Company Name: United Counties Bancorp
Public Availability Date: 03-22-1996
INQUIRY LETTERPITNEY, HARDIN, KIPP & SZUCH P. O. BOX 1945 MORRISTOWN, NEW JERSEY 07962-1945 TELEPHONE(201) 966-6300 January 16, 1996 BY TELECOPIER and FEDERAL EXPRESS Securities and Exchange Commission
Office of the Chief Counsel
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Attn: Martin P. Dunn, Esq. - Mail Stop 3-3 Re: Request for No Action Letter;
Affiliates of United Counties Bancorporation;
Proposed Merger with Meridian Bancorp, Inc. Gentlemen: We represent United Counties Bancorporation ("UCB"), which has entered into an
agreement (the "First Merger Agreement") to be acquired by Meridian Bancorp,
Inc. ("Meridian") pursuant to a stock-for-stock merger of UCB with and into
Meridian (the "First Merger"). Pursuant to the First Merger Agreement, certain
directors of UCB are to become directors of Meridian following the close of the
First Merger. Subsequent to execution of the First Merger Agreement, Meridian
entered into an agreement (the "Second Merger Agreement") to be acquired by
CoreStates Financial Corp. ("CoreStates") pursuant to a stock-for-stock merger
of Meridian with and into CoreStates (the "Second Merger"). We are writing to
you on behalf of UCB to request your confirmation that the staff of the Division
of Corporation Finance (the "Staff") will not recommend any enforcement action
to the Securities and Exchange Commission (the "Commission") if those directors
and officers of UCB and those beneficial owners of more than 10% of UCB common
stock (other than Meridian) (each of whom may be deemed an "affiliate" of UCB)
who do not become directors of Meridian following the First Merger resell the
securities of CoreStates received by such persons upon consummation of the
Second Merger without registration of such resale under the federal securities
laws. We are also requesting your confirmation that the Staff will not recommend
any enforcement action to the Commission if the directors of UCB who do become
directors of Meridian after the First Merger resell the securities of CoreStates
received by such persons upon consummation of the Second Merger without
registration of such resale under the federal securities laws, provided that
such persons become directors of Meridian after the proxy statement of Meridian
seeking shareholder approval of the Second Merger Agreement has been mailed to
Meridian shareholders. Information in this letter pertaining to the proposed merger of UCB and Meridian
is derived from, and summarizes, certain information set forth in Meridian's
Registration Statement on Form S-4, File No. 33-62305 (the "First Registration
Statement"), registering the common stock of Meridian to be issued to
shareholders of UCB in connection with the First Merger. Information in this
letter pertaining to the proposed merger of Meridian and CoreStates is derived
from, and summarizes, certain information set forth in CoreStates' Registration
Statement on Form S-4, File No. 333-00067 (the "Second Registration Statement"),
registering the common stock of CoreStates to be issued to shareholders of
Meridian in connection with the Second Merger and containing the Joint Proxy
Statement (the "Joint Proxy Statement") with respect to the meetings of the
shareholders of CoreStates and Meridian to approve the Second Merger. Additional
or more detailed information may be obtained from the First Registration
Statement and the Second Registration Statement. Factual Background UCB. UCB is a registered bank holding company incorporated in 1983. At September
30, 1995, UCB had consolidated assets of $1.6 billion, consolidated deposits of
$1.3 billion and consolidated shareholders' equity of $199 million. UCB and its
subsidiary, United Counties Trust Company ("UCTC"), are headquartered in
Cranford, New Jersey. UCTC offers a broad range of banking, trust and related
financial services individuals and businesses through 36 branches in five
central New Jersey counties. Meridian. Meridian is a Pennsylvania multi-bank holding company headquartered in
Reading, Pennsylvania. At September 30, 1995, Meridian had consolidated assets
of $14.6 billion, consolidated deposits of $11.1 billion and consolidated
stockholders' equity of $1.3 billion. Meridian conducts its banking operations
through three bank subsidiaries, including Meridian Bank, New Jersey ("MBNJ"),
which collectively operate more than 300 branches in eastern Pennsylvania,
southern New Jersey and the State of Delaware. Meridian also operates financial
service subsidiaries offering asset management and securities services. CoreStates. CoreStates is a diversified financial services holding company
headquartered in Philadelphia, Pennsylvania. At September 30, 1995, CoreStates
had consolidated assets of $28.8 billion, consolidated deposits of $20.7 billion
and consolidated shareholders' equity of $2.3 billion. The First Merger Agreement. On May 23, 1995, UCB and Meridian entered into an
Agreement and Plan of Merger (the "First Merger Agreement") pursuant to which
UCB is to be merged into Meridian with Meridian surviving (the "First Merger")
and immediately thereafter, UCTC is to merge with MBNJ (the "First Bank
Merger:"). Upon consummation of the First Merger, each outstanding share of
common stock, no par value, $1.00 stated value, of UCB (the "UCB Common Stock")
will be converted into the right to receive 5.00 shares (the "Exchange Ratio")
of common stock, $5.00 par value, of Meridian (the "Meridian Common Stock"),
subject to adjustment under certain circumstances. Among other things, the First
Merger is conditioned upon the approval of UCB's stockholders. The First Merger
Agreement requires, and the parties contemplate, having two current directors of
UCB serve as directors of Meridian following the First Merger and having nine
current directors of UCTC serve as directors of MBNJ following the First Bank
Merger. Background of the First merger. In 1993, after considering recent changes in the
financial services industry and other developments, the UCB Board began to
explore strategic alternatives. The UCB Board retained Goldman, Sachs & Co. to
assist in this process. In 1993 and 1994, either directly or through Goldman
Sachs, UCB initiated contacts with several large financial institutions, several
of which, including Meridian, indicated an interest in pursuing a transaction.
In August 1994, the market value of the consideration proposed by Meridian was
the highest value consideration offered by any of the prospective bidders. On August 30, 1994, a letter of intent was executed by UCB and Meridian,
providing for a merger in which each share of UCB Common Stock would be
exchanged for 5.25 shares of Meridian Common Stock. However, on December 9, 1994
Meridian and UCB jointly announced that "as a result of prevailing equity market
conditions and an inability of the parties to agree on certain terms of the Plan
of Merger," the companies had terminated their letter of intent and merger
discussions. Discussions with Meridian were resumed during April and May 1995. A restructured
Meridian offer was considered at a special meeting of the UCB Board of Directors
on May 22, 1995. After review, the Board of Directors authorized UCB's officers
to negotiate a definitive merger agreement with Meridian, and to present it to
the UCB Board for consideration. Negotiation of the definitive agreement
followed immediately and at a special meeting of the UCB Board held on May 23,
1995 the Board unanimously voted to approve the First Merger Agreement and a
related "lock-up" stock option agreement. Reasons for the First Merger. UCB. The UCB Board of Directors believes that by becoming part of a larger
financial institution, UCB will be in a better position to succeed in an
increasingly competitive environment. In addition, the UCB Board expects that
the First Merger will make available to UCB's customers a broader range of
financial products and services supported by the latest bank technology in the
retail, middle market and business market segments currently served by UCB. It
is also anticipated that the First Merger will provide UCB shareholders with a
more liquid investment than continued ownership of UCB Common Stock due to the
greater number of Meridian shareholders and the higher trading volumes of
Meridian stock on the NASDAQ Stock Market. Meridian. Meridian's acquisition strategy has consisted of identifying financial
institutions with business philosophies which are similar to Meridian's, which
operate in markets which are geographically within or contiguous to those of
Meridian, and which provide an ability to enhance earnings per share over an
acceptable period after the acquisition, the goal for which is eighteen months,
while providing acceptable rates of return. Acquisitions are also evaluated in
terms of asset quality, interest rate risk, core deposit base stability,
potential operating efficiencies and management abilities. Meridian undertook
the First Merger as part of its ongoing acquisition strategy. The UCB/Meridian Proxy Statement-Prospectus. On or about September 25, 1995 UCB
and Meridian mailed to UCB shareholders a proxy statement-prospectus to solicit
approval of the First Merger. (The proxy statement-prospectus is included within
the First Registration Statement.) The proxy statement calls for a special
meeting of stockholders (the "UCB Meeting") at which UCB's stockholders will
vote on the First Merger and a proposal to adjourn the meeting to a later date,
if necessary, to solicit additional proxies. The affirmative vote of 2/3 of the
outstanding voting stock of UCB is required in order to approve the First Merger
Agreement. The UCB directors unanimously recommend in the proxy statement a vote
in favor of the First Merger Agreement. The Second Merger Agreement. On October 10, 1995, after UCB's proxy statement
had been mailed, Meridian and CoreStates entered into an Agreement and Plan of
Merger (the "Second Merger Agreement"), pursuant to which Meridian is to merge
into CoreStates (the "Second Merger") with CoreStates surviving. Upon
consummation of the Second Merger, each share of Meridian Common Stock will be
exchanged for 1.225 shares of the common stock, 1.00 par value, of CoreStates
("CoreStates Common Stock"), subject to increase under certain circumstances,
with cash paid in lieu of fractional shares. Among other things, the Second
Merger is conditioned upon approval by the stockholders of both Meridian and
CoreStates. Background of the Second Merger Agreement. Meridian's Board of Directors has
periodically reviewed strategic alternatives. In prior years, the Board
determined that Meridian should continue its strategy of independence and seek
growth internally and through in-market acquisitions. It was in this context
that Meridian entered into the First Merger Agreement. At a board meeting on July 25, 1995, Meridian's CEO reported on merger
transactions announced in the preceding months and recommended that the Board
comprehensively review Meridian's strategic options at its annual September
Board planning sessions, unless events in the market place dictated an earlier
review. In early August 1995, Meridian's and CoreStates's CEOs met and preliminarily
discussed the implications of ongoing consolidation in the Mid-Atlantic market
on their companies, and, at least conceptually, the feasibility of a combination
of the two companies. In addition, members of the two companies' financial
staffs met with both CEOs to discuss feasibility on three other occasions during
August. No discussions of price occurred during these meetings, and neither
company's management reached any conclusions as to the feasibility of a possible
combination as a result of these meetings. Also during August, Meridian's Board
engaged three financial advisors to assist the Board in studying Meridian's
strategic alternatives at the Board's planning session scheduled for late
September 1995. During the Meridian Board's planning session on September 25 and 26, 1995,
management recommended and the Board determined that Meridian should pursue
implementation of its three-year strategic plan and concurrently explore the
possibility of a combination with CoreStates. The purpose of the discussions
with CoreStates would be to report to the Board at its next regular meeting on
October 24, 1995 whether a transaction with a substantial premium and certain
desired non-financial terms was attainable. The Board then would resume its
study of strategic alternatives and make an informed decision between
implementation of the management plan, affiliation which CoreStates or pursuing
one or more other alternatives. Subsequent exploratory discussions between
senior management of Meridian and CoreStates occurred during early October 1995. At separate board meetings on October 8, 1995, each entity's CEO advised his
Board of the results of the discussions and recommended proceeding with merger
negotiations. That evening and the next day, the parties negotiated the terms of
a definitive agreement and completed their due diligence reviews. On October 9,
1995, the Meridian and CoreStates Boards of Directors separately reconvened and
approved the transaction. The Second Merger Agreement and related "lock-up"
stock option agreements were entered into on October 10, 1995. Reasons for the Second Merger. The Boards of Directors of CoreStates and
Meridian believe that the Second Merger represents a unique opportunity to
create one of the premier financial services organizations in the MidAtlantic
region, with leading geographic market positions in a core region and with
specialized strengths in serving key customer segments. Following the Second
Merger, the combined company will also have a substantially larger capital base
providing enhanced flexibility for future operations and a significantly
expanded retail customer base with higher customer penetration in the
three-state-region in which the two companies operate. In addition, because of
the high degree of geographic and operational overlap between the two companies
and the similarity of their strategic focus, the Second Merger presents
significant opportunities for synergies and expense savings. Numerous other
considerations of the respective Boards of Directors are set forth in the Joint
Proxy Statement. Combined Effect of the Two Merger Agreements. Assuming that (i) the UCB
shareholders approve the First Merger Agreement at the UCB Meeting, (ii) the
First Merger is consummated and (iii) the First Merger is consummated prior to
the consummation of the Second Merger (which is the current intent of
CoreStates, Meridian and UCB), each outstanding share of UCB Common Stock will
be converted into and exchangeable for 5.00 shares of Meridian Common Stock. In addition, assuming the Second Merger is consummated following consummation of
the First Merger, each outstanding share of Meridian Common Stock (including
each share of Meridian Common Stock that will have been issued to UCB
stockholders pursuant to the First Merger), will be converted into 1.225 shares
of CoreStates Common Stock (subject to adjustment, "the Second Exchange Ratio"),
pursuant to the terms of the Second Merger Agreement. If both the First Merger
and the Second Merger are consummated, each share of UCB Common Stock ultimately
will be converted into 6.125 shares of CoreStates Common Stock (the product of
the Exchange Ratio and the Second Exchange Ratio) with cash paid in lieu of
fractional shares of CoreStates Common Stock. Schedule. Subsequent to the announcement of the Second Merger Agreement, UCB and
Meridian agreed to adjourn UCB's special meeting of stockholders, amend the
First Registration Statement and supplement the proxy statement-prospectus so
that the UCB shareholders would be provided with information concerning the
Second Merger prior to the UCB Meeting. A post-effective amendment to the First
Registration Statement was subsequently filed. The UCB Meeting has been
adjourned and will be reconvened on February 7, 1996. Meridian has scheduled a special meeting on February 6, 1996 at which its
shareholders of record as of December 26, 1995 will vote on the Second Merger
Agreement. If the First merger is approved by the shareholders of UCB, subject to the
satisfaction or waiver of certain other conditions, the closing of the First
Merger currently is expected to occur in the first quarter of 1996. If the
Second Merger is approved by the shareholders of both Meridian and CoreStates,
subject to the satisfaction or waiver of certain other conditions, the closing
of the Second Merger currently is expected to occur in the second quarter of
1996. As a result of the above-described schedule, the First Merger will not be
consummated in time for UCB shareholders to become Meridian shareholders and
have an opportunity to vote as Meridian shareholders on the Second Merger. In
addition, it is anticipated that Meridian will mail to its shareholder the proxy
statement in which Meridian directors will recommend and seek shareholders
approval of the Second Merger Agreement at least one month prior to the closing
of the First Merger (and thus prior to the time at which any UCB directors will
become Meridian directors). Exchange of UCB Certificates. As soon as practicable after the effective time of
the First Merger (the "First Effective Time"), Meridian, or a bank or trust
company designated by Meridian, in the capacity of exchange agent (the "Exchange
Agent"), will send a transmittal form to each UCB shareholder. The transmittal
form will contain instructions with respect to the surrender of certificates
representing UCB Common stock to be exchanged for Meridian Common Stock. The First Effective Time may be sufficiently close to the effective time of the
Second Merger so that UCB shareholders submitting their UCB stock certificates
to the Exchange Agent following the First Merger would receive Meridian stock
certificates only to immediately resubmit those stock certificates in exchange
for CoreStates stock certificates. If the two executive times are scheduled in
near succession, UCB may ask Meridian to give UCB shareholders the option to
hold their UCB certificates, without penalty, until the Second Merger closes,
and then submit UCB certificates directly to the exchange agent for the Second
Merger in exchange for the appropriate number of certificates representing
CoreStates Common Stock, and cash in lieu of fractional shares. UCB Shareholder Information. As of September 30, 1995, there were 2,148,150
shares of UCB Common Stock outstanding. The directors and executive officers of
UCB and their affiliates beneficially owned, as of such date, approximately
737,920 shares, or approximately 34.4% of the outstanding shares, of UCB Common
Stock and all such persons have indicated a present intent to vote their shares
in favor of the First Merger. Meridian, by reason of its "lock-up" stock option
to purchase up to 375,000 shares of UCB Common Stock, may be deemed under the
rules of the Commission to beneficially own in excess of 10% of the UCB Common
Stock outstanding on such date. Meridian does not, however, have the power to
vote the shares of UCB Common Stock subject to its option at the UCB Meeting. DISCUSSION OF APPLICABLE LEGAL PRINCIPLES Rule 145 promulgated under the Securities Act of 1933, as amended (the "Act")
generally states that an "offer" or "sale" within the meaning of the Act is
involved with respect to the security holders of a corporation where there is
submitted for the vote or consent of such security holders a plan or agreement
for a merger, consolidation or similar plan of acquisition except where the sole
purpose of the transaction is to change an issuer's domicile. Rule 145 also provides that "any party to any such transaction, other than the
issuer, or any person who is an affiliate of such party at the time any such
transaction is submitted for vote or consent, who publicly offers or sells
securities of the issuer acquired in connection with any such transaction, shall
be deemed to be engaged in a distribution and therefore to be an underwriter
thereof within the meaning of Section 2(11) of the Act" (emphasis added). Paragraph (d) of Rule 145 sets forth procedures whereby persons and parties may
sell securities acquired in such a transaction and not be deemed to be engaged
in a distribution and therefore not be deemed to be an underwriter of registered
securities. Each current director, officer or 10% shareholder of UCB may be deemed an
affiliate of UCB under the Act. Pursuant to Rule 145, an affiliate of UCB will
be deemed an affiliate of Meridian in connection with the First Merger and thus
will be deemed an underwriter of the Meridian Common Stock to be issued to
shareholders of UCB pursuant to the First Merger. Thus, were the First Merger to
occur and the Second Merger did not occur, persons who were affiliates of UCB at
the time UCB shareholders were asked to approve the First merger would be
subject to restrictions under the Act on their ability to resell the Meridian
Common Stock such persons received in the First Merger. However, each affiliate of UCB who does not become a director of Meridian
following the closing of the First Merger should not be deemed an affiliate of
Meridian. As noted above, Rule 145 would deem such persons underwriters of the
CoreStates securities to be issued in the Second Merger only if such persons
were affiliates of Meridian "at the time" the Second Merger is submitted for
vote or consent." Each current director of UCB who does become a director of Meridian following
the closing of the First Merger may be deemed an affiliate of Meridian at the
point in time such person becomes a Meridian director. However, as noted above,
Rule 145 would deem such persons underwriters of the CoreStates securities to be
issued in the Second Merger only if such persons were affiliates of Meridian "at
the time the Second Merger is submitted for vote or consent". As noted above, it
is anticipated that Meridian will mail to its shareholders the proxy statement
in which Meridian directors will recommend and seek shareholders approval of the
Second Merger Agreement prior to the closing of the First Merger (and thus prior
to the time at which any UCB directors will become Meridian directors). We think it is appropriate to interpret the above-cited language from Rule 145
as providing that the last date for deemed affiliate status as the date of the
mailing of the proxy statement. That is, the date of mailing is the date the
transaction is "submitted for vote or consent." This is a sensible reading of
the rule given that, as a practical matter, the proxy statement is the document
by which directors make their views and recommendations known to their
shareholders and make an attempt to influence the vote of shareholders. The UCB
directors who become Meridian directors after the Meridian proxy statement is
mailed will have had no involvement in the negotiation or Meridian board
approval of the Second Merger Agreement; they will have had no involvement in
drafting the proxy statement; they will not make any recommendation whatsoever
to the Meridian shareholders as to their vote on the Second Merger Agreement;
and, by virtue of the fact that the vote on the Second Merger Agreement is
scheduled to occur prior to the close of the First Merger, any opportunity the
UCB directors might have had to influence the views of UCB shareholders
concerning the Second Merger will not have an impact on the vote because the UCB
shareholders will not become Meridian shareholders in time to vote on the Second
Merger Agreement. We are unaware of any Commission releases, rulings or no-action letters which
directly address the question of whether affiliates of a company which engages
in a stock-for-stock merger with a second company may freely trade the
securities of a third company which engages in a stock-for-stock merger with the
second company. However, in other contexts the Staff has taken the position that
following a stock-for-stock merger in which the common stock-being issued is
registered under the Act, a person who is not an affiliate of either party to
the merger is immediately free to resell publicly all the stock received by such
person pursuant to the merger. See, e.g., Sec. Act Rel. No. 6099, Question 85
("Question: May a person who receives securities in a registered Rule 145
transaction immediately resell them? Answer: If the person was not an affiliate
of the acquired entity at the time of acquisition, he may immediately resell the
securities without any restrictions. . . ."); Sec. Act Rel. No. 5463, Response
to Question A-4 ("Since D is not an affiliate of X company or Y Company then he
is not deemed to be an underwriter with respect to the securities he receives in
the Rule 145 transaction. Accordingly, D is immediately free to resell publicly
all of the X Company common stock which he receives in the transaction
regardless of whether some of his Y Company common stock was restricted.") We also note the Staff's general guidance on the issue offered in Sec. Act Rel.
6508 at n.1: Persons who are effecting resales of registered securities issued in Rule 145
transactions generally fall into four categories. Rule 145(d) would apply to
their resales as follows: (1) Non-affiliate of acquired company who is a
non-affiliate of the acquiring company after the transaction -- Rule 145(c) and
(d) not applicable and securities are unrestricted . . . Given the absence of any participation by any director, officer or 10%
shareholder of UCB Meridian's determination to proceed with the Second Merger or
in the Meridian Board's recommendation to Meridian shareholders that they vote
to approve the Second Merger, we think there is no reason to treat any such
person as an affiliate of Meridian "at the time the Second Merger is submitted
for vote or consent" for Rule 145 purposes. While the First Merger and the
Second Merger may be consummated proximately in time to one another, they are
two separate transactions and the UCB insiders were not involved in the Second
Merger transaction. Thus, it would be inappropriate to deem such persons
affiliates of Meridian for purposes of determining whether they should be
subject to restrictions on their resale of CoreStates Common Stock following the
Second Merger. CONCLUSION AND "NO-ACTION" REQUEST Based on the foregoing analysis, we are of the view that no current director,
officer or 10% shareholder of UCB (other than Meridian) should be deemed an
affiliate of Meridian "at the time the Second Merger is submitted for vote or
consent" for purposes of determining the applicability of Rule 145 in connection
with the Second Merger, and that all such persons should be immediately free to
resell publicly all of the CoreStates Common Stock which any of them receives in
the Second Merger regardless of whether any of their UCB Common Stock, or any of
the Meridian Common Stock they receive pursuant to the First Merger, is
restricted. According, we respectfully request your advice that the Division of Corporation
Finance will not recommend any enforcement action to the Commission if (1)
subsequent to consummation of the First Merger and the Second Merger in
accordance with the First and Second Registration Statements, respectively, any
current director, officer or 10% shareholder of UCB (other than Meridian) who
does not become a director of Meridian following the First Merger resells
publicly any of the CoreStates Common Stock which any of them receives in the
Second Merger without registration of such CoreStates Common Stock other than
registration by CoreStates pursuant to the Second Registration Statement; and
(2) subsequent to consummation of the First Merger and the Second Merger in
accordance with the First and Second Registration Statements, respectively, any
current director, officer or 10% shareholder of UCB (other than Meridian) who
does become a director of Meridian, provided he or she becomes a Meridian
director after the First Merger is consummated and after the proxy statement of
Meridian included within the Second Registration Statement is mailed to
shareholders of Meridian, resells publicly any of the CoreStates Common Stock
which any of them receives in the Second Merger without registration of such
CoreStates Common Stock other than registration by CoreStates pursuant to the
Second Registration Statement. Please call me at (201) 966-8125 if you require any additional information or
have any questions. In the event that you should contemplate an unfavorable or
qualified response as to any of the issues raised above, a telephone conference
is requested. Respectfully submitted, MICHAEL W. ZELENTY cc: Mr. Eugene H. Bauer
United Counties Bancorporation STAFF REPLY LETTERMarch 22, 1996 RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE Re: United Counties Bancorporation ("UCB")
Meridian Bancorp, Inc. ("Meridian")
Incoming letter dated January 16, 1996 It is the view of the Division that the time period described in the phrase "at
the time any such transaction is submitted for vote" in Rule 145(c) under the
Securities Act of 1933 does not cease at the time of mailing the proxy statement
relating to the vote on the Rule 145 transaction, but, rather, continues through
the closing of the polls at the meeting of shareholders at which such vote is
held, including any adjournment thereof. You have asked for the Division's
position with respect to the application of Rules 145(c) and (d) to the resale
of securities of Corestates (as defined in your letter) by those persons who (1)
are affiliates of UCB at the time the First Merger (as defined in your letter)
is "submitted for vote" (as discussed above); and (2) are not affiliates of
Corestates at the time the Second Merger (as defined in your letter) is
"submitted for vote" (these persons are referred to below as "Selling
Shareholders"). Based on the facts presented, the Division's views are as
follows: 1. Those Selling Shareholders who are not affiliates of Meridian at the time the
Second Merger is "submitted for vote" would not be persons described in Rule
145(c) with respect to the CoreStates shares to be received in the Second
Merger. 2. Those Selling Shareholders who are affiliates of Meridian at the time the
Second Merger is "submitted for vote" would be persons described in Rule 145(c)
with respect to the CoreStates shares to be received in the Second Merger. These positions assume (1) that the closing of the First Merger is not
contingent upon the closing of the Second Merger; (2) that the closing of the
Second Merger is not contingent upon the closing of the First Merger; and (3)
that the First Merger and Second Merger were not entered into as a means to
avoid the application of Rules 145(c) and (d). As the Division does not provide interpretive advice with regard to the
"affiliate" status of a person under Rule 144 or Rule 145, the Division
expresses no view upon the application of Rule 145(c) and (d) to the specific
persons described in your letter. Because these positions are based on the representations made to the Division in
your letter, it should be noted that any different facts or conditions might
require different conclusions. Sincerely, Laura B. Badian
Attorney Fellow
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