HANCOCK HOLDING COMPANY
March 5, 2007
Dear Shareholder:
You are cordially invited to attend the Company's annual meeting on March 29, 2007. The meeting will begin
promptly at 5:30 p.m., local time, at Hancock Bank, One Hancock Plaza, 2510 14th Street, Gulfport, Mississippi.
The official Notice of Meeting, Proxy Statement and Form of Proxy are included with this letter. The matters
listed in the Notice of Meeting are described in detail in the Proxy Statement.
The vote of every shareholder is important. Regardless of whether or not you plan to attend the annual meeting
in Gulfport, please sign, date and promptly mail your proxy. The Board of Directors and Management look forward to
greeting those shareholders that are able to attend.
Sincerely,
/s/ Leo W. Seal, Jr.
Leo W. Seal, Jr.
President
Hancock Holding Company
One Hancock Plaza
2510 14th Street
Gulfport, MS 39501
(228) 563-6559
March 5, 2007
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of shareholders of Hancock Holding Company will be held at One Hancock Plaza, 2510 14th
Street, Gulfport, MS 39501, on March 29, 2007 at 5:30 p.m., local time for the following purposes:
1. To elect five (5) directors to hold office for a term of three (3) years or until their successors are elected
and qualified. (Item 1)
2. To vote on approval of the appointment of KPMG LLP, as the Independent Public Accountants for the Company.
(Item 2)
3. To vote on approval of the Amendment to the Company's Articles of Incorporation to increase the number of
authorized shares of Common Stock from 75,000,000 to 350,000,000. (Item 3)
Only those shareholders of record at the close of business on February 13, 2007 shall be entitled to notice of,
and to vote at, the meeting or any adjournments thereof.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE DATE, SIGN AND RETURN PROMPTLY THE ACCOMPANYING
PROXY. IF YOU DO ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.
By Order of the Board of Directors
/s/ Leo W. Seal, Jr. /s/ George A. Schloegel
Leo W. Seal, Jr. George A. Schloegel
President Chairman
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Hancock Holding Company
One Hancock Plaza
2510 14th Street
Gulfport, MS 39501
(228) 563-6559
March 5, 2007
This proxy statement is furnished in connection with the solicitation of proxies on behalf of the Board of Directors of Hancock Holding Company (the “Company” or “HHC”) for the annual meeting of shareholders to be held on March 29, 2007, 5:30 p.m., local time, at Hancock Bank, One Hancock Plaza, 2510 14th Street, Gulfport, Mississippi. Only shareholders of record at the close of business on February 13, 2007 are entitled to notice of and to vote at the meeting. It is expected the Proxy Materials will be mailed on or before March 5, 2007.
This proxy solicitation is made by the Board of Directors of HHC. Nominees are advised prior to record date to submit their request for proxy solicitation materials, and they are shipped overnight to nominees or their designated agent for process to non-objecting beneficial owners and objecting beneficial owners.
Holders of record of the Company’s Common Stock, par value $3.33 per share (the “Common Stock”) as of February 13, 2007 (the “Record Date”) are entitled to vote at the meeting or any adjournment thereof. Each share of Common Stock entitles the holder thereof to one (1) vote on each matter presented at the Annual Meeting for shareholder approval. As of the Record Date, 32,684,814 shares of Common Stock were outstanding and entitled to vote. The presence at the Annual Meeting, in person or by proxy, of a majority of the shares of Common Stock outstanding and entitled to vote on February 13, 2007 will constitute a quorum.
Pursuant to Mississippi Law and the Company’s Bylaws, action on a matter (other than the election of Directors) is approved if the votes cast favoring the action exceed the votes cast opposing the action, unless the Company’s Articles of Incorporation or Mississippi Law specifically requires a greater number of affirmative votes on a particular matter. Abstentions and broker non-votes are only for the purpose of determining whether a quorum is present at the meeting. Broker non-votes and shareholder abstentions are not counted in determining whether or not a matter has been approved by shareholders.
Pursuant to Mississippi Law and the Company’s Bylaws, directors are elected by a plurality of the votes cast in the election of directors. A “plurality” means that the individuals with the largest number of favorable votes are elected as directors, up to the maximum number of directors to be chosen at the meeting.
Shareholders of the Company do not have cumulative voting rights with respect to the election of directors at the Annual Meeting. A shareholder has the right to vote the number of shares owned in the election of each director. With respect to the election of five (5) directors to hold office for the terms indicated here in, the nominees receiving the most votes, up to five (5), will be elected. If the Proxy is marked to vote for the five (5) directors as a group, one vote will be cast for each director for each share entitled to vote. If any shareholder wishes to vote for fewer than five (5) directors, they may line through or otherwise strike out the name of any nominee.
Any person giving a Proxy has the right to revoke it at any time before it is exercised. A shareholder may revoke his Proxy: (1) by personally appearing and choosing to vote at the Annual Meeting; (2) by written notification to the Company which is received prior to the exercise of the Proxy; or (3) by a subsequent Proxy executed by the person executing the prior Proxy and presented at the Annual Meeting. All properly executed Proxies, if not revoked, will be voted as directed on all matters proposed by the Board of Directors, and, if the shareholder does not direct to the contrary, the shares will be voted “FOR” Items 1, 2, and 3 as described below.
Corporate Communications, Inc. is contracted by the Company to solicit proxy requests at a cost of approximately $3,500, plus customary expenses. The contact at Corporate Communications, Inc. is Mr. Roy Alley, 523 Third Avenue South, Nashville, Tennessee 37210. He can be reached at telephone number (615) 254-3376. All nominees and brokers will be reimbursed the allowable charges as per U.S. Securities and Exchange Commission regulations. The Company will bear the cost of the solicitation of proxy materials. All requests for payment should be directed to: Hancock Holding Company, Attention Paul D. Guichet, Investor Relations Department, P.O. Box 4019, Gulfport, MS 39502. Solicitation of proxies will be primarily by mail. Officers, directors, and employees of the Company and its subsidiaries, Hancock Bank and Hancock Bank of Louisiana, Hancock Bank of Florida and Hancock Bank of Alabama (hereinafter referred to collectively as the “Banks”) also may solicit Proxies personally.
Any shareholder, or their appointed agent, who has any questions concerning the procedures for voting their proxy or the annual meeting should contact the Corporate Investor Relations Department, attention Paul D. Guichet at (228) 563-6559 or 1-800-522-6542 ext. 86559.
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MANAGEMENT PROPOSALS:
ITEM 1 — ELECTION OF DIRECTORS
The Board of Directors, by a vote of a majority of the full Board, has nominated the persons named below for election to serve as directors. The term of each five (5) newly elected directors will expire at the Annual Meeting of Shareholders as indicated or when his successor has been elected and qualified.
The Company’s Articles of Incorporation provide for a Board of at least nine (9) directors classified into three (3) classes of directors. At each annual meeting each class of directors whose term has expired will be elected to hold office until the third succeeding annual meeting or until their successor has been elected and qualified.
It is the intent of the persons named in the Proxy to vote such Proxy “FOR” the election of the nominees listed below, unless otherwise specified in the Proxy. In the event that any such nominee should be unable to accept the office of director, which is not anticipated, it is intended that the persons named in the Proxy will vote for the election of such person in the place of such nominee as the Board of Directors may recommend.
Nominations for the election to the Board of Directors, other than those made by or at the direction of the Board of Directors, may be made by a shareholder by delivering written notice to the Company’s Corporate Secretary not less than fifty (50) nor more than ninety (90) days prior to the meeting at which directors are to be elected, provided that the Company has mailed the first notice of the meeting at least sixty (60) days prior to the meeting date. If the Company has not given such notice, shareholder nominations must be submitted within ten (10) days following the earlier of: (i) the date that notice of the date of the meeting was first mailed to the shareholders, or (ii) the date on which public disclosure of such date was made. The shareholder’s notice must set forth as to each nominee: (i) the name, age, business address and residence address of such nominee; (ii) the principal occupation or employment of such nominee; (iii) the class and number of shares of the Company’s Common Stock which are beneficially owned by such nominee; and (iv) any other information relating to such nominee that may be required under federal securities laws to be disclosed in solicitations of proxies for the election of Directors. The shareholder’s notice must also set forth as to the shareholder giving notice: (i) the name and address of such shareholder; and (ii) the class and amount of such shareholder’s beneficial ownership of the Company’s Common Stock.
If the information supplied by the shareholder is deficient in any material aspect or if the foregoing procedure is not followed, the chairman of the Annual Meeting may determine that such shareholder’s nomination should not be brought before the meeting and that such nominee shall not be eligible for election as Director of the Company.
NOMINEES FOR DIRECTOR
Don P. Descant - currently a Director
Additional information for Mr. Descant can be found in the section describing directors of the Company.
James B. Estabrook, Jr. - currently a Director
Additional information for Mr. Estabrook can be found in the section describing directors of the Company.
Robert W. Roseberry - currently a Director
Additional information for Mr. Roseberry can be found in the section describing directors of the Company.
Leo W. Seal, Jr. - currently a Director
Additional information for Mr. Seal can be found in the section describing directors of the Company.
Anthony J. Topazi - currently a Director
Additional information for Mr. Topazi can be found in the section describing directors of the Company.
The Board of Directors Recommends you voteFOR Item 1.4
ITEM 2 -- APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed KPMG LLP, a firm of independent certified public accountants, as auditors for the fiscal year ending December 31, 2007, and until their successors are selected.
The Company has been advised that neither the firm nor any of its partners has any direct or any material indirect financial interest in the securities of the Company or any of its subsidiaries, except as auditors and consultants on accounting procedures and tax matters. The Board anticipates that representatives of KPMG LLP will be in attendance at the Annual Meeting, be present to make a statement or be available to respond to questions.
Although not required to do so, the Board of Directors has chosen to submit its appointment of KPMG LLP for ratification by the Company's shareholders. It is the intention of the persons named in the Proxy to vote such Proxy FOR the ratification of this appointment. If this proposal does not pass, the Board of Directors will reconsider the matter. The proposal will be ratified if the votes cast favoring the appointment exceed the votes cast opposing it.
The Board of Directors Recommends you voteFOR Item 2.
ITEM 3 -- APPROVAL OF AMENDMENT TO THE ARTICLES OF INCORPORATIONThe Board of Directors believes it is necessary to increase the Company's authorized Common Stock from the current 75,000,000 to 350,000,000. The recommended increase is needed to provide for the reservation of shares for potential future acquisitions, the Automatic Dividend Reinvestment and Stock Purchase Plan, the Hancock Bank 401(k) plan, the Company's Shareholder Rights Plan, as well as the 2005 Long Term Incentive Plan that you approved in 2005. The Board also believes that additional authorized shares are required to ensure the Company's ability to satisfy these obligations, and to provide the Company with the flexibility to use these newly authorized shares for raising additional equity capital, for use in possible mergers and acquisitions, for stock dividends or stock splits, etc., which may appear desirable in the future. Except for the plans described above, there are presently no arrangements, intentions, nor understandings with the respect to the issuance of any additional shares of Common Stock.
If additional stock is authorized, the Board of Directors would, without further action by the shareholders unless otherwise required by law or regulation, be able to authorize issuance of the stock at such times, for such purposes and for such consideration as it may deem desirable, without further shareholder action. Any issuance of additional authorized shares could result in the dilution of each existing shareholder's voting power, and could, depending upon a variety of factors, have the effect of diluting the earnings per share or book value per share of outstanding shares of Common Stock.
Under the Company's Shareholder Rights Plan, the issuance of additional shares of Common Stock might have anti-takeover effects by diluting the voting power of a person or entity seeking to acquire the Company. This proposal to amend the Articles is not in response to any effort of which the Company is aware to accumulate the Company's stock or obtain control of the Company. The Board does not presently contemplate recommending the adoption of any other amendments to the Articles which could be construed to affect the ability of third parties to takeover or change control of the Company.
The Articles and Bylaws of the Company presently contain the following provisions which could be considered to have an anti-takeover effect: (i) authorized but unissued shares of Common Stock issuable by the Board of Directors without shareholder approval; (ii) division of the Board of Directors into three (3) classes of directors serving staggered three-year terms; (iii) Board authority to increase or decrease the size of the Board of Directors during periods between annual shareholder meetings; and (iv) the requirement of the supermajority shareholder approval to approve certain business combinations.
The Board of Directors, therefore, has unanimously voted to approve the proposed amendment to increase the authorized Common Stock to 350,000,000 shares and intends to vote for the Amendment at the Annual Meeting.
Holders of the Company's Common Stock do not have preemptive rights as to any class of stock of the Company. Therefore, the Company may issue any stock, any rights to purchase stock or any other security convertible into stock without first offering any such securities to the holders of the Common Stock. Holders of the Common Stock are entitled to one vote per share on all matters to be decided by the shareholders.
A copy of the proposed amendment to the Company's Articles as adopted by the Board of Directors is included in the Proxy Statement as Exhibit "A".
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RECOMMENDATION AND REQUIRED AFFIRMATIVE VOTE
Approval of the amendment to the Articles by the shareholders requires the affirmative vote of the holders of a majority of the votes cast (in person or by proxy) at the meeting for or against such approvals. It is expected that shares owned beneficially or controlled by the executive officers and directors of the Company (approximately 17.3% of the outstanding stock) will be voted in favor of the proposed amendment to the Articles. In addition, it is expected that approximately 3,838,672 shares or approximately 11.7 % of the Company's outstanding Common Stock, over which the Trust Department of the Bank has voting power, will be voted by the Trust Department of the Bank in favor of the proposed amendment to the Articles.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE AMENDMENT TO THE ARTICLES IS IN THE BEST INTERESTS OF THE COMPANY AND ALL ITS SHAREHOLDERS AND RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF THE AMENDMENT TO THE ARTICLES.
The Board of Directors Recommends you voteFOR Item 3.
DIRECTORS OF HHC
Alton G. Bankston
Director of the Company since 2005. Retired Owner of Bankston Paint Center, Inc., Biloxi, Mississippi. Former
President of the Greater Biloxi Economic Foundation. Member of the University of Southern Mississippi President's
Advisory Board and Mississippi Gulf Coast Community College Board. An Advisory Director of Hancock Bank since 1995.
Term of Office: For a three-year period to expire 2009.
Age: 65
Frank E. Bertucci
Director of the Company since 2000. Since 1978, Mr. Bertucci has been employed with F.E.B. Distributing Co.,
Inc., a regional beverage wholesaler and currently serves as its President. An Advisory Director of Hancock Bank since
1995.
Term of Office: For a three-year period to expire 2008.
Age: 50
Joseph F. Boardman, Jr.
Director of the Company since 1984. Chairman of the Board from 1987 to 2006. Retired President of Coast
Materials Company (Ready Mixed Concrete Business), Gulfport, Mississippi. An Advisory Director of Hancock Bank since
1972 and Hancock Bank of Florida since 2003.
Term of Office: For a three-year period to expire in 2008.
Age: 77
Carl J. Chaney
Director of the Company since 2006. Named Chief Executive Officer, Hancock Holding Company in 2006; Executive
Vice President and Chief Financial Officer of the Company, Hancock Bank, Gulfport, Mississippi and Hancock Bank of
Louisiana since 1998; Director of Hancock Bank of Florida since 2003 and Hancock Bank of Alabama since 2007; Partner and
Director, Watkins, Ludlam, Winter and Stennis, P.A. from 1995 to 1998.
Term of Office: For a one-year period to expire in 2008.
Age: 45
Don P. Descant
Director of the Company since 2005. President of M.D. Descant Inc. Former President of the Louisiana
Association of General Contractors. Vice Chairman of Bunkie General Hospital and former President of the Bunkie Chamber
of Chamber of Commerce. Director of Hancock Bank of Louisiana since 1995.
Term of Office: If re-elected, for a three-year period to expire in 2010.
Age: 58
James B. Estabrook, Jr.
Director of the Company since 1995. Mr. Estabrook's principal occupation has been as President of Estabrook
Motor Co., Inc. since 1967. Mr. Estabrook also serves in the capacities at the companies indicated: President of Weaver
Motor Co., Inc. (Automobile Dealerships); President of Auto Credit, Inc. (Auto Finance Business); General Partner,
Estabrook Properties, LP (Real Estate Business); Vice President, Falcon Leasing and Rental, Inc., (Daily Rental
Automobile Business) Pascagoula, Mississippi; and an Advisory Director of Hancock Bank since 1985.
Term of Office: If re-elected, for a three-year term to expire in 2010.
Age: 62
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John H. Hairston
Director of the Company since 2006. Named Chief Executive Officer, Hancock Holding Company in 2006; Executive
Vice President and Chief Operations Officer of the Company, Hancock Bank, Gulfport, Mississippi, and Hancock Bank of
Louisiana since 1994; an Advisory Director of Hancock Bank of Florida since 2003. Senior Financial Consulting Manager,
Anderson Consulting (Accenture) from 1987 to 1994.
Term of Office: For a two-year period to expire in 2009.
Age: 43
James H. Horne
Director of the Company since 2000. Mr. Horne is owner of Capital Properties, Inc. and Valuation Specialist,
Inc., specializing in real estate development and appraisal for over 20 years. Mr. Horne is also President of Ocean
Springs Self Storage, Inc., Ocean Springs, Mississippi; President of Gulfport Self Storage, Inc., Gulfport, Mississippi;
President of Grelot Self Storage, Inc., Gautier, Mississippi; Gautier Self Storage, Inc., Gautier, Mississippi; Market
Street Properties (Self Storage business), Biloxi, Mississippi. An Advisory Director of Hancock Bank since 1995.
Term of Office: For a three-year period to expire 2009.
Age: 55
Charles H. Johnson, Sr.
Director of the Company since 1987. Business Manager since 1961 and previous President of Charles H. Johnson,
Inc. (Residential General Contracting Business), Diamondhead, Mississippi; Treasurer since 1965, Universal Warehouse,
Inc., (Mini-Storage Business), Diamondhead, Mississippi. An Advisory Director of Hancock Bank since 1977.
Term of Office: For a three-year period to expire 2008.
Age: 73
John H. Pace
Director of the Company since 2005. Chairman of Hancock Bank of Louisiana since 2005. Retired President of
Interstate Companies of Louisiana, Inc. Chairman of Our Lady of the Lake Regional Hospital Capital Fund. Director of
Hancock Bank of Louisiana since 1990; an Advisory Director of Hancock Bank since 2002.
Term of Office: For a three-year period to expire in 2008.
Age: 76
Robert W. Roseberry
Director of the Company since 2001. President of Northern Division of Hancock Bank, Gulfport, Mississippi,
since 2001. Chairman and Chief Executive Officer of Lamar Capital Corporation from 1998 to 2001. President and Chief
Executive Officer of Lamar Bank from 1986 to 1998. Mr. Roseberry served in various capacities with Lamar Bank from 1971
to 1986. Director of Lamar Bank since 1972.
Term of Office: If re-elected, for a three-year term to expire in 2010.
Age: 56
George A. Schloegel
Director of the Company since 1984. Named Chairman of the Board, Hancock Holding Company in 2006; Vice Chairman
from 1984 to 2006 and Chief Executive Officer from 2000 to 2006; President, Hancock Bank, Gulfport, Mississippi since
1990; Director of Hancock Bank of Louisiana since 1990 and Hancock Bank of Alabama since 2007; an Advisory Director of
Hancock Bank of Florida since 2003. Director of Mississippi Power Company, Gulfport, Mississippi. Mr. Schloegel was
employed part-time with Hancock Bank from 1956-1959 and began full-time employment in 1962. He served in various
capacities until being named President in 1990.
Term of Office: For a three-year term to expire in 2009.
Age: 66
Leo W. Seal, Jr.
Director of the Company since 1984. President, Hancock Bank, Gulfport, Mississippi from 1963 to 1990;
President of Hancock Holding Company since 1984, Chief Executive Officer from 1984 to 2000; an Advisory Director,
Hancock Bank of Louisiana since 1993 and Hancock Bank of Florida since 2003. Hancock Bank employed Mr. Seal in 1947.
He was elected to the Board of Directors of Hancock Bank in 1961 and named President in 1963 and in 1977 he was named
Chief Executive Officer.
Term of Office: If re-elected, for a three-year period to expire in 2010.
Age: 82
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Christine L. Pickering
Director of the Company since 2000. Ms. Pickering is a Certified Public Accountant and owner of Christy
Pickering, CPA since 1991. An Advisory Director of Hancock Bank since 1995.
Term of Office: For a three-year period to expire in 2009.
Age: 46
Anthony J. Topazi
Director of the Company since 2007. Mr. Topazi is President and Chief Executive Officer, Mississippi Power
Company since 2004. Mr. Topazi chairs the Infrastructure Committee of the Governor's Commission on Recovery, Rebuilding,
and Renewal; Momentum Mississippi-- a public-private economic development partnership; and the Gulf Coast Business
Council. Mr. Topazi currently serves on the Mississippi Economic Council board of directors, as vice chair of the
Mississippi Partnership for Economic Development. Mr. Topazi also serves on the boards of directors for the Gulf Coast
Community Foundation and on the Nature Conservancy of Mississippi board of trustees. An Advisory Director of Hancock
Bank since 2004.
Term of Office: If re-elected, for a three-year period to expire in 2010.
Age: 56
George A. Schloegel is a director of Mississippi Power Company, Gulfport, Mississippi. None of the other Directors of the Company are directors of another company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or subject to the reporting requirements of Section 15(d) of the Act, or registered as an investment company under the Investment Company Act of 1940.
A majority of the Company’s directors are independent as defined in NASDAQ Global Listing Standards. No family relationship exists between any directors, executive officers, or persons nominated to become a director of the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors and executive officers, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of Common Stock of the Company. Officers, directors and greater than ten percent stockholders are required to furnish the Company with copies of all Section 16(a) forms they file.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information concerning the number of shares of Common Stock of the Company held as of December 31, 2006 by the only shareholders who are known to management to be the beneficial owners of more than five percent (5%) of the Company’s outstanding shares:
- ----------------------------------------- ------------------------------------------ ------------------------
Name and Address Amount and Nature of Beneficial Percent
of Beneficial Owner Ownership (1) of Common Stock of Class
- ----------------------------------------- ------------------------------------------ ------------------------
Hancock Bank Trust Department 3,838,672.1 (2) 11.75 %
One Hancock Plaza
Gulfport, Mississippi 39501
- ----------------------------------------- ------------------------------------------ ------------------------
Leo W. Seal, Jr. 4,069,358.2 (3) 12.46 %
408 North Beach Blvd.
Bay St. Louis, Mississippi 39520
- ----------------------------------------- ------------------------------------------ ------------------------
______________________
(1) Constitutes sole ownership unless otherwise indicated.
(2) Consists of shares held and voted by the Hancock Bank Trust Department as trustee for 65 different accounts.
Within these 65 accounts, the Trust Department has sole voting rights on 3,838,672.1 shares. The Trust Department
of the Bank has the sole right to dispose of 3,181,731.7 shares and the shared right to dispose of 304,232.4 shares.
(3) Includes 8,552 shares owned by Mr. Seal's spouse, 360,000 shares held in a marital trust, and 1,304,468 shares
held in fiduciary capacity in the Trust Department of Hancock Bank, as to which Mr. Seal has sole voting and
dispositive rights. Mr. Seal's sister and her children are the beneficiaries of this trust and therefore they have
the right to receive and the power to direct the receipt of dividends from, or the proceeds from the ownership of
these 1,304,468 shares. Mr. Seal disclaims beneficial ownership of these 1,304,468 shares. Also included are 40,644
options and 24,000 restricted stock awards granted to Mr. Seal in the 1996 Long-Term Incentive Plan.
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SECURITY OWNERSHIP OF MANAGEMENT
(As of December 31, 2006)
Name of Beneficial Owner Amount and Percent
Nature of of Class
Beneficial Ownership (1)
of Common Stock
- --------------------------------------- -------------------------------- ---------------------
Directors
Alton G. Bankston 4,112 (2) 0.01%
Frank E. Bertucci 2,690 (3) 0.01%
Joseph F. Boardman, Jr. 32,178 (4) 0.10%
Don P. Descant 4,284 (1) 0.01%
James B. Estabrook, Jr. 10,515 (5) 0.03%
James H. Horne 29,342 (6) 0.09%
Charles H. Johnson, Sr. 23,012 (1) 0.07%
John H. Pace 4,622 (7) 0.01%
Christine L. Pickering 4,129 (8) 0.01%
Robert W. Roseberry 146,224 (9) 0.45%
George A. Schloegel 630,766 (10) 1.93%
Leo W. Seal, Jr. 4,069,358 (11) 12.46%
Anthony J. Topazi 1,048 (12) 0.003%
Executive Officers
Michael M. Achary 24,521 (13) 0.08%
Carl J. Chaney 162,476 (14) 0.50%
Robert E. Easterly 59,066 (15) 0.18%
Edward G. Francis 30,350 (16) 0.09%
John M. Hairston 159,780 (17) 0.49%
Richard T. Hill 85,121 (18) 0.26%
D. Shane Loper 36,302 (19) 0.11%
Joy Lambert Phillips 24,970 (20) 0.08%
Alfred G. Rath 48,277 (21) 0.15%
Clifton J. Saik 75,821 (22) 0.23%
Directors and Executive Officers 5,668,964 (23) 17.35%
__________________________
(1) Constitutes sole ownership unless otherwise indicated.
(2) Includes 306 shares held jointly with Mr. Bankston's spouse; 2,000 shares held in the Company's Dividend
Reinvestment Plan and 856 shares held in the Director's Deferred Compensation Plan.
(3) Includes 2,681 shares held in the Company's Dividend Reinvestment Plan.
(4) Includes 13,200 shares held by Mr. Boardman's spouse.
(5) Includes 5,551 shares held in the Director's Deferred Compensation Plan.
(6) Includes 1,395 shares held by Mr. Horne's spouse in an IRA; 2,442 shares held in an IRA; 395 shares owned
jointly by Mr. Horne and his spouse; 1,375 shares owned by Mr. Horne's children; 4,072 shares held jointly with Mr.
Horne's spouse in the Company's Dividend Reinvestment Plan; 6,616 shares held in the Director's Deferred
Compensation Plan; and 10,179 shares held by Mr. Horne's company.
(7) Includes 2,442 held in the Company's Dividend Reinvestment Plan and 2,331 shares held in the Director's
Deferred Compensation Plan.
(8) Includes 1,055 shares held in an IRA; 321 shares held in the Company's Dividend Reinvestment Plan; 2,533 shares
held in the Director's Deferred Compensation Plan; 89 shares held by Ms. Pickering's spouse in an IRA.
(9) Includes 14,776 shares held by Mr. Roseberry's spouse; 19,313 shares held jointly with Mr. Roseberry's spouse;
18,728 shares held jointly with Mr. Roseberry's children and 2,400 options granted to Mr. Roseberry in the 1996
Long-Term Incentive Plan.
(10) Includes 112,952 shares held jointly by Mr. Schloegel and his spouse; 621 shares owned directly by Mr.
Schloegel's spouse; 2,386 shares held in the Company's Dividend Reinvestment Plan; 11,673 shares held in the
Company's 401(k) plan; 2,938 shares held in an IRA; 179,994 options and 24,000 restricted stock awards granted to
Mr. Schloegel in the 1996 Long-Term Incentive Plan.
(11) Includes 8,552 shares held by Mr. Seal's spouse; 360,000 shares held in marital trust; and 1,304,468 shares
held in fiduciary capacity in the Trust Department of Hancock Bank, as to which Mr. Seal has sole voting and
dispositive rights. Mr. Seal's sister and her children are the beneficiaries of this trust and therefore they have
the right to receive and the power to direct the receipt of dividends from, or the proceeds from the ownership of
these 1,304,468 shares. Mr. Seals disclaims beneficial ownership of these 1,304,468 shares. Also included are
40,644 options and 24,000 restricted stock awards granted to Mr. Seal in the 1996 Long-Term Incentive Plan.
(12) Includes 900 shares held jointly with Mr. Topazi's spouse and 148 shares in the Company's Deferred Compensation
Plan.
(13) Includes 752 shares held jointly with spouse in a brokerage account; 275 shares held in the Company's Dividend
Reinvestment Plan; 2,193 shares held in the Company's 401(k) plan; 12,500 options and 3,800 restricted stock awards.
(14) Includes 16,700 shares held by Mr. Chaney's spouse; 211 shares held jointly by Mr. Chaney and his spouse in the
Company's Dividend Reinvestment Plan; 4,586 shares in the Company's Dividend Reinvestment Plan; 649 shares for the
benefit of Mr. Chaney's children; 107,996 options and 12,000 restricted stock awards granted to Mr. Chaney in the
1996 Long-Term Incentive Plan.
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(15) Includes 92 shares owned by Mr. Easterly's spouse; 389 shares held in the Company's 401(k) plan; 43,000 options
and 4,000 restricted stock awards granted to Mr. Easterly in the 1996 Long-Term Incentive Plan.
(16) Includes 300 shares held by Mr. Francis' spouse in an IRA; 300 shares held in an IRA; 2,340 shares held in the
Company's 401(k) plan; 24,200 options and 3,200 restricted stock awards granted to Mr. Francis in the 1996 Long-Term
Incentive Plan.
(17) Includes 316 shares for the benefit of Mr. Hairston's children; 2,193 shares held in the Company's 401(k) plan;
538 shares held in the Employee Stock Purchase Plan; 961 shares held in the Company's Dividend Reinvestment Plan;
110,960 options and 12,000 restricted stock awards granted to Mr. Hairston in the 1996 Long-Term Incentive Plan.
(18) Includes 5,325 shares held in the Company's 401(k) plan; 3,462 shares held in the Employee Stock Purchase Plan;
178 shares held in the Company's Dividend Reinvestment Plan; 8,000 shares held in an IRA; 58,498 options and 6,000
restricted stock awards granted to Mr. Hill in the 1996 Long-Term Incentive Plan.
(19) Includes 142 shares held by Mr. Loper's spouse; 223 shares held in the Employee Stock Purchase Plan; 1,712
shares held in the Company's Dividend Reinvestment Plan; 31,026 options and 2,400 restricted stock awards granted
to Mr. Loper in the 1996 Long-Term Incentive Plan.
(20) Includes 150 shares held by Ms. Phillip's spouse; 1,688 shares held in the Employee Stock Purchase Plan; 33
shares held in the Company's Dividend Reinvestment Plan; 21,600 options and 900 restricted stock awards granted to
Ms. Phillips in the 1996 Long-Term Incentive Plan.
(21) Includes 4,564 shares held jointly with Mr. Rath's spouse; 628 shares held for the benefit of Mr. Rath's
children; 1,085 shares held in an IRA; 36,900 options and 5,100 restricted stock awards granted to Mr. Rath in the
1996 Long-Term Incentive Plan.
(22) Includes 4,746 shares held in the Company's 401(k) plan; 63 shares held by Mr. Saik's children; 54,750 options
and 6,000 restricted stock awards granted to Mr. Saik in the 1996 Long-Term Incentive Plan.
(23) Includes all shares held as a group by all the Company Directors and Executive Officers, including shares
disclaimed by Mr. Seal as noted in footnote #11 above. This group consists of 23 persons.
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) describes the Company’s compensation philosophy, policies, and practices for 2006 as applicable to the Company’s executives, including the Named Executive Officers (“NEOs”). The CD&A describes the structure and rationale associated with each material element of the NEOs’ total compensation, addresses the reason for employing each compensation element, and explains the relationship between each element; also, the CD&A provides important context for the detailed disclosure tables which specify compensation amounts provided following the CD&A.
COMPENSATION PHILOSOPHY AND OBJECTIVES
The central principle of the Company’s compensation philosophy is that executive compensation should be aligned with shareholder value and determined primarily by overall Company performance. The Board of Directors (the “Board”) and the Executive Management team are charged with the purpose of providing financial services to our communities, facilitating commerce and creating opportunities for people. Hancock has adopted a pay-for-performance compensation philosophy which seeks to serve as a representative model for executive compensation among high-performing banks in the financial services industry. To implement this pay-for-performance approach, the Company ties compensation to include incentives directly to specific performance targets which are defined through the annual budgeting process and approved by the Board and the Compensation Committee (the “Committee”). The Company’s goal is to establish a comprehensive pay-for-performance program to support Hancock’s strategic plan.
The Company’s executive compensation programs are designed to achieve the following primary objectives:
o Drive performance relative to the Company's financial goals, balancing short-term and intermediate operational
objectives with long-term strategic goals;
o Align executives' long-term interests with those of shareholders;
o Attract and retain the highly-qualified executives needed to achieve the Company's goals and to maintain a
stable executive management group;
o Deliver compensation efficiently, providing value to the executive at the least possible cost to the bank;
o Allow flexibility in responding to changing laws, accounting standards, and business needs, as well as the
constraints and dynamic conditions in the Gulf Coast banking market; and
o Place a significant portion of total compensation at risk, contingent on Company performance.
The Company's compensation program is designed to serve as a team-based compensation structure that focuses on consistency of total compensation among the top executive group. The Company strives to achieve a market position for an executive's total compensation at approximately the upper quartile of a peer group of comparably-sized regional financial institutions assuming the Company's performance is performing consistently with that peer group. The Company believes that this positioning is appropriate to attract and retain top-caliber talent in a very competitive national market. The competitive positioning of compensation at the upper quartile of the market is comparable to the expected competitive positioning of the Company's financial performance against high performing financial institutions.
10
The Company desires to create short-term and long-term incentive opportunities for Executive Management. Over the long-term, Hancock seeks to align Executive Management interests with those of the shareholders' by establishing equity ownership opportunities. For members of the Executive Management team, the cash portion of compensation is tied directly to the Company's budgeted net income and average loan and deposit growth as specified in the Key Manager Plan. In addition, the Company uses the following performance objectives to determine compensation levels: Return on Assets, Return on Equity, Net Interest Margin, Efficiency Ratio, After Tax Net Income and Peer Bank comparisons. For performance above target levels, the Company pays compensation above the median level of the market. Consistent with the philosophy of linking compensation to performance, the Company's compensation plans are designed to position total executive compensation at approximately the upper quartile of the peer group when the Company performance achieves its maximum incentive goals. The maximum incentive goals are generally set at levels comparable to the upper quartile of peer financial performance and take into account the Company's strategic goals.
COMPENSATION-RELATED GOVERNANCE AND ROLE OF THE COMPENSATION COMMITTEECommittee Charter and Members
The primary purpose of the Committee is to aid the Board in discharging its responsibilities relating to the compensation of the Company's Chief Executive Officers ("CEOs") and other executive officers of the Company and its subsidiaries having the rank of Executive Vice President or higher and who report directly to the CEOs. The Committee has overall responsibility for evaluating and approving the Company's compensation plans, policies and programs. In performing its oversight role, the Committee considers and discusses the CD&A with executive management and recommends annually to the Board whether the CD&A should be included in its Annual Report on Form 10-K for the current fiscal year. The Compensation Committee Charter, which further outlines the Committee's responsibilities and duties, appears on the Company's website under Investor Relations - Corporate Governance - Committee Charters. The Compensation Committee Charter is available in print upon request from Paul Guichet, Vice President, Corporate Investor Relations. As of December 31, 2006, the members of the Company's Compensation Committee are Frank E. Bertucci (Chair), Joseph F. Boardman, Jr., Charles H. Johnson, Sr., and Don P. Descant, each of whom is "independent" within the meaning of the listing standards of the NASDAQ, is a "non-employee director" within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934 and is an "outside director" within the meaning of Section 162(m) of the Internal Revenue Code of 1986.
Interaction with ConsultantsThe Committee has historically engaged compensation consultants and advisors to provide input on both Board and executive compensation issues. In 2006, the Committee commissioned Clark Consulting to conduct an independent, third-party peer compensation review of eighteen (18) similar banking institutions. Working with both the Committee and the Executive Management team, Clark Consulting identified factors used to establish a peer group of banks for Hancock, such as asset size, asset growth of the institution, geographic footprint, number of branches, similar business organization and financial performance. Clark Consulting studied executive compensation at the eighteen (18) peer banks and provided in-depth written and oral reports to the Committee. Through the peer-review process conducted by Clark Consulting, the Board and management were able to assess executive compensation against banking industry peers.
Role of Executives in Compensation Committee DeliberationsThe Committee frequently requests the CEOs to be present at Committee meetings to discuss executive compensation and evaluate Company and individual performance. In addition, the Committee works closely with the Corporate Human Resources Director who provides administrative support to the Committee as requested. Occasionally, other executives may attend a Committee meeting to provide pertinent financial, tax, accounting, or operational information. Executives in attendance may provide their insights and suggestions, but only independent Committee members may vote on decisions regarding executive compensation.
The Committee discusses the CEOs' compensation and performance conferring with them on substantive matters involving Company performance, preferences as to types of compensation, and the relationship between elements of compensation. However, final deliberations and all votes regarding his compensation are made in executive session, without the CEOs present. The Committee also determines the compensation for the other NEOs, based on the CEOs' input and the evaluation of executive performance.
11
Compensation Committee Activity
In 2006, the Committee met seven (7) times and took the actions listed below. Specific recommendations and compensation changes are discussed elsewhere in the CD&A under "COMPENSATION FRAMEWORK - Pay Components".
o In 2006, Clark Consulting conducted an overall compensation review for each of the five (5) named executive
officers. The study benchmarked each component of the NEOs' current total compensation to determine
competitive position and provided recommendations;
o Clark Consulting also conducted a detailed review of the equity compensation practices in the banking industry
and provided recommendations on the levels and type of equity for use in long-term incentives;
o Reviewed and approved the 2005 Key Manager Plan corporate component funding level;
o Reviewed and approved the 2006 equity grants to executive officers;
o Conducted a Committee training session specifically focused on new Securities and Exchange Commission proxy
pronouncements and trends in executive compensation; and,
o Reviewed and approved a supplemental contribution account feature to the Non-Qualified Deferred Compensation
Plan approved in 2005 for five (5) executive officers.
COMPENSATION FRAMEWORK
The discussion of the Company’s compensation framework in this section of the CD&A describes the following three aspects of our executive compensation policies and programs:
o Pay components - a discussion of each element of total compensation, including the rationale for each and how
each component relates to the total compensation structure.
o Pay level - the factors used to determine the compensation opportunity, or potential payment amount at
different performance levels, for each pay component.
o Relationship to performance - how the Company determines appropriate performance measures and goals for
incentive plan purposes, as well as how pay levels change as a function of performance.
Pay Components — Overview
The Company’s executive compensation program includes the components listed below.
o Salary - fixed base pay that reflects each executive's position, individual performance, experience, and
expertise.
o Annual Cash Incentive - pay that varies based on performance against annual business objectives; the Company
communicates the associated performance metrics, goals, and award opportunities (expressed as a percentage of
salary) to the executives at the beginning of the year.
o Long-Term Incentives - equity-based awards (stock options and restricted stock) with values driven by
individual and company performance.
o Supplemental Executive Retirement Plan ("SERP"), a component of the Non-Qualified Deferred Compensation Plan -
which may include Company contributions that are based on annual individual and Company performance. Inclusion
in and contributions to the SERP program is determined by the Committee.
o Other Compensation - perquisites consistent with industry practices in comparable banks, as well as broad-based
employee benefits such as medical, dental, disability, and life insurance coverage.
Salary
The Company pays its executives cash salaries intended to be competitive and take into account the individual’s experience, performance, responsibilities, and past and potential contribution to the Company. The Committee annually reviews the salary of the CEOs. In addition, salaries paid to executive officers are reviewed annually by the CEOs and the Corporate Human Resources Director based upon subjective assessment of the nature of the position, the contributions, experience and Company tenure of the executive officer. The CEOs recommend base salary adjustments for all executive officers to the Committee. For the year ended December 31, 2006, the following base salaries were paid:
12
George A. Schloegel $481,140
Carl J. Chaney $280,500
John M. Hairston $280,500
Clifton J. Saik $249,001
Alfred G. Rath $200,000
Richard T. Hill $200,000
On January 16, 2007, the Committee approved the compensation for all executive officers for 2007, effective January 1, 2007. Based on recommendations from the Committee, the Board approved the following salaries:
George A. Schloegel $300,000
Carl J. Chaney $340,500
John M. Hairston $340,500
Clifton J. Saik $254,000
Alfred G. Rath $220,000
Richard T. Hill $220,000
Annual Cash Incentive
The Company uses annual incentives to focus attention on current strategic priorities and drive achievement of short-term corporate objectives. The 2006 Key Manager Plan is designed to focus executive officers towards improving three principle areas of performance: corporate, unit, and individual. To accomplish the focus, each of the three components is independently funded. The corporate component uses three key performance measurement areas: net earnings growth, average annual deposit growth, and average annual loan growth. The corporate component is weighted based on the level of corporate responsibility and impact each executive’s position carries. The performance goals for the 2006 Key Manager Plan corporate component were: 60% on Net Earnings of $81,049,000, 20% on Average Annual Deposits of $5,036,661, and 20% on Average Annual Loans of $3,232,281. The unit component is determined by the CEOs and each management sponsor. Each unit goal has a grading matrix established before the goals are communicated to the unit. For 2007, the Committee has established both corporate and individual goals for the executives. For the year ended December 31, 2006 the following cash bonuses were awarded:
George A. Schloegel $290,123
Carl J. Chaney $133,964
John M. Hairston $133,964
Clifton J. Saik $101,274
Alfred G. Rath $83,790
Richard T. Hill $79,400
Long-Term Incentives (“LTI”)
The Company believes that equity ownership by Executive Management and Directors aligns executive and director interests with those of the shareholders. The Company uses stock options and restricted stock grants as the primary vehicle for long-term incentive compensation for both management and the Board. In March 2005, the shareholders of the Company approved Hancock Holding Company’s 2005 Long-Term Incentive Plan (“The Plan”). The Plan is designed to enable employees and directors to obtain a proprietary interest in the Company and to attract and retain outstanding associates. The Plan provides for awards up to an aggregate of five million (5,000,000) shares of the Company’s common stock which may be granted during the term of the Plan. The Plan limits the number of shares for which awards may be granted during any calendar year (the “Plan Year”) to two percent (2%) of the outstanding Company’s common stock as reported in the Company’s Annual Report on Form 10-K for the fiscal year ending immediately prior to that Plan Year. In 2006, awards of both stock options and restricted stock were granted to each of the NEOs. Vesting of these awards occurs ratable over a five-year period following the date of the award. The amount and form of each of these awards is stated below:
Option Non-Qualified
Named Executive Officer Awards Option Awards Stock Awards
- ------------------------------ ---------- ----------------- -------------
George A. Schloegel 12,550 12,449 6,000
Carl J. Chaney 12,550 5,450 3,000
John M. Hairston 12,550 5,450 3,000
Clifton J. Saik 9,000 - 1,500
Alfred G. Rath 9,000 - 1,500
Richard T. Hill 9,000 - 1,500
13
Non-Qualified Deferred Compensation Plan
In November 2006, the Company adopted a non-qualified deferred compensation plan supplemental contribution account for certain NEOs. The supplemental contribution account was implemented to provide the executive officer an incentive to continue working during the most productive years of their career, provide the Company with a tool to retain key executive talent, and replace benefits lost by compensation caps under the Company’s qualified benefits plans. Upon implementation of the supplemental contribution account, the Committee approved the creation and the initial year funding of accounts for Carl J. Chaney, John M. Hairston, Clifton J. Saik, Alfred G. Rath, and Richard T. Hill. The nonqualified deferred compensation plan’s supplemental contributions, when combined with these other retirement income sources, are designed to target a percentage of final compensation each year following retirement.
Each contribution to the supplemental contribution account is subject to annual approval by the Committee. Supplemental contributions under the plan are based on the annual amount needed to accumulate a balance sufficient to produce a target retirement benefit beginning at age 65 retirement and continuing through the first fifteen post-employment years. The annual target benefit for each participant is 55% of final average compensation at age 65 retirement. The target benefit is achieved through contributions to the supplemental contribution account, projected annual benefit from the tax-qualified Hancock Bank Pension Plan, and the projected value of the company match made to the Hancock Bank 401(k) Savings and Investment Plan, if paid out over a fifteen (15) year period. “Final average compensation” is the estimated average of base salary and annual incentive bonus for the three (3) final consecutive years of employment with the Company, assuming an increase in compensation of 5% per year. While the contributions will be credited over a ten (10) year period upon approval by the Board, vesting of the contributions will not begin until age 50 and will fully vest at age 65.
Employment Contracts and Change-in-Control Agreements
The Company does not have employment contracts with the NEOs. Each of the NEOs, however, has a Change-in-Control agreement that, among other things, assures the individual’s employment for at least three years (or, in certain instances, severance payments) in the event of a change of control of the Company. If the executive is terminated by the Company after the change of control except for cause or as a result of the executive’s disability, then the executive is entitled to a severance payment equal to a percentage of base salary and bonus, which percentage varies depending on the executive’s agreement with the Company from 99% to 199%. The executive is also entitled to a severance payment if the executive resigns because of a material change in duties or relocation as the result of the change of control of the Company.
Other Compensation
The NEOs participate in the Company’s broad-based employee benefit plans, such as medical, dental, supplemental disability, and term life insurance programs. All of the NEOs are provided with a company-owned vehicle. The vehicle is provided primarily for their business travel that is targeted to meet or exceed 20,000 miles per year. The NEOs are also allowed to operate the vehicle for personal use upon which they are taxed through the Company’s payroll process. Due to limits on the current broad-based long-term disability policy, the Company provides each NEO with additional long-term disability insurance. All of the NEOs have accepted this benefit except for Clifton J. Saik. Mr. Saik elected to defer the benefit and retain his own additional long-term disability insurance. The long-term disability benefit covers monthly amounts up to $7,500 in excess of $10,000. The long-term disability plan also provides a $2,000 monthly benefit for the NEOs spouse.
Summary of Pay Components
The Company uses the above pay components to balance various objectives. The Company desires to balance short-term, intermediate-term, and long-term objectives, so annual incentives are combined with long-term incentives. To attract executives, maintain a stable team of effective leaders, and provide non-competition and other protections for the Company, the compensation framework is considering additional components such as Change-in-Control agreements and SERPs. The compensation framework balances the executives’ need for current cash, security, and funds to cover taxes on long-term incentives (through vehicles such as salary and annual incentives) with the need for alignment of executives’ long-term interests with those of shareholders (through vehicles such as equity grants). The components provide some degree of security at the base, threshold level of compensation, while motivating executives to focus on the strategic goals that will produce both outstanding Company financial performance and long-term wealth creation for the executives.
14
Pay Level and Benchmarking
Pay levels for executives are determined based on a number of factors, including the desire to maintain a team-based management culture, individual’s roles and responsibilities within the Company, the individual’s experience and expertise, the pay levels for peers within the Company, pay levels in the marketplace for similar positions and performance of the individual and the Company as a whole. The Committee is responsible for approving pay levels for the executive officers. In determining these pay levels, the Committee considers all forms of compensation and benefits, using tools such as wealth creation tally sheets to review the total value delivered through all elements of pay and the potential future value of the Committee’s current compensation decisions.
As noted earlier, the Company’s compensation structure is designed to position an executive’s total compensation at approximately the upper quartile of a peer group of comparable, high performing financial institutions, assuming the Company’s performance is at expected, target levels. In 2006, the Committee worked with Clark Consulting to review total compensation levels for the NEOs and several other senior executives. Total compensation consists of salary, cash compensation (salary and annual cash incentives), direct compensation (cash compensation and all forms of equity compensation), and total compensation (direct compensation and all other forms of compensation, such as SERP accruals).
The primary data source used in setting competitive market levels for the executive officers is the information publicly disclosed by a peer group (the “2006 Peer Group”) of the eighteen (18) companies listed below. This peer group is reviewed annually and may change from year-to-year. These companies, which have been carefully considered by the Committee for inclusion in the 2006 Peer Group, include banks of similar asset size and business strategy.
- ------------------------------------------------------------------------------------------------------
2006 PEER GROUP
- ------------------------------------------------------------------------------------------------------
Company Name, Company Name,
Headquarters' State, (Ticker) Headquarters' State, (Ticker)
- -------------------------------------------------- ------------------------------------------------
BancorpSouth, Inc., MS (BXS) Alabama National BanCorp., AL (ALAB)
Cullen/Frost Bankers, Inc., TX (CFR) United Community Banks, Inc., GA (UCBI)
BankUnited Financial Corp., FL (BKUNA) Park National Corp., OH (PRK)
FirstMerit Corp., OH (FMER) AMCORE Financial, Inc., IL (AMFI)
Whitney Holding Corp., LA (WTNY) WesBanco, Inc., WV (WSBC)
Trustmark Corp., MS (TRMK) Sterling Bancshares, Inc., TX (SBIB)
First Midwest Bancorp, Inc., IL (FMBI) Prosperity Bancshares, Inc., TX (PRSP)
United Bancshares, Inc., WV (UBSI) IBERIABANK Corp., LA (IBKC)
BankAtlantic Bancorp, Inc., FL (BBX) Capital City Bank Group, Inc., FL (CCBG)
- -------------------------------------------------- ------------------------------------------------
After consideration of the data collected on external competitive levels of compensation and internal relationships within the executive group, the Committee makes decisions regarding individual executives’ target total compensation opportunities based on the need to attract, motivate and retain an experienced and effective management team.
As noted above, notwithstanding the Company’s overall pay positioning objectives, pay opportunities for specific individuals vary based on a number of factors such as scope of duties, tenure, institutional knowledge and/or difficulty in recruiting a new executive. Actual total compensation in a given year will vary above or below the target compensation levels based primarily on the attainment of operating goals and the creation of shareholder value.
Tax and Accounting Considerations
The Company takes into account tax and accounting implications in the design of its compensation programs. For example, in the selection of long-term incentive instruments, the Committee reviews the projected expense amounts and expense timing associated with alternative types of awards. Under current accounting rules (i.e., Statement of Financial Accounting Standards No. 123(R)), the Company must expense the grant-date fair value of share-based grants such as restricted stock, performance shares, and stock appreciation rights settled in stock. The grant-date value is amortized and expensed over the service period or vesting period of the grant. In contrast, awards that are not share-based (e.g., phantom stock) are expensed based on a value that may fluctuate widely over the vesting period and is not fixed at grant date. In selecting appropriate incentive devices, the Committee reviews appropriate expense analyses and considers the related tax and accounting issues.
15
Section 162(m) of the Internal Revenue Code of 1986 (as amended) generally limits the corporate tax deduction for compensation in excess of $1.0 million that is paid to a NEO, unless certain performance-based conditions are met. In establishing and administering the Company’s compensation programs, the Committee complies with the requirements of Section 162(m), although the Company retains the flexibility to pay compensation that is not eligible for such treatment under Section 162(m) if it is in the best interest of the Company to do so.
CONCLUSION
The Committee takes a best-practices approach to establishing and administering NEOs’ compensation. Each component of compensation is developed using a defined methodology. The methodology has ensured that the NEOs’ compensation is competitive with other high-performing banks and is tightly aligned with the Company’s short and long-term financial performance. Through the use of external compensation consultants and internal compensation expertise, the Committee has designed and approved a compensation program that achieves all of the Committee’s goals and objectives.
In performing its oversight role, the Compensation Committee has considered and discussed the Compensation Discussion and Analysis (CD&A) with executive management. On February 14, 2007, the Compensation Committee recommended to the Board of Directors that the 2006 CD&A be included in its Annual Report on Form 10-K for such fiscal year.
Respectfully submitted by the members of the Compensation Committee of the Board of Directors:
Frank E. Bertucci (Chairperson)
Joseph F. Boardman, Jr.
Charles H. Johnson, Sr.
Don P. Descant
16
Hancock Holding Company
Summary Compensation Table (SCT)
For the Year Ended December 31, 2006
Change in
Pension
Value and
Non-
Qualified
Non- Deferred
Equity Compen- All
Stock Option Plan sation Other
Awards Awards Compen- Earnings Comp.
Name and Principal Position Year Salary Bonus (1) (2) sation (4) (5) Total
- ------------------------------------- ------ -------- ------- ----------- ----------- -------- ---------- --------- ----------
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
- ------------------------------------- ------ -------- ------- ----------- ----------- -------- ---------- --------- ----------
George A. Schloegel, Chairman of 2006 $481,140 $50,000 $336,852(3) $426,855(3) $290,123 $59,713 $126,494 $1,771,177
the Board
Carl J. Chaney, CEO and CFO 2006 280,500 - 70,843 56,347 133,964 9,437 123,676 674,767
John M. Hairston, CEO and COO 2006 280,500 - 70,843 56,347 133,964 10,451 110,952 663,057
Clifton J. Saik, Senior Trust Officer 2006 249,001 - 35,421 28,174 101,274 16,646 133,791 564,307
Alfred G. Rath, Chief Credit Officer 2006 200,000 - 31,396 28,174 83,790 120,660 40,534 504,554
Richard T. Hill, Senior Retail
Officer 2006 200,000 - 35,421 28,174 79,400 13,380 85,159 441,534
- ------------------------------
(1) The Company granted restricted stock on January 18, 2006. The shares were granted on a discretionary basis and are subject
to five-year service vesting. The shares were granted at a price of $39.83. Awards for the six executives were: Mr.
Schloegel 6,000; Mr. Chaney 3,000; Mr. Hairston 3,000; Mr. Saik 1,500; Mr. Rath 1,500 and Mr. Hill 1,500. A portion of the
amounts shown represent grants of prior years expensed in 2006 as follows: 2003 grants $69,763; 2004 grants $92,302; and 2005
grants $103,059.
(2) The Company granted incentive and non-qualified stock options on January 18, 2006. The stock options were granted on a
discretionary basis in fiscal year 2006 and are subject to five-year service vesting. The January 18, 2006 stock options were
granted at an exercise price of $39.83. The values in the table represent a grant date fair value computed in accordance with
FAS 123R. The following inputs are used in the Black-Scholes methodology: expected volatility 29.87%, risk-free interest
rate 4.30%, expected life eight years and expected divided yield 1.61%. The resulting Black-Scholes grant value is $17.07
per share. Awards for the six executives were: Mr. Schloegel 12,550 shares (ISO) and 12,449 shares (NQO); Mr. Chaney 12,550
shares (ISO) and 5,450 shares (NQO); Mr. Hairston 12,550 shares (ISO) and 5,450 shares (NQO); Mr. Saik 9,000 shares (ISO);
Mr. Rath 9,000 shares (ISO) and Mr. Hill 9,000 shares (ISO).
(3) Mr. Schloegel is eligible for retirement therefore amounts for Stock Awards and Option Awards represent total expense for
award.
(4) Based on SFAS No. 87 assumptions used for disclosure as of 9/30/2006 and 9/30/2005. All amounts represent the change in
pension value except for Mr. Schloegel's amounts. Mr. Schloegel's amounts are $152,940 for change in pension value and
($93,227) for change in non-qualified deferred compensation earnings.
(5) See next table for disclosure of All Other Compensation.
17
Hancock Holding Company
SCT (continued)
Footnote (5) - All Other Compensation
For the Year Ended December 31, 2006
Supple-
mental
Long-
Term Non- Group- Addi-
Supplemental Disa- Qualified Term tional Total
Retirement Tax bility Deferred Life Compen- Other
Auto Payment Gross-up 401(k) Insur- Compen- Insur- sation Compen-
Name Allowance (1) (2) Match ance sation ance (3) sation
- ------------------------------------- --------- ---------- --------- ------- ------- -------- -------- ------- ---------
George A. Schloegel, Chairman of the $4,013 $63,500 $43,524 $7,355 $3,782 $ - $4,220 $100 $126,494
Board
Carl J. Chaney, CEO and CFO 4,451 - - 7,500 2,582 108,932 211 - 123,676
John M. Hairston, CEO and COO 3,766 - - 7,500 2,324 97,063 299 - 110,952
Clifton J. Saik, Senior Trust Officer 4,214 - - 6,843 - 119,549 410 2,775 133,791
Alfred G. Rath, Chief Credit Officer 2,734 - - 5,461 3,918 26,582 1,689 150 40,534
Richard T. Hill, Senior Retail Officer 316 - - 5,551 3,262 75,798 232 - 85,159
- ---------------------------
(1) Represents payment under new agreement to replace the split dollar agreement that terminated in 2004.
(2) Represents tax gross-up payment under new agreement to replace the split dollar agreement that terminated in 2004.
(3) Represents reimbursement of club dues for Mr. Schloegel and Mr. Saik, and other compensation for Mr. Rath.
Hancock Holding Company
Grants of Plan-Based Awards
For the Year Ended December 31, 2006
All
Other
Stock
Awards:
Estimated Future Number All Other Grant
Estimated Future Payouts Payouts Under Equity of Option Exercise Date
Under Non-Equity Incentive Incentive Plan Awards Shares Awards: or Base Fair
Plan Awards (1) of Number of Price Value of
------------------------------ ------------------------ Stock Securities of Stock
Thres- Max- or Underlying Option and
Grant hold Target imum Units Options Awards Option
Name Date Threshold Target Maximum (#) (#) (#) (#) (#) (2) ($/Sh) Awards
- ---------------------- ------- --------- ---------- ---------- -------- -------- ------ --------- ------------ --------- ----------
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l)
- ---------------------- ------- --------- ---------- ---------- -------- -------- ------ --------- ------------ --------- ----------
George A. Schloegel, 1/18/2006 $86,605 $288,684 $339,204 - - - 6,000 24,999 $39.83 $665,713
Chairman of the Board
Carl J. Chaney, CEO 1/18/2006 40,392 134,640 158,202 - - - 3,000 18,000 39.83 426,750
and CFO
John M. Hairston, 1/18/2006 40,392 134,640 158,202 - - - 3,000 18,000 39.83 426,750
CEO and COO
Clifton J. Saik, 1/18/2006 62,748 104,580 115,038 - - - 1,500 9,000 39.83 213,375
Senior Trust Officer
Alfred G. Rath, 1/18/2006 42,000 84,000 94,500 - - - 1,500 9,000 39.83 213,375
Chief Credit Officer
Richard T. Hill, 1/18/2006 50,400 84,000 92,400 - - - 1,500 9,000 39.83 213,375
Senior Retail Officer
- -------------------------------
(1) The Company's equity plan does not issue equity grants based on specific performance metrics. Annually the CEOs
make recommendations to the Compensation Committee on the award for each
NEO. The recommendation is based on the NEO's contribution and performance during the year. The awards are
approved by the Compensation Committee.
(2) Awards for the six executives were: Mr. Schloegel 12,550 shares (ISO) and 12,449 shares (NQO); Mr. Chaney 12,550
shares (ISO) and 5,450 shares (NQO); Mr. Hairston 12,550 shares (ISO) and 5,450 shares
(NQO); Mr. Saik 9,000 shares (ISO); Mr. Rath 9,000 shares (ISO) and Mr. Hill 9,000 shares (ISO).
18
Hancock Holding Company
Outstanding Equity Awards at Fiscal Year-End
As of December 31, 2006
Options Awards Stock Awards
--------------------------------------------------------- --------------------------------------------------
Equity Equity
Incentive Incentive
Plan Plan
Awards: Awards:
Market Number Market
Number Value of or
Equity of of Unearned Payout
Incentive Shares Shares Shares, Value of
Plan or or Units Unearned
Awards Units Units or Shares,
Number of Number of of of Other Units or
Securities Number of Securities Stock Stock Rights Other
Underlying Securities Underlying That That That Rights
Unexercised Underlying Unexercised Options Have Have Have That
Options Unexercised Unearned Exercise Option Not Not Not Have Not
Name (#) Options (#) Options Price Expiration Vested Vested Vested Vested Vesting
Exercisable Unexercisable (#) ($) Date (#) ($) (#) ($) Date
- ------------------- ----------- ------------- ----------- --------- ---------- ------- -------- --------- ---------- ----------
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k)
- ------------------- ----------- ------------- ----------- --------- ---------- ------- -------- --------- ---------- ----------
George A.Schloegel, - 12,550 - $39.83 1/18/2016 - $ - - $- 1/18/2011 (1)
Chairman of the
Board
" - 12,449 - 39.83 1/18/2016 - - - - 1/18/2011 (1)
" - - - - - 6,000 317,040 - - 1/18/2011
" 3,205 - - 31.20 1/13/2015 - - - - 12/21/2005
" 21,794 - - 31.20 1/13/2015 - - - - 12/21/2005
" - - - - - 6,000 317,040 - - 2/21/2010
" 3,574 - - 27.97 1/8/2014 - - - - 12/21/2005
" 16,426 - - 27.97 1/8/2014 - - - - 12/21/2005
" - - - - - 6,000 317,040 - - 1/8/2009
" 4,472 - - 22.36 1/6/2013 - - - - 12/21/2005
" 15,528 - - 22.36 1/6/2013 - - - - 12/21/2005
" - - - - - 6,000 317,040 - - 1/6/2008
" 6,896 - - 14.50 1/9/2012 - - - - 1/9/2006
" 23,102 - - 14.50 1/9/2012 - - - - 1/9/2006
" 8,570 - - 11.67 12/14/2010 - - - - 12/14/2004
" 21,428 - - 11.67 12/14/2010 - - - - 12/14/2004
" 7,842 - - 12.75 12/21/2009 - - - - 12/21/2003
" 22,158 - - 12.75 12/21/2009 - - - - 12/21/2003
Carl J. Chaney, - 5,450 - 39.83 1/18/2016 - - - - 1/18/2011 (1)
CEO and CFO
" - 12,550 - 39.83 1/18/2016 - - - - 1/18/2011 (1)
" - - - - - 3,000 158,520 - - 1/18/2011
" 3,205 - - 31.20 1/13/2015 - - - - 12/21/2005
" 14,795 - - 31.20 1/13/2015 - - - - 12/21/2005
" - - - - - 3,000 158,520 - - 2/21/2010
19
Hancock Holding Company
Outstanding Equity Awards at Fiscal Year-End
As of December 31, 2006
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k)
- ----------------- -------- --------- ---------- ----------- ----------- -------- ---------- -------- -------- ------------
Carl J. Chaney, 3,574 - - $27.97 1/8/2014 - $ - - $ - 12/21/2005
CEO and CFO
" 14,426 - - 27.97 1/8/2014 - - - - 12/21/2005
" - - - - - 3,000 158,520 - - 1/8/2009
" 4,472 - - 22.36 1/6/2013 - - - - 12/21/2005
" 13,528 - - 22.36 1/6/2013 - - - - 12/21/2005
" - - - - - 3,000 158,520 - - 1/6/2008
" 6,896 - - 14.50 1/9/2012 - - - - 1/9/2006
" 5,102 - - 14.50 1/9/2012 - - - - 1/9/2006
" 8,570 - - 11.67 12/14/2010 - - - - 12/14/2004
" 3,428 - - 11.67 12/14/2010 - - - - 12/14/2004
" 7,842 - - 12.75 12/21/2009 - - - - 12/21/2003
" 4,158 - - 12.75 12/21/2009 - - - - 12/21/2003
John M. Hairston, - 5,450 - 39.83 1/18/2016 - - - - 1/18/2011 (1)
CEO and COO
" - 12,550 - 39.83 1/18/2016 - - - - 1/18/2011 (1)
" - - - - - 3,000 158,520 - - 1/18/2011
" 3,205 - - 31.20 1/13/2015 - - - - 12/21/2005
" 14,795 - - 31.20 1/13/2015 - - - - 12/21/2005
" - - - - - 3,000 158,520 - - 2/21/2010
" 3,574 - - 27.97 1/8/2014 - - - - 12/21/2005
" 14,426 - - 27.97 1/8/2014 - - - - 12/21/2005
" - - - - - 3,000 158,520 - - 1/8/2009
" 4,472 - - 22.36 1/6/2013 - - - - 12/21/2005
" 13,528 - - 22.36 1/6/2013 - - - - 12/21/2005
" - - - - - 3,000 158,520 - - 1/6/2008
" 6,896 - - 14.50 1/9/2012 - - - - 1/9/2006
" 5,102 - - 14.50 1/9/2012 - - - - 1/9/2006
" 8,570 - - 11.67 12/14/2010 - - - - 12/14/2004
" 3,428 - - 11.67 12/14/2010 - - - - 12/14/2004
" 7,842 - - 12.75 12/21/2009 - - - - 12/21/2003
20
Hancock Holding Company
Outstanding Equity Awards at Fiscal Year-End
As of December 31, 2006
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k)
- ----------------- -------- --------- ---------- ----------- ----------- -------- ---------- -------- -------- ------------
John M. Hairston 4,158 - - $12.75 12/21/2009 - $ - - $ - 12/21/2003
CEO and COO
" 2,964 - - 14.50 12/24/2008 - - - - 12/24/2002
Clifton J. Saik, - 9,000 - 39.83 1/18/2016 - - - - 1/18/2011 (1)
Senior Trust
Officer
" - - - - - 1,500 79,260 - - 1/18/2011
" 3,205 - - 31.20 1/13/2015 - - - - 12/21/2005
" 5,795 - - 31.20 1/13/2015 - - - - 12/21/2005
" - - - - - 1,500 79,260 - - 2/21/2010
" 3,574 - - 27.97 1/8/2014 - - - - 12/21/2005
" 5,426 - - 27.97 1/8/2014 - - - - 12/21/2005
" - - - - - 1,500 79,260 - - 1/8/2009
" 4,472 - - 22.36 1/6/2013 - - - - 12/21/2005
" 4,528 - - 22.36 1/6/2013 - - - - 12/21/2005
" - - - - - 1,500 79,260 - - 1/6/2008
" 6,000 - - 14.50 1/9/2012 - - - - 1/9/2006
" 6,000 - - 11.67 12/14/2010 - - - - 12/14/2004
" 4,500 - - 12.75 12/21/2009 - - - - 12/21/2003
" 2,250 - - 14.50 12/24/2008 - - - - 12/24/2002
Alfred G. Rath, - 9,000 - 39.83 1/18/2016 - - - - 1/18/2011 (1)
Chief Credit
Officer
" - - - - - 1,500 79,260 - - 1/18/2011
" 3,205 - - 31.20 1/13/2015 - - - - 12/21/2005
" 5,795 - - 31.20 1/13/2015 - - - - 12/21/2005
" - - - - - 1,500 79,260 - - 2/21/2010
" 3,574 - - 27.97 1/8/2014 - - - - 12/21/2005
" 5,426 - - 27.97 1/8/2014 - - - - 12/21/2005
" - - - - - 1,500 79,260 - - 1/8/2009
" 4,472 - - 22.36 1/6/2013 - - - - 12/21/2005
" 28 - - 22.36 1/6/2013 - - - - 12/21/2005
" - - - - - 600 31,704 - - 1/6/2008
" 2,400 - - 14.50 1/9/2012 - - - - 1/9/2006
21
Hancock Holding Company
Outstanding Equity Awards at Fiscal Year-End
As of December 31, 2006
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k)
- ----------------- -------- --------- ---------- ----------- ----------- -------- ---------- -------- -------- ------------
Alfred G. Rath, 1,500 - - $11.67 12/14/2010 - $ - - $ - 12/14/2004
Chief Credit
Officer
" 1,500 - - 12.75 12/21/2009 - - - - 12/21/2003
Richard T. Hill, - 9,000 - 39.83 1/18/2016 - - - - 1/18/2011 (1)
Senior Retail
Officer
" - - - - - 1,500 79,260 - - 1/18/2011
" 3,205 - - 31.20 1/13/2015 - - - - 12/21/2005
" 5,795 - - 31.20 1/13/2015 - - - - 12/21/2005
" - - - - - 1,500 79,260 - - 2/21/2010
" 3,574 - - 27.97 1/8/2014 - - - - 12/21/2005
" 5,426 - - 27.97 1/8/2014 - - - - 12/21/2005
" - - - - - 1,500 79,260 - - 1/8/2009
" 4,472 - - 22.36 1/6/2013 - - - - 12/21/2005
" 4,528 - - 22.36 1/6/2013 - - - - 12/21/2005
" - - - - - 1,500 79,260 - - 1/6/2008
" 6,896 - - 14.50 1/9/2012 - - - - 1/9/2006
" 602 - - 14.50 1/9/2012 - - - - 1/9/2006
" 7,500 - - 11.67 12/14/2010 - - - - 12/14/2004
" 7,500 - - 12.75 12/21/2009 - - - - 12/21/2003
- ----------------------------
(1) 20% vesting per year for five (5) years.
22
Hancock Holding Company
Option Exercises and Stock Vested
For the Year Ended December 31, 2006
Option Awards Stock Awards
---------------------------------------- -------------------------------------
Number of Shares
Number of Shares Value Realized Acquired on Value Realized
Acquired on Exercise upon Exercise Vesting on Vesting
Name (#) ($) (#) ($)
- --------------------------------------------- ----------------------- --------------- ------------------ -----------------
(a) (b) (c) (d) (e)
- --------------------------------------------- ----------------------- --------------- ------------------ -----------------
George A. Schloegel, Chairman of the Board 21,000 $731,640 - $ -
Carl J. Chaney, CEO and CFO - - - -
John M. Hairston, CEO and COO 6,036 219,527 - -
Clifton J. Saik, Senior Trust Officer - - - -
Alfred G. Rath, Chief Credit Officer 1,500 56,625 - -
Richard T. Hill, Senior Retail Officer - - - -
Hancock Holding Company
Pension Benefits Table
For the Year Ended December 31, 2006
Present Value of Payments During
Number of Years Accumulated Last Fiscal
Credited Benefit Year
Name Plan Name Service (#) ($) ($)
- -------------------------------------------- ---------------------------- ---------------- ----------------- ---------------
(a) (b) (c) (d) (e)
- -------------------------------------------- ---------------------------- ---------------- ----------------- ---------------
George A. Schloegel, Chairman of the Board Hancock Bank Pension Plan 44 $1,754,904 (1) $ -
" Supplemental Retirement 44 1,086,108 (2) -
Plans #1
" Supplemental Retirement 44 1,422,802 (2) -
Plans #2
" Supplemental Retirement 44 354,837 (2) 107,024 (3)
Plans #3
Carl J. Chaney, CEO and CFO Hancock Bank Pension Plan 8 63,506 (1) -
John M. Hairston, CEO and COO Hancock Bank Pension Plan 12 88,377 (1) -
Clifton J. Saik, Senior Trust Officer Hancock Bank Pension Plan 8 111,725 (1) -
Alfred G. Rath, Chief Credit Officer Hancock Bank Pension Plan 38 663,589 (1) -
Richard T. Hill, Senior Retail Officer Hancock Bank Pension Plan 8 71,863 (1) -
- ------------------------------
(1) The Present Value of the Accumulated Benefit Obligation is determined using 5.75% per annum and the 1981 Group
Annuity Mortality Table and assumes the benefit will be paid in the normal form on the later of age 65 and
the valuation date.
(2) The Present Value of the Accumulated Benefit Obligation is determined using 5.75% per annum and assumes the
benefit will be paid in the normal form on the later of age 65 and the valuation date.
(3) Represents payment and tax gross-up under new agreement to replace the split dollar agreement that terminated
in 2004.
23
Hancock Holding Company
Non-Qualified Deferred Compensation Table
For the Year Ended December 31, 2006
Executive Aggregate
Contributions Registrant Aggregate Aggregate Balance at
in Last Contributions in Earnings in Last Withdrawals/ Last Fiscal
Fiscal Year Last Fiscal Year Fiscal Year Distributions Year
Name ($) (1) ($) (2) ($) (3) ($) (4) ($)
- ------------------------------------------ ------------- ------------------ ----------------- ---------------- ------------
(a) (b) (c) (d) (e) (f)
- ------------------------------------------ ------------- ------------------ ----------------- ---------------- ------------
George A. Schloegel, Chairman of the Board $50,000 $ - $23,006 $ - $248,645
Carl J. Chaney, CEO and CFO 26,546 108,932 6,064 - 164,502
John M. Hairston, CEO and COO 22,339 97,063 11,325 - 212,284
Clifton J. Saik, Senior Trust Officer 21,765 119,549 5,032 - 163,058
Alfred G. Rath, Chief Credit Officer 13,159 26,582 899 - 44,186
Richard T. Hill, Senior Retail Officer 4,000 75,798 8,763 - 136,505
- -----------------------------
(1) Executives may elect a maximum deferral of 80% of base salary, 100% of annual incentive bonus, and 100% of
performance stock and restricted stock. The minimum deferral for base salary and annual incentive bonus is a $3,000
aggregate. There is no minimum deferral for performance stock and restricted stock.
(2) The plan allows for supplemental contributions to be made to participants at the discretion of the committee. The
factors taken into consideration for these contributions are current total compensation and a reasonable estimate of
final pay at retirement, years of service while eligible for supplemental contributions, remaining with the company
until age 65, a reasonable estimate of growth in the value of the supplemental contribution account investments over
the years prior to retirement, and the growth of the supplemental contribution account based on actual investment
opportunities deemed to be credited to the supplemental contribution account.
(3) Executives elect investment options from a group of measurement funds available in the plan. Allocations and
reallocations can be made on a daily basis subject to certain limitations. The accounts are adjusted on a daily basis
based on the performance of each measurement fund selected.
(4) Payments from the plan begin upon the earlier of retirement, termination of employment, disability, death, or in
the event of a scheduled distribution.
24
Hancock Holding Company
Director Compensation Table
For the Year Ended December 31, 2006
Fees Non-Equity Change in Pension
Earned Incentive Value and
or Paid Stock Option Plan Nonqualified Deferred All Other
in Cash Awards Awards Compensation Compensation Earnings Compensation Total
Name ($) (1) ($) ($) ($) ($) ($) ($)
- -------------------------- --------- --------- ----------- ------------- ---------------------- -------------- -----------
(a) (b) (c) (d) (e) (f) (g) (h)
- -------------------------- --------- --------- ----------- ------------- ---------------------- -------------- -----------
Boardman, Jr., Joseph F. $40,300 $ - $ - $ - $ - $ - $40,300
Pickering, Christine L. 32,000 - - - - - 32,000
Horne, James H. 36,150 - - - - - 36,150
Bertucci, Frank E. 29,000 - - - - - 29,000
Estabrook, Jr., James B. 32,000 - - - - - 32,000
Johnson, Sr., Charles H. (2) 37,600 1,585 - - - - 39,185
Bankston, Alton G. (2) 28,850 2,536 - - - - 31,386
Descant, Don P. (2) 35,575 4,174 - - - - 39,749
Pace, John H. (2) 40,075 211 - - - - 40,286
- ------------------------------
(1) $1,000 retainer paid monthly; HHC board meeting pays $600 per meeting; Gulfport board meeting pays $400 per
meeting; advisory board meeting pays $250 per meeting; loan committee meeting by phone pays $200 weekly (if called);
all other committee meetings pay $300 per meeting. Each director can elect to receive payment in the form of cash, stock
or deferred compensation.
(2) From time to time the Company will initiate new business referral programs for all Directors of the Company who
are also not employees. In 2006, the Company offered a voluntary referral program to these Directors. Directors
earn points for new business referred to the Company. At year-end, the points were tallied and $1.00 was paid to the
Directors for every point. The Company purchased shares of stock off the open market equivalent to the number of
dollars each Director earned. In 2006, Mr. Johnson earned 30 shares, Mr. Bankston 48 shares, Mr. Descant 79 shares
and Mr. Pace 4 shares all of which will be paid out in March 2007.
25
Hancock Holding Company
Potential Payments Upon Termination or Change-in-Control - George A. Schloegel
As of December 31, 2006
Termination
Termination upon Expiration
for Good of CIC
Executive Benefits and Payments Upon Voluntary Normal For Cause Reason upon Employment
Termination Termination Retirement Termination CIC Period Death
- --------------------------------------- ------------ ------------ ------------- ------------ ---------------- --------------
Compensation: (George A. Schloegel)
Base Salary $ - $ - $ - $957,469 $481,140 $ -
Short-Term Incentive - 288,684 - 289,933 289,933 288,684
Long-Term Incentives:
RSA (2003 - 2006 grants)
Unvested & Accelerated - 1,268,160 - 1,268,160 1,268,160 1,268,160
ISO (2006 grant)
Unvested & Accelerated - 163,276 - 163,276 163,276 163,276
NQO (2006 grant)
Unvested & Accelerated - 161,961 - 161,961 161,961 161,961
Benefits and Perquisites:
Incremental SERP - - - - - -
Disability Benefits (monthly benefit) - - - - - -
BOLI death benefit - - - - - 25,000
280G Tax Gross-up - - - - - -
CIC Career Counseling Services (1) - - - 6,000 - -
------------ ------------ ------------- ------------ ---------------- --------------
Total: $0 $1,882,081 $0 $2,840,799 $2,364,470 $1,907,081
- -----------------------------
(1) Cost projection based on career counseling services used by the Company in 2005.
26
Hancock Holding Company
Potential Payments Upon Termination or Change-in-Control - Carl J. Chaney
As of December 31, 2006
Termination
upon
Termination Expiration of
for Good CIC
Executive Benefits and Payments Voluntary Normal For Cause Reason upon Employment
Upon Termination Termination Retirement Termination CIC Period Death Disability
- --------------------------------- ------------ ----------- ------------ ------------- -------------- ---------- -----------
Compensation: (Carl J. Chaney)
Base Salary $ - $ - $ - $558,195 $280,500 $ - $ -
Short-Term Incentive - 134,640 - 134,100 134,100 134,640 134,640
Long-Term Incentives:
RSA (2003 - 2006 grants)
Unvested & Accelerated - 634,080 - 634,080 634,080 634,080 634,080
ISO (2006 grant)
Unvested & Accelerated - 163,276 - 163,276 163,276 163,276 163,276
NQO (2006 grant)
Unvested & Accelerated - 70,905 - 70,905 70,905 70,905 70,905
Benefits and Perquisites:
Incremental SERP - 108,932 - 108,769 108,769 108,932 108,932
Disability Benefits - - - - - - 7,500
BOLI death benefit - - - - - 25,000 -
280G Tax Gross-up - - - 173,074 - - -
CIC Career Counseling Services (1) - - - 6,000 - - -
------------ ----------- ------------ ------------- -------------- ---------- -----------
Total: $0 $1,111,832 $0 $1,842,398 $1,391,629 $1,136,832 $1,119,332
- ------------------------------
(1) Cost projection based on career counseling services used by the Company in 2005.
27
Hancock Holding Company
Potential Payments Upon Termination or Change-in-Control - John M. Hairston
As of December 31, 2006
Termination
Termination upon
for Good Expiration of
Executive Benefits and Payments Voluntary Normal For Cause Reason upon CIC Employment
Upon Termination Termination Retirement Termination CIC Period Death Disability
- --------------------------------- ------------ ----------- ------------ ------------- -------------- ---------- -----------
Compensation: (John M. Hairston)
Base Salary $ - $ - $ - $558,197 $280,500 $ - $ -
Short-Term Incentive - 134,640 - 134,100 134,100 134,640 134,640
Long-Term Incentives:
RSA (2003 - 2006 grants)
Unvested & Accelerated - 634,080 - 634,080 634,080 634,080 634,080
ISO (2006 grant)
Unvested & Accelerated - 163,276 - 163,276 163,276 163,276 163,276
NQO (2006 grant)
Unvested & Accelerated - 70,905 - 70,905 70,905 70,905 70,905
Benefits and Perquisites:
Incremental SERP - 97,063 - 97,063 97,063 97,063 97,063
Disability Benefits - - - - - - 7,500
BOLI death benefit - - - - - 25,000 -
280G Tax Gross-up - - - 173,074 - - -
CIC Career Counseling Services (1) - - - 6,000 - - -
------------ ----------- ------------ ------------- -------------- ---------- -----------
Total: $0 $1,099,963 $0 $1,830,694 $1,379,923 $1,124,963 $1,107,463
- --------------------------
(1) Cost projection based on career counseling services used by the Company in 2005.
28
Hancock Holding Company
Potential Payments Upon Termination or Change-in-Control - Clifton J. Saik
As of December 31, 2006
Termination
upon
Termination Expiration
for Good of CIC
Executive Benefits and Payments Voluntary Normal For Cause Reason Employment
Upon Termination Termination Retirement Termination upon CIC Period Death Disability
- ---------------------------------- ------------ ----------- ------------ ------------ ------------ ---------- -----------
Compensation: (Clifton J. Saik)
Base Salary $ - $ - $ - $246,511 $249,001 $ - $ -
Short-Term Incentive - 104,580 - 97,761 97,761 104,580 104,580
Long-Term Incentives:
RSA (2003 - 2006 grants)
Unvested & Accelerated - 317,040 - 317,040 317,040 317,040 317,040
ISO (2006 grant)
Unvested & Accelerated - 117,090 - 117,090 117,090 117,090 117,090
NQO (2006 grant)
Unvested & Accelerated - - - - - - -
Benefits and Perquisites:
Incremental SERP 23,910 95,639 23,910 69,572 69,572 95,639 95,639
Disability Benefits - - - - - - -
BOLI death benefit - - - - - 25,000 -
280G Tax Gross-up - - - - - - -
CIC Career Counseling Services (1) - - - 6,000 - - -
------------ ----------- ------------ ------------ ------------ ---------- -----------
Total: $23,910 $634,349 $23,910 $847,974 $850,464 $659,349 $634,349
- ------------------------------
(1) Cost projection based on career counseling services used by the Company in 2005
29
Hancock Holding Company
Potential Payments Upon Termination or Change-in-Control - Alfred G. Rath
As of December 31, 2006
Termination
Termination upon Expiration
for Good of CIC
Executive Benefits and Payments Voluntary Normal For Cause Reason Employment
Upon Termination Termination Retirement Termination upon CIC Period Death Disability
- --------------------------------- ------------ ----------- ------------ ----------- ---------------- ----------- -------------
Compensation: (Alfred G. Rath)
Base Salary $ - $ - $ - $198,000 $200,000 $ - $ -
Short-Term Incentive - 84,000 - 83,052 83,052 84,000 84,000
Long-Term Incentives:
RSA (2003 - 2006 grants)
Unvested & Accelerated - 269,484 - 269,484 269,484 269,484 269,484
ISO (2006 grant)
Unvested & Accelerated - 117,090 - 117,090 117,090 117,090 117,090
NQO (2006 grant)
Unvested & Accelerated - - - - - - -
Benefits and Perquisites:
Incremental SERP 17,810 8,772 17,810 4,439 4,439 8,772 8,772
Disability Benefits - - - - - - 7,278
BOLI death benefit - - - - - 25,000 -
280G Tax Gross-up - - - 70,263 71,000 - -
CIC Career Counseling Services (1) - - - 6,000 - - -
------------ ----------- ------------ ----------- ---------------- ----------- -------------
Total: $17,810 $479,346 $17,810 $742,328 $745,065 $504,346 $486,624
- --------------------------------
(1) Cost projection based on career counseling services used by the Company in 2005.
30
Hancock Holding Company
Potential Payments Upon Termination or Change-in-Control - Richard T. Hill
As of December 31, 2006
Termination
upon
Termination for Expiration of
Executive Benefits and Payments Voluntary Normal For Cause Good Reason CIC Employment
Upon Termination Termination Retirement Termination upon CIC Period Death Disability
- ---------------------------------- ----------- ----------- ------------ ---------------- --------------- ---------- -----------
Compensation: (Richard T. Hill)
Base Salary $ - $ - $ - $198,000 $200,000 $ - $ -
Short-Term Incentive - 84,000 - 79,163 79,163 84,000 $84,000
Long-Term Incentives:
RSA (2003 - 2006 grants)
Unvested & Accelerated - 317,040 - 317,040 317,040 317,040 $317,040
ISO (2006 grant)
Unvested & Accelerated - 117,090 - 117,090 117,090 117,090 $117,090
NQO (2006 grant)
Unvested & Accelerated - - - - - - -
Benefits and Perquisites:
Incremental SERP 5,306 70,492 5,306 61,866 61,866 70,492 $70,492
Disability Benefits - - - - - - $7,500
BOLI death benefit - - - - - 25,000 -
280G Tax Gross-up - - - - - - -
CIC Career Counseling Services (1) - - - 6,000 - - -
- ---------------------------------- ----------- ----------- ------------ ---------------- --------------- ---------- -----------
Total: $5,306 $588,622 $5,306 $773,159 $775,159 $613,622 $596,122
- --------------------------------
(1) Cost projection based on career counseling services used by the Company in 2005.
31
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
The tables above reflect the amount of compensation to each of the named executive officers of the Company in the event of termination of such executive’s employment. The amount of compensation payable to each named executive officer upon voluntary termination, normal retirement, for cause termination, termination for good reason upon change in control, termination upon expiration in change in control employment period and in the event of death or disability of the executive is shown above. The amounts shown assume that such termination was effective as of December 31, 2006, and thus includes amounts earned through such time and are estimates of the amounts which would be paid out to the executives upon their termination. The actual amounts to be paid out can only be determined at the time of such executive’s separation from the company.
Payments Made Upon Voluntary Termination
In the event of a voluntary termination by a named executive officer, he is entitled to receive amounts earned during his term
of employment. Such amounts include:
o Vested amounts in any Company contribution accounts in the Non-Qualified Deferred Compensation Plan.
Payments Made Upon Normal Retirement, Death or Disability
In the event of normal retirement, death or disability of a named executive officer, in addition to the items identified
above:
o he will immediately vest in all outstanding options (incentive and non-qualified) and retain such options for a
six month period;
o he will immediately vest in all outstanding awards;
o he will immediately vest in any company contribution accounts in the Non-Qualified Deferred Compensation Plan; and
o he will receive benefits under the Company's executive disability plan or payments under the Company's Bank
Owned Life Insurance (BOLI) plan, as appropriate.
Payments Made Upon a Change of Control
The Company has entered into Change of Control Employment Agreements with each named executive officer. These agreements
provide for continued employment for a period of three years following a change of control (the “Employment Period”).
Pursuant to these agreements, if an executive’s employment is terminated following a change of control and prior to the
end of the Employment Period (other than termination by the Company for cause or by reason of death or disability), or if the
executive terminates his employment in certain circumstances defined in the agreement which constitutes “good reason”,
or if the executive resigns for any reason during the thirty day period following the date that is six months after the effective
date of a change of control, the executive will receive certain benefits in addition to those listed under the heading
“Payments Made Upon Termination and Payments Made Upon Normal Retirement, Death or Disability”
o the named executive officer will receive:
-- a lump sum severance payment which is a multiple of the Executive's Base Compensation and average Employment
Period Bonus; and
o career counseling services for a period of 6 months.
In addition, the Award Agreements pursuant to which certain equity based awards have been made to the executives under the
Company’s Long Term Incentive Plan provide for an acceleration of the benefits in the
event of a change of control. As a result:
o all restricted stock awards granted to the executive will automatically vest and become non-forfeitable; and
o all stock options held by the executive will automatically vest and become exercisable.
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Generally, pursuant to the agreements a change of control is deemed to occur if:
(i) a person, including a "group" as defined in Section 13(d)(3) of the Securities and Exchange Act of 1934 becomes
the owner of shares of Hancock having fifty (50%) percent or more of the voting power of the then
outstanding shares,
(ii) Immediately following a reorganization, merger or consolidation with another corporation former shareholders of
Hancock control less than fifty (50%) percent of the voting power of the resulting corporation,
(iii) Hancock becomes a subsidiary of or controlled by one or more other corporations or unincorporated entities or
all or substantially all of the assets of Hancock are acquired by one or more corporations or
unincorporated entities, or
(iv) During any period of two consecutive calendar years, the individuals who, at the beginning of such period,
constitute the Board of Directors of the HHC cease for any reason to constitute at least a majority
thereof, unless the election or the nomination for election by the HHC shareholders of each new director
was approved by a vote of at least a majority of the directors then still in office who were directors at
the beginning of the period or persons nominated or elected by such directors.
"Good Reason" shall mean:
(i) the assignment of duties or other actions that are materially inconsistent with or result in a material
diminution of Executive's position, authority, duties or responsibilities immediately prior to the Change
of Control; or
(ii) requiring Executive, without his consent, to be based at any office or location outside of a twenty-mile radius
of the location at which Executive was based prior to the Effective Date of a Change of Control.
If the executive remains employed throughout the Employment Period, the Change of Control Employment Agreements provide the executive will receive a lump-sum payment equal to his average annual base salary during the Employment Period, plus his average Employment Period Bonus.
280G Tax Gross-up
Upon a change in control of the Company the executive may be subject to certain excise taxes pursuant to Section 280G of the Internal Revenue Code. The Company has agreed to reimburse the executive for excise taxes that are imposed on the executive under Section 280G.
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FIVE YEAR SHAREHOLDER RETURN COMPARISON
The U.S. Securities and Exchange Commission requires that the Company include in its Annual Report on Form 10-K the line graph presentation set forth below. The Company is also including the graph in this Proxy Statement for the Company’s shareholders’ ease of reference. The following graph compares cumulative, five-year shareholder returns on an indexed basis with a performance indicator of the overall stock market and an index of peer companies selected by the Company. The broad market index used in the graph is the NASDAQ Market Index. The peer group index is a group of financial institutions in the Southeast that are similar in asset size and business strategy; a list of the Companies included in the index follows the graph.
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BOARD COMMITTEES AND MEETINGS
Audit Committee
The Company has an Audit Committee, which is currently composed of independent directors (as the term independent is defined by NASDAQ listing standards) Frank E. Bertucci, J. F. Boardman, Jr., James H. Horne, and Christine L. Pickering. The Company’s Board of Directors has determined that Ms. Pickering, a practicing CPA, is an audit committee financial expert as that term is defined in pertinent regulations. She also serves as Chairperson of the Audit Committee. The Audit Committee acts pursuant to a written Audit Committee Charter, a copy of which was attached as Appendix A to the 2004 Proxy Statement and which is available on the Company’s website under Investor Relations — Corporate Governance — Committee Charters. The Audit Committee oversees the operation of the Company’s Audit Department and makes recommendations to the Board of Directors concerning the independent accountants for the Company and its subsidiaries. The Audit Committee met thirteen (13) times during 2006. The Audit Committee’s Pre-Approval Policies and Procedures were attached as Appendix B to the 2004 Proxy Statement.
Compensation Committee
The following directors currently serve as members of the Compensation Committee of Hancock Holding Company’s Board of Directors: Frank E. Bertucci, Compensation Committee Chairman, J.F. Boardman, Jr., Don P. Descant, and Charles H. Johnson, Sr. The Compensation Committee met seven (7) times in 2006.
There are no relationships that would create a compensation committee interlock as defined under applicable SEC regulations.
Role and Purpose of the Compensation Committee
The primary purpose of the Compensation Committee (the “Committee”) is to aid the Board of Directors (the “Board”) in discharging its responsibilities relating to the compensation of the Company’s Chief Executive Officer and other officers of the company and its subsidiaries having the rank of Executive Vice President or higher and who report directly to the Chief Executive Officer (referred to herein as “executive officers”). The Committee has overall responsibility for evaluating and approving the Company’s compensation plans, policies and programs. The Compensation Committee also oversees the preparation of and approves the annual Committee report on executive compensation for inclusion in the Company’s proxy statement. The Compensation Committee Charter, which further outlines the Committee’s responsibilities and duties, appears on the Company’s website under Investor Relations — Corporate Governance — Committee Charters.
Nominating Committee
The Company has a Nominating Committee consisting of four (4) independent directors (as the term independent is defined by NASDAQ Global Listing Standards) James B. Estabrook, Jr. (Chairperson), James H. Horne, John H. Pace and Christine L. Pickering. The Nominating Committee provides oversight on a broad range of issues surrounding the composition and operation of the Board of Directors of Hancock Holding Company. The Nominating Committee has a charter which is available on the Company’s website under Investor Relations — Corporate Governance — Committee Charters. The Nominating Committee met four (4) times in 2006.
Nominations for the election to the Board of Directors, other than those made by or at the direction of the Board of Directors, may be made by a shareholder by delivering written notice to the Company’s Corporate Secretary not less than fifty (50) nor more than ninety (90) days prior to the meeting at which directors are to be elected, provided that the Company has mailed the first notice of the meeting at least sixty (60) days prior to the meeting date. If the Company has not given such notice, shareholder nominations must be submitted within ten (10) days following the earlier of: (i) the date that notice of the date of the meeting was first mailed to the shareholders, or (ii) the date on which public disclosure of such date was made.
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The shareholder’s notice must set forth as to each nominee: (i) the name, age, business address and residence address of such nominee; (ii) the principal occupation or employment of such nominee; (iii) the class and number of shares of the Company’s Common Stock which are beneficially owned by such nominee; and (iv) any other information relating to such nominee that may be required under federal securities laws to be disclosed in solicitations of proxies for the election of Directors. The shareholder’s notice must also set forth as to the shareholder giving notice: (i) the name and address of such shareholder; and (ii) the amount of such shareholder’s beneficial ownership of the Company’s Common Stock.
If the information supplied by the shareholder is deficient in any material aspect or if the foregoing procedure is not followed, the chairman of the Annual Meeting may determine that such shareholder’s nomination should not be brought before the meeting and that such nominee shall not be eligible for election as Director of the Company.
It is the Nominating Committee’s policy to consider director candidates recommended by stockholders who appear to be qualified to serve on the Company’s Board of Directors. The Nominating Committee may choose not to consider an unsolicited recommendation if no vacancy exists on the Board of Directors and the Nominating Committee does not perceive a need to increase the size of the Board of Directors. The Nominating Committee will consider only those director candidates recommended in accordance with the procedures set forth below.
Procedures to be followed by Stockholders
To submit a recommendation of a director candidate to the Nominating Committee, a shareholder should submit the following information in writing, addressed to the Chairman of the Committee, care of Paul D. Guichet, Vice President, Investor Relations, at the main office of the Company:
1. The name of the person recommended as a director candidate;
2. All information relating to such person that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended;
3. The written consent of the person being recommended as a director candidate to being named in the proxy statement as a nominee and to serve as a director if elected;
4. As to the shareholder making the recommendation, the name and address, as they appear on the Company’s books, of such shareholder; provided, however, that if the shareholder is not a registered holder of the Company’s common stock, the shareholder should submit his or her name and address along with a current written statement from the record holder of the shares that reflects ownership of the Company’s common stock; and
5. A statement disclosing whether such shareholder is acting with or on behalf of any other person and, if applicable, the identity of such person.
Minimum Qualifications
The Nominating Committee has adopted a set of criteria that it considers when it selects individuals to be nominated for election to the Board of Directors. First a candidate must meet the eligibility requirements set forth in the Company’s bylaws. A candidate also must meet any qualification requirements set forth in any Board or Committee governing documents.
The Nominating Committee will consider the following criteria in selecting nominees: financial, regulatory and business experience; familiarity with and participation in the local community; integrity, honesty and reputation; dedication to the Company and its stockholders; independence; and any other factors the Nominating Committee deems relevant, including age, diversity, size of the Board of Directors and regulatory obligations.
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The Board of Directors of the Company met a total of fifteen (15) times during the year ended December 31, 2006. During 2006, all Directors attended 75% or more of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings held by committees on which they served.
The Company has implemented a shareholder communication process to facilitate communication with its Board of Directors. All shareholder communications to the Board of Directors should be forwarded to the attention of Paul D. Guichet, Vice President-Corporate Investor Relations Department, Hancock Holding Company, P.O. Box 4019, Gulfport, MS 39502. Email address; Paul_Guichet@hancock bank.com.
It is the Company’s policy that members of the Board of Directors attend the annual meeting of shareholders. At the 2006 annual meeting, all directors of the Company were in attendance.
PRINCIPAL ACCOUNTING FIRM FEES
During the last two (2) fiscal years, the Company paid its independent auditors fees and out of pocket expenses as follows:
Audit Fees. The aggregate fees billed by KPMG LLP for professional services rendered for the audit of the Company’s annual financial statements for the fiscal year ended December 31, 2006 and for the review of the financial statements included in the Company’s Quarterly Reports on Form 10-Q for that fiscal year were $995,000 and for the fiscal year ended December 31, 2005, the aggregate fees billed for such services were $1,206,025.
Audit-related Fees. The aggregate fees billed by KPMG LLP for assurance and related services that were reasonably related to the audit of the Company’s annual financial statements for the fiscal year ended December 31, 2006 were $154,156. For the fiscal year ended December 31, 2005, the aggregate fees billed for such services were $270,975.
Tax Fees. The aggregate fees billed for professional services rendered by KPMG LLP for tax compliance, tax advice and tax planning for the fiscal year ended December 31, 2006 was $216,714. For the fiscal year ended December 31, 2005, the aggregate fees billed for such services were $138,675.
All Other Fees. None incurred for the fiscal years ending December 31, 2006 and December 31, 2005.
The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining the principal accountant’s independence. For 2005 the Audit Committee approved all the services described above in accordance with its Pre-Approval Policies, which were attached to the 2004 Proxy Statement as Appendix B.
REPORT OF THE AUDIT COMMITTEE
Notwithstanding anything to the contrary set forth in any of the Company’s filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, the following report of the Audit Committee shall not be incorporated by reference into any such filings and shall not otherwise be deemed filed under such acts.
With respect to fiscal 2006, the Audit Committee has reviewed and discussed the audited financial statements with management. The Audit Committee has discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards 61, Communications with Audit Committees, as amended by Statement on Auditing Standards 90, Audit Committee Communications. The Audit Committee received the written disclosures and the letter from the independent auditors required by Independence Standards Board Standard No. 1, Independent Discussions with Audit Committee, and has discussed with the independent auditors the auditor’s independence.
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The Audit Committee has discussed with the Company’s management and independent auditors the process used for certifications by the Company’s Chief Executive Officer and Chief Financial Officer which are required by the Securities and Exchange Commission and the Sarbanes-Oxley Act of 2002 for certain of the Company’s filings with the Securities and Exchange Commission. The Board of Directors adopted a new Audit Committee charter, which meets the new requirements of the Sarbanes-Oxley Act of 2002, and new rules promulgated by the Securities and Exchange Commission.
Based on the review and discussions referred to above, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2006 for filing with the Securities and Exchange Commission.
Submitted by the Company's Audit Committee: Frank E. Bertucci J. F. Boardman, Jr. James H. Horne Christine L. Pickering
ADDITIONAL INFORMATION
The Annual Report of the Company for the fiscal year ended December 31, 2006 is enclosed. The Annual Report is not to be regarded as proxy soliciting material. Any shareholder who has not received an Annual Report may obtain one from the Company. The Company also will provide, without charge, copies of its Annual Report on Form 10-K for the year ended December 31, 2006, as filed with the U. S. Securities and Exchange Commission. Shareholders wishing to receive a copy of the Annual Report on Form 10-K are directed to write Paul D. Guichet, Vice President — Investor Relations, at the address of the Company.
PROPOSALS FOR 2008 ANNUAL MEETING
Any shareholder who wishes to present a proposal at the Company’s next Annual Meeting and who wishes to have the proposal included in the Company’s Proxy Statement and form of Proxy for the meeting must submit the proposal to the undersigned at the address of the Company not later than November 6, 2007. After this date, a stockholder who intends to raise a proposal to be acted upon at the 2008 annual meeting of shareholders must inform the Company in writing no later than December 18, 2007. If notice is not provided by that date, the Company’s Board of Directors may exclude such proposal from being acted upon at the 2008 meeting. Further, the persons named in the Company’s Proxy for the 2008 Annual Meeting will be allowed to exercise their discretionary authority to vote upon such proposal without the matter having been discussed in the Proxy Statement for the 2008 Annual Meeting.
By Order of the Board of Directors /s/ Leo W. Seal, Jr. /s/ George A. Schloegel Leo W. Seal, Jr. George A. Schloegel President President Chairman Dated: March 5, 2007
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Exhibit "A"
ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION
SECOND: The aggregate number of shares which the Corporation is authorized to issue is 400,000,000 divided
into two classes. The designation of each class, the number of shares of each class and the par value, if any, of each
class are as follows:
Number of Shares Class Par Value, if any
350,000,000 Common $ 3.33
50,000,000 Preferred $ 20.00
The preferences and relative rights in respect of the shares of each class and the variations in the relative
rights and preferences as between the series of any preferred class in the series are as follows:
Each share of Common Stock shall entitle the holder thereof to full voting rights. Except as may be determined
by the Board of Directors at the time a series is created, holders of Preferred Stock shall have no voting rights as a
holder of such stock, except as specifically required by law.
The holders of Preferred Stock shall be entitled to receive dividends, subject to statutory restrictions, when
and as declared by the Board of Directors. Such dividends shall be payable at such periods as shall be fixed by the
Board of Directors at the rate specified in the resolution of the Board of Directors authorizing the issuance of the
particular series of Preferred Stock, and no more, before any dividend shall be paid or set apart for payment upon the
Common Stock.
Dividends on the Preferred Stock shall be cumulative, so that if for any period the same shall not be paid, the
right thereto shall accumulate as against the Common Stock, and all arrears so accumulated shall be paid before any
dividend shall be paid upon the Common Stock.
Whenever all accumulated dividends on the outstanding Preferred Stock for all previous periods shall have been
declared and shall have become payable, and the Corporation shall have paid such accumulated dividends for such previous
periods, or shall have set aside from its legally available funds a sum sufficient therefor, the Board of Directors may
declare dividends on the Common Stock, payable then or thereafter out of any remaining legally available funds.
Each class of Preferred Stock shall be divided into and issued from time to time by resolution of the Board of
Directors in one or more series, each series being so designated as to distinguish the shares thereof from the shares of
all other series and classes. All or any of the series of any such class and the variations and the relative rights and
preferences as between different series may be fixed and determined by resolution of the Board of Directors, but all
shares of the same class shall be identical except as to the following relative rights and preferences, as to which
there may be variations between different series:
(a) the rate of dividend;
(b) whether shares may be redeemed and, if so, the redemption price and terms and conditions of redemption;
(c) the amount payable upon shares in the event of voluntary and involuntary liquidation;
(d) sinking fund provisions, if any, for the redemption or purchase of shares;
(e) the terms and conditions, if any, on which shares may be converted; and
(f) the voting rights of the shares.
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HANCOCK HOLDING COMPANY
P. O. BOX 4019
GULFPORT, MS 39502
P R O X Y F O R 2 0 0 7 A N N U A L M E E T I N G
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder of Hancock Holding Company, does hereby nominate,
constitute, and appoint Joseph F. Boardman, Jr. and George A. Schloegel, and each of them, as proxies (with full power
of substitution), and hereby authorizes them to vote upon all matters that may properly come before the meeting
including the matters described in the Proxy Statement furnished herewith, subject to any directions indicated below,
with full power to vote all shares of Common stock of Hancock Holding Company held of record by the undersigned on
February 13, 2007, at the annual meeting of stockholders to be held on March 29, 2007, or any adjournment(s) thereof.
IF NO DIRECTIONS ARE GIVEN, THE PROXIES WILL VOTE WITH THE BOARD OF DIRECTORS' RECOMMENDATION FOR EACH OF THE DIRECTORS
AS INDICATED IN ITEM 1, ITEM 2, and ITEM 3.
The Board of Directors Recommends you vote FOR Items 1, 2, and 3.
MANAGEMENT PROPOSALS:
Item 1. The election of the following five (5) persons as directors, to serve until the Annual Meeting in 2010, or
until each person's successor has been elected and qualified. (INSTRUCTION: AUTHORITY TO VOTE FOR ANY
NOMINEE MAY BE WITHHELD BY LINING THROUGH OR OTHERWISE STRIKING OUT THE NAME OF ANY NOMINEE.)
DON P. DESCANT JAMES B. ESTABROOK, JR. ROBERT W. ROSEBERRY
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LEO W. SEAL, JR. ANTHONY J. TOPAZI
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For all nominees except as indicated Withhold authority to vote for all nominees
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Item 2. Approval of the appointment of KPMG LLP as independent accountants for the Company.
FOR AGAINST ABSTAIN
---- ---- ----
Item 3. Approval of the Amendment to the Articles of Incorporation to increase the number of authorized shares of
Common Stock from 75,000,000 to 350,000,000, as per Exhibit "A".
FOR AGAINST ABSTAIN
---- ---- ----
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PLEASE RETURN THE ENTIRE PROXY CARD IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
DATED: , 2007
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Signature:
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Signature:
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When signing as attorney, executor, trustee, or
guardian, please give full title. If more than
one trustee, all should sign. All joint owners
must sign.
Number of shares:
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IF YOU PLAN TO ATTEND THE MEETING,
PLEASE CHECK HERE
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WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE SIGN
AND RETURN AT ONCE.