<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 4, 1996
REGISTRATION NO. 33-62305
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------
MERIDIAN BANCORP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
PENNSYLVANIA
(State or other jurisdiction
of incorporation
or organization)
6711
(Primary Standard
Industrial Classification
Code Number)
23-2237529
(I.R.S. Employer
Identification No.)
35 North Sixth Street
Reading, Pennsylvania 19601
(610) 655-2000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Samuel A. McCullough
Chairman and Chief Executive Officer
Meridian Bancorp, Inc.
35 North Sixth Street
Reading, Pennsylvania 19601
(610) 655-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------
Copies to:
Joseph M. Harenza, Esquire Ronald H. Janis, Esquire
David W. Swartz, Esquire Michael W. Zelenty, Esquire
Stevens & Lee Pitney, Hardin, Kipp & Szuch
111 North Sixth Street P.O. Box 1945
P.O. Box 679 Morristown, New Jersey 07962
Reading, Pennsylvania 19603
---------------
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box: [ ]
==============================================================================
<PAGE>
UNITED COUNTIES BANCORPORATION
Four Commerce Drive, Cranford, New Jersey 07016
LOGO
EUGENE H. BAUER
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
(908) 931-6548
JANUARY 4, 1996
Dear Stockholder:
On September 25, 1995, United Counties Bancorporation ("UCB") mailed to
you a Notice of Special Meeting and Proxy Statement/Prospectus ("Proxy
Statement/Prospectus") relating to the Special Meeting of Stockholders of UCB
(the "Special Meeting") initially convened on Wednesday, November 1, 1995 at
10:00 a.m. at the corporate headquarters of UCB, Four Commerce Drive,
Cranford, New Jersey 07016. The Special Meeting was adjourned until further
notice in order to permit UCB stockholders to receive and consider the
information contained in the accompanying Proxy Statement/Prospectus
Supplement (the "Supplement") and the Special Meeting will now be held, in
accordance with the enclosed Notice of Meeting, at 10:00 a.m., Wednesday,
February 7, 1996 at the corporate headquarters of UCB.
As described in the Proxy Statement/Prospectus, another copy of which has
been included with this Supplement for your convenience, at the reconvened
Special Meeting you will be asked to consider and vote upon a proposal to
approve and adopt an Agreement and Plan of Merger, dated as of May 23, 1995
(the "Merger Agreement"), by and between Meridian Bancorp, Inc. ("Meridian")
and UCB, pursuant to which UCB will merge (the "Merger") with and into
Meridian, with Meridian surviving the Merger and each share of common stock,
no par value, $1.00 stated value per share, of UCB ("UCB Common Stock") at
the closing of the Merger will be converted into 5.00 shares of common stock,
par value $5.00 per share, of Meridian ("Meridian Common Stock").
After the mailing of the Proxy Statement/Prospectus, Meridian and
CoreStates Financial Corp, a bank holding company with its principal offices
located in Philadelphia, Pennsylvania ("CoreStates"), entered into an
Agreement and Plan of Merger, dated as of October 10, 1995 (the
"Meridian/CoreStates Merger Agreement"), pursuant to which Meridian will
merge with and into CoreStates (the "Meridian/CoreStates Merger"), with
CoreStates being the surviving corporation. The Meridian/CoreStates Merger
Agreement provides that upon completion of the Meridian/CoreStates Merger,
each share of Meridian Common Stock will be exchanged for 1.225 shares of
common stock, par value $1.00 per share, of CoreStates ("CoreStates Common
Stock"), subject to increase under certain limited circumstances but not
subject to decrease. Accordingly, if the Merger is completed, each share of
UCB Common Stock ultimately will be converted into 6.125 shares of CoreStates
Common Stock, assuming the Meridian/CoreStates Merger is also completed,
subject to increase under certain limited circumstances but not subject to
decrease.
Because of the pendency of the Meridian/CoreStates Merger, UCB postponed
the stockholder vote on the Merger Agreement in order to furnish you with
information regarding the proposed Meridian/CoreStates Merger. The enclosed
Supplement provides you with such information.
As described in the Proxy Statement/Prospectus, completion of the Merger
is subject to certain conditions, including the approval of the Merger
Agreement by UCB's stockholders and by various regulatory agencies. Subject
to the foregoing conditions, the Merger currently is expected to close early
in the first quarter of 1996, but there can be no assurance that such
conditions will be met or, if met, as to the timing of the closing of the
Merger.
As described in this Supplement, the Meridian/CoreStates Merger is subject
to certain conditions, including the approval of the Meridian/CoreStates
Merger Agreement by the shareholders of both Meridian and CoreStates and
various regulatory agencies, including the Board of Governors of the Federal
Reserve System. Subject to the foregoing conditions, the Meridian/CoreStates
Merger currently is expected to close in the second quarter of 1996, but
there can be no assurance as to whether such conditions will be met or, if
met, as to the timing of the closing.
UCB's Board of Directors has considered the Meridian/CoreStates Merger,
confirmed its approval of the Merger and determined that the Merger remains
in the best interests of the stockholders of UCB. The Board accordingly
confirms its recommendation that you vote for APPROVAL of the Merger
Agreement.
This Supplement describes the Meridian/CoreStates Merger and provides
information which may be important to your vote at the Special Meeting.
Please review this material carefully. The Supplement should be read in
conjunction with the Proxy Statement/Prospectus mailed to you on or about
September 25, 1995, a copy of which has been included with the Supplement for
your convenience.
<PAGE>
IF YOU HAVE NOT YET SIGNED AND RETURNED THE PROXY CARD ENCLOSED WITH THE
PROXY STATEMENT/PROSPECTUS DATED SEPTEMBER 25, 1995, OR IF YOU WISH TO REVOKE
SUCH PROXY AND CHANGE YOUR VOTE, I URGE YOU TO EXECUTE, DATE, AND RETURN THE
ENCLOSED BLUE PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE AS SOON AS
POSSIBLE TO ENSURE THAT YOUR SHARES WILL BE VOTED AT THE SPECIAL MEETING. YOU
NEED NOT EXECUTE THE ENCLOSED BLUE PROXY CARD IF YOU PREVIOUSLY HAVE
EXECUTED, DATED, AND RETURNED A PROXY CARD AND YOU DO NOT WISH TO CHANGE YOUR
VOTE. YOU SHOULD NOT SEND IN CERTIFICATES FOR YOUR SHARES OF UCB COMMON STOCK
AT THIS TIME.
As of November 1, 1995, the date the Special Meeting was originally
convened, UCB had received proxies from holders representing 91.7% of the
outstanding shares of UCB Common Stock and 91.4% of the outstanding shares
had been voted in favor of the Merger Agreement. Unless a substantial number
of such proxies are revoked, the management of UCB expects the Merger
Agreement to be approved at the Special Meeting, although there can be no
assurance that stockholders will not revoke their proxies.
It is very important for your shares to be represented at the Special
Meeting, regardless of whether you plan to attend in person and whether or
not you have previously executed and returned the proxy card enclosed with
the Proxy Statement/Prospectus dated September 25, 1995. The affirmative vote
of at least 66 2/3 % of the outstanding shares of UCB Common Stock is
required to approve the Merger Agreement. Therefore, a failure to vote will
have the same effect as a vote against the Merger Agreement.
On behalf of the UCB Board of Directors, I thank you for your support and
patience in light of the delay resulting from the proposed
Meridian/CoreStates Merger, and urge you to vote for approval of the Merger
Agreement.
Sincerely yours,
/s/ Eugene H. Bauer
------------------------------
Eugene H. Bauer
Chairman of the Board and
Chief Executive Officer
<PAGE>
MERIDIAN BANCORP, INC.
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K SHOWING THE LOCATION IN THE
PROXY STATEMENT/PROSPECTUS OR PROXY STATEMENT/PROSPECTUS SUPPLEMENT
OF THE INFORMATION REQUIRED BY PART I OF FORM S-4
<TABLE>
<CAPTION>
Location in Proxy
Statement/Prospectus
Form S-4 Item No. or Supplement
--------------------------------------- ---------------------------------------
<S> <C> <C>
A. Information About the Transaction.
1. Forepart of Registration Statement
and Outside Front Cover Page of
Prospectus........................... Proxy Statement/Prospectus: Outside
Front Cover Page of Registration
Statement; Supplement: Outside Front
Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus.................. Proxy Statement/Prospectus: Table of
Contents; Available Information;
Incorporation of Certain Documents by
Reference Supplement: Table of
Contents; Available Information;
Incorporation of Certain Documents by
Reference
3. Risk Factors, Ratio of Earnings to
Fixed Charges and Other Information.. Proxy Statement/Prospectus: Summary;
Supplement: Recent Developments;
Updated Market Prices; Updated
Comparative Per Common Share Data;
Update of Required Regulatory
Approvals; Meridian Selected Historical
Financial Data; UCB Selected Historical
Financial Data; Certain Information
Regarding Pending Meridian/CoreStates
Merger
4. Terms of the Transaction............. Proxy Statement/Prospectus:
Introduction; The Special Meeting; The
Merger; Interests of Certain Persons in
the Merger; Certain Related
Transactions; Description of Meridian
Capital Securities; Comparison of
Shareholder Rights; Supplement: Certain
Information Regarding the Pending
Meridian/CoreStates Merger; Comparison
of Shareholder Rights
5. Pro Forma Financial Information ..... Proxy Statement/Prospectus: Summary;
Selected Pro Forma Combined Financial
Information; Supplement: Selected Pro
Forma Combined Financial Information
<PAGE>
Location in Proxy
Statement/Prospectus
Form S-4 Item No. or Supplement
--------------------------------------- ---------------------------------------
6. Material Contacts with the Company
Being Acquired....................... Proxy Statement/Prospectus: The Merger;
Interests of Certain Persons in the
Merger; Certain Related Transactions
7. Additional Information Required for
Reoffering by Persons and Parties
Deemed to be Underwriters........... Not Applicable
8. Interests of Named Experts and
Counsel............................. Legal Matters
9. Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities .................... Not Applicable
B. Information About the Registrant.
10. Information with Respect to S-3
Registrants ........................ Proxy Statement/Prospectus: Summary;
Description of Meridian; Meridian
Selected Historical Financial
Information; Supplement: Available
Information; Incorporation of Certain
Information by Reference; Meridian
Selected Historical Financial Data;
Certain Information Regarding Pending
Meridian/CoreStates Merger.
11. Incorporation of Certain Information
by Reference......................... Proxy Statement/Prospectus:
Incorporation of Certain Information by
Reference; Supplement: Incorporation of
Certain Documents by Reference
12. Information with Respect to S-2 or
S-3 Registrants ..................... Not Applicable
13. Incorporation of Certain Information
by Reference......................... Not Applicable
14. Information with Respect to
Registrants Other Than S-2 or
S-3 Registrants...................... Not Applicable
<PAGE>
Location in Proxy
Statement/Prospectus
Form S-4 Item No. or Supplement
--------------------------------------- ---------------------------------------
C. Information About the Company Being
Acquired.
15. Information with Respect to S-3
Companies............................ Proxy Statement/Prospectus: Description
of UCB; UCB Selected Historical
Financial Data; Supplement: Available
Information; Incorporation of Certain
Information by Reference; UCB Selected
Historical Financial Data
16. Information with Respect to S-2 or
S-3 Companies........................ Not Applicable
17. Information with Respect to Companies
Other Than S-2 or S-3 Companies...... Not Applicable
D. Voting and Management Information.
18. Information if Proxies, Consents or
Authorizations are to be Solicited... Proxy Statement/Prospectus:
Incorporation of Certain Documents by
Reference; Summary; The Special
Meeting; The Merger; Supplement:
Incorporation of Certain Documents by
Reference; Recent Developments;
Comparison of Shareholder Rights
19. Information if Proxies, Consents or
Authorizations are not to be
Solicited or in an Exchange Offer.....Not Applicable
</TABLE>
<PAGE>
NOTICE OF ADJOURNED
SPECIAL MEETING OF STOCKHOLDERS
OF
UNITED COUNTIES BANCORPORATION
INITIALLY CONVENED ON NOVEMBER 1, 1995
FOUR COMMERCE DRIVE, CRANFORD, NEW JERSEY 07016
NOTICE is hereby given that the adjourned Special Meeting of Stockholders
of United Counties Bancorporation ("UCB") originally convened at 10:00 a.m.,
November 1, 1995, will be reconvened and held at 10:00 a.m., local time,
Wednesday, February 7, 1996 at the Corporate Headquarters of UCB, Four
Commerce Drive, Cranford, New Jersey 07016. As set forth in the original
Notice of Special Meeting, the following matters will be considered at the
Special Meeting:
1. The approval and adoption of the Agreement and Plan of Merger, dated as
of May 23, 1995 (the "Merger Agreement"), between UCB and Meridian
Bancorp, Inc. ("Meridian"), a copy of which is attached as Annex A to
the accompanying Proxy Statement/Prospectus, providing for the merger
of UCB with and into Meridian (the "Merger"), pursuant to which each
share of the common stock, no par value, $1.00 stated value per share,
of UCB outstanding at the closing of the Merger will be converted into
and become a right to receive 5.00 shares of the common stock, par
value $5.00 per share, of Meridian.
2. Adjournment of the Special Meeting, if necessary, to permit further
solicitation of proxies in the event there are not sufficient votes at
the time of the Special Meeting to constitute a quorum or to approve
the Merger Agreement.
3. Such other matters as may properly be brought before the Special
Meeting or any adjournments thereof.
The Board of Directors of UCB has fixed the close of business on September
15, 1995, as the record date for determining stockholders entitled to notice
of, and to vote at, the Special Meeting and any adjournments thereof,
including this adjournment.
A supplement to the Proxy Statement/Prospectus, as well as the Proxy
Statement/Prospectus, is set forth on the following pages and an additional
form of blue proxy card is enclosed herewith. YOU SHOULD COMPLETE THE
ENCLOSED BLUE PROXY CARD ONLY IF YOU HAVE NOT PREVIOUSLY VOTED OR IF YOU WISH
TO CHANGE YOUR VOTE. To send in a proxy, please complete, sign, date and
return the blue proxy card in the enclosed return envelope. If you attend the
Special Meeting, you may revoke your proxy in accordance with the procedures
described in the Proxy Statement/Prospectus and vote your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Alice R. Cadby
--------------------------------
Alice R. Cadby
Corporate Secretary
Cranford, New Jersey
January 4, 1996
PLEASE DO NOT SEND IN ANY CERTIFICATES FOR YOUR SHARES AT THIS TIME.
<PAGE>
PROXY STATEMENT SUPPLEMENT
(TO PROXY STATEMENT DATED SEPTEMBER 25, 1995)
FOR
SPECIAL MEETING OF STOCKHOLDERS OF
UNITED COUNTIES BANCORPORATION
INITIALLY CONVENED ON NOVEMBER 1, 1995
AND ADJOURNED TO FEBRUARY 7, 1996
FOUR COMMERCE DRIVE
CRANFORD, NEW JERSEY 07016
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 25, 1995)
MERIDIAN BANCORP, INC.
COMMON STOCK
35 NORTH SIXTH STREET
READING, PENNSYLVANIA 19601
This Proxy Statement/Prospectus Supplement (the "Supplement") is being
furnished by United Counties Bancorporation, a New Jersey corporation
("UCB"), to the holders of UCB common stock, no par value, $1.00 stated value
per share ("UCB Common Stock"), in connection with the solicitation of
proxies by UCB's Board of Directors for use at a Special Meeting of
Stockholders of UCB initially convened on Wednesday, November 1, 1995, at
Four Commerce Drive, Cranford, New Jersey 07016 (the "Special Meeting"), and
at any adjournment or adjournments thereof. The Special Meeting was adjourned
until further notice as a result of events subsequent to the mailing of the
Proxy Statement/Prospectus to permit stockholders of UCB to receive and
consider the information contained herein. The Special Meeting will be
reconvened at 10:00 a.m., Wednesday, February 7, 1996, at the corporate
headquarters of UCB, Four Commerce Drive, Cranford, New Jersey. If there are
not sufficient shares represented for a quorum or votes to approve the Merger
Agreement at the Special Meeting, the Special Meeting may be further
adjourned to permit further solicitation. This Supplement is a supplement to
and should be read in conjunction with the accompanying Proxy
Statement/Prospectus dated September 25, 1995, which was initially mailed to
UCB stockholders on or about September 25, 1995. Any statement contained in
that Proxy Statement/Prospectus will be deemed to be modified or superseded
to the extent that a statement set forth herein, or in a document
subsequently filed under the Securities Exchange Act of 1934 and incorporated
by reference herein, modifies or supersedes such statement but, except as so
modified or superseded, all statements contained therein shall remain in full
force and effect as if fully set forth herein.
This Supplement and the accompanying form of Proxy are first being mailed
to the stockholders of record of UCB on or about January 5, 1996.
The purpose of the Special Meeting is to consider and vote upon a proposal
to approve the Agreement and Plan of Merger, dated as of May 23, 1995 (the
"Merger Agreement"), between UCB and Meridian Bancorp, Inc. ("Meridian"),
pursuant to which UCB will merge with and into Meridian (the "Merger"),
subject to the terms and conditions contained therein. See "SUMMARY" and "THE
MERGER AGREEMENT" in the accompanying Proxy Statement/Prospectus, and a copy
of the Merger Agreement which is attached as ANNEX A to the accompanying
Proxy Statement/Prospectus.
Upon completion of the Merger each outstanding share of UCB Common Stock
will be converted into and represent the right to receive 5.00 shares (the
"Exchange Ratio") of Meridian's common stock, $5.00 par value per share
("Meridian Common Stock"). Pursuant to the terms of the Merger Agreement,
cash will be paid in lieu of fractional shares of Meridian Common Stock. For
a more complete description of the Merger Agreement and the terms of the
Merger, see "THE MERGER" in the accompanying Proxy Statement/Prospectus.
Subsequent to mailing the Proxy Statement/Prospectus, Meridian and
CoreStates Financial Corp ("CoreStates") entered into an Agreement and Plan
of Merger, dated as of October 10, 1995 (the "Meridian/CoreStates Merger
Agreement"), which provides for the merger (the "Meridian/CoreStates Merger")
of Meridian into CoreStates, with CoreStates the surviving corporation in the
Meridian/CoreStates Merger. The Meridian/CoreStates Merger Agreement provides
that upon completion of the Meridian/CoreStates Merger, each share of
Meridian Common Stock will be exchanged for 1.225 shares of common stock, par
value $1.00 per share, of CoreStates ("CoreStates Common Stock"), subject to
possible increase under certain limited circumstances but not subject to
decrease. Accordingly, if the Merger is completed, each share of UCB Common
Stock ultimately will be converted into 6.125 shares of CoreStates Common
Stock, assuming the Meridian/CoreStates Merger is also completed. The
Meridian/CoreStates Merger is subject to certain conditions, including the
approval of the Meridian/CoreStates Merger Agreement by the shareholders of
both Meridian and CoreStates and various regulatory agencies.
Meridian Common Stock is traded on the NASDAQ Stock Market under the
symbol "MRDN." On January 3, 1996, the closing price of Meridian Common Stock
was $46.875 per share. UCB Common Stock is listed on the NASDAQ Small-Cap
Market under the symbol "UCTC." On January 3, 1996, the last reported sale
price of UCB Common Stock on the NASDAQ Small-Cap Market was $230.50 per
share. CoreStates Common Stock is listed on the New York Stock Exchange under
the symbol "CFL." On January 3, 1996, the last reported sale price of
<PAGE>
CoreStates Common Stock was $38.25 per share. See "UPDATED MARKET PRICES"
herein. UCB stockholders are urged to obtain current market quotations for
Meridian Common Stock, UCB Common Stock and CoreStates Common Stock. UCB
stockholders are not assured of receiving any specific market value of
Meridian Common Stock or CoreStates Common Stock. The price of Meridian
Common Stock at the effective date of the Merger may be higher or lower than
the market price at the time of entering into the Merger Agreement, at the
time of mailing this Supplement or at the time the Special Meeting is
reconvened. Similarly, the price of CoreStates Common Stock at the effective
date of the Meridian/CoreStates Merger may be higher or lower than the market
price at the time Meridian and CoreStates entered into the
Meridian/CoreStates Merger Agreement, at the time of mailing this Supplement
or at the time the Special Meeting is reconvened or on the dates of the
meetings of CoreStates and Meridian shareholders at which those shareholders
will vote on the Meridian/CoreStates Merger.
Meridian has filed a Registration Statement pursuant to the Securities Act
of 1933, as amended (the "Securities Act"), covering the shares of Meridian
Common Stock which will be issued in connection with the Merger. In addition
to constituting the UCB Proxy Statement for the Special Meeting, the
accompanying Proxy Statement/Prospectus, as amended and supplemented by this
Supplement, constitutes a Prospectus of Meridian with respect to the Meridian
Common Stock to be issued if the Merger is consummated.
THE SHARES OF MERIDIAN COMMON STOCK OFFERED HEREBY HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROXY STATEMENT/PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE SHARES OF MERIDIAN COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS
ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
------
THE DATE OF THIS SUPPLEMENT IS JANUARY 4, 1996.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-------
<S> <C>
AVAILABLE INFORMATION .......................................................................... 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE ................................................ 2
RECENT DEVELOPMENTS ............................................................................ 4
UPDATED MARKET PRICES .......................................................................... 4
UPDATED COMPARATIVE PER COMMON SHARE DATA ...................................................... 6
UPDATE OF REQUIRED REGULATORY APPROVALS ........................................................ 9
MERIDIAN SELECTED HISTORICAL FINANCIAL DATA .................................................... 10
UCB SELECTED HISTORICAL FINANCIAL DATA ......................................................... 12
SELECTED PRO FORMA COMBINED FINANCIAL INFORMATION .............................................. 13
Pro Forma Condensed Consolidated Balance Sheet as of September 30, 1995 ........................ 14
Pro Forma Condensed Consolidated Statements of Income for the Nine Months Ended September 30,
1995 and September 30, 1994 and the Years Ended December 31, 1994, 1993 and 1992 .............. 19
Pro Forma Consolidated Capitalization as of September 30, 1995 ................................. 26
UPDATED OPINION OF UCB's FINANCIAL ADVISOR ..................................................... 27
CERTAIN INFORMATION REGARDING PENDING MERIDIAN/CORESTATES MERGER ............................... 27
Structure of the Meridian/CoreStates Merger ............................................... 27
Effect of Meridian/CoreStates Merger on UCB and UCB Stockholders .......................... 27
Meridian and CoreStates Stock Option Agreements ........................................... 28
Meridian/CoreStates Effective Time ........................................................ 30
Conduct of Business Pending Meridian/CoreStates Merger and Related Matters ................ 30
Representations and Warranties ............................................................ 31
Conditions to Completion of the Meridian/CoreStates Merger ................................ 32
Dividends ................................................................................. 32
Regulatory Approvals Required ............................................................. 33
Certain Federal Income Tax Consequences ................................................... 34
Anticipated Accounting Treatment .......................................................... 35
Termination; Possible Exchange Ratio Increase ............................................. 35
Amendment and Waiver ...................................................................... 38
Interests of Certain Persons in the Meridian/CoreStates Merger ............................ 38
Management and Operations After the Meridian/CoreStates Merger ............................ 39
Consolidation of Operations; Anticipated Cost Savings ..................................... 40
DESCRIPTION OF CORESTATES CAPITAL STOCK ........................................................ 42
General ................................................................................... 42
Common Shares ............................................................................. 42
CoreStates Series Preferred Stock ......................................................... 43
COMPARISON OF SHAREHOLDER RIGHTS ............................................................... 44
General ................................................................................... 44
Authorized Capital ........................................................................ 45
Directors ................................................................................. 45
Removal .............................................................................. 45
Nomination ........................................................................... 45
Election of Directors ................................................................ 46
Cumulative Voting .................................................................... 46
Limited Liability .................................................................... 46
i
<PAGE>
PAGE
-------
Indemnification ...................................................................... 47
Shareholders' Meetings .................................................................... 47
Shareholder Rights Plan ................................................................... 48
Antitakeover Provisions ................................................................... 48
Required Shareholder Vote ................................................................. 50
General .............................................................................. 50
Fundamental Changes .................................................................. 50
Amendment of Articles or Certificate of Incorporation ................................ 51
Amendment of Bylaws ....................................................................... 52
Mandatory Tender Offer Provision .......................................................... 52
Dissenters' Rights ........................................................................ 52
Dividends ................................................................................. 53
Voluntary Dissolution ..................................................................... 53
Preemptive Rights ......................................................................... 53
EXPERTS ........................................................................................ 54
ANNEX A
- -------
UPDATED OPINION OF GOLDMAN, SACHS & CO ......................................................... A-1
</TABLE>
ii
<PAGE>
THIS SUPPLEMENT SHOULD BE READ CAREFULLY AND SHOULD BE READ IN CONJUNCTION
WITH THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS DATED SEPTEMBER 25, 1995,
WHICH WAS INITIALLY MAILED TO UCB STOCKHOLDERS ON OR ABOUT SEPTEMBER 25,
1995.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, IN THE EVENT
YOU HAVE NOT YET SIGNED AND RETURNED THE PROXY CARD ENCLOSED WITH THE PROXY
STATEMENT/PROSPECTUS DATED SEPTEMBER 25, 1995, OR IN THE EVENT YOU WISH TO
REVOKE SUCH PROXY AND CHANGE YOUR VOTE, WHETHER OR NOT YOU PLAN TO BE PRESENT
IN PERSON AT THE SPECIAL MEETING, PLEASE VOTE, DATE AND SIGN THE ENCLOSED
BLUE PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE WHICH DOES NOT REQUIRE
POSTAGE IF MAILED IN THE UNITED STATES. THIS WILL NOT PREVENT YOU FROM VOTING
IN PERSON IF YOU ARE PRESENT AT THE MEETING.
YOU NEED NOT EXECUTE THE ENCLOSED BLUE PROXY CARD IF YOU PREVIOUSLY HAVE
EXECUTED, DATED AND RETURNED A PROXY CARD AND YOU DO NOT WISH TO CHANGE YOUR
VOTE. THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO ITS EXERCISE IN THE
MANNER DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. SEE "THE
SPECIAL MEETING -- Revocability of Proxies." ANY STOCKHOLDER PRESENT AT THE
SPECIAL MEETING, INCLUDING ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF, MAY
REVOKE HIS OR HER PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE
SPECIAL MEETING.
No persons have been authorized to give any information or to make any
representations other than those contained in this Supplement, the
accompanying Proxy Statement/Prospectus or incorporated by reference herein
or therein in connection with the solicitation of proxies or the offering of
securities made hereby and, if given or made, such information or
representation must not be relied upon as having been authorized by Meridian
or UCB. This Supplement, together with the accompanying Proxy
Statement/Prospectus, does not constitute an offer to sell, or a solicitation
of an offer to buy, any securities, or the solicitation of a proxy, in any
jurisdiction to or from any person to whom it is not lawful to make any such
offer or solicitation in such jurisdiction. Neither the delivery of this
Supplement, together with the accompanying Proxy Statement/Prospectus, nor
any distribution of securities made hereunder shall, under any circumstances,
create an implication that there has been no change in the affairs of
Meridian, CoreStates or UCB since the date hereof or that the information
contained herein is correct as of any time subsequent to its date.
All information concerning Meridian and its subsidiaries contained herein,
incorporated herein by reference or supplied herewith has been furnished by
Meridian; all information concerning UCB and its subsidiaries contained
herein, incorporated herein by reference or supplied herewith has been
furnished by UCB; and all information concerning CoreStates and its
subsidiaries contained herein, incorporated by reference or supplied herewith
has been furnished by CoreStates. NO ASSURANCES CAN BE GIVEN BY MERIDIAN,
CORESTATES OR UCB AS TO THE FUTURE VALUE OF MERIDIAN COMMON STOCK OR CORE-
STATES COMMON STOCK OR THAT MERIDIAN OR CORESTATES WILL REALIZE THEIR
RESPECTIVE REVENUE ENHANCEMENT, COST SAVINGS OR OTHER POST-MERGER GOALS, IF
ANY. See "THE MERGER -- Consolidation of Operations: Projected Operating Cost
Savings and Revenue Enhancement" in the accompanying Proxy
Statement/Prospectus and "CERTAIN INFORMATION REGARDING PENDING
MERIDIAN/CORESTATES MERGER -- Consolidation of Options; Anticipated Cost
Savings" herein.
AVAILABLE INFORMATION
Meridian, UCB and CoreStates are subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith file reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). The reports,
proxy statements and other information filed by Meridian, UCB and CoreStates
with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and should be available for inspection and
copying at the following regional offices of the Commission: New York
Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048;
1
<PAGE>
and the Chicago Regional Office, Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material
also can be obtained at prescribed rates from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Meridian has filed with the Commission a Registration Statement on Form
S-4 (together with any amendments thereto, the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Meridian Common Stock to be issued pursuant to the Merger
Agreement. This Supplement and the accompanying Proxy Statement/Prospectus do
not contain all the information set forth in the Registration Statement and
the exhibits thereto. Such additional information may be obtained from the
Commission's principal office in Washington, D.C. Statements contained in
this Supplement, the Proxy Statement/Prospectus or in any document
incorporated by reference herein or therein or supplied herewith or therewith
as to the contents of any contract or other document referred to herein or
therein are not necessarily complete, and, in each instance, reference is
made to the copy of such contract or other document filed as an exhibit to
the Registration Statement or such other document, each such statement being
qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE
The following documents filed with the Commission by Meridian (File No.
0-12364) pursuant to the Exchange Act are incorporated by reference in this
Supplement and the accompanying Proxy Statement/Prospectus:
1. Meridian's Annual Report on Form 10-K for the year ended December 31,
1994 (including certain information contained in Meridian's Proxy
Statement dated March 17, 1995 used in connection with Meridian's 1995
Annual Meeting of Shareholders and incorporated by reference in the
Form 10-K), as amended by a Form 10-K/A No. 1 filed on December 27,
1995.
2. Meridian's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1995, June 30, 1995 and September 30, 1995.
3. Meridian's Current Reports on Form 8-K dated May 23, 1995, June 28,
1995, September 22, 1995, September 26, 1995, October 10, 1995, and
December 28, 1995 (containing consolidated financial statements of
CoreStates for the three years ended December 31, 1994 and the nine
months ended September 30, 1995 and September 30, 1994).
4. Meridian's Registration Statement on Form 8-A dated August 14, 1989, as
amended on July 25, 1994 and November 6, 1995, with respect to
Preferred Stock Purchase Rights registered pursuant to Section12(g) of
the Exchange Act.
The following documents filed with the Commission by UCB (File No.
0-11282) pursuant to the Exchange Act are incorporated by reference in this
Supplement and the accompanying Proxy Statement/Prospectus:
1. UCB's Annual Report on Form 10-K for the year ended December 31, 1994
(including certain information contained in UCB's Proxy Statement dated
March 10, 1995 used in connection with UCB's 1995 Annual Meeting of
Shareholders and incorporated by reference in the Form 10-K).
2. UCB's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1995, June 30, 1995 and September 30, 1995.
3. UCB's Current Reports on Form 8-K filed on June 8, 1995, August 8, 1995
and October 19, 1995.
4. The description of UCB Common Stock set forth in UCB's Registration
Statement filed on Form 8-A filed pursuant to Section 12 of the
Exchange Act, and any amendment or report filed for the purpose of
updating such description.
All documents and reports filed by Meridian and UCB pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Supplement and prior to the date of the Special Meeting shall be deemed to be
incorporated by reference in this Supplement and to be a part hereof from the
dates of filing of such documents or reports. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein
2
<PAGE>
shall be deemed to be modified or superseded for purposes of this
Supplement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Supplement or the accompanying Proxy
Statement/Prospectus.
THIS SUPPLEMENT INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS (OTHER THAN EXHIBITS
TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE) ARE AVAILABLE, WITHOUT CHARGE, TO ANY PERSON, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM THIS SUPPLEMENT IS DELIVERED, ON WRITTEN OR ORAL
REQUEST. DOCUMENTS RELATING TO MERIDIAN MAY BE REQUESTED FROM MERIDIAN
BANCORP, INC., 35 NORTH SIXTH STREET, READING, PENNSYLVANIA 19601 (TELEPHONE
NUMBER (610) 655-2438), ATTENTION: INVESTOR RELATIONS. DOCUMENTS RELATING TO
UCB MAY BE REQUESTED FROM UNITED COUNTIES BANCORPORATION, FOUR COMMERCE
DRIVE, CRANFORD, NEW JERSEY 07016 (TELEPHONE NUMBER (908) 931-6844),
ATTENTION: CORPORATE SECRETARY. IN ORDER TO ENSURE DELIVERY OF THE DOCUMENTS
PRIOR TO THE SPECIAL MEETING, REQUESTS SHOULD BE RECEIVED BY JANUARY 19,
1996.
3
<PAGE>
RECENT DEVELOPMENTS
MERIDIAN/CORESTATES MERGER AGREEMENT
On October 10, 1995, Meridian entered into the Meridian/CoreStates Merger
Agreement with CoreStates, which provides for the Meridian/CoreStates Merger.
Upon completion of the Meridian/CoreStates Merger, among other things, each
outstanding share of Meridian Common Stock will be converted into and
exchanged for 1.225 shares of CoreStates Common Stock, subject to possible
increase under certain limited circum- stances but not subject to decrease.
See "CERTAIN INFORMATION REGARDING PENDING MERIDIAN/CORESTATES MERGER --
Termination; Possible Exchange Ratio Increase."
Under applicable law, the Meridian/CoreStates Merger requires distribution
to UCB stockholders of the information contained herein for their
consideration in connection with their vote regarding the Merger Agreement.
As a result, UCB adjourned until further notice the Special Meeting from its
originally scheduled date of November 1, 1995 and by means of this Supplement
has notified shareholders of record as of the record date that the adjourned
meeting will be reconvened at 10:00 a.m. on February 7, 1996. Assuming (i)
UCB stockholders approve the Merger Agreement at the Special Meeting, (ii)
the Merger is completed and (iii) the Merger is completed prior to the
completion of the Meridian/CoreStates Merger, each outstanding share of UCB
Common Stock will be converted into and exchangeable for 5.00 shares of
Meridian Common Stock.
In addition, assuming completion of the Meridian/CoreStates Merger, each
outstanding share of Meridian Common Stock (including each share of Meridian
Common Stock that will have been issued to UCB stockholders pursuant to the
Merger, assuming the Meridian/CoreStates Merger is completed subsequent to
completion of the Merger) will be converted into and exchanged for 1.225
shares of CoreStates Common Stock, subject to possible increase under certain
limited circumstances but not subject to decrease (the "Meridian/CoreStates
Exchange Ratio"), pursuant to the terms of the Meridian/CoreStates Merger
Agreement. See "CERTAIN INFORMATION REGARDING PENDING MERIDIAN/CORESTATES
MERGER -- Termination; Possible Exchange Ratio Increase." If both the Merger
and the Meridian/CoreStates Merger are completed, each share of UCB Common
Stock ultimately would be converted into 6.125 shares of CoreStates Common
Stock (the product of the Exchange Ratio and the Meridian/CoreStates Exchange
Ratio) except that cash will be paid in lieu of fractional shares of
CoreStates Common Stock, subject to possible increase under certain limited
circumstances but not subject to decrease.
Meridian has set ____________, 1996 as the date for a special meeting of
shareholders at which the holders of Meridian Common Stock are to vote on the
Meridian/CoreStates Merger Agreement and has established December 26, 1995 as
the record date for its shareholders entitled to vote at such meeting.
ACCORDINGLY, THE MERGER WILL NOT BE COMPLETED IN TIME FOR UCB STOCKHOLDERS TO
BECOME MERIDIAN SHAREHOLDERS AND HAVE AN OPPORTUNITY TO VOTE AS MERIDIAN
SHAREHOLDERS ON THE MERIDIAN/CORESTATES MERGER.
AT THE SPECIAL MEETING UCB STOCKHOLDERS WILL BE VOTING ON THE MERGER, AND
THERE IS NO ASSURANCE THAT THE MERIDIAN/CORESTATES MERGER WILL BE COMPLETED.
IF UCB STOCKHOLDERS VOTE TO APPROVE THE MERGER, SUCH STOCKHOLDERS MUST BE
WILLING TO ACCEPT THEIR OWNERSHIP INTEREST IN MERIDIAN WITHOUT REGARD TO
WHETHER THE MERIDIAN/CORESTATES MERGER IS CONSUMMATED. SEE "UNAUDITED PRO
FORMA CONDENSED COMBINED FINANCIAL INFORMATION" HEREIN.
Subject to the conditions described in "CERTAIN INFORMATION REGARDING
PENDING MERIDIAN/CORESTATES MERGER -- Conditions to Completion of the
Meridian/CoreStates Merger" below and the accompanying Proxy
Statement/Prospectus under "THE MERGER -- Conditions to the Merger," the
Merger presently is expected to close early in the first quarter of 1996 and
the Meridian/CoreStates Merger presently is expected to close in the second
quarter of 1996.
UPDATED MARKET PRICES
Meridian Common Stock is traded in the over-the-counter market and is
quoted on the NASDAQ Stock Market (formerly the NASDAQ National Market
System), under the symbol "MRDN." CoreStates Common Stock is listed and
traded principally on the New York Stock Exchange (the "NYSE") under the
symbol "CFL." UCB Common Stock is traded in the over-the-counter market, and
is quoted on the NASDAQ Small-Cap Market under the symbol "UCTC."
4
<PAGE>
The following table sets forth, for the periods indicated, the high and
low sale prices per share for Meridian Common Stock, CoreStates Common Stock
and UCB Common Stock as reported by the NASDAQ Stock Market, in the case of
Meridian, the NYSE, in the case of CoreStates, and the NASDAQ Small-Cap
Market, in the case of UCB.
<TABLE>
<CAPTION>
Meridian CoreStates UCB
---------------- ---------------- ----------------
High Low High Low High Low
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Year
1994:
First Quarter ..... $ 31 1/8 $ 26 7/8 $ 27 3/8 $ 26 7/8 $ 98 $ 95
Second Quarter .... 33 1/4 27 3/8 28 25 100 1/2 95 1/2
Third Quarter ..... 33 1/8 28 3/4 29 1/8 25 5/8 154 1/4 98
Fourth Quarter .... 29 1/4 25 1/2 27 5/8 22 7/8 143 100
1995:
First Quarter ..... 31 1/4 26 1/4 33 25 5/8 127 1/2 110
Second Quarter .... 34 3/8 30 5/8 36 30 1/2 162 124
Third Quarter ..... 41 34 1/8 38 7/8 33 1/2 195 1/2 162
Fourth Quarter .... 47 7/8 38 234 7/8 187
First Quarter
(through January
3, 1996) ....... 47 1/8 46 232 230 1/2
------- ------ ------ ------ ------- ------
</TABLE>
For the nine-month period ended September 30, 1995, the average daily
trading volume in shares of Meridian Common Stock, CoreStates Common Stock
and UCB Common Stock was 218,000, 311,000, and 2,585, respectively.
The following table sets forth market value per share of Meridian Common
Stock, UCB Common Stock, and CoreStates Common Stock for the dates indicated,
and the equivalent market values per share of UCB Common Stock for such dates
based on both the Exchange Ratio and the Meridian/CoreStates Exchange Ratio.
<TABLE>
<CAPTION>
UCB UCB
Equivalent Equivalent
Per Share Per Share
Value Value
Meridian UCB (Meridian CoreStates (CoreStates
Historical Historical Transaction)(2) Historical Transaction)(3)
------------ ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Market Value per share (1):
May 23, 1995 .............. $33.00 $127.50 $165.00 $34.25 $209.78
January 3, 1996 ........... 46.875 230.50 234.375 38.25 234.28
------ ------- ------- ------ -------
</TABLE>
- ------
(1) The market value for Meridian Common Stock, UCB Common Stock and
CoreStates Common Stock represents the last reported sale prices per
share on May 23, 1995, the last business day preceding public
announcement of the Merger and January 3, 1996, the latest practicable
date prior to the mailing of this Supplement.
(2) The pro forma equivalent per share market value of UCB Common Stock at
each specified date was determined by multiplying the last reported sale
price of a share of Meridian Common Stock on such date by the Exchange
Ratio of 5.00 shares of Meridian Common Stock for each share of UCB
Common Stock outstanding.
(3) The pro forma equivalent per share market value of UCB Common Stock at
each specified date was determined by multiplying the last reported sale
price of CoreStates Common Stock on such date by 6.125 (the product of
the Exchange Ratio of 5.00 shares of Meridian Common Stock for each share
of UCB Common Stock outstanding and the Meridian/CoreStates Exchange
Ratio of 1.225 shares of CoreStates Common Stock for each share of
Meridian Common Stock). The Meridian/CoreStates Exchange Ratio is subject
to possible increase under certain limited circumstances but is not
subject to decrease. See "CERTAIN INFORMATION REGARDING PENDING
MERIDIAN/CORESTATES MERGER -- Termination; Possible Exchange Ratio
Increase."
Stockholders are advised to obtain current market quotations for Meridian
Common Stock. No assurance can be given as to the market price of Meridian
Common Stock on or after the Effective Date of the Merger. Stockholders are
also advised to obtain current market quotations for CoreStates Common Stock.
No assurance can be given as to the market price of CoreStates Common Stock at
5
<PAGE>
the effective date of the Meridian/CoreStates Merger (assuming the
Meridian/CoreStates Merger is completed). It is expected that the market
price of Core- States Common Stock will fluctuate between the date of this
Proxy Statement/Prospectus Supplement and the date on which the
Meridian/CoreStates Merger is completed (assuming the Meridian/CoreStates
Merger is completed) and thereafter. UCB stockholders should understand that
at the Special Meeting the stockholders are voting on the Merger, and that
there is no assurance that the Meridian/CoreStates Merger will be completed.
If UCB stockholders vote to approve the Merger, such stockholders must be
willing to accept their ownership interest in Meridian without regard to
whether the Meridian/CoreStates Merger is completed. See "UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL INFORMATION" herein.
UPDATED COMPARATIVE PER COMMON SHARE DATA
The following table sets forth certain unaudited comparative per share
data relating to book value per common share, cash dividends declared per
common share, net income per common share and net income per common share
excluding significant items (i) on an historical basis for Meridian,
CoreStates and UCB, (ii) on a pro forma basis to reflect completion of the
Merger, (iii) on a pro forma basis to reflect completion of the
Meridian/CoreStates Merger, (iv) on an equivalent pro forma basis per share
of UCB Common Stock to reflect completion of the Merger, and (v) on an
equivalent pro forma basis per share of UCB Common Stock to reflect
completion of the Meridian/CoreStates Merger. The following equivalent per
share data assume the Exchange Ratio of 5.00 shares of Meridian Common Stock
for each share of UCB Common Stock outstanding for the Merger and an exchange
ratio of 1.225 shares of CoreStates Common Stock for each share of Meridian
Common Stock for the Meridian/CoreStates Merger.
Meridian expects to achieve certain operating cost savings and revenue
enhancements as a result of the Merger and similarly CoreStates expects to
achieve operating cost savings as a result of the Meridian/CoreStates Merger.
Such cost savings and revenue enhancements are not reflected in the
historical pro forma information set forth in this Supplement. See "THE
MERGER -- Management and Operations After the Merger" in the accompanying
Proxy Statement/Prospectus and "CERTAIN INFORMATION REGARDING PENDING
MERIDIAN/CORESTATES MERGER -- Consolidation of Operations; Anticipated Cost
Savings" herein. This information should be read in conjunction with the
consolidated financial statements of Meridian, CoreStates, UCB, including the
notes thereto, incorporated by reference in this Supplement and accompanying
Proxy Statement/Prospectus and the other financial data appearing elsewhere
in this Supplement and accompanying Proxy Statement/Prospectus. The
information set forth below is not necessarily indicative of the results of
operations of future periods or future combined financial position. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" and "AVAILABLE INFORMATION"
herein.
<TABLE>
<CAPTION>
At or for the
Nine Months
Ended September 30, At or for the Year Ended December 31,
-------------------- -----------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Book Value Per Common Share:
Historical:
Meridian ................. $ 22.65 $ 21.31 $ 21.50 $20.39 $18.75 $17.21 $15.88
CoreStates ............... 16.67 15.65 16.22 16.29 14.48 14.40 13.77
UCB ...................... 92.68 83.09 84.55 74.02 66.02 60.95 56.85
Pro Forma:
Meridian and UCB ......... 21.77 20.57 20.77 19.52 17.86 16.38 15.08
Meridian, CoreStates and
UCB ................... 16.46 16.01 16.42 16.13 14.46 14.04 13.27
Equivalent Per Share of
UCB Common Stock:
Meridian and UCB ...... 108.85 102.85 103.85 97.60 89.30 81.90 75.40
Meridian, CoreStates
and UCB ............. 100.82 98.06 100.57 98.80 88.57 86.00 81.28
Cash Dividends Declared Per
Common Share:
Historical:
Meridian ................. 1.08 1.00 1.34 1.26 .90 1.20 1.20
CoreStates ............... 1.02 .90 1.24 1.14 1.02 .97 .96
UCB ...................... 3.45 2.30 3.29 2.60 2.85 2.20 2.70
Pro Forma(1):
Meridian and UCB ......... 1.08 1.00 1.34 1.26 .90 1.20 1.20
6
<PAGE>
At or for the
Nine Months
Ended September 30, At or for the Year Ended December 31,
-------------------- -----------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- -------- --------
Meridian, CoreStates and
UCB ................... $ 1.02 $ .90 $ 1.24 $ 1.14 $ 1.02 $ .97 $ .96
Equivalent Per Share of
UCB Common Stock:
Meridian and UCB ...... 5.40 5.00 6.70 6.30 4.50 6.00 6.00
Meridian, CoreStates
and UCB ............. 6.25 5.51 7.60 6.98 6.25 5.94 5.88
Net Income Per Common Share:(2)
Historical:
Meridian ................. 2.14 2.03 2.80 2.61 2.44 2.35 1.22
CoreStates ............... 2.23 .97 1.75 2.49 1.97 1.35 .78
UCB ...................... 11.89 8.30 11.12 11.29 9.96 6.28 9.23
Pro Forma: .................
Meridian and UCB(3) ...... 2.21 1.98 2.72 2.57 2.40 2.19 1.34
Meridian, CoreStates and
UCB(4) ................ 2.08 1.21 1.93 2.35 1.97 1.51 .92
Equivalent Per Share of
UCB Common Stock: .....
Meridian and UCB(3) ... 11.05 9.90 13.60 12.85 12.00 10.95 6.70
Meridian, CoreStates
and UCB(4) .......... 12.74 7.41 11.82 14.39 12.07 9.25 5.64
Net Income Per Common Share
Excluding Significant Items:
(2),(5)
Historical:
Meridian ................. 2.51 2.03 2.80 2.81 2.44 2.35 1.22
CoreStates ............... 2.62 2.14 2.92 2.49 1.97 1.35 .78
UCB ...................... 8.33 8.30 11.12 11.29 9.96 6.28 9.23
Pro Forma:
Meridian and UCB(3) ...... 2.40 1.98 2.72 2.74 2.40 2.19 1.34
Meridian, CoreStates and
UCB(4) ................ 2.38 1.95 2.67 2.40 1.97 1.51 .92
Equivalent Per Share of
UCB Common Stock
Meridian and UCB(3) ... 12.00 9.90 13.60 13.70 12.00 10.95 6.70
Meridian, CoreStates
and UCB(4) .......... 14.58 11.94 16.35 14.70 12.07 9.25 5.64
</TABLE>
- ------
(1) Pro forma dividends per share for Meridian and UCB represent historical
dividends paid by Meridian. UCB pro forma equivalent dividends per share
(Meridian and UCB) represent such amounts multiplied by 5.00. Based on
Meridian's current quarterly dividend of $.37 per share, equivalent pro
forma quarterly cash dividends per share of UCB Common Stock (Meridian
and UCB) would be $1.85 per share as a result of the Merger, an increase
of 131.25% from the $.80 normal quarterly dividend paid by UCB for the
quarter immediately prior to execution of the Merger Agreement. See
"UPDATED MARKET PRICES," herein and "DESCRIPTION OF MERIDIAN -- Market
Price of and Dividends on Meridian Common Stock"; "THE MERGER -- Terms of
the Merger -- Management and Operations After the Merger; Post-Merger
Dividend Policy" in the accompanying Proxy Statement/Prospectus.
Pro forma dividends per share for Meridian, CoreStates and UCB represent
historical dividends paid by CoreStates. UCB pro forma equivalent
dividends per share (Meridian, CoreStates and UCB) represent such amounts
multiplied by 6.125). Based on CoreStates' current quarterly dividend of
$.42 per share, equivalent pro forma quarterly cash dividends per share
of UCB Common Stock would be $2.5725 per share as a result of the Merger
and the Meridian/CoreStates Merger, an increase of 221.6% from the $.80
normal quarterly dividend paid by UCB for the quarter immediately prior
to execution of the Merger Agreement. See "UPDATED MARKET PRICES,"
herein.
(2) Based on income before cumulative effect of a change in accounting
principle.
The computation of earnings per share does not include the effect of (i)
Meridian Common Stock which may be issued in connection with Meridian's
Floating Rate Subordinated Capital Notes (the "Notes"), (ii) a
7
<PAGE>
repurchase of up to one million shares of Meridian Common Stock
authorized by Meridian, provided such repurchase does not adversely
affect the ability of Meridian to account for the Merger as a pooling of
interests or (iii) any repurchase of CoreStates Common Stock by
CoreStates. See "DESCRIPTION OF MERIDIAN CAPITAL SECURITIES -- Capital
Notes" in the accompanying Proxy Statement/Prospectus.
Meridian's historical earnings per share are based on weighted average
fully diluted shares outstanding. CoreStates and UCB historical earnings
per share and all pro forma earnings per share are based on weighted
average common shares outstanding.
(3) Pro forma net income per common share for Meridian and UCB represents
historical net income for Meridian and UCB combined on the assumption
that Meridian and UCB had been combined for each period presented on a
pooling of interests basis, divided by the number of shares of Meridian
Common Stock which will be issued and outstanding after the Merger. UCB
equivalent pro forma net income per common share (Meridian and UCB)
represents such amounts multiplied by 5.00.
(4) Pro forma net income per common share for Meridian, CoreStates and UCB
represents historical net income for CoreStates, Meridian and UCB
combined on the assumption that CoreStates, Meridian and UCB had been
combined for each period presented on a pooling of interests basis,
divided by the number of shares of CoreStates Common Stock which will be
issued and outstanding after both the Merger and the Meridian/CoreStates
Merger. UCB equivalent pro forma net income per common share (Meridian,
CoreStates and UCB) represents such amounts multiplied by 6.125.
(5) The following significant non-recurring items are excluded from net
income per share for the nine-month periods ended September 30, 1995 and
1994 and for the years ended December 31, 1994 and 1993:
<TABLE>
<CAPTION>
Pre-tax
Income Statement Per Share
Impact Impact
---------------- -----------
(in thousands) (after tax)
<S> <C> <C>
Meridian:
Nine Months ended September 30, 1995:
Net restructuring charge (see note 7 on page 24) $ (32,000) $(0.37)
Year ended December 31, 1993:
Mortgage banking restructuring charge ............. (17,500) (0.20)
CoreStates:
Nine months ended September 30, 1995:
Net restructuring charge (see note 7 on page 24) .. (104,563) (0.47)
Gain on change in ownership interests in joint
venture ........................................... 19,000 0.08
Nine months ended September 30, 1994 and year ended
December 31, 1994:
Merger-related provision for losses on loans and
other charges ..................................... (253,700) (1.17)
UCB:
Nine months ended September 30, 1995:
Gain on exchange of investment securities ............ 12,008 3.56
</TABLE>
8
<PAGE>
UPDATE OF REQUIRED REGULATORY APPROVALS
The Merger is subject to approval by the Board of Governors of the Federal
Reserve System (the "Federal Reserve") under Sections 3 and 4 of the Bank
Holding Company Act of 1956 (the "BHCA"), but the Federal Reserve's
regulations permit such approval requirement to be waived and for the Federal
Deposit Insurance Corporation (the "FDIC") to undertake the approval process
in connection with its review under the Bank Merger Act. The Federal Reserve
granted Meridian's waiver request by letter dated September 15, 1995.
The FDIC approved the merger of United Counties Trust Company into
Meridian Bank, New Jersey (the "Bank Merger") under the Bank Merger Act by
order dated November 2, 1995. The FDIC approval order expires if the Bank
Merger is not completed by June 2, 1996.
The New Jersey Department of Banking has not yet approved the Bank Merger.
The Meridian/CoreStates Merger is also subject to various regulatory
approvals. See "CERTAIN INFORMATION REGARDING PENDING MERIDIAN/CORESTATES
MERGER -- Regulatory Approvals Required."
MERIDIAN SELECTED HISTORICAL FINANCIAL DATA
The following table sets forth certain selected historical consolidated
summary financial data for Meridian. This data is derived from, and should be
read in conjunction with, the consolidated financial statements of Meridian,
including the notes thereto, and management's discussions and analysis of
financial conditions and results of operations incorporated by reference in
this Supplement and the accompanying Proxy Statement/Prospectus. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" and "AVAILABLE
INFORMATION." The data for the years ended December 31, 1994 through December
31, 1990 are derived from Meridian's consolidated financial statements, which
have been audited. Interim unaudited data for the nine months ended September
30, 1995 and 1994 reflect, in the opinion of management of Meridian, all
adjustments (consisting of normal recurring adjustments) necessary for a fair
presentation of such data. During the second quarter of 1995, Meridian
recorded a restructuring charge of $32.0 million ($20.8 million after tax).
The restructuring charge related to the implementation of a program intended
to reduce Meridian's performance ratio (non-interest expense as a percentage
of income) from its current level to 59.9% or lower by the end of the first
quarter of 1996. The following historical financial data at and for the nine
month period ended September 30, 1995 reflect this restructuring charge.
Results for the nine months ended September 30, 1995 are not necessarily
indicative of results which may be expected for any other interim period or
for the year as a whole.
9
<PAGE>
MERIDIAN SELECTED HISTORICAL FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
At or for the Nine Months
Ended September 30, At or for the Year Ended December 31,
---------------------------- -------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---------- ------------ ---------- ------------------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS FOR THE YEAR
Interest Income ................... $835,178 $720,919 $985,040 $961,690 $1,016,181 $1,123,711 $1,246,867
Interest Expense .................. 375,848 261,736 372,624 344,398 442,998 623,675 775,495
----------- ------------ ------------ ---------- ------------ ----------- ----------
Net Interest Income ............... 459,330 459,183 612,416 617,292 573,183 500,036 471,372
Provision for Possible Loan
Losses(1) ........................ 28,652 22,017 28,086 58,781 81,096 108,990 141,326
----------- ------------ ------------ ---------- ------------- ---------- ----------
Net Interest Income After Provision
for Possible Loan Losses ......... 430,678 437,166 584,330 558,511 492,087 391,046 330,046
Non-Interest Income ............... 187,820 170,573 228,026 274,623 233,613 253,689 180,420
Non-Interest Expenses:
Restructuring Charge(2) ......... 32,000 -- -- -- -- -- --
All Other Expenses .............. 408,302 435,566 579,668 623,526 540,316 476,676 423,993
----------- --------- --------- --------- --------- --------- ---------
Total Non-Interest Expenses ........ 440,302 435,566 579,668 623,526 540,316 476,676 423,993
Income from Continuing Operations
Before Income Taxes and
Cumulative Effect of Changes in
Accounting Principles ........... 178,196 172,173 232,688 209,608 185,384 168,059 86,473
Provision for Income Taxes ......... 56,660 54,230 70,600 59,068 48,679 43,873 23,806
----------- --------- --------- --------- --------- --------- ---------
Income from Continuing Operations
Before Cumulative Effect of
Changes in Accounting Principles 121,536 117,943 162,088 150,540 136,705 124,186 62,667
Loss From Discontinued Operations,
Net of Taxes .................... -- -- -- -- -- (6,500) (25,983)
----------- --------- --------- --------- --------- --------- ---------
Income Before Cumulative Effect of
Changes in Accounting Principles 121,536 117,943 162,088 150,540 136,705 117,686 36,684
Cumulative After-Tax Effect of
Changes in Accounting Principles -- (2,730) (2,730) 7,221 -- -- --
----------- --------- --------- --------- --------- --------- ---------
Net Income ......................... $ 121,536 $ 115,213 $ 159,358 $ 157,761 $ 136,705 $ 117,686 $ 36,684
=========== ========= ========= ========= ========= ========= =========
Net Interest Margin (Taxable
Equivalent Basis) ............... 4.63% 4.78% 4.73% 4.96% 4.77% 4.47% 4.16%
Return on Average Assets(3) ........ 1.10% 1.07% 1.10% 1.11% 1.00% .96% .47%
Return on Average Assets Before
Restructuring Charge(3) ......... 1.29% -- -- -- -- -- --
Return on Average Common
Shareholders' Equity(3) ......... 13.24% 12.89% 13.26% 14.17% 13.63% 14.31% 7.46%
Return on Average Common
Shareholders' Equity Before
Restructuring Charge ............ 15.50% -- -- -- -- -- --
Fully Diluted Earnings Per Share:
Income from Continuing Operations
Before Cumulative Effect of
Changes in Accounting
Principles .................... $ 2.14 $ 2.03 $ 2.80 $ 2.61 $ 2.44 $ 2.35 $ 1.22
Loss from Discontinued
Operations, Net of Taxes ...... -- -- -- -- -- (.12) (.51)
Income Before Cumulative Effect
of Changes in Accounting
Principles .................... 2.14 2.03 2.80 2.61 2.44 2.23 .71
Cumulative After-Tax Effect of
Changes in Accounting
Principles .................... -- (.05) (.05) .13 -- -- --
10
<PAGE>
At or for the Nine Months
Ended September 30, At or for the Year Ended December 31,
---------------------------- -------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---------- ------------ ---------- ------------------------ ----------- ------------
Net Income ..................... 2.14 1.98 2.75 2.74 2.44 2.23 .71
Net Income Before Restructuring
Charge ...................... 2.51 -- -- -- -- -- --
Dividends Declared Per Common
Share(4) .................... 1.08 1.00 1.34 1.26 .90 1.20 1.20
Dividends Paid Per Common Share 1.08 1.00 1.34 1.26 1.20 1.20 1.20
Ratio of Dividends Declared to
Net Income .................. 50% 50% 49% 43% 35% 48% 149%
FINANCIAL CONDITION AT PERIOD-END
Securities ....................... $ 2,800,620 $ 3,475,980 $ 3,307,413 $ 3,060,147 $ 3,405,727 $ 2,853,581 $ 2,153,977
Loans ............................ 10,246,035 9,444,630 9,763,523 9,010,187 8,592,427 8,553,402 9,463,148
Assets ........................... 14,563,170 14,782,400 15,052,647 14,084,787 14,290,325 13,205,391 13,444,753
Deposits ......................... 11,104,414 11,310,179 11,379,567 11,346,151 11,774,702 10,948,133 10,573,972
Total Shareholders' Equity ....... 1,266,311 1,231,596 1,215,085 1,185,633 1,059,319 947,733 817,413
Book Value Per Common Share ...... 22.65 21.31 21.50 20.39 18.75 17.21 15.88
Common Shares Outstanding ........ 55,897,604 57,803,902 56,506,642 58,154,486 56,491,396 55,064,521 51,475,965
Total Shareholders' Equity to
Assets ......................... 8.70% 8.33% 8.07% 8.42% 7.41% 7.18% 6.08%
Risk-Based Capital Ratio
(Unaudited) .................... 13.04% 13.07% 12.73% 13.67% 11.61% 10.37% 8.23%
Allowance for Possible Loan Losses $ 174,133 $ 173,503 $ 169,402 $ 175,078 $ 166,842 $ 179,747 $ 157,785
Allowance for Possible Loan Losses
to Loans ....................... 1.70% 1.84% 1.74% 1.94% 1.94% 2.10% 1.67%
Allowance for Possible Loan Losses
to Non- Performing Loans ....... 195% 168% 176% 117% 90% 80% 90%
Non-Performing Assets as Percentage
of Loans and Assets Acquired in
Foreclosures ................... 1.03% 1.35% 1.24% 2.00% 2.50% 2.88% 1.97%
Non-Performing Assets and Loans
Past Due 90 or more Days as to
Interest or Principal as a
Percentage of Loans and Assets
Acquired in Foreclosures ....... 1.30% 1.56% 1.47% 2.27% 2.98% 3.52% 2.56%
</TABLE>
- ------
(1) Meridian's provision for loan losses on loans in 1990 included an
addition of $75 million to its provision in the third quarter of that
year made in response to weakening of the economy and the real estate
sector in particular and to the changing banking climate.
(2) In June 1995, Meridian completed an internal review of its operations and
businesses and announced a company-wide plan designed to improve its
operating performance and competitive position. As a result of this
review, Meridian recorded a restructuring charge in the second quarter of
1995 of $32.0 million ($20.8 million after-tax or $0.37 per share).
Implementation of the plan began at the end of the second quarter of 1995
and will continue over approximately the next twelve months from that
date. At the end of that period, the process is expected to reduce net
operating expenses on an annualized pre-tax basis by $55 million, while
providing recurring revenue enhancements of $13 million, increasing
Meridian's net income on an annual basis by $0.78 per share.
(3) Return on average total assets and return on average total shareholders'
equity are calculated based on income before cumulative effect of a
change in accounting principle, and where applicable, on income from
continuing operations, net of income taxes. The interim data is
calculated on an annualized basis for purposes of comparability with full
year data.
(4) Cash dividends declared per share for the respective periods prior to
Meridian's acquisition of Commonwealth Bancshares Corporation (on August
31, 1993) and UCB assume that Meridian would have declared cash dividends
per share equal to the cash dividends per share actually declared by
Meridian.
Meridian's historical cash dividends declared per share for the year
ended December 31, 1992, reflect a new dividend payment schedule adopted
in the first quarter of 1992. Dividends paid in 1992 aggregated $1.20 per
share.
11
<PAGE>
UCB SELECTED HISTORICAL FINANCIAL DATA
The following table sets forth certain selected historical consolidated
financial data for UCB. This data is derived from, and should be read in
conjunction with, the consolidated financial statements of UCB, including the
notes thereto, incorporated by reference into this Supplement and the
accompanying Proxy Statement/Prospectus. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE" and "AVAILABLE INFORMATION." The data for the years
ended December 31, 1994 through December 31, 1990 are derived from UCB's
consolidated financial statements, which have been audited. Interim unaudited
data for the nine months ended September 30, 1995 and 1994 reflect, in the
opinion of the management of UCB, all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation of such data.
Results for the nine months ended September 30, 1995 are not necessarily
indicative of results which may be expected for any other interim period or
for the year as a whole.
UCB SELECTED HISTORICAL FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
At or for the Nine Months
Ended September 30, At or for the Year Ended December 31,
----------------------------- -----------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---------- ---------- ---------- --------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Selected Statistics:
Total assets .................. $1,630,462 $1,638,975 $1,680,940 $1,686,513 $1,634,908 $1,542,170 $1,312,161
Total deposits ................ 1,303,225 1,371,234 1,354,738 1,392,837 1,372,463 1,335,641 1,121,793
Total loans, net of unearned
discounts .................... 388,600 368,645 374,375 375,645 376,343 401,766 407,798
Securities available-for-sale . 104,228 106,193 100,070 -- -- -- --
Investment securities ......... 935,114 995,206 965,239 1,083,017 1,035,843 948,147 656,186
Allowance for loan losses ..... 11,042 10,831 11,091 11,014 10,930 9,722 7,772
Stockholders' equity .......... 199,091 178,066 181,583 157,968 142,139 132,867 125,635
Average Balances:
Total assets .................. 1,595,442 1,634,729 1,630,289 1,589,090 1,534,287 1,394,828 1,249,194
Stockholders' equity .......... 190,297 168,616 171,444 150,627 134,586 127,937 117,548
Summary of Operations:
Interest income ............... 77,786 75,166 100,810 101,972 108,053 107,216 106,037
Interest expense .............. 30,498 25,401 34,580 33,399 45,498 59,009 58,271
------------- ------------ ----------- ----------- ------------ ------------ ------------
Net interest income ........... 47,288 49,765 66,230 68,573 62,555 48,207 47,766
Provision for loan losses ..... (500) (825) (825) 175 1,527 2,875 1,019
------------- ------------ ----------- ----------- ------------ ------------ ------------
Net interest income after
provision for loan losses .... 47,788 50,590 67,055 68,398 61,028 45,332 46,747
Other operating income ........ 16,346(1) 5,504 7,108 8,408 9,774 9,654 10,785
Gain on sale of MasterCard/Visa
receivables .................. -- -- -- -- -- -- 8,442
Other operating expense ....... 26,125 29,780 39,333 40,946 38,953 36,254 38,238
------------- ------------ ----------- ----------- ------------ ------------ ------------
Income before income taxes and
cumulative effect of change in
accounting principles ........ 38,009(1) 26,314 34,830 35,860 31,849 18,732 27,736
Income taxes .................. 12,500 8,595 11,038 11,667 10,256 4,976 7,123
------------- ------------ ----------- ----------- ------------ ------------ ------------
Income before cumulative effect
of change in accounting
principles .................. 25,509(1) 17,719 23,792 24,193 21,593 13,756 20,613
Cumulative effect of change in
accounting principles -- ..... -- -- -- (579) (4,031) -- --
------------- ------------ ----------- ----------- ------------ ------------ ------------
Net income .................... $ 25,509(1) $ 17,719 $ 23,792 $ 23,614 $ 17,562 $ 13,756 $ 20,613
============= ============ =========== =========== ============ ============ ============
Dividends:
Cash dividends paid ........... $ 7,405 $ 4,700 $ 8,537 $ 5,358 $ 4,881 $ 4,825 $ 6,028
Payout ratio .................. 29% 27% 36% 23% 28% 35% 29%
12
<PAGE>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
At or for the Nine Months
Ended September 30, At or for the Year Ended December 31,
----------------------------- -----------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---------- ---------- ---------- --------- ----------- ---------- ----------
Per Share:
Income before cumulative effect
of change in accounting
principles ................... $ 11.89(1) $ 8.30 $11.12 $11.29 $ 9.96 $ 6.28 $ 9.23
Cumulative effect of change in
accounting principles ........ -- -- -- (.27) (1.86) -- --
------------- ---------- ------------ ------------ ------------ ------------ --------
Net income .................... $ 11.89(1) $ 8.30 $11.12 $11.02 $ 8.10 $ 6.28 $ 9.23
============= ========== ============ ============ ============ ============ ========
Cash dividends paid ........... $ 3.45 $ 2.20 $ 3.99 $ 2.50 $ 2.25 $ 2.20 $ 2.70
Book value (period-end) ....... 92.68 83.09 84.55 74.02 66.02 60.95 56.85
Outstanding shares:
Average during period ......... 2,145 2,136 2,139 2,142 2,167 2,191 2,232
Period-end .................... 2,148 2,143 2,148 2,134 2,153 2,180 2,210
Operating ratios:
Return on average assets ...... 1.97%(1) 1.45% 1.46% 1.49% 1.14% 0.99% 1.65%
Return on average stockholders'
equity ....................... 16.54(1) 14.01 13.88 15.68 13.05 10.75 17.54
Average stockholders' equity to
average assets ............... 11.93 10.31 10.52 9.48 8.77 9.17 9.41
Regulatory Capital Ratios
(Unaudited):
Leverage ...................... 12.1 10.4 10.8% 9.7% 9.0% 9.5% 10.1%
Tier 1 ........................ 37.6 36.4 35.8 33.3 30.6 25.8 21.3
Total Risk-Based Capital ....... 38.9 37.6 37.0 34.6 31.9 27.3 22.6
</TABLE>
- ------
(1) Includes gain on exchange of securities available for sale of $12.0
million pre-tax ($7.6 million after tax, or $3.56 per share).
SELECTED PRO FORMA COMBINED FINANCIAL INFORMATION
The following sets forth selected unaudited pro forma financial data
reflecting the Merger and the Meridian/CoreStates Merger (each accounted for
using the pooling of interests method of accounting). The pro forma financial
information does not necessarily reflect what the actual results of Meridian
or CoreStates would be following completion of the Merger or the
Meridian/CoreStates Merger.
The pro forma information has been prepared based upon a fixed exchange
ratio of 5.00 shares of Meridian Common Stock for each share of UCB Common
Stock outstanding with respect to the Merger. See "THE MERGER -- Terms of the
Merger" in the accompanying Proxy Statement/Prospectus. The pro forma
information also has been prepared assuming that options to purchase 47,601
shares of UCB Common Stock are converted into options to purchase or
exercised for 238,005 shares of Meridian Common Stock as required by the
Merger Agreement. The pro forma information also assumes a fixed exchange
ratio of 1.225 shares of CoreStates Common Stock for each share of Meridian
Common Stock outstanding with respect to Meridian/CoreStates Merger. The
Meridian/CoreStates Exchange Ratio is subject to possible increase under
certain limited circumstances but is not subject to decrease. See "CERTAIN
INFORMATION REGARDING PENDING MERIDIAN/CORESTATES MERGER -- Termination;
Possible Exchange Ratio Increase" herein.
Meridian expects to realize certain revenue enhancements and to achieve
certain cost savings through the consolidation of certain back office and
support functions and through elimination of redundant costs after the Merger
and CoreStates also expects to achieve operating costs savings as a result of
the Meridian/CoreStates Merger. No assurance can be given that any such cost
savings or revenue enhancements will be realized. The pro forma information
does not reflect any of these anticipated cost savings or revenue
enhancements. See "THE MERGER -- Management and Operations After the Merger"
in the accompanying Proxy Statement/Prospectus and "CERTAIN INFORMATION
REGARDING PENDING MERIDIAN/CORESTATES MERGER -- Consolidation of Operations;
Anticipated Cost Savings" herein.
13
<PAGE>
PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF SEPTEMBER 30, 1995
The following unaudited pro forma condensed combined balance sheet
information combines the historical consolidated balance sheets of Meridian
and UCB as of September 30, 1995. The following unaudited pro forma condensed
combined balance sheet also reflects the Meridian/CoreStates Merger. The
Merger and the Meridian/CoreStates Merger have been reflected as poolings of
interests. Such pro forma financial information does not necessarily reflect
what the actual results of Meridian or CoreStates would be following
completion of the Merger or the Meridian/CoreStates Merger, respectively.
This pro forma information should be read in conjunction with the historical
consolidated financial statements of Meridian, CoreStates and UCB, including
the notes thereto, incorporated by reference in this Supplement and the
accompanying Proxy Statement/Prospectus. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE" herein.
14
<PAGE>
PRO FORMA CONDENSED COMBINED BALANCE SHEET
(UNAUDITED)
SEPTEMBER 30, 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Pro Forma
Meridian UCB Meridian CoreStates Combined
and and Pro Forma and UCB and Pro Forma all
Subsidiaries Subsidiaries Adjustments Pro Forma Subsidiaries Adjustments Eliminations Transactions
------------ ------------ ----------- ----------- ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from
banks ........... $ 610,239 $ 75,663 $ 685,902 $ 2,214,933 $ 2,900,835
Time deposits .... 63,556 -- 63,556 1,755,526 1,819,082
Investment
securities ...... 2,800,620 1,039,342 3,839,962 2,136,612 5,976,574
Loans ............ 10,246,035 388,600 10,634,635 21,168,026 $ 144,252(4,5) 31,946,913
Allowance for loan
losses .......... (174,133) (11,042) (185,175) (501,392) (70,000)(6) (756,567)
Federal funds sold
and securities
purchased under
agreements to
resell .......... 13,996 97,460 111,456 294,916 ($20,000)(1) 386,372
Trading account
securities ...... 116,249 -- 116,249 349 116,598
Due from customer
on acceptances .. 17,960 -- 17,960 493,212 511,172
Premises and
equipment and
other assets .... 886,608 40,439 $ 1,500(2) 928,547 1,283,550 (81,688)(4,5,6,7) 2,130,409
------------ ---------- ---------- ----------- ----------- --------- -------- -----------
Total assets ... $14,581,130 $1,630,462 $ 1,500 $16,213,092 $28,845,732 ($7,436) ($20,000) $45,031,388
============ =========== ======== =========== =========== ========== ======== ===========
LIABILITIES
Deposits:
Domestic:
Non-interest
bearing ... $ 1,782,975 $ 249,211 $ 2,032,186 $ 6,051,497 $ 8,083,683
Interest
bearing ... 9,321,439 1,054,014 10,375,453 13,718,685 24,094,138
Overseas branches
and subsidiaries . -- -- -- 923,930 923,930
------------ ---------- ---------- ----------- ----------- --------- --------- -----------
Total deposits ... 11,104,414 1,303,225 12,407,639 20,694,112 33,101,751
Funds borrowed ... 1,362,129 99,890 1,462,019 2,245,238 ($20,000)(1) 3,687,257
Bank acceptances
outstanding .... 17,960 -- 17,960 490,520 508,480
Other liabilities 315,792 28,256 $ 16,000(2) 360,048 1,238,126 $ 128,305(6,7) 1,726,479
Long-term debt ... 514,524 -- 514,524 1,861,946 2,376,470
------------ ---------- ---------- ----------- ----------- --------- --------- -----------
Total
liabilities .... 13,314,819 1,431,371 16,000 14,762,190 26,529,942 128,305 (20,000) 41,400,437
------------ ---------- ---------- ----------- ----------- --------- --------- -----------
SHAREHOLDERS'
EQUITY
Common stock ..... 291,690 2,530 51,170 (3) 345,390 145,875 (261,400)(8) 229,865
Capital surplus .. 211,426 24,244 (73,403)(3) 162,267 781,905 245,570 (8) 1,189,742
Retained earnings
(6) ............ 833,397 194,550 (14,500)(2) 1,013,447 1,606,581 (135,741)(6,7) 2,484,287
Treasury Stock ... (15,830) (22,233) 22,233 (3) (15,830) (218,571) 15,830 (8) (218,571)
Unallocated shares
held by ESOP ... (54,372) -- (54,372) -- (54,372)
------------ ---------- ---------- ----------- ----------- --------- ---------- -----------
Total
shareholders'
equity ......... 1,266,311 199,091 (14,500) 1,450,902 2,315,790 (135,741) 3,630,951
------------ ---------- ---------- ----------- ----------- --------- ---------- -----------
Total liabilities
and shareholders'
equity ........ $14,581,130 $1,630,462 $ 1,500 $16,213,092 $28,845,732 ($7,436) ($20,000) $45,031,388
============ =========== ======== =========== =========== ========= ========= ===========
Book value per
share (6) ...... $ 22.65 $ 92.68 $ 21.77 $ 16.67 $ 16.46
============ =========== ======== =========== =========== ===========
</TABLE>
See footnotes to the Pro Forma Condensed Combined Balance Sheet
15
<PAGE>
FOOTNOTES TO PRO FORMA CONDENSED COMBINED BALANCE SHEET
(UNAUDITED)
(1) Reflects elimination of intercompany Federal funds transactions between
CoreStates and UCB.
(2) Reflects charges of approximately $16.0 million, $14.5 million after the
related tax effects, which include expenses directly attributable to the
Merger. These expenses include $10.3 million of human resources-related
costs, including employment contracts and severance; $1.5 million of
operations and data processing integration-related expenses; and $4.2
million of other expenses, including investment banker fees and legal
expenses. Deferred taxes receivable, at statutory rates, totalling $1.5
million are reflected in other assets.
(3) Reflects the conversion of 2.148 million outstanding shares of UCB Common
Stock into 10.740 million shares of Meridian Common Stock on September
30, 1995 after giving effect to the cancellation of 381 thousand shares
of UCB Common Stock held as treasury stock.
(4) Effective January 1, 1995, Meridian adopted Statement of Financial
Accounting Standards No. 114, "Accounting by Creditors for Impairment of
a Loan". Prior period financial information has been restated to reflect
the reclassification of in-substance foreclosed loans to non-performing
loans and writedowns against in-substance foreclosed loans from
non-interest expenses to the provision for possible loan losses.
In-substance foreclosed loans for UCB are immaterial.
CoreStates prospectively adopted FAS 114 on January 1, 1995, and as
foreclosed loans are immaterial to CoreStates, prior period financial
information was not restated.
As permitted under pooling of interests accounting, the pro forma
financial information is presented as if CoreStates reclassified
in-substance foreclosed loans to loans, and writedowns against
in-substance foreclosed loans from non-interest expenses to the provision
for possible loan losses for all periods presented.
(5) Loans held for sale in CoreStates' historical financial information have
not exceeded the requirements for separate balance sheet disclosure and
accordingly have been included in total loans. Meridian's historical
financial information reflects loans held for sale as a separate caption
on the balance sheet (or in other assets in a condensed balance sheet).
In the pro forma financial information, combined loans held for sale do
not exceed the requirements for separate balance sheet disclosure and
therefore Meridian's loans held for sale have been reclassified to total
loans.
(6) Based on a preliminary review of Meridian's loan portfolio, CoreStates
has decided to take a different approach to the workout of certain
assets. In CoreStates' general experience, a strategy that involves the
accelerated resolution of problem assets has been more economical than a
long-term work out approach. It has been CoreStates' general experience
that the costs of working out assets as well as other carrying costs
typically outweigh any improvement in those assets' realized value.
CoreStates currently estimates that in connection with the change in
strategic direction and to conform Meridian's consumer lending charge-off
policies to those of CoreStates, CoreStates will take an addition to the
allowance for possible loan losses of approximately $50 million to $80
million and, accordingly, has adjusted September 30, 1995 pro forma
shareholders' equity by $70.0 million, $45.5 million after-tax, the
current estimate based on the preliminary review. CoreStates currently
estimates that the assets related to $66 million of the $70 million
estimated provision will be disposed of within eighteen months of
completion of the Meridian/CoreStates Merger. The carrying value of these
assets is approximately $225 million and the estimated provision
represents 29% of this amount. It is also estimated that the conforming
adjustments, mostly related to consumer lending charge-off policies, will
comprise approximately $4 million of the $70 million estimated provision.
Pro forma shareholders' equity at September 30, 1995 also reflects
charges of approximately $105.0 million, which include: $40.0 million for
employee severance costs; $24.1 million for the costs of consolidating
and closing branches and other duplicate facilities; and $40.9 million
for other expenses directly attributable to CoreStates' pending
acquisition of Meridian. Accordingly, pro forma shareholders' equity at
September 30, 1995 has been reduced by $75.1 million, the after-tax
effect of the charges and expenses directly attributable to CoreStates'
pending acquisition of Meridian. The aggregate cash outflow related to
these charges is expected to be approximately $80 million.
16
<PAGE>
Deferred taxes receivable at statutory rates totalling $54.4 million
related to the approximately $105.0 million of expenses directly
attributable to CoreStates' pending acquisition of Meridian and the $70.0
million addition to Meridian's allowance for possible loan losses are
reflected in other assets.
(7) Reflects the pro forma adoption by Meridian of the FAS 106 transitional
liability of $28.8 million, $18.7 million after-tax, effective January 1,
1992. See footnote 4 on page 24.
(8) Reflects the conversion of 68.563 million pro forma shares of Meridian
Common Stock into 83.990 million shares of CoreStates Common Stock on
September 30, 1995 after giving effect to the cancellation of 515
thousand shares of Meridian Common Stock held as treasury stock.
17
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND SEPTEMBER 30, 1994
AND THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
The following unaudited pro forma condensed combined statements of income
for the nine-month periods ended September 30, 1995 and 1994 give effect to
the Merger and the Meridian/CoreStates Merger as if each had occurred on
January 1, 1995 and 1994, respectively. The unaudited pro forma condensed
combined statements of income for the years ended December 31, 1994, 1993,
and 1992 give effect to the Merger and the Meridian/CoreStates Merger as if
each had occurred on January 1, 1994, 1993 and 1992, respectively. The Merger
and the Meridian/CoreStates Merger have been reflected as poolings of
interests. See "RECENT DEVELOPMENTS" herein and "THE MERGER -- Accounting
Treatment" in the accompanying Proxy Statement/Prospectus. This pro forma
information should be read in conjunction with the historical consolidated
financial statements of Meridian, CoreStates and UCB, including the notes
thereto, incorporated by reference in this Supplement and the accompanying
Proxy Statement/Prospectus. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE" herein.
18
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
UNAUDITED
NINE MONTHS ENDED SEPTEMBER 30, 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Meridian Pro Forma
Meridian UCB and CoreStates Combined
and and UCB and Pro Forma All
Subsidiaries Subsidiaries Pro Forma Subsidiaries Adjustments Eliminations(1) Transactions
-------------- -------------- ---------- ------------- ------------ -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans . $676,172 $ 24,854 $701,026 $1,487,997 $2,189,023
Interest on investment
securities ................ 136,142 50,215 186,357 108,532 294,889
Interest on time deposits in
banks ..................... 4,365 -- 4,365 89,729 94,094
Other interest income ...... 18,499 2,717 21,216 7,689 ($348)(2) 28,557
------------ ------------- ----------- ------------ -------------- -------------- -----------
Total interest income ..... 835,178 77,786 912,964 1,693,947 (348) 2,606,563
------------ ------------- ----------- ------------ -------------- -------------- -----------
INTEREST EXPENSE
Interest on deposits ....... 281,164 27,888 309,052 400,622 709,674
Interest on funds borrowed . 72,079 2,610 74,689 87,284 (348)(2) 161,625
Interest on long-term debt . 22,605 -- 22,605 92,157 114,762
------------ ------------- ----------- ------------ -------------- -------------- ------------
Total interest expense .... 375,848 30,498 406,346 580,063 (348) 986,061
------------ ------------- ----------- ------------ -------------- -------------- ------------
Net interest income ........ 459,330 47,288 506,618 1,113,884 1,620,502
Provision for possible loan
losses .................... 28,652 (500) 28,152 77,500 $ 125 (10) 105,777
------------ ------------- ----------- ------------ -------------- -------------- -----------
Net interest income after
provision for possible loan
losses .................... 430,678 47,788 478,466 1,036,384 (125) 1,514,725
------------ ------------- ----------- ------------ -------------- -------------- ------------
NON-INTEREST INCOME
Securities gains ........... 4,671 12,263(3) 16,934 8,457 25,391
Other operating income ..... 183,149 4,083 187,232 443,740 630,972
------------ ------------- ----------- ------------ -------------- -------------- -----------
Total non-interest income . 187,820 16,346 204,166 452,197 656,363
------------ ------------- ----------- ------------ -------------- -------------- -----------
NON-INTEREST EXPENSES
Restructuring charge (7) ... 32,000 -- 32,000 104,563 136,563
All other expenses ......... 408,302 26,125 434,427 885,620 (1,205)(4,10) 1,318,842
------------ ------------- ----------- ------------ -------------- -------------- ------------
Total non-interest expenses 440,302 26,125 466,427 990,183 (1,205) 1,455,405
------------ ------------- ----------- ------------ -------------- -------------- ------------
Income before income taxes . 178,196 38,009 216,205 498,398 1,080 715,683
Provision for income taxes . 56,660 12,500 69,160 183,115 378(4) 252,653
------------ ------------- ----------- ------------ -------------- -------------- ------------
Net Income ................. $121,536 $25,509(3) $147,045 $ 315,283 $ 702 $ 0 $ 463,030
============ ============= =========== ============ ============== ============== ============
Average common shares
outstanding ............... 55,928 2,145 66,653 141,427 223,078
PER COMMON SHARE DATA (5)
Net Income ................. $2.17 $11.89 $2.21 $2.23 $2.08
Cash dividends declared (8) $1.08 $3.45 $1.08 $1.02 $1.02
</TABLE>
See Footnotes to Pro Forma Condensed Combined Statements of Income.
19
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
UNAUDITED
NINE MONTHS ENDED SEPTEMBER 30, 1994
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Meridian Pro Forma
Meridian UCB and CoreStates Combined
and and UCB and Pro Forma All
Subsidiaries Subsidiaries Pro Forma Subsidiaries Adjustments Eliminations(1) Transactions
------------- -------------- ---------- ------------- ------------ -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans . $576,959 $23,170 $600,129 $1,244,735 $1,844,864
Interest on investment
securities ................ 131,496 49,700 181,196 117,069 298,265
Interest on time deposits in
banks ..................... 3,092 -- 3,092 44,911 48,003
Other interest income ...... 9,372 2,296 11,668 4,856 ($ 675)(2) 15,849
--------- --------- ----------- ---------- ------------ ---------- -----------
Total interest income ..... 720,919 75,166 796,085 1,411,571 (675) 2,206,981
--------- --------- ----------- ---------- ------------ ---------- -----------
INTEREST EXPENSE
Interest on deposits ....... 201,393 23,818 225,211 258,540 483,751
Interest on funds borrowed . 40,644 1,583 42,227 62,768 (675)(2) 104,320
Interest on long-term debt . 19,699 -- 19,699 60,141 79,840
--------- --------- ----------- ---------- ------------ ---------- -----------
Total interest expense .... 261,736 25,401 287,137 381,449 (675) 667,911
--------- --------- ----------- ---------- ------------ ---------- -----------
Net interest income ........ 459,183 49,765 508,948 1,030,122 1,539,070
Provision for possible loan
losses .................... 22,017 (825) 21,192 221,900 $ 4,092(10) 247,184
--------- --------- ----------- ---------- ------------ ---------- -----------
Net interest income after
provision for possible loan
losses .................... 437,166 50,590 487,756 808,222 (4,092) 1,291,886
--------- --------- ----------- ---------- ------------ ---------- -----------
NON-INTEREST INCOME
Securities gains ........... 2,751 -- 2,751 14,143 16,894
Other operating income ..... 167,822 4,497 172,319 407,136 579,455
--------- --------- ----------- ---------- ------------ ---------- -----------
Total non-interest income . 170,573 4,497 175,070 421,279 596,349
--------- --------- ----------- ---------- ------------ ---------- -----------
NON-INTEREST EXPENSES
Restructuring and merger-
related charges ........... -- -- -- 108,700 108,700
All other expenses ......... 435,566 28,773 464,339 902,158 (5,172)(4,10) 1,361,325
--------- --------- ----------- ---------- ------------ ---------- -----------
Total non-interest
expenses ................. 435,566 28,773 464,339 1,010,858 (5,172) 1,470,025
--------- --------- ----------- ---------- ------------ ---------- -----------
Income before income taxes . 172,173 26,314 198,487 218,643 1,080 418,210
Provision for income taxes . 54,230 8,595 62,825 81,326 378 (4) 144,529
--------- --------- ----------- ---------- ------------ ---------- -----------
Income before cumulative
effect of a change in
accounting principle (6) .. $117,943 $17,719 $135,662 $ 137,317 $ 702 $ 0 $ 273,681
========= ========= =========== ========== =========== ========== ===========
Average common shares
outstanding ............... 57,798 2,136 68,478 142,581 226,467
PER COMMON SHARE DATA (5)
Income before cumulative
effect of a change in
accounting principle (6) . $ 2.04 $ 8.30 $ 1.98 $ 0.97 $ 1.21
Cash dividends declared (8) $ 1.00 $ 2.30 $ 1.00 $ 0.90 $ 0.90
</TABLE>
See Footnotes to Pro Forma Condensed Combined Statements of Income
20
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
UNAUDITED
TWELVE MONTHS ENDED DECEMBER 31, 1994
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Meridian Pro Forma
Meridian UCB and CoreStates Combined
and and UCB and Pro Forma All
Subsidiaries Subsidiaries Pro Forma Subsidiaries Adjustments Eliminations Transactions
------------- -------------- ---------- ------------- ------------ -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans . $789,290 $ 31,196 $ 820,486 $1,698,350 $2,518,836
Interest on investment
securities ................ 179,568 66,637 246,205 156,931 403,136
Interest on time deposits in
banks ..................... 4,607 -- 4,607 66,389 70,996
Other interest income ...... 11,575 2,977 14,552 7,857 ($818)(2) 21,591
---------- -------------- ----------- ------------- --------------- ---------------------------
Total interest income ..... 985,040 100,810 1,085,850 1,929,527 (818) 3,014,559
---------- -------------- ----------- ------------- --------------- ------------ -----------
INTEREST EXPENSE
Interest on deposits ....... 283,256 32,393 315,649 364,858 680,507
Interest on funds borrowed . 63,126 2,187 65,313 85,123 (818)(2) 149,618
Interest on long-term debt . 26,242 -- 26,242 90,177 116,419
---------- -------------- ----------- ------------- --------------- ------------ -----------
Total interest expense .... 372,624 34,580 407,204 540,158 (818) 946,544
---------- -------------- ----------- ------------- --------------- ----------- ----------
Net interest income ........ 612,416 66,230 678,646 1,389,369 2,068,015
Provision for possible loan
losses .................... 28,086 (825) 27,261 246,900 $ 5,034 (10) 279,195
---------- -------------- ----------- ------------- --------------- ------------ -----------
Net interest income after
provision for possible loan
losses .................... 584,330 67,055 651,385 1,142,469 (5,034) 1,788,820
---------- -------------- ----------- ------------- --------------- ------------ -----------
NON-INTEREST INCOME
Securities gains ........... 2,998 -- 2,998 18,753 21,751
Other operating income ..... 225,028 6,101 231,129 548,787 779,916
---------- -------------- ----------- ------------- --------------- ------------ -----------
Total non-interest income . 228,026 6,101 234,127 567,540 801,667
---------- -------------- ----------- ------------- --------------- ---------- -------------
NON-INTEREST EXPENSES
Restructuring and merger
related charges ........... - -- -- 108,700 108,700
All other expenses ......... 579,668 38,326 617,994 1,208,861 (6,474)(4,10) 1,820,381
---------- -------------- ----------- ------------- --------------- ------------ -----------
Total non-interest expenses 579,668 38,326 617,994 1,317,561 (6,474) 1,929,081
---------- -------------- ----------- ------------- --------------- ------------ -----------
Income before income taxes . 232,688 34,830 267,518 392,448 1,440 661,406
Provision for income taxes . 70,600 11,038 81,638 143,656 504(4) 225,798
---------- -------------- ----------- ------------- --------------- ------------ -----------
Income before cumulative
effect of a change in
accounting principle (6) .. $162,088 $ 23,792 $ 185,880 $ 248,792 $ 936 $ 0 $ 435,608
========== ============== =========== ============= =============== ============ ===========
Average common shares
outstanding ............... 57,661 2,139 68,356 142,498 226,234
PER COMMON SHARE DATA (5)
Income before cumulative
effect of a change in
accounting principle (6) .. $2.81 $11.12 $2.72 $1.75 $1.93
Cash dividends declared (8) $1.34 $3.29 $1.34 $1.24 $1.24
</TABLE>
See Footnotes to Pro Forma Condensed Combined Statements of Income
21
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
UNAUDITED
TWELVE MONTHS ENDED DECEMBER 31, 1993
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Meridian Pro Forma
Meridian UCB and CoreStates Combined
and and UCB and Pro Forma All
Subsidiaries Subsidiaries Pro Forma Subsidiaries Adjustments Eliminations Transactions
------------- -------------- ---------- ------------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans . $742,298 $ 31,666 $ 773,964 $1,585,015 $2,358,979
Interest on investment
securities ................ 203,399 68,207 271,606 205,170 476,776
Interest on time deposits in
banks ..................... 3,874 -- 3,874 44,340 48,214
Other interest income ...... 12,119 2,099 14,218 7,339 ($577)(2) 20,980
-------- -------- ---------- ---------- -------- ------ ---------
Total interest income ..... 961,690 101,972 1,063,662 1,841,864 (577) 2,904,949
-------- -------- ---------- ---------- -------- ------ ---------
INTEREST EXPENSE
Interest on deposits ....... 283,822 31,652 315,474 379,813 695,287
Interest on funds borrowed . 30,518 1,747 32,265 67,001 (577)(2) 98,689
Interest on long-term debt . 30,058 -- 30,058 69,779 99,837
-------- -------- ---------- ---------- -------- ------ ---------
Total interest expense .... 344,398 33,399 377,797 516,593 (577) 893,813
-------- -------- ---------- ---------- -------- ------ ---------
Net interest income ........ 617,292 68,573 685,865 1,325,271 2,011,136
Provision for possible loan
losses .................... 58,781 175 58,956 121,201 $ 9,215(10) 189,372
-------- -------- ---------- ---------- -------- ------ ---------
Net interest income after
provision for possible loan
losses .................... 558,511 68,398 626,909 1,204,070 (9,215) 1,821,764
-------- -------- ---------- ---------- -------- ------ ---------
NON-INTEREST INCOME
Securities gains (losses) .. 25,280 (172) 25,108 16,110 41,218
Other operating income ..... 249,343 7,190 256,533 557,920 814,453
-------- -------- ---------- ---------- -------- ------ ---------
Total non-interest income . 274,623 7,018 281,641 574,030 855,671
-------- -------- ---------- ---------- -------- ------ ---------
NON-INTEREST EXPENSES
Restructuring charge ....... 17,500 -- 17,500 -- 17,500
All other expenses ....... 606,026 39,556 645,582 1,241,862 (10,636)(4,10) 1,876,808
-------- -------- ---------- ---------- -------- ------ ---------
Total non-interest
expenses ................. 623,526 39,556 663,082 1,241,862 (10,636) 1,894,308
-------- -------- ---------- ---------- -------- ------ ---------
Income before income taxes . 209,608 35,860 245,468 536,238 1,421 783,127
Provision for income taxes . 59,068 11,667 70,735 173,809 497(4) 245,041
-------- -------- ---------- ---------- -------- ------ ---------
Income before cumulative
effect of a change in
accounting principle (6,9) $150,540 $ 24,193 $ 174,733 $ 362,429 $ 924 $ 0 $ 538,086
======== ======== ========== ========== ======== ====== ==========
Average common shares
outstanding ............... 57,194 2,142 67,904 145,398 228,580
PER COMMON SHARE DATA (5)
Income before cumulative
effect of a change in
accounting principle (6) .. $ 2.63 $ 11.29 $ 2.57 $ 2.49 $ 2.35
Cash dividends declared (8) $ 1.26 $ 2.60 $ 1.26 $ 1.14 $ 1.14
</TABLE>
See Footnotes to Pro Forma Condensed Combined Statements of Income
22
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
UNAUDITED
TWELVE MONTHS ENDED DECEMBER 31, 1992
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Meridian Pro Forma
Meridian UCB and CoreStates Combined
and and UCB and Pro Forma All
Subsidiaries Subsidiaries Pro Forma Subsidiaries Adjustments Eliminations Transactions
------------- -------------- ---------- ------------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans . $ 778,878 $ 35,094 $ 813,972 $1,647,763 $2,461,735
Interest on investment
securities ................ 223,427 70,453 293,880 238,851 532,731
Interest on time deposits in
banks ..................... 8,326 -- 8,326 58,613 66,939
Other interest income ...... 5,550 2,506 8,056 16,611 ($450)(2) 24,217
--------- -------- ---------- ---------- -------- ------ ---------
Total interest income ..... 1,016,181 108,053 1,124,234 1,961,838 (450) 3,085,622
--------- -------- ---------- ---------- -------- ------ ---------
INTEREST EXPENSE
Interest on deposits ....... 396,175 43,572 439,747 570,455 1,010,202
Interest on funds borrowed . 29,359 1,926 31,285 60,480 (450)(2) 91,315
Interest on long-term debt . 17,464 -- 17,464 78,425 95,889
--------- -------- ---------- ---------- -------- ------ ---------
Total interest expense .... 442,998 45,498 488,496 709,360 (450) 1,197,406
--------- -------- ---------- ---------- -------- ------ ---------
Net interest income ........ 573,183 62,555 635,738 1,252,478 1,888,216
Provision for possible loan
losses .................... 81,096 1,527 82,623 160,250 $ 17,936(10) 260,809
--------- -------- ---------- ---------- -------- ------ ---------
Net interest income after
provision for possible loan
losses .................... 492,087 61,028 553,115 1,092,228 (17,936) 1,627,407
--------- -------- ---------- ---------- -------- ------ ---------
NON-INTEREST INCOME
Securities gains ........... 2,764 69 2,833 13,805 16,638
Other operating income ..... 230,849 7,698 238,547 596,859 835,406
--------- -------- ---------- ---------- -------- ------ ---------
Total non-interest income . 233,613 7,767 241,380 610,664 852,044
--------- -------- ---------- ---------- -------- ------ ---------
NON-INTEREST EXPENSES
All other expenses ......... 540,316 36,946 577,262 1,306,593 (17,936)(10) 1,865,919
--------- -------- ---------- ---------- -------- ------ ---------
Total non-interest
expenses ................ 540,316 36,946 577,262 1,306,593 (17,936) 1,865,919
--------- -------- ---------- ---------- -------- ------ ---------
Income before income taxes . 185,384 31,849 217,233 396,299 613,532
Provision for income taxes . 48,679 10,256 58,935 128,165 $ 187,100
--------- -------- ---------- ---------- -------- ------ ---------
Income before cumulative
effect of a change in
accounting principle (4) .. $ 136,705 $ 21,593 $ 158,298 $ 268,134 $ 0 $ 0 $ 426,432
========= ======== ========== ========== ======== ====== =========
Average common shares
outstanding ............... 55,201 2,167 66,036 135,813 216,707
PER COMMON SHARE DATA (5)
Income before cumulative
effect of a change in
accounting principle (4) .. $ 2.48 $ 9.96 $ 2.40 $ 1.97 $ 1.97
Cash dividends declared (8) $ 0.90 $ 2.85 $ 0.90 $ 1.02 $ 1.02
</TABLE>
See Footnotes to Pro Forma Condensed Combined Statements of Income
23
<PAGE>
FOOTNOTES TO PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
(UNAUDITED)
(1) The Pro Forma Condensed Combined Statements of Income do not reflect the
estimated $16.0 million of charges and expenses directly attributable to
the Merger since these charges are non-recurring. See footnote 2 on page
16. The Pro Forma Condensed Combined Statements of Income also do not
reflect the estimated $70.0 million provision for possible loan losses
related to Meridian's loan portfolio, or charges and expenses of
approximately $105.0 million directly attributable to CoreStates pending
acquisition of Meridian, since these charges are non-recurring. Were
these expenses reflected in the Pro Forma Condensed Combined Statement of
Income for the nine months ended September 30, 1995, net income would
decrease by $135.1 million, or $0.61 per share.
(2) Reflects the elimination of intercompany interest on Federal funds
transactions between CoreStates and UCB.
(3) Includes gain on exchange of securities available for sale of $12 million
pre-tax and $7.6 million after-tax.
(4) Reflects the adoption of FAS 106, "Employers Accounting for
Postretirement Benefits Other Than Pensions." Meridian adopted FAS 106 on
January 1, 1993, the date required under that statement. As permitted by
FAS 106, Meridian elected not to recognize immediately its $28.8 million
transitional liability, but to amortize that liability over 20 years.
UCB adopted FAS 106 effective January 1, 1992 and elected to recognize
immediately the transitional liability of $6.2 million, $4.0 million
after-tax, as the cumulative effect of a change in accounting principle.
As permitted under FAS 106, CoreStates elected to recognize immediately
the January 1, 1992 transitional liability of $128.7 million pre-tax,
$84.9 million after-tax, as the cumulative effect of a change in
accounting principle in the first quarter of 1992.
As permitted under pooling of interests accounting, the pro forma
financial information is prepared as if Meridian adopted FAS 106
effective January 1, 1992 and immediately recognized the $28.8 million,
$18.7 million after-tax, transitional liability. Pro forma salaries,
wages and benefits have been adjusted accordingly.
(5) CoreStates, Meridian, UCB and pro forma earnings per common share for the
nine months ended September 30, 1995 and 1994 and for the years ended
December 31, 1994, 1993 and 1992 were based on weighted average common
shares outstanding as dilution from potentially dilutive common stock
equivalents was less than 3% for each period.
(6) Meridian adopted FAS 112, "Employers' Accounting for Postemployment
Benefits" on January 1, 1994, the date required under the statement. The
adoption of FAS 112 resulted in a charge of $4.2 million, $2.7 million
after-tax, in the first quarter of 1994. As permitted under pooling of
interests accounting, the pro forma information is prepared as if
Meridian adopted FAS 112 effective January 1, 1993.
The impact of FAS 112 on UCB is immaterial.
Effective January 1, 1993, CoreStates adopted FAS 112. CoreStates
recognized the January 1, 1993 FAS 112 transitional liability of $20.0
million, $13.0 million after-tax as the cumulative effect of a change in
accounting principle.
(7) In June 1995, Meridian completed an internal review of its operations and
businesses and announced a company-wide plan designed to improve its
operating performance and competitive position. As a result of this
review Meridian recorded a restructuring charge in the second quarter of
1995 of $32.0 million ($20.8 million after-tax or $0.37 per share).
In March 1995, CoreStates completed an intensive review of its operations
and businesses and announced a corporate-wide process redesign plan,
which restructures its banking services around customers and enhances
employees' authority to make decisions to benefit customers. As a result
of this process redesign, CoreStates recorded a $110 million pre-tax
restructuring charge, $70.0 million after-tax or $0.49 per share,
24
<PAGE>
in March 1995. CoreStates recorded restructuring credits of $3.0 million,
$1.9 million after-tax or $0.01 per share in the second quarter of 1995
and $2.4 million, $1.5 million after-tax or $0.01 per share in the third
quarter of 1995, related to gains on the curtailment of future pension
benefits associated with employees terminated during the second and third
quarters.
(8) Cash dividends declared per share for the respective periods prior to
Meridian's acquisition of Commonwealth Bancshares Corporation (on August
31, 1993) and UCB assume that Meridian would have declared cash
dividends per share equal to the cash dividends declared per share
actually declared by Meridian.
Cash dividends declared per share for the respective periods prior to
CoreStates' acquisition of First Peoples Corporation (on September 3,
1992), Constellation Bancorp (on March 16, 1994), Independence Bancorp,
Inc. (on June 27, 1994) and Meridian assume that CoreStates would have
declared cash dividends per share equal to the cash dividends per share
actually declared by CoreStates.
(9) Meridian and UCB elected to prospectively adopt FAS 109 on January 1,
1993 and recognize a cumulative benefit/(expense) of $7.2 million and
$(579) thousand, respectively, as the cumulative effect of a change in
accounting principle. CoreStates retroactively adopted FAS 109 in the
first quarter of 1992. As permitted under pooling of interests
accounting, the pro forma financial information is prepared as if
Meridian and UCB also retroactively adopted FAS 109 effective January 1,
1987.
(10) In connection with the adoption of FAS 114, Meridian's historical
Condensed Combined Statements of Income reflect the reclassification of
writedowns against in-substance foreclosed loans from non-interest
expenses to the provision for possible loan losses. As in-substance
foreclosed loans are immaterial to Core- States, CoreStates' historical
financial information reflects the charges associated with writedowns
against in substance foreclosed loans in other non-interest expenses. As
permitted under pooling of interests accounting, the pro forma financial
information is presented as if CoreStates reclassified writedowns
against in substance foreclosed loans from other non-interest expenses
to the provision for possible loan losses.
In-substance foreclosed loans for UCB are immaterial.
25
<PAGE>
PRO FORMA COMBINED CAPITAL RATIOS AS OF SEPTEMBER 30, 1995
The following sets forth certain unaudited pro forma combined capital
ratios of Meridian and United Counties as of September 30, 1995 and, as
adjusted, to give effect to the Merger. The following unaudited pro forma
combined capital ratios also reflect the Meridian/CoreStates transaction. The
unaudited information should be read in conjunction with the historical
consolidated financial statements of Meridian, CoreStates, and UCB, including
the notes thereto, incorporated by reference in this Supplement and the
accompanying Proxy Statement/Prospectus. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE."
PRO FORMA COMBINED CAPITAL RATIOS
AS OF SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
MERIDIAN PRO FORMA
AND COMBINED
UCB ALL
MERIDIAN UCB PRO FORMA CORESTATES TRANSACTIONS
---------- -------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Shareholders' Equity to Assets . 8.70% 12.21% 9.05% 8.03% 8.40%
Tangible Shareholders' Equity to
Assets ........................ 7.93 12.21 8.36 7.25 7.65
Risk-Based Capital:
Tier 1 Ratio ................. 9.60 37.64 10.63 8.09 8.58
Tier 2 Ratio ................. 3.46 1.26 3.37 3.67 3.58
---------- -------- ---------- ------------ --------------
Total Risk-Based Capital ..... 13.06 38.90 14.00 11.76 12.16
Tier 1 Leverage Ratio .......... 7.97 12.15 8.29 7.39 7.41
</TABLE>
26
<PAGE>
UPDATED OPINION OF UCB'S FINANCIAL ADVISOR
On May 23, 1995, Goldman, Sachs & Co. ("Goldman Sachs") delivered its
written opinion to the Board of Directors of UCB that as of the date of such
opinion, the Exchange Ratio pursuant to the Merger Agreement was fair to the
holders of shares of UCB Common Stock. Goldman Sachs subsequently confirmed
its earlier opinion by delivery of its written opinion dated as of September
21, 1995 and its written opinion dated as of January 4, 1996.
The full text of the written opinion of Goldman Sachs dated as of January
3, 1996, which sets forth assumptions made, matters considered and
limitations on the review undertaken in connection with the opinion, is
attached hereto as Annex A to this Supplement and is incorporated herein by
reference. Stockholders of UCB are urged to, and should, read such opinion in
its entirety. In connection with the delivery of its written opinion dated as
of January 4, 1996, Goldman Sachs reviewed the analyses referred to in the
accompanying Proxy Statement/Prospectus (a summary of which is set forth in
the accompanying Proxy Statement/Prospectus, see "THE MERGER -- Opinion of
Financial Advisor") and updated such analyses to the extent they considered
appropriate and also reviewed certain financial information relating to
CoreStates and the Meridian/CoreStates Merger, as set forth in the Goldman
Sachs opinion dated as of January 4, 1996. In addition, Goldman Sachs
confirmed with the managements of UCB, Meridian and CoreStates the absence of
any material change to the information previously reviewed.
Pursuant to a letter agreement dated July 27, 1994 and executed by UCB on
August 5, 1994 (the "Engagement Letter"), UCB has agreed to pay Goldman Sachs
a transaction fee upon consummation of the Merger based on the value of the
consideration received by UCB stockholders. As a result of the increase in
the value of Meridian Common Stock following execution of the
Meridian/CoreStates Merger Agreement, UCB will pay Goldman Sachs a
transaction fee of approximately $3.2 million.
As indicated in the Proxy Statement/Prospectus, Goldman Sachs regularly
provides investment banking and financial advisory services to Meridian. In
that regard, Goldman Sachs has been engaged to provide Meridian certain
financial advisory services in connection with the Meridian/Corestates
Merger. Meridian has paid Goldman Sachs a fee of $3.3 million for providing
such services. In addition, Meridian has paid Goldman Sachs a fee of $250,000
for work relating to preparation of a strategic alternatives study and
presentation of such study to Meridian's Board of Directors in September
1995. Meridian has agreed to reimburse Goldman Sachs for its reasonable
out-of-pocket expenses, including attorneys' fees, and to indemnify Goldman
Sachs against certain liabilities, including certain liabilities under the
federal securities laws, in connection with these engagements.
CERTAIN INFORMATION REGARDING PENDING
MERIDIAN/CORESTATES MERGER
The following summary of the pending Meridian/CoreStates Merger is
included to provide certain information regarding that transaction should it
be completed. Information provided regarding the Meridian/CoreStates Merger
will apply to UCB stockholders only if both the Merger and the
Meridian/CoreStates Merger are completed. This summary is necessarily
incomplete and is qualified in its entirety by reference to the more detailed
information, including a copy of the Meridian/CoreStates Merger Agreement and
historical financial information regarding CoreStates, contained in
Meridian's Current Reports on Form 8-K dated October 10, 1995 and December
28, 1995 (which are incorporated herein by reference).
CORESTATES FINANCIAL CORP
CoreStates is a bank holding company incorporated under the laws of the
Commonwealth of Pennsylvania. CoreStates' principal bank subsidiaries are
CoreStates Bank, N.A., a national banking association headquartered in
Philadelphia, Pennsylvania; New Jersey National Bank, a national banking
association headquartered in Ewing Township, New Jersey; and CoreStates Bank
of Delaware, N.A., a national banking association with its sole office in New
Castle County, Delaware (collectively, the "CoreStates Banking
Subsidiaries"). Through the CoreStates Banking Subsidiaries, CoreStates is
engaged in the business of providing wholesale banking services, Consumer
Financial Services, including retail banking, trust and investment management
services, and electronic payment services. As of September 30, 1995,
CoreStates had, on a consolidated basis, approximately $28.85 bil-
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lion in assets, $20.69 billion in deposits and $2.32 billion in shareholders'
equity. CoreStates was the 31st largest bank holding company in the United
States measured by total assets at September 30, 1995; after giving effect to
the Meridian/CoreStates Merger, CoreStates believes it would have been the
21st largest in the United States as of that date.
STRUCTURE OF THE MERIDIAN/CORESTATES MERGER
Subject to the terms and conditions of the Meridian/CoreStates Merger
Agreement and in accordance with Pennsylvania law, at the effective time of
the Meridian/CoreStates Merger (the "Meridian/CoreStates Effective Time"),
Meridian will merge with and into CoreStates. CoreStates will be the
continuing corporation in the Meridian/CoreStates Merger, and will continue
its corporate existence under Pennsylvania law under the name "CoreStates
Financial Corp." At the Meridian/CoreStates Effective Time, the separate
corporate existence of Meridian will terminate. The Articles of Incorporation
and Bylaws of CoreStates, as in effect immediately prior to the
Meridian/CoreStates Effective Time, will continue unchanged after the
Meridian/CoreStates Effective Time.
EFFECT OF MERIDIAN/CORESTATES MERGER ON UCB AND UCB STOCKHOLDERS
Upon completion of the Meridian/CoreStates Merger, except as described
below, each outstanding share of Meridian Common Stock, other than certain
shares held in Meridian's treasury or held by CoreStates or any wholly-owned
subsidiary of CoreStates or Meridian, will be automatically converted into
1.225 fully paid and nonassessable shares of CoreStates Common Stock (except
that cash will be paid in lieu of fractional shares), subject to possible
increase in certain limited circumstances but not subject to decrease. See
"-- Termination; Possible Exchange Ratio Increase" below. Accordingly, if
both the Merger and the Meridian/CoreStates Merger are completed, each share
of UCB Common Stock ultimately would be converted into 6.125 shares of
CoreStates Common Stock (the product of the Exchange Ratio and the
Meridian/CoreStates Exchange Ratio), except that cash will be paid in lieu of
fractional shares of Meridian Common Stock.
Meridian and UCB presently expect that the Merger, if approved by UCB's
stockholders at the Special Meeting, will close early in the first quarter of
1996, although there can be no assurance that all conditions to the Merger
will be met or as to the timing of such conditions being met and,
accordingly, there can be no assurance as to the timing or occurrence of the
Merger. See "THE MERGER -- Conditions to the Merger" in the accompanying
Proxy Statement/Prospectus. As of November 1, 1995, the date the Special
Meeting was originally convened, UCB had received proxies from holders
representing 91.7% of the outstanding shares of UCB Common Stock and 91.4% of
the outstanding shares had been voted in favor of the Merger Agreement.
Unless a substantial number of such proxies are revoked, the management of
UCB expects the Merger Agreement to be approved at the Special Meeting,
although there can be no assurance that shareholders will not revoke their
proxies.
The Meridian/CoreStates Merger is subject to the conditions described
below under "Conditions to Completion of the Meridian/CoreStates Merger." The
Meridian/CoreStates Merger presently is expected to close in the second
quarter of 1996, but there can be no assurance that all conditions to the
Meridian/CoreStates Merger will be met or as to the timing of such conditions
being met and, accordingly, there can be no assurance as to the timing or
occurrence of the Meridian/CoreStates Merger.
Meridian has set ____________, 1996 as the date for a special meeting of
shareholders at which the holders of Meridian Common Stock are to vote on the
Meridian/CoreStates Merger Agreement and has established December 26, 1995 as
the record date for its shareholders entitled to vote at such meeting.
ACCORDINGLY, THE MERGER WILL NOT BE COMPLETED IN TIME FOR UCB STOCKHOLDERS TO
BECOME MERIDIAN SHAREHOLDERS AND HAVE AN OPPORTUNITY TO VOTE AS MERIDIAN
SHAREHOLDERS ON THE MERIDIAN/CORESTATES MERGER.
The Meridian/CoreStates Exchange Ratio was determined through arm's-length
negotiations between Core- States and Meridian. The Meridian/CoreStates
Exchange Ratio is subject to increase in certain limited circumstances but is
not subject to decrease. See "-- Termination; Possible Exchange Ratio
Increase."
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On a pro forma basis after giving effect to the Meridian/CoreStates Merger
(and after giving effect to the Merger), the percentage of total assets,
shareholders' equity, net interest income and net income of CoreStates at and
for the three months ended September 30, 1995 contributed by Meridian would
have been 36.0%, 40.0%, 31.2% and 31.7%, respectively.
MERIDIAN AND CORESTATES STOCK OPTION AGREEMENTS
In conjunction with the execution and delivery of the Meridian/CoreStates
Merger Agreement, Meridian and CoreStates entered into stock option
agreements, dated as of October 10, 1995 (in each case, a "Stock Option
Agreement"), pursuant to which Meridian and CoreStates granted to each other
options to purchase up to 19.9% of the outstanding Meridian Common Stock, in
the case of CoreStates, and up to 19.9% of the outstanding Core- States
Common Stock, in the case of Meridian. The Stock Option Agreements will
become exercisable upon the occurrence of certain events as set forth in the
respective Stock Option Agreements and will be exercisable at a per share
price of $38.50, in the case of Meridian Common Stock, and $38.8125, in the
case of CoreStates Common Stock. The number of shares subject to such options
and the purchase price per share provided for therein are subject to
adjustment as provided in the respective Stock Option Agreements. Meridian
and Core- States approved and entered into the respective Stock Option
Agreements to induce each other to enter into the Meridian/CoreStates Merger
Agreement. The Stock Option Agreements are intended to increase the
likelihood that the Meridian/CoreStates Merger will be completed in
accordance with its terms. Consequently, certain aspects of the Stock Option
Agreements may have the effect of discouraging persons who might now or prior
to the completion of the Meridian/CoreStates Merger be interested in
acquiring all of or a significant interest in Meridian or CoreStates from
considering or proposing such an acquisition, even if, in the case of
Meridian, such persons were prepared to offer to pay consideration to
Meridian shareholders which had a higher current market price than the shares
of CoreStates Common Stock to be received per share of Meridian Common Stock
pursuant to the Meridian/CoreStates Merger Agreement.
REQUIRED SHAREHOLDER VOTE
Meridian. Shareholders of Meridian entitled to cast at least 66-2/3% of
the votes which all shareholders are entitled to cast on the record date (the
"Meridian Record Date," which has been established as the close of business
on December 26, 1995) must be represented in person or by proxy at the
special meeting of Meridian shareholders called to approve the
Meridian/CoreStates Merger Agreement in order for a quorum to be present for
purposes of voting on the Meridian/CoreStates Merger Agreement. The approval
and adoption of the Meridian/CoreStates Merger Agreement will require the
affirmative vote of the holders of a majority of the shares of Meridian
Common Stock present and voting at the special meeting of Meridian
shareholders.
As of the Meridian Record Date, directors and executive officers of
Meridian and their affiliates beneficially owned and were entitled to vote
4,970,703 shares of Meridian Common Stock, which represented approximately
8.55% of the shares of Meridian Common Stock outstanding on the Meridian
Record Date. Each Meridian director and executive officer has indicated his
or her present intention to vote the Meridian Common Stock so owned by him or
her for approval and adoption of the Meridian/CoreStates Merger Agreement. As
of the Meridian Record Date, various subsidiaries of Meridian, as
fiduciaries, custodians or agents, had sole or shared voting power with
respect to 6,078,960 shares of Meridian Common Stock, representing
approximately 10.46% of the shares of Meridian Common Stock outstanding on
the Meridian Record Date. As of the Meridian Record Date, CoreStates'
directors and executive officers beneficially owned 1,700 shares of Meridian
Common Stock, which represented less than 0.01% of the shares of Meridian
Common Stock outstanding on the Meridian Record Date, and various
subsidiaries of CoreStates, as fiduciaries, custodians of agents, had sole of
shared voting power with respect to 94,867 shares of Meridian Common Stock,
or 0.16% of the shares of Meridian Common Stock outstanding on the Meridian
Record Date. Each CoreStates director and executive officer has indicated his
or her present intention to vote all of the shares of Meridian Common Stock
so owned by him or her for approval and adoption of the Meridian/CoreStates
Merger Agreement. Based on the foregoing, persons holding an aggregate of
approximately 8.5% of the outstanding shares of Meridian Common Stock on the
Meridian Record Date have indicated their present intention to vote for
approval and adoption of the Meridian/CoreStates Merger Agreement.
CoreStates. Shareholders of CoreStates entitled to cast at least a
majority of the votes which all shareholders are entitled to cast on the
record date (the "CoreStates Record Date," which has been established as the
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close of business on December 18, 1995) must represented in person or by
proxy at the special meeting of CoreStates shareholders called to approve the
Meridian/CoreStates Merger Agreement in order for a quorum to be present for
purposes of voting on the Meridian/CoreStates Merger Agreement and the
proposal to amend the Articles of Incorporation of CoreStates to increase
authorized shares of CoreStates Common Stock (the "CoreStates Charter
Amendment"). See "DESCRIPTION OF CORESTATES CAPITAL STOCK -- General." The
approval and adoption of the Meridian/CoreStates Merger Agreement and the
approval of the CoreStates Charter Amendment will each require the
affirmative vote of the holders of a majority of the shares of CoreStates
Common Stock present and voting at the special meeting of CoreStates
shareholders. The approval of the Meridian/CoreStates Merger Agreement and
the CoreStates Charter Amendment are each contingent upon approval of both
such proposals by CoreStates shareholders. Unless both proposals are
approved, neither will be effected by CoreStates, and the Meridian/CoreStates
Merger will not be consummated.
As of the CoreStates Record Date, directors and executive officers of
CoreStates and their affiliates beneficially owned and were entitled to vote
1,688,238 shares of CoreStates Common Stock, which represented approximately
1.22% of the shares of CoreStates Common Stock outstanding on the CoreStates
Record Date. Each CoreStates director and executive officer has indicated his
or her present intention to vote the CoreStates Common Stock so owned by him
or her for approval of the Meridian/CoreStates Merger Agreement and the
CoreStates Charter Amendment. As of the CoreStates Record Date, CoreStates
and its subsidiaries, as fiduciaries, custodians or agents, had sole or
shared voting power with respect to 2,357,967 shares of CoreStates Common
Stock, representing approximately 1.71% of the shares of CoreStates Common
Stock outstanding on the CoreStates Record Date. As of the CoreStates Record
Date, Meridian's directors or executive officers beneficially owned 4,132
shares of CoreStates Common Stock, which represented less than 0.01% of the
shares of CoreStates Common Stock outstanding on the CoreStates Record Date,
and various subsidiaries of Meridian, as fiduciaries, custodians of agents,
had sole of shared voting power with respect to 373,027 shares of CoreStates
Common Stock, representing approximately 0.16% of the shares of CoreStates
Common Stock outstanding on the CoreStates Record Date. Each Meridian
director and executive officer has indicated his or her present intention to
vote all of the shares of CoreStates Common Stock so owned by him or her for
approval and adoption of the Meridian/ CoreStates Merger Agreement and
approval of the CoreStates Charter Amendment. Based on the foregoing, persons
holding an aggregate of approximately 1.23% of the shares of Core-States
Common Stock outstanding on the CoreStates Record Date have indicated a
present intention to vote for approval and adoption of the
Meridian/CoreStates Merger Agreement and approval of the CoreStates Charter
Amendment.
MERIDIAN/CORESTATES EFFECTIVE TIME
The Meridian/CoreStates Effective Time will be the time of the filing of
Articles of Merger with the Secretary of the Commonwealth of Pennsylvania or
such later time as is specified in such Articles of Merger. The closing of
the Meridian/CoreStates Merger will occur on the first day which is at least
two business days after satisfaction or waiver (subject to applicable law) of
the conditions to completion of the Meridian/CoreStates Merger set forth in
the Meridian/CoreStates Merger Agreement (excluding conditions that, by their
terms, cannot be satisfied until the date of closing) unless another date is
agreed to in writing by Meridian and CoreStates. The Meridian/CoreStates
Merger Agreement may be terminated by either party if, among other reasons,
the Merger is not completed on or before September 30, 1996. See "--
Conditions to Completion of the Meridian/CoreStates Merger" and "--
Termination; Possible Exchange Ratio Increase" below.
CONDUCT OF BUSINESS PENDING MERIDIAN/CORESTATES MERGER AND RELATED MATTERS
Pursuant to the Meridian/CoreStates Merger Agreement, each of CoreStates
and Meridian has made certain covenants, with respect to itself and its
subsidiaries, relating to the conduct of business pending completion of the
Meridian/CoreStates Merger. Among other things, each has agreed (except as
otherwise contemplated by the Meridian/CoreStates Merger Agreement or with
the written consent of the other party) not to do any of the following:
(i) conduct its business other than in the ordinary and usual course;
(ii) issue, sell or otherwise permit to become outstanding any
additional shares of capital stock or give any person the right to acquire
any such shares, other than (a) pursuant to the exercise of stock options
outstanding on October 10, 1995, (b) in connection with acquisitions of
businesses otherwise permitted pending the Meridian/CoreStates Merger,
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including the Merger, (c) in the case of CoreStates, pursuant to (x) employee
benefit plans in effect on October 10, 1995 or (y) a rights agreement which
CoreStates may enter into pending the Meridian/CoreStates Merger of similar
effect as the Meridian rights agreement relating to its shareholder rights
plan or (d) under the relevant Stock Option Agreement;
(iii) make, declare or pay dividends on shares of its capital stock
other than regular quarterly cash dividends of $.37 per share of Meridian
Common Stock and $.34 per share of CoreStates Common Stock (provided that
CoreStates may increase its first quarterly dividend in 1996 and
thereafter and in such case the limit on dividends payable on Meridian
Common Stock will increase proportionately) and dividends by a wholly
owned subsidiary, or redeem or otherwise acquire shares of its capital
stock;
(iv) in the case of Meridian, increase any salaries or employee
benefits or enter into or modify any employee agreements (other than
certain termination agreements contemplated by the Meridian/CoreStates
Merger Agreement) or benefit plans, except for certain increases in the
ordinary course of business, as required by law, to satisfy pre-existing
contractual obligations;
(v) dispose of any material assets, business or property or acquire
material business or property of any other entities except that (a)
Meridian may complete the Merger and (b) CoreStates may make acquisitions
in which the aggregate purchase price paid does not exceed $1.0 billion or
in which the aggregate number of CoreStates shares issued does not exceed
20% of the number of such shares outstanding on September 30, 1995;
(vi) amend its articles of incorporation or bylaws or, in the case of
Meridian, the Meridian Rights Agreement, except that CoreStates may amend
its Articles of Incorporation to increase its authorized capital stock
(see "DESCRIPTION OF CORESTATES CAPITAL STOCK -- General" herein);
(vii) change its accounting methods;
(viii) knowingly take any action that (a) would, or is reasonably
likely to, prevent or impede the Meridian/CoreStates Merger from
qualifying for "pooling of interests" accounting treatment or as a
reorganization within the meaning of Section 368(a) of the Code, or (b) is
intended or is reasonably likely to result in a breach of any
representation or warranty, a condition not being satisfied or a violation
of either Stock Option Agreement or of the Meridian/CoreStates Merger
Agreement; or
(ix) incur any long-term debt other than in the ordinary course.
The Meridian/CoreStates Merger Agreement also provides that without the
prior written consent of the other party, neither Meridian nor CoreStates
will solicit or encourage inquiries or proposals with respect to, or engage
in negotiations concerning, or provide any confidential information to, or
have any discussions with, any person relating to a Takeover Proposal (as
defined in the Meridian/CoreStates Merger Agreement).
REPRESENTATIONS AND WARRANTIES
The Meridian/CoreStates Merger Agreement contains customary mutual
representations and warranties of Meridian and CoreStates relating to, among
other things, (a) corporate organization and similar corporate matters and
capital structures, (b) good standing and the authority to carry on business,
(c) shares of capital stock, (d) subsidiaries, (e) corporate power and
authority, (f) the authorization, execution and delivery of the
Meridian/CoreStates Merger Agreement and Stock Option Agreements, (g) the
absence of violations of or defaults under application laws and such party's
articles of incorporation or bylaws, (h) documents filed by such party with
the Securities and Exchange Commission and the accuracy of the information
included therein, (i) the absence of litigation, (j) compliance with
applicable laws and certain bank regulatory matters, (k) the absence of
defaults under various contracts and the possession of good title to various
properties, (l) brokers and finders' fees, (m) retirement and other employee
plans and matters under the Employee Retirement Income Security Act of 1974,
as amended, (n) the absence of labor unions and the status of labor
relations, (o) directors' and officers' liability insurance, (p) the
inapplicability of certain takeover laws, including Chapter 25 of the
Pennsylvania Business Corporation Law (the "PaBCL"), and, in the case of
Meridian, the inapplicability of Articles Eleventh and Sixteenth of its
Articles of Incorporation and certain provisions of the Meridian Rights
Agreement, (q) required shareholder votes, (r) environmental matters, (s) the
filing of tax returns and payment of taxes, (t) qualification for "pooling of
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interests" accounting and treatment as a "reorganization" for purposes of
Section 368(a) of the Code and (u) the conduct of the business in the ordinary
course and the absence of certain changes since December 31, 1994 which would be
likely to have a Material Adverse Effect (as defined in the Meridian/CoreStates
Merger Agreement). The Meridian/CoreStates Merger Agreement provides that no
representation or warranty shall be deemed to be untrue or incorrect as a result
of the existence or absence of any fact, if such fact together with all other
facts inconsistent with any such representation or warranty, is not reasonably
likely to have a Material Adverse Effect, except that certain representations
and warranties, including those concerning subsidiaries, corporate power and
authority, the inapplicability of certain takeover laws, the required vote and
the conduct of the business in the ordinary course, must be true and correct in
all material respects.
CONDITIONS TO COMPLETION OF THE MERIDIAN/CORESTATES MERGER
Each party's obligation to effect the Meridian/CoreStates Merger is
subject to various conditions which include, in addition to other customary
closing conditions, the following:
(i) approval of the Meridian/CoreStates Merger Agreement by the
requisite vote of the shareholders of CoreStates and Meridian;
(ii) receipt of all required regulatory approvals without the
imposition of any condition or restriction which would reasonably be
expected either (x) to have a Material Adverse Effect after the
Meridian/CoreStates Effective Time on the present or prospective
consolidated financial condition, business or operating results of
CoreStates, or (y) to prevent the parties from realizing a major portion
of the economic benefits of the Meridian/CoreStates Effective Time that
they anticipated at the date of entering into the Meridian/CoreStates
Merger Agreement;
(iii) the receipt of any required third party consents;
(iv) no court or agency having taken any action, nor law or regulation
having been enacted or adopted, which prohibits the Meridian/CoreStates
Merger;
(v) the receipt of letters from each party's independent auditors
relating to "pooling of interests" accounting treatment for the
Meridian/CoreStates Merger;
(vi) in the case of Meridian, the continued accuracy of the
representations and warranties of Core- States, the performance by
CoreStates of all covenants and the delivery by CoreStates of an officers'
certificate to such effect;
(vii) in the case of CoreStates, (a) the continued accuracy of the
representations and warranties of Meridian, the performance by Meridian of
all covenants and the delivery of an officers' certificate to such effect,
and (b) certain events not having occurred for purposes of the Meridian
shareholder rights plan;
(viii) the receipt by CoreStates of an opinion from Simpson Thacher &
Bartlett, and the receipt by Meridian of an opinion from Stevens & Lee, as
to certain federal income tax consequences of the Meridian/CoreStates
Merger; and
(ix) the shares of CoreStates Common Stock issuable in the Merger
having been approved for listing on the NYSE, subject to official notice
of issuance.
The Meridian/CoreStates Merger Agreement permits any condition (other than
a condition required in order to comply with applicable law) to be waived by
the party benefitted thereby.
DIVIDENDS
Each of CoreStates and Meridian has elected to continue to declare until
the Meridian/CoreStates Effective Time their respective regularly scheduled
dividends. The Meridian/CoreStates Merger Agreement requires each of
CoreStates and Meridian to coordinate with the other the payment of dividends
with the intent that holders of CoreStates Common Stock and Meridian Common
Stock shall not receive two dividends, or fail to receive one dividend, for
any calendar quarter.
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REGULATORY APPROVALS REQUIRED
The Meridian/CoreStates Merger is subject to the prior approval of the
Federal Reserve Board and the banking authorities of the Commonwealth of
Pennsylvania and the States of New Jersey and Delaware. In addition, aspects
of the Meridian/CoreStates Merger will require notifications to, and/or
approvals from, certain other federal and state authorities.
The Meridian/CoreStates Merger is subject to approval by the Federal
Reserve Board under Sections 3 and 4 of the Bank Holding Company Act of 1956,
as amended (the "BHCA"). CoreStates filed applications for such approvals
with the Federal Reserve Board on December 12, 1995. Under Section 3 of the
BHCA, the Federal Reserve Board must withhold approval of the
Meridian/CoreStates Merger if it finds that the transaction would result in a
monopoly or be in furtherance of any combination or conspiracy to monopolize
or attempt to monopolize the business of banking in any part of the United
States. In addition, the Federal Reserve Board may not approve the
Meridian/CoreStates Merger if it finds that the effect thereof may be
substantially to lessen competition or to tend to create a monopoly or would
in any other matter be in restraint of trade, unless it finds that any such
anti-competitive effects are clearly outweighed in the public interest by the
probable effects of the Meridian/CoreStates Merger in meeting the convenience
and needs of the communities to be served. In each case, the Federal Reserve
Board will also take into consideration the financial and managerial
resources and future prospects of the banking subsidiaries following the
transactions. The Federal Reserve Board has indicated that it will not
approve a significant acquisition unless the resulting institution has
sufficient capitalization, taking into account, among other things, asset
quality.
In addition, under the Community Reinvestment Act of 1977, as amended (the
"CRA"), the Federal Reserve Board must take into account the record of
performance of each of CoreStates and Meridian in meeting the credit needs of
the entire community, including low and moderate income neighborhoods, served
by each company. As part of its review process in merger transactions, the
Federal Reserve Board frequently receives protests from community groups and
others. All of the banking subsidiaries of CoreStates and Meridian have
received either an "outstanding" or a "satisfactory" CRA rating in their most
recent CRA examinations by their respective federal regulators.
Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 (the "Interstate Act"), certain sections of which became effective
September 29, 1995, the Federal Reserve Board generally may not approve an
application if the applicant (including all insured depository institutions
which are affiliates of the applicant), upon completion of the acquisition,
would control more than 10% of the total deposits of all insured depository
institutions in the United States or 30% or more of the total amount of
deposits of all insured depository institutions in a particular state.
CoreStates does not believe that after the Meridian/CoreStates Merger it
would control deposits in excess of either limitation.
The Federal Reserve Board will furnish notice and a copy of the
application for approval of the Meridian/CoreStates Merger to the Office of
the Comptroller of the Currency (the "OCC"), the Federal Deposit Insurance
Corporation (the "FDIC") and the appropriate state regulatory authorities.
These agencies have 30 days to submit their views and recommendations to the
Federal Reserve Board. The Federal Reserve Board is required to hold a public
hearing in the event it receives a written recommendation of disapproval of
the application from any of these agencies within such 30-day period.
Furthermore, the BHCA and Federal Reserve Board regulations require
publication of notice of, and the opportunity for public comment on the
application submitted by CoreStates for approval of the Meridian/CoreStates
Merger and authorize the Federal Reserve Board to hold a public hearing in
connection therewith if the Federal Reserve Board determines that such a
hearing would be appropriate. Any such hearing or comments provided by third
parties could prolong the period during which the application is subject to
review by the Federal Reserve Board.
Under Section 3 of the BHCA, the Meridian/CoreStates Merger may not be
completed for 30 days from the date of approval by the Federal Reserve Board,
during which time the Merger could be challenged on antitrust grounds. With
the approval of the Federal Reserve Board and the Department of Justice,
however, this waiting period may be reduced to no less than 15 days. The
commencement of an antitrust action by the Justice Department would stay the
effectiveness of Federal Reserve Board approval of the Meridian/CoreStates
Merger unless a court specifically orders otherwise. In reviewing
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the Meridian/CoreStates Merger, the Justice Department could analyze the
Meridian/CoreStates Merger's effect on competition differently than the Federal
Reserve Board, and thus it is possible that the Justice Department could reach a
different conclusion than the Federal Reserve Board regarding competitive
effects.
Under Section 4 of the BHCA and related regulations, the Federal Reserve
Board must consider whether the performance of CoreStates' and Meridian's
nonbanking activities on a combined basis can reasonably be expected to
produce benefits to the public (such as greater convenience, increased
competition and gains in efficiency) that outweigh possible adverse effects
(such as undue concentration of resources, decreased or unfair competition,
conflicts of interest and unsound banking practices). This consideration
includes an evaluation of the financial and managerial resources of
CoreStates and Meridian and the effect of the proposed transaction on those
resources.
Using the above standards, CoreStates and Meridian expect that the Federal
Reserve Board or the Justice Department will request that CoreStates and/or
Meridian divest certain operations in order to alleviate what such agencies
believe would otherwise be an adverse competitive effect. At present, only
preliminary discussions with regulatory authorities have taken place and the
nature and amount of divestitures cannot be determined until further
discussions with the Federal Reserve Board and the Justice Department are
held; accordingly, as of the date of this Supplement, neither CoreStates nor
Meridian can predict with any assurance what the aggregate amount of any such
divestitures might be. While any potential divestitures may affect certain
pro forma combined financial statement amounts, merger and restructuring
costs, cost savings and revenues, CoreStates and Meridian believe, based on
divestitures required in recent comparable transactions, that the aggregate
amount and financial impact of divestitures should not be material to the
business, operations or financial condition of CoreStates and its
subsidiaries, taken as a whole. Under the Meridian/CoreStates Merger
Agreement, CoreStates and Meridian are not obligated to complete the
Meridian/CoreStates Merger if any requisite approval or consent of a
Regulatory Authority (as defined in the Meridian/CoreStates Merger Agreement)
is subject to the imposition of any condition or restriction which would be
reasonably expected either (i) to have a Material Adverse Effect (as defined
in the Meridian/CoreStates Merger Agreement) after the Meridian/CoreStates
Effective Time in the present or prospective consolidated financial
condition, business or operating results of CoreStates, or (ii) to prevent
the parties from realizing the major portion of the economic benefits of the
Meridian/CoreStates Merger and the transactions contemplated thereby that
they anticipated obtaining therefrom on the date of the Meridian/CoreStates
Merger Agreement.
The Meridian/CoreStates Merger will be subject to the prior approval of
the banking regulatory authorities of Pennsylvania, New Jersey and Delaware.
The factors that such state banking authorities will consider in determining
whether to grant their approval include the competitive effects of the
Meridian/CoreStates Merger, the principles of sound banking and the public
interest and the needs of the communities served by CoreStates and Meridian.
Information regarding the competitive effects of the Meridian/CoreStates
Merger is also being provided to the Attorney General of Pennsylvania.
CoreStates' and Meridian's rights to exercise their respective options
under the Stock Option Agreements are also subject to the prior approval of
the Federal Reserve Board, to the extent that the exercise of such respective
options would result in CoreStates or Meridian, as the case may be, owning
more than 5% of the outstanding shares of the other party's common stock. In
considering whether to approve CoreStates' or Meridian's right to exercise
its option, the Federal Reserve Board would generally apply the same
statutory criteria it would apply to its consideration of approval of the
Meridian/CoreStates Merger.
There can be no assurance as to whether or when any of the above-described
regulatory approvals required for completion of the Meridian/CoreStates
Merger will be obtained or as to any conditions that may be imposed in
connection with the granting of such approvals. See "-- Conditions to
Completion of the Meridian/CoreStates Merger."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following describes the principal federal income tax consequences of
the Meridian/CoreStates Merger under the Code, assuming that the
Meridian/CoreStates Merger is completed as contemplated herein. This
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discussion is based on current laws and interpretations thereof, which are
subject to change. The discussion assumes that the Meridian Common Stock
exchanged by each holder thereof in the Meridian/CoreStates Merger is held as
a capital asset and does not take account of rules that may apply to holders
of Meridian Common Stock ("Meridian Shareholders") that are subject to
special treatment under the Code (including, without limitation, insurance
companies, dealers in securities, certain retirement plans, financial
institutions, tax exempt organizations, shareholders who acquired shares
pursuant to the exercise of an employee stock option or otherwise as
compensation or foreign persons). Also, the discussion does not address
state, local or foreign tax consequences.
Tax Opinions. The obligations of CoreStates and of Meridian to complete
the Meridian/CoreStates Merger are subject to the receipt of the opinions of
tax counsel outlined below, unless waived. Neither CoreStates nor Meridian
has requested or will request an advance ruling from the Internal Revenue
Service (the "IRS") as to the tax consequences of the Meridian/CoreStates
Merger.
As of the date of the joint proxy statement prospectus to be mailed to
shareholders of Meridian and Core- States in connection with the
Meridian/CoreStates Merger, Simpson Thacher & Bartlett, counsel to
CoreStates, and Stevens & Lee, counsel to Meridian, will have advised
CoreStates and Meridian, respectively, that in their opinion, based on
certain customary representations and assumptions referred to in such
opinions, (i) the Meridian/CoreStates Merger will be treated for federal
income tax purposes as a "reorganization" within the meaning of Section
368(a) of the Code and (ii) no income, gain or loss will be recognized for
federal income tax purposes by Meridian shareholders upon the exchange in the
Meridian/CoreStates Merger of shares of Meridian for shares of CoreStates
(except to the extent of any cash received in lieu of fractional shares). In
addition, completion of the Meridian/CoreStates Merger is conditioned upon
the receipt by CoreStates and Meridian of the opinions described above dated
as of the closing date of the Meridian/CoreStates Merger.
Cash Received in Lieu of Fractional Shares. A Meridian Shareholder who
receives cash in the Meridian/CoreStates Merger in lieu of a fractional share
interest in CoreStates Common Stock will be treated for federal income tax
purposes as receiving such fractional share interest and then redeeming it
for cash. Such a Meridian Shareholder will recognize gain or loss as of the
Meridian/CoreStates Effective Time in an amount equal to the difference
between the amount of cash received and the portion of the shareholder's
adjusted tax basis in the shares of Meridian Common Stock allocable to the
fractional share interest. Any gain or loss will be capital gain or loss if
the shareholder holds the Meridian Common Stock as a capital asset at the
CoreStates/Meridian Merger and will be long-term capital gain or loss if the
holding period for the fractional share interest deemed to be received and
then redeemed is more than one year.
Tax Basis and Holding Period of CoreStates Common Stock. The tax basis of
the shares of CoreStates Common Stock received by Meridian shareholders will
be the same as the tax basis of their Meridian Common Stock exchanged
therefor (reduced by any amount allocable to a fractional share interest for
which cash is received). The holding period of CoreStates Common Stock
received by Meridian Shareholders will include the holding period of their
Meridian Common Stock exchanged therefor, provided such Meridian Common Stock
is held as a capital asset at the Meridian/CoreStates Effective Time.
ANTICIPATED ACCOUNTING TREATMENT
Management of each of Meridian and CoreStates expect the
Meridian/CoreStates Merger to qualify as a "pooling of interests" for
accounting and financial reporting purposes.
The Meridian/CoreStates Merger Agreement provides that a condition to
completion of the Meridian/CoreStates Merger is the receipt of letters from
Ernst & Young LLP, independent auditors for Core- States, and KPMG Peat
Marwick LLP, independent auditors for Meridian, concurring with managements'
conclusions that the Meridian/CoreStates Merger qualifies for "pooling of
interests" accounting treatment.
TERMINATION; POSSIBLE EXCHANGE RATIO INCREASE
The Meridian/CoreStates Merger Agreement may be terminated at any time
prior to the Meridian/CoreStates Effective Time, by action taken or
authorized by the Board of Directors of the terminating party or parties,
whether before or after approval and adoption of the Meridian/CoreStates
Merger Agreement by the shareholders of Meridian or CoreStates: (a) by mutual
consent of CoreStates and Meridian; (b) by either CoreStates or Meridian if the
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<PAGE>
CoreStates/Merger is not completed by September 30, 1996 (except to the extent
that the failure of the Meridian/CoreStates Merger then to be completed arises
out of or results from the knowing action or inaction of the terminating party);
or (c) by either CoreStates or Meridian if (i) the consent of the Federal
Reserve Board for completion of the Meridian/CoreStates Merger and the other
transactions contemplated by the Meridian/CoreStates Merger Agreement has been
denied by final action and the time for appeal has expired or (ii) any approval
of the shareholders of Meridian or of CoreStates required for the completion of
the Meridian/CoreStates Merger has not been obtained. The Meridian/CoreStates
Merger Agreement may also be terminated at any time prior to (a) the Meridian
special meeting of shareholders to approve the Meridian/CoreStates Merger
Agreement, by CoreStates, if the Board of Directors of Meridian fails to
recommend to its shareholders the approval of the Meridian/CoreStates Merger or
withdraws or modifies or changes such recommendation in a manner adverse to
CoreStates, and (b) the CoreStates special meeting of shareholders to approve
the Meridian/CoreStates Merger Agreement, by Meridian, if the Board of Directors
of CoreStates fails to recommend to its shareholders approval of the
Meridian/CoreStates Merger and the related amendment to the Articles of
Incorporation of CoreStates or withdraws or modifies or changes such
recommendations in a manner adverse to Meridian.
In addition, the Meridian/CoreStates Merger Agreement may be terminated by
the Meridian Board of Directors at its sole option, if either:
(i) both (a) the Average Closing Price on the Determination Date (i.e.,
the average closing price of CoreStates Common Stock for the ten full
trading days ending on the date the Federal Reserve Board approves the
Meridian/CoreStates Merger) is less than $32.725 and (b) the number
obtained by dividing the Average Closing Price on the Determination Date
by $38.50 (the "CoreStates Ratio") is less than the number obtained by
dividing the Index Price (being the weighted average on a given date of
the closing prices of the companies composing the Index Group described
below) on the Determination Date by $41.71 (being the Index Price on
October 9, 1995) and subtracting .15 from such latter number (after such
subtraction, the "Index Ratio"); or
(ii) the Average Closing Price on the Determination Date is less than
$27.75 (the number obtained by multiplying $37.00 (being the last sale
price of CoreStates Common Stock on October 10, 1995 on the NYSE Tape) and
0.75);
provided, however, that the Meridian/CoreStates Merger Agreement would not be
so terminated if Core- States elects, at its sole option, to increase the
Meridian/CoreStates Exchange Ratio as set forth in the Meridian/CoreStates
Merger Agreement and as illustrated below. There can be no assurance that the
Meridian Board of Directors would exercise its right to terminate the
Meridian/CoreStates Merger Agreement if a Termination Event (i.e., the
conditions in either (i) or (ii) above) exists, and if the Meridian Board of
Directors does elect to so terminate the Meridian/CoreStates Merger
Agreement, there can be no assurance that CoreStates will elect to increase
the Meridian/CoreStates Exchange Ratio as provided in the Meridian/CoreStates
Merger Agreement and as illustrated below.
Certain possible effects of the above provisions of the
Meridian/CoreStates Exchange Ratio may be illustrated by the following four
scenarios:
(1) If the Average Closing Price on the Determination Date is not less
than $32.725, there would be no Termination Event and no adjustment to the
Meridian/CoreStates Exchange Ratio.
(2) If the Average Closing Price on the Determination Date is less than
$32.725 and greater than or equal to $27.75, but the CoreStates Ratio is
equal to or greater than the Index Ratio, there would be no Termination
Event and no increase in the Meridian/CoreStates Exchange Ratio.
(3) If the Average Closing Price on the Determination Date is less than
$32.725 and the CoreStates Ratio is less than the Index Ratio, there would
be a Termination Event and the Meridian Board of Directors could, at its
sole option, elect to terminate the Meridian/CoreStates Merger Agreement;
provided that CoreStates could, at its sole option, override such
termination by electing to increase the Meridian/CoreStates Exchange Ratio
to equal the lesser of (i) the result of dividing $40.09 (the product of
$32.725 and the Exchange Ratio) by the Average Closing Price on the
Determination Date, and (ii) the result of dividing the product of the
Index Ratio and the Meridian/CoreStates Exchange Ratio (as then in
effect), by the CoreStates Ratio.
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<PAGE>
(4) If the Average Closing Price on the Determination Date is less than
$27.75, there would be a Termination Event and the Meridian Board of
Directors could, at its sole option, elect to terminate the
Meridian/CoreStates Merger Agreement, provided that CoreStates could, at
its sole option, override such termination by electing to increase the
Meridian/CoreStates Exchange Ratio to equal the quotient obtained by
dividing $33.99 (the product of $27.75 and the Meridian/CoreStates
Exchange Ratio (as then in effect)) by the Average Closing Price.
These four scenarios may be summarized as follows:
<TABLE>
<CAPTION>
CoreStates Ratio
Average Closing Compared to Index
Price Ratio Termination Event
------------------------ ---------------------------- ---------------------
<S> <C> <C>
]$32.725 -- no
-
[$32.725 and ]$27.75 equal to or greater than no
-
[$32.725 and ]$27.75 less than yes
-
[$27.75 -- yes
</TABLE>
If there would be a Termination Event described in both paragraphs (3) and
(4) above, the Meridian Board of Directors could elect which Termination
Event to assert. The above scenarios are for illustrative purposes only and
are not intended to, and do not, reflect the value of the CoreStates Common
Stock that may actually be received by holders of Meridian Common Stock in
the Meridian/CoreStates Merger, nor do they reflect all possible
termination/increase scenarios.
The Average Closing Price on the Determination Date on which the
occurrence of a Termination Event and the subsequent increase, if any, in the
Meridian/CoreStates Exchange Ratio may be determined, will be based on the
average of the last sale prices of CoreStates Common Stock during the ten-day
period ending on the Determination Date. Accordingly, because the market
price of CoreStates Common Stock between the Determination Date and the
effective time of the Meridian/CoreStates Merger, as well as on the date
certificates representing shares of CoreStates Common Stock are delivered in
exchange for shares of Meridian Common Stock following completion of the
Meridian/CoreStates Merger, will fluctuate and possibly decline, the value of
the CoreStates Common Stock actually received by holders of Meridian Common
Stock may be more or less than (i) the Average Closing Price on the
Determination Date, or (ii) the value of the CoreStates Common Stock on the
Closing Date resulting from the Meridian/CoreStates Exchange Ratio or any
possible adjustment to the Meridian/CoreStates Exchange Ratio as illustrated
above.
At the close of business on December 15, 1995, the Index Price was $43.18
The Index Group consists of 11 bank holding companies selected by
CoreStates and Meridian as being directly relevant for purposes of
distinguishing changes in CoreStates; stock prices that are unique from those
reflective of general changes in comparable companies. The 11 bank holding
companies are Bank of Boston, Barnett Banks, Inc., Boatmen's Bancshares,
Inc., Comerica, First Bank System Inc., Fleet Financial Group, Inc., KeyCorp,
Mellon Bank Corporation, National City Corporation, PNC Financial Corp and
The Bank of New York Company, Inc. If CoreStates or any company belonging to
the Index Group declares or effects a stock dividend, reclassification,
recapitalization, split-up, combination, exchange of shares or similar
transaction between October 10, 1995 and the Determination Date, the prices
of CoreStates Common Stock or such other common stocks shall be appropriately
adjusted for all purposes, including determining whether there is a
Termination Event or determining any possible increase in the
Meridian/CoreStates Exchange Ratio as illustrated above (and, in the case of
any such transaction by CoreStates, the Meridian/CoreStates Exchange Ratio
also shall be appropriately adjusted). In the event the common stock of any
such company ceases to be publicly traded or there has been an announcement
of a proposal for the acquisition or sale of such company, such company will
be removed from the Index Group and the weights will be redistributed
proportionately for purposes of determining whether there has been a
Termination Event.
It is not possible to know whether a Termination Event will occur until
after the Determination Date. The Meridian Board of Directors has made no
decision as to whether it would exercise its right to terminate the
Meridian/CoreStates Merger Agreement if there is a Termination Event. In
considering whether to exercise its termination right in such situation, the
Meridian Board of Directors would, consistent with its fiduciary duties, take
into account all relevant facts and circumstances that exist at such time and
would consult with its financial advisors and legal counsel. Approval of
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<PAGE>
the Meridian/CoreStates Merger Agreement by the shareholders of Meridian at the
Meridian special meeting of shareholders will confer on the Meridian Board of
Directors the power, consistent with its fiduciary duties, to elect to complete
the Meridian/CoreStates Merger in the event of a Termination Event whether or
not there is any increase in the Meridian/CoreStates Exchange Ratio and without
any further action by, or resolicitation of, the shareholders of Meridian. If
the Meridian Board of Directors elects to exercise its termination right,
Meridian must give CoreStates prompt notice of that decision during a ten-day
period. During the five-day period commencing with receipt of such notice,
CoreStates has the option, in its sole discretion, to increase the
Meridian/CoreStates Exchange Ratio in the manner set forth in the
Meridian/CoreStates Merger Agreement and as illustrated above and thereby avoid
such termination of the Meridian/CoreStates Merger Agreement. CoreStates is
under no obligation to increase the Meridian/CoreStates Exchange Ratio, and
there can be no assurance that CoreStates would elect to increase the
Meridian/CoreStates Exchange Ratio if the Meridian Board of Directors were to
exercise its right to terminate the Meridian/CoreStates Merger Agreement as set
forth above. Any such decision would be made by CoreStates in light of the
circumstances existing at the time CoreStates has the opportunity to make such
an election. If CoreStates elects to increase the Meridian/CoreStates Exchange
Ratio, no termination of the Meridian/CoreStates Merger Agreement would occur as
a result of a Termination Event.
Although CoreStates has the right in the limited circumstances described
above to increase the Meridian/CoreStates Exchange Ratio, under no
circumstances may the Meridian/CoreStates Exchange Ratio be decreased.
In the event of termination of the Meridian/CoreStates Merger Agreement by
either Meridian or CoreStates, there will be no liability or obligation on
the part of CoreStates or Meridian other than the obligation dealing with
confidentiality, and other than any liabilities or damages incurred as a
result of the willful breach by a party of any of its representations,
warranties, covenants or agreements set forth in the Meridian/CoreStates
Merger Agreement.
AMENDMENT AND WAIVER
Prior to the Meridian/CoreStates Effective Time, any provision of the
Meridian/CoreStates Merger Agreement may be: (i) waived by the party
benefitted by the provision; or (ii) amended or modified at any time by an
agreement in writing among the parties thereto, approved by their respective
Boards of Directors and executed in the same manner as the
Meridian/CoreStates Merger Agreement, provided that, after approval by the
shareholders of Meridian, the consideration to be received by the
shareholders of Meridian Common Stock may not thereby be decreased.
INTERESTS OF CERTAIN PERSONS IN THE MERIDIAN/CORESTATES MERGER
Certain members of the Boards of Directors and management of CoreStates
and Meridian may be deemed to have certain interests in the
Meridian/CoreStates Merger in addition to their interests generally as
shareholders of CoreStates or Meridian, as the case may be. All of such
additional interests are described below, to the extent material, and except
as described below such persons have, to the best knowledge of CoreStates and
Meridian, no material interests in the Meridian/CoreStates Merger apart from
those of shareholders generally. The CoreStates Board of Directors and the
Meridian Board of Directors were each aware of these interests of their
respective directors and officers and considered them, among other matters,
in approving the Meridian/CoreStates Merger Agreement and the transactions
contemplated thereby.
Indemnification and Board Membership. The Meridian/CoreStates Agreement
provides that CoreStates will maintain all rights of indemnification existing
in favor of the directors, officers and employees of Meridian for six years
(and, with respect to transactions arising out of the Meridian/CoreStates
Merger Agreement or the Stock Option Agreements, indefinitely) after the
Meridian/CoreStates Effective Time to the full extent that Meridian would
have been permitted under Pennsylvania law and the Meridian Articles of
Incorporation (the "Meridian Charter") and By-laws to indemnify such person
and will cause to be maintained for six years after the Meridian/CoreStates
Effective Time directors' and officers' liability insurance on terms no less
favorable than those contained in policies maintained by Meridian; provided
that if the annual premium payments for such insurance exceeds 250% of the
annual premiums paid as of the date of the Meridian/CoreStates Merger
Agreement by Meridian, CoreStates is required to maintain the maximum
coverage available at an annual premium equal to 250% of Meridian's annual
premium.
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<PAGE>
The Board of Directors of CoreStates as of the Meridian/CoreStates
Effective Time is expected to consist of persons currently serving as
directors of CoreStates and Meridian, and certain officers of CoreStates and
Meridian will become officers of CoreStates as of the Effective Time. See "--
Management and Operations After the Merger."
Termination Agreements. Prior to the execution of the Meridian/CoreStates
Merger Agreement, four executive officers of Meridian, Messrs. McCullough,
Sparks, Grosz and Fenimore, were parties to termination agreements. Under the
terms of the Meridian/CoreStates Merger Agreement, (i) Messrs. Fenimore and
Grosz were to retain their existing termination agreements, and (ii) Messrs.
McCullough and Sparks were to enter into new termination agreements. With the
consent of CoreStates, Meridian will not enter into a new termination
agreement with Mr. McCullough and Mr. McCullough will retain his existing
termination agreement. Mr. Sparks and five other senior executives, Ms. P.
Sue Perrotty, a Group Executive Vice President of Meridian, Mr. R. William
Holland, an Executive Vice President of Meridian, Mr. Wayne R. Huey, an
Executive Vice President of Meridian, Mr. Richard E. Meyers, an Executive
Vice President of Meridian and Mr. Thomas G. Strohm, an Executive Vice
President of Meridian, are to enter into new termination agreements pursuant
to the Meridian/CoreStates Merger Agreement, which, in the case of Mr.
Sparks, will supersede the prior agreement with Meridian.
In the event, and only in the event, an executive's employment is
terminated under the circumstances hereinafter described, each executive
would be entitled to receive cash payments ("Termination Payments"). The
factors that provide the basis for calculating Termination Payments vary over
time, and consequently a sum certain for such Termination Payments could be
determined only as of the specific dates upon which any such payments were
made. Under the existing termination agreements for Messrs. McCullough,
Fennimore and Grosz, and assuming new termination agreements are executed for
Mr. Sparks, Ms. Perrotty and Messrs. Holland, Huey, Meyers and Strohm in the
form contemplated by the Meridian/CoreStates Merger Agreement, then, if
Termination Payments were determined as of the Meridian/CoreStates Effective
Time, the total of such payments (exclusive of additional retirement
benefits) to Messrs. McCullough, Sparks, Fennimore, Grosz, Ms. Perrotty and
Messrs. Holland, Huey, Meyers and Strohm would be approximately $3,196,000,
$1,742,000, $766,000, $731,000, $689,000, $511,000, $582,000, $561,000 and
$433,000, respectively.
The new termination agreement for Mr. Sparks will have a three-year term
commencing as of the Meridian/CoreStates Effective Time and provide for
severance benefits for a period of three years in the event of the
termination of the executive's employment without "Cause" or by the executive
with "Good Reason" (as each such term is defined). Such severance benefits
would consist of (i) salary continuation (based on the highest salary during
the year of termination and the two-year period preceding termination); (ii)
annual payments of the greater of (A) the highest bonus paid in respect of
the year of termination or the preceding two years or (B) the highest bonus
paid with respect to calendar years 1992-1994; (iii) annual payments of the
highest amount contributed by the employer in the year of termination or the
preceding three years under any tax- qualified defined contribution plans,
supplemental salary reduction plan, defined contribution portion of a
retirement restoration plan and other nonqualified plans; (iv) accrual of
additional benefits under any tax-qualified defined benefit plan,
supplemental retirement plan and defined benefit portion of a retirement
restoration plan based on the highest compensation in the year of termination
or the preceding three years; and (v) continued participation in welfare
benefit plans or tax- effected payments in lieu thereof. The payments and
benefits under this agreement will be limited to the extent necessary to
avoid application of the "golden parachute" deduction and excise tax
provisions of Sections 280G and 4999 of the Code.
The existing termination agreements for Messrs. McCullough, Fennimore and
Grosz are similar to the termination agreement described above except that
(i) such agreements do not contain the Code Sections 280G and 4999 limitation
on the amount of payments and benefits and (ii) the agreements for Messrs.
Fennimore and Grosz provide, in general, for two years of payments and
benefits.
The termination agreements for Ms. Perrotty and Messrs. Holland, Huey,
Meyers and Strohm have three- year terms commencing as of the
Meridian/CoreStates Effective Time and provide for severance benefits for the
balance of the term, up to a maximum of 24 months, in the event of the
termination of an executive's employment without "Cause" or by the executive
due to certain job changes, relocations or reductions in compensation or
benefits. Such severance benefits would consist of (i) salary continuation
(based on the highest salary in the three-year period preceding the executive's
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<PAGE>
termination); (ii) monthly prorated payments in respect of targeted incentive
compensation for the year in which the Merger occurs; (iii) monthly prorated
payments in respect of benefits the executive would have received under the
Meridian 401(k) plan, or a successor plan, for the year prior to termination;
(iv) continued participation in Meridian's retirement plan and supplemental
retirement plan (including any successor plan); and (v) continued life,
disability and medical insurance benefits. The payments and benefits under these
agreements will be limited to the extent necessary to avoid application of the
"golden parachute" deduction and excise tax provisions of Sections 280G and 4999
of the Code.
CoreStates had no comparable termination arrangements. However,
approximately 24 executive officers of CoreStates generally at the level of
Executive Vice-President and above will be offered an executive severance
policy which is substantially equivalent to the policy covering Meridian
executives.
The Meridian/CoreStates Merger will not, however, constitute a change of
control or otherwise trigger or accelerate any payment for purposes of such
severance agreements or any other agreement or arrangement between CoreStates
and its existing executive officers.
MANAGEMENT AND OPERATIONS AFTER THE MERIDIAN/CORESTATES MERGER
Directors After the Meridian/CoreStates Merger. CoreStates has agreed in
the Meridian/CoreStates Merger Agreement to fix the size of its Board of
Directors at 15 members, comprised of ten of the current directors of
CoreStates and five of the current directors of Meridian, which five
directors shall consist of Samuel A. McCullough, Robert W. Cardy, Lawrence R.
Pugh, George Strawbridge, Jr. and Judith M. von Seldeneck ("Former Meridian
Directors"). CoreStates has agreed in the Meridian/CoreStates Agreement to
cause the Former Meridian Directors to be elected or appointed as directors
of CoreStates at, or as promptly as practicable after, the
Meridian/CoreStates Effective Time.
Two of the Former Meridian Directors, including Mr. McCullough, will be
appointed to the class of the Board of Directors of CoreStates elected by the
shareholders of CoreStates at the annual meeting of CoreStates immediately
preceding the Meridian/CoreStates Effective Time. Two of the Former Meridian
Directors will be appointed to the class of the Board of Directors of
CoreStates elected by the shareholders of CoreStates at the annual meeting of
CoreStates immediately preceding the annual meeting referenced in the
preceding sentence. The remaining Former Meridian Director will be appointed
to the remaining class of the CoreStates Board of Directors.
Except as set forth herein, the parties have not yet determined which
members of their respective current Boards of Directors will continue as
members of the Board of Directors of CoreStates after the Meridian/CoreStates
Effective Time. The determination as to the composition of the Board of
Directors of CoreStates after the Meridian/CoreStates Effective Time is not
expected to be made until shortly before the Effective Time. Although two UCB
directors will be added to the Meridian Board of Directors upon completion of
the Merger, these persons are not anticipated to be among the directors to be
considered for the CoreStates Board of Directors.
Management After the Meridian/CoreStates Merger. The Board of Directors of
CoreStates has agreed in the Meridian/CoreStates Merger Agreement to take
appropriate action so that as of the Meridian/CoreStates Effective Time, Mr.
Larsen will be Chairman and Chief Executive Officer of CoreStates and Mr.
McCullough will become President and Chief Operating Officer of CoreStates.
In addition, the Board of Directors of CoreStates has agreed in the
Meridian/CoreStates Merger Agreement to take appropriate action so that as of
the Meridian/CoreStates Effective Time the following persons will hold the
offices of CoreStates having the functions set forth below:
Rosemarie B. Greco: President and Chief Executive Officer of CoreStates
Bank, N.A.
Charles L. Coltman III: Vice Chairman.
Charles P. Connolly, Jr.: Senior Executive Vice President and Chief Risk
Management Officer.
Robert N. Gilmore: Chief Processing Services Officer.
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<PAGE>
David E. Sparks: Chief Financial Officer.
The Office of the Chairman of CoreStates after the Meridian/CoreStates
Effective Time will consist of Messrs. Larsen, McCullough, Coltman, Connolly,
Gilmore and Sparks and Ms. Greco.
As of the date hereof, neither CoreStates nor Meridian is aware of any
material relationship between Core- States or its directors or executive
officers and Meridian or its directors or executive officers, except as
contemplated by the Meridian/CoreStates Merger Agreement or as described
herein or in the documents incorporated by reference herein. In the ordinary
course, of business and from time to time, CoreStates may do business with
Meridian, CoreStates may enter into banking transactions with certain of
Meridian's directors, executive officers and their affiliates, Meridian may
do business with CoreStates, and Meridian may enter into banking transactions
with certain of CoreStates' directors, officers and their affiliates.
CONSOLIDATION OF OPERATIONS; ANTICIPATED COST SAVINGS
Although no assurances can be given that any specific level of expense
savings will be achieved or as to the timing thereof, the managements of
Meridian and CoreStates currently expect to achieve substantial savings in
the base of operating expenses by consolidating certain operations,
facilities and business lines and eliminating redundant expenses. Such
savings (the principal components of which are described in greater detail
below) are expected to be realized over time as such consolidation is
completed. Annual pre-tax savings are expected to amount to approximately
$186 million (or approximately 12% of the projected annual operating expense
base) by the end of 1997, assuming among other things that the reductions in
staff, branch consolidations and consolidations of other operations on which
such estimates are based are accomplished within such time period. Such
savings are expected to be realized primarily through reductions in staff,
the consolidation and elimination of certain branches and office facilities
and the consolidation of certain data processing and other back office
operations. These anticipated expense savings are in addition to the
projected savings from CoreStates' previously- announced "BEST" program and
Meridian's previously-announced "59.9" program, which are anticipated to
result in annual expense reductions of $145 million and $55 million,
respectively, in 1996. It is expected that one-time, pre-tax merger-related
and other charges of $175 million will be incurred upon completion of the
Meridian/CoreStates Merger, principally as a result of an addition to the
allowance for loan losses which CoreStates has determined will be necessary
in connection with a change in strategy related to problem assets and to
conform Meridian's consumer lending charge-off policies to those of
CoreStates, and also as a result of severance expenses to be incurred in
connection with anticipated staff reductions, expenses in connection with
planned office eliminations and other Meridian/CoreStates Merger-related
expenses, including costs to eliminate redundant back office and other
operations of CoreStates and Meridian and other expenses related directly to
the Meridian/CoreStates Merger. See "SELECTED COMBINED PRO FORMA FINANCIAL
INFORMATION." While the managements of Meridian and CoreStates believe such
expectations have a reasonable basis and have been prepared in good faith,
the extent to which cost savings will be achieved is dependent upon various
factors beyond the control of Meridian and CoreStates, including the
regulatory environment, economic changes, unanticipated changes in business
conditions and inflation. Therefore, no assurances can be given with respect
to the ultimate level and composition of cost savings to be realized, or that
such savings will be realized in the time frame currently anticipated.
Of the projected annual expense savings of $186 million expected to be
realized from the Meridian/CoreStates Merger, approximately $112 million is
expected to be derived from the reduction in personnel, approximately $20
million is expected to be derived from the elimination of redundant outside
services, approximately $12 million is expected to be derived from reduction
in occupancy expense resulting from branch consolidations, and the remaining
approximately $42 million is expected to be derived from other areas.
CoreStates and Meridian are currently conducting a branch network review
which is expected to result in the consolidation, closing or sale of
approximately 115 branch offices out of a combined total of 666 branches.
CoreStates and Meridian also anticipate that less than 10% of the combined
total of 19,127 personnel positions will need to be eliminated in order to
achieve the projected cost savings in personnel expense described above. In
order to reduce the number of potential layoffs associated with the
anticipated reduction in staff positions, both CoreStates and Meridian have
instituted hiring freezes except for critical positions.
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<PAGE>
DESCRIPTION OF CORESTATES CAPITAL STOCK
GENERAL
As of September 30, 1995, the authorized capital stock of CoreStates
consisted of 10,000,000 shares of Series Preferred Stock, without par value
("Series Preferred Stock"), of which none was issued and outstanding and
200,000,000 CoreStates Common Stock, par value $1.00 per share, of which
138,909,597 shares were issued and outstanding.
At the special meeting of shareholders of CoreStates to consider the
Meridian/CoreStates Merger Agreement, the Board of Directors of CoreStates
will submit for consideration by shareholders of CoreStates a proposal to
amend the Articles of Incorporation of CoreStates to increase the number of
authorized shares of Core- States Common Stock from 200,000,000 to
350,000,000.
CoreStates' Board of Directors is authorized to issue the shares of Series
Preferred Stock in series without further shareholder action with such voting
rights, designations, preferences, qualifications, privileges, limitations,
restrictions, options, conversion rights and other special or relative rights
of any series as it may determine from time to time by resolution.
CORESTATES COMMON STOCK
Dividend Rights. The holders of CoreStates Common Stock are entitled to
share ratably in dividends out of funds legally available therefor, when and
as declared by the CoreStates Board of Directors, after full cumulative
dividends on all shares of Series Preferred Stock, and any other class or
series of preferred stock ranking superior as to dividends to CoreStates
Common Stock, have been paid or declared and funds sufficient for the payment
thereof set apart.
Voting Rights. Each holder of CoreStates Common Stock has one vote on
matters presented for consideration by the shareholders for each share held.
There are no cumulative voting rights in the election of directors. All
issued and outstanding shares of CoreStates Common Stock are fully paid and
nonassessable. In certain circumstances, issued and outstanding Series
Preferred Stock or any other class or series of preferred stock issued by
CoreStates may affect voting rights of CoreStates Common Stock. There are no
shares of Series Preferred Stock or any other class or series of preferred
stock issued by CoreStates outstanding.
Size and Classification of Board of Directors. The Articles of
Incorporation of CoreStates provide for a classified Board of Directors,
consisting of three substantially equal classes of directors, each serving
for a three-year term, with the term of each class of directors ending in
successive years. The CoreStates Board of Directors currently consists of 19
members. Classification of the Board of Directors may have the effect of
decreasing the number of directors that could otherwise be elected at a given
meeting by anyone who obtains a controlling interest in CoreStates Common
Shares and thereby could impede a change in control of CoreStates. CoreStates
has agreed in the Meridian/CoreStates Merger Agreement to fix the size of its
Board of Directors at 15 members, comprised of ten of the current directors
of CoreStates and five of the current directors of Meridian. See "CERTAIN
INFORMATION REGARDING PENDING MERIDIAN/CORESTATES MERGER -- Management and
Operations After the Meridian/CoreStates Merger."
Preemptive Rights. The holders of CoreStates Common Stock have no
preemptive rights to acquire any new or additional unissued shares or
treasury shares of CoreStates capital stock.
Liquidation Rights. In the event of a liquidation, dissolution or winding
up of CoreStates, whether voluntary or involuntary, the holders of CoreStates
Common Stock will be entitled to share ratably in any of CoreStates' assets
or funds that are available for distribution to its shareholders after the
satisfaction of its labilities (or after adequate provision is made therefor)
and after preferences on any outstanding preferred stock.
Assessment and Redemption. The shares of CoreStates Common Stock issuable
pursuant to the Meridian/CoreStates Merger will be, when issued, fully paid
and nonassessable. CoreStates Common Stock does not have any redemption
provisions.
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CORESTATES SERIES PREFERRED STOCK
CoreStates' Articles of Incorporation contain general terms for Series
Preferred Stock, and specific terms for a series of 3,041,000 shares
designated as Series A Preferred Stock with a stated value of $25 per share.
No shares of Series Preferred Stock or Series A Preferred Stock are issued or
outstanding.
Dividend Rights. The holders of Series A Preferred Stock are entitled to
receive out of any funds legally available therefor, when and as declared by
CoreStates' Board of Directors, cash dividends at an annual per share rate
equal to 12.3%.
Voting Rights. Except as otherwise required by law or as provided in any
resolution of the CoreStates Board of Directors designating a series of
Series Preferred Stock (a "Creating Resolution"), any series of Series
Preferred Stock has no voting rights and shall not be entitled to notice of
any meeting of the shareholders of CoreStates. Except as otherwise provided
by law or in any Creating Resolution, upon any matter on which the shares of
Series Preferred Stock of any series have voting rights, each holder of
shares of Series Preferred Stock of such series shall be entitled to one vote
for each $25 which would be payable with respect to the holder's shares of
Series Preferred Stock of such series upon any involuntary liquidation,
dissolution or winding up of CoreStates. The Creating Resolution relating to
the Series A Preferred Stock did not provide for any voting rights or notice
of any meeting of the shareholders of CoreStates. Except as otherwise
provided in a Creating Resolution, in the event that dividends upon any
series of the Series Preferred Stock shall be in arrears in an amount equal
to six full quarterly dividends thereon, the holders of such series shall
become entitled to vote noncumulatively at all elections of directors of
CoreStates, and to receive notice of all shareholders' meetings to be held
for such purpose. At such meetings, the holders of such series, voting as a
class together with the holders of any other series then having the right to
elect directors under such circumstances, shall be entitled solely to elect
two members of the Board of Directors of CoreStates and all other directors
of CoreStates shall be elected by the other shareholders of CoreStates
entitled to vote in the election of directors. Such voting rights of the
holders of such series shall continue until all accumulated and unpaid
dividends thereon shall have been paid or funds sufficient therefor set
aside, whereupon all such voting rights of the holders of shares of such
series shall cease, subject to being revived from time to time upon the
reoccurrence of the conditions above described as giving rise thereto.
At any time when such right to elect directors separately as a class has
so vested, CoreStates may, and upon written request of the holders of record
of not less than 20% of the then outstanding total number of shares of all
the Series Preferred Stock having the right to elect directors in such
circumstances shall, call a special meeting of holders of such Series
Preferred Stock for the election of directors. Upon the mailing of the notice
of such special meeting to the holders of such Series Preferred Stock, or, if
no such meeting is held, then upon the mailing of the notice of the next
annual or special meeting of shareholders for the election of directors, the
number of directors of CoreStates shall be increased only to the extent
necessary to provide sufficient vacancies to enable the holders of such
Series Preferred Stock to elect the two directors discussed herein, and all
such vacancies shall be filled only by a vote of the holders of such Series
Preferred Stock as discussed herein. Whenever the number of directors of
CoreStates shall have been increased, the number as so increased may
thereafter be further increased or decreased in such manner as may be
permitted by CoreStates' By-laws and without the vote of the holders of
Series Preferred Stock, provided that no such action shall impair the right
of the holders of Series Preferred Stock to elect and to be represented by
two directors as herein discussed.
So long as the holders of any series of Series Preferred Stock are
entitled to voting rights under the Articles of Incorporation of CoreStates,
any vacancy in the Board of Directors caused by the death or resignation of
any director elected by the holders of Series Preferred Stock, shall, until
the next meeting of shareholders for the election of directors, in each case
be filled by the remaining director elected by the holders of Series
Preferred Stock having the right to elect directors in such circumstances.
Upon termination of the voting rights of the holders of any series of
Series Preferred Stock, so long as no other Series of Preferred Stock then
outstanding has the right to elect directors in such circumstances, the terms
of the office of all persons who shall have been elected directors of
CoreStates by vote of the holders of Series Preferred Stock or by a director
elected by such holders shall forthwith terminate.
Except in certain cases, as long as two or more series of Series Preferred
Stock are outstanding, no particular series of Series Preferred Stock shall
be entitled to vote as a separate series on any matter and all shares of
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Series Preferred Stock of all series shall be deemed to constitute but one
class for any purpose for which a vote of the shareholders of CoreStates by
classes may now or hereafter be required.
Preemptive Rights. No holder of Series Preferred Stock shall have any
preemptive right to acquire any new or additional unissued shares or treasury
shares of CoreStates capital stock.
Liquidation Rights. In the event of a liquidation, dissolution or winding
up of CoreStates, whether voluntary or involuntary, the holders of Series A
Preferred Stock shall be entitled only to payment in cash of $25 per share,
plus an amount equal to full cumulative dividends to the date when such
payments shall be made available to the holders thereof.
Redemption. The Series A Preferred Stock may be called for redemption and
redeemed by the payment therefor of $25 per share, plus an amount equal to
full cumulative dividends to the date fixed by the Board of Directors as such
redemption date.
Certain Corporate Action. Without the consent of the holders of at least a
majority of the shares of Series Preferred Stock at the time outstanding,
CoreStates cannot (i) authorize any new class or series of shares or any
series of Series Preferred Stock, or an increase in the authorized amount of
any class or series of shares or any series of Series Preferred Stock, which
shall rank senior to any series of the Series Preferred Stock with respect to
payment of dividends or distribution upon liquidation; provided, however,
that if shares of such class or series would rank prior to one or more but
not all the several series of the Series Preferred Stock at the time
outstanding, the consent of the holders of a majority of the shares of all
series with respect to which shares of such class or series would rank prior
shall be required in lieu of the consent of holders of all Series Preferred
Stock; or (ii) increase the authorized Series Preferred Stock to any amount
in excess of 5,000,000 shares; or (iii) merge or consolidate with any other
corporation if the corporation resulting from such merger or consolidation
would have after such merger or consolidation any authorized class of shares
ranking prior to or equal with the Series Preferred Stock with respect to
payment of dividends or distributions upon liquidation, except for classes
having the same number of shares with the same rights and preferences as the
authorized shares of CoreStates immediately preceding such merger or
consolidation.
See "COMPARISON OF SHAREHOLDER RIGHTS -- Amendment of Certificate or
Articles of Incorporation or Bylaws," for a description of the manner in
which CoreStates' Articles of Incorporation and By-laws may be amended.
COMPARISON OF SHAREHOLDER RIGHTS
GENERAL
Meridian and CoreStates are each Pennsylvania corporations subject to the
provisions of the PaBCL. UCB is a New Jersey corporation subject to the
provisions of the New Jersey Business Corporation Act ("NJBCA"). Stockholders
of UCB, whose rights are governed by UCB's Certificate of Incorporation and
Bylaws and the NJBCA will, upon completion of the Merger, become shareholders
of Meridian and, on the Effective Date, their rights as shareholders of
Meridian will be determined by Meridian's Articles of Incorporation,
Meridian's Bylaws and the PaBCL. If both the Merger and the
Meridian/CoreStates Merger are completed, stockholders of UCB will ultimately
become shareholders of CoreStates and their rights as shareholders of
CoreStates will be determined by the PaBCL, CoreStates' Articles of
Incorporation and CoreStates' Bylaws.
The rights of a holder of UCB Common Stock are similar in some respects
and different in other respects from the rights of a holder of Meridian
Common Stock or CoreStates Common Stock. The following summarizes certain
similarities and differences but does not purport to be a complete
description of the similarities and differences between the rights of holders
of the common stock of UCB, Meridian and CoreStates. Such differences may be
determined in full by reference to New Jersey law, Pennsylvania law, UCB's
Certificate of Incorporation and Bylaws, Meridian's Articles of Incorporation
and Bylaws and CoreStates' Articles of Incorporation and Bylaws. The
information related to CoreStates will be applicable to UCB stockholders only
if the Merger and the Meridian/CoreStates Merger are completed.
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The following discussion does not purport to be a complete discussion of,
and is qualified in its entirety by reference to, the governing law and the
Articles or Certificate of Incorporation and Bylaws of each corporation.
AUTHORIZED CAPITAL
Meridian's Articles of Incorporation authorize the issuance of 200,000,000
shares of Meridian Common Stock, par value $5.00 per share, and 25,000,000
shares of preferred stock, par value $25.00 per share. As of September 30,
1995, there were 57,822,604 shares of Meridian Common Stock and no shares of
Meridian Preferred Stock issued and outstanding. See "DESCRIPTION OF MERIDIAN
CAPITAL SECURITIES" in the accompanying Proxy Statement/Prospectus.
CoreStates' Articles of Incorporation authorize the issuance of
200,000,000 shares of CoreStates Common Stock, par value $1.00 per share, and
10,000,000 shares of Series Preferred Stock, without par value. As of
November 1, 1995, there were 139,152,444 shares of CoreStates Common Stock
issued and outstanding and no shares of Series Preferred Stock issued and
outstanding.
UCB's Certificate of Incorporation authorizes the issuance of 6,000,000
shares of UCB Common Stock, no par value $1.00 stated value per share, and
3,000,000 shares of preferred stock, no par value (the "UCB Preferred
Stock"). As of the Record Date, there were 2,148,150 shares of UCB Common
Stock and no shares of UCB Preferred Stock issued and outstanding. UCB
Preferred Stock is issuable in series, each having such rights, and
preferences as the Board of Directors of UCB may, by adoption of an amendment
of UCB's Certificate of Incorporation, fix and determine.
DIRECTORS
REMOVAL
Pursuant to Meridian's Articles of Incorporation, Meridian directors may
be removed from office without cause by the affirmative vote of a majority of
outstanding voting shares.
Under CoreStates' Bylaws and Pennsylvania law, directors may only be
removed for cause. In case the Board of Directors or a class of the Board of
Directors or any one or more directors are so removed, new directors may be
elected at the same meeting.
UCB's Certificate of Incorporation does not provide for the removal of
directors. However, pursuant to the NJBCA, one or more UCB directors may be
removed without cause by the affirmative vote of the majority of votes cast
by stockholders entitled to vote for the election of directors.
NOMINATION
Meridian's Bylaws provide that nominations for the election of directors
may be made by the Board of Directors or any shareholder entitled to vote for
the election of directors. Written notice of a shareholder's intent to
nominate a director at the meeting must be given by the shareholder and
received by the Secretary of Meridian not less than 30 days nor more than 50
days prior to the date of the annual meeting of shareholders. However, if
less than 21 days' notice of the meeting is given to shareholders, written
notice of a shareholder's intent to nominate a director is required to be
delivered to the Secretary of Meridian not later than the seventh day
following the day on which notice of the meeting was first mailed to
shareholders. The notice is required to be in writing and contain or be
accompanied by certain information about such shareholder, as described in
Meridian's Bylaws. The chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that any nomination made at the meeting
was not made in accordance with the foregoing procedures and, in such event,
the nomination will be disregarded.
CoreStates' Bylaws provide that nominations for election of directors may
be made by any shareholder entitled to vote for the election of directors so
long as written notice of such shareholder's intent to nominate a director at
the meeting is given by the shareholder and received by the Secretary of
CoreStates not less than 45 days prior to the date of the annual meeting of
shareholders. If directors are to be elected by shareholders at any other
time, notice is required to be delivered to the Secretary of CoreStates not
later than the seventh day following the date on which notice of the
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meeting was first mailed to shareholders. In lieu of delivery to the Secretary
of CoreStates, such notice may be mailed to the Secretary of CoreStates
certified mail, return receipt requested, but shall be deemed to have been given
only upon actual receipt by the Secretary of CoreStates. The notice is required
to be in writing and contain or be accompanied by certain information about such
shareholder, as described in CoreStates Bylaws. The chairman of the meeting may,
if the facts warrant, determine and declare to the meeting that any nomination
made at the meeting was not made in accordance with the foregoing procedures
and, in such event, the nomination will be disregarded.
Neither the Certificate of Incorporation or Bylaws of UCB nor the NJBCA
sets forth the procedures pursuant to which UCB shareholders may nominate a
candidate for election as a director.
ELECTION OF DIRECTORS
Meridian's Articles of Incorporation and Bylaws provide that the Meridian
Board of Directors shall be composed of not less than 12 nor more than 24
directors, the number of which may be determined by the Meridian Board of
Directors. Currently, the Meridian Board of Directors is composed of 24
members. The Meridian Board of Directors is divided into three classes, each
serving three-year terms, so that approximately one-third of the directors of
Meridian are elected at each annual meeting of shareholders of Meridian.
Classification of the Meridian Board of Directors has the effect of
decreasing the number of directors that could be elected in a single year by
any person who seeks to elect its designees to a majority of the seats on the
Meridian Board of Directors and thereby could impede a change in control of
Meridian.
CoreStates' Articles of Incorporation provide for a classified Board of
Directors, consisting of three substantially equal classes of directors, each
serving for a three-year term, with the term of each class of directors
ending in successive years. The CoreStates Board of Directors currently
consists of 17 members. See "CERTAIN INFORMATION REGARDING PENDING
MERIDIAN/CORESTATES MERGER -- Management and Operations After the
Meridian/CoreStates Merger. Classification of the CoreStates Board may have
the effect of decreasing the number of directors that could otherwise be
elected at a given annual meeting by anyone who obtains a controlling
interest in CoreStates Common Stock and thereby could impede a change in
control of CoreStates.
UCB's Bylaws provide that the UCB Board of Directors shall be composed of
not less than 5 nor more than 25 directors, the number of which may be
determined by the UCB Board of Directors. Currently, the UCB Board of
Directors is composed of six members. UCB's Board of Directors is not
classified. All directors of UCB are elected at each annual meeting of
shareholders of UCB. Therefore, any person who seeks to elect its designees
to a majority of the seats on the UCB Board of Directors could do so at any
annual meeting.
CUMULATIVE VOTING
Neither Meridian's, CoreStates' nor UCB's shareholders are permitted to
cumulate votes in the election of directors.
LIMITED LIABILITY
As permitted by the PaBCL, Meridian's Bylaws provide that directors of
Meridian are not personally liable for taking or failing to take any action
unless the director breached or failed to perform the duties of his or her
office as set forth under Pennsylvania law and such breach or failure
constitutes self-dealing, willful misconduct or recklessness; provided,
however, that there is no such elimination of liability arising under any
criminal statute or with respect to the payment of taxes pursuant to local,
state or federal law.
As permitted by the PaBCL, CoreStates' Articles of Incorporation and
CoreStates' Bylaws provide that a director or officer shall not be personally
liable, as such, for monetary damages for any action taken, or any failure to
take any action, unless the director or officer has breached or failed to
perform the duties of his or her office and the breach or failure to perform
constitutes self-dealing, willful misconduct or recklessness. Such limitation
(i) does not apply to the responsibility or liability of a director or
officer pursuant to any criminal statute or the liability of a director or
officer for the payment of taxes, and (ii) may, in the view of certain
commentators, shield a director from liability for certain breaches of his or
her duty of loyalty as well as his or her duty of care.
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As permitted by the NJBCA, UCB's Certificate of Incorporation provides
that directors of UCB are not personally liable for breach of any duty owed
to UCB or its shareholders, unless such breach of duty is the result of an
act or omission (i) in breach of such director's duty of loyalty to UCB or
its shareholders, (ii) not in good faith or involving a knowing violation of
law, or (iii) resulting in receipt by such person of an improper personal
benefit.
INDEMNIFICATION
As permitted by the PaBCL, Meridian's Bylaws provide for indemnification
of directors, officers and agents for certain litigation-related liabilities
and expenses unless the individual's conduct is determined by a court to have
constituted willful misconduct or reckless conduct.
In accordance with the PaBCL, and pursuant to its Bylaws, CoreStates is
obligated to indemnify an Indemnified representative (as defined below)
against any Liability (as defined below) incurred in connection with any
Proceeding (as defined below) in which the Indemnified representative may be
involved as a party or otherwise, by reason of the fact that such person is
or was serving in an Indemnified capacity (as defined below), including,
without limitation, liabilities resulting from any actual or alleged breach
or neglect of duty, error, misstatement or misleading statement, negligence,
gross negligence or act giving rise to strict or product Liabilities; except:
1. where such indemnification is expressly prohibited by applicable law,
or
2. where the conduct of the Indemnified representative has been determined
to constitute willful misconduct or recklessness within the meaning of 42
Pa.C.S. Section8365(b) (now a reference to PaBCL Section1746(b) or any
superseding provision of law, sufficient in the circumstances to bar
indemnification against Liabilities arising from the conduct.
For purposes of the foregoing,
"Indemnified capacity" means any and all past, present and future service
by an indemnified representative in one or more capacities as a director,
officer, employee or agent of CoreStates, or, at the request of CoreStates,
as a director, officer, employee, agent, fiduciary or trustee of another
corporation, partnership, joint venture, trust, employee benefit plan or
other entity or enterprise;
"Indemnified representative" means any and all directors and officers of
the corporation and any other person designated as an indemnified
representative by the Board of Directors of CoreStates (which may, but need
not, include any person serving at the request of CoreStates, as a director,
officer, employee, agent, fiduciary or trustee of another corporation,
partnership, joint venture, trust, employee benefit plan or other entity or
enterprise);
"Liability" means any damage, judgment, amount paid in settlement, fine,
penalty, punitive damages, excise tax assessed with respect to an employee
benefit plan, or other cost or expense of any nature (including, without
limitation, attorneys' fees and disbursements); and
"Proceeding" means any threatened, pending or completed action, suit,
appeal or other proceeding of any nature, whether civil, criminal,
administrative or investigative, whether formal or informal, and whether
brought by or in the right of CoreStates, a class of its security holders or
otherwise.
As permitted by the NJBCA, UCB's Certificate of Incorporation provides for
indemnification of directors, officers, employees and agents of UCB, and any
other person serving in such capacity with any other entity at the request of
UCB, for certain litigation-related liabilities and expenses to the full
extent permitted under the NJBCA.
SHAREHOLDERS' MEETINGS
Meridian's Bylaws provide that the Board of Directors may fix the date and
time of the annual meeting of shareholders, but if no such date is fixed, the
meeting for any calendar year is to be held on the third Tuesday of April in
such year. Notice of the annual meeting of shareholders must be given not
less than 10 days before the date of the meeting. The presence, in person or
by proxy, of shareholders entitled to cast at least 66 2/3% of the votes
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that all shareholders are entitled to cast constitutes a quorum for the
transaction of business at the meeting. Meridian's Bylaws provide that special
meetings of shareholders may be called at any time by any of the following: (1)
the Chief Executive Officer, Chairman or President of Meridian; (2) the Board of
Directors of Meridian or the Executive Committee thereof; or (3) Meridian
shareholders entitled to cast at least 20% of the votes which all shareholders
are entitled to cast at the meeting. Notice of special meetings of shareholders
must be given not less than 10 days before the date of the meeting.
CoreStates Bylaws provide that the Board of Directors may fix and
designate the date and time of the annual meeting of shareholders, but if no
such date is fixed, the meeting for any calendar year is to be held on the
third Tuesday of April in such year. The presence in person or by proxy of
shareholders entitled to cast at least a majority of the votes that all
shareholders are entitled to cast on a particular matter to be acted upon at
the meeting constitutes a quorum at that meeting. CoreStates Bylaws provide
that a special meeting of the shareholders may be called at any time by the
Chairman of the Board, the President, or the Board of Directors, who may fix
the date, time and place of the meeting. If the date, time or place of the
meeting is not so fixed, it will be fixed by the Secretary. A date fixed by
the secretary cannot be more than 60 days after the date of the calling of
the meeting. CoreStates' Bylaws expressly provide that, except when acting by
unanimous consent to remove a director or directors, shareholders may act
only at a duly organized meeting.
UCB's Bylaws provide that the Board of Directors may fix the date and time
of the annual meeting of shareholders. Notice of the annual meeting of
shareholders must be given not less than 10 days nor more than 60 days prior
to the date of the meeting. The presence, in person or by proxy, of a
majority of the outstanding voting shares constitutes a quorum for the
transaction of business at the meeting. A special meeting of UCB's
shareholders may be called at any time by any of the following: (1) the
Chairman or President of UCB, or (2) a majority of the Board of Directors.
The NJBCA provides that holders of 10% or more of all the shares entitled to
vote may apply to the Superior Court of New Jersey to order that a special
meeting of shareholders be held. Notice of a special meeting of shareholders
must be given not less than 10 nor more than 60 days prior to the date of the
meeting.
Meridian's Bylaws set forth procedures pursuant to which any business,
including the nomination of directors by a shareholder, may be properly
brought by a shareholder before an annual meeting of shareholders. Core-
States' Bylaws set forth procedures pursuant to which shareholders may submit
nominations for the election of directors, but neither its Bylaws nor its
Articles of Incorporation set forth procedures pursuant to which other
businesses may be properly brought by a shareholder before an annual meeting
of shareholders. Neither UCB's Bylaws nor its Certificate of Incorporation
set forth similar procedures pursuant to which business, including the
nomination of directors by a shareholder, may be brought before an annual
meeting of shareholders.
SHAREHOLDER RIGHTS PLAN
Meridian has adopted a shareholder rights plan pursuant to which holders
of Meridian Common Stock are entitled, under certain circumstances generally
involving an accumulation of Meridian Common Stock, to purchase Meridian
Common Stock or common stock of the potential acquiror at a substantially
reduced price. See "DESCRIPTION OF MERIDIAN CAPITAL SECURITIES -- Shareholder
Rights Plan" in the accompanying Proxy Statement/Prospectus. On October 10,
1995, Meridian amended its shareholder rights plan so that such plan would
not be triggered by the execution of the Meridian/CoreStates Merger Agreement
or the Meridian Stock Option Agreement or completion of the transactions
contemplated thereby. Neither CoreStates nor UCB has adopted a shareholder
rights plan.
ANTITAKEOVER PROVISIONS
Meridian and CoreStates are each subject to some, but not all, of various
provisions of the PaBCL which are triggered, in general, if any person or
group acquires, or discloses an intent to acquire, 20% or more of the voting
power of a covered corporation, other than pursuant to a registered firm
commitment underwriting or, in certain cases, pursuant to the approving vote
of the board of directors. The relevant provisions are contained in
Subchapters 25E-H of the PaBCL.
Subchapter 25E of the PaBCL (relating to control transactions) provides
that if any person or group acquires 20% or more of the voting power of a
covered corporation, the remaining shareholders may demand from such person
or group the fair value of their shares, including a proportionate amount of
any control premium.
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Subchapter 25F of the PaBCL (relating to business combinations) delays for
five years and imposes conditions upon "business combinations" between an
"interested shareholder" and the corporation. The term "business combination"
is defined broadly to include various transactions utilizing a corporation's
assets for purchase price amortization or refinancing purposes. For this
purpose, an "interested shareholder" is defined generally as the beneficial
owner of at least 20% of a corporation's voting shares.
Subchapter 25G of the PaBCL (relating to control-share acquisitions)
prevents a person who has acquired 20% or more of the voting power of a
covered corporation from voting such shares unless the "disinterested"
shareholders approve such voting rights. Failure to obtain such approval
exposes the owner to the risk of a forced sale of the shares to the issuer.
Even if shareholder approval is obtained, the corporation is also subject to
Subchapters 25I and J of the PaBCL. Subchapter 25I provides for a minimum
severance payment to certain employees terminated within two years of the
approval. Subchapter 25J prohibits the abrogation of certain labor contracts
prior to their stated date of expiration.
Subchapter 25H of the PaBCL (relating to disgorgement) applies in the
event that (i) any person or group publicly discloses that the person or
group may acquire control of the corporation or (ii) a person or group
acquires (or publicly discloses an offer or intent to acquire) 20% or more of
the voting power of the corporation and, in either case, sells shares within
18 months thereafter. Any profits from sales of equity securities of the
corporation by the person or group during the 18-month period belong to the
corporation if the securities that were sold were acquired during the
18-month period or within 24 months prior thereto.
Subchapters 25E-H of the PaBCL contain a wide variety of transactional and
status exemptions, exclusions and safe harbors. As permitted under the PaBCL,
Meridian and CoreStates have each opted out of the provisions of Subchapters
25G and H but are subject to the provisions of Subchapters 25E and F. Such
action can be reversed under certain circumstances.
In addition, the fiduciary duty standards applicable to the Board of
Directors of each of Meridian and CoreStates under the PaBCL may have the
effect of deterring or discouraging, among other things, a nonnegotiated
tender or exchange offer for Meridian or CoreStates stock, a proxy contest
for control of Meridian or CoreStates, the assumption of control of Meridian
or CoreStates by a holder of a large block of Meridian's or CoreStates'
stock, respectively, and the removal of Meridian's or CoreStates' management.
See "DESCRIPTION OF MERIDIAN CAPITAL SECURITIES -- Special Charter and
Pennsylvania Corporation Law Provisions" in the accompanying Proxy
Statement/Prospectus.
Under a provision of the Pennsylvania Banking Code of 1965 designed to
protect shareholders of Pennsylvania banking institutions, subject to certain
exceptions, no person may offer to acquire, or acquire, control of more than
10% of the outstanding shares of a Pennsylvania banking institution or 5% of
the outstanding shares of a Pennsylvania banking institution if such
institution had net operating loss carry forwards in excess of 20% of its
total shareholders' equity as reported in its most recent publicly available
annual financial statements, without the prior written approval of the
Pennsylvania Department of Banking.
The New Jersey Shareholders Protection Act ("NJSPA") provides that no
corporation organized under the laws of New Jersey with its principal
executive offices or significant operations located in New Jersey (a "New
Jersey Resident Domestic Corporation") may engage in any "business
combination" (as defined in the NJSPA, a "Business Combination") with any
interested shareholder (as defined in the NJSPA, an "Interested Stockholder")
of that New Jersey Resident Domestic Corporation for a period of five years
following that Interested Stockholder's stock acquisition unless that
Business Combination is approved by the board of directors of that New Jersey
Resident Domestic Corporation prior to that Interested Stockholder's stock
acquisition. The term Business Combination as defined in the NJSPA includes,
among other things, certain mergers, consolidations, asset transfers, stock
issuances, plans of liquidation and recapitalizations. Interested
Stockholder, as defined in the NJSPA, includes certain holders of 10% or more
of the voting power of the outstanding voting stock of that New Jersey
Resident Domestic Corporation and certain affiliates of the New Jersey
Resident Domestic Corporation that at any time within the five year period
immediately prior to the date in question were the beneficial owners,
directly or indirectly, of 10% or more of the voting power of the then
outstanding stock of the New Jersey Resident Domestic Corporation.
Pursuant to the NJSPA, no New Jersey Resident Domestic Corporation may
engage, at any time, in any Business Combination with any Interested
Stockholder of that New Jersey Resident Domestic Corporation other
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than: (i) a Business Combination approved by the board of directors of that
New Jersey Resident Domestic Corporation prior to that Interested
Stockholder's stock acquisition, (ii) a Business Combination approved by the
affirmative vote of the holders of two-thirds of the voting stock not
beneficially owned by that Interested Stockholder at a meeting called for
such purpose, or (iii) a Business Combination where the Interested
Stockholder pays a formula price designed to ensure that all holders (other
than the Interested Stockholder) of stock of the New Jersey Resident Domestic
Corporation receive at least the highest price per share paid by that
Interested Stockholder. The NJSPA does not apply to certain inadvertent
acquisitions, provided the shareholder divests itself or himself of a
sufficient number of shares in accordance with the NJSPA. A New Jersey
Resident Domestic Corporation may not opt-out of the NJSPA.
Under the NJBCA, the director of a New Jersey corporation may consider, in
discharging his or her duties to the corporation and in determining what he
or she reasonably believes to be in the best interests of the corporation,
any of the following (in addition to the effects of any action on
shareholders): (i) the effects of the action on the corporation's employees,
suppliers, creditors and customers, (ii) the effects of the action on the
community in which the corporation operates and (iii) the long-term as well
as the short-term interests of the corporation and its shareholders,
including the possibility that these interests may be best served by the
continued independence of the corporation. If, on the basis of the foregoing
factors, the board of directors determines that any proposal or offer to
acquire the corporation is not in the best interests of the corporation, it
may reject such proposal or offer, in which event the board of directors will
have no duty to remove any obstacles to, or refrain from impeding, such
proposal or offer.
REQUIRED SHAREHOLDER VOTE
GENERAL
Subject to the voting rights of any series of Meridian Preferred Stock
then outstanding, the holders of Meridian Common Stock possess exclusive
voting rights of Meridian. Each holder of Meridian Common Stock is entitled
to one vote for each share owned of record. There are no cumulative voting
rights in the election of directors. For general corporate action of the
shareholders of Meridian, the affirmative vote of a majority of the votes
cast in person or by proxy at a shareholders' meeting is required for
approval.
Subject to the voting rights of any series of CoreStates Series Preferred
Stock then outstanding, the holders of CoreStates Common Stock possess
exclusive voting rights of CoreStates. Each holder of CoreStates Common Stock
is entitled to one vote for each share owned of record. There are no
cumulative voting rights in the election of directors. For general corporate
action of the shareholders of CoreStates, the affirmative vote of a majority
of the votes cast in person or by proxy at a shareholders' meeting at which a
quorum is present is required for approval.
Subject to the voting rights of any series of UCB Preferred Stock then
outstanding, the holders of UCB Common Stock possess exclusive voting rights
of UCB. Each holder of UCB Common Stock is entitled to one vote for each
share owned of record. There are no cumulative voting rights in the election
of directors. For general corporate actions submitted to the shareholders of
UCB, the affirmative vote of a majority of votes cast at any shareholders'
meeting is required for approval.
FUNDAMENTAL CHANGES
Meridian's Articles of Incorporation require that a plan of merger,
consolidation, share exchange, division, conversion or transfer of all, or
substantially all, the assets of Meridian (other than in the usual and
regular course of business) must be approved by the affirmative vote of
shareholders entitled to cast at least a majority of the votes which all
shareholders are entitled to cast. In the absence of prior approval by
Meridian's Board of Directors, Meridian's Articles of Incorporation require a
vote of shareholders with at least 80% of Meridian's total voting power to
approve any merger, consolidation, share exchange, asset transfer (in respect
of a sale, lease, exchange or other disposition of all, or substantially all,
the assets of Meridian) or similar transactions involving a shareholder
holding 5% or more of Meridian's voting power.
CoreStates Articles of Incorporation and Bylaws do not contain similar
provisions with respect to business combinations. However, under the PaBCL,
applicable to CoreStates, a plan of merger, consolidation, share
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exchange, division, conversion or asset transfer (in respect of a sale,
lease, exchange or other disposition of all, or substantially all, the assets
of a corporation other than in the usual and regular course of business)
generally must be proposed by the board of directors and approved by the
affirmative vote of a majority of the votes cast by all shareholders of any
class or series of shares entitled to vote thereon as a class.
The PaBCL also provides that if a shareholder of a registered corporation
is a party to a sale of assets transaction, share exchange, merger or
consolidation involving the corporation or a subsidiary, or if a shareholder
is to receive a disproportionate amount of the shares or other securities of
any corporation surviving or resulting from a plan of division, or is to be
treated differently in a corporate dissolution from other shareholders of the
same class, or is to have a materially increased percentage of voting or
economic share interest in the corporation relative to substantially all
other shareholders as a result of a reclassification, then approval must be
obtained of the shareholders entitled to cast at least a majority of the
votes which all shareholders other than the interested shareholder are
entitled to cast with respect to the transaction, without counting the votes
of the interested shareholder (and certain affiliated and associated
persons). Such additional shareholder approval is not required if the
consideration to be received by the other shareholders in such transaction
for shares of any class is not less than the highest amount paid by the
interested shareholder in acquiring shares of the same class, or if the
proposed transaction is approved by a majority of the board of directors
other than certain directors affiliated or associated with, or nominated by,
the interested shareholder.
Under the PaBCL, an articles amendment or plan of reclassification,
merger, consolidation, exchange, asset transfer, division or conversion that
provides mandatory special treatment for the shares of a class held by
particular shareholders or groups of shareholders that differs materially
from the treatment accorded other shareholders or groups of shareholders
holding shares of the same class must be approved by each group of holders of
any outstanding shares of a class who are to receive the same special
treatment under the amendment or plan, voting as a special class in respect
of the plan, regardless of any limitations stated in the articles or bylaws
on the voting rights of any class or series. At the option of the
corporation's board of directors, the approval of such special treatment by
any such affected group may be omitted, but in such event the holder of any
outstanding shares of the special class so denied voting rights will be
entitled to dissenters' rights (i.e., the right to demand payment in cash by
the corporation of the fair value of the shareholder's shares).
UCB's Certificate of Incorporation requires a supermajority vote of
shareholders to approve business combinations (includes any merger,
consolidation, or any sale, transfer, or other disposition of all or a
substantial part of the assets of UCB). For a business combination which has
been recommended by at least 66 2/3 % of UCB's Board of Directors, the
affirmative vote of 66 2/3 % of the shares entitled to vote is required for
approval. For a business combination which has not been recommended by at
least 66 2/3 % of UCB's Board of Directors, the affirmative vote of 75% of
the shares entitled to vote is required for approval.
AMENDMENT OF ARTICLES OR CERTIFICATE OF INCORPORATION
Meridian's Articles of Incorporation contain various provisions that
require a supermajority vote of shareholders to amend or repeal particular
sections of such Articles. Amendment or repeal of the provisions of
Meridian's Articles of Incorporation relating to noncumulative voting, the
classification of directors, the requirement of holding meetings for
shareholder action, the amendment of Bylaws generally, and the consideration
of non-economic factors by Meridian's Board of Directors in evaluating a
tender offer, all require a 66 2/3 % vote of shareholders, absent prior
Meridian Board approval. In the case of certain other provisions, including
the supermajority vote requirement on a merger or similar transaction with a
5% or greater Meridian shareholder, amendment or repeal requires a vote of
shareholders owning 80% of Meridian's outstanding shares or a 66 2/3 % vote
of both Meridian's Board of Directors and its shareholders.
CoreStates' Articles of Incorporation may be amended in the manner
prescribed by the PaBCL. The PaBCL generally provides that an amendment of
the articles of incorporation must be proposed by the Board of Directors and
may be adopted by the affirmative vote of a majority of the votes cast by all
shareholders entitled to vote thereon. Notwithstanding the foregoing, without
the consent of the holders of at least two-thirds of the shares of Series
Preferred Stock outstanding, CoreStates cannot adopt or effect any amendment
to its Articles of Incorporation which would adversely affect the rights or
preferences of the Series Preferred Stock (except as may be expressly
permitted under its Articles of Incorporation with the consent of the holders
of a majority of the shares of Series Preferred Stock); provided, however,
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that if any such amendment adversely affects the rights or preferences of one or
more, but not all, of the series of Series Preferred Stock at the time
outstanding, the consent of the holders of at least two-thirds shares of all
Series Preferred Stock is required.
The NJBCA provides that a corporation's articles of incorporation may be
amended upon approval of such corporation's board of directors and the
affirmative vote of a majority of the votes cast by shareholders entitled to
vote, subject to any supermajority requirements set forth in such articles of
incorporation. UCB's Certificate of Incorporation requires the affirmative
vote of 66 2/3 % of the shares entitled to vote to amend any of the
provisions set forth in Article VI of UCB's Certificate of Incorporation
regarding business combinations.
AMENDMENT OF BYLAWS
The authority to amend or repeal Meridian's Bylaws is vested in Meridian's
Board of Directors, subject always to the power of the shareholders of
Meridian to change such action by the affirmative vote of shareholders
holding at least 66 2/3 % of the voting power (except that any amendment to
the indemnification provisions set forth in the Bylaws requires the
affirmative vote of 66 2/3 % of the Board of Directors or shareholders
holding 80% of the voting power).
CoreStates Bylaws may be amended by shareholder vote by a majority of the
votes cast by all shareholders entitled to vote or by a majority of the Board
of Directors if the matter in question is not required to be submitted to the
shareholders by statute.
UCB's Bylaws may be amended by the Board of Directors of UCB or by the
affirmative vote of the majority of votes cast by shareholders entitled to
vote on such amendment.
MANDATORY TENDER OFFER PROVISION
Meridian's Articles of Incorporation provide that any person or entity
acquiring Meridian capital stock with 25% or more of Meridian's total voting
power is required to offer to purchase, for cash, all shares of Meridian's
voting stock, at a price per share equal to the highest price paid by such
person for each respective class of Meridian's voting stock within the
preceding twelve months. Neither CoreStates' Articles of Incorporation nor
UCB's Certificate of Incorporation contain an equivalent provision. The PaBCL
also provides that following any acquisition by a person or group of more
than 20% of a publicly-held corporation's voting stock, the remaining
shareholders have the right to receive payment, in cash, for their shares
from such person or group of an amount equal to the "fair value" of their
shares. The NJBCA contains no equivalent provision.
DISSENTERS' RIGHTS
Under the PaBCL, a shareholder of a corporation is generally entitled to
receive payment for the fair value of such shareholder's shares if such
shareholder duly exercises its dissenters' rights with respect to a plan of
merger or consolidation, share exchange or asset transfer, to which such
corporation is a party, except if the shares are (i) listed on a national
securities exchange or (ii) held by more than 2,000 shareholders. The
foregoing market exceptions do not apply, and dissenters' rights generally
are available in respect of, (i) shares that are not converted solely into
shares or shares and money in lieu of fractional shares, (ii) shares of any
preferred or special class unless the shareholders of the class are entitled
to vote on the plan and such class vote is required for the adoption of the
plan or to effectuate the transaction and (iii) shares which under the plan
are treated differently from shares of the same class or series and which are
not entitled to vote as a special class under PaBCL Section1906(c). The PaBCL
allows a corporation to provide dissenters' rights notwithstanding the
statutory exceptions but neither Meridian's nor CoreStates' Articles of
Incorporation or Bylaws require such optional dissenters' rights. Under the
PaBCL, if a plan of merger or consolidation, share exchange, asset transfer,
division or conversion is adopted by the directors only, without any
shareholder approvals required, the shareholders have no statutory
dissenters' rights in respect of the plan other than optional dissenters'
rights, if any. In respect of the Merger and the Meridian/CoreStates Merger,
no statutory dissenters' rights are applicable and no optional dissenters'
rights have been granted to shareholders.
The NJBCA generally provides for dissenters' rights in connection with any
merger or consolidation or any sale, lease, exchange, or other disposition of
all or substantially all of the assets of the corporation not in the
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usual or ordinary course of business. However, no such rights exist with
respect to (i) any class or series of shares that is listed on a national
securities exchange or is held of record by not less than 1,000 holders on
the record date fixed to determine the shareholders entitled to vote on the
transaction, or, generally, (ii) any transaction in connection with which the
shareholders of the corporation will receive only (a) cash, (b) securities
that, upon consummation of the transaction, will be listed on a national
securities exchange or held by record by not less than 1,000 holders, or (c)
cash and such securities. A shareholder of a corporation may also dissent
from any acquisition of shares owned by such shareholder in connection with
the acquisition by another New Jersey corporation, in exchange for its
shares, of all the shares of a class or series of securities of such
corporation. Any shareholder that perfects dissenters' rights under the NJBCA
is entitled to receive the "fair value" of such shares as determined either
by agreement between such shareholder and the corporation or by a court of
competent jurisdiction. UCB stockholders have no dissenters' rights with
respect to the Merger and, if the Merger is consummated, would have no
dissenters' rights, as shareholders of Meridian, with respect to the
Meridian/CoreStates Merger.
DIVIDENDS
Under the PaBCL, a corporation may pay dividends unless, after giving
effect thereto, (i) the corporation would be unable to pay its debts as they
come due in the usual course of business or (ii) the total assets of the
corporation would be less than the sum of its total liabilities plus the
amount that would be needed, if the corporation were to be dissolved at the
time as of which the distribution is measured, to satisfy the preferential
rights upon dissolution of shareholders whose preferential rights are
superior to those receiving the distribution.
Subject to any restrictions contained in a corporation's certificate of
incorporation, the NJBCA provides that a corporation may pay dividends
unless, after giving effect thereto, (i) the corporation would be unable to
pay its debts as they become due in the usual course of its business or (ii)
the corporation's total assets would be less than its total liabilities.
UCB's Certificate of Incorporation provides that no dividends may be paid on
UCB Common Stock if UCB is in default with respect to any dividend due and
payable on, or any sinking fund or redemption requirements with respect to,
any outstanding UCB Preferred Stock.
VOLUNTARY DISSOLUTION
Under the PaBCL and Meridian's Articles of Incorporation, if at least 66
2/3 % of Meridian's Board of Directors recommends that Meridian be dissolved
and directs that the question be submitted to a vote at a meeting of
shareholders, Meridian may be dissolved upon the affirmative vote of a
majority of the votes cast by all shareholders entitled to vote thereon and,
if any class of shares is entitled to vote thereon as a class, the
affirmative vote of a majority of the votes cast in each class vote. If at
least 66 2/3 % of Meridian's Board of Directors has not recommended that
Meridian be dissolved, Meridian may be dissolved upon the affirmative vote of
shareholders entitled to cast at least 80% of the votes which all
shareholders are entitled to cast.
Under the PaBCL, if CoreStates' Board of Directors recommends that
CoreStates be dissolved and directs that the question be submitted to a vote
at a meeting of shareholders, CoreStates may be dissolved upon the
affirmative vote of a majority of the votes cast by all shareholders entitled
to vote thereon and, if any class of shares is entitled to vote thereon as a
class, the affirmative vote of a majority of the votes cast in each class
vote.
Under the NJBCA, UCB may be dissolved upon the consent of all its
shareholders entitled to vote thereon or, alternatively, if the UCB Board
recommends that UCB be dissolved and directs that the question be submitted
to a vote at a meeting of shareholders, UCB may be dissolved upon the
affirmative vote of a majority of the votes cast by the shareholders entitled
to vote thereon and, if any class or series of securities of UCB is entitled
to vote on such motion as a class, upon the affirmative vote of a majority of
the votes cast by each such class. If the dissolution is proposed by, on
behalf of or pursuant to any agreement, arrangement or understanding with an
Interested Stockholder, the NJSPA will apply. See "Antitakeover Provisions"
above.
PREEMPTIVE RIGHTS
Neither the holders of Meridian Common Stock, CoreStates Common Stock, nor
UCB Common Stock are entitled to preemptive rights.
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EXPERTS
The consolidated financial statements of Meridian and subsidiaries as of
December 31, 1994 and 1993, and for each of the years in the three-year
period ended December 31, 1994, have been incorporated by reference herein
and in the Registration Statement in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in
accounting and auditing. The report of KPMG Peat Marwick LLP covering the
aforementioned financial statements contains an explanatory paragraph which
discusses that Meridian adopted the provisions of the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 115,
Accounting for Certain Investments in Debt and Equity Securities, and No.
112, Employers' Accounting for Postemployment Benefits, in 1994, and No. 106,
Employers' Accounting for Postretirement Benefits Other Than Pensions, and
No. 109, Accounting for Income Taxes, in 1993.
The consolidated financial statements of UCB as of December 31, 1994 and
1993 and for each of the years in the three-year period ended December 31,
1994, have been incorporated by reference herein and in the Registration
Statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing. The report of
KPMG Peat Marwick LLP covering the aforementioned consolidated financial
statements refers to a change in method of accounting for certain investments
in debt and equity securities in 1994, income taxes in 1993 and
post-retirement benefits other than pensions in 1992.
The consolidated financial statements of CoreStates for the years ended
December 31, 1994, 1993 and 1992 included in Meridian's Current Report on
Form 8-K filed December 29, 1995 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such consolidated financial statements
are incorporated herein by reference in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
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ANNEX A
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UPDATED OPINION OF GOLDMAN, SACHS & CO.
A-1
<PAGE>
[LETTERHEAD OF GOLDMAN SACHS & CO., INC.]
January 4, 1996
Board of Directors
United Counties Bancorporation
Four Commerce Drive
Cranford, New Jersey 07016
Gentlemen:
You have requested our opinion as to the fairness to the holders of the
outstanding shares of Common Stock, no par value (the "Shares"), of United
Counties Bancorporation (the "Company") of the exchange ratio of 5.0 shares
of Common Stock, par value $5.00 per share ("Meridian Common Stock"), of
Meridian Bancorp, Inc. ("Meridian") to be received for each Share (the
"Exchange Ratio") pursuant to the Agreement and Plan of Merger dated as of
May 23, 1995 between Meridian and the Company (the "Agreement").
Goldman, Sachs & Co. ("Goldman Sachs"), as part of its investment banking
business, is continually engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate
and other purposes. We are familiar with the Company, having acted as its
financial advisor in connection with, and having participated in certain of
the negotiations leading to, the Agreement. We also regularly provide
investment banking and financial advisory services to Meridian, including
having acted as its financial advisor in connection with its proposed merger
(the "Meridian/CoreStates Merger") with CoreStates Financial Corp.
("CoreStates") pursuant to the Agreement and Plan of Merger, dated as of
October 10, 1995 (the "Meridian/CoreStates Agreement"), its acquisition of
Commonwealth Bancshares Corporation in 1993, its disposition of Meridian
Title Insurance Co. in 1992 and its disposition of selected credit card
assets to Mellon Bank Corporation in 1991, and having acted as co-manager in
its common stock offering in 1991, and we can be expected to continue to
provide investment banking and financial advisory services to Meridian. If
the transactions contemplated by the Meridian/CoreStates Agreement are
completed, each share of Meridian Common Stock will be converted into the
right to receive 1.225 shares of common stock, par value $1.00 per share, of
CoreStates ("CoreStates Common Stock"), subject to possible increase under
certain circumstances. Goldman Sachs is a full service securities firm and in
the course of its trading activities it may from time to time effect
transactions and hold positions in the securities of the Company, Meridian
and CoreStates.
In connection with this opinion, we have reviewed, among other things, the
Agreement; the Meridian/CoreStates Agreement; the Proxy Statement/Prospectus,
dated September 25, 1995, of the Company and Meridian and the Supplement
thereto, dated the date of this opinion; Annual Reports to Stockholders and
Annual Reports on Form 10-K of the Company, Meridian and CoreStates for the
five years ended December 31, 1994; certain interim reports to stockholders
and Quarterly Reports on Form 10-Q of the Company, Meridian and CoreStates;
certain other communications from the Company, Meridian and CoreStates to
their respective stockholders; and certain internal financial analyses and
forecasts for the Company, Meridian and CoreStates prepared by their
respective managements. We also have held discussions with members of the
senior management of the Company, Meridian and CoreStates regarding the past
and current business operations, regulatory relationships, financial
condition and future prospects of their respective companies individually and
as combined. In addition, we have reviewed the reported price and trading
activity for the Shares, Meridian Common Stock and CoreStates Common Stock,
compared certain financial and stock market information for the Company,
Meridian and CoreStates with similar information for certain other companies
the securities of which are publicly traded, reviewed the financial terms of
certain recent business combinations in the banking industry and performed
such other studies and analyses as we considered appropriate.
<PAGE>
We have relied without independent verification upon the accuracy and
completeness of all of the financial and other information reviewed by us for
purposes of this opinion. In that regard, we have assumed, with your consent,
that the financial forecasts, including, without limitation, cost savings and
operating synergies projected by Meridian to result from the merger
contemplated by the Agreement and from the Meridian/CoreStates Merger, have
been reasonably prepared on a basis reflecting the best currently available
judgments and estimates of the Company, Meridian and CoreStates and that such
forecasts will be realized in the amounts and at the times contemplated
thereby. We are not experts in the evaluation of loan portfolios for purposes
of assessing the adequacy of the allowances for losses with respect thereto
and have assumed, with your consent, that such allowances for each of the
Company, Meridian and CoreStates are adequate to cover all such losses. In
addition, we have not reviewed individual credit files nor have we made an
independent evaluation or appraisal of the assets and liabilities of the
Company, Meridian or CoreStates or any of their respective subsidiaries and
we have not been furnished with any such evaluation or appraisal. We have
assumed with your consent that each of the merger contemplated by the
Agreement and the Meridian/CoreStates Merger will be accounted for as a
pooling of interests under generally accepted accounting principles.
Based upon and subject to the foregoing and based upon such other matters as
we consider relevant, it is our opinion that as of the date hereof the
Exchange Ratio pursuant to the Agreement is fair to the holders of Shares.
Very truly yours,
GOLDMAN, SACHS & CO.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pennsylvania law provides that a Pennsylvania corporation may indemnify
directors, officers, employees and agents of the corporation against
liabilities they may incur in such capacities for any action taken or any
failure to act, whether or not the corporation would have the power to
indemnify the person under any provision of law, unless such action or
failure to act is determined by a court to have constituted recklessness or
willful misconduct. Pennsylvania law also permits the adoption of a bylaw
amendment, approved by shareholders, providing for the elimination of a
director's liability for monetary damages for any action taken or any failure
to take any action unless (1) the director has breached or failed to perform
the duties of his office and (2) the breach or failure to perform constitutes
self-dealing, willful misconduct or recklessness.
The bylaws of Meridian provide for (1) indemnification of directors,
officers, employees and agents of the registrant and its subsidiaries and (2)
the elimination of a director's liability for monetary damages, to the
fullest extent permitted by Pennsylvania law.
Directors and officers are also insured against certain liabilities for
their actions, as such, by an insurance policy obtained by Meridian.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
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2.1 Agreement and Plan of Merger dated as of May 23, 1995, between Meridian Bancorp,
Inc. and United Counties Bancorporation (included as Annex A to the Proxy
Statement/Prospectus). Schedules are omitted; Meridian Bancorp, Inc. agrees
to furnish copies of such schedules to the Commission upon request.
2.2 Stock Option Agreement, dated May 23, 1995, between Meridian Bancorp, Inc.
and United Counties Bancorporation (included as Annex B to the Proxy
Statement/Prospectus).
2.4 Bank Plan of Merger, dated as of May 23, 1995, between Meridian Bank, New
Jersey and United Counties Trust Company (included as Exhibit 3 to Annex
A to the Proxy Statement/Prospectus).
2.5 Agreement and Plan of Merger, dated as of October 10, 1995, by and between
Meridian Bancorp, Inc. and CoreStates Financial Corp. (Incorporated herein
by reference to Exhibit 99.2 to the Current Report on Form 8-K, dated October
10, 1995, of Meridian Bancorp, Inc.).
3.1 Articles of Incorporation of Meridian Bancorp, Inc., as amended (incorporated
herein by reference to Exhibit 3.1 to the Annual Report on Form 10-K of Meridian
Bancorp, Inc. for the year ended December 31, 1994).
3.2 Bylaws of Meridian Bancorp, Inc., as amended (incorporated herein by reference
to Exhibit 3.2 to the Annual Report on Form 10-K of Meridian Bancorp, Inc.
for the year ended December 31, 1991).
4.1 Rights Agreement dated July 25, 1989, between Meridian Bancorp, Inc. and
Meridian Bank, as Rights Agent (incorporated herein by reference to the
Registration Statement on Form 8-A of Meridian Bancorp, Inc. filed August
14, 1989).
4.2 Amendment to Rights Agreement, dated as of June 28, 1994, between Meridian
Bancorp, Inc. and Meridian Trust Company, as Rights Agent, incorporated herein
by reference to Exhibit 2.2 of Amendment No. 1, filed July 25, 1994, to the
Registration Statement on Form 8-A of the Registrant, filed August 14, 1989.
4.3 Amendment to Rights Agreement, dated as of October 10, 1995, between Meridian
Bancorp, Inc. and Meridian Trust Company. (Incorporated herein by reference
to Exhibit 2.3 to Amendment No. 2 on Form 8-A/A, dated November 6, 1995,
to the Registration Statement on Form 8-A dated August 11, 1989 of Meridian
Bancorp, Inc.).
II-1
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4.4 Meridian Bancorp, Inc. has outstanding long-term debt which does not exceed
10% of the total assets of Meridian Bancorp, Inc. and its consolidated
subsidiaries; therefore, copies of the constituent instruments defining the
rights of the holders of such debt are not included as exhibits to this
Registration Statement. Meridian Bancorp, Inc. agrees to furnish copies of
such instruments to the Commission upon request.
5.1 Opinion of Stevens & Lee re: Legality of Common Stock.*
8.1 Form of Opinion of Stevens & Lee re: Tax Matters.*
10.1 Stock Option Agreement, dated as of October 10, 1995, by and between Meridian
Bancorp, Inc., as issuer, and CoreStates Financial Corp, as grantee.
(Incorporated herein by reference to Exhibit A to Exhibit 99.2 to the Current
Report on Form 8-K, dated October 10, 1995, of Meridian Bancorp, Inc.).
10.2 Stock Option Agreement, dated as of October 10, 1995, by and between CoreStates
Financial Corp, as issuer, and Meridian Bancorp, Inc., as grantee. (Incorporated
herein by reference to "Exhibit B to Exhibit 99.2 to the Current Report on
Form 8-K dated October 10, 1995, of Meridian Bancorp, Inc.)
23.1 Consent of KPMG Peat Marwick LLP as to consolidated financial statements
of Meridian Bancorp, Inc. as of December 31, 1994 and 1993 and for each of
the years in the three-year period ended December 31, 1994.
23.2 Consent of KPMG Peat Marwick LLP as to consolidated financial statements
of United Counties Bancorporation as of December 31, 1994 and 1993 and for
each of the three years in the three year period ended December 31, 1994.
23.3 Consent of Stevens & Lee (contained in Exhibit 5).*
23.4 Consent of Stevens & Lee (contained in Exhibit 8.1).*
23.5 Consent of Goldman, Sachs & Co., Inc.*
23.6 Updated Consent of Goldman, Sachs & Co., Inc.
23.7 Consent of Ernst & Young LLP as to consolidated financial statements of
CoreStates Financial Corp as of December 31, 1994 and 1993 and for each of
the three years ended December 31, 1994.
23.8 Consent of Coopers & Lybrand LLP as to consolidated financial statements
of Independence Bancorp, Inc. as of December 31, 1993 and for the years ended
December 31, 1993 and 1992.
23.9 Consent of KPMG Peat Marwick LLP as to consolidated financial statements
of Constellation Bancorp as of December 31, 1993 and for the years ended
December 31, 1993 and 1992.
24.1 Powers of Attorney of Directors and Officers.*
99.1 Opinion of Goldman, Sachs & Co., dated September 21, 1995 (included as Annex
C to the Proxy Statement/Prospectus).
99.2 Form of Proxy for the Special Meeting of Stockholders of United Counties
Bancorporation.*
99.3 Employment agreement, dated September 9, 1993, by and between United Counties
Bancorporation, United Counties Trust Company and Eugene H. Bauer (incorporated
herein by reference to Exhibit I to the Current Report on Form 8-K dated
September 22, 1993 of United Counties Bancorporation).
99.4 Agreement dated May 23, 1995 between Eugene H. Bauer and United Counties
Bancorporation.*
99.5 Updated Opinion of Goldman, Sachs & Co., dated January 4, 1996 (included
as Annex A to the Proxy Statement/Prospectus Supplement).
99.6 Revised Form of Proxy for the reconvened Special Meeting of Shareholders
of United Counties Bancorporation.
</TABLE>
- ------
*Previously filed.
(b) Financial Statement Schedules.
None required. Applicable schedules are included in documents incorporated
herein by reference.
II-2
<PAGE>
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any fact or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated
by reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver,
or cause to be delivered to each person to whom the prospectus is sent or
given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
(c) (1) The undersigned registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered hereunder
through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c), the issuer undertakes that such
reoffering prospectus will contain the information called for by the
applicable registration form with respect to reofferings by persons who
may be deemed underwriters, in addition to the information called for by
the other Items of the applicable form.
(2) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to
meet the requirements of section 10(a)(3) of the Act and is used in
connection with an offering of securities subject to Rule 415, will be
filed as a part of an amendment to the registration statement and will not
be used until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the bylaws of the
registrant, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
(e) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus
pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of
II-3
<PAGE>
receipt of such request, and to send the incorporated documents by first
class mail or other equally prompt means. This includes information contained
in documents filed subsequent to the effective date of the registration
statement through the date of responding to the request.
(f) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this post-effective amendment to registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Reading, Commonwealth of Pennsylvania, on December 27, 1995.
MERIDIAN BANCORP, INC.
(Registrant)
By: /s/ Samuel A. McCullough
---------------------------------
Samuel A. McCullough,
Chairman and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
post-effective amendment to registration statement has been signed by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
---------------------------------- ------------------------------------------ --------------------
<S> <C> <C>
/s/ Samuel A. McCullough
- ----------------------------------- Chairman, Chief Executive Officer and Director
Samuel A. McCullough (Principal Executive Officer) December 27, 1995
/s/ David E. Sparks*
- ----------------------------------- Vice Chairman, Chief Financial Officer and
David E. Sparks Director (Principal Financial Officer) December 27, 1995
/s/ Michael B. High
- ----------------------------------- Senior Vice President (Principal
Michael B. High Accounting Officer) December 27, 1995
/s/ Delight E. Breidegam, Jr.* Director
- -----------------------------------
DeLight E. Breidegam, Jr. December 27, 1995
/s/ Thomas F. Burke, Jr.* Director
- -----------------------------------
Thomas F. Burke, Jr. December 27, 1995
/s/ Robert W. Cardy* Director
- -----------------------------------
Robert W. Cardy December 27, 1995
Director
- -----------------------------------
Harry Corless December 27, 1995
/s/ William D. Davis* Director
- -----------------------------------
William D. Davis December 27, 1995
Director
- -----------------------------------
Julius W. Erving December 27, 1995
/s/ Fred D. Hafer* Director
- -----------------------------------
Fred D. Hafer December 27, 1995
Director
- -----------------------------------
Lawrence C. Karlson December 27, 1995
Director
- -----------------------------------
Ezekiel S. Ketchum December 27, 1995
/s/ Sidney D. Kline, Jr.* Director
- -----------------------------------
Sidney D. Kline, Jr. December 27, 1995
/s/ George W. Leighow* Director
- -----------------------------------
George W. Leighow December 27, 1995
II-5
<PAGE>
Signature Title Date
---------------------------------- ------------------------------------------ --------------------
/s/ Joseph F. Paquette, Jr.* Director
- -----------------------------------
Joseph F. Paquette, Jr. December 27, 1995
/s/ Daniel H. Polett* Director
- -----------------------------------
Daniel H. Polett December 27, 1995
/s/ Lawrence R. Pugh* Director
- -----------------------------------
Lawrence R. Pugh December 27, 1995
Director
- -----------------------------------
Paul R. Roedel December 27, 1995
/s/ Wilmer R. Schultz* Director
- -----------------------------------
Wilmer R. Schultz December 27, 1995
/s/ Robert B. Seidel* Director
- -----------------------------------
Robert B. Seidel December 27, 1995
/s/ Judith M. von Seldeneck* Director
- -----------------------------------
Judith M. von Seldeneck December 27, 1995
/s/ George Strawbridge, Jr.* Director
- -----------------------------------
George Strawbridge, Jr. December 27, 1995
/s/ Anita A. Summers* Director
- -----------------------------------
Anita A. Summers December 27, 1995
/s/ Earle A. Wootton* Director
- -----------------------------------
Earle A. Wootton December 27, 1995
*/s/ Samuel A. McCullough
- -----------------------------------
Attorney-in-fact December 27, 1995
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
<TABLE>
<CAPTION>
<S> <C>
2.1 Agreement and Plan of Merger dated as of May 23, 1995, between Meridian Bancorp,
Inc. and United Counties Bancorporation (included as Annex A to the Proxy
Statement/Prospectus). Schedules are omitted; Meridian Bancorp, Inc. agrees
to furnish copies of such schedules to the Commission upon request.
2.2 Stock Option Agreement, dated May 23, 1995, between Meridian Bancorp, Inc.
and United Counties Bancorporation (included as Annex B to the Proxy
Statement/Prospectus).
2.4 Bank Plan of Merger, dated as of May 23, 1995, between Meridian Bank, New
Jersey and United Counties Trust Company (included as Exhibit 3 to Annex
A to the Proxy Statement/Prospectus).
3.1 Articles of Incorporation of Meridian Bancorp, Inc., as amended (incorporated
herein by reference to Exhibit 3.1 to the Annual Report on Form 10-K of Meridian
Bancorp, Inc. for the year ended December 31, 1994).
3.2 Bylaws of Meridian Bancorp, Inc., as amended (incorporated herein by reference
to Exhibit 3.2 to the Annual Report on Form 10-K of Meridian Bancorp, Inc.
for the year ended December 31, 1991).
4.1 Rights Agreement dated July 25, 1989, between Meridian Bancorp, Inc. and
Meridian Bank, as Rights Agent (incorporated herein by reference to the
Registration Statement on Form 8-A of Meridian Bancorp, Inc. filed August
14, 1989).
4.2 Amendment to Rights Agreement, dated as of June 28, 1994, between Meridian
Bancorp, Inc. and Meridian Trust Company, as Rights Agent, incorporated herein
by reference to Exhibit 2.2 of Amendment No. 1, filed July 25, 1994, to the
Registration Statement on Form 8-A of the Registrant, filed August 14, 1989.
4.3 Meridian Bancorp, Inc. has outstanding long-term debt which does not exceed
10% of the total assets of Meridian Bancorp, Inc. and its consolidated
subsidiaries; therefore, copies of the constituent instruments defining the
rights of the holders of such debt are not included as exhibits to this
Registration Statement. Meridian Bancorp, Inc. agrees to furnish copies of
such instruments to the Commission upon request.
5.1 Opinion of Stevens & Lee re: Legality of Common Stock.*
8.1 Form of Opinion of Stevens & Lee re: Tax Matters.*
23.1 Consent of KPMG Peat Marwick LLP as to consolidated financial statements
of Meridian Bancorp, Inc. as of December 31, 1994 and 1993 and for each of
the years in the three-year period ended December 31, 1994.
23.2 Consent of KPMG Peat Marwick LLP as to consolidated financial statements
of United Counties Bancorporation as of December 31, 1994 and 1993 and for
each of the three years in the three year period ended December 31, 1994.
23.3 Consent of Stevens & Lee (contained in Exhibit 5).*
23.4 Consent of Stevens & Lee (contained in Exhibit 8.1).*
23.5 Consent of Goldman, Sachs & Co., Inc.
23.6 Updated Consent of Goldman, Sachs & Co., Inc.
23.7 Consent of Ernst & Young LLP as to consolidated financial statements of
CoreStates Financial Corp as of December 31, 1994 and 1993 and for each of
the three years ended December 31, 1994.
23.8 Consent of Coopers & Lybrand LLP as to consolidated financial statements
of Independence Bancorp, Inc. as of December 31, 1993 and for the years ended
December 31, 1993 and 1992.
23.9 Consent of KPMG Peat Marwick LLP as to consolidated financial statements
of Constellation Bancorp as of December 31, 1993 and for the years ended
December 31, 1993 and 1992.
24.1 Powers of Attorney of Directors and Officers.*
99.1 Opinion of Goldman, Sachs & Co., dated September 21, 1995 (included as Annex
C to the Proxy Statement/Prospectus).
99.2 Form of Proxy for the Special Meeting of Stockholders of United Counties
Bancorporation.*
99.3 Employment Agreement, dated September 9, 1993, by and between United Counties
Bancorporation, United Counties Trust Company and Eugene H. Bauer (incorporated
herein by reference to Exhibit I to the Current Report on Form 8-K dated
September 22, 1993 of United Counties Bancorporation).
99.4 Agreement dated May 23, 1995 between Eugene H. Bauer and United Counties
Bancorporation.*
99.5 Updated opinion of Goldman, Sachs & Co., dated January 4, 1996 (included
as Annex A to the Proxy Statement/Prospectus Supplement).
99.6 Revised Form of Proxy for the reconvened Special Meeting of Shareholders
of United Counties Bancorporation.
</TABLE>
- ------
* Previously filed.
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Meridian Bancorp, Inc.:
We consent to the incorporation by reference in Post-Effective Amendment No.
1 to the Registration Statement (No. 33-62305) on Form S-4 of Meridian
Bancorp, Inc. of our report on the consolidated financial statements included
in the 1994 Annual Report on Form 10-K of Meridian Bancorp, Inc. and to the
reference to our firm under the heading "Experts" in the Joint Proxy
Statement/Prospectus. The report of KPMG Peat Marwick LLP covering the
aforementioned financial statements contains an explanatory paragraph which
discusses that the Company adopted the provisions of the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 115,
Accounting for Certain Investments in Debt and Equity Securities and No. 112,
Employers' Accounting for Postemployment Benefits, in 1994 and Financial
Accounting Standards No. 106, Employers' Accounting for Postretirement
Benefits Other Than Pensions, and No. 109, Accounting for Income Taxes, in
1993.
/s/ KPMG Peat Marwick LLP
January 2, 1996
Philadelphia, PA
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
United Counties Bancorporation:
We consent to the incorporation by reference in Post-Effective Amendment No.
1 to the Registration Statement (No. 33-62305) on Form S-4 of Meridian
Bancorp, Inc. and in the related prospectus of our report dated January 13,
1995, relating to the consolidated balance sheets of United Counties
Bancorporation as of December 31, 1994 and 1993, and the related consolidated
statements of income, stockholders' equity, and cash flow for each of the
years in the three-year period ended December 31, 1994, which report is
incorporated by reference in United Counties Bancorporation's 1994 Annual
Report on Form 10-K, and to the reference to our Firm under the heading
"Experts" in the Registration Statement of Meridian Bancorp, Inc.
Our report refers to a change in the method of accounting for certain
investments in debt and equity securities in 1994, income taxes in 1993, and
postretirement benefits other than pensions in 1992.
/S/ KPMG Peat Marwick LLP
Short Hills, New Jersey
January 2, 1996
<PAGE>
EXHIBIT 23.6
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Tel: 212-902-1000
January 4, 1996
Board of Directors
United Counties Bancorporation
Four Commerce Drive
Cranford, New Jersey 07016
Dear Sirs:
We hereby consent to the inclusion in the Post Effective Amendment No. 1 to the
Registration Statement on Form S-4 (File No. 33-62305) of our opinion letter
appearing as Annex A to the Proxy Statement/Prospectus Supplement which is a
part of the Post Effective Amendment No. 1 to the Registration Statement and to
the references thereto and to out firm under the caption "UPDATED OPINION OF
UCB'S FINANCIAL ADVISOR". In giving such consent, we do not thereby admit that
we come within the category of persons whose consent is required under Section 7
of the Securities Act of 1933 or the rules and regulations of the Securities
and Exchange Commission thereunder.
Sincerely,
/s/ Goldman, Sachs & Co.
- ------------------------
Goldman, Sachs & Co.
<PAGE>
EXHIBIT 23.7
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the reference of our firm under the caption "Experts" in
Post-Effective Amendment No. 1 to the Registration Statement (Form S-4 No.
33-62305) and in the related Prospectus of Meridian Bancorp, Inc. for the
registration of 10,954,185 shares of its common stock and to the
incorporation by reference therein of our report dated February 7, 1995, with
respect to the consolidated financial statements of CoreStates Financial Corp
included in Meridian Bancorp, Inc.'s Current Report on Form 8-K dated on or
about December 29, 1995, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
January 2, 1996
<PAGE>
EXHIBIT 23.8
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-Effective Amendment
No. 1 to the Registration Statement on Form S-4 (File No. 33-62305) of
Meridian Bancorp, Inc. of our report, which includes an explanatory paragraph
related to a change in the method of accounting for investments in 1993 and
method of accounting for income taxes in 1992, dated January 19, 1994, on our
audit of the consolidated financial statements of Independence Bancorp, Inc.
as of December 31, 1993 and for the years ended December 31, 1993 and 1992,
incorporated by reference in CoreStates Annual Report on Form 10-K for the
year ended December 31, 1994.
/s/ Coopers & Lybrand LLP
Philadelphia, Pennsylvania
January 2, 1996
<PAGE>
EXHIBIT 23.9
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation herein by reference in Post-Effective
Amendment No. 1 to the Registration Statement (No. 33-62305) on Form S-4 of
Meridian Bancorp, Inc. and in the related Prospectus of our report dated
March 16, 1994, except as to the third paragraph of Note 1 and the last
paragraph of Note 16 which are as of July 19, 1994 relating to the
consolidated statement of condition of Constellation Bancorp and subsidiaries
as of December 31, 1993, and the related consolidated statements of
operations, changes in shareholders' equity and cash flows for each of the
years in the two-year period ended December 31, 1993, which report appears in
the Form 8-K of Meridian Bancorp, Inc. dated December 28, 1995. Our report
refers to a restatement of the 1993 financial statements to remove certain
merger-related charges, and to a change in accounting for postretirement
benefits, other than pensions, income taxes, and certain investments in debt
and equity securities in 1993. The financial statements referred to above are
not separately presented in such report on Form 8-K.
/s/ KPMG Peat Marwick LLP
Short Hills, New Jersey
January 2, 1996
