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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
(check mark) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 1-10000
FIRST UNION CORPORATION
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0898180
(State of incorporation) (I.R.S. Employer Identification No.)
ONE FIRST UNION CENTER
CHARLOTTE, NORTH CAROLINA 28288-0013
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (704) 374-6565
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EXCHANGE ON WHICH REGISTERED
Common Stock, $3.33 1/3 par value (including rights New York Stock Exchange
attached thereto)
Series 1990 Cumulative Perpetual Adjustable Rate New York Stock Exchange
Preferred Stock, no-par value
Securities registered pursuant to Section 12(g) of the Act:
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes (check mark) No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
As of January 31, 1994, there were 170,366,615 shares of the registrant's
Common Stock outstanding, $3.33 1/2 par value per share, and based on the last
reported sale price of $43.50 per share on the New York Stock Exchange on such
date, the aggregate market value of the registrant's Common Stock held by those
persons deemed by the registrant to be nonaffiliates was approximately $7.3
billion.
DOCUMENTS INCORPORATED BY REFERENCE IN FORM 10-K
INCORPORATED DOCUMENTS WHERE INCORPORATED IN FORM 10-K
1. Certain portions of the Corporation's Annual Report to Part I -- Items 1 and 2; Part II -- Items 5, 6, 7
Stockholders for year ended December 31, 1993 (Annual and 8.
Report).
2. Certain portions of the Corporation's Proxy Statement Part III -- Items 10, 11, 12 and 13.
for Annual Meeting of Stockholders to be held on April
19, 1994 (Proxy Statement).
PART I
ITEM 1. BUSINESS.
GENERAL
First Union Corporation (the Corporation or FUNC) was incorporated under
the laws of North Carolina in 1967 and is registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended (the BHCA). In 1968, the
Corporation became the sole stockholder of First Union National Bank of North
Carolina (FUNB-NC ) and First Union Mortgage Corporation, a mortgage banking
firm acquired by FUNB-NC in 1964.
In addition to FUNB-NC, the Corporation also operates banking subsidiaries
in Florida (since November 1985), South Carolina (since March 1986), Georgia
(since March 1986), Tennessee (since December 1987), Maryland (since December
1992), Virginia (since December 1992) and Washington, D.C. (since December
1992). In addition to providing a wide range of commercial and retail banking
and trust services through its banking subsidiaries, the Corporation also
provides various other financial services, including mortgage banking, home
equity lending, consumer lending, asset-based financing, insurance and
securities brokerage services, through other subsidiaries.
The Corporation's principal executive offices are located at One First
Union Center, Charlotte, North Carolina 28288-0013 (telephone number
(704)374-6565).
Since the 1985 Supreme Court decision upholding regional interstate banking
legislation, the Corporation has concentrated its efforts on building a large
regional banking organization in the southeastern United States. Since November
1985, the Corporation has completed 38 banking related acquisitions, including
the more significant acquisitions set forth in the following table, in addition
to the currently pending acquisitions set forth in such table.
CONSIDERATION/
ASSETS/ ACCOUNTING
NAME (1) HEADQUARTERS DEPOSITS (2) TREATMENT COMPLETION DATE
Atlantic Bancorporation.............................. Florida $3.8 billion common stock/ November 1985
pooling
Northwestern Financial Corporation................... North Carolina 3.0 billion common stock/ December 1985
pooling
Southern Bancorporation, Inc......................... South Carolina 1.1 billion cash and notes/ March 1986
purchase
First Bankers Corporation of Florida................. Florida 1.3 billion cash and notes/ May 1986
purchase
First Railroad & Banking Company of Georgia.......... Georgia 3.7 billion common stock/ November 1986
pooling
Florida Commercial Banks, Inc........................ Florida 1.0 billion cash/purchase March 1988
Florida National Banks of Florida, Inc.
(Florida National)................................. Florida 7.9 billion cash and preferred January 1990
stock/purchase
Southeast banks...................................... Florida 9.9 billion cash/notes September 1991
and preferred
stock/purchase
RTC acquisitions..................................... Florida 4.7 billion cash/purchase 1991-1992
PSFS Thrift Holding Company.......................... Florida 1.2 billion cash/purchase December 1992
South Carolina Federal Corporation................... South Carolina .8 billion common stock/ January 1993
pooling
DFSoutheastern, Inc.................................. Georgia 2.7 billion common stock/ January 1993
pooling
Dominion Bankshares Corporation...................... Virginia 8.8 billion common and March 1993
preferred
stock/pooling
Georgia Federal Bank, FSB............................ Georgia 4.3 billion cash/purchase June 1993
First American Metro Corp............................ Virginia 4.6 billion cash/purchase June 1993
Lieber & Company (Lieber)(2)......................... New York 3.3 billion common stock/ 1994
pooling
BancFlorida Financial Corporation
(BancFlorida)(3)................................... Flordia $1.5 billion common stock/ 1994
purchase
1
(1) Additional information relating to certain of the foregoing acquisitions is
set forth in the Annual Report in Note 2 on pages 59 through 60.
(2) The dollar amounts indicated represent assets of the related organization as
of the last reporting period prior to acquisition, except for (i) the dollar
amount relating to RTC acquisitions, which represents deposits acquired from
the Resolution Trust Corporation, (ii) the dollar amount relating to
Southeast banks, which represents assets of the two banking subsidiaries of
Southeast Banking Corporation acquired from the Federal Deposit Insurance
Corporation (the FDIC), and (iii) the dollar amount relating to the pending
acquisition of Lieber, which represents assets under management by Lieber as
of December 31, 1993. Since such assets are not owned by Lieber, they will
not be reflected on the Corporation's balance sheet upon consummation of the
acquisition. Lieber serves as investment adviser to the Evergreen family of
mutual funds. The acquisition agreement provides for issuance of
approximately 3.1 million shares of Common Stock to acquire Lieber.
(3) On January 17, 1994, FUNC entered into an agreement to acquire BancFlorida,
which provides for the exchange of FUNC Common Stock for each share of
BancFlorida common stock and BancFlorida convertible preferred stock. The
exchange ratio will be used upon the average closing price of FUNC Common
Stock prior to consummation of the acquisition. Based on the closing price
of FUNC Common Stock on March 1, 1994 ($40.50), approximately 4.2 million
shares of FUNC Common Stock would be issued in connection with the
acquisition. FUNC currently expects to account for the acquisition as a
purchase and to purchase in the open market up to one-half of the shares of
FUNC Common Stock issued in the acquisition, depending on market conditions
and other factors.
Interstate banking legislation has greatly impacted the Corporation and the
banking industry in general. North Carolina's regional interstate banking bill
includes the states of Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana,
Maryland, Mississippi, South Carolina, Tennessee, Texas, Virginia and West
Virginia and Washington, D.C., each of which has passed interstate banking
legislation, either on a regional or national basis. In addition, various other
states not named in the North Carolina legislation have also adopted interstate
banking legislation, which, subject to certain conditions and limitations, would
permit the Corporation to acquire banks in such states.
The Corporation is continually evaluating acquisition opportunities and
frequently conducts due diligence activities in connection with possible
acquisitions. As a result, acquisition discussions and, in some cases,
negotiations frequently take place and future acquisitions involving cash, debt
or equity securities can be expected. Acquisitions typically involve the payment
of a premium over book and market values, and therefore some dilution of the
Corporation's book value and net income per common share may occur in connection
with any future transactions.
Additional information relating to the business of the Corporation and its
subsidiaries is set forth on pages 6 through 8 in the Annual Report and
incorporated herein by reference. Information relating to the Corporation only
is set forth in Note 16 on pages 77 through 80 in the Annual Report and
incorporated herein by reference.
COMPETITION
The Corporation's subsidiaries face substantial competition in their
operations from banking and nonbanking institutions, including savings and loan
associations, credit unions, money market funds and other investment vehicles,
brokerage firms, insurance companies, leasing companies, credit card issuers,
mortgage banking companies, finance companies and other types of financial
institutions.
Based on the volume of permanent mortgages serviced on September 30, 1993,
the Corporation's mortgage banking subsidiary, First Union Mortgage Corporation,
was the 11th largest mortgage banking company in the United States.
SUPERVISION AND REGULATION
GENERAL
As a bank holding company, the Corporation is subject to regulation under
the BHCA and its examination and reporting requirements. Under the BHCA, bank
holding companies may not directly or indirectly acquire the ownership or
control of more than five percent of the voting shares or substantially all of
the assets of any company, including a bank, without the prior approval of the
Board of Governors of the Federal Reserve System (the Federal Reserve Board). In
addition, bank holding companies are generally prohibited under the BHCA from
engaging in nonbanking activities, subject to certain exceptions.
2
The earnings of the Corporation's subsidiaries, and therefore the earnings
of the Corporation, are affected by general economic conditions, management
policies and the legislative and governmental actions of various regulatory
authorities, including the Federal Reserve Board and the Comptroller of the
Currency (the Comptroller). In addition, there are numerous governmental
requirements and regulations which affect the activities of the Corporation and
its subsidiaries.
PAYMENT OF DIVIDENDS
The Corporation is a legal entity separate and distinct from its banking
and other subsidiaries. A major portion of the revenues of the Corporation
result from amounts paid as dividends to the Corporation by its national bank
subsidiaries. The Corporation's banking subsidiaries are subject to legal
limitations on the amount of dividends they can pay. The prior approval of the
Comptroller is required if the total of all dividends declared by a national
bank in any calendar year will exceed the sum of such bank's net profits for
that year and its retained net profits for the preceding two calendar years,
less any required transfers to surplus. Federal law also prohibits national
banks from paying dividends which would be greater than the bank's undivided
profits after deducting statutory bad debt in excess of the bank's allowance for
loan losses.
Under the foregoing dividend restrictions and certain restrictions
applicable to certain of the Corporation's nonbanking subsidiaries, as of
December 31, 1993, the Corporation's subsidiaries, without obtaining affirmative
governmental approvals, could pay aggregate dividends of $510 million to FUNC
during 1994. During 1993, the Corporation's subsidiaries paid $407 million in
cash dividends to FUNC.
In addition, both the Corporation and its national bank subsidiaries are
subject to various general regulatory policies and requirements relating to the
payment of dividends, including requirements to maintain adequate capital above
regulatory minimums. The appropriate federal regulatory authority is authorized
to determine under certain circumstances relating to the financial condition of
a national bank or bank holding company that the payment of dividends would be
an unsafe or unsound practice and to prohibit payment thereof. The Comptroller
has indicated that paying dividends that deplete a national bank's capital base
to an inadequate level would be an unsound and unsafe banking practice. The
Comptroller and the Federal Reserve Board have each indicated that banking
organizations should generally pay dividends only out of current operating
earnings.
BORROWINGS BY THE CORPORATION
There are also various legal restrictions on the extent to which the
Corporation and its nonbank subsidiaries can borrow or otherwise obtain credit
from its bank subsidiaries. In general, these restrictions require that any such
extensions of credit must be secured by designated amounts of specified
collateral and are limited, as to any one of the Corporation or such nonbank
subsidiaries, to ten percent of the lending bank's capital stock and surplus,
and as to the Corporation and all such nonbank subsidiaries in the aggregate, to
20 percent of such lending bank's capital stock and surplus.
CAPITAL
Under the risk-based capital requirements for bank holding companies, the
minimum requirement for the ratio of capital to risk-weighted assets (including
certain off-balance-sheet activities, such as standby letters of credit) is
eight percent. At least half of the total capital is to be composed of common
equity, retained earnings and qualifying perpetual preferred stock, less
goodwill (tier 1 capital and together with tier 2 capital total capital). The
remainder may consist of subordinated debt, non-qualifying preferred stock and a
limited amount of the loan loss allowance (tier 2 capital). At December 31,
1993, the Corporation's tier 1 capital and total capital ratios were 9.14
percent and 14.64 percent, respectively.
In addition, the Federal Reserve Board has established minimum leverage
ratio requirements for bank holding companies. These requirements provide for a
minimum leverage ratio of tier 1 capital to adjusted average quarterly assets
(leverage ratio) equal to three percent for bank holding companies that meet
certain specified criteria, including having the highest regulatory rating. All
other bank holding companies will generally be required to maintain a leverage
ratio of from at least four to five percent. The Corporation's leverage ratio at
December 31, 1993, was 6.13 percent. The requirements also provide that bank
holding companies experiencing internal growth or making acquisitions will be
expected to maintain strong capital positions substantially above the minimum
supervisory levels without significant reliance on intangible assets.
Furthermore, the requirements indicate that the Federal Reserve Board will
continue to consider a tangible tier 1 leverage ratio (deducting all
intangibles) in evaluating proposals for expansion or new activity. The Federal
Reserve Board has not advised the Corporation of any specific minimum tier 1
leverage ratio applicable to it.
3
Each of the Corporation's subsidiary national banks is subject to similar
capital requirements adopted by the Comptroller. As of December 31, 1993, the
capital ratios of the bank subsidiaries of the Corporation, FUNB-NC, First Union
National Bank of South Carolina (FUNB-SC), First Union National Bank of Georgia
(FUNB-GA), First Union National Bank of Florida (FUNB-FL), First Union National
Bank of Tennessee (FUNB-TN ), First Union National Bank of Maryland (FUNB-MD),
First Union National Bank of Virginia (FUNB-VA) and First Union National Bank of
Washington, D.C. (FUNB-DC), were as follows:
REGULATORY FUNB- FUNB- FUNB- FUNB- FUNB- FUNB- FUNB- FUNB-
MINIMUM NC SC GA FL TN MD VA DC
Tier 1 capital ratio................. 4% 8.24 7.55 9.58 9.13 12.43 15.78 10.77 14.23
Total capital ratio.................. 8 11.35 11.82 12.62 10.83 13.69 17.07 13.08 15.52
Leverage ratio....................... 3-5% 5.52 5.56 5.67 5.79 8.05 9.04 6.89 6.06
Banking regulators continue to indicate their desire to raise capital
requirements applicable to banking organizations, including a proposal to add an
interest rate risk component to risk-based capital requirements.
FIRREA; SUPPORT OF SUBSIDIARY BANKS
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989
(FIRREA), among other things, imposes liability on an institution the deposits
of which are insured by the FDIC, such as the Corporation's subsidiary national
banks, for certain potential obligations to the FDIC incurred in connection with
other FDIC-insured institutions under common control with such institution.
Under the National Bank Act, if the capital stock of a national bank is
impaired by losses or otherwise, the Comptroller is authorized to require
payment of the deficiency by assessment upon the bank's stockholders, pro rata,
and to the extent necessary, if any such assessment is not paid by any
stockholder after three months notice, to sell the stock of such stockholder to
make good the deficiency. Under Federal Reserve Board policy, the Corporation is
expected to act as a source of financial strength to each of its subsidiary
banks and to commit resources to support each of such subsidiaries. This support
may be required at times when, absent such Federal Reserve Board policy, the
Corporation may not find itself able to provide it.
Any capital loans by a bank holding company to any of its subsidiary banks
are subordinate in right of payment to deposits and to certain other
indebtedness of such subsidiary banks. In the event of a bank holding company's
bankruptcy, any commitment by the bank holding company to a federal bank
regulatory agency to maintain the capital of a subsidiary bank will be assumed
by the bankruptcy trustee and entitled to a priority of payment.
FDICIA
In December 1991, the Federal Deposit Insurance Corporation Improvement Act
of 1991 (FDICIA) was enacted, which substantially revises the bank regulatory
and funding provisions of the Federal Deposit Insurance Act and makes revisions
to several other federal banking statutes.
Among other things, FDICIA requires the federal banking agencies to take
prompt corrective action in respect of depository institutions that do not meet
minimum capital requirements. FDICIA establishes five capital tiers: well
capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized. A depository institution's
capital tier will depend upon where its capital levels compare to various
relevant capital measures and certain other factors, as established by
regulation.
The federal regulatory authorities have adopted regulations establishing
relevant capital measures and relevant capital levels. The relevant capital
measures are the total capital ratio, tier 1 capital ratio and the leverage
ratio. Under the regulations, a bank will be: (i) well capitalized if it has a
total capital ratio of ten percent or greater, a tier 1 capital ratio of six
percent or greater and a leverage ratio of five percent or greater and is not
subject to any order or written directive by any such regulatory authority to
meet and maintain a specific capital level for any capital measure; (ii)
adequately capitalized if it has a total capital ratio of eight percent or
greater, a tier 1 capital ratio of four percent or greater and a leverage ratio
of four percent or greater (three percent in certain circumstances) and is not
well capitalized; (iii) undercapitalized if it has a total capital ratio of less
than eight percent, a tier 1 capital ratio of less than four percent or a
leverage ratio of less than four percent (three percent in certain
circumstances); (iv) significantly undercapitalized if it has a total capital
ratio of less than six percent, a tier 1 capital ratio of less than three
percent or a leverage ratio of less than three percent; and (v) critically
undercapitalized if its tangible equity is equal to or less than two percent of
average quarterly tangible assets.
4
As of December 31, 1993, all of the Corporation's subsidiary banks had capital
levels that qualify them as being well capitalized under such regulations.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to growth
limitations and are required to submit a capital restoration plan. The federal
banking agencies may not accept a capital plan without determining, among other
things, that the plan is based on realistic assumptions and is likely to succeed
in restoring the depository institution's capital. In addition, for a capital
restoration plan to be acceptable, the depository institution's parent holding
company must guarantee that the institution will comply with such capital
restoration plan. The aggregate liability of the parent holding company is
limited to the lesser of (i) an amount equal to five percent of the depository
institution's total assets at the time it became undercapitalized, and (ii) the
amount which is necessary (or would have been necessary) to bring the
institution into compliance with all capital standards applicable with respect
to such institution as of the time it fails to comply with the plan. If a
depository institution fails to submit an acceptable plan, it is treated as if
it is significantly undercapitalized.
Significantly undercapitalized depository institutions may be subject to a
number of requirements and restrictions, including orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce total
assets, and cessation of receipt of deposits from correspondent banks.
Critically undercapitalized institutions are subject to the appointment of a
receiver or conservator.
FDICIA directs that each federal banking agency prescribe standards for
depository institutions and depository institution holding companies relating to
internal controls, information systems, internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth,
compensation, a maximum ratio of classified assets to capital, minimum earnings
sufficient to absorb losses, a minimum ratio of market value to book value for
publicly traded shares and such other standards as the agency deems appropriate.
The ultimate effect of these standards cannot be ascertained until final
regulations are adopted.
FDICIA also contains a variety of other provisions that may affect the
operations of the Corporation, including new reporting requirements, regulatory
standards for real estate lending, truth in savings provisions, the requirement
that a depository institution give 90 days' prior notice to customers and
regulatory authorities before closing any branch, and a prohibition on the
acceptance or renewal of brokered deposits by depository institutions that are
not well capitalized or are adequately capitalized and have not received a
waiver from the FDIC. Under regulations relating to the brokered deposit
prohibition, all of the Corporation's subsidiary banks are well capitalized and
not subject to the prohibition.
FDIC INSURANCE ASSESSMENTS
FUNC's subsidiary banks are subject to FDIC deposit insurance assessments.
The FDIC assessment rates for the Bank Insurance Fund (BIF) range from $.23 to
$.31 for every $100 of deposits. Each financial institution is assigned to one
of three capital groups -- well capitalized, adequately capitalized or
undercapitalized -- and further assigned to one of three subgroups within a
capital group, on the basis of supervisory evaluations by the institution's
primary federal and, if applicable, state supervisors and other information
relevant to the institution's financial condition and the risk posed to the
applicable insurance fund. The actual assessment rate applicable to a particular
institution, therefore, depends in part upon the risk assessment classification
so assigned to the institution by the FDIC. For the assessment due on January
31, 1994, the rate for each of the Corporation's subsidiary banks was $.23,
except for FUNB-VA, FUNB-MD and FUNB-DC, each whose rate was $.26.
ADDITIONAL INFORMATION
Additional information related to certain regulatory and accounting matters
is set forth on pages 19 and 20 in the Annual Report and incorporated herein by
reference.
5
ITEM 2. PROPERTIES.
As of December 31, 1993, the Corporation and its subsidiaries owned or
leased 1,525 locations in 39 states and one foreign country from which their
business is conducted, including a multi-story office complex in Charlotte,
North Carolina, which serves as the administrative headquarters of the
Corporation, FUNB-NC and most of the Corporation's nonbanking subsidiaries.
Listed below are the number of banking and nonbanking locations of the
Corporation that are leased or owned, as of December 31, 1993:
LEASED OWNED
First Union National Bank of Florida............................................... 194 294
First Union National Bank of North Carolina........................................ 159 107
First Union National Bank of Georgia............................................... 67 96
First Union National Bank of South Carolina........................................ 28 39
First Union National Bank of Tennessee............................................. 17 46
First Union National Bank of Virginia.............................................. 87 106
First Union National Bank of Maryland.............................................. 30 2
First Union National Bank of Washington, D.C....................................... 27 3
Nonbanking locations............................................................... 223 --
Total............................................................................ 832 693
The principal offices of each of the Corporation's subsidiary banks in
Jacksonville, Florida; Atlanta, Georgia; Greenville, South Carolina; Nashville,
Tennessee; Roanoke, Virginia; Rockville, Maryland; and Washington, D.C., are all
leased.
Additional information relating to the Corporation's lease commitments is
set forth in Note 17 on page 83 in the Annual Report and incorporated herein by
reference.
ITEM 3. LEGAL PROCEEDINGS.
The Corporation and certain of its subsidiaries have been named as
defendants in various legal actions arising from their normal business
activities in which varying amounts are claimed. Although the amount of any
ultimate liability with respect to such matters cannot be determined, in the
opinion of management, based upon the opinions of counsel, any such liability
will not have a material effect on the consolidated financial position of the
Corporation and its subsidiaries.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
6
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Corporation's Common Stock, $3.33 1/3 par value per share (the Common
Stock), is listed on the New York Stock Exchange. Table 6 on page 28 in the
Annual Report sets forth information relating to the quarterly prices of, and
quarterly dividends paid on, the Common Stock for the two-year period ended
December 31, 1993, and is incorporated herein by reference. Prices shown
represent the high and low last sale prices of the Common Stock as reported on
the New York Stock Exchange, Inc. Composite Transactions Tape. As of December
31, 1993, there were 58,670 holders of record of the Common Stock.
In December 1990, the Board of Directors of the Corporation adopted a
Shareholder Protection Rights Plan (the Plan) designed to enhance the ability of
the Board to protect stockholders against attempts to acquire control of the
Corporation by means of unfair or abusive tactics. The Plan provides, among
other things, that the rights granted under the Plan to the holders of shares of
Common Stock (one right for each share of Common Stock) will become exercisable
(after a specified period) if any person or group announces a tender or exchange
offer for, or acquires, 15 percent or more of the Common Stock. At that time
each right will enable the holders of the rights (other than such person or
group, whose rights become void) to purchase additional shares of Common Stock
(or at the option of the Board of Directors, shares of junior participating
Class A Preferred Stock) having a market value of twice the $110 exercise price
of the right, subject to adjustment in certain events. If any person or group
acquires beneficial ownership of between 15 percent and 50 percent of the
Corporation's Common Stock, the Corporation's Board of Directors may, at its
option, exchange for each outstanding and not voided right either two shares of
Common Stock or junior participating Class A Preferred Stock having economic and
voting terms similar to two shares of Common Stock, subject to adjustment in
certain events. The rights are redeemable by the Corporation at $0.01 per right
(subject to adjustment in certain events) prior to becoming exercisable and, in
certain events, may be cancelled and terminated without any payment to holders.
The rights have no voting rights and are not entitled to dividends. The rights
will expire on December 28, 2000, unless sooner redeemed or terminated. Each
share of Common Stock has attached to it one right, and the rights will not
trade separately from the Common Stock unless they become exercisable.
Subject to the prior rights of the holders of the Series 1990 Cumulative
Perpetual Adjustable Rate Preferred Stock (Series 1990 Preferred Stock) issued
in connection with the acquisition of Florida National in January 1990, holders
of the Common Stock are entitled to receive such dividends as may be legally
declared by the Board of Directors and, in the event of dissolution and
liquidation, to receive the net assets of the Corporation remaining after
payment of all liabilities, in proportion to their respective holdings.
Additional information concerning certain limitations on the payment of
dividends by the Corporation and its subsidiaries is set forth above under
Business -- Supervision and Regulation; Payment of Dividends and in Note 16 on
page 77 in the Annual Report and incorporated herein by reference.
Additional information relating to the Series 1990 Preferred Stock and
Common Stock is set forth in Note 12 on page 71 in the Annual Report and
incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
In response to this Item the information set forth in Table 2 on page 24 in
the Annual Report is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
In response to this Item the information set forth on pages 10 through 51
in the Annual Report is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
In response to this Item the information set forth on page 28 and on pages
53 through 85 in the Annual Report is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
7
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The executive officers of the Corporation are elected to their offices for
one year terms at the meeting of the Board of Directors in April of each year.
The terms of any executive officers elected after such date expire at the same
time as the terms of the executive officers elected on such date. The names of
each of the current executive officers of the Corporation, their ages, their
current positions with the Corporation and certain subsidiaries and, if
different, their business experience during the past five years, are as follows:
Edward E. Crutchfield, Jr. (52). Chairman and Chief Executive Officer,
the Corporation. Also, President, the Corporation, October 1988 to June
1990.
John R. Georgius (49). President, the Corporation, since June 1990.
Chairman and Chief Executive Officer, FUNB-NC, from October 1988 to
February 1993. Vice Chairman, the Corporation, August 1987 to June
1990. President, FUNB-NC, prior to October 1988.
B. J. Walker (63). Vice Chairman, the Corporation. Also, Chairman and
Chief Executive Officer, FUNB-FL, prior to March 1991.
Robert T. Atwood (53). Executive Vice President and Chief Financial
Officer, the Corporation, since March 1991. Prior to that time, Mr.
Atwood was a partner with the accounting firm of Deloitte & Touche.
Marion A. Cowell, Jr. (59). Executive Vice President, Secretary, and
General Counsel, the Corporation. Mr. Cowell served as Senior Vice
President, Secretary and General Counsel of the Corporation prior to
December 1991.
In addition to the foregoing, the information set forth in the Proxy
Statement under the heading General Information and Nominees, and in the last
paragraph under the heading Other Matters Relating to Executive Officers and
Directors is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
In response to this Item the information set forth in the Proxy Statement
under the heading Executive Compensation, excluding the information under the
subheadings HR Committee Report on Executive Compensation and Performance Graph,
is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
In response to this Item the information set forth in the Proxy Statement
relating to the ownership of Common Stock and Series 1990 Preferred Stock by the
directors and executive officers of the Corporation under the heading General
Information and Nominees is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In response to this Item the information set forth in the Proxy Statement
in the first two paragraphs under the heading Other Matters Relating to
Executive Officers and Directors is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The consolidated financial statements of the Corporation, including the
notes thereto and independent auditors' report thereon, are set forth on pages
53 through 85 of the Annual Report. All financial statement schedules are
omitted since the required information is either not applicable, is immaterial
or is included in the consolidated financial statements of the Corporation and
notes thereto. A list of the exhibits to this Form 10-K is set forth on the
Exhibit Index immediately preceding such exhibits and is incorporated herein by
reference.
(b) During the quarter ended December 31, 1993, no current reports on Form
8-K were filed by the Corporation with the Securities and Exchange Commission.
8
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FIRST UNION CORPORATION
Date: March 8, 1994 By: MARION A. COWELL, JR.
MARION A. COWELL, JR.
EXECUTIVE VICE PRESIDENT,
SECRETARY AND GENERAL COUNSEL
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated and on the date indicated.
SIGNATURE CAPACITY
EDWARD E. CRUTCHFIELD, JR.* Chairman and Chief Executive Officer and Director
EDWARD E. CRUTCHFIELD, JR.
ROBERT T. ATWOOD* Executive Vice President and Chief Financial Officer
ROBERT T. ATWOOD
JAMES H. HATCH* Senior Vice President and Corporate Controller (Principal
Accounting Officer)
JAMES H. HATCH
G. ALEX BERNHARDT* Director
G. ALEX BERNHARDT
W. WALDO BRADLEY* Director
W. WALDO BRADLEY
ROBERT J. BROWN* Director
ROBERT J. BROWN
WARNER N. DALHOUSE* Director
WARNER N. DALHOUSE
ROBERT D. DAVIS* Director
ROBERT D. DAVIS
R. STUART DICKSON* Director
R. STUART DICKSON
B. F. DOLAN* Director
B. F. DOLAN
RODDEY DOWD, SR.* Director
RODDEY DOWD, SR.
9
SIGNATURE CAPACITY
JOHN R. GEORGIUS* Director
JOHN R. GEORGIUS
WILLIAM H. GOODWIN, JR.* Director
WILLIAM H. GOODWIN, JR.
BRENTON S. HALSEY* Director
BRENTON S. HALSEY
HOWARD H. HAWORTH* Director
HOWARD H. HAWORTH
TORRENCE E. HEMBY, JR.* Director
TORRENCE E. HEMBY, JR.
LEONARD G. HERRING* Director
LEONARD G. HERRING
JACK A. LAUGHERY* Director
JACK A. LAUGHERY
MAX LENNON* Director
MAX LENNON
RADFORD D. LOVETT* Director
RADFORD D. LOVETT
HENRY D. PERRY, JR.* Director
HENRY D. PERRY, JR.
RANDOLPH N. REYNOLDS* Director
RANDOLPH N. REYNOLDS
RUTH G. SHAW* Director
RUTH G. SHAW
LANTY L. SMITH* Director
LANTY L. SMITH
DEWEY L. TROGDON* Director
DEWEY L. TROGDON
JOHN D. UIBLE* Director
JOHN D. UIBLE
10
SIGNATURE CAPACITY
B. J. WALKER* Director
B. J. WALKER
KENNETH G. YOUNGER* Director
KENNETH G. YOUNGER
*By Marion A. Cowell, Jr., Attorney-in-Fact
MARION A. COWELL, JR.
MARION A. COWELL, JR.
Date: March 8, 1994
11
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION LOCATION
(3)(i) Articles of Incorporation of the Corporation, as amended. Incorporated by reference to Exhibit (4) to
the Corporation's 1990 First Quarter Report on
Form 10-Q and to Exhibit (99)(a) to the
Corporation's 1993 First Quarter Report on
Form 10-Q.
(3)(ii) By-laws of the Corporation, as amended. Incorporated by reference to Exhibit (4)(b)
to the Corporation's Form 8-K dated September
20, 1991.
(4)(a) Statement of Classification of Shares creating the Series 1990 Incorporated by reference to Exhibit (4)(a)
Preferred Stock. to the Corporation's 1989 Annual Report on Form
10-K.
(4)(b) Instruments defining the rights of the holders of the *
Corporation's long-term debt.
(4)(c) The Corporation's Shareholder Protection Rights Plan, as amended. Incorporated by reference to Exhibit (4)(b)
to the Corporation's Forms 8-K dated December
18, 1990 and October 20, 1992.
(10)(a) The Corporation's Management Incentive Plan. Incorporated by reference to Exhibit (10)(a)
to the Corporation's 1992 Annual Report on
Form 10-K.
(10)(b) The Corporation's Deferred Compensation Plan for Officers. Incorporated by reference to Exhibit (10)(b)
to the Corporation's 1988 Annual Report on
Form 10-K.
(10)(c) The Corporation's Deferred Compensation Plan for Non-Employee Incorporated by reference to Exhibit (10)(c)
Directors. to the Corporation's 1989 Annual Report on
Form 10-K.
(10)(d) The Corporation's Supplemental Executive Long-Term Disability Incorporated by reference to Exhibit (10)(d)
Plan. to the Corporation's 1988 Annual Report on
Form 10-K.
(10)(e) The Corporation's 1969 Stock Option Plan. Incorporated by reference to Exhibit (28) to
Post-Effective Amendment No. 13 to the
Corporation's Registration Statement No.
2-42050.
(10)(f) The Corporation's Supplemental Retirement Plan. Incorporated by reference to Exhibit (10)(f)
to the Corporation's 1988 Annual Report on
Form 10-K.
(10)(g) The Corporation's Retirement Plan for Non-Employee Directors. Incorporated by reference to Exhibit (10)(g)
to the Corporation's 1988 Annual Report on
Form 10-K.
(10)(h) The Corporation's 1984 Master Stock Compensation Plan. Incorporated by reference to Exhibit (28) to
the Corporation's Registration Statement No.
33-47447.
(10)(i) The Corporation's 1988 Master Stock Compensation Plan. Incorporated by reference to Exhibit (28) to
the Corporation's Registration Statement No.
33-47447.
* The Corporation agrees to furnish to the Securities and Exchange Commission
upon request, copies of the instruments, including indentures, defining the
rights of the holders of the long-term debt of the Corporation and its
subsidiaries.
EXHIBIT NO. DESCRIPTION LOCATION
(10)(j) The Corporation's 1992 Master Stock Compensation Plan. Incorporated by reference to Exhibit (28) to
the Corporation's Registration Statement No.
33-47447.
(10)(k) Employment Agreement between the Corporation and Edward E. Incorporated by reference to Exhibit (10)(h)
Crutchfield, Jr. to the Corporation's 1985 Annual Report on
Form 10-K.
(10)(l) The Corporation's Management Long-Term Cash Incentive Plan. Incorporated by reference to Exhibit (10)(m)
to the Corporation's 1992 Annual Report on
Form 10-K.
(10)(m) Agreement and Plan of Merger, dated as of September 20, 1992, Incorporated by reference to Exhibit (2) to
relating to the acquisition of Dominion by the Corporation. the Corporation's Registration Statement No.
33-54274.
(10)(n) Dominion stock option plans. Incorporated by reference to Exhibit (28) to
the Corporation's Post-Effective Amendment
No. 1 to Registration Statement No. 33-54274.
(10)(o) Employment Agreement between First Union Corporation of Virginia Incorporated by reference to Exhibit (10)(q)
and Warner N. Dalhouse. to the Corporation's 1992 Annual Report on
Form 10-K.
(12)(a) Computations of consolidated ratios of earnings to fixed charges.
(12)(b) Computations of consolidated ratios of earnings to fixed charges
and preferred stock dividends.
(13) The Corporation's 1993 Annual Report to Stockholders.*
(21) List of the Corporation's subsidiaries.
(23) Consent of KPMG Peat Marwick.
(24) Power of Attorney.
(99) First Union Corporation of Virginia Summarized Financial
Information.
* Except for those portions of the Annual Report which are expressly
incorporated by reference in this Form 10-K, the Annual Report is furnished
for the information of the Securities and Exchange Commission only and is not
to be deemed filed as part of such Form 10-K.