<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 (SECTION MARK)240.14A-11(C) OR
(SECTION MARK)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):
[x]$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:
1SET FORTH THE AMOUNT ON WHICH THE FILING FEE IS CALCULATED AND STATE HOW IT WAS
DETERMINED.
[x]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:
$125
2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:
Schedule 14A
3) FILING PARTY:
First Union Corporation
4) DATE FILED:
3/12/96
<PAGE>
(First Union logo appears here)
March 7, 1996
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 16, 1996, beginning
at 9:30 a.m., Eastern time.
The notice of meeting and proxy statement which appear on the
following pages contain information about 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 appears here)
Edward E. Crutchfield
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 16, 1996
March 7, 1996
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 16, 1996, at 9:30 a.m., Eastern time, for the purpose of
considering and acting on the following matters:
1. A proposal to elect the 12 nominees named in the attached
proxy statement as directors of the Corporation, nine nominees
to serve as Class I directors with terms expiring at the 1999
Annual Meeting of Stockholders, one nominee to serve as a
Class II director with a term expiring at the 1997 Annual
Meeting of Stockholders, and two nominees to serve as Class
III directors with terms expiring at the 1998 Annual Meeting
of Stockholders, in each case until their successors are duly
elected and qualified;
2. A proposal to approve the Corporation's 1996 Employee Stock
Purchase Plan;
3. A proposal to approve the Corporation's 1996 Master Stock
Compensation Plan;
4. A proposal to ratify the appointment of KPMG Peat Marwick LLP
as auditors of the Corporation for the year 1996; and
5. Such other business as may properly come before the Meeting or
any adjournments thereof.
Only holders of record of the Corporation's Common Stock and Series B
Convertible Class A Preferred Stock on the books of the Corporation at
the close of business on February 23, 1996, are entitled to notice of
and to vote at the Meeting.
By Order of the Board of Directors
(Signature of Marion A. Cowell, Jr. appears here)
Marion A. Cowell, Jr.
Secretary
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 16, 1996, at 9:30 a.m., Eastern time. 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 thereon. If no specification is
made, proxies will be voted in favor of approval of Proposals 1 through 4
described below. This proxy statement and the enclosed form of proxy, Summary
Annual Report and Financial Supplements are being first mailed to the
Corporation's stockholders entitled to notice of and to vote at the Meeting, on
or about March 12, 1996. The Summary Annual Report and Financial Supplements do
not constitute "soliciting material" and are not to be deemed "filed" with the
Securities and Exchange Commission (the "Commission").
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 $8,000, plus expenses.
VOTING SECURITIES AND PRINCIPAL HOLDERS
As of February 23, 1996 (the "Record Date"), the Corporation had
outstanding 280,977,492 shares of Common Stock, par value $3.33 1/3 per share
("Common Stock"), and 2,742,338 shares of Series B Convertible Class A Preferred
Stock, no-par value ("Series B Preferred Stock"). Each holder of Common Stock
will have the right to one vote, and each holder of Series B Preferred Stock
will have the right to 0.52655 of a vote for each share of such stock standing
in such holder's name on the books of the Corporation as of the close of
business on the Record Date with respect to each of the matters voted on at the
Meeting. In the aggregate, there will be 282,421,470 votes entitled to be cast.
The holders of Common Stock and Series B Preferred Stock will vote together as a
single class on all matters voted on at the Meeting.
The presence in person or by proxy of a majority of the votes entitled to
be cast will constitute a quorum for purposes of conducting business at the
Meeting. For purposes of determining the votes cast with respect to any matter
presented for consideration at the Meeting only those votes cast
1
<PAGE>
"FOR" or "AGAINST" are included. Abstentions will be counted solely for the
purpose of determining whether a quorum is present.
Based upon information available to the Corporation, the following
stockholder beneficially owned more than 5% of the Common Stock as of the date
indicated:
<TABLE>
<CAPTION>
Name and Address Number of
of Beneficial Owner (1) Shares Owned Percent
<S> <C> <C>
Banco Santander, S.A. ("Santander") 31,751,923 11.3%
Paseo de la Castellana 24
28046 Madrid, Spain
</TABLE>
(1) The information presented, including the number of shares owned, is based on
a Schedule 13D dated January 10, 1996, filed by Santander with the
Commission. Santander is a bank holding company incorporated in Spain. The
shares are owned by a wholly-owned subsidiary of Santander, FFB
Participacoes e Servicos, S.A., a holding company incorporated in Portugal.
The shares were acquired in exchange for shares of common stock of First
Fidelity Bancorporation ("FFB"), which was acquired by the Corporation on
January 1, 1996. The percentage indicated is based on the number of shares
of Common Stock outstanding on the Record Date. See "Other Matters Relating
to Executive Officers, Directors and Principal Stockholders" for additional
information relating to Santander, including information relating to certain
restrictions as to the voting of Santander's shares of Common Stock in
excess of 9.9% of the outstanding voting securities of the Corporation.
2
<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. For
purposes of the election of directors at the Meeting the number of directors has
been fixed at 29.
The terms of office of the current directors serving in Class I will expire at
the Meeting, and except as otherwise indicated below, the terms of office of the
current directors serving in Classes II and III will expire at the 1997 and 1998
Annual Meetings of Stockholders, respectively, in each case until their
successors are duly elected and qualified.
Messrs. Brown, Crutchfield, Dickson, Inciarte, Lennon, Neubauer, Terracciano
and Walker, and Dr. Shaw, who are currently serving as directors in Class I, are
being nominated to serve as directors in Class I with terms expiring at the 1999
Annual Meeting of Stockholders and until their successors are duly elected and
qualified. In addition, Mr. Goldberg, who is currently serving as a director in
Class II, is being nominated to serve as a director in Class II with a term
expiring at the 1997 Annual Meeting of Stockholders, and Messrs. Barr and Henry,
who are currently serving as directors in Class III, are being nominated to
serve as directors in Class III with terms expiring at the 1998 Annual Meeting
of Stockholders, in each case until their successors are duly elected and
qualified.
Messrs. Barr, Goldberg, Henry, Inciarte, Neubauer and Terracciano were elected
directors of the Corporation by the Board of Directors effective as of January
1, 1996, pursuant to the agreement (the "FFB Agreement") to acquire FFB. Messrs.
Barr, Goldberg and Henry are being nominated to serve as directors in Classes
with current terms that extend beyond the Meeting because under North Carolina
law the terms of directors elected by a board of directors cannot extend beyond
the next annual meeting of stockholders. Pursuant to the foregoing, following
the Meeting there will be nine directors in Class I, ten directors in Class II
and ten directors in Class III.
Unless a director reaches retirement age during his term in office (i.e., age
70), 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.
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, to the extent
permitted by applicable law, 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 I DIRECTORS TO SERVE FOR TERMS EXPIRING
AT THE 1999 ANNUAL MEETING OF STOCKHOLDERS, THE NOMINEE NAMED BELOW AS A CLASS
II DIRECTOR TO SERVE FOR A TERM EXPIRING AT THE 1997 ANNUAL MEETING OF
STOCKHOLDERS, AND THE TWO NOMINEES NAMED BELOW AS CLASS III DIRECTORS TO SERVE
FOR TERMS EXPIRING AT THE 1998 ANNUAL MEETING OF STOCKHOLDERS, IN EACH CASE
UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND QUALIFIED.
3
<PAGE>
Listed below are the names of the nine nominees to serve as Class I directors,
the nominee to serve as a Class II director, the two nominees to serve as Class
III directors, and the 17 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
"1934 Act"); 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, 1996. As of such date, no director
beneficially owned more than 1% of the outstanding shares of Common Stock. See
footnote (2) following the list of directors for information relating to
ownership of the Corporation's three outstanding series of Class A Preferred
Stock.
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Shares
and Certain Other Directorships Since Owned (1)
CLASS I NOMINEES FOR ELECTION TO TERMS EXPIRING IN 1999
<S> <C> <C> <C>
(Photo) ROBERT J. BROWN (61). Chairman, President and Chief Executive 1993 450
Officer, B&C Associates, Inc., High Point, North Carolina, a
public relations and marketing research firm. Director, Duke
Power Company and Sonoco Products Company.
(Photo) EDWARD E. CRUTCHFIELD (54). Chairman and Chief Executive Officer, 1977 237,238
the Corporation. Director, BellSouth Telecommunications, Inc.,
Bernhardt Industries, Inc., Liberty Corporation and VF
Corporation. (1)
(Photo) R. STUART DICKSON (66). Chairman of the Executive Committee, 1985 31,088
Ruddick Corporation, Charlotte, North Carolina, a diversified
holding company, since February 1994. Formerly, Chairman, Ruddick
Corporation. Director, Dimon Incorporated, PCA International,
Inc., Ruddick Corporation, Textron, Inc. and United Dominion
Industries. (1)
(Photo) JUAN RODRIGUEZ INCIARTE (43). Executive Vice President and January 1, 270
Director, Santander. Mr. Inciarte, who was formerly a director of 1996
FFB, was elected a director of the Corporation by the Board of
Directors in December 1995, effective as of January 1, 1996,
pursuant to the terms of the FFB Agreement. (1) (3)
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Shares
and Certain Other Directorships Since Owned (1)
<S> <C> <C> <C>
(Photo) MAX LENNON (55). President, Mars Hill College, Mars Hill, North 1988 100
Carolina, since March 1, 1996. Formerly, President and Chief
Executive Officer, Eastern Foods, Inc., Atlanta, Georgia, a food
manufacturer and distributor, from August 1994 through February
1996, and President, Clemson University, Clemson, South Carolina,
prior to August 1994. Director, Delta Woodside Industries, Inc.
and Duke Power Company.
(Photo) JOSEPH NEUBAUER (54). Chairman, President and Chief Executive January 1, 5,832
Officer, ARAMARK Corporation, Philadelphia, Pennsylvania, a 1996
services management company. Mr. Neubauer, who was formerly a
director of FFB, was elected a director of the Corporation by the
Board of Directors in December 1995, effective as of January 1,
1996, pursuant to the FFB Agreement. Director, Bell Atlantic
Corporation, Federated Department Stores, Inc. and Penn Mutual
Life Insurance Co.
(Photo) RUTH G. SHAW (48). Senior Vice President, Corporate Resources 1990 1,000
(since April 1994), and Chief Administrative Officer (since
August 1994), Duke Power Company, Charlotte, North Carolina, an
investor-owned electric utility. Formerly, Vice President,
Corporate Communications, Duke Power Company, from September 1992
to April 1994, and President, Central Piedmont Community College,
prior to September 1992. (1)
(Photo) ANTHONY P. TERRACCIANO (57). President, the Corporation, since January 1, 90,173
January 1, 1996. Mr. Terracciano, who was formerly Chairman of 1996
the Board, President and Chief Executive Officer of FFB, was
elected to his present office and a director of the Corporation
by the Board of Directors in December 1995, effective as of
January 1, 1996, pursuant to the FFB Agreement. Director,
Santander. (1) (2) (3)
(Photo) B. J. WALKER (65). Vice Chairman, the Corporation. (1) 1987 104,251
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Shares
and Certain Other Directorships Since Owned (1)
CLASS II NOMINEE FOR ELECTION TO A TERM EXPIRING IN 1997
<S> <C> <C> <C>
(Photo) ARTHUR M. GOLDBERG (54). Chairman, President and Chief Executive January 1, 216,714
Officer, Bally Entertainment Corporation, Chicago, Illinois, a 1996
diversified holding company engaged in the casino and
entertainment businesses. Mr. Goldberg, who was formerly a
director of FFB, was elected a director of the Corporation by the
Board of Directors in December 1995, effective as of January 1,
1996, pursuant to the terms of the FFB Agreement. Director,
DiGiorgio Corporation. (1)
</TABLE>
CLASS III NOMINEES FOR ELECTION TO TERMS EXPIRING IN 1998
<TABLE>
<S> <C> <C> <C>
(Photo) EDWARD E. BARR (59). Chairman, President and Chief Executive January 1, 64,438
Officer, Sun Chemical Corporation, Fort Lee, New Jersey, a 1996
graphic arts materials company. Mr. Barr, who was formerly a
director of FFB, was elected a director of the Corporation by the
Board of Directors in December 1995, effective as of January 1,
1996, pursuant to the FFB Agreement. Director, United Water
Resources Inc.
(Photo) FRANK M. HENRY (62). Chairman, Frank Martz Coach Company, January 1, 298,968
Wilkes-Barre, Pennsylvania, bus transportation. Mr. Henry, who 1996
was formerly a director of FFB, was elected a director of the
Corporation by the Board of Directors in December 1995, effective
as of January 1, 1996, pursuant to the FFB Agreement. Director,
C-Tec Corporation. (1)
</TABLE>
INCUMBENT CLASS II DIRECTORS -- TERMS EXPIRING IN 1997
<TABLE>
<S> <C> <C> <C>
(Photo) ROBERT D. DAVIS (64). Chairman, D.D.I., Inc., Jacksonville, 1985 958,500
Florida, investments. Director, American Heritage Life Investment
Corporation, Florida Rock Industries, Inc., Stein Mart, Inc. and
Winn-Dixie Stores, Inc. (1)
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Shares
and Certain Other Directorships Since Owned (1)
<S> <C> <C> <C>
(Photo) RODDEY DOWD, SR. (63). Chairman, Charlotte Pipe and Foundry 1988 8,805
Company, Charlotte, North Carolina, a manufacturer of pipe and
fittings. Director, Ruddick Corporation.
WILLIAM H. GOODWIN, JR. (55). Chairman, AMF Companies, Richmond, 1993 23,000
Virginia, a manufacturer of sports and other equipment and an
operator of bowling centers worldwide. Director, Basset Furniture
Industries, Incorporated.
(Photo) BRENTON S. HALSEY (68). Chairman Emeritus, James River 1993 8,340
Corporation, Richmond, Virginia, a marketer and manufacturer of
consumer products, since February 1992. Formerly, Chairman, James
River Corporation. Director, Westmoreland Coal Company.
(Photo) JACK A. LAUGHERY (61). Chairman, The Bagel Group, Inc., Rocky 1978 5,968
Mount, North Carolina, a restaurant developer, since January
1995. Formerly, Chairman, Hardee's Food Systems, Inc., Rocky
Mount, North Carolina, a fast food chain. Director, Papa John's
International Inc. and Sprint Mid-Atlantic Telecom.
(Photo) RADFORD D. LOVETT (62). Chairman, Commodores Point Terminal 1985 181,546
Corp., Jacksonville, Florida, an operator of a marine terminal
and a real estate management company. Director, American Heritage
Life Investment Corporation, Florida Rock Industries, Inc., FRP
Properties, Inc. and Winn-Dixie Stores, Inc.
(Photo) HENRY D. PERRY, JR., M.D. (69). Physician, Plantation, Florida. 1985 655,009
(1)
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Shares
and Certain Other Directorships Since Owned (1)
(Photo) RANDOLPH N. REYNOLDS (54). Vice Chairman, Reynolds Metals 1993 609
Company, Richmond, Virginia, an aluminum manufacturer, since
January 1994. Formerly, Executive Vice President, Reynolds Metals
Company. Director, Reynolds Metals Company.
<S> <C> <C> <C>
(Photo) JOHN D. UIBLE (60). Investor, Jacksonville, Florida. Director, 1990 10,000
St. Joe Paper Company.
</TABLE>
INCUMBENT CLASS III DIRECTORS -- TERMS EXPIRING IN 1998
<TABLE>
<S> <C> <C> <C>
(Photo) G. ALEX BERNHARDT (52). President and Chief Executive Officer, 1992 4,806
Bernhardt Furniture Company, Lenoir, North Carolina, a
residential and institutional furnishings manufacturer. Director,
Duke Power Company. (1)
(Photo) W. WALDO BRADLEY (62). Chairman, Bradley Plywood Corporation, 1986 52,277
Savannah, Georgia, building materials. Director, Atlanta Gas
Light Company and Savannah Foods & Industries, Inc. (1)
(Photo) B. F. DOLAN (68). Investor. Formerly, Chairman, Textron, Inc., 1977 25,698
Providence, Rhode Island, a manufacturer of aerospace, consumer,
industrial and other products. Director, FPL Group, Inc., Polaris
Industries, Inc., Ruddick Corporation and Textron, Inc.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Name, Age, Principal Occupation Director Shares
and Certain Other Directorships Since Owned (1)
<S> <C> <C> <C>
(Photo) JOHN R. GEORGIUS (51). Vice Chairman, the Corporation, since 1988 151,805
January 1, 1996. Formerly, President, the Corporation, from
February 1993 to January 1, 1996, and Chairman and Chief
Executive Officer, First Union National Bank of North Carolina
("FUNB-NC"), a subsidiary of the Corporation, Charlotte, North
Carolina, prior to February 1993. (1)
(Photo) HOWARD H. HAWORTH (61). President, The Haworth Group and The 1986 12,000
Haworth Foundation, Inc., Charlotte, North Carolina, investments.
(1)
(Photo) LEONARD G. HERRING (68). 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.
(Photo) LANTY L. SMITH (53). 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 (64). Chairman, Cone Mills Corporation, 1986 616
Greensboro, North Carolina, a textile manufacturer. Director,
Cone Mills Corporation.
</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, 1996, except for the following shares over
which the directors indicated, and such directors and the six executive
officers of the Corporation (Messrs. Crutchfield, Georgius, Terracciano,
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
9
<PAGE>
investment power: Mr. Bernhardt -- 1,726 shares; Mr. Davis -- 946,000
shares; Mr. Dickson -- 25,000 shares; Mr. Georgius -- 212 shares; Mr.
Goldberg -- 1,133 shares; Mr. Henry -- 7,284 shares; Dr. Perry -- 621,079
shares; Dr. Shaw -- 1,000 shares; Mr. Walker -- 30,000 shares; and members
of the group (including the foregoing) -- 1,635,534 shares.
The current directors and executive officers of the Corporation
beneficially owned a total of 3,253,704 shares, or approximately 1% of the
outstanding shares of Common Stock as of January 31, 1996. 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, 1996, or
within 60 days thereafter, by the directors indicated, and by the
directors and such executive officers as a group: Mr.
Crutchfield -- 136,904 shares; Mr. Georgius -- 69,762 shares; Mr.
Walker -- 11,214 shares; and members of the group (including the
foregoing) -- 246,103 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. Bradley -- 30,564 shares; Mr. Davis --
185,000 shares; Mr. Georgius -- 1,063 shares; Mr. Haworth -- 15,700
shares; Dr. Perry -- 284,378 shares; Mr. Smith -- 1,350 shares; and Mr.
Terracciano -- 2,700 shares. The shares of Common Stock beneficially owned
by Mr. Inciarte exclude the shares of Common Stock beneficially owned by
Santander.
(2) As of January 31, 1996, none of the directors or nominees were the
beneficial owners of any shares of the Corporation's Series B Preferred
Stock, Series D Adjustable Rate Cumulative Class A Preferred Stock, or
Series F 10.64% Class A Preferred Stock ("Series F Preferred Stock"),
except for Mr. Terracciano, who beneficially owned 4,050 depositary
shares, each representing a 1/40th interest in a share of Series F
Preferred Stock, which represents less than 1% of the outstanding shares
of such series as of such date.
(3) See "Other Matters Relating to Executive Officers, Directors and Principal
Stockholders".
COMMITTEES AND ATTENDANCE
Executive Committee. The Executive Committee of the Board of Directors held
six meetings in 1995. 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 Bylaws of the Corporation or by statute. The following
directors are the current members of the Executive Committee: Dolan (Chairman),
Crutchfield, Davis, Dickson, Goldberg, Goodwin, Herring, Lovett, Neubauer,
Smith, Terracciano and Walker.
Audit Committee. The Audit Committee of the Board of Directors held five
meetings in 1995. 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: Bernhardt (Chairman), Haworth (Vice Chairman), Brown, Henry, Perry
and Reynolds.
10
<PAGE>
Financial Management Committee. The Financial Management Committee of the
Board of Directors held five meetings in 1995. 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: Davis (Chairman), Smith (Vice Chairman), Dowd,
Georgius, Goldberg, Goodwin, Halsey, Inciarte, Laughery, Lennon, Neubauer, Shaw
and Uible.
Human Resources Committee. The Human Resources Committee of the Board of
Directors (the "HR Committee") held five meetings in 1995. 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), Barr, Bradley, Dolan, Torrence E. Hemby, Jr. (a retiring director),
Lovett and Trogdon.
Nominating Committee. The Nominating Committee of the Board of Directors held
one meeting in 1995. 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, Goodwin, Herring, Lovett and Terracciano. The Corporation's Bylaws
include provisions setting forth specific conditions under which persons may be
nominated as directors of the Corporation at an annual meeting of stockholders.
A copy of such provisions is available upon request to: First Union Corporation,
One First Union Center, Charlotte, North Carolina 28288-0013, Attention:
Corporate Secretary.
Attendance. The Board of Directors of the Corporation held eight meetings in
1995. In 1995, 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 Mr. Uible, who was not able to attend at
least 75% of such meetings because of illness, business or other conflicts.
11
<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 five 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, 1995, and who the Corporation considers executive
officers for purposes of such determination (the CEO and such executive
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 current 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 Payouts
Other Annual Restricted Underlying LTIP
Name and Current Salary Bonus Compensation Stock Awards Options/SARs Payouts
Principal Position Year ($) (1) ($) (1) ($) (2) ($) (3) (#) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h)
Edward E. Crutchfield 1995 850,000 1,700,000 36,319 834,811 61,345 835,000
Chairman and Chief 1994 835,000 835,000 93,723 718,000 44,000 448,740
Executive Officer, 1993 810,000 810,000 30,289 720,000 24,000 375,000
the Corporation
John R. Georgius 1995 665,000 1,000,000 20,353 599,874 31,595 600,000
Vice Chairman, 1994 600,000 600,000 25,039 448,750 15,000 323,384
the Corporation 1993 590,000 590,000 21,017 450,000 15,000 262,500
Byron E. Hodnett 1995 395,000 475,000 14,000 295,350 15,400 325,000
Chief Executive Officer, 1994 395,000 395,000 11,765 269,250 9,000 212,905
First Union National Bank of 1993 395,000 395,000 4,771 270,000 9,000 182,500
Florida
Austin A. Adams 1995 300,000 450,000 9,521 250,600 8,400 181,497
Executive Vice President and 1994 300,000 300,000 15,847 197,450 6,600 164,446
Automation and Operations 1993 300,000 300,000 8,991 198,000 6,600 125,000
Group Head, the Corporation
Donald A. McMullen (5) 1995 343,750 675,000(5) 25,220 447,500 10,000 0
Executive Vice President
and Capital Management
Group Head, FUNB-NC
Robert T. Atwood 1995 355,000 355,000 13,841 241,650 12,600 201,000
Executive Vice 1994 335,000 335,000 17,104 215,400 7,200 176,961
President and 1993 325,000 325,000 19,879 216,000 7,200 127,500
Chief Financial Officer,
the Corporation
<CAPTION>
All Other
Name and Current Compensation
Principal Position ($) (4)
<S> <C>
(a) (i)
Edward E. Crutchfield 190,387
Chairman and Chief 179,018
Executive Officer, 54,049
the Corporation
John R. Georgius 102,752
Vice Chairman, 48,896
the Corporation 39,177
Byron E. Hodnett 116,148
Chief Executive Officer, 36,823
First Union National Bank of 27,037
Florida
Austin A. Adams 42,333
Executive Vice President and 31,998
Automation and Operations 14,634
Group Head, the Corporation
Donald A. McMullen (5) 1,211
Executive Vice President
and Capital Management
Group Head, FUNB-NC
Robert T. Atwood 49,535
Executive Vice 29,698
President and 23,821
Chief Financial Officer,
the Corporation
</TABLE>
12
<PAGE>
(1) Amounts include dollars deferred by the Named Officers under the
Corporation's voluntary Deferred Compensation Plans. At the election of the
participants in such Plans, account balances are paid in a lump sum or in
ten annual installments upon termination of employment due to death,
disability or retirement, except in the event of a "change in control" of
the Corporation where the successor or acquiring corporation does not elect
to continue such Plans, in which case such balances are to be paid in a lump
sum. The Corporation has established a nonqualified retirement trust (the
"Trust") for the purpose of providing a source of funds to assist the
Corporation in meeting its liabilities under certain unfunded nonqualified
benefit plans, including the Deferred Compensation Plans and the
Supplemental Retirement Plan. In its discretion, the Corporation may
designate additional plans to be covered by the Trust. Prior to a "change in
control" of the Corporation, benefits are paid from the Trust only upon the
direction of the Corporation. Upon the occurrence of a "change in control",
the Corporation is required to make an irrevocable asset contribution to the
Trust in an amount sufficient to pay each plan participant or beneficiary
the benefits to which such participant or beneficiary would be entitled
pursuant to the terms of such Plans as of the date on which the "change in
control" occurs.
(2) Information regarding any personal benefit that totals less than $50,000 is
not required and is not included in the amounts indicated. Dollar amounts
indicated for 1995 consist of amounts reimbursed for the payment of taxes on
certain personal benefits.
(3) The aggregate number of shares of restricted stock held as of December 31,
1995, and the value thereof as of such date, were as follows: Crutchfield:
48,655 shares ($2,706,434); Georgius: 32,005 shares ($1,780,278); Hodnett:
18,000 shares ($1,001,250); Adams: 13,960 shares ($776,525); McMullen:
10,000 shares ($556,250); and Atwood: 14,120 shares ($785,425). Restricted
stock awards granted in 1995 vest at a rate of 20% per year over five years
or upon termination due to death, retirement at age 65 or a "change in
control" of the Corporation. Dividends on shares of restricted stock are
paid quarterly.
(4) Amounts shown for 1995 consist of the following:
<TABLE>
<CAPTION>
Crutchfield Georgius Hodnett Adams McMullen Atwood
<S> <C> <C> <C> <C> <C> <C>
Savings Plan matching contributions............... $ 51,000 39,900 23,700 18,000 0 21,300
Value of life insurance premiums.................. 136,394 27,137 14,589 12,544 1,211 24,288
Value of disability insurance premiums............ 0 1,480 0 2,082 0 3,544
Above market interest on deferred compensation.... 2,593 34,235 77,859 9,708 0 403
Bonus for use of real estate referral program..... 400 0 0 0 0 0
</TABLE>
The value of life insurance premiums for Messrs. Crutchfield, Georgius,
Hodnett, Adams and Atwood includes the value of premiums advanced by the
Corporation under a split-dollar life insurance agreement with the
Corporation. The Corporation may terminate such agreement and receive its
interest in the life insurance policy under certain conditions, including
termination of employment (other than due to death, disability or retirement,
unless such terminated employee becomes affiliated with a competitor
following any such termination due to disability or retirement), provided the
Corporation may not terminate the agreement if such termination of employment
or affiliation occurs after a "change in control" of the Corporation.
(5) Mr. McMullen was not employed by the Corporation prior to 1995. The 1995
bonus amount includes a $300,000 bonus paid at the time Mr. McMullen was
employed by the Corporation.
Option/SAR Grants Table
The following table sets forth with respect to grants of stock options made
during 1995 to each of the Named Officers: (i) the name of such officer (column
(a)); (ii) the number of options granted (column (b)); (iii) the percent the
grant represents of the total options granted to all employees during 1995
(column (c)); (iv) the per share exercise price of the options granted (column
(d)); (v) the expiration date of the options (column e)); and (vi) the
Black-Scholes value of the options at grant date (column (f)).
OPTION/SAR GRANTS IN 1995
<TABLE>
<CAPTION>
Individual Grants
Number of Securities % of Total
Underlying Options/SARs Options/SARs Granted Exercise or Black-Scholes
Granted (1) to Employees Base Price Expiration Grant Date Value (2)
Name (#) in 1995 ($/Sh) Date ($)
<S> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f)
Crutchfield 61,345 6.42 44.75 6/19/05 773,560
Georgius 31,595 3.31 44.75 6/19/05 398,413
Hodnett 15,400 1.61 44.75 6/19/05 194,194
Adams 8,400 .88 44.75 6/19/05 105,924
McMullen 10,000 1.05 44.75 6/19/05 126,100
Atwood 12,600 1.32 44.75 6/19/05 158,886
</TABLE>
13
<PAGE>
(1) Options granted are nonqualified stock options except for options granted to
Mr. McMullen to purchase 2,234 shares of Common Stock, which are incentive
stock options ("ISOs") under (section mark)422 of the Internal Revenue Code
of 1986, as amended (the "Code"). Options are exercisable after one year
from the date of grant, subject to the limitations under (section mark)422,
at an option exercise price equal to the market price of the Common Stock at
the date of grant. Upon a "change in control" of the Corporation, all
outstanding options terminate; provided, however, optionholders have the
right immediately prior to such "change in control" to exercise such
options, whether or not then exercisable.
(2) The values shown reflect standard application of the Black-Scholes pricing
model using (i) 60-month volatility (29.222%) 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 (6.17%), and (iv) dividends at the annualized rate in place on the
date of grant ($1.84). The values do not take into account risk factors such
as non-transferability and limits on exercisability. The Black-Scholes
option pricing model is a commonly utilized model for valuing options. The
model assumes that the possibilities of future stock returns (dividends plus
share price appreciation) resemble a normal "bell-shaped" curve. In
assessing the values indicated in the above table, it should be kept in mind
that no matter what theoretical value is placed on a stock option on the
date of grant, the ultimate value of the option is dependent on the market
value of the Common Stock at a future date, which will depend to a large
degree on the efforts of the Named Officers to bring future success to the
Corporation for the benefit of all stockholders.
Aggregated Option/SAR Exercises and Year-End Option/SAR Value Table
The following table sets forth with respect to each exercise of stock options
(or tandem stock appreciation rights ("SARs")) and freestanding SARs during 1995
by each of the Named Officers and the year-end value of unexercised options and
SARs on an aggregated basis: (i) the name of such officer (column (a)); (ii) the
number of shares received upon exercise, or if no shares were received, the
number of securities with respect to which the options or SARs were exercised
(column (b)); (iii) the aggregate dollar value realized upon exercise (column
(c)); (iv) the total number of unexercised options and SARs held at December 31,
1995, separately identifying the exercisable and unexercisable options and SARs
(column (d)); and (v) the aggregate dollar value of in-the-money, unexercised
options and SARs held at December 31, 1995, separately identifying the
exercisable and unexercisable options and SARs (column (e)).
AGGREGATED OPTION/SAR EXERCISES IN 1995 AND
DECEMBER 31, 1995 OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs In-the-Money Options/SARs
at 12/31/95 (#) at 12/31/95 ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
(a) (b) (c) (d) (e)
Crutchfield 6,854 149,040 145,409/85,036 3,230,283/1,096,382
Georgius 7,200 206,064 65,867/53,298 1,656,983/665,700
Hodnett 8,361 95,106 1,390/35,199 14,943/407,890
Adams 3,000 77,625 16,861/21,639 475,567/233,195
McMullen 0 0 0/10,000 0/108,750
Atwood 0 0 8,267/26,633 159,924/287,026
</TABLE>
Long-Term Incentive Plan Awards Table
The following table sets forth, with respect to each award made to a Named
Officer in 1995 under any LTIP: (i) the name of such officer (column (a)); (ii)
the number of shares, units or other rights awarded under any LTIP (column (b));
(iii) the performance or other time period until payout or maturation of the
award (column (c)); and (iv) for LTIPs not based on stock price, the dollar
value of the estimated payout or range of estimated payouts under the award
(threshold, target and maximum amount), whether such award is denominated in
stock or cash (columns (d) through (f)).
14
<PAGE>
LONG-TERM INCENTIVE PLANS -- AWARDS IN 1995 (1)
<TABLE>
<CAPTION>
Estimated Future Payments under
Performance or Other Non-Stock Price-Based Plans
Number of Shares, Period Until Maturation Threshold Target Maximum
Name Units or Other Rights (#) or Payout ($ or #) ($ or #)(2) ($ or #)(3)
<S> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f)
Crutchfield 3 years 0 $ 835,000 $ 850,000
Georgius 3 years 0 600,000 665,000
Hodnett 3 years 0 325,000 395,000
Adams 3 years 0 181,497 300,000
McMullen 3 years 0 0 375,000
Atwood 3 years 0 201,000 355,000
</TABLE>
(1) See the Summary Compensation Table. Under the Corporation's Management
Long-Term Cash Incentive Plan, if the Corporation achieves not less than a
10% average return on equity ("ROE") (calculated as indicated below under
"HR Committee Report on Executive Compensation") for the three-year period
ending each December 31, based on the Corporation's "adjusted net income"
(as defined in such Plan), 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 such 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 such Plan, subject to the discretion of the HR
Committee, at the end of each three-year period on the basis of individual
performance as determined by the HR Committee. The maximum potential award
is 100% of base salary.
(2) Targets are not determinable. Awards indicated represent awards granted in
1995 for the 1992-1994 three-year period. Future awards may be higher or
lower than such awards.
(3) Represents 1995 annual salaries, the maximum awards that can be granted in
1996 for the 1993-1995 three-year period.
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, 1996, the credited full years of service
under the Pension Plan were as follows: Mr. Crutchfield -- 30 years; Mr.
Georgius -- 20 years; Mr. Hodnett -- 23 years; Mr. Adams -- 23 years; Mr.
McMullen -- one year; and Mr. Atwood -- 5 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,
except for the bonus amount set forth in footnote (5) to such 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)(2)
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>
$ 750,000................ $33,221 196,956 44,294 268,053 55,368 339,150 66,442 410,248 70,192 406,929
1,250,000............... 33,221 358,751 44,294 483,780 55,368 608,809 66,442 733,837 70,192 730,519
1,750,000............... 33,221 520,546 44,294 699,506 55,368 878,467 66,442 1,057,427 70,192 1,054,108
2,250,000............... 33,221 682,341 44,294 915,233 55,368 1,148,125 66,442 1,381,017 70,192 1,377,698
2,750,000............... 33,221 844,136 44,294 1,139,959 55,368 1,417,783 66,442 1,704,607 70,192 1,701,288
</TABLE>
(1) For the year ending December 31, 1996, the annual retirement benefit payable
under the Corporation's Pension Plan is limited by federal law to $120,000
and the maximum covered compensation is limited to $150,000. For officers
covered under the Corporation's Supplemental Retirement Plan (a total of 23
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
15
<PAGE>
such limitations would be payable under the Supplemental Retirement Plan.
The foregoing is reflected in the table. Following a "change in control" of
the Corporation, benefits earned under the Supplemental Retirement Plan
would be payable in a lump sum actuarial equivalent, upon a participant's
retirement or upon any modification to such Plan which would cause the
actual or projected benefits payable under such Plan to be reduced.
(2) In December 1994, the Corporation entered into an agreement with Robert T.
Atwood to provide a death benefit comparable to that provided under the
Corporation's Supplemental Retirement Plan if Mr. Atwood should die before
he becomes vested (i.e., completion of ten years of service) under such
Plan.
Compensation of Directors
Directors of the Corporation receive a quarterly retainer of $7,500, plus
$1,500 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 $2,000. 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 $1,121,500 were
either paid by the Corporation to the directors of the Corporation in 1995 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, a director of the Corporation who
formerly was Chairman and Chief Executive Officer of a corporation acquired by
the Corporation in 1990. In addition, Messrs. Goldberg, Henry and Inciarte, who
are directors of the Corporation, also serve as advisory directors on the First
Union-North Advisory Board and receive $1,200 per meeting attended of such
Board.
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 such Plan,
plus interest, are payable after the end of the calendar year in which the
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 14
directors of the Corporation elected to defer $680,500 of their 1995 directors'
fees under such 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 such Plan, after the end of the calendar year in
which the director retires from the Board, the retired director is entitled to
receive an annual retirement benefit equal to 80% of the amount of the annual
director retainer in effect at the time the director retires.
Employment Contracts
Edward E. Crutchfield
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 defined in
the agreement) 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 then current annual salary by (ii) the
16
<PAGE>
number of years (including any fraction thereof) then remaining in the term of
employment, and (b) the result of multiplying (i) the annual average short-term
Management Incentive Plan 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 then current 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. The agreement also provides
for a gross-up payment to Mr. Crutchfield equal to the amount of excise taxes
(plus the applicable federal and state income, FICA and excise taxes due on such
gross-up payment) payable by Mr. Crutchfield if his employment is terminated in
conjunction with a "change in control" of the Corporation and such taxes become
payable as a result of payments to Mr. Crutchfield under the agreement or
otherwise, being deemed to be "excess parachute payments" for federal income tax
purposes.
John R. Georgius
In September 1995, the Corporation and Mr. Georgius entered into an employment
agreement providing for the employment of Mr. Georgius as Vice Chairman of the
Corporation until December 31, 1998, subject to (i) automatic extension of such
period of employment for additional one-year periods, (ii) the right of either
party to terminate the agreement at any time, and (iii) the right of Mr.
Georgius to terminate the agreement if such offices held by Mr. Georgius are
changed or he shall fail to be vested with the power and authority or duties or
responsibilities attendant thereto. The agreement provides that Mr. Georgius'
annual salary will not be less than $665,000 and that the Corporation, in its
sole discretion, may award Mr. Georgius annual incentive compensation based on
his performance and other factors. If the Corporation terminates the agreement
other than for cause (as defined in the agreement) or if Mr. Georgius terminates
the agreement as provided in (iii) above, the agreement provides that the
Corporation will pay to Mr. Georgius an amount equal to the sum of (a) the
result of multiplying (i) Mr. Georgius' then current 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 average of the cash
incentive compensation payable to Mr. Georgius 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. Georgius
terminates his employment other than as provided in (iii) above, he will be
entitled to be paid 66 2/3% of his then current annual salary for a period of
one year following termination of his employment, subject to termination of such
payments if Mr. Georgius were to violate a one-year non-compete provision
provided for in the agreement. The agreement provides for a gross-up payment to
Mr. Georgius equal to the amount of excise taxes (plus the applicable federal
and state income, FICA and excise taxes due on such gross-up payment) payable by
Mr. Georgius if his employment is terminated in conjunction with a "change in
control" of the Corporation and such taxes become payable as a result of
payments to Mr. Georgius under the agreement or otherwise, being deemed to be
"excess parachute payments" for federal income tax purposes.
Anthony P. Terracciano
In connection with the execution of the FFB Agreement in June 1995, the
Corporation and Mr. Terracciano entered into an employment agreement providing
for the employment of Mr. Terracciano for the five-year period following
consummation of the acquisition of FFB by the Corporation, which occurred on
January 1, 1996. The agreement provides that Mr. Terracciano's salary shall not
be less than $1,000,000 per year and that his salary plus any bonus shall not be
less than $2,000,000 per year. Mr. Terracciano's current salary is $1,000,000
per year. If Mr. Terracciano's employment is terminated for any reason during
the term of employment, Mr. Terracciano shall be entitled to be paid at a rate
of $2,000,000 per year during the remainder of the term of employment.
17
<PAGE>
Upon expiration of the term of employment, the Corporation shall thereafter for
the life of the second to die of Mr. Terracciano and his current spouse,
guarantee to Mr. Terracciano or such spouse, retirement income of $1,200,000 per
year, offset by certain other retirement benefits. Upon the death of Mr.
Terracciano, the Corporation agrees to pay his designated beneficiary or his
estate a death benefit of $3,000,000, offset by certain other death benefits.
The agreement contains certain non-compete provisions with respect to Mr.
Terracciano's employment with another financial institution during the term of
employment within a specified geographical area. The agreement also provides for
reimbursement of certain excise taxes, if any, payable as a result of any
payments made to Mr. Terracciano by the Corporation or FFB.
Compensation Committee Interlocks and Insider Participation
The current members of the HR Committee who served during the period from
April 1995 through December 1995 are Messrs. Bradley, Dickson, Dolan, 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 five regularly scheduled meetings during 1995, 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, stock compensation plans and a long-term cash incentive plan, which are
further discussed below. All plans are developed 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. The
financial data referred to below with respect to the Corporation have been
calculated on a historical stand-alone basis and have not been restated to
reflect the FFB acquisition.
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 ninth in size among this
group on December 31, 1995, 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)),
18
<PAGE>
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 HR Committee believes that ROE is the most appropriate measure for
evaluating the Corporation's results. In order to provide a consistent basis for
comparison, the computation of ROE is based on the average of quarter-end
stockholders' equity, excluding unrealized gains or losses on investment
securities, as determined in accordance with the Statement of Financial
Accounting Standards 115 ("SFAS 115"), "Accounting for Certain Investments in
Debt and Equity Securities". The Corporation's Management Incentive Plan and the
Corporation's Management Long-Term Cash Incentive Plan both rely on such ROE
performance as a primary determinant of incentive payouts.
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 Corporation's stock compensation plans,
result in total compensation levels which approximate the relative rankings of
asset size and 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 such 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 1994, the Corporation's ROE performance peer group rank was
11th and the total of all compensation for the Named Officers ranked 14th. 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 $1,000,000
limit on tax deductible compensation under the Omnibus Budget Reconciliation Act
of 1993 and the regulations promulgated thereunder ("OBRA") was made in the
context of insuring the ability to balance sound compensation decisions with
appropriate fiscal responsibility. The HR Committee's intention has been 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.
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 deems 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 targeted
to have the same relative rank
19
<PAGE>
among the peer group as asset size. For 1994, the Corporation's asset size
ranked ninth among the peer group and the total base salaries for the Named
Officers ranked 11th among the peer group. Any variances are addressed in
determining the total compensation for the Named Officers. Base salary increases
in 1995 were made primarily 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 200% of base
salary. Determination of individual awards is based primarily on the
Corporation's ROE, but includes a subjective assessment of individual
performance, where permitted. Measures of individual performance include meeting
business unit objectives, promoting corporate values and providing leadership to
employees.
The Corporation's ROE for 1995 (calculated as indicated above) was 17.59%,
exceeding the threshold ROE by 47% and resulting in payments which in general
ranged from 100% to 200% of each Named Officer's base salary.
Long-Term Incentive Program
The long-term incentive program is composed of the following:
(Bullet) The Corporation's stock compensation plans, which are 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 ROE
rank for the period 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 plans, and payouts from the long-term cash plan, are
set so that total compensation approximates the relative rankings of asset size
and ROE performance within the peer group. The Corporation's 1994 ROE of 16.75%
(calculated as indicated above) resulted in a three-year average ROE rank of
ninth among the peer group, generating a pool of 39% of the aggregate base
salaries of all participants in the long-term cash plan. This amount was
distributed proportionately by the HR Committee in its discretion.
The 1995 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 1995.
1995 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 1995
base salary was set at the size-adjusted median of the peer group. The
size-adjusted median increased primarily because of increases in market
salaries. 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
20
<PAGE>
subjective assessment of individual performance, where permitted. In this case,
the HR Committee considered overall financial performance, including ROE of
17.59% (calculated as indicated above), return on assets of 1.21%, net income
applicable to common stockholders of $1.0 billion, excluding the after-tax
effect of FFB restructuring and merger-related charges (an 11% increase over
1994 net income applicable to common stockholders before a preferred stock
redemption premium), and success in meeting strategic objectives. These included
rapid expansion of major initiatives involving capital markets, mutual funds and
card products, which were started in 1994, as well as ten acquisitions which
were completed in 1995 or were pending at year-end 1995. In addition, the
Corporation continued to lay the ground work for leveraging future corporate
performance through major change initiatives, including building a Customer
Information Center, consumer reengineering, and reengineering efforts in various
other staff areas (Human Resources, Finance, and Automation and Operations). The
stock option grants and restricted stock awards made to Mr. Crutchfield in 1995
were based on the analysis discussed above. That is, the HR Committee set them
so that Mr. Crutchfield's total compensation would approximate the expected
relative rankings of asset size and 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 1995.
With respect to the HR Committee's use of the historical relationship between
pay and performance described above, the Corporation's total assets and ROE
performance for 1994 ranked ninth and 11th, respectively, among the peer group,
and Mr. Crutchfield's base salary and total compensation ranked ninth and 14th,
respectively.
<TABLE>
<S> <C>
R. STUART DICKSON, Chairman TORRENCE E. HEMBY, JR.
LEONARD G. HERRING, Vice Chairman RADFORD D. LOVETT
W. WALDO BRADLEY DEWEY L. TROGDON
B. F. DOLAN
</TABLE>
21
<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, 1990, 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
DECEMBER 31, 1990 THROUGH DECEMBER 31, 1995
(The Performance Graph appears here with the following plot points:)
<TABLE>
<CAPTION>
December 31,
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
The Corporation..................................................... $100 204 307 300 313 438
S&P 500............................................................. 100 130 140 154 156 215
KBW 50.............................................................. 100 158 202 213 202 329
</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 Commission or subject to
Regulation 14A or the liabilities of Section 18 of the 1934 Act, 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.
22
<PAGE>
OTHER MATTERS RELATING TO EXECUTIVE OFFICERS, DIRECTORS AND PRINCIPAL
STOCKHOLDERS
General
The directors and executive officers of the Corporation and its subsidiaries
who file reports with the Commission under Section 16(a) of the 1934 Act,
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 1995, 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 $308 million to a
low of approximately $262 million.
Section 16(a)
Section 16(a) of the 1934 Act 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 any changes in such ownership with the 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 a 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, 1995, 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 related to: one transaction by Ben C.
Maffitt, a Section 16(a) reporting officer of the Corporation, relating to a
sale of shares from an estate; four transactions on the same date by James E.
Maynor, a Section 16(a) reporting officer of the Corporation, relating to the
sale of shares received upon the exercise of stock options; and one transaction
by Louis A. Schmitt, Jr., a Section 16(a) reporting officer of the Corporation,
relating to a sale of shares.
Santander
Pursuant to the FFB Agreement, Santander is entitled to certain registration
rights with respect to the shares of Common Stock received by Santander in the
FFB acquisition, including the right to request one registration in any 12-month
period for no less than 2,000,000 shares of Common Stock.
The Second Amendment, dated June 15, 1995, to the Corporation's Shareholder
Protection Rights Agreement (the "Rights Agreement") expands the definition of
an "Acquiring Person" to include any person that is determined by the Federal
Reserve Board to control the Corporation for purposes of the Bank Holding
Company Act of 1956, as amended (the "BHCA"). The Rights Agreement provides that
a person will not become an Acquiring Person under the BHCA control test
described above if either (i) the Federal Reserve Board's control determination
would not have been made but for such person's failure to make certain customary
passivity commitments, or such person's violation of such commitments, made to
the Federal Reserve Board, so long as the Federal Reserve Board determines
within 30 days (or 60 days in certain circumstances), that such person no longer
controls the Corporation, or (ii) the Federal Reserve Board's control
determination was not based on such a failure or violation and such person (x)
obtains a noncontrol determination from the Federal Reserve Board
23
<PAGE>
within three years, and (y) is using its best efforts to allow the Corporation
to make any acquisition or engage in any legally permissible activity
notwithstanding such person's being deemed to control the Corporation for
purposes of the BHCA.
In October 1995, the Federal Reserve Board determined that the structure of
the proposed relationship between Santander and the Corporation did not support
a finding that Santander would control the Corporation for purposes of the BHCA.
In connection with such determination, Santander committed to the Federal
Reserve Board that it will not:
exercise or attempt to exercise a controlling influence over the
management or policies of the Corporation or any of its subsidiaries;
seek or accept representation on the Board of Directors of the
Corporation or any of its subsidiaries, except that it may have two
representatives on the Board of Directors of the Corporation, one of whom
initially shall be a senior executive officer of the Corporation;
have or seek to have any employee or representative serve as an officer,
agent or employee with management responsibility at the Corporation or
any of its subsidiaries;
take any action causing the Corporation or any of its subsidiaries to
become a subsidiary of Santander or any of its subsidiaries;
acquire or retain voting securities of the Corporation or any of its
subsidiaries that would cause the combined interests of Santander or any
of its subsidiaries and its officers, directors and affiliates to exceed
the percentage of the outstanding voting securities of the Corporation or
any of its subsidiaries that they owned upon consummation of the FFB
acquisition;
exercise voting rights with respect to that portion of the voting
securities of the Corporation at any time owned by Santander or any of
its subsidiaries which exceeds 9.9% of the outstanding voting securities
of the Corporation at such time, other than to vote such shares for and
against any proposition in the same proportions as the voting securities
of the Corporation held by security holders not affiliated with the
Corporation have been voted;
propose a director or slate of directors in opposition to a nominee or
slate of nominees proposed by the management or Board of Directors of the
Corporation or any of its subsidiaries;
attempt to influence the dividend policies or practices of the
Corporation or any of its subsidiaries;
solicit or participate in soliciting proxies with respect to any matter
presented to the shareholders of the Corporation or any of its
subsidiaries;
attempt to influence the loan and credit decisions or policies, the
pricing of services, any personnel decision, the location of any offices,
branching, the hours of operation or similar activities of the
Corporation or any of its subsidiaries;
dispose or threaten to dispose of shares of the Corporation or any of its
subsidiaries in any manner as a condition of specific action or nonaction
by the Corporation or any of its subsidiaries; or
enter into any banking or nonbanking transactions with the Corporation or
any of its subsidiaries other than normal banking transactions and
cooperative activities that are in the ordinary course of business and on
an arm's-length basis.
24
<PAGE>
Pursuant to the FFB Agreement, the Corporation agreed to nominate Mr.
Terracciano and Mr. Inciarte at the Meeting to serve as directors of the
Corporation for three-year terms. The Corporation and Santander also entered
into an agreement pursuant to which the Corporation agreed, subject to certain
conditions relating to the percentage ownership of Common Stock by Santander at
that time and certain other conditions, to nominate at the Annual Meeting of
Stockholders of the Corporation in 1999, up to two individuals selected by
Santander to serve as directors of the Corporation for three-year terms.
From time to time, Santander and its affiliates enter into transactions with
the Corporation and its subsidiaries in the ordinary course of business. Since
January 1, 1995, such transactions have included (i) foreign exchange facilities
for the use of Santander's London, New York and Tokyo branches; (ii) dollar
accounts maintained by Santander at certain of the Corporation's subsidiary
banks; (iii) peseta accounts maintained by certain of the Corporation's
subsidiary banks at Santander; and (iv) a correspondent banking relationship
principally for trade finance purposes.
Certain Other Relationships
Mr. Henry, a director of the Corporation, is a partner in Frank M. Henry
Associates, from which a subsidiary of the Corporation leases a branch office in
Wilkes-Barre, Pennsylvania. The initial term expires on April 30, 2003, and the
subsidiary has four five-year renewal options. The annual base rent is $69,140
for the year ending April 30, 1996, and will increase periodically to $76,140
for the final year of the initial term. During any option periods, the base rent
would be based on fair market value.
25
<PAGE>
PROPOSAL 2. APPROVAL OF THE CORPORATION'S 1996 EMPLOYEE STOCK
PURCHASE PLAN
General
The Board of Directors of the Corporation adopted the 1996 Employee Stock
Purchase Plan (the "1996 Plan") in February 1996, subject to the approval of the
stockholders of the Corporation. The Corporation has offered several plans
similar to the 1996 Plan in the past. The employee stock purchase plans are
intended to encourage ownership of Common Stock by employees and to encourage
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.
Eligibility and Participation; Administration
The 1996 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, 1996, or if lesser, and to the extent such options are
not exercised or forfeited prior to June 30, 1998, at 85% of the fair market
value of the Common Stock on such date. Administration of the 1996 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, 1996, will be eligible to participate (except any
employee who would own immediately after the grant, stock possessing 5% or more
of the total combined voting power or value of all classes of stock of the
corporation employing such employee or the parent or a subsidiary of such
corporation). 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 31, 1996. Employees may purchase their optioned shares on
November 1, 1996, and/or over the following 20-month purchase period, unless
sooner terminated by the occurrence of one of the following events: (i)
termination of employment; (ii) death, or retirement with the Corporation's
consent; (iii) purchase of all shares which the participant elected to purchase,
prior to the end of the purchase period; or (iv) withdrawal from the 1996 Plan.
Purchase rights are not transferable except by will or by the laws of descent
and distribution. Shares offered under the 1996 Plan will be subject to
adjustment in the case of stock dividends, stock splits and certain other stock
changes. In addition, no option granted under the 1996 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").
26
<PAGE>
New Plan Benefits
The following table sets forth the number of shares of Common Stock underlying
options that would have been granted under the 1996 Plan to the individuals and
groups indicated if the effective date of the 1996 Plan were January 31, 1996,
subject to the $25M Limit. The "Dollar Value" column represents the number of
such optioned shares times the difference (i) between the assumed option price
of such shares (based on 85% of $57.875, the market price of the Common Stock on
such date), and (ii) such market price, subject to the $25M Limit.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
1996 Employee Stock
Purchase Plan
No. of Shares
Dollar Value With $25M Limit
<S> <C> <C>
Crutchfield...................................................................... $ 7,490 862
Georgius......................................................................... 7,490 862
Hodnett.......................................................................... 7,490 862
Adams............................................................................ 10,619 1,222
McMullen......................................................................... 11,236 1,293
Atwood........................................................................... 9,671 1,113
Executive Group*................................................................. 266,739 30,695
Non-Executive Director Group..................................................... 0 0
Non-Executive Employee Group*.................................................... 43,785,451 5,038,602
</TABLE>
*Excludes Named Officers.
The actual number of shares to be offered will be determined by the salaries
reflected on the corporate payroll system on July 31, 1996, to those eligible
employees employed on August 1, 1996. The maximum number of shares of Common
Stock authorized to be issued under the 1996 Plan is 7,000,000. To the extent
shares of Common Stock are issued under the 1996 Plan, the percentage ownership
of the outstanding shares of Common Stock held by the then existing stockholders
of the Corporation will decrease. The last reported sale price of the Common
Stock on the NYSE on March 1, 1996, was $60.50 per share.
Amendment
The 1996 Plan may be amended by the Board of Directors of the Corporation
without vote of the stockholders of the Corporation, provided that no optionee's
existing rights are adversely affected thereby and subject to certain other
limitations set forth in the 1996 Plan.
Certain Federal Tax Consequences
The 1996 Plan is intended to comply with the requirements governing employee
stock purchase plans set forth in 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 1996 Plan would be the amount of the 15% reduction in price), and
he
27
<PAGE>
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.
Options granted under the 1996 Plan will not qualify as "performance-based
compensation" under OBRA (as defined above under "HR Committee Report on
Executive Compensation"). Therefore, with respect to dispositions of stock by
Actual OBRA Officers (as defined in Proposal 3 below) within two years of the
date of grant of such options 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 would be immaterial.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST BY THE HOLDERS OF THE
OUTSTANDING SHARES OF COMMON STOCK AND SERIES B PREFERRED STOCK, VOTING AS A
SINGLE CLASS, IS REQUIRED TO APPROVE THE 1996 PLAN. THE BOARD OF DIRECTORS
RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF THE 1996 PLAN. PROXIES,
UNLESS INDICATED TO THE CONTRARY, WILL BE VOTED "FOR" APPROVAL OF THE 1996 PLAN.
PROPOSAL 3. APPROVAL OF THE CORPORATION'S 1996 MASTER STOCK
COMPENSATION PLAN
General
The Board of Directors of the Corporation adopted the 1996 Master Stock
Compensation Plan (the "Plan") in February 1996, subject to approval by the
stockholders of the Corporation. The Plan is similar to the 1992 Master Stock
Compensation Plan (the "1992 Plan"), which was approved by the stockholders of
the Corporation in 1992. The purpose of the Plan is to advance the interests of
the Corporation by encouraging and providing for the acquisition of equity
interests in the success of the Corporation by key employees through grants of
stock options and shares of restricted stock. As of February 29, 1996, there
were 1,290,940 shares of Common Stock available for the granting of additional
options and/or additional shares of restricted stock under the 1992 Plan. The
proposed Plan provides for the issuance of up to 14,000,000 shares of Common
Stock. To the extent shares of Common Stock are issued under the Plan, the
percentage ownership of the outstanding shares of Common Stock held by the then
existing stockholders of the Corporation will decrease. The last sale price of
the Common Stock on the NYSE on March 1, 1996, was $60.50 per share.
In the event of any change in the outstanding shares of Common Stock that
occurs by reason of a stock dividend, stock split, recapitalization, merger,
consolidation, combination, exchange of shares or other similar corporate change
(a "Corporate Change"), the aggregate number of shares of Common Stock subject
to each outstanding option under the Plan, and its stated option price, will be
appropriately adjusted by the HR Committee. In such event, the HR Committee will
also have discretion to make appropriate adjustments in the number and type of
shares subject to restricted stock grants then outstanding under the Plan. If
any optioned shares are forfeited or expire, such shares may again become
available for issuance under the Plan.
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<PAGE>
The Plan will remain in effect, subject to the Board's right to earlier
terminate the Plan as hereinafter described, until all shares of Common Stock
subject to it shall have been purchased or acquired pursuant to the provisions
of the Plan, provided no option or shares of restricted stock may be granted
under the Plan on or after the tenth anniversary of the Plan's effective date.
Eligibility and Participation; Administration
Participants in the Plan will be 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. It is anticipated that the
current executive officers of the Corporation will receive options and shares of
restricted stock under the Plan in such amounts and at such times as the HR
Committee may determine.
The HR Committee will be responsible for the administration of the Plan. The
HR Committee is authorized to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan, to provide for conditions
and assurances deemed necessary or advisable to protect the interests of the
Corporation, and to make all other determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan.
Options
No option granted pursuant to the 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 it is granted; provided, however, that (i) no optionee may be granted
options during any fiscal year to purchase more than 200,000 shares of Common
Stock, subject to adjustment as a result of a Corporate Change, and (ii) no
option may be exercisable later than the tenth anniversary date of its grant.
Options granted under the Plan are exercisable at such times and are subject to
such restrictions and conditions as the HR Committee in each instance approves,
which need not be the same for all participants. Only incentive stock options
("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.
The option price upon exercise of any option is payable to the Corporation in
full (i) in cash or its equivalent, (ii) by tendering shares of previously owned
Common Stock having a fair market value at the time of exercise equal to the
total option price, or (iii) by a combination of (i) and (ii). The proceeds from
any such cash payments are added to the general funds of the Corporation and
used for general corporate purposes. Pursuant to the foregoing and subject to
the approval of the Corporation, an optionee can apply the shares received upon
the exercise of a portion of a stock option under the Plan to satisfy the
exercise price for additional portions of the option, thereby enabling the
optionee to effectively deliver a relatively small number of shares in
satisfaction of the exercise price of a much larger option.
In the event the employment of a participant is terminated by reason of death
or retirement, any outstanding options held by the participant shall become
immediately exercisable. Unless the HR Committee determines otherwise, any such
outstanding options will be forfeited on the expiration date of such options or
within three years after such date of termination of employment, whichever
period is shorter. Unless the HR Committee determines otherwise, if the
employment of a participant shall terminate for any reason other than death or
retirement, any then outstanding but unexercisable options granted to such
participant will be forfeited upon such termination. Any then outstanding and
29
<PAGE>
exercisable options granted to such participant will be forfeited on the
expiration date of such options or three months after such date of termination
of employment, whichever period is shorter; provided, however, the HR Committee
may in its sole discretion, cause any such outstanding options to become
immediately exercisable at any time prior to the expiration date of such options
or within three months after such date of termination of employment, whichever
period is shorter.
In the event of a "change in control" of the Corporation, any outstanding
options granted under the Plan, whether or not then exercisable, shall be
exercisable for the remainder of the term of the options. In addition, the HR
Committee shall have the right to allow the holders of such options to elect to
receive, in settlement thereof, an amount in cash equal to the fair market value
of the shares of Common Stock covered by such options on the date of such
"change in control", less the number of such shares times the exercise price of
such options.
Restricted Stock
The HR Committee may impose such restrictions on any shares of restricted
stock granted under the Plan as it may deem advisable. During the period of
restriction, participants holding shares of restricted stock granted under the
Plan may exercise full voting rights with respect to such shares and are
entitled to receive all dividends and other distributions paid with respect to
such shares.
In the event the employment of a participant is terminated because of normal
retirement or death, any remaining period of restriction applicable to the
restricted stock shall automatically terminate. In the event that such
employment is terminated for any other reason during the period of restriction,
then any shares still subject to restrictions at the date of such termination
shall automatically be forfeited and returned to the Corporation; provided,
however, in the event of early retirement or any involuntary termination of
employment (other than normal retirement or death), the HR Committee may, in its
sole discretion, waive the automatic forfeiture of any or all such shares and/or
may add such new restrictions to such shares as it deems appropriate.
Transferability; Amendment; Termination
No options granted under the Plan, and during the applicable period of
restriction no shares of restricted stock granted under the Plan, may be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. All rights granted to a
participant under the Plan shall be exercisable during his lifetime only by such
participant, or his guardian or legal representative. Upon the death of a
participant, his personal representative or beneficiary may exercise his rights
under the Plan.
The Board of Directors of the Corporation may at any time terminate, and from
time to time may amend or modify the Plan; provided, however, no such action of
the Board, without approval of the stockholders, may: (i) increase the total
amount of Common Stock which may be issued under the Plan; (ii) change the class
of employees eligible to receive options or shares of restricted stock; (iii)
change the provisions of the Plan regarding option price; (iv) materially
increase the cost of the Plan; (v) extend the period during which options or
shares of restricted stock may be granted; (vi) extend the maximum period after
the date of grant during which options may be exercised; or (vii) change the
material terms of the performance goal referred to below.
Effective Date
The Plan shall become effective as of April 16, 1996, subject to approval by
the stockholders of the Corporation.
30
<PAGE>
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, subject to the limitations set forth below.
Under OBRA (as defined above under "HR Committee Report on Executive
Compensation"), 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 fiscal year (the
"Actual OBRA Officers") is 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.
The Plan provides that: (i) the HR Committee shall determine the 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") and an ROE performance goal (based on Adjusted Net Income, as defined
below) 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; (ii) 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
31
<PAGE>
granted) will be designated as 200% of the Expected OBRA Officer's base salary
as of December 31 of the preceding year, subject to reduction by the HR
Committee, in its discretion, but in no event may such value exceed $3,000,000,
and (iii) for purposes of determining the Corporation's ROE performance goal, as
described above, the Corporation's common equity shall exclude any adjustment
for unrealized gains or losses on debt and equity securities (pursuant to SFAS
115, as defined above under "HR Committee Report on Executive Compensation").
The term "Adjusted Net Income" means the Corporation's net income applicable
to common stockholders as it appears on an income statement of the Corporation
prepared in accordance with generally accepted accounting principles ("GAAP"),
adjusted to remove the effect of the following:
(i) items to be disclosed under 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 December 1994, the HR Committee determined the Expected OBRA Officers
(including certain of the Named Officers indicated above) and the ROE
performance goal that the Corporation needed to attain in 1995 (12%) in order to
permit shares of restricted stock to be granted to the Expected OBRA Officers in
1996. As indicated above under "HR Committee Report on Executive Compensation",
the Corporation's ROE for 1995 (calculated as indicated thereunder) was 17.59%.
In December 1995, the HR Committee determined the Expected OBRA Officers
(including the Named Officers indicated above) and the ROE performance goal that
the Corporation will need to attain in 1996 (12%) in order to permit any shares
of restricted stock to be granted to the Expected OBRA Officers in 1997. An
executive officer not designated as an Expected OBRA Officer prior to the
beginning of the year for which such shares of restricted stock are granted 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.
32
<PAGE>
1992 Plan Benefits
The following table sets forth the number of shares of Common Stock covered by
options and the number of shares of restricted stock which were granted under
the 1992 Plan in June 1995 to the individuals and groups indicated. The number
of shares of Common Stock covered by options and the number of shares of
restricted stock to be granted under the Plan in 1996 to such officers and
groups, assuming the Plan is approved by the stockholders, are generally
expected to exceed the number of such shares granted in June 1995 and set forth
in the following table.
<TABLE>
<CAPTION>
1995 Restricted
1995 Stock Options Stock Grants
<S> <C> <C>
Crutchfield.................................................................. 61,345 18,655
Georgius..................................................................... 31,595 13,405
Hodnett...................................................................... 15,400 6,600
Adams........................................................................ 8,400 5,600
McMullen..................................................................... 10,000 10,000
Atwood....................................................................... 12,600 5,400
Executive Group*............................................................. 135,180 90,120
Non-Executive Director Group................................................. 0 0
Non-Executive Employee Group*................................................ 680,825 457,550
</TABLE>
*Excludes Named Officers.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST BY THE HOLDERS OF THE
OUTSTANDING SHARES OF COMMON STOCK AND SERIES B PREFERRED STOCK, VOTING AS A
SINGLE CLASS, IS REQUIRED TO APPROVE THE PLAN. THE BOARD OF DIRECTORS RECOMMENDS
THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF THE PLAN. PROXIES, UNLESS INDICATED TO
THE CONTRARY, WILL BE VOTED "FOR" APPROVAL OF THE PLAN.
PROPOSAL 4. RATIFICATION OF APPOINTMENT OF AUDITORS
The accounting firm of KPMG Peat Marwick LLP has been appointed the
Corporation's auditors for the year 1996 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
votes cast, 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 1997.
KPMG Peat Marwick LLP were auditors of the Corporation for the year ended
December 31, 1995, 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 A MAJORITY OF THE VOTES CAST BY THE HOLDERS OF THE
OUTSTANDING SHARES OF COMMON STOCK AND SERIES B PREFERRED STOCK, VOTING AS A
SINGLE CLASS, 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.
33
<PAGE>
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
Bylaws include provisions setting forth specific conditions under which business
may be transacted at an annual meeting of stockholders.
Proposals of stockholders intended to be presented at the 1997 Annual Meeting
of Stockholders of the Corporation (the "1997 Meeting") 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 11,
1996, 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 Commission. In addition,
stockholders wishing to propose matters for consideration at the 1997 Meeting
must follow certain specified advance notice procedures set forth in the
Corporation's Bylaws, a copy of which is available upon request to: First Union
Corporation, One First Union Center, Charlotte, North Carolina 28288-0013,
Attention: Corporate Secretary.
March 7, 1996
A COPY OF THE CORPORATION'S 1995 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.
34
*******************************************************************************
APPENDIX
<PAGE>
COMMON STOCK
P R O X Y
FIRST UNION CORPORATION
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, Radford D.
Lovett 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 February
23, 1996, at the Annual Meeting of Stockholders of the Corporation to be held on
April 16, 1996, and at any and all adjournments thereof.
1. PROPOSAL TO ELECT THE 12 NOMINEES LISTED BELOW AS DIRECTORS OF THE
CORPORATION, NINE NOMINEES TO SERVE AS CLASS I DIRECTORS WITH TERMS EXPIRING
AT THE 1999 ANNUAL MEETING OF STOCKHOLDERS, ONE NOMINEE TO SERVE AS A CLASS
II DIRECTOR WITH A TERM EXPIRING AT THE 1997 ANNUAL MEETING OF STOCKHOLDERS,
AND TWO NOMINEES TO SERVE AS CLASS III DIRECTORS WITH TERMS EXPIRING AT THE
1998 ANNUAL MEETING OF STOCKHOLDERS, IN EACH CASE UNTIL THEIR SUCCESSORS ARE
DULY ELECTED AND QUALIFIED.
<TABLE>
<S> <C>
[ ] FOR all nominees listed below (except as marked to the contrary [ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
below).
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
CLASS I: Robert J. Brown, Edward E. Crutchfield, R. Stuart Dickson, Juan
Rodriguez Inciarte, Max Lennon, Joseph Neubauer, Ruth G. Shaw, Anthony P.
Terracciano and
B.J. Walker.
CLASS II: Arthur M. Goldberg
CLASS III: Edward E. Barr and Frank M. Henry
2. PROPOSAL TO APPROVE THE CORPORATION'S 1996 EMPLOYEE STOCK PURCHASE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO APPROVE THE CORPORATION'S 1996 MASTER STOCK COMPENSATION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued on other side)
...............................................................................
...............................................................................
<PAGE>
4. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS AUDITORS OF
THE CORPORATION FOR 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED ABOVE BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" PROPOSALS 1 THROUGH 4, AS APPLICABLE. 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: 1996
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT TO US. PLEASE MARK, DATE AND SIGN
YOUR PROXY AND RETURN IT PROMPTLY IN THE PROVIDED RETURN
ENVELOPE. YOUR PROMPT RESPONSE WILL SAVE YOUR COMPANY
THE EXPENSE OF AN ADDITIONAL MAILING.
THANK YOU.
MEETING RESERVATION FORM
The 1996 Annual Meeting of Stockholders will be
held in the Auditorium, 12th floor, Two First
Union Center, Charlotte, North Carolina, on
April 16, 1996, at 9:30 a.m.
Because the Auditorium has a limited amount of
seating, we may not be able to admit shareholders who do
not return this card. In addition, if you are not the
holder of record of the shares you owned on the record
date for the meeting, you may not be able to attend the
meeting unless you present a proxy or power of attorney
or other evidence authorizing you to vote such shares at
the meeting.
You do not need to return this card if you do not
plan to attend the meeting. If you have any questions,
please contact Shareholder Services at 1-800-347-1246.
Name.......................
Address....................
...........................
City.......................
State......................
Zip Code...................
Comments
THIS IS NOT A PROXY CARD
...............................................................................
...............................................................................
<PAGE>
SERIES B CONVERTIBLE CLASS A PREFERRED STOCK
P R O X Y
FIRST UNION CORPORATION
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, Radford D.
Lovett 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 Series B Convertible Class A Preferred Stock of the Corporation held of
record by the undersigned on February 23, 1996, at the Annual Meeting of
Stockholders of the Corporation to be held on April 16, 1996, and at any and all
adjournments thereof.
1. PROPOSAL TO ELECT THE 12 NOMINEES LISTED BELOW AS DIRECTORS OF THE
CORPORATION, NINE NOMINEES TO SERVE AS CLASS I DIRECTORS WITH TERMS EXPIRING
AT THE 1999 ANNUAL MEETING OF STOCKHOLDERS, ONE NOMINEE TO SERVE AS A CLASS
II DIRECTOR WITH A TERM EXPIRING AT THE 1997 ANNUAL MEETING OF STOCKHOLDERS,
AND TWO NOMINEES TO SERVE AS CLASS III DIRECTORS WITH TERMS EXPIRING AT THE
1998 ANNUAL MEETING OF STOCKHOLDERS, IN EACH CASE UNTIL THEIR SUCCESSORS ARE
DULY ELECTED AND QUALIFIED.
<TABLE>
<S> <C>
[ ] FOR all nominees listed below (except as marked to the contrary [ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
below).
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
CLASS I: Robert J. Brown, Edward E. Crutchfield, R. Stuart Dickson, Juan
Rodriguez Inciarte, Max Lennon, Joseph Neubauer, Ruth G. Shaw, Anthony P.
Terracciano and
B.J. Walker.
CLASS II: Arthur M. Goldberg
CLASS III: Edward E. Barr and Frank M. Henry
2. PROPOSAL TO APPROVE THE CORPORATION'S 1996 EMPLOYEE STOCK PURCHASE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO APPROVE THE CORPORATION'S 1996 MASTER STOCK COMPENSATION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued on other side)
...............................................................................
...............................................................................
<PAGE>
4. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS AUDITORS OF
THE CORPORATION FOR 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED ABOVE BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" PROPOSALS 1 THROUGH 4, AS APPLICABLE. 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: 1996
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT TO US. PLEASE MARK, DATE AND SIGN
YOUR PROXY AND RETURN IT PROMPTLY IN THE PROVIDED RETURN
ENVELOPE. YOUR PROMPT RESPONSE WILL SAVE YOUR COMPANY
THE EXPENSE OF AN ADDITIONAL MAILING.
THANK YOU.
MEETING RESERVATION FORM
The 1996 Annual Meeting of Stockholders will be
held in the Auditorium, 12th floor, Two First
Union Center, Charlotte, North Carolina, on
April 16, 1996, at 9:30 a.m.
Because the Auditorium has a limited amount of
seating, we may not be able to admit shareholders who do
not return this card. In addition, if you are not the
holder of record of the shares you owned on the record
date for the meeting, you may not be able to attend the
meeting unless you present a proxy or power of attorney
or other evidence authorizing you to vote such shares at
the meeting.
You do not need to return this card if you do not
plan to attend the meeting. If you have any questions,
please contact Shareholder Services at 1-800-347-1246.
Name.......................
Address....................
...........................
City.......................
State......................
Zip Code...................
Comments
THIS IS NOT A PROXY CARD
...............................................................................
...............................................................................
