FIRST UNION CORP
DEF 14A, 1999-03-12
NATIONAL COMMERCIAL BANKS
Previous: EXTECH CORP, 8-K, 1999-03-12
Next: TRUE NORTH COMMUNICATIONS INC, 8-K, 1999-03-12



<PAGE>

                           SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
                                     1934
                               (AMENDMENT NO. )


Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12

[ ] Confidential, For Use of the Commission Only (as permitted by Rule
    14a-6(e)(2))

                            First Union Corporation
- ------------------------------------------------------------------------------- 
               (Name of Registrant as Specified In Its Charter)

                                Kent S. Hathaway
- ------------------------------------------------------------------------------- 
                  (Name of Person(s) Filing Proxy Statement)

PAYMENT OF FILING FEE (Check the appropriate box):

 [X] No fee required.

 [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

    1) Title of each class of securities to which transaction applies:
    ---------------------------------------------------------------------------

    2) Aggregate number of securities to which transaction applies:
    ---------------------------------------------------------------------------

    3) Per unit price or other underlying value of transaction computed
       pursuant to Exchange Act Rule   0-11:(1)
    ---------------------------------------------------------------------------
    4) Proposed maximum aggregate value of transaction:
    ---------------------------------------------------------------------------

(1)Set forth the amount on which the filing fee is calculated and state how it
was determined.

 [ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

 1) Amount Previously Paid:
 
 -----------------------------------------------------------------------------
 2) Form, Schedule or Registration Statement No.:
 
 -----------------------------------------------------------------------------  
 3) Filing Party:
     
 -----------------------------------------------------------------------------
 4) Date Filed:
 
 -----------------------------------------------------------------------------
     
<PAGE>

         (First Union Logo appears here)

 
       
                                                                 March 12, 1999



         Dear Stockholder:


          On behalf of the Board of Directors, I am pleased to invite you to
         the Annual Meeting of Stockholders in Charlotte, North Carolina, on
         Tuesday, April 20, 1999, at 9:30 a.m.


           The notice of meeting and proxy statement on the following pages
         contain information about the meeting. We will also review operating
         results for the past year and present other information concerning
         First Union. The meeting should be interesting and informative and we
         hope you will be able to attend.


           In order to ensure your shares are voted at the meeting, please
         return the enclosed proxy at your earliest convenience. Every
         stockholder's vote is important, whether you own a few shares or many.
          


         Sincerely yours,
         /s/ Edward E. Crutchfield
         ---------------------------------          
         Edward E. Crutchfield
         Chairman and Chief Executive Officer






First Union Corporation, One First Union Center, Charlotte, North Carolina
                                   28288-0013
<PAGE>

          
<PAGE>

                            First Union Corporation
         One First Union Center, Charlotte, North Carolina 28288-0013



                           NOTICE OF ANNUAL MEETING

                         TO BE HELD ON APRIL 20, 1999







                                                                 March 12, 1999


        The Annual Meeting of Stockholders will be held in the Auditorium, 12th
       floor, Two First Union Center, Charlotte, North Carolina, on Tuesday,
       April 20, 1999, at 9:30 a.m., to consider the following:

          1.  A PROPOSAL TO ELECT THE TEN NOMINEES NAMED IN THE ATTACHED PROXY
              STATEMENT AS DIRECTORS, NINE NOMINEES TO SERVE AS CLASS I
              DIRECTORS WITH TERMS EXPIRING AT THE 2002 ANNUAL MEETING OF
              STOCKHOLDERS, AND ONE NOMINEE TO SERVE AS A CLASS II DIRECTOR
              WITH A TERM EXPIRING AT THE 2000 ANNUAL MEETING OF STOCKHOLDERS,
              IN EACH CASE UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND
              QUALIFY;
          2.  A PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG LLP AS AUDITORS FOR
              THE YEAR 1999; AND
          3.  SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
              ADJOURNMENTS THEREOF.

        Only holders of record of First Union common stock on February 22,
       1999, are entitled to notice of and to vote at the meeting.

       By Order of the Board of Directors,
       /s/ Marion A Cowell, Jr.
       -------------------------
       
       Marion A. Cowell, Jr.
       Secretary

        WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE RETURN THE
       ENCLOSED PROXY TO ENSURE YOUR SHARES ARE VOTED AT THE MEETING. YOUR VOTE
       IS IMPORTANT, WHETHER YOU OWN A FEW SHARES OR MANY.
<PAGE>

        
<PAGE>

                            First Union Corporation
         One First Union Center, Charlotte, North Carolina 28288-0013
                               -----------------
                                PROXY STATEMENT
                               -----------------
GENERAL
     The enclosed proxy is solicited on behalf of the Board of Directors in
connection with the Annual Meeting of Stockholders to be held in the
Auditorium, 12th Floor, Two First Union Center, Charlotte, North Carolina, on
Tuesday, April 20, 1999, at 9:30 a.m. The enclosed proxy is for use at the
meeting if you do not attend the meeting or if you wish to vote your shares by
proxy even if you attend the meeting. You may revoke your proxy at any time
before it is exercised, by (i) giving written notice of such revocation to the
Secretary of First Union, (ii) submitting a proxy having a later date, or (iii)
appearing at the meeting and requesting to vote in person. All shares
represented by valid proxies and not revoked before they are exercised will be
voted as specified. If no specification is made, proxies will be voted in favor
of Proposals 1 and 2 described below. This proxy statement and the enclosed
proxy and 1998 Annual Report to Stockholders are being first mailed to our
stockholders on or about March 12, 1999. The Annual Report does not constitute
"soliciting material" and is not to be deemed "filed" with the SEC.

     If you have any shares in our Dividend Reinvestment and Stock Purchase
Plan, the enclosed proxy represents the number of shares you have in the Plan
on the record date for the meeting, as well as the number of shares directly
registered in your name on the record date.

     First Union will bear the cost of preparing this proxy statement and of
soliciting proxies in the enclosed form. Proxies may be solicited by our
employees, either personally, by letter or by telephone. Such employees will
not be specifically compensated for soliciting such proxies. In addition, we
have retained Georgeson & Company, Inc. as proxy solicitors to provide certain
services in connection with the solicitation and tabulation of proxies. The fee
for these services is $18,000, plus expenses.


VOTING SECURITIES AND PRINCIPAL HOLDERS

     As of February 22, 1999, the record date for the meeting, there were
988,664,405 shares of First Union common stock outstanding. You have one vote
for each share registered in your name on the record date, with respect to each
matter voted on at the meeting. We are not aware of any stockholder who was the
beneficial owner of more than 5% of the outstanding shares of common stock on
the record date, except for Capital Research and Management Company, 333 South
Hope Street, Los Angeles, CA 90071, an investment adviser, which based on a
Schedule 13G filed with the SEC, was the holder of 53,749,030 shares of common
stock as of December 31, 1998, or 5.4% of the outstanding shares of common
stock on the record date. Capital Research indicated that it holds such shares
for accounts under the discretionary management of Capital Research and not for
its own account. Capital Research also indicated that it does not have sole or
shared voting power with respect to the shares and has sole dispositive power
over them.

     The presence in person or by proxy of a majority of the shares of common
stock outstanding on the record date will constitute a quorum for purposes of
conducting business at the meeting. For purposes of determining the votes cast
on any matter at the meeting only "FOR" and "AGAINST" votes are included.
Abstentions and broker non-votes (I.E., shares held by brokers that they can't
vote because they haven't received voting instructions from their customers
with respect to the matters voted on) are only counted for the purpose of
determining whether a quorum is present.


                                       1
<PAGE>

PROPOSAL 1. ELECTION OF DIRECTORS
GENERAL INFORMATION AND NOMINEES

     The Board of Directors is divided into three classes. At each annual
meeting of stockholders, the stockholders elect the members of one of the three
classes to three-year terms. The number of directors is determined by the
directors, but cannot be less than nine or more than 30. For purposes of the
election of directors at the meeting the number of directors has been fixed at
27, nine directors in Class I, nine directors in Class II, and nine directors
in Class III.

     The terms of the directors serving in Class I will expire at the meeting
and, except as otherwise indicated below, the terms of the directors serving in
Classes II and III will expire at the 2000 and 2001 Annual Meetings of
Stockholders, respectively, in each case until their successors are duly
elected and qualify.

     Erskine B. Bowles, Robert J. Brown, Edward E. Crutchfield, James E.S.
Hynes, Herbert Lotman, Patricia A. McFate, Joseph Neubauer, Ruth G. Shaw and
Charles M. Shelton, Sr., each of whom, other than Bowles and Hynes, is
currently serving as a director in Class I, are being nominated to serve as
directors in Class I with terms expiring at the 2002 Annual Meeting of
Stockholders and until their successors are duly elected and qualify. In
addition, R. Stuart Dickson, who is currently serving as a Class I director, is
being nominated to serve as a Class II director with a term expiring at the
2000 Annual Meeting of Stockholders and until his successor is duly elected and
qualifies.

     Directors who reach retirement age (I.E., age 70) during their term in
office are to retire from the Board at the annual meeting of stockholders next
following their 70th birthday, subject to the Board authorizing that retirement
be deferred when deemed appropriate.

     Directors are elected by a plurality of votes cast. Shares cannot be voted
for a greater number of persons than the number of nominees named herein.
Should any nominee be unavailable for election by reason of death or other
unexpected occurrence, the enclosed proxy, to the extent permitted by
applicable law, may be voted with discretionary authority in connection with
the nomination by the Board and the election of any substitute nominee. In
addition, the Board may reduce the number of directors to be elected at the
meeting.

     PROXIES, UNLESS INDICATED TO THE CONTRARY, WILL BE VOTED "FOR" THE
ELECTION OF (I) THE NINE NOMINEES NAMED BELOW AS CLASS I DIRECTORS TO SERVE FOR
TERMS EXPIRING AT THE 2002 ANNUAL MEETING OF STOCKHOLDERS, AND (II) THE NOMINEE
NAMED BELOW AS A CLASS II DIRECTOR TO SERVE FOR A TERM EXPIRING AT THE 2000
ANNUAL MEETING OF STOCKHOLDERS, IN EACH CASE UNTIL THEIR SUCCESSORS ARE DULY
ELECTED AND QUALIFY.

     Listed below are the names of the nine nominees to serve as Class I
directors, the nominee to serve as a Class II director, and the 17 incumbent
directors who will be continuing in office following the meeting, together
with: their ages; their principal occupations during the past five years; any
other directorships they hold with publicly-held companies; the year during
which they were first elected a director; and the number of shares of First
Union common stock they beneficially owned as of January 31, 1999. As of such
date, no director beneficially owned more than 1% of the outstanding shares of
common stock.


                                       2
<PAGE>


<TABLE>
<CAPTION>
                         Name, Age, Principal Occupation                    Director      Shares
                         and Certain Other Directorships                      Since      Owned (1)
         ---------------------------------------------------------------   ----------   ----------
<S>      <C>                                                               <C>          <C>
  CLASS I NOMINEES FOR ELECTION TO TERMS EXPIRING IN 2002
 
(Photo of Erskine B. Bowles appears here)
         ERSKINE B. BOWLES (53). General Partner, Forstmann                               5,000*
         Little & Co., New York, New York, and Managing Director,
         Carousel Capital Company, LLC, Charlotte, North
         Carolina, merchant banking-private equity companies,
         since January 1999. Formerly, Chief of Staff, The White
         House, November 1996 to November 1998, Managing
         Director, Carousel Capital Company, LLC, December
         1995 to November 1996, Deputy Chief of Staff, The White
         House, October 1994 to December 1995, and
         Administrator, Small Business Administration, March
         1993 to October 1994. (2)
 
(Photo of Robert J. Brown appears here)
         ROBERT J. BROWN (64). Chairman, President and Chief                 1993          1,400
         Executive Officer, B&C Associates, Inc., High Point,
         North Carolina, a public relations and marketing research
         firm. Director, Duke Energy Corporation, Republic
         Industries, Inc. and Sonoco Products Company. (1)(2)
 
(Photo of Edward E. Crutchfield appears here)
         EDWARD E. CRUTCHFIELD (57). Chairman and Chief                      1977        836,579
         Executive Officer, First Union Corporation. Director,
         Bernhardt Industries, Inc., Liberty Corporation and VF
         Corporation. (1)(2)
 
(Photo of James E. S. Hynes appears here)
         JAMES E. S. HYNES (58). Chairman, Hynes, Inc.,                                   20,408
         Charlotte, North Carolina, a sales and marketing services
         firm. Director, North Carolina Natural Gas Corporation
         and Ruddick Corporation.
 
(Photo of Herbert Lotman appears here) 
         HERBERT LOTMAN (65). Chairman and Chief Executive                   1998        121,086
         Officer, Keystone Foods Corporation, Bala Cynwyd,
         Pennsylvania, a food processing and logistics company.
         (1)(3)
 
  ----------
  * Purchased subsequent to January 31, 1999.
</TABLE>

                                       3
<PAGE>


<TABLE>
<CAPTION>
                       Name, Age, Principal Occupation                 Director      Shares
                       and Certain Other Directorships                   Since      Owned (1)
         ----------------------------------------------------------   ----------   ----------
 
<S>      <C>                                                          <C>          <C>
(Photo of Patricia A. McFate appears here)
         PATRICIA A. MCFATE (66). Senior Scientist, Science             1998          8,626
         Applications International Corporation, McLean, Virginia,
         a systems engineering company. (3)
 
(Photo of Joseph Neubauer appears here)
         JOSEPH NEUBAUER (57). Chairman and Chief Executive             1996         11,664
         Officer, ARAMARK Corporation, Philadelphia,
         Pennsylvania, a service management company. Director,
         Bell Atlantic Corporation, CIGNA Corporation and
         Federated Department Stores, Inc.

(Photo of Ruth G. Shaw appears here) 
         RUTH G. SHAW (51). Executive Vice President and Chief          1990          2,200
         Administrative Officer, Duke Energy Corporation,
         Charlotte, North Carolina, an energy company, since
         June 1997. Formerly, Senior Vice President, Corporate
         Resources, and Chief Administrative Officer, Duke
         Energy Corporation, from April 1994 to June 1997, and
         Vice President, Corporate Communications, prior to April
         1994. Director, Avado Brands, Inc. and Texas Eastern
         Products Pipeline Company. (1)

(Photo of Charles M. Shelton, Sr. appears here)
         CHARLES M. SHELTON, SR. (63). General partner, The            1996          7,829
         Shelton Companies, Charlotte, North Carolina,
         investments. (2)
 
  CLASS II NOMINEE FOR ELECTION TO TERM EXPIRING IN 2000

(Photo of R. Stuart Dickson appears here) 
         R. STUART DICKSON (69). Chairman of the Executive             1985         63,094
         Committee, Ruddick Corporation, Charlotte, North
         Carolina, a diversified holding company, since February
         1994. Formerly, Chairman, Ruddick Corporation.
         Director, Dimon Incorporated, Ruddick Corporation,
         Textron, Inc. and United Dominion Industries. (1)
 
</TABLE>

                                       4
<PAGE>


<TABLE>
<CAPTION>
                        Name, Age, Principal Occupation                  Director      Shares
                        and Certain Other Directorships                    Since      Owned (1)
         ------------------------------------------------------------   ----------   ----------
<S>      <C>                                                            <C>          <C>
  INCUMBENT CLASS II DIRECTORS -- TERMS EXPIRING IN 2000
 

(Photo of A. Dano Davis appears here)
         A. DANO DAVIS (53). Chairman and Principal Executive            1997       2,919,714
         Officer, Winn-Dixie Stores, Inc., Jacksonville, Florida, a
         food retailer. Director, American Heritage Life Investment
         Corporation and Winn-Dixie Stores, Inc. (1)
 
(Photo of B. F. Dolan appears here) 
         B. F. DOLAN (71). Investor. Director, FPL Group, Inc. and       1977        56,172
         Polaris Industries, Inc.
 

(Photo of Roddey Dowd, Sr. appears here) 
         RODDEY DOWD, SR. (66). Chairman of the Executive                1988        20,973
         Committee, Charlotte Pipe and Foundry Company,
         Charlotte, North Carolina, a manufacturer of pipe and
         fittings, since September 1998. Formerly, Chairman,
         Charlotte Pipe and Foundry Company. Director, Ruddick
         Corporation. (1)

(Photo of Arthur M. Goldberg appears here) 
         ARTHUR M. GOLDBERG (57). President and Chief                    1996       432,862
         Executive Officer, Park Place Entertainment Corporation,
         casinos, Chatham, New Jersey, since December 1998.
         Formerly, Executive Vice President (and President of
         Gaming Operations), Hilton Hotels Corporation, from
         December 1996 to December 1998, and Chairman,
         President and Chief Executive Officer, Bally
         Entertainment Corporation, prior to December 1996.
         Director, DiGiorgio Corporation, Hilton Hotels
         Corporation and Park Place Entertainment
         Corporation. (1)

(Photo of William H. Goodwin, Jr. appears here)
         WILLIAM H. GOODWIN, JR. (58). Chairman, CCA                     1993       746,000
         Industries, Inc., Richmond, Virginia, a diversified holding
         company. Director, Basset Furniture Industries,
         Incorporated. (1)(2)
 
</TABLE>

                                       5
<PAGE>


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

<S>      <C>                                                            <C>          <C>
(Photo of Radford D. Lovett appears here)
         RADFORD D. LOVETT (65). Chairman, Commodores                     1985        363,092
         Point Terminal Corp., Jacksonville, Florida, an operator of
         a marine terminal and a real estate management
         company. Director, American Heritage Life Investment
         Corporation, Florida Rock Industries, Inc., FRP
         Properties, Inc. and Winn-Dixie Stores, Inc.
 
(Photo of Mackey J. McDonald appears here)
         MACKEY J. MCDONALD (52). Chairman (since October                 1997          1,000
         1998), President and Chief Executive Officer, VF
         Corporation, Greensboro, North Carolina, an apparel
         manufacturer. Director, Hershey Foods Corporation and
         VF Corporation.
 
(Photo of Randolph N. Reynolds appears here)
         RANDOLPH N. REYNOLDS (57). Vice Chairman, Reynolds               1993          2,918
         Metals Company, Richmond, Virginia, an aluminum
         manufacturer. Formerly, Executive Vice President,
         Reynolds Metals Company. Director, Reynolds Metals
         Company. (2)
 
  INCUMBENT CLASS III DIRECTORS -- TERMS EXPIRING IN 2001
 

(Photo of Edward E. Barr appears here)
         EDWARD E. BARR (62). Chairman, Sun Chemical                     1996        133,085
         Corporation, Fort Lee, New Jersey, a graphic arts
         materials manufacturer, since January 1998. Formerly,
         Chairman, President and Chief Executive Officer, Sun
         Chemical Corporation. Director, United Water
         Resources Inc.
 
(Photo of G. Alex Bernhardt, Sr. appears here)
         G. ALEX BERNHARDT, SR. (55). Chairman and Chief                 1992          2,604
         Executive Officer, Bernhardt Furniture Company, Lenoir,
         North Carolina, a residential and executive office
         furnishings manufacturer, since August 1996. Formerly,
         President and Chief Executive Officer, Bernhardt
         Furniture Company. Director, Duke Energy
         Corporation. (1)
 

(Photo of W. Waldo Bradley appears here)
         W. WALDO BRADLEY (65). Chairman, Bradley Plywood                1986         89,554
         Corporation, Savannah, Georgia, a wholesale distributor
         of building materials. (1)
 
</TABLE>

                                       6
<PAGE>


<TABLE>
<CAPTION>
                       Name, Age, Principal Occupation                  Director      Shares
                       and Certain Other Directorships                    Since      Owned (1)
         -----------------------------------------------------------   ----------   ----------
 
<S>      <C>                                                           <C>          <C>
(Photo of Norwood H. Davis, Jr. appears here)
         NORWOOD H. DAVIS, JR. (59). Chairman of the Board and           1998        110,236
         Chief Executive Officer, Trigon Healthcare, Inc., a
         managed healthcare company, Richmond, Virginia.
         Director, Hilb, Rogal and Hamilton Company and Trigon
         Healthcare, Inc. (1)
 
(Photo of John R. Georgius appears here) 
         JOHN R. GEORGIUS (54). President (since January 1998)           1988        502,608
         and Chief Operating Officer (since October 1998), First
         Union Corporation. Formerly, Vice Chairman, First Union
         Corporation, from January 1996 to January 1998, and
         President, prior to January 1996. (1)(2)
 
(Photo of Frank M. Henry appears here) 
         FRANK M. HENRY (65). Chairman, Frank Martz                      1996        622,208
         Coach Company, Wilkes-Barre, Pennsylvania, bus
         transportation. Director, Commonwealth Telephone
         Enterprises, Inc. (1)(2)
 
(Photo of Ernest E. Jones appears here)
         ERNEST E. JONES (54). President and Chief Executive             1998          2,582
         Officer, Private Industry Council of Philadelphia, Inc.,
         Philadelphia, Pennsylvania, a workforce development
         company, since October 1998. Formerly, President and
         Executive Director of Greater Philadelphia Urban Affairs
         Coalition. (3)
 
(Photo of James M. Seabrook appears here)
         JAMES M. SEABROOK (65). Chairman and Chief                      1998          9,710
         Executive Officer, Seabrook Brothers & Sons, Inc., frozen
         foods processor and marketer. (1)(3)
 
(Photo of Lanty L. Smith appears here) 
         LANTY L. SMITH (56). Chairman, The Greenwood Group,             1987          8,000
         Inc., Raleigh, North Carolina, a provider of technical and
         other temporary personnel in eastern North Carolina.
         Also, Chairman, Precision Fabrics Group, Inc.,
         Greensboro, North Carolina, a manufacturer of technical,
         high-performance textile products, since November,
         1997. Formerly, Chairman and Chief Executive Officer,
         Precision Fabrics Group, Inc. Director, Oakwood Homes
         Corporation.
</TABLE>

                                       7
<PAGE>

- ----------
(1) The foregoing directors and nominees have sole voting and investment power
    over the shares of common stock beneficially owned by them on January 31,
    1999, except for the following shares over which the directors indicated,
    and such directors and the seven senior executive officers of First Union
    (in addition to Crutchfield and Georgius, B.J. Walker, Vice Chairman, G.
    Kennedy Thompson, Vice Chairman, Charles L. Coltman, Vice Chairman, Robert
    T. Atwood, Executive Vice President and Chief Financial Officer, and
    Marion A. Cowell, Jr., Executive Vice President, Secretary and General
    Counsel) as a group, share voting and/or investment power: Bernhardt --
    802 shares; Bradley -- 4,322 shares; Brown -- 200 shares; Crutchfield --
    23,662 shares; A. Dano Davis --  2,539,514 shares; Norwood H. Davis, Jr.
    -- 108,068 shares; Dickson -- 50,000 shares; Dowd --  4,000 shares;
    Goldberg -- 31,700 shares; Goodwin -- 740,000 shares; Henry -- 14,568
    shares; Lotman -- 45,360 shares; Shaw -- 1,200 shares; and members of the
    group (including the foregoing) -- 3,666,179 shares.

   The foregoing directors, nominees and senior executive officers
   beneficially owned a total of 8,175,434 shares, or less than one percent of
   the outstanding shares of common stock as of January 31, 1999. Included in
   such shares are the following shares held under certain of our employee
   benefit plans, including options exercisable on January 31, 1999, or within
   60 days thereafter, by the directors indicated, and by the directors and
   senior executive officers as a group: Crutchfield -- 328,264 shares;
   Georgius -- 205,104 shares; and members of the group (including the
   foregoing) -- 957,139 shares. Non-employee directors are not eligible to
   participate in any of our stock option or other employee benefit plans.

   The following directors and nominees disclaim beneficial ownership of
   certain shares of common stock held by certain of their related interests,
   as a result of which these shares are not included in the number of shares
   indicated above: Bradley -- 61,128 shares; Crutchfield -- 33,685 shares;
   Georgius -- 3,564 shares; Lotman -- 73,436 shares; and Seabrook --  3,240
   shares.

(2) See (i) "Crutchfield Employment Contract" and "Georgius Employment
    Contract" under "Executive Compensation", and (ii) "Other Matters Relating
    to Executive Officers and Directors".

(3) Jones, Lotman, McFate and Seabrook were former directors of CoreStates
    Financial Corp and were elected directors of First Union by the Board
    following completion of our acquisition of CoreStates in April 1998.


COMMITTEES OF THE BOARD AND ATTENDANCE

     EXECUTIVE COMMITTEE. The Executive Committee held five meetings in 1998.
The Committee is authorized, between meetings of the Board, to perform all
duties and exercise all authority of the Board, except for those duties and
authorities delegated to other committees of the Board or which are exclusively
reserved to the Board by our Bylaws or by statute. The following directors are
the current members of the Committee: Dolan (Chairman), Crutchfield, Dickson,
Goldberg, Goodwin, Lovett, Neubauer, Shelton and Smith.

     AUDIT COMMITTEE. The Audit Committee held six meetings in 1998. The
principal responsibilities of the Committee are to ensure that the Board
receives objective information regarding policies, procedures and activities
with respect to auditing, accounting, internal accounting controls, financial
reporting, regulatory matters and such other activities as may be directed by
the Board. The following directors are the current members of the Committee:
Neubauer (Chairman), Mackey J. McDonald (Vice Chairman), Barr, Norwood H.
Davis, Jr., Jones and McFate.


                                       8
<PAGE>

     CREDIT/MARKET RISK COMMITTEE. The Credit/Market Risk Committee held six
meetings in 1998. The Committee is authorized, among other things, to review
the deposit base, allowance for loan losses, and funds management, market risk
and lending policies, and to monitor the liquidity, investment portfolio,
trading activities, non-performing assets and owned real estate. The following
directors are the current members of the Committee: Smith (Chairman), Shaw
(Vice Chairman), A. Dano Davis, Dowd and Goldberg.

     FINANCIAL SERVICES COMMITTEE. The Financial Services Committee held six
meetings in 1998. The Committee is authorized, among other things, to review
the commercial, consumer and mortgage banking, capital management and capital
markets activities. The following directors are the current members of the
Committee: Goodwin (Chairman), Shelton (Vice Chairman), Bernhardt, Malcolm S.
McDonald (a retiring director), Reynolds and Seabrook.

     HUMAN RESOURCES COMMITTEE. The Human Resources Committee (the "HR
Committee") held six meetings in 1998. The HR Committee is authorized, among
other things, to review and make recommendations to the Board regarding
employee compensation, to administer various employee benefit plans, to act as
the executive compensation committee and to monitor conditions of employment
and personnel policies. The following directors are the current members of the
HR Committee: Dickson (Chairman), Bradley, Brown, Dolan, Henry, Lotman and
Lovett.

     NOMINATING COMMITTEE. The Nominating Committee held no meetings in 1998.
The Committee is authorized, among other things, to recommend the number of
directors to be elected to the Board, to recommend any changes in Board
membership, to recommend director prospects and to study the compensation for
directors and recommend changes when appropriate. The following directors are
the current members of the Committee: Dolan (Chairman), Dickson (Vice
Chairman), Bernhardt, Crutchfield, Goodwin, Lovett, Mackey J. McDonald and
Shelton. Our Bylaws include provisions setting forth specific conditions under
which persons may be nominated as directors at an annual meeting of
stockholders. A copy of such provisions is available upon request to: First
Union Corporation, One First Union Center, Charlotte, North Carolina
28288-0013, Attention: Corporate Secretary.

     ATTENDANCE. The Board held seven meetings in 1998. In 1998, all of the
directors attended at least 75% of the meetings of the Board and the relevant
committees, except for Arthur M. Goldberg, who was not able to do so due to
illness, business or other conflicts.


EXECUTIVE COMPENSATION

     The following information relates to compensation paid or payable to (i)
the Chief Executive Officer (the "CEO"), (ii) the four other most highly
compensated executive officers who were serving as such at December 31, 1998,
and (iii) two executive officers who retired during 1998 who would have been
among the four other most highly compensated executive officers had they been
serving as such at December 31, 1998 (the CEO and such six other executive
officers, the "Named Officers").


                                       9
<PAGE>

     SUMMARY COMPENSATION TABLE

     The following table sets forth for the Named Officers: (i) their name and
principal position on December 31, 1998 (column (a)); (ii) years covered
(column (b)); (iii) annual compensation (columns (c), (d) and (e)), including
(A) base salary (column (c)), (B) bonus (column (d)), and (C) other annual
compensation not properly categorized as salary or bonus (column (e)); (iv)
long-term compensation (columns (f), (g) and (h)), including (A) the dollar
value of any award of restricted stock (calculated by multiplying the closing
sale price of the common stock on the date of grant by the number of shares
awarded) (column (f)), (B) the sum of the number of stock options granted
(column (g)) and (C) the dollar value of all payments pursuant to long-term
incentive plans ("LTIPs") (column (h)); and (v) all other compensation for the
covered year that we believe could not be properly reported in any other column
of the table (column (i)).

                          SUMMARY COMPENSATION TABLE



<TABLE>
<CAPTION>
                                                     Annual Compensation
                                      -------------------------------------------------
                                                                          Other Annual
                                           Salary            Bonus        Compensation
     Name and Position        Year        ($) (1)           ($) (1)          ($) (2)
- -------------------------- ---------- --------------- ------------------ --------------
<S>                        <C>        <C>             <C>                <C>
     (a)                       (b)          (c)               (d)              (e)
 Edward E. Crutchfield        1998       1,140,000          2,280,000        107,186
  Chairman and Chief          1997       1,025,000          2,050,000        104,120
  Executive Officer           1996       1,025,000          2,050,000         38,763
 
 John R. Georgius             1998         750,000          1,500,000        129,036
  President and Chief         1997         725,000          1,450,000         23,854
  Operating Officer           1996         710,000          1,420,000         24,758
 
 G. Kennedy Thompson          1998         400,000          1,908,563(5)     143,285
  Vice Chairman               1997         345,000          2,443,163(5)     244,792
                              1996         325,000            520,000         12,776

 Robert T. Atwood             1998         470,000            840,000         17,697
  Executive Vice              1997         420,000            750,000         11,522
  President and               1996         420,000            700,000         20,448
  Chief Financial Officer
 
 Donald A. McMullen, Jr.      1998         445,000            880,000         33,964
  Executive Vice              1997         405,000            700,000         11,886
  President                   1996         405,000            650,000         42,473
 
 Terrence A. Larsen (6)       1998       1,000,000          1,500,000          3,961
  Retired. Formerly,
  Vice Chairman
 
 Malcolm S. McDonald (7)      1998        700,000             700,000           420
  Retired. Formerly,          1997         58,333              58,333            --
  Chairman, First Union-
  Mid-Atlantic
 
<PAGE>


<CAPTION>
                                       Long-Term Compensation
                           -----------------------------------------------
                                       Awards                  Payouts
                           ------------------------------- ---------------
                                              Securities
                              Restricted      Underlying         LTIP         All Other
                             Stock Awards    Options/SARs      Payouts       Compensation
     Name and Position          ($) (3)           (#)          ($) (1)         ($) (4)
- -------------------------- ---------------- -------------- --------------- ---------------
<S>                        <C>              <C>            <C>             <C>
     (a)                          (f)             (g)            (h)             (i)
 Edward E. Crutchfield         2,049,939        400,844        1,015,812         320,378
  Chairman and Chief          15,059,070           --          1,012,818         229,955
  Executive Officer            1,170,000        200,778          850,000         192,119
 
 John R. Georgius              8,507,398            844          718,501         433,112
  President and Chief          1,083,510        100,000          701,562         151,178
  Operating Officer              789,750        100,778          665,000         128,778
 
 G. Kennedy Thompson             809,986         34,138               --         101,611
  Vice Chairman                  593,924         37,200          269,866          45,106
                                 386,100         31,903          219,000          32,692

 Robert T. Atwood                809,986         39,206          360,024         140,104
  Executive Vice                 609,976         48,000          358,964          76,719
  President and                  468,000        101,004          250,000          54,353
  Chief Financial Officer
 
 Donald A. McMullen, Jr.         809,986         39,206          320,217          29,197
  Executive Vice                 561,820         42,000          320,217          11,507
  President                      409,500         43,167          150,000          10,415
 
 Terrence A. Larsen (6)        6,212,500        200,000              --        1,891,564
  Retired. Formerly,
  Vice Chairman
 
 Malcolm S. McDonald (7)             --          67,647              --            9,021
  Retired. Formerly,           1,950,000        100,000              --              --
  Chairman, First Union-
  Mid-Atlantic
 
</TABLE>

                                       10
<PAGE>

- ----------
(1) Amounts include dollars deferred by the Named Officers under our Deferred
    Compensation Plans. At the election of the participants in such plans,
    account balances are paid in a lump sum or in ten annual installments upon
    termination of employment due to death, disability or retirement, except
    in the event of a "change in control" of First Union where the successor
    or acquiring corporation does not elect to continue such Plans, in which
    case such balances are to be paid in a lump sum. A nonqualified retirement
    trust has been established to fund certain nonqualified benefit plans,
    including the Deferred Compensation Plans and Supplemental Retirement
    Plan. Prior to a "change in control" of First Union, benefits are paid
    from the trust only upon our direction. Upon the occurrence of a "change
    in control", we are required to contribute an amount to the trust
    sufficient to pay the benefits required to be paid under such plans as of
    the date on which the "change in control" occurs.  (2) Represents 
    reimbursement for (i) payment of taxes, and (ii) personal benefits, if such 
    benefits total $50,000 or more for a Named Officer. Personal benefits for a 
    Named Officer which exceeded 25% of such personal benefits that totaled 
    $50,000 or more in 1998 were as follows:

<TABLE>
<CAPTION>
                                           Crutchfield     Georgius     Thompson
                                          -------------   ----------   ---------
<S>                                       <C>             <C>          <C>
  Membership fees and dues ............      $43,054       29,547       69,836
  Personal use of automobile ..........           --       15,066           --
</TABLE>

(3) The aggregate number of shares of restricted stock held as of December 31,
    1998, and the value thereof as of such date, were as follows: Crutchfield:
    370,181 shares ($22,511,632); Georgius: 189,464 shares ($11,521,780);
    Thompson; 52,262 shares ($3,178,183); Atwood: 41,038 shares ($2,495,623);
    and McMullen: 40,638 shares ($2,471,298). Larsen and McDonald retired in
    1998, as a result of which all of their shares of restricted stock became
    fully vested. Restricted stock awards granted in 1998 vest at a rate of
    20% per year over five years or upon termination due to death, retirement
    at age 65, or a "change in control" of First Union, except for a special
    restricted stock award consisting of 113,600 shares of common stock
    granted to Georgius, which vests in approximately equal amounts over a
    seven-year period. See " -- HR Committee Report on Executive
    Compensation". See also footnote (5) below. Dividends on shares of
    restricted stock are paid at the same time dividends on the other
    outstanding shares of common stock are paid.
(4) Amounts shown for 1998 consist of the following:



<TABLE>
<CAPTION>
                                     Crutchfield     Georgius     Thompson     Atwood     McMullen       Larsen       McDonald
                                    -------------   ----------   ----------   --------   ----------   ------------   ---------
<S>                                 <C>             <C>          <C>          <C>        <C>          <C>            <C>
  Savings Plan matching
  contributions .................      $ 68,400       43,000       24,000      28,200      26,700         28,717          --
  Value of life insurance
  premiums ......................       241,201      173,801       22,661      58,808       1,375      1,862,847       6,464
  Value of disability insurance
  premiums ......................            --        1,775        1,120       4,080          --             --          --
  Above market interest on
  deferred compensation .........        10,777      169,536       53,830      49,016       1,122             --       2,557
  Special restricted stock award
   FTC filing fee ...............            --       45,000           --          --          --             --          --
</TABLE>

    The value of life insurance premiums includes the value of premiums advanced
    by us under split-dollar life insurance agreements. We may terminate certain
    of such agreements and receive our interest in the related life insurance
    policies under certain conditions, provided we may not terminate such
    agreements if certain of such conditions occur after a "change in control"
    of First Union.
(5) Thompson participates in an annual incentive bonus plan for the Capital
    Markets Group that requires 25% of his annual incentive bonus be paid in
    shares of restricted stock (the "Bonus Shares"). We match 50% of the Bonus
    Shares with additional shares of restricted stock. The shares of
    restricted stock awarded under the plan vest at the end of a three-year
    period. The bonus amounts set forth in the Summary Compensation Table
    represent the total bonus, including the portions attributable to such
    shares of restricted stock. These shares of restricted stock are not
    included in footnote (3) above.
(6) The payments to Larsen are being made pursuant to an Employment Agreement
    entered into in connection with the acquisition of CoreStates. Pursuant to
    such agreement, he is to be paid $2,500,000 per year until April 2003, and
    $1,000,000 per year thereafter, subject to offset by certain retirement
    benefits. The agreement also provides for him to receive 100,000 shares of
    restricted First Union common stock in 1998 and 1999, an option to
    purchase 200,000 shares of First Union common stock in 1998 (which was
    granted at an exercise price of $60.4375 per share), an option to purchase
    200,000 shares of First Union common stock to be granted in 1999 at an
    exercise price equal to the market value of such stock on the date of
    grant, and a split dollar life insurance policy which will pay $15,000,000
    to his beneficiary upon his death, in addition to any outstanding loans
    under the policy. The restrictions on the shares of restricted stock
    granted in 1998 have lapsed and the restrictions on the shares of
    restricted stock to be granted in 1999 will lapse following their grant.
    Pursuant to such agreement, Larsen is also entitled to certain welfare
    benefits. He retired as an employee of First Union on June 30, 1998. He
    was elected a director of First Union by the Board of Directors of First
    Union following the acquisition of CoreStates and is retiring as a
    director at the meeting.

(7) The payments to McDonald are being made pursuant to an Employment Agreement
    entered into in connection with the acquisition of Signet Banking
    Corporation in November 1997. Pursuant to such agreement, he is to be paid
    $1,400,000 per year until November 2002, and $840,000 per year thereafter,
    subject to offset by certain retirement benefits. Under the agreement, in
    1997 he also received 40,000 shares of restricted First Union common stock
    and an option to purchase 100,000 shares of common stock (which was
    granted at an exercise price of $48.75 per share). The restrictions on the
    shares of restricted stock have lapsed. Pursuant to such agreement,
    McDonald is entitled to certain welfare benefits and use of office space.
    He retired as an employee of First Union on July 31, 1998, and is retiring
    as a director at the meeting.


                                       11
<PAGE>

     OPTION/SAR GRANTS TABLE

     The following table sets forth with respect to grants of stock options
made during 1998 to each of the Named Officers: (i) the name of such officer
(column (a)); (ii) the number of options granted (column (b)); (iii) the
percent the grant represents of the total options granted to all employees
during 1998 (column (c)); (iv) the per share exercise price of the options
granted (column (d)); (v) the expiration date of the options (column e)); and
(vi) the Black-Scholes value of the options at grant date (column (f)).

                                                OPTION/SAR GRANTS IN 1998
<TABLE>
<CAPTION>
                                                     Individual Grants
                       -----------------------------------------------------------------------------
                          Number of Securities         % of Total
                        Underlying Options/SARs   Options/SARs Granted   Exercise or                    Black - Scholes
                              Granted (1)             to Employees        Base Price    Expiration    Grant Date Value (3)
         Name                     (#)                    in 1998            ($/Sh)         Date               ($)
- ---------------------- ------------------------- ---------------------- ------------- -------------- ---------------------
<S>                    <C>                       <C>                    <C>           <C>            <C>
  (a)                              (b)                    (c)                (d)           (e)                (f)
Crutchfield ..........            400,000(1)                               62.1250       4/21/08           7,656,285
                                      844(2)                               50.3100       7/31/00              11,259
                           Total: 400,844                 2.79
Georgius .............                844(2)              0.01             50.3100       07/31/00             11,259
Thompson .............             33,294(1)                               62.1250       4/21/08             637,271
                                      844(2)                               50.3100       7/31/00              11,259
                            Total: 34,138                 0.24
Atwood ...............             38,362(1)                               62.1250       4/21/08             734,276
                                      844(2)                               50.3100       7/31/00              11,259
                            Total: 39,206                 0.27
McMullen .............             38,362(1)                               62.1250       4/21/08             734,276
                                      844(2)                               50.3100       4/21/08              11,259
                            Total: 39,206                 0.27
Larsen ...............            200,000(1)              1.39             60.4375       4/28/08           3,724,159
McDonald (4) .........             67,647(1)              0.47             61.9375       Various           1,290,905
</TABLE>

- ----------
(1) These options are nonqualified stock options, except for options granted to
    McMullen to purchase 1,609 shares, which are incentive stock options
    ("ISOs") under section 422 of the Internal Revenue Code of 1986. The
    options are exercisable after one year from the date of grant, subject to
    the limitations under section 422, at an option exercise price equal to
    the market price of the common stock at the date of grant.

(2) These options were granted under the 1998 Employee Stock Purchase Plan and
    are covered by section 423 of the Code. The options are exercisable at the
    lesser of 85% of the market value of the common stock at the date of grant
    or at the end of the plan.

(3) The values shown for the options disclosed in footnote (1) reflect standard
    application of the Black-Scholes pricing model using (i) 60-month
    volatility (21.285%) and daily stock prices for the five years prior to
    grant date, (ii) an option term of ten years, (iii) an interest rate that
    corresponds to the U.S. Treasury rate with a ten-year maturity (5.64%),
    and (iv) dividends at the annualized rate in place on the date of grant
    ($1.48). The values shown for the options disclosed in footnote (2)
    reflect standard application of the Black-Scholes pricing model using (i)
    12-month volatility (22.9748%) and daily stock prices for the five years
    prior to grant date, (ii) an option term of two years, (iii) an interest
    rate that corresponds to the U.S. Treasury rate with a two-year maturity
    (5.27%), (iv) dividends at the annualized rate in place on the date of
    grant ($1.68) and (v) an exercise price that is equal to 85% of the fair
    market value of the common stock on the date of grant. The values do not
    take into account risk factors such as non-transferability and limits on
    exercisability. The Black-Scholes options pricing model is a commonly
    utilized model for valuing options. The model assumes that the
    possibilities of future stock returns (dividends plus share price
    appreciation) resemble a normal "bell-shaped" curve. In assessing the
    values indicated in the above table, it should be kept in mind that no
    matter what theoretical value is placed on a stock option on the date of
    grant, the ultimate value of the option is dependent on the market value
    of the common stock at a future date, which will depend to a large degree
    on the efforts of the Named Officers to bring future success to First
    Union for the benefit of all stockholders.

(4) Represents reload stock options granted pursuant to stock option plans
    assumed by First Union as a result of the Signet acquisition. Pursuant to
    such plans, optionees may tender acquired shares of First Union common
    stock in payment of the exercise price of previously granted stock options
    and receive reload stock options to purchase the number of shares
    tendered. The reload options have an exercise price equal to the closing
    price of the common stock on the date the previously granted options are
    exercised, are first exercisable six months from such date, and will
    expire on the scheduled expiration dates of the previously granted
    options. The expiration dates for the reload options are as follows:
    1/26/03 (9,341 options), 01/25/04 (10,982 options), 1/23/05 (1,614
    options), 1/25/05 (7,143 options), 1/22/06 (9,633 options), 1/27/07
    (11,309 options), and 6/10/07 (17,625 options).


                                       12
<PAGE>

     AGGREGATED OPTION/SAR EXERCISES AND YEAR-END OPTION/SAR VALUE TABLE

     The following table sets forth with respect to each exercise of stock
options (or tandem stock appreciation rights ("SARs")) and freestanding SARs
during 1998 by each of the Named Officers and the year-end value of unexercised
options and SARs on an aggregated basis: (i) the name of such officer (column
(a)); (ii) the number of shares received upon exercise, or if no shares were
received, the number of securities with respect to which the options or SARs
were exercised (column (b)); (iii) the aggregate dollar value realized upon
exercise (column (c)); (iv) the total number of unexercised options and SARs
held at December 31, 1998, separately identifying the exercisable and
unexercisable options and SARs (column (d)); and (v) the aggregate dollar value
of in-the-money, unexercised options and SARs held at December 31, 1998,
separately identifying the exercisable and unexercisable options and SARs
(column (e)).

                  AGGREGATED OPTION/SAR EXERCISES IN 1998 AND
                      DECEMBER 31, 1998 OPTION/SAR VALUES



<TABLE>
<CAPTION>
                                                         Number of Securities
                                                        Underlying Unexercised       Value of Unexercised
                                                             Options/SARs          In-the-Money Options/SARs
                                                          at 12/13/98 (#)(1)            at 12/31/98 ($)
                                                       ------------------------   --------------------------
                 Shares Acquired          Value              Exercisable/                Exercisable/
     Name        on Exercise (#)      Realized ($)           Unexercisable               Unexercisable
- -------------   -----------------   ----------------   ------------------------   --------------------------
<S>             <C>                 <C>                <C>                        <C>
  (a)                  (b)                (c)                    (d)                         (e)
Crutchfield          75,633            2,895,115           323,112/415,752          11,032,215/642,351
Georgius            113,206            4,303,379           200,422/27,106            5,228,932/1,041,956
Thompson              7,500              339,356           105,170/45,168            3,184,103/443,874
Atwood                   --                   --           152,288/53,184            4,713,526/556,996
McMullen             10,378              199,467           94,044/38,784             2,636,234/4,432
Larsen              603,081           20,657,551           324,199/--                3,679,565/--
McDonald            315,258           14,416,927           262,687/--                5,425,313/--
</TABLE>

- ----------
(1) Upon a "change in control" of First Union, all outstanding options granted
    under the 1998 Stock Incentive Plan will become exercisable and will
    remain exercisable for the term of such options.


     LONG-TERM INCENTIVE PLAN AWARDS TABLE

     The following table sets forth, with respect to each award made to a Named
Officer in 1998 under any LTIP: (i) the name of such officer (column (a)); (ii)
the number of shares, units or other rights awarded under any LTIP (column
(b)); (iii) the performance or other time period until payout or maturation of
the award (column (c)); and (iv) for LTIPs not based on stock price, the dollar
value of the estimated payout or range of estimated payouts under the award
(threshold, target and maximum amount), whether such award is denominated in
stock or cash (columns (d) through (f)).


                                       13
<PAGE>

                LONG-TERM INCENTIVE PLANS -- AWARDS IN 1998 (1)



<TABLE>
<CAPTION>
                                                                                  Estimated Future Payments under
                                                                                    Non-Stock Price-Based Plans
                                                                         -------------------------------------------------
                                                Performance or Other
                     Number of Shares,         Period Until Maturation    Threshold         Target             Maximum
     Name        Units or Other Rights (#)            or Payout            ($ or #)       ($ or #)(2)        ($ or #)(3)
- -------------   ---------------------------   ------------------------   -----------   ----------------   ----------------
<S>             <C>                           <C>                        <C>           <C>                <C>
  (a)                     (b)                          (c)                    (d)          (e)                (f)
Crutchfield                                         3 years                    0         $1,015,812         $1,140,000
Georgius                                            3 years                    0            718,501            750,000
Thompson                                            3 years                    0                --                 --
Atwood                                              3 years                    0            360,024            470,000
McMullen                                            3 years                    0            320,217            445,000
Larsen                                              3 years                    0                --                 --
McDonald                                            3 years                    0                --                 --
</TABLE>

- ----------
(1) See the Summary Compensation Table. Under the Management Long-Term Cash
    Incentive Plan, if we achieve not less than a 10% average return on equity
    ("ROE") (calculated as indicated below under "HR Committee Report on
    Executive Compensation") for the three-year period ending each December
    31, based on our "adjusted net income" (as defined in such Plan), a
    contribution to a management incentive pool will be made, based on (i) our
    average ROE ranking for the applicable period compared to the average ROE
    of the 25 largest bank holding companies in the U.S. for such period
    (ranging from a ranking of one to 13), and (ii) a percentage of base
    salaries of the participants in such Plan for the last year of the period
    (gradually decreasing from 50% of such salaries if our ranking is one, to
    27% if our ranking is 13). Participants receive awards under such Plan,
    subject to the discretion of the HR Committee, at the end of each
    three-year period on the basis of individual performance as determined by
    the HR Committee. The maximum potential award is 100% of base salary.

(2) Targets are not determinable. Awards indicated represent awards granted in
    1998 for the 1995-1997 three-year period. Future awards may be higher or
    lower than such awards.

(3) Represents 1998 annual salaries, the maximum awards that can be granted in
    1999 for the 1996-1998 three-year period.


     PENSION PLAN TABLE

     The following table sets forth the estimated annual benefits payable upon
retirement under our Pension Plan (including amounts attributable to our
Supplemental Retirement Plan) in the specified compensation and years of
service classifications indicated below.

     The compensation covered by the Pension Plan includes basic compensation,
overtime and certain incentive compensation. The portions of compensation which
are considered covered compensation under the Pension Plan for the Named
Officers are the salary amounts indicated in the Summary Compensation Table
less deferred amounts. As of January 1, 1999, the credited full years of
service under the Pension Plan were as follows: Crutchfield -- 33 years;
Georgius -- 23 years; Thompson -- 23 years; Atwood -- seven years; and McMullen
- -- four years. Larsen and McDonald retired during 1998.

     The portions of compensation which are considered covered compensation
under the Supplemental Retirement Plan for the Named Officers (excluding
McMullen, Larsen and McDonald) are the annual salary, bonus and LTIP amounts
indicated in the Summary Compensation Table. The Pension Plan is referred to in
the table as "PP" and the Supplemental Retirement Plan as "SRP".


                                       14
<PAGE>


<TABLE>
<CAPTION>
                           Estimated annual retirement benefit, assuming a married
                             participant, a straight life annuity and the years
                                         of service indicated (1)(2)
                     -------------------------------------------------------------------
                            15 years               20 years              25 years
                     ----------------------- --------------------- ---------------------
   Average annual
    compensation         PP          SRP        PP         SRP        PP         SRP
- -------------------- ---------- ------------ -------- ------------ -------- ------------
<S>                  <C>        <C>          <C>      <C>          <C>      <C>
$1,250,000..........  $27,750      356,577   36,999      481,429   46,249      606,281
 1,750,000 .........   27,750      518,372   36,999      697,155   46,249      875,939
 2,250,000 .........   27,750      680,167   36,999      912,882   46,249    1,145,597
 2,750,000 .........   27,750      841,961   36,999    1,128,608   46,249    1,415,255
 3,250,000 .........   27,750    1,003,756   36,999    1,344,335   46,249    1,684,913
 3,750,000 .........   27,750    1,165,551   36,999    1,560,061   46,249    1,954,571
 4,250,000 .........   27,750    1,327,346   36,999    1,775,788   46,249    2,224,229



<CAPTION>
                        Estimated annual retirement benefit,
                                  assuming a married
                     participant, a straight life annuity and the
                                        years
                             of service indicated (1)(2)
                     -------------------------------------------
                           30 years              35 years
                     --------------------- ---------------------
   Average annual
    compensation        PP         SRP        PP         SRP
- -------------------- -------- ------------ -------- ------------
<S>                  <C>      <C>          <C>      <C>
$1,250,000.......... 55,499      731,133   58,658      727,725
 1,750,000 ......... 55,499    1,054,722   58,658    1,051,315
 2,250,000 ......... 55,499    1,378,312   58,658    1,374,904
 2,750,000 ......... 55,499    1,701,902   58,658    1,698,494
 3,250,000 ......... 55,499    2,025,491   58,658    2,022,084
 3,750,000 ......... 55,499    2,349,081   58,658    2,345,674
 4,250,000 ......... 55,499    2,672,671   58,658    2,669,263
</TABLE>

- ----------
(1) For the year ending December 31, 1999, the annual retirement benefit
    payable under the Pension Plan is limited by federal law to $130,000 and
    the maximum covered compensation is limited to $160,000. For officers
    covered under the Supplemental Retirement Plan (currently, a total of 19
    in number), any excess annual retirement benefit (based on 30 or less
    years of service) which could not be paid under the Pension Plan because
    of such limitations would be payable under the Supplemental Retirement
    Plan. The foregoing is reflected in the table. Following a "change in
    control" of First Union, benefits earned under the Supplemental Retirement
    Plan would be payable in a lump sum actuarial equivalent, upon a
    participant's retirement or upon any modification to such Plan which would
    cause the actual or projected benefits payable under such Plan to be
    reduced.

(2) In December 1994, we entered into an agreement with Robert T. Atwood to
    provide a death benefit comparable to that provided under the Supplemental
    Retirement Plan if Mr. Atwood should die before he becomes vested (I.E.,
    completion of ten years of service) under such Plan.


     COMPENSATION OF DIRECTORS

     Directors receive a quarterly retainer of $11,250, plus $1,500 for each
committee meeting attended and $2,000 for each meeting of the Board attended.
In addition, the Chairman of each committee receives a quarterly fee of $2,500.
Travel and accommodation expenses are reimbursed by First Union. Directors who
are employees of First Union do not receive any directors' fees. Directors'
fees totaling $1,572,495 were either paid to the directors in 1998 or deferred
under the terms of our Deferred Compensation Plan for Non-Employee Directors.
Arthur M. Goldberg and Frank M. Henry also serve as advisory directors on the
First Union-Atlantic advisory board and receive $1,200 per meeting attended of
such board.

     Under the Deferred Compensation Plan for Non-Employee Directors, directors
who are not employees of First Union may defer payment of all or any part of
their directors' fees. Deferred amounts are payable after the end of the
calendar year in which the director ceases to be a director, in annual
installments over a ten-year period, unless otherwise determined by the HR
Committee. In 1998, 17 directors deferred $1,008,623 of their 1998 directors'
fees. Deferred fees may either earn interest or be valued based on the fair
market value of First Union common stock, at the option of the director.

     All non-employee directors who serve five years or more are eligible to
participate in our Retirement Plan for Non-Employee Directors. Under such Plan,
after the end of the calendar year in which the director retires, the director
is entitled to receive an annual retirement benefit equal to 80% of the amount
of the annual director retainer in effect at that time.

     The foregoing does not include payments being made to five former
directors for serving as special advisory consultants to the Board. Such former
directors (i) retired as of the Annual Meeting of Stockholders in April 1998,
(ii) are to be paid an annual retainer fee of $60,000 for the three-year period
from April 1998 to April 2001, and (iii) are eligible to participate in the
same benefit programs the current directors are eligible to participate in. The
foregoing also does not include payments being made to (i) Anthony P.
Terracciano, who retired as a director as of the Annual Meeting


                                       15
<PAGE>

of Stockholders in 1998 and who retired as an employee in December 1997, (ii)
Terrence A. Larsen, who is retiring as a director as of the meeting and who
retired as an employee on June 30, 1998, or (iii) Malcolm S. McDonald, who also
is retiring as a director as of the meeting and who retired as an employee on
July 31, 1998. The payments to Terracciano are being made pursuant to an
Employment Agreement entered into in June 1995 in connection with the
acquisition of First Fidelity Bancorporation. Pursuant to such agreement, he is
to be paid $3,000,000 per year until December 31, 2000, and $1,200,000 per year
thereafter, subject to offset by certain other retirement benefits. We also
have agreed to pay $3,000,000 to his beneficiary or estate upon his death,
subject to offset by certain other death benefits. Pursuant to such agreement,
he also is entitled to certain fringe benefits, including certain welfare
benefits, use of an automobile, financial planning services, business use of a
company airplane, office space and secretarial services. See footnotes (6) and
(7) to the "Summary Compensation Table" for information with respect to the
payments to Larsen and McDonald.


     CRUTCHFIELD EMPLOYMENT CONTRACT.


     In August 1985, we entered into an employment agreement with Edward E.
Crutchfield as Chairman and Chief Executive Officer until December 31, 1990,
subject to (i) extension so that the unexpired portion would be not less than
five years, (ii) the right of either party to terminate the agreement at any
time, and (iii) the right of Crutchfield to terminate the agreement if the
Board changes the offices held by him or his power and authority or duties or
responsibilities. The agreement provides for an annual salary of not less than
$330,000 and an annual bonus based on his performance and other factors. If we
terminate the agreement other than for "cause" or if he terminates the
agreement as provided in (iii) above, he will be paid an amount equal to the
sum of (a) the result of multiplying (i) his then current annual salary by (ii)
the number of years (including any fraction thereof) then remaining in the term
of employment, and (b) the result of multiplying (i) his annual average
short-term Management Incentive Plan bonus during the three calendar years
preceding the termination date by (ii) the number of years (including any
fraction thereof) then remaining in the term of employment. If he terminates
his employment other than as provided in (iii) above, he will be paid 66 2/3%
of his then current annual salary for a period of two years, subject to
termination of such payments if he were to violate a two-year non-compete
provision. The agreement also provides for a gross-up payment equal to the
amount of excise taxes (plus the applicable federal and state income, FICA and
excise taxes due on such gross-up payment) payable by him if his employment is
terminated in conjunction with a "change in control" of First Union and such
taxes become payable as a result of payments to him under the agreement or
otherwise, being deemed to be "excess parachute payments" for federal income
tax purposes.

     GEORGIUS EMPLOYMENT CONTRACT.


     In September 1995, we entered into an employment agreement with John R.
Georgius until December 31, 1998, subject to (i) extension for additional
one-year periods, (ii) the right of either party to terminate the agreement at
any time, and (iii) the right of Georgius to terminate the agreement if he
should lose certain duties or responsibilities. The agreement provides for an
annual salary of not less than $665,000 and annual incentive compensation based
on his performance and other factors. If we terminate the agreement other than
for "cause" or if he terminates the agreement as provided in (iii) above, he
will be paid an amount equal to the sum of (a) the result of multiplying (i)
his then current annual salary by (ii) the number of years (including any
fraction thereof) then remaining in the term of employment, and (b) the result
of multiplying (i) his average cash incentive compensation during the three
calendar years preceding the termination date by (ii) the number of years
(including any fraction thereof) then remaining in the term of employment. If
he terminates his employment other than as provided in (iii) above, he will be
paid 66 2/3% of his then current annual


                                       16
<PAGE>

salary for a period of one year, subject to termination of such payments if he
were to violate a one-year non-compete provision. The agreement provides for a
gross-up payment equal to the amount of excise taxes (plus the applicable
federal and state income, FICA and excise taxes due on such gross-up payment)
payable by him if his employment is terminated in conjunction with a "change in
control" of First Union and such taxes become payable as a result of payments
to him under the agreement or otherwise, being deemed to be "excess parachute
payments" for federal income tax purposes.


     COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     The current members of the HR Committee are Messrs. Bradley, Brown,
Dickson, Dolan, Henry, Lotman and Lovett, all of whom are independent, outside
directors.

     Edward E. Crutchfield serves on the Board of Bernhardt Furniture Company,
and as one of the outside directors on its Compensation Advisory Committee. G.
Alex Bernhardt, Sr., a director of First Union, serves as Chairman and Chief
Executive Officer of Bernhardt Furniture Company.


     HR COMMITTEE REPORT ON EXECUTIVE COMPENSATION

     The HR Committee had six regularly scheduled meetings during 1998, at
which time it reviewed, evaluated and approved executive compensation and
benefit recommendations without the presence of the CEO. Our executive
compensation programs consist of elements that vary based on corporate
performance (variable pay) and elements that do not (fixed pay). The variable
component is substantial. Variable pay elements include a short-term incentive
plan, stock compensation plans and a long-term cash incentive plan, which are
further discussed below. For 1998, these variable performance based elements
represented from 75% to 92% of total compensation for executives covered under
such plans. All plans are developed based on competitive information and
administered to balance the interests of the executives with our performance
and the interests of our stockholders.

     In its deliberations on executive pay, the HR Committee maintains the
   following standards:

 o Programs are designed to attract, motivate, reward and retain high
   performing and dedicated management employees.

 o In total, the compensation programs balance competitive need, corporate,
   individual and business unit performance, and affordability.

 o Programs provide competitive financial security for executives and
   dependents in the event of death, disability or retirement.

     The HR Committee believes that the most meaningful performance and pay
equity comparisons are made against companies of similar size and with similar
business interests. In keeping with this belief, the HR Committee consistently
uses the 25 largest bank holding companies in the U.S. as the comparator group
when making compensation decisions. We ranked sixth in size among the group on
December 31, 1998, based on total assets.

     The companies chosen for compensation comparisons in the most recent
competitive study (I.E., the 25 largest bank holding companies) are not the
same companies that comprise the published industry index in the performance
graph set forth below (I.E., the KBW 50 (as defined below)), although the 25
largest bank holding companies are included in the KBW 50. The HR Committee


                                       17
<PAGE>

believes that the most direct competitors for executive talent are not
necessarily all of the companies that would be included in a published industry
index for comparing total stockholder value.

     The HR Committee believes that ROE is the most appropriate measure for
evaluating our results. In order to provide a consistent basis for comparison,
the computation of ROE is based on the average of quarter-end stockholders'
equity, excluding unrealized gains or losses on investment securities, as
determined in accordance with the Statement of Financial Accounting Standards
115 ("SFAS 115"), "Accounting for Certain Investments in Debt and Equity
Securities". Our Management Incentive Plan and Management Long-Term Cash
Incentive Plan both rely on such ROE performance as a primary determinant of
incentive payouts. The ROE calculations in 1997 and 1998 exclude one-time
merger-related charges.

     First Union's and the HR Committee's general intent is to provide
executive compensation consisting of base salaries, which when combined with
awards made under the short-term Management Incentive Plan, the Management
Long-Term Cash Incentive Plan and grants made under our stock compensation
plans, result in total compensation levels which approximate the relative
rankings of asset size and ROE performance within the peer group. This result
is achieved through the use of proxy data on total compensation for the five
most highly compensated executives and financial performance data for the peer
companies. For other executive officers, the HR Committee uses judgment based
on this data. Each compensation decision is based on what is competitive for
that compensation element relative to the peer group, as well as the impact of
such decision on total compensation.

     Because pay and performance levels at peer companies are not known at the
time compensation decisions are made, the HR Committee does not know if the
target compensation levels have been met until such peer information is made
public. Therefore, the HR Committee looks at the historical relationship
between pay and performance over time (typically a three-year period) as well
as comparisons for a single year. For 1997, our ROE peer group rank was 17th,
our asset size ranked sixth, and the total for all compensation for the Named
Officers ranked tenth. It is the HR Committee's intent to address any variance
between performance rank and compensation rank with future compensation
decisions.

     The HR Committee's review of executive compensation relative to the
$1,000,000 limit on tax deductible compensation under the Omnibus Budget
Reconciliation Act of 1993 and the regulations promulgated thereunder ("OBRA")
was made in the context of insuring the ability to balance sound compensation
decisions with appropriate fiscal responsibility. The HR Committee's intention
has been to modify our executive compensation plans to minimize the possibility
of lost deductions. However, it is also the HR Committee's intent to balance
the effectiveness of such plans against the materiality of any possible lost
deductions.

     To continue to meet these objectives, the HR Committee may from time to
time change or adjust one or more of our executive compensation plans or
recommend the same to the Board, as it deems appropriate. Additionally, from
time to time we employ an independent firm of employee benefit consultants to
advise us and the HR Committee as to various matters relating to executive
compensation.


                                       18
<PAGE>

     BASE SALARY

     Our base salary program targets base salaries for executive officers at
market. As indicated above, our "market" is the 25 largest bank holding
companies in the U.S., as measured by total assets. The HR Committee believes
that base salary should be reflective of the executive's scope of
responsibility, and further, that asset size is the best indicator of scope of
responsibility. Accordingly, base salaries for executives are targeted to have
the same relative rank among the peer group as asset size. For 1997, our asset
size ranked sixth among the peer group and the total base salaries for the
Named Officers (excluding Larsen and McDonald who were paid pursuant to
employment agreements) ranked fourth among the peer group. Any variances are
addressed in determining the total compensation for such Named Officers. Base
salary increases in 1998 were made as a result of the review of base salary
market data.


     SHORT-TERM MANAGEMENT INCENTIVE PLAN

     Our short-term Management Incentive Plan covering executive officers is
funded based on ROE. For 1998, the threshold ROE was 15%. Individual awards may
range from 0% to 200% of base salary. Determination of individual awards is
based primarily on our ROE, but includes a subjective assessment of individual
performance, where permitted. Measures of individual performance include
meeting business unit objectives, promoting corporate values and providing
leadership to employees.

     Our ROE for 1998 was 22.85%, exceeding the threshold ROE by 52% and
resulting in payments which ranged from 28% to 200% of base salaries.


     LONG-TERM INCENTIVE PROGRAM

     The long-term incentive program is composed of the following:

 o Our stock compensation plans, which are made up of two elements: stock
   options and restricted stock awards. The HR Committee believes that issuing
   stock options and restricted stock to executives benefits our stockholders
   by encouraging and enabling executives to own First Union stock, thus
   aligning executive pay with stockholder interests.

 o Our Management Long-Term Cash Incentive Plan, which pays cash awards based
   on ROE performance. Our ROE rank for the period against the peer group
   determines the available pool from which awards may be made. Our ROE for
   the period, and individual performance, are considered in determining
   actual payouts from the plan.

     Award sizes for the stock plans, and payouts from the long-term cash plan,
are set so that total compensation approximates the relative rankings of asset
size and ROE performance within the peer group. Our 1997 ROE of 18.86% resulted
in a three-year average ROE rank of tenth among the peer group, generating a
pool of 37% of the aggregate base salaries of all participants in the long-term
cash plan. This amount was distributed by the HR Committee in its discretion.

     The 1998 mix of the long-term incentive program awards was set
subjectively. In determining the mix, the HR Committee balanced rewards for
past performance with incentives for future performance, and took into account
such factors as overall risk of the pay package, award sizes in prior years and
cash/stock mix. Current holdings of stock were not considered.

     In addition to the restricted stock award made to John R. Georgius under
our stock compensation plan, in 1998 he was granted a special restricted stock
award in recognition of his exceptional leadership during the past ten years
and in order to better assure us of such continued leadership.


                                       19
<PAGE>

During this period we experienced outstanding financial performance, including
(i) an increase in total stockholder return at an annual compound rate of 23%,
(ii) growth in dividends per share at an annual compound rate of 11%, (iii)
book value per share growth at an annual compound rate of 8.8%, (iv) growth in
total assets from $16.6 billion to $157.3 billion (for the twelve-year period
ending December 31, 1997), (v) successfully integrating over 70 acquired
financial institutions, and (vi) an increase in market capitalization of
1,415%.


     1998 COMPENSATION FOR THE CEO

     Edward E. Crutchfield is eligible to participate in the same executive
compensation plans available to the other executive officers as described
above. His short-term Management Incentive Plan payout and Management Long-Term
Cash Incentive Plan payout were based primarily on our ROE, and included a
subjective assessment of individual performance, where permitted. The
Management Long-Term Cash Incentive Plan payout was based primarily on our
three-year average ROE, as discussed above. In the case of the short-term
Management Incentive Plan payout, the HR Committee considered our overall
financial performance in 1998 and success in meeting strategic objectives. Our
1998 ROE was 22.85%, return on assets was 1.66%, and net income applicable to
common stockholders was $3.7 billion (a 28% increase over 1997 net income
applicable to common stockholders, excluding one-time merger-related charges).
The strategic objectives included five acquisitions completed (I.E.,
CoreStates, Covenant Bancorp, Inc., Wheat First Butcher Singer, Inc., Bowles
Hollowell Conner & Co. and The Money Store, Inc.), as well as the continued
expansion of initiatives involving capital markets, capital management and the
Future Bank. The stock option grant and restricted stock awards made to him in
1998 were based on the analysis discussed above. That is, the HR Committee set
them so that Mr. Crutchfield's total compensation would approximate the
expected relative rankings of asset size and ROE performance within the peer
group. In the aggregate, the variable performance based portion was 92% of his
compensation. The 1985 employment agreement with him described above had no
impact on compensation decisions made with respect to him during 1998.

     With respect to the HR Committee's use of the historical relationship
between pay and performance described above, our total assets and ROE
performance for 1997 ranked sixth and 17th, respectively, among the peer group,
and Mr. Crutchfield's base salary and total compensation ranked second and
13th, respectively.

R. STUART DICKSON, CHAIRMAN
W. WALDO BRADLEY
ROBERT J. BROWN
B. F. DOLAN
FRANK M. HENRY
HERBERT LOTMAN
RADFORD D. LOVETT

                                       20
<PAGE>

     PERFORMANCE GRAPH

     The following graph compares (i) the yearly change in the cumulative total
stockholder return on First Union common stock with (ii) the cumulative return
of the Standard & Poor's 500 Stock Index ("S&P 500") and the Keefe, Bruyette &
Woods, Inc. 50 Index ("KBW 50"). The graph assumes that the value of an
investment in the common stock and in each index was $100 on December 31, 1993,
and that all dividends were reinvested.

     The S&P 500 and the KBW 50 are market-capitalization-weighted indices,
meaning that companies with a higher market value count for more in both
indices. The KBW 50 is comprised of 50 bank holding companies, including all
money-center and major regional bank holding companies.

(Plot points for omitted graphic appear below)                  

<TABLE>
<CAPTION>
                                            December 31,
                         --------------------------------------------------
                          1993     1994     1995     1996     1997     1998
                         ------   ------   ------   ------   ------   -----
<S>                      <C>      <C>      <C>      <C>      <C>      <C>
 First Union .........    $100     104      146      201      286      349
 S&P 500 .............     100     101      139      171      228      293
 KBW 50 ..............     100      95      152      215      314      340
</TABLE>

     The information set forth above under the subheadings "HR Committee Report
on Executive Compensation" and "Performance Graph" (i) shall not be deemed to
be "soliciting material" or to be "filed" with the SEC or subject to Regulation
14A or the liabilities of Section 18 of the 1934 Act,


                                       21
<PAGE>

and (ii) notwithstanding anything to the contrary that may be contained in any
filing by First Union under such Act or the 1933 Act, shall not be deemed to be
incorporated by reference in any such filing.

OTHER MATTERS RELATING TO EXECUTIVE OFFICERS AND DIRECTORS


     GENERAL

     The directors and executive officers who file reports with the SEC under
Section 16(a) of the 1934 Act (including organizations with which they are
affiliated and members of their immediate families) are customers of our bank.
In the opinion of management, the outstanding indebtedness and commitments in
connection with the lending relationships of such directors and officers were
made in the ordinary course of business and on substantially the same terms,
including interest rates, collateral and repayment terms, as those prevailing
at the time for comparable transactions with other customers and do not involve
more than normal risk of collectibility or present other unfavorable features.
During 1998, the aggregate monthly outstanding principal balances of loans made
by our bank to such directors and officers, including certain of their related
interests, ranged from a high of approximately $2.4 billion to a low of
approximately $3.2 billion. In addition to such lending relationships, the
directors and organizations they are affiliated with provide certain services
or otherwise do business with First Union and its affiliated entities and we in
turn provide certain services or otherwise do business with the directors and
such organizations, in each case in the ordinary course of business. Certain of
such relationships are discussed below.


     CERTAIN RELATIONSHIPS

     Erskine B. Bowles is a general partner of Forstmann Little & Co. and a
Managing Director of Carousel Capital Company, LLC. Carousel Company is the
general partner of Carousel Capital Partners, LP. First Union has a 15% limited
partnership interest in Carousel Partners, which is represented by a $25
million commitment. As of December 31, 1998, we had invested $12.5 million in
Carousel Partners, leaving a remaining commitment of $12.5 million. As part of
our investment in Carousel Partners we pay Carousel Company a semi-annual
management fee, which totaled $437,500 in 1998. First Union is a lender to
several of the companies that Carousel Partners and Forstmann Little have
investments in and may engage in other transactions with such companies. In
1993, Bowles sold his interest in Bowles Hollowell Conner & Co. back to the
company. In April 1998, we acquired Bowles Hollowell. Subsequent to the
acquisition Bowles Hollowell paid Bowles the $1.65 million remaining on the
note that Bowles Hollowell issued to Bowles when he sold his interest to the
company. In 1990, we entered into sale/leaseback transaction with a real estate
finance company that involved various First Union bank branches in North
Carolina, Florida and Georgia. The lease agreement expires in 2010. Bowles is a
passive investor (7.15% limited partnership interest) in Investment Partners
Leasing Corporation, which has an option to lease all or part of such branches,
at a fixed rate upon expiration of the lease. First Union entered into an
agreement with Investment Partners whereby we have the option to sublease such
branches from Investment Partners, at market rates, at the expiration of the
current lease, if they exercise their option.

     Robert Brown is Chairman, President and Chief Executive Officer of B&C
Associates, Inc. During 1998, B&C Associates supervised certain consulting
services provided to First Union by a consulting firm, for which we paid B&C
Associates $89,300, including expenses.


                                       22
<PAGE>

     William H. Goodwin, Jr. owns 100% of a company from which we rent aircraft
owned by such company to transport directors to and from meetings of the Board
of Directors. The rent we pay for use of such aircraft is $4,000 per meeting.

     Frank M. Henry is a partner in Frank M. Henry Associates, from which we
lease a branch office in Wilkes-Barre, Pennsylvania. The initial term expires
on April 30, 2003, and has four five-year renewal options. The rent paid in
1998 totaled $73,140.

     Charles M. Shelton, Sr., together with other family members, are the
controlling stockholders of Shelco, Inc. , a general contractor. During 1998,
we paid Shelco approximately $5.2 million for construction work in Charlotte,
North Carolina. In addition, in 1998 we received a final partnership
distribution of approximately $79,000 from a partnership that included, among
others, First Union, Shelton and his brother. The partnership owned a building
in Winston-Salem, North Carolina, a portion of which we leased from the
partnership. The partnership was dissolved in 1997. Also, Shelco has a 40%
interest in a joint venture that is the contractor for Three First Union
Center, which is being built in Charlotte, North Carolina. We currently expect
to pay the joint venture $15.6 million for tenant improvements in this building
in 1999 and through the first quarter of 2000.


     SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the 1934 Act requires the directors and executive
officers covered by such Section to file certain reports relating to their
ownership of such securities and any changes in such ownership with SEC and the
New York Stock Exchange. To our knowledge, based solely on a review of the
copies of such reports or written representations relating thereto, during or
prior to the year ended December 31, 1998, all Section 16(a) filing
requirements applicable to such directors and executive officers were complied
with, except as set forth in prior proxy statements and except for late filings
by: Reggie Davis, a Section 16(a) reporting officer, relating to the sale of
832 shares; Malcolm S. McDonald, a retiring director, relating to 78,265 shares
withheld to satisfy a tax withholding obligation in connection with the
exercise of stock options; Donald A. McMullen, a Section 16(a) reporting
officer, relating to the exercise of three stock options totaling 10,378 shares
and the surrender of shares in payment of the option price; and Randolph N.
Reynolds, a director, relating to the purchase of 1,000 shares by a trust for
which he serves as trustee.


                                       23
<PAGE>

PROPOSAL 2. RATIFICATION OF APPOINTMENT OF AUDITORS

     The accounting firm of KPMG LLP has been appointed as our auditors for the
year 1999 and in accordance with established policy, such appointment is being
submitted to the stockholders for ratification. In the event the appointment is
not ratified by a majority of votes cast, in person or by proxy, it is
anticipated that no change in auditors would be made for the current year
because of the difficulty and expense of making any change so long after the
beginning of the current year, but such vote would be considered in connection
with the appointment of auditors for 2000.

     KPMG LLP were our auditors for the year ended December 31, 1998, and a
representative of such firm is expected to attend the meeting, respond to
appropriate questions and if such representative desires, which is not now
anticipated, make a statement.

     THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THIS PROPOSAL. PROXIES,
UNLESS INDICATED TO THE CONTRARY, WILL BE VOTED "FOR" THIS PROPOSAL.

STOCKHOLDER PROPOSALS

     Management is not aware of any other matters which are to be voted on at
the meeting. If any other matters are presented and voted upon, the enclosed
proxy will be deemed to confer discretionary authority to the individuals named
as proxies to vote the shares represented by such proxy, as to any such
matters.

     Proposals of stockholders intended to be included in our proxy statement
and voted on at the 2000 Annual Meeting of Stockholders must be received at our
offices at One First Union Center, Charlotte, North Carolina 28288-0013,
Attention: Corporate Secretary, on or before November 12, 1999. The submission
of such proposals by stockholders and the consideration of such proposals by us
for inclusion in next year's proxy statement and form of proxy are subject to
applicable rules and regulations of the SEC.

     Pursuant to our Bylaws, in order for any business not included in the
proxy statement for the 2000 Annual Meeting of Stockholders to be brought
before the meeting by a stockholder of record entitled to vote at the meeting,
the stockholder must have given timely notice of such business in writing to
the Secretary of First Union. According to our Bylaws, the meeting is scheduled
to be held on April 18, 2000, and to be timely, the notice must not be received
any earlier than January 31, 1999, nor any later than February 20, 2000. If the
meeting is not held on such date, the notice must be received no later than the
tenth day after public disclosure of the date of the meeting. The notice must
set forth (i) a brief description of the business desired to be brought before
the meeting and the reasons for so doing, (ii) the name and address of the
stockholder and the number of shares of First Union common stock owned by the
stockholder, and (iii) any material interest of the stockholder in such
business, other than having an interest as a stockholder. A copy of our Bylaws
is available upon request to: First Union Corporation, One First Union Center,
Charlotte, North Carolina 28288-0013, Attention: Corporate Secretary.

March 12, 1999


     A COPY OF OUR 1998 ANNUAL REPORT ON FORM 10-K WILL BE PROVIDED WITHOUT
CHARGE (EXCEPT FOR EXHIBITS) UPON WRITTEN REQUEST TO FIRST UNION CORPORATION,
CORPORATE RELATIONS, ONE FIRST UNION CENTER, CHARLOTTE, NC 28288-0206.


                                       24
<PAGE>

                      (This Page Intentionally Left Blank)
<PAGE>

                      (This Page Intentionally Left Blank)
<PAGE>

                      (This Page Intentionally Left Blank)
<PAGE>

 
                        (First Union Logo appears here)


                                  
 
 
<PAGE>
 ***********************************APPENDIX**********************************

                TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
 ------------------------------------------------------------------------------

                            FIRST UNION CORPORATION
          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

P  The undersigned holder of shares of common stock of First Union Corporation
R  (the "Corporation") hereby constitutes and appoints W. Waldo Bradley, Radford
O  D. Lovett and Charles M. Shelton, Sr., or any of them, the lawful attorneys 
X  and proxies of the undersigned, each with full power of substitution, for and
Y  on behalf of the undersigned, to vote as specified on the reverse side, all 
   of the shares of the Corporation's common stock held of record by the 
   undersigned on February 22, 1999, at the Annual Meeting of Stockholders of 
   the Corporation to be held on April 20, 1999, at 9:30 a.m., in the 
   Auditorium, 12th Floor, Two First Union Center, Charlotte, North Carolina, 
   and at any adjournments or postponements thereof.
                                       
    THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED ON THE
    REVERSE SIDE. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED "FOR"
    PROPOSALS 1 AND 2, AS APPLICABLE. IF ANY OTHER MATTERS ARE VOTED ON AT THE
    ANNUAL MEETING, THIS PROXY WILL BE VOTED BY THE PROXYHOLDERS ON SUCH
    MATTERS IN THEIR SOLE DISCRETION.

(PLEASE COMPLETE, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE AND MAIL WITHOUT
                        DELAY IN THE ENCLOSED ENVELOPE.)



                                                               SEE REVERSE SIDE
<PAGE>

                TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
- ------------------------------------------------------------------------------- 
     PLEASE MARK VOTES
 [X]
     AS IN THIS EXAMPLE

       THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
                                     

<TABLE>
<S>                                                       <C>                       <C>                <C>
(1) Election of Directors: Class I - Erskine B. Bowles,
  Robert J. Brown, Edward E. Crutchfield, James E. S.     FOR all nominees listed   WITHHOLD
  Hynes, Herbert Lotman, Patricia A. McFate, Joseph       (except as indicated to   authority to vote
  Neubauer, Ruth G. Shaw and Charles M. Shelton, Sr.;     the contrary)              for all nominees
  Class II-R. Stuart Dickson                                        [ ]                    [ ]
  INSTRUCTIONS: To withhold authority to vote for any
  individual nominee(s), write the name(s) of such
  nominee(s) in the space provided below.
- --------------------------------
(2) A proposal to ratify the appointment of KPMG LLP as             For                  Against       Abstain
  auditors of the Corporation for the year 1999.                    [ ]                    [ ]           [ ]


                                                                     DATE: ---------------------------- , 1999
                                                                     -----------------------------------------
                                                                     -----------------------------------------
                                                                     SIGNATURES(S)

                                                                     NOTE: Signature(s) should agree
                                                                     with name(s) on proxy form.
                                                                     Executors, administrators, trustees
                                                                     and other fiduciaries, and persons
                                                                     signing on behalf of corporations
                                                                     or partnerships, should so indicate
                                                                     when signing.
</TABLE>


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission