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424(b)(3)
File No. 33-50103
Prospectus Supplement to Prospectus Dated
December 19, 1995
First Union Corporation
Dividend Reinvestment and Stock Purchase Plan
Common Stock
(Par Value $3.33 1/3 Per Share)
Effective with investments made on the March 17, 1997 Investment Date, shares of
Common Stock issued to Participants in the Dividend Reinvestment and Stock
Purchase Plan will be purchased in the open market through one or more
independent agents. The Corporation expects that such open market purchases
will continue for at least the 3-month period following such date.
In addition, effective with investments made on the March 17, 1997 Investment
Date, (i) the one percent discount will continue to apply to reinvested
dividends, but will no longer apply to optional cash purchases; (ii) the
Threshold Price provisions set forth in the Plan will no longer apply; and
(iii) optional cash purchases by a Participant will be limited to a maximum of
$2,000 per month.
Participants in the Plan do not need to take any action as a result of these
changes.
Please attach this Prospectus Supplement to your copy of the Prospectus dated
December 19, 1995. Capitalized terms set forth in this Prospectus Supplement are
defined in such Prospectus. If you need a copy of such Prospectus, please call
Shareholder Services at 800-347-1246.
The date of this Prospectus Supplement is February 14, 1997.
(First Union logo)
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February 14, 1997
Dear Dividend Reinvestment Plan Participant:
As outlined on the preceding page, First Union has elected to make certain
changes in its Dividend Reinvestment and Stock Purchase Plan. These changes are
the result of shares issued under the Plan being purchased in the open market,
rather than being originally issued.
The change to open market purchases has been made with shareholder value in
mind. Originally issued shares increase the number of outstanding shares of
First Union's common stock, which affects earnings per share, a key measure of
shareholder value.
We have prepared a set of questions and answers regarding these changes for your
information. We also recommend that you refer to the most recent copy of the
Prospectus describing the Plan, which is dated December 19, 1995. If you have
any questions, or if you need a copy of the Prospectus, please call Shareholder
Services at 800-347-1246.
Questions and Answers
Regarding Changes in the Plan
Do we still receive the 1% discount?
The 1% discount will continue to apply to shares purchased with reinvested
dividends. Optional cash purchases will no longer receive the 1% discount.
However, all Participants will have the opportunity to increase their ownership
of First Union stock while avoiding brokerage fees. The Corporation will pay
all brokerage fees associated with purchasing shares in the open market until
further notification.
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Will there be any cost to participate in the Plan?
There will continue to be no cost to participate in the Plan. Although the Plan
Prospectus states that Participants will share any brokerage fees on a pro rata
basis, First Union has elected to pay all brokerage fees incurred as a result of
purchasing shares in the open market until further notification.
At what price will shares be purchased?
Purchases by an independent agent in the open market will be made at such times,
in such amounts and at such prices as the agent determines. The purchase price
will be reported on your Plan account statements.
How are my income taxes affected?
The IRS will consider your taxable dividends to be the sum of the cash dividends
paid by First Union, any brokerage fee paid by First Union and the 1% discount
received on the purchase price. Cash dividends, brokerage fees paid by First
Union and discounts will be reported on your Plan account statements. When
shares are purchased through optional cash payments, the IRS will consider that
you received taxable dividends equal to the amount of brokerage fees paid on
your behalf by the Corporation.
This tax information is general in nature and we recommend that you consult your
tax adviser for guidance relating to your particular tax circumstances.
How do I calculate my cost basis?
For shares purchased with reinvested dividends the cost basis is equal to the
amount of dividend income reported to you (the sum of the discounted purchase
price, the amount of the discount and the brokerage fee paid by the
Corporation). For shares purchased through optional cash purchases, the cost
basis will be the sum of the purchase price of the shares and the brokerage fee
paid by the Corporation, which will be recognized as dividend income.
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Has the schedule for the Dividend Reinvestment Plan been changed?
The schedule has remained the same except for the removal of the Threshold Price
dates and the Pricing Periods. The Threshold Price provisions set forth in the
Plan Prospectus will no longer apply.
Dividend Reinvestment and Stock Purchase Plan
1997 Schedule*
Record Date Investment Date
December 31, 1996 January 15, 1997
January 31, 1997 February 18, 1997
February 28, 1997** March 17, 1997**
March 31, 1997 April 15, 1997
April 30, 1997 May 15, 1997
May 30, 1997** June 16, 1997**
June 30, 1997 July 15, 1997
July 31, 1997 August 15, 1997
August 29, 1997** September 15, 1997**
September 30, 1997 October 15, 1997
October 31, 1997 November 17, 1997
November 28, 1997** December 15, 1997**
*The above table sets forth certain dates that have occurred or are expected to
occur during 1997 relating to the Dividend Reinvestment and Stock Purchase Plan.
All future dates are preliminary and subject to change.
** First Union's expected quarterly record and dividend payment dates, which are
determined by First Union's Board of Directors and are subject to change.
