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
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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):
[ ] $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:
...........................................
[X ] 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.:
..............................................
3) Filing Party:
................................................
4) Date Filed:
...............................................
<PAGE>
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
stockholders 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, LLP 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. ("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
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, LLP 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 25,237.466 shares
(0.379%) 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:
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
- ------- ------------ -------- ------------ --------
#Dr. Donald C. 1972 -0- -0-
Carroll
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 21,524.626 0.324
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 200.000 0.003
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. 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 1,000.000 0.015
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.
- -----------------------------------------------------
# Member of Audit Committee<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
- ------- ------------ -------- ------------ --------
*James S. Morgan 1978 1,000.000(1) 0.015
Woodside-282
1515 The Fairway
Rydal, PA 19046
(79) Private Investor; Vice President and Chief
Investment Officer-Equities, 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 889.456 0.013
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 523.384 0.008
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).
- -----------------------------------------------------
* Interested Person
** Member of Executive Committee
(1) Does not include 1,000 shares held by a family
member of Mr. Morgan as to which he disclaims
beneficial ownership.
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
- ------- ------------ -------- ------------ --------
*Mark E. Stalnecker 1993 100.000 0.001
**Centre Square West
Philadelphia, PA
19101
(44) Chairman of Vestaur Securities since 1993.
Executive Vice President, CoreStates Bank, N.A. and
CoreStates Financial Corp. since 1988. Chief Trust
and Investment Services Officer, CoreStates Financial
Corp. 1990- 1995. Chairman and President, CoreStates
Investment Advisers, Inc., Director, CoreStates Bank
of Delaware, N.A. and Philadelphia International
Investment Corp. Formerly, Director, CoreStates Bank,
N.A.
- -----------------------------------------------------
* Interested Person
** Member of Executive Committee
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 6,254
shares of Common Stock of CoreStates. During the last
full fiscal year, Dr. Carroll attended fewer than 75
percent of the meetings of the Board and the Board
committees on which he served.
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) 12,463.000 106,540.000
Chairman of the Board
since 1993.
Executive Vice President, CoreStates Bank, N.A. and
CoreStates Financial Corp. since 1988. Chief Trust
and Investment Services Officer, CoreStates Financial
Corp. 1990-1995. Chairman and President, CoreStates
Investment Advisers, Inc., Director, CoreStates Bank
of Delaware, N.A. and Philadelphia International
Investment Corp.
Dung Vukhac (52) 3,506.623 38,936.000
President since 1995.
Director and Senior Vice President, Fixed Income
Services, CoreStates Investment Advisers, Inc. since
1987; Previously, Securities Analyst, Economist, Vice
President and Fixed Income Manager, Trust Department,
Philadelphia National Bank.
Michael F. Melloy (58) 1,700.000 -0-
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) 541.620 -0-
Assistant Vice President
since 1992.
Vice President and Senior Portfolio Manager,
CoreStates Investment Advisers, Inc. since 1986.
Robert J. DiDomenico (39), 719.210 -0-
Secretary and Treasurer
since 1995.
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 138,714,797 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 $54,300 and
expenses paid were $9,166.96 (see table below). 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.
Aggregate Pension or Total
Compensation retirement Compensation
Name from Benefits Estimated From Registrant
of Registrant Accrued Annual and Fund Complex
Person for fiscal as Part Benefits Paid to Directors
and year end of Fund Upon for the fiscal
Position 11-30-95 Expenses Retirement year end 11-30-95
- -------- ---------- ----------- ------------ ------------------
Donald C. $7,200 -0- -0- $7,200
Carroll
Director
Paul B. $7,800 -0- -0- $7,800
Fay, Jr.
Director
Robert F. $7,800 -0- -0- $7,800
Gurnee
Director
John C. $8,100 -0- -0- $8,100
Jansing, Sr.
Director
James S. $7,800 -0- -0- $7,800
Morgan
Director
Philip R. $7,800 -0- -0- $7,800
Reynolds
Director
Marciarose $7,800 -0- -0- $7,800
Shestack
Director
Mark E. -0- -0- -0- -0-
Stalnecker
Director
<PAGE>
II. RATIFICATION 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, LLP 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, LLP 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 (commencing with
fiscal year 1996) 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 CoreStates
Investment Advisers, Inc. (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 will 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, the investment
advisory fee 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. The Fund
expects to comply with Section 15(f).
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, Managing
Director of the Adviser; JoAnne T. Fredericks, Managing Director
and Treasurer of the Adviser; Daniel Aboyan and Richard J.
Lindsay. 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.
As of December 31, 1995, CoreStates Bank, N.A. manages the
investments of thirty-one common trust funds having assets of
more than $3.1 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 $2.2
billion. In connection with the Merger, certain registered
investment companies managed by Meridian will reorganize with and
consequently, become portfolios of CoreFund, Inc.
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; Nelson G.
Harris, Esq., Retired Chairman, Chairman of the Executive
Committee and Director, Tasty Baking Company; Carlton E. Hughes,
Chairman and Director, Stewart-Amos Steel, Inc.; Ernest E. Jones,
Executive Director, Greater Philadelphia Urban Affairs Coalition;
Herbert Lotman, Chairman and Chief Executive Officer, Keystone
Foods Corporation; George V. Lynett, Esq., Publisher, The
Scranton Times; Patricia A. McFate, Senior Scientist and Program
Director, Science Applications International Corporation; John A.
Miller, Retired Chairman, Chairman of the Executive Committee,
Provident Mutual Life Insurance Company of Philadelphia; Marlin
Miller, Jr., President, Chief Executive Officer and Director,
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 and Director, Scott Paper Company; Raymond W. Smith,
Chairman, Chief Executive Officer and Director, Bell Atlantic
Corporation; Harold A. Sorgenti, Chairman, Freedom Chemical
Company; and Peter S. Strawbridge, President and Director,
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.
Christopher J. Carey is Senior Vice President and Corporate
Comptroller 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%. Upon effectiveness
of the Merger, the CoreStates Board will consist of fifteen board
members, of which ten will be from the current directors of
CoreStates and five will be from Meridian.
Mark E. Stalnecker, Chairman of the Fund, is a Director of the
Adviser, with direct responsibility for the organization's
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 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 the Fund's compliance with
governing laws and 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 pl`us 2.5% of
the net amount of interest and dividend income after deducting
interest on borrowed funds. In computing the advisory fee, the
Adviser first multiplies the average monthly net asset value
times 0.5%. The Adviser then determines investment income, net
of interest paid on borrowings. In recent years, there have been
no borrowings by the Fund and no interest paid thereon to deduct
from investment income. If there were borrowings, the Adviser
would deduct the interest paid on borrowings from the Fund's
investment income and then multiply that remainder times 2.5%.
The product of that computation would be added to the product of
the first computation based on average monthly net assets.
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. As of February 29, 1996, the Fund had net
assets of $98.6 million. 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. The Existing
Advisory Agreement and the New Advisory Agreement provide that
the Adviser will not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund 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.
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. Mere submission of a stockholder proposal does not
guarantee inclusion of the proposal in the proxy statement or
presentation of the proposal at the Annual Meeting since such
inclusion and presentation are subject to compliance with certain
federal regulations.
Robert J. DiDomenico, Secretary
March 25, 1996
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 enti-
tled 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
<PAGE>
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 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
to 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 LLP 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.
- ------------------------------------------------------
FOLD AND DETACH HERE
VESTAUR SECURITIES, INC.
1996 Annual Meeting of Stockholders
April 22, 1996
11:00 a.m.
ARAMARK
Conference Room #3 - 41st Floor
1500 Market Street
Centre Square West Tower
Philadelphia, PA 19102
AGENDA
1. Election of eight Directors to serve until the
next annual meeting and until their successors
shall have been elected and qualified.
2. Ratification of 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. The approval of the Investment Advisory Agreement
between Vestaur Securities, Inc. and CoreStates
Investment Advisers, Inc.
4. Transaction of such other business as may properly
be brought before the meeting.
5. Balloting.
6. Management's Report on the Fund.
7. General question and answer period.
8. Report of Judges of Election.
9. Adjournment.
