AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 24, 1998
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRST UNION CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
NORTH CAROLINA 56-0898180
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
</TABLE>
ONE FIRST UNION CENTER
CHARLOTTE, NORTH CAROLINA 28288-0013
(704) 374-6565
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
MARION A. COWELL, JR., ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
FIRST UNION CORPORATION
ONE FIRST UNION CENTER
CHARLOTTE, NORTH CAROLINA 28288-0013
(704) 374-6828
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
CRAIG M. WASSERMAN, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NY 10019
(212) 403-1000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time, and such time or times as may be determined by the Selling Stockholders
after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.[X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.[ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ]
If delivery for the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[ ]
CALCULATION OF REGISTRATION FEE
[CAPTION]
<TABLE>
TITLE OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE OFFER-
BE REGISTERED (1) REGISTERED (1) PER UNIT ING PRICE
<S> <C> <C> <C>
Common Stock
(including rights to
purchase
shares of Common Stock or
junior participating Class A
Preferred Stock)............ 1,216,879 shs. $63.09375(2) $76,777,459(2)
<CAPTION>
TITLE OF
SECURITIES TO AMOUNT OF
BE REGISTERED (1) REGISTRATION FEE
<S> <C>
Common Stock
(including rights to
purchase
shares of Common Stock or
junior participating Class A
Preferred Stock)............ $23,266(2)
</TABLE>
(1) This Registration Statement relates to the resale of 1,216,879 shares of
Common Stock of the Registrant ("Common Stock") to be received by certain
persons in connection with the acquisition described in the Prospectus.
(2) Pursuant to Rule 457(c), the registration fee is based on the average of the
high and low prices per share of Common Stock on the New York Stock Exchange
Composite Transactions Tape on April 23, 1998 ($63.09375).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED APRIL 24, 1998
1,216,879 SHARES
(First Union logo FIRST UNION CORPORATION
appears here) COMMON STOCK
(PAR VALUE $3.33 1/3 PER SHARE)
This Prospectus relates to 1,216,879 shares (the "Shares") of Common Stock,
$3.33 1/3 par value per share (together with the Rights (as hereinafter defined)
attached thereto, the "Common Stock"), of First Union Corporation (the
"Corporation") beneficially owned by the stockholders named herein under
"SELLING STOCKHOLDERS". One or more of the Selling Stockholders (as hereinafter
defined) have advised the Corporation that they propose to offer the Shares,
from time to time, through brokers in brokerage transactions on the New York
Stock Exchange ("NYSE"), to underwriters, dealers or others in negotiated
transactions or in a combination of such methods of sale, at fixed prices which
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Brokers,
dealers and underwriters that participate in the distribution of the Shares may
be deemed to be underwriters under the Securities Act of 1933 (as amended, and
together with the rules and regulations thereunder, the "Securities Act"), and
any discounts or commissions received by them from any Selling Stockholder and
any profit on the resale of Shares by them may be deemed to be underwriting
discounts and commissions under the Securities Act. The Selling Stockholders may
be deemed to be underwriters under the Securities Act.
The Corporation will not receive any part of the proceeds from the sale of
the Shares. The Selling Stockholders will pay all applicable stock transfer
taxes, brokerage commissions, underwriting discounts or commissions and the fees
of the Selling Stockholders' counsel, but the Corporation will bear all other
expenses in connection with the offering made hereunder. The Corporation has
agreed to indemnify the Selling Stockholders against certain liabilities,
including certain liabilities under the Securities Act, in connection with the
registration and the offering and sale of the Shares.
The Shares are listed on the NYSE. The closing price per share of Common
Stock on the NYSE Composite Transactions Tape (the "NYSE Tape") on April ,
1998, was $ .
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR
SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
The date of this Prospectus is , 1998.
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AVAILABLE INFORMATION
The Corporation and CoreStates Financial Corp ("CoreStates") (see "RECENT
DEVELOPMENTS -- Certain Recent and Pending Acquisitions; CORESTATES FINANCIAL
CORP) are subject to the informational requirements of the Securities Exchange
Act of 1934 (as amended, and together with the rules and regulations thereunder,
the "Exchange Act"), and in accordance therewith, files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy statements and other information filed by the
Corporation and CoreStates can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the Commission's Regional Offices in New York (7 World Trade
Center, 13th Floor, New York, New York 10048) and Chicago (Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661) and copies of such
materials can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Certain of
such reports, proxy statements and other information is also available from the
Commission over the Internet at http://www.sec.gov. The Common Stock is listed
and traded on the NYSE. Reports, proxy statements and other information relating
to the Corporation and CoreStates can also be inspected at the offices of the
NYSE, 20 Broad Street, New York, New York 10005.
This Prospectus does not contain all of the information set forth in the
Registration Statement on Form S-3, of which this Prospectus is a part, and the
exhibits thereto (together with any amendments or supplements thereto, the
"Registration Statement"), which has been filed by the Corporation with the
Commission under the Securities Act, certain portions of which have been omitted
pursuant to the rules and regulations of the Commission and to which portions
reference is hereby made for further information.
THIS PROSPECTUS INCORPORATES CERTAIN DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. A COPY OF SUCH DOCUMENTS IS AVAILABLE
WITHOUT CHARGE (OTHER THAN CERTAIN EXHIBITS TO SUCH DOCUMENTS) TO EACH PERSON,
INCLUDING ANY BENEFICIAL OWNER TO WHOM THIS PROSPECTUS IS DELIVERED, UPON
WRITTEN OR ORAL REQUEST FROM: FIRST UNION CORPORATION, INVESTOR RELATIONS, ONE
FIRST UNION CENTER, CHARLOTTE, NORTH CAROLINA 28288-0206 (TELEPHONE NUMBER (704)
374-6782).
The Commissioner of Insurance of the State of North Carolina (the
"Commissioner") has not approved or disapproved this offering nor has the
Commissioner passed upon the accuracy or adequacy of this Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Commission (File
No. 1-10000) under Section 13(a) or 15(d) of the Exchange Act are hereby
incorporated by reference in this Prospectus:
(i) the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1997; and
(ii) the Corporation's Current Reports on Form 8-K dated January 22, 1998,
April 15, 1998 and April 23, 1998.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date hereof are hereby
incorporated by reference into this Prospectus and shall be deemed a part hereof
from the date of filing of such documents.
Any statement contained herein, in any supplement hereto or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of the Registration Statement and this
Prospectus to the extent that a statement contained herein, in any supplement
hereto or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the Registration Statement, this
Prospectus or any supplement hereto.
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY ACCOMPANYING SUPPLEMENTAL
PROSPECTUS, IN CONNECTION WITH THE OFFERING CONTAINED HEREIN, AND, IF GIVEN OR
MADE, SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE CORPORATION. THIS PROSPECTUS AND ANY ACCOMPANYING
SUPPLEMENTAL PROSPECTUS DO NOT CONSTITUTE AN OFFER OF ANY
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SECURITIES OTHER THAN THOSE TO WHICH THEY RELATE OR AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR ANY ACCOMPANYING SUPPLEMENTAL PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR,
IN THE CASE OF INFORMATION INCORPORATED HEREIN BY REFERENCE, THE DATE OF FILING
WITH THE COMMISSION.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This Prospectus (including information included or incorporated by
reference herein) contains certain forward-looking statements with respect to
the financial condition, results of operations, plans, objectives, future
performance and business of the Corporation, as well as certain information
relating to the Corporation's pending acquisition of CoreStates, including (i)
statements relating to the cost savings estimated to result from the CoreStates
acquisition, see "RECENT DEVELOPMENTS -- Certain Recent and Pending
Acquisitions; CORESTATES FINANCIAL CORP"; (ii) statements relating to revenues
estimated to result from the CoreStates acquisition, see "RECENT
DEVELOPMENTS -- Certain Recent and Pending Acquisitions; CORESTATES FINANCIAL
CORP"; (iii) statements relating to the restructuring charges estimated to be
incurred in connection with the CoreStates acquisition, see "RECENT
DEVELOPMENTS -- Certain Recent and Pending Acquisitions; CORESTATES FINANCIAL
CORP"; and (iv) statements preceded by, followed by or that include the words
"believes", "expects", "anticipates", "estimates" or similar expressions (see
"RECENT DEVELOPMENTS -- Certain Recent and Pending Acquisitions; CORESTATES
FINANCIAL CORP"). These forward-looking statements involve certain risks and
uncertainties. Factors that may cause actual results to differ materially from
those contemplated by such forward-looking statements include, among others, the
following possibilities: (a) expected cost savings from the CoreStates
acquisition and the Corporation's other recently completed or pending
acquisitions may not be fully realized or realized within the expected time
frame; (b) revenues following the CoreStates acquisition and the Corporation's
other recently completed or pending acquisitions may be lower than expected, or
deposit attrition, operating costs or customer loss and business disruption
following the Corestates acquisition and the Corporation's other recently
completed or pending acquisitions may be greater than expected; (c) competitive
pressures among depository and other financial institutions may increase
significantly; (d) costs or difficulties related to the integration of the
business of the Corporation with other of the Corporation's acquired or to be
acquired companies may be greater than expected; (e) changes in the interest
rate environment may reduce margins; (f) general economic or business
conditions, either nationally or in the states in which the Corporation,
CoreStates or other of the Corporation's acquired or to be acquired companies is
doing business, may be less favorable than expected resulting in, among other
things, a deterioration in credit quality or a reduced demand for credit; (g)
legislative or regulatory changes may adversely affect the business in which the
Corporation, CoreStates or any other of the Corporation's recently acquired or
to be acquired companies is engaged; and (h) changes may occur in the securities
markets.
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THE CORPORATION
GENERAL
Financial and other information relating to the Corporation, including
information relating to the Corporation's directors and executive officers, is
set forth in the Corporation's Form 10-K, 1998 Annual Meeting Proxy Statement
and 1998 Current Reports on Form 8-K, copies of which may be obtained from the
Corporation as indicated under "AVAILABLE INFORMATION".
HISTORY AND BUSINESS
The Corporation was incorporated under the laws of North Carolina in 1967
and is registered as a bank holding company under the Bank Holding Company Act
of 1956 (as amended, the "BHCA"). Pursuant to a corporate reorganization in
1968, First Union National Bank ("FUNB") and First Union Mortgage Corporation, a
mortgage banking firm acquired by FUNB in 1964, became subsidiaries of the
Corporation.
The Corporation provides a wide range of commercial and retail banking and
trust services through full-service banking offices in Connecticut, Delaware,
Florida, Georgia, Maryland, New Jersey, New York, North Carolina, Pennsylvania,
South Carolina, Tennessee, Virginia and Washington, D.C. Such offices are
operated by FUNB in Charlotte, North Carolina, except the Delaware offices,
which are operated by First Union Bank of Delaware. See " -- Certain Regulatory
Considerations; INTERSTATE BANKING AND BRANCHING LEGISLATION". The Corporation
also provides various other financial services, including mortgage banking,
credit card, investment banking, home equity lending, leasing, insurance and
securities brokerage services, through other subsidiaries.
Since the 1985 Supreme Court decision upholding regional interstate banking
legislation, the Corporation has concentrated its efforts on building a large,
financial services organization providing banking services in what it perceives
to be some of the better markets in the eastern region of the United States and
providing other financial services that complement such banking services in such
markets and elsewhere. Since November 1985, the Corporation has completed over
70 acquisitions relating to financial services, and currently has pending three
such acquisitions, including the more significant acquisitions (I.E., involving
the acquisition of $3.0 billion or more of assets or deposits) set forth in the
following table. See "RECENT DEVELOPMENTS -- Certain Recent and Pending
Acquisitions".
<TABLE>
<CAPTION>
ASSETS/ CONSIDERATION/
NAME HEADQUARTERS DEPOSITS(1)(2) ACCOUNTING TREATMENT COMPLETION DATE
<S> <C> <C> <C> <C>
Atlantic Bancorporation...................... Florida $ 3.8 billion common stock/pooling November 1985
Northwestern Financial Corporation........... North Carolina 3.0 billion common stock/pooling December 1985
First Railroad & Banking Company of
Georgia.................................... Georgia 3.7 billion common stock/pooling November 1986
Florida National Banks of Florida, Inc....... Florida 7.9 billion cash and preferred January 1990
stock/purchase
Southeast banks.............................. Florida 9.9 billion cash, notes and preferred September 1991
stock/
purchase
Resolution Trust Company ("RTC")
acquisitions............................... Florida, 5.3 billion cash/purchase 1991-1994
Georgia,
Virginia
Dominion Bankshares Corporation.............. Virginia 8.9 billion common stock and March 1993
preferred stock/pooling
Georgia Federal Bank, FSB.................... Georgia 4.0 billion cash/purchase June 1993
First American Metro Corp.................... Virginia 4.6 billion cash/purchase June 1993
American Savings of Florida, F.S.B........... Florida 3.6 billion common stock/purchase July 1995
First Fidelity Bancorporation................ New Jersey, 35.3 billion common stock and January 1996
Pennsylvania preferred stock/pooling
Center Financial Corporation................. Connecticut 4.0 billion common stock/purchase November 1996
Signet Banking Corporation................... Virginia 11.3 billion common stock/pooling November 1997
CoreStates................................... Pennsylvania 48.5 billion common stock/pooling pending
The Money Store Inc.......................... California, $ 3.1 billion common stock and pending
New Jersey preferred stock/purchase
</TABLE>
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(1) The dollar amounts indicated represent the assets of the related
organization as of the last reporting period prior to acquisition, except
for (i) the dollar amount relating to RTC acquisitions, which represents
savings and loan deposits acquired from the RTC, and (ii) the dollar amount
relating to Southeast banks, which represent assets of the two banking
subsidiaries of Southeast Banking Corporation acquired from the FDIC.
(2) In addition, the Corporation acquired (i) Lieber & Company, a mutual fund
advisory company with approximately $3.4 billion in assets under management,
in June 1994, and (ii) Keystone Investments, Inc., a mutual fund advisory
company with approximately $11.6 billion in assets under management, in
December 1996. Since such assets are not owned by these mutual advisory
companies, they are not reflected on the Corporation's balance sheet.
The Corporation is continually evaluating acquisition opportunities and
frequently conducts due diligence activities in connection with possible
acquisitions. As a result, acquisition discussions and, in some cases,
negotiations frequently take place and future acquisitions involving cash, debt
or equity securities can be expected. Acquisitions typically involve the payment
of a premium over book and market values, and therefore, some dilution of the
Corporation's book value and net income per share may occur in connection with
any future transactions.
CERTAIN REGULATORY CONSIDERATIONS
THE FOLLOWING DISCUSSION SETS FORTH CERTAIN OF THE MATERIAL ELEMENTS OF THE
REGULATORY FRAMEWORK APPLICABLE TO BANK HOLDING COMPANIES AND THEIR SUBSIDIARIES
AND PROVIDES CERTAIN SPECIFIC INFORMATION RELEVANT TO THE CORPORATION. TO THE
EXTENT THAT THE FOLLOWING INFORMATION DESCRIBES STATUTORY AND REGULATORY
PROVISIONS, IT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE APPLICABLE
STATUTORY AND REGULATORY PROVISIONS. A CHANGE IN APPLICABLE STATUTES,
REGULATIONS OR REGULATORY POLICY MAY HAVE A MATERIAL EFFECT ON THE BUSINESS OF
THE CORPORATION.
GENERAL
As a bank holding company, the Corporation is subject to regulation under
the BHCA and to its examination and reporting requirements. Under the BHCA, bank
holding companies may not directly or indirectly acquire the ownership or
control of more than five percent of the voting shares or substantially all of
the assets of any company, including a bank, without the prior approval of, or a
waiver of the requirement for such approval by, the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"). In addition, bank holding
companies are generally prohibited under the BHCA from engaging in nonbanking
activities, subject to certain exceptions.
The earnings of the Corporation are affected by the legislative and
governmental actions of various regulatory authorities, including the Federal
Reserve Board, the Comptroller of the Currency (the "OCC") and the Federal
Deposit Insurance Corporation (the "FDIC"). In addition, there are numerous
governmental requirements and regulations which affect the activities of the
Corporation.
PAYMENT OF DIVIDENDS
The Corporation is a legal entity separate and distinct from its banking
and other subsidiaries. A major portion of the Corporation's revenues result
from amounts paid as dividends to the Corporation by its national bank
subsidiaries. The prior approval of the OCC is required for the payment of any
dividend by a national bank if the total of all dividends declared by the board
of directors of such bank in any calendar year will exceed the sum of such
bank's net profits for that year and its retained net profits for the preceding
two calendar years, less any required transfers to surplus. Federal law also
prohibits any national bank from paying dividends which would be greater than
such bank's undivided profits after deducting statutory bad debt in excess of
such bank's allowance for loan losses.
In addition to its national bank subsidiaries, the Corporation has one
state-chartered bank subsidiary which is subject to dividend limitations under
applicable state laws.
Under the foregoing dividend restrictions and certain restrictions
applicable to certain of the Corporation's nonbanking subsidiaries, as of
December 31, 1997, the Corporation's subsidiaries, without obtaining affirmative
governmental approvals, could pay aggregate dividends of $426 million to the
Corporation. In 1997, the Corporation's subsidiaries paid $1.3 billion in cash
dividends to the Corporation.
In addition, the Corporation and its bank subsidiaries are subject to
various general regulatory policies and requirements relating to the payment of
dividends, including requirements to maintain adequate capital above regulatory
minimums. The
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appropriate federal regulatory authority is authorized to determine, under
certain circumstances relating to the financial condition of a national bank or
bank holding company, that the payment of dividends would be an unsafe or
unsound practice and to prohibit payment thereof. The OCC (the appropriate
agency with respect to the Corporation's national bank subsidiaries) and the
FDIC (the appropriate agency with respect to the Corporation's state-chartered
bank subsidiary) have indicated that paying dividends that deplete a bank's
capital base to an inadequate level would be an unsound and unsafe banking
practice. The OCC, the FDIC and the Federal Reserve Board have each indicated
that banking organizations should generally pay dividends only out of current
operating earnings.
BORROWINGS; ETC.
There are also various legal restrictions on the extent to which each of
the Corporation and certain of its nonbank subsidiaries can borrow or otherwise
obtain credit from its bank subsidiaries. In general, these restrictions require
that any such extensions of credit must be secured by designated amounts of
specified collateral and are limited, as to any one of the Corporation or such
nonbank subsidiaries, to ten percent of the lending bank's capital stock and
surplus, and as to the Corporation and all such nonbank subsidiaries in the
aggregate, to 20 percent of such lending bank's capital stock and surplus.
The Federal Deposit Insurance Act, as amended (the "FDIA") imposes
liability on an institution the deposits of which are insured by the FDIC, such
as the Corporation's subsidiary banks, for certain potential losses of the FDIC
incurred in connection with other FDIC-insured institutions under common control
with such institution.
Under the National Bank Act, if the capital stock of a national bank is
impaired by losses or otherwise, the OCC is authorized to require payment of the
deficiency by assessment upon the bank's stockholders, pro rata and, to the
extent necessary, if any such assessment is not paid by any stockholder after
three months notice, to sell the stock of such stockholder to make good the
deficiency.
Under Federal Reserve Board policy, the Corporation is expected to act as a
source of financial strength to each of its subsidiary banks and to commit
resources to support each of such subsidiaries. This support may be required at
times when, absent such Federal Reserve Board policy, the Corporation may not
find itself willing or able to provide it.
Any capital loans by a bank holding company to any of its subsidiary banks
are subordinate in right of payment to deposits and to certain other
indebtedness of such subsidiary banks. In the event of a bank holding company's
bankruptcy, any commitment by the bank holding company to a federal bank
regulatory agency to maintain the capital of a subsidiary bank will be assumed
by the bankruptcy trustee and entitled to a priority of payment.
CAPITAL ADEQUACY
The Federal Reserve Board, the FDIC and the OCC have adopted substantially
similar risk-based and leverage capital guidelines for United States banking
organizations. Under these risked-based capital standards, the minimum
consolidated ratio of total capital to risk-weighted assets (including certain
off-balance sheet activities, such as standby letters of credit) is eight
percent. At least half of the total capital is to be composed of common
stockholder's equity, retained earnings, a limited amount of qualifying
perpetual preferred stock and minority interests in the equity accounts of
consolidated subsidiaries, less goodwill and certain intangibles ("tier 1
capital" and, together with tier 2 capital, "total capital"). The remainder of
total capital may consist of mandatory convertible debt securities and a limited
amount of subordinated debt, qualifying preferred stock and loan loss allowance
("tier 2 capital"). At December 31, 1997, the Corporation's tier 1 and total
capital ratios were 8.41 percent and 13.40 percent, respectively.
In addition, the Federal Reserve Board has established minimum leverage
ratio guidelines for bank holding companies. These guidelines provide for a
minimum leverage ratio of tier 1 capital to adjusted average quarterly assets
less certain amounts ("leverage ratio") equal to three percent for bank holding
companies that meet certain specified criteria, including having the highest
regulatory rating. All other bank holding companies will generally be required
to maintain a leverage ratio of from at least four to five percent. The
Corporation's leverage ratio at December 31, 1997, was 6.81 percent. The
guidelines also provide that bank holding companies experiencing internal growth
or making acquisitions will be expected to maintain strong capital positions
substantially above the minimum supervisory levels without significant reliance
on intangible assets. Furthermore, the guidelines indicate that the Federal
Reserve Board will continue to consider a "tangible tier 1 leverage ratio"
(deducting all intangibles) in evaluating proposals for expansion or new
activity. The Federal Reserve Board has not advised the Corporation of any
specific minimum leverage ratio or tangible tier 1 leverage ratio applicable to
it.
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Each of the Corporation's subsidiary banks is subject to similar capital
requirements adopted by the OCC or the FDIC. Each of the Corporation's
subsidiary banks had a leverage ratio in excess of 6.01 percent at December 31,
1997. The federal banking agencies have not advised any of the subsidiary banks
of any specific minimum leverage ratio applicable to it.
PROMPT CORRECTIVE ACTION
The FDIA, among other things, requires the federal banking agencies to take
"prompt corrective action" in respect of depository institutions that do not
meet minimum capital requirements. The FDIA establishes five capital tiers:
"well capitalized"; "adequately capitalized"; "undercapitalized"; "significantly
undercapitalized"; and "critically undercapitalized". A depository institution's
capital tier will depend upon how its capital levels compare to various relevant
capital measures and certain other factors, as established by regulation.
The federal bank regulatory agencies have adopted regulations establishing
relevant capital measures and relevant capital levels applicable to FDIC-insured
banks. The relevant capital measures are the total capital ratio, tier 1 capital
ratio and the leverage ratio. Under the regulations, a FDIC-insured bank will be
(i) "well capitalized" if it has a total capital ratio of ten percent or
greater, a tier 1 capital ratio of six percent or greater and a leverage ratio
of five percent or greater and is not subject to any order or written directive
by the OCC to meet and maintain a specific capital level for any capital
measure; (ii) "adequately capitalized" if it has a total capital ratio of eight
percent or greater, a tier 1 capital ratio of four percent or greater and a
leverage ratio of four percent or greater (three percent in certain
circumstances) and is not "well capitalized"; (iii) "undercapitalized" if it has
a total capital ratio of less than eight percent, a tier 1 capital ratio of less
than four percent or a leverage ratio of less than four percent (three percent
in certain circumstances); (iv) "significantly undercapitalized" if it has a
total capital ratio of less than six percent, a tier 1 capital ratio of less
than three percent or a leverage ratio of less than three percent; and (v)
"critically undercapitalized" if its tangible equity is equal to or less than
two percent of average quarterly tangible assets. An institution may be
downgraded to, or deemed to be in, a capital category that is lower than is
indicated by its capital ratios if it is determined to be in an unsafe or
unsound condition or if it receives an unsatisfactory examination rating with
respect to certain matters. As of December 31, 1997, all of the Corporation's
deposit-taking subsidiary banks had capital levels that qualify them as being
"well capitalized" under such regulations.
The FDIA generally prohibits a FDIC-insured depository institution from
making any capital distribution (including payment of a dividend) or paying any
management fee to its holding company if the depository institution would
thereafter be "undercapitalized". "Undercapitalized"depository institutions are
subject to growth limitations and are required to submit a capital restoration
plan. The federal banking agencies may not accept a capital plan without
determining, among other things, that the plan is based on realistic assumptions
and is likely to succeed in restoring the depository institution's capital. In
addition, for a capital restoration plan to be acceptable, the depository
institution's parent holding company must guarantee that the institution will
comply with such capital restoration plan. The aggregate liability of the parent
holding company is limited to the lesser of: (i) an amount equal to five percent
of the depository institution's total assets at the time it became
"undercapitalized"; and (ii) the amount which is necessary (or would have been
necessary) to bring the institution into compliance with all capital standards
applicable with respect to such institution as of the time it fails to comply
with the plan. If a depository institution fails to submit an acceptable plan,
it is treated as if it is "significantly undercapitalized".
"Significantly undercapitalized" insured depository institutions may be
subject to a number of requirements and restrictions, including orders to sell
sufficient voting stock to become "adequately capitalized", requirements to
reduce total assets, and cessation of receipt of deposits from correspondent
banks. "Critically undercapitalized" institutions are subject to the appointment
of a receiver or conservator. A bank that is not "well capitalized" is subject
to certain limitations relating to so-called "brokered" deposits.
DEPOSITOR PREFERENCE STATUTE
Under federal law, deposits and certain claims for administrative expenses
and employee compensation against an insured depository institution would be
afforded a priority over other general unsecured claims against such an
institution, including federal funds and letters of credit, in the "liquidation
or other resolution" of such an institution by any receiver.
INTERSTATE BANKING AND BRANCHING LEGISLATION
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
(the "IBBEA") authorized interstate acquisitions of banks and bank holding
companies without geographic limitation beginning one year after enactment. In
addition, it authorized, beginning June 1, 1997, a bank to merge with a bank in
another state as long as neither of the states has opted out of interstate
branching between the date of enactment of the IBBEA and May 31, 1997. In
addition, a bank may establish and operate a DE NOVO branch in a state in which
the bank does not maintain a branch if that state expressly permits DE NOVO
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interstate branching. It was pursuant to authority from IBBEA that the
Corporation reorganized certain of its subsidiary banks in 1997 and February
1998, as a result of which FUNB, based in Charlotte, North Carolina, operates in
11 states and Washington, D.C.
RECENT DEVELOPMENTS
CERTAIN FINANCIAL DATA FOR THE THREE MONTHS ENDED MARCH 31, 1998
The Corporation's net income was $587 million in the first quarter of 1998,
a 16 percent increase from $504 million in the first quarter of 1997 and a 62
percent increase from $362 million in the fourth quarter of 1997. The first
quarter of 1998 and the fourth quarter of 1997 included pre-tax merger-related
and restructuring charges of $29 million and $210 million, respectively. Net
income per diluted share increased to $0.90 from $0.79 in the first quarter of
1997 and $0.56 in the fourth quarter of 1997.
The Corporation's return on average equity was 19.60 percent and its return
on average assets was 1.45 percent in the first quarter of 1998, compared with
19.15 percent and 1.40 percent, respectively, in the first quarter of 1997 and
12.29 percent and 0.94 percent, respectively, in the fourth quarter of 1997.
Tax-equivalent net interest income was $1.4 billion in each of the first
quarter of 1998, the first quarter of 1997 and the fourth quarter of 1997.
Annualized net charge-offs as a percentage of average net loans were 0.36
percent in the first quarter of 1998, compared with 0.63 percent in the first
quarter of 1997 and 0.53 percent in the fourth quarter of 1997. The loan loss
provision was $90 million, compared to $162 million in the first quarter of 1997
and $325 million in the fourth quarter of 1997.
Net loans at March 31, 1998, were $98 billion, compared with $102 billion
at the end of first quarter of 1997 and $97 billion at year-end 1997.
Deposits were $103 billion at March 31, 1998, compared with $100 billion at
the end of the first quarter a year ago and $103 billion at year-end 1997. Total
stockholders' equity was $12 billion at March 31, 1998, compared with $10
billion at March 31, 1997 and $12 billion at year-end 1997.
At March 31, 1998, the Corporation had assets of $172 billion.
CERTAIN RECENT AND PENDING ACQUISITIONS
WHEAT FIRST BUTCHER SINGER, INC.
On January 31, 1998, the Corporation completed the pooling of interests
acquisition of Wheat First Butcher Singer, Inc. ("WFBS"). Approximately 10.3
million shares of Common Stock were issued in the WFBS acquisition. At December
31, 1997, WFBS had assets of $1 billion.
COVENANT BANCORP, INC.
On January 15, 1998, the Corporation completed the acquisition of Covenant
Bancorp, Inc. ("Covenant"). Covenant had $415 million in assets as of December
31, 1997. Approximately 1.6 million shares of Common Stock were issued in the
Covenant acquisition. The Covenant acquisition was accounted for as a purchase.
A number of shares of Common Stock equal to the number of such shares issued in
the Covenant acquisition has been repurchased by the Corporation in the open
market.
CORESTATES FINANCIAL CORP
On November 18, 1997, the Corporation entered into an agreement to acquire
CoreStates, a bank holding company based in Philadelphia, Pennsylvania.
CoreStates, through its lead bank subsidiary, CoreStates Bank, N.A., provides
financial services through banking offices located in Pennsylvania, New Jersey
and Delaware. As of December 31, 1997, CoreStates reported assets of $48
billion, net loans of $35 billion, deposits of $34 billion, stockholders' equity
of $3 billion and net income of $813 million. Under the terms of the CoreStates
acquisition agreement, the Corporation will exchange 1.62 shares of Common Stock
for each outstanding share of CoreStates common stock. The CoreStates
acquisition, which will be accounted for as a pooling of interests, is expected
to close by April 30, 1998, subject to certain conditions of closing. The
stockholders of the Corporation and CoreStates approved the CoreStates
acquisition agreement on February 27, 1998. The Federal Reserve Board approved
the CoreStates aquisition on April 13, 1998. Based on the 200 million shares of
CoreStates
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common stock outstanding on January 2, 1998, and the 1.62 exchange ratio,
approximately 324 million shares of Common Stock are expected to be issued upon
consummation of the CoreStates acquisition.
In connection with the CoreStates acquisition, CoreStates granted the
Corporation an option to purchase, under certain circumstances, up to 19.9
percent of the outstanding shares of common stock of CoreStates at a price of
$72.00 per share, subject to certain adjustments, and the Corporation granted
CoreStates an option to purchase, under certain circumstances, up to 9.9 percent
of the outstanding shares of Common Stock at a price of $52.00 per share,
subject to certain adjustments. Under certain circumstances, the respective
issuers of such options may be required to repurchase the options or the shares
acquired pursuant to the exercise thereof. In addition, following consummation
of the CoreStates acquisition Terrence A. Larsen, CoreStates' Chairman and Chief
Executive Officer, would become a Vice Chairman of the Corporation. Also, six
directors of CoreStates would become directors of the Corporation, including Mr.
Larsen.
On November 18, 1997, the Corporation filed a Current Report on Form 8-K
with the Commission (the "CoreStates Form 8-K"), which contains, among other
things, certain financial and other information (the "CoreStates Form 8-K
Materials") about CoreStates and the CoreStates acquisition. The CoreStates Form
8-K Materials contain certain forward-looking statements regarding the
Corporation, CoreStates and the combined organization following the CoreStates
acquisition, including statements relating to estimated cost savings and
enhanced revenues that may be realized from the CoreStates acquisition, and
certain restructuring charges expected to be incurred in connection with the
CoreStates acquisition. Such forward-looking statements involve significant
risks and uncertainties. Actual results may differ materially from the results
discussed in the CoreStates Form 8-K Materials and herein. Factors that might
cause such a difference include, but are not limited to, those discussed in the
CoreStates Form 8-K, in the Corporation's 1997 Annual Report on Form 10-K and
under "CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION".
As indicated in the CoreStates Form 8-K:
(Bullet) The Corporation expects to realize before-tax expense savings
resulting from the CoreStates acquisition of approximately $406
million and $723 million in 1998 and 1999, respectively, or
approximately $258 million and $459 million after-tax,
respectively. These estimates assume that approximately 45 percent
of CoreStates' 1997 annualized expenses are eliminated by the end
of 1999.
(Bullet) The Corporation expects to realize before-tax revenue enhancements
relating to the CoreStates acquisition of approximately $123
million and $194 million in 1998 and 1999, respectively, or
approximately $58 million and $89 million after-tax, respectively.
These estimates are primarily based on the Corporation's broader
array of income generating products from its capital markets,
capital management and other fee producing businesses.
(Bullet) Assuming (i) the restructuring charges discussed below and the
expense savings and revenue enhancements discussed above are as
estimated, (ii) 985 million shares of Common Stock are outstanding
in 1998 and 999 million shares are outstanding in 1999, (iii) the
CoreStates acquisition is consummated by mid-1998, (iv) the
conversion of CoreStates' operations and computer systems to the
Corporation's operations and computer systems is completed by
November 1998, (v) 1998 earnings per share of (a) Common Stock are
$3.91, and (b) CoreStates common stock are $4.23, each of which
represents the First Call consensus earnings estimates as of
November 18, 1997 (before public announcement of the CoreStates
acquisition, the "1998 Illustrative First Call Consensus
Estimates"), (vi) 1999 earnings per share of Common Stock and
CoreStates common stock are equal to the 1998 Illustrative First
Call Consensus Estimates plus 11 percent for the Corporation and
ten percent for CoreStates (the "1999 Illustrative Estimates")
(I.E., $4.34 per share of Common Stock and $4.65 per share of
CoreStates common stock), and (vii) certain other assumptions
contained in the CoreStates Form 8-K, the CoreStates acquisition
is estimated to dilute the 1998 Illustrative First Call Consensus
Estimate per share of Common Stock by $.09 and add $.12 to the
1999 Illustrative Estimate per share of Common Stock. The 1998
Illustrative First Call Consensus Estimates and the 1999
Illustrative Estimates are presented for illustrative purposes
only, are subject to the risks and uncertainties set forth in the
CoreStates Form 8-K Materials, the Corporation's 1997 Annual
Report on Form 10-K and under "CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING INFORMATION", among others, and do not constitute
earnings projections or estimates by the Corporation or
CoreStates.
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(Bullet) The Corporation expects to record after-tax restructuring and
merger-related charges associated with the CoreStates acquisition,
currently estimated at $795 million, or $0.81 per share of Common
Stock, in the second quarter of 1998. The estimated $795 million
restructuring charge is summarized below.
<TABLE>
<CAPTION>
(IN MILLIONS, AFTER TAX)
<S> <C>
Severance and change in control related obligations........................................... $214
Fixed asset write-downs and vacant space accruals............................................. 289
Service contract terminations................................................................. 127
Charitable support............................................................................ 63
Other......................................................................................... 102
Total......................................................................................... $795
</TABLE>
The estimated restructuring charge includes approximately $149 million in
non-cash charges. Cash payments included in the estimated restructuring charge
are expected to be completed within 18 months from the date of consummation. The
"Other" category includes CoreStates acquisition-related amounts, none of which
individually is estimated to exceed $50 million. The amounts included in the
$795 million estimated restructuring charge are subject to change prior to the
effective date of the CoreStates acquisition. The estimates include assumptions
about the timing of the consummation of the CoreStates acquisition and the
number of employees whose employment will terminate as a result of the
CoreStates acquisition. Changes in such assumptions could result in a change in
the estimated restructuring charge. In addition, the Corporation estimates that
another $75 million in CoreStates pre-tax, acquisition-related costs will be
incurred over the 12 months following the date the CoreStates acquisition is
consummated. These costs primarily relate to training and systems conversions.
THE MONEY STORE INC.
On March 4, 1998, the Corporation entered into an agreement to acquire The
Money Store Inc. ("The Money Store"), a consumer finance lender based in Union,
New Jersey. The Money Store operates 172 offices located in all 50 states,
Washington, D.C. and Puerto Rico. Under the terms of the agreement, each share
of The Money Store common stock will be exchanged for a number of shares of
Common Stock (the "Exchange Ratio") having a value of $34 per share. In
addition, each share of The Money Store mandatory convertible preferred stock,
depending upon the outcome of the vote by the holders of such stock with respect
thereto, will be converted into either (i) a number of shares of Common Stock
equal to the Exchange Ratio times .92, or (ii) an equal number of shares of a
series of the Corporation's Class A Preferred Stock having terms substantially
the same as The Money Store mandatory convertible preferred stock, as adjusted
to reflect The Money Store acquisition. Based on a price of $52.75 per share of
Common Stock (the last reported sale price per share of Common Stock on the NYSE
Tape on March 3, 1998, the day before the acquisition was announced), the
purchase price would be approximately $2.1 billion. The Money Store acquisition,
which will be accounted for as a purchase, is expected to close by the third
quarter of 1998, subject to certain conditions of closing. The Corporation
expects to repurchase shares of Common Stock in the open market in an amount up
to the number of shares of Common Stock expected to be issued in The Money Store
acquisition, which is estimated to be approximately 41 million shares. As of
December 31, 1997, The Money Store had assets of $3 billion, net loans of $1
billion, total stockholders' equity of $666 million and net income applicable to
common stockholders of $83 million.
BOWLES HOLLOWELL CONNER & CO.
On March 9, 1998, the Corporation entered into an agreement to acquire
Bowles Hollowell Conner & Co. ("Bowles Hollowell Conner"), a privately-held
mergers and acquisitions advisory firm based in Charlotte, North Carolina. The
detailed terms of the acquisition of Bowles Hollowell Conner (the "Bowles
Hollowell Conner Acquisition"), which have not been publicly disclosed, call for
the Corporation to issue 1,216,879 Shares to the Selling Stockholders. The
number of Shares to be issued was based on a formula price of $52.3875 per
share. The Bowles Hollowell Conner Acquisition, which will be accounted for as a
purchase, is expected to close in the second quarter of 1998, subject to certain
conditions of closing. In connection with the Bowles Hollowell Conner
Acquisition, the Corporation expects to repurchase a number of the outstanding
shares of Common Stock equal to the number of shares of Common Stock expected to
be issued in the Bowles Hollowell Conner Acquisition.
POSSIBLE FUTURE ACQUISITIONS
The Corporation is continually evaluating acquisition opportunities and
frequently conducts due diligence activities in connection with possible
acquisitions. As a result, acquisition discussions and, in some cases,
negotiations, frequently take
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place and future acquisitions involving cash, debt and equity securities can be
expected. Acquisitions typically involve the payment of a premium over book and
market values, and therefore some dilution of the Corporation's book value and
net income may occur in connection with future acquisitions.
DESCRIPTION OF THE CORPORATION'S CAPITAL STOCK
THE DESCRIPTIVE INFORMATION BELOW OUTLINES CERTAIN PROVISIONS OF THE
ARTICLES OF INCORPORATION, AS AMENDED (THE "ARTICLES"), AND BYLAWS OF THE
CORPORATION AND THE NORTH CAROLINA BUSINESS CORPORATION ACT ("NCBCA"). THE
INFORMATION DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ALL RESPECTS BY
REFERENCE TO THE PROVISIONS OF THE CORPORATION'S ARTICLES AND BYLAWS AND THE
NCBCA.
AUTHORIZED CAPITAL
The authorized capital stock of the Corporation consists of 2,000,000,000
shares of Common Stock, 10,000,000 shares of Preferred Stock, no-par value per
share ("Preferred Stock"), and 40,000,000 shares of Class A Preferred Stock,
no-par value per share ("Class A Preferred Stock"). As of March 31, 1998, there
were 644,493,340 shares of Common Stock, no shares of Class A Preferred Stock,
and no shares of Preferred Stock issued and outstanding. See "RECENT
DEVELOPMENTS -- Certain Recent and Pending Acquisitions; THE MONEY STORE INC."
The Preferred Stock and Class A Preferred Stock are each issuable in one or more
series and, with respect to any series, the Board of Directors of the
Corporation, subject to certain limitations, is authorized to fix the numbers of
shares, dividend rates, liquidation prices, liquidation rights of holders,
redemption, conversion and voting rights and other terms of the series. Shares
of Class A Preferred Stock and Preferred Stock that are redeemed, repurchased or
otherwise acquired by the Corporation have the status of authorized, unissued
and undesignated shares of Class A Preferred Stock and Preferred Stock,
respectively, and may be reissued.
COMMON STOCK
Subject to the prior rights of the holders of any Preferred Stock and any
Class A Preferred Stock then outstanding, holders of Common Stock are entitled
to receive such dividends as may be declared by the Board of Directors out of
funds legally available therefor and, in the event of liquidation or
dissolution, to receive the net assets of the Corporation remaining after
payment of all liabilities and after payment to holders of all shares of
Preferred Stock and Class A Preferred Stock of the full preferential amounts to
which such holders are respectively entitled, in proportion to their respective
holdings.
See "THE CORPORATION -- Certain Regulatory Considerations" for information
relating to certain regulatory restrictions on the payment of dividends by
banks, including the Corporation's subsidiary banks.
Pursuant to an indenture dated as of November 27, 1996, between the
Corporation and Wilmington Trust Company, as trustee, under which certain of the
Corporation's outstanding junior subordinated debt securities have been issued,
the Corporation has covenanted that it generally will not declare or pay any
dividends or distributions on, or redeem, repurchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock,
including Common Stock, Preferred Stock and Class A Preferred Stock if, at such
time, certain defaults have occurred under such indenture or related guarantee
of the Corporation or the Corporation shall have exercised its rights under such
indenture to defer interest payments on the securities issued thereunder.
Subject to the rights of the holders of any Preferred Stock and any Class A
Preferred Stock then outstanding, all voting rights are vested in the holders of
the shares of Common Stock, each share being entitled to one vote on all matters
requiring stockholder action and in the election of directors. Holders of Common
Stock have no preemptive, subscription or conversion rights. All of the
outstanding shares of Common Stock, including the Shares, are fully paid and
nonassessable.
FUNB is the Transfer Agent, Registrar and Dividend Disbursement Agent for
the Common Stock, including the Shares.
PREFERRED STOCK
All shares of each series of Preferred Stock must be of equal rank and have
the same powers, preferences and rights and are subject to the same
qualifications, limitations and restrictions, except with respect to dividend
rates, redemption prices, liquidation amounts, terms of conversion or exchange
and voting rights.
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CLASS A PREFERRED STOCK
Shares of Class A Preferred Stock rank prior or superior to Common Stock
and on a parity with or junior to (but not prior or superior to) Preferred Stock
or any series thereof, in respect of the right to receive dividends and/or the
right to receive payments out of the net assets of the Corporation upon any
involuntary or voluntary liquidation, dissolution or winding up of the
Corporation. Subject to the foregoing and the terms of any particular series of
Class A Preferred Stock, series of Class A Preferred Stock may vary as to
priority.
RIGHTS PLAN
Each outstanding share of Common Stock currently has attached to it one
right (a "Right") issued pursuant to an Amended and Restated Shareholder
Protection Rights Agreement (the "Rights Agreement"). Each Right entitles its
registered holder to purchase one one-hundredth of a share of a junior
participating series of Class A Preferred Stock designed to have economic and
voting terms similar to those of one share of Common Stock, for $105.00, subject
to adjustment (the "Rights Exercise Price"), but only after the earlier to occur
(the "Separation Time") of: (i) the tenth business day (subject to extension)
after any person (an "Acquiring Person") (x) commences a tender or exchange
offer, which, if consummated, would result in a person becoming the beneficial
owner of 15 percent or more of the outstanding shares of Common Stock, or (y) is
determined by the Federal Reserve Board to "control" the Corporation within the
meaning of the BHCA (see " -- Other Provisions" below), subject to certain
exceptions; and (ii) the tenth business day after the first date (the "Flip-in
Date") of a public announcement by the Corporation that a person has become an
Acquiring Person. The Rights will not trade separately from the shares of Common
Stock unless and until the Separation Time occurs.
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 that such person no longer controls
the Corporation within 30 days (or 60 days in certain circumstances), 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
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.
The Rights will not be exercisable until the business day following the
Separation Time. The Rights will expire on the earliest of: (i) the Exchange
Time (as defined below); (ii) the close of business on December 28, 2000; and
(iii) the date on which the Rights are redeemed or terminated as described below
(in any such case, the "Expiration Time"). The Rights Exercise Price and the
number of Rights outstanding, or in certain circumstances the securities
purchasable upon exercise of the Rights, are subject to adjustment upon the
occurrence of certain events.
In the event that prior to the Expiration Time a Flip-in Date occurs, the
Corporation will take such action as shall be necessary to ensure and provide
that each Right (other than Rights beneficially owned by an Acquiring Person or
any affiliate, associate or transferee thereof, which Rights shall become void)
shall constitute the right to purchase, from the Corporation, shares of Common
Stock having an aggregate market price equal to twice the Rights Exercise Price
for an amount in cash equal to the then current Rights Exercise Price. In
addition, the Board of Directors of the Corporation may, at its option, at any
time after a Flip-in Date, elect to exchange all of the then outstanding Rights
for shares of Common Stock, at an exchange ratio of two shares of Common Stock
per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the Separation Time (the "Rights Exchange
Rate"). Immediately upon such action by the Board of Directors (the "Exchange
Time"), the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive a number of shares of Common
Stock equal to the Rights Exchange Rate. If the Corporation becomes obligated to
issue shares of Common Stock upon exercise of or in exchange for Rights, the
Corporation, at its option, may substitute for each such share of Common Stock
one one-hundredth of a share of junior participating Class A Preferred Stock.
The Rights may be canceled and terminated without any payment to holders
thereof at any time prior to the date that they become exercisable, and are
redeemable by the Corporation at $0.01 per Right, subject to adjustment upon the
occurrence of certain events, at any date between the date on which they become
exercisable and the Flip-in Date. The Rights have no voting rights, and they are
not entitled to dividends.
The Rights will not prevent a takeover of the Corporation. The Rights,
however, may cause substantial dilution to a person or group that acquires 15
percent or more of Common Stock (or that acquires "control" of the Corporation
within the
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<PAGE>
meaning of the BHCA) unless the Rights are first redeemed or terminated by the
Board of Directors of the Corporation. Nevertheless, the Rights should not
interfere with a transaction that is in the best interests of the Corporation
and its stockholders because the Rights can be redeemed or terminated, as
hereinabove described, before the consummation of such transaction.
The complete terms of the Rights are set forth in the Rights Agreement. The
foregoing description of the Rights and the Rights Agreement is qualified in its
entirety by reference to such document. The Rights Agreement is incorporated by
reference as an exhibit to the Registration Statement. A copy of the Rights
Agreement can be obtained upon written request to the Rights Agent, First Union
National Bank, Two First Union Center, Charlotte, North Carolina 28288-1154.
OTHER PROVISIONS
The Articles and Bylaws of the Corporation contain a number of provisions
which may be deemed to have the effect of discouraging or delaying attempts to
gain control of the Corporation, including provisions in the Articles: (i)
classifying the Board of Directors into three classes with each class to serve
for three years, with one class being elected annually; (ii) authorizing the
Board of Directors to fix the size of the Board of Directors between nine and 30
directors; (iii) authorizing directors to fill vacancies on the Board of
Directors that occur between annual meetings, except that vacancies resulting
from a removal of a director by a stockholder vote may only be filled by a
stockholder vote; (iv) providing that directors may be removed only for cause
and only by affirmative vote of the majority of shares entitled to be voted in
the election of directors, voting as a single class; (v) authorizing only the
Board of Directors, the Chairman of the Board or the President to call a special
meeting of stockholders (except for special meetings called under specified
circumstances for holders of classes or series of stock ranking superior to the
Common Stock); and (vi) requiring an 80 percent vote of stockholders entitled to
vote in the election of directors, voting as a single class, to alter any of the
foregoing provisions.
The Bylaws include provisions setting forth specific conditions under
which: (i) business may be transacted at an annual meeting of stockholders; and
(ii) persons may be nominated for election as directors of the Corporation at an
annual meeting of stockholders.
The Change in Bank Control Act prohibits a person or group of persons from
acquiring "control" of a bank holding company unless the Federal Reserve Board
has been given 60 days' prior written notice of such proposed acquisition and
within that time period the Federal Reserve Board has not issued a notice
disapproving the proposed acquisition or extending for up to another 30 days the
period during which such a disapproval may be issued, or unless the acquisition
is subject to Federal Reserve Board approval under the BHCA. An acquisition may
be made prior to the expiration of the disapproval period if the Federal Reserve
Board issues written notice of its intent not to disapprove the action. Under a
rebuttable presumption established by the Federal Reserve Board, the acquisition
of more than ten percent of a class of voting stock of a bank holding company
with a class of securities registered under Section 12 of the Exchange Act, such
as the Corporation, would, under the circumstances set forth in the presumption,
constitute the acquisition of control.
In addition, any "company" would be required to obtain the approval of the
Federal Reserve Board under the BHCA before acquiring 25 percent (five percent
in the case of an acquiror that is a bank holding company) or more of the
outstanding shares of the Corporation's Common Stock, or otherwise obtaining
"control" over the Corporation. Under the BHCA, "control" generally means (i)
the ownership or control of 25 percent or more of any class of voting securities
of the bank holding company, (ii) the ability to elect a majority of the bank
holding company's directors, or (iii) the ability otherwise to exercise a
controlling influence over the management and policies of the bank holding
company.
Two North Carolina "anti-takeover" statutes adopted in 1987, The North
Carolina Shareholder Protection Act and The North Carolina Control Share
Acquisition Act, allowed North Carolina corporations to elect to either be
covered or not be covered by such statutes. The Corporation elected not to be
covered by such statutes.
In addition to the foregoing, in certain instances the issuance of
authorized but unissued shares of Common Stock, Class A Preferred Stock or
Preferred Stock may have an anti-takeover effect.
The existence of the foregoing provisions could result in the (i)
Corporation being less attractive to a potential acquiror, and (ii)
Corporation's stockholders receiving less for their shares of Common Stock than
otherwise might be available in the event of a take-over attempt.
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SELLING STOCKHOLDERS
The Shares are being offered for the account of the selling stockholders of
the Corporation named below (the "Selling Stockholders"). Each of the Selling
Stockholders may offer Shares in separate transactions or in a single
transaction. The Shares will be issued by the Corporation to the Selling
Stockholders in connection with the consummation of the Bowles Hollowell Conner
Acquisition, pursuant to an Agreement and Plan of Merger dated as of March 9,
1998, between the Corporation and Bowles Hollowell Conner. Shares will also be
issued to certain former stockholders of Bowles Hollowell Conner pursuant to
certain agreements between such individuals and Bowles Hollowell Conner.
Upon consummation of the Bowles Hollowell Conner Acquisition, the Selling
Stockholders will be the beneficial owners of an aggregate of 1,216,879 Shares.
The Selling Stockholders are . Upon consummation
of the Bowles Hollowell Conner Acquisition, the Selling Stockholders as a group
will hold less than one percent of the outstanding shares of Common Stock. Each
of the Selling Stockholders, other than Charles H. Conner, Jr., Reid G. Leggett
and Kelly L. Katterhagen, have entered into an employment agreement with the
Corporation for the four-year period following consummation of the Bowles
Hollowell Conner Acquisition.
Because the Selling Stockholders may sell all or a portion of the Shares
that may be offered pursuant to this Prospectus, the number of Shares that will
be owned by each Selling Stockholder upon termination of this offering cannot be
determined.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time directly by one or more of the
Selling Stockholders in separate transactions or in a single transaction. Such
sales may be made on the NYSE, or such other national securities exchange or
automated interdealer quotation system on which shares of Common Stock are then
listed, through negotiated transactions or otherwise at market prices prevailing
at the time of the sale or at negotiated prices. Alternatively, from time to
time one or more of the Selling Stockholders may offer Shares through brokers,
dealers or agents, who may receive compensation in the form of concessions or
commissions from any such Selling Stockholders, agents and/or the purchasers for
whom they may act as agent. If necessary, a supplemental Prospectus will
describe the method of sale in greater detail. In addition, any of the Shares
which qualify for sale pursuant to Rule 144 under the Securities Act may be sold
under Rule 144 rather than pursuant to this Prospectus.
The Selling Stockholders and any such brokers, dealers or agents that
participate in the distribution of the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act, and any profits on the sale of Shares
by them and any associated discounts, commissions or concessions that are
received may be deemed to be underwriting compensation under the Securities Act.
To the extent a Selling Stockholder may be deemed to be an underwriter, such
Selling Stockholder may be subject to certain statutory liabilities under the
Securities Act, including but not limited to Sections 11 and 12 of the
Securities Act.
Shares may be sold from time to time in one or more transactions at a fixed
offering price, which may be changed, or at varying prices determined at the
time of sale or at negotiated prices. If applicable, such prices will be
determined by agreement between the Selling Stockholders and any such dealers.
The Selling Stockholders may, from time to time, authorize dealers, acting as
the Selling Stockholders' agents, to solicit offers to purchase Shares upon the
terms and conditions set forth in any supplemental Prospectus. The Corporation
is not aware of any arrangements or contracts that the Selling Stockholders have
entered into to effect any such transactions in the Shares, nor is the
Corporation aware of which brokerage firms the Selling Stockholders may select
to effect brokerage transactions.
The Selling Stockholders and any other person participating in a sale or
distribution of Shares will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including without limitation Rule
10b-5 and Regulation M, which provisions may limit the timing of purchases and
sales of any of the Shares by the Selling Stockholders and any other such
person.
In order to comply with securities laws in certain jurisdictions, the
Shares offered hereby will be offered or sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain jurisdictions
the securities offered hereby may not be offered or sold unless they have been
registered or qualified for sale in such jurisdictions or an exemption from
registration or qualification is available and is complied with.
The Corporation will not receive any part of the proceeds from the sale of
the Shares. The Selling Stockholders will pay all applicable stock transfer
taxes, brokerage commissions, underwriting discounts or commissions and the fees
of the Selling Stockholders' counsel, and the Corporation will bear all other
expenses in connection with the offering and sale of the Shares,
14
<PAGE>
including filing fees, legal and accounting fees and expenses, printing costs,
and other expenses arising out of the preparation and filing of the Registration
Statement and this Prospectus. The Corporation has agreed to indemnify the
Selling Stockholders against certain liabilities, including certain liabilities
under the Securities Act, in connection with the registration and the offering
and sale of the Shares.
USE OF PROCEEDS
The Corporation will not receive any proceeds from the sales hereunder of
the Shares but will bear certain of the expenses thereof. See "PLAN OF
DISTRIBUTION".
VALIDITY OF THE SHARES
The validity of the Shares being offered hereby is being passed upon for
the Corporation by Marion A. Cowell, Jr., Esq., Executive Vice President,
Secretary and General Counsel of the Corporation. Mr. Cowell is also a
stockholder of the Corporation and holds options to purchase additional shares
of Common Stock.
EXPERTS
The consolidated balance sheets of the Corporation as of December 31, 1997
and 1996, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1997, included in the Corporation's 1997 Annual Report
to Stockholders, which is incorporated by reference in the Corporation's 1997
Annual Report on Form 10-K and incorporated by reference herein, have been
incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
The consolidated financial statements of CoreStates at December 31, 1997
and 1996, and for each of the three years in the period ended December 31, 1997,
included in the Corporation's 1997 Annual Report on Form 10-K and incorporated
by reference herein, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon appearing in the Corporation's
1997 Annual Report on Form 10-K, and which are incorporated herein by reference
in reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The consolidated balance sheet of Meridian Bancorp, Inc. and subsidiaries
as of December 31, 1995, and the related consolidated statements of income,
changes in shareholders' equity and cash flows for the year ended December 31,
1995, included in the Corporation's 1997 Annual Report on Form 10-K, which is
incorporated by reference herein, have been incorporated by reference herein in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. Such financial statements were
combined with those of CoreStates for such period.
The consolidated balance sheet of United Counties Bancorporation and
subsidiaries as of December 31, 1995, and the related consolidated statements of
income, changes in stockholders' equity and cash flows for the year ended
December 31, 1995, included in the Corporation's 1997 Annual Report on Form
10-K, which is incorporated by reference herein, have been incorporated by
reference herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing. Such
financial statements were combined with those of CoreStates for such period.
15
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
CORPORATION, BY THE SELLING STOCKHOLDERS OR BY ANY OTHER PERSON. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE CORPORATION SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
SHARES DESCRIBED IN THIS PROSPECTUS OR AN OFFER TO SELL OR SOLICITATION OF AN
OFFER TO BUY SUCH SHARES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information............................... 2
Incorporation of Certain Documents by
Reference......................................... 2
Cautionary Statement Concerning Forward-Looking
Information....................................... 3
The Corporation..................................... 4
Recent Developments................................. 8
Description of the Corporation's Capital Stock...... 11
Selling Stockholders................................ 14
Plan of Distribution................................ 14
Use of Proceeds..................................... 15
Validity of the Shares.............................. 15
Experts............................................. 15
</TABLE>
1,216,879 SHARES
FIRST UNION CORPORATION
COMMON STOCK
(PAR VALUE $3.33 1/3 PER SHARE)
(First Union logo appears here)
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemization of all estimated expenses in
connection with the issuance and distribution of the securities being
registered, none of which are payable by the Selling Stockholders:
<TABLE>
<S> <C>
Registration Statement filing fee...................................................................... $23,266
Legal fees and expenses................................................................................ 10,000
Accounting fees and expenses........................................................................... 12,000
Printing costs......................................................................................... 10,000
Miscellaneous.......................................................................................... 14,734
Total.................................................................................................. $70,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 55-8-50 through 55-8-58 of the NCBCA contain specific provisions
relating to indemnification of directors and officers of North Carolina
corporations. In general, the statute provides that (i) a corporation must
indemnify a director or officer against reasonable expenses who is wholly
successful in his defense of a proceeding to which he is a party because of his
status as such, unless limited by the articles of incorporation, and (ii) a
corporation may indemnify a director or officer if he is not wholly successful
in such defense, if it is determined as provided in the statute that the
director or officer meets a certain standard of conduct, provided when a
director or officer is liable to the corporation or liable on the basis of
receiving a personal benefit, the corporation may not indemnify him. The statute
also permits a director or officer of a corporation who is a party to a
proceeding to apply to the courts for indemnification, unless the articles of
incorporation provide otherwise, and the court may order indemnification under
certain circumstances set forth in the statute. The statute further provides
that a corporation may in its articles of incorporation or bylaws or by contract
or resolution provide indemnification in addition to that provided by the
statute, subject to certain conditions set forth in the statute.
The Corporation's Bylaws provide for the indemnification of the
Corporation's directors and executive officers by the Corporation against
liabilities arising out of his status as such, excluding any liability relating
to activities which were at the time taken known or believed by such person to
be clearly in conflict with the best interests of the Corporation.
The Corporation's Articles provide for the elimination of the personal
liability of each director of the Corporation to the fullest extent permitted by
the provisions of the NCBCA, as the same may from time to time be in effect.
The Corporation maintains directors and officers liability insurance, which
provides coverage of up to $80,000,000, subject to certain deductible amounts.
In general, the policy insures (i) the Corporation's directors and officers
against loss by reason of any of their wrongful acts, and/or (ii) the
Corporation against loss arising from claims against the directors and officers
by reason of their wrongful acts, all subject to the terms and conditions
contained in the policy.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
</TABLE>
<TABLE>
<S> <C>
(2) Agreement and Plan of Mergers by and among the Corporation, FUNB, CoreStates and CoreStates Bank, N.A., dated as
of November 18, 1997. (Incorporated by reference to Exhibit (2) to the Corporation's Current Report on Form 8-K
dated November 28, 1997.)
(3)(a) Articles of Incorporation of the Corporation, as amended. (Incorporated by reference to Exhibit (4) to the
Corporation's 1990 First Quarter Report on Form 10-Q, to Exhibit (99)(a) to the Corporation's 1993 First Quarter
Report on Form 10-Q, to Exhibit (4)(a) to the Corporation's Current Report on Form 8-K dated January 10, 1996 and
to Exhibit (3)(a) to the Corporation's 1997 Annual Report on Form 10-K.)
(3)(b) By-laws of the Corporation, as amended. (Incorporated by reference to Exhibit (3)(b) to the Corporation's 1995
Annual Report on Form 10-K.)
(4)(a) Amended and Restated Shareholder Protection Rights Agreement. (Incorporated by reference to Exhibit (4) to the
Corporation's Current Report on Form 8-K dated October 16, 1996.)
(4)(b) All instruments defining the rights of holders of long-term debt of the Corporation and its subsidiaries. (Not
filed pursuant to (4)(iii) of Item 601(b) of Regulation S-K; to be furnished upon request of the Commission.)
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
(5) Opinion of Marion A. Cowell, Jr., Esq.
(23)(a) Consent of KPMG Peat Marwick LLP.
(23)(b) Consent of Ernst & Young, LLP.
(23)(c) Consent of KPMG Peat Marwick LLP.
(23)(d) Consent of KPMG Peat Marwick LLP.
(23)(e) Consent of Marion A. Cowell, Jr., Esq. (Included in Exhibit (5).)
(24) Power of Attorney.
(27) The Corporation's Financial Data Schedules. (Incorporated by reference to Exhibit (27)(a), Exhibit (27)(b) and
Exhibit (27)(c) to the Corporation's 1997 Annual Report on Form 10-K.)
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (as amended, and together with the rules and
regulations thereunder, the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
PROVIDED, HOWEVER, that the undertakings set forth in paragraphs (a)(1)(i) and
(a)(1)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 (as amended, and together with the rules and
regulations thereunder, the "Securities Exchange Act") that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act that is incorporated by
reference in the Registration Statement) shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise (other than
pursuant to insurance), the Registrant has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act and may therefore, be unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding and other than insurance payments) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Charlotte, State of North Carolina, on April 24,
1998.
FIRST UNION CORPORATION
By: MARION A. COWELL, JR.
-------------------------------
MARION A. COWELL, JR.
EXECUTIVE VICE PRESIDENT,
SECRETARY AND GENERAL COUNSEL
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- ---------
<S> <C>
EDWARD E. CRUTCHFIELD* Chairman and Chief Executive Officer and Director
---------------------------
EDWARD E. CRUTCHFIELD
ROBERT T. ATWOOD* Executive Vice President and Chief Financial Officer
---------------------------
ROBERT T. ATWOOD
JAMES H. HATCH* Senior Vice President and Corporate Controller (Principal Accounting
---------------------------- Officer)
JAMES H. HATCH
---------------------------- Director
EDWARD E. BARR
G. ALEX BERNHARDT* Director
-----------------------------
G. ALEX BERNHARDT
W. WALDO BRADLEY* Director
----------------------------
W. WALDO BRADLEY
ROBERT J. BROWN* Director
----------------------------
ROBERT J. BROWN
A. DANO DAVIS* Director
-----------------------------
A. DANO DAVIS
----------------------------- Director
NORWOOD H. DAVIS
R. STUART DICKSON* Director
-----------------------------
R. STUART DICKSON
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
B. F. DOLAN* Director
------------------------
B. F. DOLAN
RODDEY DOWD, SR.* Director
------------------------
RODDEY DOWD, SR.
JOHN R. GEORGIUS* Director
------------------------
JOHN R. GEORGIUS
------------------------ Director
ARTHUR M. GOLDBERG
WILLIAM H. GOODWIN, JR.* Director
--------------------------
WILLIAM H. GOODWIN, JR.
HOWARD H. HAWORTH* Director
--------------------------
HOWARD H. HAWORTH
FRANK M. HENRY* Director
--------------------------
FRANK M. HENRY
RADFORD D. LOVETT* Director
--------------------------
RADFORD D. LOVETT
MACKEY J. MCDONALD* Director
--------------------------
MACKEY J. MCDONALD
MALCOLM S. MCDONALD* Director
--------------------------
MALCOLM S. MCDONALD
JOSEPH NEUBAUER* Director
--------------------------
JOSEPH NEUBAUER
RANDOLPH N. REYNOLDS* Director
-------------------------
RANDOLPH N. REYNOLDS
RUTH G. SHAW* Director
------------------------
RUTH G. SHAW
CHARLES M. SHELTON, SR.* Director
-------------------------
CHARLES M. SHELTON, SR.
LANTY L. SMITH* Director
-------------------------
LANTY L. SMITH
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
<S> <C>
</TABLE>
*By Marion A. Cowell, Jr., Attorney-in-Fact
MARION A. COWELL, JR.
---------------------------
MARION A. COWELL, JR.
Dated: April 24, 1998
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION LOCATION
<S> <C> <C>
(2) Agreement and Plan of Mergers by and among the Incorporated by reference to Exhibit (2) to the
Corporation, FUNB, CoreStates and CoreStates Bank, N.A., Corporation's Current Report on Form 8-K dated November
dated as of November 18, 1997. 28, 1997.
(3)(a) Articles of Incorporation of the Corporation, as Incorporated by reference to Exhibit (4) to the
amended. Corporation's 1990 First Quarter Report on Form 10-Q, to
Exhibit (99)(a) to the Corporation's 1993 First Quarter P
Report on Form 10-Q, to Exhibit (4)(a) to the
Corporation's Current Report on Form 8-K dated January
10, 1996 and to Exhibit (3)(a) to the Corporation's 1997P
Annual Report on Form 10-K.
(3)(b) By-laws of the Corporation, as amended. Incorporated by reference to Exhibit (3)(b) to the
Corporation's 1995 Annual Report on Form 10-K.
(4)(a) Amended and Restated Shareholder Protection Rights Incorporated by reference to Exhibit (4) to the
Agreement. Corporation's Current Report on Form 8-K dated October
16, 1996.
(4)(b) All instruments defining the rights of holders of Not filed pursuant to (4)(iii) of Item 601(b) of
long-term debt of the Corporation and its subsidiaries. Regulation S-K; to be furnished upon request of the
Commission.
(5) Opinion of Marion A. Cowell, Jr., Esq. Filed herewith.
(23)(a) Consent of KPMG Peat Marwick LLP. Filed herewith.
(23)(b) Consent of Ernst & Young LLP. Filed herewith.
(23)(c) Consent of KPMG Peat Marwick LLP. Filed herewith.
(23)(d) Consent of KPMG Peat Marwick LLP. Filed herewith.
(23)(e) Consent of Marion A. Cowell, Jr., Esq. Included in Exhibit (5).
(24) Power of Attorney. Filed herewith.
(27) The Corporation's Financial Data Schedules. Incorporated by reference to Exhibit (27)(a),
Exhibit (27)(b) and Exhibit (27)(c) to the Corporation's
1997 Annual Report on Form 10-K.
</TABLE>
<PAGE>
EXHIBIT (5)
<TABLE>
<S> <C> <C> <C>
(First Union FIRST UNION CORPORATION One First Union Center (0013)
logo here) LEGAL DIVISION Charlotte, North Carolina 28288
MARION A. COWELL, JR. 704 374-6828
Executive Vice President Fax: 704 374-3425
General Counsel and
Secretary
Reply to Charlotte Office
</TABLE>
April 24, 1998
Board of Directors
First Union Corporation
Charlotte, North Carolina 28288
Gentlemen:
I have acted as counsel for First Union Corporation (the "Corporation") in
connection with the registration on Form S-3 (the "Registration Statement") of
1,216,879 shares of the Corporation's Common Stock, $3.33 1/3 par value per
share (together with the rights attached thereto, the "First Union Common
Shares"), which will be acquired by stockholders of Bowles Hollowell Conner &
Co. ("Bowles Hollowell Conner") and certain former stockholders of Bowles
Hollowell Conner in connection with the acquisition by the Corporation of Bowles
Hollowell Conner.
On the basis of such investigation as I deemed necessary, I am of the
opinion that:
(1) the Corporation has been duly incorporated and is validly existing
under the laws of the State of North Carolina; and
(2) the First Union Common Shares have been duly authorized and when
issued, will be validly issued, fully paid and nonassessable.
I hereby consent to the use of my name under the heading "Validity of the
Shares" in the Prospectus included in the Registration Statement and to the
filing of this opinion as an Exhibit to the Registration Statement. In giving
this consent, I do not hereby admit that I am within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
MARION A. COWELL, JR.
<PAGE>
EXHIBIT (23)(A)
CONSENT OF KPMG PEAT MARWICK LLP
BOARD OF DIRECTORS
FIRST UNION CORPORATION
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of First Union Corporation of our report dated January 21, 1998,
relating to the consolidated balance sheets of First Union Corporation and
subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of income, changes in stockholders' equity and cash flows for each of
the years in the three-year period ended December 31, 1997, which report appears
in the 1997 Annual Report to Stockholders which is incorporated by reference in
the 1997 Annual Report on Form 10-K of First Union Corporation. We also consent
to the reference to our firm under the caption "Experts."
KPMG PEAT MARWICK LLP
Charlotte, North Carolina
April 24, 1998
<PAGE>
<PAGE>
EXHIBIT (23)(B)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference of our firm under the caption "Experts" in the
Registration Statement and related Prospectus for the registration of 1,216,879
shares of its common stock and to the incorporation by reference therein of our
report dated January 20, 1998, with respect to the consolidated financial
statements of CoreStates Financial Corp included in the 1997 Annual Report on
Form 10-K of First Union Corporation, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
April 20, 1998
<PAGE>
<PAGE>
EXHIBIT (23)(C)
CONSENT OF KPMG PEAT MARWICK LLP
BOARD OF DIRECTORS
CORESTATES FINANCIAL CORP
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of First Union Corporation of our report dated January 17, 1996,
except as to Note 2, which is as of February 23, 1996, relating to the
consolidated balance sheet of Meridian Bancorp, Inc. and subsidiaries as of
December 31, 1995, and the related consolidated statements of income, changes in
shareholders' equity and cash flows for the year ended December 31, 1995, which
report appears in First Union Corporation's 1997 Annual Report on Form 10-K. We
also consent to the reference to our firm under the caption "Experts."
KPMG PEAT MARWICK LLP
Philadelphia, Pennsylvania
April 20, 1998
<PAGE>
<PAGE>
EXHIBIT (23)(D)
CONSENT OF KPMG PEAT MARWICK LLP
BOARD OF DIRECTORS
CORESTATES FINANCIAL CORP
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of First Union Corporation of our report dated January 16, 1996,
except as to Note 20, which is as of February 23, 1996, relating to the
consolidated balance sheet of United Counties Bancorporation and subsidiaries as
of December 31, 1995, and the related consolidated statements of income, changes
in stockholders' equity and cash flows for the year ended December 31, 1995,
which report appears in First Union Corporation's 1997 Annual Report on Form
10-K. We also consent to the reference to our firm under the caption "Experts."
KPMG PEAT MARWICK LLP
Philadelphia, Pennsylvania
April 20, 1998
<PAGE>
EXHIBIT (24)
FIRST UNION CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned directors and officers
of FIRST UNION CORPORATION (the "Corporation") hereby constitute and appoint
Marion A. Cowell, Jr. and Kent S. Hathaway, and each of them severally, the true
and lawful agents and attorneys-in-fact of the undersigned with full power and
authority in said agents and attorneys-in-fact, and in any one of them, to sign
for the undersigned and in their respective names as directors and officers of
the Corporation, one or more Registration Statements to be filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
relating to the estimated maximum number of shares of the Corporation's common
stock expected to be issued to the stockholders of Bowles Hollower Conner & Co.
("BHC") in connection with the acquisition of BHC by the Corporation, and to
sign any and all amendments to such Registration Statements.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
<S> <C>
EDWARD E. CRUTCHFIELD Chairman and Chief Executive Officer and Director
--------------------------
EDWARD E. CRUTCHFIELD
ROBERT T. ATWOOD Executive Vice President and Chief Financial Officer
-------------------------
ROBERT T. ATWOOD
JAMES H. HATCH Senior Vice President and Corporate Controller (Principal Accounting
-------------------------- Officer)
JAMES H. HATCH
-------------------------- Director
EDWARD E. BARR
G. ALEX BERNHARDT Director
--------------------------
G. ALEX BERNHARDT
W. WALDO BRADLEY Director
-------------------------
W. WALDO BRADLEY
ROBERT J. BROWN Director
-------------------------
ROBERT J. BROWN
A. DANO DAVIS Director
------------------------
A. DANO DAVIS
R. STUART DICKSON Director
------------------------
R. STUART DICKSON
B. F. DOLAN Director
-----------------------
B. F. DOLAN
RODDEY DOWD, SR. Director
-------------------------
RODDEY DOWD, SR.
JOHN R. GEORGIUS Director
--------------------------
JOHN R. GEORGIUS
-------------------------- Director
ARTHUR M. GOLDBERG
/s/ WILLIAM H. GOODWIN, JR. Director
--------------------------
WILLIAM H. GOODWIN, JR.
</TABLE>
<PAGE>
SIGNATURE CAPACITY
HOWARD H. HAWORTH
------------------------------ Director
HOWARD H. HAWORTH
FRANK M. HENRY
------------------------------ Director
FRANK M. HENRY
LEONARD G. HERRING
------------------------------ Director
LEONARD G. HERRING
JACK A. LAUGHERY
------------------------------ Director
JACK A. LAUGHERY
MAX LENNON
------------------------------ Director
MAX LENNON
RADFORD D. LOVETT
------------------------------ Director
RADFORD D. LOVETT
MACKEY J. MCDONALD
------------------------------ Director
MACKEY J. MCDONALD
MALCOLM S. MCDONALD
------------------------------ Director
MALCOLM S. MCDONALD
JOSEPH NEUBAUER
------------------------------ Director
JOSEPH NEUBAUER
RANDOLPH N. REYNOLDS
------------------------------ Director
RANDOLPH N. REYNOLDS
RUTH G. SHAW
------------------------------ Director
RUTH G. SHAW
CHARLES M. SHELTON, SR.
------------------------------ Director
CHARLES M. SHELTON, SR.
LANTY L. SMITH
------------------------------ Director
LANTY L. SMITH
ANTHONY P. TERRACCIANO
------------------------------ Director
ANTHONY P. TERRACCIANO
------------------------------ Director
DEWEY L. TROGDON
<PAGE>
SIGNATURE CAPACITY
JOHN D. UIBLE
------------------------------ Director
JOHN D. UIBLE
B. J. WALKER
------------------------------ Director
B. J. WALKER
Dated: February 17, 1998
Charlotte, North Carolina
