SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Wachovia Corporation
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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.
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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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(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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<PAGE>
Wachovia
--------
100 North Main Street 191 Peachtree Street, N.E.
P.O. Box 3099 P.O. Box 4148
Winston-Salem, North Carolina 27150 Atlanta, Georgia 30303
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 17, 1999
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 Wachovia Park Building, 101 North Cherry
Street, Winston-Salem, North Carolina, on Friday, April 23, 1999, at 10:30
A.M., EDT, for the following purposes:
(1) To elect four (4) directors for a three-year term to expire at the
2002 Annual Meeting of Shareholders (described on page 5 of the
accompanying Proxy Statement);
(2) To ratify the appointment of the independent auditors for 1999
(described on page 11 of the accompanying Proxy Statement);
(3) To approve the performance criteria under the Wachovia Corporation
Senior Management Incentive Plan to preserve the Company's tax
deduction for certain plan awards (described on pages 11 through 13
of the accompanying Proxy Statement); and
(4) To transact such other business as properly may come before the
meeting.
Shareholders of record at the close of business on February 16, 1999, are
entitled to notice of and to vote at the meeting and any adjournment thereof.
/s/ L. M. Baker, Jr.
-----------------------------
L. M. Baker, Jr.
Chairman, President
and Chief Executive Officer
PLEASE MARK, DATE, SIGN AND RETURN YOUR PROXY PROMPTLY.
<PAGE>
Wachovia
--------
100 North Main Street 191 Peachtree Street, N.E.
P.O. Box 3099 P.O. Box 4148
Winston-Salem, North Carolina 27150 Atlanta, Georgia 30303
PROXY STATEMENT
March 17, 1999
This Proxy Statement and accompanying proxy are being mailed to
shareholders on or about March 17, 1999, 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
23, 1999, and at any adjournment thereof. The entire cost of such solicitation
will be borne by Wachovia. In addition to solicitation by telephone or 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
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. A 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.
Shareholders of record at the close of business on February 16, 1999,
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 to one vote for each share held. At
the close of business on February 16, 1999, there were 203,417,376 shares of
Common Stock outstanding. All such shares are entitled to be voted at the
meeting.
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. 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.
The election of each nominee for Director requires the affirmative vote
of the holders of a plurality of the votes cast in the election of directors.
The affirmative vote of a majority of the votes cast will be required to act on
all other matters to come before the annual meeting. Votes that are withheld
and shares held by a broker, as nominee, that are not voted will not be
included in determining the number of votes cast and, therefore, will have no
effect on the election of Directors or other matters to come before the annual
meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of February 16, 1999, Wachovia Bank, National Association ("Wachovia
Bank"), a wholly owned subsidiary of Wachovia, beneficially held, in its
various fiduciary capacities, more than 5% of Wachovia's Common Stock. The
following table sets forth the amount and percent of Common Stock by type of
power held by Wachovia Bank.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Common Stock
- ------------------------------------- ----------------------------------------- -------------
<S> <C> <C> <C>
Wachovia Bank, National Association Total: 14,865,615 7.31
100 North Main Street Sole Power to Vote: 5,404,587 2.66
Winston-Salem, NC 27101 Shared Power to Vote: 8,164,673 4.01
Sole Power to Invest: 4,868,069 2.39
Shared Power to Invest: 8,941,236 4.40
</TABLE>
Wachovia knows of no person other than Wachovia Bank who beneficially
owns, or has the right to acquire, more than 5% of Wachovia's Common Stock.
BOARD OF DIRECTORS
The Board of Directors of Wachovia held nine meetings during 1998. Each
Director, with the exception of Messrs. Ingram and Lewis, 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 1998.
The bylaws of Wachovia provide that the number of Directors shall not be
less than nine nor more than twenty-five. There are presently seventeen
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. Messrs. James F. Betts and Lawrence M.
Gressette, Jr. are retiring as of the date of the Annual Meeting pursuant to
these retirement provisions. At the 1999 Annual Meeting of Shareholders, four
Directors are to be elected to serve for a term of three years, until the 2002
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
persons unable or unwilling to serve (subject to the requirement of Wachovia's
articles 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.
The Board of Directors has the following standing committees: Audit,
Compliance, Corporate Governance and Nominating, Credit, Executive, Finance,
and Management Resources and Compensation.
The Audit Committee consists of the following nonmanagement Directors:
George W. Henderson, III, Chairman, James S. Balloun, John T. Casteen III,
Lawrence M. Gressette, Jr., and Robert A. Ingram. During 1998, the Audit
Committee met four times. The Audit Committee is responsible for assuring that
there exist viable internal and
-2-
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 communicates 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.
The Management Resources and Compensation Committee consists of the
following nonmanagement Directors: John L. Clendenin, Chairman, Peter C.
Browning, George R. Lewis, Sherwood H. Smith, Jr., and John C. Whitaker, Jr.
The Management Resources and Compensation Committee has the responsibility 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 for the purposes of the qualified
performance-based compensation requirements for employer compensation
deductions that are set forth in Section 162(m) of the Internal Revenue Code of
1986, as amended. The Management Resources and Compensation Committee met five
times during 1998.
The Corporate Governance and Nominating Committee consists of the
following nonmanagement Directors: Sherwood H. Smith, Jr., Chairman, Peter C.
Browning, John L. Clendenin, George R. Lewis and John C. Whitaker, Jr. The
Corporate Governance and Nominating Committee has the responsibility to
consider and recommend nominees for the Board of Directors of the Company,
assess the performance of the Board, evaluate issues of corporate governance,
and recommend the processes and practices through which the Board shall conduct
its business. The Corporate Governance and Nominating Committee met four times
during 1998.
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 Company's Secretary, not less than 90 days or more
than 120 days prior to any meeting of shareholders called for the election of
Directors (provided that if fewer than 100 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 tenth day following the day on which the notice of
meeting was mailed). Each nomination must set forth (i) the name and address of
the shareholder who proposes to make the nomination and the name and address of
the person to be nominated; (ii) a representation that the shareholder is a
holder of record of shares of Common Stock entitled to vote at the meeting and
intends to appear in person or by proxy at the meeting to nominate the person
specified in the notice; (iii) a description of all arrangements or
understandings between the shareholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination is to
be made; (iv) such other information regarding each nominee as would be
required to be included in a proxy statement pursuant to the proxy rules of the
Securities and Exchange Commission if the nominee had been nominated by the
Board of Directors or committee; and (v) the written consent of each nominee to
serve as a director if so elected. Nominations not made in accordance with
these requirements may be disregarded by the chairman of the meeting.
Nonemployee Directors of Wachovia are paid a cash retainer of $12,500 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
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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.
Additional Director compensation is paid in Wachovia Common Stock or
equivalents through the plans described below to align more closely the
interests of Directors and shareholders.
Nonemployee Directors of Wachovia are credited with a quarterly grant of
$4,500 under the Deferred Stock Unit Plan. Amounts credited to or 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
that could be purchased for the $4,500 grant and any deferred cash retainer fee
on the quarterly award date at a price equal to the average of the closing
price of Wachovia's Common Stock for the preceding ten trading days ("fair
market value"). 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 a 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 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 Banks, Inc. hold Common Stock equivalents as a result of retainer and
meeting fees deferred under the Central Fidelity Compensation Plan for
Non-Employee Directors (the "Central Fidelity Directors Plan") which are
equivalent in value to shares of Wachovia Common Stock. Such equivalents are
settled in stock according to the distribution election of the Director.
Wachovia has entered into an agreement with Mr. Medlin whereby he has
agreed to provide certain consulting services to the Company from April 24,
1998 through November 23, 2003. Wachovia has agreed to pay Mr. Medlin $17,500
per month until April 23, 2000 and $10,000 per month from April 24, 2000 to
November 23, 2003. As a retired employee, Mr. Medlin is not eligible to
participate in the Directors' compensation and stock plans described above.
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,
1998, unless otherwise indicated.
-4-
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION AS DIRECTORS
Term Expiring 2002 Annual Meeting
<S> <C>
(Photo of Leslie M. Baker, Jr. appears here)
LESLIE M. BAKER, JR., 56, Chairman of the Board of Wachovia and Wachovia Bank
since April 24, 1998; President and Chief Executive Officer of Wachovia since 1994;
President and Chief Executive Officer of Wachovia Bank since June 1, 1997 and from 1990
to 1993; and President and Chief Operating Officer of Wachovia from February 1, 1993 to
December 31, 1993. 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
(Photo of Thomas K. Hearn, Jr. appears here)
THOMAS K. HEARN, JR., 61, is President of Wake Forest University. Dr. Hearn has been
a director of Wachovia Bank since June 1997 and, prior thereto, from 1988 to 1990. He was
first elected a Director of Wachovia in 1990 and was elected for his present term at the 1996
Annual Meeting of Shareholders.
Committees: Credit
Finance
(Photo of Elizabeth Valk Long appears here)
ELIZABETH VALK LONG, 48, is Executive Vice President of Time Inc., a Time Warner
subsidiary and a publisher and direct marketer of magazines, books, music and video, a
position she has held since May 1995. She was named President of Time magazine in
September 1993, having served as Publisher since 1991. Between 1986 and 1991, she served
successively as Publisher of Life magazine and Publisher of People magazine. Ms. Long also
is a director of the J.M. Smucker Company. She was elected for her present term at the
January 1999 meeting of the Board of Directors.
(Photo of John C. Whitaker, Jr. appears here)
JOHN C. WHITAKER, JR., 61, is Chairman of the Board and Chief Executive Officer of
Inmar Enterprises, Inc., an information services and transaction processing company. He has
been a director of Wachovia Bank since June 1997 and, prior thereto, from 1990 until 1996.
He was first elected a Director of Wachovia at the 1996 Annual Meeting of Shareholders.
Committees: Corporate Governance and Nominating
Management Resources and Compensation
Executive
</TABLE>
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<TABLE>
<CAPTION>
DIRECTORS CONTINUING IN OFFICE
Term Expiring 2000 Annual Meeting
<S> <C>
(Photo of John T. Casteen III appears here)
JOHN T. CASTEEN III, 55, 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 and
Wachovia Bank in connection with its acquisition of that company effective October 31,
1997. He was elected for his present term at the 1998 Annual Meeting of Shareholders.
Committees: Audit
Compliance
(Photo of John L. Clendenin appears here)
JOHN L. CLENDENIN, 64, 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 from January 1994 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., The Kroger Company, Springs Industries, Inc., Powerwave Technologies and
The Home Depot, Inc. He has been a director of Wachovia Bank since June 1997.
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
(Photo of George W. Henderson, III appears here)
GEORGE W. HENDERSON, III, 50, 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 has been a director of Wachovia Bank since 1995, and first was elected
a Director of Wachovia at the 1997 Annual Meeting of Shareholders.
Committees: Audit
Compliance
</TABLE>
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DIRECTORS CONTINUING IN OFFICE -- Continued
Term Expiring 2000 Annual Meeting
<TABLE>
<CAPTION>
<S> <C>
(Photo of Robert A. Ingram appears here)
ROBERT A. INGRAM, 56, is Chairman of Glaxo Wellcome Inc., a pharmaceutical research
and development company, a position he has held since October 1997. In addition to his
position as Chairman, he served as President from October 1997 to January 1999 and
Chief Executive Officer from 1994 to January 1999. From 1993 to 1994, he served as
President and Chief Operating Officer of Glaxo Inc. 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. He was elected for his present term at the
1997 Annual Meeting of Shareholders.
Committees: Audit
Compliance
(Photo of George R. Lewis appears here)
GEORGE R. LEWIS, 57, 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. He
serves as a director of Ceridian Corporation and Kemper National Insurance Companies.
Mr. Lewis was a director of Central Fidelity Banks, Inc. from 1985 to 1997 and was named
a Director of Wachovia and Wachovia Bank in connection with its acquisition of that
company effective December 15, 1997. He was elected for his present term at the 1998
Annual Meeting of Shareholders.
Committees: Corporate Governance and Nominating
Management Resources and Compensation
(Photo of John G. Medlin, Jr. appears here)
JOHN G. MEDLIN, JR., 65, is Chairman Emeritus of Wachovia. He served as Chairman of
the Board from 1988 to April 1998 and as Chief Executive Officer from 1977 until his
retirement from management on December 31, 1993. Mr. Medlin is a director of
BellSouth Corporation, Burlington Industries, Inc., Media General, Inc., National
Service Industries, Inc., and USAirways Group, Inc. He was elected a director of
Wachovia Bank in June 1997, after previously serving as a director from 1974 to 1994,
and was Chairman of Wachovia Bank from June 1997 to April 1998 and 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
Finance
</TABLE>
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DIRECTORS CONTINUING IN OFFICE -- Continued
Term Expiring 2001 Annual Meeting
<TABLE>
<CAPTION>
<S> <C>
(Photo of James S. Balloun appears here)
JAMES S. BALLOUN, 60, 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 director
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 and
Wachovia Bank to fill a vacancy in October 1997. He was elected for his present term at
the 1998 Annual Meeting of Shareholders.
Committees: Audit
Compliance
(Photo of Peter C. Browning appears here)
PETER C. BROWNING, 57, is President and Chief Executive Officer of Sonoco Products
Company, a global packaging company, a position he has held since 1998. Prior thereto,
he served as President and Chief Operating Officer from 1996 to 1998 and as Executive
Vice President from 1993 to 1996. Previously he was President, Chairman and Chief
Executive Officer of National Gypsum Company from 1990 to 1993. He is also a member of
the Board of Directors of Phoenix Home Life Mutual Insurance Company and Lowe's
Companies, Inc. Mr. Browning first was elected a Director of Wachovia and Wachovia Bank
to fill a vacancy in July 1997. He was elected for his present term at the 1998 Annual
Meeting of Shareholders.
Committees: Corporate Governance and Nominating
Management Resources and Compensation
(Photo of W. Hayne Hipp appears here)
W. HAYNE HIPP, 58, is Chairman, 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 in connection with the acquisition of that company in 1991. He has been a
director of Wachovia Bank since June 1997. He was elected for his present term at the
1998 Annual Meeting of Shareholders.
Committees: Credit
Finance
(Photo of Lloyd U. Noland, III appears here)
LLOYD U. NOLAND, III, 55, is Chairman, President, Chief Executive Officer and a
Director of Noland Company, a supplier of industrial products. He was a director of
Central Fidelity Banks, Inc. from 1987 to 1997 and was named a Director of Wachovia and
Wachovia Bank in connection with its acquisition of that company effective December 15,
1997. He was elected for his present term at the 1998 Annual Meeting of Shareholders.
Committees: Credit
Finance
</TABLE>
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DIRECTORS CONTINUING IN OFFICE -- Concluded
Term Expiring 2001 Annual Meeting
<TABLE>
<CAPTION>
<S> <C>
(Photo of Sherwood H. Smith, Jr. appears here)
SHERWOOD H. SMITH, JR., 64, is Chairman of the Board of Carolina Power & Light
Company, a public utility. He also served that company as Chief Executive Officer
from 1979 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 has been a director of Wachovia Bank since June 1997 and,
prior thereto, 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 1998 Annual Meeting of
Shareholders.
Committees: Corporate Governance and Nominating
Management Resources and Compensation
Executive
</TABLE>
- --------------------------------------------------------------------------------
-9-
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth, as of February 16, 1999, the number of
shares of Common Stock and units under the Deferred Stock Unit Plan and Central
Fidelity Directors Plan held 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. The number of shares of
Common Stock shown for each individual, and for all Directors, nominees and
executive officers as a group, represents less than 1% of Common Stock
outstanding. Unless otherwise noted, each individual has sole voting and
investment authority with respect to the number of shares or units set forth
opposite their name.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership
-----------------------------------------------------
Name Number of Shares(a) Deferred Stock Units(b)
- -------------------------------------------------- -------------------------- ------------------------
<S> <C> <C>
Leslie M. Baker, Jr. ......................... 254,812 (c) --
James S. Balloun ............................. 1,000 1,231.73
James F. Betts (e) ........................... 23,717 1,451.26
Peter C. Browning ............................ 200 1,181.29
John T. Casteen III .......................... 1,627 519.34
John L. Clendenin ............................ 7,012 4,629.74
Mickey W. Dry ................................ 83,990 (c) --
Lawrence M. Gressette, Jr. (e) ............... 10,633 (d) 1,847.33
Thomas K. Hearn, Jr. ......................... 3,814 2,278.79
George W. Henderson, III ..................... 1,064 (d) 1,811.01
W. Hayne Hipp ................................ 7,200 1,433.76
Robert A. Ingram ............................. 9,883 1,777.39
Walter E. Leonard, Jr. ....................... 107,805 (c) --
George R. Lewis .............................. 3,285 2,472.77
Elizabeth Valk Long .......................... 200 196.10
Robert S. McCoy, Jr. ......................... 91,119(c)(d) --
John G. Medlin, Jr. .......................... 203,224 (d) --
Lloyd U. Noland, III ......................... 88,250 3,741.43
G. Joseph Prendergast ........................ 119,875 (c) --
Sherwood H. Smith, Jr. ....................... 10,883 10,444.26
John C. Whitaker, Jr. ........................ 3,887 3,249.94
All Directors, Nominees and Executive Officers
as a Group (28 persons) ..................... 1,326,035(c)(d) 38,266.14
</TABLE>
(a) Includes the following number of shares of Common Stock that may be
acquired within sixty (60) days of February 16, 1999 through the
exercise of stock options or stock appreciation rights that are
settled in shares of Common Stock, or vesting of awards under one or
more of the Company's stock plans: Mr. Baker, 151,727 shares; Mr. Dry,
43,900 shares; Mr. Leonard, 61,000 shares; Mr. McCoy, 52,600 shares;
Mr. Prendergast, 62,000 shares; and all directors and executive
officers as a group, 573,156 shares.
(b) Units held under the Deferred Stock Unit Plan and Central Fidelity
Directors Plan are equivalent in value to shares of Common Stock and
do not have voting rights. Units under the Deferred Stock Unit Plan
are payable only in cash after the Director leaves the Board or upon a
change in control of the Company. Units under the Central Fidelity
Directors Plan are settled in stock according to the distribution
election of the Director.
(c) Includes shares held by Wachovia Bank, as Trustee under Wachovia's
Retirement Savings and Profit-Sharing Plan, as follows: Mr. Baker, 157
shares; Mr. Dry, 124 shares; Mr. Leonard, 3,639 shares; Mr. McCoy,
10,216 shares; Mr. Prendergast, 157 shares; and all executive officers
as a group, 20,298 shares.
-10-
(d) Excludes shares owned by family members of the following directors and
executive officers, each of whom disclaims beneficial ownership of such
shares: Mr. Gressette, 108 shares; Mr. Henderson, 2,478 shares; Mr.
McCoy, 973 shares; and Mr. Medlin, 4,540 shares.
(e) Directors retiring as of April 23, 1999.
APPOINTMENT OF INDEPENDENT AUDITORS
Ernst & Young LLP has been appointed independent auditors for Wachovia
for 1999, subject to 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 a vote "FOR" ratification of the
appointment of Ernst & Young LLP as independent auditors for 1999.
PROPOSAL TO APPROVE PERFORMANCE-BASED CRITERIA
UNDER THE COMPANY'S SENIOR MANAGEMENT INCENTIVE PLAN
Background
The Company is proposing that the shareholders approve the material terms
of the performance-based criteria applicable to the Company's Senior Management
Incentive Plan (the "plan"). These performance criteria are imposed to
preserve, to the extent possible, the Company's tax deduction for certain
awards made under the plan in accordance with the terms of Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code"), and related
regulations. The discussion, which follows, is qualified in its entirety by
reference to the plan. A copy of the form of the plan is attached hereto as
Exhibit A.
The plan was established in 1987. The purposes of the plan are to (i)
motivate and reward a greater degree of excellence and teamwork among the
senior officers of the Company and related corporations by providing incentive
compensation award opportunities; (ii) provide attractive and competitive total
cash compensation opportunities for exceptional corporate, business unit and
personal performance; (iii) reinforce the communication and achievement of the
mission, objectives and goals of the Company; and (iv) enhance the Company's
ability to attract, retain and motivate the highest caliber senior officers.
The purposes of the plan are carried out by payment to eligible
participants of annual incentive cash awards, subject to the terms and
conditions of the plan and the discretion of the Management Resources and
Compensation Committee (the "Committee"). Awards are based on corporate,
individual and business unit performance, as well as the participant's base
salary. Payments are made following the close of the plan year. The plan also
provides for the payment of awards upon termination of employment due to death,
disability or approved retirement and upon a change of control of the Company.
The plan may be amended by the Board of Directors or, upon its delegation, by
the Committee.
-11-
Shareholder Approval of Certain Performance-Based Compensation Criteria
Section 162(m) of the Code denies an employer a deduction for
compensation in excess of $1,000,000 paid to "covered employees" (generally,
the named executives in the summary compensation table) of a publicly held
corporation unless the compensation is performance-based compensation. The
Section 162(m) regulations generally require that shareholders approve the
material terms of compensation performance goals, and that performance goals be
submitted for reapproval five years after initial shareholder approval, or
earlier if the performance goals are materially modified. The Company's
shareholders initially approved the material terms of the performance goals at
the 1994 Annual Meeting and the material terms, as modified, are being
submitted to the shareholders for reapproval at the 1999 Annual Meeting.
The material terms subject to shareholder approval include (i) the
employees eligible to receive compensation; (ii) a description of the business
criteria upon which the performance goal is based; and (iii) the maximum dollar
amount of compensation that may be paid to an employee during a specified
period if the performance goal is met. These terms are described below.
Eligibility. Participants in the plan must be senior officers of the
Company or a related corporation and selected for participation by the Chief
Executive Officer of the Company. Senior officers include those officers who
are deemed to have sufficient responsibility, ability and potential to make
significant contributions to the success of the Company or a related
corporation. Approximately 425 employees of the Company and related
corporations, including the named executives, have been selected as
participants for 1999.
Business Criteria for Performance Goals. The performance goals upon which
awards are made are based upon business criteria applicable to the Company, the
participant's business unit and the participant individually. The corporate
business criteria upon which awards are based are the following earnings
factors, weighted as indicated: (i) net income per diluted share (50%); (ii)
return on assets (net income) (25%); and (iii) return on equity (net income)
(25%). Results from these three earnings measures are combined to produce a
corporate performance evaluation factor (the "corporate factor"), which is
multiplied by the individual factor and the participant's base salary paid
during the plan year to determine the amount of a participant's award. Under
the plan as approved in 1994, the net income earnings factor was determined on
the basis of "fully diluted shares." To conform to a change in generally
accepted accounting principles, the Company has revised the plan so that this
factor is now based on "diluted shares."
Annual Award Limitations. The maximum amount an individual currently may
be awarded under the plan ranges from 10% to 65% of the participant's base
salary. The plan has been amended, subject to shareholder approval, to provide
that the maximum amount an individual may be awarded under the plan for any
plan year may not exceed the lesser of 250% of the participant's salary or $2.5
million. The Company believes that increasing the maximum individual award
limitations is necessary and advisable in order to continue to attract and
retain highly qualified employees and to offer compensation competitive with
other peer institutions.
The Company believes that this modification will afford more flexibility
in establishing competitive compensation programs and allow the Company to
decrease its reliance on base pay in establishing such programs. The Company
paid certain supplemental bonus payments in addition to plan awards to certain
officers (including the named executives) in 1998 to accomplish these
objectives and is proposing to amend the plan in order to obtain a deduction
for future bonus payments to the fullest practicable extent. These supplemental
bonus payments earned in 1998, which are included in the Summary Compensation
Table, were not eligible for the deduction limitation exception. See "Board
Compensation Committee Report on Executive Compensation -- Annual Cash
Incentives" below.
-12-
New Plan Benefits
The benefits payable under the plan to the named executives and other
persons, if the performance criteria are approved, are not currently
determinable. However, as an illustration of the benefits which may be provided
by the plan if the shareholders approve the performance criteria, the following
table sets forth the bonus payments made for 1998 to the individuals and groups
indicated. Such amounts represent awards made under the plan, as well as
certain supplemental bonus awards earned in 1998.
<TABLE>
<CAPTION>
Name 1998 Award
- ------------------------------------------------ -------------
<S> <C>
Leslie M. Baker, Jr. $ 891,600
G. Joseph Prendergast 573,800
Walter E. Leonard, Jr. 573,800
Robert S. McCoy, Jr. 546,300
Mickey W. Dry 259,000
Executive Officers as a Group (12 persons) 4,108,600
Non-Executive Officer Employee Group 13,879,294
</TABLE>
The Board of Directors recommends a vote "FOR" approval of the
performance criteria under which compensation may be paid pursuant to the plan.
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 the total
compensation and benefit policies, plans, programs and agreements for senior
management. 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 cash 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, targeted and 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. These plans
and programs are intended to work together to provide a reasonable and
competitive total compensation opportunity based on the sustained performance
of the Company and the individual's contributions to that performance. 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 stock performance graph on page 16.
Federal tax law limits to $1 million per year the tax deduction available
to public companies for certain compensation paid to designated executive
officers unless an exception to the $1 million limitation for qualified
compensation is available. The Company's compensation program, including its
principal performance-based components, the Senior Management Incentive Plan
and the Stock Plan, is designed to enable the Company to be eligible for full
deductions for income tax purposes for qualified performance-based compensation
in excess of the $1 million limitation. However, the Company reserves the right
to award compensation that does not comply with the $1 million deduction
limitation exception if, in light of the overall goals and objectives of the
Company, it is determined to be in the best interest of the Company and its
shareholders to do so. In 1988, the Company made certain supplemental bonus
awards which are not eligible for the deduction exception, as described in
"Annual Cash Incentives" below.
-13-
The Committee has retained an independent executive compensation and
benefit consultant to assist the Committee in its establishment, assessment and
evaluation of the appropriateness and competitiveness of the senior management
compensation program. Based on this consulting assistance, the Committee
determined that base salaries, stock-based incentive awards, and retirement
plans at the Company were reasonably competitive with those of its peers. The
Committee also determined, however, that the Company's annual cash incentive
awards were substantially lower than those of its peers. To help ensure that
the Company could retain and attract the talent needed for the Company to
compete successfully in an intensely competitive environment, the Committee
approved revisions to the participation levels in the Senior Management
Incentive Plan for certain participants, including the named executives, and
also revised the plan to recognize corporate performance above the annual
target performance benchmark. The maximum payments under the plan pursuant to
these criteria are subject to shareholder approval. See "Proposal to Approve
Performance-Based Criteria Under the Company's Senior Management Incentive
Plan" above.
In addition, the Committee approved certain supplemental annual cash
incentives, including amounts payable to the named executives, based on 1998
performance under the revised targets. The Committee determined that these
supplemental awards for 1998 and prospective revisions to the plan were
necessary and appropriate since Wachovia's total compensation programs and
awards remained well within conventional standards of reasonableness and
competitive necessity, and the 1998 awards were clearly justified by sustained
performance which exceeds industry norms. See "Annual Cash Incentives" below.
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
1998 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 salary increase.
The salary increases during 1998 for certain executives, including the named
executives, were based on an evaluation by the Committee of the above-described
factors.
Annual Cash Incentives
The principal component of the Company's annual cash incentive program
has historically been the Senior Management Incentive Plan. For 1998, based on
reports provided by Wachovia's compensation consultants and comparisons with
peer financial institutions, the Committee determined that the Company's annual
cash incentive program should also include as a second component supplemental
cash incentives for outstanding performance. The Committee determined that
awarding a supplemental cash incentive for 1998 would enable the Company to
align its overall cash compensation levels with that of its peers, and that
basing such supplemental compensation on performance criteria, rather than
general salary increases, would benefit the Company through increased corporate
and individual performance.
Personal award opportunities under both the plan and the supplemental
awards were based upon the performance criteria applicable to the Company, the
individual performance of each participant and related business unit
performances. Selected members of senior management, including the named
executives, were eligible for plan awards and supplemental awards.
-14-
In administering the Company's annual cash incentive program, 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: (i) net income per diluted share (50%
weight), (ii) return on assets (25% weight) and (iii) return on equity (25%
weight). The composite corporate performance evaluation factor is determined by
actual financial results for the year in relation to the 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 the Committee's policies, an individual
assessment is made of the employee's contribution to the achievement of the
Company's overall performance, goals and objectives. The resulting individual
performance evaluation factor may reduce, but not increase, the employee's
award based upon the composite corporate factor.
In January 1999, the Committee reviewed and approved the 1998 Senior
Management Incentive Plan award payments and the other supplemental 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 1998 and on
the Company achieving net income per diluted share, after taking into account
special items not originally budgeted, of $4.45 (50% weight), and a return of
1.45% on assets (25% weight) and a return of 18% on equity (25% weight). These
awards are included in the Summary Compensation Table.
Stock-Based Awards
The principal component of Wachovia's stock-based awards program is the
Wachovia Corporation Stock Plan. The purpose of the Stock Plan is to encourage
and enable members of senior management to increase their stock ownership
interests in the Company, thereby even further aligning 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 ("SARs"),
restricted stock and/or restricted units or other stock-related awards. Stock
options, restricted stock and SARs have been granted under the Plan. The stock
options and SARs typically vest 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.
In early 1998, the Committee awarded stock options and restricted stock
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. These stock awards are included in the tables on the following
pages.
As of February 1, 1999, approximately 1,493,433 shares of Common Stock
were available for grant under the Wachovia Corporation Stock Plan.
1998 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 awards and stock awards of the Chief
Executive Officer for 1998, the Committee considered Wachovia's overall
performance in meeting the needs of shareholders, customers, communities served
and employees. The Committee determined that Mr. Baker
-15-
had continued to lead Wachovia successfully during an ever-changing and
intensely competitive environment through the implementation of acquisitions
and strategic growth initiatives. These factors, along with Mr. Baker's
personal leadership and accomplishments, were considered in conjunction with
the Company's financial results for 1998 in relation to its established
business plan and in comparison with the performance of peer organizations. Mr.
Baker's 1998 Senior Management Incentive Plan award and his supplemental cash
award were based on the above considerations and the Company's achieving
certain annual performance goals (net income per diluted share, return on
assets and return on equity) as described above in this report under the
heading "Annual Cash Incentives."
John L. Clendenin, Chairman
Peter C. Browning George R. Lewis Sherwood H. Smith, Jr. John C. Whitaker,
Jr.
COMPANY STOCK PERFORMANCE
The graph below presents the cumulative total return, assuming the
reinvestment of dividends, for the period from December 31, 1993 through
December 31, 1998, from an investment of $100 in each of Wachovia Common Stock,
the Standard & Poor's 500 Stock Index and the Keefe, Bruyette & Woods 50 Total
Return Index (the "KBW 50"). The KBW 50 is a published industry index providing
a market capitalization weighted measure of the total return of 50 U.S. banking
companies, including all money center and most major regional banks.
Plot points appear below:
Wachovia KBW 50 S&P 500
-------- ------ -------
Base period 1993 $100 100 100
1994 $ 99.95 94.90 101.32
1995 $147.05 152.00 139.39
1996 $187.65 215.01 171.40
1997 $276.57 314.32 228.58
1998 $304.70 340.34 293.91
Five-year compound
annual growth rate 25.0% 27.8 24.1
-16-
COMPENSATION
The following table sets forth, for the years ended December 31, 1998,
1997 and 1996, information regarding compensation paid to the Company's
President and Chief Executive Officer and the four other most highly
compensated executive officers of the Company (the "named executives").
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
-------------------------------------------------
Other Annual
Name and Principal Position Year Salary ($) Bonus ($)(1) Compensation ($)(2)
- ----------------------------- ------ ------------ -------------- ---------------------
<S> <C> <C> <C> <C>
Leslie M. Baker, Jr. 1998 839,167 891,600 47,080
Chairman, President and 1997 710,000 432,700 41,482
Chief Executive Officer 1996 650,000 380,300 29,190
G. Joseph Prendergast 1998 540,000 573,800 27,819
Senior Executive Vice 1997 470,000 242,300 25,378
President 1996 442,500 219,000 18,753
Walter E. Leonard, Jr. 1998 540,000 573,800 25,229
Senior Executive Vice 1997 470,000 242,300 21,493
President 1996 441,667 218,600 18,465
Robert S. McCoy, Jr. 1998 514,167 546,300 28,632
Senior Executive Vice 1997 441,667 227,700 27,663
President and 1996 391,667 193,900 25,723
Chief Financial Officer
Mickey W. Dry 1998 325,000 259,000 28,595
Senior Executive Vice 1997 276,667 129,700 19,293
President and 1996 242,917 109,300 10,216
Chief Credit Officer
<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. 1,875,000 125,000/0 50,350
Chairman, President and 999,986 75,000/50,000 42,600
Chief Executive Officer 999,994 75,000/75,000 39,000
G. Joseph Prendergast 1,125,000 50,000/0 32,400
Senior Executive Vice 858,750 30,000/0 28,200
President 875,000 25,000/0 26,550
Walter E. Leonard, Jr. 1,125,000 50,000/0 32,400
Senior Executive Vice 858,750 30,000/0 28,200
President 875,000 20,000/0 26,500
Robert S. McCoy, Jr. 1,125,000 50,000/0 30,850
Senior Executive Vice 858,750 30,000/0 26,500
President and 875,000 20,000/0 23,500
Chief Financial Officer
Mickey W. Dry 900,000 30,000/0 19,500
Senior Executive Vice 687,000 25,000/0 16,600
President and 525,000 15,000/0 14,575
Chief Credit Officer
</TABLE>
(1) Includes amounts payable under the Company's Senior Management Incentive
Plan and, for 1998, a supplemental bonus. See "Board Compensation
Committee Report on Executive Compensation" above.
(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) Represents the value of restricted stock units awarded under Wachovia's
Stock Plan, without deduction for units that will be surrendered at the
time of distribution of the award to pay applicable payroll taxes on the
award. During 1998, Messrs. Baker, Prendergast, Leonard, McCoy and Dry
were awarded 25,000, 15,000, 15,000, 15,000 and 12,000 restricted stock
units, respectively. All outstanding restricted stock unit awards have a
five-year restriction period. Aggregate outstanding restricted stock unit
awards and their value at December 31, 1998 were: for Mr. Baker, 115,324
shares valued at $10,083,642; for Mr. Prendergast, 65,000 shares valued at
$5,683,437; for Mr. Leonard, 65,000 shares valued at $5,683,437; for Mr.
McCoy, 61,500 shares valued at $5,377,406; and for Mr. Dry, 43,000 shares
valued at $3,759,812. No dividends are paid on restricted stock awards
during the restriction period.
(4) The amounts shown reflect company-matching contributions with respect to an
individual's participation in Wachovia's Retirement Savings and
Profit-Sharing Plan and the associated equalization plan.
-17-
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table sets forth information with respect to the named
executives concerning the grant of employee stock options during 1998. No SARs
were granted during 1998.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term (3)
----------------------------------------------------------------- -------------------------
Percent of
Number of Total
Securities Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted (#)(1) Fiscal Year ($/Share) (2) Date 5% ($) 10% ($)
- ------------------------ ---------------- -------------- --------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Leslie M. Baker, Jr. 125,000 4.39 75.00 1/23/08 5,895,887 14,941,336
G. Joseph Prendergast 50,000 1.76 75.00 1/23/08 2,358,355 5,976,534
Walter E. Leonard, Jr. 50,000 1.76 75.00 1/23/08 2,358,355 5,976,534
Robert S. McCoy, Jr. 50,000 1.76 75.00 1/23/08 2,358,355 5,976,534
Mickey W. Dry 30,000 1.05 75.00 1/23/08 1,415,013 3,585,921
</TABLE>
(1) All stock options 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 is based on the assumed annual rates of
stock price appreciation of 5% and 10% over the term of each option. 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 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.
The following table sets forth information with respect to the named
executives concerning the exercise of options during 1998 and unexercised
options and SARs held at year-end. No SARs were exercised during 1998 and,
except for 125,000 SARs held by Mr. Baker, no SARs were outstanding at
year-end.
Aggregated Option 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
Options/SARs at Options/SARs at
Fiscal Year-End (#) Fiscal Year-End ($)(2)
----------------------------- ----------------------------
Shares Acquired
Name on Exercise (#) Value Realized ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------ ----------------- ----------------------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Leslie M. Baker, Jr. 3,009 151,641 122,164 332,000 5,317,161 9,359,625
G. Joseph Prendergast -- -- 36,000 97,000 1,685,500 2,428,687
Walter E. Leonard, Jr. 8,640 537,481 36,000 94,000 1,706,750 2,297,625
Robert S. McCoy, Jr. 3,500 185,500 28,700 92,300 1,314,619 2,206,944
Mickey W. Dry 5,760 345,721 34,000 63,700 1,755,774 1,620,681
</TABLE>
(1) Based on the difference between the closing price on the date of exercise
and the option exercise price.
(2) Based on the difference between the closing price on December 31, 1998, and
the exercise price.
-18-
OTHER EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
Pension Plan
The following table shows the estimated annual benefits payable at
retirement to a participant in the Company's qualified defined benefit plan.
<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
1,500,000 149,580 224,370 299,160 373,950 448,740 523,530
</TABLE>
(1) Pursuant to the terms of the Retirement Income 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. Benefits vary under certain predecessor plans and plans maintained
by companies that merged into Wachovia.
(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.
Wachovia's defined benefit pension plan is the Retirement Income Plan of
Wachovia Corporation (the "Retirement Income Plan"). 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 preceding termination or retirement ("average compensation"),
multiplied by years of service after December 31, 1989. Employees of Wachovia
prior to January 1, 1989, and employees of companies that have merged into or
have been acquired by Wachovia, may have accrued benefits under certain
predecessor defined benefit plans. Benefits vary under these plans from the
terms of the Retirement Income Plan.
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 $130,000 for 1998 and 1999 (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 1998 and 1999 (adjusted
in increments of $10,000 for inflation). The 1998 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, 28
years; Mr. Dry, 34 years; Mr. Leonard, 28 years; Mr. McCoy, 14 years; and Mr.
Prendergast, 24 years.
Other Retirement Arrangements
Senior Executive Retirement Agreements. To assist in executive management
succession planning, Wachovia has entered into nonqualified, unfunded senior
executive retirement agreements with 22 senior officers of the Company,
including the named executives. Under the agreements, the officer will retire
at age 60 or, with the permission of the Committee, as early as age 55 on a
reduced benefit basis for each year prior to age 60 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
-19-
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
Average Compensation During Highest for Years of Credited Service
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
1,500,000 375,000 562,500 750,000 937,500
</TABLE>
Mr. McCoy's senior executive retirement agreement is slightly different
than those of the other executives in that his formula increases 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 material features of
his executive retirement agreement are substantially similar to those of the
other participants.
Executive Retirement Agreements. In addition to the senior executive
retirement agreement and also to assist in senior management succession
planning, Wachovia has entered into executive retirement agreements with 17
senior officers of the Company. With the exception of the level of benefits
provided under these agreements, the agreements are substantially similar to
the senior executive retirement agreements. The individuals covered by these
agreements will receive an annual benefit equal to 2.2% of final average
compensation multiplied by years of service, up to a maximum of 55% 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
agreements (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
Average Compensation During Highest for Years of Credited Service
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
400,000 88,000 132,000 176,000 220,000
500,000 110,000 165,000 220,000 275,000
</TABLE>
-20-
Management Retirement Agreements. In addition to the senior executive and
executive retirement agreements and to assist in senior management succession
planning, Wachovia has management retirement agreements with 25 senior officers
of the Company. The benefits afforded to plan participants are similar to those
afforded under the senior executive and executive retirement agreements with
the following exceptions: (i) 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; (ii) the retirement eligibility dates are identical to
those under the Retirement Income Plan; and (iii) the benefit determined under
(i) above is payable after the executive's retirement date with no reduction
for payments prior to age 65.
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
Average Compensation During Highest for Years of Credited Service
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>
Retirement Savings and Profit-Sharing Plan
Wachovia has a voluntary defined contribution plan titled the Retirement
Savings and Profit-Sharing Plan. The plan provides that eligible employees can
contribute to the plan from 1% to 15% of their compensation, as defined in the
plan. Through December 31, 1998, the plan provided that the Company would match
50% of each participant's contribution up to a maximum contribution of 3% of
the participant's compensation. The plan also provided for (i) additional
contributions of up to 3% of a participant's compensation if the Company met
certain earning performance criteria established annually at the beginning of
each year, and (ii) special discretionary contributions of up to an additional
4% if the committee administering the plan considered the Company's performance
to be truly outstanding. Effective as of January 1, 1999, the Company increased
the guaranteed match to 100% on the participant's first 3% of compensation
contributed and 50% on the next 3% of compensation contributed, and
correspondingly adjusted the additional contribution to up to 1.5% of
compensation contributed if the Company met the earning performance criteria.
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 1998 and 1999 (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 $10,000 in 1998 and 1999 (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 named executives). During 1998, Wachovia maintained
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 Code. If contributions under
the plan were not allocated to the key employee due to those limitations on
contributions, the equalization plan provided for Wachovia to credit to a
nonqualified account for the employee the amount of such contribution not so
allocated. Amounts credited to each participant's nonqualified account in 1998
were credited monthly with an interest equivalent based on the Long-Term
Applicable Federal Rate and are payable to the participants in the equalization
plan upon termination of employment. The amounts contributed by Wachovia to the
equalization plan are included in the column "All Other Compensation" in the
Summary Compensation Table.
-21-
Employment Agreements
Wachovia has entered into employment agreements with certain senior
officers of the Company, including the named executive 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.
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, the named executives,
two other executive officers and six other senior officers also have a change
in control feature which extends the Agreement for three years in the event of
a change in control of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Management Resource and Compensation Committee, which
serves as the compensation committee of the Board, from April 24, 1998, to the
present are: John Clendenin, Chairman, Peter C. Browning, 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. Robert M. Holder, Jr., a Director
of Wachovia until April 24, 1998, was a member of the compensation committee
from April 25, 1997 through April 24, 1998.
Certain Transactions Involving Members or Former 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 Code and certain 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 until April 24, 1998, is the sole member, and concurrently
with such assignment entered into a Purchase and Sale Agreement with that
entity. Pursuant to the terms of the Purchase and Sale Agreement, HP agreed to
develop and construct the data processing center, and Wachovia Bank agreed to
provide construction financing for the project. Upon completion of the project,
HP agreed to sell the Real Property and the improvements to Wachovia Bank for
an amount equal to (i) all out-of-pocket costs incurred by HP in connection
with (A) the acquisition and ownership of the Real Property, (B) the
development, construction and completion of the improvements, (C) the
-22-
financing obtained from Wachovia Bank, and (D) the negotiation, execution and
delivery of the Purchase and Sale Agreement; (ii) interest on the amount
determined under clause (i) at a rate per annum (computed on a simple interest
basis) equal to the monthly LIBOR index plus 1.85%; and (iii) a fee equal to
$170,000. HP entered into a construction management services contract with
Holder Construction company, an affiliate of HP and Mr. Holder, pursuant to
which Holder Construction Company would oversee and manage the construction of
the improvements in exchange for a fee equal to 3.5% of the cost of the
project. The data processing center is substantially complete, and Wachovia
Bank expects to purchase the completed facility from HP during the second
quarter of 1999. Based on an anticipated total project cost of $59,800,000, it
is estimated that Holder Construction Company's fee will be approximately
$2,093,000.
In April 1997, Wachovia Bank began construction on a new office building
known as Wachovia Park and a parking deck one block from the corporate
headquarters building in Winston-Salem, North Carolina. The building was
completed in April 1998, and contains seven floors of approximately 235,000
total square feet, and is occupied by Wachovia Bank and its affiliates. The
parking deck contains 600 spaces to be utilized by employees of Wachovia Bank
and its affiliates. Holder-Russell Construction Company ("Holder-Russell"), a
joint venture of two construction companies, served as general contractor for
the project. The two companies have worked together frequently in similar joint
ventures, including Wachovia's headquarters building. Robert M. Holder, Jr., a
Director of Wachovia until April 24, 1998, is an officer, director and majority
shareholder of one of these companies, and Herman J. Russell, a Director of
Wachovia until April 24, 1998, 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 negotiated a construction
contract pursuant to which it is estimated that Holder-Russell was paid a fee
of $753,337, or 3% of the total project costs, plus expenses.
Wachovia Bank leases property for a bank branch with drive-in facilities
and office space in an office building in Atlanta, Georgia, from a Georgia
general partnership in which Mr. Holder and members of his family are the
partners. Wachovia Bank, after having the original lease proposal reviewed by
an independent professional consulting service, entered into the lease in July
1991. The lease has been amended several times since 1991 to add additional
space or eliminate unneeded space. Currently, the lease covers approximately
52,000 square feet of space for the branch and office and has a remaining term
of eight years with two five-year extensions. Until March 31, 2000, Wachovia
Bank pays base rent of $117,000 per month and from April 1, 2000 to March 31,
2007, will pay a base rent of $135,000 per month. The base rent during the
extension options is to be negotiated at fair market rates. The lease also
provides that Wachovia Bank will pay its pro rata share of the landlord's
operating expenses for the building to the extent those expenses exceed a
specified threshold amount. During 1998, Wachovia Bank paid approximately
$1,493,000 in rent and operating expenses to Mr. Holder's partnership.
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. 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
W. Hayne Hipp is Chairman, 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
-23-
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 1998 was approximately
$67,856. Employee-owned universal life insurance policies for certain Wachovia
employees also are written by Liberty Life. During 1998, Wachovia paid
approximately $46,999 in premiums for this plan coverage, including
approximately $27,561 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 1998, premiums
for this coverage were approximately $1,366,490.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Wachovia's
Directors and designated 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, 1998), 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, 1998, Wachovia's Directors and designated
executive officers complied with all Section 16(a) filing requirements.
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 2000 Annual Meeting of
Shareholders, shareholder proposals must be received by the Secretary of
Wachovia no later than November 18, 1999.
The Company's bylaws contain procedures that shareholders must follow in
order to present business at an annual meeting of shareholders. A shareholder
may obtain a copy of these procedures from the Company's Secretary. In addition
to other applicable requirements, for business to be properly brought before
the 2000 Annual Meeting, a shareholder must have given timely notice of the
matter to be presented at the meeting in a proper written form to the Secretary
of the Company. To be timely, the Secretary must receive the notice at the
principal offices of the Company not less than 90 nor more than 120 days prior
to the meeting unless the Company gives less than 100 days' notice or prior
public disclosure of the meeting. In that event, the Secretary must receive the
written notice by the close of business on the tenth day following the day on
which the Company gives notice or public disclosure of the meeting.
OTHER MATTERS
The management of Wachovia knows of no other business, which will be
presented for consideration at the meeting. However, if other matters properly
are presented at the meeting, it is the intention of the proxy holders named in
the accompanying Proxy to vote the proxies in accordance with their best
judgment.
/s/ L. M. Baker, Jr.
------------------------------------
L. M. Baker, Jr.,
Chairman, President
and Chief Executive Officer
March 17, 1999
-24-
<PAGE>
EXHIBIT A
FORM OF
WACHOVIA CORPORATION
SENIOR MANAGEMENT INCENTIVE PLAN
1. Purpose.
The purposes of the Wachovia Corporation Senior Management Incentive Plan
(the "Plan") are to motivate and reward a greater degree of excellence and
teamwork among the senior officers of Wachovia Corporation (the "Corporation")
and related corporations by providing incentive compensation award
opportunities; to provide attractive and competitive total cash compensation
opportunities for exceptional corporate, organizational unit and personal
performance; to reinforce the communication and achievement of the mission,
objectives and goals of the Corporation; and to enhance the Corporation's
ability to attract, retain and motivate the highest caliber senior officers.
The purposes of the Plan shall be carried out by payment to eligible
participants of annual incentive cash awards (individually, an "Award" and
collectively, "Awards"), subject to the terms and conditions of the Plan and
the discretion of the Committee.
2. Effective Date and Plan Year.
The Wachovia Corporation Senior Management Incentive Plan was originally
adopted by the Board of Directors of the Corporation (the "Board") effective
January 1, 1987. The Plan was amended and became effective as of April 22, 1994
and was further amended effective as of January 1, 1999. The plan year shall be
the calendar year (the "Plan Year").
3. Administration of the Plan.
Subject to Section 11 herein, the Plan shall be administered by the
Management Resources and Compensation Committee of the Board of Directors, or
such other committee as the Board of Directors may from time to time designate
(the "Committee"). The Committee has full authority and responsibility for the
establishment and administration of the Plan, including, without limitation,
the authority (i) to determine all matters relating to Awards, including
selection of individuals to be granted Awards and the terms, conditions,
restrictions and limitations of Awards; (ii) to establish, amend and rescind
rules and regulations for the administration of the Plan; and (iii) to construe
and interpret the Plan and any agreements related to Awards, to establish and
interpret rules and regulations for administering the Plan and to make all
other determinations deemed necessary or advisable for administering the Plan.
All determinations and decisions of the Committee must be made by a majority of
the members present and shall be final and binding on all persons, except that
no member of the Committee may at any time participate in any decision
affecting the bonus of such member. Should the Committee be unable to render
any decision by reason of a deadlock, the majority vote of the entire Board of
Directors shall govern and be final and binding upon all parties.
4. Eligibility.
An individual shall be eligible to become a participant in the Plan (a
"Participant") who satisfies the following requirements:
(a) The individual is an employee of the Corporation or a related
corporation. For this purpose, an individual shall be considered to be an
"employee" if there exists between the individual and the Corporation or a
related corporation the legal and bona fide relationship of employer and
employee.
(b) The individual is a senior officer of the Corporation or a related
corporation. For the purposes herein, a "senior officer" of the Corporation or
a related corporation shall mean an officer who is deemed to have sufficient
responsibility, ability and potential to make significant contributions to the
success of the Corporation or a related corporation.
(c) The individual is recommended each year by the Chief Executive
Officer of the Corporation (the "Chief Executive Officer") and considered and
approved by the Committee as a Participant in the Plan.
5. Participation.
Prior to the beginning of each Plan Year, the Chief Executive Officer
shall recommend to the Committee each senior officer of the Corporation or a
related corporation who is eligible to become a Participant in the Plan with
respect to such Plan Year. Participants shall be approved by the Committee in
its sole and absolute discretion. In the event of the promotion of an employee
or the hiring of a new employee during the Plan Year, the Committee, upon the
recommendation of the Chief Executive Officer, may approve the entry of a
Participant into the Plan during the Plan Year. In such case, the Award
determined pursuant to the terms of the Plan with respect to such Participant
shall be multiplied by a fraction, the numerator of which is the number of full
calendar months during the Plan Year in which he is a Participant and the
denominator of which is twelve. Participation in the Plan shall be subject to
the provisions of the Plan and such other terms and conditions as the Committee
shall provide. Notwithstanding any provision in Section 5 to the contrary, the
Committee shall have authority to modify the participation provisions contained
herein in a manner consistent with Section 162(m) of the Internal Revenue Code
of 1986, as amended (the "Code"), or the regulations thereunder.
6. Performance Criteria and Evaluation.
(a) Performance Goals. The performance goals upon which Awards shall be
made shall be based upon business criteria applicable to the Corporation, the
business unit to which the Participant is assigned and the Participant
individually. The corporate business criteria upon which such Awards shall be
based shall include the following earnings factors, weighted as indicated: net
income per diluted share (50%); return on assets (net income) (25%); and return
on equity (net income) (25%).
The three earnings measures will be combined to produce a composite
corporate performance evaluation percentage factor (the "Composite Percentage
Factor") to be used along with the individual performance evaluation percentage
factor (the "Individual Percentage Factor") in calculating individual awards.
(b) Individual Performance Criteria and Evaluation. A Participant's
Individual Percentage Factor will be based on a composite rating of (i)
relevant performance of the organizational unit to which the Participant is
assigned (the "Unit") as compared to goals for the Plan Year and (ii)
quantitative and qualitative elements of personal performance of the
Participant in relation to goals and expectations established for the Plan
Year. Each of these two components will have a 50 percent weighing in
determining a Participant's Individual Percentage Factor.
A-2
(i) The evaluation of the performance of the Unit will be based
primarily on the degree of success in achieving the Unit's annual profit
and business plan. The assessment will include, as applicable to the Unit,
such factors as business development, expense management, earnings growth,
credit quality, investment results, audit findings, affirmative action
goals, staff development, operational efficiency and strategic planning.
For purposes of this evaluation, the Unit will be the assigned
responsibility area of the Participant. In the case of Participants in
administrative and support functions, the evaluation will include the
performance of line business units whose results can be influenced
significantly by such persons.
(ii) The evaluation of a Participant's personal performance will be
based on the Participant's success in meeting expectations of subjective,
qualitative and quantitative goals for the Plan Year. A Participant's
personal performance evaluation will include an assessment of performance
relative to the Corporation's standards in such areas as leadership,
initiative, professional skills, teamwork, problem solving, personal
behavior and advancement and achievement of the Corporation's mission and
objectives. The following criteria shall apply in measuring a
Participant's personal performance:
(A) Performance Level IV -- Superior: Participants performing at
this level would be rated in the range of 90 percent to 100 percent.
With little guidance, a Participant at this level consistently performs
in the superior manner that always exceeds normal requirements and
expectations. The Participant's performance clearly is a model of
excellence.
(B) Performance Level III -- Exceptional: Participants performing
at this level would be rated in the range of 75 percent to 89 percent.
A Participant at this level consistently performs in an exceptional
manner in which requirements and expectations are always accomplished.
The Participant frequently accomplishes more than is expected.
(C) Performance Level II -- Satisfactory: Participants performing
at this level would be rated in the range of 50 percent to 74 percent.
The Participant performs in an overall satisfactory manner, generally
accomplishing requirements and expectations. The Participant does not
always perform in an exceptional manner and needs guidance with certain
tasks.
(D) Performance Level I -- Meets Minimum Level: No Award will be
paid to Participants at this performance level. The Participant
generally meets minimum levels of performance but sometimes has
difficulty in achieving requirements and expectations. The Participant
is capable of satisfactory performance with additional effort,
guidance, training and experience.
7. Recommendation and Determination of Awards.
In December of each Plan Year, the responsible managers and executives
will evaluate each Participant's performance in meeting Unit and personal goals
and objectives for the Plan Year. A recommended composite individual
performance evaluation factor for each Participant with appropriate supporting
documentation will be submitted by Division Executives of the Corporation to
the Personnel Director of the Corporation for a review of completeness and
compliance with the Plan. The recommended composite individual performance
evaluation percentage factor to be used in calculating Awards for Participants
shall be subject to review and approval by the Chief Executive Officer and the
Committee. The composite corporate performance evaluation percentage factor
will be calculated using net income per diluted share, return on assets and
return on equity as plotted in the benchmark table. The resulting percentage
representing the composite corporate performance evaluation factor will be
multiplied by the composite individual performance evaluation percentage factor
and the Participant's base salary paid during the Plan Year to determine the
amount of each Participant's Award. Amounts that would otherwise have been
payable to a
A-3
Participant if the composite corporate performance evaluation factor had been
higher or if the Participant had received a higher performance on the
individual performance evaluation percentage factor shall not be reallocated to
other Participants.
8. Payment of Awards.
Unless otherwise determined by the Committee, the Committee will
determine the Participants entitled to receive Awards and, subject to the terms
of Section 11(b) herein, the amount of such Awards. The Committee will make
such determinations in January following the end of the Plan Year, and the
Awards for a Plan Year shall be paid by the Corporation to the Participant (or
his beneficiary) on February 1 following the end of the Plan Year. Payment of
Awards shall be made by a deposit to the Corporation's payroll system, with a
written statement of the amount of each Award provided to each Participant. The
amount of each Award shall be rounded to the nearest $100.
9. Termination of Employment.
(a) Termination Due to Death, Disability or Retirement. If termination of
employment occurs during a Plan Year as the result of death, disability or
approved retirement, a proportional award shall be paid to the Participant (or
his estate in the event of death) for the period of active employment during
the Plan Year. In such event, the Award determined pursuant to the terms of the
Plan with respect to such Participant shall be multiplied by a fraction, the
numerator of which is the number of full calendar months during the Plan Year
in which the employee is a Participant and the denominator of which is twelve,
and such Award shall be paid in accordance with Section 8 herein. In the event
of a Participant's death, any Award payable under the Plan shall be paid to the
Participant's estate.
(b) Other Termination. Except to the extent otherwise provided in Section
10, if termination occurs during the Plan Year for any reason other than death,
disability or approved retirement, no Award shall be paid.
(c) Termination After End of Plan Year. If termination occurs between the
end of the Plan Year and the date of payment of an Award, the full amount of
the Award shall be paid in accordance with Section 8 herein unless the
termination was the direct result of dishonesty or misconduct.
(d) Certain Definitions. For the purposes herein:
(i) "Disability" shall mean the inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death, or
which has lasted or can be expected to last for a continuous period of not
less than twelve months.
(ii) "Approved retirement" shall mean early or normal retirement as
provided under the Retirement Incentive Plan of Wachovia Corporation or
any successor plan thereto applicable to a Participant or the retirement
date under a contract, if any, between a Participant and the Corporation
or a related corporation providing for the Participant's retirement from
the employment of the Corporation or a related corporation prior to the
normal retirement date.
10. Change of Control.
(a) In the event of a Change of Control (as defined in Section 10(b)
herein), all Awards made pursuant to the Plan shall be deemed earned and shall
become immediately due and payable for the full Plan Year (notwithstanding the
date of the Change of Control event during the Plan Year), subject to the
following: (i) the corporate Composite Percentage Factor shall be based on
corporate performance on an annualized basis as of the date of the Change
A-4
of Control, and (ii) each Participant shall receive the highest Award that may
be granted based on the individual Participant's job classification. Awards
that become due and payable upon a Change of Control shall be deemed earned,
due and payable regardless of whether the Participant continues service in the
same position following the Change of Control, has a change in position or
responsibility, or is terminated from employment with the Corporation or a
related corporation.
(b) A "Change of Control" shall be deemed to have occurred on the
earliest of the following dates:
(i) The date any entity or person shall have become the beneficial
owner of, or shall have obtained voting control over, 30 percent or more of
the outstanding Common Stock of the Corporation;
(ii) The date the shareholders of the Corporation approve a definitive
agreement (A) to merge or consolidate the Corporation with or into another
corporation, in which the Corporation is not the continuing or surviving
corporation or pursuant to which any shares of Common Stock of the
Corporation would be converted into cash, securities or other property of
another corporation, other than a merger of the Corporation in which
holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock of the surviving corporation
immediately after the merger as immediately before, or (B) to sell or
otherwise dispose of substantially all the assets of the Corporation; or
(iii) The date there shall have been a change in a majority of the
Board of Directors of the Corporation within a twelve-month period unless
the nomination for election by the Corporation's shareholders of each new
director was approved by the vote of two-thirds of the directors then still
in office who were in office at the beginning of the twelve-month period.
(For the purposes herein, the term "person" shall mean any individual,
corporation, partnership, group, association or other person, as such term is
defined in Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), other than the Corporation, a
subsidiary of the Corporation or any employee benefit plan(s) sponsored or
maintained by the Corporation or any subsidiary thereof, and the term
"beneficial owner" shall have the meaning given the term in Rule 13d-3 under
the Exchange Act.)
(c) Notwithstanding the foregoing, in the event of a merger, share
exchange, reorganization or other business combination affecting the
Corporation or a related corporation, the Committee may, in its sole and
absolute discretion, determine that any or all Awards shall not be paid, if the
Board of Directors or the surviving or acquiring corporation, as the case may
be, shall have taken such action, including but not limited to the making of
substitute Awards, as in the opinion of the Committee is equitable or
appropriate to protect the rights and interests of participants in the Plan.
11. Performance-Based Compensation. To the extent to which it is necessary to
comply with Section 162(m) of the Code and the regulations thereunder, the
following provisions shall apply:
(a) Compliance with Code Section 162(m). It is the intent of the
Corporation that Awards conferred under the Plan to Covered Employees, as such
term is defined in Section 19(e) herein, shall comply with the qualified
performance-based compensation exception to employer compensation deductions
set forth in Section 162(m) of the Code and related regulations, and the Plan
shall be construed in favor of meeting the requirements of Section 162(m) of
the Code and the regulations thereunder to the extent practicable.
(b) The maximum amount of an Award that may be payable to any participant
for any Plan Year may not exceed the lesser of (i) 250 percent of the
participant's base salary for the Plan Year or (ii) $2,500,000.
A-5
(c) Committee Authority and Composition. The Committee shall be
authorized to establish performance goals, certify satisfaction of performance
goals and other material terms and to take such other action as may be
necessary in order to qualify for the performance-based compensation exception.
The Committee shall be comprised of two or more outside directors (as such term
is defined in Section 162(m) of the Code and the regulations thereunder), or as
may otherwise be permitted or required under Section 162(m) and the related
regulations. Without limiting the foregoing, the committee authorized to take
such actions may be comprised of a subcommittee of the Committee or other
directors who qualify as outside directors (as such term is defined in Section
162(m) of the Code and the regulations thereunder), and the actions taken by
such subcommittee or other group of outside directors shall be effective as the
action of the Committee to the extent permitted under the Plan and Section
162(m) of the Code and the regulations thereunder.
(d) Committee Discretion. The Committee shall not have discretion to
increase the amount of an Award payable to an employee under the Plan over the
amount that is determined in accordance with Sections 6, 7 and 11(b) herein.
The Committee shall, in any event, have the discretion to reduce or eliminate
the amount of an Award that would otherwise be payable to any Participant.
(e) Shareholder Approval. The material terms of the performance goal or
goals pursuant to which Awards are to be made shall be disclosed to, and
subject to the approval of, the shareholders of the Corporation. Material terms
of a performance goal or goals, the targets of which may be changed by the
Committee, shall be disclosed to, and subject to the reapproval of, the
shareholders of the Corporation upon a change of the material terms of a
performance goal or goals by the Committee or as may be otherwise required by
Section 162(m) of the Code or the regulations thereunder.
12. Nonassignability of Incentive Awards.
The right to receive payment of an Award shall not be assignable or
transferrable (including by pledge or hypothecation) other than by will or the
laws of intestate succession.
13. No Trust Fund; Unsecured Interest.
A Participant shall have no interest in any fund or specified asset of
the Corporation. No trust fund shall be created in connection with the Plan or
any Award, and there shall be no required funding of amounts which may become
payable under the Plan. Any amounts which are or may be set aside under the
provisions of this Plan shall continue for all purposes to be a part of the
general assets of the Corporation, and no person or entity other than the
Corporation shall, by virtue of the provisions of this Plan, have any interest
in or right to such assets. No right to receive payments from the Corporation
pursuant to this Plan shall be greater than the right of any unsecured creditor
of the Corporation.
14. No Right or Obligation of Continued Employment.
Nothing contained in the Plan shall require the Corporation or a related
corporation to continue to employ a Participant, nor shall the Participant be
required to remain in the employment of the Corporation or a related
corporation.
15. Withholding.
The Corporation shall withhold all required local, state and federal
taxes from any amount of an Award.
A-6
16. Retirement Plans.
In no event shall any amounts accrued or payable under this Plan be
treated as compensation for the purpose of determining the amount of
contributions or benefits to which a Participant shall be entitled under any
retirement plan to which the Corporation or a related corporation may be a
party.
17. Dilution or Other Adjustments.
If there is any change in the Corporation because of a merger, share
exchange, reorganization or other business combinations affecting the
Corporation or a related corporation, or if extraordinary items of income or
expense of the Corporation or a related corporation occur, the Committee may
make such adjustments to any provisions of this Plan, including but not limited
to adjustments to determinations of performance and Awards, as the Committee
deems desirable to prevent the dilution or enlargement of rights granted
hereunder.
18. Amendment and Termination of the Plan.
The Plan may be amended or terminated at any time by the Board or by the
Committee as delegated by the Board, provided that such termination or
amendment shall not, without the consent of the Participant, affect such
Participant's rights with respect to Awards previously awarded to him. With the
consent of the Participant affected, the Board, or by delegation of authority
by the Board, the Committee, may amend outstanding Awards in a manner not
inconsistent with the Plan.
19. Certain Definitions.
For purposes of the Plan, the following terms shall have the meaning
indicated:
(a) "Related corporation" means any parent, subsidiary or predecessor of
the Corporation.
(b) "Parent" or "parent corporation" shall mean any corporation (other
than the Corporation) in an unbroken chain of corporations ending with the
Corporation if each corporation other than the Corporation owns stock
possessing 50 percent or more of the total combined voting power of all classes
of stock in another corporation in the chain.
(c) "Subsidiary" or "subsidiary corporation" means any corporation (other
than the Corporation) in an unbroken chain of corporations beginning with the
Corporation if each corporation other than the last corporation in the unbroken
chain owns stock possessing 50 percent or more of the total combined voting
power of all classes of stock in another corporation in the chain.
(d) "Predecessor" or "predecessor corporation" means a corporation which
was a party to a transaction described in Section 425(a) of the Code (or which
would be so described if a substitution or assumption under that Section had
occurred) with the Corporation, or a corporation which is a parent or
subsidiary of the Corporation, or a predecessor of any such corporation.
(e) "Covered Employee" shall mean any individual who, on the last day of
the taxable year, is (i) the Chief Executive Officer or is acting in such
capacity or (ii) among the four highest compensated officers (other than the
Chief Executive Officer), as determined in accordance with the executive
compensation disclosure rules under the Securities Exchange Act of 1934, as
amended; provided, however, that if such term is defined otherwise in Section
A-7
162(m) of the Code or the regulations thereunder, then it shall have the
meaning set forth in Section 162(m) or the related regulations.
20. Binding on Successors.
The obligations of the Corporation under the Plan shall be binding upon
any organization which shall succeed to all or substantially all of the assets
of the Corporation, and the term "Corporation," whenever used in the Plan,
shall mean and include any such organization after the succession.
21. Applicable Law.
The Plan shall be governed by and construed in accordance with the laws
of the State of North Carolina.
IN WITNESS WHEREOF, the Wachovia Corporation Senior Management Incentive
Plan, as amended is, by the authority of the Board of Directors of the
Corporation, executed effective as of January 1, 1999.
WACHOVIA CORPORATION
Attest:
By:
-----------------------------------
Secretary Chief Executive Officer
[Corporate Seal]
A-8
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
(Wachovia logo appears here)
<PAGE>
***********************************APPENDICES***********************************
[ X ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- --------------------------------------------------------------------------------
WACHOVIA CORPORATION
- --------------------------------------------------------------------------------
Common Stock
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 and date this Proxy. | Date
- --------------------------------------------------------------------------------
- -------Participant sign here----------------------------------------------------
--------
|
|
|
|
1. Election of Directors to serve for a For All With- For All
three-year term: Nominees hold Except
--- --- ---
L.M. Baker, Jr. | | | | | |
Thomas K. Hearn, Jr. | | | | | |
Elizabeth Valk Long --- --- ---
John C. Whitaker, Jr.
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).
For Against Abstain
2. To ratify the appointment of Ernst & --- --- ---
Young LLP as independent auditors | | | | | |
of the Company for the current year. | | | | | |
--- --- ---
For Against Abstain
3. To approve the performance criteria --- --- ---
under the Wachovia Corporation Senior | | | | | |
Management Incentive Plan to preserve | | | | | |
the Company's tax deduction for certain --- --- ---
plan awards.
4. In their discretion, the proxies are authorized to vote on such other
business as may properly come before the meeting.
DETACH CARD DETACH CARD
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 your 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
will be voted. Then sign the card, detach it and return it in the
enclosed postage-paid envelope.
Your vote must be received before the Annual Meeting of Shareholders,
April 23, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Wachovia Corporation
<PAGE>
WACHOVIA CORPORATION
Proxy for the Annual Meeting of Shareholders
This Proxy is Solicited on Behalf of the Board of Directors of the Company
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.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE, SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------ -----------------------------------
- ------------------------------------ -----------------------------------
- ------------------------------------ -----------------------------------
<PAGE>
[ X ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- --------------------------------------------------------------------------------
WACHOVIA CORPORATION
- --------------------------------------------------------------------------------
Retirement Savings and Profit-Sharing Plan
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 and date this Proxy. | Date
- --------------------------------------------------------------------------------
- -------Participant sign here----------------------------------------------------
--------
|
|
|
|
1. Election of Directors to serve for a For All With- For All
three-year term: Nominees hold Except
--- --- ---
L.M. Baker, Jr. | | | | | |
Thomas K. Hearn, Jr. | | | | | |
Elizabeth Valk Long --- --- ---
John C. Whitaker, Jr.
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).
For Against Abstain
2. To ratify the appointment of Ernst & --- --- ---
Young LLP as independent auditors | | | | | |
of the Company for the current year. | | | | | |
--- --- ---
For Against Abstain
3. To approve the performance criteria --- --- ---
under the Wachovia Corporation Senior | | | | | |
Management Incentive Plan to preserve | | | | | |
the Company's tax deduction for certain --- --- ---
plan awards.
4. In their discretion, the proxies are authorized to vote on such other
business as may properly come before the meeting.
DETACH CARD DETACH CARD
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 your 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
will be voted. Then sign the card, detach it and return it in the
enclosed postage-paid envelope.
Your vote must be received before the Annual Meeting of Shareholders,
April 23, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Wachovia Corporation
<PAGE>
WACHOVIA CORPORATION
Proxy for the Annual Meeting of Shareholders
This Proxy is Solicited on Behalf of the Board of Directors of the Company
The undersigned hereby appoints Kenneth W. McAllister, Senior Executive Vice
President and General Counsel, and William M. Watson, Jr., 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 23, 1999, 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, 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.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------ -----------------------------------
- ------------------------------------ -----------------------------------
- ------------------------------------ -----------------------------------
