SCHEDULE 14A
(Rule 14a-101)
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 / /
Filed by a Party other than the Registrant /x/
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for use of the
Commission only (as permitted
By Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-12
WACHOVIA CORPORATION
------------------------------------------------------------------------------
(Name of Registrant As Specified In Its Charter)
SUNTRUST BANKS, INC.
------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/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:
------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------------
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 calculated and state how it was determined):
------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the form or schedule and the
date of its filing.
1) Amount previously paid:
------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.
------------------------------------------------------------------------------
3) Filing party:
------------------------------------------------------------------------------
4) Date filed:
------------------------------------------------------------------------------
The following is a press release issued by SunTrust Banks, Inc.
on June 28, 2001.
[Logo of SunTrust Banks, Inc.]
Contacts:
Investors Media
Gary Peacock Barry Koling George Sard/Debbie Miller/Denise DesChenes
SunTrust SunTrust Citigate Sard Verbinnen
404-230-5392 404-230-5268 212-687-8080
For Immediate Release
June 28, 2001
SUNTRUST LETTER URGES WACHOVIA SHAREHOLDERS TO VOTE AGAINST
PROPOSED FIRST UNION MERGER
ATLANTA, GA - SunTrust Banks, Inc. (NYSE:STI) today sent the following
letter to the shareholders of Wachovia Corporation (NYSE:WB) arguing that
SunTrust's proposal is superior and urging Wachovia shareholders to vote
against the proposed First Union Corporation (NYSE:FTU) merger.
The text of the letter follows:
June 28, 2001
Dear Wachovia Shareholder:
Your vote on Wachovia's proposed merger with First Union is extremely
important. In fact, it could be critical to the future value of your
investment in Wachovia's shares. The issue, we believe, is clear: Do you
want to risk your investment on First Union's promises or do you want
Wachovia to enter into good faith negotiations with SunTrust for a merger
we believe will be superior to a combination with First Union.
The answer, in our opinion, is equally clear. You can help defeat the
First Union merger by voting "AGAINST" Proposal No. 1 on the enclosed BLUE
proxy card. At the same time, your vote "AGAINST" the First Union merger
will send a clear and unequivocal message to the Wachovia Board and
management that you want Wachovia to come to the table and negotiate in
good faith with SunTrust.
Based on June 27, 2001 closing prices, SunTrust's merger proposal
represents an aggregate premium of approximately $413,000,000 over the
implied value of First Union's proposal. And with SunTrust's merger
proposal you retain your current dividend without having to own a separate
security which, even First Union admits, may not qualify for listing,
trading or quotation on any exchange or dealer quotation system.
But the advantages of a SunTrust/Wachovia combination are not just in
the numbers. SunTrust is a top quality Southeastern financial institution
with a commitment to good management, local markets, quality service and
relationship-based banking. SunTrust's commitments translate into results
for shareholders - strong stock performance, dividend growth, a
high-quality balance sheet and earnings growth. That is why we believe our
merger proposal offers you a superior merger with a superior partner at
superior value.
TWO RECENT FIRST UNION ACQUISITIONS: BAD AND WORSE
With great fanfare, in April 1998, First Union acquired CoreStates
Financial Corp., a Pennsylvania-based bank holding company. When First
Union announced the deal, it projected its 1999 earnings per share at
$4.46. But significant problems followed. First Union lost 19% of
CoreStates' customers and suffered major integration problems. This fumble
and other difficulties caused First Union to revise its earnings estimates
downward twice in 1999, and when the final results were in, earnings per
share were only $3.40 - a dramatic 23.8% below First Union's original
estimate.
First Union's acquisition of The Money Store was even worse. Having
acquired The Money Store in June 1998, First Union announced in June 2000
that it was shutting it down. The Money Store debacle contributed to
restructuring and other charges of $4.9 billion against First Union's
earnings in 2000 - one of the largest charges against earnings in the
history of corporate America.
Not surprisingly, First Union shareholders paid dearly for these
mistakes when First Union cut its per share dividend in half in the first
quarter of 2001. And you should know that this major slash in dividends was
announced less than two months after First Union CEO Ken Thompson, in
referring to First Union's consideration of its dividend rate, was quoted
in the press as stating "we've got plenty of capacity to generate all of
the capital we need in this company. At the end of the day, we didn't need
to cut the dividend." Do you really believe that First Union will deliver
the dividend they have promised you?
SUNTRUST: RESULTS YOU CAN COUNT ON
We believe First Union cannot be relied upon to protect and enhance
your investments. In contrast, SunTrust has a record of proven results.
Consider the following:
o Superior Performance. Through March 31, 2001, SunTrust had one-year,
five-year and ten-year total returns to shareholders (with
reinvestment of dividends) of 15.3%, 98.2% and 493.0%, respectively.
In sharp contrast, First Union's returns (with reinvestment of
dividends) were negative 6.2%, and 31.1% and 376.5%, respectively, for
the same periods.
o Dividend Growth. SunTrust has increased its per share dividend every
year for the past 16 years. From 1996 to 2001 (annualizing our first
quarter 2001 dividend), our dividend increases represent a compounded
annual growth rate of 14%.
In sharp contrast, during the same period, First Union's cash dividend
dropped from $1.10 in 1996 to $0.96 in 2001 (annualizing First Union's
first quarter 2001 dividend) -- a negative 3% compounded annual growth
rate.
o Financial Strength and Credit Quality. As of March 31, 2001, SunTrust
had a tangible common equity ratio, a key measure of capital strength
(the higher the better), of 6.8%, and SunTrust's net charge-off ratio
and non-performing asset ratio, two key measures of credit quality
(the lower the better), were 0.38% and 0.52%, respectively.
In contrast, First Union's tangible common equity ratio is 5%, well
below SunTrust's (the higher the better), and First Union's net
charge-off ratio and non-performing asset ratio were 0.53% and 1.30%,
respectively, markedly higher than SunTrust's (the lower the better).
o Earnings Growth. Based on historical results and consensus analyst
estimates for 2001, SunTrust's core earnings per share - which we
believe is the most important measure of corporate earnings
performance - grew at a compounded annual rate of 12% from 1996-2001
(excluding restructuring and merger-related charges and other
non-recurring items).
In contrast, First Union's core earnings per share have a five-year
compounded annual growth rate of negative 4% (excluding restructuring
and merger-related charges and other non-recurring items).
FIRST UNION: TRAMPLING SHAREHOLDER RIGHTS
First Union, in our view, already has shown a complete disregard for
your rights as a shareholder of Wachovia. Earlier this month, SunTrust,
acting in accordance with Wachovia's bylaws and then-existing North
Carolina law, submitted a proposal to be voted on at Wachovia's upcoming
meeting of shareholders. This proposal, if approved by a majority of
Wachovia shareholders, would have permitted the holders of 10% of Wachovia
shares to call a special meeting of shareholders.
This was a "good governance" proposal and would have conferred on
Wachovia shareholders a right specifically provided for under North
Carolina law.
But First Union did not want you to have this fundamental shareholder
right. First Union, with the assistance of Wachovia's management, initiated
and lobbied for an immediate change in North Carolina law. In only a matter
of days, First Union engineered a new law - found in no other state in the
country - which says that shareholders have absolutely no right to call a
special meeting unless specifically authorized to do so by the
corporation's articles of incorporation. Since North Carolina law already
provided that articles of incorporation can be amended only with prior
approval of the corporation's board of directors, this new law effectively
slammed the door on the ability of Wachovia shareholders to call a meeting
- even if the holders of a majority of Wachovia's stock wanted to do so.
THE LARGEST SHAREHOLDER ON WACHOVIA'S BOARD OPPOSED WACHOVIA'S
REJECTION OF SUNTRUST'S BID
Morris Offit, a Wachovia director and chief executive officer of its
high net worth asset management subsidiary, dissented from the board's
decision to reject the SunTrust merger proposal. According to Wachovia's
own proxy statement, Mr. Offit dissented based on:
"his view that he was more comfortable with the SunTrust business
model, which he viewed as more retail-oriented compared to the First Union
model with its greater emphasis on capital markets activities; and his view
that the cultural fit with SunTrust was better because of its focus on
relationship-based banking while he regarded First Union as more focused on
transactional-based services."
Excluding unexercised stock options and other unvested stock-based
compensation, Mr. Offit owns almost twice as many shares as all other
Wachovia directors combined. With his significant stock ownership in
Wachovia, we believe Mr. Offit is the director whose interests are most
clearly aligned with yours.
THE FUTURE VALUE OF YOUR INVESTMENT HANGS IN THE BALANCE
Your vote against the First Union/Wachovia merger is the crucial first
step to securing the benefits of the SunTrust/Wachovia merger. Send a
strong message to the Wachovia board by voting AGAINST the First Union
merger proposal. Your vote is important no matter how many or how few
shares you may own. Please sign and date the enclosed BLUE proxy card today
and return it in the enclosed postage-prepaid envelope.
Thank you for your support.
Sincerely,
/s/ L. Phillip Humann
L. Phillip Humann
Chairman, President and
Chief Executive Officer
If you have any questions or need assistance in voting your shares, please
contact the firm assisting SunTrust in the solicitation of proxies:
Innisfree M&A Incorporated, toll free, 1-877-750-9501.
SunTrust Banks, Inc., headquartered in Atlanta, Georgia, is the
nation's ninth-largest commercial banking organization. As of March 31
2001, SunTrust had total assets of $103.7 billion and total deposits of
$65.5 billion. 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 deposit, credit, trust and
investment services. Through various subsidiaries the company provides
credit cards, mortgage banking, insurance, brokerage and capital markets
services. SunTrust's Internet address is www.suntrust.com
# # #
This press 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 Corporation, 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 SunTrust's
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 Internet site (http://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 delivered a merger proposal to the Board of
Directors of Wachovia. 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 its proposed merger
with Wachovia. Investors and security holders are urged to read the
registration statement (when available) and any other relevant documents
filed or to be 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
registration statement (when available) and such other documents at the
SEC's Internet web site at www.sec.gov. 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).