<PAGE>
[WHITNEY HOLDING CORPORATION LETTERHEAD]
March 17, 1997
Securities and Exchange Commission
450 Fifth St., N.W.
Judiciary Plaza
Washington, D.C. 20549-1004
Via Edgar Electronic Filing System
In Re: File Number 0-1026
------------------
Gentlemen:
Pursuant to regulations of the Securities and Exchange
Commission, submitted herewith for filing on behalf of Whitney Holding
Corporation (the "Company"), is the Company's Definitive Proxy Statement dated
April 23, 1997.
This filing is being effected by direct transmission to the
Commission's EDGAR System.
Sincerely,
/s/ Edward B. Grimball
-----------------------------
Edward B. Grimball
Executive Vice President &
Chief Financial Officer
(504) 586-7570
EBG/drm
<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant X
---
Filed by a Party other than the Registrant
---
Check the appropriate box:
Preliminary Proxy Statement
- ---
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
- ---
X Definitive Proxy Statement
- ---
Definitive Additional Materials
- ---
Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
- ---
WHITNEY HOLDING CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
$125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
- ---
$500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
- ---
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
- ---
1) Title of each class of securities to which transaction applies:
Common Stock
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2) Aggregate number of securities to which transaction applies:
????????????
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
Not Applicable
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4) Proposed maximum aggregate value of transaction:
Not Applicable
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5) Total fee paid:
Not Applicable
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*Set forth the amount on which the filing fee is calculated and state how it was
determined.
Check box if any part of the fee is offset as provided by Exchange Act
- --- Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: Not Applicable
------------------------------------------------
2) Form Schedule or Registration Statement No.: Not Applicable
---------------------------
3) Filing Party: Not Applicable
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4) Date Filed: Not Applicable
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<PAGE>
[WHITNEY HOLDING CORPORATION LOGO]
March 18, 1997
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
The Annual Meeting of Shareholders of Whitney Holding Corporation (the
"Company") will be held on the eleventh floor, Pan-American Life Center, 601
Poydras Street, New Orleans, Louisiana, on Wednesday, April 23, 1997, at 10:30
a.m., for the purposes of considering and voting upon:
1. Election of directors.
2. Ratification of the selection of Arthur Andersen LLP as
independent public accountants to audit the books of the Company and
its subsidiaries for 1997.
3. Proposal to adopt the new 1997 Whitney Holding Corporation
Long-Term Incentive Plan.
4. Such other business as may properly come before the meeting
or any adjournments or postponements thereof.
The close of business on February 27, 1997, has been fixed as the
record date for determining shareholders entitled to notice of and to vote at
the meeting.
By order of the Board of Directors.
/s/ JOSEPH S. SCHWERTZ, JR.
JOSEPH S. SCHWERTZ, JR.
Secretary
- --------------------------------------------------------------------------------
228 St. Charles Avenue, New Orleans, Louisiana 70130
YOUR VOTE IS IMPORTANT
Whether or not you expect to attend the meeting, please mark, date,
sign and promptly return the enclosed proxy in the accompanying envelope, which
requires no postage if mailed in the United States. You may, of course, later
revoke your proxy and vote in person.
<PAGE>
[WHITNEY HOLDING CORPORATION LETTERHEAD]
228 ST. CHARLES AVENUE
NEW ORLEANS, LOUISIANA 70130
---------------
PROXY STATEMENT
---------------
The enclosed proxy is solicited by the Board of Directors of Whitney
Holding Corporation (the "Company") for use at the Annual Meeting of
Shareholders to be held on April 23, 1997 and at any adjournments or
postponements thereof. If properly and timely completed and returned, the proxy
will be voted in the manner you specify thereon. If no manner is specified, the
proxy will be voted FOR election of the nominees for directors hereinafter
named, FOR ratification of the selection of Arthur Andersen LLP as the Company's
independent public accountants, and FOR adoption of the 1997 Long-Term Incentive
Plan.
The proxy may be revoked by giving written notice of revocation to the
Company's secretary or by filing a properly executed proxy of later date with
the secretary at or before the Annual Meeting.
The cost of soliciting proxies will be borne by the Company. Directors,
officers and regular employees of the Company and its banking subsidiaries,
Whitney National Bank (the "Louisiana Bank"), Whitney Bank of Alabama (the
"Alabama Bank"), Whitney National Bank of Florida (the "Florida Bank") and First
National Bank of Houma (the "Houma Bank"), may solicit proxies by mail,
telephone, telecopier and personal interview, but will not receive additional
compensation therefor.
This Proxy Statement and related materials will first be mailed to
shareholders on or about March 18, 1997.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only shareholders of record as of the close of business on February 27,
1997 are entitled to notice of and to vote at the meeting. On that date,
17,977,998 shares of common stock (being the Company's only class of authorized
stock) were outstanding. Each share is entitled to one vote.
The following table provides information concerning the only
shareholder known by the Company to be the beneficial owner (as determined in
accordance with Rule 13d-3 of the Securities and Exchange Commission) of more
than 5% of its outstanding stock as of February 27, 1997.
<TABLE>
<CAPTION>
Name and Address Shares Beneficially Percent of
of Beneficial Owner Owned (1) Class
------------------- ------------------- ----------
<S> <C> <C>
Estate of William G. Helis................................ 1,060,836 5.90%
a Louisiana partnership
912 Whitney Building
New Orleans, Louisiana 70130
- --------------
<FN>
(1) Includes direct and indirect ownership. Based on Amendment No. 1 to
Schedule 13D, dated December 31, 1990 as filed with the Securities and
Exchange Commission. David A. Kerstein, an attorney, has shared voting and
investment power with respect to the shares shown by virtue of his status
as co-executor, co-administrator and co-trustee for, and under revocable
delegations of authority given by, several successions, trusts and natural
persons who in the aggregate have a 100% partnership interest, and under a
revocable delegation of authority given by the partnership itself. Mr.
Kerstein also has shared voting and investment power with respect to 99,484
shares owned by the Succession of William G. Helis, Jr., of which he serves
as co-executor. Mr. Kerstein disclaims beneficial ownership of all such
shares, which aggregates 6.45% of the Company's outstanding stock.
</FN>
</TABLE>
1
<PAGE>
ELECTION OF DIRECTORS
The Company's charter provides for a classified Board of Directors,
composed of not less than five nor more than twenty-five persons, divided into
five classes serving staggered five-year terms, with the exact number of
directors to be fixed by the Board. By Board resolution, and subject to the
matters described in the following paragraph, the number of directors has been
set at 19, of whom seven are to be elected this year. The Board has nominated
James M. Cain, Robert H. Crosby, Jr., Richard B. Crowell, Camille A. Cutrone,
Alfred S. Lippman, John K. Roberts, Jr. and Carroll W. Suggs for election as
directors. Messrs. Cutrone and Lippman and Ms. Suggs were elected by the Board
in 1996 to fill vacancies on an expanded Board and, pursuant to the Company's
charter, must stand for election by the shareholders at the 1997 Annual Meeting.
Mr. Cutrone is nominated to fill a vacancy in the class of directors whose terms
expire at the 2000 Annual Meeting and Mr. Lippman and Ms. Suggs are nominated to
fill vacancies in the class of directors whose terms expire at the 2001 Annual
Meeting. Messrs. Cain, Crosby, Crowell and Roberts, who were elected at prior
shareholders' meetings, are nominated to serve until the 2002 Annual Meeting.
The Company, Merchants Bancshares, Inc. and Merchants Bank & Trust
Company are parties to an Agreement and Plan of Merger dated November 14, 1996,
as amended (the "Merchants Agreement"), pursuant to which Merchants Bancshares
would be merged into the Company (the "Merchants Merger") and Merchants Bank &
Trust would be merged into a newly-formed, wholly-owned bank subsidiary of the
Company. Pursuant to the terms of the Merchants Agreement, the Company has
agreed to appoint Guy C. Billups, Jr. (Chairman of the Board of Merchants
Bancshares and Merchants Bank & Trust) to the Company's Board of Directors and
has agreed to nominate Mr. Billups for re-election to the Board for a term
ending no earlier than the 2002 Annual Meeting. The Merchants Merger is
currently scheduled to be completed on April 18, 1997, but remains subject to
Merchants shareholder and regulatory approvals and other customary conditions.
Thus, conditioned upon the Merchants Merger occurring prior to the Annual
Meeting, the Board has adopted a resolution increasing the size of the current
Board to 20 and appointing Mr. Billups to fill the vacancy created thereby.
Subject to the same condition, the Board has also fixed at 20 (rather than 19)
the number of directors to serve following the Annual Meeting and has nominated
Mr. Billups for election to a term expiring in 2002 (in addition to the
nominations described above). If the Merchants Merger does not occur prior to
the Annual Meeting, the nomination of Mr. Billups will be withdrawn and the
number of directors will remain at 19, seven of whom will be elected at the
Annual Meeting. The Board will then take such action as may be necessary or
appropriate thereafter to increase the size of the Board to 20 and to appoint
Mr. Billups as a director effective as of and conditioned upon the subsequent
consummation of the Merchants Merger. In such event, Mr. Billups would be
nominated for election by the Company's shareholders at the 1998 Annual Meeting.
Directors will be elected by plurality of the votes actually cast.
Abstentions and broker nonvotes will be disregarded. Should any of the Board's
nominees become unavailable for election, which is not anticipated, proxy
holders may in their discretion vote for other nominees recommended by the
Board.
The following table includes information furnished by the respective
nominees and directors with regard to their principal occupations for the last
five years, directorships of other public companies and beneficial ownership of
the Company's outstanding stock as of December 31, 1996, as well as the
beneficial ownership of each of the named executive officers in the Summary
Compensation Table (as determined in accordance with Rule 13d-3 of the
Securities and Exchange Commission).
2
<PAGE>
<TABLE>
<CAPTION>
Shares Percent
Director Term Beneficially of
Name and Age Principal Occupation Since Expires Owned (1) Class
- ------------ -------------------- -------- ------- ------------ -----
Nominee for Term Expiring 2000
<S> <C> <C> <C> <C>
Camille A. Cutrone, 67 General Partner, Cutrone 1996 1997 78,623(2)(4) *
Verlander & Meyer, Attorney
at Law
Nominees for Term Expiring 2001
Alfred S. Lippman, 58 Partner, Lippman, Mahfouz 1996 1997 71,416(3)(4) *
& Martin, Attorneys at Law
Carroll W. Suggs, 58 Chairman, Chief Executive 1996 1997 1,300(4) *
Officer and President,
Petroleum Helicopters, Inc.
Nominees for Term Expiring 2002
Guy C. Billups, Jr., 69 Chairman of the Board, - (5) - (5) - (6) - (6)
Merchants Bancshares, Inc.
and Merchants Bank & Trust
Company; partner, Billups
Farms and Billups Plantation
(farming)
James M. Cain, 63 Former Vice Chairman, Entergy 1987 1997 5,489(4)(7) *
Corp. (utility holding company);
former Chairman of the
Board, Chief Executive Officer
and former President, Louisiana
Power and Light Company
(electric utility); former
Director, Chief Executive Officer
And President, New Orleans
Public Service, Inc.; Director,
Delchamps, Inc.
Robert H. Crosby, Jr., 76 Chairman of the Board and 1972 1997 13,843(4)(8) *
Chief Executive Officer,
Crosby Land & Resources
(timberland holdings, oil
and gas production)
Richard B. Crowell, 58 Attorney, Crowell & Owens 1983 1997 169,486(4)(9) *
3
<PAGE>
Shares Percent
Director Term Beneficially of
Name and Age Principal Occupation Since Expires Owned (1) Class
- ------------ -------------------- -------- ------- ------------ -----
John K. Roberts, Jr., 60 President and Chief Executive 1985 1997 109,100(4)(10) *
Officer, Pan-American Life
Insurance Company (markets and
services life, health and
retirement insurance); Director,
Pan-American Financial Services, Inc.
Directors with Continuing Terms
Harry J. Blumenthal, Jr., 51 President, Blumenthal 1993 1999 15,525(4)(11) *
Print Works, Inc.
(textiles manufacturing)
Joel B. Bullard, Jr., 46 President, Joe Bullard 1994 1999 12,765(4)(12) *
Automotive Companies
Angus R. Cooper, II, 54 Chairman and Chief Executive 1994 1999 111,750(4)(13) *
Officer, Cooper/T. Smith Corp.
(shipping service company)
William A. Hines, 60 Chairman of the Board, 1986 2001 152,600(4)(14) *
Midland Pipe Corporation
(sale of oil field
country tubular goods)
Robert E. Howson, 65 Former Chairman of the Board 1989 2000 3,950(4)(15) *
and Chief Executive Officer of
McDermott International, Inc.
and of McDermott Incorporated
(marine construction services
and power generation systems)
John J. Kelly, 62 President, Textron Marine 1986 2000 5,939(4)(16) *
and Land Systems (designs
and builds advanced
technology vehicles
and ships)
E. James Kock, Jr., 68 Former President: Bowie 1965 1998 132,784(4)(17) *
Lumber Associates, Downmans
Associates, Jeanerette Lumber &
Shingle Co., Ltd. and White
Castle Lumber & Shingle Co., Ltd.
(land and timber holdings, and
investments) from 1965 to 1993
William L. Marks, 53 Chairman of the Board and 1990 2000 209,998(18) 1.17%
Chief Executive Officer of
the Company and the Louisiana
Bank
4
<PAGE>
Shares Percent
Director Term Beneficially of
Name and Age Principal Occupation Since Expires Owned (1) Class
- ------------ -------------------- -------- ------- ------------ -----
R. King Milling, 56 President of the Company and 1979 1998 86,424(19) *
the Louisiana Bank
John G. Phillips, 74 Former Chairman of the Board 1972 1998 6,975(4)(20) *
and Chief Executive Officer, The
Louisiana Land and Exploration
Company (oil and gas exploration
and production)
W. P. Snyder III, 78 Director, H.J. Heinz Co. and 1965 2001 317,237(4)(21) 1.76%
President and Director, The
Wilpen Group, Inc. (investments)
Warren K. Watters, 69 President, Reilly-Benton 1986 2000 7,950(4)(22) *
Company, Inc. (fabrication
and wholesale distribution of
marine and commercial
construction materials)
Executive Officers
Edward B. Grimball, 52 Executive Vice President and - - 54,672(23) *
Chief Financial Officer of the
Company and the Louisiana Bank
Kenneth A. Lawder, Jr., 56 Executive Vice President - - 54,520(24) *
of the Company and the
Louisiana Bank
John C. Hope, III, 48 Executive Vice President - - 55,575(25) *
of the Company; Chairman
and Chief Executive
Officer of the Alabama Bank
All 26 directors and executive
officers of the Company as a group 2,282,453(26) 12.70%
- ----------------------------
* Less than 1%
<FN>
(1) Ownership shown includes direct and indirect ownership and, unless
otherwise noted, also includes sole investment and voting power with
respect to reported holdings.
(2) Mr. Cutrone's total shares include 28,495 shares in family trusts for
Mr. Cutrone's daughters and grandchildren for which he has voting
rights, but beneficial ownership is disclaimed.
(3) Mr. Lippman's shares include 37,613 shares held for the benefit of Mr.
Lippman in the Lippman, Mahfouz & Martin 401(k) Savings & Retirement
Plan.
5
<PAGE>
(4) With the exceptions noted below, these totals include the following
optioned shares that have been granted pursuant to the Directors'
Compensation Plan: (a) options on 1,000 shares granted in 1994 and
exercisable at any time through June 30, 2004 at a price of $26.25 per
share; (b) options on 1,000 shares granted in 1995 and exercisable at
any time through June 30, 2005 at a price of $26.75 per share; and (c)
options on 1,000 shares granted in 1996 and exercisable at any time
through June 30, 2006 at a price of $30.50 per share. The total shares
for Messrs. Bullard and Cooper, who joined the Company's Board after
the 1994 option grant, include only those optioned shares described in
items (b) and (c) above. The total shares for Mr. Crowell include only
those optioned shares described in item (c) above. The total shares for
Messrs. Cutrone and Lippman and Ms. Suggs, who joined the Company's
Board after the 1995 option grant, include only those optioned shares
described in item (c) above.
(5) The appointment of Mr. Billups as a director of the Company, and his
nomination for election as a director at the Annual Meeting, is
conditioned upon the Merchants Merger, which is currently scheduled for
April 18, 1997, occurring prior to the Annual Meeting.
(6) Mr. Billups does not currently beneficially own any shares of Company
common stock; however, upon consummation of the Merchants Merger, he
will beneficially own approximately 596,100 shares (or approximately
3.10%) of the Company's common stock, including 3,197 shares that will
be held by his spouse (as to which Mr. Billups disclaims beneficial
ownership). Inasmuch as the number of shares to be issued in the
Merchants Merger is based upon a pricing formula described in the
Merchants Agreement, the precise number of shares of Company common
stock that will be held by Mr. Billups cannot currently be determined.
(7) Mr. Cain is a member of the Company's and the Louisiana Bank's
Executive and Nominating Committees. He is also a member of the
Louisiana Bank's Audit Committee.
(8) Mr. Crosby is a member of the Company's and the Louisiana Bank's
Executive and Compensation Committees. He is also a member of the
Louisiana Bank's Trust Committee. His total shares include 450 shares
owned by a member of his family and 6,750 shares owned by a partnership
of which Mr. Crosby is an officer and a director and in which he has a
beneficial interest. Also includes 23 shares owned by an investment
club of which a member of Mr. Crosby's family is a member.
(9) Mr. Crowell is a member of the Louisiana Bank's Audit Committee. His
total shares include 63,100 shares owned by members of Mr. Crowell's
family and family trusts, for which beneficial ownership is disclaimed.
(10) Mr. Roberts is a member of the Company's and the Louisiana Bank's
Executive Committees. He is also a member of the Louisiana Bank's Audit
Committee. His total shares include shared investment and voting power
with respect to 95,550 shares owned by a company having an investment
committee of which Mr. Roberts is a member.
(11) Mr. Blumenthal is a member of the Company's and the Louisiana Bank's
Executive Committees. His total shares include shared voting and
investment power with respect to 7,425 shares owned by a member of Mr.
Blumenthal's family, for which beneficial ownership is disclaimed.
(12) Mr. Bullard is a member of the Alabama Bank's Board of Directors and
serves on its Audit Committee. His total shares include 2,250 shares in
a profit sharing trust, and 4,500 shares in family trusts, for which
beneficial ownership is disclaimed.
(13) Mr. Cooper serves on the Company's Executive Committee. Mr. Cooper is
also a member of the Alabama Bank's Board of Directors and serves on
its Audit Committee. His total shares include 4,650 shares owned by the
estate of his spouse, for which beneficial ownership is disclaimed.
Also includes 4,000 shares owned by Mr. Cooper's four minor children in
an account over which he is custodian and for which beneficial
ownership is disclaimed.
(14) Mr. Hines is a member of the Company's and the Louisiana Bank's
Executive Committees. His total shares include 5,000 shares owned by a
relative of Mr. Hines for which beneficial ownership is disclaimed.
6
<PAGE>
(15) Mr. Howson is a member of the Company's and the Louisiana Bank's
Compensation and Executive Committees.
(16) Mr. Kelly is a member of the Company's and the Louisiana Bank's
Executive Committees and the Louisiana Bank's Audit Committee.
(17) Mr. Kock is a member of the Company's and the Louisiana Bank's
Executive and Nominating Committees. He is also a member of the
Louisiana Bank's Trust Committee. His total shares include 8,440 shares
over which Mr. Kock holds a usufruct, 83,700 shares owned by two
companies of which Mr. Kock is a director and shareholder and in which
he has a beneficial interest, 4,308 shares owned by several trusts for
the benefit of his children, for which he serves as trustee and for
which beneficial ownership is disclaimed and 3,578 shares owned by
members of Mr. Kock's family, for which he disclaims beneficial
ownership.
(18) Mr. Marks is a member of the Alabama Bank's Board of Directors and
serves on its Executive and Nominating Committees. He is an ex-officio
member of the Louisiana Bank's Executive and Nominating Committees and
is a member of the Company's Executive Committee and the Louisiana
Bank's Trust Committee. His shares include the following restricted and
optioned shares granted pursuant to the Company's Long-Term Incentive
Program: 51,500 shares of restricted stock; options on 9,851 shares of
stock, which may be exercised at any time through June 22, 2003 at a
price of $19.42 per share; options on 15,000 shares of stock, which may
be exercised at any time through July 26, 2004 at a price of $28.00 per
share; options on 18,000 shares of stock, which may be exercised at any
time through July 25, 2005 at a price of $28.875 per share; and options
on 18,000 shares of stock, which may be exercised at any time through
July 23, 2006 at a price of $30.00 per share. Also includes 1,791
shares of stock held for the benefit of Mr. Marks in the Company's
401(k) plan, and options on 33,750 shares of stock, which may be
exercised at any time through February 28, 2000 at a price of $18.11
per share.
(19) Mr. Milling is a member of the Alabama Bank's Board of Directors and
serves on its Executive Committee. He is an ex-officio member of the
Louisiana Bank's Executive and Trust Committees and is a member of the
Company's Executive Committee. His shares include the following
restricted and optioned shares granted pursuant to the Company's
Long-Term Incentive Program: 20,250 shares of restricted stock; options
on 6,000 shares of stock, which may be exercised at any time through
June 22, 2003 at a price of $19.42 per share; options on 6,000 shares
of stock, which may be exercised at any time through July 26, 2004 at a
price of $28.00 per share; options on 6,000 shares of stock, which may
be exercised at any time through July 25, 2005 at a price of $28.875
per share; and options on 6,000 shares of stock, which may be exercised
at any time through July 23, 2006 at a price of $30.00 per share. His
total shares include shared voting and investment power with respect to
2,767 shares owned by members of Mr. Milling's family and includes
2,828 shares of stock held for the benefit of Mr. Milling in the
Company's 401(k) plan.
(20) Mr. Phillips is a member of the Company's and the Louisiana Bank's
Compensation Committee.
(21) Includes shared investment and voting power with respect to 24,705
shares owned by a charitable trust of which Mr. Snyder is one of three
co-trustees.
(22) Mr. Watters is a member of the Company's and the Louisiana Bank's
Executive and Nominating Committees and is a member of the Louisiana
Bank's Trust Committee.
7
<PAGE>
(23) Includes the following restricted and optioned shares granted pursuant
to the Company's Long-Term Incentive Program: 13,500 shares of
restricted stock; options on 13,400 shares of stock, which may be
exercised at any time through May 27, 2002 at a price of $13.22 per
share; options on 9,000 shares of stock, which may be exercised at any
time through June 22, 2003 at a price of $19.42 per share; options on
6,000 shares of stock, which may be exercised at any time through July
26, 2004 at a price of $28.00 per share; options on 6,000 shares of
stock, which may be exercised at any time through July 25, 2005 at a
price of $28.875 per share; and options on 6,000 shares of stock, which
may be exercised at any time through July 23, 2006 at a price of $30.00
per share.
(24) Includes the following restricted and optioned shares granted pursuant
to the Company's Long-Term Incentive Program: 14,000 shares of
restricted stock; options on 11,850 shares of stock, which may be
exercised at any time through May 27, 2002 at a price of $13.22 per
share; options on 9,000 shares of stock, which may be exercised at any
time through June 22, 2003 at a price of $19.42 per share; options on
6,000 shares of stock, which may be exercised at any time through July
26, 2004 at a price of $28.00 per share; options on 6,000 shares of
stock, which may be exercised at any time through July 25, 2005 at a
price of $28.75 per share; and options on 6,000 shares of stock, which
may be exercised at any time through July 23, 2006 at a price of $30.00
per share. This total also includes 699 shares of stock held for the
benefit of Mr. Lawder in the Company's 401(k) plan.
(25) Includes the following restricted and optioned shares granted pursuant
to the Company's Long-Term Incentive program: 14,600 shares of
restricted stock; options on 6,000 shares of stock, which may be
exercised at any time through July 25, 2005 at a price of $28.875 per
share; and options on 6,000 shares of stock, which may be exercised at
any time through July 23, 2006 at a price of $30.00 per share. This
figure includes 1,950 shares of stock owned by Mr. Hope's minor
children for which beneficial ownership is disclaimed and includes
6,625 shares of stock held for the benefit of Mr. Hope in the Company's
401(k) plan.
(26) The Louisiana Bank serves as trustee of the Louisiana Bank's Savings
Plus Trust, which held 275,083 shares (1.53%) as of December 31, 1996.
An executive officer of the Company serves with other Louisiana Bank
employees on a committee which makes voting decisions with respect to
these shares. The Louisiana Bank also serves as trustee of the
Louisiana Bank's Retirement Trust, which held 239,555 shares (1.33%) as
of December 31, 1996. An executive officer of the Company serves with
other Bank employees on a committee which makes voting and investment
decisions with respect to these shares. Such shares have been included
only once in calculating the beneficial ownership of all officers and
directors as a group. This figure does not include approximately
596,100 shares of Company common stock that will be owned by Mr.
Billups after consummation of the Merchants Merger (see notes (5) and
(6) above).
</FN>
</TABLE>
8
<PAGE>
PROPOSAL TO AMEND AND RESTATE
THE LONG-TERM INCENTIVE PROGRAM
Proposal
The Long-Term Incentive Program was adopted by the Board of Directors
of the Company (the "Board") on December 18, 1991, and approved by the Company's
shareholders at the 1992 annual meeting (the "1992 Program"). The Board recently
approved the amendment and restatement of the 1992 Program, in its entirety, in
the form of the 1997 Long- Term Incentive Plan (the "1997 Plan"), subject to
shareholder approval.
The amendment and restatement of the 1992 Program is intended to (1)
ensure that certain compensation received by specified executive officers under
the 1997 Plan will be characterized as performance-based compensation and
deductible by the Company under Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), (2) add stock appreciation rights as a type of
award that may be granted under the 1997 Plan, (3) comply with certain
provisions of Rule 16b-3 promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and (4) increase the number of shares of the
Company's no par voting common stock (the "common stock") that may be granted or
awarded under the 1997 Plan. Upon approval of the 1997 Plan by the shareholders
of the Company, the 1992 Program will be terminated, except that outstanding
grants and awards will remain exercisable in accordance with their terms. No
grants or awards have been made under the 1997 Plan and the amounts and
recipients of such grants or awards are not currently determinable.
The following summary of the 1997 Plan is qualified in its entirety by
reference to the full text of the plan, which is attached as Exhibit A hereto.
Shareholder approval of the 1997 Plan is required not only to qualify certain
grants and awards thereunder as deductible performance-based compensation within
the meaning of Code Section 162(m), but also to satisfy the requirements of the
NASDAQ National Market System and the limitations on plan amendments set forth
in the 1992 Program.
The purpose of the 1997 Plan is to advance the long-term interests of
the Company by motivating officers and key employees with the opportunity to
obtain an equity interest in the Company and to attract and retain officers and
key employees upon whose judgment the success of the Company largely depends.
The 1997 Plan is further intended to provide flexibility to the Company in
connection with its compensation practices.
Administration
The 1997 Plan is administered by a committee of not less than two
members of the Compensation Committee of the Company (the "Committee")
designated by the Board. The members of the Committee must be "nonemployee
directors" within the meaning of Rule 16b-3 promulgated under the Exchange Act
and "outside directors" as defined in Code Section 162(m). The Committee is
presently constituted as the Compensation Committee of the Board.
The Committee possesses the plenary authority to administer the 1997
Plan, including the authority to designate employees to whom grants and awards
will be made, to make grants and awards, to determine the specific terms and
conditions of each grant and award, and to interpret and construe the terms of
the plan. The Committee may delegate this authority to the Chief Executive
Officer of the Company with respect to grants and awards made to employees who
are not "affiliates" within the meaning of the Exchange Act or "covered
employees" within the meaning of Code Section 162(m). The Committee's decisions,
interpretations, and actions related to the 1997 Plan are final and conclusive
on the Company, its subsidiaries, shareholders, employees and their
beneficiaries.
Shares Subject to the 1997 Plan
The 1997 Plan increases the number of shares of common stock which may
be granted or awarded thereunder. A maximum of 7% of the outstanding shares of
common stock (17,977,998 shares as of February 27, 1997) may be issued under the
1997 Plan, subject to proportionate adjustment for changes in the capitalization
of the Company. This amount includes shares which were previously reserved for
issuance under the 1992 Program and not yet granted or awarded. As of February
27, 1997, 103,025 shares of 720,000 shares of common stock authorized for grant
under the 1992 Program were not granted or issued. The Board anticipates that
substantially all of the shares available for grant or issuance under the 1992
Program
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will be granted or issued prior to its termination. Shares may be authorized and
unissued shares, treasury shares or shares acquired on the open market.
The 1997 Plan limits the amount payable to an employee in any calendar
year with respect to grants or awards distributable in the form of cash to 300%
of the employee's base or regular compensation payable with respect to such
calendar year ($1,777,695 would be the maximum amount distributable in cash to
the Company's Chief Executive Officer with respect to 1996). The maximum amount
payable to an employee in any calendar year with respect to grants or awards
distributable in the form of common stock is 2% of the outstanding stock
(359,560 shares as of February 27, 1997). In any calendar year, no more than an
aggregate of 100,000 shares can be granted to an employee in the form of
non-qualified options or stock appreciation rights under the 1997 Plan.
Eligibility
Employees of the Company and its subsidiaries, including, but not
limited to, all executive and senior officers, are eligible to receive grants or
awards under the 1997 Plan, when designated by the Committee. As of February 27,
1997, there were 34 employees designated by the Committee to participate in the
1997 Plan.
Types of Grants and Awards
Options. The Committee may, in its discretion, grant nonqualified or
incentive stock options to employees. The Committee determines the exercise
price of any such option (which may not be less than fair market value as of the
date of grant), the number of shares of common stock subject to the option, and
the time or times at which the option is exercisable. The Committee determines
the term of any option granted under the 1997 Plan, provided that no option may
be exercisable earlier than six months and one day following the date of grant,
and no option is exercisable later than 10 years from the date of grant. The
Committee may award dividend equivalents in connection with any option granted
under the Plan.
The term "fair market value" is defined in the 1997 Plan as the mean of
the closing bid and asked prices of common stock as quoted on the National
Association of Securities Dealers Automated Quotation National Market System
("NASDAQ") on the date of grant or award, or if no common stock is traded on the
NASDAQ, fair market value is determined as of the date common stock last traded
on such system. Otherwise, the Committee may determine the fair market value of
common stock using any reasonable method. As of February 27, 1997, the closing
bid and asked prices of common stock on the NASDAQ were $38.00 and $38.625,
respectively.
Payment of the option price may be in cash or an equivalent or in the
form of shares of common stock. If an employee exercises an option during his
employment and pays all or any portion of the purchase price through the
surrender of shares of common stock, the Committee may grant to such employee an
additional option to purchase the number of shares so surrendered. Any such
additional option shall have an exercise price equal to the fair market value of
the common stock as of the date of its grant.
Options which are designated by the Committee as incentive stock
options must comply with the additional requirements of Code Section 422. Among
other things, the aggregate fair market value (determined at the time of grant)
of the common stock with respect to which incentive stock options may be
exercised by any employee during a calendar year may not exceed $100,000.
Restricted Stock. The 1997 Plan permits the Committee to grant or make
available for purchase shares of restricted stock. The purchase price, if any,
for such stock is determined by the Committee and may be less than the fair
market value of common stock as of the date of purchase. At the time a grant of
restricted stock is made, the Committee will designate a restriction period
during which the transfer or other disposition of the shares is prohibited. The
Committee, in its discretion, may impose additional conditions with respect to
the lapse of the restriction period, such as the attainment of specified
performance goals or incremental vesting requirements.
Subject to any restrictions or limitations imposed by the Committee,
employees who receive restricted stock will generally have all rights and
privileges of shareholders, including full voting rights and the right to
receive dividends, during the restriction period. Certificates for shares of
common stock relating to an award of restricted stock will be delivered to an
employee upon the expiration or termination of the restriction period and the
satisfaction of any additional terms and conditions applicable to such award.
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Performance Shares. The 1997 Plan permits the Committee to grant or
make available for purchase performance shares. The purchase price for such
shares, if any, is determined by the Committee and may be less than the fair
market value of common stock as of the date of purchase. Performance shares
granted or made available for purchase are subject to performance goals
determined by the Committee. Such goals may relate to the Company, a subsidiary,
a division, department or unit of the Company or a subsidiary or to any
employee, group of employees or combination thereof. The Committee may award
dividend equivalent payments with respect to performance shares granted under
the 1997 Plan.
Upon the attainment of applicable performance goals and the
satisfaction of any additional terms and conditions, an employee will be paid
(1) the number of shares of common stock equal to the performance shares earned,
(2) the right to purchase shares of common stock at a price designated by the
Committee, which may be less than fair market value, (3) cash in an amount equal
to the fair market value of the number of shares of common stock represented by
the performance shares earned, or (4) a combination thereof, determined in the
discretion of the Committee. If the applicable performance goals are not
satisfied, in whole or in part, due to circumstances that are beyond the control
of the Company or the employee, the Committee may provide for full or partial
payment of the award or for its cancellation, without payment. Prior to the
issuance of common stock in consideration of performance shares, an employee
shall have no rights as a shareholder of the Company.
Phantom Shares. The Committee may grant or make available for purchase
phantom shares, the value of which is related to the value of shares of common
stock. The purchase price for such shares, if any, will be determined by the
Committee and may be less than the fair market value of common stock as of the
date of purchase. No common stock is issuable in respect of the grant or
purchase of phantom shares, and the Company is not required to establish a fund
or set aside assets for the payment of such shares. Each phantom share is
credited to a phantom share account, which account is established solely for
bookkeeping purposes. An amount equal to dividends paid on shares of common
stock is credited to such account based upon the number of phantom shares
credited to such account. The Committee will prescribe conditions for the
incremental payment of amounts distributable in respect of phantom shares, such
as the establishment of vesting periods. Amounts distributable in respect of
phantom shares may be paid in the form of cash, common stock or a combination
thereof, determined in the discretion of the Committee. Employees are not
entitled to the rights of a shareholder of the Company prior to the issuance of
shares of common stock in respect of phantom shares.
Stock Appreciation Rights. To encourage the acquisition and retention
of common stock by providing a form of grant or award payable in cash which will
allow employees to exercise options without the necessity of selling shares to
pay the option price or resulting taxes, the 1997 Plan includes stock
appreciation rights ("SARs"). The Committee may grant SARs either concurrently
with an option or separately, without regard to any option. The Committee
determines the term of each SAR and the time or times at which each SAR will be
exercisable; provided, that no SAR may be exercisable later than 10 years after
the date of grant.
Upon the exercise of a SAR, the Company will deliver to the employee
shares of common stock or cash or a combination thereof in amount equal to the
excess of the current fair market value of common stock over (1) the option
price, if the SAR is related to an option, or (2) the fair market value of a
share of common stock on the date of grant, if the SAR is granted without regard
to any option.
Code Section 162(m) Limitations. Code Section 162(m) generally
disallows a tax deduction to public corporations for compensation over
$1,000,000 for any calendar year paid to the Company's chief executive officer
and four other most highly compensated executive officers in service as of the
end of any calendar year. Code Section 162(m) provides that qualifying
performance-based compensation will not be subject to the deduction limit if
certain requirements are met. Grants and awards under the 1992 Program may not
comply with the provisions of Code Section 162(m).
Grants of nonqualified options and SARs under the 1997 Plan by the
Committee are intended to constitute performance-based compensation within the
meaning of Code Section 162(m). With respect to other grants and awards under
the 1997 Plan, including restricted stock and performance shares, Code Section
162(m) requires shareholder approval of the particular performance-based goals
that must be achieved for the grants or awards to be vested or earned. The 1997
Plan empowers the Committee to structure any grant or award thereunder as
performance-based compensation and to designate in connection therewith
performance-based objectives with respect to such grants or awards from among
the following: (1) the return on average shareholders' equity of the Company,
(2) the return on average assets of the Company, (3) the net income of the
Company, (4) the earnings per share of the Company, (5) the total shareholder
return of the
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Company, (6) the market share of the Company or a subsidiary or unit thereof,
and (7) such other criteria as may be established by the Committee, in writing,
consistent with the requirement of Code Section 162(m). Performance-based
objectives designated by the Committee may relate to the Company, a subsidiary,
division, department or unit of the Company or any subsidiary thereof, or any
employee or group of employees. The Committee has not yet designated specific
performance-based objectives with respect to any grant or award under the 1997
Plan.
Acceleration of Grants and Awards upon Change in Control
Grants and awards are accelerated and immediately exercisable upon the
occurrence of a change in control. A "change in control" is deemed to occur upon
(1) the acquisition by any person or group of persons of 20% or more of the
voting power of the Company's securities, without approval or recommendation of
the Board, (2) the transfer of assets or other liquidation or reorganization of
the Louisiana Bank by the FDIC or other regulatory agency, (3) the approval by
the shareholders of the Company of a merger or consolidation which results in a
change of 20% or more in the beneficial ownership of voting control of the
Company, (4) a change in the composition of the Board which excludes a
majority of the "continuing board" (as defined in the 1997 Plan), or (5) the
sale of all or substantially all of the stock or assets of the Louisiana Bank.
Amendments to the 1997 Plan
The Board may amend or discontinue the 1997 Plan at any time, without
the approval or consent of shareholders, provided that no such amendment or
discontinuance may materially change or impair, without the prior consent of the
recipient thereof, an award or grant previously made under the 1997 Plan. Such
amendments may include, but are not limited to, the addition of grants and
awards, the addition of persons or classes of persons eligible to receive grants
or awards, and the modification of the number of shares of common stock
available for grant or issuance. Similar amendments under the 1992 Program were
subject to shareholder approval.
Transfer of Grants and Awards
Grants and awards under the 1997 Plan are generally not subject to
transfer, assignment, pledge, alienation or other form of encumbrance, except in
the event of an employee's death; provided that the Committee, in its
discretion, may permit the transfer of any nonqualified option, restricted
stock, performance share or unit or SAR to a member of the employee's immediate
family or to a trust established for such family members. As a condition
precedent to any such transfer, the employee and any transferee will be required
to enter into an agreement with the Committee pursuant to which the employee
agrees to satisfy his applicable income and employment tax obligations and the
transferee agrees to be bound by such terms and conditions as the Committee
deems necessary or appropriate.
Effective Date and Term
The 1997 Plan will be effective upon its approval by the shareholders
of the Company and shall remain in existence until all grants or awards
thereunder have been satisfied by the issuance of shares of common stock or the
payment of cash in respect thereto or earlier terminated and all restrictions
and limitations imposed on shares of common stock have lapsed or such shares
have been forfeited; provided, however, that no grant or award shall be made
after the 10th anniversary of the date on which the 1997 Plan is approved by the
shareholders of the Company.
Federal Income Tax Consequences
The following summary is based on current interpretations of existing
federal income tax laws and does not purport to be complete. Reference should be
made to the Code and additional state and local income tax consequences may
apply to transactions involving grants or awards under the 1997 Plan.
Options. There are no immediate federal income tax consequences to
either an employee or to the Company on the grant of a nonqualified option. Upon
the exercise of such an option, the employee recognizes ordinary income equal to
the difference between the aggregate option price of the shares of common stock
with respect to which the option is exercised and the aggregate fair market
value of such shares as of the exercise date, and the Company is entitled to a
deduction in the year of exercise in an amount equal to the amount the employee
is required to recognize as ordinary income.
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An employee does not recognize ordinary income upon the grant or
exercise of an incentive stock option, but the excess of the fair market value
of the shares at the time of exercise over the option price is a tax preference
item which may subject the employee to the alternative minimum tax imposed under
Code Section 55. Upon the subsequent disposition of shares of common stock
acquired on the exercise of an incentive stock option, an employee will
recognize capital gain or loss in an amount equal to the difference between the
exercise price and the sales price of the common stock, provided the shares are
not disposed of within two years of the date of grant and one year from the date
of exercise of the incentive stock option (the "required holding period"). An
employee disposing of shares prior to the expiration of the required holding
period will recognize ordinary income equal to the difference between the option
price and the fair market value of such shares on the option exercise date. The
Company is not entitled to a deduction in connection with the exercise of an
incentive stock option unless the employee disposes of the shares acquired on
the exercise of the option prior to the expiration of the required holding
period.
If the exercise price of an option is paid by the surrender of
previously-owned shares, the basis of the previously- owned shares carries over
to the shares received on the exercise of the option. If the option is a
nonqualified option, any income recognized on exercise is added to the
employee's basis. If the option is an incentive stock option, the employee will
recognize gain if the shares surrendered were acquired through the exercise of
an incentive stock option and have not been held for the required holding
period. This gain will be added to the basis of the shares received on the
exercise of the option.
Restricted Stock and Performance Shares. There are no immediate federal
income tax consequences to either the employee or the Company upon the grant or
purchase by the employee of restricted stock or performance shares. Upon the
lapse of restrictions on the transfer of or the attainment of performance goals
with respect to restricted stock or performance shares, an employee will
recognize ordinary income in an amount equal to the difference between the
purchase price, if any, for the shares and the fair market value of common stock
and cash received with respect to such lapse or attainment, and the Company is
entitled to a deduction in the year of lapse or attainment in an amount equal to
the amount the employee is required to recognize as ordinary income, subject to
the limitations of Code Section 162(m). Dividends paid on restricted stock are
taxable to the employee as ordinary income and deductible by the Company.
An employee may elect within 30 days of the grant or purchase of
restricted stock to recognize taxable income in the year shares are awarded in
an amount equal to the difference between the fair market value of the
restricted stock at the time of the grant or purchase and the purchase price,
if any, determined without regard to any restrictions, and the Company is
entitled to a corresponding deduction at that time. Any gain or loss on a
subsequent disposition of the stock by the employee is a capital gain or loss,
and no further deduction will be available to the Company. If an employee makes
this election and the employee subsequently forfeits the restricted stock, the
employee is not entitled to a deduction as a consequence of such forfeiture, but
the Company must include as ordinary income the amount it previously deducted in
the year of grant with respect to such shares.
Phantom Shares. There are generally no federal income tax consequences
to either the employee or the Company on the grant or purchase by the employee
of phantom shares or the crediting of dividend equivalents to a phantom share
account. An employee recognizes ordinary income upon the maturity of phantom
shares and dividend equivalents, if any, and the Company is entitled to a
deduction in the year of maturity in an amount equal to the amount the employee
is required to recognize as ordinary income, subject to the limitations of Code
Section 162(m). If phantom shares are purchased by an employee, the employee is
deemed to have a basis in the common stock issued in respect of such shares
equal to the purchase price.
Stock Appreciation Rights. The grant of an SAR generally does not
result in income to an employee or in a deduction for the Company. Upon the
exercise of an SAR, an employee will recognize ordinary income and the Company
will be entitled to a corresponding deduction in an amount equal to the fair
market value of the common stock and any cash received by the employee.
Withholding. The 1997 Plan permits an employee to elect to have the
Company withhold from shares the employee would otherwise be entitled to receive
in connection with the receipt of common stock or the lapse of restrictions on
shares of restricted stock, shares of common stock having a fair market value
equal to the amount required to be withheld under applicable income and
employment tax laws. The Committee may disapprove such tax withholding election
by an employee or may suspend or terminate the right to make such elections.
Change in Control. Acceleration of the exercisability or vesting of an
award upon the occurrence of a change in
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control may result in the characterization of the excess of the fair market
value of common stock and any cash paid with respect to such award over the
purchase price, if any, as a parachute payment (within the meaning of Code
Section 280G) if the sum of such amounts and any other such contingent payments
received by the employee exceeds an amount equal to three times the "base
amount" of such employee. The term "base amount" generally means the average of
the annual compensation of such employee for the five years preceding such
change in ownership or control. An excess parachute payment, with respect to any
employee, is the excess of the parachute payments made to such employee, in the
aggregate, over and above such employee's base amount. If the amounts received
by an employee are characterized as parachute payments, such employee will be
subject to a 20% excise tax on any excess parachute payment, and the Company
will be denied any deduction with respect to such payment.
Vote Required
Adoption of the 1997 Plan requires the affirmative vote, cast in person
or by proxy, of the holders of at least a majority of the shares of common stock
of the Company represented and entitled to vote at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ADOPTION OF THE 1997 LONG-TERM INCENTIVE PLAN.
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INFORMATION CONCERNING MANAGEMENT
Board Committees. The Company has no standing audit committee. The
Company has a Nominating Committee composed of Messrs. Cain, Kock, and Watters.
The Nominating Committee, whose functions and operating procedures have not yet
been fully delineated, held one meeting during the year. The Company has a
Compensation Committee consisting of Messrs. Crosby, Howson, and Phillips, as
discussed below.
The Louisiana and Alabama Banks have Audit Committees that function
primarily to evaluate the scope and results of internal and external audits. The
Louisiana Bank's Audit Committee, which meets quarterly, is composed of not less
than three members who are appointed each meeting. Messrs. Cain, Crowell, Kelly,
and Roberts served as committee members during 1996. The Alabama Bank Audit
Committee, which is composed of Messrs. Beard, Bullard, Cooper, and Weber, met
twice in 1996.
During 1996, the Board of Directors of the Company held 12 meetings.
All directors other than Mr. Hines attended at least 75% of the aggregate number
of meetings of the Company's Board of Directors and the committees of the
Company on which they served.
Compensation of Directors. All Company directors are also directors of
one or more of the Company's subsidiaries, and except as described below, the
Company does not compensate directors for attendance at Company board meetings.
During 1996, the Louisiana Bank paid its non-officer directors annual fees of
$12,000 and $750 for each day on which the director attended one or more
meetings of the Louisiana Bank's board or a committee thereof. The Alabama Bank
paid its non-officer directors who are not also directors of the Company annual
fees of $1,500, $500 for attendance at each Alabama Bank board meeting and $300
per meeting for attendance at committee meetings of that board. The Company paid
the two Company directors who are also directors of the Alabama Bank but not the
Louisiana Bank annual fees of $12,000 and $750 for each day on which those
directors attended one or more meetings of the Company's board or a committee
thereof. The Alabama Bank also paid these two directors $500 for attendance at
each Alabama Bank board meeting and $300 per meeting for attendance at that
board's committee meetings.
In 1994, the Company's shareholders approved the Directors'
Compensation Plan for the purpose of ensuring that each director who is not an
employee of the Company or its subsidiaries acquires and maintains an
appropriate equity interest in the Company through ownership of the Company's
common stock. In addition, this plan amended and restated the Unfunded Plan of
Deferred Compensation adopted in November, 1990. For each director, the
Directors' Compensation Plan, further amended by the Company's shareholders in
1996, provides for (a) the annual award of 300 shares of common stock, (b) the
annual grant of 1,000 non-qualified stock options, and (c) the voluntary
deferral of all or a portion of the stock award and/or the fees otherwise
payable annually to the directors.
Any deferred amounts are credited to a bookkeeping account maintained
by the Company for the benefit of each director. The plan permits each director
to allocate, from time to time, deferred amounts among an equity fund, a fixed
income fund, a money market fund, and credits representing shares of the
Company's common stock. Earnings and losses are periodically credited to each
account based upon such investment allocations; however, there is no requirement
that the Company actually acquire any asset subject to allocation by the
director. The Company established a rabbi trust in connection with the funding
of its obligations under the plan. Each year during the continuation of this
plan, it is the Company's intent to contribute to this trust in order to fund
its obligations thereunder.
Benefits under the plan are distributed as of the date designated by
each director, generally after the date the director ceases to serve as a member
of the Board of Directors of the Company. Benefits are equal to the amount
credited to a director's account at the time of distribution.
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EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company is
responsible for approving the salaries of the executive officers who are also
directors of the Company as well as reviewing the compensation of the other
executive officers. The Committee also has the responsibility to perform a more
general review of the salaries of other officers, develop and administer
executive compensation and benefit plans, and review and approve other employee
benefit plans that may be appropriate for the Committee to consider. The
Committee is composed of three independent, non-employee directors, of which one
is elected Chairman. In conducting its business, the Committee met three times
during 1996.
Discussions, recommendations, and determinations of the Committee are
made on the basis of an assessment of corporate performance and a review of
supporting data, banking industry and peer standards, general marketplace data,
and regional and national economic considerations. The Committee uses outside
benefit and compensation consultants and external legal counsel as a resource
when needed, and relies on survey data produced by independent third parties as
a source of information to assist in their deliberations.
The Company's executive compensation program is designed to provide a
competitive level of pay that rewards performance as well as enables the Company
to attract and retain qualified senior executives. Base pay is targeted at a
level that is competitive with the overall banking industry and a group of peer
banks. As presented in the Summary Compensation Table, in addition to base
salary, the executive officers are participants in the Executive Compensation
Plan (an annual incentive plan) and the Long-Term Incentive Program, both of
which were established by the Committee in 1992. Executive agreements addressing
issues of change in control were implemented in 1992 and revised in 1993 and
1996.
The Committee established the salary of William L. Marks, Chairman and
Chief Executive Officer of the Company and the Louisiana Bank, at $610,000
effective July 1, 1996, an annualized increase of $35,000 or 6%.
Executive Compensation Plan. The Executive Compensation Plan, which
addresses incentive compensation, was developed to "optimize the profitability
and growth of the Company and motivate certain officers, executive personnel,
and other key employees of the Company through the award of compensation based
on the attainment of stated performance objectives." The criteria used to
measure company performance in 1996 were return on average assets (ROA) and
return on average equity (ROE). These two performance criteria are among the
most frequently used measures of financial performance in the banking industry.
Each measurement criterion is weighted equally to arrive at an overall composite
performance rating. Actual company performance is ranked in comparison to the
performance of a defined peer group of twelve high performing banks in the South
Central United States and this ranking is compared to established Company
performance objectives. The Chief Executive Officer's performance is measured on
the fulfillment of these corporate performance objectives. Other executive
officers, as well as other officers participating in the Executive Compensation
Plan, are measured on a combination of these corporate performance objectives
and individual performance objectives related to that officer's area of
responsibility. All individual objectives support achieving the overall
corporate goals.
Incentive compensation awards in 1996 were predicated upon the Company
reaching a minimum threshold of performance. The minimum performance threshold
was exceeded and actual performance, as provided for by the Plan, was utilized
to calculate the incentive awards payable to participants.
The Committee was responsible for the evaluation of corporate and
individual performance and for making all awards under the plan, which included
a total of $755,719 awarded to Messrs. Marks, Milling, Grimball, Lawder and Hope
as participants during fiscal 1996. Of this amount, $314,059 was awarded to Mr.
Marks, which represented an amount equal to 53% of his salary.
Long-Term Incentive Program. The Long-Term Incentive Program ("LTIP")
was established "to increase shareholder value, to advance the interests of the
Company, and to attract, retain, and motivate certain officers, executive
personnel, and other key employees through the grant or award of stock-based
incentive compensation." The LTIP, which was approved by vote of the
shareholders of the Company in 1992, is administered by the Compensation
Committee which
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designates the participants and grants any awards under the plan. The incentives
available under the LTIP are:
(1) stock options, which may be either non-statutory stock
options or incentive stock options within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended;
(2) restricted stock, shares of common stock subject to
restrictions on transfer, forfeitability or other limitations, and/or
the achievement of specified performance objectives;
(3) performance shares, shares of common stock which may be
subject to the attainment of specified performance objectives; and
(4) phantom shares, equity awards which are related to the
value of shares of common stock.
During 1996, awards of stock options and performance-based restricted
stock were granted to the Chief Executive Officer and the other named executive
officers, as detailed in the compensation tables shown herein, and certain other
officers. In granting these awards, the Committee took particular note of
management's progress over the past years toward correcting identified
deficiencies, strengthening internal policies and procedures, achieving
geographical expansion, and improving corporate profitability. In establishing
the level of grants to the Chief Executive Officer, the Committee considered
overall compensation data from banking industry sources and peer bank holding
companies as well as the Committee's assessment of the Chief Executive Officer's
current performance and the expectations of his future contributions to the
Company's long-term performance goals. These same measures, along with the Chief
Executive Officer's recommendations, were applied in awarding grants to the
other officers.
New 1997 Long-Term Incentive Plan. The Committee approved, and the
Board subsequently adopted, the 1997 Long-Term Incentive Plan, which is being
submitted for shareholder approval at the 1997 Annual Meeting in order to
satisfy the shareholder approval requirement of Code Section 162(m) of the
Internal Revenue Code of 1986, as amended. Section 162(m) generally disallows a
tax deduction to public corporations for compensation over $1,000,000 paid in a
calendar year to the corporation's Chief Executive Officer and the four other
most highly-compensated executive officers in service as of the end of any
calendar year. Section 162(m) further provides that qualifying performance-based
compensation will not be subject to the deduction limit if certain requirements
are met. Shareholder approval of the 1997 Long-Term Incentive Plan will serve to
ensure that grants made by the Committee may qualify as performance-based
compensation within the meaning of Code Section 162(m). Because of the
ambiguities and uncertainties as to the application and interpretation of Code
Section 162(m) and the regulations promulgated thereunder, no assurance can be
given, notwithstanding the efforts of the Company in this area, that
compensation intended by the Company to satisfy the requirements for
deductibility under Code Section 162(m) will, in fact, do so.
Executive Agreements. The Company and the Louisiana or Alabama Banks
have entered into separate agreements with Messrs. Marks, Milling, Grimball,
Lawder and Hope providing for compensation and severance benefits upon the
termination of employment under certain circumstances following a change in
control of the Company or the Banks.
Generally, under the agreements, a change in control of the Company or
the Banks will be deemed to have occurred if (i) any person acquires or becomes
the beneficial owner of more than 20% of the Company's outstanding common stock
without the approval of the Company's Board of Directors, (ii) the Federal
Deposit Insurance Corporation or any other regulatory agency takes certain
actions in connection with the reorganization or liquidation of the Banks, (iii)
the Company or the Banks enter into a merger or consolidation, or sell all or
substantially all of their stock or assets, without the surviving or acquiring
corporation agreeing to assume the obligations of the Company or the Banks under
the agreements, or (iv) there is a change in the majority of the members of the
Company's or the Banks' Boards of Directors.
Under each agreement, if the Company or a Bank terminates the
employment of the officer without cause, or if the officer resigns during the
three year period following a change in control as a result of a change or
diminution of his duties, responsibilities, title, compensation, working
conditions or general status with the Company or the Banks, he will be entitled
to special severance benefits including, among other things, a sum equal to 300%
of his annual salary and substantially all of the amounts that are payable to
him under the Company's and the Banks' employee and executive benefit plans.
Other Responsibilities. The Committee reviews the provisions and scope
of other employee benefit plans, such as the Retirement Plan and the Savings
Plus Plan (formerly the Thrift Incentive Plan), and recommends to the Board of
Directors any changes to such plans that it deems appropriate and/or the
adoption of any new qualified or non-qualified plans. (The Retirement Plan and
the Savings Plus 401(k) Plan are discussed elsewhere in this proxy statement.)
In addition to the foregoing, the Committee also reviews any other matters with
respect to the management of employee incentives, compensation and benefits, and
if it believes that action by the Board of Directors may be suitable, the
Committee makes recommendations concerning those matters to the Board.
The Committee believes that the executive compensation policies and
programs of the Company serve the best interest of its shareholders and that the
combination of a sound base salary program, a competitive short-term cash bonus
incentive plan,
17
<PAGE>
and strong long-term incentives provides a foundation for the continued success
of the Company.
Compensation Committee of the Board of Directors
Robert E. Howson, Chairman
Robert H. Crosby, Jr.
John G. Phillips
18
<PAGE>
I. SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards (9)
-------------------------------- -------------------------
Restricted Options
Stock Award Number
Dollar of All Other
Names and Principal Position Year Salary Bonus (8) Value(10) Shares Compensation
- ---------------------------- ---- -------- --------- ----------- ------ ------------
<S> <C> <C> <C> <C> <C> <C>
William L. Marks..................... 1996 $592,565 $314,059 $300,000(1) 18,000 $6,516(5)
Chairman & Chief Executive 1995 562,532 337,519 288,750(2) 18,000 4,792
Officer of the Company and the 1994 525,000 393,750 252,000(3) 15,000 4,613
Louisiana Bank
R. King Milling...................... 1996 $387,528 $162,762 $90,000(1) 6,000 $7,650(6)
President of the Company 1995 375,014 168,756 86,625(2) 6,000 6,051
and the Louisiana Bank 1994 375,000 210,938 84,000(3) 6,000 4,613
Kenneth A. Lawder, Jr................ 1996 $248,024 $104,170 $75,000(1) 6,000 $7,650(6)
Executive Vice President of the 1995 236,074 106,211 57,750(2) 6,000 4,917
Company & the Louisiana Bank 1994 221,010 124,318 56,000(3) 6,000 4,613
Edward B. Grimball................... 1996 $212,011 $89,045 $60,000(1) 6,000 $6,516(5)
Executive Vice President and 1995 201,004 90,452 57,750(2) 6,000 4,833
Chief Financial Officer of the 1994 185,000 84,813 56,000(3) 6,000 4,422
Company & the Louisiana Bank
John C. Hope, III.................... 1996 $204,008 $85,683 $75,000(1) 6,000 $5,718(7)
Executive Vice President of the 1995 192,552 86,648 57,750(2) 6,000 68,045
Company and Chairman & Chief 1994 33,765 ___ 244,925(4) ___ 96
Executive Office of the Alabama
Bank
- ------------------------
<FN>
(1) The restricted shares granted in 1996 represent a target award that is
subject to adjustment based on the performance of the Company, as measured
by its return on assets and return on equity, in relation to that of a
designated peer group over the three year period ending December 31, 1998.
The ultimate number of shares in which the named executive will vest can
range from 0% to 200% of the target award. The restricted shares vest on
July 23, 1999 upon completion of certain employment requirements. The
grant date for the target award was July 23, 1996. The target award is
valued at $30.00 per share, the market price on the award date.
(2) Restricted stock vests July 25, 2000 upon completion of certain employment
requirements. The grant was awarded July 25, 1995 and is valued at $28.875
per share, the market price on the award date.
(3) Restricted stock vests July 27, 1999 upon completion of certain employment
requirements. The grant was awarded July 27, 1994 and is valued at $28.00
per share, the market price on the award date.
(4) Restricted stock vests May 27, 1997 upon completion of certain employment
requirements. The grant was awarded October 28, 1994 and is valued at
$24.25 per share, the market price on the award date.
(5) This represents $2,016.00 in imputed income for the group term life
insurance and $4,500.00 in matching contributions under the Savings Plus
401(k) Plan.
(6) This represents $3,150.00 in imputed income for the group term life
insurance and $4,500.00 in matching contributions under the Savings Plus
401(k) Plan.
(7) This represents $1,218.00 in imputed income for the group term life
insurance and $4,500.00 in matching contributions under the
19
<PAGE>
Savings Plus 401(k) Plan.
(8) All bonuses have been paid under the Executive Compensation Plan (annual
incentive plan).
(9) All awards have been made under the Long Term Incentive Program.
(10) The restricted stock award dollar values shown in the Table were
calculated using the market price of the Company's common stock on the
date of award. The aggregate value of the restricted stock holdings
granted in 1994, 1995 and 1996 for each named executive officer calculated
using the market price of the Company's common stock as of December 31,
1996 was as follows: Mr. Marks, $1,025,875; Mr. Milling, $318,375;
Mr. Lawder, $229,938; Mr. Grimball, $212,250; Mr. Hope, $516,475.
Dividends are paid in full on such restricted shares.
</FN>
</TABLE>
II. OPTION GRANTS TABLE
<TABLE>
<CAPTION>
Option Grants in 1996
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price Appreciation
Individual Grants For Option Term
----------------------------------------------------------------------------------------------
Number of % of Total
Securities Options
Underlying Granted Exercise or
Options to Employees Base Price Expiration
Name Granted in 1996 (Per Share) Date 5% 10%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William L. Marks...................... 18,000 17.39% $30.000 7/23/2006 $339,600 $860,600
R. King Milling....................... 6,000 5.80% $30.000 7/23/2006 113,200 286,900
Kenneth A. Lawder, Jr................. 6,000 5.80% $30.000 7/23/2006 113,200 286,900
Edward B. Grimball.................... 6,000 5.80% $30.000 7/23/2006 113,200 286,900
John C. Hope, III..................... 6,000 5.80% $30.000 7/23/2006 113,200 286,900
Named executive officers'
assumed value gained as a
percent of all shareholders' gains:
Officers....................... $792,400 $2,008,200
Shareholders................... $338,689,000 $858,304,500
Percent of gain pertaining to
officers' options............ 0.23% 0.23%
</TABLE>
20
<PAGE>
III. OPTION EXERCISES AND YEAR-END VALUE TABLE
Aggregated Option Exercises in 1996, and Year-End Option Value
<TABLE>
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Options at Options at
December 31, 1996 December 31, 1996
Shares Acquired Value ---------------------- ---------------------
Name on Exercise Realized All Exercisable All Exercisable
- ------------------------------ ------------------ -------------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
William L. Marks 5,149 $54,500 94,601 $1,064,300
R. King Milling 3,000 31,750 24,000 211,300
Kenneth A. Lawder, Jr. - - 38,850 521,700
Edward B. Grimball - - 40,400 556,000
John C. Hope, III - - 12,000 71,300
- ------------------------------
</TABLE>
21
<PAGE>
PERFORMANCE GRAPH
The accompanying graph shows the comparative total economic return,
including the reinvestment of cash dividends received and the effects of stock
price appreciation or depreciation, of the common stock of the Company, of all
U.S. common stocks listed on the NASDAQ system, and of the bank stocks of the
KBW 50 Total Return Index, a proprietary bank stock index of Keefe, Bruyette &
Woods, Inc., which tracks the returns of 50 large banking companies throughout
the United States.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
(December 31, 1991 = 100)
[GRAPH]
<TABLE>
<CAPTION>
Cumulative Total Return Index for the Year
-----------------------------------------------------------------------------------------------
1991 1992 1993 1994 1995 1996
-------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Whitney Holding
Corporation Common
Stock.................... 100 193 280 274 403 473
KBW 50 Total Return
Index ................... 100 127 134 128 204 289
NASDAQ Total Return
Index (U.S.
Companies).......... 100 116 134 131 185 227
</TABLE>
Company Plans
The Company's executive officers, who are appointed annually, are
participants in the Executive Compensation Plan, Long-Term Incentive Program,
Retirement Plan and Savings Plus Plan and may elect to participate in the
Deferred Compensation Plan. The Executive Compensation Plan and Long-Term
Incentive Program are described above under Executive Compensation.
Retirement Plan. The Louisiana Bank, in 1964, established a
noncontributory, defined benefit retirement plan. The plan, as amended (the
"Retirement Plan"), generally covers full-time employees of the Company and its
subsidiaries who are at least 21 years of age and complete certain additional
eligibility requirements. In general, the monthly benefit
22
<PAGE>
payable under the Retirement Plan at normal retirement age (age 65) is an amount
based on final average monthly compensation and years of service at normal
retirement age, reduced by a portion of the monthly Social Security amount
payable at that age. Final average monthly compensation (which includes the
salaries and bonuses of executive officers set forth in the Summary Compensation
Table, but excludes the value of grants and awards under the Long-Term Incentive
Program and contributions by the Company or its subsidiaries to employee benefit
plans) is calculated by averaging the highest successive five years of
compensation during the ten calendar years preceding termination or retirement
date. Beginning in 1994, compensation in excess of $150,000 is disregarded. With
certain exceptions, years of service includes all periods of continuous service
with the Company or its subsidiaries. Benefits under the Retirement Plan are
fully vested upon the completion of a stated period of service. The Retirement
Plan was most recently amended and restated in 1995. The maximum annual benefit
payable under the Retirement Plan for employees who retire in 1996 is the lesser
of $120,000 (a limitation imposed by the Internal Revenue Code) or 100% of
"average compensation" (defined as the highest aggregate earnings averaged over
three consecutive years).
In 1995, the Company adopted a non-qualified defined benefit retirement
plan, known as the Retirement Restoration Plan (the "Restoration Plan"),
effective as of January 1, 1995. The Restoration Plan provides to designated
executive officers benefits which are computed under the Retirement Plan's
formula but, without the restrictions imposed by certain specified provisions of
the Internal Revenue Code. Benefits under the Restoration Plan are reduced by
amounts actually payable from the qualified Retirement Plan.
The following table shows the estimated annual benefit payable from the
Retirement Plan upon retirement at age 65 to persons in specified compensation
and years of service classifications, computed on a straight life annuity basis,
including an estimate of the amount payable to any person designated as a
participant in the Retirement Restoration Plan. The table does not indicate
required deductions for Social Security benefits. Benefits under both the
"Retirement Plan" and "Retirement Restoration Plan" are calculated taking into
consideration base salary and cash bonus earned by the Executive and exclude any
amounts received in the form of cash or stock under the Long Term Incentive
Plan.
<TABLE>
<CAPTION>
RETIREMENT PLAN TABLE
Highest Successive Credited Years of Service
Five-Year Average --------------------------------------------------------------------------
Remuneration 15 20 25 30 35
- -------------------------- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 150,000 $ 41,175 $ 54,900 $ 68,625 $ 82,350 $ 96,075
175,000 48,038 64,050 80,063 96,075 112,088
200,000 54,900 73,200 91,500 109,800 115,641
300,000 82,350 109,800 137,250 164,700 192,150
400,000 109,800 146,400 183,000 219,600 256,200
500,000 137,250 183,000 228,750 274,500 320,250
600,000 164,700 219,600 274,500 329,400 384,300
700,000 192,150 256,200 320,250 384,300 448,350
800,000 219,600 292,800 366,000 439,200 512,400
1,000,000 274,500 366,000 375,000 549,000 640,500
1,200,000 329,400 439,200 549,000 658,800 768,600
Messrs. Marks, Milling, Grimball, Lawder, and Hope had, respectively, 6, 12, 6,
5, and 2 years of service as of December 31, 1996.
</TABLE>
Savings Plus Plan. In 1952, the Louisiana Bank established the Thrift
Incentive Plan (a profit sharing plan) which permitted eligible employees with
two years of service to become noncontributory participants. The last
contribution
23
<PAGE>
made by the Louisiana Bank to the Thrift Incentive Plan was in 1988.
The Thrift Incentive Plan was amended and restated in 1993, to, among other
things, comply with the provisions of the Tax Reform Act of 1986 and to activate
provisions permitted under Section 401(k) of the Internal Revenue Code.
Concurrently, the Thrift Incentive Plan was renamed the Savings Plus Plan. The
Savings Plus Plan generally provides that full-time employees of the Company or
its subsidiaries who have completed one year of service are eligible to
participate as of the first day of the following calendar quarter. Participants
may elect to contribute up to 10% of salary, subject to certain limitations; the
Louisiana, Florida and Alabama Banks match up to the first 3% of salary
contributed on a dollar for dollar basis. Participants are provided with
investment discretion over all contributions and may select from a variety of
investment vehicles. In 1996, the Louisiana Bank contributed $4,500 each on
behalf of Messrs. Marks, Milling, Grimball, and Lawder; and the Alabama Bank
contributed $4,500 on behalf of Mr. Hope.
Deferred Compensation Plan. In 1993, the Company established a
non-qualified deferred compensation plan. The Plan permits eligible officers to
annually elect to defer up to 25% of base salary and all or part of bonuses paid
under the Executive Compensation Plan. The Deferred Compensation Plan also
permits the deferral of any disallowed employee contributions under the Savings
Plus Plan. Participants are permitted to request that the Company invest the
deferrals in a limited number of investment options. Deferral elections must be
made prior to the calendar year in which the salary or bonus is earned.
Distribution under the Deferred Compensation Plan must generally coincide with
the attainment of retirement age and may take the form of a lump-sum payment or
a specified payment stream. Deferrals under this plan in 1996 for Messrs. Marks,
Milling, Grimball, Lawder, and Hope were $0, $0, $44,523, $0 and $42,842,
respectively.
CERTAIN TRANSACTIONS
The Company's banking subsidiaries have made, and expect to make in the
future, loans in the ordinary course of business to directors and executive
officers of the Company, members of their immediate families, and their
associates. Such loans have been made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons, and did not involve more than normal risk of
collectibility or present other unfavorable features.
Pan-American Life Insurance Company, of which John K. Roberts, Jr., a
director of the Company, is President and Chief Executive Officer and a
director, was paid $472,997.14 during 1996 for insurance premiums providing
coverage to and administrative services rendered to the Company and its
subsidiary Banks.
The Company retained Mr. Lippman and his law firm, Lippman, Mahfouz &
Martin during 1996 and expects to retain Mr. Lippman and his firm during 1997.
The Company has agreed to enter into an employment agreement with Guy C.
Billups, Jr., a nominee for director, upon consummation of the Merchants Merger.
Pursuant to this agreement, Mr. Billups would serve as Chairman of the Advisory
Board of a Mississippi national bank subsidiary of the Company that has been
formed to effect the Merchants Merger. The agreement has a two-year term,
subject to renewal for one additional year at the option of Mr. Billups, and
would provide a base salary to Mr. Billups of $100,000 in the first year,
$50,000 in the second year and $25,000 in the third year, with annual bonuses
and stock options to be at the sole discretion of the Company's Compensation
Committee. The agreement would also require the Company to assume the premium
payment obligations (currently $44,000 per year in the aggregate) under the
three split-dollar life insurance policies insuring the life of Mr. Billups.
Under the terms of the Merchants Agreement, the Company will appoint Mr. Billups
as a director of the Louisiana Bank upon consumation of the Merchants Merger.
The Company has also agreed to enter into employment agreements with Mr.
Billups' sons, Guy C. Billups, III and Walter Billups, upon consummation of the
Merchants Merger, whereby they would receive certain guaranteed terms of
continued employment and other benefits, including guaranteed salary amounts and
increases. Such salary amounts are substantially equivalent to the salary
amounts received by persons holding similar positions at the Company's other
non- Louisiana banking subsidiaries. These agreements and that of Mr. Billups,
Jr. provide for severance benefits in an amount equal to one year's salary upon
termination of employment under certain circumstances following a change in
control of the Company.
24
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Because the Company is a public company, its officers, directors and 10%
beneficial shareholders are required to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in their
ownership of the Company's stock. Based upon its review of copies of forms and
related documents furnished to the Company, management believes that all
required filings by all such persons were timely made during 1996.
ACCOUNTANTS
The shareholders will be asked to ratify the Board's selection of Arthur
Andersen LLP as independent public accountants to audit the books of the Company
and its subsidiaries for 1997. The firm has served as the Company's auditors
since 1964. Representatives of Arthur Andersen LLP are expected to be present at
the Annual Meeting, with the opportunity to make any statement they desire at
that time, and will be available to respond to appropriate questions. If the
selection is not ratified (abstentions and brokers non-votes will be
disregarded), the appointment of other auditors will be considered by the Board.
SHAREHOLDER PROPOSALS
In order for proposals of shareholders to be considered for inclusion in
the proxy statement and proxy for the 1998 Annual Meeting of Shareholders, such
proposals must be received at the Company's principal executive office no later
than November 15, 1997.
OTHER MATTERS
The matters to be acted on at the Annual Meeting are set forth in the
accompanying Notice. The Company knows of no other business to be presented at
the meeting, but if other matters requiring a vote are properly presented at the
meeting or any adjournments thereof, proxy holders will vote or abstain from
voting thereon in accordance with their best judgment.
By order of the Board of Directors.
William L. Marks,
Chairman
25
<PAGE>
EXHIBIT A
WHITNEY HOLDING CORPORATION
1997 LONG-TERM INCENTIVE PLAN
[WHITNEY HOLDING CORPORATION LOGO]
<PAGE>
WHITNEY HOLDING CORPORATION
1997 LONG-TERM INCENTIVE PLAN
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
SECTION 1 - PURPOSE........................................................ A-1
SECTION 2 - DEFINITIONS.................................................... A-1
SECTION 3 - ADMINISTRATION................................................. A-3
Composition ......................................................... A-3
Power and Authority................................................... A-3
Delegation ......................................................... A-3
Hold Harmless......................................................... A-3
SECTION 4 - ELIGIBILITY.................................................... A-4
SECTION 5 - SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS.................. A-4
Number of Shares...................................................... A-4
Type of Common Stock.................................................. A-4
Cancellation ......................................................... A-4
Maximum Awards........................................................ A-4
SECTION 6 - STOCK OPTIONS.................................................. A-4
Special Definition.................................................... A-4
General Provisions.................................................... A-5
Incentive Stock Options............................................... A-5
Dividend Equivalents.................................................. A-5
Manner of Exercise.................................................... A-5
Equity Maintenance.................................................... A-6
Rights as Stockholder................................................. A-6
SECTION 7 - RESTRICTED STOCK............................................... A-6
Special Definition.................................................... A-6
General Provisions.................................................... A-6
Enforcement of Restrictions........................................... A-7
Lapse of Restrictions................................................. A-7
Shareholder Rights.................................................... A-7
SECTION 8 - PERFORMANCE SHARES............................................. A-7
Special Definition.................................................... A-7
General Provisions.................................................... A-7
Satisfaction of Performance Objectives................................ A-8
Not a Stockholder..................................................... A-8
No Adjustments........................................................ A-8
Dividend Equivalent Payments.......................................... A-8
SECTION 9 - PHANTOM SHARES................................................. A-8
Special Definition.................................................... A-8
Grants ......................................................... A-8
Phantom Share Account................................................. A-8
i
<PAGE>
Distribution from Phantom Share Account............................... A-9
Not a Stockholder..................................................... A-9
SECTION 10 - STOCK APPRECIATION RIGHTS..................................... A-9
Special Definition.................................................... A-9
General Provisions.................................................... A-9
Exercise ......................................................... A-9
Payment ......................................................... A-10
SECTION 11 - GENERAL....................................................... A-10
Adoption and Effective Date........................................... A-10
Duration ......................................................... A-10
Transferability of Incentives......................................... A-10
Effect of Termination of Employment................................... A-11
Additional Legal Requirements......................................... A-11
Adjustment ......................................................... A-11
Written Agreements.................................................... A-11
Withholding ......................................................... A-11
No Continued Employment............................................... A-12
Amendment and Termination of the Plan................................. A-12
Immediate Acceleration of Incentives.................................. A-12
Governing Law......................................................... A-12
Compliance with Section 162(m) of the Code............................ A-12
Other Benefits........................................................ A-12
Deferral ......................................................... A-12
ii
<PAGE>
WHITNEY HOLDING CORPORATION
1997 LONG-TERM INCENTIVE PLAN
Whitney Holding Corporation, a corporation organized and existing under the
laws of the State of Louisiana (the "Corporation"), hereby establishes the 1997
Long-Term Incentive Plan (the "Plan"). The Plan is intended to replace the
Whitney Holding Corporation Long-Term Incentive Program which was first
effective as of April 22, 1992.
SECTION 1
PURPOSE
The Plan is established to optimize the profitability and growth of the
Corporation through the use of compensation incentives which link the interests
of executives and other key employees with the interests of the Corporation and
its shareholders. The Plan is further intended to provide flexibility to the
Corporation in connection with its compensation practices and policies and to
attract, retain and motivate officers, executives and other key employees
through the grant of nonqualified stock options, incentive options, stock
appreciation rights, restricted stock, and performance shares and units, all as
more fully set forth below.
SECTION 2
DEFINITIONS
2.1 "Act" means the Securities Exchange Act of 1934, as amended, and any
rule, regulation or interpretation promulgated thereunder.
2.2 "Board of Directors" means the Board of Directors of the Corporation.
2.3 "Change in Control" means and shall be deemed to occur if:
a. Any "person," including any "group," determined in accordance
with Section 13(d)(3) of the Act, other than an employee benefit
plan maintained by the Corporation or a Subsidiary, becomes the
beneficial owner, directly or indirectly, of securities of the
Corporation representing 20% or more of the combined voting
power of the Corporation's then outstanding securities, without
the approval, recommendation, or support of the Board of
Directors of the Corporation as constituted immediately prior to
such acquisition;
b. The Federal Deposit Insurance Corporation or any other
regulatory agency negotiates and implements a plan for the
merger, transfer of assets and liabilities, reorganization
and/or liquidation of Whitney National Bank;
c. The shareholders of the Corporation approve a reorganization,
merger or consolidation of the Corporation with respect to
which the individuals and entities who were beneficial owners
of Common Stock of the Corporation immediately prior to such
reorganization, merger or consolidation do not beneficially
own, directly or indirectly, more than 80% of the then
outstanding common stock or then outstanding voting securities
entitled to vote generally in election of directors of the
company resulting from such reorganization, merger or
consolidation.
d. A change in the members of the Board of Directors of the
Corporation which results in the exclusion of a majority of
the "continuing board." For this purpose, the term "continuing
board" means the members of the Board of Directors of the
Corporation, determined as of the effective date of this Plan
and subsequent members of such board who are elected by or on
the recommendation of a majority of such "continuing board";
or
e. The sale of substantially all of the stock or the assets of
Whitney National Bank by the Corporation (or any successor
corporation thereto).
A-1
<PAGE>
2.4 "Code" means the Internal Revenue Code of 1986, as amended.
2.5 "Common Stock" means no par value voting common stock issued by the
Corporation.
2.6 "Committee" means the persons appointed in accordance with Section 3
of the Plan.
2.7 "Corporation" means Whitney Holding Corporation.
2.8 "Covered Employee" means a Participant who is one of the group of
"covered employees" within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder, determined as of the date on which an
Incentive hereunder is granted, exercised, or vests, as the case may be.
2.9 "Employee" means a common law employee of the Corporation and/or its
Subsidiaries, determined in accordance with the Corporation's standard personnel
policies and practices.
2.10 "Fair Market Value" means the mean of the closing bid and asked
prices of Common Stock as quoted on the National Association of Securities
Dealers Automated Quotation System (NASDAQ) national market or other exchange on
which Common Stock is regularly traded on the date of the grant or the exercise
of an Incentive or the lapse of restrictions applicable to an Incentive
granted hereunder, as the case may be. If no Common Stock is traded on such
date, then Fair Market Value shall be the mean of the closing bid and asked
prices on the date Common Stock last traded on such system or exchange. If
Common Stock is not regularly traded, then Fair Market Value shall be the value
of Common Stock determined by the Committee in accordance with generally
accepted methods of valuation.
2.11 "Incentive" means a right to purchase or receive shares of Common
Stock, monetary payments or both in accordance with the terms of this Plan. An
Incentive may be granted in the form of stock options, restricted stock,
performance shares, phantom shares, stock appreciation rights (SARs) or any
combination thereof.
2.12 "Insider" means an individual who is an officer, director or 10%
beneficial owner of any class of the Corporation's equity securities registered
under Section 12 of the Act, as more fully defined in Section 16 of the Act.
2.13 "Participant" means an Employee who is granted or awarded an
Incentive under this Plan.
2.14 "Performance-Based Compensation" means the Incentives granted or
awarded hereunder which are intended to comply with the provisions of Section
162(m)(4) of the Code.
2.15 "Performance Measure" means the performance goals used for the
purposes of the grant of Incentives hereunder which are intended to constitute
Performance-Based Compensation. Performance Measures shall be designated by the
Committee, at the time of grant, from among the following alternatives:
a. The return on average shareholders' equity of the Corporation;
b. The return on average assets of the Corporation;
c. The net income of the Corporation;
d. The earnings per share of the Corporation;
e. The total shareholder return of the Corporation;
f. The market share of the Corporation or a Subsidiary or unit
thereof; and/or
g. Such other criteria as may be established by the Committee, in
writing, consistent with the provisions of Section 162(m) of the
Code.
A-2
<PAGE>
Performance objectives may relate to the Corporation, a Subsidiary, a division,
department or unit of the Corporation or any Subsidiary or any Participant or
group of Participants.
2.16 "Plan" means this 1997 Long-Term Incentive Plan, as the same may be
amended from time to time.
2.17 "Subsidiary" means any corporation of which the Corporation owns,
directly or indirectly, more than 50% of the total combined voting power of all
classes of stock.
2.18 Other Definitions. The terms "stock option" and "option" are
defined in Section 6.1 hereof; the terms "nonemployee director" and "outside
director" are defined in Section 3.1 hereof; the term "nonqualified stock
option" is designated in Section 3.2 hereof; the term "incentive stock option"
is defined in Section 6.1 hereof; the term "restricted stock" is defined in
Section 7.1 hereof; the term "performance share" is defined in Section 8.1
hereof; the term "phantom share" is defined in Section 9.1 hereof; the term
"phantom share account" is defined in Section 9.3 hereof; the terms "stock
appreciation right" and "SAR" are defined in Section 10.1 hereof; the term
"exercise date" is defined in Section 10.3 hereof; the term "cause" is defined
in Section 11.4 hereof; the term "effective date" is defined in Section 11.1
hereof.
SECTION 3
ADMINISTRATION
3.1 Composition. The Plan shall be administered by a committee appointed
by the Board of Directors, which committee shall consist of at least two
"non-employee directors" who are also "outside directors." For this purpose, the
term "non-employee director" shall have the meaning ascribed to it in Rule 16b-3
promulgated under the Act or a successor thereto. The term "outside director"
shall have the meaning ascribed to it in Section 162(m) of the Code.
3.2 Power and Authority. The Committee shall have the discretionary power
and authority to award Incentives under the Plan, including determination of the
terms and conditions thereof, to construe and interpret the provisions of the
Plan and any form or agreement related thereto, to establish and adopt rules,
regulations, and procedures relating to the Plan and to interpret, apply and
construe such rules, regulations and procedures and to make any other
determination which it believes necessary or advisable for the proper
administration of the Plan.
Decisions, interpretations and actions of the Committee concerning matters
related to the Plan shall be final and conclusive on the Corporation, its
Subsidiaries and stockholders and Participants and beneficiaries hereunder. The
Committee's determinations under the Plan need not be uniform, and the Committee
may make determinations selectively among the Participants who receive or are
eligible to receive Incentives, whether or not such Participants are similarly
situated.
3.3 Delegation. With respect to any Participant who is not an Insider or
Covered Employee, the Committee may delegate to the Chief Executive Officer of
the Corporation the power and authority to designate Participants hereunder, to
determine the size and type of any Incentive to be received by such
Participants, and to determine or modify performance objectives for such
Participants, subject to ratification by the Committee.
3.4 Hold Harmless. The Corporation shall indemnify and hold harmless the
members of the Committee and individuals, including Employees of the Corporation
or a Subsidiary, performing services on behalf of the Committee, against any
liability, cost or expense arising as a result of any claim asserted by any
person or entity under the laws of any state or of the United States with
respect to any action or failure to act of such individuals taken in connection
with the Plan, except claims or liabilities arising on account of the willful
misconduct or bad faith of any such individual.
SECTION 4
ELIGIBILITY
Employees of the Corporation and its Subsidiaries, including, but not
limited to, all executive and senior officers, shall be eligible to receive
Incentives under this Plan, when designated by the Committee. Employees may be
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designated for participation hereunder individually or by groups or categories,
in the discretion of the Committee.
SECTION 5
SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
5.1 Number of Shares. Subject to adjustment as provided in Section 11.6
hereof, the number of shares of Common Stock which may be issued under the Plan
shall not exceed 7% of the total number of shares of Common Stock which may be
issued and outstanding, from time to time. Such amount includes shares reserved
for issuance under the Whitney Holding Corporation Long-Term Incentive Program
not previously subject to grant or award under that program.
Except as provided in this Section 5, the number of shares available for
grant, transfer or issuance under the Plan shall be reduced by the number of
shares actually granted, transferred or issued hereunder, from time to time.
5.2 Type of Common Stock. Common Stock issued in connection with the
grant or award of an Incentive hereunder may be authorized and unissued shares
or issued shares held as treasury shares or open market shares.
5.3 Cancellation. Shares of Common Stock covered by Incentives which are
not earned or which are cancelled, forfeited, terminated, expired or otherwise
lapsed for any reason and options or stock appreciation rights which expire
unexercised, are cancelled or forfeited or which are exchanged for other forms
of options or Incentives hereunder, shall again be available for grant as an
Incentive under the Plan, to the extent permitted under Rule 16b-3 promulgated
under the Act or any successor thereto.
5.4 Maximum Awards. Notwithstanding any provision of the Plan to the
contrary, the following limitations shall apply to Incentives awarded hereunder:
a. In any calendar year, the maximum number of shares of Common
Stock that may be granted or otherwise awarded in the form of a
nonqualified option or SAR hereunder to a single Participant
shall be 100,000 shares.
b. In any calendar year, the maximum amount payable to any single
Participant in the form of cash with respect to Incentives
granted or awarded hereunder shall be 300% of the Participant's
base or regular compensation with respect to that year, and the
maximum payable to any single Participant in the form of Common
Stock with respect to Incentives granted or awarded hereunder
shall be 2% of the total number of shares of Common Stock issued
and outstanding, from time to time.
SECTION 6
STOCK OPTIONS
6.1 Special Definition. The term "stock option" or "option" means a right
to purchase shares of Common Stock from the Corporation. Stock options granted
hereunder may be nonqualified stock options or incentive stock options. A
"nonqualified stock option" is an option which is designated as nonqualified and
is not intended to meet the requirements of Section 422 of the Code; an
"incentive stock option" is an option which is designated as such and which is
intended to comply with the requirements imposed under Section 422 of the Code.
All stock options shall comply with the provisions of Section 6.2 hereof, and
incentive stock options shall comply with the provisions of Section 6.3 hereof.
6.2 General Provisions. All stock options granted under this Plan shall
be granted by the Committee, in its discretion, subject to the following general
terms and conditions:
a. The number of shares of Common Stock subject to an option shall
be determined by the Committee at the time of grant.
b. The option price per share shall not be less than Fair Market
Value as of the date of grant.
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c. Subject to earlier termination as provided in Section 10.4
hereof, the term of each stock option shall be determined by the
Committee.
d. Each stock option shall be exercisable at such time or times
during its term as may be determined by the Committee;
provided, however, that no option shall be exercisable later
than 10 years after the date of grant and no option shall be
exercisable earlier than six months and one day after the date
of grant.
Stock options granted hereunder shall be evidenced by a written agreement
between the Committee and each affected Participant. Any such agreement shall
identify the grant of the option as an incentive stock option or as a
nonqualified stock option.
6.3 Incentive Stock Options. In addition to the provisions of Section
6.2 hereof, each incentive stock option shall be subject to the following:
a. The aggregate Fair Market Value (determined as of the time the
option is granted) of the shares of Common Stock with respect
to which incentive stock options are exercisable for the first
time by any Participant during any calendar year (under all
plans of the Corporation), shall not exceed $100,000. If and
to the extent Fair Market Value exceeds $100,000, the
incentive stock option shall be treated as a nonstatutory stock
option.
b. Incentive stock options must be granted within 10 years from the
date on which this Plan is adopted.
c. Unless sooner exercised, all incentive stock options shall
expire no later than 10 years after the date of grant.
d. Incentive stock options granted to a Participant hereunder shall
be exercisable during his or her lifetime only by such
Participant.
e. No incentive stock option shall be granted to any Participant
who at the time such option is granted would own (within the
meaning of Section 422 of the Code) stock possessing more than
10% of the total combined voting power of all classes of stock
of the Corporation, determined in accordance with Section
422(b)(6) of the Code.
f. No incentive stock option shall be granted to any Participant
who is not an employee (within the meaning of Section 3401 of
the Code) of the Corporation or its Subsidiaries during the
period described under Section 422(a)(2) of the Code.
Any certificate or agreement evidencing an incentive stock option granted under
the Plan shall contain such other provisions as the Committee shall deem
advisable, but shall in all events be consistent with and contain all provisions
required in order to qualify the options as incentive stock options under
Section 422 of the Code.
6.4 Dividend Equivalents. The Committee, in its discretion, may grant
dividend equivalents in connection with an option granted hereunder. Dividend
equivalents may be granted in cash or in the form of Common Stock and shall be
subject to such additional terms and conditions as the Committee, in its sole
discretion, deems appropriate.
6.5 Manner of Exercise. A stock option may be exercised, in whole or in
part, by providing written notice to the Committee, specifying the number of
shares of Common Stock to be purchased and accompanied by the full purchase
price for such shares.
The option price shall be payable to the Corporation in the form of cash or
an equivalent, if permitted under the terms and conditions applicable to the
option, by delivery of previously acquired shares of Common Stock held by the
Participant, or in such other manner as may be authorized, from time to time, by
the Committee. Common Stock tendered to the Corporation in payment of the option
price shall be valued at its Fair Market Value at the date of
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exercise and shall be held by the Participant for at least six months prior to
tender. For this purpose, the holding period of shares of Common Stock acquired
upon the exercise of a stock option which are then tendered in consideration of
the option price shall be measured from the date on which the option was
granted.
A Participant or group of Participants may exercise stock options and sell
the shares of Common Stock acquired thereby pursuant to a brokerage or similar
arrangement and use the proceeds of any such sale as payment of the purchase
price of the shares.
As soon as practicable after the receipt of written notification or
exercise and payment of the option price in full, the Committee shall cause the
Corporation to deliver to the Participant, registered in the Participant's name,
certificates representing shares of Common Stock in the appropriate amount.
6.6 Equity Maintenance. If a Participant, while an Employee of the
Corporation or a Subsidiary, pays the option price by delivery of previously
owned shares of Common Stock, the Committee, in its discretion, may grant to
such Participant an additional option to purchase the number of shares of Common
Stock delivered by the Participant to pay the option price. Any such additional
option granted by the Committee shall be exercisable at Fair Market Value
determined as of the date on which such additional option is granted.
6.7 Rights as Stockholder. Prior to the issuance of shares of Common
Stock upon the exercise of a stock option, a Participant shall have no rights as
a stockholder with respect to the shares subject to such option.
SECTION 7
RESTRICTED STOCK
7.1 Special Definition. The term "restricted stock" means shares of
Common Stock which are sold or transferred by the Corporation to a Participant
at a price which may be below Fair Market Value, or for no payment, but
subject to restrictions on sale or other transfer by the Participant.
7.2 General Provisions. The Committee may grant shares of restricted
stock, in its discretion, subject to the following terms and conditions:
a. The number of shares to be transferred or sold by the
Corporation to a Participant as restricted stock shall be
determined by the Committee.
b. The Committee shall determine the price, if any, at which
shares of restricted stock shall be sold, which may vary from
time to time and which may be below the Fair Market Value of
such shares as of the date of sale.
c. All shares of restricted stock transferred or sold to a
Participant hereunder shall be subject to such terms,
conditions and restrictions for such period or periods as the
Committee, in its discretion, may determine (including,
without limitation, restrictions on transfer, forfeiture
provisions, and restrictions based upon the achievement of
specified performance objectives which may relate to the
Corporation, a Subsidiary, any unit, department or division of
the Corporation or a Subsidiary or any Participant or group of
Participants or Employees).
d. To the extent Restricted Stock granted hereunder is intended to
constitute Performance-Based Compensation, restrictions imposed
by the Committee shall consist of Performance Measures.
Each grant of restricted stock hereunder shall be evidenced by a written
agreement between the Committee and each affected Participant.
7.3 Enforcement of Restrictions. In order to enforce any restrictions
imposed by the Committee pursuant to Section 7.2 hereof a Participant receiving
restricted stock shall enter into an agreement with the Corporation setting
forth the conditions of the grant. Each certificate issued with respect to
restricted shares shall bear such legends as the Committee, in its sole
discretion, shall deem necessary or appropriate.
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The Committee, in its discretion, may require that shares of restricted
stock registered in the name of the Participant be deposited, together with a
stock power endorsed in blank, with the Corporation.
7.4 Lapse of Restrictions. At the end of any period during which the
shares of restricted stock are subject to forfeiture or restriction on transfer,
such restrictions shall lapse and a certificate representing the number of
shares of Common Stock with respect to which the restrictions have lapsed
shall be delivered to the Participant free of restriction, except as may be
imposed by applicable law or as provided herein.
7.5 Shareholder Rights. Subject to any restrictions or limitations
imposed by the Committee, each Participant receiving restricted stock hereunder
shall have the full voting rights of a stockholder with respect to such shares
during any period in which the shares are subject to forfeiture or restriction
on transfer.
During any period of restriction hereunder, dividends paid in cash or
property with respect to the underlying shares of restricted stock shall be paid
to the Participant currently, accrued by the Corporation as a contingent
obligation or converted to additional shares of stock, in the discretion of the
Committee. Notwithstanding the foregoing, if the grant of such restricted stock
is intended to comply with the Performance-Based Exception, the Committee may
impose such additional limitations on the receipt of dividends or similar
payments as the Committee deems necessary to ensure that such shares continue to
satisfy such exception.
SECTION 8
PERFORMANCE SHARES
8.1 Special Definition. The term "performance share" means the right to
receive or purchase (at a price which may be below Fair Market Value) Common
Stock upon the completion of certain performance objectives.
8.2 General Provisions. The Committee may grant performance shares, in
its discretion, subject to the following terms and conditions:
a. The number of shares granted to a Participant shall be
determined by the Committee.
b. Each performance share shall be subject to performance
objectives established by the Committee. Performance
objectives may relate to the Corporation, a Subsidiary, a
division, department or unit of the Corporation or a
Subsidiary or any Participant or group of Participants. Such
performance objectives shall be achieved during the period
designated by the Committee.
c. All performance shares shall be subject to such additional
restrictions for such period or periods as the Committee, in its
discretion, may determine.
d. The Committee, in its discretion, may establish a purchase
price for the acquisition of shares of Common Stock upon the
completion of the performance objectives, if any, which price
may be below Fair Market Value.
e. To the extent performance shares granted hereunder are intended
to constitute Performance-Based Compensation, the performance
objectives designated by the Committee shall consist of
Performance Measures.
Each grant of performance shares shall be evidenced by a written agreement
between the Committee and each affected Participant.
8.3 Satisfaction of Performance Objectives. If the performance
objectives designated by the Committee are achieved, each affected Participant
shall be paid in the manner designated by the Committee. Payment shall be made
in the form of (a) the number of shares of Common Stock equal to the number
of performance shares initially granted to that Participant, (b) the right
to purchase Common Stock at a price designated by the Committee, which price may
be below Fair Market Value, (c) a cash payment of the Fair Market Value of
Common Stock in an amount equal to the number of performance shares granted
to the Participant, or (d) a combination thereof.
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If such objectives are not satisfied due to circumstances that, in the
determination of the Committee, are outside the control of the Corporation or
the Participant, the Committee, in its discretion, may provide for payment in
full of the Incentive, lesser payment or cancellation; provided, however, that
with respect to Performance-Based Compensation, the exercise of such discretion
shall be subject to and consistent with the limitations set forth in Code
Section 162(m).
8.4 Not a Stockholder. The award of performance shares shall not entitle
a Participant to exercise the rights of a stockholder of the Corporation with
respect to such shares, until the transfer of shares of Common Stock with
respect to such award.
8.5 No Adjustments. No adjustment shall be made in performance shares
awarded to account for cash dividends paid or other rights issued to the holders
of Common Stock prior to the end of any period with respect to which performance
objectives are applicable.
8.6 Dividend Equivalent Payments. The Committee, in its discretion, may
award to a Participant granted performance shares hereunder dividend equivalent
payments or similar rights. If so granted, an adjustment shall be made in the
number of performance shares.
SECTION 9
PHANTOM SHARES
9.1 Special Definition. The term "phantom share" means a bookkeeping
entry to the credit of a Participant which represents a share of Common Stock.
9.2 Grants. Phantom shares shall be granted in the discretion of the
Committee, subject to the following terms and conditions.
a. The number of phantom shares granted to a Participant shall be
determined by the Committee.
b. The price for such shares, if any, shall be determined by the
Committee and may be less than the fair market value of Common
Stock at the time of grant.
c. Phantom shares shall be subject to such restrictions for such
time or times as the Committee shall determine.
Grants of phantom shares shall be evidenced by a written agreement between the
Committee and each affected Participant.
9.3 Phantom Share Account. Phantom shares granted to a Participant shall
be credited to "a phantom share account" established and maintained for such
Participant on the books and records of the Corporation. Such account shall be a
bookkeeping entry only and shall not require the Corporation or any Subsidiary
to segregate or otherwise earmark assets. No shares of Common Stock shall be
issued or issuable at the time a phantom share is credited to a Participant's
phantom share account.
An amount equal to dividends payable with respect to Common Stock
represented by the credit of phantom shares to a Participant's phantom share
account shall be credited to such account. Any stock dividend, stock split or
other recapitalization shall be reflected in the credits made to a Participant's
phantom share account. Notwithstanding the foregoing, if the grant of such
phantom shares is intended to constitute Performance-Based Compensation, the
Committee may impose such additional limitations on the receipt of dividends or
similar payments as the Committee deems necessary to ensure compliance with the
restrictions imposed under Section 162(m) of the Code.
9.4 Distribution from Phantom Share Account. All phantom shares granted
to a Participant shall be distributable in accordance with the terms and
conditions imposed by the Committee. When any such share is or becomes
distributable, the affected Participant shall be entitled to receive a
distribution from the Corporation in such form (which may include shares of
Common Stock, cash or a combination thereof) as the Committee shall determine.
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9.5 Not a Stockholder. The credit of phantom shares to a Participant
shall not entitle such Participant to exercise the rights of a stockholder of
the Corporation, until the issuance of shares of Common Stock with respect to
such credit.
SECTION 10
STOCK APPRECIATION RIGHTS
10.1 Special Definition. The term "stock appreciation right" or "SAR"
means a right to receive, without payment, shares of Common Stock, cash or a
combination thereof, determined in accordance with the provisions of this
Section 10. Stock appreciation rights granted hereunder may relate to an option
granted under the Plan (whether an outstanding option or an option granted
contemporaneous with the SAR) or stock appreciation rights may be granted
separately, without regard to any other Incentive.
10.2 General Provisions. All stock appreciation rights shall be granted
by the Committee, in its discretion, subject to the following general terms and
conditions:
a. Each SAR granted hereunder shall relate to the number of
shares of Common Stock determined by the Committee. Unless
otherwise provided by the Committee, if a SAR is granted in
tandem with an option, the number of shares of Common Stock to
which the SAR relates shall be reduced in the same proportion
that the option related to the SAR is exercised or the option
shall be reduced in the same proportion that the SAR is
exercised, as the case may be.
b. Subject to earlier termination as provided in Section 11.4
hereof, the term of each SAR shall be determined by the
Committee.
c. Each SAR granted hereunder shall be exercisable at such time or
times during its term as may be determined by the Committee;
provided, however, that no SAR shall be exercisable later than
10 years after the date of grant. Unless otherwise provided by
the Committee, each SAR granted in tandem with an option shall
be exercisable at such times, to the extent and upon such terms
and conditions as the stock option to which it relates is
exercisable.
Stock appreciation rights granted hereunder shall be evidenced by a written
agreement between the Committee and each affected Participant.
10.3 Exercise. A SAR may be exercised, in whole or in part, by giving
written notice to the Corporation, specifying the number of SARs that the holder
wishes to exercise. The date that the Corporation receives such written notice
shall be referred to herein as the "exercise date." The Corporation shall,
promptly after the exercise date, deliver to the exercising Participant
certificates for shares of Common Stock or cash or a combination thereof in an
amount determined in accordance with Section 10.4 hereof; provided, however,
that payment to an Insider may be delayed for any period necessary to comply
with the requirements of the Act.
10.4 Payment. Subject to the right of the Committee to deliver cash in
lieu of shares of Common Stock or for fractional shares, the number of shares of
Common Stock that shall be issuable upon the exercise of an SAR shall be
determined by dividing:
a. The number of shares of Common Stock as to which the SAR is
exercised, multiplied by the amount of the appreciation in such
shares; by
b. The Fair Market Value of a share of Common Stock on the exercise
date.
For this purpose, "appreciation" shall be the amount by which the Fair Market
Value of the shares of Common Stock subject to the SAR on the exercise date
exceeds (a) in the case of a SAR related to a stock option, the option price of
the shares of Common Stock subject to the option, or (b) in the case of a SAR
granted alone, without reference
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to a related stock option, an amount equal to the Fair Market Value of a share
of Common Stock on the date of grant.
SECTION 11
GENERAL
11.1 Adoption and Effective Date. This Plan will become effective upon its
approval by the affirmative vote of the holders of a majority of the Common
Stock of the Corporation at a meeting of its shareholders. Unless approved
within one year after the date of the Plan's adoption by the Board of Directors
of the Corporation, the Plan shall not be effective for any purpose. Prior to
the approval of the Plan by the shareholders of the Corporation, the Committee
may award Incentives hereunder, but if such approval is not received in the
specified period, then such awards shall be void and of no effect.
11.2 Duration. The Plan shall commence on its effective date and shall
remain in effect, subject to the right of the Board of Directors to amend or
terminate the Plan pursuant to Section 11.10 hereof, until all Incentives
granted under the Plan have been satisfied by the issuance of shares of Common
Stock or terminated and all restrictions imposed on shares of Common Stock in
connection with their issuance under the Plan have lapsed. No Incentive shall be
granted under the Plan after the 10th anniversary of the date on which the Plan
is approved by the Corporation's stockholders.
11.3 Transferability of Incentives. Except as expressly provided in this
Section 11.3, no Incentive granted hereunder may be transferred, pledged,
assigned, hypothecated, alienated or otherwise encumbered or sold by the holder
thereof whether by operation of law or otherwise and whether voluntarily or
involuntarily (except in the event of the holder's death by will or the laws of
descent and distribution) and neither the Committee nor the Corporation shall be
required to recognize any attempted assignment of such rights by any
Participant. During a Participant's lifetime, an Incentive may be exercised only
by the Participant or by the Participant's guardian or legal representative.
Notwithstanding the foregoing, the Committee, in its sole discretion, may
provide that any nonqualified option, restricted stock, performance share or
unit or SAR awarded hereunder may be transferred by a Participant to members of
such Participant's immediate family, any trust for the benefit of such family
members and/or partnerships whose partners are such family members, but such
transferees may not transfer such Incentives to third parties. For purposes of
this Section 11.3, the term "immediate family" shall have the meaning ascribed
to such term in Rule 16a-1(e) promulgated under the Act.
Each transferee shall be subject to the terms and conditions applicable to
the Incentive prior to such transfer and, prior to any transfer hereunder, each
such transferee and the related Participant shall enter into a written agreement
with the Committee acknowledging such terms and conditions, including, but not
limited to, the conditions with regard to the liability for payment of any and
all taxes, as well as any other restriction determined to be reasonably
necessary by the Committee. To the extent the Committee determines that any
transfer hereunder would result in the loss of the exemption provided under Rule
16b-3 of the Act or a similar provision, such transfer shall be deemed invalid.
11.4 Effect of Termination of Employment. In the event that a Participant
ceases to be an Employee of the Corporation or a Subsidiary on account of death,
disability, retirement or a voluntary or involuntary termination, other than for
cause (as defined below), an Incentive may be exercised or shall expire at such
times as may be determined by the Committee; provided, however, that any
extension of the exercise term shall not exceed the original exercise term of
the Incentive.
If a Participant's employment with the Corporation or a Subsidiary is
terminated for "cause," all rights of such Participant under any Incentive shall
expire, be terminated or forfeited, upon receipt by such Participant of notice
of such termination. In the event of forfeiture, stock certificates representing
such restricted stock shall be returned to the Corporation. For this purpose,
the term "cause" shall mean fraud, misappropriation of or intentional material
damage to the property or business of the Corporation or a Subsidiary or the
commission of a felony by a Participant.
If a Participant ceases to be an Employee of the Corporation or a
Subsidiary for any reason and the Participant then "competes" with the business
or operations of the Corporation or a Subsidiary, such Participant shall forfeit
any
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stock options not yet exercised, any restricted stock with respect to which the
restrictions have not yet lapsed and any credits to such Participant's phantom
share account. The Committee shall determine, in accordance with applicable law,
whether a Participant's activity constitutes competition for purposes of this
Section 11.4
11.5 Additional Legal Requirements. The obligation of the Corporation or
any of its Subsidiaries to deliver Common Stock to any Participant hereunder
shall be subject to all applicable laws, regulations, rules and approvals deemed
necessary or appropriate by the Corporation. Certificates for shares of Common
Stock issued pursuant to this Plan may be legended as the Committee shall deem
appropriate.
11.6 Adjustment. In the event of any merger, consolidation or
reorganization of the Corporation with any other corporation or corporations
which does not constitute a change in control within the meaning of Section 2.3
hereof, there shall be substituted for each of the shares of Common Stock then
subject to the Plan the number and kind of shares of stock or other securities
to which the holders of the shares of Common Stock will be entitled pursuant to
the transaction.
In the event of any recapitalization, stock dividend, stock split,
combination of shares or other change in the number of shares of Common Stock
then outstanding for which the Corporation does not receive consideration, the
number of shares of Common Stock then subject to the Plan shall be adjusted in
proportion to the change in outstanding shares of Common Stock. In the event of
any such substitution or adjustment, the purchase price of any option, the
performance objectives applicable to any Incentive, and the shares of Common
Stock issuable pursuant to any Incentive shall be adjusted to the extent
necessary to prevent the dilution or enlargement of any right granted hereunder,
determined in the discretion of the Committee.
11.7 Written Agreements. The terms of each Incentive shall be stated in a
plan or agreement approved by the Committee. Neither the Committee nor the
Corporation shall be required to grant any Incentive hereunder to any
Participant, unless such Participant executes such agreements or provides such
representations as the Committee deems appropriate.
11.8 Withholding. The Corporation shall have the right to withhold from
any payment made under the Plan or to collect as a condition of payment, any
taxes required by law to be withheld.
A Participant required to pay to the Corporation an amount required to be
withheld under applicable income tax laws in connection with a distribution of
Common Stock may satisfy this obligation, in whole or in part, by electing to
have the Corporation withhold from the distribution shares of Common Stock
having a Fair Market Value equal to the amount required to be withheld. The
value of the shares to be withheld shall be based on the Fair Market Value on
the date that the amount of tax to be withheld shall be determined. The
Committee may disapprove of any such election, may suspend or terminate the
right to make elections or may provide with respect to any Incentive that the
right to make elections shall not apply. Once delivered to the Committee, an
election shall be irrevocable. If a Participant is an Insider, then any such
election shall comply with such additional restrictions as may be imposed under
Rule 16b-3 promulgated under the Act.
11.9 No Continued Employment. No Participant under the Plan shall have
any right to continue in the employ of the Corporation or a Subsidiary for any
period of time or to any right to continue his or her present or any other rate
of compensation on account of participation in the Plan.
11.10 Amendment and Termination of the Plan. The Board of Directors of the
Corporation may amend or discontinue the Plan at any time, in its sole
discretion; provided, however, that no such amendment or discontinuance shall
materially change or impair, without the consent of each affected Participant,
an Incentive previously granted.
11.11 Immediate Acceleration of Incentives. Notwithstanding any provision
in the Plan or in any Incentive to the contrary and subject to any limitation
imposed with the Act, (a) the restrictions on all shares of restricted stock
awarded under the Plan shall immediately lapse, (b) all outstanding options
shall become exercisable immediately, (c) all credits to phantom share accounts
shall be immediately distributable, and (d) all performance objectives or other
restrictions on Incentives granted under the Plan shall be deemed to be
satisfied or lapsed and
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payment made immediately, upon the occurrence of a Change in Control.
11.12 Governing Law. The Plan and any Incentive granted under the Plan
shall be governed by the laws of the State of Louisiana.
11.13 Compliance with Section 162(m) of the Code. Incentives granted to a
Covered Employee hereunder shall comply with the requirements of Section 162(m)
of the Code, in addition to the terms and conditions of this Plan; provided,
however, that the Committee, in its sole discretion, may determine that such
compliance is not desired with respect to any specific Incentive granted or
awarded hereunder. In the event Section 162(m) of the Code (or the rules and
regulations promulgated thereunder) is modified, the Committee may modify or
amend the terms of this Plan or any Incentive granted hereunder to the extent
the Committee deems necessary or appropriate to comply with such section.
11.14 Other Benefits. Incentives granted to a Participant under the terms
of the Plan shall not impair or otherwise reduce such Participant's
compensation, life insurance or other benefits provided by the Corporation or
its Subsidiaries; provided, however, that the value of Incentives shall not be
treated as compensation for purposes of computing the value or amount of any
such benefit.
11.15 Deferral. If permitted by the Committee, a Participant may elect to
enter into a written agreement with the Corporation providing for the deferral
of any form of payment hereunder (whether in the form of cash or Common Stock),
subject to such terms and conditions as the Committee may deem appropriate.
THIS PLAN was adopted by the Board of Directors of Whitney Holding
Corporation on February 26, 1997, to be effective as of the time determined
under Section 11.1 hereof.
WHITNEY HOLDING CORPORATION
By: /s/ William L. Marks
------------------------------------------------
William L. Marks
Its:Chairman of the Board & Chief Executive Officer
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A-12
<PAGE>
[WHITNEY HOLDING CORPORATION LOGO]
March 18, 1997
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
The Annual Meeting of Shareholders of Whitney Holding Corporation (the
"Company") will be held on the eleventh floor, Pan-American Life Center, 601
Poydras Street, New Orleans, Louisiana, on Wednesday, April 23, 1997, at 10:30
a.m., for the purposes of considering and voting upon:
1. Election of directors.
2. Ratification of the selection of Arthur Andersen LLP as independent
public accountants to audit the books of the Company and its subsidiaries
for 1997.
3. Proposal to adopt the new 1997 Whitney Holding Corporation
Long-Term Incentive Plan.
4. Such other business as may properly come before the meeting or any
adjournments or postponements thereof.
The close of business on February 27, 1997, has been fixed as the
record date for determining shareholders entitled to notice of and to vote at
the meeting.
By order of the Board of Directors.
/s/ JOSEPH S. SCHWERTZ, JR.
JOSEPH S. SCHWERTZ, JR.
Secretary
- --------------------------------------------------------------------------------
228 St. Charles Avenue, New Orleans, Louisiana 70130
(Detach Proxy Form Here)
- --------------------------------------------------------------------------------
<PAGE>
P P
2. Ratification of the selection of Arthur Andersen LLP as independent
public accountants for 1997.
FOR AGAINST ABSTAIN
---- ---- ----
3. Proposal to adopt the new 1997 Whitney Holding Corporation
Long-Term Incentive Plan.
FOR AGAINST ABSTAIN
---- ---- ----
R R
When properly executed and returned, this proxy will be voted in the
manner specified thereon. If no manner is specified, the proxy will be
voted FOR proposals 1, 2 and 3.
Date , 1997.
----------------------------
---------------------------------------
SIGNATURE OF SHAREHOLDER
O O
NOTE: Please sign as your name appears
hereon. If shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give your
X full title as such. If a corporation, X
please sign in full corporate name by
authorized officer. If a partnership,
please sign in full partnership name by
authorized person. *The nomination of
Mr. Billups may be withdrawn as
described in the accompanying Proxy
Statement.
Y Y
<PAGE>
(Detach Proxy Form Here)
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WHITNEY HOLDING CORPORATION Solicited by the Board of Directors
P The undersigned hereby appoints Lloyd J. Abadie, Richard C. Hart and P
John A. Rehage, and each of them, proxies with full power of substitution,
to represent and to vote all shares of Common Stock of Whitney Holding
Corporation which the undersigned is entitled to vote at the Annual Meeting
of Shareholders of said corporation to be held on April 23, 1997 or any
adjournments or postponements thereof (1) as hereinafter specified upon the
proposals listed below and (2) in their discretion upon such other business
as may properly come before the meeting.
R R
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE FOLLOWING PROPOSALS:
1. Election of directors.
FOR all nominees listed below WITHHOLD authority to
(except as indicated to the vote for all nominees
O contrary below) listed below O
---- ----
Term expiring 2000: Mr. Camille A. Cutrone
Term expiring 2001: Mr. Alfred S. Lippman and Ms. Carroll W. Suggs
Term expiring 2002: Messrs. Guy C. Billups, Jr.* James M. Cain,
X Robert H. Crosby, Jr., Richard B. Crowell, and X
John K. Roberts, Jr.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the line below.)
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Y (Continued And To Be Signed On Other Side) Y
