Wheat First Butcher Singer Inc. is paying $350,000 to members of its corporate finance department to provide a fairness opinion in the brokerage's merger with First Union Corp.

Proxy materials filed this week with the Securities and Exchange Commission said both the Virginia-based brokerage and First Union, the nation's sixth-largest banking company, used their own staffs to advise on the merger, which was announced Aug. 20.

Such in-house opinions on bank-brokerage mergers are not unusual. For example, both Alex. Brown & Sons Inc. and Bankers Trust New York Corp. used their own investment bankers to advise their respective boards of directors on the two companies' $1.7 billion merger this year.

But rarely are the costs of such in-house advisory work disclosed. First Union did not say how much it paid its staff for a fairness opinion on the acquisition.

The proxy said that First Union, which is based in Charlotte, N.C., will issue 10.3 million shares to help finance the merger and that 1.7 million "restricted shares" will be set aside as an incentive to keep selected Wheat First employees.

Those restricted shares will vest over three years, and Wheat First chairman and chief executive Marshall B. Wishnack, who is to become chief executive of Wheat First Union after the deal is completed, will decide - in consultation with First Union-who gets the shares and how many.

Mr. Wishnack is to be paid 105% of his 1997 salary for the next three years, plus annual "continuity payments" equal to 37.5% of his salary for the first two years and 75% of his salary in the third, the materials filed with the SEC said. Three other top executives qualified for the same package.

Wheat First and First Union began merger discussions in January and signed a confidentiality agreement, according to the proxy, but did not begin to explore a sale seriously until July 2, two days after NationsBank Corp. said it would buy Montgomery Securities.

On that day, Mr. Wishnack contacted First Union chief executive officer Edward E. Crutchfield to discuss a possible joint venture or sale of Wheat First's capital markets division.

It was decided, however, that a partial merger couldn't be done for tax reasons, and so on Aug. 8 Mr. Crutchfield contacted Mr. Wishnack to say his company was interested in a full acquisition.

As in many deals these days, the details of the transaction were hammered out in short order, and the agreement was signed Aug. 20.

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