-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TpZxrpJGyQ3NUt/2SXXjNuGU7odvRdDWG00g9O3hc4XWRGcKf9+3egK3eGaMU07k Tss2mzIYAI+Wzl2cnHuDnQ== 0000950128-99-000838.txt : 19990630 0000950128-99-000838.hdr.sgml : 19990630 ACCESSION NUMBER: 0000950128-99-000838 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PNC BANK CORP CENTRAL INDEX KEY: 0000713676 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 251435979 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-09718 FILM NUMBER: 99654912 BUSINESS ADDRESS: STREET 1: ONE PNC PLAZA STREET 2: 249 FIFTH AVE CITY: PITTSBURGH STATE: PA ZIP: 15265 BUSINESS PHONE: 4127621553 MAIL ADDRESS: STREET 1: ONE PNC PLAZA STREET 2: FIFTH AVENUE & WOOD STREET CITY: PITTSBURGH STATE: PA ZIP: 15265 FORMER COMPANY: FORMER CONFORMED NAME: PNC BANK CORP /PA/ DATE OF NAME CHANGE: 19930428 FORMER COMPANY: FORMER CONFORMED NAME: PNC FINANCIAL CORP DATE OF NAME CHANGE: 19920703 10-K/A 1 PNC BANK CORP 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A (AMENDMENT NO. 1) (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE YEAR ENDED DECEMBER 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to -------------- -------------- COMMISSION FILE NUMBER 1-9718 PNC BANK CORP. (Exact name of registrant as specified in its charter) PENNSYLVANIA 25-1435979 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) ONE PNC PLAZA 249 FIFTH AVENUE PITTSBURGH, PENNSYLVANIA 15222-2707 (Address of principal executive offices) (Zip Code) (412) 762-1553 (Registrant's telephone number, including area code) (Former name or former address, if changed since last report) 2 By filing this amendment ("Amendment No. 1"), the undersigned registrant hereby amends its Annual Report on Form 10-K for the year ended December 31, 1998 ("1998 Form 10-K"), to include, as permitted by Rule 15d-21 under the Securities Exchange Act of 1934, as amended ("Exchange Act"), the financial statements and exhibits required by Form 11-K with respect to the PNC Bank Corp. Incentive Savings Plan, as amended ("PNC Plan"). In accordance with Rule 12b-15 of the Exchange Act, Item 14 of Part IV of the 1998 Form 10-K is hereby amended and restated to read in its entirety as follows: PART IV ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K The following report of independent auditors of the Corporation and consolidated financial information of the Corporation included in the Annual Report to Shareholders are incorporated herein by reference.
PAGE OF FINANCIAL STATEMENTS ANNUAL REPORT ----------------------------------------------------------------------------------------------- --------------------- Report of Ernst & Young LLP, Independent Auditors 63 Consolidated Statement of Income for the three years ended December 31, 1998 64 Consolidated Balance Sheet as of December 31, 1998 and 1997 65 Consolidated Statement of Shareholders' Equity for the three years ended December 31, 1998 66 Consolidated Statement of Cash Flows for the three years ended December 31, 1998 67 Notes to Consolidated Financial Statements 68-87 Selected Quarterly Financial Data 88
As permitted by Rule 15d-21 of the Exchange Act, the following financial statements of the PNC Plan and reports of independent auditors thereon are filed with Amendment No. 1 at the page indicated.
PAGE OF FINANCIAL STATEMENTS AMENDMENT NO. 1 ------------------------------------------------------------------------- --------------------- --------------------- Report of Independent Auditors 5 Statements of Net Assets Available for Benefits, with Fund Information 6 Statements of Changes in Net Assets Available for Benefits, with Fund Information 9 Notes to Financial Statements 12 Schedule of Assets Held for Investment Purposes 19 Schedule of Loans 21 Schedule of Reportable Transactions 22
FINANCIAL STATEMENT SCHEDULES ---------------------------------------------------------------------- Not applicable. REPORTS ON FORM 8-K ---------------------------------------------------------------------- Since December 31, 1998, the Corporation filed the following Current Reports on Form 8-K: Form 8-K dated as of December 23, 1998, reporting developments regarding the Corporation's credit card business, filed pursuant to Item 5. Form 8-K dated as of January 19, 1999, reporting the Corporation's consolidated financial results for the three months and year ended December 31, 1998, filed pursuant to Item 5. Form 8-K dated as of February 16, 1999, reporting the public offering of $250,000,000 of 6 1/8% subordinated notes due 2009, filed pursuant to Item 5. 3 Form 8-K dated as of March 29, 1999, reporting developments regarding the Corporation's credit card business, filed pursuant to Item 5. Form 8-K dated as of April 22, 1999, reporting the Corporation's consolidated financial results for the three months ended March 31, 1999 and information on the Corporation's businesses for the three months ended March 31, 1999 and 1998, filed pursuant to Item 5. EXHIBITS ---------------------------------------------------------------------- The exhibits listed on the Exhibit Index on pages 24 and 25 of this Form 10-K/A are filed herewith or are incorporated herein by reference. 4 PNC Bank Corp. Incentive Savings Plan Audited Financial Statements Years ended December 31, 1998 and 1997 CONTENTS
Report of Independent Auditors ................................................................................5 Audited Financial Statements Statements of Net Assets Available for Benefits, with Fund Information ........................................6 Statements of Changes in Net Assets Available for Benefits, with Fund Information .............................9 Notes to Financial Statements ................................................................................12 Schedules Line 27a--Schedule of Assets Held for Investment Purposes ....................................................19 Line 27b--Schedule of Loans ..................................................................................21 Line 27d--Schedule of Reportable Transactions ................................................................22
-4- 5 Report of Independent Auditors Administrative Committee PNC Bank Corp. Incentive Savings Plan We have audited the accompanying statements of net assets available for benefits of the PNC Bank Corp. Incentive Savings Plan as of December 31, 1998 and 1997, and the related statements of changes in net assets available for benefits for the years then ended. 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 net assets available for benefits of the Plan at December 31, 1998 and 1997, and the changes in its net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes and loans as of December 31, 1998, and reportable transactions for 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. These supplemental schedules are the responsibility of the Plan's management. The Fund Information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in our audits 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. /s/ Ernst & Young LLP June 4, 1999 -5- 6 PNC Bank Corp. Incentive Savings Plan Statement of Net Assets Available for Benefits, with Fund Information December 31, 1998
PNC PNC PNC BLACKROCK BLACKROCK BALANCED AGGRESSIVE CONSERVATIVE MONEY LARGE CAP PROFILE PROFILE PROFILE MARKET VALUE EQUITY FUND FUND FUND PORTFOLIO PORTFOLIO ---------------------------------------------------------------------------- Investments at fair value: Investments in Master Trust $2,237,920 $219,947,201 $1,770,165 $67,309,996 $3,124,070 Other investments: PNC Bank Corp. common stock Interest-bearing cash 1,890,050 Participant loans ---------------------------------------------------------------------------- Total investments 2,237,920 219,947,201 1,770,165 69,200,046 3,124,070 Accrued income 7,941 Due to (from) fund/other assets (liabilities) ---------------------------------------------------------------------------- Total assets 2,237,920 219,947,201 1,770,165 69,207,987 3,124,070 ESOP note payable Accrued interest payable ============================================================================ Net assets available for benefits $2,237,920 $219,947,201 $1,770,165 $69,207,987 $3,124,070 ============================================================================
BLACKROCK BLACKROCK BLACKROCK INDEX SMALL CAP INTERNATIONAL EQUITY VALUE EQUITY EQUITY PORTFOLIO PORTFOLIO PORTFOLIO ------------------------------------------------ Investments at fair value: Investments in Master Trust $13,764,628 $1,257,990 $469,292 Other investments: PNC Bank Corp. common stock Interest-bearing cash Participant loans ------------------------------------------------ Total investments 13,764,628 1,257,990 469,292 Accrued income Due to (from) fund/other assets (liabilities) ------------------------------------------------ Total assets 13,764,628 1,257,990 469,292 ESOP note payable Accrued interest payable ================================================ Net assets available for benefits $13,764,628 $1,257,990 $469,292 ================================================
See accompanying notes to financial statements. -6- 7 PNC Bank Corp. Incentive Savings Plan Statement of Net Assets Available for Benefits, with Fund Information (continued) December 31, 1998
BLACKROCK BLACKROCK PNC SMALL CAP CORE PNC BANK BANK CORP. GROWTH EQUITY BOND CORP. STOCK ALLOCATED PORTFOLIO PORTFOLIO FUND ESOP FUND -------------------------------------------------------------------- Investments at fair value: Investments in Master Trust $1,739,005 $64,708,454 Other investments: PNC Bank Corp. common stock $298,133,016 $226,642,586 Interest-bearing cash 17,322 Participant loans -------------------------------------------------------------------- Total investments 1,739,005 64,708,454 298,133,016 226,659,908 Accrued income Due to (from) fund/other assets 1,198,534 (liabilities) -------------------------------------------------------------------- Total assets 1,739,005 64,708,454 298,133,016 227,858,442 ESOP note payable Accrued interest payable ==================================================================== Net assets available for benefits $1,739,005 $64,708,454 $298,133,016 $227,858,442 ====================================================================
PNC BANK CORP. UNALLOCATED LOAN ESOP FUND FUND TOTAL ----------------------------------------------------- Investments at fair value: Investments in Master Trust $ 376,328,721 Other investments: PNC Bank Corp. common stock $76,655,106 601,430,708 Interest-bearing cash 1,907,372 Participant loans $30,193,660 30,193,660 ----------------------------------------------------- Total investments 76,655,106 30,193,660 1,009,860,461 Accrued income 7,526 15,467 Due to (from) fund/other assets (1,198,534) (liabilities) ----------------------------------------------------- Total assets 75,464,098 30,193,660 1,009,875,928 ESOP note payable (31,832,881) (31,832,881) Accrued interest payable (1,171,917) (1,171,917) ===================================================== Net assets available for benefits $42,459,300 $30,193,660 $ 976,871,130 =====================================================
See accompanying notes to financial statements. -7- 8 PNC Bank Corp. Incentive Savings Plan Statement of Net Assets Available for Benefits, with Fund Information December 31, 1997
INTERMEDIATE- TERM FIXED SHORT-TERM PNC BANK EQUITY INCOME-- FIXED INCOME CORP. STOCK FUND A FUND B --FUND C --FUND D ------------------------------------------------------------------- Investments at fair value: PNC Bank common stock $347,536,137 PNC Bank preferred stock 61,333 Short-term investments Compass Capital Funds: Interest-bearing cash $5,096,345 $ 1,550,429 $78,921,669 1,574,747 Registered investment companies PNC Funds: Small Cap Growth Equity Portfolio 8,132,880 International Equity Portfolio 42,943,103 Small Cap Value Equity Portfolio 8,526,487 International Emerging Markets Portfolio 10,561,421 Mid Cap Growth Equity Portfolio 13,264,058 Mid Cap Value Equity Portfolio 12,841,875 Intermediate Term Bond Portfolio 24,944,759 Managed Income Portfolio 35,195,764 Large Cap Growth Equity Portfolio 33,845,359 Large Cap Value Equity Portfolio 35,082,767 Value Equity Portfolio 49,612,685 Core Bond Portfolio 320 4,349,727 Participant loans Other 75,095 ------------------------------------------------------------------- Total investments 219,907,300 66,115,774 78,921,669 349,172,217 Contribution receivable Accrued income 22,334 6,605 363,959 7,519 Due to (from) fund/other assets (liabilities) 2,262,896 (326,221) 20,466 1,403,906 ------------------------------------------------------------------- Total assets 222,192,530 65,796,158 79,306,094 350,583,642 ESOP note payable Accrued employer match Accrued interest payable =================================================================== Net assets available for benefits $222,192,530 $65,796,158 $79,306,094 $350,583,642 ===================================================================
PNC PNC BANK CORP. BANK CORP. ALLOCATED UNALLOCATED LOAN ESOP FUND ESOP FUND FUND TOTAL ------------------------------------------------------------------- Investments at fair value: PNC Bank common stock $214,752,364 $134,790,364 $ 697,078,865 PNC Bank preferred stock 61,333 Short-term investments Compass Capital Funds: Interest-bearing cash 409 $ 446,628 87,590,227 Registered investment companies PNC Funds: Small Cap Growth Equity Portfolio 8,132,880 International Equity Portfolio 42,943,103 Small Cap Value Equity Portfolio 8,526,487 International Emerging Markets Portfolio 10,561,421 Mid Cap Growth Equity Portfolio 13,264,058 Mid Cap Value Equity Portfolio 12,841,875 Intermediate Term Bond Portfolio 24,944,759 Managed Income Portfolio 35,195,764 Large Cap Growth Equity Portfolio 33,845,359 Large Cap Value Equity Portfolio 35,082,767 Value Equity Portfolio 49,612,685 Core Bond Portfolio 4,350,047 Participant loans 29,025,613 29,025,613 Other 75,095 ------------------------------------------------------------------- Total investments 214,752,364 134,790,773 29,472,241 1,093,132,338 Contribution receivable 13,890,529 13,890,529 Accrued income 6,259 31,893 438,569 Due to (from) fund/other assets (liabilities) 5,296,920 (5,323,315) (2,612,832) 721,820 ------------------------------------------------------------------- Total assets 233,946,072 129,499,351 26,859,409 1,108,183,256 ESOP note payable (47,600,000) (47,600,000) Accrued employer match (13,890,529) (13,890,529) Accrued interest payable (1,738,124) (1,738,124) =================================================================== Net assets available for benefits $233,946,072 $ 66,270,698 $26,859,409 $1,044,954,603 ===================================================================
See accompanying notes to financial statements. -8- 9 PNC Bank Corp. Incentive Savings Plan Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1998
PNC PNC PNC BLACKROCK BALANCED AGGRESSIVE CONSERVATIVE MONEY PROFILE PROFILE PROFILE MARKET FUND FUND FUND PORTFOLIO ------------------------------------------------------------------- Net assets available for benefits at January 1, 1998 $222,192,530 $ 79,306,094 Additions: Interest and dividends $ 1,905 1,197,756 $ 1,094 3,868,694 Contributions: Employer 1,239 342,245 557 402,223 Employee 37,157 18,012,613 14,322 4,455,008 Rollover 3,835 668,502 17,789 331,797 Deductions: Distributions to participants or Beneficiaries (32,073,276) (19,378,973) Expenses (263) (54,098) (177) (16,366) Net transfers 1,950,234 (20,829,952) 1,681,537 (123,896) ESOP activity: Interest expense Other ESOP activity Net realized and unrealized appreciation (depreciation) 243,813 30,083,664 55,043 Net assets received in mergers 180,468 371,701 Other 226,749 (8,295) ------------------------------------------------------------------- Net assets available for benefits at December 31, 1998 $2,237,920 $219,947,201 $1,770,165 $ 69,207,987 ===================================================================
BLACKROCK BLACKROCK BLACKROCK BLACKROCK LARGE CAP INDEX SMALL CAP INTERNATIONAL VALUE EQUITY EQUITY VALUE EQUITY EQUITY PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------------------------------------------------------------- Net assets available for benefits at January 1, 1998 Additions: Interest and dividends $ 118,873 $ 53,177 $ 45,140 $ 19,581 Contributions: Employer 617 2,100 303 Employee 79,709 221,876 38,341 16,291 Rollover 14,793 19,939 5,118 3,273 Deductions: Distributions to participants or Beneficiaries (35,458) Expenses (425) (1,686) (182) (58) Net transfers 2,834,678 12,067,684 1,098,837 404,719 ESOP activity: Interest expense Other ESOP activity Net realized and unrealized appreciation (depreciation) 111,283 1,401,538 70,433 25,486 Net assets received in mergers Other ------------------------------------------------------------------- Net assets available for benefits at December 31, 1998 $3,124,070 $13,764,628 $1,257,990 $469,292 ===================================================================
See accompanying notes to financial statements. -9- 10 PNC Bank Corp. Incentive Savings Plan Statement of Changes in Net Assets Available for Benefits, with Fund Information (continued) Year ended December 31, 1998
BLACKROCK BLACKROCK PNC SMALL CAP CORE PNC BANK BANK CORP. GROWTH EQUITY BOND CORP. STOCK ALLOCATED PORTFOLIO PORTFOLIO FUND ESOP FUND ------------------------------------------------------------------ Net assets available for benefits at January 1, 1998 $ 65,796,158 $350,583,642 $233,946,072 Additions: Interest and dividends $2,111 5,420,866 9,436,717 6,443,779 Contributions: Employer 406 137,066 2,187,166 Employee 57,285 4,581,028 8,111,042 Rollover 7,379 183,645 581,690 Deductions: Distributions to participants or Beneficiaries (10,672,276) (49,522,842) (26,276,861) Expenses (200) (15,598) (71,931) (53,624) Net transfers 1,369,832 (461,970) (4,177,237) (1,060,177) ESOP activity: Interest expense Other ESOP activity 26,607,420 Net realized and unrealized appreciation (depreciation) 302,192 (307,794) (17,040,087) (11,982,168) Net assets received in mergers 71,780 Other (24,451) (1,955,144) 234,001 ------------------------------------------------------------------ Net assets available for benefits at December 31, 1998 $1,739,005 $ 64,708,454 $298,133,016 $227,858,442 ==================================================================
PNC BANK CORP. UNALLOCATED LOAN ESOP FUND FUND TOTAL --------------------------------------------------- Net assets available for benefits at January 1, 1998 $ 66,270,698 $26,859,409 $1,044,954,603 Additions: Interest and dividends 3,102,521 1,092,429 30,804,643 Contributions: Employer 7,341,428 10,415,350 Employee 35,624,672 Rollover 1,837,760 Deductions: Distributions to participants or Beneficiaries (2,993,876) (140,953,562) Expenses (214,608) Net transfers 5,245,711 ESOP activity: Interest expense (2,447,597) (2,447,597) Other ESOP activity (26,607,420) Net realized and unrealized appreciation (depreciation) (6,383,732) (3,420,329) Net assets received in mergers 103 624,052 Other 1,183,402 (10,116) (353,854) --------------------------------------------------- Net assets available for benefits at December 31, 1998 $ 42,459,300 $30,193,660 $ 976,871,130 ===================================================
See accompanying notes to financial statements. -10- 11 PNC Bank Corp. Incentive Savings Plan Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1997
INTERMEDIATE- PNC TERM FIXED SHORT-TERM PNC BANK BANK CORP. EQUITY INCOME-- FIXED INCOME CORP. STOCK ALLOCATED FUND A FUND B --FUND C --FUND D ESOP FUND -------------------------------------------------------------------------------------- Net assets available for benefits at January 1, 1997 $156,096,804 $55,417,543 $ 60,469,746 $218,354,703 $131,619,271 Additions: Interest and dividends 18,615,296 4,645,389 4,765,536 12,038,018 5,370,382 Contributions: Employer 460,196 193,618 304,917 Employee 16,876,580 5,002,814 5,204,913 7,171,907 Rollover 1,002,879 232,716 286,815 272,701 Deductions: Distributions to participants or beneficiaries (16,683,815) (6,564,618) (15,389,481) (32,448,430) (13,273,451) Net transfers 6,048,460 (2,303,953) (842,499) (4,823,151) (869,890) ESOP activity: Interest expense Other ESOP activity 39,219,467 Net realized and unrealized appreciation 17,471,782 919,225 117,854,617 71,861,813 Net assets received in mergers 22,304,348 8,253,424 24,506,147 32,163,277 18,480 Other -------------------------------------------------------------------------------------- Net assets available for benefits at December 31, 1997 $222,192,530 $65,796,158 $ 79,306,094 $350,583,642 $233,946,072 ======================================================================================
PNC BANK CORP. UNALLOCATED LOAN ESOP FUND FUND TOTAL ------------------------------------------------- Net assets available for benefits at January 1, 1997 $ 44,437,399 $23,707,248 $ 690,102,714 Additions: Interest and dividends 4,440,725 2,043,231 51,918,577 Contributions: Employer 11,579,000 12,537,731 Employee 34,256,214 Rollover 1,795,111 Deductions: Distributions to participants or beneficiaries (1,986,724) (86,346,519) Net transfers 2,791,033 ESOP activity: Interest expense (3,515,249) (3,515,249) Other ESOP activity (39,219,467) Net realized and unrealized appreciation 48,548,290 256,655,727 Net assets received in mergers 13,116 87,258,792 Other 291,505 291,505 ------------------------------------------------- Net assets available for benefits at December 31, 1997 $ 66,270,698 $26,859,409 $1,044,954,603 =================================================
See accompanying notes to financial statements. -11- 12 PNC Bank Corp. Incentive Savings Plan Notes to Financial Statements December 31, 1998 1. SIGNIFICANT ACCOUNTING POLICIES VALUATION Marketable securities are stated at fair value. Securities are valued at the last public sale price of the securities listed on the New York Stock Exchange. If no sales were reported, and in the case of securities traded over the counter, the last bid price at the close of business is used. The value of any security not listed or quoted on any exchange is determined by the last closing bid price, reference to the bid price of any published quotations in common use, or by the quotation of a reputable broker. For certain investments that do not have an established fair value, such value is established based on the opinion of the trustee. The fair value of the participation units in the short-term investment funds and registered investment companies are based on quoted redemption values on the last business day of the plan year. Loans are valued at the amount of principal outstanding. The Incentive Savings Plan's (the Plan) assets are concentrated in the stock and bond markets. Realization of the respective values shown on the statements of net assets available for benefits is subject to the results of these markets. The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from such estimates. 2. DESCRIPTION OF THE PLAN PNC Bank Corp. (PNC Bank) is the sponsor of the Plan. The Plan covers substantially all eligible employees of PNC Bank and certain subsidiaries. -12- 13 PNC Bank Corp. Incentive Savings Plan Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) The Plan allows participants to contribute from 1 to 15 percent of their biweekly base compensation on a pretax 401(k) basis. PNC Bank matches 100 percent of employee contributions up to 6 percent of base compensation, subject to Internal Revenue Service (IRS) limitations. For the plan year ended December 31, 1997, an additional 38 percent, $10.6 million, employer matching contribution was made to eligible participants in accordance with the terms of the Employee Stock Ownership Plan (ESOP) contained in the Plan document. This allocation was the result of shares released from the ESOP that were in excess of the amount required to satisfy the standard employer match on the first six percent of elective deferrals. Participants are fully vested in their balances, including the employer contributions. Prior to July 1, 1998, plan income was allocated to participants based on an average participant investment balance on a quarterly basis. Effective July 1, 1998, participants' accounts are valued on a daily basis. Prior to July 1998, participants could elect to invest any voluntary contributions and balances rolled over from prior plans in any of the following investment options: Fund A (an equity fund), Fund B (an intermediate-term fixed income fund), Fund C (a short-term fixed income fund), and Fund D (PNC Bank Corp. common stock). Effective July 1, 1998, balances in the old funds were transferred or re-named to the following: Old Fund New Fund as of July 1, 1998 -------- --------------------------- Fund A - Equity PNC Aggressive Profile Fund Fund B - Intermediate Term Fixed Income BlackRock Core Bond Portfolio Fund C - Short-Term Fixed Income BlackRock Money Market Portfolio Fund D - PNC Bank Corp. Common Stock PNC Bank Corp. Common Stock Fund In addition, seven new investment fund options were added to the Plan as follows: BlackRock Index Equity Portfolio, BlackRock Small Cap Growth Equity Portfolio, BlackRock Large Cap Value Equity Portfolio, BlackRock Small Cap Value Equity Portfolio, BlackRock International Equity Portfolio, PNC Conservative Profile Fund, and PNC Balanced Profile Fund. Employer matching contributions for participants whose age is under 55 are made in PNC Bank Corp. Common Stock. Participants age 55 or older can choose to have their matching contribution made in PNC Bank Corp. Common Stock or in cash to invest in the other ten funds. Benefits to participants for withdrawals requested, but yet to be paid, were $15,360,392 at December 31, 1997. There were no withdrawals requested but not yet paid at December 31, 1998. -13- 14 PNC Bank Corp. Incentive Savings Plan Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) The Plan has a loan feature that allows participants to borrow against their balance in accordance with the loan policies established by the Administrative Committee. Such borrowings are reflected in the Loan Fund. Under certain circumstances, the Plan permits withdrawals by participants. Although it has not expressed an interest to do so, PNC Bank has the right under the Plan to discontinue contributions at any time and to terminate the Plan subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Plan includes a leveraged employee stock ownership plan (ESOP). In January 1990, the ESOP borrowed $140 million from PNC Bank and purchased approximately 7,350,000 shares of PNC Bank Corp. Common Stock through open market purchases. In December 1998, the balance of the remaining ESOP note was refinanced and the new note extended to 2002. The unallocated shares of PNC Bank Corp. Common Stock are pledged as security on the ESOP note. The ESOP shares are used to match a portion of PNC Bank's matching contributions to the Plan. PNC Bank is obligated to make annual contributions sufficient to fund principal and interest payments on the ESOP note net of investment income and realized gains and losses in the unallocated ESOP fund. Shares of PNC Bank Corp. Common Stock allocated to participants totaled 631,400 in 1998 and 947,314 in 1997. The effective interest rate on the ESOP fixed rate note was 5.36 % in 1998. Principal payments are due on an annual basis and interest payments are due quarterly. The following is a schedule of debt maturities: 1999 $ 9,000,000 2000 8,000,000 2001 8,600,000 2002 6,232,881 ----------- $31,832,881 ===========
At December 31, 1998, the ESOP held 1,419,539 unallocated shares of PNC Bank Corp. Common Stock with a market value of $76,655,106. These assets will be used to match future participant contributions. -14- 15 PNC Bank Corp. Incentive Savings Plan Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) Certain of the Plan's investments are in a Master Trust which was established on July 1, 1998 for the investment of assets of the Plan and the PNC Retirement Savings Plan. Each participating retirement plan has an undivided interest in the Master Trust. At December 31, 1998, the Plan's interest in the net assets of the Master Trust was approximately 97%. Investment income and expenses are allocated to the Plan based upon its pro rata share in the net assets of the Master Trust. The following table presents the fair value of investments in the Master Trust at December 31, 1998.
DECEMBER 31 1998 ------------ Investments at fair value: PNC Balanced Profile Fund $ 2,255,414 PNC Aggressive Profile Fund 225,803,407 PNC Conservative Profile Fund 1,782,304 BlackRock Money Market Portfolio 69,039,596 BlackRock Large Cap Value Equity Portfolio 3,192,939 BlackRock Index Equity Portfolio 13,942,125 BlackRock Small Cap Value Equity Portfolio 1,278,676 BlackRock International Equity Portfolio 488,561 BlackRock Small Cap Growth Equity Portfolio 1,771,885 BlackRock Core Bond Portfolio 66,677,771 ------------ $386,232,678 ============
-15- 16 PNC Bank Corp. Incentive Savings Plan Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) The following table presents income recorded by the Master Trust for the period July 1, 1998 through December 31, 1998.
JULY 1, 1998 THROUGH DECEMBER 31 1998 ------------ Net appreciation (depreciation) in fair value of investments: PNC Balanced Profile Fund $ 249,682 PNC Aggressive Profile Fund 1,278,007 PNC Conservative Profile Fund 56,325 BlackRock Large Cap Value Equity Portfolio 117,341 BlackRock Index Equity Portfolio 1,451,540 BlackRock Small Cap Value Equity Portfolio 75,572 BlackRock International Equity Portfolio 26,338 BlackRock Small Cap Growth Equity Portfolio 316,831 BlackRock Core Bond Portfolio (733,233) ----------- 2,838,403 Interest and dividend income 4,599,866 ----------- $ 7,438,269 ===========
3. TRANSACTIONS WITH PARTIES-IN-INTEREST PNC Bank, N.A., a wholly owned subsidiary of PNC Bank, is the Plan's trustee. Investments under the Plan are participant directed. Investment options include various portfolios of the BlackRock Funds, which are registered investment companies (mutual funds) from which PNC Bank affiliates, including BlackRock Financial Management, Inc. and PFPC Inc., receive compensation for providing services, such as investment advisory, custodial and transfer agency services, to the mutual funds. Prior to February 12, 1998, PNC Bank paid administrative costs incurred by the Plan. Effective February 12, 1998, certain plan administrative expenses are paid by the Plan. -16- 17 PNC Bank Corp. Incentive Savings Plan Notes to Financial Statements (continued) 4. INCOME TAX STATUS The Internal Revenue Service ruled June 21, 1995 that the Plan qualifies under Section 401(a) of the Internal Revenue Code (IRC) and, therefore, the related trust is not subject to tax under present income tax law. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan was amended subsequent to the IRS determination letter. Therefore, the amendments are not covered by the determination letter. The Plan Administrator is not aware of any course of action or series of events that have occurred that might adversely affect the Plan's qualified status. 5. PLAN MERGERS AND DIVESTITURES In 1997, assets of approximately $85 million and $1.9 million were merged into the Plan from Midlantic Bank N.A. and BancOne plans, respectively, as a result of acquisitions. 6. SUBSEQUENT EVENTS Effective January 1, 1999, eligible compensation under the Plan was amended to include overtime and eligible variable compensation. Effective April 1, 1999, participants who have attained the age of 50, versus the current age of 55, can choose to have their matching contribution made in PNC Bank Corp. Common Stock or in cash to invest in the other available investment options. Effective May 16, 1998, participants in the former Midland Services Inc. 401(k) Plan became eligible to participate in the Plan. Assets of approximately $5.8 million from the Midland Services Inc. Plan were merged into the Plan during January 1999. -17- 18 PNC Bank Corp. Incentive Savings Plan Notes to Financial Statements (continued) 7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
DECEMBER 31 1998 1997 ------------------------------------------ Net assets available for benefits per the financial statements $ 976,871,130 $ 1,044,954,603 Amounts allocated to withdrawing participants (15,360,392) =============== =============== Net assets available for benefits per the Form 5500 $ 976,871,130 $ 1,029,594,211 =============== ===============
The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:
YEAR ENDED DECEMBER 31, 1998 ----------------- Benefits paid to participants per the financial statements $ 140,953,562 Add: Amounts allocated to withdrawing participants at December 31, 1998 Less: Amounts allocated to withdrawing participants at December 31, 1997 (15,360,392) ============= Benefits paid to participants per the Form 5500 $ 125,593,170 =============
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31 but not yet paid as of that date. -18- 19 PNC Bank Corp. Incentive Savings Plan EIN 25-1435979 Plan 001 Line 27a--Schedule of Assets Held for Investment Purposes December 31, 1998
IDENTITY OF ISSUER, BORROWER, DESCRIPTION OF OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE - ---------------------------------------------------------------------------------------------------------- Interest-Bearing Cash - --------------------- *BlackRock Money Market Portfolio 1,890,050 shares $ 1,890,050 $ 1,890,050 PNC BANK CORP. STOCK FUND Common Stock - ------------ *PNC Bank Corp. 5,520,858 shares 139,431,065 298,126,332 Preferred Stock - --------------- *PNC Bank Corp. 87 shares 1,155 6,684 ----------- ----------- Total PNC Bank Corp. Stock Fund 139,432,220 298,133,016 ESOP ACCOUNT Common Stock - ------------ *PNC Bank Corp: Allocated Account 4,197,406 shares 97,471,142 226,642,586 *Unallocated Account 1,419,539 shares 26,205,357 76,655,106 Interest-Bearing Cash - --------------------- *PNC Money Market Institutional Class 17,322 shares 17,322 17,322 ----------- ----------- Total ESOP Account 123,693,821 303,315,014
-19- 20 PNC Bank Corp. Incentive Savings Plan EIN 25-1435979 Plan 001 Line 27a--Schedule of Assets Held for Investment Purposes (continued) December 31, 1998
IDENTITY OF ISSUER, BORROWER, DESCRIPTION OF OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE - ------------------------------------------------------------------------------------------------------------------ LOAN FUND Participant Loans - ----------------- Rates ranging from 6.00% to 12.40%; maturing January 1, 1999 through June 5, 2014 30,193,660 ---------------------------------------------- Total PNC Bank Corp. Incentive Savings Plan $265,016,091 $633,531,740 =============================================
* Party-in-interest -20- 21 PNC Bank Corp. Incentive Savings Plan EIN 25-1435979 Plan No. 001 Line 27b--Schedule of Loans December 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------------- Zip Original Received Amount Unpaid Interest Name City State Code Amount in 1998 Overdue Balance Rate Loan Date - ----------------------------------------------------------------------------------------------------------------------------------- BETTY J FAULKNER PITTSBURGH PA 15241 $10,000.00 $1,557.56 $1,047.20 $8,569.72 8.50% 21-Apr-98 VIENNA L MARSHALL CARNEY'S POINT NJ 08069 1,100.00 89.18 112.00 1,024.96 8.50 31-Mar-98 RICHARD J ECKHARDT COLLINGSWOOD NJ 08108 43,200.00 2,030.35 3,654.63 37,080.75 8.25 31-Mar-97 MARY KAY STRING BROWNS MILLS NJ 08015 1,800.00 260.90 234.81 1,226.47 8.25 31-Mar-97 MICHAEL J BATTAGLIA WEST CHESTER PA 19382 21,100.00 3,607.31 1,437.96 4,363.87 8.50 31-Mar-95 TAMMY L MORGAN PITTSBURGH PA 15207 3,200.00 2,130.37 664.37 658.11 8.50 30-Sep-97 MICHAEL C ROBINSON PITTSBURGH PA 15206 4,300.00 40.66 365.94 4,273.40 8.50 31-Dec-97 TERRI BETH EASTWOOD MT PLEASANT PA 15666 2,000.00 78.77 173.94 1,530.17 8.25 31-Mar-97 SANDRA E BAGWELL PHILADELPHIA PA 19121 1,800.00 - 153.18 1,286.81 8.50 31-Mar-96 REGINA MCHALE SECANE PA 19018 2,800.00 61.48 157.92 2,055.18 8.25 30-Jun-96 GRACE V GALASCHEWSKI PHILADELPHIA PA 19123 20,000.00 2,080.10 1,701.90 18,101.19 8.50 30-Sep-97 SHIRLYN D SWANN PHILADELPHIA PA 19150 5,000.00 632.81 344.04 1,920.65 9.00 30-Sep-95 BETTINA G MOULDEN PITTSBURGH PA 15205 3,000.00 489.34 376.08 1,614.71 8.25 31-Mar-97 MARVIN BAXTER WILMINGTON DE 19805 4,000.00 - 338.40 3,379.84 8.25 31-Dec-96 LESLIE A SHAFFER WAYNE NJ 07470 4,900.00 570.24 641.52 4,452.83 8.50 31-Dec-97 PAULETTE B WILLIAMS CINCINNATI OH 45223 4,000.00 426.92 226.92 2,801.46 8.50 31-Mar-96 JEAN M LEE CINCINNATI OH 45214 3,400.00 - 1.54 1.54 7.25 30-Sep-94 LESLIE G PATTERSON PITTSBURGH PA 15221 2,000.00 607.04 250.74 819.59 8.25 31-Mar-97 BARBARA L TERRY LOUISVILLE KY 40219 5,200.00 114.18 293.28 3,816.72 8.25 30-Jun-96 ANN LOUISE EMBRY LOUISVILLE KY 40212 5,500.00 462.25 373.08 3,992.25 8.25 31-Dec-96 CLENON GREEN,JR LOUISVILLE KY 40210 25,000.00 3,237.39 1,880.00 16,396.93 8.25 30-Jun-96 CHRISTINA E MILLER PORT CLINTON OH 43452 1,500.00 62.84 282.78 1,446.88 8.50 31-Dec-97
-21- 22 PNC Bank Corp. Incentive Savings Plan EIN 25-1435979 Plan 001 Line 27d--Schedule of Reportable Transactions Year ended December 31, 1998
FAIR VALUE COST OF ASSETS ON NET PURCHASE SELLING OF TRANSACTION GAIN DESCRIPTION OF ASSETS PRICE PRICE ASSETS DATE (LOSS) - -------------------------------------------------------------------------------------------------------------------- Category (i)--Single Transaction - -------------------------------- BlackRock Core Bond Portfolio #7 Institutional Class ---------------------------------------------------- 5,795,681 shares $57,435,196 $57,435,196 $57,435,196 BlackRock Money Market Portfolio #1 ----------------------------------- 68,435,396 shares $68,435,396 68,435,396 68,435,396 Category (iii)--Series of securities transactions - ------------------------------------------------- BlackRock Money Market Portfolio #1 ----------------------------------- 99,528,297 shares 99,528,297 99,528,297 99,528,297 184,291,581 shares 184,291,581 184,291,581 184,291,581 BlackRock Fund #7 Institutional Class ------------------------------------- 6,059,152 shares 60,043,343 60,043,343 60,043,343 11,451 shares -- 113,596 113,253 113,596 $ 343 PNC Bank Corp. Common Stock --------------------------- 530,759 shares 28,607,634 28,607,634 28,607,634 560,964 shares 30,775,222 14,496,622 30,775,222 16,278,600
There were no category (ii) or (iv) reportable transactions during 1998. 22 23 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, PNC Bank Corp. has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. PNC BANK CORP. (Registrant) By /s/ Robert L. Haunschild --------------------------------- Robert L. Haunschild Senior Vice President and Chief Financial Officer Date: June 29, 1999 24 EXHIBIT INDEX
Exhibit No. Description Method of Filing + - ------------ -------------------------------------------------------------------- -------------------------------------------- 3.1 Articles of Incorporation of the Corporation, as amended. Incorporated herein by reference to Exhibit 3.1 of the Annual Report on Form 10-K for the year ended December 31, 1998 ("1998 Form 10-K"). 3.2 By-Laws of the Corporation, as amended. Incorporated herein by reference to Exhibit 99.2 of the Current Report on Form 8-K dated January 19, 1999. 4.1 Instruments defining the rights of holders of long-term debt of the Corporation and its subsidiaries are not filed as Exhibits because the amount of debt under each instrument is less than 10 percent of the consolidated assets of the Corporation. The Corporation undertakes to file these instruments with the Commission on request. 4.2 Designation of Series: $1.80 Cumulative Convertible Preferred Incorporated herein as part of Exhibit 3.1. Stock -- Series A. 4.3 Designation of Series: $1.80 Cumulative Convertible Preferred Incorporated herein as part of Exhibit 3.1. Stock -- Series B. 4.4 Designation of Series: $1.60 Cumulative Convertible Preferred Incorporated herein as part of Exhibit 3.1. Stock -- Series C. 4.5 Designation of Series: $1.80 Cumulative Convertible Preferred Incorporated herein as part of Exhibit 3.1. Stock -- Series D. 4.6 Designation of Series: Fixed/Adjustable Rate Noncumulative Incorporated herein as part of Exhibit 3.1. Preferred Stock - Series F. 10.1 Supplemental Executive Retirement Income and Disability Plan of Incorporated herein by reference to Exhibit 10.2 the Corporation. of the Annual Report on Form 10-K for the year ended December 31, 1990 ("1990 Form 10-K"). * 10.2 Amendments to Supplemental Executive Retirement Income and Incorporated herein by reference to Exhibit 10.2 Disability Plan. of the Annual Report on Form 10-K for the year ended December 31, 1996 ("1996 Form 10-K). * 10.3 Amendment to Supplemental Executive Retirement Income and Incorporated herein by reference to Exhibit 10.3 Disability Plan. of the 1998 Form 10-K. * 10.4 Supplemental Executive Life Insurance and Spouse's Benefit Plan of Incorporated herein by reference to Exhibit 10.3 the Corporation. of the 1990 Form 10-K. * 10.5 November 21, 1996 Amendment to Supplemental Executive Life Incorporated herein by reference to Exhibit 10.4 Insurance and Spouse's Benefit Plan. of the 1996 Form 10-K. * 10.6 1997 Long-Term Incentive Award Plan of the Corporation ("1997 Incorporated herein by reference to Exhibit 4.3 Award Plan"). of the Corporation's Post-Effective Amendment No. 1 to Registration Statement on Form S-8 at File No. 33-54960. * 10.7 Form of Nonstatutory Stock Option Agreement under 1997 Award Plan. Filed as Exhibit 10.6 to the 1997 Form 10-K. * 10.8 Form of Nonstatutory Stock Option Agreement under 1997 Award Incorporated herein by reference to Exhibit 10.8 Plan for options granted on or after February 17,1999. of the 1998 Form 10-K.* 10.9 Form of Incentive Share Agreement under 1992 Award Plan (June Incorporated herein by reference to Exhibit 10.7 1995), as amended November 21, 1996. of the 1996 Form 10-K. * 10.10 Form of Addendum to Nonstatutory Stock Option Agreement relating Filed as Exhibit 10.8 to the 1997 Form 10-K. * to Reload Nonstatutory Stock Options. 10.11 Form of Reload Nonstatutory Stock Option Agreement. Filed as Exhibit 10.9 to the 1997 Form 10-K. * 10.12 Form of Incentive Share Agreement - Share Price, RSR and ROCE Filed as Exhibit 10.10 to the 1997 Form 10-K. * Performance Goals.
25
Exhibit No. Description Method of Filing + - ------------ -------------------------------------------------------------------- -------------------------------------------- 10.13 PNC Bank Corp. 1994 Annual Incentive Award Plan. Incorporated by reference to Exhibit 10.6 of the Annual Report on Form 10-K for the year ended December 31, 1994 ("1994 Form 10-K"). * 10.14 PNC Bank Corp. 1996 Executive Incentive Award Plan. Incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 1996 ("3Q 1996 Form 10-Q"). * 10.15 PNC Bank Corp. and Affiliates Deferred Compensation Plan. Incorporated by reference to Exhibit 4.2 to the Corporation's Registration Statement on Form S-8 at File No. 333-18069. * 10.16 Amendment to PNC Bank Corp. and Affiliates Deferred Compensation Incorporated herein by reference to Exhibit 10.16 Plan to the 1998 Form 10-K.* 10.17 PNC Bank Corp. Supplemental Incentive Savings Plan as amended. Incorporated by reference to Exhibit 4.1 to the Corporation's Registration Statement on Form S-8 at File No. 333-18069. * 10.18 PNC Bank Corp. Supplemental Pension Plan, as amended. Incorporated herein by reference to Exhibit 10.12 of the 1996 Form 10-K. * 10.19 1992 Director Share Incentive Plan. Incorporated herein by reference to Exhibit 10.6 of the Annual Report on Form 10-K for the year ended December 31, 1992. * 10.20 PNC Bank Corp. Directors Retirement Plan. Incorporated by reference to Exhibit 10.7 of the 1994 Form 10-K. * 10.21 PNC Bank Corp. Directors Deferred Compensation Plan. Incorporated by reference to Exhibit 10.1 of the 3Q 1996 Form 10-Q. * 10.22 Form of Change in Control Severance Agreement. Incorporated herein by reference to Exhibit 10.17 of the 1996 Form 10-K. * 10.23 Amended and Restated Trust Agreement between the Corporation, Incorporated herein by reference to Exhibit as Settlor, and NationsBank, N.A., as Trustee (who has been 10.18 of the 1996 Form 10-K. * replaced by Hershey Trust Company, as successor Trustee). 12.1 Computation of Ratio of Earnings to Fixed Charges. Filed as Exhibit 12.1 to the 1998 Form 10-K. 12.2 Computation of Ratio of Earnings to Combined Fixed Charges and Filed as Exhibit 12.2 to the 1998 Form 10-K. Preferred Dividends. 13 Excerpts from the Annual Report to Shareholders for the year ended Filed as Exhibit 13 to the 1998 Form 10-K. December 31, 1998. Such Annual Report, except for those portions thereof that are expressly incorporated by reference herein, is furnished for information of the SEC only and is not deemed to be "filed" as part of this Form 10-K. 21 Schedule of Certain Subsidiaries of the Corporation. Filed as Exhibit 21 to the 1998 Form 10-K. 23.1 Consent of Ernst & Young LLP, independent auditors for the Filed as Exhibit 23 to the 1998 Form 10-K. Corporation. 23.2 Consent of Ernst & Young LLP, independent auditors for the PNC Filed herewith. Plan. 24 Power of Attorney of directors and officers of the Corporation. Filed as Exhibit 24 to the 1998 Form 10-K. 27 Financial Data Schedule. Filed as Exhibit 27 to the 1998 Form 10-K.
- -------------------------------------------- + Except where otherwise expressly noted, incorporated document references are to Commission File No. 1-9718. * Denotes management contract or compensatory plan. EX-23.2 2 CONSENT OF ERNST & YOUNG LLP 1 Exhibit 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-25140) pertaining to the PNC Bank Corp. Incentive Savings Plan and in the related Prospectus of our report dated June 4, 1999, with respect to the financial statements and schedules of the PNC Bank Corp. Incentive Savings Plan, all of which are included in this Annual Report on Form 10-K/A (Amendment No. 1) for the year ended December 31, 1998. /s/ ERNST & YOUNG LLP June 29, 1999 Pittsburgh, Pennsylvania -----END PRIVACY-ENHANCED MESSAGE-----