SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box: File No. 811-2320; 2-47081
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or
240.14a-12
Vestaur Securities, Inc. File No. 811-2320; 2-47081
......................................................
(Name of Registrant as Specified In Its Charter)
......................................................
(Name of Person(s) Filing Proxy Statement, if other than
the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-
6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which
transaction applies:
.........................................
2) Aggregate number of securities to which
transaction applies:
.........................................
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how
it was determined):
..........................................
4) Proposed maximum aggregate value of transaction:
..........................................
5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee
was paid previously. Identify the previous filing
by registration statement number, or the Form
or Schedule and the date of its filing.
1) Amount Previously Paid:
..............................................
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
PRELIMINARY PROXY MATERIAL
VESTAUR SECURITIES, INC.
Centre Square West - UM Floor
15th and Market Streets
Philadelphia, Pennsylvania 19101
- - - --------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS -
APRIL 22, 1996
- - - --------------------------------------------------------
TO THE STOCKHOLDERS OF VESTAUR SECURITIES, INC.
Notice is hereby given that the annual meeting of stock-
holders of Vestaur Securities, Inc. will be held on
Monday, April 22, 1996, at 11:00 a.m. local time, in
Conference Room #3, at ARAMARK, 1500 Market Street, 41st
Floor, Centre Square West Tower, Philadelphia, PA
19102, for the following purposes:
1. To elect a Board of eight Directors to serve until
the next annual meeting and until their successors shall
have been elected and qualified.
2. To ratify the action of the Board of Directors in
selecting Deloitte & Touche as auditors to examine the
books and financial statements of Vestaur Securities,
Inc., for the period commencing December 1, 1995 and
ending November 30, 1996.
3. To consider and vote upon a proposal to approve a
new advisory agreement between Vestaur Securities, Inc.
and CoreStates Investment Advisers, Inc. ("the
Adviser"), pursuant to which the Adviser will act as
investment adviser with respect to the assets of the
Fund, effective upon the date of the annual meeting,
assuming prior approval of the merger of CoreStates
Corp. ("CoreStates") and Meridian Bancorp, Inc.
("Meridian")(the "Merger").
4. The transaction of such other business as may
properly be brought before the meeting.
Stockholders of record at the close of business on
March 21, 1996 will be entitled to vote at the meeting.
A complete list of the Stockholders entitled to vote at
the meeting shall be available for examination by any
stockholder at the principal office of the Fund during
normal business hours from April 8, until the
commencement of the meeting, at which time the list will
be available at the place of the meeting.
It is hoped that you will attend the meeting, but if you
cannot do so, please fill in and sign the enclosed
proxy, and return it in the accompanying envelope as
promptly as possible. Any stockholder attending can
vote in person even though a proxy has already been
returned.
By Order of the Board of Directors
ROBERT J. DIDOMENICO
Assistant Secretary
Philadelphia, Pennsylvania
March 25, 1996<PAGE>
VESTAUR SECURITIES, INC.
PROXY STATEMENT
This proxy statement is furnished in connection with the
solicitation by and on behalf of the Board of Directors
of Vestaur Securities, Inc. ("Vestaur" or the "Fund")
for use at the Annual Meeting of Stockholders (the
"Annual Meeting") to be held in Conference Room #3, at
ARAMARK, 1500 Market Street, Centre Square West Tower,
41st Floor, Philadelphia, Pennsylvania 19102, on Monday,
April 22, 1996 at 11:00 a.m., local time. The address
of the principal office of the Fund is Centre Square
West - UM Floor, Philadelphia, Pennsylvania 19101.
Proxy Solicitation
All proxies in the enclosed form which are properly
executed and returned to the Fund will be voted as
provided therein at the Annual Meeting or at any
adjournments thereof. A stockholder executing and
returning a proxy has the power to revoke it at any time
before it is exercised by giving written notice of such
revocation to the Secretary of the Fund. Signing and
mailing the proxy will not affect your right to give a
later proxy or to attend the Annual Meeting and vote
your shares in person.
The Board of Directors intends to bring before the
meeting the matters set forth in items 1, 2 and 3 in the
foregoing notice. The persons named in the enclosed
proxy and acting thereunder will vote with respect to
items 1, 2 and 3 in accordance with the directions of
the stockholders as specified on the proxy card; if no
choice is specified, the shares will be voted IN FAVOR
of the election of the eight directors named under item
1, IN FAVOR of ratification of Deloitte & Touche as
auditors and IN FAVOR of approval of the investment
advisory agreement described in item 3. If any other
matters are properly presented to the meeting for
action, it is intended that the persons named in the
enclosed proxy and acting thereunder will vote in
accordance with the views of management thereon.
Abstentions and broker non-votes are counted for quorum
purposes. With regard to the election of directors,
votes may be cast in favor or withheld; votes that are
withheld will be excluded entirely from the vote and
will have no effect. Abstentions will have the effect
of a negative vote on the proposal to ratify approval of
accountants because it requires the affirmative vote of
a majority of shares present in person or by proxy and
entitled to vote and similarly, will have the effect of
a negative vote on the proposal to approve the
investment advisory agreement because it requires the
vote of a majority of the outstanding voting securities,
as defined in the Investment Company Act of 1940 (the
"1940 Act") and described below. Under the rules of the
New York Stock Exchange, Inc. brokers who hold shares in
street name for customers have the authority to vote on
certain items when they have not received instructions
from beneficial owners. Brokers that do not receive
instructions are entitled to vote on the election of
directors.
The affirmative vote of a plurality of the shares
present in person or represented by proxy at the meeting
is required for the election of Directors (Item 1); the
affirmative vote of a majority of the shares cast at the
meeting is required for ratification of the selection of
independent public accountants (item 2); and the
affirmative vote of more than 50% of the Fund's
outstanding shares entitled to vote at the meeting or a
two-thirds majority of the shares present at the meeting
if the holders of more than 50% of the outstanding
shares entitled to vote at the meeting are present in
person or by proxy, is required for approval of the
investment advisory agreement.
In the event a quorum is not present at the meeting or
in the event that a quorum is present but sufficient
votes to approve the proposed item are not received, the
persons named as proxies may propose one or more
adjournments of the meeting to permit further
solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those
shares represented at such meeting in person or by
proxy. The persons named as proxies will vote those
proxies that they are entitled to vote FOR any such
proposal, in favor of such an adjournment, and will vote
those proxies required to be voted AGAINST any such
proposal, against any such adjournment.
The Fund will bear the costs of preparing, printing and
mailing this proxy statement, the proxies and any
additional materials which may be furnished to
stockholders. Solicitation may be undertaken by mail,
telephone, telegraph and personal contact. The Fund has
engaged Corporate Investor Communications, Inc. to
solicit proxies from brokers, banks, other institutional
holders and individual stockholders for a fee of
approximately $5,000. The Annual Report of the Fund has
been mailed to all stockholders entitled to vote at the
Annual meeting. The Fund will furnish, without charge,
a copy of the Annual Report to a stockholder upon
request. Stockholder requests should be directed to
Robert J. DiDomenico, Centre Square West - UM Floor,
15th and Market Streets, Philadelphia, PA 19101;
telephone by collect call to (215) 567-3969. This proxy
statement and Form of proxy were first sent to
stockholders on or about March 25, 1996.
Voting Securities and Principal Holders Thereof
Holders of Common Stock of the Fund of record at the
close of business March 21, 1996 will be entitled to
vote at the Annual meeting or any adjournment thereof.
As of March 21, 1996, the Fund has outstanding 6,651,676
shares of Common Stock. The stockholders are entitled
to one vote per share on all business of the meeting.
To the knowledge of the Fund, there is no beneficial
owner of more than 5% of the outstanding Common Stock of
the Fund.
The officers and directors of the Fund as a group
beneficially own in the aggregate __________ shares
(0.___%) of the outstanding Common Stock of the Fund and
less than 1% of the outstanding securities of CoreStates
Financial Corp ("CoreStates"), ultimate parent of
CoreStates Bank, N.A. ("CoreStates Bank") and CoreStates
Investment Advisers, Inc. ("the Adviser").
I. ELECTION OF DIRECTORS
At the Annual Meeting eight Directors, constituting the
entire Board of Directors of the Fund, are to be elected
to hold office until the next annual meeting and until
their successors are elected and shall have qualified.
If any nominee for any reason becomes unable to serve,
the persons named as proxies will vote for the election
of such other persons as they believe will carry on the
present policies of the Fund and as they deem to be
qualified. The Board of Directors has no reason to
believe that any of the eight nominees will be unable to
serve. Mr. Jansing was previously a Director of the
Fund from its inception in 1972 until his resignation in
July, 1974. The ages, principal occupations and certain
other affiliations of the nominees, the amount of stock
owned beneficially, directly or indirectly, in the Fund
and the years they first became Directors of the Fund
are as follows:
<PAGE>
Age( ) Shares Owned
Principal beneficially Percent
Name Occupation First directly or of
and and other Became indirectly Class
Address Affiliations Director 3-21-96 3-21-96
- - - -------- ------------- ---------- ----------- -------
#Donald C. Carroll 1972 -0- -0-
217 Logan Court
Phila., PA 19103
(65) Chairman, Shulco, Inc. since 1986. Also a director
of SEI Corporation and of several privately held
companies.
Paul B. Fay, Jr. 1972
3766 Clay Street
San Francisco, CA 94118
(77) President, The Fay Improvement Company; Trustee of
Odell Charitable Foundation and Naval War College
Foundation (Emeritus); Director of First American
Financial Corporation, SunCoast Savings and Loan
Association, and Compensation Resource Group
Incorporated.
#Robert F. Gurnee 1991
3801 Kennett Pike
Building B, Suite 201
Greenville, DE 19807
(68) Chairman, Financial Integrity Group, Inc.,
Director, Japan Equity Fund, Inc., The Thai Capital
Fund, Mellon Bank (DE) N.A. and Heart Association of
Delaware. Formerly, Chairman, Sears Roebuck Acceptance
Corporation, Discover Credit Corp. and Sears Receivables
Financing Group; and Vice President and Corporate
Treasurer, Sears, Roebuck and Co.
#John C. Jansing 1976
162 S. Beach Road
Hobe Sound, FL 33455
(70) Director, Lord Abbett & Co. managed group of mutual
funds and Alpine Group Inc. Formerly, Chairman,
Independent Election Corporation of America.
- - - --------------------------------------------------------
# Memeber of the Audit Committee
Age( ) Shares Owned
Principal beneficially Percent
Name Occupation First directly or of
and and other Became indirectly Class
Address Affiliations Director 3-21-96 3-21-96
- - - -------- ------------- ---------- ----------- -------
*James S. Morgan 1978 (1)
Woodside-282
1515 The Fairway
Rydal, PA 19046
(79) Private Investor; Vice President and Chief
Investment Officer, Rittenhouse Financial Services,
Inc.; Vice President and Director, The Rittenhouse Trust
Co. Formerly, Senior Vice President of First
Pennsylvania Bank N.A. Chairman of the Fund until 1982.
**Philip R. Reynolds 1972
43 Montclair Drive
West Hartford, CT 06107
(68) Treasurer and Trustee of J. Walton Bissell
Foundation since 1989. Formerly, Executive Vice
President, Investments, Phoenix Mutual Life Insurance
Co. 1984-1989. Director, Phoenix Series Fund, Phoenix
Total Return Fund, Big Edge Series Fund and Phoenix
Multi-Portfolio Fund.
**Marciarose Shestack 1972
Parkway House
2201 Pennsylvania Ave.
Philadelphia, PA 19130
(62) Freelance television broadcaster, journalist and
public relations consultant since 1990. Formerly,
Consultant to Philadelphia Developers Alliance 1989-
1990; President, Philadelphia Developers' Alliance
(1986-1989).
*Mark E. Stalnecker 1993
**Centre Square West
Philadelphia, PA 19101
(44) Chairman of Vestaur Securities since 1993. Chief
Trust and Investment Services Officer, CoreStates
Financial Corp. since 1992. Executive Vice President,
CoreStates Bank, N.A. and CoreStates Financial Corp.
since 1988. Chairman and President, CoreStates
Investment Advisers, Inc., Director, CoreStates Bank of
Delaware, N.A. and Philadelphia International Investment
Corp.
- - - --------------------------------------------------------
* Interested Member of Board of Directors
** Member of Executive Committee
(1) Does not include shares held by a family member
of Mr. Morgan as to which he disclaims beneficial
ownership.
Under the 1940 Act, Mr. Stalnecker is an "interested
person" of the Fund because he is a Director of the
Adviser and an Executive Vice President of CoreStates
Bank, an affiliate of the Adviser. Mr. Morgan is an
"interested person" because he owns beneficially
______shares of Common Stock of CoreStates.
The officers of the Fund, the period during which each
has served, their ages, principal occupations during the
last five years including offices held with the Adviser,
CoreStates and its affiliated companies and beneficial
ownership of shares of the Common Stock of CoreStates
are as follows:
Common
CoreStates Stock***
shares Options
Name, Age Owned To
( ) and Principal Beneficially Purchase
Office Occupation 3-21-96 3-21-96
- - - --------- ------------ ------------- ----------
Mark E. Stalnecker (44)
Chairman of the Board since 1993.
Chief Trust and Investment Services Officer, CoreStates
Financial Corp. since 1992. Executive Vice President,
CoreStates Bank, N.A. and CoreStates Financial Corp.
since 1988. Chairman and President, CoreStates
Investment Advisers, Inc., Director, CoreStates Bank of
Delaware, N.A. and Philadelphia International Investment
Corp.
Dung Vukhac (52)
President since 1995.
Director and Senior Vice President, Fixed Income
Services, CoreStates Investment Advisers, Inc. since
19__; Previously, Securities Analyst, Economist and
Fixed Income Manager, Trust Department, Philadelphia
National Bank.
Common
CoreStates Stock***
shares Options
Name, Age Owned To
( ) and Principal Beneficially Purchase
Office Occupation 3-21-96 3-21-96
- - - --------- ------------ ------------- ----------
Michael F. Melloy (58)
Vice President since 1990.
Vice President and Portfolio Manager, CoreStates
Investment Advisers, Inc. since 1990. Previously,
Executive Vice President, Centre Square Investment Group
and Vice President, First Pennsylvania Bank N.A.
Karen G. Bater (37)
Assistant Vice President since 1992.
Vice President and Senior Portfolio Manager, CoreStates
Investment Advisers, Inc. since 1986.
Robert J. DiDomenico (39),
Assistant Secretary since 1987, Treasurer since 1992.
Assistant Vice President, CoreStates Investment
Advisers, Inc. since 1994. Previously, Trust Officer,
CoreStates Investment Advisers, Inc., 1992-1994, Trust
Officer, CoreStates Bank, N.A., 1990-1992. Trust
Officer, First Pennsylvania Bank N.A., 1989-1990; Staff
Accountant, First Pennsylvania Bank N.A., 1985-1989.
- - - --------------------------------------------------------
*** CoreStates Financial Corp has ___________ shares of
Common Stock outstanding.
All officers are elected to one-year terms. All officers
and directors may be reached through the principal
offices of the Fund at Centre Square West - UM Floor,
Philadelphia, Pennsylvania 19101. The Fund had no
Nominating or Compensation Committees during fiscal year
1995. The Board of Directors held four regular meetings
in fiscal year 1995.
Unless instructed by the stockholders to refrain from so
voting, it is the intention of the persons named as
proxies to vote for election of the eight nominees
listed above as Directors. Provided that a quorum is
present, a plurality of the votes validly cast at the
meeting is required to elect each of the Directors.
OTHER REMUNERATION AND AFFILIATIONS OF OFFICERS AND
DIRECTORS
Each of the seven directors of the Fund who are not
affiliated persons (as defined in the Investment Company
Act of 1940, as amended) of the Adviser, or of
CoreStates, its parent, receives an annual fee of
$7,000, and $200 for each Board meeting attended, as
compensation for services. The Fund also pays such
Board members $100 for each Executive Committee Meeting
attended and $150 for each Audit Committee Meeting
attended. The Fund also reimburses all Directors who
are not affiliated persons for expenses incurred in
connection with attending meetings of the Board of
Directors. For the year ended November 30, 1995
aggregate Directors fees paid were $______ and expenses
paid were $_____. Fees, salaries or other remuneration
of officers of the Fund who also serve as directors,
officers, employees or special consultants to the
Adviser, CoreStates or any of their affiliated companies
are borne by the appropriate CoreStates affiliate. All
present officers are covered by this provision, and did
not receive any compensation or expense reimbursement
from the Fund.
II. RATIFICATION OR REJECTION OF APPOINTMENT OF AUDITORS
At a meeting held on December 13, 1995, the Board of
Directors, including a majority of those Directors who
are not interested persons of the Fund, selected
Deloitte & Touche as auditors to examine the Fund's
books and securities and to certify from time to time
the Fund's financial statements for the period December
1, 1995 to November 30, 1996, subject to ratification by
the stockholders of the Fund. The firm has no direct or
indirect material interest in the Fund. Representatives
of Deloitte & Touche are expected to be present at the
Annual Meeting with the opportunity to make a statement
if they desire to do so, and they will be available to
respond to appropriate questions. A majority vote of
the shares represented in person and by proxy at the
meeting is necessary to ratify the selection of the
auditors.
The Board of Directors has appointed an Audit Committee
consisting of John C. Jansing, Robert F. Gurnee and
Donald C. Carroll. The purpose of this Committee is to
evaluate financial management, meet with the auditors,
and deal with other matters of a financial nature that
they deem appropriate. The Committee met twice during
fiscal year 1995.
III. APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT
FOR THE FUND
Background
One of the purposes of the meeting is to consider a new
investment advisory agreement for Vestaur as a result of
the proposed merger whereby Meridian Bancorp, Inc.
("Meridian") would merge into CoreStates (the "Merger").
The Merger represents a change in ownership of the
parent corporation of the Adviser and, as such, has the
effect under the 1940 Act of terminating the existing
advisory agreement between Vestaur and the Adviser (the
"Existing Advisory Agreement"). Accordingly,
shareholders are being asked to approve a new advisory
agreement embodying exactly the same terms and fees with
the Adviser under its new ownership (the "New Advisory
Agreement"). The Fund's Board of Directors, including
a majority of the non-interested Directors (those
Directors who are not parties to the New Advisory
Agreement, or interested persons of such parties)
approved the New Advisory Agreement, subject to approval
by the shareholders of the Fund, to become effective
upon the date of the Annual Meeting, or upon
consummation of the merger, if it occurs subsequent to
the Annual Meeting.
In October 1995, CoreStates announced its intention to
enter into a Merger with Meridian whereby Meridian will
merge with and into CoreStates. CoreStates is to be the
surviving corporation and continue under the name
"CoreStates Financial Corp." The Board of Directors of
both CoreStates and Meridian approved the Merger. The
merged CoreStates/Meridian organization will rank among
the twenty-five largest bank holding companies in the
United States based on assets. It is anticipated that
approximately 88,395,719 shares of CoreStates Common
Stock will be issued in the Merger. CoreStates has a
total of 350 million authorized shares of Common Stock.
Cash will be paid in lieu of fractional shares of
CoreStates Common Stock according to a formula based on
the average closing prices for CoreStates Common Stock
for five trading days preceding the effective time of
the Merger. The Merger was approved by the shareholders
of both CoreStates and Meridian, and is subject to
approval by various federal and state regulatory
authorities. The Board of Directors of both CoreStates
and Meridian expect the merger to be completed during
the first or second week in April, 1996.
Meridian is a publicly owned multibank holding company
incorporated under the laws of the Commonwealth of
Pennsylvania and registered under the Federal Bank
Holding Company Act of 1956, as amended. Through its
subsidiaries, Meridian managed as of September 30, 1995,
more than $15 billion in assets, including approximately
$1.5 billion in mutual fund assets.
As required by the 1940 Act, the Existing Advisory
Agreement provides for its automatic termination upon
"assignment." Consummation of the Merger may be deemed
to be an assignment (as defined in the 1940 Act) of the
Existing Advisory Agreement resulting in the termination
of the Existing Advisory Agreement in accordance with
its terms. In anticipation of the Consummation of the
Merger, and to provide continuity in investment advisory
services, Vestaur's Board of Directors, including a
majority of the Board members who are not "interested
persons" (as defined in the 1940 Act) at a meeting held
on March 13, 1996, approved and directed that there be
submitted to shareholders for approval a new investment
advisory agreement between Vestaur and the Adviser.
In connection with the Fund's approval of the New
Advisory Agreement, the Board considered that the terms
of the Merger do not require a change in the Fund's
investment objective or policies, the Adviser's
investment management or operation of the Fund, the
investment personnel managing the Fund, or the
shareholder services or other business activities of the
Fund. CoreStates has informed the Board of Vestaur that
the Merger will not at this time result in any such
change, although no assurance can be given that such a
change will not occur in the future.
Section 15(f) of the 1940 Act provides that when a
change in the control of an investment adviser occurs,
the investment adviser or any of its affiliated persons
may receive any amount or benefit in connection
therewith as long as two conditions are satisfied.
First, no "unfair burden" may be imposed on the
investment company as a result of the transaction
relating to the change of control, or any express or
implied terms, conditions or result of the transaction
relating to the change of control, or any express or
implied terms, conditions or understandings applicable
thereto. The term "unfair burden," as defined in the
1940 Act, includes any arrangement during the two-year
period after the change in control whereby the
investment adviser (or predecessor or successor
adviser), or any interested person of any such adviser,
receives or is entitled to receive any compensation,
directly or indirectly, from the investment company or
its security holders (other than fees for bona fide
investment advisory or other services) or from any
person in connection with the purchase or sale of
securities or other property to, from, or on behalf of
the investment company (other than fees for bona fide
principal underwriting services). No such compensation
arrangements are in effect or contemplated insofar as
the Fund is concerned.
The second condition is that, during the three-year
period immediately following consummation of the
transaction, at least 75% of the investment company's
board of directors must not be "interested persons" of
the Adviser within the meaning of the 1940 Act. At
present, two of the Fund's directors, out of eight
directors, are interested persons of the Adviser.
If the Merger is not completed, the Existing Advisory
Agreement will remain in effect. In the event the New
Advisory Agreement is not approved by the Fund's
shareholders, the Directors will promptly seek to enter
into a new advisory arrangement for the Fund, subject to
approval by the Fund's shareholders.
THE INVESTMENT ADVISER
Since June 14, 1990, the Investment Adviser to the Fund
has been CoreStates Investment Advisers, Inc., a wholly-
owned, indirect subsidiary of CoreStates. The address
of the Adviser is Upper Mezzanine, 1500 Market Street,
Philadelphia, Pennsylvania 19102. The Adviser provides
investment advisory services to individuals, investment
companies, pension and profit sharing plans and
corporations or other business entities.
The Adviser is a wholly-owned subsidiary of CoreStates
Bank which was formed on October 1, 1990 as a result of
the merger of First Pennsylvania Bank N.A. (the Fund's
former investment adviser and its custodian) with and
into The Philadelphia National Bank. CoreStates Bank,
in turn, is a wholly-owned subsidiary of CoreStates.
Mark Stalnecker is Chairman, President and a Director of
the Adviser, and reports to Daniel Aboyan, Senior Vice
President of CoreStates Investment Banking Group. In
such capacity, he is responsible for the investment
management activities of the Adviser. The other
Directors of the Adviser are Dung Vukhac, Senior Vice
President of the Adviser; Timothy R. Stives, Senior Vice
President of the Adviser; Charles T. Meisse, Senior Vice
President of the Adviser; JoAnne T. Fredericks, Senior
Vice President of the Adviser; Daniel Aboyan and Richard
J. Lindsay, Treasurer of the Adviser. Michael F.
Melloy, Stuart N. Hosansky and Karen G. Bater are Vice
Presidents of the Adviser and William T. Lawrence is
Vice President and Secretary of the Adviser.
The officers of the Fund, as officers of CoreStates or
the Adviser, will have access to the additional
resources and procedures of the CoreStates Investment
Banking Group Division. As of December 31, 1995,
CoreStates Bank, N.A. manages the investments of twenty-
four common trust funds having assets of more than $___
billion. The Adviser is investment manager to CoreFund,
Inc., a management investment company presently
consisting of seventeen portfolios: CoreFund Cash
Reserve, CoreFund Treasury Reserve, CoreFund Tax-Free
Reserve, CoreFund Fiduciary Reserve, CoreFund Fiduciary
Treasury Reserve, CoreFund Fiduciary Tax-Free Reserve,
CoreFund Growth Equity Fund, CoreFund Value Equity Fund,
CoreFund Equity Index Fund, CoreFund International
Growth Fund, CoreFund Balanced Fund, CoreFund Global
Bond Fund, CoreFund Government Income Fund, CoreFund
Intermediate Bond Fund, CoreFund Intermediate Municipal
Fund, CoreFund New Jersey Municipal Fund and CoreFund
Pennsylvania Municipal Fund. These portfolios have
aggregate assets of $___ billion.
The Chairman and Chief Executive Officer of CoreStates
is Terrence A. Larsen who also is a Director of
CoreStates. The names of all of the other Directors of
CoreStates are as follows:
George A. Butler, Retired President of CoreStates;
Robert H. Campbell, Chairman, President and Chief
Executive Officer, Sun Company, Inc.; Nelson G. Harris,
Esq., Retired Chairman, Chairman of the Executive
Committee and Director, Tasty Baking Company; Carlton E.
Hughes, Chairman, Stewart-Amos Steel, Inc.; Shirley A.
Jackson, Professor, Rutgers University; Ernest E. Jones,
Executive Director, Greater Philadelphia Urban Affairs
Coalition; Herbert Lotman, Chairman, Keystone Foods
Corporation; George V. Lynett, Esq., Publisher, The
Scranton Times; Patricia A. McFate, Senior Scientist,
Science Applications International Corporation; John A.
Miller, Retired Chairman and Chairman of the Executive
Committee, Provident Mutual Life Insurance Company of
Philadelphia; Marlin Miller, Jr., President and Chief
Executive Officer, Arrow International, Inc.; Stephanie
W. Naidoff, Esq., Of Counsel, Morgan, Lewis & Bockius;
Seymour S. Preston, III, Chairman and Chief Executive
Officer, AAC Engineered Systems, Inc.; James M.
Seabrook, Chairman and Chief Executive Officer, Seabrook
Brothers & Sons, Inc.; J. Lawrence Shane, Retired Vice
Chairman, Scott Paper Company; Raymond W. Smith,
Chairman and Chief Executive Officer, Bell Atlantic
Corporation; Harold A. Sorgenti, Chairman, Freedom
Chemical Company; and Peter S. Strawbridge, President,
Strawbridge and Clothier. Charles L. Coltman, III is
President and Chief Operating Officer of CoreStates and
Rosemarie B. Greco is President and Chief Executive
Officer, CoreStates Bank,, N.A. Albert W. Mandia is
Executive Vice President for Finance of CoreStates. All
of the above persons may be reached in care of
CoreStates Financial Corp., PNB Building, Broad and
Chestnut Streets, Philadelphia, PA 19101. None of the
foregoing persons owns as much as 1% of the outstanding
stock of CoreStates and all of them own less than 5%.
Mark E. Stalnecker, Chairman of the Fund, is a Director
of the Adviser, and Chief Trust and Investment Services
Officer of CoreStates, with direct responsibility for
the organization's trust and investment activities.
Michael F. Melloy and Karen G. Bater, Vice President and
Assistant Vice President of the Fund, respectively, are
Vice Presidents of the Adviser, with responsibility for
fixed income investments and also are affiliated with
the CoreStates' Bank Trust and Investment Group. Robert
J. DiDomenico, Treasurer and Assistant Secretary of the
Fund, is affiliated with CoreStates Bank. Dung Vukhac,
President of the Fund, is head of the Adviser's fixed
income division and oversees investment management
activities of the Fund. Mr. Stalnecker is responsible
for management of the Fund. Mr. Melloy is responsible
for management of the Fund's portfolio and is in charge
of its investment research and trading operations. Mr.
DiDomenico is responsible for maintaining the books and
records of the Fund and for working with the portfolio
manager on a continuous basis to assure that accounting
records are properly maintained and that monies of the
Fund are fully invested at all times. In their
capacities as officers of the Fund, Messrs. Vukhac,
Melloy, DiDomenico and Ms. Bater report to Mr.
Stalnecker.
CoreStates Bank, serves as custodian of the Fund's
assets. For the fiscal year ended November 30, 1995,
the Fund paid custodian fees of $22,846 to CoreStates
Bank.
THE EXISTING ADVISORY AGREEMENT AND THE NEW ADVISORY
AGREEMENT
The Existing Advisory Agreement and the proposed New
Advisory Agreement are identical in all substantive
respects, differing only in their effective and
termination dates. The description of the New Advisory
Agreement is qualified in its entirety by reference to
the form of Agreement attached as Exhibit A to this
proxy statement. Pursuant to the terms of the Existing
Advisory Agreement and the New Advisory Agreement, the
Adviser provides the Fund with an investment program
complying with the investment objectives, policies and
restrictions of the Fund and in carrying out such
program is responsible for the investment and
reinvestment of the Fund's assets. The Adviser performs
and absorbs the cost of research, statistical analysis
and continuous complete supervision of the Fund's
investment portfolio. The Adviser also causes the Fund
to be furnished office space and all ordinary and
necessary office facilities, equipment and personnel for
managing the affairs of the Fund. The Adviser or its
affiliates paid the fees, salaries or other remuneration
of directors and officers of the Fund who also served as
directors, officers or employees of or special
consultants to the Adviser, CoreStates, CoreStates Bank,
or any of their affiliated companies. In addition, the
Adviser absorbed the costs and expenses of the Fund's
Transfer Agent, Dividend Disbursing Agent and Agent
under the Automatic Dividend Investment Plan and the
Fund's Registrar. In return for its advisory and other
services and the expenses it assumed, under the terms of
the Existing Advisory Agreement and the New Advisory
Agreement, the Adviser is entitled to receive a monthly
fee at an annual rate of 0.5% of the average monthly net
asset value of the Fund plus 2.5% of the net amount of
interest and dividend income after deducting interest on
borrowed funds. Amortization of debt discount is not
considered interest income for the purpose of
calculating such fee. For the fiscal year ended
November 30, 1995, the Adviser received $681,471 (0.714%
of average net assets) from the Fund in fees under the
Existing Advisory Agreement. The Adviser would have
received the same fees if the New Advisory Agreement had
been in effect during the fiscal year ended November 30,
1995.
The Fund is responsible under the Existing Advisory
Agreement and the New Advisory Agreement for all other
costs and expenses of its operations, including fees of
the Directors who were not "affiliated persons" (as
defined in the 1940 Act) of the Adviser, CoreStates,
CoreStates Bank or any of their affiliated companies,
custodian expenses, legal fees, expenses of independent
accountants, costs of acquiring and disposing of
portfolio securities, brokerage fees, taxes, stock
exchange listing expenses, reports to shareholders,
proxy materials, and the cost of printing share
certificates and other expenses.
Annual Fund Operating Expenses. If the proposed New
Advisory Agreement had been in effect during the most
recent fiscal year, total Fund operating expenses would
have been the same as the expenses at the end of the
most recent fiscal year.
The Existing Advisory Agreement was approved by the
Shareholders of the Fund on June 14, 1990 for an initial
two year term in connection with the change of adviser
from First Pennsylvania Bank to the current adviser.
The proposed New Advisory Agreement will become
effective on the date of shareholder approval (or date
of consummation of the Merger, if it occurs subsequent
to the Annual Meeting) and continue in force for an
initial two year period. The Existing Advisory
Agreement and the New Advisory Agreement provide that
the respective Agreement will continue from year to year
so long as such continuance is specifically approved at
least annually by (1) the Board of Directors of the Fund
or (2) the vote of a majority of the outstanding voting
securities of the Fund; provided, however, that in
either event the continuance also is required to be
approved by the vote of a majority of the Directors of
the Fund who are not "interested persons" (as defined in
the Investment Company Act of 1940) of the Fund or the
Adviser cast in person at a meeting called for the
purpose of voting upon such approval. The Existing
Advisory Agreement and the New Advisory Agreement
provide for automatic termination of the respective
Agreement in the event of its assignment. In addition,
each Agreement is terminable at any time, without
penalty, by the Board of Directors of the Fund or by the
vote of a majority of the outstanding voting securities
of the Fund on 60 days' written notice to the Adviser or
by the Adviser on 60 days' written notice to the Fund.
If the Board's approval of the New Advisory Agreement is
ratified by either more than 50% of the Fund's
outstanding shares entitled to vote at the meeting or by
a two-thirds majority of the shares present at such
meeting if the holders of more than 50% of the
outstanding shares entitled to vote at the meeting are
present in person or by proxy, the New Advisory
Agreement will be approved. No arrangements have been
made in connection with the New Advisory Agreement with
respect to the composition of the Board of Directors of
the Fund or the Adviser.
The proposed New Advisory Agreement between the Fund and
the Adviser is Exhibit A of this proxy statement.
The Board of Directors recommends that shareholders vote
to approve the New Advisory Agreement.
ADDITIONAL INFORMATION
The Adviser has informed the Fund that the services
provided under the Existing Advisory Agreement and the
New Advisory Agreement may be performed by the Adviser
and its bank and non-bank affiliates without violation
of applicable statutes and regulations, including the
federal statute commonly known as the Glass-Steagall
Act. The Glass-Steagall Act, among other things,
relates to the activities of bank holding companies and
banks and their subsidiaries and affiliates in
connection with investment companies. Future changes in
either Federal or state statutes and regulations
relating to the permissible activities of banks or bank
holding companies and the subsidiaries or affiliates of
those entities, as well as further judicial or
administrative decisions or interpretations of present
and future statutes and regulations could prevent or
restrict the ability of the Adviser or any other
affiliates or subsidiaries of CoreStates to continue to
perform such services for the Fund. Depending upon the
nature of any changes in the services which could be
provided by the Adviser or CoreStates' other affiliates,
the Board of Directors of the Fund would review the
relationships with CoreStates' affiliates and
subsidiaries and consider taking all actions necessary
in the circumstances.
The Adviser has informed the Fund that the Fund's assets
will not be invested in stock or obligations of or
property acquired from CoreStates or its affiliates or
directors, officers or employees or other persons with
substantial connections with CoreStates or its
affiliates and that such assets will not be sold or
transferred, by loan or otherwise, to CoreStates or its
affiliates or persons connected with them. The
Directors of the Fund do not believe that these
restrictions impose any additional or substantial burden
on the Fund in connection with either its investment or
administrative management.
STOCKHOLDER PROPOSALS
Any stockholder desiring to present a proposal for
consideration at the 1997 Annual Meeting of Stockholders
of the Fund should submit such proposal in writing so
that it is received by the Fund at Centre Square West -
UM Floor, 15th and Market Streets, Philadelphia,
Pennsylvania 19101, by not later than November 26, 1996.
Robert J. DiDomenico, Assistant Secretary
March 25, 1996
<PAGE>
INVESTMENT ADVISORY AND SERVICES AGREEMENT
VESTAUR SECURITIES, INC.
THIS AGREEMENT, made as of the ____ day of April, 1996
by and between VESTAUR SECURITIES, INC., a Delaware
corporation, party of the first part (the "Company"),
and CoreStates Investment Advisers, Inc., an
investment adviser registered as such under the
Investment Advisers Act of 1940, party of the second
part (the "Advisers").
In consideration of the premises and of the mutual
agreements hereinafter set forth, the Company and the
Adviser agree as follows:
PART ONE
Definitions
(1) "The period of this Agreement" means the term of
this Agreement and any renewal or extension thereof,
or until any prior termination thereof.
(2) The "1940 Act" means the Investment Company Act of
1940, as amended.
(3) The "vote of the majority of the outstanding
voting securities" of the Company has the meaning
contained in the 1940 Act.
(4) The terms "interested person", "affiliated person"
and "assignment" have the meanings contained in the
1940 Act.
(5) The terms "affiliated company" and "affiliated
companies" means with respect, to the Adviser,
CoreStates Financial Corp and any corporation
controlling, controlled by or under common control
with CoreStates Financial Corp.
(6) The term "interim period" means the period
commencing March 6, 1990 and ending on the date that
this agreement shall have been approved by the vote of
the majority of the outstanding voting securities of
the Company.
PART TWO
Investment Advice and Other Services
(1) The Company hereby retains the Adviser, and the
Adviser hereby agrees, for the period of this
Agreement and under the terms and conditions
hereinafter set forth, to provide or to cause to be
provided administration of the day-to-day investment
operations of the Company, to furnish the Company
continuously with investment planning to provide
investment advice with regard to the Company's
portfolio, to prepare and make available to the
Company all necessary research and statistical data in
connection therewith and to supervise the purchase and
sale and the acquisition and disposition of specific
securities by the Company. The Adviser shall keep or
cause its affiliated companies to keep the books and
financial records of the Company, and on behalf of the
Company shall compute the net asset value of the
Company's shares (in accordance with any instructions
of the Board of Directors of the Company (the
"Board")) at such times as the Board may direct. The
Adviser shall furnish, to the Company and to such
other persons as the Company may direct, any
statements with respect to the net asset value per
share, at such times, and in such forms, as the
Company may reasonably prescribe. The Adviser shall
maintain a continuous record of all the investments
and securities which comprise the Company's portfolio
and shall furnish to the Board a resume of such
portfolio, at such times, and in such forms, as the
Board may reasonably prescribe. The Adviser shall
also render to the Board a report on all matters
pertaining to the services provided by the Adviser
hereunder, at such times, and in such forms, as the
Board may reasonably prescribe. The Adviser shall
perform such other services as are reasonably
incidental to the foregoing duties.
The Adviser shall furnish the Company or cause its
affiliated companies to furnish the Company with the
services of a person or persons satisfactory to the
Company whose duties shall include (except for the
legal and auditing aspects thereof) the supervision of
the Company's financial statements and reports, the
preparation of reports to shareholders and others, and
any statements or reports required by regulatory
authorities of the United States, or states thereof in
which the Company has qualified its shares for sale.
In addition, the Adviser shall furnish or cause its
affiliated companies to furnish to the Company such
office space and facilities, including, without
limitation, stenographic, telephone, telegraphic,
mailing, and other facilities as may be required for
the management of the affairs and business of the
Company. It is the intent of this Agreement that the
Adviser shall supply or, in the case of noninvestment
advisory services, cause its affiliated companies to
supply, such services as are necessary or desirable
and proper for the continuous operation of the
Company. However, the Adviser shall not be required
to perform or to cause the performance of (a) those
services customarily performed by the members of the
Board; (b) those services customarily performed by the
officers of the Company (except to the extent
requested, those of the Secretary of the Company); or
(c) those services customarily performed by the
independent accountant, broker, dealer or independent
legal counsel.
(2) The Adviser shall arrange, if requested by the
Company, for officers and directors of the Adviser or
its affiliated companies to serve without compensation
from the Company as directors or officers of the
Company, if duly elected to such positions by the
shareholders or directors of the Company, or as
employees of the Company. In addition, the Adviser
will bear the cost of fees, salaries or other
remuneration of directors and officers of the Company
who also serve as directors, officers, employees or
special consultants to the Adviser or any of its
affiliated companies.
(3) The Adviser covenants and agrees that in making
purchases, sales, acquisitions and dispositions of
specific securities on behalf of the Company, it shall
at all times be governed by the Company's investment
objectives and policies as delineated and limited by
the statements contained in the various documents
filed with the Securities and Exchange Commission (the
"Commission") as such documents may from time to time
be amended (whether or not such amendments are filed
with the Commission). The Company agrees to supply
the Adviser with copies of all documents filed with
the Commission, together with any amendments thereto
(whether or not such are filed with the Commission)
(4) The Adviser hereby covenants and agrees that it
will make no separate charge to any shareholders of
his individual account for any service rendered to
said shareholder or the Company by the Adviser or its
affiliated companies hereunder unless such charges for
special services are specifically approved by the
Board, including a majority of the directors who are
not "interested persons" of the Adviser. No special
charge will be levied retroactively or without
appropriate notice to affected shareholders.
(5) The Adviser hereby acknowledges that all records
necessary in the operation of the Company, including
records pertaining to its shareholders and
investments, are the sole and exclusive property of
the Company, and in the event that a transfer of
management or investment advisory services to someone
other than the Adviser should even occur, the Adviser
will promptly, and at its own cost, take all steps
necessary to segregate such records and deliver them
to the Company.
(6) Subject to approval of this Agreement by the vote
of a majority of the outstanding voting securities of
the Company, the Adviser hereby covenants and agrees
to cause payment or reimbursement to the Company of
all fees and expenses of the Company's Transfer Agent,
Dividend Disbursing Agent, Registrar and the Agent or
Agents under the Company's Automatic Dividend
Investment Plan.
PART THREE
Compensation to Investment Adviser
(1) The Company covenants and agrees to pay to the
Adviser, and the Adviser covenants and agrees to
accept from the Company in full compensation, and as
the only compensation to which the Adviser shall be
entitled to receive under this Agreement, for all
investment advice, material and other services
furnished, and for all facilities and equipment and
for all expenses paid or reimbursed by the Adviser
hereunder, a monthly fee at an annual rate of 0.5% of
the average monthly net asset value of the Company,
plus 2.5% of the net amount on interest and dividend
income after deducting interest on borrowed funds (the
"Advisory Fee"). The Advisory Fee shall be computed
as of the close of business on the last business day
of each month. The Advisory Fee shall be prorated for
any fraction of a month at the commencement or
termination of this Agreement.
(2) Net asset value of the Company for purposes of
computing the Advisory Fee will be determined as of
the close of trading on the last business day in each
month on which the New York Stock Exchange is open,
and will be computed pursuant to the provisions of the
Company's Bylaws and any currently effective
Prospectus of the Company.
(3) The Advisory Fee provided for hereunder shall be
paid in cash by the Company to the Adviser within ten
(10) business days after the last day of each month
and such Advisory Fee shall be adjusted, if necessary,
at the time of the payment due in the last month in
the fiscal year of the Company. Any overpayment of
the Advisory Fee shall promptly be refunded to the
Company. Notwithstanding the foregoing provisions of
Part Three of this Agreement, the Advisory Fee during
the interim period shall be accrued on the books of
the Company and paid only in accordance with the
provisions of paragraph 2 of Part Thirteen of this
Agreement.
PART FOUR
Allocation of Expenses
(1) Subject to approval of this Agreement by a
majority of the outstanding voting securities of the
Company, the Adviser agrees to cause payment or
reimbursement to the Company for all its expenses
during the period of this Agreement except:
(a) fees payable to the Adviser for its services under
this Agreement;
(b) all taxes of any kind paid by the Company;
(c) all custodian or trustee fees, costs and
expenses;
(d) costs and expenses in connection with the auditing
and certification of the records and accounts of the
Company by the Company's Independent certified public
accountants;
(e) brokerage commissions and charges including
transfer taxes and similar taxes, incurred in
acquiring and disposing of portfolio securities;
(f) costs of obtaining and printing stock
certificates, reports to shareholders, notices,
proxies, proxy statements, and also the cost of
envelopes in which such are to be mailed; provided,
however, that the Adviser shall receive no
compensation for the use of its facilities or
personnel in connection with the preparation and
distribution of reports to shareholders or the
preparation and distribution of proxy material for the
Company, and the Adviser shall pay the fees of its
counsel for services rendered in such connection;
(g) postage on all communications, notices and
statements to brokers, dealers, and the Company's
shareholders;
(h) fees paid to directors who are not "affiliated
persons" of the Adviser;
(i) all fees and expenses of independent legal counsel
for the Company;
(j) all stock exchange listing expenses;
(k) the cost of insurance authorized by the Board or
required of the Company by law; and
(1) expenses which from time to time may be designated
as "extraordinary" by a resolution adopted by a
majority of the directors of the Company who are not
"interested persons" of the Adviser.
(2) Notwithstanding any other provisions of this
Agreement, including the provisions of paragraph 6 of
Part Two and paragraph 1 of Part four hereof, the
Adviser shall not be responsible for payment or
reimbursement of any expenses incurred by the Company
during the interim period unless and until Advisory
Fees for such period shall have been paid to the
Adviser.
(3) To the extent necessary to comply with State
securities regulations, the Adviser shall reimburse
the Company for all expenses set forth in Part Three
and in paragraph (1) of this Part Four except
interest, taxes, brokerage fees, and, where permitted
by law and in those circumstances the Board determines
appropriate, those "extraordinary" expenses determined
pursuant to subparagraph (1) of paragraph (1) of this
Four, incurred each year by the Company in excess of
the total of 1 1/2% of the first $30,000,000 of the
Company's average monthly net asset value and in
excess of 1% of the Company's average monthly net
asset value over $30,000,000. Reductions in the
Advisory Fee shall be made, if appropriate at the time
of each monthly payment on an estimated basis and an
adjustment to reflect the reduction on an annual basis
shall be made, if necessary, in the Advisory Fee
payable with respect to the last month in any fiscal
year of the Company. The Adviser shall promptly
refund any amount theretofore paid in excess of the
Advisory Fee determined to be due for such year.
PART FIVE
Multiple Capacities
Nothing contained in this Agreement shall be deemed to
prohibit the Adviser from acting, and being separately
compensated for acting, in one or more capacities on
behalf of the Company. Whenever the Adviser shall be
required to act in multiple capacities on behalf of
the Company, either under this Agreement or by virtue
of this and any other Agreement between the Adviser
and the Company, the Adviser shall maintain the
appropriate separate accounts and records for each
such capacity. The Company understands that the
Adviser or its parent, CoreStates Financial Corp
including any of its subsidiaries or affiliates, may
act in one or more capacities on behalf of other
investment companies and customers and the Company
consents thereto. While information and
recommendations supplied to the Company shall, in the
Adviser's judgment, be appropriate under the
circumstances and in light of the investment
objectives and policies of the Company, they may be
different from the information and recommendations
supplied to other investment companies and customers.
The Company shall be entitled to equitable treatment
under the circumstances in receiving information,
recommendations and any other services, but the
Company recognizes that it is not entitled to receive
preferential treatment as compared with the treatment
given to any other investment company or customer.
PART SIX
Inconsistent Position
(1) The Adviser agrees that no officer or director of
the Adviser will deal for or on behalf of the Company
with himself as principal or agent, or with any
corporation, partnership or other person in which he
may have a financial interest, except that this shall
not prohibit:
(a) Officers and directors of the Adviser from having
a financial interest in the Company or in the Adviser.
(b) The purchase of securities for the Company, or the
sale of securities owned by the Company, through a
security broker or dealer, one or more of whose
partners, officers or directors is an officer or a
director of the Adviser, provided such transactions
are handled in the capacity of broker only and
provided commissions charged do not exceed customary
brokerage charges for such services.
(2) if any occasion should arise in which the Adviser
or any of its officers or directors advises persons
concerning the shares of the Company, the Adviser or
such officer or director will act solely on its, hers
or his own behalf and not in any way on behalf of the
Company.
(3) The Adviser agrees that, except as herein
otherwise expressly provided, neither it nor any of
its officers or directors shall at any time during the
period of this Agreement make, accept or receive,
directly or indirectly, any fees, profits or
emoluments of any character in connection with the
purchase or sale of securities (except securities
issued by the Company) or other assets by or for the
Company.
(4) Notwithstanding any other provisions of this
Agreement, nothing herein is to be construed to
prevent the Adviser, subject to approval of the Board
of Directors of the Company and compliance with
applicable laws and regulations, to serve as custodian
of the Company's assets or as its transfer or dividend
disbursing agent.
PART SEVEN
Name of the Company
The Company may use the name "Vestaur" or any name
derived from or similar thereto only for so long as
this Agreement or any extension, renewal or amendment
hereof remains in effect. At such time as such an
agreement shall no longer be in effect, the Company
will (to the extent that it lawfully can) cease to use
such a name or any other name indicating that it is
advised by or otherwise connected with the Adviser, or
an affiliate of the Adviser.
PART EIGHT
Limitation of, Liability of Adviser
The Adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by
the Company in connection with the matters to which
this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on
the Adviser's part in the performance of its duties
under this Agreement. Any person, even though also
employed by the Adviser, who may be or become an
employee of and paid by the Company shall be deemed,
when acting within the scope of his employment by the
Company, to be acting in such employment solely for
the Company and not as the Adviser's employee or
agent.
PART NINE
Amendment
No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an
instrument in writing signed by the party against
which enforcement of the change, waiver, discharge or
termination is sought.
PART TEN
Effectiveness, Renewal and Termination
(1) This Agreement shall become effective upon the
date first written above and, subject to its approval
by a vote of the majority of the outstanding voting
securities of the Company, shall remain in full force
and effect, subject to prior termination as provided
herein, for a period of two years from the date of
such approval. This Agreement shall thereafter
continue in full force and effect from year to year,
subject to prior termination as provided herein, but
only so long as its continuance shall be specifically
approved at least annually (1) by the Board or by a
vote of the majority of the outstanding voting
securities of the Company, and (2) by the vote of a
majority of the directors who are not parties to this
Agreement or "interested persons" of any such party,
cast in person at a meeting called for the purpose of
voting on such approval.
(2) This Agreement may be terminated by either the
Company or the Adviser at any time by giving the other
party sixty days' written notice of such intention to
terminate; provided that any such termination shall be
made without the payment of any penalty, and provided
further that such termination may be effected either
by the Board or by a vote of the majority of the
outstanding voting securities of the Company.
(3) This Agreement shall terminate in the event of its
"assignment".
PART ELEVEN
Nature of Relationship
The Company and the Adviser are not partners or joint
venturers with each other and nothing herein shall be
construed so as to make them such partners or joint
venturers or impose any liability as such on either of
them. The Adviser shall be deemed to be an
independent contractor and, except as expressly
provided or authorized in this Agreement, as amended,
shall have no authority to act for or represent the
Company.
PART TWELVE
Notice
Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid,
to the party to this Agreement entitled to receive
such at such address as such other party may designate
in writing mailed for receipt of such notice.
PART THIRTEEN
Miscellaneous
(1) Neither this Agreement nor any transaction made
pursuant hereto shall be invalidated or in any way
affected by the fact that directors, officers, agents
and/or shareholders of the Company are or may be
interested in the Adviser, or any successor or
assignee thereof, as directors, officers, shareholders
or otherwise; that directors, officers, shareholders
or agents of the Adviser are or may be interested in
the Company as directors, officers shareholders or
otherwise or that the Adviser or any successor or
assignee, is or may be interested in the Company as
shareholders or otherwise provided, however, that
neither the Adviser nor any officer or director of the
Adviser or of the Company shall sell to or buy from
the Company any property or security other than a
security issued by the Company, except in accordance
with an applicable order or exemptive rule of the
Commission.
(2) This Agreement shall be subject to all applicable
provisions of law, including, without limitation, the
applicable provisions of the 1940 Act and the laws and
regulations governing national banks. To the extent
that any provisions herein contained conflict with any
such applicable provisions of law and regulations, the
latter shall control.
(3) This Agreement is executed and delivered in the
Commonwealth of Pennsylvania and shall be construed in
accordance with the laws and decisions of said
Commonwealth.
(4) The captions in this Agreement are included for
convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise
affect their construction or effect.
(5) This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an
original but all of which constitute one and the same
instrument.
IN WITNESS WHEREOF, the Company and the Adviser have
each caused this Agreement to be executed in duplicate
in its name and on its behalf by its undersigned duly
authorized officers, or on the day and year first
above written.
ATTEST:
VESTAUR SECURITIES, INC.
_____________ By: ____________________
Chairman
ATTEST:
_____________ CORESTATES INVESTMENT
ADVISERS, INC.
By:_________________
Chairman
PROXY
VESTAUR SECURITIES, INC.
This Proxy is solicited on Behalf of the Board of
Directors of the Corporation for the Annual Meeting of
Stockholders, April 22, 1996
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
hereby constitutes and appoints Messrs. Robert J.
DiDomenico and Karen G. Bater or either of them, with
full power of substitution, as attorneys and proxies
to appear and vote all of the shares of stock standing
in the name of the undersigned at the annual meeting
of stockholders of Vestaur Securities, Inc. to be held
in Conference Room #3, at ARAMARK, 41st Floor, 1500
Market Street, Centre Square West Tower, Philadelphia,
PA 19102 on the 22nd day of April, 1996 at 11:00
o'clock a.m., local time, and at any and all
adjournments thereof, and the undersigned hereby
instructs said attorneys to vote:
(Continued, and to be signed on other side)
<PAGE>
Please mark your
[X] votes as in this
example.
The shares represented by this proxy will be voted as
specified in the following items 1, 2 and 3 but if no
choice is specified, they will be voted For the
election of the 8 persons named in the proxy statement
as Directors, For ratification of the appointment of
the auditors named and For approval of the Investment
Advisory Agreement.
1. ELECTION OF DIRECTORS
FOR all nominees [ ]
(except as marked
in the contrary
below")
WITHHOLD [ ]
AUTHORITY
to vote for
all nominees
Nominees: Dr. Donald C. Carroll Paul B. Fay, Jr.
Robert F. Gurnee John C. Jansing
James S. Morgan Philip R. Reynolds
Marciarose Shestack Mark E. Stalnecker
2. The ratification of the selection of
Deloitte & Touche as auditors for
the period December 1, 1995
through November 30, 1996.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. The approval of the Investment
Advisory Agreement between
Vestaur Securities, Inc. and
CoreStates Investment Advisers, Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Upon any other business which may properly come
before the meeting or any adjournment thereof. The
management knows of no other such business.
(*INSTRUCTION: To withhold authority to vote for any
individual nominee, write the name of the nominee(s)
below.)
SIGNATURE (S) __________________ DATE _________, 1996.
(Signature of all joint owners is required.
Fiduciaries please indicate your full title.)
If any other matters properly come before the meeting
about which the proxy holders were not aware prior to
the time of the solicitation, authorization is given
the proxy holders to vote in accordance with the views
of the management thereto. The management is not
aware of any such matters.
PLEASE SIGN AND RETURN THIS PROXY CARD IN THE ENCLOSED
ENVELOPE.
<PAGE>
STRADLEY, RONON, STEVENS & YOUNG, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103-7098
(215) 564-8000
Fax: (215) 564-8120
Direct Dial:
(215) 564-8101
Filing Desk
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Vestaur Securities, Inc.
File Nos. 811-2320 and 2-47081
Preliminary Proxy Material
Gentlemen:
Enclosed is preliminary proxy material and the form of
proxy for the 1996 Annual Meeting of Stockholders of
Vestaur Securities, Inc.
The $125.00 filing fee was paid by wire transfer to
the Commission's Mellon lockbox.
The registrant is filing preliminary proxy material
because shareholder votes will be solicited for the
approval of the registrant's investment advisory
agreement, which will terminate upon the consummation
of a pending merger of the parent corporation of the
investment adviser to the registrant.
Questions related to this filing should be directed to
me at the telephone number above.
Very truly yours,
Audrey C. Talley
ACT/pj
Enclosure
