March 9, 1998
Dear Fellow Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Hibernia Corporation at 10:00 a.m. Tuesday, April 21, 1998. A notice that
describes the items on which you may vote and a Proxy Statement are enclosed.
The meeting will be held at the Pan-American Life Center Auditorium, 11th
Floor, 601 Poydras Street, New Orleans, Louisiana. Free parking, on a limited
basis, will be available in the parking ramp at 601 Poydras Street (entrance on
Camp Street). If you park in this location, please bring your parking ticket
stub to the meeting so that it can be validated for you.
At the meeting you will be asked to:
. elect seven directors, each for a three-year term;
. approve an amendment to the Articles of Incorporation of the Company
to increase the number of shares of Class A Common Stock authorized
for issuance; and
. ratify the appointment of Ernst & Young LLP as independent auditors
for 1997. 1997.
Your Board of Directors recommends that you vote "FOR" each proposal.
Regardless of the number of shares you own, it is very important that you
vote them at the meeting. You may vote either in person or by proxy. Even if you
plan to attend the meeting, please take a moment now to sign, date and mail the
enclosed proxy in the postage-paid envelope so that your vote may be counted.
Thank you for your cooperation and continued support.
Sincerely,
/s/ STEPHEN A. HANSEL
Stephen A. Hansel
President
and Chief Executive Officer
PROXY
HIBERNIA CORPORATION
P. O. Box 61540 New Orleans, Louisiana 70161
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING, APRIL 21, 1998
The undersigned hereby appoints Susan Klein, Patricia C. Meringer and Gary
L. Ryan, or any of them (each with full power to act alone and with power of
substitution), proxies for the undersigned to vote all shares of Hibernia
Corporation (the "Company") that the undersigned is entitled to vote at the 1998
Annual Meeting of Shareholders of the Company. The 1998 Annual Meeting will be
held in the Auditorium of the Pan-American Life Center, 11th Floor, 601 Poydras
Street, New Orleans, Louisiana, at 10:00 a.m. on Tuesday, April 21, 1998. The
proxies may also vote these shares at any adjournment or postponement of the
1998 Annual Meeting, as indicated on the reverse of this proxy. In their
discretion, they may also vote these shares on such other matters as may
properly come before the meeting. The undersigned acknowledges receipt of the
Company's notice and accompanying Proxy Statement.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is given, this proxy will
be voted "FOR" the nominees named in Proposal 1 (including any substitute
nominee) and "FOR" Proposals 2 and 3. In addition, if any other business
properly comes before the 1998 Annual Meeting that requires a shareholder vote,
shares represented by signed proxy cards will be voted by the proxies listed
above in their discretion. All shareholders are encouraged to read the Proxy
Statement that accompanies this proxy card carefully for further information
concerning each of the Proposals.
PROPOSAL 1 TO ELECT DIRECTORS
NOMINEES TO SERVE UNTIL THE 2001 ANNUAL MEETING OF SHAREHOLDERS:
Robert H. Boh, J. Herbert Boydstun, E.R. "Bo" Campbell,
Richard A. Freeman, Jr., Stephen A. Hansel, Elton R. King,
and Dr. James R. Peltier
(a) ____ FOR
(b) ____ WITHHELD FOR ALL
INSTRUCTION: If you wish to withhold authority selectively to vote for any
individual nominee, strike a line through the nominee's name above:
PROPOSAL 2 TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION TO INCREASE
THE NUMBER OF SHARES OF CLASS A COMMON STOCK AUTHORIZED
FOR ISSUANCE FROM 200 MILLION TO 300 MILLION SHARES
(a) ____ FOR (b) ____ AGAINST (c) ____ ABSTAIN
PROPOSAL 3 TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS FOR HIBERNIA CORPORATION FOR 1998
(a) ____ FOR (b) ____ AGAINST (c) ____ ABSTAIN
IN YOUR DISCRETION FOR SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR
POSTPONEMENT THEREOF.
The undersigned hereby revokes all proxies heretofore
given in connection with the 1998 Annual Meeting.
PLEASE SIGN, DATE AND RETURN IN ENCLOSED ENVELOPE
Signature:__________________________ Dated: __________________ __, 1998
Note: Please sign exactly as name(s) appear(s) above. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
HIBERNIA CORPORATION
P. O. Box 61540
New Orleans, Louisiana 70161
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 21, 1998
TO HIBERNIA SHAREHOLDERS:
You are hereby notified that the Annual Meeting of Shareholders of
Hibernia Corporation (the "Company") will be held in the Auditorium of the
Pan-American Life Center, 11th Floor, 601 Poydras Street, New Orleans,
Louisiana, at 10:00 a.m. on Tuesday, April 21, 1998. The following matters will
be voted upon at the Meeting:
1. The election of seven persons to serve as Directors of the
Company until the 2001 Annual Meeting of Shareholders or until
their successors are elected and qualified;
2. The approval of an amendment to the Articles of Incorporation
of the Company to increase the number of shares of Class A Common
Stock of the Company authorized for issuance to 300,000,000; and
3. The ratification of the appointment of Ernst & Young LLP as
independent auditors for the Company for 1998.
In addition, any other business that properly comes before the meeting
or any adjournment or postponement thereof will be acted upon.
Shareholders of record at the close of business on February 27, 1998 are
entitled to notice of the Annual Meeting and to vote at the Annual Meeting. If
there is any adjournment or postponement of the Meeting, those shareholders of
record will be entitled to vote at the adjournment or postponement as well.
Please read the accompanying Proxy Statement carefully for further
information concerning the proposals that will be presented at the Annual
Meeting. We encourage you to read the Proxy Statement before you complete your
proxy card.
Please sign and date the enclosed proxy and return it in the envelope
provided as promptly as possible. You may revoke your proxy in the ways
described in the Proxy Statement.
By Order of the Board of Directors
/s/ PATRICIA C. MERINGER
Patricia C. Meringer
Secretary
New Orleans, Louisiana
March 9, 1998
TABLE OF CONTENTS
PROXY SOLICITATION AND VOTING OF PROXIES
Owners of 5% or More of the Company's Common Stock
How Proxies Will Be Voted
VOTING PROCEDURES
Election of Directors
Other Proposals
PROPOSAL NO. 1 ELECTION OF DIRECTORS
Your Directors
Directors Nominated to Serve Until the 2001 Annual Meeting
Directors Whose Terms Continue after the 1998 Annual Meeting
Board Meetings and Committees
Executive Compensation and Benefits
Annual Compensation
Stock Option and Stock Appreciation Rights ("SAR's") Grants
Long-Term Incentive Plan Awards
Compensation of Directors
Employment Agreements and Change of Control Arrangements
Additional Information with Respect to Compensation Committee Interlocks
and Insider Participation in Compensation Decisions
Report of the Executive Compensation Committee
Stock Performance Graph
Transactions with Related Parties
Indebtedness of Related Parties
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Vote Required and Recommendation
PROPOSAL NO. 2 AMENDMENT OF THE ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF SHARES OF CLASS A COMMON
STOCK AUTHORIZED
Board of Directors Approval and Vote
Vote Required and Recommendation
PROPOSAL NO. 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Vote Required and Recommendation
SOLICITATION OF PROXIES
SHAREHOLDER PROPOSALS
OTHER MATTERS
ANNUAL REPORT
CERTAIN DEFINITIONS
We have capitalized certain terms and used them in this Proxy Statement for
ease of reference . Those terms and their definitions are included below:
Banks: Hibernia National Bank and Hibernia National Bank of Texas,
subsidiaries of the Company
Board or Board of Directors: the Board of Directors of Hibernia Corporation
Company or Hibernia: Hibernia Corporation
Common Stock: Class A Common Stock of Hibernia Corporation
Executives: the five executive officers of Hibernia included in the Summary
Compensation Table and for whom compensation information is included in this
Proxy Statement (Messrs. Hansel, Boydstun, Domingos, Flurry and Wright)
Annual Meeting or Meeting: the 1998 Annual Meeting of Shareholders of
Hibernia Corporation
Record Date: February 27, 1998, the date on which an individual must be a
shareholder of record of the Company to be entitled to notice of and to vote at
the Meeting
Director: a member of the Board of Directors of the Company
HIBERNIA CORPORATION
P. O. Box 61540
New Orleans, Louisiana 70161
------------------
PRELIMINARY PROXY STATEMENT
------------------
ANNUAL MEETING OF SHAREHOLDERS
April 21, 1998
PROXY SOLICITATION AND VOTING OF PROXIES
Your proxy is solicited by the Board of Directors of Hibernia Corporation
for use at its 1998 Annual Meeting of Shareholders to be held at 10:00 a.m. on
Tuesday, April 21, 1998 in the Auditorium of the Pan-American Life Center, 11th
Floor, 601 Poydras Street, New Orleans, Louisiana and any adjournment or
postponement thereof. This Proxy Statement is being furnished in connection with
the Annual Meeting.
Only shareholders of record as of the close of business on February 27,
1998 are entitled to notice of and to vote at the Annual Meeting or any
adjournment or postponement thereof. As of that date there were ___________
shares of Class A Common Voting Stock, no par value (the "Common Stock") issued,
and outstanding, and no shares of Common Stock held in the Company's treasury.
The Common Stock is the only class of outstanding voting securities. Each share
is entitled to one vote on all matters to come before the Meeting.
Owners of 5% or More of the Company's Common Stock
To the best knowledge of the Board of Directors, there was only one
shareholder that beneficially owned more than 5% of the Company's outstanding
Common Stock as of the Record Date. Information about that shareholder and its
ownership interest in the Company is included below for your information.
The Prudential Insurance Company of America ("Prudential") filed a Schedule
13G with the Securities and Exchange Commission ("SEC") on September 9, 1993 and
amended that Schedule on February 10, 1998 stating that, as of December 31,
1996, Prudential beneficially owned more than 5% of the Company's outstanding
Common Stock. Prudential's filing states that it beneficially owned 8,161,645
(6.25%) shares of the Company's Common Stock at that time. These amounts include
the shares owned by Jennison discussed below). Prudential holds the Common Stock
reflected in this filing primarily through separate accounts, externally managed
accounts, registered investment companies, subsidiaries and/or affiliates.
Jennison Associates Capital Corp., a subsidiary of Prudential ("Jennison"), has
filed a separate Schedule 13G, which was amended on February 10, 1998 and
indicated that Jennison beneficially owned 8,138,100 shares (6.23%) of the
Company's Common Stock at that time. All of these shares are included in the
shares disclosed in Prudential's Schedule 13G. Both filings certify that those
securities were acquired in the ordinary course of its business and not with the
purpose or effect of changing or influencing the control of the Company.
Shareholders should note that the percentages of ownership listed in these
filings (16.25% for Prudential and 6.23% for Jennison) are slightly higher than
the actual ownership percentages of these two companies at year-end 1997. Based
upon shares of Common Stock outstanding on December 31, 1997, Prudential's
ownership on that date was 6.14% and Jennison's was 6.12%. Prudential's mailing
address is Prudential Plaza, Newark, New Jersey 07102-3777.
The approximate date of mailing of this Proxy Statement and the
accompanying form of proxy is March 9, 1998.
How Proxies Will Be Voted
If a shareholder specifies in his proxy how his shares should be voted and
his proxy is properly executed and received prior to the Annual Meeting, the
shares represented by that proxy will be voted as specified. If a shareholder
makes no specification, the proxy will be voted FOR the election of the nominees
listed herein under "Election of Directors" and in favor of Proposals 2 and 3.
If any other matters are considered at the Meeting, proxies will be voted by the
proxy holder in his or her discretion.
If a proxy is marked "Abstain" as to any proposal, the shares represented
by that proxy will not be considered a vote in favor of or against the proposal
so marked. Broker nonvotes (in which brokers fail to vote shares on behalf of
beneficial owners) will not be treated as present or represented at the Meeting.
A proxy may be revoked by written notice to the Secretary of the Company. A
proxy may also be revoked by delivering a properly executed proxy that is dated
later than the previous proxy, at any time prior to the time the original proxy
is voted. A proxy may also be revoked by a shareholder who attends and votes in
person at the Meeting.
VOTING PROCEDURES
Election of Directors
Directors are elected by a plurality of the votes of the shares present in
person or represented by proxy at the Annual Meeting. The seven nominees
receiving the most votes will be elected as directors of the Company, each to
serve a three-year term. Only shares that are voted in favor of a particular
nominee will be counted toward that nominee's achievement of a plurality. Shares
present at the Meeting that are not voted for a particular nominee or shares
present by proxy as to which the shareholder properly withheld authority to vote
for the nominee (including broker nonvotes) will not be counted toward the
nominee's achievement of a plurality.
Other Proposals
For purposes of the Annual Meeting, the affirmative vote of the majority of
the shares of Common Stock present in person or represented by proxy at the
meeting for a particular matter is required for the matter (other than the
election of directors) to be deemed an act of the shareholders. With respect to
abstentions, the shares are considered present at the meeting for the proposal,
but, because they are not affirmative votes for approval of the proposal, they
will have the same effect as votes cast against the proposal. With respect to
broker nonvotes, the shares are not considered present at the Annual Meeting for
the proposal as to which the broker withheld authority. Consequently, broker
nonvotes are not counted with regard to the proposal, but they have the effect
of reducing the number of affirmative votes required to approve the proposal,
because they reduce the total number of shares present or represented, from
which a majority is calculated.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
You are being asked to elect seven individuals as Directors. These
individuals will serve as Directors of the Company until the 2001 Annual Meeting
of Shareholders or until their respective successors have been duly elected and
qualified, if they are elected by the shareholders.
The Board of Directors has fixed the number of Directors at 20. The Board
is divided into three approximately equal classes with terms expiring in
successive years. When Mr. Shackelford retires at the Annual Meeting, the number
of Directors will be reduced to 19.
The individuals who have been nominated for election at the Annual Meeting
are listed below under the caption "Directors Nominated to Serve Until the 2001
Annual Meeting of Shareholders". All of these persons are currently Directors of
the Company. All of these individuals except Dr. James R. Peltier were elected
by the shareholders at previous annual meetings.
If any nominee for election as a Director is unable or unwilling to serve,
the persons named in the accompanying proxy will vote for the other nominees and
any substitute nominees as may have been nominated by the Board of Directors.
The Board has no reason to believe that any nominee will be unable or unwilling
to serve.
The information included below also contains biographical and other data
concerning Directors whose terms of office continue after the 1998 Annual
Meeting.
A Director who has attained the age of 71 is generally required by the
Bylaws to retire at the next Annual Meeting of Shareholders. Under certain
circumstances the Board of Directors may permit a Director to remain in office
beyond that time and until expiration of his term as a Director.
Mr. Shackelford has reached the age of 71 and will retire as a Director as
of the Annual Meeting.
Your Directors
Directors Nominated to Serve Until the 2001 Annual Meeting
Robert H. Boh, age 67, is the Chairman of the Board and has served Hibernia as a
Director since 1968. Mr. Boh is also Chairman and former President and Chief
Executive Officer of Boh Bros. Construction Co., LLC and Boh Company, LLC,
construction companies headquartered in New Orleans. Mr. Boh is also a director
of Tidewater Inc.
J. Herbert Boydstun, age 51, is Chairman of the Southwest Region for Hibernia
Corporation and Hibernia National Bank. From 1982 to 1994, Mr. Boydstun served
as the President and a Director of First National Bank of West Monroe and its
holding company, First Bancorp of Louisiana, Inc., which Hibernia acquired by
merger in 1994. Mr. Boydstun has been a Director of the Company since 1994.
E. R. "Bo" Campbell, age 57, is the Vice Chairman of the Board and the Chairman
of the Northern Region for Hibernia Corporation and Hibernia National Bank. From
1977 to 1992, Mr. Campbell served as President, and from 1992 to 1994, Chairman
of the Board, of Pioneer Bank & Trust Company (Shreveport) and its holding
company, Pioneer Bancshares Corporation, which Hibernia acquired by merger in
1994. Mr. Campbell has been a Director of the Company since 1994.
Richard W. Freeman, Jr., age 59, has served as a member of the Company's Board
since 1981. Mr. Freeman is the proprietor of the Oak Hill Ranch, which engages
in livestock ranching.
Stephen A. Hansel, age 50, is the President and Chief Executive Officer of
Hibernia Corporation and Hibernia National Bank. Mr. Hansel has held that
position since 1992, when he joined Hibernia and its Board of Directors.
Elton R. King , age 51, is Group President - Network & Technology and a director
of BellSouth Telecommunications, Inc., a public utility headquartered in
Atlanta, Georgia. Mr. King joined Hibernia's Board in 1994.
Dr. James R. Peltier, age 67, is the newest member of Hibernia's Board, having
been elected in February 1998. Dr. Peltier practices oral and maxofacial surgery
in Thibodaux, Louisiana and formerly served as the Chairman of the board of
directors of ArgentBank, which Hibernia acquired by merger earlier this year.
Directors Whose Terms Continue After the 1998 Annual Meeting
Directors Whose Terms Continue Until the 1999 Annual Meeting of Shareholders
Robert T. Holleman, age 67, is an independent geologist serving the oil and gas
exploration industry. Mr. Holleman is also the Chairman of CamAm Industries,
USA, Ltd. and Chairman of Hibernia National Bank's Lafayette City Board of
Directors. Mr. Holleman has served as a Director of Hibernia since 1986.
Sidney W. Lassen, age 63, is the Chairman of the Board and Chief Executive
Officer of Sizeler Realty Co., Inc., a public company engaged in shopping center
development and Sizeler Property Investors, Inc., an affiliated real estate
investment trust. Mr. Lassan has served as a Director of Hibernia since 1985.
William C. O'Malley, age 61, is the Chairman of the Board, President and Chief
Executive Officer of Tidewater Inc., a public offshore marine transportation,
shipyard facilities and containerized shipping company headquartered in New
Orleans. Mr. O'Malley joined the Hibernia Board in 1995.
Janee M. "Gee" Tucker, age 51, is the President and Chief Operating Officer of
Tucker and Associates, Inc., a management consulting firm headquartered in New
Orleans. Ms. Tucker joined the Hibernia Board in 1995.
Directors Whose Terms Continue Until the 2000 Annual Meeting of Shareholders
J. Terrell Brown, age 58, is the President, Chief Executive Officer and a
director of United Companies Financial Corporation, a public financial services
company headquartered in Baton Rouge, Louisiana. Mr. Brown is also a director of
Sizeler Properties, Inc. Mr. Brown has served as a Director of Hibernia since
1986.
Dick H. Hearin, age 63, is the Managing Partner of Hearin Properties, which
engages in real estate investments and is headquartered in Baton Rouge. Mr.
Hearin has served on the Hibernia Board since 1986.
Laura A. Leach, age 58, is the Secretary-Treasurer and a director of Sweet Lake
Land & Oil Company, Inc., which is headquartered in Lake Charles, Louisiana and
engages in agriculture and land management and oil and gas production. Ms. Leach
was formerly a member of the Board of Directors of Calcasieu Marine National
Bank, which Hibernia acquired by merger in 1996. Ms. Leach joined the Hibernia
Board after that merger in 1996.
James R. Murphy , age 63, is the Chairman of Hibernia National Bank of Texas
(formerly The Texarkana National Bank). From 1986 to 1996, Mr. Murphy served as
Chairman of The Texarkana National Bank and its holding companies, Texarkana
National Bancshares, Inc. and TNB Holding Company. Mr. Murphy joined the
Hibernia Board in 1997 following the merger of Texarkana National Bancshares
into the Company.
Donald J. Nalty, age 64, is the Vice Chairman of Corporate Development for
Hibernia Corporation and Hibernia National Bank. Mr. Nalty has served on
Hibernia's Board since 1966.
Robert T. Ratcliff, age 55, is the President and Chief Executive Officer of
Ratcliff Construction Company, Inc., a commercial and industrial construction
company headquartered in Alexandria, Louisiana. Mr. Ratcliff is also a director
of Central Louisiana Electric Company, Inc. Mr. Ratcliff joined the Hibernia
Board in 1994.
Virginia E. Weinmann, age 68, is the proprietor of Waverly Enterprises, an
investment firm headquartered in New Orleans. Ms. Weinmann rejoined the Hibernia
Board in 1994, after having served as a Director from 1977-1989.
Robert E. Zetzmann, age 69, engages primarily in managing properties and
investments. Mr. Zetzmann formerly served as President of Zetz 7-Up Bottling
Co., Inc., a manufacturer and distributor of carbonated beverages. Mr. Zetzmann
has served as a Director of Hibernia since 1965.
Beneficial Ownership of Stock by Directors and Executives
The following table shows the amount of Common Stock beneficially owned by
each Director and Executive. The table also shows the total number of shares
owned by all directors and executive officers of Hibernia.
<TABLE>
<CAPTION>
STOCK OWNERSHIP TABLE
<S> <C> <C> <C>
EXERCISABLE PERCENT OF
NAME COMMON STOCK(1) STOCK OPTIONS(2) OUTSTANDING STOCK
Robert H. Boh 86,578(3) 18,321 *
J. Herbert Boydstun 471,828(4) 40,000 *
J. Terrell Brown 14,880(5) 18,321 *
E. R. "Bo" Campbell 4,445,130(6) 6,250 3.01%
Richard W. Freeman, Jr. 43,849 18,321 *
Stephen A. Hansel 151,223(7) 1,854,942 1.36%
Dick H. Hearin 77,114(8) 18,321 *
Robert T. Holleman 43,577 18,321 *
Elton R. King 4,447(9) 11,250 *
Sidney W. Lassen 242,438(10) 16,766 *
Laura A. Leach 6,581 0 *
James R. Murphy 344,898(11) 0 *
Donald A. Nalty 106,440(12) 90,086 *
William C. O'Malley 2,848 7,500 *
James R. Peltier 332,395(13) 0 *
Robert T. Ratcliff 7,949(14) 16,250 *
Duke Shackelford 1,279 7,500 *
Janee M. "Gee" Tucker 26,028(15) 16,250 *
Virginia E. Weinmann 189,960 18,321 *
Robert E. Zetzmann
Certain Executive Officers
Stephen A. Hansel **
K. Kirk Domingos III 19,765(16) 80,781 *
J. Herbert Boydstun **
Bob Flurry 32,077(17) 33,750 *
Richard G. Wright 7,141(18) 85,000 *
Total 6,658,425 2,376,251
All Directors, Nominees
and Named Executives
As a Group (22 persons) 9,034,676 6.11%
</TABLE>
* Less than 1 percent
** Messrs. Hansel and Boydstun are also Directors; see listing elsewhere.
*** Calculated based upon the actual number of shares outstanding on March 1,
1998 plus the shares subject to currently exercisable options.
1. Except as otherwise indicated, stock ownership information is given as
of March 1, 1998 and includes shares that the individual has the right to
acquire within 60 days of the date of this Proxy Statement. Information relating
to shares held in employee benefit plans of the Company is as of December 31,
1997.
2. For purposes of this table, options are exercisable if they are exercisable
within 60 days of the date of this Proxy Statement.
3. Includes 15,742 shares owned by Mr. Boh's wife as to which he disclaims
beneficial ownership.
4. Includes 2,196 shares credited to Mr. Boydstun as of December 31, 1997 under
the Company's Retirement Security Plan and 651 shares credited as of December
31, 1997 under the Company's Employee Stock Ownership Plan. Also includes 2,500
shares held as custodian for Mr. Boydstun's daughter, 2,500 shares held as
custodian for Mr. Boydstun's son and 2,500 shares held by Jennifer Boydstun, a
dependent of Mr. Boydstun.
5. Includes 14,166 shares owned by a corporation as to which Mr. Brown shares
voting and investment power.
6. Includes 4,610 shares credited to Mr. Campbell as of December 31, 1997 under
the Company's Retirement Security Plan, 651 shares credited as of December 31,
1997 under the Company's Employee Stock Ownership Plan, 900,000 shares held in
Campbell Capital, L.L.C. and 1,327,100 shares held by family members over which
Mr. Campbell has voting power only.
7. Includes 35,741 shares held by Mr. Hansel's former spouse. Also includes
7,696 shares credited to Mr. Hansel as of December 31, 1997 under the Company's
Retirement Security Plan, 651 shares credited as of December 31, 1997 under the
Company's Employee Stock Ownership Plan, 400 shares held as custodian for Mr.
Hansel's children and 48,860 shares of restricted stock over which Mr. Hansel
has sole voting power and limited dispositive power.
8. Includes 386 shares held by a corporation of which Mr. Hearin is President
and as to which he has sole voting and investment power. Also includes 1,584 and
20,932 shares held in trusts of which Mr. Hearin is co-trustee with Hibernia
National Bank. Mr. Hearin disclaims beneficial ownership of the shares held in
those trusts.
9. Includes 1,226 shares held in a KEOGH Plan of which Mr. King is the
administrator.
10. Includes 4,703 shares and 4,902 shares, respectively, held by each of two
trusts of which Mr. Lassen is a trustee and as to which he has sole voting
power. Mr. Lassen disclaims beneficial ownership of the shares held by these
trusts. Also includes 5,491 shares owned by Mr. Lassen's wife as to which he
disclaims beneficial ownership, 71,088 shares beneficially owned by a limited
liability company of which Mr. Lassen is the operating manager and in which his
wife owns an approximate 26% interest and 71,088 shares beneficially owned by a
limited partnership of which Mr. Lassen is the manager of the general partner
and in which Mr. Lassen's wife owns an interest of approximately 27%.
11. Includes 10,000 shares owned by Mr. Murphy's wife as to which he disclaims
beneficial ownership and 34,201 shares credited to Mr. Murphy as of December 31,
1997 under the Texarkana National Bancshares Inc. Employee Stock Ownership Plan.
12. Includes 44,337 shares credited to Mr. Nalty as of December 31, 1997 under
the Company's Retirement Security Plan, 5,157 shares credited as of December 31,
1997 under the Pension Equalization Plan, 651 shares credited as of December 31,
1997 under the Company's Employee Stock Ownership Plan, and 6,601 shares of
restricted stock over which Mr. Nalty has sole voting power and limited
dispositive power.
13. Includes 1,632 shares owned by Dr. Peltier's wife as to which he disclaims
beneficial ownership and 61,513 shares owned by an adult child for which he has
Power of Attorney.
14. Includes 6,630 shares owned by a corporation of which Mr. Ratcliff is
president and chief executive officer.
15. Includes 7,727 shares owned by Mrs. Weinmann's husband as to which she
disclaims beneficial ownership.
16. Includes 105 shares held as custodian for Mr. Domingos' daughter and 96
shares held as custodian for Mr. Domingos' son. Also includes 6,912 shares
credited to Mr. Domingos as of December 31, 1997 under the Company's Retirement
Security Plan, 651 shares credited as of December 31, 1997 under the Company's
Employee Stock Ownership Plan and 10,000 shares of restricted stock over which
Mr. Domingos has voting power and limited dispositive power.
17. Includes 9,400 shares held as custodian for Mr. Flurry's children. Also
includes 2,226 shares credited to Mr. Flurry as of December 31, 1997 under the
Company's Retirement Security Plan and 651 shares credited as of December 31,
1997 under the Company's Employee Stock Ownership Plan.
18. Includes 13 shares credited to Mr. Wright as of December 31, 1997 under the
Company's Retirement Security Plan and 651 shares credited as of December 31,
1997 under the Company's Employee Stock Ownership Plan.
Board Meetings and Committees
Number of Meetings and Membership on Committees
The Hibernia Board had the following committees during 1997:
. Executive (2 meetings)
. Audit (4 meetings)
. Executive Compensation (6 meetings)
. Board Governance ( 3 meetings)
. Credit (4 meetings)
. Trust (3 meetings)
The functions of each of these committees is described in detail below. The
following table shows the committees on which each member of the board of
directors serves.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
NAME BOARD EXECUTIVE AUDIT EXECUTIVE BOARD CREDIT TRUST
COMPENSATION GOVERNANCE
Robert H. Boh * *
J. Herbert Boydstun X X X
J. Terrell Brown X X X *
E. R. "Bo" Campbell ** X X *
Richard W. Freeman, Jr. X X X X
Stephen A. Hansel X X
Dick H. Hearin X X X
Robert T. Holleman X X X
Elton R. King= X X X * X
Sidney W. Lassen X X X
Laura A. Leach X X X
James A. Murphy X X X
Donald A. Nalty X X X
William C. O'Malley+ X X * X
Dr. James A. Peltier X
Robert T. Ratcliff X X X
Duke Shackelford X X X
Janee M. "Gee" Tucker X X X
Virginia E. Weinmann X X X
Robert E. Zetzmann X X X *
</TABLE>
* - Chairman
** - Vice Chairman
= - Mr. King became Chairman of the Executive Compensation Committee upon
Mr. James H. Stone's retirement at the Annual Meeting.
+ - Mr. O'Malley became Chairman of the Audit Committee upon Mr. Hugh J.
Kelly's retirement at the 1997 Annual Meeting.
Functions of the Committees of the Board
The Executive Committee has all of the power and authority of the Board
of Directors except any power and authority that has been delegated to another
committee of the Board or that may not by law be delegated to a committee of a
board of directors.
The Audit Committee of the Company performs the following functions:
. supervises the Company's internal audit function and general auditor;
. directs an examination of the Company's affairs at least annually; and
. reviews regulatory examination reports on the Company and its subsidiaries,
internal audit reports and audit reports issued by the Company's independent
auditors.
The Executive Compensation Committee, among other things, serves the
following functions:
. reviews and recommends salaries, bonuses and other compensation of certain
officers of the Company and its subsidiaries,
. reviews and approves compensation plans and policies for employees of the
Company and its subsidiaries;
. administers the Company's executive compensation plans;
. supervises compliance by the Company and its subsidiaries with laws and
regulations relating to the hiring, promotion and welfare and benefits of
employees of the Company and its subsidiaries; and
. recommends management development and succession plans for the Company and its
subsidiaries.
The Board Governance Committee, among other things, serves the following
functions:
. screens and recommends potential candidates for membership on the Board;
. recommends terms of office for Directors and the number of Directors to
comprise the full Board;
. recommends retirement policies for nonemployee directors, reviews the
performance of Directors;
. monitors the orientation process for new Directors; and
. reviews and recommends modifications to the Company's system of
compensation for Directors.
The Credit Committee oversees the lending and credit functions of the
Company's banking subsidiaries. The Committee's responsibilities include, among
other things:
. review and approval of the overall credit policies and procedures of the
Banks;
. review and approval of lending authorities and exceptions; and
. review and approval of the policy and methodology for the Reserve for Possible
Loan Losses and certain aspects of the Banks' strategic plans (subject to
approval by the Boards of Directors of the Banks).
The Trust Committee exercises general oversight of the Trust activities
of the Banks.
Board Meetings and Attendance
During 1997, there were nine meetings of the Company's Board of
Directors. All of the Company's directors except Mr. Hearin attended at least
75% of the aggregate number of meetings of the Board of Directors and of the
committees of which they were members during the year.
Executive Compensation and Benefit Plans
Annual Compensation
The following table sets forth certain information regarding the
compensation paid by the Company and its subsidiaries to the Executives. The
table includes compensation paid to or earned by these individuals during 1997.
The table includes Mr. Hansel, the Chief Executive Officer, and each of the four
most highly compensated executive officers of the Company other than Mr. Hansel.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation Awards
<S> <C> <C> <C> <C> <C> <C>
(i)Name and Principal Position Year Salary Bonus Securities Underlying LTIP Payouts All Other Compensation
Options/SARs Awarded (i) (ii)
(#)
Stephen A. Hansel (iii) 1997 $570,000 $502,884 125,000 0 $270,184
President and Chief 1996 500,000 250,000 125,000 0 278,501
Executive Officer 1995 500,000 468,000 125,000 $335,913 40,382
J. Herbert Boydstun (iv) 1997 $215,000 $135,000 45,000 0 $ 71,523
Chairman/Southwest Region 1996 200,000 140,000 35,000 0 72,882
1995 170,000 80,000 30,000 0 7,500
K. Kirk Domingos III (v) 1997 $240,000 $135,000 40,000 0 $147,860
Senior Executive Vice President 1996 190,000 120,000 35,000 0 151,486
1995 180,000 75,000 40,000 100,774 20,536
B. D. Flurry (vi) 1997 $190,000 $110,000 40,000 0 $ 96,791
Chairman/Northern Region 1996 186,000 120,000 30,000 0 106,155
1995 186,000 75,000 25,000 0 7,500
Richard G. Wright (vii) 1997 $200,000 $ 80,000 45,000 0 $52,375
Senior Executive Vice 1996 165,000 120,000 40,000(viii) 0 53,275
President Chief 1995 135,000 75,000 30,000 67,183 7,500
</TABLE>
(i) The value of restricted shares awarded upon payout of the Company's
1993-94 Performance Share Awards Plan based upon a closing price on the day of
grant of $6.875 per share.
(ii) For each Executive, includes in 1997 a contribution in the amount of
$8,000 made by the Company on behalf of the Executive to its 401(k) plan, the
Retirement Security Plan ("RSP") and a contribution in the amount of $4,400 made
by the Company to its Employee Stock Ownership Plan ("ESOP") on behalf of the
Executive. For 1996 and 1995, includes a contribution of $7,500 made by the
Company to the RSP on behalf of each Executive and for 1996, includes a
contribution in the amount of $4,495 to the ESOP on behalf of each Executive.
(iii) For 1997 and 1996, includes in "All Other Compensation", the amount
of premiums paid by the Company during the year for two life insurance policies
($50,793 and $51,662 for the first policy and $35,605 and $45,411 for the second
policy, respectively) and the actuarial values of two split-dollar life
insurance policies provided by the Company to Mr. Hansel ($33,690 and $35,411
for the first and $31,609 and $33,249 for the second, respectively). For 1995,
includes in "All Other Compensation" contributions made by the Company on behalf
of Mr. Hansel to the RSP ($7,500 in each year), the amount of premiums paid by
the Company on a split-dollar life insurance policy provided by the Company to
Mr. Hansel ($45,244) and the actuarial value of that policy ($32,882). For 1997
and 1996, "All Other Compensation" also includes the Company's contribution to
the Non-qualified Deferral Plan ($31,833 in 1997 and $69,361 in 1996) and the
Supplemental Stock Compensation Plan ($34,654 for 1997 and $21,346 for 1996 in
the ESOP match account). Also, for 1996, "All other Compensation" includes the
Company's contribution to the Non-qualified Target Benefit Plan ($10,066).
(iv) For 1997 and 1996, "All Other Compensation" also includes the
Company's contribution to the Non-qualified Deferral Plan ($9,499 in 1997 and
$8,910 in 1996) and the Supplemental Stock Compensation Plan ($6,021 in 1997 and
$1,577 in 1996). For 1997 and 1996, includes in "All Other Compensation" the
amount of premiums paid by the Company during the year for a split-dollar life
insurance policy ($26,594 and $26,920) and the actuarial values of that life
insurance policy ($17,009 and $17,855). Also, for 1996, "All Other Compensation"
includes the Company's contribution to the Non-qualified Target Benefit Plan
($5,625).
(v) For 1997 and 1996, "All Other Compensation" also includes the Company's
contribution to the Non-qualified Deferral Plan ($8,333 in 1997 and $7,703 in
1996) and the Supplemental Stock Compensation Plan ($4,606 in 1997 and $3,790 in
1996). For 1997 and 1996, includes in "All Other Compensation" the amount of
premiums paid by the Company during the year for two split-dollar life insurance
policies ($54,959 and $55,451 for the first policy, respectively, and $22,206
and $24,031 for the second policy, respectively) and the actuarial values of
those policies ($33,756 and $35,465 respectively for the first policy and
$11,600 and $13,051 respectively for the second policy). For 1995, includes in
"All Other Compensation" the amount of premiums paid by the Company on a
split-dollar life insurance policy ($24,264), and the actuarial value of that
policy in that year ($13,036).
(vi) Mr. Flurry joined the Company in January 1995 and became an executive
officer in February, 1996. For 1997 and 1996, "All Other Compensation" includes
the Company's contribution to the Non-qualified Deferral Plan ($7,433 in 1997
and $7,759 in 1996) and the Supplemental Stock Compensation Plan ($4,417 in 1997
and $1,047 in 1996). For 1997 and 1996, includes in "All Other Compensation" the
amount of premiums paid by the Company during the year for a split-dollar life
insurance policy ($44,939 and $45,369) and the actuarial values of that policy
($27,602 and $29,017). Also, for 1996, "All Other Compensation" includes the
Company's contribution to the Non-qualified Target Benefit Plan ($10,968).
(vii) For 1997 and 1996, "All Other Compensation" includes the Company's
contribution to the Non-qualified Deferral Plan ($6,896 in 1997 and $4,393 in
1996) and the Supplemental Stock Compensation Plan ($3,152 in 1997 and $1,352 in
1996). Also, for 1996, "All Other Compensation" includes the Company's
contribution to the Non-qualified Target Benefit Plan ($4,849).
(viii) Includes a grant of 5,000 shares upon Mr. Wright's promotion in May
of 1996.
Stock Option and Stock Appreciation Rights ("SARs") Grants
The Company granted stock options to each of the Executives during 1997.
The Company also granted stock options to approximately 700 other employees
during the year. The Executive Compensation Committee determined the number of
options that were granted to Mr. Hansel. All of the Executives (including Mr.
Hansel) and employees who received stock options were granted options under the
Long-Term Incentive Plan. All of these stock options have vesting schedules that
permit exercise of 50% of the shares to which the options relate two years after
the date of grant, an additional 25% of the shares three years after the date of
grant and the remaining shares four years after the date of grant. The options
terminate ten years after their date of grant if they have not been previously
exercised. In addition, the options become immediately exercisable as to all
shares to which they relate upon certain changes of control of the Company. No
change of control for this purpose has occurred as of the date of this Proxy
Statement. All of the stock options granted to all employees during 1997 were
nonqualified stock options.
The Company has not granted any SARs in connection with any outstanding
options and did not grant any SARs during 1997.
The following table shows the stock options granted to the Executives
during 1997, as well as other information relating to those options. The amounts
included in the "Grant Date Value" column of the table are the respective
present values of the options on the date of grant. The Company used the
Black-Scholes option valuation model in determining this value.
The following assumptions were used in calculating these values:
(a) all options would be held for the entire 10-year term;
(b) a risk-free rate of 6.67%;
(c) a dividend yield of 2.38%; and
(d) stock price volatility of 22.95%.
The risk-free rate used is the 10-year Treasury rate on the date the options
were granted. This rate reflects both the 10-year term of the options and the
fact that they are being valued as of a specified point in time (the date of
grant). The value determined in accordance with that calculation was then
adjusted downward by 5% to reflect that the options are not transferable. (The
Black-Scholes model assumes that the options are transferable.) The value was
further adjusted downward by 8.1% (slightly less than 3% per year) to reflect
the risk that the option will terminate prior to its becoming exercisable. (The
Black-Scholes model also assumes that the options are fully exercisable
immediately.)
The assumptions described above are only assumptions. The actual
risk-free rate, dividend yield and volatility may vary from the model. If the
actual amounts differ from the assumptions, the value of the options shown in
the table would change as well. Consequently, the amounts included in the Grant
Date Value column of the table do not necessarily reflect either the future
stock value or the amount that the Executives may realize if they exercise their
options and sell the underlying shares. Any gain recognized by an Executive on
exercise of his option(s) and sale of all or any portion of the underlying
shares may be greater or less than the amounts shown in the table.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants Grant Date
Value
<S> <C> <C> <C> <C> <C>
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise Grant Date
Options/SARs Employees in Price Expiration Present
Name Granted Fiscal Year ($/Share) Date Value ($)
Mr. Hansel 125,000 8.1258% 13.4375 1/27/07 $500,000
Mr. Boydstun 45,000 2.9253% 13.4375 1/27/07 $180,000
Mr. Domingos 40,000 2.6002% 13.4375 1/27/07 $160,000
Mr. Flurry 40,000 2.6002% 13.4375 1/27/07 $160,000
Mr. Wright 45,000 2.9253% 13.4375 1/27/07 $180,000
</TABLE>
Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Values
The following table shows certain information concerning all options
granted to the Executives by the Company. The Company did not grant any SARs to
any of the Executives during 1997, and there are no SARs outstanding relating to
any options granted by the Company.
<TABLE>
<CAPTION>
Exercised Shares Number of In-the-Money
Securities Options/SARs at
Underlying Fiscal Year-End
Unexercised ($)
Options/SARs at
Fiscal Year-End
(#)(1)
<S> <C> <C> <C> <C>
Exercisable (E)/ Exercisable(E)
Name Shares Acquired on Value Realized on Unexercisable(U) Unexercisable(U)
Exercise Exercise
Mr. Hansel 0 0 1,597,185 $19,513,710
476,507 $ 4,305,545
Mr. Boydstun 0 0 15,000 $ 179,063
95,000 $ 727,813
Mr. Domingos 40,000 $300,627 35,781 $ 411,198
102,500 $ 842,344
Mr. Flurry 0 0 12,500 $ 149,219
82,500 $627,344.75
Mr. Wright 0 0 53,750 $ 638,828
103,750 $ 811,016
</TABLE>
- ---------------------------
(1) For each option, the value is determined as follows: [number of shares
subject to option] times [$18.875 - exercise price per share]. The $18.875 price
was the closing market price of the Company's Common Stock on December 31, 1997.
As of March 9, 1998, all of the options granted to each Executive prior to 1998
are "in-the-money".
Long-Term Incentive Plan Awards
In 1995, the Executive Compensation Committee approved a Performance
Share Awards Plan that would result in the issuance of restricted stock to the
named Executives and certain other members of executive and senior management of
the Company if certain performance-based goals are met. The Company has achieved
the performance objectives set forth in the plan during the three-year period
ending on December 31, 1997, and a portion of the shares available under that
Plan will be awarded in 1998. The plan is more fully described in the Company's
Proxy Statement relating to its 1996 Annual Meeting of Shareholders.
Compensation of Directors
The following table shows the compensation payable to the independent directors
(those who are not officers of the Company or the Banks) during 1997:
<TABLE>
<CAPTION>
<S> <C> <C>
Position Retainer Per Meeting
Chairman of the Board $50,000 $1,500
Board Member $12,600 $1,200
Committee Chairman 0 $1,500
Committee Member 0 $1,200
</TABLE>
The retainer for the Chairman of the Board is in addition to the annual retainer
for a board member. Mr. Campbell, who currently serves as Vice Chairman, is an
officer of the Company and therefore does not receive compensation as a
Director. All per meeting fees are paid in cash.
Payment of Retainer Fees in Stock
Directors of Hibernia may elect to take all or a portion of their annual
retainer fees in Common Stock rather than cash. If a director elects stock,
rather than cash, he or she is given a number of shares the value of which is
equal to 1.2 times the amount of the retainer to be taken as stock. For example,
if a board member other than the chairman elected to take her entire retainer in
stock, she would receive stock valued at $15,120. For purposes of this
calculation, the value of the Company's stock on the date of the Annual Meeting
is used to determine the number of shares to be granted. This policy was adopted
in 1996 and approved by our shareholders at the 1997 Annual Meeting.
On the date of the 1997 Annual Meeting, the value of Hibernia Common Stock
for this purpose was $13.00. The value of all retainer fees paid to directors in
stock in 1997 was $168,831 (valued as of the date of the 1997 Annual Meeting).
An additional $85,680 in retainer fees were paid in cash in 1997. Some of the
directors elected to take all of their retainer fees in stock, and others
elected to take a portion of their retainers in stock. Certain directors elected
to receive their entire retainer fees in cash.
Deferred Compensation Plan
The Company maintains a deferred compensation plan for directors pursuant
to which a director may defer payment of fees receivable by him or her for
service as a director, with deferred amounts accruing interest at a rate equal
to that paid by the Bank on its retail Tower account offered to the public in
the New Orleans area. This rate was approximately 2% during 1997.
Retirement Policies
If a director serves on the Board of the Company for at least 15 years and
resigns thereafter in good standing, he or she will be considered to have
retired. If a director who is not an employee of the Company upon his or her
retirement served on the Board of Directors of the Company prior to 1993 (the
point in time at which the Company began granting stock options to directors
annually), then he or she will be entitled to receive a stock gift upon
retirement. The number of shares of Common Stock that will be granted to the
director depend upon the number of years of service on the Board of Directors,
with a maximum grant of 5,000 shares. Directors who were granted stock options
under the 1993 Director Stock Option Plan who retire prior to vesting of all of
the options previously granted to them will be entitled to exercise their
options as to all shares (whether or not vested prior to retirement) so long as
those options are exercised within one year after the date of retirement.
Employment Agreements and Change of Control Arrangements
Mr. Hansel serves as President and Chief Executive Officer of the Company
pursuant to a written employment agreement with the Company which was effective
as of March 26, 1992 and which was described in detail in the Company's Proxy
Statement relating to its 1993 Annual Meeting of Shareholders.
The agreement includes an initial term of three years. Beginning in 1993,
the contract is automatically renewed each year for an additional year, absent a
termination of the agreement. The initial term of the agreement was extended for
an additional year in each of the years from 1993-1997 and is now scheduled to
expire in March 2000. The agreement is expected to be renewed in 1998, thereby
extending its term to March 2001.
None of the other Executives currently serves pursuant to an employment
agreement, except Mr. Flurry. Mr. Flurry and Mr. Boydstun each executed an
employment agreement with the Company when the Company merged with the
respective banks of which they served as president prior to the merger. Mr.
Boydstun's contract expired in 1997. Mr. Flurry's contract provides for the
payment of annual salary, bonus and incentives in the discretion of the Company
and entitlement to certain other benefits available to employees in similar
positions within the Company, as well as a noncompetition agreement in favor of
the Company. Mr. Flurry's contract expires in 1999.
Each of the Executives other than Mr. Hansel has a change of control
employment agreement with the Company that, among other things, assures the
individual of at least two years employment (or payment for that period) in the
event of a change of control of the Company. Those agreements permit the
individuals to resign one year after the change of control and be paid for the
remaining term of the contract. Mr. Hansel's contract includes similar
provisions that protect his income through the unexpired term of his contract if
there is a change of control of the Company.
Certain of the Company's benefit plans also include provisions relating to
a change of control. These provisions have the effect of varying the benefits
payable at that time from those that would be payable if no change of control
had occurred. In particular, the deferral plan available to executives and
senior managers permits participants to defer all or a portion of their annual
bonus. This plan provides that participants may opt out of the plan upon a
change of control and receive all of their contributions, as well as the
Company's payment of earnings on those contributions as required by the plan, at
that time. The Company's Supplemental Employee Stock Ownership Plan, which
provides for contributions by the Company to the participants' accounts in
amounts equal to the difference between the cash or value of stock that would
have been allocated to the participant's qualified ESOP account if the qualified
plan limitations did not apply, also permits participants to elect to opt out of
the plan on a change of control. If a participant in this plan elects to opt
out, 90% of the value of his account will be distributed to him. All of the
benefit plans adopted by the Company in 1996 in which executive and senior
managers may participate require that the Company's obligations under the plans
be assumed by any company that is a party to a merger in which the Company is
not the surviving entity.
Additional Information with Respect to Compensation Committee Interlocks and
Insider Participation in Compensation Decisions
None of the members of the Executive Compensation Committee was an officer
or employee of the Company or any of its subsidiaries during 1997. None of these
individuals is a former officer of the Company or any of its subsidiaries.
A subsidiary of United Companies Financial Corporation of which Mr. Brown
is president and chief executive officer, makes insurance products available to
the Bank for sale to its customers, and pays the Bank commissions on sales to
Bank customers. The aggregate fee income received by the Bank as a result of
these sales during 1997 was approximately $1,400,984
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
BACKGROUND AND OVERALL POLICY
The Company's current compensation program was developed in 1992 and has been
refined since that time in response to the Company's improvement in operating
results and to the overall market conditions affecting the Company's peer group
of regional banks. The primary objectives of this program have not changed since
that time and have been described in the reports of this Committee in previous
years.
Competitive Market
Executive and Senior Management are recruited from a national labor market of
other banking organizations. Salary rates for these positions are developed by
considering the responsibility of each position relative to comparable positions
in other organizations of similar size that compete in similar businesses and
business lines with the Company. However, salaries are not necessarily
maintained at the same level as those at other companies. The CEO's compensation
is determined based upon an analysis of compensation provided by a peer group of
regional bank holding companies. This peer group is identical to the group used
to measure the Company's stock performance in the Stock Performance Graph that
appears elsewhere in this Proxy Statement. The Committee believes that the CEO's
position is the only position that is truly comparable among the members of the
peer group, and consequently, it is the only position within the Company that is
compared solely to the peer group for purposes of this analysis.
Middle Management and professional staff are generally recruited from financial
institutions in Louisiana and surrounding states but in some cases are recruited
nationally. The Company establishes salary rates for these positions by
comparing them to similar positions in other banks but generally emphasizes the
experience level of the individual more than the size of the employing
organization in this process.
Nonexempt and Supervisory positions are recruited from a local labor market. The
Company establishes salary rates relative to other banks and similar positions
(such as customer service positions) in local companies.
Base Salaries
Consistent with its objective to minimize fixed expenses, the Committee
increases salaries for all executive and senior management employees of the
Company at a slower rate than the rate at which comparable salaries in the
market are increasing. This principle was applied in granting salary increases,
if any, in 1997, and is expected to be applied in the future. Bonuses will
occasionally be paid to entice new executive and senior managers to join the
Company, and these bonuses are considered when determining the overall
compensation for those individuals.
The compensation strategy for the Company's Senior Executive Vice Presidents is
the same as the strategy for the rest of executive management, with salaries
established at a level that does not exceed the midpoint of the market rate for
the position. During 1997, two members of executive management were promoted to
positions that included a significant increase in responsibilities, and their
salaries were adjusted to reflect the change. Each of these individuals is
currently a Senior Executive Vice President. In addition, one member of senior
management was promoted to the executive management level.
Salaries for executive management (including the Executives) are set at a
level that does not exceed the midpoint of the market rate for the particular
job. During 1997, executives were paid at a rate that was an average of 16%
below the market rate. Senior management salaries are set at a level which
during 1997 was an average of 6% below the relevant market rates. The Committee
plans to review salaries of executive management in the second quarter of 1998
and make any appropriate adjustments at that time.
Salaries for other employees in the Company are set within a range of
competitive rates and are managed so that the largest increases go to the
individuals who exhibit superior performance and whose pay is lowest relative to
the market. Total increases for this group will be consistent with competitive
trends within the applicable market.
Annual Cash Incentives
The Committee believes that executive incentives must balance short-term and
long- term objectives and that long-term focus is best achieved through
long-term stock ownership, which is provided through grants under the Company's
Long-Term Incentive Plan. However, to provide reward and encourage short-term
decisions that result in positive long-term performance of the Company, the
Committee also believes that managers should be rewarded through annual cash
bonuses. Annual cash bonuses for this group are not based upon the market price
of the Company's stock and therefore will not necessarily increase or decrease
with the price of the Company's stock. The factors affecting cash bonuses paid
for 1997, in addition to individual performance, are discussed further below.
See "Company Performance in 1997."
Similarly, the Committee believes that incentives granted or renewed should
balance the results achieved by an individual and the Company's overall results.
In designing annual cash incentive plans, the Company has rewarded
non-management employees primarily based on the results of their performance and
the performance of their respective business units. At higher levels of the
organization, annual cash bonuses are based partly on an individual's own
performance, partly on the performance of his or her business unit and largely
on the overall performance of the Company. Accordingly, some incentive awards
will be paid (particularly to lower-level employees) even in years when the
Company has not met its overall performance objectives. However, the awards
granted to executive management will be most closely related to the overall
results achieved by the Company, and, as a result, executive management is not
likely to receive significant cash incentives in years in which the Company's
overall performance has not been consistent with or better than pre-established
long- and short- term objectives.
Annual cash incentive award opportunities are designed so that the award for
target or planned performance combined with base salary will produce cash
compensation about equal to the market median. Performance significantly
exceeding planned objectives will produce total cash compensation between the
median and the 75th percentile of the market rate for competitive positions.
The total awards paid to executive and senior management and an individual
executive's specific award are not derived from specific formulas. Rather, the
Committee approves an overall total pool of annual cash incentives. The
aggregate amount of the pool is determined based upon a number of performance
factors for the Company, including net income, asset quality, earnings,
profitability and similar factors. The distribution of the pool of funds among
members of executive and senior management is based upon the CEO's assessment of
the performance of each individual's business unit as well as his or her
individual performance. The CEO recommends specific awards for executive
management based upon these factors. The Committee participates in this
assessment and approves each specific award. Similarly, the executive managers
as a group evaluate the performance of each of the senior managers and recommend
awards for those individuals, which awards are approved by the CEO.
The Company maintains a variety of other cash incentive plans available to
employees at all levels of the organization whose performance has a measurable
impact on Company performance. These are primarily business-unit specific plans
that reward sales and service efforts, with a significant portion devoted to
retail sales and trust and brokerage referrals.
Company Performance in 1997. The Company's performance during 1997 showed
continued improvement over previous years, particularly in the key areas of
capital, asset quality and earnings growth. The Company's leverage ratio (its
primary measure of capital strength) was 8.54% at year-end 1997 compared to
8.68% at year-end 1996. The Company's coverage ratio (the ratio of its loan loss
reserves to nonperforming assets), its leading indicator of asset quality, was
.33% at year-end 1997 compared to .40% at year-end 1996. Finally, earnings per
share in 1997 were up from $.85 at December 31, 1996 to $1.00 at December 31,
1997.
The Company's performance in 1997 was also marked by:
a 22% increase in earnings;
a 23% increase in loans;
a 15% increase in assets; and
a 14% increase in dividends paid to common shareholders.
Franchise expansion continued in 1997, with the completion of two mergers and
corresponding improvement in market and deposit share. Management and service
initiatives continue to add value to the Company's operations.
Cash Bonuses for 1997. Based upon the performance of the Company and the
executive managers during 1997, the Committee approved cash bonus awards
totaling $1,813,384 for the 20 members of executive management (including the
CEO). Total awards for executive management include an award of $502,884 for Mr.
Hansel. This compares to total awards to the 20 members of executive management
in 1996 of $1,818,500 (including a $250,000 award to Mr. Hansel). The basis for
Mr. Hansel's bonus is described in more detail below.
Based upon the performance of the Company and the senior managers during 1997,
the Committee approved cash bonus awards totaling $1,665,800 for 59 members of
senior management. This compares to total awards to the 58 members of senior
management in 1996 of $1,858,100.
Long-Term Incentives
The Long-Term Incentive Plan, which was approved by shareholders in 1992, allows
the Committee to employ a variety of forms of incentives to accomplish its
objectives. In 1997, the Committee made grants of stock options as well as
twelve awards of restricted stock.
Long-term incentive grants are designed to complete the competitive compensation
package. Since cash compensation opportunity for the Company's executive and
senior management is intentionally lower than market norms, long-term incentive
grants larger than market average enable the Company to provide competitive
total remuneration if the Company's long-term performance is positive. Because
the long-term incentives are stock-based, they will only provide significant
additional compensation if the market price of the Company's stock increases
over time (in the case of stock options and restricted stock awards) or the
Company meets or exceeds certain specified performance objectives (in the case
of Performance Shares).
In 1997, the Committee awarded stock options covering an aggregate of 1,538,300
shares to 555 employees, of which options covering 610,500 shares (approximately
40% of the total) were to executive management (including a grant of 125,000
shares to Mr. Hansel).
All stock options granted in 1997 included an exercise price equal to the fair
market value on the date of grant and provide for vesting at the rate of 50%
after two years and an additional 25% at the end of the third and fourth years
after grant. The vesting schedule provides additional incentive to management to
remain with the Company long-term and actively participate in its progress.
The Company made twelve grants of restricted stock under the Plan in 1997. One
of the awards covered 3,000 shares to a senior manager because of performance,
two covered 1,000 options each to two middle managers because of increased job
responsibilities, and two awards of 500 each were given to a member of
management who, in addition to his or her ordinary responsibilities, coordinated
one or more of the mergers completed in 1997. The seven remaining awards ranged
from 100-800 shares each and were awarded to other employees for their
participation in special projects of some significance to the Company's progress
or other special contributions to the success of the Company. The restricted
stock awards provide the recipient with the right to vote the shares and to
receive dividends, but the shares may not be sold or transferred while the
individual remains employed by the Company or the Bank, except to exercise stock
options.
Employee Stock Ownership Plan. In April 1995, the Board of Directors, upon
recommendation of the Committee, approved the formation and funding of an
Employee Stock Ownership Plan (ESOP). The Company allocated $30 million to fund
the ESOP, and the ESOP borrowed funds from the Bank to make purchases of the
Common Stock for the Plan. Payments on the loan are made with contributions from
the Bank to the ESOP, and allocations of shares to individual accounts are made
annually at the discretion of the Plan Administrator. As of December 31, 1997,
the ESOP had purchased 2,431,388 shares of the Common Stock and had allocated
617,507 shares to employee accounts. Aggregate contributions to the ESOP during
1997 were $1,439,246. The terms of the ESOP provide that employees' interests in
their ESOP accounts vest over a five-year period (beginning in April 1995), with
gradually increased percentages vesting each year.
1995-97 Performance Shares Award Plan. The Committee approved a Performance
Shares Award Plan in 1995 that would provide incentives to executive and senior
management to achieve certain predetermined goals that are critical to the
Company's success. The maximum number of shares that could be awarded under this
plan was 862,500, and the goals were to be achieved over a three-year period.
Based on the Company's performance over the period beginning January 1, 1995 and
ending December 31, 1997, the Compensation Committee of the Board of Directors
approved a payout of 587,018 shares, or 68.06% of the shares to 158 of the
eligible officers. These shares will be awarded to employees in early 1998.
These awards were earned based on the performance of the Company over the period
as compared to its peer group in earnings per share, capital and asset quality.
Shareholder return did not affect the level of payout of these awards.
Once awarded, shares issued under this plan have the same terms and conditions
as restricted stock grants described above.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
General
Mr. Hansel is compensated pursuant to the terms of an employment contract
that was negotiated in 1992 on behalf of the Company by the Chairman of the
Search Committee and approved by this Committee and the Executive Committee.
The terms of the contract are consistent with the principles of the Company's
overall compensation strategy and include:
* An annual salary which is slightly less than the median of the 1996
salaries provided to the CEOs of the peer group described above. Mr.
Hansel's annual salary was increased to $570,000 in 1997.
* Each year, Mr. Hansel is eligible to receive an annual bonus of up to 90%
of the midpoint of his salary range.
* All stock options specifically provided for under the contract were granted
in previous years. In 1997, a grant of 125,000 stock options was made to
Mr. Hansel at the discretion of the Committee.
Evaluation of Performance
In 1997, the Committee evaluated Mr. Hansel's performance according to the
written policy relating to the evaluation of the CEO's performance for purposes
of compensation and related matters. This evaluation is performed annually.
The written policy requires consideration of both quantitative (objective)
and qualitative (subjective) criteria in the evaluation process. Quantitative
factors are stated in terms of corporate performance goals, the achievement of
which can be measured by financial performance results included in the Company's
annual report. The performance goals for purposes of Mr. Hansel's evaluation
include earnings growth, asset quality and capital measures, as well as various
other significant financial performance factors highlighted in the Company's
annual profit plan for the year in question. Quantitative factors are measured
against peer group performance and the Company's performance compared to its
profit plan for the year.
In 1997, the Committee formalized and approved the 1997 CEO Bonus Plan which
tied 70% of the CEO's bonus potential by formula to the achievement of the
earnings per share as set forth in the Company's 1997 profit plan; provided that
the Company maintained above average soundness as defined by both (a) reserve
coverage of nonperforming loans and (b) the leverage ratio.
For purposes of this bonus, the increase in EPS is measured by comparing EPS at
year-end 1997 to EPS as reported for year-end 1996. A minimum increase as
specified in the plan must be achieved in order for the CEO to receive any
portion of this bonus. The maximum amount to which the CEO shall be eligible for
this portion of his bonus shall be 70% of an amount that is equal to 90% of the
projected median of the annual salaries of all chief executive officers in the
Company's peer group of regional banks excluding the Company. The amount is
determined by a survey of the 1996 proxy statements of the peer group banks and
an upward adjustment based on the market rate of increases in salaries will be
made. The maximum bonus that may be paid to the CEO is $1,500,000.
Qualitative factors are used in determining an amount for the remaining 30% of
the CEO's bonus. These factors include integrity, leadership and management of
relationships with key groups, including industry regulators, institutional and
other investors, customers, analysts and community leaders. The policy also
recognizes other significant areas of qualitative performance for which the CEO
is responsible, including financial and accounting controls and expense
management.
1997 Performance and Awards
Based upon the Company's performance in 1997 (as discussed above), and Mr.
Hansel's individual performance, Mr. Hansel was awarded a bonus of $502,844 for
1997. This bonus is 92% of the total bonus for which he was eligible in 1997.
As an incentive for future performance, Mr. Hansel was granted options to
purchase 150,000 shares of stock on the same terms and conditions as the other
options granted under the Long-Term Incentive Plan. This grant was made in
January, 1998.
Section 162(m) Policy
The Committee reviewed the impact of the final regulations adopted under Section
162(m) of the Internal Revenue Code and noted that, beginning in 1997, the
transition rules would phase out certain of the transition relief on which the
Company had relied in previous years. Generally, the Committee has determined to
analyze the impact of Section 162(m) on the Company in the light of all of the
relevant factors and will maintain flexibility and integrity in its compensation
systems while attempting to maximize deductibility of compensation. While the
Committee recognizes the importance of maximizing the Company's ability to
deduct compensation for tax purposes, it also realizes a need for compensation
systems designed to attract and retain qualified executives, particularly the
Chief Executive Officer.
In 1997, the Committee amended the Long-Term Incentive Plan to include certain
provisions required in order to permit the stock options granted by the Company
to continue to qualify as "performance-based" for purposes of the regulations,
and those amendments were included as an item for shareholder vote at the 1997
Annual Meeting.
The Committee will periodically monitor the Company's compensation programs, the
levels of compensation to various executives and the impact of Section 162(m) on
the Company. In particular, the Committee expects to maintain a bonus plan for
the CEO that is "performance-based" under the regulations with respect to a
majority of the CEO's bonus opportunity. Also, the Committee intends to
structure future performance share awards plans so that any shares awarded to
the CEO will qualify for the "performance-based" exemption.
Submitted by the Executive Compensation Committee of the Company's Board of
Directors.
March 1, 1998
Elton R. King, Chairman
J. Terrell Brown
Dick H. Hearin
William C. O'Malley
Robert T. Ratcliff
Stock Performance Graph
The following performance graph compares the performance of the Company's
Common Stock to the S&P 500 Index and to a peer group of 19 other regional bank
holding companies with assets of between $2.2 billion and $17.0 billion for the
Company's last five fiscal years. The graph assumes that the value of the
investment in the Company's Common Stock and each index was $100 at December 31,
1992 and that all dividends were reinvested. The bank holding companies included
in the peer group are AmSouth Bancorporation; Colonial BancGroup, Inc.
(Montgomery, Alabama); Commerce Bancshares, Inc.(Kansas City, Missouri); Compass
Bancshares, Inc. (formerly Central Bancshares of the South); Cullen/Frost
Bankers, Inc.; Deposit Guaranty Corp.; First American Corporation (Tennessee);
First Commerce Corporation; First Commercial Corporation (Little Rock,
Arkansas); First Tennessee National Corporation; Hancock Holding Company; Magna
Group, Inc.; Mercantile Bancorporation, Inc. (St. Louis, Missouri); Regions
Financial Corporation; SouthTrust Corporation; Synovus Financial Corp.;
Trustmark Corporation; Union Planters Corporation; and Whitney Holding
Corporation.
This peer group is the same peer group that was used for the stock
performance graph that appeared in the Company's 1997 proxy statement.
(Add 5-year Performance Graph)
Company/Index 1993 1994 1995 1996 1997
Hibernia $132.00 $135.00 $194.00 $245.00 $356.00
S&P 500 Index 109.00 109.00 168.00 221.00 384.00
Peer Group 110.00 111.00 153.00 189.00 251.00
Transactions with Related Parties
The Bank leases certain properties in which Sidney W. Lassen holds an
interest. Mr. Lassen is a director of the Company. During 1997, Hibernia
National Bank paid a total of $235,590.69 for the leases on these properties.
Mr. Lassen holds a 25% interest in leased property located at 2201 Veterans
Memorial Boulevard, Metairie, Louisiana and a 100% interest in leased property
located at 6305 Airline Highway, Kenner, Louisiana. In the opinion of management
of the Company, the terms and conditions of those leases are usual, customary
and no less favorable to Hibernia National Bank than would be available from
unaffiliated parties.
Indebtedness of Related Parties
Directors and executive officers of the Company were customers of the
Banks in the ordinary course of business during 1997. The individuals also
conducted other business with the Banks during the year. In addition, members of
families of directors and executive officers, as well as companies with which
they or their families are associated, were customers of the Banks and conducted
other business with the Banks in the ordinary course of business during 1997.
All loans and commitments included in those transactions were 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.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
To the Company's knowledge, all forms required to be filed under Section
16(a) were filed on a timely basis during 1997.
Vote Required and Recommendation
A plurality of the votes cast at the Annual Meeting is required for the
election of directors. The seven individuals who receive the most votes will be
elected as directors.
The Board of Directors recommends that you vote "FOR" election of the
seven nominees listed above.
PROPOSAL NO. 2
AMENDMENT OF THE ARTICLES OF INCORPORATION TO INCREASE
THE NUMBER OF SHARES OF CLASS A COMMON STOCK AUTHORIZED
The Board of Directors has approved an amendment to the Articles of
Incorporation of the Company that would increase the number of authorized shares
of Class A Common Stock of the company from 200 million to 300 million (the
"Amendment"). The Board of Directors of the Company has unanimously approved the
Amendment and recommends that you vote "FOR" the Amendment.
The Articles of Incorporation of the Company currently authorize the
issuance of up to 200 million shares of Class A Common Stock. As of the Record
Date, ______ shares of Class A Common Stock of the of the Company were issued
and outstanding. In addition, as of that date, the Company had agreed to mergers
with two institutions that will require the Company to issue shares of Class A
Common Stock in those mergers. These mergers can be completed without approval
of the Amendment. Nevertheless, the Company continues to pursue potential merger
transactions. It is likely that future merger transactions will be structured as
exchanges of stock, which would require the Company to issue additional shares
of its Common Stock. Also, the Company utilizes Common Stock in certain of its
incentive plans and for other corporate purposes.
The Company uses the poolings-of-interests accounting method for the
vast majority of its mergers. The rules for poolings do not permit acquiring
companies to engage in buyback programs for their own stock except in extremely
limited circumstances. As a result, acquiring additional shares through a
buyback program is not a viable alternative for the Company to increase the
shares available to it for future mergers and other corporate purposes.
In order to assure sufficient shares of Common Stock for issuance in the
future, the Board recommends adoption of the Amendment. The Amendment will
increase the number of authorized shares of Common Stock from 200 million to 300
million.
The increase in the number of authorized shares will allow for the
possibility of dilution of the interests of current holders of the Company's
Common Stock. The degree of any such dilution would depend upon the number of
additional shares of Common Stock that are issued in the future, as well as the
price at which such shares are issued, neither of which can be determined with
any accuracy at this time. However, it is not currently the intention of the
Board of Directors to issue shares of Common Stock in dilutive transactions.
The existence of a substantial number of shares of authorized but
unissued shares of Common Stock could impede an attempt to acquire control of
the Company. In that case, the Company would have the ability to issue
additional shares of Common Stock in response to an attempt to acquire control.
The Company does not currently intend to use the additional authorized shares
for that purpose. The Amendment is not part of a plan to deter or defeat the
ability of third parties to acquire control of the Company and is not proposed
in response to any actual or perceived threat of a change in control of the
Company. The Amendment is not intended or designed as an anti-takeover device.
Board of Directors Approval and Vote
The Board of Directors unanimously approved the amendment at its meeting
on January 27, 1998.
Vote Required and Recommendation
The vote of a majority of the shares present at the Annual Meeting, in
person or by proxy, is required in order to approve the Amendment.
The Board of Directors has unanimously approved the Amendment and
recommends that you vote "FOR" Proposal No. 2.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
Shareholders of the Company are being asked to ratify the Company's
appointment of Ernst & Young LLP as its independent auditors for 1998, as
described below.
The firm of Ernst & Young LLP, certified public accountants, was the
Company's independent auditors for the year 1997. The Board of Directors has
appointed Ernst & Young LLP as independent auditors for the Company for the year
1998. Although the appointment of independent auditors is not required to be
approved by shareholders, the Board of Directors believes it appropriate to
submit this selection for ratification by shareholders. The Board of Directors,
however, reserves the right to change independent auditors at any time
notwithstanding shareholder approval. Representatives of Ernst & Young LLP will
be present at the Annual Meeting, will have the opportunity to make a statement
if they desire to do so and will be available to respond to appropriate
questions.
Vote Required and Recommendation
An affirmative vote by the holders of a majority of the shares of Common
Stock voted at the Annual Meeting is required for the ratification of the
appointment of independent auditors.
The Board of Directors recommends that you vote "FOR" ratification of
the appointment of Ernst & Young LLP as independent auditors.
SOLICITATION OF PROXIES
The enclosed proxy is being solicited by the Board of Directors of the
Company. The cost of soliciting proxies in the form enclosed will be borne by
the Company. Directors, officers and employees of the Company may, but without
compensation other than their regular compensation, solicit proxies by
telephone, telegraph or personal interview. In addition, the Company has
retained Kissel-Blake Inc. to assist in the solicitation of proxies. The fee of
Kissel- Blake is estimated not to exceed $8,500 plus reasonable out-of-pocket
costs and expenses. It is anticipated that banks, brokerage houses and other
institutions, nominees or fiduciaries will be requested to forward proxy
materials to beneficial owners and to obtain authorization for the execution of
proxies, and the Company may, upon request, reimburse them for their related
expenses.
SHAREHOLDER PROPOSALS
Shareholders may submit proposals to be considered at the 1999 Annual
Meeting of Shareholders if they do so in accordance with applicable regulations
of the Securities and Exchange Commission. Any shareholder proposals must be
submitted to the Secretary of the Company no later than November 9, 1998 in
order to be considered for inclusion in the Company's 1999 proxy materials.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
know of any matters to be presented at the Annual Meeting other than those
described above. However, if other matters are properly brought before the
Meeting or any adjournment thereof, the persons named in the enclosed proxy will
vote the shares represented by them in accordance with their best judgment
pursuant to discretionary authority granted in the proxy.
ANNUAL REPORT
The Annual Report to Shareholders containing financial statements for
the Company's 1997 fiscal year has been mailed to shareholders prior to or with
this Proxy Statement. However, the Annual Report does not form any part of the
material for the solicitation of proxies.
Upon written request by a shareholder, the Company will provide a copy
of the Company's Form 10-K Annual Report for 1997, including the Annual Report
of Shareholders, as filed with the Securities and Exchange Commission. Requests
for copies should be addressed to Secretary, Hibernia Corporation, P. O. Box
61540, New Orleans, Louisiana 70161.
By Order of the Board of Directors
/s/ PATRICIA C. MERINGER
Patricia C. Meringer
Secretary
New Orleans, Louisiana
March 9, 1998
EXHIBIT A
DESCRIPTION OF STOCK PERFORMANCE GRAPH
The accompanying proxy statement includes a five-year stock performance graph
that depicts the performance of Hibernia Corporation's Common Stock over a
five-year period commencing in 1992 and ending in 1997 and compares that
performance to the performance of the Standard & Poor's 500 Composite Index and
a peer group of bank holding companies over the same period. The identities of
the peer group of bank holding companies are included in the accompanying proxy
statement. The graph shows the years from 1992 through 1996 on the horizontal
axis and the cumulative returns for each of Hibernia Corporation, the S&P 500
Composite Index and the peer group companies on the vertical axis.
The following table shows the returns for each year shown on the
horizontal axis of the graph for each of Hibernia, the S&P 500 Index and the
peer group:
Company/Index 1993 1994 1995 1996 1997
Hibernia $132.00 $135.00 $194.00 $245.00 $356.00
S&P 500 Index 109.00 109.00 168.00 221.00 384.00
Peer Group 110.00 111.00 153.00 189.00 251.00
