<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
Hibernia Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
Hibernia logo
STEPHEN A. HANSEL
PRESIDENT
CHIEF EXECUTIVE OFFICER
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
1998.
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
<PAGE> 3
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 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
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<S> <C>
PROXY SOLICITATION AND VOTING OF PROXIES.................... 1
Owners of 5% or More of the Company's Common Stock........ 1
How Proxies Will Be Voted................................. 2
VOTING PROCEDURES........................................... 2
Election of Directors..................................... 2
Other Proposals........................................... 2
PROPOSAL NO. 1 ELECTION OF DIRECTORS........................ 3
Your Directors............................................ 3
Directors Nominated to Serve Until the 2001 Annual
Meeting................................................ 3
Directors Whose Terms Continue After the 1998 Annual
Meeting................................................ 4
Beneficial Ownership of Stock by Directors and
Executives............................................. 6
Board Meetings and Committees............................. 8
Executive Compensation and Benefit Plans.................. 11
Annual Compensation....................................... 11
Stock Option and Stock Appreciation Rights ("SARs")
Grants................................................. 12
Long-Term Incentive Plan Awards........................... 14
Compensation of Directors................................. 15
Employment Agreements and Change of Control
Arrangements........................................... 16
Additional Information with Respect to Compensation
Committee Interlocks
and Insider Participation in Compensation Decisions.... 17
Report of the Executive Compensation Committee............ 17
Stock Performance Graph................................... 23
Transactions with Related Parties......................... 24
Indebtedness of Related Parties........................... 24
Compliance with Section 16(a) of the Securities Exchange
Act of 1934............................................ 24
Vote Required and Recommendation.......................... 24
PROPOSAL NO. 2 AMENDMENT OF THE ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF SHARES OF COMMON
STOCK AUTHORIZED.......................................... 24
Board of Directors Approval and Vote...................... 25
Vote Required and Recommendation.......................... 25
PROPOSAL NO. 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT
AUDITORS.................................................. 25
Vote Required and Recommendation.......................... 26
SOLICITATION OF PROXIES..................................... 26
SHAREHOLDER PROPOSALS....................................... 26
OTHER MATTERS............................................... 26
ANNUAL REPORT............................................... 27
</TABLE>
i
<PAGE> 5
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:
Annual Meeting or Meeting: the 1998 Annual Meeting of Shareholders of
Hibernia Corporation
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
Common Stock: Class A Common Stock of Hibernia Corporation
Company or Hibernia: Hibernia Corporation
Director: a member of the Board of Directors of the Company
ESOP: the Employee Stock Ownership Plan of Hibernia Corporation
Executive(s): one or more of 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 and
Flurry and Ms. Gassan)
Non-Qualified Deferral Plan: a benefit plan of the Company, described in
the Company's 1997 Proxy Statement, that permits deferrals of salary and bonus
and also provides for a contribution by the Company to the extent of any
contribution limitations imposed on a participant in the Company's 401(k) plan.
Non-Qualified Target Benefit Plan: a benefit plan of the Company, described
in the Company's 1997 Proxy Statement, that provides for contributions by the
Company to the extent that a participant's income after retirement from all
sources is anticipated to be less than 32% of his or her salary at the time of
retirement.
Record Date: February 27, 1998, the date on which one must be a shareholder
of record of the Company to be entitled to notice of and to vote at the Meeting.
Supplemental Stock Compensation Plan: a benefit plan of the Company,
described in the Company's 1997 Proxy Statement, that provides for contributions
by the Company to the extent of any limitations imposed on allocations to a
participant in the Company's ESOP.
ii
<PAGE> 6
HIBERNIA CORPORATION
P. O. BOX 61540
NEW ORLEANS, LOUISIANA 70161
-----------------------------
PROXY STATEMENT
-----------------------------
ANNUAL MEETING OF SHAREHOLDERS
APRIL 21, 1998
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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 148,282,810
shares of Class A Common Voting Stock, no par value issued and outstanding, and
no shares of Common Stock were 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,
1997, Prudential beneficially owned more than 5% of the Company's outstanding
Common Stock. Prudential's filing states that it beneficially owned 8,161,645
shares, or 6.25%, 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, or
6.23%, of the Company's Common Stock at that time. 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 are slightly higher than the actual ownership percentages
represented by the number of shares owned by Prudential and Jennison at year-end
1997. Based upon the number of shares of Common Stock outstanding on December
31, 1997, Prudential's ownership on that date was 6.14%
<PAGE> 7
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 10, 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.
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VOTING PROCEDURES
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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 (other than the election of directors) is
required for the matter to be deemed an act of the shareholders. With respect to
abstentions, the shares are considered present at the Meeting for purposes of
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.
2
<PAGE> 8
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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 classes with terms expiring in successive years. When Mr.
Duke 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." 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 for Hibernia
Corporation and Hibernia National Bank and a member of the board of directors of
Hibernia National Bank of Texas. Mr. Campbell is also the Chairman of Campbell
Companies. 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.
3
<PAGE> 9
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 & Carrier Services
Group 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
maxillofacial 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
ROBERT T. HOLLEMAN, age 67, is an independent geologist serving the oil and
gas exploration industry. Mr. Holleman is also the 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. Lassen 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
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 Investors, Inc. Mr. Brown has served as a Director of
Hibernia since 1986.
DICK H. HEARIN, age 63, formerly served as 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.
4
<PAGE> 10
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.
5
<PAGE> 11
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>
- ------------------------------------------------------------------------------------------------
EXERCISABLE PERCENT OF
NAME COMMON STOCK(1) STOCK OPTIONS(2) OUTSTANDING STOCK
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert H. Boh 86,578(3) 18,321 *
- ------------------------------------------------------------------------------------------------
J. Herbert Boydstun 484,460(4) 40,000 *
- ------------------------------------------------------------------------------------------------
J. Terrell Brown 14,880(5) 18,321 *
- ------------------------------------------------------------------------------------------------
E. R. "Bo" Campbell 4,445,363(6) 6,250 3.00%
- ------------------------------------------------------------------------------------------------
Richard W. Freeman, Jr. 43,849 18,321 *
- ------------------------------------------------------------------------------------------------
Stephen A. Hansel 188,889(7) 1,854,942 1.38%
- ------------------------------------------------------------------------------------------------
Dick H. Hearin 68,144(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 *
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James R. Murphy 344,898(11) 0 *
- ------------------------------------------------------------------------------------------------
Donald J. Nalty 109,033(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 *
- ------------------------------------------------------------------------------------------------
Janee M. "Gee" Tucker 1,279 7,500 *
- ------------------------------------------------------------------------------------------------
Virginia E. Weinmann 26,028(15) 16,250 *
- ------------------------------------------------------------------------------------------------
Robert E. Zetzmann 189,960 18,321 *
- ------------------------------------------------------------------------------------------------
CERTAIN EXECUTIVE OFFICERS
- ------------------------------------------------------------------------------------------------
Stephen A. Hansel **
- ------------------------------------------------------------------------------------------------
K. Kirk Domingos III 28,765(16) 80,781 *
- ------------------------------------------------------------------------------------------------
J. Herbert Boydstun **
- ------------------------------------------------------------------------------------------------
Bob Flurry 43,101(17) 33,750 *
- ------------------------------------------------------------------------------------------------
Marsha M. Gassan 27,790(18) 51,474 *
- ------------------------------------------------------------------------------------------------
Total 6,728,381 2,342,725
- ------------------------------------------------------------------------------------------------
All Directors, Nominees and
Executive Officers As a
Group (26 persons) 6,769,275 2,664,725 6.36%***
- ------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
* Less than 1 percent
** Messrs. Hansel and Boydstun are also Directors; see listing above.
*** Calculated based upon the actual number of shares outstanding on March 1,
1998 plus the shares subject to currently exercisable options.
6
<PAGE> 12
(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 may be
exercised 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, 651 shares credited as of
December 31, 1997 under the Company's ESOP and 12,632 shares of restricted
stock over which Mr. Boydstun has sole voting power and limited dispositive
power. 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 ESOP, 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 ESOP, 400 shares held as custodian for Mr.
Hansel's children and 86,526 shares of restricted stock over which Mr.
Hansel has sole voting power and limited dispositive power.
(8) Includes 13,932 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 ESOP and 11,194 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.
7
<PAGE> 13
(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 ESOP and 19,000 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, 651 shares credited as of December
31, 1997 under the Company's ESOP and 11,024 shares of restricted stock
over which Mr. Flurry has sole voting power and limited dispositive power.
(18) Includes 1,345 shares owned by Ms. Gassan's husband as to which she
disclaims beneficial ownership. Also includes 8,736 shares credited to Ms.
Gassan as of December 31, 1997 under the Company's Retirement Security
Plan, 651 shares credited as of December 31, 1997 under the Company's ESOP
and 15,462 shares of restricted stock over which Ms. Gassan has sole voting
and limited dispositive power.
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)
8
<PAGE> 14
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>
- --------------------------------------------------------------------------------------------------------------------
EXECUTIVE BOARD
NAME BOARD EXECUTIVE AUDIT COMPENSATION GOVERNANCE CREDIT TRUST
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
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 R. Peltier(1) x x 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 (effective upon Mr. Hugh J. Kelly's retirement at the 1997
Annual Meeting)
+ Mr. O'Malley became Chairman of the Audit Committee upon Mr. Hugh J.
Kelly's retirement at the 1997 Annual Meeting.
++ Mr. King became Chairman of the Executive Compensation Committee upon Mr.
James H. Stone's retirement at the 1997 Annual Meeting.
(1) Dr. Peltier was not a member of the Board during 1997.
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
9
<PAGE> 15
- 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.
10
<PAGE> 16
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.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
LONG-TERM COMPENSATION AWARDS
-----------------------------------------------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING
----------------------------------- OPTIONS/SARS LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDED(#) PAYOUTS(1) COMPENSATION(2)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stephen A. Hansel(3) 1997 $546,667 $502,884 125,000 0 $144,186
President and Chief 1996 500,000 250,000 125,000 0 181,428
Executive Officer 1995 500,000 468,000 125,000 $335,913 44,877
- ---------------------------------------------------------------------------------------------------------------------
J. Herbert Boydstun(4) 1997 $210,000 $135,000 45,000 0 $ 44,929
Chairman/Southwest 1996 200,000 140,000 35,000 0 45,962
Region 1995 170,000 80,000 30,000 0 11,995
- ---------------------------------------------------------------------------------------------------------------------
K. Kirk Domingos III(5) 1997 $206,667 $135,000 40,000 0 $ 70,695
Senior Executive Vice 1996 190,000 120,000 35,000 0 72,004
President 1995 180,000 75,000 40,000 $100,774 30,031
- ---------------------------------------------------------------------------------------------------------------------
B. D. Flurry(6) 1997 $188,667 $110,000 40,000 0 $ 51,852
Chairman/Northern 1996 186,000 120,000 30,000 0 60,786
Region 1995 186,000 75,000 25,000 0 11,995
- ---------------------------------------------------------------------------------------------------------------------
Marsha M. Gassan(7) 1997 $166,667 $105,000 42,500 0 $ 31,062
Senior Executive Vice 1996 150,000 125,000 25,000 0 29,645
President and Chief 1995 112,500 60,000 20,000 $ 30,511 10,089
Financial Officer
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
(1) 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.
(2) 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, and a contribution in the amount of $4,400 made
by the Company to the 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 a contribution in the amount of $4,495 to the ESOP on
behalf of each Executive.
(3) For 1997 and 1996, includes in "All Other Compensation", a portion of the
premiums paid by the Company during the year for two split-dollar life
insurance policies and the actuarial values of the remaining premiums for
those 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 a portion of the premiums paid by the Company on a
split-dollar life insurance policy provided by the Company to Mr. Hansel
and the actuarial value of the remaining premiums for that policy
($32,882). For 1997 and 1996, "All Other Compensation" also includes the
Company's contribution 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). For 1996, "All Other Compensation" also
includes the Company's contribution to the Non-Qualified Target Benefit
Plan ($10,066).
11
<PAGE> 17
(4) 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" a
portion of the premiums paid by the Company during the year for a
split-dollar life insurance policy and the actuarial values of the
remaining premiums for that policy ($17,009 in 1997 and $17,855 in 1996).
For 1996, "All Other Compensation" also includes the Company's contribution
to the Non-Qualified Target Benefit Plan ($5,625).
(5) 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 for 1996). For 1997 and 1996, includes in "All Other Compensation" a
portion of the premiums paid by the Company during the year for two
split-dollar life insurance policies and the actuarial values of the
remaining premiums for 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" a portion of the
premiums paid by the Company on a split-dollar life insurance policy, and
the actuarial value of the remaining premiums for that policy in that year
($13,036).
(6) 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 for 1996). For 1997 and 1996, includes in
"All Other Compensation" a portion of the premiums paid by the Company
during the year for a split-dollar life insurance policy and the actuarial
values of the remaining premiums for that policy ($27,602 and $29,017). For
1996, "All Other Compensation" also includes the Company's contribution to
the Non-Qualified Target Benefit Plan ($10,968).
(7) For 1997 and 1996, "All Other Compensation" includes the Company's
contribution to the Non-Qualified Deferral Plan ($6,583 in 1997 and $2,567
in 1996) and the Supplemental Stock Compensation Plan ($1,661 in 1997 and
$490 in 1996). For 1997 and 1996, includes in "All Other Compensation" a
portion of the premiums paid by the Company during the year for a
split-dollar life insurance policy and the actuarial values of the
remaining premiums for that policy ($8,421 and $8,736). For 1996, "All
Other Compensation" also includes the Company's contribution to the
Non-Qualified Target Benefit Plan ($3,861).
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 more than 500 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.
12
<PAGE> 18
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:
- all options would be held for the entire 10-year term;
- a risk-free rate of 6.67%;
- a dividend yield of 2.39%; and
- 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 or her 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.
- -------------------------------------------------------------------------------
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
---------------------------------------------------------------
NUMBER OF % OF TOTAL GRANT DATE VALUE
SECURITIES OPTIONS/SARS ----------------------------------
UNDERLYING GRANTED TO GRANT DATE
OPTIONS/ EMPLOYEES IN EXERCISE PRICE EXPIRATION PRESENT
NAME SARS GRANTED FISCAL YEAR ($/SHARE) DATE VALUE($)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
- ------------------------------------------------------------------------------------------------------------------------
Ms. Gassan 42,500 2.7627% 13.4375 1/27/07 $170,000
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 19
- -------------------------------------------------------------------------------
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUES
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The following table shows certain information concerning all options
granted to the Executives by the Company. The Company did not grant any SARs to
any of the Executives during 1997, and there are no SARs outstanding relating to
any options granted by the Company.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FISCAL YEAR-END AT FISCAL YEAR-END
EXERCISED SHARES (#) ($)(1)
- ---------------------------------------------------------------------------------------------------------------------
SHARES ACQUIRED VALUE REALIZED EXERCISABLE(E)/ EXERCISABLE(E)/
NAME ON EXERCISE ON EXERCISE UNEXERCISABLE(U) UNEXERCISABLE(U)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mr. Hansel 0 0 1,597,185(E) $19,513,710(E)
476,507(U) $ 4,305,545(U)
- ---------------------------------------------------------------------------------------------------------------------
Mr. Boydstun 0 0 15,000(E) $ 179,063(E)
95,000(U) $ 727,813(U)
- ---------------------------------------------------------------------------------------------------------------------
Mr. Domingos 40,000 $300,627 35,781(E) $ 411,198(E)
102,500(U) $ 842,344(U)
- ---------------------------------------------------------------------------------------------------------------------
Mr. Flurry 0 0 12,500(E) $ 149,219(E)
82,500(U) $ 627,345(U)
- ---------------------------------------------------------------------------------------------------------------------
Ms. Gassan 15,000 $165,470 30,224(E) $ 364,685(E)
81,250(U) $ 607,422(U)
- ---------------------------------------------------------------------------------------------------------------------
</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 4, 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
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.
The following table shows the number of shares that will be awarded to each
of the Executives under this plan:
<TABLE>
<CAPTION>
- -------------------------------------------------------
NAME SHARES AWARDED
- -------------------------------------------------------
<S> <C>
Mr. Hansel 55,760
- -------------------------------------------------------
Mr. Boydstun 18,700
- -------------------------------------------------------
Mr. Domingos 18,700
- -------------------------------------------------------
Mr. Flurry 16,320
- -------------------------------------------------------
Ms. Gassan 16,320
- -------------------------------------------------------
</TABLE>
14
<PAGE> 20
In early 1998, the Executive Compensation Committee approved a 1998-2000
Performance Share Awards Plan. This plan would award shares of restricted stock
to the Executives and other members of management of the Company if its
performance-based goals are met over that period. If those goals are met,
restricted shares would be awarded under this plan in early 2001 based upon
performance for the period from January 1, 1998 through December 31, 2000. The
performance measures of the plan include asset quality, capital adequacy and
earnings. The asset quality and capital adequacy goals must be met before any
shares will awarded under the plan. If those goals are met, earnings and stock
price appreciation will determine the level of payout of shares under the plan.
The maximum number of shares that may be issued under the plan is 1,185,938.
Target awards have not yet been established for the Executives under this plan.
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>
- ------------------------------------------------------------------------------------------------------------
POSITION RETAINER PER MEETING
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
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 his or her entire
retainer in stock, he or 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. Six of the
Directors elected to take all of their retainer fees in stock, and three
Directors elected to take a portion of their retainers in stock in 1997. Five
Directors elected to receive their entire retainer fees in cash in 1997.
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 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
15
<PAGE> 21
upon his or her retirement served on the Board 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. Taxes on
this gift are paid by the Company. 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 Non-Qualified Deferral Plan available to
executives and senior managers permits participants to defer all or a portion of
their annual bonus and includes a make-up provision for 401(k) plan
contributions. 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 Stock Compensation 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.
16
<PAGE> 22
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.
17
<PAGE> 23
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 nonmanagement
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
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<PAGE> 24
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 strength, 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
loans), its leading indicator of asset quality, was 528% at year-end 1997
compared to 803% at year-end 1996. Finally, earnings per Common 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 for 1997 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
19
<PAGE> 25
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
1,540,300 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 members
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 ESOP.
The Company allocated $30 million to fund the ESOP, and the ESOP borrowed funds
from the Bank to make purchases of 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 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 Share Awards Plan. The Committee approved a Performance
Share Awards 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 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.
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<PAGE> 26
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.
- An annual bonus of up to 90% of the midpoint of the salaries of CEO's of
other banks in the Company's peer group.
- Stock option grants at the discretion of the Committee. In 1997, a grant
of 125,000 stock options was made to Mr. Hansel.
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 will be 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 under this
plan 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.
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<PAGE> 27
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 $502,884 for
1997. This includes a bonus under the 1997 CEO Bonus Plan of $352,044, or 88% of
the maximum bonus which was available in 1997 under that bonus plan. The total
bonus awarded to Mr. Hansel 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
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. The
Committee determined that Section 162(m) will not adversely affect the Company
in 1997.
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
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<PAGE> 28
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.
[STOCK PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
COMPANY/INDEX 1993 1994 1995 1996 1997
- --------------------------------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Hibernia..................................... $132.00 $135.00 $194.00 $245.00 $356.00
Peer Group................................... $109.00 $109.00 $168.00 $221.00 $384.00
S&P 500 Index................................ $110.00 $111.00 $153.00 $189.00 $251.00
</TABLE>
23
<PAGE> 29
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 $235,591 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 except one report on Form 4
required to be filed by Mr. Hearin, which reported the sale of approximately
8,500 shares of Common Stock and was delinquent.
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 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 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, 148,282,810 shares of Common Stock 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 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
24
<PAGE> 30
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 28, 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
25
<PAGE> 31
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 16, 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 of the Meeting, 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.
26
<PAGE> 32
- -------------------------------------------------------------------------------
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
27
<PAGE> 33
PROXY PROXY
HIBERNIA CORPORATION
P. O. BOX 61540 NEW ORLEANS, LOUISIANA 70161
SOLICITED BY BOARD OF DIRECTORS
FOR 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.
(Continued and to be signed on reverse side)
FOLD AND DETACH HERE
<PAGE> 34
PLEASE MARK
YOUR VOTES [X]
LIKE THIS
Proposal 1 - TO ELECT DIRECTORS
WITHHELD
FOR FOR ALL
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
Dr. James R. Peltier
FOR AGAINST ABSTAIN
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.
FOR AGAINST ABSTAIN
Proposal 3 - TO RATIFY THE APPOINTMENT OF ERNST
& YOUNG LLP AS INDEPENDENT AUDITORS [ ] [ ] [ ]
FOR HIBERNIA CORPORATION FOR 1998.
INSTRUCTION: IF YOU WISH TO WITHHOLD AUTHORITY SELECTIVELY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME ABOVE.
[ ] 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(s)___________________________________ Date ___________________, 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.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
FOR ALL THE ANSWERS ABOUT YOUR HIBERNIA STOCK . . .
ChaseMellon Shareholder Services*, which maintains shareholder records for
Hibernia, can answer a variety of questions about your account and provide other
services, too.
Just call or write if you want to:
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CERTIFICATES
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o CHANGE THE NAME IN WHICH STOCK IS REGISTERED, OR MAKE
A GIFT OF YOUR STOCK
o CONSOLIDATE ACCOUNTS
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o VERIFY THE NUMBER OF SHARES YOU OWN
o MAKE OPTIONAL CASH PAYMENTS TO PURCHASE ADDITIONAL
HIBERNIA STOCK
IT'S EASY!
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Or write to: ChaseMellon Shareholder Services
Securityholder Relations Department
85 Challenger Road, Overpeck Centre
Ridgefield Park, NJ 07660
For information on Hibernia's DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN,
write to:
ChaseMellon Shareholder Services
Dividend Reinvestment Department
85 Challenger Road, Overpeck Centre
Ridgefield Park, NJ 07660
[HIBERNIA CORPORATION LOGO]
* ChaseMellon Shareholder Services is transfer agent, registrar, paying agent,
exchange agent and reinvestment plan agent for the stock of Hibernia
Corporation.
GET YOUR HIBERNIA DIVIDENDS EVEN FASTER WITH DIRECT DEPOSIT
TO SIGN UP OR RECEIVE INFORMATION, CALL TOLL-FREE:
800-814-0305
Keep this card with your other important documents for future reference.
