SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- ------------------------------------------------------------------------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE):
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________________ to _____________________
Commission File Number 1-10000
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
QUESTPOINT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
FIRST UNION CORPORATION
ONE FIRST UNION CENTER
CHARLOTTE, NORTH CAROLINA 28288-0013
(a) The following financial statements and reports, which have
been prepared pursuant to the requirements of the Employee Retirement Income
Security Act of 1974, are filed as part of this Annual Report on Form 11-K:
Report of Independent Auditors.
Financial Statements and Supplemental Schedules:
Statement of Assets Available for Benefits, January 14, 1999.
Statement of Assets Available for Benefits, December 31, 1998.
Statement of Assets Available for Benefits, December 31, 1997.
Statement of Changes in Assets Available for
Benefits, for the period January 1, 1999 through January 14,
1999.
Statement of Changes in Assets Available for Benefits, for the year
ended December 31, 1998.
Statement of Changes in Assets Available for Benefits, for the year
ended December 31, 1997.
Notes to Financial Statements.
Line 27a-Assets Held for Investment Purposes, December 31, 1998.
Line 27d-Reportable Transactions, for the year ended December 31,
1998.
(b) The following Exhibit is filed as part of this Annual Report on
Form 11-K:
Consent of Independent Auditors.
Financial Statements and Supplemental Schedules
and Supplemental Schedules
QuestPoint Savings Plan
FOR THE PERIOD FROM JANUARY 1, 1999 TO
JANUARY 14, 1999 AND THE YEARS ENDED
DECEMBER 31, 1998 AND 1997
WITH REPORT OF INDEPENDENT AUDITORS
QuestPoint Savings Plan
Financial Statements
and Supplemental Schedules
For the Period from January 1, 1999 to
January 14, 1999 and the
Years ended December 31, 1998 and 1997
CONTENTS
Report of Independent Auditors...........................................................................1
Audited Financial Statements
Statement of Assets Available for Benefits, January 14, 1999.............................................2
Statement of Assets Available for Benefits, December 31, 1998............................................3
Statement of Assets Available for Benefits, December 31, 1997............................................4
Statement of Changes in Assets Available for Benefits, for the period January 1, 1999 through January
14, 1999.............................................................................................5
Statement of Changes in Assets Available for Benefits, for the year ended December 31, 1998..............6
Statement of Changes in Assets Available for Benefits, for the year ended December 31, 1997..............7
Notes to Financial Statements............................................................................8
Supplemental Schedules
Line 27a-Schedule of Assets Held for Investment Purposes, December 31, 1998.............................14
Line 27d-Schedule of Reportable Transactions, for the year ended December 31, 1998.....................15
Report of Independent Auditors
The Board of Directors
First Union Corporation
We have audited the accompanying financial statements of the QuestPoint Savings
Plan as of January 14, 1999, December 31, 1998 and 1997, and for the period
January 1, 1999 to January 14, 1999, and for the years ended December 31, 1998
and 1997 as listed in the table of contents. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan at January
14, 1999, December 31, 1998 and 1997 and the changes in its assets available for
benefits for the period January 1, 1999 through January 14, 1999 and for the
years ended December 31, 1998 and 1997, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1998 and reportable
transactions for the period from January 1, 1999 through January 14, 1999 and
the year ended December 31, 1998, are presented for purposes of additional
analysis and are not a required part of the financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules are the responsibility of
management. The Fund Information in the statements of assets available for
benefits and the statements of changes in assets available for benefits is
presented for purposes of additional analysis rather than to present the assets
available for benefits and changes in assets available for benefits of each
fund. The supplemental schedules and Fund Information have been subjected to
the auditing procedures applied in our audit of the financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
1
The information presented in the Schedule of Assets Held for Investment Purposes
does not disclose the historical cost of investments. Disclosure of this
information is required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974.
/s/ Ernst & Young LLP
- ---------------------
June 11, 1999
2
QuestPoint Savings Plan
Statement of Assets Available for Benefits, with Fund Information
January 14, 1999
FUND INFORMATION
----------------------------------------------------------------------------------------------------
EVERGREEN EVERGREEN EVERGREEN EVERGREEN
FIRST UNION SELECT SELECT SELECT EVERGREEN EVERGREEN SELECT
COMMON STRATEGIC INCOME PLUS FIXED MONEY FOUNDATION EQUITY
TOTAL STOCK FUND GROWTH FUND FUND INCOME FUND MARKET FUND FUND INDEX FUND
----------------------------------------------------------------------------------------------------
ASSETS
Investments, at fair value:
First Union Corporation
Common Stock $ - $ - $ - $ - $ - $ - $ - $ -
Mutual funds - - - - - - - -
Participants' notes
receivable - - - - - - - -
Total investments - - - - - - -
----------------------------------------------------------------------------------------------------
Assets available for benefits $ - $ - $ - $ - $ - $ - $ - $ -
====================================================================================================
-------------------------------------
EVERGREEN
EVERGREEN STOCK
INTERNATIONAL SELECTOR LOAN
GROWTH FUND FUND FUND
-------------------------------------
ASSETS
Investments, at fair value:
First Union Corporation
Common Stock $ - $ - $ -
Mutual funds - - -
Participants' notes
receivable - - -
Total investments - - -
-------------------------------------
Assets available for benefits $ - $ - $ -
=====================================
SEE ACCOMPANYING NOTES.
2
QuestPoint Savings Plan
Statement of Assets Available for Benefits, with Fund Information
December 31, 1998
FUND INFORMATION
----------------------------------------------------------------------------------------------------
EVERGREEN EVERGREEN EVERGREEN EVERGREEN
FIRST UNION SELECT SELECT SELECT EVERGREEN EVERGREEN SELECT
COMMON STRATEGIC INCOME PLUS FIXED MONEY FOUNDATION EQUITY
TOTAL STOCK FUND GROWTH FUND FUND INCOME FUND MARKET FUND FUND INDEX FUND
----------------------------------------------------------------------------------------------------
ASSETS
Investments, at fair value:
First Union Corporation
Common Stock $1,175,784 $ 1,175,784 $ - $ - $ - $ - $ - $ -
Mutual funds 2,700,892 - 756,596 38,520 183,900 399,104 390,396 577,639
Participants' notes
receivable 250,924 - - - - - - -
----------------------------------------------------------------------------------------------------
Total investments 4,127,600 1,175,784 756,596 38,520 183,900 399,104 390,396 577,639
----------------------------------------------------------------------------------------------------
Assets available for benefits $4,127,600 $ 1,175,784 $ 756,596 $ 38,520 $ 183,900 $ 399,104 $ 390,396 $ 577,639
====================================================================================================
-------------------------------------
EVERGREEN
EVERGREEN STOCK
INTERNATIONAL SELECTOR LOAN
GROWTH FUND FUND FUND
-------------------------------------
ASSETS
Investments, at fair value:
First Union Corporation
Common Stock $ - $ - $ -
Mutual funds 221,477 133,260
Participants' notes
receivable - - 250,924
-------------------------------------
Total investments 221,477 133,260 250,924
-------------------------------------
Assets available for benefits $ 221,477 $ 133,260 $ 250,924
=====================================
SEE ACCOMPANYING NOTES.
3
QuestPoint Savings Plan
Statement of Assets Available for Benefits, with Fund Information
December 31, 1997
FUND INFORMATION
--------------------------------------------------------------------------------------------------
GROWTH SHORT-TERM CASH EQUITY
COMMON EQUITY BOND INTERMEDIATE RESERVE BALANCED INDEX
TOTAL STOCK FUND FUND FUND BOND FUND FUND FUND FUND
--------------------------------------------------------------------------------------------------
ASSETS
Investments, at fair value:
CoreStates Financial Corp
Common Stock $ 1,029,253 $ 1,029,253 $ - $ - $ - $ - $ - $ -
Mutual funds 2,490,064 3,309 582,584 27,410 157,645 424,486 348,780 592,011
Participants' notes
receivable 143,043 - - - - - - -
--------------------------------------------------------------------------------------------------
Total investments 3,662,360 1,032,562 582,584 27,410 157,645 424,486 348,780 592,011
Receivables:
Due from broker 37,694 5,210 - 9,702 - - 4,320 9,234
Accrued investment income 13,672 6,239 - 138 771 - 1,798 1,896
Interfund receivable 2,592 - - - - - - -
Cash 37,583 2,846 21,625 - 10,263 - - -
--------------------------------------------------------------------------------------------------
Total assets 3,753,901 1,046,857 604,209 37,250 168,679 424,486 354,898 603,141
LIABILITIES
Interfund payable 2,592 - - - - 2,592 - -
Due to broker 20,581 - 11,107 - 7,263 - - -
Other liabilities 35,543 - - 9,542 - 21,978 719 349
--------------------------------------------------------------------------------------------------
Total liabilities 58,716 - 11,107 9,542 7,263 24,570 719 349
--------------------------------------------------------------------------------------------------
Assets available for
benefits $ 3,695,185 $ 1,046,857 $ 593,102 $ 27,708 $ 161,416 $ 399,916 $ 354,179 $ 602,792
==================================================================================================
--------------------------------------------------
INTERNATIONAL EMPLOYEE
GROWTH EQUITY LOAN CONTRIBUTION
FUND FUND FUND FUND
--------------------------------------------------
ASSETS
Investments, at fair value:
CoreStates Financial Corp
Common Stock $ - $ - $ - $ -
Mutual funds 212,328 128,204 189 13,118
Participants' notes
receivable - - 143,043 -
--------------------------------------------------
Total investments 212,328 128,204 143,232 13,118
Receivables:
Due from broker 9,228 - - -
Accrued investment income 2,759 71 - -
Interfund receivable - - 2,592 -
Cash - 2,790 - 59
------------------------------------------------
Total assets 224,315 131,065 145,824 13,177
LIABILITIES
Interfund payable - - - -
Due to broker - 2,211 - -
Other liabilities 2,955 - - -
--------------------------------------------------
Total liabilities 2,955 2,211 - -
--------------------------------------------------
Assets available for
benefits $ 221,360 $ 128,854 $ 145,824 $ 13,177
==================================================
SEE ACCOMPANYING NOTES.
4
QuestPoint Savings Plan
Statement of Changes in Assets Available for Benefits, with Fund Information
For the period January 1, 1999 through January 14, 1999
FUND INFORMATION
----------------------------------------------------------------------------------------------------
FIRST EVERGREEN EVERGREEN EVERGREEN EVERGREEN
UNION SELECT SELECT SELECT EVERGREEN EVERGREEN SELECT
COMMON STRATEGIC INCOME FIXED MONEY FOUNDATION EQUITY
TOTAL STOCK FUND GROWTH FUND PLUS FUND INCOME FUND MARKET FUND FUND INDEX FUND
----------------------------------------------------------------------------------------------------
Additions:
Net appreciation
(depreciation) in
fair value of investments $ 31,440 $ 32,790 $ (11,307) $ (173) $ (468) $ 648 $ 386 $ 5,571
Deductions:
Transfer to First Union
Corporation Savings Plan (4,159,040) (1,208,574) (745,289) (38,347) (183,432) (399,752) (390,782) (583,210)
----------------------------------------------------------------------------------------------------
Net decrease (4,127,600) (1,175,784) (756,596) (38,520) (183,900) (399,104) (390,396) (577,639)
Assets available for benefits
at beginning of year 4,127,600 1,175,784 756,596 38,520 183,900 399,104 390,396 577,639
----------------------------------------------------------------------------------------------------
Assets available for benefits
at January 14, 1999 $ - $ - $ - $ - $ - $ - $ - $ -
====================================================================================================
--------------------------------------------
EVERGREEN EVERGREEN
INTERNATIONAL STOCK LOAN
GROWTH FUND SELECTOR FUND FUND
--------------------------------------------
Additions:
Net appreciation
(depreciation) in
fair value of investments $ 2,228 $ 1,765 $ -
Deductions:
Transfer to First Union
Corporation Savings Plan (223,705) (135,025) (250,924)
--------------------------------------------
Net decrease (221,477) (133,260) (250,924)
Assets available for benefits
at beginning of year 221,477 133,260 250,924
--------------------------------------------
Assets available for benefits
at January 14, 1999 $ - $ - $ -
============================================
SEE ACCOMPANYING NOTES.
5
QuestPoint Savings Plan
Statement of Changes in Assets Available for Benefits, with Fund Information
Year ended December 31, 1998
FUND INFORMATION
---------------------------------------------------------------------------------------------
FIRST EVERGREEN EVERGREEN EVERGREEN EVERGREEN
UNION SELECT SELECT SELECT EVERGREEN EVERGREEN SELECT
COMMON STRATEGIC INCOME FIXED MONEY FOUNDATION EQUITY
TOTAL STOCK FUND GROWTH FUND PLUS FUND INCOME FUND MARKET FUND FUND INDEX FUND
---------------------------------------------------------------------------------------------
Additions:
Contributions:
Employer $ 847,866 $ 67,897 $ 49,202 $ 6,231 $ 17,231 $ 37,721 $ 28,744 $ 47,125
Employee 883,065 69,765 51,269 5,816 17,676 38,167 30,198 50,255
Rollovers 8,453 765 1,531 - 765 460 - -
---------------------------------------------------------------------------------------------
Total contributions 1,739,384 138,427 102,002 12,047 35,672 76,348 58,942 97,380
Interest on loans 10,193 1,503 714 35 288 374 307 506
Net appreciation
(depreciation) in
fair value of investments 838,733 466,806 115,725 1,525 8,660 8,137 26,763 172,064
---------------------------------------------------------------------------------------------
Total additions 2,588,310 606,736 218,441 13,607 44,620 84,859 86,012 269,950
Deductions:
Participants' withdrawals 440,553 37,398 10,310 1,481 7,014 17,217 18,683 14,803
Transfer to Regulus 401(k)
Plan 963,617 259,448 191,430 8,578 49,567 92,640 56,378 160,140
Transfer to Bankline 401(k)
Plan 419,656 117,905 46,225 13,458 6,393 16,758 47,371 66,781
Transfer to CoreStates
Financial Corp Employer
Stock Ownership and
Savings Plan 332,069 - - - - - - -
---------------------------------------------------------------------------------------------
Total deductions 2,155,895 414,751 247,965 23,517 62,974 126,615 122,432 241,724
---------------------------------------------------------------------------------------------
Net increase (decrease) prior
to interfund transfers 432,415 191,985 (29,524) (9,910) (18,354) (41,756) (36,420) 28,226
Transfer of Corefunds to First
Union funds - 1,016,691 803,587 50,447 203,324 463,066 424,119 564,727
Participants' interfund
transfers - (32,892) (17,467) (2,017) (1,070) (22,206) 2,697 (15,314)
---------------------------------------------------------------------------------------------
Net increase (decrease) 432,415 1,175,784 756,596 38,520 183,900 399,104 390,396 577,639
Assets available for benefits
at beginning of year 3,695,185 - - - - - - -
---------------------------------------------------------------------------------------------
Assets available for benefits
at end of year $4,127,600 $1,175,784 $ 756,596 $ 38,520 $ 183,900 $ 399,104 $ 390,396 $ 577,639
=============================================================================================
---------------------------------------------------------------------------------------
EVERGREEN FIRST COREFUND COREFUND COREFUND
EVERGREEN STOCK UNION CORESTATES GROWTH COREFUND INTERMEDIATE CASH
INTERNATIONAL SELECTOR LOAN COMMON EQUITY BOND BOND RESERVE
GROWTH FUND FUND FUND STOCK FUND FUND FUND FUND BOND
---------------------------------------------------------------------------------------
Additions:
Contributions:
Employer $ 21,298 $ 20,451 $ - $ - $ - $ - $ - $ -
Employee 21,398 21,649 - - - - - -
Rollovers - - - 2,466 2,466 - - -
---------------------------------------------------------------------------------------
Total contributions 42,696 42,100 - 2,466 2,466 - - -
Interest on loans 304 167 - - - - - -
Net appreciation
(depreciation) in
fair value of investments (4,046) 16,530 - (214,281) 132,161 1,802 5,763 14,634
---------------------------------------------------------------------------------------
Total additions 38,954 58,797 - (2,118,815) 134,627 1,802 5,763 14,634
Deductions:
Participants' withdrawals 3,671 8,194 - 1,206 - - - -
Transfer to Regulus 401(k)
Plan 67,106 49,539 28,791 - - - - -
Transfer to Bankline 401(k)
Plan 26,299 69,063 9,403 - - - - -
Transfer to CoreStates
Financial
Corp Employer Stock
Ownership and Savings Plan - - - 2,764 58,079 2,359 10,352 (11,242)
---------------------------------------------------------------------------------------
Total deductions 97,076 126,796 38,194 3,970 58,079 2,359 10,352 (11,242)
---------------------------------------------------------------------------------------
Net increase (decrease) prior
to interfund transfers (58,122) (67,999) (38,194) (215,785) 76,548 (557) (4,589) 25,876
Transfer of Corefunds to First
Union funds 285,534 203,981 192,192 (1,016,691) (803,587) (50,447) (203,324) (463,066)
Participants' interfund
transfers (5,935) (2,722) 96,926 185,619 133,937 23,296 46,497 37,274
---------------------------------------------------------------------------------------
Net increase (decrease) 221,477 133,260 250,924 (1,046,857) (593,102) (27,708) (161,416) (399,916)
Assets available for benefits
at beginning of year - - - 1,046,857 593,102 27,708 161,416 399,916
---------------------------------------------------------------------------------------
Assets available for benefits
at end of year $ 221,477 $133,260 $ 250,924 $ - $ - $ - $ - $ -
=======================================================================================
-------------------------------------------------------------------------------------
COREFUND COREFUND CORESTATES
COREFUND EQUITY INTERNATIONAL COREFUND PARTICIPANT CORESTATES CORESTATES
BALANCED INDEX GROWTH EQUITY LOAN CONTRIBUTION DISTRIBUTION
FUND FUND FUND FUND FUND FUND FUND
-------------------------------------------------------------------------------------
Additions:
Contributions:
Employer $ - $ - $ - $ - $ - $ 551,966 $ -
Employee - - - - - 576,872 -
Rollovers - - - - - - -
--------------------------------------------------------------------------------------
Total contributions - - - - - 1,128,838 -
Interest on loans - - - - 5,995 - -
Net appreciation
(depreciation) in
fair value of investments 59,849 (2,809) 22,728 6,409 - 300 13
--------------------------------------------------------------------------------------
Total additions 59,849 (2,809) 22,728 6,409 5,995 1,129,138 13
Deductions:
Participants' withdrawals - - - - - - 320,576
Transfer to Regulus 401(k)
Plan - - - - - - -
Transfer to Bankline 401(k)
Plan - - - - - - -
Transfer to CoreStates
Financial
Corp Employer Stock
Ownership and Savings Plan 72,265 126,294 18,762 15,836 32,989 3,611 -
--------------------------------------------------------------------------------------
Total deductions 72,265 126,294 18,762 15,836 32,989 3,611 320,576
--------------------------------------------------------------------------------------
Net increase (decrease) prior
to interfund transfers (12,416) (129,103) 3,966 (9,427) (26,994) 1,125,527 (320,563)
Transfer of Corefunds to First
Union funds (424,119) (564,727) (285,534) (203,981) (192,192) - -
Participants' interfund
transfers 82,356 91,038 60,208 84,554 73,362 (1,138,704) 320,563
--------------------------------------------------------------------------------------
Net increase (decrease) (354,179) (602,792) (221,360) (128,854) (145,824) (13,177) -
Assets available for benefits
at beginning of year 354,179 602,792 221,360 128,854 145,824 13,177 -
--------------------------------------------------------------------------------------
Assets available for benefits
at end of year $ - $ - $ - $ - $ - $ - $ -
======================================================================================
SEE ACCOMPANYING NOTES.
6
QuestPoint Savings Plan
Statement of Changes in Assets Available for Benefits, with Fund Information
Year ended December 31, 1997
FUND INFORMATION
--------------------------------------------------------------------------------------
GROWTH SHORT-TERM CASH EQUITY
COMMON EQUITY BOND INTERMEDIATE RESERVE BALANCED INDEX
TOTAL STOCK FUND FUND FUND BOND FUND FUND FUND FUND
--------------------------------------------------------------------------------------
Additions:
Contributions:
Employer $ 726,188 $ - $ - $ - $ - $ - $ - $ -
Employee 788,359 - - - - - - -
Rollovers 101,036 21,098 1,932 2,550 2,603 - 18,178 10,042
--------------------------------------------------------------------------------------
Total contributions 1,615,583 21,098 1,932 2,550 2,603 - 18,178 10,042
Transfer from FTI 401(k) Savings
and Retirement Plan 281,618 - - - - - - -
Transfer from CoreStates
Financial Corp Employee
Stock Ownership and Savings
Plan 1,369,671 411,819 213,356 26,139 50,195 81,829 189,857 215,300
Investment income:
Interest and dividends 42,897 591 1,476 846 5,503 16,111 5,286 6,253
Dividends on CoreStates
Financial Corp Common
Stock 16,285 16,285 - - - - - -
Distribution of mutual fund
income 95,551 - 38,352 - - - 17,967 17,603
--------------------------------------------------------------------------------------
Total investment income 154,733 16,876 39,828 846 5,503 16,111 23,253 23,856
Net appreciation (depreciation)
in fair value of investments 422,039 285,595 61,975 639 2,067 - 6,130 72,211
--------------------------------------------------------------------------------------
Total additions 3,843,644 735,388 317,091 30,174 60,368 97,940 237,418 321,409
Deductions:
Participants' withdrawals 126,430 3,722 - - - - - -
Other miscellaneous
disbursements 22,029 - - - - - - -
--------------------------------------------------------------------------------------
Total deductions 148,459 3,722 - - - - - -
--------------------------------------------------------------------------------------
Net increase (decrease) prior to
transfers 3,695,185 731,666 317,091 30,174 60,368 97,940 237,418 321,409
Participants' interfund transfers - 315,191 276,011 (2,466) 101,048 301,976 116,761 281,383
--------------------------------------------------------------------------------------
Net increase 3,695,185 1,046,857 593,102 27,708 161,416 399,916 354,179 602,792
Assets available for benefits
at beginning of year - - - - - - - -
--------------------------------------------------------------------------------------
Assets available for benefits
at end of year $3,695,185 $1,046,857 $ 593,102 $ 27,708 $ 161,416 $ 399,916 $ 354,179 $ 602,792
======================================================================================
----------------------------------------------------------
INTERNATIONAL EMPLOYEE
GROWTH EQUITY LOAN CONTRIBUTION DISTRIBUTION
FUND FUND FUND FUND FUND
----------------------------------------------------------
Additions:
Contributions:
Employer $ - $ - $ - $ 726,188 $ -
Employee - - - 788,359 -
Rollovers 15,760 28,873 - - -
----------------------------------------------------------
Total contributions 15,760 28,873 - 1,514,547 -
Transfer from FTI 401(k) Savings
and Retirement Plan - - - 281,618 -
Transfer from CoreStates
Financial Corp Employee
Stock Ownership and
Savings Plan 83,537 5,302 92,337 - -
Investment income:
Interest and dividends 2,791 207 2,603 1,158 72
Dividends on CoreStates
Financial Corp Common Stock - - - - -
Distribution of mutual fund
income 5,279 16,350 - - -
----------------------------------------------------------
Total investment income 8,070 16,557 2,603 1,158 72
Net appreciation (depreciation)
in fair value of investments (4,339) (2,239) - - -
----------------------------------------------------------
Total additions 103,028 48,493 94,940 1,797,323 72
Deductions:
Participants' withdrawals - - - - 122,708
Other miscellaneous
disbursements - - - - 22,029
----------------------------------------------------------
Total deductions - - - - 144,737
----------------------------------------------------------
Net increase (decrease) prior to
transfers 103,028 48,493 94,940 1,797,323 (144,665)
Participants' interfund transfers 118,332 80,361 50,884 (1,784,146) 144,665
----------------------------------------------------------
Net increase 221,360 128,854 145,824 13,177 -
Assets available for benefits
at beginning of year - - - - -
----------------------------------------------------------
Assets available for benefits -
at end of year $ 221,360 $ 128,854 $ 145,824 $ 13,177 $ -
==========================================================
SEE ACCOMPANYING NOTES.
7
QuestPoint Savings Plan
Notes to Financial Statements
For the Period from January 1, 1999 through January 14, 1999 and Years ended
December 31, 1998 and 1997
1. DESCRIPTION OF THE PLAN
The following brief description of the QuestPoint Savings Plan (the Plan) is
provided for general information only. Participants should refer to the Plan
Agreement for more complete information.
GENERAL
The Plan is a defined contribution plan which covers qualified employees of
QuestPoint Holdings, Inc. (the Company), a subsidiary of CoreStates Financial
Corp (CoreStates), and certain of the Company's subsidiaries. The Plan became
effective on January 1, 1997, and is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
Effective January 1, 1997, the participants of the FTI 401(k) Savings and
Retirement Plan (FTI Plan) became eligible for coverage under the Plan. Net
assets of the FTI Plan in the amount of $281,618 were transferred to the Plan on
January 6, 1997.
Effective January 1, 1997, certain participants of the CoreStates Financial Corp
savings and Stock Ownership Plan (CoreStates Plan) became eligible for coverage
under the Plan. Net assets of the CoreStates Plan in the amount of $1,369,671
were transferred to the Plan in 1997.
On April 28, 1998, the Plan sponsor, CoreStates, was acquired by First Union
Corporation (successor plan sponsor). As a result of the merger, each share of
the Plan's investments in CoreStates common stock was exchanged for 1.62 shares
of First Union Corporation common stock. Additionally, the individual CoreFunds
investment options were converted into First Union's Family of Evergreen Funds
on July 28, 1998. The conversion was executed dollar for dollar with no related
gain or loss recognized. The CoreStates recordkeeping system was converted to a
daily recordkeeping system. As a result of this conversion a blackout period
began on July 22, 1998 and continued through November 16, 1998. During the
blackout period participants could not request loans, make withdrawals, transfer
existing fund balances, or request a full distribution from the Plan.
8
QuestPoint Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
Pursuant to an acquisition agreement dated July 30, 1998 between Regulus
Mid-Atlantic LLC, Regulus Northwest LLC, Regulus West LLC, Regulus Canada, Inc.,
Regulus Group LLC (collectively, "Regulus"), QuestPoint Remittance Services,
L.P., Philadelphia International Equities, Inc., CashFlex Inc. and First Union
Corporation (collectively, "First Union"), First Union sold to Regulus certain
QuestPoint lockbox remittance processing and data entry processing businesses.
As a result of the sale, certain covered employees who participated in the Plan
transferred to Regulus effective November 1, 1998. The net assets in the Plan
related to these participants (approximately $964,000) were transferred to the
Regulus 401(k) Plan in 1998.
Also, pursuant to an acquisition agreement between Bankline Holding, Inc.
("Bankline"), QuestPoint and QuestPoint Check Services, L.P. dated September 29,
1998, QuestPoint sold to Bankline its business of providing back office,
end-to-end check processing for unaffiliated financial institutions. As a result
of the sale, certain covered employees who participated in the Plan transferred
to Bankline or a Bankline affiliate effective December 1, 1998. Approximately
$420,000 related to these participants was transferred to the Bankline 401(k) in
1998.
The Plan merged with the First Union Corporation Savings Plan on January 1,
1999. The net assets of the Plan (approximately $4.2 million) were transferred
into the First Union Corporation Savings Plan on January 14, 1999.
CONTRIBUTIONS
EMPLOYEE
Employees can contribute on either an after-tax or a before-tax basis (up
to $10,000 in 1998, $9,500 in 1997) equal to any whole percentage of the
participant's compensation up to 12% of their compensation for each payroll
period.
EMPLOYER
The Company makes a contribution to the Plan on behalf of each participant
who has made basic contributions in each payroll period. The Company
matches 150% on the first 2% and 100% on 3% to 6% of a participant's
contribution.
Upon merger into the First Union Savings Plan, First Union will match 100% on
the first 6% of basic contribution. The first 1% of this match will be made in
First Union Common Stock. Additionally, participants will be permitted to have
three loans outstanding at any one time.
9
QuestPoint Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
VESTING
Employee contributions, rollovers, and qualified voluntary employee contribution
accounts, as affected by investment results, are fully vested at all times.
Effective July 28, 1998, all active employees who were participants in the Plan
became 100% vested in employer matching contributions. For the remaining
duration of the Plan all new participants were 100% vested immediately.
Prior to July 28, 1998, employer contributions were vested as follows:
PARTICIPANT'S YEARS PERCENTAGE VESTED OF EMPLOYER
OF VESTING SERVICE MATCHING CONTRIBUTION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Less than 2 years 0%
2 years but less than 3 years 50%
3 years or more 100%
EXPENSES
The expenses of the Plan, including but not limited to legal and accounting
fees, shall be paid by the Plan unless paid by the Company. The expenses of the
Plan were paid by the Company for the periods presented.
PAYMENT OF BENEFITS
Prior to the blackout period, upon termination of employment, a participant
could receive vested benefits as a lump-sum payment. Subsequent to the blackout
period, if the participant's vested accrued benefit exceeds $3,500, the
participant can elect to receive equal annual installments over a period not
exceeding ten years, or may leave the money in their account until a deferred
payment date (last day of any month up to normal retirement age). Subsequent to
the blackout period, participants must receive vested benefits as a lump sum
payment if that participant's vested accrual benefit does not exceed $3,500.
10
QuestPoint Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
LOANS
Active participants, terminated participants and beneficiaries with accrued
benefits under the Plan, may borrow funds from the Plan subject to requirements
of the Plan. Loans advanced against employees' vested benefits in the Plan are
deducted from the amount of any benefits which are payable to the participant
upon termination.
WITHDRAWALS
A participant shall be permitted to withdraw all or a portion of the amount in
the participant's after-tax contribution account subject to the restrictions or
penalties as set forth in the Plan. Before-tax contributions and vested employer
contributions can be withdrawn under certain circumstances subject to certain
restrictions set forth in the Plan.
INVESTMENT
First Union National Bank, a subsidiary of First Union Corporation, served
as Trustee for the Plan through January 14, 1999, and CoreStates, N.A., a
subsidiary of CoreStates, served as Trustee for the Plan prior to acquisition on
April 28, 1998. Nine investment fund options were maintained under the Plan for
accumulation and investment of the participants' accounts.
The assets of these CoreStates funds were merged into funds held by First Union
with similar investment objectives or activities.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION
Investments are stated at fair value. Fair values are determined for: (1)
Participant Notes Receivable, with interest rates ranging from 5.5% to 11%; (2)
Common Stock - on the basis of the last reported sale price on the last business
day of the year; (3) Mutual Funds - at net asset value at the close of business
on the last business day of the year. The cost of investments sold is determined
on an average historical cost basis. Loans are carried at the outstanding
principal balance which represents their estimated fair value.
11
QuestPoint Savings Plan
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The First Union Stock Fund was converted to a unit-basis of accounting to
enable the fund to be valued on a daily basis. Instead of owning shares of
stock, participants own a number of units of the fund. The unit value of the
First Union Corporation stock at December 31, 1998 was $12.22.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
3. INCOME TAX STATUS
The Plan has applied for but has not received a determination letter from the
Internal Revenue Service stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code. However, the Plan Administrator believes that the
Plan is qualified and, therefore, the related trust is exempt from taxation. The
Plan sponsor has indicated that it will take the necessary steps, if any, to
maintain the Plan's qualified status.
12
SUPPLEMENTAL SCHEDULES
QuestPoint Savings Plan
Line 27a--Schedule of Assets Held for Investment Purposes
December 31, 1998
Description of
Investment
Including
Maturity Date
Rate of
Identity of Issue, Borrower, Lessor, or Interest, Par or Current
Similar Party Maturity Value Cost** Value
- -------------------------------------------------------------------------------------------
*First Union Corporation
Common Stock 96,185 $ 1,175,784
*Evergreen Mutual Funds:
Evergreen Select Strategic Growth Fund 56,705 756,596
Evergreen Select Income Plus Fund 3,776 38,520
Evergreen Select Fixed Income Fund 17,951 183,900
Evergreen Money Market Fund 392,577 399,104
Evergreen Foundation Fund 16,026 390,396
Evergreen Select Equity Index Fund 44,803 577,639
Evergreen International Growth Fund 27,833 221,477
Evergreen Stock Selector Fund 9,983 133,260
*Participant Notes Receivable Interest rates
ranging from
7.75% to 8.5% 250,924
-------------------------
Total investments $ $ 4,127,600
=========================
* Indicates a party-in-interest to the Plan.
**Historical cost information was not available.
14
QuestPoint Savings Plan
Line 27d--Schedule of Reportable Transactions
Year ended December 31, 1998
Description of Assets
(Including interest
Identity of Party rate and maturity Purchase Selling
Involved in case of a loan) Price Price Cost of Asset
- --------------------------------------------------------------------------------------------------------------------------------
Category I - a single transaction in excess of 5% of plan assets
- -----------------------------------------------------------------
First Union Evergreen Select Strategic Growth Fund $ - $ 194,451 $ 156,587
CoreStates CoreStates Stock Fund - 276,265 226,474
First Union First Union Corporation Common Stock 1,201,087 - 1,201,087
Category III - a series of transactions in a security issue aggregating
- ------------------------------------------------------------------------
in excess of 5% of plan assets
- -------------------------------
CoreStates CoreFund Reserve Fund Class Y 642,674 614,306 1,256,980
First Union Evergreen Money Market Tr Class Y 187,556 307,456 495,012
CoreStates CoreStates Financial Corp. Common Stock 155,115 49,423 190,417
First Union First Union Corporation Common Stock 1,526,884 545,546 1,957,423
CoreStates CoreFund Growth Equity Fund 349,385 125,580 453,262
CoreStates CoreFund Equity Index Fund 216,593 190,799 376,486
CoreStates CoreFund Balanced Fund Class Y 170,830 117,645 278,856
First Union Evergreen Select Strategic Growth Fund 143,869 279,051 373,520
First Union Evergreen Select Equity Index Fund 133,133 269,722 358,074
First Union Evergreen Foundation Fund 93,273 139,963 219,389
First Union Evergreen Stock Selector Fund 58,609 131,986 168,136
Current
Value of
Assets on Net
Transaction Gain
Date or (Loss)
-------------------------------------
Category I - a single transaction in excess of 5% of plan assets
- -----------------------------------------------------------------
First Union $ 194,451 $ 37,864
CoreStates 276,265 49,791
First Union 1,201,087 -
Category III - a series of transactions in a security issue aggregating
- ------------------------------------------------------------------------
in excess of 5% of plan assets
- ------------------------------
CoreStates 1,256,980 -
First Union 495,012 -
CoreStates 204,538 14,121
First Union 2,072,430 115,007
CoreStates 474,965 21,703
CoreStates 407,392 30,906
CoreStates 288,475 9,619
First Union 422,920 49,400
First Union 402,855 44,781
First Union 233,236 13,847
First Union 190,595 22,459
There are no Category II or IV reportable transactions during the year ended
December 31, 1998.
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the plan administrator has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
FIRST UNION CORPORATION SAVINGS PLAN
(as successor to the Questpoint Savings Plan)
By: /s/ Benjamin J. Jolley
----------------------------------------
Name: Benjamin J. Jolley
Title: Vice President
Date: June 29, 1999
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION LOCATION
- ----------- ----------- ---------
(23) Filed herewith
Consent of Independent Auditors