<PAGE> 1
As filed with the Securities and Exchange Commission on March 31, 1994
Registration Number: 33-52251
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
AMENDMENT NO. 1
TO
FORM S-4
HANCOCK HOLDING COMPANY
<TABLE>
<S> <C> <C>
MISSISSIPPI 6022 64-0693170
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification
incorporation or organization) Code Number) Number)
</TABLE>
ONE HANCOCK PLAZA, 2510 14TH STREET
GULFPORT, MISSISSIPPI 39501
(601) 868-4000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
CHARLES A. WEBB, JR.
ONE HANCOCK PLAZA, 2510 14TH STREET
GULFPORT, MISSISSIPPI 39501
(601) 868-4000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
CARL J. CHANEY, ESQ.
HEIDELBERG & WOODLIFF, P.A.
POST OFFICE BOX 23040
125 SOUTH CONGRESS STREET
JACKSON, MISSISSIPPI 39225
(601) 948-3800
DATE OF COMMENCEMENT OF OFFERING: March 25, 1994.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. { }
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================================
TITLE OF EACH CLASS AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES OF TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
BE REGISTERED REGISTERED UNIT (1) PRICE (1) FEE
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$3.33 par value. . . . 527,235 shares $32.775 $17,280,127 $5,958.71
============================================================================================================
</TABLE>
(1) Pursuant to Rule 457(f), based on the market value of First State
Bank & Trust Company of East Baton Rouge Parish common stock that would be
converted into Hancock Holding Company common stock (the offered securities)
pursuant to the transaction described herein.
================================================================================
Index to Exhibits appears on sequential page number.
<PAGE> 2
HANCOCK HOLDING COMPANY
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
Form S-4 Item Proxy Statement Caption
- - ------------- -----------------------
<S> <C> <C>
1. Forepart of registration statement and
outside front cover page of Prospectus . . . . . Forepart of Registration Statement; Outside Front
Cover Page of Prospectus
2. Inside front and outside back cover of
Prospectus . . . . . . . . . . . . . . . . . . . Inside Front Cover Page of Prospectus; Available
Information; Table of Contents
3. Risk factors, ratio of earnings to fixed charges
and other information . . . . . . . . . . . . . Summary
4. Terms of the transaction . . . . . . . . . . . . Summary; The Merger; Comparative Rights of
Stockholders
5. Pro forma financial information . . . . . . . . Selected Financial Data and Per Share Data
6. Material contacts with the company being
acquired . . . . . . . . . . . . . . . . . . . . Summary; The Merger
7. Additional information required for reoffering
by persons and parties deemed to be
underwriters . . . . . . . . . . . . . . . . . . Not Applicable
8. Interest of named experts and counsel . . . . . Not Applicable
9. Disclosure of commission position on
indemnification for Securities Act liabilities . Not Applicable (See Part II, Item 20)
10. Information with respect to S-3 registrants . . Not Applicable
11. Incorporation of certain information by
reference . . . . . . . . . . . . . . . . . . . Documents Incorporated by Reference
12. Information with respect to S-2 or S-3
registrants . . . . . . . . . . . . . . . . . . Not Applicable
13. Incorporation of certain information by
reference . . . . . . . . . . . . . . . . . . . Not Applicable
14. Information with respect to registrants other
than S-2 or S-3 registrants . . . . . . . . . . Not Applicable
15. Information with respect to S-3 companies . . . Not Applicable
16. Information with respect to S-2 or S-3
companies . . . . . . . . . . . . . . . . . . . Not Applicable
17. Information with respect to companies other
than S-2 or S-3 companies . . . . . . . . . . . Summary; Selected Financial Data and Per Share
Data; Information About First State Bank; First
State Bank Management's Discussion and Analysis
of Financial Condition and Results of Operations;
Index to Financial Statements
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
18. Information if proxies, consents, or
authorizations are to be solicited . . . . . . . Notice of Special Meeting of Stockholders;
Summary; Special Meeting of Stockholders; The
Merger; Principal Stockholders of First State Bank;
Documents Incorporated by Reference
19. Information if proxies, consents, or
authorizations are not to be solicited or
in an exchange offer . . . . . . . . . . . . . . Not Applicable
</TABLE>
<PAGE> 4
FIRST STATE BANK & TRUST COMPANY
OF EAST BATON ROUGE PARISH
3033 Ray Weiland
Baker, Louisiana 70714
Dear Fellow Stockholder: March 25, 1994
You are cordially invited to attend a special meeting of the
stockholders of First State Bank & Trust Company of East Baton Rouge Parish
("First State Bank"), to be held at our main office, 3033 Ray Weiland, Baker,
Louisiana, on April 26, 1994, at 1:00 p.m. local time.
At the meeting, stockholders will be asked to approve and adopt an
Agreement and Plan of Reorganization, dated as of November 30, 1993, among
First State Bank, Hancock Holding Company and Hancock Bank of Louisiana. The
Agreement provides for the merger of First State Bank into Hancock Bank of
Louisiana and the conversion of each of the outstanding shares of common stock
of First State Bank into the right to receive approximately 9.1296 shares of
common stock of Hancock Holding Company.
The Board of Directors of First State Bank has carefully reviewed and
considered the terms and conditions of the proposed Agreement. The combination
with Hancock Bank of Louisiana is a significant step for First State Bank and
your vote on this matter is of great importance. THE BOARD OF DIRECTORS OF
FIRST STATE BANK HAS CONCLUDED THAT THE AGREEMENT AND THE PROPOSED
MERGER ARE IN THE BEST INTERESTS OF THE STOCKHOLDERS OF FIRST STATE
BANK AND RECOMMENDS THAT FIRST STATE BANK STOCKHOLDERS VOTE "FOR" THE
AGREEMENT.
The accompanying Notice of Special Meeting of Stockholders and
Prospectus/Proxy Statement contain a detailed description of the Merger and
other important information relating to Hancock Holding Company, First State
Bank, and the combined companies. If the Merger becomes effective,
stockholders will be informed of the procedures to be followed in exchanging
their stock certificates for certificates of Hancock Holding Company common
stock.
We urge you to review the enclosed materials carefully and to date,
sign, and return to First State Bank the accompanying Proxy in the enclosed
stamped envelope as soon as possible so that your shares will be represented at
the Special Meeting. Sending in your proxy now will not interfere with your
right to attend the meeting and vote your shares personally if you wish to do
so.
Sincerely,
/s/ THOMAS A. GAY
Thomas A. Gay
President and Chief Executive Officer
<PAGE> 5
FIRST STATE BANK & TRUST COMPANY
OF EAST BATON ROUGE PARISH
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 26, 1994
Notice is hereby given that a Special Meeting (the "Special Meeting")
of the stockholders of First State Bank & Trust Company of East Baton Rouge
Parish ("First State Bank") will be held at the offices of First State Bank,
3033 Ray Weiland, Baker, Louisiana, on April 26, 1994 at 1:00 p.m. local time
to consider and act upon:
1. A proposal to approve and adopt the Agreement and Plan of
Reorganization, dated as of November 30, 1993 (the
"Agreement", attached hereto as Exhibit "A"), by and among
First State Bank, Hancock Holding Company ("Hancock") and
Hancock Bank of Louisiana ("Hancock Bank LA"), a wholly owned
subsidiary of Hancock, pursuant to which: (a) First State Bank
will be merged (the "Merger") with and into Hancock Bank LA,
and (b) Each share of First State Bank common stock issued and
outstanding on the effective date of the Merger (the
"Effective Date") will be converted into a number of shares of
common stock of Hancock having an aggregate average market
value for the month of December, 1993, equal to 1.5 times the
book value (as defined) of the outstanding common stock of
First State Bank as of December 31, 1993, except $86,625
representing the first quarter, 1994 dividend, which shall be
based on 1.0 times said amount. Based on the average market
price of Hancock common stock for the month of December, 1993,
the conversion ratio shall be approximately 9.1296 shares of
Hancock common stock for each share of First State Bank common
stock.
2. Such other business as may properly come before the Special
Meeting or any adjournment thereof.
Only those stockholders of record at the close of business on
March 25, 1994 will be entitled to notice of and to vote at the Special
Meeting or any adjournment thereof.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF TWO-THIRDS OF THE
VOTING POWER PRESENT AT THE SPECIAL MEETING IS REQUIRED TO APPROVE
THE PROPOSAL TO ADOPT THE AGREEMENT. WHETHER OR NOT YOU PLAN TO
ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED
PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED STAMPED ENVELOPE.
By Order of the Board of Directors
/s/ RUFUS D. HAYES, Secretary
Rufus D. Hayes
<PAGE> 6
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS OF
FIRST STATE BANK & TRUST COMPANY OF EAST BATON ROUGE PARISH
TO BE HELD APRIL 26, 1994
PROSPECTUS
527,235 SHARES
HANCOCK HOLDING COMPANY
COMMON STOCK
Hancock Holding Company ("Hancock") has filed a Registration Statement
pursuant to the Securities Act of 1933, as amended, covering a maximum of
527,235 shares of Hancock's common stock, $3.33 par value ("Hancock Common
Stock"), which may be issued in connection with the proposed merger (the
"Merger") of First State Bank & Trust Company of East Baton Rouge Parish
("First State Bank") with Hancock Bank of Louisiana ("Hancock Bank LA"), a
wholly owned subsidiary of Hancock. This document constitutes a Proxy
Statement of First State Bank in connection with the transactions described
herein and a Prospectus of Hancock with respect to the registration of shares
of Hancock Common Stock to be issued to stockholders of First State Bank, if
such transactions are consummated.
On the Effective Date of the Merger, except as described herein, each
outstanding share of common stock, $10.00 par value, of First State Bank
("First State Bank Common Stock") will be converted into approximately 9.1296
shares of Hancock Common Stock determined in accordance with a formula related
to the average market price of Hancock Common Stock during the month of
December, 1993, equal to 1.5 times the book value of First State Bank Common
Stock, as of December 31, 1993, except $86,625 representing the first quarter,
1994 dividend, which shall be based on 1.0 times said amount, as described
herein under "The Merger - Terms of the Proposed Merger".
- - --------------------------------------------------------------------------------
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS, SAVINGS ACCOUNTS OR
OTHER OBLIGATIONS OF A DEPOSITORY INSTITUTION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------------
No person is authorized to give any information or to make any
representation not contained in this Prospectus/Proxy Statement and, if given
or made, such information or representation should not be relied upon as having
been authorized. This Prospectus/Proxy Statement does not constitute an offer
to sell, or a solicitation of an offer to purchase, the securities offered
hereby, nor does it constitute the solicitation of a proxy, in any jurisdiction
in which, or to any person to whom, it is unlawful to make such offer or
solicitation of an offer or proxy solicitation. Neither the delivery of this
Prospectus/Proxy Statement nor any distribution of the securities offered
hereby shall, under any circumstances, create any implication that there has
been no change in the affairs of Hancock or First State Bank since the date
hereof.
------------------------------
The date of this Prospectus/Proxy Statement is March 25, 1994.
<PAGE> 7
AVAILABLE INFORMATION
Hancock is subject to the reporting requirements of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). Copies of such reports, proxy
statements and other information can be obtained, at prescribed rates, from the
SEC by addressing written requests for such copies to the Public Reference
Section at the SEC at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549. In addition, such reports, proxy statements and other information can
be inspected at the public reference facilities referred to above and at the
regional offices of the SEC at 75 Park Place, Room 1228, New York, New York
10007 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661.
This Prospectus constitutes part of the Registration Statement on Form
S-4 of Hancock (including any exhibits and amendments thereto, the
"Registration Statement") filed with the SEC under the Securities Act of 1933,
as amended (the "Securities Act"), relating to the securities offered hereby.
This Prospectus does not include all of the information in the Registration
Statement, certain portions of which have been omitted pursuant to the rules
and regulations of the SEC. For further information about Hancock and the
securities offered hereby, reference is made to the Registration Statement.
The Registration Statement may be inspected and copied, at prescribed rates, at
the SEC's public reference facilities at the addresses set forth above.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed with the SEC by Hancock
pursuant to the Exchange Act are hereby incorporated by reference.
1. Hancock's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993.
2. The Proxy Statement of Hancock for it's Annual Meeting of
Stockholders to be held on February 24, 1994.
3. All other reports filed by Hancock pursuant to Section 13(a)
or 15(d) of the Exchange Act, since December 31, 1993.
All documents filed by Hancock pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
date of the special meeting of stockholders shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
of such documents. Any statement contained herein or any document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes hereof to the extent that a statement contained
herein or in any subsequently filed document which also is, or is deemed to be,
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed to constitute a
part hereof, except as so modified or superseded.
ii
<PAGE> 8
This Prospectus incorporates documents by reference which are not
presented herein or delivered herewith. These documents are available upon
request, without charge from Charles A. Webb, Jr., Corporate Secretary, Hancock
Holding Company, One Hancock Plaza, Gulfport, Mississippi 39501 (601)
868-4000. In order to ensure timely delivery of the documents, any request
should be made by April 18, 1994.
iii
<PAGE> 9
TABLE OF CONTENTS
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . ii
DOCUMENTS INCORPORATED BY REFERENCE . . . . . . . . . . . . . ii
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
THE COMPANIES . . . . . . . . . . . . . . . . . . . . . . 1
DATE, TIME AND PLACE OF SPECIAL MEETING . . . . . . . . . 1
RECORD DATE . . . . . . . . . . . . . . . . . . . . . . . 1
VOTE REQUIRED . . . . . . . . . . . . . . . . . . . . . . 2
PURPOSE OF SPECIAL MEETING . . . . . . . . . . . . . . . . 2
TERMS OF THE PROPOSED REORGANIZATION . . . . . . . . . . . 2
RECOMMENDATION OF THE BOARD OF DIRECTORS . . . . . . . . . 3
DISSENTERS' RIGHTS . . . . . . . . . . . . . . . . . . . . 3
EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS . . . . . . 3
TAX CONSEQUENCES TO STOCKHOLDERS . . . . . . . . . . . . . 3
RESALES OF HANCOCK COMMON STOCK BY AFFILIATES . . . . . . 4
ACCOUNTING TREATMENT . . . . . . . . . . . . . . . . . . . 4
REGULATORY APPROVALS AND OTHER CONDITIONS . . . . . . . . 4
SELECTED FINANCIAL DATA AND PER SHARE DATA . . . . . . . . . 5
SPECIAL MEETING OF STOCKHOLDERS . . . . . . . . . . . . . . . 6
PURPOSE OF SPECIAL MEETING . . . . . . . . . . . . . . . . 6
RECORD DATE AND VOTING RIGHTS . . . . . . . . . . . . . . 6
VOTE REQUIRED . . . . . . . . . . . . . . . . . . . . . . 6
PROXIES . . . . . . . . . . . . . . . . . . . . . . . . . 7
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . 7
BACKGROUND OF THE MERGER . . . . . . . . . . . . . . . . . 7
REASONS FOR THE MERGER . . . . . . . . . . . . . . . . . . 8
STRUCTURE OF THE TRANSACTION . . . . . . . . . . . . . . . 8
TERMS OF THE PROPOSED MERGER . . . . . . . . . . . . . . . 8
RECOMMENDATION OF THE BOARD OF DIRECTORS . . . . . . . . . 9
CONDITIONS OF THE MERGER . . . . . . . . . . . . . . . . . 9
EXCHANGE OF CERTIFICATES . . . . . . . . . . . . . . . . . 9
REGULATORY APPROVALS AND CONSIDERATIONS . . . . . . . . . 10
RESALES OF HANCOCK STOCK BY AFFILIATES . . . . . . . . . . 11
DISSENTERS' RIGHTS . . . . . . . . . . . . . . . . . . . . 11
ACCOUNTING TREATMENT . . . . . . . . . . . . . . . . . . . 13
CERTAIN FEDERAL INCOME TAX CONSEQUENCES . . . . . . . . . 14
EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . 15
INFORMATION ABOUT HANCOCK . . . . . . . . . . . . . . . . . . 16
PRICE RANGE OF AND DIVIDENDS ON HANCOCK COMMON STOCK . . . . 17
iv
<PAGE> 10
INFORMATION ABOUT FIRST STATE BANK . . . . . . . . . . . . . 18
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . 18
PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . 18
COMPETITION . . . . . . . . . . . . . . . . . . . . . . . 18
LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . 19
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . 19
EMPLOYEE BENEFIT PLANS . . . . . . . . . . . . . . . . . . 20
MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS . 20
FIRST STATE BANK MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . 21
PRINCIPAL STOCKHOLDERS OF FIRST STATE BANK . . . . . . . . . 29
DESCRIPTION OF HANCOCK COMMON STOCK . . . . . . . . . . . . . 29
AUTHORIZED AND OUTSTANDING COMMON STOCK . . . . . . . . . 29
VOTING RIGHTS . . . . . . . . . . . . . . . . . . . . . . 29
DIVIDEND RIGHTS . . . . . . . . . . . . . . . . . . . . . 29
DIVIDEND REINVESTMENT PLAN . . . . . . . . . . . . . . . . 30
PREEMPTIVE RIGHTS . . . . . . . . . . . . . . . . . . . . 30
FULLY PAID AND NONASSESSABLE . . . . . . . . . . . . . . . 30
LIQUIDATION RIGHTS . . . . . . . . . . . . . . . . . . . . 30
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES . . . 31
TRANSFER AGENT AND REGISTRAR . . . . . . . . . . . . . . . 31
CHANGES IN CONTROL . . . . . . . . . . . . . . . . . . . . 31
COMPARATIVE RIGHTS OF STOCKHOLDERS . . . . . . . . . . . . . 34
DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . 34
AMENDMENT OF ARTICLES OF INCORPORATION . . . . . . . . . . 34
AMENDMENT OF BYLAWS . . . . . . . . . . . . . . . . . . . 35
COMMON STOCK AND STOCKHOLDERS . . . . . . . . . . . . . . 35
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . 36
INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . F-1
EXHIBIT A - AGREEMENT AND PLAN OF REORGANIZATION . . . . . . A-1
EXHIBIT B - LOUISIANA BANKING LAWS;
RIGHTS OF DISSENTING STOCKHOLDERS . . . . . . . . . . . . . . B-1
v
<PAGE> 11
SUMMARY
The following is a brief summary of certain information with
respect to the Special Meeting of Stockholders of First State Bank & Trust
Company of East Baton Rouge Parish to be held on April 26, 1994 at 1:00 p.m.,
local time, and is not intended to be a complete statement of all
material facts regarding the Special Meeting. This summary is qualified in
its entirety by reference to more detailed information contained elsewhere
in this Prospectus/Proxy Statement, the accompanying exhibits and other
documents relating thereto. This Prospectus/Proxy Statement and related
Notice of Special Meeting and form of Proxy are first being mailed to
stockholders of First State Bank on March 25, 1994.
THE COMPANIES
First State Bank & Trust Company of East Baton Rouge Parish
("First State Bank") is a state bank chartered, organized and existing
under and pursuant to the laws of the State of Louisiana with its
principal executive offices located at 3033 Ray Weiland, Baker, Louisiana
70714. The telephone number of First State Bank's principal executive
offices is (504) 775-0350. First State Bank provides a range of
commercial and retail banking services through four (4) offices in East Baton
Rouge Parish, Louisiana. At December 31, 1993, First State Bank had total
assets of approximately $82 million and total deposits of approximately $70
million.
Hancock Holding Company ("Hancock") is a bank holding company
chartered, organized and existing under and pursuant to the laws of the
State of Mississippi with its principal executive offices located at One
Hancock Plaza, Gulfport, Mississippi 39501. The telephone number of
Hancock's principal executive offices is (601) 868-4000. Hancock owns all
of the issued and outstanding stock of Hancock Bank of Louisiana
("Hancock Bank LA"), a state bank chartered, organized and existing under
and pursuant to the laws of the State of Louisiana and maintaining its
principal place of business in Baton Rouge, Louisiana. Hancock also owns
all of the issued and outstanding stock of Hancock Bank, a state bank
chartered, organized and existing under and pursuant to the laws of the
State of Mississippi and maintaining its principal place of business in
Gulfport, Mississippi. At December 31, 1993, Hancock had total
consolidated assets of approximately $1,821 million and total
consolidated deposits of approximately $1,616 million.
DATE, TIME AND PLACE OF SPECIAL MEETING
The Special Meeting will be held on April 26, 1994 at
1:00 p.m., local time, at the offices of First State Bank, 3033 Ray
Weiland, Baker, Louisiana.
RECORD DATE
The Record Date of the Special Meeting is March 25, 1994
(the "Record Date"). Only stockholders of record at the closing of
business on the Record Date will be entitled to notice of and to vote at
the Special Meeting or any adjournment thereof.
1
<PAGE> 12
VOTE REQUIRED
The proposal to approve and adopt the Agreement and Plan of
Reorganization (the "Agreement") must be approved by the affirmative vote of
the holders of two-thirds (2/3) of the voting power present at the Special
Meeting. As of December 31, 1993, the directors and executive officers of
First State Bank and their affiliates beneficially owned approximately
fifty percent (50%) of the outstanding stock of First State Bank. All
of the directors and executive officers of First State Bank have
indicated their intention to vote their shares of First State Bank in favor
of the Agreement.
PURPOSE OF SPECIAL MEETING
The purpose of the Special Meeting is to consider and vote upon:
(1) a proposal to adopt the Agreement, which calls for the merger of First
State Bank with and into Hancock Bank LA, a wholly owned subsidiary of
Hancock; and (2) to transact such other business as may properly come
before the Special Meeting or any adjournment thereof.
TERMS OF THE PROPOSED REORGANIZATION
The following summary is qualified in its entirety by reference to
the full text of the Agreement which is attached hereto as Exhibit "A" and
incorporated by reference herein.
As of November 30, 1993, Hancock, First State Bank and Hancock Bank
LA entered into the Agreement pursuant to which:
a. First State Bank will be merged (the "Merger") with
and into Hancock Bank LA, and
b. Each share of First State Bank Common Stock
issued and outstanding on the effective date of
the Merger (the "Effective Date") will be
converted into a number of shares of Hancock
Common Stock having an aggregate average market
value for the month of December, 1993, equal to 1.5
times the book value (as defined) of the
outstanding First State Bank Common Stock as of
December 31, 1993, except $86,625 representing the
first quarter, 1994 dividend, which shall be based
on 1.0 times said amount.
For purposes of establishing the conversion ratio, the "market
value" of Hancock Common Stock shall be deemed to mean the average of the
daily average of the high and low prices of such common stock as reported on
the National Market Systems NASDAQ Quotation Service ("NASDAQ") for all of
the trading days during the month of December, 1993, and the "book value"
of First State Bank Common Stock shall mean the difference between the
dollar amount of total liabilities of First State Bank and the dollar
amount of total assets of First State Bank reflected on the books and
records of First State Bank as of December 31, 1993. No fractional shares
will be
2
<PAGE> 13
issued by Hancock in connection with the Merger, but in lieu thereof any
holder of First State Bank Common Stock who would otherwise be entitled to
receive a fraction of a share of Hancock Common Stock will be paid in
cash, without interest, for such fractional shares based upon the market
value defined above.
Based on the average market price of Hancock Common Stock for the
month of December, 1993, the conversion ratio shall be approximately
9.1296 shares of Hancock Common Stock for each share of First State Bank
Common Stock.
The Merger will become effective on the date the Commissioner
of Financial Institutions of Louisiana issues a Certificate of Merger and
following the satisfaction or waiver of all conditions set forth in the
Agreement (the "Effective Date").
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors unanimously recommends that stockholders
vote to approve the Agreement. See "The Merger - Reasons for the Merger,
and Recommendation of the Board of Directors".
DISSENTERS' RIGHTS
Stockholders of First State Bank who vote against the Merger and
who comply with the procedural requirements of the Louisiana Revised
Statutes 6:376 will be entitled to receive payment of the fair cash value of
their shares, if the Merger is effective upon approval by less than eighty
percent (80%) of First State Bank's total voting power. See "The Merger -
Dissenters' Rights".
EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS
Certain differences exist in the rights of holders of Hancock
Common Stock and holders of First State Bank Common Stock. These
differences relate primarily to the number, term and removal of directors;
changes in control of Hancock; indemnification of directors, officers
and employees of Hancock; and amending the Articles of Incorporation and
Bylaws of Hancock and First State Bank. See "Description of Hancock Common
Stock" and "Comparative Rights of Stockholders".
TAX CONSEQUENCES TO STOCKHOLDERS
It is anticipated the Merger will be a non-taxable reorganization
for federal income tax purposes and that no gain or loss for federal income
tax purposes will be recognized by the stockholders of First State Bank upon
distribution to them of shares of Hancock Common Stock. Stockholders of
First State Bank who receive only cash in exchange for their shares of
First State Bank Common Stock pursuant to the exercise of their
dissenters' rights and stockholders who receive cash in lieu of fractional
shares will, however, recognize income for federal income tax purposes.
3
<PAGE> 14
Stockholders are urged to consult with their tax advisors with
respect to the tax consequences of the Merger to them. See "The Merger -
Certain Federal Income Tax Consequences".
RESALES OF HANCOCK COMMON STOCK BY AFFILIATES
The Hancock Common Stock to be issued in connection with the Merger
has been registered under the Securities Act of 1933 (the "Securities Act")
and will be freely transferable, except that certain resale restrictions
apply to the sale or transfer of Hancock Common Stock issued pursuant to
the Agreement to directors, officers, and other affiliates of First State
Bank. See "The Merger - Resales of Hancock Common Stock by Affiliates".
ACCOUNTING TREATMENT
Hancock intends to account for the Merger as a
pooling-of-interests under generally accepted accounting principles.
Under the pooling-of-interests method, the surviving company and the
acquired company are treated, for financial statement purposes, as though
they had been combined historically. Accordingly, assets are not reflected
at fair value and no goodwill or other intangible assets are created in
connection with the Merger. See "The Merger - Accounting Treatment".
REGULATORY APPROVALS AND OTHER CONDITIONS
The Merger is subject to approval by the Federal Deposit
Insurance Corporation ("FDIC"), the Board of Governors of the Federal
Reserve System ("FRB"), and the Office of Financial Institutions of the
State of Louisiana. There can be no assurance whether such approvals
will be given, or will be given without unacceptable conditions and, if
given, the timing of such approvals. After approval by the First State Bank
stockholders, consummation of the Merger is also subject to a number of
conditions in addition to regulatory approvals. See "The Merger - Conditions
of the Merger".
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<PAGE> 15
SELECTED FINANCIAL DATA AND PER SHARE DATA
The following table sets forth selected financial information and per
share data on the dates and for the periods indicated of (1) First State Bank
historical, (2) Hancock historical, (3) Hancock pro forma giving effect to the
proposed transaction, and (4) 9.1296 shares of Hancock pro forma giving effect
to the proposed transaction. This table is qualified in its entirety by the
financial statements appearing elsewhere herein or incorporated by reference
herein or incorporated by reference herein.
(Amounts in thousands except per share data)
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
FIRST STATE BANK (HISTORICAL)(1)
Net interest income $ 3,156 $ 3,235 $ 2,785 $ 2,448 $ 2,158
Provision for loan losses 251 113 107 84 103
Net income 1,252 1,027 523 338 554
Net income per share 21.67 17.78 9.05 5.86 9.60
Dividends per share 6.00 6.00 6.00 5.00 4.00
Book value per share (period end) 199.98 184.31 172.54 169.49 169.77
Total assets (period end) 82,109 77,016 74,176 78,751 76,879
Stockholder's equity (period end) 11,549 10,644 9,964 9,788 9,804
HANCOCK HOLDING COMPANY (HISTORICAL)(2)
Net interest income $ 77,904 $ 74,325 $ 56,007 $ 39,359 $ 30,865
Provision for loan losses 4,231 7,655 4,686 2,939 3,355
Net income 22,116 19,211 12,388 7,971 6,640
Net income per share 3.15 2.74 2.21 1.46 1.21
Dividends per share 0.90 0.68 0.60 0.57 0.55
Book value per share (period end) 20.48 18.25 16.21 14.68 13.43
Total assets (period end) 1,821,050 1,735,192 1,554,536 1,405,002 980,604
Stockholder's equity (period end) 143,826 128,170 113,840 80,252 75,516
HANCOCK HOLDING COMPANY (PRO FORMA)(3)
(Unaudited)
Net interest income $ 81,060 $ 77,560 $ 58,792 $ 41,807 $ 33,023
Provision for loan losses 4,482 7,768 4,793 3,023 3,458
Net income 23,368 20,238 12,911 8,309 7,194
Net income per share 3.10 2.68 2.11 1.39 1.20
Book value per share (period end) 20.58 18.39 16.40 11.93 11.30
Total assets (period end) 1,903,159 1,812,208 1,628,712 1,483,753 1,057,483
Stockholder's equity (period end) 155,375 138,814 123,804 90,040 85,320
9.1296 SHARES OF HANCOCK HOLDING COMPANY (PRO FORMA)(4)
(Unaudited)
Net income per share $ 28.26 $ 24.47 $ 19.25 $ 12.66 $ 10.96
Dividend per share 8.22 6.21 5.48 5.20 5.02
Book value per share (period end) 187.88 167.86 149.71 108.88 103.17
</TABLE>
- - ---------------------------
(1) First State Bank's historical data for the years 1989 through 1993 has
been taken from the audited financial statements at those dates.
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<PAGE> 16
(2) Hancock's historical data for the years 1989 through 1993 has been
taken from the audited financial statements at those dates.
(3) The Hancock pro forma financial information reflects the results of
the combined operations of Hancock and First State Bank after giving
effect on a 100% pooling-of-interest basis to the combination of First
State Bank and Hancock.
(4) This data reflects the pro forma net income, dividends and book value
per share of 9.1296 shares of Hancock which would be received in the
merger assuming that First State Bank common stock was exchanged for
Hancock common stock. The computations are based on the exchange
ratio of 9.1296 shares of Hancock for 1.0 shares of First State Bank.
SPECIAL MEETING OF STOCKHOLDERS
This Prospectus/Proxy Statement and the accompanying form of Proxy are
being furnished to the stockholders of First State Bank and Trust Company of
East Baton Rouge Parish ("First State Bank") in connection with the
solicitation of proxies by the Board of Directors of First State Bank for use
at a special meeting of stockholders and any adjournment thereof (the "Special
Meeting"). The Special Meeting is to be held on April 26, 1994 at 1:00 p.m.,
local time, at First State Bank, 3033 Ray Weiland, Baker, Louisiana.
This Prospectus/Proxy Statement, the related Notice of Special Meeting of
Stockholders and the form of Proxy are first being mailed to stockholders of
First State Bank on March 25, 1994.
PURPOSE OF SPECIAL MEETING
The purpose of the Special Meeting is to consider and vote upon: (1) a
proposal to adopt the Agreement, which calls for the merger of First State Bank
with and into Hancock Bank of Louisiana ("Hancock Bank LA"), a wholly owned
subsidiary of Hancock; and (2) to transact such other business as may properly
come before the Special Meeting or any adjournment thereof.
RECORD DATE AND VOTING RIGHTS
The Board of Directors of First State Bank has fixed the close of
business on March 25, 1994 as the record date for determination of stockholders
entitled to notice of and to vote at the Special Meeting (the "Record Date").
As of the Record Date, First State Bank had outstanding and entitled to vote
57,750 shares of common stock ("First State Bank Common Stock"), each of which
is entitled to one (1) vote on each matter presented at the Special Meeting.
VOTE REQUIRED
The proposal to approve and adopt the Agreement and Plan of
Reorganization (the "Agreement") must be approved by the affirmative vote of
the holders of two-thirds (2/3) of the voting power present at the Special
Meeting. As of December 31, 1993, the directors and executive officers of
First State Bank and their affiliates beneficially owned approximately fifty
percent (50%) of the outstanding common stock of First State Bank. All
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<PAGE> 17
of the directors and executive officers of First State Bank have indicated
their intention to vote their shares of First State Bank in favor of the
Agreement.
PROXIES
Proxies for use at the Special Meeting accompany this Prospectus/Proxy
Statement. A stockholder who has given a proxy may revoke it at any time
before it is voted by either: (1) giving written notice of revocation to the
Secretary of First State Bank; (2) submitting a duly executed proxy bearing a
later date; or (3) appearing in person at the Special Meeting and voting in
person. All written notices of revocation and other communication with respect
to revocation of proxies should be addressed to the principal executive offices
of First State Bank as follows: First State Bank and Trust Company of East
Baton Rouge Parish, 3033 Ray Weiland, Baker, Louisiana 70714, Attention: Mr.
Thomas A. Gay.
All proxies validly submitted and not revoked will be voted in the
manner specified therein. If no specification is made, the proxies will be
voted in favor of the proposal to adopt the Agreement.
The Board of Directors of First State Bank is not aware of any other
matters to be presented for action at the Special Meeting, but if other matters
do properly come before the Special Meeting, it is intended that the shares
represented by the accompanying proxy will be voted by the persons named on the
proxy in accordance with their best judgement.
Solicitation of proxies will be made in person, by mail, or by
telephone or telegraph by the directors, officers, or regular employees of
First State Bank, none of whom will receive additional compensation for their
solicitation efforts. First State Bank will bear the cost of solicitation of
proxies from stockholders and reimburse brokers and others for their expenses
in forwarding solicitation material to beneficial owners of their voting stock.
Holders of shares are requested to complete, date, and sign the
accompanying proxy card and return it promptly to First State Bank in the
enclosed postage paid envelope.
THE MERGER
The information in this Prospectus/Proxy Statement concerning the
terms of the Merger is qualified in its entirety by reference to the full text
of the Agreement, which is attached hereto as Exhibit "A" and is incorporated
herein by reference.
BACKGROUND OF THE MERGER
During the last several years, there have been significant
developments in the banking industry. These developments have included the
increased emphasis and dependence on automation, specialization of products and
services, increased competition from other financial institutions, and a trend
toward consolidation and geographic expansion.
First State Bank and its Board of Directors concluded that it could
best serve its stockholders, employees, customers and communities by combining
with a regional banking organization, provided that First State Bank could
obtain a fair price for its stockholders.
7
<PAGE> 18
Accordingly, in October, 1993, First State Bank and Hancock entered into
negotiations which lead to the execution of a Letter of Intent on November 18,
1993. After further negotiations, the parties entered into the Agreement and
Plan of Reorganization (the "Agreement") dated as of November 30, 1993.
REASONS FOR THE MERGER
In deciding to enter into the Agreement, the Board of Directors of
First State Bank, after considering various alternatives, concluded that the
Agreement was in the best interest of First State Bank and its stockholders
because it would permit stockholders to exchange on favorable terms their
ownership interest in First State Bank for participation in the ownership of a
enterprise operating on a multi-state basis.
The Board of Directors also concluded that the stockholders of First
State Bank would benefit additionally from the Merger in that they would obtain
greater liquidity in their investment by obtaining shares of stock of a
corporation whose securities are more widely held and significantly more
actively traded.
Among the factors considered by the Board of Directors of First State
Bank in deciding to approve and recommend the terms of the Agreement were the
parties respective earnings and dividend records, financial conditions,
historical stock prices, managements, the position of each in the financial
institutions industry, and the outlook for each in the financial institutions
industry.
STRUCTURE OF THE TRANSACTION
If the Merger is approved by the stockholders of First State Bank, and
if necessary regulatory approvals are received and certain other conditions are
met, First State Bank will merge into Hancock Bank LA, a Louisiana state
chartered bank subsidiary of Hancock.
TERMS OF THE PROPOSED MERGER
The following summary is qualified in its entirety by reference to the
full text of the Agreement, which is attached hereto as Exhibit "A" and
incorporated by reference herein.
As of November 30, 1993, Hancock, First State Bank and Hancock
Bank LA entered into the Agreement pursuant to which: (1) First State Bank will
be merged (the "Merger") with and into Hancock Bank LA, and (2) Each share of
First State Bank Common Stock issued and outstanding on the effective date of
the Merger (the "Effective Date") will be converted into a number of shares of
common stock of Hancock ("Hancock Common Stock") having an aggregate average
market value for the month of December, 1993, equal to 1.5 times the book value
(as defined) of First State Bank Common Stock as of December 31, 1993, except
$86,625 representing the first quarter, 1994 dividend, which shall be based on
1.0 times said amount.
For purposes of establishing the conversion ratio, the "market value"
of Hancock Common Stock shall be deemed to mean the average of the daily
average of the high and low prices of such common stock as reported on the
National Market Systems NASDAQ
8
<PAGE> 19
Quotation Service ("NASDAQ") for all of the trading days during the month of
December, 1993, and the "book value" of the common stock of First State Bank
shall mean the difference between the dollar amount of total liabilities of
First State Bank and the dollar amount of total assets of First State Bank
reflected on the books and records of First State Bank as of December 31, 1993.
No fractional shares will be issued by Hancock in connection with the Merger,
but in lieu thereof any holder of First State Bank Common Stock who would
otherwise be entitled to receive a fraction of a share of Hancock Common Stock
will be paid in cash, without interest, for such fractional shares based upon
the market value defined above.
Based on the average market price of Hancock Common Stock for the
month of December, 1993, which was $32.775 per share, the conversion ratio
shall be approximately 9.1296 shares of Hancock Common Stock for each share of
First State Bank Common Stock.
The Merger will become effective on the date the Commissioner of
Financial Institutions of Louisiana issues a Certificate of Merger and
following the satisfaction or waiver of all conditions set forth in the
Agreement (the "Effective Date").
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF FIRST STATE BANK UNANIMOUSLY HAS
APPROVED THE AGREEMENT AND RECOMMENDS THAT FIRST STATE BANK'S
STOCKHOLDERS VOTE TO APPROVE THE AGREEMENT AT THE SPECIAL MEETING OF
STOCKHOLDERS.
CONDITIONS OF THE MERGER
Consummation of the Merger is subject to the satisfaction of a number
of conditions set forth in the Agreement, including but not limited to: (1) the
representations and warranties made by each party shall be true and correct in
all material respects at and as of the Closing; (2) the requisite approval of
the stockholders of First State Bank shall have been obtained; (3) all
necessary governmental approvals shall have been obtained, without any
condition or requirement that either party deems burdensome or that otherwise
would have a material adverse effect after the Effective Date; (4) the
effectiveness of the Registration Statement of which this Proxy Statement is a
part, and the absence of any stop order suspending such effectiveness or any
proceeding for such purpose; (5) the receipt of certain legal opinions; (6) the
availability of pooling-of-interests accounting treatment; and (7) the
performance of all obligations and compliance with all covenants required by
the Agreement prior to the Effective Date.
No assurance can be given whether all of the conditions to the Merger
will be satisfied or, if not satisfied, waived by any party permitted to do so.
EXCHANGE OF CERTIFICATES
Upon the Effective Date, holders of certificates previously
representing First State Bank Common Stock will cease to have any rights as
stockholders of First State Bank, and their sole rights will pertain to the
shares of Hancock Common Stock into which their shares
9
<PAGE> 20
will have been converted pursuant to the Merger, except for any such holders
who exercise statutory dissenters' rights for their shares. See "--
Dissenters' Rights".
As soon as practical after the Effective Date, Hancock will send to
each former stockholder of First State Bank a letter of transmittal for use in
submitting certificates formerly representing First State Bank Common Stock to
exchange for certificates of Hancock Common Stock, and, if applicable, cash in
lieu of a fractional share of Hancock Common Stock. If any certificate for
shares of Hancock Common Stock is to be issued in a name other than that in
which the certificate for shares of First State Bank Common Stock surrendered
for exchange is registered, the certificate so surrendered must be properly
endorsed or otherwise be in proper form for transfer. Following the effective
date, and until so surrendered, holders of certificates representing shares of
First State Bank Common Stock will cease to have any rights with respect to
First State Bank, and each such certificate will be deemed, for all purposes,
to evidence ownership of the number of shares of Hancock Common Stock into
which such shares have been converted. Under the Agreement, Hancock reserves
the right to withhold any cash dividends payable with respect to certificates
not surrendered by the holder thereof, after the sixth (6th) month following
the Effective Date. Cash dividends so withheld will be paid to the holder
thereof, without interest, upon proper presentation of certain certificates.
The Agreement provides that in the event that on or before the fifth
anniversary of the Effective Date any such holder fails to surrender either
such certificate or the documents and information contemplated by the letter of
transmittal and instructions to be provided to holders by Hancock for purposes
of the exchange of certificates, Hancock shall not have any obligations to
deliver the amount to which any such holder would have been entitled in
accordance with the provisions of the Agreement and any such holder shall not
be entitled to receive from Hancock any amount in substitution and exchange for
each share canceled and extinguished in accordance with the Agreement.
STOCKHOLDERS OF FIRST STATE BANK ARE REQUESTED NOT TO SUBMIT
STOCK CERTIFICATES UNTIL THEY HAVE RECEIVED WRITTEN NOTICE TO DO SO.
SUCH INSTRUCTIONS SHALL BE PROVIDED AT A LATER DATE.
REGULATORY APPROVALS AND CONSIDERATIONS
The acquisition of First State Bank by Hancock requires the prior
approval of the FDIC under the Bank Merger Act. The Bank Merger Act provides
that the FDIC may not approve any transaction which would result in a monopoly
or which would be in furtherance of any combination or conspiracy to monopolize
or to attempt to monopolize the business of banking in any part of the United
States, or any transaction the effect of which in any section of the United
States may be substantially to lessen compensation or tend to create a monopoly
or which in any other manner might restrain trade, unless the FDIC determines
that the anti-competitive effects of the proposed transaction are clearly
outweighed in the public interest by the probable effect of the transaction in
meeting the convenience and needs of the community to be served.
The Bank Merger Act provides that a transaction approved by the FDIC
may not be consummated for thirty (30) days after such approval. During such
thirty (30) day period,
10
<PAGE> 21
the United States Department of Justice may commence such legal action
challenging the transaction under the anti-trust laws. If the Justice
Department does not commence a legal action during such period, the transaction
may be consummated and the Justice Department may not thereafter challenge the
transaction except in an action commenced under Section 2 of the Sherman
Anti-Trust Act.
Consummation of the transaction also is subject to the separate
approval of the Office of Financial Institutions of the State of Louisiana and
the Board of Governors of the Federal Reserve System.
Hancock and First State Bank believe that the transaction will be
approved by the FDIC, FRB, and the Louisiana Office of Financial Institutions
and is not subject to challenge by the Justice Department under the anti-trust
laws. However, there can be no assurance that these agencies will concur in
this assessment.
RESALES OF HANCOCK STOCK BY AFFILIATES
The Hancock Common Stock to be issued in connection with the Merger
has been registered under the Securities Act of 1933 (the "Securities Act") and
will be freely transferable, except for shares received by persons deemed to be
"affiliates" of First State Bank at the time of the Special Meeting.
Affiliates of First State Bank are generally defined as persons who control,
are controlled by, or are under common control with First State Bank.
Affiliates of First State Bank may not sell, pledge, transfer, or otherwise
dispose of the Hancock Common Stock issued to them in exchange for their First
State Bank Common Stock except pursuant to an effective Registration Statement
under the Securities Act covering such shares, or in compliance with Rule 145
under the Securities Act or other applicable exemption from the registration
requirements of the Securities Act. In addition, the Securities and Exchange
Commission's administrative policy regarding the use of pooling-of-interests
accounting treatment (see "-- Accounting Treatment") requires that affiliates
of First State Bank not dispose of any shares of Hancock Common Stock received
in the Merger until the combined financial results of at least thirty (30) days
of post-merger operations of Hancock and First State Bank have been made
publicly available. Hancock expects to make such combined results publicly
available as soon as reasonably practicable. The Agreement provides that First
State Bank will use its best efforts to cause each of its affiliates to deliver
to Hancock, not later than thirty (30) days prior to the Effective Date, an
affiliate agreement in which such person undertakes to be bound by the
foregoing restrictions. The stock certificates representing Hancock Common
Stock issued to First State Bank affiliates in the Merger may bear a legend
restricting transfer except in compliance with the Securities Act.
DISSENTERS' RIGHTS
Louisiana law governs the rights of dissenting stockholders. Holders
of shares who vote against the Merger and who comply with the procedural
requirements of the Louisiana Revised Statutes 6:376 will be entitled to
receive payment of the fair cash value of their shares as of the day before the
date of the Special Meeting, as determined by agreement between the stockholder
and Hancock or by a court of competent jurisdiction if the stockholder and
Hancock are unable to agree upon the fair cash value, if the Merger is
11
<PAGE> 22
approved by less than eighty percent (80%) of First State Bank's total voting
power. If the Merger is approved by eighty percent (80%) or more of First
State Bank's total voting power, Louisiana Revised Statutes 6:376 does not
afford any dissenter's rights. A copy of this provision is reproduced as
Exhibit "B". Set forth below is a summary of the rights of dissenting First
State Bank stockholders under Louisiana law, which is qualified in its entirety
by reference to Exhibit "B".
To exercise the right of dissent, a stockholder must (1) file with
First State Bank a written objection to the Merger prior to or at the Special
Meeting and (2) vote his shares (in person or proxy) against the Merger at the
Special Meeting. Neither a vote against the Merger nor a specification and a
proxy to vote against the Merger will in and of itself constitute the necessary
written objection to the Merger. Moreover, by voting in favor of, or
abstaining from voting on the Merger, or by returning the enclosed proxy
without instructing the proxy holder to vote against the Merger, a stockholder
waives his rights under Section 376.
If the Merger is approved by less than eighty percent (80%) of First
State Bank's total voting power, then promptly after the Effective Date of the
Merger, Hancock will give written notice of the consummation of the Merger by
registered mail to each stockholder of First State Bank who filed a written
objection to the Merger and voted against it. Such notice will state only that
such Merger has been consummated and will not repeat the requirements stated
herein for perfecting dissenters' rights. Within twenty (20) days after the
date of mailing of such notice, the stockholder must file with Hancock a
written demand for payment for his shares at their cash value as of the day
before the date of the Special Meeting at which he voted against the Merger and
must state the amount demanded and a post office address to which Hancock may
reply. The stockholder must also deposit the certificate(s) representing his
shares of stock of First State Bank in escrow with a chartered bank or trust
company located in the Parish of the registered office of First State Bank.
The registered office of First State Bank is located in East Baton Rouge
Parish, Louisiana. With the above mentioned demand, the stockholder must also
deliver to Hancock the written acknowledgement of such bank or trust company
that it holds a certificate(s), duly endorsed and transferred to Hancock, upon
the sole condition that the certificate(s) will be delivered to Hancock upon
payment of the value of the shares in accordance with Section 376. Unless the
stockholder objects to or votes against the Merger, demands payment, deposits
his certificates and delivers the required acknowledgement in accordance with
the aforementioned procedures and within the time period set forth above, the
stockholder shall conclusively be presumed to have acquiesced in the Merger and
shall lose any right to seek payment pursuant to Section 376.
If Hancock does not agree to the amount demanded by the stockholder,
or does not agree that payment is due, it will, within twenty (20) days after
receipt of such demand and acknowledgement, notify such stockholder in writing
of either (1) the amount it will agree to pay or (2) that it does not believe
that any payment is due. If the stockholder does not agree to accept the
offered amount, or disagrees with Hancock's assertion that no payment is due,
the stockholder must, within sixty (60) days after the receipt of such notice,
file suit against Hancock in the District Court for the Parish of East Baton
Rouge for a judicial determination of the fair cash value of the shares. Any
stockholder entitled to file such suit may, within such sixty (60) day period,
but not thereafter, intervene as a plaintiff in any such
12
<PAGE> 23
suit filed against Hancock by another stockholder of First State Bank for a
judicial determination of the fair cash value of such other stockholders'
shares. If a stockholder fails to bring or to intervene in such a suit within
the applicable sixty (60) day period, the stockholder will be deemed to have
consented to accept Hancock's statement that no payment is due or, if Hancock
does not contend that no payment is due, to accept the amount specified by
Hancock in its notice of disagreement.
When the fair value of the shares has been agreed upon between the
stockholder and Hancock or when Hancock has become liable for the value
demanded by the stockholder because of its failure to give notice of
disagreement and of the value it will pay or when the stockholder has become
bound to accept the value Hancock agrees is due because of his failure to bring
suit within sixty days after receipt of Hancock's notice of disagreement, the
action of the stockholder to recover such value must be brought within five
years from the date the value was agreed upon or the liability of Hancock
became fixed.
If Hancock, in its notice of disagreement, offered to pay the
dissatisfied stockholder on demand an amount in cash deemed by it to be the
fair cash value of his shares, and if, on the institution of a suit by the
dissatisfied stockholder, Hancock deposits with the court the amount, if any,
which it specified in its notice of disagreement then the cost of the suit or
intervention will be charged to the stockholder if the amount finally awarded
to the stockholder, exclusive of interests and costs, is equal to or less than
the amount so deposited; otherwise, the cost and judicial interest on the
amount of the award in excess of the amount so deposited, will be charged to
Hancock.
Upon filing a demand for the value of his shares, a stockholder ceases
to have any rights of a stockholder except the rights created by Section 376.
The stockholders demand may be withdrawn voluntarily at any time before Hancock
gives it's notice of disagreement, but thereafter only with the written consent
of Hancock. If withdrawn, or if the stockholder otherwise loses his
dissenters' rights, such stockholder will be restored to his rights as a
stockholder of Hancock as of the time of filing of his demand for value.
Prior to the Special Meeting, dissenting stockholders' of First State
Bank should send any communication regarding their rights to Rufus D. Hayes,
Secretary, First State Bank & Trust Company of East Baton Rouge Parish, Post
Office Box 487, Baker, Louisiana 70714. Between the date of the Special
Meeting and the Effective Date of the Merger any communications regarding
dissenters rights should also be addressed by the stockholders to Rufus D.
Hayes, Secretary, First State Bank & Trust Company of East Baton Rouge Parish,
Post Office Box 487, Baker, Louisiana 70714. On or after the Effective Date
of the Merger, dissenting stockholders should send any communication regarding
their rights to Charles A. Webb, Jr., Secretary, Hancock Holding Company, Post
Office Box 4019, Gulfport, Mississippi 39502. All communications of
dissenting stockholders should be signed by or on behalf of the dissenting
stockholder in the form in which the stockholders' shares are registered on the
books of First State Bank.
ACCOUNTING TREATMENT
It is expected that the Merger will be accounted for under the
pooling-of-interests accounting method. Under the pooling-of- interests
method, the historical basis of the assets
13
<PAGE> 24
and liabilities of First State Bank will be combined with the assets and
liabilities of Hancock Bank LA as of the Effective Date, as if they had
historically been combined. In connection therewith, if requested by Hancock,
Hancock shall have received, on or before the Closing Date, a letter from
Deloitte & Touche (or any other accountants of Hancock's choosing) dated as of
the Closing Date as to whether the transactions contemplated by the Agreement
should appropriately be treated by Hancock as a "pooling-of-interests" for
accounting purposes.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Because of the complexities of the federal, state and local income tax
laws, it is recommended that the First State Bank stockholders consult their
own advisors concerning the specific tax consequences to them of the
transactions, including the applicability and effect of federal, state, local
and other tax laws.
The following is a brief summary of the material federal income tax
consequences of the Agreement and the Merger. This summary does not purport to
cover all federal income tax consequences, and does not contain information
with respect to state, local or other tax laws.
Neither Hancock nor First State Bank has requested or will receive an
advance ruling from the Internal Revenue Service as to the tax consequences of
the Merger. If requested by Hancock, Heidelberg & Woodliff, P.A. shall render
an opinion to Hancock and First State Bank concerning certain federal income
tax consequences of the proposed transaction under federal income tax law. If
given, it shall be such firms opinion that, based upon the assumption that the
transaction is consummated in accordance with Louisiana law and certain other
customary assumptions and representations made by management of Hancock and
First State Bank, the transaction will constitute a reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986, as amended, (the
"Code") and therefore will have the following federal income tax consequences
to the First State Bank stockholders:
1. The Merger will constitute a reorganization within the meaning
of Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code.
2. No gain or loss will be recognized by a stockholder of First
State Bank upon the exchange of First State Bank Common Stock
solely for shares of Hancock Common Stock. (Section 354(a)).
3. The basis of the Hancock Common Stock received by a
stockholder of First State Bank upon the exchange of First
State Bank Common Stock for shares of Hancock Common Stock
will, in each case, be the same as the basis of the First
State Bank Common Stock surrendered in exchange therefore.
(Section 358(a)(1)).
4. The holding period of the Hancock Common Stock received by a
stockholder of First State Bank receiving Hancock Common Stock
will, in each case, include the period during which the First
State Bank Common Stock
14
<PAGE> 25
surrendered in exchange therefore was held (provided that such
common stock of First State Bank was held by such stockholder
as a capital asset at the time of the transaction). (Section
1223(1)).
5. Cash, if any, received by a stockholder of First State Bank in
lieu of a fractional share interest of Hancock Common Stock
will be treated as having been received as a distribution in
redemption of the fractional share interest to which the
stockholder would otherwise be entitled, and will be subject
to the provisions and limitations of Section 302 of the Code.
Where such exchange qualifies under Section 302(a), such
stockholder will realize and recognize a capital gain or loss
assuming the First State Bank Common Stock was held as a
capital asset in such stockholder's hand at the time of the
Merger.
The above federal tax consequences do not apply to any stockholders of
First State Bank who exercise their dissenters rights and receive only cash in
exchange for their shares of First State Bank Common Stock. Such stockholders
will be treated as having received a distribution in redemption of their
shares, which will result in such stockholders realizing income for federal
income tax purposes. Any stockholder of First State Bank exercising
dissenters' rights is advised to consult his own tax advisor.
If given, the Heidelberg & Woodliff, P.A. tax opinion will not address
any state, local, or other tax consequences of the proposed transaction. First
State Bank stockholders should consult their own tax advisors with respect to
the tax consequences of the proposed transaction to them individually,
including tax consequences under state or local law.
EXPENSES
Generally, all accounting, legal and other costs, fees and expenses
incurred in connection with the Agreement and Merger will be paid by the party
incurring such expense, except that Hancock will bear all costs and fees
related to regulatory approval and the Securities and Exchange Commission
registration and First State Bank will bear all costs related to conducting the
Special Meeting and obtaining stockholder approval.
15
<PAGE> 26
INFORMATION ABOUT HANCOCK
Hancock Holding Company ("Hancock") is a multi-bank holding company
headquartered in Gulfport, Mississippi with total consolidated assets of
approximately $1,821 million at December 31, 1993. Hancock operates a total of
54 banking offices and 80 automated teller machines in the States of
Mississippi and Louisiana through two wholly owned bank subsidiaries, Hancock
Bank, Gulfport, Mississippi, organized in 1899 ("Hancock Bank MS") and Hancock
Bank of Louisiana, Baton Rouge, Louisiana, organized in August 1990 ("Hancock
Bank LA").
Both Hancock Bank MS and Hancock Bank LA are community oriented and
focus primarily on offering commercial, consumer and mortgage loans and deposit
services to individuals and small to middle market businesses in their
respective market areas. Hancock's operating strategy is to provide its
customers with the financial sophistication and breath of products of a
regional bank while successfully retaining the local appeal and level of
service of a community bank.
Hancock has expanded its market area through a series of mergers and
branch and deposit acquisitions. Beginning with the 1985 acquisition of the
Pascagoula-Moss Point Bank in Pascagoula, Mississippi ("PMP"), Hancock has
assumed approximately $556.2 million in deposit liabilities and acquired
approximately $611.9 million in assets through acquisitions or purchase and
assumption transactions involving three (3) commercial banks, one (1) savings
association and one (1) savings association branch.
The majority of Hancock's acquisition activity occurred in 1990 and
1991, beginning with the June 1990, merger of Metropolitan National Bank
("MNB") into Hancock Bank MS. At the time of its acquisition, MNB had total
assets of approximately $98.8 million and total deposit liabilities of
approximately $95.1 million.
Also in June of 1990, pursuant to a Purchase and Assumption Agreement,
Hancock Bank MS acquired the Poplarville, Mississippi branch of Unifirst Bank
for Savings from the Resolution Trust Corporation ("RTC"). The acquisition
increased Hancock's total assets by approximately $7.8 million and its total
deposit liabilities by approximately $7.4 million.
In August 1990, Hancock formed Hancock Bank LA for the purpose of
assuming the deposit liabilities and acquiring the consumer loan portfolio,
corporate credit card portfolio and non-adversely classified securities
portfolio of AmBank, Baton Rouge, from the FDIC. As a result of the
transaction, Hancock Bank LA acquired fifteen (15) branch locations in the
greater Baton Rouge area, approximately $337.5 million in assets and
approximately $300.9 million in deposit liabilities.
In August 1991, Hancock Bank MS acquired certain assets and deposit
liabilities of Peoples Federal Savings Association, Bay Saint Louis,
Mississippi, from the RTC. As a result of the transaction, Hancock acquired
assets of approximately $39.0 million and deposit liabilities of approximately
$38.5 million.
16
<PAGE> 27
Hancock's regulatory capital at December 31, 1993, both on a
historical basis and after giving pro forma effect to the Merger, as of that
date, substantially exceeds all current minimum regulatory requirements.
Additional information concerning Hancock's business, and information
concerning the principal holders of Hancock Common Stock, the directors and
executive officers of Hancock, executive compensation, and certain
relationships and related transactions is contained in the Annual Report on
Form 10-K of Hancock for the year ended December 31, 1993 (the "Hancock 10-K")
and, in the Proxy Statement for the February 24, 1994 Annual Meeting of
Stockholders of Hancock (incorporated into the Hancock 10-K by reference). All
of such information is hereby incorporated into this Prospectus/Proxy Statement
by reference.
PRICE RANGE OF AND DIVIDENDS ON HANCOCK COMMON STOCK
Hancock's Common Stock is traded in the over-the-counter market and
quoted on the NASDAQ National Market System under the symbol "HBHC". The
following table sets forth the per share high and low last sale prices of
Hancock Common Stock as reported on the NASDAQ National Market System. These
prices do not reflect retail mark-ups, mark-downs or commissions.
<TABLE>
<CAPTION>
HIGH BID LOW BID CASH
OR LAST OR LAST DIVIDENDS
SALE PRICE SALE PRICE PAID
---------- ---------- ----
<S> <C> <C> <C>
1992
1st Quarter $22.75 $19.75 $0.15
2nd Quarter $25.00 $20.50 $0.15
3rd Quarter $27.75 $24.75 $0.15
4th Quarter $30.75 $24.75 $0.23
1993
1st Quarter $28.75 $28.25 $0.17
2nd Quarter $35.00 $30.50 $0.17
3rd Quarter $32.75 $28.75 $0.17
4th Quarter $34.50 $32.00 $0.39
</TABLE>
The initial public announcement of the Letter of Intent was made on
November 18, 1993. On November 17, 1993, the reported closing sales price of
Hancock Common Stock was $34.00 dollars. As of November 30, 1993, the parties
entered into the Agreement. On November 29, 1993, the reported closing sales
price was $33.50 dollars. On March 24,
17
<PAGE> 28
1994 the reported closing sales price was $30.00 dollars. On February 28,
1994, Hancock's 7,177,966 outstanding shares were owned by 2,700 stockholders
of record.
As a bank holding company, Hancock depends on dividend payments from
its subsidiary banks in order to meet its obligations and to pay dividends.
The payment of dividends from the banks to Hancock is regulated and restricted
by the bank's primary regulators. Information about restrictions on the
ability of Hancock to pay dividends is contained in Item 1 of the Hancock 10-K
under the caption "Federal Regulation", which information is incorporated
herein by reference.
INFORMATION ABOUT FIRST STATE BANK
BUSINESS
First State Bank is a Louisiana state bank engaged in business as a
commercial bank in East Baton Rouge Parish, Louisiana. First State Bank was
organized in 1960 and currently maintains its headquarters in Baker, Louisiana.
In addition, First State Bank currently operates three (3) full service
branches in East Baton Rouge Parish.
As of December 31, 1993, First State Bank had total assets of
approximately $82 million and 52 full time equivalent employees.
PROPERTIES
First State Bank's main office is located at 3033 Ray Weiland, Baker,
Louisiana in a 11,250 square foot facility which is owned fee simple. First
State Bank also owns a 3,150 square foot branch facility located at 11659 Plank
Road; a 3,180 square foot branch facility located at 13585 Hooper Road in Baton
Rouge; and currently leases a 2,370 square foot branch facility located at
15016 Florida Blvd. in Baton Rouge.
COMPETITION
First State Bank encounters vigorous competition in its market area
from a number of sources, including bank holding companies and commercial
banks, thrift institutions, other financial institutions and financial
intermediaries. Regional interstate banking laws and other recent federal and
state laws have resulted in increased competition from both conventional
banking institutions and other businesses offering financial services and
products. First State Bank competes in the East Baton Rouge Parish market with
other banks and financial institutions, many or all of which have greater
financial resources than First State Bank. At December 31, 1993, there were
approximately 115 commercial bank branches, 10 savings bank branches, and 40
credit union branches competing in East Baton Rouge Parish.
First State Bank provides a full range of competitive retail and
commercial banking services. The deposit services offered include various
types of personal and business checking accounts, savings accounts, money
market investment accounts, certificates of deposits, automated teller machines
networking into retail teller systems and retirement
18
<PAGE> 29
accounts. Lending services include consumer loans, various types of mortgage
loans for residential and commercial, personal lines of credit, home equity
loans, credit cards, commercial loans to small and medium size businesses and
professional organizations, and letters of credit. First State Bank provides
drive-through facilities for customer convenience and night depository boxes.
First State Bank also offers safe deposit box facilities, cashiers checks,
money orders, travelers check, U.S. Saving Bonds, bank-by-mail and wire
transfers. First State Bank does not offer trust services, although it does
have limited trust powers.
LEGAL PROCEEDINGS
First State Bank is not a party to any material legal proceeding other
than ordinary routine litigation incidental to its business.
MANAGEMENT
Set forth in the following table is certain information regarding the
directors and executive officers of First State Bank as of December 31, 1993:
<TABLE>
<CAPTION>
No. of Shares Percent of
Name and Address Age Office and Principal Occupation Beneficially Owned Common Stock
- - ---------------- --- ------------------------------- ------------------ ------------
<S> <C> <C> <C> <C>
W. R. Allison 67 President of Merchants 1,441 2.4953%
155 Bayou Circle Bank & Trust Co.,
Gulfport, MS 39501 Bay Saint Louis, MS
Guy C. Billups, Jr. 66 Chairman of the Board of 20,995.75 36.3563%
124 Allen Drive Merchants Bank & Trust Co.,
Gulfport, MS 39507 Bay Saint Louis, MS
Guy C. Billups, III 36 Bank Officer of 2,177 3.7697%
13863 Gulfhaven Road Merchants Bank & Trust Co.,
Gulfport, MS 39503 Bay Saint Louis, MS
A. T. Furr, Jr. 71 Real Estate Investor 934 1.6173%
7125 Kent Drive
Baker, LA 70714
T. A. Gay 61 President of First State 2,092 3.6225%
619 Chaleur Bank
Baker, LA 70714
Rufus D. Hayes 80 Administrative Law Judge 770 1.3333%
6111 Krista Lane
Baton Rouge, LA 70808
J. C. Keller, Sr. 68 Retired Oil Distributor 100 .1732%
3536 Buffwood Drive
Baker, LA 70714
Mansel S. Slaughter 76 Cattle Rancher 100 .1732%
16455 Twin Oaks Drive
Baker, LA 70714
</TABLE>
19
<PAGE> 30
<TABLE>
<S> <C> <C> <C> <C>
B. M. Stone, Jr. 75 Retired Pharmacist 275 .4762%
509 Oak Street
Picayune, MS 39466
Kelley W. Sharpe 45 Senior Vice President of - -
3512 Monticello Blvd. First State Bank
Baton Rouge, LA 70808
Steve G. Stein 36 Vice President of First - -
3806 Epperson Street State Bank
Baker, LA 70714
</TABLE>
Prior to March 9, 1993, directors were paid $300 for attendance at
each meeting of the Board of Directors and effective March 9, 1993 directors
were paid $400 for attendance at each meeting of the Board of Directors. The
Secretary of the Board prior to March 9, 1993 was paid $350 for attendance at
each meeting of the Board of Directors and subsequent to March 9, 1993 receives
$450 for attendance at each meeting of the Board of Directors.
No officer of First State Bank received an annual salary and bonus
exceeding $100,000. Non-cash compensation did not exceed ten percent (10%) of
any such officers cash compensation.
EMPLOYEE BENEFIT PLANS
Employees of First State Bank are entitled to paid vacation and paid
sick leave and receive benefits under the Bank's group medical, life and
disability insurance plans. The Bank also maintains a 401-k retirement plan
for eligible employees who have reached age 18. The plan allows First State
Bank employees to elect to defer up to ten percent (10%) of his or her total
compensation, including, overtime, commissions and bonuses. In addition, First
State Bank will make a matching contribution equal to 100% of the employees
deferral up to a maximum of five percent (5%) of his or her total compensation.
First State Bank can also make discretionary contributions to the plan, which
amounts can vary year to year. Contributions to the plan by First State Bank
in 1993 amounted to $63,653 dollars.
MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
No established market for First State Bank Common Stock exists. Its
shares are held by approximately 85 stockholders. First State Bank shares are
not traded on any exchange. While First State Bank is aware of the existence
of transactions in its common stock in 1992 and 1993, the only transaction for
which it has information concerning the price at which the common stock was
transferred was for 33 shares which transferred in the third quarter of 1992 at
a price of $50 dollars per share.
It has been the practice of First State Bank to pay cash dividends of
$6.00 per share each year beginning in 1991. The amount of dividends, if any,
that may be declared by First State Bank if the Merger is not consummated will
necessarily depend on many factors, including earnings, capital and regulatory
requirements and business conditions as they effect First State Bank.
20
<PAGE> 31
FIRST STATE BANK MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
First State Bank results of operations are primarily affected by its
net interest income. Net interest income is defined as interest and fees on
investments and loans, less interest expense on deposits. Interest from
investments and loans is a function of the average balance of the principal
outstanding during the period and the average rates earned. First State Bank's
cost of funds is a function of the average rates paid on such deposits. Gains
or losses on investments and loans also affect income. First State Bank's net
income is further affected by the level of various overhead expenses such as
employee compensation and benefits, occupancy costs, and insurance.
INTEREST RATE SENSITIVITY
The relationship between earning assets and interest-bearing
liabilities that are considered to be interest rate sensitive within given
maturity ranges is called the asset or liability funding gap, depending on
whether such earning assets exceed or are exceeded by interest-sensitive
liabilities.
As a policy, budgeted financial goals are monitored on a quarterly
basis by First State Bank's Asset/Liability Management Committee, and
ultimately the Board of Directors where the actual dollar change in net
interest income, given different interest rate movements, is reviewed. Certain
parameters have also been established by the Board of Directors which are
monitored by the Asset/Liability Management Committee on a quarterly basis.
The analysis on the following page indicates the detailed rate sensitivity of
earning assets and interest-bearing liabilities as of December 31, 1993, and
the cumulative rate sensitivity as of December 31, 1992 and 1991.
21
<PAGE> 32
INTEREST RATE SENSITIVITY ANALYSIS
AS OF DECEMBER 31, 1993
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
REPRICING WITHIN
---------------------------------------------------
0-90 91-365 OVER 1
DAYS DAYS YEAR TOTAL
---- ---- ---- -----
<S> <C> <C> <C> <C>
EARNING ASSETS
Loans $ 2,595 $ 4,845 $ 6,990 $14,430
Investment
Securities 5,267 1,327 44,048 50,642
Funds Sold 12,205 - - 12,205
-------- -------- -------- -------
Total earning assets $ 20,067 $ 6,172 $ 51,038 $77,277
======== ======== ======== =======
INTEREST-BEARING
LIABILITIES
Interest-bearing
deposits $ 43,496 $ 7,984 $ 2,432 $53,912
-------- -------- -------- -------
Total interest-bearing
liabilities $ 43,496 $ 7,984 $ 2,432 $53,912
======== ======== ======== =======
Interest-sensitivity
gap $(23,429) $ (1,812) $ 48,606 $23,365
======== ======== ======== =======
Cumulative gap at
12-31-93 $(23,429) $(25,241) $ 23,365
======== ======== ========
Cumulative gap at
12-31-92 $(22,625) $(24,506) $ 23,231
======== ======== ========
Cumulative gap at
12-31-91 $(23,576) $ (9,037) $(49,023)
======== ======== ========
</TABLE>
LIQUIDITY
The purpose of liquidity is to insure that there is sufficient cash
flow to satisfy demands for credit, deposit withdrawals and other banking
needs. Traditional sources of liquidity include asset maturities, and growth
in core deposits. Other sources of available funding include wholesale
purchased liabilities such as negotiable certificates of deposit, federal funds
purchased, and securities sold under agreements to repurchase. Liquidity has
not been a problem during this period of slow loan growth, nor does management
expect it will be as the economy expands due to the bank's high liquidity
position. The loan to deposit ratio at December 31, 1993 and 1992 was 20.8%
and 21.8% respectively.
22
<PAGE> 33
CAPITAL RESOURCES
Consistent with the objective of operating a sound financial
organization, First State Bank's capital ratios are among the highest in the
nation as reported by Sheshunoff Information Services, Inc. and the Uniform
Bank Performance Report. The current rate of internal capital generation
appears adequate to support future asset growth. The rate of internal capital
generation was 11.7% in 1993, compared to 10.3% in 1992.
Regulatory agencies measure capital adequacy with a framework that
makes capital requirements sensitive to the risk profiles of individual banks.
The guidelines define capital as either Tier 1 (primarily shareholders' equity)
or Tier 2 (certain debt instruments and a portion of the reserve for loan
losses). First State Bank is subject to a minimum Tier 1 capital to
risk-weighted assets ratio of 4% and a total capital (Tier 1 plus Tier 2 ) to
risk-weighted assets ratio of 8%. The FDIC has also established an additional
capital adequacy guideline referred to as the Tier 1 leverage ratio that
measures the ratio of Tier 1 capital to average quarterly assets. The most
highly rated banks will be required to maintain a minimum Tier 1 leverage ratio
of 3%. The required ratio will be based on the FDIC's assessment of the
individual bank's asset quality, earnings performance, interest-rate risk and
liquidity. Banks experiencing internal growth or making acquisitions will be
expected to maintain strong capital positions substantially above the minimum
supervisory levels without significant reliance on intangible assets.
The Federal Deposit Insurance Corporation Improvement Act of 1991
(FDICIA) requires the establishment of a capital-based supervisory system of
prompt corrective action for all depository institutions. The FDIC's
implementation of FDICIA defines "well capitalized" institutions as those whose
capital ratios equal or exceed the following minimum ratios: Tier 1 Capital
Ratio of 6%, Total Risk-Based Ratio of 10%, and a Tier 1 Leverage Ratio of 5%.
At December 31, 1993, First State Bank's Tier 1 Capital, Total Risk-Based
Capital and Tier 1 Leverage Ratios were 26.49%, 26.06% and 14.07%,
respectively. These ratios are well above the "well capitalized" ratios as
defined by FDICIA.
INTEREST INCOME
Total interest income decreased 10.6% in 1993 compared to a 10.1%
decrease in 1992, and a 4.7% decrease in 1991. The decreases are a result of
falling interest rates and slow loan demand. Interest and fees earned on loans
decreased 11.6% in 1993 compared to a 10.2% decrease in 1992 and a 11.9%
decrease in 1991. Interest earned on investment securities decreased 7.3% in
1993 compared to a 11.3% decrease in 1992 and a 1.6% increase in 1991.
INTEREST EXPENSE
Total interest expense decreased 24.5% in 1993 compared to a 35.2%
decrease in 1992 and a 17.5% decrease in 1991. The significant fall in
interest rates during these years contributed to the decrease in interest
expense. The net interest margin (tax equivalent net interest divided by
average earning assets) was 4.47% in 1993, 4.63% in 1992 and 4.19% in 1991.
23
<PAGE> 34
NET INTEREST INCOME
Net interest income on a fully taxable equivalent basis is influenced
primarily by changes in (1) the volume and mix of earning assets and sources of
funding; (2) market rates of interest; and (3) income tax rates. The impact of
some of these factors can be controlled by management policies and actions.
External factors also can have a significant impact on changes in net interest
income from one period to another. Some examples of such factors are: (1) the
strength of credit demands by customers; (2) Federal Reserve Board monetary
policy; and (3) fiscal and debt management policies of the federal government,
including changes to tax laws.
NON-INTEREST INCOME AND EXPENSE
Non-interest income increased 78.5% in 1993 compared to a 128.5%
increase in 1992 and a 13.1% increase in 1991. Charges for deposit services
showed a 5.9% increase in 1993. A write down of $425,000 in 1991 on a
Louisiana Housing Finance bond contributed to the large difference between 1991
and 1992, while a gain on the sale of $550,000 on the same bond was responsible
for the large increase in 1993.
Non-interest expense, excluding the provision for possible loan
losses, decreased 0.2% in 1993, compared to a 4.4% increase in 1992 and a 8.6%
increase in 1991.
The FDIC has approved the implementation of a risk-related system that
will place each financial institution in one of nine risk categories based on
their level of capital and supervisory rating. There is an eight basis point
spread between the highest and lowest premium ratio, where well-capitalized
institutions with the highest supervisory rating will pay 0.23% of deposits and
under- capitalized institutions with the lowest supervisory rating will pay
0.31%. Based on First State Bank's risk classification for deposit insurance
premium assessments, First State Bank will pay deposit insurance premiums equal
to 0.23% of deposits for the first six months of 1994.
PROVISION FOR LOAN LOSSES
The provision for loan losses, representing amounts charged against
operating income, increased 122.1% in 1993 compared to a 5.6% increase in 1992
and a 21.5% increase in 1991. The increase in 1993 was due to a loss on one
large commercial loan. Management regularly monitors the allowance for
possible losses. All losses are charged to the allowance when the loss
actually occurs or when a determination is made that a loss is likely to occur.
Recoveries are credited to the allowance at the time of recovery.
Periodically during the year management estimates the level of future
losses to determine whether the allowance for loan losses is adequate to absorb
reasonably anticipated losses in the existing portfolio. Based on these
estimates, an amount is charged to the provision for loan losses and credited
to the allowance for loan losses in order to adjust the allowance to a level
determined to be adequate to absorb future losses.
Management's judgement as to the level of future losses on existing
loans involves the consideration of current and anticipated economic conditions
and their potential effects
24
<PAGE> 35
on specific borrowers, an evaluation of the existing relationships among loans,
potential loan losses and the present level of the allowance, results of
examinations of the loan portfolio by regulatory agencies, and management's
internal review of the loan portfolio. In determining the collectibility of
certain loans, management also considers the fair value of any underlying
collateral.
It should be understood that estimates of future loan losses involve
an exercise of judgement. While it is possible that in particular periods
First State Bank may sustain losses which are substantial relative to the
allowance for loan losses, it is the judgement of management that the allowance
for loan losses reflected in the statements of condition is adequate to absorb
probable losses in the existing loan portfolio.
Management does not believe that there is a concentration of loans to
a multiple number of borrowers engaged in similar activities.
NET INCOME
Net income was 21.9% higher in 1993 than in 1992, 96.5% higher in 1992
than in 1991, and 54.4% higher in 1991 than in 1990. The increase in 1992 was
due primarily to the nonrecurring write-down in the securities portfolio during
1991.
IMPACTS OF INFLATION AND CHANGING PRICES
The financial statements and related data have been prepared in
accordance with generally accepted accounting principles, which require the
measurement of financial position and operating results in terms of historical
dollars without considering changes in the relative purchasing power of money
over time due to inflation.
Virtually all of the assets and liabilities of a financial institution
are monetary in nature. As a result, interest rates have a more significant
impact on a financial institution's performance than the effects of general
levels of inflation. Interest rates do not necessarily move in the same
direction nor with the same magnitude as the prices of goods and services since
such prices are affected by inflation. In the current interest rate
environment, liquidity and the maturity structure of First State Bank's assets
and liabilities are critical to the maintenance of desired performance levels.
PROBLEM ASSETS AND ASSET CLASSIFICATION
Loans are reviewed on a regular basis and are placed on non-accrual
status when, in the opinion of management, the collection of additional
interest is doubtful. Generally, this occurs when either principal or interest
is 90 days or more past due. Interest accrued and unpaid at the time a loan is
placed on non-accrual status is charged against interest income. Subsequent
payments are either applied to the outstanding principal balance or recorded as
interest income, depending on the assessment of the ultimate collectibility of
the loan.
Real estate acquired by First State Bank as a result of foreclosure or
by deed in lieu of foreclosure is classified as real estate owned until such
time as it is sold. When such
25
<PAGE> 36
property is acquired, it is recorded at the lower of the unpaid principal
balance of the related loan or its fair value less estimated cost to sell. Any
write-down of the property is charged to the allowance for losses.
The following table presents information concerning loans with risk
elements. Risk elements include (1) loans accounted for on a non-accrual
basis, (2) accruing loans which are contractually past due 90 days or more as
to principal or interest payments, (3) loans not included above which are
"troubled debt restructurings," and (4) real estate acquired through
foreclosures or repossessions.
NONPERFORMING ASSETS
DECEMBER 31, 1993, 1992, 1991
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Nonperforming loans:
Loans accounted for on a non-accrual
basis $193 $- $-
Accruing loans which are contractually
past due 90 days or more as to
principal or interest payments - - -
Restructured loans (exclusive of
non-accrual loans and loans past
due 90 days or more) - - -
Real estate acquired through foreclosure
or repossessions - 40 297
---- -- ---
TOTAL $193 $40 $297
==== === ====
</TABLE>
ALLOWANCE FOR LOSSES ON LOANS AND REAL ESTATE
In making loans, First State Bank recognizes that credit losses will
be experienced and that the risk of loss will vary with the type of loan being
made, the credit worthiness of the borrower over the term of the loan, and, in
the case of a secured loan, the quality of the security for the loan.
It is management's policy to maintain an adequate allowance for
estimated losses on loans and real estate acquired. Such allowance is based on
estimates of the historical loan loss experience, evaluation of economic
conditions in general and in various sectors of First State Bank's customer
base, and periodic reviews of loan portfolio quality by First State Bank's
personnel. A specific allowance will be provided for individual loans where
the ultimate collection is considered questionable by management after
reviewing the current status of loans which are contractually past due and
considering the net realizable value of the loan or guarantees, if applicable.
26
<PAGE> 37
The following analysis sets forth information with respect to First
State Bank's loan loss experience and loan loss allowance for the periods
indicated.
ANALYSIS OF LOAN LOSS EXPERIENCE
DECEMBER 31, 1993, 1992, 1991
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
ALLOWANCE FOR LOAN LOSSES:
Balance at beginning of year $296 $226 $218
Loans charged off:
Real Estate 51 45 61
Consumer 9 7 39
Commercial 298 1 4
---- ---- ----
Total 358 53 104
---- ---- ----
Recoveries:
Real Estate 0 8 0
Consumer 1 1 5
Commercial 0 1 0
---- ---- ----
Total 1 10 5
---- ---- ----
Net loans charged off:
Real Estate 51 37 61
Consumer 8 6 34
Commercial 298 0 4
---- ---- ----
Total 357 43 99
---- ---- ----
Provisions charged to expense 251 113 107
---- ---- ----
Balance at end of year $190 $296 $226
==== ==== ====
Net charge-offs as percent of average
loans outstanding during the period 2.54% .30% .70%
</TABLE>
27
<PAGE> 38
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
DECEMBER 31, 1993, 1992, 1991
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1992 1991
--------------------- ----------------------- ---------------------------
Amount % of Total Amount % of Total Amount % of Total
------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at end
of period:
Real Estate $116 61% $186 63% $136 60%
Consumer 23 12% 27 9% 20 9%
Commercial 51 27% 83 28% 70 31%
---- --- ---- --- ---- ---
TOTAL $190 100% $296 100% $226 100%
==== === ==== === ==== ===
</TABLE>
RECENT CHANGES IN FINANCIAL ACCOUNTING STANDARDS
Effective January 1, 1993, First State Bank changed its method of
accounting for income taxes from the deferred method to the liability method as
required by Statement of Financial Accounting Standards No. 109. Prior years
have not been restated. The cumulative effect of this accounting change did
not have a significant effect on First State Bank's financial statements and
was recorded in income tax expense in the year ended December 31, 1993.
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 112, Employers' Accounting for Post Employment
Benefits which requires the accrual of certain post employment benefits other
than pension and health care. First State Bank does not anticipate that the
adoption of this Statement in 1994 will have a significant effect on its
financial condition or results of operations.
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 114, Accounting by Creditors for Impairment of Certain
Loans, which requires the present value of expected future cash flows of
impaired loans be discounted at the loan's effective interest rate. First
State Bank does not anticipate that the adoption of this Statement in 1995 will
have a significant effect on its financial condition or results of operations.
The Financial Accounting Standards Board has issued Statement of
Financial Standards No. 115 Accounting for Certain Investments in Debt and
Equity Securities which is effective in 1994. This Statement requires the
investment portfolio to be classified into one of three reporting categories:
held-to-maturity, available-for-sale, or trading. First State Bank has not yet
completed its review of Statement No. 115 relative to its securities portfolio
but does not believe that the adoption of the Statement will have a material
effect on its financial statements.
28
<PAGE> 39
PRINCIPAL STOCKHOLDERS OF FIRST STATE BANK
The close of business on March 25, 1994 is the date of record for
determining the stockholders entitled to vote at the Special Meeting. On the
Record Date, First State Bank had 57,750 shares of common stock issued and
outstanding. The $10.00 par value common stock is the only class of voting
securities issued and outstanding by First State Bank. Each share entitles its
holder to one (1) vote upon each matter submitted to a stockholder vote.
The following table sets forth certain information concerning the
beneficial owners of more than five percent (5%) of First State Bank's
outstanding common stock, as of December 31, 1993.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership Class
------------------- -------------------- ----------
<S> <C> <C>
Guy C. Billups, Jr.
124 Allen Drive
Gulfport, MS 39507 20,995.75 shares 36.3563%
Jane M. Jones
701 Rue Cannes
Hammond, LA 70403 3,897.50 shares 6.7489%
</TABLE>
DESCRIPTION OF HANCOCK COMMON STOCK
AUTHORIZED AND OUTSTANDING COMMON STOCK
The Amended and Restated Articles of Incorporation (the "Articles") of
Hancock authorize the issuance of 20,000,000 shares of Common Stock, par value
$3.33 per share ("Hancock Common Stock"). On December 31, 1993, there were
7,177,966 shares of Hancock Common Stock outstanding.
VOTING RIGHTS
The holders of Hancock Common Stock are entitled to one vote for each
share of Hancock Common Stock held. Holders of Hancock Common Stock do not
have cumulative voting rights in the election of directors.
DIVIDEND RIGHTS
The holders of Hancock Common Stock are entitled to receive such
dividends as may be declared, from time to time, by the Board of Directors out
of funds legally available therefore. Substantially all of the funds available
to Hancock for payment of dividends on the Hancock Common Stock are derived
from dividends paid by Hancock Bank MS and
29
<PAGE> 40
Hancock Bank LA. The payment of dividends by Hancock is subject to the
restrictions of Mississippi law applicable to the declaration of dividends by a
business corporation. Under such provisions, no distribution may be made if,
after giving it effect (1) Hancock would not be able to pay its debts as they
become due in the usual course of business; or (2) Hancock's total assets would
be less than the sum of its total liabilities plus the amount that would be
needed, if Hancock were to be dissolved at the time of the distribution, to
satisfy the preferential rights upon dissolution of stockholders whose
preferential rights are superior to those receiving the distributions.
Additionally, the Federal Reserve, in its Policy Statement on Cash
Dividends Not Fully Covered by Earnings, has stated that bank holding companies
should not pay dividends except out of current earnings and unless the
prospective rate of earnings retention by the holding company appears
consistent with its capital needs, asset quality and overall financial
condition.
DIVIDEND REINVESTMENT PLAN
Hancock maintains as Automatic Dividend Reinvestment and Stock
Purchase Plan (the "DRP Plan") to provide holders of Hancock Common Stock with
a convenient method of investing some or all of their cash dividends in shares
of Hancock Common Stock and of making optional cash investments in additional
shares of Hancock Common Stock, at market prices. The DRP Plan permits
Hancock, at its election, to use shares purchased in the over-the-counter
market or to use Hancock's authorized and unissued or treasury shares in order
to satisfy the DRP Plan's requirements.
Only holders of record are eligible to participate in the DRP Plan.
Participants in the DRP Plan may have some or all of the cash dividends paid on
their shares of Hancock Common Stock automatically reinvested in additional
shares of Hancock Common Stock. Participants also may make optional cash
investments (of a minimum of $50 per payment and a maximum of $5,000 per
quarter) at any time.
PREEMPTIVE RIGHTS
The holders of Hancock Common Stock do not have any preemptive or
preferential right to purchase or to subscribe for any additional shares of
Hancock Common Stock that may be issued.
FULLY PAID AND NONASSESSABLE
The shares of Hancock Common Stock presently outstanding are, and
those shares of Hancock Common Stock to be issued in connection with this
offering will be when issued, fully paid and nonassessable. Such shares do not
have any redemption provisions.
LIQUIDATION RIGHTS
In the event of liquidation, dissolution or winding-up of Hancock,
whether voluntary or involuntary, the holders of Hancock Common Stock will be
entitled to share ratably in
30
<PAGE> 41
any of the net assets or funds which are available for distribution to
stockholders after the satisfaction of all liabilities or after adequate
provision is made therefore.
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
Hancock's Articles and Bylaws provide for indemnification by Hancock,
to the fullest extent permitted by the Mississippi Business Corporation Act, of
directors, officers, employees and agents for expenses, judgments, fines and
amounts paid in settlement by such persons.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling Hancock pursuant to the foregoing provisions, Hancock has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
TRANSFER AGENT AND REGISTRAR
The registered transfer agent and registrar for the Hancock Common
Stock is Hancock Bank MS, Gulfport, Mississippi.
CHANGES IN CONTROL
Certain provisions of the Hancock's Articles and Bylaws may have the
effect of preventing, discouraging or delaying any change in the control of
Hancock. The classification of the Board of Directors would delay any attempt
by dissatisfied stockholders or anyone who obtains a controlling interest in
the Hancock Common Stock to elect a new Board of Directors. The classes serve
staggered three year terms so that one-third of the directors are elected each
year. These staggered terms of service may make it more difficult for
Hancock's stockholders to effect a change in the majority of Hancock's
directors, because replacement of a majority of the directors will normally
require two annual meetings of stockholders. Accordingly, this provision also
may have the effect of discouraging hostile attempts to gain control of
Hancock.
The Articles contain in Article Fifth provisions regarding the vote
required to approve certain business combinations or other significant
corporate transactions involving Hancock and a substantial stockholder.
Mississippi law generally requires the affirmative vote of the holders of a
majority of shares entitled to vote at a meeting to approve a merger,
consolidation or dissolution of Hancock or a disposition of all or
substantially all of Hancock's assets. The Articles require the affirmative
vote of 80% of the total number of votes entitled to be cast to approve these
and other significant corporate transactions ("business combinations") if a
"Substantial Stockholder" (as defined) is a party to the transaction or its
percentage equity interest in Hancock will be increased by the transaction.
Two-thirds of the whole Board of Directors may, in all such cases, determine
not to require such 80% affirmative vote, but only if a majority of the
directors making such determination are "Continuing Directors" (as defined).
Such determination may only be made prior to the time the Substantial
Stockholder in question achieves such status. Thereafter, the effects of the
provision may only be avoided by amendment of the article. The required 80%
31
<PAGE> 42
approval of any such business combination must also include at least a majority
of all votes entitled to be cast with respect to voting shares not beneficially
owned by any Substantial Stockholder.
A "Substantial Stockholder" generally is defined under Article Fifth
as the "beneficial owner" of 10% or more of the outstanding shares of stock of
Hancock entitled to vote generally in the election of directors ("voting
shares"). "Beneficial ownership" generally is defined in accordance with the
definition of beneficial ownership in Rule 13d-3 under the Securities Exchange
Act of 1934 and includes all shares as to which the Substantial Stockholder in
question has sole or shared voting or investment power. However, for purposes
of Article Fifth, a Substantial Stockholder is also deemed to own beneficially
shares owned, directly or indirectly, by an "Affiliate" or "Associate" (each as
defined in paragraph (c)(7) of Article Fifth) of the Substantial Stockholder,
as well as (1) shares which it or any such Affiliate or Associate has a right
to acquire, (2) shares issuable upon the exercise of options or rights, or upon
conversion of convertible securities, held by the Substantial Stockholder and
(3) shares beneficially owned by any other person with whom the Substantial
Stockholder or any of his Affiliates or Associates acts as a partnership,
syndicate or other group pursuant to an agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of shares of capital
stock of Hancock.
A "business combination" subject to Article Fifth includes: a merger
or consolidation involving Hancock or any of its subsidiaries and a Substantial
Stockholder; a sale, lease or other disposition of a "substantial part" of the
assets of Hancock or any of its subsidiaries (that is, assets constituting in
excess of 10% of the book value of the total consolidated assets of Hancock) to
a Substantial Stockholder; an issuance of equity securities of Hancock or any
of its subsidiaries to a Substantial Stockholder for consideration aggregating
$5,000,000 or more; a liquidation or dissolution of Hancock (if, as of the
record date for the determination of stockholders entitled to vote with respect
thereto, any person is a Substantial Stockholder); and a reclassification or
recapitalization of securities (including any reverse stock split) of Hancock
or any of its subsidiaries or a reorganization, in any case having the effect,
directly or indirectly, of increasing the percentage interest of a Substantial
Stockholder in any class of equity securities of Hancock or such subsidiary.
A "Continuing Director" is defined as one serving as a director as of
January 1, 1989, or one elected or appointed prior to the time the Substantial
Stockholder in question acquires such status, or one designated as a Continuing
Director (prior to his initial election or appointment) by a majority of the
whole Board of Directors, but only if a majority of the whole Board of
Directors shall then consist of Continuing Directors, or, if a majority of the
whole Board of Directors does not then consist of Continuing Directors, by a
majority of the then Continuing Directors.
Under those circumstances in which Article Fifth would apply, a
minority of Hancock's stockholders may prevent the consummation of a
transaction favored by a majority of stockholders. As a practical matter, the
requirement of an 80% vote may also mean that the type of business combination
to which Article Fifth is addressed might not be accomplished by the
controlling entity while there remains any widely dispersed public market in
Hancock's voting shares. All directors and officers as a group may be deemed
to beneficially own, as of December 31, 1993, approximately 18.4% of the
outstanding
32
<PAGE> 43
Hancock Common Stock, excluding shares to which beneficial ownership is
disclaimed. Article Fifth may deter unsolicited tender offers for Hancock, even
if such tender offers are factored by and beneficial to the holders of a
majority of Hancock's shares. The Board of Directors has no knowledge of any
proposed tender offer for Hancock or other acquisition offer.
Article Fifth may not be amended or repealed without the affirmative
vote of 80% or more of the votes entitled to be cast by all holders of voting
shares (which 80% vote must also include the affirmative vote of a majority of
the votes entitled to be cast by all holders of voting shares not beneficially
owned by any Substantial Stockholder). This higher vote requirement will not
apply to any amendment or repeal recommended to the stockholders by two-thirds
of the whole Board of Directors, as long as a majority of the members of the
Board of Directors voting in favor of such amendment or repeal are Continuing
Directors. Under such circumstances, an amendment or repeal generally may be
approved by stockholders by a simple majority of the votes entitled to be cast
at the meeting.
Article Fourth of the Articles provides that the number of directors
which shall constitute the whole Board of Directors shall be fixed from time to
time by the Board of Directors (but in no event less than nine). This
provision enables the Board of Directors to increase the size of the Board of
Directors during the period between annual meetings of stockholders to
accommodate the inclusion of persons it concludes would be valuable additions
to the Board of Directors. It also enables the Board of Directors to decrease
the number of directorships in order to respond to circumstances under which
the Board of Directors deems a lower number of directors to be desirable, such
as when a director unexpectedly dies or resigns and a qualified candidate to
replace the departing director is not immediately available. It should be
noted that, under the Mississippi Business Corporation Act, the Board of
Directors may only increase or decrease by 30% or less the number of directors
last approved by the stockholders; the stockholders must approve any proposal
by the Board of Directors to increase or decrease by more than 30% the number
of directors last approved by the stockholders.
Article Fourth of the Articles also provides that (1) vacancies
occurring on the Board of Directors may be filled only by the remaining
directors, (2) directors may be removed only for cause, (3) a majority of the
number of directors that constitutes the whole Board shall constitute a quorum
for the transaction of business, (4) if a quorum is present when a vote is
taken, then except as provided otherwise in the Articles, the affirmative vote
of a majority of the directors present shall be the act of the Board of
Directors, (5) regular meetings of the Board of Directors may be held without
notice, (6) special meetings of the Board of Directors must be preceded by at
least two days notice, (7) Article Fourth may not be amended or repealed
without the approval of the holders of two-thirds of the outstanding Hancock
Common Stock.
These provisions may have the effect of making it more difficult for
stockholders to replace or add directors, or to otherwise influence actions
taken by directors, which may discourage attempts to acquire control of Hancock
which may (or may not) be in the best interests of the majority of the
stockholders.
33
<PAGE> 44
COMPARATIVE RIGHTS OF STOCKHOLDERS
If the stockholders of First State Bank approve the Agreement and the
Merger is subsequently consummated, all stockholders of First State Bank, other
than those exercising dissenters rights, will become stockholders of Hancock.
The rights of stockholders of First State Bank will be governed by and be
subject to the Articles of Incorporation and Bylaws of Hancock, rather than the
respective Charter and Bylaws of First State Bank. The following is a brief
summary of the principal differences between the rights of stockholders of
Hancock and the stockholders of First State Bank not described elsewhere
herein.
DIRECTORS
The Board of Directors of Hancock may consist of not less than nine
(9) persons, as set from time to time by the Board of Directors, and currently
consist of nine (9) members. The Hancock Board of Directors is divided into
three (3) classes, as nearly equal in number as possible, with members of each
class to serve for three (3) years and with one (1) class being elected each
year. The Board of Directors of First State Bank may be composed of not less
than nine (9) nor more than twenty-one (21) persons, as set from time to time
by the Board of Directors, and currently consist of nine (9) members. The
directors of First State Bank are elected for one (1) year terms of office each
year or until their successors are chosen and qualified.
A director of Hancock may be removed from office only for cause, by
the affirmative vote of a majority of directors present. Although First State
Bank's Articles of Incorporation and Bylaws do not address the removal of
directors, Louisiana Banking Law provides that the Board of Directors or the
Commissioner may declare vacant the office of a director: (1) if he is
interdicted or adjudicated an incompetent; (2) if he is adjudicated a bankrupt;
(3) if he becomes incapacitated by illness of other infirmity to perform his
duties for a period of six months or longer; (4) if he ceases at any time to
have the qualifications required by the Articles, Bylaws, or this Section; or
(5) if he is convicted of a felony. In addition, Louisiana Banking Laws
provide that the stockholders by vote of the majority of the total voting power
at any special meeting called for that purpose may remove from office any one
or more of the directors, notwithstanding that his or their terms of office may
not have expired and may forthwith at such meeting proceed to elect a successor
for the unexpired term.
Candidates for the Board of Directors of Hancock must be nominated by
the Board of Directors, or by a stockholder not less than fifty nor more than
ninety days prior to the meeting at which directors are to be elected.
AMENDMENT OF ARTICLES OF INCORPORATION
The affirmative vote of the holders of a majority of votes entitled to
be cast at a stockholders meeting is required to amend any provision of the
Hancock Articles of Incorporation unless the amendment would amend the Articles
relating to certain changes in control, in which case eighty percent (80%) or
more of the votes entitled to be cast is required or unless the amendment would
amend the Articles relating to size, composition and removal of the Hancock
Board of Directors, in which case the approval of the holders
34
<PAGE> 45
of not less than two-thirds (2/3) of the outstanding shares of common stock is
required. See "Description of Hancock Common Stock - Changes in Control". The
Articles of Incorporation of First State Bank may be amended by two-thirds
(2/3) of the voting power present.
AMENDMENT OF BYLAWS
Although certain provisions of Hancock's Bylaws relating to changes in
control and the size, composition and removal of the Hancock Board of Directors
requires a vote of eighty percent (80%) of the total voting power and a vote of
two-thirds (2/3) of the outstanding common stock, respectively, the remaining
provisions of Hancock's Bylaws may be amended or repealed by the Board of
Directors if a quorum is present by the affirmative vote of majority of
directors present or by the shareholders if a quorum exist and the votes cast
favoring the action exceed the votes cast opposing the action. See
"Description of Hancock Common Stock - Changes in Control". The Bylaws of
First State Bank may be repealed or altered by an affirmative vote of at least
two-thirds (2/3) of all the directors.
COMMON STOCK AND STOCKHOLDERS
The common stock of Hancock is described above under "Description of
Hancock Common Stock". The Articles of Incorporation of First State Bank
authorizes 57,750 shares of First State Bank Common Stock, with a par value of
$10.00 per share. First State Bank has no preferred stock or other capital
stock authorized.
As described under "Description of Hancock Common Stock - Changes in
Control", certain provisions of the Hancock Articles of Incorporation and
Bylaws require a greater vote than required by law for certain transactions.
There is no corresponding provision for First State Bank.
EXPERTS
The financial statements of First State Bank included in this
Prospectus\Proxy Statement have been audited by Deloitte & Touche, independent
auditors, as stated in their report appearing herein, and have been so included
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
The consolidated financial statements of Hancock incorporated in this
Prospectus/Proxy Statement by reference from Hancock's Annual Report on Form
10-K for the year ended December 31, 1993 have been audited by Deloitte &
Touche, independent auditors, as stated in their report, which is incorporated
herein by reference and have been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
35
<PAGE> 46
LEGAL MATTERS
The validity of the shares of Hancock Common Stock offered hereby and
certain other legal matters will be passed upon for Hancock and Hancock Bank LA
by Heidelberg & Woodliff, P.A., Jackson, Mississippi. Certain legal matters
regarding First State Bank will be passed upon by Paul T. Thompson, Esq.,
Baker, Louisiana.
If requested by Hancock, certain tax matters will be passed upon for
Hancock and First State Bank by Heidelberg & Woodliff, P.A., Jackson,
Mississippi.
36
<PAGE> 47
FIRST STATE BANK AND TRUST COMPANY
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
CONTENTS
Page
----
INDEPENDENT AUDITORS' REPORT . . . . . . . . . . . . . . F-2
FINANCIAL STATEMENTS
Statements of Condition . . . . . . . . . . . . . . F-3
Statements of Income . . . . . . . . . . . . . . . F-4
Statements of Stockholders' Equity . . . . . . . . F-5
Statements of Cash Flows . . . . . . . . . . . . . F-6
Notes of Financial Statements . . . . . . . . . . . F-8
F-1
<PAGE> 48
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
First State Bank and Trust Company:
We have audited the accompanying statements of condition of First State Bank
and Trust Company as of December 31, 1993 and 1992, and the related statements
of income, stockholders' equity, and cash flows for each of the three years in
the period ended December 31, 1993. These financial statements are the
responsibility of the Bank's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of First State Bank and Trust Company at
December 31, 1993 and 1992, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1993 in
conformity with generally accepted accounting principles.
Deloitte & Touche
Baton Rouge, Louisiana
January 14, 1994
F-2
<PAGE> 49
FIRST STATE BANK AND TRUST COMPANY
STATEMENTS OF CONDITION
DECEMBER 31, 1993 AND 1992
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------
1993 1992
------------ -------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 3,653,881 $ 3,453,049
Federal funds sold 12,205,000 8,055,000
------------ -------------
CASH AND CASH EQUIVALENTS 15,858,881 11,508,049
INVESTMENT SECURITIES (market value of
$51,862,157 and $51,257,400) 50,642,484 50,001,062
LOANS (net of unearned discount and allowance
for loan losses of $190,073 - 1993 and
$296,186 - 1992) 14,239,759 14,065,889
ACCRUED INTEREST RECEIVABLE 868,739 960,795
BANK PREMISES AND EQUIPMENT, NET 221,487 235,765
OTHER REAL ESTATE OWNED 40,829 97,559
OTHER ASSETS 236,532 146,659
------------ -------------
$ 82,108,711 $ 77,015,778
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS:
Non interest bearing demand $ 16,149,916 $ 16,658,408
Interest bearing savings, NOW, money
market and other time 53,912,107 49,130,983
------------ -------------
Total deposits 70,062,023 65,789,391
ACCRUED INTEREST PAYABLE 183,919 208,142
INCOME TAXES PAYABLE 227,173 255,951
OTHER LIABILITIES 86,624 118,180
------------ -------------
Total liabilities 70,559,739 66,371,664
------------ -------------
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY:
Common stock - 57,750 shares of $10
par value authorized, issued and outstanding 577,500 577,500
Surplus 4,218,000 4,218,000
Retained earnings 6,753,472 5,848,614
------------ -------------
Total stockholders' equity 11,548,972 10,644,114
------------ -------------
$ 82,108,711 $ 77,015,778
============ =============
</TABLE>
See notes to financial statements.
F-3
<PAGE> 50
FIRST STATE BANK AND TRUST COMPANY
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------
1993 1992 1991
------------- --------------- -----------
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 1,223,705 $ 1,384,788 $ 1,542,095
Interest on investment securities:
Obligations of U. S. government agencies 2,954,304 3,160,004 3,544,493
Obligations of states and political subdivisions 239,294 285,755 342,704
Interest on Federal funds sold 170,023 300,201 280,938
------------- -------------- ------------
4,587,326 5,130,748 5,710,230
INTEREST EXPENSE - DEPOSITS 1,431,213 1,896,134 2,925,229
------------- -------------- ------------
NET INTEREST INCOME 3,156,113 3,234,614 2,785,001
PROVISION FOR LOAN LOSSES 251,000 113,000 107,000
------------- -------------- ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,905,113 3,121,614 2,678,001
------------- -------------- ------------
NON-INTEREST INCOME:
Investment securities gains (losses) 566,485 - (425,190)
Service fees 552,733 521,532 528,230
Other commissions and fees 159,640 163,265 144,514
Other 56,997 63,621 79,860
------------- -------------- ------------
1,335,855 748,418 327,414
------------- -------------- ------------
NON-INTEREST EXPENSES:
Salaries and employee benefits 1,389,231 1,369,018 1,308,022
Occupancy expense 374,425 349,743 332,772
FDIC and state assessment 156,538 157,559 147,384
Postage and freight 64,092 64,734 66,319
Other 476,324 525,047 506,380
------------- -------------- ------------
2,460,610 2,466,101 2,360,877
------------- -------------- ------------
INCOME BEFORE INCOME TAXES 1,780,358 1,403,931 644,538
INCOME TAX EXPENSE 529,000 377,000 122,000
------------- -------------- ------------
NET INCOME $ 1,251,358 $ 1,026,931 $ 522,538
============= =============== ============
NET INCOME PER SHARE OF COMMON STOCK $ 21.67 $ 17.78 $ 9.05
============= =============== ============
</TABLE>
See notes to financial statements.
F-4
<PAGE> 51
FIRST STATE BANK AND TRUST COMPANY
STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------
COMMON STOCK RETAINED
SHARES AMOUNT SURPLUS EARNINGS TOTAL
------ -------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1991 57,750 $577,500 $ 4,218,000 $ 4,992,145 $ 9,787,645
Cash dividends - $6 per common share (346,500) (346,500)
Net income for 1991 522,538 522,538
------ -------- ----------- ----------- ------------
BALANCE, DECEMBER 31, 1991 57,750 577,500 4,218,000 5,168,183 9,963,683
Cash dividends - $6 per common share (346,500) (346,500)
Net income for 1992 1,026,931 1,026,931
------ -------- ----------- ----------- ------------
BALANCE, DECEMBER 31, 1992 57,750 577,500 4,218,000 5,848,614 10,644,114
Cash dividends - $6 per common share (346,500) (346,500)
Net income for 1993 1,251,358 1,251,358
------ -------- ----------- ----------- ------------
BALANCE, DECEMBER 31, 1993 57,750 $577,500 $ 4,218,000 $ 6,753,472 $ 11,548,972
====== ======== =========== =========== ============
</TABLE>
See notes to financial statements.
F-5
<PAGE> 52
FIRST STATE BANK AND TRUST COMPANY
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------
1993 1992 1991
------------- -------------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,251,358 $ 1,026,931 $ 522,538
Adjustments to reconcile net income to net
cash provided by operating activities:
Net amortization of premiums on investment
securities 142,698 424,080 897,239
Depreciation and amortization 60,220 67,778 58,774
Loss (gain) on sale of bank premises and
equipment 1,560 (5,610) --
Provision for loan losses 251,000 113,000 107,000
Provision for deferred tax expense 43,600 5,000 --
Loss (gain) on sale of other real estate owned 12,101 60,212 (6,717)
Provision for losses on other real estate owned 16,800 57,338 42,100
(Gain) loss on investment securities (566,485) -- 425,190
Decrease in accrued interest receivable 92,056 194,537 16,410
Increase in other assets (89,873) (41,256) (14,769)
Decrease in accrued interest payable (24,223) (158,665) (221,266)
(Decrease) increase in accrued income taxes (72,378) 224,792 51
(Decrease) increase in other liabilities (31,556) 2,209 5,692
------------- -------------- ------------
Net cash provided by operating activities 1,086,878 1,970,346 1,832,242
------------- -------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of investment securities 15,380,558 24,913,993 11,526,658
Proceeds from sales of investment securities 750,000 -- --
Purchases of investment securities (16,348,193) (30,718,215) (10,084,688)
Loan originations, net of principal repayments (435,347) 328,863 (621,566)
Additions to other real estate owned (24,592) (29,682) (5,211)
Purchases of bank premises and equipment (54,002) (30,535) (81,998)
Proceeds from sales of other real estate owned 62,898 446,049 112,597
Proceeds from sales of bank premises and equipment 6,500 6,000 3,500
------------- -------------- ------------
Net cash (used in) provided by investing
activities (662,178) (5,083,527) 849,292
------------- -------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits 4,272,632 2,085,775 (4,535,365)
Cash dividends paid (346,500) (346,500) (346,500)
------------- -------------- ------------
Net cash provided by (used in) financing
activities 3,926,132 1,739,275 (4,881,865)
------------- -------------- ------------
</TABLE>
(Continued)
F-6
<PAGE> 53
FIRST STATE BANK AND TRUST COMPANY
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------
1993 1992 1991
------------- -------------- ------------
<S> <C> <C> <C>
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 4,350,832 (1,373,906) (2,200,331)
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 11,508,049 12,881,955 15,082,286
------------- -------------- ------------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 15,858,881 $ 11,508,049 $ 12,881,955
============= ============== ============
SUPPLEMENTAL INFORMATION:
Loans transferred to other real estate owned $ 10,477 $ 22,761 $ 300,000
============= ============== ============
Income taxes paid $ 557,778 $ 147,209 $ 121,949
============= ============== ============
Interest paid $ 1,455,436 $ 2,054,799 $ 3,146,495
============= ============== ============
</TABLE>
See notes to financial statements.
(Concluded)
F-7
<PAGE> 54
FIRST STATE BANK AND TRUST COMPANY
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
- - --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of First State Bank and Trust
Company (the "Bank") conform to practices within the banking industry
and are based on generally accepted accounting principles. A summary
of the Bank's significant accounting and reporting policies
consistently applied in the preparation of the accompanying financial
statements follows.
INVESTMENT SECURITIES - Investment securities are stated at cost
adjusted for amortization of premiums and accretion of discounts,
computed by the interest method, which are recognized as adjustments
to interest income. These securities are generally not adjusted to
market because the Bank has the intent and the ability to hold such
securities until maturity. Market value for securities is determined
from quoted prices or quoted prices of similar securities of
comparable risk and maturity where no quoted market price exists. The
adjusted cost of the specific security sold is used to compute gains
or losses on the sale of investment securities. The related income
tax provision (benefit) on investment securities gains (losses) were
$192,600 in 1993 and ($144,600) in 1991.
Statement of Financial Accounting Standards No. 115 (SFAS 115)
"Accounting for Certain Investments in Debt and Equity Securities"
which is effective for years beginning after December 31, 1993,
provides for the classification of investment securities into three
categories: trading, available for sale or held for maturity.
Pursuant to SFAS 115, unrealized gains or losses on investment
securities are to be recognized in either income or stockholders
equity to the extent that such holding gains or losses are related to
the portion of the securities portfolio not formally designated as
held for maturity. The adoption of Statement No. 115 is not expected
to have a material effect on the Bank's financial statements.
LOANS - Loans are stated at the principal amount outstanding, net of
unearned discount and allowance for loan losses. Unearned discount
relates principally to consumer installment loans. Interest on loans
is credited to operations based on the principal amount outstanding
using methods which approximate the interest method. Fees, net of
origination costs, if applicable, are deferred and amortized over the
life of the loan.
When the payment of principal or interest on a loan is delinquent for
90 days, or earlier in some cases, the loan is placed on non- accrual
status, unless the loan is in the process of collection and the
underlying collateral fully supports the carrying value of the loan.
If the decision is made to continue accruing interest on the loan,
periodic reviews are made to confirm the appropriateness of the
accruing status of the loan.
When a loan is placed on non-accrual status, interest accrued during
the current year prior to the judgement of uncollectibility is charged
to operations. Interest accrued during prior periods is charged to
the allowance for loan losses. Generally, any payments received on
non-accrual loans are applied first to outstanding loan amounts and
next to the recovery of charged-off loan amounts. Any excess is
treated as recovery of lost interest.
ALLOWANCE FOR LOAN LOSSES - The allowance for loan losses is a
valuation allowance available for losses incurred on loans. All
losses are charged to the allowance for loan losses when the loss
actually occurs or when a determination is made that a loss is likely
to occur. Recoveries are credited to the allowance at the time of
recovery.
F-8
<PAGE> 55
Periodically during the year management estimates the likely level of
future losses to determine whether the allowance for loan losses is
adequate to absorb reasonably anticipated losses in the existing
portfolio. Based on these estimates, an amount is charged to the
provision for loan losses and credited to the allowance for loan
losses in order to adjust the allowance to a level determined to be
adequate to absorb future losses.
Management's judgement as to the level of future losses on existing
loans involves the consideration of current and anticipated economic
conditions and their potential effects on specific borrowers, an
evaluation of the existing relationships among loans, potential loan
losses and the present level of the allowance, results of examinations
of the loan portfolio by regulatory agencies, and management's
internal review of the loan portfolio. In determining the
collectibility of certain loans, management also considers the fair
value of any underlying collateral.
It should be understood that estimates of future loan losses involve
an exercise of judgement. While it is possible that in particular
periods the Bank may sustain losses which are substantial relative to
the allowance for loan losses, it is the judgement of management that
the allowance for loan losses reflected in the statements of condition
is adequate to absorb probable losses in the existing loan portfolio.
BANK PREMISES AND EQUIPMENT - Bank premises and equipment are stated
at cost less accumulated depreciation. Depreciation is provided on
the straight-line and accelerated methods over the estimated useful
lives of the respective assets ranging from 3 to 25 years.
OTHER REAL ESTATE OWNED - The Bank records other real estate owned at
the lesser of the outstanding loan amount or fair value at the time of
foreclosure, net of disposal costs. Write-downs from the loan
carrying value to fair value at the time of foreclosure are charged to
the allowance for loan losses. Any subsequent deterioration in fair
value is recognized by a charge to operations. Determinations of fair
value are based on periodic appraisals, which are subject to
significant fluctuations as economic conditions change. Real estate
and other property acquired in lieu of loan balances, net of an
appropriate reserve for possible losses, are included in the
accompanying statements of condition. Operating expenses of such
properties, net of related income, and gains and losses on their
disposition are included in other operating expenses.
INCOME TAXES - Provisions for deferred income taxes are made as a
result of temporary differences between financial and income tax
accounting, consisting primarily of differences in the accounting for
the allowance for loan losses, depreciation expense and expenses
related to other real estate owned.
The Bank adopted Statement of Financial Accounting Standards (SFAS)
No. 109, "Accounting For Income Taxes" effective January 1, 1993.
This Statement supersedes SFAS No. 96, "Accounting For Income Taxes,"
which was adopted by the Bank in 1987. SFAS 109 requires the Bank to
compute deferred income taxes based on the difference between the
financial statement and tax basis of assets and liabilities using
enacted tax rates in effect in the years in which the differences are
expected to reverse. Adoption of the new accounting standard in 1993
did not have a significant effect on the Bank's financial position or
results of operations.
EARNINGS PER SHARE - Earnings per share are based on the weighted
average number of shares outstanding, which amounted to 57,750 shares
in each year.
STATEMENTS OF CASH FLOWS - For purposes of reporting cash flows, cash
and cash equivalents include cash on hand, amounts due from banks, and
Federal funds sold. Generally, Federal funds sold are purchased and
sold for one day periods.
RECLASSIFICATIONS - Certain reclassifications have been made to prior
years' amounts to conform them to the current year presentation.
F-9
<PAGE> 56
2. CASH AND DUE FROM BANKS
The Bank is required to maintain average reserve balances with the
Federal Reserve Bank. "Cash and due from banks" in the statements of
condition included amounts so restricted of $470,000 at December 31,
1993 and $455,000 at December 31, 1992.
3. INVESTMENT SECURITIES
The amortized cost and approximate market values of investment
securities at December 31, 1993 and 1992 are summarized as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1993
--------------------------------------------------------------------
GROSS GROSS APPROXIMATE
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
--------------- -------------- ----------- ---------------
<S> <C> <C> <C> <C>
Obligations of U. S.
government agencies $ 45,087,040 $ 931,051 $ (81,271) $ 45,936,820
Obligations of states and
political subdivisions 3,353,475 272,086 3,625,561
Mortgage-backed securities 2,201,969 97,807 - 2,299,776
--------------- -------------- ----------- ---------------
$ 50,642,484 $ 1,300,944 $ (81,271) $ 51,862,157
=============== ============== =========== ===============
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1992
---------------------------------------------------------------------
GROSS GROSS APPROXIMATE
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
--------------- -------------- ----------- ---------------
<S> <C> <C> <C> <C>
Obligations of U. S.
government agencies $ 41,820,010 $ 736,531 $ (3,441) $ 42,553,100
Obligations of states and
political subdivisions 3,844,683 479,997 (6,880) 4,317,800
Mortgage-backed securities 4,336,369 50,131 - 4,386,500
--------------- -------------- ----------- ---------------
$ 50,001,062 $ 1,266,659 $ (10,321) $ 51,257,400
=============== ============== =========== ===============
</TABLE>
The amortized cost and approximate market value of debt securities at
December 31, 1993, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because borrowers
may have the right to call or prepay obligations with or without call
or prepayment penalties.
<TABLE>
<CAPTION>
DECEMBER 31, 1993
----------------------------------
APPROXIMATE
AMORTIZED MARKET
COST VALUE
-------------- ---------------
<S> <C> <C>
Due in one year or less $ 9,487,077 $ 9,585,373
Due after one year through five years 38,427,763 39,415,387
Due after five years through ten years 525,675 561,621
Mortgage-backed securities 2,201,969 2,299,776
-------------- ---------------
$ 50,642,484 $ 51,862,157
============== ===============
</TABLE>
F-10
<PAGE> 57
The approximate market values of obligations of states and political
subdivisions are based on available market data, which often reflect
transactions of a relatively small size and are not necessarily
indicative of the price at which large amounts of particular issues
could be readily sold. Management does not anticipate a requirement
to sell any of the Bank's investment securities for liquidity or other
operating purposes.
Included in the Bank's investment portfolio at December 31, 1992 were
debt obligations issued by an agency of the State of Louisiana but
secured by a guaranteed investment contract issued by a private
California-based insurance company which was placed in conservatorship
in 1991 by the State Regulatory Authority in California. Due to
uncertainty concerning the ability of the insurance company to honor
its guarantee, the market value of these obligations has fluctuated
significantly since 1990. The Bank recorded writedowns of $375,000 in
1990 and $425,190 in 1991 to reduce the net carrying value of this
investment to $200,000. The par amount of this obligation was $1
million. No further writedowns or adjustments were considered
necessary in 1992 and as of December 31, 1992 the market value of the
obligations approximated $480,000. During 1993 the Bank sold this
obligation and realized a gain of $550,000 based on the reduced
carrying value. The Bank also realized additional gains of $16,485 in
1993 as a result of bonds being called by the issuer prior to
maturity.
Investment securities with carrying values of approximately
$20,782,000 and $40,691,000 and market values of approximately
$21,524,000 and $41,371,000 at December 31, 1993 and 1992,
respectively, were pledged to secure public deposits and for other
purposes required or permitted by law.
The Bank does not own any investment securities of any one issuer the
aggregate adjusted cost of which exceeds 10% of the stockholders'
equity at December 31, 1993.
4. LOANS
The loan portfolio consists of various types of loans made principally
to borrowers located in East Baton Rouge Parish, Louisiana. The loan
portfolio consists of the following at December 31, 1993 and 1992:
<TABLE>
<CAPTION>
1993 1992
-------------- --------------
<S> <C> <C>
Commercial $ 1,679,577 $ 2,170,631
Real estate 8,171,575 8,565,221
Loans to individuals 3,336,498 3,139,249
Other 1,419,805 631,079
-------------- --------------
14,607,455 14,506,180
Less unearned discount (177,623) (144,105)
-------------- --------------
14,429,832 14,362,075
Less allowance for loan losses (190,073) (296,186)
-------------- --------------
Loans, net $ 14,239,759 $ 14,065,889
============== ==============
</TABLE>
The Financial Accounting Standards Board has adopted Statement No.
114, "Accounting for Loan Impairment by Creditors" (SFAS 114), which
among other items, redefines restructured and impaired loans and
provides a calculation methodology to estimate future losses. The
implementation of SFAS 114 will be adopted in 1994 and the effect on
earnings and the classification of loans is not expected to be
significant.
F-11
<PAGE> 58
At December 31, 1993, loans on which the accrual of interest had been
discontinued or reduced amounted to $192,808. During 1993, interest
income actually earned and additional interest income that would have
been earned under the original terms of these loans were approximately
$11,678 and $10,290, respectively. During 1992 and 1991 there were no
loans on which the accrual of interest had been discontinued.
Changes in the allowance for loan losses were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
Balance, beginning of year $ 296,186 $ 226,477 $ 218,010
Provision charged to operations 251,000 113,000 107,000
Loans charged off (357,854) (52,513) (104,059)
Recoveries 741 9,222 5,526
------------ ------------ ------------
Balance, end of year $ 190,073 $ 296,186 $ 226,477
============ ============ ============
</TABLE>
5. BANK PREMISES AND EQUIPMENT
Major classifications of bank premises and equipment at December
31, 1993 and 1992 are summarized as follows:
<TABLE>
<CAPTION>
1993 1992
-------------- -------------
<S> <C> <C>
Land $ 67,000 $ 67,000
Buildings and improvement 1,175,380 1,176,109
Furniture, fixtures and
equipment 451,906 441,564
Data processing equipment 670,610 651,351
-------------- -------------
2,364,896 2,336,024
Less accumulated depreciation (2,143,409) (2,100,259)
-------------- -------------
$ 221,487 $ 235,765
============== =============
</TABLE>
6. INCOME TAXES
The components of the income tax provision for the years ended
December 31, 1993, 1992 and 1991 are as follows:
<TABLE>
<CAPTION>
1993 1992 1991
------------ ---------- ------------
<S> <C> <C> <C>
Current tax expense $ 485,400 $ 372,000 $ 122,000
Deferred tax expense 43,600 5,000 -
------------ ---------- ------------
$ 529,000 $ 377,000 $ 122,000
============ ========== ============
</TABLE>
F-12
<PAGE> 59
The tax effects of the items comprising the Bank's net deferred tax
liability at December 31, 1993 and 1992 included in the Bank's
statement of condition are as follows:
<TABLE>
<CAPTION>
1993 1992
---------- ----------
<S> <C> <C>
Deferred tax assets:
Writedowns of other real estate owned $ 27,757 $ 28,974
Valuation allowance - -
---------- ----------
27,757 28,974
---------- ----------
Deferred tax liabilities:
Excess tax depreciation over financial
reporting depreciation 9,777 6,042
Excess tax loan loss deduction over
financial reporting deduction 66,614 27,932
---------- ----------
76,391 33,974
---------- ----------
Net deferred tax liability $ 48,634 $ 5,000
========== ==========
</TABLE>
The Bank's effective tax rate in 1993, 1992 and 1991 was 29.7%, 26.9%
and 18.9%, respectively. The provision for income taxes each year was
less than the amount computed by applying the statutory income tax
rate of 34% to income before income taxes primarily because of tax
exempt interest income.
7. RELATED PARTIES
Certain executive officers, directors, employees and organizations
with which they are associated, have loans, deposits, and other
transactions with the Bank. Such transactions are on substantially
the same terms as those prevailing at the time for comparable
transactions with others. Total loans to these persons and
organizations at December 31, 1993 and 1992 amounted to approximately
$513,888 and $419,700, respectively.
An analysis of activity with respect to these related party loans is
as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------
1993 1992
---------- ------------
<S> <C> <C>
Beginning balance $ 419,700 $ 525,600
New loans 726,842 685,027
Repayments and reductions (632,654) (790,927)
---------- ------------
Ending balance $ 513,888 $ 419,700
========== =============
</TABLE>
The bank leases a branch location from a related party. Rental
expense on this lease amounted to $22,800 for 1993, 1992 and 1991.
The lease, which requires monthly payments of $1,900, expires in
December of 1998.
8. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
To meet the financing needs of its customers and to reduce its own
exposure to fluctuations in interest rates, the Bank is a party to
various financial instruments with off-balance sheet risk in the
normal course of business. These financial instruments include
commitments to extend credit and standby letters of credit. Those
instruments involve, to varying degrees, elements of credit risk in
excess of the amounts recognized in the statements of condition.
F-13
<PAGE> 60
The Bank's exposure to credit loss in the event of nonperformance
by the other party to the financial instrument for commitments to
extend credit and standby letters of credit is represented by the
contractual amount of those instruments. The Bank uses the same
credit policies in making these commitments and conditional
obligations as it does for recorded loans.
The Bank has made various commitments to extend credit totalling
$1,308,140 at December 31, 1993 ($982,300 at December 31, 1992) and
has standby letters of credit outstanding of $58,000 at December
31, 1993 ($36,400 at December 31, 1992). Bank management does not
anticipate any material loss as a result of these transactions.
Commitments to extend credit are agreements to lend to a customer
as long as there is no violation of any condition established in
the contract. Commitments generally have fixed expiration dates or
other termination clauses and may require payment of a fee. Since
many of the commitments are expected to expire without being fully
drawn upon, the total commitment amounts disclosed above do not
necessarily represent future cash requirements. Substantially all
commitments to extend credit call for terms at variable interest
rates.
9. COMMITMENTS AND CONTINGENCIES
At December 31, 1993, the Bank was obligated under noncancelable
operating leases for land, buildings, and equipment. The minimum
future rental commitments under such leases, including the related
party lease disclosed in Note 7, are as follows:
<TABLE>
<S> <C>
1994 $ 34,554
1995 34,075
1996 28,800
1997 28,800
1998 28,800
1999 and thereafter 15,500
----------
Total $ 170,529
==========
</TABLE>
Total rental expense for 1993, 1992 and 1991 was $38,893, $38,870
and $39,146, respectively.
10. EMPLOYEE BENEFIT PLAN
The Bank has a voluntary employee savings plan covering substantially
all employees and allowing eligible employees to contribute up to 10%
of their compensation of which the Bank will match up to 5%. In
addition, the Bank's Board of Directors may, at its discretion,
authorize an additional contribution to the plan. The Bank's total
contribution to the plan, including the discretionary contribution,
was $63,653, $58,907 and $57,422 for the years ended December 31,
1993, 1992 and 1991, respectively.
F-14
<PAGE> 61
11. REGULATORY MATTERS
The Federal Depository Insurance Corporation has specified guidelines
for purposes of evaluating a bank's capital adequacy. Effective
December 31, 1992, banks must maintain a minimum of qualifying total
capital and core capital to risk-weighted assets of 8% and 4%,
respectively. Regulatory authorities have also established a minimum
standard ratio of total stockholders' equity to risk-weighted assets
of 4% at December 31, 1992. Regulations also require the Bank to
maintain a minimum leverage requirement of core capital to total
assets of 3%. The following is a summary of the Bank's capital ratios
at December 31, 1993:
<TABLE>
<CAPTION>
MINIMUM
ACTUAL REQUIRED
------ --------
<S> <C> <C>
Qualifying Capital vs. Risk Assets 26.49% 8.00%
Core Capital vs. Risk Assets 26.06% 4.00%
Total Equity vs. Risk Assets 26.06% 4.00%
Core Capital vs. Total Assets (Leverage) 14.07% 3.00%
</TABLE>
12. PENDING TRANSFER OF INTEREST
In November 1993 the Bank entered into a memorandum of understanding
whereby it agreed to merge with Hancock Bank of Louisiana, a wholly
owned subsidiary of Hancock Holding Company. The merger will be
consummated by the exchange of all outstanding common stock of the
Bank in return for common stock of Hancock Holding Company valued at
1.5 times the book value (stockholders' equity) of the Bank at
December 31, 1993. The exchange ratio is expected to approximate nine
shares of Hancock Holding Company common stock for each share of First
State Bank. Completion of the merger is contingent upon approval by
the Bank's shareholders, the Louisiana Commissioner of Financial
Institutions and the Federal Deposit Insurance Corporation.
* * * * * *
F-15
<PAGE> 62
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as
of November 30, 1993, is made between First State Bank & Trust Company of East
Baton Rouge Parish, Baker, Louisiana, a Louisiana state bank ("Baker"), Hancock
Holding Company, a Mississippi corporation ("HHC"), and Hancock Bank of
Louisiana, a Louisiana state bank ("Hancock Bank"), a wholly-owned subsidiary
of Hancock Holding Company.
WHEREAS, by a two-thirds affirmative vote, the respective Boards of
Directors of HHC, Hancock Bank, and Baker have approved the acquisition of
Baker by HHC and subsequent merger of Baker with and into Hancock Bank (the
"Merger");
NOW, THEREFORE, it is agreed:
ARTICLE 1
DEFINITIONS
Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meaning to be equally applicable to
both the singular and plural forms of the terms defined):
1.1 "Agreement" shall mean this Agreement and Plan of
Reorganization by and among HHC, Hancock Bank, and Baker and any amendments
thereto. References to Articles, Sections, Schedules and the like refer to the
Articles, Sections, Schedules and the like of this Agreement unless otherwise
indicated.
1.2 "Baker" means First State Bank & Trust Company of East Baton
Rouge Parish, a Louisiana state bank chartered, organized and existing under
and pursuant to the laws of the State of Louisiana and maintaining its
principal place of business at 3033 Ray Weiland, in Baker, East Baton Rouge
Parish, Louisiana.
1.3 "Book Value" with respect to stockholders' equity of Baker
shall mean the difference between the dollar amount of total liabilities of
Baker reflected on the books and records of Baker as of the Valuation Date and
the dollar amount of total assets of Baker reflected on the books and records
of Baker as of Valuation Date.
1.4 "Business Day" shall mean a day on which Hancock Bank is open
for business and which is not a Saturday, Sunday or legal bank holiday.
1.5 "Closing" The closing (the "Closing") of the transactions
contemplated herein will take place at Hancock Bank's office at 3854 American
Way, in Baton Rouge, Louisiana, on a date that is mutually agreed to by both
parties ("Closing Date") that is within thirty (30) days following the later of
the date of receipt of all applicable regulatory approvals relating to the
transactions contemplated herein, the expiration of all applicable statutory
and
A-1
<PAGE> 63
regulatory waiting periods relative thereto, or the date the Registration
Statement (the "Registration Statement") filed with the SEC is declared
effective, or such later date as may be agreed to by the parties. At the
Closing the parties shall each deliver to the other such evidence of the
satisfaction of the conditions to the Merger as may reasonably be required
(including material required to be delivered under this Agreement).
1.6 "Effective Date" The Agreement shall be filed with and
recorded by the Commissioner of Financial Institutions of Louisiana immediately
following, or concurrently with, the Closing, and the Merger shall be effective
at Midnight, Central (Standard or Daylight, whichever is in effect in Baton
Rouge, Louisiana on said date) Time, on the date the Commissioner issues a
certificate of merger.
1.7 "FDIC" means that agency of the United States of America known
as the Federal Deposit Insurance Corporation, or any successor United States
governmental agency which insures deposits of commercial banks.
1.8 "FRB" means that agency of the United States of America which
acts in the capacity of a governmental central bank known as the Federal
Reserve System represented by actions of its Board of Governors, having
regulatory authority over bank holding companies, or any successor United
States governmental agency performing the function of exercising such
regulatory authority.
1.9 "HHC" means Hancock Holding Company, a corporation chartered,
organized and existing under and pursuant to the laws of the State of
Mississippi and maintaining its principal place of business at One Hancock
Plaza, in Gulfport, Harrison County, Mississippi.
1.10 "Hancock Bank" means Hancock Bank of Louisiana, a Louisiana
state bank chartered, organized and existing under and pursuant to the laws of
the State of Louisiana and maintaining its principal place of business at One
American Place in Baton Rouge, East Baton Rouge Parish, Louisiana.
1.11 "OFI" means the Office of Financial Institutions of the State
of Louisiana having regulatory authority over Hancock Bank and Baker or any
successor Louisiana governmental agency exercising such regulatory authority.
1.12 "Party" shall mean HHC, Hancock Bank, or Baker and "Parties"
shall mean HHC, Hancock Bank, and Baker.
1.13 "Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
A-2
<PAGE> 64
1.14 "SEC" means that agency of the United State of America known
as the Securities and Exchange Commission.
1.15 "Valuation Date" shall mean December 31, 1993.
ARTICLE 2
THE MERGER AND RELATED MATTERS
2.1 Merger. On the Effective Date, Baker shall be merged with and
into Hancock Bank in accordance with the provisions of this Agreement and in
accordance with the provisions of applicable law, rules and regulations. For
federal income tax purposes, it is intended that the Merger shall qualify as a
non-taxable reorganization under and in accordance with Section 368(a)1(A) and
Section 368 (a)(2)(D) of the Internal Revenue Code of 1986, as amended, and the
applicable IRS regulations. The Parties expect that the Merger will further
certain of their business objectives, including, and without limitation, the
expansion of operations as a financial institution.
2.2 Effect of Merger. Upon consummation of the Merger, the
separate existence of Baker shall cease and Hancock Bank shall continue as the
surviving corporation. The name of Hancock Bank, as the surviving corporation,
shall by virtue of the Merger remain unchanged. On the Effective Date, as
hereinabove provided, all of the assets and property of every kind and
character, real, personal and mixed, tangible and intangible, choses in action,
rights, and credits then owned by Baker, or which would inure to it, shall
immediately by operation of law and without any conveyance or transfer or
without any further action or deed, be vested in and become the property of
Hancock Bank, which shall have, hold, and enjoy the same in its own right as
fully and to the same extent as the same were possessed, held, and enjoyed by
Baker prior to such merger; and Hancock Bank shall be deemed to be and shall be
a continuation of the original entities and all of the rights and obligations
of Baker shall remain unimpaired, and Hancock Bank, on the Effective Date of
the Merger shall succeed to all such rights, obligations, duties and
liabilities connected therewith.
2.3 Notice to Depositors. Hancock Bank shall give notice of the
Merger within the time and in the manner required by law or regulation, if any,
to depositors of Baker.
ARTICLE 3
CONVERSION OF STOCK
3.1 Conversion Amount. The Parties agree that, by virtue of the
Merger, shares of Baker common stock shall be converted into shares of HHC
common stock. The conversion amount shall be determined based on 1.5 times the
book value of the outstanding stock of Baker calculated as of the Valuation
Date, except $86,625 representing the first quarter, 1994 dividend, which shall
be based on 1.0 times said amount.
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3.2 Conversion. Shares of HHC common stock shall be issued to
holders of Baker common stock plus cash for any fractional shares as follows:
a. HHC shall calculate the conversion amount for each of
Baker's stockholders by dividing the total conversion amount by the
number of Baker's shares outstanding on the Effective Date and
multiplying the per share value so determined by the number of shares
owned by each holder as shown on a certified list prepared by Baker on
the Effective Date.
b. HHC shall issue to each Baker stockholder the number
of whole shares of HHC's stock calculated by dividing the conversion
amount for each stockholder by the market value of a share of HHC's
common stock. Market value shall be deemed to mean the average of the
daily average of the high and low prices of such common stock, as
reported on the National Market Systems NASDAQ quotation service
("NASDAQ") for all of the trading days during the month of December,
1993 ("Market Value").
c. Notwithstanding any other provision hereof,
each holder of shares of Baker's common stock who would otherwise have
been entitled to receive a fraction of a share of HHC's common stock
(after taking into account all certificates delivered by such holder)
shall receive, in lieu thereof, cash in an amount equal to such
fractional part of a share of HHC's common stock multiplied by the
Market Value of such common stock.
d. On or after the Effective Date, each holder
of a certificate or certificates theretofore representing outstanding
shares of Baker's common stock (any such certificate being hereinafter
referred to as a "Certificate") other than a holder of Certificates
who has elected to exercise dissenters' rights pursuant to Louisiana
Revised Statutes 6:376 shall surrender the same to HHC or its agent
for cancellation and each such holder shall be entitled upon such
surrender to receive in exchange therefor certificate(s) representing
the number of shares of HHC common stock to which such holder is
entitled as provided herein and a check in an amount equal to the
amount of cash, if any, without interest, to which such holder is
entitled. Immediately after the Effective Date, HHC shall mail to each
holder of record of Baker's common shares a form letter of transmittal
and instructions, in the form of that set forth in Exhibit A, for use
in effecting the surrender of the Certificates representing shares of
Baker common stock to be exchanged for shares of HHC common stock and
cash pursuant to this Agreement. Until so surrendered, each
Certificate shall be deemed for all purposes to evidence ownership of
the number of shares of HHC common stock into which the shares
represented by such Certificates have been changed or converted as
aforesaid. Certificates surrendered for exchange by any person who is
an "affiliate" of Baker for purposes of Rule 145(c) under the
Securities Act of 1933, as amended, shall not be exchanged for
certificates representing shares of HHC common stock until Baker has
received the written
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agreement of such person contemplated by Article 4 of this Agreement.
If any certificate for shares of Baker common stock is to be issued in
a name other than that in which a Certificate surrendered for exchange
is issued, the Certificate so surrendered shall be properly endorsed
and otherwise in proper form for transfer.
e. HHC reserves the right to withhold any cash
dividends payable in respect to Certificates not surrendered by the
holder thereof after the sixth (6th) month following the Effective
Date. Cash dividends so withheld will be paid to the holder thereof,
without interest, upon proper presentation as provided in this Section
3.2. In the event that any such holder fails to surrender either such
Certificate or the documents and information contemplated by the
letter of transmittal and instructions, set forth in Exhibit A
attached hereto, on or before the fifth (5th) anniversary of the
Effective Date, HHC shall not have any obligation to deliver the
amount to which any such holder would have been entitled in-accordance
with the provisions of this Agreement and any such holder shall not be
entitled to receive from HHC any amount in substitution and exchange
for each share cancelled and extinguished in accordance with this
Agreement.
f. Upon the Effective date, the stock transfer
books of Baker shall be closed and no transfer of Baker common stock
shall thereafter be made or recognized. Any other provision of this
Agreement notwithstanding, neither HHC or its agent nor any party to
the Merger shall be liable to a holder of Baker common stock for any
amount paid or property delivered in good faith to a public official
pursuant to any applicable abandoned property, escheat or similar law.
g. No conversion under this Article 3 shall be
made in respect of any share of Baker common stock as to which a
shareholder of Baker has elected to exercise dissenters' rights
pursuant to Louisiana Revised Statute 6:376, if any, until such time
as such shareholder shall have effectively lost dissenters' rights.
3.3 Adjustments. It is understood that the book value of Baker as
reflected in its books and records may not be complete as of the Valuation Date
due to lack of complete information concerning Baker's operations through such
date and that certain transactions occurring on the Valuation Date may not have
been posted on such date or are carried in Baker's suspense accounts as of the
Valuation Date. Baker, as soon as possible after the Valuation Date, shall
provide HHC with a Statement of Financial Condition as of the Valuation Date
reflecting the balances of all asset, liability and stockholders' equity
accounts included in Baker's books and records maintained in accordance with
generally accepted accounting principles consistently applied. HHC shall have
access to Baker's books and records in order to confirm to its satisfaction
that all material items have been recorded and that the assets and liabilities
are fairly reported in Baker's Statement of Financial Condition. In the event
any omissions or errors are discovered, the Parties agree to make any required
adjustments to the Statement of Financial Condition. The Parties agree that the
process of
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financial statement preparation, review and adjustment, if necessary, should be
completed as soon as possible so that closing can occur on the Effective date.
ARTICLE 4
BAKER'S COVENANTS AND AGREEMENTS
4.1 Operation of Business. Between the date hereof and the
Effective Date, Baker will operate its business solely in the ordinary course
consistent with prudent business practices and in compliance with all
applicable laws, regulations and rules; and, without prior written consent of
HHC, it will not:
a. Amend or otherwise change its articles of
incorporation or bylaws, as each such document is in effect on the
date hereof;
b. Issue or sell, or authorize for issuance or sale, the
shares of Baker or any additional shares of any class of capital stock
of Baker;
c. Issue, grant, or enter into any subscription, option,
warrant, right, convertible security, or other agreement or commitment
of any character obligating Baker to issue securities;
d. Declare, set aside, make, or pay any dividend or other
distribution with respect to its capital stock, provided, however, that
Baker shall to the extent lawfully permitted declare and pay dividends
for the purpose of allowing Baker's stockholders to receive the normal
and customary fourth quarter, 1993 and first quarter, 1994 dividend in
the amount of $86,625, respectfully, subject to the provisions and
limitations set forth in Article 3 herein;
e. Redeem, purchase, or otherwise acquire, directly or
indirectly, any of its capital stock;
f. Authorize any capital expenditure(s) which,
individually or in the aggregate, exceed $20,000;
g. Extend any new, or renew any existing, loan, credit,
lease, or other type of financing which individually exceeds $50,000;
h. Except in the ordinary course of business, sell,
pledge, dispose of, or encumber, or agree to sell, pledge, dispose of,
or encumber, any assets of Baker;
i. Acquire (by merger, consolidation, lease or other
acquisition of stock, ownership interests or assets) any corporation,
partnership, or other business organization or division thereof, or
enter into any contract, agreement, commitment,
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or arrangement with respect to any of the foregoing, (ix) excluding
normal and customary banking transactions, incur any indebtedness for
borrowed money, issue any debt securities, or enter into or modify any
contract, agreement, commitment, or arrangement with respect thereto,
(x) enter into, amend, or terminate any employment agreement,
relationship or responsibilities with any director, officer, or key
employee or representative of Baker, or enter into, amend, or
terminate any employment agreement with any other person otherwise
than in the ordinary course of business, or take any action with
respect to the grant or payment of any severance or termination pay
except as expressly consented to in writing by HHC;
j. Enter into, extend, or renew any lease for office or
other space;
k. Except as required by law, adopt or amend any bonus,
profit sharing, compensation, stock option, pension, retirement,
deferred compensation, employment, or other employee benefit plan,
agreement, trust, fund, or arrangement for the benefit or welfare of
any officer, employee or representative of Baker;
l. Grant any increase in compensation to any director,
officer, or key employee or representative of Baker;
m. Grant any increase in compensation to any other
employee or representative of Baker except in the ordinary course of
business consistent with past practice; or
n. Take any action or omit to take any action which would
cause any of Baker's representations or warranties to be untrue or
misleading in any material respect or any covenant of Baker under this
Agreement incapable of being performed;
o. Subject to the fiduciary duty of the Board of
Directors, encourage, solicit or initiate offers from or negotiate
with, or provide information or assistance to, any party other than HHC
with respect to a merger, sale of assets, or similar transaction
involving it, its common stock or its assets; provided, however, that
if it receives, from time to time, an inquiry, proposal, plan, offer,
bid or contract from any third party with respect to any of the
foregoing, it will promptly notify HHC, and, subject to the fiduciary
duty of the Board of Directors, will promptly furnish HHC with a copy
of any document received or a summary of any other communication with
respect thereto; or
p. Agree in writing or otherwise to do any of the
foregoing.
4.2 Preservation of Business. Between the date hereof and the
Effective Date, Baker will use its best efforts to preserve its existing
business and to keep its business
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organization intact, including its present relationships with its employees and
customers and others having business relations with it.
4.3 Insurance. Pending the Closing, Baker shall cause the real
property owned by Baker to be insured at full insurable value against all
insurable risks under policies with reasonable deductibles and in full
compliance with any co-insurance provision.
4.4 Stockholders' Meeting. Baker will promptly give proper notice
of a stockholders' meeting for the purpose of approving this Agreement. Said
notice shall include notice of dissenter's rights, if any, and shall solicit
stockholders' proxies in favor of this Agreement, and all notices shall be
given in accordance with all applicable laws, regulations, and rules. Baker and
its directors and principal stockholders will, to the extent not inconsistent
with their fiduciary duties, support and vote in favor of a stockholder
resolution approving this Agreement.
4.5 Affiliates. Baker and HHC shall cooperate and use their best
efforts to identify those persons who may be deemed to be "affiliates" of Baker
within the meaning of Rule 145 under the Securities Act of 1933 (the
"Securities Act"). Baker shall use its best efforts to cause each person so
identified to deliver to HHC, no later than 30 days prior to the Effective
Date, a written agreement in the form set forth in Exhibit B attached hereto,
satisfactory to HHC that such person will not sell, pledge, transfer or
otherwise dispose of the shares of HHC's common stock to be received by such
person pursuant to this Agreement except in compliance with applicable
provisions of the Securities Act and rules and regulations thereunder and until
such time as financial results covering at least 30 days of combined operations
of HHC and Baker have been published within the meaning of Section 201.01 of
the Securities and Exchange Commission's Codification of Financial Reporting
Policies. If the transaction contemplated hereby will qualify for pooling of
interests accounting treatment, shares of HHC's common stock received pursuant
to this Agreement by such affiliates shall not be transferable until such time
as financial results covering at least 30 days of combined operations of HHC
and Baker have been published within the meaning of Section 201.01 of the
Securities and Exchange Commission's Codification of Financial Reporting
Policies, regardless of whether each such affiliate has provided the written
agreement referred to in this section. HHC shall be entitled to place
appropriate legends on the certificates evidencing shares of HHC's common stock
to be received pursuant to this Agreement by such affiliates and to issue
appropriate stop transfer instructions to the transfer agent for HHC's common
stock.
4.6 Due Diligence. From the date of this Agreement to the
Effective Date, Baker shall afford to Hancock Bank (including without
limitation, Hancock Bank's counsel, financial advisers and independent
accountants) full access to the properties, personnel, books, records and
affairs of Baker and will furnish such information about its business and
properties as may be reasonably requested.
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4.7 Surrender of Charter. Concurrent with the Merger, and receipt
of appropriate regulatory approval, Baker's Charter will be surrendered to the
OFI.
4.8 Baker Financial and Other Reports. Baker has made or will make
available to HHC and Hancock Bank the following statements and other reports
and documents ("Baker Financial Statements"):
a. Baker's audited financial statements for the years
ended December 31, 1991, 1992 and 1993;
b. All correspondence with the OFI and the FDIC from
January 1, 1993 through the date of Closing (for inspection, but
copying may be restricted by legal limitations); and
c. Such additional financial or other information as may
be required for the regulatory applications and Registration Statement
in connection with the consummation of the Merger (subject to any legal
limitations).
ARTICLE 5
BAKER'S REPRESENTATIONS AND WARRANTIES
Baker represents and warrants to HHC and Hancock Bank as follows:
5.1 Organization and Authority. Baker is a Louisiana state
chartered bank duly organized, validly existing and in good standing under the
laws of the State of Louisiana and has the corporate power and authority to own
its property and assets and to carry on its business as it is now being
conducted.
5.2 Authorization. The execution, delivery and performance of this
Agreement by Baker and the consummation of the transactions contemplated hereby
have been duly authorized by the Board of Directors of Baker, subject to
regulatory approval. No other corporate proceedings on the part of Baker are
necessary to authorize consummation of this Agreement, except for the approval
of the transaction by Baker's stockholders, and the performance by Baker of the
terms hereof. This Agreement is a valid and binding obligation of Baker
enforceable against Baker in accordance with its terms except as may be limited
by applicable bankruptcy, insolvency, reorganization or moratorium or other
similar laws affecting creditors' rights generally and except that the
availability of equitable remedies is within the discretion of the appropriate
court and except that it is subject to approval by its stockholders and
applicable regulatory agencies.
Neither the execution, delivery or performance of this Agreement by
Baker, nor the consummation of the transactions contemplated hereby, nor
compliance by Baker with any of the provisions hereof, will (a) in any material
respect violate, conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse
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of time or both, would constitute a default) under or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration, or the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of Baker under any
terms, conditions or provisions of (i) Baker's Charter or Bylaws or other
charter documents of Baker, or (ii) any material note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which Baker is a party or by which Baker may be bound, or to
which Baker or the properties or assets of it may be subject, or (b) violate in
any material respect any judgment, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to Baker or any of its properties or
assets.
5.3 Baker Financial and Other Reports. Baker's Financial
Statements (i) will have been prepared in accordance with generally accepted
accounting principles, consistently applied, (ii) will present fairly the
results of operations and financial position of Baker for the periods and at
the times indicated, and (iii) will be true and correct in all material
respects for the periods and at the times indicated.
5.4 Investment and Loan Portfolios. All investment securities
shown in Baker's Financial Statements at September 30, 1993, or which were
purchased after September 30, 1993 but before the Effective Date were and will
be carried in the aggregate at no more than cost adjusted for amortization of
premiums and accretion of discounts, i.e., historical costs. All loans shown in
Baker's Financial Statements at September 30, 1993 or which were entered into
after September 30, 1993 but before the Effective Date were and will be made
for good, valuable and adequate consideration in accordance with prudent
business standards and in substantial compliance with all laws, regulations and
rules and are enforceable, valid, true and genuine and what they purport to be
and all security interests constitute good and valid first liens against the
collateral. Substantially, all of the loans which were made based on the value
of collateral are secured by collateral having value at the time the loan was
made at least equal to the amount of the loan. Baker owns all interests in
loans on its books and has not sold or agreed to sell any interest in such
loans except as disclosed on its books and/or in Baker's Financial Statements.
Baker has not agreed to any modification of loan terms, released any collateral
or borrowers or otherwise made any agreements regarding the loans except as
disclosed in writing in the loan files; and Baker has no knowledge of any
defenses or offsets by any borrower to any loan. Baker has the exclusive right
to service all loans owned by it. Baker's allowance for possible loan losses
shown on Baker's Financial Statements as of September 30, 1993, or which was
allocated after September 30, 1993, but before the Valuation Date will include
those amounts required by applicable regulations and will be adequate to absorb
reasonably anticipated losses in the loan portfolios of Baker in view of the
size and character of such portfolios, current economic conditions, and other
pertinent factors, and no facts have subsequently come to the attention of
management of Baker which would cause it to restate in any material way the
level of such allowance for possible losses on loans.
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5.5 Capital Structure of Baker. On the date hereof, the
authorized capital of Baker consists of 57,750 shares of common stock. On the
date hereof 57,750 shares of such authorized common stock are issued and
outstanding, all of which is validly issued, fully paid and nonassessable.
There are no outstanding options, conversion rights, warrants, calls, rights,
commitments or agreements to issue any form of stock of Baker. There are no
outstanding obligations or commitments to purchase, redeem or otherwise acquire
any outstanding shares of common stock of Baker.
5.6 Title to Properties. Baker has good and marketable fee simple
title to all its owned properties and assets, real and personal, subject to no
mortgage, pledge, lien, encumbrance, security interest or charge, except such
minor imperfections of title which do not materially detract from the value of
the properties, and Baker has no knowledge of any actual or claimed hazardous
waste, toxic substance or environmental contaminant in, on or under said real
property. A list of all leased or non-owned property used by Baker is attached
as Schedule A and copies of all leases and/or contracts relating to such leases
are attached to said Schedule and no default exists as to any such lease or
contract.
5.7 Accuracy of Information. To the best of Baker's and its
officers' and directors' knowledge, all information furnished by Baker to HHC
and Hancock Bank relating to the assets, liabilities, and this Agreement is
accurate, and Baker has not omitted to disclose any information which is or
would be material to this Agreement.
5.8 Compliance with Laws and Contracts. To the best of Baker's and
its officers' and directors' knowledge, Baker is not in violation of any laws,
regulations, or agreements to which it is a party and has not failed to file
any material reports required by any governmental or other regulatory body.
5.9 Taxes. Baker will make available to HHC and Hancock Bank
copies of all the federal and state tax returns for Baker and all tax
adjustments and notices related thereto for the five fiscal years immediately
preceding the date of this Agreement. Baker has filed all material federal,
state and local tax returns due in respect of any of its businesses or
properties in a timely fashion and has paid or made appropriate provisions for
all amounts due as shown on such returns. All such returns fairly reflect in
all material respects the information required to be presented therein. All
provisions for accrued but unpaid taxes contained in the Baker Financial
Statements were made in accordance with generally accepted accounting
principles and in the aggregate do not materially fail to provide for
reasonable expected tax liabilities.
5.10 Litigation. To the best of Baker's and its officers' and
directors' knowledge, Baker has no knowledge of any pending or threatened
litigation, claim or other proceeding before any judicial, administrative or
regulatory agency or tribunal to which Baker is a party or to which the
property of Baker is subject, and Baker has no knowledge of any facts which
could give rise to any presently unasserted claim against Baker or its
property, except as listed on Schedule B attached hereto. For purposes of this
provision, the parties agree that
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as to pending and threatened litigation and as to claims, only those matters as
to which liability is asserted against Baker for more than $10,000.00 shall be
considered material and listed on the Schedule. However, all matters such as
injunctions, restraining orders, and cease and desist orders shall be listed.
5.11 Registration and Proxy Statements. None of the information
supplied or to be supplied by Baker for inclusion in (a) the Registration
Statement to be filed by HHC with the SEC (b) the Notice of Meeting and Proxy
Statement to be mailed by Baker to its stockholders in connection with the
meeting referred to in Section 4.4 hereof (the "Proxy Statement"), and (c) any
other documents to be filed with the SEC or any regulatory agency in connection
with the transactions contemplated hereby will, as amended or supplemented at
the time the Registration Statement is filed with the SEC or at the time it
becomes effective, at the time the Proxy Statement is mailed to holders of
Baker's stock, as may be amended at the time of Baker Stockholders' Meeting,
and at the time of filing of such other documents, respectively, contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. All documents,
financial statements, or other information or materials which Baker shall
provide for filing with the SEC and any regulatory agency in connection with
the Merger will comply with generally accepted accounting principles.
5.12 Commitments and Contracts. Baker is not a party or subject to
any of the following (whether written or oral, express or implied):
a. Except as listed on Schedule C attached
hereto and with a complete copy attached thereto, any employment
contract (including any obligations with respect to severance or
termination pay liabilities or fringe benefits) with any present or
former officer, director, employee or consultant (other than those
which are terminable at will by Baker);
b. Except as listed on Schedule C attached
hereto and with a complete copy attached thereto, any plan or contract
providing for any bonus, pension, option, deferred compensation,
retirement payment, profit sharing or similar arrangement with respect
to any present or former officer, director, employee or consultant; or
c. Any contract not made in the ordinary course
of business containing covenants which limit the ability of Baker to
compete in any line of business or with any person or which involves
any restriction of the geographical area in which, or method by which,
Baker may carry on its business (other than as may be required by law
or applicable regulatory authorities).
5.13 Liabilities. To the best of Baker's and its officers' and
director's knowledge, all liabilities of Baker were, and will be created, for
good, valuable and adequate
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consideration in accordance with prudent business standards and in substantial
compliance with all laws, regulations and rules and the accounts or evidence of
ownership of accounts are and will be genuine, true, valid and enforceable in
accordance with their written terms. Baker has not agreed to any modification
or extension of accounts or account terms or otherwise made any agreements
regarding such accounts except as disclosed in writing on the books and records
of Baker; and Baker has no knowledge of any claim of ownership to any account
other than as shown on the written ownership records of Baker for each account,
and Baker has no knowledge of any alleged improper or wrongful withdrawal or
payment of any such account.
5.14 Vote Required. The affirmative vote of the holders of at least
two-thirds of the outstanding shares of Baker common stock, is the only vote of
the stockholders of Baker necessary to approve the Merger and other
transactions contemplated hereby.
5.15 Continuity of Interest. To the best knowledge of Baker, there
is no plan or intention by the stockholders of Baker to sell, exchange, or
otherwise dispose of a number of shares of HHC common stock, to be received in
the Merger that would reduce Baker stockholders' ownership of the HHC common
stock to a number of shares having a value, as of the date of the Merger, of
less than 50% of the value of all of the formerly outstanding Baker common
stock as of the same date. For purposes of this assumption, shares of Baker
common stock surrendered by dissenters or exchanged for cash in lieu of
fractional shares of Baker common stock will be treated as outstanding Baker
common stock on the date of the Merger. Furthermore, shares of Baker common
stock and shares of HHC common stock held by Baker stockholders and otherwise
sold, redeemed, or disposed of prior to or subsequent to the Merger are
considered in this assumption. See Exhibit B for additional representations
regarding continuity of shareholder interest under Section 368(a)(1)(A) and
Section 368(a)(2)(D) of the Internal Revenue Code of 1986, as amended.
5.16 Continuity of Business Enterprise. Baker operates at least
one significant historic business line, namely, financial services, and owns at
least a significant portion of its historic business assets within the meaning
of Treasury Regulation Section 1.368-1(d).
ARTICLE 6
HHC'S REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
HHC represents and warrants to Baker as follows: for purposes of this
Agreement, except in Section 6.1 and where the context requires otherwise, any
reference to HHC in this Article 6 shall be deemed to include HHC and Hancock
Bank and any reference to "material", material adverse effect or a similar
standard shall refer to the financial condition, operations or other aspects of
HHC and its subsidiaries including Hancock Bank taken as a whole.
6.1 Organization and Authority. HHC is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Mississippi and has the
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corporate power and authority to own its properties and assets and to carry on
its business as it is now being conducted.
6.2 Capitalization of HHC. As of September 30, 1993, the
authorized capital stock of HHC consisted of 20,000,000 shares of common stock,
of which at September 30, 1993, 7,177,966 such shares were issued and
outstanding.
Other than as permitted pursuant to HHC's Employee Stock Purchase Plan
described in HHC's Proxy Statement for the 1993 stockholders' meeting, and
HHC's Automatic Dividend Reinvestment and Stock Purchase Plan, there are no
other shares of capital stock or other equity securities of HHC outstanding and
no other outstanding options, warrants, scrip, rights to subscribe, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any capital stock of HHC, or
contracts, commitments, understandings, or arrangements by which HHC was or may
become bound to issue additional shares of its capital stock or options,
warrants or rights to purchase or acquire any additional shares of its capital
stock. However, nothing in this Agreement shall be construed as limiting the
future number and amount of outstanding shares of HHC's stock pending
settlement of this transaction.
6.3 Authorization. The execution, delivery and performance of this
Agreement by HHC and the consummation of the transactions contemplated hereby
have been duly authorized by the Board of Directors of HHC and Hancock Bank,
subject to regulatory approval. No other corporate proceedings on the part of
HHC are necessary to authorize the execution and delivery of this Agreement and
the performance by HHC of the terms hereof. This Agreement is a valid and
binding obligation of HHC enforceable against HHC in accordance with its terms
except as may be limited by applicable bankruptcy, insolvency, reorganization
or moratorium or other similar laws affecting creditors' rights generally and
except that the availability of equitable remedies is within the discretion of
the appropriate court and except that it is subject to approval of applicable
regulatory agencies.
HHC covenants and agrees as follows:
6.4 Conduct of Business. HHC agrees to operate its business solely
in the ordinary course consistent with prudent business practices and in
compliance with all applicable laws, regulations, and rules; but nothing herein
shall be construed as limiting or restricting HHC in its assets, liability, or
capital structure or limiting any action of HHC or its affiliates, nor shall
anything in this Agreement be construed as limiting the future number and
amount of outstanding shares of HHC stock pending settlement of this
transaction.
6.5 Registration of Stock. HHC agrees to register the shares to be
issued to Baker stockholders pursuant to this Agreement with the Securities and
Exchange Commission.
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6.6 Continuity of Business Enterprise. It is the present
intention of HHC to continue at least one significant historic business line of
Baker, namely, financial services, and to use at least a significant portion of
Baker's historic business assets in a business within the meaning of Treasury
Regulation Section 1.368-1(d).
ARTICLE 7
CONDITIONS TO CLOSING
The obligations of Baker, HHC and Hancock Bank under this Agreement,
except as otherwise provided herein, shall be subject to the satisfaction or
waiver of the following conditions on or prior to the Closing:
7.1 Conditions to Each Party's Obligations to Effect the Merger.
The respective obligation of each party to effect the Merger shall be subject
to the following conditions:
a. Stockholder Approval. The Merger shall have been
approved by the requisite vote of the holders of the outstanding
shares of Baker common stock at Baker's Stockholders' Meeting.
b. Regulatory Approvals. The transactions contemplated
by this Agreement shall have been approved by all governing regulatory
authorities, without any condition or requirement that either HHC,
Hancock Bank, or Baker deem burdensome, or which otherwise would have
a material adverse effect on the business, operations, properties,
assets or financial condition of HHC, Hancock Bank, or Baker after the
Effective Date, all conditions required to be satisfied shall have
been satisfied, and all waiting periods relating to such approvals
shall have expired.
c. Registration Statement. The Registration Statement
shall have been declared effective and shall not be subject to a stop
order or any threatened stop order, and all state securities and blue
sky permits or approvals required to consummate the transactions
contemplated by this Agreement shall have been received.
d. Pooling Treatment. HHC shall be satisfied that the
Merger will qualify for accounting by HHC as a pooling of interests
under generally accepted accounting principles and under applicable
rules and regulations of the Securities and Exchange Commission. In
connection therewith, if requested by HHC, HHC shall have received, on
or before the Closing Date, a letter from Deloitte & Touche (or any
other accountants of HHC's choosing) dated as of the Closing Date to
the effect that the transactions contemplated by this Agreement may be
treated by HHC as a "pooling of interests" for accounting purposes.
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e. Tax Opinion. If requested by HHC, HHC and Baker
shall have received an opinion from Heidelberg & Woodliff, P.A. to the
effect that the Merger will constitute a reorganization within the
meaning of Section 368 of the Internal Revenue Code and no gain or
loss will be recognized by those Baker stockholders who exchange their
Baker common stock for HHC common stock, except for cash paid in lieu
of fractional shares or to dissenting stockholders.
7.2 Conditions to Obligations of Baker to Effect the Merger. The
obligations of Baker to effect the Merger shall be subject to the following
additional conditions:
a. Representations and Warranties. The representations
and warranties of HHC set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and
as of the Closing as though made at and as of the Closing, except as
otherwise contemplated by this Agreement or consented to in writing by
Baker.
b. Performance of Obligations. HHC shall have performed
in all material respects all obligations required to be performed by
it under this Agreement prior to the Closing.
c. Legal Opinion. An opinion of HHC's legal counsel
shall be delivered to Baker dated the Closing Date and in form and
substance reasonably satisfactory to Baker and its counsel to the
effect that:
i. HHC is a corporation duly incorporated,
validly existing and in good standing under the laws of the
State of Mississippi, and has corporate authority to own and
operate its businesses and properties and to carry on its
business as presently conducted by it;
ii. Hancock Bank is a Louisiana state chartered
bank, duly organized and validly existing and in good standing
under the laws of the State of Louisiana, and has corporate
authority to own and operate its businesses and properties and
to carry on its business as presently conducted by it;
iii. HHC and Hancock Bank had and have corporate
authority to make, execute and deliver this Agreement, it has
been duly authorized and approved by all necessary corporate
action of HHC and Hancock Bank and has been duly executed and
delivered and is as of the Closing Date its valid and binding
obligation subject, however, to bankruptcy, insolvency and
similar laws affecting the enforcement of creditors' rights
generally and to the availability of equitable remedies in
general;
iv. All required regulatory approvals have been
obtained; and
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v. To such counsel's knowledge after inquiry,
there is no litigation or proceeding pending or threatened
against HHC or Hancock Bank relating to the participation in
or consummation of this Agreement by HHC or Hancock Bank and
consummation will not violate any other contract, agreement,
charter or bylaw of HHC or Hancock Bank.
7.3 Conditions to Obligations of HHC and Hancock Bank to Effect
the Merger. The obligations of HHC and Hancock Bank to effect the Merger shall
be subject to the following additional conditions:
a. Representations and Warranties. The representations
and warranties of Baker set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and
as of the Closing as though made at and as of the Closing, except as
otherwise contemplated by this Agreement or consented to in writing by
HHC and Hancock Bank.
b. Performance of Obligations. Baker shall have
performed in all material respects all obligations required to be
performed by it under this Agreement prior to the Closing.
c. Legal Opinion. An Opinion of Baker's legal counsel
shall be delivered to HHC dated the Closing Date, and in form and
substance reasonably satisfactory to HHC to the effect that:
i. Baker is a Louisiana state chartered bank,
duly organized and validly existing and in good standing under
the laws of the State of Louisiana, and has corporate
authority to own and operate its businesses and properties and
to carry on its business as presently conducted by it;
ii. Baker had and has corporate authority to
make, execute and deliver this Agreement and it has been duly
authorized and approved by all necessary corporate action of
Baker and has been duly executed and delivered and is as of
the Closing Date its valid and binding obligation subject,
however, to bankruptcy, insolvency and similar laws affecting
the enforcement of creditors' rights generally and to the
availability of equitable remedies in general;
iii. All required regulatory approvals have been
obtained;
iv. To such counsel's knowledge after inquiry,
there is no litigation or proceeding pending or threatened
against Baker relating to the participation in or consummation
of this Agreement by Baker and consummation will not violate
any other contract, agreement, charter or bylaw of Baker; and
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v. Baker has complied with all laws and
regulations relating to dissenters' rights and all stock in
Baker will be acquired by HHC pursuant to the terms of this
Agreement and that the title and/or ownership interest in the
shares of Baker stock are as represented in Baker's
certificate at closing and that no known dispute exists as to
the title and/or ownership of any such shares.
ARTICLE 8
CLOSING
8.1 Closing. The Closing shall be held at the offices of Hancock
Bank or such other place as HHC and Baker shall mutually designate.
8.2 Deliveries at Closing. At the Closing, all documents and
instruments shall be duly and validly executed and delivered by HHC to Baker,
and possession of all liabilities and assets shall be transferred and
delivered.
8.3 Documents. The Parties shall execute any and all documents
reasonably requested by them or their legal counsel for the purpose of
effecting the transaction contemplated, including but not limited to the
following:
a. endorsement, negotiation, and/or assignment of all
original notes and Security Agreements relating to all loans;
b. warranty deeds for the real property;
c. commitments for owners title insurance for the real
property;
d. such other endorsements, assignments or other
conveyances as may be appropriate or necessary to effect the transfer
to HHC of the assets, duties, responsibilities and obligations as
referred to herein; and
e. listing of dissenting stockholders, if any, including
name, address, and number of shares owned.
ARTICLE 9
EMPLOYMENT MATTERS
9.1 Employees. Neither HHC nor Hancock Bank shall be obligated to
retain in any capacity any of Baker's officers, directors, or employees or to
pay any stipulated compensation to any employees. Hancock Bank will make
reasonable efforts to maintain compensation levels for any retained personnel
commensurate with the employees' experience and qualifications, upon such terms
as Hancock Bank desires. With regard to any
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retained employee, HHC shall be free of any obligation to honor any past
agreement of Baker to such person.
Baker's group health and life benefit plan will be continued through
1994 and effective January 1, 1995, all retained employees will be eligible to
participate in Hancock Bank's group health and life benefit plan. Retained
employees will be given full credit for past service and Hancock Bank will
waive pre-existing medical conditions for health insurance purposes as to all
retained personnel.
9.2 Retirement Plan. Baker currently maintains a 401(k) Plan
which will remain operative and in effect through December 31, 1994. Hancock
Bank will make the normal and customary match to the 401(k) Plan for the
calendar year 1994. However, Baker's 401(k) Plan will be terminated on
December 31, 1994 and distributed to vested employees of Baker in accordance
with the terms of the 401(k) Plan. The 401(k) Plan trustees will be
responsible for the termination, allocation and distribution of plan assets and
related notices and other reporting responsibilities to the IRS, Department of
Labor and other government agencies. All such termination costs will be paid
from the 401(k) Plan assets.
Effective January 1, 1995, all retained employees will be eligible to
enter the Hancock Bank Profit Sharing Plan and Hancock Bank Pension Plan with
full credit for all prior service for vesting. Effective January 1, 1995, all
retained employees will be eligible to participate in all other employment
benefit plans.
9.3 Notices. Baker shall be responsible for notifying its
employees of the terms of this Agreement as it affects and/or relates to them
and for complying with any applicable laws regarding such notices.
ARTICLE 10
REMEDIES
For purposes of this Agreement, any reference to HHC in this Article
10 shall be deemed to include HHC and Hancock Bank.
10.1 Parties' Joint Remedies. In the event regulatory authorities
impose requirements which do not materially alter this Agreement and which are
not otherwise burdensome or objectionable to the Parties, then the Parties
agree to amend this Agreement to conform to such regulatory requirements, and
specific performance shall be available as a remedy for this purpose.
10.2 Baker's Remedies. In the event HHC breaches this Agreement,
then Baker shall give HHC notice of the breach, and HHC shall have a reasonable
amount of time to cure the breach, and HHC shall be liable for such economic
damages that are the direct result of any uncured breach, but HHC shall not be
liable for consequential or punitive damages. If HHC breaches a warranty,
representation or covenant that does not materially
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affect the entire transaction, then the amount of the damages shall be mutually
agreed upon by the Parties, and if they cannot agree as to the damage, then by
an arbitrator mutually agreeable to them, and the damage determined shall be
conclusively binding on both Parties and shall be treated as an adjustment to
the Conversion Amount.
10.3 HHC's Remedies. In the event Baker breaches this Agreement,
then HHC shall give Baker notice of the breach, and Baker shall have a
reasonable amount of time to cure the breach, and Baker shall be liable for
such economic damages that are the direct result of any uncured breach, but
Baker shall not be liable for consequential or punitive damages. If Baker
breaches a warranty, representation or covenant that does not materially affect
the entire transaction, then the amount of the damages shall be mutually agreed
upon by the Parties, and if they cannot agree as to the damage, then by an
arbitrator mutually agreeable to them, and the damage determined shall be
conclusively binding on both Parties and shall be treated as an adjustment to
the Conversion Amount.
10.4 Attorney Fees. Each Party shall bear its own attorney fees
except attorney fees may be awarded by the presiding judge if the trier of fact
finds that the other Party has committed fraud against the other Party.
ARTICLE 11
TERMINATION
11.1 Termination. This Agreement may be terminated, either before
or after approval by the stockholders of Baker as follows:
a. At any time on or prior to the Effective Date, by
the mutual consent in writing of the Board of Directors of the
Parties hereto;
b. By HHC if the Merger will not qualify for accounting
by HHC as a pooling of interests under generally accepted accounting
principles and under applicable rules and regulations of the
Securities and Exchange Commission; or
c. By the Board of Directors of HHC or Hancock Bank in
writing or by the Board of Directors of Baker in writing, if the
Merger shall have not become effective on or before December 31, 1994,
unless the absence of such occurrence shall be due to the failure of
the Party seeking to terminate this Agreement to perform each of its
obligations under this Agreement required to be performed by it on or
prior to the Effective Date.
ARTICLE 12
APPRAISAL RIGHTS
12.1 Appraisal Rights of Baker. Notwithstanding any other
provision of this Agreement to the contrary, dissenting stockholders of Baker
who comply with the procedural
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requirements of the Louisiana Revised Statutes 6:376 will be entitled to
receive payment of the fair cash value of their shares if the Merger is
effected upon approval by less than eighty percent of Baker's total voting
power.
ARTICLE 13
MISCELLANEOUS
13.1 Entire Agreement. This Agreement embodies the entire
understanding of the Parties in relation to the subject matter herein and
supersede all prior understandings or agreements, oral or written, between the
Parties hereto.
13.2 Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements made herein shall survive the
Closing.
13.3 Headings. The headings and subheadings in this Agreement,
except the terms identified for definition in Article 1 and elsewhere in this
Agreement, are inserted for convenience only and shall not affect the meaning
or interpretation of this Agreement or any provision hereof.
13.4 Duplicate Originals. This Agreement may be executed in any
number of duplicate originals, any one of which when fully executed by all
Parties shall be deemed to be an original without having to account for the
other originals.
13.5 Governing Law. This Agreement and the rights and obligations
hereunder shall be governed and construed by the laws of the State of
Mississippi.
13.6 Successors; No Third Party Beneficiaries. All terms and
conditions of this Agreement shall be binding on the successors and assigns of
Baker, HHC and Hancock Bank. Except as otherwise specifically provided in this
Agreement, nothing expressed or referred to in this Agreement is intended or
shall be construed to give any person other than Baker, HHC or Hancock Bank any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provisions contained herein, it being the intention of the Parties
hereto that this Agreement, the obligations and statements of responsibilities
hereunder, and all other conditions and provisions hereof are for the sole and
exclusive benefit of Baker, HHC and Hancock Bank and for the benefit of no
other person.
13.7 Modification; Assignment. No amendment or other modification
of any part of this Agreement shall be effective except pursuant to a written
agreement subscribed by the duly authorized representatives of all of the
Parties hereto. This Agreement may not be assigned without the express written
consent of both Parties.
13.8 Notice. Any notice, request, demand, consent, approval or
other communication to any Party hereof shall be effective when received and
shall be given in writing, and delivered in person against receipt thereof, or
sent by certified mail, postage
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<PAGE> 83
prepaid or courier service at its address set forth below or at such other
address as it shall hereafter furnish in writing to the others. All such
notices and other communications shall be deemed given on the date received by
the addressee or its agent.
Baker
First State Bank & Trust Company of East Baton Rouge Parish
3033 Ray Weiland
Baker, Louisiana 70714
Attn: W. R. Allison, Chairman of the Board
HHC
Hancock Holding Company
Post Office Box 4019
Gulfport, MS 39502
Attn: Mr. George A. Schloegel, Vice Chairman
Copy to: Carl J. Chaney, Esquire
Heidelberg and Woodliff
P. O. Box 23040 Jackson, MS 39225
or
Suite 1400
125 South Congress
Jackson, Mississippi 39201
Hancock Bank
Hancock Bank of Louisiana
Post Office Box 591
Baton Rouge, Louisiana 70821
Attn: Mr. A. Bridger Eglin, President
Copy to: Carl J. Chaney, Esquire
Heidelberg and Woodliff
P. O. Box 23040 Jackson, MS 39225
or
Suite 1400
125 South Congress
Jackson, Mississippi 39201
13.9 Waiver. Baker, HHC and Hancock Bank may waive their respective
rights, powers or privileges under this Agreement; provided that such waiver
shall be in writing; and further provided that no failure or delay on the part
of Baker, HHC or Hancock Bank
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to exercise any right, power or privilege under this Agreement will operate as
a waiver thereof, nor will any single or partial exercise of any right, power
or privilege under this Agreement preclude any other or further exercise
thereof or the exercise of any other right, power or privilege by Baker, HHC or
Hancock Bank under the terms of this Agreement, nor will any such waiver
operate or be construed as a future waiver of such right, power or privilege
under this Agreement.
13.10 Costs, Fees and Expenses. Each Party hereto agrees to pay all
costs, fees and expenses which it has incurred in connection with or incidental
to the matters contained in this Agreement, including without limitation any
fees and disbursements to its accountants and counsel, except that HHC or
Hancock Bank will bear all costs and fees related to filing for regulatory
approval of this Merger Agreement and filing the Registration Statement with
the SEC. Baker will be responsible for the cost of its accountants and legal
counsel and will bear all costs related to conducting and obtaining
stockholders' approval of the Merger.
13.11 Press Releases. Baker and HHC shall consult with each other as
to the form and substance of any press release related to this Agreement or the
transactions contemplated hereby, and shall consult each other as to the form
and substance of other public disclosures related thereto, provided, however,
that nothing contained herein shall prohibit HHC, following notification to
Baker, from making any disclosures which its counsel deems necessary to conform
with requirements of law or the rules of the National Association of Securities
Dealers Automated Quotation System.
13.12 Severability. If any provision of this Agreement is invalid or
unenforceable then, to the extent possible, all of the remaining provisions of
this Agreement shall remain in full force and effect and shall be binding upon
the Parties hereto.
13.13 Mutual Covenant of Best Efforts and Good Faith. The Parties
mutually covenant and agree with each other that they will use their best
efforts to consummate the transactions herein contemplated and that they will
act and deal with each other in good faith as to this Agreement and all matters
arising from or related to it.
{THIS SPACE LEFT BLANK INTENTIONALLY}
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<PAGE> 85
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be executed by their duly authorized representatives on the date first above
written.
FIRST STATE BANK & TRUST
COMPANY OF EAST BATON ROUGE
PARISH
Directors:
/s/ GUY C. BILLUPS, JR.
___________________________________
/s/ W. R. ALLISON
___________________________________
/s/ GUY C. BILLUPS, III
___________________________________
/s/ T. A. GAY
___________________________________
/s/ R. D. HAYES
___________________________________
/s/ K. C. KELLER, SR.
___________________________________
/s/ MANSEL S. SLAUGHTER, SR.
___________________________________
/s/ B. M. STONE, JR.
___________________________________
/s/ A. T. FURR
___________________________________
HANCOCK HOLDING COMPANY
By: /s/ LEO W. SEAL, JR.
___________________________________
Name: LEO W. SEAL, JR.
Title: PRESIDENT AND CEO
HANCOCK BANK OF LOUISIANA
By: /s/ A. BRIDGER EGLIN
___________________________________
Name: A. BRIDGER EGLIN
Title: PRESIDENT
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<PAGE> 86
HANCOCK BANK OF LOUISIANA
Directors:
/s/ RICHARD M. HILL, M. D.
___________________________________
/s/ J. B. OLINDE
___________________________________
/s/ GEORGE A. SCHLOEGEL
___________________________________
/s/ CHARLES A. WEBB, JR.
___________________________________
(consisting of a majority of its
directors)
___________________________________
___________________________________
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<PAGE> 87
EXHIBIT A
LETTER OF TRANSMITTAL
FOR COMMON STOCK OF FIRST STATE BANK & TRUST COMPANY
OF EAST BATON ROUGE PARISH
BAKER, LOUISIANA
(Please read carefully the Instructions on the Reverse Side of this Letter)
(Affix Label)
_____________________________
Mail or Deliver Letters of Transmittal to: Hancock Bank
ATTN: Ms. Dot Miller
Post Office Box 4019
Gulfport, Mississippi 39502
_______________________, 1994
(Please print date)
Dear Sir:
The undersigned hereby delivers to Hancock Bank, as Transfer Agent,
all shares of common stock of First State Bank & Trust Company of East Baton
Rouge Parish ("First State Bank") owned by the undersigned, which are evidenced
by the certificates enclosed herewith, for exchange and conversion into shares
of Hancock Holding Company, ("Hancock") common stock, $3.33 par value per
share, pursuant to the terms of the Agreement and Plan of Reorganization dated
November 30, 1993 and adopted by First State Bank's stockholders on
____________________, 1994.
FILL IN ONLY IF DELIVERY IS TO BE MADE
TO DIFFERENT ADDRESS THAN SHOWN ON THE ABOVE LABEL
SPECIAL MAILING INSTRUCTIONS
Name:____________________________________
(Type or print)
Address:_________________________________
(Number) (Street)
_________________________________________
(City) (State) (Zip)
Witnessed: Signature of Stockholder(s)
_________________________________
_________________________________ _________________________________
(Sign exactly as name appears
on stock certificate or assignment)
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<PAGE> 88
INSTRUCTIONS
1. Completion and Delivery of Letter of Transmittal
This Letter of Transmittal must be filled in properly, signed and delivered or
forwarded with the certificate(s) of stock to Hancock Bank, Attn: Ms. Dot
Miller, Post Office Box 4019, Gulfport, Mississippi 39502. SINCE THE RISK OF
LOSS IN TRANSIT IS YOURS, THE USE OF INSURED REGISTERED MAIL IS SUGGESTED IN
TRANSMITTING YOUR CERTIFICATE(S).
2. Signing Letter of Transmittal
The stockholder's name on the Letter of Transmittal should be signed in exactly
the same manner as the name appears on the stock certificate(s). If the
certificate(s) is to be registered in a name other than that currently
appearing on the certificate(s) then the signatures on the certificate(s) must
be guaranteed by a Medallion Member. Signatures by the stockholder(s) should be
witnessed by another person, who shall sign this Letter of Transmittal. When
the Letter of Transmittal is signed by an attorney, administrator, trustee or
guardian, or anyone acting in a fiduciary capacity, or by an officer of a
corporation, the person executing the letter must give his full title in such
capacity, and proper certified evidence of authority to act in such capacity,
reasonably satisfactory to Hancock Bank, must be forwarded with the Letter of
Transmittal. If a certificate is in the name of more than one holder, each
holder named in the certificate should sign. (This shall apply in the event
your certificate is registered in an "and", "or" or "joint tenants with right
of survivorship" capacity.) If a joint tenant has deceased, the surviving joint
tenant must submit to Hancock Bank a certified death certificate.
3. Lost or Destroyed Certificates
If the certificate(s) representing your shares have been either lost or
destroyed, notify Hancock Bank of this fact promptly at its address set forth
on the reverse side hereof. In the event of lost or destroyed certificate(s),
you will be required to take the following steps prior to the transmission and
issuance of new Hancock certificates to you:
(a) The delivery of an indemnity bond in an amount equal
to or greater than the current market value of the
securities, to indemnify and hold Hancock Bank
harmless; and
(b) The presentation of evidence to Hancock's reasonable
satisfaction that you are the owner of the shares
theretofore represented by the certificate(s) claimed
by you to be lost, wrongfully taken or destroyed and
that you are the person who would be entitled to
present each such certificate for exchange pursuant
to the terms of the Agreement and Plan of
Reorganization.
4. Dividends Withheld
In accordance with Section 3.2(e) of the Agreement and Plan of Reorganization,
all dividends and similar distributions of Hancock payable to stockholders
after ______________, 1994, may be withheld by Hancock until you have properly
surrendered your First State Bank share certificate(s) for conversion into
shares of Hancock.
5. Delivery of New Certificates
Upon receipt of the properly executed Letter of Transmittal and related stock
certificate(s), Hancock Bank will mail to the address indicated hereon, new
stock certificate(s) of Hancock within five (5) business days of such receipt.
6. Questions or Clarifications
Any questions regarding the completion of the Letter of Transmittal should be
directed to Ms. Dot Miller at (601) 868-4414.
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<PAGE> 89
EXHIBIT B
FORM OF AFFILIATE AGREEMENT
____________________, 1994
Hancock Holding Company
One Hancock Plaza
Gulfport, Mississippi 39502
Gentlemen:
I, the undersigned director, executive officer or significant
stockholder of First State Bank and Trust Company of East Baton Rouge Parish,
Baker, Louisiana ("Baker"), acknowledge and understand that, as an affiliate of
Baker, Rule 145 promulgated under the Securities Act of 1933, as amended (the
"Act"), restricts my ability to sell, pledge, transfer or otherwise dispose of
the shares of Hancock Holding Company ("HHC") common stock to be issued to me
in the Agreement and Plan of Reorganization ("Merger") between HHC and Baker,
unless the requirements of Rule 145(d) are satisfied or the sale, pledge,
transfer or disposition is otherwise in compliance with the Act.
Accordingly, I represent and agree that:
1. I will not sell, pledge, transfer or otherwise dispose of any
shares of HHC common stock received in the Merger during the
period beginning on the effective date of the Merger and
ending 30 days following HHC's publication (within the meaning
of Section 201.01 of the Securities and Exchange Commission's
Codification of Financial Reporting Policies) of the results
of combined operations of HHC and Baker;
2. I will not sell, pledge, transfer or otherwise dispose of said
securities unless in accordance with the provisions of
paragraphs (c), (e), (f) and (g) of Rule 144 under the Act or
otherwise in compliance with the Act;
3. I have no plan or intention to sell, pledge, transfer or
otherwise dispose of a number of said securities to be
received in the Merger that would reduce Baker stockholders'
ownership of the HHC common stock to a number of shares having
a value, as of the date of the Merger, of less than 50% of the
value of all of the formerly outstanding Baker common stock as
of the same date.
4. I understand that the certificates for shares of HHC received
pursuant to the Merger will bear a restrictive legend, to the
effect that the shares were received in a transaction to which
Rule 145 applies, as follows:
"The shares represented by this certificate have been
issued or transferred to the registered holder as a
result of a transaction to which Rule 145 under the
Securities Act of 1933, as amended (the "Act"),
applies. The shares represented by this certificate
may not be sold, transferred, pledged or assigned,
and the issuer shall not be required to give effect
to any attempted sale, transfer, pledge or
assignment, except in accordance with the
requirements of the Act and the other conditions
specified in that certain Affiliates Agreement dated
as of _________________________, 1993 between the
issuer and the shareholder, a copy of which Agreement
will be furnished, without charge, by Hancock Holding
Company to the holder of this certificate upon
written request therefor."
5. I agree to be bound by the terms of this letter until the
expiration of the time period set forth in Rule 145(d)(2) or
(3), whichever may apply.
Sincerely,
_____________________________________
Title:_______________________________
Accepted and agreed to:
HANCOCK HOLDING COMPANY
By:___________________________________
Title:________________________________
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<PAGE> 90
EXHIBIT C
JOINDER OF SHAREHOLDER
In consideration of the foregoing Agreement, the undersigned joins
therein, agrees, subject to his fiduciary duty as an officer and director of
First State Bank & Trust Company of East Baton Rouge Parish, to use his best
efforts to cause the transactions contemplated thereby to be accomplished, and
agrees not to sell or otherwise dispose of any of his shares of common stock of
First State Bank & Trust Company of East Baton Rouge Parish, or enter into any
agreements or understandings with respect thereto, or grant any proxy or other
right to vote such shares (other than to persons designated to vote in favor of
the Agreement) unless this Agreement is terminated.
Gulfport, Mississippi
Dated as of February 3, 1994 /s/ GUY C. BILLUPS, JR.
____________________________
Guy C. Billups, Jr.
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<PAGE> 91
EXHIBIT D
CASHIER'S CERTIFICATE
I certify that I am the Cashier of Hancock Bank of Louisiana ("Hancock
Bank") located in Baton Rouge, Louisiana, and that I have been appointed and
that I am presently serving in that capacity in accordance with the Bylaws of
Hancock Bank.
I further certify that the Agreement and Plan of Reorganization dated
as of November 30, 1993 (the "Agreement") by and among First State Bank & Trust
Company of East Baton Rouge Parish, Baker, Louisiana; Hancock Holding Company,
Gulfport, Mississippi; and Hancock Bank, a wholly owned subsidiary of Hancock
Holding Company, does not amend the Articles of Hancock Bank as the surviving
bank, and the shares of Hancock Holding Company common stock to be issued under
the Agreement do not exceed fifteen percent (15%) of the shares of Hancock
Holding Company or Hancock Bank outstanding immediately prior to effectiveness
of the Merger, and thus pursuant to Louisiana Revised Statutes 6:352(6), the
approval of the Agreement by Hancock Holding Company's stockholders or Hancock
Bank's stockholders is not required.
IN WITNESS WHEREOF, I have hereupon set the seal of this Bank, this
the 19th day of January, 1994.
HANCOCK BANK OF LOUISIANA
By:/s/ JAMES D. LABAUVE
________________________________
James D. LaBauve, Cashier
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<PAGE> 92
LOUISIANA BANKING LAWS
PART V: RIGHTS OF DISSENTING STOCKHOLDERS
6:376. Rights of a stockholder dissenting from certain actions
A. Except as provided in Subsection B of this Section, if a state
bank has, by vote of its stockholders, authorized a sale, lease or exchange of
all or substantially all of its assets, or become a party to a merger or
consolidation, or authorized a conversion into a national bank, or authorized a
voluntary liquidation, then, unless such authorization or action shall have
been given or approved by at least eighty percent of the total voting power, a
stockholder who voted against such action shall have the right to dissent.
B. The right to dissent provided by this Section shall not exist
in the case of stockholders holding shares of any class of stock which, at the
record date fixed to determine stockholders entitled to receive notice of and
to vote at the meeting of stockholders at which a merger or consolidation was
acted on, were listed on a national securities exchange, unless the articles of
the bank issuing such stock provided otherwise or the shares of such
stockholders were not converted by the merger or consolidation solely into
shares of the surviving or new bank.
C. (1) Except as provided in the last sentence of this
Subsection, any stockholder electing to exercise such right of dissent
shall file with the bank, prior to or at the meeting of stockholders
at which such proposed action is submitted to a vote, a written
objection to such proposed action and shall vote his shares against
such action.
(2) If such proposed action be taken by the required vote
but by less than eighty percent of the total voting power, and the
merger, consolidation, sale, liquidation, or conversion authorized
thereby be effected, the bank shall promptly thereafter give written
notice thereof, by registered mail, to each stockholder who filed such
written objection to and voted his shares against such action at such
stockholder's last address on the bank's records.
(3) Each such stockholder may, within twenty days after
the mailing of such notice to him but not thereafter, file with the
bank a demand in writing for the fair cash value of his shares as of
the day before such vote was taken, provided that he state in such
demand the value demanded and a post office address to which the reply
of the bank may be sent and at the same time deposit in escrow in a
bank or trust company located in the parish of the domicile of the
bank the certificates representing his shares duly endorsed and
transferred to the escrow bank upon the sole condition that said
certificates shall be delivered to the bank upon payment of the value
of the shares determined in accordance with the provisions of this
Section. With his demand the stockholder shall deliver to the bank
the written acknowledgement of such escrow bank or trust company with
which such certificates have been deposited that it so holds his
certificates of stock.
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<PAGE> 93
(4) Unless the objection, demand, and acknowledgement
aforesaid be made and delivered by the stockholder within the period
described in this SubSection, he shall conclusively be presumed to
have acquiesced in the action proposed or taken.
D. If the bank does not agree to the value so stated and demanded
or does not agree that a payment is due, it shall, within twenty days after
receipt of such demand and acknowledgement, notify in writing the stockholder,
at the designated post office address of its disagreement and shall state in
such notice the value it will agree to pay if any payment should be held to be
due; otherwise, it shall be liable for and shall pay to the dissatisfied
stockholder the value demanded by him for his shares.
E. (1) In case of disagreement as to such fair cash value or
as to whether any payment is due after compliance by the parties with
the provisions of Subsections C and D of this Section, the
dissatisfied stockholder within sixty days after receipt of notice in
writing of the bank's disagreement but not thereafter may file suit
against the bank or the merged or consolidated bank, as the case may
be, in the district court of the parish in which the bank or the
merged or consolidated bank, as the case may be, is domiciled praying
the court to fix and decree the fair cash value of the dissatisfied
stockholder's shares as of the day before the action complained of was
taken, and the court shall, on such evidence as may be adduced in
relation thereto, determine summarily whether any payment is due and,
if so, such cash value, and render judgment accordingly.
(2) Any stockholder entitled to file such a suit may,
within such sixty-day period, but not thereafter, intervene as a
plaintiff in such a suit filed by another stockholder and recover
therein judgement against the bank for the fair cash value of his
shares. No order or decree shall be made by the court staying the
proposed action, and any such action may be carried to completion
notwithstanding any such a suit.
(3) Failure of the stockholder to bring suit, or to
intervene in such a suit within sixty days after receipt of notice of
disagreement by the bank shall conclusively bind the stockholder:
(a) By the bank's statement that no payment is
due or
(b) If the bank does not contend that no payment
is due, to accept the value of his shares as fixed by
the bank in its notice of disagreement.
F. When the fair value of the shares has been agreed upon between
the stockholder and the bank or when the bank has become liable for the value
demanded by the stockholder because of failure to give notice of disagreement
and of the value it will pay or when the stockholder has become bound to accept
the value the bank agrees is due because of his failure to bring suit within
sixty days after receipt of notice of bank's
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<PAGE> 94
disagreement, the action of the stockholder to recover such value must be
brought within five years from the date the value was agreed upon or the
liability of the bank became fixed.
G. If the bank or the merged or consolidated bank, as the case
may be, shall, in its notice of disagreement, have offered to pay the
dissatisfied stockholder on demand an amount in cash deemed by it to be fair
cash value of his shares, and if, on the institution of a suit by the
dissatisfied stockholder claiming an amount in excess of the amount offered,
the bank or the merged or consolidated bank, as the case may be, shall deposit
in the registry of the court, there to remain until the final determination of
the cause, the amount so offered; then, if the amount finally awarded such
stockholder, exclusive of interest and costs, be more than the amount offered
and deposited as aforesaid, the cost of the proceeding shall be taxed against
the bank or the merged or consolidated bank, as the case may be, and judicial
interest may be awarded against such bank only on the amount of the award in
excess of the amount deposited in the registry of the court; otherwise, the
costs of the proceeding shall be taxed against such stockholder.
H. Upon filing a demand for the value of his shares, the
stockholder shall cease to have any of the rights of a stockholder except the
rights accorded by this Section. Such a demand may be withdrawn by the
stockholder at any time before the bank gives notice of disagreement as
provided in SubSection D of this Section. After such notice of disagreement is
given, withdrawal of a notice of election shall require the written consent of
the bank. If a notice of election is withdrawn, or the proposed corporate
action is abandoned or rescinded or a court should determine that the
stockholder is not entitled to receive payment for his shares, or the
stockholder should otherwise lose his dissenter's rights:
(1) He shall not have the right to receive a payment for
his shares;
(2) His share certificates shall be returned to him and,
on his request, new certificates shall be issued to him in
exchange for the old ones endorsed to the bank, and
(3) He shall be reinstated to all his rights as a
stockholder as of the filing of his demand for value,
including any intervening preemptive rights and the right to
payment of any intervening dividend or other distribution, or,
if any rights have expired or any such dividend or
distribution other than in cash has been completed in lieu
thereof, at the election of the bank he shall receive the fair
value thereof in cash as determined by the board as of the
time of such expiration or completion but without prejudice
otherwise to any proceeding that may have been taken in the
interim.
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<PAGE> 95
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles provide for indemnification to the fullest
extent allowed by law. The Articles of the Company provide in Article Sixth
certain provisions regarding the extent to which the Company will provide
indemnification of and advancement of expenses to its directors, officers,
employees and agents as well as persons serving at the request of the Company
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise (collectively
referred to as "eligible persons").
The Company's Bylaws currently contain a provision requiring the
Company to indemnify any director, officer, employee or agent who is made a
party or threatened to be made a party to any threatened, pending or completed
claim, action, suit or proceeding, other than an action by or in the right of
the Company, by reason of the fact that such person is or was a director,
officer, employee or agent of the Company, or is or was serving at the request
of the Company as a director, officer, partner, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
reasonably incurred expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement, but only if such person acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests
of the Company, and, in criminal actions, he had no reasonable cause to believe
his conduct was unlawful.
Unless limited by its Articles of Incorporation the Mississippi
Business Corporation Act (MBCA) mandates that the Company indemnify any
director who is successful, on the merits or otherwise, in the defense of any
proceeding to which he was a party, against reasonable expenses incurred by him
in connection with the proceeding (the "Mandatory Provision"). The MBCA
permits the Company to indemnify a director who is made a party to a proceeding
against liability (including reasonable expenses) incurred in connection with
such proceeding provided (1) the director's conduct was in good faith, (2) in
the case of conduct in his official capacity, the director reasonably believed
his conduct was in the best interests of the Company, (3) in the case of
conduct not in his official capacity, the director reasonably believed his
conduct was not opposed to the best interests of the Company, (4) in the case
of any criminal proceeding, the director had no reasonable cause to believe
that his conduct was unlawful, (5) in the case of claims by or in the right of
the Company, the director is not adjudged liable to the Company, and (6) in the
case of third-party claims, the director is not adjudged liable on the basis
that he derived an improper personal benefit (the "Permissive Provision").
Statutory indemnification is permitted under the Permissive Provision, however,
only if indemnification is authorized in a specific case after a determination
is made by the Board of Directors (by majority vote of a quorum consisting of
directors not at the time parties to the proceeding), by a majority of a
special committee of disinterested directors (if such quorum of directors is
unobtainable), by special legal counsel or by the shareholders (a
"Disinterested Party"), that the director has met the applicable standard of
conduct. The MBCA also provides that unless the Company's Articles of
Incorporation provide otherwise, a court may order indemnification of a
director even if it finds he has not met the applicable standard of conduct, or
in the case of third-party claims, involving action where the director acted
within or without of his official
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<PAGE> 96
capacity, the director is adjudged liable on the basis that he derived an
improper personal benefit, the director was adjudged liable to the Company in a
proceeding by or in the right of the Company, if the court determines that the
director is reasonably entitled to indemnification in view of all the relevant
circumstances; provided, however, that if the director was adjudged liable to
the Company, his indemnification is limited to reasonable expenses. The MBCA
permits the Company to pay for or reimburse the reasonable expenses incurred by
a director in advance of final disposition of the proceeding, provided the
director affirms that he reasonably believes he has met the applicable standard
of conduct, the director agrees to repay the advance if it is ultimately
determined that he did not meet the standard of conduct, and a determination is
made by a Disinterested Party that the facts then known to the person(s) making
the determination would not preclude indemnification. The MBCA also permits
the Company to indemnify officers, employees and agents of the Company to the
same extent permitted for directors. Finally, the MBCA allows indemnification
beyond the scope of the Amended and Restated Mandatory and Permissive
Provisions.
Article Sixth of the Articles of Incorporation does not limit the
applicability of the indemnification provisions contained in the MBCA and, as
permitted by the MBCA, requires the Company to indemnify Eligible Persons
beyond the scope of such provisions. The Company must indemnify an Eligible
Person, despite the fact that such person has not met the standard of conduct
set forth in the Permissive Provision or would be disqualified for
indemnification under the Permissive Provision because such person was either
found liable to the Company in a suit brought by or in the right of the Company
or was found liable in a third-party action on the basis that he received an
improper personal benefit, if a determination is made by a Disinterested Party,
or a court, that the act or omissions of the person seeking indemnification did
not constitute gross negligence or willful misconduct. Article Sixth also
provides for mandatory advancement of reasonable expenses to a person seeking
indemnification, without an affirmation by such person that he believes he has
met the applicable standard of conduct, as long as he agrees to repay the
advance if it is ultimately determined that he has not met the standard of
conduct and a Disinterested Party determines that the facts then known to such
Disinterested Party would not preclude indemnification.
Article Sixth further provides that no amendment or repeal of its
provisions may be applied retroactively with respect to any event that occurred
prior to such amendment or appeal. The effect of such provision is that the
protection of Article Sixth may not be taken away or diminished by an amendment
in the event of a change in control of the Company.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer, or controlling person of the Registrant in the successful
defense of any such action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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<PAGE> 97
ITEM 21. EXHIBITS
2.1 Agreement and Plan of Reorganization dated November 30, 1993
among Hancock Holding Company, Hancock Bank of Louisiana and
First State Bank & Trust Company of East Baton Rouge Parish,
Baker, Louisiana (included as Exhibit A to the
Prospectus/Proxy Statement).
3.1 Amended and Restated Articles of Incorporation dated November
8, 1990 (filed as Exhibit 3.1 to the Registrant's Form 10-K
for the year ended December 31, 1990, and incorporated herein
by reference).
3.2 Bylaws of Hancock Holding Company restated through November 8,
1990 (filed as Exhibit 3.2 to the Registrant's Form 10-K for
the year ended December 31, 1990, and incorporated herein by
reference).
3.3 Articles of Amendment to the Articles of Incorporation of
Hancock Holding Company, dated October 16, 1991 (filed as
Exhibit 4.1 to the Registrant's Form 10-Q for the quarter
ended September 30, 1991, and incorporated herein by
reference).
3.4 Articles of Correction, filed with Mississippi Secretary of
State on November 15, 1991 (filed as Exhibit 4.2 to the
Registrant's Form 10-Q for the quarter ended September 30,
1991, and incorporated herein by reference).
3.5 Articles of Amendment to the Articles of Incorporation of
Hancock Holding Company, adopted February 13, 1992 (filed as
Exhibit 3.5 to the Registrant's Form 10-K for the year ended
December 31, 1992, and incorporated herein by reference).
3.6 Articles of Correction, filed with the Mississippi Secretary
of State on March 2, 1992 (filed as Exhibit 3.6 to the
Registrant's Form 10-K for the year ended December 31, 1992,
and incorporated herein by reference).
4.1 Specimen stock certificate (reflecting change in par value
from $10.00 to $3.33, effective March 6, 1989)(filed as
Exhibit 4.1 to the Registrant's Form 10-Q for the quarter
ended March 31, 1989, and incorporated herein by reference).
5.1 Heidelberg & Woodliff, P.A. Opinion.
5.2 Paul T. Thompson, Esq. Opinion.
8.1 Heidelberg & Woodliff, P.A. Tax Opinion.
10.1 Description of Hancock Bank Executive Supplemental
Reimbursement Plan, as amended (provided on page 14 of the
Registrant's definitive proxy statement for its annual
shareholders' meeting on February 24, 1994, and incorporated
herein by reference).
10.2 Description of Hancock Bank Automobile Plan (provided on page
14 of the Registrant's definitive proxy statement for its
annual shareholders' meeting on February 24, 1994, and
incorporated herein by reference).
10.3 Description of Deferred Compensation Arrangement for Directors
(provided on pages 10-15 of the Registrant's definitive proxy
statement for its annual shareholders' meeting on February 24,
1994, and incorporated herein by reference).
10.4 Site Lease Agreement between Hancock Bank and City of
Gulfport, Mississippi dated as of March 1, 1989 (filed as
Exhibit 10.4 to the Registrant's Form 10-K for the year ended
December 31, 1989, and incorporated herein by reference).
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<PAGE> 98
10.5 Project Lease Agreement between Hancock Bank and City of
Gulfport, Mississippi dated as of March 1, 1989 (filed as
Exhibit 10.5 to the Registrant's Form 10-K for the year ended
December 31, 1989, and incorporated herein by reference).
10.6 Deed of Trust dated as of March 1, 1989 from Hancock Bank to
Deposit Guaranty National Bank as trustee (filed as Exhibit
10.6 to the Registrant's Form 10-K for the year ended December
31, 1989, and incorporated herein by reference).
10.7 Trust Indenture between City of Gulfport, Mississippi and
Deposit Guaranty National Bank dated as of March 1, 1989
(filed as Exhibit 10.7 to the Registrant's Form 10-K for the
year ended December 31, 1989, and incorporated herein by
reference).
10.8 Guaranty Agreement dated as of March 1, 1989 from Hancock Bank
to Deposit Guaranty National Bank as trustee (filed as Exhibit
10.8 to the Registrant's Form 10-K for the year ended December
31, 1989, and incorporated herein by reference).
10.9 Bond Purchase Agreement dated as of February 23, 1989, among
Hancock Bank, J.C. Bradford & Co. and City of Gulfport,
Mississippi (filed as Exhibit 10.9 to the Registrant's Form
10-K for the year ended December 31, 1989, and incorporated
herein by reference).
10.10 Dividend Reinvestment and Stock Purchase Plan (filed as Form
S-3 Registration Statement, Commission No. 33-31782 on October
26, 1989, as amended on March 20, 1991, and incorporated
herein by reference).
21. Subsidiaries of the Registrant (filed as Exhibit 22 to the
Registrant's Form 10-K for the year ended December 31, 1993,
and incorporated herein by reference).
23.1 Deloitte & Touche Consent.
23.2 Deloitte & Touche Consent.
23.3 Heidelberg & Woodliff, P.A. Consent.
23.4 Paul T. Thompson, Esq. Consent.
24. Power of Attorney.
99. Form of Proxy
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<PAGE> 99
ITEM 22. UNDERTAKINGS
A. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. (1) The undersigned Registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered hereunder through
use of a prospectus which is a part of this Registration Statement, by any
person or party who is deemed to be an underwriter within the meaning of Rule
145(c), the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
(2) The Registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (1) immediately preceding; or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the Registration Statement and will be used until such amendment
is effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
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<PAGE> 100
D. The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
E. The undersigned Registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt
of such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of this Registration Statement through
the date of responding to the request.
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<PAGE> 101
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Gulfport,
State of Mississippi, this 11th day of February, 1994.
HANCOCK HOLDING COMPANY
(Registrant)
By: /s/ LEO W. SEAL, JR.
_______________________________________
Leo W. Seal, Jr.,
President and Chief Financial Officer
By: /s/ GEORGE A. SCHLOEGEL
_______________________________________
George A. Schloegel
Director and Vice Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- - ---------- ----- ----
<S> <C> <C>
By:*/s/ JOSEPH F. BOARDMAN, JR. Chairman of the Board February 11, 1994
_____________________________________ and Director
Joseph F. Boardman, Jr.
By:*/s/ THOMAS W. MILNER, JR. Director February 11, 1994
_____________________________________
Thomas W. Milner, Jr.
By:*/s/ DR. HOMER C. MOODY, JR. Director February 11, 1994
_____________________________________
Dr. Homer C. Moody, Jr.
By:*/s/ A. F. DANTZLER Director February 11, 1994
_____________________________________
A. F. Dantzler
By:*/s/ VICTOR MAVAR Director February 11, 1994
_____________________________________
Victor Mavar
By:*/s/ CHARLES H. JOHNSON Director February 11, 1994
_____________________________________
Charles H. Johnson
By:*/s/ L. A. KOENENN, JR. Director February 11, 1994
_____________________________________
L. A. Koenenn, Jr.
By:*/s/ LEO W. SEAL, JR. President, Chief Financial February 11, 1994
_____________________________________ Officer and Director
Leo W. Seal, Jr.
*By: /s/ GEORGE A. SCHLOEGEL February 11, 1994
____________________________________
George A. Schloegel,
Attorney-in-Fact
</TABLE>
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<PAGE> 102
As filed with the Securities and Exchange Commission on March 31, 1994.
Registration File No. 33-52251
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
EXHIBITS
TO
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________________
HANCOCK HOLDING COMPANY
================================================================================
<PAGE> 103
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION SEQUENTIAL PAGE NO.
- - ----------- ----------- -------------------
<S> <C> <C>
2.1 Agreement and Plan of Reorganization dated November 30, 1993
among Hancock Holding Company, Hancock Bank of Louisiana and
First State Bank & Trust Company of East Baton Rouge Parish,
Baker, Louisiana (included as Exhibit A to the Prospectus/Proxy
Statement). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.1 Amended and Restated Articles of Incorporation dated November 8, 1990
(filed as Exhibit 3.1 to the Registrant's Form 10-K for the year ended December 31,
1990, and incorporated herein by reference). . . . . . . . . . . . . . . . . . . . . . . . .
3.2 Bylaws of Hancock Holding Company restated through November 8, 1990 (filed as
Exhibit 3.2 to the Registrant's Form 10-K for the year ended
December 31, 1990, and incorporated herein by reference). . . . . . . . . . . . . . . . . .
3.3 Articles of Amendment to the Articles of Incorporation
of Hancock Holding Company, dated October 16, 1991 (filed as
Exhibit 4.1 to the Registrant's Form 10-Q for the quarter
ended September 30, 1991, and incorporated herein by
reference). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.4 Articles of Correction, filed with Mississippi Secretary of
State on November 15, 1991 (filed as Exhibit 4.2 to the
Registrant's Form 10-Q for the quarter ended September 30, 1991,
and incorporated herein by reference). . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.5 Articles of Amendment to the Articles of Incorporation of Hancock
Holding Company, adopted February 13, 1992 (filed as Exhibit 3.5 to
the Registrant's Form 10-K for the year ended December 31, 1992, and
incorporated herein by reference). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.6 Articles of Correction, filed with the Mississippi Secretary of
State on March 2, 1992 (filed as Exhibit 3.6 to the Registrant's Form
10-K for the year ended December 31, 1992, and incorporated herein
by reference). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.1 Specimen stock certificate (reflecting change in par value from $10.00 to $3.33,
effective March 6, 1989)(filed as Exhibit 4.1 to the Registrant's Form 10-Q
for the quarter ended March 31, 1989, and incorporated herein by reference). . . . . . . . .
5.1 Heidelberg & Woodliff, P.A. Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2 Paul T. Thompson, Esq. Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.1 Heidelberg & Woodliff, P.A. Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . .
10.1 Description of Hancock Bank Executive Supplemental Reimbursement Plan,
as amended (provided on page 14 of the Registrant's definitive proxy statement
for its annual shareholders' meeting on February 24, 1994, and incorporated
herein by reference). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.2 Description of Hancock Bank Automobile Plan (provided on page 14 of the
Registrant's definitive proxy statement for its annual shareholders' meeting
on February 24, 1994, and incorporated herein by reference). . . . . . . . . . . . . . . . .
10.3 Description of Deferred Compensation Arrangement for Directors (provided on pages 10-15
of the Registrant's definitive proxy statement for its annual shareholders'
meeting on February 24, 1994, and incorporated herein by reference). . . . . . . . . . . . .
10.4 Site Lease Agreement between Hancock Bank and City of Gulfport, Mississippi
dated as of March 1, 1989 (filed as Exhibit 10.4 to the Registrant's
Form 10-K for the year ended December 31, 1989, and incorporated
herein by reference). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.5 Project Lease Agreement between Hancock Bank and City of Gulfport,
Mississippi dated as of March 1, 1989 (filed as Exhibit 10.5 to the Registrant's
Form 10-K for the year ended December 31, 1989, and incorporated herein by
reference). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
<PAGE> 104
<TABLE>
<S> <C> <C>
10.6 Deed of Trust dated as of March 1, 1989 from Hancock Bank to Deposit
Guaranty National Bank as trustee (filed as Exhibit 10.6 to the Registrant's
Form 10-K for the year ended December 31, 1989, and incorporated herein
by reference). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.7 Trust Indenture between City of Gulfport, Mississippi and Deposit Guaranty
National Bank dated as of March 1, 1989 (filed as Exhibit 10.7 to the Registrant's
Form 10-K for the year ended December 31, 1989, and incorporated herein
by reference). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.8 Guaranty Agreement dated as of March 1, 1989 from Hancock Bank to Deposit
Guaranty National Bank as trustee (filed as Exhibit 10.8 to the Registrant's
Form 10-K for the year ended December 31, 1989, and incorporated herein
by reference). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.9 Bond Purchase Agreement dated as of February 23, 1989, among Hancock Bank,
J.C. Bradford & Co. and City of Gulfport, Mississippi (filed as Exhibit 10.9
to the Registrant's Form 10-K for the year ended December 31, 1989, and
incorporated herein by reference). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.10 Dividend Reinvestment and Stock Purchase Plan (filed as Form S-3 Registration
Statement, Commission No. 33-31782 on October 26, 1989, as amended on
March 20, 1991, and incorporated herein by reference). . . . . . . . . . . . . . . . . . . .
21. Subsidiaries of the Registrant (filed as Exhibit 22 to the Registrant's
Form 10-K for the year ended December 31, 1993, and incorporated herein
by reference). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23.1 Deloitte & Touche Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23.2 Deloitte & Touche Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23.3 Heidelberg & Woodliff, P.A. Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23.4 Paul T. Thompson, Esq. Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24. Power of Attorney. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99. Form of Proxy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
<PAGE> 1
EXHIBIT 5.1
(FORM OPINION LETTER OF HEIDELBERG & WOODLIFF, P.A.)
April 29, 1994
Board of Directors
First State Bank & Trust Company
of East Baton Rouge Parish
3033 Ray Weiland
Baker, Louisiana 70714
RE: Hancock Holding Company's Acquisition of First State Bank & Trust
Company of East Baton Rouge Parish and the Subsequent Merger with and
into Hancock Bank of Louisiana
Dear Sirs:
We have acted as counsel for Hancock Holding Company, Gulfport, Mississippi, a
Mississippi corporation (the "Company"), and Hancock Bank of Louisiana, a
Louisiana state bank ("Hancock Bank"), a wholly-owned subsidiary of Hancock
Holding Company, in connection with the execution, delivery and performance by
the Company and Hancock Bank of the Agreement and Plan of Reorganization dated
November 30, 1993 (the "Agreement") between the Company, Hancock Bank and First
State Bank & Trust Company of East Baton Rouge Parish ("First State Bank").
Reference is made to the Registration Statement on Form S-4 (the "Registration
Statement") filed by the Company with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, relating to the issuance by the
Company of shares of its common stock (the "Shares") to non-dissenting
shareholders in connection with the proposed merger (the "Merger") described in
the Agreement and Registration Statement. Capitalized terms not otherwise
defined herein have the same respective meanings ascribed to such terms in the
Agreement and Registration Statement.
We have examined originals, or copies identified to our satisfaction, of such
corporate records of the Company and Hancock Bank and have made such
examinations of law as we have deemed relevant. In our examination, we have
assumed and have not verified the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity with
the originals of all documents supplied to us as copies, and the accuracy and
completeness of all corporate records and documents and all certificates and
statements of fact, in each case given or made available to us by the Company
and Hancock Bank. We have relied upon certificates and other written documents
from public officials, government agencies and departments and from employees
of and accountants for the Company and Hancock Bank, and we have assumed the
accuracy and authenticity of such certificates and documents. In addition, we
have also relied as to matters of fact based upon the representations made by
the Company and Hancock Bank in the Agreement, Registration Statement and
Prospectus, on which we believe we are justified in relying.
<PAGE> 2
Based upon the foregoing, and having regard for such legal
considerations as we deem relevant, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Mississippi, and has corporate authority to own and operate
its businesses and properties and to carry on its business as
presently conducted by it;
2. Hancock Bank is a Louisiana state chartered bank, duly
organized and validly existing and in good standing under the
laws of the State of Louisiana, and has corporate authority to
own and operate its businesses and properties and to carry on
its business as presently conducted by it;
3. The Company and Hancock Bank had and have corporate authority
to make, execute and deliver the Agreement, it has been duly
authorized and approved by all necessary corporate action of
the Company and Hancock Bank and has been duly executed and
delivered and is as of the Closing Date its valid and binding
obligation respectively, subject, however, to bankruptcy,
insolvency and similar laws affecting the enforcement of
creditors' rights generally and to the availability of
equitable remedies in general;
4. All required regulatory approvals have been obtained; and
5. To our knowledge after inquiry, there is no litigation or
proceeding pending or threatened against the Company or
Hancock Bank relating to the participation in or consummation
of the Agreement by the Company or Hancock Bank and
consummation will not violate any other contract, agreement,
charter or bylaw of the Company or Hancock Bank.
This letter is furnished to you pursuant to the Agreement and
Registration Statement and is solely for the benefit of First State Bank.
Sincerely yours,
HEIDELBERG & WOODLIFF, P.A.
CJC/mm
<PAGE> 1
EXHIBIT 5.2
(FORM OPINION LETTER OF PAUL T. THOMPSON)
April 29, 1994
Hancock Holding Company
2510 14th Street
Gulfport, Mississippi 39501
Re: First State Bank and Trust Company
of East Baton Rouge Parish, Baker, Louisiana
Dear Sirs:
To facilitate and aid in the completion of the Agreement and Plan of
Reorganization, I have reviewed the Charter, Certificates of Authority,
corporate records, certifications and other pertinent documents and data
concerning the First State Bank and Trust Company of East Baton Rouge Parish,
Baker, Louisiana, and its status and legal authority to operate and conduct the
business of banking, as well as its authority and power to enter into and
transact the Agreement and Plan of Reorganization with Hancock Holding Company
and Hancock Bank of Louisiana, and, after such review and study, it is my
opinion that:
i. The First State Bank and Trust Company of East Baton
Rouge Parish, Baker, Louisiana, is a state chartered bank, duly
organized and validly existing and in good standing under the laws of
the State of Louisiana and has corporate authority to own and operate
its businesses and properties and to carry on its business as
presently conducted by it;
ii. The First State Bank and Trust Company of East Baton
Rouge Parish, Baker, Louisiana, had and has corporate authority to
make, execute and deliver this Agreement and it has been duly
authorized and approved by all necessary corporate action of the First
State Bank and Trust Company of East Baton Rouge Parish, Baker,
Louisiana, and has been duly executed and delivered and is as of the
Closing Date its valid and binding obligation subject, however, to
bankruptcy, insolvency and similar laws affecting the enforcement of
creditors' rights generally and to the availability of equitable
remedies in general;
iii. All required regulatory approvals have been obtained;
iv. To my knowledge after inquiry there is no litigation
or proceeding pending or threatened against the First State Bank and
Trust Company of East Baton
<PAGE> 2
Rouge Parish, Baker, Louisiana, relating to the participation in or
consummation of this Agreement by the First State Bank and Trust
Company of East Baton Rouge Parish, Baker, Louisiana, and consummation
will not violate any other contract, agreement, charter or bylaw of
the First State Bank and Trust Company of East Baton Rouge Parish,
Baker, Louisiana; and
v. First State Bank and Trust Company of East Baton
Rouge Parish, Baker, Louisiana, has complied with all laws and
regulations relating to dissenters' rights and all stock in the First
State Bank and Trust Company of East Baton Rouge Parish, Baker,
Louisiana, will be acquired by Hancock Holding Company pursuant to the
terms of the Agreement and that the title and/or ownership interest in
the shares of the First State Bank and Trust Company of East Baton
Rouge Parish, Baker, Louisiana, stock are as represented in First
State Bank and Trust Company of East Baton Rouge Parish's certificate
at closing and that no known dispute exists as to the title and/or
ownership of any such shares.
I trust that this information and opinion will be of assistance in completing
the Agreement and Plan of Reorganization.
Very truly yours,
Paul T. Thompson
PTT:pw
<PAGE> 1
EXHIBIT 8.1
(FORM TAX OPINION LETTER OF HEIDELBERG & WOODLIFF, P.A.)
THE FOLLOWING OPINION IS INTENDED TO BE RENDERED, UPON CLOSING OF THE
TRANSACTION DESCRIBED HEREIN, IN SUBSTANTIALLY THE FORM PRESENTED AND IS
SUBJECT TO ANY CHANGES WHICH MAY OCCUR IN EITHER THE FACTS OR THE LAW PRIOR TO
CLOSING.
April 29, 1994
Hancock Holding Company
2510 14th Street
Gulfport, MS 39501
First State Bank & Trust Company
of East Baton Rouge Parish
3033 Ray Weiland Drive
Baker, LA 70714
Re: Merger of First State Bank & Trust Company of East Baton Rouge Parish
("First State Bank") into Hancock Bank of Louisiana ("Hancock Bank
LA")
Gentlemen:
You have requested our opinion as to certain federal income tax consequences
incident to the proposed merger of First State Bank into Hancock Bank LA
pursuant to that certain Agreement and Plan of Reorganization ("Agreement"),
dated as of November 30, 1993, by and among Hancock Holding Company
("Hancock"), Hancock Bank LA and First State Bank and as described in the
Registration Statement on Form S-4, Registration Number 33-52251
("Registration Statement"), and the final prospectus/proxy statement
("Prospectus") constituting part of the Registration Statement. Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
such terms in the Prospectus.
In rendering this opinion, we have examined only the Agreement and the
Prospectus. We have examined applicable federal income tax provisions of the
Internal Revenue Code of 1986, as amended ("Code"), and regulatory and case law
related thereto. We have made no other examination, and our opinion is
accordingly limited by the scope of our review. We have assumed that all
required approvals will be received in connection with the Merger, that the
Merger will take place as described in the Agreement and the Prospectus, and
that the Merger will comply in all respects with applicable provisions of
Louisiana law. We have relied without investigation upon statements of fact,
representations and warranties set forth in the Agreement and the Prospectus,
and we have not independently verified such matters.
<PAGE> 2
We have assumed that the Merger has been undertaken for valid business purposes
and that the Merger is not part of a larger transaction which, taken as a
whole, would not satisfy the reorganization provisions of the Code. We have
further assumed that the First State Bank shareholders have no present plan or
intention to dispose of their stock in Hancock received as a result of the
Merger and that such shareholders, considered in the aggregate, will receive
and retain a sufficient interest in Hancock for a sufficient period of time to
satisfy the judicial "continuity of interest" requirement applicable with
respect to reorganizations.
Based upon and subject to the foregoing, and further subject to the
qualifications and limitations set forth below, we are of the opinion that:
1. The Merger will constitute a reorganization within the meaning
of Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code.
2. No gain or loss will be recognized by a stockholder of First
State bank upon the exchange of First State Bank Common Stock
solely for shares of Hancock Common Stock. (Code Section
354(a)).
3. The basis of the Hancock Common Stock received by a
stockholder of First State Bank upon the exchange of First
State Bank Common Stock for shares of Hancock Common stock
will, in each case, be the same as the basis of the First
State Bank Common Stock surrendered in exchange therefore.
(Code Section 358(a)(1)).
4. The holding period of the Hancock Common stock received by a
stockholder of First State Bank receiving Hancock Common Stock
will, in each case, include the period during which the First
State Bank Common Stock surrendered in exchange therefore was
held (provided that such common stock of First State Bank was
held by such stockholder as a capital asset at the time of the
transaction). (Code Section 1223(1)).
5. Cash, if any, received by a stockholder of First State Bank in
lieu of a fractional share interest of Hancock Common Stock
will be treated as having been received as a distribution in
redemption of the fractional share interest to which the
stockholder would otherwise be entitled, and will be subject
to the provisions and limitations of Section 302 of the Code.
Where such exchange qualifies under Section 302(a), such
stockholder will realize and recognize a capital gain or loss
assuming the First State Bank Common Stock was held as a
capital asset in such stockholder's hand at the time of the
Merger.
Our opinions herein contained are subject to the following qualifications:
(i) The federal income tax consequences described above do not apply to
any stockholders of First State Bank who exercise their dissenters'
rights and receive only cash in exchange for their shares of First
State Bank Common Stock.
<PAGE> 3
(ii) The opinions expressed in this letter are based upon the applicable
laws, regulations and ordinances in effect as of the date of this
letter. In delivering this letter to you, we are not undertaking to
apprise you either of any transactions, events or occurrences taking
place after the date of this letter of which we may acquire any
knowledge or any change in any applicable laws taking place after the
date of this letter which may affect our opinions set forth herein.
(iii) We are members of the bar of the State of Mississippi and do not
purport to be expert upon, or to express any opinion herein
concerning, any laws other than the laws of the State of Mississippi
and federal law of the United States of America. This opinion is
limited to matters arising under and governed by the provisions of the
Code relating to federal income tax and applicable regulatory and case
law promulgated thereunder or pursuant thereto. We expressly decline
to render any opinion as to the effect of state, local or other tax or
other laws.
(iv) Our opinion is limited to the specific opinions expressed above, and
no other opinions are intended or should they be inferred.
(v) This opinion is rendered as of the date hereof and is solely for the
benefit of the addressees and not for the benefit of any other person
or entity. This opinion may not be relied upon by any other person
for any other purpose without our prior written consent.
Very truly yours,
HEIDELBERG & WOODLIFF, P.A.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Hancock Holding Company on Form S-4 of our report dated January 14, 1994,
incorporated by reference in the Annual Report on Form 10-K of Hancock Holding
Company for the year ended December 31, 1993 and to the reference to us under
the heading "Experts" in the Prospectus/Proxy Statement, which is part of this
Registration Statement.
DELOITTE & TOUCHE
New Orleans, Louisiana
February 10, 1994
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement of Hancock Holding Company
on Form S-4 of our report dated January 14, 1994 (relating to the financial
statements of First State Bank & Trust Company of East Baton Rouge Parish),
appearing in the Prospectus/Proxy Statement, which is part of this Registration
Statement.
We also consent to the reference to us under the heading "Experts" in such
Prospectus/Proxy Statement.
DELOITTE & TOUCHE
New Orleans, Louisiana
February 10, 1994
<PAGE> 1
EXHIBIT 23.3
CONSENT OF HEIDELBERG & WOODLIFF, P.A.
We hereby consent to the reference to our firm under the captions "The
Merger - Certain Federal Income Tax Consequences" and "Legal Matters" in the
Prospectus/Proxy Statement constituting part of this Registration Statement on
Form S-4 of Hancock Holding Company.
HEIDELBERG & WOODLIFF, P.A.
By: /s/ CARL J. CHANEY
________________________
February 11, 1994
<PAGE> 1
EXHIBIT 23.4
CONSENT OF PAUL T. THOMPSON
I hereby consent to the reference to my name under the caption "Legal
Matters" in the Prospectus/Proxy Statement constituting part of this
Registration Statement on Form S-4 of Hancock Holding Company.
By: /s/ PAUL T. THOMPSON
Paul T. Thompson, Esquire
Attorney at Law
February 11, 1994
