<PAGE>
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 (Amendment No. )
Filed by the registrant[X]
Filed by a party other than the registrant[ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials Soliciting material pursuant to Rule
14a-11(c) or Rule 14a-12
SUNTRUST BANKS, INC.
- ---------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Raymond D. Fortin
- --------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(j)(4) 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 0-11:1
(4) Proposed maximum aggregate value of transaction:
[ ] 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:
<PAGE>
SUNTRUST
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of
SunTrust Banks, Inc.
The Annual Meeting of Shareholders of SunTrust Banks, Inc. will be held
in Room 10 of the SunTrust Bank, Atlanta Tower, 25 Park Place, N.E., Atlanta,
Georgia, on Tuesday, April 16, 1996, at 9:30 A.M., local time, for the
following purposes:
1. To elect five directors to serve until the 1999 Annual Meeting of
Shareholders, and one director to serve until the 1988 Annual Meeting
of Shareholders;
2. To ratify the appointment of Arthur Andersen LLP as independent auditors
for 1996; and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
Only shareholders of record at the close of business on February 15,
1996 will be entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof.
Your attention is directed to the Proxy Statement accompanying this
Notice for more complete information regarding the matters to be acted upon
at the Annual Meeting.
By Order of the Board of Directors
Raymond D. Fortin
Secretary
February 23, 1996
IMPORTANT NOTICE
Whether or not you plan to attend the Annual Meeting, please complete,
sign, date and return the enclosed proxy as soon as possible in the postage
paid envelope provided.
<PAGE>
SUNTRUST BANKS, INC.
303 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30308
----------------------------------
PROXY STATEMENT
----------------------------------
The enclosed proxy is solicited on behalf of the Board of Directors of
SunTrust Banks, Inc. (the "Company" or "SunTrust") in connection with the
Annual Meeting of Shareholders of the Company to be held on Tuesday, April
16, 1996 (the "Annual Meeting"). The enclosed proxy is for use at the
Annual Meeting if a shareholder is unable to attend the Annual Meeting in
person or wishes to have his shares voted by proxy even if he attends the
Annual Meeting. The proxy may be revoked by the person giving it at any
time before it is exercised, by notice to the Corporate Secretary of the
Company, by submitting a proxy having a later date, or by such person
appearing at the Annual Meeting and voting in person. All shares
represented by valid proxies received pursuant to this solicitation and not
revoked before they are exercised will be voted in the manner specified
therein. If no specification is made, the proxies will be voted for each
of the proposals described below. This Proxy Statement and the enclosed
proxy are being first mailed to the Company's shareholders on or about
February 23, 1996.
ELECTION OF DIRECTORS
(Item 1)
Under the Bylaws of the Company, the number of directors constituting
the Board of Directors is fixed at 14, with directors divided into three
classes serving staggered three-year terms. There are four directors, James
D. Camp, Jr., Roberto C. Goizueta, L. Phillip Humann and Joseph L. Lanier,
Jr., who have been nominated to stand for reelection as directors at the
Annual Meeting in 1996. The Company's Bylaws provide that a director shall
retire as a director on the date of the annual meeting immediately succeeding
such director's 70th birthday. Mr. Robert W. Scherer (whose term expires in
1998) and Mr. J. Walter Tucker, Jr. (whose term expires in 1996) will retire
as directors in accordance with this provision at the 1996 Annual Meeting.
Accordingly, Mr. A. W. Dahlberg and Mr. Larry L. Prince have been nominated
to stand for election as directors for a term expiring in 1999 and for a term
expiring in 1998, respectively. In addition to the six nominees, there are
eight other directors continuing to serve on the Board of Directors, whose
terms expire in 1997 and 1998. The Board of Directors recommends that
shareholders vote in favor of all of the nominees.
The proxy solicited hereby cannot be voted for the election of a person
to fill a directorship for which no nominee is named in this Proxy Statement.
If, at the time of the Annual Meeting of Shareholders, any of the nominees
named in the enclosed proxy should be unable or decline to serve as a
director, the proxies are authorized to be voted for such substitute nominee
or nominees as the Board of Directors recommends. The Board of Directors has
no reason to believe that any nominee will be unable or decline to serve as a
director.
1
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Nominations for election to the Board of Directors may be made by any
shareholder entitled to vote for the election of directors. In accordance
with the Bylaws, nominations shall specify the class (term) of directors to
which each person is nominated, shall be made in writing and shall be
delivered or mailed to the Company's Chairman of the Board not later than
April 3, 1996. Any such nomination shall contain the following information:
(i) the name and address of the proposed nominee; (ii) the principal
occupation of the proposed nominee; (iii) the total number of shares of
issued and outstanding $1.00 par value per share common stock of the Company
("Company Common Stock") that, to the knowledge of the nominating
shareholder, will be voted for the proposed nominee; (iv) the name and
residence address of each nominating shareholder; (v) the number of shares of
Company Common Stock owned by the nominating shareholder; (vi) the total
number of shares of Company Common Stock that, to the knowledge of the
nominating shareholder, are owned by the proposed nominee; and (vii) the
signed consent of the proposed nominee to serve, if elected.
The following table sets forth for each nominee and each director whose
term continues after the meeting, his age, the number of shares of Company
Common Stock beneficially owned by him on December 31, 1995, a brief
description of his principal occupation and business experience during the
last five years, and certain other directorships held. Unless indicated
otherwise, each current director has served as a director of the Company
since the Company's organization.
Directors Whose Term Expires in 1999
Shares of
Common
Name Business Experience Stock(1)
- ----------------------- ----------------------------------- -------------
James D. Camp, Jr.+ President and shareholder of the 197,019(2)
law firm of Camp & Camp, P.A.,
established in October 1988.
Mr. Camp is 67.
A.W. Dahlberg Chairman of the Board, President and 1,000
Chief Executive Officer of The
Southern Company, an investor-owned
electric utility group. Prior to 1994,
he was President and Chief Executive
Officer of Georgia Power Company. He
serves as a director of The Southern
Company, Equifax, Inc. and Protective
Life Corporation. Mr. Dahlberg is 56.
Roberto C. Goizueta* He is Chairman of the Board of 186,192(3)
Directors and Chief Executive
Officer of The Coca-Cola Company.
He is also a director of Eastman
Kodak Co., Ford Motor Company and
Sonat Inc. Mr. Goizueta is 64.
2
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L. Phillip Humann* President of the Company since April 249,302(4)
1991. From April 1989 through April
1991, he was Senior Executive Vice
President of the Company. From
October 1985 to April 1989, he was
Chairman of the Board and Chief
Executive Officer of SunTrust Bank,
Atlanta. He is a director of
Coca-Cola Enterprises, Inc., Equifax
Inc. and Haverty Furniture Companies,
Inc. Mr. Humann is 50 and has been a
director of the Company since 1991.
Joseph L. Lanier, Jr.+ Chairman of the Board and Chief 6,800
Executive Officer of Dan River, Inc.,
a textile manufacturing company. He
is also a director of Dimon, Inc.,
Flowers Industries, Inc. and Torchmark
Corporation. Mr. Lanier is 64.
Nominees For Term Expiring in 1998:
Shares of
Common
Name Business Experience Stock(1)
- ----------------------- ----------------------------------- -------------
H. G. Pattillo# Chairman of the Board of Directors 40,761(5)
of Pattillo Construction Company,
Inc. He is also a director of John
H. Harland Company and Protective
Life Corporation. Mr. Patillo is 69
and has been a director of the
Company since 1989.
R. Randall Rollins# Chairman of the Board and Chief 30,909(6)
Chief Executive Officer of Rollins,
Inc. (since October 1991), a
consumer services company. He is
also the Chairman of the Board and
Chief Executive Officer of RPC,
Inc., an oil and gas field services
and boat manufacturing company.
Mr. Rollins is 64 and has been a
director of the Company since 1995.
James B. Williams* Chairman of the Board of Directors 1,138,984(7)
(since April 1991) and Chief
Executive Officer (since April 1990)
of the Company. He previously served
as Vice Chairman and President of the
Company, President of SunTrust Banks
of Florida, Inc. and Vice Chairman
and President of SunTrust Banks of
Georgia, Inc.. He is also a director
of The Coca-Cola Company, Genuine
Parts Company, Georgia-Pacific
Corporation, Rollins, Inc., RPC Inc.,
and Sonat Inc. Mr. Williams is 62.
3
<PAGE>
James H. Williams# Owner of Jim H. Williams Real Estate, 10,000
Ocala, Florida, a real estate
brokerage and development firm. He
is also a citrus producer and private
investor. He was Lieutenant Governor
of the State of Florida from January
1975 to January 1979. He also previously
served as Deputy Secretary of the
United States Department of Agriculture
and President of the National Stone
Association, a trade association.
Mr. Williams is 69.
Directors Whose Term Expires in 1998
Shares of
Common
Name Business Experience Stock(1)
- ----------------------- ----------------------------------- -------------
Larry L. Prince Chairman of the Board and Chief 253,000(8)
Executive Officer of Genuine Parts
Company, a service organization
engaged in the distribution of
automotive replacement parts,
industrial replacement parts and
office products. Mr. Prince as also
a director of Crawford & Co.,
Equifax, Inc., John H. Harland Co.
and U.A.P. Inc., Canada. Mr Prince
is 57.
Directors Whose Term Expires in 1997
Shares of
Common
Name Business Experience Stock(1)
- ----------------------- ----------------------------------- -------------
J. Hyatt Brown* Chairman, President and Chief 25,000
Executive Officer of Poe & Brown,
Inc., an insurance agency. He is
also a director of BellSouth
Corporation, FPL Group, Inc.,
International Speedway Corporation
and Rock-Tenn Company.
Mr. Brown is 58.
T. Marshall Hahn, Jr.+ Honorary Chairman of the Board of 122,930(9)
Board of Georgia-Pacific Corporation,
a manufacturer and distributor of
pulp, paper and building products.
He was Chairman of the Board of
Directors and Chief Executive Officer
of Georgia-Pacific Corporation from
February 1985 until his retirement
in 1993. He is also a director of
Coca-Cola Enterprises, Inc. and
Norfolk Southern Corporation.
Mr. Hahn is 69.
4
<PAGE>
David H. Hughes# Chairman of the Board of Directors 24,956(10)
and Chief Executive Officer of Hughes
Supply, Inc., a distributor of
construction materials. He is also a
director of Lithium Technologies, Inc.
Mr. Hughes is 52.
Scott L. Probasco, Jr.* Chairman of the Executive Committee 1,036,693(11)
of SunTrust Bank, Chattanooga
(since 1989), a banking subsidiary
of the Company. He is also a
director of Chattem, Inc., Coca-
Cola Enterprises, Inc., Provident
Life and Accident Insurance Company
of America and Provident Life
Capital Corporation. Mr. Probasco
is 67 and has been a director since
1987.
* Member of Executive Committee of the Board of Directors
# Member of Audit Committee of the Board of Directors
+ Member of Compensation Committee of the Board of Directors
(1) Company Common Stock beneficially owned as of December 31, 1995. As of
such date, no nominee or director was a beneficial owner of more than
1% of the outstanding shares of Company Common Stock. Except as
otherwise indicated, each director possessed sole voting and investment
power with respect to all shares set forth opposite his name.
(2) Includes 13,920 shares as to which Mr. Camp shares voting and
investment power. Mr. Camp disclaims beneficial ownership of 24,923
shares.
(3) Includes 184,392 shares held by a foundation of which Mr. Goizueta is
one of five Trustees; Mr. Goizueta disclaims beneficial ownership of
such shares.
(4) Includes 11,468 shares held for the benefit of Mr. Humann under the
Company's 401(k) Plan and 26,650 shares that are the subject of
exercisable employee stock options.
(5) Includes 18,617 shares held by a foundation of which Mr. Pattillo is
one of 6 directors and 600 shares owned by a foundation of which he is
one of two Trustees; Mr. Pattillo disclaims beneficial ownership of
all such shares and 10,000 shares owned by his spouse.
(6) Mr. Rollins shares voting and investment power with respect to 10,084
shares.
(7) Includes 96,737 shares held for the benefit of Mr. Williams under the
Company's 401(k) Plan and 60,000 shares that are the subject of
exercisable employee stock options. Also, includes 555,173 shares held
by three foundations of which Mr. Williams is one of five Trustees;
Mr. Williams disclaims beneficial ownership of all such shares. Mr.
Williams shares investment power with respect to 36,164 shares.
(8) Includes 252,000 shares held by two foundations of which Mr. Prince is
a Trustee; Mr. Prince disclaims beneficial ownership of such shares.
5
<PAGE>
(9) Includes 112,930 shares owned by a university of which Mr. Hahn is a
Trustee and the Chairman of its Investment Committee; Mr. Hahn
disclaims beneficial ownership of such shares.
(10)Includes 836 shares held in a trust as to which Mr. Hughes has sole
voting and investment power; Mr. Hughes disclaims beneficial ownership
of such shares.
(11)Mr. Probasco has sole investment power with respect to 362,900 of such
shares and he shares investment power with respect to 623,793 of such
shares. Mr. Probasco disclaims beneficial ownership of 311,897 of the
shares listed.
Principal Shareholder and Management Stock Ownership
The following sets forth certain information concerning persons known
to the Company who may be considered a beneficial owner of more than 5% of
the outstanding shares of Company Common Stock as of December 31, 1995.
Shares
Beneficially Percent
Name and Address Owned of Class
SunTrust Bank, Atlanta 13,413,529(1)(2) 11.8 %
One Park Place, N.E.
Atlanta, Georgia 30303
(1) The shares shown were held by SunTrust Bank, Atlanta, a subsidiary of the
Company, in various fiduciary or agency capacities. SunTrust Bank,
Atlanta has sole voting power with respect to 5,700,433 of such shares
and it shares voting power with respect to 523,386 of such shares, not
including shares referred to in note 2 below. SunTrust Bank, Atlanta
has sole investment power with respect to 4,260,970 of the total shares
set forth above and it shares investment power with respect to
2,359,890 of such shares, not including the shares referred to in Note
2 below. Other bank subsidiaries of the Company may be considered the
beneficial owners of an additional 6,031,438 or 5.3% of the outstanding
shares of Company Common Stock at December 31, 1995, held in various
fiduciary or agency capacities. These other bank subsidiaries of the
Company have sole voting power with respect to 4,940,726 of such shares
and they share voting power with respect to 421,136 of such shares;
they have sole investment power with respect to 2,242,277 of such shares
and they share investment power with respect to 3,081,654 of such shares.
The Company, SunTrust Bank, Atlanta and each other subsidiary disclaim
any beneficial interest in any of such shares.
(2) Includes 6,758,141 shares held by SunTrust Bank, Atlanta as Trustee under
the Company's 401(k) Plan. Shares of Company Common Stock allocated to
a participant's account are voted by the Trustee in accordance with
instructions from such participant. The Trustee votes any unallocated
shares of Company Common Stock and any shares for which it has not
received timely instructions in accordance with its determination of
the best interests of the participant.
6
<PAGE>
The following table sets forth the number of shares of Company Common
Stock beneficially owned on December 31, 1995 by certain executive officers
of the Company and by all directors and executive officers of the Company
as a group (19 persons) and the percentage of the Company's outstanding
shares owned by such group.
Shares Percent
Beneficially of
Beneficial Owner Owned(1) Class(2)
- ----------------------- ------------- ---------
John W. Clay 60,392
Edward P. Gould 172,865
John W. Spiegel 161,316
All Directors and 3,655,232 3.22%
Executive Officers as a
Group
(1) Includes the following shares subject to exercisable stock options:
Mr. Clay, 10,050 shares; Mr. Gould, 25,000 shares; Mr. Spiegel,
48,630 shares; all other executive officers, 144,500 shares.
(2) Outstanding shares represent the 113,409,139 shares of Company Common
Stock outstanding on December 31, 1995, increased by the 195,300
shares subject to employee stock options referred to in Note 1. No
executive officer owns 1% or more of the outstanding shares of Company
Common Stock.
Board Committees, Attendance and Compensation
The Company's Board of Directors has three standing committees -- the
Executive Committee, the Audit Committee and the Compensation Committee. The
Executive Committee serves as the Nominating Committee. Regular meetings of
the Board are held quarterly.
The Executive Committee has and may exercise all the lawful authority of
the full Board of Directors, except that the committee may not (1) approve,
or propose to the shareholders, any action that lawfully must be approved by
the shareholders, (2) fill vacancies on the Board of Directors or any of its
committees, (3) amend the Articles of Incorporation, or adopt, amend, or
repeal the Bylaws of the Company, or (4) approve a dissolution or merger of
the Company or the sale of all or substantially all of the assets of the
Company. The Executive Committee serves as the Nominating Committee and may
make recommendations to the Board with respect to the size and composition of
the Board, reviews the qualifications of potential candidates and recommends
nominees to the Board. The Executive Committee held 4 meetings during 1995.
The Compensation Committee is responsible for approving the compensation
arrangements for senior management. It is also responsible for
administration of certain employee benefit plans, including the Stock
Incentive Plans, the Management Incentive Plan, the Performance Unit Plan,
the 401(k) Plan, the 401(k) Excess Plan, the Performance Bonus Plan, the
Retirement Plan and the Supplemental Executive Plan. The Compensation
Committee held 5 meetings during 1995.
7
<PAGE>
The Audit Committee has the responsibility of recommending the
independent auditors; reviewing and approving the annual plans of the
independent auditors; approving the annual financial statements; and
reviewing and approving the annual plan for the internal audit department, as
well as a summary report of such department's findings and recommendations.
The Audit Committee held 4 meetings during 1995.
During 1995, the Board of Directors held 6 meetings. All the Company's
directors attended at least 75% of the Board meetings and meetings of
committees on which they served. Each director who is not also an employee
of the Company or its subsidiaries received an annual retainer of $35,000 in
1995 and was paid a fee of $1,500 for each Board or committee meeting
attended. Directors will be paid an annual retainer of $40,000 in 1996 and
will be paid a fee of $1,500 for each Board or committee meeting attended.
Directors serving as directors of various of the Company's subsidiaries only
receive meeting attendance fees for service on those Boards. Directors may
defer fees payable to them under the Company's Directors Deferred
Compensation Plan. The return on such deferred amount is determined, at the
election of the director, as if such funds had been invested in Company
Common Stock or at a floating interest rate equal to the prime interest rate
in effect at SunTrust Bank, Atlanta computed on a quarterly basis.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Officers
Executive officers are elected annually by the Board following the
Annual Meeting of Shareholders to serve for a one-year term and until their
successors are elected and qualified. The Company's Bylaws provide that any
material change in the title, salary, benefits or other terms of employment
of any officer of the Company who holds the title of Chairman of the Board,
President or Chief Executive Officer requires the affirmative vote of at
least two-thirds of the full Board of Directors. The following table sets
forth the name of each executive officer of the Company and the principal
positions and offices he holds with the Company. Unless otherwise indicated,
each of these officers has served as an executive officer of the Company or
a principal subsidiary for at least five years.
Name Information about Executive Officers
- ------------------- -----------------------------------------------------
James B. Williams Chairman of the Board and Chief Executive Officer of
the Company.
L. Phillip Humann President of the Company.
John W. Spiegel An Executive Vice President and Chief Financial
Officer of the Company. Mr. Spiegel is 54.
E. Jenner Wood III An Executive Vice President of the Company since
November 1993 with responsibility for trust and
investment services. Prior to that time, he was an
executive officer of SunTrust Bank, Atlanta a
subsidiary bank of the Company. Mr. Wood is 44.
John W. Clay, Jr. Chairman of the Board of SunTrust Banks of Tennessee,
Inc., the Company's Tennessee banking affiliate. Prior
to assuming that position, he was Chairman and Chief
Executive Officer of SunTrust Bank, Nashville. Mr. Clay
is 54.
8
<PAGE>
Edward P. Gould Prior to his retirement in February 1996, Mr. Gould was
Chairman of the Board of SunTrust Banks of Georgia, Inc.
the Company's Georgia banking affiliate. He was also
Chairman of the Board of SunTrust Bank, Atlanta.
Mr. Gould is 65.
Theodore J. Hoepner Since September 1995, he has been Chairman, President
and Chief Executive Officer of SunTrust Banks of
Florida, Inc. From January 1990 until August 1995, he
was Chairman, President and Chief Executive Officer of
SunTrust Bank, Central Florida. Mr. Hoepner is 54.
Robert R. Long Since July 1995, he has been the Chief Executive Officer
of SunTrust Banks of Georgia, Inc. and SunTrust Bank,
Atlanta. He has also been the President of SunTrust Bank,
Atlanta since 1985 and the President of SunTrust Banks
of Georgia, Inc. since October 1992. Mr. Long is 58.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Introduction
Decisions on compensation of the Company's executives are made by the
four-member Compensation Committee of the Board (the "Committee"). Each
member of the Committee is a non-employee director. The Committee believes
that the actions of each executive officer have the potential to impact the
short-term and long-term profitability of the Company. Consequently, the
Committee places considerable importance on its task of designing and
administering an executive compensation program.
Objectives of Executive Compensation
The objectives of the Company's executive compensation program are to:
(1) increase shareholder value, (2) increase the overall performance of the
Company, (3) increase the success of the banking unit directly impacted by
the executive's performance, and (4) increase the performance of the
individual executive.
Compensation Policy
The general policy underlying the Company's executive compensation
program is designed to:
* Aid the Company in attracting, retaining and motivating high-
performing executives.
* Provide competitive levels of compensation consistent with
achieving the Company's annual and long-term performance goals.
* Reward superior corporate performance.
Executive compensation is reviewed relative to that of the Company's
peer group. However, the Company's emphasis is on programs that provide
incentive compensation rewards based on the Company's performance. The peer
group is comprised of the following bank holding companies: Banc One
Corporation, Bank of Boston, Barnett Banks, Inc., CoreStates Financial Corp,
First Chicago NBD Corporation, First Interstate Bancorp, First Union
Corporation, Fleet Financial Group, KeyCorp, Mellon Bank Corporation,
9
<PAGE>
National City Corporation, Norwest Corporation, PNC Bank Corp., US Bancorp,
Wachovia Corporation and Wells Fargo & Company (the "Peer Group"). Base
salary will remain conservative compared to the Peer Group with variable
compensation opportunity being a significant part of the total compensation
package. Peer Group comparative information is relevant, but the Company's
position on total compensation is driven more by the Company's performance,
individual performance and a sense of fairness. Thus, depending on the
Company's performance in any particular year, an executive officer may
receive compensation above or below the level of an officer in a competing
company.
Components of Executive Compensation
The three primary components of executive compensation are:
Base Salary
Cash Incentive Plans
Stock Incentive Plans
Base Salary
Base salary is designed to provide acceptable levels of compensation to
executives while helping the Company manage fixed labor expense. Therefore,
the Committee believes that executive officer base salary should be on the
conservative side of a market-competitive range. Salaries for top executives
are reviewed annually and are based on:
Job scope and responsibilities
Corporate, unit, and individual performance (performance
measures may include net income, earnings per share, return
on assets, return on equity, growth, achievement of specific
goals, etc.)
Competitive rates for similar positions
Length of service
Subjective factors
Cash Incentive Plans
The Company maintains two incentive plans in this category:
The Management Incentive Plan, which focuses on annual
performance goal attainment.
The Performance Unit Plan, which focuses on performance over a
three-year period.
These variable compensation plans are designed so that: (1) the
executive receives a bonus only if the Company or applicable subsidiary
performance targets are met, and (2) a significant part of the executive's
compensation is at risk.
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<PAGE>
Management Incentive Plan
Awards under the Management Incentive Plan ("MIP") are based on
consolidated net earnings for Company participants, and on attainment
of subsidiary net income goals for subsidiary participants. These
goals are set for a one-year period, and are aimed at increasing short-
term performance. Minimum targets are set and the level of attainment
of such goals results in varying payouts. Maximum targets reflect
ambitious earnings goals which are only attainable in an outstanding
year, and thus, result in larger payouts.
Participation in MIP is limited to a group of senior managers who have
a material impact on Company performance. The participants are
selected by the Committee and include the executive officers named in
this Proxy Statement and approximately 300 other senior managers.
Awards earned under MIP are contingent upon employment with the
Company through the end of the year, except for payments made in the
event of death, retirement, disability, or in the event of a change in
control. Management Incentive Plan payments are presented in the
Summary Compensation Table under the heading "Bonus."
Performance Unit Plan
The Performance Unit Plan ("PUP") is aimed at motivating executives to
attain specific goals set by the Committee over a three-year period.
Approximately 150 participants are selected by the Committee to
receive units (with a stated value of $30 per unit) based upon
management level, scope of position, range of incentive compensation,
individual performance and subjective factors. Two performance
measurements are set for each three-year cycle which correspond to a
minimum, target, and maximum payout value. These performance
measurements are: (1) a three-year cumulative consolidated net income
goal, and (2) a three-year cumulative earnings per share goal. At the
end of each cycle, the payout value is determined by actual net income
and earnings per share for the three-year period. The measurement which
yields the highest award is the one that is used. This method was
employed due to the Company's active share repurchase program and the
desire not to penalize executives for this strategy. Straight line
interpolation is used to calculate payout values between minimum,
target, and maximum levels. These payouts are set forth in the
Summary Compensation Table under the heading "LTIP Payouts."
Stock Incentive Plans
One of the Committee's priorities is for executives to be significant
shareholders so that the interests of executives are aligned with the
interests of shareholders. The Company's executive officers have a
significant equity stake in the Company, as reflected in the beneficial
ownership information contained in this Proxy Statement.
1995 Stock Plan
The 1995 Executive Stock Plan (the "1995 Stock Plan") was adopted by
the Board in November 1994, and was approved by the shareholders at the
1995 Annual Meeting. The 1995 Stock Plan provides for grants of options
to purchase Company Common Stock, restricted shares of Company Common
Stock (which may be subject to both grant and forfeiture conditions),
and grants of stock appreciation rights ("SARs"). There are 5,000,000
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<PAGE>
shares of Company Common Stock reserved for use under the 1995 Stock
Plan, of which 2,500,000 may, but need not be, granted as restricted
stock. The 1995 Stock Plan is administered by the Committee, which has
the sole authority to grant options, SARs and restricted stock. The
Committee will use the 1995 Stock Plan to make stock-based incentives
important factors in attracting, retaining, and rewarding employees and
to closely align employee interests with those of the Company's
shareholders. During 1995, stock options were granted under the 1995
Stock Plan as set forth in the Option Grants During Year Ended December
31, 1995 table set forth on page 16 hereof.
1986 Stock Plan
The Executive Stock Plan adopted in 1986 (the "1986 Stock Plan") was
designed to focus executives and other eligible participants on long-
term performance of the Company. No further grants will be made under the
1986 Stock Plan. Performance-based restricted stock ("Performance Stock")
was one of the primary stock-based incentive vehicles made available to
executives through the 1986 Stock Plan. Vesting of Performance Stock is
contingent upon two conditions: (1) stock price increases over a period
of five years, and (2) the participant must remain with the Company for
15 years after the first condition is met or until age 64 (or until a
change of control of the Company occurs). Awards of Performance Stock
occur as the stock price increases in increments of 20 percent over the
grant date value. For each 20 percent increase in stock price, 20 percent
of the shares granted are "awarded" to the participant. Performance Stock
that is awarded is held in escrow by the Company. The participant must
remain with the Company until the second condition is met before
receiving the stock. If the second condition is not met, the executive
forfeits the awarded shares. Performance Stock was granted to executives
in 1990 and 1992. The first grant of Performance Stock has been awarded
because the stock price doubled from the date of grant. Eighty percent
of the shares granted in 1992 have been awarded because the stock price
increased 80 percent. Executives receive dividends and voting rights on
all shares awarded to them. There were no grants of Performance Stock
during 1995.
401(k) Matching Contributions
The Company will match eligible employee contributions to the
Company's 401(k) Plan, if the employee has completed one year of
service with the Company and the Company has met a minimum target net
income goal for the year, as established by the Committee. The
matching contributions made by the Company consist of a guaranteed
component and a performance component. The guaranteed match is
determined by a schedule which yields matching ratios based on a
comparison of net income results to the established target. If the
minimum consolidated net income target is not achieved, no performance
match will be made for the year.
401(k) Excess Plan
The Company also maintains an unfunded 401(k) Excess Plan to provide
benefits otherwise payable to certain participants under the 401(k)
Plan which exceed the tax qualified benefits under the 401(k) Plan as
a result of certain federal tax restrictions. Under the 401(k) Excess
Plan, the Company credits to an account for each participant an amount
12
<PAGE>
equal to the contribution to the 401(k) Plan that otherwise would have
been made but for federal income tax restrictions on maximum
contributions. Amounts credited to a participant's account generally
have the same investment experience as would an investment by the
participant in Company Common Stock. Contributions on behalf of the
Company are made in cash. The Company contributed or expensed with
respect to the 401(k) Plan and the 401(k) Excess Plan the amounts
shown in the Summary Compensation Table under the heading "All Other
Compensation."
Changes to federal tax law enacted in 1993 impact the deductibility of
awards paid under MIP, PUP and the 1995 Stock Plan. Section 162(m) of the
Internal Revenue Code, as amended ("Section 162(m)"), provides that
compensation in excess of $1 million paid for any year to a corporation's
chief executive officer and the four other highest paid executive officers at
the end of such year ("Covered Employees") will not be deductible for federal
income tax purposes unless certain conditions are met. One such condition is
that the compensation qualify as "performance-based compensation". In
addition to other requirements for qualification as performance-based
compensation, shareholders must be advised of and must approve the material
terms of the performance goals under which compensation is to be paid. The
income tax regulations provide that such material terms consist of (i) the
individuals eligible to receive compensation, (ii) a general description of
the business criteria on which the performance goals are based, and (iii)
either the maximum amount of the compensation to be paid or the formula used
to calculate the amount of compensation if the performance goals are met.
The Company intends that awards to Covered Employees under the MIP, PUP
and the 1995 Stock Plan qualify as performance-based compensation within the
meaning of Section 162(m). On November 8, 1994 the Board of Directors of the
Company approved the 1995 Stock Plan and certain amendments to MIP and PUP
which were designed to ensure that, to the extent possible, awards payable
under the 1995 Stock Plan, MIP and PUP would be fully deductible by the
Company for purposes of Section 162(m). At the 1995 Annual Meeting, the
Company's shareholders approved the material terms of the performance goals
under which compensation is paid under the 1995 Stock Plan, MIP and PUP.
Chief Executive Officer Compensation
The executive compensation policy described above is applied in setting
Mr. Williams' compensation. Mr. Williams participates in the same
executive compensation plans available to other executive officers. The
1994 cash compensation of Mr. Williams was $1,722,329. Over half (59%) of
this amount was earned in performance-driven incentives. Mr. Williams had
a base salary of $700,000, and earned a Management Incentive Plan award of
43% of his base salary, or $302,329.
In keeping with the Committee's desire for the Chief Executive Officer
to maintain a long-term focus for the Company, much of Mr. Williams'
variable compensation is provided through PUP. The number of PUP units
granted to Mr. Williams for the 1993-95 PUP cycle was determined in an
effort to provide a variable compensation opportunity such that if the
aggressive performance target was achieved, Mr. Williams' total compensation
would be competitive with chief executives of the companies in the Peer
Group. Mr. Williams earned a PUP award of $720,000 for the 1993-95 PUP cycle.
This represented a payout at the maximum $60 per unit value and is the
result of the Company achieving the aggressive cumulative earnings per share
13
<PAGE>
target that was set by the Committee prior to the start of the 1993-95 cycle.
Also, in an effort to maintain a long-term focus and to align his interests
with the Company's shareholders, the Compensation Committee granted to Mr.
Williams, on August 8, 1995, an option to purchase 100,000 shares of Company
Common Stock at the then current market price of $60.50. This action was
consistent with stock option grants made to the chief executive officers of
certain Peer Group companies.
Summary
The Committee believes that this mix of conservative market-based
salaries, significant variable cash incentives for both long-term and short-
term performance and the potential for equity ownership in the Company
represents a balance that will motivate the management team to continue to
produce strong returns. The Committee further believes this program strikes
an appropriate balance between the interests and needs of the Company in
operating its business and appropriate rewards based on shareholder value.
Submitted by the Compensation Committee of the Company's Board of
Directors.
James D. Camp, Jr.
T. Marshall Hahn, Jr., Chairman
Joseph L. Lanier, Jr.
Robert W. Scherer
SHAREHOLDER RETURN
Set forth below is a line graph comparing the yearly percentage change
in the cumulative total shareholder return on the Company Common Stock
against the cumulative total return of the S&P Composite-500 Stock Index and
the S&P Major Regional Bank Composite Index for the period of five years
commencing December 31, 1990 and ended December 31, 1995.
(PERFORMANCE GRAPH APPEARS HERE--SEE TABLE BELOW FOR PLOT POINTS)
December 31,
1990 1991 1992 1993 1994 1995
STI $100 180.78 203.59 214.97 234.43 344.66
S&P 500 100 130.47 140.41 154.56 156.60 215.45
S&P Banks 100 178.89 227.81 241.52 228.59 359.93
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ending December 31,
1993, 1994 and 1995, the cash compensation paid by the Company and its
subsidiaries, as well as certain other compensation paid, accrued or granted
for those years to each of the six most highly compensated executive
officers of the Company.
14
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------------- ---------------------------
Other Securities
Annual Under- All Other
Compen- lying LTIP Compensat
Name and Principal Position Year Salary Bonus sation Options Payouts ion <F2>
- --------------------------- ------- --------- --------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
James B. Williams 1995 $700,000 $302,329 $25,548 100,000 $720,000 $23,015
Chairman of the Board and 1994 650,000 317,790 9,112 - 720,000 23,069
Chief Executive Officer 1993 550,000 189,461 16,950 - 720,000 22,613
L. Phillip Humann 1995 425,000 183,557 10,571 16,500 600,000 13,959
President 1994 390,000 190,674 6,863 - 600,000 13,841
1993 330,000 113,676 10,071 - 360,000 13,615
John W. Spiegel 1995 325,000 140,367 7,916 16,500 360,000 10,665
Executive Vice President 1994 295,000 144,228 4,665 - 300,000 10,471
and Chief Financial 1993 250,000 86,119 7,608 - 180,000 10,343
Officer
Edward P. Gould 1995 306,000 72,807 6,771 - 276,000 7,032
Chairman of the Board of 1994 294,000 81,126 5,591 - 276,000 9,772
Trust Company of Georgia 1993 280,000 47,293 6,120 - 276,000 9,470
John W. Clay 1995 275,000 65,431 5,995 - 240,000 9,062
Chairman of the Board of 1994 262,000 72,296 4,641 - 240,000 9,395
SunTrust Banks of 1993 220,000 75,784 4,962 - 156,000 5,850
Tennessee, Inc.
Wendell H. Colson 1995 199,640 47,501 711 - 245,333 7,037
Chairman of the Board of 1994 275,000 75,883 - - 276,000 9,819
SunTrust Banks of 1993 250,000 46,006 1,000 - 192,000 10,153
Tennessee, Inc.
15
<PAGE>
<F1>Performance-based restricted stock ("Performance Stock") is held by the
executive officers listed above, except Mr. Colson, under the Company's
1986 Stock Plan. Three events must occur with respect to such Performance
Stock before the executive takes full title to the Performance Stock.
Shares are granted, awarded, and finally vest. After Performance Stock is
granted by the Compensation Committee, 20% increments are awarded if and
when there are comparable 20% increases in the average price of the
Company's Common Stock from the initial price at the time of grant.
Awarded shares vest on the earliest of the following dates: (i) 15 years
after the date shares are awarded to participants; (ii) at attaining age
64; (iii) in the event of the death or disability of a participant; or
(iv) in the event of a change in control of the Company as defined in the
1986 Stock Plan. The individuals set forth in the table above held (were
granted), subject to the terms and conditions of the 1986 Stock Plan, the
number of shares of restricted stock, including Performance Stock, with a
value as of December 31, 1995, as follows: Messrs. Williams 340,000
shares, $23,290,000; Humann 140,000 shares, $9,590,000; Spiegel 85,000
shares, $5,822,500; Gould 4,000 shares, $274,000; and Clay 33,000 shares,
$2,260,500. As described above, not all such shares have been awarded,
and, except for Mr. Gould, no shares held by the individuals named in this
footnote have vested. The price of the Company's Common Stock would have
to reach $76 for a certain period of time before all the shares listed in
this footnote would be awarded. Dividends were paid in 1995 on shares of
awarded Performance Stock as follows: Messrs. Williams $422,400; Humann
$174,880; Spiegel $105,600 and Clay $38,336.
<F2>Amounts contributed by the Company to the 401(k) Plan and the 401(k)
Excess Plan. Also includes premiums paid on term life insurance.
<F3>Mr. Colson retired on August 31, 1995.
</TABLE>
Option Grants, Exercises and Holdings
The following table contains information concerning the grant of stock
options under the Company's 1995 Stock Plan to the named executive officers
as of the end of the last fiscal year. The Company did not award any stock
appreciation rights during the last fiscal year.
16
<PAGE>
<TABLE>
OPTION GRANTS DURING YEAR ENDED DECEMBER 31, 1995
<CAPTION>
% of
Total Potential Realizable Value
Number of Options at Assumed Annual Rates
Securities Granted to of Stock Price Appreciation
Underlying Employees Exercise for Option Term<F1>
Options in Fiscal Price per Expiration ---------------------------
Name Granted Year Share<F4> Date 5% 10%
- -------------------- ---------- ---------- --------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
James B. Williams<F2> 100,000 17.131 $60.50 08/08/05 $3,804,812 $9,642,142
L. Phillip Humann<F3> 16,500 2.827 60.50 08/07/05 627,794 1,590,953
John W. Spiegel<F3> 16,500 2.827 60.50 08/07/05 627,794 1,590,953
John W. Clay<F3> 16,500 2.827 60.50 08/07/05 627,794 1,590,953
<F1>The dollar gains under these columns result from calculations assuming
5% and 10% growth rates over a 10 year period as set by the Securities
and Exchange Commission and are not intended to forecast future price
appreciation of the Company's Common Stock. The gains reflect a future
value based upon growth at these prescribed rates. These values have also
not been discounted to present value. It is important to note that options
have value to the listed executives and to all option recipients only if
the stock price advances beyond the exercise price shown on the table
during the effective option period.
<F2>Option becomes exercisable in March 1998.
<F3>Options become exercisable over a ten year period in 10% annual
increments.
<F4>Under the 1995 Stock Plan, the exercise price must not be less than 100%
of the fair market value of the Company's Common Stock on the date the
option is granted. Options may be exercised using cash, Company Common
Stock or a combination of both.
The following table sets forth information with respect to the named
executives concerning the exercise of options during 1995 and unexercised
options held as of December 31, 1995.
</TABLE>
<TABLE>
AGGREGATE OPTION EXERCISES IN 1995 AND DECEMBER 31, 1995 OPTION VALUES
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-
Options at the-Money Options at
Shares December 31, 1995 December 31, 1995
Acquired ----------------------- -----------------------
on Value Exerci- Unexer- Exerci- Unexer-
Name Exercise Realized sable cisable sable cisable
---------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
James B. Williams - - 60,000 100,000 $2,730,000 $800,000
L. Phillip Humann - - 26,650 14,850 1,150,700 118,800
John W. Spiegel 34,530 $1,195,058 15,750 14,850 686,313 118,800
Edward P. Gould 8,600 289,175 25,000 20,000 1,137,500 922,500
John W. Clay 3,000 97,875 10,050 14,850 402,888 118,800
Wendell H. Colson 29,400 1,274,300 20,000 - 922,500 -
17
<PAGE>
Long-Term Incentive Plan
The following table provides information concerning the Company's
Performance Unit Plan ("PUP"). The PUP provides for the award of performance
units ("Units"), each with a stated grant value, to key employees of the
Company and its subsidiaries by the Compensation Committee. The grant value
and number of Units awarded to a participant for each performance measurement
cycle is determined by the Compensation Committee as of the grant date. The
final value of the Units granted under each award may range from zero to 200%
of the grant value and will be determined by the Compensation Committee at
the end of each performance measurement cycle based on the achievement of
either consolidated net earnings goals or earnings per share goals
established by the Compensation Committee for that cycle. Payment of an award
earned under the PUP is contingent upon continuous employment with the
Company until the end of the award cycle, except for payments made in the
event of retirement, death, disability, or in the event of a change in
control.
</TABLE>
<TABLE>
LONG-TERM INCENTIVE PLAN - AWARDS IN 1995
<CAPTION>
Estimated Future Payouts under
Non-Stock Price-Based Plans
------------------------------------
Performance
Period Until
Number of Maturation
Name Units or Payout Threshold Target Maximum
- ----------------- --------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
James B. Williams 12,000 3 years $180,000 $360,000 $720,000
L. Phillip Humann 10,000 3 years 150,000 300,000 600,000
John W. Spiegel 6,000 3 years 90,000 180,000 360,000
John W. Clay, Jr. 4,600 3 years 69,000 138,000 276,000
Pension Plans
The following table shows estimated combined retirement benefits payable
to a covered participant at normal retirement age under the Company's
Retirement and Supplemental Executive Plans as described below.
PENSION PLAN TABLE
Years of Service
Remuneration 15 20 25 30 or More
- ------------ ----------- ----------- ----------- -----------
400,000 240,000 240,000 240,000 240,000
500,000 300,000 300,000 300,000 300,000
600,000 360,000 360,000 360,000 360,000
700,000 420,000 420,000 420,000 420,000
800,000 480,000 480,000 480,000 480,000
900,000 540,000 540,000 540,000 540,000
1,000,000 600,000 600,000 600,000 600,000
1,100,000 660,000 660,000 660,000 660,000
1,200,000 720,000 720,000 720,000 720,000
1,300,000 780,000 780,000 780,000 780,000
1,400,000 840,000 840,000 840,000 840,000
1,500,000 900,000 900,000 900,000 900,000
1,600,000 960,000 960,000 960,000 960,000
1,800,000 1,080,000 1,080,000 1,080,000 1,080,000
2,000,000 1,200,000 1,200,000 1,200,000 1,200,000
2,200,000 1,320,000 1,320,000 1,320,000 1,320,000
18
<PAGE>
The Company's Retirement Plan is a noncontributory retirement plan for
the benefit of eligible employees of the Company and its subsidiaries. The
Company has also established a nonqualified Supplemental Executive Plan (the
"Supplemental Plan") to pay benefits to certain Retirement Plan participants
that exceed the benefits payable to such Plan participants under the
Retirement Plan as a result of federal tax restrictions. The Supplemental
Plan provides such benefits to certain key employees of the Company and its
subsidiaries as designated by the Compensation Committee. The maximum annual
benefits payable under the Supplemental Plan will equal 60% of the average
annual income (defined as base salary, and payments made under the Management
Incentive Plan and the Performance Unit Plan, which are shown in the Summary
Compensation Table) earned during the 60 consecutive months of employment
preceding retirement, reduced by annual benefits payable at retirement under
the Retirement Plan, Social Security benefits at age 65, and certain other
nonqualified, unfunded retirement arrangements maintained by the Company.
Upon retirement, the Supplemental Plan benefit will be paid in the form of a
life annuity if the participant is unmarried or in the form of an actuarial
equivalent 100% joint and survivor annuity if the participant is married.
The Compensation Committee may approve the payment of benefits in the form of
a lump sum. Retirement benefits under the Supplemental Plan vest when a
participant has completed ten years of service with the Company and is 60
years old.
The compensation earned in 1995 for the individuals named in the Summary
Compensation Table included for the computation of benefits payable under the
Supplemental Plan and credited years of service is as follows: Messrs.
Williams, $1,722,329, 40 years of service; Humann, $1,208,557, 26 years of
service; Spiegel, $825,367, 30 years of service; Gould, $654,807, 40 years of
service; Clay, $580,431, 29 years of service; and Colson, $492,474, 32 years
of service.
The Supplemental Plan provides that in the event of a change in control
of the Company (as defined in the Supplemental Plan), all benefits accrued
for participants who are involuntarily terminated or who terminate for good
reason within three years after a change in control shall immediately vest.
Under such circumstances, benefits would be calculated using the highest
compensation for any twelve consecutive month period during the 60
consecutive month period which ends immediately before the termination of
employment. Further, the participant's credited service may be increased
under certain circumstances up to three years. Termination for good reason
means a termination made primarily because of a failure to elect or reelect a
participant to a position he held with the Company prior to the change in
control or a substantial change or reduction in responsibilities or
compensation. The Supplemental Plan further provides that in the event of a
termination as described above, participants in the Supplemental Plan will
continue to receive health, life and disability benefit coverage for up to
two years after such termination.
Compensation Committee Interlocks and Insider Participation
Messrs. Camp, Hahn, Lanier and Scherer served as members of the
Compensation Committee during 1995. During 1995, the Company's bank
subsidiaries engaged in customary banking transactions and had outstanding
loans to certain of the Company's directors, executive officers, their
associates and members of the immediate families of such directors and
executive officers. These loans were made in the ordinary course of business
and were made on substantially the same terms, including interest rates and
19
<PAGE>
collateral, as those prevailing at the time for comparable transactions with
others. In the opinion of management, these loans do not involve more than
the normal risk of collectibility or present other unfavorable features.
Camp & Camp, P.A., of which Mr. Camp is a shareholder, provided legal
services to a subsidiary of the Company in 1995, and it is anticipated that
Camp & Camp, P.A. will provide legal services to the Company or its
subsidiaries in 1996. Mr. James B. Williams is a member of the Compensation
Committee of the Board of Directors of Rollins, Inc. and RPC, Inc., of which
Mr. R. Randall Rollins is Chairman and Chief Executive Officer. Mr. Theodore
J. Hoepner is a member of the Compensation Committee of the Board of
Directors of Poe & Brown, Inc., of which Mr. J. Hyatt Brown is Chairman,
President and Chief Executive Officer.
RATIFICATION OF APPOINTMENT OF AUDITORS
(Item 2)
Subject to ratification by a majority of the shares represented at the
Annual Meeting, Arthur Andersen LLP has been appointed by the Board of
Directors as auditors of the Company for 1996. Arthur Andersen LLP also
audited the Company's financial statements for 1995. Representatives of
Arthur Andersen LLP will be present at the Annual Meeting and will be given
the opportunity to make a statement, if they desire, and to respond to
questions.
The appointment of auditors is approved annually by the Board of
Directors and subsequently submitted to the shareholders for ratification.
The decision of the Board of Directors is based on the recommendation of the
Audit Committee, which reviewed both the proposed audit scope and estimated
audit fees for the coming year.
SHAREHOLDER PROPOSALS
Shareholders who intend to submit proposals to the Company's share
holders at the 1997 Annual Meeting must submit such proposals so that they
are received by the Company no later than October 27, 1996 in order to be
considered for inclusion in the Company's 1997 proxy materials. Shareholder
proposals should be submitted to SunTrust Banks, Inc., Post Office Box 4418,
Atlanta, Georgia 30302, Attention: Corporate Secretary.
VOTING AT THE MEETING
Each shareholder of record at the close of business on February 15, 1996
is entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof. Each share of Company Common Stock entitles the holder to one vote
on any matter coming before a meeting of shareholders of the Company. On
February 15, 1996, the record date for the Annual Meeting, there were
113,597,111 shares of Company Common Stock outstanding.
A majority of the shares entitled to vote constitutes a quorum at a
meeting of the shareholders. The presence of a quorum, either in person or
by proxy, and the affirmative vote of the holders of a majority of the shares
represented and entitled to vote at the Annual Meeting is required to ratify
the appointment of auditors and to take most other actions. If a quorum is
present, the vote of a plurality of the votes cast by the shares entitled to
vote shall be necessary for the election of Directors. Shares beneficially
20
<PAGE>
held in street name are counted for quorum purposes if such shares are voted
on at least one matter to be considered at the meeting. Broker non-votes are
neither counted for purposes of determining the number of affirmative votes
required for approval of proposals nor voted for or against matters presented
for shareholder consideration. Consequently, so long as a quorum is present,
such non-votes have no effect on the outcome of any vote. Abstentions with
respect to a proposal are counted for purposes of establishing a quorum.
Abstentions also are counted for purposes of determining the minimum number
of affirmative votes required for approval of proposals and, accordingly,
have the effect of a vote against those proposals. If a quorum is present,
abstentions have no effect on the outcome of voting for directors.
The cost of soliciting proxies will be borne by the Company. Corporate
Investors Communications has been retained to assist in the solicitation of
proxies for a fee of $6,500 plus expenses. Proxies may also be solicited by
employees of the Company.
The Board of Directors knows of no other matters which will be brought
before the Annual Meeting. If other matters are properly introduced, the
persons named in the enclosed proxy will vote on such matters as the Board
recommends.
February 23, 1996
21
</TABLE>
