SCHEDULE 14A
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INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant / /
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/ / Preliminary Proxy Statement / / Confidential, for the use of the
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(as permitted by Rule 14a-6(e)(2))
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WACHOVIA CORPORATION
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(Name of Registrant As Specified In Its Charter)
SUNTRUST BANKS, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11: (set forth the amount on which the filing fee is
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The following is a Memorandum and Q&A distributed to all employees of SunTrust
Banks, Inc. on Monday, May 14, 2001.
Memorandum
[SunTrust Banks, Inc. Logo]
DATE: May 14, 2001
TO: All SunTrust Employees
FROM: Phil Humann
SUBJECT: Important News
Early this morning, SunTrust announced that we have made a proposal to acquire
Wachovia Corporation. This is an important, exciting and positive action by
SunTrust, and one that will be highly visible in our region and nationally.
Accordingly, it is essential that you have a clear understanding of what has
occurred, why, and what it means.
To help answer those questions, accompanying this memo is the text of a SunTrust
press release issued this morning. It outlines the key elements of our proposal
and also includes links to more detailed information. Also attached is a "Q&A"
which should go a long way towards answering questions you may have or that you
may get from customers or friends.
Highlights of today's news are:
o We have delivered a letter directly to Wachovia's Board of Directors proposing
a combination of Wachovia and SunTrust to create an even stronger Southeastern
financial services franchise than either institution enjoys alone.
o Wachovia and SunTrust are an ideal fit strategically and culturally, and our
proposal is financially compelling.
o We are confident our offer is far superior to the proposed merger plan
involving Wachovia and First Union Corporation that was announced in April 2001.
Specifically, we believe our proposal is much more attractive to Wachovia
shareholders while also serving the interests of our own. It should also be
significantly less disruptive for Wachovia employees and customers. Our own
customers and
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employees also stand to benefit from the growth opportunities that would stem
from being part of a larger, more diverse organization.
o We are hopeful that the Wachovia Board will perceive the merits of our
proposal and agree to work with us on a plan to quickly implement it. Completion
of our proposed transaction could occur later this year if we are successful. Of
course, this would require the termination of Wachovia's agreement with First
Union.
The process through which all this will be worked out could, however, be a
prolonged one. You should know that seeing it through is a major corporate
priority for SunTrust. As the process unfolds, I urge you to keep two things in
mind:
First, the prospect of a SunTrust-Wachovia combination is very exciting. While
SunTrust has excellent prospects on its own, the combined organization we
envision will have superior financial strength, numerous competitive advantages
and even greater expansion opportunities.
Second, what permits us to make a proposal like this is the relative strength of
our "currency" -- that is, SunTrust stock. As you know, a major factor
influencing our stock price is our earnings performance which, in turn, depends
upon how well we do in executing our sales, efficiency and other
performance-related programs.
The good news is that our operating model provides a framework for SunTrust
managers and employees throughout our organization to keep focused on our 2001
goals, even as a small group of senior managers in Atlanta works to pursue the
SunTrust-Wachovia proposal.
As developments occur we will keep you posted. In the meantime, thank you, as
always, for your interest and support.
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[SunTrust Banks, Inc. Logo]
QUESTIONS & ANSWERS
1. WHY DOES THIS TRANSACTION MAKE SENSE FOR SUNTRUST?
The combination of SunTrust and Wachovia is a compelling transaction. The
combination will create a Southeastern financial services franchise with strong
positions in seven contiguous high-growth states and a powerful franchise in key
business lines including retail banking, commercial banking, corporate and
investment banking and wealth management. Moreover, the companies have
complementary cultures and both share a commitment to their local markets,
service quality and relationship-based banking.
2. WHY ARE WE MAKING THIS OFFER NOW?
We are making this offer now because, as noted in our press release, we believe
it offers far superior value to both Wachovia and SunTrust shareholders than the
proposed First Union transaction that was announced last month.
3. HOW EXACTLY IS SUNTRUST'S PROPOSAL SUPERIOR TO FIRST UNION'S PROPOSAL FOR
WACHOVIA?
For Wachovia shareholders, they would get a higher price (17% premium over the
current value of the First Union transaction, based on May 11, 2001 closing
stock prices) in a better-performing security as well as a bigger dividend from
a better-capitalized company. Employees would benefit from a simpler
integration process and by being part of a stronger organization. Customers
should experience less disruption, and many communities would face fewer job
losses and branch closings, especially in the Carolinas where SunTrust does not
currently operate retail branches.
4. WHAT HAPPENS NEXT?
The Wachovia Board considers our offer. We hope they recognize it as a superior
proposal and agree to meet with us to negotiate an agreement and develop
specific merger integration plans.
5. WHAT IF WACHOVIA REJECTS THE OFFER?
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Our answer to "what-if" questions is this: We believe we've made a compelling
proposal that provides superior value to Wachovia shareholders. We firmly
believe in the strength of a SunTrust-Wachovia combination, and we are prepared
to take the necessary steps to complete a transaction.
6. HOW LONG COULD THIS GO ON?
We just can't say, as there are a number of variables. We strongly prefer a
negoti ated transaction that could be consummated quickly.
7. IF THIS DOES GO ON FOR A LONG TIME, IS THERE A RISK IT WILL DIVERT
MANAGEMENT ATTENTION FROM OUR OTHER PRIORITIES?
It will actually be a fairly small team that will focus on this proposed
transaction. Under our operating model, managers and employees throughout the
organization will continue to focus on serving customers and implementing our
sales, efficiency and other programs at the same high standards as always.
8. IF WE FAIL TO COMPLETE THIS DEAL, WHAT DOES IT MEAN FOR SUNTRUST?
While the SunTrust-Wachovia combination would certainly accelerate our growth
strategy, SunTrust is in great shape, with an extremely strong franchise,
leading positions in its markets, and excellent performance and growth prospects
on our own.
9. ARE WE CONCERNED ABOUT OTHER BIDDERS? WHO ELSE MIGHT JUMP IN?
We're confident that we've made a compelling proposal that would provide
superior value to Wachovia shareholders. Moreover, we firmly believe that
SunTrust is the most logical candidate to combine with Wachovia. Beyond that, we
can't speculate on what may or may not happen.
10. WHAT DOES THIS MEAN FOR SUNTRUST'S EARNINGS?
The transaction is expected to be slightly accretive to SunTrust's earnings per
share in 2002, excluding one-time merger-related charges, and increasingly
accretive thereafter.
11. HOW WILL THE PROPOSED MERGER INTEGRATION WORK?
Integration details would be worked out in a finalized integration plan we would
hope to develop in concert with Wachovia. Until then, we are unable to provide a
lot of specifics. That said, SunTrust is assuming a conservative implementation
plan based on the
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highly successful Crestar merger, with an emphasis on customer and
revenue retention, as well as maintaining customer service quality standards
during systems conversions. We are confident we can integrate SunTrust's and
Wachovia's complementary and overlapping businesses without the customer
disruption and other problems that often accompany large bank mergers.
12. WHAT WILL BE THE COMBINED ENTITY'S NAME? ITS HEADQUARTERS? ITS CEO?
The combined entity will be SunTrust. The combined company would be
headquartered in Atlanta, and Winston-Salem would become the headquarters for
our new Carolinas banking franchise. SunTrust CEO Phil Humann would be CEO in
the combined company.
13. WHAT DOES THIS TRANSACTION MEAN FOR CUSTOMERS?
Our proposal has no immediate impact on customers. Looking ahead, both SunTrust
and Wachovia share a strong customer focus; we believe bringing together these
two leading players in the Southeast market will deliver additional value to
customers of both companies. We will have an even stronger organization, with a
full range of products to meet customers' current needs and enhanced resources
to permit greater investment in new product development.
14. WILL THERE BE BRANCH CLOSINGS?
At this point, we anticipate consolidation of between 150-175 branches out of a
total of approximately 1,800. Pending finalization of integration plans, it's
premature to comment on specific locations. Minimizing customer inconvenience
and redeploying branch employees will be primary considerations in making these
decisions.
15. WILL THERE BE EMPLOYEE LAYOFFS? IF SO, HOW MANY EMPLOYEES WILL BE AFFECTED,
IN WHAT LOCATIONS, AND WHEN?
In a proposed SunTrust/Wachovia combination, we anticipate eliminating far fewer
than the 7,000 jobs to be lost under the proposed First Union merger. As with
other integration-related issues, it is far too early to discuss specific
locations, functions or timing. We can say, however, that we would expect
attrition to account for a good part of any job eliminations. For those
employees whose jobs are impacted by the merger, we are committed to providing
competitive severance and job-seeking support.
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Note: The following notice is included to meet certain legal requirements:
On May 14, 2001 SunTrust Banks, Inc. filed with the Securities and Exchange
Commission a preliminary proxy statement for solicitation of proxies from
Wachovia Corporation stockholders in connection with the Wachovia 2001 annual
meeting of stockholders. Subject to future developments, SunTrust intends to
file with the SEC a registration statement at a date or dates subsequent hereto
to register the SunTrust shares to be issued in the proposed transaction.
Investors and security holders are urged to read the proxy statement and
registration statement (when available) and any other relevant documents filed
with the SEC, as well as any amendments or supplements to those documents,
because they contain (or will contain) important information. Investors and
security holders may obtain a free copy of the proxy statement and the
registration statement (when available) and other relevant documents at the
SEC's Internet web site at www.sec.gov. The proxy statement, the registration
statement (when available) and such other documents may also be obtained free of
charge from SunTrust by directing such request to: SunTrust Banks, Inc., 303
Peachtree Street, N.E., Atlanta, GA 30308, Attention: Gary Peacock
(404-658-4753).
SunTrust, its directors and executive officers and certain other persons may be
deemed to be "participants" in SunTrust's solicitation of proxies from Wachovia
stockholders. A detailed list of the names, affiliations and interests of the
participants in the solicitation is contained in SunTrust's preliminary proxy
statement on Schedule 14A, filed with the SEC on May 14, 2001.
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