SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Wachovia Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
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[GRAPHIC OMITTED]
100 North Main Street
P.O. Box 3099
Winston-Salem, North Carolina 27150
191 Peachtree Street, N.E.
P.O. Box 4148
Atlanta, Georgia 30303
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 18, 1998
TO THE SHAREHOLDERS OF
WACHOVIA CORPORATION
You are cordially invited to attend the Annual Meeting of Shareholders of
Wachovia Corporation to be held at The Jefferson Hotel, Franklin and Adams
Streets, Richmond, Virginia, on Friday, April 24, 1998, at 10:30 A.M., EDT, for
the following purposes:
(1) To elect five (5) directors for a three-year term to expire at the
2001 Annual Meeting of Shareholders, two (2) directors for a
two-year term to expire at the 2000 Annual Meeting of Shareholders,
and one (1) director for a one-year term to expire at the 1999
Annual Meeting of Shareholders;
(2) To amend the Articles of Incorporation of Wachovia Corporation to
increase the number of shares of common stock authorized to be
issued from 500 million to one billion;
(3) To ratify the appointment of the independent auditors for 1998; and
(4) To transact such other business as properly may come before the
meeting.
Shareholders of record at the close of business on February 23, 1998, are
entitled to notice of and to vote at said meeting and any adjournment thereof.
[GRAPHIC OMITTED]
L. M. Baker, Jr.
Chief Executive Officer
PLEASE MARK, DATE, SIGN AND RETURN YOUR PROXY PROMPTLY.
<PAGE>
[GRAPHIC OMITTED]
100 North Main Street
P.O. Box 3099
Winston-Salem, North Carolina 27150
191 Peachtree Street, N.E.
P.O. Box 4148
Atlanta, Georgia 30303
PROXY STATEMENT
March 18, 1998
This Proxy Statement and accompanying Form of Proxy are being mailed to
shareholders on or about March 18, 1998, in connection with the solicitation of
Proxies by the Board of Directors of Wachovia Corporation ("Wachovia" or the
"Company") for use at the Annual Meeting of Shareholders to be held on April
24, 1998, and at any adjournment thereof. The entire cost of such solicitation
will be borne by Wachovia. In addition to solicitation by mail, arrangements
will be made with brokerage houses and other custodians, nominees and
fiduciaries to send proxy materials to their principals, and Wachovia will
reimburse them for their expenses in so doing. Wachovia has retained W. F.
Doring & Co. to assist in such solicitation. The fee to be paid to such firm is
not expected to exceed $7,500, plus reasonable out-of-pocket costs and
expenses. Personal solicitation also may be conducted by Directors, officers
and employees of Wachovia and its subsidiaries.
The shares represented by the accompanying Proxy will be voted if the
Form of Proxy is properly signed and received by Wachovia prior to or at the
time of the meeting. Where a choice is specified on any Proxy as to the vote on
any matter to come before the meeting, the Proxy will be voted in accordance
with such specification. If no choice is specified, the Proxy will be voted in
favor of Proposals 1, 2 and 3. Any Proxy may be revoked at any time prior to
the voting of the Proxy by notifying the Secretary of Wachovia in writing or by
signing and delivering a Proxy with a later date. A Proxy is suspended if the
person giving the Proxy attends the meeting and elects to vote in person.
Throughout this Proxy Statement, reference will be made to the following
subsidiaries of Wachovia: Wachovia Bank, National Association ("Wachovia
Bank"), resulting from the merger of Wachovia Bank of Georgia, National
Association and Wachovia Bank of South Carolina, National Association with and
into Wachovia Bank of North Carolina, National Association under a single
charter effective June 1, 1997 (all three predecessor banks shall be referred
to, individually and collectively, as Wachovia Bank); Central Fidelity National
Bank ("CFB"), acquired upon the merger of its parent company, Central Fidelity
Banks, Inc. ("Central Fidelity"), into Wachovia Corporation effective December
15, 1997; Jefferson National Bank ("JNB"), acquired upon the merger of its
parent company, Jefferson Bankshares, Inc. ("Jefferson"), into Wachovia
Corporation effective October 31, 1997; and 1st United Bank ("1st Bank"),
acquired upon the merger of its parent company, 1st United Bancorp ("1st
United"), into Wachovia Corporation effective November 10, 1997. Wachovia Bank,
CFB and JNB are national banking associations organized under the laws of the
United States, and 1st Bank is a state banking association organized under the
laws of the state of Florida.
Shareholders of record at the close of business on February 23, 1998,
will be entitled to vote at the Annual Meeting of Shareholders. Holders of
Wachovia's common stock, $5.00 par value per share (the "Common Stock"), are
entitled at all meetings of shareholders of Wachovia to one vote for each share
held. At the close of business on February 23, 1998, there were 205,688,002
shares of Common Stock outstanding. All such shares are entitled to be voted at
the meeting.
<PAGE>
Under Wachovia's bylaws, a majority of votes entitled to be cast on a
particular matter, represented in person or by proxy, constitutes a quorum for
purposes of all matters to be considered at the Annual Meeting. The bylaws of
Wachovia further provide that 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. Abstentions and shares which are withheld as to voting
with respect to one or more of the nominees for Director will be counted in
determining the existence of a quorum, but shares held by a broker, as nominee,
and not voted on any matter will not be counted for such purposes.
Under the laws of North Carolina, the persons receiving a plurality of
the votes cast by the shares entitled to vote will be elected as Directors. The
proposals to amend the Articles of Incorporation of Wachovia Corporation to
increase the number of shares of Common Stock authorized to be issued from 500
million to one billion and to ratify the appointment of auditors for 1998 will
be approved if the votes cast in favor of each such proposal exceed the votes
cast against it. Abstentions, shares which are withheld as to voting with
respect to nominees for Director and shares held of record by a broker, as
nominee, that are not voted with respect to any of the foregoing proposals will
not be counted as a vote in favor of or against such proposal and, therefore,
will have no effect.
To Wachovia's knowledge, no shareholder beneficially owned more than 5% of
the outstanding shares of Wachovia Common Stock as of December 31, 1997.
Wachovia's four principal banking subsidiaries held, as of December 31, 1997, in
various fiduciary capacities, an aggregate of 11,933,749 shares, or 5.80%, of
the Common Stock as follows: Wachovia Bank -- 10,185,177 shares or 4.95%; CFB --
1,433,387 shares or 0.69%; JNB -- 312,400 shares or 0.15%; and 1st Bank -- 2,785
shares or 0.001%.
BOARD OF DIRECTORS
The Board of Directors of Wachovia held 13 meetings during 1997. Each
Director, with the exception of Mr. Casteen who was not elected to the Board
until October 31, 1997, attended at least 75% of the aggregate of the total
number of meetings of the Board of Directors and of all committees of the Board
on which such Director served during 1997.
The bylaws of Wachovia provide that the number of Directors shall not be
less than nine nor more than twenty-five. There are presently twenty Directors
divided into three classes. The bylaws further provide that no person shall be
elected a Director or continue to serve past an annual meeting if such person
has reached the age of 67 years, and no person shall be elected a Director who
has retired from active participation or practice of the person's principal
business or profession, provided that 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 age limitation. Miss Wyndham Robertson and Messrs. Robert M. Holder, Jr.,
James W. Johnston, and Herman J. Russell are retiring as of the date of the
Annual Meeting pursuant to such provisions of the Company's bylaws. At the 1998
Annual Meeting of Shareholders, five Directors are to be elected to serve for a
term of three years, until the 2001 Annual Meeting; two Directors are to be
elected to serve for a term of two years, until the 2000 Annual Meeting, and
one Director is to be elected to serve for a term of one year, until the 1999
Annual Meeting. If elected, the nominees will serve until their respective
terms expire, except as the age and other retirement provisions of Wachovia's
bylaws otherwise require, and until their successors are elected and qualified.
The remaining members of the Board of Directors are expected to continue to
serve until their respective terms expire.
It is not anticipated that any of the nominees will be unable or
unwilling to serve, but if that should occur, it is the intention of the
proxyholders named in the Proxy either to vote for such other person or persons
for the office of Director as may be nominated by the Board of Directors or to
reduce the number of Directors to be elected at the meeting by the number of
such persons unable or unwilling to serve (subject to the requirement of
Wachovia's articles
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<PAGE>
of incorporation that the number of Directors in each of the three classes be
as equal in number as possible). Proxies cannot be voted for a greater number
of nominees than the number named in the Proxy Statement.
Wachovia has an Audit Committee presently consisting of the following
nonmanagement Directors: James W. Johnston, Chairman, James S. Balloun, John T.
Casteen III, Lawrence M. Gressette, Jr., Thomas K. Hearn, Jr. and George W.
Henderson III. During 1997, four meetings of the Audit Committee were held. The
Audit Committee is responsible for assuring that there exist viable internal
and independent auditing processes for Wachovia and its subsidiaries and
affiliated companies. The committee recommends to the Board of Directors the
appointment of the independent auditors. The committee maintains open lines of
communication with internal auditors, independent auditors and regulatory
examiners for the purpose of satisfying the committee that audit scopes and
programs are comprehensive and adequate to meet needs, that management takes
appropriate and timely action on recommendations made by internal auditors,
independent auditors and regulatory examiners, and that Wachovia personnel
cooperate fully with internal auditors, independent auditors and regulatory
examiners. In fulfilling its responsibilities, the committee reviews and
considers written and oral reports of examinations by the regulatory
authorities, management letters or other comments of independent auditors,
reports of the internal auditors, and other audit-related information it
considers appropriate. The Chairman of the Audit Committee regularly reports to
the Board of Directors on the committee's findings, any recommendations made by
the committee, and action taken by management on such recommendations.
Wachovia has a Management Resources and Compensation Committee presently
consisting of the following nonmanagement Directors: John L. Clendenin,
Chairman, Peter C. Browning, Robert M. Holder, Jr., George R. Lewis, Sherwood
H. Smith, Jr. and John C. Whitaker, Jr. The Management Resources and
Compensation Committee has the authority for establishing and administering
salary, incentive, benefit and stock plans, including setting the compensation
of senior officers, reviewing and recommending assignment and succession of top
executive management and at least annually reviewing the performance of the
Chief Executive Officer and reporting its findings to the nonmanagement members
of the Board. The Management Resources and Compensation Committee, or a
subcommittee thereof, also serves as the committee of outside directors
authorized to take those actions necessary to satisfy the qualified
performance-based compensation requirements for employer compensation
deductions set forth in Section 162(m) of the Internal Revenue Code of 1986, as
amended. Four meetings of the Management Resources and Compensation Committee
were held during 1997.
Wachovia has a Corporate Governance and Nominating Committee presently
consisting of the following nonmanagement Directors: Sherwood H. Smith, Jr.,
Chairman, Peter C. Browning, John L. Clendenin, Robert M. Holder, Jr., George
R. Lewis and John C. Whitaker, Jr. The Corporate Governance and Nominating
Committee has the authority for considering and recommending nominees for the
Board of Directors of the Company, assessing the performance of the Board,
evaluating issues of corporate governance, and recommending the processes and
practices through which the Board shall conduct its business. The Corporate
Governance and Nominating Committee will consider recommendations for Director
nominees made by shareholders of the Company. Such nominations must be made, in
accordance with the requirements of the Company's bylaws, in writing to the
Chief Executive Officer of Wachovia, not less than 14 days or more than 50 days
prior to any meeting of shareholders called for the election of Directors
(provided that if less than 21 days' notice of the meeting is given to
shareholders, such nomination must be mailed or delivered not later than the
close of business on the seventh day following the day on which the notice of
meeting was mailed), and must state the name, age, address, principal
occupation, background and qualifications of the person recommended, specify
the class of Directors to which such person is nominated, state the number of
shares that will be voted for the person recommended, and indicate the name and
residence address of, and number of shares held by, the shareholder making the
recommendation. Four meetings of the Corporate Governance and Nominating
Committee were held during 1997.
In addition, the Board of Directors has Compliance, Credit, Executive and
Finance Committees.
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<PAGE>
Nonemployee Directors of Wachovia are paid a cash retainer fee of $10,000
per calendar quarter for their services as members of the Board of Directors
and $1,000 per meeting for any special meetings beyond the four regularly
scheduled quarterly meetings of the Board and each committee. There are no
additional payments for attendance at regularly scheduled board or committee
meetings. Cash retainer and meeting fees may be deferred into the Wachovia
Corporation Deferred Stock Unit Plan (the "Deferred Stock Unit Plan") described
below. Nonemployee Directors of Wachovia also receive a quarterly grant under
the Deferred Stock Unit Plan equal to the number of shares of Wachovia Common
Stock which could be purchased for $4,500 on each quarterly award date.
Amounts deferred into the Deferred Stock Unit Plan, which is administered
by the Management Resources and Compensation Committee, are equal to such
number of shares of Common Stock as could be purchased for the amount of the
deferred cash retainer fee on the quarterly award date. Deferred Stock Unit
Plan account balances are fully vested at all times and are payable in cash
after a Director's retirement or termination or upon a change of control of the
Company. The amount of cash payment will equal the fair market value per share
of the Common Stock on the payment date times the number of deferred stock
units redeemed from the Director's account. Payment may be made in lump sum or
installments up to 10 years after retirement. Deferred stock unit balances
under the Deferred Stock Unit Plan also are credited each quarter with dividend
equivalent grants equal to dividends paid on Wachovia Common Stock.
Wachovia's Stock Plan provides for the award of 1,000 shares of
restricted stock to each nonemployee Director who is newly elected or appointed
to the Board of Directors of the Company and 250 shares of restricted stock at
each annual meeting to each nonemployee Director who has been a Director for at
least one year. The initial award of 1,000 shares is restricted for three years
and is deemed earned and ownership of the shares vests in the Director on the
third anniversary of the date of grant provided the Director is still in
service. The annual award of 250 shares is deemed earned and vests one year
after the date of grant provided the Director is still in service. In addition,
a Director award not otherwise forfeited will vest upon the death, disability
or retirement of the Director in accordance with the policies of the Company or
upon a change in control. Director awards not otherwise earned shall be
forfeited upon the termination of the Director from service on the Board of
Directors.
Directors who formerly served on the Board of Directors of Central
Fidelity hold Common Stock equivalents as a result of retainer and meeting fees
deferred under the Central Fidelity Compensation Plan for Non-Employee
Directors which are equivalent in value to shares of Wachovia Common Stock.
Such equivalents do not have voting rights and are to be settled in stock upon
termination of service as a Director of Wachovia.
A significant portion of Director compensation is paid in Wachovia Common
Stock or equivalents through the plans described above, which brings the
interests of Directors and shareholders into even closer alignment.
Wachovia has entered into an agreement with Mr. Medlin whereby he has
agreed to serve, if elected, as nonmanagement Chairman of the Board of
Directors and to provide certain other services to the Company from January 1,
1994 until April 24, 1998. Wachovia has agreed to pay Mr. Medlin $25,000 per
month for his services during the term of the agreement.
Set forth on the following pages for each nominee for election as
Director of Wachovia, and for each Director whose term will continue after the
Annual Meeting, is a brief statement including the age, year of first election
as a Director of Wachovia, principal occupation and business experience during
the past five years, and certain other directorships, all as of December 31,
1997, unless otherwise indicated. Upon the formation of a single charter
national bank in June 1997, each of the Directors of Wachovia Corporation also
was elected a Director of Wachovia Bank.
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<PAGE>
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION AS DIRECTORS
Term Expiring 2001 Annual Meeting
<S> <C>
JAMES S. BALLOUN, 59, is Chairman, President and Chief Executive Officer of National
Service Industries, Inc., which is engaged in multi-industry manufacturing and diversified
services, positions he has held since 1996. Prior thereto, he was a partner with McKinsey &
Company, Inc. a management consulting firm. Mr. Balloun also serves as a director of
Radiant Systems, Inc. He first was elected a Director of Wachovia by its Board of Directors
to fill a vacancy in October 1997.
Committees: Audit
Compliance
PETER C. BROWNING,56, is President and Chief Operating Officer of Sonoco Products
Company, a worldwide global packing company, positions he has held since 1995. Prior
thereto, he was an Executive Vice President of that company from 1993 to 1995 and
President, Chairman and Chief Executive Officer of National Gypsum Company from 1990
to 1993. Mr. Browning first was elected a Director of Wachovia by its Board to fill a vacancy
in July 1997.
Committees: Corporate Governance and Nominating
Management Resources and Compensation
HAYNE HIPP, 57, is President and Chief Executive Officer of The Liberty Corporation, an
insurance and broadcasting holding company. He also serves as a director of The Liberty
Corporation and SCANA Corporation. Mr. Hipp was a director of South Carolina National
Corporation from 1984 to 1991 and was named a Director of Wachovia by its Board of
Directors in connection with the acquisition of that company in 1991. He was elected for his
present term at the 1995 Annual Meeting of Shareholders.
Committees: Credit
Finance
LLOYD U. NOLAND, III, 54, is Chairman, President, Chief Executive Officer and a
Director of Noland Company, a supplier of industrial products. He was a director of Central
Fidelity from 1987 to 1997 and was named a Director of Wachovia in connection with its
acquisition of that company effective December 15, 1997.
Committees: Credit
Finance
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
NOMINEES FOR ELECTION AS DIRECTORS-Continued
Term Expiring 2001 Annual Meeting
SHERWOOD H. SMITH, JR., 63, is Chairman of the Board of Carolina Power & Light
Company, a public utility. He also served that company as Chief Executive
Officer until 1996 and President until 1992. He serves as a director of
Northern Telecom, Inc. and Springs Industries, Inc., and a Trustee of
Northwestern Mutual Life Insurance Company. Mr. Smith was a director of
Wachovia Bank from 1980 to 1990 and was designated a Director of Wachovia upon
its organization in 1985. He was elected for his present term at the 1995
Annual Meeting of Shareholders.
Committees: Corporate Governance and Nominating
Management Resources and Compensation Executive
</TABLE>
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION AS DIRECTORS
Term Expiring 2000 Annual Meeting
<S> <C>
JOHN T. CASTEEN III, 54, is President of the University of Virginia. He was a director of
Jefferson Bankshares, Inc. from 1990 to 1997 and was named a Director of Wachovia in
connection with its acquisition of that company effective October 31, 1997.
Committees: Audit
Compliance
GEORGE R. LEWIS, 56, is President and Chief Executive Officer of Philip Morris Capital
Corporation, which engages in various financing and investment activities, positions he has
held since 1997. Prior thereto, from 1984 to 1997, he was Vice President and Treasurer of
Philip Morris Companies, Inc., the parent company of Philip Morris Capital Corporation,
which engages in the manufacture and sale of various consumer products, from 1984 to 1997.
He serves as a director of Ceridian Corporation and Kemper National Insurance Company.
Mr. Lewis was a director of Central Fidelity from 1985 to 1997 and was named a Director of
Wachovia in connection with its acquisition of that company effective December 15, 1997.
Committees: Corporate Goverance and Nominating
Management Resources and Compensation
</TABLE>
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<TABLE>
<CAPTION>
NOMINEE FOR ELECTION AS DIRECTOR
Term Expiring 1999 Annual Meeting
<S> <C>
JAMES F. BETTS, 65, is an independent management consultant and former Chairman of
the Board and President of The Life Insurance Company of Virginia. He was a director of
Central Fidelity from 1973 to 1997 and was named a Director of Wachovia and Wachovia
Bank in connection with its acquisition of that company effective December 15, 1997.
Committees: Credit
Finance
</TABLE>
<TABLE>
<CAPTION>
DIRECTORS CONTINUING IN OFFICE
Term Expiring 1999 Annual Meeting
<S> <C>
LESLIE M. BAKER, JR., 55, is President and Chief Executive Officer of Wachovia (since
1994) and Wachovia Bank (from 1990 to 1993 and since June 1, 1997). He was President and
Chief Operating Officer of Wachovia from February 1, 1993, to December 31, 1993, and
prior thereto served as Executive Vice President. He has served as a director of Wachovia
Bank since 1990. He also serves as a director of Carolina Power & Light Company.
Mr. Baker first was elected a Director of Wachovia in 1993 and was elected for his present
term at the 1996 Annual Meeting of Shareholders.
Committee: Executive
LAWRENCE M. GRESSETTE, JR., 65, served as Chairman and Chief Executive Officer
of SCANA Corporation until March 1, 1997, when he was elected Chairman of the Executive
Committee. He also served as President of SCANA Corporation from 1985 until 1996.
SCANA Corporation is a holding company whose principal subsidiary is South Carolina
Electric & Gas Company, a public utility. He serves as a director of Powertel, Inc. and
SCANA Corporation. Mr. Gressette was a director of South Carolina National Corporation
from 1979 to 1991 and was named a Director of Wachovia by its Board of Directors in
connection with the acquisition of that company in 1991. He was elected for his present term
at the 1996 Annual Meeting of Shareholders.
Committees: Audit
Compliance
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</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
DIRECTORS CONTINUING IN OFFICE-Continued
Term Expiring 1999 Annual Meeting
THOMAS K. HEARN, JR., 60, is President of Wake Forest University. Dr. Hearn was a
director of Wachovia Bank from 1988 to 1990 and was first elected a Director of
Wachovia in 1990. He was elected for his present term at the 1996 Annual Meeting
of Shareholders.
Committees: Audit
Compliance
JOHN C. WHITAKER, JR., 60, is Chairman of the Board and Chief Executive Officer of
Inmar Industries, Inc., an information services and transaction processing company. He
was a director of Wachovia Bank from 1990 until 1996, and first was elected a Director
of Wachovia at the 1996 Annual Meeting of Shareholders.
Committees: Corporate Governance and Nominating
Management Resources and Compensation
Executive
</TABLE>
<TABLE>
<CAPTION>
DIRECTORS CONTINUING IN OFFICE
Term Expiring 2000 Annual Meeting
<S> <C>
JOHN L. CLENDENIN, 63, is a Chairman Emeritus of BellSouth Corporation, a telecom-
munications holding company. He served as Chairman of the Board of BellSouth until
December 31, 1997, and as President and Chief Executive Officer until his retirement as a
management employee at the end of 1996. He also serves as a director of Coca-Cola
Enterprises, Inc., Equifax Inc., National Service Industries, Inc., RJR Nabisco Holdings
Corp., RJR Nabisco, Inc., The Kroger Company, Springs Industries, Inc. and The Home
Depot, Inc. Mr. Clendenin was a director of First Atlanta Corporation (later merged into
Wachovia) from 1981 to 1988, and was designated a Director of Wachovia upon its
organization in 1985. He was elected for his present term at the 1997 Annual Meeting of
Shareholders.
Committees: Corporate Governance and Nominating
Management Resources and Compensation
Executive
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</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
DIRECTORS CONTINUING IN OFFICE-Continued
Term Expiring 2000 Annual Meeting
GEORGE W. HENDERSON III, 49, is Chairman, Chief Executive Officer and a Director of
Burlington Industries, Inc., which manufactures textiles and home furnishings. He
was elected Chairman of that company in February 1998 and Chief Executive Officer
in 1995. He also served as President from 1993 to 1998, Chief Operating Officer
from 1993 to 1995, and prior thereto as a Group Vice President. Mr. Henderson also
serves as a director of Jefferson Pilot Corporation. He was a director of Wachovia
Bank from 1995 to 1997, and first was elected a Director of Wachovia at the 1997
Annual Meeting of Shareholders.
Committees: Audit
Compliance
ROBERT A. INGRAM, 55, is Chairman, Chief Executive Officer and President of Glaxo
Wellcome Inc., a pharmaceutical research and development company. He was elected
Chairman in October 1997 and Chief Executive Officer in 1994, and he served as
President and Chief Operating Officer of Glaxo, Inc. from 1993 to 1994. Also, in
1997, Mr. Ingram was elected as Chief Executive of Glaxo Wellcome plc, the parent
company of Glaxo Wellcome Inc., and Chairman of Nippon Glaxo in Japan. He served as
an Executive Director of Glaxo Wellcome plc from September 1996 until October 1997.
Mr. Ingram was elected a Director of Wachovia at the 1997 Annual Meeting of
Shareholders.
Committees: Credit
Finance
JOHN G. MEDLIN, JR., 64, is Chairman of the Board of Wachovia and Wachovia Bank. He
also served as Chief Executive Officer of Wachovia until his retirement on December
31, 1993, and as President until February 1, 1993. Mr. Medlin is a director of
BellSouth Corporation, Burlington Industries, Inc., Media General, Inc., Nabisco
Holdings Corp., National Service Industries, Inc., RJR Nabisco Holdings Corp., RJR
Nabisco, Inc. and USAirways Group, Inc. He was elected a director and Chairman of
Wachovia Bank on June 1, 1997 after previously serving as a director of Wachovia
Bank from 1974 to 1994 and Chairman from 1985 to 1994. Mr. Medlin was designated a
Director of Wachovia upon its organization in 1985 and was elected for his present
term at the 1997 Annual Meeting of Shareholders.
Committees: Credit
Executive
Finance
</TABLE>
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STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the beneficial ownership of Common Stock
by each Director, nominee for Director and executive officer named in the
Summary Compensation Table, and by all Directors, nominees and executive
officers as a group, as of December 31, 1997.
<TABLE>
<CAPTION>
Percent
of
Name Number of Shares(a)(b) Class
- ----------------------------------- ------------------------------------------ --------
<S> <C> <C>
Leslie M. Baker, Jr. 166,891(c)(d) .0811
James S. Balloun 1,000(e) .0005
James F. Betts 24,367(f) .0118
Peter C. Browning 200(e) *
John T. Casteen III 1,590(e) .0008
John L. Clendenin 6,762(e) .0033
Hugh M. Durden 98,933(c)(d)(g) .0481
Lawrence M. Gressette, Jr. 10,360(e)(g) .0050
Thomas K. Hearn, Jr. 4,160(e) .0020
George W. Henderson, III 3,529(e)(g) .0017
Hayne Hipp 6,950(e) .0034
Robert M. Holder, Jr. (h) 19,759(e) .0096
Robert A. Ingram 200(e) *
James W. Johnston (h) 5,673(e) .0028
Walter E. Leonard, Jr. 82,375(c)(d) .0400
George R. Lewis 3,264(f) .0016
Robert S. McCoy, Jr. 65,750(c)(d)(g) .0320
John G. Medlin, Jr. 210,264(g) .1022
Lloyd U. Noland, III 89,098(f) .0433
G. Joseph Prendergast 89,999(c)(d) .0438
Wyndham Robertson (h) 1,569(e) .0008
Herman J. Russell (h) 21,620(e) .0105
Sherwood H. Smith, Jr. 10,477(e) .0051
John C. Whitaker, Jr. 3,618(e) .0018
All Directors, Nominees and
Executive Officers
as a Group (29 persons) 1,215,265(c)(d)(e)(f)(g) .5908
</TABLE>
* Less than one ten-thousandth.
(a) Except as otherwise noted, all such persons have sole voting and
investment power with respect to their shares.
(b) Not included are restricted shares reserved for nonemployee Directors
under Wachovia's Stock Plan, the ownership of which will vest one
year from the date of grant of annual awards and three years from the
date of grant of initial awards or upon death, disability or
retirement from the Board of Directors, as follows: annual awards of
250 shares for each nonemployee Director who was a member of the
Board on April 25, 1997, and initial awards of 1,000 shares for Miss
Robertson and Messrs. Balloun, Betts, Browning, Casteen, Henderson,
Ingram, Lewis, Noland and Whitaker. Also not included are restricted
shares reserved for executive officers under the Stock Plan, the
ownership of which will vest five years after the date of grant and
upon the attainment of certain performance goals or upon such
officer's retirement from the Company (or will vest in part upon such
officer's termination of employment due to death or disability), as
follows: Mr. Baker, 106,324 shares; Mr. Durden, 19,000 shares;
-10-
<PAGE>
Mr. Leonard, 54,000 shares; Mr. McCoy, 51,500 shares; Mr. Prendergast,
56,000 shares; and other executive officers, 70,000 shares.
(c) Included are shares held by the Trustee under Wachovia's Retirement
Savings and Profit-Sharing Plan as follows: Mr. Baker, 154 shares;
Mr. Durden, 133 shares; Mr. Leonard, 3,567 shares; Mr. McCoy, 9,931
shares; Mr. Prendergast, 154 shares; and all other executive officers
participating in the Plan, 5,244 shares.
(d) Included are shares subject to stock options granted to Messrs. Baker
(79,173 shares), Durden (29,200 shares), Leonard (44,640 shares),
McCoy (32,200 shares), Prendergast (36,000 shares) and other
executive officers (150,267 shares) under Wachovia's stock option
plans and exercisable at December 31, 1997 or within 60 days
thereafter.
(e) Not included are stock units held under the Deferred Stock Unit Plan,
described on page for the accounts of nonemployee Directors on
February 1, 1998, as listed below. Such units are equivalent in value
to shares of Wachovia Common Stock, do not have voting rights and are
payable only in cash after a Director leaves the Board or upon a
change in control of the Company.
(f) Not included are Common Stock equivalents held under the Central
Fidelity Compensation Plan for Non-Employee Directors (described on
page ) which are equivalent in value to shares of Wachovia Common
Stock, do not have voting rights, and are to be settled in stock upon
termination of service as a Director of Wachovia. As of December 31,
1997, Common Stock equivalents were held for the accounts of the
former directors of Central Fidelity who are Directors of Wachovia as
follows: Mr. Betts, 1,153.9412 equivalents; Mr. Lewis, 1,791.8633
equivalents; and Mr. Noland, 2,834.6439 equivalents.
(g) Included are shares owned by family members of the following directors
and executive officers who disclaim beneficial ownership of such
shares: Mr. Durden, 4,022 shares; Mr. Gressette, 108 shares; Mr.
Henderson, 1,668 shares; Mr. McCoy, 973 shares; and Mr. Medlin, 5,540
shares.
(h) Directors retiring as of April 24, 1998.
Following are the accumulated balances of stock units in the Deferred
Stock Unit Plan accounts of nonemployee Directors as of February 1, 1998:
<TABLE>
<S> <C>
James S. Balloun ................... 191.70
Peter C. Browning .................. 131.12
John T. Casteen III ................ 59.49
John L. Clendenin .................. 3,470.66
Lawrence M. Gressette, Jr. ......... 1,531.62
Thomas K. Hearn, Jr. ............... 1,950.85
George W. Henderson III ............ 754.94
Hayne Hipp ......................... 1,129.77
Robert M. Holder, Jr. .............. 21,698.79
Robert A. Ingram ................... 757.64
James W. Johnston .................. 1,068.88
Wyndham Robertson .................. 3,100.51
Herman J. Russell .................. 4,172,11
Sherwood H. Smith, Jr. ............. 9,191.54
John C. Whitaker, Jr. .............. 2,129.96
</TABLE>
-11-
<PAGE>
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED
TO BE ISSUED
The Board of Directors of Wachovia has unanimously recommended that the
Company's shareholders approve a proposal to adopt an amendment to the Articles
of Incorporation of the Company to increase the number of authorized shares of
Common Stock of the Company from 500 million shares to 1 billion shares.
Article IV of the Articles of Incorporation currently authorizes the Company to
issue 500 million shares of Common Stock. Article IV also authorizes the
Company to issue 50 million shares of Preferred Stock, $5.00 par value per
share (the "Preferred Stock"), of which no shares have been issued. As of the
close of business on February 27, 1998, 205,703,285 shares of Common Stock were
issued and outstanding and an additional 27,625,300 shares of Common Stock were
reserved for issuance in connection with employee benefit plans, leaving
266,671,415 unreserved shares of Common Stock available for future issuance.
The proposed amendment would not affect the provisions of Article IV relating
to the Preferred Stock.
The Company believes that it is advisable to have additional authorized
shares of Common Stock available for general corporate purposes, including
possible acquisitions, stock splits and stock dividends. Although there
currently are no plans, agreements, commitments or understandings for the
issuance of the additional shares of Common Stock that would be authorized upon
adoption of the proposed amendment, the Company believes the availability of
such shares will allow the Company to act promptly in the event opportunities
requiring the issuance of additional shares arise. Further, since no additional
action or authorization by the shareholders of the Company will be necessary
prior to the issuance of such shares (unless otherwise required by law or
applicable rules and regulations of the New York Stock Exchange), such shares
may be issued as and when needed without the delay and expense of obtaining
shareholder approval. The Board of Directors recommends that shareholders vote
FOR approval of the proposed amendment.
An increase in the authorized number of shares of Common Stock may have
the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire, control of the Company.
For example, the issuance of a substantial number of shares of Common Stock to
persons who have an understanding with the Company with regard to the voting of
such shares, or the distribution or dividend of shares of Common Stock (or the
right to receive Common Stock) to shareholders of the Company, may have the
effect of preventing or discouraging unsolicited attempts to acquire control of
the Company. In addition, the issuance of additional shares of Common Stock
will reduce the percentage ownership of shareholders of the Company and could
have the effect of diluting earnings per share and book value of existing
shares of Common Stock.
PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT AUDITORS
Ernst & Young LLP has been appointed independent auditors to make the
annual audit of the consolidated financial statements of Wachovia and its
subsidiaries for 1998, upon ratification of that appointment by the
shareholders. Ernst & Young LLP has acted as the independent auditors for
Wachovia and its predecessors since 1969. Wachovia has been advised by Ernst &
Young LLP that to the best of its knowledge no member of the firm has any
direct or material indirect financial interest in Wachovia or any of its
subsidiaries, nor has any such member had any connection during the past three
years with Wachovia or any of its subsidiaries in the capacity of promoter,
underwriter, voting trustee, director, officer or employee. Representatives of
Ernst & Young LLP will be present at the Annual Meeting and will have an
opportunity to make a statement if they desire to do so. Such representatives
will be available to respond to appropriate questions. The Board of Directors
recommends that shareholders vote FOR this proposal.
-12-
<PAGE>
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The senior management compensation program is administered by the
Management Resources and Compensation Committee (the "Committee"). The
Committee consists entirely of nonemployee directors who are not eligible to
participate in any of the management compensation programs. The Committee is
responsible for the establishment, approval and oversight of all senior
management compensation and benefit policies, plans, programs and agreements.
The Committee meets at least quarterly to evaluate, review and act on senior
management compensation and benefit matters.
Wachovia's senior management compensation program consists of base
salary, annual incentive and stock-based awards based on the performance of the
Company and the responsibility, experience, skills and performance of
participating individuals. These plans utilize competitive peer group
information, salary grade ranges, maximum incentive pay levels, and stock award
guidelines which are established and administered to reinforce the alignment of
the interests of senior management employees with the performance of the
Company and the interests of its shareholders. The peer institutions used for
comparison are fifteen of the highest performing regional banking companies in
the country, all of which are included in the KBW Index used in the Performance
Graph on page .
The compensation program, including the Senior Management Incentive Plan
and the Stock Plan, are designed to enable the Company to receive full
deductions for income tax purposes for qualifying executive compensation which
may be earned by certain executive officers in excess of $1 million.
The Committee engages an independent executive compensation and benefit
consultant to assist the Committee in its establishment, assessment and
evaluation of the appropriateness of the senior management compensation
program. The Committee has determined that Wachovia's senior management
compensation programs, plans and awards are well within conventional standards
of reasonableness and competitive necessity and are clearly justified by
sustained performance which exceeds industry norms.
A description of each of the major elements of the senior management
compensation program and its specific relationship to corporate performance,
and a summary of the decisions and actions taken by the Committee with regard
to 1997 senior management compensation and the Chief Executive Officer's
compensation, are set forth below.
Base Salary
Members of senior management receive base salaries determined by the
responsibilities, skills and experience related to their respective positions.
Other factors considered in salary determination are individual performance,
the success of each business unit in the individual's area of responsibility in
achieving established profit and business plans, Wachovia's median salary
ranges and Wachovia's ability to pay an appropriate and competitive salary.
Members of senior management are eligible for periodic increases in their base
salary as a result of individual performance or significant increases in their
duties and responsibilities. The amount and timing of an increase depends upon
the individual's performance, position of salary within the salary range, the
time interval and any added responsibilities since the last merit increase. The
salary increases during 1997 for certain executives, including the named
executives, were based on an evaluation by the Committee of the above described
factors.
Senior Management Incentive Plan
Certain members of senior management participate in the Senior Management
Incentive Plan. Personal award opportunities pursuant to the Plan are based
upon the performance criteria applicable to the Company, the individual
performance of each participant and related business unit performances.
-13-
<PAGE>
The Committee establishes annual corporate performance benchmarks and
potential awards as a percentage of base salary determined upon review of
Wachovia's historical performance and annual business plan, and taking into
account the historical performance of peer institutions. The annual corporate
performance benchmarks are established in terms of: (1) net income per fully
diluted share (50% weight), (2) return on assets (25% weight) and (3) return on
equity (25% weight). The composite corporate performance evaluation factor is
determined by actual financial results for the year in relation to these three
established goals.
The performance of each individual and the business unit for which he or
she is responsible is determined by evaluating each individual's
accomplishments compared with established annual business goals and key
strategic objectives. Based on Committee policies, an individual assessment is
made of the employee's contribution to the achievement of overall Company
performance, goals and objectives. The resulting individual performance
evaluation factor may reduce, but not increase, the employee's award based upon
the composite corporate evaluation factor.
In January 1998, the Committee reviewed and approved the 1997 Senior
Management Incentive Plan award payments to the Chief Executive Officer and
other senior management employees, including the named executives. The payments
were based on individual and business unit performances as compared with goals
established for 1997 and on the Company achieving net income per fully diluted
share of $4.12 (50% weight), and a return of 1.44% on assets (25% weight) and
18.60% on equity (25% weight). The Committee excluded special non-recurring
items primarily related to the merger transactions with Jefferson, Central
Fidelity and 1st United and technology impairment charges during 1997 from the
calculation of the net income goal.
Wachovia Corporation Stock Plan
The purpose of the Stock Plan is to encourage and enable members of
senior management increase their stock interests in the Company, thereby
further enhancing the identification of their interests with the interests of
other shareholders. Members of senior management are eligible to receive an
annual benefit under the Plan in the form of incentive stock options,
nonqualified stock options, stock appreciation rights, restricted stock and/or
restricted units or other stock-related awards. Stock options, restricted stock
and stock appreciation rights ("SARs") have been granted under the Plan. The
stock options and SARs usually are earned over a five-year period. Vesting of
grants of restricted stock is subject to attaining certain specified
performance goals and completion of the restriction period (generally five
years). The number of shares and kinds of awards granted an individual are
based upon level of responsibility, individual performance, the Company's
performance, the value of the options and awards in relation to the
individual's base salary, and the amounts and kinds of prior awards.
The Stock Plan is administered in a manner that encourages and enables
members of senior management to increase their stock interests in the Company
over time and to retain for long-term investment the shares or interests
obtained through the Plan.
In early 1997, the Committee awarded stock options, restricted stock and
SARs to the Chief Executive Officer and other members of senior management,
including the named executives. The Committee took into account the
responsibility level and performance of each individual and the other factors
described above.
As of February 1, 1998, approximately 2,917,531 shares of Common Stock
were available for grant under the Wachovia Corporation Stock Plan.
-14-
<PAGE>
1997 Compensation for the Chief Executive Officer
The Chief Executive Officer's compensation is determined pursuant to the
same basic factors as described above for other members of senior management.
In establishing the base salary, incentive and stock awards of the Chief
Executive Officer for 1997, the Committee considered Wachovia's overall
performance, record of increase in shareholder value, success in meeting
strategic objectives and the incumbent's personal leadership and
accomplishments. These factors were considered in conjunction with the
Company's financial results for 1997 in relation to the established business
plan and in comparison with the performance of peer organizations. Mr. Baker's
1997 management incentive plan award was based on the above considerations and
the Company's achieving certain annual performance goals (net income per fully
diluted share, return on assets and return on equity) as described above in
this Report under the heading "Senior Management Incentive Plan."
MANAGEMENT RESOURCES AND COMPENSATION COMMITTEE
John L. Clendenin, Chairman
Peter C. Browning
Robert M. Holder, Jr.
George R. Lewis
Sherwood H. Smith, Jr.
John C. Whitaker, Jr.
-15-
<PAGE>
FIVE-YEAR STOCK PERFORMANCE COMPARISON GRAPH
The graph below presents five-year cumulative total return comparisons
through December 31, 1997, in stock price appreciation and dividends for
Wachovia Common Stock, the Standard & Poor's 500 Stock Index and the Keefe,
Bruyette & Woods 50 Total Return Index (the "KBW 50"). Returns assume an
initial investment of $100 on the last trading day before the beginning of 1993
and quarterly reinvestment of dividends. The KBW 50 is a published industry
index providing a market capitalization weighted measure of the total return of
50 money center and major regional U.S. banking companies.
[GRAPHIC OMITTED]
Values as of each year-end of a $100 initial investment, assuming
reinvestment of dividends, are shown in the graph and table above.
-16-
<PAGE>
COMPENSATION
The following table sets forth, for the years ended December 31, 1997,
1996 and 1995, information regarding compensation paid to the Company's
President and Chief Executive Officer and the four other most highly
compensated executive officers of the Company (the "named executives").
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
-------------------------------------------------
Other
Annual
Name and Principal Position Year Salary ($) Bonus ($)(1) Compensation ($)(2)
- --------------------------------- ------ ------------ -------------- ---------------------
<S> <C> <C> <C> <C>
Leslie M. Baker, Jr. 1997 710,000 432,700 41,482
President and Chief 1996 650,000 380,300 29,190
Executive Officer 1995 595,833 387,300 28,622
G. Joseph Prendergast 1997 470,000 242,300 25,378
Senior Executive Vice President 1996 442,500 219,000 18,753
1995 405,000 222,800 14,206
Walter E. Leonard, Jr. 1997 470,000 242,300 21,993
Senior Executive Vice President 1996 441,667 218,600 18,465
1995 400,000 220,000 22,645
Robert S. McCoy, Jr. 1997 441,667 227,700 27,663
Senior Executive Vice President 1996 391,667 193,900 25,723
and Chief Financial Officer 1995 347,083 190,900 26,653
Hugh M. Durden 1997 290,000 135,900 26,916
Executive Vice President 1996 275,417 123,900 17,827
1995 262,916 131,500 14,241
<CAPTION>
Long-Term Compensation Awards
---------------------------------
Restricted Securities
Stock Underlying All Other
Name and Principal Position Awards ($)(3) Options/SARs(#) Compensation ($)(4)
- --------------------------------- --------------- ----------------- --------------------
<S> <C> <C> <C>
Leslie M. Baker, Jr. 999,986 75,000/50,000 42,600
President and Chief 999,994 75,000/75,000 39,000
Executive Officer 846,875 30,000/0 35,750
G. Joseph Prendergast 858,750 30,000/0 28,200
Senior Executive Vice President 875,000 25,000/0 26,550
338,750 15,000/0 24,300
Walter E. Leonard, Jr. 858,750 30,000/0 28,200
Senior Executive Vice President 875,000 20,000/0 26,500
338,750 15,000/0 24,000
Robert S. McCoy, Jr. 858,750 30,000/0 26,500
Senior Executive Vice President 875,000 20,000/0 23,500
and Chief Financial Officer 254,063 12,000/0 20,825
Hugh M. Durden 458,000 18,000/0 17,400
Executive Vice President 525,000 15,000/0 16,525
135,500 8,000/0 15,775
</TABLE>
(1) Performance-based incentive awards were paid pursuant to the Wachovia
Senior Management Incentive Plan.
(2) All amounts disclosed are attributable to supplemental life and disability
insurance, tax return preparation and financial planning services,
company-sponsored social clubs, company-provided automobiles, and
automobile and cost-of-living allowances, and are below the amounts
required to be disclosed under the rules of the Securities and Exchange
Commission.
(3) All outstanding restricted stock awards have a five-year restriction
period. Aggregate outstanding restricted stock awards and their value at
December 31, 1997 were: for Mr. Baker, 100,324 shares valued at
$8,138,784.50; for Mr. Prendergast, 56,000 shares valued at $4,543,000;
for Mr. Leonard, 54,000 shares valued at $4,380,750; for Mr. McCoy, 51,500
shares valued at $4,177,937.50; and for Mr. Durden, 27,000 shares valued
at $2,190,375. No dividends are paid on restricted stock awards.
(4) The amounts shown reflect company matching contributions with respect to an
individual's participation in Wachovia's Retirement Savings and
Profit-Sharing Plan and the associated equalization plan.
-17-
<PAGE>
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table sets forth information with respect to the named
executives concerning the grant of employee stock options and stock
appreciation rights during 1997.
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term (3)
----------------------------------------------------------------- ------------------------------
Percent of
Number of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted (#)(1) Fiscal Year ($/Share) (2) Date 5% ($) 10% ($)
- ------------------------ ---------------- -------------- --------------- ----------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Leslie M. Baker, Jr. 75,000/50,000 6.77% $ 57.25 1/24/07 $4,500,527 $11,405,219
G. Joseph Prendergast 30,000/0 1.63% $ 57.25 1/24/07 $1,080,127 $ 2,737,253
Walter E. Leonard, Jr. 30,000/0 1.63% $ 57.25 1/24/07 $1,080,127 $ 2,737,253
Robert S. McCoy, Jr. 30,000/0 1.63% $ 57.25 1/24/07 $1,080,127 $ 2,737,253
Hugh M. Durden 18,000/0 0.98% $ 57.25 1/24/07 $ 648,076 $ 1,642,352
</TABLE>
(1) All stock options and SARs become exercisable over a five-year period in
20% annual increments.
(2) The exercise price equals the market price of Wachovia Common Stock on the
date of the grant.
(3) As required by the Securities and Exchange Commission, potential net gain
from the exercise of stock options and SARs is based on the assumed annual
rates of stock price appreciation of 5% and 10%, over the term of each
option and SAR. Any actual net gains are dependent on the future
performance of the Company's Common Stock and general market conditions.
There is no assurance that the assumed rates of stock price appreciation
utilized in these calculations will be achieved. In order for these
options and SARs to have value for the executive, the stock price must
increase above the exercise price. Increases in the stock price will
benefit all shareholders commensurately.
-18-
<PAGE>
The following table sets forth information with respect to the named
executives concerning the exercise of options during 1997 and unexercised
options and SARs held at year-end.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Acquired on Exercise Options/SARs at Options/SARs at
----------------------------- Year-End (#) Fiscal Year-End (2)
Year Number
of of Option Value Exercisable/ Exercisable/
Name Grant Shares Price Realized (1) Unexercisable Unexercisable
- ------------------------ ------- -------- ------------ --------------- ------------------------ --------------------------------
<S> <C> <C> <C> <C> <C> <C>
Leslie M. Baker, Jr. 1993 2,800 $ 33.125 $ 61,950.00 56,373/275,800 $ 2,339,094.50/$8,849,275.00
1994 209 $ 34.625 $ 4,310.62
G. Joseph Prendergast 1993 7,000 $ 33.125 $ 337,750.00 18,000/65,000 $ 797,375.00/$2,171,000.00
Walter E. Leonard, Jr. 1987 4,800 $ 15.4165 $ 200,800.80 20,000/60,000 $ 904,000.00/$1,973,500.00
Robert S. McCoy, Jr. -- -- -- -- 17,300/57,200 $ 770,550.00/$1,841,950.00
Hugh M. Durden -- -- -- -- 18,620/38,680 $ 867,860.00/$1,286,790.00
</TABLE>
(1) Value calculated by subtracting the exercise price from the market value on
the date of exercise, rounded to whole dollars.
(2) Based on market price of $81.125 (market price of the Common Stock on
December 31, 1997), less the exercise price and rounded to whole dollars.
OTHER EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
Pension Plan
Wachovia has a defined benefit pension plan entitled the Retirement
Income Plan of Wachovia Corporation. Employees of Wachovia and its subsidiaries
who have completed one year of service, as defined in the plan, are eligible to
participate in the plan. Upon retirement at age 65, a participant receives
(subject to certain limitations) an annual benefit which equals 1.2% of the
average of the highest five consecutive years of base compensation paid during
the ten consecutive years preceding termination or retirement ("final average
compensation"), multiplied by years of service after December 31, 1989. (For
certain highly compensated employees, including the named executives, this
formula applies to service in 1989.)
-19-
<PAGE>
Pension Plan Table
The table below sets forth estimated annual benefits which would become
payable upon retirement at age 65 under the plan to persons in certain
specified salary and years-of-service classifications who are hired on or after
January 1, 1990.
<TABLE>
<CAPTION>
Estimated Annual Retirement Benefits
Average Base Salary During for Years of
Highest Five Consecutive Credited Service (1)(2)
Years in the Last Ten Years ---------------------------------------------------------------------------
Before Retirement 10 15 20 25 30 35
- ---------------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 50,000 $ 4,986 $ 7,479 $ 9,972 $ 12,465 $ 14,958 $ 17,451
100,000 9,972 14,958 19,944 24,930 29,916 34,902
500,000 49,860 74,790 99,720 124,650 149,580 174,510
1,000,000 99,720 149,580 199,440 249,300 299,160 349,020
1,200,000 119,664 179,496 239,328 299,160 358,992 418,824
</TABLE>
(1) Pursuant to the terms of the plan, annual retirement income benefits are
not reduced or offset by Social Security benefits. Estimated annual
retirement benefits shown above are based on a joint and 100% survivor
form of retirement income. The precise amount of the benefit depends upon
the age of a participant and the age of his or her surviving spouse.
(2) Some of the amounts shown exceed the limits imposed by federal law for
qualified pension plans and are payable only to participants in the other
retirement arrangements described below.
Persons hired before January 1, 1990, including the named executives will
receive an annual benefit which is generally greater than the amounts shown in
the table above. The benefit computation of such a person will depend upon the
final average compensation and number of years of service before January 1,
1990, and the benefit formula in effect during such years. For employees of
South Carolina National Corporation ("SCNC"), formerly a subsidiary of the
Company, and its subsidiaries prior to January 1, 1992, the benefits described
above will only apply to service after December 31, 1991.
For persons employed by Wachovia and its subsidiaries before January 1,
1990 and after December 31, 1986, a participant will receive an annual benefit
equal to 1.4% of final average compensation as of December 31, 1989, plus .6%
of final average compensation as of December 31, 1989, in excess of 50% of the
1989 Social Security taxable wage base, multiplied by years of service from
January 1, 1987 through December 31, 1989 (or December 31, 1988 in the case of
certain highly compensated employees). In addition, the plan provides a
one-time special supplemental benefit to employees who were employed by
Wachovia and its subsidiaries and were participants in the plan on December 31,
1989, such employees who retired, became disabled or were terminated without
fault and with vested benefits during 1989, and the beneficiaries of such
employees who died during 1989. The special supplemental benefit is added to
each such person's accrued benefit under the plan in the amount of .5% of
annualized rate of eligible salary on September 1, 1989 (or, if greater, .5% of
final average compensation as of December 31, 1989) multiplied by full years of
service beginning on the January 1 following the employee's date of hire and
ending on December 31, 1989. The special supplemental benefit may be paid in a
lump sum upon retirement, at the employee's option.
For persons employed by The Wachovia Corporation, formerly a subsidiary
of Wachovia, and its subsidiaries before January 1, 1987, a participant
receives an annual benefit equal to 2.5% of final average compensation as of
December 31, 1989, multiplied by years of service (not in excess of 30 years)
before January 1, 1987, reduced by 50% (prorated for less than 30 years) of the
Social Security benefit at his Social Security retirement age under the law in
effect in 1989. In no event may this benefit exceed 65% of the participant's
final average compensation as of December 31, 1989.
-20-
<PAGE>
For persons employed by First Atlanta Corporation, formerly a subsidiary
of the Company, and its subsidiaries before January 1, 1987, a participant
receives an annual benefit calculated as a ten-year certain and life annuity
equal to 1.8% of final average compensation as of December 31, 1989, multiplied
by years of service (not in excess of 35 years) before January 1, 1987, reduced
by 50% (prorated for less than 35 years) of the Social Security benefit at his
Social Security retirement age under the law in effect in 1989.
For persons employed by SCNC and its subsidiaries before January 1, 1992,
a participant receives an annual benefit equal to 50% of final average
compensation (as determined below) less 50% of the Social Security primary
insurance benefit, proportionately reduced for less than 30 years of service
prior to 1992. The final average compensation of such an employee is equal to
the average of the employee's total cash compensation for the 60 consecutive
months within the final 120 months prior to January 1, 1992, which will produce
the highest average. The accrued benefit of such a participant as determined on
December 31, 1991, is multiplied by a fraction, the numerator of which is final
average compensation at retirement or other termination of service (as
otherwise determined under the plan) and the denominator of which is final
average compensation as so determined on December 31, 1991.
Except as otherwise provided, the benefit amounts described above are
computed on the basis of a straight life annuity, but other payment options are
available which could provide a survivor benefit following the death of the
participant. Retirement prior to age 65 is permitted upon certain circumstances
under the plan. Either of these alternatives could result in an adjustment of
the amount of the benefit received by the participant.
Federal law places certain limitations on the amount of benefits payable
by qualified pension plans. The annual benefit paid to a participant at Social
Security retirement age cannot exceed $125,000 for 1997 and $130,000 for 1998
(adjusted in increments of $5,000 for inflation). In addition, the annual
amount of covered compensation under the plan is limited to $160,000 for 1997
and 1998 (adjusted in increments of $10,000 for inflation). The 1997 base
salary for each of the named executive officers is set forth in the Summary
Compensation Table. For such individuals, full years of credited service are as
follows: Mr. Baker, 27 years; Mr. Durden, 24 years; Mr. Leonard, 27 years; Mr.
McCoy, 13 years; and Mr. Prendergast, 23 years.
Retirement Savings and Profit-Sharing Plan
Wachovia has a voluntary defined contribution plan entitled the
Retirement Savings and Profit-Sharing Plan of Wachovia Corporation. All
employees who have completed one year of service are eligible to participate in
the plan. Wachovia contributes a minimum of $.50 for each $1.00 of up to the
first six percent of base pay contributed by a participant and may make an
additional contribution of up to $.50 for each $1.00 of up to the first six
percent of base pay contributed by a participant each year if the Company meets
certain earnings performance criteria. The criteria for determining any such
additional matching contributions are established by the Management Resources
and Compensation Committee (the "Committee") at the beginning of each year. The
Committee also may approve a special discretionary contribution to the plan of
up to 4% of each eligible employee's base salary paid during the year if the
Committee determines that the Company's performance during the year was truly
outstanding.
Federal law limits the maximum annual compensation from which an employee
may elect to make contributions under qualified plans such as the plan to
$160,000 for 1997 and 1998 (adjusted in increments of $10,000 for inflation).
Participants may elect to make all or part of their contributions under these
plans on a before-tax basis provided such before-tax contributions do not
exceed $9,500 in 1997 and $10,000 in 1998 (adjusted in increments of $500 for
inflation). Employee contributions are subject to certain regulatory
restrictions which may limit further the maximum contribution of certain more
highly compensated participants (including the executives officers named in the
Proxy Statement). Wachovia maintains a nonqualified equalization plan designed
to protect selected key employees (including the named executives) of the
Company or its subsidiaries from loss of benefits under the plan resulting from
the application of limitations on contributions to qualified plans contained in
the Internal Revenue
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<PAGE>
Code. If contributions under the plan are not allocated to any of the selected
key employees due to those limitations on contributions, Wachovia will credit
to a nonqualified account under the equalization plan for the employee the
amount of such contribution not so allocated. Amounts credited to each
participant's nonqualified account are credited monthly with an interest
equivalent which is based upon the Long-Term Applicable Federal Rate. These
amounts will be paid to the participants in the equalization plan upon
termination of employment. No amounts may be withdrawn from the equalization
plan while the participant is employed by Wachovia or any of its subsidiaries.
The amounts contributed by Wachovia to the equalization plan are included in
the column "All Other Compensation" in the Summary Compensation Table.
Other Retirement Arrangements
To assist in executive management succession planning, Wachovia has
entered into nonqualified, unfunded executive retirement agreements with
certain senior officers of the Company, including all of the named executives,
three other executive officers and five other senior officers. Under the
agreements, the officer will retire at age 60 or, with the permission of the
Committee, at age 55 on a reduced benefit basis provided the executive has
completed ten years of service. The officer will receive an annual benefit
equal to 2.5% of final average compensation multiplied by years of service, up
to a maximum of 62.5% of final average compensation, less the sum of the
amounts payable from the Retirement Income Plan and any other pension plan in
which the officer may participate. For this purpose, final average compensation
is the average of the officer's total cash compensation for the three full
calendar years within the final five full calendar years of employment which
will produce the highest average. Base salary and amounts received by the
officer pursuant to the Senior Management Incentive Plan are included in
determining final average compensation. The benefit amount is computed in the
form of a straight life annuity and is payable in monthly increments or, upon
request by the individual and approval by the Committee, may be payable in a
lump sum actuarial equivalent amount.
The following table sets forth estimated total annual benefits which
would become payable under the formula in the executive retirement agreement
(which amounts will be reduced by the benefits paid under the Retirement Income
Plan) to the officers based upon final average compensation and years of
credited service.
<TABLE>
<CAPTION>
Estimated Annual Retirement Benefits
for Years of Credited Service
Average Compensation During Highest -------------------------------------------------
Three Years in the Last Five Years
Before Retirement 10 15 20 25
- ------------------------------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
$ 100,000 $ 25,000 $ 37,500 $ 50,000 $ 62,500
300,000 75,000 112,500 150,000 187,500
500,000 125,000 187,500 250,000 312,500
700,000 175,000 262,500 350,000 437,500
900,000 225,000 337,500 450,000 562,500
1,000,000 250,000 375,000 500,000 625,000
1,100,000 275,000 412,500 550,000 687,500
1,200,000 300,000 450,000 600,000 750,000
</TABLE>
Mr. McCoy's executive retirement agreement is slightly different than
those of the other executives in that his formula grades up by 1% per year of
service from a percentage of 55% should he retire with 10 years of service up
to a maximum of 60% at 15 years of service. All other features of his executive
retirement agreement are identical to those of the other participants.
In addition to the executive retirement agreement and also to assist in
senior management succession planning, Wachovia has entered into supplemental
retirement agreements with one executive officer not named in the Summary
Compensation Table and 13 senior officers of the Company. With the exception of
the level of benefits provided under these agreements, the agreements are
identical to the executive retirement agreements. The officer will receive an
annual benefit equal to 2.0% of final average compensation multiplied by years
of service, up to a
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<PAGE>
maximum of 50.0% of final average compensation, less the sum of the amounts
payable from the Retirement Income Plan and any other pension plan in which the
officer may participate.
The following table sets forth estimated total annual benefits which
would become payable under the formula in the supplemental retirement agreement
(which amounts will be reduced by the benefits paid under the Retirement Income
Plan) to the officers based upon final average compensation and years of
credited service.
<TABLE>
<CAPTION>
Estimated Annual Retirement Benefits
for Years of Credited Service
Average Compensation During Highest -------------------------------------------------
Three Years in the Last Five Years
Before Retirement 10 15 20 25
- ------------------------------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
$ 100,000 $20,000 $ 30,000 $ 40,000 $ 50,000
150,000 30,000 45,000 60,000 75,000
200,000 40,000 60,000 80,000 100,000
250,000 50,000 75,000 100,000 125,000
300,000 60,000 90,000 120,000 150,000
350,000 70,000 105,000 140,000 175,000
</TABLE>
In addition to the executive and supplemental retirement agreements and
also to assist in senior management succession planning, Wachovia has a
Retirement Income Benefit Enhancement Plan which covers 13 senior officers of
the Company. The benefits afforded to plan participants are similar to those
afforded under the executive and supplemental retirement agreements with the
following exceptions: (1) the officer will receive an annual benefit equal to
1.5% of final average compensation multiplied by years of service, up to a
maximum of 37.5% of final average compensation, less the sum of the amounts
payable from the Retirement Income Plan and any other pension plan in which the
officer may participate; and (2) the retirement eligibility dates, normal forms
of payment and benefit options are identical to those under the Retirement
Income Plan.
The following table sets forth estimated total annual benefits which
would become payable under the formula in the Retirement Income Benefit
Enhancement Plan (which amounts will be reduced by the benefits paid under the
Retirement Income Plan) to the officers based upon final average compensation
and years of credited service.
<TABLE>
<CAPTION>
Estimated Annual Retirement Benefits
for Years of Credited Service
Average Compensation During Highest -------------------------------------------------
Three Years in the Last Five Years
Before Retirement 10 15 20 25
- ------------------------------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
$ 100,000 $15,000 $22,500 $30,000 $37,500
150,000 22,500 33,750 45,000 56,250
200,000 30,000 45,000 60,000 75,000
250,000 37,500 56,250 75,000 93,750
</TABLE>
Employment Agreements
Wachovia has entered into Employment Agreements with certain senior
officers of the Company, including each of the named executives, four other
executive officers and 20 other senior officers. If the Company terminates the
officer's employment without cause, the officer will receive monthly
compensation continuance payments for the period beginning with the date of
termination and ending with the earlier of the third anniversary of the date of
termination or the retirement date of the officer pursuant to the officer's
executive or supplemental retirement agreement, if any, described above. The
monthly amount of compensation continuance is defined as one-twelfth of the sum
of (i) an amount equal to the officer's highest annual rate of salary in effect
during the twelve-month period immediately preceding his date of termination,
(ii) an amount equal to the average of the amounts, if any, awarded to the
officer under Wachovia's Senior Management Incentive Plan for each of the three
consecutive calendar years immediately preceding the year of termination, and
(iii) an amount equal to the average of any annual contributions by the Company
on behalf of the officer under the Retirement Savings and Profit-Sharing Plan
and the associated equalization plan, for each of the three consecutive
calendar years immediately preceding the year of termination.
-23-
<PAGE>
During the period of compensation continuance, the officer also will receive
benefits pursuant to certain employee benefit plans in which he was
participating at the time of termination or substantially similar benefits, all
outstanding stock options previously granted to the officer will become fully
vested and exercisable, and all previously granted restricted stock awards will
become fully vested and available for distribution to the officer. The
Employment Agreements for the Chief Executive Officer, three of the named
executives, three other executive officers and five other senior officers also
have a change of control feature which extends the Agreement for three years
beyond a change in control of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the compensation committee from April 25, 1997, or from
the date such individual joined the Board, to the present are: John Clendenin,
Chairman, Peter C. Browning, Robert M. Holder, Jr., George R. Lewis, Sherwood
H. Smith, Jr. and John C. Whitaker, Jr. None of these individuals is or has
ever been an officer or employee of Wachovia. Mr. Baker is a Director of
Carolina Power & Light Company but does not serve on its compensation
committee. Mr. Smith, Chairman of the Board of Carolina Power & Light Company,
serves on Wachovia's compensation committee.
Certain Transactions Involving Members of the Committee
On November 25, 1997, Wachovia Bank entered into an Agreement of Purchase
and Sale of Real Property to purchase an 8.6524 acre tract and a 0.3317 acre
tract located in Forsyth County, North Carolina (the "Real Property") for the
purpose of constructing on that property a data processing center. Subsequent
to the execution of such Purchase Agreement, Wachovia Bank elected to treat the
property as replacement property in a like-kind exchange transaction pursuant
to Section 1031 of the Internal Revenue Code of 1986, as amended, and certain
income tax treasury regulations promulgated thereunder. In furtherance of that
purpose, on January 23, 1998, Wachovia Bank assigned its rights under the
initial Purchase Agreement to HP Venture II, LLC ("HP"), a Georgia limited
liability company of which the son of Robert M. Holder, Jr., a Director of
Wachovia, is the sole member, and concurrently with such assignment entered
into a Purchase and Sale Agreement with that entity. The Purchase and Sale
Agreement provides that if HP and Wachovia Bank shall not have negotiated and
executed mutually acceptable agreements for the construction and development of
the data processing center and the terms and conditions of construction
financing therefor on or before March 31, 1998, Wachovia Bank will repurchase
the Real Property for an amount equal to the sum of: (i) the initial purchase
price of the Real Property in the amount of approximately $2.1 million, plus
all out of pocket costs and expenses incurred by HP in connection with such
acquisition, (ii) interest on such amount at a rate per annum (computed on a
simple interest basis) equal to the Monthly LIBOR Index plus 1.85%, (iii) all
out of pocket costs incurred by HP in connection with development work on or
about the Real Property in contemplation of the development and construction of
the improvements described in the recitals of the Purchase and Sale Agreement,
and (iv) a transaction fee (not to exceed $30,000) equal to one percent times
the sum of HP's out of pocket costs and expenses described in items (i) and
(iii) above. Wachovia Bank is currently in the process of negotiating a
construction development and purchase and sale agreement with HP.
In April 1997, Wachovia Bank began construction on a new office building
and parking deck one block from the corporate headquarters building in
Winston-Salem, North Carolina. The building will be seven floors of
approximately 235,000 total square feet to be occupied by Wachovia Bank and its
affiliates. The parking deck will contain 600 spaces to be utilized by
employees of Wachovia Bank and its affiliates. Construction is expected to be
completed by March 15, 1998.
After careful consideration and review of possible alternatives and with
the assistance of appropriate independent professionals, management recommended
that the Board of Directors of Wachovia Bank retain the services
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<PAGE>
of an experienced consultant to undertake the planning, design and oversight of
construction and to provide expertise in project management, budgeting, cost
control, contracting with required contractors and specialists, providing
guidance to the architect as to design practicality, and administering the
construction process consistent with prudent industry standards. The criteria
for selection of the consultant included the firm's prior experience with
development management of comparable projects, the capabilities and commitment
of its senior principals, its ability to work in a team environment, its lack
of conflicting or competing projects which could result in a reduction or
compromise in the consultant's attention to the project, the financial
stability and reputation in the industry of the consultant, and the cost of
delivery of the services to be provided. Management evaluated firms located in
the southeastern United States, solicited bids from seven qualified firms and
recommended to the Wachovia Bank Board and to the Wachovia Board that the firm
of Taylor & Mathis, Inc., a real estate development firm of which Charles
McKenzie Taylor, who retired as a Director of Wachovia in April 1997, is an
officer, director and minority shareholder, be retained by Wachovia Bank. In
January 1997, the Wachovia Bank Board and the Wachovia Board with Mr. Taylor
absent, approved such arrangement after thorough discussion and review.
Wachovia Bank negotiated a development management agreement pursuant to which
it is estimated that Taylor & Mathis, Inc. will be paid a fee of approximately
$360,000 and expenses of $30,000 over a two-year period. 1997 payments totaled
$228,046.86, including $225,000 in fees and $3,046.86 in expenses.
Management evaluated bids and qualifications of several general
contractors for this project and recommended that Wachovia Bank select
Holder-Russell Construction Company ("Holder-Russell"), a joint venture of two
construction companies, as general contractor. The two companies have worked
together frequently in similar joint ventures, including on Wachovia's
headquarters building. Robert M. Holder, Jr., a Director of Wachovia, is an
officer, director and majority shareholder of one of these companies, and
Herman J. Russell, a Director of Wachovia, is an officer, director and majority
shareholder of the other company. In January 1997, the Wachovia Bank Board and
the Wachovia Board, with Messrs. Holder and Russell absent, approved such
arrangement after thorough discussion and review. Wachovia Bank, with the
assistance of Taylor & Mathis, Inc., negotiated a construction contract
pursuant to which it is estimated that Holder-Russell will be paid a fee of 3%
of the total project costs (such fee is estimated to be approximately $753,420)
plus expenses. Holder-Russell projects costs to date have totaled $9,775,629
generating fee payments of approximately $293,268, or 3% of costs to date.
WBNC entered into a contract effective August 1, 1995, with Taylor &
Mathis, Inc., for the management and operation of the Company's headquarters
building. The management fee is $9,083.33 per month plus 25% of the salary and
travel expenses of the general manager and all of the salaries and benefits of
the on-site employees. The contract was renewed and will continue until
December 31, 1999, unless terminated by the parties. Fees in the amount of
approximately $264,957.20 were paid to Taylor & Mathis, Inc., under this
contract in 1997. An amendment to this contract provided for the operation and
management of the new office building. The management fee is $3,478.52 per
month plus 25% of the salary and travel expenses of the general manager and all
of the salaries and benefits of the on-site employees. The contract will
continue until December 31, 1999, unless terminated by the parties.
Wachovia Bank entered into a lease agreement effective July 1, 1991, with
a Georgia general partnership of which Mr. Holder and members of his family are
the principals, for branch and drive-in banking facilities and office space in
an office building in Atlanta, Georgia. Wachovia Bank employed an independent
professional consulting firm to review the lease proposal and insure that the
lease terms and arrangements were fair and competitive. The lease agreement
relates to 40,813 square feet of space for the branch banking location and
office space for a term of 15 years with two five-year extension options. Base
rent is $79,016.61 per month in years one through five, $94,415.07 per month in
years six through ten, and $107,407.43 per month in years 11 through 15. If the
extension options are exercised, rent will be at a negotiated fair market rate
at that time. The lease agreement was amended, effective December 31, 1991, to
add an additional 11,450 square feet of office space for a term of five years
and base rent of $21,945.83 per month following an initial free rent period for
15 months. The amendment provides for a ten-year extension option, which was
exercised on June 15, 1996, and went into effect on April 1, 1997, at a base
rent of $24,216.75 per month in years six through ten and $27,508.62 per month
in years 11 through 15, followed by two
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<PAGE>
five-year extension options at negotiated fair market rates. The lease
agreement was amended a second time, effective February 22, 1993, to provide
for an additional 10,825 square feet for a term of four years and base rent of
$20,746.00 per month following an initial free rent period of 12 months. This
amendment was amended, effective March 20, 1995, to reduce the added space to
4,897 square feet and the rent to $9,386 per month and amended again on June
15, 1996 to delete the 4,897 square feet. This amendment also provides for a
ten-year extension option at a base rent of $11,532.68 per month in years six
through ten and $14,644.58 per month in years 11 through 15, followed by two
five-year extension options at negotiated fair market rates. The lease
agreement also provides that Wachovia Bank will pay its pro rata share of the
operating expenses of the building in excess of 1992 levels (1993 levels with
respect to space leased under the second amendment) of such expenses which are
paid by the lessor. The total rent and operating expenses paid by Wachovia Bank
during 1997 was approximately $1,412,896.
CERTAIN TRANSACTIONS INVOLVING DIRECTORS AND EXECUTIVE OFFICERS
Directors, nominees and executive officers, members of their immediate
families, and business organizations and individuals associated with them have
been customers of, and have had normal banking transactions with, Wachovia
Bank, CFB, JNB and 1st Bank. All such transactions were made in the ordinary
course of business, were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other customers, and did not involve more than the normal
risk of collectibility or present other unfavorable features. In addition,
Wachovia and its subsidiaries have engaged in other transactions with such
persons, all of which were made on substantially the same terms as those
prevailing at the time for comparable transactions with other persons.
Certain Transactions Involving Directors Not on the Compensation Committee
Hayne Hipp is President and Chief Executive Officer of The Liberty
Corporation, which is the parent of Liberty Life Insurance Company ("Liberty
Life"), which Mr. Hipp also serves as a director. The Hipp family has
significant share holdings in The Liberty Corporation. Wachovia places with
Liberty Life certain credit life insurance purchased by installment loan
customers of its subsidiary corporations. The net premium benefit on this
credit life insurance retained by Liberty Life in 1997 was approximately
$159,967. Employee-owned universal life insurance policies for certain Wachovia
employees also are written by Liberty Life. During 1997, Wachovia paid
approximately $90,961 in premiums for this plan coverage, including
approximately $42,427 in employee payments toward universal life insurance plan
coverage. Corporate-owned life insurance policies associated with certain
employee benefit obligations are written by Liberty Life. During 1997, premiums
for this coverage were approximately $1,349,390.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Wachovia's
Directors and executive officers, and any persons who own beneficially more
than 10% of the outstanding shares of Wachovia Common Stock (there being, to
Wachovia's knowledge, no such 10% shareholders as of December 31, 1997), to
file with the SEC and the New York Stock Exchange reports disclosing their
initial ownership of Wachovia Common Stock, as well as subsequent reports
disclosing changes in such ownership. To Wachovia's knowledge, based solely on
a review of the copies of such reports furnished to Wachovia and written
representations that no other reports were required during the fiscal year
ended December 31, 1997, Wachovia's Directors and executive officers complied
with all Section 16(a) filing requirements.
-26-
<PAGE>
SHAREHOLDER PROPOSALS
In order to be considered for inclusion in the Proxy Statement and Form
of Proxy to be used in connection with Wachovia's 1999 Annual Meeting of
Shareholders, shareholder proposals must be received by the Secretary of
Wachovia no later than November 18, 1998.
OTHER MATTERS
The management of Wachovia knows of no other business which will be
presented for consideration at the meeting. However, if other matters are
properly presented at the meeting, it is the intention of the proxy holders
named in the accompanying Form of Proxy to vote the Proxies in accordance with
their best judgment.
[GRAPHIC OMITTED]
L. M. Baker, Jr.
Chief Executive Officer
March 18, 1998
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<PAGE>
[GRAPHIC OMITTED]
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- ------------------------------- 1. Election of Directors to serve for a three-year term:
Wachovia Corporation James S. Balloun
- ------------------------------- Peter C. Browning
Hayne Hipp
Lloyd U. Noland, III
Sherwood H. Smith, Jr.
With- For All
For hold Except
[ ] [ ] [ ]
Election of Directors to serve for a two-year term:
John T. Casteen III
George R. Lewis
With- For All
For hold Except
[ ] [ ] [ ]
Election of a Director to serve a one-year term:
James F. Betts
With- For All
For hold Except
[ ] [ ] [ ]
NOTE: If you do not wish your shares voted "For" a particular
nominee, mark the "For All Except" box and strike a line
through the nominee's(s') name(s).
Your shares will be voted for the remaining
nominee(s).
2. Amendment of the Articles of Incorporation of
Wachovia Corporation to increase the number of shares of
common stock authorized to be issued from 500 million
to one billion.
For Against Abstain
[ ] [ ] [ ]
3. Ratification of the appointment of Ernst &
Young LLP as independent auditors.
For Against Abstain
[ ] [ ] [ ]
4. In their discretion, upon any other business which
may properly come before the meeting or at any adjournment
thereof.
---------------- Mark box at right if an address change or comment has been
noted on the reverse side of this card.
Please be sure to sign Date [ ]
and date this Proxy.
- ---------------------------------------------
Shareholder(s) sign here
- ---------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
DETACH CARD DETACH CARD
</TABLE>
Wachovia Corporation
Dear Shareholder:
Please take note of the important information enclosed with this Proxy. There
are a number of issues related to the management and operation of your Company
that require immediate attention and approval. These are discussed in the
enclosed Proxy Statement.
Please mark the boxes on this Proxy card to indicate how your shares should be
voted. Then sign the card, detach and return it in the enclosed postage-paid
envelope.
Your vote must be received before the Annual Meeting of Shareholders, April 24,
1998.
Thank you for your prompt consideration of these matters.
Sincerely,
Wachovia Corporation
<PAGE>
Wachovia Corporation
Proxy for Annual Meeting of Shareholders
This Proxy is Solicited on Behalf of the Board of Directors of the Corporation
The undersigned hereby appoints Kenneth W. McAllister, Senior Executive Vice
President and General Counsel, and Alice Washington Grogan, Secretary, of
Wachovia Corporation, as attorneys and proxies to vote all of the shares of
COMMON STOCK of Wachovia Corporation, appearing on the reverse side hereof, held
or owned by the undersigned at the Annual Meeting of Shareholders on April 24,
1998, and at any adjournments thereof.
THE SHARES OF COMMON STOCK REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
- ------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE
- ------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the Company. Each
joint owner should personally sign. Trustees, custodians and other fiduciaries
should indicate the capacity in which they sign and, where more than one name
appears, a majority must sign. If the shareholder is a corporation, the
signature should be that of an authorized officer who should indicate his or her
title.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ---------------------------------------- --------------------------------------------
- ---------------------------------------- -------------------------------------------
- ---------------------------------------- ------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- ------------------------------- 1. Election of Directors to serve for a three-year term:
Wachovia Corporation James S. Balloun
- ------------------------------- Peter C. Browning
Hayne Hipp
Retirement Savings Lloyd U. Noland, III
and Profit-Sharing Plan Sherwood H. Smith, Jr.
With- For All
For hold Except
[ ] [ ] [ ]
Election of Directors to serve for a two-year term:
John T. Casteen III
George R. Lewis
Election of a Director to serve a one-year term:
James F. Betts
NOTE: If you do not wish your shares voted "For" a particular
nominee, mark the "For All Except" box and strike a line
through the name(s) of the nominee(s).
Your shares will be voted for the remaining
nominee(s).
2. Amendment of the Articles of Incorporation of
Wachovia Corporation to increase the number of shares of
common stock authorized to be issued from 500 million
to one billion.
For Against Abstain
[ ] [ ] [ ]
3. Ratification of the appointment of Ernst &
Young LLP as independent auditors.
For Against Abstain
[ ] [ ] [ ]
4. In their discretion, upon any other business which
may properly come before the meeting or at any adjournment
thereof.
---------------- Mark box at right if an address change or comment has been
noted on the reverse side of this card.
Please be sure to sign Date [ ]
and date this Proxy.
- ---------------------------------------------
Shareholder(s) sign here
- ---------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
DETACH CARD DETACH CARD
</TABLE>
Wachovia Corporation
Dear Participant:
Please take note of the important information enclosed with this Proxy. There
are a number of issues related to the management and operation of your Company
that require immediate attention and approval. These are discussed in the
enclosed Proxy Statement.
Please mark the boxes on this Proxy card to indicate how your shares should be
voted. Then sign the card, detach and return it in the enclosed postage-paid
envelope.
Your vote must be received before the Annual Meeting of Shareholders, April 24,
1998.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Wachovia Corporation
<PAGE>
Wachovia Corporation
Proxy for Annual Meeting of Shareholders
This Proxy is Solicited on Behalf of the Board of Directors of the Corporation
Wachovia Bank, N.A., Trustee
Wachovia Corporation Retirement Savings and Profit-Sharing Plan
With respect to shares of Common Stock of Wachovia Corporation held for your
account under the Wachovia Corporation Retirement Savings and Profit-Sharing
Plan, you are instructed to sign and forward the proxy being solicited by the
Wachovia Corporation Board of Directors after having directed said proxy to be
voted in the manner you have directed on the form of such proxy appearing on the
reverse hereof. Unless you have otherwise directed on such form, this proxy will
be voted FOR the proposals referred to herein.
THE SHARES OF COMMON STOCK REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
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PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE
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<TABLE>
<CAPTION>
<S> <C>
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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</TABLE>
