROE") and total stockholder return
("TSR") relative to an external peer group, and 50 percent on the Committee's
assessment of each participant's individual performance during the plan year.
For purposes of calculating the Ahmanson performance portion of earned awards,
ROE is weighted 75 percent and TSR 25 percent. Ahmanson's ROE performance is
measured relative to a group of eleven savings institutions selected by the
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Committee based on their financial viability, their mortgage-related assets and
their similarity to Ahmanson in terms of size. Ahmanson's total stockholder
return performance is measured relative to the companies that comprise the S&P
500 and the S&P Banking Indices, each weighted equally. In addition, all
payments under the plan, including the portion based on individual performance,
are subject to Ahmanson's achievement of a five percent return on equity for the
plan year unless this threshold is waived by the Committee due to special
considerations. Such considerations may include special actions taken by
management in the best interests of Ahmanson which have a material adverse
impact on earnings and ROE during the plan year.
Target annual incentive awards are established for each participant ranging
from 65 percent of base salary for the chief executive officer and from 35
percent to 55 percent of base salary for other senior officers. Actual payments
may vary from zero percent to 150 percent of the target award based on the level
of company and individual performance achieved. Threshold awards equal to 50
percent of the company performance portion of the target award are available for
relative ROE and TSR achievement equal to the 40th percentile of the respective
peer group. The full company performance portion of the target award is
available for achieving 60th percentile ROE performance and 50th percentile TSR
performance.
Five of the institutions used to measure Ahmanson's relative ROE
performance also are included in the peer group used to compare Ahmanson's total
stockholder return performance in the performance graph. Differences between the
peer group used to determine annual incentives and the peer group used in the
performance graph occur for two primary reasons: (1) several of the institutions
used in the annual incentive peer group are mutual companies for which no
stockholder return data is available; and (2) because the performance graph is
intended to measure performance on a retroactive rather than a prospective
basis, the peer group used in the graph appropriately includes all savings
institutions comparable to Ahmanson as of the beginning of the measurement
period (1988). Several of these institutions either have failed or are not
considered by the Committee to be sufficiently viable from a financial
perspective to form an appropriate basis for measuring Ahmanson's performance
for incentive purposes.
For the twelve month performance measurement period ended on September 30,
1993, Ahmanson's relative ROE performance equalled approximately the 12th
percentile of the peer group, resulting in a zero payout for that portion of the
plan. For the same period, Ahmanson's relative TSR performance equalled
approximately the 61st percentile of the peer group, resulting in a formula
payout of 127 percent of target for that portion of the plan and a total formula
payout for company financial performance of approximately 32 percent of target.
Ahmanson's low percentile ranking in ROE resulted in large part from a decision
to sell a portion of Ahmanson's underperforming loans at a discount, which
required Ahmanson to accrue the entire discount as a charge to earnings in the
plan year. This action also had the effect of reducing Ahmanson's ROE below the
five percent threshold established for payments under the plan. Due to the
special nature of the loan sale and the fact that Ahmanson's total stockholder
performance exceeded the peer group median, the Committee elected to waive the
five percent ROE threshold and to pay awards under the plan consistent with the
formula pertaining to Ahmanson's relative performance and its assessment of
individual performance.
Beginning in 1994, annual incentive payments for Ahmanson's senior officer
group will be determined under Ahmanson's new Executive Short-Term Incentive
Compensation Plan, provided the stockholders approve the plan at the Annual
Meeting.
LONG-TERM INCENTIVE PLAN
Ahmanson's long-term incentive plan for its senior officers provides for an
annual award opportunity, payable one-half in cash and one-half in stock
options, based on Ahmanson's relative performance in ROE and TSR over a
three-year period compared to the same peer group used for the annual incentive
plan. For the long-term incentive plan, TSR is weighted 75 percent and ROE 25
percent. In addition, payments under the plan are subject to the same five
percent ROE threshold established for the annual incentive plan.
Similar to the annual incentive plan, target awards for each performance
measurement period are established for each plan participant and range from 180
percent of base salary for the Chief Executive Officer and from 85 percent to
160 percent of base salary for other senior officers. Actual payments under the
plan may vary from zero percent to 150 percent of the target award. A threshold
payment equal to 50 percent of the
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target award is available for achieving 40th percentile relative performance,
while target awards are available for achieving 50th percentile TSR performance
and 60th percentile ROE performance.
For the three-year performance cycle ended on September 30, 1993,
Ahmanson's relative ROE performance equalled approximately the 46th percentile
of the peer group, while Ahmanson's TSR performance equalled approximately the
43rd percentile of the group. This performance resulted in a formula payout
equal to approximately 64 percent of the target opportunity. For the reasons
cited above in the discussion of the annual incentive plan, Ahmanson failed to
achieve the five percent ROE threshold established for payments under the
long-term incentive plan. As with the annual incentive, the Committee elected to
waive the five percent threshold. However, in recognition of waiving the five
percent threshold, the Committee elected to pay 100 percent of all earned awards
under the long-term incentive plan in the form of ten-year stock options, with
an exercise price equal to the market price of Ahmanson's stock as of the date
of grant, rather than 50 percent in the form of such options and 50 percent in
cash.
CEO COMPENSATION
Richard H. Deihl was Chairman of the Board and Chief Executive Officer of
Ahmanson until his retirement on November 1, 1993, at which time Charles R.
Rinehart assumed the position of Chief Executive Officer and Mr. Deihl continued
to be Chairman of the Board.
During 1993 no change was made to Mr. Deihl's base salary of $800,000,
which was approximately equal to the median of the external market based on data
provided to the Committee by SCA. For the performance period ending on September
30, 1993, Mr. Deihl received a payment under Ahmanson's annual incentive plan of
$473,203, or approximately 91 percent of his target opportunity. This amount
consisted of a formula-based payment of $83,203 (32 percent of target) for
Ahmanson's relative performance in ROE and TSR and a discretionary payment of
$390,000 (150 percent of target) for individual performance. In determining the
individual portion of Mr. Deihl's annual incentive, the Committee took into
consideration Mr. Deihl's efforts in successfully and smoothly transitioning the
CEO role to Mr. Rinehart, the significant financial and strategic progress made
during the plan year to position Ahmanson for future success, the investment
community's positive reaction to these efforts as reflected in the strong
relative performance of Ahmanson's stock during the plan year, and Mr. Deihl's
efforts in successfully leading Ahmanson through particularly difficult times in
the savings institution industry and the recent recession.
On September 29, 1993 Ahmanson granted to Mr. Deihl an option with a
ten-year term to purchase 300,000 shares of its Common Stock for a purchase
price equal to the market price of the stock on the date of grant. The option
became exercisable upon his retirement and remains exercisable throughout the
remainder of the term. In addition Ahmanson contributed $1.5 million to Whittier
College to establish an endowment in honor of Mr. Deihl and his wife. The stock
option grant was made in consideration of Mr. Deihl's long and distinguished
career with Ahmanson and as compensation for his decision to remain with
Ahmanson in an unpaid capacity (except for normal director's fees) as Chairman
of the Board for two years following his retirement on November 1, 1993. In
consideration of the stock option grant and the contribution Mr. Deihl also
waived his right to be considered for a long-term incentive payment for the
three-year performance period ended September 30, 1993 and his right to
continued annual salary payments of $800,000 for three years under his
employment agreement. Such long-term incentive payment would have totaled
$920,000 based on the formula used to determine payouts for other participants
under the plan.
Effective October 1, 1993 Mr. Rinehart's salary was raised from $625,000 to
$700,000 (an increase of 12 percent). In determining the adjustment to Mr.
Rinehart's salary, the Committee took into consideration Mr. Rinehart's
considerable efforts to position Ahmanson for future success, his assumption of
the role of Chief Executive Officer and competitive data for comparable
positions provided by SCA. Based on the competitive data, the increase in Mr.
Rinehart's salary establishes his base compensation approximately 10 percent
below the market median for comparable positions.
For the performance measurement period ending on September 30, 1993, Mr.
Rinehart received a payment under Ahmanson's annual incentive plan of $312,817,
or approximately 91 percent of his target opportunity. This amount consisted of
a formula-based payment of $55,000 (32 percent of target) for
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Ahmanson's relative performance in ROE and TSR and a discretionary payment of
$257,817 (150 percent of target) for individual performance. In determining the
individual portion of Mr. Rinehart's annual incentive, the Committee took into
consideration his successful and smooth transition to the CEO role and his
significant contributions to the financial and strategic actions taken to
position Ahmanson for future success, as reflected in Ahmanson's strong relative
stock performance during the plan year.
For the three-year performance measurement period ending on September 30,
1993, Mr. Rinehart received an award payment under Ahmanson's long-term
incentive plan of $640,008 (64 percent of the target award) representing the
amount generated by the plan formula based on Ahmanson's relative ROE and TSR
performance over the period. Consistent with other plan participants, Mr.
Rinehart's entire long-term incentive payment was provided in the form of a
ten-year stock option, with an exercise price equal to the market price of
Ahmanson's stock as of the date of grant. The translation of Mr. Rinehart's
long-term incentive award payment into a stock option was determined by a
formula provided by SCA (which formula resulted in fewer options being granted
than if the Black-Scholes option valuation model were used) that determines the
cash-equivalent value of a stock option on the date of grant and that resulted
in a grant of an option to purchase 110,109 shares.
The foregoing report has been approved by the following members of the
Committee.
Byron Allumbaugh
Richard M. Bressler
Bill Daniels
David S. Hannah
Delia M. Reyes
Elizabeth Sanders
Arthur W. Schmutz
William D. Schulte
The report of the Compensation Committee shall not be deemed incorporated
by reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that Ahmanson specifically
incorporates this information by reference and shall not otherwise be deemed
filed under such Acts.
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STOCKHOLDER RETURN PERFORMANCE GRAPH
MEASUREMENT LARGE LARGE
PERIOD SAVINGS S&P S&P H.F. SAVINGS
(FISCAL YEAR INSTITUTIONS BANKING 500 AHMANSON INSTITUTIONS
COVERED) WEIGHTED INDEX INDEX & COMPANY UNWEIGHTED
- ------------ ------------ ------- ----- --------- ------------
1988 100 100 100 100 100
1989 112 122 132 121 88
1990 84 91 127 91 22
1991 181 138 166 123 41
1992 204 189 179 144 80
1993 209 209 197 153 104
Assumes $100 invested on December 31, 1988 in the stock of H.F.
Ahmanson & Company, the S&P Indices, other Large Savings
Institutions (weighted by market capitalization) and other Large
Savings Institutions (unweighted). Total Return assumes reinvestment
of dividends.
The cumulative total return shown on the performance graph indicates
historical results only and is not necessarily indicative of future results.
The above stock performance graph illustrates Ahmanson's performance in
total stockholder return over the period December 31, 1988 through December 31,
1993 relative to several external indices, including:
(1) the Standard & Poors 500 Index;
(2) the Standard & Poors Banking Index;
(3) a peer group of other major publicly-traded savings institutions
in existence as of December 31, 1988, weighted annually by market
capitalization (shares outstanding multiplied by stock price);1
(4) the above peer group without adjustment for market capitalization
(i.e., with each institution weighted equally).
Each line on the stock performance graph assumes that $100 was invested in
Ahmanson's Common Stock and the respective indices on December 31, 1988. The
graph then tracks the value of these investments, assuming reinvestment of
dividends, through December 31, 1993.
- ---------------
1This index includes CalFed, Inc., Coast Savings Financial, Inc., Columbia
Savings & Loan Association, CrossLand Savings, FSB, Dime Savings Bank of New
York, First Federal of Michigan, Gibraltar Financial Corp., GlenFed Inc., Golden
West Financial Corporation, Great Western Financial Corporation, HomeFed
Corporation and Meritor Savings Bank.
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Comparison of Ahmanson against the Standard & Poors 500 Index, the Standard
& Poors Banking Index and the peer group of other major publicly-traded savings
institutions weighted for market capitalization at the beginning of each year
presented is provided pursuant to SEC disclosure regulations. Comparison of
Ahmanson against the fourth index (i.e., the peer group without adjustment for
market capitalization) is included because, in the opinion of Ahmanson, it
represents the most meaningful comparison. This opinion is based primarily on
two important factors:
(1) The time frame over which performance is measured in the graph
(i.e., 1989 through 1993) represents a highly difficult period for the
savings institution industry, making a direct comparison of Ahmanson's
stock performance over this period to other industries through a general
market index, such as the Standard & Poors 500 Index or the Standard &
Poors Banking Index, highly problematic.
(2) A comparison of Ahmanson's performance against other major
publicly-traded savings institutions is realistic and valid. However,
weighting this comparison by market capitalization serves to significantly
understate the relative performance of Ahmanson by minimizing the impact of
those institutions which either failed or experienced a precipitous decline
in stock price during the measurement period. Specifically, 38.7 percent of
the market capitalization of the index as of December 31, 1988 consisted of
organizations which either performed poorly or failed over the 1989 to 1993
period. In contrast, these organizations represented only 1.8 percent of
the market capitalization of the index by year-end 1993.
The stock performance graph shall not be deemed incorporated by reference
by any general statement incorporating by reference this proxy statement into
any filing under the Securities Act of 1933 or under the Securities Exchange Act
of 1934, except to the extent that Ahmanson specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
PROPOSAL TO APPROVE AHMANSON'S 1993 STOCK INCENTIVE PLAN
The Board of Directors of Ahmanson has adopted the 1993 Stock Incentive
Plan (the "1993 Plan") pursuant to which officers, directors (excluding
nonemployee directors) and employees of Ahmanson or any of its subsidiaries will
be eligible to receive options to purchase Common Stock. The following is a
description of the material features of the 1993 Plan. The term "employees" in
the following discussion is used to refer to officers and directors (excluding
nonemployee directors) and other employees of Ahmanson or any of its
subsidiaries.
The purpose of the 1993 Plan is to enable Ahmanson to attract, retain and
motivate employees by providing for or increasing their proprietary interests in
Ahmanson. Designated employees of Ahmanson will be eligible to be considered for
the grant of awards under the 1993 Plan. Currently, approximately 200 employees
are eligible to participate under the 1993 Plan.
The maximum number of shares of Common Stock which may be issued pursuant
to awards granted under the 1993 Plan is 8,000,000 except that the maximum
number of such shares which may be issued as restricted stock is 3,500,000. The
maximum number of shares of Common Stock issuable pursuant to all awards granted
to any one employee during any calendar year is 300,000. In each case, the
foregoing numbers are subject to adjustments to prevent dilution. The closing
price of Ahmanson's Common Stock, $.01 par value, was $17.375 on March 25, 1994.
The 1993 Plan will be administered by a committee of disinterested outside
directors appointed by the Board of Directors of Ahmanson (the "Committee"). The
Committee will consist of two or more nonemployee directors of Ahmanson. The
Committee has full and final authority to select the employees to receive awards
and to grant such awards. Subject to the provisions of the 1993 Plan, the
Committee has a wide degree of flexibility in determining the terms and
conditions of awards and the number of shares to be issued pursuant thereto,
including conditioning the receipt or vesting of awards upon achievement by
Ahmanson of specified performance criteria. The expenses of administering the
1993 Plan will be borne by Ahmanson.
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The 1993 Plan authorizes the Committee to enter into any type of
arrangement with an eligible employee that, by its terms, involves or might
involve the issuance of Common Stock or any other security or benefit with a
value derived from the value of Common Stock. Awards to employees are not
restricted to any specified form or structure and may include, without
limitation, sales or bonuses of stock, restricted stock, stock options, reload
stock options, stock purchase warrants, other rights to acquire stock,
securities convertible into or redeemable for stock, stock appreciation rights,
phantom stock, dividend equivalents, performance units or performance shares. An
award to an employee may consist of one such security or benefit or two or more
of them in tandem or in the alternative.
An award granted under the 1993 Plan to an employee may contain such
vesting provisions or conditions as the Committee may prescribe, including a
provision accelerating the receipt of benefits upon the occurrence of specified
events, such as a change of control of Ahmanson or a dissolution, liquidation,
merger, reclassification, sale of substantially all of the property and assets
of Ahmanson or other significant corporate transaction. Any stock option granted
to an employee may be a tax-benefited incentive stock option or a nonqualified
stock option that is not tax benefited.
An award to an employee may permit the employee to pay all or part of the
purchase price of the shares or other property issuable pursuant thereto, and/or
to pay all or part of such employee's tax withholding obligation with respect to
such issuance, by (i) delivering previously owned shares of capital stock of
Ahmanson or cash or other property, (ii) reducing the amount of shares or other
property otherwise issuable pursuant to the award by the number of such shares
or the amount of such property equal in value to such purchase price or tax
obligation, or (iii) delivering a promissory note, the terms and conditions of
which will be determined by the Committee. If an option granted to an employee
permitted the employee to pay for the shares issuable pursuant thereto with
previously owned shares, the employee would be able to exercise the option in
successive transactions, starting with a relatively small number of shares and,
by a series of exercises using shares acquired from each such transaction to pay
the purchase price of the shares acquired in the following transaction, to
exercise an option for a large number of shares with no more investment than the
original share or shares delivered. Exercising an option by reducing the amount
of shares otherwise issuable has a similar effect.
Pursuant to Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), directors, certain officers and 10 percent
stockholders of Ahmanson are generally liable to Ahmanson for repayment of any
"short-swing" profits realized from any non-exempt purchase and sale of Common
Stock occurring within a six-month period. Rule 16b-3, promulgated under the
Exchange Act, provides an exemption from Section 16(b) liability for certain
transactions by an officer or director pursuant to an employee benefit plan that
complies with such rule. Specifically, the grant of an option under an employee
benefit plan that complies with Rule 16b-3 will not be deemed a purchase of a
security for Section 16(b) purposes. The 1993 Plan is designed to comply with
Rule 16b-3.
Subject to limitations imposed by law, the Board of Directors of Ahmanson
may amend or terminate the 1993 Plan at any time and in any manner. However, no
such amendment or termination may deprive the recipient of an award previously
granted under the 1993 Plan of any rights thereunder without his or her consent.
In addition, certain material amendments require stockholder approval to the
extent required by Rule 16b-3.
The following is a brief description of the federal income tax treatment
that will generally apply to awards made under the 1993 Plan, based on federal
income tax laws in effect on the date hereof. The exact federal income tax
treatment of awards will depend on the specific nature of any such award. Such
an award may, depending on the conditions applicable to the award, be taxable as
an option, an award of restricted or unrestricted stock, an award which is
payable in cash or otherwise.
Pursuant to the 1993 Plan, participants may be granted options which are
intended to qualify as incentive stock options ("ISOs"). Generally, the optionee
is not taxed, and Ahmanson is not entitled to a deduction, on the grant or
exercise of an ISO. However, if the optionee sells the shares acquired upon the
exercise of an ISO at any time within (i) one year after the date of exercise of
the ISO or (ii) two years after the date of grant of the ISO, then the optionee
will recognize ordinary income in an amount equal to the excess, if any, of the
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lesser of the sale price or the fair market value on the date of exercise over
the exercise price of the ISO. Ahmanson will generally be entitled to a
deduction in an amount equal to the amount of ordinary income recognized by the
optionee.
The grant of an option or other similar right to acquire stock that does
not qualify for treatment as an ISO is generally not a taxable event for the
optionee. Upon exercise of the option, the optionee will generally recognize
ordinary income in an amount equal to the excess of the fair market value of the
stock acquired upon exercise (determined as of the date of exercise) over the
exercise price of such option, and Ahmanson will be entitled to a deduction
equal to such amount.
Special rules will apply, however, if the optionee is subject to Section 16
of the Exchange Act and exercises a stock option within six months of its grant
date (the "Section 16(b) Period"). In such case, the optionee will not recognize
ordinary income and Ahmanson will not be entitled to a deduction until the
expiration of the Section 16(b) Period. Upon such expiration, the optionee will
recognize ordinary income, and Ahmanson will be entitled to a deduction, equal
to the excess of the fair market value of the stock (determined as of the
expiration of the Section 16(b) Period) over the option exercise price. As
described below, such an optionee may elect under Section 83(b) of the Internal
Revenue Code to recognize ordinary income on the date of exercise, in which case
Ahmanson would be entitled to a deduction at that time equal to the amount of
the ordinary income recognized.
Awards to employees under the 1993 Plan may also include stock sales, stock
bonuses or other grants of stock. Stock issued pursuant to these awards may be
subject to certain restrictions. Pursuant to Section 83 of the Internal Revenue
Code, stock sold or granted under the 1993 Plan will give rise to taxable income
at the earliest time at which such stock is not subject to a substantial risk of
forfeiture or is freely transferable for purposes of Section 83. At that time,
the holder will recognize ordinary income equal to the excess of the fair market
value of the shares (determined as of such time) over the purchase price, and
Ahmanson will be entitled to a deduction equal to such amount. If the holder of
the stock is a person subject to Section 16(b) and if the sale of the stock at a
profit could subject such person to suit under Section 16(b), income will be
recognized in accordance with the rules described above regarding stock issued
to such persons upon the exercise of an option, unless the holder makes an
election under Section 83(b) to recognize income on the date the stock is
issued.
Awards may be granted to employees under the 1993 Plan that do not fall
clearly into the categories described above. The federal income tax treatment of
these awards will depend upon the specific terms of such awards. Ahmanson will
generally be required to withhold applicable taxes with respect to any ordinary
income recognized by a participant in connection with awards made under the 1993
Plan.
The terms of the agreements pursuant to which specific awards are made to
employees under the 1993 Plan may provide for accelerated vesting or payment of
an award in connection with a change in ownership or control of Ahmanson. In
that event and depending upon the individual circumstances of the recipient
employee, certain amounts with respect to such awards may constitute "excess
parachute payments" under the golden parachute provisions of the Internal
Revenue Code. Pursuant to such provisions, an employee will be subject to a 20
percent excise tax on any "excess parachute payment" and Ahmanson will be denied
any deduction with respect to such excess parachute payment.
Section 162(m) of the Internal Revenue Code limits to $1 million the
deductibility of compensation received in a year by Ahmanson's chief executive
officer and the four other most highly compensated executive officers, unless
such compensation qualifies as "performance-based" or falls within other
exceptions under Section 162(m). This provision is effective only with respect
to compensation paid on or after January 1, 1994. Awards under the 1993 Plan may
qualify as "performance-based compensation," in which case Ahmanson would be
entitled to a deduction for compensation paid in the same amount as income is
realized by the employee without any reduction under Internal Revenue Code
Section 162(m).
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The following table shows grants made during 1993 under the 1993 Plan for
the individuals and groups set forth below subject to stockholder approval of
the 1993 Plan.
NUMBER OF SECURITIES
UNDERLYING OPTIONS
NAME AND POSITION GRANTED DURING 1993
----------------- --------------------
All executive officers (including all
"named executive officers")................... --
All non-executive officer directors............. --
All non-executive officer employees............. 571,251
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THIS PROPOSAL.
PROPOSAL TO APPROVE AHMANSON'S LONG-TERM INCENTIVE PLAN
The Compensation Committee has amended, and the Board of Directors has
approved and recommended for stockholder approval, the Executive Long-Term
Incentive Plan, applicable to awards made in 1994 (for the three year
performance measurement cycle commencing January 1, 1994) and thereafter. The
Board of Directors has determined to submit the Executive Long-Term Incentive
Plan to stockholders for their approval, in order to qualify the plan under
Section 162(m) of the Internal Revenue Code, discussed below.
The Board of Directors believes the Compensation Committee should have the
flexibility to make awards to executive officers and other key employees to
recognize individual performance. However, under Section 162(m) of the Internal
Revenue Code as enacted by the Omnibus Budget Reconciliation Act of 1993
("OBRA"), tax deductions would not be available to Ahmanson for benefits paid to
certain executive officers to the extent that any such executive officer's total
annual compensation exceeds $1 million unless the benefits are paid pursuant to
a plan which, among other things, is approved by Ahmanson's stockholders.
Senior executives of Ahmanson and its subsidiaries who are designated by
the Compensation Committee are eligible to participate in the Executive
Long-Term Incentive Plan. Participants are assigned a target award opportunity
expressed as a percentage of base annual salary in the last year of the
performance measurement cycle. The maximum cash award that may be paid to any
participant under the Executive Long-Term Incentive Plan for a performance
measurement cycle is $2 million. There are currently approximately 15 officers
eligible to participate in the Executive Long-Term Incentive Plan.
Half of the target award will be paid in the form of nonqualified stock
options relating to Ahmanson's Common Stock which are granted at the beginning
of the performance measurement cycle (provided, however, that for the
performance measurement cycle commencing January 1, 1994, any grants of options
will be made at the end of the performance measurement cycle). Such options will
be granted under Ahmanson's 1993 Stock Incentive Plan, will become exercisable
in full six months after the date of grant, will have a term of ten years (but,
if earlier, will expire three months after termination of employment other than
as a result of death, disability or retirement) and will have an exercise price
per share equal to the average of the high and low trading prices of Ahmanson's
Common Stock on the date of grant.
Half of the target award will be the basis for cash payments at the end of
the performance measurement cycle. The actual cash award earned by a participant
will be based on objective measures determined by the Compensation Committee
before each performance measurement cycle which are based upon any or all of the
following criteria: absolute or relative total stockholder return, absolute or
relative return on tangible equity and absolute or relative return on assets.
The Compensation Committee must certify in writing that an applicable
performance objective was satisfied before the payment of the related award.
The Compensation Committee will have no discretion to increase the award
amounts. However, the actual cash award earned is subject to reduction of up to
20 percent based upon an assessment of the executive's performance during the
last 12 months of the performance measurement cycle. The Compensation Committee
may, in its discretion, determine not to pay cash awards under the Plan if Home
Savings' core
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capital is below the level mandated by law. The amount of benefits which will be
paid under the Executive Long-Term Incentive Plan to any one participant, or the
amount which would have been paid had the Executive Long-Term Incentive Plan
been in effect in the last year, is not determinable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THIS PROPOSAL.
PROPOSAL TO APPROVE AHMANSON'S SHORT-TERM INCENTIVE PLAN
The Compensation Committee has amended, and the Board of Directors has
approved and recommended for stockholder approval, the Executive Short-Term
Incentive Plan, applicable to awards for 1994 performance and thereafter. The
Board of Directors has determined to submit the Executive Short-Term Incentive
Plan to stockholders for their approval, in order to qualify the plan under
Section 162(m) of the Internal Revenue Code, discussed below.
The Board of Directors believes the Compensation Committee should have the
flexibility to make awards to executive officers and other key employees to
recognize individual performance. However, under Section 162(m) of the Internal
Revenue Code as enacted by OBRA, tax deductions would not be available to
Ahmanson for awards made to certain executive officers to the extent that any
such executive officer's total annual compensation exceeds $1 million unless the
awards are made pursuant to a plan which, among other things, is approved by
Ahmanson's stockholders.
Key management employees of Ahmanson and its subsidiaries who are
designated by the Compensation Committee are eligible to participate in the
Executive Short-Term Incentive Plan. Participants are assigned a target award
opportunity expressed as a percentage of base annual salary. The maximum cash
award which may be paid to any participant under the Executive Short-Term
Incentive Plan in a plan year is $2 million. There are currently approximately
400 officers eligible to participate in the Executive Short-Term Incentive Plan.
The actual award earned by a participant will be based on objective
measures determined by the Compensation Committee before each plan year (except
the objective measures for 1994 which were determined in March 1994) which are
based upon any or all of the following criteria: actual company performance
versus budgeted earnings per share, return on assets, return on equity, general
and administrative expenses or market penetration. The Compensation Committee
must certify in writing that an applicable performance objective was satisfied
before the payment of the related award. The Compensation Committee may from
time to time pay annual bonuses based upon other criteria, but such bonuses
would not qualify for the exclusion from the $1 million limitation of deductible
compensation under Section 162(m).
Awards under the Executive Short-Term Incentive Plan generally will be paid
in cash. The Compensation Committee will have no discretion to increase the
award amounts. However, the actual award earned is subject to reduction at the
discretion of the Compensation Committee based upon an assessment of the
participant's performance, the performance of the business unit or
organizational area of Ahmanson and its subsidiaries that directly employs the
participant and the performance of Ahmanson and its subsidiaries in areas not
adequately reflected in the objective measures previously determined by the
Compensation Committee. The Compensation Committee may, in its discretion,
determine not to pay awards under the Plan if Home Savings' core capital is
below the level mandated by law. The amount of benefits which will be paid under
the Executive Short-Term Incentive Plan to any one participant, or the amount
which would have been paid had the Executive Short-Term Incentive Plan been in
effect in the last year, is not determinable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THIS PROPOSAL.
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OTHER MATTERS
At the time of the preparation of this Proxy Statement, the Board of
Directors of Ahmanson was not aware of any matters which would be presented for
action at the Annual Meeting other than those specifically identified in the
Notice of Annual Meeting accompanying this Proxy Statement. Should any other
matters come before the meeting, action may be taken thereon pursuant to the
proxies in the form enclosed, which confer discretionary authority on the
persons named therein or their substitutes with respect to such matters.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick ("Peat Marwick"), the independent certified public
accountants for Ahmanson and its subsidiaries in 1993, have been selected by the
Board of Directors to continue to serve Ahmanson in that capacity for 1994.
Representatives of Peat Marwick are expected to be present at the Annual Meeting
of Stockholders to make a statement should they desire to do so and will be
available to respond to appropriate questions which may be asked by
stockholders.
Peat Marwick performs both audit and non-audit professional services for
and on behalf of Ahmanson and its subsidiaries. During 1993 the audit services
included examination of the consolidated financial statements of Ahmanson,
examination of the financial statements of subsidiaries of Ahmanson and a review
of certain filings with the Securities and Exchange Commission and other
regulatory agencies.
STOCKHOLDER PROPOSAL FOR THE 1995
ANNUAL MEETING OF STOCKHOLDERS
Any eligible stockholder of Ahmanson wishing to have a proposal considered
for inclusion in Ahmanson's 1995 proxy solicitation materials must set forth
such proposal in writing and file it with the Secretary of Ahmanson on or before
December 1, 1994. The Board of Directors of Ahmanson will review new proposals
received by that date from eligible stockholders and will determine whether such
proposals will be included in its 1995 proxy solicitation materials. Generally a
stockholder is eligible to present proposals if such stockholder has been for at
least one year the record or beneficial owner of at least one percent or $1,000
in market value of securities entitled to be voted at the 1995 Annual Meeting of
Stockholders and such stockholder continues to own such securities through the
date on which the meeting is held.
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H.F. AHMANSON & COMPANY
P PROXY SOLICITED BY BOARD OF DIRECTORS
The undersigned acknowledges receipt of the Notice of Annual Meeting and
R Proxy Statement, each dated March 31, 1994, and hereby appoints Richard
H. Deihl, Byron Allumbaugh, Lodwrick M. Cook, Robert M. De Kruif and
Charles R. Rinehart, and each of them, acting by a majority or by one of
O them if only one is acting, with power of substitution, the agent and proxy
of the undersigned to vote the shares of common stock of H. F. Ahmanson &
Company, a Delaware corporation ("Ahmanson"), standing in the name of the
X undersigned at the Annual Meeting of Stockholders to be held on May 10,
1994, and at any adjournment or postponement thereof, with respect to the
following:
Y
1. Election of directors:
Nominees -- Robert H. Ahmanson, William H. Ahmanson, Byron Allumbaugh,
Richard M. Bressler, Lodwrick M. Cook, Richard H. Deihl, Robert M.
De Kruif, David S. Hannah, Delia M. Reyes, Charles R. Rinehart,
Elizabeth Sanders, Arthur W. Schmutz and William D. Schulte.
(change of address/comments)
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
(If you have written in the above space, please mark the corresponding
box on the reverse side of this card)
THIS PROXY WILL BE VOTED AS DIRECTED ON THE REVERSE SIDE. IN THE ABSENCE OF ANY
DIRECTION, THIS PROXY WILL BE VOTED FOR THE NOMINEES FOR DIRECTOR NAMED ABOVE
AND FOR PROPOSALS 2, 3 AND 4.
SEE REVERSE SIDE
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
1. For, except vote withheld from the following nominee(s):
[ ] FOR [ ] WITHHELD
__________________________________________________________________________
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR:
2. To consider and vote upon a proposal to approve Ahmanson's 1993 Stock
Incentive Plan. [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To consider and vote upon a proposal to approve Ahmanson's Executive
Long-Term Incentive Plan. [ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To consider and vote upon a proposal to approve Ahmanson's Executive
Short-Term Incentive Plan. [ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before such meeting or any
adjournment thereof.
SIGNATURE(S) ________________________________________________ DATE ____________
NOTE: Please sign exactly as name appears above. Joint owners each should sign.
Fiduciaries should add their full title to their signature. Corporations
should sign in full corporate name by an authorized officer. Partnerships
should sign in partnership name by an authorized person.