<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
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CORESTATES FINANCIAL CORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
<PAGE>
CoreStates Financial Corp
PO Box 7618
Philadelphia PA 19101-7618
215 973 3546
TERRENCE A. LARSEN
Chairman and
Chief Executive Officer
[LOGO OF CORESTATES
APPEARS HERE]
March 4, 1997
Dear Shareholder:
CoreStates' Annual Meeting of Shareholders will be held on Tuesday, April
15, 1997 at 8:30 a.m. in the Ormandy Ballroom at the Doubletree Hotel
located at Broad and Locust Streets, Philadelphia, Pennsylvania. You are
cordially invited to attend.
As highlighted in the accompanying annual report, our focus in the past
year has been on the successful accomplishment of the Meridian merger, and
upon significant corporate actions which we believe will add value for our
shareholders.
It is important that your shares be represented at the Annual Meeting
whether or not you are able to attend personally. I urge you to sign and
date the enclosed proxy card and return it in the enclosed envelope as
soon as possible. Completing and returning the enclosed proxy card will
not limit your right to vote in person or to attend the meeting.
Thank you very much for your continued interest and support.
Sincerely,
/s/ Terrence A. Larsen
Terrence A. Larsen
<PAGE>
[LOGO OF CORESTATES FINANCIAL CORP APPEARS HERE]
PO Box 7618
Philadelphia, PA 19101-7618
March 4, 1997
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, APRIL 15, 1997
Notice is hereby given that the Annual Meeting of Shareholders of CoreStates
Financial Corp ("CoreStates") will be held in the Ormandy Ballroom at the
Doubletree Hotel, located at Broad and Locust Streets, Philadelphia,
Pennsylvania, at 8:30 A.M. Philadelphia time, on Tuesday, April 15, 1997, for
the following purposes:
1. To elect five directors;
2. To approve the adoption of the Amended and Restated Directors' Stock
Plan (1997);
3. To approve the adoption of the Amended and Restated Long-Term
Incentive Plan (1997);
4. To ratify the selection of Ernst & Young LLP as CoreStates'
independent auditors for the fiscal year ending December 31, 1997;
and
5. To transact such other business as may properly come before the
meeting.
Only those shareholders of record at the close of business on February 27,
1997 shall be entitled to vote at the meeting.
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING ON APRIL 15,
1997, PLEASE SIGN AND DATE THE ENCLOSED FORM OF PROXY AND RETURN IT IN THE
ENCLOSED ENVELOPE. THIS WILL NOT LIMIT YOUR RIGHT TO VOTE IN PERSON IF YOU
WISH TO DO SO AT THE MEETING.
A copy of CoreStates' Annual Report for its fiscal year ended December 31,
1996 is being mailed to shareholders together with this Notice.
By order of the Board of Directors
/s/ William L. Gaunt
William L. Gaunt
Secretary
<PAGE>
[LOGO OF CORESTATES FINANCIAL CORP APPEARS HERE]
PO Box 7618
Philadelphia, PA 19101-7618
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of CoreStates Financial Corp ("CoreStates")
for use at the Annual Meeting of Shareholders to be held on April 15, 1997 and
at any adjournments thereof. A form of proxy for holders of common stock of
CoreStates ("CoreStates Common Stock") is being furnished for use at the
meeting. The proxy statement and the form of proxy are being mailed on March
4, 1997, or as soon thereafter as possible, to all shareholders entitled to
vote at the meeting. Execution of the accompanying proxy will not affect a
shareholder's right to attend the meeting and vote in person. Any shareholder
executing a proxy has the right to revoke it by delivering notice of
revocation or a duly executed proxy bearing a later date to the Secretary of
CoreStates at any time before the proxy is voted.
Subject to the limitations described below, unless a proxy is revoked or
contains other instructions, the shares represented by proxies in the
accompanying form, if properly signed and returned, will be voted at the
meeting FOR the election as directors of the nominees of the Board of
Directors set forth below (Proxy Item 1), FOR the adoption of the Amended and
Restated Directors' Stock Plan (the "Directors' Plan") (Proxy Item 2); FOR the
adoption of the Amended and Restated Long-Term Incentive Plan (the "Long-Term
Incentive Plan") (Proxy Item 3); and FOR the ratification of the selection of
Ernst & Young LLP as CoreStates' independent auditors for the fiscal year
ending December 31, 1997 (Proxy Item 4). However, if a broker or shareholder
nominee limits on the proxy card the number of shares voted on a proposal or
indicates that the shares represented by a proxy card are not voted on the
proposal, such "non-votes" will not be voted on the proposal and will not be
counted in determining the number of affirmative votes required for approval.
The proxy card also provides that the persons authorized thereunder may, in
the absence of instructions to the contrary, vote or act in accordance with
their judgment on any other matter properly presented for action at the
meeting.
CoreStates intends to count shares of CoreStates Common Stock present in
person at the Annual Meeting but not voting, and shares of CoreStates Common
Stock for which it has received proxies but with respect to which holders of
shares have abstained on any matter, as present at the Annual Meeting for
purposes of determining the presence or absence of a quorum for the
transaction of business.
For voting purposes at the Annual Meeting, only shares affirmatively voted
in favor of a proposal will be counted as favorable votes for such proposal.
The abstention from voting with respect to any proposal by any shareholder who
is present in person or by proxy at the Annual Meeting will have the same
effect as a vote against such proposal. If a shareholder either records the
fact of abstention or fails to vote in person or by proxy, such action is not
considered a "vote cast" under the Pennsylvania Business Corporation Law.
Pursuant to the Bylaws of CoreStates, the Board of Directors has fixed the
close of business on February 27, 1997 (the "Record Date") as the time for
determining shareholders of record entitled to notice of, and to vote at, the
Annual Meeting. Each share of CoreStates Common Stock will entitle the holder
thereof to one vote on all matters which may properly come before the meeting.
As of February 27, 1997 there were issued and outstanding 212,356,878 shares
of CoreStates Common Stock.
Shareholders entitled to cast at least a majority of the votes which all
shareholders are entitled to cast on the CoreStates Record Date must be
represented in person or by proxy at the CoreStates Annual Meeting in order
for a quorum to be present for purposes of voting on the election of
directors, the adoption of the Directors' Plan
1
<PAGE>
and the Long-Term Incentive Plan, and the ratification of the selection of
auditors. Shares of CoreStates Common Stock owned, directly or indirectly, by
it and controlled, directly or indirectly, by the board of directors, shall
not be counted in determining the total number of outstanding shares for
quorum purposes.
If a shareholder is a participant in the CoreStates' Dividend Reinvestment
and Share Purchase Plan, the proxy card sent to such shareholder will
represent both the number of shares registered in the shareholder's name and
the number of shares credited to the shareholder's Dividend Reinvestment and
Share Purchase Plan account, and all such shares will be voted in accordance
with the instructions on the proxy card.
The cost of preparing, assembling and mailing the proxy materials will be
paid by CoreStates. Georgeson & Company ("Georgeson"), Wall Street Plaza, New
York, New York 10005, has been engaged by CoreStates to solicit proxies for
use at the Annual Meeting. The anticipated fees of Georgeson are $9,000 plus
expenses. To the extent necessary in order to ensure sufficient representation
of shareholders at the Annual Meeting, the named solicitor and officers and
employees of CoreStates and its subsidiaries may personally, by telephone or
by other means, contact shareholders to request the return of proxies. Banks,
brokerage houses and other institutions, nominees or fiduciaries will be
requested to forward the proxy materials to beneficial owners in order to
solicit authorizations for the execution of proxies. CoreStates will, upon
request, reimburse such banks, brokerage houses and other institutions,
nominees and fiduciaries for their reasonable expenses in forwarding such
materials.
ELECTION OF DIRECTORS
(ITEM 1)
Following upon the resignation of Lawrence R. Pugh, a former director whose
term would have expired in 1998, the Board of Directors of CoreStates has
determined that the number of directors of CoreStates shall be fourteen (14).
The Articles of Incorporation of CoreStates provide that the directors of
CoreStates shall be divided into three classes, as nearly equal in number as
possible, with such classes of directors serving staggered three-year terms of
office. Accordingly, at each annual meeting of shareholders, a class
consisting of approximately one-third of CoreStates' directors will be elected
to hold office for a term expiring at the annual meeting of shareholders held
in the third year following the year of their election and until their
successors have been duly elected and qualified. Five nominees, as set forth
below, are to be elected at this Annual Meeting to hold office until the
Annual Meeting to be held in the year 2000 and until their successors are
elected and qualified. The remaining 9 directors will continue to serve as set
forth below. Each nominee is presently a director of CoreStates.
In the absence of instructions to the contrary, shares of CoreStates' Common
Stock represented by properly executed proxies will be voted for the five
nominees listed below, all of whom have consented to be named and to serve if
elected. CoreStates does not presently know of anything that would preclude
any nominee from serving. Should any nominee for any reason become unable or
unwilling to serve as director, the number of nominees to be elected will be
reduced accordingly.
Set forth below opposite their pictures are the names and ages of the
nominees and continuing directors, their principal occupations and the year
each individual began continuous service as a director of CoreStates or one of
its predecessors. Each nominee and continuing director has held the position
or former position shown or other executive positions with the same or an
affiliated or predecessor entity for at least the past five years, except as
otherwise indicated. Also shown with respect to each nominee and continuing
director are directorships held in companies (other than CoreStates) which are
required to file reports with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 (the "Exchange Act") or which are registered
under the Investment Company Act of 1940 and certain other business or
insurance companies. In addition, set forth opposite the name of each nominee
and continuing director is the number of shares of CoreStates Common Stock
("Shares") beneficially owned as of February 20, 1997. Except as otherwise
indicated in the Notes to Nominee and Continuing Director Information, the
persons named possess sole voting and investment power with respect to the
Shares shown opposite their names.
2
<PAGE>
NOMINEE DIRECTORS--TERM EXPIRES 2000
<TABLE>
<S> <C>
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Ernest E. Jones, 52, Director since 1992. 1,026 Shares
Executive Director of Greater Philadelphia Urban Affairs
Coalition.
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Marlin Miller, Jr., 64, Director since 1988. 18,649 Shares/(1)/
President, Chief Executive Officer, and Director of Arrow
International, Inc. (a manufacturer of medical products);
Director of Carpenter Technology Corp.
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James M. Seabrook, 63, Director since 1994. 7,256 Shares/(2)/
Chairman and Chief Executive Officer of Seabrook Brothers
& Sons, Inc. (frozen food processor); Director of Bell
Atlantic New Jersey until January 2, 1996; New Jersey
Manufacturers Insurance Company; and New Jersey Re-
Insurance Company.
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Peter S. Strawbridge, 58, Director since 1979. 2,641 Shares
Retired President and Director of Strawbridge & Clothier
(regional merchandising corporation), as of July 15,
1996.
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Judith M. von Seldeneck, 56, Director since 1996. 3,330 Shares/(3)/
President and Chief Executive Officer of The Diversified
Search Companies (an executive search firm); Director of
Keystone Corporation, Tasty Baking Company; and Director
of Meridian Bancorp, Inc., ("Meridian") from June 19,
1980 until April 9, 1996.
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</TABLE>
3
<PAGE>
CONTINUING DIRECTORS--TERM EXPIRES 1999
<TABLE>
<S> <C>
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Terrence A. Larsen, 50, Director since 1986. 686,717 Shares/(4)/
Chairman and Chief Executive Officer of CoreStates;
Chairman of CoreStates Bank, N.A.; prior to August 1994,
Chairman, President, and Chief Executive Officer of
CoreStates, and CoreStates Bank, N.A.
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- --------------
Samuel A. McCullough, 58, Director since 1996. 99,839 Shares/(5)/
Special Consultant to CoreStates from July 1, 1996;
President and Chief Operating Officer of CoreStates from
April 9, 1996 to June 30, 1996; Chairman, Chief Executive
Officer and Director of Meridian from January 19, 1978
until April 9, 1996; also, President of Meridian from May
1, 1995 until April 9, 1996.
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Patricia A. McFate, 64, Director since 1976. 4,800 Shares
Senior Scientist and Program Director, Center for
National Security Negotiations of Science Applications
International Corporation (a systems engineering
company); Senior Scientist of System Planning Corporation
from October 1988 to July 1989; prior to October 1988,
President and Trustee of The American-Scandinavian
Foundation.
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- --------------
Raymond W. Smith, 59, Director since 1984. 5,305 Shares/(6)/
Chairman, Chief Executive Officer and Director of Bell
Atlantic Corporation (telecommunications and services
corporation); Director of USAir (commercial aviation) and
Westinghouse Electric Company.
- --------------
- --------------
George Strawbridge, Jr., 59, Director since 1996. 5,145,701 Shares/(7)/
Private Investor; Adjunct Professor of Widener
University; owner and CEO of Augustin Stables; Director
of Campbell Soup Company; Director of Meridian from
January, 1988 until April 9, 1996.
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</TABLE>
4
<PAGE>
CONTINUING DIRECTORS--TERM EXPIRES 1998
<TABLE>
<S> <C>
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Robert W. Cardy, 60, Director since 1996. 1,180 Shares/(8)/
Chairman, President, Chief Executive Officer and
Director, Carpenter Technology Corp. (specialty steel and
alloys manufacturer) since July 1, 1992; prior thereto,
President, Chief Operating Officer and Director,
Carpenter Technology Corp. from November 1, 1990;
Director of Meridian from April 20, 1993 until April 9,
1996.
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Carlton E. Hughes, 65, Director since 1978. 11,250 Shares/(9)/
Chairman and Director of Stewart-Amos Steel, Inc.
(structural steel fabrication); former President,
Treasurer and Director of Stewart-Amos Equipment Co.;
Director of Irex Corporation and Arnold Industries, Inc.
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Herbert Lotman, 63, Director since 1990. 86,293 Shares/(10)/
Chairman, President and Chief Executive Officer of
Keystone Foods Corporation (food manufacturing and
distribution); Director of Getty Petroleum Corporation
from 1988 to 1996 and PCI Services, Inc. from 1991 to
1996.
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George V. Lynett, 53, Director since 1995. 33,720 Shares/(11)/
Publisher, The Scranton Times (newspaper company);
Secretary/Treasurer, Shamrock Communications, Inc.;
President, Towanda Daily Review; and President, Wyoming
County Press, Inc.
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</TABLE>
ACTION BY SHAREHOLDERS
Election of the nominee directors requires the affirmative vote of the
holders of a majority of the shares of CoreStates Common Stock present, either
in person or by proxy, at the annual meeting and entitled to vote. A vote
indicated as withheld from a nominee will not be cast for such nominee but
will be counted in determining the presence of a quorum. There are no
cumulative voting rights for the election of directors.
WITH RESPECT TO THE ELECTION OF DIRECTORS (PROXY ITEM 1), THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES.
Notes to Nominee and Continuing Director Information
(1) 1,600 of the Shares reported as owned by Mr. Miller are owned by his
wife. Mr. Miller disclaims beneficial ownership of such Shares.
(2) 2,000 of the Shares reported as beneficially owned by Mr. Seabrook are
registered in the name of his daughter. Mr. Seabrook disclaims beneficial
ownership of such Shares.
5
<PAGE>
(3) 1,604 of the Shares reported as beneficially owned by Ms. von Seldeneck
are registered in her name as custodian for Kevin Clay von Seldeneck.
(4) This includes 472,131 Shares which Mr. Larsen has the right to acquire
immediately pursuant to presently exercisable stock options. Of the
Shares reported as beneficially owned by Mr. Larsen, 2,025 are registered
in the name of his daughter, 2,180 are registered in Mr. Larsen's name as
custodian for his daughter; as to all such Shares, Mr. Larsen disclaims
beneficial ownership. 175,607 of the Shares registered as beneficially
owned by Mr. Larsen are registered in the joint names of Mr. Larsen and
his wife. 5 Shares are held for Mr. Larsen by CoreStates Bank, N.A. as
trustee under the CoreStates Employee Stock Ownership and Savings Plan.
(5) Of the Shares reported as beneficially owned by Mr. McCullough, 169 are
registered in Mr. McCullough's name as custodian for his daughter, 88
Shares are registered in the name of his wife and 138 Shares are held
under the CoreStates Employee Stock Ownership and Savings Plan.
(6) 800 of the Shares reported as beneficially owned by Mr. Smith are held in
a charitable trust, of which Mr. Smith and his wife are co-trustees.
(7) This includes: (i) 5,145,579 Shares reported as beneficially owned by Mr.
G. Strawbridge which are held by a trust of which Mr. Strawbridge is co-
trustee and has the power to revoke and (ii) 122 Shares owned jointly
with one of his children. Additionally, Mr. G. Strawbridge disclaims
beneficial ownership of (a) 6,125 Shares held by a trust revocable by
Mrs. Strawbridge of which Mr. Strawbridge is co-trustee; (b) 6,417 Shares
held by a trust created by Mr. Strawbridge's son of which he is co-
trustee; (c) 1,225 Shares held by a trust for the benefit of his step
daughter of which he is the co-trustee; and (d) 4,000 Shares held by a
trust for the benefit of his nephew of which he is the co-trustee.
(8) 490 of the Shares reported as beneficially owned by Mr. Cardy are owned
by his wife. Mr. Cardy disclaims beneficial ownership of such Shares.
(9) 735 of the Shares reported as beneficially owned by Mr. Hughes are held
in an irrevocable trust, of which his wife is trustee, for the benefit of
their grandchildren. Mr. Hughes disclaims beneficial ownership of such
Shares.
(10) 42,629 of the Shares reported as beneficially owned by Mr. Lotman are
owned by his wife. Mr. Lotman disclaims beneficial ownership of such
Shares.
(11) 200 of the Shares reported as beneficially owned by Mr. Lynett are owned
by his wife. 8,921 of the Shares reported as beneficially owned are
registered in the name of his children, as to which Mr. Lynett disclaims
beneficial ownership.
BENEFICIAL OWNERSHIP OF COMMON STOCK
Information concerning the beneficial ownership of CoreStates Common Stock
by directors is set forth above opposite the name of each director and in the
Notes to Nominee and Continuing Director Information.
The following table shows, as of February 20, 1997, the number of shares of
CoreStates Common Stock beneficially owned, including shares which may be
purchased through unexercised options, by the executive officers of CoreStates
named in the Summary Compensation Table on page 15 except in respect to Mr.
Larsen whose share ownership is reported above in the information concerning
directors:
<TABLE>
<S> <C>
Charles L. Coltman III 336,150 Shares
Charles P. Connolly, Jr. 167,598 Shares
Robert N. Gilmore 4,726 Shares
Rosemarie B. Greco 231,035 Shares
</TABLE>
At February 20, 1997, the directors and executive officers of CoreStates as
a group (21 persons) beneficially owned 7,035,477 shares of CoreStates Common
Stock which represents approximately 3.28% of all outstanding shares. Mr.
George Strawbridge, Jr. owned approximately 2.40% of the outstanding shares.
No other director or officer beneficially owned more than 1% of the
outstanding shares.
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Included in the share amounts shown are 3,867 shares held for Mr. Coltman, 5
shares held for each of Mr. Connolly, Mr. Gilmore and Ms. Greco and 14,260
shares held for other executive officers (other than Mr. Larsen) as a group by
CoreStates Bank, N.A., as trustee under the CoreStates Employee Stock
Ownership and Savings Plan. Also included are options to acquire shares
(exercisable immediately or within 60 days after February 20, 1997) held by:
Mr. Coltman--295,670; Mr. Connolly--146,433; Mr. Gilmore--0; Ms. Greco--
187,142 and the other executive officers (other than Mr. Larsen) of CoreStates
as a group--162,858. The named individuals have sole voting and investment
powers with respect to the shares owned.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of February 20, 1997, the following persons are known to CoreStates to be
the beneficial owners of more than five percent of CoreStates' Common Stock.
In preparing the table shown below, CoreStates has relied, without further
investigation, on the information contained on the copy of the Schedule 13G
delivered to it, which was filed jointly by the respective reporting persons
with the SEC under the Securities and Exchange Act of 1934. The numbers shown
on the table should be interpreted in light of the related footnotes.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP CLASS
------------------- ----------------------- ----------
<S> <C> <C>
The Capital Group Companies, Inc./(1)/...... 14,106,670/(2)/ 6.3%/(2)/
Capital Research and Management Company
333 South Hope Street
Los Angeles, CA 90071
</TABLE>
- --------
(1) The shares reported by The Capital Group Companies, Inc. relate to those
attributable to the following two wholly-owned operating subsidiaries,
including the shares reported by Capital Research and Management Company
("Capital Research") on a Schedule 13G filed with the Securities and
Exchange Commission: (i) Capital Research, an Investment Adviser
registered under Section 203 of the Investment Advisers Act of 1940; and
(ii) Capital Guardian Trust Company, a Bank as defined in Section 3(a)(6)
of the Exchange Act.
(2) The Capital Group Companies report sole voting power as to 170 shares and
sole dispositive power as to 14,106,670 shares. These shares do not
include any shares as to which Capital Research reports sole voting power,
but do include 14,106,500 shares as to which Capital Research reports sole
dispositive power. Capital Research is the beneficial owner of 14,106,500
shares as a result of acting as investment adviser to various investment
companies registered under Section 8 of the Act. Beneficial ownership is
disclaimed by the reporting persons pursuant to Rule 13d-4 of the Exchange
Act.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires CoreStates' officers and
directors, and persons who own more than ten percent of a registered class of
CoreStates' equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). Officers,
directors and greater than ten-percent shareholders are required by SEC
regulation to furnish CoreStates with copies of all Section 16(a) forms they
file. There are no ten percent shareholders of CoreStates' equity securities.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, CoreStates believes that, for the period January
1, 1996 through December 31, 1996, all filing requirements applicable to its
officers and directors were complied with, except for one late filing of a
Form 4 regarding one transaction for Mr. Jones; a late filing of a Form 3 for
Mr. G. Strawbridge; a late filing of a Form 4 regarding one transaction for
Mr. G. Strawbridge; and a late filing of a Form 4 regarding one transaction
for Mr. Lynett.
7
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DIRECTORS' MEETINGS, COMMITTEES AND COMPENSATION
In 1996, eight meetings of the Board of Directors of CoreStates were held.
Each incumbent director who served as a director of CoreStates during 1996,
with the exception of Mr. Pugh, who resigned his directorship on December 31,
1996 because of a conflict with the CoreStates Board calendar, attended more
than 75% of the aggregate number of meetings of the Board of Directors of
CoreStates and of the Committees of the Board on which each such director
served. The Board of Directors of CoreStates has certain standing committees
including an Audit Committee, a Human Resources Committee, a Corporate
Governance Committee, an Executive Committee, and an Investment and Funding
Committee, the membership and functions of each of which are described below.
During the first quarter of 1996 the membership of the Audit Committee
consisted of Dr. McFate and Messrs. Hughes, M. Miller, Preston (Chairperson)
and Shane; membership of The Human Resources Committee consisted of Messrs.
Lotman, M. Miller, Preston, Smith (Chairperson) and P. Strawbridge; membership
of the Corporate Governance Committee consisted of Messrs. Hughes
(Chairperson), Jones, J. Miller, M. Miller and Dr. McFate; membership of the
Executive Committee consisted of Dr. McFate and Messrs. Butler, Hughes, Larsen
(Chairperson), J. Miller and Preston; and membership of the Investment and
Funding Committee consisted of Messrs. Butler, J. Miller (Chairperson), Shane,
Smith and Sorgenti. Board and committee membership changed after the first
quarter of 1996 due to the merger with Meridian. Following April 16, 1996, the
membership of the committees was as set forth below:
The Audit Committee from April 16, 1996 forward consisted of Dr. McFate
(Chairperson) and Messrs. Cardy, Hughes, and M. Miller. During 1996, the Audit
Committee held four meetings. The functions of the Audit Committee include:
review and examination of detailed reports of the internal auditors for
CoreStates including reports on the fiduciary activities of banking
subsidiaries; periodic meetings with the internal auditors and credit review
personnel; review of reports of regulatory agencies having jurisdiction over
CoreStates and certain banking and other subsidiaries and signing of such
reports on behalf of the Board of Directors; evaluation of internal accounting
controls for CoreStates and for the management of the fiduciary activities of
banking subsidiaries; recommending engagement and continuation of engagement
of independent auditors; and meetings with, and receiving and considering
recommendations of, independent auditors of CoreStates.
The Human Resources Committee from April 16, 1996 forward consisted of Ms.
von Seldeneck (Chairperson), and Messrs. Cardy, Lotman, M. Miller, Smith, and
Seabrook. Mr. Smith resigned from the committee in October. During 1996, the
Human Resources Committee held five meetings. The Human Resources Committee's
function is to: evaluate the performance of the Chief Executive Officer of
CoreStates and report its assessment to the full Board of Directors; review,
approve and recommend to the full Board changes in base compensation for
senior officers of CoreStates and its banking subsidiaries; review, approve
and recommend to the full Board material changes in CoreStates' benefit plans
which significantly affect CoreStates' liabilities or the benefits provided to
participants; administer the Incentive Compensation Plan for CoreStates
Financial Corp and Participating Subsidiaries and the Long-Term Incentive
Plan; review annually the salary budget with respect to CoreStates and its
banking subsidiaries; review CoreStates' management development plans; and
review other compensation and benefit plans of CoreStates and its
subsidiaries.
The Corporate Governance Committee from April 16, 1996 forward consisted of
Messrs. Jones (Chairperson), Lotman, Lynett, Seabrook, G. Strawbridge and Ms.
von Seldeneck. During 1996 the Corporate Governance Committee held two
meetings. The Corporate Governance Committee's function is to make
recommendations to the full Board of Directors with respect to: nominees for
election as director at the Annual Meeting of shareholders; nominees to fill
Board vacancies between annual shareholders' meetings; the composition of
membership of the various standing committees of the Board of Directors of
CoreStates; and other selected corporate governance matters.
8
<PAGE>
The Investment and Funding Committee from April 16, 1996 forward consisted
of Messrs. Smith (Chairperson), Lynett and Pugh. In October 1996 Mr. Smith
resigned and Dr. McFate and Mr. G. Strawbridge joined the Investment and
Funding Committee, with Mr. Lynett being named Chairperson. The Investment and
Funding Committee met five times during 1996. The Committee exercises general
supervision over the investment portfolio and is responsible for the approval
of policies and general supervision of the asset/liability management
activities of CoreStates and its subsidiary banks. The Committee also
exercises primary oversight responsibility for certain CoreStates'
subsidiaries.
The Executive Committee from April 16, 1996 forward consisted of Messrs.
Larsen (Chairperson), Hughes, McCullough, Pugh, Smith and Dr. McFate. During
1996 the Executive Committee held three meetings. The primary functions of the
Executive Committee include to act on behalf of the Board of Directors in
between meetings; to provide the initial forum for discussion of management's
major policy recommendations; oversight responsibility for the processing
companies; and preliminary review of merger and acquisition activity.
The By-laws of CoreStates provide that a shareholder may nominate a director
at the Annual Meeting only if written notice (the "Notice") of such
shareholder's intent is given by the shareholder and received by the Secretary
of CoreStates not less than forty-five days prior to the date fixed for the
Annual Meeting. The Notice shall contain or be accompanied by (a) the name and
residence of such shareholder; (b) a representation that the shareholder is a
holder of CoreStates' voting stock and intends to appear in person or by proxy
at the meeting to nominate the person or persons specified in the Notice; (c)
such information regarding each nominee as would have been required to be
included in a proxy statement filed pursuant to Regulation 14A of the rules
and regulations established by the Securities and Exchange Commission under
the Exchange Act (or pursuant to any successor act or regulation) had proxies
been solicited with respect to such nominee by the management or Board of
Directors of CoreStates; (d) a description of all arrangements or
understandings among the shareholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which such nomination(s)
are to be made by the shareholder; and (e) the consent of each nominee to
serve as director of CoreStates if so elected.
Prior to April 16, 1996 the following committees also existed: Corporate
Community Development Committee, Asset Management and Trust Committee, and
Banking Related Committee.
DIRECTORS' COMPENSATION
Directors who are also officers of CoreStates or its subsidiaries do not
receive any fees for Board or Committee meetings. For service during the first
quarter of 1996 as a member of the Board of Directors of CoreStates, each
director receiving fees was paid a fixed sum of $3,750, the first quarter
retainer, and a fee of $1,000 for attendance at each meeting of the Board of
Directors of CoreStates and, as applicable, each meeting of all committees of
the Board of Directors and certain meetings attended at the request of
CoreStates. In addition, a fixed sum of $2,000 was paid during the first
quarter of 1996 to the Chairman of the Audit Committee, and $250 to the
Chairman of each other Committee of the Board of Directors. Each member of the
Audit Committee was paid the first quarter's retainer of $1,250 in addition to
attendance fees.
In April 1996 the fees for non-employee directors were changed to provide an
annual retainer of $32,500 in a fixed sum, in addition to the 200 shares of
Common Stock of CoreStates pursuant to the Stock Compensation Plan for Non-
Employee Directors. Meeting fees were reduced to $500 for each meeting of the
Board of Directors and each meeting of any Committee of the Board of
Directors. The Chairman of the Audit Committee continued to receive an annual
fixed sum of $8,000 and the annual fixed sum paid to the Chairman of each
other Committee of the Board of Directors was changed to $5,000. The $5,000
annual fixed sum paid to each member of the Audit Committee remains unchanged.
Directors of CoreStates who were also directors of CoreStates Bank, N.A.
("CBNA"), received for services rendered to CBNA during the first quarter of
1996, the first quarter's 1996 retainer of $1,875 and a fee of $750
9
<PAGE>
for attendance at each meeting of the CBNA Board of Directors and, as
applicable, each meeting of all Committees of the CBNA Board of Directors.
When there was a joint meeting of a CoreStates committee and a CBNA committee,
a single fee was applicable (which was the higher of the two fees), except for
joint meetings of the Audit Committees where both attendance fees are paid. In
addition, during the first quarter of 1996, the sum of $500 was paid to the
Chairman of the CBNA Audit Committee and $250 to the Chairman of each other
Committee of the CBNA Board of Directors. These fees were in addition to those
fees described above paid for services to CoreStates.
In April 1996 the fees for directors of CBNA were changed to provide an
annual retainer of $15,000. The fee for attendance at each meeting of the
Board of Directors of CBNA and, as applicable, each meeting of all Committees
of the Board of Directors of CBNA was reduced to $500. The annual retainer
paid to the Chairman of the CBNA Audit Committee was increased to $5,000 and
the annual retainer paid to the Chairman of each other Committee was increased
to $2,500. Each member of the Audit Committee receives an annual retainer of
$2,500. As of April, 1996 there were no CBNA Directors who were also Directors
of CoreStates.
During 1996 Directors of CoreStates who were directors of CBNA regional
advisory boards received an honorarium of $1,000 to be paid in lieu of
retainer and attendance fees.
Directors of CoreStates who were also directors of New Jersey National
Corporation ("NJNC") and New Jersey National Bank ("NJNB") received for
services rendered to such entities in 1996 a fixed sum of $5,000 and a fee of
$750 for attendance at each concurrent meeting of the Boards of Directors of
NJNC and NJNB and, as applicable, each meeting or concurrent meeting of all
committees of the Boards of Directors. These fees were in addition to those
fees described above paid for services to CoreStates.
Under the Deferred Compensation Plan for Directors of CoreStates and CBNA
(the "Directors' Deferred Plan"), directors of CoreStates and CBNA may elect
prior to commencement of each term of service to defer payment of all or part
of their directors' compensation. Amounts deferred are payable, as elected by
the director, at the termination of the respective director's service to
CoreStates or CBNA, the reaching of age 65, death, or a specified date, such
payment to be made in a lump sum, in up to 10 annual installments or other
method. Amounts deferred are credited to an unfunded directors' deferred
compensation account. Amounts deferred after April 1, 1988 were credited with
interest at an annual rate equal to 60% of the prime rate of CBNA (the "CBNA
Prime Rate"). Beginning January 1, 1989, interest has been credited on
deferrals at a rate determined by multiplying the CBNA Prime Rate by a decimal
amount equal to 1 minus 118% of the highest marginal corporate tax rate for
Federal income tax purposes. Amounts deferred on or before April 1, 1988
receive earnings based on one or more of three hypothetical investments as
selected quarterly by each affected participant. These provide yields equal to
the return on, and appreciate or depreciate to the same extent as, funds
invested in the CoreStates Bond Fund, the CoreStates Liquidity Fund and the
CoreStates Equity Fund, each of which is a collective investment fund managed
by CoreStates Investment Advisers, Inc. The right to receive future payments
under the Directors' Deferred Plan is an unsecured claim against the general
assets of CoreStates or CBNA, as applicable. Payments of deferred compensation
may be made only in cash.
Additionally, in 1980, Hamilton Bank ("Hamilton") established a directors'
deferred compensation plan whereby participating directors of Hamilton could
elect to forego certain directors' fees or other compensation for a five-year
period, from January 1, 1980 through December 31, 1984, in return for the
undertaking of Hamilton to pay each participating director a specified amount
in 120 equal payments beginning at age 65 or 70, or at death, if earlier.
Hamilton has obtained life insurance, of which Hamilton is the beneficiary, on
each participating director in an amount which will cover Hamilton's
obligation to pay each such director. The directors participating in this plan
are Carlton E. Hughes and Marlin Miller, Jr. Total payments to be made over
the 10 year distribution period or at death, if earlier, to Messrs. Hughes and
Miller are $233,400 and $178,800, respectively. Amounts expensed for 1996
under the plan in respect to Messrs. Hughes and Miller were, respectively,
$14,092 and $10,795.
10
<PAGE>
Mr. McCullough also receives compensation pursuant to a consulting agreement
with CoreStates dated April 8, 1996. Under the terms of this agreement, Mr.
McCullough is to be paid 26 equal installments of $38,461.53 for consulting
services including communication with CoreStates and former Meridian Bank
customers; advising the top management of CoreStates as requested; and the
representation of CoreStates with public bodies, industry associations and the
like. The Consulting Agreement provides that Mr. McCullough shall make himself
available for a maximum of 200 days during the consulting period, for a
maximum of 10 hours per day. The consulting relationship terminates
automatically on June 30, 1997, unless earlier terminated by CoreStates for
cause. The agreement is subject to non-compete and similar provisions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CoreStates' subsidiaries have from time to time made loans to some officers
and directors of CoreStates and to companies with which they are associated.
Such loans were made in the ordinary course of business, on substantially the
same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with others, and did not involve more
than normal risk of collectibility or present any unfavorable features.
EXECUTIVE COMPENSATION
HUMAN RESOURCES COMMITTEE REPORT
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS FOR 1996
The Human Resources Committee of the Board of Directors (the "Committee") is
composed entirely of independent, outside Directors, none of whom is a current
officer or employee of CoreStates or any of its subsidiaries. The Board of
Directors has delegated to the Committee the responsibility for establishing
and administering CoreStates' executive compensation plans. The Committee
consults with outside compensation consultants, attorneys and other
specialists. The Committee's unanimous approval of CoreStates' executive
compensation programs in 1996 was based on each Committee member's judgment
and evaluation of the various factors underlying the overall compensation
philosophy described below.
Compensation policies for executive officers are intended to further the
earnings of CoreStates and facilitate securing, retaining and motivating
management employees of high caliber and potential. The persons eligible to
receive awards under these policies are officers and other employees of
CoreStates and its subsidiaries who are in positions in which their decisions,
actions and counsel significantly impact upon the short and long-term goals
and strategies of CoreStates.
There are three components to executive compensation: base salary, annual
incentive awards, and long-term incentive awards.
BASE SALARIES
Base salaries for executives are competitive with incumbent salaries for
peer positions in CoreStates' comparator group. The comparator group consists
of 14 companies within the super-regional banking industry that have market,
geographic and size similarities to CoreStates. All of these banks are
contained within the Keefe, Bruyette, & Woods 50 Index, presented in the
Comparative 5 Year Cumulative Total Return graph on page 19 of this proxy
statement. CoreStates generally targets base salaries at or near the median or
average rate paid for each job within the group. Published compensation
surveys are utilized to monitor competitive pay levels, in addition to
compensation information reported in competitors' proxy statements.
ANNUAL INCENTIVE AWARDS
Executive officers participate in an annual cash award program, the
Incentive Compensation Plan for CoreStates Financial Corp and Participating
Subsidiaries. The Human Resources Committee of the Board of Directors
determines the awards granted under the Incentive Compensation Plan. Award
opportunity is based on the individual executive's grade level and a mix of
predetermined corporate and individual performance goals.
11
<PAGE>
CORPORATE PERFORMANCE
One-hundred percent of the annual award for the Chief Executive Officer and
for the other four most highly compensated executive officers of CoreStates is
based on corporate performance. Eighty percent of the annual award for
eligible officers other than the named executive officers is based on
corporate performance measured the same way. For 1996 this component of the
Incentive Compensation Plan was paid at 80% of the payout target. Three
measures are used as indices of corporate performance: net income after
capital charge (NIACC), earnings per share (EPS), and progress toward
achieving cultural change objectives.
NIACC measures both the quantity and the quality of corporate earnings. If
CoreStates earns more than its required return (and therefore has a positive
NIACC) shareholder value is created. The calculation of NIACC requires three
pieces of data: net income, the amount of capital employed, and the required
return on that capital. The corporate required return of 13% is a risk-
adjusted rate of return related to investors' alternatives in the marketplace.
Because CoreStates has an unusually high equity to asset ratio, NIACC is
normalized for a 5% equity to asset ratio.
Growth in earnings per share ("EPS") is a key measure of financial strength
considered by the external financial community. The use of this measure
facilitates external comparison and is easily understood.
Cultural change improvement is measured based on progress in advancing the
corporate culture with reference to: 1) CoreValues--People, Performance,
Integrity, Teamwork, Diversity, and Communication 2) customer focus 3)
commitment to quality 4) leadership 5) growth and learning 6) employee
satisfaction 7) productivity, and 8) alignment measures. A combination of
quantitative and qualitative measures is used to track results against these
objectives including several routinely tracked statistics, such as the
diversity of our workforce at all levels in CoreStates' organization, upward
and lateral mobility of our people, employee retention, training and
development participation, utilization of vendors and services owned by women
and people of color, employee survey results, and other pertinent statistics.
Quantitative progress on attaining improved implementation of corporate
cultural change is measured through a survey of all CoreStates employees.
INDIVIDUAL PERFORMANCE
For eligible officers other than for the named executive officers, twenty
percent of the annual award is based on individual performance. Individual
performance goals are designed to reflect a balance between attainable and
"stretch" objectives and are specific to each plan participant. Individual
performance objectives are established at the beginning of the year based on
the functions and responsibilities of each executive's position (for example,
sales targets, income goals, cost reduction objectives, etc.). Also included
in the measure of individual performance are objectives that champion
CoreValues and reflect or measure managerial performance. These people-focused
objectives count for at least one-third of individual performance.
Target awards are based on a percentage of the midpoint of the salary grade
of each individual. Corporate and individual executive performance are
evaluated, and payout levels are determined independently at zero or 50 to
150% of the payout targets.
LONG-TERM INCENTIVE PLAN
This plan is designed to support the long-term strategic goals of CoreStates
by providing equity opportunities for individual executives based on their
level of responsibility. Ownership aligns the interests of participating
officers and executives with the interests of CoreStates' shareholders and
ties a significant portion of senior officer compensation to shareholder
returns. Under Ownership Guidelines developed in 1993 for achievement by 1998
and approved by the Human Resources Committee, the suggested number of shares
to be owned varies according to the executive's salary grade, and ranges from
one times salary range midpoint for Executive Vice Presidents up to 2.5 times
salary range midpoint for the CEO. Stock held through the CoreStates Employee
Stock Ownership and Savings Plan is counted toward the guidelines, but
unexercised stock options are not.
12
<PAGE>
The primary award vehicles for 1996 were incentive stock options (ISOs) and
non-qualified stock options (NQSOs). The first $100,000 of each stock option
award was granted in the form of ISOs, with the remaining portion granted in
NQSOs. Stock option grants provide the grantees the opportunity to acquire
common stock at a fixed price (the fair market value on the date of the grant)
for a specified period of time (ten years).
The practice of CoreStates is to keep long-term awards relatively constant
from year-to-year. Stock option plans provide upside earnings potential
through increases in stock value over the long term. Target awards for stock
option grants are expressed as a percentage of the salary range midpoint for
each participant. Actual awards may range from 75% up to 125% of the target
award based on a present assessment of the long-term value of the
participant's ongoing performance contribution to CoreStates. In determining
these grants, the Human Resources Committee did not specifically consider the
amount and value of stock currently held by individuals. For 1996 stock option
awards averaged 100% of target for all participants.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for compensation over $1 million paid to the
Chief Executive Officer and the other four most highly compensated individuals
who are executive officers as of the end of the year. Qualifying performance-
based compensation is not subject to the deduction limit if certain
requirements are met. While it is the Committee's policy to preserve corporate
tax deductions by qualifying compensation paid over $1 million to named
executive officers, it also maintains the flexibility to approve compensation
arrangements that it deems to be in the best interests of CoreStates and its
stockholders but which may not always qualify for full tax deductibility.
SUMMARY
Inherent in CoreStates' effort to create shareholder value are attention to
financial performance and strength, and focused recognition of CoreStates'
people as the cornerstone of the long-range competitive edge. Performance
measures support the efforts to further corporate earnings and achieve a
positive corporate culture. The ideal culture values all members of the
workforce, maintains customer focus, and achieves excellence through
commitment to quality.
HUMAN RESOURCES COMMITTEE'S BASES FOR DETERMINING
THE COMPENSATION OF THE CEO FOR 1996
The CEO's (Chief Executive Officer) base salary, and annual and long-term
incentive award components are consistent with the spirit and objectives of
CoreStates' executive compensation program as follows:
BASE SALARY
The CEO's performance evaluation is a function of CoreStates' financial
performance against goals. The initial rating is then modified as appropriate
by the overall culture/people evaluation, as well as a relative assessment of
CoreStates' performance versus its peer group. Finally, the preceding
evaluation is further modified by the Board of Directors' assessment of the
CEO's performance in such areas as leadership, strategic planning,
culture/people initiatives, external relations, communication, and other
important factors. The Human Resources Committee prepared a formal evaluation
of actual results against these annual goals. The evaluation was supported by
documents citing specific reasons for the rating and included an assessment of
response to unplanned events or circumstances that required a significant
commitment of time and resources.
In the Human Resources Committee's evaluation of the CEO's performance, it
was specifically noted that his individual actions and leadership have had a
significant effect on CoreStates' overall financial and cultural change/people
value results, enhancing ongoing value to shareholders through stock
appreciation and growth in earnings available for dividends. The Committee's
overall rating of the CEO's performance for the year was
13
<PAGE>
outstanding. Although it is CoreStates' practice to target at or near the
median of the CEO's base salaries reported in the comparative group, the Human
Resources Committee has chosen to focus on total compensation rather than
solely on base pay.
ANNUAL INCENTIVE AWARD
100% of the CEO's annual incentive award is based on corporate performance.
For 1996 this was paid at 80% of target, based on NIACC, earnings per share,
and corporate culture/people objectives as described in the preceding Annual
Incentive Awards--Corporate Performance section on pages 11 and 12 of this
proxy statement section with respect to other executive officers.
An evaluation of corporate progress against the goals was reviewed and
discussed by the Human Resources Committee, who determined the final payout
levels for the CEO and the rest of the executive officers.
LONG-TERM INCENTIVE PLAN
The CEO participates in the Long-Term Incentive Plan described above under
"Compensation Policies for Executive Officers for 1996". In February 1996 the
CEO was granted options based on 100% of the target for his position.
HUMAN RESOURCES COMMITTEE
Judith M. von Seldeneck, Chairperson
Robert W. Cardy Herbert Lotman
Marlin Miller, Jr. James M. Seabrook
14
<PAGE>
SUMMARY COMPENSATION TABLE
The following table shows, for the fiscal years ending December 31, 1994,
1995 and 1996, the cash compensation paid by CoreStates and its subsidiaries,
as well as certain other compensation paid or accrued for those years, to the
chief executive officer and the other four most highly compensated executive
officers of CoreStates (collectively, the "Named Executives").
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM
-------------------- ---------------
AWARDS PAYOUTS
NAME AND OTHER ANNUAL ------- ------- ALL OTHER
PRINCIPAL SALARY BONUS COMPENSATION OPTIONS LTIP COMPENSATION
POSITION YEAR ($)* ($) ($)** (#) ($)*** ($)****
--------- ---- ------- ------- ------------ ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Terrence A.
Larsen 1996 755,385 335,808 3,277 102,581 0 37,769
Chairman and
Chief 1995 687,981 575,683 3,396 148,750 458,544 33,750
Executive Offi-
cer 1994 670,692 527,710 2,578 119,000 293,543 33,535
Rosemarie B.
Greco 1996 423,846 246,912 0 52,713 0 21,192
President 1995 387,303 304,344 2,745 76,375 339,073 19,000
1994 358,077 278,982 2,449 91,650 0 16,923
Charles L.
Coltman III 1996 413,846 177,520 2,558 52,713 0 20,692
Vice Chairman 1995 387,308 304,344 0 76,375 127,152 19,000
1994 297,692 278,982 0 91,650 66,969 14,885
Charles P.
Connolly, Jr. 1996 295,385 105,632 962 24,164 0 14,769
Vice Chairman 1995 275,192 155,866 957 35,125 84,758 13,500
CoreStates
Bank, N.A. 1994 238,269 142,877 2,852 45,150 50,203 11,913
Robert N. Gil-
more***** 1996 268,462 68,852 0 20,557 0 13,423
Executive Vice
President 1995 265,000 118,037 0 29,625 127,152 13,000
and Chief
Processing 1994 246,154 108,200 0 35,500 66,969 12,308
Services
Officer
</TABLE>
- --------
*Annual Salary is reported for the calendar year
**Other Annual Compensation includes Financial Planning
***Performance Units Awards.
. No remaining performance unit awards to be paid out.
. Half of award value net of taxes is paid in cash, the other half in
stock.
****All other compensation consists of compensation from savings and
retirement plans as follows:
. The CoreStates Employee Stock Ownership and Savings Plan provides
investment choices and company matches to individual contributions.
Corporation contributions were as follows:
1996: Larsen--$7,500, Greco--$7,500, Coltman--$7,500, Connolly--$7,500,
Gilmore--$7,500
1995: Larsen--$7,500, Greco--$7,500, Coltman--$7,500, Connolly--$7,500,
Gilmore--$7,500
1994: Larsen--$7,500, Greco--$6,519, Coltman--$7,500, Connolly--$7,500,
Gilmore--$7,500
. The 401 Excess Plan was adopted in 1992. It mirrors the CoreStates
Employee Stock Ownership and Savings Plan in that it provides investment
choices and company matches for employees whose salaries are above ERISA
limits for the savings plan. Corporation contributions were:
1996: Larsen--$30,269, Greco--$13,692, Coltman--$13,192, Connolly--
$7,269, Gilmore--$5,923
1995: Larsen--$26,250, Greco--$11,500, Coltman--$11,500, Connolly--
$6,000, Gilmore--$5,500
1994: Larsen--$26,035, Greco--$10,404, Coltman--$7,385, Connolly--$4,413,
Gilmore--$4,808
*****Resigned January, 1997.
15
<PAGE>
OPTION GRANT TABLE
The following table contains information concerning the grant of stock
options to the Named Executives as of December 31, 1996:
OPTION GRANTS IN 1996*
<TABLE>
<CAPTION>
INDIVIDUAL
GRANTS
----------
OPTIONS % OF TOTAL OPTIONS EXERCISE BLACK SCHOLES
GRANT GRANTED GRANTED TO EMPLOYEES OR BASE EXPIRATION GRANT DATE
NAME DATE (#) IN 1996 PRICE DATE PRESENT VALUE**
- ---- ------- ------- -------------------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Terrence A. Larsen...... 2/20/96 102,581 5.257% $42.625 2/20/06 $653,441
Rosemarie B. Greco...... 2/20/96 52,713 2.701% $42.625 2/20/06 335,782
Charles L. Coltman III.. 2/20/96 52,713 2.701% $42.625 2/20/06 335,782
Charles P. Connolly,
Jr. ................... 2/20/96 24,164 1.238% $42.625 2/20/06 153,925
Robert N. Gilmore....... 2/20/96 20,557 1.053% $42.625 2/20/06 130,948
</TABLE>
- --------
*Options reported in the table above are a combination of incentive and non-
qualified stock options. All grants become exercisable one year from the
date of grant and must be exercised during employment except in the case of
death, disability, retirement or involuntary termination. The contractual
term of each option is ten years.
**Results produced by the Black Scholes assumptions:
Risk-free rate of return--5.73%
Dividend yield--4.0%
Expected Time of Exercise--6 years
Market Price at Grant--$42.625
Expected Volatility--0.155
OPTION EXERCISES AND YEAR-END TABLE
The following table sets forth information with respect to the Named
Executives, concerning the exercise of options during 1996 and unexercised
options as of December 31, 1996:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION VALUE
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
IN-THE-MONEY
NUMBER OF OPTIONS
UNEXERCISED AT 12/31/96
SHARES OPTIONS AT ($)
ACQUIRED 12/31/96 (#) ($51.875/SHARE)*
ON VALUE --------------- -----------------
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- ---- -------- ----------- --------------- -----------------
<S> <C> <C> <C> <C>
Terrence A. Larsen...... 362,682 $11,819,740 369,550/102,581 8,955,719/948,874
Rosemarie B. Greco...... 96,078 2,669,302 134,429/52,713 3,328,316/487,595
Charles L. Coltman III.. 38,134 963,789 242,957/52,713 6,253,664/487,595
Charles P. Connolly,
Jr. ................... 19,060 583,246 122,269/24,164 3,142,161/223,517
Robert N. Gilmore....... 161,805 3,861,244 0/20,557 0/190,152
</TABLE>
- --------
*Values for Larsen, Greco, Coltman, Connolly and Gilmore respectively
represent the cumulative impact of stock options granted over 10, 6, 10,
10, and 10 years respectively. One stock option grant was awarded per named
executive in each year an award was made to that executive, with the
exception of 1994, in which R. Greco, C. Coltman, C. Connolly and R.
Gilmore each received a second grant, on 8/22/94.
16
<PAGE>
PENSION BENEFITS
CoreStates maintains the CoreStates Retirement Plan, a tax-qualified defined
benefit plan, which generally covers employees of CoreStates and its
participating subsidiaries and affiliates. The Retirement Plan is funded
solely by contributions made by CoreStates on an actuarial basis to the
Retirement Plan Trust. The normal retirement age under the Retirement Plan is
age 65; however, participants may elect early retirement (in some
circumstances without actuarial reduction) if certain requirements are met.
For credited service through December 31, 1996, the Retirement Plan benefit
formula is 1.5% of Final Average Compensation ("FAC") up to Social Security
Covered Compensation ("SSCC") plus 2.0% of FAC over SSCC, multiplied by years
of credited service to a maximum of 25; plus 1.0% of FAC, multiplied by years
of credited service over 25 to a maximum of 40. (For years of credited service
after December 31, 1996, the Retirement Plan formula has been reduced to 1.25%
of FAC up to SSCC plus 1.75% of FAC over SSCC, multiplied by years of credited
service to a maximum of 25; plus 0.75% of FAC, multiplied by years of credited
service over 25 to a maximum of 40).
The Final Average Compensation used in calculating the qualified Retirement
Plan benefit is the annual average of the highest 60 consecutive months of
base pay (excluding all incentive and other non-salary cash payments) during
the last ten years of employment. The Final Average Compensation figure
corresponds to the elements summarized in the Annual (Salary) Compensation
shown in the Summary Compensation Table on page 15 of this proxy statement.
The Internal Revenue Code (the "Code") limits the amount of benefits which
tax-qualified plans such as the Retirement Plan can pay to officers and other
highly compensated employees. The CoreStates Financial Corp Supplemental
Retirement Plan (the "CoreStates Supplemental Plan") provides benefit amounts
which cannot be paid from the qualified Retirement Plan because of such Code
limits. If an employee defers salary, the CoreStates Supplemental Plan also
pays the difference between what the employee would have gotten in the
qualified plan had he or she not deferred salary and the qualified plan
benefit excluding the deferred salary. (Certain key executives who came from
First Pennsylvania are covered under the First Pennsylvania Retirement Benefit
Supplemental Plan, described below, instead of the CoreStates Supplemental
Plan.)
The following table shows, for various periods of credited service and
compensation levels, the amount of straight life annuity benefits produced by
the Retirement Plan benefit formula for a person retiring at normal retirement
age in 1996 (with SSCC of $27,576). The table reflects the combined benefits
payable under the qualified Retirement Plan and the CoreStates Supplemental
Plan (or Benefit A of the First Pennsylvania Retirement Benefit Supplemental
Plan, described below).
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION FOR REPRESENTATIVE YEARS OF
FINAL CREDITED SERVICE
AVERAGE ----------------------------------------------------------------------------
COMPENSATION 15 20 25 30 35
- ------------ -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$125,000 $ 35,432 $47,242 $59,053 $65,303 $71,553
150,000 42,932 57,242 71,553 79,053 86,553
175,000 50,432 67,242 84,053 92,803 101,553
200,000 57,932 77,242 96,553 106,553 116,553
225,000 65,432 87,242 109,053 120,303 131,553
250,000 72,932 97,242 121,553 134,053 146,553
300,000 87,932 117,242 146,553 161,553 176,553
400,000 117,932 157,242 196,553 216,553 236,553
450,000 132,932 177,242 221,553 244,053 266,553
500,000 147,932 197,242 246,553 271,553 296,553
600,000 177,932 237,242 296,553 326,553 356,553
700,000 207,932 277,242 346,553 381,553 416,553
800,000 237,932 317,242 396,553 436,553 476,553
</TABLE>
17
<PAGE>
The First Pennsylvania Retirement Benefit Supplemental Plan (The "FP
Supplemental Plan") provides selected key executive officers with retirement
benefits in addition to those provided to all eligible employees under the
Retirement Plan. The FP Supplemental Plan covers two types of retirement
benefits. Benefit A is equal to the excess of the amount that would be payable
under the Retirement Plan if it did not contain the limitation on the annual
amount of pension benefit payments or the amount of recognizable compensation
imposed by the Internal Revenue Code over the amount actually payable under
the Retirement Plan in accordance with such limitations. Benefit C is equal to
65% of the participant's average annual base salary for the five consecutive
years immediately preceding the participant's retirement or other termination
of benefit. Benefit C is then reduced by the aggregate of the following
amounts: the benefit under Benefit A, the Social Security benefit, the benefit
under the Retirement Plan, and the benefit under any retirement plan provided
by a former employer, excluding any portion of such benefit attributable to
the participant's own contributions to such plan.
As of December 31, 1996, the periods of credited service of the CoreStates'
executive officers named in the Summary Compensation Table above are as
follows:
<TABLE>
<CAPTION>
PERIOD OF CREDITED
SERVICE
-------------------
<S> <C>
Terrence A. Larsen.......................................... 18 years, 5 months
Rosemarie B. Greco.......................................... 4 years, 9 months
Charles L. Coltman III...................................... 26 years, 10 months
Charles P. Connolly, Jr. ................................... 24 years, 8 months
Robert N. Gilmore........................................... 15 years, 6 months
</TABLE>
TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
In February 1996, the Human Resources Committee of the Board of Directors
approved the terms of termination of employment contracts for the Named
Executives and certain other officers of CoreStates. Each Named Executive or
identified officer terminated (as defined in the contract) would receive
severance pay equal to two times the highest base salary and bonus during the
preceding two years. In addition each Named Executive or identified officer
would be provided with employee benefits equivalent to those benefits received
immediately prior to termination for a two year period following such
termination. Payments are limited by the provisions of Section 280G of the
Internal Revenue Code of 1986 and are offset by amounts which may be paid
under any other CoreStates severance policy. The contracts are for a three
year period from April 9, 1996.
18
<PAGE>
FIVE-YEAR SHAREHOLDER RETURN COMPARISON
The following line graph compares CoreStates' five-year cumulative total
shareholder return with the Standard & Poor's 500 Composite Index (S&P 500) and
the Keefe, Bruyette & Woods 50 Index (KBW 50) a published peer-industry index.
The KBW 50 is made up of fifty of the nation's significant banking companies,
including money-center and most major regional banks, and is considered
representative of the price performance of the nation's largest banks. Both the
S&P 500 and the KBW 50 are market-capitalization-weighted indices. The graph
assumes an initial investment of $100 and reinvestment of quarterly dividends.
Comparative 5 Year Cumulative Total Return
12/31/91 To 12/31/96
[LINE GRAPH APPEARS HERE]
Comparison of Five Year Cumulative Total Return
December 31, 1991 to 1996
CoreStates V. S&P 500 v. KBW 50
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1991 1992 1993 1994 1995 1996
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CoreStates 100 124 118 123 186 265
- --------------------------------------------------------------------------------
S&P 500 100 108 118 120 165 203
- --------------------------------------------------------------------------------
KBW 50 100 127 134 128 204 289
- --------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
APPROVAL OF THE AMENDMENT AND RESTATEMENT OF
THE STOCK COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS (1997)
(ITEM 2)
Upon the recommendation of the Human Resources Committee (the "Committee"),
the Board of Directors has adopted, subject to shareholder approval, the Stock
Compensation Plan for Non-Employee Directors (1997) (the "Directors' Plan"),
an amendment and restatement of the Stock Compensation Plan for Non-Employee
Directors (1993) (the "1993 Plan"). The major changes to the 1993 Plan are as
follows:
1. Directors of CoreStates Bank, N.A. (the "Bank") will participate in
addition to the directors of CoreStates;
2. A mandatory grant of Common Stock equal to one-half the value of the
annual retainer replaces the prior grant of 200 shares per year.
Beginning in 1998, directors will have the option to receive up to 100%
of their annual retainer paid in Common Stock.
3. 150,000 shares of CoreStates Common Stock are reserved for future
issuance pursuant to awards.
REASONS FOR THE AMENDMENTS
The Board of Directors believes that it is appropriate to more closely align
the interests of CoreStates' and the Bank's directors with the interests of
shareholders.
SUMMARY OF AMENDED AND RESTATED PLAN
The descriptions of the Directors' Plan set forth above and below are a
summary, do not purport to be complete and are qualified in their entirety by
reference to the provisions of the Directors' Plan, a copy of which is
attached hereto as Annex A.
PURPOSES
The purposes of the Directors' Plan are to further CoreStates' long-term
financial success by providing for stock awards to non-employee directors of
CoreStates and the Bank; to increase the proprietary interest of such persons
by providing further opportunity for ownership of CoreStates' Common Stock; to
more closely align the interests of such persons with the interests of
CoreStates' shareholders; to attract and retain non-employee directors of
exceptional ability; and to motivate non-employee directors to contribute to
the success of the business of CoreStates and the Bank.
ADMINISTRATION
The Directors' Plan will be administered and interpreted by the Board of
Directors of CoreStates.
PARTICIPATION
Non-employee members of the Board of Directors of CoreStates or the Board of
Directors of the Bank on or before the date of an annual meeting will
participate in the Directors' Plan.
AUTHORIZED SHARES
The aggregate number of shares of Common Stock reserved for issuance under
the Directors' Plan will be 150,000 shares, subject to adjustment as described
below.
ADJUSTMENTS
The Directors' Plan provides that the Board of Directors shall make such
equitable changes or adjustments as it deems necessary to the maximum number
or class of shares available under the Directors' Plan, and the number and
class of shares of Common Stock to be delivered thereunder in the event that
the Board of Directors determines that adjustment is appropriate in order to
prevent dilution or enlargement of the rights of participants in the event of
any reorganization, recapitalization, stock split, stock dividend, combination
of shares, merger, consolidation, spin-off or similar corporate transaction.
20
<PAGE>
DELIVERY OF SHARES OF STOCK
For each calendar year commencing with the calendar year beginning January
1, 1997, each non-employee director who is a director of CoreStates or the
Bank on or before the date of an annual meeting of shareholders shall receive
a whole number of shares of Common Stock equal in value to 50% of his or her
retainer fee payable for services as a director during such calendar year
(including any additional retainer fee payable for service as a chairperson of
a committee) in lieu of payment of such percentage of retainer fee in cash.
Such shares will be issued to each such non-employee director on June 1 of
such calendar year.
Each such share shall be valued at the average of the high and low prices of
a share of Common Stock on the Composite Tape for New York Stock Exchange
Listed Stocks, as reported in The Wall Street Journal on the last business day
preceding the stock payment date. The value of fractional shares shall be paid
in cash.
For each calendar year commencing with the calendar year beginning January
1, 1998, each non-employee director may elect to receive a whole number of
shares of Common Stock equal in value to up to 100% of his or her retainer fee
payable for services as a director during such calendar year (including any
additional retainer fee payable for serving as a chairperson of a committee)
in lieu of payment of such percentage of retainer fee in cash. Such election
may be made in incremental amounts of 5% of the total retainer fee.
TERM OF PLAN
The Directors' Plan will become effective upon approval by the shareholders
at the Annual Meeting to be held on April 15, l997. The Directors' Plan will
remain in effect until June 1, 2007, unless sooner terminated by the Board of
Directors.
AMENDMENT
The Board of Directors may alter, amend, suspend, or terminate the
Directors' Plan at any time except that no amendment which requires
shareholder approval under Pennsylvania law, under the rules of any securities
exchange on which the shares may be listed, or in order for the Directors'
Plan to continue to comply with Rule 16b-3 shall be effective unless the same
shall be approved by the requisite vote of the shareholders of CoreStates.
NEW PLAN BENEFITS
All non-employee directors of CoreStates and the Bank will participate in
the Directors' Plan. There are currently 35 non-employee directors of
CoreStates and the Bank. It is not possible to predict the number of shares of
Common Stock that will be awarded under the Directors' Plan in 1997. If the
Directors' Plan had been in effect in 1996, 11,469 shares of Common Stock
would have been awarded to all non-employee directors of CoreStates and the
Bank as a group.
ACTION BY SHAREHOLDERS
Approval of this proposal requires the affirmative vote of the holders of a
majority of the shares of CoreStates Common Stock present, either in person or
by proxy, at the Annual Meeting and entitled to vote. Since the aggregate
number of shares for which a vote "For", "Against", or "Abstain" is made will
be counted in determining the minimum number of affirmative votes required for
approval of the proposal, an abstention will have the same legal effect as a
vote "Against" the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF THE
AMENDMENT AND RESTATEMENT OF THE STOCK COMPENSATION PLAN FOR NON-EMPLOYEE
DIRECTORS (PROXY ITEM 2).
APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE LONG-TERM INCENTIVE PLAN
(1997)
(ITEM 3)
Upon the recommendation of the Human Resources Committee (the "Committee"),
the Board of Directors has adopted, subject to shareholder approval, the
Amended and Restated Long-Term Incentive Plan (1997) (the
21
<PAGE>
"Long-Term Incentive Plan"), an amendment and restatement of the Long-Term
Incentive Plan adopted in 1992 (the "1992 Plan"). The major changes to the
1992 Plan are as follows:
1. The number of shares for which options or awards may be issued under the
Long-Term Incentive Plan in any calendar year is limited to 1.5%, rather
than the previous 2%, of the issued shares of CoreStates.
2. Performance shares and performance units have been deleted from the
Long-Term Incentive Plan.
3. Awards of stock options, incentive stock options and stock appreciation
rights are capped at 1,000,000 shares of Common Stock in any calendar
year for any one participant.
4. Awards of restricted stock to all partcipants may not exceed 500,000
shares of Common Stock of CoreStates during the term of the Long-Term
Incentive Plan.
5. As newly permitted under applicable law, the Committee and the Board of
Directors are given greater discretionary authority to amend the Long-
Term Incentive Plan.
The above and the following description are a summary of the key features of
the Long-Term Incentive Plan and are qualified in their entirety by reference
to the Long-Term Incentive Plan, which is attached as Annex B to this Proxy
Statement.
PURPOSE AND ELIGIBLE PARTICIPANTS
The Long-Term Incentive Plan is intended to support the business goals of
CoreStates and facilitate securing, retaining and motivating key employees of
high caliber and potential. The persons eligible to receive awards under the
Long-Term Incentive Plan are officers and other key employees of CoreStates
and its subsidiaries who are in positions in which their decisions, actions
and counsel significantly contribute to the success of the Corporation.
Directors who are not officers or key employees at the time of award are not
eligible for awards under the Long-Term Incentive Plan.
SHARES AVAILABLE
The number of shares of CoreStates Common Stock for which options, rights or
other awards may be granted under the Long-Term Incentive Plan during any
calendar year may not exceed in the aggregate 1.5% of the issued shares of the
Common Stock of CoreStates including treasury shares, determined as of the
first day of such calendar year. Any unused portion of this percentage limit
in any calendar year shall be carried forward and available for awards in
succeeding calendar years. Shares of stock subject to an award under the Long-
Term Incentive Plan that is cancelled, expired, forfeited, settled in cash or
otherwise terminated without a delivery of shares to the participant,
including the number of shares withheld or tendered in payment of any exercise
or purchase price of an award or taxes relating to an award will again be
available for awards under the Long-Term Incentive Plan. Notwithstanding such
amount, the number of shares of Common Stock which may be issued pursuant to
incentive stock options may not exceed in the aggregate 4,000,000 such shares.
Also, the number of shares available under the Long-Term Incentive Plan is
subject to adjustment in the event of stock splits, merger and other similar
events.
ADMINISTRATION OF THE PLAN
The Long-Term Incentive Plan shall be administered by a committee of not
less than two directors of CoreStates, each of whom qualifies as both a "Non-
employee director" under Rule 16(b)-3 of the Exchange Act, and also as an
"outside director" as that term is defined under Section 162(m) of the
Internal Revenue Code of 1986, as amended. The Committee has extensive
authority to determine the employees to whom and the dates on which awards are
made and the form, amount, size and other terms and provisions of each option,
right or award granted under the Long-Term Incentive Plan. The Committee may
also make rules, regulations, interpretations and determinations not
inconsistent with the Long-Term Incentive Plan in respect to any restrictions
or conditions, accelerations of rights, exercisability, extensions of post
termination rights, waivers of performance conditions, deferrals of awards,
tax withholding and other matters and may delegate certain responsibilities
under the Long-Term Incentive Plan to other persons except its authority in
regard to benefits for persons who are officers or directors of CoreStates
under Section 16 of the Exchange Act.
22
<PAGE>
FORMS AND PROVISIONS OF AWARDS
The Committee may grant from time to time long-term incentive awards in the
form of non-qualified stock options, incentive stock options, stock
appreciation rights, or restricted stock, separately or in combination, as it
deems appropriate and in the best interest of CoreStates under the
circumstances. Payment for Common Stock acquired through exercise of a non-
qualified stock option or an incentive stock option may be made in cash,
Common Stock at fair market value, or a combination thereof, as the Committee
may determine. Except for awards of restricted stock, which are subject to a
cap of 500,000 shares of Common Stock over the life of the Long-Term Incentive
Plan, in each calendar year during which the Long-Term Incentive Plan is in
effect, the number of stock options, incentive stock options or stock
appreciation rights granted to any one participant may not exceed 1,000,000
shares of Common Stock of CoreStates for each type of such award, subject to
adjustment in the event of stock splits, merger, and other similar events. A
further description of the Plan's provisions concerning the various forms of
awards under the Long-Term Incentive Plan is set forth below.
NON-QUALIFIED STOCK OPTIONS
The option price of stock options and the period during which each option
can be exercised is fixed by the Committee, but in no case can the price be
less than 100% of the market value of the shares at the time the option is
granted. No option may be exercised later than ten years after the date of
grant and must be exercised during employment with CoreStates or its
subsidiaries or at such other time determined by the Committee except in the
case of death, disability, retirement or involuntary separation without cause.
INCENTIVE STOCK OPTIONS
The option price and the period during which each incentive stock option can
be exercised is fixed by the Committee, but in no case can the price be less
than 100% of the market value of the shares at the time the incentive stock
option is granted. No incentive stock option shall be exercisable later than
ten years after the date of grant and must be exercised during employment with
CoreStates or its subsidiaries or at such other time determined by the
Committee except in the case of death, disability, retirement or involuntary
separation without cause.
STOCK APPRECIATION RIGHTS
Stock Appreciation Rights ("SARs") may be granted, subject to such terms and
conditions as are determined by the Committee, and may be in connection with a
previously or contemporaneously granted stock option or unrelated to a stock
option. SARs entitle the grantee to receive solely in cash upon exercise the
excess of (a) the fair market value of a specified number of shares of Common
Stock at the time of exercise, as determined by the Committee, over (b) a
specified price which shall not be less than 100% of the fair market value of
the stock at the time the SARs were granted, or if connected with a previously
issued stock option, not less than 100% of the fair market value of the stock
at the time such option was granted. SARs may not be exercised later than ten
years after the date of grant and must be exercised during employment with
CoreStates or its subsidiaries or at such other time determined by the
Committee except in the case of death, disability, retirement or involuntary
separation without cause.
RESTRICTED STOCK
Restricted stock may be granted in such form as the Committee shall approve
from time to time. Shares awarded pursuant to restricted stock awards are
subject to such conditions, terms, restrictions against transfer, substantial
risks of forfeiture and attainment of performance objectives and for such
period or periods as shall be determined by the Committee. Awards of
restricted stock are limited to 500,000 shares of CoreStates Common Stock over
the life of the Long-Term Incentive Plan, subject to adjustment in the event
of stock splits, merger, and other similar events.
23
<PAGE>
CHANGE OF CONTROL
In the event of a Change of Control of CoreStates, all then outstanding
options and stock appreciation rights become exercisable immediately. A Change
of Control is generally deemed to exist in the following circumstances:
(i) the acquisition (other than from or by CoreStates) of 20% or more of
the outstanding voting stock of CoreStates except where the acquirer is
a subsidiary of CoreStates, a related benefit plan or trust or another
corporation of which 50% or more of such corporations's voting shares
following the acquisition are owned by persons who were CoreStates'
shareholders immediately prior to the acquisition;
(ii) the persons serving as directors of CoreStates as of April 15, 1997
and those replacements or additions subsequently approved by a
majority vote of the Board cease to make up at least a majority of the
Board; or
(iii) approval by CoreStates' shareholders of a reorganization, merger or
consolidation of CoreStates in which the shareholders of CoreStates
prior to the merger wind up owning 50% or less of the surviving
corporation; or approval by CoreStates' shareholders of a complete
liquidation or dissolution of CoreStates or disposition of all or
substantially all of the assets of CoreStates.
TERM OF PLAN; AMENDMENTS, TERMINATION
Subject to its approval by shareholders, the Long-Term Incentive Plan is
effective February 18, 1997, and, if so approved, will terminate on February
18, 2007. No awards may be made under the Long-Term Incentive Plan after its
expiration date but awards made prior thereto may extend beyond that date. The
Board of Directors may amend, alter, suspend or terminate the Long-Term
Incentive Plan in whole or in part at any time provided that any such action
requiring shareholder approval under applicable law or regulation or the rules
of any stock exchange on which the Common Stock is listed, is subject to
shareholder approval or ratification. No amendment, alteration, suspension or
termination of the Long-Term Incentive Plan shall affect the rights of a
participant under an award previously granted.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes the Federal income tax consequences to
participants who may receive grants of awards under the Amended and Restated
Long-Term Incentive Plan (1997).
NON-QUALIFIED STOCK OPTIONS
For Federal income tax purposes, no income is recognized by a participant
upon the grant of a non-qualified stock option under the Long-Term Incentive
Plan. Upon the exercise of an option, however, compensation taxable as
ordinary income will be realized by the participant in an amount equal to the
excess of the fair market value of a share of Common Stock on the date of such
exercise over the exercise price times the number of shares acquired. A
subsequent sale or exchange of such shares will result in gain or loss
measured by the difference between (i) the exercise price, increased by any
compensation reported upon the participant's exercise of the option, and (ii)
the amount realized on such sale or exchange. Such gain or loss will be
capital in nature if the shares were held as a capital asset and will be long-
term if such shares were held for more than one year.
CoreStates is entitled to a deduction (subject to the provisions of Section
162(m) of the Code) for compensation paid to a participant at the same time
and in the same amount as the participant is considered to have realized
compensation by reason of the exercise of an option.
24
<PAGE>
INCENTIVE STOCK OPTIONS
No taxable income is realized by the participant upon the grant or exercise
of an incentive stock option. If shares of Common Stock are issued to a
participant pursuant to the exercise of an incentive stock option granted
under the Long-Term Incentive Plan, and if no disqualifying disposition of
such shares is made by such participant within two years after the date of
grant or within one year after the transfer of such shares to a participant,
then (a) upon sale of such shares, any amount realized in excess of the option
price will be taxed to such participant as a long-term capital gain and any
loss sustained will be a long-term capital loss, and (b) no deduction will be
allowed to CoreStates for Federal income tax purposes. Upon exercise of an
incentive stock option, the participant may be subject to alternative minimum
tax on certain items of tax preference. If shares of Common Stock acquired
upon the exercise of an incentive stock option are disposed of prior to the
expiration of the two-years-from-grant/one-year-from- transfer holding period,
generally (a) the participant will realize ordinary income in the year of
disposition in the amount equal to the excess (if any) of the fair market
value of the shares at exercise (or, if less, the amount realized on the
disposition of the shares) over the option price thereof, and (b) CoreStates
will be entitled to deduct such amount (subject to the provisions of Section
162(m) of the Code). Any further gain or loss realized will be taxed as short-
term capital gain or loss, as the case may be, and will not result in any
deduction by CoreStates. If an incentive stock option is exercised at a time
when it no longer qualifies as an incentive stock option, the option is
treated as a non-qualified stock option.
STOCK APPRECIATION RIGHTS
No taxable income is recognized by a participant upon the grant of a SAR
under the Long-Term Incentive Plan. Upon the exercise of a SAR, however,
compensation taxable as ordinary income will be realized by the participant in
an amount equal to the cash received upon exercise, plus the fair market value
on the date of exercise of any shares of Common Stock received upon exercise.
Gain realized upon a subsequent sale of shares of Common Stock received on the
exercise of a SAR will be eligible for capital gain treatment, with the
capital gain holding period commencing on the date of exercise of the SAR. The
Corporation is entitled to a deduction (subject to the provisions of Section
162(m) of the Code) for compensation paid to a participant at the same time
and in the same amount as the participant is considered to have realized
compensation by reason of the exercise of a SAR.
RESTRICTED STOCK
Awards of restricted stock generally will not result in taxable income to
the participant or a tax deduction to the Corporation for Federal income tax
purposes at the time of grant. A recipient of restricted stock generally will
be subject to tax at ordinary income rates on the fair market value of the
Common Stock at the time the restricted stock is no longer subject to
forfeiture or transferability restrictions. However, a recipient who so elects
under Section 83(b) of the Code within 30 days of the date of the grant will
recognize ordinary taxable income on the date of the grant equal to the fair
market value of the restricted stock as if such shares were unrestricted and
could be sold immediately. If the restricted stock subject to such election is
forfeited, the recipient will not be entitled to any deduction, refund or loss
for tax purposes with respect to the forfeited shares. Upon sale of the
restricted stock after the forfeiture period has expired, the holding period
to determine whether the recipient has long-term or short-term capital gain or
loss begins when the restriction period expires. However, if the recipient
timely elects to be taxed as of the date of the grant, the holding period
commences on the date of the grant and the tax basis will be equal to the fair
market value of the restricted shares on the date of the grant as if such
shares were then unrestricted and could be sold immediately. CoreStates is
entitled to a deduction (subject to the provisions of Section 162(m) of the
Code) for compensation paid to a participant at the same time and in the same
amount as the participant is considered to have realized compensation by
reason of the lapse of restrictions on an award of restricted stock or an
election under Section 83(b) of the Code.
LIMITS ON DEDUCTIONS
Under Section 162(m) of the Code, the amount of compensation paid to the
Chief Executive Officer and the four other most highly paid executive officers
of CoreStates as of the end of the year for which a deduction is
25
<PAGE>
claimed by CoreStates (including its subsidiaries) is limited to $1,000,000
per person, except that compensation that is performance-based will be
excluded for purposes of calculating the amount of compensation subject to
this $1,000,000 limitation. The ability of CoreStates to claim a deduction for
compensation paid to any other executive officer or employee of CoreStates
(including its subsidiaries) is not affected by this provision.
CoreStates has structured the Plan so that any compensation for which
CoreStates may claim a deduction in connection with the exercise of non-
qualified stock options and SARs, and the disposition by an optionee of shares
acquired upon the exercise of incentive stock options will be performance-
based within the meaning of Section 162(m) of the Code. Grants of restricted
stock are not subject to performance-based criteria and therefore in some
cases may be subject to the limitations on deductibility in Section 162(m) of
the Code.
NEW PLAN BENEFITS
The selection of participants who will receive awards under the Long-Term
Incentive Plan, if it is approved by the shareholders, and the size and type
of awards are generally to be determined by the Committee in its discretion.
Such future grants are not presently determinable, and it is not possible to
predict the benefits or amounts that will be received by or allocated to
particular individuals or groups for 1997.
ACTION BY SHAREHOLDERS
Approval of this proposal requires the affirmative vote of the holders of a
majority of the shares of CoreStates Common Stock present, either in person or
by proxy, at the Annual Meeting and entitled to vote. Since the aggregate
number of shares for which a vote "For", "Against", or "Abstain" is made will
be counted in determining the minimum number of affirmative votes required for
approval of the proposal, an abstention will have the same legal effect as a
vote "Against" the proposal. Failure to approve this proposal will result in
termination of the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDED AND
RESTATED LONG-TERM INCENTIVE PLAN (PROXY ITEM 3).
SELECTION OF INDEPENDENT AUDITORS
(ITEM 4)
On February 18, 1997, the Board of Directors of CoreStates selected the firm
of Ernst & Young LLP as independent auditors to audit the books, records and
accounts of CoreStates for the current fiscal year, subject to ratification by
vote of a majority of the shares of CoreStates Common Stock represented at the
annual meeting. That firm also served as CoreStates' independent auditors for
the prior fiscal year ended December 31, 1996.
Although the appointment of independent auditors is not required to be
approved by shareholders, the Board of Directors believes shareholders should
participate in such selection through ratification. If the shareholders fail
to ratify the selection of Ernst & Young LLP, the selection of independent
auditors will be reconsidered and made by the Board of Directors. Even if the
selection is ratified, the Board of Directors, in its discretion, may direct
the appointment of a new independent auditing firm at any time during the year
if the board determines that such a change would be in the best interests of
CoreStates and its shareholders.
A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting with the opportunity to make a statement if desired and is
expected to be available to respond to appropriate questions.
ACTION BY SHAREHOLDERS
Adoption of the proposal requires the approval of a majority of the votes
cast at the Annual Meeting by all holders of Common Stock. The Pennsylvania
Business Corporation Law provides that an abstention is not a vote
26
<PAGE>
cast. In this case the abstention will not have the effect of a vote for or
against the proposal and will not be counted in determining the number of
votes required for approval, although it will be counted in determining the
presence of a quorum.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 1997.
MISCELLANEOUS
The Board of Directors is presently not aware of any other business which
will be brought before the Annual Meeting. The execution and return of the
proxy card will confer upon the appointed proxies the discretionary authority
to vote upon such other business as may properly come before the Meeting.
SHAREHOLDER PROPOSALS
Any shareholder who intends to present a proposal for action at the Annual
Meeting of Shareholders to be held in 1998 and desires that such proposal be
included in the proxy statement and proxy for such Meeting must furnish the
proposal in writing to the Secretary of CoreStates not later than November 3,
1997.
A COPY (WITHOUT EXHIBITS, UNLESS OTHERWISE REQUESTED) OF CORESTATES' ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDING DECEMBER 31, 1996 WILL BE SUPPLIED
WITHOUT CHARGE UPON WRITTEN REQUEST DIRECTED TO CORPORATE COMMUNICATIONS,
CORESTATES FINANCIAL CORP, P.O. BOX 7618, PHILADELPHIA, PENNSYLVANIA 19101-
7618 OR CALL (215) 973-6006.
By order of the Board of Directors
/s/ William L. Gaunt
William L. Gaunt
Secretary
March 4, 1997
27
<PAGE>
ANNEX A
CORESTATES FINANCIAL CORP
AMENDED AND RESTATED
STOCK COMPENSATION PLAN
FOR
NON-EMPLOYEE DIRECTORS
(1997)
1. PURPOSE
1.1 CoreStates Financial Corp (the "Company") has established the CoreStates
Financial Corp Amended and Restated Stock Compensation Plan for Non-Employee
Directors (the "Plan") to further its long-term financial success by providing
for stock awards to non-employee directors of the Company and to non-employee
directors of CoreStates Bank, N.A. ( the "Bank"), the Company's primary
subsidiary. The Plan is intended to increase the proprietary interest of such
persons by providing further opportunity for ownership of the Company's Common
Stock ("Stock"), to more closely align the interests of such persons with the
interests of the Company's shareholders, to attract and retain non-employee
directors of exceptional ability, and to motivate non-employee directors to
contribute to the success of the Company's and the Bank's business.
1.2 All elections and transactions under the Plan by persons subject to
Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") involving shares of Stock are intended to comply with all exemptive
conditions under Rule 16b-3. The Board may establish and adopt written
administrative guidelines, designed to facilitate compliance with Section 16
(b) of the Exchange Act, as it may deem necessary or proper for the
administration and operation of the Plan and the transaction of business
thereunder. To the extent that any provision of the Plan, the administrative
guidelines, or any action or omission with respect to the Plan (including any
action by an Eligible Director, as hereinafter defined, that does not satisfy
the exemptive conditions under Rule 16b-3 or otherwise) is inconsistent with
Section 16, the provision, guidelines or act or omission shall be deemed null
and void, as permitted by applicable law.
2. ADMINISTRATION
2.1 The Plan shall be administered by the Board of Directors of CoreStates
Financial Corp (the "Board").
2.2 The Board may make such rules and establish such procedures for the
administration of the Plan as it deems appropriate to carry out the purpose of
the Plan. The interpretation and application of the Plan or of any rule or
procedure, and any other matter relating to or necessary to the administration
of the Plan, shall be determined in the sole discretion of the Board, and any
such determination shall be final and binding on all persons. All
determinations of the Board shall be made by a majority of its members at a
meeting duly called pursuant to the provisions of the By-laws of the Company.
The Board may delegate to one or more of its members or to one or more agents
such administrative duties as it may deem advisable.
2.3 All costs and expenses involved in administering the Plan shall be borne
by the Company.
2.4 For purposes of the Plan, an "Eligible Director" shall be a member of
the Board or a member of the Board of Directors of the Bank who is not an
employee of the Company or any subsidiary or affiliate of the Company. If any
Eligible Director at any time becomes such an employee, he or she shall
thereupon cease to be an Eligible Director.
3. SHARES OF STOCK
3.1 Shares Reserved. Shares of Stock which may be issued under the Plan may
be either authorized and unissued shares or issued shares which have been
reacquired by the Company, provided that the total amount of Stock which may
be issued under the Plan shall not exceed 150,000 shares, subject to
adjustment in accordance with Section 3.2 hereof.
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3.2 Capital Adjustments. In the event that the Board shall determine that
any reorganization, recapitalization, stock split, stock dividend, combination
of shares, merger, consolidation, spin-off or a similar corporate transaction
affects the Stock such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of Eligible Directors under the Plan,
then the Board shall make such equitable changes or adjustments as it deems
necessary to the maximum number or class of shares available under the Plan,
and the number or class of shares of Stock to be delivered hereunder.
4. DELIVERY OF SHARES OF STOCK
4.1 Mandatory Portion. For each calendar year commencing with the calendar
year beginning January 1, 1997, each Eligible Director who is a director of
the Company or the Bank on or before the date of an annual meeting of
shareholders shall receive a whole number of shares of Stock equal in value to
50% of his or her retainer fee payable for services as a director during such
calendar year (including any additional retainer fee payable for service as a
chairperson of a committee of the Board or Board of Directors of the Bank) in
lieu of payment of such percentage of retainer fee in cash. Such shares shall
be issued to each such Eligible Director on June 1 (or if such date is not a
business day, the next succeeding business day) of such calendar year (the
"Stock Payment Date").
Each such share shall be valued at the average of the high and low prices of
a share of Stock on the Composite Tape for New York Stock Exchange Listed
Stocks, as reported in The Wall Street Journal on the last business day
preceding the Stock Payment Date (the "Share Value Price"). The value of
fractional shares shall be paid to the Eligible Director in cash.
4.2 Elective Portion. For each calendar year commencing with the calendar
year beginning January 1, 1998, each person who will be an Eligible Director
on January 1 of such year may elect to receive a whole number of shares of
Stock equal in value (based on the Share Value Price) to up to 100 percent of
his or her retainer fee payable for services as a director during such
calendar year (including any additional retainer fee payable for serving as a
chairperson of a committee of the Board or Board of Directors of the Bank) in
lieu of payment of such percentage of retainer fee in cash. Such election may
be made in incremental amounts of 5 percent of the total retainer fee. Such
shares shall be delivered to each Eligible Director on the Stock Payment Date.
The value of fractional shares shall be paid to the Eligible Director in cash.
Any such election shall be irrevocable and shall be made in writing no later
than December 31 of the year preceding such year, and shall apply on a pro
rata basis with respect to the entire amount of retainer fees earned, or on
such other basis as may be agreed to by the Company.
4.3 Withholding Taxes. The Company shall have the right to make such
provisions as it deems necessary or appropriate to satisfy any obligations it
may have to withhold federal, state, or local income or other taxes incurred
by reason or payments pursuant to the Plan. In lieu thereof, the Company shall
have the right to withhold the amount of such taxes from any other sums due or
to become due from the Company to an Eligible Director upon such terms and
conditions as the Company may prescribe.
5. TERM OF PLAN
5.1 The Plan is subject to approval by the shareholders of the Company at
the 1997 Annual Meeting of Shareholders. In no event shall any delivery of
shares of Stock be made to any director or other person under the Plan until
such time as shareholder approval of the Plan is obtained.
5.2 The Plan shall remain in effect until June 1, 2007, unless sooner
terminated by the Board.
6. AMENDMENT; TERMINATION
6.1 The Board may at any time and from time to time alter, amend, suspend,
or terminate the Plan in whole or in part; provided, however, no amendment
which requires shareholder approval under applicable Pennsylvania law, under
the rules of any securities exchange on which the shares may be listed, or in
order for the Plan to continue to comply with Rule 16b-3 shall be effective
unless the same shall be approved by the requisite vote of the shareholders of
the Company.
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7. MISCELLANEOUS
7.1 Nothing in this Plan shall be construed as conferring any right upon any
director to continuance as a member of the Board or the Board of Directors of
the Bank.
7.2 This Plan and all rights hereunder shall be construed in accordance with
and governed by the laws of the Commonwealth of Pennsylvania.
7.3 This Plan shall not be construed to require the Company to fund any
amount payable under the Plan, to create a trust of any kind or to set aside
or earmark any monies or other assets specifically for payments under the
Plan.
7.4 Notwithstanding any other provision of this Plan, the Company shall not
be required to award or deliver any certificate for shares of Common Stock
under this Plan prior to fulfillment of all of the following conditions:
a. Any required listing or approval or notice of issuance of such shares
on any securities exchange on which the Common Stock may then be traded;
b. Any registration or other qualification of such shares under any state
or federal law or regulation or other qualification which the Board shall
upon the advice of counsel deem necessary or advisable; and
c. The obtaining of any other required consent or approval or permit from
any state or federal government agency.
7.5 No right under this Plan shall be transferable or otherwise subject to
anticipation, sale, assignment, pledge, encumbrance or charge except by will
or the law of descent and distribution.
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ANNEX B
CORESTATES FINANCIAL CORP
AMENDED AND RESTATED
LONG-TERM INCENTIVE PLAN
(1997)
1. PURPOSE. The purpose of the CoreStates Financial Corp Long-Term Incentive
Plan (l997), as amended and restated, (the "Plan") is to support the business
goals of CoreStates Financial Corp ("CoreStates")and its subsidiaries
(together, the "Corporation") by providing incentives and rewards to associate
more closely the interests of certain officers and key executives with the
interests of CoreStates' stockholders.
2. EFFECTIVE DATE AND DURATION OF THE PLAN. The effective date of the Plan
is February 18, 1997, subject to its approval by the stockholders of
CoreStates at the annual meeting to be held on April 15, 1997, or any
adjournment thereof. The Plan shall remain in effect until all awards under
the Plan have been satisfied by the issuance of shares or the payment of cash,
but no award shall be granted more than ten years after the effective date of
the Plan or the date the Plan is approved by the stockholders of CoreStates,
whichever is earlier.
3. ADMINISTRATION. The Plan shall be administered by a committee (the
"Committee") of not less than two directors of CoreStates, each of whom
qualifies as both a "non-employee director" under Rule 16b-3 of the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), and also as an
"outside director" as that term is defined under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code") and the rules and
regulations thereunder. Without limiting the foregoing, the Committee shall
have full and final authority in its discretion to conclusively interpret the
provisions of the Plan and to decide all questions of fact arising in its
application; to determine the employees to whom awards shall be made under the
Plan; to determine the type of award to be made and the amount, size and terms
of each such award; to determine the time when awards will be granted; and to
make all other determinations necessary or advisable for the administration of
the Plan. The Committee may designate persons other than its members to carry
out its responsibilities under such conditions or limitations as it may set,
other than its authority with regard to benefits granted to employees who are
officers or directors of CoreStates for purposes of Section 16 of the Exchange
Act. A majority of the Committee shall constitute a quorum, and the action of
a majority of members of the Committee present at any meeting at which a
quorum is present, or acts unanimously adopted in writing without the holding
of a meeting, shall be the acts of the Committee. All actions of the Committee
shall be final, conclusive and binding upon any participant. No member of the
Committee shall be liable for any action taken or decision made in good faith
relating to the Plan or any award thereunder.
4. SHARES SUBJECT TO PLAN. The number of shares for which options or awards
may be issued under the Plan during any calendar year shall not exceed in the
aggregate 1.5 percent of the issued shares of common stock of CoreStates
including treasury shares, determined as of the first day of such calendar
year. Any unused portion of this percentage limit in any calendar year shall
be carried forward and available for awards in succeeding calendar years. Such
shares may be authorized and unissued shares or treasury shares. Except as
otherwise provided herein, any shares subject to an option or right which for
any reason expires or is terminated unexercised as to such shares shall again
be available under the Plan. Furthermore, shares of stock subject to an award
under the Plan that is cancelled, expired, forfeited, settled in cash or
otherwise terminated without a delivery of shares to the participant,
including (i) the number of shares withheld in payment of any exercise or
purchase price of an award or taxes relating to awards, and (ii) the number of
shares surrendered in payment of any exercise or purchase price of an award or
taxes relating to any award, will again be available for awards under the
Plan, except that if any such shares could not again be available for awards
to a particular participant under any applicable law or regulation, such
shares shall be available exclusively for awards to participants who are not
subject to such limitation.
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5. PARTICIPANTS. Persons eligible to participate shall be limited to those
officers and other key employees of the Corporation and its subsidiaries who
are in positions in which their decisions, actions and counsel significantly
contribute to the success of the Corporation. Directors of the Corporation who
are not otherwise officers or employees of the Corporation or its subsidiaries
shall not be eligible to participate in the Plan.
6. AWARDS UNDER THE PLAN. Awards under the Plan may be in the form of non-
qualified stock options, incentive stock options under Section 422 of the
Code, stock appreciation rights, restricted stock, or such other forms as the
Committee may in its discretion deem appropriate, including any combination of
the above. In each calendar year during any part of which the Plan is in
effect, a participant may not be granted awards relating to more than
1,000,000 shares of common stock of CoreStates, subject to adjustment as
provided in paragraph 16, under each of paragraphs 7, 8, and 9. Total awards
to all participants under paragraph 10 shall not exceed 500,000 shares of
common stock of CoreStates during the term of the Plan, subject to adjustment
as provided in paragraph 16.
7. STOCK OPTIONS. Options shall be evidenced by stock option agreements in
such form and not inconsistent with the Plan as the Committee shall approve
from time to time, which agreements shall contain in substance the following
terms and conditions:
(a) Option Price. The purchase price per share of stock deliverable upon
the exercise of an option shall not be less than 100% of the fair market
value of the stock on the day the option is granted, as determined by the
Committee, but in no event less than the par value of such stock.
(b) Exercise of Option. Each stock option agreement shall state the
period or periods of time within which the option may be exercised by the
optionee, in whole or in part, which shall be such period or periods of
time as may be determined by the Committee, provided that the exercise
period shall not end later than ten years after the date of the grant of
the option.
(c) Payment for Shares. Stock purchased pursuant to an option agreement
shall be paid for in full in cash, common stock of CoreStates at fair
market value, or a combination thereof, in an amount or having a combined
value equal to the aggregate purchase price for the shares subject to the
option or portion thereof being exercised.
(d) Rights Upon Termination of Employment. In the event that an optionee
ceases to be an employee of the Corporation for any cause other than death,
disability, retirement or involuntary separation without cause, all options
granted to such optionee shall lapse forthwith. In the event employment
ceases because an optionee dies, retires, or becomes disabled prior to
expiration of his option without having fully exercised his option, the
optionee (or his successor if he has died) shall have the right to exercise
the option during its term within a period of twelve months after the date
employment so ceased, to the extent that the option was exercisable on the
date employment ceased due to death, disability or retirement, or during
such other period and subject to such terms as may be determined by the
Committee. In the event employment ceases because an optionee is
involuntarily separated without cause prior to expiration of his option
without having fully exercised his option, the optionee (or his successor
if he dies in the interim) shall have the right to exercise the option
during its term within a period of three months after the date employment
so ceased, to the extent that the option was exercisable on the date
employment ceased due to involuntary separation without cause, or during
such other period and subject to such terms as may be determined by the
Committee. As used in the Plan, the phrase "involuntary separation without
cause" means a termination of employment by the Corporation at will for
reasons other than substantial failure to perform duties, material
violation of Corporation policies, unethical activities, misconduct, fraud,
or illegal act; provided that, an "involuntary separation without cause"
does not include a resignation or a voluntary separation from employment,
in either case initiated by the optionee.
8. INCENTIVE STOCK OPTIONS. Incentive stock options are options to purchase
shares of common stock of CoreStates which are intended to satisfy
requirements for tax qualified status under the Code. The shares that may be
issued pursuant to incentive stock options under the Plan shall not exceed in
the aggregate four million (4,000,000) shares of the common stock of
CoreStates, subject to adjustment as provided in paragraph 16. Incentive stock
options shall be evidenced by incentive stock option agreements in such form
and not
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inconsistent with the Plan as the Committee shall approve from time to time,
which agreements shall contain in substance the following terms and
conditions:
(a) Option Price. The purchase price per share of stock deliverable upon
the exercise of an incentive stock option shall not be less than 100% of
the fair market value of the stock on the day the option is granted, as
determined by the Committee, but in no event less than the par value of
such stock.
(b) Exercise of Option. Each incentive stock option agreement shall state
the period or periods of time within which the option may be exercised by
the optionee, in whole or in part, which shall be such period or periods of
time as may be determined by the Committee, provided that the exercise
period shall not end later than ten years after the date of the grant of
the option. The Committee shall have the power to permit in its discretion
an acceleration of the previously determined exercise terms, subject to the
terms set forth herein, under such circumstances and upon such terms and
conditions as it deems appropriate.
(c) Nontransferability. Each incentive stock option agreement shall state
that the option is not transferable other than by will or the laws of
descent and distribution, and during the lifetime of the optionee is
exercisable only by him.
(d) Payment for Shares. Stock purchased pursuant to an incentive stock
option shall be paid for in full in cash, common stock of CoreStates at
fair market value, or a combination thereof, in an amount or having a
combined value equal to the aggregate purchase price for the shares subject
to the option or portion thereof being exercised.
(e) Rights Upon Termination of Employment. In the event that an optionee
ceases to be an employee of the Corporation for any cause other than death,
disability, retirement or involuntary separation without cause, all options
granted to such optionee shall lapse forthwith. In the event employment
ceases because an optionee dies, retires, or becomes disabled prior to
termination of his option without having fully exercised his option, the
optionee (or his successor if he has died) shall have the right to exercise
the option during its term within a period of twelve months after the date
employment so ceased, to the extent that the option was exercisable on the
date employment ceased due to death, disability or retirement, or during
such other period and subject to such terms as may be determined by the
Committee. In the event employment ceases because an optionee is
involuntarily separated without cause prior to expiration of his option,
the optionee (or his successor if he dies in the interim) shall have the
right to exercise the option during its term within a period of three
months after the date employment so ceased, to the extent that the option
was exercisable on the date employment ceased due to involuntary separation
without cause, or during such other period and subject to such other terms
as may be determined by the Committee.
(f) Individual Limitations.
(i) Notwithstanding anything herein to the contrary, to the extent
that the aggregate fair market value (determined as of the time the
option is granted) of stock for which any employee is granted incentive
stock options first exercisable during any calendar year (under all
such plans of the Corporation) shall exceed $100,000 (such excess to be
determined by taking options into account in the order in which
granted), such options shall be treated as options which are not
incentive stock options.
(ii) Notwithstanding anything herein to the contrary, no incentive
stock option shall be granted to any individual if at the time the
option is to be granted the individual owns stock possessing more than
ten percent of the total combined voting power of all classes of stock
of the employer corporation or of its parent or subsidiary corporation
unless at the time such option is granted the option price is at least
110 percent of the fair market value of the stock subject to option and
such option by its terms is not exercisable after the expiration of
five years from the date such option is granted.
(g) Other terms. Each incentive stock option agreement shall contain such
other terms, conditions and provisions as the Committee may determine to be
necessary or desirable in order to qualify such option as a tax-favored
option within the meaning of Section 422 of the Code, or regulation
thereunder. Subject to the limitations of paragraph 17, and without
limiting any other provisions hereof, the Committee shall have
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the power without further approval to amend the terms of the Plan or any
awards or agreements thereunder for such purpose.
9. STOCK APPRECIATION RIGHTS. Awards may be made from time to time in the
form of stock appreciation rights. Stock appreciation rights shall be
evidenced by stock appreciation rights agreements in such form and not
inconsistent with the Plan as the Committee shall approve from time to time,
which agreements shall contain in substance the following terms and
conditions:
(a) Award. A stock appreciation right shall entitle the grantee, subject
to such terms and conditions determined by the Committee, to receive upon
exercise thereof all or a portion of the excess of (i) the fair market
value of a specified number of shares of common stock of CoreStates at the
time of exercise, as determined by the Committee, over (ii) a specified
price which shall not be less than 100 percent of the fair market value of
the stock at the time the appreciation right was granted, or, if connected
with a previously issued stock option, not less than 100 percent of the
fair market value of the stock at the time such option was granted. A stock
appreciation right may be granted in connection with all or any portion of
a previously or contemporaneously granted stock option or not in connection
with a stock option.
(b) Term. Stock appreciation rights shall be granted for a period of not
more than ten years, and shall be exercisable in whole or in part, at such
time or times and subject to such other terms and conditions as shall be
prescribed by the Committee, subject to the following:
(i) In the event that a grantee ceases to be an employee of the
Corporation for any cause other than death, disability, retirement or
involuntary separation without cause, all stock appreciation rights
granted to such grantee shall lapse forthwith. In the event employment
ceases because a grantee dies, becomes disabled or retires without
having fully exercised his stock appreciation rights, the grantee (or
his successor if he has died) shall have the right to exercise the
stock appreciation rights during their term within a period of twelve
months after the date employment ceased due to death, disability or
retirement to the extent that the right was exercisable on the date
employment so ceased, or during such other period and subject to such
terms as may be determined by the Committee. In the event employment
ceases because a grantee is involuntarily separated without cause prior
to expiration of his award, the grantee (or his successor if he dies in
the interim) shall have the right to exercise the stock appreciation
rights during their term within a period of three months after the date
employment so ceased, to the extent that the stock appreciation rights
were exercisable on the date employment ceased due to involuntary
separation without cause, or during such other period and subject to
such other terms as may be determined by the Committee. The Committee
in its sole discretion may reserve the right to accelerate previously
determined exercise terms, within the terms of the Plan, under such
circumstances and upon such terms and conditions as it deems
appropriate; and
(ii) The Committee shall establish such additional terms and
conditions without limiting the foregoing, as it determines to be
necessary or desirable to avoid "insider-trading" liability in
connection with a stock appreciation right under Section 16(b) of the
Exchange Act.
(c) Payment. Upon exercise of a stock appreciation right, payment shall
be made in cash or common stock of CoreStates, as determined by the
Committee.
(d) Incentive Stock Options. Stock appreciation rights may be granted in
connection with an incentive stock option, but shall not be granted in a
manner or form which will result in the failure of such option to qualify
as an incentive stock option under Section 422 of the Code, or regulation
thereunder. Stock appreciation rights may not be granted, in connection
with a grant of incentive stock options, during the term of the incentive
stock option.
10. RESTRICTED STOCK AWARDS. Restricted stock awards under the Plan shall be
in the form of shares of common stock of CoreStates, restricted as to transfer
and subject to forfeiture, and shall be evidenced by restricted stock
agreements in such form and not inconsistent with the Plan as the Committee
shall approve from time to time, which agreements shall contain in substance
the following terms and conditions:
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(a) Restriction Period. Shares awarded pursuant to the Plan shall be
subject to such terms, conditions, and restrictions, including without
limitation prohibitions against transfer, substantial risks of forfeiture
and attainment of performance objectives, and for such period or periods of
time as shall be determined by the Committee. The Committee shall have the
power, in its discretion, to permit an acceleration of the expiration of
the applicable restriction period with respect to any part or all of the
shares awarded to a participant.
(b) Restriction Upon Transfer. Shares awarded, and the right to vote such
shares and to receive dividends thereon, may not be sold, assigned,
transferred, exchanged, pledged, hypothecated, or otherwise encumbered,
except as herein provided, during the restriction period applicable to such
shares. Notwithstanding the foregoing, and except as otherwise provided in
the Plan, the participant shall have all the other rights of a stockholder
including but not limited to, the right to received dividends and the right
to vote such shares.
(c) Certificates. Each certificate issued in respect of shares awarded to
a participant shall be deposited with CoreStates Bank, N.A., or its
designee, and shall bear the following legend:
"This certificate and the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture and
restrictions against transfer) contained in the CoreStates Financial
Corp Long-Term Incentive Plan and an Agreement entered into between the
registered owner and CoreStates Financial Corp. Release from such terms
and conditions shall obtain only in accordance with the provisions of
the Plan and Agreement, a copy of each of which is on file in the
office of the Secretary of CoreStates Financial Corp."
(d) Lapse of Restrictions. Each restricted stock agreement shall specify
the terms and conditions upon which any restrictions upon shares awarded
under the Plan shall lapse, as determined by the Committee. Upon the lapse
of such restrictions, certificates(s) free of any restrictive legend shall
be issued to the participant or his legal representative.
(e) Termination Prior to Lapse of Restrictions. In the event of a
particpant's termination of employment prior to the lapse of restrictions
applicable to any shares awarded to such participant, all shares as to
which there still remains unlapsed restrictions shall be forfeited by such
participant to CoreStates Financial Corp without payment of any
consideration by CoreStates Financial Corp, and neither the participant nor
any successors, heirs, assigns or personal representatives of such
participant shall thereafter have any further rights or interest in such
shares or certificates.
11. GENERAL RESTRICTIONS. Each award under the Plan shall be subject to the
requirement that, if at any time the Committee shall determine that (i) the
listing, registration or qualification of the shares of common stock subject
or related thereto upon any securities exchange or under any state or federal
law, or (ii) the consent or approval of any government regulatory body, or
(iii) an agreement by the recipient of an award with respect to the
disposition of shares of common stock, is necessary or desirable as a
condition thereunder, such award may not be consummated in whole or in part
unless such listing registration, qualification, consent, approval or
agreement shall have been effected or obtained free of any conditions not
acceptable to the Committee.
12. RIGHTS TO TERMINATE EMPLOYMENT. Nothing in the Plan or in any agreement
entered into pursuant to the Plan shall confer upon any participant the right
to continue in the employment of the Corporation or affect any right which the
Corporation may have to terminate the employment of such participant.
13. WITHHOLDING. Whenever the Corporation proposes or is required to issue
or transfer shares of common stock under the Plan, the Corporation shall have
the right to require the recipient to remit to the Corporation an amount
sufficient to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery of any certificate for such shares or the
Corporation may withhold from the shares to be delivered shares sufficient to
satisfy all or a portion of such withholding tax requirements. Whenever under
the Plan payments are to be made in cash, such payments shall be net of an
amount sufficient to satisfy any federal, state and/or local withholding tax
requirements.
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14. NON-ASSIGNABILITY. No benefit under the Plan shall be assignable or
transferable by the participant other than by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations order as
defined by the Code, or Title I of the Employee Retirement Income Security
Act, or the rules thereunder. During the life of the participant, such award
shall be exercisable only by such person or by such person's guardian or legal
representative.
15. NON-UNIFORM DETERMINATION. The Committee's determinations under the Plan
(including without limitation determinations of the person to receive awards,
the form, amount and timing of such awards, the terms and provisions of such
awards, the agreements evidencing same, and the establishment of values and
performance targets) need not be uniform and may be made by it selectively
among persons who receive, or are eligible to receive, awards under the Plan,
whether or not such persons are similarly situated.
16. ADJUSTMENTS. In the event that any dividend or other distribution
(whether in the form of cash, stock, or other property), recapitalization,
forward or reverse split, reorganization, merger, consolidation, spin-off,
combination, repurchase, share exchange, liquidation, dissolution or other
similar corporate transaction or event affects the stock such that an
adjustment is determined by the Committee to be appropriate under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust any
or all of (i) the number and kind of shares of stock which may be delivered in
connection with awards granted thereafter, (ii) the number and kind of shares
of stock by which annual per- person award limitations are measured under
paragraph 6 hereof, (iii) the number and kind of shares of stock subject to or
deliverable in respect of outstanding awards and (iv) the exercise price,
grant price or purchase price relating to any award and/or make any provision
for payment of cash or other property in respect of any outstanding award.
17. AMENDMENT OR TERMINATION OF THE PLAN. The Committee or the board of
directors of CoreStates (the "Board") may at any time terminate the Plan or
any part thereof and may from time to time amend the Plan as it may deem
advisable. Any such action of the Board or the Committee may be taken without
the approval of CoreStates' shareholders, but only to the extent that such
shareholder approval is not required by applicable law or regulation,
including specifically Rule 16b-3, or the Rules of any stock exchange on which
the Common Stock is listed. However, the Board or the Committee may not
increase the maximum number of shares which may be issued pursuant to
paragraph 8 of the Plan without shareholder approval. The termination or
amendment of the Plan shall not, without the consent of the participant,
adversely affect such participant's rights under an award previously granted.
18. CHANGE OF CONTROL. (a) If there is a Change of Control, as defined
below, of CoreStates, all outstanding options and stock appreciation rights
shall become exercisable immediately prior to the consummation of the Change
of Control.
(b) "Change of Control" of CoreStates shall be deemed to have occurred
upon the happening of any of the following events:
(i) the acquisition, other than from CoreStates, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either the
then outstanding shares of common stock of CoreStates or the combined
voting power of the then outstanding voting securities of CoreStates
entitled to vote generally in the election of directors, but excluding,
for this purpose, any such acquisition by CoreStates or any of its
subsidiaries, or any employee benefit plan (or related trust) of the
Corporation, or any corporation with respect to which, following such
acquisition, more than 50% of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all
of the individuals and entities who were the beneficial owners,
respectively, of the common stock and voting securities of CoreStates
immediately prior to such acquisition in substantially the same
proportion as their ownership, immediately prior to such acquisition,
of the then outstanding shares of common stock of CoreStates or the
combined voting
B-6
<PAGE>
power of the then outstanding voting securities of CoreStates entitled
to vote generally in the election of directors, as the case may be;
(ii) individuals who, as of February 18, 1997, constitute the board
of directors of CoreStates (as of such date the "Incumbent Board")
cease for any reason to constitute at least a majority of the board,
provided that any individual becoming a director subsequent to such
date whose election, or nomination for election by CoreStates'
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of
CoreStates (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act); or
(iii) approval by the stockholders of CoreStates of a reorganization,
merger or consolidation of CoreStates, in each case, with respect to
which all or substantially all of the individuals and entities who were
the respective beneficial owners of the common stock and voting
securities of CoreStates immediately prior to such reorganization,
merger or consolidation do not, following such reorganization, merger
or consolidation, beneficially own, directly or indirectly, more then
50% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such reorganization, merger
or consolidation, or of a complete liquidation or dissolution of
CoreStates or of the sale or other disposition of all or substantially
all of the assets of CoreStates.
19. EFFECT ON OTHER PLANS. Participation in the Plan shall not affect an
employee's eligibility to participate in any other benefit or incentive plan
of the Corporation and any awards made pursuant to the Plan shall not be used
in determining the benefits provided under any other plan of the Corporation
unless specifically provided.
20. GOVERNING LAW. To the extent that federal laws do not otherwise control,
the Plan shall be governed by the law of the Commonwealth of Pennsylvania.
B-7
<PAGE>
P R O X Y
CORESTATES FINANCIAL CORP--PROXY FOR COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON APRIL 15, 1997
The undersigned holder of Common Stock of CoreStates Financial Corp
("CoreStates") hereby appoints Buntzie E. Churchill, Park B. Dilks, Jr. and G.
Willing Pepper and each or any of them, jointly and severally, proxies with
power of substitution, to vote, as designated on the reverse, all shares of
CoreStates Common Stock held by the undersigned at the annual meeting of the
shareholders of CoreStates to be held at 8:30 A.M., Philadelphia time, on Tues-
day, April 15, 1997 in the Ormandy Ballroom at the Doubletree Hotel, Broad and
Locust Streets, Philadelphia, Pennsylvania, and at any adjournments thereof,
with all the powers the undersigned would possess if personally present. Receipt
of the Notice and Proxy Statement, dated March 4, 1997, and the Annual Report to
Shareholders for 1996 is hereby acknowledged.
Election of Directors, Nominees:
Ernest E. Jones, Marlin Miller, Jr.,
James M. Seabrook, Peter S. Strawbridge,
Judith M. von Seldeneck
(Notation/Comments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(If you have written in the above space, please mark the corresponding box on
the reverse side of this card)
-----------
SEE REVERSE
SIDE
-----------
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
. FOLD AND DETACH HERE .
ANNUAL MEETING
OF
CORESTATES FINANCIAL CORP
TUESDAY, APRIL 15, 1997
DOUBLETREE HOTEL
8:30 A.M.
ORMANDY BALLROOM
BROAD STREET AT LOCUST
PHILADELPHIA, PA 19107
.YOUR VOTE IS IMPORTANT TO US. PLEASE DETACH THE ABOVE PROXY, SIGN THE CARD AND
INSERT IT IN THE ENCLOSED ENVELOPE AT YOUR EARLIEST CONVENIENCE.
<PAGE>
[X]Please
mark your
votes as
in this
example.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES LISTED ON THE REVERSE HEREOF AND FOR ITEMS 2, 3, AND 4.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED ON THE REVERSE
HEREOF AND FOR ITEMS 2, 3 AND 4.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of [_] [_] 2. Adoption of the Amended [_] [_] [_] 4 . Ratify selection of Ernst [_] [_] [_]
Directors and Restated Directors' & Young as CoreStates'
(see reverse) Stock Plan (1997) Independent auditors for
For, except vote withheld from the fiscal year ending
the following nominee(s) only: 3. Adoption of the Amended [_] [_] [_] December 31, 1997.
and Restated Long-Term
Incentive Plan (1997) 5. The Proxies are authorized to
vote in their discretion upon
the transaction of such other
business as may properly come
before the meeting and any
adjournments thereof.
</TABLE>
- --------------------------------------------------------------------------------
SPECIAL ACTION
--------------------------------------------
Notation/Comments [_]
If you receive more than one Annual [_]
Report at the address set forth on this
proxy card and have no need for the extra
copy(ies), please check the box at the
right. This will not affect the
distribution of dividends or proxy
statements.
--------------------------------------------
SIGNATURE ______________________________ DATE __________
NOTE: YOUR SIGNATURE(S) SHOULD APPEAR AS YOUR NAME(S) APPEAR(S) HEREON. WHEN
SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY THE
PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED PERSON. PLEASE SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
. FOLD AND DETACH HERE .
CoreStates Financial Corp and First Chicago Trust Company of New York are
pleased to offer the opportunity to have your quarterly dividends
deposited directly into your checking or savings account, at no charge to
you.
Direct Deposit's main benefit to you is knowing that your dividends are in
your account on the payable date - no more waiting for the check to arrive
in the mail - no more waiting in bank lines to deposit the check - the
deposit is made automatically for you.
If you would like to learn more about this convenience and how you can
join, please call First Chicago Trust Company of New York at 1-800-317-
4445.
IMPORTANT: PLEASE VOTE AND SIGN YOUR
PROXY AND RETURN IT IN THE ENVELOPE PROVIDED
<PAGE>
P R O X Y
QUESTPOINT SAVINGS PLAN
INSTRUCTIONS TO TRUSTEE
The undersigned participant in the CoreStates Financial Corp ("CoreStates")
Common Stock account established pursuant to the above named plan hereby ac-
knowledges receipt of the notice and proxy statement dated March 4, 1997 and of
the 1996 annual report to shareholders and instructs CoreStates Bank N.A., as
Trustee of such plan, to vote the shares of CoreStates Common Stock held by it
in such plan, to the extent held for the beneficial interest of the undersigned
at the annual meeting of the Shareholders of CoreStates to be held at 8:30
A.M., Philadelphia time, on Tuesday, April 15, 1997 in the Ormandy Ballroom at
the Doubletree Hotel, Broad and Locust Streets, Philadelphia, Pennsylvania, and
at any adjournments thereof.
Election of Directors, Nominees:
Ernest E. Jones, Marlin Miller, Jr., James M. Seabrook,
Peter S. Strawbridge, Judith M. von Seldeneck
PLEASE DATE, SIGN AND RETURN THIS INSTRUCTION, SEE REVERSE SIDE, IN THE
ENCLOSED ENVELOPE (SEALED) IF YOU WISH YOUR BENEFICIAL INTEREST (AS OF
FEBRUARY 27, 1997) IN THESE SHARES TO BE VOTED.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
. FOLD AND DETACH HERE .
ANNUAL MEETING
OF
CORESTATES FINANCIAL CORP
TUESDAY, APRIL 15, 1997
DOUBLETREE HOTEL
8:30 A.M.
ORMANDY BALLROOM
BROAD STREET AT LOCUST
PHILADELPHIA, PA 19107
.YOUR VOTE IS IMPORTANT TO US. PLEASE DETACH THE ABOVE PROXY, SIGN THE CARD AND
INSERT IT IN THE ENCLOSED ENVELOPE AT YOUR EARLIEST CONVENIENCE.
<PAGE>
[X]Please
mark your
votes as
in this
example.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES LISTED ON THE REVERSE HEREOF AND FOR ITEMS 2, 3, AND 4.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED ON THE REVERSE
HEREOF AND FOR ITEMS 2, 3 AND 4.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of [_] [_] 2. Adoption of the Amended [_] [_] [_] 4 . Ratify selection of Ernst [_] [_] [_]
Directors and Restated Directors' & Young as CoreStates'
(see reverse) Stock Plan (1997) Independent auditors for
For, except vote withheld from the fiscal year ending
the following nominee(s) only: 3. Adoption of the Amended [_] [_] [_] December 31, 1997.
and Restated Long-Term
Incentive Plan (1997) 5. The Trustee is authorized to
vote in its discretion upon
the transaction of such other
business as may properly come
before the meeting and any
adjournments thereof.
</TABLE>
- --------------------------------------------------------------------------------
SIGNATURE ______________________________ DATE __________
NOTE: YOUR SIGNATURE SHOULD APPEAR AS YOUR NAME APPEARS HEREON. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH. PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
. FOLD AND DETACH HERE .
IMPORTANT: PLEASE VOTE AND SIGN YOUR
PROXY AND RETURN IT IN THE ENVELOPE PROVIDED
<PAGE>
P R O X Y
CORESTATES EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
INSTRUCTIONS TO TRUSTEE
The undersigned participant in the CoreStates Financial Corp ("CoreStates")
Common Stock account established pursuant to the above named plan hereby ac-
knowledges receipt of the notice and proxy statement dated March 4, 1997 and of
the 1996 annual report to shareholders and instructs CoreStates Bank N.A., as
Trustee of such plan, to vote the shares of CoreStates Common Stock held by it
in such plan, to the extent held for the beneficial interest of the undersigned
at the annual meeting of the Shareholders of CoreStates to be held at 8:30
A.M., Philadelphia time, on Tuesday, April 15, 1997 in the Ormandy Ballroom at
the Doubletree Hotel, Broad and Locust Streets, Philadelphia, Pennsylvania, and
at any adjournments thereof.
Election of Directors, Nominees:
Ernest E. Jones, Marlin Miller, Jr., James M. Seabrook,
Peter S. Strawbridge, Judith M. von Seldeneck
PLEASE DATE, SIGN AND RETURN THIS INSTRUCTION, SEE REVERSE SIDE, IN THE
ENCLOSED ENVELOPE (SEALED) IF YOU WISH YOUR BENEFICIAL INTEREST (AS OF
FEBRUARY 27, 1997) IN THESE SHARES TO BE VOTED.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
. FOLD AND DETACH HERE .
ANNUAL MEETING
OF
CORESTATES FINANCIAL CORP
TUESDAY, APRIL 15, 1997
DOUBLETREE HOTEL
8:30 A.M.
ORMANDY BALLROOM
BROAD STREET AT LOCUST
PHILADELPHIA, PA 19107
.YOUR VOTE IS IMPORTANT TO US. PLEASE DETACH THE ABOVE PROXY, SIGN THE CARD AND
INSERT IT IN THE ENCLOSED ENVELOPE AT YOUR EARLIEST CONVENIENCE.
<PAGE>
[X]Please
mark your
votes as
in this
example.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES LISTED ON THE REVERSE HEREOF AND FOR ITEMS 2, 3, AND 4.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED ON THE REVERSE
HEREOF AND FOR ITEMS 2, 3 AND 4.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of [_] [_] 2. Adoption of the Amended [_] [_] [_] 4 . Ratify selection of Ernst [_] [_] [_]
Directors and Restated Directors' & Young as CoreStates'
(see reverse) Stock Plan (1997) Independent auditors for
For, except vote withheld from the fiscal year ending
the following nominee(s) only: 3. Adoption of the Amended [_] [_] [_] December 31, 1997.
and Restated Long-Term
Incentive Plan (1997) 5. The Trustee is authorized to
vote in its discretion upon
the transaction of such other
business as may properly come
before the meeting and any
adjournments thereof.
</TABLE>
- --------------------------------------------------------------------------------
SIGNATURE ______________________________ DATE __________
NOTE: YOUR SIGNATURE SHOULD APPEAR AS YOUR NAME APPEARS HEREON. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH. PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
. FOLD AND DETACH HERE .
IMPORTANT: PLEASE VOTE AND SIGN YOUR
PROXY AND RETURN IT IN THE ENVELOPE PROVIDED
