<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 1, 1997.
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
WACHOVIA CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
NORTH CAROLINA 6060 56-1473727
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation) Industrial Identification No.)
Classification Code No.)
</TABLE>
<TABLE>
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100 NORTH MAIN STREET 191 PEACHTREE STREET, N.E.
P. O. BOX 3099 ATLANTA, GEORGIA 30303
WINSTON-SALEM, NORTH CAROLINA 27150 (404) 332-5000
(910) 770-5000
</TABLE>
(Address, including ZIP Code, and telephone number, including area code, of
registrant's principal executive offices)
KENNETH W. MCALLISTER
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
P. O. BOX 3099
WINSTON-SALEM, NORTH CAROLINA 27150
(910) 770-5000
(Name, address, including ZIP Code, and telephone number, including area code,
of agent for service)
WITH COPIES TO:
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<S> <C> <C>
MARK J. MENTING MICHAEL V. MITRONE
SULLIVAN & CROMWELL GUNSTER, YOAKLEY, VALDES-FAULI
125 BROAD STREET AND & STEWART, P.A.
NEW YORK, NEW YORK 10004 777 SOUTH FLAGLER DRIVE
(212) 558-4000 WEST PALM BEACH, FLORIDA 33401-6094
(561) 655-1980
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE OF THE SECURITIES 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. [ ]
CALCULATION OF REGISTRATION FEE
[CAPTION]
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PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE PROPOSED MAXIMUM AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED(1) OFFERING PRICE PER UNIT PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common stock................ 3,905,500 shares N/A N/A $ 67,950(2)
-44,100(3)
$ 23,850(3)
</TABLE>
(1) The number of shares of Common Stock, par value $5.00 per share ("Wachovia
Common Stock"), of Wachovia Corporation to be registered pursuant to this
Registration Statement is based upon the number of shares of Common Stock,
par value $0.01 per share ("1st United Common Stock"), of 1st United Bancorp
presently outstanding or reserved for issuance under various plans or
otherwise expected to be issued upon the consummation of the proposed
transaction to which this Registration Statement relates, multiplied by the
maximum exchange ratio of 0.366 shares of Wachovia Common Stock for each
share of 1st United Common Stock.
(2) Pursuant to Rules 457(f) and 457(c) under the Securities Act of 1933, as
amended, the registration fee is based on the average of the high and low
sales prices of 1st United Common Stock, as reported in the Nasdaq National
Market System on September 26, 1997 ($21), and computed based on the
estimated maximum number of such shares (10,671,000) that may be exchanged
for the Wachovia Common Stock being registered.
(3) A registration fee of $44,100 was previously paid in connection with the
filing by 1st United of preliminary proxy solicitation materials, under
Section 14(g) and Rule 0-11(a)(2) of the Securities Exchange Act of 1934, as
amended, which fee, pursuant to Rule 457(b) under the Securities Act of
1933, as amended, has been credited against the registration fee payable
hereunder.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
1ST UNITED BANCORP
980 N. FEDERAL HIGHWAY
BOCA RATON, FLORIDA 33432
October 1, 1997
Dear Shareholders:
You are cordially invited to attend a Special Meeting of Shareholders (the
"Special Meeting") of 1st United Bancorp ("1st United") to be held at the Colony
Hotel, 155 Hammon Avenue, Palm Beach, Florida at 2:00 p.m. on October 30,
1997.
At the Special Meeting, you will be asked to consider and vote upon a
proposal to approve an Agreement and Plan of Merger (the "Merger Agreement")
between 1st United and Wachovia Corporation ("Wachovia"), under which 1st United
would be merged into Wachovia (the "Merger"). If the Merger is approved, each
outstanding share of 1st United Common Stock will be converted into and
exchanged for between 0.3 and 0.366 of a share of Wachovia Common Stock. The
exact exchange ratio will be determined by dividing $20.875 by the average
closing price of Wachovia Common Stock during the ten trading days immediately
preceding the effective date of the Merger, subject to a minimum ratio of 0.3 of
a share of Wachovia Common Stock for each share of 1st United Common Stock and a
maximum ratio of 0.366 of a share of Wachovia Common Stock for each share of 1st
United Common Stock.
The Board of Directors of 1st United has unanimously approved the Merger
Agreement. The Board believes that the Merger is beneficial to all shareholders
and strongly encourages you to vote "FOR" the proposal. 1st United's financial
adviser, Hoefer & Arnett, Incorporated, has issued its opinion to 1st United's
Board of Directors that the terms of the proposed Merger are fair from a
financial point of view to 1st United's shareholders.
Regardless of the number of shares you own, or whether you plan to attend
the Special Meeting, it is very important that your shares be represented and
voted at the meeting. The affirmative vote of a majority of the outstanding
shares of 1st United Common Stock is required for approval. Directors of 1st
United who hold 27.6% of the outstanding shares of 1st United Common Stock have
agreed to vote such shares in favor of the Merger Agreement. Accordingly,
assuming such shares are so voted, approval of the Merger Agreement will require
the affirmative vote of the holders of approximately an additional 23% of the
outstanding shares of 1st United Common Stock in order for the Merger Agreement
to be approved at the Special Meeting. Please read the enclosed material
carefully and complete, sign and return the enclosed proxy in the envelope
provided as soon as possible.
We have engaged W.F. Doring & Co. ("Doring") to assist us with the proxy
solicitation effort. You may receive a phone call from one of their
representatives reminding you to send in your proxy. In addition, if you have
questions, you may call Doring at 1-888-330-5111.
We look forward to seeing you at the Special Meeting.
Sincerely,
/s/ Warren S. Orlando
----------------------
WARREN S. ORLANDO
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
1ST UNITED BANCORP
980 N. FEDERAL HIGHWAY
BOCA RATON, FLORIDA 33432
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO
BE HELD OCTOBER 30, 1997
To the Shareholders of 1st United Bancorp:
Notice is hereby given that a special meeting of shareholders (the "Special
Meeting") of 1st United Bancorp ("1st United") will be held at the Colony Hotel,
155 Hammon Avenue, Palm Beach, Florida at 2:00 p.m., on October 30, 1997,
for the following purposes:
(1) To consider and vote upon an Agreement and Plan of Merger, dated as of
August 6, 1997, and related Plan of Merger (together, the "Merger Agreement"),
between 1st United and Wachovia Corporation ("Wachovia"), pursuant to which 1st
United will merge with and into Wachovia (the "Merger") and each share of 1st
United Common Stock outstanding on the effective date of the Merger shall be
converted into a number of shares of Wachovia Common Stock equal to $20.875
divided by the average closing price of Wachovia Common Stock for the ten
trading days immediately preceding the effective date of the Merger, subject to
a minimum of 0.3 of a share of Wachovia Common Stock for each share of 1st
United Common Stock and a maximum of 0.366 of a share of Wachovia Common Stock
for each share of 1st United Common Stock. A copy of the Merger Agreement is set
forth in Appendix A to the accompanying Proxy Statement/Prospectus and is
incorporated by reference therein.
(2) To transact such other business as may properly come before the Special
Meeting or any adjournment or postponement of the Special Meeting.
Only shareholders of record at the close of business on September 30, 1997
are entitled to receive notice of and to vote at the Special Meeting or any
adjournments or postponements thereof. Approval of the Merger Agreement and the
consummation of the transactions contemplated thereby requires the affirmative
vote of the holders of a majority of the outstanding shares of 1st United Common
Stock. Directors of 1st United who hold 27.6% of the outstanding shares of 1st
United Common Stock have agreed to vote such shares in favor of the Merger
Agreement. Accordingly, assuming such shares are so voted, approval of the
Merger Agreement will require the affirmative vote of the holders of an
approximately additional 23% of the outstanding shares of 1st United Common
Stock in order for the Merger Agreement to be approved at the Special Meeting.
THE BOARD OF DIRECTORS OF 1ST UNITED UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT. ON BEHALF OF THE BOARD
OF DIRECTORS, WE URGE YOU TO VOTE "FOR" THE PROPOSAL.
By Order of the Board of Directors,
/s/ Sandy Wheeler
-----------------
SANDY WHEELER
CORPORATE SECRETARY
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PROXY STATEMENT OF PROSPECTUS OF
1ST UNITED BANCORP WACHOVIA CORPORATION
COMMON STOCK
(PAR VALUE $5.00 PER SHARE)
</TABLE>
This Proxy Statement/Prospectus is being furnished to holders of common
stock, $0.01 par value ("1st United Common Stock"), of 1st United Bancorp, a
Florida corporation ("1st United"), in connection with the solicitation of
proxies by the Board of Directors of 1st United (the "1st United Board") for use
at a Special Meeting of Shareholders to be held at 2:00 p.m., on October 30,
1997, at the Colony Hotel, 155 Hammon Avenue, Palm Beach, Florida and at
any adjournments or postponements thereof (the "Special Meeting").
The purpose of the Special Meeting is to consider and vote upon a proposal
to approve an Agreement and Plan of Merger, dated as of August 6, 1997, and
related Plan of Merger (together, the "Merger Agreement"), by and between 1st
United and Wachovia Corporation, a North Carolina corporation ("Wachovia"),
which provide for, among other things, the merger of 1st United with and into
Wachovia (the "Merger"). See "Summary," "The Merger" and Appendix A to this
Proxy Statement/Prospectus.
Upon consummation of the Merger, each outstanding share of 1st United
Common Stock shall cease to be outstanding and each such share (excluding
certain shares held by 1st United, Wachovia or their subsidiaries, if any) shall
be converted into and exchanged for a fraction of a share of common stock, par
value $5.00 per share ("Wachovia Common Stock"), of Wachovia (the "Exchange
Ratio") equal to $20.875 divided by the average of the last sale prices of
Wachovia Common Stock, as reported by the New York Stock Exchange ("NYSE")
Composite Transactions Reporting System (the "NYSE Composite Tape"), for the ten
NYSE trading days immediately preceding the Effective Date (as defined herein)
(the "Averaging Period"), subject to a minimum of 0.3 of a share of Wachovia
Common Stock for each share of 1st United Common Stock and a maximum of 0.366 of
a share of Wachovia Common Stock for each share of 1st United Common Stock, with
cash paid in lieu of fractional shares. The minimum Exchange Ratio of 0.3 would
apply when such average last sale price of Wachovia Common Stock exceeds $69.375
and the maximum Exchange Ratio of 0.366 would apply when such average last sale
price of Wachovia Common Stock is less than $56.98125. The Merger Agreement also
provides for the conversion upon consummation of the Merger of all stock options
(the "1st United Stock Options") outstanding under the 1st United Stock Plans
(as defined herein) into options to acquire shares of Wachovia Common Stock,
appropriately adjusted to reflect the Exchange Ratio or, at the election of the
optionholder, conversion of such holder's 1st United Stock Options into cash.
See "The Merger."
Approval of the Merger Agreement and the consummation of the transactions
contemplated thereby requires the affirmative vote of the holders of a majority
of the outstanding shares of 1st United Common Stock. Directors of 1st United
who hold 27.6% of the outstanding shares of 1st United Common Stock have agreed
to vote such shares in favor of the Merger Agreement. Accordingly, assuming such
shares are so voted, approval of the Merger Agreement will require the
affirmative vote of the holders of an approximately additional 23% of the
outstanding shares of 1st United Common Stock in order for the Merger Agreement
to be approved at the Special Meeting.
This Proxy Statement/Prospectus also constitutes a prospectus of Wachovia
in respect of the shares of Wachovia Common Stock to be issued to shareholders
of 1st United in connection with the Merger and in respect of any shares of
Wachovia Common Stock that are issuable upon exercise of the 1st United Stock
Options following consummation of the Merger.
Based on the 10,156,327 shares of 1st United Common Stock outstanding on
the Record Date (as hereinafter defined), the 514,028 shares of 1st United
Common Stock issuable upon exercise of outstanding stock options, and the
maximum Exchange Ratio of 0.366, up to approximately 3,905,500 shares of
Wachovia Common Stock will be issuable upon consummation of the Merger.
Wachovia Common Stock is listed and traded on the NYSE. 1st United Common
Stock is traded in the National Market System of the Nasdaq Stock Market (the
"Nasdaq Stock Market"). On August 6, 1997, the last business day prior to public
announcement of the execution of the Merger Agreement, the last reported sale
prices per share of Wachovia Common Stock on the NYSE Composite Tape and of 1st
United Common Stock on the Nasdaq Stock Market were $64 1/2 and $19 3/4,
respectively, and on September 30, 1997, the last practicable date prior to the
mailing of this Proxy Statement/Prospectus, the last reported sale prices per
share were $72 and $21 3/4, respectively.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE SHARES OF WACHOVIA 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 Proxy Statement/Prospectus is October 1, 1997, and it is
being mailed or otherwise delivered to 1st United shareholders on or about such
date.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
<S> <C>
AVAILABLE INFORMATION...................................................................................... 1
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE.......................................................... 1
SUMMARY.................................................................................................... 3
Parties to the Merger.................................................................................... 3
Special Meeting; Record Date............................................................................. 4
The Merger............................................................................................... 4
Acquisitions............................................................................................. 7
Market for Common Stock and Related Shareholder Matters.................................................. 8
Comparison of Certain Unaudited Per Share Data........................................................... 8
Selected Financial Data of Wachovia (Historical)......................................................... 11
Selected Financial Data of 1st United (Historical)....................................................... 12
Wachovia and Central Fidelity Pro Forma Combined Financial Data.......................................... 13
GENERAL INFORMATION........................................................................................ 14
Special Meeting.......................................................................................... 14
Record Date, Solicitation and Revocability of Proxies.................................................... 14
Vote Required............................................................................................ 15
Recommendation of 1st United Board of Directors.......................................................... 15
THE MERGER................................................................................................. 15
General.................................................................................................. 15
Background of, and Reasons for, the Merger............................................................... 16
Opinion of 1st United's Financial Adviser................................................................ 18
Reasons of Wachovia for the Merger....................................................................... 21
Effective Time........................................................................................... 21
Distribution of Wachovia Certificates.................................................................... 21
Fractional Shares........................................................................................ 22
Stock Options............................................................................................ 22
Certain Federal Income Tax Consequences.................................................................. 22
Management and Operations After the Merger............................................................... 23
Post-Acquisition Compensation and Benefits............................................................... 24
Interests of Certain Persons in the Merger............................................................... 24
Conditions to Consummation............................................................................... 27
Regulatory Approvals..................................................................................... 27
Amendment, Waiver and Termination........................................................................ 28
Conduct of Business Pending the Merger................................................................... 28
Expenses and Fees........................................................................................ 30
Accounting Treatment..................................................................................... 30
Dissenters' Rights....................................................................................... 30
Stock Exchange Listing of Wachovia Common Stock.......................................................... 30
Resales of Wachovia Common Stock......................................................................... 30
Stock Option Agreement................................................................................... 31
Shareholder Agreements................................................................................... 34
ACQUISITIONS............................................................................................... 34
Merger with Jefferson Bankshares, Inc.................................................................... 34
Merger with Central Fidelity Banks, Inc.................................................................. 34
Acquisitions Generally................................................................................... 35
WACHOVIA AND CENTRAL FIDELITY UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION........................... 36
DESCRIPTION OF WACHOVIA CAPITAL STOCK...................................................................... 43
General.................................................................................................. 43
Preferred Stock.......................................................................................... 43
Common Stock............................................................................................. 43
Changes in Control....................................................................................... 44
</TABLE>
i
<PAGE>
<TABLE>
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PAGE
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CERTAIN DIFFERENCES IN THE RIGHTS OF WACHOVIA SHAREHOLDERS AND 1ST UNITED SHAREHOLDERS..................... 46
Amendment of Articles of Incorporation and Bylaws........................................................ 46
Special Meetings of Shareholders......................................................................... 46
Number of Directors; Classified Board of Directors....................................................... 47
Removal of Directors..................................................................................... 47
Advance Notice of Director Nominations................................................................... 47
Restrictions on Certain Business Combinations............................................................ 47
Control Share Acquisitions............................................................................... 48
Limitation on Director Liability......................................................................... 48
Indemnification.......................................................................................... 48
Shareholder Inspection Rights; Shareholder Lists......................................................... 49
COMPARATIVE MARKET PRICES AND DIVIDENDS.................................................................... 50
Wachovia................................................................................................. 50
1st United............................................................................................... 51
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS OF 1ST UNITED................................................. 51
Principal Beneficial Owners.............................................................................. 51
Shares Beneficially Owned by Directors and Executive Officers............................................ 52
EXPERTS.................................................................................................... 53
VALIDITY OF WACHOVIA COMMON STOCK.......................................................................... 53
OTHER MATTERS.............................................................................................. 54
SHAREHOLDER PROPOSALS...................................................................................... 54
</TABLE>
<TABLE>
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APPENDICES:
APPENDIX A -- Agreement and Plan of Merger, dated as of August 6, 1997, by and between Wachovia and
1st United, and related Plan of Merger
APPENDIX B -- Stock Option Agreement, dated as of August 6, 1997, by and between Wachovia
and 1st United
APPENDIX C -- Form of Shareholder Agreement
APPENDIX D -- Opinion of Hoefer & Arnett, Inc.
</TABLE>
ii
<PAGE>
AVAILABLE INFORMATION
Wachovia and 1st United are each subject to the reporting and informational
requirements of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder (the "Exchange Act"), and, in accordance therewith,
file reports and other information with the Securities and Exchange Commission
(the "Commission"). Such reports and other information filed by Wachovia and 1st
United with the Commission may be inspected and copied at the principal office
of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and may be inspected at the Commission's Regional
Offices at 7 World Trade Center, New York, New York 10048, and Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material may also be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Certain of such reports, proxy statements and other
information are also available from the Commission over the Internet at
http://www.sec.gov. In addition, Wachovia Common Stock is traded on the NYSE.
Reports, proxy statements, and other information concerning Wachovia may be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005.
1st United Common Stock is traded in the Nasdaq Stock Market. Reports, proxy
statements and other information concerning 1st United may be inspected at the
offices of the National Association of Securities Dealers, Inc., 1735 K Street,
N.W., Washington, D.C. 20006.
This Proxy Statement/Prospectus does not contain all of the information set
forth in the Registration Statement on Form S-4, of which this Proxy
Statement/Prospectus is a part, and exhibits thereto (together with any
amendments thereto, the "Registration Statement"), which has been filed by
Wachovia with the Commission under the Securities Act of 1933, as amended, and
the rules and regulations thereunder (the "Securities Act"), certain portions of
which have been omitted pursuant to the rules and regulations of the Commission
and to which portions reference is hereby made for further information.
Statements contained in this Proxy Statement/Prospectus concerning the
provisions of certain documents filed as exhibits to the Registration Statement
are necessarily brief descriptions thereof, and are not necessarily complete,
and each such statement is qualified in its entirety by reference to the full
text of such document.
This Proxy Statement/Prospectus contains statements describing the material
provisions of certain documents filed or incorporated by reference as exhibits
to the Registration Statement. Such descriptions are not necessarily complete,
and all such statements contained in this Proxy Statement/Prospectus are
qualified in their entirety by reference to the full text of such documents.
All information contained herein with respect to Wachovia and its
subsidiaries has been supplied by Wachovia, and all information with respect to
1st United and its subsidiaries has been supplied by 1st United.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY WACHOVIA OR 1ST UNITED. NEITHER THE DELIVERY
OF THIS PROXY STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES TO
WHICH THIS PROXY STATEMENT/PROSPECTUS RELATES SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF WACHOVIA,
1ST UNITED OR ANY OF THEIR RESPECTIVE SUBSIDIARIES SINCE THE DATE HEREOF OR THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE. THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO PURCHASE, ANY SECURITIES OTHER THAN THE SECURITIES
TO WHICH IT RELATES OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
PURCHASE THE SECURITIES OFFERED BY THIS PROXY STATEMENT/PROSPECTUS IN ANY
JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT LAWFUL.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by Wachovia with the Commission (File No.
1-9021) under Section 13(a) or 15(d) of the Exchange Act are hereby incorporated
by reference in this Proxy Statement/Prospectus: Wachovia's Annual Report on
Form 10-K as of and for the year ended December 31, 1996 (the "1996 Wachovia
10-K"); the portions of Wachovia's Proxy Statement for the Annual Meeting of
shareholders held on April 25, 1997 (the "1997 Wachovia Proxy Statement") that
have been incorporated by reference in the 1996 Wachovia 10-K; Wachovia's
Quarterly Reports on Form 10-Q for the three months ended March 31, 1997 and the
six months ended June 30, 1997; the description of Wachovia Common Stock set
forth in Wachovia's Registration Statement
1
<PAGE>
on Form 8-B filed pursuant to Section 12 of the Exchange Act, and any amendment
or report filed for the purpose of updating any such description; and Wachovia's
Current Reports on Form 8-K, dated June 9, June 23, August 6, and September 8,
1997.
The following documents filed by 1st United with the Commission (File No.
0-20254) under Section 13(a) or 15(d) of the Exchange Act are hereby
incorporated by reference in this Proxy Statement/Prospectus: 1st United's
Annual Report on Form 10-K for the year ended December 31, 1996 (the "1996 1st
United 10-K"), the portions of 1st United's Proxy Statement for the Annual
Meeting of shareholders held on April 29, 1997 that have been incorporated by
reference in the 1996 1st United 10-K; 1st United's Quarterly Reports on Form
10-Q for the three months ended March 31, 1997 and the six months ended June 30,
1997; the description of 1st United Common Stock set forth in 1st United's
Registration Statement on Form 8-A filed pursuant to Section 12 of the Exchange
Act, and any amendment or report filed for the purpose of updating any such
description; and 1st United's Current Reports on Form 8-K, dated January 6,
April 1, April 22, and July 1, 1997 and on Form 8-K/A, dated August 26, 1997.
All documents filed by Wachovia and 1st United pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Proxy
Statement/Prospectus and prior to the Special Meeting are hereby incorporated by
reference in this Proxy Statement/Prospectus and shall be deemed a part hereof
from the date of filing of such document.
Any statement contained herein, in any supplement hereto or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of the Registration Statement and this
Proxy Statement/Prospectus to the extent that a statement contained herein, in
any supplement hereto 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 the Registration
Statement, this Proxy Statement/Prospectus, or any supplement hereto.
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES BY REFERENCE CERTAIN DOCUMENTS
THAT ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS ARE
AVAILABLE WITHOUT CHARGE UPON REQUEST FROM: WACHOVIA CORPORATION, P.O. BOX 3099,
WINSTON-SALEM, NORTH CAROLINA 27150, (910) 770-5000 OR 191 PEACHTREE STREET,
N.E., ATLANTA, GEORGIA 30303, (404) 332-5000, ATTENTION: SECRETARY, AS TO
WACHOVIA DOCUMENTS; AND 1ST UNITED BANCORP, 980 N. FEDERAL HIGHWAY, BOCA RATON,
FLORIDA 33432, (561) 832-7766, ATTENTION: SECRETARY, AS TO 1ST UNITED DOCUMENTS.
IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE
BY OCTOBER 23, 1997. THE REQUESTED DOCUMENTS WILL BE SENT BY FIRST CLASS MAIL
WITHIN ONE BUSINESS DAY OF THE RECEIPT OF THE REQUEST.
THIS PROXY STATEMENT/PROSPECTUS CONTAINS OR INCORPORATES BY REFERENCE
CERTAIN FORWARD LOOKING STATEMENTS WITH RESPECT TO THE FINANCIAL CONDITION,
RESULTS OF OPERATIONS AND BUSINESS OF WACHOVIA AND, ASSUMING THE CONSUMMATION OF
THE MERGER, THE JEFFERSON MERGER (AS DEFINED HEREIN) AND THE CENTRAL FIDELITY
MERGER (AS DEFINED HEREIN), A COMBINED WACHOVIA/1ST UNITED COMPANY, INCLUDING
STATEMENTS RELATING TO: (A) THE COST SAVINGS AND ACCRETION TO CASH EARNINGS AND
REPORTED EARNINGS THAT WILL BE REALIZED FROM THE MERGERS; (B) THE IMPACT OF THE
MERGERS ON REVENUES, INCLUDING THE POTENTIAL FOR ENHANCED REVENUES AND THE
IMPACT ON REVENUES OF CONSOLIDATION OF RETAIL BRANCHES AND OTHER OPERATIONS AS
PLANNED; AND (C) THE RESTRUCTURING CHARGES EXPECTED TO BE INCURRED IN CONNECTION
WITH THE MERGERS. THESE FORWARD LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND
UNCERTAINTIES. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE
FOLLOWING POSSIBILITIES: (1) EXPECTED COSTS SAVINGS FROM THE MERGERS CANNOT BE
FULLY REALIZED OR REALIZED WITHIN THE EXPECTED TIME FRAME; (2) COSTS OR
DIFFICULTIES RELATED TO THE INTEGRATION OF THE BUSINESSES OF WACHOVIA AND 1ST
UNITED, CENTRAL FIDELITY BANKS, INC. AND/OR JEFFERSON BANKSHARES, INC. ARE
GREATER THAN EXPECTED; (3) REVENUES FOLLOWING THE MERGERS ARE LOWER THAN
EXPECTED; (4) COMPETITIVE PRESSURE AMONG DEPOSITORY INSTITUTIONS INCREASES
SIGNIFICANTLY; (5) CHANGES IN THE INTEREST RATE ENVIRONMENT REDUCE INTEREST
MARGINS; (6) GENERAL ECONOMIC CONDITIONS, EITHER NATIONALLY OR IN THE STATES IN
WHICH THE COMBINED COMPANY WILL BE DOING BUSINESS, ARE LESS FAVORABLE THAN
EXPECTED; OR (7) LEGISLATION OR REGULATORY CHANGES ADVERSELY AFFECT THE
BUSINESSES IN WHICH THE COMBINED COMPANY WOULD BE ENGAGED.
2
<PAGE>
SUMMARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED ELSEWHERE IN
THIS PROXY STATEMENT/PROSPECTUS. THIS SUMMARY IS NOT INTENDED TO BE A COMPLETE
DESCRIPTION OF THE MATTERS COVERED IN THIS PROXY STATEMENT/PROSPECTUS AND IS
SUBJECT TO AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE DETAILED
INFORMATION CONTAINED ELSEWHERE IN THIS PROXY STATEMENT/PROSPECTUS, INCLUDING
THE APPENDICES HERETO, AND IN THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS
PROXY STATEMENT/PROSPECTUS. A COPY OF THE MERGER AGREEMENT IS SET FORTH IN
APPENDIX A TO THIS PROXY STATEMENT/PROSPECTUS AND REFERENCE IS MADE THERETO FOR
A COMPLETE DESCRIPTION OF THE TERMS OF THE MERGER. A COPY OF THE STOCK OPTION
AGREEMENT (AS DEFINED HEREIN) IS INCLUDED AS APPENDIX B TO THIS PROXY
STATEMENT/PROSPECTUS AND REFERENCE IS MADE THERETO FOR A COMPLETE DESCRIPTION OF
THE TERMS OF THE OPTION (AS DEFINED HEREIN). SHAREHOLDERS ARE URGED TO READ
CAREFULLY THE ENTIRE PROXY STATEMENT/PROSPECTUS, INCLUDING THE APPENDICES. AS
USED IN THIS PROXY STATEMENT/PROSPECTUS, THE TERMS "WACHOVIA" AND "1ST UNITED"
REFER TO SUCH CORPORATIONS, RESPECTIVELY, AND WHERE THE CONTEXT REQUIRES, SUCH
CORPORATIONS AND THEIR RESPECTIVE SUBSIDIARIES.
PARTIES TO THE MERGER
WACHOVIA. Wachovia is a North Carolina corporation, a bank holding company
registered under the Bank Holding Company Act of 1956, as amended (the "BHC
Act"), and a savings and loan holding company registered under the Home Owners'
Loan Act of 1933, as amended. Wachovia was formed in 1985 as First Wachovia
Corporation, with two bank holding company subsidiaries. Today, Wachovia has one
principal banking subsidiary, Wachovia Bank, National Association ("Wachovia
Bank"), the assets of which constitute substantially all of the assets of
Wachovia. Wachovia has 451 banking offices and 833 ATMs, predominantly in North
Carolina, South Carolina and Georgia. The First National Bank of Atlanta and
Wachovia Bank Card Services, Inc., in Wilmington, Delaware, provide credit card
services for Wachovia Bank. Wachovia also has bank-related subsidiaries engaged
in large corporate and institutional relationship management and business
development, corporate leasing, remittance processing and discount brokerage
services. Wachovia's subsidiaries have offices in Chicago, New York City,
London, Hong Kong, Tokyo and the Cayman Islands. Based on its consolidated asset
size and market capitalization at June 30, 1997, Wachovia was ranked 20th and
22nd, respectively, among domestic U.S. bank holding companies. At that date,
Wachovia had consolidated assets, deposits and shareholders' equity of $48.5
billion, $28.9 billion and $3.7 billion, respectively.
Wachovia's principal executive offices are located at 100 North Main
Street, Winston-Salem, North Carolina 27150 (telephone: (910) 770-5000) and at
191 Peachtree Street, N.E., Atlanta, Georgia 30303 (telephone: (404) 332-5000).
Certain financial and other information relating to Wachovia and its business,
including information relating to Wachovia's directors and executive officers,
is set forth under "Summary -- Selected Financial Data of Wachovia (Historical)"
and in the 1996 Wachovia 10-K (including the portions of the 1997 Wachovia Proxy
Statement incorporated by reference in Part III thereof), Wachovia's 1997 First
and Second Quarter Reports on Form 10-Q and 1997 Current Reports on Form 8-K,
each of which is incorporated by reference herein. See "Available Information"
and "Incorporation of Certain Information by Reference."
1ST UNITED. 1st United is a bank holding company registered under the
provisions of the BHC Act that conducts its operations through its banking
subsidiary, 1st United Bank, a Florida chartered commercial bank. 1st United
maintains its central banking office in Boca Raton, Florida and presently
operates 33 full-service banking facilities in Palm Beach County, Brevard
County, southern Martin County and northern Broward County, Florida. At July 1,
1997, the effective date of 1st United's merger with Seaboard Savings Bank,
F.S.B., 1st United had total assets of approximately $821 million, deposits of
approximately $739 million and shareholders' equity of approximately $69
million.
1st United's principal executive offices are located at 980 N. Federal
Highway, Boca Raton, Florida 33432 (telephone: (561) 832-7766). Certain
financial and other information relating to 1st United and its business is set
forth under "Summary -- Selected Financial Data of 1st United (Historical)" and
in the 1996 1st United 10-K, 1st United 1997 First and Second Quarter Reports on
Form 10-Q and 1997 Current Reports on Form 8-K and Form 8-K/A, each of which is
incorporated by reference herein. See "Available Information" and "Incorporation
of Certain Information by Reference."
3
<PAGE>
SPECIAL MEETING; RECORD DATE
The Special Meeting will be held at 2:00 p.m. on October 30, 1997, at the
Colony Hotel, 155 Hammon Avenue, Palm Beach, Florida. At the Special
Meeting, 1st United shareholders will consider and vote upon approval of the
Merger Agreement and the consummation of the transactions contemplated therein.
The 1st United Board has fixed the close of business on September 30, 1997, as
the record date for determining the 1st United shareholders entitled to receive
notice of and to vote at the Special Meeting (the "Record Date"). As of the
Record Date, there were 10,090,237 shares of 1st United Common Stock issued and
outstanding and entitled to be voted at the Special Meeting. For additional
information with respect to the Special Meeting, including the Record Date and
vote required for approval, see "General Information."
THE MERGER
GENERAL. The Merger Agreement provides that 1st United will merge with and
into Wachovia, which will be the surviving corporation of the Merger and will be
governed by the laws of the State of North Carolina. If the Merger Agreement is
approved at the Special Meeting, all required governmental and other consents
and approvals are obtained and all of the other conditions to the obligations of
the parties to consummate the Merger are either satisfied or waived (as
permitted), the Merger will be consummated. A copy of the Merger Agreement is
set forth in Appendix A to this Proxy Statement/Prospectus. See "The Merger."
EXCHANGE RATIO. At the time of the Merger, each outstanding share of 1st
United Common Stock (excluding certain shares held by 1st United, Wachovia or
their subsidiaries, if any) will be converted into and exchanged for a number of
shares of Wachovia Common Stock equal to the Exchange Ratio. No fractional
shares of Wachovia Common Stock will be issued. Rather, cash (without interest)
will be paid in lieu of any fractional share interest to which any 1st United
shareholder would be entitled upon consummation of the Merger, based on the
average of the last sale prices of the Wachovia Common Stock as reported by the
NYSE Composite Tape (as reported by THE WALL STREET JOURNAL or, if not reported
thereby, any other authoritative source) during the Averaging Period.
VOTE REQUIRED. Approval of the Merger Agreement and consummation of the
transactions contemplated therein requires the affirmative vote of the holders
of a majority of the outstanding shares of 1st United Common Stock. As of the
Record Date, Wachovia held 121,000 shares of 1st United Common Stock and
directors and executive officers of Wachovia and their affiliates held no shares
of 1st United Common Stock. As of the Record Date, neither 1st United nor
Wachovia held any shares of 1st United Common Stock in a fiduciary capacity for
others.
As a condition and an inducement to Wachovia's entering into the Merger
Agreement, certain directors (and certain related entities and family members)
of 1st United who hold approximately 27.6% of the outstanding shares of 1st
United Common Stock, entered into Shareholder Agreements in which they agreed to
vote all such shares in favor of approval of the Merger Agreement. A copy of the
Shareholder Agreement executed by such directors is attached hereto as Appendix
C. Accordingly, assuming such shares are so voted, approval of the Merger
Agreement will require the affirmative vote of the holders of approximately an
additional 23% of the outstanding shares of 1st United Common Stock in order for
the Merger Agreement to be approved at the Special Meeting.
It is not expected that the Merger Agreement and the consummation of the
transactions contemplated therein will require the approval of the holders of
Wachovia Common Stock under either the North Carolina Business Corporation Act
or the rules of the NYSE. See "General Information -- Vote Required."
RECOMMENDATION OF THE 1ST UNITED BOARD OF DIRECTORS. The 1st United Board
believes that the Merger is in the best interests of 1st United and its
shareholders and has unanimously approved the Merger Agreement and approved the
consummation of the transactions contemplated therein. In deciding to adopt the
Merger Agreement and approve the transactions contemplated therein, the 1st
United Board considered a number of factors, including the financial condition,
results of operations and future prospects of 1st United and Wachovia. See "The
Merger -- Background of, and Reasons for, the Merger," and " -- Interests of
Certain Persons in the Merger."
THE 1ST UNITED BOARD UNANIMOUSLY RECOMMENDS THAT 1ST UNITED SHAREHOLDERS
VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT.
4
<PAGE>
OPINION OF FINANCIAL ADVISER. Hoefer & Arnett, Incorporated ("Hoefer") has
served as financial adviser to 1st United in connection with the Merger and has
rendered an opinion to the 1st United Board that the terms of the Merger are
fair from a financial point of view to 1st United shareholders. For additional
information concerning Hoefer and its opinion, see "The Merger -- Opinion of 1st
United's Financial Adviser" and the opinion of Hoefer attached as Appendix D to
this Proxy Statement/Prospectus.
EFFECTIVE TIME. If the Merger is approved by the requisite vote of the 1st
United shareholders, all required governmental and other consents and approvals
are obtained and the other conditions to the obligations of the parties to
consummate the Merger are either satisfied or waived (as permitted), the Merger
will be consummated and will become effective on the date (the "Effective Date")
and at the time (the "Effective Time") that articles of merger reflecting the
Merger are filed with the Florida Department of State and the Secretary of State
of North Carolina, or such later time as indicated therein. Unless otherwise
agreed by 1st United and Wachovia, and subject to the conditions to the
obligations of the parties to effect the Merger, the parties have agreed to
cause the Effective Date to occur on the fifth business day after the last of
the conditions to the consummation of the Merger have been satisfied or waived
(or, at the election of Wachovia, a day within five business days of such fifth
business day). Wachovia and 1st United each has the right, acting unilaterally,
to terminate the Merger Agreement should the Merger not be consummated by March
31, 1998. See "The Merger -- Effective Time" and " -- Amendment, Waiver and
Termination."
DELIVERY OF WACHOVIA CERTIFICATES. Promptly after the Effective Time,
Wachovia will send or will cause to be sent transmittal materials to each record
holder of shares of 1st United Common Stock outstanding at the Effective Time
for use in exchanging those certificates for shares of Wachovia Common Stock.
See "The Merger -- Distribution of Wachovia Certificates."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The Merger is intended to be a
tax-free reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"). Generally, no gain or loss should
be recognized for federal income tax purposes by 1st United shareholders as a
result of the Merger except with respect to any cash received in lieu of
fractional share interests. A condition to consummation of the Merger is the
receipt by each of Wachovia and 1st United of an opinion from their respective
legal counsel as to the qualification of the Merger as a tax-free reorganization
and certain other federal income tax consequences of the Merger.
ALL SHAREHOLDERS SHOULD CAREFULLY READ THE DISCUSSION OF THE MATERIAL
FEDERAL INCOME TAX CONSEQUENCES OF THE PROPOSED MERGER UNDER "THE
MERGER -- CERTAIN FEDERAL INCOME TAX CONSEQUENCES" AND ARE URGED TO CONSULT WITH
THEIR OWN TAX ADVISERS AS TO THE FEDERAL, STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES IN THEIR PARTICULAR CIRCUMSTANCES.
MANAGEMENT AFTER THE MERGER. Wachovia will be the surviving corporation
resulting from the Merger. The directors and officers of Wachovia in office
immediately prior to the Effective Time, and such additional persons as may
thereafter be elected, will serve as the directors and officers of Wachovia from
and after the Effective Time. See "The Merger -- Management and Operations After
the Merger."
INTERESTS OF CERTAIN PERSONS IN THE MERGER. Certain members of 1st United's
management and board of directors have interests in the Merger in addition to
their interests as shareholders of 1st United generally. Those interests relate
to, among other things, provisions in the Merger Agreement regarding
indemnification, the treatment of outstanding options with respect to 1st United
Common Stock and employment agreements with Wachovia.
The Merger Agreement provides that all options to acquire 1st United Common
Stock outstanding at the Effective Time under 1st United's stock plans,
including those held by management, will be converted into an option to acquire
shares of Wachovia Common Stock or, at the election of the option holder,
converted into cash. In addition, Wachovia has generally agreed to indemnify,
for a period of six years after the Effective Time, the present officers and
directors of 1st United and its subsidiaries against certain liabilities arising
prior to the Effective Time. Wachovia has also agreed to provide directors' and
officers' liability insurance for the present and former officers and directors
of 1st United for a period of three years following the Effective Time.
Wachovia has entered into an employment agreement with Warren S. Orlando
pursuant to which Mr. Orlando will receive an initial base salary equal to
$250,000, an annual cash bonus of at least $500,000 for 1998 and benefits
similar to those provided to other senior executives of Wachovia. Mr. Orlando
will also receive
5
<PAGE>
options to purchase additional shares, which will vest over a period of five
years. Wachovia has also entered into an employment agreement with John Marino
pursuant to which Mr. Marino will receive an initial base salary equal to
$150,000, an annual cash bonus of at least $60,000 for 1998 and benefits similar
to those provided to other senior executives of Wachovia. Mr. Marino will also
receive restricted shares of Wachovia Common Stock and options to purchase
additional shares, all of which will vest over a period of five years. See "The
Merger -- Post-Acquisition Compensation and Benefits," " -- Stock Options" and
" -- Interests of Certain Persons in the Merger," "Certain Differences in the
Rights of Wachovia Shareholders and 1st United Shareholders -- Indemnification."
CONDITIONS TO CONSUMMATION. Consummation of the Merger is subject to
various conditions, including, among other matters: (i) approval of the Merger
Agreement by the 1st United shareholders; (ii) receipt of all governmental and
other consents and approvals necessary to permit consummation of the Merger; and
(iii) satisfaction of certain other usual conditions, including the receipt of
the tax opinions discussed above. Under the terms of the Merger Agreement, the
conditions to the Merger may generally be waived by Wachovia or 1st United, as
applicable. As of the date of this Proxy Statement/Prospectus, neither Wachovia
nor 1st United intends to waive the conditions as to the receipt of opinions of
counsel on taxation matters. In the event of a failure to obtain a tax opinion,
and a party's determination to waive such condition to the consummation of the
Merger, 1st United will resolicit the votes of its shareholders to approve the
Merger without such condition and update the information contained herein with
respect to the tax consequences of the Merger as necessary. See "The
Merger -- Conditions to Consummation" and " -- Amendment, Waiver and
Termination."
REGULATORY APPROVALS. On September 19, 1997, Wachovia received approval
from the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board") for the Merger. The Merger is also subject to the prior approval of the
Florida Department of Banking and Finance, and the State Corporation Commission
of Virginia and may be subject to the approval of or notice to other regulatory
authorities. Applications for approval of the Merger have been filed or will
promptly be filed with such agencies. There can be no assurance that these
approvals will be obtained or as to the timing or conditions thereof. See "The
Merger -- Regulatory Approvals."
TERMINATION. The Merger Agreement may be terminated, and the Merger
abandoned, at any time prior to the Effective Time by mutual action of the board
of directors of both 1st United and Wachovia, or by action of the board of
directors of either company under certain circumstances, including if the Merger
is not consummated by March 30, 1998, unless the failure to consummate by such
time is due to knowing action or inaction of the party seeking to terminate. See
"The Merger -- Amendment, Waiver and Termination."
ACCOUNTING TREATMENT. It is anticipated that the Merger will be accounted
for as a "purchase" for financial reporting purposes. See "The
Merger -- Accounting Treatment."
DISSENTERS' RIGHTS. Under the Florida Business Corporation Act, holders of
1st United Common Stock have no dissenters' rights in connection with the
Merger. See "The Merger -- Dissenters' Rights."
RESALE OF WACHOVIA COMMON STOCK. The Wachovia Common Stock issuable in
connection with the Merger will be freely transferable by the holders of such
shares, except for those holders who may be deemed to be "affiliates" (generally
including directors, certain executive officers, and 10% or more shareholders)
of 1st United or Wachovia under applicable federal securities laws. See "The
Merger -- Resales of Wachovia Common Stock."
STOCK OPTION AGREEMENT. As a condition and an inducement to Wachovia's
entering into the Merger Agreement, 1st United, as issuer, entered into a stock
option agreement with Wachovia, as grantee, dated as of August 6, 1997 (the
"Stock Option Agreement"). The Stock Option Agreement is attached hereto as
Appendix B and is incorporated by reference herein.
Pursuant to the Stock Option Agreement, 1st United granted to Wachovia an
irrevocable option (the "Option") pursuant to which Wachovia has the right, upon
the occurrence of certain events (none of which has occurred to the best of
Wachovia's and 1st United's knowledge), to purchase up to 2,020,000 shares of
1st United Common Stock, subject to adjustment in certain cases as described
below but in no event exceeding 19.9% of the number of shares of 1st United
Common Stock outstanding immediately before exercise of the 1st United Option,
subject to termination during certain periods, for a purchase price of $18.75
per share, subject to adjustment in certain circumstances.
6
<PAGE>
Under certain circumstances, Wachovia also could elect to sell the Option,
and any shares previously purchased thereunder, back to 1st United at a price
generally reflecting the price offered or paid by a third-party acquirer for
other shares of 1st United. Alternatively, under certain circumstances, Wachovia
could surrender the Option for a cash payment from 1st United of $5 million.
In the event that 1st United shareholders fail to approve the Merger
Agreement, either 1st United or Wachovia may terminate the Merger Agreement in
accordance with its terms. The Stock Option Agreement will automatically
terminate within 18 months after such termination. Wachovia will be entitled to
exercise its rights under the Stock Option Agreement if both an Initial
Triggering Event (as defined below) and a Subsequent Triggering Event (as
defined below) occur within such 18 month period. The purchase of any shares of
1st United Common Stock pursuant to the Option is subject to compliance with
applicable law, including the receipt of necessary approvals under the BHC Act.
Arrangements such as the Stock Option Agreement are entered into in
connection with corporate mergers and acquisitions in an effort to increase the
likelihood that the transactions will be consummated in accordance with their
terms and to compensate the grantee for the efforts undertaken and the expenses,
losses and opportunity costs incurred by it in connection with the transactions
if they are not consummated under certain circumstances involving an acquisition
or potential acquisition of the issuer by a third party. The Stock Option
Agreement was entered into to accomplish these objectives. The Stock Option
Agreement may have the effect of discouraging offers by third parties to acquire
1st United prior to the Merger, even if such persons might have been prepared to
offer to pay consideration to 1st United shareholders that has a higher current
market price than the shares of Wachovia Common Stock to be received by such
holders pursuant to the Merger Agreement. See "The Merger -- Background of, and
Reasons for, the Merger," " -- Stock Option Agreement" and Appendix B to this
Proxy Statement/Prospectus.
SHAREHOLDER AGREEMENTS. As a condition and an inducement to Wachovia's
entering into the Merger Agreement, shareholders of 1st United who are also
directors and who hold in the aggregate approximately 27.6% shares of 1st United
Common Stock entered into a Shareholder Agreement with Wachovia. The Shareholder
Agreement provides, among other things, that such directors will vote their
shares of 1st United Common Stock in favor of approval of the Merger Agreement.
See "General Information -- Vote Required," "The Merger -- Shareholder
Agreements" and Appendix C.
ACQUISITIONS
MERGER WITH JEFFERSON BANKSHARES, INC. On June 9, 1997, Wachovia entered
into an agreement for a merger (the "Jefferson Merger") with Jefferson
Bankshares, Inc. ("Jefferson"), the parent of Jefferson National Bank in
Charlottesville, Virginia. The boards of directors of both companies have
approved the agreement. The Jefferson Merger is subject to the approval of
shareholders and appropriate regulatory agencies and is expected to close in the
fourth quarter of 1997. On August 26, 1997, Wachovia received approval from the
Federal Reserve Board for the Jefferson Merger.
The Jefferson Merger is expected to be accounted for as a purchase for
financial reporting purposes and provides for a tax-free exchange of 0.625 of a
share of Wachovia Common Stock for each common share of Jefferson. In connection
with the Jefferson Merger, Jefferson has granted Wachovia a stock option
representing approximately 19.9% of Jefferson's outstanding shares. Wachovia
will add one current member of the Jefferson board of directors to the Wachovia
board of directors. As of September 26, 1997, Jefferson had 13,964,773 common
shares outstanding and 267,100 shares issuable upon exercise of outstanding
stock options (excluding the stock option granted to Wachovia).
Jefferson, headquartered in Charlottesville, Virginia, had assets of $2.2
billion as of June 30, 1997, and is the fifth largest Virginia-based banking
company with 96 offices and 60 automated teller machines. Jefferson National
Bank has the largest deposit share in Charlottesville with additional branch
presence in the Tidewater, Richmond, Fredericksburg and Shenandoah Valley areas
of Virginia. See " -- Acquisitions -- Merger with Jefferson Bankshares, Inc."
MERGER WITH CENTRAL FIDELITY BANKS, INC. On June 23, 1997, Wachovia entered
into a merger agreement for a merger (the "Central Fidelity Merger") with
Central Fidelity Banks, Inc. ("Central Fidelity"), the parent of Central
Fidelity National Bank in Richmond, Virginia. The boards of directors of both
companies have approved the
7
<PAGE>
agreement. The Central Fidelity Merger is subject to the approval of
shareholders and appropriate regulatory agencies and is expected to close in the
fourth quarter of 1997.
The Central Fidelity Merger is expected to be accounted for as a pooling of
interests for financial reporting purposes and provides for a tax-free exchange
of 0.63 of a share of Wachovia Common Stock for each common share of Central
Fidelity. In connection with the merger agreement, Central Fidelity has granted
Wachovia a stock option representing approximately 19.9% of Central Fidelity's
outstanding shares. Wachovia will add three current members of the Central
Fidelity board of directors to the Wachovia board of directors.
Central Fidelity, the third largest banking company headquartered in
Virginia, serves Virginia markets primarily through its wholly-owned banking
subsidiary, Central Fidelity National Bank. Central Fidelity National Bank
operates 248 branch offices, including 27 full-service supermarket locations,
and 228 automated teller machines throughout Virginia. At June 30, 1997, Central
Fidelity had total assets of approximately $10.67 billion. See
"Acquisitions -- Merger with Central Fidelity Banks, Inc." and "Wachovia and
Central Pro Forma Unaudited Combined Financial Information."
MARKET FOR COMMON STOCK AND RELATED SHAREHOLDER MATTERS
Wachovia Common Stock is traded on the NYSE. 1st United Common Stock is
traded on the Nasdaq Stock Market. The following table sets forth the last sale
price of Wachovia Common Stock, the last sale price of 1st United Common Stock,
and the equivalent price per share (as explained below) of 1st United Common
Stock at the close of business on August 6, 1997, the last trading day
immediately preceding public announcement of the Merger, and September 30, 1997,
the last practicable date prior to the mailing of this Proxy
Statement/Prospectus. The "equivalent per share price" of 1st United Common
Stock represents the last sale price of a share of Wachovia Common Stock on the
specified date multiplied by the Exchange Ratio that would apply assuming the
average last sale price of Wachovia Common Stock reported on the NYSE Composite
Tape during the Averaging Period were equal to its last sale price on such date.
<TABLE>
<CAPTION>
MARKET PRICE PER SHARE
1ST EQUIVALENT
UNITED PER
WACHOVIA COMMON SHARE
COMMON STOCK STOCK PRICE
<S> <C> <C> <C>
August 6, 1997........................... $ 64 1/2 $ 19 3/4 $20.87
September 30, 1997....................... $ 72 $ 21 3/4 $21.60
</TABLE>
SHAREHOLDERS ARE ADVISED TO OBTAIN CURRENT MARKET QUOTATIONS FOR WACHOVIA
COMMON STOCK. NO ASSURANCE CAN BE GIVEN AS TO THE MARKET PRICE OF WACHOVIA
COMMON STOCK PRIOR TO, AT OR AFTER THE EFFECTIVE TIME OR OVER THE AVERAGING
PERIOD. SEE "COMPARATIVE MARKET PRICES AND DIVIDENDS."
COMPARISON OF CERTAIN UNAUDITED PER SHARE DATA
The following summary presents selected comparative unaudited per share
data for Wachovia and 1st United (i) on an historical basis, (ii) on a pro forma
combined basis assuming the Merger had been effective during the periods
presented and (iii) on a pro forma combined basis assuming the Central Fidelity
Merger and the Merger had been effective during the periods presented. The
Merger will be accounted for under the purchase accounting method and the
Central Fidelity Merger will be accounted for under the pooling-of-interests
accounting method. Pro forma data is derived accordingly. The information shown
below should be read in conjunction with the historical financial data and
statements of Wachovia and Central Fidelity, and the historical and supplemental
financial data and statements of 1st United, giving effect to the acquisition of
Island National Bank and Trust Company on April 1, 1997, included or
incorporated by reference herein, including the respective notes thereto. On
July 1, 1997, 1st United acquired Seaboard Savings Bank, F.S.B. ("Seaboard")
which will be accounted for under the purchase accounting method; the 1st United
pro forma data gives effect to the Seaboard transaction. See "Available
Information," "Incorporation of Certain Information by Reference," " -- Selected
Financial Data of Wachovia (Historical)," " -- Selected Financial Data of 1st
United (Historical)" and "The Merger -- Accounting Treatment."
The per share data set forth herein are presented for comparative purposes
only and are not necessarily indicative of the future combined financial
position, the results of the future operations or the actual results or combined
financial position of Wachovia that would have been achieved had the Merger and
the Central Fidelity
8
<PAGE>
Merger been consummated as of the dates or for the periods indicated. While no
assurance can be given, Wachovia expects that it will achieve substantial
benefits from both the Merger and the Central Fidelity Merger, including
operating cost savings and revenue enhancements. See "Acquisitions -- Merger
with Central Fidelity Banks, Inc." and "Wachovia and Central Fidelity Unaudited
Pro Forma Combined Financial Information." However, the pro forma comparative
unaudited net income per share data do not reflect any direct costs, potential
savings or revenue enhancements which are expected to result from the
consolidation of operations of Central Fidelity, 1st United and Wachovia and,
therefore, do not purport to be indicative of the results of future operations
of Wachovia.
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
JUNE
30, YEARS ENDED DECEMBER 31,
1997 1996 1995 1994
<S> <C> <C> <C> <C>
WACHOVIA CORPORATION
Net income per primary common share
Historical............................................................ $2.00 $ 3.81 $ 3.50 $ 3.13
1st United pro forma combined(1)...................................... $1.96 $ 3.73 N/A N/A
1st United and Central Fidelity pro forma combined(2)(4).............. $1.91 $ 3.60 $ 3.38 $ 2.98
Net income per fully diluted common share
Historical............................................................ $2.00 $ 3.80 $ 3.49 $ 3.12
1st United pro forma combined(1)...................................... $1.96 $ 3.72 N/A N/A
1st United and Central Fidelity pro forma combined(2)(4).............. $1.90 $ 3.58 $ 3.35 $ 2.96
Dividends per common share (3)
Historical............................................................ $.80 $ 1.52 $ 1.38 $ 1.23
1st United pro forma combined......................................... $.80 $ 1.52 N/A N/A
1st United and Central Fidelity pro forma combined.................... $.80 $ 1.52 $ 1.38 $ 1.23
Book value per common share
Historical............................................................ $23.07 $ 22.96 N/A N/A
1st United pro forma combined(1)...................................... $23.91 $ 23.79 N/A N/A
1st United and Central Fidelity pro forma combined(2)(4).............. $23.09 $ 23.58 N/A N/A
1ST UNITED COMMON STOCK
Net income per primary common share
Historical (5)........................................................ $.46 $ .83 $ .67 $ .48
Seaboard pro forma combined(6)........................................ $.41 $ .80 N/A N/A
Equivalent 1st United pro forma combined(7)........................... $.65 $ 1.23 N/A N/A
Equivalent 1st United and Central Fidelity pro forma combined(2)(8)... $.63 $ 1.19 $ 1.12 $ .98
Net income per fully diluted common share
Historical(5)......................................................... $.46 $ .82 $ .67 $ .48
Seaboard pro forma combined(6)........................................ $.41 $ .80 N/A N/A
Equivalent 1st United pro Fidelity combined(7)........................ $.65 $ 1.23 N/A N/A
Equivalent 1st United and Central pro forma combined(2)(8)............ $.63 $ 1.18 $ 1.11 $ .98
Dividends per common share
Historical(5)......................................................... $.21 $ .21 $ .16 $ .07
Seaboard pro forma combined(6)........................................ $.21 $ .21 N/A N/A
Equivalent 1st United pro forma combined(7)........................... $.13 $ .50 N/A N/A
Equivalent 1st United and Central Fidelity pro forma combined(2)(8)... $.13 $ .50 $ .46 $ .41
Book value per common share
Historical(5)......................................................... $6.62 $ 6.33 N/A N/A
Seaboard pro forma combined(6)........................................ $6.83 $ 6.55 N/A N/A
Equivalent 1st United pro forma combined(7)........................... $7.89 $ 7.85 N/A N/A
Equivalent 1st United and Central Fidelity pro forma combined(2)(8)... $7.62 $ 7.78 N/A N/A
</TABLE>
9
<PAGE>
(1) The Merger will be accounted for as a purchase; accordingly, pro forma
combined per share data for years before December 31, 1996 are not
applicable.
(2) 1st United and Central Fidelity pro forma combined amounts include Central
Fidelity for all periods and 1st United for the year ended December 31, 1996
and the six months ended June 30, 1997, as described in (1).
(3) Pro forma dividends per share represent historical dividends paid by
Wachovia.
(4) The effect of estimated merger and restructuring costs expected to be
incurred in connection with the Central Fidelity Merger has been reflected
in the June 30, 1997 1st United, and 1st United and Central Fidelity
Unaudited Pro Forma Combined Statement of Condition; however, since the
estimated costs are non-recurring, they have not been reflected in the 1st
United, and 1st United and Central Fidelity Unaudited Pro Forma Combined
Statements of Income.
(5) Historical 1st United information restated to reflect the acquisition of
Island National Bank and Trust Company on April 1, 1997 which was accounted
for under pooling-of-interests accounting method.
(6) Historical 1st United-Seaboard pro forma combined represents 1st United's
July 1, 1997 merger with Seaboard. 1st United's merger with Seaboard will be
accounted for under the purchase accounting method; accordingly, pro forma
per share data for years before December 31, 1996 are not applicable.
(7) Equivalent 1st United pro forma combined amounts are computed by multiplying
the 1st United pro forma combined amounts by an Exchange Ratio of 0.33.
(8) Equivalent 1st United and Central Fidelity pro forma combined amounts are
computed by multiplying the 1st United and Central Fidelity pro forma
combined amount by an Exchange Ratio of 0.33. As described in (2), amounts
for the years ended December 31, 1995 and 1994 exclude 1st United.
10
<PAGE>
SELECTED FINANCIAL DATA OF WACHOVIA (HISTORICAL)
The following table sets forth selected historical financial data of
Wachovia and has been derived from its financial statements. Such selected
historical financial data should be read in conjunction with Wachovia's audited
consolidated financial statements, including the respective notes thereto, and
unaudited interim financial information, in each case incorporated herein by
reference. The interim financial information has been derived from unaudited
financial statements of Wachovia, which, in the opinion of management, include
all adjustments, consisting only of normal recurring adjustments, necessary for
fair statement of the results for the unaudited interim periods. Results for the
interim periods are not necessarily indicative of results which may be expected
for any other interim or annual period. See "Incorporation of Certain
Information by Reference."
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, FOR THE YEARS ENDED DECEMBER 31,
1997 1996 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
SUMMARY OF OPERATIONS
Interest Income............ $1,675,025 $1,575,966 $3,227,314 $3,019,730 $2,362,294 $2,122,837
Interest Expense........... 856,314 824,800 1,672,602 1,579,107 1,038,388 839,012
Other Income............... 435,231 383,179 787,650 735,632 607,752 627,603
Other Expense.............. 678,830 618,332 1,257,549 1,203,596 1,098,413 1,131,236
Net Income................. 328,705 309,233 644,557 602,543 539,058 492,095
PER SHARE AMOUNTS
Net Income, Primary........ $2.00 $1.81 $3.81 $3.50 $3.13 $2.83
Net Income, Fully
Diluted.................. 2.00 1.81 3.80 3.49 3.12 2.81
Weighted Average Shares
Outstanding, Primary..... 164,145,000 170,664,000 169,094,000 172,089,000 172,339,000 173,941,000
Weighted Average Shares
Outstanding, Fully
Diluted.................. 164,158,000 170,808,000 169,827,000 172,957,000 172,951,000 175,198,000
Dividends.................. $.80 $.72 $1.52 $1.38 $1.23 $1.11
STATEMENT OF CONDITION
(PERIOD END)
Total Assets............... $48,512,096 $46,049,096 $46,904,515 $44,981,314 $39,187,958 $36,525,772
Interest Earning Assets.... 42,610,130 41,139,806 40,788,754 40,000,768 34,711,988 32,348,507
Loans...................... 33,255,625 30,672,641 31,283,192 29,261,153 25,890,804 22,977,488
Deposits................... 28,938,060 25,973,349 27,250,122 26,368,757 23,069,258 23,352,398
Shareholders' Equity....... 3,679,827 3,699,612 3,761,832 3,773,757 3,286,507 3,017,947
RATIOS
Return on Average Assets... 1.42 % 1.38 % 1.43 % 1.45 % 1.46 % 1.46 %
Return on Average Equity... 18.15 16.87 17.62 17.67 17.41 17.13
Dividend Payout Ratio...... 39.49 39.38 39.50 39.10 39.10 38.90
Average Equity to Average
Assets Ratio............. 7.82 8.20 8.09 8.22 8.36 8.54
<CAPTION>
1992
<S> <C>
SUMMARY OF OPERATIONS
Interest Income............ $2,222,078
Interest Expense........... 967,028
Other Income............... 556,225
Other Expense.............. 1,095,652
Net Income................. 433,225
PER SHARE AMOUNTS
Net Income, Primary........ $2.51
Net Income, Fully
Diluted.................. 2.48
Weighted Average Shares
Outstanding, Primary..... 172,641,000
Weighted Average Shares
Outstanding, Fully
Diluted.................. 175,512,000
Dividends.................. $1.00
STATEMENT OF CONDITION
(PERIOD END)
Total Assets............... $33,366,519
Interest Earning Assets.... 29,136,317
Loans...................... 21,085,653
Deposits................... 23,375,461
Shareholders' Equity....... 2,774,767
RATIOS
Return on Average Assets... 1.36 %
Return on Average Equity... 16.69
Dividend Payout Ratio...... 39.40
Average Equity to Average
Assets Ratio............. 8.16
</TABLE>
11
<PAGE>
SELECTED FINANCIAL DATA OF 1ST UNITED (HISTORICAL)
The following table sets forth selected historical financial data and has
been derived from the historical and supplemental financial statement of 1st
United, giving effect to the acquisition of Island National Bank and Trust
Company on April 1, 1997. Such selected historical financial data should be read
in conjunction with 1st United's audited consolidated financial statements,
including the respective notes thereto, and unaudited interim financial
information, in each case incorporated herein by reference. The interim
financial information has been derived from unaudited financial statements of
1st United, which, in the opinion of management, include all adjustments,
consisting only of normal recurring adjustments, necessary for fair statement of
the results for the unaudited interim periods. Results for the interim periods
are not necessarily indicative of results which may be expected for any other
interim or annual period. See "Incorporation of Certain Information by
Reference."
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, FOR THE YEARS ENDED DECEMBER 31,
1997 1996 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Summary of Operations
Interest Income............ $ 27,185 $ 23,771 $ 48,421 $ 37,599 $ 26,176 $ 17,276
Interest Expense........... 7,928 6,808 13,657 11,070 7,449 4,843
Other Income............... 5,049 5,230 10,129 5,954 4,721 4,280
Other Expense.............. 16,749 15,663 32,025 23,638 18,251 13,400
Net Income (loss).......... 4,660 4,094 8,224 5,969 3,540 2,569
PER SHARE AMOUNTS
Net Income (loss),
Primary.................. $.46 $.41 $.83 $.67 $.48 $.47
Net Income (loss), Fully
Diluted.................. .46 .41 .82 .67 .48 .46
Weighted Average Shares
Outstanding, Primary..... 10,067,000 9,919,000 9,952,000 8,941,000 7,305,000 5,494,000
Weighted Average Shares
Outstanding, Fully
Diluted.................. 10,079,000 9,931,000 9,988,000 8,948,000 7,328,000 5,539,000
Dividends.................. $.21 $.07 $.21 $.16 $.07 $.07
STATEMENT OF CONDITION
(PERIOD END)
Total Assets............... $747,282 $618,168 $692,166 $480,521 $440,486 $266,817
Interest Earning Assets.... 676,947 553,829 626,153 437,279 402,957 241,354
Loans...................... 499,770 443,010 468,591 346,665 292,345 178,575
Deposits................... 669,957 553,963 623,125 427,006 393,086 240,037
Shareholders' Equity....... 65,465 58,026 62,065 48,702 41,382 25,282
RATIOS
Return on Average Assets... 1.31 % 1.31 % 1.30 % 1.31 % .96 % .98 %
Return on Average Equity... 14.61 14.47 14.16 13.21 10.38 10.65
Dividend Payout Ratio...... 45.65 17.07 21.01 19.52 6.35 12.76
Average Equity to Average
Assets Ratio............. 8.90 9.05 9.18 9.92 9.20 9.19
<CAPTION>
1992
<S> <C>
Summary of Operations
Interest Income............ $ 16,908
Interest Expense........... 5,630
Other Income............... 3,795
Other Expense.............. 12,763
Net Income (loss).......... (250)
PER SHARE AMOUNTS
Net Income (loss),
Primary.................. $(.05)
Net Income (loss), Fully
Diluted.................. (.05)
Weighted Average Shares
Outstanding, Primary..... 4,767,000
Weighted Average Shares
Outstanding, Fully
Diluted.................. 4,767,000
Dividends.................. $0
STATEMENT OF CONDITION
(PERIOD END)
Total Assets............... $264,172
Interest Earning Assets.... 237,973
Loans...................... 172,677
Deposits................... 238,620
Shareholders' Equity....... 23,100
RATIOS
Return on Average Assets... (.10 %)
Return on Average Equity... (1.09)
Dividend Payout Ratio...... 0
Average Equity to Average
Assets Ratio............. 9.62
</TABLE>
12
<PAGE>
WACHOVIA AND CENTRAL FIDELITY PRO FORMA COMBINED FINANCIAL DATA
The following table sets forth selected unaudited pro forma financial data
of Wachovia giving effect to the Central Fidelity Merger as if it occurred as of
the beginning of the periods indicated below, after giving effect to the pro
forma adjustments described in the Notes to Unaudited Pro Forma Combined
Financial Information. The Central Fidelity Merger is expected to be accounted
for as a pooling of interests. Such selected unaudited pro forma financial data
should be read in conjunction with the Wachovia and Central Fidelity pro forma
combined financial information, including the notes thereto, appearing elsewhere
in this Proxy Statement/Prospectus. The effect of estimated merger and
restructuring costs expected to be incurred in connection with the Central
Fidelity Merger have been reflected in the Unaudited Pro Forma Combined
Statement of Condition; however, since the estimated costs are nonrecurring,
they have not been reflected in the Unaudited Pro Forma Combined Statements of
Income. The Unaudited Pro Forma Combined Financial Information does not give
effect to any anticipated cost savings in connection with the Central Fidelity
Merger. The Unaudited Pro Forma Combined Statement of Condition is not
necessarily indicative of the actual financial position that would have existed
had the Central Fidelity Merger been consummated as of the beginning of the
periods indicated below, or that may exist in the future. The Unaudited Pro
Forma Combined Statements of Income are not necessarily indicative of the
results that would have occurred had the Central Fidelity Merger been
consummated on the date indicated or that may be achieved in the future. See
"Incorporation of Certain Information by Reference" and "Wachovia and Central
Fidelity Unaudited Pro Forma Combined Financial Information."
No pro forma financial statements are included in this Proxy
Statement/Prospectus with respect to the mergers with 1st United and Jefferson
because the pro forma effects of each merger individually or in the aggregate
are not material to Wachovia's consolidated financial statements. Accordingly,
such information is also immaterial to an understanding of the proposed Merger
by the shareholders of 1st United.
<TABLE>
<CAPTION>
SIX MONTHS ENDED FOR THE YEARS ENDED
JUNE 30, DECEMBER 31,
1997 1996 1996 1995 1994
<S> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
SUMMARY OF OPERATIONS
Interest Income.......................... $2,073,667 $1,968,349 $4,015,934 $3,791,650 $3,027,091
Interest Expense......................... 1,055,499 1,033,980 2,085,955 2,011,402 1,369,079
Other Income............................. 484,999 424,758 873,565 815,307 666,990
Other Expense............................ 809,200 738,866 1,509,490 1,441,761 1,343,478
Net Income............................... 390,280 366,023 757,259 707,913 623,922
PER SHARE AMOUNTS
Net Income, Primary...................... $1.94 $1.76 $3.66 $3.38 $2.98
Net Income, Fully Diluted................ 1.94 1.75 3.64 3.35 2.96
Weighted Average Shares Outstanding,
Primary................................ 200,728,000 208,490,000 206,728,000 209,684,000 209,346,000
Weighted Average Shares Outstanding,
Fully Diluted.......................... 201,679,000 209,241,000 208,105,000 211,118,000 210,663,000
Dividends (1)............................ $.80 $.72 $1.52 $1.38 $1.23
STATEMENT OF CONDITION
(PERIOD END)
Total Assets(2).......................... $59,241,694 $56,540,625 $57,444,875 $55,792,288 $49,242,130
Interest Earning Assets.................. 52,653,592 51,053,334 50,725,790 50,180,624 44,168,738
Loans.................................... 40,182,001 37,132,537 38,000,028 35,577,966 31,662,897
Deposits................................. 37,014,680 33,937,409 35,321,576 34,354,655 30,296,502
Shareholders' Equity(2).................. 4,370,292 4,508,136 4,608,331 4,600,304 3,909,579
RATIOS
Return on Average Assets................. 1.38 % 1.33 % 1.36 % 1.37 % 1.34 %
Return on Average Equity................. 17.58 16.34 16.91 17.00 16.58
Average Equity to Average Assets Ratio... 7.84 8.13 8.05 8.05 8.09
</TABLE>
(1) Pro forma dividends per share represent historical dividends paid by
Wachovia.
(2) Total Assets and Shareholders' Equity at June 30, 1997 have been reduced to
reflect the aggregate estimated merger and restructuring costs of $174
million ($113 million net of taxes) expected to be incurred in connection
with the Central Fidelity Merger.
13
<PAGE>
GENERAL INFORMATION
SPECIAL MEETING
This Proxy Statement/Prospectus is being furnished to the shareholders of
1st United in connection with the solicitation of proxies by the 1st United
Board for use at the Special Meeting. The Special Meeting will be held at the
Colony Hotel, 155 Hamman Avenue, Palm Beach, Florida at 2:00 p.m., on
October 30, 1997, and at any adjournments and postponements thereof, to consider
and vote upon a proposal to approve the Merger Agreement.
This Proxy Statement/Prospectus is also being furnished by Wachovia to 1st
United shareholders as a prospectus in connection with the issuance by Wachovia
of shares of Wachovia Common Stock upon consummation of the Merger.
RECORD DATE, SOLICITATION AND REVOCABILITY OF PROXIES
The board of directors of 1st United (the "1st United Board") has fixed the
close of business on September 30, 1997, as the record date for determining the
1st United shareholders entitled to receive notice of and to vote at the Special
Meeting. Only holders of record of 1st United Common Stock as of the Record Date
are entitled to notice of and to vote at the Special Meeting. As of the Record
Date, 10,090,237 shares of 1st United Common Stock were issued and outstanding
and held by 1,167 record holders. Holders of 1st United Common Stock are
entitled to one vote on each matter considered and voted on at the Special
Meeting for each share of 1st United Common Stock held of record at the close of
business on the Record Date. The presence, in person or by properly executed
proxy, of the holders of a majority of the shares of 1st United Common Stock
entitled to vote at the Special Meeting is necessary to constitute a quorum at
the Special Meeting. For purposes of determining the presence of a quorum,
abstentions and shares requested by a proxy from a broker or nominee indicating
that such person has not received instructions from the beneficial owner or
other person entitled to vote shares ("broker non-votes") will be counted as
shares present. Abstentions and broker non-votes will be counted as votes
against approval for purposes of determining whether a proposal has received
sufficient votes for approval.
Proxies in the form accompanying this Proxy Statement/Prospectus are being
solicited by the 1st United Board. Shares of 1st United Common Stock represented
by properly executed proxies, if such proxies are received in time and are not
revoked, will be voted in accordance with the instructions indicated on the
proxies. If no instructions are indicated, such proxies will be voted "FOR"
approval of the Merger Agreement and consummation of the transactions
contemplated therein, and as determined by a majority of the 1st United Board as
to any other matter that may come before the Special Meeting or any adjournment
or postponement thereof including, among other things, a motion to adjourn or
postpone the Special Meeting to another time and/or place, for the purpose of
soliciting additional proxies or otherwise; PROVIDED, HOWEVER, that no proxy
which is voted against the proposal to approve the Merger Agreement will be
voted in favor of any such adjournment or postponement.
A 1st United shareholder who has given a proxy may revoke it at any time
prior to its exercise at the Special Meeting by (i) giving written notice of
revocation to the Secretary of 1st United, (ii) properly submitting to 1st
United a duly executed proxy bearing a later date, or (iii) voting in person at
the Special Meeting. All written notices of revocation and other communications
with respect to revocation of proxies should be addressed to 1st United as
follows: 980 N. Federal Highway, Boca Raton, Florida 33432, Attention: Sandy
Wheeler, Secretary. A proxy appointment will not be revoked by death or
supervening incapacity of the shareholder executing the proxy unless, before the
shares are voted, notice of such death or incapacity is filed with 1st United's
Secretary or other person responsible for tabulating votes on behalf of 1st
United.
The expense of soliciting proxies for the Special Meeting will be paid for
by 1st United, although pursuant to the Merger Agreement, Wachovia has agreed to
share equally with 1st United all filing fees and printing expenses payable in
connection with the Registration Statement and this Proxy Statement/Prospectus.
In addition to the solicitation of shareholders of record by mail, telephone or
personal contact, 1st United will be contacting brokers, dealers, banks and
voting trustees or their nominees who can be identified as record holders of 1st
United Common Stock; such holders, after inquiry by 1st United, will provide
information concerning quantity of proxy and other materials needed to supply
such materials to beneficial owners, and 1st United will reimburse them for the
expense of mailing the proxy materials to such persons.
14
<PAGE>
1st United has retained W.F. Doring & Co. ("Doring") to assist 1st United
in connection with its communications with its shareholders with respect to, and
to provide other services to 1st United in connection with, the Special Meeting.
Doring will receive a fee of not more than $5,000 for its services and
reimbursement of out-of-pocket expenses in connection therewith.
VOTE REQUIRED
Approval of the Merger Agreement and consummation of the transactions
contemplated therein requires the affirmative vote of the holders of a majority
of the outstanding shares of 1st United Common Stock. The Merger Agreement and
the consummation of the transactions contemplated therein will not require the
approval of the holders of Wachovia Common Stock under either the North Carolina
Business Corporation Act or the rules of the NYSE because the number of shares
of Wachovia Common Stock issued in the Merger will be less than 20% of the
shares of Wachovia Common Stock outstanding at the time of the Merger.
As of the Record Date, Wachovia held 121,000 shares of 1st United Common
Stock and none of its directors and executive officers or their affiliates held
any shares of 1st United Common Stock. As a condition and an inducement to
Wachovia's entering into the Merger Agreement, certain Directors of 1st United
who hold approximately 27.6% of the outstanding shares of 1st United Common
Stock, entered into Shareholder Agreements in which they agreed to vote all such
shares in favor of approval of the Merger Agreement. A copy of the Shareholder
Agreement is attached hereto as Appendix C. Accordingly, assuming such shares
are so voted, approval of the Merger Agreement will require the affirmative vote
of the holders of approximately an additional 23% of the outstanding shares of
1st United Common Stock in order for the Merger Agreement to be approved at the
Special Meeting.
RECOMMENDATION OF 1ST UNITED BOARD OF DIRECTORS
For the reasons described in the section of this Proxy Statement/Prospectus
entitled "The Merger -- Reasons for the Merger," the 1st United Board has
unanimously adopted the Merger Agreement, believes that the Merger is in the
best interests of 1st United and its shareholders and unanimously recommends
that shareholders of 1st United vote "FOR" approval of the Merger Agreement and
the consummation of the transactions contemplated therein. See "The
Merger -- Background of, and Reasons for, the Merger," " -- Reasons of 1st
United for the Merger" and " -- Interests of Certain Persons in the Merger."
THE MERGER
THE FOLLOWING INFORMATION DESCRIBES CERTAIN INFORMATION PERTAINING TO THE
MERGER. THIS DESCRIPTION DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE APPENDICES HERETO, INCLUDING THE MERGER AGREEMENT,
WHICH IS ATTACHED AS APPENDIX A AND IS INCORPORATED HEREIN BY REFERENCE. ALL
SHAREHOLDERS ARE URGED TO READ THE APPENDICES IN THEIR ENTIRETY.
GENERAL
The Merger Agreement provides for a transaction in which 1st United will
merge with and into Wachovia. Wachovia will be the surviving corporation of the
Merger. At the Effective Time, each share of issued and outstanding 1st United
Common Stock will cease to be outstanding and each such share (other than
certain shares held by 1st United, Wachovia or their subsidiaries, if any) will
be converted into and exchanged for the number of shares of Wachovia Common
Stock equal to the Exchange Ratio, which is determined by dividing $20.875 by
the average of the last sale prices of Wachovia Common Stock, as reported by the
NYSE Composite Tape (as reported in THE WALL STREET JOURNAL or, if not reported
therein, in another authoritative source), during the Averaging Period (the
"Wachovia Average Stock Price") (rounded to the nearest one-thousandth),
provided that:
(i) if the Wachovia Average Stock Price exceeds $69.64375, the Exchange
Ratio will be 0.3; and
(ii) if the Wachovia Average Stock Price is less than $56.98125, the
Exchange Ratio will be 0.366.
The Merger Agreement provides that Wachovia may change the method of
effecting the combination with 1st United, provided that it cannot alter the
consideration to be received by 1st United shareholders, adversely affect the
tax treatment for 1st United shareholders or materially delay the transactions
contemplated by the Merger Agreement.
15
<PAGE>
BACKGROUND OF, AND REASONS FOR, THE MERGER
The Executive Committee (the "Committee") of the 1st United Board, at its
meeting on September 30, 1996, requested that management update its evaluation
of various strategic alternatives available to 1st United for the purpose of
enhancing shareholder value on a short and long term basis. This request was
prompted by management's and the 1st United Board's continual analysis of 1st
United's position in the marketplace as a dynamically growing community bank and
its future prospects for operations and earnings in light of the expanding wave
of mergers and consolidations taking place in the industry nationally, as well
as in 1st United's Florida market.
At a subsequent meeting held on October 11, 1996, management presented to
the Committee an analysis of 1st United's strategic alternatives. Among many
issues discussed were the economic cycle and forecast; an evaluation of the
financial services marketplace, including such issues as changes in the
regulatory environment, competition, interstate banking, and the role technology
will play in community banking; capital requirements; the ability of 1st United
to sustain its rapid growth through acquisitions; and, the corresponding impact
of the foregoing on earnings per share. The Committee discussed in detail
management's ability to successfully continue to acquire local community banks
on a non-dilutive basis to earnings per share. Also discussed was the relative
availability of acquisition targets, given the substantial reduction in the
number of community banks remaining in the marketplace and the competitive
multiples being offered for those institutions. Based upon these discussions, it
was unanimously agreed at the meeting that management should develop a plan to
evaluate 1st United on a stand-alone basis, as well as consider its potential
opportunities to merge with a suitable partner in such a fashion that the
shareholders, customers, and staff of 1st United would benefit.
The Committee met again on November 5, 1996, at which time management
advised the Committee of its progress in developing the plan and its
recommendation to hire the investment banking firm of Hoefer & Arnett,
Incorporated ("Hoefer") with which 1st United had numerous successful business
dealings, and which is recognized as a national expert in community bank mergers
and acquisitions. The task of Hoefer was to assist in the evaluations and to
develop a list of potential partners who might have an interest in 1st United's
franchise, as well as to analyze the prospects for 1st United on a stand-alone
basis.
Over the period from November 1996 through March 1997, management met with
Thomas R. Mecredy, Vice President of Hoefer, in a series of meetings to develop
a plan whereby certain institutions who were in Florida or who had demonstrated
a desire for a Florida presence, were identified. Certain specific criteria were
used, including operating philosophy, earnings performance, currency value,
liquidity, culture, investment quality, size, management and acquisition
history, and their interest in the Florida market.
In March of 1997, eight institutions were contacted on a confidential basis
by Hoefer to determine their interest in meeting with management of 1st United
to discuss their long-term strategy, including interest in the Florida market
and their prospective interest in a franchise combination with 1st United. Three
institutions responded positively and, accordingly, meetings with senior
management of those institutions were scheduled and held during April and May of
1997.
On April 22, 1997, management met with a senior officer of Wachovia in
Atlanta. During that meeting, a wide array of topics was discussed, including
Wachovia's intentions in the Florida market and the alternative of 1st United
deciding to remain independent or merging with a partner that wished to preserve
and expand its operating franchise. This meeting concluded with agreement by
both parties to deliberate on the matters discussed.
On April 29, 1997, at its regularly-scheduled meeting, management presented
its strategic alternatives plan to the 1st United Board. Mr. Mecredy presented a
detailed review of the activities that had occurred to date; a comprehensive
evaluation of the merger and acquisition activity, both nationally and in
Florida; and, his analysis of the relative value of 1st United to its
shareholders on a stand-alone basis as opposed to a compatible merger. Pursuant
to this report, and further discussion with management, the 1st United Board
affirmed the Executive Committee's instructions and requested management to
continue to evaluate the alternatives to remain independent or to seek a
potential merger partner.
On July 17, 1997, at the request of Wachovia, management of 1st United
visited with executives of Wachovia in Winston-Salem, North Carolina, at which
time Wachovia indicated its serious interest in pursuing discussions for a
business combination with 1st United. A second meeting was held with other
executives of Wachovia on July 22, 1997, at 1st United's offices at which time
Wachovia further defined the specifics of a
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possible business combination with 1st United. Subsequent to that meeting, and
on the same date, management of 1st United presented to the 1st United Board, at
its regularly scheduled July meeting, the details of its progress to date.
Specifically, with regard to the three institutions that had expressed an
interest, management reported that Wachovia had met all of 1st United's targeted
criteria, had met all response times to which it had committed and had stated
its intention to conclude the process promptly. Management reported that
discussions with the other two interested institutions had not proceeded at the
same pace, there having been several delays indicating that the interest of
those institutions was not as advanced as that of Wachovia. The 1st United Board
authorized management to advise Wachovia that 1st United had an interest in
pursuing the discussions. That message was conveyed to Wachovia.
At subsequent meetings on July 31, August 1, and August 2 among Wachovia,
1st United's management and Mr. Mecredy, negotiations culminated in an offer
from Wachovia to acquire 1st United at the price ultimately incorporated into
the Merger Agreement, subject to the completion of due diligence on 1st United
and the negotiation of a definitive agreement. During that time, one of the
other interested institutions contacted management to express continued
interest, but indicated that it could not proceed with the process as quickly as
Wachovia due to other commitments. In the course of those discussions, that
institution indicated that the absolute highest price which could be offered was
approximately equal to the price offered by Wachovia.
The Executive Committee was contacted and, based on management's and Mr.
Mecredy's analysis of the Wachovia offer and particularly the analysis of the
reputation of Wachovia as an acquirer and the superior quality of the liquidity
and long term prospects of the Wachovia common stock offered as consideration,
unanimously agreed that the offer was in the best interest of the shareholders
of 1st United, and sufficient to allow Wachovia to proceed with its due
diligence which was completed on August 5, 1997.
On August 6, management met with the Committee to discuss and evaluate in
detail the terms of the Merger Agreement and Stock Option Agreement, as
negotiated. 1st United's legal advisers and its investment banker were present
and were consulted. As a result of this evaluation, the Committee unanimously
voted to recommend to the 1st United Board approval of the Merger Agreement and
the Stock Option Agreement, as presented by Wachovia.
Later that day, at a special meeting of the 1st United Board, management
outlined the reasons for, and the potential benefits of, a merger with Wachovia,
and updated the 1st United Board on discussions with Wachovia. 1st United's
legal advisers reviewed the terms of the Merger Agreement and the Stock Option
Agreement. Mr. Mecredy, of Hoefer, made a presentation regarding the financial
terms of the Merger and the fairness, from a financial point of view, of the
terms of the Merger to the holders of 1st United Common Stock.
After discussion and detailed consideration of the Merger Agreement, the
Stock Option Agreement, and of the factors discussed below, the 1st United Board
unanimously approved and authorized the execution of the Merger Agreement and
the Stock Option Agreement.
In reaching its decision to recommend approval of the Merger, the 1st
United Board consulted with certain members of 1st United's senior management,
as well as its financial and legal advisers, and considered various factors,
including the following material factors:
(i) The competitive challenges facing 1st United and the banking and
financial services industry, including the likelihood of continuing
consolidation and increasing competition; the growing importance of financial
resources and economies of scale to a banking institution's ability to compete
successfully; the increasing cost of technology and infrastructure required to
compete successfully; the risk involved in attempting to achieve growth through
internal means or through acquisition; and the probability that a business
combination with Wachovia would likely result in greater value to 1st United's
shareholders than other alternatives that the 1st United Board had considered,
including pursuing a combination with another banking organization and remaining
independent.
(ii) The financial terms of the Merger, including the value of the
consideration to be received by 1st United's shareholders as a result of the
Merger compared to the historical market value of 1st United's shares, and the
multiple that such consideration represents to the per share book value,
historical market value and earnings of the 1st United Common Stock.
(iii) The financial strength of Wachovia, its record of profitability, and
its stock price performance; the business of Wachovia, the nature of its
franchise, its business and operating philosophy, and its business mix.
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(iv) The treatment of the Merger as a tax-free exchange of 1st United
Common Stock for Wachovia Common Stock for Federal income tax purposes.
(v) The opinion of Hoefer based on the procedures and subject to the
assumptions made, matters considered and limitations set forth in its opinion,
as to the fairness of the terms of the Merger, from a financial point of view,
to the holders of 1st United Common Stock.
(vi) The diversification of risk associated with ownership of a financial
institution which serves a broad geographic area encompassing Virginia, North
Carolina, South Carolina and Georgia.
(vii) The increased investment liquidity available to holders of 1st United
Common Stock as a result of Wachovia's larger market capitalization and the
greater trading volume in its common stock.
The foregoing list of factors is not intended to be an exhaustive list, but
is intended to include the material factors considered by the 1st United Board.
In reaching its determination to approve and recommend the Merger, the 1st
United Board did not assign any relative or specific weights to the foregoing
factors, and the individual directors may have given differing weights to
different factors.
OPINION OF 1ST UNITED'S FINANCIAL ADVISER
The 1st United Board retained Hoefer to render a written opinion addressed
to the 1st United Board (the "Fairness Opinion") as to the fairness, from a
financial point of view, to the shareholders of 1st United of the terms of the
proposed Merger. No limitations were imposed by the 1st United Board upon Hoefer
with respect to the investigations made or procedures followed in rendering the
Fairness Opinion.
A copy of the Fairness Opinion of Hoefer which sets forth certain
assumptions made, matters considered and limits on the review undertaken by
Hoefer, is attached as Appendix D to this Proxy Statement/Prospectus. 1st United
shareholders are urged to read the Fairness Opinion in its entirety. The
following summary of the procedures and analysis performed, and assumptions used
by Hoefer is qualified in its entirety by reference to the text of such Fairness
Opinion. Hoefer's Fairness Opinion is directed to the 1st United Board only and
is directed only to the financial terms of the transaction and does not
constitute a recommendation to any 1st United shareholder as to how such
shareholder should vote at the 1st United Special Meeting.
In arriving at its opinion, Hoefer reviewed and analyzed, among other
things, the following: (i) the Merger Agreement; (ii) Annual Reports to
Shareholders of Wachovia and 1st United for the years ended December 31, 1995
and December 31, 1996; (iii) Quarterly Reports of Wachovia and 1st United on
Form 10-Q filed with the Commission for the quarters ended June 30, 1997, March
31, 1997, September 30, 1996 and June 30, 1996; (iv) certain other publicly
available financial and other information concerning Wachovia and 1st United;
(v) the historical market prices and trading activity for the common stocks of
Wachovia and 1st United; and (vi) publicly available information concerning
other banks and holding companies, the trading markets for their securities and
the nature and terms of certain other merger transactions Hoefer believed
relevant to its inquiry. Hoefer held discussions with senior management of
Wachovia and 1st United concerning their past and current operations, financial
condition and prospects, as well as the results of regulatory examinations. In
addition, Hoefer reviewed earnings projections for both Wachovia and 1st United
as stand-alone entities, as well as projected operating cost savings expected to
be achieved resulting from the Merger.
In conducting its review and in arriving at its opinion, Hoefer relied upon
and assumed the accuracy and completeness of the financial and other information
provided to it or publicly available, and did not attempt to independently
verify the same. Hoefer relied upon the managements of Wachovia and 1st United
as to the reasonableness of the financial and operating forecasts, projections
and projected operating cost savings (and the assumptions and bases therefor)
provided to it, and Hoefer assumed that such forecasts, projections and
projected operating cost savings reflect the best currently available estimates
and judgments of the applicable managements. Hoefer also assumed, without
independent verification, that the aggregate allowances for loan losses for
Wachovia and 1st United are adequate to cover such losses. Hoefer did not make
or obtain any evaluations or appraisals of the property of Wachovia or 1st
United, nor did it examine any individual loan credit files. For purposes of its
opinion, Hoefer assumed that the Merger will have the tax, accounting and legal
effects described in the Merger Agreement and relied, as to legal matters,
exclusively on counsel to 1st United, as to the accuracy of the disclosures set
forth in the Merger Agreement. Hoefer's opinion is limited to the fairness, from
a financial
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point of view, to the 1st United shareholders of the terms of the proposed
Merger with and into Wachovia and does not address 1st United's underlying
business decision to proceed with the Merger.
As more fully discussed below, Hoefer considered such financial and other
factors as it deemed appropriate under the circumstances, including among others
the following: (i) the historical and current financial position and results of
operations of Wachovia and 1st United, including interest income, interest
expense, net interest income, net interest margin, provision for loan losses,
non-interest income, non-interest expense, earnings, dividends, internal capital
generation, book value, intangible assets, return on assets, return on
shareholders' equity, capitalization, the amount and type of non-performing
assets, loan losses and the reserve for loan losses, all as set forth in the
financial statements for Wachovia and 1st United; (ii) the assets and
liabilities of Wachovia and 1st United, including the loan, investment and
mortgage portfolios, deposits, other liabilities, historical and current
liability sources and costs and liquidity; and (iii) the nature and terms of
certain other merger transactions involving banks and bank holding companies.
Hoefer also took into account its own assessment of general economic, market and
financial conditions and its experience in other transactions, as well as its
experience in securities valuation and its knowledge of the banking industry
generally. Hoefer's opinion is based upon conditions as they existed and could
be evaluated on the date of its opinion and the information made available to it
through that date.
In connection with rendering its Fairness Opinion to the 1st United Board,
Hoefer performed certain financial analyses, which are summarized below. Hoefer
believes that its analysis must be considered as a whole and that selecting
portions of such analysis and the factors considered therein, without
considering all factors and analysis, could create an incomplete view of the
analysis and the processes underlying Hoefer's Fairness Opinion. The preparation
of a fairness opinion is a complex process involving subjective judgments and is
not necessarily susceptible to partial analysis or summary description. In its
analyses, Hoefer made numerous assumptions with respect to industry performance,
business and economic conditions, and other matters, many of which are beyond
the control of 1st United and Wachovia. Any estimates contained in Hoefer's
analyses are not necessarily indicative of future results or values, which may
be significantly more or less favorable than such estimates. Estimates of values
of companies do not purport to be appraisals or necessarily reflect the prices
at which companies or their securities may actually be sold. None of the
financial analyses performed by Hoefer was assigned a greater significance by
Hoefer than any other.
The financial forecasts and projections of 1st United and Wachovia prepared
by Hoefer were based on projections provided by the respective companies as well
as Hoefer's own assessment of general economic, market and financial conditions.
All such information was reviewed with the management of 1st United. 1st United
does not publicly disclose internal management financial forecasts and
projections of the type provided to Hoefer in connection with its review of the
proposed merger. Such forecasts and projections were not prepared with a view
towards public disclosure. The forecasts, projections, and possible operating
cost savings prepared by Hoefer were based on numerous variables and assumptions
which are inherently uncertain, including, without limitation, factors related
to general economic and market conditions. Accordingly, actual results could
vary significantly from those set forth in such forecasts and projections.
SUMMARY OF PROPOSAL. Hoefer reviewed the terms of the proposed transaction,
including the Exchange Ratio and the aggregate transaction value. A purchase
price of $20.875 per share, or a total transaction value of approximately $212
million, represents a price to stated book value at June 30, 1997 (adjusted for
the acquisition of Seaboard Savings Bank, F.S.B. by 1st United on July 1, 1997)
of 3.05, a price to trailing 12 months earnings of 20.07 and a price to assets
ratio of 25.80%.
COMPARABLE TRANSACTION ANALYSIS. Hoefer reviewed certain information
relating to 13 selected bank mergers announced between January 1, 1996 and July
31, 1997 in which the acquired banking organization had total assets from $500
million to $1 billion and a return on average assets greater than or equal to
1.00% (the "Comparable Transactions"). This data was obtained from SNL
Securities, L.P.
On the basis of the Comparable Transactions, Hoefer calculated a range of
purchase prices as a multiple of stated book value for the Comparable
Transactions from a low of 1.88 to a high of 3.87, with an average of 2.53.
These transactions indicated a range of $12.84 per share to $26.43 per share,
with an average of $17.28 per share for 1st United (based on June 30, 1997
equity as adjusted for the acquisition of Seaboard Savings Bank, F.S.B.).
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On the basis of the Comparable Transactions, Hoefer calculated a range of
purchase prices as a multiple of earnings for the Comparable Transactions from a
low of 7.19 to a high of 30.05, with an average of 17.92. These transactions
indicated a range of $8.27 per share to $34.56 per share, with an average of
$18.64 per share for 1st United (based on 1st United's trailing 12 months
earnings).
Finally, Hoefer calculated a range of purchase prices as a percentage of
total assets for the Comparable Transactions from a low of 16.57% to a high of
31.43%, with an average of 23.42%. These transactions indicated a range of
$13.41 per share to $25.43 per share, with an average of $18.94 per share for
1st United (based on June 30, 1997 total assets for 1st United as adjusted for
the acquisition of Seaboard Savings Bank, FSB).
The price to book value multiple, the price to earnings multiple and the
price to assets ratio resulting from the terms of the Merger Agreement all
compare favorably with the prices paid in the Comparable Transactions.
Additionally, Hoefer reviewed pricing information on two acquisitions
recently announced by Wachovia (Central Fidelity and Jefferson). Based on data
obtained from SNL Securities, L.P., the average price to book value multiple for
the two transactions equaled 2.72, the average price to trailing 12 months
earnings multiple equaled 20.34 and the average price as a percentage of total
assets equaled 23.59%. The multiples resulting from the terms of the Merger
Agreement in this transaction all compare favorably with the prices paid in the
two previous transactions by Wachovia.
PRESENT VALUE ANALYSIS. Hoefer calculated the present value of 1st United
assuming that 1st United remained independent. Based on projected earnings for
1st United for 1997 through 2001 and using a discount rate of 10%, an acceptable
discount rate considering the risk-return relationship most investors would
demand for an investment of this type as of the valuation date, the present
value equaled $15.46 per share, which is below the transaction value of $20.875.
CONTRIBUTION ANALYSIS. Hoefer reviewed the relative contributions in terms
of various balance sheet items, net income and market capitalization to be made
by 1st United and Wachovia to the combined institution based on (i) balance
sheet at June 30, 1997, and (ii) estimated 1997 earnings. The income statement
and balance sheet components analyzed included total assets, total loans (net),
total deposits, shareholders' equity and net income. This analysis showed that,
while 1st United shareholders would own approximately 1.57% of the aggregate
outstanding shares of the combined institution based on the Exchange Ratio, 1st
United was contributing 1.32% of total assets, 1.32% of total loans (net), 1.86%
of total deposits, 1.46% of shareholders' equity, and 1.17% of trailing 12 month
earnings.
PRO FORMA ANALYSIS. Hoefer compared the changes in the amount of earnings,
book value and dividends attributable to one share of 1st United Common Stock
before the Merger with the amounts attributable to the shares of Wachovia Common
Stock for which such shares of 1st United would be exchanged under the Merger
Agreement.
Hoefer's analysis utilized an Exchange Ratio of .3297, (based upon the
closing share price of Wachovia Common Stock on July 31, 1997 of $63.3125) and
included pre-tax merger savings of $6 million. On an earnings per share basis,
1st United shareholders are projected to experience appreciation ranging from
10.62% to 20.67%. On a book value per share basis, 1st United shareholders are
projected to experience appreciation ranging from 16.90% to 17.61%. Finally, on
a dividend per share basis, 1st United shareholders are projected to experience
appreciation ranging from 20.11% to 26.33%.
STOCK TRADING HISTORY. Hoefer reviewed and analyzed the historical trading
prices and volumes for Wachovia Common Stock on a monthly basis from January 31,
1996 to August 1, 1997. The Wachovia Common Stock price has ranged from a low of
$42.875 to a high of $63.313. The stock price to trailing 12 months earnings per
share has ranged from a low of 12.1 to a high of 16.5, with an average of 14.2.
The stock price to book value has ranged from a low of 1.94 to a high of 2.74,
with an average of 2.31. The volume of shares traded during a one month period
has ranged from 3,483,100 to 6,820,600, indicating an active market for Wachovia
Common Stock.
OTHER ANALYSIS. Hoefer also reviewed selected investment research reports
on and earnings estimates for Wachovia. In addition, Hoefer prepared an overview
of historical financial performance of both 1st United and Wachovia.
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The opinion expressed by Hoefer was based upon market, economic and other
relevant considerations as they existed and have been evaluated as of the date
of the opinion. Events occurring after the date of issuance of the opinion,
including but not limited to, changes affecting the securities markets, the
results of operations or material changes in the assets or liabilities of 1st
United could materially affect the assumptions used in preparing the opinion.
FINANCIAL ADVISORY FEES. Pursuant to an engagement letter dated March 31,
1997, 1st United engaged Hoefer to develop a strategic plan for the organization
for $125,000 plus out-of-pocket expenses. Pursuant to an engagement letter dated
July 30, 1997, 1st United engaged Hoefer to review the terms of the transaction
and to render a fairness opinion in connection with the Merger for $75,000 plus
out-of-pocket expenses.
REASONS OF WACHOVIA FOR THE MERGER
The acquisition of 1st United is consistent with Wachovia's publicly stated
plan to have operations, offices and distinct capabilities in every market of
its choice within its region. Wachovia believes that, in addition to expanding
Wachovia's presence into very attractive Florida markets, the Merger provides an
opportunity to enhance Wachovia's shareholder value by eliminating redundant or
unnecessary costs and enhancing revenue growth prospects.
EFFECTIVE TIME
If the Merger is approved by the requisite vote of the 1st United
shareholders, all required governmental and other consents and approvals are
obtained and the other conditions to the obligations of the parties to
consummate the Merger are either satisfied or waived (as permitted), the Merger
will be consummated and will become effective on the date (the "Effective Date")
and at the time (the "Effective Time") that articles of merger reflecting the
Merger are filed with the Florida Department of State and the Secretary of State
of North Carolina, or such later date as indicated therein. Unless otherwise
agreed by 1st United and Wachovia, and subject to the conditions to the
obligations of the parties to effect the Merger, the parties have agreed to
cause the Effective Date to occur on the fifth business day after the last of
the conditions to the consummation of the Merger have been satisfied or waived
(or, at the election of Wachovia, a day within five business days of such fifth
business day). Wachovia and 1st United each has the right, acting unilaterally,
to terminate the Merger Agreement should the Merger not be consummated by March
31, 1998. See "The Merger -- Amendment, Waiver and Termination."
DISTRIBUTION OF WACHOVIA CERTIFICATES
Promptly after the Effective Time, Wachovia will send or cause to be sent
transmittal materials to each record holder of 1st United Common Stock for use
in exchanging those certificates for the shares of Wachovia Common Stock to
which such shareholder is entitled as a result of the Merger. 1ST UNITED
SHAREHOLDERS SHOULD NOT SURRENDER THEIR CERTIFICATES FOR EXCHANGE UNTIL THEY
RECEIVE THE LETTER OF TRANSMITTAL AND INSTRUCTIONS. Wachovia will cause the
certificates for Wachovia Common Stock and/or any check in respect of any
fractional share interests or dividends or distributions which a holder of 1st
United Common Stock will be entitled to receive to be delivered upon surrender
to Wachovia Bank, National Association, as exchange agent (the "Exchange
Agent"), of certificates representing such shares of 1st United Common Stock
owned by such shareholder. No party will be liable to a holder of 1st United
Common Stock for any property delivered in good faith to a public official
pursuant to any applicable abandoned property, escheat or similar law.
After the Effective Time, at the election of Wachovia, no dividend or other
distribution payable after the Effective Time with respect to Wachovia Common
Stock will be paid to the holder of any unsurrendered certificate for 1st United
Common Stock, and no such unsurrendered shares will be entitled to vote, until
the holder duly surrenders such certificate. Upon such surrender, all
undelivered dividends and other distributions and, if applicable, a check for
the amount to be paid in lieu of any fractional share interest will be delivered
to such shareholder, in each case without interest.
After the Effective Time, there will be no transfers of shares of 1st
United Common Stock on 1st United's stock transfer books. If certificates
representing shares of 1st United Common Stock are presented for transfer after
the Effective Time, they will be canceled and exchanged for the shares of
Wachovia Common Stock and a check for the amount due in lieu of fractional
shares, if any, deliverable in respect thereof.
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FRACTIONAL SHARES
Pursuant to the terms of the Merger Agreement, each holder of shares of 1st
United Common Stock exchanged pursuant to the Merger who would otherwise have
been entitled to receive a fraction of a share of Wachovia Common Stock, shall
receive, in lieu thereof, cash (without interest) in an amount determined by
multiplying such fraction by the Wachovia Average Stock Price. No such holder
will be entitled to dividends, voting rights, or any other rights as a
shareholder with respect to any fractional shares.
STOCK OPTIONS
The Merger Agreement provides that, unless the holder of an option (each a
"1st United Stock Option") to purchase shares of 1st United Common Stock
received pursuant to 1st United's stock option plans for key employees and
directors (collectively, the "1st United Stock Plans") elects to receive cash as
described below, each 1st United Stock Option which is outstanding at the
Effective Time, whether vested or unvested, will be converted into an option to
acquire, on the same terms and conditions as were applicable under the 1st
United Stock Plans, as the case may be, shares of Wachovia Common Stock, with
the exercise price and shares purchasable thereunder being adjusted to reflect
the Exchange Ratio. At the election of any holder of a 1st United Stock Option,
upon written notice within at least 10 business days prior to the Effective
Time, each outstanding 1st United Stock Option held by such holder, whether
vested or unvested, shall be canceled and the holder shall be entitled to
receive an amount of cash equal to the product of (i) the amount, if any, by
which the Merger Consideration Value (as defined below) exceeds the exercise
price per share subject to such 1st United Stock Option and (ii) the number of
shares issuable pursuant to the unexercised portion of such 1st United Stock
Option, less any required withholding taxes. "Merger Consideration Value" will
be equal to the Exchange Ratio multiplied by the Wachovia Average Stock Price.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING SUMMARY OF THE MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF
THE MERGER TO HOLDERS WHO HOLD SHARES OF 1ST UNITED COMMON STOCK AS CAPITAL
ASSETS DEALS ONLY WITH HOLDERS WHO ARE (I) CITIZENS OR RESIDENTS OF THE UNITED
STATES, (II) DOMESTIC CORPORATIONS OR (III) OTHERWISE SUBJECT TO UNITED STATES
FEDERAL INCOME TAX ON A NET INCOME BASIS IN RESPECT OF SHARES OF 1ST UNITED
COMMON STOCK ("U.S. HOLDERS"). THIS SUMMARY MAY NOT APPLY TO CERTAIN CLASSES OF
TAXPAYERS, INCLUDING, WITHOUT LIMITATION, INSURANCE COMPANIES, TAX-EXEMPT
ORGANIZATIONS, FINANCIAL INSTITUTIONS, DEALERS IN SECURITIES, PERSONS WHO
ACQUIRED OR ACQUIRE SHARES OF 1ST UNITED COMMON STOCK PURSUANT TO THE EXERCISE
OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION AND PERSONS WHO HOLD
SHARES OF 1ST UNITED COMMON STOCK IN A HEDGING TRANSACTION OR AS PART OF A
STRADDLE OR CONVERSION TRANSACTION. ALSO, THE SUMMARY DOES NOT ADDRESS STATE,
LOCAL OR FOREIGN TAX CONSEQUENCES OF THE MERGER. CONSEQUENTLY, EACH HOLDER
SHOULD CONSULT SUCH HOLDER'S OWN TAX ADVISER AS TO THE SPECIFIC TAX CONSEQUENCES
OF THE MERGER TO SUCH HOLDER.
This summary is based on current law and represents the opinion of Sullivan
& Cromwell, special counsel to Wachovia, and the opinion of Akerman, Senterfitt
& Eidson, P.A., special counsel to 1st United. Future legislative, judicial or
administrative changes or interpretations, which may be retroactive, could alter
or modify the statements set forth herein. This summary is based on, among other
things, assumptions relating to certain facts and circumstances of, and the
intentions of the parties to, the Merger, which assumptions have been made with
the consent of Wachovia. Wachovia does not intend to request any ruling from the
Internal Revenue Service as to the United States federal income tax consequences
of the Merger.
It is intended that the Merger would be treated as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and that, accordingly, for federal income tax purposes no gain or
loss would be recognized by either 1st United or Wachovia as a result of the
Merger.
Wachovia's obligation to consummate the Merger is conditioned upon, among
other things, the receipt of an opinion of Sullivan & Cromwell, dated the
Effective Date, to the effect that the Merger constitutes a reorganization under
Section 368 of the Code. 1st United's obligation to consummate the Merger is
conditioned upon, among other things, the receipt of an opinion of Akerman,
Senterfitt & Eidson, P.A., dated the Effective Date, to the effect that (i) the
Merger constitutes a reorganization within the meaning of Section 368 of the
Code and (ii) no gain or loss will be recognized by U.S. Holders who receive
shares of Wachovia Common Stock in exchange for shares of 1st United Common
Stock, except with respect to cash received in lieu of fractional share
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interests. Such opinions will be based upon facts, representations and
assumptions set forth therein. In rendering such opinions, counsel may require
and rely upon representations contained in letters to be received from 1st
United, Wachovia and shareholders of 1st United.
Assuming the Merger qualifies as a "reorganization" within the meaning of
Section 368(a) of the Code, the material federal income tax consequences of the
Merger to each of Wachovia, 1st United and U.S. Holders who exchange shares of
1st United Common Stock for shares of Wachovia Common Stock pursuant to the
Merger will be as follows:
(i) no gain or loss will be recognized by Wachovia or 1st United as a
result of the consummation of the Merger;
(ii) no gain or loss will be recognized by a U.S. Holder, except as
described below with respect to a U.S. Holder who receives cash in lieu of
a fractional share interest in Wachovia Common Stock;
(iii) the aggregate adjusted tax basis of shares of Wachovia Common
Stock (including a fractional share interest in Wachovia Common Stock
deemed received and redeemed as described below) received by a U.S. Holder
will be the same as the aggregate adjusted tax basis of the shares of 1st
United Common Stock exchanged therefor;
(iv) the holding period of shares of Wachovia Common Stock (including
a fractional share interest in Wachovia Common Stock deemed received and
redeemed as described below) received by a U.S. Holder will include the
holding period of the 1st United Common Stock exchanged therefor; and
(v) a U.S. Holder of 1st United Common Stock who receives cash in lieu
of a fractional share interest in Wachovia Common Stock will be treated as
having received such fractional share interest and then as having received
the cash in redemption of such fractional share interest. Under Section 302
of the Code, if such deemed distribution were "substantially
disproportionate" with respect to the U.S. Holder or were "not essentially
equivalent to a dividend" after giving effect to the constructive ownership
rules of the Code, the U.S. Holder would generally recognize capital gain
or loss equal to the difference between the amount of cash received and the
U.S. Holder's adjusted tax basis in the fractional share interest
(determined as described in (iii) above). Such capital gain or loss would
be long-term capital gain or loss if the U.S. Holder's holding period in
the fractional share interest (determined as described in (iv) above) is
more than one year. Long-term capital gain of an individual U.S. Holder is
generally subject to a maximum tax rate of 28% in respect of property held
for more than one year and to a maximum tax rate of 20% in respect of
property held in excess of 18 months.
BECAUSE CERTAIN TAX CONSEQUENCES OF THE MERGER MAY VARY DEPENDING UPON THE
PARTICULAR CIRCUMSTANCES OF EACH HOLDER OF 1ST UNITED COMMON STOCK AND OTHER
FACTORS, EACH SUCH HOLDER IS URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISER AS
TO THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO SUCH HOLDER (INCLUDING THE
APPLICATION AND EFFECT OF STATE AND LOCAL INCOME AND OTHER TAX LAWS).
Under the terms of the Merger Agreement, the conditions to the Merger,
including receipt by each party of opinions of counsel relating to tax matters,
may generally be waived by Wachovia or 1st United, as applicable. As of the date
of this Proxy Statement/Prospectus, neither Wachovia nor 1st United intends to
waive the conditions as to the receipt of opinions of counsel on tax matters. In
the event of a failure to obtain tax opinions, and a party's determination to
waive such condition to the consummation of the Merger, 1st United will
resolicit the votes of its shareholders to approve the Merger without such
conditions and update the information contained herein with respect to the tax
consequences of the Merger as necessary. See "The Merger -- Conditions to
Consummation" and " -- Amendment, Waiver and Termination."
MANAGEMENT AND OPERATIONS AFTER THE MERGER
Wachovia will be the surviving corporation resulting from the Merger and
will continue to be governed by the laws of the State of North Carolina and will
operate in accordance with its articles of incorporation and bylaws as in effect
immediately prior to the Effective Time until otherwise amended or repealed
after the Effective Time. The directors and officers of Wachovia in office
immediately prior to the Effective Time, and such
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additional persons as may thereafter be elected, will serve as the directors and
officers of Wachovia from and after the Effective Time in accordance with
Wachovia's articles of incorporation and bylaws.
POST-ACQUISITION COMPENSATION AND BENEFITS
The Merger Agreement provides generally that Wachovia will, from and after
the Effective Time, (i) provide employees of 1st United who become employees of
Wachovia with employee benefit plans no less favorable in the aggregate than
those provided to similarly situated employees of Wachovia; (ii) any such
employees will receive credit for service with 1st United or any of its
subsidiaries or predecessors prior to the Effective Time for the purpose of
determining eligibility and vesting; (iii) Wachovia will cause any and all
pre-existing condition limitations (to the extent such limitations did not apply
to a pre-existing condition under the 1st United compensation and benefit plans)
and eligibility waiting periods under group health plans to be waived with
respect to such participants and their eligible dependents; and (iv) Wachovia
will extend its Retirement Medical Plan to employees of 1st United who become
employees of Wachovia and retire following December 31, 1997 or the Effective
Date, if later, and would qualify for retirement under the Wachovia Retirement
Income Plan; and PROVIDED, FURTHER, that a maximum of 20 years of service with
1st United will be recognized for benefit accrual purposes under the Retirement
Medical Plan. All discretionary awards and benefits under any employee benefit
plans of Wachovia will be subject to the discretion of the persons or committee
administering such plans. Wachovia will honor, pursuant to the terms of 1st
United's employee compensation and benefit plans, all employee benefit
obligations to current and former employees of 1st United under such plans.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of 1st United's management and the 1st United Board may be
deemed to have certain interests in the Merger that are in addition to their
interests as 1st United shareholders. These interests include, among others,
indemnification rights of 1st United directors and officers under the Merger
Agreement, potential severance and other employee benefits described below and
the understanding that Wachovia will employ Warren S. Orlando, Chief Executive
Officer and President of 1st United, as Chairman and Chief Executive Officer of
Wachovia's Florida banking operations for a period of at least three years,
subject to renewal under certain circumstances, and that Wachovia will employ
John Marino, Executive Vice President and Chief Financial Officer of 1st United,
as Comptroller of Wachovia's Florida banking operations and Senior Vice
President of Wachovia Bank for a period of three years. The 1st United Board was
aware of the interests of all such persons at the time it approved the Merger
Agreement and the Stock Option Agreement.
EQUITY INCENTIVE PLANS. The Merger Agreement provides that a holder of a
1st United Stock option may, within at least ten business days prior to the
Effective Time, provide 1st United with written notice of its election to have
its 1st United Stock Option(s) canceled and to receive a cash payment therefor.
All 1st United Stock Options not so canceled and that remain outstanding at the
Effective Time, including those held by management, will be converted into an
option to acquire Wachovia Common Stock, with the exercise price and number of
shares purchasable thereunder being adjusted to reflect the Exchange Ratio or,
at the election of the option holder, converted into cash. See "Stock Options."
INDEMNIFICATION AND INSURANCE. The Merger Agreement provides that following
the Effective Time and for a period of six years thereafter, Wachovia will
indemnify, defend and hold harmless the past and present directors and officers
of 1st United and its subsidiaries against all costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages or
liabilities incurred in connection with any claim, action, suit, proceeding, or
investigation, whether civil, criminal, administrative or investigative, arising
out of actions or omissions occurring at or prior to the Effective Time
(including, without limitation, the transactions contemplated by the Merger
Agreement) to the fullest extent that 1st United is permitted to indemnify (and
advance expenses to) its directors and officers under the laws of the State of
Florida, the articles of incorporation and bylaws of 1st United as in effect on
August 6, 1997. The Merger Agreement also provides that Wachovia will use its
reasonable best efforts for three years after the Effective Time to provide
directors' and officers' liability insurance that serves to reimburse the
present and former directors and officers of 1st United or any of its
subsidiaries with respect to claims against such directors and officers arising
from facts or events that occurred before the Effective Time, which insurance
shall contain at least the same coverage and amounts, and contain terms and
conditions no less advantageous, as that coverage currently provided by 1st
United; PROVIDED, HOWEVER, that in no event will Wachovia be required to expend
more than 200% of the current amount expended by 1st United to maintain or
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obtain such insurance and that if Wachovia is unable to maintain or obtain such
insurance, Wachovia will use its reasonable best efforts to obtain as much
comparable insurance as is available for such 200% amount.
ORLANDO EMPLOYMENT AGREEMENT. Wachovia has entered into an employment
agreement with Warren S. Orlando, the President and Chief Executive Officer of
1st United (the "Orlando Employment Agreement"). The term of the Orlando
Employment Agreement runs from the Effective Date through the third anniversary
of the Effective Date, subject to automatic annual extensions unless Wachovia or
Mr. Orlando gives notice that the term will not be extended beyond its then
applicable expiration date; PROVIDED, HOWEVER, that in no event shall the term
of the Orlando Employment Agreement extend beyond Mr. Orlando's sixtieth
birthday. Pursuant to the Orlando Employment Agreement, Mr. Orlando will serve
as Chairman and Chief Executive Officer of Wachovia's Florida banking
operations. During the term of the Orlando Employment Agreement, Mr. Orlando
will initially be paid a base salary of $250,000. In addition, Mr. Orlando will
be awarded for each fiscal year during the term of the Orlando Employment
Agreement an annual cash bonus consistent with Wachovia's policy and practice
for peer executives (targeted at 45% of his then base salary), but which will
not be less than $500,000 for fiscal 1998. During the term of the Orlando
Employment Agreement, Wachovia will provide Mr. Orlando benefits and perquisites
no less favorable than those provided to peer executives of Wachovia and its
affiliates.
In the event that Mr. Orlando's employment is terminated during the term of
the Orlando Employment Agreement by Wachovia other than for "cause," or if,
prior to the first anniversary of the Effective Date, Mr. Orlando voluntarily
terminates employment within six months after (i) his base salary is reduced
below its level in effect on the Effective Date without his consent, (ii) the
duties assigned to Mr. Orlando are not as set forth in the Orlando Employment
Agreement and he has not consented thereto, or (iii) Wachovia has breached its
responsibilities and obligations to Mr. Orlando under the Orlando Employment
Agreement, or if Mr. Orlando terminates his employment within three years of a
"Change of Control," Mr. Orlando will be entitled to receive cash compensation
and benefits as described below (the "Compensation Continuance") for the period
beginning with the date of such termination and ending with the third
anniversary of the date of such termination, regardless of whether the term of
the Orlando Employment Agreement otherwise would end before such period expires
(the "Compensation Period"). The cash compensation to be received monthly during
the Compensation Period will equal one-twelfth of the sum of (x) Mr. Orlando's
highest annual rate of salary from Wachovia in effect during the twelve-month
period prior to his termination, plus (y) $250,000. During the Compensation
Period, Mr. Orlando will be deemed to be continuing in the employment of
Wachovia for the purpose of applying and administering benefit plans of Wachovia
(other than any tax-qualified retirement plans) and individual contracts between
Wachovia and Mr. Orlando providing supplemental or equalization payments or
benefits with respect to Mr. Orlando, with such supplemental benefits
facilitating the continuation of the benefits which would have been afforded
under the tax-qualified plans, subject to termination in the event Mr. Orlando
engages in full-time employment. In addition, if Wachovia terminates the
employment of Mr. Orlando for any reason other than for "cause" prior to the
first anniversary of the Effective Date, or if Mr. Orlando voluntarily
terminates his employment prior to such first anniversary for the reasons set
forth in clauses (i), (ii) or (iii) above, then in addition to the Compensation
Continuance, Wachovia will accelerate payment of the remainder of Mr. Orlando's
base salary and the guaranteed $500,000 incentive payment on behalf of the 1998
year. Immediately upon such termination of Mr. Orlando's employment, all of Mr.
Orlando's options to acquire shares of Wachovia Common Stock will become fully
vested and exercisable and certain restricted awards, if any, will be deemed to
be earned in full.
The Orlando Employment Agreement also prohibits Mr. Orlando from competing
with Wachovia during the three years after termination of the Orlando Employment
Agreement within the counties in Florida in which Wachovia has as of the date of
such termination an existing or formally planned presence as evidenced by
written documentation of planned expansion by Wachovia within various counties.
The Orlando Employment Agreement provides for a gross-up payment to be made
to Mr. Orlando, if necessary, to eliminate the effects of the imposition of the
excise tax under Section 4999 of the Code on the payments made thereunder and of
the imposition of income and excise taxes on such gross-up payment.
On the Effective Date, Mr. Orlando will be granted options to purchase
10,000 shares of Wachovia Common Stock at an exercise price equal to the market
price of Wachovia Common Stock as of the Effective Time. The options will vest
over a five-year period.
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MARINO EMPLOYMENT AGREEMENT. Wachovia has entered into an employment
agreement with John Marino, the Executive Vice President and Chief Financial
Officer of 1st United (the "Marino Employment Agreement"). The term of the
Marino Employment Agreement runs from the Effective Date through the third
anniversary of the Effective Date. Pursuant to the Marino Employment Agreement,
Mr. Marino will serve as Comptroller of Wachovia's Florida banking operations
and as a Senior Vice President of Wachovia Bank. During the term of the Marino
Employment Agreement, Mr. Marino will initially be paid a base salary of
$150,000. Upon the satisfactory completion of certain critical success factors,
Mr. Marino will be awarded a retention bonus payable within 45 days following
the first anniversary of the Effective Date, equal to a percentage of his annual
base salary then in effect; PROVIDED, HOWEVER, that such retention bonus shall
in no event exceed 30% of Mr. Marino's then annual base salary. In addition, Mr.
Marino will be awarded for each fiscal year during the term of the Marino
Employment Agreement an annual cash bonus consistent with Wachovia's policy and
practice for peer executives (targeted at 35% of his then base salary), but
which will not be less than $60,000 for fiscal 1998. During the term of the
Marino Employment Agreement, Wachovia will provide Mr. Marino benefits and
perquisites no less favorable than those provided to peer executives of Wachovia
and its affiliates.
In the event that Mr. Marino's employment is terminated during the term of
the Marino Employment Agreement by Wachovia other than for "cause," or if, Mr.
Marino voluntarily terminates employment within six months after (i) his base
salary is reduced below its level in effect on the Effective Date without his
consent, (ii) the duties assigned to Mr. Marino are not as set forth in the
Marino Employment Agreement and he has not consented thereto, or (iii) Wachovia
has breached its responsibilities and obligations to Mr. Marino under the Marino
Employment Agreement, or if Mr. Marino voluntarily terminates his employment
within three years of a "Change of Control" but subsequent to the first
anniversary of the Effective Date, Mr. Marino will be entitled to receive cash
compensation and benefits as described below (the "Compensation Continuance")
for the period beginning with the date of such termination and ending with the
second anniversary of the date of such termination (if he is terminated not for
"cause", or if Mr. Marino terminates his employment pursuant to clauses (i),
(ii) or (iii) above, or if he terminates his employment within three years of a
"Change of Control") or the first anniversary of the date of such termination
(if Mr. Marino voluntarily terminates his employment on or subsequent to the
first anniversary of the Effective Date), regardless of whether the term of the
Marino Employment Agreement otherwise would end before such period expires (the
"Compensation Period"). The cash compensation to be received monthly during the
Compensation Period will equal one-twelfth of the sum of (x) Mr. Marino's
highest annual rate of salary from Wachovia in effect during the twelve-month
period prior to his termination, plus (y) an amount equal to the average of the
annual amounts awarded to Mr. Marino under Wachovia's Senior Management
Incentive Plan, the 1st United Executive Bonus Program or the guaranteed
incentive payment payable by Wachovia during 1998 averaged over the two
consecutive calendar years immediately preceding the termination. During the
Compensation Period, Mr. Marino will be deemed to be continuing in the
employment of Wachovia for the purpose of applying and administering benefit
plans of Wachovia (other than any tax-qualified retirement plans) and individual
contracts between Wachovia and Mr. Marino providing supplemental or equalization
payments or benefits with respect to Mr. Marino, with such supplemental benefits
facilitating the continuation of the benefits which would have been afforded
under the tax-qualified plans, subject to termination in the event Mr. Marino
engages in full-time employment. In addition, if Wachovia terminates Mr. Marino
for any reason other than for "cause" prior to the first anniversary of the
Effective Date, or if Mr. Marino voluntarily terminates his employment prior to
the first anniversary for the reasons set forth in clauses (i), (ii) or (iii)
above, then in addition to the Compensation Continuance, Wachovia would
accelerate payment of the remainder of the base salary and the guaranteed
incentive payment on behalf of the 1998 year. Immediately upon such termination
of Mr. Marino's employment, all of Mr. Marino's options to acquire shares of
Wachovia Common Stock will become fully vested and exercisable and certain
restricted awards will be deemed to be earned in full.
The Marino Employment Agreement prohibits Mr. Marino from competing with
Wachovia during the Compensation Continuance period within the counties in
Florida in which Wachovia has an existing or formally planned presence as
evidenced by written documentation of planned expansion by Wachovia within
various counties.
The Marino Employment Agreement provides for a gross-up payment to be made
to Mr. Marino, if necessary, to eliminate the effects of the imposition of the
excise tax under Section 4999 of the Code on the payments made thereunder and of
the imposition of income and excise taxes on such gross-up payment.
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On the Effective Date, Mr. Marino will be granted 2,000 restricted shares
of Wachovia Common Stock and options to purchase 5,000 shares of Wachovia Common
Stock at an exercise price equal to the market price of Wachovia Common Stock as
of the Effective Time. The options and the restricted shares will vest over a
five-year period.
CONVERSION OF 1ST UNITED COMMON STOCK OWNED BY DIRECTORS AND OFFICERS.
Certain directors and officers of 1st United own shares of 1st United Common
Stock which will be converted into shares of Wachovia Common Stock at the same
exchange ratio as will apply to every other 1st United shareholder. See "Voting
Securities and Principal Shareholders of 1st United -- Shares Beneficially Owned
by Directors and Executive Officers."
BENEFITS. The Merger Agreement provides that Wachovia will provide certain
benefits to certain employees of 1st United as described above in
" -- Post-Acquisition Compensation and Benefits."
CONDITIONS TO CONSUMMATION
The obligations of 1st United and Wachovia to consummate the Merger are
subject to the satisfaction or written waiver of the following conditions: (i)
the Merger Agreement shall have been approved by requisite vote of the
shareholders of 1st United; (ii) the required regulatory approvals described
below under "Regulatory Approvals" shall have been received, generally without
any conditions, restrictions or requirements which the board of directors of
Wachovia (the "Wachovia Board") reasonably determines in good faith would (A)
following the Effective Time, have a material adverse effect on Wachovia and its
subsidiaries taken as a whole or (B) reduce the benefits of the Merger to such a
degree that Wachovia would not have entered into the Merger Agreement had such
conditions, restrictions or requirements been known at the date of the Merger
Agreement; (iii) no court or regulatory authority shall have taken any action
prohibiting the consummation of the transactions contemplated by the Merger
Agreement; (iv) the Registration Statement of which this Proxy
Statement/Prospectus is a part shall have been declared effective by the
Commission and shall not be subject to a stop order or any threatened stop
order; (v) the shares of Wachovia Common Stock issuable in connection with the
Merger shall have been qualified, registered or otherwise approved for exchange
under the securities laws of the various states in which such qualification,
registration or approval is required; (vi) the shares of Wachovia Common Stock
issuable pursuant to the Merger shall have been approved for listing on the
NYSE; (vii) 1st United shall have received an opinion of Akerman, Senterfitt &
Eidson, P.A., special counsel to 1st United, as to certain tax matters; (viii)
Wachovia shall have received an opinion of Sullivan & Cromwell, special counsel
to Wachovia, as to certain tax matters; (ix) the other party's representations
and warranties shall remain accurate and each party shall have performed in all
material respects all of the obligations required to be performed by it pursuant
to the Merger Agreement, and shall have delivered certificates confirming
satisfaction of the foregoing requirements; and (x) each party shall have
received a letter of the other party's independent accountants as to certain
financial information of the other party.
No assurances can be provided as to when or if all of the conditions
precedent to the Merger can or will be satisfied or waived by the appropriate
party. As of the date of this Proxy Statement/Prospectus, the parties have no
reason to believe that any of the conditions set forth above will not be
satisfied.
The conditions to consummation of the Merger may generally be waived, in
whole or in part, to the extent permissible under applicable law, by the party
for whose benefit the condition has been imposed, without the approval of the
1st United shareholders. As of the date of this Proxy Statement/Prospectus,
neither Wachovia nor 1st United intends to waive the conditions as to the
receipt of opinions of counsel on taxation matters. In the event of a failure to
obtain tax opinions, and a party's determination to waive such condition to the
consummation of the Merger, 1st United would resolicit the votes of its
shareholders to approve the Merger without such condition and update the
information contained herein with respect to the tax consequences of the Merger
as necessary. See " -- Amendment, Waiver and Termination."
REGULATORY APPROVALS
FEDERAL RESERVE BOARD. The Merger is subject to prior approval by the Board
of Governors of the Federal Reserve System (the "Federal Reserve Board") under
Section 3 of the BHC Act. Such approval was obtained on September 19, 1997.
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Pursuant to the BHC Act, the Merger may not be consummated until 30 days
after such approval (or October 19), during which time the United States
Department of Justice may challenge the Merger on antitrust grounds. The
commencement of an antitrust action would stay the effectiveness of the Federal
Reserve Board's approval unless a court specifically ordered otherwise. With the
approval of the Federal Reserve Board and the concurrence of the Department of
Justice, the waiting period may be reduced to no less than 15 days. Wachovia and
1st United believe that the Merger does not raise substantial antitrust or other
significant regulatory concerns and that they will be able to obtain all
requisite regulatory approvals on a timely basis without the imposition of any
condition that would have a material adverse effect on Wachovia.
STATE AUTHORITIES. Consummation of the Merger is subject to the prior
approval of the FDBF and the State Corporation Commission of Virginia. The
Merger may also be subject to the approval of, or notice to, other state
authorities under various state bank, insurance and securities regulatory
statutes.
STATUS OF REGULATORY APPROVALS AND OTHER INFORMATION. Wachovia and 1st
United have filed (or will promptly file) all applications and notices and have
taken (or will promptly take) other appropriate action with respect to any
requisite approvals or other action of any governmental authority. The Merger
Agreement provides that the obligation of each of Wachovia and 1st United to
consummate the Merger is conditioned upon, among other things, (i) the receipt
of all requisite regulatory approvals, including the approvals of the Federal
Reserve Board and, to the extent necessary, the state authorities, (ii) the
termination or expiration of all statutory or regulatory waiting periods in
respect thereof and (iii) no such approvals containing conditions, restrictions
or requirements which the Wachovia Board reasonably determines in good faith
would, after the Effective Date, have a material adverse effect on Wachovia and
its subsidiaries taken as a whole or reduce the benefits of the transactions
contemplated in the Merger Agreement to such a degree that Wachovia would not
have entered into the Merger Agreement had such been known at the date of the
Merger Agreement.
THE MERGER CANNOT PROCEED IN THE ABSENCE OF THE REQUISITE REGULATORY
APPROVALS. THERE CAN BE NO ASSURANCES THAT ALL SUCH REGULATORY APPROVALS WILL BE
OBTAINED OR AS TO THE DATES OF SUCH APPROVALS. THERE CAN ALSO BE NO ASSURANCE
THAT SUCH APPROVALS WILL NOT CONTAIN A CONDITION, RESTRICTION OR REQUIREMENT
THAT CAUSES SUCH APPROVALS TO FAIL TO SATISFY THE CONDITIONS SET FORTH IN THE
MERGER AGREEMENT. SEE " -- THE EFFECTIVE TIME," " -- CONDITIONS TO
CONSUMMATION," AND " -- AMENDMENT, WAIVER AND TERMINATION."
AMENDMENT, WAIVER AND TERMINATION
To the extent permitted by law, 1st United and Wachovia may amend the
Merger Agreement by written agreement at any time. Prior to or at the Effective
Time, either 1st United or Wachovia, acting through its respective board of
directors, chief executive officer or other authorized officer, may waive any
default in the performance of any term of the Merger Agreement by the other
party, may waive or extend the time for the fulfillment by the other party of
any of its obligations under the Merger Agreement, and may waive any of the
conditions precedent to the obligations of such party under the Merger
Agreement, except any condition that, if not satisfied, would result in the
violation of an applicable law or governmental regulation.
The Merger Agreement may be terminated, and the Merger abandoned, at any
time prior to the Effective Time by mutual consent of the boards of directors of
1st United and Wachovia. In addition, the Merger Agreement may be terminated,
and the Merger abandoned, prior to the Effective Time by either Wachovia or 1st
United if: (i) the other party breaches, and does not timely cure any breach of,
a representation, warranty, covenant or other agreement contained in the Merger
Agreement and such breach, individually or in the aggregate, has a Material
Adverse Effect (as defined in the Merger Agreement); (ii) any consent or
approval of certain regulatory authorities is denied by final nonappealable
action of such authority or the 1st United shareholders fail to approve the
Merger Agreement; or (iii) the Merger has not been consummated by March 31, 1998
unless the failure to consummate by such time is due to knowing action or
inaction of the party seeking to terminate. Also, Wachovia may terminate the
Merger Agreement if the 1st United Board shall fail to recommend approval of the
Merger, or has modified or changed such recommendation.
CONDUCT OF BUSINESS PENDING THE MERGER
1ST UNITED. 1st United has agreed in the Merger Agreement, unless the prior
written consent of Wachovia is obtained, and except as otherwise contemplated by
the Merger Agreement, not to, and to cause each of its subsidiaries not to:
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(a) conduct the business of 1st United and its subsidiaries other than in
the ordinary and usual course or fail to use reasonable efforts to preserve
intact their business organizations and assets and maintain their rights,
franchises and existing relations with customers, suppliers, employees and
business associates, or take any action reasonably likely to have an adverse
effect upon 1st United's ability to perform any of its material obligations
under the Merger Agreement;
(b) issue, sell or otherwise permit to become outstanding, or authorize the
creation of, any additional shares of, or rights to acquire, 1st United Common
Stock, enter into any agreement with respect to the foregoing, or permit any
additional shares of 1st United Common Stock to become subject to new grants of
employee or director stock options, other rights or similar stock-based employee
rights;
(c) (i) make, declare, pay or set aside for payment any dividend (other
than quarterly cash dividends in an amount not to exceed $0.11 per share and
dividends from wholly owned subsidiaries, except that if Wachovia increases its
regular quarterly dividend to an amount in excess of $0.40 per share, then 1st
United may increase, at its option, all future dividends in an amount
proportionate to the increase in the Wachovia dividend) on or in respect of, or
declare or make any distribution on, any shares of 1st United stock or (ii)
directly or indirectly adjust, split, combine, redeem, reclassify, purchase or
otherwise acquire, any shares of capital stock;
(d) enter into or amend or renew any employment, consulting, severance or
similar agreements with any director, officer or employee of 1st United or its
subsidiaries, or grant any salary or wage increase or increase any employee
benefit, except (i) for normal individual increases in compensation to
employees, (ii) for other changes that are required by applicable law, (iii) to
satisfy previously disclosed contractual obligations or (iv) for grants of
awards to newly hired employees consistent with past practice;
(e) enter into, establish, adopt or amend (except as may be required by
applicable law or to satisfy previously disclosed contractual obligations) any
benefit plan in respect of any director, officer or employee of 1st United or
its subsidiaries, or take any action to accelerate the vesting or exercisability
of stock options, restricted stock or other compensation or benefits payable
thereunder;
(f) sell, transfer, mortgage, encumber or otherwise dispose of or
discontinue any of its assets, deposits, business or properties except in the
ordinary course of business and in a transaction that is not material;
(g) acquire all or any portion of the assets, business, deposits or
properties of any other entity except in the ordinary course of business and in
a transaction that is not material;
(h) amend its or any subsidiary's articles or certificate of incorporation
or bylaws;
(i) implement or adopt any change in its accounting principles, practices
or methods, other than as may be required by generally accepted accounting
principles;
(j) except in the ordinary course of business consistent with past
practice, enter into or terminate any material contract or amend or modify in
any material respect any of its existing material contracts;
(k) settle any material claim, action or proceeding;
(l)(i) knowingly take any action reasonably likely to prevent or impede the
Merger from qualifying as a reorganization for tax purposes; or (ii) knowingly
take any action that is intended or is reasonably likely to result in (A) any of
its representations and warranties set forth in the Merger Agreement being or
becoming untrue, (B) any of the conditions to the Merger not being satisfied or
(C) a material violation of any provision of the Merger Agreement except, in
each case, as may be required by applicable law or regulation;
(m) except as required by applicable law or regulation, (i) implement or
adopt any material change in its interest rate and other risk management
policies, procedures or practices; (ii) fail to follow its existing policies or
practices with respect to managing its exposure to interest rate and other risk;
or (iii) fail to use commercially reasonable means to avoid any material
increase in its aggregate exposure to interest rate risk;
(n) incur any indebtedness for borrowed money other than in the ordinary
course of business; or
(o) agree or commit to do any of the foregoing.
In addition, 1st United has agreed that it shall not, and shall cause its
subsidiaries and its subsidiaries' officers, directors, agents, advisers and
affiliates not to, solicit or encourage inquiries or proposals with respect to,
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or except to the extent legally required for the discharge by the 1st United
Board of its fiduciary duties as advised in writing by its counsel, engage in
any negotiations concerning, or provide any confidential information to, or have
any discussions with, any person relating to, any tender or exchange offer,
proposal for a merger, consolidation or other business combination involving 1st
United or any of its subsidiaries or any proposal or offer to acquire in any
manner a substantial equity interest in, or a substantial portion of the assets
or deposits of, 1st United or any of its subsidiaries, other than the
transactions contemplated by the Merger Agreement (an "Acquisition Proposal").
In the Merger Agreement, 1st United agreed to cease and cause to be terminated
any activities, discussions or negotiations conducted prior to the date of the
Merger Agreement with any parties other than Wachovia with respect to any of the
foregoing and agreed to use its reasonable best efforts to enforce any
confidentiality or similar agreement relating to an Acquisition Proposal. 1st
United has agreed to promptly (within 24 hours) advise Wachovia following the
receipt by 1st United of any Acquisition Proposal and the substance thereof, and
immediately advise Wachovia of any significant developments with respect to any
Acquisition Proposal.
WACHOVIA. Wachovia has agreed in the Merger Agreement, unless the prior
written consent of 1st United is obtained, and except as otherwise contemplated
by the Merger Agreement, not to, and cause each of its subsidiaries not to:
(a) make, declare, pay or set aside for payment any extraordinary dividend;
or
(b)(i) take any action that would materially impair its ability to
consummate the Merger; (ii) take any action reasonably likely to prevent or
impede the Merger from qualifying as a reorganization for tax purposes; or (iii)
knowingly take any action that is intended or is reasonably likely to result in
(A) any of its representations and warranties set forth in the Merger Agreement
being or becoming untrue, (B) any of the conditions to the Merger not being
satisfied or (C) a material violation of any provision of the Merger Agreement
except, in each case, as may be required by applicable law or regulation;
PROVIDED, HOWEVER, that nothing contained in the Merger Agreement limits the
ability of Wachovia to exercise its rights under the Stock Option Agreement.
EXPENSES AND FEES
The Merger Agreement provides that each party shall be responsible for all
expenses incurred by it in connection with the negotiation and consummation of
the transactions contemplated by the Merger Agreement, except that Wachovia and
1st United have agreed to share equally all Commission filing fees and all
printing expenses payable in connection with the Registration Statement and this
Proxy Statement/Prospectus.
ACCOUNTING TREATMENT
The Merger is anticipated to be accounted for as a "purchase", as that term
is used under generally accepted accounting principles, for accounting and
financial reporting purposes. Under purchase accounting, the assets and
liabilities of 1st United as of the Effective Time will be recorded at their
respective fair values and added to those of Wachovia. Financial statements of
Wachovia issued after the Effective Time would reflect such values and would not
be restated retroactively to reflect the historical financial position or
results of operations of 1st United.
DISSENTERS' RIGHTS
Under the Florida Business Corporation Act, holders of 1st United Common
Stock have no dissenters' rights in connection with the Merger.
STOCK EXCHANGE LISTING OF WACHOVIA COMMON STOCK
Wachovia has agreed to use its reasonable best efforts to list, prior to
the Effective Date, on the NYSE, subject to official notice of issuance, the
shares of Wachovia Common Stock to be issued to the holders of 1st United Common
Stock in the Merger.
RESALES OF WACHOVIA COMMON STOCK
The shares of Wachovia Common Stock issued in connection with the Merger
will be freely transferable under the Securities Act, except for shares issued
to any shareholder who may be deemed to be an "affiliate" (generally including,
without limitation, directors, certain executive officers, and beneficial owners
of 10% or
30
<PAGE>
more of any class of capital stock) of 1st United for purposes of Rule 145 under
the Securities Act as of the date of the Special Meeting. Such affiliates may
not sell their shares of Wachovia Common Stock acquired in connection with the
Merger except pursuant to an effective registration statement under the
Securities Act or other applicable exemption from the registration requirements
of the Securities Act.
1st United has agreed in the Merger Agreement to use its reasonable best
efforts to cause each person who may be deemed to be an "affiliate" of 1st
United to execute and deliver to Wachovia an agreement pursuant to which such
person agrees, among other things, not to offer to sell, transfer or otherwise
dispose of any of the shares of Wachovia Common Stock distributed to them
pursuant to the Merger except in compliance with Rule 145 under the Securities
Act, or in a transaction that, in the opinion of counsel reasonably satisfactory
to Wachovia, is otherwise exempt from the registration requirements of the
Securities Act, or in an offering which is registered under the Securities Act.
Wachovia may place restrictive legends on certificates representing Wachovia
Common Stock issued to all persons who are deemed to be "affiliates" of 1st
United under Rule 145. This Proxy Statement/Prospectus does not cover resales of
Wachovia Common Stock received by any person who may be deemed to be an
affiliate of 1st United.
STOCK OPTION AGREEMENT
As a condition and an inducement to Wachovia's entering into the Merger
Agreement, 1st United entered into the Stock Option Agreement with Wachovia. The
following description of the Stock Option Agreement is qualified in its entirety
by reference to the text of such Stock Option Agreement, a copy of which is
attached as Appendix B and which is incorporated herein by reference.
Pursuant to the Stock Option Agreement, 1st United granted Wachovia the
Option, which permits Wachovia to purchase up to 2,020,000 shares of 1st United
Common Stock (the "Option Shares"), subject to adjustment in certain cases as
described below but in no event exceeding 19.9% of the number of shares of 1st
United Common Stock outstanding immediately before exercise of the Option. The
exercise price of the Option is $18.75 per share, subject to adjustment under
specified circumstances (such exercise price, as so adjusted, being referred to
herein as the "Option Price").
The Option will become exercisable in whole or in part if both an "Initial
Triggering Event" and a "Subsequent Triggering Event" occur with respect to 1st
United prior to the occurrence of an "Exercise Termination Event," as such terms
are defined below. The purchase of any shares of 1st United Common Stock
pursuant to the Option is subject to compliance with applicable law, including
the receipt of necessary approvals under the BHC Act. If Wachovia were to
exercise its right to acquire the full 19.9% of the number of shares outstanding
of 1st United Common Stock subject to the Option, Wachovia would hold
approximately 16.6% of the outstanding shares of 1st United Common Stock
immediately after such exercise.
The Stock Option Agreement generally defines the term "Initial Triggering
Event" to mean any of the following events or transactions:
(i) 1st United or 1st United Bank, without Wachovia's prior written
consent, enters into an agreement to engage in an "Acquisition Transaction"
(as defined below) with a third party or the 1st United Board recommends
that the shareholders of 1st United approve or accept any Acquisition
Transaction, other than as contemplated by the Merger Agreement;
(ii) A third party shall have acquired beneficial ownership or the
right to acquire beneficial ownership of 10% or more of the outstanding
shares of 1st United Common Stock;
(iii) The shareholders of 1st United shall have voted and failed to
approve the Merger Agreement at 1st United's shareholder meeting or such
meeting has not been held in violation of the Merger Agreement or has been
canceled prior to termination of the Merger Agreement if, prior to such
shareholder meeting (or if such shareholder meeting shall not have been
held or shall have been canceled, prior to such termination), it shall have
been publicly announced that any third party shall have made, or disclosed
an intention to make, a proposal to engage in an Acquisition Transaction
with respect to 1st United;
(iv) The 1st United Board withdraws or modifies (or publicly announces
its intention to withdraw or modify) in any manner adverse to Wachovia its
recommendation that the shareholders of 1st United approve the Merger
Agreement at 1st United's shareholder meeting, or 1st United, without
Wachovia's prior written
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<PAGE>
consent, authorizes, recommends or proposes (or publicly announces its
intention to authorize, recommend or propose) an agreement to engage in an
Acquisition Transaction with a third party;
(v) A third party makes a proposal to 1st United or its shareholders
to engage in an Acquisition Transaction and such proposal shall have been
publicly announced;
(vi) A third party shall have filed with the Commission a registration
statement with respect to a potential exchange or tender offer that would
constitute an Acquisition Transaction (or filed a preliminary proxy
statement with the Commission with respect to a potential vote by its
shareholders to approve the issuance of shares to be offered in such an
exchange or tender offer);
(vii) 1st United willfully breaches any covenant or obligation
contained in the Merger Agreement in anticipation of engaging in an
Acquisition Transaction, and following such breach Wachovia would be
entitled to terminate the Merger Agreement (whether immediately or after
the giving of notice or passage of time or both); or
(viii) A third party files an application or notice with the Federal
Reserve Board or other federal or state bank regulatory or antitrust
authority, which application or notice has been accepted for processing,
for approval to engage in an Acquisition Transaction.
As used in the Stock Option Agreement, the term "Acquisition Transaction"
means (i) a merger or consolidation or any similar transaction, involving 1st
United or 1st United Bank (other than mergers, consolidations or similar
transactions involving solely 1st United and/or one or more of its wholly-owned
subsidiaries, provided that any such transaction is not entered into in
violation of the terms of the Merger Agreement), (ii) a purchase, lease or other
acquisition of all or substantially all of the assets or deposits of 1st United
or 1st United Bank or (iii) a purchase or other acquisition (including by
merger, consolidation, share exchange or otherwise) of securities representing
10% or more of the voting power of 1st United or 1st United Bank.
The Stock Option Agreement generally defines the term "Subsequent
Triggering Event" to mean any of the following events or transactions: (i) the
acquisition by a third party of beneficial ownership of 20% or more of the then
outstanding 1st United Common Stock or (ii) 1st United or any of its
subsidiaries, without having received the prior written consent of Wachovia,
enters into an agreement to engage in an Acquisition Transaction with a third
party or the 1st United Board recommends that the shareholders of 1st United
approve or accept any Acquisition Transaction, other than as contemplated by the
Merger Agreement; provided, that for purposes of the definition of "Subsequent
Triggering Event," the percentage referred to in clause (iii) of the definition
of "Acquisition Transaction" above shall be 20% rather than 10%.
The Stock Option Agreement defines the term "Exercise Termination Event" to
mean any of (i) the Effective Time; (ii) termination of the Merger Agreement in
accordance with its terms, if such termination occurs prior to the occurrence of
an Initial Triggering Event, except a termination by Wachovia if 1st United
breaches, and does not timely cure any breach of, a representation, warranty,
covenant or other agreement contained in the Merger Agreement and such breach,
individually or in the aggregate, would be reasonably likely to result in a
Material Adverse Effect (as defined in the Merger Agreement) or if the 1st
United Board has failed to recommend approval of the Merger, if necessary, or
has withdrawn, modified or changed such recommendation (see " -- Amendment,
Waiver and Termination") or a termination by either Wachovia or 1st United if
the 1st United shareholders fail to approve the Merger; or (iii) the passage of
18 months, subject to extension in order to obtain required regulatory
approvals, to comply with applicable regulatory waiting periods or to avoid
liability under Section 16(b) of the Exchange Act, after termination of the
Merger Agreement if such termination follows the occurrence of an Initial
Triggering Event or is a termination described in clause (ii) above.
Notwithstanding anything to the contrary contained in the Stock Option
Agreement, the Option may not be exercised at any time when Wachovia is in
breach of any of its covenants or agreements contained in the Merger Agreement
such that 1st United shall be entitled to terminate the Merger Agreement
pursuant to the terms thereof, and the Stock Option Agreement shall
automatically terminate upon the termination of the Merger Agreement by 1st
United pursuant to the terms thereof as a result of a breach by Wachovia of its
covenants or agreements contained therein.
If the Option becomes exercisable, it may be exercised in whole or in part
within six months following the applicable Subsequent Triggering Event.
Wachovia's right to exercise the Option and certain other rights under the Stock
Option Agreement are subject to an extension in order to obtain required
regulatory approvals and
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<PAGE>
comply with applicable regulatory waiting periods and to avoid liability under
Section 16(b) of the Exchange Act. The Option Price and the number of shares
issuable under the Option are subject to adjustment in the event of specified
changes in the capital stock of 1st United.
Upon the occurrence of a Subsequent Triggering Event that occurs prior to
an Exercise Termination Event, Wachovia will have certain registration rights
with respect to the shares of 1st United Common Stock issued or issuable
pursuant to the Option.
The Stock Option Agreement also provides that at any time after the
occurrence of a "Repurchase Event" (as defined below), upon request, 1st United
shall be obligated to repurchase the Option and all or any part of the Option
Shares. Such repurchase of the Option shall be at a price per share equal to the
amount by which the "Market/Offer Price" (as defined below) exceeds the Option
Price (as adjusted). A repurchase of Option Shares shall be at a price per share
equal to the Market/Offer Price. The term "Market/Offer Price" means the highest
of (i) the price per share at which a tender or exchange offer has been made for
1st United Common Stock, (ii) the price per share of 1st United Common Stock
that any third party is to pay pursuant to an agreement with 1st United, (iii)
the highest closing price per share of 1st United Common Stock within the
six-month period immediately preceding the date that notice to repurchase is
given or (iv) in the event of a sale of all or substantially all of 1st United
assets or deposits, the sum of the price paid for such assets or deposits and
the current market value of the remaining assets (as determined by a nationally
recognized investment banking firm), divided by the number of shares of 1st
United Common Stock outstanding at the time of such sale. The term "Repurchase
Event" is defined to mean (i) the acquisition by any third party of beneficial
ownership of 50% or more of the outstanding shares of 1st United Common Stock or
(ii) the consummation of an Acquisition Transaction; provided, that for purposes
of the definition of "Repurchase Event," the percentage referred to in clause
(iii) of the definition of "Acquisition Transaction" above shall be 50% rather
than 10%.
The Stock Option Agreement also provides that Wachovia may, at any time
following a Repurchase Event and prior to an Exercise Termination Event,
surrender the Option (and any Option Shares obtained upon the exercise thereof
and still held by Wachovia) for a cash surrender fee (the "Surrender Fee") equal
to $5 million (i) plus, if applicable, Wachovia's purchase price actually paid
with respect to any Option Shares and (ii) minus, if applicable, any net cash
received pursuant to the sale of Option Shares to any third party (less the
purchase price of such Option Shares). Wachovia may not exercise its right to
surrender the Option and receive the Surrender Fee if 1st United has previously
repurchased any Option Shares as described in the preceding paragraph.
Pursuant to the terms of the Stock Option Agreement, in the event that,
prior to an Exercise Termination Event, 1st United enters into certain
transactions in which 1st United is not the surviving corporation, certain
fundamental changes in the capital stock of 1st United occur or 1st United sells
all or substantially all of its or certain of its subsidiaries' assets, the
Option will be converted into a substitute option (the "Substitute Option"),
with terms similar to those of the Option, to purchase capital stock of the
entity that is the effective successor to 1st United.
The Stock Option Agreement provides that neither Wachovia nor 1st United
may assign any of its rights or obligations thereunder without the written
consent of the other party, except that in the event an Initial Triggering Event
occurs prior to an Exercise Termination Event, Wachovia may, subject to certain
limitations, assign its rights and obligations thereunder in whole or in part
(subject to extension in certain cases).
Arrangements such as the Stock Option Agreement are customarily entered
into in connection with corporate mergers and acquisitions in an effort to
increase the likelihood that the transactions will be consummated in accordance
with their terms, and to compensate the grantee for the efforts undertaken and
the expenses, losses and opportunity costs incurred by it in connection with the
transactions if they are not consummated under certain circumstances involving
an acquisition or potential acquisition of the issuer by a third party. The
Stock Option Agreement was entered into to accomplish these objectives. The
Stock Option Agreement may have the effect of discouraging offers by third
parties to acquire 1st United prior to the Merger, even if such persons were
prepared to offer to pay consideration to 1st United shareholders which has a
higher current market price than the shares of Wachovia Common Stock to be
received by such holders pursuant to the Merger Agreement.
To the best knowledge of 1st United and Wachovia, no event giving rise to
the right to exercise the Option has occurred as of the date of this Proxy
Statement/Prospectus.
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<PAGE>
SHAREHOLDER AGREEMENTS
As a condition and an inducement to Wachovia's entering into the Merger
Agreement, certain directors (and certain related entities and family members)
of 1st United who hold approximately 27.6% of the outstanding shares of 1st
United Common Stock, agreed to vote all such shares in favor of approval of the
Merger Agreement. A copy of the Shareholder Agreement executed by such directors
is attached hereto as Appendix C. Such shareholders have also agreed to take all
reasonable actions to consummate the Merger and not to sell any shares owned by
them unless the buyer also agrees to vote such shares in favor of approval of
the Merger Agreement. Accordingly, assuming such shares are so voted, approval
of the Merger Agreement will require the affirmative vote of the holders of
approximately an additional 23% of the outstanding shares of 1st United Common
Stock in order for the Merger Agreement to be approved at the Special Meeting.
See "General Information -- Vote Required."
ACQUISITIONS
MERGER WITH JEFFERSON BANKSHARES, INC.
On June 10, 1997, Wachovia entered into a merger agreement with Jefferson,
the parent of Jefferson National Bank in Charlottesville, Virginia, pursuant to
which Jefferson will be merged with and into Wachovia. At the effective time of
the Jefferson Merger, each outstanding share of common stock of Jefferson
("Jefferson Common Stock") will be converted into the right to receive 0.625 of
a share of Wachovia Common Stock. In connection with the Jefferson Merger,
Jefferson has granted Wachovia a stock option to purchase a number of shares of
Jefferson Common Stock up to 19.9% of the Jefferson Common Stock outstanding
immediately before exercise of the option, for a purchase price of $29.6875 per
share, subject to adjustment in certain circumstances. The boards of directors
of both companies have approved the Jefferson Merger.
Jefferson, headquartered in Charlottesville, Virginia, is a bank holding
company registered under the provisions of the BHC Act. At June 30, 1997,
Jefferson had assets of approximately $2.2 billion, deposits of approximately
$1.9 billion, and shareholders' equity of approximately $212 million. Net income
for the first six months ended June 30, 1997, was approximately $15 million and
approximately $27.8 million for the year ended December 31, 1996. With 96
offices and 60 ATMs, Jefferson is the fifth largest Virginia-based banking
company. Jefferson National Bank has the largest deposit share in
Charlottesville with additional branch presence in the Tidewater, Richmond,
Fredericksburg and Shenandoah Valley areas of Virginia. Jefferson provides a
wide variety of financial services to a broad customer base of individuals,
corporations, institutions and governments primarily located in Virginia.
The Jefferson Merger is expected to be accounted for as a purchase. The
Jefferson Merger is subject to the approval of the shareholders of Jefferson and
appropriate regulatory agencies and is expected to close in the fourth quarter
of 1997. On August 26, 1997, Wachovia received approval from the Federal Reserve
for the Jefferson Merger.
Additional information concerning the Jefferson Merger and financial
information relating to Jefferson are contained in Wachovia's Current Report on
Form 8-K dated June 9, 1997, which is incorporated by reference herein. See
"Available Information" and "Incorporation of Certain Information by Reference."
MERGER WITH CENTRAL FIDELITY BANKS, INC.
On June 23, 1997, Wachovia entered into a merger agreement with Central
Fidelity, pursuant to which Central Fidelity will be merged with and into
Wachovia, with Wachovia being the surviving corporation (the "Central Fidelity
Merger"). At the effective time of the Central Fidelity Merger, each outstanding
share of common stock of Central Fidelity (the "Central Fidelity Common Stock")
will be converted into the right to receive 0.63 of a share of Wachovia Common
Stock. In connection with the merger agreement, Central Fidelity has granted
Wachovia a stock option to purchase a number of shares of Central Fidelity
Common Stock up to 19.9% of the number of shares of Central Fidelity Common
Stock outstanding immediately before exercise of the option for a purchase price
of $32.19 per share, subject to adjustment in certain circumstances. The boards
of directors of both companies have approved the Central Fidelity Merger.
Central Fidelity, headquartered in Richmond, Virginia, is a bank holding
company registered under the provisions of the BHC Act. Central Fidelity, the
third largest banking company, serves Virginia markets primarily through its
wholly-owned banking subsidiary, Central Fidelity National Bank, a national
banking association.
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<PAGE>
Central Fidelity National Bank operates 248 branch offices, including 27
full-service supermarket locations, and 228 automated teller machines throughout
Virginia. At June 30, 1997, Central Fidelity had total assets of approximately
$10.67 billion, deposits of approximately $8.04 billion and shareholders' equity
of approximately $803 million. Net income for the first six months ended June
30, 1997 was $328.7 million. Central Fidelity, through Central Fidelity National
Bank and its other subsidiaries, provides a wide variety of financial services
to a broad customer base of individuals, corporations, institutions and
governments primarily located in Virginia.
The Central Fidelity Merger is expected to be accounted for as a pooling of
interests. Both Wachovia and Central Fidelity have rescinded their previously
announced share repurchase programs, including the repurchase of shares
announced in connection with the Jefferson Merger. Pursuant to the merger
agreement with Central Fidelity, Wachovia will add three current members of the
Central Fidelity board of directors to the Wachovia Board. The Central Fidelity
Merger is subject to the approval of the shareholders of Central Fidelity and
appropriate regulatory agencies, including the Federal Reserve Board, and is
expected to close in the fourth quarter of 1997.
In connection with the announcement of the Central Merger, Wachovia
announced that it estimated that the Central Fidelity Merger (after giving
effect to the Jefferson Merger) would be accretive to Wachovia's reported
earnings per share in 1999 by 4%. This estimate includes Wachovia's current
estimates of cost savings equal to 30% of Central Fidelity's operating expenses
and revenue enhancements equal to at least 10% of non-interest income. Wachovia
estimates it will incur a $174 million pretax charge in connection with the
Merger, including a one-time charge of $117 million in 1997 and a charge of $57
million to be expensed in 1998.
Additional information concerning the Central Fidelity Merger and financial
information relating to Central Fidelity are contained in Wachovia's Current
Reports on Form 8-K dated June 23, 1997 and September 8, 1997, each of which is
incorporated by reference herein. See "Available Information" and "Incorporation
of Certain Information by Reference."
ACQUISITIONS GENERALLY
Wachovia regularly evaluates acquisition opportunities and conducts due
diligence activities in connection with possible acquisitions. As a result,
acquisition discussions and, in some cases, negotiations may take place and
future acquisitions involving cash, debt or equity securities may occur.
Acquisitions typically involve the payment of a premium over book and market
values, and, therefore, some dilution of Wachovia's book value and net income
per common share may occur in connection with any future transactions.
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<PAGE>
WACHOVIA AND CENTRAL FIDELITY UNAUDITED
PRO FORMA COMBINED FINANCIAL INFORMATION
The following Unaudited Pro Forma Combined Financial Information combines
the historical Consolidated Financial Statements of Wachovia and Central
Fidelity, giving effect to the Central Fidelity Merger as if it had been
effective on June 30, 1997, with respect to the Unaudited Pro Forma Combined
Statement of Condition, and as of the beginning of the periods indicated herein,
with respect to the Unaudited Pro Forma Combined Statements of Income. The
Central Fidelity Merger will be accounted for as a pooling-of-interests. Under
the pooling-of-interests method of accounting, the historical book values of the
assets, liabilities and shareholders' equity of Central Fidelity as reported on
its consolidated Statement of Condition will be carried over onto the
consolidated Statement of Condition of Wachovia after addressing conformity
issues, and no goodwill or other intangible assets will be created. Wachovia
will include in its consolidated statement of income the consolidated results of
operations of Central Fidelity for the entire fiscal year in which the Central
Fidelity Merger occurs after addressing conformity issues and will combine and
restate its results of operations for prior periods to include the reported
consolidated results of operations of Central Fidelity for prior periods after
addressing conformity issues. This information should be read in conjunction
with the historical Consolidated Financial Statements of Wachovia and Central
Fidelity, including their respective notes thereto, which are incorporated by
reference into this Proxy Statement/Prospectus. The effect of estimated merger
and restructuring costs expected to be incurred in connection with the Central
Fidelity Merger has been reflected in the Unaudited Pro Forma Combined Statement
of Condition; however, since the estimated costs are nonrecurring, they have not
been reflected in the Unaudited Pro Forma Combined Statements of Income. The
Unaudited Pro Forma Combined Financial Information does not give effect to any
anticipated cost savings in connection with the Central Fidelity Merger. The
Unaudited Pro Forma Combined Statement of Condition is not necessarily
indicative of the actual financial position that would have existed had the
Central Fidelity Merger been consummated on the dates indicated, or that may
exist in the future. The Unaudited Pro Forma Combined Statements of Income are
not necessarily indicative of the results that would have occurred had the
Central Fidelity Merger been consummated on the dates indicated or that may be
achieved in the future.
No pro forma financial statements are included in this Proxy
Statement/Prospectus with respect to the Merger because the pro forma effects of
the Merger are not material to Wachovia's consolidated financial statements.
Accordingly, such information is also immaterial to an understanding of the
proposed Merger by the shareholders of 1st United.
In connection with the announcement of the Merger, Wachovia announced that
it estimated that the Merger will be accretive to reported earnings per share in
1998. This estimate includes Wachovia's current estimates of cost savings equal
to 20% of 1st United's operating expenses and revenue enhancements equal to at
least 10% of non-interest income. Wachovia estimates it will incur $3 million in
pretax integration expenses in connection with the Merger. In addition, in
connection with the Merger, Wachovia announced that it may repurchase up to 3.5
million shares issued pursuant to the Merger.
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<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF CONDITION
AS OF JUNE 30, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
CENTRAL PRO FORMA PRO FORMA
WACHOVIA FIDELITY ADJUSTMENTS COMBINED
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks........................... $ 3,392,418 $ 312,192 $ -- $ 3,704,610
Federal funds sold and other money market
investments..................................... 1,099,967 149,860 -- 1,249,827
Securities available for sale..................... 6,983,389 2,967,226 -- 9,950,615
Securities held to maturity....................... 1,271,149 -- -- 1,271,149
Loans............................................. 33,255,625 6,926,376 -- 40,182,001
Allowance for loan losses....................... (409,335) (110,000) -- (519,335)
Net loans......................................... 32,846,290 6,816,376 -- 39,662,666
Premises and equipment............................ 622,925 164,496 -- 787,421
Other assets...................................... 2,295,958 258,548 60,900(2) 2,615,406
TOTAL ASSETS............................... $ 48,512,096 $10,668,698 $ 60,900 $ 59,241,694
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand............................................ $ 10,345,408 $ 1,288,662 $ -- $ 11,634,070
Large denomination certificates................... 2,367,267 502,780 -- 2,870,047
Other............................................. 16,225,385 6,285,178 -- 22,510,563
Total deposits............................. 28,938,060 8,076,620 -- 37,014,680
Federal funds purchased and securities sold under
repurchase agreements........................... 6,253,688 1,065,467 -- 7,319,155
Other liabilities................................. 9,640,521 723,046 174,000(2) 10,537,567
Total liabilities.......................... 44,832,269 9,865,133 174,000 54,871,402
Shareholders' Equity:
Preferred stock................................... -- -- -- --
Common stock...................................... 797,698 283,623 (104,940)(1) 976,381
Capital surplus................................... 185,500 108,484 104,940(1) 398,924
Retained earnings................................. 2,660,914 402,844 (113,100)(2) 2,950,658
Unrealized gains (losses) on securities available
for sale, net of tax............................ 35,715 8,614 -- 44,329
Total shareholders' equity...................... 3,679,827 803,565 (113,100) 4,370,292
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...... $ 48,512,096 $10,668,698 $ 60,900 $ 59,241,694
</TABLE>
See "Notes to Unaudited Pro Forma Combined Financial Information."
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<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
CENTRAL PRO FORMA PRO FORMA
WACHOVIA FIDELITY ADJUSTMENTS COMBINED
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans................................ $1,361,985 $300,376 $ -- $1,662,361
Securities available for sale............................. 228,005 95,851 -- 323,856
Securities held to maturity............................... 52,245 -- -- 52,245
Other interest income..................................... 32,790 2,415 -- 35,205
Total interest income.............................. 1,675,025 398,642 -- 2,073,667
INTEREST EXPENSE
Total deposits............................................ 478,367 155,868 -- 634,235
Short-term borrowings..................................... 200,958 24,854 -- 225,812
Other..................................................... 176,989 18,463 -- 195,452
Total interest expense............................. 856,314 199,185 -- 1,055,499
Net interest income....................................... 818,711 199,457 -- 1,018,168
Provision for loan losses................................. 97,713 27,565 -- 125,278
Net interest income after provision for loan losses....... 720,998 171,892 -- 892,890
OTHER INCOME
Fees for trust services................................... 75,226 9,292 -- 84,518
Service charges on deposit accounts....................... 127,564 20,691 -- 148,255
Investment securities gains (losses)...................... 661 1,881 -- 2,542
Other income.............................................. 231,780 17,904 -- 249,684
Total non-interest income.......................... 435,231 49,768 -- 484,999
OTHER EXPENSE
Salaries and employee benefits............................ 355,754 74,924 -- 430,678
Net occupancy and equipment expense....................... 102,975 24,672 -- 127,647
Other expense............................................. 220,101 30,774 -- 250,875
Total non-interest expense......................... 678,830 130,370 -- 809,200
Income before income taxes................................ 477,399 91,290 -- 568,689
Income taxes.............................................. 148,694 29,715 -- 178,409
NET INCOME................................................ $ 328,705 $ 61,575 $ -- $ 390,280
Net income per primary share.............................. $ 2.00 $ 1.06 $ 1.94
Weighted average primary shares outstanding............... 164,145 58,068 200,728
Net income per fully diluted share........................ $ 2.00 $ 1.03 $ 1.94
Weighted average fully diluted shares outstanding......... 164,158 59,557 201,679
</TABLE>
See "Notes to Unaudited Pro Forma Combined Financial Information."
38
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
CENTRAL PRO FORMA PRO FORMA
WACHOVIA FIDELITY ADJUSTMENTS COMBINED
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans................................ $2,544,658 $570,615 $ -- $3,115,273
Securities available for sale............................. 472,108 212,875 -- 684,983
Securities held to maturity............................... 117,548 -- -- 117,548
Other interest income..................................... 93,000 5,130 -- 98,130
Total interest income.............................. 3,227,314 788,620 -- 4,015,934
INTEREST EXPENSE
Total Deposits............................................ 881,562 322,187 -- 1,203,749
Short-term borrowings..................................... 431,094 51,250 -- 482,344
Other..................................................... 359,946 39,916 -- 399,862
Total interest expense............................. 1,672,602 413,353 -- 2,085,955
Net interest income....................................... 1,554,712 375,267 -- 1,929,979
Provision for loan losses................................. 149,911 43,865 -- 193,776
Net interest income after provision for loan losses....... 1,404,801 331,402 -- 1,736,203
OTHER INCOME
Service charges on deposit accounts....................... 242,368 37,832 -- 280,200
Fees for trust services................................... 137,841 16,780 -- 154,621
Investment securities gains (losses)...................... 3,736 99 -- 3,835
Other income.............................................. 403,705 31,204 -- 434,909
Total other income................................. 787,650 85,915 -- 873,565
OTHER EXPENSE
Salaries and employee benefits............................ 654,525 142,347 -- 796,872
Net occupancy and equipment expense....................... 204,443 46,147 -- 250,590
Other expense............................................. 398,581 63,447 -- 462,028
Total other expense................................ 1,257,549 251,941 -- 1,509,490
Income before income taxes................................ 934,902 165,376 -- 1,100,278
Income tax expense........................................ 290,345 52,674 -- 343,019
NET INCOME................................................ $ 644,557 $112,702 $ -- $ 757,259
Net income per primary share.............................. $ 3.81 $ 1.89 $ 3.66
Weighted average primary shares outstanding............... 169,094 59,737 206,728
Net income per fully diluted share........................ $ 3.80 $ 1.85 $ 3.64
Weighted average fully diluted shares outstanding......... 169,827 60,758 208,105
</TABLE>
See "Notes to Unaudited Pro Forma Combined Financial Information."
39
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
CENTRAL PRO FORMA PRO FORMA
WACHOVIA FIDELITY ADJUSTMENTS COMBINED
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans................................ $2,384,919 $526,896 $ -- $2,911,815
Securities available for sale............................. 268,106 239,010 -- 507,116
Securities held to maturity............................... 294,241 -- -- 294,241
Other interest income..................................... 72,464 6,014 -- 78,478
Total interest income.............................. 3,019,730 771,920 -- 3,791,650
INTEREST EXPENSE
Total deposits............................................ 823,454 319,725 -- 1,143,179
Short-term borrowings..................................... 467,007 61,037 -- 528,044
Other..................................................... 288,646 51,533 -- 340,179
Total interest expense............................. 1,579,107 432,295 -- 2,011,402
Net interest income....................................... 1,440,623 339,625 -- 1,780,248
Provision for loan losses................................. 103,791 26,713 -- 130,504
Net interest income after provision for loan losses....... 1,336,832 312,912 -- 1,649,744
OTHER INCOME
Service charges on deposit accounts....................... 209,113 35,150 -- 244,263
Fees for trust services................................... 130,521 14,943 -- 145,464
Gain on sale of mortgage servicing portfolio.............. 79,025 -- -- 79,025
Investment securities gains (losses)...................... (23,494) 3,253 -- (20,241)
Other income.............................................. 340,467 26,329 -- 366,796
Total other income................................. 735,632 79,675 -- 815,307
OTHER EXPENSE
Salaries and employee benefits............................ 600,326 133,186 -- 733,512
Net occupancy and equipment expense....................... 196,806 42,979 -- 239,785
Other expense............................................. 406,464 62,000 -- 468,464
Total other expense................................ 1,203,596 238,165 -- 1,441,761
Income before income taxes................................ 868,868 154,422 -- 1,023,290
Income tax expense........................................ 266,325 49,052 -- 315,377
NET INCOME................................................ $ 602,543 $105,370 $ -- $ 707,913
Net income per primary share.............................. $ 3.50 $ 1.77 $ 3.38
Weighted average primary shares outstanding............... 172,089 59,674 209,684
Net income per fully diluted share........................ $ 3.49 $ 1.74 $ 3.35
Weighted average fully diluted shares outstanding......... 172,957 60,573 211,118
</TABLE>
See "Notes to Unaudited Pro Forma Combined Financial Information."
40
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
CENTRAL PRO FORMA PRO FORMA
WACHOVIA FIDELITY ADJUSTMENTS COMBINED
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans................................ $1,864,082 $440,691 $ -- $2,304,773
Securities available for sale............................. 182,440 217,945 400,385
Securities held to maturity............................... 273,813 -- -- 273,813
Other interest income..................................... 41,959 6,161 48,120
Total interest income.............................. 2,362,294 664,797 -- 3,027,091
INTEREST EXPENSE
Total deposits............................................ 539,232 243,632 -- 782,864
Short-term borrowings..................................... 272,572 45,834 -- 318,406
Other..................................................... 226,584 41,225 -- 267,809
Total interest expense............................. 1,038,388 330,691 -- 1,369,079
Net interest income....................................... 1,323,906 334,106 -- 1,658,012
Provision for loan losses................................. 71,763 24,359 -- 96,122
Net interest income after provision for loan losses....... 1,252,143 309,747 -- 1,561,890
OTHER INCOME
Service charges on deposit accounts....................... 196,149 34,557 -- 230,706
Fees for trust services................................... 128,100 13,926 -- 142,026
Investment securities gains (losses)...................... 3,320 (25,984) -- (22,664)
Other income.............................................. 280,183 36,739 -- 316,922
Total other income................................. 607,752 59,238 -- 666,990
OTHER EXPENSE
Salaries and employee benefits............................ 563,507 127,683 -- 691,190
Net occupancy and equipment expense....................... 187,419 41,653 -- 229,072
Other expense............................................. 347,487 75,729 -- 423,216
Total other expense................................ 1,098,413 245,065 -- 1,343,478
Income before income taxes................................ 761,482 123,920 -- 885,402
Income tax expense........................................ 222,424 39,056 -- 261,480
NET INCOME................................................ $ 539,058 $ 84,864 $ -- $ 623,922
Net income per primary share.............................. $ 3.13 $ 1.45 $ 2.98
Weighted average primary shares outstanding............... 172,339 58,742 209,346
Net income per fully diluted share........................ $ 3.12 $ 1.42 $ 2.96
Weighted average fully diluted shares outstanding......... 172,951 59,861 210,663
</TABLE>
See "Notes to Unaudited Pro Forma Combined Financial Information."
41
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
(1) Pursuant to the Central Fidelity Merger Agreement, each outstanding share of
Central Fidelity Common Stock (56,724,684 shares at June 30, 1997) will be
converted into 0.63 of a share of Wachovia Common Stock (35,736,551 at June
30, 1997), subject to adjustment in the event of stock dividends, stock
splits or similar changes in Wachovia's capitalization.
(2) Reflects Wachovia management's current estimate, for purposes of pro forma
presentation, of the aggregate estimated merger and restructuring costs of
$174 million ($113 million net of taxes) expected to be incurred in
connection with the Central Fidelity Merger. While a portion of these costs
may be required to be recognized over time, the current estimate of these
costs has been recorded in the Pro Forma Combined Statement of Condition in
order to disclose the aggregate effect of these activities on Wachovia's pro
forma combined financial position. The estimated aggregate costs, primarily
comprised of anticipated cash charges, include the following:
<TABLE>
<CAPTION>
(IN MILLIONS)
<S> <C>
Personnel.............................................................. $ 43
Systems and operations................................................. 67
Business unit integration and branch conversions....................... 34
Other.................................................................. 30
$ 174
</TABLE>
The personnel costs include costs of staff reductions, comprising employee
severance costs, termination of certain employee benefit plans and employee
assistance costs for separated employees resulting from reorganizations in
connection with the Central Fidelity Merger. Systems and operations costs
include costs associated with the elimination of redundant systems, including
service contract terminations and other related costs of computer equipment
and software write-offs due to duplication or incompatibility, and costs of
transitioning customer accounts to a common system. Business unit integration
and branch conversion costs consist of business unit consolidation expenses,
lease termination and other costs associated with the closing and disposition
of redundant branches and marketing and communications costs. Other expense
includes transaction costs and other expenses directly associated with
completing the Central Fidelity Merger. Wachovia anticipates that the
majority of these costs, primarily comprised of cash charges, will be paid in
1997 and 1998.
Management's cost estimates are forward looking. While the costs represent
management's current estimate of merger and restructuring costs that will be
incurred, the ultimate level and timing of recognition of such costs will be
based on the final merger and integration plan to be completed prior to
consummation of the Central Fidelity Merger, which is currently being
developed by various Wachovia and Central Fidelity task forces and
integration committees. Readers are cautioned that the completion of the
Central Fidelity Merger and integration plan and the resulting management
plans detailing actions to be undertaken to effect the Central Fidelity
Merger will impact these estimates; the type and amount of actual costs
incurred could vary materially from these estimates if future developments
differ from the underlying assumptions used by management in determining its
current estimate of these costs. See the statement regarding forward looking
statements in "Incorporation of Certain Information by Reference."
42
<PAGE>
DESCRIPTION OF WACHOVIA CAPITAL STOCK
THE DESCRIPTIVE INFORMATION BELOW OUTLINES CERTAIN PROVISIONS OF WACHOVIA'S
ARTICLES OF INCORPORATION AND BYLAWS AND THE NORTH CAROLINA BUSINESS CORPORATION
ACT. THE INFORMATION DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ALL
RESPECTS BY REFERENCE TO THE PROVISIONS OF WACHOVIA'S ARTICLES OF INCORPORATION
AND BYLAWS, WHICH ARE INCORPORATED BY REFERENCE AS EXHIBITS TO THE REGISTRATION
STATEMENT, AND THE NORTH CAROLINA BUSINESS CORPORATION ACT. SEE "AVAILABLE
INFORMATION."
GENERAL
Wachovia's authorized capital stock consists of 500,000,000 shares of
Wachovia Common Stock and 50,000,000 shares of preferred stock, par value $5.00
per share (the "Wachovia Preferred Stock"). As of June 30, 1997, there were
159,539,560 shares of Wachovia Common Stock outstanding and no shares of
Wachovia Preferred Stock outstanding. In addition, at July 31, 1997, 22,219,602
shares of Wachovia Common Stock were reserved for issurance upon conversion of
notes, exercise of stock options and awards and under Wachovia's dividend
reinvestment plan. In addition, Wachovia estimates that 47,723,000 shares of
Wachovia Common Stock will be issued in connection with the Merger, the Central
Fidelity Merger and the Jefferson Merger.
Because Wachovia is a holding company, the rights of Wachovia to
participate in any distribution of assets of any subsidiary upon its liquidation
or reorganization or otherwise (and thus the ability of Wachovia's shareholders
to benefit indirectly from such distribution) would be subject to the prior
claims of creditors of that subsidiary, except to the extent that Wachovia
itself may be a creditor of that subsidiary with recognized claims. Claims on
Wachovia's subsidiaries by creditors other than Wachovia will include
substantial obligations with respect to deposit liabilities and purchased funds.
PREFERRED STOCK
The Wachovia Board is authorized to fix the preferences, limitations and
relative rights of the Wachovia Preferred Stock and may establish series of such
Wachovia Preferred Stock and determine the variations between series, and may
cause Wachovia to issue any such shares without the approval of the holders of
Wachovia Common Stock. If and when any Wachovia Preferred Stock is issued, the
holders of Wachovia Preferred Stock may have a preference over holders of
Wachovia Common Stock in the payment of dividends, upon liquidation of Wachovia,
in respect of voting rights and in the redemption of the capital stock of
Wachovia.
COMMON STOCK
DIVIDENDS. The holders of Wachovia Common Stock are entitled to share
ratably in dividends when and if declared by the Wachovia Board from funds
legally available therefor.
VOTING RIGHTS. Each holder of Wachovia Common Stock has one vote for each
share held on matters presented for consideration by the shareholders.
CLASSIFICATION OF BOARD OF DIRECTORS. The Wachovia Board is divided into
three classes, each serving three-year terms, so that approximately one-third of
the directors of Wachovia are elected at each annual meeting of the shareholders
of Wachovia. Classification of the Wachovia Board 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 Wachovia Board
and thereby could impede a change in control of Wachovia.
PREEMPTIVE RIGHTS. The holders of Wachovia Common Stock have no preemptive
rights to acquire any additional shares of Wachovia Common Stock.
ISSUANCE OF STOCK. Wachovia's articles of incorporation (the "Wachovia
Articles") authorize the Wachovia Board to issue authorized shares of Wachovia
Common Stock and Wachovia Preferred Stock and any other securities without
shareholder approval. However, Wachovia Common Stock is listed on the NYSE,
which requires shareholder approval of the issuance of additional shares of
Wachovia Common Stock under certain circumstances.
LIQUIDATION RIGHTS. In the event of liquidation, dissolution or winding-up
of Wachovia, whether voluntary or involuntary, the holders of Wachovia Common
Stock will be entitled to share ratably in any of its assets or funds that are
available for distribution to its shareholders after the satisfaction of its
liabilities (or after adequate provision is made therefor) and after preferences
of any outstanding Wachovia Preferred Stock.
43
<PAGE>
CHANGES IN CONTROL
Certain provisions of the Wachovia Articles and Wachovia's bylaws may have
the effect of preventing, discouraging or delaying any change in control of
Wachovia. The authority of the Wachovia Board to issue Wachovia Preferred Stock
with such rights and privileges as it may deem appropriate may enable the
Wachovia Board to prevent a change in control despite a shift in ownership of
the Wachovia Common Stock. In addition, the Wachovia Board's power to issue
additional shares of Wachovia Common Stock may help delay or deter a change in
control by increasing the number of shares needed to gain control. Moreover, the
classification of the Wachovia Board would delay the ability of a dissatisfied
shareholder or anyone who obtains a controlling interest in the Wachovia Common
Stock to elect its designees to a majority of the seats on the Wachovia Board.
The following provisions also may deter any change in control of Wachovia.
FAIR PRICE PROVISIONS. Certain provisions of the Wachovia Articles (the
"Fair Price Provisions") limit the ability of an Interested Shareholder to
effect certain transactions involving Wachovia. An "Interested Shareholder" is
defined in the Wachovia Articles to mean a shareholder who directly or
indirectly beneficially owns, alone or with associates or affiliates, more than
10% of the outstanding voting shares of Wachovia or a subsidiary of Wachovia,
and certain assignees of or successors to any share of capital stock of Wachovia
or a subsidiary which was at any time within two years prior thereto
beneficially owned by an Interested Shareholder. Such transactions, which are
referred to below collectively as a "Business Combination," include any merger
with or consolidation into an Interested Shareholder or an affiliate thereof,
any sale or other disposition of more than $25 million in assets to an
Interested Shareholder or an associate or affiliate thereof, any issuance or
transfer to any Interested Shareholder, or an associate or affiliate thereof, of
equity securities of Wachovia or a subsidiary having a fair market value of $10
million or more, any recapitalization or reclassification of Wachovia securities
or similar transaction increasing the percentage of outstanding shares owned by
an Interested Shareholder or an associate or affiliate thereof or any proposal
for liquidation or dissolution of Wachovia.
Under the Fair Price Provisions, a Business Combination must either (i) be
approved by the holders of at least 66 2/3% of the outstanding voting securities
of Wachovia and the holders of at least a majority of the outstanding shares of
Wachovia Common Stock not owned by the Interested Shareholder or (ii) comply
with either the Continuing Director (as defined below) approval requirements
described in this paragraph or the price requirements described in the following
paragraph, in which case a Business Combination must be approved by the
affirmative vote of a majority of the outstanding voting shares of Wachovia
entitled to vote thereon. Under the Continuing Director requirement, the
Business Combination must be approved by 66 2/3% of the "Continuing Directors,"
which consist of directors elected by shareholders of Wachovia prior to the
Interested Shareholder's acquisition of more than 10% of the voting securities
and any directors recommended to join the Wachovia Board by a majority of
directors so elected. These approval provisions are less stringent than those
contained in the North Carolina Shareholder Protection Act, which is not
applicable to Wachovia (see " -- Antitakeover Legislation"), but are more
stringent than the standard provisions of the North Carolina Business
Corporation Act, which would apply in the absence of the Fair Price Provisions.
Under the price requirements of the Fair Price Provisions, the price per
share paid in a Business Combination must be at least equal to the greater of
(i) the fair market value per share of Wachovia Common Stock on the date of the
first public announcement of the proposed Business Combination (the
"Announcement Date") or on the date on which the Interested Shareholder became
an Interested Shareholder, whichever is higher, multiplied by the ratio of (A)
the highest per share price paid by the Interested Shareholder for any shares of
Wachovia Common Stock acquired by it during the two-year period immediately
prior to the Announcement Date to (B) the fair market value per share of
Wachovia Common Stock on the first day during such two-year period on which the
Interested Shareholder acquired any shares of Wachovia Common Stock and (ii) the
highest per share price paid by such Interested Shareholder in acquiring any
shares of Wachovia Common Stock. In addition, the consideration paid for
Wachovia Common Stock in a Business Combination must be either cash or the same
form of consideration paid by the Interested Shareholder to acquire its shares
of Wachovia Common Stock. Moreover, the Interested Shareholder must not (i)
have, directly or indirectly, acquired, after having become an Interested
Shareholder, additional shares of newly issued Wachovia capital stock from
Wachovia (other than upon conversion of convertible securities, a pro rata stock
dividend or stock split or pursuant to the Fair Price provisions), (ii) have
received the benefit directly, or indirectly, of financial assistance from
Wachovia or (iii) have made any major changes in Wachovia's business or equity
capital structure.
44
<PAGE>
The Fair Price Provisions are designed to discourage attempts to take over
Wachovia in non-negotiated transactions utilizing two-tier pricing tactics,
which typically involve the accumulation of a substantial block of the target
corporation's stock followed by a merger or other reorganization of the acquired
company on terms determined by the purchaser. In such two-step takeover
attempts, the purchaser generally pays cash to acquire a controlling interest in
a company and acquires the remaining equity interest by paying the remaining
shareholders a price lower than that paid to acquire the controlling interest,
often utilizing non-cash consideration.
Although federal and state securities laws and regulations require that
disclosure be made to shareholders of the terms of such a transaction, these
laws provide no assurance that the financial terms of such a transaction will be
fair to shareholders or that the shareholders can effectively prevent its
consummation. The Fair Price Provisions are intended to address some of the
effects of these gaps in federal and state law and to prevent some of the
potential inequities of two-step takeover attempts by encouraging negotiations
with Wachovia. While the terms of such a non-negotiated takeover could be fair
to Wachovia shareholders, negotiated transactions may result in more favorable
terms to Wachovia's shareholders because of such factors as timing of the
transaction, tax effects on the shareholders, and the fact that the nature and
amount of the consideration paid to all shareholders will be negotiated by the
parties at arm's length rather than dictated by the purchaser.
The Fair Price Provisions are designed to protect those shareholders who
have not tendered or otherwise sold their shares to an Interested Shareholder in
the initial step of a takeover attempt to which the requisite majority of
shareholders or Continuing Directors is not receptive by assuring that at least
the same price and form of consideration are paid to such shareholders as were
paid in the initial step of the acquisition.
Due to the difficulties of complying with the requirements of the Fair
Price Provisions, the Fair Price Provisions generally may discourage attempts to
obtain control of Wachovia. As a result, holders of Wachovia Common Stock may be
deprived of an opportunity to sell their shares at a premium above the market
price. In addition, the Fair Price Provisions would give veto power to the
holders of a minority of the shares of Wachovia Common Stock with respect to a
Business Combination which is opposed by more than 33 1/3% of the Continuing
Directors but which a majority of shareholders may believe to be desirable and
beneficial. Moreover, in any Business Combination not receiving the requisite
supermajority approval of shareholders or of Continuing Directors, the minimum
price provisions of the Fair Price Provisions, while providing objective pricing
criteria, could be arbitrary and not indicative of value.
REMOVAL OF DIRECTORS. A director of Wachovia may be removed only for cause
and only by the affirmative vote of the holders of 66 2/3% of the outstanding
voting shares and a majority of the voting shares not held by Interested
Shareholders.
AMENDMENT OF WACHOVIA ARTICLES. Except in certain specified circumstances,
the provisions of the Wachovia Articles concerning their amendment; the duration
of the corporation; the authorized capital stock; the number, classification,
election and removal of directors; the absence of pre-emptive rights for
shareholders; and the approval of Business Combinations may be amended only by
the affirmative vote of the holders of 66 2/3% of the outstanding voting shares
and a majority of the outstanding voting shares not held by Interested
Shareholders.
ANTITAKEOVER LEGISLATION. In 1987, the North Carolina General Assembly
enacted The North Carolina Shareholder Protection Act and The North Carolina
Control Share Acquisition Act (the "Control Share Act"), each of which contains
provisions intended to prevent, discourage or delay a change in control of North
Carolina corporations electing to be covered by such legislation. Wachovia has
elected to be subject only to the Control Share Act. For a summary of the
material provisions of the Control Share Act, see "Certain Differences in the
Rights of Wachovia Shareholders and 1st United Shareholders -- Control Share
Acquisitions."
CONTROL ACQUISITIONS. The Federal Change in Bank Control Act of 1978, as
amended, prohibits a person or group of persons from acquiring "control" of a
bank holding company unless the Federal Reserve Board has been given 60 days'
prior written notice of such proposed acquisition and within that time period
the Federal Reserve Board has not issued a notice disapproving the proposed
acquisition or extending for up to another 30 days the period during which such
a disapproval may be issued. An acquisition may be made prior to the expiration
of the disapproval period if the Federal Reserve Board issues written notice of
its intent not to disapprove the action. Under a rebuttable presumption
established by the Federal Reserve Board, the acquisition of more than 10% of a
class of voting stock of a bank holding company with a class of securities
registered under Section 12 of the Exchange Act would, under the circumstances
set forth in the presumption, constitute the acquisition of control.
45
<PAGE>
In addition, any "company" would be required to obtain the approval of the
Federal Reserve Board under the BHC Act before acquiring 25% (5% in the case of
an acquiror that is a bank holding company) or more of the outstanding shares of
Wachovia Common Stock, or such lesser number of shares as constitute control
over Wachovia.
SAVINGS AND LOAN HOLDING COMPANY REGULATIONS. As a savings and loan holding
company, Wachovia is subject to additional regulations that restrict
acquisitions of control by third parties. Subject to certain limited exceptions,
control of a savings association or a savings and loan holding company may only
be obtained with the approval (or in the case of an acquisition of control by an
individual, the absence of disapproval) of the Office of Thrift Supervision
("OTS"), after a public comment and application review process. Any company
acquiring control of a savings association becomes a savings and loan holding
company, must register and file periodic reports with the OTS, and is subject to
OTS examination.
CERTAIN DIFFERENCES IN THE RIGHTS OF WACHOVIA
SHAREHOLDERS AND 1ST UNITED SHAREHOLDERS
At the Effective Time, 1st United shareholders automatically will become
shareholders of Wachovia, and their rights as shareholders will be determined by
the Wachovia Articles, Wachovia's bylaws and the North Carolina Business
Corporation Act, instead of by the articles of incorporation and bylaws of 1st
United and the Florida Business Corporation Act. The following is a summary of
the material differences in the rights of shareholders of Wachovia and 1st
United. This summary is necessarily general and does not purport to be a
complete discussion of, and is qualified in its entirety by reference to, the
Florida Business Corporation Act, the North Carolina Business Corporation Act
and the articles of incorporation and bylaws of each corporation.
AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS
WACHOVIA. The Wachovia Articles provide that the affirmative vote of at
least 66 2/3% of voting shares of Wachovia, including a majority of the shares
held by a person other than an Interested Shareholder, is required to repeal
certain provisions of the Wachovia Articles relating to the duration of the
corporation, the authorized capital stock, the number, classification, election
and removal of directors, preemptive rights of shareholders, business
combinations and amendment of the Wachovia Articles. Amendment of such
provisions requires the approval of the holders of at least 66 2/3% of the
voting shares of Wachovia, including a majority of the voting shares not held by
an Interested Shareholder, unless (i) there is no Interested Shareholder and
such amendment is approved by a majority of the Wachovia Board or (ii) there
exists an Interested Shareholder, but such amendment is approved by at least
66 2/3% of the Continuing Directors, in either which case the affirmative vote
of the holders of at least a majority of the voting shares is sufficient to
approve any such amendment.
Wachovia's bylaws provide that the Wachovia Board has the power to adopt,
amend or repeal the bylaws by a vote of a majority of the directors then in
office, subject to the right of the shareholders to adopt, amend or repeal the
bylaws, except that a bylaw adopted, amended or repealed by the shareholders may
not be readopted, amended or repealed by the Wachovia Board, unless the Wachovia
Articles or a bylaw adopted by shareholders authorizes the Wachovia Board to do
so.
1ST UNITED. Pursuant to the Florida Business Corporation Act, amendments to
the articles of incorporation of 1st United (other than in limited
circumstances) must be recommended by the 1st United Board and approved by a
majority of the votes entitled to be cast by each voting group entitled to vote
on the amendment. Under the Florida Business Corporation Act, 1st United's
shareholders may adopt, amend or repeal the bylaws of 1st United, and the 1st
United Board also may adopt, amend or repeal the bylaws, unless the shareholders
provide, when adopting a particular bylaw, that the 1st United Board may not
amend or appeal it.
SPECIAL MEETINGS OF SHAREHOLDERS
WACHOVIA. A special meeting of the shareholders of Wachovia may be called
only by its chief executive officer or by the Wachovia Board.
1ST UNITED. A special meeting of the shareholders of 1st United may be
called by the 1st United Board, the Chairman of the 1st United Board or the
President, or in the absence of the President, by a Vice President, and shall be
called by the President or by the Secretary at the written request of a majority
of the 1st United Board or
46
<PAGE>
at the written request of shareholders owning at least one tenth in amount of
the outstanding capital stock of 1st United. Such shareholder's request must
state the purpose or purposes of the proposed meeting.
NUMBER OF DIRECTORS; CLASSIFIED BOARD OF DIRECTORS
WACHOVIA. Wachovia's bylaws state that the number of directors shall not be
less than nine, with the exact number of directors to be fixed by resolution of
the Wachovia Board. The Wachovia Board has fixed the number at sixteen
directors. Wachovia's bylaws state that the Wachovia Board shall be divided into
three classes to serve staggered three-year terms. The effect of Wachovia's
having a classified board of directors is that only approximately one-third of
the members of the Wachovia Board are elected each year; consequently, two
annual meetings are effectively required for Wachovia's shareholders to change a
majority of the members of the Wachovia Board.
1ST UNITED. 1st United's articles of incorporation provide that the number
of directors shall not be less than five. The 1st United Board currently has 25
directors. 1st United directors are elected for one-year terms.
REMOVAL OF DIRECTORS
WACHOVIA. Wachovia's bylaws state that a director of Wachovia may be
removed only for cause and only by the affirmative vote of the holders of
66 2/3% of the outstanding voting shares, including a majority of the voting
shares not held by an Interested Shareholder.
1ST UNITED. 1st United's articles of incorporation and bylaws state that a
director may be removed, with or without cause, by the affirmative vote of the
holders of a majority of the shares then entitled to vote at an election of
directors.
ADVANCE NOTICE OF DIRECTOR NOMINATIONS
WACHOVIA. Wachovia's bylaws provide that director nominations by the
Wachovia Board must include the Chairman and the Chief Executive Officer, if the
Chief Executive Officer is not the Chairman, and if such person is not then a
director or his or her term as a director is set to expire. Director nominations
by a shareholder must be made in writing and delivered or mailed to the chief
executive officer of Wachovia not less than 14 days nor more than 50 days prior
to any meeting of shareholders at which directors are to be elected, except that
if less than 21 days' notice of the meeting is given to shareholders, such
notification of the nomination must be mailed or delivered to the chief
executive officer of Wachovia not later than the close of business on the
seventh day following the day on which the notice of meeting was mailed.
1ST UNITED. Neither the articles of incorporation nor the bylaws of 1st
United contain provisions for advance notification of director nominations.
RESTRICTIONS ON CERTAIN BUSINESS COMBINATIONS
WACHOVIA. The Wachovia Articles have restrictions which are designed to
discourage attempts to acquire control of Wachovia in non-negotiated
transactions through the use of two-tier pricing tactics. The Fair Price
Provisions are described above under "Description of Wachovia Capital
Stock -- Changes in Control -- Fair Price Provisions."
1ST UNITED. The Affiliated Transaction Statute of the Florida Business
Corporation Act restricts certain "Affiliated Transactions" between a Florida
corporation and a beneficial owner of more than ten percent of any class of
voting stock (a "10% Holder"). An "Affiliated Transaction" is defined in the
Florida Business Corporation Act as any of the following transactions with or
proposed by a 10% Holder: a merger; dispositions of assets having a value in
excess of 5% of the value of the corporation; certain significant securities
issuances; dissolution of the corporation; reclassification of the corporation's
securities; or a loan, advance, guaranty or similar financial assistance. Under
the statute, an Affiliated Transaction generally requires the approval of
two-thirds of the voting shares of the corporation other than shares owned by
the 10% Holder. This special voting provision does not apply if a majority of
disinterested directors have approved the transaction. This special voting rule
is in addition to, and not in lieu of, other voting provisions contained in the
Florida Business Corporation Act and 1st United's articles of incorporation.
47
<PAGE>
CONTROL SHARE ACQUISITIONS
WACHOVIA. The Control Share Act contains provisions that, under certain
circumstances, would preclude an acquiror of the shares of a North Carolina
corporation who crosses one of three voting thresholds (20%, 33 1/3% or 50%)
from obtaining voting control with respect to such shares unless a majority in
interest of the disinterested shareholders of the corporation votes to accord
voting power to such shares.
The Control Share Act provides that, in the event control shares are
accorded voting rights and, as a consequence, the holders of the control shares
have a majority of all voting power for the election of directors, the
corporation's shareholders, other than holders of control shares, may cause the
corporation to redeem their shares. The right of redemption is subject to
limitations on corporate distributions to shareholders and any contrary
provision in the corporation's articles of incorporation or bylaws adopted by
the shareholders prior to the occurrence of a control share acquisition. The
Wachovia Articles and bylaws do not limit the ability of shareholders to cause
Wachovia to redeem their shares under the circumstances described above.
1ST UNITED. The Florida Business Corporation Act contains similar
provisions relating to control share acquisitions that would, under certain
circumstances, preclude an acquiror of the shares of a Florida corporation who
crosses one of three voting thresholds (20%, 33 1/3% or 50%) from obtaining
voting control with respect to such shares unless a majority in interest of the
disinterested shareholders of the corporation votes to accord voting power to
such shares.
The control share provisions of the Florida Business Corporation Act
provide that, in the event that control shares are accorded voting rights and
the acquiring person has acquired control shares with a majority or more of the
voting power of a Florida corporation, all shareholders of the corporation shall
have dissenters' rights to receive "fair value" for their shares in connection
with the approval of the control-share acquisition by shareholders. "Fair value"
is defined as a value not less than the highest price paid per share by the
acquiring person in the control share acquisition. In addition, if authorized in
the corporation's articles of incorporation or bylaws before a control-share
acquisition has occurred, control shares acquired by an acquiring party which
has not filed an "acquiring person statement" (which sets forth information
about, among other things, the identity of the person, the number of shares
owned and the voting threshold to be crossed) with the corporation during the
60-day period after the last acquisition of shares by the acquiring party may be
redeemed by the corporation at their fair value thereof pursuant to procedures
adopted by the corporation.
LIMITATION ON DIRECTOR LIABILITY
WACHOVIA. The Wachovia Articles provide that, to the full extent permitted
by law, a director of Wachovia will have no personal liability to Wachovia or
its shareholders for monetary damages for breach of his or her duty as a
director, whether such action is brought by or in the right of Wachovia or
otherwise. North Carolina law generally provides for limitation on director's
liability provided that no such provision shall be effective with respect to (i)
acts or omissions that the director at the time of such breach knew or believed
were clearly in conflict with the best interests of the corporation, (ii) any
liability for unlawful distributions, (iii) any transaction from which the
director derived an improper personal benefit, or (iv) acts or omissions
occurring prior to the date the provisions became effective.
1ST UNITED. Under the Florida Business Corporation Act, directors of 1st
United are not personally liable for monetary damages to the corporation, unless
the director has breached or failed to perform the duties required as a director
and such breach involved (i) a criminal violation of law; (ii) a transaction
from which the director derived improper personal benefit; (iii) authorization
for unlawful distributions; (iv) in proceedings on behalf of the corporation or
a shareholder, conscious disregard for the best interest of the corporation or
willful misconduct; or (v) in proceedings not on behalf of the corporation or a
shareholder, recklessness, or acts involving bad faith, malicious purpose or
wanton and willful disregard of human rights, safety or property.
INDEMNIFICATION
WACHOVIA. Wachovia's bylaws provide for indemnification of any liability of
directors, officers, employees or agents of Wachovia or any wholly-owned
subsidiary of Wachovia. Indemnification payments for liabilities and litigation
expenses may be made only following a determination that the activities of the
person to be indemnified (the "Claimant") were at the time taken not known or
believed by the Claimant to be clearly in conflict with the best interest of
Wachovia. Such determination will be made (i) by a majority of disinterested
directors (if there
48
<PAGE>
are at least two such directors), (ii) if there are not two such directors or if
a majority of the disinterested directors so directs, by independent legal
counsel in a written opinion, (iii) by a majority of the shareholders, or (d) in
accordance with any reasonable procedures prescribed by the Wachovia Board prior
to the assertion of the claim for which indemnification is sought. If the
Claimant is an officer or an employee of Wachovia, the determination may be made
by the chief executive officer or a designee of the chief executive officer.
1ST UNITED. 1st United's bylaws provide for indemnification of liabilities
and expenses of directors and officers if such person acted in good faith and in
the reasonable belief that such action was in or not opposed to the best
interests of 1st United, and, in criminal actions or proceedings, without
reasonable ground for belief that such action was unlawful.
In addition, 1st United has entered into indemnification agreements with
its directors and officers that provide for indemnification to the fullest
extent permitted by law against any and all expenses, judgments, fines,
penalties and amounts actually and reasonably incurred by such director or
officer. The indemnification agreements provide that no payments will be made if
(i) the director or officer institutes or initiates an action, proceeding or
claim against 1st United (expect in limited circumstances), (ii) a court
determines that, with respect to an action or claim to enforce the
indemnification agreement, the action or claim was not in good faith or was
frivolous; (iii) the claim is for an amount paid in a settlement without 1st
United's consent; (iv) such payment would be prohibited by applicable law; or
(v) the director or officer has been found by a court to have consciously
disregarded the best interest of the corporation or to have engaged in willful
misconduct.
SHAREHOLDER INSPECTION RIGHTS; SHAREHOLDER LISTS
WACHOVIA. Under the North Carolina Business Corporation Act, qualified
shareholders have the right to inspect and copy certain records of Wachovia if
their demand is in good faith and for a proper purpose. Such right of inspection
requires that the shareholder give Wachovia at least five business days' written
notice of the demand, describing with reasonable particularity the purpose and
the requested records. The records must be directly connected with the
shareholder's purpose. The rights of inspection and copying extend not only to
shareholders of record but also to beneficial owners whose beneficial ownership
is certified to Wachovia by the shareholder of record. However, Wachovia is
under no duty to provide any accounting records or any records with respect to
any matter that Wachovia determines in good faith may, if disclosed, adversely
effect Wachovia in the conduct of its business or may constitute material
non-public information, and the rights of inspection and copying are limited to
shareholders who either have been shareholders for at least six months or who
hold at least five percent of the outstanding shares of any class of stock of
Wachovia.
1ST UNITED. The Florida Business Corporation Act permits any 1st United
shareholder, upon written demand submitted at least five business days in
advance, to inspect and copy certain listed materials, including the articles of
incorporation, the bylaws and certain 1st United Board resolutions and minutes
of shareholders' meetings. The Florida Business Corporation Act further permits
a 1st United shareholder, upon five business days' prior written demand made in
good faith and for a proper purpose, to inspect and copy the accounting records,
excerpts from minutes of meetings of the 1st United Board and its committees,
the minutes of any shareholders' meetings not previously provided and the list
of shareholders; provided such shareholder describes his or her purpose for the
request and the records are directly connected to such purpose.
49
<PAGE>
COMPARATIVE MARKET PRICES AND DIVIDENDS
WACHOVIA
Wachovia Common Stock is traded on the NYSE under the symbol "WB." The
following table sets forth, for the indicated periods, the high and low closing
sale prices for Wachovia Common Stock as reported by the NYSE, and the cash
dividends declared per share of Wachovia Common Stock for the indicated periods.
<TABLE>
<CAPTION>
PRICE RANGE CASH DIVIDENDS
QUARTER HIGH LOW DECLARED PER SHARE
<S> <C> <C> <C>
1995:
First...................................................................... $ 36 1/2 $ 32 $.33
Second..................................................................... 37 7/8 34 1/4 .33
Third...................................................................... 45 35 3/8 .36
Fourth..................................................................... 48 1/4 43 1/8 .36
1996:
First...................................................................... 48 3/8 41 1/4 .36
Second..................................................................... 46 1/4 40 7/8 .36
Third...................................................................... 49 7/8 39 5/8 .40
Fourth..................................................................... 60 1/4 48 3/4 .40
1997:
First...................................................................... 64 5/8 54 1/2 .40
Second..................................................................... 66 7/8 53 1/2 .40
Third...................................................................... 72 59 1/8 .44
</TABLE>
On August 6, 1997, the last trading day before public announcement of the
Merger, the closing price per share of Wachovia Common Stock on the NYSE was
$64 1/2. Past price performance is not necessarily indicative of likely future
price performance. Holders of Wachovia Common Stock are urged to obtain current
market quotations for shares of Wachovia Common Stock.
The holders of Wachovia Common Stock are entitled to receive dividends when
and if declared by the Wachovia Board out of funds legally available therefor.
Although Wachovia currently intends to continue paying quarterly cash dividends
on the Wachovia Common Stock, there can be no assurance that Wachovia's dividend
policy will remain unchanged after completion of the Merger. The declaration and
payment of dividends thereafter will depend upon business conditions, operating
results, capital and reserve requirements, and the Wachovia Board's
consideration of other relevant factors.
50
<PAGE>
1ST UNITED
1st United Common Stock is traded on the Nasdaq Stock Market under the
symbol "FUBC." The following table sets forth, for the indicated periods, the
high and low closing sale prices for 1st United Common Stock as reported in the
Nasdaq Stock Market, and the cash dividends declared per share of 1st United
Common Stock for the indicated periods.
<TABLE>
<CAPTION>
CASH
DIVIDENDS
DECLARED
PRICE RANGE PER
QUARTER HIGH LOW SHARE
<S> <C> <C> <C>
1995:
First.................................................................... $ 7 1/4 $ 5 3/4 $.08
Second................................................................... 8 1/4 7 .03
Third.................................................................... 9 7 5/8 .03
Fourth................................................................... 8 3/4 5 3/4 .03
1996:
First.................................................................... 9 5/8 7 3/4 .03
Second................................................................... 10 1/2 9 .04
Third.................................................................... 10 3/4 9 3/4 .04
Fourth................................................................... 13 3/8 10 3/8 .10
1997:
First.................................................................... 15 1/4 12 11/16 .10
Second................................................................... 17 5/8 14 .11
Third.................................................................... 21 3/4 15 3/4 .11
</TABLE>
On August 6, 1997, the last trading day before public announcement of the
Merger, the closing price per share of 1st United Common Stock on the Nasdaq
Stock Market was $19 3/4. Past price performance is not necessarily indicative
of likely future price performance. Holders of 1st United Common Stock are urged
to obtain current market quotations for shares of 1st United Common Stock.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS OF 1ST UNITED
PRINCIPAL BENEFICIAL OWNERS
The following table lists the only shareholder known by 1st United to be
the beneficial owner of more than five percent of outstanding 1st United Common
Stock as of the Record Date. In addition, Wachovia has the right under the Stock
Option Agreement to acquire up to 19.9% of 1st United Common Stock under certain
conditions. See "The Merger -- Stock Option Agreement."
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP CLASS
<S> <C> <C>
Anthony Comparato 755,514(1) 7.43%
980 N. Federal Highway
Boca Raton, Florida 33432
</TABLE>
(1) Includes 230,257 shares of 1st United Common Stock owned by Edith Comparato,
his wife, of which Mr. Comparato disclaims beneficial ownership.
51
<PAGE>
SHARES BENEFICIALLY OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
The following table identifies the names and addresses of directors and
executive officers and their beneficial ownership of shares of 1st United Common
Stock as of August 31, 1997:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
NAME OWNERSHIP (1) CLASS
<S> <C> <C>
A. L. Andreozzi........................... 69,860 .69%
James B. Baer............................. 13,829 .14
James D. Beaty............................ 56,364 (5)(10) .56
Roger G. Bond............................. 30,501 (5)(9) .30
Doug Brash................................ 212 .00
Edward L. Bronstien, Jr................... 3,192 .03
Anthony Comparato......................... 755,514 (3) 7.4
Robert Comparato.......................... 69,350 (12)(14) .68
J. Herman Dance........................... 44,810 .44
Ronald A. David, Esq...................... 69,161 (5) .68
Thomas L. Delaney......................... 73,255 (5)(6) .72
David B. Dickenson, Esq................... 49,871 .49
Mario A. DiFederico....................... 11,392 .11
Thomas J. Hanford......................... 93,068 (5)(8) .92
Mary Harper............................... 1,164 .01
Herman Jeffer............................. 51,155 (11) .50
Ward Kellogg.............................. 64,900 (2) .64
Dana Kilborne............................. 39,000 (2) .38
Maxwell C. King........................... 30,990 .31
Harvey S. Klein........................... 55,746 (5) .55
Paul L. Maddock, Jr....................... 46,551 .46
John Marino............................... 112,000 (7) 1.09
Billie H. McCutchen....................... 29,871 .29
Walter Mortimer........................... 23,500 .23
Warren S. Orlando......................... 420,931 (4) 4.06
June Owens................................ 33,000 (2) .32
Lindsey R. Perry.......................... 72,358 .71
Edward A. Sasso........................... 53,350 .53
G. Robert Sheetz.......................... 80,850 .80
Harold Toppel............................. 152,208 1.50
Dean Vegosen.............................. 18,194 (13) .18
Donald Vinik.............................. 212,606 2.09
All directors and executive officers as
a group (32 persons).................... 2,838,753 (1-14) 26.69
</TABLE>
(1) Based upon information furnished by beneficial owners as of August 31,
1997. Includes direct and indirect ownership, and unless otherwise
indicated, also includes sole and shared voting and investment power with
respect to reported holdings.
(2) Represents options to purchase 1st United Common Stock at prices between
$3.33 and $13.00.
(3) Includes 230,257 shares of 1st United Common Stock owned by Edith
Comparato, his wife, of which Mr. Anthony Comparato disclaims beneficial
ownership.
(4) Includes options to purchase 211,628 shares of 1st United Common Stock,
124,128 of which are exercisable at a price of $3.70 and expire in 2001.
52,500 options are exercisable at $11.82 and expire in 2006. The balance of
35,000 options are exercisable at $13.00 and expire in 2007.
(5) Includes 129,883 shares owned by Mizner Square, Inc. Messrs. Delaney,
Hanford, David, Klein, Bond and Beaty are each 1/7 owners of Mizner Square,
Inc.
(6) Includes 16,835 shares owned by his four adult children.
52
<PAGE>
(7) Includes 111,000 options to purchase 1st United Common Stock at prices
between $3.36 and $13.00.
(8) Includes 21,819 shares owned by DuBois Investment Co., in which Mr. Hanford
is a 50% partner and Mr. Hanford disclaims beneficial ownership of these
shares.
(9) Includes 472 shares owned by Mr. Bond as custodian for his two children.
(10) Includes 6,004 shares owned by his wife's Individual Retirement Account,
and Mr. Beaty disclaims beneficial ownership of these shares.
(11) Includes 6,133 owned by his wife.
(12) Includes 4,350 shares owned or held in trust by his wife, over which Mr.
Robert Comparato disclaims beneficial ownership.
(13) Includes 1,094 shares owned by Mr. Vegosen as custodian for his daughters.
(14) Robert Comparato is the son of Anthony Comparato, Chairman of the Board of
Directors.
As a condition and an inducement to Wachovia's entering into the Merger
Agreement, certain directors of 1st United who hold approximately 27.6% of the
outstanding shares of 1st United Common Stock, agreed to vote all such shares in
favor of approval of the Merger Agreement. A copy of the Shareholder Agreement
executed by such directors is attached hereto as Appendix C. Accordingly,
assuming such shares are so voted, approval of the Merger Agreement will require
the affirmative vote of the holders of approximately an additional 23% of the
outstanding shares of 1st United Common Stock in order for the Merger Agreement
to be approved at the Special Meeting. See "General Information -- Vote
Required."
EXPERTS
The consolidated financial statements of Wachovia incorporated by reference
in Wachovia's Annual Report (Form 10-K) for the year ended December 31, 1996,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon incorporated by reference 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.
The consolidated financial statements of 1st United incorporated by
reference in 1st United's Current Report (Form 8-K/A) for the year ended
December 31, 1996, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon incorporated by reference 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.
The consolidated financial statements of Central Fidelity for the year
ended December 31, 1996, incorporated by reference from Wachovia's Form 8-K,
dated September 8, 1997, have been audited by KPMG Peat Marwick LLP, independent
auditors, as set forth in their report thereon incorporated by reference therein
and incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
VALIDITY OF WACHOVIA COMMON STOCK
The validity of the shares of Wachovia Common Stock being offered hereby
will be passed upon for Wachovia by Kenneth W. McAllister, Executive Vice
President and General Counsel.
53
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement/Prospectus, the 1st United Board
knows of no matters that will be presented for consideration at the Special
Meeting other than as described in this Proxy Statement/Prospectus. However, if
any other matter shall come before the Special Meeting or any adjournments or
postponements thereof and shall be voted upon, the proposed proxy will be deemed
to confer authority to the individuals named as authorized therein to vote the
shares represented by such proxy as to any such matters that fall within the
purposes set forth in the Notice of Special Meeting as determined by a majority
of 1st United Board, provided, however, that no proxy which is voted against the
proposal to approve the Merger Agreement will be voted in favor of any
adjournment or postponement.
SHAREHOLDER PROPOSALS
If the Merger is not consummated, 1st United expects to hold its next
annual meeting of shareholders during April, 1998. In the event that such a
meeting is held, in accordance with Commission rules, any proposals of
shareholders intended to be presented at each meeting must be received at 1st
United's principal executive offices at 980 N. Federal Highway, Boca Raton,
Florida 33432, Attn: Sandy Wheeler, Secretary, no later than December 31, 1997
for consideration by 1st United for possible inclusion in 1st United's proxy
statement and form of proxy related to such meeting.
54
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF MERGER
DATED AS OF AUGUST 6, 1997
BY AND BETWEEN
WACHOVIA CORPORATION
AND
1ST UNITED BANCORP
<PAGE>
TABLE OF CONTENTS
PAGE
RECITALS.....................................................................A-1
ARTICLE I
Certain Definitions ......................................A-1
1.01 CERTAIN DEFINITIONS............................................A-1
ARTICLE II
The Merger .......................................................A-4
2.01 THE MERGER.....................................................A-4
2.02 EFFECTIVE DATE AND EFFECTIVE TIME..............................A-4
2.03 PLAN OF MERGER.................................................A-4
ARTICLE III
Consideration; Exchange Procedures...........................................A-5
3.01 MERGER CONSIDERATION...........................................A-5
3.02 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS........................A-5
3.03 FRACTIONAL SHARES..............................................A-5
3.04 EXCHANGE PROCEDURES............................................A-5
3.05 ANTI-DILUTION PROVISIONS.......................................A-6
3.06 OPTIONS........................................................A-6
ARTICLE IV
Actions Pending Acquisition..................................................A-7
4.01 FOREBEARANCES OF 1ST UNITED....................................A-7
4.02 FOREBEARANCES OF WACHOVIA......................................A-8
ARTICLE V
Representations and Warranties...............................................A-8
5.01 DISCLOSURE SCHEDULES...........................................A-8
5.02 STANDARD.......................................................A-9
5.03 REPRESENTATIONS AND WARRANTIES OF 1ST UNITED...................A-9
5.04 REPRESENTATIONS AND WARRANTIES OF WACHOVIA....................A-15
ARTICLE VI
Covenants .........................................................A-17
6.01 REASONABLE BEST EFFORTS.......................................A-17
6.02 STOCKHOLDER APPROVALS.........................................A-17
6.03 REGISTRATION STATEMENT........................................A-17
6.04 PRESS RELEASES................................................A-18
6.05 ACCESS; INFORMATION...........................................A-18
6.06 ACQUISITION PROPOSALS.........................................A-19
6.07 AFFILIATE AGREEMENTS..........................................A-19
6.08 SHAREHOLDER AGREEMENT.........................................A-19
6.09 TAKEOVER LAWS.................................................A-19
6.10 CERTAIN POLICIES..............................................A-19
6.11 NYSE LISTING..................................................A-19
6.12 REGULATORY APPLICATIONS.......................................A-19
6.13 INDEMNIFICATION...............................................A-20
6.14 BENEFIT PLANS.................................................A-21
6.15 ACCOUNTANTS' LETTERS..........................................A-21
6.16 NOTIFICATION OF CERTAIN MATTERS...............................A-21
6.17 STOCK PLANS...................................................A-21
6.18 DIVIDEND COORDINATION.........................................A-21
A-i
<PAGE>
PAGE
ARTICLE VII
Conditions to Consummation of the Merger....................................A-21
7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER....A-21
7.02 CONDITIONS TO OBLIGATION OF 1ST UNITED........................A-22
7.03 CONDITIONS TO OBLIGATION OF WACHOVIA..........................A-22
ARTICLE VIII
Termination .....................................................A-23
8.01 TERMINATION...................................................A-23
8.02 EFFECT OF TERMINATION AND ABANDONMENT.........................A-23
ARTICLE IX
Miscellaneous ................................................A-24
9.01 SURVIVAL......................................................A-24
9.02 WAIVER; AMENDMENT.............................................A-24
9.03 COUNTERPARTS..................................................A-24
9.04 GOVERNING LAW.................................................A-24
9.05 EXPENSES......................................................A-24
9.06 NOTICES.......................................................A-24
9.07 ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES............A-25
9.08 INTERPRETATION; EFFECT........................................A-25
EXHIBIT A Form of Stock Option Agreement [See APPENDIX B to this Proxy
Statement/Prospectus]
EXHIBIT B Form of Shareholder Agreement [See APPENDIX C to this Proxy
Statement/Prospectus]
EXHIBIT C Form of Plan of Merger
A-ii
<PAGE>
AGREEMENT AND PLAN OF MERGER, dated as of August 6, 1997 (this "AGREEMENT")
by and between 1st United Bancorp ("1ST UNITED") and Wachovia Corporation
("WACHOVIA").
RECITALS
A. 1ST UNITED BANCORP. 1st United is a Florida corporation, having its
principal place of business in Boca Raton, Florida.
B. WACHOVIA CORPORATION. Wachovia is a North Carolina corporation, having
its principal place of business in both Winston-Salem, North Carolina and
Atlanta, Georgia.
C. STOCK OPTION AGREEMENT. As a condition and an inducement to Wachovia's
entering into this Agreement, 1st United has granted to Wachovia an option
pursuant to a stock option agreement, in substantially the form of EXHIBIT A
(the "STOCK OPTION AGREEMENT").
D. SHAREHOLDER AGREEMENT. As a further condition and inducement to the
willingness of Wachovia to enter into this Agreement, shareholders of 1st United
who are also directors of 1st United and who hold, in the aggregate in excess of
20% of the outstanding shares of 1st United Common Stock have entered into an
agreement with Wachovia, in the form of EXHIBIT B hereto (the "SHAREHOLDER
AGREEMENT"), under which each such shareholders have agreed to vote in favor of
this Agreement.
E. INTENTIONS OF THE PARTIES. It is the intention of the parties to this
Agreement that the business combination contemplated hereby be treated as a
"reorganization" under Section 368 of the Internal Revenue Code of 1986 (the
"CODE").
F. BOARD ACTION. The respective Boards of Directors of each of Wachovia and
1st United have determined that it is in the best interests of their respective
companies and their stockholders to consummate the strategic business
combination transaction provided for herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein the
parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 CERTAIN DEFINITIONS. The following terms are used in this Agreement
with the meanings set forth below:
"ACQUISITION PROPOSAL" has the meaning set forth in Section 6.06.
"AGREEMENT" means this Agreement, as amended or modified from time to time
in accordance with Section 9.02.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPENSATION AND BENEFIT PLANS" has the meaning set forth in Section
5.03(m).
"COSTS" has the meaning set forth in Section 6.13(a).
"DISCLOSURE SCHEDULE" has the meaning set forth in Section 5.01.
"EFFECTIVE DATE" means the date on which the Effective Time occurs.
"EFFECTIVE TIME" means the effective time of the Merger, as provided for in
Section 2.02.
"ENVIRONMENTAL LAWS" means all applicable local, state and federal
environmental, health and safety laws and regulations, including, without
limitation, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation, and Liability Act, the Clean Water Act,
the Federal Clean Air Act, and the Occupational Safety and Health Act, each as
amended, regulations promulgated thereunder, and state counterparts.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" has the meaning set forth in Section 5.03(m).
"ERISA AFFILIATE PLAN" has the meaning set forth in Section 5.03(m).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"EXCHANGE AGENT" has the meaning set forth in Section 3.04.
"EXCHANGE RATIO" has the meaning set forth in Section 3.01.
"FBCA" means the Florida Business Corporation Act.
"FDIC" means the Federal Deposit Insurance Corporation.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal Reserve
System.
"GOVERNMENTAL AUTHORITY" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality.
"INDEMNIFIED PARTY" has the meaning set forth in Section 6.13(a).
"INSURANCE AMOUNT" has the meaning set forth in Section 6.13(b).
"INSURANCE POLICY" has the meaning set forth in Section 5.03(t).
"IRS" has the meaning set forth in Section 5.03(m).
"LIEN" means any charge, mortgage, pledge, security interest, restriction,
claim, lien, or encumbrance.
"MATERIAL ADVERSE EFFECT" means, with respect to Wachovia, 1st United or
the Surviving Corporation, any effect that (i) is material and adverse to the
financial position, results of operations or business of Wachovia and its
Subsidiaries taken as a whole, 1st United and its Subsidiaries taken as a whole,
or the Surviving Corporation and its Subsidiaries taken as a whole,
respectively, or (ii) would materially impair the ability of either Wachovia or
1st United to perform its obligations under this Agreement or otherwise
materially threaten or materially impede the consummation of the Merger and the
other transactions contemplated by this Agreement; PROVIDED, HOWEVER, that
Material Adverse Effect shall not be deemed to include the impact of (a) changes
in banking and similar laws of general applicability or interpretations thereof
by courts or governmental authorities, (b) changes in generally accepted
accounting principles or regulatory accounting requirements applicable to banks
and their holding companies generally, (c) any modifications or changes to
valuation policies and practices in connection with the Merger or restructuring
charges taken in connection with the Merger, in each case in accordance with
generally accepted accounting principles, (d) effects of any action taken by 1st
United with the prior written consent of Wachovia and (e) changes in conditions
or circumstances that affect the banking industry generally.
"MERGER" has the meaning set forth in Section 2.01.
"MERGER CONSIDERATION" has the meaning set forth in Section 2.01.
"MULTIEMPLOYER PLANS" has the meaning set forth in Section 5.03(m).
"NASDAQ" means The Nasdaq Stock Market, Inc.'s National Market System.
"NCBCA" means the North Carolina Business Corporation Act.
"NEW CERTIFICATE" has the meaning set forth in Section 3.04.
"NORTH CAROLINA SECRETARY" has the meaning set forth in Section 2.01(b).
"NYSE" means the New York Stock Exchange, Inc.
"OLD CERTIFICATE" has the meaning set forth in Section 3.04.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PENSION PLAN" has the meaning set forth in Section 5.03(m).
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"PERSON" means any individual, bank, corporation, partnership, association,
joint-stock company, business trust or unincorporated organization.
"PLANS" has the meaning set forth in Section 5.03(m).
"PREVIOUSLY DISCLOSED" by a party shall mean information set forth in its
Disclosure Schedule.
"PROXY STATEMENT" has the meaning set forth in Section 6.03.
"REGISTRATION STATEMENT" has the meaning set forth in Section 6.03.
"REGULATORY AUTHORITIES" has the meaning set forth in Section 5.03(i).
"REPLACEMENT OPTION" has the meaning set forth in Section 3.06.
"REPRESENTATIVES" means, with respect to any Person, such Person's
directors, officers, employees, legal or financial advisors or any
representatives of such legal or financial advisors.
"RIGHTS" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any person any
right to subscribe for or acquire, or any options, calls or commitments relating
to, or any stock appreciation right or other instrument the value of which is
determined in whole or in part by reference to the market price or value of,
shares of capital stock of such person.
"SEC" means the Securities and Exchange Commission.
"SEC DOCUMENTS" has the meaning set forth in Section 5.03(g).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"STOCK OPTION AGREEMENT" has the meaning set forth in Recital C.
"SUBSIDIARY" and "SIGNIFICANT SUBSIDIARY" have the meanings ascribed to
them in Rule 1-02 of Regulation S-X of the SEC.
"SURVIVING CORPORATION" has the meaning set forth in Section 2.01.
"TAKEOVER LAWS" has the meaning set forth in Section 5.03 (o).
"TAX" and "TAXES" means all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gross receipts, gains, sales,
use, ad valorem, goods and services, capital, production, transfer, franchise,
windfall profits, license, withholding, payroll, employment, disability,
employer health, excise, estimated, severance, stamp, occupation, property,
environmental, unemployment or other taxes, custom duties, fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority whether
arising before, on or after the Effective Date.
"TAX RETURNS" means any return, amended return or other report (including
elections, declarations, disclosures, schedules, estimates and information
returns) required to be filed with respect to any Tax.
"TREASURY STOCK" shall mean shares of 1st United Common Stock held by 1st
United or any of its Subsidiaries or by Wachovia or any of its Subsidiaries, in
each case other than in a fiduciary capacity or as a result of debts previously
contracted in good faith.
"WACHOVIA" has the meaning set forth in the preamble to this Agreement.
"WACHOVIA AVERAGE STOCK PRICE" has the meaning set forth in Section 3.01.
"WACHOVIA BOARD" means the Board of Directors of Wachovia.
"WACHOVIA COMMON STOCK" means the common stock, par value $5.00 per share,
of Wachovia.
"WACHOVIA PREFERRED STOCK" means the preferred stock, par value $5.00 per
share, of Wachovia.
"WACHOVIA STOCK" means, collectively, Wachovia Common Stock and Wachovia
Preferred Stock.
"1ST UNITED AFFILIATE" has the meaning set forth in Section 6.07(a).
"1ST UNITED BOARD" means the Board of Directors of 1st United.
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"1ST UNITED BY-LAWS" means the Amended and Restated By-laws of 1st United.
"1ST UNITED CERTIFICATE" means the Amended and Restated Articles of
Incorporation of 1st United.
"1ST UNITED COMMON STOCK" means the common stock, par value $0.01 per
share, of 1st United.
"1ST UNITED MEETING" has the meaning set forth in Section 6.02.
"1ST UNITED PREFERRED STOCK" means the preferred stock, no par value, of
1st United.
"1ST UNITED STOCK OPTION" has the meaning set forth in Section 3.06.
"1ST UNITED STOCK" means, collectively, 1st United Common Stock and 1st
United Preferred Stock.
"1ST UNITED STOCK PLAN" has the meaning set forth in Section 3.06.
ARTICLE II
THE MERGER
2.01 THE MERGER. (a) At the Effective Time, 1st United shall merge with and
into Wachovia (the "MERGER"), the separate corporate existence of 1st United
shall cease and Wachovia shall survive and continue to exist as a North Carolina
corporation (Wachovia, as the surviving corporation in the Merger, sometimes
being referred to herein as the "SURVIVING CORPORATION"). Wachovia may at any
time prior to the Effective Time change the method of effecting the combination
with 1st United (including, without limitation, the provisions of this Article
II) if and to the extent it deems such change to be necessary or appropriate
after notification to and consultation with 1st United; PROVIDED, HOWEVER, that
no such change shall (i) alter or change the amount or kind of consideration to
be issued to holders of 1st United Common Stock as provided for in this
Agreement (the "MERGER CONSIDERATION"), (ii) adversely affect the tax treatment
of 1st United's stockholders as a result of receiving the Merger Consideration
or (iii) materially impede or delay consummation of the transactions
contemplated by this Agreement.
(b) Subject to the satisfaction or waiver of the conditions set forth in
Article VII, the Merger shall become effective upon the occurrence of the filing
in the office of the Florida Department of State of articles of merger in
accordance with Section 607.1105 of the FBCA and the filing in the Office of the
Secretary of State of the State of North Carolina (the "NORTH CAROLINA
SECRETARY") of articles of merger in accordance with Section 55-11-05 of the
NCBCA or such later date and time as may be set forth in such articles. The
Merger shall have the effects prescribed in the NCBCA and the FBCA.
(c) ARTICLES OF INCORPORATION AND BY-LAWS. The articles of incorporation
and by-laws of Wachovia immediately after the Merger shall be those of Wachovia
as in effect immediately prior to the Effective Time.
(d) DIRECTORS AND OFFICERS OF WACHOVIA. The directors and officers of
Wachovia immediately after the Merger shall be the directors and officers of
Wachovia immediately prior to the Effective Time, until such time as their
successors shall be duly elected and qualified.
2.02 EFFECTIVE DATE AND EFFECTIVE TIME. Subject to the satisfaction or
waiver of the conditions set forth in Article VII, the parties shall cause the
effective date of the Merger (the "EFFECTIVE DATE") to occur on (i) the fifth
business day to occur after the last of the conditions set forth in Article VII
shall have been satisfied or waived in accordance with the terms of this
Agreement (or, at the election of Wachovia, a day within five business days of
such fifth business day) or (ii) such other date to which the parties may agree
in writing. The time on the Effective Date when the Merger shall become
effective is referred to as the "EFFECTIVE TIME."
2.03 PLAN OF MERGER. Wachovia and 1st United shall enter into a separate
plan of merger, in substantially the form of Exhibit C, for purposes of any
filing requirement.
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ARTICLE III
CONSIDERATION; EXCHANGE PROCEDURES
3.01 MERGER CONSIDERATION. Subject to the provisions of this Agreement, at
the Effective Time, automatically by virtue of the Merger and without any action
on the part of any Person:
(a) OUTSTANDING 1ST UNITED COMMON STOCK. Each share, excluding
Treasury Stock, of 1st United Common Stock, issued and outstanding
immediately prior to the Effective Time shall become and be converted into
the number of shares of Wachovia Common Stock equal to the Exchange Ratio
(as defined in the following sentence). The "EXCHANGE RATIO" shall mean a
number equal to $20.875 divided by the Wachovia Average Stock Price (as
defined below) (rounded to the nearest one-thousandth) provided that:
(i) if the Wachovia Average Stock Price exceeds $69.64375, the
Exchange Ratio shall be 0.3; and
(ii) if the Wachovia Average Stock Price is less than $56.98125,
the Exchange Ratio shall be 0.366.
The "WACHOVIA AVERAGE STOCK PRICE" shall mean the average of the last
sale prices of Wachovia Common Stock, as reported by the NYSE Composite
Transactions Reporting System (as reported in THE WALL STREET JOURNAL or,
if not reported therein, in another authoritative source), for the ten NYSE
trading days immediately preceding the Effective Date. The Exchange Ratio
and the determination thereof shall be subject to adjustment as set forth
in Section 3.05.
(b) OUTSTANDING WACHOVIA STOCK. Each share of Wachovia Stock issued
and outstanding immediately prior to the Effective Time shall remain issued
and outstanding and unaffected by the Merger.
(c) TREASURY SHARES. Each share of 1st United Stock held as Treasury
Stock immediately prior to the Effective Time shall be canceled and retired
at the Effective Time and no consideration shall be issued in exchange
therefor.
3.02 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS. At the Effective Time,
holders of 1st United Stock shall cease to be, and shall have no rights as,
stockholders of 1st United, other than to receive any dividend or other
distribution with respect to such 1st United Stock with a record date occurring
prior to the Effective Time and the consideration provided under this Article
III. After the Effective Time, there shall be no transfers on the stock transfer
books of 1st United or the Surviving Corporation of shares of 1st United Stock.
3.03 FRACTIONAL SHARES. Notwithstanding any other provision hereof, no
fractional shares of Wachovia Common Stock and no certificates or scrip
therefor, or other evidence of ownership thereof, will be issued in the Merger;
instead, Wachovia shall pay to each holder of 1st United Common Stock who would
otherwise be entitled to a fractional share of Wachovia Common Stock (after
taking into account all Old Certificates delivered by such holder) an amount in
cash (without interest) determined by multiplying such fraction by the Wachovia
Average Stock Price.
3.04 EXCHANGE PROCEDURES. (a) As promptly as practicable after the
Effective Date and in any event within 10 business days thereof, Wachovia or
Wachovia Bank, N.A. (in such capacity, the "EXCHANGE AGENT"), shall send or
cause to be sent to each former holder of record of shares of 1st United Common
Stock immediately prior to the Effective Time transmittal materials for use in
exchanging such stockholder's certificates formerly representing shares of 1st
United Common Stock ("Old Certificates") for the consideration set forth in this
Article III. Wachovia shall cause the certificates representing the shares of
Wachovia Common Stock ("New Certificates") into which shares of a stockholder's
1st United Common Stock are converted on the Effective Date and/or any check in
respect of any fractional share interests or dividends or distributions which
such person shall be entitled to receive to be delivered to such stockholder
upon delivery to the Exchange Agent of Old Certificates representing such shares
of 1st United Common Stock (or indemnity reasonably satisfactory to Wachovia and
the Exchange Agent, if any of such certificates are lost, stolen or destroyed)
owned by such stockholder. No interest will be paid on any cash to be paid in
lieu of fractional share interests or in respect of dividends or distributions
which any such person shall be entitled to receive pursuant to this Article III
upon such delivery. 1st United shall have the right to review and comment on the
transmittal materials before the Effective Date.
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(b) Notwithstanding the foregoing, neither the Exchange Agent nor any party
hereto shall be liable to any former holder of 1st United Common Stock for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(c) At the election of Wachovia, no dividends or other distributions with
respect to Wachovia Common Stock with a record date occurring after the
Effective Time shall be paid to the holder of any unsurrendered Old Certificate
representing shares of 1st United Common Stock converted in the Merger into the
right to receive shares of such Wachovia Common Stock until the holder thereof
shall be entitled to receive New Certificates in exchange therefor in accordance
with the procedures set forth in this Section 3.04, and no such shares of 1st
United Common Stock shall be eligible to vote until the holder of Old
Certificates is entitled to receive New Certificates in accordance with the
procedures set forth in this Section 3.04. After becoming so entitled in
accordance with this Section 3.04, the record holder thereof also shall be
entitled to receive any such dividends or other distributions, without any
interest thereon, which theretofore had become payable with respect to shares of
Wachovia Common Stock such holder had the right to receive upon surrender of the
Old Certificate.
3.05 ANTI-DILUTION PROVISIONS. In the event Wachovia changes (or
establishes a record date for changing) the number of shares of Wachovia Common
Stock issued and outstanding prior to the Effective Date as a result of a stock
split, stock dividend, recapitalization reorganization, reclassification,
reverse stock split or similar transaction (collectively the "RECAPITALIZATION")
with respect to the outstanding Wachovia Common Stock and the record date
therefor shall be prior to the Effective Date, the Exchange Ratio and the
calculation thereof shall be proportionately adjusted so that each holder of 1st
United Common Stock shall receive the number of shares of Wachovia Common Stock
that such holder would have received if the Recapitalization had occurred
immediately after the Effective Time.
3.06 OPTIONS. (a) Unless an Optionee shall provide 1st United with the
notice contemplated by Section 3.06(b) below, then, at the Effective Time, each
outstanding option to purchase shares of 1st United Common Stock (each, a "1ST
UNITED STOCK OPTION"), whether vested or unvested, shall be converted into an
option to acquire, on the same terms and conditions as were applicable under
such 1st United Stock Option, the number of shares of Wachovia Common Stock
equal to (i) the number of shares of 1st United Common Stock subject to the 1st
United Stock Option, multiplied by (ii) the Exchange Ratio (such product rounded
down to the nearest whole number) (a "REPLACEMENT OPTION"), at an exercise price
per share (rounded up to the nearest whole cent) equal to (A) the aggregate
exercise price for the shares of 1st United Common Stock which were purchasable
pursuant to such 1st United Stock Option divided by (B) the number of full
shares of Wachovia Common Stock subject to such Replacement Option in accordance
with the foregoing. Notwithstanding the foregoing, each 1st United Stock Option
which is intended to be an "incentive stock option" (as defined in Section 422
of the Code) shall be adjusted in accordance with the requirements of Section
424 of the Code. At or prior to the Effective Time, 1st United shall take all
action necessary, including obtaining any necessary consents from holders of 1st
United Stock Options, to permit the replacement of the outstanding 1st United
Stock Options by Wachovia pursuant to this Section. Wachovia shall cause any
shares to be issued pursuant to the Replacement Options to be subject to a
registration statement under the Securities Act.
(b) If an Optionee shall provide written notice to 1st United within at
least 10 business days prior to the Effective Time of its election to treat 1st
United Stock Options in accordance with the provisions of this Section 3.06(b),
then, at the Effective Time, each then outstanding 1st United Stock Option,
whether or not vested, shall be canceled and the Optionee shall be entitled to
receive an amount of cash equal to the product of (i) the amount, if any, by
which the Merger Consideration Value (as defined below) exceeds the exercise
price per share subject to such 1st United Stock Option (whether or not vested)
and (ii) the number of shares issuable pursuant to the unexercised portion of
such 1st United Stock Option, less any required withholding taxes (the "OPTION
CONSIDERATION"). "MERGER CONSIDERATION VALUE" shall be equal to the Exchange
Ratio multiplied by the Wachovia Average Stock Price. The Option Consideration
shall be paid promptly following the Effective Time. Prior to the Effective
Time, 1st United shall take such actions as may be necessary to effectuate the
foregoing, including obtaining all applicable consents from the Optionees.
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ARTICLE IV
ACTIONS PENDING ACQUISITION
4.01 FOREBEARANCES OF 1ST UNITED. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement, without the prior
written consent of Wachovia, 1st United will not, and will cause each of its
Subsidiaries not to:
(a) ORDINARY COURSE. Conduct the business of 1st United and its
Subsidiaries other than in the ordinary and usual course or fail to use
reasonable efforts to preserve intact their business organizations and
assets and maintain their rights, franchises and existing relations with
customers, suppliers, employees and business associates, or take any action
reasonably likely to have an adverse affect upon 1st United's ability to
perform any of its material obligations under this Agreement.
(b) CAPITAL STOCK. Other than pursuant to Rights Previously Disclosed
and outstanding on the date hereof, (A) issue, sell or otherwise permit to
become outstanding, or authorize the creation of, any additional shares of
1st United Common Stock or any Rights, (B) enter into any agreement with
respect to the foregoing, or (C) permit any additional shares of 1st United
Common Stock to become subject to new grants of employee or director stock
options, other Rights or similar stock-based employee rights.
(c) DIVIDENDS, ETC. (a) Make, declare, pay or set aside for payment
any dividend (other than (A) quarterly cash dividends on 1st United Common
Stock in an amount not to exceed $0.11 per share (the "Permitted Dividend
Amount") with record and payment dates consistent with past practice and
(B) dividends from wholly owned Subsidiaries to 1st United or another
wholly owned Subsidiary of 1st United) on or in respect of, or declare or
make any distribution on any shares of, 1st United Common Stock or (b)
directly or indirectly adjust, split, combine, redeem, reclassify, purchase
or otherwise acquire, any shares of its capital stock; PROVIDED, HOWEVER,
if Wachovia shall increase its regular quarterly dividend to an amount in
excess of $0.40 per share, then the Permitted Dividend Amount may be
increased by 1st United at its option for all simultaneous and future
dividends in an amount proportionate to the increase in the Wachovia
dividend.
(d) COMPENSATION; EMPLOYMENT AGREEMENTS; ETC. Enter into or amend or
renew any employment, consulting, severance or similar agreements or
arrangements with any director, officer or employee of 1st United or its
Subsidiaries, or grant any salary or wage increase or increase any employee
benefit (including incentive or bonus payments), except (i) for normal
individual increases in compensation to employees in the ordinary course of
business consistent with past practice, (ii) for other changes that are
required by applicable law, (iii) to satisfy Previously Disclosed
contractual obligations existing as of the date hereof, or (iv) for grants
of awards to newly hired employees consistent with past practice.
(e) BENEFIT PLANS. Enter into, establish, adopt or amend (except (i)
as may be required by applicable law or (ii) to satisfy Previously
Disclosed contractual obligations existing as of the date hereof) any
pension, retirement, stock option, stock purchase, savings, profit sharing,
deferred compensation, consulting, bonus, group insurance or other employee
benefit, incentive or welfare contract, plan or arrangement, or any trust
agreement (or similar arrangement) related thereto, in respect of any
director, officer or employee of 1st United or its Subsidiaries, or take
any action to accelerate the vesting or exercisability of stock options,
restricted stock or other compensation or benefits payable thereunder.
(f) DISPOSITIONS. Except as Previously Disclosed, sell, transfer,
mortgage, encumber or otherwise dispose of or discontinue any of its
assets, deposits, business or properties except in the ordinary course of
business and in a transaction that is not material to it and its
Subsidiaries taken as a whole.
(g) ACQUISITIONS. Except as Previously Disclosed, acquire (other than
by way of foreclosures or acquisitions of control in a bona fide fiduciary
capacity or in satisfaction of debts previously contracted in good faith,
in each case in the ordinary and usual course of business consistent with
past practice) all or any portion of, the assets, business, deposits or
properties of any other entity except in the ordinary course of business
and in a transaction that is not material to it and its Subsidiaries taken
as a whole and in which no capital stock or Rights are issued.
(h) GOVERNING DOCUMENTS. Amend the 1st United Certificate, 1st United
By-laws or the certificate of incorporation or by-laws (or similar
governing documents) of any of 1st United's Subsidiaries.
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(i) ACCOUNTING METHODS. Implement or adopt any change in its
accounting principles, practices or methods, other than as may be required
by generally accepted accounting principles.
(j) CONTRACTS. Except in the ordinary course of business consistent
with past practice, enter into or terminate any material contract (as
defined in Section 5.03(k)) or amend or modify in any material respect any
of its existing material contracts.
(k) CLAIMS. Settle any claim, action or proceeding, except for any
claim, action or proceeding involving solely money damages in an amount,
individually or in the aggregate for all such settlements, that is not
material to 1st United and its Subsidiaries taken as a whole.
(l) ADVERSE ACTIONS. (a) Knowingly take any action reasonably likely
to prevent or impede the Merger from qualifying as a reorganization within
the meaning of Section 368 of the Code; or (b) knowingly take any action
that is intended or is reasonably likely to result in (i) any of its
representations and warranties set forth in this Agreement being or
becoming untrue in any material respect at any time at or prior to the
Effective Time, (ii) any of the conditions to the Merger set forth in
Article VII not being satisfied or (iii) a material violation of any
provision of this Agreement except, in each case, as may be required by
applicable law or regulation.
(m) RISK MANAGEMENT. Except as required by applicable law or
regulation, (i) implement or adopt any material change in its interest rate
and other risk management policies, procedures or practices; (ii) fail to
follow its existing policies or practices with respect to managing its
exposure to interest rate and other risk; or (iii) fail to use commercially
reasonable means to avoid any material increase in its aggregate exposure
to interest rate risk.
(n) INDEBTEDNESS. Incur any indebtedness for borrowed money other than
in the ordinary course of business.
(o) COMMITMENTS. Agree or commit to do any of the foregoing.
4.02 FOREBEARANCES OF WACHOVIA. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement, without the prior
written consent of 1st United, Wachovia will not, and will cause each of its
Subsidiaries not to:
(a) EXTRAORDINARY DIVIDENDS. Make, declare, pay or set aside for
payment any extraordinary dividend.
(b) ADVERSE ACTIONS. (i) Take any action which would materially
adversely affect its ability to consummate the Merger; (ii) take any action
reasonably likely to prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368 of the Code; or (iii)
knowingly take any action that is intended or is reasonably likely to
result in (A) any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time at
or prior to the Effective Time, (B) any of the conditions to the Merger set
forth in Article VII not being satisfied; or (C) a material violation of
any provision of this Agreement except, in each case, as may be required by
applicable law.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 DISCLOSURE SCHEDULES. On or prior to the date hereof, Wachovia has
delivered to 1st United a schedule and 1st United has delivered to Wachovia a
schedule (respectively, its "DISCLOSURE SCHEDULE") setting forth, among other
things, items the disclosure of which is necessary or appropriate either in
response to an express disclosure requirement contained in a provision hereof or
as an exception to one or more representations or warranties contained in
Section 5.03 or 5.04 or to one or more of its covenants contained in Article IV;
PROVIDED, that (a) no such item is required to be set forth in a Disclosure
Schedule as an exception to a representation or warranty if its absence would
not be reasonably likely to result in the related representation or warranty
being deemed untrue or incorrect under the standard established by Section 5.02,
and (b) the mere inclusion of an item in a Disclosure Schedule as an exception
to a representation or warranty shall not be deemed an admission by a party that
such item represents a material exception or fact, event or circumstance or that
such item is reasonably likely to result in a Material Adverse Effect.
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5.02 STANDARD. No representation or warranty of 1st United or Wachovia
contained in Section 5.03 or 5.04 shall be deemed untrue or incorrect, and no
party hereto shall be deemed to have breached a representation or warranty, as a
consequence of the existence of any fact, event or circumstance unless such
fact, circumstance or event, individually or taken together with all other
facts, events or circumstances inconsistent with any representation or warranty
contained in Section 5.03 or 5.04, has had or is reasonably likely to have a
Material Adverse Effect.
5.03 REPRESENTATIONS AND WARRANTIES OF 1ST UNITED. Subject to Sections 5.01
and 5.02 and except as Previously Disclosed in a paragraph of its Disclosure
Schedule referring to the relevant paragraph below, 1st United hereby represents
and warrants to Wachovia:
(a) ORGANIZATION, STANDING AND AUTHORITY. 1st United is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida. 1st United is duly qualified to do business and is in
good standing in the states of the United States and any foreign
jurisdictions where its ownership or leasing of property or assets or the
conduct of its business requires it to be so qualified.
(b) 1ST UNITED STOCK. As of the date hereof, the authorized capital
stock of 1st United consists solely of 20,000,000 shares of 1st United
Common Stock, of which not more than 10,160,000 shares were outstanding as
of the date hereof and 5,000,000 shares of 1st United Preferred Stock, of
which no shares were outstanding as of the date hereof. As of the date
hereof, no shares of 1st United Common Stock were held in treasury by 1st
United or otherwise owned by 1st United or its Subsidiaries ("TREASURY
STOCK"). The outstanding shares of 1st United Common Stock have been duly
authorized and are validly issued and outstanding, fully paid and
nonassessable, and subject to no preemptive rights (and were not issued in
violation of any preemptive rights). As of the date hereof, there are no
shares of 1st United Common Stock authorized and reserved for issuance, 1st
United does not have any Rights issued or outstanding with respect to 1st
United Stock, and 1st United does not have any commitment to authorize,
issue or sell any 1st United Common Stock or Rights, except pursuant to
this Agreement and the Stock Option Agreement. The number of shares of 1st
United Common Stock which are issuable and reserved for issuance upon
exercise of 1st United Stock Options as of the date hereof, and the
exercise prices and other terms thereof, are Previously Disclosed in 1st
United's Disclosure Schedule.
(c) SUBSIDIARIES. (i)(A) 1st United has Previously Disclosed a list of
all of its Subsidiaries together with the jurisdiction of organization of
each such Subsidiary, (B) it owns, directly or indirectly, all the issued
and outstanding equity securities of each of its Subsidiaries, (C) no
equity securities of any of its Subsidiaries are or may become required to
be issued (other than to it or its wholly-owned Subsidiaries) by reason of
any Right or otherwise, (D) there are no contracts, commitments,
understandings or arrangements by which any of such Subsidiaries is or may
be bound to sell or otherwise transfer any equity securities of any such
Subsidiaries (other than to it or its wholly-owned Subsidiaries), (E) there
are no contracts, commitments, understandings, or arrangements relating to
its rights to vote or to dispose of such securities and (F) all the equity
securities of each Subsidiary held by 1st United or its Subsidiaries are
fully paid and nonassessable and are owned by 1st United or its
Subsidiaries free and clear of any Liens.
(ii) 1st United does not own beneficially, directly or indirectly, any
equity securities or similar interests of any Person, or any interest in a
partnership or joint venture of any kind, other than its Subsidiaries.
(iii) Each of 1st United's Subsidiaries has been duly organized and is
validly existing in good standing under the laws of the jurisdiction of its
organization, and is duly qualified to do business and in good standing in
the jurisdictions where its ownership or leasing of property or the conduct
of its business requires it to be so qualified.
(d) CORPORATE POWER. 1st United and each of its Subsidiaries has the
corporate power and authority to carry on its business as it is now being
conducted and to own all its properties and assets; and 1st United has the
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the Stock Option Agreement and to
consummate the transactions contemplated hereby and thereby.
(e) CORPORATE AUTHORITY. Subject in the case of this Agreement to
receipt of the requisite approval of the agreement of merger set forth in
this Agreement by the holders of a majority of the outstanding shares of
1st United Common Stock entitled to vote thereon (which is the only
shareholder vote required thereon), this Agreement, the Stock Option
Agreement and the transactions contemplated hereby and thereby have been
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authorized by all necessary corporate action of 1st United and the 1st
United Board prior to the date hereof. This Agreement is a valid and
legally binding obligation of 1st United, enforceable in accordance with
its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors'
rights or by general equity principles). The 1st United Board of Directors
has received the opinion of Hoeffer & Arnett, Inc. to the effect that as of
the date hereof the Merger Consideration is fair to the holders of 1st
United Common Stock from a financial point of view.
(f) REGULATORY FILINGS; NO DEFAULTS. (i) No consents or approvals of,
or filings or registrations with, any Governmental Authority or with any
third party are required to be made or obtained by 1st United or any of its
Subsidiaries in connection with the execution, delivery or performance by
1st United of this Agreement or the Stock Option Agreement or to consummate
the Merger except for (A) the filing of a notice under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR ACT"), (B)
filings of applications or notices with federal and Florida banking
authorities, (C) filings with the SEC and state securities authorities, and
(D) the filing of articles of merger with the North Carolina Secretary
pursuant to the NCBCA and the Florida Department of State pursuant to the
FBCA. As of the date hereof, 1st United is not aware of any reason why the
approvals set forth in Section 7.01(b) will not be received without the
imposition of a condition, restriction or requirement of the type described
in Section 7.01(b).
(ii) Subject to receipt of the regulatory approvals referred to in the
preceding paragraph, and expiration of related waiting periods, and
required filings under federal and state securities laws, the execution,
delivery and performance of this Agreement and the Stock Option Agreement
and the consummation of the transactions contemplated hereby and thereby do
not and will not (A) constitute a breach or violation of, or a default
under, or give rise to any Lien, any acceleration of remedies or any right
of termination under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license, or agreement, indenture or
instrument of 1st United or of any of its Subsidiaries or to which 1st
United or any of its Subsidiaries or properties is subject or bound, (B)
constitute a breach or violation of, or a default under, the 1st United
Certificate or the 1st United By-Laws, or (C) require any consent or
approval under any such law, rule, regulation, judgment, decree, order,
governmental permit or license, agreement, indenture or instrument.
(g) FINANCIAL REPORTS AND SEC DOCUMENTS; NO MATERIAL ADVERSE EFFECT.
(i) 1st United's Annual Reports on Form 10-K or 10-KSB for the fiscal years
ended December 31, 1994, 1995 and 1996, and all other reports, registration
statements, definitive proxy statements or information statements filed or
to be filed by it or any of its Subsidiaries subsequent to December 31,
1994 under the Securities Act, or under Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act, in the form filed or to be filed (collectively, 1st
United's "SEC Documents") with the SEC, as of the date filed or to be
filed, (A) complied or will comply in all material respects as to form with
the applicable requirements under the Securities Act or the Exchange Act,
as the case may be, and (B) did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and each
of the balance sheets contained in or incorporated by reference into any
such SEC Document (including the related notes and schedules thereto)
fairly presents, or will fairly present, the financial position of 1st
United and its Subsidiaries as of its date, and each of the statements of
income and changes in stockholders' equity and cash flows or equivalent
statements in such SEC Documents (including any related notes and schedules
thereto) fairly presents, or will fairly present, the results of
operations, changes in stockholders' equity and changes in cash flows, as
the case may be, of 1st United and its Subsidiaries for the periods to
which they relate, in each case in accordance with generally accepted
accounting principles consistently applied during the periods involved,
except in each case as may be noted therein, subject to normal year-end
audit adjustments in the case of unaudited statements.
(ii) Since December 31, 1996, 1st United and its Subsidiaries have not
incurred any liability other than in the ordinary course of business
consistent with past practice.
(iii) Since December 31, 1996, (A) 1st United and its Subsidiaries
have conducted their respective businesses in the ordinary and usual course
consistent with past practice (excluding the incurrence of expenses related
to this Agreement and the transactions contemplated hereby) and (B) no
event has occurred or circumstance arisen that, individually or taken
together with all other facts, circumstances and events
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(described in any paragraph of Section 5.03 or otherwise), is reasonably
likely to have a Material Adverse Effect with respect to 1st United.
(h) LITIGATION. No litigation, claim or other proceeding before any
court or governmental agency is pending against 1st United or any of its
Subsidiaries and, to 1st United's knowledge, no such litigation, claim or
other proceeding has been threatened.
(i) REGULATORY MATTERS. (i) Neither 1st United nor any of its
Subsidiaries or properties is a party to or is subject to any order,
decree, agreement, memorandum of understanding or similar arrangement with,
or a commitment letter or similar submission to, or extraordinary
supervisory letter from, any federal or state governmental agency or
authority charged with the supervision or regulation of financial
institutions or issuers of securities or engaged in the insurance of
deposits (including, without limitation, the Federal Reserve Board and the
FDIC) or the supervision or regulation of it or any of its Subsidiaries
(collectively, the "REGULATORY AUTHORITIES").
(ii) Neither 1st United nor any of its Subsidiaries has been advised
by any Regulatory Authority that such Regulatory Authority is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
commitment letter, supervisory letter or similar arrangement or submission.
(j) COMPLIANCE WITH LAWS. 1st United and each of its Subsidiaries:
(i) is in compliance with all applicable federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders
or decrees applicable thereto or to the employees conducting such
businesses, including, without limitation, the Equal Credit Opportunity
Act, the Fair Housing Act, the Community Reinvestment Act, the Home
Mortgage Disclosure Act and all other applicable fair lending laws and
other laws relating to discriminatory business practices;
(ii) has all permits, licenses, authorizations, orders and approvals
of, and has made all filings, applications and registrations with, all
Governmental Authorities that are required in order to permit them to own
or lease their properties and to conduct their businesses as presently
conducted; all such permits, licenses, certificates of authority, orders
and approvals are in full force and effect and, to 1st United's knowledge,
no suspension or cancellation of any of them is threatened; and
(iii) has received no notification or communication from any
Governmental Authority (A) asserting that 1st United or any of its
Subsidiaries is not in compliance with any statute, regulation, or
ordinance or (B) threatening to revoke any license, franchise, permit, or
governmental authorization (nor, to 1st United's knowledge, do any grounds
for any of the foregoing exist).
(k) MATERIAL CONTRACTS; DEFAULTS. Except for those agreements and
other documents filed as exhibits to its SEC Documents, neither 1st United
nor any of its Subsidiaries is a party to, bound by or subject to any
agreement, contract, arrangement, commitment or understanding (whether
written or oral) (i) that is a "material contract" within the meaning of
Item 601(b)(10) of the SEC's Regulation S-K or (ii) that restricts the
conduct of business by it or any of its Subsidiaries. Neither it nor any of
its Subsidiaries is in default under any contract, agreement, commitment,
arrangement, lease, insurance policy or other instrument to which it is a
party, by which its respective assets, business, or operations may be bound
or affected, or under which it or its respective assets, business, or
operations receives benefits, and there has not occurred any event that,
with the lapse of time or the giving of notice or both, would constitute
such a default.
(l) NO BROKERS. No action has been taken by 1st United that would give
rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment with respect to the
transactions contemplated by this Agreement, excluding a Previously
Disclosed fee to be paid to Hoeffer & Arnett, Inc.
(m) EMPLOYEE BENEFIT PLANS. (i) Section 5.03(m)(i) of 1st United's
Disclosure Schedule contains a complete and accurate list of all existing
bonus, incentive, deferred compensation, pension, retirement, profit-
sharing, thrift, savings, employee stock ownership, stock bonus, stock
purchase, restricted stock, stock option, severance, welfare and fringe
benefit plans, employment or severance agreements and all similar
practices, policies and arrangements in which any employee or former
employee (the "EMPLOYEES"), consultant or former consultant (the
"CONSULTANTS") or director or former director (the "DIRECTORS") of 1st
United or
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any of its Subsidiaries participates or to which any such Employees,
Consultants or Directors are a party (the "COMPENSATION AND BENEFIT
PLANS"). Neither 1st United nor any of its Subsidiaries has any commitment
to create any additional Compensation and Benefit Plan or to modify or
change any existing Compensation and Benefit Plan.
(ii) Each Compensation and Benefit Plan has been operated and
administered in all material respects in accordance with its terms and with
applicable law, including, but not limited to, ERISA, the Code, the
Securities Act, the Exchange Act, the Age Discrimination in Employment Act,
and any regulations or rules promulgated thereunder, and all filings,
disclosures and notices required by ERISA, the Code, the Securities Act,
the Exchange Act, the Age Discrimination in Employment Act or any other
applicable law have been timely made. Each Compensation and Benefit Plan
which is an "employee pension benefit plan" within the meaning of Section
3(2) of ERISA (a "PENSION PLAN") and which is intended to be qualified
under Section 401(a) of the Code has received a favorable determination
letter (including a determination that the related trust under such
Compensation and Benefit Plan is exempt from tax under Section 501(a) of
the Code) from the Internal Revenue Service ("IRS") for "TRA" (as defined
in Rev. Proc. 93-39), or will file for such determination letter prior to
the expiration of the remedial amendment period for such Compensation and
Benefit Plan, and 1st United is not aware of any circumstances likely to
result in revocation of any such favorable determination letter. There is
no material pending or, to the knowledge of 1st United, threatened legal
action, suit or claim relating to the Compensation and Benefit Plans, other
than routine claims for benefits. Neither 1st United nor any of its
Subsidiaries has engaged in a transaction, or omitted to take any action,
with respect to any Compensation and Benefit Plan that would reasonably be
expected to subject 1st United or any of its Subsidiaries to a tax or
penalty imposed by either Section 4975 of the Code or Section 502 of ERISA,
assuming for purposes of Section 4975 of the Code that the taxable period
of any such transaction expired as of the date hereof.
(iii) No liability (other than for payment of premiums to the PBGC
which have been made or will be made on a timely basis) under Title IV of
ERISA has been or is expected to be incurred by 1st United or any of its
Subsidiaries with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any of them, or any single-employer
plan of any entity (an "ERISA AFFILIATE") which is considered one employer
with 1st United under Section 4001(a)(14) of ERISA or Section 414(b) or (c)
of the Code (an "ERISA AFFILIATE PLAN"). None of 1st United, any of its
Subsidiaries or any ERISA Affiliate has contributed, or has been obligated
to contribute, to a multiemployer plan under Subtitle E of Title IV of
ERISA at any time since September 26, 1980. No notice of a "reportable
event", within the meaning of Section 4043 of ERISA, for which the 30-day
reporting requirement has not been waived, has been required to be filed
for any Compensation and Benefit Plan or by any ERISA Affiliate Plan within
the 12-month period ending on the date hereof, and to the knowledge of 1st
United no such notice will be required to be filed as a result of the
transactions contemplated by this Agreement. The PBGC has not instituted
proceedings to terminate any Pension Plan or ERISA Affiliate Plan and, to
1st United's knowledge, no condition exists that presents a material risk
that such proceedings will be instituted. To the knowledge of 1st United,
there is no pending investigation or enforcement action by the PBGC, the
Department of Labor (the "DOL") or IRS or any other governmental agency
with respect to any Compensation and Benefit Plan. Under each Pension Plan
and ERISA Affiliate Plan, as of the date of the most recent actuarial
valuation performed prior to the date of this Agreement, the actuarially
determined present value of all "benefit liabilities", within the meaning
of Section 4001(a)(16) of ERISA (as determined on the basis of the
actuarial assumptions contained in such actuarial valuation of such Pension
Plan or ERISA Affiliate Plan), did not exceed the then current value of the
assets of such Pension Plan or ERISA Affiliate Plan and since such date
there has been neither an adverse change in the financial condition of such
Pension Plan or ERISA Affiliate Plan nor any amendment or other change to
such Pension Plan or ERISA Affiliate Plan that would increase the amount of
benefits thereunder which reasonably could be expected to change such
result.
(iv) All contributions required to be made under the terms of any
Compensation and Benefit Plan or ERISA Affiliate Plan or any employee
benefit arrangements under any collective bargaining agreement to which 1st
United or any of its Subsidiaries is a party have been timely made or have
been reflected on 1st United's financial statements. Neither any Pension
Plan nor any ERISA Affiliate Plan has an "accumulated funding deficiency"
(whether or not waived) within the meaning of Section 412 of the Code or
Section 302
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of ERISA and all required payments to the PBGC with respect to each Pension
Plan or ERISA Affiliate Plan have been made on or before their due dates.
None of 1st United, any of its Subsidiaries or any ERISA Affiliate (x) has
provided, or would reasonably be expected to be required to provide,
security to any Pension Plan or to any ERISA Affiliate Plan pursuant to
Section 401(a)(29) of the Code, and (y) has taken any action, or omitted to
take any action, that has resulted, or would reasonably be expected to
result, in the imposition of a lien under Section 412(n) of the Code or
pursuant to ERISA.
(v) Neither 1st United nor any of its Subsidiaries has any obligations
to provide retiree health and life insurance or other retiree death
benefits under any Compensation and Benefit Plan, other than benefits
mandated by Section 4980B of the Code, and each such Compensation and
Benefit Plan may be amended or terminated without incurring liability
thereunder. There has been no communication to Employees by 1st United or
any of its Subsidiaries that would reasonably be expected to promise or
guarantee such Employees retiree health or life insurance or other retiree
death benefits on a permanent basis.
(vi) With respect to each Compensation and Benefit Plan, if
applicable, 1st United has provided, or made available to Wachovia, true
and complete copies of existing: (A) Compensation and Benefit Plan
documents and amendments thereto; (B) trust instruments and insurance
contracts; (C) two most recent Forms 5500 filed with the IRS; (D) most
recent actuarial report and financial statement; (E) the most recent
summary plan description; (F) forms filed with the PBGC (other than for
premium payments); (G) most recent determination letter issued by the IRS;
(H) any Form 5310 or Form 5330 filed with the IRS; and (I) most recent
nondiscrimination tests performed under ERISA and the Code (including
401(k) and 401(m) tests).
(vii) The consummation of the transactions contemplated by this
Agreement would not, directly or indirectly (including, without limitation,
as a result of any termination of employment prior to or following the
Effective Time) reasonably be expected to (A) entitle any Employee,
Consultant or Director to any payment (including severance pay or similar
compensation) or any increase in compensation, (B) result in the vesting or
acceleration of any benefits under any Compensation and Benefit Plan or (C)
result in any material increase in benefits payable under any Compensation
and Benefit Plan.
(viii) Neither 1st United nor any of its Subsidiaries maintains any
compensation plans, programs or arrangements the payments under which would
not reasonably be expected to be deductible as a result of the limitations
under Section 162(m) of the Code and the regulations issued thereunder.
(ix) As a result, directly or indirectly, of the transactions
contemplated by this Agreement (including, without limitation, as a result
of any termination of employment prior to or following the Effective Time),
none of Wachovia, 1st United or the Surviving Corporation, or any of their
respective Subsidiaries will be obligated to make a payment that would be
characterized as an "excess parachute payment" to an individual who is a
"disqualified individual" (as such terms are defined in Section 280G of the
Code), without regard to whether such payment is reasonable compensation
for personal services performed or to be performed in the future.
(n) LABOR MATTERS. Neither 1st United nor any of its Subsidiaries is a
party to or is bound by any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization,
nor is 1st United or any of its Subsidiaries the subject of a proceeding
asserting that it or any such Subsidiary has committed an unfair labor
practice (within the meaning of the National Labor Relations Act) or
seeking to compel 1st United or any such Subsidiary to bargain with any
labor organization as to wages or conditions of employment, nor is there
any strike or other labor dispute involving it or any of its Subsidiaries
pending or, to 1st United's knowledge, threatened, nor is 1st United aware
of any activity involving its or any of its Subsidiaries' employees seeking
to certify a collective bargaining unit or engaging in other organizational
activity.
(o) TAKEOVER LAWS; DISSENTERS RIGHTS. 1st United has taken all action
required to be taken by it in order to exempt this Agreement, the Stock
Option Agreement and the transactions contemplated hereby and thereby from,
and this Agreement, the Stock Option Agreement and the transactions
contemplated hereby and thereby are exempt from, the requirements of any
"moratorium", "control share", "fair price" "affiliate transaction",
"business combination" or other antitakeover laws and regulations of any
state (collectively,
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"TAKEOVER LAWS"), including, without limitation, the State of Florida, and
including, without limitation, Sections 607.0901 and 607.0902 of the FBCA.
Holders of 1st United Common Stock do not have dissenters rights in
connection with the Merger.
(p) ENVIRONMENTAL MATTERS. To the knowledge of 1st United and its
Subsidiaries, neither the conduct nor operation of 1st United or its
Subsidiaries nor any condition of any property presently or previously
owned, leased or operated by any of them (including, without limitation, in
a fiduciary or agency capacity), or on which any of them holds a Lien,
violates or violated Environmental Laws and no condition has existed or
event has occurred with respect to any of them or any such property that,
with notice or the passage of time, or both, is reasonably likely to result
in liability under Environmental Laws. Neither 1st United nor any of its
Subsidiaries has received any notice from any person or entity that 1st
United or its Subsidiaries or the operation or condition of any property
ever owned, leased, operated, or held as collateral or in a fiduciary or
agency capacity by any of them are or were in violation of or otherwise are
alleged to have liability under any Environmental Law, including, but not
limited to, responsibility (or potential responsibility) for the cleanup or
other remediation of any pollutants, contaminants, or hazardous or toxic
wastes, substances or materials at, on, beneath, or originating from any
such property.
(q) TAX MATTERS. (i) All Tax Returns that are required to be filed by
or with respect to 1st United and its Subsidiaries have been duly filed,
(ii) all Taxes shown to be due on the Tax Returns referred to in clause (i)
have been paid in full or are being disputed in good faith, (iii) the Tax
Returns referred to in clause (i) have been examined by the Internal
Revenue Service or the appropriate state, local or foreign taxing authority
or the period for assessment of the Taxes in respect of which such Tax
Returns were required to be filed has expired, (iv) all deficiencies
asserted or assessments made as a result of such examinations have been
paid in full or are being disputed in good faith, (v) no issues that have
been raised by the relevant taxing authority in connection with the
examination of any of the Tax Returns referred to in clause (i) are
currently pending, and (vi) no waivers of statutes of limitation have been
given by or requested with respect to any Taxes of 1st United or its
Subsidiaries. 1st United has made available to Wachovia true and correct
copies of the United States federal income Tax Returns filed by 1st United
and its Subsidiaries for each of the three most recent fiscal years ended
on or before December 31, 1993. Neither 1st United nor any of its
Subsidiaries has any liability with respect to income, franchise or similar
Taxes that accrued on or before the end of the most recent period covered
by 1st United's SEC Documents filed on or prior to the date hereof in
excess of the amounts accrued with respect thereto that are reflected in
the financial statements included in 1st United's SEC Documents filed prior
to the date hereof. As of the date hereof, neither 1st United nor any of
its Subsidiaries has any reason to believe that any conditions exist that
might prevent or impede the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
(r) DERIVATIVES AND SIMILAR INSTRUMENTS. All interest rate swaps,
caps, floors, option agreements, futures and forward contracts and other
similar arrangements, whether entered into for 1st United's own account, or
for the account of one or more of 1st United's Subsidiaries or their
customers (all of which are listed on 1st United's Disclosure Schedule),
were entered into (i) in accordance with prudent business practices and all
applicable laws, rules, regulations and regulatory policies and (ii) with
counterparties believed to be financially responsible at the time; and each
of them constitutes the valid and legally binding obligation of 1st United
or one of its Subsidiaries, enforceable in accordance with its terms
(except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar
laws of general applicability relating to or affecting creditors' rights or
by general equity principles), and are in full force and effect. Neither
1st United nor its Subsidiaries, nor to 1st United's knowledge any other
party thereto, is in breach of any of its obligations under any such
agreement or arrangement.
(s) BOOKS AND RECORDS. The books and records of 1st United and its
Subsidiaries have been fully, properly and accurately maintained in all
material respects, and there are no material inaccuracies or discrepancies
of any kind contained or reflected therein, and they fairly present the
financial position of 1st United and its Subsidiaries.
(t) INSURANCE. 1st United's Disclosure Schedule sets forth all of the
insurance policies, binders, or bonds maintained by 1st United or its
Subsidiaries or under which 1st United pays the premiums ("Insurance
Policies"). 1st United and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of 1st
United reasonably has determined to be prudent in accordance with
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industry practices. All the Insurance Policies are in full force and
effect; 1st United and its Subsidiaries are not in material default
thereunder; and all claims thereunder have been filed in due and timely
fashion.
(u) ASSET CLASSIFICATION. 1st United has Previously Disclosed a list,
accurate and complete in all material respects, of the aggregate amounts of
loans, extensions of credit or other assets of it and its Subsidiaries that
have been classified by it as of June 30, 1997 (the "Asset
Classification"); and no amounts of loans, extensions of credit or other
assets that have been classified as of June 30, 1997 by any Regulatory
Authority as "Other Loans Specially Mentioned", "Substandard", "Doubtful",
"Loss", or words of similar import are excluded from the amounts disclosed
in the Asset Classification, other than amounts of loans, extensions of
credit or other assets that were charged off by it or a Subsidiary prior to
June 30, 1997.
(v) DISCLOSURE. The representations and warranties contained in this
Section 5.03 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Section 5.03 not misleading.
5.04 REPRESENTATIONS AND WARRANTIES OF WACHOVIA. Subject to Sections 5.01
and 5.02 and except as Previously Disclosed in a paragraph of its Disclosure
Schedule referring to the relevant paragraph below, Wachovia hereby represents
and warrants to 1st United as follows:
(a) ORGANIZATION, STANDING AND AUTHORITY. Wachovia is duly organized,
validly existing and in good standing under the laws of the State of North
Carolina. Wachovia is duly qualified to do business and is in good standing
in the states of the United States and foreign jurisdictions where its
ownership or leasing of property or assets or the conduct of its business
requires it to be so qualified. Wachovia has in effect all federal, state,
local, and foreign governmental authorizations necessary for it to own or
lease its properties and assets and to carry on its business as it is now
conducted.
(b) WACHOVIA STOCK. (i) As of the date hereof, the authorized capital
stock of Wachovia consists solely of 500,000,000 shares of Wachovia Common
Stock, of which no more than 160,000,000 shares were outstanding as of the
date hereof and 50,000,000 shares of Wachovia Preferred Stock, of which no
shares were outstanding as of the date hereof. As of the date hereof,
except in connection with its publicly disclosed acquisitions, or as
previously disclosed, Wachovia does not have any Rights issued or
outstanding with respect to Wachovia Stock, and Wachovia does not have any
commitment to authorize, issue or sell any Wachovia Stock or Rights, except
pursuant to this Agreement.
(ii) The shares of Wachovia Common Stock to be issued in exchange for
shares of 1st United Common Stock in the Merger, when issued in accordance
with the terms of this Agreement, will be duly authorized, validly issued,
fully paid and nonassessable.
(c) SUBSIDIARIES. Each of Wachovia's Significant Subsidiaries has been
duly organized and is validly existing in good standing under the laws of
the jurisdiction of its organization, and is duly qualified to do business
and in good standing in the jurisdictions where its ownership or leasing of
property or the conduct of its business requires it to be so qualified and
it owns, directly or indirectly, all the issued and outstanding equity
securities of each of its Significant Subsidiaries.
(d) CORPORATE POWER. Wachovia and each of its Significant Subsidiaries
has the corporate power and authority to carry on its business as it is now
being conducted and to own all its properties and assets; and Wachovia has
the corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby.
(e) CORPORATE AUTHORITY. This Agreement and the transactions
contemplated hereby have been authorized by all necessary corporate action
of Wachovia and its Board of Directors and does not require any vote of
stockholders. This Agreement is a valid and legally binding agreement of
Wachovia enforceable in accordance with its terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws of general applicability
relating to or affecting creditors' rights or by general equity
principles).
(f) REGULATORY APPROVALS; NO DEFAULTS. (i) No consents or approvals
of, or filings or registrations with, any court, administrative agency or
commission or other governmental authority or instrumentality or with any
third party are required to be made or obtained by Wachovia or any of its
Subsidiaries in connection with the execution, delivery or performance by
Wachovia of this Agreement or to consummate the Merger
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except for (A) the filing of a notice under the Hart-Scott-Rodino Antitrust
Improvement Act of 1976 (the "HSR ACT"); (B) the filing of applications and
notices, as applicable, with federal and Florida banking authorities; (C)
approval of the listing on the NYSE of Wachovia Common Stock to be issued
in the Merger; (D) the filing and declaration of effectiveness of the
Registration Statement; (E) the filing of articles of merger with the North
Carolina Secretary pursuant to the NCBCA and the Florida Department of
State pursuant to the FBCA; (F) such filings as are required to be made or
approvals as are required to be obtained under the securities or "Blue Sky"
laws of various states in connection with the issuance of Wachovia Stock in
the Merger; and (G) receipt of the approvals set forth in Section 7.01(b).
As of the date hereof, Wachovia is not aware of any reason why the
approvals set forth in Section 7.01(b) will not be received without the
imposition of a condition, restriction or requirement of the type described
in Section 7.01(b).
(ii) Subject to receipt of the regulatory approvals referred to in the
preceding paragraph and expiration of the related waiting periods, and
required filings under federal and state securities laws, the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (A) constitute a
breach or violation of, or a default under, or give rise to any Lien, any
acceleration of remedies or any right of termination under, any law, rule
or regulation or any judgment, decree, order, governmental permit or
license, or agreement, indenture or instrument of Wachovia or of any of its
Subsidiaries or to which Wachovia or any of its Subsidiaries or properties
is subject or bound, (B) constitute a breach or violation of, or a default
under, the certificate of incorporation or by-laws (or similar governing
documents) of Wachovia or any of its Subsidiaries, or (C) require any
consent or approval under any such law, rule, regulation, judgment, decree,
order, governmental permit or license, agreement, indenture or instrument.
(g) FINANCIAL REPORTS AND SEC DOCUMENTS; MATERIAL ADVERSE EFFECT. (i)
Wachovia's SEC Documents, as of the date filed, (A) complied or will comply
in all material respects as to form with the applicable requirements under
the Securities Act or the Exchange Act, as the case may be, and (B) did not
and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; and each of the balance sheets contained in or
incorporated by reference into any such SEC Document (including the related
notes and schedules thereto) fairly presents, or will fairly present, the
financial position of Wachovia and its Subsidiaries as of its date, and
each of the statements of income and changes in stockholders' equity and
cash flows or equivalent statements in such SEC Documents (including any
related notes and schedules thereto) fairly presents, or will fairly
present, the results of operations, changes in stockholders' equity and
changes in cash flows, as the case may be, of Wachovia and its Subsidiaries
for the periods to which they relate, in each case in accordance with
generally accepted accounting principles consistently applied during the
periods involved, except in each case as may be noted therein, subject to
normal year-end audit adjustments in the case of unaudited statements.
(ii) Since December 31, 1996, no event has occurred or circumstance
arisen that, individually or taken together with all other facts,
circumstances and events (described in any paragraph of Section 5.04 or
otherwise), is reasonably likely to have a Material Adverse Effect with
respect to Wachovia.
(h) LITIGATION; REGULATORY ACTION. (i) Other than as set forth in its
SEC Documents filed on or before the date hereof, no litigation, claim or
other proceeding before any Governmental Authority is pending against
Wachovia or any of its Subsidiaries and, to the best of Wachovia's
knowledge, no such litigation, claim or other proceeding has been
threatened.
(ii) Neither Wachovia nor any of its Subsidiaries or properties is a
party to or is subject to any order, decree, agreement, memorandum of
understanding or similar arrangement with, or a commitment letter or
similar submission to, or extraordinary supervisory letter from a
Regulatory Authority, nor has Wachovia or any of its Subsidiaries been
advised by a Regulatory Authority that such agency is contemplating issuing
or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
commitment letter, supervisory letter or similar submission or arrangement.
(i) COMPLIANCE WITH LAWS. Wachovia and each of its Subsidiaries:
(i) in the conduct of its business, is in compliance with all
applicable federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees applicable
thereto or
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to the employees conducting such businesses, including, without
limitation, the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act, the Home Mortgage Disclosure Act and all
other applicable fair lending laws and other laws relating to
discriminatory business practices;
(ii) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Governmental Authorities that are required in order to permit
them to conduct their businesses substantially as presently conducted;
all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect and, to the best of its
knowledge, no suspension or cancellation of any of them is threatened;
and
(iii) as of the date hereof, has received no notification or
communication from any Governmental Authority (A) asserting that
Wachovia or any of its Subsidiaries is not in compliance with any
statute, regulation, or ordinance or (B) threatening to revoke any
license, franchise, permit, or governmental authorization (nor, to
Wachovia's knowledge, do any grounds for any of the foregoing exist).
(j) NO BROKERS. No action has been taken by Wachovia that would give
rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment with respect to the
transactions contemplated by this Agreement.
(k) TAX MATTERS. As of the date hereof, neither Wachovia nor any of
its Subsidiaries has any reason to believe that any conditions exist that
might prevent or impede the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
(l) DISCLOSURE. The representations and warranties contained in this
Section 5.04 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Section 5.04 not misleading.
ARTICLE VI
COVENANTS
6.01 REASONABLE BEST EFFORTS. Subject to the terms and conditions of this
Agreement, each of 1st United and Wachovia agrees to use its reasonable best
efforts in good faith to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or desirable, or advisable under
applicable laws, so as to permit consummation of the Merger as promptly as
practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other party hereto to
that end.
6.02 STOCKHOLDER APPROVALS. 1st United agrees to take, in accordance with
applicable law or NASDAQ rules and its articles of incorporation and by-laws,
all action necessary to convene an appropriate meeting of stockholders of 1st
United to consider and vote upon the approval and adoption of this Agreement and
any other matters required to be approved by 1st United's stockholders for
consummation of the Merger (including any adjournment or postponement, the "1ST
UNITED MEETING") as promptly as practicable after the Registration Statement is
declared effective. Except to the extent legally required for the discharge by
the 1st United Board of its fiduciary duties as advised in writing by its
counsel, the 1st United Board shall recommend such approval, and 1st United
shall take all reasonable, lawful action to solicit such approval by its
stockholders. At the request of Wachovia, 1st United will utilize a professional
proxy solicitation firm to assist it in procuring the necessary stockholder
vote. The 1st United Board in discharging its fiduciary duties in connection
with the foregoing, may request and take into consideration a letter from
Hoeffer & Arnett, Inc., regarding whether or not the Merger Consideration to be
received by 1st United's shareholders in connection with the Merger is fair to
such shareholders from a financial point of view.
6.03 REGISTRATION STATEMENT. (a) Wachovia agrees to prepare a registration
statement on Form S-4 (the "REGISTRATION STATEMENT") to be filed by Wachovia
with the SEC in connection with the issuance of Wachovia Stock in the Merger
(including the proxy statement and prospectus and other proxy solicitation
materials of 1st United constituting a part thereof (the "Proxy Statement") and
all related documents). Each of the parties hereto agrees to cooperate, and to
cause its Subsidiaries to cooperate, with the other, its counsel and its
accountants, in preparation of the Registration Statement and the Proxy
Statement; and PROVIDED that 1st United and its Subsidiaries have cooperated as
required above, Wachovia agrees to file the Proxy Statement in preliminary form
with the SEC as promptly as reasonably practicable, and to file the Registration
Statement with the SEC as soon as
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reasonably practicable after any SEC comments with respect to the preliminary
Proxy Statement are resolved. Each of 1st United and Wachovia agrees to use all
reasonable efforts to cause the Registration Statement to be declared effective
under the Securities Act as promptly as reasonably practicable after filing
thereof. Wachovia also agrees to use all reasonable efforts to obtain all
necessary state securities law or "Blue Sky" permits and approvals required to
carry out the transactions contemplated by this Agreement. 1st United agrees to
furnish to Wachovia all information concerning 1st United, its Subsidiaries,
officers, directors and stockholders as may be reasonably requested in
connection with the foregoing.
(b) Each of 1st United and Wachovia agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it for
inclusion or incorporation by reference in (i) the Registration Statement will,
at the time the Registration Statement and each amendment or supplement thereto,
if any, becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and (ii) the
Proxy Statement and any amendment or supplement thereto will, at the date of
mailing to stockholders and at the time of the 1st United Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
or any statement which, in the light of the circumstances under which such
statement is made, will be false or misleading with respect to any material
fact, or which will omit to state any material fact necessary in order to make
the statements therein not false or misleading or necessary to correct any
statement in any earlier statement in the Proxy Statement or any amendment or
supplement thereto. Each of 1st United and Wachovia further agrees that if it
shall become aware prior to the Effective Date of any information furnished by
it that would cause any of the statements in the Proxy Statement to be false or
misleading with respect to any material fact, or to omit to state any material
fact necessary to make the statements therein not false or misleading, to
promptly inform the other party thereof and to take the necessary steps to
correct the Proxy Statement.
(c) Wachovia agrees to advise 1st United, promptly after Wachovia receives
notice thereof, of the time when the Registration Statement has become effective
or any supplement or amendment has been filed, of the issuance of any stop order
or the suspension of the qualification of Wachovia Stock for offering or sale in
any jurisdiction, of the initiation or threat of any proceeding for any such
purpose, or of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information.
6.04 PRESS RELEASES. Each of 1st United and Wachovia agrees that it will
not, without the prior approval of the other party (which will not unreasonably
be withheld), issue any press release or written statement for general
circulation relating to the transactions contemplated hereby, except as
otherwise required by applicable law or regulation or NYSE rules.
6.05 ACCESS; INFORMATION. (a) Each of 1st United and Wachovia agrees that
upon reasonable notice and subject to applicable laws relating to the exchange
of information, it shall afford the other party and the other party's officers,
employees, counsel, accountants and other authorized representatives, such
access during normal business hours throughout the period prior to the Effective
Time to the books, records (including, without limitation, tax returns and work
papers of independent auditors), properties, personnel and to such other
information as any party may reasonably request and, during such period, it
shall furnish promptly to such other party (i) a copy of each material report,
schedule and other document filed by it pursuant to the requirements of federal
or state securities or banking laws, and (ii) all other information concerning
the business, properties and personnel of it as the other may reasonably
request.
(b) Each agrees that it will not, and will cause its representatives not
to, use any information obtained pursuant to this Section 6.05 (as well as any
other information obtained prior to the date hereof in connection with the
entering into of this Agreement) for any purpose unrelated to the consummation
of the transactions contemplated by this Agreement. Subject to the requirements
of law, each party will keep confidential, and will cause its representatives to
keep confidential, all information and documents obtained pursuant to this
Section 6.05 (as well as any other information obtained prior to the date hereof
in connection with the entering into of this Agreement) unless such information
(i) was already known to such party, (ii) becomes available to such party from
other sources not known by such party to be bound by a confidentiality
obligation, (iii) is disclosed with the prior written approval of the party to
which such information pertains or (iv) is or becomes readily ascertainable from
published information or trade sources. In the event that this Agreement is
terminated or the transactions contemplated by this Agreement shall otherwise
fail to be consummated, each party shall promptly cause all copies of
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documents or extracts thereof containing information and data as to another
party hereto to be returned to the party which furnished the same. No
investigation by either party of the business and affairs of the other shall
affect or be deemed to modify or waive any representation, warranty, covenant or
agreement in this Agreement, or the conditions to either party's obligation to
consummate the transactions contemplated by this Agreement.
6.06 ACQUISITION PROPOSALS. 1st United agrees that neither it nor any of
its Subsidiaries nor any of the respective officers and directors of 1st United
or its Subsidiaries shall, and 1st United shall direct and use its reasonable
best efforts to cause its employees, agents and representatives (including,
without limitation, any investment banker, attorney or accountant retained by it
or any of its Subsidiaries) not to, initiate, solicit or encourage, directly or
indirectly, any enquiries or the making of any proposal or offer (including,
without limitation, any proposal or offer to stockholders of 1st United) with
respect to a merger, consolidation or similar transaction involving, or any
purchase of all or any significant portion of the assets or any equity
securities of, 1st United or its Significant Subsidiary (any such proposal or
offer being hereinafter referred to as an "ACQUISITION PROPOSAL") or, except to
the extent legally required for the discharge by the 1st United Board of its
fiduciary duties as advised in writing by its counsel, engage in any
negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any person relating to an Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or implement an Acquisition
Proposal. 1st United shall immediately cease and cause to be terminated any
activities, discussions or negotiations conducted prior to the date of this
Agreement with any parties other than Wachovia with respect to any of the
foregoing and shall use its reasonable best efforts to enforce any
confidentiality or similar agreement relating to an Acquisition Proposal. 1st
United shall promptly (within 24 hours) advise Wachovia following the receipt by
1st United of any Acquisition Proposal and the substance thereof (including the
identity of the person making such Acquisition Proposal), and advise Wachovia of
any developments of significance with respect to such Acquisition Proposal
immediately upon the occurrence thereof.
6.07 AFFILIATE AGREEMENTS. (a) Not later than the 15th day prior to the
mailing of the Proxy Statement, 1st United shall deliver to Wachovia, a schedule
of each person that, to its knowledge, is or is reasonably likely to be, as of
the date of the 1st United Meeting, deemed to be an "affiliate" of it (each, a
"1ST UNITED AFFILIATE") as that term is used in Rule 145 under the Securities
Act.
(b) 1st United shall use its reasonable best efforts to cause each person
who may be deemed to be a 1st United Affiliate to execute and deliver to
Wachovia on or before the date of mailing of the Proxy Statement an "affiliates
agreement" in form and substance reasonably satisfactory to Wachovia.
6.08 SHAREHOLDER AGREEMENTS. 1st United shall use its best efforts to cause
any shareholder of 1st United who is also a director of 1st United and who has
not entered into an agreement with Wachovia, in the form of Exhibit B hereto,
prior to the date hereof, to enter into such an agreement within five business
days of the date hereof.
6.09 TAKEOVER LAWS. No party hereto shall take any action that would cause
the transactions contemplated by this Agreement or the Stock Option Agreement to
be subject to requirements imposed by any Takeover Law and each of them shall
take all necessary steps within its control to exempt (or ensure the continued
exemption of) the transactions contemplated by this Agreement from, or if
necessary challenge the validity or applicability of, any applicable Takeover
Law, as now or hereafter in effect.
6.10 CERTAIN POLICIES. Prior to the Effective Date, 1st United shall,
consistent with generally accepted accounting principles and on a basis mutually
satisfactory to it and Wachovia, modify and change its loan, litigation and real
estate valuation policies and practices (including loan classifications and
levels of reserves) so as to be applied on a basis that is consistent with those
of Wachovia; provided, however, that 1st United shall not be obligated to take
any such action pursuant to this Section 6.09 unless and until Wachovia
acknowledges that all conditions to its obligation to consummate the Merger have
been satisfied.
6.11 NYSE LISTING. Wachovia agrees to use its reasonable best efforts to
list, prior to the Effective Date, on the NYSE, subject to official notice of
issuance, the shares of Wachovia Common Stock to be issued to the holders of 1st
United Common Stock in the Merger.
6.12 REGULATORY APPLICATIONS. (a) Wachovia and 1st United and their
respective Subsidiaries shall cooperate and use their respective reasonable best
efforts to prepare all documentation, to effect all filings and to obtain all
permits, consents, approvals and authorizations of all third parties and
Governmental Authorities necessary to
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consummate the transactions contemplated by this Agreement. Each of Wachovia and
1st United shall have the right to review in advance, and to the extent
practicable each will consult with the other, in each case subject to applicable
laws relating to the exchange of information, with respect to, all material
written information submitted to any third party or any Governmental Authority
in connection with the transactions contemplated by this Agreement. In
exercising the foregoing right, each of the parties hereto agrees to act
reasonably and as promptly as practicable. Each party hereto agrees that it will
consult with the other party hereto with respect to the obtaining of all
material permits, consents, approvals and authorizations of all third parties
and Governmental Authorities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will keep the other
party appraised of the status of material matters relating to completion of the
transactions contemplated hereby.
(b) Each party agrees, upon request, to furnish the other party with all
information concerning itself, its Subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary or advisable
in connection with any filing, notice or application made by or on behalf of
such other party or any of its Subsidiaries to any third party or Governmental
Authority.
6.13 INDEMNIFICATION. (a) Following the Effective Date and for a period of
six years thereafter, Wachovia shall indemnify, defend and hold harmless the
past and present directors and officers of 1st United and its Subsidiaries
(each, an "INDEMNIFIED PARTY") against all costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages or
liabilities (collectively, "Costs") incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of actions or omissions occurring
at or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement) to the fullest extent that 1st
United is permitted to indemnify (and advance expenses to) its directors and
officers under the laws of the State of Florida, the 1st United Certificate and
the 1st United By-Laws as in effect on the date hereof; PROVIDED that any
determination required to be made with respect to whether an officer's or
director's conduct complies with the standards set forth under Florida law, the
1st United Certificate and the 1st United By-Laws shall be made by independent
counsel (which shall not be counsel that provides material services to Wachovia)
selected by Wachovia and reasonably acceptable to such officer or director; and
PROVIDED, FURTHER, that in the absence of applicable judicial precedent to the
contrary, such counsel, in making such determination, shall presume such
officer's or director's conduct complied with such standard and Wachovia shall
have the burden to demonstrate that such officer's or director's conduct failed
to comply with such standard.
(b) For a period of three years from the Effective Time, Wachovia shall use
its reasonable best efforts to provide that portion of director's and officer's
liability insurance that serves to reimburse the present and former officers and
directors of 1st United or any of its Subsidiaries (determined as of the
Effective Time) (as opposed to 1st United) with respect to claims against such
directors and officers arising from facts or events which occurred before the
Effective Time, which insurance shall contain at least the same coverage and
amounts, and contain terms and conditions no less advantageous, as that coverage
currently provided by 1st United; PROVIDED, HOWEVER, that in no event shall
Wachovia be required to expend more than 200 percent of the current amount
expended by 1st United (the "INSURANCE AMOUNT") to maintain or procure such
directors and officers insurance coverage; PROVIDED, FURTHER, that if Wachovia
is unable to maintain or obtain the insurance called for by this Section
6.12(b), Wachovia shall use its reasonable best efforts to obtain as much
comparable insurance as is available for the Insurance Amount; PROVIDED,
FURTHER, that officers and directors of 1st United or any Subsidiary may be
required to make application and provide customary representations and
warranties to Wachovia's insurance carrier for the purpose of obtaining such
insurance.
(c) Any Indemnified Party wishing to claim indemnification under Section
6.12(a), upon learning of any claim, action, suit, proceeding or investigation
described above, shall promptly notify Wachovia thereof; PROVIDED that the
failure so to notify shall not affect the obligations of Wachovia under Section
6.12(a) unless and to the extent that Wachovia is actually prejudiced as a
result of such failure.
(d) If Wachovia or any of its successors or assigns shall consolidate with
or merge into any other entity and shall not be the continuing or surviving
entity of such consolidation or merger or shall transfer all or substantially
all of its assets to any entity, then and in each case, proper provision shall
be made so that the successors and assigns of Wachovia shall assume the
obligations set forth in this Section 6.12.
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6.14 BENEFIT PLANS. As soon as practicable following the Effective Time
(but in no event later than April 1, 1998 if the Effective Time occurs prior to
April 1, 1998) (i) Wachovia will provide employees of 1st United who become
employees of Wachovia with employee benefit plans no less favorable in the
aggregate than those provided to similarly situated employees of Wachovia; (ii)
any such employees will receive credit for service with 1st United or any of its
Subsidiaries or predecessors prior to the Effective Time for the purpose of
determining eligibility and vesting; (iii) Wachovia shall cause any and all
pre-existing condition limitations (to the extent such limitations did not apply
to a pre-existing condition under the 1st United Compensation and Benefit Plans)
and eligibility waiting periods under group health plans to be waived with
respect to such participants and their eligible dependents ; and (iv) Wachovia
shall extend its Retirement Medical Plan to employees of 1st United who become
employees of Wachovia and retire following December 31, 1997 or the Effective
Date, if later; and would qualify for retirement under the Wachovia Retirement
Income Plan and; PROVIDED, FURTHER, that a maximum or of 20 years of service
with 1st United shall be recognized for benefit accrual purposes under the
Retirement Medical Plan. All discretionary awards and benefits under any
employee benefit plans of Wachovia shall be subject to the discretion of the
persons or committee administering such plans. Wachovia shall honor, pursuant to
the terms of the 1st United Compensation and Benefit Plans Previously Disclosed,
all employee benefit obligations to current and former employees of 1st United
under such Plans.
6.15 ACCOUNTANTS' LETTERS. Each of 1st United and Wachovia shall use its
reasonable best efforts to cause to be delivered to the other party, and to
Wachovia's directors and officers who sign the Registration Statement, letters
of Ernst & Young, LLP, independent auditors, dated (i) the date on which the
Registration Statement shall become effective and (ii) a date shortly prior to
the Effective Date, and addressed to such other party, and such directors and
officers, in form and substance customary for "comfort" letters delivered by
independent accountants in accordance with Statement of Accounting Standards No.
72.
6.16 NOTIFICATION OF CERTAIN MATTERS. Each of 1st United and Wachovia shall
give prompt notice to the other of any fact, event or circumstance known to it
that (i) is reasonably likely, individually or taken together with all other
facts, events and circumstances known to it, to result in any Material Adverse
Effect with respect to it or (ii) would cause or constitute a material breach of
any of its representations, warranties, covenants or agreements contained
herein.
6.17 STOCK PLANS. 1st United shall at or prior to the Effective Time cause
to be terminated any obligation to issue shares of 1st United Common Stock under
any dividend reinvestment plan and any other plan or arrangement pursuant to
which it issues 1st United Common Stock or rights thereto, except for its stock
option plans with respect to issued options Previously Disclosed.
6.18 DIVIDEND COORDINATION. The Board of Directors of 1st United shall
cause its regular quarterly dividend record dates and payment dates for 1st
United Common Stock to be the same as Wachovia's regular quarterly dividend
record dates and payment dates for Wachovia Common Stock, and 1st United shall
not thereafter change its regular dividend payment dates and record dates.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each of Wachovia and 1st United to consummate the
Merger is subject to the fulfillment or written waiver by Wachovia and 1st
United prior to the Effective Time of each of the following conditions:
(a) STOCKHOLDER APPROVAL. This Agreement shall have been duly adopted
by the affirmative vote of the holders of a majority of the outstanding
shares of 1st United Common Stock entitled to vote thereon in accordance
with Section 607.1103 of the FBCA, other applicable law and the 1st United
Certificate and the 1st United By-Laws.
(b) REGULATORY APPROVALS. All regulatory approvals required to
consummate the transactions contemplated hereby, shall have been obtained
and shall remain in full force and effect and all statutory waiting periods
in respect thereof shall have expired and no such approvals shall contain
any conditions, restrictions or requirements which the Wachovia Board
reasonably determines in good faith would (i) following the Effective Time,
have a Material Adverse Effect on the Surviving Corporation and its
Subsidiaries taken as a
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whole or (ii) reduce the benefits of the transactions contemplated hereby
to such a degree that Wachovia would not have entered into this Agreement
had such conditions, restrictions or requirements been known at the date
hereof.
(c) NO INJUNCTION. No Governmental Authority of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute,
rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits
consummation of the transactions contemplated by this Agreement.
(d) REGISTRATION STATEMENT. The Registration Statement shall have
become effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the
SEC.
(e) BLUE SKY APPROVALS. All permits and other authorizations under
state securities laws necessary to consummate the transactions contemplated
hereby and to issue the shares of Wachovia Common Stock to be issued in the
Merger shall have been received and be in full force and effect.
(f) LISTING. The shares of Wachovia Common Stock to be issued in the
Merger shall have been approved for listing on the NYSE, subject to
official notice of issuance.
7.02 CONDITIONS TO OBLIGATION OF 1ST UNITED. The obligation of 1st United
to consummate the Merger is also subject to the fulfillment or written waiver by
1st United prior to the Effective Time of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Wachovia set forth in this Agreement, after giving effect to Sections
5.01 and 5.02, shall be true and correct as of the date of this Agreement
and as of the Effective Date as though made on and as of the Effective Date
(except that representations and warranties that by their terms speak as of
the date of this Agreement or some other date shall be true and correct as
of such date), and 1st United shall have received a certificate, dated the
Effective Date, signed on behalf of Wachovia by the Chief Executive Officer
and the Chief Financial Officer of Wachovia to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF WACHOVIA. Wachovia shall have
performed in all material respects all obligations required to be performed
by them under this Agreement at or prior to the Effective Time, and 1st
United shall have received a certificate, dated the Effective Date, signed
on behalf of Wachovia by the Chief Executive Officer and the Chief
Financial Officer of Wachovia to such effect.
(c) OPINION OF 1ST UNITED'S COUNSEL. 1st United shall have received an
opinion of Akerman, Senterfitt & Eidson, P.A., counsel to 1st United, to
the effect that, on the basis of facts, representations and assumptions set
forth in such opinion, (i) the Merger constitutes a "reorganization" within
the meaning of Section 368 of the Code and (ii) no gain or loss will be
recognized by stockholders of 1st United who receive shares of Wachovia
Common Stock in exchange for shares of 1st United Common Stock, except that
gain or loss may be recognized as to cash received in lieu of fractional
share interests. In rendering its opinion, Akerman, Senterfitt & Eidson,
P.A. may require and rely upon representations contained in letters from
1st United and others.
(d) ACCOUNTANTS' LETTERS. 1st United shall have received the letters
referred to in Section 6.14 from Ernst & Young, LLP, Wachovia's independent
auditors.
7.03 CONDITIONS TO OBLIGATION OF WACHOVIA. The obligation of Wachovia to
consummate the Merger is also subject to the fulfillment or written waiver by
Wachovia prior to the Effective Time of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of 1st United set forth in this Agreement, after giving effect to Sections
5.01 and 5.02, shall be true and correct as of the date of this Agreement
and as of the Effective Date as though made on and as of the Effective Date
(except that representations and warranties that by their terms speak as of
the date of this Agreement or some other date shall be true and correct as
of such date) and Wachovia shall have received a certificate, dated the
Effective Date, signed on behalf of 1st United by the Chief Executive
Officer and the Chief Financial Officer of 1st United to such effect.
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(b) PERFORMANCE OF OBLIGATIONS OF 1ST UNITED. 1st United shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Effective Time, and Wachovia
shall have received a certificate, dated the Effective Date, signed on
behalf of 1st United by the Chief Executive Officer and the Chief Financial
Officer of 1st United to such effect.
(c) OPINION OF WACHOVIA'S COUNSEL. Wachovia shall have received an
opinion of Sullivan & Cromwell, special counsel to Wachovia, dated the
Effective Date, to the effect that, on the basis of facts, representations
and assumptions set forth in such opinion, the Merger constitutes a
reorganization under Section 368 of the Code. In rendering its opinion,
Sullivan & Cromwell may require and rely upon representations contained in
letters from Wachovia and others.
(d) ACCOUNTANTS' LETTERS. Wachovia and its directors and officers who
sign the Registration Statement shall have received the letters referred to
in Section 6.14 from Ernst & Young, LLP, 1st United's independent auditors.
ARTICLE VIII
TERMINATION
8.01 TERMINATION. This Agreement may be terminated, and the Acquisition may
be abandoned:
(a) MUTUAL CONSENT. At any time prior to the Effective Time, by the
mutual consent of Wachovia and 1st United, if the Board of Directors of
each so determines by vote of a majority of the members of its entire
Board.
(b) BREACH. At any time prior to the Effective Time, by Wachovia or
1st United, if its Board of Directors so determines by vote of a majority
of the members of its entire Board, in the event of either: (i) a breach by
the other party of any representation or warranty contained herein (subject
to the standard set forth in Section 5.02), which breach cannot be or has
not been cured within 30 days after the giving of written notice to the
breaching party of such breach; or (ii) a breach by the other party of any
of the covenants or agreements contained herein, which breach cannot be or
has not been cured within 30 days after the giving of written notice to the
breaching party of such breach, provided that such breach (whether under
(i) or (ii)) would be reasonably likely, individually or in the aggregate
with other breaches, to result in a Material Adverse Effect.
(c) DELAY. At any time prior to the Effective Time, by Wachovia or 1st
United, if its Board of Directors so determines by vote of a majority of
the members of its entire Board, in the event that the Acquisition is not
consummated by March 31, 1998, except to the extent that the failure of the
Acquisition then to be consummated arises out of or results from the
knowing action or inaction of the party seeking to terminate pursuant to
this Section 8.01(c).
(d) NO APPROVAL. By 1st United or Wachovia, if its Board of Directors
so determines by a vote of a majority of the members of its entire Board,
in the event (i) the approval of any Governmental Authority required for
consummation of the Merger and the other transactions contemplated by this
Agreement shall have been denied by final nonappealable action of such
Governmental Authority or (ii) the stockholder approval required by Section
7.01(a) herein is not obtained at the 1st United Meeting.
(e) FAILURE TO RECOMMEND, ETC. At any time prior to the 1st United
Meeting, by Wachovia if 1st United Board shall have failed to make its
recommendation referred to in Section 6.02, withdrawn such recommendation
or modified or changed such recommendation in a manner adverse in any
respect to the interests of Wachovia.
8.02 EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination of
this Agreement and the abandonment of the Acquisition pursuant to this Article
VIII, no party to this Agreement shall have any liability or further obligation
to any other party hereunder except (i) as set forth in Section 9.01 and (ii)
that termination will not relieve a breaching party from liability for any
willful breach of this Agreement giving rise to such termination. In the event
of the termination of this Agreement, Wachovia agrees that, until March 31,
1998, it will not, directly or indirectly, solicit to employ any person known by
it to be a current senior officer of 1st United, so long as they are employed by
1st United, or directly or indirectly solicit or encourage any such officers or
employees
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to leave 1st United's employ (other than pursuant to general advertisements of
employment in publications not specifically targeted at 1st United's employees),
in either case, without obtaining the prior written consent of 1st United.
ARTICLE IX
MISCELLANEOUS
9.01 SURVIVAL. No representations, warranties, agreements and covenants
contained in this Agreement shall survive the Effective Time (other than Section
6.13 and this Article IX which shall survive the Effective Time) or the
termination of this Agreement if this Agreement is terminated prior to the
Effective Time (other than Sections 6.03(b), 6.04, 6.05, 8.02 and this Article
IX which shall survive such termination).
9.02 WAIVER; AMENDMENT. Prior to the Effective Time, any provision of this
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 between the parties
hereto executed in the same manner as this Agreement, except that, after the 1st
United Meeting, this Agreement may not be amended if it would violate the FBCA.
9.03 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
9.04 GOVERNING LAW. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of North Carolina applicable to contracts
made and to be performed entirely within such State (except to the extent that
mandatory provisions of Federal law or of the FBCA are applicable).
9.05 EXPENSES. Each party hereto will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby, except
that printing expenses and SEC fees shall be shared equally between 1st United
and Wachovia.
9.06 NOTICES. All notices, requests and other communications hereunder to a
party shall be in writing and shall be deemed given if personally delivered,
telecopied (with confirmation) or mailed by registered or certified mail (return
receipt requested) to such party at its address set forth below or such other
address as such party may specify by notice to the parties hereto.
If to 1st United, to:
1st United Bancorp
180 Royal Palm Way
Palm Beach, Florida 33480
Attention: Warren Orlando
Telephone: (561) 832-7766
Facsimile: (561) 832-5778
With a copy to:
1st United Bancorp
980 N. Federal Highway
Boca Raton, Florida 33432
Attention: John Marino
Telephone: (561) 659-6825
Facsimile: (561) 659-2065
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With a copy to:
Akerman, Senterfitt & Eidson, P.A.
Phillips Point -- East Tower
Suite 900
777 South Flagler Drive
West Palm Beach, FL 33401
Attention: Thomas Kamradt
Telephone: (561) 659-5990
Facsimile: (561) 659-6313
If to Wachovia, to:
Wachovia Corporation
301 North Main Street
Winston-Salem, North Carolina 27101
Attention: Chairman of the Board
Telephone: (910) 770-5000
Facsimile: (910) 770-5959
With a copy to:
Wachovia Corproation
301 North Main Street
Winston-Salem, North Carolina 27101
Attention: Kenneth W. McAllister
Telephone: (910) 732-5141
Facsimile: (910) 732-5959
With a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: H. Rodgin Cohen, Esq.
Mark J. Menting, Esq.
Telephone: (212) 558-4000
Facsimile: (212) 558-3588
9.07 ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES. This Agreement and
the Stock Option Agreement entered into represent the entire understanding of
the parties hereto with reference to the transactions contemplated hereby and
thereby and this Agreement supersedes any and all other oral or written
agreements heretofore made (other than the Stock Option Agreement). Except for
Section 6.13, nothing in this Agreement expressed or implied, is intended to
confer upon any person, other than the parties hereto or their respective
successors, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
9.08 INTERPRETATION; EFFECT. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of, or
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and are not part of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
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* * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
1ST UNITED BANCORP
By: /S/ WARREN S. ORLANDO
Name: Warren S. Orlando
Title: President & CEO
WACHOVIA CORPORATION
By: /S/ L. M. BAKER, JR.
Name: L.M. Baker, Jr.
Title: President & CEO
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EXHIBIT C
FORM OF PLAN OF MERGER
PLAN OF MERGER, dated as of , 1997 (this "AGREEMENT") by and
between 1st United Bancorp ("1ST UNITED") and Wachovia Corporation ("WACHOVIA").
RECITALS
A. 1ST UNITED BANCORP. 1st United is a Florida corporation, having its
principal place of business in Boca Raton, Florida.
B. WACHOVIA CORPORATION. Wachovia is a North Carolina corporation,
having its principal place of business in both Winston-Salem, North
Carolina and Atlanta, Georgia.
C. MERGER AGREEMENT. The parties hereto have entered into the
Agreement and Plan of Merger, dated as of August 6, 1997 (the "Merger
Agreement").
D. BOARD ACTION. The respective Boards of Directors of each of
Wachovia and 1st United have determined that it is in the best interests of
their respective companies and their stockholders to consummate the
strategic business combination transaction provided for herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. The following terms are used in this Agreement with
the meanings set forth below:
"EFFECTIVE DATE" means the effective date of the Merger.
"EFFECTIVE TIME" means the effective time of the Merger.
"FBCA" means the Florida 1989 Business Corporation Act.
"NCBCA" means the North Carolina Business Corporation Act.
"NYSE" means the New York Stock Exchange, Inc.
"TREASURY STOCK" shall mean shares of 1st United Stock held by 1st
United or any of its Subsidiaries or by Wachovia or any of its
Subsidiaries, in each case other than in a fiduciary capacity or as a
result of debts previously contracted in good faith.
"1ST UNITED COMMON STOCK" means the common stock, par value $0.01 per
share, of 1st United.
"WACHOVIA COMMON STOCK" means the common stock, par value $5.00 per
share, of Wachovia.
"WACHOVIA PREFERRED STOCK" means the preferred stock, par value $5.00
per share, of Wachovia.
"WACHOVIA STOCK" means, collectively, Wachovia Common Stock and
Wachovia Preferred Stock.
2. THE MERGER. At the Effective Time, 1st United shall merge with and into
Wachovia (the "Merger"), the separate corporate existence of 1st United shall
cease and Wachovia shall survive and continue to exist as a North Carolina
corporation (Wachovia, as the surviving corporation in the Merger, sometimes
being referred to herein as the "Surviving Corporation").
3. EFFECT OF THE MERGER. Subject to the satisfaction or waiver of the
conditions set forth in Article VII of the Merger Agreement and the terms and
conditions thereof, the Merger shall become effective upon the occurrence of the
filing in the office of the Florida Department of State of articles of merger in
accordance with Section 607.1105 of the FBCA and the filing in the Office of the
Secretary of State of the State of North Carolina (the "North Carolina
Secretary") of articles of merger in accordance with Section 55-11-05 of the
NCBCA or such later date and time as may be set forth in such articles. The
Merger shall have the effects prescribed in the NCBCA and the FBCA.
4. ARTICLES OF INCORPORATION AND BY-LAWS. The articles of incorporation and
by-laws of Wachovia immediately after the Merger shall be those of Wachovia as
in effect immediately prior to the Effective Time.
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5. DIRECTORS AND OFFICERS OF WACHOVIA. The directors and officers of
Wachovia immediately after the Merger shall be the directors and officers of
Wachovia immediately prior to the Effective Time, until such time as their
successors shall be duly elected and qualified.
6. MERGER CONSIDERATION. Subject to the provisions of this Agreement and
the Merger Agreement, at the Effective Time, automatically by virtue of the
Merger and without any action on the part of any Person:
(a) OUTSTANDING 1ST UNITED COMMON STOCK. Each share, excluding
Treasury Stock, of 1st United Common Stock issued and outstanding
immediately prior to the Effective Time shall become and be converted into
of a share of Wachovia Common Stock (the "EXCHANGE RATIO").
(b) OUTSTANDING WACHOVIA STOCK. Each share of Wachovia Stock issued
and outstanding immediately prior to the Effective Time shall remain issued
and outstanding and unaffected by the Merger.
(c) TREASURY SHARES. Each share of 1st United Stock held as Treasury
Stock immediately prior to the Effective Time shall be canceled and retired
at the Effective Time and no consideration shall be issued in exchange
therefor.
7. RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS. At the Effective Time, holders
of 1st United Stock shall cease to be, and shall have no rights as, stockholders
of 1st United, other than to receive any dividend or other distribution with
respect to such 1st United Stock with a record date occurring prior to the
Effective Time and the consideration provided hereto. After the Effective Time,
there shall be no transfers on the stock transfer books of 1st United or the
Surviving Corporation of shares of 1st United Stock.
8. FRACTIONAL SHARES. Notwithstanding any other provision hereof, no
fractional shares of Wachovia Common Stock and no certificates or scrip
therefor, or other evidence of ownership thereof, will be issued in the Merger;
instead, Wachovia shall pay to each holder of 1st United Common Stock who would
otherwise be entitled to a fractional share of Wachovia Common Stock (after
taking into account all Old Certificates (as defined below) delivered by such
holder) an amount in cash (without interest) determined by multiplying such
fraction by the average of the last sale prices of Wachovia Common Stock, as
reported by the NYSE Composite Transactions Reporting System (as reported in The
Wall Street Journal or, if not reported therein, in another authoritative
source), for the ten NYSE trading days immediately preceding the Effective Date.
9. EXCHANGE PROCEDURES. (a) As promptly as practicable after the Effective
Date, Wachovia shall send or cause to be sent to each former holder of record of
shares of 1st United Common Stock immediately prior to the Effective Time
transmittal materials for use in exchanging such stockholder's certificates,
formerly representing shares of 1st United Common Stock ("Old Certificates").
Wachovia shall cause the certificates representing the shares of Wachovia Common
Stock ("New Certificates") into which shares of a stockholder's 1st United
Common Stock are converted on the Effective Date and/or any check in respect of
any fractional share interests or dividends or distributions which such person
shall be entitled to receive to be delivered to such stockholder upon delivery
to the Exchange Agent of Old Certificates representing such shares of 1st United
Common Stock (or indemnity reasonably satisfactory to Wachovia and the Exchange
Agent, if any of such certificates are lost, stolen or destroyed) owned by such
stockholder. No interest will be paid on any such cash to be paid in lieu of
fractional share interests or in respect of dividends or distributions which any
such person shall be entitled to receive upon such delivery.
(b) Notwithstanding the foregoing, neither the Exchange Agent nor any party
hereto shall be liable to any former holder of 1st United Stock for any amount
properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(c) At the election of Wachovia, no dividends or other distributions with
respect to Wachovia Common Stock with a record date occurring after the
Effective Time shall be paid to the holder of any unsurrendered Old Certificate
representing shares of 1st United Common Stock converted in the Merger into the
right to receive shares of such Wachovia Common Stock until the holder thereof
shall be entitled to receive New Certificates in exchange therefor, and no such
shares of 1st United Common Stock shall be eligible to vote until the holder of
Old Certificates is entitled to receive New Certificates. After becoming so
entitled, the record holder thereof also shall be entitled to receive any such
dividends or other distributions, without any interest thereon, which
theretofore had become payable with respect to shares of Wachovia Common Stock
such holder had the right to receive upon surrender of the Old Certificate.
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10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
11. GOVERNING LAW. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of North Carolina applicable to contracts
made and to be performed entirely within such State (except to the extent that
mandatory provisions of FBCA are applicable).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
1ST UNITED BANCORP
By:
Name:
Title:
WACHOVIA CORPORATION
By:
Name:
Title:
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APPENDIX B
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of August 6, 1997, between Wachovia
Corporation, a North Carolina corporation ("Grantee"), and 1st United Bancorp, a
Florida corporation ("Issuer").
WITNESSETH:
WHEREAS, Grantee and Issuer have entered into an Agreement and Plan of
Merger (the "Merger Agreement");
WHEREAS, as a condition and an inducement to Grantee's entering into the
Merger Agreement, Issuer is granting Grantee the Option (as hereinafter
defined); and
WHEREAS, a majority of the Board of Directors of Issuer has approved the
grant of the Option and the Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein and in the Merger Agreement, the parties hereto
agree as follows:
1. (a) Issuer hereby grants to Grantee an unconditional, irrevocable option
(the "Option") to purchase, subject to the terms hereof, up to an aggregate of
2,020,000 fully paid and nonassessable shares of the common stock, par value
$0.01 per share, of Issuer ("Common Stock") at a price per share of $18.75;
PROVIDED, HOWEVER, that in the event Issuer issues or agrees to issue any shares
of Common Stock (other than shares of Common Stock issued pursuant to stock
options granted pursuant to any employee benefit plan prior to the date hereof)
at a price less $18.75 (as adjusted pursuant to subsection (b) of Section 5),
such price shall be equal to such lesser price (such price, as adjusted if
applicable, the "Option Price"); PROVIDED, FURTHER, that in no event shall the
number of shares for which this Option is exercisable exceed 19.9% of the issued
and outstanding shares of Common Stock. The number of shares of Common Stock
that may be received upon the exercise of the Option and the Option Price are
subject to adjustment as herein set forth.
(b) In the event that any additional shares of Common Stock are issued or
otherwise become outstanding after the date of this Agreement (other than
pursuant to this Agreement and other than pursuant to an event described in
Section 5(a) hereof), the number of shares of Common Stock subject to the Option
shall be increased so that, after such issuance, such number together with any
shares of Common Stock previously issued pursuant hereto, equals 19.9% of the
number of shares of Common Stock then issued and outstanding without giving
effect to any shares subject or issued pursuant to the Option. Nothing contained
in this Section l(b) or elsewhere in this Agreement shall be deemed to authorize
Issuer to issue shares in breach of any provision of the Merger Agreement.
2. (a) The Holder (as hereinafter defined) may exercise the Option, in
whole or part, if, but only if, both an Initial Triggering Event (as hereinafter
defined) and a Subsequent Triggering Event (as hereinafter defined) shall have
occurred prior to the occurrence of an Exercise Termination Event (as
hereinafter defined), PROVIDED that the Holder shall have sent the written
notice of such exercise (as provided in subsection (e) of this Section 2) within
six (6) months following such Subsequent Triggering Event (or such later period
as provided in Section 10). Each of the following shall be an Exercise
Termination Event: (i) the Effective Time of the Merger; (ii) termination of the
Merger Agreement in accordance with the provisions thereof if such termination
occurs prior to the occurrence of an Initial Triggering Event except a
termination by Grantee pursuant to Section 8.01(b) or Section 8.01(e) of the
Merger Agreement or by Grantee or Issuer pursuant to Section 8.01(d)(ii) of the
Merger Agreement (each, a "Listed Termination"); or (iii) the passage of
eighteen (18) months (or such longer period as provided in Section 10) after
termination of the Merger Agreement if such termination follows the occurrence
of an Initial Triggering Event or is a Listed Termination. The term "Holder"
shall mean the holder or holders of the Option. Notwithstanding anything to the
contrary contained herein, (i) the Option may not be exercised at any time when
Grantee shall be in material breach of any of its covenants or agreements
contained in the Merger Agreement such that Issuer shall be entitled to
terminate the Merger Agreement pursuant to Section 8.01(b) thereof and (ii) this
Agreement shall automatically terminate upon the proper termination of the
Merger Agreement by Issuer pursuant to Section 8.01(b) thereof as a result of
the material breach by Grantee of its covenants or agreements contained in the
Merger Agreement.
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(b) The term "Initial Triggering Event" shall mean any of the following
events or transactions occurring on or after the date hereof:
(i) Issuer or its Significant Subsidiary (as defined in Rule 1-02 of
Regulation S-X promulgated by the Securities and Exchange Commission (the
"SEC")) (the "Issuer Subsidiary"), without having received Grantee's prior
written consent, shall have entered into an agreement to engage in an
Acquisition Transaction (as hereinafter defined) with any person (the term
"person" for purposes of this Agreement having the meaning assigned thereto
in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and the rules and regulations thereunder) other
than Grantee or any of its Subsidiaries (each a "Grantee Subsidiary") or
the Board of Directors of Issuer (the "Issuer Board") shall have
recommended that the shareholders of Issuer approve or accept any
Acquisition Transaction other than as contemplated by the Merger Agreement.
For purposes of this Agreement, (a) "Acquisition Transaction" shall mean
(x) a merger or consolidation, or any similar transaction, involving Issuer
or the Issuer Subsidiary (other than mergers, consolidations or similar
transactions involving solely Issuer and/or one or more wholly-owned
Subsidiaries of the Issuer, PROVIDED, any such transaction is not entered
into in violation of the terms of the Merger Agreement), (y) a purchase,
lease or other acquisition of all or any substantial part of the assets or
deposits of Issuer or the Issuer Subsidiary, or (z) a purchase or other
acquisition (including by way of merger, consolidation, share exchange or
otherwise) of securities representing 10% or more of the voting power of
Issuer or the Issuer Subsidiary and (b) "Subsidiary" shall have the meaning
set forth in Rule 12b-2 under the 1934 Act;
(ii) Any person other than the Grantee or any Grantee Subsidiary shall
have acquired beneficial ownership or the right to acquire beneficial
ownership of 10% or more of the outstanding shares of Common Stock (the
term "beneficial ownership" for purposes of this Agreement having the
meaning assigned thereto in Section 13(d) of the 1934 Act, and the rules
and regulations thereunder);
(iii) The shareholders of Issuer shall have voted and failed to
approve the Merger Agreement and the Merger at a meeting which has been
held for that purpose or any adjournment or postponement thereof, or such
meeting shall not have been held in violation of the Merger Agreement or
shall have been cancelled prior to termination of the Merger Agreement if,
prior to such meeting (or if such meeting shall not have been held or shall
have been cancelled, prior to such termination), it shall have been
publicly announced that any person (other than Grantee or any of its
Subsidiaries) shall have made, or disclosed an intention to make, a
proposal to engage in an Acquisition Transaction;
(iv) The Issuer Board shall have withdrawn or modified (or publicly
announced its intention to withdraw or modify) in any manner adverse in any
respect to Grantee its recommendation that the shareholders of Issuer
approve the transactions contemplated by the Merger Agreement, or Issuer or
the Issuer Subsidiary shall have authorized, recommended, proposed (or
publicly announced its intention to authorize, recommend or propose) an
agreement to engage in an Acquisition Transaction with any person other
than Grantee or a Grantee Subsidiary;
(v) Any person other than Grantee or any Grantee Subsidiary shall have
made a proposal to Issuer or its shareholders to engage in an Acquisition
Transaction and such proposal shall have been publicly announced;
(vi) Any person other than Grantee or any Grantee Subsidiary shall
have filed with the SEC a registration statement or tender offer materials
with respect to a potential exchange or tender offer that would constitute
an Acquisition Transaction (or filed a preliminary proxy statement with the
SEC with respect to a potential vote by its shareholders to approve the
issuance of shares to be offered in such an exchange offer);
(vii) Issuer shall have willfully breached any covenant or obligation
contained in the Merger Agreement in anticipation of engaging in an
Acquisition Transaction, and following such breach Grantee would be
entitled to terminate the Merger Agreement (whether immediately or after
the giving of notice or passage of time or both); or
(viii) Any person other than Grantee or any Grantee Subsidiary shall
have filed an application or notice with the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board") or other federal or
state bank regulatory or antitrust authority, which application or notice
has been accepted for processing, for approval to engage in an Acquisition
Transaction.
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(c) The term "Subsequent Triggering Event" shall mean any of the following
events or transactions occurring after the date hereof:
(i) The acquisition by any person (other than Grantee or any Grantee
Subsidiary) of beneficial ownership of 20% or more of the then outstanding
Common Stock; or
(ii) The occurrence of the Initial Triggering Event described in
clause (i) of subsection (b) of this Section 2, except that the percentage
referred to in clause (z) of the second sentence thereof shall be 20%.
(d) Issuer shall notify Grantee promptly in writing of the occurrence of
any Initial Triggering Event or Subsequent Triggering Event (together, a
"Triggering Event"), it being understood that the giving of such notice by
Issuer shall not be a condition to the right of the Holder to exercise the
Option.
(e) In the event the Holder is entitled to and wishes to exercise the
Option (or any portion thereof), it shall send to Issuer a written notice (the
date of which being herein referred to as the "Notice Date") specifying (i) the
total number of shares it will purchase pursuant to such exercise and (ii) a
place and date not earlier than three business days nor later than 60 business
days from the Notice Date for the closing of such purchase (the "Closing Date");
PROVIDED, that if prior notification to or approval of the Federal Reserve Board
or any other regulatory or antitrust agency is required in connection with such
purchase, the Holder shall promptly file the required notice or application for
approval, shall promptly notify Issuer of such filing, and shall expeditiously
process the same and the period of time that otherwise would run pursuant to
this sentence shall run instead from the date on which any required notification
periods have expired or been terminated or such approvals have been obtained and
any requisite waiting period or periods shall have passed. Any exercise of the
Option shall be deemed to occur on the Notice Date relating thereto.
(f) At the closing referred to in subsection (e) of this Section 2, the
Holder shall (i) pay to Issuer the aggregate purchase price for the shares of
Common Stock purchased pursuant to the exercise of the Option in immediately
available funds by wire transfer to a bank account designated by Issuer and (ii)
present and surrender this Agreement to Issuer at its principal executive
offices, PROVIDED that the failure or refusal of the Issuer to designate such a
bank account or accept surrender of this Agreement shall not preclude the Holder
from exercising the Option.
(g) At such closing, simultaneously with the delivery of immediately
available funds as provided in subsection (f) of this Section 2, Issuer shall
deliver to the Holder a certificate or certificates representing the number of
shares of Common Stock purchased by the Holder and, if the Option should be
exercised in part only, a new Option evidencing the rights of the Holder thereof
to purchase the balance of the shares purchasable hereunder.
(h) Certificates for Common Stock delivered at a closing hereunder may be
endorsed with a restrictive legend that shall read substantially as follows:
"The transfer of the shares represented by this certificate is subject
to certain provisions of an agreement, dated as of , 199 , between
the registered holder hereof and Issuer and to resale restrictions arising
under the Securities Act of 1933, as amended. A copy of such agreement is
on file at the principal office of Issuer and will be provided to the
holder hereof without charge upon receipt by Issuer of a written request
therefor."
It is understood and agreed that: (i) the reference to the resale restrictions
of the Securities Act of 1933, as amended (the "1933 Act") in the above legend
shall be removed by delivery of substitute certificate(s) without such reference
if the Holder shall have delivered to Issuer a copy of a letter from the staff
of the SEC, or an opinion of counsel, in form and substance reasonably
satisfactory to Issuer, to the effect that such legend is not required for
purposes of the 1933 Act; (ii) the reference to the provisions of this Agreement
in the above legend shall be removed by delivery of substitute certificate(s)
without such reference if the shares have been sold or transferred in compliance
with the provisions of this Agreement and under circumstances that do not
require the retention of such reference in the opinion of Counsel to the Holder;
and (iii) the legend shall be removed in its entirety if the conditions in the
preceding clauses (i) and (ii) are both satisfied. In addition, such
certificates shall bear any other legend as may be required by law.
(i) Upon the giving by the Holder to Issuer of the written notice of
exercise of the Option provided for under subsection (e) of this Section 2 and
the tender of the applicable purchase price in immediately available funds, the
Holder shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such exercise,
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notwithstanding that the stock transfer books of Issuer shall then be closed or
that certificates representing such shares of Common Stock shall not then be
actually delivered to the Holder. Issuer shall pay all expenses, and any and all
United States federal, state and local taxes and other charges that may be
payable in connection with the preparation, issue and delivery of stock
certificates under this Section 2 in the name of the Holder or its assignee,
transferee or designee.
3. Issuer agrees: (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Common Stock so that the Option may be exercised without additional
authorization of Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Common Stock; (ii)
that it will not, by charter amendment or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act, avoid or
seek to avoid the observance or performance of any of the covenants,
stipulations or conditions to be observed or performed hereunder by Issuer;
(iii) promptly to take all action as may from time to time be required
(including (x) complying with all applicable premerger notification, reporting
and waiting period requirements specified in 15 U.S.C. Section 18a and
regulations promulgated thereunder and (y) in the event, under the Bank Holding
Company Act of 1956, as amended (the "BHCA"), or the Change in Bank Control Act
of 1978, as amended, or any state or other federal banking law, prior approval
of or notice to the Federal Reserve Board or to any state or other federal
regulatory authority is necessary before the Option may be exercised,
cooperating fully with the Holder in preparing such applications or notices and
providing such information to the Federal Reserve Board or such state or other
federal regulatory authority as they may require) in order to permit the Holder
to exercise the Option and Issuer duly and effectively to issue shares of Common
Stock pursuant hereto; and (iv) promptly to take all action provided herein to
protect the rights of the Holder against dilution.
4. This Agreement (and the Option granted hereby) are exchangeable, without
expense, at the option of the Holder, upon presentation and surrender of this
Agreement at the principal office of Issuer, for other Agreements providing for
Options of different denominations entitling the holder thereof to purchase, on
the same terms and subject to the same conditions as are set forth herein, in
the aggregate the same number of shares of Common Stock purchasable hereunder.
The terms "Agreement" and "Option" as used herein include any Agreements and
related Options for which this Agreement (and the Option granted hereby) may be
exchanged. Upon receipt by Issuer of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Agreement, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Agreement, if mutilated, Issuer will
execute and deliver a new Agreement of like tenor and date. Any such new
Agreement executed and delivered shall constitute an additional contractual
obligation on the part of Issuer, whether or not the Agreement so lost, stolen,
destroyed or mutilated shall at any time be enforceable by anyone.
5. In addition to the adjustment in the number of shares of Common Stock
that are purchasable upon exercise of the Option pursuant to Section 1 of this
Agreement, the number of shares of Common Stock purchasable upon the exercise of
the Option and the Option Price shall be subject to adjustment from time to time
as provided in this Section 5.
(a) In the event of any change in, or distributions in respect of, the
Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, subdivisions, conversions, exchanges of shares
or the like, the type and number of shares of Common Stock purchasable upon
exercise hereof shall be appropriately adjusted and proper provision shall be
made so that, in the event that any additional shares of Common Stock are to be
issued or otherwise become outstanding as a result of any such change (other
than pursuant to an exercise of the Option), the number of shares of Common
Stock that remain subject to the Option shall be increased so that, after such
issuance and together with shares of Common Stock previously issued pursuant to
the exercise of the Option (as adjusted on account of any of the foregoing
changes in the Common Stock), it equals 19.9% of the number of shares of Common
Stock then issued and outstanding.
(b) Whenever the number of shares of Common Stock purchasable upon exercise
hereof is adjusted as provided in this Section 5, the Option Price shall be
adjusted by multiplying the Option Price by a fraction, the numerator of which
shall be equal to the number of shares of Common Stock purchasable prior to the
adjustment and the denominator of which shall be equal to the number of shares
of Common Stock purchasable after the adjustment.
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<PAGE>
6. Upon the occurrence of a Subsequent Triggering Event that occurs prior
to an Exercise Termination Event, Issuer shall, at the request of Grantee
delivered within twelve (12) months (or such later period as provided in Section
10) of such Subsequent Triggering Event (whether on its own behalf or on behalf
of any subsequent holder of this Option (or part thereof) or any of the shares
of Common Stock issued pursuant hereto), promptly prepare, file and keep current
a registration statement under the 1933 Act covering any shares issued and
issuable pursuant to this Option and shall use its reasonable best efforts to
cause such registration statement to become effective and remain current in
order to permit the sale or other disposition of any shares of Common Stock
issued upon total or partial exercise of this Option ("Option Shares") in
accordance with any plan of disposition requested by Grantee. Issuer will use
its reasonable best efforts to cause such registration statement promptly to
become effective and then to remain effective for such period not in excess of
180 days from the day such registration statement first becomes effective or
such shorter time as may be reasonably necessary to effect such sales or other
dispositions. Grantee shall have the right to demand two such registrations. The
Issuer shall bear the costs of such registrations (including, but not limited
to, Issuer's attorneys' fees, printing costs and filing fees, except for
underwriting discounts or commissions, brokers' fees and the fees and
disbursements of Grantee's counsel related thereto). The foregoing
notwithstanding, if, at the time of any request by Grantee for registration of
Option Shares as provided above, Issuer is in registration with respect to an
underwritten public offering by Issuer of shares of Common Stock, and if in the
good faith judgment of the managing underwriter or managing underwriters, or, if
none, the sole underwriter or underwriters, of such offering the offer and sale
of the Option Shares would interfere with the successful marketing of the shares
of Common Stock offered by Issuer, the number of Option Shares otherwise to be
covered in the registration statement contemplated hereby may be reduced;
PROVIDED, HOWEVER, that after any such required reduction the number of Option
Shares to be included in such offering for the account of the Holder shall
constitute at least 25% of the total number of shares to be sold by the Holder
and Issuer in the aggregate; and PROVIDED FURTHER, HOWEVER, that if such
reduction occurs, then Issuer shall file a registration statement for the
balance as promptly as practicable thereafter as to which no reduction pursuant
to this Section 6 shall be permitted or occur and the Holder shall thereafter be
entitled to one additional registration and the twelve (12) month period
referred to in the first sentence of this section shall be increased to
twenty-four (24) months. Each such Holder shall provide all information
reasonably requested by Issuer for inclusion in any registration statement to be
filed hereunder. If requested by any such Holder in connection with such
registration, Issuer shall become a party to any underwriting agreement relating
to the sale of such shares, but only to the extent of obligating itself in
respect of representations, warranties, indemnities and other agreements
customarily included in such underwriting agreements for Issuer. Upon receiving
any request under this Section 6 from any Holder, Issuer agrees to send a copy
thereof to any other person known to Issuer to be entitled to registration
rights under this Section 6, in each case by promptly mailing the same, postage
prepaid, to the address of record of the persons entitled to receive such
copies. Notwithstanding anything to the contrary contained herein, in no event
shall the number of registrations that Issuer is obligated to effect be
increased by reason of the fact that there shall be more than one Holder as a
result of any assignment or division of this Agreement.
7. (a) At any time after the occurrence of a Repurchase Event (as defined
below), (i) at the request of the Holder, delivered prior to an Exercise
Termination Event (or such later period as provided in Section 10), Issuer (or
any successor thereto) shall repurchase the Option from the Holder at a price
(the "Option Repurchase Price") equal to the amount by which (A) the
market/offer price (as defined below) exceeds (B) the Option Price, multiplied
by the number of shares for which this Option may then be exercised and (ii) at
the request of the owner of Option Shares from time to time (the "Owner"),
delivered prior to an Exercise Termination Event (or such later period as
provided in Section 10), Issuer (or any successor thereto) shall repurchase such
number of the Option Shares from the Owner as the Owner shall designate at a
price (the "Option Share Repurchase Price") equal to the market/offer price
multiplied by the number of Option Shares so designated. The term "market/offer
price" shall mean the highest of (i) the price per share of Common Stock at
which a tender or exchange offer therefor has been made, (ii) the price per
share of Common Stock to be paid by any third party pursuant to an agreement
with Issuer, (iii) the highest closing price for shares of Common Stock within
the six-month period immediately preceding the date the Holder gives notice of
the required repurchase of this Option or the Owner gives notice of the required
repurchase of Option Shares, as the case may be, or (iv) in the event of a sale
of all or any substantial part of Issuer's assets or deposits, the sum of the
net price paid in such sale for such assets or deposits and the current market
value of the remaining net assets of Issuer as determined by a nationally
recognized investment banking firm selected by the Holder or the Owner, as the
case may be, and reasonably acceptable to Issuer,
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<PAGE>
divided by the number of shares of Common Stock of Issuer outstanding at the
time of such sale. In determining the market/offer price, the value of
consideration other than cash shall be determined by a nationally recognized
investment banking firm selected by the Holder or Owner, as the case may be, and
reasonably acceptable to Issuer.
(b) The Holder and the Owner, as the case may be, may exercise its right to
require Issuer to repurchase the Option and any Option Shares pursuant to this
Section 7 by surrendering for such purpose to Issuer, at its principal office, a
copy of this Agreement or certificates for Option Shares, as applicable,
accompanied by a written notice or notices stating that the Holder or the Owner,
as the case may be, elects to require Issuer to repurchase this Option and/or
the Option Shares in accordance with the provisions of this Section 7. As
promptly as practicable, and in any event within five business days after the
surrender of the Option and/or certificates representing Option Shares and the
receipt of such notice or notices relating thereto, Issuer shall deliver or
cause to be delivered to the Holder the Option Repurchase Price and/or to the
Owner the Option Share Repurchase Price therefor or the portion thereof that
Issuer is not then prohibited under applicable law and regulation from so
delivering.
(c) To the extent that Issuer is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from repurchasing the
Option and/or the Option Shares in full, Issuer shall immediately so notify the
Holder and/or the Owner and thereafter deliver or cause to be delivered, from
time to time, to the Holder and/or the Owner, as appropriate, the portion of the
Option Repurchase Price and the Option Share Repurchase Price, respectively,
that it is no longer prohibited from delivering, within five business days after
the date on which Issuer is no longer so prohibited; PROVIDED, HOWEVER, that if
Issuer at any time after delivery of a notice of repurchase pursuant to
paragraph (b) of this Section 7 is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from delivering to the
Holder and/or the Owner, as appropriate, the Option Repurchase Price and the
Option Share Repurchase Price, respectively, in full (and Issuer hereby
undertakes to use its reasonable best efforts to obtain all required regulatory
and legal approvals and to file any required notices as promptly as practicable
in order to accomplish such repurchase), the Holder or Owner may revoke its
notice of repurchase of the Option and/or the Option Shares whether in whole or
to the extent of the prohibition, whereupon, in the latter case, Issuer shall
promptly (i) deliver to the Holder and/or the Owner, as appropriate, that
portion of the Option Repurchase Price and/or the Option Share Repurchase Price
that Issuer is not prohibited from delivering; and (ii) deliver, as appropriate,
either (A) to the Holder, a new Agreement evidencing the right of the Holder to
purchase that number of shares of Common Stock obtained by multiplying the
number of shares of Common Stock for which the surrendered Agreement was
exercisable at the time of delivery of the notice of repurchase by a fraction,
the numerator of which is the Option Repurchase Price less the portion thereof
theretofore delivered to the Holder and the denominator of which is the Option
Repurchase Price, and/or (B) to the Owner, a certificate for the Option Shares
it is then so prohibited from repurchasing. If an Exercise Termination Event
shall have occurred prior to the date of the notice by Issuer described in the
first sentence of this subsection (c), or shall be scheduled to occur at any
time before the expiration of a period ending on the thirtieth day after such
date, the Holder shall nonetheless have the right to exercise the Option until
the expiration of such 30-day period.
(d) For purposes of this Section 7, a "Repurchase Event" shall be deemed to
have occurred upon the occurrence of any of the following events or transactions
after the date hereof:
(i) the acquisition by any person (other than Grantee or any Grantee
Subsidiary) of beneficial ownership of 50% or more of the then outstanding
Common Stock; or
(ii) the consummation of any Acquisition Transaction described in
Section 2(b)(i) hereof, except that the percentage referred to in clause
(z) shall be 50%.
8. (a) In the event that prior to an Exercise Termination Event, Issuer
shall enter into an agreement (i) to consolidate with or merge into any person,
other than Grantee or a Grantee Subsidiary, or engage in a plan of exchange with
any person, other than Grantee or a Grantee Subsidiary and Issuer shall not be
the continuing or surviving corporation of such consolidation or merger or the
acquirer in such plan of exchange, (ii) to permit any person, other than Grantee
or a Grantee Subsidiary, to merge into Issuer or be acquired by Issuer in a plan
of exchange and Issuer shall be the continuing or surviving or acquiring
corporation, but, in connection with such merger or plan of exchange, the then
outstanding shares of Common Stock shall be changed into or exchanged for stock
or other securities of any other person or cash or any other property or the
then outstanding shares of Common Stock shall after such merger or plan of
exchange represent less than 50% of the outstanding shares and
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<PAGE>
share equivalents of the merged or acquiring company, or (iii) to sell or
otherwise transfer all or a substantial part of its or the Issuer Subsidiary's
assets or deposits to any person, other than Grantee or a Grantee Subsidiary,
then, and in each such case, the agreement governing such transaction shall make
proper provision so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, an option (the "Substitute Option"), at the election of
the Holder, of either (x) the Acquiring Corporation (as hereinafter defined) or
(y) any person that controls the Acquiring Corporation.
(b) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (i) the continuing or surviving
person of a consolidation or merger with Issuer (if other than Issuer),
(ii) the acquiring person in a plan of exchange in which Issuer is
acquired, (iii) the Issuer in a merger or plan of exchange in which Issuer
is the continuing or surviving or acquiring person, and (iv) the transferee
of all or a substantial part of Issuer's assets or deposits (or the assets
or deposits of the Issuer Subsidiary).
(ii) "Substitute Common Stock" shall mean the common stock issued by
the issuer of the Substitute Option upon exercise of the Substitute Option.
(iii) "Assigned Value" shall mean the market/offer price, as defined
in Section 7.
(iv) "Average Price" shall mean the average closing price of a share
of the Substitute Common Stock for one year immediately preceding the
consolidation, merger or sale in question, but in no event higher than the
closing price of the shares of Substitute Common Stock on the day preceding
such consolidation, merger or sale; PROVIDED that if Issuer is the issuer
of the Substitute Option, the Average Price shall be computed with respect
to a share of common stock issued by the person merging into Issuer or by
any company which controls or is controlled by such person, as the Holder
may elect.
(c) The Substitute Option shall have the same terms as the Option, PROVIDED
that if the terms of the Substitute Option cannot, for legal reasons, be the
same as the Option, such terms shall be as similar as possible and in no event
less advantageous to the Holder. The issuer of the Substitute Option shall also
enter into an agreement with the then Holder or Holders of the Substitute Option
in substantially the same form as this Agreement (after giving effect for such
purpose to the provisions of Section 9), which agreement shall be applicable to
the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of shares of
Substitute Common Stock as is equal to the Assigned Value multiplied by the
number of shares of Common Stock for which the Option was exercisable
immediately prior to the event described in the first sentence of Section 8(a),
divided by the Average Price. The exercise price of the Substitute Option per
share of Substitute Common Stock shall then be equal to the Option Price
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock for which the Option was exercisable immediately prior to the
event described in the first sentence of Section 8(a) and the denominator of
which shall be the number of shares of Substitute Common Stock for which the
Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than 19.9% of the shares of Substitute
Common Stock outstanding prior to exercise of the Substitute Option. In the
event that the Substitute Option would be exercisable for more than 19.9% of the
shares of Substitute Common Stock outstanding prior to exercise but for this
clause (e), the issuer of the Substitute Option (the "Substitute Option Issuer")
shall make a cash payment to Holder equal to the excess of (i) the value of the
Substitute Option without giving effect to the limitation in this clause (e)
over (ii) the value of the Substitute Option after giving effect to the
limitation in this clause (e). This difference in value shall be determined by a
nationally recognized investment banking firm selected by the Holder.
(f) Issuer shall not enter into any transaction described in subsection (a)
of this Section 8 unless the Acquiring Corporation and any person that controls
the Acquiring Corporation assume in writing all the obligations of Issuer
hereunder.
9. (a) At the request of the holder of the Substitute Option (the
"Substitute Option Holder"), the issuer of the Substitute Option (the
"Substitute Option Issuer") shall repurchase the Substitute Option from the
Substitute Option Holder at a price (the "Substitute Option Repurchase Price")
equal to the amount by which (i) the Highest Closing Price (as hereinafter
defined) exceeds (ii) the exercise price of the Substitute Option, multiplied by
the
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number of shares of Substitute Common Stock for which the Substitute Option may
then be exercised, and at the request of the owner (the "Substitute Share
Owner") of shares of Substitute Common Stock (the "Substitute Shares"), the
Substitute Option Issuer shall repurchase the Substitute Shares at a price (the
"Substitute Share Repurchase Price") equal to the Highest Closing Price
multiplied by the number of Substitute Shares so designated. The term "Highest
Closing Price" shall mean the highest closing price for shares of Substitute
Common Stock within the six-month period immediately preceding the date the
Substitute Option Holder gives notice of the required repurchase of the
Substitute Option or the Substitute Share Owner gives notice of the required
repurchase of the Substitute Shares, as applicable.
(b) The Substitute Option Holder and the Substitute Share Owner, as the
case may be, may exercise its respective rights to require the Substitute Option
Issuer to repurchase the Substitute Option and the Substitute Shares pursuant to
this Section 9 by surrendering for such purpose to the Substitute Option Issuer,
at its principal office, the agreement for such Substitute Option (or, in the
absence of such an agreement, a copy of this Agreement) and/or certificates for
Substitute Shares accompanied by a written notice or notices stating that the
Substitute Option Holder or the Substitute Share Owner, as the case may be,
elects to require the Substitute Option Issuer to repurchase the Substitute
Option and/or the Substitute Shares in accordance with the provisions of this
Section 9. As promptly as practicable and in any event within five business days
after the surrender of the Substitute Option and/or certificates representing
Substitute Shares and the receipt of such notice or notices relating thereto,
the Substitute Option Issuer shall deliver or cause to be delivered to the
Substitute Option Holder the Substitute Option Repurchase Price and/or to the
Substitute Share Owner the Substitute Share Repurchase Price therefor or the
portion thereof which the Substitute Option Issuer is not then prohibited under
applicable law and regulation from so delivering.
(c) To the extent that the Substitute Option Issuer is prohibited under
applicable law or regulation, or as a consequence of administrative policy, from
repurchasing the Substitute Option and/or the Substitute Shares in part or in
full, the Substitute Option Issuer shall immediately so notify the Substitute
Option Holder and/or the Substitute Share Owner and thereafter deliver or cause
to be delivered, from time to time, to the Substitute Option Holder and/or the
Substitute Share Owner, as appropriate, the portion of the Substitute Option
Repurchase Price and/or the Substitute Share Repurchase Price, respectively,
which it is no longer prohibited from delivering, within five (5) business days
after the date on which the Substitute Option Issuer is no longer so prohibited;
PROVIDED, HOWEVER, that if the Substitute Option Issuer is at any time after
delivery of a notice of repurchase pursuant to subsection (b) of this Section 9
prohibited under applicable law or regulation, or as a consequence of
administrative policy, from delivering to the Substitute Option Holder and/or
the Substitute Share Owner, as appropriate, the Substitute Option Repurchase
Price and the Substitute Share Repurchase Price, respectively, in full (and the
Substitute Option Issuer shall use its reasonable best efforts to receive all
required regulatory and legal approvals as promptly as practicable in order to
accomplish such repurchase), the Substitute Option Holder and/or Substitute
Share Owner may revoke its notice of repurchase of the Substitute Option or the
Substitute Shares either in whole or to the extent of prohibition, whereupon, in
the latter case, the Substitute Option Issuer shall promptly (i) deliver to the
Substitute Option Holder or Substitute Share Owner, as appropriate, that portion
of the Substitute Option Repurchase Price or the Substitute Share Repurchase
Price that the Substitute Option Issuer is not prohibited from delivering; and
(ii) deliver, as appropriate, either (A) to the Substitute Option Holder, a new
Substitute Option evidencing the right of the Substitute Option Holder to
purchase that number of shares of the Substitute Common Stock obtained by
multiplying the number of shares of the Substitute Common Stock for which the
surrendered Substitute Option was exercisable at the time of delivery of the
notice of repurchase by a fraction, the numerator of which is the Substitute
Option Repurchase Price less the portion thereof theretofore delivered to the
Substitute Option Holder and the denominator of which is the Substitute Option
Repurchase Price, and/or (B) to the Substitute Share Owner, a certificate for
the Substitute Option Shares it is then so prohibited from repurchasing. If an
Exercise Termination Event shall have occurred prior to the date of the notice
by the Substitute Option Issuer described in the first sentence of this
subsection (c), or shall be scheduled to occur at any time before the expiration
of a period ending on the thirtieth day after such date, the Substitute Option
Holder shall nevertheless have the right to exercise the Substitute Option until
the expiration of such 30-day period.
10. The 30-day, 6-month, 12-month, 18-month or 24-month periods for
exercise of certain rights under Sections 2, 6, 7, 9, 12 and 14 shall be
extended: (i) to the extent necessary to obtain all regulatory approvals for the
exercise of such rights (for so long as the Holder, Owner, Substitute Option
Holder or Substitute Share
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Owner, as the case may be, is using commercially reasonable efforts to obtain
such regulatory approvals), and for the expiration of all statutory waiting
periods; and (ii) to the extent necessary to avoid liability under Section 16(b)
of the 1934 Act by reason of such exercise.
11. (a) Issuer hereby represents and warrants to Grantee as follows:
(i) Issuer has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by the Issuer Board prior to the date hereof and no other
corporate proceedings on the part of Issuer are necessary to authorize this
Agreement or to consummate the transactions so contemplated. This Agreement
has been duly and validly executed and delivered by Issuer.
(ii) Issuer has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and at all times from the date hereof
through the termination of this Agreement in accordance with its terms will
have reserved for issuance upon the exercise of the Option, that number of
shares of Common Stock equal to the maximum number of shares of Common
Stock at any time and from time to time issuable hereunder, and all such
shares, upon issuance pursuant thereto, will be duly authorized, validly
issued, fully paid, nonassessable, and will be delivered free and clear of
all claims, liens, encumbrance and security interests and not subject to
any preemptive rights.
(b) Grantee hereby represents and warrants to Issuer as follows:
(i) Grantee has corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement by the Grantee and the performance of its
obligations hereunder by the Grantee have been duly and validly authorized
by the Board of Directors of Grantee and no other corporate proceedings on
the part of the Grantee are necessary to authorize this Agreement or for
Grantee to perform its obligations hereunder. This Agreement has been duly
and validly executed and delivered by Grantee.
(ii) This Option is not being, and any Option Shares or other
securities acquired by Grantee upon exercise of the Option will not be,
acquired with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the 1933 Act.
12. Neither of the parties hereto may assign any of its rights or
obligations under this Agreement or the Option created hereunder to any other
person, without the express written consent of the other party, except that in
the event an Initial Triggering Event shall have occurred prior to an Exercise
Termination Event, Grantee, subject to the express provisions hereof, may assign
in whole or in part its rights and obligations hereunder; PROVIDED, HOWEVER,
that until the date 15 days following the date on which the Federal Reserve
Board has approved an application by Grantee to acquire the shares of Common
Stock subject to the Option, Grantee may not assign its rights under the Option
except in (i) a widely dispersed public distribution, (ii) a private placement
in which no one party acquires the right to purchase in excess of 2% of the
voting shares of Issuer, (iii) an assignment to a single party (E.G., a broker
or investment banker) for the purpose of conducting a widely dispersed public
distribution on Grantee's behalf or (iv) any other manner approved by the
Federal Reserve Board.
13. Each of Grantee and Issuer will use its reasonable best efforts to make
all filings with, and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions contemplated by
this Agreement, including, without limitation, applying to the Federal Reserve
Board under the BHCA for approval to acquire the shares issuable hereunder, but
Grantee shall not be obligated to apply to state banking authorities for
approval to acquire the shares of Common Stock issuable hereunder until such
time, if ever, as it deems appropriate to do so.
14. (a) Grantee may, at any time following a Repurchase Event and prior to
the occurrence of an Exercise Termination Event (or such later period as
provided in Section 10), relinquish the Option (together with any Option Shares
issued to and then owned by Grantee) to Issuer in exchange for a cash fee equal
to the Surrender Price; PROVIDED, HOWEVER, that Grantee may not exercise its
rights pursuant to this Section 14 if Issuer has repurchased the Option (or any
portion thereof) or any Option Shares pursuant to Section 7. The "Surrender
Price" shall be equal to $5.0 million (i) plus, if applicable, Grantee's
purchase price actually paid with respect to any
B-9
<PAGE>
Option Shares and (ii) minus, if applicable, the excess of (A) the net cash
amounts, if any, received by Grantee pursuant to the arms' length sale of Option
Shares (or any other securities into which such Option Shares were converted or
exchanged) to any unaffiliated party, over (B) Grantee's purchase price of such
Option Shares.
(b) Grantee may exercise its right to relinquish the Option and any Option
Shares pursuant to this Section 14 by surrendering to Issuer, at its principal
office, a copy of this Agreement together with certificates for Option Shares,
if any, accompanied by a written notice stating (i) that Grantee elects to
relinquish the Option and Option Shares, if any, in accordance with the
provisions of this Section 14 and (ii) the Surrender Price. The Surrender Price
shall be payable in immediately available funds on or before the second business
day following receipt of such notice by Issuer.
(c) To the extent that Issuer is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from paying the
Surrender Price to Grantee in full, Issuer shall immediately so notify Grantee
and thereafter deliver or cause to be delivered, from time to time, to Grantee,
the portion of the Surrender Price that it is no longer prohibited from paying,
within five business days after the date on which Issuer is no longer so
prohibited; PROVIDED, HOWEVER, that if Issuer at any time after delivery of a
notice of surrender pursuant to paragraph (b) of this Section 14 is prohibited
under applicable law or regulation, or as a consequence of administrative
policy, from paying to Grantee the Surrender Price in full, (i) Issuer shall (A)
use its reasonable best efforts to obtain all required regulatory and legal
approvals and to file any required notices as promptly as practicable in order
to make such payments, (B) within five days of the submission or receipt of any
documents relating to any such regulatory and legal approvals, provide Grantee
with copies of the same, and (c) keep Grantee advised of both the status of any
such request for regulatory and legal approvals, as well as any discussions with
any relevant regulatory or other third party reasonably related to the same and
(ii) Grantee may revoke such notice of surrender by delivery of a notice of
revocation to Issuer and, upon delivery of such notice of revocation, the
Exercise Termination Date shall be extended to a date six months from the date
on which the Exercise Termination Date would have occurred if not for the
provisions of this Section 14(c) (during which period Grantee may exercise any
of its rights hereunder, including any and all rights pursuant to this Section
14).
15. The parties hereto acknowledge that damages would be an inadequate
remedy for a breach of this Agreement by either party hereto and that the
obligations of the parties hereto shall be enforceable by either party hereto
through injunctive or other equitable relief. In connection therewith both
parties waive the posting of any bond or similar requirement.
16. If any term, provision, covenant or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected, impaired
or invalidated. If for any reason such court or regulatory agency determines
that the Holder is not permitted to acquire, or Issuer is not permitted to
repurchase pursuant to Section 7, the full number of shares of Common Stock
provided in Section l(a) hereof (as adjusted pursuant to Section l(b) or Section
5 hereof), it is the express intention of Issuer to allow the Holder to acquire
or to require Issuer to repurchase such lesser number of shares as may be
permissible, without any amendment or modification hereof.
17. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person, by
fax, telecopy, or by registered or certified mail (postage prepaid, return
receipt requested) at the respective addresses of the parties set forth in the
Merger Agreement.
18. This Agreement shall be governed by and construed in accordance with
the laws of the State of North Carolina, without regard to the conflict of law
principles thereof (except to the extent that mandatory provisions of Federal
law or of the FBCA are applicable).
19. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
20. Except as otherwise expressly provided herein, each of the parties
hereto shall bear and pay all costs and expenses incurred by it or on its behalf
in connection with the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers, accountants and
counsel.
21. Except as otherwise expressly provided herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all
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<PAGE>
prior arrangements or understandings with respect thereof, written or oral. The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assignees. Nothing in this Agreement, expressed or implied, is intended to
confer upon any party, other than the parties hereto, and their respective
successors except as assignees, any rights, remedies, obligations or liabilities
under or by reason of this Agreement, except as expressly provided herein.
22. Capitalized terms used in this Agreement and not defined herein shall
have the meanings assigned thereto in the Merger Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
1ST UNITED BANCORP
By: /s/ WARREN S. ORLANDO
Name: Warren S. Orlando
Title: President & CEO
WACHOVIA CORPORATION
By: /s/ L.M. BAKER, JR.
Name: L.M. Baker, Jr.
Title: President & CEO
B-11
<PAGE>
APPENDIX C
FORM OF SHAREHOLDER AGREEMENT
SHAREHOLDER AGREEMENT, dated as of August 6, 1997 (this "Agreement"), by
and among WACHOVIA CORPORATION ("Wachovia") and each of the SHAREHOLDERS of 1st
United Bancorp ("1st United") listed as signatories hereto (the "Shareholders").
WHEREAS, Wachovia is prepared to enter into a merger agreement with 1st
United substantially in the form of Exhibit A hereto (the "Merger Agreement")
simultaneously with the execution of this Agreement;
WHEREAS, Wachovia would not enter into the Merger Agreement unless the
Shareholders entered into this Agreement;
WHEREAS, each of the Shareholders will benefit directly and substantially
from the Merger Agreement;
NOW, THEREFORE, in consideration of Wachovia's entry into the Merger
Agreement, the Shareholders agree with Wachovia as follows:
1. Each of the Shareholders represents and warrants that he, she or it owns
or controls the number of shares of 1st United set forth in such Shareholders
signature page (for each Shareholder, the "Owned Shares") free from any lien,
encumbrance or restriction whatsoever, other than those identified in such
signature page, and with full power to vote the Owned Shares without the consent
or approval of any other person, other than those identified in such signature
page.
2. Each of the Shareholders agrees that he, she or it will vote all of the
Owned Shares in favor of the Merger Agreement and Merger provided for therein at
the meeting or meetings of 1st United shareholders called to vote upon the
Merger Agreement and the Merger.
3. Each of the Shareholders agrees that he, she or it will not sell any of
the Owned Shares unless he, she or it receives (i) an irrevocable proxy, in form
and substance satisfactory to Wachovia, to vote such Owned Shares with respect
to the Merger Agreement and the Merger, and such Shareholder will vote such
proxy as provided in Section 2 of this Agreement or (ii) an agreement identical
in all respects to this agreement executed by the buyer of the Owned Shares
being sold.
4. Each of the Shareholders agrees to take all reasonable actions and make
such reasonable efforts to consummate the Merger and effect the other
transactions contemplated by the Merger Agreement.
WACHOVIA CORPORATION
By:
Name:
Title:
[remainder of page intentionally left blank; signature of shareholder on next
page]
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<PAGE>
SHAREHOLDER SIGNATURE PAGE TO AGREEMENT DATED
AS OF AUGUST 6, 1997 BY AND AMONG WACHOVIA CORPORATION
AND CERTAIN SHAREHOLDERS OF 1ST UNITED BANCORP
Name of Shareholder:
Number of shares of 1st United Bancorp owned by said shareholder:
Liens, encumbrances or restrictions affecting
such shares (describe):
Consent required by Shareholders in order to execute agreement
(describe):
Signature of Shareholder:
C-2
<PAGE>
APPENDIX D
Hoefer & Arnett
Incorporated
INVESTMENT BANKERS
101 W. SIXTH STREET, SUITE 416
AUSTIN, TEXAS 78701
(512) 495-9890
October 1, 1997
Members of the Board of Directors
1st United Bancorp
180 Royal Palm Way
Palm Beach, Florida 33480
Members of the Board:
You have requested our opinion as investment bankers as to the fairness,
from a financial point of view, to the shareholders of 1st United Bancorp, Boca
Raton, Florida ("1st United") of the terms of the proposed merger of 1st United
with and into Wachovia ("Wachovia") as defined in the Agreement and Plan of
Merger, dated as of August 6, 1997 (the "Agreement"). Pursuant to the Agreement
and subject to the terms and conditions therein, each share of 1st United Common
Stock, issued and outstanding immediately prior to the Effective Time shall
become and be converted into the number of shares of Wachovia Common Stock equal
to the Exchange Ratio. The Exchange Ratio shall mean a number equal to $20.875
divided by the Wachovia Average Stock Price provided that:
(i) if the Wachovia Average Stock Price exceeds $69.64375, the
Exchange Ratio shall be 0.3; and
(ii) if the Wachovia Average Stock Price is less than $56.98125,
the Exchange Ratio shall be 0.366.
As part of its investment banking business, Hoefer & Arnett, Incorporated
is continually engaged in the valuation of bank, bank holding company and thrift
securities in connection with mergers and acquisitions nationwide. Prior to
being retained for this assignment, we have provided investment banking and
financial advisory services to 1st United. The revenues derived from such
services are insignificant when compared to the firm's total gross revenues.
In arriving at our opinion, we have reviewed and analyzed, among other
things, the following: (i) the Agreement; (ii) Annual Reports to Shareholders of
Wachovia and 1st United for the years ended December 31, 1995 and December 31,
1996; (iii) Quarterly reports on Form 10-Q filed with the U.S. Securities
Exchange Commission for the quarters ended June 30, 1997, March 31, 1997,
September 30, 1996 and June 30, 1996; (iv) certain other publicly available
financial and other information concerning Wachovia and 1st United; (v) the
historical market prices and trading activity for the common stocks of Wachovia
and 1st United; and (vi) publicly available information concerning other banks
and holding companies, the trading markets for their securities and the nature
and terms of certain other merger transactions we believe relevant to our
inquiry. We have held discussions with senior management of Wachovia and 1st
United concerning their past and current operations, financial condition and
prospects, as well as the results of regulatory examinations.
We have reviewed with senior management of Wachovia earnings projections
for 1997 through 1999 for Wachovia as a stand-alone entity, assuming the merger
does not occur, prepared by Wachovia. We reviewed with senior management of 1st
United earnings projections for 1997 through 2001 as a stand-alone entity,
assuming the merger does not occur, as well as projected operating cost savings
expected to be achieved in each such years resulting from the merger. Such
projections were prepared by 1st United senior management. Certain pro forma
financial projections for the years 1997 through 2001 for the combined entity
were derived by us based partially upon the projections discussed above, as well
as our own assessment of general economic, market and financial
D-1
<PAGE>
conditions. In certain cases, such combined pro forma financial projections
included projected operating cost savings derived by us partially based upon the
projections discussed above to be realizable in the merger.
In conducting our review and in arriving at our opinion, we have relied
upon and assumed the accuracy and completeness of the financial and other
information provided to us or publicly available, and we have not assumed any
responsibility for independent verification of the same. We have relied upon the
managements of Wachovia and 1st United as to the reasonableness of the financial
and operating forecasts, projections and projected operating cost savings (and
the assumptions and bases therefor) provided to us, and we have assumed that
such forecasts, projections and projected operating cost savings reflect the
best currently available estimates and judgments of the applicable managements.
We have also assumed, without assuming any responsibility for the independent
verification of the same, that the aggregate allowance for loan losses for
Wachovia and 1st United are adequate to cover such losses. We have not made or
obtained any evaluations or appraisals of the property of Wachovia or 1st
United, nor have we examined any individual loan credit files. For purposes of
this opinion, we have assumed that the merger will have the tax, accounting and
legal effects described in the Agreement and assumed the accuracy of the
disclosures set forth in the Agreement. Our opinion as expressed herein is
limited to the fairness, from a financial point of view, to the holders of the
Common Shares of 1st United of the terms of the proposed merger of 1st United
with and into Wachovia and does not address 1st United's underlying business
decision to proceed with the merger.
We have considered such financial and other factors as we have deemed
appropriate under the circumstances, including among others the following: (i)
the historical and current financial position and results of operations of
Wachovia and 1st United, including interest income, interest expense, net
interest income, net interest margin, provision for loan losses, non-interest
income, non-interest expense, earnings, dividends, internal capital generation,
book value, intangible assets, return on assets, return on shareholders' equity,
capitalization, the amount and type of non-performing assets, loan losses and
the reserve for loan losses, all as set forth in the financial statements for
Wachovia and 1st United; (ii) the assets and liabilities of Wachovia and 1st
United, including the loan, investment and mortgage portfolios, deposits, other
liabilities, historical and current liability sources and costs and liquidity;
and (iii) the nature and terms of certain other merger transactions involving
banks and bank holding companies. We have also taken into account our assessment
of general economic, market and financial conditions and our experience in other
transactions, as well as our experience in securities valuation and our
knowledge of the banking industry generally. Our opinion is necessarily based
upon conditions as they exist and can be evaluated on the date hereof and the
information made available to us through the date hereof.
Based upon and subject to the foregoing, we are of the opinion as
investment bankers that, as of the date hereof, the terms of proposed merger of
1st United with and into Wachovia are fair, from a financial point of view, to
the holders of the Common Shares of 1st United.
It is understood that this letter is for the information of the Board of
Directors of 1st United and does not constitute a recommendation to the Board of
Directors or to any shareholder of 1st United with respect to any approval of
the merger. We hereby consent to the reference to our firm in the proxy
statement or prospectus related to the merger transaction and to the inclusion
of our opinion as an exhibit to the proxy statement or prospectus related to the
merger transaction.
Very truly yours,
/s/ Hoefer & Arnett, Incorporated
Hoefer & Arnett, Incorporated
D-2
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is incorporated under the laws of North Carolina. Sections
55-8-50 et seq. of the North Carolina Business Corporation Act prescribe the
conditions under which indemnification may be obtained by a present or former
director or officer of the Registrant who incurs expenses or liability as a
consequence of certain proceedings arising out of his or her activities as a
director or officer. Article IX of the Registrant's Bylaws also provides for
indemnification of directors and officers under certain circumstances. The
Registrant has purchased a standard liability policy, which, subject to any
limitations set forth in the policy, indemnifies the Registrant's directors and
officers for damages that they become legally obligated to pay as a result of
any negligent act, error or omission committed while serving in their official
capacity.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits (See exhibit index immediately preceding the exhibits for the
page number where each exhibit can be found)
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
<S> <C>
2.1 -- Agreement and Plan of Merger, dated as of August 6, 1997, by and between Wachovia Corporation and 1st
United Bancorp (included as Appendix A to the Proxy Statement/Prospectus and incorporated by
reference herein).
2.2 -- Agreement and Plan of Merger, dated as of June 9, 1997, by and between Wachovia Corporation and
Jefferson Bankshares, Inc. (Exhibit 2 to Wachovia Corporation's Form 13D, dated June 19, 1997, File
No. 0-9101*).
2.3 -- Agreement and Plan of Merger, dated as of June 23, 1997, by and between Wachovia Corporation and
Central Fidelity Banks, Inc. (Exhibit 2 to Wachovia Corporation's Form 13D, dated August 15, 1997,
File No. 0-20254*).
3.1 -- Amended and Restated Articles of Incorporation (Exhibit 3.1 to Wachovia Corporation's Form 10-K for
the year ended December 31, 1993, File No. 1-9021*).
3.2 -- Bylaws
4.1 -- Amended and Restated Articles of Incorporation (Exhibit 3.1 to Wachovia Corporation's Form 10-K for
the year ended December 31, 1993, File No. 1-9021*).
4.2 -- Bylaws (included herewith as Exhibit 3.2).
4.3 -- All instruments defining the rights of holders of long-term debt of Wachovia Corporation and its
subsidiaries. (Not filed pursuant to (4) (iii) of Item 601(b) of Regulation S-K; to be furnished upon
request of the Commission.)
5.1 -- Opinion of Kenneth W. McAllister, including consent.
8.1 -- Opinion of Sullivan & Cromwell, including consent.
8.2 -- Opinion of Akerman Senterfitt & Eidson, P.A., including consent.
23.1 -- Consent of Kenneth W. McAllister (appears in Legal Opinion, Exhibit 5.1)
23.2 -- Consent of Sullivan & Cromwell (appears in Legal Opinion, Exhibit 8.1)
23.3 -- Consent of Akerman Senterfitt & Eidson, P.A. (appears in Legal Opinion, Exhibit 8.2)
23.4 -- Consent of Ernst & Young LLP
23.5 -- Consent of Ernst & Young LLP
23.6 -- Consent of KPMG Peat Marwick LLP
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
23.7 -- Consent of BDO Seidman LLP
<S> <C>
23.8 -- Consent of Hoefer & Arnett, Incorporated (included in Appendix D to the Proxy Statement/Prospectus
and incorporated by reference herein)
24.1 -- Power of Attorney
99.1 -- Form of Proxy
99.2 -- Stock Option Agreement, dated as of August 6, 1997, by and between Wachovia Corporation and 1st
United Bancorp (included as Appendix B to the Proxy Statement/Prospectus and incorporated by
reference herein).
</TABLE>
* Incorporated herein by reference
(b) Financial Statement Schedules
Schedules are omitted because they are not required or are not applicable,
or the required information is shown in the financial statements or notes
thereto.
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 facts 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.
(4) 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 Registrant 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.
(5) That every Prospectus (a) that is filed pursuant to paragraph (4)
immediately preceding, or (b) that purports to meet the requirements of Section
10(a)(3) of the Securities Act of 1933 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.
(6) 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 foregoing provisions (See Item 20), or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against
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<PAGE>
public policy as expressed in the Securities Act of 1933 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 of whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be governed by
the final adjudication of such issue.
(b) 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 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.
(c) 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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Winston-Salem, State of
North Carolina, on October 1, 1997.
WACHOVIA CORPORATION
By: /s/ L. M. BAKER
L. M. Baker, Jr.
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
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/ L.M. BAKER, JR. Director, President and October 1, 1997
L.M. Baker, Jr. Chief Executive Officer
/s/ PETER C. BROWNING* Director October 1, 1997
Peter C. Browning
/s/ JOHN L. CLENDENIN* Director October 1, 1997
John L. Clendenin
/s/ LAWRENCE M. GRESSETTE, JR.* Director October 1, 1997
Lawrence M. Gressette, Jr.
/s/ THOMAS K. HEARN, JR.* Director October 1, 1997
Thomas K. Hearn, Jr.
/s/ GEORGE W. HENDERSON, III* Director October 1, 1997
George W. Henderson, III
/s/ W. HAYNE HIPP* Director October 1, 1997
W. Hayne Hipp
/s/ ROBERT M. HOLDER, JR.* Director October 1, 1997
Robert M. Holder, Jr.
/s/ ROBERT A. INGRAM* Director October 1, 1997
Robert A. Ingram
/s/ JAMES W. JOHNSTON* Director October 1, 1997
James W. Johnston
/s/ ROBERT S. MCCOY, JR. Executive Vice President and October 1, 1997
Robert S. McCoy, Jr. Chief Financial Officer
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
/s/ JOHN G. MEDLIN, JR. Director October 1, 1997
John G. Medlin, Jr.
<S> <C> <C>
/s/ WYNDHAM ROBERTSON* Director October 1, 1997
Wyndham Robertson
/s/ HERMAN J. RUSSELL* Director October 1, 1997
Herman J. Russell
/s/ SHERWOOD H. SMITH, JR.* Director October 1, 1997
Sherwood H. Smith, Jr.
/s/ DONALD K. TRUSLOW Comptroller October 1, 1997
Donald K. Truslow
/s/ JOHN C. WHITAKER, JR.* Director October 1, 1997
John C. Whitaker, Jr.
</TABLE>
<TABLE>
<S> <C>
*By: /s/ ALICE WASHINGTON GROGAN
(Signature)
Alice Washington Grogan
(Print Name)
Attorney-in-fact
(Title)
</TABLE>
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<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
<S> <C>
2.1 -- Agreement and Plan of Merger, dated as of June 23, 1997, by and between Wachovia Corporation and
1st United Bancorp (included as Appendix A to the Proxy Statement/Prospectus and incorporated by
reference herein)
2.2 -- Agreement and Plan of Merger, dated as of June 9, 1997, by and between Wachovia Corporation and
Jefferson Bankshares, Inc. (Exhibit 2 to Wachovia Corporation's Form 13D, dated June 19, 1997, File
No. 1-9021*)
2.3 -- Agreement and Plan of Merger, dated as of June 23, 1997 by and between Wachovia Corporation and
Central Fidelity Banks, Inc. (Exhibit 2 to Wachovia Corporation's Form 13D dated August 15, 1997,
File No. 1-9021*)
3.1 -- Amended and Restated Articles of Incorporation (Exhibit 3.1 to Wachovia Corporation's Form 10-K for
the year ended December 31, 1993, File No. 1-9021*)
3.2 -- Bylaws
4.1 -- Amended and Restated Articles of Incorporation (Exhibit 3.1 to Wachovia Corporation's Form 10-K for
the year ended December 31, 1993, File No. 1-9021*)
4.2 -- Bylaws (included herewith as Exhibit 3.2)
4.3 -- All instruments defining the rights of holders of long-term debt of Wachovia Corporation and its
subsidiaries. (Not filed pursuant to (4)(iii) of Item 601(b) of Regulation S-K; to be furnished
upon request of the Commission.)
5.1 -- Opinion of Kenneth W. McAllister, including consent
8.1 -- Opinion of Sullivan & Cromwell, including consent
8.2 -- Opinion of Akerman Senterfitt & Eidson, P.A., including consent
23.1 -- Consent of Kenneth W. McAllister (appears in Legal Opinion, Exhibit 5.1)
23.2 -- Consent of Sullivan & Cromwell (appears in Legal Opinion, Exhibit 8.1)
23.3 -- Consent of Akerman Senterfitt & Eidson, P.A. (appears in Legal Opinion, Exhibit 8.2)
23.4 -- Consent of Ernst & Young LLP
23.5 -- Consent of Ernst & Young LLP
23.6 -- Consent of KPMG Peat Marwick LLP
23.7 -- Consent of BDO Seidman LLP
23.8 -- Consent of Hoefer & Arnett, Incorporated (included in Appendix D to the Proxy Statement/Prospectus
and incorporated by reference herein)
24.1 -- Powers of Attorney
99.1 -- Form of Proxy
99.2 -- Stock Option Agreement, dated as of August 6, 1997, by and between Wachovia Corporation and 1st
United Bancorp (included as Appendix B to the Proxy Statement/Prospectus and incorporated by
reference herein).
</TABLE>
* Incorporated herein by reference
BYLAWS
OF
WACHOVIA CORPORATION
AMENDED AND RESTATED JULY 25, 1997
<PAGE>
TABLE OF CONTENTS TO BYLAWS
OF
WACHOVIA CORPORATION
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ARTICLE 1
MEETINGS OF SHAREHOLDERS........................................................................................ 1
Section 1.1. Place of Meeting................................................................ 1
Section 1.2. Annual Meeting.................................................................. 1
Section 1.3. Substitute Annual Meeting....................................................... 1
Section 1.4. Special Meetings................................................................ 1
Section 1.5. Notice of Meetings.............................................................. 1
Section 1.6. Quorum.......................................................................... 2
Section 1.7. Shareholders' List.............................................................. 2
Section 1.8. Voting of Shares................................................................ 2
Section 1.9. Conduct of Meeting and Order of Business........................................ 2
ARTICLE 2
BOARD OF DIRECTORS.............................................................................................. 3
Section 2.1. General Powers.................................................................. 3
Section 2.2. Number, Term, Qualification and Nomination...................................... 3
Section 2.3. Removal......................................................................... 4
Section 2.4. Vacancies....................................................................... 4
Section 2.5. Compensation.................................................................... 4
Section 2.6. Chairman of the Board of Directors.............................................. 5
Section 2.7. Vice Chairmen................................................................... 5
Section 2.8. Directors Emeritus.............................................................. 5
ARTICLE 3
MEETINGS OF DIRECTORS........................................................................................... 5
Section 3.1. Regular Meetings................................................................ 5
Section 3.2. Special Meetings................................................................ 5
Section 3.3. Notice of Meetings.............................................................. 5
Section 3.4. Quorum.......................................................................... 6
Section 3.5. Manner of Acting................................................................ 6
Section 3.6. Presumption of Assent........................................................... 6
Section 3.7. Action Without Meeting.......................................................... 6
Section 3.8. Meeting by Communications Device................................................ 6
ARTICLE 4
COMMITTEES...................................................................................................... 7
Section 4.1. Election and Powers............................................................. 7
Section 4.2. Removal; Vacancies.............................................................. 7
Section 4.3. Meetings........................................................................ 7
Section 4.4. Minutes......................................................................... 8
Section 4.5. Standing Committees............................................................. 8
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ARTICLE 5
OFFICERS........................................................................................................ 8
Section 5.1. Titles.......................................................................... 8
Section 5.2. Election; Appointment........................................................... 8
Section 5.3. Removal......................................................................... 8
Section 5.4. Vacancies....................................................................... 8
Section 5.5. Compensation.................................................................... 8
Section 5.6. Chief Executive Officer......................................................... 9
Section 5.7. President....................................................................... 9
Section 5.8. Vice Presidents.................................................................. 9
Section 5.9. Secretary........................................................................ 9
Section 5.10. Assistant Secretaries........................................................... 10
Section 5.11. Voting Upon Stocks.............................................................. 10
ARTICLE 6
CAPITAL STOCK................................................................................................... 10
Section 6.1. Certificates.................................................................... 10
Section 6.2. Transfer of Shares.............................................................. 10
Section 6.3. Transfer Agent and Registrar.................................................... 10
Section 6.4. Regulations..................................................................... 10
Section 6.5. Fixing Record Date.............................................................. 11
Section 6.6. Lost Certificates............................................................... 11
ARTICLE 7
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES............................................................ 11
Section 7.1. Indemnification Provisions...................................................... 11
Section 7.2. Definitions..................................................................... 12
Section 7.3. Settlements..................................................................... 12
Section 7.4. Litigation Expense Advances..................................................... 12
Section 7.5. Approval of Indemnification Payments............................................ 13
Section 7.6. Suits by Claimant............................................................... 13
Section 7.7. Consideration; Personal Representatives and Other Remedies...................... 14
Section 7.8. Scope of Indemnification Rights................................................. 14
ARTICLE 8
GENERAL PROVISIONS.............................................................................................. 14
Section 8.1. Dividends and other Distributions............................................... 14
Section 8.2. Seal............................................................................ 14
Section 8.3. Waiver of Notice................................................................ 14
Section 8.4. Checks.......................................................................... 14
Section 8.5. Fiscal Year..................................................................... 14
Section 8.6. Amendments...................................................................... 14
Section 8.7. Applicability of Antitakeover Statutes.......................................... 15
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<PAGE>
BYLAWS
OF
WACHOVIA CORPORATION
ARTICLE 1
MEETINGS OF SHAREHOLDERS
Section 1.1. Place of Meeting. Meetings of shareholders shall
be held at the principal offices of the corporation in Winston-Salem, North
Carolina or Atlanta, Georgia, or at such other place as shall be fixed by the
board of directors or the chief executive officer and designated in the notice
of the meeting.
Section 1.2. Annual Meeting. The annual meeting of
shareholders shall be held at 10:30 a.m. on the fourth Friday in April of each
year, if not a legal holiday, but if a legal holiday, then on the preceding
business day which is not a legal holiday, or at such other hour and date as the
board of directors, the chief executive officer or secretary may designate, for
the purpose of electing directors of the corporation and the transaction of such
other business as may be properly brought before the meeting.
Section 1.3. Substitute Annual Meeting. If the annual meeting
is not held on the day designated or provided for in these bylaws, a substitute
annual meeting may be called in accordance with Section 1.4. A meeting so called
shall be designated and treated for all purposes as the annual meeting.
Section 1.4. Special Meetings. Special meetings of the
shareholders may be called at any time by the chief executive officer or the
board of directors.
Section 1.5. Notice of Meetings. At least 10 and no more than
60 days prior to any annual or special meeting of shareholders, the corporation
shall notify shareholders of the date, time and place of the meeting and, in the
case of a special or substitute annual meeting or where otherwise required by
law, shall briefly describe the purpose or purposes of the meeting. Only
business within the purpose or purposes described in the notice may be conducted
at a special meeting. Unless otherwise required by law or by the articles of
incorporation (including, but not limited to, in the event of a meeting to
consider the adoption of a plan of merger or share exchange, a sale of assets
other than in the ordinary course of business or a voluntary dissolution), the
corporation shall be required to give notice only to shareholders entitled to
vote at the meeting. If an annual or special shareholders' meeting is adjourned
to a different date, time or place, notice thereof need not be given if the new
date, time or place is announced at the meeting before adjournment. If a new
record date for the adjourned meeting is fixed pursuant to Section 6.5 hereof,
notice of the adjourned meeting shall be given to persons who are shareholders
as of the new record date. It shall be the primary responsibility of the
secretary to give the notice, but notice may be given by or at the direction of
the chief executive officer or other person or persons calling the meeting. If
mailed, such notice shall be deemed to be effective when deposited in the United
States mail with postage thereon prepaid, correctly addressed to the
shareholder's address shown in the corporation's current record of shareholders.
<PAGE>
Section 1.6. Quorum. A majority of the votes entitled to be
cast by a voting group on a matter, represented in person or by proxy at a
meeting of shareholders, shall constitute a quorum for that voting group for any
action on that matter, unless the articles of incorporation provide otherwise or
other quorum requirements are fixed by law, including by a court of competent
jurisdiction acting pursuant to Section 55-7-03 of the General Statutes of North
Carolina. Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and any adjournment
thereof, unless a new record date is or must be set for the adjournment. Action
may be taken by a voting group at any meeting at which a quorum of that voting
group is represented, regardless of whether action is taken at that meeting by
any other voting group. In the absence of a quorum at the opening of any meeting
of shareholders, such meeting may be adjourned from time to time, subject to
Section 6.5, by a vote of the majority of the shares voting on the motion to
adjourn.
Section 1.7. Shareholders' List. After a record date is fixed
for a meeting, the secretary of the corporation shall prepare an alphabetical
list of the names of all its shareholders who are entitled to notice of the
shareholders' meeting. Such list shall be arranged by voting group (and within
each voting group by class or series of shares) and shall show the address of
and number of shares held by each shareholder. The shareholders' list shall be
made available for inspection by any shareholder beginning two business days
after notice of the meeting is given for which the list was prepared and
continuing through the meeting, at the corporation's principal office or at such
other place identified in the meeting notice in the city where the meeting will
be held. The corporation shall make the shareholders' list available at the
meeting, and any shareholder or his or her agent or attorney is entitled to
inspect the list at any time during the meeting or any adjournment.
Section 1.8. Voting of Shares. Except as otherwise provided by
the articles of incorporation or by law, each outstanding share of voting
capital stock of the corporation shall be entitled to one vote on each matter
submitted to a vote at a meeting of the shareholders. Unless otherwise provided
in the articles of incorporation, cumulative voting for directors shall not be
allowed. Action on a matter by a voting group for which a quorum is present is
approved if the votes cast within the voting group favoring the action exceed
the votes cast opposing the action, unless the vote of a greater number is
required by law or by the articles of incorporation. Absent special
circumstances, the shares of the corporation are not entitled to vote if they
are owned, directly or indirectly, by a second corporation, domestic or foreign,
and the corporation owns, directly or indirectly, a majority of the shares
entitled to vote for directors of the second corporation, except that this
provision shall not limit the power of the corporation to vote shares held by it
in a fiduciary capacity.
Section 1.9. Conduct of Meeting and Order of Business. The
chairman of the board of directors or the chief executive officer shall act as
chairman at all meetings of shareholders and the secretary of the corporation
or, in the secretary's absence, an assistant secretary, shall act as secretary
at all meetings of shareholders. The chairman shall have the right and authority
to determine and maintain the rules, regulations and procedures for the proper
conduct of the meeting, including but not limited to restricting entry to the
meeting after it has commenced, maintaining order and the safety of those in
attendance, opening and closing the polls for voting, dismissing business not
properly submitted, and limiting time allowed for discussion of the business of
the meeting.
Business to be conducted at meetings of shareholders shall be
limited to that properly submitted to the meeting either by or at the direction
of the board of directors or by any holder of voting securities of the
corporation who shall be entitled to vote at such meeting and who complies with
the
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notice requirements of applicable law or as otherwise set forth in the articles
of incorporation or the bylaws of the corporation. If the chairman of the
meeting shall determine that any business was not properly submitted, the
chairman shall declare to the meeting that such business was not properly
submitted and would not be transacted at that meeting.
ARTICLE 2
BOARD OF DIRECTORS
Section 2.1. General Powers. All corporate powers shall be
exercised by or under the authority of, and the business and affairs of the
corporation shall be managed under the direction of, the board of directors.
Section 2.2. Number, Term, Qualification and Nomination. The
number of directors constituting the board of directors shall be not less than
nine nor more than 25 as may be fixed by resolution duly adopted by the board of
directors prior to the annual meeting at which such directors are to be elected
or by the shareholders, but in the absence of such resolution, the number of
directors elected at the meeting shall constitute the number of directors of the
corporation until the next annual meeting of shareholders.
The board of directors shall be divided into three classes as
equal in number as may be feasible, with the term of office of one class
expiring each year. The members of the initial board of directors shall be
divided into three classes as hereinafter provided, with directors of the first
class to hold office for a term expiring at the first annual meeting of
shareholders, directors of the second class to hold office for a term expiring
at the second annual meeting of shareholders and directors of the third class to
hold office for a term expiring at the third annual meeting of shareholders. At
each annual meeting of shareholders, successors to the directors whose terms
shall then expire shall be elected to hold office for terms expiring at the
third succeeding annual meeting. In case of any vacancies, by reason of an
increase in the number of directors or otherwise, each additional director may
be elected by the board of directors to hold office until the end of the term he
is elected to fill and until his successor shall have been elected and qualified
in the class to which such director is assigned and for the term or remainder of
the term of such class. Directors shall continue in office until others are
chosen and qualified in their stead. When the number of directors is changed,
any newly created directorships or any decrease in directorships shall be so
assigned among the classes by a majority of the directors then in office, though
less than a quorum, so as to make all classes as equal in number as may be
feasible. No decrease in the number of directors shall shorten the term of any
incumbent director.
No person shall be elected a director nor shall continue to
serve an unexpired term as a director past the annual meeting of the corporation
if such person has, as of the date of the annual meeting, reached the age of 67
years. No person shall be elected as a director who has retired from active
participation in the person's principal business or from the active practice of
the person's principal profession; however, a director who retires from active
participation in his or her principal business or profession during the course
of an unexpired term as director may complete such unexpired term subject to the
above age 67 limitation. Notwithstanding the foregoing, a person who has served
for five or more years as chief executive officer of the corporation may
complete, after retirement as an employee of the corporation, an unexpired term
and may be elected and serve thereafter as a director, provided,
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however, that such person's service as a director shall not extend beyond the
annual meeting of the corporation immediately following the date on which he or
she reaches 66 years of age. Each director nominee must be the owner in his or
her own right of shares of stock of the corporation having an aggregate par
value of not less than $1,000. Other qualifications which shall be considered in
the selection of director nominees are the extent of experience in business,
finance or management; the extent of knowledge in regional, national or
international business and finance; and the overall capacity to advise and
govern the corporation in fulfilling its mission and meeting its
responsibilities to shareholders, customers, employees and the public.
Nominations for election as a director by the board of
directors in connection with any annual meeting or substitute annual meeting of
shareholders shall include the chief executive officer and the chairman if the
chief executive officer is not the chairman and if such person is not then a
director or if his term as a director will expire at such meeting. Nominations
for election as a director by a holder of any outstanding class of shares of the
corporation entitled to vote for the election of directors shall specify the
class of directors to which each person is nominated, be made in writing and be
delivered or mailed to the chief executive officer of the corporation not less
than 14 days or more than 50 days prior to any meeting of shareholders called
for the election of directors; provided, if less than 21 days' notice of the
meeting is given to shareholders, such notification of nomination shall be
mailed or delivered to the chief executive officer of the corporation not later
than the close of business on the seventh day following the day on which the
notice of meeting was mailed. Such notification shall contain the following
information to the extent known by the notifying shareholder: (a) the name, age
and address of each proposed nominee; (b) the principal occupation of each
proposed nominee; (c) the total number of shares that will be voted for each
proposed nominee; (d) the name and residence address of the notifying
shareholder; (e) the number of shares owned by the notifying shareholder; and
(f) a biographical profile of the proposed nominee with a statement of his or
her qualifications. Nominations not made in accordance herewith may be
disregarded by the chairman of the meeting in his discretion, and upon his
instructions the voting inspectors or tabulators may disregard all votes cast
for each such nominee.
Section 2.3. Removal. Any director may be removed from office
as a director, but only for cause, by the affirmative vote at a meeting called
as provided herein for that purpose, of at least 66- 2/3% in interest of the
holders of voting stock of the corporation issued and outstanding, including a
majority in interest of the holders of issued and outstanding voting stock of
the corporation held by persons other than any person who is an "Interested
Shareholder" as defined in paragraph (3) of Article X.D of the corporation's
articles of incorporation; provided, the notice of the shareholders' meeting at
which such action is to be taken states that a purpose of the meeting is removal
of the director, and the number of votes cast to remove the director exceeds the
number of votes cast not to remove him.
Section 2.4. Vacancies. Except as otherwise provided in the
articles of incorporation or these bylaws, a vacancy occurring in the board of
directors, including, without limitation, a vacancy resulting from an increase
in the number of directors or from the failure by the shareholders to elect the
full authorized number of directors, may be filled by a majority of the
remaining directors or by the sole director remaining in office. The
shareholders may elect a director at any time to fill a vacancy not filled by
the directors. A director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office.
Section 2.5. Compensation. The directors shall have authority
to vote themselves reasonable compensation for their services as directors. The
directors may provide for their own indemnification and for the indemnification
of others, in accordance with these bylaws or as otherwise
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authorized by law, and the directors may authorize the purchase of insurance in
connection therewith. Any director may serve the corporation in any other
capacity and receive compensation therefor.
Section 2.6. Chairman of the Board of Directors. The board of
directors shall elect a chairman who shall preside at all meetings of the board
of directors. The chairman of the board may but need not be an officer or
employee of the corporation. If not elected chief executive officer, the
chairman shall have such other authority and shall perform such other duties as
may from time to time be conferred upon him herein or by the directors or by the
chief executive officer, and in the event of the disability or death of the
chief executive officer or president, he shall perform the duties of the chief
executive officer or president unless and until a new chief executive officer or
president is elected by the directors.
Section 2.7. Vice Chairmen. The board of directors may elect
one or more vice chairmen who shall have such authority and shall perform such
duties as may from time to time be conferred upon them by the directors or by
the chief executive officer. A vice chairman may but need not be an officer or
employee of the bank.
Section 2.8. Directors Emeritus. Upon retiring from the board
of directors, a director may be elected a director emeritus by the board of
directors. A director emeritus shall not have the right to vote and shall not be
charged with the responsibilities or be subject to the liabilities of directors.
A director emeritus may attend meetings of the board only upon invitation of the
directors.
ARTICLE 3
MEETINGS OF DIRECTORS
Section 3.1. Regular Meetings. Regular meetings of the board
of directors shall be held on the fourth Friday of January, April, July and
October of each year at the principal offices of the corporation in
Winston-Salem, North Carolina or Atlanta, Georgia, unless the board of directors
fixes some other place or time for the holding of such meetings. If any date for
which a regular meeting is scheduled shall be a legal holiday, the meeting shall
be held on such other date as is designated in a notice of the meeting.
If possible, the directors, including directors-elect, shall
meet following each annual meeting of shareholders for the purpose of organizing
the board and electing officers for the succeeding year; provided, in any event
the new board shall be organized and officers elected no later than at the next
regular meeting of the directors.
Section 3.2. Special Meetings. Special meetings of the board
of directors may be called by or at the request of the chief executive officer
or any three directors. Such meetings may be held at the time and place
designated in the notice of the meeting.
Section 3.3. Notice of Meetings. Unless the articles of
incorporation provide otherwise, regular meetings of the board of directors held
on a date specified in or pursuant to the first sentence of Section 3.1 may be
held without notice of the date, time, place or purpose of the meeting. The
secretary giving notice of a regular meeting to be held on a date other than a
date specified in or pursuant to the first sentence of Section 3.1, and the
secretary or other person calling a special meeting,
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shall give notice by any usual means of communication to be sent at least 24
hours before the meeting if notice is sent by means of telephone, telecopy or
personal delivery and at least five days before the meeting if notice is sent by
mail.
Section 3.4. Quorum. Except as otherwise provided in the
articles of incorporation, a majority of the directors in office shall
constitute a quorum for the transaction of business at a meeting of the board of
directors, provided a majority of the directors present are not also officers of
the corporation. Less than a quorum may adjourn any meeting from time to time,
and the meeting as adjourned may be held without further notice. In the event of
the death, disability or other absence of directors due to war or other
catastrophe, reducing the number of directors able to attend a meeting to less
than that required for a quorum, a majority of the remaining directors shall
constitute a quorum.
Section 3.5. Manner of Acting. Except as otherwise provided in
the articles of incorporation, the affirmative vote of a majority of the
directors present at a meeting at which a quorum is present shall be the act of
the board of directors.
Section 3.6. Presumption of Assent. A director of the
corporation who is present at a meeting of the board of directors at which
action on any corporate matter is taken is deemed to have assented to the action
taken unless he or she objects at the beginning of the meeting (or promptly upon
arrival) to holding, or transacting business at, the meeting, or unless his or
her dissent or abstention is entered in the minutes of the meeting or unless he
or she shall file written notice of his or her dissent or abstention to such
action with the presiding officer of the meeting before its adjournment or with
the corporation immediately after adjournment of the meeting. The right of
dissent or abstention shall not apply to a director who voted in favor of such
action.
Section 3.7. Action Without Meeting. Unless otherwise provided
in the articles of incorporation, action required or permitted to be taken at a
meeting of the board of directors may be taken without a meeting if the action
is taken by all members of the board. The action must be evidenced by one or
more written consents signed by each director before or after such action,
describing the action taken, and included in the minutes or filed with the
corporate records. Action taken without a meeting is effective when the last
director signs the consent, unless the consent specifies a different effective
date.
Section 3.8. Meeting by Communications Device. Unless
otherwise provided in the articles of incorporation, the board of directors may
permit any or all directors to participate in a regular or special meeting by,
or conduct the meeting through the use of, any means of communication by which
all directors participating may simultaneously hear each other during the
meeting. A director participating in a meeting by this means is deemed to be
present in person at the meeting.
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ARTICLE 4
COMMITTEES
Section 4.1. Election and Powers. Unless otherwise provided by
the articles of incorporation, a majority of the board of directors may create
one or more committees and appoint two or more directors to serve at the
pleasure of the board on each such committee. To the extent specified by the
board of directors or in the articles of incorporation or the bylaws, each
committee shall have and may exercise the powers of the board in the management
of the business and affairs of the corporation, except that no committee shall
have authority to do the following:
(a) Authorize distributions.
(b) Approve or propose to shareholders action required to be
approved by shareholders.
(c) Fill vacancies on the board of directors or on any of its
committees.
(d) Amend the articles of incorporation.
(e) Adopt, amend or repeal the bylaws.
(f) Approve a plan of merger not requiring shareholder approval.
(g) Authorize or approve the reacquisition of shares, except
according to a formula or method prescribed by the board of
directors.
(h) Authorize or approve the issuance, sale or contract for sale
of shares, or determine the designation and relative rights,
preferences and limitations of a class or series of shares,
except that the board of directors may authorize a committee
(or a senior executive officer of the corporation) to do so
within limits specifically prescribed by the board of
directors.
The board of directors or the chief executive officer may establish nonboard
committees composed of directors, employees or others to deal with corporate
powers not required to be exercised by the board of directors.
Section 4.2. Removal; Vacancies. Any member of a committee may
be removed at any time with or without cause, and vacancies in the membership of
a committee by means of death, resignation, disqualification or removal shall be
filled, by a majority of the full board of directors.
Section 4.3. Meetings. The provisions of Article 3 governing
meetings of the board of directors, action without meeting, notice, waiver of
notice and quorum and voting requirements shall apply to the committees of the
board and its members.
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Section 4.4. Minutes. Each committee shall keep minutes of its
proceedings and shall report thereon to the board of directors at or before the
next meeting of the board.
Section 4.5. Standing Committees. The directors shall appoint
annually the chairman and members of and shall establish the charter,
responsibilities and authority of the following standing committees: Audit,
Compliance, Corporate Governance and Nominating, Credit, Executive, Finance, and
Management Resources and Compensation. Each committee shall consist entirely of
directors. No active or former officer or employee of the corporation shall
serve on the Audit, Compliance, Corporate Governance and Nominating, or
Management Resources and Compensation committees other than as an ex officio
member of such committees.
ARTICLE 5
OFFICERS
Section 5.1. Titles. The officers of the corporation shall be
a chief executive officer, a president, one or more vice presidents and a
secretary and may include one or more executive vice presidents, a treasurer, a
comptroller, a general auditor, one or more assistant secretaries, one or more
assistant treasurers, one or more assistant comptrollers, and such other
officers as shall be deemed necessary. The officers shall have the authority and
perform the duties as set forth herein or as from time to time may be prescribed
by the board of directors or by the chief executive officer (to the extent that
the chief executive officer is authorized by the board of directors or these
bylaws to prescribe the authority and duties of officers). Any two or more
offices may be held by the same individual, but no officer may act in more than
one capacity where action of two or more officers is required.
Section 5.2. Election; Appointment. The officers of the
corporation shall be elected from time to time by the board of directors or
appointed from time to time by the chief executive officer to the extent that
the chief executive officer is authorized by the board to appoint officers;
provided, the chief executive officer may from time to time elect one or more
assistant secretaries notwithstanding the absence of such authorization.
Section 5.3. Removal. Any officer may be removed by the board
of directors at any time with or without cause whenever in the board's judgment
the best interests of the corporation will be served, but removal shall not
itself affect the officer's contract rights, if any, with the corporation.
Section 5.4. Vacancies. Vacancies among the officers may be
filled and new offices may be created and filled by the board of directors, or
by the chief executive officer to the extent authorized by the board.
Section 5.5. Compensation. Except as provided by Section 5.6,
the compensation of the officers shall be fixed by, or under the direction of,
the Management Resources and Compensation Committee or by such person or persons
to whom authority to fix compensation has been delegated by the board or such
committee.
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Section 5.6. Chief Executive Officer. The chief executive
officer of the corporation shall be elected annually by the directors and may
hold either or both of the titles of chairman and president. The chief executive
officer shall have overall responsibility and authority for administering the
affairs of the corporation and of all its subsidiary banks and companies. The
chief executive officer shall exercise all of the powers customarily exercised
by a chief executive officer of any corporation by whatever name called unless
expressly limited by the directors. All officers of the corporation shall report
to the chief executive officer to the extent the chief executive officer may
require.
In the interim between meetings of the directors or meetings
of the Executive Committee, the chief executive officer may make appointments
pro tem to any office below the level of executive vice president, either for
the purpose of filling a vacancy or increasing the number of officers, such
appointees pro tem to hold office until the next succeeding regular or special
meeting of the directors, who may in their discretion ratify or revoke any such
appointments. The compensation of all agents and employees of the corporation
other than certain senior officers specified by the board shall be fixed by the
chief executive officer or by senior officers or committees appointed by the
chief executive officer. The chief executive officer shall have the power to
execute in the name and on behalf of the corporation, or to delegate such power
to others, all contracts or instruments of every character relating to real or
personal property without express authority of the directors unless such
authority is expressly limited by the directors.
It shall be the duty of the chief executive officer or an
individual designated by the chief executive officer to make a report of the
corporation's performance and condition to the shareholders at their annual
meeting and to the directors at their regular meetings including therein such
recommendations as to the policy and conduct of the business of the corporation
as the chief executive officer may deem advisable. The chief executive officer
shall be ex officio a member of all committees of the board.
Section 5.7. President. If not elected chief executive
officer, the president shall have such authority and shall perform such duties
as may from time to time be conferred by the directors or by the chief executive
officer, and in the event of disability of the chief executive officer or
chairman, shall perform the duties of the chief executive officer or chairman
unless and until the Corporate Governance and Nominating Committee shall appoint
an acting chief executive officer or chairman or until a new chief executive
officer or chairman is elected by the directors.
Section 5.8. Vice Presidents. Vice presidents may be
designated as senior executive vice presidents, executive vice presidents,
regional vice presidents, group vice presidents, senior vice presidents, first
vice presidents, vice presidents and assistant vice presidents. The board of
directors, subject to the provisions of Section 5.2, annually shall elect such
number of each designation as it may deem proper. Each category of vice
presidents shall have such responsibilities and duties as shall be specifically
assigned to them by the directors or by the chief executive officer.
Section 5.9. Secretary. The secretary shall act as secretary
at all meetings of the shareholders and at all meetings of the directors. The
secretary shall issue notices for such meetings in accordance with the
requirements of the bylaws. The secretary shall have custody of the corporate
seal and, upon request of an officer authorized by the board of directors to
execute on behalf of the corporation an instrument relating to real or personal
property, shall attest any such instrument and shall
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perform such other duties as from time to time shall be assigned by the
directors or by the chief executive officer.
Section 5.10. Assistant Secretaries. Each assistant secretary,
if such officer is elected, shall have such powers and perform such duties as
may be assigned by the board of directors or the chief executive officer
(notwithstanding the absence of any authorization by the board of directors to
prescribe the authority and duties of officers), and the assistant secretaries
shall exercise the powers of the secretary during that officer's absence or
inability to act.
Section 5.11. Voting Upon Stocks. Unless otherwise ordered by
the board of directors, the chief executive officer (or such officer as the
chief executive officer shall designate) shall have full power and authority on
behalf of the corporation to attend, act and vote at meetings of the
shareholders of any corporation in which this corporation may hold stock, and at
such meetings shall possess and may exercise any and all rights and powers
incident to the ownership of such stock and which, as the owner, the corporation
might have possessed and exercised if present. The board of directors may by
resolution from time to time confer such power and authority upon any other
person or persons.
ARTICLE 6
CAPITAL STOCK
Section 6.1. Certificates. Shares of the capital stock of the
corporation shall be represented by certificates. The name and address of the
persons to whom shares of capital stock of the corporation are issued, with the
number of shares and date of issue, shall be entered on the stock transfer
records of the corporation. Certificates for shares of the capital stock of the
corporation shall be in such form not inconsistent with the articles of
incorporation of the corporation as shall be approved by the board of directors.
Each certificate shall be signed (either manually or by facsimile) by the chief
executive officer, the chairman or the president and by the secretary or an
assistant secretary. Each certificate may be sealed with the seal of the
corporation or a facsimile thereof.
Section 6.2. Transfer of Shares. Transfer of shares shall be
made on the stock transfer records of the corporation, and transfers shall be
made only upon surrender of the certificate for the shares sought to be
transferred by the recordholder or by a duly authorized agent, transferee or
legal representative. All certificates surrendered for transfer or reissue shall
be cancelled before new certificates for the shares shall be issued.
Section 6.3. Transfer Agent and Registrar. The board of
directors may appoint one or more transfer agents and one or more registrars of
transfers and may require all stock certificates to be signed or countersigned
by the transfer agent and registered by the registrar of transfers.
Section 6.4. Regulations. The board of directors may make
rules and regulations as it deems expedient concerning the issue, transfer and
registration of shares of capital stock of the corporation.
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Section 6.5. Fixing Record Date. For the purpose of
determining shareholders entitled to notice of or to vote at any meeting of
shareholders, or entitled to receive payment of any dividend, or in order to
make a determination of shareholders for any other purpose, the board of
directors or the chief executive officer may fix in advance a date as the record
date for the determination of shareholders. The record date shall be not more
than 70 days before the meeting or action requiring a determination of
shareholders. A determination of shareholders entitled to notice of or to vote
at a shareholders' meeting shall be effective for any adjournment of the meeting
unless the board of directors fixes a new record date, which it shall do if the
meeting is adjourned to a date more than 120 days after the date fixed for the
original meeting. If no record date is fixed for the determination of
shareholders, the record date shall be the day the notice of the meeting is
mailed or the day the action requiring a determination of shareholders is taken.
Section 6.6. Lost Certificates. The corporation must authorize
the issuance of a new certificate in place of a certificate claimed to have been
lost, destroyed or wrongfully taken, upon receipt of (a) an affidavit from the
person explaining the loss, destruction or wrongful taking, and (b) a bond from
the claimant in such sum and with such surety or other security and in such form
acceptable to the corporation as the corporation may reasonably direct to
indemnify the corporation against loss from any claim with respect to the
certificate claimed to have been lost, destroyed or wrongfully taken. The
corporation may, in its discretion, waive the affidavit and bond and authorize
the issuance of a new certificate in place of a certificate claimed to have been
lost, destroyed or wrongfully taken or authorize the chief executive officer to
waive the bond and authorize issuance of a new replacement certificate.
ARTICLE 7
INDEMNIFICATION OF DIRECTORS, OFFICERS, AND EMPLOYEES
Section 7.1. Indemnification Provisions. Any person who at any
time serves or has served as a director, officer or employee of the corporation
or of any wholly owned subsidiary or affiliate of the corporation, or in such
capacity at the request of the corporation for any other foreign or domestic
corporation, partnership, joint venture, trust or other enterprise, or as a
trustee or administrator under any employee benefit plan of the corporation or
of any wholly owned subsidiary thereof (a "Claimant"), shall be indemnified and
held harmless by the corporation to the fullest extent from time to time
permitted by law against all liabilities and litigation expenses (as hereinafter
defined) in the event a claim shall be made or threatened against that person
in, or that person is made or threatened to be made a party to, any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, and whether or not brought by or on behalf of
the corporation, including all appeals therefrom (a "proceeding"), seeking to
hold the Claimant liable by reason of the fact that he or she is or was serving
in such capacity (whether the basis of such proceeding is alleged action in such
official capacity or in any other capacity while serving in such official
capacity); provided, such indemnification shall not be effective with respect to
(a) that portion of any liabilities or litigation expenses with respect to which
the Claimant is entitled to receive payment under any insurance policy other
than a directors' and officers' insurance policy maintained by the Company or
(b) any liabilities or litigation expenses incurred on account of any of the
Claimant's activities which were at the time taken known or believed by the
Claimant to be clearly in conflict with the best interests of the corporation.
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Section 7.2. Definitions. As used in this Article, (a)
"liabilities" shall include, without limitation, (1) payments in satisfaction of
any judgment, money decree, excise tax, fine or penalty for which the Claimant
had become liable in any proceeding and (2) payments in settlement of any such
proceeding subject, however, to Section 7.3; (b) "litigation expenses" shall
include, without limitation, (1) reasonable costs and expenses and attorneys'
fees and expenses actually and necessarily incurred by the Claimant in
connection with any proceeding and (2) reasonable costs and expenses and
attorneys' fees and expenses in connection with the enforcement of rights to the
indemnification granted hereby or by applicable law, if such enforcement is
successful in whole or in part; and (c) "disinterested directors" shall mean
directors who are not party to the proceeding in question.
Section 7.3. Settlements. The corporation shall not be liable
to indemnify the Claimant for any amounts paid in settlement of any proceeding
effected without the corporation's written consent. The corporation will not
unreasonably withhold its consent to any proposed settlement.
Section 7.4. Litigation Expense Advances.
(a) Subject to the provisions of subsections (b) and (c)
below, any litigation expenses shall be advanced to any Claimant within 60 days
of receipt by the general counsel or secretary of the corporation of a demand
therefor, together with an undertaking (in such form as the corporation may
prescribe from time to time) by or on behalf of the Claimant to repay to the
corporation such amount unless it is ultimately determined that the Claimant is
entitled to be indemnified by the corporation against such expenses. The
Claimant shall also forward to the general counsel or secretary a statement as
to any insurance in effect of the type described in Section 7.1, together with
any information which the Claimant wishes to have considered in determining
whether the standards set forth below have been met. The general counsel or
secretary shall promptly forward notice of the demand and undertaking
immediately to all directors of the corporation.
(b) In the event a demand for an advance of litigation
expenses is received from a Claimant who is or was a director or the chief
executive of the corporation, the general counsel or secretary shall call a
meeting of a special committee (the "Special Committee"), the membership of
which shall include only disinterested directors, and such Special Committee
shall determine within 30 days thereafter, based upon the facts and information
then available to them, whether the Claimant's activities were at the time taken
known or believed by the Claimant to be clearly in conflict with the best
interests of the corporation. In making such determination, the Special
Committee shall consult with representatives of any insurance carrier having a
directors' and officers' liability policy in effect which covers the Claimant,
where such insurance has been purchased by the corporation. No such advance
shall be made if a majority of the Special Committee determines that the
litigation expenses have been incurred on account of activities which at the
time taken by such Claimant were known or believed by him to be clearly in
conflict with the best interests of the corporation. To the extent that any
Claimant shall be entitled to an advance under this section, it shall be a
further condition to such advance that counsel selected by a Claimant be
approved by the corporation and to the extent deemed necessary by the
corporation the selection of such counsel shall also be approved by the carrier
of any directors' and officer's liability insurance then in effect. The
corporation also reserves the right, in the instance of multiple Claimants, to
require, if appropriate, the consolidation of the defense of Claimants with
counsel chosen by the corporation. No such advance of any particular items of
litigation expenses shall be made if a majority of the Special Committee
affirmatively determines that such particular items are unreasonable and/or
excessive. In any such case, the Special Committee must determine the
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unreasonable or excessive amount, and the Company shall withhold advances of
expenses only in the dollar amount so determined as excessive and/or
unreasonable.
(c) In the discretion of the chief executive officer or the
chief executive officer's designee, the Special Committee procedures set forth
in Section 7.4(b) may be deemed to apply to a demand for an advance of
litigation expenses received from a Claimant not referred to in the first
sentence of Section 7.4(b) (including but not limited to a Claimant who is or
was an officer (other than the chief executive officer) or employee of the
corporation or a director, officer or employee of a subsidiary of the
corporation). Alternatively, the chief executive officer or the chief executive
officer's designee may cause the Special Committee procedures set forth in
subsection (b) to be waived and, in lieu thereof, the chief executive officer or
the chief executive officer's designee may determine whether the applicable
standard of conduct required by Section 7.4(b) has been met, whether the amount
of such expenses is reasonable and the amount of such expenses, if any, that are
unreasonable or excessive and consequently are to be withheld.
Section 7.5. Approval of Indemnification Payments. Except as
may be determined in an action brought pursuant to Section 7.6 below,
indemnification payments by the corporation for liabilities and litigation
expenses (or a termination of the undertaking required under Section 7.4 above
with respect to advanced expenses) may be made only following a determination
that the activities of the Claimant (if the Claimant is or was a director of the
corporation) were not of the kind described in Section 7.4(b), which
determination shall be made (a) by a majority of the disinterested directors (if
there are at least two such directors), or (b) if there are not two such
directors, or if a majority of the disinterested directors so directs, by
independent legal counsel in a written opinion, or (c) by a majority of the
shareholders or (d) in accordance with any other reasonable procedures
prescribed by the board of directors prior to the assertion of the claim for
which indemnification is sought. The reasonableness of amounts of settlements
and litigation expenses may be approved by a majority of the disinterested
members of the board of directors. If the Claimant is an officer or employee of
the corporation, the determination required by this paragraph may be made by the
chief executive officer of the corporation or his designee.
Section 7.6. Suits by Claimant. If a claim under Section 7.1
is not paid in full by the corporation within 60 days after a written claim has
been received by the corporation, or a demand for advances is not paid within 60
days of receipt by the corporation of such demand accompanied by an undertaking
as described in Section 7.4, the Claimant may at any time thereafter bring suit
against the corporation to recover the unpaid amount of the claim or demand. It
shall be a defense to any such action that the Claimant's liabilities or
litigation expenses were incurred on account of activities which were at the
time taken known or believed by the Claimant to be clearly in conflict with the
best interests of the corporation, or were unreasonable, but the burden of
proving such defense shall be on the corporation. Neither the failure of the
corporation (including its disinterested directors, independent legal counsel,
shareholders or the chief executive officer or his designee, if applicable) to
have made a determination prior to the commencement of such action that
indemnification of the Claimant is proper in the circumstances, nor an actual
determination by the corporation (including its disinterested directors,
independent legal counsel, shareholders or the chief executive officer or the
chief executive officer's designee, if applicable) that the Claimant had not met
such applicable standard of conduct shall be a defense to the action or create a
presumption that Claimant has not met the applicable standard of conduct.
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Section 7.7. Consideration; Personal Representatives and Other
Remedies. Any Claimant who during such time as this Article or corresponding
provisions of predecessor bylaws is or has been in effect serves or has served
in any of the capacities described in Section 7.1 shall be deemed to be doing so
or to have done so in reliance upon, and as consideration for, the right of
indemnification provided herein or therein. The right of indemnification
provided herein or therein shall inure to the benefit of the legal
representatives of any Claimant hereunder, and the right shall not be exclusive
of any other rights to which the Claimant or legal representative may be
entitled apart from this Article.
Section 7.8. Scope of Indemnification Rights. The rights
granted herein shall not be limited by the provisions of Section 55-8-51 of the
General Statutes of North Carolina or any successor statute.
ARTICLE 8
GENERAL PROVISIONS
Section 8.1. Dividends and other Distributions. The board of
directors may from time to time declare and the corporation may pay dividends or
make other distributions with respect to its outstanding shares in the manner
and upon the terms and conditions provided by law. If the board of directors
does not fix the record date for determining shareholders entitled to a
distribution, the record date shall be the date the board of directors
authorizes the distribution (other than a distribution involving a purchase,
redemption or other acquisition of the corporation's shares, for which no record
date is required to be fixed).
Section 8.2. Seal. The seal of the corporation shall be any
form approved from time to time or at any time by the board of directors. The
seal may be affixed to any document by the secretary, any assistant secretary,
or any other person or persons specifically authorized by the board of directors
or the chief executive officer.
Section 8.3. Waiver of Notice. Whenever notice is required to
be given to a shareholder, director or other person under the provisions of
these bylaws, the articles of incorporation or applicable law, a waiver in
writing signed by the person or persons entitled to the notice, whether before
or after the date and time stated in the notice, and delivered to the
corporation shall be equivalent to giving the notice.
Section 8.4. Checks. All checks, drafts or orders for the
payment of money shall be signed by the officer or officers or other individuals
that the board of directors or chief executive officer may from time to time
authorize.
Section 8.5. Fiscal Year. The fiscal year of the corporation
shall be the calendar year or such other period fixed by the board of directors.
Section 8.6. Amendments. Unless otherwise provided in the
articles of incorporation or a bylaw adopted by the shareholders or by law,
these bylaws may be amended or repealed by the board of directors, except that a
bylaw adopted, amended or repealed by the shareholders may not be
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readopted, amended or repealed by the board of directors if neither the articles
of incorporation nor a bylaw adopted by the shareholders authorizes the board of
directors to adopt, amend or repeal that particular bylaw or the bylaws
generally. These bylaws may be amended or repealed by the shareholders even
though the bylaws may also be amended or repealed by the board of directors. A
bylaw that fixes a greater quorum or voting requirement for the board of
directors may be amended or repealed (a) if originally adopted by the
shareholders, only by the shareholders, unless such bylaw as originally adopted
by the shareholders provides that such bylaw may be amended or repealed by the
board of directors or (b) if originally adopted by the board of directors,
either by the shareholders or by the board of directors. A bylaw that fixes a
greater quorum or voting requirement may not be adopted by the board of
directors by a vote less than a majority of the directors then in office and may
not itself be amended by a quorum or vote of the directors less than the quorum
or vote prescribed in such bylaw or prescribed by the shareholders.
Section 8.7. Applicability of Antitakeover Statutes. The
provisions of Article 9 of the North Carolina Business Corporation Act, entitled
"Shareholder Protection Act," shall not be applicable to the corporation.
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EXHIBIT 5.1
[LETTERHEAD OF WACHOVIA CORPORATION]
October 1, 1997
Wachovia Corporation
100 North Main Street
P.O. Box 3099
Winston-Salem, North Carolina 27150
RE: Registration Statement on Form S-4
Gentlemen:
I am familiar with the proceedings taken by Wachovia Corporation (the
"Company") in connection with the preparation and filing with the Securities and
Exchange Commission of a Registration Statement on Form S-4 (the "Registration
Statement") under the Securities Act of 1933, as amended, pertaining to the
issuance of up to 3,905,500 shares of the Company's Common Stock, par value
$5.00 per share (the "Shares"), pursuant to the terms of the Agreement and Plan
of Merger, dated as of August 6, 1997, by and between the Company and 1st United
Bancorp (the "Merger Agreement").
As counsel for the Company, I have reviewed the Registration Statement and
the Merger Agreement, and I have examined and am familiar with the records
relating to the organization of the Company, including its articles of
incorporation, bylaws and all amendments thereto, and the records of all
proceedings taken by the Board of Directors of the Company pertinent to the
rendering of this opinion.
Based on the foregoing, and having regard for such legal considerations as
I have deemed relevant, I am of the opinion that the Shares have been duly
authorized and, upon issuance in accordance with the terms of the Merger
Agreement, will be validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the listing of my name in the Prospectus.
Sincerely,
/s/ Kenneth W. McAllister
Kenneth W. McAllister
<PAGE>
EXHIBIT 8.1
[S&C LETTERHEAD]
October 1, 1997
Wachovia Corporation
301 North Main Street,
Winston-Salem, North Carolina 27101
Ladies and Gentlemen:
We have acted as special counsel in connection with the planned merger (the
"Merger") of 1st United Bancorp, a Florida corporation ("1st United"), with and
into Wachovia Corporation, a North Carolina Corporation ("Wachovia"), pursuant
to the Agreement and Plan of Merger (the "Agreement"), dated as of August 6,
1997, by and between Wachovia and 1st United. Capitalized terms used but not
defined herein shall have the meanings specified in the Registration Statement
or the appendices thereto (including the Agreement).
We have assumed with your consent that (1) the Merger will be consummated
solely in compliance with the material terms and conditions of the Agreement and
none of the material terms and conditions thereof have been or will be waived or
modified and (2) the representations contained in the letters of representation
from Wachovia and 1st United to us dated October 1, 1997 and October 1, 1997,
respectively, were true and correct when made and will be true and correct at
the Effective Time.
On the basis of the foregoing, and our consideration of such other matters
of fact and law as we have deemed necessary or appropriate, it is our opinion,
under presently applicable federal income tax law, that the Merger will
constitute a reorganization under Section 368 of the Internal Revenue Code of
1986, as amended (the "Code"), and that:
(i) no gain or loss will be recognized by Wachovia or 1st United as a
result of the consummation of the Merger;
(ii) no gain or loss will be recognized for federal income tax
purposes by 1st United stockholders upon the exchange in the Merger of
shares of 1st United stock solely for Wachovia stock (except with respect
to cash received in lieu of a fractional share interest in Wachovia stock);
(iii) the basis of Wachovia stock received in the Merger by 1st United
stockholders (including the basis of any fractional share interest in
Wachovia stock) will be the same as the basis of the shares of 1st United
stock surrendered in exchange therefor;
(iv) the holding period of Wachovia stock received in the Merger by
1st United stockholders (including the holding period of any fractional
share interest in Wachovia stock) will include the period during which the
shares of 1st United stock surrendered in exchange therefor were held by
the 1st United stockholder, provided such shares of 1st United stock were
held as capital assets; and
(v) the payment of cash to a 1st United stockholder in lieu of a
fractional share interest in Wachovia Common Stock will be treated as if
the fractional share had been distributed as part of the exchange and then
redeemed by Wachovia. The cash payment will be treated as having been
received as a distribution in payment for the Wachovia Common Stock
hypothetically redeemed as provided in Section 302 of the Code and, to the
extent that such redemption is "substantially disproportionate" with
respect to the 1st United stockholder or is not treated as "essentially
equivalent to a dividend" after giving effect to the relevant constructive
ownership rules of the Code, generally should result in the recognition of
capital gain or loss measured by the difference between the amount of cash
received and the tax basis of the fractional share of Wachovia Common Stock
hypothetically redeemed. Such capital gain or loss would be long-term
capital gain or loss if the 1st United stockholder's holding period in the
fractional share interest (determined as described in (iv) above) is more
than one year. Long-term capital gain of an individual 1st United
stockholder is generally subject to a maximum tax rate of 28% in respect of
property held for more than one year and to a maximum tax rate of 20% in
respect of property held in excess of 18 months.
We express no opinion as to the effect of the Merger on Wachovia, 1st
United or any shareholder in respect of any asset as to which unrealized gain is
required to be recognized for U.S. Federal income tax purposes at the end of
each taxable year under a mark-to-market system.
<PAGE>
This opinion deals only with 1st United stockholders who are (i) citizens
or residents of the United States, (ii) domestic corporations or (iii) otherwise
subject to United States federal income tax on a net income basis in respect of
shares of 1st United common stock. The federal income tax consequences described
herein may not apply to certain classes of taxpayers, including, without
limitation, insurance companies, tax-exempt organizations, financial
institutions, dealers in securities, persons who acquired or acquire shares of
1st United common stock pursuant to the exercise of employee stock options or
otherwise as compensation and persons who hold shares of 1st United common stock
in a hedging transaction or as part of a straddle or conversion transaction.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to this opinion in the Registration
Statement, including the references under the captions "THE MERGER -- Certain
Federal Income Tax Consequences" and "THE MERGER -- Conditions to Consummation".
In giving this consent, we do not hereby admit that we are within the category
of persons whose consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
/s/ SULLIVAN & CROMWELL
2
<PAGE>
EXHIBIT 8.2
[Akerman, Senterfitt & Eidson, P.A. Letterhead]
October 1, 1997
1st United Bancorp
980 N. Federal Highway
Boca Raton, Florida 33432
Re: Agreement and Plan of Merger Dated as of
August 6, 1997, By and Between Wachovia Corporation and
1st United Bancorp.
Dear Sirs:
You have requested our opinion concerning certain federal income tax issues
relating to the Agreement and Plan of Merger, dated as of August 6, 1997 (the
"Merger Agreement"), by and between 1st United Bancorp, a Florida corporation
("1st United") and Wachovia Corporation, a North Carolina corporation
("Wachovia"). Capitalized terms not otherwise defined in this letter shall have
the same meanings as those terms in the Merger Agreement. In rendering the
opinion we have examined (i) the Merger Agreement; (ii) the representation
letters from Wachovia and 1st United, which are attached; and (iii) such other
documents as we have deemed necessary or appropriate in order to render the
requested opinion.
In connection with such examination we have assumed (1) the authenticity of
all documents, agreements and instruments; (2) that the documents reviewed in
connection with rendering the opinion are complete and accurate and will be
complete and accurate as of the effective date of the Merger; (3) that the
Merger will be effective under applicable state laws; and (4) the Merger
Agreement accurately and completely describes the terms of the Merger. In
rendering our opinion, we have not undertaken independent investigation of the
accuracy of any assumptions stated herein, the veracity of written statements as
to factual matters relied upon in rendering the opinion or the authenticity of
documents.
Our opinion is based on the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury Regulations promulgated under the Code, published Revenue
Rulings, published Revenue Procedures and existing judicial and administrative
decisions all as of the date of this letter. All of the foregoing is subject to
change and any such change (which could be retroactive) could affect the opinion
contained in this letter.
<PAGE>
1st United Bancorp
October 1, 1997
Page 2
The opinion is our legal judgment as to certain of the federal income tax
consequences of the proposed Merger. Our opinion is not binding on the Internal
Revenue Service and the Internal Revenue Service may reach a different
conclusion, which conclusion could be sustained by a court if litigated. The
opinion addresses certain tax consequences to 1st United common stockholders who
are (i) citizens or residents of the United States; (ii) domestic corporations;
or (iii) otherwise subject to United States federal income tax on a net income
basis in respect of shares of 1st United common stock ("U.S. Holders"). The
opinion is limited to the specific conclusions reached in the opinion and does
not purport to reach any other conclusions, such as the future use of tax
attributes of the parties, tax consequences to holders of 1st United Common
Stock who hold such shares as other than capital assets or are insurance
companies, tax exempt organizations, financial institutions, dealers in
securities, persons who acquired or acquire shares of 1st United Common Stock
pursuant to the exercise of employee stock options or otherwise as compensation
and persons who hold 1st United Common Stock in a hedging transaction or as part
of a straddle or conversion transaction. The opinion does not address foreign,
state, local, estate or other potential tax consequences of the Merger.
On the basis of the foregoing, we are of the opinion that for federal
income tax purposes:
(i) the Merger will constitute a tax-free reorganization under Section
368(a) of the Code. No gain or loss will be recognized by Wachovia or 1st United
as a result of the consummation of the Merger. 1st United and Wachovia will each
be a party to the reorganization within the meaning of Section 368(b) of the
Code;
(ii) no gain or loss will be recognized by a U.S. Holder, except as
described below with respect to a U.S. Holder who receives cash in lieu of a
fractional share interest in Wachovia Common Stock;
(iii) the aggregate adjusted tax basis of shares of Wachovia Common Stock
(including a fractional share interest in Wachovia Common Stock deemed received
and redeemed as described below) received by a U.S. Holder will include the
holding period of the 1st United Common Stock exchanged therefor; and
(iv) the holding period of shares of Wachovia Common Stock (including a
fractional share interest in Wachovia Common Stock deemed received and redeemed
as described below) received by a U.S. Holder will include the holding period of
the 1st United Common Stock exchanged therefor; and
<PAGE>
1st United Bancorp
October 1, 1997
Page 3
(v) a U.S. Holder of 1st United Common Stock who receives cash in lieu of a
fractional share interest in Wachovia Common Stock will be treated as having
received such fractional share interest and then as having received the cash in
redemption of such fractional share interest. Under Section 302 of the Code, if
such deemed distribution were "substantially disproportionate" with respect to
the U.S. Holder or were "not essentially equivalent to a dividend" after giving
effect to the constructive ownership rules of the Code, the U.S. Holder would
generally recognize capital gain or loss equal to the difference between the
amount of cash received and the U.S. Holder's adjusted tax basis in the
fractional share interest (determined as described in (iii) above). Such capital
gain or loss would be long-term capital gain or loss if the U.S. Holder's
holding period in the fractional share interest (determined as described in (iv)
above) is more than one year. (The long-term capital gain rates depend on
whether the holding period is 12 months or 18 months.)
Except as set forth above, we express no opinion as to the tax consequences
to any party, whether federal, state, local or foreign, or of any transaction
related to the Merger contemplated by the Agreements. This opinion is being
furnished only to you in connection with the Merger and solely for your benefit
in connection therewith and may not be used or relied upon for any other purpose
and may not be circulated, quoted or otherwise referred to for any purpose
without our expressed written consent.
We hereby consent to the filing of this opinion letter with the Security
and Exchange Commission as an exhibit to the registration statement and to the
references under the caption "The Merger -- Certain Federal Income Tax
Consequences" and other locations. By so consenting we do not admit that we are
in the category of persons required to consent under Section 7 of the Securities
Act of 1933, as amended.
Yours very truly,
/s/ AKERMAN, SENTERFITT & EIDSON, P.A.
Akerman, Senterfitt & Eidson, P.A.
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4 filed on or about October 1, 1997) and related
Prospectus of Wachovia Corporation for the registration of 3,905,500 shares of
its common stock and to the incorporation by reference therein of our report
dated January 15, 1997, with respect to the consolidated financial statements of
Wachovia Corporation incorporated by reference in its Annual Report (Form 10-K)
for the year ended December 31, 1996, filed with the Securities and Exchange
Commission.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Winston-Salem, North Carolina
September 30, 1997
<PAGE>
EXHIBIT 23.5
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated January 9, 1997 (except for the first and fourth
paragraphs of Note 2, as to which the date is April 1, 1997; the first and
second paragraphs of Note 15, as to which the date is July 1, 1997; and the
third paragraph of Note 15, as to which the date is August 7, 1997), with
respect to the supplementary consolidated financial statements of 1st United
Bancorp included in its Amendment No. 1 to Current Report on Form 8-K/A dated
April 1, 1997, filed with the Securities and Exchange Commission incorporated by
reference in the Proxy Statement of Wachovia Corporation that is made a part of
the Registration Statement (Form S-4 filed on or about October 1, 1997) and
Prospectus of Wachovia Corporation for the registration of 3,905,500 shares of
its common stock.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
West Palm Beach, Florida
September 29, 1997
<PAGE>
EXHIBIT 23.6
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Central Fidelity Banks, Inc.:
We consent to the use of our report dated January 15, 1997, with respect to
the consolidated balance sheet of Central Fidelity Banks, Inc. and subsidiaries
as of December 31, 1996 and 1995, and the related statements of consolidated
income, consolidated cash flows and changes in consolidated shareholders' equity
for each of the years in the three-year period ended December 31, 1996, which
report appears in Wachovia Corporation's Current Report on Form 8-K dated
September 8, 1997 and is incorporated by reference in the Registration Statement
on Form S-4 of Wachovia Corporation, and to the reference to our firm under the
heading "Experts" in the Proxy Statement/Prospectus.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Richmond, Virginia
September 29, 1997
<PAGE>
EXHIBIT 23.7
1st United Bancorp
Boca Raton, Florida
We hereby consent to the use of our report dated February 4, 1997, relating
to the consolidated financial statements of Island National Bank and Trust
Company which is contained in Amendment No. 1 to the Current Report on Form 8K-A
dated April 1, 1997 filed by 1st United Bancorp with the Securities and Exchange
Commission incorporated by reference in the Proxy Statement of Wachovia
Corporation that is made a part of the Registration Statement (Form S-4 to be
filed on or about October 1, 1997) and Prospectus of Wachovia Corporation for
the registration of 3,905,500 shares of its common stock.
/s/ BDO SEIDMAN, LLP
BDO SEIDMAN, LLP
West Palm Beach, Florida
September 29, 1997
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, the undersigned director of Wachovia Corporation, do hereby make,
constitute and appoint Kenneth W. McAllister and Alice Washington Grogan, and
each of them (either of whom may act without the consent or joinder of the
other), my attorneys-in-fact and agents with full power of substitution for me
and in my name, place and stead, in any and all capacities, to file a
Registration Statement on Form S-4 or other applicable form, relating to one or
more offerings of the Corporation's common stock, with the Securities and
Exchange Commission, and to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and to file the same,
with any exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as I might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
September, 1997.
/s/ PETER C. BROWNING
PETER C. BROWNING
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, the undersigned director of Wachovia Corporation, do hereby make,
constitute and appoint Kenneth W. McAllister and Alice Washington Grogan, and
each of them (either of whom may act without the consent or joinder of the
other), my attorneys-in-fact and agents with full power of substitution for me
and in my name, place and stead, in any and all capacities, to file a
Registration Statement on Form S-4 or other applicable form, relating to one or
more offerings of the Corporation's common stock, with the Securities and
Exchange Commission, and to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and to file the same,
with any exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as I might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
September, 1997.
/s/ JOHN L. CLENDENIN
JOHN L. CLENDENIN
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, the undersigned director of Wachovia Corporation, do hereby make,
constitute and appoint Kenneth W. McAllister and Alice Washington Grogan, and
each of them (either of whom may act without the consent or joinder of the
other), my attorneys-in-fact and agents with full power of substitution for me
and in my name, place and stead, in any and all capacities, to file a
Registration Statement on Form S-4 or other applicable form, relating to one or
more offerings of the Corporation's common stock, with the Securities and
Exchange Commission, and to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and to file the same,
with any exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as I might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
September, 1997.
/s/ LAWRENCE M. GRESSETTE, JR.
LAWRENCE M. GRESSETTE, JR.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, the undersigned director of Wachovia Corporation, do hereby make,
constitute and appoint Kenneth W. McAllister and Alice Washington Grogan, and
each of them (either of whom may act without the consent or joinder of the
other), my attorneys-in-fact and agents with full power of substitution for me
and in my name, place and stead, in any and all capacities, to file a
Registration Statement on Form S-4 or other applicable form, relating to one or
more offerings of the Corporation's common stock, with the Securities and
Exchange Commission, and to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and to file the same,
with any exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as I might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
September, 1997.
/s/ THOMAS K. HEARN, JR.
THOMAS K. HEARN, JR.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, the undersigned director of Wachovia Corporation, do hereby make,
constitute and appoint Kenneth W. McAllister and Alice Washington Grogan, and
each of them (either of whom may act without the consent or joinder of the
other), my attorneys-in-fact and agents with full power of substitution for me
and in my name, place and stead, in any and all capacities, to file a
Registration Statement on Form S-4 or other applicable form, relating to one or
more offerings of the Corporation's common stock, with the Securities and
Exchange Commission, and to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and to file the same,
with any exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as I might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
September, 1997.
/s/ GEORGE W. HENDERSON, III
GEORGE W. HENDERSON, III
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, the undersigned director of Wachovia Corporation, do hereby make,
constitute and appoint Kenneth W. McAllister and Alice Washington Grogan, and
each of them (either of whom may act without the consent or joinder of the
other), my attorneys-in-fact and agents with full power of substitution for me
and in my name, place and stead, in any and all capacities, to file a
Registration Statement on Form S-4 or other applicable form, relating to one or
more offerings of the Corporation's common stock, with the Securities and
Exchange Commission, and to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and to file the same,
with any exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as I might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
September, 1997.
/s/ W. HAYNE HIPP
W. HAYNE HIPP
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, the undersigned director of Wachovia Corporation, do hereby make,
constitute and appoint Kenneth W. McAllister and Alice Washington Grogan, and
each of them (either of whom may act without the consent or joinder of the
other), my attorneys-in-fact and agents with full power of substitution for me
and in my name, place and stead, in any and all capacities, to file a
Registration Statement on Form S-4 or other applicable form, relating to one or
more offerings of the Corporation's common stock, with the Securities and
Exchange Commission, and to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and to file the same,
with any exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as I might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
September, 1997.
/s/ ROBERT M. HOLDER, JR.
ROBERT M. HOLDER, JR.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, the undersigned director of Wachovia Corporation, do hereby make,
constitute and appoint Kenneth W. McAllister and Alice Washington Grogan, and
each of them (either of whom may act without the consent or joinder of the
other), my attorneys-in-fact and agents with full power of substitution for me
and in my name, place and stead, in any and all capacities, to file a
Registration Statement on Form S-4 or other applicable form, relating to one or
more offerings of the Corporation's common stock, with the Securities and
Exchange Commission, and to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and to file the same,
with any exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as I might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
September, 1997.
/s/ ROBERT A. INGRAM
ROBERT A. INGRAM
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, the undersigned director of Wachovia Corporation, do hereby make,
constitute and appoint Kenneth W. McAllister and Alice Washington Grogan, and
each of them (either of whom may act without the consent or joinder of the
other), my attorneys-in-fact and agents with full power of substitution for me
and in my name, place and stead, in any and all capacities, to file a
Registration Statement on Form S-4 or other applicable form, relating to one or
more offerings of the Corporation's common stock, with the Securities and
Exchange Commission, and to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and to file the same,
with any exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as I might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
September, 1997.
/s/ JAMES W. JOHNSTON
JAMES W. JOHNSTON
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, the undersigned director of Wachovia Corporation, do hereby make,
constitute and appoint Kenneth W. McAllister and Alice Washington Grogan, and
each of them (either of whom may act without the consent or joinder of the
other), my attorneys-in-fact and agents with full power of substitution for me
and in my name, place and stead, in any and all capacities, to file a
Registration Statement on Form S-4 or other applicable form, relating to one or
more offerings of the Corporation's common stock, with the Securities and
Exchange Commission, and to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and to file the same,
with any exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as I might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
September, 1997.
/s/ WYNDHAM ROBERTSON
WYNDHAM ROBERTSON
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, the undersigned director of Wachovia Corporation, do hereby make,
constitute and appoint Kenneth W. McAllister and Alice Washington Grogan, and
each of them (either of whom may act without the consent or joinder of the
other), my attorneys-in-fact and agents with full power of substitution for me
and in my name, place and stead, in any and all capacities, to file a
Registration Statement on Form S-4 or other applicable form, relating to one or
more offerings of the Corporation's common stock, with the Securities and
Exchange Commission, and to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and to file the same,
with any exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as I might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
September, 1997.
/s/ HERMAN J. RUSSELL
HERMAN J. RUSSELL
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, the undersigned director of Wachovia Corporation, do hereby make,
constitute and appoint Kenneth W. McAllister and Alice Washington Grogan, and
each of them (either of whom may act without the consent or joinder of the
other), my attorneys-in-fact and agents with full power of substitution for me
and in my name, place and stead, in any and all capacities, to file a
Registration Statement on Form S-4 or other applicable form, relating to one or
more offerings of the Corporation's common stock, with the Securities and
Exchange Commission, and to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and to file the same,
with any exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as I might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
September, 1997.
/s/ SHERWOOD H. SMITH, JR.
SHERWOOD H. SMITH, JR.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, the undersigned director of Wachovia Corporation, do hereby make,
constitute and appoint Kenneth W. McAllister and Alice Washington Grogan, and
each of them (either of whom may act without the consent or joinder of the
other), my attorneys-in-fact and agents with full power of substitution for me
and in my name, place and stead, in any and all capacities, to file a
Registration Statement on Form S-4 or other applicable form, relating to one or
more offerings of the Corporation's common stock, with the Securities and
Exchange Commission, and to sign any and all amendments (including
post-effective amendments) to the Registration Statement, and to file the same,
with any exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them individually, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in the premises, as fully
to all intents and purposes as I might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney this 26th day of
September, 1997.
/s/ JOHN C. WHITAKER, JR.
JOHN C. WHITAKER, JR.
<PAGE>
CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY
SUBJECT TO COMPLETION DATED SEPTEMBER 15, 1997
[FRONT OF PROXY CARD]
PROXY SOLICITED BY 1ST UNITED BANCORP
The undersigned, a holder of record of shares of common stock, par value
$.01 per share ("1st United Common Stock"), of 1st United Bancorp, a Florida
corporation ("1st United"), hereby appoints Donald Vinik, Thomas L. Delaney, and
Harold Toppel, or any of them, the proxy or proxies of the undersigned (with
full power to act in the absence of the others, the act of a majority of those
present to be controlling, each with full power of substitution), to attend the
Special Meeting of 1st United shareholders at 2:00 p.m., on October 30, 1997, at
the Colony Hotel, 155 Hammon Avenue, Palm Beach, Florida (and any
adjournments, postponements, continuations or reschedulings thereof), at which
holders of 1st United Common Stock will be voting on, among other things,
approval and adoption of the Agreement and Plan of Merger, dated as of August 6,
1997, and the related plan of merger, between 1st United and Wachovia
Corporation ("Wachovia"), pursuant to which 1st United will merge with and into
Wachovia and such other business as may properly come before the Special Meeting
or any adjournment or postponement thereof and to vote as specified in this
proxy all the shares of 1st United Common Stock which the undersigned would
otherwise be entitled to vote if personally present. The undersigned hereby
revokes any previous proxies with respect to the matters covered in this proxy.
THE BOARD OF DIRECTORS OF 1ST UNITED UNANIMOUSLY RECOMMENDS A VOTE FOR THE
PROPOSAL.
IF RETURNED CARDS ARE SIGNED BUT NOT MARKED, THE UNDERSIGNED WILL BE DEEMED
TO HAVE VOTED FOR THE PROPOSAL AND AS DETERMINED BY A MAJORITY OF THE 1ST UNITED
BOARD AS TO ANY OTHER MATTER.
<PAGE>
[REVERSE OF PROXY CARD]
THE BOARD OF DIRECTORS OF 1ST UNITED UNANIMOUSLY RECOMMENDS A VOTE FOR THE
PROPOSAL SET FORTH BELOW.
1. APPROVAL OF THE AGREEMENT AND PLAN OF MERGER, DATED AS OF AUGUST 6, 1997,
AND THE RELATED PLAN OF MERGER, BETWEEN 1ST UNITED AND WACHOVIA
CORPORATION ("WACHOVIA"), PURSUANT TO WHICH 1ST UNITED WILL MERGE WITH
AND INTO WACHOVIA.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS,
POSTPONEMENTS, CONTINUATIONS OR RESCHEDULINGS THEREOF.
<TABLE>
<S> <C>
Date: , 1997 Please sign your name exactly as it appears hereon. When
shares of 1st United Common Stock are held of record by
Signature (Title, if any) joint tenants, only one need sign. When signing as an
attorney-in-fact, executor, administrator, trustee or
Signature (Title, if any) guardian, please give full title as such. If a
corporation, please sign in full corporate name by
president or authorized officer. If a partnership,
please sign in partnership name by authorized person.
</TABLE>
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE, PLEASE CONTACT W.F. DORING & CO.
AT 1-888-330-5111.
