FIRST UNION CORP, DEF 14A, 1994-03-10

FIRST UNION CORP
DEF 14A, 1994-03-10
NATIONAL COMMERCIAL BANKS

Previous: STAR BANC CORP /OH/, DEF 14A, 1994-03-10

Next: FIRST UNION CORP, S-4, 1994-03-10

<PAGE>
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:
( ) Preliminary Proxy Statement
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
First Union Corporation
(Name of Registrant as Specified In Its Charter)
Kent S. Hathaway
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (Check the appropriate box):
( ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
( ) $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 0-11:1
4) Proposed maximum aggregate value of transaction:
1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
( ) 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>

(FUNB logo appears here)
March 10, 1994
Dear Stockholder:
On behalf of the Board of Directors, I am pleased to extend to you an
invitation to attend the Annual Meeting of Stockholders of First Union
Corporation (the Corporation) to be held in Charlotte, North Carolina, on
Tuesday, April 19, 1994, beginning at 9:30 a.m., E.D.S.T.
The notice of meeting and proxy statement which appear on the following pages
contain information about the matters which are to be considered at the meeting.
During the meeting we will also review operating results for the past year and
present other information concerning the Corporation and its subsidiaries. The
meeting should be interesting and informative and we hope you will be able to
attend.
In order to ensure that your shares are voted at the meeting, please complete,
date, sign and return the enclosed proxy in the enclosed postage-paid envelope
at your earliest convenience. Every stockholder's vote is important, whether you
own a few shares or many.
Sincerely yours,
(Signature of Edward E. Crutchfield, Jr.)
Edward E. Crutchfield, Jr.
Chairman and Chief Executive Officer
First Union Corporation, One First Union Center, Charlotte, North Carolina
28288-0013

<PAGE>
First Union Corporation
One First Union Center, Charlotte, North Carolina 28288-0013
NOTICE OF ANNUAL MEETING
TO BE HELD ON APRIL 19, 1994
March 10, 1994
To the Stockholders:
The Annual Meeting of Stockholders (the Meeting) of First Union Corporation (the
Corporation) will be held in the Auditorium, 12th floor, Two First Union Center,
Charlotte, North Carolina, on Tuesday, April 19, 1994, at 9:30 a.m., E.D.S.T.,
for the purpose of considering and acting on the following matters:
1. A proposal to elect the nine nominees named in the attached proxy
statement as directors of the Corporation to serve as Class II directors
with terms expiring at the 1997 Annual Meeting of Stockholders, and
until their successors are duly elected and qualified;
2. A proposal to approve the Corporation's 1994 Employee Stock Purchase
Plan;
3. A proposal to approve certain amendments to the Corporation's 1992
Master Stock Compensation Plan intended to preserve the Corporation's
federal income tax deduction with respect to certain compensation
payable under such Plan;
4. A proposal to approve certain amendments to the Corporation's Management
Incentive Plan intended to preserve the Corporation's federal income tax
deduction with respect to certain compensation payable under such Plan;
5. A proposal to approve certain amendments to the Corporation's Management
Long-Term Cash Incentive Plan intended to preserve the Corporation's
federal income tax deduction with respect to certain compensation
payable under such Plan;
6. A proposal to ratify the appointment of KPMG Peat Marwick as auditors of
the Corporation for the year 1994; and
7. Such other business as may properly come before the Meeting or any
adjournments thereof.
Only stockholders of record on the books of the Corporation at the close of
business on March 1, 1994, are entitled to notice of and to vote at the Meeting.
(Signature of Edward E. Crutchfield, Jr.)
Edward E. Crutchfield, Jr.
Chairman and Chief Executive Officer
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE
TO ENSURE THAT YOUR SHARES ARE VOTED AT THE MEETING. YOUR VOTE IS IMPORTANT,
WHETHER YOU OWN A FEW SHARES OR MANY.

<PAGE>
First Union Corporation
One First Union Center, Charlotte, North Carolina 28288-0013
PROXY STATEMENT
General
The enclosed proxy is solicited on behalf of the Board of Directors of
First Union Corporation (the Corporation) in connection with the Annual Meeting
of Stockholders of the Corporation (the Meeting) to be held in the Auditorium,
12th Floor, Two First Union Center, Charlotte, North Carolina, on Tuesday, April
19, 1994, at 9:30 a.m., E.D.S.T. The accompanying form of proxy is for use at
the Meeting if a stockholder does not attend the Meeting in person or wishes to
have his shares voted by proxy even if he attends the Meeting. The proxy may be
revoked by the person giving it at any time before it is exercised, by such
person (i) giving written notice to the Secretary of the Corporation, (ii)
submitting a proxy having a later date, or (iii) appearing at the Meeting and
electing to vote in person. All shares represented by valid proxies received
pursuant to this solicitation and not revoked before they are exercised will be
voted in the manner specified therein. If no specification is made, proxies will
be voted in favor of approval of Proposals 1 through 6 described below. This
proxy statement and the enclosed form of proxy are being first mailed to the
Corporation's stockholders on or about March 10, 1994.
The only class of voting securities of the Corporation is its Common Stock,
$3.33 1/3 par value per share (the Common Stock). There were 170,414,914 shares
of Common Stock issued and outstanding at the close of business on March 1,
1994, the record date for stockholders entitled to receive notice of and to vote
at the Meeting. A majority of the shares entitled to vote at the Meeting,
represented at the Meeting in person or by proxy, will constitute a quorum. Each
share is entitled to one vote on all matters properly brought before the
Meeting.
The Corporation will bear the cost of preparing this proxy statement and of
soliciting proxies in the enclosed form. Proxies may be solicited by employees
of the Corporation and its subsidiaries, either personally, by letter or by
telephone. Such employees will not be specifically compensated for soliciting
such proxies. In addition, the Corporation has retained Georgeson & Company,
Inc. as proxy solicitors, to provide certain services in connection with the
solicitation of proxies. The fee for these services is $7,500, plus expenses.
1

<PAGE>
PROPOSAL 1. ELECTION OF DIRECTORS
General Information and Nominees
The Corporation's Articles of Incorporation (as amended, the Articles)
provide that the Board of Directors shall be divided into three classes, each as
nearly equal in number to the other as possible, and that at each annual meeting
of stockholders, the stockholders shall elect the members of one of the three
classes to three-year terms of office. The Articles also provide that the number
of directors shall be determined from time to time by a majority of the
directors then in office, but shall not be less than nine nor more than 30. The
number of directors is currently fixed at 26. As discussed below, for purposes
of the election of directors at the Meeting the number of directors has been
fixed at 25.
The terms of office of the ten current directors serving in Class II will
expire at the Meeting, the terms of office of the eight current directors
serving in Class III will expire at the 1995 Annual Meeting of Stockholders, and
the terms of office of the eight current directors serving in Class I will
expire at the 1996 Annual Meeting of Stockholders, in each case until their
successors are duly elected and qualified.
James D. McComas, who was elected to the Board at last year's annual
meeting of stockholders, retired as a Class II director on January 1, 1994, due
to illness. Warner N. Dalhouse, currently serving as a director in Class II, is
not standing for reelection. At a meeting of the directors in December 1993,
William H. Goodwin, Jr. and Randolph N. Reynolds were elected directors of the
Corporation to serve as Class II directors. Following the Meeting there will be
eight directors in Class I, nine directors in Class II and eight directors in
Class III.
Unless a director reaches retirement age during his term in office (i.e.,
age 70 as a result of an amendment to the retirement policy adopted in February
1994), each director holds office until the annual meeting of stockholders at
which his term expires and until his successor has been duly elected and
qualified. Directors who reach retirement age during their term in office are to
retire from the Board effective with the annual meeting of stockholders next
following their 70th birthday, subject to the Board authorizing that such
retirement be deferred on a year-to-year basis.
As indicated below, Messrs. Davis, Dowd, Goodwin, Hemby, Laughery, Lovett,
Reynolds, Uible and Younger are being nominated to serve as Class II directors
with terms expiring at the 1997 Annual Meeting of Stockholders, and until their
successors are duly elected and qualified.
Directors of the Corporation will be elected by a plurality of the votes
cast. Shares cannot be voted for a greater number of persons than the number of
nominees named herein. Should any nominee be unavailable for election by reason
of death or other unexpected occurrence, the enclosed proxy may be voted with
discretionary authority in connection with the nomination by the Board of
Directors and election of any substitute nominee, or, alternatively, the Board
may reduce the number of directors to be elected at the Meeting.
PROXIES, UNLESS INDICATED TO THE CONTRARY, WILL BE VOTED FOR THE ELECTION
OF THE NINE NOMINEES NAMED BELOW AS CLASS II DIRECTORS TO SERVE FOR TERMS
EXPIRING AT THE 1997 ANNUAL MEETING OF STOCKHOLDERS, AND UNTIL THEIR SUCCESSORS
ARE DULY ELECTED AND QUALIFIED.
2

<PAGE>
Listed below are the names of the nine nominees to serve as Class II
directors, and the 16 incumbent directors who will be continuing in office
following the Meeting, together with: their ages; their principal occupations
during the past five years; any other directorships they hold with companies
having securities registered under the Securities Exchange Act of 1934; the
years during which their current consecutive terms as directors of the
Corporation first commenced; and the number of shares of Common Stock they
beneficially owned as of January 31, 1994. As of such date, no director
beneficially owned more than 1% of the outstanding shares of Common Stock. See
footnote (4) following the list of directors for information relating to
ownership of the Corporation's Series 1990 Cumulative Perpetual Adjustable Rate
Preferred Stock, no-par value (the Series 1990 Preferred Stock).
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Shares
and Certain Other Directorships Since Owned (1)
CLASS II NOMINEES FOR ELECTION TO TERMS EXPIRING IN 1997
<S> <C> <C> <C>
(Photo) ROBERT D. DAVIS (62). Chairman, D.D.I., Inc., Jacksonville, 1985 1,072,500
Florida, investments. Also, Vice Chairman, Winn-Dixie Stores,
Inc., Jacksonville, Florida, a retail supermarket chain, January
1988 to June 1990. Director, American Heritage Life Investment
Corporation, Stein Mart, Inc. and Winn-Dixie Stores, Inc. (1)(4)
(Photo) RODDEY DOWD, SR. (61). Chairman, Charlotte Pipe and Foundry 1988 8,277
Company, Charlotte, North Carolina, a manufacturer of pipe and
fittings. Director, Ruddick Corporation.
(Photo) WILLIAM H. GOODWIN, JR. (53). Chairman, AMF Companies, Richmond, 1993*
Virginia, a manufacturer of sports and other equipment. Director,
Basset Furniture Industries, Incorporated. (2)
(Photo) TORRENCE E. HEMBY, JR. (68). President, Beverly Crest 1987 12,000
Corporation, Charlotte, N.C., real estate development. (1)(3)
</TABLE>

* Elected a director by the Board of Directors of the Corporation at a meeting
in December 1993.
3

<PAGE>
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Shares
and Certain Other Directorships Since Owned (1)
<S> <C> <C> <C>
(Photo) JACK A. LAUGHERY (59). Chairman, Hardee's Food Systems, Inc., 1978 5,617
Rocky Mount, North Carolina, a fast food chain, since January
1990. Chairman and Chief Executive Officer, Imasco U.S.A., the
parent corporation of Hardee's Food Systems, Inc., prior to
January 1990. Director, Imasco, Ltd. and Papa John's
International Inc.
(Photo) RADFORD D. LOVETT (60). Chairman, Commodores Point Terminal 1985 181,546
Corp., Jacksonville, Florida, an operator of a marine terminal
and real estate. Director, American Heritage Life Investment
Corporation, Florida Rock Industries, Inc., FRP Properties, Inc.
and Winn-Dixie Stores, Inc. (4)
(Photo) RANDOLPH N. REYNOLDS (52). Vice Chairman, Reynolds Metals 1993* 609
Company, Richmond, Virginia, an aluminum manufacturer, since
January 1994. Executive Vice President, Reynolds Metals Company,
prior to January 1994. Director, Reynolds Metals Company.
(Photo) JOHN D. UIBLE (58). Investor, Jacksonville, Florida. Chairman and 1990 10,000
Chief Executive Officer, Florida National Banks of Florida, Inc.
(Florida National), prior to Florida National being acquired by
the Corporation in January 1990. (4)
(Photo) KENNETH G. YOUNGER (68). Chairman (since May 1991) and Chief 1986 13,080
Executive Officer (from January 1993 to May 1993), Carolina
Freight Corporation, Cherryville, N.C., an interstate motor
carrier. Vice Chairman, Carolina Freight Corporation, August 1989
to May 1991, and President and Chief Executive Officer, prior to
August 1989. Director, Carolina Freight Corporation.
</TABLE>

* Elected a director by the Board of Directors of the Corporation at a meeting
in December 1993.
4

<PAGE>
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Shares
and Certain Other Directorships Since Owned (1)
<S> <C> <C> <C>

INCUMBENT CLASS III DIRECTORS -- TERMS EXPIRING IN 1995
(Photo) G. ALEX BERNHARDT (50). President and Chief Executive Officer, 1992 4,420
Bernhardt Furniture Company, Lenoir, North Carolina, furniture
manufacturing. Director, Duke Power Company. (1)
(Photo) W. WALDO BRADLEY (60). Chairman, Bradley Plywood Corporation, 1986 51,518
Savannah, Georgia, building materials. Director, Atlanta Gas
Light Company and Savannah Foods & Industries, Inc. (1)
(Photo) BRENTON S. HALSEY (66). Chairman Emeritus, James River 1993 6,340
Corporation, Richmond, Virginia. Chairman, James River
Corporation, from 1990 to 1992, and Chairman and Chief Executive
Officer prior to 1990. Director, Westmoreland Coal Company.
(Photo) HOWARD H. HAWORTH (59). President, The Haworth Group and The 1986 20,000
Haworth Foundation, Inc., Morganton, North Carolina, investments.
Group President, Masco Home Furnishings, Masco Corporation,
Morganton, North Carolina, a home furnishings industry
conglomerate, October 1990 to August 1991. Chairman, North
Carolina State Board of Education, January 1988 to September
1990. Director, Carolina Freight Corporation.
(Photo) LEONARD G. HERRING (66). President and Chief Executive Officer, 1986 26,408
Lowe's Companies, Inc., North Wilkesboro, North Carolina, a
retailer of building materials and related products for home
improvement. Director, Lowe's Companies, Inc.
</TABLE>
5

<PAGE>
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Shares
and Certain Other Directorships Since Owned (1)
<S> <C> <C> <C>
(Photo) HENRY D. PERRY, JR., M.D. (67). Physician, Plantation, Florida. 1985 702,236
(1)
(Photo) LANTY L. SMITH (51). Chairman and Chief Executive Officer, 1987 2,000
Precision Fabrics Group, Inc., Greensboro, North Carolina, a
manufacturer of technical, high-performance textile products.
Director, Masland Corporation. (1)
(Photo) DEWEY L. TROGDON (62). Chairman, Cone Mills Corporation, 1986 616
Greensboro, North Carolina, a textile manufacturer. Also, Chief
Executive Officer, Cone Mills Corporation, prior to August 1990.
Director, Cone Mills Corporation.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Shares
and Certain Other Directorships Since Owned (1)
<S> <C> <C> <C>
INCUMBENT CLASS I DIRECTORS -- TERMS EXPIRING IN 1996
(Photo) ROBERT J. BROWN. (59). Chairman, President and Chief Executive 1993 450
Officer, B&C Associates, Inc., High Point, North Carolina, a
public relations and marketing research firm.
(Photo) EDWARD E. CRUTCHFIELD, JR. (52). Chairman and Chief Executive 1977 188,528
Officer, the Corporation. Also, President, the Corporation,
October 1988 to June 1990. Director, BellSouth
Telecommunications, Inc., Bernhardt Industries, Inc., Liberty
Corporation and VF Corporation. (1)
(Photo) R. STUART DICKSON (64). Chairman of the Executive Committee, 1985 34,747
Ruddick Corporation, Charlotte, North Carolina, a diversified
holding company, since February 1994. Chairman, Ruddick
Corporation, prior to February 1994. Director, PCA International,
Inc., Ruddick Corporation, Textron, Inc. and United Dominion
Industries. (1)(4)
(Photo) B. F. DOLAN (66). Retired. Prior to January 1993, Chairman, 1977 23,816
Textron, Inc., Providence, Rhode Island, a manufacturer of
aerospace, consumer, industrial and other products. Also, Chief
Executive Officer, Textron, Inc., prior to January 1992, and
President, prior to January 1990. Director, FPL Group, Inc.,
Ruddick Corporation and Textron, Inc.
(Photo) JOHN R. GEORGIUS (49). President, the Corporation, since June 1988 117,977
1990. Chairman and Chief Executive Officer, First Union National
Bank of North Carolina (FUNB-NC), a subsidiary of the
Corporation, Charlotte, North Carolina, from October 1988 to
February 1993. Vice Chairman, the Corporation, August 1987 to
June 1990. (1)
</TABLE>
7

<PAGE>
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Shares
and Certain Other Directorships Since Owned (1)
<S> <C> <C> <C>
(Photo) MAX LENNON (53). President, Clemson University, Clemson, South 1988 100
Carolina. Director, Delta Woodside Industries, Inc. and Duke
Power Company.
(Photo) RUTH G. SHAW (46). Vice President, Corporate Communications, Duke 1990 100
Power Company, Charlotte, North Carolina, an investor-owned
electric utility, since September 1992. President, Central
Piedmont Community College, prior to September 1992. (1)
(Photo) B. J. WALKER (63). Vice Chairman, the Corporation. Also, former 1987 105,942
Chairman and Chief Executive Officer, First Union National Bank
of Florida (FUNB-FL), a subsidiary of the Corporation,
Jacksonville, Florida, prior to March 1991. (1)(3)
</TABLE>

(1) Each director or nominee named above has sole voting and investment power
over the issued and outstanding shares of Common Stock beneficially owned
by such director on January 31, 1994, except for the following shares over
which the directors indicated, and such directors and the five executive
officers of the Corporation (Messrs. Crutchfield, Georgius, Walker, Robert
T. Atwood, Executive Vice President and Chief Financial Officer, and
Marion A. Cowell, Jr., Executive Vice President, Secretary and General
Counsel) as a group, share voting and/or investment power: Mr.
Bernhardt -- 1,059 shares; Mr. Davis -- 1,060,000 shares; Mr.
Dickson -- 25,400 shares; Mr. Georgius -- 200 shares; Mr. Hemby -- 10,000
shares; Dr. Perry -- 608,608 shares; Dr. Shaw -- 100 shares; Mr.
Walker -- 30,000 shares; and members of the group (including the
foregoing) -- 1,757,732 shares.
The 26 current directors and the five executive officers of the
Corporation beneficially owned a total of 2,781,678 shares, or
approximately 1.6% of the outstanding shares of Common Stock, as of
January 31, 1994. Included in the calculation of the number of shares of
Common Stock so owned are the following shares held under certain of the
Corporation's employee benefit plans, including options which were
exercisable on January 31, 1994, or within 60 days thereafter, by the
directors indicated, and by the directors and such executive officers as a
group: Mr. Crutchfield -- 87,027 shares; Mr. Dalhouse -- 68,797 shares;
Mr. Georgius -- 53,633 shares; Mr. Walker -- 14,810 shares; and members of
the group (including the foregoing) -- 252,585 shares. Non-employee
directors are not eligible to participate in any of the Corporation's
stock option or other employee benefit plans.
The following directors or nominees disclaim beneficial ownership of
certain shares of Common Stock held by certain of their related or other
parties, as a result of which these shares are not included in the number
of shares indicated above: Mr. Bernhardt -- 344 shares; Mr.
Bradley -- 32,725 shares; Mr. Davis -- 185,000 shares; Mr.
Georgius -- 1,703 shares; Mr. Hemby -- 300 shares; Dr. Perry -- 192,006
shares; and Mr. Smith -- 5,300 shares.
(2) See Other Matters Relating to Executive Officers and Directors below.
(3) Mr. Hemby and Mr. Walker also served as directors of the Corporation from
April 1985 to April 1986 and from April 1986 to November 1986,
respectively.
(4) As of January 31, 1994, none of the directors or nominees were the
beneficial owners of any shares of Series 1990 Preferred Stock, except for
Mr. Davis -- 15,000 shares; Mr. Dickson, 4,000 shares (as to which shares
Mr. Dickson has shared voting and investment power); Mr. Lovett, 13,136
shares; and Mr. Uible, 550,954 shares. The shares owned by each of such
directors represent less than 1% of the outstanding shares of Series 1990
Preferred Stock as of such date, except for Mr. Uible, whose shares
represent 8.7% of the outstanding shares of such series as of such date.
As of such date, the directors and the five executive officers of the
Corporation as a group were the beneficial owners of 583,090 shares, or
9.2%, of the outstanding shares of such series. Mr. Uible disclaims
beneficial ownership of 10,000 shares of Series 1990 Preferred Stock owned
by a related party, as a result of which these shares are not included in
the number of shares indicated.
8

<PAGE>
Committees and Attendance
Executive Committee. The Executive Committee of the Board of Directors held
six meetings in 1993. The Committee is authorized, between meetings of the Board
of Directors, to perform all duties and exercise all authority of the Board of
Directors, except for those duties and authorities delegated to other committees
of the Board of Directors or which are exclusively reserved to the Board of
Directors by the By-laws of the Corporation or by statute. The following
directors are the current members of the Executive Committee: Dolan (Chairman),
Crutchfield, Davis, Dickson, Herring, Smith and Walker.
Audit Committee. The Audit Committee of the Board of Directors held six
meetings in 1993. The principal responsibilities of the Committee are to ensure
that the Board of Directors receives objective information regarding policies,
procedures and activities of the Corporation with respect to auditing,
accounting, internal accounting controls, financial reporting, regulatory
matters and such other activities of the Corporation as may be directed by the
Board of Directors. The following directors are the current members of the Audit
Committee: Bradley (Chairman), Davis (Vice Chairman), Bernhardt, Dowd, Haworth,
Reynolds and Shaw.
Financial Management Committee. The Financial Management Committee of the
Board of Directors held six meetings in 1993. The Committee is authorized, among
other things, to review lending and deposit policies and to monitor
non-performing assets, owned real estate and investment policies and procedures.
The Committee also reviews the Corporation's mortgage banking and capital
management activities. The following directors are the current members of the
Financial Management Committee: Perry (Chairman), Smith (Vice Chairman), Brown,
Georgius, Goodwin, Laughery, Lennon, Uible and Younger.
Human Resources Committee. The Human Resources Committee of the Board of
Directors (the HR Committee) held six meetings in 1993. The HR Committee is
authorized, among other things, to review and make recommendations to the Board
regarding employee compensation, to administer various employee benefit plans,
to act as the executive compensation committee of the Corporation and to monitor
conditions of employment and personnel policies. The following directors are the
current members of the HR Committee: Dickson (Chairman), Herring (Vice
Chairman), Dolan, Halsey, Hemby, Lovett and Trogdon.
Nominating Committee. The Nominating Committee of the Board of Directors held
two meetings in 1993. The Committee is authorized, among other things, to
recommend the number of directors to be elected to the Board of Directors of the
Corporation and its subsidiaries, to recommend any changes in Board membership,
to recommend director prospects and to study the compensation for directors and
recommend changes when appropriate. The following directors are the current
members of the Nominating Committee: Dolan (Chairman), Dickson (Vice Chairman),
Crutchfield, Herring and Lovett. The Corporation's By-laws include provisions
setting forth specific conditions under which persons may be nominated as
directors of the Corporation at an annual meeting of stockholders.
Attendance. The Board of Directors of the Corporation held eight meetings in
1993. In 1993, all of the directors attended at least 75% of the aggregate of
the meetings of the Board of Directors of the Corporation and the above
committees on which they served during the period they were directors and
members of such committees, except for Messrs. Dalhouse, Lovett, McComas,
Trogdon and Uible, who were not able to attend at least 75% of such meetings
because of illness, business or other conflicts.
9

<PAGE>
Executive Compensation
The following information relates to all plan and non-plan compensation
awarded to, earned by, or paid to (i) the Chief Executive Officer of the
Corporation (the CEO), and (ii) the four other most highly compensated executive
officers of the Corporation or a subsidiary of the Corporation, who were serving
as executive officers of the Corporation or a subsidiary of the Corporation at
December 31, 1993 (the CEO and such officers, the Named Officers).
SUMMARY COMPENSATION TABLE
The following table sets forth for the Named Officers for each of the last
three calendar years: (i) their name and principal position (column (a)); (ii)
year covered (column (b)); (iii) annual compensation (columns (c), (d) and (e)),
including (A) base salary (column (c)), (B) bonus (column (d)), and (C) other
annual compensation not properly categorized as salary or bonus (column (e));
(iv) long-term compensation (columns (f), (g) and (h)), including (A) the dollar
value of any award of restricted stock (calculated by multiplying the closing
sale price of the Common Stock on the date of grant by the number of shares
awarded) (column (f)), (B) the sum of the number of stock options granted
(column (g)) and (C) the dollar value of all payments pursuant to long-term
incentive plans (LTIPs) (column (h)); and (v) all other compensation for the
covered year that the Corporation believes could not be properly reported in any
other column of the table (column (i)).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
Awards
Annual Compensation Securities
Other Annual Restricted Underlying
Name and Principal Salary Bonus Compensation Stock Award(s) Options/SARs
Position Year ($) ($) ($)(1) ($) (2) (#)
<S> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g)
Edward E. Crutchfield, Jr. 1993 810,000 810,000 30,289 720,000 24,000
Chairman and Chief 1992 750,000 750,000 24,717 1,090,600 30,400
Executive Officer, 1991 650,000 0 869,250 0
the Corporation
John R. Georgius 1993 590,000 590,000 21,017 450,000 15,000
President, 1992 525,000 525,000 13,371 658,306 18,350
the Corporation 1991 450,000 0 526,125 0
Byron E. Hodnett 1993 395,000 395,000 4,771 270,000 9,000
Chief Executive Officer, 1992 365,000 365,000 5,366 414,356 11,550
FUNB-FL 1991 300,000 0 343,125 0
Robert T. Atwood 1993 325,000 325,000 19,879 216,000 7,200
Executive Vice 1992 270,000 255,000 7,172 283,412 7,900
President and 1991 191,667(4) 120,000(4) 228,750 0
Chief Financial Officer,
the Corporation
B. J. Walker 1993 375,000 250,000 9,462 180,000 6,000
Vice Chairman, 1992 365,000 180,000 11,183 188,344 5,250
the Corporation 1991 350,000 0 160,125 0
<CAPTION>

Payouts
LTIP All Other
Name and Principal Payouts Compensation
Position ($) ($) (1) (3)
<S> <C> <C>
(a) (h) (i)
Edward E. Crutchfield, Jr. 375,000 54,049
Chairman and Chief 0 49,680
Executive Officer, 0
the Corporation
John R. Georgius 262,500 39,177
President, 0 34,110
the Corporation 0
Byron E. Hodnett 182,500 27,037
Chief Executive Officer, 0 23,170
FUNB-FL 0
Robert T. Atwood 127,500 23,821
Executive Vice 0 16,470
President and 0
Chief Financial Officer,
the Corporation
B. J. Walker 127,500 30,006
Vice Chairman, 0 32,430
the Corporation 0
</TABLE>

(1) Information under columns (e) and (i) for 1991 is not required. Information
regarding personal benefits under column (e) that total less than $50,000 is
also not required. Dollar amounts indicated for 1993 consist of (i) amounts
reimbursed for the payment of taxes on certain personal benefits, and (ii)
above-market earnings on deferred compensation.
(2) The aggregate number of shares of restricted stock held as of December 31,
1993, and the value thereof as of such date, were as follows: Crutchfield:
44,860 shares ($1,850,475); Georgius: 27,260 shares ($1,124,475); Hodnett:
17,280 shares ($712,800); Atwood: 10,800 shares ($445,500); and Walker:
11,020 shares ($454,575). Dividends on shares of restricted stock are paid
quarterly. See Proposal 3 below.
(3) Amounts shown for 1993 consist of the following:
<TABLE>
<CAPTION>
Crutchfield Georgius Hodnett Atwood Walker
<S> <C> <C> <C> <C> <C>
Matching contributions/Savings Plan.......................... $48,600 35,190 23,700 19,500 22,500
Value of life insurance premiums............................. 5,104 2,610 1,374 4,320 5,265
Above market interest on deferred compensation............... 345 1,377 1,963 1 2,241
</TABLE>

(4) Employed by the Corporation since March 1991. In accordance with terms of
employment, the 1991 bonus consists of a $70,000 payment to offset
relocation expenses and a $50,000 guaranteed minimum bonus.
10

<PAGE>
OPTION/SAR GRANTS TABLE
The following table sets forth, with respect to grants of stock options made
during 1993 to each of the Named Officers: (i) the name of such officer (column
(a)); (ii) the number of options granted (column (b)); (iii) the percent the
grant represents of the total options granted to all employees during 1993
(column (c)); (iv) the per share exercise price of the options granted (column
(d)); (v) the expiration date of the options (column e)); and (vi) the
Black-Scholes value of the options at grant date (column (f)).
OPTION/SAR GRANTS IN 1993
<TABLE>
<CAPTION>
Individual Grants
Number of Securities % of Total
Underlying Options/SAR Options/SARs Granted Exercise or BlackScholes
Granted (1) to Employees Base Price Expiration Grant Date Value (2)
Name (#) in 1993 ($/Sh) Date ($)
<S> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f)
Crutchfield 24,000 3.96 45.00 6/14/03 371,520
Georgius 15,000 2.48 45.00 6/14/03 232,200
Hodnett 9,000 1.49 45.00 6/14/03 139,320
Atwood 7,200 1.19 45.00 6/14/03 111,456
Walker 6,000 0.99 45.00 6/14/03 92,880
</TABLE>

(1) Options granted are incentive stock options under 422 of the Internal
Revenue Code (ISOs), except for options granted to Mr. Crutchfield and Mr.
Georgius to purchase 21,941 and 6,169 shares of Common Stock, respectively.
Options are exercisable after one year from the date of grant, subject to
the limitations under 422, at an option exercise price equal to the market
price of the Common Stock at the date of grant. See Proposal 3 below.
(2) The values shown reflect standard application of the BlackScholes pricing
model using (i) 60-month volatility (31.83%) and daily stock prices for the
five years prior to grant date, (ii) an option term of ten years, (iii) an
interest rate that corresponds to the U.S. Treasury rate with a ten-year
maturity (5.96%), and (iv) dividends at the annualized rate in place on the
date of grant ($1.40). The values do not take into account risk factors such
as non-transferability and limits on exercisability. The Black-Scholes
option pricing model is a commonly utilized model for valuing options. The
model assumes that the possibilities of future stock returns (dividends plus
share price appreciation) resemble a normal bell-shaped curve. In assessing
the values indicated in the above table, it should be kept in mind that no
matter what theoretical value is placed on a stock option on the date of
grant, the ultimate value of the option is dependent on the market value of
the Common Stock at a future date, which will depend, to a large degree, on
the efforts of the Named Officers to bring future success to the Corporation
for the benefit of all stockholders.
AGGREGATED OPTION/SAR EXERCISES AND YEAR-END OPTION/SAR VALUE TABLE
The following table sets forth, with respect to each exercise of stock options
(or tandem stock appreciation rights (SARs)) and freestanding SARs during 1993
by each of the Named Officers and the year-end value of unexercised options and
SARs on an aggregated basis: (i) the name of such officer (column (a)); (ii) the
number of shares received upon exercise, or, if no shares were received, the
number of securities with respect to which the options or SARs were exercised
(column (b)); (iii) the aggregate dollar value realized upon exercise (column
(c)); (iv) the total number of unexercised options and SARs held at December 31,
1993, separately identifying the exercisable and unexercisable options and SARs
(column (d)); and (v) the aggregate dollar value of in-the-money, unexercised
options and SARs held at December 31, 1993, separately identifying the
exercisable and unexercisable options and SARs (column (e)).
AGGREGATED OPTION/SAR EXERCISES IN 1993 AND
DECEMBER 31, 1993 OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs In-the-Money Options/SARs
Shares Acquired at 12/31/93 (#) at 12/31/93 ($)
on Exercise Value Exercisable/ Exercisable/
Name (#) Realized ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
(a) (b) (c) (d) (e)
Crutchfield 0 0 81,743/50,211 1,431,801/184,326
Georgius 0 0 49,207/30,563 892,107/83,651
Hodnett 0 0 2,787/17,763 14,980/47,101
Atwood 0 0 2,787/12,313 14,980/27,482
Walker 21,175 270,220 10,887/8,463 166,855/13,239
</TABLE>

<PAGE>
LONG-TERM INCENTIVE PLAN AWARDS TABLE
The following table sets forth, with respect to each award made to a Named
Officer in 1993 under any LTIP: (i) the name of such officer (column (a)); (ii)
the number of shares, units or other rights awarded under any LTIP (column (b));
(iii) the performance or other time period until payout or maturation of the
award (column (c)); and (iv) for plans not based on stock price, the dollar
value of the estimated payout or range of estimated payouts under the award
(threshold, target and maximum amount), whether such award is denominated in
stock or cash (columns (d) through (f)).
LONG-TERM INCENTIVE PLANS -- AWARDS IN 1993 (1)
<TABLE>
<CAPTION>
Estimated Future Payments under
Non-Stock Price-Based Plans
Number of Shares, Performance or Other Threshold Target Maximum
Units or Other Rights Period Until Maturation ($ or ($ or ($ or
Name (#) or Payout (2) #) #)(3) #)(4)
<S> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f)
Crutchfield 3 years 0 $ 375,000 $ 810,000
Georgius 3 years 0 262,500 590,000
Hodnett 3 years 0 182,500 395,000
Atwood 3 years 0 127,500 325,000
Walker 3 years 0 127,500 375,000
</TABLE>

(1) See the Summary Compensation Table above. Under the Corporation's Management
Long-Term Cash Incentive Plan, if the Corporation achieves not less than a
10% average return on equity (ROE) for the three-year period ending each
December 31 (two-year period ended December 31, 1992), based on the
Corporation's adjusted net income, a contribution to a management incentive
pool will be made, based on (i) the rank of the Corporation's average ROE
for the applicable period compared to the average ROE of the 25 largest bank
holding companies in the U.S. for such period (ranging from a ranking of one
to 13), and (ii) a percentage of base salaries of the participants in the
Plan for the last year of the period (gradually decreasing from 50% of such
salaries if the Corporation's rank is one, to 27% if such rank is 13).
Participants receive awards under the Plan, subject to the discretion of the
HR Committee, at the end of each three-year period (two-year period ended
December 31, 1992) on the basis of individual performance as determined by
the HR Committee. The maximum potential award is 100% of base salary. See
Proposal 5 below.
(2) Awards are for three-year periods, except for the 1993 award, which was for
the 1991-1992 two-year period.
(3) Targets are not determinable. Awards indicated represent awards granted in
1993 for the 1991-1992 two-year period. Future awards may be higher or lower
than such awards.
(4) Represents 1993 annual salaries, the maximum awards that can be granted in
1994 for the 1991-1993 three-year period.
12

<PAGE>
PENSION PLAN TABLE
The following table sets forth the estimated annual benefits payable upon
retirement under the Corporation's Pension Plan (including amounts attributable
to the Corporation's Supplemental Retirement Plan) in the specified compensation
and years of service classifications indicated below.
The compensation covered by the Pension Plan includes basic compensation,
overtime and certain incentive compensation. The portions of compensation which
are considered covered compensation under the Pension Plan for the Named
Officers are the salary amounts indicated in the Summary Compensation Table less
deferred amounts. As of January 1, 1994, the credited full years of service
under the Pension Plan were as follows: Mr. Crutchfield -- 28 years; Mr.
Georgius -- 18 years; Mr. Hodnett -- 21 years; Mr. Atwood -- 3 years; and Mr.
Walker -- 37 years.
The portions of compensation which are considered covered compensation under
the Corporation's Supplemental Retirement Plan for the Named Officers are the
annual salary and bonus amounts indicated in the Summary Compensation Table. The
Pension Plan is referred to in the table as PP and the Supplemental Retirement
Plan as SRP.
<TABLE>
<CAPTION>
Estimated annual retirement benefit, assuming a married
participant, a straight life annuity and the years
of service indicated (1)
Average annual 15 years 20 years 25 years 30 years 35 years
compensation PP SRP PP SRP PP SRP PP SRP PP SRP
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 500,000................ $33,422 117,369 44,563 161,441 55,704 205,513 66,845 249,585 70,595 246,266
750,000.................. 33,422 198,267 44,563 269,304 55,704 340,342 66,845 411,379 70,595 408,061
1,000,000................ 33,422 279,164 44,563 377,167 55,704 475,171 66,845 573,174 70,595 569,855
1,250,000................ 33,422 360,061 44,563 485,031 55,704 610,000 66,845 734,969 70,595 731,650
1,500,000................ 33,422 440,959 44,563 592,894 55,704 744,829 66,845 896,764 70,595 893,445
1,750,000................ 33,422 521,856 44,563 700,757 55,704 879,658 66,845 1,058,559 70,595 1,055,240
2,000,000................ 33,422 602,754 44,563 808,620 55,704 1,014,487 66,845 1,220,354 70,595 1,217,035
</TABLE>

(1) For the year ending December 31, 1994, the annual retirement benefit payable
under the Corporation's Pension Plan is limited by federal law to $118,800
and the maximum covered compensation is limited to $150,000. For officers
covered under the Corporation's Supplemental Retirement Plan (a total of 20
in number), any excess annual retirement benefit (based on 30 or less years
of service) which could not be paid under the Pension Plan because of such
limitations would be payable under the Supplemental Retirement Plan. The
foregoing is reflected in the table.
COMPENSATION OF DIRECTORS
Directors of the Corporation receive a quarterly retainer of $5,500, plus
$1,000 for each committee meeting attended and $2,000 for each meeting of the
Board of Directors attended. In addition to the foregoing, the Chairman of each
committee receives a quarterly fee of $250. Travel and accommodation expenses of
directors incurred in traveling to and from meetings are reimbursed by the
Corporation. Directors who are employees of the Corporation or its subsidiaries
do not receive any directors' fees. Directors' fees totaling $910,898 were
either paid by the Corporation to the directors of the Corporation in 1993 or
deferred under the terms of the Corporation's Deferred Compensation Plan for
Non-Employee Directors. Certain office space and secretarial services are
provided by the Corporation to Mr. Uible, who formerly was Chairman and Chief
Executive Officer of Florida National and currently serves as a director of the
Corporation and FUNB-FL. Mr. Uible also receives fees for serving as a director
of FUNB-FL ($1,000 per meeting attended).
Under the Corporation's Deferred Compensation Plan for Non-Employee Directors,
directors of the Corporation who are not employees of the Corporation or any of
its subsidiaries may defer payment of all or any part of their directors' fees
(including fees payable as committee members). Amounts deferred under the Plan,
plus interest, are payable after the end of the calendar year in which the
13

<PAGE>
director ceases to be a director, in annual installments over a ten-year period,
unless otherwise determined by the HR Committee in its discretion. A total of 18
directors of the Corporation elected to defer $697,137 of their 1993 directors'
fees under the Plan. Deferred fees may either earn interest or be valued based
on the fair market value of the Common Stock, at the option of the director.
All non-employee directors of the Corporation who serve as such for five years
or more are eligible to participate in the Corporation's Retirement Plan for
Non-Employee Directors. Under the Plan, after the end of the calendar year in
which the director retires from the Board, the retired director is entitled to
receive annually for 10 years $1,000 for each year he or she served as a
director of the Corporation, up to a maximum of $10,000 per year.
EMPLOYMENT CONTRACTS
In August 1985, the Corporation and Mr. Crutchfield entered into an employment
agreement providing for the employment of Mr. Crutchfield as Chairman and Chief
Executive Officer of the Corporation until December 31, 1990, subject to (i) the
extension of such period of employment so that the unexpired portion thereof
would be not less than five years, (ii) the right of either party to terminate
the agreement at any time, and (iii) the right of Mr. Crutchfield to terminate
the agreement if the Board of Directors changes such offices held by Mr.
Crutchfield or the power and authority or duties or responsibilities attendant
thereto. The agreement provides that Mr. Crutchfield's annual salary will not be
less than $330,000 and that the Corporation, in its sole discretion, may award
Mr. Crutchfield an annual bonus based on his performance and other factors. If
the Corporation terminates the agreement other than for cause (as therein
defined) or if Mr. Crutchfield terminates the agreement as provided in (iii)
above, the agreement provides that the Corporation will pay to Mr. Crutchfield
an amount equal to the sum of (a) the result of multiplying (i) Mr.
Crutchfield's annual salary by (ii) the number of years (including any fraction
thereof) then remaining in the term of employment, and (b) the result of
multiplying (i) the annual average bonus payable to Mr. Crutchfield during the
three calendar years preceding the termination date by (ii) the number of years
(including any fraction thereof) then remaining in the term of employment. If
Mr. Crutchfield terminates his employment other than as provided in (iii) above,
he will be entitled to be paid 66 2/3% of his annual salary for a period of two
years following termination of his employment, subject to termination of such
payments if Mr. Crutchfield were to violate a two-year non-compete provision
provided for in the agreement.
None of the other Named Officers has an employment contract with the
Corporation.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Current members of the HR Committee are Messrs. Dickson, Dolan, Halsey,
Hemby, Herring, Lovett and Trogdon, all of whom are independent, outside
directors of the Corporation.
Mr. Crutchfield serves on the Board of Directors of Bernhardt Furniture
Company, and as one of the outside directors on the Compensation Advisory
Committee of such Board. G. Alex Bernhardt, a director of the Corporation,
serves as President and Chief Executive Officer of Bernhardt Furniture Company.
HR COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The HR Committee had six regularly scheduled meetings during 1993, at which
time it reviewed, evaluated and approved executive compensation and benefit
recommendations without the presence of the CEO. The Corporation's executive
compensation programs consist of elements that vary based on corporate
performance (variable pay) and elements that do not (fixed pay). The variable
component is substantial. Variable pay elements include a short-term incentive
plan, a stock compensation plan and a long-term cash incentive plan, which are
discussed further below. All plans are developed
14

<PAGE>
based on competitive information and administered to balance the interests of
the executives with the performance of the Corporation and the interests of its
stockholders.
In its deliberations on executive pay, the HR Committee maintains the
following standards:
(bullet)Programs are designed to attract, motivate, reward and retain high
performing and dedicated management employees.
(bullet)In total, the compensation programs balance competitive need, corporate,
individual and business unit performance, and affordability.
(bullet)Programs provide competitive financial security for executives and
dependents in the event of death, disability or retirement.
The HR Committee believes that the most meaningful performance and pay equity
comparisons are made against companies of similar size and with similar business
interests. In keeping with this belief, the HR Committee consistently uses the
25 largest bank holding companies in the U.S. as the comparator group when
making compensation decisions. The Corporation ranked 9th in size among this
group on December 31, 1993, based on total assets.
The companies chosen for compensation comparisons in the most recent
competitive study (i.e., the 25 largest bank holding companies) are not the same
companies that comprise the published industry index in the performance graph
set forth below (i.e., the KBW 50 (as defined below)), although the 25 largest
bank holding companies are included in the KBW 50. The HR Committee believes
that the most direct competitors for executive talent are not necessarily all of
the companies that would be included in a published industry index for comparing
total stockholder value.
The Corporation's and the HR Committee's intent is to provide executive
compensation consisting of base salaries, which when combined with awards made
under the short-term Management Incentive Plan, the Management Long-Term Cash
Incentive Plan and grants made under the 1992 Master Stock Compensation Plan,
result in total compensation levels which have the same relative rank as ROE
performance within the peer group. This result is achieved through the use of
proxy data on total compensation for the five most highly compensated executives
and financial performance data for the peer companies. For other executive
officers, the HR Committee uses judgment based on this data. Each compensation
decision is based on what is competitive for that compensation element relative
to the peer group, as well as the impact of that decision on total compensation.
Because pay and performance levels at peer companies are not known at the time
compensation decisions are made, the HR Committee does not know if the target
compensation levels have been met until such peer information is made public.
Therefore, the HR Committee looks at the historical relationship between pay and
performance over time (typically a three-year period) as well as comparisons for
a single year. For 1992, the Corporation's ROE performance peer group rank was
11th and the total of all compensation for the Named Officers also ranked 11th.
It is the HR Committee's intent to address any variance between performance rank
and compensation rank with future compensation decisions.
The HR Committee's review of executive compensation relative to the $1 million
limit on tax deductible compensation was made in the context of insuring the
ability to balance sound compensation decisions with appropriate fiscal
responsibility. The HR Committee's intention is to modify the Corporation's
executive compensation plans to minimize the possibility of lost deductions.
However, the HR Committee believes it is important to balance the effectiveness
of such plans against the materiality of any possible lost deductions.
15

<PAGE>
To continue to meet these objectives, the HR Committee may from time to time
change or adjust one or more of the Corporation's executive compensation plans,
or recommend the same to the Board of Directors, as it judges appropriate.
Additionally, the Corporation from time to time employs an independent firm of
employee benefit consultants to advise the Corporation and the HR Committee as
to various matters relating to executive compensation.
Base Salary
The Corporation's base salary program targets base salaries for executive
officers at market. As indicated above, the market for the Corporation is the 25
largest bank holding companies in the U.S., as measured by total assets. The HR
Committee believes that base salary should be reflective of the executive's
scope of responsibility and further, that asset size is the best indicator of
scope of responsibility. Accordingly, base salaries for executives are set such
that they have the same relative rank among the peer group as asset size. For
1992, the Corporation's asset size ranked 11th among the peer group and the
total base salaries for the Named Officers ranked 14th among the peer group. Any
variances are addressed in determining the total compensation for the Named
Officers. Base salary increases in 1993 were made solely as a result of
increases in base salary market data.
Short-Term Management Incentive Plan
The Corporation's short-term Management Incentive Plan covering executive
officers is funded based on the Corporation's ROE. The threshold ROE for
incentive payments is 12%. Individual awards may range from 0% to 100% of base
salary. Determination of individual awards is based primarily on the
Corporation's ROE, but includes a subjective assessment of individual
performance. Measures of individual performance include meeting business unit
objectives, promoting corporate values and providing leadership to employees.
The Corporation's ROE for 1993 was 17.42%. Short-term incentive awards for
1993 were based primarily on this measure although individual performance was
also considered in award determinations. Maximum awards were made to a number of
executives in recognition of this performance.
Long-Term Incentive Program
The long-term incentive program is composed of the following:
(bullet)The Corporation's 1992 Master Stock Compensation Plan, which is made
up of two elements: stock options and restricted stock awards. The HR
Committee believes that issuing stock options and restricted stock to
executives benefits the Corporation's stockholders by encouraging and
enabling executives to own the stock of the Corporation, thus aligning
executive pay with stockholder interests.
(bullet)The Corporation's Management Long-Term Cash Incentive Plan, which pays
cash awards based on ROE performance. The Corporation's rank for the
period in ROE against the peer group determines the available pool from
which awards may be made. The Corporation's ROE for the period, and
individual performance, are considered in determining actual payouts from
the plan.
Award sizes for the stock plan, and payouts from the long-term cash plan, are
set so that total compensation has the same relative rank as ROE performance
within the peer group. The Corporation's 1993 ROE of 17.42% resulted in a rank
of eighth among the peer group.
16

<PAGE>
The 1993 mix of the long-term incentive program awards was set subjectively.
In determining the mix, the HR Committee balanced rewards for past performance
with incentives for future performance, and took into account such factors as
overall risk of the pay package, award sizes in prior years and cash/stock mix.
Current holdings of stock were not considered. No acceleration of vesting or of
payouts occurred under these plans in 1993.
1993 Compensation for the CEO
Mr. Crutchfield is eligible to participate in the same executive compensation
plans available to the other executive officers as described above. His 1993
base salary was set at the size-adjusted median of the peer group. The
size-adjusted median increased primarily because of the Corporation's increase
in asset size from $46 billion in 1992 to $72 billion in 1993. Mr. Crutchfield's
short-term Management Incentive Plan payout and Management Long-Term Cash
Incentive Plan payout were based primarily on the Corporation's ROE, and
included a subjective assessment of individual performance. In this case, the HR
Committee considered overall financial performance, including return on equity
of 17.42%, return on assets of 1.20%, net income of $793 million (a 27% increase
over 1992 originally reported net income), and success in meeting strategic
objectives. These included the acquisition of Dominion Bankshares Corporation,
South Carolina Federal Corporation, DFSoutheastern, Inc., Georgia Federal Bank,
FSB, and First American Metro Corp. (each of which was acquired by the
Corporation in 1993), and the agreement by the Corporation to acquire Lieber and
Company entered into in 1993. The stock option grants and restricted stock
awards made to Mr. Crutchfield in 1993 were based on the analysis discussed
above. That is, the HR Committee set them so that Mr. Crutchfield's total
compensation would have the same expected relative rank as ROE performance
within the peer group. The mix of options and restricted stock awards was set
subjectively, balancing rewards for past performance with incentives for future
performance. The 1985 employment agreement with Mr. Crutchfield, described
above, had no impact on compensation decisions made with respect to Mr.
Crutchfield during 1993.
With respect to the HR Committee's use of the historical relationship between
pay and performance described above, the Corporation's ROE performance and total
asset rank for 1992 were 11th among the peer group and Mr. Crutchfield's base
salary and total compensation ranked tenth and 12th, respectively.
<TABLE>
<S> <C>
R. STUART DICKSON, Chairman TORRENCE E. HEMBY, JR.
LEONARD G. HERRING, Vice Chairman RADFORD D. LOVETT
B. F. DOLAN DEWEY L. TROGDON
BRENTON S. HALSEY
</TABLE>
17

<PAGE>
PERFORMANCE GRAPH
The following graph compares (i) the yearly change in the cumulative total
stockholder return on the Common Stock with (ii) the cumulative return of the
Standard & Poor's 500 Stock Index (S&P 500) and the Keefe, Bruyette & Woods,
Inc. 50 Index (KBW 50). The graph assumes that the value of an investment in the
Common Stock and in each index was $100 on December 31, 1988, and that all
dividends were reinvested.
The S&P 500 and the KBW 50 are market-capitalization-weighted indices, meaning
that companies with a higher market value count for more in both indices. The
KBW 50 is comprised of 50 bank holding companies, including all money-center and
major regional bank holding companies.
TOTAL STOCKHOLDER RETURN
JANUARY 1, 1989 THROUGH DECEMBER 31, 1993

(Performance Graph appears here--see appendix)

December 31,
1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
The Corporation..................................................... $100 97 77 158 237 232
S&P 500............................................................. 100 132 127 166 179 197
KBW 50.............................................................. 100 119 85 135 172 182
</TABLE>

The information set forth above under the subheadings HR Committee Report on
Executive Compensation and Performance Graph (i) shall not be deemed to be
soliciting material or to be filed with the Securities and Exchange Commission
or subject to Regulation 14A or the liabilities of Section 18 of the Securities
Exchange Act of 1934, and (ii) notwithstanding anything to the contrary that may
be contained in any filing by the Corporation under such Act or the Securities
Act of 1933 shall not be deemed to be incorporated by reference in any such
filing.
18

<PAGE>
Other Matters Relating to Executive Officers and Directors
The directors and executive officers of the Corporation and its subsidiaries
who are members of the Corporation's Corporate Management Committee,
organizations with which they are affiliated and members of their immediate
families, are customers of the Corporation's banking subsidiaries. In the
opinion of management of the Corporation, the outstanding indebtedness and
commitments in connection with the lending relationships of such directors and
officers with the Corporation's banking subsidiaries were made in the ordinary
course of business and on substantially the same terms, including interest
rates, collateral and repayment terms, as those prevailing at the time for
comparable transactions with other customers and do not involve more than normal
risk of collectibility or present other unfavorable features. During 1993, the
aggregate monthly outstanding principal balances of loans made by the
Corporation's banking subsidiaries to such directors and officers and including
certain of their related interests, ranged from a high of approximately $240
million to a low of approximately $160 million.
In addition, the Corporation or its subsidiaries have the following
relationships with the directors who are continuing in office following the
Meeting or the director nominees indicated:
(bullet)William H. Goodwin, Jr. is President of a corporation that in 1993 had
several leases for computer, telecommunication and related equipment with
First Union Corporation of Virginia (formerly Dominion Bankshares
Corporation), a subsidiary of the Corporation. While such leases were in
effect during 1993, average monthly rental payments for such leases ranged
from $150,000 to $175,000. All such leases terminated in October 1993,
except for one lease with a current termination date in August 1996 and a
monthly rental payment of $3,000.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and certain executive officers of the Corporation and
its subsidiaries covered by such Section, and any persons who own more than 10%
of any class of the Corporation's equity securities, to file certain reports
relating to their ownership of such securities and changes in such ownership
with the Securities and Exchange Commission and the New York Stock Exchange (the
NYSE) and to furnish the Corporation with copies of such reports. To the
Corporation's knowledge, based solely on review of the copies of such reports
furnished to the Corporation or written representations relating thereto, during
or prior to the year ended December 31, 1993, all Section 16(a) filing
requirements applicable to such officers, directors and greater than 10% owners
were complied with, except as set forth in prior proxy statements and except for
late filings relating to: a purchase of Common Stock by Robert J. Brown, a
director of the Corporation; a gift of Common Stock by the spouse of Byron E.
Hodnett, an officer of the Corporation covered by Section 16(a); and a
distribution from a trust for which Henry D. Perry, a director of the
Corporation, is trustee.
19

<PAGE>
PROPOSAL 2. APPROVAL OF THE CORPORATION'S 1994 EMPLOYEE STOCK
PURCHASE PLAN
General
Management is recommending approval of the 1994 Employee Stock Purchase Plan
(the 1994 Plan), which is similar to the other employee stock purchase plans
offered by the Corporation to its employees in the past. The 1994 Plan was
adopted by the Board of Directors in February 1994, subject to the approval of
the stockholders.
The 1994 Plan, like the other employee stock purchase plans offered by the
Corporation to its employees in the past, is intended to encourage ownership of
Common Stock by the employees of the Corporation and its subsidiaries and to
encourage the employees to remain with the Corporation or its subsidiaries
through an opportunity to share in the increased value of the Common Stock to
which the employees contribute. The plans are for the benefit of all eligible
full-time employees of the Corporation and its subsidiaries, both officers and
non-officers.
The 1994 Plan authorizes the Corporation to issue options to eligible
employees to purchase shares of Common Stock at 85% of the fair market value of
Common Stock on August 1, 1994, or, if lesser, and to the extent such options
are not exercised or forfeited prior to June 28, 1996, at 85% of the fair market
value of the Common Stock on such date. Administration of the 1994 Plan will be
vested in the HR Committee. All employees of the Corporation or its subsidiaries
(excluding employees whose scheduled employment is less than 20 hours per week
or less than five months per year) who complete one or more years of continuous
service as of August 1, 1994, will be eligible to participate. Each participant
will be granted the right to purchase one share of Common Stock for each $250 of
annual compensation reflected on the corporate payroll system on July 29, 1994.
No option granted under the 1994 Plan will permit a participant to purchase in
any single calendar year shares of stock, together with all other shares which
the participant may be entitled to purchase under all employee stock purchase
plans in such year, at a rate in excess of $25,000 in fair market value for each
calendar year in which such option is outstanding (the $25M Limit).
1994 Plan Benefits
The following table sets forth the number of shares of Common Stock underlying
options that would have been granted under the 1994 Plan to the individuals and
groups indicated if the effective date of the 1994 Plan was January 31, 1994,
subject to the $25M Limit. The Dollar Value column represents the number of such
optioned shares times the difference between the assumed option price of such
shares (based on 85% of the market price of the Common Stock on such date) and
such market price ($43.50), subject to the $25M Limit.
<TABLE>
<CAPTION>
1994 Employee Stock
Purchase Plan
No. of Shares
Dollar Value (With $25M Limit)
<S> <C> <C>
Crutchfield..................................................................... $ 7,496 1,148
Georgius........................................................................ 7,496 1,148
Hodnett......................................................................... 10,233 1,567
Atwood.......................................................................... 8,750 1,340
Walker.......................................................................... 8,541 1,308
Executive Group................................................................. 169,545 25,964
Non-Executive Director Group.................................................... 0 0
Non-Executive Employee Group.................................................... 19,178,852 2,937,037
</TABLE>

<PAGE>
The actual number of shares to be offered will be determined by the salaries
reflected on the corporate payroll system on July 29, 1994, to those eligible
employees employed on August 1, 1994. The maximum number of shares of Common
Stock authorized to be issued under the 1994 Plan is 4,000,000. The last
reported sale price of the Common Stock on the NYSE on March 1, 1994, was $40.50
per share.
Certain Federal Tax Consequences
The 1994 Plan is intended to comply with the requirements governing employee
stock purchase plans set forth in the Internal Revenue Code of 1986, as amended
(the Code). Certain favorable tax consequences are afforded to purchasers of
stock pursuant to an employee stock purchase plan meeting those requirements. If
a participant acquires stock under such a plan and holds it for a period of more
than two years from the date the option is granted and more than one year from
the date the option is exercised, he would not realize any ordinary income on
exercise but would realize ordinary income upon disposition of such stock to the
extent of the excess of the fair market value of such stock at the time the
option was granted over its option price (which in the 1994 Plan would be the
amount of the 15% reduction in price), and he would report any additional gain
as capital gain. If such stock is disposed of when its fair market value is less
than its fair market value at the time the option was granted, the amount of
ordinary income is limited to the excess of the fair market value at the time of
disposition over the option price. Neither the grant of an option under an
employee stock purchase plan meeting the requirements in the Code nor the
exercise of such an option has tax consequences to the Corporation. If a
participant disposes of stock acquired pursuant to such an option within two
years from the date the option is granted or one year from the date the option
is exercised, he must report as ordinary income the difference between the
option price and the fair market value of the stock at the time the option was
exercised, and the Corporation may take an income tax deduction in that amount.
The options granted under the 1994 Plan do not qualify as performance-based
compensation under OBRA (as defined under Proposals 3, 4 and 5 below).
Therefore, with respect to dispositions of stock by Actual OBRA Officers (as
defined under Proposals 3, 4 and 5 below) within two years of the date of grant
or one year of the date of exercise, the Corporation may not be able to take a
deduction for federal income tax purposes for which it otherwise would be
entitled. It is anticipated, due to restrictions on the value of shares which
may be granted to such Actual OBRA Officers, that the value of any potential
lost tax deductions will be immaterial.
THE AFFIRMATIVE VOTE OF A MAJORITY OF SHARES OF COMMON STOCK VOTED THEREON IS
REQUIRED TO APPROVE THE 1994 PLAN. THE BOARD OF DIRECTORS RECOMMENDS THAT
STOCKHOLDERS VOTE FOR APPROVAL OF THE 1994 PLAN. PROXIES, UNLESS INDICATED TO
THE CONTRARY, WILL BE VOTED FOR APPROVAL OF THE 1994 PLAN.
21

<PAGE>
PROPOSAL 3. APPROVAL OF CERTAIN AMENDMENTS TO THE CORPORATION'S 1992 MASTER
STOCK COMPENSATION PLAN INTENDED TO PRESERVE THE CORPORATION'S
FEDERAL INCOME TAX DEDUCTION WITH RESPECT TO CERTAIN COMPENSATION
PAYABLE UNDER SUCH PLAN
PROPOSAL 4. APPROVAL OF CERTAIN AMENDMENTS TO THE CORPORATION'S MANAGEMENT
INCENTIVE PLAN INTENDED TO PRESERVE THE CORPORATION'S FEDERAL INCOME
TAX DEDUCTION WITH RESPECT TO CERTAIN COMPENSATION PAYABLE UNDER
SUCH PLAN
PROPOSAL 5. APPROVAL OF CERTAIN AMENDMENTS TO THE CORPORATION'S MANAGEMENT
LONG-TERM CASH INCENTIVE PLAN INTENDED TO PRESERVE THE CORPORATION'S
FEDERAL INCOME TAX DEDUCTION WITH RESPECT TO CERTAIN COMPENSATION
PAYABLE UNDER SUCH PLAN
Proposals 3, 4 and 5 relate to certain amendments to three existing benefit
plans of the Corporation, (the 1992 Master Stock Compensation Plan (the 1992
Plan), the Management Incentive Plan (the Short-Term Plan) and the Management
Long-Term Cash Incentive Plan (the Long-Term Plan)). The amendments are being
presented to the stockholders as a result of the Omnibus Budget Reconciliation
Act of 1993 and the proposed regulations promulgated by the Internal Revenue
Service thereunder (OBRA). The amendments are intended to preserve the
Corporation's federal income tax deduction with respect to certain executive
compensation payable under such Plans, in accordance with the requirements of
OBRA.
1992 PLAN
General
The 1992 Plan was approved by the stockholders of the Corporation at the 1992
Annual Meeting of Stockholders. The 1992 Plan provides for the issuance of up to
5,000,000 shares of Common Stock to key employees of the Corporation and its
subsidiaries (of which up to 2,000,000 shares may be shares of restricted
stock), subject to adjustment in the event of any change in the outstanding
shares of Common Stock as a result of a stock dividend or split,
recapitalization, merger, consolidation, combination or exchange of shares or
other similar corporate change (a Corporate Change). The last reported sale
price of the Common Stock on the NYSE on March 1, 1994, was $40.50 per share.
No option or shares of restricted stock may be granted under the 1992 Plan on
or after the tenth anniversary of the 1992 Plan's effective date, April 21,
1992.
Participants in the 1992 Plan are selected by the HR Committee from among
those officers and other key employees of the Corporation or its subsidiaries
who are in a position to contribute materially to the Corporation's continued
growth and development and to its long-term financial success. In 1993, a total
of 465 employees received stock options and shares of restricted stock under the
Plan and one employee received shares of restricted stock only.
No option granted pursuant to the 1992 Plan may have an option price that is
less than the fair market value of the Common Stock on the date the option is
granted. Each option expires at such time as the HR Committee determines at the
time such option is granted; provided, however, that no option may be
exercisable later than the tenth anniversary date of its grant. Under the 1992
Plan, only ISOs to purchase up to $100,000 of Common Stock (measured as of the
date of grant of the option) may vest as to each optionee in each calendar year.
22

<PAGE>
Except as provided in the 1992 Plan, shares of restricted stock granted under
the 1992 Plan may not be sold, transferred, pledged, assigned or otherwise
alienated or hypothecated for such period of time as determined by the HR
Committee. During the period of restriction, participants holding shares of
restricted stock granted under the 1992 Plan may exercise full voting rights
with respect to those shares and, except as otherwise provided below, are
entitled to receive all dividends and other distributions paid with respect to
those shares.
Certain Federal Tax Consequences
An optionee will not be taxed at the time a nonqualified stock option
(Non-ISO) is granted. In general, an employee exercising a Non-ISO will
recognize ordinary income equal to the excess of the fair market value on the
exercise date of the stock purchased over the option price. Upon subsequent
disposition of the stock purchased, the difference between the amount realized
and the fair market value of the stock on the exercise date will constitute
capital gain or loss. The Corporation will not recognize income, gain or loss
upon the granting of a Non-ISO. Upon the exercise of such an option, the
Corporation is entitled to an income tax deduction equal to the amount of
ordinary income recognized by the employee.
An employee will not be taxed at the time an ISO is granted. In general, an
employee exercising an ISO will not be taxed at the time an ISO is exercised if
the stock purchased is held for at least one year after the exercise date and at
least two years after the date of grant; provided, however, the bargain element
of exercised ISOs is treated as a tax preference item under the alternative
minimum tax rules. If such holding periods are satisfied, the difference between
the option price and the amount realized upon disposition of the stock will
constitute long-term capital gain or loss. If such holding periods are not
satisfied, the employee will recognize ordinary income to the extent of the
lesser of the gain realized and the excess of the fair market value of the stock
on the exercise date over the option price. The Corporation will not recognize
income, gain or loss upon the granting or exercise of an ISO, nor will it be
entitled to any deduction upon the disposition of an ISO if the holding periods
referred to above are satisfied. If such holding periods are not satisfied, the
Corporation will be entitled to a deduction equal to the amount of the ordinary
income recognized by the employee.
In general, an employee who has received shares of restricted stock and who
has not made an election under Section 83(b) of the Code to be taxed upon
receipt, will include in his gross income as compensation income an amount equal
to the fair market value of the shares of restricted stock at the earlier of the
first time the rights of the employee are transferable or the restrictions
lapse. The Corporation is entitled to a deduction at the time that the employee
is required to recognize income. Shares of restricted stock granted to employees
who are Actual OBRA Officers are subject to the deduction limitations under
OBRA, as set forth below.
1992 Plan Amendments
The 1992 Plan was amended by the Board of Directors of the Corporation in
December 1993 and February 1994 (the 1992 Plan Amendments), subject to obtaining
the approval of the stockholders of the Corporation, in order to preserve the
Corporation's federal income tax deduction with respect to certain stock options
and certain shares of restricted stock granted under the 1992 Plan, in
accordance with the requirements of OBRA.
Under OBRA, the allowable federal income tax deduction by a publicly held
corporation for compensation paid or accrued with respect to the chief executive
officer and the four other most highly compensated executive officers of such
corporation serving as such at the end of such corporation's
23

<PAGE>
fiscal year (the Actual OBRA Officers) will be limited to no more than
$1,000,000 per year (the OBRA Limitation), subject to certain exemptions,
including an exemption relating to performance-based compensation that is
payable (i) solely on account of the achievement of one or more performance
goals established by a compensation committee consisting exclusively of two or
more outside directors, (ii) under a plan the material terms of which are
approved by the stockholders, and (iii) solely upon certification by the
compensation committee that the performance goals and other material conditions
precedent to the payment have been satisfied.
Under OBRA, stock options will qualify as performance-based compensation if,
among other requirements:
(i) the options are issued under a plan that specifies the maximum number of
shares on which options may be granted to any employee within a specified
period under the plan; and
(ii) the option is granted with an exercise price at least equal to the fair
market value of the underlying stock at the time of grant.
Stock options granted under the 1992 Plan meet the requirement set forth in (ii)
above since options are granted at a price not less than the fair market value
of the stock on the date of grant. The requirement set forth in (i) above will
be deemed satisfied for previously approved plans (such as the 1992 Plan) until
the first stockholders' meeting after December 31, 1996, at which directors are
elected. Notwithstanding the foregoing, the Corporation is proposing to satisfy
the requirement set forth in (i) above at this time, as provided in the proposed
amendment to the 1992 Plan indicated in (i) below.
Under the 1992 Plan as currently in effect there are no limits on the number
of shares that may be covered by an option grant or a grant of restricted stock.
The 1992 Plan Amendments provide that:
(i) no participant in the 1992 Plan shall be granted options to purchase
more than 200,000 shares of Common Stock during any fiscal year, subject to
adjustment as a result of a Corporate Change;
(ii) prior to April 1, 1994, as to shares of restricted stock granted in
1994 to such executive officers of the Corporation and its subsidiaries whose
compensation the HR Committee determines may be subject to the OBRA Limitation
(the Expected OBRA Officers), the HR Committee shall determine the Expected
OBRA Officers and an ROE performance goal, based on Adjusted Net Income (as
defined below), for 1994 that will need to be attained by the Corporation in
order to permit such shares to vest during the period of restriction for such
shares. The 1992 Plan provides that the value of any shares of restricted
stock granted to an Expected OBRA Officer in 1994 (calculated by multiplying
the closing price of the Common Stock on the NYSE on the date of grant times
the number of shares of restricted stock granted) will be designated as 100%
of the Expected OBRA Officer's base salary being earned as of December 31,
1993; provided, however, the HR Committee may, in its discretion, reduce the
number of such shares to be granted;
(iii) prior to April 1, 1994, as to dividends or other distributions payable
in the third and fourth quarters of 1994 on shares of restricted stock granted
in 1994 to the Expected OBRA Officers, the HR Committee shall determine an ROE
performance goal for the quarters ending prior to each such quarters that will
need to be attained by the Corporation in order to permit the payment of such
dividends or other distributions in each such quarter; and
(iv) prior to April 1, 1994, as to shares of restricted stock granted to an
Expected OBRA Officer in 1995, and prior to January 1 of each year thereafter
(commencing with 1995) as to shares of restricted stock granted to the
Expected OBRA Officers in the following year, the HR Committee shall determine
the Expected OBRA Officers and an ROE performance goal for 1994 and each year
24

<PAGE>
thereafter that will need to be attained by the Corporation in order to permit
any shares of restricted stock to be granted to the Expected OBRA Officers in
the year following each such year. The value of any shares of restricted stock
granted to an Expected OBRA Officer (calculated by multiplying the closing
price of the Common Stock on the NYSE on the date of grant times the number of
shares of restricted stock granted) will be designated as 100% of the Expected
OBRA Officer's base salary being earned as of December 31 of the year
preceding the year in which such shares are granted; provided, however, the HR
Committee may, in its discretion, reduce the number of such shares to be
granted.
The term Adjusted Net Income means the Corporation's net income applicable to
common stockholders reported in its income statement, adjusted to remove the
effect of the following:
(i) items to be disclosed under generally accepted accounting principles
(GAAP), or that would be disclosed absent a materiality concept, in the
Corporation's income statement as extraordinary gains or losses or as
changes in accounting principles;
(ii) net income or loss attributable to companies acquired in acquisition
transactions which are being treated as poolings under GAAP to the
extent the income or loss is attributable to periods prior to the
consummation date of the transaction; and
(iii) restructuring charges to be recognized in the Corporation's income
statement as a result of current and/or pending acquisition
transactions.
In situations where the Corporation's reported net income is adjusted as a
result of pooling transactions noted above, the average equity of the
Corporation for the applicable period, against which the Adjusted Net Income is
compared to determine ROE, shall be computed without taking into account the
equity of an acquired company for any time periods prior to consummation of the
transaction.
In February 1994 the HR Committee determined the Expected OBRA Officers (the
Named Officers indicated above) and the ROE performance goal that the
Corporation will need to attain in 1994 (12%) in order to permit (i) vesting of
any shares of restricted stock granted to the Expected OBRA Officers in 1994 in
accordance with the normal vesting schedule for such shares, and (ii) any shares
of restricted stock to be granted to the Expected OBRA Officers in 1995. In
February 1994, the HR Committee also determined the ROE performance goal (12%)
the Corporation will need to attain in (i) the second quarter of 1994 in order
to permit payment of any dividends or other distributions in the third quarter
of 1994 on any shares of restricted stock granted to the Expected OBRA Officers
in 1994, and (ii) the third quarter of 1994 in order to permit payment of such
dividends or other distributions payable in the fourth quarter of 1994.
If the 1992 Plan Amendments are approved by the stockholders, compensation
payable to the Expected OBRA Officers under the 1992 Plan will be subject to a
more objective standard than under the 1992 Plan as it currently exists. If the
Corporation meets the ROE performance goals established by the HR Committee, it
is not expected that there would be a significant increase in the compensation
payable to the Expected OBRA Officers under the 1992 Plan, as so amended.
In addition, if the 1992 Plan Amendments are approved by the stockholders,
according to OBRA the 1992 Plan Amendments (with respect to shares of restricted
stock) must be reapproved by the stockholders (i) if the terms of the
performance goal are materially changed, and (ii) in any event after five years.
Pursuant to OBRA, the determination by the HR Committee of different ROE
performance goals is not considered to be a material change in the terms of the
performance goal that must be approved by the Corporation's stockholders.
25

<PAGE>
Under OBRA, the deductibility of compensation relating to shares of restricted
stock granted under the 1992 Plan in June 1993, which will vest 20% per year
over a five-year period, may not be grandfathered, and since such shares have
previously been granted, such grants cannot be included in the 1992 Plan
Amendments. Therefore, the Corporation may not be able to deduct all or a
portion of the compensation relating to such grants to the Actual OBRA Officers.
Since shares of restricted stock vest over a specified period following the
grant of such shares, an executive officer not designated as an Expected OBRA
Officer prior to the beginning of the year for which such shares are granted
(prior to April 1, 1994, with respect to 1994 grants) may thereafter become an
Actual OBRA Officer during the period of the grant, in which case the
Corporation may not be able to deduct all or a portion of the compensation
payable to such executive officer with respect to such shares of restricted
stock.
The 1992 Plan Amendments and the foregoing discussion are based on the
proposed OBRA regulations referred to above. To the extent the final OBRA
regulations differ from the proposed OBRA regulations (i) the 1992 Plan may be
further amended by the Board of Directors to reflect the final OBRA regulations
(without stockholder approval unless such approval is required by the final OBRA
regulations), and (ii) the foregoing discussion is qualified in its entirety and
shall be subject to the terms and conditions of the final OBRA regulations.
1992 Plan Benefits
The following table sets forth the number of stock options and shares of
restricted stock granted under the 1992 Plan in June 1993 to the individuals and
groups indicated.
<TABLE>
<CAPTION>
1992 Master Stock Compensation Plan
1993 Restricted
1993 Stock Options Stock Grants
<S> <C> <C>
Crutchfield.................................................................. 24,000 16,000
Georgius..................................................................... 15,000 10,000
Hodnett...................................................................... 9,000 6,000
Atwood....................................................................... 7,200 4,800
Walker....................................................................... 6,000 4,000
Executive Group.............................................................. 124,140 82,760
Non-Executive Director Group................................................. 0 0
Non-Executive Employee Group................................................. 420,285 281,565
</TABLE>

SHORT-TERM PLAN
General
The Short-Term Plan was approved by the Board of Directors of the Corporation
in 1978 and has been amended by the Board of Directors on several occasions
since 1978. The Short-Term Plan was amended by the Board of Directors in
February 1994 (the Short-Term Plan Amendments), subject to obtaining the
approval of the stockholders of the Corporation.
The Short-Term Plan is intended to provide significant and sustaining
motivation to key management personnel of the Corporation and its subsidiaries
who are responsible for meeting the growth and profit objectives of the
Corporation. Participants in the Short-Term Plan are limited to key members of
senior management of the Corporation and its subsidiaries who are selected by
the HR Committee. In 1993, there were 125 participants in the Short-Term Plan.
26

<PAGE>
Pursuant to the Short-Term Plan, if the Corporation's ROE (based on net income
as adjusted for certain items) is not less than 12% for a given fiscal year, a
contribution to an incentive pool is made by the Corporation. The amount of the
contribution is equal to a percentage of such net income, based on such ROE,
ranging from 1% of such net income for an ROE of 12%, to a maximum of 2.5% of
such net income for an ROE of 17% or greater.
Under the Short-Term Plan as currently in effect, participants receive awards
from the incentive pool, including amounts in the pool carried over from prior
years because they were not awarded in such years, on the basis of individual
performance as determined by the HR Committee; provided, however, that the
maximum award for an individual may not exceed 100% of the individual's base
salary.
Short-Term Plan Amendments
The Short-Term Plan Amendments provide that prior to April 1, 1994, as to
awards for 1994, and prior to January 1 of each year thereafter as to awards for
each such year, the HR Committee shall determine the Expected OBRA Officers and
an ROE performance goal (based on Adjusted Net Income) that will need to be
attained by the Corporation for each such year in order to permit any awards to
be made to the Expected OBRA Officers for such year. The Short-Term Plan
provides that the amount of any award to an Expected OBRA Officer will be
designated as 100% of the Expected OBRA Officer's base salary as of December 31
of the year for which the award is made; provided, however, the HR Committee, in
its discretion, may reduce the amount of any such award prior to payment. The
Expected OBRA Officers (the Named Officers indicated above) and an ROE
performance goal of 12% for 1994 were determined by the HR Committee in February
1994.
Awards are payable in the first quarter of the year following the year in
which the awards are earned, except for awards payable to Expected OBRA
Officers. Such awards are payable on or after January 31 of such following year;
provided, however, such awards may be paid prior to January 31 if they are
discounted at a rate intended to reflect the time value of money.
If the Short-Term Plan Amendments are approved by the stockholders,
compensation payable to the Expected OBRA Officers under the Short-Term Plan
will be subject to a more objective standard than under the Short-Term Plan as
it currently exists. If the Corporation meets the ROE performance goals
established by the HR Committee, it is not expected that there would be a
significant increase in the compensation payable to the Expected OBRA Officers
under the Short-Term Plan, as so amended.
In addition, if the Short-Term Plan Amendments are approved by the
stockholders, according to OBRA the Short-Term Plan Amendments must be
reapproved by the stockholders (i) if the terms of the performance goal are
materially changed, and (ii) in any event after five years. Pursuant to OBRA,
the determination of different ROE performance goals for each year by the HR
Committee is not considered to be a material change in the terms of the
performance goal that must be approved by stockholders.
Since awards under the Short-Term Plan are made at the end of each year, an
executive officer not designated as an Expected OBRA Officer prior to the
beginning of the year for which an award is made (prior to April 1, 1994, with
respect to awards for 1994) may thereafter become an Actual OBRA Officer for
such year, in which case the Corporation may not be able to deduct all or a
portion of the compensation payable to such executive officer with respect to
such award.
27

<PAGE>
The Short-Term Plan Amendments and the foregoing discussion are based on the
proposed OBRA regulations referred to above. To the extent the final OBRA
regulations differ from the proposed OBRA regulations (i) the Short-Term Plan
may be further amended by the HR Committee to reflect the final OBRA regulations
(without stockholder approval unless such approval is required by the final OBRA
regulations), and (ii) the foregoing discussion is qualified in its entirety and
shall be subject to the terms and conditions of the final OBRA regulations.
Short-Term Plan Benefits
The following table sets forth the awards granted under the Short-Term Plan to
the individuals and groups indicated for the year ended December 31, 1993.
<TABLE>
<CAPTION>
Management Incentive Plan
1993 Awards
<S> <C>
Crutchfield........................................................................... $ 810,000
Georgius.............................................................................. 590,000
Hodnett............................................................................... 395,000
Atwood................................................................................ 325,000
Walker................................................................................ 250,000
Executive Group....................................................................... 4,890,000
Non-Executive Director Group.......................................................... 0
Non-Executive Employee Group.......................................................... 6,002,800
</TABLE>

LONG-TERM PLAN
General
The Long-Term Plan was approved by the Board of Directors of the Corporation
in December 1991 and was amended by the Board of Directors in October and
December 1992. The Long-Term Plan was amended by the Board of Directors in
February 1994 (the Long-Term Plan Amendments), subject to obtaining the approval
of the stockholders of the Corporation.
Through recognition of both long-term performance of the Corporation relative
to its peers and individual performance, the Long-Term Plan is intended to
provide significant and sustaining motivation to key management personnel of the
Corporation and its subsidiaries who are responsible for meeting the growth and
profit objectives of the Corporation. Participants in the Long-Term Plan are
limited to key members of senior management of the Corporation and its
subsidiaries who are selected by the HR Committee. For awards granted in June
1993 for the 1991-1992 two-year period, there were 128 participants in the
Long-Term Plan.
Pursuant to the Long-Term Plan, if the Corporation's average ROE (based on net
income as adjusted for certain items) is not less than 10% for the two-year
period ending December 31, 1992, and for the three-year period ending each
December 31 thereafter, a contribution to an incentive pool is made by the
Corporation.
The contribution to the pool is based on the rank of the Corporation's average
ROE for the applicable period compared to the average ROE of a peer group of the
25 largest bank holding companies in the nation ranging from 50% of the base
salaries of all participants in the Long-Term Plan for the last year of the
applicable period if such rank is one, to 27% of such base salaries if such rank
is 13.
Under the Long-Term Plan as currently in effect, participants receive awards
from the incentive pool, including amounts in the pool carried over from prior
years because they were not awarded in such years, on the basis of individual
performance as determined by the HR Committee; provided, however, that the
maximum award for an individual may not exceed 100% of the individual's base
salary.
28

<PAGE>
Long-Term Plan Amendments
The Long-Term Plan Amendments provide that prior to April 1, 1994, as to
awards for the 1994-1996 three-year period, and prior to January 1 of each year
thereafter as to awards for each three-year period thereafter, the HR Committee
shall determine the Expected OBRA Officers and an average ROE performance goal
(based on Adjusted Net Income) that will need to be attained by the Corporation
for each such three-year period in order to permit any awards to be made to the
Expected OBRA Officers for such period. The Long-Term Plan provides that the
amount of any award to an Expected OBRA Officer will be designated as 100% of
the Expected OBRA Officer's base salary as of December 31 of the last year of
the period for which the award is made; provided, however, the HR Committee, in
its discretion, may reduce the amount of any such award prior to payment. The
Expected OBRA Officers (the Named Officers indicated above) and an average ROE
performance goal of 12% for the 1994-1996 three-year period were determined by
the HR Committee in February 1994.
Awards are payable at any time during the year following the end of the
applicable period for which the awards are earned, except for awards payable to
Expected OBRA Officers. Such awards are payable on or after the June 30th of
such following year; provided, however, such awards may be paid prior to such
June 30th if they are discounted at a rate intended to reflect the time value of
money.
If the Long-Term Plan Amendments are approved by the stockholders,
compensation payable to the Expected OBRA Officers under the Long-Term Plan will
be subject to a more objective standard than under the Long-Term Plan as it
currently exists. If the Corporation meets the ROE performance goals established
by the HR Committee, it is not expected that there would be a significant
increase in the compensation payable to the Expected OBRA Officers under the
Long-Term Plan, as so amended.
In addition, if the Long-Term Plan Amendments are approved by the
stockholders, according to OBRA the Long-Term Plan Amendments must be reapproved
by the stockholders (i) if the terms of the performance goal are materially
changed, and (ii) in any event after five years. Pursuant to OBRA, the
determination of different ROE performance goals for each three-year period by
the HR Committee is not considered to be a material change in the terms of the
performance goal that must be approved by stockholders.
Under OBRA, the deductibility of compensation relating to awards under the
Long-Term Plan for the 1991-1993, 1992-1994 and 1993-1995 three-year periods may
not be grandfathered, and since each of such three-year periods has previously
commenced, such awards cannot be included in the Long-Term Plan Amendments.
Therefore, the Corporation may not be able to deduct all or a portion of awards
made to the Actual OBRA Officers for such periods.
Since awards under the Long-Term Plan cover a three-year period, an executive
officer not designated as an Expected OBRA Officer prior to the commencement of
such period may thereafter become an Actual OBRA Officer during such period, in
which case the Corporation may not be able to deduct all or a portion of the
compensation payable to such executive officer with respect to such award.
The Long-Term Plan Amendments and the foregoing discussion are based on the
proposed OBRA regulations. To the extent the final OBRA regulations differ from
the proposed OBRA regulations (i) the Long-Term Plan may be further amended by
the HR Committee to reflect the final OBRA regulations (without stockholder
approval unless such approval is required by the final OBRA regulations), and
29

<PAGE>
(ii) the foregoing discussion is qualified in its entirety and shall be subject
to the terms and conditions of the final OBRA regulations.
Long-Term Plan Benefits
The following table sets forth the awards granted under the Long-Term Plan in
June 1993 to the individuals and groups indicated for the 1991-1992 two-year
period.
<TABLE>
<CAPTION>
Long-Term Cash Incentive Plan
1993 Awards for 1991-1992
<S> <C>
Crutchfield........................................................................ $ 375,000
Georgius........................................................................... 262,500
Hodnett............................................................................ 182,500
Atwood............................................................................. 127,500
Walker............................................................................. 127,500
Executive Group.................................................................... 1,910,000
Non-Executive Director Group....................................................... 0
Non-Executive Employee Group....................................................... 2,174,900
</TABLE>

THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF SHARES OF COMMON STOCK
VOTED THEREON IS REQUIRED TO APPROVE THE 1992 PLAN AMENDMENTS, THE SHORT-TERM
PLAN AMENDMENTS AND THE LONG-TERM PLAN AMENDMENTS. THE BOARD OF DIRECTORS
RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF THE 1992 PLAN AMENDMENTS, THE
SHORT-TERM PLAN AMENDMENTS AND THE LONG-TERM PLAN AMENDMENTS. PROXIES, UNLESS
INDICATED TO THE CONTRARY, WILL BE VOTED FOR APPROVAL OF THE 1992 PLAN
AMENDMENTS, THE SHORT-TERM PLAN AMENDMENTS AND THE LONG-TERM PLAN AMENDMENTS.
PROPOSAL 6. RATIFICATION OF APPOINTMENT OF AUDITORS
The accounting firm of KPMG Peat Marwick has been appointed the Corporation's
auditors for the year 1994 and, in accordance with established policy, such
appointment is being submitted to the stockholders for ratification. In the
event the appointment is not ratified by a majority of shares voted, in person
or by proxy, it is anticipated that no change in auditors would be made for the
current year because of the difficulty and expense of making any change so long
after the beginning of the current year, but such vote would be considered in
connection with the appointment of auditors for 1995.
KPMG Peat Marwick were auditors of the Corporation for the year ended December
31, 1993, and a representative of such firm is expected to attend the Meeting,
respond to appropriate questions from stockholders and proxyholders present at
the Meeting and if such representative desires, which is not now anticipated,
make a statement.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF SHARES OF COMMON STOCK
VOTED THEREON IS REQUIRED TO APPROVE THIS PROPOSAL. THE BOARD OF DIRECTORS
RECOMMENDS THAT STOCKHOLDERS VOTE FOR THIS PROPOSAL. PROXIES, UNLESS INDICATED
TO THE CONTRARY, WILL BE VOTED FOR THIS PROPOSAL.
OTHER MATTERS; STOCKHOLDER PROPOSALS
Management of the Corporation is not aware of any other matters which are to
be presented at the Meeting but if any such matters are so presented which may
require a vote of the stockholders, the enclosed proxy shall be deemed to confer
discretionary authority to the individuals named as proxies therein to vote the
shares represented by such proxy as to any such matters. The Corporation's By-
laws include provisions setting forth specific conditions under which business
may be transacted at an annual meeting of stockholders.
30

<PAGE>
Proposals of stockholders intended to be presented at the 1995 Annual Meeting
of Stockholders of the Corporation should be received by the Corporation at its
offices at One First Union Center, Charlotte, North Carolina 28288-0013,
Attention: Corporate Secretary, on or before November 12, 1994, in order to be
considered for inclusion in the Corporation's proxy statement and form of proxy
relating to that meeting. The submission of such proposals by stockholders and
the consideration of such proposals by the Corporation for inclusion in next
year's proxy statement and form of proxy are subject to applicable rules and
regulations of the Securities and Exchange Commission.
March 10, 1994
A COPY OF THE CORPORATION'S 1993 ANNUAL REPORT ON FORM 10-K IS AVAILABLE
WITHOUT CHARGE (EXCEPT FOR EXHIBITS) UPON WRITTEN REQUEST TO FIRST UNION
CORPORATION, INVESTOR RELATIONS, TWO FIRST UNION CENTER, CHARLOTTE, NC
28288-0206, ATTENTION: T. SEAN FOX.
31

<PAGE>
FIRST UNION CORPORATION
P R O X Y
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of First Union Corporation (the Corporation)
hereby constitutes and appoints W. Waldo Bradley, Robert D. Davis and Leonard G.
Herring and each of them, with full power of substitution, attorneys and proxies
to appear and vote, as indicated below, all of the shares of Common Stock of the
Corporation held of record by the undersigned on March 1, 1994, at the Annual
Meeting of Stockholders of the Corporation to be held on April 19, 1994, and at
any and all adjournments thereof.
1. PROPOSAL TO ELECT THE NINE NOMINEES LISTED BELOW AS CLASS II DIRECTORS TO
SERVE FOR TERMS EXPIRING AT THE 1997 ANNUAL MEETING OF STOCKHOLDERS, AND
UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND QUALIFIED.
<TABLE>
<S> <C>
( ) FOR all nominees listed below ( ) WITHHOLD AUTHORITY
below)(except as marked to the contrary to vote for all nominees listed below.
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Robert D. Davis; Roddy Dowd, Sr.; William H. Goodwin, Jr.; Torrence E. Hemby,
Jr.; Jack A. Laughery; Radford D. Lovett; Randolph N. Reynolds; John D. Uible;
and Kenneth G. Younger
2. PROPOSAL TO APPROVE THE CORPORATION'S 1994 EMPLOYEE STOCK PURCHASE PLAN.
( ) FOR ( ) AGAINST ( ) ABSTAIN
3. PROPOSAL TO APPROVE CERTAIN AMENDMENTS TO THE CORPORATION'S 1992 MASTER
STOCK COMPENSATION PLAN INTENDED TO PRESERVE THE CORPORATION'S FEDERAL
INCOME TAX DEDUCTION WITH RESPECT TO CERTAIN COMPENSATION PAYABLE UNDER
SUCH PLAN.
( ) FOR ( ) AGAINST ( ) ABSTAIN
4. PROPOSAL TO APPROVE CERTAIN AMENDMENTS TO THE CORPORATION'S MANAGEMENT
INCENTIVE PLAN INTENDED TO PRESERVE THE CORPORATION'S FEDERAL INCOME TAX
DEDUCTION WITH RESPECT TO CERTAIN COMPENSATION PAYABLE UNDER SUCH PLAN.
( ) FOR ( ) AGAINST ( ) ABSTAIN
5. PROPOSAL TO APPROVE CERTAIN AMENDMENTS TO THE CORPORATION'S MANAGEMENT
LONG-TERM CASH INCENTIVE PLAN INTENDED TO PRESERVE THE CORPORATION'S
FEDERAL INCOME TAX DEDUCTION WITH RESPECT TO CERTAIN COMPENSATION PAYABLE
UNDER SUCH PLAN.
( ) FOR ( ) AGAINST ( ) ABSTAIN
(continued on other side)

<PAGE>
6. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK AS AUDITORS OF THE
CORPORATION
FOR 1994.
( ) FOR ( ) AGAINST ( ) ABSTAIN
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 THROUGH 6. THE PROXIES ARE AUTHORIZED TO VOTE ON SUCH OTHER
BUSINESS AS MAY COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF, IN THEIR
SOLE DISCRETION.

SIGNATURE(S) OF STOCKHOLDER
Please sign exactly as name appears
on this proxy. When shares are held
by joint tenants, both should sign.
When signing on behalf of a
corporation or partnership, or as
attorney, agent or fiduciary, please
indicate the capacity in which you
are signing.
Dated: , 1994
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.

******************************************************************************
APPENDIX

On the Dear Stockholder page a First Union logo and a signature of
Edward E. Crutchfield, Jr. appear where indicated.

On the Notice of Annual Meeting a signature of Edward E. Crutchfield, Jr.
appears where indicated.

On Pages 3 through 8 corresponding pictures of the nominees appear
where indicated next to their names.

On page 18 the Performance Graph appears where noted. The plot points
for the graph are listed in the table below that point.