SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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.
[ ] Confidential, for use of the commission only (as permitted by Rule
14a-6(e)(2)).
[ ] Definitive proxy statement.
[ ] Definitive additional materials.
[X] Soliciting material under Rule 14a-12.
Wachovia Corporation
(Name of Registrant as Specified in Its Charter)
N/A
(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Date: June 27, 2001
This filing contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements include, but
are not limited to, (i) statements about the benefits of the merger between
Wachovia Corporation and First Union Corporation, including future financial and
operating results, cost savings, enhanced revenues, and accretion to reported
earnings that may be realized from the merger; (ii) statements with respect to
Wachovia's and First Union's plans, objectives, expectations and intentions and
other statements that are not historical facts; and (iii) other statements
identified by words such as "believes", "expects", "anticipates", "estimates",
"intends", "plans", "targets", "projects" and similar expressions. These
statements are based upon the current beliefs and expectations of Wachovia's and
First Union's management and are subject to significant risks and uncertainties.
Actual results may differ from those set forth in the forward-looking
statements.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements: (1) the risk that the businesses of First Union and
Wachovia will not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; (2) expected revenue
synergies and cost savings from the merger may not be fully realized or realized
within the expected time frame; (3) revenues following the merger may be lower
than expected; (4) deposit attrition, operating costs, customer loss and
business disruption following the merger, including, without limitation,
difficulties in maintaining relationships with employees, may be greater than
expected; (5) the ability to obtain governmental approvals of the merger on the
proposed terms and schedule; (6) the failure of Wachovia's and First Union's
stockholders to approve the merger; (7) competitive pressures among depository
and other financial institutions may increase significantly and have an effect
on pricing, spending, third-party relationships and revenues; (8) the strength
of the United States economy in general and the strength of the local economies
in which the combined company will conduct operations may be different than
expected resulting in, among other things, a deterioration in credit quality or
a reduced demand for credit, including the resultant effect on the combined
company's loan portfolio and allowance for loan losses; (9) changes in the U.S.
and foreign legal and regulatory framework; and (10) adverse conditions in the
stock market, the public debt market and other capital markets (including
changes in interest rate conditions) and the impact of such conditions on the
combined company's capital markets and asset management activities. Additional
factors that could cause Wachovia's and First Union's results to differ
materially from those described in the forward-looking statements can be found
in Wachovia's and First Union's reports (such as Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the
Securities and Exchange Commission and available at the SEC's Internet site
(http://www.sec.gov). All subsequent written and oral forward-looking statements
concerning the proposed transaction or other matters attributable to Wachovia or
First Union or any person acting on their behalf are expressly qualified in
their entirety by the cautionary statements above. Wachovia and First Union do
not undertake any obligation to update any forward-looking statement to reflect
circumstances or events that occur after the date the forward-looking statements
are made.
The proposed transaction will be submitted to Wachovia's and First Union's
stockholders for their consideration, and on June 27, 2001 First Union filed an
amended registration statement on Form S-4 with the SEC containing a preliminary
joint proxy statement/prospectus of Wachovia and First Union and other relevant
documents concerning the proposed transaction. Stockholders are urged to read
the definitive joint proxy statement/prospectus when it becomes available, and
any other relevant documents filed with the SEC, as well as any amendments or
supplements to those documents, because they will contain important information.
You will be able to obtain a free copy of the registration statement and the
joint proxy statement/prospectus, as well as other filings containing
information about Wachovia and First Union, at the SEC's Internet site
(http://www.sec.gov). Copies of the joint proxy statement/prospectus and the SEC
filings that will be incorporated by reference in the joint proxy
statement/prospectus can also be obtained, without charge, by directing a
request to Wachovia, Investor Relations, 100 North Main Street, Winston-Salem,
North Carolina 27150 (888-492-6397), or to First Union, Investor Relations, One
First Union Center, Charlotte, North Carolina 28288-0206 (704-374-6782).
Wachovia and First Union, and their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies from the
stockholders of Wachovia and First Union in connection with the merger.
Information about the directors and executive officers of Wachovia and their
ownership of Wachovia common stock is set forth in Wachovia's proxy statement on
Schedule 14A, as filed with the SEC on March 19, 2001. Information about the
directors and executive officers of First Union and their ownership of First
Union common stock is set forth in First Union's proxy statement on Schedule
14A, as filed with the SEC on March 13, 2001. Additional information regarding
the interests of those participants may be obtained by reading the definitive
joint proxy statement/prospectus regarding the proposed transaction when it
becomes available.
ISSUE OF WACHOVIA INTERNAL EMPLOYEE AND RETIREE NEWSLETTER REGARDING THE
PROPOSED MERGER WITH FIRST UNION CORPORATION
Wachovia News
A publication for Wachovia employees and retirees
June 2001
- ---------
Inside This Issue
- -----------------
[Merge Ahead Graphic]
Questions and Answers about Merger Transaction
Answers are provided to questions submitted by employees through the Merger
Matters feedback form on WNFO.
[Telephone Graphic]
Merger Questions? Call Hotline for Answers
Wachovia created the Merger Information Center this month to provide employees
and retirees with a resource to ask questions about the merger with First Union.
[EmployeeConnection Graphic]
EmployeeConnection Introduced this Month
EmployeeConnection enables employees to view, update and maintain personal and
payroll-related information from the convenience of their desks.
[The Merger Process Graphic]
Steps to Completing a Merger Explained
Wachovia and First Union are on track to complete the proposed merger in the
third quarter or early fourth quarter pending regulatory and shareholder
approval.
[WNFO logo]
See Wachovia's intranet for more detail on articles with the WNFO logo.
Former CEO and Chairman Speaks on First Union Merger
John Medlin explains changes in industry and how merger with First Union will
preserve Wachovia's heritage.
[photo of John Medlin appears here]
A Look Inside the Proxy Process
The process of winning shareholder approval is one of the most significant steps
in consummating a legal merger between two companies. Wachovia has scheduled its
shareholders meeting to vote on the proposed merger with First Union on Aug. 3,
2001, in Winston-Salem and hopes to mail its proxy materials in late June.
Following is a closer look at the process.
Voting By Proxy
Shareholders, as equity owners of a company, are entitled to vote on the
approval of a proposed merger. Typically, this is done in one of two ways --
shareholders can submit a ballot at the shareholders meeting or vote by proxy,
which means providing authorization and instruction to vote on their behalf.
Since only a small percentage of shareholders typically attend the meeting, the
majority of votes are submitted by proxy.
Wachovia hopes to send its shareholders a proxy statement and proxy card in
the mail within the next couple weeks. The proxy statement provides information
on matters to be voted on at the shareholders meeting. The proxy card enables
shareholders to vote on the proposals included in the proxy statement by
directing their shares to be voted for or against or to abstain from voting on
the proposals.
Wachovia has filed its preliminary proxy statement with the Securities and
Exchange Commission and is in the process of responding to comments from the
SEC. Immediately following clearance by the SEC, the proxy statement and proxy
card will be mailed to Wachovia shareholders eligible to vote on the proposed
merger with First Union. All shareholders who owned Wachovia stock at the close
of business June 12, 2001, will be eligible to vote those shares on the proposed
merger.
How the Proxy Process Works
Wachovia should mail proxy materials, which will include the proxy
statement and a white proxy card, to shareholders in late June. Proxy cards may
be returned to one of three places depending on the type of account in which the
shares are held. Shareholders who own Wachovia stock through a bank or broker
will return proxy cards to a third-party proxy processing facility for
confidential tabulation. Wachovia employees who own stock through the 401(k)
plan also will return proxy cards to an independent company to ensure
confidential tabulation.
Shareholders who hold stock certificates in their names, including
employees who participate in Wachovia's Dividend Reinvestment and Common Stock
Purchase Plan, will return their proxy cards to a company that will tabulate the
votes for Wachovia. Information from these proxy cards will be available to the
corporation, but Wachovia will respect the discretion of employees and their
right as shareholders to vote as they deem appropriate and will not reward or
penalize employees based on how they vote for the proposed merger.
Shareholders may receive a separate proxy statement and card for each type
of account in which they may hold Wachovia stock.
Returning the Proxy Card
If an individual owns Wachovia shares in different accounts, he or she will
need to submit a proxy card for each account to have all shares voted. For
example, if an employee participates in the Retirement Savings and
Profit-Sharing Plan, invests through the Dividend Reinvestment and Common Stock
Purchase Plan and owns stock at a brokerage, he or she may receive proxy
materials from three different sources. The employee will need to return a proxy
card for each of these accounts as instructed in the proxy materials to vote all
shares owned.
After the proxy statement has been mailed, Wachovia will begin weekly
mailings to shareholders to encourage them to vote in favor of the proposed
merger with First Union. Shareholders who want to change their vote or are not
sure whether they returned their original proxy cards may submit new proxy cards
or attend the shareholders meeting and submit a ballot. The proxy card with the
latest date and signature will be the card counted. All proxy cards for a
specific account that are dated earlier will be discarded. All proxy cards must
be received prior to the vote being taken at the Aug. 3 shareholders meeting.
The proposed merger between Wachovia and First Union requires the approval
of greater than 50 percent of all outstanding Wachovia shares. Therefore any
shareholders abstaining or not returning a proxy card will, in effect, be
counted as voting against the proposed merger with First Union.
"It is critical that we help shareholders understand the reasons behind our
merger of equals with First Union and the strategic value it holds for all of
our constituents," said Bob McCoy, chief financial officer. "We also want to
encourage every shareholder to vote. We do not want to lose votes by default
because shareholders do not return proxy cards."
Wachovia shareholders may also receive proxy materials from SunTrust asking
them to vote against the First Union merger. SunTrust's proxy cards only can
solicit votes concerning the proposed merger between First Union and Wachovia,
since there is no merger agreement with SunTrust. SunTrust's proxy cards will be
blue to distinguish them clearly from Wachovia's white proxy cards.
"We suggest that shareholders simply ignore the SunTrust cards," McCoy
said. "The SunTrust card does not represent a proposal to merge with SunTrust.
The only merger proposal on the table is the one between Wachovia and First
Union. To avoid confusion, shareholders should only use their white proxy cards
to submit their vote."
"It is critical that we help shareholders understand the reasons behind our
merger of equals with First Union and the strategic value it holds for all of
our constituents. We also want to encourage every shareholder to vote. We do not
want to lose votes by default because shareholders do not return proxy cards."
- -Bob McCoy chief financial officer[photo of Bob McCoy appears here]
Continued on page 4
New Call Center Established for Merger-Related Questions
A new Merger Information Center has been established for employees and
retirees to ask questions, provide feedback and learn more about the proposed
merger with First Union.
Employees and retirees can call 1-866-405-5305 toll-free to talk with a
representative from the new Merger Information Center. Representatives are
available weekdays from 8 a.m. to 6 p.m. Voice mail also is available for calls
made before or after those hours. Representatives have access to the most recent
merger-related information and will answer all questions possible. Callers are
not be required to give their names.
Any questions that cannot be answered immediately will be tracked and
researched so that answers can be provided at a later date. Questions of broad
interest to employees will be posted on the Merger Matters site on WNFO.
Employees and retirees should continue to refer Human Resources questions--
including issues such as benefits, severance, displacement--to the Human
Resources Service Center at 1-800-732-4754.
The feedback form on the Merger Matters site on WNFO also gives employees
an opportunity to submit questions, concerns or feedback electronically. The
form does not require employees to submit their names. Questions of broad
interest will be posted on the Merger Matters site.
"As we move forward, it is critical that employees understand and support
our merger with First Union," said Greer Cawood, manager of Corporate
Communications. "Education is the key to this effort. These new communication
channels will enable us to respond quickly to any issues, concerns or rumors
that may exist."
InternetWeek Magazine Names Wachovia Among Top Performers
Wachovia has been named by InternetWeek magazine as one of the top 100
e-businesses nationwide, according to the second annual InternetWeek 100 survey.
The magazines June 11 issue lists top performers in an extensive two-month study
of performance and practices of Internet-enabled businesses in 10 major
industries across the country.
"We are honored to be recognized in the InternetWeek 100 this year," said
Lawrence Baxter, head of the eBusiness Division. "Wachovia is strongly committed
to providing our customers with state of the art technologies and a full suite
of online products and services. To be acknowledged for our accomplishments is a
testament to the success of our online strategies and e-commerce initiatives."
InternetWeek used rigorous, performance-oriented metrics to highlight the
top 100 e-businesses that are leveraging Internet technologies to deliver
superior results.
"Wachovia was chosen from hundreds of participating companies," said Art
Pfenning, director of editorial research for InternetWeek magazine. "To come out
in the top 100 through quantifiable research and analysis validates Wachovia as
a successful e-business a leader in business transformation."
Questions and Answers about the Proposed Merger Transaction
[Merge Ahead Graphic]
Details about many of these and other questions will be available in the proxy
statement that will be mailed to all shareholders. Shareholders should read and
consider the information in the proxy statement.
What percentage of shareholder vote does Wachovia need to approve the merger
with First Union?
A majority (50 percent plus 1 share) of all Wachovia shares outstanding
must be voted in favor of the merger for approval. Because the proposed merger
between Wachovia and First Union requires the approval of a majority of all
outstanding shares, abstaining or not returning a proxy card will have the same
effect as voting against the proposed merger with First Union.
Does it matter when I vote?
Your proxy card must be received before the beginning of the shareholders
meeting on August 3 or you can vote by ballot at the shareholders meeting. We
urge you to vote your WHITE Wachovia proxy card as soon as you receive the proxy
materials.
Will shareholders be able to vote by telephone or through the Internet?
Because this vote is considered a proxy contest, Wachovia shareholders must
submit their proxy by mail or vote in person at the shareholders meeting.
Internet and telephone voting will not be accepted.
How will the 401(k) shares be voted? Will my vote as an employee be
confidential? As a participant in the Retirement Savings and Profit-Sharing
Plan, will I be able to vote my shares and choose the form of the dividend I
take?
You will be able to vote your proportionate shares of Wachovia stock held
in the RSPSP. Proxy votes for shares owned by employees in the RSPSP, ESOP (IJL)
and 401k (RSB) plans will be tabulated by an independent company and then passed
in aggregate to the trustee for voting purposes, thereby maintaining
confidentiality.
In accordance with the plan document governing the RSPSP, any unvoted
shares held in the plan will be voted by the independent fiduciary.
A decision has not been made yet in regard to choosing an option for
dividends. A plan trustee probably will select one of the options on behalf of
all participants.
Will my vote be confidential?
Proxy votes for Wachovia shares owned by employees in the RSPSP, ESOP (IJL)
and 401(k) (RSB) plans will be tabulated by an independent company and then
passed in aggregate to the trustee for voting purposes, thereby maintaining
confidentiality.
Shares owned by employees through a brokerage firm (e.g., IRA accounts),
will be confidential as the shares are held in the brokers name.
Shares listed in an employees name and held outside of the above
categories, including shares purchased through Wachovias Dividend Reinvestment
and Common Stock Purchase Plan, will be included in the vote results received by
Wachovias corporate secretary. Wachovia will respect the discretion of employees
and their right as shareholders to vote as they deem appropriate and will not
reward or penalize employees based on how they vote for the proposed merger.
Why is SunTrust sending me proxy information?
SunTrust plans to send its own proxy statement and proxy card to Wachovia
shareholders requesting them to allow SunTrust to vote their shares against
Wachovias merger with First Union. SunTrusts card will be blue to distinguish it
from Wachovias white card. SunTrust does not have a merger agreement on which to
vote. SunTrust is only seeking to block Wachovias merger with First Union. If
shareholders turn down the proposed merger with First Union, SunTrust believes
the path will be cleared for it to acquire Wachovia. That is not the case.
How will the shares that are held in Wachovia trust accounts be vote?
Because of the perception of a possible conflict of interest, Wachovia will
select an independent fiduciary for those trusts for which Wachovia is the sole
fiduciary. This independent fiduciary will act as a limited-power trustee for
the purpose of voting the shares concerning the proposed merger of Wachovia and
First Union. For trusts in which Wachovia serves as co-trustee, Wachovia will
ask the co-trustee to vote the shares concerning the proposed merger. For the
Retirement Savings and Profit-Sharing Plan, plan participants who hold Wachovia
stock will be able to vote their shares through a process that ensures
confidentiality. In accordance with the plan document governing the RSPSP, any
unvoted shares held in the plan will be voted by the independent fiduciary.
How does the amended merger agreement protect dividends for Wachovia
shareholders?
The amended merger agreement with First Union provides Wachovia
shareholders the ability to continue to receive their existing annual dividend
payment of $2.40 per share. Once the Wachovia/First Union merger is completed,
all Wachovia shareholders will have the option to choose either:
o to receive the same $2.40 per year that you are receiving now until the
dividend rate of the new Wachovia rises to that rate. Then you will get the
regular dividend of the new Wachovia.
o to receive a special one-time cash payment of $.48 per share shortly after
the closing. Then you can receive the regular new Wachovia common stock
dividend, which will start at $1.92 per year, for the two shares of new
Wachovia common stock you will receive.
If shareholders do not elect an option within 90 days after completion of
the merger, they will receive the $.48 cash payment per Wachovia share.
Future dividends will depend on the growth of the combined company. We
anticipate that dividend growth of the new Wachovia will be more rapid than if
Wachovia were to merge with SunTrust.
Explain the economics of the different dividend choices?
For the first year, shareholders would receive effectively the same $2.40
under either option for the new Wachovia as they would under the existing
Wachovia annual dividend rate of $2.40. On a present value basis, shareholders
would receive the most for the first year under the $.48 special distribution
scenario.
Explain the preferred stock and how it will relate to the common stock of the
new Wachovia?
The preferred stock is simply a vehicle to enable Wachovia shareholders to
continue to receive the existing $2.40 dividend until the common shareholders
dividend of the new Wachovia reaches the same level. The preferred stock
represents the difference between the dividend Wachovia shareholders currently
receive and the dividend that will be paid to other shareholders of the combined
company. Once the dividend of the new Wachovia becomes equal to the dividend
that Wachovia shareholders currently receive, the preferred stock will no longer
be necessary, and all shareholders of the new company will receive the same
dividend.
Is there a tax advantage to either of the dividend choices?
A legal opinion on tax treatment has not yet been completed. However, we
anticipate that the $.48 special cash payment will receive capital gains
treatment. Therefore, this scenario may have tax advantages for shareholders
that have owned their shares for more than one year. Please consult your tax
adviser and the proxy statement, when available, on this matter.
When do I have to decide which dividend option to take? When I vote on the
merger or some time later?
At the completion of the merger, Wachovia shareholders will receive a
letter containing instructions about the exchange of stock certificates and an
election form to choose a dividend option. If shareholders do not elect an
option within 90 days after completion of the merger, they will receive the $.48
cash payment per Wachovia share. [WN logo appears here]
2
Medlin Discusses Industry Changes and the Key to Preserving Wachovia's Heritage
John Medlin, former chairman and chief executive officer of Wachovia, recaps
recent changes in the financial services industry and explains why the proposed
merger of equals with First Union is the key to preserving Wachovia's heritage
and why SunTrust's hostile takeover proposal would not achieve the same results.
John Medlin, former chairman and chief executive officer of Wachovia, will
be the first to point out that the financial services industry has changed
dramatically since he retired in 1993. These changes have required financial
service companies to evaluate their earnings constantly and to invest in new
services as revenue growth slowed from traditional lines of business.
"In the `70s and `80s earnings growth in banking primarily resulted from
loans and deposits," Medlin said. "Loans and the deposits to fund them grew
strongly, driven by a volatile, inflationary economy, high interest rates and
deregulation of deposit rates. Careful management of credit risk and interest
rate risk was the key to good interest spreads and steady earnings growth.
" In the `90s, however, inflation and interest rates were subdued, and
consumers began to take advantage of other options for better returns on their
investments, including the use of mutual funds. The growth and profit margin of
traditional banking services moderated as customers funneled more and more money
into mutual funds rather than into the deposits needed by banks to fund loan
growth.
"In the early `90s total core deposits in the banking system were around $2
trillion, while mutual fund assets were only $600 billion," Medlin said. "By
2000, core banking deposits had risen modestly to $2.5 trillion, while mutual
fund assets had skyrocketed to $7 trillion in a fast rising stock market."
Meanwhile, businesses began to meet more of their borrowing needs through
alternatives to bank loans, including the use of capital markets.
Wachovia anticipated these changes by entering the brokerage and mutual
fund businesses in the late `80s and later began securitizing and selling
mortgage, credit card and auto loans and offering capital markets services to
meet customers' credit needs as growth in deposits slowed.
In the 1990s CEO Bud Baker and Wachovia's senior executives conducted
strategic studies that led to the expansion of capital markets, wealth
management and other fee income business such as insurance sales.
"These new lines of business could be built internally, bought or developed
through a merger or partnership with another organization," Medlin said. "Due to
the rapid pace of change and shareholder expectations, it became unrealistic to
grow these lines of business fast enough internally. It was better to acquire or
merge with companies that already had the necessary capabilities. That is why
Wachovia has been acquiring companies such as Interstate/Johnson Lane,
OFFIT-BANK, DavisBaldwin, Barry, Evans, Josephs and Snipes, and Hamilton Dorsey
Alston."
More recently as Wachovia's senior executives considered additional
alternatives to position the company better for the future and to strengthen
lines of business with higher growth potential, they evaluated possible merger
partners well positioned in faster growing business lines and markets.
"As it turned out, our neighbor - First Union - was the best candidate,"
Medlin said. "People have said that a merger between Wachovia and First Union is
unthinkable, but the once unthinkable seems to happen regularly in these unusual
and fast-moving times.
"For example, four of the previous five largest banks in New York City are
one today. Manufacturers Hanover merged with Chemical. Then Chemical merged with
Chase, and Chase merged with JP Morgan to form JP Morgan Chase."
In addition, Medlin says many people are overlooking some key elements
regarding Wachovia's compatibility with First Union.
"Wachovia and First Union grew up in North Carolina, which always has
allowed statewide branching. SunTrust grew up in Georgia and Florida where until
the early `80s financial service companies had to have a separate bank in every
county. Making the transition from a decentralized banking model to a
centralized one takes years. SunTrust did not merge its 28 banks in Georgia and
Florida into one until last year, and the vestiges of the decentralized way of
operating remain."
The merger with First Union will give Wachovia a much stronger position in
brokerage, mutual fund, wealth management and capital markets than would
SunTrust. In addition, it will fill out Wachovia's Florida franchise; add a key
presence and density in important growth markets along the East Coast; and
provide the necessary size and scale for the future as the fixed cost of
maintaining modern technology escalates.
"To achieve its strategic goals, Wachovia needs to be among the five to 10
largest banks in the country," Medlin said. "The financial services industry is
rapidly becoming more concentrated and more competitive. Wachovia's bank card
business, the sale of which recently was announced, at $8 billion was the 12th
largest in the country. Yet, it was having increasing difficulty competing with
giant card companies.
"The proposed merger of equals with First Union will make the new Wachovia
the fourth largest banking company in the country. That, along with the other
advantages that are expected, should solidify our standing as a formidable
competitor long into the future and help preserve Wachovia's rich heritage and
service culture.
"For more than a century, the Wachovia name has been symbolic of soundness,
progressiveness, integrity and a commitment to superior customer service.
Through the proposed merger of equals with First Union, this legacy can live on.
It is a bold and visionary move like those made by Wachovia pioneers Col.
Francis Fries and Robert Hanes in earlier decades of the last century," Medlin
concluded. [WN logo appears here]
"For more than a century, the Wachovia name has been symbolic of soundness,
progressiveness, integrity and a commitment to superior customer service.
Through the proposed merger of equals with First Union, this legacy can live on.
It is a bold and visionary move like those made by Wachovia pioneers Col.
Francis Fries and Robert Hanes in earlier decades of the last century." - John
Medlin
[GRAPHIC]
Wachovia Introduces EmployeeConnection
Wachovians now have access to an easy-to-use Web-based tool called
EmployeeConnection, which enables employees to view, update and maintain
personal and payroll-related information from the convenience of their desks.
The EmployeeConnection link is located in the left navigation bar of the
WNFO home page. It can be accessed from a personal workstation, a nonbranch PC
located anywhere in Wachovia or a shared PC, such as those in Employee
Information Centers and in branches.
"EmployeeConnection will largely eliminate the paperwork and significantly
reduce the time and expense associated with processing the most common employee
transactions," said Paul George, head of Human Resources. "All electronically
submitted data will serve as the legal equivalent to a signed, official
document."
EmployeeConnection is comprised of two parts - "My Information," which is
available now, and "My Pay," which will be available at the end of June. The "My
Information" section enables employees to view and maintain personal
information, including name, home address, telephone number, marital status,
emergency contacts, work phone numbers, mail code and PTO hours.
The "My Pay" section enables employees to view pay statements and maintain
discretionary payroll information, including direct deposit, federal and state
tax withholdings and selected payroll deductions.
Because verification of identity will be established when employees log on
to the network using their assigned username and password, clicking on the
EmployeeConnection link will provide direct access to personal information
contained in the system. To maintain confidentiality and privacy, employees
should lock their workstations when they leave their desks. Similarly, employees
using shared PCs or nonbranch terminals away from their normal workstations will
need to log off to prevent subsequent users from accessing their personal
information. Employees with limited or no access to WNFO may continue to contact
the Human Resources Service Center for assistance. Employees of Hamilton Dorsey
Alston will have access to EmployeeConnection after July 1.
3
The proposed merger of First Union and Wachovia will be submitted to First
Union's and Wachovia's stockholders for their consideration, and First Union has
filed a registration statement on Form S-4 with the SEC containing a preliminary
joint proxy statement/prospectus of First Union and Wachovia and other relevant
documents concerning the proposed transaction. Stockholders are urged to read
the definitive joint proxy statement/prospectus when it becomes available and
any other relevant documents filed with the SEC, as well as any amendments or
supplements to those documents, because they will contain important information.
You will be able to obtain a free copy of the registration statement and the
joint proxy statement/prospectus, as well as other filings containing
information about First Union and Wachovia, at the SEC's Internet site
(http://www.sec.gov). Copies of the joint proxy statement/prospectus and the SEC
filings that will be incorporated by reference in the joint proxy
statement/prospectus also can be obtained, without charge, by directing a
request to First Union, Investor Relations, One First Union Center, Charlotte,
North Carolina 28288-0206 (704-374-6782), or to Wachovia, Investor Relations,
100 North Main Street, Winston-Salem, North Carolina 27150 (888-492-6397).
First Union and Wachovia, their respective directors and executive officers
and certain other persons may be deemed to be participants in the solicitation
of proxies from the stockholders of First Union and Wachovia in connection with
the merger. Information about the directors and executive officers of First
Union and their ownership of First Union common stock is set forth in First
Union's proxy statement on Schedule 14A, as filed with the SEC on March 13,
2001. Information about the directors and executive officers of Wachovia and
their ownership of Wachovia common stock is set forth in Wachovia's proxy
statement on Schedule 14A, as filed with the SEC on March 19, 2001. Information
regarding the interests of other participants and additional information
regarding directors and officers of First Union and Wachovia may be obtained by
reading the registration statement, including Exhibit 99.8 thereto, and the
definitive joint proxy statement/prospectus regarding the proposed transaction
when it becomes available.
This newsletter may contain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, including, without
limitation, (i) statements about the benefits of the merger between First Union
Corporation and Wachovia Corporation, including future financial and operating
results, cost savings, enhanced revenues, and accretion to reported earnings
that may be realized from the merger; (ii) statements with respect to First
Union's and Wachovia's plans, objectives, expectations and intentions and other
statements that are not historical facts; and (iii) other statements identified
by words such as "believes", "expects", "anticipates", "estimates", "intends",
"plans", "targets", "projects" and similar expressions. These statements are
based upon the current beliefs and expectations of First Union's and Wachovia's
management and are subject to significant risks and uncertainties. Actual
results may differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements: (1) the risk that the businesses of First Union and
Wachovia will not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; (2) expected revenue
synergies and cost savings from the merger may not be fully realized or realized
within the expected time frame; (3) revenues following the merger may be lower
than expected; (4) deposit attrition, operating costs, customer loss and
business disruption following the merger, including, without limitation,
difficulties in maintaining relationships with employees, may be greater than
expected; (5) the ability to obtain governmental approvals of the merger on the
proposed terms and schedule; (6) the failure of First Union's and Wachovia's
stockholders to approve the merger; (7) competitive pressures among depository
and other financial institutions may increase significantly and have an effect
on pricing, spending, third-party relationships and revenues; (8) the strength
of the United States economy in general and the strength of the local economies
in which the combined company will conduct operations may be different than
expected resulting in, among other things, a deterioration in credit quality or
a reduced demand for credit, including the resultant effect on the combined
company's loan portfolio and allowance for loan losses; (9) changes in the U.S.
and foreign legal and regulatory framework; and (10) adverse conditions in the
stock market, the public debt market and other capital markets (including
changes in interest rate conditions) and the impact of such conditions on the
combined company's capital markets and asset management activities. Additional
factors that could cause First Union's and Wachovia's results to differ
materially from those described in the forward-looking statements can be found
in First Union's and Wachovia's reports (such as Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the
Securities and Exchange Commission and available at the SEC's Internet site
(http://www.sec.gov). All subsequent written and oral forward-looking statements
concerning the proposed transaction or other matters attributable to First Union
or Wachovia or any person acting on their behalf are expressly qualified in
their entirety by the cautionary statements above. First Union and Wachovia do
not undertake any obligation to update any forward-looking statement to reflect
circumstances or events that occur after the date the forward-looking statements
are made.
The Merger Process At a Glance
[GRAPHIC]
Wachovia and First Union are on track to complete the proposed merger in the
third quarter or early fourth quarter. There are several steps that must be
completed to close the legal transaction. Here is a look at the process and
progress of the Wachovia and First Union merger transaction.
1. Complete due diligence of proposed merger partner. This process helps each
company understand the pertinent facts about the other prior to entering into a
legal agreement to merge. Status: Completed.
2. Enter into legally binding merger agreement. This agreement, which must be
approved by the board of directors from each company, defines all terms and
conditions of the proposed merger. Status: Completed.
3. Obtain regulatory approval and proxy approval.
o Federal Reserve Board - The board of governors for the Federal Reserve
System establishes policies on such key matters as reserve requirements
and has regulartory authority over bank holding companies and their
nonbank subsidiaries. Status: Wachovia and First Union applied for Fed
approval of their proposed merger on May 8, 2001. Approval is anticipated
between July 19 and July 23.
o U.S. Department of Justice - The Department of Justice reviews anti-trust
issues for proposed mergers to determine any anti-competitive effects.
Status: Approval is anticipated in the next few weeks.
o U.S. Securities and Exchange Commission - The SEC is the federal agency
that oversees the issuance of securities to the public and protects
against malpractice in the securities markets. Status: Wachovia and First
Union filed a preliminary proxy statement with the SEC on May 25 and hope
to receive clearance from the SEC by late June. Immediately following SEC
clearance, Wachovia will mail the proxy to shareholders.
4. Shareholder Vote. Shareholders of First Union and Wachovia will be asked to
vote on the two companies' merger of equals at their respective annual
shareholders meetings. Status: First Union's annual meeting will be held on July
31, 2001, in Charlotte, and Wachovia's annual meeting will be held on Aug. 3,
2001, in Winston-Salem.
The Proxy Process
Continued from page 1
Wachovia shareholders must submit their proxy by mail or vote in person at
the shareholders meeting. Internet and telephone voting will not be accepted.
Proxy Solicitation
Wachovia has launched a campaign to encourage support for its proposed
merger with First Union and will begin soliciting votes for the merger
immediately following the mailing of its proxy materials. This campaign is being
conducted on many fronts, including advertising, shareholder mailings, branch
merchandising and group meetings with key constituents. Wachovia recently
provided information to shareholders in a booklet called Wachovia and First
Union Plan to Merge. Why Should You Vote "Yes"? The booklet helps simplify the
complicated merger process. It explains some of the reasons why Wachovia's board
and senior management believe that a combination with First Union represents the
best growth strategy for Wachovia shareholders and the most value for its
employees, customers and communities served. Additional copies can be ordered by
calling MacKenzie Partners, Wachovia's proxy solicitor, at 800-322-2885.
Wachovia also established a Merger Information Center for employees and
shareholders earlier this month. By calling a toll-free number (866-405-5305 for
employees/retirees, 866-883-0789 for shareholders), callers can ask questions,
provide feedback and learn more about the proposed merger with First Union.
Representatives are available weekdays from 8 a.m. to 6 p.m.
Determining the Results
Wachovia has approximately 203 million shares of outstanding stock, which
is divided between institutional investors and retail investors. Institutional
shareholders represent mutual funds, pension funds, investment companies and
endowments. The majority of institutional investors will submit proxies to the
independent proxy processing facility, which will not submit a final count of
all proxies received until the day of the shareholders meeting.
Voting will end after the approval of a motion to close the polls during
the shareholders meeting on Aug. 3, 2001. Final votes, including proxy cards
held by Wachovia and SunTrust, will be turned over to independent inspectors.
These inspectors will tabulate the final votes and are expected to announce
tabulation results within two to three weeks after the shareholder meeting.
These results could be challenged by either Wachovia or SunTrust. If a
challenge is made, inspectors will rule on any votes in question. Once the vote
has been approved by Wachovia and SunTrust, the results are certified.
If the proposal is approved and First Union shareholders approve a similar
proposal to merge with Wachovia, the two companies will move forward to close
the transaction.
"I am confident that the combination of Wachovia and First Union will
create the finest financial institution in the East, if not the nation," said
Bud Baker, chief executive officer. "This vote will shape the future of
Wachovia. I hope that we look back upon it as the moment we chose to make the
dream of a new Wachovia a reality." WN
Visit Merger Matters on WNFO or the Merger News section on
wachovia.com for the latest information.
Wachovia News
A publication for Wachovia employees and retirees Volume 13, No. 6
Published monthly by Corporate Communications for employees, retirees and
directors of Wachovia Corporation and its member companies.(C)Wachovia
Corporation 2001
Submissions or requests for articles should be made by the 15th day of the month
prior to publication.
EDITORIAL OFFICES: (336) 732-5092
Corporate Communications, Mail Code NC-37283
Wachovia Corporation
100 North Main Street
Winston-Salem, N.C. 27101
CORPORATE COMMUNICATIONS MANAGER: EDITOR:
Greer Cawood Paul Grantham e-mail: paul.grantham@wachovia.com
CONTRIBUTING WRITERS: SUPPORT STAFF:
Sharon Berry, Paul Grantham Sheila Burns, Naomi Kountz, Denise Roop
LAYOUT & DESIGN: PRINTING:
Paul Grantham Progress Printing
Wachovia, An Equal Opportunity Employer.
4
Additional Information
The proposed transaction will be submitted to First Union's and Wachovia's
stockholders for their consideration, and, on June 27, 2001, First Union filed
an amended registration statement on Form S-4 with the SEC containing a
preliminary joint proxy statement/prospectus of First Union and Wachovia and
other relevant documents concerning the proposed transaction. Stockholders are
urged to read the definitive joint proxy statement/prospectus when it becomes
available and any other relevant documents filed with the SEC, as well as any
amendments or supplements to those documents, because they will contain
important information. You will be able to obtain a free copy of the
registration statement and the joint proxy statement/prospectus, as well as
other filings containing information about First Union and Wachovia, at the
SEC's Internet site (http://www.sec.gov). Copies of the joint proxy
statement/prospectus and the SEC filings that will be incorporated by reference
in the joint proxy statement/prospectus can also be obtained, without charge, by
directing a request to First Union, Investor Relations, One First Union Center,
Charlotte, North Carolina 28288-0206 (704-374-6782), or to Wachovia, Investor
Relations, 100 North Main Street, Winston-Salem, North Carolina 27150
(888-492-6397).
First Union and Wachovia, and their respective directors and executive officers,
and others may be deemed to be participants in the solicitation of proxies from
the stockholders of First Union and Wachovia in connection with the merger.
Information about the directors and executive officers of First Union and their
ownership of First Union common stock is set forth in First Union's proxy
statement on Schedule 14A, as filed with the SEC on March 13, 2001. Information
about the directors and executive officers of Wachovia and their ownership of
Wachovia common stock is set forth in Wachovia's proxy statement on Schedule
14A, as filed with the SEC on March 19, 2001. Additional information regarding
the interests of participants may be obtained by reading the registration
statement and the definitive joint proxy statement/prospectus regarding the
proposed transaction when it becomes available.
This newsletter may contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including, without limitation,
(i) statements about the benefits of the merger between First Union Corporation
and Wachovia Corporation, including future financial and operating results, cost
savings, enhanced revenues, and accretion to reported earnings that may be
realized from the merger; (ii) statements with respect to First Union's and
Wachovia's plans, objectives, expectations and intentions and other statements
that are not historical facts; and (iii) other statements identified by words
such as "believes", "expects", "anticipates", "estimates", "intends", "plans",
"targets", "projects" and similar expressions. These statements are based upon
the current beliefs and expectations of First Union's and Wachovia's management
and are subject to significant risks and uncertainties. Actual results may
differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements: (1) the risk that the businesses of First Union and
Wachovia will not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; (2) expected revenue
synergies and cost savings from the merger may not be fully realized or realized
within the expected time frame; (3) revenues following the merger may be lower
than expected; (4) deposit attrition, operating costs, customer loss and
business disruption following the merger, including, without limitation,
difficulties in maintaining relationships with employees, may be greater than
expected; (5) the ability to obtain governmental approvals of the merger on the
proposed terms and schedule; (6) the failure of First Union's and Wachovia's
stockholders to approve the merger; (7) competitive pressures among depository
and other financial institutions may increase significantly and have an effect
on pricing, spending, third-party relationships and revenues; (8) the strength
of the United States economy in general and the strength of the local economies
in which the combined company will conduct operations may be different than
expected resulting in, among other things, a deterioration in credit quality or
a reduced demand for credit, including the resultant effect on the combined
company's loan portfolio and allowance for loan losses; (9) changes in the U.S.
and foreign legal and regulatory framework; and (10) adverse conditions in the
stock market, the public debt market and other capital markets (including
changes in interest rate conditions) and the impact of such conditions on the
combined company's capital markets and asset management activities. Additional
factors that could cause First Union's and Wachovia's results to differ
materially from those described in the forward-looking statements can be found
in First Union's and Wachovia's reports (such as Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the
Securities and Exchange Commission and available at the SEC's Internet site
(http://www.sec.gov). All subsequent written and oral forward-looking statements
concerning the proposed transaction or other matters attributable to First Union
or Wachovia or any person acting on their behalf are expressly qualified in
their entirety by the cautionary statements above. First Union and Wachovia do
not undertake any obligation to update any forward-looking statement to reflect
circumstances or events that occur after the date the forward-looking statements
are made.