SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
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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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The following is a press release issued by SunTrust Banks, Inc. on
May 22, 2001.
[SunTrust Banks, Inc. Logo]
Contacts:
Investors Media
Gary Peacock Barry Koling George Sard/Debbie Miller/Denise
DesChenes
SunTrust SunTrust Citigate Sard Verbinnen
404-658-4879 404-230-5268 212-687-8080
SUNTRUST DISAPPOINTED BY WACHOVIA'S REJECTION OF HIGHER OFFER
Will Proceed With Its Superior Proposal And Solicit Wachovia Shareholders
To Vote Against Low-Premium First Union Transaction
Initiating Litigation Against Wachovia Directors, Wachovia, and First Union
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Atlanta, May 22, 2001 -- SunTrust Banks, Inc. (NYSE: STI) announced
today that it is proceeding with its superior proposal to merge with
Wachovia Corporation (NYSE: WB) and will continue with its plan to solicit
Wachovia shareholders to vote against the low-premium transaction proposed
by First Union Corporation (NYSE: FTU).
L. Phillip Humann, Chairman, President and Chief Executive Officer of
SunTrust, said, "It is difficult to understand how the Wachovia Board can
conclude that our offer is not superior to First Union's transaction. The
SunTrust proposal offers a higher current value, a simpler and better
dividend, a stronger currency, and lower execution risk. Our proposal is
also more favorable for Wachovia's employees and communities, especially
those in North Carolina and South Carolina. We are particularly
disappointed that the Wachovia Board made its decision without talking to
us, as it was clearly permitted to do under its agreement with First Union.
The fact that the First Union/Wachovia agreement has already been amended
twice says a lot about the inferiority of the First Union proposal. Despite
those amendments, the First Union/Wachovia transaction still provides lower
value to Wachovia shareholders. Fortunately, the Wachovia shareholders will
have the chance to express their view on which proposal they believe is
better."
SunTrust is initiating litigation in state court in Georgia against
members of the Wachovia Board, Wachovia and First Union challenging, among
other things, the validity of the stock option that Wachovia granted to
First Union because it contains a number of unprecedented and egregious
features. SunTrust is also initiating litigation in federal court in
Georgia against First Union and Wachovia claiming, among other things, that
their public disclosures concerning their transaction are materially false
and misleading in several important respects. SunTrust will file shortly
the necessary regulatory applications in connection with its merger
proposal.
On May 14, 2001, SunTrust submitted a merger proposal to Wachovia
pursuant to which Wachovia shareholders would receive 1.081 shares of
SunTrust common stock for each Wachovia share. In addition, SunTrust would
increase its annual per share dividend to $2.22 so that Wachovia
stockholders would receive on a pro forma equivalent basis the same $2.40
annual per share dividend they currently receive.
SunTrust Banks, Inc. is the nation's ninth-largest commercial
banking organization. The Company operates through an extensive
distribution network in Alabama, Florida, Georgia, Maryland, Tennessee,
Virginia, and the District of Columbia and also serves customers in
selected markets nationally. Its primary businesses include traditional
deposit and credit services as well as trust and investment services.
Through various subsidiaries the Company provides credit cards, mortgage
banking, insurance, brokerage and capital markets services.
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
statements include, but are not limited to, (i) statements about the
benefits of a merger between SunTrust and Wachovia, including future
financial and operating results, cost savings and accretion to reported and
cash earnings that may be realized from such merger; (ii) statements with
respect to SunTrust's plans, objectives, expectations and intentions and
other statements that are not historical facts; and (iii) other statements
identified by words such as "believes", "expects", "anticipates",
"estimates", "intends", "plans", "targets", "projects" and similar
expressions. These statements are based upon the current beliefs and
expectations of SunTrust's management and are subject to significant risks
and uncertainties. Actual results may differ from those set forth in the
forward- looking statements. The following factors, among others, could
cause actual results to differ materially from the anticipated results or
other expectations expressed in the forward-looking statements: (1) the
businesses of SunTrust and Wachovia may not be integrated successfully or
such integration may be more difficult, time-consuming or costly than
expected; (2) expected revenue synergies and cost savings from the merger
may not be fully realized or realized within the expected time frame; (3)
revenues following the merger may be lower than expected; (4) deposit
attrition, operating costs, customer loss and business disruption,
including, without limitation, difficulties in maintaining relationships
with employees, customers, clients or suppliers, may be greater than
expected following the merger; (5) the regulatory approvals required for
the merger may not be obtained on the proposed terms or on the anticipated
schedule; (6) the failure of SunTrust's and Wachovia's stockholders to
approve the merger; (7) competitive pressures among depository and other
financial institutions may increase significantly and may have an effect on
pricing, spending, third-party relationships and revenues; (8) the strength
of the United States economy in general and the strength of the local
economies in which the combined company will conduct operations may be
different than expected, resulting in, among other things, a deterioration
in credit quality or a reduced demand for credit, including the resultant
effect on the combined company's loan portfolio and allowance for loan
losses; (9) changes in the U.S. and foreign legal and regulatory framework;
and (10) adverse conditions in the stock market, the public debt market and
other capital markets (including changes in interest rate conditions) and
the impact of such conditions on the combined company's capital markets and
asset management activities. Additional factors that could cause results to
differ materially from those described in the forward-looking statements
can be found in SunTrust's reports (such as Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with
the Securities and Exchange Commission and available at the SEC's website
(www.sec.gov). All subsequent written and oral forward-looking statements
concerning the proposed transaction or other matters attributable to
SunTrust or any person acting on its behalf are expressly qualified in
their entirety by the cautionary statements above. SunTrust does not
undertake any obligation to update any forward-looking statement to reflect
circumstances or events that occur after the date the forward-looking
statements are made. On May 14, 2001, SunTrust filed with the SEC a
preliminary proxy statement for solicitation of proxies from Wachovia
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 site. 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, 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.
The following is a press release issued by SunTrust Banks, Inc. on May 23, 2001.
[SunTrust Banks, Inc. Logo]
Contacts:
Investors Media
Gary Peacock Barry Koling George Sard/Debbie Miller/Denise DesChenes
SunTrust SunTrust Citigate Sard Verbinnen
404-658-4879 404-230-5268 212-687-8080
SUNTRUST FILES LITIGATION AGAINST WACHOVIA DIRECTORS, WACHOVIA,
AND FIRST UNION IN CONNECTION WITH PROPOSED TRANSACTION
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Atlanta, May 23, 2001 -- SunTrust Banks, Inc. (NYSE: STI) announced
today that it has filed federal and state litigation against Wachovia
Corporation (NYSE: WB) and First Union Corporation (NYSE: FTU) in
connection with their proposed low-premium transaction.
SunTrust filed litigation in state court in Georgia against members
of the Wachovia Board of Directors, Wachovia and First Union challenging
the validity of the stock option that Wachovia granted to First Union.
SunTrust said the option contains a number of unprecedented features that
give the option a minimum value of $780 million in the event Wachovia
consummates a merger with a third party - and a potential value materially
in excess of $1 billion. In addition, because the option can be exercised
with non-cash consideration, First Union could saddle Wachovia with roughly
$2.5 billion of undesirable assets as payment for the option shares.
SunTrust said that the option, even at a $780 million value, represents an
egregious break-up fee relative to the size of the First Union transaction,
compared to what is usual and customary practice in merger and acquisition
transactions. SunTrust said that the stock option serves no purpose other
than to attempt to lock up the low-premium First Union transaction.
SunTrust is also challenging a feature of Wachovia's merger agreement with
First Union that would prevent Wachovia from terminating that agreement
until January 16, 2002, even if Wachovia shareholders vote down the First
Union transaction well before that date.
SunTrust also filed litigation in federal court in Georgia against
First Union and Wachovia. SunTrust claims that certain of First Union's and
Wachovia's public disclosures concerning their transaction are materially
false and misleading in several important respects. In particular, they
have misled the market into believing the option has a $780 million "cap"
on its value when in fact the option was deliberately designed to have a
minimum value of $780 million and potentially a substantially higher value.
"While we regret having to resort to litigation, we firmly believe
that serious errors in business judgment were committed in connection with
Wachovia's proposed transaction with First Union," said L. Phillip Humann,
Chairman, President and Chief Executive Officer of SunTrust. "We know the
difference between deal protection mechanisms that are normal and customary
- and lock-up devices that are clearly out of bounds. The lock-up option
granted by Wachovia to First Union contains features that are unprecedented
- and the $780 million minimum penalty that applies in the event Wachovia
merges with a third party, at roughly 6% of First Union's deal value, is
off the charts compared to typical merger termination fees."
Mr. Humann added, "Apart from the size of the penalty embedded in the
lock-up option, we find it incredible that the board of directors of
Wachovia could possibly put itself in the position of issuing more than
$2.5 billion worth of its common stock to First Union in exchange for
assets of unknown identity and as to which it has performed no due
diligence. If the Wachovia Board truly understands how this option works,
we question the rational business purpose behind granting a scorched earth
option in order to lock-up a low-premium deal, the benefits of which are
purely speculative. If the Wachovia Board didn't understand the workings of
the option it granted First Union, then we suppose that would speak for
itself."
SunTrust Banks, Inc. is the nation's ninth-largest commercial banking
organization. The Company operates through an extensive distribution
network in Alabama, Florida, Georgia, Maryland, Tennessee, Virginia, and
the District of Columbia and also serves customers in selected markets
nationally. Its primary businesses include traditional deposit and credit
services as well as trust and investment services. Through various
subsidiaries the Company provides credit cards, mortgage banking,
insurance, brokerage and capital markets services.
This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements include,
but are not limited to, (i) statements about the benefits of a merger
between SunTrust and Wachovia, including future financial and operating
results, cost savings and accretion to reported and cash earnings that may
be realized from such merger; (ii) statements with respect to SunTrust's
plans, objectives, expectations and intentions and other statements that
are not historical facts; and (iii) other statements identified by words
such as "believes", "expects", "anticipates", "estimates", "intends",
"plans", "targets", "projects" and similar expressions. These statements
are based upon the current beliefs and expectations of SunTrust's
management and are subject to significant risks and uncertainties. Actual
results may differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in
the forward-looking statements: (1) the businesses of SunTrust and Wachovia
may not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; (2) expected revenue
synergies and cost savings from the merger may not be fully realized or
realized within the expected time frame; (3) revenues following the merger
may be lower than expected; (4) deposit attrition, operating costs,
customer loss and business disruption, including, without limitation,
difficulties in maintaining relationships with employees, customers,
clients or suppliers, may be greater than expected following the merger;
(5) the regulatory approvals required for the merger may not be obtained on
the proposed terms or on the anticipated schedule; (6) the failure of
SunTrust's and Wachovia's stockholders to approve the merger; (7)
competitive pressures among depository and other financial institutions may
increase significantly and may have an effect on pricing, spending,
third-party relationships and revenues; (8) the strength of the United
States economy in general and the strength of the local economies in which
the combined company will conduct operations may be different than
expected, resulting in, among other things, a deterioration in credit
quality or a reduced demand for credit, including the resultant effect on
the combined company's loan portfolio and allowance for loan losses; (9)
changes in the U.S. and foreign legal and regulatory framework; and (10)
adverse conditions in the stock market, the public debt market and other
capital markets (including changes in interest rate conditions) and the
impact of such conditions on the combined company's capital markets and
asset management activities. Additional factors that could cause results to
differ materially from those described in the forward-looking statements
can be found in SunTrust's reports (such as Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with
the Securities and Exchange Commission and available at the SEC's website
(www.sec.gov). All subsequent written and oral forward-looking statements
concerning the proposed transaction or other matters attributable to
SunTrust or any person acting on its behalf are expressly qualified in
their entirety by the cautionary statements above. SunTrust does not
undertake any obligation to update any forward-looking statement to reflect
circumstances or events that occur after the date the forward-looking
statements are made. On May 14, 2001, SunTrust filed with the SEC a
preliminary proxy statement for solicitation of proxies from Wachovia
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 site. 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, 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.