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[Letterhead of MILLING, BENSON, WOODWARD, HILLYER, PIERSON & MILLER, L.L.P.]
July 10, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Whitney Holding Corporation
Registration Statement on Form S-4
Ladies and Gentlemen:
On behalf of Whitney Holding Corporation (the "Registrant") and
pursuant to the requirements of the Securities Act of 1933, as amended (the
"Securities Act'), and Rule 402 thereunder, transmitted herewith for filing is a
Registration Statement on Form S-4 (the "Registration Statement") covering up to
397,967 shares of the Registrant's common stock that may be issued to
shareholders of American Bank and Trust in connection with a proposed merger of
American Bank and Trust into Whitney National Bank of Florida, a wholly-owned
subsidiary of Whitney that will be formed solely for the purpose of facilitating
the proposed merger.
The Registrant has made a wire transfer of $1,763 to the Securities and
Exchange Commission lock box account in payment of the filing fee pursuant to
Section 6(b) of the Securities Act and Rules 111 and 457 thereunder.
As discussed in the Registration Statement, the Registrant has also
signed a definitive agreement to acquire by merger Liberty Holding Company and
its majority-owned subsidiary, Liberty Bank, and in connection with that
transaction will issue shares of its common stock to the shareholders of Liberty
Holding Company and Liberty Bank. The Registrant intends to file a separate
registration statement within the next few days covering the shares of common
stock to be issued in the Liberty transaction.
It is the desire of the Registrant that the attached Registration
Statement and the registration statement to be filed for the Liberty transaction
be declared effective on the earliest practicable date.
<PAGE>
MILLING, BENSON, WOODWARD, HILLYER, PIERSON & MILLER, L.L.P.
July 10, 1996
Page 2
If you have any questions or comments concerning the Registration
Statement, please telephone the undersigned at (504) 569-7406.
Very truly yours,
/s/ Patrick J. Butler, Jr.
Patrick J. Butler, Jr.
PJB/kf112225
Enclosures
cc: Mr. Edward B. Grimball (w/enc.)
Joseph S. Schwertz, Jr., Esq. (w/enc.)
<PAGE>
As filed with the Securities and Exchange Commission on July 10, 1996
Registration No. 333-
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-4
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
----------------
WHITNEY HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
LOUISIANA 6711 72-6017893
(State or other jurisdiction Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
---------------------
228 St. Charles Avenue
New Orleans, Louisiana 70130
(504) 586-7117
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive office)
<TABLE>
<C> <C> <C>
Joseph S. Schwertz, Jr., Esq. Copies to: Copies to:
Secretary Patrick J. Butler, Jr., Esq. Patrick Emmanuel, Esq.
Whitney Holding Corporation Milling, Benson, Woodward, Emmanuel, Sheppard & Condon
228 St. Charles Ave. - Room 622 Hillyer, Pierson & Miller, L.L.P. 30 South Spring Street
New Orleans, LA 70130 909 Poydras Street, Suite 2300 Pensacola, FL 32501
(504) 586-3474 New Orleans, LA 70112
(Name, address, including zip code,
and telephone number, including
area code, of agent for service)
</TABLE>
Approximate Date of Commencement of Proposed
Sale to the Public: Upon the effective date of the
merger described in this registration statement.
--------------------------------------------------------
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, please check the following box. |_|
----------------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of each class of Amount maximum maximum Amount of
securities to be registered to be offering price aggregate registration
registered(1) per share(2) offering price(2) fee
- ------------------------------------------------------------------------------------------------------------------------------------
Common stock, no par value 397,967 shares $12.84 $5,110,880 $1,763
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on the minimum closing sales price of a share of Whitney Holding
Corporation common stock, no par value, of $27.00 that may be applied
pursuant to the pricing formula described herein and the maximum aggregate
dollar amount of such securities that may be issued in connection with the
merger described in the Registration Statement.
(2) Calculated in accordance with Rule 457(f)(2) based on the book value per
share, as of May 31, 1996, of the common stock, $2.50 par value, of American
Bank and Trust to be cancelled by reason of the merger described herein
(assuming all Bank Options described herein are exercised), and included
herein solely for purposes of calculating the registration fee.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
- -------------------------------------------------------------------------------
<PAGE>
WHITNEY HOLDING CORPORATION
CROSS REFERENCE SHEET
<TABLE>
<C> <C> <C>
Item of Form S-4 Location in Prospectus
- ---------------- -------------------------------------
A. Information About the Transaction
1. Forepart of Registration Statement and Cover Page
Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages Inside Cover; Table of Contents
of Prospectus
3. Risk Factors, Ratio of Earnings to Fixed Summary
Charges and Other Information
4. Terms of the Transaction Summary; The Plan of Merger
5. Pro Forma Financial Information Unaudited Pro Forma Condensed Combined
Financial Information; Unaudited Pro Forma
Condensed Combined Financial Information
(American Bank & Trust Transaction Only)
6. Material Contacts with the Company Being The Plan of Merger - Background; The Plan
Acquired of Merger - Reasons for the Plan of Merger;
The Plan of Merger - Recommendation of the
Bank's Board of Directors
7. Additional Information Required for *
Reoffering by Persons and Parties Deemed
to be Underwriters
8. Interests of Named Experts and Counsel *
9. Disclosure of Commission Position on *
Indemnification for Securities Act Liabilities
B. Information About the Registrant
10. Information with Respect to S-3 Registrants Inside Cover; Summary; Information about
Whitney
11. Incorporation of Certain Information by Information about Whitney; Incorporation of
Reference Certain Documents by Reference
12. Information with Respect to S-2 or S-3 *
Registrants
13. Incorporation of Certain Information by *
Reference
14. Information with Respect to Registrants *
other than S-2 or S-3 Registrants
C. Information About the Company Being Acquired
15. Information with Respect to S-3 Companies *
<PAGE>
WHITNEY HOLDING CORPORATION
CROSS REFERENCE SHEET
Item of Form S-4 Location in Prospectus
- ---------------- ----------------------
16. Information with Respect to S-2 or S-3 *
Companies
17. Information with Respect to Companies Information about the Bank
other than S-2 or S-3 Companies
D. Voting and Management Information
18. Information if Proxies, Consents or
Authorizations are to be Solicited
(1) Date, Time and Place Information The Meeting - General
(2) Revocability of Proxy The Meeting - Solicitation, Voting and
Revocation of Proxies
(3) Dissenters' Rights of Appraisal Dissenters' Rights
(4) Persons Making Solicitation The Meeting - General; The Meeting -
Solicitation, Voting and Revocation of
Proxies
(5) Interests of Certain Persons in Summary - Interests of Certain Persons in the
Matters to be Acted upon; Voting Merger; The Plan of Merger - Interests of
Securities and Principal Holders Certain Persons in the Merger; Information
Thereof About the Bank - Security Holdings of
Principal Shareholders and Management
(6) Vote Required for Approval The Meeting - Shares Entitled to Vote;
Quorum; Vote Required
(7) Directors and Executive Officers; Information About the Bank
Executive Compensation; Certain
Relationships and Related
Transactions
19. Information if Proxies, Consents or *
Authorizations are not to be Solicited or in
an Exchange Offer
*Not applicable or answer is in the negative.
</TABLE>
<PAGE>
AMERICAN BANK AND TRUST
101 West Garden Street
Pensacola, Florida 32501
_______________, 1996
Dear Shareholder:
You are cordially invited to attend a special meeting of shareholders
of American Bank and Trust (the "Bank") to be held in the main office of the
Bank, 101 West Garden Street, Pensacola, Florida 32501, on ________,
____________, 1996 at ______ a.m., local time.
The purpose of the special meeting will be to consider and vote upon an
Agreement and Plan of Merger dated April 18, 1996, as amended, and a related
merger agreement (collectively, the "Plan of Merger") among the Bank, Whitney
Holding Corporation ("Whitney") and Whitney's wholly-owned subsidiary Whitney
National Bank of Florida ("WNB-Florida"). Pursuant to the Plan of Merger, the
Bank will merge into WNB-Florida, and each outstanding share of common stock of
the Bank will be converted into shares of Whitney common stock as more fully
described in the attached Proxy Statement-Prospectus. You are urged to read the
enclosed Proxy Statement-Prospectus in its entirety for a more complete
description of the terms of the Plan of Merger.
The Board of Directors of the Bank has unanimously approved the Plan of
Merger and believes it is in the best interests of the Bank and its
shareholders. Allen C. Ewing & Co., an investment banking firm experienced in
the valuation of banking institutions, has advised your Board of Directors that,
in its opinion, the consideration to be received by the Bank's shareholders in
the Plan of Merger is fair to such shareholders from a financial point of view.
Upon approval of the Plan of Merger, you would receive common stock of Whitney,
one of the largest Louisiana-based bank holding companies, and as a new
shareholder of Whitney, you would own stock that is publicly traded on the
NASDAQ Stock Market. Through WNB-Florida, a national bank subsidiary of Whitney
formed to facilitate the proposed merger, Whitney will be able to offer a broad
range of banking services in our market area and may be able to compete more
effectively in the changing economic and legal environment facing all financial
institutions. It is a condition to the consummation of the merger that the Bank
and Whitney receive an opinion that the merger will qualify as a tax-free
reorganization for federal income tax purposes.
The accompanying Notice of Special Meeting and Proxy
Statement-Prospectus contain information about the proposed merger. Please read
carefully these materials and the documents incorporated therein by reference,
copies of which are available as indicated under the caption "Incorporation of
Certain Documents by Reference."
The Board of Directors recommends that you vote FOR the Plan of Merger
and urges you to sign and date the enclosed proxy and return it promptly in the
accompanying envelope in order to ensure that your vote is represented. Of
course, if you attend the special meeting, you nevertheless may vote in person,
even though you previously returned your proxy.
Sincerely,
Frank E. Westmark Lamar B. Cobb
Chairman of the Board President and Chief Executive Officer
<PAGE>
AMERICAN BANK AND TRUST
101 West Garden Street
Pensacola, Florida 32501
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD _______, _____________, 1996
To the Holders of Common Stock of American Bank and Trust:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of American Bank and Trust (the "Bank") will be held at its main
office, 101 West Garden Street, Pensacola, Florida 32501, on ______,
___________, 1996 at _______ a.m., local time, for the following purposes:
1. To consider and vote upon a proposal to approve an Agreement
and Plan of Merger dated April 18, 1996, as amended, and a
related merger agreement (collectively, the "Plan of Merger")
pursuant to which, among other things: (a) the Bank would
merge into Whitney National Bank of Florida, a newly formed,
wholly-owned bank subsidiary of Whitney Holding Corporation
("Whitney"), and (b) each outstanding share of common stock of
the Bank would be converted into shares of Whitney common
stock as determined in accordance with the terms of the Plan
of Merger, all as more fully described in the attached Proxy
Statement-Prospectus.
2. To transact such other business as may properly come before
the Meeting or any adjournments thereof.
Only shareholders of record at the close of business on
__________________, 1996 are entitled to notice of and to vote at the Meeting or
any adjournment thereof. Dissenting shareholders who comply with the procedural
requirements of 12 U.S.C. ss.215a will be entitled to receive payment of the
cash value of their shares based upon the appraisal prescribed by 12 U.S.C.
ss.215a.
Shareholders are cordially invited to attend the Meeting in person.
Whether or not you plan to attend the Meeting, you are urged to complete, date
and sign the enclosed proxy and to return it promptly.
By order of the Board of Directors
of American Bank and Trust
Frank E. Westmark
Chairman of the Board
Pensacola, Florida
__________, 1996
- -------------------------------------------------------------------------------
I M P O R T A N T
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING REGARDLESS OF THE
NUMBER THAT YOU HOLD. PLEASE PROMPTLY COMPLETE, SIGN AND MAIL THE ENCLOSED PROXY
IN THE ACCOMPANYING POST-PAID ENVELOPE, WHETHER OR NOT YOU INTEND TO BE PRESENT
AT THE MEETING. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED BY
GIVING WRITTEN NOTICE OF REVOCATION TO THE SECRETARY OF THE BANK OR BY EXECUTION
OF A PROXY OF A LATER DATE FILED WITH THE SECRETARY OF THE BANK AT OR BEFORE THE
MEETING. IN ADDITION, IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY BY
VOTING IN PERSON.
- --------------------------------------------------------------------------------
<PAGE>
AMERICAN BANK AND TRUST
PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ________________________, 1996
WHITNEY HOLDING CORPORATION
PROSPECTUS
Common Stock, No Par Value
This Proxy Statement-Prospectus is being furnished to holders of common
stock, par value $2.50 per share ("Bank Common Stock"), of American Bank and
Trust (the "Bank") in connection with the solicitation of proxies by the Bank's
Board of Directors for use at a Special Meeting of Shareholders of the Bank (the
"Meeting") to be held on _________, _________________, 1996 at ______ a.m.,
local time, at the Bank's main office, 101 West Garden Street, Pensacola,
Florida 32501, and at any adjournment thereof. The purpose of the Meeting is to
consider and vote upon a proposal to approve an Agreement and Plan of Merger
dated April 18, 1996, as amended, and a related merger agreement (collectively,
the "Plan of Merger") between the Bank, on the one hand, and Whitney Holding
Corporation ("Whitney") and Whitney National Bank of Florida ("WNB-Florida"), on
the other hand. The Plan of Merger provides for, among other things, the merger
of the Bank into WNB-Florida (the "Merger"). Upon consummation of the Merger,
except as described herein, each outstanding share of Bank Common Stock and any
outstanding options to acquire Bank Common Stock would be converted into or
exchanged for shares of common stock, no par value, of Whitney ("Whitney Common
Stock") in the manner described herein, with cash being paid for any fractional
share interests. See "The Plan of Merger - Description of the Plan of Merger --
Conversion of Common Stock; Exchange for Unexercised Bank Options." Consummation
of the Merger requires the approval of the holders of at least two-thirds of the
outstanding shares of Bank Common Stock. Consummation of the Merger is also
subject to the satisfaction of certain other conditions, including obtaining
necessary regulatory approvals.
Whitney has filed a Registration Statement pursuant to the Securities
Act of 1933, as amended (the "Securities Act"), covering up to 397,967 shares of
Whitney Common Stock that may be issued in connection with the Merger, as
determined on the basis of the pricing formula described herein. The actual
number of shares of Whitney Common Stock to be issued will be determined in
accordance with the terms of the Plan of Merger. See "The Plan of Merger
Description of the Plan of Merger -- Conversion of Common Stock; Exchange for
Unexercised Bank Options." This Proxy Statement-Prospectus constitutes a
prospectus of Whitney relating to the shares of Whitney Common Stock that are
issuable in connection with the Merger. The outstanding shares of Whitney Common
Stock are, and the shares of Whitney Common Stock offered hereby will be,
included for quotation on the NASDAQ National Market System. The closing price
per share of Whitney Common Stock on the NASDAQ National Market System on
_________, 1996 was $____.
This Proxy Statement-Prospectus, and the accompanying Notice of Special
Meeting and form of proxy, are being first mailed to shareholders of the Bank
on or about __________________, 1996.
THE SECURITIES TO BE ISSUED IN CONNECTION WITH THE PROPOSED
MERGER HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCU-
RACY OR ADEQUACY OF THIS PROXY STATEMENT AND PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE NOT SAVINGS OR DEPOSIT ACCOUNTS OR OTHER OBLIGATIONS
OF ANY BANK OR NON-BANK SUBSIDIARY OF WHITNEY AND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE
FUND OR ANY OTHER GOVERNMENTAL AGENCY.
--------------------------------------------
This Proxy Statement-Prospectus is dated ______________, 1996
--------------------------------------------
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Proxy Statement-Prospectus, and, if given or made, such information or
representations must not be relied upon as having been authorized by Whitney or
the Bank. This Proxy Statement-Prospectus shall not constitute an offer to sell
or exchange or the solicitation of an offer to purchase any security, or the
solicitation of a proxy, nor shall there be any such sale, exchange or
solicitation in any jurisdiction in which, or to any person to whom, it is
unlawful to make such an offer, solicitation of an offer or proxy solicitation.
Neither the delivery of this Proxy Statement-Prospectus nor any distribution of
securities made hereunder shall, under any circumstances, create any implication
that the information herein is correct as of any time subsequent to the date
hereof or that there has been no change in the affairs of Whitney or the Bank
since the date hereof.
All information contained herein with respect to the Bank has been
provided by the Bank, and Whitney is relying on the accuracy of that
information. All information contained herein with respect to Whitney has been
provided by Whitney, and the Bank is relying on the accuracy of that
information.
AVAILABLE INFORMATION
Whitney is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith is
required to file reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, together with proxy statements and
other information filed by Whitney, can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
at 7 World Trade Center, 13th Floor, New York, New York 10048 and Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition,
Whitney Common Stock is included for quotation on the NASDAQ National Market
System (Symbol: WTNY), and such reports, proxy statements and other information
concerning Whitney can be inspected at the offices of the National Association
of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
Whitney has filed with the Commission a Registration Statement on Form
S-4 ("Registration Statement") under the Securities Act with respect to the
Whitney Common Stock offered by this Proxy Statement-Prospectus. This Proxy
Statement-Prospectus does not contain all of the information set forth in the
Registration Statement or the exhibits thereto. Such additional information can
be inspected and copied as set forth above. Statements contained in this Proxy
Statement-Prospectus as to the contents of any documents are necessarily
summaries of the documents, and each statement is qualified in its entirety by
reference to the copy of the applicable document filed with the Commission. For
further information with respect to Whitney and the transactions contemplated
hereby, reference is made to the Registration Statement, including the exhibits
thereto and any documents incorporated by reference therein.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Proxy Statement-Prospectus incorporates documents by reference
that are not presented herein or delivered herewith. See "Information about
Whitney -- Incorporation of Certain Information about Whitney by Reference."
Whitney hereby undertakes to provide copies of any such documents, other than
exhibits to such documents that are not specifically incorporated by reference
therein, without charge to any person, including any beneficial owner of Bank
Common Stock, to whom this Proxy Statement-Prospectus is delivered, upon the
written or oral request of such person to Whitney Holding Corporation,
Attention: Edward B. Grimball, Chief Financial Officer, 228 St. Charles Avenue,
New Orleans, Louisiana 70130 (Telephone: (504) 586-7252). In order to ensure
timely delivery of the documents, any request should be made by __________,
1996.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<C> <C> <C>
SUMMARY.........................................................................................................iii
Whitney and the Bank...................................................................................iii
Whitney .....................................................................................iii
The Bank .....................................................................................iii
The Meeting............................................................................................iii
General .....................................................................................iii
Purpose of the Meeting........................................................................iii
Vote Required...........................................................................................iv
Reasons for the Plan of Merger..........................................................................iv
Recommendation of the Bank's Board of Directors.........................................................iv
Fairness Opinion of Allen C. Ewing & Co.................................................................iv
The Plan of Merger......................................................................................iv
General ......................................................................................iv
Conversion of Common Stock; Exchange for Unexercised Bank Options..............................iv
Exchange of Certificates......................................................................vii
Regulatory Approvals and Other Conditions to Consummation of the Merger.......................vii
Waiver, Amendment and Termination.............................................................vii
Accounting Treatment..................................................................................viii
Certain Federal Income Tax Consequences...............................................................viii
Dissenters' Rights....................................................................................viii
Interests of Certain Persons..........................................................................viii
Market Prices...........................................................................................ix
Comparative Rights of Shareholders......................................................................ix
Selected Financial Data of the Bank......................................................................x
Selected Financial Data of Whitney......................................................................xi
Comparative Per Share Data.............................................................................xii
THE MEETING.......................................................................................................1
General ................................................................................................1
Purpose of the Meeting...................................................................................1
Shares Entitled to Vote; Quorum; Vote Required...........................................................1
Solicitation, Voting and Revocation of Proxies...........................................................2
THE PLAN OF MERGER................................................................................................2
General ................................................................................................2
Background...............................................................................................2
Reasons for the Plan of Merger...........................................................................3
General .......................................................................................3
Whitney .......................................................................................3
The Bank .......................................................................................4
Recommendation of the Bank's Board of Directors..........................................................4
Fairness Opinion of Allen C. Ewing & Co..................................................................4
Description of the Plan of Merger........................................................................7
General .......................................................................................7
Conversion of Common Stock; Exchange for Unexercised Bank Options...............................7
Exchange of Certificates.......................................................................10
Transfer and Exchange Agents...................................................................10
Regulatory Approvals and Other Conditions of the Merger........................................10
Effective Date.................................................................................11
Conduct of Business Prior to the Effective Date................................................11
Waiver, Amendment and Termination..............................................................12
Expenses.......................................................................................13
Interests of Certain Persons............................................................................13
Employee Benefits..............................................................................13
i
<PAGE>
Management.....................................................................................13
Bank Options...................................................................................13
Indemnification and Insurance..................................................................14
Status Under Federal Securities Laws; Certain Restrictions on Resales ..................................14
Accounting Treatment....................................................................................14
CERTAIN FEDERAL INCOME TAX CONSEQUENCES..........................................................................15
DISSENTERS' RIGHTS...............................................................................................16
UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL INFORMATION.........................................................................17
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(American Bank and Trust Transaction Only).....................................................................25
INFORMATION ABOUT THE BANK.......................................................................................33
Description of Business.................................................................................33
Competition.............................................................................................33
Supervision and Regulation..............................................................................33
Market Prices and Dividends.............................................................................34
Property ...............................................................................................34
Employees ..............................................................................................34
Security Holdings of Principal Shareholders and Management..............................................34
THE BANK'S MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS......................................................37
INFORMATION ABOUT WHITNEY........................................................................................50
General ...............................................................................................50
Market Prices of and Dividends Declared on Whitney Common Stock ........................................51
Incorporation of Certain Information about Whitney by Reference.........................................51
COMPARATIVE RIGHTS OF SHAREHOLDERS...............................................................................52
LEGAL MATTERS....................................................................................................59
EXPERTS..........................................................................................................59
OTHER MATTERS....................................................................................................59
BANK FINANCIAL STATEMENTS.......................................................................................F-1
Appendix A - Agreement and Plan of Merger..............................................................A-1
Appendix B - Fairness Opinion of Allen C. Ewing & Co...................................................B-1
Appendix C - Selected Provisions of 12 U.S.C. ss.215a..................................................C-1
ii
</TABLE>
<PAGE>
SUMMARY
The following summary is not intended to be complete and is qualified
in its entirety by the more detailed information appearing elsewhere herein, the
appendices hereto and the documents incorporated herein by reference.
Shareholders are urged to read carefully all such material.
Whitney and the Bank
Whitney. Whitney Holding Corporation, a Louisiana corporation
("Whitney"), is a multi-bank holding company registered pursuant to the Bank
Holding Company Act of 1956. Whitney became an operating entity in 1962 with
Whitney National Bank ("Whitney Bank") as its only significant subsidiary.
Whitney Bank, which has its headquarters in Orleans Parish, Louisiana, has been
engaged in general banking business in the City of New Orleans since 1883. It
currently operates 58 branches in south Louisiana and a foreign branch on Grand
Cayman in the British West Indies. In December 1994, Whitney established the
Whitney Bank of Alabama and, through this new banking subsidiary, acquired the
Mobile area operations of The Peoples Bank, Elba, Alabama on February 17, 1995.
Whitney Bank of Alabama operates eight branches and one loan production office
serving metropolitan Mobile, Alabama and the Alabama Gulf Coast region.
Whitney National Bank of Florida ("WNB-Florida") is a wholly-owned
subsidiary of Whitney that was organized under the National Banking Act to
facilitate the mergers described herein. See "The Meeting - Purpose of the
Meeting" and "The Plan of Merger - General."
Whitney and its subsidiaries are sometimes referred to collectively
herein as "Whitney's consolidated group." At March 31, 1996, Whitney had total
consolidated assets of approximately $3.499 billion and total consolidated
deposits of approximately $2.768 billion. Whitney's principal executive offices
are at 228 St. Charles Avenue, New Orleans, Louisiana 70130, and its telephone
number is (504) 586-7117. See "Information About Whitney."
The Bank. American Bank and Trust (the "Bank"), a Florida
state-chartered bank, is a full-service commercial bank, without trust powers,
doing business through its office in Pensacola, Florida. At March 31, 1996, the
Bank had total assets of approximately $58,748,000 and total deposits of
approximately $53,689,000.
The Bank's principal executive offices are at 101 West Garden Street,
Pensacola, Florida 32501, and its telephone number is (904) 432-2481. See
"Information About the Bank."
The Meeting
General. A special meeting of the shareholders of the Bank (the
"Meeting") will be held on ________________, 1996 at the time and place set
forth in the accompanying Notice of Special Meeting of Shareholders. Only record
holders of the common stock, $2.50 par value per share, of the Bank ("Bank
Common Stock") at the close of business on __________________, 1996 are entitled
to notice of and to vote at the Meeting. On that date, there were _____________
shares of Bank Common Stock issued and outstanding, each of which is entitled to
one vote on each matter properly to come before the Meeting.
Purpose of the Meeting. The purpose of the Meeting is to vote upon a
proposal to approve an Agreement and Plan of Merger dated April 18, 1996, as
amended, and a related merger agreement (collectively, the "Plan of Merger"),
copies of which are attached hereto as Appendix A, pursuant to which, among
other things, the Bank will merge into WNB-Florida (the "Merger") and
shareholders of the Bank (and the holders of any outstanding options to acquire
Bank Common Stock) will receive shares of Whitney Common Stock (and cash in lieu
of fractional shares) as described below under " - The Plan of Merger --
Conversion of Common Stock; Exchange for Unexercised Bank Options." See "The
Meeting - Purpose of the Meeting."
iii
<PAGE>
Vote Required
The Plan of Merger must be approved by the affirmative vote of holders
of at least two-thirds of the outstanding shares of Bank Common Stock.
Directors, executive officers and certain principal shareholders of the Bank
holding an aggregate of 244,941 shares, or approximately 52%, of the outstanding
shares of Bank Common Stock have agreed, subject to certain conditions, to vote
their shares in favor of the Plan of Merger at the Meeting. Whitney, as the sole
shareholder of WNB-Florida, must approve the Plan of Merger. Under Louisiana
law, shareholders of Whitney are not required to approve the Plan of Merger. See
"The Meeting - Shares Entitled to Vote; Quorum; Vote Required."
Reasons for the Plan of Merger
The Board of Directors of the Bank believes that the approval of the
Plan of Merger is in the best interests of the Bank and its shareholders. In
reaching its decision, the Board considered a number of factors, including the
Bank's and Whitney's business and prospects, the price to be received by the
Bank's shareholders, the liquidity of Whitney Common Stock and the opinion of
Allen C. Ewing & Co. that the consideration to be received by the Bank's
shareholders is fair, from a financial point of view. See "The Plan of Merger -
Background" and "The Plan of Merger Reasons for the Plan of Merger."
Recommendation of the Bank's Board of Directors
THE BOARD OF DIRECTORS OF THE BANK HAS UNANIMOUSLY APPROVED THE PLAN OF
MERGER AND RECOMMENDS THAT ITS SHAREHOLDERS VOTE FOR APPROVAL OF THE PLAN OF
MERGER.
Fairness Opinion of Allen C. Ewing & Co.
Allen C. Ewing & Co. ("Ewing") has rendered its opinion to the Bank's
Board of Directors that, based on and subject to the assumptions made, the
factors considered, the review undertaken and the limitations stated, the
consideration to be received by the Bank's shareholders under the Plan of Merger
is fair to the Bank's shareholders from a financial point of view. Ewing's
opinion is directed only to the fairness of the terms of the Plan of Merger from
a financial point of view and does not constitute a recommendation to any
shareholder on how to vote at the Meeting.
See "The Plan of Merger -- Fairness Opinion of Allen C. Ewing & Co."
A copy of the fairness opinion of Ewing is attached as Appendix B and
should be read in its entirety.
The Plan of Merger
General. Pursuant to the Plan of Merger, if all conditions to the
Merger are satisfied or waived, on the effective date of the Merger, the Bank
will be merged with and into WNB-Florida, and the separate existence of the Bank
will cease. By reason of the Merger, and subject to the adjustments described
below, each outstanding share of Bank Common Stock (other than shares as to
which dissenters' rights have been perfected and not withdrawn) will be
converted into a number of shares of common stock, no par value, of Whitney
("Whitney Common Stock") with an aggregate market value of approximately $19.70,
provided that the Average Market Price (as defined below) of Whitney Common
Stock is not less than $27.00 nor greater than $35.00. Any outstanding options
to acquire Bank Common Stock that remain unexercised immediately prior to the
Merger will also be exchanged for shares of Whitney Common Stock in connection
with the Merger. The total consideration to be paid by Whitney in connection
with the Merger is subject to a downward adjustment if the Bank's 1996 earnings
are less than the level projected by the Bank's management. See "- Conversion of
Common Stock; Exchange for Unexercised Bank Options," below, and "The Plan of
Merger - Description of the Plan of Merger -- General" and "The Plan of Merger -
Description of the Plan of Merger -- Conversion of Common Stock; Exchange for
Unexercised Bank Options" elsewhere in this Proxy Statement- Prospectus.
Conversion of Common Stock; Exchange for Unexercised Bank Options. The
Plan of Merger provides that, assuming no fractional shares or perfected
dissenters' rights, shareholders of the Bank will receive a total number of
iv
<PAGE>
shares of Whitney Common Stock equal to the "Acquisition Price," divided by the
average of the closing per share trading prices of Whitney Common Stock
(adjusted appropriately for any stock split, stock dividend, recapitalization,
reclassification or similar transaction that is effected, or for which a record
date occurs) on the 20 trading days preceding the fifth trading day immediately
prior to the effective date of the Merger, as reported in the Wall Street
Journal (the "Average Market Price"); provided, however, that if the Average
Market Price as so calculated is less than $27.00 or greater than $35.00, the
"Average Market Price" to be used in calculating the number of shares of Whitney
Common Stock to be issued in the Merger shall be $27.00 or $35.00, as the case
may be. The total number of shares of Whitney Common Stock to be issued by
reason of the Merger as so calculated (the "Maximum Deliverable Amount of
Whitney Shares") will vary depending upon the Average Market Price of the
Whitney Common Stock and the other factors described below.
The "Acquisition Price" is equal to $10,250,000, plus the dollar amount
of actual cash proceeds received by the Bank from the exercise of any
outstanding Bank Options (as hereinafter defined) between April 18, 1996 and the
effective date of the Merger, minus the Net Value (calculated in the manner
described below) of any Bank Options that remain unexercised on the effective
date of the Merger, minus the "Deductible Amount."
The "Deductible Amount" is the dollar amount, if any, by which the
Bank's annualized net income after taxes for calendar year 1996 is less than
$820,000, as projected by the Bank, provided that the Deductible Amount will be
zero if the Bank's 1996 net income after taxes on an annualized basis is within
7.5% of $820,000.
The Bank has options outstanding that grant the holders thereof the
right to acquire up to an aggregate of 75,936 shares of Bank Common Stock ("Bank
Options"). These options were granted to Bank directors pursuant to Bank's
Directors' Stock Option Plan of 1993 (the "Option Plan"). The Bank Options have
an exercise price of $6.52 per share of Bank Common Stock acquired, and under
the terms of the Option Plan, any unexercised Bank Options would terminate upon
consummation of the Merger. The Plan of Merger provides that, conditioned upon
consummation of the Merger but effective immediately prior thereto, each
outstanding unexercised Bank Option will be exchanged for shares of Whitney
Common Stock having a value, calculated based on the Average Market Price, equal
to the amount by which the dollar value of the shares of Whitney Common Stock
into which a share of Bank Common Stock would be converted in the Merger exceeds
the exercise price for that share of Bank Common Stock under the terms of Bank
Options. The difference between those two amounts is referred to as the "Net
Value" of an unexercised Bank Option and is equal to $13.172804 minus the
quotient of the Deductible Amount divided by 545,636 (the number of shares of
Bank Common Stock that would be outstanding if all Bank Options were exercised).
If no Bank Options are exercised, the aggregate Net Value of the 75,936 Bank
Options outstanding at the effective time of the Merger would be $1,000,290,
which amount would be deducted in determining the Acquisition Price, and Whitney
Common Stock having an aggregate value equal to such amount (calculated based on
the Average Market Price) would be issued to the holders of such unexercised
Bank Options in exchange therefor.
The exercise or non-exercise of Bank Options prior to the effective
date of the Merger will not affect the per share exchange ratio of the Whitney
Common Stock to be issued to the holders of Bank Common Stock by reason of the
Merger. As noted above, the "Acquisition Price" increases $6.52 for each Bank
Option that is exercised prior to the effective date of the Merger; but, on a
per share basis, that increase will be offset exactly by the additional shares
of Bank Common Stock that will have been issued upon exercise of the Bank
Options. Similarly, the "Acquisition Price" decreases by the Net Value of any
unexercised Bank Options; but, on a per share basis, any such decrease would be
offset exactly because the shares of Bank Common Stock underlying those Bank
Options will not have been issued.
By reason of the Merger, each share of Bank Common Stock outstanding on
the effective date of the Merger (other than shares as to which dissenters'
rights have been perfected and not withdrawn) will be converted into a number of
shares of Whitney Common Stock equal to the quotient of (a) the Maximum
Deliverable Amount of Whitney Shares divided by (b) the total number of shares
of Bank Common Stock issued and outstanding on the effective date of the Merger.
As of June 30, 1996, there were outstanding 469,700 shares of Bank Common Stock.
The following table sets forth examples of the number of shares of Whitney
Common Stock into which each share of Bank Common Stock would be converted on
the effective date of the Merger, assuming that (a) the Average Market Price for
Whitney Common Stock is as specified below, (b) the Deductible Amount is zero
and (c) none of the Bank Options are exercised (resulting in an Acquisition
Price of $9,249,710 for the outstanding shares of Bank Common Stock).
v
<PAGE>
<TABLE>
<C> <C> <C>
Total Number of Shares of
Assumed Average Whitney Common Stock Number of Whitney Shares Per
Market Price of Whitney Common To Be Issued for Shares of Bank
Stock Bank Common Stock(1) Share(1) (2)
------------------------------- ------------------------------ ------------------------------
$27.00 342,582 0.7294
29.00 318,956 0.6791
31.00 298,378 0.6353
33.00 280,294 0.5968
35.00 264,277 0.5627
</TABLE>
- -----------------------------
(1) If the Deductible Amount is zero and all of the Bank Options are
exercised (resulting in an Acquisition Price of $10,745,103), a total
of 397,967 shares of Whitney Common Stock would be issued by reason of
the Merger assuming an Average Market Price of $27.00, and 307,003
shares of Whitney Common Stock would be so issued assuming an Average
Market Price of $35.00; however, as discussed in the preceding
paragraphs, the per share exchange ratios would remain constant at
0.7294 and 0.5627, respectively, because of the additional 75,936
shares of Bank Common Stock that would be outstanding.
(2) Based on 469,700 shares of Bank Common Stock, the number of shares
outstanding on June 30, 1996. Due to fluctuations in the trading prices
of Whitney Common Stock and the fact that the Acquisition Price cannot
be determined until the effective date of the Merger, the actual number
of shares to be received by the Bank's shareholders cannot currently be
determined.
The Plan of Merger provides that the total number of shares of Whitney
Common Stock to be issued in the Merger becomes fixed at the upper end and the
lower end of the range of Average Market Prices set forth in the preceding
table, such that if the calculation of Average Market Price were to result in an
amount less than $27.00, 342,582 shares of Whitney Common Stock would be issued
in the Merger regardless of their market value, and if the calculation of
Average Market Price were to result in an amount exceeding $35.00, 264,277
shares of Whitney Common Stock would be issued in the Merger regardless of their
market value, in each case assuming an Acquisition Price of $9,249,710.
Accordingly, it is a condition to the Bank's obligations to consummate the
Merger that the Average Market Price of the Whitney Common Stock as so
calculated not be less than $27.00, and it is a condition to Whitney's
obligations to consummate the Merger that the Average Market Price as so
calculated not be more than $35.00. If the Bank were to waive this condition to
its obligation to consummate the Merger, the aggregate market value of the
Whitney Common Stock to be issued in the Merger may be lower than it would be if
the calculation of Average Market Price resulted in an amount between $27.00 and
$35.00. If, on the other hand, Whitney were to waive this condition to its
obligation to consummate the Merger, the aggregate market value of the Whitney
Common Stock to be issued in the Merger may be higher than it would be if such
calculation resulted in a price within the specified range. See "-- Regulatory
Approvals and Other Conditions to Consummation of the Merger;" "The Plan of
Merger - Description of the Plan of Merger -- Conversion of Common Stock;
Exchange for Unexercised Bank Options" and "The Plan of Merger - Description of
the Plan of Merger -- Regulatory Approvals and Other Conditions of the Merger."
On ___________________, 1996, the closing trading price for a share of
Whitney Common Stock was $_______, and if such date had been the effective date
of the Merger, the Average Market Price would have been $_______. See "The Plan
of Merger - Description of the Plan of Merger -- Conversion of Common Stock."
vi
<PAGE>
In lieu of issuing any fractional share of Whitney Common Stock, each
shareholder of the Bank who would otherwise be entitled thereto will receive a
cash payment (without interest) equal to such fractional share multiplied by the
Average Market Price. Because the per share exchange ratio in the Merger is less
than one-to-one, any shareholder of the Bank holding less than two shares of
Bank Common Stock will not receive any Whitney Common Stock in the Merger, but
instead will receive solely cash in exchange for his share of Bank Common Stock.
Exchange of Certificates. Upon consummation of the Merger, a letter of
transmittal, together with instructions for the exchange of certificates
representing shares of Bank Common Stock for certificates representing shares of
Whitney Common Stock, will be mailed to each person who was a shareholder of
record of the Bank on the effective date of the Merger. Shareholders are
requested not to send in their stock certificates until they have received a
letter of transmittal and further written instructions.
Shareholders of the Bank who cannot locate their stock certificates are
urged to contact promptly:
Lamar B. Cobb, President
American Bank and Trust
101 West Garden Street
Pensacola, Florida 32501
(904) 432-2481
A new stock certificate will be issued to replace the lost certificate(s) only
upon execution by the shareholder of an affidavit certifying that his
certificate(s) cannot be located and containing an agreement to indemnify the
Bank and Whitney against any claim that may be made against the Bank or Whitney
by the owner of the certificate(s) alleged to have been lost or destroyed. The
Bank or Whitney may also require the shareholder to post a bond in such sum as
is sufficient to support the shareholder's agreement to indemnify the Bank and
Whitney. See "The Plan of Merger Description of the Plan of Merger -- Exchange
of Certificates."
Regulatory Approvals and Other Conditions to Consummation of the
Merger. In addition to approval by the shareholders of the Bank, consummation of
the Merger is conditioned upon, among other things, (i) the accuracy on the date
of closing of the representations and warranties, and the compliance with
covenants, made in the Plan of Merger by each party, and the absence of any
material adverse change in the financial condition, results of operations,
business or prospects of the other party's consolidated group, (ii) the receipt
by Whitney and WNB-Florida of required regulatory approvals, (iii) the receipt
by Whitney of assurances that the Merger may be accounted for as a
pooling-of-interests, (iv) the receipt by Whitney and the Bank of opinions as to
the qualification of the Merger as a tax-free reorganization under applicable
law, (v) the Bank's receipt of a letter from Ewing, dated as of the date of the
Meeting, in form and substance satisfactory to the Bank, confirming its fairness
opinion to the Board of Directors of the Bank and (vi) certain other conditions
customary for agreements of this sort. It is a condition to Whitney's
obligations to consummate the Merger that the Average Market Price of the
Whitney Common Stock (calculated without regard to the limitations contained in
the definition of Average Market Price) shall not be more than $35.00, unless
Whitney has executed a definitive merger or other acquisition agreement with a
third party as a result of which Whitney would cease to be an independent,
public company. It is a condition to the Bank's obligations that the Average
Market Price of the Whitney Common Stock as so calculated shall not be less than
$27.00. The parties intend to consummate the Merger as soon as practicable after
all of the conditions to the Merger have been met or waived.
On _______________________, 1996, Whitney filed an application with
the Office of the Comptroller of the Currency of the United States (the
"Comptroller") seeking approval of the Merger and an interim bank charter for
WNB- Florida. Whitney has also filed applications with the Board of Governors of
the Federal Reserve System (the "Reserve Board") and the Federal Deposit
Insurance Corporation in connection with the formation of WNB-Florida. The
Comptroller application was accepted on ____________________, 1996 and the
Reserve Board application was accepted on _________________, 1996. Whitney
expects to receive final approvals from each of these governmental agencies
prior to the Meeting; however, there can be no assurance that these approvals
will be obtained, or that the other conditions to consummation of the Merger
will be satisfied by such date or at all. See "The Plan of Merger - Description
of the Plan of Merger -- Regulatory Approvals and Other Conditions of the
Mergers."
vii
<PAGE>
Waiver, Amendment and Termination. The Plan of Merger provides that
each of the parties to the Plan of Merger may waive any of the conditions to its
obligation to consummate the Merger other than approval by the shareholders of
the Bank, the absence of a stop order suspending the effectiveness of the
Registration Statement of which this Proxy Statement-Prospectus forms a part,
the receipt of all necessary regulatory approvals, the satisfaction of all
requirements prescribed by law for consummation of the Merger, and the Bank's
receipt of a letter from Ewing dated as of the date of the Meeting, in form and
substance satisfactory to the Bank, confirming Ewing's fairness opinion to the
Board of Directors of the Bank.
The Plan of Merger may be amended, at any time before or after its
approval by the shareholders of the Bank, by the mutual agreement of the Board
of Directors of the parties to the Plan of Merger.
The Plan of Merger may be terminated at any time prior to the effective
date (i) by the mutual consent of Whitney and the Bank; (ii) in the event of a
breach of any representation, warranty or covenant in the Plan of Merger that
cannot be cured by the earlier of 15 days after written notice of such breach or
December 31, 1996; (iii) if the Merger has not occurred by December 31, 1996;
(iv) if the number of shares of Bank Common Stock as to which the holders
thereof are, on the effective date, legally entitled to assert dissenting
shareholders rights plus the number of shares to which the holders thereof are
entitled to receive cash payments in lieu of fractional shares, exceeds that
number of shares of Bank Common Stock that would preclude pooling-of-interests
accounting for the Merger (i.e., if, after the Meeting, more than 10% of the
Bank Common Stock would be subject to exchange for cash rather than Whitney
Common Stock as the result of holders exercising dissenters' rights or receiving
cash in lieu of fractional shares); (v) if the Bank receives a written offer
with respect to another acquisition transaction and the Board of Directors of
the Bank determines in good faith, after consultation with its financial
advisers and counsel, that such transaction is more favorable to the Bank's
shareholders than the transactions contemplated by the Plan of Merger; or (vi)
on the basis of certain other grounds specified in the Plan of Merger. The Plan
of Merger provides for a termination fee of $500,000 payable to Whitney if the
Bank terminates the Plan of Merger under the circumstances described in clause
(v) of the preceding sentence. See "The Plan of Merger - Description of the Plan
of Merger -- Waiver, Amendment and Termination."
Accounting Treatment
Whitney intends to account for the Merger as a pooling-of-interests,
and it is a condition to Whitney's obligation to consummate the Merger that
neither Whitney's independent public accountants nor the Commission shall have
taken the position that the Plan of Merger does not qualify for
pooling-of-interests accounting treatment. See "The Plan of Merger - Accounting
Treatment."
Certain Federal Income Tax Consequences
Consummation of the Merger is conditioned upon receipt by Whitney and
the Bank of an opinion from Arthur Andersen LLP to the effect that, among other
things, the Merger will qualify as a tax-free reorganization under applicable
law and that each Bank shareholder who receives Whitney Common Stock pursuant to
the Merger will not recognize gain or loss except with respect to (a) the
receipt of cash (i) in lieu of fractional shares of Whitney Common Stock or (ii)
pursuant to the exercise of dissenters' rights, and (b) the receipt of Whitney
Common Stock in exchange for unexercised Bank Options pursuant to the Plan of
Merger. Because of the complexity of the tax laws, each shareholder should
consult his tax advisor concerning the applicable federal, state and local
income tax consequences of the Merger. See "Certain Federal Income Tax
Consequences."
Dissenters' Rights
Shareholders of the Bank who perfect dissenters' rights will not
receive Whitney Common Stock but will instead be entitled to receive the value
of their shares in cash, as determined under 12 U.S.C. ss.215a. Failure to
comply with statutory procedures in the exercise of dissenters' rights will
nullify such rights. See "Dissenters' Rights."
viii
<PAGE>
Interests of Certain Persons
The executive officers and members of the Board of Directors of the
Bank have interests in the Merger that are in addition to their interest as
shareholders of the Bank. These interests include, among others, payments to be
received by executive officers pursuant to the Bank's incentive bonus
arrangements; the directors' receipt of the Net Value of their Bank Options
without having to exercise those options; the continued employment of the
executive officers by Whitney after the effective date; the continuation of
certain employee benefits generally; and provisions in the Plan of Merger
relating to indemnification of directors and officers of the Bank and
continuation of directors and officers liability insurance.
See "The Plan of Merger - Interests of Certain Persons."
Market Prices
On April 17, 1996, the last trading day preceding the date that Whitney
and the Bank publicly announced that they had entered into the Plan of Merger,
the closing sales price for a share of Whitney Common Stock, as quoted on the
NASDAQ National Market System, was $31.00. No assurance can be given as to the
market price of Whitney Common Stock on the effective date of the Merger. On
___________________, 1996, the closing sales price for a share of Whitney Common
Stock was $_______, and if such date had been the effective date of the Merger,
the Average Market Price would have been approximately $_______. See "The Plan
of Merger - Description of the Plan of Merger -- Regulatory Approvals and Other
Conditions of the Mergers."
The Bank Common Stock is not traded on any exchange, and there is no
established public trading market for such stock. There are no bid or asked
prices available for Bank Common Stock. There is, however, very limited and
sporadic trading of Bank Common Stock in its local area. Based on the limited
information available to the Bank's management, only approximately 20 trades
were effected during the last two years at prices ranging from $6 to $16. The
Banks's management believes that such trades were effected on an arms-length
basis, but no assurance is given in this regard. See "Information About the Bank
- - Market Prices and Dividends."
Comparative Rights of Shareholders
If the Merger is consummated, shareholders of the Bank, other than
those exercising dissenters' rights, will become shareholders of Whitney, and
their rights will be governed by and be subject to Whitney's Articles of
Incorporation and Bylaws rather than those of the Bank. Whitney's Articles of
Incorporation contain provisions that are different from those of the Bank, some
of which may have the effect of discouraging a third party from seeking to
obtain control of Whitney in a transaction not approved by Whitney's Board of
Directors. See "Comparative Rights of Shareholders."
ix
<PAGE>
Selected Financial Data of the Bank
The following selected financial data with respect to each of the
fiscal years in the five-year period ended December 31, 1995 have been derived
from the Bank's audited financial statements. The selected financial data for
the three months ended March 31, 1996 and 1995 have been derived from the Bank's
unaudited financial statements, which, in the opinion of the Bank's management,
reflect all adjustments that are necessary for a fair presentation of the
results of operations for the interim periods presented. The results of
operations for the three-month period ended March 31, 1996 are not necessarily
indicative of the results to be expected for the entire year. The information
set forth below should be read in conjunction with the Bank's financial
statements and notes thereto appearing elsewhere in this Proxy
Statement-Prospectus.
<TABLE>
<C> <C> <C> <C> <C> <C> <C> <C>
Three months ended
March 31 Years ended December 31,
-------------------------------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---------- --------- -------- ---------- --------- ---------- ---------
(In thousands, except per share data, unaudited)
Average Balance Sheet Data:
Total assets........................ $62,347 $40,243 $57,327 $33,342 $32,322 $30,655 $30,865
Total earning assets................ 58,045 36,309 52,936 30,210 28,831 28,320 26,822
Total loans......................... 25,803 24,587 24,596 22,097 18,730 19,632 18,740
Total investment in securities...... 30,381 7,747 24,137 6,075 6,229 6,520 6,672
Interest bearing deposits........... 52,197 32,000 48,422 25,972 25,868 24,929 25,125
Noninterest bearing deposits........ 4,592 4,296 4,427 3,989 3,368 2,756 2,768
Shareholders' equity................ 4,780 3,711 4,066 3,176 2,870 2,612 2,513
Income Statement Data:
Total interest income............... $1,170 $763 $4,391 $2,431 $2,259 $2,476 $2,797
Net interest income................. 532 383 1,760 1,565 1,386 1,413 1,250
Provision for possible loan losses.. -0- 20 20 135 300 115 112
Non-interest income................. 72 76 297 213 201 192 181
Non-interest expense................ 272 273 1,087 1,053 1,176 1,311 1,267
Net income.......................... 209 104 596 778 212 179 52
Per Share Data:
Primary earnings per share.......... $ .45 $ .22 $ 1.27 $1.66 $ .47 $ .39 $ .11
Fully diluted earnings per share.... .38 .19 1.09 1.43 .39 .32 .10
Cash dividends per share............ -0- -0- -0- -0- -0- -0- -0-
Book value per share, end of period. 9.74 7.90 9.93 7.63 6.44 5.98 5.54
Key Ratios:
Net income as a percent of
average assets.................... 1.34% 1.03% 1.04% 2.33% 0.66% 0.58% 07%
Net income as a percent of
average equity.................... 17.49% 11.20% 14.66% 24.50% 7.38% 6.85% 2.07%
Allowance for loan losses as
a percent of loans and leases
at period end..................... 1.27% 1.45% 1.29% 1.23% 1.08% 1.84% 1.25%
Average equity as a percent
of average total assets........... 7.67% 9.22% 7.09% 9.52% 8.87% 8.52% 8.14%
Dividend payout ratio............... --- --- --- --- --- --- ---
</TABLE>
x
<PAGE>
Selected Financial Data of Whitney
The following selected financial data with respect to each of the
fiscal years in the five-year period ended December 31, 1995 and for the
three-month periods ended March 31, 1996 and 1995 have been derived from the
consolidated financial statements of Whitney's consolidated group and should be
read in conjunction with the information concerning Whitney that has been
incorporated by reference in this Proxy Statement-Prospectus. The selected
financial data for the three months ended March 31, 1996 and 1995 have been
derived from Whitney's unaudited financial statements, which, in the opinion of
Whitney's management, reflect all adjustments that are necessary for a fair
presentation of the results of operations for the interim periods presented. The
results of operations for the three-month period ended March 31, 1996 are not
necessarily indicative of the results to be expected for the entire year.
Selected financial data for the years 1991 through 1995 have been restated to
reflect the merger, effective March 8, 1996, of First Citizens BancStock, Inc.
into Whitney, which was accounted for as a pooling-of-interests.
<TABLE>
<C> <C> <C> <C> <C> <C> <C>
Three months ended
March 31, Years ended December 31,
1996 1995 1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- ----------- ----------- ----------
(In thousands, except per share data, unaudited)
Average Balance Sheet Data:
Total assets................... $3,432,566 $3,123,194 $3,188,930 $3,182,674 $3,117,512 $3,061,976 $3,031,841
Total earning assets........... 3,116,772 2,817,285 2,880,631 2,877,898 2,817,526 2,761,104 2,717,010
Total loans.................... 1,596,782 1,191,481 1,321,533 1,096,672 1,056,679 1,225,546 1,450,497
Total investment in securities. 1,487,937 1,594,055 1,505,492 1,704,687 1,637,619 1,362,006 1,096,086
Interest bearing deposits...... 1,899,937 1,795,598 1,813,093 1,860,866 1,855,153 1,871,189 1,858,429
Noninterest bearing deposits... 817,919 787,603 811,616 792,448 765,457 723,932 681,233
Shareholders' equity........... 368,024 326,432 339,145 298,142 239,663 193,280 184,530
Income Statement Data:
Total interest income.......... $56,941 $49,805 $213,295 $192,750 $186,105 $195,079 $223,303
Net interest income............ 35,815 33,672 141,428 135,247 131,424 122,321 107,314
Provision for (reduction in)...
reserve for possible loan losses -- 100 (9,400) (26,004) (59,625) 4,415 46,692
Non-interest income............ 8,697 8,636 33,205 34,129 33,216 29,557 28,341
Non-interest expense........... 32,905 29,164 (119,481) (112,394) (108,237) (120,615) (112,303)
Net income (loss).............. 8,037 8,945 44,349 56,198 79,228 22,415 (3,181)
Per Share Data:
Primary earnings (loss) per
share........................ $0.47 $0.53 $2.61 $3.39 $4.81 $1.37 ($0.19)
Fully diluted earnings (loss)
per share.................... 0.47 0.53 2.60 3.39 4.81 1.37 (0.19)
Cash dividends per share....... 0.22 0.18 0.77 0.60 0.41 0.09 0.02
Book value per share, end of
period....................... 21.75 19.80 21.69 19.29 17.07 12.46 11.17
Key Ratios:
Net income (loss) as a percent of
average assets............... 0.94% 1.16% 1.39% 1.77% 2.54% 0.73% (0.10%)
Net income (loss) as a percent of
average equity............... 8.76% 11.11% 13.08% 18.85% 33.06% 11.60% (1.72%)
Net interest margin............ 4.75% 4.99% 5.05% 4.85% 4.79% 4.54% 4.06%
Allowance for loan losses as
a percent of loans and leases
at period end................ 2.60% 3.16% 2.48% 3.06% 4.28% 8.74% 7.94%
Average equity as a percent
of average total assets...... 10.58% 10.50% 10.75% 10.20% 8.71% 6.41% 5.97%
Dividend payout ratio.......... 46.81% 33.96% 29.50% 17.70% 8.52% 6.57% --
</TABLE>
xi
<PAGE>
Comparative Per Share Data
The following table presents certain information for Whitney and the
Bank on an historical, unaudited pro forma combined and unaudited pro forma
equivalent basis. The unaudited pro forma combined information is based upon the
historical financial condition and results of operations of the companies and
adjustments directly attributable to the Plan of Merger based on estimates
derived from information currently available. This information does not purport
to be indicative of the results that would actually have been obtained if the
Merger had been consummated on the date or for the periods indicated below, or
the results that may be obtained in the future. Whitney expects to account for
the Merger using the pooling-of-interests method applied in accordance with
generally accepted accounting principles.
<TABLE>
<C> <C> <C> <C> <C>
Historical
------------------------ Pro Forma Bank
Whitney Bank Combined(1) Equivalent(2)
----------- --------- ----------- -------------
Earnings per common share:
Years ended:
December 31, 1995................. $ 2.61 $ 1.27 $ 2.60 $ 1.65
December 31, 1994................. $ 3.39 $ 1.66 $ 3.37 $ 2.14
December 31, 1993................. $ 4.81 $ 0.47 $ 4.73 $ 3.01
Three months ended March 31, 1996 $ 0.47 $ 0.45 $ 0.47 $ 0.30
Dividends declared per common share:
Years ended:
December 31, 1995................. $ 0.77 $ 0.00 $ 0.76 $ 0.48
December 31, 1994................. $ 0.60 $ 0.00 $ 0.59 $ 0.37
December 31, 1993................. $ 0.41 $ 0.00 $ 0.40 $ 0.26
Three months ended March 31, 1996 $ 0.22 $ 0.00 $ 0.22 $ 0.14
Book value per common share:
As of March 31, 1996.................. $21.75 $ 9.74 $ 21.60 $ 13.72
As of December 31, 1995............... $21.69 $ 9.93 $ 21.54 $ 13.69
</TABLE>
- ------------------------------
(1) Assumes an Average Market Price of Whitney Common Stock of $31.00, a
Deductible Amount of zero, no exercise of Bank Options prior to the
Merger, and the issuance of 330,645 shares of Whitney Common Stock to
effect the Merger.
(2) The Bank Equivalent is calculated by multiplying the amount in the pro
forma combined column by an exchange ratio of .6353 at the assumed
Average Market Price of $31.00, with a Deductible Amount of zero.
In addition to the proposed Merger, Whitney has other merger
transactions pending. There can be no assurance that any or all of these
transactions will be completed. Pro forma information giving effect to all of
these acquisitions is included beginning at page 17 of this Proxy
Statement-Prospectus.
xii
<PAGE>
THE MEETING
General
This Proxy Statement-Prospectus is furnished to shareholders of
American Bank and Trust (the "Bank") in connection with the solicitation of
proxies on behalf of its Board of Directors for use at a special meeting of
shareholders of the Bank (the "Meeting") to be held on the date and at the time
and place specified in the accompanying Notice of Special Meeting of
Shareholders, or any adjournments thereof.
The Bank has supplied all information included herein with respect to
the Bank. Whitney Holding Corporation ("Whitney") has supplied all information
included herein with respect to Whitney and its consolidated subsidiaries, which
are sometimes collectively referred to herein as "Whitney's consolidated group."
Purpose of the Meeting
The purpose of the Meeting is to consider and vote upon a proposal to
approve an Agreement and Plan of Merger dated April 18, 1996, as amended,
between Whitney and its newly-formed, wholly-owned banking subsidiary Whitney
National Bank of Florida ("WNB-Florida"), on the one hand, and the Bank, on the
other hand, and a related Agreement of Merger between WNB-Florida and the Bank
(the "Bank Merger Agreement" and, together with the Agreement and Plan of
Merger, as amended, the "Plan of Merger"). Pursuant to the Plan of Merger, the
Bank will merge into WNB-Florida (the "Merger"). In consideration of the Merger,
each outstanding share of common stock, $2.50 par value, of the Bank ("Bank
Common Stock") will be converted into a number of shares of common stock, no par
value, of Whitney ("Whitney Common Stock") as described elsewhere in this Proxy
Statement-Prospectus under the heading captioned "The Plan of Merger -
Description of the Plan of Merger -- Conversion of Common Stock; Exchange for
Unexercised Bank Options."
Shares Entitled to Vote; Quorum; Vote Required
Only holders of record of Bank Common Stock at the close of business on
____________________, 1996 are entitled to notice of and to vote at the Meeting.
On that date there were _____________ shares of Bank Common Stock outstanding,
each of which is each entitled to one vote on each matter properly brought
before the Meeting.
With respect to consideration of the Plan of Merger and any other
matter properly brought before Meeting, the presence at the Meeting, in person
or by proxy, of the holders of a majority of the outstanding shares of Bank
Common Stock is necessary to constitute a quorum. The Plan of Merger must be
approved by the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Bank Common Stock. Abstentions and broker non-votes will
have the effect of votes against the Plan of Merger but will cause a shareholder
otherwise entitled to dissenters' rights to forfeit any claim to such rights.
Broker non-votes will be counted for purposes of determining the presence of a
quorum.
The Chairman will appoint persons to determine the number of shares of
Bank Common Stock, whether represented in person or by proxy, entitled to vote
at the Meeting, and will then announce if a quorum is present. Although the
Bank's By-laws require that votes upon any resolution at a shareholders meeting
shall be by voice vote unless shareholders owning more than 20% of the
outstanding Bank Common Stock demand that the vote be taken by written ballot,
the shareholder vote on whether to approve the Plan of Merger will be taken by
written ballot to insure that the required affirmative vote of two-thirds of the
outstanding shares has been obtained.
Directors, executive officers and certain principal shareholders of the
Bank holding an aggregate of 244,941 shares, or approximately 52% of the
outstanding Bank Common Stock, have agreed, subject to certain conditions, to
vote in favor of the Plan of Merger at the Meeting.
Louisiana law does not require that shareholders of Whitney approve the
Plan of Merger. Whitney, as the sole shareholder of WNB-Florida, must approve
the Bank Merger Agreement.
1
<PAGE>
Solicitation, Voting and Revocation of Proxies
A form of proxy for use at the Meeting accompanies this Proxy
Statement-Prospectus and will permit each holder of record of Bank Common Stock
on the record date for the Meeting to vote the shares held by him at the
Meeting. A shareholder may use a proxy whether or not he intends to attend the
Meeting in person. Duly executed proxies will authorize the persons named
therein to vote on all other matters that properly come before the Meeting.
Where a shareholder specifies his choice on the proxy with respect to the
proposal to approve the Plan of Merger, the shares represented by the proxy will
be voted in accordance with such specification. If no such specification is
made, the shares will be voted in favor of the Plan of Merger. If a Bank
shareholder returns a proxy and does not specify on the proxy an instruction to
vote against the Plan of Merger, he will not be able to exercise dissenters'
rights with respect to the Merger unless he either attends the Meeting in person
and votes against the Plan of Merger or gives written notice at or prior to the
Meeting to the presiding officer that he dissents from the Plan of Merger. See
"Dissenters' Rights." A proxy may be revoked by (i) giving written notice of
revocation at any time before its exercise to the Secretary of the Bank, or (ii)
executing and delivering to the Secretary at any time before its exercise a
later dated proxy. In addition, shareholders who attend the Meeting may revoke
their proxies by voting in person.
In addition to soliciting proxies by mail, directors, officers and
employees of the Bank, without receiving additional compensation therefor, may
solicit proxies by telephone and in person. Arrangements will also be made with
brokerage firms and other custodians, nominees and fiduciaries to forward
solicitation materials to the beneficial owners of shares of Bank Common Stock,
and the Bank will reimburse such parties for reasonable out-of-pocket expenses
incurred in connection therewith. The Bank will pay the cost of soliciting
proxies.
THE PLAN OF MERGER
General
The transactions contemplated by the Plan of Merger are to be effected
in accordance with the terms and conditions set forth in the Plan of Merger,
which is incorporated herein by reference. The following brief description does
not purport to be complete and is qualified in its entirety by reference to the
Plan of Merger, a copy of which is attached hereto as Appendix A.
The ultimate result of the transactions contemplated by the Plan of
Merger will be that the business, properties, debts and liabilities of the Bank
will become the business, properties, debts and liabilities of WNB-Florida, and
the shareholders of the Bank will become shareholders of Whitney. To achieve
this result, the Bank will merge into WNB-Florida and the separate existence of
the Bank will cease, and shareholders of the Bank (and holders of any
outstanding options to acquire Bank Common Stock) will receive the consideration
described below under the heading captioned " - Description of the Plan of
Merger -- Conversion of Common Stock; Exchange for Unexercised Bank Options."
Background
On December 8, 1995, representatives of Whitney made an initial contact
with Frank Westmark, Chairman of the Bank and Lamar Cobb, President and Chief
Executive Officer of the Bank, at which they expressed Whitney's general
interest in acquiring or merging with a banking institution in the market area
served by the Bank. There was no decision to go forward with a transaction at
that time, but the parties engaged in further discussions by telephone regarding
the proposed combination. In January and February 1996, Frank Westmark and Lamar
Cobb had several discussions with various members of the Bank's Board of
Directors respecting the proposed combination and the retention of a financial
advisor in connection with the discussions.
The Bank decided in February 1996 to retain Allen C. Ewing & Co.
("Ewing") as its financial advisor to advise the Bank in its negotiations with
Whitney and its renewed discussions with another bank holding company that had
expressed a general interest in acquiring the bank in the Spring of 1995, to
provide advice and assistance with respect to strategic alternatives available
to the Bank, to perform related valuation analyses and to assist Bank in the
event of a merger or other business combination. The Bank also asked Ewing to
advise it whether other bank holding companies would offer better terms or price
than those Whitney might propose. The Board selected Ewing based on its
knowledge
2
<PAGE>
of financial institutions in general and its experience as a financial advisor
in mergers and acquisitions of financial institutions. Ewing, in its capacity as
financial advisor, contacted ten institutions, three of which, including Whitney
and the other bank holding company that had previously expressed an interest in
the Bank, responded positively as to their current interest in acquiring the
Bank. Further discussions were subsequently held with Whitney and the other bank
holding company, the two institutions that, in the Board's view, appeared to
have the strongest reasons for acquiring the Bank.
Frank Westmark and Lamar Cobb met with representatives of Whitney on
March 21, 1996, and based upon Bank financial information previously provided to
Whitney, the parties discussed the general terms of any proposal Whitney might
make, including a range of suggested values for the Bank. On March 25, 1996,
Ewing made a presentation to Bank's Board of Directors. Ewing presented a
comparison of the Bank's historical financial results with those of other banks
in Florida and the financial terms of recent Florida bank acquisitions. Ewing
compared the financial terms of the range of values suggested by Whitney to
those comparable transactions (including those generally proposed by the other
bank holding company with whom the Bank was having discussions) and orally
expressed its opinion to the Board of Directors that the consideration to be
received by the Bank's shareholders as then proposed by Whitney was fair, from a
financial point of view, to the Bank and its shareholders. Following the
meeting, the Board determined that the Whitney proposal represented the greatest
value to the Bank's shareholders and elected to pursue a transaction with the
Whitney. The Board notified Whitney of this decision on March 28, 1996.
Representatives of the parties and their respective counsel negotiated
terms of the proposed merger during the month of April 1996. In a telephonic
Board of Directors' meeting of the Bank held on April 17, 1996, Ewing was
advised of the financial terms of the Plan of Merger. At that meeting, Ewing
reviewed the financial terms of the proposed transaction as set forth in the
Plan of Merger in comparison to other transactions and reaffirmed orally its
opinion that the proposed consideration to be received by the Bank's
shareholders was fair, from a financial point of view, to the Bank and the
Bank's shareholders. Later that same day, the Bank's Board of Directors approved
the Plan of Merger, and Whitney and the Bank executed a Confidentiality
Agreement in anticipation of Whitney commencing its preliminary due diligence
review of Bank's operations. An agreement and plan of merger was executed by
Whitney and the Bank on April 18, 1996, and amended on May 20, 1996 and June 3,
1996. Ewing confirmed its prior oral advices to the Board by delivering its
written opinion dated May 20, 1996.
On June 10, 1996, Whitney delivered to the Bank the notice required
under the Plan of Merger that Whitney had completed its initial due diligence
examination of the Bank, and subject to satisfaction of the other conditions to
closing, Whitney intended to proceed to closing.
Reasons for the Plan of Merger
General. The financial and other terms of the Plan of Merger are the
result of arm's-length negotiations between representatives of Whitney and the
Bank. Determination of the consideration to be received by the Bank's
shareholders and by the holders of outstanding options to acquire Bank Common
Stock was based upon many factors considered by the Boards of Directors of
Whitney and the Bank, including the comparative financial condition, historical
results of operations, current business and future prospects of Whitney and the
Bank, the market price and historical earnings per share of Whitney Common
Stock, and the desirability of combining the financial and managerial resources
of Whitney and the Bank to pursue consumer and commercial banking business in
the markets currently served by the Bank.
Whitney. Whitney's business strategy includes expansion eastward along
the Interstate 10 corridor to Panama City, Florida. One component of this
strategy is the development of a significant banking presence in the Florida
panhandle. Because the Bank is located in Pensacola, Florida, a sizeable city
and metropolitan area in the Florida panhandle contiguous to Whitney Bank of
Alabama operations in the Mobile, Alabama and the Alabama Gulf Coast region,
Whitney's management identified the Bank as an institution that fit well in its
eastward expansion strategy.
In deciding to pursue an acquisition of the Bank, Whitney's management
and the Executive Committee of Whitney's Board of Directors noted, among other
things, (i) the Bank's stable, experienced management team and staff, (ii) the
Bank's presence in the targeted market, and (iii) the Bank's well-regarded local
Board of Directors who are knowledgeable of the local business environment.
3
<PAGE>
The Bank. The Board of Directors of the Bank believes that approval of
the Plan of Merger is in the best interest of the Bank and its shareholders. In
reaching its decision to approve the terms of the Plan of Merger, the Board of
Directors of the Bank considered a number of factors, including, without
limitation, the following:
1. The Board's familiarity with the Bank's business, operations,
financial condition, earnings and prospects, and its investigation of similar
matters concerning Whitney.
2. The current and prospective economic environment and competitive
constraints facing the Bank, including specifically (i) the increasing
regulatory burdens on small, community based banks, (ii) the greater variety of
products and services that larger competitors can offer to customers, and (iii)
the high cost of acquisition of additional branch locations.
3. The price to be received by the Bank's shareholders and the
relation of such price to the Board's view of alternatives to the Merger.
4. The financial presentations and advice of Ewing, the Bank's
independent financial advisors, and the opinion of Ewing that the consideration
to be received by the Bank's shareholders pursuant to the Plan of Merger is fair
from a financial point of view.
5. The expectation that the receipt of the Whitney Common Stock
will be a tax-free transaction to the Bank's shareholders.
6. The liquidity that the Merger would provide to the Bank's
shareholders, with the Whitney Common Stock to be issued in the Merger being
included for quotation on the NASDAQ (National Market System).
7. The "market risk" protection afforded to the Bank shareholders
pursuant to the Plan of Merger in the event of a decline in the price of Whitney
Common Stock before the fifth trading day prior to the Effective Date.
8. The effect of the Merger on customers and employees of the Bank.
The discussion of the information and factors considered and given
weight by the Board of Directors of the Bank is not intended to be exhaustive.
In view of the variety of factors considered in connection with their evaluation
of the Plan of Merger, the Board did not quantify or otherwise assign relative
weights to the specific factors considered in reaching its determination. In
addition, individual members of the Board may have given different weights to
different factors.
Recommendation of the Bank's Board of Directors
THE BOARD OF DIRECTORS OF THE BANK HAS UNANIMOUSLY APPROVED THE PLAN OF
MERGER AND UNANIMOUSLY RECOMMENDS THAT THE BANK'S SHAREHOLDERS VOTE FOR
APPROVAL OF THE PLAN OF MERGER.
Fairness Opinion of Allen C. Ewing & Co.
The Board of Directors of the Bank retained Ewing in February of 1996
for the purposes described above under the heading " - Background" and to render
an opinion to the Bank as to the fairness, from a financial point of view, of
any merger transaction proposed by the Board. Ewing has rendered its opinion
(the "Opinion"), which has been updated through __________________, 1996, that
based upon and subject to certain assumptions set forth therein, the
consideration to be paid by Whitney for the Bank Common Stock pursuant to the
Plan of Merger is fair, from a financial point of view, to the shareholders of
the Bank. The full text of Ewing's Opinion is attached as Appendix B to this
Proxy Statement-Prospectus and is incorporated herein by reference. The
description of the Opinion set forth herein is qualified in its entirety by
reference to Appendix B. The Bank's shareholders are urged to read the Opinion
in its entirety.
4
<PAGE>
No limitations were imposed on the scope of Ewing's analysis or the
procedures followed by Ewing in rendering its Opinion. Ewing was not requested
to and did not make any recommendations to the Bank Board as to the amount of
the consideration to be paid to the Bank's shareholders, which was determined
through arms-length negotiations between the parties.
Ewing's Opinion is directed to the Bank's Board only and does not
constitute a recommendation to any Bank shareholder as to how such shareholder
should vote on the Plan of Merger. Ewing has not been requested to opine as to
and the Opinion does not in any manner address the underlying business decision
by the Bank's Board to enter into the Plan of Merger.
In issuing its Opinion, Ewing assumed and relied upon the accuracy and
completeness of the financial and other information used by it in arriving at
its Opinion as provided by the Bank. Ewing made no independent verification of
the supplied information, nor did Ewing conduct a physical inspection of the
properties and facilities of the Bank, nor did Ewing make or obtain any
evaluation or appraisal of the assets or liabilities of the Bank, nor did Ewing
review any credit or loan files from the Bank's loan portfolio. The Opinion is
based upon market and economic conditions as they existed on the date of the
Opinion.
In arriving at its Opinion, Ewing reviewed and analyzed: (i) the Plan
of Merger; (ii) financial and operating information with respect to the
business, operations, and prospects of the Bank furnished to it by the Bank;
(iii) a comparison of the historical financial results of the Bank with those of
other banks in Florida which it determined relevant; (iv) a comparison of the
financial terms of the merger with the terms of selected other recent
transactions in Florida which it determined comparable; (v) a review of the
trading patterns of Whitney Common Stock as to how their market value compared
with other comparable regional bank holding companies. Ewing had discussions
with the management of the Bank concerning its historical operations and future
prospects and undertook analyses and investigations as it deemed appropriate.
Ewing also considered the Board's authorization of a program for marketing the
Bank to other qualified acquirors and the Board's ultimate determination that
Whitney's proposal represented the greatest value to the Bank's shareholders.
The following paragraphs summarize the most pertinent portions of the
financial and comparative analysis prepared by Ewing in arriving at its Opinion.
The following summary does not purport to be a complete description of the
analysis performed or the matters considered by Ewing in arriving at its
Opinion.
The preparation of a fairness opinion involves various determinations
as to the most appropriate and relevant methods of financial analysis and the
application of those methods to the particular circumstances. Therefore, such an
opinion is not readily susceptible to summary description. Furthermore, in
arriving at its Opinion, Ewing did not attribute any particular weight to any
one factor considered by it, but rather made qualitative judgments as to the
significance and relevance of each analysis and factor. Ewing believes that its
analysis must be considered as a whole and that considering any portions of such
analysis and of the factors considered, without considering all analyses and
factors, could create a misleading or incomplete view of the process underlying
its Opinion. In its analysis, Ewing made numerous assumptions with respect to
industry performance, general business and economic conditions and other
matters, many of which are beyond the Bank's control. Any estimates contained in
these analyses are not necessarily indicative of actual values or predictive of
future results or values, which may be significantly more or less favorable than
as set forth therein. Analyses relating to the value of businesses do not
purport to be appraisals or to reflect the prices at which businesses actually
may be sold. In addition, as described above, Ewing's Opinion, along with its
presentations to the Bank's Board, was just one of many factors taken into
consideration by the Bank's Board.
Trading History of the Bank Common Stock. In view of the fact that the
shares of Bank Common Stock are closely held, Ewing found that there was no
meaningful trading market in the shares of Bank Common Stock.
Selection of Valuation Method. In valuing financial institutions, Ewing
believes that there are several methods available to determine if a prospective
transaction is fair, from a financial point of view, to the shareholders of the
institution to be acquired. These methods include: (i) Comparison Method: A
comparison of the purchase price of the transaction with prices paid for similar
banks based on ratios commonly used in the industry including price/book,
price/earnings, and price/deposits; (ii) Control Premium Method: This method
only applies to selling companies where there is a public market for their
shares, and, as there is not an active market for the shares of the Bank, this
method
5
<PAGE>
does not apply; (iii) Net Asset or Liquidating Value Method: This method does
not apply to healthy banks and is only used in periods of severely depressed
markets; (iv) Discounted Cash Flow Method: This method is often used in valuing
banks, but Ewing's experience is that this method has less validity in valuing
small banks. The method is based on the ability to forecast earnings and
dividends for a period of years with an estimate of the value of a projected
sale at the end of the period. The present value of these projected cash flows
representing the value of the Bank is determined using an array of discount
rates reflecting the credibility of the projections. Earnings for small banks
tend to be volatile for many reasons including normal banking activities such as
the addition of a new branch, a new marketing program, the hiring of new banking
officers, all of which can have an adverse affect on current earnings. For these
reasons, earnings projections for smaller banks tend to have poor reliability
which, in Ewing's opinion, lessens the value of the discounted cash flow method
for smaller banks. Ewing believes that the comparison method provides the
soundest choice for determining the fairness of the proposed transaction.
Analysis of Comparable Companies. Using publicly available information
including information prepared by SNL Securities, Ewing compared the financial
performance of the Bank with two relevant groups of banks. In the first group,
Ewing compared five performance indicators of the Bank with the average
experience for the same performance indicators of 250 independent Florida
community banks. The performance indicators utilized by Ewing for this
comparison included the return on average assets for 1995 which was 1.14% for
the Bank vs. 1.07% for the 250 Florida banks; the return on average equity for
1995 which was 14.46% for the Bank vs. 10.96% for the 250 Florida banks; the
equity/assets ratio which for the Bank as of 12/31/95 was 6.95% vs. 8.93% for
the 250 Florida banks; the ratio of non-performing assets/assets which for the
Bank was .02% vs. .42% for the 250 Florida banks; and the ratio of operating
expenses/operating revenues which was 53.34% for the Bank vs. 70.54% for the 250
Florida banks.
In the second group, Ewing compared three performance indicators of the
Bank with the average experience for the same performance indicators of eight
selected comparable banks which were merged with larger companies in 1994 and
1995. The performance indicators utilized by Ewing for this comparison included
the return on average equity which was 14.46% for the Bank vs. 13.84% for the
eight banks; the ratio of non-performing assets/assets which was .02% for the
Bank vs. .73% for the eight banks; and the ratio of equity/assets which was
6.95% for the Bank vs.
8.52% for the eight banks.
Analysis of Comparable Transactions. Using publicly available
information, Ewing reviewed certain terms and financial characteristics of
selected transactions involving the acquisition of healthy banks by commercial
bank holding companies, in 1994, 1995, and 1996. In view of the Bank's high
asset quality and favorable operating comparisons with the two groups of banks
discussed in the Comparable Company Analysis, Ewing selected transactions for
comparison purposes involving high performing banks in Florida. Ewing selected
transactions that occurred in a similar economic environment involving
institutions of comparable size. Because of the large amount of consolidation
activity in the Florida banking market, Ewing determined that there were a
sufficient number of transactions involving comparable banks in Florida to
provide a sufficiently large universe for comparison purposes. Ewing further
determined that economic conditions in Florida banking since 1993 have been
favorable to commercial banking, and it is Ewing's opinion that transactions
that occurred during the period from 1993 to date have occurred in a period of
similar economic conditions and are suitable for comparison with this
transaction. Ewing identified 82 transactions that occurred during this period
involving Florida banks, and Ewing selected nine transactions that took place
between 1994 and 1995 which Ewing believes were comparable to this transaction.
The comparable transaction group includes the following transactions (identified
by acquiree/acquiror): Security National Bank, Winter Park, FL/Huntington
Bancshares, Inc., Columbus, OH; Peoples State Bank, New Port Richey, FL/SunTrust
Banks, Inc.; Atlanta, GA; Reliance Bank, Melbourne, FL/Huntington Bancshares,
Inc., Columbus, OH; Community Bank of the Islands, Sanibel, FL/Barnett Banks,
Inc., Jacksonville, FL; Key Biscayne Bancorp, Key Biscayne, FL/SunTrust Banks,
Inc., Atlanta, GA; Citizens National Bank, Macclenny, FL/SouthTrust Corporation,
Birmingham, AL; and First State Bank, Deland, FL/SouthTrust Corporation,
Birmingham, AL. Ewing utilized the three pricing comparisons that are generally
utilized in the industry for comparing the relative prices paid in transactions
of this kind. These ratios are: acquisition price/book value as of the quarter
ended prior to announcement which was 2.19x for the Bank vs. 2.17x for the eight
banks; acquisition price/trailing twelve-month earnings which was 18.64x for the
Bank vs. 18.50x for the eight banks acquisition price as a percentage of
deposits as of the quarter ended prior to announcement which was 16.60% for the
Bank vs. 20.40% for the eight banks. Because the reasons for and circumstances
surrounding each of the transactions analyzed were diverse and because of the
inherent differences between the operations of the Bank and the selected
companies, Ewing believed that a strict reliance on the quantitative comparable
transaction analysis is not meaningful
6
<PAGE>
without further qualitative considerations. Ewing believed that the proper use
of a comparable transaction analysis would involve qualitative judgments
concerning differences between the characteristics of these transactions and the
Merger which may have affected the acquisition value of the acquired companies
and the Bank. The qualitative factors considered by Ewing in connection with its
Opinion included Ewing's views as to the number of potential buyers in each of
these transactions and the ability of the acquirors to implement cost savings
and business synergies. In addition, Ewing considered the business conditions
and prospects in the various markets in which these acquired companies operate.
Analysis of Whitney Common Stock. Ewing performed an analysis as to the
profitability, quality and growth potential for the shares of Whitney Common
Stock, which included a financial analysis as to the overall financial quality
of Whitney, an analysis of the performance ratios of Whitney, an analysis of
Whitney's non-performing assets, and a comparison of its price/earnings and
price/book ratios with other comparable regional bank holding companies.
Compensation of Allen C. Ewing & Co. Ewing acted as a financial
advisor to the Bank in addition to rendering its Opinion. As compensation for
all of its services, Ewing will earn a fee of approximately $51,000.
Description of the Plan of Merger
General. Pursuant to the Plan of Merger, if all conditions to the
Merger are satisfied or waived, on the effective date of the Merger, the Bank
will be merged with and into WNB-Florida, and the separate existence of the Bank
will cease. By reason of the Merger, and subject to the adjustments described
below, each outstanding share of Bank Common Stock (other than shares as to
which dissenters' rights have been perfected and not withdrawn) will be
converted into a number of shares of common stock, no par value, of Whitney
("Whitney Common Stock") with an aggregate market value of approximately $19.70,
provided that the Average Market Price (as defined below) of Whitney Common
Stock is not less than $27.00 nor greater than $35.00. Any outstanding options
to acquire Bank Common Stock that remain unexercised immediately prior to the
Merger will also be exchanged for shares of Whitney Common Stock in connection
with the Merger. The total consideration to be paid by Whitney in connection
with the Merger is subject to a downward adjustment if the Bank's 1996 earnings
are less than the level projected by the Bank's management. See "- Conversion of
Common Stock; Exchange for Unexercised Bank Options," below.
Conversion of Common Stock; Exchange for Unexercised Bank Options. The
Plan of Merger provides that, assuming no fractional shares or perfected
dissenters' rights, shareholders of the Bank will receive a total number of
shares of Whitney Common Stock equal to the "Acquisition Price," divided by the
average of the closing per share trading prices of Whitney Common Stock
(adjusted appropriately for any stock split, stock dividend, recapitalization,
reclassification or similar transaction that is effected, or for which a record
date occurs) on the 20 trading days preceding the fifth trading day immediately
prior to the effective date of the Merger, as reported in the Wall Street
Journal (the "Average Market Price"); provided, however, that if the Average
Market Price as so calculated is less than $27.00 or greater than $35.00, the
"Average Market Price" to be used in calculating the number of shares of Whitney
Common Stock to be issued in the Merger shall be $27.00 or $35.00, as the case
may be. The total number of shares of Whitney Common Stock to be issued by
reason of the Merger as so calculated (the "Maximum Deliverable Amount of
Whitney Shares") will vary depending upon the Average Market Price of the
Whitney Common Stock and the other factors described below.
The "Acquisition Price" is equal to $10,250,000, plus the dollar amount
of actual cash proceeds received by the Bank from the exercise of any
outstanding Bank Options (as hereinafter defined) between April 18, 1996 and the
effective date of the Merger, minus the Net Value (calculated in the manner
described below) of any Bank Options that remain unexercised on the effective
date of the Merger, minus the "Deductible Amount."
The "Deductible Amount" is the dollar amount, if any, by which the
Bank's annualized net income after taxes for calendar year 1996 is less than
$820,000, as projected by the Bank, provided that the Deductible Amount will be
zero if the Bank's 1996 net income after taxes on an annualized basis is within
7.5% of $820,000.
The Bank has options outstanding that grant the holders thereof the
right to acquire up to an aggregate of 75,936 shares of Bank Common Stock ("Bank
Options"). These options were granted to Bank directors pursuant to Bank's
Directors' Stock Option Plan of 1993 (the "Option Plan"). The Bank Options have
an exercise price of $6.52
7
<PAGE>
per share of Bank Common Stock acquired, and under the terms of the Option Plan,
any unexercised Bank Options would terminate upon consummation of the Merger.
The Plan of Merger provides that, conditioned upon consummation of the Merger
but effective immediately prior thereto, each outstanding unexercised Bank
Option will be exchanged for shares of Whitney Common Stock having a value,
calculated based on the Average Market Price, equal to the amount by which the
dollar value of the shares of Whitney Common Stock into which a share of Bank
Common Stock would be converted in the Merger exceeds the exercise price for
that share of Bank Common Stock under the terms of Bank Options. The difference
between those two amounts is referred to as the "Net Value" of an unexercised
Bank Option and is equal to $13.172804 minus the quotient of the Deductible
Amount divided by 545,636 (the number of shares of Bank Common Stock that would
be outstanding if all Bank Options were exercised). If no Bank Options are
exercised, the aggregate Net Value of the 75,936 Bank Options outstanding at the
effective time of the Merger will be $1,000,290, which amount would be deducted
in determining the Acquisition Price, and Whitney Common Stock having an
aggregate value equal to such amount (calculated based on the Average Market
Price) would be issued to the holders of such unexercised Bank Options in
exchange therefor.
The exercise or non-exercise of Bank Options prior to the effective
date of the Merger will not affect the per share exchange ratio of the Whitney
Common Stock to be issued to the holders of Bank Common Stock by reason of the
Merger. As noted above, the "Acquisition Price" increases $6.52 for each Bank
Option that is exercised prior to the effective date of the Merger; but, on a
per share basis, that increase will be offset exactly by the additional shares
of Bank Common Stock that will have been issued upon exercise of the Bank
Options; but, on a per share basis, any such decrease would be offset exactly
because the shares of Bank Common Stock underlying those Bank Options will not
have been issued.
By reason of the Merger, each share of Bank Common Stock outstanding on
the effective date of the Merger (other than shares as to which dissenters'
rights have been perfected and not withdrawn) will be converted into a number of
shares of Whitney Common Stock equal to the quotient of (a) the Maximum
Deliverable Amount of Whitney Shares divided by (b) the total number of shares
of Bank Common Stock issued and outstanding on the effective date of the Merger.
As of June 30, 1996, there were outstanding 469,700 shares of Bank Common Stock.
The following table sets forth examples of the number of shares of Whitney
Common Stock into which each share of Bank Common Stock would be converted on
the effective date of the Merger, assuming that (a) the Average Market Price for
Whitney Common Stock is as specified below, (b) the Deductible Amount is zero
and (c) none of the Bank Options are exercised (resulting in an Acquisition
Price of $9,249,710 for the outstanding shares of Bank Common Stock).
8
<PAGE>
<TABLE>
<C> <C> <C>
Total Number of Shares of
Assumed Average Whitney Common Stock To Number of Whitney Shares Per
Market Price of Whitney Common Be Issued for Shares of Bank
Stock Bank Common Stock(1) Share(1) (2)
------------------------------ ------------------------- ------------------------------
$27.00 342,582 0.7294
29.00 318,956 0.6791
31.00 298,378 0.6353
33.00 280,294 0.5968
35.00 264,277 0.5627
</TABLE>
- -----------------------------
(1) If the Deductible Amount is zero and all of the Bank Options are
exercised (resulting in an Acquisition Price of $10,745,103), a total
of 397,967 shares of Whitney Common Stock would be issued by reason of
the Merger assuming an Average Market Price of $27.00, and 307,003
shares of Whitney Common Stock would be so issued assuming an Average
Market Price of $35.00; however, as discussed in the preceding
paragraphs, the per share exchange ratios would remain constant at
0.7294 and 0.5627, respectively, because of the additional 75,936
shares of Bank Common Stock that would be outstanding.
(2) Based on 469,700 shares of Bank Common Stock, the number of shares
outstanding on June 30, 1996. Due to fluctuations in the trading prices
of Whitney Common Stock and the fact that the Acquisition Price cannot
be determined until the effective date of the Merger, the actual number
of shares to be received by the Bank's shareholders cannot currently be
determined.
The Plan of Merger provides that the total number of shares of Whitney
Common Stock to be issued in the Merger becomes fixed at the upper end and the
lower end of the range of Average Market Prices set forth in the preceding
table, such that if the calculation of Average Market Price were to result in an
amount less than $27.00, 342,582 shares of Whitney Common Stock would be issued
in the Merger regardless of their market value, and if the calculation of
Average Market Price were to result in an amount exceeding $35.00, 264,277
shares of Whitney Common Stock would be issued in the Merger regardless of their
market value, in each case assuming an Acquisition Price of $9,249,710.
Accordingly, it is a condition to the Bank's obligations to consummate the
Merger that the Average Market Price of the Whitney Common Stock as so
calculated not be less than $27.00, and it is a condition to Whitney's
obligations to consummate the Merger that the Average Market Price as so
calculated not be more than $35.00. If the Bank were to waive this condition to
its obligation to consummate the Merger, the aggregate market value of the
Whitney Common Stock to be issued in the Merger may be lower than it would be if
the calculation of Average Market Price resulted in an amount between $27.00 and
$35.00. If, on the other hand, Whitney were to waive this condition to its
obligation to consummate the Merger, the aggregate market value of the Whitney
Common Stock to be issued in the Merger may be higher than it would be if such
calculation resulted in a price within the specified range. See "Regulatory
Approvals and Other Conditions of the Merger."
On ___________________, 1996, the closing trading price for a share of
Whitney Common Stock was $_______, and if such date had been the effective date
of the Merger, the Average Market Price would have been
$________.
In lieu of issuing any fractional share of Whitney Common Stock, each
shareholder of the Bank who would otherwise be entitled thereto will receive a
cash payment (without interest) equal to such fractional share multiplied by the
Average Market Price. Because the per share exchange ratio in the Merger is less
than one-to-one, any shareholder of the Bank holding less than two shares of
Bank Common Stock will not receive any Whitney Common Stock in the Merger, but
instead will receive solely cash in exchange for his share of Bank Common Stock.
9
<PAGE>
For information regarding restrictions on the transfer of Whitney
Common Stock received pursuant to the Plan of Merger applicable to certain of
the Bank's shareholders, see "Status Under Federal Securities Laws; Certain
Restrictions on Resales."
Exchange of Certificates. On the effective date of the Merger, each
Bank shareholder will cease to have any rights as a shareholder of the Bank and
his sole rights will pertain to the shares of Whitney Common Stock into which
his shares of Bank Common Stock have been converted pursuant to the Merger,
except for any such shareholder who is entitled to statutory dissenters' rights
pursuant to 12 U.S.C. ss.215a and except for the right to receive cash for any
fractional shares. See "Dissenters' Rights."
Promptly after the consummation of the Merger, Whitney is required (a)
to deposit with the exchange agent selected by Whitney for the Merger
certificates representing the shares of Whitney Common Stock and the cash in
lieu of fractional shares to be issued and paid in exchange for shares of Bank
Common Stock and (b) send or cause to be sent to each person who was a
shareholder of record of the Bank on the effective date of the Merger (excluding
holders of shares as to which dissenters' rights have been perfected and not
withdrawn or otherwise forfeited under applicable law) a letter of transmittal,
together with instructions for the exchange of certificates representing shares
of Bank Common Stock for certificates representing shares of Whitney Common
Stock.
Shareholders are requested not to send in their Bank Common Stock
certificates until they have received a letter of transmittal and further
written instructions after the effective date of the Merger. Please do NOT send
in your stock certificates with your proxy.
After the effective date of the Merger and until surrendered,
certificates representing Bank Common Stock will be deemed for all purposes,
other than the payment of dividends or other distributions, if any, in respect
of Whitney Common Stock, to represent the number of whole shares of Whitney
Common Stock into which such shares have been converted. Whitney, at its option,
may decline to pay former shareholders of the Bank who become holders of Whitney
Common Stock pursuant to the Merger any dividends or other distributions that
may have become payable to holders of record of Whitney Common Stock following
the effective date of the Merger until they have surrendered their certificates
evidencing ownership of shares of Bank Common Stock, at which time any such
dividends or other distributions will be paid, without interest.
Shareholders of the Bank who cannot locate their stock certificates are
urged to contact promptly:
Lamar B. Cobb, President
American Bank and Trust
101 West Garden Street
Pensacola, Florida 32501
(904) 432-2481
A new stock certificate will be issued to replace the lost certificate(s) only
upon execution by the shareholder of an affidavit certifying that his
certificate(s) cannot be located and containing an agreement to indemnify the
Bank and Whitney against any claim that may be made against the Bank or Whitney
by the owner of the certificate(s) alleged to have been lost or destroyed. The
Bank or Whitney may also require the shareholder to post a bond in such sum as
is sufficient to support the shareholder's agreement to indemnify the Bank and
Whitney.
Transfer and Exchange Agents. Boatmen's Trust Company serves as
Transfer Agent and Registrar for Whitney Common Stock and will act as Exchange
Agent in connection with the Merger. The Bank acts as its own Transfer Agent and
Registrar for the Bank Common Stock.
Regulatory Approvals and Other Conditions of the Merger. In addition to
approval by the shareholders of the Bank and satisfaction of the other
conditions described below, consummation of the Merger will require the approval
of the Office of the Comptroller of the Currency of the United States (the
"Comptroller"). On _____________________, 1996, Whitney filed an application
with the Comptroller seeking the approval of the Merger and an interim bank
charter for WNB-Florida, which was accepted on ____________________, 1996. On
__________, 1996, Whitney received preliminary approval from the Comptroller of
an interim bank charter for WNB-Florida, and
10
<PAGE>
the Comptroller accepted WNB-Florida's organization certificate and articles of
association on ____________, 1996, at which time WNB-Florida's corporate
existence began.
Whitney has also filed applications with the Board of Governors of the
Federal Reserve System (the "Reserve Board") and the Federal Deposit Insurance
Corporation (the "FDIC") in connection with the formation of WNB-Florida.
The Reserve Board application was accepted on ___________________, 1996.
Whitney is currently awaiting final approval of each of the foregoing
applications and expects to receive all required approvals prior to the Meeting;
however, there can be no assurance that they will be obtained by that time or at
all.
The obligations of the parties to the Plan of Merger are also subject
to other conditions set forth in the Plan of Merger, including, among others:
(i) the accuracy on the date of closing of the representations and warranties,
and the compliance with covenants, made in the Plan of Merger by each party, and
the absence of any material adverse change in the financial condition, results
of operations, business or prospects of the other party's consolidated group,
(ii) the receipt by Whitney and WNB-Florida of required regulatory approvals,
(iii) the receipt by Whitney of assurances that the Merger may be accounted for
as a pooling-of-interests, (iv) the receipt by Whitney and the Bank of opinions
as to qualification of the Merger as a tax-free reorganization under applicable
law, (v) the Bank's receipt of a letter from Ewing, dated as of the date of the
Meeting, in form and substance satisfactory to the Bank, confirming its fairness
opinion to the Board of Directors of the Bank and (vi) certain other conditions
customary for agreements of this sort. In addition, it is a condition to
Whitney's obligations that the Average Market Price of the Whitney Common Stock
(calculated without regard to the limitations contained in the definition of
Average Market Price) shall not be more than $35.00, unless Whitney has executed
a definitive merger or other acquisition agreement with a third party as a
result of which Whitney would cease to be an independent, public company. It is
also a condition to the Bank's obligations that the Average Market Price of the
Whitney Common Stock as so calculated shall not be less than $27.00. See "
Conversion of Common Stock."
The parties intend to consummate the Merger as soon as practicable
after all of the conditions to the Merger have been met or waived; however,
there can be no assurance that the conditions to the Merger will be satisfied.
Effective Date. As soon as practicable after shareholder and regulatory
approval is obtained and all other conditions to the consummation of the Plan of
Merger have been satisfied or waived, the Bank Merger Agreement will be executed
on behalf of WNB-Florida and the Bank and filed with the Comptroller. The Merger
will be effective at the time and date specified in a certificate or other
written record issued by the Comptroller. Whitney and the Bank are not able to
predict the effective date of the Merger and no assurance can be given that the
transactions contemplated by the Plan of Merger will be effected at any time.
See "- Regulatory Approvals and Other Conditions of the Merger."
Conduct of Business Prior to the Effective Date. The Bank has agreed
pursuant to the Plan of Merger that, prior to the effective date of the Merger,
it will conduct its business only in the ordinary course consistent with past
practices and that, without the prior written consent of the chief executive
officer of Whitney or his duly authorized designee, and except as otherwise
provided in the Plan of Merger, it will not, among other things, (a) declare or
pay any dividend, declare or make any distribution on or directly or indirectly
combine, redeem, reclassify, purchase or otherwise acquire any shares of capital
stock or authorize the creation or issuance of or issue any additional shares of
capital stock or securities or obligations convertible into or exchangeable
therefor except the issuance of shares of Bank Common Stock upon exercise of
Bank Options; (b) amend its Articles of Incorporation or Association or By-Laws
or adopt or amend any resolution or agreement concerning indemnification of
directors or officers; (c) enter into or modify any agreement requiring the
payment of any salary, bonus, extra compensation, pension or severance payment
to any of its current or former directors, officers or employees except such
agreements as are terminable at will without penalty or other payment by it, or
increase the compensation of any such person in any manner inconsistent with its
past practices; (d) except in the ordinary course of business consistent with
past practices, place or suffer to exist on any of its assets or properties any
mortgage, pledge, lien, charge or other encumbrances (except as allowed under
the Plan of Merger) or cancel any material indebtedness owing to it or any
claims it may have possessed, or waive any right of substantial value or
discharge or satisfy any material non-current liability; (e) acquire another
business or merge or consolidate with another entity or sell or otherwise
dispose of a material part of its assets except in the ordinary course of
business consistent with past practices; (f) commit any act that is intended or
reasonably may be expected to result
11
<PAGE>
in any of its representations and warranties becoming untrue in any material
respect or in any of the conditions to the Merger not being satisfied or in a
violation of any provision of the Plan of Merger, except as may be required by
applicable law; (g) commit or fail to take any action that is intended or
reasonably may be expected to result in a material breach or violation of any
applicable law, statute, rule, governmental regulation or order; (h) fail to
maintain its books, accounts and records in the usual manner on a basis
consistent with that previously employed; (i) fail to pay or to make adequate
provision in all material respects for the payment of all taxes, interest
payments and penalties due and payable, except those being contested in good
faith by appropriate proceedings and for which sufficient reserves have been
established; (j) dispose of investment securities in amounts or in a manner
inconsistent with past practices, or make investments in non-investment grade
securities or that are inconsistent with past investment practices; (k) enter
into any new line of non-banking business; (l) charge off (except as required by
law or regulatory authorities or generally accepted accounting principles
consistently applied) or sell (except for a price not materially less than the
value thereof) any of its portfolio of loans, discounts or financing leases, or
sell any asset held as other real estate or other foreclosed assets for an
amount materially less than 100% of its book value as of March 31, 1996; (m)
make any extension of credit that, when added to all other extensions of credit
to a borrower and its affiliates, would exceed the Bank's applicable regulatory
lending limits; (n) take or cause to be taken any action that would disqualify
the Merger as a "pooling-of-interests" for accounting purposes or as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code; or (o) agree or commit to do any of the foregoing.
In addition, the Bank has agreed that it will not, without the prior
approval of Whitney, solicit, initiate or encourage inquiries or proposals with
respect to, or, except to the extent required in the written opinion of its
counsel to discharge properly the directors' fiduciary duties to the Bank and
its shareholders, furnish any information relating to, or participate in any
negotiations or discussions concerning, any acquisition or purchase of all or a
substantial portion of its assets, or of a substantial equity interest in it, or
any business combination with it (other than as contemplated by the Plan of
Merger). The Bank has also agreed that in no event will any such information be
supplied except pursuant to a confidentiality agreement in form and substance
substantially the same as the confidentiality agreement previously executed
between the Bank and Whitney, that it will instruct its respective officers,
directors, agents and affiliates to refrain from doing any of the foregoing and
that it will notify Whitney immediately if any such inquiries or proposals are
received by, any such information is requested from or any discussions or
negotiations are sought to be initiated with, the Bank or any of its officers,
directors, agents or affiliates. Notwithstanding the foregoing, nothing
contained in the Plan of Merger shall be deemed to prohibit any officer or
director of the Bank from taking any action that in the written opinion of
counsel to the Bank is required by law or is required to discharge his fiduciary
duties to the Bank and its shareholders.
Waiver, Amendment and Termination. The Plan of Merger provides that the
parties thereto may waive any of the conditions to their respective obligations
to consummate the Merger other than approval by the shareholders of the Bank,
the absence of a stop order suspending the effectiveness of the Registration
Statement of which this Proxy Statement-Prospectus forms a part, the receipt of
all necessary regulatory approvals, the satisfaction of all requirements
prescribed by law for consummation of the Merger, and the Bank's receipt of a
letter from Ewing dated as of the date of the Meeting, in form and substance
satisfactory to the Bank, confirming Ewing's fairness opinion to the Board of
Directors of the Bank. A waiver must be in writing.
The Plan of Merger, including all related agreements, may be amended or
modified at any time, before or after approval by the shareholders of the Bank,
by the mutual agreement in writing of the Board of Directors of the parties to
the Plan of Merger. Additionally, the Plan of Merger may be amended at any time
by the sole action of the chief executive officers of the respective parties to
the Plan of Merger to correct typographical errors or to change erroneous
references or cross-references, or in any other manner that is not material to
the substance of the transactions contemplated by the Plan of Merger.
The Plan of Merger may be terminated at any time prior to the effective
date of the Merger by (i) the mutual consent of the respective Boards of
Directors of Whitney and the Bank; (ii) the Board of Directors of either Whitney
or the Bank in the event of a breach by any member of the consolidated group of
the other of them of any representation, warranty or covenant in the Plan of
Merger that cannot be cured by the earlier of 15 days after written notice of
such breach or December 31, 1996; (iii) the Board of Directors of either Whitney
or the Bank if by December 31, 1996 all the conditions to closing required by
the Plan of Merger has not been met or waived or cannot be met, or the Merger
has not occurred, by December 31, 1996; (iv) Whitney, if the number of shares of
Bank Common Stock
12
<PAGE>
as to which the holders thereof are, on the effective date of the Merger,
legally entitled to assert dissenting shareholders rights plus the number of
shares to which the holders thereof are entitled to receive cash payments in
lieu of fractional shares, exceeds that number of shares of Bank Common Stock
that would preclude pooling-of-interests accounting for the Merger (i.e., if ,
after the Meeting, more than 10% of the Bank Common Stock would be subject to
exchange for cash rather than Whitney Common Stock as the result of holders
exercising dissenters' rights or receiving cash in lieu of fractional shares);
(v) Whitney if the Plan of Merger fails to receive the requisite vote of the
Bank's shareholders; (vi) Whitney if the Bank's Board of Directors (A)
withdraws, modifies or changes its recommendation to its shareholders as
contained herein or resolves to do so, (B) recommends to its shareholders any
other merger, consolidation, share exchange, business combination or other
similar transaction, any sale, lease, transfer or other disposition of all or
substantially all of the assets of the Bank or any acquisition of 15% or more of
any class of the Bank's capital stock or (C) makes any announcement of a
proposal, plan or intention to do any of the foregoing; or (vii) the Bank, if
the Bank receives a written offer with respect to any transaction described in
(vi) above and the Board of Directors of the Bank determines in good faith,
after consultation with its financial advisors and counsel, that such
transaction is more favorable to the Bank's shareholders than the transactions
contemplated by the Plan of Merger. The Plan of Merger provides for a
termination fee of $500,000 payable to Whitney if the Bank terminates the Plan
of Merger under the circumstances described in clause (vii) of the preceding
sentence. The provisions in the Plan of Merger regarding confidentiality,
payment of the termination fee and certain miscellaneous matters will survive
any termination of the Plan of Merger.
Expenses. The Plan of Merger provides that regardless of whether the
Merger is consummated, expenses incurred in connection with the Plan of Merger
and the transactions contemplated thereby shall be borne by the party that has
incurred them.
Interests of Certain Persons
Employee Benefits. Whitney has agreed that, at the effective time of
the Merger, all persons then employed by the Bank shall be eligible for such
employee benefits as are generally available to employees of Whitney's Louisiana
and Alabama banking subsidiaries having like tenure, officer status and
compensation levels, except that (a) all executive and senior level management
bonuses, stock options, restricted stock and similar benefits will be at the
discretion of WNB-Florida's Compensation Committee, (b) all Bank employees who
are employed at the effective time of the Merger will be given full credit for
all prior service as employees of the Bank, provided, however, that all such
employees shall be treated as newly hired WNB-Florida employees for all purposes
of Whitney's or Whitney's Louisiana and Alabama banking subsidiaries' Defined
Benefit Pension Plan (i.e., prior service credit with the Bank will not be
considered in determining future benefits under Whitney's or Whitney's banking
subsidiaries' Defined Benefit Pension Plan).
Management. Certain officers of the Bank, including Lamar Cobb,
President and Chief Executive Officer, are entitled to receive annual cash
incentive bonuses pursuant to arrangements with the Bank. Such bonuses for 1996
will be pro rated through the effective date of the Merger and paid to such
officers at that time. Upon completion of the Merger, Mr. Cobb will be appointed
as President of WNB-Florida. WNB-Florida and Mr. Cobb will enter into an
employment agreement on substantially the same terms as Whitney's employment
agreements with similiarly situated officers in Whitney's consolidated group.
Bank Options. The Bank Options were granted to the Bank's directors
pursuant to the Bank's Option Plan and have an exercise price of $6.52 per
share. All of the Bank Options are fully vested and are currently exercisable,
but under the terms of the Option Plan, any Bank Options that are not exercised
prior to the Merger will terminate upon consummation of the Merger. The Plan of
Merger provides that, conditioned upon consummation of the Merger but effective
immediately prior thereto, any Bank Options that have not been exercised will
be exchanged for Whitney Common Stock having a value equal to the Net Value of
the unexercised Bank Options (i.e., the amount by which the dollar value of the
shares of Whitney Common Stock into which a share of Bank Common Stock would
be converted in the Merger exceeds the $6.52 exercise price for that share of
Bank Common Stock). See "The Plan of Merger - Description of the Plan of
Merger -- Conversion of Common Stock; Exchange for Unexercised Bank Options."
As a result, directors holding Bank Options will not be required to exercise
their Bank Options and pay the exercise price thereof in order to receive
the Net Value of those Bank Options.
13
<PAGE>
Messrs. Baars, Culbertson, Mann, Stalnaker and Westmark and Ms. Futch
currently hold Bank Options entitling each of them to purchase 10,848 shares of
Bank Common Stock; Mr. Dennison currently holds Bank Options entitling him to
purchase 2,712 shares of Bank Common Stock. Pursuant to an agreement between
Mr. Westmark and Mr. Mann, Mr. Mann has agreed that, at the direction of Mr.
Westmark, he will exercise Bank Options to acquire up to 7,848 shares of Bank
Common Stock and transfer the shares of Bank Common Stock that he receives upon
such exercise to Mr. Westmark, and Mr. Westmark will pay to Mr. Mann the $6.52
per share exercise price for such shares.
Indemnification and Insurance. Whitney has agreed that all rights to
indemnification and all limitations of liability existing in favor of
indemnified parties under the Articles of Incorporation and By-Laws of the Bank
as in effect on April 18, 1996 with respect to matters occurring prior to or on
the effective date of the Merger will survive the Merger for three years.
Whitney has also agreed to use its best efforts to cause those persons serving
as officers and directors of the Bank on the effective date of the Merger to be
covered for three years thereafter by the directors and officers liability
insurance policy maintained by the Bank (or a substitute policy) with respect to
acts or omissions occurring prior to or on the effective date of the Merger,
subject to certain conditions. In addition, Whitney has agreed to indemnify,
under certain conditions, the Bank's directors, officers and controlling persons
against certain expenses and liabilities, including certain liabilities arising
under federal securities laws.
No director or executive officer of the Bank owns any shares of Whitney
Common Stock other than Fayette Dennison, a director of the Bank, who owns 100
shares of Whitney Common Stock. No director or executive officer of Whitney has
any personal interest in the Merger other than by reason of his holdings of
Whitney Common Stock, nor do such directors or executive officers own any shares
of Bank Common Stock.
Status Under Federal Securities Laws; Certain Restrictions on Resales
The shares of Whitney Common Stock to be issued to shareholders of the
Bank pursuant to the Plan of Merger have been registered under the Securities
Act of 1933 (the "Securities Act"), thereby allowing such shares to be freely
traded without restriction by persons who will not be "affiliates" (as that term
is defined in the Securities Act and the rules and regulations thereunder) of
Whitney or who were not "affiliates" of the Bank.
Directors and certain officers and shareholders of the Bank may be
deemed to be "affiliates" of the Bank. Such persons may resell Whitney Common
Stock received by them pursuant to the Merger only if the shares are registered
for resale under the Securities Act or an exemption from the registration
requirements of the Securities Act is available. All such persons should
carefully consider the limitations imposed by Rules 144 and 145 promulgated
under the Securities Act prior to effecting any resales of Whitney Common Stock.
Each such affiliate has entered into an agreement not to sell shares of Whitney
Common Stock received by him in violation of the Securities Act. Further, in
accordance with the requirements for using the pooling-of-interests method of
accounting, shareholders of the Bank who may be deemed "affiliates" of the Bank
have agreed not to sell the shares of Whitney Common Stock received by them in
the Merger until at least 30 days of post-closing combined earnings of Whitney
and the Bank have been published by Whitney. Whitney has agreed to publish such
an earnings release as promptly as practicable following receipt of such
financial results.
Accounting Treatment
It is a condition to Whitney's obligation to consummate the Merger that
it receive assurances from its and the Bank's independent public accountants
that the Merger may be accounted for as a pooling-of-interests under the
requirements of Opinion No. 16 of the Accounting Principles Board of the
American Institute of Certified Public Accountants and the published rules and
regulations of the Securities and Exchange Commission (the "Commission") for
accounting and financial reporting purposes. Under the pooling-of-interests
method of accounting, after certain adjustments necessary to conform the basis
of presentation of the Whitney and Bank information, the recorded assets and
liabilities of Whitney and the Bank will be carried forward to Whitney's
consolidated financial statements at their recorded amounts, the consolidated
earnings of Whitney will include earnings of Whitney and the Bank for the entire
fiscal year in which the Merger occurs and the reported earnings of Whitney and
the Bank for prior periods will be combined and restated as consolidated
earnings of Whitney. See "- Description of the Plan of Merger -- Regulatory
Approvals and Other Conditions of the Merger" and "- Status Under Federal
Securities Laws; Certain Restrictions on Resales."
14
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the opinion of Arthur Andersen LLP that
Whitney and the Bank expect to receive concerning the material federal income
tax consequences to holders of Bank Common Stock resulting from the Plan of
Merger. Consummation of the Merger is conditioned upon receipt by Whitney and
the Bank of such opinion dated the date set for consummation of the Plan of
Merger. The following is based upon applicable federal law and judicial and
administrative interpretations on the date hereof, any of which is subject to
change at any time, and representations of management of Whitney and of the
Bank.
(a) The Merger will qualify as a reorganization under Section 368 of
the Internal Revenue Code of 1986, as amended (the "Code"); and the Bank,
Whitney and WNB-Florida each will be a "party to a reorganization" within the
meaning of Section 368(b) of the Code.
(b) No gain or loss will be recognized by the Bank, Whitney or
WNB-Florida as a result of the Merger.
(c) No gain or loss will be recognized by a shareholder of the Bank on
the receipt solely of Whitney Common Stock in exchange for his shares of Bank
Common Stock.
(d) The tax basis of the shares of Whitney Common Stock to be received
by shareholders of the Bank pursuant to the Merger will be the same as the basis
of the shares of Bank Common Stock surrendered in exchange therefor, decreased
by the amount of basis allocated to any cash received in lieu of fractional
shares that are hypothetically received by the shareholder and redeemed for
cash.
(e) The holding period of the shares of Whitney Common Stock to be
received by shareholders of the Bank pursuant to the Merger will include the
holding period of the shares of Bank Common Stock exchanged therefor, provided
that the shares of Bank Common Stock are held as capital assets on the effective
date of the Merger.
(f) The payment of cash to shareholders of the Bank in lieu of
fractional share interests of Whitney Common Stock will be treated as if the
fractional shares were distributed as part of the exchange and then redeemed by
Whitney. These cash payments will be treated as having been received as a
distribution in redemption of that fractional share interest subject to the
conditions and limitations of Section 302 of the Code. If a fractional share of
Whitney Common Stock would constitute a capital asset in the hands of a
redeeming shareholder, any resulting gain or loss will be characterized as
capital gain or loss in accordance with the provisions and limitations of
Subchapter P of Chapter 1 of the Code.
(g) A shareholder of the Bank who perfects his statutory right to
dissent to the Merger and who receives solely cash in exchange for his Bank
Common Stock will be treated as having received such cash payment as a
distribution in redemption of his shares of Bank Common Stock, subject to the
provisions and limitations of Section 302 of the Code. After such distribution,
if the former shareholder of the Bank does not actually or constructively own
any Bank Common Stock, the redemption will constitute a complete termination of
interest and be treated as a distribution in full payment in exchange for the
Bank Common Stock redeemed.
(h) Ordinary income will be recognized by the holders of unexercised
Bank Options on the receipt of Whitney Common Stock in exchange for such Bank
Options, measured by the fair market value of the Whitney Common Stock received.
The opinion of Arthur Andersen LLP is not binding on the Internal
Revenue Service, which could take positions contrary to the conclusions in such
opinion.
As a result of the complexity of the tax laws, and because the tax
consequences to any particular shareholder may be affected by matters not
discussed herein, it is recommended that each shareholder of the Bank consult
his personal tax advisor concerning the applicable federal, state and local
income tax consequences of the Merger.
15
<PAGE>
DISSENTERS' RIGHTS
Each shareholder of the Bank entitled to vote on the Plan of Merger who
objects to the Plan of Merger shall be entitled to the rights and remedies of
dissenting shareholders provided under the Bank Merger Act, 12 U.S.C. ss.215a
("Section 215a"), a copy of which is included in Appendix C to this Proxy
Statement-Prospectus, and any such shareholder who follows the procedures
specified in Section 215a will be entitled to receive the value of his shares of
Bank Common Stock in cash. A Bank shareholder must comply strictly with the
procedures set forth in Section 215a. Failure to follow any of those procedures
may result in a termination or waiver of his dissenters' rights under Section
215a.
To exercise the right of dissent, a Bank shareholder (a) must vote
against the Plan of Merger or otherwise notify the Secretary of the Bank in
writing at or prior to the Meeting that he dissents from the Plan of Merger and
(b) must also, within thirty days after the effective date of the Merger,
deliver to Whitney a written request for the value of his shares of Bank Common
Stock in cash accompanied by the surrender of his certificates representing such
shares of Bank Common Stock. Such written requests should be delivered either in
person or by mail (certified mail, return receipt requested, being the
recommended form of transmittal) to Joseph S. Schwertz, Jr., Secretary, Whitney
Holding Corporation, 228 St. Charles Avenue, New Orleans, Louisiana 70130.
The value of the shares of Bank Common Stock held by a dissenting
shareholder will be determined, as of the effective date of the Merger, by an
appraisal made by three appraisers, one to be selected by the holders of a
majority of the Bank Common Stock the owners of which have exercised their
dissenters' rights, one to be selected by the directors of Whitney, and one to
be selected by the two appraisers so selected. The valuation agreed upon by any
two of the three appraisers will govern. If the value so fixed is not
satisfactory to any dissenting Bank shareholder who has requested payment, that
Bank shareholder may, within five days after being notified of the appraised
value of his shares, appeal to the Comptroller, which will cause a reappraisal
to be made that will be final and binding as to the value of the shares of such
shareholder. If for any reason one or more of the appraisers are not selected,
or the appraisers so selected fail to determine the value of the Bank Common
Stock within ninety days after the effective date of the Merger, the Comptroller
will cause an appraisal of such shares to be made upon the written request of
any interested party, and such appraisal will be final and binding on all
parties. Whitney will pay the expenses of the Comptroller in making any
appraisal or reappraisal described above.
The value of the shares of Bank Common Stock held by dissenting
shareholders ascertained as described above will be promptly paid to the
dissenting shareholders. The shares of Whitney Common Stock that would have been
delivered to the dissenting Bank shareholders had they not requested payment in
accordance with Section 215a must be sold at an advertised public auction, and
Whitney has the right to purchase any or all of such shares. If the shares of
Whitney Common Stock are sold at the public auction at a price greater than the
amount paid to the dissenting Bank shareholders, the excess in such sale price
must be paid to such dissenting shareholders.
Prior to the effective date of the Merger, dissenting shareholders of
the Bank should send any communications regarding their rights to Lamar B. Cobb,
President, American Bank and Trust, 101 West Garden Street, Pensacola, Florida
32501. On or after the effective date of the Merger, dissenting shareholders of
the Bank should send any communications regarding their rights to Joseph S.
Schwertz, Jr., Secretary, Whitney Holding Corporation, 228 St. Charles Avenue,
New Orleans, Louisiana 70130. All such communications should be signed by or on
behalf of the dissenting Bank shareholder in the form in which his shares are
registered on the Bank's books.
Whitney has the right to terminate the Plan of Merger if the number of
shares of Bank Common Stock as to which the holders thereof, on the effective
date of the Merger, legally entitled to assert dissenting shareholders' rights
plus the number of shares to which the holders thereof are entitled to receive
cash payments in lieu of fractional shares, exceeds that number of shares of
Bank Common Stock that would preclude pooling-of-interests accounting for the
Merger. See "The Plan of Merger - Description of the Plan of Merger -- Waiver,
Amendment and Termination."
The foregoing summary of 12 U.S.C. ss.215a is qualified in its entirety
by reference to the full text of that statute set forth herein as Appendix C.
16
<PAGE>
UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL INFORMATION
In addition to the proposed merger with the Bank, Whitney has a merger
pending with Liberty Holding Company and its majority owned subsidiary Liberty
Bank, a Florida state-chartered banking association headquartered in Pensacola,
Florida (collectively, "Liberty"). The unaudited pro forma condensed combined
balance sheet as of March 31, 1996 and the unaudited pro forma condensed
combined statements of income for the three months ended March 31, 1996 and 1995
and for the years ended December 31, 1995, 1994 and 1993 appearing on the
following pages give effect to the proposed mergers with the Bank and Liberty. A
brief description of each of these mergers follows.
Whitney and WNB-Florida, on the one hand, and the Bank, on the other
hand, have signed a definitive agreement to merge the Bank into WNB-Florida,
more fully described in this Proxy Statement-Prospectus. Pursuant to the Plan of
Merger, the shareholders of the Bank and holders of any unexercised Bank Options
will receive shares of Whitney Common Stock having an aggregate value of
approximately $10,250,000, assuming that no Bank Options are exercised and the
Deductible Amount is zero. The exact number of shares will be determined at the
time the Merger is effected. See "The Plan of Merger - Description of the Plan
of Merger -- Conversion of Common Stock."
Whitney and WNB-Florida have also signed a definitive agreement to
merge Liberty Holding Company with and into Whitney and to merge Liberty Bank
with and into WNB-Florida (the "Liberty Mergers"). Under the terms of that
definitive agreement, shareholders of Liberty will receive shares of Whitney
Common Stock having a value of approximately $14,140,000. The exact number of
shares of Whitney Common Stock to be issued to the shareholders of Liberty will
be determined at the time that the Liberty Mergers are effected.
Each of these proposed mergers is expected to be accounted for as a
pooling-of-interests, and the pro forma financial information set forth on the
following pages has been prepared to reflect the consummation of all of the
proposed mergers. No assurance can be given, however, that any or all of these
mergers will be consummated, and consummation of the Merger, on the one hand,
and the Liberty Mergers, on the other hand, is not a condition to consummation
of the other.
On March 8, 1996, Whitney completed a merger with First Citizens
BancStock, Inc. ("Citizens") and its wholly-owned subsidiary, The First National
Bank in St. Mary Parish, which was accounted for as a pooling-of-interests;
accordingly, Whitney's financial statements have been restated to include the
operations of Citizens. Whitney's results of operations include nonrecurring
costs associated with the Citizens merger of approximately $2.2 million, net of
income tax, for the three months ended March 31, 1996.
The unaudited pro forma combined balance sheet at March 31, 1996, set
forth below, gives effect to the Merger and the Liberty Mergers under the
pooling-of-interests accounting method as if such mergers had occurred on March
31, 1996. The unaudited pro forma combined statements of income for the years
ended December 31, 1995, 1994 and 1993 and the three months ended March 31, 1996
and 1995 combine the historical statements of income of Whitney, the Bank and
Liberty as if the Merger and the Liberty Mergers had been effective as of
January 1, 1993. The costs associated with the Merger and Liberty Mergers,
estimated to be approximately $700,000, will be accounted for as a current
period expense upon consummation of such mergers, and have not been reflected in
the pro forma financial statements.
The following unaudited pro forma condensed combined financial
information should be read in conjunction with the consolidated financial
statements and notes thereto of Whitney's consolidated group incorporated herein
by reference. The pro forma information is presented for illustrative purposes
only and is not necessarily indicative of the operating results or financial
position that would have occurred if the Merger and the Liberty Mergers had been
consummated in accordance with the assumptions set forth under "Notes to
Unaudited Pro Forma Condensed Combined Financial Statements," nor is it
necessarily indicative of future operating results or financial position.
17
<PAGE>
WHITNEY HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED BALANCE SHEET
(Unaudited)
March 31, 1996
(In Thousands)
<TABLE>
<C> <C> <C> <C> <C> <C>
Historical
------------------------------------------
Whitney Liberty Pro Forma Pro Forma
(Consolidated) Bank (Consolidated) Adjustments Combined
-------------- ---- -------------- ----------- ---------
ASSETS
Cash and due from financial institutions......... $ 238,115 $ 1,546 $ 4,435 $ 244,096
Securities available for sale.................... 182,723 26,448 4,402 213,573
Securities held to maturity...................... 1,311,249 -- 640 1,311,889
Federal funds sold............................... 45,000 1,840 2,775 49,615
Loans and leases................................. 1,592,994 26,707 36,791 1,656,492
Less: reserve for possible loan losses........... 41,406 339 507 42,252
----------- ----------- ----------- -----------
Net loans and leases............................. 1,551,588 26,368 36,284 1,614,240
Bank premises and equipment (net)................ 88,526 1,751 1,904 92,181
Other real estate owned (net).................... 4,662 101 -- 4,763
Other assets..................................... 77,502 694 527 78,723
----------- ----------- ----------- -----------
TOTAL ASSETS.............................. $3,499,365 $58,748 $50,967 $3,609,080
=========== =========== =========== ===========
LIABILITIES
Deposits......................................... $2,767,744 $53,689 $43,637 $2,865,070
Federal funds purchased and other borrowings..... 329,938 -- 633 330,571
Accrued expenses and other liabilities........... 31,376 484 463 32,323
----------- ----------- ----------- -----------
TOTAL LIABILITIES......................... 3,129,058 54,173 44,733 3,227,964
Minority interest in Liberty Bank................ 38 (38) 0
EQUITY
Capital stock.................................... 2,800 1,174 1,343 (2,517) 2,800
Capital surplus.................................. 64,665 3,425 3,150 2,555 73,795
Retained earnings................................ 310,377 (115) 1,904 (137) 312,029
Net unrealized gains on available-for-sale
securities.................................... 35 91 (64) 62
Less: Treasury stock............................. (7,570) -- (137) 137 (7,570)
----------- ----------- ----------- -----------
TOTAL EQUITY.............................. $370,307 $4,575 $6,196 38 $381,116
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY...................... $3,499,365 $58,748 $50,967 $3,609,080
=========== =========== =========== ===========
See accompanying notes.
</TABLE>
18
<PAGE>
WHITNEY HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
(Unaudited)
Three Months Ended March 31, 1996
(In Thousands, except for share data)
<TABLE>
<C> <C> <C> <C> <C> <C>
Historical
-----------------------------------------
Whitney Liberty Pro Forma Pro Forma
(Consolidated) Bank (Consolidated) Adjustments Combined
-------------- ---- -------------- ----------- ----------
Interest income.................................. $ 56,941 $ 1,170 $ 1,035 $59,146
Interest expense................................. 21,126 638 372 22,136
-------- -------- -------- --------
Net interest income.............................. 35,815 532 663 37,010
Provision for (reduction in) reserve for
possible loan losses........................... 0 0 0 0
-------- -------- -------- --------
Net interest income after provision
for possible loan losses...................... 35,815 532 663 37,010
Non-interest income.............................. 8,697 72 114 8,883
Non-interest expense............................. 32,905 272 550 33,727
Minority interest in income of Liberty Bank...... -- -- (1) 1 0
-------- -------- -------- --------
Income before income taxes....................... 11,607 332 226 1 12,166
Income taxes..................................... 3,570 123 82 3,775
-------- -------- -------- --------
Net income....................................... $8,037 $209 $144 1 $8,391
======== ======== ======== ========
Weighted average shares outstanding:
Primary........................................ 17,096,949 330,645 456,093 17,883,687
Fully diluted.................................. 17,099,787 330,645 456,093 17,886,525
Earnings per share:
Primary........................................ $0.47 $0.63 $0.32 $0.47
Fully diluted.................................. $0.47 $0.63 $0.32 $0.47
See accompanying notes.
</TABLE>
19
<PAGE>
WHITNEY HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
(Unaudited)
Three Months Ended March 31, 1995
(In Thousands, except for share data)
<TABLE>
<C> <C> <C> <C> <C> <C>
Historical
-----------------------------------------
Whitney Liberty Pro Forma Pro Forma
(Consolidated) Bank (Consolidated) Adjustments Combined
-------------- ---- -------------- ----------- ----------
Interest income.................................. $ 49,805 $ 763 $ 921 $ 51,489
Interest expense................................. 16,133 380 317 16,830
-------- -------- -------- --------
Net interest income.............................. 33,672 383 604 34,659
Provision for (reduction in) reserve for
possible loan losses........................... 100 20 0 120
-------- -------- -------- --------
Net interest income after provision
for possible loan losses...................... 33,572 363 604 34,539
Non-interest income.............................. 8,636 76 98 8,810
Non-interest expense............................. 29,164 273 518 29,955
Minority interest in income of Liberty Bank...... -- -- (1) 1 0
-------- -------- -------- --------
Income before income taxes....................... 13,044 166 183 1 13,394
Income taxes..................................... 4,099 62 62 4,223
-------- -------- -------- --------
Net income....................................... $ 8,945 $ 104 $ 121 1 $ 9,171
======== ======== ======== ========
Weighted average shares outstanding
Primary................................... 16,877,358 330,645 456,093 17,664,096
Fully diluted............................. 16,877,358 330,645 456,093 17,664,096
Earnings per share
Primary................................... $0.53 $0.31 $0.27 $0.52
Fully diluted............................. $0.53 $0.31 $0.27 $0.52
See accompanying notes.
</TABLE>
20
<PAGE>
WHITNEY HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
(Unaudited)
Year Ended December 31, 1995
(In Thousands, except for share data)
<TABLE>
<C> <C> <C> <C> <C> <C>
Historical
-----------------------------------------
Whitney Liberty Pro Forma Pro Forma
(Consolidated) Bank (Consolidated) Adjustments Combined
-------------------------------------------------------------------------------
Interest income.................................. $ 213,295 $ 4,391 $ 3,973 $ 221,659
Interest expense................................. 71,867 2,631 1,444 75,942
--------- ---------- ---------- ----------
Net interest income.............................. 141,428 1,760 2,529 145,717
Provision for (reduction in) reserve for
possible loan losses.......................... (9,400) 20 0 (9,380)
-------- ---------- ---------- ----------
Net interest income after provision
for loan losses............................... 150,828 1,740 2,529 155,097
Non-interest income.............................. 33,205 297 467 33,969
Non-interest expense............................. 119,481 1,087 2,112 122,680
Minority interest in income of Liberty Bank...... -- -- (4) 4 0
--------- ---------- ---------- ----------
Income before income taxes....................... 64,552 950 880 4 66,386
Income taxes..................................... 20,203 354 297 20,854
-------- ---------- ---------- ----------
Net income....................................... $ 44,349 $ 596 $ 583 4 $ 45,532
========= ========== ========== ==========
Weighted average shares outstanding
Primary................................... 16,971,801 330,645 456,093 17,758,539
Fully diluted............................. 17,049,308 330,645 456,093 17,836,046
Earnings per share
Primary................................... $ 2.61 $ 1.80 $ 1.28 $ 2.56
Fully diluted............................. $ 2.60 $ 1.80 $ 1.28 $ 2.55
See accompanying notes.
</TABLE>
21
<PAGE>
WHITNEY HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
(Unaudited)
Year Ended December 31, 1994
(In Thousands, except for share data)
<TABLE>
<C> <C> <C> <C> <C> <C>
Historical
-----------------------------------------
Whitney Liberty Pro Forma Pro Forma
(Consolidated) Bank (Consolidated) Adjustments Combined
------------------------------------------------------------------------
Interest income.................................. $ 192,750 $ 2,431 $ 3,572 $ 198,753
Interest expense................................. 57,503 866 1,150 59,519
--------- ---------- ---------- ----------
Net interest income.............................. 135,247 1,565 2,422 139,234
Provision for (reduction in) reserve for
possible loan losses.......................... (26,004) 135 0 (25,869)
----------- ---------- ---------- ----------
Net interest income after provision
for loan losses............................... 161,251 1,430 2,422 165,103
Non-interest income.............................. 34,129 213 622 34,964
Non-interest expense............................. 112,394 1,053 2,214 115,661
Minority interest in income of Liberty Bank...... -- -- (4) 4 0
--------- ---------- ---------- ----------
Income before income taxes....................... 82,986 590 826 4 84,406
Income taxes..................................... 26,788 (188) 216 26,816
----------- ---------- ---------- ----------
Net income....................................... $ 56,198 $ 778 $ 610 4 $ 57,590
========= ========== ========== ==========
Weighted average shares outstanding
Primary................................... 16,588,783 330,645 456,093 17,375,521
Fully diluted......................... 16,588,783 330,645 456,093 17,375,521
Earnings per share
Primary................................... $ 3.39 $ 2.35 $ 1.34 $ 3.31
Fully diluted......................... $ 3.39 $ 2.35 $ 1.34 $ 3.31
See accompanying notes.
</TABLE>
22
<PAGE>
WHITNEY HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
(Unaudited)
Year Ended December 31, 1993
(In Thousands, except for share data)
<TABLE>
<C> <C> <C> <C> <C> <C>
Historical
-----------------------------------------
Whitney Liberty Pro Forma Pro Forma
(Consolidated) Bank (Consolidated) Adjustments Combined
-------------------------------------------------------------------------
Interest income.................................. $ 186,105 $ 2,259 $ 3,194 $ 191,558
Interest expense................................. 54,681 873 1,176 56,730
--------- ---------- ---------- ----------
Net interest income.............................. 131,424 1,386 2,018 134,828
Provision for (reduction in) reserve for
possible loan losses.......................... (59,625) 300 30 (59,295)
------- ---------- ---------- ----------
Net interest income after provision
for loan losses............................... 191,049 1,086 1,988 194,123
Non-interest income.............................. 33,216 201 838 34,255
Non-interest expense............................. 108,237 1,176 2,059 111,472
Minority interest in income of Liberty Bank...... -- -- (3) 3 0
--------- ---------- ---------- ----------
Income before income taxes and
cumulative effect of accounting changes....... 116,028 111 764 3 116,906
Income taxes..................................... 37,145 (102) 277 37,320
-------- ---------- ---------- ----------
Income before effect of accounting
changes...................................... 78,883 213 $ 487 3 79,586
Cumulative effect of accounting
changes, net................................. 345 -- -- 345
--------- ---------- ---------- ----------
Net income....................................... $ 79,228 $ 213 $ 487 3 $ 79,931
========= ========== ========== ==========
Weighted average shares outstanding
Primary................................... 16,456,782 330,645 456,093 17,243,520
Fully diluted......................... 16,456,782 330,645 456,093 17,243,520
Earnings per share
Primary................................... $ 4.81 $ 0.64 $ 1.07 $ 4.64
Fully diluted......................... $ 4.81 $ 0.64 $ 1.07 $ 4.64
See accompanying notes.
</TABLE>
23
<PAGE>
WHITNEY HOLDING CORPORATION
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited)
To calculate pro forma information, it has been assumed that the number
of outstanding shares of Whitney Common Stock includes shares to be issued upon
consummation of the Merger and the Liberty Mergers. In connection with these
proposed mergers, Whitney will issue shares of Whitney Common Stock to the
shareholders of the Bank, to the holders of any unexercised Bank Options, to the
shareholders of Liberty Holding Company and to the minority shareholders of
Liberty Bank.
Under the terms of the Plan of Merger, Whitney will issue Whitney
Common Stock with an aggregate value at the date of the Merger of approximately
$10,250,000 (calculated based on the Average Market Price and assuming that (a)
none of the Bank Options are exercised prior to the effective date of the Merger
and (b) the Deductible Amount is zero). The number of shares of Whitney Common
Stock to be exchanged in the Merger will be determined by the Average Market
Price of Whitney Common Stock, as defined in the Plan of Merger, which will be
no less than $27.00 per share nor more than $35.00 per share, except as provided
in the Plan of Merger. For purposes of the accompanying pro forma financial
statements, the Whitney Common Stock is assumed to have an Average Market Price
of $31.00 per share, resulting in the issuance of 298,378 shares of Whitney
Common Stock upon conversion of the Bank Common Stock by reason of the Merger
(an exchange ratio of 0.6353), and the issuance of 32,267 shares of Whitney
Common Stock in exchange for unexercised Bank Options to acquire 75,936 shares
of Bank Common Stock.
Under the terms of the definitive agreement governing the Liberty
Mergers (the "Liberty Agreement"), Whitney will issue Whitney Common Stock with
an aggregate value at the date of the Liberty Mergers of approximately
$14,140,000 (calculated based on the Average Market Price (as defined in the
Liberty Agreement)). The number of shares of Whitney Common Stock to be
exchanged in the Liberty Mergers will be determined by the Average Market Price
of Whitney Common Stock, as defined in the Liberty Agreement, which will be no
less than $27.00 per share nor more than $35.00 per share, except as otherwise
provided in the Liberty Agreement. For purposes of the accompanying pro forma
financial statements, the Whitney Common Stock is assumed to have an Average
Market Price in the Liberty Mergers of $31.00 per share, resulting in the
issuance of 456,093 shares of Whitney Common Stock for all the common stock of
Liberty Holding Company (an exchange ratio of 0.3281) and 2,897 shares of
Whitney Common Stock for all the common stock of Liberty Bank held by
shareholders other than Liberty Holding Company (an exchange ratio of 2.1192).
Certain warrants to acquire shares of Liberty Holding Company common stock that
were outstanding during periods presented, but that have expired in accordance
with their terms prior to May 31, 1996, were not material and have not been
considered in calculating pro forma earnings per share.
The historical earnings per share and weighted average shares
outstanding amounts for the Bank and Liberty reflect the equivalent shares of
Whitney Common Stock expected to be exchanged in connection with the Merger and
the Liberty Mergers based on an assumed Average Market Price of $31.00 per share
of Whitney Common Stock, with none of the Bank Options being exercised prior to
the Merger and a Deductible Amount of zero.
There is no stated par value of Whitney Common Stock. In accordance
with the pooling-of-interests method of accounting, the historical equities of
the merged companies are combined.
24
<PAGE>
WHITNEY HOLDING CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(American Bank and Trust Transaction Only)
The following unaudited pro forma condensed combined financial
information gives effect to the proposed merger of the Bank into WNB-Florida
using the pooling-of-interests method of accounting and should be read in
conjunction with the consolidated financial statements and notes thereto of
Whitney's consolidated group incorporated herein by reference and of the Bank
included elsewhere in this Proxy Statement-Prospectus. The pro forma information
is presented for illustrative purposes only, and is not necessarily indicative
of the operating results or financial position that would have occurred if the
Merger had been consummated in accordance with the assumptions set forth under
"Notes to Unaudited Pro Forma Condensed Combined Financial Statements (American
Bank and Trust Transaction Only)," nor is it necessarily indicative of future
operating results or financial position.
Under the terms of the Plan of Merger, shareholders of the Bank and
holders of any unexercised Bank Options will receive shares of Whitney Common
Stock with an aggregate value of approximately $10,250,000, assuming that no
Bank Options are exercised and the Deductible Amount is zero. The exact number
of shares will be determined at the time the Merger is effected. See "The Plan
of Merger - Description of the Plan of Merger -- Conversion of Common Stock."
On March 8, 1996, Whitney completed a merger with First Citizens
BancStock, Inc. ("Citizens") and its wholly-owned subsidiary, The First National
Bank in St. Mary Parish, which was accounted for as a pooling-of-interests;
accordingly, Whitney's financial statements have been restated to include the
operations of Citizens. Whitney's results of operations include nonrecurring
costs associated with the Citizens merger of approximately $2.2 million, net of
income tax, for the three months ended March 31, 1996.
The unaudited pro forma condensed combined balance sheet at March 31,
1996, set forth below, gives effect the Merger under the pooling-of-interests
accounting method as if the Merger had occurred on March 31, 1996. The unaudited
pro forma condensed combined statements of income for the years ended December
31, 1995, 1994 and 1993 and the three months ended March 31, 1996 and 1995
combine the historical statements of income of Whitney and the Bank as if the
Merger had been effective as of January 1, 1993. The cost associated with the
Merger, estimated to be approximately $300,000, will be accounted for as a
current period expense upon consummation of the Merger and has not been
reflected in the following pro forma financial statements.
25
<PAGE>
WHITNEY HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED BALANCE SHEET
(American Bank and Trust Transaction Only)
(Unaudited)
March 31, 1996
(In Thousands)
<TABLE>
<C> <C> <C> <C>
Whitney Pro Forma Pro Forma
(Consolidated) Bank Adjustments Combined
-------------- ---- ----------- ---------
ASSETS
Cash and due from financial institutions........... $ 238,115 $ 1,546 $ 239,661
Securities available for sale...................... 182,723 26,448 209,171
Securities held to maturity........................ 1,311,249 -- 1,311,249
Federal funds sold................................. 45,000 1,840 46,840
Loans and leases................................... 1,592,994 26,707 1,619,701
Less: reserve for possible loan losses............. 41,406 339 41,745
----------- ------------ -----------
Net loans and leases............................... 1,551,588 26,368 1,577,956
Bank premises and equipment (net).................. 88,526 1,751 90,277
Other real estate owned (net)...................... 4,662 101 4,763
Other assets....................................... 77,502 694 78,196
----------- ------------ -----------
TOTAL ASSETS................................ $ 3,499,365 $ 58,748 $ 3,558,113
=========== ============ ===========
LIABILITIES
Deposits........................................... $ 2,767,744 $ 53,689 $ 2,821,433
Federal funds purchased and other borrowings....... 329,938 -- 329,938
Accrued expenses and other liabilities............. 31,376 484 31,860
----------- ------------ -----------
TOTAL LIABILITIES........................... 3,129,058 54,173 3,183,231
EQUITY
Capital stock...................................... 2,800 1,174 (1,174) 2,800
Capital surplus.................................... 64,665 3,425 1,174 69,264
Retained earnings.................................. 310,377 (115) 310,262
Net unrealized holding gains on available-
for-sale securities............................. 35 91 126
Less: Treasury stock............................... (7,570) -- (7,570)
----------- ------------ -----------
TOTAL EQUITY................................ $ 370,307 $ 4,575 $ 374,882
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY........................ $ 3,499,365 $ 58,748 $ 3,558,113
=========== ============ ===========
See accompanying notes.
</TABLE>
26
<PAGE>
WHITNEY HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
(American Bank and Trust Transaction Only)
(Unaudited)
Three Months Ended March 31, 1996
(In Thousands, except for share data)
<TABLE>
<C> <C> <C> <C> <C>
Whitney Pro Forma Pro Forma
(Consolidated) Bank Adjustments Combined
-------------- ---- ----------- ----------
Interest income.................................... $56,941 $ 1,170 $58,111
Interest expense................................... 21,126 638 21,764
-------- -------- --------
Net interest income................................ 35,815 532 36,347
Provision for (reduction in) reserve for
possible loan losses............................. 0 0 0
-------- -------- --------
Net interest income after provision
for possible loan losses........................ 35,815 532 36,347
Non-interest income................................ 8,697 72 8,769
Non-interest expense............................... 32,905 272 33,177
-------- -------- --------
Income before income taxes......................... 11,607 332 11,939
Income taxes....................................... 3,570 123 3,693
-------- -------- --------
Net income......................................... $ 8,037 $ 209 $ 8,246
======== ======== ========
Weighted average shares outstanding:
Primary.......................................... 17,096,949 330,645 17,427,594
Fully diluted.................................... 17,099,787 330,645 17,430,432
Earnings per share:
Primary.......................................... $ 0.47 $ 0.63 $ 0.47
Fully diluted.................................... $ 0.47 $ 0.63 $ 0.47
See accompanying notes.
</TABLE>
27
<PAGE>
WHITNEY HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
(American Bank and Trust Transaction Only)
(Unaudited)
Three Months Ended March 31, 1995
(In Thousands, except for share data)
<TABLE>
<C> <C> <C> <C> <C>
Whitney Pro Forma Pro Forma
(Consolidated) Bank Adjustments Combined
-------------- ---- ----------- ---------
Interest income.................................... $49,805 $ 763 $50,568
Interest expense................................... 16,133 380 16,513
-------- -------- --------
Net interest income................................ 33,672 383 34,055
Provision for (reduction in) reserve for
possible loan losses............................. 100 20 120
-------- -------- --------
Net interest income after provision
for possible loan losses........................ 33,572 363 33,935
Non-interest income................................ 8,636 76 8,712
Non-interest expense............................... 29,164 273 29,437
-------- -------- --------
Income before income taxes......................... 13,044 166 13,210
Income taxes....................................... 4,099 62 4,161
-------- -------- --------
Net income......................................... $ 8,945 $ 104 $ 9,049
======== ======== ========
Weighted average shares outstanding
Primary......................................... 16,877,358 330,645 17,208,003
Fully diluted................................... 16,877,358 330,645 17,208,003
Earnings per share
Primary......................................... $ 0.53 $ 0.31 $ 0.53
Fully diluted................................... $ 0.53 $ 0.31 $ 0.53
See accompanying notes.
</TABLE>
28
<PAGE>
WHITNEY HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
(American Bank and Trust Transaction Only)
(Unaudited)
Year Ended December 31, 1995
(In Thousands, except for share data)
<TABLE>
<C> <C> <C> <C> <C>
Whitney Pro Forma Pro Forma
(Consolidated) Bank Adjustments Combined
-------------- ---- ------------- ---------
Interest income.................................... $ 213,295 $ 4,391 $ 217,686
Interest expense................................... 71,867 2,631 74,498
--------- ---------- ---------
Net interest income................................ 141,428 1,760 143,188
Provision for (reduction in) reserve for
possible loan losses............................ (9,400) 20 (9,380)
---------- ---------- ----------
Net interest income after provision
for loan losses................................. 150,828 1,740 152,568
Non-interest income................................ 33,205 297 33,502
Non-interest expense............................... 119,481 1,087 120,568
--------- ---------- ---------
Income before income taxes......................... 64,552 950 65,502
Income taxes....................................... 20,203 354 20,557
--------- ---------- ---------
Net income......................................... $ 44,349 $ 596 $ 44,945
========= ========== =========
Weighted average shares outstanding
Primary......................................... 16,971,801 330,645 17,302,446
Fully diluted................................... 17,049,308 330,645 17,379,953
Earnings per share
Primary......................................... $ 2.61 $ 1.80 $ 2.60
Fully diluted................................... $ 2.60 $ 1.80 $ 2.59
See accompanying notes.
</TABLE>
29
<PAGE>
WHITNEY HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
(American Bank and Trust Transaction Only)
(Unaudited)
Year Ended December 31, 1994
(In Thousands, except for share data)
<TABLE>
<C> <C> <C> <C> <C>
Whitney Pro Forma Pro Forma
(Consolidated) Bank Adjustments Combined
-------------- ---- ------------- ----------
Interest income.................................... $ 192,750 $ 2,431 $ 195,181
Interest expense................................... 57,503 866 58,369
--------- ---------- ---------
Net interest income................................ 135,247 1,565 136,812
Provision for (reduction in) reserve for
possible loan losses............................ (26,004) 135 (25,869)
---------- ---------- ----------
Net interest income after provision
for loan losses................................. 161,251 1,430 162,681
Non-interest income................................ 34,129 213 34,342
Non-interest expense............................... 112,394 1,053 113,447
--------- ---------- ---------
Income before income taxes......................... 82,986 590 83,576
Income taxes....................................... 26,788 (188) 26,600
--------- ----------- ---------
Net income......................................... $ 56,198 $ 778 $ 56,976
========= ========== =========
Weighted average shares outstanding
Primary......................................... 16,588,783 330,645 16,919,428
Fully diluted................................... 16,588,783 330,645 16,919,428
Earnings per share
Primary......................................... $ 3.39 $ 2.35 $ 3.37
Fully diluted................................... $ 3.39 $ 2.35 $ 3.37
See accompanying notes.
</TABLE>
30
<PAGE>
WHITNEY HOLDING CORPORATION
PRO FORMA COMBINED INCOME STATEMENT
(American Bank and Trust Transaction Only)
(Unaudited)
Year Ended December 31, 1993
(In Thousands, except for share data)
<TABLE>
<C> <C> <C> <C> <C>
Whitney Pro Forma Pro Forma
(Consolidated) Bank Adjustments Combined
-------------- ---- ----------- ---------
Interest income.................................... $ 186,105 $ 2,259 $ 188,364
Interest expense................................... 54,681 873 55,554
--------- ---------- ---------
Net interest income................................ 131,424 1,386 132,810
Provision for (reduction in) reserve for
possible loan losses............................ (59,625) 300 (59,325)
---------- ---------- ---------
Net interest income after provision
for loan losses................................. 191,049 1,086 192,135
Non-interest income................................ 33,216 201 33,417
Non-interest expense............................... 108,237 1,176 109,413
--------- ---------- ---------
Income before income taxes and
cumulative effect of accounting changes......... 116,028 111 116,139
Income taxes....................................... 37,145 (102) 37,043
--------- ----------- ---------
Income before effect of accounting
changes........................................ $ 78,883 $ 213 $ 79,096
Cumulative effect of accounting
changes, net................................... 345 -- 345
--------- ---------- ---------
Net income......................................... $ 79,228 $ 213 $ 79,441
========= ========== =========
Weighted average shares outstanding
Primary..................................... 16,456,782 330,645 16,787,427
Fully diluted........................... 16,456,782 330,645 16,787,427
Earnings per share
Primary..................................... $ 4.81 $ 0.64 $ 4.73
Fully diluted........................... $ 4.81 $ 0.64 $ 4.73
See accompanying notes.
</TABLE>
31
<PAGE>
WHITNEY HOLDING CORPORATION
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(American Bank and Trust Transaction Only)
(Unaudited)
To calculate pro forma information, it has been assumed that the number
of outstanding shares of Whitney Common Stock includes shares to be issued upon
consummation of the Merger. In connection with the Merger, Whitney will issue
shares of Whitney Common Stock to the shareholders of the Bank and to the
holders of any unexercised Bank Options.
Under the terms of the Plan of Merger, Whitney will issue Whitney
Common Stock with an aggregate value at the date of the Merger of approximately
$10,250,000 (calculated based on the Average Market Price and assuming that (a)
none of the Bank Options are exercised prior to the effective date of the Merger
and (b) the Deductible Amount is zero). The number of shares of Whitney Common
Stock to be exchanged in the Merger will be determined by the Average Market
Price of Whitney Common Stock, as defined in the Plan of Merger, which will be
no less than $27.00 per share nor more than $35.00 per share, except as provided
in the Plan of Merger. For purposes of the accompanying pro forma financial
statements, the Whitney Common Stock is assumed to have an Average Market Price
of $31.00 per share, resulting in the issuance of 298,378 shares of Whitney
Common Stock upon conversion of the Bank Common Stock by reason of the Merger
(an exchange ratio of 0.6353), and the issuance of 32,267 shares of Whitney
Common Stock in exchange for unexercised Bank Options to acquire 75,936 shares
of Bank Common Stock.
The historical earnings per share and weighted average shares
outstanding amounts for the Bank reflect the equivalent shares of Whitney Common
Stock expected to be exchanged in connection with the Merger for the outstanding
shares of Bank Common Stock and any unexercised Bank Options, based on an
assumed Average Market Price of $31.00 per share of Whitney Common Stock, with
none of the Bank Options being exercised prior to the Merger and a Deductible
Amount of zero.
There is no stated par value of Whitney Common Stock. In accordance
with the pooling-of-interests method of accounting, the historical equities of
the merged companies are combined.
32
<PAGE>
INFORMATION ABOUT THE BANK
Description of Business
The Bank is a bank corporation organized under the laws of the State of
Florida, with Articles of Incorporation filed with the Department of State of
Florida on January 15, 1987. Since its inception, the Bank has operated solely
from its banking facilities located at 101 West Garden Street, Pensacola,
Florida 32501. The Bank conducts a general banking operation, except that it
does not operate a trust department. At March 31, 1996, the Bank had total
assets of approximately $58,748,000, total deposits of approximately
$53,689,000, total net loans of approximately $26,368,000 and shareholders
equity of approximately $4,575,000.
Competition
The Bank experiences competition in attracting deposits and lending
funds. Primary competitors of the Bank are other commercial banks, savings and
loan associations located in the Bank's market area and, to a lesser extent,
finance companies, insurance companies, credit unions, credit card organizations
and other financial institutions located in the geographic area in which the
Bank competes. The Bank competes with other financial institutions to make loans
to customers and to obtain deposits of customers. This competition is generally
based on the interest rates charged on loans or paid on deposits. The Bank faces
increasing competition from larger financial institutions, many of which have
entered the competitive area of the Bank by making acquisitions as a result of
the Riegel-Neal Interstate Banking and Branching Act of 1994. That Act permitted
adequately capitalized and managed bank holding companies to acquire banks in
any state, subject to certain limitations, regardless of whether the acquisition
would be prohibited by applicable state law.
Supervision and Regulation
General. In addition to the generally applicable state and federal laws
governing businesses and employers, the Bank is extensively regulated by special
state and federal laws and regulations applicable only to financial
institutions. Laws regulating consumer finance transactions, collections and
confidentiality and the safety and soundness of financial institutions regulate
virtually all aspects of the operations of the Bank. These laws and regulations
are intended to protect consumers rather than the shareholders of the Bank. Any
change in these applicable laws or regulations may have a material effect on the
business of the Bank.
The Bank is a Florida state-chartered Bank subject to supervision by
the Office of the Comptroller of the State of Florida and has its deposits
insured up to $100,000 per depositor by the Federal Deposit Insurance
Corporation. The Bank is regulated and subject to periodic examination by these
government authorities, each of which issue regulations that impose restrictions
on the nature and amount of loans and investments the Bank may make.
Monetary Policy. Monetary policies and regulatory authorities,
including the Reserve Board, have a significant effect on the business of the
Bank. The Reserve Board supervises and regulates the national supply of bank
credit through the sale of U. S. government securities, changes in the discount
rate on bank borrowings from the Reserve Board and changes in reserve
requirements with respect to member bank deposits. The Reserve Board also
regulates the types of loans and investments in which banks may participate.
These regulatory efforts can affect the overall business of the Bank and
interest rate it charges on loans or pays for deposits. The effect of future
Reserve Board policies on the business of the Bank cannot be predicted with
certainty.
Capital Adequacy Guidelines. Regulatory authorities governing the
operations of the Bank establish minimum capital requirements of the Bank
designed to reduce risk in operations, to account for off-balance sheet exposure
and to insure adequate liquidity in the Bank. See "The Company's Management's
Discussion and Analysis of Financial Condition and Results of Operations."
33
<PAGE>
Market Prices and Dividends
Market Prices. The Bank Stock is not traded on any exchange, and there
is no established public trading market for such stock. There are no bid or
asked prices available for Bank Common Stock. There is, however, very limited
and sporadic trading of Bank Common Stock in its local area. Based on the
limited information available to the Bank's management, only approximately 20
trades were effected during the last two years at prices ranging from $6 to $16.
The Bank's management believes that such trades were effected on an arms-length
basis, but no assurance is given in this regard.
Dividends. The Bank has never paid any cash or other dividends of any
type, and has no intention to pay any such dividends in the foreseeable future.
The payment of dividends by the Bank is subject to certain legal restrictions.
Regulatory authorities also have the power to restrict the Bank's dividend
payments if such payments are deemed an unsafe or unsound banking practice or if
the authority deems the Bank's capital to be inadequate. See "Comparative Rights
of Shareholders - Comparison of Whitney Common Stock and Bank Common Stock --
Dividends and Other Distributions."
Holders. As of ___________________, 1996, the record date for the
Meeting, there were approximately 91 record shareholders of the Bank.
Property
The building and premises constituting the Bank's only office, located
at 101 West Garden Street, Pensacola Florida, are owned by the Bank. The Bank
considers its property to be in good condition.
Employees
The Bank employs 16 people full-time and one person part-time and
considers its relationship with its employees to be good.
Security Holdings of Principal Shareholders and Management
Principal Shareholders. The following table reflects certain
information regarding those persons who are known by the Bank to be the
beneficial owner of more than five percent of the outstanding Bank Common Stock.
Unless otherwise indicated, each person listed in the table has sole voting and
investment power with respect to the shares set forth opposite his name.
34
<PAGE>
Name and Address Number of Shares
of Beneficial Owner Beneficially Owned Percent of Class
- ------------------- ------------------ ---------------
Theo D. Baars 30,079(1) 6.26%(1)
221 S. Baylen Street
Pensacola, Florida 32501
M. Warren Culbertson 40,595(1) 8.45%(1)
3533 Pine Forest Road
Cantonment, Florida 32533
Fayette Dennison 109,660(2) 23.21%(2)
4300 Bayou Boulevard
Suite 21
Pensacola, Florida 32503
Grace B. Futch 26,148(1)(3) 5.44%(1)
4562 Whisper Circle
Pensacola, Florida 32504
Frank E. Westmark 65,865(1)(4) 13.49%(1)
P. O. Box 575
Cantonment, Florida 32533
- -----------------------
(1) Includes 10,848 shares of Bank Common Stock that the individual named
currently has the right to acquire upon exercise of Bank Options.
(2) Includes 2,712 shares of Bank Common Stock that Mr. Dennison currently
has the right to acquire upon exercise of Bank Options.
(3) Includes 5,300 shares registered in the name of Ms. Futch and her
husband.
(4) Includes 16,255 shares registered in the name of Mr. Westmark and his
wife and 5,000 shares registered in the name of Mr. Westmark and his
mother. Also includes 7,848 shares of Bank Common Stock that Mr.
Westmark has the right to acquire pursuant to an agreement with T.
David Mann, a director of the Bank.
Directors and Executive Officers. The following table sets forth
certain information as of the record date for the Meeting concerning the
beneficial ownership of Bank Common Stock by each director of the Bank and by
all directors and executor officers of the Bank as a group. Unless otherwise
indicated, each person listed in the table has sole voting and investment power
with respect to the shares set forth opposite his or her name.
<TABLE>
<C> <C> <C>
Name of Number of Shares
Beneficial Owner Beneficially Owned Percent of Class
---------------- ------------------ ----------------
Theo D. Baars 30,079(1) 6.26%(1)
Lamar B. Cobb 712 *
M. Warren Culbertson 40,595(1) 8.45%(1)
Fayette Dennison 109,660(2) 23.21%(2)
Grace B. Futch 26,148(1)(3) 5.44%(1)
Frank S. Hughes 10,000(4) 2.13%(4)
T. David Mann 14,182(1)(5) 2.95%(1)
G. H. Skipper, Jr. 2,500 *
</TABLE>
35
<PAGE>
<TABLE>
<C> <C> <C>
B. L. Stalnaker, M.D. 20,848(1)(6) 4.34%(1)
Frank E. Westmark 65,865(1)(7) 13.49%(1)
All directors and executive
officers as a group (13 persons) 312,741(8) 58.18%(8)
</TABLE>
- -----------------------
* Indicates less than 1%
(1) Includes 10,848 shares of Bank Common Stock that the individual named
currently has the right to acquire upon exercise of Bank Options.
(2) Includes 2,712 shares of Bank Common Stock that Mr. Dennison currently
has the right to acquire upon exercise of Bank Options.
(3) Includes 5,300 shares registered in the name of Ms. Futch and her
husband.
(4) Includes 500 shares registered in the name of Mr. Hughes and his wife.
(5) Includes 3,334 shares registered in the name of Mr. Mann and his wife.
Pursuant to an agreement with Frank E. Westmark, Mr. Mann is required
to transfer to Mr. Westmark 7,848 of the 10,848 shares of Bank Common
Stock that Mr. Mann currently has the right to receive upon exercise of
Bank Options and has agreed to exercise his Bank Options for those
7,848 shares at the direction of Mr. Westmark upon the payment by Mr.
Westmark to him of the exercise price therefor.
(6) Includes 10,000 shares registered in the name of Dr. Stalnaker and his
wife.
(7) Includes 16,255 shares registered in the name of Mr. Westmark and his
wife and 5,000 shares registered in the name of Mr. Westmark and his
mother. Also includes 7,848 shares of Bank Common Stock that Mr.
Westmark has the right to acquire pursuant to an agreement with T.
David Mann.
(8) Includes an aggregate of 67,800 shares of Bank Common Stock that
directors and executive officers currently have the right to acquire
upon exercise of Bank Options.
36
<PAGE>
THE BANK'S MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the consolidated
financial statements of the Bank and related Notes appearing elsewhere in this
Proxy Statement-Prospectus.
Review of Results of Operations -- For the Three Month Period Ended March 31,
1996 as Compared to the Three Month Period Ended March 31, 1995
Earnings Summary
The Bank reported net income of approximately $209,000 or $0.45 per
share for the three months ended March 31, 1996, compared to net income of
approximately $104,000 or $0.22 per share for the three months ended March 31,
1995.
Net income increased 101% in 1996 as compared to the comparable period
in 1995. The most significant factors affecting net income for the periods
mentioned are highlighted below.
- - An increase in average investment securities as a percentage of interest-
earning assets from 21.3% in 1995 to 52.3% in 1996.
- - An increase in the average rate on investment securities from 6.51% in 1995
to 6.95% in 1996.
- - Maintenance of high asset quality and reserve coverage ratios. Net
recoveries were approximately $4,000 and $51,000 in 1996 and 1995,
respectively.
- - In recognition of these net recoveries, the loan provisions made in the
three months ended March 31, 1996 and 1995 were $0 and $20,000,
respectively.
- - Annualized noninterest expenses as a percent of average assets were 1.7 %
in 1996 and 2.7% in 1995.
Net earnings for the three months ended March 31, 1996 resulted in an
annualized return on average assets of 1.34% compared to 1.03% in 1995. The
annualized return on average stockholders' equity was 17.49% in 1996 and 11.20%
in 1995.
Net Interest Income
Net interest income is the difference between interest and fees earned
on loans, securities and other interest-earning assets (interest income) and
interest paid on deposits (interest expense) and represents the principal source
of earnings for the Bank. Net interest income is affected by changes in the
volume of interest-earning assets and interest-bearing liabilities, and the
rates earned or paid thereon.
For the purposes of this earnings analysis, net interest income has
been adjusted to a fully taxable equivalent basis for certain investments
included in interest-earning assets. Interest-earning assets, including loans,
have been presented as averages, net of unearned income.
Net interest income on a fully tax equivalent basis for the three
months ended March 31, 1996 increased 39.1% to $534,000 from $384,000 for the
same period in 1995. The annualized net interest margins between
interest-earning assets and interest-bearing liabilities decreased to 2.68% for
the three months ended March 31, 1996 from 4.23% for the three months ended
March 31, 1995. The annualized net yield on interest-earning assets was 3.19% in
1996 compared to 3.67% in 1995. The net interest margin and net yield on
interest-earning assets are affected by several factors. Among them are Federal
Reserve Bank monetary policies, competitive pressures, and the composition of
interest-earning assets and interest-bearing liabilities. The annualized net
interest margins and the annualized net yields on interest-earning assets for
1996 and 1995 remained virtually consistent when considering the stabilization
of interest rates in 1995 and 1996.
37
<PAGE>
Interest income on a fully tax equivalent basis increased approximately
$407,000 to $1.17 million from $764,000 for the three months ended March 31,
1996 from the comparable period in 1995. This increase was attributable
primarily to the increase in the average interest-earning assets of 59.9% for
the period ended March 31, 1996 as compared to the period ended March 31, 1995.
The annualized yield on interest-earning assets for the three months ended March
31, 1996 and 1995 was 8.07% and 8.42%, respectively. The mix of interest-earning
assets relative to loans decreased from 68.6% for the three months ended March
31, 1995 to 45.0% for the three months ended March 31, 1996. The annualized
yield on average loans was 9.50% for the three months ended March 31, 1996
compared to 9.45% for the three months ended March 31, 1995. For the periods
ended March 31, 1996 and 1995, investment securities represented 52.3% and
21.3%, respectively, of average interest-earning assets. For the three months
ended March 31, 1996 and 1995, the annualized yield on investment securities on
a fully tax equivalent basis was 6.95% and 6.51%, respectively. Interest-earning
assets as a percentage of total average assets increased from 90.2% in 1995 to
93.1% in 1996.
Interest expense increased approximately $257,000 or 67.6% to
approximately $637,000 for the three months ended March 31, 1996, from
approximately $380,000 for the comparable 1995 period. The fluctuations in
interest expense from 1995 to 1996 were attributable to the increases in the
cost of funds, changes in the mix of interest-bearing liabilities, and increases
in the volume of interest-bearing liabilities. The annualized average rate paid
on interest-bearing liabilities was 4.88% and 4.75% for the three months ended
March 31, 1996 and 1995, respectively. During the three months ended March 31,
1996, the volume of interest-bearing liabilities averaged $52.2 million, or
63.1% higher than the $32.0 million average for the three months ended March 31,
1995. Interest-bearing demand deposits represented 58.1% of interest-bearing
liabilities during the 1996 period as compared to 41.0% during the period ended
March 31, 1995. The annualized yields paid on these deposits were 4.36% and
3.96% for the three months ended March 31, 1996 and 1995, respectively. Time
deposits represented 36.9% of interest-bearing liabilities during the 1996
period as compared to 47.7% during the period ended 1995. The annualized yields
paid on time deposits during the three months ended March 31, 1996 and 1995 were
6.00% and 5.88%, respectively.
Noninterest Income
The Bank derives a significant portion of its noninterest income from
traditional retail banking services including various account charges and
service fees.
Noninterest income from deposit accounts is significantly affected by
competitive pricing of these services and the volume of noninterest-bearing
accounts. Service charge income was $72,000 and $76,000 for the three months
ended March 31, 1996 and 1995, respectively. The decrease was primarily a result
of a reduction in overdraft charges for the three months ended March 31, 1996 as
compared to the three months ended March 31, 1995. The gains/losses realized on
the sale of investment securities were not significant for the three months
ended March 31, 1996 and 1995.
Noninterest Expense
Noninterest expense was $272,000 and $273,000 for the three months
ended March 31, 1996 and 1995, respectively. Annualized noninterest expense as a
percentage of average assets was 1.74% in 1996 and 2.71% in 1995. Salaries and
employee benefits amounted to $149,000 and $135,000 for the three months ended
March 31, 1996 and 1995, respectively. Occupancy expense was $31,000 in 1996 and
$30,000 in 1995. Other expense decreased $17,000 or 15.5% to $92,000 for the
three months ended March 31, 1996. Other expense for the three months ended
March 31, 1995 was $109,000.
Income Taxes
The provision for income taxes for the three months ended March 31,
1996 and 1995 was $124,000 and $62,000, respectively. The provision for income
taxes for the three months ended March 31, 1995 was a result of the recognition
of deferred tax expense due to a reduction in the federal and state net
operating loss carryforwards. As of March 31, 1996, all federal and state net
operating loss carryforwards have been used to offset taxable income. The Bank
is subject to federal and state taxes at combined rates of approximately 38%.
These rates are reduced or increased for certain nontaxable income or
nondeductible expenses.
38
<PAGE>
The Bank accounts for income taxes under Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes, which requires an
asset and liability approach for financial accounting and reporting for income
taxes.
Review of Financial Condition -- For the Period Ended March 31, 1996 as Compared
to the Period Ended March 31, 1995
Securities
Securities Held to Maturity: The Bank accounts for its investment
securities under Statement of Financial Accounting Standards No. 115, Accounting
for Certain Investments in Debt and Equity Securities. Securities held to
maturity are those securities that management has the ability and intent to hold
to maturity, and are reported at amortized cost. There were no securities
classified as held to maturity at March 31, 1996. Securities classified as held
to maturity amounted to $4,379,000 at March 31, 1995. Securities held to
maturity at March 31, 1995 consisted primarily of U.S. Treasury securities and
obligations of other U.S. Government agencies and corporations.
Securities Available for Sale: Securities available for sale represent
those securities that the Bank intends to hold for an indefinite period of time
or that may be sold in response to changes in interest rates, liquidity needs,
prepayment risk and other similar factors. These securities are recorded at
market value with unrealized gains or losses, net of any tax effect, reflected
as a component of shareholders' equity. Securities available for sale totaled
$26.4 million and $6.6 million at March 31, 1996 and 1995, respectively. This
increase was partially a result of a reclassification from securities held to
maturity of $4.1 million in December 1995. The reclassification was a result of
a one-time exemption granted by the Financial Accounting Standards Board. The
exemption permitted the movement of selected securities between classifications
without jeopardizing the classification of all securities. Net unrealized
appreciation (depreciation) on securities available for sale was $91,000 and
($71,000), net of taxes, at March 31, 1996 and 1995, respectively. Securities
available for sale consisted primarily of U.S. Treasury securities and
obligations of other U.S. Government agencies and corporations.
Using the carrying value at March 31, 1996, scheduled maturities for
securities available for sale were 3% of the total classification in one year or
less, 6% in one to five years, 52% in five to ten years, and 39% after ten
years.
Loans
Loans, net of unearned interest, increased $1.5 million or 6.1% to
$26.7 million at March 31, 1996 from $25.2 million for the comparable 1995
period. The allowance for loan losses was $339,000 and $365,000 as of March 31,
1996 and 1995, respectively. The most significant concentration of loans
consisted of those secured by real estate.
The Bank seeks to maintain adequate liquidity and minimize exposure to
interest rate volatility. Contractual maturities may vary significantly from
actual maturities due to loan extensions, early pay-offs due to refinancing or
other factors. Fluctuations in interest rates are also a major factor in early
loan pay-offs. The uncertainties, particularly with respect to interest rates,
of future events make it difficult to predict actual maturities. The Bank has
not maintained records related to trends of early-payoff since management does
not believe such trends would present any significantly more accurate estimate
of actual maturities than the contractual maturities.
Deposits
Total deposits increased $6.6 million or 14.0% to $53.7 million at
March 31, 1996 from $47.1 million for the comparable 1995 period. Time deposits
at March 31, 1996 and 1995 were $19.6 million and $16.4 million, respectively.
Time deposits represent 36.4% and 34.7% of total deposits at March 31, 1996 and
1995, respectively. Interest bearing demand deposits increased $3.2 million or
13.9% to $26.7 million for the period ended March 31, 1996 from $23.5 million
for the comparable period in 1995. Savings as a percentage of total deposits
decreased from 5.8% in 1995 to 4.7% in 1996. Savings totaled $2.5 million at
March 31, 1996 and $2.7 million at March 31, 1995. Demand deposits were $4.9
million and $4.5 million at March 31, 1996 and 1995, respectively.
39
<PAGE>
Review of Results of Operations - For the Fiscal Years Ended December 31, 1995,
1994 and 1993
Earnings Summary
The Bank reported net income of approximately $596,000 or $1.27 per
share for the year ended December 31, 1995, compared to net income of
approximately $778,000 or $1.66 per share for the year ended December 31, 1994.
Net income for 1993 was approximately $212,000 or $0.47 per share.
Net income decreased 23.4% in 1995, increased 266.1% and 18.8% in 1994
and 1993, respectively. The most significant factors affecting net income for
the periods mentioned are highlighted below.
- An increase in 1995 of 75.2% in average interest-earning assets. This
follows an increase of 4.8% increase in 1994.
- Average loan growth in 1995 of 11.5% following an increase of 17.0% in
1994.
- An increase in average investment securities as a percentage of average
interest-earning assets from 19.6% in
1994 to 45.3% in 1995.
- Maintenance of high asset quality and reserve coverage ratios. Net
recoveries were approximately $21,000 in 1995 while in 1994 net
charge-offs were approximately $84,000 or 0.38% of average net loans.
- In recognition of these low net charge-offs, loan provisions were
reduced $165,000 in 1994 and $115,000 in 1995.
- Noninterest expenses as a percent of average assets were reduced to
1.9% in 1995 from 3.2% in 1994. - Deferred tax expense of $319,000
in 1995 and deferred tax benefits of $188,000 in 1994 and $102,000 in
1993 were included in income as a result of the use of federal and
state net operating loss carryforwards. All available net operating
loss carryforwards were fully utilized in 1995.
Net earnings in 1995 resulted in a return on average assets of 1.04%
compared to 2.33% and 0.66% during 1994 and 1993, respectively. The return on
average stockholders equity was 14.7% in 1995, 24.5% in 1994, and 7.4% in 1993.
Net Interest Income
Net interest income is the difference between interest and fees earned
on loans, securities and other interest-earning assets (interest income) and
interest paid on deposits (interest expense) and represents the major component
of net income for the Bank. Net interest income is affected by changes in volume
of interest-earning assets and interest-bearing liabilities, and the rates
earned or paid thereon.
Net interest income on a fully tax equivalent basis increased 12.4% to
$1.77 million in 1995 from $1.57 million in 1994 and 12.9% in 1994 from $1.39
million in 1993. The net interest margin between interest-earning assets and
interest-bearing liabilities decreased to 3.33% for the year ended December 31,
1995 from 5.20% for the year ended December 31, 1994. The net interest margin in
1993 was 4.82%. The net yield on interest-earning assets was 2.87% in 1995
compared to 4.73% in 1994 and 4.48% in 1993. The net interest margin and net
yield on interest-earning assets are affected by several factors. Among them are
Federal Reserve Bank monetary policies, competitive pressures, and the
composition of interest-earning assets and interest-bearing liabilities. After
declining consistently from 1989 through 1992 and remaining virtually flat
throughout 1993, short-term interest rates increased dramatically in 1994 and
continued to increase into late 1995 before starting to decline. Net interest
margins remained virtually flat from 1993 to 1994, while increasing competitive
pressures resulted in an increase in cost of funds in 1995. This increase is
primarily responsible for the decrease in the net interest margin from 1994 to
1995.
Interest income on a fully tax equivalent basis increased approximately
$1.96 million to $4.40 million for the year ended December 31, 1995 from $ 2.44
million for the comparable period in 1994. Interest income on a fully equivalent
tax basis for 1993 was $2.26 million. These increases were attributable
primarily to the increases in the average interest-earning assets of 75.2% and
4.8% for the years ended December 31, 1995 and 1994, respectively, and the
increases in the yield on interest-earning assets. The yield on interest-earning
assets for the years ended December 31, 1995, 1994, and 1993 was 8.30%, 8.06%,
and 7.85%, respectively. The mix of interest-earning assets relative to
40
<PAGE>
loans decreased from 74.1% for the year ended December 31, 1994 to 47.1% for the
year ended December 31, 1995. The yield on average loans was 9.72% for the year
ended December 31, 1995 compared to 8.97% and 9.04% for the comparable periods
ended December 31, 1994 and 1993, respectively. For the year ended December 31,
1995, investment securities represented 45.6% of average interest-earning
assets. For the comparable 1994 and 1993 periods, investment securities
represented 20.1% and 21.6%, respectively, of average interest-earning assets.
For the years ended December 31, 1995, 1994, and 1993, the yield on investment
securities on a fully tax equivalent basis was 7.24%, 6.04%, and 6.92%,
respectively. Interest-earning assets as a percentage of total average assets
increased from 89.2% in 1993 to 90.6% in 1994 to 92.3% in 1995.
Interest expense increased approximately $1,765,000 or 203.8% to
approximately $2.63 million for the year ended December 31, 1995, from
approximately $866,000 for the comparable 1994 period. Interest expense for 1993
was $873,000. The fluctuations in interest expense from 1993 through 1995 were
attributable to the volatile interest rate environment, changes in the mix of
interest-bearing liabilities, and increases in the volume of interest-bearing
liabilities. The average rate paid on interest-bearing liabilities was 5.43%,
3.33%, and 3.37% for the years ended December 31, 1995, 1994 and 1993,
respectively. During the year ended December 31, 1995, the volume of
interest-bearing liabilities averaged $48.4 million, or 86.4% higher than the
$26.0 million average for the year ended December 31, 1994. The volume of
interest-bearing liabilities averaged $25.9 million in 1993. Interest-bearing
demand deposits represented 56.3% of interest-bearing liabilities for the year
ended December 31, 1995 as compared to 50.9% and 54.4% for the years ended
December 31, 1994 and 1993, respectively. The yields paid on these deposits were
5.19%, 2.80% and 2.88% for the years ended December 31, 1995, 1994, and 1993,
respectively. Time deposits represented 37.8% of interest-bearing liabilities
for the year ended December 31, 1995 as compared to 26.3% and 20.0% for the
years ended December 31, 1994 and 1993, respectively. The yields paid on time
deposits during the years ended December 31, 1995, 1994, and 1993 were 6.19%,
4.71% and 4.69%, respectively.
41
<PAGE>
AVERAGE BALANCES AND INTEREST RATES, INTEREST YIELD/RATES ON FULLY TAXABLE
EQUIVALENTS
(Table 1)
(In Thousands)
The following table details average balances of interest-earning assets and
interest-bearing liabilities, the fully taxable equivalent amount of interest
earned/paid thereon, and the fully taxable equivalent yield/rate for each of the
three years ended December 31, 1995.
<TABLE>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1995 1994 1993
------------------------------ ------------------------------- -------------------------------
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate Balance Interest Rate
Assets:
Interest-earning assets:
Loans, net of unearned income $ 24,944 $ 2,424 9.72% $ 22,376 $ 2,007 8.97% $ 19,125 $ 1,728 9.04%
Investment securities -
Taxable 23,988 1,732 7.22 5,925 352 5.94% 6,079 416 6.84
Nontaxable 149 15 10.07 150 15 10.00 150 15 10.00
Federal funds sold 3,855 225 5.84 1,114 42 3.77 2,321 68 2.93
Interest-bearing deposits - - - 645 20 3.10 1,156 37 3.20
Total interest-earning assets 52,936 $ 4,396 8.30% 30,210 $ 2,436 8.06% 28,831 $ 2,264 7.85%
Reserve for possible loan losses (348) (279) (395)
Other assets 4,739 3,411 3,886
Total assets $ 57,327 $ 33,342 $ 32,322
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Savings deposits $ 2,844 $ 83 2.92% $ 5,921 $ 174 2.94% $ 6,645 $ 226 3.40%
Interest-bearing demand
deposits 27,265 1,415 5.19 13,218 370 2.80 14,060 405 2.88
Time deposits 18,313 1,133 6.19 6,833 322 4.71 5,163 242 4.69
Total deposits 48,422 2,631 5.43 25,972 866 3.33 25,868 873 3.37
Total interest-bearing liabilities 48,422 2,631 5.43% 25,972 866 3.33% 25,868 873 3.37%
Demand deposits 4,427 3,989 3,368
Other liabilities 412 205 216
Total liabilities 53,261 30,166 29,452
Stockholders' equity 4,066 3,176 2,870
Total liabilities and
stockholders' equity $ 57,327 $ 33,342 $ 32,322
Net interest income $ 1,765 $ 1,570 $ 1,391
Net interest margin 3.33% 5.20% 4.82%
Net interest spread 2.87% 4.73% 4.48%
</TABLE>
42
<PAGE>
Reserve and Provision for Possible Loan Losses
The provision for possible loan losses was $20,000 in 1995, $135,000 in
1994, and $300,000 in 1993. Table 2, "Reserve for Possible Loan Losses",
summarizes information concerning the reserve for possible loan losses for the
three years ended December 31, 1995. Management's estimate of the reserve for
possible loan losses and the provision for possible loan losses is based on
evaluation of collectibility of loans, past loan loss experience, changes in the
nature and volume of the loan portfolio, current economic conditions that may
affect a borrower's ability to pay, review of specific problem loans, and the
relationship of the reserve for possible loan losses to outstanding loans.
Net recoveries for the year ended December 31, 1995 total $ 21,000. Net
charge-offs were $ 84,000 or 0.38% of average net loans in 1994, a decrease of $
346,000 from $ 429,000 or 2.24% of average net loans during 1993.
RESERVE FOR POSSIBLE LOAN LOSSES
(Table 2)
(In Thousands)
The following table summarizes information concerning the allowance for loan
losses:
<TABLE>
<C> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
-------- -------- -------- -------- ------
Net Loans Outstanding - Year End $ 25,988 $ 23,939 $ 22,533 $ 20,134 $19,854
Average Net Loans - During Year $ 24,944 $ 22,376 $ 19,125 $ 20,058 $19,129
Allowance for Loan Losses:
Balance - Beginning of Year $ 294 $ 243 $ 372 $ 250 $ 250
Provision Charged to Expense 20 135 300 115 112
Recoveries on Loans Previously
Charged Off 71 6 81 71 41
Loans Charged Off 50 90 510 64 153
Balance - End of Year $ 335 $ 294 $ 243 $ 372 $ 250
For the Period:
Net charge-offs (recoveries) as % of
average loans (0.08%) 0.38% 2.24% (0.03%) 0.59%
Provision for loan losses as a % of net
charge-offs (95.24%) 160.71% 69.93% (1,642.85%) 100.0%
Provision for loan losses as a % of net
average loans 0.08% 0.60% 1.57% 0.57% 0.59%
Period End:
Allowance as a % of net loans 1.29% 1.23% 1.08% 1.85% 1.26%
Allowance as a % of non-performing loans
and loans more than 90 days past due - 1,176.00% 58.41% 53.52% 51.02%
</TABLE>
43
<PAGE>
Noninterest Income
The Bank derives a significant portion of its noninterest income from
traditional retail banking services including various account charges and safe
deposit box rentals.
Noninterest income from deposit accounts is significantly affected by
competitive pricing of these services and the volume of various deposit
accounts. During 1995 and 1994, average noninterest demand accounts increased
11.0% and 18.4%, respectively. This increase in volume and increases in services
fee rates resulted in a 44.6% increase in service charge income in 1995 and a
6.0% increase in 1994. The gains realized on the sale of investment securities
were not significant in each of the three years.
Table 3, which follows, presents an analysis of the components of
noninterest income.
NONINTEREST INCOME
(Table 3)
(In Thousands)
The following table presents an analysis of noninterest income for 1995, 1994
and 1993 together with the amount and percent change form the prior year for
1995 and 1994:
<TABLE>
<C> <C> <C> <C> <C> <C> <C> <C>
Change from Prior Year
--------------------------------------------------
Year Ended 12/31 1995 1994
--------------------------- ----------------------- ------------------------
1995 1994 1993 Amount % Amount %
-------- ------- ------- ---------- ---------- ----------- -----------
Service charges and service fees on
deposit accounts $ 275 $ 191 $ 180 $ 84 43.98% $ 11 6.11%
Other income 15 20 21 (5) (25.00) (1) (4.76)
Loss on trading securities 0 0 0 -- -- -- --
Gain on investment securities 7 2 0 5 250.00 2 --
Total noninterest income $ 297 $ 213 $ 201 $ 84 39.44 $ 12 5.97
</TABLE>
Noninterest Expense
Noninterest expense was $1,087,000 in 1995, 3.2% higher than 1994.
Noninterest expense for the years ending December 31, 1994 and 1993 was
$1,053,000 and $1,176,000, respectively. Noninterest expense as a percentage of
average assets was 1.90% in 1995, 3.16% in 1994, and 3.64% in 1993. Salaries and
employee benefits increased $37,000 or 7.3% in 1995 and decreased $97,000 or
15.9% in 1994. Occupancy expense was $109,000 in 1995, $114,000 in 1994, and
$109,000 in 1993. Other expense increased $2,000 or 0.5% to $429,000 for the
year ended December 31, 1995 from $427,000 for the comparable 1994 period. Other
expenses for the year ended December 31, 1993 was $458,000.
44
<PAGE>
NONINTEREST EXPENSE
(Table 4)
(In Thousands)
The following table presents an analysis of noninterest expense for
1995, 1994 and 1993 together with the amount and percent change from the prior
year for 1995 and 1994:
<TABLE>
<C> <C> <C> <C> <C> <C> <C> <C>
Change from Prior Year
Year Ended 12/31 1995 1994
--------------------------- ----------------------- --------------------
1995 1994 1993 Amount % Amount %
-------- ------- ------- ---------- ---------- ----------- --------
Salaries and employee benefits $ 550 $ 512 $ 609 $ 38 7.42% $ (97) (15.93%)
Occupancy expense 109 114 109 (5) (4.39) 5 4.59
Equipment and data processing expense 122 94 109 28 29.79 (15) (13.76)
Regulatory insurance and fees 52 77 81 (25) (32.47) (4) (4.94)
Other expenses:
Advertising and promotion 28 10 19 18 180.00 (9) (47.37)
General insurance 20 23 28 (3) (13.04) (5) (17.86)
Other real estate expenses and charges 0 0 0 - - - -
Postage 18 16 18 2 12.50 (2) (11.11)
Professional fees 68 80 43 (12) (15.00) 37 86.05
Supplies 34 30 32 4 13.33 (2) (6.25)
Telephone 7 8 12 (1) (12.50) (4) (33.33)
Other 79 89 116 (10) (11.24) (27) (23.28)
Total other expenses 254 256 268 (2) (0.78) (12) (4.48)
Total noninterest expense $ 1,087 $ 1,053 $1,176 $ 34 3.23 $(123) (10.46)
</TABLE>
Income Taxes
The provision for income taxes for the year ended December 31, 1995 was
$355,000. The income tax benefit recognized in the years ended December 31, 1994
and 1993 was $188,000 and $102,000, respectively. The Bank is subject to federal
and state taxes at combined rates of approximately 38%. These rates are reduced
or increased for certain nontaxable income or nondeductible expenses.
Net operating loss carryforwards available at December 31, 1994 and
1993 were approximately $700,000 and $1,300,000, respectively. At December 31,
1995, all net operating loss carryforwards had been used to offset taxable
income for financial reporting purposes. Effective January 1, 1993, the Bank
adopted Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes, which requires an asset and liability approach for financial
accounting and reporting for income taxes. There was no cumulative effect on net
income for 1993 for the change in accounting principle.
Loans
Loans, net of unearned interest, increased $2.0 million or 8.6% to
$26.0 million at December 31, 1995 from $24.0 million for the comparable 1994
period. Loans, net of unearned interest, was $22.5 million at December 31, 1993.
The allowance for loan losses was $335,000 for 1995, $294,000 for 1994, and
$243,000 for 1993. The most significant concentration of loans consisted of
those secured by real estate.
45
<PAGE>
A summary of the loan portfolio at December 31, follows (in thousands):
<TABLE>
<C> <C> <C> <C>
1995 1994 1993
-------- -------- --------
Commercial $14,638 $13,566 $11,844
Real estate 6,405 5,322 4,828
Installment 4,023 4,456 3,800
Construction 936 644 148
Banker acceptances 0 0 1,992
Unearned income (14) (49) (79)
Total loans, net of unearned income $25,988 $23,939 $22,533
A summary of loan interest rate sensitivity at December 31, 1995 follows (in
thousands):
Fixed rate loan maturity:
Three months or less $ 2,951
Over three through twelve months 3,172
Over one through five years 11,072
Over five years 1,164
Variable rate loans repricing in three months or less 3,147
Variable rate loans repricing annually or more frequently, but less
frequently than quarterly 4,482
Total loans, net of unearned income $ 25,988
</TABLE>
Nonperforming Assets
Table 5, which follows, summarizes the Bank's nonperforming assets and
loans past due 90 days or more and accruing as of December 31 for the last three
years (in thousands).
NONPERFORMING ASSETS
(Table 5)
(In Thousands)
<TABLE>
<C> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
------ ------- ------- ------- ------
Nonaccrual loans $ -0- $ 25 $ 416 $ 695 $ 490
Other real estate owned 101 101 108 110 -0-
Accruing loans 90 days or
more past due -0- -0- -0- -0- -0-
Total nonperforming assets
and accruing loans 90 days
or more past due $ 101 $ 126 $ 524 $ 805 $ 490
Provision for loan losses $ 20 $ 135 $ 300 $ 115 $ 112
Net (Charge-offs) recoveries $ 21 $ (84) $ (429) $ (7) $ (112)
</TABLE>
46
<PAGE>
Investment Securities
Securities Held to Maturity: Effective January 1, 1994, the Bank
adopted Statement of Financial Accounting Standards No. 115, Accounting for
Certain Investments in Debt and Equity Securities. Securities held to maturity
are those securities that management has the ability and intent to hold to
maturity, and are reported at amortized cost. There were no securities
classified as held to maturity at December 31, 1995; however, at December 31,
1994, this classification amounted to $3.8 million. Securities held to maturity
at December 31, 1994 consisted primarily of U.S. Treasury securities and
obligations of other U.S. government agencies and corporations.
Prior to January 1, 1994, all investment securities were reported at
amortized cost. Investment securities were carried at $6.2 million at December
31, 1993.
Securities Available for Sale: Securities available for sale represent
those securities that the Bank intends to hold for an indefinite period of time
or that may be sold in response to changes in interest rates, liquidity needs,
prepayment risk and other similar factors. These securities are recorded at
market value with unrealized gains or losses, net of any tax effect, reflected
as a component of shareholders equity. Securities available for sale totaled
$29.8 million and $3.1 million at December 31, 1995 and 1994, respectively. This
increase was partially a result of a reclassification from securities held to
maturity of $4.1 million in December 1995. The reclassification was a result of
a one-time exemption granted by the Financial Accounting Standards Board. The
exemption permitted the movement of selected securities between classifications
without jeopardizing the classification of all securities. Net unrealized
appreciation (depreciation) on securities available for sale was $391,000 and
($97,000), net of taxes, at December 31, 1995 and 1994, respectively. Securities
available for sale consisted primarily of U.S. Treasury securities and
obligations of other U.S. government agencies and corporations.
Using the carrying value at December 31, 1995, scheduled maturities for
securities available for sale were 1% of total investments in one year or less,
7% in one to five years, 56% in five to ten years, and 36% over ten years.
INVESTMENT SECURITIES AVAILABLE FOR SALE
The amortized cost and approximate fair value of available-for-sale securities
at December 31, 1995 are summarized as follows:
<TABLE>
<C> <C> <C> <C> <C>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------ ----------- ---------- --------
December 31, 1995
U.S. Treasury Securities $ 535 $ 32 $ -0- $ 567
Obligations of U.S. Government agencies
and corporations 28,483 590 (8) 29,065
Other securities 150 12 -0- 162
Total Investment Securities
Available for Sale $ 29,168 $ 634 $ (8) $ 29,794
</TABLE>
47
<PAGE>
The amortized cost and approximate fair value of investment securities
available for sale at December 31, 1995, by contractual maturity, were as
follows:
Amortized Fair
Cost Value
----------- ---------
Due in one year or less $ 300 $ 304
Due from one to five years 2,102 2,121
Due from five to ten years 16,236 16,577
Due after ten years 10,530 10,792
Total $ 29,168 $ 29,794
The following is a summary of carrying values, yields and maturities on
U.S. Treasury and Mortgage-backed investment securities at December 31, 1995 (in
thousands):
Carrying
Value Yield
Fixed rate: -------- ------
U.S. Treasury:
Within one year $ - -
Over one through five years 567 7.02%
Obligations of U.S. Government agencies
and corporations:
Within one year 304 7.00%
Over one through five years 17,743 7.35%
Mortgage-backed securities 11,018 8.12%
Total $ 29,632
Carrying
Value
Variable rate: --------
U.S. Government agencies and corporations -0-
Mortgage-backed securities -0-
Total -0-
Deposits
Total deposits increased $28.4 million or 85.1% to $61.8 million at
December 31, 1995 from $33.4 million for the comparable 1994 period. Total
deposits at December 31, 1993 were $30.7 million. Time deposits at December 31,
1995, 1994, and 1993 were $19.1 million, $13.4 million, and $5.1 million,
respectively. Time deposits represented 30.9%, 40.0%, and 16.5% of total
deposits at December 31, 1995, 1994, and 1993, respectively. Interest bearing
demand deposits increased 199% in 1995 to $34.6 million while decreasing 11% in
1994 to $11.6 million. Savings as a percentage of total deposits decreased from
1993 through 1995. Savings totaled $2.8 million, $4.2 million, and $9.1 million
at December 31, 1995, 1994, and 1993, respectively. Demand deposits were $5.4
million, $4.2 million, and $3.5 million at December 31, 1995, 1994, and 1993,
respectively.
48
<PAGE>
A summary of the daily average balance of deposits follows (in thousands):
1995 1994 1993
-------- -------- ------
Noninterest bearing demand $ 4,427 $ 3,989 $ 3,368
Interest bearing demand 27,265 13,218 14,060
Savings 2,844 5,921 6,645
Time 18,313 6,833 5,163
Total $ 52,849 $ 29,961 $ 29,236
Maturities of time deposits of $ 100,000 or more at December 31, 1995 are as
follows (in thousands):
Three months or less $ 1,634
Over three through twelve months 2,689
Over one through five years 4,900
Total $ 9,223
Notes
Liquidity
No trends in the sources or uses of cash by the Bank are expected to have
an adverse impact on the Bank's liquidity position. Management believes that the
level of liquidity is sufficient to meet current and future liquidity
requirements. Liquidity is the ability of an organization to meet its financial
commitments and obligations on an timely basis. These commitments and
obligations include credit needs of customers, withdrawals by depositors, and
payment of operating expenses and dividends.
The Bank is also subject to capital maintenance requirements imposed by
regulatory authorities. The regulations require the Bank to meet specific
capital adequacy guidelines that involve quantitative measures of the Bank's
assets, liabilities, and certain off-balance-sheet items as calculated under
regulatory accounting practices. The Bank's capital classification is also
subject to qualitative judgments by the regulators about components, risk
weightings, and other factors. Management believes, as of December 31, 1995,
that the Bank meets all capital requirements to which it is subject.
Capital
The following table illustrates the Bank's capital ratios at December 31:
1995 1994
------- ------
Tier I risk based capital ratio 11.90% 13.20%
Tier II risk based capital ratio 12.88% 14.24%
Leverage ratio 6.55% 11.23%
49
<PAGE>
INFORMATION ABOUT WHITNEY
General
Whitney, a Louisiana corporation, is a multi-bank holding company
registered pursuant to the Bank Holding Company Act of 1956. It became an
operating entity in 1962 with Whitney National Bank ("Whitney Bank") as its only
significant subsidiary. Whitney Bank, a national banking association
headquartered in Orleans Parish, Louisiana, has been engaged in the general
banking business in the City of New Orleans continuously since 1883. Whitney
Bank currently offers banking and trust services through 58 branches located in
south Louisiana, including branches in the metropolitan areas of New Orleans
(including suburban Jefferson and St. Tammany Parishes), Baton Rouge, Lafayette
and Morgan City, and a foreign branch on Grand Cayman in the British West
Indies. In December 1994, Whitney established the Whitney Bank of Alabama, and
through this new, Alabama state-chartered banking subsidiary, became the first
Louisiana bank holding company to enter the Alabama market through its
acquisition of the Mobile area operations of The People Bank, Elba, Alabama on
February 17, 1995. Whitney Bank of Alabama currently operates eight branches and
one loan production office serving metropolitan Mobile, Alabama and the Alabama
Gulf Coast region.
Whitney Bank and Whitney Bank of Alabama (Whitney's two bank
subsidiaries) are full-service commercial banks engaged in commercial and retail
banking and in the trust business, including the taking of deposits, the making
of secured and unsecured loans, the financing of commercial transactions, the
delivery of corporate, pension and personal trust and investment services and
safe deposit rentals. Whitney Bank also issues credit cards and is active as a
correspondent for other banks.
During 1995, Whitney established Whitney Community Development
Corporation ("WCDC"), a for-profit community development corporation
incorporated under the laws of the State of Louisiana. WCDC is authorized to
make equity and debt investments in corporations or projects designed primarily
to promote community welfare, including the economic rehabilitation and
development of low-income areas by providing housing, services or jobs for
residents, or promoting small businesses that service low-income areas. The
initial capitalization of WCDC was $1,000,000.
WNB-Florida is a newly-formed, wholly-owned subsidiary of Whitney that
was organized under the National Banking Act to facilitate the Merger and the
Liberty Mergers. WNB-Florida will commence operations as a national bank
headquartered in Pensacola, Florida upon the first to occur of the Merger or the
Liberty Mergers. See "Unaudited Condensed Combined Pro Forma Financial
Statements."
At March 31, 1996, Whitney had consolidated total assets of
approximately $3.499 billion, consolidated total deposits of approximately
$2.768 billion and consolidated shareholders' equity of approximately $370
million. Whitney's principal executive offices are located at 228 St. Charles
Avenue, New Orleans, Louisiana 70130, and its telephone number is (504)
586-7117.
On April 23, 1996, Whitney and WNB-Florida signed a definitive
agreement to acquire Liberty Holding Company and its majority-owned subsidiary,
Liberty Bank, a Florida state-chartered bank doing business through its offices
in Pensacola and Century, Florida. Under the terms of that definitive agreement,
shareholders of Liberty Holding Company and the minority shareholders of Liberty
Bank will receive shares of Whitney Common Stock having an aggregate value of
approximately $14,140,000. See "Unaudited Pro Forma Condensed Combined
Financial Information." No assurance can be given that Whitney's proposed
acquisition of Liberty Holding Company and Liberty Bank will be consummated.
Whitney continues to explore opportunities to acquire financial
institutions as part of an expansion strategy that focuses on developing a
significant banking presence along the United States Gulf Coast from the
Texas-Louisiana border through the Florida panhandle. Discussions are
continually being carried on relating to such potential acquisitions. Whitney
may, after the date of this Proxy Statement-Prospectus, enter into one or more
acquisition agreements with one or more of such institutions; however, it is not
currently known whether Whitney's discussions will result in further
acquisitions or on what terms any such acquisitions would be made.
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Market Prices of and Dividends Declared on Whitney Common Stock
Whitney Common Stock is included for quotation in the NASDAQ National
Market System under the symbol "WTNY." The following table sets forth, for the
periods indicated the high and low reported closing sale prices per share of
Whitney Common Stock as reported on the NASDAQ National Market System and the
quarterly dividends declared for each such period.
Price Range of Common Stock and Quarterly Dividends
<TABLE>
<C> <C> <C> <C>
High Low Dividend
---- --- --------
1994
First Quarter.............................................. $24 $21 1/2 $0.15
Second Quarter............................................. 27 1/4 21 3/4 0.15
Third Quarter.............................................. 28 1/2 25 3/4 0.17
Fourth Quarter............................................. 27 21 0.17
1995
First Quarter.............................................. $25 3/4 $22 $0.20
Second Quarter............................................. 27 3/8 24 0.20
Third Quarter.............................................. 34 26 3/4 0.20
Fourth Quarter............................................. 31 1/2 29 3/4 0.22
1996
First Quarter............................................. $31 3/4 $29 3/4 $ 0.22
Second Quarter............................................. 31 3/4 29 3/4 0.25
Third Quarter..............................................
(through _________________, 1996)
</TABLE>
Incorporation of Certain Information about Whitney by Reference
The following documents, or the indicated portions thereof, have been
filed by Whitney with the Commission, and are incorporated by reference into
this Proxy Statement-Prospectus: Whitney's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 (the "1995 10-K"); Whitney's Form 10-K/A
(Amendment No. 1 to the 1995 10-K) filed with the Commission on July 3, 1996;
Whitney's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
1996; Whitney's Current Report on Form 8-K filed with the Commission on January
19, 1996 (the "Form 8-K"); Whitney's Current Report on Form 8-K filed with the
Commission on January 26, 1996; Whitney's Current Report on form 8-K filed with
the Commission on March 25, 1996 (the "Citizens 8-K"); Whitney's Form 8-K/A
(Amendment No. 1 to the Citizens 8-K) filed with the Commission on May 21, 1996;
and the description of Whitney Common Stock set forth in Whitney's Registration
Statement under the Exchange Act, as updated and modified in its entirety by the
Form 8-K (File No. 0-1026).
In addition, all other documents that will be filed by Whitney with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") between the date of this Proxy
Statement-Prospectus and the date of the Meetings shall be deemed to be
incorporated herein by reference from the date of filing. See "Available
Information" and "Incorporation of Certain Documents by Reference" for
information with respect to securing copies of documents incorporated by
reference in this Proxy Statement-Prospectus.
Any statement contained in a document incorporated or deemed to be
incorporated by reference shall be deemed to be modified or superseded to the
extent that a statement contained herein or in any other document subsequently
filed and incorporated or deemed to be incorporated by reference herein modifies
or supersedes such
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statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Proxy
Statement-Prospectus.
COMPARATIVE RIGHTS OF SHAREHOLDERS
If the shareholders of the Bank approve the Plan of Merger and the
Merger is subsequently consummated, all shareholders of the Bank, other than
those exercising dissenters' rights, will become shareholders of Whitney, and
their rights will be governed by and be subject to the Articles of Incorporation
and Bylaws of Whitney rather than the Articles of Incorporation and Bylaws of
the Bank. The following is a description of the Whitney Common Stock and a brief
summary of certain of the principal differences between the rights of
shareholders of Whitney and those of the Bank not described elsewhere herein.
Description of Whitney Common Stock
The authorized capital stock of Whitney consists of 40,000,000 shares
of Common Stock, no par value, of which ___________ were outstanding on
___________________, 1996. The following description of Whitney's capital stock
is qualified in its entirety by reference to Whitney's Articles of Incorporation
and By-laws and to the applicable provisions of the LBCL.
Common Stock
Voting Rights - Non-cumulative Voting. Holders of Whitney Common Stock
are entitled to one vote per share on all matters to be voted on by the
shareholders. Holders of Whitney Common Stock do not have cumulative voting
rights. As a result, the holders of more than 50% of the Whitney Common Stock
may elect all of the directors.
Dividend Rights. Holders of outstanding Whitney Common Stock are
entitled to receive such dividends, if any, as may be declared by the Board of
Directors, in its discretion, out of funds legally available therefor.
Liquidation Rights. In the event of the liquidation of Whitney, the
holders of Whitney Common Stock are entitled to receive pro rata any assets
distributable to shareholders in respect of their shares.
Preemptive Rights. Holders of Whitney Common Stock have no preemptive
rights to subscribe for additional shares of capital stock.
Directors
The Board of Directors of Whitney is divided into five classes, as
nearly equal in number as possible, with members of each class to serve for five
years, and with one class being elected each year. Directors of Whitney must
also be shareholders of Whitney. Any director of Whitney may be removed from
office with or without cause only by the affirmative vote of at least 90% of the
voting power of Whitney present at a special meeting of the shareholders called
for that purpose. The quorum requirement for such a meeting is 90% of the total
voting power of Whitney present in person or by proxy at a special meeting
called for that purpose.
The LBCL permits corporations to (i) include provisions in their
articles of incorporation that limit the personal liability of directors and
officers for monetary damages resulting from breaches of the duty of care,
subject to certain exceptions, and (ii) indemnify directors and officers, among
others, in certain circumstances for their expenses and liabilities incurred in
connection with defending pending or threatened suits. Whitney's Articles of
Incorporation include a provision that eliminates the personal liability of
directors and officers to Whitney and its shareholders for monetary damages
resulting from breaches of the duty of care to the full extent currently
permitted by the LBCL and further provides that any amendment or repeal of that
provision will not affect the elimination or limitation of liability of an
officer or director with respect to conduct occurring prior to the time of such
amendment or appeal.
The Articles of Incorporation also provide for indemnification and
advancement of expenses of any officer, director, employee or agent of Whitney
for any action taken in good faith by that officer, director, employee or agent.
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Indemnification in the case of actions by or in the right of Whitney shall be
limited to expenses actually and reasonably incurred in defense or settlement of
the action. The Board of Directors, in its discretion, may choose to provide
further indemnification to officers, directors, employees and agents of Whitney.
The Articles of Incorporation and By-laws authorize Whitney to maintain
insurance covering the actions of its officers, directors, employees and agents,
and its By-laws provide for indemnification to the fullest extent allowed under
the LBCL.
No amendment to Whitney's Articles may amend any of the provisions
thereof relating to the Board of Directors unless such amendment receives the
affirmative vote of 90% of the voting power present at a shareholders meeting
for which there is a quorum as described above; provided, however, that such 90%
vote is not required for any amendment unanimously recommended to the
shareholders by the Board of Directors at a time when there is no Related Person
(as defined below).
Supermajority and Fair Price Provisions
Supermajority Provisions. The Articles of Incorporation contain certain
provisions designed to provide safeguards for shareholders when a Related Person
(as defined below) attempts to effect a Business Combination (as defined below)
with Whitney. In general, a Business Combination between Whitney and a Related
Person must be approved by the affirmative vote of at least 90% of the voting
power of Whitney present at a shareholders meeting, at which meeting at least
90% of the total voting power of Whitney must be present in person or by proxy
to constitute a quorum, unless certain minimum price and procedural requirements
are satisfied and the Board of Directors of Whitney has the opportunity to state
its recommendations to the shareholders in a proxy statement. If these
requirements are satisfied, only the affirmative vote of two-thirds of the
voting power present or represented at a shareholders meeting of Whitney (the
quorum for which would be the presence in person or by proxy of a majority of
the total voting power of Whitney) would be required.
A "Related Person" is defined as any person who, together with certain
persons related to him or it, is the beneficial owner of 10% or more of the
outstanding shares of Whitney stock entitled to vote in elections of directors.
The term "beneficial owner" includes persons directly or indirectly owning or
having the right to acquire or vote the stock of Whitney.
A "Business Combination" includes the following transactions: (1) any
merger or consolidation involving Whitney or its principal subsidiary; (2) any
sale or lease by Whitney or its principal subsidiary of all or a substantial
part of its assets; or (3) any sale or lease to Whitney or any of its
subsidiaries of any assets of any Related Person in exchange for securities of
Whitney or its principal subsidiary.
Fair Price Provisions. There is no requirement that 90% of the voting
power present of Whitney approve a Business Combination between a Related Person
and Whitney if all of the requirements described below are satisfied:
(1) Minimum Price Requirement. The cash, or fair market value of other
consideration, to be received per share by shareholders of Whitney in connection
with the Business Combination must bear the same or a greater percentage
relationship to the market price of Whitney Common Stock immediately prior to
the announcement of such Business Combination as the highest per share price
(including brokerage commissions and soliciting dealers' fees) that the Related
Person has theretofore paid for any of the shares of Whitney Common Stock
already owned by it bears to the market price of the Whitney Common Stock
immediately prior to the commencement of the acquisition of Whitney Common Stock
by the Related Person. In addition, the cash, or fair market value of other
consideration, to be received per share by shareholders of Whitney in such
Business Combination must not be less than (i) the highest per share price
(including brokerage commissions and soliciting dealers' fees) paid by the
Related Person in acquiring any of its holdings of Whitney Common Stock and (ii)
the earnings per share of Whitney Common Stock for the four full consecutive
fiscal quarters immediately preceding the record date for solicitation of votes
on such Business Combination, multiplied by the then price/earnings multiple (if
any) of the Related Person as customarily computed and reported in the financial
community.
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(2) Procedural Requirements. The following procedural requirements must
be satisfied at all times after the Related Person becomes a Related Person: (i)
the Related Person shall have taken steps to ensure that Whitney's Board of
Directors included at all times representation by Continuing Directors (as
defined below) proportionate to the stockholdings of Whitney's shareholders not
affiliated with the Related Person; (ii) there shall have been no reduction in
the rate of dividends paid on the shares of Whitney Common Stock unless
otherwise approved by unanimous vote of the directors (iii) the Related Person
shall not have acquired any newly issued shares of Whitney stock, directly or
indirectly, except upon conversion of convertible securities acquired by it
prior to becoming a Related Person or as a result of a prorata stock dividend or
stock split; and (iv) the Related Person shall not have acquired any additional
shares of Whitney Common Stock or securities convertible into Whitney Common
Stock except as part of the transaction by which such Related Person became a
Related Person.
A "Continuing Director" includes a person who was a member of the Board
of Directors of Whitney elected by the shareholders prior to the time that a
Related Person acquired in excess of 10% of the stock of Whitney, or a person
recommended to succeed a Continuing Director by a majority of Continuing
Directors.
(3) Actions Prior to Becoming a Related Person. The Related Person
shall not have (i) received the benefit, directly or indirectly (except
proportionately as a shareholder), of any loans, advances, guarantees, pledges
or other financial assistance or tax credits provided by Whitney; or (ii) made
any major change in Whitney's business or equity capital structure without the
unanimous approval of the Board of Directors, in either case prior to the
consummation of the Business Combination.
(4) Proxy Statement. A proxy statement responsive to the requirements
of the Exchange Act shall be mailed to all shareholders of Whitney for the
purpose of soliciting shareholder approval of the Business Combination and shall
contain at the front thereof, in a prominent place, any recommendations as to
the advisability (or inadvisability) of the Business Combination that the
Continuing Directors, or any of them, may choose to state, and if deemed
advisable by a majority of the Continuing Directors, an opinion of a reputable
investment banking firm as to the fairness (or not) of the terms of such
Business Combination from the point of view of shareholders other than the
Related Person.
(5) Vote Necessary to Amend Articles of Incorporation. The Articles of
Incorporation provide that the affirmative vote of the holders of 90% or more of
the voting power present at a shareholders meeting for which there is a quorum
as described above is required in order to amend the fair price provisions,
provided that only a vote of the holders of a majority of the total voting power
of Whitney is required if the action to amend is unanimously recommended to
shareholders by the Board of Directors if all such directors are persons who
would be eligible to serve as Continuing Directors.
Purposes and Effect of Supermajority and Fair Price Provisions. The
fair price provisions are designed to prevent a purchaser from utilizing
two-tier pricing and similar inequitable tactics in the event of an attempted
takeover of Whitney. In the absence of the supermajority and fair price
provisions, a purchaser who acquired control of Whitney would be in a position,
by virtue of such control, to compel minority shareholders to accept a lower
price or a less desirable form of consideration than that given to other
shareholders.
The effect of the provisions is to encourage any Related Person or
potential Related Person interested in a Business Combination to negotiate the
terms of such transaction with the Board of Directors of Whitney prior to its
acquisition of a substantial amount of the capital stock of Whitney and in a
context that would provide adequate time and information so that all relevant
considerations would receive the requisite attention and, if necessary,
publicity. The Board of Directors of Whitney believes that the Continuing
Directors of Whitney are likely to be more knowledgeable than individual
shareholders in assessing the business and prospects of Whitney and are
accordingly better able to negotiate effectively with the Related Person. Also,
the provisions should help to protect those shareholders who by choice or for
lack of adequate opportunity did not sell shares in the first step of a
two-tiered offer, by ensuring that a fair price will be paid to the shareholders
in the second step of the two-tiered transaction if, but only if, the Related
Person elects to initiate a second step.
It should be noted, however, that tender offers are usually made at
premium prices above the prevailing market price of a company's stock. In
addition, acquisitions of stock by persons attempting to acquire control through
market
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purchases may cause the market price of the stock temporarily to reach levels
that are higher than would otherwise be the case. Because of the higher
percentage requirements for shareholder approval of any subsequent Business
Combination, and the possibility of having to pay a higher price to other
shareholders in such a Business Combination, it may become more costly for a
purchaser to acquire control of Whitney. The Articles of Incorporation may
discourage such purchases, particularly those for less than all of the shares of
Whitney, and may therefore deprive holders of the Whitney Common Stock of an
opportunity to sell their stock at a temporarily higher market price. A
potential purchaser of stock seeking to obtain control may also be discouraged
from purchasing stock because a supermajority shareholder vote would be required
in order to change or eliminate the fair price protection provisions in the
Articles of Incorporation.
Although the supermajority and fair price provisions are designed to
assure fair treatment of all shareholders in the event of a takeover, the
provisions may also adversely affect the ability of shareholders to benefit from
certain transactions that are opposed by the Board of Directors of Whitney.
In certain instances, the fair price provisions, while providing
objective pricing criteria, could be arbitrary and not indicative of value. In
addition, a Related Person may be unable, as a practical matter, to comply with
all of the procedural requirements of the Articles of Incorporation. In these
circumstances, a potential purchaser would be forced either to negotiate with
the Continuing Directors and offer terms acceptable to them or to abandon the
proposed Business Combination.
Under the fair price provisions, in certain circumstances, a Business
Combination that might be attractive to some shareholders might never be
proposed to the shareholders by a Related Person, or if proposed, might not be
consummated. Further, the provisions may, under certain circumstances, give
holders of a minority of the voting power a veto power over a Business
Combination that the majority of shareholders may believe desirable and
beneficial. To Whitney's knowledge, on __________________, 1996, directors and
executive officers of Whitney beneficially owned approximately _____________
shares (approximately ____%) of the Whitney Common Stock. Therefore, it may be
difficult or impossible for a Related Person to secure the necessary
supermajority vote without management's approval.
Since only the Continuing Directors will have the authority to avoid
the requirement of a supermajority shareholder vote to approve Business
Combinations if otherwise applicable, the provisions also may tend to insulate
management against the possibility of removal in the event of a takeover bid.
Further, if the Related Person were to replace all of the directors who were in
office on the date it became a Related Person (which it could not be assured of
accomplishing for at least four years because of the Board's classification),
there would be no Continuing Directors and, consequently, the 90% shareholder
vote requirement would apply to any Business Combination, unless the minimum
price and procedural requirements were satisfied.
Federal securities laws and regulations applicable to Business
Combinations govern the disclosure required to be made to minority shareholders
in order to consummate certain Business Combinations. However, the laws and
regulations do not assure that the terms of a Business Combination will be fair
from a financial standpoint. The LBCL provides that, under certain
circumstances, the affirmative vote of the holders of at least 80% of the voting
power of a Louisiana corporation is necessary in order to approve certain types
of business combinations with a related party unless the shareholders receive a
price for their shares as set forth in the LBCL and certain other conditions are
met. While the fair price protection provisions of the LBCL would apply to any
Business Combination involving Whitney and a Related Party, the Board of
Directors of Whitney believes that the fair price provisions in the Articles of
Incorporation provide additional assurance that the shareholders of Whitney will
receive an equitable price for their shares if a Business Combination is
consummated.
Considerations in Change of Control
The LBCL authorizes the Board of Directors of Whitney, when considering
any proposal to acquire control of Whitney, to take into account, among other
enumerated factors and any other factors the Board deems relevant, the interests
of Whitney's employees, creditors and the communities in which Whitney conducts
its business, as well as purely financial interests of Whitney's shareholders.
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Amendment of Articles of Incorporation
Except for the 90% vote required to amend any provision of the Articles
of Incorporation relating to the Board of Directors of Whitney or the
supermajority and fair price provisions contained therein, the affirmative vote
of at least a majority of the total voting power of Whitney (i.e., a majority of
the outstanding shares of Whitney Common Stock), at a meeting the quorum for
which is the presence in person or by proxy of a majority of the total voting
power, is required to amend the Articles of Incorporation. See " -- Directors"
and " -- Supermajority and Fair Price Provisions," above.
Amendment of By-laws
Whitney's By-Laws may be amended or repealed by the affirmative vote of
a majority of the Board of Directors of Whitney or by the affirmative vote of at
least a majority of the votes cast at a meeting of the shareholders of Whitney.
Shareholders Meetings
Shareholders holding not less than 20% of the outstanding Whitney
Common Stock may require Whitney to call a meeting of its shareholders.
Louisiana Control Share Acquisition Statute
The LBCL Control Share Acquisition Statute provides that any shares
acquired by a person or group (an "Acquiror") in an acquisition that causes such
person or group to have the power to direct the exercise of voting power in the
election of directors in excess of 20%, 33-1/3% or 50% thresholds shall have
only such voting power as shall be accorded by the holders of all shares other
than Interested Shares (as defined below) at a meeting called for the purpose of
considering the voting power to be accorded to shares held by the Acquiror.
"Interested Shares" include all shares as to which the Acquiror, any officer of
Whitney and any director of Whitney who is also an employee of Whitney may
exercise or direct the exercise of voting power. If a meeting of shareholders is
held to consider the voting rights to be accorded to an Acquiror and the
shareholders do not vote to accord voting rights to such shares, Whitney may
have the right to redeem the shares held by the Acquiror for their fair market
value.
Comparison of Whitney Common Stock and Bank Common Stock.
The following comparison of the rights of the holders of Whitney Common
Stock and Bank Common Stock is based on current terms of the governing documents
of the respective institutions and on the current provisions of the Louisiana
Business Corporation Law (the "LBCL"), applicable Florida corporate law,
including the Florida Business Corporation Act (the "FBCA"), and the Florida
Banking Code. Although the Whitney Common Stock is governed by applicable
provisions of the LBCL and the Bank Common Stock is governed by applicable
provisions of Florida corporate law and the Florida Banking Code, the rights of
holders of Whitney Common Stock and holders of Bank Common Stock are similar in
many respects. For example, with respect to both Whitney and the Bank: (a) each
shareholder is entitled to one vote for each share held on all matters submitted
to a vote of shareholders and neither is entitled to cumulative voting rights in
connection with the election of directors; (b) shareholders of each are entitled
to receive, pro rata, any assets distributed to the shareholders upon
liquidation, dissolution or a winding up of the affairs of Whitney or the Bank;
and (c) no shareholder is entitled to preemptive rights to subscribe for or
purchase any stock or other securities in proportion to their respective
holdings upon the offering or sale by Whitney or the Bank of such securities to
others. Although it is impracticable to note all of the differences between the
applicable governing documents of Whitney and the Bank, the following is
intended to be a summary of certain significant differences between the rights
of holders of Whitney Common Stock and the rights of holders of Bank Common
Stock.
Boards of Directors. Whitney's Articles of Incorporation provide for a
board of directors consisting of not less than five nor more than 25 members
divided into five classes, with directors serving five-year staggered terms
expiring for each class of directors at successive annual meetings of
shareholders. There is only one class of directors of the Bank, consisting of no
fewer than five members, and such directors are elected for one-year terms at
each annual
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meeting of shareholders. Directors of Whitney must also be shareholders of
Whitney. There is no requirement for directors of the Bank to own shares of Bank
Common Stock; however, at least a majority of the Bank's directors must be
citizens of the United States and at least three-fifths of the directors must
have resided in the State of Florida for at least one year preceding their
election and for as long as they remain in office. In addition, Florida law
requires at least one outside director of the Bank to have at least one year's
experience as an executive officer, regulator or director of a financial
institution within the last three years. Neither Whitney's governing documents
nor the LBCL have similar residency or experience requirements.
Removal of Directors. Whitney's Articles of Incorporation provide that
a director may be removed from office, with or without cause, only by the
affirmative vote of 90% of the voting power present at a special meeting of
shareholders called for that purpose at which a "quorum" is present. A "quorum"
for these purposes means the presence, in person or by proxy, of the holders of
90% of the total voting power of Whitney. The Bank's Articles and Bylaws do not
contain a similar provision and, under applicable Florida law, shareholders of
the Bank may remove directors, with or without cause, by the affirmative vote of
a majority of the shares present or represented at a duly convened special
meeting of shareholders called for that purpose. In addition, the Bank's Bylaws
state that any director who also serves as an officer or employee of the Bank
shall be considered terminated as a director without a vote of shareholders,
effective immediately upon his termination as an officer or employee; but, such
a director may be affirmatively reinstated by a majority of the Board of
Directors. Whitney's governing documents contain no similar requirement for
automatic termination.
Meetings of Shareholders. Under the LBCL, special meetings of Whitney's
shareholders may be called at any time by the President or the Board of
Directors, or upon the written consent of any shareholder or shareholders
holding in the aggregate one-fifth of the total voting power of Whitney. Except
as described above, a quorum for a regular or special meeting of Whitney's
shareholders is a majority of the outstanding shares of Whitney Common Stock
entitled to vote, and a majority of votes cast is generally required for action
by Whitney's shareholders at such a meeting. For certain actions, as described
above, a larger quorum and an absolute majority or supermajority vote may be
required for shareholder action at a meeting. See "- Description of Whitney
Common Stock," above.
Under the FBCA, special meetings of Bank shareholders may be called at
any time by a majority of the members of the Board of Directors or by persons
who hold not less than 10% of all votes entitled to be cast on any proposal to
be submitted at the meeting, and a quorum for any such meeting is a majority of
the outstanding shares of Bank Common Stock entitled to vote. Shareholder action
can be taken by the affirmative vote of a majority of the shares present or
represented at a meeting at which a quorum is present. The FBCA provides that
quorum and voting requirements may be changed only by an amendment to the Bank's
Articles of Incorporation, which requires approval of the Bank's shareholders.
Shareholder Action Without a Meeting. In accordance with the LBCL and
Whitney's Articles of Incorporation, Whitney's shareholders may act by written
consent only if it is unanimous. Under the FBCA, any action required or
permitted to be taken at an annual or special meeting of the shareholders of the
Bank may be taken without a meeting, without prior notice and without a vote, if
the action is taken by the holders of the outstanding stock Bank Common Stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares of Bank Common
Stock were present and voting. In order to be effective, such an action must be
evidenced by one or more written consents describing the action taken, dated and
signed by approving shareholders of the Bank having the requisite number of
votes.
Supermajority Vote Requirements. Whitney's Articles of Incorporation
contain supermajority voting requirements for certain business combinations. See
"- Description of Whitney Common Stock -- Supermajority and Fair Price
Provisions" and "-- Louisiana Control Share Acquisition Statute," above. Neither
the Bank's Articles of Incorporation nor applicable Florida law contain similar
provisions.
Transfer of Voting Rights. The Bank's Bylaws provide that any
shareholder may transfer the voting rights associated with the Bank Common Stock
owned by him by a signed written agreement acknowledged in the presence of a
notary public, and if such agreement is filed with the Secretary of the Bank at
or prior to the record date for a shareholders meeting, it will be recognized as
conclusive evidence of the right to vote the shares described therein, as
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if such shares were registered on the books of the Bank as of the record date,
in the name of the person to whom such voting rights are transferred by the
terms of the agreement. Under the LBCL, such a transfer of voting rights can be
effected only through the creation of a voting trust entered into in compliance
with applicable statutory procedures.
Special Voting Mechanics. The Bank's Bylaws provide that voting of
shares at a shareholders meeting shall be oral, but shall be by written ballot
if such vote is demanded by shareholders owning of record, in person or by
proxy, more than 20% of the Bank Common Stock entitled to vote. Neither
Whitney's governing documents nor the LBCL contain similar provisions requiring
oral votes at shareholders meetings.
Amendment of Articles and Bylaws. Whitney's Articles of Incorporation
may be amended by the vote of the holders of a majority of the outstanding
shares of Whitney Common Stock. Whitney's Bylaws may be made and altered by its
Board of Directors, subject to the power of the shareholders to change or repeal
any Bylaws so made.
Under Florida law applicable to the Bank, the Board of Directors of the
Bank must approve an amendment to the Articles for submission to shareholders
and, unless otherwise required by the Board of Directors, such amendment must be
approved at a shareholder meeting at which a quorum is present by the
affirmative vote of all of the outstanding shares entitled to vote on the
amendment. Notwithstanding the foregoing, under the Florida Banking Code, the
Bank cannot amend its Articles without receiving the written prior approval of
the Florida Department of Banking and Finance. The Bank's Bylaws may be amended
by its Board of Directors or by its shareholders; provided that the Bank's
shareholders have the power expressly to prohibit the Board of Directors from
amending or repealing specific Bylaw provisions or the Bylaws generally.
Inspection Rights. Any shareholder of Whitney, except a business
competitor, who has possessed at least 5% of the outstanding shares of Whitney
Common Stock for a minimum of six months has the right, upon five days' written
notice, to examine in person or by representative the books and records of
Whitney for any proper purpose. Two or more shareholders may aggregate their
holdings to reach the required 5% threshold. Business competitors, however, must
possess at least 25% of the outstanding shares of Whitney Common Stock for a
minimum of six months to obtain any such inspection rights.
Under the Florida Banking Code, the Bank is prohibited from permitting
any shareholder, other than a qualified director, officer or employee of the
Bank, to have access to, or to examine and inspect, any of the books or records
of the Bank other than its general statement of condition of its general assets
and liabilities, its quarterly reports of condition and quarterly reports of
income required to be submitted to the Office of the Comptroller of Florida,
Department of Banking and Finance, and a complete list of the Bank's
shareholders indicating the number of shares held by each.
Dividends and Other Distributions. Under the LBCL, Whitney may pay
dividends out of surplus, including both earned surplus and capital surplus, in
cash, property or shares of the corporation, except when the corporation is
insolvent or would thereby be made insolvent or when the declaration or payment
thereof would be contrary to any restrictions contained in Whitney's Articles of
Incorporation. In the absence of surplus, Whitney may pay dividends out of its
net profits for the then current or the preceding fiscal year, or both, unless
at the time, or as a result of such dividends, liabilities exceed assets or
Whitney's net assets are less than the amount payable upon liquidation to any
class of securities with a preferential right to participate in assets in the
event of liquidation. The payment of dividends by a bank holding company such as
Whitney is also subject to certain regulatory constraints.
The payment of dividends or distributions by the Bank is subject to the
restrictions of the FCBA and the Florida Banking Code. Under the FCBA, a
corporation may not generally authorize and make distributions if, after giving
effect thereto, it would be unable to meet its debts as they become due in the
usual course of business or if the corporation's total assets would be less than
its sum of total liabilities plus the amount that would be needed, if it were to
be dissolved at the time of distribution, to satisfy preferential rights of
shareholders whose preferential rights are superior to those receiving the
dividend or other distribution. Further, under the Florida Banking Code, a bank
may declare dividends from its net profits for the current period plus the prior
two years, unless approval of certain variances are received from the Florida
Department of Banking and Finance. No dividends may be declared at any time at
which the Bank's net
58
<PAGE>
income from the current year plus the prior two years is a loss, nor may any
dividends be declared that would cause the Bank's capital accounts to fall below
minimum requirements.
LEGAL MATTERS
Milling, Benson, Woodward, Hillyer, Pierson & Miller, L.L.P., New
Orleans, Louisiana, has rendered its opinion that the shares of Whitney Common
Stock to be issued in connection with the Merger have been duly authorized and,
if and when issued pursuant to the terms of the Plan of Merger, will be validly
issued, fully paid and non-assessable.
EXPERTS
The financial statements of the Bank at December 31, 1995 and 1994, and
for each of the three years in the period ended December 31, 1995, included in
this Proxy Statement-Prospectus have been audited by Saltmarsh, Cleaveland &
Gund, independent auditors, as set forth in their report appearing elsewhere
herein, and included in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
The consolidated financial statements of Whitney and its subsidiaries
as of December 31, 1995 and 1994 and for each of the three years in the period
ended December 31, 1995 incorporated by reference in this Proxy Statement-
Prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and have been so
incorporated by reference in reliance upon the authority of such firm as experts
in accounting and auditing in giving such report.
OTHER MATTERS
At the time of the preparation of this Proxy Statement-Prospectus, the
Bank had not been informed of any matters to be presented by or on behalf of the
Bank or its management for action at the Meeting other than those listed in the
Notice of Special Meeting of Shareholders and referred to herein. If any other
matters properly come before the Meeting or any adjournments thereof, the
persons named in the enclosed proxy will vote on such matters according to their
best judgment.
Shareholders are urged to sign the appropriate enclosed proxy, which is
solicited on behalf of the Board of Directors of the Bank, and return it at once
in the enclosed envelope.
BY ORDER OF THE BOARD OF DIRECTORS
OF THE BANK
Frank E. Westmark
Chairman of the Board
_________________, 1996
59
<PAGE>
AMERICAN BANK AND TRUST
PENSACOLA, FLORIDA
FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1996 AND 1995
CONTENTS
PAGE
Statements of Financial Condition F-2
Statements of Income F-3
Statements of Changes in Stockholders' Equity F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6
F-1
<PAGE>
AMERICAN BANK AND TRUST
STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
MARCH 31, 1996 AND 1995
ASSETS
<TABLE>
<C> <C> <C>
1996 1995
-------------- ---------
Cash and due from banks $ 1,545,782 $ 4,381,822
Federal funds sold 1,840,000 8,250,000
Securities held to maturity -0- 4,379,091
Securities available for sale 26,447,570 6,632,049
Loans receivable, net of allowance for loan losses
of $ 338,805 in 1996 and $ 364,874 in 1995 26,368,448 24,808,619
Accrued interest receivable 667,981 341,166
Foreclosed real estate 100,920 100,920
Property and equipment 1,751,164 1,773,454
Other assets 25,875 54,333
Deferred income taxes -0- 310,407
------------ -----------
Total Assets $58,747,740 $51,031,861
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits $ 4,896,876 $ 4,513,312
NOW and money market deposits 26,726,888 23,463,752
Savings deposits 2,506,523 2,747,719
Other time deposits 19,558,321 16,356,645
----------- -----------
Total deposits 53,688,608 47,081,428
Accrued interest and other liabilities 322,354 239,076
Income taxes payable 119,017 -0-
Deferred income taxes 42,816 -0-
------------- ------------
Total liabilities 54,172,795 47,320,504
----------- -----------
Commitments and Contingencies - -
Stockholders' Equity:
Common stock, $ 2.50 par value; 1,000,000 shares
authorized, 469,700 shares issued and outstanding 1,174,250 1,174,250
Surplus 3,425,180 3,425,180
Accumulated deficit (115,430) (816,747)
Net unrealized appreciation (depreciation) on available-for-sale
securities, net of taxes of $ 53,960 in 1996 and
$ 43,162 in 1995 90,945 (71,326)
------------- --------------
Total stockholders' equity 4,574,945 3,711,357
------------- --------------
Total Liabilities and Stockholders' Equity $58,747,740 $51,031,861
=========== ===========
</TABLE>
See accompanying notes
F-2
<PAGE>
AMERICAN BANK AND TRUST
STATEMENTS OF INCOME
(UNAUDITED)
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1996 AND 1995
<TABLE>
<C> <C> <C>
1996 1995
----------- -----------
Interest Income:
Loans receivable and fees on loans $ 621,036 $ 587,943
Investment securities 527,369 124,767
Federal funds sold 21,590 49,816
----------- -----------
Total interest income 1,169,995 762,526
Interest Expense on Deposits 637,922 379,637
----------- -----------
Net interest income 532,073 382,889
Provision for Loan Losses -0- 20,000
Net interest income after provision for loan losses 532,073 362,889
------------ -----------
Noninterest Income:
Service charges 61,639 71,509
Other 10,441 4,779
------------- ------------
Total noninterest income 72,080 76,288
------------- -----------
Noninterest Expenses:
Salaries and employee benefits 149,128 134,887
Occupancy expense 30,709 29,503
Other 91,723 108,539
------------ -----------
Total noninterest expenses 271,560 272,929
----------- ----------
Income Before Income Taxes 332,593 166,248
Income Taxes 123,539 62,364
----------- -----------
Net Income $ 209,054 $ 103,884
=========== ===========
Net Income Per Share of Common Stock (note 2) $0.45 $0.22
=========== ===========
</TABLE>
See accompanying notes
F-3
<PAGE>
AMERICAN BANK AND TRUST
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1996 AND 1995
<TABLE>
<C> <C> <C> <C> <C> <C>
Net
Unrealized
Appreciation
(Depreciation)
On Available- Total
Common Accumulated For-Sale Stockholders'
Stock Surplus Deficit Securities Equity
----------- ------------ -------------- -------------- -------------
Balance, January 1, 1995 $ 1,174,250 $ 3,425,180 $ (920,631) $ (97,020) $ 3,581,779
Net income 103,884 103,884
Change in unrealized appreciation
on available-for-sale securities,
net of taxes of $ 15,548 25,694 25,694
----------- ----------- ----------- ----------- -----------
Balance, March 31, 1995 $1,174,250 $3,425,180 $(816,747) $(71,326) $3,711,357
=========== =========== =========== =========== ===========
Balance, January 1, 1996 $1,174,250 $3,425,180 $(324,484) $391,427 $4,666,373
Net income 209,054 209,054
Change in unrealized depreciation
on available-for-sale securities,
net of taxes of $ 181,166 (300,482) (300,482)
----------- ----------- ----------- ----------- -----------
Balance, March 31, 1996 $1,174,250 $3,425,180 $(115,430) $ 90,945 $4,574,945
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes
F-4
<PAGE>
AMERICAN BANK AND TRUST
STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 1996 AND 1995
<TABLE>
<C> <C> <C>
1996 1995
------------ -------------
Cash Flows From Operating Activities:
Net income $ 209,054 $ 103,884
Adjustments to reconcile net income to net
cash provided by operating activities -
Depreciation 25,410 22,094
Provision for loan losses -0- 20,000
Deferred income taxes -0- 62,364
Gain on sale of available-for-sale securities (3,897) -0-
Net accretion/amortization on securities 13,827 (4,175)
Change in operating assets and liabilities -
Decrease (increase) in accrued interest receivable and
other assets 26,023 (79,285)
(Decrease) increase in accrued interest and other liabilities (42,347) 11,867
Increase in income taxes payable 89,118 -0-
------------ ------------
Net cash provided by operating activities 317,188 136,749
------------ ------------
Cash Flows From Investing Activities:
Proceeds from sales and maturities of available-for-sale securities 4,534,260 -0-
Principal reductions received on held-to-maturity securities -0- 208,245
Principal reductions received on available-for-sale securities 1,265,294 280,711
Purchases of held-to-maturity securities -0- (808,102)
Purchases of available-for-sale securities (2,944,566) (3,786,280)
Net increase in loans (715,917) (1,183,091)
Purchases of property and equipment (17,087) -0-
------------ ------------
Net cash provided by (used in) investing activities 2,121,984 (5,288,517)
------------ ------------
Cash Flows From Financing Activities:
Net (decrease) increase in demand, NOW, money market
and savings deposits (8,616,451) 10,683,117
Net increase in other time deposits 457,782 2,986,805
------------ ------------
Net cash (used in) provided by financing activities (8,158,669) 13,669,922
------------ ------------
Net (Decrease) Increase in Cash and Cash Equivalents (5,719,497) 8,518,154
Cash and Cash Equivalents, January 1 9,105,279 4,113,668
------------ ------------
Cash and Cash Equivalents, March 31 $ 3,385,782 $12,631,822
============ ============
Supplemental Disclosure of Cash Flow Information:
Interest paid $ 651,021 $ 316,464
============ ============
Income taxes paid $ 34,385 $ -0-
============ ============
</TABLE>
See accompanying notes
F-5
<PAGE>
AMERICAN BANK AND TRUST
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 1996 AND 1995
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-QSB and Item
310(b) of Regulation S-B. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurrring accruals)
considered necessary for a fair presentation have been included.
Operating results for the three-month periods ended March 31, 1996 and
1995 are not necessarily indicative of the results that may be expected
for the years ended December 31, 1996 and 1995. For further
information, refer to the financial statements and footnotes thereto
included in this Proxy Statement- Prospectus.
NOTE 2 - NET INCOME PER SHARE OF COMMON STOCK
Net income per share of common stock is computed on the basis of the
number of shares of common stock outstanding. In computing net income
per share of common stock, no consideration was given to the stock
options outstanding as described in Note 3 as the options are
considered anti-dilutive.
NOTE 3- STOCK OPTIONS
Effective January 31, 1994, eight Directors of the Bank were granted
options to purchase 2,712 shares of stock for each year of service as a
board member, within the period beginning December 31, 1989, and
concluding on December 31, 1992. The option price is $ 6.52 per share
with a total of 75,936 shares offered. All options under the plan
expire ten years from January 31, 1994. No options were exercised as of
March 31, 1996 or March 31, 1995.
NOTE 4 - CHANGE IN OWNERSHIP
In April 1996, the Bank entered into a agreement and plan of merger,
(the "agreement") with Whitney Holding Company, ("Whitney"), a
Louisiana corporation. The agreement calls for the acquisition of the
Bank's stock by Whitney through the exchange of each parties common
stock. The acquisition is expected to be finalized in 1996.
F-6
<PAGE>
AMERICAN BANK AND TRUST
PENSACOLA, FLORIDA
FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
CONTENTS
PAGE
Independent Auditor's Report F-8
Statements of Financial Condition F-9
Statements of Income F-10
Statements of Changes in Stockholdes' Equity F-11
Statements of Cash Flows F-12
Notes to Financial Statements F-13
F-7
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
American Bank and Trust
Pensacola, Florida
We have audited the accompanying statements of financial condition of American
Bank and Trust as of December 31, 1995 and 1994, (as restated), and the related
statements of income, changes in stockholders' equity, and cash flows for each
of the three years in the periods ended December 31, 1995. These financial
statements are the responsibility of the Bank's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of American Bank and Trust as of
December 31, 1995 and 1994, (as restated), and the results of its operations and
its cash flows for each of the three years in the periods ended December 31,
1995, in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, the Bank changed its method
of accounting for investments in 1994 and income taxes in 1993.
SALTMARSH, CLEAVELAND & GUND
Pensacola, Florida
March 1, 1996
F-8
<PAGE>
AMERICAN BANK AND TRUST
STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1995 AND 1994
ASSETS
<TABLE>
<C> <C> <C>
(Restated)
1995 1994
---------------- -------------
Cash and due from banks $ 4,003,279 $ 1,863,668
Federal funds sold 5,102,000 2,250,000
Securities held to maturity (notes 1 and 2) -0- 3,779,234
Securities available for sale (notes 1 and 2) 29,794,136 3,081,063
Loans receivable, net of allowance for loan losses
of $ 334,901 in 1995 and $ 293,923 in 1994 (notes 1 and 3) 25,652,531 23,645,528
Accrued interest receivable 702,049 307,857
Foreclosed real estate (note 1) 100,920 100,920
Property and equipment (notes 1 and 4) 1,759,487 1,795,548
Deferred income taxes (notes 1 and 5) -0- 388,319
Other assets 17,830 8,357
--------------- --------------
Total Assets $67,132,232 $37,220,494
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits $ 5,367,030 $ 4,249,112
NOW and money market deposits 34,584,382 11,554,624
Savings deposits 2,795,326 4,237,930
Other time deposits 19,100,539 13,369,840
------------ ------------
Total deposits 61,847,277 33,411,506
Accrued interest and other liabilities 364,701 227,209
Income taxes payable 29,899 -0-
Deferred income taxes (notes 1 and 5) 223,982 -0-
------------- ------------
Total liabilities 62,465,859 33,638,715
------------ ------------
Commitments and Contingencies (note 8) - -
Stockholders' Equity:
Common stock, $ 2.50 par value; 1,000,000 shares
authorized, 469,700 shares issued and outstanding 1,174,250 1,174,250
Surplus 3,425,180 3,425,180
Accumulated deficit (324,484) (920,631)
Net unrealized appreciation (depreciation) on available-for-sale
securities, net of taxes of $ 234,856 in 1995 and
$ 58,710 in 1994 (note 1) 391,427 (97,020)
-------------- -------------
Total stockholders' equity (note 6) 4,666,373 3,581,779
------------- -------------
Total Liabilities and Stockholders' Equity $67,132,232 $37,220,494
============ =============
</TABLE>
The accompanying notes are an integral
part of these financial statements
F-9
<PAGE>
AMERICAN BANK AND TRUST
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<C> <C> <C>
1995 1994 1993
-------------- -------------- -----------
Interest Income:
Loans receivable and fees on loans $2,424,219 $2,007,449 $1,728,137
Investment securities 1,739,618 362,082 425,684
Federal funds sold 225,172 42,093 68,542
Deposits with banks 1,938 19,621 36,781
-------------- ----------- -------------
Total interest income 4,390,947 2,431,245 2,259,144
Interest Expense on Deposits 2,630,522 866,326 872,931
------------ ----------- ------------
Net interest income 1,760,425 1,564,919 1,386,213
Provision for Loan Losses (notes 1 and 3) 20,000 135,000 300,469
------------- ----------- ------------
Net interest income after provision for loan losses 1,740,425 1,429,919 1,085,744
----------- ----------- -----------
Noninterest Income:
Service charges 275,499 190,558 179,811
Other 21,840 22,617 21,300
------------ ----------- -------------
Total noninterest income 297,339 213,175 201,111
------------ ----------- ------------
Noninterest Expenses:
Salaries and employee benefits 549,606 512,315 609,002
Occupancy expense 108,819 113,550 108,958
Other 428,558 427,055 458,419
----------- ----------- -----------
Total noninterest expenses 1,086,983 1,052,920 1,176,379
----------- ----------- -----------
Income Before Income Taxes 950,781 590,174 110,476
Income Taxes (Benefit) (notes 1 and 5) 354,634 (187,672) (102,000)
------------ ----------- -----------
Net Income $ 596,147 $ 777,846 $ 212,476
=========== =========== ===========
Net Income Per Share of Common Stock (note 1) $1.27 $1.66 $.47
=========== =========== ===========
</TABLE>
The accompanying notes are an integral
part of these financial statements
F-10
<PAGE>
AMERICAN BANK AND TRUST
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<C> <C> <C> <C> <C> <C>
Net
Unrealized
(Depreciation)
On Available- Total
Common Accumulated For-Sale Stockholders'
Stock Surplus Deficit Securities Equity
----------- ---------- ------------- ------------ ------------
Balance, December 31, 1992
as previously reported $1,136,750 $3,425,180 $(1,844,959) $ - $2,716,971
Prior period adjustment (note 6) (65,994) (65,994)
----------- ----------- -------------- ----------- ------------
Balance, January 1, 1993 $ 1,136,750 $3,425,180 $(1,910,953) $ - $2,650,977
Net income 212,476 212,476
----------- ----------- ------------- ----------- ------------
Balance, December 31, 1993 1,136,750 3,425,180 (1,698,477) - 2,863,453
Adjustment to beginning balance
for change in accounting principle,
net of taxes of $ 24,306 40,167 40,167
Net income 777,846 777,846
Exercise of stock options (note 7) 37,500 37,500
Change in unrealized depreciation
on available-for-sale securities,
net of taxes of $ 83,016 (137,187) (137,187)
----------- ----------- ------------ ----------- ------------
Balance, December 31, 1994 1,174,250 3,425,180 (920,631) (97,020) 3,581,779
Net income 596,147 596,147
Change in unrealized depreciation
on available-for-sale securities,
net of taxes of $ 293,566 488,447 488,447
----------- ----------- ------------ ----------- ------------
Balance, December 31, 1995 $ 1,174,250 $ 3,425,180 $ (324,484) $ 391,427 $4,666,373
=========== =========== ============ =========== ===========
</TABLE>
The accompanying notes are an integral
part of these financial statements
F-11
<PAGE>
AMERICAN BANK AND TRUST
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<C> <C> <C> <C>
1995 1994 1993
-------------- ------------- -------------
Cash Flows From Operating Activities:
Net income $ 596,147 $ 777,846 $ 212,476
Adjustments to reconcile net income to net
cash provided by operating activities -
Depreciation 62,922 64,163 67,997
Provision for loan losses 20,000 135,000 300,469
Write down of foreclosed real estate -0- 7,403 -0-
Gain on sale of available-for-sale securities (6,593) (2,457) -0-
Net amortization on securities 47,215 8,341 13,062
Deferred tax expense (benefit) 318,735 (187,672) (102,000)
Change in operating assets and liabilities -
(Increase) decrease in accrued interest receivable
and other assets (403,665) (22,013) 51,050
Decrease in foreclosed real estate -0- -0- 1,677
Increase (decrease) in accrued interest and other liabilities 137,492 106,473 (72,769)
Increase in income taxes payable 29,899 -0- -0-
-------------- -------------- -------------
Net cash provided by operating activities 802,152 887,084 471,962
-------------- ------------- -------------
Cash Flows From Investing Activities:
Proceeds from maturities of available-for-sale securities 1,300,000 -0- -
Proceeds from maturities of held-to-maturity securities 500,000 500,000 -
Proceeds from sales of available-for-sale securities 3,262,188 515,000 -
Principal reductions received on held-to-maturity securities -0- 186,083 -
Principal reductions received on available-for-sale securities 1,859,707 180,023 -
Purchases of held-to-maturity securities (809,934) (312,663) -
Purchases of available-for-sale securities (28,304,409) (1,854,179) -
Proceeds from sales, maturities, and principal reductions
of investment securities -0- -0- 3,462,071
Purchases of investment securities -0- -0- (3,266,922)
Net increase in loans (2,027,003) (1,490,056) (2,828,649)
Purchases of property and equipment (26,861) (20,655) (18,426)
-------------- ------------- -------------
Net cash used in investing activities (24,246,312) (2,296,447) (2,651,926)
-------------- ------------- -------------
Cash Flows From Financing Activities:
Net increase (decrease) in demand, NOW, money market
and savings deposits 22,705,072 (5,550,200) 606,677
Net increase in other time deposits 5,730,699 8,189,695 274,031
Proceeds from issuance of common stock -0- 37,500 -0-
----------------- ------------- ----------------
Net cash provided by financing activities 28,435,771 2,676,995 880,708
-------------- ------------- -------------
Net Increase (Decrease) in Cash and Cash Equivalents 4,991,611 1,267,632 (1,299,256)
Cash and Cash Equivalents at Beginning of Year 4,113,668 2,846,036 4,145,292
-------------- ------------- -------------
Cash and Cash Equivalents at End of Year $ 9,105,279 $ 4,113,668 $ 2,846,036
============== ============= =============
Supplemental Disclosure of Cash Flow Information:
Interest paid on deposits $ 2,493,208 $ 846,126 $ 957,134
============== ============= =============
</TABLE>
The accompanying notes are an integral
part of these financial statements
F-12
<PAGE>
AMERICAN BANK AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity:
American Bank and Trust (the "Bank") is a banking corporation organized
in 1986 under the laws of the State of Florida, and is located in
Escambia County, Florida. The Bank's financial services consist of
deposit and lending activities, provided through a single, main office.
Accounting Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ
from those estimates.
Cash Equivalents:
For purposes of reporting cash flows, cash and cash equivalents include
cash on hand, amounts due from banks, and federal funds sold.
Generally, federal funds are sold for one-day periods.
Investment Securities:
Effective January 1, 1994, the Bank adopted Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities ("SFAS 115"). In accordance with SFAS 115,
financial statements for the prior period have not been restated.
Investment securities that management has the ability and intent to
hold to maturity are classified as held-to-maturity and reported at
cost, adjusted for amortization of premiums and accretion of discounts
using methods approximating the interest method. Other investment
securities are classified as available-for-sale and reported at fair
value. Unrealized holding gains and losses, net of tax, on
available-for-sale securities are reported as a net amount in a
separate component of stockholders' equity until realized. The Bank had
no investments classified as held-to-maturity at December 31, 1995.
Gains or losses on the sale of securities are determined using the
specific identification method.
Loans Receivable:
Loans are stated at the amount of unpaid principal, reduced by unearned
discount on installment loans and an allowance for loan losses.
Unearned discount is recognized as income over the terms of the loans.
Interest on loans is calculated by using the simple interest method on
daily balances of the principal amount outstanding.
The allowance for loan losses is established through a provision for
loan losses charged to expense. Loans are charged against the allowance
for loan losses when management believes that the collectibility of the
principal is unlikely. The allowance is an amount that management
believes will be adequate to absorb possible losses on existing loans
that may become uncollectible, based on evaluations of the
collectibility of loans and prior loan loss experience. The evaluations
take into consideration such factors as changes in the nature and
volume of the loan portfolio, overall portfolio quality, review of
specific problem loans, and current economic conditions that may affect
the borrowers' ability to pay.
F-13
<PAGE>
AMERICAN BANK AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Effective January 1, 1995, the Bank adopted Statement of Financial
Accounting Standards No. 114, Accounting by Creditors for Impairment of
a Loan ("SFAS 114") and Statement of Financial Accounting Standards No.
118, Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures. In accordance with SFAS 114, loans are
considered impaired when it is probable that the Bank will be unable to
collect all amounts due according to the contractual terms of the loan
agreement. When impairment is identified it is measured based on the
present value of expected future cash flows discounted at the loan's
effective interest rate, except as a practical expedient, at the fair
value of collateral, if the loan is collateral dependent. When
identified, the impaired amount of the loan is recognized through a
provision for impairment and a corresponding valuation allowance.
Subsequent changes in the measurement of impairment are adjusted
through the valuation allowance. The accrual of interest on impaired
loans is discontinued when, in management's opinion, the borrower may
be unable to meet payments as they become due. When interest accrual is
discontinued, all unpaid accrued interest is reversed. Interest income
is subsequently recognized only to the extent cash payments are
received. The Bank's adoption of these accounting standards did not
have a material effect on the financial condition and results of
operations of the Bank.
For other non-accrual loans for which impairment has not been
recognized, the accrual of interest is discontinued on a loan when
management believes, after considering economic and business conditions
and collection efforts, that the borrower's financial condition is such
that the collection of interest is questionable.
Foreclosed Real Estate:
Foreclosed real estate includes property acquired through, or in lieu
of, loan foreclosure. At the time of foreclosure the property is
recorded at the lower of cost or fair value minus estimated costs to
sell, establishing a new cost basis. After foreclosure, valuations are
periodically performed by management and the real estate is carried at
the lower of cost or fair value minus estimated costs to sell. Any
write-downs based on the asset's fair value at the date of acquisition
are charged to the allowance for loan losses. Costs incurred in
maintaining foreclosed real estate and subsequent write-downs to
reflect declines in the fair value of the property are included in
other operating expenses.
Property and Equipment:
Property and equipment are carried at cost, net of accumulated
depreciation. Depreciation is computed using the straight-line method
over the estimated useful lives of the assets. When assets are retired
or otherwise disposed of, the cost and related accumulated depreciation
are removed from the accounts, and any resulting gain or loss is
reflected in income for the period. The cost of maintenance and repairs
is charged to expense as incurred; significant renewals and betterments
are capitalized.
F-13
(Sheet II)
<PAGE>
AMERICAN BANK AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes:
Income taxes are provided for the tax effects of transactions reported
in the financial statements and consist of taxes currently due plus
deferred tax assets or liabilities based on taxable effects of certain
temporary differences. Temporary differences are differences between
the tax bases of assets or liabilities and their reported amounts in
the financial statements that will result in taxable or deductible
amounts in future years when the reported amounts of the assets or
liabilities are recovered or settled, respectively.
During 1993, the Bank adopted Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes ("SFAS 109"). There was
no cumulative effect on net income for 1993 for the change in
accounting principle.
Net Income Per Share of Common Stock:
Net income per share of common stock is computed on the basis of the
number of shares of common stock outstanding. In computing net income
per share of common stock, no consideration was given to the stock
options outstanding as described in Note 7 as the options are
considered anti-dilutive.
Reclassifications:
Certain prior year amounts have been reclassified to conform to the
current year presentation.
NOTE 2 - INVESTMENT SECURITIES
Securities have been classified in the statements of financial
condition according to management's intent. The carrying amount of
securities and their approximate fair values are as follows:
<TABLE>
<C> <C> <C> <C> <C>
1995
----------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------ ------------- -------------- ----------
Available-For-Sale:
U.S. Treasury securities $ 534,367 $ 32,353 $ (93) $ 566,627
Obligations of other U.S.
government agencies
and corporations 28,483,240 589,473 (7,575) 29,065,138
Other securities 150,246 12,125 -0- 162,371
-------------- ------------ ------------- ------------
$ 29,167,853 $ 633,951 $ (7,668) $29,794,136
============= ============ ============= ============
</TABLE>
F-13
(Sheet III)
<PAGE>
AMERICAN BANK AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 2 - INVESTMENT SECURITIES (Continued)
<TABLE>
<C> <C> <C> <C> <C>
1994
-----------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------- ------------- -------------- ------------
Held-To-Maturity:
U.S. Treasury securities $ 793,457 $ -0- $ (4,864) $ 788,593
Obligations of other U.S.
government agencies
and corporations 2,835,475 6,649 (130,614) 2,711,510
Other securities 150,302 6,187 -0- 156,489
------------- ------------ --------------- ------------
$ 3,779,234 $ 12,836 $ (135,478) $ 3,656,592
============= ============ ============= ============
Available-For-Sale:
U.S. Treasury securities $ 540,875 $ -0- $ (17,905) $ 522,970
Obligations of other U.S.
government agencies
and corporations 2,695,918 4,665 (142,490) 2,558,093
------------- ------------ ------------- ------------
$3,236,793 $ 4,665 $(160,395) $3,081,063
============= ============ ============= ============
</TABLE>
On December 28, 1995, the Bank reclassified securities with a market
value of $ 4,124,319 and a book value of $4,089,168 from
held-to-maturity to available-for-sale as a result of a one-time
exemption granted by the Financial Accounting Standards Board. The
exemption permitted the movement of selected securities between
classifications without jeopardizing the classification of all
securities.
The amortized cost and fair value of investment maturities at December
31, 1995, by contractual maturity, are summarized below. Expected
maturities will differ from contractual maturities because borrowers
may have the right to call or prepay obligations with or without call
or prepayment penalties. The scheduled maturities of securities
available-for-sale as of December 31, 1995, are as follows:
Amortized Fair
Cost Value
--------------------------------
Due in one year or less $ 300,381 $ 304,313
Due from one to five years 2,102,115 2,120,514
Due from five to ten years 16,235,810 16,576,969
Due after ten years 10,529,547 10,792,340
------------- -------------
$29,167,853 $29,794,136
============= =============
F-13
(Sheet IV)
<PAGE>
AMERICAN BANK AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 2 - INVESTMENT SECURITIES (Continued)
As of December 31, 1995 and 1994, investments in obligations of other
U.S. government agencies and corporations included approximately
$11,018,000 and $ 3,730,000, respectively in mortgage-backed
securities.
Investment securities, carried at $ 566,720 at December 31, 1995, and
$1,023,540 at December 31, 1994, were pledged for purposes required or
permitted by law.
Gross realized gains and losses on sales of available-for-sale
securities amounted to $ 31,024 and $ 24,431, respectively in 1995,
$2,457 and $ -0-, respectively in 1994, and $ -0- and $ -0-,
respectively, in 1993.
NOTE 3 - LOANS RECEIVABLE
Major classifications of loans receivable are summarized as follows:
1996 1995
---------------- ------------
Commercial $14,637,669 $13,566,251
Real estate 6,404,951 5,322,434
Installment 4,022,714 4,456,071
Construction 936,205 643,786
--------------- ------------
26,001,539 23,988,542
Unearned discount (14,107) (49,091)
Allowance for loan losses (334,901) (293,923)
------------- ------------
Loans receivable, net $25,652,531 $23,645,528
============= ============
The Bank grants commercial, real estate and consumer loans in the State
of Florida. Although the Bank's loan portfolio is diversified, a
significant portion of its loans are secured by real estate.
Loans on which the accrual of interest has been discontinued or reduced
amounted to $ -0-, $ 24,522, and $ 416,376 at December 31, 1995, 1994,
and 1993, respectively. Interest income on those loans is recorded only
when received.
Changes in the allowance for loan losses were as follows:
1995 1994 1993
----------- ----------- --------
Balance, beginning of year $293,923 $242,612 $371,865
Provision charged to operations 20,000 135,000 300,469
Loans charged off (49,656) (89,565) (510,568)
Recoveries 70,634 5,876 80,846
--------- --------- ---------
Balance, end of year $334,901 $293,923 $242,612
========= ========= =========
F-13
(Sheet V)
<PAGE>
AMERICAN BANK AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 4 - PROPERTY AND EQUIPMENT
Major classifications of property and equipment are summarized as
follows:
1995 1994
-------------- ------------
Land $ 658,000 $ 658,000
Building 1,202,446 1,197,286
Furniture and equipment 396,879 375,178
-------------- ------------
2,257,325 2,230,464
Less: Accumulated depreciation 497,838 434,916
-------------- ------------
$ 1,759,487 $ 1,795,548
=============== ============
Depreciation expense charged to operations was $ 62,922, $ 64,163, and
$ 67,997 in 1995, 1994 and 1993, respectively.
NOTE 5 - INCOME TAXES
The provision for income taxes consists of the following:
<TABLE>
<C> <C> <C> <C>
1995 1994 1993
----------- ------------ ---------
Current tax provision:
Federal $ 33,322 $ -0- $ -0-
State 2,577 -0- -0-
----------- ------------- --------------
35,899 -0- -0-
Deferred tax expense (benefit) 318,735 (187,672) (102,000)
--------- ---------- ----------
Total income tax expense (benefit) $354,634 $(187,672) $(102,000)
========= ========== ===========
</TABLE>
The financial statements of the Bank reflected a zero income tax
provision for current federal and state taxes for December 31, 1994 and
1993. The zero provision was the result of the use of federal and state
net operating loss carryforwards. As of December 31, 1995, all federal
and state net operating loss carryforwards have been used to offset
taxable income.
F-13
(Sheet VI)
<PAGE>
AMERICAN BANK AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 5 - INCOME TAXES (Continued)
The tax effects of each type of significant item that gave rise to
deferred taxes are summarized as follows:
1995 1994
----------- ----------
Utilization of net operating loss carryforward $ -0- $299,264
Net unrealized (appreciation) depreciation on
available-for-sale securities (234,856) 58,710
Depreciation (28,567) (1,765)
Allowance for loan losses 36,036 28,687
Other 3,405 3,423
---------- ---------
Net deferred tax (liability) asset $(223,982) $388,319
========== =========
NOTE 6 - STOCKHOLDERS' EQUITY
The Board of Directors of the Bank may, subject to regulatory
limitations, declare dividends on net profits of the Bank.
The accompanying financial statements have been restated for a
correction in a due from bank account and certificate of deposit in
years prior to 1993. The effect of the restatement was to decrease net
income in years prior to 1993 by $ 105,931, net of income tax of $
39,937. Retained earnings at the beginning of 1993 has been adjusted
for the effect of the restatement on prior years.
NOTE 7 - STOCK OPTIONS
The former President of the Bank was granted options to purchase up to
15,000 additional shares of stock at $ 2.50 per share. On April 1,
1994, all such options were exercised by the former President. The
compensation element of those options was amortized over the option
terms in years prior to 1993.
Effective January 31, 1994, eight Directors of the Bank were granted
options to purchase 2,712 shares of stock for each year of service as a
board member, within the period beginning December 31, 1989, and
concluding on December 31, 1992. The option price is $ 6.52 per share
with a total of 75,936 shares offered. All options under the plan
expire ten years from January 31, 1994. No options were exercised in
1995 or 1994.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
Financial Instruments:
The financial statements do not reflect various commitments that arise
in the normal course of business to meet the financial needs of
customers. These include commitments to extend credit and letters of
credit, and involve to varying degrees, elements of credit, interest
rate, and liquidity risk in excess of the amounts reflected in the
Statement of Financial Condition.
F-13
(Sheet VII)
<PAGE>
AMERICAN BANK AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 8 - COMMITMENTS AND CONTINGENCIES (Continued)
Financial Instruments: (continued)
Commitments to extend credit, which amounted to approximately
$4,323,300 at December 31, 1995, represent legally binding agreements
to lend to a customer as long as all established contractual
conditions are satisfied. Commitments generally have fixed
expiration dates or other termination clauses. Since many commitments
expire without being funded, total commitment amounts do not
necessarily represent future liquidity requirements.
Standby letters of credit are conditional commitments issued by the
Bank guaranteeing the performance of a customer to a third party. At
December 31, 1995, the Bank had $ 65,483 in standby letters of credit
outstanding.
The Bank's exposure to credit loss in the event of non-performance by
the other party to commitments to extend credit is represented by the
contractual amount of these instruments. As these off-balance sheet
financial instruments have essentially the same credit-risk involved in
extending loans, the Bank generally uses the same credit and collateral
policies in making these commitments and conditional obligations as it
does for on-balance sheet instruments. The Bank does not anticipate any
material losses as a result of these commitments.
Financial Instruments with Concentrations of Credit Risk:
At December 31, 1995, the Bank had approximately $ 2,365,000 on deposit
with correspondent financial institutions (the "correspondents").
Deposits in the correspondents are insured up to $ 100,000 per
depositor.
Line of Credit:
The Bank maintains a $ 1,500,000 line of credit, for the purchase of
federal funds, with a correspondent bank and a $1,000,000 line of
credit at two other correspondent banks. At December 31, 1995, no
federal funds had been purchased by the Bank.
Litigation:
The Bank is a party to various legal actions normally associated with
financial institutions, the aggregate effect of which, in management's
and legal counsel's opinion, would not be significant to the Bank's
financial condition.
NOTE 9 - RELATED PARTY TRANSACTIONS
At December 31, 1995, certain officers, directors and their related
interests were indebted to the Bank in the aggregate amount of
approximately $ 2,025,000. Governing regulations require that these
loans be made on substantially the same terms, including interest rates
and collateral as those prevailing at the time for comparable
transactions with unrelated persons. Also, certain related parties
maintain significant deposit balances with the Bank in the aggregate
amount of approximately $ 1,653,000 at December 31, 1995.
F-13
(Sheet VIII)
<PAGE>
AMERICAN BANK AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 10 - REGULATORY MATTERS
Banks are subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum
capital requirements can initiate certain mandatory, and possibly
additional discretionary actions by regulators that, if undertaken,
could have a direct material effect on the Bank's financial statements.
The regulations require the Bank to meet specific capital adequacy
guidelines that involve quantitative measures of the Bank's assets,
liabilities, and certain off-balance-sheet items as calculated under
regulatory accounting practices. The Bank's capital classification is
also subject to qualitative judgments by the regulators about
components, risk weightings, and other factors. Management believes, as
of December 31, 1995, that the Bank meets all capital requirements to
which it is subject.
NOTE 11 - FAIR VALUES OF FINANCIAL INSTRUMENTS
During 1995, the Bank adopted Statement of Financial Accounting
Standards No. 107, Disclosures about Fair Value of Financial
Instruments ("SFAS 107"). SFAS 107 requires that the Bank disclose
estimated fair values for its financial instruments. The following
methods and assumptions were used by the Bank in estimating fair values
of financial instruments as disclosed herein:
Cash and cash equivalents:
The carrying amounts of cash and short-term instruments, those with
original maturities of 90 days or less, approximate their fair value.
Held-to-maturity and available-for-sale securities:
Fair values for investments are based on quoted market prices where
available. If quoted market prices are not available, fair values are
based on quoted market prices of comparable instruments.
Loans receivable:
For variable-rate loans that reprice frequently and have no significant
change in credit risk, fair values are based on carrying values. Fair
values for certain mortgage loans (for example, one-to-four family
residential), and other consumer loans are based on quoted market
prices of similar loans sold in conjunction with securitization
transactions, adjusted for differences in loan characteristics. Fair
values for commercial real estate and commercial loans are estimated
using discounted cash flow analyses, using interest rates currently
being offered for loans with similar terms to borrowers of similar
credit quality.
Deposit liabilities:
The fair values disclosed for demand deposits are, by definition, equal
to the amount payable on demand at the reporting date (that is, their
carrying amounts). The carrying amounts of variable-rate, fixed-term
money market accounts and certificates of deposit ("CDs") approximate
their fair values at the reporting date. Fair values for fixed-rate CDs
are estimated using a discounted cash flow calculation that applies
interest rates currently being offered on certificates to a schedule of
aggregated expected monthly maturities on time deposits.
F-13
(Sheet IX)
<PAGE>
AMERICAN BANK AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
NOTE 11 - FAIR VALUES OF FINANCIAL INSTRUMENTS (Continued)
Accrued interest:
The carrying amounts of accrued interest approximate their fair values.
Off-balance-sheet instruments:
Fair values for off-balance-sheet lending commitments are based on fees
currently charged to enter into similar agreements, taking into account
the remaining terms of the agreements and the counterparties' credit
standing.
Limitations:
Fair value estimates are made at a specific point in time and are based
on relevant market information which is continuously changing. Because
no quoted market prices exist for a significant portion of the Bank's
financial instruments, fair values for such instruments are based on
management's assumptions with respect to future economic conditions,
estimated discount rates, estimates of the amount and timing of future
cash flows, expected loss experience, and other factors. These
estimates are subjective in nature involving uncertainties and matters
of significant judgment; therefore, they cannot be determined with
precision. Changes in the assumptions could significantly affect the
estimates.
The estimated fair values of the Bank's financial instruments at
December 31, 1995 are as follows:
<TABLE>
<C> <C> <C>
Carrying Fair
Amount Value
------------- ------------
Financial assets:
Cash and cash equivalents $ 9,105,279 $ 9,105,279
Securities available-for-sale 29,794,136 29,794,136
Loans receivable 25,652,531 26,001,695
Accrued interest receivable 702,049 702,049
Financial liabilities:
Deposits 61,847,277 61,994,993
Accrued interest payable 248,546 248,546
Off-balance-sheet liabilities:
Commitments to extend credit -- 4,323,300
Stand-by letters of credit -- 65,483
</TABLE>
F-13
(Sheet X)
<PAGE>
APPENDIX A
Agreement and Plan of Merger
(including Amendments)
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made April 18, 1996,
between Whitney Holding Corporation ("Whitney"), a Louisiana corporation, on the
one hand, and American Bank and Trust ("Bank"), a Florida chartered state bank,
on the other hand. Whitney and Bank shall be hereinafter collectively referred
to as the "Constituent Corporations".
Preamble
The Boards of Directors of Whitney and Bank have each determined that
it is desirable and in the best interests of their respective corporations and
their shareholders that Bank merge with a bank to be formed by Whitney (the
"Merger") on the terms and subject to the conditions set forth in this Agreement
and in the Merger Agreement (as hereinafter defined).
NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties hereto agree as follows:
Section 1. The Merger and Closing
1.01. Merger.
(a) Following the expiration of the Review Period (as
hereinafter defined), Whitney shall, in good faith, take expeditious steps to
form a national banking association (the "Acquiring Bank") as a wholly owned
subsidiary of Whitney. Upon its formation, Whitney will cause the Acquiring Bank
to execute this Agreement as a party.
(b) Promptly after the formation of the Acquiring Bank, the
Boards of Directors of the Acquiring Bank and Bank will execute the agreement of
merger annexed hereto as Exhibit 1.01(b) (the "Merger Agreement"), pursuant to
which, on the terms set forth herein and subject to the conditions set forth in
Section 6 hereof, Bank will merge with and into the Acquiring Bank, which shall
be the surviving bank.
(c) Effects of Merger. The Merger shall have the effects set
forth in the national banking laws and the Florida state banking laws. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time (as hereinafter defined), all the property and assets, rights, privileges
and all debts, liabilities and obligations of Bank will become the assets,
rights, privileges, debts, liabilities and obligations of the Acquiring Bank as
the surviving bank in the Merger.
1.02. The Closing. The "Closing" of the transactions contemplated
hereby will take place in the Board Room of Whitney, 228 St. Charles Avenue,
Second Floor, New Orleans, Louisiana 70130 (or such other place to which the
parties may agree), at 10:00 a.m., New Orleans Time, on a mutually agreeable
date as soon as practicable following satisfaction of the conditions set forth
in subparagraphs (a), (b) and (d) of subsection 6.01 hereof, or if no date has
been agreed to, on any date specified by any party to the others upon 10 days
notice following satisfaction of such conditions. The date on which the Closing
occurs is herein called the "Closing Date". If all conditions set forth in
Section 6 hereof are satisfied or waived by the party entitled to grant such
waiver, at the Closing (a) the Constituent Corporations shall each provide to
the other such proof of satisfaction of the conditions set forth in Section 6 as
the party whose obligations are conditioned upon such satisfaction may
reasonably request, (b) the certificates, letters and opinions required by
Section 6 shall be delivered, (c) the appropriate officers of the parties shall
execute, deliver and acknowledge the Merger Agreement and (d) the parties shall
take such further action as is required to consummate the transactions
contemplated by this Agreement and the Merger Agreement. If on any date
established for the Closing all conditions in Section 6 hereof have not been
satisfied or waived by the party entitled to grant such waiver, then any party,
on one or more occasions, may declare a delay of the Closing of such duration,
not exceeding 10 business days, as the declaring party shall select, but no such
delay shall extend beyond the date set forth in subparagraph (c) of subsection
7.01, and no such delay shall interfere with the right of any party to terminate
this Agreement pursuant to Section 7.
A-1
<PAGE>
1.03. The Effective Date and Time. Immediately following (or
concurrently with) the Closing, the Merger Agreement shall be filed with and
recorded by the Office of the Comptroller of the Currency (the "Comptroller")
and the Merger shall be effective at the date and time specified in the Merger
Agreement. The date on which and the time at which the Merger becomes effective
are herein referred to as the "Effective Date" and the "Effective Time,"
respectively.
1.04. Surviving Corporation. The articles of association and by-laws of
the Acquiring Bank in effect immediately prior to the Effective Time shall be
the articles of association and by-laws of the Acquiring Bank, as the surviving
bank in the Merger, after the Effective Time, until duly amended in accordance
with the terms thereof and applicable law. The directors and officers of the
Acquiring Bank in office immediately prior to the Effective Time shall be the
directors and officers of the Acquiring Bank as the surviving bank in the Merger
and, after the Effective Time, shall serve in such capacity in accordance with
the articles of association and by-laws of the surviving bank. Each share of
capital stock of the Acquiring Bank issued and outstanding immediately prior to
the Effective Time shall remain issued and outstanding from and after the
Effective Time and shall be the capital stock of the Acquiring Bank as the
surviving bank.
1.05. Tax Consequences. It is the intention of the parties hereto that
the Merger shall constitute a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and that
this Agreement shall constitute a "plan of reorganization" for purposes of
Section 368 of the Code.
Section 2. Conversion of Stock of Bank
2.01. Conversion. Subject to the provisions of this Section 2, at the
Effective Time, by virtue of the Merger and without any action on the part of
the holders thereof, (i) the shares of Bank common stock, par value $2.50 per
share ("Bank Common Stock") and (ii) the unexercised Bank Options (as defined in
Section 3.02), shall be converted as follows:
(a) Exchange Ratio for Bank Common Stock. Except for (i)
shares issued and outstanding immediately prior to the Effective Time as to
which dissenters' rights have been perfected and not withdrawn or otherwise
forfeited under 12 U.S.C. ss.215a ("Dissenters' Shares") and (ii) shares of Bank
Common Stock held by Bank as treasury shares (which shall by reason of the
Merger be cancelled), and subject to the provisions of Section 2.01(b) relating
to fractional shares, each issued and outstanding share of Bank Common Stock
shall be converted into and become that number of shares of Whitney common
stock, no par value ("Whitney Common Stock") that is equal to the quotient (the
"Exchange Ratio") obtained by dividing the Maximum Deliverable Amount (as
hereinafter defined) by the total number of issued and outstanding shares (not
treasury shares) of Bank Common Stock at the Effective Time.
(i) Acquisition Price for Bank Common Stock.
The term "Acquisition Price" means $10,250,000, minus the Deductible Amount
(as hereinafter defined) plus the amount of actual cash proceeds received
by the Bank from the exercise of any Bank Options minus the Net Value (as
hereinafter defined) of any outstanding unexercised Bank Options.
(xx) Net Value of Unexercised Bank Options.
The "Net Value" of any outstanding unexercised Bank
Option shall be the number of unexercised Bank Options
multiplied by the difference of the following:
$13.172804 minus the quotient of the Deductible Amount
divided by 545,636.
(yy) Payment for Unexercised Bank Options.
At the Closing, and conditioned upon consummation of
the Merger but effective immediately prior to the
Effective Time, each outstanding unexercised Bank
Option shall be exchanged for shares of Whitney
Common Stock having a value, calculated based on the
Average Market Price, equal to the quotient of the
Net Value of the outstanding unexercised Bank Options
divided by the total number of outstanding
unexercised Bank Options (with cash being paid by
Whitney in lieu of the issuance of any fractional
shares in such exchange).
A-2
<PAGE>
(ii) Maximum Deliverable Amount for Bank Common
Stock. The term "Maximum Deliverable Amount" means the quotient obtained by
dividing the Acquisition Price by the Average Market Price.
(iii) Average Market Price. The "Average Market
Price" shall be the average of the closing per share trading prices of Whitney
Common Stock (adjusted appropriately for any stock split, stock dividend,
recapitalization, reclassification or similar transaction which is effected,
or for which a record date occurs) on the twenty (20) trading days preceding the
fifth trading day immediately prior to the Effective Time, as reported in
the Wall Street Journal (corrected for typographical errors); provided, however,
that if the Average Market Price as calculated above is less than $27.00, the
Average Market Price for purposes of this Section 2.01(a) shall be $27.00,
and if the Average Market Price as calculated above is greater than $35.00,
the Average Market Price for purposes of this Section 2.01(a) shall be $35.00.
(iv) Deductible Amount. The term "Deductible
Amount" means the dollar amount, if any, by which Bank's "net income after
taxes" for the calendar year 1996 is less than $820,000 projected by Bank. In
verifying the propriety of this projection "net income after taxes", the "net
income after taxes" for 1996 year-to-date through the calendar month
immediately preceding the Closing Date will be multiplied by 12 (the number
of months in a year) thereby establishing the numerator and divided by the
number of months used in the interim statement of "net income after taxes" as
denominator. The quotient establishes the annualized "net income after taxes"
for 1996. Any resulting decrease in "net income after taxes" from $820,000 on
an annualized basis will reduce the Acquisition Price, provided however, that
if net income before taxes as calculated is within five (5) percent of $820,000
on an annualized basis, the Deductible Amount shall be zero (0). Whitney,
with the assistance of Bank, may use outside auditors to verify the amount of
interim net income after taxes. In projecting "net income after taxes", as
such term is used herein, all items of extraordinary income shall be
excluded, income shall be reduced by the amount of any dividends declared,
and Bank's costs, fees and expenses relating to the negotiation and
performance of this Agreement shall not be included in Bank's expenses.
(b) Fractional Shares. In lieu of the issuance of fractional
shares of Whitney Common Stock, each shareholder of Bank, upon surrender of his
or her certificate that immediately prior to the Effective Time represented Bank
Common Stock, other than Dissenters' Shares and shares of Bank Common Stock held
by Bank as treasury shares (which shall by reason of the Merger be cancelled),
shall receive a cash payment (without interest) equal to the fair market value
at the Effective Time of any fraction of a share of Whitney Common Stock to
which such holder would be entitled but for this provision. For purposes of
calculating such payment, the fair market value of a fraction of a share of
Whitney Common Stock at the Effective Time shall be such fraction multiplied by
the Average Market Price.
(c) Exchange of Certificates. After the Effective Time, each
holder of an outstanding certificate or certificates theretofore representing a
share or shares of Bank Common Stock, other than Dissenters' Shares and shares
of Bank Common Stock held by Bank as treasury shares (which shall by reason of
the Merger be cancelled), upon surrender thereof to the exchange agent
(Boatmen's Trust Company or other entity regularly engaged in the business of
acting as stock transfer agent) selected by Whitney (the "Exchange Agent"),
together with duly executed transmittal materials provided pursuant to Section
2.01(e) or upon compliance by the holder or holders thereof with the procedures
of the Exchange Agent with respect to lost, stolen or destroyed certificates,
shall be entitled to receive in exchange therefor any payment due in lieu of
fractional shares and a certificate or certificates representing the number of
whole shares of Whitney Common Stock into which such holder's shares of Bank
Common Stock were converted. Until so surrendered, each outstanding Bank stock
certificate shall be deemed for all purposes, other than as provided below with
respect to the payment of dividends or other distributions (if any) in respect
of Whitney Common Stock, to represent the number of whole shares of Whitney
Common Stock into which such holder's Bank Common Stock shall have been
converted. Whitney may, at its option, refuse to pay any dividend or other
distribution to holders of unsurrendered Bank stock certificates until
surrendered; provided, however, that upon the surrender and exchange of any Bank
stock certificates there shall be paid, to the extent not previously paid, to
the record holders of the Whitney stock certificates issued in exchange therefor
the amount, without interest, of accumulated dividends and distributions, if
any, which have become payable with respect to the number of whole shares of
Whitney Common Stock into which the shares of Bank Common Stock theretofore
represented by such certificates shall have been exchanged.
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(d) Deposit. Promptly following the Effective Time, Whitney
shall deposit or cause to be deposited with the Exchange Agent (i) certificates
representing the shares of Whitney Common Stock and (ii) the cash in lieu of
fractional shares, to be issued and paid, as the case may be, in exchange for
outstanding shares of Bank Common Stock pursuant to this Section 2.
(e) Transmittal Materials. Promptly after the Effective Time,
Whitney shall send or cause to be sent to each former shareholder of record of
Bank at the Effective Time, excluding the holders, if any, of Dissenters' Shares
as to which dissenters' rights have been perfected and not withdrawn or
otherwise forfeited under 12 U.S.C. ss.215a, transmittal materials for use in
exchanging certificates of Bank Common Stock for certificates of Whitney Common
Stock.
(f) Dissenters' Shares. Holders of Dissenters' Shares shall
not be entitled to receive the shares of Whitney Common Stock and any unpaid
dividends and distributions payable thereon pursuant to Section 2.01 and shall
only be entitled to receive payment of the fair cash value of such shares in
accordance with the provisions of 12 U.S.C. ss.215a, unless and until such
holders fail to perfect or effectively withdraw or lose their rights to
appraisal and payment under 12 U.S.C. ss.215a. If, after the Effective Time, any
such holder fails to perfect or effectively withdraws or loses such right, such
shares of Bank Common Stock will be treated as if they had been converted into,
at the Effective Time, the shares of Whitney Common Stock (and cash in lieu of
fractional shares), and any unpaid dividends and distributions payable thereon
pursuant to Section 2.01, without interest thereon.
2.02. Closing Transfer Books. At the Effective Time, the stock
transfer books of Bank shall be closed and no transfer of shares of Bank Common
Stock shall be made thereafter.
Section 3. Representations and Warranties of Bank
Bank represents and warrants to Whitney that, as of the date on which
Bank delivers the Schedule of Exceptions to Whitney and as of the Closing Date,
except as set forth in the Schedule of Exceptions:
3.01. Organization and Qualification. Bank is a state banking
association, duly organized, validly existing and in good standing under the
laws of the State of Florida. Bank has all requisite corporate power and
authority to own and lease its property and to carry on its business as it is
currently being conducted and to execute this Agreement and the Merger Agreement
and to consummate the transactions contemplated hereby, and is qualified and in
good standing as a foreign corporation in all jurisdictions in which the failure
to so qualify would have a material adverse effect on Bank's financial
condition, results of operations or business.
3.02. Capital Stock; Other Interests. The authorized capital stock of
Bank consists of 1,000,000 shares of common stock, of which 469,700 shares are
issued and outstanding and no shares are held in its treasury. All issued and
outstanding shares of capital stock of Bank have been duly authorized and are
validly issued, fully paid and non-assessable. Other than options to acquire up
to an aggregate of 75,936 shares of Bank Common Stock granted under the Bank's
Directors' Stock Option Plan of 1993 (the "Bank Options"), Bank does not have
outstanding any stock options or other rights to acquire any shares of its
capital stock or any security convertible into such shares, nor has any
obligation or commitment to issue, sell or deliver any of the foregoing or any
shares of its capital stock. The outstanding capital stock of Bank and the Bank
Options have been issued in compliance with all legal requirements and in
compliance with any preemptive or similar rights. The Bank Options have been
duly authorized and were validly issued in accordance with the terms of the
Bank's Directors' Stock Option Plan of 1993. All shares of Bank Common Stock
issued or that may be issued after the date hereof upon exercise of Bank Options
are, or will be when issued, duly authorized, validly issued, fully paid and
non-assessable. Bank does not have a subsidiary or direct or indirect ownership
interest exceeding 5% in any firm, corporation, partnership or other entity.
3.03. Corporate Authorization; No Conflicts. Subject to the approval of
this Agreement and the Merger Agreement by the shareholders of Bank in
accordance with the Florida state banking laws and applicable federal law, all
corporate acts and other proceedings required of Bank for the due and valid
authorization, execution, delivery and performance of this Agreement and the
Merger Agreement and consummation of the Merger have been validly taken. Subject
to their approval by the shareholders of Bank and to such regulatory approvals
as are required by law, this
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Agreement and the Merger Agreement are legal, valid and binding obligations of
Bank and are enforceable against Bank in accordance with the respective terms
hereof and thereof, except that enforcement may be limited by bankruptcy,
reorganization, insolvency and other similar laws and court decisions relating
to or affecting the enforcement of creditors' rights generally and by general
equitable principles. Neither the execution, delivery or performance of this
Agreement or the Merger Agreement, nor the consummation of the transactions
contemplated hereby or thereby will (i) violate, conflict with, or result in a
breach of any provision of, (ii) constitute a default (or an event which that,
with notice or lapse of time or both, would constitute a default) under, (iii)
result in the termination of or accelerate the performance required by, or (iv)
result in the creation of any lien, security interest, charge or encumbrance
upon any of Bank's properties or assets under, any of the terms, conditions or
provisions of Bank's articles of incorporation or by-laws or any material note,
bond, mortgage, indenture, deed of trust, lease, license, agreement or other
instrument or obligation to or by which Bank or any of its assets is bound; or
violate any order, writ, injunction, decree, statute, rule or regulation of any
governmental body applicable to Bank or any of its assets.
3.04. Financial Statements, Reports and Proxy Statements. Bank has
delivered to Whitney true and complete copies of (a) the balance sheets as of
December 31, 1995 and December 31, 1994 of Bank, the related statements of
income, shareholders' equity and cash flows for the respective years then ended,
the related notes thereto, and the report of its independent public accountants
with respect thereto (collectively, the "Financial Statements"), (b) the
unaudited balance sheets as of March 31, 1996 of Bank, and the related unaudited
statements of income, shareholders' equity and cash flows for the three-month
periods then ended (collectively, the "Interim Financial Statements"), (c) all
call reports, including all amendments thereto, made to the Federal Deposit
Insurance Corporation (the "FDIC") and the Department of Banking and Finance of
the Office of the Florida Comptroller (the "Florida Comptroller") since December
31, 1992 and (d) all monthly, quarterly and annual communications (including any
proxy information statements relating to meetings of the Bank's shareholders)
disseminated to Bank's shareholders or presented to its Board of Directors at
any time since December 31, 1992.
The Financial Statements and the Interim Financial Statements
have been (and all financial statements delivered to Whitney as required by this
Agreement will be) prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a basis consistent with prior periods, and
present fairly, in conformity with GAAP the results of operations of Bank for
the respective periods covered thereby and the financial condition of Bank as of
the respective dates thereof. All call and other regulatory reports referred to
above have been filed on the appropriate form and prepared in all material
respects in accordance with such form's instructions and the applicable rules
and regulations of the regulating federal agency. As of the date of the latest
balance sheet forming part of the Interim Financial Statements (the "Latest
Balance Sheet"), Bank has not had, nor are any of its assets subject to, any
material liability, commitment, indebtedness or obligation (of any kind
whatsoever, whether absolute, accrued, contingent, matured or unmatured) which
is not reflected and adequately reserved against in accordance with GAAP. No
report, including any report filed with the FDIC or the Florida Comptroller, or
other report, proxy statement or offering materials made or given to
shareholders of Bank, as of the respective dates thereof, contained, and no such
report, proxy statement, offering materials or report to shareholders filed,
made or disseminated after the date of this Agreement will contain, any untrue
statement of a material fact or omitted, or will omit, to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Financial Statements and Interim Financial Statements are supported by and
consistent with a general ledger and detailed trial balances of investment
securities, loans and commitments, depositors' accounts and cash balances on
deposit with other institutions, copies of which have been made available to
Whitney.
3.05. Loan and Investment Portfolios. All loans, discounts and
financing leases (in which Bank is lessor) reflected on the Latest Balance Sheet
(a) were, at the time and under the circumstances in which made, made for good,
valuable and adequate consideration in the ordinary course of business of Bank,
(b) are evidenced by genuine notes, agreements or other evidences of
indebtedness and (c) to the extent secured, have been secured by valid liens and
security interests which have been perfected. Accurate lists of all loans,
discounts and financing leases as of the date of the Latest Balance Sheet (or a
more recent date), and of the investment portfolios of Bank as of such date,
have been delivered to Whitney. Except as specifically noted on the loan
schedule attached to the Schedule of Exceptions, Bank is not a party to any
written or oral loan agreement, note or borrowing arrangement, including any
loan guaranty, that was, as of the most recent month-end (i) delinquent by more
than 30 days in the payment of principal or interest, (ii) known by Bank to be
otherwise in material default for more than 30 days, (iii) classified as
"substandard," "doubtful,"
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"loss," "other assets especially mentioned" or any comparable classification by
Bank, the Florida Comptroller or the FDIC, (iv) an obligation of any director,
executive officer or 10% shareholder of Bank who is subject to Regulation O of
the Federal Reserve Board (12 C.F.R. Part 215), or any person, corporation or
enterprise controlling, controlled by or under common control with any of the
foregoing, or (v) in violation of any law, regulation or rule of any
governmental authority, other than those that are immaterial in amount.
3.06. Adequacy of Allowances for Losses. Each of the allowances for
losses on loans, financing leases and other real estate shown on the Latest
Balance Sheet is adequate in accordance with applicable regulatory guidelines
and GAAP in all material respects, and there are no facts or circumstances known
to Bank which are likely to require in accordance with applicable regulatory
guidelines or GAAP a future material increase in any such provisions for losses
or a material decrease in any of the allowances therefor reflected in the Latest
Balance Sheet. Each of the allowances for losses on loans, financing leases and
other real estate reflected on the books of Bank at all times from and after the
date of the Latest Balance Sheet is adequate in accordance with applicable
regulatory guidelines and GAAP in all material respects, and there are no facts
or circumstances known to Bank which are likely to require in accordance with
applicable regulatory guidelines or GAAP a future material increase in any of
such provisions for losses or a material decrease in the allowances therefor
reflected in the Latest Balance Sheet.
3.07. Absence of Certain Changes or Events. Since the date of the
Latest Balance Sheet, Bank has not declared, set aside for payment or paid any
dividend to holders of, or declared or made any distribution on, any shares of
Bank's capital stock for Bank. Since the date of the Latest Balance Sheet, there
has been no event or condition of any character (whether actual or threatened)
that has had, or can reasonably be anticipated to have, a material adverse
effect on the financial condition, results of operations or business of Bank.
Except as may result from the transactions contemplated by this Agreement, Bank
has not, since the date of the Latest Balance Sheet:
(a) borrowed any money or entered into any capital lease or,
except in the ordinary course of business consistent with past practices, (i)
lent any money or pledged any of its credit in connection with any aspect of its
business whether as a guarantor, surety, issuer of a letter of credit or
otherwise, (ii) mortgaged or otherwise subjected to any lien, encumbrance or
other liability any of its assets, (iii) sold, assigned or transferred any of
its assets in excess of $100,000 in the aggregate, or (iv) incurred any material
liability, commitment, indebtedness or obligation (of any kind whatsoever,
whether absolute or contingent);
(b) suffered any material damage, destruction or loss to
immovable or movable property, whether or not covered by insurance;
(c) experienced any material change in asset
concentrations as to customers or industries or in the nature and source of its
liabilities or in the mix of interest-bearing versus non-interest bearing
deposits;
(d) received notice or had knowledge or reason to believe that
any material labor unrest exists among any of its employees or that any group,
organization or union has attempted to organize any of its employees;
(e) received notice or had any knowledge or reason to
believe that any of its substantial customers has terminated or intends to
terminate such customer's relationship with it;
(f) failed to operate its business in the ordinary course
consistent with past practices, or failed to preserve its business organization
intact or to preserve the goodwill of its customers and others with whom it has
business relations;
(g) incurred any material loss except for losses adequately
reserved against on the date of this Agreement or on the Latest Balance Sheet
and expenses associated with this transaction, or waived any material right in
connection with any aspect of its business, whether or not in the ordinary
course of business;
(h) forgiven any debt owed to it, or canceled any of its
claims or paid any of its noncurrent obligations or liabilities;
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(i) made any capital expenditure or capital addition or
betterment in excess of $25,000.00;
(j) entered into any agreement requiring the payment,
conditionally or otherwise, of any salary, bonus, extra compensation, pension or
severance payment to any of its present or former directors, officers or
employees, except (i) such agreements as are terminable at will without any
penalty or other payment by it or increased (except for increases of not more
than 8.00% consistent with past practices) the compensation (including salaries,
fees, bonuses, profit sharing, incentive, pension, retirement or other similar
payments) of any such person whose annual compensation would, following such
increase, exceed $30,000.00 or (ii) the bonus/incentive program as outlined in a
letter dated April 16, 1996 from Patrick Emmanuel to Joseph Schwertz;
(k) except as required in accordance with GAAP, changed
any accounting practice followed or employed in preparing the Financial
Statements or the Interim Financial Statements;
(l) made any loan, given any discount or entered into any
financing lease which has not been (i) made, at the time and under the
circumstances in which made, for good, valuable and adequate consideration in
the ordinary course of business, (ii) evidenced by genuine notes, agreements or
other evidences of indebtedness and (iii) fully reserved against in an amount
sufficient in accordance with applicable regulatory guidelines to provide for
all charge-offs reasonably anticipated in the ordinary course of business after
taking into account all recoveries reasonably anticipated in the ordinary course
of business; or
(m) entered into any agreement, contract or commitment to
do any of the foregoing.
3.08. Taxes. Bank has timely filed all federal, state and local income,
franchise, excise, real and personal property, employment and other tax returns,
tax information returns and reports required to be filed, has paid all taxes,
interest payments and penalties as reflected therein which have become due, has
made adequate provision for the payment of all such taxes accruable for all
periods ending on or before the date of this Agreement (and will make such
accruals through the Closing Date) to any city, county, state, the United States
or any other taxing authority, and is not delinquent in the payment of any tax
or material governmental charge of any nature. The federal income tax returns of
Bank have not been audited by the Internal Revenue Service. No audit,
examination or investigation is presently being conducted or is presently being
threatened by any taxing authority; no material unpaid tax deficiencies or
additional liabilities of any sort have been proposed to Bank by any
governmental representative, and no agreements for extension of time for the
assessment of any tax have been entered into by or on behalf of Bank. Bank has
withheld from its employees (and timely paid to the appropriate governmental
entity) proper and accurate amounts for all periods in compliance with all tax
withholding provisions of applicable federal, state and local laws (including,
without limitation, income, social security and employment tax withholding for
all forms of compensation).
3.09. Title to Assets. (a) On the date of the Latest Balance Sheet,
Bank had and, except with respect to assets disposed of for adequate
consideration in the ordinary course of business since such date, now has, good
and merchantable title to all real property and good and merchantable title to
all other material properties and assets reflected on the Latest Balance Sheet,
and has good and merchantable title to all real property and good and
merchantable title to all other material properties and assets acquired since
the date of the Latest Balance Sheet, in each case free and clear of all
mortgages, liens, pledges, restrictions, security interests, charges and
encumbrances of any nature except for (i) mortgages and encumbrances which
secure indebtedness which is properly reflected in the Latest Balance Sheet or
which secure deposits of public funds as required by law; (ii) liens for taxes
accrued but not yet payable; (iii) liens arising as a matter of law in the
ordinary course of business with respect to obligations incurred after the date
of the Latest Balance Sheet, provided that the obligations secured by such liens
are not delinquent or are being contested in good faith; (iv) such imperfections
of title and encumbrances, if any, as do not materially detract from the value
or materially interfere with the present use of any of such properties or assets
or the potential sale of any of such owned properties or assets; and (v) capital
leases and leases, if any, to third parties for fair and adequate consideration.
Bank owns, or has valid leasehold interests in, all material properties and
assets used in the conduct of its business. Any real property and other material
assets held under lease by Bank are held under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the
use made or and proposed to be made of such property by Bank of such property.
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(b) With respect to each lease of any real property or a
material amount of personal property to which Bank is a party, except for
financing leases in which Bank is lessor, (i) such lease is in full force and
effect in accordance with its terms; (ii) all rents and other monetary amounts
that have become due and payable thereunder have been paid; (iii) there exists
no default, or event, occurrence, condition or act, which with the giving of
notice, the lapse of time or the happening of any further event, occurrence,
condition or act would become a default under such lease; and (iv) the Merger
will not constitute a default or a cause for termination or modification of such
lease.
(c) Bank does not have any legal obligation, absolute or
contingent, to any other person to sell or otherwise dispose of any substantial
part of its assets; or to sell or dispose of any of its assets except in the
ordinary course of business consistent with past practices.
3.10. Legal Matters. (a) To the knowledge of Bank, (i) there is no
material claim, action, suit, proceeding, arbitration or investigation pending
in any court or before or by any governmental agency or instrumentality or
arbitration panel or otherwise, or threatened against Bank nor (ii) do any facts
or circumstances exist that would be likely to form the basis for any material
claim against Bank that, if adversely determined, would have a material adverse
effect on Bank.
(b) Bank has complied in all material respects with and is not
in default in any material respect under (and has not been charged or threatened
with or come under investigation with respect to any charge concerning any
material violation of any provision of) any federal, state or local law,
regulation, ordinance, rule or order (whether executive, judicial, legislative
or administrative) or any order, writ, injunction or decree of any court, agency
or instrumentality.
(c) There are no material uncured violations, or violations
with respect to which material refunds or restitution may be required, cited in
any compliance report to Bank as a result of examination by any bank regulatory
authority.
(d) Bank is not subject to any written agreement,
memorandum or order with or by any bank regulatory authority.
(e) To the knowledge of Bank, there is no claim, action, suit,
proceeding, arbitration, or investigation, pending or threatened, in which any
material claim or demand is made or threatened to be made against Bank or any
officer, director, advisory director or employee, in each case by reason of any
person being or having been an officer, director, advisory director or employee
of Bank.
3.11. Employee Benefit Plans. (a) Except for the plans listed on the
subsection of the Schedule of Exceptions that corresponds to this subsection
(the "ERISA Plans"), Bank does not sponsor, maintain or contribute to, and Bank
has not at any time sponsored, maintained or contributed to, any employee
benefit plan that is subject to any of the provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). Each of the ERISA Plans has
been maintained and administered in all material respects in compliance with its
terms, the provisions of ERISA and all other applicable laws, and, where
applicable, the provisions of the Code. No ERISA Plan, including any "party in
interest" or "disqualified person" with respect thereto has engaged in a
nonexempt prohibited transaction under Section 4975 of the Code or Section
502(i) of ERISA; there is no matter relating to any of the ERISA Plans pending
or threatened, nor are there any facts or circumstances existing that could
reasonably be expected to lead to (other than routine filings such as
qualification determination filings), proceedings before, or administrative
actions by, any governmental agency; there are no actions, suits or claims
pending or threatened (including, without limitation, breach of fiduciary duty
actions, but excluding routine uncontested claims for benefits) against any of
the ERISA Plans or the assets thereof. Bank has complied in all material
respects with the reporting and disclosure requirements of ERISA and the Code.
None of the ERISA Plans is a multi-employer plan within the meaning of Section
3(37) of ERISA. A favorable determination letter has been issued by the Internal
Revenue Service with respect to each ERISA Plan that is intended to be qualified
under Section 401(a) of the Code and the Internal Revenue Service has taken no
action to revoke any such letter and nothing has occurred, whether by action or
failure to act, which would cause the loss of such qualification. Bank has not
sponsored, maintained or made contributions to any plan, fund or arrangement
subject to Title IV of ERISA or the requirements of Section 412 of the Code or
providing for medical benefits, insurance coverage
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or other similar benefits for any period extending beyond the termination of
employment, except as may be required under the "COBRA" provisions of ERISA and
the Code. The Bank has no obligation to provide medical insurance after the
termination of employment, except as to COBRA.
(b) Set forth on the subsection of the Schedule of Exceptions
corresponding to this subsection is a true and complete list of each benefit
plan and benefit arrangement of Bank other than the ERISA Plans. True and
complete copies of all plan (including ERISA Plan) documents and written
agreements (including all amendments and modifications thereof), together with
copies of any tax determination letters, trust agreements, summary plan
descriptions, insurance contracts, investment management agreements and the
three most recent annual reports on form series 5500 with respect to such plan
or arrangement have been made available to Whitney.
(c) All group health plans of Bank to which Section 4980B(f)
of the Code or Section 601 of ERISA applies are in compliance in all material
respects with continuation coverage requirements of Section 4980B(f) of the Code
and Section 601 of ERISA and any prior violations of such sections have been
cured prior to the date hereof.
(d) Each plan, fund or arrangement previously sponsored or
maintained by Bank, or to which Bank previously made contributions, which has
been terminated by Bank, was terminated in accordance with ERISA, the Code and
the terms of such plan, fund or arrangement and no event has occurred and no
condition exists that would subject Bank, Whitney or the Acquiring Bank to any
tax, penalty, fine or other liability as a result of, directly or indirectly,
the termination of such plan, fund or arrangement.
(e) The current fair market value of the assets of each ERISA
Plan subject to the provisions of Title IV of ERISA equals or exceeds the
present value of the accrued benefits of each such plan as of the end of the
most recent plan year, calculated on a termination and on-going basis, and there
has been no material change likely to change the funding status of any such
plan. No funding deficiency within the meaning of Section 412 of the Code exists
with respect to any ERISA Plan. All contributions required or accrued under the
terms of any plan (including any ERISA Plan) have been made and all insurance
premiums required or accrued under the terms of any plan (including any ERISA
plan) have been paid as of the date hereof.
3.12. Insurance Policies. Bank maintains in force insurance policies
and bonds in such amounts and against such liabilities and hazards as are
considered by it to be adequate. An accurate list of all such insurance policies
is attached to the Schedule of Exceptions. Bank is not now liable, nor has Bank
received any notice of any material retroactive premium adjustment. All policies
are valid and enforceable and in full force and effect, and Bank has not
received any notice of a material premium increase or cancellation with respect
to any of its insurance policies or bonds. Within the last three years, Bank has
not been refused any basic insurance coverage sought or applied for (other than
certain exclusions for coverage of certain events or circumstances as stated in
such polices), and Bank has no reason to believe that its existing insurance
coverage cannot be renewed as and when the same shall expire, upon terms and
conditions standard in the market at the time renewal is sought as favorable as
those presently in effect.
3.13. Agreements. (a) Bank is not a party to:
(i) any collective bargaining agreement;
(ii) other than the employee benefits and plans
referred to in the section of the Schedule of Exceptions that corresponds to
subsection 3.11 of this Agreement, any employment or other agreement or
contract with or commitment to any employee except the agreements, arrangements,
policies and practices referred to in the exceptions to subparagraph (j) of
subsection 3.07 of this Agreement and such agreements as are terminable without
penalty upon not more than 30 days notice
by the employer, and there are no deferred executive or nonqualified deferred
compensation arrangements (including split dollar obligations and the like);
(iii) any obligation of guaranty or indemnification
except such indemnification of officers, directors, employees and agents of
Bank as on the date of this Agreement may be provided in its articles of
incorporation and by-laws (and no indemnification of any such officer,director,
employee or agent has been authorized,
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granted or awarded), except if entered into in the ordinary course of business
with respect to customers of Bank, letters of credit, guaranties of endorsements
and guaranties of signatures;
(iv) any agreement, contract or commitment which
is or if performed will be materially adverse to the financial condition,
results of operations or business of Bank; or
(v) any agreement, contract or commitment
containing any covenant limiting the freedom of Bank (x) to engage in any line
of business permitted by regulatory authorities, (y) to compete with any
person in a line of business permitted by applicable regulatory guidelines to
be engaged in by Florida state banks, or (z) to fulfill any of its requirements
or needs for services or products (including,for example,contracts with vendors
to supply customers with credit insurance); or
(vi) any written agreement, memorandum, letter,
order or decree,formal or informal, with any federal or state regulatory agency.
(b) The subsection of the Schedule of Exceptions that
corresponds to this subsection contains a list of each material agreement,
contract or commitment (except those entered into in the ordinary course of
business with respect to loans, lines of credit, letters of credit, depositor
agreements, certificates of deposit and similar banking activities and equipment
maintenance agreements which are not material) to which Bank is a party or which
affects Bank. To Bank's knowledge, Bank has not in any material respect
breached, nor is there any pending or threatened claim that it has materially
breached, any of the terms or conditions of any of such agreements, contracts or
commitments or of any material agreement, contract or commitment that it enters
into after the date of this Agreement. Bank is not in material violation of any
written agreement, memorandum, letter, order or decree, formal or informal, with
any federal or state regulatory agency.
3.14. Licenses, Franchises and Governmental Authorizations. Bank
possesses all licenses, franchises, permits and other governmental
authorizations necessary for the continued conduct of its business. The deposits
of Bank are insured by the FDIC to the extent provided by applicable law, and
there are no pending or threatened proceedings to revoke or modify that
insurance or for relief under 12 U.S.C. Section 1818.
3.15. Corporate Documents. Bank has delivered to Whitney true and
correct copies of its articles of incorporation and its by-laws, all as amended.
All of the foregoing and all of the corporate minutes and stock transfer
records of Bank are current, complete and correct in all material respects.
3.16. Certain Transactions. No past or present director, executive
officer or five percent shareholder of Bank has, since January 1, 1991, engaged
in any transaction or series of transactions which, if Bank had been subject to
the FDIC's Proxy Statement disclosure rules set forth at 12 CFR 335.212, would
have been would be required to be disclosed pursuant to Item 6(e) of such rules.
3.17. Broker's or Finder's Fees. Except for Allen C. Ewing & Company,
investment bankers, which will receive an amount not in excess of $51,250 in
connection with its rendering of financial advice, payable in accordance with
the terms of that certain letter agreement dated February 28, 1996 between Bank
and Allen C. Ewing & Company, a true and correct copy of which has been provided
to Whitney, no agent, broker, investment banker, investment or financial advisor
or other person acting on behalf of Bank is entitled to any commission, broker's
or finder's fee from any of the parties hereto in connection with any of the
transactions contemplated by this Agreement.
3.18. Environmental Matters. (a) (i) Bank has obtained all material
permits, licenses and other authorizations that are required to be obtained by
it under any applicable Environmental Law Requirements (as hereinafter defined)
in connection with the operation of its businesses and ownership of its
properties (collectively, the "Subject Properties"), including without
limitation, to the knowledge of Bank, properties acquired by foreclosure or in
settlement of loans;
(ii) Bank is in compliance with all terms and
conditions of such permits, licenses and authorizations and with all applicable
Environmental Law Requirements;
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(iii) There are no past or present events,
conditions, circumstances, activities or plans by Bank related in any manner to
Bank or the Subject Properties that did or would violate or prevent
compliance or continued compliance with any of the Environmental Law
Requirements, or give rise to any Environmental Liability, as hereinafter
defined;
(iv) To Bank's knowledge, there is no civil, criminal
or administrative action, suit, demand, claim, order, judgment, hearing, notice
or demand letter, notice of violation, investigation or proceeding pending
or threatened by any person against Bank, or any prior owner of any of the
Subject Properties which relates to the Subject Properties and relates in
any way to any Environmental Law Requirement or seeks to impose any
Environmental Liability; and
(v) To Bank's knowledge, Bank is not subject to
or responsible for any material Environmental Liability which is not set forth
and adequately reserved against on the Latest Balance Sheet.
(b) "Environmental Law Requirement" means all applicable
present and future statutes, regulations, rules, ordinances, codes, licenses,
permits, orders, approvals, plans, authorizations, concessions, franchises and
similar items, of all governmental agencies, departments, commissions, boards,
bureaus, or instrumentalities of the United States, states and political
subdivisions thereof and all applicable judicial, administrative, and regulatory
decrees, judgments and orders relating to the protection of human health or the
environment, including without limitation: (A) all requirements, including but
not limited to those pertaining to reporting, licensing, permitting,
investigation, and remediation of emissions, discharges, releases, or threatened
releases of Hazardous Materials (as such term is defined below), chemical
substances, pollutants, contaminants, or hazardous or toxic substances,
materials or wastes whether solid, liquid, or gaseous in nature, into the air,
surface water, groundwater, or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
Hazardous Materials, chemical substances, pollutants, contaminants, or hazardous
or toxic substances, materials or wastes, whether solid, liquid, or gaseous in
nature; (B) all requirements pertaining to protection of the health and safety
of employees or the public; and (C) all requirements pertaining to the (i)
drilling, production, and abandonment of oil and gas wells, (ii) the
transportation of produced oil and gas, and (iii) the remediation of sites
related to that drilling, production or transportation.
(c) "Hazardous Materials" shall mean: (A) Any "hazardous
substance" as defined by either the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 USC Section 9601, et seq.) ("CERCLA")
as amended from time to time, or regulations promulgated thereunder; (B)
asbestos; (C) polychlorinated biphenyls; (D) any "regulated substance" as
defined by 40 C.F.R. Section 280.12, or the Florida Ad. Code, Title 62, Chapter
62-761 and Sec. 62-761.200; (E) any naturally occurring radioactive material
("NORM"), as defined by applicable federal or state laws or regulations as
amended from time to time, irrespective of whether the NORM is located in
Florida or another jurisdiction; (F) any non-hazardous oilfield wastes ("NOW")
defined under applicable federal or state laws or regulations, irrespective of
whether those wastes are located in Florida or another jurisdiction; (G) any
substance the presence of which on the Subject Properties is prohibited by any
lawful rules and regulations of legally constituted authorities from time to
time in force and effect relating to the Subject Properties; and (H) any other
substance which by any such rule or regulation requires special handling in its
collection, storage, treatment or disposal.
(d) "Environmental Liability" shall mean (i) any liability or
obligation arising under any Environmental Law Requirement, or (ii) any
liability or obligation under any other theory of law or equity (including
without limitation any liability for personal injury, property damage or
remediation) that results from, or is based upon or related to, the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling, or the emission, discharge, release or threatened release into the
environment, of any Hazardous Material, pollutant, contaminant, chemical, or
industrial, toxic or hazardous substance or waste.
3.19. Compliance with Laws. Bank is in compliance with all applicable
laws, rules, regulations, orders, writs, judgments and decrees the noncompliance
with which reasonably could be expected to have a material adverse effect on the
financial condition, results of operations or business of Bank. There are no
material uncured violations, or violations with respect to which material
refunds or restitution may be required, cited in any compliance report to
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Bank as a result of examination by any bank regulatory authority, except those
cited in examination reports previously submitted to, and reviewed by, Whitney.
3.20. Intellectual Property. Bank owns all trademarks, tradenames,
service marks and other intellectual property that is material to the conduct
of its business.
3.21. Community Reinvestment Act. Bank has complied in all material
respects with the provisions of the Community Reinvestment Act ("CRA") and the
rules and regulations thereunder, have CRA ratings of not less than
"satisfactory," and have received no material criticism from regulators with
respect to discriminatory lending practices, and have no knowledge of any
conditions or circumstances that are likely to result in CRA ratings of less
than "satisfactory" or material criticism from regulators with respect to
discriminatory lending practices.
3.22. Accuracy of Statements. No warranty or representation made or to
be made by Bank in this Agreement or in any document furnished or to be
furnished by Bank pursuant to this Agreement contains or will contain, as of the
date of this Agreement, the effective date of the Registration Statement (as
defined in subsection 5.14 hereof) and the Closing Date, an untrue statement of
a material fact or an omission of a material fact necessary to make the
statements contained herein and therein, in light of the circumstances in which
they are made, not misleading.
3.23. Examination Reports. To the extent permitted by applicable law,
Bank has provided to Whitney true and correct copies of all examination reports
with respect to Bank made by any federal or state bank regulatory authority
since December 31, 1991.
Section 4. Representations and Warranties of Whitney
Whitney represents and warrants to Bank that as of the date
hereof and as of the Closing Date:
4.01. Consolidated Group; Organization; Qualification. "Whitney's
consolidated group," as such term is used in this Agreement, consists of Whitney
and Whitney National Bank ("WNB"), and will include the Acquiring Bank upon its
formation, and, in addition includes Whitney Bank of Alabama and several other
subsidiaries. Whitney is a corporation duly organized and validly existing under
the laws of the State of Louisiana and is a bank holding company within the
meaning of the Bank Holding Company Act. WNB is a national banking association
duly organized and validly existing and in good standing under the laws of the
United States of America. Whitney has all requisite corporate power and
authority to own and lease its property and to carry on its business as it is
currently being conducted and to execute and deliver this Agreement and to
consummate the transactions contemplated hereby, and is qualified and in good
standing as a foreign corporation in all jurisdictions in which the failure to
so qualify would have a material adverse effect on its financial condition,
results of operations or business.
Pursuant to Section 1.01(a) of this Agreement, Whitney intends
to charter the Acquiring Bank and cause it to merge with Bank. At Closing, the
Acquiring Bank will be a national banking association duly organized, validly
existing and in good standing under the laws of the United States of America.
The Acquiring Bank will have all requisite corporate power and authority to own
and lease its property and to carry on its business as it is intended to be
conducted and to execute and deliver this Agreement and the Merger Agreement and
to consummate the transactions contemplated hereby and thereby, and will be
qualified and in good standing as a foreign corporation in all jurisdictions in
which the failure to so qualify would have a material adverse effect on its
financial condition, results of operations or business.
4.02. Capital Stock. As of the date of this Agreement, the authorized
capital stock of Whitney consists of 40,000,000 shares of Whitney Common Stock.
As of March 31, 1996, 17,024,694 shares of Whitney Common Stock were issued and
outstanding and 561,929 shares were held in its treasury. All issued and
outstanding shares of capital stock of Whitney have been duly authorized and are
validly issued, fully paid and non-assessable. All issued and outstanding shares
of capital stock of the Acquiring Bank will be duly authorized and validly
issued, fully paid and (except as provided in 12 U.S.C. Section 55)
non-assessable. Upon the formation of the Acquiring Bank, Whitney will own all
of the issued and outstanding shares of capital stock of the Acquiring Bank free
and clear of all liens, charges, security interests, mortgages, pledges and
other encumbrances.
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4.03. Corporate Authorization; No Conflicts. All corporate acts and
other proceedings required of Whitney for the due and valid authorization,
execution, delivery and performance of this Agreement and the Merger Agreement
and consummation of the Merger have been, or will be prior to Closing, validly
and appropriately taken. All corporate acts and other proceedings required of
the Acquiring Bank for the due and valid authorization, execution, delivery and
performance of this Agreement and the Merger Agreement and consummation of the
Merger will be validly and appropriately taken prior to Closing. Subject to such
regulatory approvals as are required by law, this Agreement and the Merger
Agreement are, and in the case of the Acquiring Bank will be, legal, valid and
binding obligations of Whitney and the Acquiring Bank as the case may be, and
are, and in the case of the Acquiring Bank will be, enforceable against them in
accordance with the respective terms of such agreements, except that enforcement
may be limited by bankruptcy, reorganization, insolvency and other similar laws
and court decisions relating to or affecting the enforcement of creditors'
rights generally and by general equitable principles. With respect to each of
Whitney and the Acquiring Bank, neither the execution, delivery or performance
of this Agreement or the Merger Agreement, nor the consummation of the
transactions contemplated hereby or thereby will (i) violate, conflict with, or
result in a breach of any provision of, (ii) constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
(iii) result in the termination of or accelerate the performance required by, or
(iv) result in the creation of any lien, security interest, charge or
encumbrance upon any of its properties or assets under, any of the terms,
conditions or provisions of its articles of incorporation or by-laws (or
comparable documents) or any material note, bond, mortgage, indenture, deed of
trust, lease, license, agreement or other instrument or obligation to or by
which it or any of its assets is bound; or violate any order, writ, injunction,
decree, statute, rule or regulation of any governmental body applicable to it or
any of its assets.
4.04. Financial Statements; Reports and Proxy Statements. (a) Whitney
has delivered to Bank true and complete copies of (i) the consolidated balance
sheets as of December 31, 1995 and December 31, 1994 of Whitney and its
consolidated subsidiaries, the related consolidated statements of operations,
changes in shareholders' equity and cash flows for the respective years then
ended, the related notes thereto, and the report of its independent public
accountants with respect thereto, as presented in Whitney's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995 filed with the SEC
(collectively, the "Whitney Financial Statements") and (ii) the unaudited
consolidated balance sheet as of March 31, 1996 of Whitney and its consolidated
subsidiaries and the related unaudited statements of operations and cash flows
for the three month period then ended (collectively, the "Whitney's Interim
Financial Statements").
(b) The Whitney Financial Statements and the Whitney Interim
Financial Statements have been prepared in conformity with GAAP applied on a
basis consistent with prior periods, and present fairly, in conformity with
GAAP, the consolidated results of operations of Whitney's consolidated group for
the respective periods covered thereby and the consolidated financial condition
of its consolidated group as of the respective dates thereof. All call and other
regulatory reports have been filed on the appropriate form and prepared in all
material respects in accordance with such form's instructions and the applicable
rules and regulations of the regulating federal agency. As of the date of the
latest balance sheet forming part of the Whitney Interim Financial Statements
(the "Whitney Latest Balance Sheet"), no member of Whitney's consolidated group
had, nor were any of any of such member's assets subject to, any material
liability, commitment, indebtedness or obligation (whether absolute, contingent,
matured or unmatured), which is not reflected and adequately reserved against in
the Whitney Latest Balance Sheet in accordance with GAAP. No report filed with
Federal Reserve Board or other bank regulatory body, as of the respective dates
thereof, contained and no such report filed after the date of this Agreement
will contain, any untrue statement of a material fact or omitted, or will omit,
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
4.05. Legality of Whitney Securities. All shares of Whitney Common
Stock to be issued pursuant to the Merger have been duly authorized and, when
issued pursuant to the Merger, will be validly and legally issued, fully paid
and non-assessable, and will be, at the time of their delivery, free and clear
of all liens, charges, security interests, mortgages, pledges and other
encumbrances and any preemptive or similar rights.
4.06. SEC Reports. Whitney has previously delivered to Bank an accurate
and complete copy of the following Whitney reports filed with the SEC pursuant
to the Exchange Act: (a) annual reports on Form 10-K for the years ended
December 31, 1993, 1994 and 1995 and (b) proxy statements for the years 1993,
1994 and 1995; as of their
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respective dates, no such Report or communication contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Whitney has timely
filed all reports and other documents required to be filed by it under the
Securities Act and the Exchange Act.
4.07. Absence of Certain Changes or Events. Since the date of the
Whitney Latest Balance Sheet, there has been no event or condition of any
character (whether actual or threatened) that has had, or can reasonably be
anticipated to have, a material adverse effect on the financial condition,
results of operations or business of Whitney's consolidated group taken as a
whole.
4.08. Legal Matters. (a) There are no material actions, suits,
proceedings, arbitrations or investigations pending or, to Whitney's knowledge
threatened, against any member of Whitney's consolidated group which would be
required to be disclosed in a Form 10-K or Form 10-Q pursuant to Item 103 of
Regulation S-K of the SEC's Rules and Regulations that are not so disclosed.
(b) There are no material uncured violations, or violations
with respect to which material refunds or restitution may be required, cited in
any compliance report to any member of Whitney's consolidated group as a result
of examination by any bank or bank holding company regulatory authority.
(c) No member of Whitney's consolidated group is subject to
any written agreement, memorandum or order or decree with or by any bank or bank
holding company regulatory authority.
4.09. Accuracy of Statements. No warranty or representation made or to
be made by any member of Whitney's consolidated group in this Agreement or in
any document furnished or to be furnished by any member of Whitney's
consolidated group pursuant to this Agreement contains or will contain, as of
the date of this Agreement, the effective date of the Registration Statement (as
defined in Subsection 5.14 hereof) and the Closing Date, an untrue statement of
a material fact or an omission of a material fact necessary to make the
statements contained herein and therein, in light of the circumstances in which
they are made, not misleading.
Section 5.Covenants and Conduct of Parties Prior to the Effective Date.
The parties further covenant and agree as follows:
5.01. (a) Investigations; Planning. Bank shall continue to provide to
Whitney and its authorized representatives full access during all reasonable
times to Bank's premises, properties, books and records (including, without
limitation, all corporate minutes and stock transfer records), and to furnish
Whitney and such representatives with such financial and operating data and
other information of any kind respecting Bank's business and properties as
Whitney shall from time to time reasonably request. Any investigation shall be
conducted in a manner which does not unreasonably interfere with the operation
of the business of Bank. Bank agrees to cooperate with Whitney in connection
with planning for the efficient and orderly combination of the parties and the
operation of Whitney and the Acquiring Bank after consummation of the Merger. In
the event of termination of this Agreement prior to the Effective Date, Whitney
shall, except to any extent necessary to assert any rights under this Agreement
or the Merger Agreement, return, without retaining copies thereof, or destroy
(and certify to same under penalty of perjury) all confidential or non-public
documents, work papers and other materials obtained from Bank in connection with
the transactions contemplated hereby and shall keep such information
confidential, not disclose such information to any other person or entity except
as may be required by legal process, and not use such information in connection
with its business, and shall cause all of its employees, agents and
representatives to keep such information confidential and not to disclose such
information or to use it in connection with its business, in each case unless
and until such information shall come into the public domain through no fault of
Whitney. Whitney shall continue to provide Bank's executive officers with access
to their respective executive officers, during normal business hours and upon
reasonable notice, to discuss the business and affairs of Whitney to the extent
customary in transactions of the nature contemplated by this Agreement.
(b) Delivery of Schedules of Exceptions; Due Diligence.
Whitney and Bank stipulate that they have entered into this Agreement prior to
Bank's delivery of its Schedule of Exceptions and prior to Whitney's completion
of Whitney's customary due diligence investigation of Bank. Bank shall deliver
to Whitney, on or before
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the 14th day following the date hereof, its Schedule of Exceptions. Upon such
delivery, such Schedule shall be initialed on behalf of Whitney and Bank, shall
be appended hereto and shall form a part hereof for all purposes. If Bank fails
to deliver its Schedule of Exceptions on or before the 14th day following the
date hereof, Whitney may terminate this Agreement without liability by giving
written notice of termination to Bank. Whitney's due diligence review shall be
concluded during a 21 calendar day period commencing on the first business day
following Bank's delivery to Whitney of its Schedule of Exceptions as provided
herein (the "Review Period"). At or prior to expiration of the Review Period,
Whitney shall elect, by written notice to Bank, to either (a) proceed to the
Closing (subject to the satisfaction or waiver of all other conditions to
Closing) or (b) terminate the Agreement without liability to Bank if, in its
sole and absolute discretion, it is not satisfied with the results of such due
diligence review or for any other reason. Absent timely delivery of written
notice electing to terminate this Agreement, Whitney shall be deemed to have
elected to proceed to the Closing, subject to all other terms and conditions of
this Agreement.
5.02. Cooperation and Best Efforts. Each of the parties hereto will
cooperate with the other parties and use its best efforts to (a) procure all
necessary consents and approvals of third parties, (b) complete all necessary
filings, registrations, applications, schedules and certificates, (c) satisfy
all requirements prescribed by law for, and all conditions set forth in this
Agreement to, the consummation of the Merger and the transactions contemplated
hereby and by the Merger Agreement, and (d) effect the transactions contemplated
by this Agreement and the Merger Agreement at the earliest practicable date.
5.03. Information for, and Preparation of, Registration Statement and
Proxy Statement. Each of the parties hereto will cooperate in the preparation of
the Registration Statement referred to in Section 5.14 and a proxy statement of
Bank (the "Proxy Statement") which complies with the requirements of the
Securities Act, the rules and regulations promulgated thereunder and other
applicable federal and state laws, for the purpose of registering the Whitney
Common Stock to be issued to the holders of Bank common Stock in the Merger, and
submitting this Agreement, the Merger Agreement and the transactions
contemplated hereby and thereby to Bank's shareholders for approval. Each of the
parties will as promptly as practicable after the date hereof furnish all such
data and information relating to it and its subsidiaries as any of the other
parties may reasonably request for the purpose of including such data and
information in the Registration Statement and the Proxy Statement.
5.04. Approval of the Merger Agreement. Whitney, as the sole
shareholder of the Acquiring Bank, shall take all action necessary to effect
shareholder approval of the Merger Agreement.
5.05. Press Releases. Whitney and Bank will cooperate with each other
in the preparation of any press releases announcing the execution of this
Agreement or the consummation of the transactions contemplated hereby. Without
the prior written consent of the chief executive officer of the other party,
neither Bank nor Whitney's consolidated group will issue any press release or
other written statement for general circulation relating to the transactions
contemplated hereby, except as may otherwise be required by law and, if
practical, prior notice of such release is provided to the other parties.
Whitney agrees that it will make a press release with respect to the results of
operations of Whitney and its consolidated group as promptly as practicable
following receipt of financial results covering at least thirty (30) days of
post-merger combined operations of Whitney to permit the termination of the
limitations set forth in the Shareholder Commitments on the ability of each
person referred to in Section 5.10 to resell shares of Whitney Common Stock in a
manner inconsistent with Whitney's ability to account for the Merger as a
pooling of interests.
5.06. Preservation of Business. To the extent consistent with sound
business practices, Bank will use its best efforts to preserve the possession
and control of all of its assets other than those consumed or disposed of for
value in the ordinary course of business to preserve the goodwill of customers
and others having business relations with it and to do nothing knowingly to
impair its ability to keep and preserve its business as it exists on the date of
this Agreement.
5.07. Conduct of Business in the Ordinary Course. Bank shall conduct
its business only in the ordinary course consistent with past practices, and
shall not, without the prior written consent of the chief executive officer of
Whitney or his duly authorized designee:
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(a) declare, set aside, increase or pay any dividend, or
declare or make any distribution on, or directly or indirectly combine, redeem,
reclassify, purchase, or otherwise acquire, any shares of its capital stock or
authorize the creation or issuance of or issue any additional shares of its
capital stock or any securities or obligations convertible into or exchangeable
for its capital stock, provided that this subparagraph shall not prevent any
issuance of shares of capital stock of Bank upon exercise of Bank Options;
(b) amend its articles of incorporation or by-laws or
adopt or amend any resolution or agreement concerning indemnification of its
directors or officers;
(c) enter into or modify any agreement so as to require the
payment, conditionally or otherwise, of any salary, bonus, extra compensation,
pension or severance payment to any of its present or former directors, officers
or employees except such agreements as are terminable at will without any
penalty or other payment by it; or, increase the compensation (including
salaries, fees, bonuses, profit sharing, incentive, pension, retirement or other
similar benefits and payments) of any such person in any manner inconsistent
with its past practices;
(d) except as described in the Schedule of Exceptions or
except in the ordinary course of business consistent with past practices, place
or suffer to exist on any of its assets or properties any mortgage, pledge,
lien, charge or other encumbrance, except those of the character described in
subsection 3.09 hereof, or cancel any material indebtedness owing to it or any
claims which it may have possessed, or waive any right of substantial value or
discharge or satisfy any material noncurrent liability;
(e) acquire another business or merge or consolidate with
another entity, or sell or otherwise dispose of a material part of its assets
or, except in the ordinary course of business consistent with past practices or
as described in the Schedule of Exceptions;
(f) commit any act that is intended or reasonably may be
expected to result in any of its representations and warranties set forth in
this Agreement being or becoming untrue in any material respect, or in any of
the conditions to the Merger set forth in Section 6 not being satisfied, or in a
violation of any provision of this Agreement, except, in every case, as may be
required by applicable law;
(g) commit or fail to take any act which act or omission is
intended or reasonably may be expected to result in a material breach or
violation of any applicable law, statute, rule, governmental regulation or
order;
(h) fail to maintain its books, accounts and records in
the usual manner on a basis consistent with that heretofore employed;
(i) fail to pay, or to make adequate provision in all material
respects for the payment of, all taxes, interest payments and penalties due and
payable (for all periods up to the Effective Date, including that portion of its
fiscal year to and including the Effective Date) to any city, county, state, the
United States or any other taxing authority, except those being contested in
good faith by appropriate proceedings and for which sufficient reserves have
been established;
(j) dispose of investment securities in amounts or in a manner
inconsistent with past practices; or make investments in non-investment grade
securities or which are inconsistent with past investment practices;
(k) enter into any new line of non-banking business;
(l) (i) except as described in the Schedule of Exceptions,
charge off (except as may otherwise be required by law or by regulatory
authorities or by GAAP consistently applied) or sell (except for a price not
materially less than the value thereof) any of its portfolio of loans, discounts
or financing leases, or (ii) except as set forth on Schedule of Exceptions, sell
any asset held as other real estate or other foreclosed assets for an amount
materially less than 100% of its book value at the date of the Latest Balance
Sheet;
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(m) make any extension of credit which, when added to all
other extensions of credit to a borrower and its affiliates, would exceed Bank's
applicable regulatory lending limits;
(n) take or cause to be taken any action which would
disqualify the Merger as a "pooling of interests" for accounting purposes or as
a "reorganization" within the meaning of Section 368(a) of the Code; or
(o) agree or commit to do any of the foregoing.
5.08. Additional Information. Bank will provide Whitney (a) with prompt
written notice of any material adverse change in the financial condition,
results of operations, business or prospects of Bank, any material breach by
Bank of any of its warranties, representations or covenants in this Agreement,
or any material action taken or proposed to be taken with respect to Bank by any
regulatory agency, (b) as soon as they become available, copies of any financial
statements, reports and other documents of the type referred to in Section 3.04
with respect to Bank, and (c) promptly upon its dissemination, any report
disseminated to its shareholders. Whitney will provide Bank (a) with prompt
written notice of any material breach by Whitney of any of its warranties,
representations or covenants in this Agreement and (b) as soon as they become
available, copies of any reports or other documents of the type referred to in
Section 4.06 of this Agreement with respect to Whitney.
5.09. Bank Shareholder Approval. Bank's Board of Directors shall submit
this Agreement and the Merger Agreement to its shareholders for approval in
accordance with the applicable law, together with its recommendation that such
approval be given, at a special meeting of the shareholders of Bank duly called
and convened for that purpose as soon as practicable after the effective date of
the Registration Statement.
5.10. Restricted Whitney Common Stock. Bank will use its best efforts
to obtain as soon as practicable but in no event later than 30 days prior to the
Closing Date an agreement from each person who is a director, executive officer
or 5% beneficial owner of securities of Bank who will receive shares of Whitney
Common Stock by virtue of the Merger to the effect that such person will not
dispose of any Bank Common Stock or Bank Options held by them or any Whitney
Common Stock they received pursuant to the Merger (a) in a manner that would
disqualify the transactions contemplated hereby from pooling of interests
accounting treatment or (b) in the case of Whitney Common Stock received
pursuant to the Merger, in violation of Rule 145 of the Securities Act or the
rules and regulations of the SEC thereunder.
5.11. Loan Policy. Bank will not make any loans, or enter into any
commitments to make loans, which vary other than in immaterial respects from its
written loan policies, a true and correct copy of which loan policies will be
provided to Whitney concurrently with Bank's Schedule of Exceptions, provided
that this covenant shall not prohibit Bank from extending or renewing credit or
loans in the ordinary course of business consistent with past lending practices
or in connection with the workout or renegotiation of loans in its loan
portfolio on the date hereof.
5.12. No Solicitations. (a) Prior to the Effective Time or until the
termination of this Agreement, Bank shall not, without the prior approval of
Whitney, directly or indirectly, solicit, initiate or encourage inquiries or
proposals with respect to, or, except to the extent required in the written
opinion of its counsel to discharge properly fiduciary duties, furnish any
information relating to, or participate in any negotiations or discussions
concerning, any acquisition or purchase of all or a substantial portion of its
assets, or of a substantial equity interest in it, or any business combination
with it, other than as contemplated by transaction of the type that is referred
to in clauses (B) (i), (ii) and (iii) of subparagraph (f) of subsection 7.01 of
this Agreement (and in no event will any such information be supplied except
pursuant to a confidentiality agreement in form and substance substantially the
same as the confidentiality agreement between Bank and Whitney); and Bank shall
instruct its officers, directors, agents and affiliates to refrain from doing
any of the above, and will notify Whitney immediately if any such inquiries or
proposals are received by it, any such information is requested from it, or any
such negotiations or discussions are sought to be initiated with it or any of
its officers, directors, agents and affiliates; provided, however, that nothing
contained herein shall be deemed to prohibit any officer or director of Bank
from taking any action that in the written opinion of counsel of Bank is
required by law or is required to discharge his fiduciary duties to Bank and its
shareholders.
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(b) Neither the Board of Directors of Bank nor any committee
thereof shall (i) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Whitney, the approval or recommendation to shareholders of
this Agreement or the Merger, (ii) approve or recommend, or propose to recommend
any takeover proposal with respect to Bank, except such action that is required
in the written opinion of its counsel to discharge its fiduciary duties to Bank
and its shareholders, or (iii) modify or waive or release any party from any
provision of, or fail to enforce any provision of, if Whitney so requests such
enforcement, any confidentiality agreement entered into by Bank with any
prospective acquiror after the date of this Agreement or within two years prior
to such date.
5.13. Operating Functions. Bank agrees to cooperate in the
consolidation of appropriate operating functions with Whitney and the Acquiring
Bank to be effective on the Effective Date, provided that the foregoing shall
not be deemed to require any action that, in the opinion of the Bank's Board of
Directors, would adversely affect its operations if the Merger was not
consummated.
5.14. Whitney Registration Statement. (a) Whitney will prepare and file
on Form S-4 a registration statement (the "Registration Statement") under the
Securities Act (which will include the Proxy Statement) complying with all the
requirements of the Securities Act applicable thereto, for the purpose, among
other things, of registering the Whitney Common Stock that will be issued to the
holders of Bank Common Stock pursuant to the Merger. Whitney shall use its best
efforts to cause the Registration Statement to become effective as soon as
practicable, to qualify the Whitney Common Stock under the securities or blue
sky laws of such jurisdictions as may be required and to keep the Registration
Statement and such qualifications current and in effect for so long as is
necessary to consummate the transactions contemplated hereby. As a result of the
registration of the Whitney Common Stock pursuant to the Registration Statement,
such stock shall be freely tradeable by the shareholders of Bank except to the
extent that the transfer of any shares of Whitney Common Stock received by
shareholders of Bank is subject to the provisions of Rule 145 under the
Securities Act or restricted under applicable tax or pooling of interests rules.
(b) Whitney will indemnify and hold harmless Bank and its
respective directors, officers and other persons, if any, who control Bank
within the meaning of the Securities Act from and against any losses, claims,
damages, liabilities or judgments, joint or several, to which they or any of
them may become subject, insofar as such losses, claims, damages, liabilities,
or judgments (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, or in any amendment or supplement thereto, or in any
state application for qualification, permit, exemption or registration as a
broker/dealer, or in any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each such person for any legal or other expenses
reasonably incurred by such person in connection with investigating or defending
any such action or claim; provided, however, that Whitney shall not be liable,
in any such case, to the extent that any such loss, claim, damage, liability, or
judgment (or action in respect thereof) arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, or any such amendment or supplement thereto,
or in any such state application, or in any amendment or supplement thereto, in
reliance upon and in conformity with information written furnished to Whitney by
or on behalf of Bank or any officer, director or affiliate of Bank for use
therein.
5.15. Application to Regulatory Authorities. Whitney shall prepare,
as promptly as practicable, all regulatory applications and filings which are
required to be made with respect to the Merger.
5.16. Revenue Ruling. Whitney may elect to prepare (and in that event
Bank shall cooperate in the preparation of) a request for a ruling from the
Internal Revenue Service with respect to certain tax matters in connection with
the transactions contemplated by this Agreement and the Merger Agreement.
5.17. Bond for Lost Certificates. Upon receipt of notice from any of
its shareholders that a certificate representing Bank Common Stock has been lost
or destroyed and prior to issuing a new certificate, Bank shall require such
shareholder to post a bond in such amount as is sufficient to support the
shareholder's agreement to indemnify Bank against any claim made by the owner of
such certificate, unless Whitney agrees to the waiver of such bond requirement.
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5.18. Dissenters. Bank shall give Whitney (i) prompt written notice of,
and a copy of, any instrument received by Bank with respect to the assertion or
perfection of dissenters rights, and (ii) the opportunity to participate in any
and all negotiations and proceedings with respect to dissenters rights, should
Whitney desire to do so.
5.19. Withholding. Whitney shall be entitled to deduct and withhold
from the consideration otherwise payable to any holder of Bank Common Stock
after the Effective Time such amounts as Whitney may be required by law to
deduct and withhold therefrom. All such deductions and withholdings shall be
deemed for all purposes of this Agreement and the Merger Agreement to have been
paid to the person with respect to whom such deduction and withholding was made.
5.20. Employees and Certain Other Matters. All employees of Bank at the
Effective Time shall become employees of the Acquiring Bank. The Acquiring Bank
retains the right to terminate any such employee, and to modify the job duties,
compensation and authority of such employee. At the Effective Time, all persons
then employed by Bank shall be eligible for such employee benefits as are
generally available to employees of Whitney's Louisiana and Alabama banking
subsidiaries having like tenure, officer status and compensation levels except
(i) all executive and senior level management bonuses, stock options, restricted
stock and similar benefits shall be at the discretion of the Acquiring Bank's
Compensation Committee and (ii) all Bank employees who are employed at the
Effective Time shall be given full credit for all prior service as employees of
Bank provided, however, that all such employees shall be treated as newly hired
Acquiring Bank employees (i.e., prior service credit with Bank shall not be
considered in determining future benefits under Whitney's or Whitney's banking
subsidiaries defined benefit pension plan) for all purposes of Whitney's or
Whitney's Louisiana and Alabama banking subsidiaries' defined benefit pension
plan.
5.21. Continuing Indemnity; Insurance. Whitney covenants and agrees
that:
(a) All rights to indemnification and all limitations of
liability existing in favor of indemnified parties under Bank's Articles of
Incorporation and By-Laws as in effect as of the date of this Agreement with
respect to matters occurring prior to or at the later to occur of the Effective
Time shall survive the Merger and shall continue in full force and effect,
without any amendment thereto, for a period of three (3) years from such
applicable effective time; provided, however, that all rights to indemnification
in respect of any claim asserted or made as to which Whitney is notified within
such period shall continue until the final disposition of such claim.
(b) Whitney shall use best efforts to cause the persons
serving as officers and directors of Bank immediately prior to the Effective
Time to be covered for a period of three (3) years from such applicable
effective time by the directors' and officers' liability insurance policy
maintained by Bank with respect to acts or omissions occurring prior to or at
the respective effective times which were committed by such officers and
directors in their capacity as such; provided that Whitney may substitute
therefor policies of at least the same coverage and amounts containing terms and
conditions which are no less advantageous to such directors and officers, and,
provided further that Whitney shall not be obligated to make premium payments
for the insurance policies provided by this Section 5.21 to the extent that such
premiums exceed $19,000 in the aggregate.
(c) If Whitney or any of its successors or assigns (i) shall
consolidate with or merge into any corporation or entity and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) shall transfer all or substantially all of its properties and assets to any
individual, corporation or other entity, then and in each such case, proper
provisions shall be made so that the successors and assigns of Whitney shall
assume the obligations set forth in this Section 5.21.
(d) The provisions of this Section 5.21 are intended to be for
the benefit of, and shall be enforceable by, each indemnified party and his or
her heirs and representatives.
Section 6. Conditions of Closing
6.01. Conditions of All Parties. The obligations of each of the
parties hereto to consummate the Merger are subject to the satisfaction of the
following conditions at or prior to the Closing:
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(a) Shareholder Approval. This Agreement and the Merger
Agreement shall have been duly approved by the shareholders of Bank.
(b) Effective Registration Statement. The Registration
Statement shall have become effective prior to the mailing of the Proxy
Statement, no stop order suspending the effectiveness of the Registration
Statement shall have been issued, and no proceedings for that purpose shall have
been instituted or, to the knowledge of any party, shall be contemplated, and
Whitney shall have received all state securities laws permits and authorizations
necessary to consummate the transactions contemplated hereby.
(c) No Restraining Action. No action or proceeding shall have
been threatened or instituted before a court or other governmental body to
restrain or prohibit the transactions contemplated by the Merger Agreement or
this Agreement or to obtain damages or other relief in connection with the
execution of such agreements or the consummation of the transactions
contemplated hereby or thereby; and no governmental agency shall have given
notice to any party hereto to the effect that consummation of the transactions
contemplated by the Merger Agreement or this Agreement would constitute a
violation of any law or that it intends to commence proceedings to restrain
consummation of the Merger.
(d) Statutory Requirements and Regulatory Approval. All
statutory requirements for the valid consummation of the transactions
contemplated by the Merger Agreement and this Agreement shall have been
fulfilled; all appropriate orders, consents and approvals from all regulatory
agencies and other governmental authorities whose order, consent or approval is
required by law for the consummation of the transactions contemplated by this
Agreement and the Merger Agreement shall have been received; and the terms of
all requisite orders, consents and approvals shall then permit the effectuation
of the Merger without imposing any material conditions with respect thereto
except for any such conditions that are acceptable to Whitney.
(e) Tax Opinion. Whitney and Bank shall have received the
opinion of Arthur Andersen LLP, in form and substance reasonably satisfactory to
both of them, as to certain tax aspects of the Merger, including an opinion that
the receipt of Whitney Common Stock by Bank's shareholders will not be a taxable
event to such shareholders.
6.02. Additional Conditions of Whitney. The obligations of Whitney
and the Acquiring Bank to consummate the Merger are also subject to the
satisfaction of the following additional conditions at or prior to the Closing:
(a) Representations, Warranties and Covenants. The
representations and warranties of Bank contained in this Agreement shall be true
and correct in all material respects, individually and in the aggregate, on and
as of the Closing Date, with the same effect as though made on and as of such
date, except to the extent of changes permitted by the terms of this Agreement,
and Bank shall have in all material respects performed all obligations and
complied with all covenants required by this Agreement and the Merger Agreement
to be performed or complied with by it at or prior to the Closing. In addition,
Bank shall have delivered to Whitney and the Acquiring Bank its certificate
dated as of the Closing Date and signed by its chief executive officer and chief
financial officer to the effect that, except as specified in such certificate,
such persons do not know, and have no reasonable grounds to know, of any
material failure or breach of any representation, warranty or covenant made by
it in this Agreement.
(b) No Material Adverse Change. There shall not have occurred
any material adverse change from the date of the Latest Balance Sheet to the
Closing Date in the financial condition, results of operations or business of
Bank. Without limiting the occurrences that would constitute such a material
adverse change with respect to Bank, a decrease in the value of Bank's
investment portfolio of 15% or more from its value on March 31, 1996
attributable to changes in general interest rate environment shall be deemed to
constitute such a change. A decline of not more than 30% in the "preferred
checking" accounts balances as of March 31, 1996 shall not be deemed a material
adverse change.
(c) Accountants' Letters. Whitney shall have received
"comfort" letters from Saltmarsh, Cleveland & Gund, independent public
accountants for Bank, dated, respectively, within three (3) days prior to the
date
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of the Proxy Statement and within three (3) days prior to the Closing
Date, in customary form for transactions of this sort and in substance
satisfactory to Whitney.
(d) Opinion of Counsel. Whitney shall have received from
Emmanuel, Sheppard and Condon, special counsel to Bank, opinions, dated as of
the Closing Date, in form and substance satisfactory to Whitney. In giving such
opinions, such counsel may rely as to questions of fact upon certificates of one
or more officers of Bank and governmental officials.
(e) Tax Consequences of Merger. Whitney shall have
received satisfactory assurances from their independent accountants that the
consummation of the Merger will not be a taxable event to Whitney and the
Acquiring Bank.
(f) Pooling of Interest. Prior to the expiration of the Review
Period and within three (3) days prior to the Closing Date, Saltmarsh, Cleveland
& Gund shall have rendered an opinion to Whitney, in form and substance
satisfactory to Whitney, to the effect that, based upon the facts and
circumstances then known to Saltmarsh, Cleveland & Gund, Whitney will be
permitted to account for the Merger as a pooling of interests. Neither Whitney's
independent accountants nor the SEC shall have taken the position that the
transactions contemplated by this Agreement and the Merger Agreement do not
qualify for pooling of interests accounting treatment.
(g) Shareholder's Commitment. A Shareholder's Commitment
substantially in the form specified on Exhibit 6.02(g) hereto (as contemplated
by Section 5.10) shall have been executed by each person who serves as an
executive officer or director of Bank or who owns 5% or more of the Bank Common
Stock outstanding; and Whitney shall have received from each such person a
written confirmation dated not earlier than five days prior to the Closing Date
to the effect that each representation made in such person's Shareholder's
Commitment is true and correct as of the date of such confirmation and that such
person has complied with all of his or her covenants therein through the date of
such confirmation.
(h) Regulatory Action. No adverse regulatory action shall be
pending or threatened against Bank, including (without limitation) any proposed
amendment to any existing agreement, memorandum, letter, order or decree, formal
or informal, between any regulator and Bank, if such action would or could
impose any material liability on Whitney or interfere in any material respect
with the conduct of the businesses of Whitney's consolidated group following the
Merger.
(i) Average Market Price. The Average Market Price of the
Whitney Common Stock as calculated in accordance with Section 2.01 (but without
regard to the proviso contained therein) shall not be more than $35.00, provided
that Whitney may not terminate this Agreement pursuant to this Section 6.02(i)
if Whitney has executed a definitive merger or other acquisition agreement as a
result of which Whitney would cease to be an independent, public company.
6.03. Additional Conditions of Bank. The obligations of Bank to
consummate the Merger are also subject to the satisfaction of the following
additional conditions at or prior to the Closing:
(a) Representations, Warranties and Covenants. The
representations and warranties of Whitney and the Acquiring Bank contained in
this Agreement shall be true and correct in all material respects, individually
and in the aggregate, on the Closing Date, with the same effect as though made
on and as of such date, except to the extent of changes permitted by the terms
of this Agreement, and each of Whitney and the Acquiring Bank shall have in all
material respects performed all obligations and complied with all covenants
required by this Agreement and the Merger Agreement to be performed or complied
with by it at or prior to the Closing. In addition, each of Whitney and the
Acquiring Bank shall have delivered to Bank its certificate dated as of the
Closing Date and signed by its chief executive officer and chief financial
officer to the effect that, except as specified in such certificate, such
persons do not know, and have no reasonable grounds to know, of any material
failure or breach of any representation, warranty or covenant made by it in this
Agreement.
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(b) Opinion of Counsel. Bank shall have received from Milling,
Benson, Woodward, Hillyer, Pierson & Miller, counsel for Whitney and the
Acquiring Bank, an opinion, dated as of the Closing Date, customary in scope and
in form and substance satisfactory to Bank. In giving such opinion, such counsel
may rely as to questions of fact upon certificates of one or more officers of
Whitney or members of Whitney's consolidated group, and governmental officials
and as to matters of law other than Louisiana or federal law on the opinions of
foreign counsel retained by them or Whitney.
(c) Opinion of Investment Bankers. Bank shall have received
letters from Allen C. Ewing & Company dated the date of the mailing of the Proxy
Statement to shareholders of Bank and dated the date of the meeting of the
shareholders of Bank, in each case in form and substance satisfactory to Bank,
confirming such financial advisor's prior opinion to the Board of Directors of
Bank to the effect that the consideration to be paid in the Merger is fair to
its shareholders from a financial point of view.
(d) Tax Opinion. Bank shall have received the opinion of
Arthur Andersen LLP as to certain tax aspects of the transactions contemplated
by this Agreement and the Merger Agreement, in form and substance satisfactory
to Bank.
(e) No Material Adverse Change. There shall not have occurred
any material adverse change from Whitney's Latest Balance Sheet to the Effective
Date in the financial condition, results of operations or business of Whitney's
consolidated group taken as a whole.
(f) Average Market Price. The Average Market Price of the
Whitney Common Stock as calculated in accordance with Section 2.01 (but without
regard to the proviso contained therein) shall not be less than $27.00.
6.04. Waiver of Conditions. Any condition to a party's obligations
hereunder may be waived by that party, other than the conditions specified in
subparagraphs (a), (b) and (d) of subsection 6.01 hereof and the condition
specified in subparagraph (c) of subsection 6.03 hereof. The failure to waive
any condition hereunder shall not be deemed a breach of subsection 5.02 hereof.
Section 7. Termination
7.01. Termination. This Agreement and the Merger Agreement may be
terminated and the Merger contemplated herein abandoned at any time before the
Effective Time, whether before or after approval by the shareholders of Bank:
(a) Mutual Consent. By the mutual consent of the Boards
of Directors of Whitney and Bank.
(b) Breach. By the Board of Directors of either Whitney or
Bank in the event of a breach by the other of any representation or warranty
contained in this Agreement or of any covenant contained in this Agreement,
which in either case cannot be, or has not been, cured within 15 days after
written notice of such breach is given to the entity committing such breach,
provided that the right to effect such cure shall not extend beyond the date set
forth in subparagraph (c) below.
(c) Abandonment. By the Board of Directors of either Whitney
or Bank if (i) all conditions to Closing required by Section 6 hereof have not
been met by or waived by Whitney or Bank by December 31, 1996, or (ii) any such
condition cannot be met by December 31, 1996 and has not been waived by each
party in whose favor such condition inures, or (iii) if the Merger has not been
consummated by December 31, 1996, provided that the failure to consummate the
transactions contemplated hereby is not caused by the party electing to
terminate pursuant to this clause (iii).
(d) Dissenting Shareholders. By Whitney, if the number of
shares of Bank Common Stock as to which the holders thereof are, at the time of
the Closing, legally entitled to assert dissenting shareholders rights plus the
number of such shares as to which the holders thereof are entitled to receive
cash payments in lieu of fractional
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shares exceeds that number of shares of Bank Common Stock that would preclude
pooling of interests accounting for the Merger.
(e) Shareholder Vote. By Whitney if this Agreement or
the Merger fails to receive the requisite vote at any meeting of Bank
shareholders called for the purpose of voting thereon.
(f) Bank Recommendation. By Whitney if the Board of Directors
of Bank (A) shall withdraw, modify or change its recommendation to its
shareholders of this Agreement or the Merger or shall have resolved to do any of
the foregoing; (B) shall have recommended to the shareholders of Bank (or in the
case of (iii) approved) any of the following (being referred to herein as an
"Acquisition Transaction") (i) any merger, consolidation, share exchange,
business combination or other similar transaction (other than the transactions
contemplated by this Agreement); (ii) any sale, lease, transfer or other
disposition of all or substantially all of the assets of Bank; or (iii) any
acquisition, by any person or group, of the beneficial ownership of 15% or more
of any class of Bank capital stock; or (C) shall have made any announcement of a
proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.
(g) Prior to Notification Date. By Whitney by delivery
of a notice to terminate this Agreement pursuant to Section 5.01(b).
(h) Acquisition Transaction. By Bank in the event Bank
receives a written offer with respect to an Acquisition Transaction and the
Board of Directors of Bank determines in good faith, after consultation with its
financial advisors and counsel, that such Acquisition Transaction is more
favorable to Bank's shareholders than the transactions contemplated by this
Agreement.
7.02. Effect of Termination; Survival. Upon termination of this
Agreement pursuant to this Section 7, the Merger Agreement shall also terminate,
and this Agreement and the Merger Agreement shall be void and of no effect, and
there shall be no liability by reason of this Agreement or the Merger Agreement,
or the termination thereof, on the part of any party or their respective
directors, officers, employees, agents or shareholders except for any liability
of a party hereto arising out of (i) an intentional breach of any
representation, warranty or covenant in this Agreement prior to the date of
termination, except if such breach was required by law or by any bank or bank
holding company regulatory authority or (ii) a breach of any covenant that
survives pursuant to the following sentence. The following provisions shall
survive any termination of this Agreement: the second to last sentence of
subsection 5.01(a); subsection 7.02; subsection 7.03 and Section 8.
7.03. Termination Fee. If this Agreement is terminated pursuant to
7.01(h), then Bank shall pay or cause to be paid to Whitney upon demand a fee of
$500,000 (the "Termination Fee"), payable in same day funds.
Section 8. Miscellaneous
8.01. Notices. Any notice, communication, request, reply, advice or
disclosure (hereinafter severally and collectively "notice") required or
permitted to be given or made by any party to another in connection with this
Agreement or the Merger Agreement or the transactions herein or therein
contemplated must be in writing and may be given or served by depositing the
same in the United States mail, postage prepaid and registered or certified with
return receipt requested, or by delivering the same to the address of the person
or entity to be notified, or by sending the same by a national commercial
courier service (such as Airborne Express, Federal Express, Emery Air Freight,
Network Courier, Purolator or the like) for next-day delivery provided such
delivery is confirmed in writing by such courier. Notice deposited in the mail
in the manner hereinabove described shall be effective 48 hours after such
deposit, and notice delivered in person or by commercial courier shall be
effective at the time of delivery. A party delivering notice shall endeavor to
obtain a receipt therefor. For purposes of notice, the addresses of the parties
shall, until changed as hereinafter provided, be as follows:
If to Whitney or the Acquiring Bank:
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Whitney Holding Corporation
Attention: Mr. William Marks
228 St. Charles Avenue
New Orleans, Louisiana 70130
With copies to:
Whitney National Bank
Legal Department
Attention: Joseph S. Schwertz, Jr.
228 St. Charles Avenue
New Orleans, Louisiana 70130
If to Bank:
American Bank and Trust
Attention: Lamar B. Cobb
President and Chief Executive Officer
101 West Garden Street
Pensacola, Florida 32501
With copies to:
Emmanuel, Sheppard & Condon
Attention: Patrick G. Emmanuel
30 South Spring
Pensacola, Florida 32596
8.02. Waiver. The failure by any party to enforce any of its rights
hereunder shall not be deemed to be a waiver of such rights, unless such waiver
is an express written waiver which has been signed by the waiving party. Waiver
of any one breach shall not be deemed to be a waiver of any other breach of the
same or any other provision hereof.
8.03. Expenses. Except as otherwise provided herein, regardless of
whether the Merger is consummated, all expenses incurred in connection with this
Agreement and the Merger Agreement and the transactions contemplated hereby and
thereby shall be borne by the party incurring them.
8.04. Headings. The headings in this Agreement have been included
solely for reference and shall not be considered in the interpretation or
construction of this Agreement.
8.05. Annexes, Exhibits and Schedules. The annexes, exhibits and
schedules to this Agreement are incorporated herein by this reference and
expressly made a part hereof.
8.06. Integrated Agreement. This Agreement, the Merger Agreement, the
exhibits and schedules hereto and all other documents and instruments delivered
in accordance with the terms hereof constitute the entire understanding and
agreement among the parties hereto with respect to the subject matter hereof,
and there are no agreements, understanding, restrictions, representations or
warranties among the parties other than those set forth herein or therein, all
prior agreements and understandings being superseded hereby.
8.07. Choice of Law. The validity of this Agreement and the Merger
Agreement, the construction of their terms and the determination of the rights
and duties of the parties hereto in accordance therewith shall be governed by
and construed in accordance with the laws of the United States and those of the
State of Louisiana applicable to contracts
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made and to be performed wholly within such State, except to the extent that the
laws of the State of Florida require this Agreement and the Merger Agreement to
be governed by the laws of that state.
8.08. Parties in Interest. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that this Agreement may not be transferred or assigned by Bank or any
member of Whitney's consolidated group without the prior written consent of the
other parties hereto, including any transfer or assignment by operation of law.
Nothing in this Agreement or the Merger Agreement is intended or shall be
construed to confer upon or to give any person other than the parties hereto any
rights or remedies under or by reason of this Agreement or the Merger Agreement,
except as expressly provided for herein and therein.
8.09. Amendment. The parties may, by mutual agreement of their
respective Boards of Directors, amend, modify or supplement this Agreement, the
Merger Agreement, or any exhibit or schedule of any of them, in such manner as
may be agreed upon by the parties in writing, at any time before or after
approval of this Agreement and the Merger Agreement and the transactions
contemplated hereby and thereby by the shareholders of the parties hereto. This
Agreement and any exhibit or schedule to this Agreement may be amended at any
time and, as amended, restated by the chief executive officers of the respective
parties (or their respective designees) without the necessity for approval by
their respective Boards of Directors or shareholders, to correct typographical
errors or to change erroneous references or cross references, or in any other
manner which is not material to the substance of the transactions contemplated
hereby.
8.10. Counterparts. This Agreement may be executed by the parties
in any number of counterparts, all of which shall be deemed an original, but all
of which taken together shall constitute one and the same document.
8.11. Non-Survival of Representations and Warranties; Covenants. None
of the representations and warranties in this Agreement or in any instrument
delivered pursuant hereto shall survive the Effective Time of the Merger. Each
party hereby agrees that its sole right and remedy with respect to any breach of
a representation or warranty or covenant by the other party shall be not to
close the transactions described herein if such breach results in the
nonsatisfaction of a condition set forth in Section 6 hereof; provided, however,
that the foregoing shall not be deemed to be a waiver of any claim for an
intentional breach of a representation, warranty or covenant or for fraud except
if such breach is required by law or by any bank or bank holding company
regulatory authority; it being understood that a disclosure in any closing
certificate provided in accordance with subparagraph (a) of subsection 6.02 or
subparagraph (a) of subsection 6.03 hereof concerning an inaccuracy of a
representation or warranty shall not of itself be deemed to be an intentional
breach of such representation or warranty. The covenants of the parties set
forth herein shall survive the Effective Time in accordance with their terms.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
WHITNEY HOLDING CORPORATION
BY: /s/ William L. Marks
-------------------------
William L. Marks
ITS: Chairman and CEO
AMERICAN BANK AND TRUST
BY: /s/ Frank Westmark
-------------------------
Frank Westmark
ITS: Chairman of the Board of Directors
BY: /s/ Lamar B. Cobb
------------------------
Lamar B. Cobb
ITS: President & Chief Executive Officer
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Exhibit 1.01(b) to
Agreement and Plan of Merger
AGREEMENT OF MERGER
OF
AMERICAN BANK AND TRUST
INTO
ACQUIRING BANK
THIS AGREEMENT OF MERGER (this "Agreement") is made and entered into as
of this ______ day of ______________________, 199___, between American Bank and
Trust, a Florida state chartered bank, domiciled at Pensacola, Florida
("Target") and Acquiring Bank, a national banking association, organized under
the laws of the United States (the "Acquiring Bank" or the "Receiving
Association").
WHEREAS, as required by law, at least a majority of the members of the
respective Boards of Directors of Acquiring Bank and Target (collectively called
the "Merging Associations") deem it advisable that Target be merged with and
into Acquiring Bank (the "Merger"), as provided in this Agreement and in the
Agreement and Plan of Merger dated April _____, 1996 (the "Plan"), among the
Merging Associations and Whitney Holding Corporation, a Louisiana corporation
("Whitney"), of which Acquiring Bank is a wholly-owned subsidiary, which sets
forth, among other things, certain representations, warranties, covenants and
conditions relating to the Merger; and
WHEREAS, as required by law, at least a majority of the members of the
respective Boards of Directors of the Merging Associations wish to enter into
this Agreement and submit it to the respective shareholders of the Merging
Associations for approval in the manner required by law and, subject to said
approval and to approval by the Office of the Comptroller of the Currency (the
"OCC") and the Department of Banking and Finance of the Office of the
Comptroller of Florida being duly given and to such other approvals as may be
required by law, to effect the Merger, all in accordance with the provisions of
this Agreement.
NOW THEREFORE, in consideration of the mutual benefits to be derived
from this Agreement and the Merger, the parties hereto agree as follows:
1. The Merger. At the Effective Time (as defined in Section 2 hereof),
Target shall be merged with and into Acquiring Bank under the Articles of
Association of Acquiring Bank, existing Charter No. ___________, pursuant to the
provisions of, and with the effect provided in, 12 U.S.C. ss.215a, et seq. and
Florida Banking Code, Section 658:41. At the Effective Time, Acquiring Bank, the
Receiving Association, shall continue to be a national banking association, and
its business shall continue to be conducted at its main office in Pensacola,
Florida, and at its legally established branches (including, without limitation,
the legally established offices from which Target conducted business immediately
prior to the Effective Time). The Articles of Association of Acquiring Bank
shall not be altered or amended by virtue of the Merger, and the incumbency of
the directors and officers of Acquiring Bank shall not be affected by the Merger
nor shall any person succeed to such positions by virtue of the Merger.
2. Effective Time. The Merger shall become effective at the time
specified or permitted by the OCC or in the certificate or other written record
issued by the OCC (the "Effective Time").
3.1 Conversion of Capital Stock of Target. Subject to the provisions of
this Section 3, at the Effective Time, by virtue of the Merger and without any
action on the part of the holders thereof, (i) the shares of Target common
stock, par value $2.50 per share ("Target Common Stock"), and (ii) the
unexercised options to acquire shares of Target
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<PAGE>
Common Stock granted under Target's Directors' Stock Option Plan of 1993 (the
"Target Options"), shall be converted as follows:
(a) Exchange Ratio for Target Common Stock. Except for (i)
shares issued and outstanding immediately prior to the Effective Time as to
which dissenters' rights have been perfected and not withdrawn or otherwise
forfeited under 12 U.S.C. ss.215a ("Dissenters' Shares") and (ii) shares of
Target Common Stock held by Target as treasury shares (which shall by reason of
the Merger be cancelled), and subject to the provisions of Section 3.01(b)
relating to fractional shares, each issued and outstanding share of Target
Common Stock shall be converted into and become that number of shares of Whitney
common stock, no par value ("Whitney Common Stock") that is equal to the
quotient (the "Exchange Ratio") obtained by dividing the Maximum Deliverable
Amount (as hereinafter defined) by the total number of issued and outstanding
shares (not treasury shares) of Target Common Stock at the Effective Time.
(i) Acquisition Price for Target Common Stock.
The term "Acquisition Price" means $10,250,000, minus the Deductible Amount
(as hereinafter defined) plus the amount of actual cash proceeds received
by Target from the exercise of any Target Options minus the Net Value (as
hereinafter defined) of any outstanding unexercised Target Options.
(xx) Net Value of Unexercised Target
Options. The "Net Value" of any outstanding
unexercised Target Options shall be the number of
unexercised Target Options multiplied by the
difference of the following: $13.172804 minus the
quotient of the Deductible Amount divided by 545,636.
(yy) Payment for Unexercised Target Options.
At the Closing, and conditioned upon consummation of
the Merger but effective immediately prior to the
Effective Time, each outstanding unexercised Target
Option shall be exchanged for shares of Whitney
Common Stock having a value, calculated based on the
Average Market Price, equal to the quotient of the
Net Value of the outstanding unexercised Target
Options divided by the total number of outstanding
unexercised Target Options (with cash being paid by
Whitney in lieu of the issuance of any fractional
shares in such exchange).
(ii) Maximum Deliverable Amount for Target Common
Stock. The term "Maximum Deliverable Amount" means the quotient obtained by
dividing the Acquisition Price by the Average Market Price.
(iii) Average Market Price. The "Average Market
Price" shall be the average of the closing per share trading prices of Whitney
Common Stock (adjusted appropriately for any stock split, stock dividend,
recapitalization, reclassification or similar transaction which is effected,
or for which a record date occurs) on the twenty (20) trading days preceding
the fifth trading day immediately prior to the Effective Time, as reported
in the Wall Street Journal (corrected for typographical errors); provided,
however, that if the Average Market Price as calculated above is less than
$27.00, the Average Market Price for purposes of this Section 3.1(a) shall
be $27.00, and if the Average Market Price as calculated above is greater
than $35.00, the Average Market Price for purposes of this Section 3.1(a) shall
be $35.00.
(iv) Deductible Amount. The term "Deductible Amount"
means the dollar amount, if any, by which Target's "net income after taxes" for
the calendar year 1996 is less than $820,000 projected by Target. In verifying
the propriety of this projection "net income after taxes", the "net income
after taxes" for 1996 year-to-date through the calendar month immediately
preceding the Closing Date will be multiplied by 12 (the number of months in a
year) thereby establishing the numerator and divided by the number of months
used in the interim statement of "net income after taxes" as denominator.
The quotient establishes the annualized "net income after taxes" for 1996.
Any resulting decrease in "net income after taxes" from $820,000 on an
annualized basis will reduce the Acquisition Price, provided however,
that if net income before taxes as calculated is within five (5) percent of
$820,000 on an annualized basis, the Deductible Amount shall be zero (0).
Whitney, with the assistance of Target, may use outside auditors to verify the
amount of interim net income after taxes.In projecting "net income after taxes",
as such term is used herein, all items of extraordinary income shall be
excluded, income shall be reduced by the amount of any dividends declared,
A-27
<PAGE>
and Target's costs, fees and expenses relating to the negotiation and
performance of this Agreement shall not be included in Target's expenses.
(b) Fractional Shares. In lieu of the issuance of fractional
shares of Whitney Common Stock, each shareholder of Target, upon surrender of
his or her certificate that immediately prior to the Effective Time represented
Target Common Stock, other than Dissenters' Shares and shares of Target Common
Stock held by Target as treasury shares (which shall by reason of the Merger be
cancelled), shall receive a cash payment (without interest) equal to the fair
market value at the Effective Time of any fraction of a share of Whitney Common
Stock to which such holder would be entitled but for this provision. For
purposes of calculating such payment, the fair market value of a fraction of a
share of Whitney Common Stock at the Effective Time shall be such fraction
multiplied by the Average Market Price.
(c) Exchange of Certificates. After the Effective Time, each
holder of an outstanding certificate or certificates theretofore representing a
share or shares of Target Common Stock, other than Dissenters' Shares and shares
of Target Common Stock held by Target as treasury shares (which shall by reason
of the Merger be cancelled), upon surrender thereof to the exchange agent
(Boatmen's Trust Company or other entity regularly engaged in the business of
acting as stock transfer agent) selected by Whitney (the "Exchange Agent"),
together with duly executed transmittal materials provided pursuant to Section
3.1(e) or upon compliance by the holder or holders thereof with the procedures
of the Exchange Agent with respect to lost, stolen or destroyed certificates,
shall be entitled to receive in exchange therefor any payment due in lieu of
fractional shares and a certificate or certificates representing the number of
whole shares of Whitney Common Stock into which such holder's shares of Target
Common Stock were converted. Until so surrendered, each outstanding Target stock
certificate shall be deemed for all purposes, other than as provided below with
respect to the payment of dividends or other distributions (if any) in respect
of Whitney Common Stock, to represent the number of whole shares of Whitney
Common Stock into which such holder's Target Common Stock shall have been
converted. Whitney may, at its option, refuse to pay any dividend or other
distribution to holders of unsurrendered Target stock certificates until
surrendered; provided, however, that upon the surrender and exchange of any
Target stock certificates there shall be paid, to the extent not previously
paid, to the record holders of the Whitney stock certificates issued in exchange
therefor the amount, without interest, of accumulated dividends and
distributions, if any, which have become payable with respect to the number of
whole shares of Whitney Common Stock into which the shares of Target Common
Stock theretofore represented by such certificates shall have been exchanged.
(d) Deposit. Promptly following the Effective Time, Whitney
shall deposit or cause to be deposited with the Exchange Agent (i) certificates
representing the shares of Whitney Common Stock and (ii) the cash in lieu of
fractional shares, to be issued and paid, as the case may be, in exchange for
outstanding shares of Target Common Stock pursuant to this Section 3.
(e) Transmittal Materials. Promptly after the Effective Time,
Whitney shall send or cause to be sent to each former shareholder of record of
Target at the Effective Time, excluding the holders, if any, of Dissenters'
Shares as to which dissenters' rights have been perfected and not withdrawn or
otherwise forfeited under 12 U.S.C. ss.215a, transmittal materials for use in
exchanging certificates of Target Common Stock for certificates of Whitney
Common Stock.
(f) Dissenters' Shares. Holders of Dissenters' Shares shall
not be entitled to receive the shares of Whitney Common Stock and any unpaid
dividends and distributions payable thereon pursuant to Section 3.1 and shall
only be entitled to receive payment of the fair cash value of such shares in
accordance with the provisions of 12 U.S.C. ss.215a, unless and until such
holders fail to perfect or effectively withdraw or lose their rights to
appraisal and payment under 12 U.S.C. ss.215a. If, after the Effective Time, any
such holder fails to perfect or effectively withdraws or loses such right, such
shares of Target Common Stock will be treated as if they had been converted
into, at the Effective Time, the shares of Whitney Common Stock (and cash in
lieu of fractional shares), and any unpaid dividends and distributions payable
thereon pursuant to Section 3.1, without interest thereon.
3.2. Closing Transfer Books. At the Effective Time, the stock
transfer books of Target shall be closed and no transfer of shares of Target
Common Stock shall be made thereafter.
A-28
<PAGE>
4. Capital Stock of the Receiving Association. The shares of the
capital stock of Acquiring Bank, the Receiving Association, issued and
outstanding immediately prior to the Effective Time shall, at the Effective
Time, continue to be issued and outstanding, and no additional shares of
Acquiring Bank shall be issued as a result of the Merger. Therefore, at the
Effective Time, the amount of capital stock of Acquiring Bank, the Receiving
Association, shall be $________________, divided into _______________ shares of
common stock, par value $________ per share.
5. Assets and Liabilities of the Merging Associations. At the Effective
Time, the corporate existence of each of the Merging Associations shall be
merged into and continued in Acquiring Bank, the Receiving Association, and such
Receiving Association shall be deemed to be the same corporation as each bank or
banking association participating in the Merger. All rights, franchises, and
interests of the individual Merging Associations in and to every type of
property (real, personal and mixed) and choses in action shall be transferred to
and vested in the Receiving Association by virtue of the Merger without any deed
or other transfer. The Receiving Association, upon the Merger and without any
order or other action on the part of any court or otherwise, shall hold and
enjoy all rights of property, franchises, and interests, including appointments,
designations, and nominations, and all other rights and interests as trustee,
executor, administrator, registrar of stocks and bonds, guardian of estates, and
in every other fiduciary capacity, in the same manner and to the same extent as
such rights, franchises, and interests were held or enjoyed by any one of the
Merging Associations at the time of the Merger, subject to the conditions
specified in 12 U.S.C. Section 215a(f). The Receiving Association shall, from
and after the Effective Time, be liable for all liabilities of the Merging
Associations.
6. Shareholder Approval; Conditions; Filing. This Agreement shall be
submitted to the shareholders of the Merging Associations for ratification and
confirmation in accordance with applicable provisions of law. The obligations of
the Merging Associations to effect the Merger shall be subject to all the terms
and conditions of the Plan. If the shareholders of the Merging Associations
ratify and confirm this Agreement, then the fact of such approval shall be
certified hereon by the Secretary of each of the Merging Associations and this
Agreement, so approved and certified, shall, as soon as is practicable, be
signed and acknowledged by the President or Chairman of the Board of each of
them. As soon as may be practicable thereafter, this Agreement, so certified,
signed and acknowledged, shall be delivered to the OCC for filing in the manner
required by law.
7. Miscellaneous. This Agreement may, at any time prior to the
Effective Time, be amended or terminated as provided in the Plan. This Agreement
may be executed in counterparts, each of which shall be deemed to constitute an
original. This Agreement shall be governed and interpreted in accordance with
federal law and the applicable laws of the State of Louisiana applicable to
contracts made and to be performed wholly with such state, except to the extent
that the laws of the State of Florida require this Agreement to be governed by
the laws of that state. This Agreement may be assigned only to the extent that
the party seeking to assign it is permitted to assign its interests in the Plan,
and subject to the same effect as any such assignment. The headings in this
Agreement are inserted for convenience only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement. Capitalized terms
used herein and not otherwise defined have the meanings given to them in the
Plan.
IN WITNESS WHEREOF, this Agreement has been executed by a majority of
the directors of each of the Merging Associations, as of the day and year first
above written.
[Signature lines omitted]
A-29
<PAGE>
Exhibit 6.02(g) to
Agreement and Plan of Merger
[Letter from affiliates of bank]
[date]
Mr. William L. Marks
Chairman and CEO
Whitney Holding Corporation
228 St. Charles Avenue
New Orleans, La. 70130
Dear Mr. Marks:
In consideration of the benefits I will receive as a shareholder of
American Bank and Trust ("Bank") from the Agreement and Plan of Merger (the
"Agreement") between Bank and Whitney Holding Corporation ("Whitney"), I agree
to vote all shares of Bank that I own beneficially or of record in favor of
approving the Agreement, unless Whitney is then in breach or default in any
material respect as regards any covenant, agreement, representation or warranty
as to it contained in the Agreement.
I further agree that I will not, without the prior consent of Whitney,
transfer my shares of Bank stock prior to the Effective Date, as that term is
set forth in the Agreement.
I also acknowledge that Whitney intends to account for the acquisition
of Bank as a pooling of interests. I understand that my transfer of any shares
of Bank common stock, any options to acquire Bank stock, and any Whitney common
stock that I receive in exchange for Bank stock or options, prior to Whitney's
publication of financial results covering at least 30 days of its operations
following the Effective Date, may impair this accounting treatment. Therefore, I
agree that I will not sell or otherwise transfer any shares of Bank stock, or
any options to acquire Bank stock, (or the Whitney stock which I receive in
exchange for my Bank stock or options) over which I hold the power to sell,
transfer, pledge or otherwise alienate or encumber until:
a. the merger has become effective and Whitney has
published financial results covering at least 30 days
of its combined operations following the Effective
Date of the merger, or
b. the Agreement terminates.
I authorize Whitney to hold the certificates representing my shares of
Whitney common stock until the date that I am free to trade the stock in
accordance with the foregoing paragraph.
I certify that all of the shares of Bank stock of which I hold the
power to sell, transfer, pledge or otherwise alienate or encumber are
represented by the following certificates:
Certificate No. No. of shares
I have no present plan or intention to dispose of Whitney common stock
to be received in the merger.
I also understand the resale or other disposition of Whitney common
stock that I own may be governed by Rule 145 of the SEC under the Securities Act
of 1933, as amended, which Rule has been explained to me. I agree not to sell
any of the Whitney common stock to be held by me in violation of the Securities
Act of 1933, as amended, or the rules and regulations thereunder.
This letter shall constitute an irrevocable agreement of the
undersigned, and may be revoked only upon the mutual agreement of the parties.
Sincerely,
A-30
<PAGE>
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
BETWEEN
WHITNEY HOLDING CORPORATION
AND
AMERICAN BANK AND TRUST
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER BETWEEN WHITNEY
HOLDING CORPORATION AND AMERICAN BANK AND TRUST (the "First Amendment") is made
May 20, 1996, between Whitney Holding Corporation ("Whitney"), a Louisiana
corporation, on the one hand, and American Bank and Trust ("Bank"), a Florida
chartered state bank, on the other hand. Capitalized terms used in this First
Amendment and not otherwise defined shall have the meanings given them in the
Agreement (as defined below).
RECITALS
WHEREAS, Whitney and Bank are parties to that certain Agreement and
Plan of Merger dated April 18, 1996 (the "Agreement").
WHEREAS, pursuant to Section 5.01(b) of the Agreement, Whitney was
obligated to complete its due diligence review during the Review Period, and at
or prior to the expiration of the Review Period, to give written notice to Bank
of its election to proceed to the Closing or terminate the Agreement.
WHEREAS, Whitney and Bank acknowledge that (i) the Review Period
expires on May 20, 1996, and (ii) Whitney has not completed its due diligence or
its discussions with Bank's management regarding matters discovered during its
due diligence, and accordingly, Whitney and Bank desire to extend the Review
Period set forth in the Agreement to allow for an orderly completion of due
diligence and related discussions.
AGREEMENT
NOW THEREFORE, Whitney and Bank hereby agree as follows:
The fifth sentence of Section 5.01(b) of the Agreement, which section
is entitled "Delivery of Schedules of Exceptions; Due Diligence", is hereby
amended and restated in its entirety, to provide and read as follows:
Whitney's due diligence review shall be concluded during a 35
calendar day period commencing on the first business day
following Bank's delivery to Whitney of its Schedule of
Exceptions as provided herein (the "Review Period").
Except to the extent specifically amended herein, the Agreement shall
remain in full force and effect in accordance with its terms, provisions,
covenants and agreements.
This First Amendment may be executed by the parties in any number of
counterparts, all of which shall be deemed an original, but all of which taken
together shall constitute one and the same document.
IN WITNESS WHEREOF, the parties have executed this First Amendment as
of the date first above written.
[Signatures omitted.]
A-31
<PAGE>
SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER
BETWEEN
WHITNEY HOLDING CORPORATION AND AMERICAN BANK AND TRUST
THIS SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER BETWEEN WHITNEY
HOLDING CORPORATION AND AMERICAN BANK AND TRUST (the "Second Amendment") is made
as of June 3, 1996, between Whitney Holding Corporation ("Whitney"), a Louisiana
corporation, on the one hand, and
American Bank and Trust ("Bank"), a Florida chartered state bank, on the other
hand. Capitalized terms used in this First Amendment and not otherwise defined
shall have the meanings given them in the Agreement (as defined below).
RECITALS
WHEREAS, Whitney and Bank are parties to that certain Agreement and
Plan of Merger dated April 18, 1996, as amended by that certain First Amendment
to Agreement and Plan of Merger between Whitney and Bank (the "First Amendment")
dated as of May 20, 1996 (as amended, the "Agreement").
WHEREAS, pursuant to Section 5.01(b) of the Agreement, Whitney was
obligated to complete its due diligence review during the Review Period, and at
or prior to the expiration of the Review Period, to give written notice to Bank
of its election to proceed to the Closing or terminate the Agreement.
WHEREAS, Whitney and Bank acknowledge that the Review Period expires on
June 3, 1996, and Whitney has not completed its due diligence or its discussions
with Bank's management regarding matters discovered during its due diligence,
and accordingly, Whitney and Bank desire to further extend the Review Period set
forth in the Agreement to allow for an orderly completion of due diligence and
related discussions.
WHEREAS, Whitney and Bank further desire to amend Section 1.01(a) of
the Agreement to reflect that upon its formation, Whitney will cause Acquiring
Bank to execute the Agreement, the First Amendment, and this Second Amendment.
AGREEMENT
NOW THEREFORE, Whitney and Bank hereby agree as follows:
1. The second sentence of Section 1.01(a) of the Agreement, which section is
entitled "Merger," is hereby amended and restated in its entirety, to provide
and read as follows:
"Upon its formation, Whitney will cause the Acquiring Bank to
execute this Agreement, the First Amendment, and the Second
Amendment as a party."
2. The fifth sentence of Section 5.01(b) of the Agreement, which section is
entitled "Delivery of Schedules of Exceptions; Due Diligence," is hereby amended
and restated in its entirety, to provide and read as follows:
"Whitney's due diligence review shall be concluded during a 39
calendar day period commencing on the first business day
following Bank's delivery to Whitney of its Schedule of
Exceptions as provided herein (the "Review Period")."
Except to the extent specifically amended herein, the Agreement shall
remain in full force and effect in accordance with its terms, provisions,
covenants and agreements.
This Second Amendment may be executed by the parties in any number of
counterparts, all of which shall be deemed an original, but all of which taken
together shall constitute one and the same document.
IN WITNESS WHEREOF, the parties have executed this Second Amendment as
of the date first above written.
[Signatures omitted.]
A-32
<PAGE>
APPENDIX B
Fairness Opinion of Allen C. Ewing & Co.
<PAGE>
[Allen C. Ewing & Co. Letterhead]
May 20, 1996
Board of Directors
American Bank and Trust
101 West Garden Street
Pensacola, Florida 32575-2744
Gentlemen:
You have requested our opinion as to the fairness, from a financial point of
view, to the shareholders of American Bank and Trust ("Bank") of Pensacola,
Florida, of the consideration to be paid to the shareholders of the Bank by
Whitney Holding Corporation ("Whitney") of New Orleans, Louisiana, as provided
by the Agreement and Plan of Merger ("Merger Agreement") entered into by the
parties on April 18, 1996.
Pursuant to the Merger Agreement, Whitney will offer to acquire all of the
outstanding shares and options of the Bank by exchanging Whitney shares for
shares and options of the Bank in accordance with the terms defined in the
Merger Agreement. As a result of the proposed transaction, the Bank will be
merged with and into a newly-formed banking subsidiary of Whitney.
In performing our analysis, we have, among other things:
1. Reviewed the terms of the Merger Agreement.
2. Reviewed the Call Reports for the Bank for the years ended December 31,
1993, December 31, 1994, December 31, 1995, and the Bank's annual
audited financial statements prepared by Saltmarsh, Cleaveland, and
Gund for the years ended 1993, 1994, and 1995.
3. Reviewed the non-performing assets of the Bank as of December 31, 1995.
4. Reviewed the financial condition of the Bank as to asset and earnings
quality, capital adequacy, etc. and the market value and quality of the
Bank's securities investments.
5. Discussed with management the operations and future prospects of the
Bank, including the earnings forecast for the first quarter ended March
31, 1996.
6. Examined the Bank's market share in the Pensacola market and the
competitive banking institutions active in the Bank's marketing area.
7. Compared the Bank's financial performance with other banking
institutions operating in Florida.
8. Compared the price ratios of the proposed transaction with Whitney with
those of recent acquisitions of comparable companies in Florida.
9. Reviewed the Bank's program for marketing the Bank to prospective
acquirors.
B-1
<PAGE>
Board of Directors
Page Two
May 20, 1996
In arriving at our opinion, we have relied upon the accuracy and completeness of
the information provided to us by the Bank which we have used in the
accompanying analysis and upon the representations and warranties in the Merger
Agreement. We have not conducted any independent verification of such
information or performed any independent appraisal of the Bank's assets and
liabilities.
Ewing's opinion is directed to the Board of Directors and does not constitute a
recommendation to any shareholder as to how such shareholder should vote at the
shareholders' meeting held in connection with the proposed transaction. Ewing
has not been requested to opine as to, and the opinion does not address, the
Board's underlying business decision to support and recommend the acquisition to
the shareholders.
Allen C. Ewing & Co. ("Ewing") is a regional investment banking firm that has
specialized in the research, trading, and provision of corporate finance
services to the banking and thrift industries in Florida. Senior members and the
author of this opinion have had extensive experience in providing a wide variety
of services involving banking institutions for over twenty-five years.
On March 25, 1996, Ewing delivered its preliminary oral opinion as to the
fairness of the proposed transaction to the Board of Directors of the Bank,
subject to Ewing's subsequent confirmation of the fairness of the transaction by
its issuance of this written opinion.
Based upon the accompanying analysis and our knowledge of and experience in the
valuation of Florida banks, it is our opinion that the consideration to be paid
by Whitney for the common shares and options of the Bank is fair, from a
financial point of view, to the shareholders of the Bank.
Very truly yours,
ALLEN C. EWING & CO.
By: /s/ Benjamin C. Bishop, Jr.
----------------------------
Benjamin C. Bishop, Jr.
B-2
<PAGE>
APPENDIX C
Selected Provisions of 12 U.S.C. ss.215a
<PAGE>
12 U.S.C. Section 215a
Dissenting shareholders
(b) If a merger shall be voted for at the called meetings by the
necessary majorities of the shareholders of each association or State bank
participating in the plan of merger, and thereafter the merger shall be approved
by the Comptroller, any shareholder of any association or State bank to be
merged into the receiving association who has voted against such merger at the
meeting of the association or bank of which he is a stockholder, or has given
notice in writing at or prior to such meeting to the presiding officer that he
dissents from the plan of merger, shall be entitled to receive the value of the
shares so held by him when such merger shall be approved by the Comptroller upon
written request made to the receiving association at any time before thirty days
after the date of consummation of the merger, accompanied by the surrender of
his stock certificates.
Valuation of shares
(c) The value of the shares of any dissenting shareholder shall be
ascertained, as of the effective date of the merger, by an appraisal made by a
committee of three persons, composed of (1) one selected by the vote of the
holders of the majority of the stock, the owners of which are entitled to
payment in cash; (2) one selected by the directors of the receiving association;
and (3) one selected by the two so selected. The valuation agreed upon by any
two of the three appraisers shall govern. If the value so fixed shall not be
satisfactory to any dissenting shareholder who has requested payment, that
shareholder may, within five days after being notified of the appraised value of
his shares, appeal to the Comptroller, who shall cause a reappraisal to be made
which shall be final and binding as to the value of the shares of the appellant.
Application to shareholders of merging associations:
appraisal by Comptroller; expenses of receiving association;
sale and resale of shares; State appraisal and merger law
(d) If, within ninety days from the date of consummation of the merger,
for any reason one or more of the appraisers is not selected as herein provided,
or the appraisers fail to determine the value of such shares, the Comptroller
shall upon written request of any interested party cause an appraisal to be made
which shall be final and binding on all parties. The expenses of the Comptroller
in making the reappraisal or the appraisal, as the case may be, shall be paid by
the receiving association. The value of the shares ascertained shall be promptly
paid to the dissenting shareholders by the receiving association. The shares of
stock of the receiving association which would have been delivered to such
dissenting shareholders had they not requested payment shall be sold by the
receiving association at an advertised public auction, and the receiving
association shall have the right to purchase any of such shares at such public
auction, if it is the highest bidder therefor, for the purpose of reselling such
shares within thirty days thereafter to such person or persons and at such price
not less than par as its board of directors by resolution may determine. If the
shares are sold at public auction at a price greater than the amount paid to the
dissenting shareholders, the excess in such sale price shall be paid to such
dissenting shareholders. The appraisal of such shares of stock in any State bank
shall be determined in the manner prescribed by the law of the State in such
cases, rather than as provided in this section, if such provision is made in the
State law; and no such merger shall be in contravention of the law of the State
under which such bank is incorporated. The provisions of this subsection shall
apply only to shareholders of (and stock owned by them in) a bank or association
being merged into the receiving association.
C-1
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Section 83 of the Louisiana Business Corporation Law ("LBCL") provides
in part that a corporation may indemnify any director, officer, employee or
agent of the corporation against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with any action, suit or proceeding to which he is or was a
party or is threatened to be made a party (including any action by or in the
right of the corporation), if such action arises out of his acts on behalf of
the corporation and he acted in good faith not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
The indemnification provisions of the LBCL are not exclusive; however,
no corporation may indemnify any person for willful or intentional misconduct. A
corporation has the power to obtain and maintain insurance, or to create a form
of self-insurance on behalf of any person who is or was acting for the
corporation, regardless of whether the corporation has the legal authority to
indemnify the insured person against such liability.
Whitney's Articles of Incorporation and By-laws provide for
indemnification for directors, officers, employees and agents or former
directors, officers, employees and agents of Whitney to the full extent
permitted by Louisiana law.
Whitney maintains an insurance policy covering the liability of its
directors and officers for actions taken in their official capacity.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of Whitney
pursuant to the foregoing provision or otherwise, Whitney has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits
The following Exhibits are filed as part of this Registration
Statement:
Exhibit No. Description
2 The Plan of Merger (included in the Registration
Statement as Appendix A and incorporated herein by
reference).
3.1 Articles of Incorporation of Whitney, as amended (filed
with the Commission as an exhibit to Whitney's
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1993 and incorporated herein by reference).
3.2 By-laws of Whitney, as amended (filed with the
Commission on April 5, 1994 as an exhibit to Whitney's
Registration Statement on Form S-3 (File No. 33-52983)
and incorporated herein by reference).
5 Opinion of Milling, Benson, Woodward, Hillyer,Pierson
& Miller, L.L.P.
8 Form of opinion of Arthur Andersen LLP as to certain
tax matters.
II-1
<PAGE>
10.1 Stock Option Agreement between Whitney Holding
Corporation and William L.Marks (filed with the
Commission as an exhibit to Whitney's Annual
Report on form 10-K for the year ended December
31, 1990 and incorporated herein by reference).
10.2 Executive agreement between Whitney Holding
Corporation, Whitney National Bank and William
L. Marks (filed with the Commission as an
exhibit to Whitney's Quarterly Report on form
10-Q for the quarter ended June 30, 1993 and
incorporated herein by reference).
10.3 Executive agreement between Whitney Holding
Corporation, Whitney National Bank and R.
King Milling (filed with the Commission as
an exhibit to Whitney's Quarterly Report on
form 10-Q for the quarter ended June 30,
1993 and incorporated herein by reference).
10.4 Executive agreement between Whitney Holding
Corporation, Whitney National Bank and Edward B
Grimball (filed with the Commission as an
exhibit to Whitney's Quarterly Report on form
10-Q for the quarter ended June 30, 1993 and
incorporated herein by reference).
10.5 Executive agreement between Whitney Holding
Corporation, Whitney National Bank and Kenneth
A. Lawder, Jr. (filed with the Commission as an
exhibit to Whitney's Quarterly Report on form
10-Q for the quarter ended June 30, 1993 and
incorporated herein by reference).
10.6 Executive agreement between Whitney Holding
Corporation, Whitney National Bank and G.
Blair Ferguson (filed with the Commission as
an exhibit to Whitney's Quarterly Report on
form 10-Q for the quarter ended September
30, 1993 and incorporated herein by
reference).
10.7 Executive agreement between Whitney Holding
Corporation, Whitney National Bank and
Joseph W. May effective December 13, 1993
(filed with the Commission as an exhibit to
Whitney's Annual Report on form 10-K for the
year ended December 31, 1993 and
incorporated herein by reference).
10.8 Executive agreement between Whitney Holding
Corporation, Whitney National Bank and John
C. Hope, III, effective October 28, 1994
(filed with the Commission as an exhibit to
Whitney's Annual Report on form 10-K for the
year ended December 31, 1994 and
incorporated herein by reference).
10.9 Executive agreement between Whitney Holding
Corporation, Whitney National Bank and Robert C
Baird, Jr. (filed with the Commission as an
exhibit to Whitney's Annual Report on Form 10-K
for the year ended December 31, 1995 and
incorporated herein by reference).
10.10 Long-term incentive program (filed with the
Commission as an exhibit to Whitney's Annual
Report on form 10-K for the year ended December
31, 1991 and incorporated herein by reference).
10.11 Executive compensation plan (filed with the
Commission as an exhibit to Whitney's Annual
Report on form 10-K for the year ended December
31, 1991 and incorporated herein by reference).
II-2
<PAGE>
10.12 Form of restricted stock agreement between
Whitney Holding Corporation and certain of
its officers (filed with the Commission as
an exhibit to Whitney's Quarterly Report on
form 10-Q for the quarter ended June 30,
1992 and incorporated herein by reference).
10.13 Form of stock option agreement between
Whitney Holding Corporation and certain of
its officers (filed with the Commission as
an exhibit to Whitney's Quarterly Report on
form 10-Q for the quarter ended June 30,
1992 and incorporated herein by reference).
10.14 Directors' Compensation Plan (filed with the
Commission as part of Whitney's Proxy
Statement dated March 24, 1994 and
incorporated herein by reference).
10.15 Retirement Restoration Plan effective
January 1, 1995 (filed with the Commission
as an exhibit to Whitney's Annual Report on
Form 10-K for the year ended December 31,
1995 and incorporated herein by reference).
10.16 Amended and Restated Agreement and Plan of
Merger dated as of December 15, 1995 between
Whitney, Whitney National Bank and Whitney
Acquisition Corporation, on the one hand,
and First Citizens BancStock, Inc. and The
First National Bank in St. Mary Parish, on
the other hand (filed with the Commission as
an Appendix to Whitney's Registration
Statement on Form S-4 (File No. 33-65131)
and incorporated herein by reference).
21 Subsidiaries (filed with the Commission on
December 18, 1995 as an exhibit to Whitney's
Registration Statement on Form S-4 (File No.
33-65131) and incorporated herein by
reference).
23.1 Consent of Arthur Andersen LLP dated July
10, 1996.
23.2 Consent of Saltmarsh, Cleaveland & Gund
dated July 8, 1996.
23.3 Consent of Allen C. Ewing & Co. dated July
8, 1996.
23.4 Consent of Milling, Benson, Woodward,
Hillyer, Pierson & Miller, L.L.P., included
in Exhibit 5.
24 Powers of Attorney of directors of Whitney
Holding Corporation (contained on
page S-1 of the Registration Statement).
99.1 Form of Proxy of American Bank and Trust.
99.2 Agreement and Plan of Merger dated April 23,
1996 between Whitney Holding Corporation and
Whitney National Bank of Florida, on the one
hand, and Liberty Holding Company and
Liberty Bank, on the other hand, as amended.
(b) Financial Statement Schedules
None
II-3
<PAGE>
Item 22. Undertakings
The undersigned Registrant hereby undertakes as follows:
(1) To respond to requests for information that is incorporated by
reference into the Prospectus pursuant to Items 4, 10(b), 11, or 13 of Form S-4,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
Registration Statement through the date of responding to the request.
(2) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the Registration Statement when it became
effective.
(3) That for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
related to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(4) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this Registration
Statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the Registrant undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other Items of
the applicable form.
(5) That every prospectus (i) that is filed pursuant to paragraph (4)
immediately preceding, or (ii) that purports to meet the requirements of Section
10(a)(3) of the Securities Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to the
Registration Statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(6) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
Orleans, State of Louisiana, on this day of July, 1996
WHITNEY HOLDING CORPORATION
By: /s/ William L. Marks
---------------------------------------
William L. Marks
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears immediately below constitutes and appoints R. King Milling and Edward B.
Grimball, and each or any one of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or his or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<C> <C> <C>
/s/ William L. Marks Chairman of the Board July 10, 1996
- -------------------------------------- and Chief Executive Officer
William L. Marks
/s/ R. King Milling Director and President July 10, 1996
- --------------------------------------
R. King Milling
/s/ Edward B. Grimball Executive Vice President and July 10, 1996
- -------------------------------------- Chief Financial Officer
Edward B. Grimball (Principal Financial Officer
and Principal Accounting Officer)
/s/ Harry J. Blumenthal, Jr. Director July 10, 1996
- --------------------------------------
Harry J. Blumenthal, Jr.
- -------------------------------------- Director July , 1996
Joel B. Bullard, Jr. --------
/s/ James M. Cain Director July 10, 1996
- --------------------------------------
James M. Cain
S-1
<PAGE>
/s/ Angus R. Cooper, II Director July 10, 1996
- --------------------------------------
Angus R. Cooper, II
/s/ Robert H. Crobsy, Jr. Director July 10, 1996
- --------------------------------------
Robert H. Crosby, Jr.
/s/ Richard B. Crowell Director July 10, 1996
- --------------------------------------
Richard B. Crowell
- -------------------------------------- Director July , 1996
Camille A. Cutrone --------
- -------------------------------------- Director July , 1996
William A. Hines --------
/s/ Robert E. Howson
- -------------------------------------- Director July 10, 1996
Robert E. Howson
/s/ John J. Kelly Director July 10, 1996
- --------------------------------------
John J. Kelly
/s/ E. James Kock, Jr. Director July 10, 1996
- --------------------------------------
E. James Kock, Jr.
- -------------------------------------- Director July , 1996
Alfred S. Lippman --------
- -------------------------------------- Director July , 1996
John G. Phillips --------
/s/ John K. Roberts, Jr. Director July 10, 1996
- --------------------------------------
John K. Roberts, Jr.
/s/ W. P. Snyder III Director July 10, 1996
- --------------------------------------
W. P. Snyder III
- -------------------------------------- Director July , 1996
Carroll W. Suggs --------
/s/ Warren K. Watters Director July 10, 1996
- --------------------------------------
Warren K. Watters
</TABLE>
S-2
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <C> <C>
Sequentially
Exhibit Numbered
Number Description Page
2 The Plan of Merger (included in the Registration Statement as
Appendix A and incorporated herein by reference).
3.1 Articles of Incorporation of Whitney, as amended (filed with
the Commission as an exhibit to Whitney's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1993 and
incorporated herein by reference).
3.2 By-laws of Whitney, as amended (filed with the Commission on
April 5, 1994 as an exhibit to Whitney's Registration
Statement on Form S-3 (File No. 33-52983) and incorporated
herein by reference).
5 Opinion of Milling, Benson, Woodward, Hillyer, Pierson &
Miller, L.L.P.
8 Form of opinion of Arthur Andersen LLP as to certain tax
matters.
10.1 Stock Option Agreement between Whitney Holding
Corporation and William L. Marks (filed with the Commission
as an exhibit to Whitney's Annual Report on form 10-K for the
year ended December 31, 1990 and incorporated herein by
reference).
10.2 Executive agreement between Whitney Holding Corporation,
Whitney National Bank and William L. Marks (filed with the
Commission as an exhibit to Whitney's Quarterly Report on
form 10-Q for the quarter ended June 30, 1993 and
incorporated herein by reference).
10.3 Executive agreement between Whitney Holding Corporation,
Whitney National Bank and R. King Milling (filed with the
Commission as an exhibit to Whitney's Quarterly Report on
form 10-Q for the quarter ended June 30, 1993 and
incorporated herein by reference).
10.4 Executive agreement between Whitney Holding Corporation,
Whitney National Bank and Edward B. Grimball (filed with the
Commission as an exhibit to Whitney's Quarterly Report on
form 10-Q for the quarter ended June 30, 1993 and
incorporated herein by reference).
10.5 Executive agreement between Whitney Holding Corporation,
Whitney National Bank and Kenneth A. Lawder, Jr. (filed with
the Commission as an exhibit to Whitney's Quarterly Report on
form 10-Q for the quarter ended June 30, 1993 and
incorporated herein by reference).
<PAGE>
Sequentially
Exhibit Numbered
Number Description Page
10.6 Executive agreement between Whitney Holding Corporation,
Whitney National Bank and G. Blair Ferguson (filed with the
Commission as an exhibit to Whitney's Quarterly Report on
form 10-Q for the quarter ended September 30, 1993 and
incorporated herein by reference).
10.7 Executive agreement between Whitney Holding Corporation,
Whitney National Bank and Joseph W. May effective December
13,1993(filed with the Commission as an exhibit to Whitney's
Annual Report on form 10-K for the year ended December 31,
1993 and incorporated herein by reference).
10.8 Executive agreement between Whitney Holding Corporation,
Whitney National Bank and John C. Hope, III, effective
October 28, 1994 (filed with the Commission as an exhibit to
Whitney's Annual Report on form 10-K for the year ended
December 31, 1994 and incorporated herein by reference).
10.9 Executive agreement between Whitney Holding Corporation,
Whitney National Bank and Robert C. Baird, Jr. (filed with
the Commission as an exhibit to Whitney's Annual Report on
Form 10-K for the year ended December 31, 1995 and
incorporated herein by reference).
10.10 Long-term incentive program (filed with the Commission as an
exhibit to Whitney's Annual Report on form 10-K for the year
ended December 31, 1991 and incorporated herein by
reference).
10.11 Executive compensation plan (filed with the Commission as an
exhibit to Whitney's Annual Report on form 10-K for the year
ended December 31, 1991 and incorporated herein by
reference).
10.12 Form of restricted stock agreement between Whitney Holding
Corporation and certain of its officers (filed with the
Commission as an exhibit to Whitney's Quarterly Report on
form 10-Q for the quarter ended June 30, 1992 and
incorporated herein by reference).
10.13 Form of stock option agreement between Whitney Holding
Corporation and certain of its officers (filed with the
Commission as an exhibit to Whitney's Quarterly Report on
form 10-Q for the quarter ended June 30, 1992 and
incorporated herein by reference).
10.14 Directors' Compensation Plan (filed with the Commission as
part of Whitney's Proxy Statement dated March 24, 1994 and
incorporated herein by reference).
<PAGE>
Sequentially
Exhibit Numbered
Number Description Page
10.15 Retirement Restoration Plan effective January 1, 1995 (filed
with the Commission as an exhibit to Whitney's Annual Report
on Form 10-K for the year ended December 31, 1995 and
incorporated herein by reference).
10.16 Amended and Restated Agreement and Plan of Merger dated as
of December 15, 1995 between Whitney, Whitney National
Bank and Whitney Acquisition Corporation, on the one hand,
and First Citizens BancStock, Inc. and The First National Bank
in St. Mary Parish, on the other hand (filed with the
Commission as an Appendix to Whitney's Registration
Statement on Form S-4 (File No. 33-65131) and incorporated
herein by reference).
21 Subsidiaries (filed with the Commission on December 18, 1995
as an exhibit to Whitney's Registration Statement on Form S-4
(File No. 33-65131) and incorporated herein by reference).
23.1 Consent of Arthur Andersen LLP dated July 10, 1996.
23.2 Consent of Saltmarsh, Cleaveland & Gund dated July 8, 1996.
23.3 Consent of Allen C. Ewing & Co. dated July 8, 1996.
23.4 Consent of Milling, Benson, Woodward, Hillyer, Pierson &
Miller, L.L.P., included in Exhibit 5.
24 Powers of Attorney of directors of Whitney Holding
Corporation (contained on page S-1 of the Registration
Statement).
99.1 Form of Proxy of American Bank and Trust.
99.2 Agreement and Plan of Merger dated April 23, 1996 between
Whitney Holding Corporation and Whitney National Bank of
Florida, on the one hand, and Liberty Holding Company and
Liberty Bank, on the other hand, as amended.
</TABLE>
<PAGE>
EXHIBIT 5
<PAGE>
[MILLING, BENSON, WOODWARD, HILLYER,
PIERSON & MILLER, L.L.P. LETTERHEAD]
July 10, 1996
Whitney Holding Corporation
228 St. Charles Avenue
New Orleans, LA 70130
Re: American Bank and Trust
Registration Statement on Form S-4
Gentlemen:
We have acted as special counsel to Whitney Holding Corporation (the
"Company") in connection with the preparation of that certain Registration
Statement on Form S-4 (the "Registration Statement") filed by the Company on the
date hereof with the Securities and Exchange Commission for registration under
the Securities Act of 1933, as amended (the "Securities Act"), of up to 397,967
shares of the Company's common stock, no par value (the "Shares"), to be
exchanged for shares of the common stock and certain options of American Bank
and Trust ("the Bank") pursuant to that certain Agreement and Plan of Merger
dated April 18, 1996, as amended May 20, 1996 and June 3, 1996, among the Bank,
the Company and, upon its formation, the Company's wholly-owned subsidiary
Whitney National Bank of Florida ("WNB-Florida") and the related Agreement of
Merger to be entered into between WNB-Florida and the Bank (collectively, the
"Plan of Merger").
In so acting, we have examined originals, or photostatic or certified
copies, of the Plan of Merger, such records of the Company, certificates of
officers of the Company and of public officials, and such other documents as we
have deemed relevant. In such examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals,
and the conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the originals of such
documents.
Based upon the foregoing, we are of the opinion that:
(1) The Company is a corporation duly incorporated and validly existing
in good standing under the laws of the State of Louisiana.
<PAGE>
MILLING, BENSON, WOODWARD, HILLYER, PIERSON & MILLER, L.L.P.
July 10, 1996
Page 3
(2) The Shares are duly authorized and, when issued by the Company in
accordance with the terms of the Plan of Merger, will be validly issued, fully
paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us in the prospectus forming a
part thereof under the caption "Legal Matters." In giving this consent, we do
not admit that we are within the category of persons whose consent is required
under Section 7 of the Securities Act or the general rules and regulations of
the Commission.
Very truly yours,
/s/
MILLING, BENSON, WOODWARD,
HILLYER, PIERSON & MILLER, L.L.P.
<PAGE>
EXHIBIT 8
<PAGE>
DRAFT
BY HAND
Whitney Holding Corporation
Attention: Mr. William Marks
228 St. Charles Avenue
New Orleans, Louisiana 70130
American Bank and Trust
Attention: Mr. Lamar B. Cobb
101 West Garden Street
Pensacola, Florida 32501
Dear Messrs. Marks and Cobb:
This opinion is being furnished to you in connection with the proposed
acquisition of American Bank and Trust ("Bank") by Whitney Holding Corporation
("Whitney"), which is expected to be completed on ________ ("the Effective
Date"). You have requested our opinion concerning the following:
o Whether the merger of Bank into Whitney National Bank of Florida
("WNB-Florida"), a wholly owned subsidiary of Whitney, will qualify as
a reorganization under Section 368 of the Internal Revenue Code of
1986, as amended ("the Code").
o That the exchange of Bank common stock to the extent exchanged for
Whitney common stock will not give rise to gain or loss for federal
income tax purposes to the holders of Bank common stock with respect to
such exchange.
In addition, Bank has options outstanding that grant holders thereof the right
to acquire up to an aggregate of 75,936 shares of Bank's common stock ("Bank
Options"). You have also requested our opinion on the tax treatment to the
holders of unexercised Bank Options of the receipt of Whitney common stock in
exchange for such options.
You have asked for our opinion on the federal income tax consequences to
Whitney, WNB-Florida, Bank, the stockholders of Bank, and the holders of
unexercised Bank Options. We have not considered any nonincome tax, state, local
or foreign income tax consequences, and, therefore, do not express any opinion
regarding the treatment that would be given the merger by the applicable
authorities on any nonincome tax or any state, local or foreign tax issues. We
also express no opinion on nontax issues, such as corporate law or securities
law matters, including, but not limited to, all securities law disclosure
requirements.
In rendering our opinion, we have relied upon the accuracy and completeness of
the facts and information as contained in the Agreement and Plan of Merger dated
as of April 18, 1996, as amended ("Plan of Merger"), including all exhibits
attached thereto, the American Bank and Trust Directors' Stock Option Plan of
1993 ("Stock Option Plan"), the Registration Statement on Form S-4, and the
representations included below. To the extent there are any changes to the Plan
of Merger, Stock Option Plan, the Registration Statement on Form S-4, or
representations, our opinion may be affected accordingly.
The discussion and conclusions set forth below are based upon the Code, the
Treasury Regulations, and existing administrative and judicial interpretations
thereof as of the Effective Date, all of which are subject to change. All
section references are to the Internal Revenue Code of 1986, as amended, unless
otherwise stated. If there is a change in the Code, the Treasury Regulations or
public rulings thereunder, the current Internal Revenue Service rulings or
releases, or in the prevailing judicial interpretation of the foregoing, the
opinion expressed herein would necessarily have to be
<PAGE>
Mr. William Marks
Mr. Lamar B. Cobb
Page 2
____________, 1996
re-evaluated in light of any such changes. We have no responsibility to update
this opinion for events, transactions, changes in the above-listed law and
authority or circumstances occurring after the Effective Date.
This opinion is solely for the benefit of Bank and Whitney and is not intended
to be relied upon by anyone other than Bank and Whitney. Although you do hereby
have our express consent to inform WNB-Florida, Bank common stockholders, and
holders of Bank Options of our opinion by including copies of this letter as an
exhibit to the Plan of Merger and as an exhibit in the Registration Statement on
Form S-4 for the proposed transaction and by making reference to us and our
opinion in the Proxy Statement-Prospectus forming a part of the registration
statement we assume no responsibility for any tax consequences to them. Instead,
each of these parties should consult and rely upon the advice of his/her
counsel, accountant or other tax advisor. Except to the extent expressly
permitted hereby, and without the prior written consent of this firm, this
letter may not be quoted in whole or in part or otherwise referred to in any
documents or delivered to any other person or entity.
Proposed Transaction
Our understanding of the proposed transaction is as follows:
A. On the Effective Date, Bank shall be merged with and into WNB-
Florida under the provisions of 12 U.S.C. Section 215a,et seq.
and Florida Banking Code, Section 658:41. The merger shall
become effective at the time specified or permitted by the
Office of the Comptroller of the Currency ("OCC") in the
certificate or other written record issued by the OCC (the
"Effective Time").
B. At the Effective Time, all shares of the common stock of Bank,
other than any such shares as to which dissenters' rights
shall exist immediately prior to the Effective Time and
shares held by Bank as treasury shares, shall be converted
into shares of Whitney common stock. The stockholders of Bank
will receive shares of Whitney common stock proportionate in
value based on the terms contained in Section 2 of the Plan of
Merger. In lieu of issuing fractional shares of Whitney
common stock as a result of the merger, common stockholders of
Bank will be entitled to receive a cash payment equal to the
fair market value of any fraction of a share of Whitney Common
Stock to which such holder would be entitled but for this
provision.
C. At the closing, and conditioned upon consummation of the
transaction but effective immediately prior to the Effective
Time, each outstanding unexercised Bank Option shall be
exchanged for shares of Whitney Common Stock having a value,
calculated based on the average market price as defined in the
Plan of Merger, equal to the amount by which the dollar value
of the shares of Whitney Common Stock into which a share of
Bank Common Stock would be converted in the transaction
exceeds the exercise price for that share of Bank Common Stock
under the terms of the Bank Options.
D. WNB-Florida was organized under the National Banking Act to
facilitate the merger and WNB- Florida will continue the
historic business (i.e., banking operations) of Bank.
Management of Whitney has indicated that it is likely that
Whitney will merge WNB-Florida into Whitney National Bank
("WNB"), a national banking association and wholly-owned
subsidiary of Whitney, provided that applicable state law
would permit such a merger, at some time after June 1, 1997,
the date on which the Riegle-Neal Interstate Banking and
Branching Act of 1994 removes restrictions on interstate
banking.
<PAGE>
Mr. William Marks
Mr. Lamar B. Cobb
Page 3
____________, 1996
Additional Representations
The following representations have been made to us by representatives of
Whitney, WNB-Florida, and Bank:
a) Whitney, WNB-Florida, Bank, and stockholders of Bank will pay
their respective expenses, if any, incurred in connection with
the successful consummation of the transaction.
b) Bank has the financial resources to fund any payments to
shareholders who exercise dissenters rights, and such payments
will not be reimbursed to Bank by any other party.
c) There is no intercorporate indebtedness existing between
Whitney and Bank, or between WNB- Florida and Bank, that was
issued, acquired, or will be settled at a discount.
d) Bank will be merged with and into WNB-Florida pursuant to the
provisions of 12 U.S.C. Section 215a, et seq. and Florida
Banking Code, Section 658:41.
e) Except for restrictions placed upon the disposition of Whitney
common stock pursuant to agreements made by certain officers,
directors and shareholders of Bank in the shareholder
commitments referred to in Section 6.02(g) of the Plan of
Merger, the Bank common stockholders will have unrestricted
rights of ownership of Whitney common stock received in the
transaction, and their ability to retain the Whitney common
stock received in the transaction will not be limited in any
way.
f) The ratio for the exchange of shares of Bank common stock for
Whitney common stock in the transaction was negotiated through
arm's length bargaining. Accordingly, the fair market value of
the Whitney common stock to be received by Bank common
stockholders in the transaction will be approximately equal to
the fair market value of the Bank common stock surrendered by
such stockholders in exchange therefor.
g) WNB-Florida will acquire at least 90 percent of the fair
market value of the net assets and at least 70 percent of the
fair market value of the gross assets held by Bank immediately
prior to the transaction. For purposes of this representation,
amounts paid by Bank to dissenters, amounts paid by Bank to
shareholders who receive cash or other property, amounts used
by Bank to pay reorganization expenses, and all redemptions
and distributions (except for regular, normal dividends) made
by Bank immediately preceding the transfer, will be included
as assets of Bank held immediately prior to the transaction.
h) None of the compensation received by any stockholder-employees
of Bank will be separate consideration for, or allocable to,
any of their shares of Bank common stock; none of the shares
of Whitney common stock received by any stockholder-employees
will be separate consideration for, or allocable to, any
employment agreement; and the compensation paid to any
stockholder-employees will be for services actually rendered
and will be commensurate with amounts paid to third parties
bargaining at arm's length for similar services.
The following additional representations have been made to us by representatives
of Whitney and WNB-Florida:
i) Whitney and WNB-Florida do not own, directly or indirectly,
nor have either owned during the past five years, directly or
indirectly, any stock of Bank.
<PAGE>
Mr. William Marks
Mr. Lamar B. Cobb
Page 4
____________, 1996
j) The payment of cash in lieu of fractional shares of Whitney
common stock is solely for the purpose of avoiding the expense
and inconvenience to Whitney of issuing fractional shares and
does not represent separately bargained-for consideration.
The total cash consideration that will be paid in the
transaction to the Bank stockholders instead of issuing
fractional shares of Whitney common stock will not exceed (1)
one percent of the total consideration that will be issued in
the transaction to the Bank stockholders in exchange for their
shares of Bank common stock. The fractional share interests
of each Bank stockholder will be aggregated, and no Bank
stockholder will receive cash for such fractional share
interests in an amount equal to or greater than the value of
one full share of Whitney common stock.
k) Whitney has no plan or intention to reacquire any of its stock
issued in the transaction.
l) The proposed transaction is being undertaken for reasons
germane to the continuance of the business of Whitney and
WNB-Florida.
m) Prior to the transaction, Whitney will be in control of
WNB-Florida within the meaning of Section 368(c) of the Code.
n) Whitney has no plan or intention to sell or otherwise dispose
of the stock of WNB-Florida; or to cause WNB-Florida to sell
or otherwise dispose of any of the assets of Bank acquired in
the transaction, except for dispositions made in the ordinary
course of business or transfers described in Section
368(a)(2)(C) of the Code.
o) Whitney has no plan or intention to liquidate WNB-Florida or
to merge WNB-Florida with and into another corporation, until
such time as applicable restrictions on interstate mergers are
eliminated. In the event that at some future date the
applicable Federal and state banking laws are changed to
eliminate restrictions on interstate mergers, and Whitney
decides to merge WNB-Florida with and into WNB, a wholly owned
national banking subsidiary, WNB-Florida will be completely
dissolved by operation of law, all the assets and liabilities
of WNB-Florida will be transferred/assumed by WNB by operation
of law, and Whitney will continue to be the sole shareholder
of WNB.
p) Whitney and WNB-Florida are not investment companies as
defined in Sections 368(a)(2)(F)(iii) and 368(a)(2)(F)(iv) of
the Code.
q) Following the transaction, WNB-Florida will not issue
additional shares of its stock that would result in Whitney
losing control of WNB-Florida within the meaning of Section
368(c) of the Code.
r) No stock of WNB-Florida will be issued in the merger.
s) The assumption by WNB-Florida of the liabilities of Bank
pursuant to the transaction is for bona fide business purposes
and the principal purpose of such assumption is not the
avoidance of federal income tax on the transfer of assets of
Bank pursuant to the transaction.
t) Following the transaction, WNB-Florida will continue the
historic business of Bank, or use a significant portion of
these historic business assets in the operation of a trade or
business.
The following representations have been made to us by representatives of Bank:
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Mr. Lamar B. Cobb
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u) There is no plan or intention by the Bank common stockholders
who own (1) one percent or more of Bank stock, and to the best
of the knowledge of the management of Bank, there is no plan
or intention on the part of the remaining common stockholders
of Bank to sell, exchange, or otherwise dispose of a number of
shares of Whitney common stock received in the Company Merger
that would reduce the stockholders' ownership of Whitney
common stock to a number of shares having a value, as of the
Effective Date, of less than (50) fifty percent of the value
of all the formerly outstanding common stock of Bank as of the
same date. For purposes of this representation, shares of
Bank common stock exchanged for cash in lieu of fractional
shares of Whitney stock will be treated as outstanding Bank
common stock on the Effective Date. Moreover, shares of Bank
common stock and shares of Whitney common stock held by Bank
stockholders and otherwise sold, redeemed, or disposed of
prior or subsequent to the transaction will be considered in
making this representation.
v) On the Effective Date, the fair market value of the assets of
Bank will exceed the sum of its liabilities plus the amount of
liabilities, if any, to which the assets are subject.
w) The proposed transaction is being undertaken for reasons
germane to the continuance of the business of Bank.
x) Bank is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the
Code.
y) Bank is not an investment company as defined in Sections 368
(a)(2)(F)(iii) and 368(a)(2)(F)(iv) of the Code.
z) The liabilities of Bank assumed by WNB-Florida, and the
liabilities to which the transferred assets of Bank are
subject were incurred by Bank in the ordinary course of
business.
aa) The nonstatutory Bank Options issued pursuant to the Bank's
Stock Option Plan were not traded on an established securities
market and were not transferable prior to the merger.
bb) Bank received no amounts from the holders of Bank Options
prior to the merger as consideration for the unexercised Bank
Options granted to such holders.
Analysis of Applicable Federal Tax Provisions
A. Exchange of Whitney Stock for Bank Stock
Section 354(a)(1) addresses the effects of corporate reorganizations on
shareholders, providing in general that no gain or loss shall be recognized if
stock or securities in a corporation a party to a reorganization are, in
pursuance of the plan of reorganization, exchanged solely for stock or
securities in such corporation or in another corporation, a party to the
reorganization.
For purposes of Code Section 354, the terms "reorganization" and "party to a
reorganization" mean only a reorganization or a party to a reorganization as
defined in Sections 368(a) and 368(b). Section 368(a)(1)(A) states that the term
reorganization includes a statutory merger or consolidation. Reg. Section
1.368-2(b)(1) states that in order for a transaction to qualify as a
reorganization under Section 368(a)(1)(A), the transaction must be a merger or
consolidation effected pursuant to the corporation laws of the United States or
State or Territory or the District of Columbia. Under Section 368(b), the term
party to a reorganization includes both corporations in the case of a
reorganization resulting
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Mr. William Marks
Mr. Lamar B. Cobb
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from the acquisition by one corporation of stock or properties of another. In
the case of a reorganization qualifying under Section 368(a)(1)(A) by reason of
Section 368(a)(2)(D), the term "party to a reorganization" includes the
corporation which is in control of the acquiring corporation.
Section 368(a)(2)(D) provides that the acquisition by one corporation in
exchange for stock of a corporation which is in control of the acquiring
corporation, of substantially all of the properties of another corporation shall
not disqualify a transaction under Section 368(a) if no stock of the acquiring
corporation is used in the transaction and such transaction would have qualified
under Section 368(a)(1)(A) had the merger been into the controlling corporation.
Section 368(a)(1)(C) provides that the acquisition by one corporation, in
exchange solely for all or a part of its voting stock ( or in exchange solely
for all or a part of the voting stock of a corporation which is in control of
the acquiring corporation), of substantially all of the properties of another
corporation also constitutes a reorganization under Section 368(a).
The "substantially all" requirement for purposes of both Sections
368(a)(1)(C)and 368(a)(2)(D) has not been statutorily defined. The determination
of "substantially all" is based upon all the facts and circumstances of each
transaction. The Internal Revenue Service's advance ruling guidelines (Rev.
Proc. 86-42) provide that the "substantially all" requirement will be met if at
least 90% of the fair market value of the net assets and at least 70% of the
fair market value of the gross assets of the acquired corporation immediately
before the merger are transferred to the acquiring corporation.
Assuming Whitney's intentions as described in representation "o" above are
deemed not to be a plan or intention to liquidate WNB-Florida or to merge
WNB-Florida with and into another corporation, the reorganization should qualify
under Section 368(a)(1)(A) by reason of Section 368(a)(2)(D). Any subsequent
merger of WNB-Florida with, and into WNB, a wholly owned national banking
subsidiary of Whitney, should be accorded separate treatment under the tax law
since such transaction is not able to be legally consummated under current
federal or state banking laws and the consummation of the subject merger of Bank
into WNB-Florida is in no manner conditioned upon the ability of the parties to
effect any subsequent mergers. Therefore, the transaction should qualify as a
reorganization that is governed by Sections 368(a)(1)(A) and 368(a)(2)(D).
However, even if the merger of Bank into WNB-Florida were to be integrated with
a subsequent merger of WNB- Florida into WNB, the two transactions when viewed
together should still constitute a reorganization under Section 368(a). In this
alternative, if WNB-Florida is subsequently merged into WNB in a statutory
merger, and based on the additional representations made by the parties, the two
transactions may be viewed together as an overall reorganization under Section
368(a)(1)(C). For federal income tax purposes, the transfer by WNB-Florida of
Whitney stock to Bank shareholders solely in exchange for Bank stock,
immediately followed by the liquidation of or merger of Bank into WNB-Florida
will be disregarded. (Rev. Rul. 67-274, 1967-2 C.B. 141). The current merger of
Bank into WNB-Florida could be disregarded and instead the transaction will be
treated as the acquisition of substantially all of the assets of Bank by WNB in
exchange solely for voting common stock of Whitney, a corporation which is
control of WNB; and the assumption by WNB of the liabilities of Bank in a
transaction constituting a reorganization within the meaning of Section
368(a)(1)(C).
B. Additional Regulatory Requirements Relating to Tax-Free Reorganizations
The regulations under Section 368 require as a part of a reorganization a
continuity of the business enterprise under the modified corporate form, a bona
fide business purpose for the reorganization, and a continuity of interest
therein on the part of those persons who, directly or indirectly, were owners of
the enterprise prior to the reorganization. Reg. Section 1.368-1(d)(2) states
that the continuity of business enterprise requirement is met if the acquiring
corporation either continues the acquired corporation's historic business or
uses a significant portion of the acquired
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Mr. William Marks
Mr. Lamar B. Cobb
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corporation's business assets in the operation of a trade or business. Based on
the representations included in the Registration Statement on Form S-4, as well
as management's representations set forth above, the continuity of business
enterprise requirement is met with respect to the assets and business operations
of Bank.
Reg. Section 1.368-2(g) indicates that in addition to coming within the scope of
one of the specific definitions contained in Section 368(a), a reorganization
must also be "undertaken for reasons germane to the continuance of the business
of a corporation a party to the reorganization." If the transaction or series of
transactions has no business or corporate purpose, then the plan is not a
reorganization pursuant to Section 368(a). [Reg. Section 1.368-1(c)]. In the
Proxy Statement-Prospectus, a discussion of the reasons for the plan of merger
is included. In general, there is a desire to combine the financial and
managerial resources of Whitney and Bank to pursue consumer and commercial
banking business in markets currently served by Bank. Whitney's business
strategy includes expansion eastward along the Interstate 10 corridor to Panama
City, Florida and Whitney's management identified Bank as an institution that
fits well in its eastward expansion strategy. With respect to Bank, the current
and prospective economic environment and competitive constraints facing small
community based banks was a factor in the decision to adopt the Plan of Merger.
Based on the reasons stated in the Proxy Statement-Prospectus and the
representations set forth above, the transaction meets the business purpose
requirement.
The continuity of interest requirement does not require that all shareholders of
the acquired corporation have a proprietary interest in the surviving
corporation after the acquisition; it is not even necessary for a substantial
percentage of such shareholders to have such an interest. Rather, the IRS
announced in Rev. Proc. 77-37 that it would rule that the continuity of interest
requirement is met so long as one or more of the acquired corporation's
shareholders retain a sufficient proprietary interest in the continuing
corporation. The IRS indicated in Rev. Proc. 77-37 that a sufficient proprietary
interest is an interest with a value that is at least 50% of the total equity
value of the acquired corporation.
In addition to meeting the continuity of interest requirement immediately after
the reorganization, the former shareholders of the acquired corporation must
retain their interest in the acquiring corporation for some time after the
reorganization. The courts have ruled that the tax-free nature of the
reorganization may be retroactively invalidated if the continuity of interest is
not maintained either because, at the time of the reorganization, the
shareholders intended to dispose of the proprietary interest soon after the
reorganization (Christian Est. v. Comr., T.C. Memo 1989-413) or because a
shareholder disposes of stock immediately following the reorganization in
accordance with a pre-existing commitment to sell (American Wire Fabrics Corp.
v. Comr., 16 TC 607). The courts have generally looked to the intent of the
shareholders at the time of the reorganization to dispose of their interests in
determining whether the continuity of interest requirement is subsequently
violated.
Based on the above representations made by representatives of Bank, the
continuity of interest requirement should be met with respect to the
transaction. However, it should be noted that the continuity of interest
requirement will only be satisfied if the actual historic shareholders of Bank,
in the aggregate, in fact do receive and retain an amount of Whitney stock that
is sufficient to satisfy the requirement.
C. Other Operational Code Provisions
Section 356(a)(1) provides that if Section 354 would apply to an exchange but
for the fact that the property received in the exchange consists not only of
property permitted to be received under Section 354 without the recognition of
gain but also of other property or money then the gain, if any, to the recipient
shall be recognized but not in excess of the sum of money and the fair market
value of such other property. Section 356(c) states that no loss from the
exchange may be recognized by the shareholder.
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Mr. William Marks
Mr. Lamar B. Cobb
Page 8
____________, 1996
In other official pronouncements (Rev. Rul. 74-515, 1974-2 C.B. 118; Rev. Rul.
74-516, 1974-2 C.B. 121) the Internal Revenue Service has treated the
distribution of cash as part of a reorganization and in a transaction subject
to Section 356 by applying the redemption principles under Section 302. Section
302 provides, in part, that a redemption will be treated as a distribution in
part or full payment in exchange for stock if it can meet the tests of that
section.
In Rev. Rul. 66-365, the IRS announced that in a transaction qualifying as a
reorganization under Section 368(a)(1)(A) of the Code where a cash payment is
made by the acquiring corporation in lieu of fractional shares and is not
separately bargained for, such cash payment will be treated under Section 302 of
the Code as in redemption of fractional share interests. Therefore, each
shareholder's redemption will be treated as a distribution in full payment in
exchange for his or her fractional share interest under Section 302(a) of the
Code and accorded capital gain or loss treatment provided the redemption is not
essentially equivalent to a dividend and that the fractional share(s) redeemed
constitute a capital asset in the hands of the holder as discussed below. In
Rev. Proc. 77-41, the IRS stated that "a ruling will usually be issued under
Section 302(a) of the Code that cash to be distributed to shareholders in lieu
of fractional share interests arising in corporate reorganizations...will be
treated as having been received in part or in full payment in exchange for the
stock redeemed if the cash distribution is undertaken solely for the purpose of
saving the corporation the expense and inconvenience of issuing and transferring
fractional shares, and is not separately bargained-for consideration."
Under Section 358(a)(1), in the case of an exchange to which Section 354 or
Section 356 applies, the basis of property which is permitted to be received
under such section without the recognition of gain or loss shall be the same as
that of the property exchanged, decreased by the amount of any money received by
the recipient and the amount of loss recognized by the recipient as a result of
the exchange and increased by the amount which was treated as a dividend and the
amount of other gain recognized by the recipient as a result of the transaction.
It should be noted that where cash is received in lieu of fractional shares, the
substance of the transaction is that of a hypothetical receipt of the fractional
shares and then a redemption of such shares. Therefore, the basis that is to be
allocated to the stock of the acquiring corporation received must be allocated
to the shares retained and the fractional share(s) hypothetically received. The
gain or loss attributable to the receipt of cash in lieu of fractional shares is
measured by comparing the cash received with the basis allocated to the
fractional shares that are hypothetically received, and such gain or loss is
recognized as discussed earlier pursuant to Rev. Rul. 66-365.
In other instances where other property or money is also received under Section
356, the redemption principles of Section 302 are applied to determine if the
payments should be treated as dividend distributions or payments in exchange for
stock. Thus, cash payments made by the acquiring corporation to a dissenting
shareholder of the acquired corporation in a reorganization under Section 368
are treated as made in exchange for the shareholder's stock if the payment meets
the requirements of Section 302. The Supreme Court in Clarke vs. Comr., 489 U.S.
726, applied the tests of Section 302 by viewing the exchange involving cash or
other property as a "hypothetical post-reorganization redemption." The Court
viewed the exchange as first an exchange of solely stock of the acquiring
corporation for the acquired company stock, followed by an exchange by the
shareholder of the newly acquired stock for cash from the acquiring corporation.
The Section 302 tests were applied to the second hypothetical exchange.
One of the tests of Section 302 provides that where there is a complete
redemption of all of a shareholder's stock in a corporation (after consideration
of the constructive ownership rules of Section 302(c)), the redemption payment
is treated as made entirely in exchange for the shareholder's stock in the
corporation (Section 302(b)(3)). The constructive ownership rules of Section
302(c) are generally contained in Section 318 and provide that an individual or
entity is treated as owning the stock owned by certain other related individuals
and entities. Where there is a complete termination of the shareholder's
interest, the constructive ownership rules may be waived if certain conditions
are met.
<PAGE>
Mr. William Marks
Mr. Lamar B. Cobb
Page 9
____________, 1996
Code Section 361(a) states that, as a general rule, no gain or loss is to be
recognized by a corporation if such corporation is a party to a reorganization
and exchanges property, in pursuance of the plan of reorganization, solely for
stock or securities in another corporation a party to the reorganization.
Section 361(b) states that if Section 361(a) would apply to an exchange but for
the fact that the property received in exchange consists not only of stock or
securities afforded nonrecognition treatment under Section 361(a), but also of
other property or money, then provided the corporation receiving such other
property or money distributes it in pursuance to the plan of reorganization, no
gain to the corporation shall be recognized from the exchange. Section 361(c)
states that as a general rule no gain or loss shall be recognized to a
corporation a party to a reorganization on the distribution to its shareholders
of any stock in another corporation which is a party to the reorganization if
such stock was received by the distributing corporation in the exchange. Section
1032(a) states that no gain or loss shall be recognized to a corporation on the
receipt of money or other property in exchange for such corporation's stock,
including treasury stock.
Code Section 362(b) states that the basis of property received by the acquiring
corporation in a reorganization is the same as it would be in the hands of the
transferor of the assets, increased by any gain recognized by the transferor.
The transferor for purposes of the preceding sentence in the instant case is
Bank.
Section 1221 defines a capital asset as property held by the taxpayer which is
not inventory or other property held by the taxpayer primarily for sale to
customers in the ordinary course of a trade or business, property used in the
taxpayer's trade or business subject to the allowance for depreciation under
Section 167, a copyright, literary, musical or artistic composition, a letter or
memorandum, or similar property created by the personal efforts of the taxpayer,
accounts or notes receivable acquired in the ordinary course of a trade or
business for services rendered or from the sale of inventory or other property
held by the taxpayer primarily for sale to customers in the ordinary course of
business, or a publication of the United States Government which is received
from the United States Government or any agency thereof other than by purchase
at the price at which it is offered for sale to the public.
Section 1223(1) states that in determining the period for which a taxpayer has
held property received in an exchange, there shall be included the period for
which he or she held the property exchanged if the property has, for the purpose
of determining gain or loss from a sale or exchange, the same basis as the
property exchanged and the property exchanged was a capital asset as defined in
Section 1221 as of the date of the exchange.
Section 1223(2) states that for determining the period for which the taxpayer
has held property however acquired there shall be included the period for which
such property was held by another person if the property has the same basis in
whole or in part in his hands as it would have had in the hands of such other
person.
Subchapter P of Chapter 1 of the Code provides limitations on the recognition of
capital gains and losses including, but not limited to, the allowance of capital
losses to the extent of capital gains with respect to corporate taxpayers and
the allowance of from $1,500 to $3,000 of net capital losses with respect to
certain taxpayers other than corporate taxpayers.
D. Exchange of Bank Options for Whitney Stock
Reg. Section 1.83-7 provides that if there is granted to an employee or
independent contractor in connection with the performance of services an option
to which Section 421 does not apply, Section 83(a) shall apply to such grant if
the option has a readily ascertainable fair market value at the time the option
is granted.
Section 421 applies to incentive stock options described in Section 422 and
employee stock purchase plans described in Section 423. Section 422 defines an
"incentive stock option" as an option granted to an individual for any reason
connected with his employment by a corporation if certain other conditions are
met. Therefore, unless an option is granted for a reason connected with the
individual's employment by a corporation, the option is not treated as an
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Mr. William Marks
Mr. Lamar B. Cobb
Page 10
____________, 1996
incentive stock option under Section 422. The Stock Option Plan provided for the
granting of options on the basis of the grantee's status as an active director
of the bank rather than in connection with the individual's employment by Bank.
Thus, the Bank Options are not stock options described in Section 422. The Bank
Options are also not within the scope of Section 423 because they were not
granted to the holders under an employee stock purchase plan.
Section 83(a) provides that if, in connection with the performance of services,
property is transferred to any person other than the person for whom such
services are performed, the excess of the fair market value of such property
over the amount paid for such property shall be included in the gross income of
the person who performed such services in the first taxable year in which the
rights of the person are transferable or are not subject to a substantial risk
of forfeiture.
Reg. Section 1.83-7 provides that options have a value at the time they are
granted, but that value is ordinarily not readily ascertainable unless the
option is actively traded on an established market. When an option is not
actively traded on an established market, it still may be treated as having a
readily ascertainable fair market value when granted if, among other things, the
option is transferable by the optionee. The Stock Option Plan provides that the
options are not transferable by the participant. Therefore, because the Bank
Options did not have a readily ascertainable fair market value at the time the
Bank Options were granted, Section 83(a) does not apply to the granting of such
options.
Reg. Section 1.83-7 provides that if Section 83(a) does not apply to the grant
of such an option because the option does not have a readily ascertainable fair
market value at the time of grant, Sections 83(a) and 83(b) shall apply at the
time the option is exercised or otherwise disposed of. Therefore, when the Bank
Options are exchanged for Whitney common stock, the provisions of Section 83(a)
and 83(b) will apply at the time of such disposition. Accordingly, pursuant to
Section 83(a), the excess of the fair market value of the property received by
the holders of the unexercised Bank Options over the amount paid for such
options shall be included in the gross income of the holder of such option.
Based on the representation that no consideration was paid by holders of the
unexercised Bank Options for such options, the fair market value of the property
(i.e., the shares of Whitney common stock) received by the holders in exchange
for their unexercised Bank Options will be included in ordinary income.
Opinion
Based upon all of the foregoing, including representations of the management of
Whitney and WNB-Florida and the management and Board of Directors of Bank, it is
our opinion with respect to the merger that:
a) Provided the shareholders of Bank receive and retain a
sufficient amount of stock in Whitney to satisfy the
continuity of interest requirement discussed on pages 9 and
10, it is our opinion that the acquisition by WNB-Florida of
substantially all of the assets of Bank solely in exchange for
Whitney common stock and the assumption by WNB-Florida of the
liabilities of Bank will qualify as a reorganization under the
provisions of Section 368. For purposes of this opinion,
"substantially all" means at least 90 percent of the fair
market value of the net assets and at least 70 percent of the
fair market value of the gross assets of Bank held immediately
prior to the proposed transaction.
b) Whitney, WNB-Florida, and Bank will each be a "party to a
reorganization" (Section 368 (b)).
c) No gain or loss will be recognized by Whitney or WNB-Florida
on the merger of Bank into WNB-Florida (Section 354(a)(1)).
d) No gain or loss will be recognized by Bank on the transfer of
all of its assets to WNB-Florida pursuant to the plan of
merger (Section 361).
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Mr. William Marks
Mr. Lamar B. Cobb
Page 11
____________, 1996
e) The tax basis of Bank's assets in the hands of WNB-Florida
will be the same as the basis of those assets in the hands of
Bank immediately prior to the transaction (Section 362(b)).
The tax basis of Bank's assets in the hands of WNB-Florida
will not be increased by any cash paid to dissenters or cash
paid in lieu of fractional shares.
f) The holding period of the assets of Bank in the hands of
WNB-Florida will include the period during which such assets
were held by Bank (Section 1223(2)).
g) No gain or loss will be recognized by Bank shareholders as a
result of the exchange of Bank common stock for Whitney common
stock pursuant to the merger, except that gain or loss will be
recognized on the receipt of cash, if any, received in lieu of
fractional shares. (Section 354(a)(1)). The payment of cash
in lieu of fractional share interests of Whitney common stock
will be treated as if each fractional share was distributed as
part of the exchange and then redeemed by Whitney. Pursuant to
Section 302(a) of the Code, these cash payments will be
treated as having been received as distributions in full
payment in exchange for the Whitney common stock. Any gain or
loss recognized upon such exchange (as determined under
Section 1001 and subject to the limitations of Section 267)
will be capital gain or loss provided the fractional share
would constitute a capital asset in the hands of the
exchanging stockholder (Rev. Rul. 66-365 and Rev. Proc.77-41).
h) Each shareholder of Bank who elects to dissent from the merger
transaction involving Bank and Whitney under the provisions of
12 U.S.C. ss.215a, and receives cash in exchange for his
shares of Bank common stock, will be treated as receiving such
payment in complete redemption of his shares of Bank, provided
such shareholder does not actually or constructively own any
Bank common stock after the exchange under the provisions and
limitations of Section 302.
(i) The tax basis of the Whitney common stock received by Bank
shareholders will be the same as the basis of the Bank common
stock surrendered in exchange therefor, decreased by the
amount of basis allocated to the fractional shares that are
hypothetically received by the stockholder and redeemed for
cash (Section 358(a)(1)).
j) The holding period of the Whitney common stock received by
Bank shareholders will include the period during which the
Bank common stock surrendered in exchange therefor was held,
provided that the Bank common stock is held as a capital asset
in the hands of the Bank shareholders on the Effective Date
(Section 1223(1)).
k) Ordinary income will be recognized by the holders of the
unexercised Bank Options on the receipt of Whitney common
stock in exchange for such options, measured by the fair
market value of the Whitney stock received (Reg. Section
1.83-7).
We express no opinion on the impact, if any, on any other sections of the Code,
including but not limited to Section 382, other than that as stated immediately
above, and neither this opinion nor any prior statements are intended to imply
or to be an opinion on any other matters.
In analyzing the authorities relevant to the potential tax issues outlined in
this opinion we have applied the standards of "substantial authority" and "more
likely than not proper," as used in Section 6662 under current law. Based upon
our analysis, we have concluded that there is substantial authority for the
indicated tax treatment of the transaction, and we also believe the indicated
tax treatment of the transaction is more likely than not proper.
<PAGE>
Mr. William Marks
Mr. Lamar B. Cobb
Page 12
____________, 1996
This opinion is based solely upon our interpretation of the Code and income tax
regulations as further interpreted by court decisions, rulings, and procedures
issued by the Internal Revenue Service, as of the date of this letter. Our
opinion may be subject to change in the event of changes in any of the foregoing
authorities, some of which could be retroactive. The opinion expressed herein is
not binding on the Internal Revenue Service, and there can be no assurance that
the Internal Revenue Service will not take a position contrary to the opinion
expressed herein, or if the Internal Revenue Service took such a position,
whether it would be sustained by the courts. Further, WNB-Florida and Bank
common stockholders are urged to discuss the consequences of the proposed
transactions with their own tax advisors.
Very truly yours,
ARTHUR ANDERSEN LLP
By
Kay Gravolet Priestly
Copies to:
Mr. Joseph S. Schwertz, Jr.
Mr. Patrick G. Emmanuel
Ms. Elizabeth B. Martin
<PAGE>
EXHIBIT 23.1
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 16, 1996
(except with respect to the matter discussed in the first paragraph of Note 16,
as to which the date is March 8, 1996) included in Whitney Holding Corporation's
Form 10-K for the year ended December 31, 1995, and of our report dated March 8,
1996 included in Whitney Holding Corporation's Form 10-K/A for the year ended
December 31, 1995 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
New Orleans, Louisiana
July 10, 1996
<PAGE>
EXHIBIT 23.2
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated March 1, 1996 with respect to the financial statements
of American Bank and Trust included in this Registration Statement (Form S-4)
and related Prospectus of Whitney Holding Corporation for the registration of
its common stock.
/s/ Saltmarsh, Cleaveland & Gund
Pensacola, Florida
July 8, 1996
<PAGE>
EXHIBIT 23.3
<PAGE>
CONSENT OF ALLEN C. EWING & CO.
We hereby consent to the filing of our opinion to American Bank and
Trust as an exhibit to the Prospectus/Proxy Statement included in the
Registration Statement on Form S-4 of Whitney Holding Corporation and to the
references to us and to our opinion in the Prospectus/Proxy Statement that forms
a part of the Registration Statement. In giving this consent we do not concede
that we are within any category of persons whose consent is required in the
Registration Statement.
ALLEN C. EWING & CO.
By: /s/ Benjamin C. Bishop, Jr.
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Benjamin C. Bishop, Jr.
Chairman of the Board
Jacksonville, Florida
July 8, 1996
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EXHIBIT 99.1
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AMERICAN BANK AND TRUST
101 West Garden Street
Pensacola, Florida 32501
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE
BANK'S BOARD OF DIRECTORS
The undersigned shareholder(s) of American Bank and Trust (the "Bank") hereby
revoke(s) any proxy heretofore given and appoint(s) ______________________ and
________________________, and any one of them, as proxies, each with the full
power of substitution and hereby authorize(s) them to represent and to vote, as
designated below, all of the shares of common stock of the Bank owned of record
by the undersigned at the close of business on _____________, 1996, at the
Special Meeting of Shareholders of the Bank called for and to be held at the
Bank's main office, 101 West Garden Street, Pensacola, Florida 32501, on
______________, _____________, 1996 at _____ a.m., local time, and at any
adjournment thereof, as follows:
1. The proposal to approve an Agreement and Plan of Merger dated April 18,
1996, as amended, and a related merger agreement (collectively, the
"Plan of Merger") pursuant to which, among other things: (a) the Bank
would merge into Whitney National Bank of Florida, a newly formed,
wholly-owned bank subsidiary of Whitney Holding Corporation
("Whitney"), and (b) each outstanding share of common stock of the Bank
would be converted into shares of Whitney common stock as determined in
accordance with the terms of the Plan of Merger, all as more fully
described in the accompanying Proxy Statement - Prospectus.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. In their discretion, to vote upon such other matters that may properly
be brought before the meeting and any adjournment thereof.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE UNDERSIGNED SHAREHOLDER'S
SPECIFICATIONS HEREON. IN THE ABSENCE OF SUCH SPECIFICATION, THE PROXY WILL BE
VOTED IN FAVOR OF THE PLAN OF MERGER.
DATED:___________________ , 1996
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(Signature of Shareholder)
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(Signature of Joint Shareholder)
When signing as attorney, executor, administrator, tutor, trustee, curator,
guardian or other fiduciary, please give full title and attach a certified copy
of authority.
Please sign, date and return your proxy promptly in the enclosed postage paid
envelope.
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EXHIBIT 99.2
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made April 23, 1996,
between Whitney Holding Corporation ("Whitney"), a Louisiana corporation, on the
one hand, and Liberty Holding Company ("Holding"), a Florida corporation, and
Liberty Bank ("Bank"), a Florida chartered state bank, on the other hand.
Whitney and Holding shall be hereinafter collectively referred to as the
"Constituent Corporations".
Preamble
The Boards of Directors of Whitney and Holding have each determined
that it is desirable and in the best interests of their respective corporations
and shareholders that Holding merge into Whitney (the "Company Merger"). The
Boards of Directors of Whitney and Bank have each determined that it is
desirable and in the best interests of each such institution and its
shareholders that Bank merge into a national banking association to be formed by
Whitney (the "Bank Merger") on the terms and subject to the conditions set forth
in this Agreement and in the Bank Merger Agreement (as hereinafter defined). The
Company Merger and the Bank Merger shall be hereinafter collectively referred to
as the "Mergers".
NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties hereto agree as follows:
Section 1. The Mergers and Closing
1.01. Mergers.
(a) Following the expiration of the Review Period (as
hereinafter defined), Whitney shall, in good faith, take expeditious steps to
form a national banking association (the "Acquiring Bank") as a wholly owned
subsidiary of Whitney. Upon its formation, Whitney will cause the Acquiring Bank
to execute this Agreement as a party.
(b) Prior to the Effective Date (as hereinafter defined),
Whitney shall prepare a certificate of merger substantially in the form of
Exhibit 1.01(b) attached hereto (the "Certificate of Merger"), pursuant to
which, Holding will, subject to the conditions stated herein and therein, merge
into Whitney, which will be the Surviving Corporation.
(c) Promptly after the formation of the Acquiring Bank, the
Boards of Directors of the Acquiring Bank and Bank will execute the merger
agreement annexed hereto as Exhibit 1.01(c) (the "Bank Merger Agreement"),
pursuant to which, on the terms set forth herein and subject to the conditions
set forth in Section 6 hereof, Bank will merge with and into the Acquiring Bank,
which shall be the surviving bank.
(d) Effects of Mergers. The Company Merger shall have the
effects set forth in the Louisiana Business Corporation Law ("LBCL"). Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the property and assets, rights, privileges and all debts, liabilities
and obligations of Holding will become the assets, rights, privileges, debts,
liabilities and obligations of Whitney as the surviving corporation in the
Company Merger. The Bank Merger shall have the effects set forth in the national
banking laws and Florida state banking laws. Without limiting the generality of
the foregoing, and subject thereto, at the effective time of the Bank Merger,
all the property and assets, rights, privileges and all debts, liabilities and
obligations of Bank will become the assets, rights, privileges, debts,
liabilities and obligations of the Acquiring Bank as the surviving association
in the Bank Merger.
1.02. The Closing. The "Closing" of the transactions contemplated
hereby will take place in the Board Room of Whitney, 228 St. Charles Avenue,
Second Floor, New Orleans, Louisiana 70130 (or such other place to which the
parties may agree), at 10:00 a.m., New Orleans Time, on a mutually agreeable
date as soon as practicable following satisfaction of the conditions set forth
in subparagraphs (a), (b) and (d) of subsection 6.01 hereof, or if no date has
been agreed to, on any date specified by any party to the others upon 10 days
notice following satisfaction of such conditions.
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The date on which the Closing occurs is herein called the "Closing Date". If all
conditions set forth in Section 6 hereof are satisfied or waived by the party
entitled to grant such waiver, at the Closing (a) the Constituent Corporations
shall each provide to the other such proof of satisfaction of the conditions set
forth in Section 6 as the party whose obligations are conditioned upon such
satisfaction may reasonably request, (b) the certificates, letters and opinions
required by Section 6 shall be delivered, (c) the proper persons will complete
the Certificate of Merger, (d) the appropriate officers of the parties shall
execute, deliver and acknowledge the Bank Merger Agreement and (e) the parties
shall take such further action as is required to effect the Company Merger and
the Bank Merger and to otherwise consummate the transactions contemplated by
this Agreement. If on any date established for the Closing all conditions in
Section 6 hereof have not been satisfied or waived by the party entitled to
grant such waiver, then any party, on one or more occasions, may declare a delay
of the Closing of such duration, not exceeding 10 business days, as the
declaring party shall select, but no such delay shall extend beyond the date set
forth in subparagraph (c) of subsection 7.01, and no such delay shall interfere
with the right of any party to terminate this Agreement pursuant to Section 7.
1.03. The Effective Date and Time. The Certificate of Merger will be
filed with and recorded by the Louisiana Secretary of State immediately after
(or concurrently with) the Closing, and the Company Merger will be effective on
the date (the "Effective Date") and time (the "Effective Time") specified
therein. At such time, appropriate articles of merger in respect of the Company
Merger shall also be filed with the Florida Department of State. Immediately
following (or concurrently with) the Closing, the Bank Merger Agreement shall be
filed with and recorded by the Office of the Comptroller of the Currency and the
Bank Merger shall be effective at the date and time specified in the Bank Merger
Agreement.
1.04. Surviving Corporations. The governing documents (i.e. the
articles of incorporation and by-laws and equivalents) of Whitney and the
Acquiring Bank in effect immediately prior to the Effective Time shall be the
governing documents of Whitney and the Acquiring Bank, as the surviving entities
in the Mergers, until duly amended in accordance with the terms thereof and
applicable law. The directors and officers of Whitney and the Acquiring Bank in
office immediately prior to the Effective Time shall be the directors and
officers of Whitney and the Acquiring Bank, as the surviving entities in the
Mergers, and shall serve in such capacity in accordance with the articles of
incorporation and by-laws of the surviving entities. Each share of Whitney
common stock, no par value ("Whitney Common Stock") and capital stock of Whitney
and the Acquiring Bank issued and outstanding immediately prior to the Effective
Time shall remain issued and outstanding from and after the Effective Time, and
in the case of the Acquiring Bank, shall be the capital stock of the Acquiring
Bank.
1.05. Tax Consequences. It is the intention of the parties hereto that
the Mergers shall constitute a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and that
this Agreement shall constitute a "plan of reorganization" for purposes of
Section 368 of the Code.
Section 2. Conversion of Stock of Holding and Bank
2.01. Conversion. (a) Company Merger. Subject to the provisions of this
Section 2, at the Effective Time, by virtue of the Company Merger and without
any action on the part of the holders thereof, the shares of Holding common
stock, par value $1.00 per share ("Holding Common Stock"), shall be converted as
follows: Except for shares issued and outstanding immediately prior to the
Effective Time as to which dissenters' rights have been perfected and not
withdrawn or otherwise forfeited under Section 1301-1320 of the Florida Business
Corporation Act ("Holding Dissenters' Shares"), and subject to the provisions of
Section 2.01(f) relating to fractional shares, each issued and outstanding share
of Holding Common Stock shall be converted into and become that number of shares
of Whitney Common Stock that is equal to the quotient obtained by dividing the
Company Percentage (as hereinafter defined) of the Maximum Deliverable Amount
(as hereinafter defined), rounded up to the nearest whole number of shares, by
the total number of issued and outstanding shares of Holding Common Stock at the
Effective Time.
(b) Bank Merger. Subject to the provisions of this Section 2,
at the effective time of the Bank Merger, by virtue of the Bank Merger and
without any action on the part of the holders thereof, the shares of Bank common
stock, par value $5.00 per share ("Bank Common Stock"), shall be converted as
follows: Except for shares as to which dissenters' rights have been perfected
and not withdrawn or otherwise forfeited under 12 U.S.C. ss.215a (which shares,
collectively with the Holding Dissenters' Shares, are hereinafter referred to as
the "Dissenters' Shares")
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and subject to the provisions of Section 2.01(f) relating to fractional shares,
each outstanding share of Bank Common Stock will be converted into and become
that number of shares of Whitney Common Stock that is equal to the quotient
obtained by dividing the Bank Percentage (as hereinafter defined) of the Maximum
Deliverable Amount, rounded up to the nearest whole number of shares, by the
total number of shares of Bank Common Stock issued and outstanding on the
effective date of the Bank Merger.
(c) For purposes of this Section 2, shares of Holding Common
Stock that are held by Holding or Bank (other than shares held by Bank in a
fiduciary capacity other than for Holding), and shares of Bank Common Stock that
are held by Holding or Bank (other than shares held by Bank in a fiduciary
capacity other than for Holding), shall not be considered outstanding and shall
be cancelled (and not converted) by virtue of the Mergers.
(d) Certain Defined Terms. As used in this Section 2.01,
the following terms shall have the meanings set forth below:
(i) Purchase Price. The term "Purchase Price"
means $14,000,000, plus $5.25 for each share of Holding Common Stock duly and
validly issued between the date of this Agreement and the Effective Time upon
the exercise of outstanding 1996 Warrants (as defined in Section 3.02) and the
payment in cash to Holding of the exercise price therefor (the "Added Capital").
(ii) Maximum Deliverable Amount. The term
"Maximum Deliverable Amount" means the quotient obtained by dividing the
Purchase Price by the Average Market Price (as defined below).
(iii) Bank Percentage. The term "Bank Percentage"
means the percentage obtained by dividing (A) the dollar amount obtained by
multiplying (x) $14,000,000, plus the Added Capital, minus the book value of all
assets of Holding other than Bank Common Stock, by (y) the percentage of the
outstanding shares of Bank Common Stock owned by persons other than Holding, by
(B) the total Purchase Price.
(iv) Company Percentage. The term "Company
Percentage" means the result obtained by subtracting the Bank Percentage from
100%.
(e) Average Market Price. The "Average Market Price" shall be
the average of the closing per share trading prices of Whitney Common Stock
(adjusted appropriately for any stock split, stock dividend, recapitalization,
reclassification or similar transaction which is effected, or for which a record
date occurs) on the twenty (20) trading days preceding the fifth trading day
immediately prior to the Effective Time, as reported in the Wall Street Journal
(corrected for typographical errors); provided, however, that if the Average
Market Price as calculated above is less than $27.00, the Average Market Price
for purposes of this Section 2.01(e) shall be $27.00, and if the Average Market
Price as calculated above is greater than $35.00, the Average Market Price for
purposes of this Section 2.01(e) shall be $35.00.
(f) Fractional Shares. In lieu of the issuance of fractional
shares of Whitney Common Stock, each shareholder of Holding or Bank who would
otherwise be entitled thereto, upon surrender of his or her certificates that
immediately prior to the effective time of the applicable Merger represented
Holding Common Stock or Bank Common Stock, other than Dissenters' Shares, shall
receive a cash payment (without interest) equal to the fair market value at the
effective time of the applicable Merger of any fraction of a share of Whitney
Common Stock to which such holder would be entitled but for this provision. For
purposes of calculating such payment, the fair market value of a fraction of a
share of Whitney Common Stock shall be such fraction multiplied by the Average
Market Price.
(g) Exchange of Certificates. After the Effective Time, each
holder of an outstanding certificate or certificates theretofore representing a
share or shares of Holding Common Stock or Bank Common Stock (other than
Dissenters' Shares), upon surrender thereof to the exchange agent selected by
Whitney (the "Exchange Agent"), together with duly executed transmittal
materials provided pursuant to Section 2.01(i) or upon compliance by the holder
or holders thereof with the procedures of the Exchange Agent with respect to
lost, stolen or destroyed certificates, shall be entitled to receive in exchange
therefor any payment due in lieu of fractional shares and a certificate or
certificates representing the number of whole shares of Whitney Common Stock
into which such holder's shares of Holding
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Common Stock or Bank Common Stock were converted. Until so surrendered, each
outstanding Holding stock certificate and Bank stock certificate shall be deemed
for all purposes, other than as provided below with respect to the payment of
dividends or other distributions (if any) in respect of Whitney Common Stock, to
represent the number of whole shares of Whitney Common Stock into which such
holder's Holding Common Stock or Bank Common Stock shall have been converted.
Whitney may, at its option, refuse to pay any dividend or other distribution to
holders of unsurrendered Holding and Bank stock certificates until surrendered;
provided, however, that upon the surrender and exchange of any Holding or Bank
stock certificates there shall be paid, to the extent not previously paid, to
the record holders of the Whitney stock certificates issued in exchange therefor
the amount, without interest, of accumulated dividends and distributions, if
any, which have become payable with respect to the number of whole shares of
Whitney Common Stock into which the shares theretofore represented by such
certificates shall have been exchanged.
(h) Deposit. Promptly following the Effective Time, Whitney
shall deposit or cause to be deposited with the Exchange Agent (i) certificates
representing the shares of Whitney Common Stock and (ii) the cash in lieu of
fractional shares to be issued and paid, as the case may be, in exchange for
outstanding shares of Holding Common Stock and Bank Common Stock pursuant to
this Section 2.
(i) Transmittal Materials. Promptly after the Effective Time,
Whitney shall send or cause to be sent to each former shareholder of record of
Holding at the Effective Time, and to each former shareholder of record of Bank
at the effective time of the Bank Merger, excluding the holders, if any, of
Dissenters' Shares as to which dissenters' rights have been perfected and not
withdrawn or otherwise forfeited under Sections 1301-1320 of the Florida
Business Corporation Act and 12 U.S.C. ss.215a, as applicable, transmittal
materials for use in exchanging certificates of Holding Common Stock and Bank
Common Stock, respectively, for certificates of Whitney Common Stock.
(j) Dissenters' Shares. Holders of Dissenters' Shares shall
not be entitled to receive the shares of Whitney Common Stock and any unpaid
dividends and distributions payable thereon pursuant to this Section 2 and shall
only be entitled to receive payment of the fair cash value of such shares in
accordance with the provisions of Sections 1301-1320 of the Florida Business
Corporation Act and 12 U.S.C. ss.215a, as applicable, unless and until such
holders fail to perfect or effectively withdraw or lose their rights to such
appraisal and payment. If, after the Effective Time, any such holder fails to
perfect or effectively withdraws or loses such right, such shares of Holding
Common Stock or Bank Common Stock will be treated as if they had been converted
into, at the effective time of the applicable Merger, the shares of Whitney
Common Stock (and cash in lieu of fractional share), and any unpaid dividends
and distributions payable thereon, pursuant to this Section 2, without interest
thereon.
2.02. Closing Transfer Books. At the Effective Time, the stock transfer
books of Holding shall be closed and no transfer of shares of Holding Common
Stock shall be made thereafter. At the effective time of the Bank Merger, the
stock transfer books of Bank shall be closed and no transfer of shares of Bank
Common Stock shall be made thereafter.
Section 3. Representations and Warranties of Holding and Bank
Holding and Bank represent and warrant to Whitney and the Acquiring
Bank that, as of the date on which Holding delivers the Schedule of Exceptions
to Whitney and as of the Closing Date, except as set forth in the Schedule of
Exceptions:
3.01. Consolidated Group; Organization; Qualification. "Holding's
consolidated group," as such term is used in this Agreement, consists of Holding
and Bank. Holding is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida, and is a bank holding company
within the meaning of the Bank Holding Company Act of 1956, as amended (the
"Bank Holding Company Act"). Bank is a state banking association, duly
organized, validly existing and in good standing under the laws of the State of
Florida. Each member of Holding's consolidated group has all requisite corporate
power and authority to own and lease its property and to carry on its business
as it is currently being conducted and to execute this Agreement and the Bank
Merger Agreement to which it is a party and to consummate the transactions
contemplated hereby, and is qualified and in good standing as a foreign
corporation in all jurisdictions in which the failure to so qualify would have a
material adverse effect on such member's financial condition, results of
operations or business.
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3.02. Capital Stock; Other Interests. The authorized capital stock (i)
of Holding consists of 2,000,000 shares of Holding Common Stock, of which
1,343,294 shares are issued and outstanding and no shares are held in its
treasury; and (ii) of Bank consists of 248,000 shares of common stock, of which
198,000 shares are issued and outstanding and no shares are held in its
treasury. All issued and outstanding shares of capital stock of each member of
Holding's consolidated group have been duly authorized and are validly issued,
fully paid and non-assessable, and all of the outstanding shares of Bank (other
than 1,367 shares of Bank Common Stock held by persons other than Holding) are
owned by Holding, free and clear of all liens, charges, security interests,
mortgages, pledges and other encumbrances. Other than the 1996 Warrants issued
pursuant to that certain Private Offering Memorandum of Holding dated January
14, 1994 (the "Offering Memorandum"), the holders of which are entitled to
acquire up to an aggregate of 90,997 shares of Holding Common Stock (the "1996
Warrants"), no member of Holding's consolidated group has outstanding any stock
options or other rights to acquire any shares of its capital stock or any
security convertible into such shares, or has any obligation or commitment to
issue, sell or deliver any of the foregoing or any shares of its capital stock.
The outstanding capital stock of each member of Holding's consolidated group
(including the 1996 Warrants) has been issued in compliance with all legal
requirements and in compliance with any preemptive or similar rights. The 1996
Warrants have been duly authorized and were validly issued in accordance with
the terms of the Offering Memorandum. All shares of Holding Common Stock issued
or that may be issued after the date hereof upon exercise of the 1996 Warrants
are, or will be when issued, duly authorized, validly issued, fully paid and
non-assessable. No member of Holding's consolidated group has a subsidiary
(other than Bank) or direct or indirect ownership interest exceeding 5% in any
firm, corporation, partnership or other entity.
3.03. Corporate Authorization; No Conflicts. Subject to the approval of
this Agreement and the Bank Merger Agreement by the shareholders of Holding and
Bank, respectively, in accordance with the Florida Business Corporation Law,
Florida state banking laws and applicable federal law, all corporate acts and
other proceedings required of each member of Holding's consolidated group for
the due and valid authorization, execution, delivery and performance of this
Agreement and the Bank Merger Agreement and consummation of the Mergers have
been validly taken. Subject to their approval by the shareholders of Holding and
Bank and to such regulatory approvals as are required by law, this Agreement and
the Bank Merger Agreement are legal, valid and binding obligations of Holding
and Bank and are enforceable against Holding and Bank, respectively, in
accordance with the respective terms hereof and thereof, except that enforcement
may be limited by bankruptcy, reorganization, insolvency and other similar laws
and court decisions relating to or affecting the enforcement of creditors'
rights generally and by general equitable principles. With respect to each
member of Holding's consolidated group, neither the execution, delivery or
performance of this Agreement or the Bank Merger Agreement, nor the consummation
of the transactions contemplated hereby or thereby will (i) violate, conflict
with, or result in a breach of any provision of, (ii) constitute a default (or
an event which that, with notice or lapse of time or both, would constitute a
default) under, (iii) result in the termination of or accelerate the performance
required by, or (iv) result in the creation of any lien, security interest,
charge or encumbrance upon any of its properties or assets under, any of the
terms, conditions or provisions of its articles of incorporation or association
or by-laws or any material note, bond, mortgage, indenture, deed of trust,
lease, license, agreement or other instrument or obligation to or by which it or
any of its assets is bound; or violate any order, writ, injunction, decree,
statute, rule or regulation of any governmental body applicable to it or any of
its assets.
3.04. Financial Statements, Reports and Proxy Statements. Holding has
delivered to Whitney true and complete copies of (a) the consolidated balance
sheets as of December 31, 1995 and December 31, 1994 of Holding and its
consolidated subsidiaries, the related consolidated statements of income,
shareholders' equity and cash flows for the respective years then ended, the
related notes thereto, and the report of its independent public accountants with
respect thereto (collectively, the "Financial Statements"), (b) the unaudited
consolidated balance sheets as of March 31, 1996 of Holding and its consolidated
subsidiaries, and the related unaudited statements of income, shareholders'
equity and cash flows for the three month periods then ended (collectively, the
"Interim Financial Statements"), (c) the annual report to the Board of Governors
of the Federal Reserve System ("Federal Reserve Board") for the year ended
December 31, 1995, of each member of Holding's consolidated group required to
file such reports, (d) all call reports, including all amendments thereto, made
to the Federal Deposit Insurance Corporation (the "FDIC") and the Department of
Banking and Finance, Office of the Comptroller of Florida (the "Florida
Comptroller") since December 31, 1992, of each member of Holding's consolidated
group required to file such reports and (e) all annual communications (including
any proxy information statements relating to meetings of Holding's or the Bank's
shareholders) disseminated to
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Holding's or the Bank's shareholders or presented to either of their Boards of
Directors at any time since December 31, 1992.
The Financial Statements and the Interim Financial Statements
have been (and all financial statements delivered to Whitney as required by this
Agreement will be) prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a basis consistent with prior periods, and
present fairly, in conformity with GAAP the consolidated results of operations
of Holding's consolidated group for the respective periods covered thereby and
the consolidated financial condition of its consolidated group as of the
respective dates thereof. All call and other regulatory reports referred to
above have been filed on the appropriate form and prepared in all material
respects in accordance with such form's instructions and the applicable rules
and regulations of the regulating federal agency. As of the date of the latest
balance sheet forming part of the Interim Financial Statements (the "Latest
Balance Sheet"), no member of Holding's consolidated group had, nor are any of
any such member's assets subject to, any material liability, commitment,
indebtedness or obligation (of any kind whatsoever, whether absolute, accrued,
contingent, matured or unmatured) which is not reflected and adequately reserved
against in accordance with GAAP. No report, including any report filed with the
Federal Reserve Board, the FDIC or the Florida Comptroller, or other report,
proxy statement or offering materials made or given to shareholders of Holding
or Bank, as of the respective dates thereof, contained, and no such report,
proxy statement, offering materials or report to shareholders filed, made or
disseminated after the date of this Agreement will contain, any untrue statement
of a material fact or omitted, or will omit, to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The Financial
Statements and Interim Financial Statements are supported by and consistent with
a general ledger and detailed trial balances of investment securities, loans and
commitments, depositors' accounts and cash balances on deposit with other
institutions, copies of which have been made available to Whitney.
3.05. Loan and Investment Portfolios. All loans, discounts and
financing leases (in which a member of Holding's consolidated group is lessor)
reflected on the Latest Balance Sheet (a) were, at the time and under the
circumstances in which made, made for good, valuable and adequate consideration
in the ordinary course of business of its consolidated group, (b) are evidenced
by genuine notes, agreements or other evidences of indebtedness and (c) to the
extent secured, have been secured by valid liens and security interests which
have been perfected. Accurate lists of all loans, discounts and financing leases
as of the date of the Latest Balance Sheet (or a more recent date), and of the
investment portfolios of each member of Holding's consolidated group as of such
date, have been delivered to Whitney. Except as specifically noted on the loan
schedule attached to the Schedule of Exceptions, no member of Holding's
consolidated group is a party to any written or oral loan agreement, note or
borrowing arrangement, including any loan guaranty, that was, as of the most
recent month-end (i) delinquent by more than 30 days in the payment of principal
or interest, (ii) known by any member of Holding's consolidated group to be
otherwise in material default for more than 30 days, (iii) classified as
"substandard," "doubtful," "loss," "other assets especially mentioned" or any
comparable classification by any member of Holding's consolidated group, the
FDIC or the Florida Comptroller, (iv) an obligation of any director, executive
officer or 10% shareholder of any member of Holding's consolidated group who is
subject to Regulation O of the Federal Reserve Board (12 C.F.R. Part 215), or
any person, corporation or enterprise controlling, controlled by or under common
control with any of the foregoing, or (v) in violation of any law, regulation or
rule of any governmental authority, other than those that are immaterial in
amount.
3.06. Adequacy of Allowances for Losses. Each of the allowances for
losses on loans, financing leases and other real estate shown on the Latest
Balance Sheet is adequate in accordance with applicable regulatory guidelines
and GAAP in all material respects, and there are no facts or circumstances known
to any member of Holding's consolidated group which are likely to require in
accordance with applicable regulatory guidelines or GAAP a future material
increase in any such provisions for losses or a material decrease in any of the
allowances therefor reflected in the Latest Balance Sheet. Each of the
allowances for losses on loans, financing leases and other real estate reflected
on the books of Holding's consolidated group at all times from and after the
date of the Latest Balance Sheet is adequate in accordance with applicable
regulatory guidelines and GAAP in all material respects, and there are no facts
or circumstances known to any member of Holding's consolidated group which are
likely to require in accordance with applicable regulatory guidelines or GAAP a
future material increase in any of such provisions for losses or a material
decrease in the allowances therefor reflected in the Latest Balance Sheet.
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3.07. Absence of Certain Changes or Events. Since the date of the
Latest Balance Sheet, no member of Holding's consolidated group has declared,
set aside for payment or paid any dividend to holders of, or declared or made
any distribution on, any shares of Holding's or Bank's capital stock except for
Holding's regular $.03 per share quarterly dividend. Since the date of the
Latest Balance Sheet, there has been no event or condition of any character
(whether actual or threatened) that has had, or can reasonably be anticipated to
have, a material adverse effect on the financial condition, results of
operations or business of Holding's consolidated group. Except as may result
from the transactions contemplated by this Agreement, no such member has, since
the date of the Latest Balance Sheet:
(a) borrowed any money (except for funds, not to exceed
$230,000, to be borrowed from the Federal Home Loan Bank to finance the lease of
the Bank's 9 Mile Road Branch) or entered into any capital lease or, except in
the ordinary course of business consistent with past practices, (i) lent any
money or pledged any of its credit in connection with any aspect of its business
whether as a guarantor, surety, issuer of a letter of credit or otherwise, (ii)
mortgaged or otherwise subjected to any lien, encumbrance or other liability any
of its assets, (iii) sold, assigned or transferred any of its assets in excess
of $100,000 in the aggregate, or (iv) incurred any material liability,
commitment, indebtedness or obligation (of any kind whatsoever, whether absolute
or contingent);
(b) suffered any material damage, destruction or loss to
immovable or movable property, whether or not covered by insurance;
(c) experienced any material change in asset
cncentrations as to customers or industries or in the nature and source of its
liabilities or in the mix of interest-bearing versus non-interest bearing
deposits;
(d) received notice or had knowledge or reason to believe that
any material labor unrest exists among any of its employees or that any group,
organization or union has attempted to organize any of its employees;
(e) received notice or had any knowledge or reason to
believe that any of its substantial customers has terminated or intends to
terminate such customer's relationship with it;
(f) failed to operate its business in the ordinary course
consistent with past practices, or failed to preserve its business organization
intact or to preserve the goodwill of its customers and others with whom it has
business relations;
(g) incurred any material loss except for losses adequately
reserved against on the date of this Agreement or on the Latest Balance Sheet
and expenses associated with this transaction, or waived any material right in
connection with any aspect of its business, whether or not in the ordinary
course of business;
(h) forgiven any debt owed to it, or canceled any of its
claims or paid any of its noncurrent obligations or liabilities;
(i) made any capital expenditure or capital addition or
betterment in excess of $25,000.00 (other than capital expenditures not
exceeding the $150,000 in the aggregate associated with furniture, fixtures,
equipment and the leasehold improvement and development costs for the Bank's 9
Mile Road Branch);
(j) entered into any agreement requiring the payment,
conditionally or otherwise, of any salary, bonus, extra compensation, pension or
severance payment to any of its present or former directors, officers or
employees, except such agreements as are terminable at will without any penalty
or other payment by it or increased (except for increases of not more than 8.0%
consistent with past practices) the compensation (including salaries, fees,
bonuses, profit sharing, incentive, pension, retirement or other similar
payments) of any such person whose annual compensation would, following such
increase, exceed $30,000.00; provided, however, that nothing in this Section
3.07(j) shall prohibit the payment, subject to Whitney's concurrence that the
written goals have been met, of deferred executive incentive pay for 1995 in an
amount not exceeding $10,000 in the aggregate and the payment at or prior to
Closing of 1996 executive incentive pay prorated through the Closing Date and
paid thereon (not to exceed, in the aggregate, $55,000 prorated for the period
January 1, 1996 through the Closing Date);
<PAGE>
(k) except as required in accordance with GAAP, changed
any accounting practice followed or employed in preparing the Financial
Statements or the Interim Financial Statements;
(l) made any loan, given any discount or entered into any
financing lease which has not been (i) made, at the time and under the
circumstances in which made, for good, valuable and adequate consideration in
the ordinary course of business, (ii) evidenced by genuine notes, agreements or
other evidences of indebtedness and (iii) fully reserved against in an amount
sufficient in accordance with applicable regulatory guidelines to provide for
all charge-offs reasonably anticipated in the ordinary course of business after
taking into account all recoveries reasonably anticipated in the ordinary course
of business; or
(m) entered into any agreement, contract or commitment to
do any of the foregoing.
3.08. Taxes. Each member of Holding's consolidated group has timely
filed all federal, state and local income, franchise, excise, real and personal
property, employment and other tax returns, tax information returns and reports
required to be filed, has paid all taxes, interest payments and penalties as
reflected therein which have become due, has made adequate provision for the
payment of all such taxes accruable for all periods ending on or before the date
of this Agreement (and will make such accruals through the Closing Date) to any
city, county, state, the United States or any other taxing authority, and is not
delinquent in the payment of any tax or material governmental charge of any
nature. The consolidated federal income tax returns of Holding's consolidated
group have not been audited by the Internal Revenue Service since prior to 1985.
No audit, examination or investigation is presently being conducted or is
presently being threatened by any taxing authority; no material unpaid tax
deficiencies or additional liabilities of any sort have been proposed to any
member of Holding's consolidated group by any governmental representative, and
no agreements for extension of time for the assessment of any tax have been
entered into by or on behalf of any member of Holding's consolidated group. Each
such member has withheld from its employees (and timely paid to the appropriate
governmental entity) proper and accurate amounts for all periods in compliance
with all tax withholding provisions of applicable federal, state and local laws
(including, without limitation, income, social security and employment tax
withholding for all forms of compensation).
3.09. Title to Assets. (a) On the date of the Latest Balance Sheet,
each member of Holding's consolidated group had and, except with respect to
assets disposed of for adequate consideration in the ordinary course of business
since such date, now has, good and merchantable title to all real property and
good and merchantable title to all other material properties and assets
reflected on the Latest Balance Sheet, and has good and merchantable title to
all real property and good and merchantable title to all other material
properties and assets acquired since the date of the Latest Balance Sheet, in
each case free and clear of all mortgages, liens, pledges, restrictions,
security interests, charges and encumbrances of any nature except for (i)
mortgages and encumbrances which secure indebtedness which is properly reflected
in the Latest Balance Sheet, which secure deposits of public funds as required
by law or which secure advances received from time to time from the Federal Home
Loan Bank; (ii) liens for taxes accrued but not yet payable; (iii) liens arising
as a matter of law in the ordinary course of business with respect to
obligations incurred after the date of the Latest Balance Sheet, provided that
the obligations secured by such liens are not delinquent or are being contested
in good faith; (iv) such imperfections of title and encumbrances, if any, as do
not materially detract from the value or materially interfere with the present
use of any of such properties or assets or the potential sale of any of such
owned properties or assets; and (v) capital leases and leases, if any, to third
parties for fair and adequate consideration. Each member of Holding's
consolidated group owns, or has valid leasehold interests in, all material
properties and assets used in the conduct of its business. Any real property and
other material assets held under lease by any such member are held under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made or and proposed to be made of such property
by such member of such property.
(b) With respect to each lease of any real property or a
material amount of personal property to which any member of Holding's
consolidated group is a party, except for financing leases in which a member of
such consolidated group is lessor, (i) such lease is in full force and effect in
accordance with its terms; (ii) all rents and other monetary amounts that have
become due and payable thereunder have been paid; (iii) there exists no default,
or event, occurrence, condition or act, which with the giving of notice, the
lapse of time or the happening of any further event, occurrence, condition or
act would become a default under such lease; and (iv) the Mergers will not
constitute a default or a cause for termination or modification of such lease.
<PAGE>
(c) No member of Holding's consolidated group has any legal
obligation, absolute or contingent, to any other person to sell or otherwise
dispose of any substantial part of its assets; or to sell or dispose of any of
its assets except in the ordinary course of business consistent with past
practices.
3.10. Legal Matters. (a) To the knowledge of Holding, (i) there is no
material claim, action, suit, proceeding, arbitration or investigation pending
in any court or before or by any governmental agency or instrumentality or
arbitration panel or otherwise, or threatened against any member of Holding's
consolidated group nor (ii) do any facts or circumstances exist that would be
likely to form the basis for any material claim against any member of Holding's
consolidated group that, if adversely determined, would have a material adverse
effect on Holding's consolidated group.
(b) Each member of Holding's consolidated group has complied
in all material respects with and is not in default in any material respect
under (and has not been charged or threatened with or come under investigation
with respect to any charge concerning any material violation of any provision
of) any federal, state or local law, regulation, ordinance, rule or order
(whether executive, judicial, legislative or administrative) or any order, writ,
injunction or decree of any court, agency or instrumentality.
(c) There are no material uncured violations, or violations
with respect to which material refunds or restitution may be required, cited in
any compliance report to any member of Holding's consolidated group as a result
of examination by any bank or bank holding company regulatory authority.
(d) No member of Holding's consolidated group is subject to
any written agreement, memorandum or order with or by any bank or bank holding
company regulatory authority.
(e) To the knowledge of Holding, there is no claim, action,
suit, proceeding, arbitration, or investigation, pending or threatened, in which
any material claim or demand is made or threatened to be made against any member
of Holding's consolidated group or any officer, director, advisory director or
employee, in each case by reason of any person being or having been an officer,
director, advisory director or employee of any such member.
3.11. Employee Benefit Plans. (a) Except for the plans listed on the
subsection of the Schedule of Exceptions that corresponds to this subsection
(the "ERISA Plans"), no member of Holding's consolidated group sponsors,
maintains or contributes to, and no such member has at any time sponsored,
maintained or contributed to, any employee benefit plan that is subject to any
of the provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). Each of the ERISA Plans has been maintained and administered
in all material respects in compliance with its terms, the provisions of ERISA
and all other applicable laws, and, where applicable, the provisions of the
Code. No ERISA Plan, including any "party in interest" or "disqualified person"
with respect thereto has engaged in a nonexempt prohibited transaction under
Section 4975 of the Code or Section 502(i) of ERISA; there is no matter relating
to any of the ERISA Plans pending or threatened, nor are there any facts or
circumstances existing that could reasonably be expected to lead to (other than
routine filings such as qualification determination filings), proceedings
before, or administrative actions by, any governmental agency; there are no
actions, suits or claims pending or threatened (including, without limitation,
breach of fiduciary duty actions, but excluding routine uncontested claims for
benefits) against any of the ERISA Plans or the assets thereof. Each member of
Holding's consolidated group has complied in all material respects with the
reporting and disclosure requirements of ERISA and the Code. None of the ERISA
Plans is a multi-employer plan within the meaning of Section 3(37) of ERISA. A
favorable determination letter has been issued by the Internal Revenue Service
with respect to each ERISA Plan that is intended to be qualified under Section
401(a) of the Code and the Internal Revenue Service has taken no action to
revoke any such letter and nothing has occurred, whether by action or failure to
act, which would cause the loss of such qualification. No member of Holding's
consolidated group has sponsored, maintained or made contributions to any plan,
fund or arrangement subject to Title IV of ERISA or the requirements of Section
412 of the Code or providing for medical benefits, insurance coverage or other
similar benefits for any period extending beyond the termination of employment,
except as may be required under the "COBRA" provisions of ERISA and the Code. No
member of Holding's consolidated group is obligated to provide medical insurance
after the termination of employment, except as to COBRA.
(b) Set forth on the subsection of the Schedule of Exceptions
corresponding to this subsection is a true and complete list of each benefit
plan and benefit arrangement of any member of Holding's consolidated group
<PAGE>
other than the ERISA Plans. True and complete copies of all plan (including
ERISA Plan) documents and written agreements (including all amendments and
modifications thereof), together with copies of any tax determination letters,
trust agreements, summary plan descriptions, insurance contracts, investment
management agreements and the three most recent annual reports on form series
5500 with respect to such plan or arrangement have been made available to
Whitney.
(c) All group health plans of any member of Holding's
consolidated group to which Section 4980B(f) of the Code or Section 601 of ERISA
applies are in compliance in all material respects with continuation coverage
requirements of Section 4980B(f) of the Code and Section 601 of ERISA and any
prior violations of such sections have been cured prior to the date hereof.
(d) Each plan, fund or arrangement previously sponsored or
maintained by any member of Holding's consolidated group, or to which any member
of Holding's consolidated group previously made contributions which has been
terminated by any member of Holding's consolidated group was terminated in
accordance with ERISA, the Code and the terms of such plan, fund or arrangement
and no event has occurred and no condition exists that would subject any member
of Holding's consolidated group, Whitney or the Acquiring Bank to any tax,
penalty, fine or other liability as a result of, directly or indirectly, the
termination of such plan, fund or arrangement.
(e) The current fair market value of the assets of each ERISA
Plan subject to the provisions of Title IV of ERISA equals or exceeds the
present value of the accrued benefits of each such plan as of the end of the
most recent plan year, calculated on a termination and on-going basis, and there
has been no material change likely to change the funding status of any such
plan. No funding deficiency within the meaning of Section 412 of the Code exists
with respect to any ERISA Plan. All contributions required or accrued under the
terms of any plan (including any ERISA Plan) have been made and all insurance
premiums required or accrued under the terms of any plan (including any ERISA
plan) have been paid as of the date hereof.
(f) The transactions contemplated by the loan agreements dated
March 11, 1988 and February 22, 1994 with Barnett Bank and the loan agreements
dated July 2, 1991, March 9, 1992 and June 5, 1992 with Compass Bank (the
"ESOP") (the "Loan") constitute an exempt loan within the meaning of Section
4975(3) of the Code. Neither the acquisition of securities with the proceeds of
the Loan nor the retention of such securities constitutes a breach of fiduciary
duty within the meaning of Section 404(a) of ERISA. The ESOP has been created,
organized and administered in accordance with the requirements applicable to
employee stock ownership plans as defined in Section 401(a) and 4975(e)(7) of
the Code. The securities acquired by the ESOP with the proceeds of the Loan have
the status of "qualifying employer securities" as that term is defined in
Section 4975(e) of the Code and "employer securities" as that term is defined in
Section 490(1) of the Code. The Loan is not in default as of the date hereof and
the execution of the transactions contemplated hereby will not result in a
breach of or a default under the agreements evidencing the Loan.
3.12. Insurance Policies. Each member of Holding's consolidated group
maintains in force insurance policies and bonds in such amounts and against such
liabilities and hazards as are considered by it to be adequate. An accurate list
of all such insurance policies is attached to the Schedule of Exceptions. No
member of Holding's consolidated group is now liable, nor has any such member
received any notice of any material retroactive premium adjustment. All policies
are valid and enforceable and in full force and effect, and no member of
Holding's consolidated group has received any notice of a material premium
increase or cancellation with respect to any of its insurance policies or bonds.
Within the last three years, no member of Holding's consolidated group has been
refused any basic insurance coverage sought or applied for (other than certain
exclusions for coverage of certain events or circumstances as stated in such
polices), and no such member has reason to believe that its existing insurance
coverage cannot be renewed as and when the same shall expire, upon terms and
conditions standard in the market at the time renewal is sought as favorable as
those presently in effect.
3.13. Agreements. (a) No member of Holding's consolidated group is
aparty to:
(i) any collective bargaining agreement;
<PAGE>
(ii) other than the employee benefits and plans
referred to in the section of the Schedule of Exceptions that corresponds to
subsection 3.11 of this Agreement, any employment or other agreement or
contract with or commitment to any employee except (x) the agreements,
arrangements, policies and practices referred to in the exceptions to
subparagraph (j) of subsection 3.07 of this Agreement, (y) such agreements
as are terminable without penalty upon not more than 30 days notice by the
employer and (z) the Employment Protection Agreement dated July 22, 1991
between Bank and Jerry W. Morrison, as amended to change the annual term to
be January 1 to December 31, and there are no deferred executive or
nonqualified deferred compensation arrangements (including split dollar
obligations and the like);
(iii) any obligation of guaranty or
indemnification except such indemnification of officers, directors, employees
and agents of Holding's consolidated group as on the date of this Agreement may
be provided in their respective articles of incorporation or association
and by-laws (and no indemnification of any such officer, director, employee
or agent has been authorized, granted or awarded), except if entered into in
the ordinary course of business with respect to customers of any member of
Holding's consolidated group, letters of credit, guaranties of endorsements
and guaranties of signatures;
(iv) any agreement, contract or commitment which
is or if performed will be materially adverse to the financial condition,
results of operations or business of Holding's consolidated group; or
(v) any agreement, contract or commitment
containing any covenant limiting the freedom of any member of Holding's
consolidated group (x) to engage in any line of business permitted by regulatory
authorities, (y) to compete with any person in a line of business permitted
by applicable regulatory guidelines to be engaged in by bank holding
companies or Florida chartered state banks or (z) to fulfill any of its
requirements or needs for services or products (including, for example,contracts
with vendors to supply customers with credit insurance); or
(vi) any written agreement, memorandum, letter,
order or decree, formal or informal,with any federal or state regulatory agency.
(b) The subsection of the Schedule of Exceptions that
corresponds to this subsection contains a list of each material agreement,
contract or commitment (except those entered into in the ordinary course of
business with respect to loans, lines of credit, letters of credit, depositor
agreements, certificates of deposit and similar banking activities and equipment
maintenance agreements which are not material) to which any member of Holding's
consolidated group is a party or which affects any such member. To Holding's
knowledge, no member of Holding's consolidated group has in any material respect
breached, nor is there any pending or threatened claim that it has materially
breached, any of the terms or conditions of any of such agreements, contracts or
commitments or of any material agreement, contract or commitment that it enters
into after the date of this Agreement. No member of Holding's consolidated group
is in material violation of any written agreement, memorandum, letter, order or
decree, formal or informal, with any federal or state regulatory agency.
3.14. Licenses, Franchises and Governmental Authorizations. Each member
of Holding's consolidated group possesses all licenses, franchises, permits and
other governmental authorizations necessary for the continued conduct of its
business. The deposits of Bank are insured by the FDIC to the extent provided by
applicable law, and there are no pending or threatened proceedings to revoke or
modify that insurance or for relief under 12 U.S.C. Section 1818.
3.15. Corporate Documents. Holding has delivered to Whitney, with
respect to each member of Holding's consolidated group, true and correct copies
of its articles of incorporation or articles of association, and its by-laws,
all as amended. All of the foregoing and all of the corporate minutes and stock
transfer records of each member of Holding's consolidated group are current,
complete and correct in all material respects.
3.16. Certain Transactions. No past or present director, executive
officer or five percent shareholder of any member of Holding's consolidated
group has, since January 1, 1991, engaged in any transaction or series of
transactions which, if such member had been subject to Section 14(a) of the
Exchange Act, would have been required to be disclosed pursuant to Item 404 of
Regulation S-K of the Rules and Regulations of the SEC.
<PAGE>
3.17. Broker's or Finder's Fees. Except for Allen C. Ewing & Company,
investment bankers, which will receive an amount not in excess of one-half of 1%
(or approximately $70,000) of the consideration for the Mergers (excluding any
portion of the consideration attributable to the Added Capital) in connection
with its rendering of financial advice, payable in accordance with the terms of
that certain letter agreement dated April 8, 1996 between Holding and Allen C.
Ewing & Company, a true and correct copy of which has been provided to Whitney,
no agent, broker, investment banker, investment or financial advisor or other
person acting on behalf of any member of Holding's consolidated group is
entitled to any commission, broker's or finder's fee from any of the parties
hereto in connection with any of the transactions contemplated by this
Agreement.
3.18. Environmental Matters. (a) (i) Each member of Holding's
consolidated group has obtained all material permits, licenses and other
authorizations that are required to be obtained by it under any applicable
Environmental Law Requirements (as hereinafter defined) in connection with the
operation of its businesses and ownership of its properties (collectively, the
"Subject Properties"), including without limitation, to the knowledge of
Holding, properties acquired by foreclosure or in settlement of loans;
(ii) Each member of Holding's consolidated group
is in compliance with all terms and conditions of such permits, licenses and
authorizations and with all applicable Environmental Law Requirements;
(iii) There are no past or present events,
conditions, circumstances, activities or plans by any member of Holding's
consolidated group related in any manner to any member of Holding's
consolidated group or the Subject Properties that did or would violate or
prevent compliance or continued compliance with any of the Environmental Law
Requirements, or give rise to any Environmental Liability, as hereinafter
defined;
(iv) To Holding's knowledge, there is no civil,
criminal or administrative action, suit, demand, claim, order, judgment,
hearing, notice or demand letter, notice of violation, investigation or
proceeding pending or threatened by any person against any member of
Holding's consolidated group, or any prior owner of any of the Subject
Properties which relates to the Subject Properties and relates in any way to
any Environmental Law Requirement or seeks to impose any Environmental
Liability; and
(v) To Holding's knowledge, no member of
Holding's consolidated group is subject to or responsible for any material
Environmental Liability which is not set forth and adequately reserved against
on the Latest Balance Sheet.
(b) "Environmental Law Requirement" means all applicable
present and future statutes, regulations, rules, ordinances, codes, licenses,
permits, orders, approvals, plans, authorizations, concessions, franchises and
similar items, of all governmental agencies, departments, commissions, boards,
bureaus, or instrumentalities of the United States, states and political
subdivisions thereof and all applicable judicial, administrative, and regulatory
decrees, judgments and orders relating to the protection of human health or the
environment, including without limitation: (A) all requirements, including but
not limited to those pertaining to reporting, licensing, permitting,
investigation, and remediation of emissions, discharges, releases, or threatened
releases of Hazardous Materials (as such term is defined below), chemical
substances, pollutants, contaminants, or hazardous or toxic substances,
materials or wastes whether solid, liquid, or gaseous in nature, into the air,
surface water, groundwater, or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
Hazardous Materials, chemical substances, pollutants, contaminants, or hazardous
or toxic substances, materials or wastes, whether solid, liquid, or gaseous in
nature; (B) all requirements pertaining to protection of the health and safety
of employees or the public; and (C) all requirements pertaining to the (i)
drilling, production, and abandonment of oil and gas wells, (ii) the
transportation of produced oil and gas, and (iii) the remediation of sites
related to that drilling, production or transportation.
(c) "Hazardous Materials" shall mean: (A) Any "hazardous
substance" as defined by either the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 USC Section 9601, et seq.) ("CERCLA")
as amended from time to time, or regulations promulgated thereunder; (B)
asbestos; (C) polychlorinated biphenyls; (D) any "regulated substance" as
defined by 40 C.F.R. Section 280.12, or the FL Ad. Code, Title 62, Chapter
62-761 and Sec. 62-761.200; (E) any naturally occurring radioactive material
("NORM"), as defined by applicable
<PAGE>
federal or state laws or regulations as amended from time to time, irrespective
of whether the NORM is located in Florida or another jurisdiction; (F) any
non-hazardous oilfield wastes ("NOW") defined under applicable federal or state
laws or regulations, irrespective of whether those wastes are located in Florida
or another jurisdiction; (G) any substance the presence of which on the Subject
Properties is prohibited by any lawful rules and regulations of legally
constituted authorities from time to time in force and effect relating to the
Subject Properties; and (H) any other substance which by any such rule or
regulation requires special handling in its collection, storage, treatment or
disposal.
(d) "Environmental Liability" shall mean (i) any liability or
obligation arising under any Environmental Law Requirement, or (ii) any
liability or obligation under any other theory of law or equity (including
without limitation any liability for personal injury, property damage or
remediation) that results from, or is based upon or related to, the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling, or the emission, discharge, release or threatened release into the
environment, of any Hazardous Material, pollutant, contaminant, chemical, or
industrial, toxic or hazardous substance or waste.
3.19. Compliance with Laws. Each member of Holding's consolidated group
is in compliance with all applicable laws, rules, regulations, orders, writs,
judgments and decrees the noncompliance with which reasonably could be expected
to have a material adverse effect on the financial condition, results of
operations or business of Holding's consolidated group taken as a whole. There
are no material uncured violations, or violations with respect to which material
refunds or restitution may be required, cited in any compliance report to any
member of Holding's consolidated group as a result of examination by any bank or
bank holding company regulatory authority, except those cited in examination
reports previously submitted to, and reviewed by, Whitney.
3.20. Intellectual Property. Each member of Holding's consolidated
group owns all trademarks, tradenames, service marks and other intellectual
property that is material to the conduct of its business.
3.21. Community Reinvestment Act. Bank has complied in all material
respects with the provisions of the Community Reinvestment Act ("CRA") and the
rules and regulations thereunder, have CRA ratings of not less than
"satisfactory," and have received no material criticism from regulators with
respect to discriminatory lending practices, and have no knowledge of any
conditions or circumstances that are likely to result in CRA ratings of less
than "satisfactory" or material criticism from regulators with respect to
discriminatory lending practices.
3.22. Accuracy of Statements. No warranty or representation made or to
be made by any member of Holding's consolidated group in this Agreement or in
any document furnished or to be furnished by any member of Holding's
consolidated group pursuant to this Agreement contains or will contain, as of
the date of this Agreement, the effective date of the Registration Statement (as
defined in subsection 5.14 hereof) and the Closing Date, an untrue statement of
a material fact or an omission of a material fact necessary to make the
statements contained herein and therein, in light of the circumstances in which
they are made, not misleading.
Section 4. Representations and Warranties of Whitney and the Acquiring
Bank
Whitney and the Acquiring Bank represent and warrant to
Holding and Bank that as of the date hereof and as of the Closing Date:
4.01. Consolidated Group; Organization; Qualification. "Whitney's
consolidated group," as such term is used in this Agreement, consists of Whitney
and Whitney National Bank ("WNB") and will include the Acquiring Bank upon its
formation and, in addition includes Whitney Bank of Alabama and several other
subsidiaries. Whitney is a corporation duly organized and validly existing under
the laws of the State of Louisiana and is a bank holding company within the
meaning of the Bank Holding Company Act. WNB is a national banking association
duly organized and validly existing and in good standing under the laws of the
United States of America. Whitney has all requisite corporate power and
authority to own and lease its property and to carry on its business as it is
currently being conducted and to execute and deliver this Agreement and to
consummate the transactions contemplated hereby, and is qualified and in good
standing as a foreign corporation in all jurisdictions in which the failure to
so qualify would have a material adverse effect on its financial condition,
results of operations or business.
<PAGE>
Pursuant to Section 1.01(a) of this Agreement, Whitney intends
to charter the Acquiring Bank and cause it to merge with Bank. At Closing, the
Acquiring Bank will be a national banking association duly organized, validly
existing and in good standing under the laws of the United States of America.
The Acquiring Bank will have all requisite corporate power and authority to own
and lease its property and to carry on its business as it is intended to be
conducted and to execute and deliver this Agreement and the Bank Merger
Agreement and to consummate the transactions contemplated hereby and thereby,
and will be qualified and in good standing as a foreign corporation in all
jurisdictions in which the failure to so qualify would have a material adverse
effect on its financial condition, results of operations or business.
4.02. Capital Stock. As of the date of this Agreement, the authorized
capital stock of Whitney consists of 40,000,000 shares of Whitney Common Stock.
As of March 31, 1996, 17,024,694 shares of Whitney Common Stock were issued and
outstanding and 561,929 shares were held in its treasury. All issued and
outstanding shares of capital stock of Whitney have been duly authorized and are
validly issued, fully paid and non-assessable. All issued and outstanding shares
of capital stock of the Acquiring Bank will be duly authorized and validly
issued, fully paid and (except as provided in 12 U.S.C. Section 55)
non-assessable. Upon the formation of the Acquiring Bank, Whitney will own all
of the issued and outstanding shares of capital stock of the Acquiring Bank free
and clear of all liens, charges, security interests, mortgages, pledges and
other encumbrances.
4.03. Corporate Authorization; No Conflicts. All corporate acts and
other proceedings required of Whitney for the due and valid authorization,
execution, delivery and performance of this Agreement and the Bank Merger
Agreement and consummation of the Merger have been, or will be prior to Closing,
validly and appropriately taken. All corporate acts and other proceedings
required of the Acquiring Bank for the due and valid authorization, execution,
delivery and performance of this Agreement and the Bank Merger Agreement and
consummation of the Bank Merger will be validly and appropriately taken prior to
Closing. Subject to such regulatory approvals as are required by law, this
Agreement and the Bank Merger Agreement are, and in the case of the Acquiring
Bank will be, legal, valid and binding obligations of Whitney and the Acquiring
Bank as the case may be, and are, and in the case of the Acquiring Bank will be,
enforceable against them in accordance with the respective terms of such
agreements, except that enforcement may be limited by bankruptcy,
reorganization, insolvency and other similar laws and court decisions relating
to or affecting the enforcement of creditors' rights generally and by general
equitable principles. With respect to each of Whitney and the Acquiring Bank,
neither the execution, delivery or performance of this Agreement or the Bank
Merger Agreement, nor the consummation of the transactions contemplated hereby
or thereby will (i) violate, conflict with, or result in a breach of any
provision of, (ii) constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, (iii) result in the
termination of or accelerate the performance required by, or (iv) result in the
creation of any lien, security interest, charge or encumbrance upon any of its
properties or assets under, any of the terms, conditions or provisions of its
articles of incorporation or by-laws (or comparable documents) or any material
note, bond, mortgage, indenture, deed of trust, lease, license, agreement or
other instrument or obligation to or by which it or any of its assets is bound;
or violate any order, writ, injunction, decree, statute, rule or regulation of
any governmental body applicable to it or any of its assets.
4.04. Financial Statements; Reports and Proxy Statements. (a) Whitney
has delivered to Holding true and complete copies of (i) the consolidated
balance sheets as of December 31, 1995 and December 31, 1994 of Whitney and its
consolidated subsidiaries, the related consolidated statements of operations,
changes in shareholders' equity and cash flows for the respective years then
ended, the related notes thereto, and the report of its independent public
accountants with respect thereto, as presented in Whitney's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995 filed with the SEC
(collectively, the "Whitney Financial Statements") and (ii) the unaudited
consolidated balance sheet as of March 31, 1996 of Whitney and its consolidated
subsidiaries and the related unaudited statements of operations and cash flows
for the three month period then ended (collectively, the "Whitney's Interim
Financial Statements").
(b) The Whitney Financial Statements and the Whitney Interim
Financial Statements have been prepared in conformity with GAAP applied on a
basis consistent with prior periods, and present fairly, in conformity with
GAAP, the consolidated results of operations of Whitney's consolidated group for
the respective periods covered thereby and the consolidated financial condition
of its consolidated group as of the respective dates thereof. All call and other
regulatory reports have been filed on the appropriate form and prepared in all
material respects in accordance
<PAGE>
with such form's instructions and the applicable rules and regulations of the
regulating federal agency. As of the date of the latest balance sheet forming
part of the Whitney Interim Financial Statements (the "Whitney Latest Balance
Sheet"), no member of Whitney's consolidated group had, nor were any of any of
such member's assets subject to, any material liability, commitment,
indebtedness or obligation (whether absolute, contingent, matured or unmatured),
which is not reflected and adequately reserved against in the Whitney Latest
Balance Sheet in accordance with GAAP. No report filed with Federal Reserve
Board or other bank regulatory body, as of the respective dates thereof,
contained and no such report filed after the date of this Agreement will
contain, any untrue statement of a material fact or omitted, or will omit, to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
4.05. Legality of Whitney Securities. All shares of Whitney Common
Stock to be issued pursuant to the Mergers have been duly authorized and, when
so issued, will be validly and legally issued, fully paid and non-assessable,
and will be, at the time of their delivery, free and clear of all liens,
charges, security interests, mortgages, pledges and other encumbrances and any
preemptive or similar rights.
4.06. SEC Reports. Whitney has previously delivered to Holding an
accurate and complete copy of the following Whitney reports filed with the SEC
pursuant to the Exchange Act: (a) annual reports on Form 10-K for the years
ended December 31, 1993, 1994 and 1995 and (b) proxy statements for the years
1993, 1994 and 1995; as of their respective dates, no such Report or
communication contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Whitney has timely filed all reports and other documents
required to be filed by it under the Securities Act and the Exchange Act.
4.07. Absence of Certain Changes or Events. Since the date of the
Whitney Latest Balance Sheet, there has been no event or condition of any
character (whether actual or threatened) that has had, or can reasonably be
anticipated to have, a material adverse effect on the financial condition,
results of operations or business of Whitney's consolidated group taken as a
whole.
4.08. Legal Matters. (a) There are no material actions, suits,
proceedings, arbitrations or investigations pending or, to Whitney's knowledge
threatened, against any member of Whitney's consolidated group which would be
required to be disclosed in a Form 10-K or Form 10-Q pursuant to Item 103 of
Regulation S-K of the SEC's Rules and Regulations that are not so disclosed.
(b) There are no material uncured violations, or violations
with respect to which material refunds or restitution may be required, cited in
any compliance report to any member of Whitney's consolidated group as a result
of examination by any bank or bank holding company regulatory authority.
(c) No member of Whitney's consolidated group is subject to
any written agreement, memorandum or order or decree with or by any bank or bank
holding company regulatory authority.
4.09. Accuracy of Statements. No warranty or representation made or to
be made by any member of Whitney's consolidated group in this Agreement or in
any document furnished or to be furnished by any member of Whitney's
consolidated group pursuant to this Agreement contains or will contain, as of
the date of this Agreement, the effective date of the Registration Statement (as
defined in Subsection 5.14 hereof) and the Closing Date, an untrue statement of
a material fact or an omission of a material fact necessary to make the
statements contained herein and therein, in light of the circumstances in which
they are made, not misleading.
Section 5. Covenants and Conduct of Parties Prior to the Effective
Date. The parties further covenant and agree as follows:
5.01. (a) Investigations; Planning. Each member of Holding's
consolidated group shall continue to provide to Whitney and the Acquiring Bank
and to their authorized representatives full access during all reasonable times
to its premises, properties, books and records (including, without limitation,
all corporate minutes, stock transfer records and, subject to compliance with
ss.655.057 of the Florida Banking Code, regulatory examination reports), and
<PAGE>
to furnish Whitney and the Acquiring Bank and such representatives with such
financial and operating data and other information of any kind respecting its
business and properties as Whitney and the Acquiring Bank shall from time to
time reasonably request. Any investigation shall be conducted in a manner which
does not unreasonably interfere with the operation of the business of Holding's
consolidated group. Each member of Holding's consolidated group agrees to
cooperate with Whitney and the Acquiring Bank in connection with planning for
the efficient and orderly combination of the parties and the operation of
Whitney and the Acquiring Bank after consummation of the Mergers. In the event
of termination of this Agreement prior to the Effective Date, Whitney shall,
except to any extent necessary to assert any rights under this Agreement or the
Bank Merger Agreement, return, without retaining copies thereof, or destroy (and
certify to same under penalty of perjury) all confidential or non-public
documents, work papers and other materials obtained from Holding's consolidated
group in connection with the transactions contemplated hereby and shall keep
such information confidential, not disclose such information to any other person
or entity except as may be required by legal process, and not use such
information in connection with its business, and shall cause all of its
employees, agents and representatives to keep such information confidential and
not to disclose such information or to use it in connection with its business,
in each case unless and until such information shall come into the public domain
through no fault of Whitney and the Acquiring Bank. Whitney and the Acquiring
Bank shall continue to provide Holding's executive officers with access to their
respective executive officers, during normal business hours and upon reasonable
notice, to discuss the business and affairs of Whitney and the Acquiring Bank to
the extent customary in transactions of the nature contemplated by this
Agreement.
(b) Delivery of Schedules of Exceptions; Due Diligence.
Whitney and Holding stipulate that they have entered into this Agreement prior
to Holding's delivery of its consolidated group's Schedule of Exceptions and
prior to Whitney's completion of Whitney's customary due diligence investigation
of Holding. Holding shall deliver to Whitney, on or before the 14th day
following the date hereof, its consolidated group's Schedule of Exceptions. Upon
such delivery, such Schedules shall be initialed on behalf of Whitney and
Holding, shall be appended hereto and shall form a part hereof for all purposes.
If Holding fails to deliver its consolidated group's Schedule of Exceptions on
or before the 14th day following the date hereof, Whitney may terminate this
Agreement without liability by giving written notice of termination to Holding.
Whitney's due diligence review shall be concluded during a 21 calendar day
period commencing on the first business day following Holding's delivery to
Whitney of its Schedule of Exceptions as provided herein (the "Review Period").
At or prior to expiration of the Review Period, Whitney shall elect, by written
notice to Holding, to either (a) proceed to the Closing (subject to the
satisfaction or waiver of all other conditions to Closing) or (b) terminate the
Agreement (without liability to Holding or Bank) if, in its sole and absolute
discretion, it is not satisfied with the results of such due diligence review or
for any other reason. Absent timely delivery of written notice electing to
terminate this Agreement, Whitney shall be deemed to have elected to proceed to
the Closing, subject to all other terms and conditions of this Agreement.
5.02. Cooperation and Best Efforts. Each of the parties hereto will
cooperate with the other parties and use its best efforts to (a) procure all
necessary consents and approvals of third parties, (b) complete all necessary
filings, registrations, applications, schedules and certificates, (c) satisfy
all requirements prescribed by law for, and all conditions set forth in this
Agreement to, the consummation of the Mergers and the transactions contemplated
hereby and by the Bank Merger Agreement, and (d) effect the transactions
contemplated by this Agreement and the Bank Merger Agreement at the earliest
practicable date.
5.03. Information for, and Preparation of, Registration Statement and
Proxy Statement. Each of the parties hereto will cooperate in the preparation of
the Registration Statement referred to in Section 5.14 and a proxy statement of
Holding and Bank (the "Proxy Statement") which complies with the requirements of
the Securities Act, the rules and regulations promulgated thereunder and other
applicable federal and state laws, for the purpose of registering the Whitney
Common Stock to be issued in the Mergers and submitting this Agreement, the Bank
Merger Agreement and the transactions contemplated hereby and thereby to
Holding's shareholders for approval. Each of the parties will as promptly as
practicable after the date hereof furnish all such data and information relating
to it and its subsidiaries as any of the other parties may reasonably request
for the purpose of including such data and information in the Registration
Statement and the Proxy Statement.
5.04. Approval of Bank Merger Agreement. Whitney, as the sole
shareholder of the Acquiring Bank, shall take all action necessary to effect
shareholder approval of the Bank Merger Agreement.
<PAGE>
5.05. Press Releases. Whitney and Holding will cooperate with each
other in the preparation of any press releases announcing the execution of this
Agreement or the consummation of the transactions contemplated hereby. Without
the prior written consent of the chief executive officer of the other party, no
member of Holding's consolidated group or Whitney's consolidated group will
issue any press release or other written statement for general circulation
relating to the transactions contemplated hereby, except as may otherwise be
required by law and, if practical, prior notice of such release is provided to
the other parties. Whitney agrees that it will make a press release with respect
to the results of operations of Whitney and its consolidated group as promptly
as practicable following receipt of financial results covering at least thirty
(30) days of post-mergers combined operations of Whitney to permit the
termination of the limitations set forth in the Shareholder Commitments on the
ability of each person referred to in Section 5.10 to resell shares of Whitney
Common Stock in a manner inconsistent with Whitney's ability to account for the
Mergers as a pooling of interests.
5.06. Preservation of Business. To the extent consistent with sound
business practices, each member of Holding's consolidated group will use its
best efforts to preserve the possession and control of all of its assets other
than those consumed or disposed of for value in the ordinary course of business
to preserve the goodwill of customers and others having business relations with
it and to do nothing knowingly to impair its ability to keep and preserve its
business as it exists on the date of this Agreement.
5.07. Conduct of Business in the Ordinary Course. Each member of
Holding's consolidated group shall conduct its business only in the ordinary
course consistent with past practices, and shall not, without the prior written
consent of the chief executive officer of Whitney or his duly authorized
designee:
(a) declare, set aside, increase or pay any dividend, or
declare or make any distribution on, or directly or indirectly combine, redeem,
reclassify, purchase, or otherwise acquire, any shares of its capital stock or
authorize the creation or issuance of or issue any additional shares of its
capital stock or any securities or obligations convertible into or exchangeable
for its capital stock, provided that this subparagraph shall not prevent the
payment by Holding of regular quarterly dividends of $.03 per share or any
issuance of shares of Holding Common Stock upon exercise of the 1996 Warrants;
(b) amend its articles of incorporation or by-laws or
adopt or amend any resolution or agreement concerning indemnification of its
directors or officers;
(c) enter into or modify any agreement so as to require the
payment, conditionally or otherwise, of any salary, bonus, extra compensation,
pension or severance payment to any of its present or former directors, officers
or employees except such agreements as are terminable at will without any
penalty or other payment by it, or increase the compensation (including
salaries, fees, bonuses, profit sharing, incentive, pension, retirement or other
similar benefits and payments) of any such person in any manner inconsistent
with its past practices;
(d) except as described in the Schedule of Exceptions or
except in the ordinary course of business consistent with past practices, place
or suffer to exist on any of its assets or properties any mortgage, pledge,
lien, charge or other encumbrance, except those of the character described in
subsection 3.09 hereof, or cancel any material indebtedness owing to it or any
claims which it may have possessed, or waive any right of substantial value or
discharge or satisfy any material noncurrent liability;
(e) acquire another business or merge or consolidate with
another entity, or sell or otherwise dispose of a material part of its assets
or, except in the ordinary course of business consistent with past practices or
as described in the Schedule of Exceptions;
(f) commit any act that is intended or reasonably may be
expected to result in any of its representations and warranties set forth in
this Agreement being or becoming untrue in any material respect, or in any of
the conditions to the Mergers set forth in Section 6 not being satisfied, or in
a violation of any provision of this Agreement, except, in every case, as may be
required by applicable law;
<PAGE>
(g) commit or fail to take any act which act or omission is
intended or reasonably may be expected to result in a material breach or
violation of any applicable law, statute, rule, governmental regulation or
order;
(h) fail to maintain its books, accounts and records in
the usual manner on a basis consistent with that heretofore employed;
(i) fail to pay, or to make adequate provision in all material
respects for the payment of, all taxes, interest payments and penalties due and
payable (for all periods up to the Effective Date, including that portion of its
fiscal year to and including the Effective Date) to any city, county, state, the
United States or any other taxing authority, except those being contested in
good faith by appropriate proceedings and for which sufficient reserves have
been established;
(j) dispose of investment securities in amounts or in a manner
inconsistent with past practices; or make investments in non-investment grade
securities or which are inconsistent with past investment practices;
(k) enter into any new line of non-banking business;
(l) (i) except as described in the Schedule of Exceptions,
charge off (except as may otherwise be required by law or by regulatory
authorities or by GAAP consistently applied) or sell (except for a price not
materially less than the value thereof) any of its portfolio of loans, discounts
or financing leases, or (ii) except as set forth on Schedule of Exceptions, sell
any asset held as other real estate or other foreclosed assets for an amount
materially less than 100% of its book value at the date of the Latest Balance
Sheet;
(m) make any extension of credit which, when added to all
other extensions of credit to a borrower and its affiliates, would exceed
Holding's or Bank's applicable regulatory lending limits;
(n) take or cause to be taken any action which would
disqualify the Mergers as a "pooling of interests" for accounting purposes or as
a "reorganization" within the meaning of Section 368(a) of the Code; or
(o) agree or commit to do any of the foregoing.
5.08. Additional Information. Holding and Bank will provide Whitney (a)
with prompt written notice of any material adverse change in the financial
condition, results of operations, business or prospects of any member of
Holding's consolidated group, any material breach by Holding or Bank of any of
its warranties, representations or covenants in this Agreement, or any material
action taken or proposed to be taken with respect to Holding or Bank by any
regulatory agency, (b) as soon as they become available, copies of any financial
statements, reports and other documents of the type referred to in Section 3.04
with respect to Holding or Bank, and (c) promptly upon its dissemination, any
report disseminated to Holding's or Bank's shareholders. Whitney will provide
Holding and Bank (a) with prompt written notice of any material breach by
Whitney of any of its warranties, representations or covenants in this Agreement
and (b) as soon as they become available, copies of any reports or other
documents of the type referred to in Section 4.06 of this Agreement with respect
to Whitney.
5.09. Shareholder Approval. Holding's Board of Directors shall submit
this Agreement to its shareholders for approval in accordance with the
applicable law, together with its recommendation that such approval be given, at
a special meeting of the shareholders of Holding duly called and convened for
that purpose as soon as practicable after the effective date of the Registration
Statement. Bank will submit this Agreement and the Bank Merger Agreement to
Bank's shareholders for approval in accordance with the applicable law at a
meeting duly called and convened for that purpose as soon as practicable. At
such meeting, Holding will, if the shareholders of Holding shall have so
approved this Agreement, vote all shares of Bank Common Stock held by it "for"
approval of the Bank Merger. The foregoing meetings will, if practicable, be
held on the same date but, in any event, the Bank meeting will not be convened
until the Holding meeting has been finally adjourned.
5.10. Restricted Whitney Common Stock. Holding will use its best
efforts to obtain as soon as practicable but in no event later than 30 days
prior to the Closing Date an agreement from each person who is a director,
executive
<PAGE>
officer or 5% beneficial owner of securities of Holding or Bank who will receive
shares of Whitney Common Stock by virtue of the Mergers to the effect that such
person will not dispose of any Holding Common Stock, Bank Common Stock, 1996
Warrants held by them or any Whitney Common Stock they receive pursuant to the
Mergers (a) in a manner that would disqualify the transactions contemplated
hereby from pooling of interests accounting treatment or (b) in the case of
Whitney Common Stock received pursuant to the Mergers, in violation of Rule 145
of the Securities Act or the rules and regulations of the SEC thereunder.
5.11. Loan Policy. No member of Holding's consolidated group will make
any loans, or enter into any commitments to make loans, which vary other than in
immaterial respects from its written loan policies, a true and correct copy of
which loan policies will be provided to Whitney concurrently with Holding's
Schedule of Exceptions, provided that this covenant shall not prohibit Bank from
extending or renewing credit or loans in the ordinary course of business
consistent with past lending practices or in connection with the workout or
renegotiation of loans in its loan portfolio on the date hereof.
5.12. No Solicitations. (a) Prior to the Effective Time or until the
termination of this Agreement, no member of Holding's consolidated group shall,
without the prior approval of Whitney, directly or indirectly, solicit, initiate
or encourage inquiries or proposals with respect to, or, except to the extent
required in the written opinion of its counsel to discharge properly its
fiduciary duties to Holding's consolidated group and its shareholders, furnish
any information relating to, or participate in any negotiations or discussions
concerning, any acquisition or purchase of all or a substantial portion of its
assets, or of a substantial equity interest in it, or any business combination
with it, other than as contemplated by transaction of the type that is referred
to in clauses (B) (i), (ii) and (iii) of subparagraph (f) of subsection 7.01 of
this Agreement (and in no event will any such information be supplied except
pursuant to a confidentiality agreement in form and substance substantially the
same as the confidentiality agreement between Holding and Whitney); and each
such member shall instruct its officers, directors, agents and affiliates to
refrain from doing any of the above, and will notify Whitney immediately if any
such inquiries or proposals are received by it, any such information is
requested from it, or any such negotiations or discussions are sought to be
initiated with it or any of its officers, directors, agents and affiliates;
provided, however, that nothing contained herein shall be deemed to prohibit any
officer or director of Holding or Bank from taking any action that in the
written opinion of counsel of Holding or Bank is required by law or is required
to discharge his fiduciary duties to Holding's consolidated group and its
shareholders.
(b) Neither the Board of Directors of Holding or Bank, nor any
committee thereof, shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Whitney, the approval or recommendation to
shareholders of this Agreement or the Mergers, (ii) approve or recommend, or
propose to recommend any takeover proposal with respect to Holding or Bank,
except such action that is required in the written opinion of its counsel to
discharge its fiduciary duties to Holding's consolidated group and its
shareholders, or (iii) modify or waive or release any party from any provision
of, or fail to enforce any provision of, if Whitney so requests such
enforcement, any confidentiality agreement entered into by Holding or Bank with
any prospective acquiror after the date of this Agreement or within two years
prior to such date.
5.13. Operating Functions. Each member of Holding's consolidated group
agrees to cooperate in the consolidation of appropriate operating functions with
Whitney to be effective on the Effective Date, provided that the foregoing shall
not be deemed to require any action that, in the opinion of such member's Board
of Directors, would adversely affect its operations if the Mergers were not
consummated.
5.14. Whitney Registration Statement. (a) Whitney will prepare and file
on Form S-4 a registration statement (the "Registration Statement") under the
Securities Act (which will include the Proxy Statement) complying with all the
requirements of the Securities Act applicable thereto, for the purpose, among
other things, of registering the Whitney Common Stock that will be issued to the
holders of Holding Common Stock and Bank Common Stock pursuant to the Mergers.
Whitney shall use its best efforts to cause the Registration Statement to become
effective as soon as practicable, to qualify the Whitney Common Stock under the
securities or blue sky laws of such jurisdictions as may be required and to keep
the Registration Statement and such qualifications current and in effect for so
long as is necessary to consummate the transactions contemplated hereby. As a
result of the registration of the Whitney Common Stock pursuant to the
Registration Statement, such stock shall be freely tradeable by the shareholders
of
<PAGE>
Holding except to the extent that the transfer of any shares of Whitney Common
Stock received by shareholders of Holding is subject to the provisions of Rule
145 under the Securities Act or restricted under applicable tax or pooling of
interests rules.
(b) Whitney will indemnify and hold harmless each member of
Holding's consolidated group and each of their respective directors, officers
and other persons, if any, who control Holding within the meaning of the
Securities Act from and against any losses, claims, damages, liabilities or
judgments, joint or several, to which they or any of them may become subject,
insofar as such losses, claims, damages, liabilities, or judgments (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, or in any amendment or supplement thereto, or in any state
application for qualification, permit, exemption or registration as a
broker/dealer, or in any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each such person for any legal or other expenses
reasonably incurred by such person in connection with investigating or defending
any such action or claim; provided, however, that Whitney shall not be liable,
in any such case, to the extent that any such loss, claim, damage, liability, or
judgment (or action in respect thereof) arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, or any such amendment or supplement thereto,
or in any such state application, or in any amendment or supplement thereto, in
reliance upon and in conformity with information written furnished to Whitney by
or on behalf of any member of Holding's consolidated group or any officer,
director or affiliate of any such member for use therein.
5.15. Application to Regulatory Authorities. Whitney shall prepare,
as promptly as practicable, all regulatory applications and filings which are
required to be made with respect to the Mergers.
5.16. Revenue Ruling. Whitney may elect to prepare (and in that event
Holding shall cooperate in the preparation of) a request for a ruling from the
Internal Revenue Service with respect to certain tax matters in connection with
the transactions contemplated by this Agreement and the Bank Merger Agreement.
5.17. Bond for Lost Certificates. Upon receipt of notice from any of
its shareholders that a certificate representing Holding Common Stock or Bank
Common Stock has been lost or destroyed and prior to issuing a new certificate,
Holding or Bank, as the case may be, shall require such shareholder to post a
bond in such amount as is sufficient to support the shareholder's agreement to
indemnify Holding or Bank against any claim made by the owner of such
certificate, unless Whitney agrees to the waiver of such bond requirement.
5.18. Dissenters. Holding and Bank shall give Whitney (i) prompt
written notice of, and a copy of, any instrument received by Holding or Bank
with respect to the assertion or perfection of dissenters rights, and (ii) the
opportunity to participate in any and all negotiations and proceedings with
respect to dissenters rights, should Whitney desire to do so.
5.19. Withholding. Whitney shall be entitled to deduct and withhold
from the consideration otherwise payable to any holder of Holding Common Stock
or Bank Common Stock after the Effective Time such amounts as Whitney may be
required by law to deduct and withhold therefrom. All such deductions and
withholdings shall be deemed for all purposes of this Agreement and the Bank
Merger Agreement to have been paid to the person with respect to whom such
deduction and withholding was made.
5.20. Employees and Certain Other Matters. All employees of Holding and
Bank at the Effective Time shall become employees of the Acquiring Bank. Whitney
and the Acquiring Bank retain the right to terminate any such employee, and to
modify the job duties, compensation and authority of such employee. At the
Effective Time, all persons then employed by Holding and Bank shall be eligible
for such employee benefits as are generally available to employees of Whitney's
Louisiana and Alabama banking subsidiaries having like tenure, officer status
and compensation levels except (i) all executive and senior level management
bonuses, stock options, restricted stock and similar benefits shall be at the
discretion of the Acquiring Bank's Compensation Committee and (ii) all Holding
and Bank employees who are employed at the Effective Time shall be given full
credit for all prior service as employees of Holding or Bank provided, however,
that all such employees shall be treated as newly hired Acquiring Bank employees
(i.e., prior service
<PAGE>
credit with Holding and Bank shall not be considered in determining future
benefits under Whitney's or Whitney's banking subsidiaries defined benefit
pension plan) for all purposes of Whitney's or Whitney's Louisiana and Alabama
banking subsidiaries' defined benefit pension plan.
5.21. Continuing Indemnity; Insurance. Whitney covenants and agrees
that:
(a) All rights to indemnification and all limitations of
liability existing in favor of indemnified parties under Holding's Articles of
Incorporation and By-Laws and in the Articles of Incorporation and By-Laws of
Bank (as the case may be) as in effect as of the date of this Agreement with
respect to matters occurring prior to or at the later to occur of the Effective
Time or the effective time of the Bank Merger shall survive the Mergers and
shall continue in full force and effect, without any amendment thereto, for a
period of three (3) years from such applicable effective time; provided,
however, that all rights to indemnification in respect of any claim asserted or
made as to which Whitney is notified within such period shall continue until the
final disposition of such claim.
(b) Whitney shall use best efforts to cause the persons
serving as officers and directors of Holding and Bank immediately prior to the
Effective Time (in the case of Holding) and the effective time of the Bank
Merger (in the case of Bank) to be covered for a period of three (3) years from
such applicable effective time by the directors' and officers' liability
insurance policy maintained by Holding and Bank with respect to acts or
omissions occurring prior to or at the respective effective times which were
committed by such officers and directors in their capacity as such; provided
that Whitney may substitute therefor policies of at least the same coverage and
amounts containing terms and conditions which are no less advantageous to such
directors and officers, and, provided further that Whitney shall not be
obligated to make premium payments for the insurance policies provided by this
Section 5.21 to the extent that such premiums exceed approximately two times the
annual premium for such coverage in force prior to the Effective Date.
(c) If Whitney or any of its successors or assigns (i) shall
consolidate with or merge into any corporation or entity and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) shall transfer all or substantially all of its properties and assets to any
individual, corporation or other entity, then and in each such case, proper
provisions shall be made so that the successors and assigns of Whitney shall
assume the obligations set forth in this Section 5.21.
(d) The provisions of this Section 5.21 are intended to be for
the benefit of, and shall be enforceable by, each indemnified party and his or
her heirs and representatives.
5.22. Century, Florida Branch. Whitney and the Acquiring Bank agree to
operate the Century, Florida branch of the Bank ("Century Branch") for a period
of not less than two years commencing on the Effective Date. The Acquiring Bank
will not close or sell the Century Branch without first using its best efforts
to offer it for sale under a purchase and assumption transaction to any bank
owned by a group of local residents. For purposes of this Agreement, a "group of
local residents" shall mean a group the majority of which is controlled by
individuals residing within a thirty mile radius of Century, Florida.
Section 6. Conditions of Closing
6.01. Conditions of All Parties. The obligations of each of the
parties hereto to consummate the Mergers are subject to the satisfaction of the
following conditions at or prior to the Closing:
(a) Shareholder Approval. This Agreement and the Bank
Merger Agreement shall have been duly approved by the shareholders of Holding
and Bank.
(b) Effective Registration Statement. The Registration
Statement shall have become effective prior to the mailing of the Proxy
Statement, no stop order suspending the effectiveness of the Registration
Statement shall have been issued, and no proceedings for that purpose shall have
been instituted or, to the knowledge of any party, shall be contemplated, and
Whitney shall have received all state securities laws permits and authorizations
necessary to consummate the transactions contemplated hereby.
<PAGE>
(c) No Restraining Action. No action or proceeding shall have
been threatened or instituted before a court or other governmental body to
restrain or prohibit the transactions contemplated by this Agreement or the Bank
Merger Agreement or to obtain damages or other relief in connection with the
execution of such agreements or the consummation of the transactions
contemplated hereby or thereby; and no governmental agency shall have given
notice to any party hereto to the effect that consummation of the transactions
contemplated by this Agreement or the Bank Merger Agreement would constitute a
violation of any law or that it intends to commence proceedings to restrain
consummation of the Mergers.
(d) Statutory Requirements and Regulatory Approval. All
statutory requirements for the valid consummation of the transactions
contemplated by the Bank Merger Agreement and this Agreement shall have been
fulfilled; all appropriate orders, consents and approvals from all regulatory
agencies and other governmental authorities whose order, consent or approval is
required by law for the consummation of the transactions contemplated by this
Agreement and the Bank Merger Agreement shall have been received; and the terms
of all requisite orders, consents and approvals shall then permit the
effectuation of the Mergers without imposing any material conditions with
respect thereto except for any such conditions that are acceptable to Whitney.
(e) Tax Opinion. Whitney and Holding shall have received the
opinion of Arthur Andersen LLP, in form and substance reasonably satisfactory to
both of them, as to certain tax aspects of the Mergers, including an opinion
that the receipt of Whitney Common Stock by Holding's and Bank's shareholders
will not be a taxable event to such shareholders.
6.02. Additional Conditions of Whitney. The obligations of Whitney
and the Acquiring Bank to consummate the Mergers are also subject to the
satisfaction of the following additional conditions at or prior to the Closing:
(a) Representations, Warranties and Covenants. The
representations and warranties of Holding and Bank contained in this Agreement
shall be true and correct in all material respects, individually and in the
aggregate, on and as of the Closing Date, with the same effect as though made on
and as of such date, except to the extent of changes permitted by the terms of
this Agreement, and each of Holding and Bank shall have in all material respects
performed all obligations and complied with all covenants required by this
Agreement and the Bank Merger Agreement to be performed or complied with by it
at or prior to the Closing. In addition, each of Holding and Bank shall have
delivered to Whitney and the Acquiring Bank its certificate dated as of the
Closing Date and signed by its chief executive officer and chief financial
officer to the effect that, except as specified in such certificate, such
persons do not know, and have no reasonable grounds to know, of any material
failure or breach of any representation, warranty or covenant made by it in this
Agreement.
(b) No Material Adverse Change. There shall not have occurred
any material adverse change from the date of the Latest Balance Sheet to the
Closing Date in the financial condition, results of operations or business of
Holding's consolidated group. Without limiting the occurrences that would
constitute such a material adverse change with respect to Bank, a decrease in
the value of Bank's investment portfolio of more than 15% from its value on
March 31, 1996 attributable to changes in general interest rate environment
shall be deemed to constitute such a change.
(c) Accountants' Letters. Whitney shall have received
"comfort" letters from Saltmarsh, Cleveland & Gund, independent public
accountants for Holding and Bank, dated, respectively, within three (3) days
prior to the date of the Proxy Statement and within three (3) days prior to the
Closing Date, in customary form for transactions of this sort and in substance
satisfactory to Whitney.
(d) Opinion of Counsel. Whitney shall have received from James
J. Reeves, general counsel to Holding and Bank, opinions, dated as of the
Closing Date, in form and substance satisfactory to Whitney. In giving such
opinions, such counsel may rely as to questions of fact upon certificates of one
or more officers of the members of Holding's consolidated group and governmental
officials and on opinions of special counsel acceptable to Whitney as to matters
of securities, employment or tax law.
<PAGE>
(e) Tax Consequences of Mergers. Whitney shall have
received satisfactory assurances from their independent accountants that the
consummation of the Mergers will not be a taxable event to Whitney and the
Acquiring Bank.
(f) Pooling of Interest. Prior to the expiration of the Review
Period and within three (3) days prior to the Closing Date, Saltmarsh, Cleveland
& Gund shall have rendered an opinion to Whitney, in form and substance
satisfactory to Whitney, to the effect that, based upon the facts and
circumstances then known to Saltmarsh, Cleveland & Gund, Whitney will be
permitted to account for the Mergers as a pooling of interests. Neither
Whitney's independent accountants nor the SEC shall have taken the position that
the transactions contemplated by this Agreement and the Bank Merger Agreement do
not qualify for pooling of interests accounting treatment.
(g) Shareholder's Commitment. A Shareholder's Commitment
substantially in the form specified on Exhibit 6.02(g) hereto (as contemplated
by Section 5.10) shall have been executed by each person who serves as an
executive officer or director of Holding or Bank or who owns 5% or more of the
Holding Common Stock outstanding; and Whitney shall have received from each such
person a written confirmation dated not earlier than five days prior to the
Closing Date to the effect that each representation made in such person's
Shareholder's Commitment is true and correct as of the date of such confirmation
and that such person has complied with all of his or her covenants therein
through the date of such confirmation.
(h) Regulatory Action. No adverse regulatory action shall be
pending or threatened against any member of Holding's consolidated group,
including (without limitation) any proposed amendment to any existing agreement,
memorandum, letter, order or decree, formal or informal, between any regulator
and any member of Holding's consolidated group, if such action would or could
impose any material liability on Whitney or interfere in any material respect
with the conduct of the businesses of Whitney's consolidated group following the
Mergers.
(i) Average Market Price. The Average Market Price of the
Whitney Common Stock as calculated in accordance with Section 2.01 (but without
regard to the proviso contained therein) shall not be more than $35.00, provided
that Whitney may not terminate this Agreement pursuant to this Section 6.02(i)
if Whitney has executed a definitive merger or other acquisition agreement as a
result of which Whitney would cease to be an independent, public company.
6.03. Additional Conditions of Holding and Bank. The obligations of
Holding and Bank to consummate the Mergers are also subject to the satisfaction
of the following additional conditions at or prior to the Closing:
(a) Representations, Warranties and Covenants. The
representations and warranties of Whitney and the Acquiring Bank contained in
this Agreement shall be true and correct in all material respects, individually
and in the aggregate, on the Closing Date, with the same effect as though made
on and as of such date, except to the extent of changes permitted by the terms
of this Agreement, and each of Whitney and the Acquiring Bank shall have in all
material respects performed all obligations and complied with all covenants
required by this Agreement and the Bank Merger Agreement to be performed or
complied with by it at or prior to the Closing. In addition, each of Whitney and
the Acquiring Bank shall have delivered to Holding and Bank its certificate
dated as of the Closing Date and signed by its chief executive officer and chief
financial officer to the effect that, except as specified in such certificate,
such persons do not know, and have no reasonable grounds to know, of any
material failure or breach of any representation, warranty or covenant made by
it in this Agreement.
(b) Opinion of Counsel. Holding and Bank shall have received
from Milling, Benson, Woodward, Hillyer, Pierson & Miller, L.L.P., counsel for
Whitney and the Acquiring Bank, an opinion, dated as of the Closing Date,
customary in scope and in form and substance satisfactory to Holding and Bank.
In giving such opinion, such counsel may rely as to questions of fact upon
certificates of one or more officers of Whitney or members of Whitney's
consolidated group, and governmental officials and as to matters of law other
than Louisiana or federal law on the opinions of foreign counsel retained by
them or Whitney.
(c) Opinion of Investment Bankers. Holding and Bank
shall have received letters from Allen C. Ewing & Company dated the date of the
mailing of the Proxy Statement to shareholders of Holding and Bank and
<PAGE>
dated the date of the meetings of the shareholders of Holding and Bank, in each
case in form and substance satisfactory to Holding and Bank, confirming such
financial advisor's prior opinion to the Boards of Directors of Holding and Bank
to the effect that the consideration to be paid in the Mergers is fair to the
shareholders of Holding and Bank from a financial point of view and that the
allocation of the Maximum Deliverable Amount between the shareholders of Holding
and the shareholders of Bank is fair from a financial point of view.
(d) Tax Opinion. Holding and Bank shall have received the
opinion of Arthur Andersen LLP as to certain tax aspects of the transactions
contemplated by this Agreement and the Bank Merger Agreement, in form and
substance satisfactory to Holding and Bank.
(e) No Material Adverse Change. There shall not have occurred
any material adverse change from Whitney's Latest Balance Sheet to the Effective
Date in the financial condition, results of operations or business of Whitney's
consolidated group taken as a whole.
(f) Average Market Price. The Average Market Price of the
Whitney Common Stock as calculated in accordance with Section 2.01 (but without
regard to the proviso contained therein) shall not be less than $27.00.
6.04. Waiver of Conditions. Any condition to a party's obligations
hereunder may be waived by that party, other than the conditions specified in
subparagraphs (a), (b) and (d) of subsection 6.01 hereof and the condition
specified in subparagraph (c) of subsection 6.03 hereof. The failure to waive
any condition hereunder shall not be deemed a breach of subsection 5.02 hereof.
Section 7. Termination
7.01. Termination. This Agreement and the Bank Merger Agreement
may be terminated and the Mergers contemplated herein abandoned at any time
before the Effective Time, whether before or after approval by the
shareholders of Holding and Bank:
(a) Mutual Consent. By the mutual consent of the Boards
of Directors of Whitney and Holding.
(b) Breach. By the Board of Directors of either Whitney or
Holding in the event of a breach by any member of the consolidated group of the
other of them of any representation or warranty contained in this Agreement or
of any covenant contained in this Agreement, which in either case cannot be, or
has not been, cured within 15 days after written notice of such breach is given
to the entity committing such breach, provided that the right to effect such
cure shall not extend beyond the date set forth in subparagraph (c) below.
(c) Abandonment. By the Board of Directors of either Whitney
or Holding if (i) all conditions to Closing required by Section 6 hereof have
not been met by or waived by Whitney or Holding by November 30, 1996, or (ii)
any such condition cannot be met by November 30, 1996 and has not been waived by
each party in whose favor such condition inures, or (iii) if the Mergers have
not been consummated by November 30, 1996, provided that the failure to
consummate the transactions contemplated hereby is not caused by the party
electing to terminate pursuant to this clause (iii).
(d) Dissenting Shareholders. By Whitney, if the number of
shares of Holding Common Stock and Bank Common Stock as to which the holders
thereof are, at the time of the Closing, legally entitled to assert dissenting
shareholders rights plus the number of such shares as to which the holders
thereof are entitled to receive cash payments in lieu of fractional shares
exceeds that number of shares of Holding Common Stock and Bank Common Stock that
would preclude pooling of interests accounting for the Mergers.
(e) Shareholder Vote. By Whitney if this Agreement or the
Company Merger fails to receive the requisite vote at any meeting of Holding
shareholders called for the purpose of voting thereon, or if this Agreement or
the Bank Merger Agreement fails to receive the requisite vote at any meeting of
Bank shareholders called for the purpose of voting thereon.
<PAGE>
(f) Holding Recommendation. By Whitney if the Board of
Directors of Holding or Bank (A) shall withdraw, modify or change its
recommendation to its shareholders of this Agreement or the Mergers or shall
have resolved to do any of the foregoing; (B) shall have recommended to the
shareholders of Holding or Bank (or in the case of (iii) approved) any of the
following (being referred to herein as an "Acquisition Transaction") (i) any
merger, consolidation, share exchange, business combination or other similar
transaction (other than the transactions contemplated by this Agreement); (ii)
any sale, lease, transfer or other disposition of all or substantially all of
the assets of any member of Holding's consolidated group; or (iii) any
acquisition, by any person or group, of the beneficial ownership of 15% or more
of any class of Holding capital stock; or (C) shall have made any announcement
of a proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.
(g) Prior to Notification Date. By Whitney by delivery
of a notice to terminate this Agreement pursuant to Section 5.01(b).
(h) Acquisition Transaction. By Holding in the event Holding
receives a written offer with respect to an Acquisition Transaction and the
Board of Directors of Holding determines in good faith, after consultation with
its financial advisors and counsel, that such Acquisition Transaction is more
favorable to Holding's shareholders than the transactions contemplated by this
Agreement.
7.02. Effect of Termination; Survival. Upon termination of this
Agreement pursuant to this Section 7, the Bank Merger Agreement shall also
terminate, and this Agreement and the Bank Merger Agreement shall be void and of
no effect, and there shall be no liability by reason of this Agreement or the
Bank Merger Agreement, or the termination thereof, on the part of any party or
their respective directors, officers, employees, agents or shareholders except
for any liability of a party hereto arising out of (i) an intentional breach of
any representation, warranty or covenant in this Agreement prior to the date of
termination, except if such breach was required by law or by any bank or bank
holding company regulatory authority or (ii) a breach of any covenant that
survives pursuant to the following sentence. The following provisions shall
survive any termination of this Agreement: the second last sentence of
subsection 5.01(a); subsection 7.02; subsection 7.03 and Section 8.
7.03. Termination Fee. If this Agreement is terminated pursuant to
7.01(h), then Holding shall pay or cause to be paid to Whitney upon demand a fee
of $786,000 (the "Termination Fee"), payable in same day funds.
Section 8. Miscellaneous
8.01. Notices. Any notice, communication, request, reply, advice or
disclosure (hereinafter severally and collectively "notice") required or
permitted to be given or made by any party to another in connection with this
Agreement or the Bank Merger Agreement or the transactions herein or therein
contemplated must be in writing and may be given or served by depositing the
same in the United States mail, postage prepaid and registered or certified with
return receipt requested, or by delivering the same to the address of the person
or entity to be notified, or by sending the same by a national commercial
courier service (such as Airborne Express, Federal Express, Emery Air Freight,
Network Courier, Purolator or the like) for next-day delivery provided such
delivery is confirmed in writing by such courier. Notice deposited in the mail
in the manner hereinabove described shall be effective 48 hours after such
deposit, and notice delivered in person or by commercial courier shall be
effective at the time of delivery. A party delivering notice shall endeavor to
obtain a receipt therefor. For purposes of notice, the addresses of the parties
shall, until changed as hereinafter provided, be as follows:
If to Whitney or the Acquiring Bank:
Whitney Holding Corporation
Attention: Mr. William Marks
228 St. Charles Avenue
New Orleans, Louisiana 70130
<PAGE>
With copies to:
Whitney National Bank
Legal Department
Attention: Joseph S. Schwertz, Jr.
228 St. Charles Avenue
New Orleans, Louisiana 70130
If to Holding or Bank:
Liberty Holding Company
Attention: Jerry W. Morrison
President
201 N. Palafox
Pensacola, FL 32501
PERSONAL & CONFIDENTIAL
With copies to:
Mr. James J. Reeves
Attorney at Law
730 Bayfront Parkway, Suite 4-B
Pensacola, Florida 32501
8.02. Waiver. The failure by any party to enforce any of its rights
hereunder shall not be deemed to be a waiver of such rights, unless such waiver
is an express written waiver which has been signed by the waiving party. Waiver
of any one breach shall not be deemed to be a waiver of any other breach of the
same or any other provision hereof.
8.03. Expenses. Except as otherwise provided herein, regardless of
whether the Mergers are consummated, all expenses incurred in connection with
this Agreement and the Bank Merger Agreement and the transactions contemplated
hereby and thereby shall be borne by the party incurring them.
8.04. Headings. The headings in this Agreement have been included
solely for reference and shall not be considered in the interpretation or
construction of this Agreement.
8.05. Annexes, Exhibits and Schedules. The annexes, exhibits and
schedules to this Agreement are incorporated herein by this reference and
expressly made a part hereof.
8.06. Integrated Agreement. This Agreement, the Bank Merger Agreement,
the exhibits and schedules hereto and all other documents and instruments
delivered in accordance with the terms hereof constitute the entire
understanding and agreement among the parties hereto with respect to the subject
matter hereof, and there are no agreements, understanding, restrictions,
representations or warranties among the parties other than those set forth
herein or therein, all prior agreements and understandings being superseded
hereby.
8.07. Choice of Law. The validity of this Agreement and the Bank Merger
Agreement, the construction of their terms and the determination of the rights
and duties of the parties hereto in accordance therewith shall be governed by
and construed in accordance with the laws of the United States and those of the
State of Louisiana applicable to contracts made and to be performed wholly
within such State, except to the extent that the laws of the State of Florida
require this Agreement and the Bank Merger Agreement to be governed by the laws
of that state.
8.08. Parties in Interest. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that this Agreement may not be transferred or assigned by any member of
either consolidated group without the prior written consent of the other parties
hereto, including any transfer or
<PAGE>
assignment by operation of law. Nothing in this Agreement or the Bank Merger
Agreement is intended or shall be construed to confer upon or to give any person
other than the parties hereto any rights or remedies under or by reason of this
Agreement or the Bank Merger Agreement, except as expressly provided for herein
and therein.
8.09. Amendment. The parties may, by mutual agreement of their
respective Boards of Directors, amend, modify or supplement this Agreement, the
Bank Merger Agreement, or any exhibit or schedule of any of them, in such manner
as may be agreed upon by the parties in writing, at any time before or after
approval of this Agreement and the Bank Merger Agreement and the transactions
contemplated hereby and thereby by the shareholders of the parties hereto. This
Agreement and any exhibit or schedule to this Agreement may be amended at any
time and, as amended, restated by the chief executive officers of the respective
parties (or their respective designees) without the necessity for approval by
their respective Boards of Directors or shareholders, to correct typographical
errors or to change erroneous references or cross references, or in any other
manner which is not material to the substance of the transactions contemplated
hereby.
8.10. Counterparts. This Agreement may be executed by the parties
in any number of counterparts, all of which shall be deemed an original, but all
of which taken together shall constitute one and the same document.
8.11. Non-Survival of Representations and Warranties; Covenants. None
of the representations and warranties in this Agreement or in any instrument
delivered pursuant hereto shall survive the Effective Time. Each party hereby
agrees that its sole right and remedy with respect to any breach of a
representation or warranty or covenant by the other party shall be not to close
the transactions described herein if such breach results in the nonsatisfaction
of a condition set forth in Section 6 hereof; provided, however, that the
foregoing shall not be deemed to be a waiver of any claim for an intentional
breach of a representation, warranty or covenant or for fraud except if such
breach is required by law or by any bank or bank holding company regulatory
authority; it being understood that a disclosure in any closing certificate
provided in accordance with subparagraph (a) of subsection 6.02 or subparagraph
(a) of subsection 6.03 hereof concerning an inaccuracy of a representation or
warranty shall not of itself be deemed to be an intentional breach of such
representation or warranty. The covenants of the parties set forth herein shall
survive the Effective Time in accordance with their terms.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
WHITNEY HOLDING CORPORATION
BY: /s/ William L. Marks
----------------------
William L. Marks
ITS: Chairman and CEO
LIBERTY HOLDING COMPANY
BY: /s/ Martha Wilder
----------------------
Martha Wilder
ITS: Chairman of the Board
LIBERTY BANK
BY: /s/ Jerry W. Morrison
-----------------------
Jerry W. Morrison
ITS: President and CEO
<PAGE>
Exhibit 1.01(b) to
Agreement and Plan of Merger
CERTIFICATE OF MERGER
OF
LIBERTY HOLDING COMPANY
(a Florida corporation)
With And Into
WHITNEY HOLDING CORPORATION
(a Louisiana corporation)
(Filed pursuant to Section 112F
of the Louisiana Business Corporation Law)
The undersigned, acting pursuant to Section 112F of the Louisiana
Business Corporation Law ("LBCL"), hereby certifies that:
First: The name and state of incorporation of each of the corporations
that are parties to the merger to which this certificate relates (the
"Constituent Corporations") are as follows:
Name State of Incorporation
---- -----------------------
Whitney Holding Corporation Louisiana
Liberty Holding Company Florida
Second: An Agreement and Plan of Merger between the Constituent
Corporations, among others (the "Agreement"), providing for the merger (the
"Merger") of Liberty Holding Company ("Holding") with and into Whitney Holding
Corporation ("Whitney") has been approved, adopted, certified, executed and
acknowledged by each of the Constituent Corporations in accordance with the
requirements of Section 112 of the LBCL [and Section ____ of the Florida
Business Corporation Law].
Third: At the Effective Time (as defined in paragraph Seventh), Holding
will merge with and into Whitney, which shall be the surviving corporation
(sometimes referred to as the "Surviving Corporation") and the separate
existence of Holding shall cease. The name of the Surviving Corporation shall be
"Whitney Holding Corporation."
Fourth: The articles of incorporation of Whitney, as in effect on the
date this certificate is filed with the Secretary of State of Louisiana, shall
continue in full force and effect as the articles of incorporation of the
Surviving Corporation until altered, amended or repealed as provided therein or
by law.
Fifth: A copy of the executed Agreement is on file at the principal
place of business of the Surviving Corporation, located at 228 St. Charles
Avenue, New Orleans, Louisiana 70130.
Sixth: All provisions of the laws of the State of Louisiana [and
Florida] applicable to the Merger have been complied with, and a copy of the
Agreement will be furnished by the Surviving Corporation, on request and without
cost, to any stockholder of either Constituent Corporation.
Seventh: This Certificate of Merger shall be effective at _______
a.m./p.m., _______________, 1996 (the "Effective Time").
This Certificate of Merger is executed by the Surviving Corporation,
acting through its President, this ____ day of _________________________, 1996.
[Signature lines omitted]
<PAGE>
Exhibit 1.01(c) to
Agreement and Plan of Merger
AGREEMENT OF MERGER
OF
LIBERTY BANK
INTO
ACQUIRING BANK
THIS AGREEMENT OF MERGER (this "Agreement") is made and entered into as
of this ______ day of ______________________, 199___, between Liberty Bank, a
Florida state chartered bank, domiciled at Pensacola, Florida ("Target") and
Acquiring Bank, a national banking association, organized under the laws of the
United States ("Acquiring Bank" or the "Receiving Association").
WHEREAS, as required by law, at least a majority of the members of the
respective Boards of Directors of Acquiring Bank and Target (collectively called
the "Merging Associations") deem it advisable that Target be merged with and
into Acquiring Bank (the "Merger"), as provided in this Agreement and in the
Agreement and Plan of Merger dated __________________, 1996 (the "Plan"), among
the Merging Associations, Whitney Holding Corporation, a Louisiana corporation
("Whitney") of which Acquiring Bank is a wholly-owned subsidiary, and Liberty
Holding Company, a Florida corporation ("Holding"), which is the record and
beneficial owner of 99.____% of Target's outstanding capital stock, which sets
forth, among other things, certain representations, warranties, covenants and
conditions relating to the Merger; and
WHEREAS, as required by law, at least a majority of the members of the
respective Boards of Directors of the Merging Associations wish to enter into
this Agreement and submit it to the respective shareholders of the Merging
Associations for approval in the manner required by law and, subject to said
approval and to approval by the Office of the Comptroller of the Currency (the
"OCC") and the Department of Banking and Finance of the Office of the
Comptroller of Florida being duly given and to such other approvals as may be
required by law, to effect the Merger, all in accordance with the provisions of
this Agreement.
NOW THEREFORE, in consideration of the mutual benefits to be derived
from this Agreement and the Merger, the parties hereto agree as follows:
1. The Merger. At the Effective Time (as defined in Section 2 hereof),
Target shall be merged with and into Acquiring Bank under the Articles of
Association of Acquiring Bank, existing Charter No. ___________, pursuant to the
provisions of, and with the effect provided in, 12 U.S.C. ss.215a, et seq. and
Florida Banking Code, ss.658:41. At the Effective Time, Acquiring Bank, the
Receiving Association, shall continue to be a national banking association, and
its business shall continue to be conducted at its main office in Pensacola,
Florida, and at its legally established branches (including, without limitation,
the legally established offices from which Target conducted business immediately
prior to the Effective Time). The Articles of Association of Acquiring Bank
shall not be altered or amended by virtue of the Merger, and the incumbency of
the directors and officers of Acquiring Bank shall not be affected by the Merger
nor shall any person succeed to such positions by virtue of the Merger.
2. Effective Time. The Merger shall become effective at the time
specified or permitted by the OCC in the certificate or other written record
issued by the OCC (the "Effective Time").
3.1 Conversion of Capital Stock of Target. (a) Subject to the
provisions of this Section 3, at the Effective Time, by virtue of the Merger and
without any action on the part of the holders thereof, the shares of Target
<PAGE>
common stock, par value $5.00 per share ("Target Common Stock"), shall be
converted as follows: Except for shares as to which dissenters' rights have been
perfected and not withdrawn or otherwise forfeited under 12 U.S.C. ss.215a
"Dissenters' Shares") and subject to the provisions of Section 3.1(e) relating
to fractional shares, each outstanding share of Target Common Stock will be
converted into and become that number of shares of Whitney Common Stock that is
equal to the quotient obtained by dividing the Target Percentage (as hereinafter
defined) of the Maximum Deliverable Amount, rounded up to the nearest whole
number of shares, by the total number of shares of Target Common Stock issued
and outstanding on the effective date of the Merger.
(b) For purposes of this Section 3, shares of Target Common
Stock that are held by Holding or Target (other than shares held by Target in a
fiduciary capacity other than for Holding), shall not be considered outstanding
and shall be cancelled (and not converted) by virtue of the Merger.
(c) Certain Defined Terms. As used in this Section 3.1,
the following terms shall have the meanings set forth below:
(i) Purchase Price. The term "Purchase Price"
means $14,000,000, plus $5.25 for each share of Holding Common Stock duly and
validly issued between the date of the Plan and the Effective Time upon the
exercise of outstanding 1996 Warrants issued pursuant to that certain Private
Offering Memorandum of Holding dated January 14, 1994 (the "1996 Warrants") and
the payment in cash to Holding of the exercise price therefor (the "Added
Capital").
(ii) Maximum Deliverable Amount. The term
"Maximum Deliverable Amount" means the quotient obtained by dividing the
Purchase Price by the Average Market Price (as defined below).
(iii) Target Percentage. The term "Target
Percentage" means the percentage obtained by dividing (A) the dollar amount
obtained by multiplying (x) $14,000,000, plus the Added Capital, minus the
book value of all assets of Holding other than Target Common Stock, by (y)
the percentage of the outstanding shares of Target Common Stock owned by
persons other than Holding, by (B) the total Purchase Price.
(d) Average Market Price. The "Average Market Price" shall be
the average of the closing per share trading prices of Whitney Common Stock
(adjusted appropriately for any stock split, stock dividend, recapitalization,
reclassification or similar transaction which is effected, or for which a record
date occurs) on the twenty (20) trading days preceding the fifth trading day
immediately prior to the Effective Time, as reported in the Wall Street Journal
(corrected for typographical errors); provided, however, that if the Average
Market Price as calculated above is less than $27.00, the Average Market Price
for purposes of this Section 3.1(d) shall be $27.00, and if the Average Market
Price as calculated above is greater than $35.00, the Average Market Price for
purposes of this Section 3.1(d) shall be $35.00.
(e) Fractional Shares. In lieu of the issuance of fractional
shares of Whitney Common Stock, each shareholder of Target who would otherwise
be entitled thereto, upon surrender of his or her certificates that immediately
prior to the Effective Time represented Target Common Stock, other than
Dissenters' Shares, shall receive a cash payment (without interest) equal to the
fair market value at the Effective Time of any fraction of a share of Whitney
Common Stock to which such holder would be entitled but for this provision. For
purposes of calculating such payment, the fair market value of a fraction of a
share of Whitney Common Stock shall be such fraction multiplied by the Average
Market Price.
(f) Exchange of Certificates. After the Effective Time, each
holder of an outstanding certificate or certificates theretofore representing a
share or shares of Target Common Stock (other than Dissenters' Shares), upon
surrender thereof to the exchange agent selected by Whitney (the "Exchange
Agent"), together with duly executed transmittal materials provided pursuant to
Section 3.1(h) or upon compliance by the holder or holders thereof with the
procedures of the Exchange Agent with respect to lost, stolen or destroyed
certificates, shall be entitled to receive in exchange therefor any payment due
in lieu of fractional shares and a certificate or certificates representing the
number of whole shares of Whitney Common Stock into which such holder's shares
of Target Common Stock were converted. Until so surrendered, each outstanding
Target stock certificate shall be deemed for all purposes, other than as
provided
<PAGE>
below with respect to the payment of dividends or other distributions (if any)
in respect of Whitney Common Stock, to represent the number of whole shares of
Whitney Common Stock into which such holder's Target Common Stock shall have
been converted. Whitney may, at its option, refuse to pay any dividend or other
distribution to holders of unsurrendered Target stock certificates until
surrendered; provided, however, that upon the surrender and exchange of any
Target stock certificates there shall be paid, to the extent not previously
paid, to the record holders of the Whitney stock certificates issued in exchange
therefor the amount, without interest, of accumulated dividends and
distributions, if any, which have become payable with respect to the number of
whole shares of Whitney Common Stock into which the shares theretofore
represented by such certificates shall have been exchanged.
(g) Deposit. Promptly following the Effective Time, Whitney
shall deposit or cause to be deposited with the Exchange Agent (i) certificates
representing the shares of Whitney Common Stock and (ii) the cash in lieu of
fractional shares to be issued and paid, as the case may be, in exchange for
outstanding shares of Target Common Stock pursuant to this Section 3.
(h) Transmittal Materials. Promptly after the Effective Time,
Whitney shall send or cause to be sent to each former shareholder of record of
Target at the Effective Time, excluding the holders, if any, of Dissenters'
Shares as to which dissenters' rights have been perfected and not withdrawn or
otherwise forfeited under 12 U.S.C. ss.215a, transmittal materials for use in
exchanging certificates of Target Common Stock for certificates of Whitney
Common Stock.
(i) Dissenters' Shares. Holders of Dissenters' Shares shall
not be entitled to receive the shares of Whitney Common Stock and any unpaid
dividends and distributions payable thereon pursuant to this Section 3 and shall
only be entitled to receive payment of the fair cash value of such shares in
accordance with the provisions of 12 U.S.C. ss.215a, unless and until such
holders fail to perfect or effectively withdraw or lose their rights to such
appraisal and payment. If, after the Effective Time, any such holder fails to
perfect or effectively withdraws or loses such right, such shares of Target
Common Stock will be treated as if they had been converted into, at the
Effective Time, the shares of Whitney Common Stock (and cash in lieu of
fractional share), and any unpaid dividends and distributions payable thereon,
pursuant to this Section 3, without interest thereon.
3.2. Closing Transfer Books. At the Effective Time, the stock
transfer books of Target shall be closed and no transfer of shares of Target
Common Stock shall be made thereafter.
4. Capital Stock of the Receiving Association. The shares of the
capital stock of Acquiring Bank, the Receiving Association, issued and
outstanding immediately prior to the Effective Time shall, at the Effective
Time, continue to be issued and outstanding, and no additional shares of
Acquiring Bank shall be issued as a result of the Merger. Therefore, at the
Effective Time, the amount of capital stock of Acquiring Bank, the Receiving
Association, shall be $________________, divided into _______________ shares of
common stock, par value $________ per share.
5. Assets and Liabilities of the Merging Associations. At the Effective
Time, the corporate existence of each of the Merging Associations shall be
merged into and continued in Acquiring Bank, the Receiving Association, and such
Receiving Association shall be deemed to be the same corporation as each bank or
banking association participating in the Merger. All rights, franchises, and
interests of the individual Merging Associations in and to every type of
property (real, personal and mixed) and choses in action shall be transferred to
and vested in the Receiving Association by virtue of the Merger without any deed
or other transfer. The Receiving Association, upon the Merger and without any
order or other action on the part of any court or otherwise, shall hold and
enjoy all rights of property, franchises, and interests, including appointments,
designations, and nominations, and all other rights and interests as trustee,
executor, administrator, registrar of stocks and bonds, guardian of estates, and
in every other fiduciary capacity, in the same manner and to the same extent as
such rights, franchises, and interests were held or enjoyed by any one of the
Merging Associations at the time of the Merger, subject to the conditions
specified in 12 U.S.C. ss.215a(f). The Receiving Association shall, from and
after the Effective Time, be liable for all liabilities of the Merging
Associations.
6. Shareholder Approval; Conditions; Filing. This Agreement
shall be submitted to the shareholders of the Merging Associations for
ratification and confirmation in accordance with applicable provisions of law.
The obligations of the Merging Associations to effect the Merger shall be
subject to all the terms and conditions of the Plan.
<PAGE>
If the shareholders of the Merging Associations ratify and confirm this
Agreement, then the fact of such approval shall be certified hereon by the
Secretary of each of the Merging Associations and this Agreement, so approved
and certified, shall, as soon as is practicable, be signed and acknowledged by
the President or Chairman of the Board of each of them. As soon as may be
practicable thereafter, this Agreement, so certified, signed and acknowledged,
shall be delivered to the OCC for filing in the manner required by law.
7. Miscellaneous. This Agreement may, at any time prior to the
Effective Time, be amended or terminated as provided in the Plan. This Agreement
may be executed in counterparts, each of which shall be deemed to constitute an
original. This Agreement shall be governed and interpreted in accordance with
federal law and the applicable laws of the State of Louisiana applicable to
contracts made and to be performed wholly with such state, except to the extent
that the laws of the State of Florida require this Agreement to be governed by
the laws of that state. This Agreement may be assigned only to the extent that
the party seeking to assign it is permitted to assign its interests in the Plan,
and subject to the same effect as any such assignment. The headings in this
Agreement are inserted for convenience only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement. Capitalized terms
used herein and not otherwise defined have the meanings given to them in the
Plan.
IN WITNESS WHEREOF, this Agreement has been executed by a majority of
the directors of each of the Merging Associations, as of the day and year first
above written.
[Signature lines omitted]
<PAGE>
Exhibit 6.02(g) to
Agreement and Plan of Merger
[Letter from affiliates of Holding and Bank]
[date]
Mr. William L. Marks
Chairman and CEO
Whitney Holding Corporation
228 St. Charles Avenue
New Orleans, La. 70130
Dear Mr. Marks:
In consideration of the benefits I will receive as a shareholder of
Liberty Holding Company ("Holding") or Liberty Bank ("Bank") from the Agreement
and Plan of Merger (the "Agreement") among Holding, Bank and Whitney Holding
Corporation ("Whitney"), I agree to vote all shares of Holding and Bank that I
own beneficially or of record in favor of approving the Agreement and the Bank
Merger Agreement (as defined therein), unless Whitney is then in breach or
default in any material respect as regards any covenant, agreement,
representation or warranty as to it contained in the Agreement.
I further agree that I will not, without the prior consent of Whitney,
transfer my shares of Holding or Bank stock prior to the Effective Date, as that
term is set forth in the Agreement.
I also acknowledge that Whitney intends to account for the acquisition
of Holding and Bank as a pooling of interests. I understand that my transfer of
any shares of Holding or Bank common stock, any warrants to acquire Holding
stock, and any Whitney common stock that I receive in exchange for Holding or
Bank stock, or warrants prior to Whitney's publication of financial results
covering at least 30 days of its operations following the Effective Date, may
impair this accounting treatment. Therefore, I agree that I will not sell or
otherwise transfer any shares of Bank stock or any warrants to acquire Holding
stock (or the Whitney stock which I receive in exchange for my Holding or Bank
stock) or over which I hold the power to sell, transfer, pledge or otherwise
alienate or encumber until:
a. the mergers have become effective and Whitney has
published financial results covering at least 30 days
of its combined operations following the Effective
Date of the mergers, or
b. the Agreement terminates.
I authorize Whitney to hold the certificates representing my shares of
Whitney common stock until the date that I am free to trade the stock in
accordance with the foregoing paragraph.
I certify that all of the shares of Holding and Bank stock of which I
hold the power to sell, transfer, pledge or otherwise alienate or encumber are
represented by the following certificates:
Certificate No. No. of shares
I have no present plan or intention to dispose of Whitney common stock
to be received in the merger.
I also understand the resale or other disposition of Whitney common
stock that I own may be governed by Rule 145 of the SEC under the Securities Act
of 1933, as amended, which Rule has been explained to me. I agree not to sell
<PAGE>
any of the Whitney common stock to be held by me in violation of the Securities
Act of 1933, as amended, or the rules and regulations thereunder.
This letter shall constitute an irrevocable agreement of the
undersigned, and may be revoked only upon the mutual agreement of the parties.
Sincerely,
[Affiliate]
<PAGE>
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This First Amendment to Agreement and Plan of Merger (the "Amendment")
is made as of July 10, 1996 between Whitney Holding Corporation, a Louisiana
corporation ("Whitney"), on the one hand, and Liberty Holding Company, a Florida
corporation ("Holding"), and Liberty Bank, a Florida chartered state bank
("Bank"), on the other hand. Capitalized terms used in this Amendment and not
otherwise defined shall have the meanings given to them in the Plan of Merger
(as defined below).
RECITALS
WHEREAS, Whitney, Holding and Bank are parties to that certain
Agreement and Plan of Merger dated April 23, 1996 (the "Plan of Merger");
WHEREAS, Whitney, Holding and Bank desire to amend the Plan of Merger
to adjust the Purchase Price as a result of Whitney's due diligence review of
Holding and Bank; and
WHEREAS, Whitney, Holding and Bank further desire to amend Section
1.01(a) of the Plan of Merger to reflect that upon its formation, Whitney will
cause Acquiring Bank to execute the Plan of Merger as a party, as the same may
be amended from time to time.
AGREEMENT
NOW, THEREFORE, Whitney, Holding and Bank hereby agree as follows:
1. The second sentence of Section 1.01(a) of the Plan of Merger, which
section is entitled "Mergers," is hereby amended and restated in its entirety to
provide and read as follows:
"Upon its formation, Whitney will cause Acquiring Bank to
execute this Agreement as a party, as the same may be amended from time
to time."
2. Section 2.01(d)(i) of the Plan of Merger, which subsection is
entitled "Purchase Price," is hereby amended by deleting from the first line
thereof the dollar amount "$14,000,000" and by inserting in lieu thereof the
dollar amount "$13,902,108," and a corresponding change shall be made to the
Bank Merger Agreement in the form in which it will be executed by the Boards of
Directors of Acquiring Bank and Bank.
3. Except to the extent specifically amended herein, the Plan of Merger
shall remain in full force and effect in accordance with its terms, provisions,
covenants and agreements.
4. This Amendment may be executed by the parties in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same document.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
[Signatures Omitted]
<PAGE>
