HOMESIDE INC, DEF 14A, 1997-05-21

HOMESIDE INC
DEF 14A, 1997-05-21
MORTGAGE BANKERS & LOAN CORRESPONDENTS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No. __)

Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|

Check the appropriate box:

|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12

HOMESIDE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

|X| No fee required.
|_| $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.

1) Title of each class of securities to which transaction applies:

______________________________________________________________________

2) Aggregate number of securities to which transaction applies:

______________________________________________________________________

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

______________________________________________________________________

4) Proposed maximum aggregate value of transaction:

______________________________________________________________________

5) Total fee paid:

______________________________________________________________________

|_| Fee paid previously by written preliminary materials.

|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

1) Amount Previously Paid: ________________________________________________

2) Form, Schedule or Registration Statement No. ___________________________

3) Filing Party: __________________________________________________________

4) Date Filed: ____________________________________________________________

<PAGE>

HOMESIDE, INC.

NOTICE OF 1997 ANNUAL MEETING
OF STOCKHOLDERS

JUNE 10, 1997

To the Stockholders:

The Annual Meeting of Stockholders of HomeSide, Inc. will be held on
Tuesday, June 10, 1997 at 10:00 a.m. at the Sawgrass Marriott, 1000 TPC
Boulevard, Ponte Vedra Beach, Florida 32082 for the following purposes:

1. To elect a Board of Directors to serve until the next Annual Meeting
of Stockholders, as more fully described in the accompanying Proxy
Statement.

2. To consider and act upon any other business which may properly come
before the meeting.

The Board of Directors has fixed the close of business on April 16, 1997 as
the record date for the meeting. All stockholders of record on that date are
entitled to notice of and to vote at the meeting.

PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING IN PERSON.

By order of the Board of Directors,

Robert J. Jacobs, Secretary

Jacksonville, Florida
May 21, 1997

<PAGE>

HOMESIDE, INC.

PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of HomeSide, Inc. (the "Company") for use at
the Annual Meeting of Stockholders to be held on Tuesday, June 10, 1997, at the
time and place set forth in the Notice of Meeting, and at any adjournment
thereof. The approximate date on which this Proxy Statement and enclosed form of
proxy are first being sent to stockholders is May 21, 1997.

If the enclosed proxy is properly executed and returned, it will be voted
in the manner directed by the stockholder. If no instructions are specified with
respect to any particular matter to be acted upon, proxies will be voted in
favor thereof. Any person giving the enclosed form of proxy has the power to
revoke it by voting in person at the meeting, or by giving written notice of
revocation to the Secretary of the Company at any time before the proxy is
exercised.

The holders of a majority in interest of all Common Stock issued,
outstanding and entitled to vote are required to be present in person or be
represented by proxy at the meeting in order to constitute a quorum for the
transaction of business. The election of nominees for director will be decided
by plurality vote. Abstentions are counted as present in determining whether the
quorum requirement is satisfied.

The Company will bear the cost of this solicitation. It is expected that
the solicitation will be made primarily by mail, but regular employees or
representatives of the Company (none of whom will receive any extra compensation
for their activities) may also solicit proxies by telephone, telegraph or in
person and arrange for brokerage houses and their custodians, nominees and
fiduciaries to send proxies and proxy materials to their principals at the
expense of the Company.

The Company's principal executive offices are located at 7301 Baymeadows
Way, Jacksonville, Florida 32256, telephone number (904) 281-3000.

RECORD DATE AND VOTING SECURITIES

Only stockholders of record at the close of business on April 16, 1997 are
entitled to notice of and to vote at the meeting. On that date, the Company had
outstanding and entitled to vote 43,375,430 shares of Common Stock with a par
value of $.01 per share. Each outstanding share of the Company's Common Stock
entitles the record holder to one vote.

ELECTION OF DIRECTORS

The persons named in the accompanying proxy, unless otherwise instructed by
the stockholder giving the proxy, intend to elect as directors the 11 nominees
listed below, each such

<PAGE>

director to hold office until the next annual meeting and until his or her
successor shall be duly elected and qualified.

In the event that any of the nominees should become unwilling or unable to
accept nomination or election as a director, which is not anticipated, the proxy
will be voted for the election of such substitute nominees as management may
recommend. In no event will the proxy be voted for the election of more than 11
directors. Should management not recommend a substitute for any nominee, the
proxy will be voted for the election of the remaining nominees. None of the
nominees are related to any other nominee or to any executive officer of the
Company.

<TABLE>
<CAPTION>
Position with the Company Year First
or Principal Occupation Elected a
Name of Nominee During the Past Five Years Age Director
- --------------- -------------------------- --- --------
<S> <C> <C> <C>
Joe K. Pickett Chairman of the Board, Chief Executive Officer and a 51 1996
Director of the Company since March 14, 1996. Chairman
of the Board and Chief Executive Officer of the Company's
wholly-owned subsidiary HomeSide Lending, Inc.
("HomeSide") since April, 1990. Director of Fannie Mae
and Baptist Medical Center, Jacksonville, Florida.

Hugh R. Harris President, Chief Operating Officer and a Director of the 45 1996
Company since March 14, 1996. President and Chief
Operating Officer of HomeSide since January, 1993.
Previously, Vice Chairman of HomeSide. Director of
Republic Mortgage Insurance Company.

Thomas M. Hagerty Managing Director, Thomas H. Lee Company, where he has 34 1995
been employed since 1988. President of the Company from
its organization on December 11, 1995 to March 14, 1996.
Treasurer of the Company from March 14, 1996 to October
1996. Vice President and Trustee of THL Equity Trust III,
the General Partner of THL Equity Advisors III Limited
Partnership, which is the General Partner of Thomas H. Lee
Equity Fund III, L.P. Director of Select Beverages, Inc.

David V. Harkins Senior Managing Director, Thomas H. Lee Company, where 55 1995
he has been employed since 1986. Senior Vice President
and Trustee of Thomas H. Lee Advisors I and T.H. Lee
Mezzanine II, affiliates of ML-Lee Acquisition Fund L.P.
and the ML-Lee Acquisition Funds, respectively. President
and Trustee of THL Equity Trust III, the General Partner of
THL Equity Advisors III Limited Partnership, which is the
General Partner of Thomas H. Lee Equity Fund III, L.P.
Chairman and Director of National Dentex Corporation,
Director of Stanley Furniture Company, Inc. and First Alert,
Inc.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Position with the Company Year First
or Principal Occupation Elected a
Name of Nominee During the Past Five Years Age Director
- --------------- -------------------------- --- --------
<S> <C> <C> <C>
Justin S. Huscher Vice President of Madison Dearborn Partners, Inc. since 43 1995
January 1993. From April 1990 until January 1993, Senior
Investment Manager of First Chicago Venture Capital.
Member of operating committees of the General Partners of
Huntway Partners L.P. and Golden Oak Mining Company,
L.P., respectively, and Director of Bay State Paper Holding
Company.

Peter J. Manning Executive Vice President, Mergers & Acquisitions of 57 1995
BankBoston, N.A. and BankBoston Corporation since 1993.
From 1990 to 1993, Executive Vice President, Chief
Financial Officer and Treasurer of BankBoston Corporation
and Chief Financial Officer of BankBoston, N.A.

William J. Shea Vice Chairman, Chief Financial Officer and Treasurer of 48 1996
BankBoston Corporation since October 28, 1993. From
December 1992 through October 28, 1993, Executive Vice
President, Chief Financial Officer and Treasurer of
BankBoston Corporation. Previously Vice Chairman and
Senior Partner, Coopers & Lybrand.

Kathleen M. McGillycuddy Group Executive Director, Global Treasury of BankBoston, 47 1996
N.A., where she has been employed since 1992.
Previously Executive Vice President, Corporate
Liquidity and Funds Management at Fleet/Norstar
Bank.

Hinton F. Nobles, Jr. Since 1989, Executive Vice President and member of the 51 1996
Management Executive Committee of Barnett Banks, Inc.
("Barnett") where he has been employed since 1974.

Douglas K. Freeman Chief Consumer Credit Executive and member of the 46 1996
Management Operating Committee of Barnett. From 1991
to 1995, Chief Corporate Banking Executive of Barnett.
Chair of the Governor's Capital Partnership Board of
Florida and Director of The Small Business Foundation of
America, Inc.

Charles W. Newman Chief Financial Officer and member of the Management 47 1996
Executive Committee of Barnett since 1992. Previously,
Vice President and Deputy Controller, Senior Vice President
and Controller and Executive Vice President of Barnett.
</TABLE>

<PAGE>

BOARD MEETINGS AND COMMITTEES OF THE BOARD

During the fiscal year ended February 28, 1997 there were 5 meetings of the
Board of Directors of the Company. All of the Directors attended at least 75% of
the aggregate of (i) the total number of meetings of the Board of Directors and
(ii) the total number of meetings held by committees of the Board of Directors
on which they served. The Board of Directors does not have a nominating
committee.

The Board of Directors has a Compensation Committee composed of Douglas K.
Freeman, David V. Harkins and William J. Shea, Chairman. The Compensation
Committee determines the compensation to be paid to the key officers of the
Company and administers the Company stock option plans. Prior to the Company's
initial public offering of Common Stock on January 30, 1997, the functions of
the Compensation Committee were discharged by the full Board. The Committee met
for the first time following the close of the fiscal year ended February 28,
1997.

The Board of Directors also has an Audit Committee, presently composed of
Justin S. Huscher, Peter J. Manning and Charles W. Newman, Chairman, which
reviews with the Company's independent auditors the scope of the audit for the
year, the results of the audit when completed and the independent auditors's fee
for services performed. The Audit Committee also recommends independent auditors
to the Board of Directors and reviews with management various matters related to
its internal accounting controls. During the last fiscal year there were two
meetings of the Audit Committee.

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table and the paragraphs that follow set forth information with
respect to the beneficial ownership of shares of the Company's voting securities
as of March 31, 1997 by (i) all shareholders of the Company who own more than 5%
of any class of such voting securities; (ii) each director who is a stockholder;
(iii) certain executive officers; and (iv) all directors and executive officers
as a group, as determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934 and the rules thereunder.

<PAGE>

<TABLE>
<CAPTION>
Amount and Nature of
Name of Beneficial Owner Title of Class Beneficial Ownership Percentage of Class
- ------------------------ -------------- -------------------- -------------------
<S> <C> <C> <C>
BankBoston, N.A. Common Stock 11,461,400 26.42%
100 Federal Street
Boston, MA

Siesta Holdings, Inc. Common Stock 11,461,400 26.42%
3800 Howard Hughes
Parkway, Suite 1560
Las Vegas, NV

THL (a) Common Stock 8,596,050 19.82%
75 State Street
Boston, MA

Madison Dearborn Capital Common Stock 2,865,350 6.61%
Partners, L.P.
Three First National Plaza
Chicago, IL

Joe K. Pickett Common Stock 78,224 *

Hugh R. Harris Common Stock 72,862 *

Kevin D. Race Common Stock 29,155 *

Charles D. Gilmer Common Stock 34,000 *

William Glasgow, Jr. Common Stock 43,724 *

Mark F. Johnson Common Stock 48,620 *

Thomas M. Hagerty Common Stock 25,194(b) *

David V. Harkins Common Stock 39,661(c) *

All Directors and Executive Common Stock 432,346(d) *
Officers as a Group
(21 persons)
</TABLE>

- --------------------

* Less than 1%

(a) Thomas H. Lee Equity Fund III, L.P. and certain affiliates of Thomas H. Lee
Company are herein collectively referred to as "THL."

(b) Does not include 8,570,856 shares owned by THL, as to which Mr. Hagerty
disclaims beneficial ownership.

<PAGE>

(d) Does not include the shares held by THL, Madison Dearborn Capital Partners,
L.P. ("MDP"), BankBoston, N.A. ("BankBoston") and Siesta Holdings, Inc.,
("Siesta") (each a "Principal Shareholder" and collectively referred to
herein as the "Principal Shareholders"), with which certain directors are
affiliated.

The Company was formed on December 11, 1995 to acquire HomeSide (formerly
BancBoston Mortgage Corporation) the mortgage banking subsidiary of BankBoston
Corporation. That acquisition was completed on March 15, 1996. On May 31, 1996
the Company acquired HomeSide Holdings, Inc. (formerly Barnett Mortgage
Company), the mortgage banking subsidiary of Barnett Banks, Inc. ("Barnett").

In addition to those shares of capital stock set forth in the preceding
table, 97,138 shares of Class C Common Stock (non-voting) of the Company are
beneficially owned by Robert Morrissey, constituting 100% of the outstanding
Class C Common Stock. Within 180 days of the initial public offering of Common
Stock of the Company in January 1997, a holder of Class C Common Stock may
require the Company to purchase any portion of its shares of Class C Common
Stock at a price based upon the average bid prices of the Common Stock for the
preceding 20 days. In addition, upon consummation of a merger or sale of
substantially all of the assets of the Company, a holder of Class C Common Stock
may require the Company to purchase any portion of its shares of Class C Common
Stock at an appraised fair market value price.

COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION

During the fiscal year ended February 28, 1997, the members of the
Compensation Committee were David V. Harkins, William J. Shea, Douglas K.
Freeman and Edward A. O'Neal. Mr. O'Neal, who was an officer of BankBoston
Corporation, resigned from the Board of Directors of the Company in October,
1996 and was succeeded by Mr. Shea. Each of the members of the Compensation
Committee is an employee of a Principal Shareholder of the Company.

Amended and Restated Shareholder Agreement

Each of the Principal Shareholders and certain other stockholders named
therein entered into an Amended and Restated Shareholder Agreement with the
Company dated May 31, 1996 in connection with the acquisition of Barnett
Mortgage Company (the "Shareholder Agreement"). The Shareholder Agreement
terminated upon the consummation of the January 1997 public offering of Common
Stock of the Company, except for provisions pursuant to which the Company has
agreed not to enter into transactions with certain affiliated parties except on
terms which the Company could have received in comparable arms-length
transactions.

<PAGE>

Amended and Restated Registration Rights Agreement

Subject to certain limitations, pursuant to the Amended and Restated
Registration Rights Agreement among the Company and the Principal Shareholders
dated May 31, 1996, upon the request of (i) holders of shares of Common Stock of
the Company aggregating more than 50% of the number of shares of such Common
Stock then held by THL, (ii) BankBoston, (iii) MDP, or (iv) Siesta (provided
that no request may be made for registration of securities with an expected
aggregate offering price to the public of less than $20,000,000), the Company
will use its best efforts to effect the registration of the Common Stock of the
Company requested by such stockholder to be registered and the Common Stock of
all other holders who have requested registration in connection therewith;
provided that the Company is not required to effect more than two registrations
pursuant to any request made by any of the foregoing parties. Under certain
circumstances, if the Company proposes to register shares of its Common Stock,
it will, upon the written request of any stockholder, register such requesting
stockholder's Common Stock, subject to pro rata reduction in the event all
securities requested to be included in the registration statement cannot, in the
opinion of the managing underwriter, be so included.

Exclusive Marketing Agreements

HomeSide has entered into a Marketing Agreement dated March 15, 1996 (the
"BKBC Marketing Agreement") with BankBoston Corporation ("BKBC") pursuant to
which HomeSide and BKBC may market services to HomeSide customers who are also
BKBC customers ("BKBC Customers") and other customers of HomeSide. Under this
agreement: (a) HomeSide has the exclusive right, subject to certain limitations,
to market to all customers any mortgage loan refinancings, (b) HomeSide has the
non-exclusive right to market first mortgage loans (other than refinancings) to
BKBC Customers and the exclusive right to market such loans to other HomeSide
customers, (c) HomeSide has the exclusive right to market "other" mortgage loans
to customers who are not BKBC Customers, and BKBC has the exclusive right to
market such mortgage loans to BKBC Customers, (d) HomeSide has the non-exclusive
right, subject to certain limitations, to offer certain "Eligible Products"
(mortgage credit insurance, relocation services, title insurance, title search,
appraisal services, private mortgage insurance, escrow services, hazard
insurance services and certain other products) to BKBC Customers and the
exclusive right to offer Eligible Products to other customers, and (e), BKBC has
the exclusive right to offer certain banking services to BKBC Customers and the
non-exclusive right to offer such services to other customers.

Under the BKBC Marketing Agreement, BKBC may not engage in a formal program
to solicit HomeSide's customers for refinancings.

The term of the BKBC Marketing Agreement is the later of: (a) eight years,
or (b) the third anniversary of the termination of the Operating Agreement
(which has a term of five years). See "-- Other BKBC Agreements -- Operating
Agreement" below.

<PAGE>

HomeSide has also entered into a Marketing Agreement dated May 31, 1996
(the "Barnett Marketing Agreement") with Barnett which is substantially similar
PMto the BKBC Marketing Agreement, except that it governs rights with respect to
"Barnett Customers" as defined therein rather than with respect to BKBC
Customers.

HomeSide does not pay any fee or monies (other than certain reimbursement
obligations) to BKBC or Barnett for its marketing and other rights under the
BKBC Marketing Agreement or Barnett Marketing Agreement.

Transitional Services Agreements

BankBoston and its affiliate banks (the "BKB Banks") and HomeSide have
entered into a series of Transitional Services Agreements dated March 15, 1996,
pursuant to which the BKB Banks agreed to make available to HomeSide, at the BKB
Banks' cost, certain corporate services, including travel and relocation,
general ledger support, audit, payroll, retirement plans, computer services,
disbursement accounting, purchasing, telecommunications/workstation support and
human resources. HomeSide also agreed to make available to the BKB Banks, at
HomeSide's cost, certain administrative services, including mortgage loan
origination support, mortgage loan quality control services, affordable housing
loan support and pledged loan support services. For the period March 16, 1996
through February 28, 1997, HomeSide paid to BKB Banks approximately $2.5 million
under such Transitional Services Agreements.

Barnett and HomeSide have entered into a Transitional Services Agreement
dated May 31, 1996, pursuant to which Barnett agreed to make available to
HomeSide office space and certain corporate services, including finance
services, accounting services, purchasing services, benefits and compensation
administration, human resources and staffing services and technology services.
HomeSide pays Barnett a monthly fee based on rates established under a fee
schedule for the different services provided to HomeSide. For the period March
16, 1996 through February 28, 1997, HomeSide paid to Barnett approximately $0.9
million under such Transitional Services Agreement.

The terms of the services provided under the Transitional Services
Agreements vary. As a general matter, the services will be provided to the
receiving party until the receiving party no longer requires the services, but
in no event later than December 31, 1996. The term has been extended to June 30,
1997 with respect to some services.

Other BKBC Agreements

Operating Agreement

The BKB Banks and HomeSide have entered into an Operating Agreement, dated
March 15, 1996 (the "BKBC Operating Agreement"), which sets forth the parties'
roles with respect to new loan originations and servicing rights. With certain
exceptions, the BKB Banks are required

<PAGE>

to sell all mortgage loan production to HomeSide during the term of the BKBC
Operating Agreement. In particular, among other things, the BKBC Operating
Agreement: (a) describes the mortgage loan products to be purchased by HomeSide
from BKB Banks, (b) ensures that the BKB Banks receive the most favorable
pricing and service released premiums offered by HomeSide to correspondent
lenders, (c) describes HomeSide's customer service levels, (d) sets forth
warehouse and pipeline management rights and obligations, (e) describes the
technology support which the parties provide to one another, (f) describes the
mortgage loan production and support functions to be provided by the parties,
(g) describes the reports and information provided periodically by HomeSide to
the BKB Banks, including, but not limited to, risk management, internal
performance and management reports, (h) sets forth the penalties to be paid by
the BKB Banks for failing to satisfy the buy price expiration dates, (i)
describes BKB Banks' mortgage loan repurchase obligations, and (j) restricts
HomeSide's ability to sell servicing rights relating to BKB Banks' portfolio
mortgage loans.

The term of the BKBC Operating Agreement is five years. The termination of
the BKBC Operating Agreement will not affect HomeSide's right to service
mortgage loans serviced prior to the termination date.

Correspondent Loan Purchase and Sale Agreement

HomeSide and the BKB Banks have also entered into a Correspondent Loan
Purchase and Sale Agreement, dated March 15, 1996 (the "BKB Correspondent Loan
Purchase Agreement"), which describes the mortgage loans eligible for sale to
HomeSide by BKB, and related pricing and delivery requirements for such loans.
The BKB Banks receive the most favorable pricing offered by HomeSide to
correspondent lenders. For the period March 16, 1996 through February 28, 1997,
HomeSide paid approximately $4.7 million to the BKB Banks under the BKB
Correspondent Loan Purchase and Sale Agreement. Under certain conditions, the
BKB Banks must indemnify HomeSide or repurchase mortgage loans from HomeSide.
The agreement provides certain underwriting, appraisal, mortgage insurance and
escrow requirements.

The term of the BKB Correspondent Loan Purchase Agreement is five years but
will automatically terminate upon the termination of the Operating Agreement.

PMSR Flow Agreement

HomeSide and the BKB Banks have entered into a PMSR Flow Agreement dated
March 15, 1996, which requires the BKB Banks, subject to certain exceptions, to
sell to HomeSide the servicing rights to the BKB Banks' portfolio mortgage
loans. The purchase price for the servicing rights is based upon a percentage
(which varies depending on the type of loan) of the principal balance of the
loan, as may be adjusted based on an independent third party's revaluation. For
the period March 16, 1996 through February 28, 1997 HomeSide paid approximately
$1.3 million to the BKB Banks under this PMSR Flow Agreement. The agreement also
requires the BKB Banks to provide certain notices to government agencies, flood

<PAGE>

service providers, insurance carriers and borrowers upon the transfer of
servicing rights to HomeSide. The agreement describes the BKB Banks' obligation
to prepare and record assignments of mortgage and pay tax, service-related fees
and flood service fees. Under certain conditions, the BKB Banks must reimburse
the servicing rights purchase price to HomeSide.

The term of the PMSR Flow Agreement is five years but will automatically
terminate upon the termination of the BKBC Operating Agreement.

Mortgage Loan Servicing Agreement

HomeSide and the BKB Banks have entered into a Mortgage Loan Servicing
Agreement dated March 15, 1996 (the "BKBC Servicing Agreement"), which requires
HomeSide, subject to certain exceptions, to service the BKB Banks' portfolio
mortgage loans. HomeSide is also required to use reasonable efforts to collect
mortgage loan payments, to remit principal and interest to the BKB Banks each
month and to perform general ledger reconciliations and other related tasks.
HomeSide is also required to perform certain default loan administration and
foreclosure activities. HomeSide provides additional services for the BKB Banks'
private banking clients.

The servicing fees paid by the BKB Banks to HomeSide are market-based fees
consistent with the fees charged by HomeSide to other mortgagees. For the period
March 16, 1996 through February 28, 1997 the BKB Banks paid approximately $5.3
million to HomeSide under the BKBC Servicing Agreement.

The term of the BKBC Servicing Agreement is five years. The BKB Banks will
not be obligated to deliver portfolio mortgage loan servicing rights to HomeSide
upon the termination of the BKBC Operating Agreement. However, the termination
of the BKBC Operating Agreement will not affect HomeSide's right to continue
servicing the BKB Banks' portfolio loans that are being serviced by HomeSide as
of such termination date.

Other Barnett Agreements

Operating Agreement

Barnett and HomeSide have entered into an Operating Agreement, dated May
31, 1996 (the "Barnett Operating Agreement"), which sets forth the parties'
roles with respect to new loan originations and servicing rights. With certain
exceptions, Barnett and its affiliate banks (the "Barnett Banks") are required
to sell all mortgage loan production to HomeSide during the term of the Barnett
Operating Agreement. In particular, among other things, the Barnett Operating
Agreement: (a) describes the mortgage loan products to be purchased by HomeSide
from Barnett Banks, (b) ensures that the Barnett Banks receive the most
favorable pricing and servicing released premiums offered by HomeSide to
mortgage correspondents, (c) describes HomeSide's customer service levels, (d)
sets forth warehousing and pipeline management rights and

<PAGE>

obligations, (e) describes the technology support which the parties provide to
one another, (f) describes the mortgage loan production and support functions to
be provided by the parties, (g) describes the reports and information provided
periodically by HomeSide to the Barnett Banks, including, but not limited to,
risk management, internal performance and management reports, (h) sets forth
penalties to be paid by the Barnett Banks for failing to satisfy the buy price
expiration dates, (i) describes Barnett Banks' mortgage loan repurchase
obligations, and (j) restricts HomeSide's ability to sell servicing rights
relating to the Barnett Banks' portfolio mortgage loans.

The term of the Barnett Operating Agreement is 5 years, subject to earlier
termination in certain specified instances. The termination of the Barnett
Operating Agreement will not affect HomeSide's rights to service mortgage loans
serviced prior to the termination date.

Correspondent Loan Purchase Agreement

HomeSide and Barnett Banks have entered into a Correspondent Loan Purchase
Agreement, dated May 16, 1996 (the "Barnett Correspondent Loan Purchase
Agreement"), which describes the mortgage loans which are eligible for sale to
HomeSide by the Barnett Banks and related pricing and delivery requirements for
such loans. The Barnett Banks receive the most favorable pricing offered by
HomeSide to other correspondents. For the period March 16, 1996 through February
28, 1997, HomeSide paid approximately $27.6 million to Barnett under the Barnett
Correspondent Agreement. Under certain conditions, the Barnett Banks must
repurchase mortgage loans for HomeSide. The Barnett Correspondent Loan Purchase
Agreement provides certain underwriting, appraisal, mortgage insurance and
escrow requirements.

The term of the Barnett Correspondent Loan Purchase Agreement is 5 years
but will automatically terminate upon the termination of the Barnett Operating
Agreement.

PMSR Flow Agreement

HomeSide and the Barnett Banks have entered into a PMSR Flow Agreement
dated May 31, 1996 ("PMSR Flow Agreement"), which requires the Barnett Banks,
subject to certain exceptions, to sell to HomeSide the servicing rights to the
Barnett Banks' portfolio mortgage loans. The purchase price for the servicing
rights is based upon a percentage (which varies depending on the type of loan)
of the principal balance of the loan, as may be adjusted based on an independent
third party's revaluation. For the period March 16, 1996 through February 28,
1997, HomeSide paid approximately $8.2 million to Barnett under this PMSR Flow
Agreement. The agreement also requires the Barnett Banks to provide certain
notices to government agencies, flood service providers, insurance carriers and
borrowers upon the transfer of servicing rights to HomeSide. The agreement
describes the Barnett Banks' obligation to prepare and record assignments of
mortgage and pay tax, service-related fees and flood service fees. Under

<PAGE>

certain conditions, the Barnett Banks must reimburse the servicing rights
purchase price to HomeSide.

The term of the PMSR Flow Agreement is 5 years but will automatically
terminate upon the termination of the Barnett Operating Agreement.

Mortgage Loan Servicing Agreement

HomeSide and the Barnett Banks have entered into a Mortgage Loan Servicing
Agreement dated as of May 31, 1996 (the "Barnett Servicing Agreement") which
requires HomeSide, subject to certain exceptions, to service the Barnett Banks'
portfolio mortgage loans. HomeSide is also required to use reasonable efforts to
collect mortgage loan payments, to remit principal and interest to the Barnett
Banks each month and to perform general ledger reconciliations and other related
tasks. HomeSide is also required to perform certain default loan administration
and foreclosure activities. HomeSide provides additional services for the
Barnett Banks' private banking clients.

The servicing fees paid by the Barnett Banks to HomeSide are market-based
fees consistent with those charged by HomeSide to other mortgagees. For the
period March 16, 1996 through February 28, 1997 Barnett paid approximately $23.6
million to HomeSide under the Barnett Servicing Agreement.

The term of the Barnett Servicing Agreement is 5 years. The Barnett Banks
will not be obligated to deliver portfolio mortgage loan servicing rights to
HomeSide upon the termination of the Barnett Operating Agreement. However, the
termination of the Barnett Operating Agreement will not affect HomeSide's right
to continue servicing the Barnett Banks' portfolio loans that are being serviced
by HomeSide as of such termination date.

Each of the foregoing agreements described under "Certain Relationships and
Related Transactions" was entered into in connection with either the acquisition
of BancBoston Mortgage Corporation or Barnett Mortgage Company. No additional
consideration was paid or received by HomeSide in connection with the execution
and delivery thereof.

Management Agreements

HomeSide agreed to pay the Thomas H. Lee Company, MDP, BankBoston and
Barnett pursuant to management agreements entered into in connection with the
BancBoston Mortgage Corporation and the Barnett Mortgage Company acquisitions,
an annual management fee of $250,000, $83,334, $333,333 and $333,333,
respectively. Such management agreements had a term of five years automatically
extended for successive one year terms, except either party could terminate the
agreement by delivering notice thereof 90 days prior to the end of any such
term. The management agreements terminated upon consummation of the January 1997
offering of Common Stock of the Parent.

<PAGE>

CERTAIN TRANSACTIONS

The Company has established option plans for employees of HomeSide pursuant
to which the Company has reserved 1,748,569 shares of its Common Stock for
grants to employees of HomeSide.

In addition, certain members of management have purchased in the aggregate
441,592 shares of Common Stock of the Company at a price of $10.294 per share,
the same price paid by the Principal Shareholders. In the case of certain
purchasers, the shares have been acquired with the proceeds of loans from
HomeSide. Such loans are evidenced by recourse notes secured by a pledge of the
shares purchased, having a term of approximately 5 years and bearing interest at
8.25% per annum. In the case of the executive officers of HomeSide, the
executives executed promissory notes for the purchase of their Common Stock in
the following amounts: Mr. Pickett ($400,000); Mr. Harris ($350,000); Mr. Jacobs
($50,000); Mr. Race ($150,000); Ms. Francis ($100,000); Mr. Johnson ($250,000);
Mr. Wilson ($50,000); Mr. Glasgow ($225,000); Ms. Mackey ($10,000). The
management purchasers are party to a Management Stockholders' Agreement that
contains various restrictions on transfer. Management holders also have
piggyback registration rights. There is no right of repurchase by the Company
upon termination of employment. Upon death of a management shareholder, such
management shareholder's estate has a right to require the Company to acquire
the shares owned by such management shareholder and his or her permitted
transferees, subject to certain conditions and restrictions, for the lower of
$10.294 per share and fair market value.

COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 (the "Act") requires
the Company's Directors and executive officers and persons who own more than 10%
of the Company's Common Stock to file with the Securities and Exchange
Commission and the New York Stock Exchange reports concerning their ownership of
the Company's Common Stock and changes in such ownership. Copies of such reports
are required to be furnished to the Company. To the Company's knowledge, based
solely on a review of copies of such reports furnished to the Company during or
with respect to the Company's most recent fiscal year, all Section 16(a) filing
requirements applicable to persons who were, during the most recent fiscal year,
officers or directors of the Company or greater than 10% beneficial owners of
its Common Stock were complied with, except that through inadvertence, one
report relating to two transactions by Joe K. Pickett and one report relating to
one transaction by W. Blake Wilson were not reported on a timely basis.

<PAGE>

REPORT OF THE BOARD OF DIRECTORS AND
THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors of the Company
administers the executive compensation program of the Company and certain of its
subsidiaries. In so doing, the Compensation Committee's primary objective is to
ensure that the compensation program motivates executives to produce superior
performance for the Company and to provide superior returns to stockholders of
the Company. The program utilizes a combination of salary, stock options and
cash bonuses awarded based on the achievement of corporate performance
objectives.

The goal of the program is to provide short-term and long-term incentives.
Short-term performance is rewarded through the base salary and bonus components
of the program. Stock options are the principal mechanism for rewarding
executives for the long-term performance of the Company. In establishing an
executive's compensation, competitive practices are carefully reviewed to ensure
that the total compensation afforded the executive compares favorably with
similarly situated executives.

Each of the members of the Compensation Committee is an employee of a
principal shareholder of the Company. None of the members of the Compensation
Committee are employees of the Company.

Under the Omnibus Budget Reconciliation Act of 1993 ("OBRA"), Congress has
limited to $1 million per year the tax deduction available to public companies
for certain compensation paid to designated executive officers. The regulations
provide an exception from this limitation for certain performance-based
compensation, assuming that various requirements are met. To the extent
feasible, the Compensation Committee of the Company intends that awards of
compensation under its various incentive plans to its executive officers qualify
for deductibility under OBRA, but the Compensation Committee and the Board of
Directors of the Company reserve the right, in light of the overall goals and
objectives of the Company, to exceed such limitation if it is determined to be
in the best interest of the Company and its stockholders.

Base Salaries

The base salaries of the Company's executive officers for the fiscal year
ended February 28, 1997 were established during the course of the negotiations
which resulted in the acquisition by the Company of BancBoston Mortgage
Corporation in March 1996. In establishing such salaries, the Board of
Directors, acting on behalf of the Company's shareholders, took into
consideration the salaries then being received by the executive officers as
officers of BancBoston Mortgage Corporation, as well as the executive's
experience, the levels of responsibility to be

<PAGE>

assigned to the executive following the acquisition, and the salaries commanded
by executives in comparable positions with other companies in the banking
industry.

On an ongoing basis, the base salaries of the Company's executive officers
will be periodically reviewed by the Compensation Committee. In its
deliberations, the Committee will consider each executive officer's individual
contributions to the performance of the Company, as well as the executive's
experience and level of responsibility in comparison to other executives of the
Company and executives of comparable institutions. The Compensation Committee's
objective will be to ensure that the base salary of each executive is
competitive and rewards the executive for the executive's performance and total
contribution to the success of the Company.

Annual Incentive Compensation

For the fiscal year ended February 28, 1997, the Compensation Committee has
approved bonuses for the executive officers of the Company which are intended to
reward each executive's personal contribution to the achievement of the
Company's earnings goals for such fiscal year. Bonuses awarded for the fiscal
year ended February 28, 1997 are set forth in the Bonus column of the Summary
Compensation Table. The Compensation Committee intends in the future to base
annual bonuses on the Committee's assessment of each executive's role in
achieving such Company goals relating to operating performance as may be set in
advance from time to time.

Long-Term Incentive Compensation

The Company's stock option program is intended to provide long-term
incentives to the Company's executives to build shareholder value, reward
management decisions that result in the long-term success of the Company and to
promote employee loyalty through stock ownership. The Company's stock option
plans were adopted in May 1996 and provide for options which vest entirely on
the basis of time, as well as options whose vesting can be accelerated upon the
achievement of performance goals.

Information with respect to stock options held by executive officers is
included in the tables following this report. Option grants during the year
ended February 28, 1997 to executive officers were made by the Board of
Directors and represent the Board's subjective assessment of the potential
contributions expected on the part of each executive to the future performance
of the Company, as well as such executive's level of responsibility. In deciding
upon the size of the option grants to executive officers, the Board also
considered the potential value which might be realized upon exercise of the
options as a result of appreciation of the Company's Common Stock during the
term of the options. Two-thirds of the options received by each executive
officer were granted under the 1996 Time Accelerated Restricted Stock Option
Plan (under which options vest nine years from the date of grant, but are
subject to accelerated vesting upon the achievement of performance criteria
established from time to time) and one-third of the options received by each
executive officer were granted under the 1996 Stock Option Plan (under which
options vest annually in arrears in five equal installments of 20% per year). In
so doing,

<PAGE>

the Board intended to align the interests of the executives with those of the
shareholders by providing incentives to the achievement of performance goals
relating to the Company's operating results. The Board determined following the
close of the fiscal year ended February 28, 1997 that the vesting of 20% of the
options granted to each optionee under the 1996 Time Accelerated Restricted
Stock Option Plan shall be accelerated so as to vest on April 9, 1997, the
performance objectives relating to that increment having, in the judgment of the
Board, been met.

Compensation of the Chief Executive Officer

The base salary of the Chief Executive Officer of the Company for the year
ended February 28, 1997 was established by the Board of Directors acting on
behalf of the Company's shareholders in connection with the acquisition of
BancBoston Mortgage Corporation, using the same criteria which were used to
establish the base compensation of the other executive officers, as described
above.

The Chief Executive Officer also received during the last fiscal year
options for the purchase of 80,954 shares of Common Stock under the 1996 Stock
Option Plan and 161,908 shares under the 1996 Time Accelerated Restricted Stock
Option Plan, each with an exercise price of $10.294 per share. Under the 1996
Stock Option Plan, the Chief Executive Officer's options will vest in five equal
installments in arrears, or 20% per year. Options granted under the 1996 Time
Accelerated Restricted Stock Option Plan vest nine years from the date of grant,
and vesting will accelerate upon the achievement of performance criteria
specified from time to time. In granting options to the Chief Executive Officer,
the Board took into consideration his base salary, as well as the significant
responsibility vested in him by the Board to successfully deal with the
strategic issues associated with launching the Company as an independent
institution. The Board exercised subjective judgment in arriving at the total
number of shares covered by the options granted to the Chief Executive Officer.
Its objective, as in the case of the other executive officers, was to provide
incentives to the achievement of performance goals to be designated from time to
time by the Board relating to the Company's operating results by weighting the
option grants two-thirds toward options which vest on an accelerated basis upon
the achievement of performance criteria and one-third towards options which vest
by lapse of time.

The Compensation Committee approved a bonus for the Chief Executive Officer
for the year ended February 28, 1997 in the amount of $362,000. The bonus
reflects the Committee's judgment as to the contribution of the Chief Executive
Officer to the Company's performance for the last fiscal year, and in
particular, the achievement of earnings goals for such fiscal year.

<PAGE>

The foregoing report reflects those matters which have been approved by the
Board of Directors and by all members of the Compensation Committee.

Board of Directors Compensation Committee
------------------ ----------------------

Joe K. Pickett William J. Shea William J. Shea, Chairman
Hugh R. Harris Kathleen M. McGillycuddy Douglas K. Freeman
Thomas M. Hagerty Hinton F. Nobles, Jr. David V. Harkins
David V. Harkins Douglas K. Freeman
Justin S. Huscher Charles W. Newman
Peter J. Manning

EXECUTIVE COMPENSATION

Executive Compensation

The following table sets forth all compensation awarded to, earned by or
paid to the Company's Chief Executive Officer and the Company's five most highly
compensated executive officers other than the Chief Executive Officer whose
total annual salary and bonus exceeded $100,000 for all services rendered in all
capacities to the Company and its subsidiaries for the fiscal year ended
February 28, 1997.

Summary Compensation Table

<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
------------
Annual
Compensation Securities
Name and Principal Fiscal ---------------------------- Underlying All Other
HomeSide Position Year Salary Bonus Options(a) Compensation(b)
------------------ ------ -------- -------- --------- --------------
<S> <C> <C> <C> <C> <C>
Joe K. Pickett .............................. 1997 $312,000 $362,000 242,862 $ 16,135
Chairman & CEO
Hugh R. Harris .............................. 1997 300,000 350,000 242,862 7,842
President and Chief
Operating Officer
Kevin D. Race ............................... 1997 250,000(c) 100,000 97,155 413,145(d)
Executive Vice President
and Chief Financial
Officer
Mark F. Johnson ............................. 1997 200,000 150,000 97,155 6,714
Executive Vice President
Secondary Marketing and
Production
</TABLE>

<PAGE>

Summary Compensation Table (Continued)

- --------------------

(a) Reflects a 17 for 1 stock split of the Company's Common Stock effected
immediately prior to the Company's January 1997 initial public offering.

(b) Includes amounts received for (1) matching contributions under the
Company's savings plan of $6,000 with respect to each of Messrs. Pickett,
Harris, Johnson, Glasgow and $2,692 with respect to Mr. Gilmer; and (2) the
dollar value of life insurance premiums paid by the Company with respect
to: Mr. Pickett $10,135; Mr. Harris $1,842; Mr. Race $74; Mr. Johnson $714;
Mr. Glasgow $522 and Mr. Gilmer $3,480.

(d) Includes a bonus of $375,000 received by Mr. Race as an inducement to join
the Company and $38,071 in relocation expenses.

Option Grants for the Fiscal Year Ended February 28, 1997

The following table provides information on option grants with respect to
Common Stock of the Company for the fiscal year ended February 28, 1997 to the
named executive officers. Pursuant to applicable regulations of the Securities
and Exchange Commission (the "Commission"), the following table also sets forth
the hypothetical value which might have been realized with respect to such
options based on assumed rates of stock appreciation of 5% and 10% compounded
annually from date of grant to the end of the option terms:

Individual Grants
-------------------------------------------

Number of Potential Realizable Value at
Securities % of Total Assumed Annual Rates of Stock
Underlying Options Price Appreciation for Option
Options Granted to Exercise Term (b)
Granted Employees Price Expiration -----------------------------
Name (#)(a) in 1996 ($/Sh)(a) Date 5% 10%
- ---- ------- ----- ------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Joe K. Pickett ................... 80,954 (c) 18.11% $10.294 05/31/06 $ 523,772 $1,328,455
161,908 (d) 18.11% $10.294 11/30/05 $ 984,401 $2,461,002
Hugh R. Harris ................... 80,954 (c) 18.11% $10.294 05/31/06 $ 523,772 $1,328,455
161,908 (d) 18.11% $10.294 11/30/05 $ 984,401 $2,461,002
Kevin D. Race .................... 32,385 (c) 7.24% $10.294 10/08/06 $ 209,531 $ 531,438
64,770 (d) 7.24% $10.294 04/08/06 $ 393,802 $ 984,504
Charles D. Gilmer ................ 32,385 (c) 7.24% $10.294 05/31/06 $ 209,531 $ 531,438
64,770 (d) 7.24% $10.294 11/30/05 $ 393,802 $ 984,504
Mark F. Johnson .................. 32,385 (c) 7.24% $10.294 05/31/06 $ 209,531 $ 531,438
64,770 (d) 7.24% $10.294 11/30/05 $ 393,802 $ 984,504
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Individual Grants (Continued)
-------------------------------------------

- --------------------

(a) Reflects a 17 for 1 stock split of the Company's Common Stock effected
immediately prior to its January 1997 initial public offering.

(b) These values are based on assumed rates of appreciation only. Actual gains,
if any, on shares acquired on option exercises are dependent on the future
performance of the Company's Common Stock.

(c) Non-qualified, timed-based options granted pursuant to the Company's 1996
Stock Option Plan. Options vest annually in arrears in five equal
installments of 20% per year, with the first 20% vesting on April 9, 1997.

(d) Non-qualified, performance-based options granted pursuant to the Parent's
1996 Time Accelerated Restricted Stock Option Plan. These options vest no
later than nine years from the date of grant unless accelerated based on
the achievement of certain performance criteria. The options become
exercisable as to 20% of the shares covered thereby on April 9, 1997.

<PAGE>

Aggregated Option Exercises and Option Values
for the Fiscal Year Ended February 28, 1997

The following table provides information on option exercises during the
fiscal year ended February 28, 1997 with respect to the Common Stock of the
Company and on the values of the named executive officers' unexercised options
at February 28, 1997:

<TABLE>
<CAPTION>
Shares Number of Securities Value of Unexercised
Acquired Underlying Unexercised In-the-Money
on Value Options at Year-End (#)(a) Options at Year-End
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable(b)
- ---- -------- -------- ----------- ------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Joe K. Pickett ............... 0 $ 0 0 242,862 $ 0 $1,901,852
Hugh R. Harris ............... 0 0 0 242,862 0 1,901,852
Kevin D. Race ................ 0 0 0 97,155 0 760,821
Charles D. Gilmer ............ 0 0 0 97,155 0 760,821
Mark F. Johnson .............. 0 0 0 97,155 0 760,821
William Glasgow, Jr .......... 0 0 0 97,155 0 760,821
</TABLE>

- --------------------

(a) The options become exercisable as to 20% of the shares covered thereby on
April 9, 1997.

(b) Value of unexercised in-the-money stock options represents the difference
between the exercise prices of the stock options and the closing price of
the Parent's Common Stock on The New York Stock Exchange on February 28,
1997.

Employment Contracts and Termination of Employment Arrangements

Although none of the Company's executive officers are party to any
employment or non-competition agreements with the Company, and the Company is
not, therefore, contractually obligated to continue to pay such salaries, it is
expected that the annual salaries of the named executive officers will not be
reduced during the executive officers' term of employment with the Company.

Pursuant to severance agreements with the Company, certain executive
officers, including each of the named executive officers, will be entitled to
severance benefits if he is terminated, or constructively terminated through
diminution in job responsibilities or compensation following an acquisition (a
"Trigger Event"). If such named executive officer offers to remain in the employ
of the Company for one year following any Trigger Event, and is either
terminated during that first year or has his job responsibilities or
compensation diminished, he is entitled to a severance benefit. The severance
benefit will be a lump sum payment in cash equal in the case of each of Messrs.
Pickett and Harris to the sum of (i) twice his annual salary in effect at the
time

<PAGE>

of termination, (ii) twice his annual bonus received for the preceding year and
(iii) a pro rata portion of the bonus he would have received for the year in
which termination occurs (paid at the time the amount of such bonus would have
been determined). The severance benefit for the other named executive officers
will be equal to the sum of (i) such officer's annual salary in effect at the
time of termination, (ii) his annual bonus received for the preceding year, and
(iii) a pro rata portion of the bonus he would have received for the year in
which termination occurs (paid at the time the amount of such bonus would have
been determined). The named executive officers will also receive continued
coverage under the Company's medical benefit plans for one year following such
termination, or two years following termination in the case of Messrs. Pickett
and Harris. Each of the Severance Agreements is for a term of one (1) year which
is automatically renewed on April 1 of each year for additional one-year periods
unless either the Company or the executive has given notice not later than
December 31st of the previous year to the other not to extend the term of the
Agreement. If a Trigger event has occurred during the term of the Severance
Agreement, however, the Agreement continues for one (1) year following the
closing of the Trigger Event.

Historical Executive Compensation

The following table sets forth all compensation awarded to, earned by or
paid to the Company's Chief Executive Officer and the Company's four most highly
compensated Executive Officers other than the Chief executive officer whose
total annual salary and bonus exceeded $100,000 for all services rendered in all
capacities to BancBoston Mortgage Corporation and its subsidiaries for the
fiscal year ended December 31, 1995. None of the Company's named executive
officers received any compensation from Barnett Mortgage Company during 1995.

<PAGE>

Summary Compensation Table

Long-Term Compensation
--------------------------------------
Awards (b) Payouts
------------------------- ----------
Annual Long-Term
Compensation Restricted Securities Incentive
Name and Principal Fiscal ---------------------- Stock Underlying Plan All Other
Position Year Salary(a) Bonus(a) Awards Options Payouts (c) Compensation (d)
- ------------------- ------ --------- -------- ---------- ---------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Joe K. Pickett .................. 1995 $287,000 $200,000 $ 68,700 9,600 $215,156 $ 11,480
Chairman & CEO
Hugh R. Harris .................. 1995 275,000 225,000 42,938 6,000 0 11 ,000
President
Charles D. Gilmer ............... 1995 170,769 155,000 0 0 0 0
Director, Risk
Management
Mark F. Johnson ................. 1995 190,577 125,000 28,625 4,000 0 7,623
Director,
Wholesale/Securities
Marketing
William Glasgow, Jr ............. 1995 189,230 125,000 28,625 4,000 0 7,569
Director, Loan
Administration
</TABLE>

- --------------------

(a) The salary and bonus amounts presented were earned in 1995. The payment of
certain such amounts occurred in 1996. The amounts reflected in the table
do not include the following bonuses paid to the named executive officers
in 1996 in connection with the closing of the acquisition of BancBoston
Mortgage Corporation: Mr. Pickett, $50,000; Mr. Harris, $225,000; Mr.
Gilmer, $175,000; Mr. Johnson, $200,000; and Mr. Glasgow, $200,000.

(b) Involves common stock of BKBC. As of December 31, 1995, the named executive
officers held the following number of restricted shares of BKBC common
stock having the corresponding year-end market values:

As of December 31, 1995

Total Number of Aggregate
Name Restricted Shares Held Market Value
- ---- ---------------------- ------------
Joe K. Pickett ....................... 5,600 $259,900
Hugh R. Harris ....................... 4,135 191,244
Charles D. Gilmer .................... 0 0
Mark F. Johnson ...................... 1,784 82,510
William Glasgow, Jr. ................. 1,700 78,625

23
<PAGE>

In connection with the BancBoston Mortgage Corporation acquisition, vesting
on all of the restricted stock owned by its employees, including the
restricted stock listed above, was accelerated and all prior forfeiture and
transferability restrictions thereon were removed.

(c) Represents the dollar value of vested shares of performance restricted
stock calculated by multiplying the closing price of BKBC common stock on
each vesting date by the number of shares that vested on that date.

(d) Includes matching employer contributions and credits under the BankBoston
thrift-incentive plan and the BankBoston deferred compensation plan for the
named executive officers.

Option Grants in 1995

The following table provides information on option grants with respect to
BKBC common stock in fiscal 1995 to the named executive officers. Pursuant to
applicable regulations of the Commission, the following table also sets forth
the hypothetical value which might have been realized with respect to such
options based on assumed rates of stock appreciation of 5% and 10% compounded
annually from date of grant to March 15, 1996, the end of the option terms:

<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------

Number of Potential Realizable Value at
Securities % of Total Assumed Annual Rates of Stock
Underlying Options Price Appreciation for Option
Options Granted to Exercise Term
Granted Employees Price Expiration -----------------------------
Name (#)(a) in 1995 ($/Sh) Date 5% 10%
- ---- ------- ----- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Joe K. Pickett ................... 9,600 .90 $28.625 3/15/96 $15,631 $31,362
Hugh R. Harris ................... 6,000 .53 $28.625 3/15/96 $ 9,769 $19,601
Charles D. Gilmer ................ 0 0 0 -- --
Mark F. Johnson .................. 4,000 .40 $28.625 3/15/96 $ 6,513 $13,067
William Glasgow, Jr., ............ 4,000 .40 $28.625 3/15/96 $ 6,513 $13,067
</TABLE>

- --------------------

(a) All options were exercised prior to March 15, 1996.

Aggregated Option Exercises in 1995
and December 31, 1995 Option Values

The following table provides information on option exercises during 1995
with respect to BKBC common stock and on the values of the named executive
officers' unexercised options at December 31, 1995:

<PAGE>

<TABLE>
<CAPTION>
Shares Number of Securities Value of Unexercised
Acquired Underlying Unexercised In-the-Money
on Value Options at Year-End (#) Options at Year-End
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable(b)
- ---- -------- -------- ----------- ------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Joe K. Pickett .............. 0 $ 0 32,100 4,800 $687,575 $84,600
Hugh R. Harris .............. 0 0 10,200 3,000 202,275 52,875
Charles D. Gilmer ........... 0 0 0 0 0 0
Mark F. Johnson ............. 0 0 5,200 2,000 108,250 32,250
William Glasgow, Jr. ........ 4,000 32,750 0 2,000 0 32,250
</TABLE>

In connection with the acquisition of BancBoston Mortgage Corporation,
vesting of all stock options listed in the preceding table was accelerated and
all such options listed as being unexercised at year end were exercised with
values realized as follows: Mr. Pickett, $753,725; Mr. Harris, $248,550; Mr.
Johnson, $139,900; and Mr. Glasgow, $26,000.

Retirement Benefits

The following table shows the years of service and the estimated annual
retirement benefits that are payable at age 65 from BKBC to each of the named
executive officers in the form of a single lifetime annuity with an assumed
future annual interest rate of 6.3% through 1996 and 5.5% thereafter on each
individual's cash balance account:

Prior Years of Service Estimated Annual
Name as of 12/31/95 Retirement Benefit
- ---- -------------- ------------------
Joe K. Pickett .............. 15 $73,883
Hugh R. Harris .............. 12 50,676
Charles D. Gilmer ........... 2 2,386
Mark F. Johnson ............. 13 48,616
William Glasgow, Jr. ........ 4 6,836

The estimates shown above reflect BankBoston's cash balance formula as of
December 31, 1995 (under which credits are made annually to an individual's
account at a rate based on the individual's age and years of service), plus any
accrued benefits under the prior plan formula. These benefits are provided under
a combination of BankBoston's tax-qualified retirement plan and certain
supplemental plans.

<PAGE>

COMPARATIVE PERFORMANCE GRAPH

The following graph compares the cumulative total return for the period
commencing with the Company's initial public offering on January 30, 1997
through February 28, 1997 among the Company, the S&P 500 Index and the S&P
Financial Index. The graph assumes $100 was invested on January 30, 1997 in the
Company's Common Stock and in the indexes and also assumes the reinvestment of
dividends. The Board of Directors recognizes that the market price of stock is
influenced by many factors, only one of which is Company performance. The stock
price performance shown on the graph is not necessarily indicative of future
price performance.

TOTAL SHAREHOLDER RETURNS

[THE FOLLOWING TABLE WAS PRESENTED AS BOTH
A LINE GRAPH AND A TABLE IN THE PRINTED MATERIAL]

Base
Period
Company/Index January 30, 1997 February 28, 1997
================================================================================
HomeSide, Inc. ................... 100 120.83
S&P Financial Index .............. 100 104.72
S&P 500 Index .................... 100 101.04

<PAGE>

RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors has selected Arthur Andersen LLP as independent
public accountants to examine the consolidated financial statements of the
Company and its subsidiaries for the fiscal year ending February 28, 1998. A
representative of Arthur Andersen LLP is expected to be present at the meeting
and will have the opportunity to make a statement if he or she so desires and to
respond to appropriate questions.

STOCKHOLDER PROPOSALS

Any proposal submitted for inclusion in the Company's Proxy Statement and
form of proxy relating to the 1998 Annual Meeting of Stockholders must be
received at the Company's principal executive offices in Jacksonville, Florida
on or before January 9, 1998.

OTHER MATTERS

Management knows of no other matters which may properly be and are likely
to be brought before the meeting. However, if any other matters properly come
before the meeting, the persons named in the enclosed proxy will vote said proxy
in accordance with their best judgment.

10-K REPORT

THE COMPANY WILL PROVIDE EACH BENEFICIAL OWNER OF ITS SECURITIES WITH A
COPY OF ITS ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE COMPANY'S MOST RECENT FISCAL YEAR WITHOUT CHARGE UPON RECEIPT
OF A WRITTEN REQUEST FROM SUCH PERSON. SUCH REQUEST SHOULD BE DIRECTED TO
INVESTOR RELATIONS, HOMESIDE, INC. 7301 BAYMEADOWS WAY, JACKSONVILLE, FL 32256,
(904) 281-3000.

<PAGE>

VOTING PROXIES

The Board of Directors recommends an affirmative vote on the proposal
specified. Proxies will be voted as specified. If signed proxies are returned
without specifying an affirmative or negative vote on any proposal, the shares
represented by such proxies will be voted in favor of the Board of Directors'
recommendations.

By order of the Board of Directors,

/s/Robert J. Jacobs
Robert J. Jacobs
Secretary

Jacksonville, Florida
May 21, 1997

161292-1

<PAGE>

HOMESIDE, INC.
ANNUAL MEETING OF STOCKHOLDERS
JUNE 10, 1997

The undersigned hereby appoints Joe K. Pickett, Hugh R. Harris and Robert
J. Jacobs, and each of them, with full power of substitution, proxies to
represent the undersigned at the Annual Meeting of Stockholders of
Homeside, Inc., to be held on June 10, 1997, at 10:00 a.m., at The Sawgrass
Marriott, 1000 TFIC Boulevard, Ponte Vedra Beach, Florida 32082, and at any
adjournment or adjournments thereof, to vote in the name and place of the
undersigned, with all powers which the undersigned would possess if
personally present, upon such business as may properly come before the
meeting, including the proposal set forth on the reverse side of this Proxy
Card.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE BOARD
RECOMMENDS AN AFFIRMATIVE VOTE ON THE PROPOSAL SPECIFIED. THE SHARES WILL
BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED
WILL BE VOTED IN FAVOR OF THE ELECTION OF DIRECTORS AS SET FORTH IN THE
PROXY STATEMENT.

PLEASE COMPLETE, SIGN DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN
PERSON.

CONTINUED AND TO BE SIGNED ON REVERSE SIDE

-----------
See Reverse
Side
-----------

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<PAGE>

<TABLE>
<S> <C>
DETACH HERE

- -------------
Please mark
votes as in
this example.
- -------------

1. Election of Directors

Nominees: Joe K. Pickett, Hugh R. Harris, Thomas M. Hagerty, 2. In their descretion, the proxies are authorized to
David V. Harkins, Justin S. Huscher, Peter J. Manning, William J. vote upon such other business as may properly come before the
Shea, Kathleen M. McGillycuddy, Hinton F. Nobles, Jr., meeting and any adjournment thereof.
Douglas K. Freeman, Charles W. Newman

FOR WITHHELD

/ / / /

/ / ______________________________________________ MARK HERE IF YOU PLAN / /
To withhold a vote for any individual nominee, TO ATTEND THE MEETING
write the nominee's name on the line above. IN PERSON

MARK HERE IF ADDRESS / /
CHANGE AND NOTE AT LEFT

MARK HERE FOR COMMENTS / /
HAVE BEEN NOTED ON THE
REVERSE SIDE OF THIS CARD

Please be sure to sign and date this Proxy

Signature: __________________________ Date: _________________ Signature: __________________________ Date: __________________
</TABLE>

178964-1

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