<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-46093
PROSPECTUS SUPPLEMENT
(To Prospectus dated February 24, 1998)
$300,000,000
SUNTRUST BANKS, INC.
6.25% SENIOR NOTES DUE JUNE 1, 2008
Interest Payable June 1 and December 1
------------------
Interest on the 6.25% Senior Notes Due June 1, 2008 (the "Senior Notes")
will be payable semiannually on June 1 and December 1 of each year, commencing
December 1, 1998. The Senior Notes are not redeemable prior to maturity and will
not be entitled to any sinking fund. The Senior Notes will be issued only in
registered form in denominations of $1,000 and integral multiples thereof.
The Senior Notes will be represented by one or more Book-Entry Securities
registered in the name of the nominee of The Depository Trust Company, which
will act as the Depositary (the "Depositary"). Beneficial interests in the
Senior Notes represented by Book-Entry Securities will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depositary and its direct and indirect participants. Except as described herein,
Senior Notes in definitive form will not be issued. See "Description of Senior
Notes -- Book-Entry System." Settlement for the Senior Notes will be made in
immediately available funds. The Senior Notes will trade in the Depositary's
Same-Day Funds Settlement System until maturity, and secondary market trading
activity in the Senior Notes will settle in immediately available funds. All
payments of principal and interest will be made by the Corporation in
immediately available funds. See "Description of Senior Notes -- Same-Day
Settlement and Payment."
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SENIOR NOTES ARE UNSECURED OBLIGATIONS OF THE CORPORATION, ARE NOT SAVINGS
ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF THE
CORPORATION, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE BANK INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
<TABLE>
<CAPTION>
=====================================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Senior Note.............................. 99.846% 0.490% 99.356%
- ---------------------------------------------------------------------------------------------------------------------
Total........................................ $299,538,000 $1,470,000 $298,068,000
=====================================================================================================================
</TABLE>
(1) Plus accrued interest, if any, from June 2, 1998, to the date of
delivery.
(2) Before deducting expenses payable by SunTrust estimated to be $150,000.
------------------
The Senior Notes are offered subject to receipt and acceptance by the
Underwriters, to prior sale and to the Underwriters' right to reject any order
in whole or in part and to withdraw, cancel or modify the offer without notice.
It is expected that delivery of the Book-Entry Securities will be made through
the facilities of the Depositary, against payment therefor in immediately
available funds, on or about June 2, 1998.
------------------
SALOMON SMITH BARNEY
CITICORP SECURITIES, INC.
ABN AMRO INCORPORATED
SUNTRUST EQUITABLE SECURITIES
EVEREN SECURITIES, INC.
May 28, 1998
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SENIOR NOTES.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, THE SENIOR NOTES IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
THE CORPORATION
SunTrust Banks, Inc. ("SunTrust" or the "Corporation") is a regional bank
holding company headquartered in Atlanta, Georgia. The three principal
subsidiaries of the Corporation are SunTrust Banks of Florida, Inc.,
headquartered in Orlando, Florida ("STB of Florida"), SunTrust Banks of Georgia,
Inc., headquartered in Atlanta, Georgia ("STB of Georgia"), and SunTrust Banks
of Tennessee, Inc., headquartered in Nashville, Tennessee ("STB of Tennessee").
Unless the context indicates otherwise, references herein to the "Corporation"
or "SunTrust" are to SunTrust Banks, Inc. and its subsidiaries, including its
subsidiary banks.
The Corporation, through its subsidiary banks, conducts a broad range of
commercial banking activities, including accepting demand, time and savings
deposits, making both secured and unsecured business and consumer loans and
leases, extending commercial lines of credit, issuing and servicing credit cards
and certain other types of revolving credit accounts, providing commercial
factoring services, cash management services, investment counseling, safe
deposit services, personal and corporate trust and other fiduciary services and
engaging in leasing, mortgage banking, correspondent banking, international
banking, investment banking, trading in U.S. government securities and municipal
bonds and underwriting certain types of general obligation municipal bonds.
USE OF PROCEEDS
The Corporation currently intends to use the net proceeds from the sale of
the Senior Notes for general corporate purposes, which may include reduction of
short-term indebtedness, including commercial paper, repayment of long-term
indebtedness, repurchase of equity securities (including purchases by the
Corporation of its common stock pursuant to its ongoing stock purchase program),
investments at the holding company level, investments in, or extensions of
credit to, its banking and other subsidiaries and other banks and companies
engaged in other financial service activities, and possible acquisitions.
Pending such use, the net proceeds may be temporarily invested.
S-2
<PAGE> 3
SELECTED HISTORICAL FINANCIAL DATA
The following table sets forth the selected consolidated historical
financial information for the five years ended December 31, 1997 and the three
months ended March 31, 1998 and 1997, which is qualified in its entirety by, and
should be read in conjunction with, the consolidated financial statements,
including the notes thereto, and other detailed financial information included
in the documents incorporated by reference in the Prospectus. See "Incorporation
of Certain Documents by Reference" therein.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
--------------------- ---------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Summary of Operations
Interest and dividend income.............. $ 959.5 $ 863.1 $ 3,650.8 $ 3,246.0 $ 3,027.2 $ 2,552.3 $ 2,362.3
Interest expense.......................... 470.0 400.6 1,756.4 1,461.8 1,350.8 932.5 790.7
--------- --------- --------- --------- --------- --------- ---------
Net interest income....................... 489.5 462.5 1,894.4 1,784.2 1,676.4 1,619.8 1,571.6
Provision for loan losses................. 28.6 26.2 117.0 115.9 112.1 137.8 189.1
--------- --------- --------- --------- --------- --------- ---------
Net interest income after provision
for loan losses......................... 460.9 436.3 1,777.4 1,668.3 1,564.3 1,482.0 1,382.5
Noninterest income........................ 286.3 225.8 934.2 818.0 713.1 699.9 726.5
Noninterest expense....................... 471.1 414.0 1,685.6 1,583.1 1,451.5 1,400.0 1,408.4
--------- --------- --------- --------- --------- --------- ---------
Income before provision for income
taxes................................... 276.1 248.1 1,026.0 903.2 825.9 781.9 700.6
Provision for income taxes................ 95.2 87.0 358.7 286.6 260.4 259.2 226.9
--------- --------- --------- --------- --------- --------- ---------
Net income................................ $ 180.9 $ 161.1 $ 667.3 $ 616.6 $ 565.5 $ 522.7 $ 473.7
========= ========= ========= ========= ========= ========= =========
Per common share
Earnings -- diluted....................... $ 0.85 $ 0.74 $ 3.13 $ 2.76 $ 2.47 $ 2.25 $ 1.99
Earnings -- basic......................... 0.87 0.75 3.17 2.80 2.49 2.28 2.01
Dividends paid............................ 0.250 0.225 0.925 0.825 0.740 0.660 0.580
Common dividend payout ratio.............. 29.1% 30.1% 29.3% 29.8% 29.8% 30.1% 30.6%
Selected Average Balances
Total assets.............................. $58,368.4 $51,906.5 $54,272.0 $47,718.8 $43,072.6 $40,489.2 $37,524.9
Earning assets............................ 50,089.7 45,054.0 46,996.3 41,831.0 38,401.4 36,111.0 34,047.3
Loans..................................... 40,526.4 35,894.2 37,516.2 32,792.5 29,709.3 26,412.6 24,162.8
Deposits.................................. 36,316.3 35,519.5 35,915.3 34,241.3 31,808.7 30,877.8 29,683.3
Realized shareholders' equity............. 3,356.6 3,229.2 3,158.4 3,263.9 3,052.3 2,960.2 2,875.1
Total shareholders' equity................ 5,410.8 4,966.6 5,018.0 4,621.5 3,905.2 3,571.5 2,877.2
At Period End
Total assets.............................. $59,890.2 $53,733.3 $57,982.7 $52,468.2 $46,471.5 $42,709.1 $40,728.4
Earning assets............................ 50,590.8 46,195.7 49,743.3 45,182.1 40,530.0 38,045.6 35,904.5
Loans..................................... 41,264.0 36,428.0 40,135.5 35,404.2 31,301.4 28,548.9 25,292.1
Reserve for loan losses................... 758.5 734.5 751.8 725.8 698.9 647.0 561.2
Deposits.................................. 36,744.6 36,661.3 38,197.5 36,890.4 33,183.2 32,218.4 30,485.8
Long-term debt............................ 4,189.4 1,721.3 3,171.8 1,565.3 1,002.4 930.4 630.4
Realized shareholders' equity............. 3,382.2 3,148.0 3,150.5 3,278.2 3,111.0 2,883.3 2,845.8
Total shareholders' equity................ 5,753.2 4,815.9 5,199.4 4,880.0 4,269.6 3,453.3 3,609.6
Ratios
Return on total assets.................... 1.33% 1.33% 1.30% 1.35% 1.36% 1.32% 1.26%
Return on realized shareholders' equity... 21.85 20.23 21.13 18.89 18.53 17.66 16.48
Net interest margin....................... 4.03 4.25 4.11 4.36 4.49 4.64 4.80
Efficiency Ratio.......................... 60.1 59.3 58.8 59.9 59.5 58.9 59.7
Total shareholders' equity/assets......... 9.61 8.96 8.97 9.30 9.19 8.09 8.86
Nonperforming assets to total loans plus
other real estate owned................. 0.39 0.64 0.37 0.72 0.80 0.96 1.61
Risk based capital ratios
Tier 1 capital.......................... 7.63 6.84 7.22 7.46 7.78 7.95 8.88
Total capital........................... 13.04 10.15 12.48 10.87 9.71 10.05 10.55
Tier 1 leverage ratio..................... 6.94 5.89 6.49 6.40 6.71 6.68 6.82
</TABLE>
S-3
<PAGE> 4
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following unaudited table presents the consolidated ratio of earnings
to fixed charges of the Corporation. The consolidated ratio of earnings to fixed
charges has been computed by dividing (i) net income plus all applicable income
taxes plus fixed charges by (ii) fixed charges. Fixed charges represent interest
expense (ratios are presented both excluding and including interest on
deposits), and the portion of net rental expense which is deemed to be
equivalent to interest on long-term debt. Interest expense (other than on
deposits) includes interest on long-term debt, federal funds purchased and
securities sold under agreements to repurchase, mortgages, commercial paper and
other funds borrowed.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------- ------------------------------------
1998 1997 1997 1996 1995 1994 1993
----- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Including interest on deposits.............. 1.58x 1.61x 1.58x 1.61x 1.61x 1.83x 1.87x
Excluding interest on deposits.............. 2.46x 2.95x 2.65x 3.30x 3.20x 4.24x 5.07x
</TABLE>
DESCRIPTION OF SENIOR NOTES
The following description of the Senior Notes (referred to in the
accompanying Prospectus as the "Senior Debt Securities") supplements, and to the
extent inconsistent therewith, replaces, the description of the general terms
and provisions of the Senior Debt Securities set forth in the accompanying
Prospectus, to which description reference is hereby made. Capitalized terms
used and not defined herein have the meaning set forth in the accompanying
Prospectus.
GENERAL
The Senior Notes will be limited to $300,000,000 aggregate principal amount
and will mature on June 1, 2008. The Senior Notes may not be redeemed by the
Corporation prior to the stated maturity and are not entitled to any sinking
fund. The Senior Notes will be issued in fully registered form only, without
coupons. As discussed below, payment of the principal of, and interest on, the
Senior Notes represented by a permanent global Senior Note or Senior Notes
registered in the name of or held by DTC (as defined below) or its nominee will
be made in immediately available funds to DTC or its nominees, as the case may
be, as the registered owner and holder of such permanent global Senior Note or
Senior Notes. See "-- Same-Day Settlement and Payment." The Senior Notes will be
issued pursuant to an Indenture (the "Senior Indenture") dated as of May 1,
1993, between the Corporation and PNC Bank, National Association, as Trustee.
The Senior Notes constitute a single series of Senior Debt Securities under the
Senior Indenture.
INTEREST
The Senior Notes will bear interest at the rate of 6.25% per annum from
June 2, 1998 or from the most recent Interest Payment Date to which interest has
been paid or provided for, payable semiannually on June 1 and December 1 of each
year (each an "Interest Payment Date"), commencing December 1, 1998, provided
that, if an Interest Payment Date would otherwise fall on a day that is not a
Business Day, such Interest Payment Date will be the following day that is a
Business Day. Interest payable on any Interest Payment Date will be payable to
the persons in whose names the Senior Notes are registered at the close of
business on the May 15 and November 15 next preceding the Interest Payment Date.
Interest on the Senior Notes will be calculated based on a 360-day year
consisting of twelve 30-day months.
REDEMPTION
The Senior Notes are not redeemable prior to maturity and will not be
entitled to any sinking fund.
S-4
<PAGE> 5
DEFEASANCE AND COVENANT DEFEASANCE
The defeasance provisions of the Senior Indenture described under
"Description of the Debt Securities -- Defeasance and Covenant Defeasance" in
the Prospectus will apply to the Senior Notes.
BOOK-ENTRY SYSTEM
The Senior Notes initially will be represented by one or more book-entry
securities (the "Book-Entry Securities") deposited with The Depository Trust
Company ("DTC") and registered in the name of a nominee of DTC. The term
"Depositary" refers to DTC or any successor depositary. The Depositary currently
limits the maximum denomination of any book-entry security to $200,000,000.
Therefore, for purposes of this Prospectus Supplement, "Book-Entry Security"
refers to the Book-Entry Securities representing the entire issue of the Senior
Notes. Except as set forth below, the Senior Notes will be available for
purchase in denominations of $1,000 and integral multiples thereof in book-entry
form only. Except in the limited circumstances as described under "Description
of the Debt Securities -- Book-Entry Securities" in the Prospectus, owners of
beneficial interests in the Book-Entry Securities will not be entitled to have
Senior Notes represented by such Book-Entry Securities registered in their
names, will not receive or be entitled to receive physical delivery of such
Senior Notes in definitive form, and will not be considered the owners or
holders thereof under the Senior Indenture.
DTC has advised the Corporation that it is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
DTC was created to hold securities of persons who have accounts with DTC
("participants") and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. DTC's participants include
securities brokers and dealers (including the Underwriters), banks, trust
companies, clearing corporations and certain other organizations, some of which
(and/or their representatives) own DTC. Access to DTC's book-entry system is
also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly. The rules applicable to DTC and its participants
are on file with the Commission.
For additional information regarding the Book-Entry System, see
"Description of the Debt Securities -- Book-Entry Securities" in the Prospectus.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Senior Notes will be made by the Underwriters in
immediately available funds. All payments of principal and interest and any
redemption price will be made by the Corporation in immediately available funds
or the equivalent. The Senior Notes will trade in the Depositary's Same-Day
Funds Settlement System until maturity, and secondary market trading activity in
the Senior Notes will therefore be required by the Depositary to settle in
immediately available funds. No assurance can be given as to the effect, if any,
of settlement in immediately available funds on trading activity in the Senior
Notes.
S-5
<PAGE> 6
UNDERWRITING
Under the terms and subject to the conditions of the Underwriting Agreement
dated the date of this Prospectus Supplement, the Underwriters named below (the
"Underwriters") have severally agreed to purchase from the Corporation the
following respective principal amounts of Senior Notes at the public offering
price set forth on the cover page of this Prospectus Supplement less
underwriting discounts and commissions.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
- ----------- ------------
<S> <C>
Salomon Brothers Inc ....................................... $190,000,000
Citicorp Securities, Inc. .................................. 40,000,000
ABN AMRO Incorporated....................................... 30,000,000
SunTrust Equitable Securities Corporation................... 30,000,000
EVEREN Securities, Inc...................................... 10,000,000
------------
Total..................................................... $300,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligation of the Underwriters
to pay for and accept delivery of the Senior Notes is subject to the approval of
certain legal matters by counsel and to certain other conditions. The
Underwriters are obligated to take and pay for all of the Senior Notes if any
are taken.
The Underwriters propose to offer part of the Senior Notes directly to the
public at the public offering price set forth on the cover page of this
Prospectus Supplement and part to certain selected dealers at prices that
represent concessions not to exceed 0.40% of the principal amount. Such selected
dealers may reallow concessions to certain other dealers not to exceed 0.25% of
the principal amount. After the initial public offering, the public offering
price, concession and discount may be changed.
In order to facilitate the Offering of the Senior Notes, the Underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Senior Notes. Specifically, the Underwriters may overallot in
connection with the Offering, creating a short position in the Senior Notes for
their own account. In addition, to cover over-allotments or to stabilize the
price of the Senior Notes, the Underwriters may bid for and purchase, the Senior
Notes in the open market. Finally, the underwriting syndicate may reclaim
selling concessions allowed to an underwriter or dealer for distributing the
Senior Notes in the Offering, if the syndicate repurchases previously
distributed Senior Notes in transactions to cover syndicate short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the Senior Notes above independent market
levels. The Underwriters are not required to engage in these activities, and may
end any of these activities at any time.
The Corporation has been advised by the Underwriters (other than SunTrust
Equitable Securities Corporation) that they intend to make a market in the
Senior Notes, but no Underwriter is obligated to do so and may discontinue
making a market at any time without notice. The Corporation currently has no
intention to list the Senior Notes on any securities exchange, and there can be
no assurance given as to the liquidity of the trading market for the Senior
Notes.
The Underwriting Agreement provides that the Corporation will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or contribute to payments that the
Underwriters may be required to make in respect thereof.
Each Underwriter may be a customer of, engage in transactions with, or
perform services for the Corporation in the ordinary course of business.
SunTrust Equitable Securities Corporation, a wholly owned subsidiary of
SunTrust Banks, Inc., is a member of the National Association of Securities
Dealers, Inc. (the "NASD"). SunTrust Equitable Securities Corporation will serve
as a co-manager for this Offering, which is being made by an affiliate of
SunTrust Equitable Securities Corporation. This Offering is being made pursuant
to and will conform with the provisions of Rule 2720 of the Conduct Rules of the
NASD.
S-6
<PAGE> 7
The Underwriters may not confirm sales to any accounts over which they
exercise discretionary authority without the prior specific written approval of
the transaction by the customer.
LEGAL MATTERS
The legality of the Senior Notes will be passed upon for the Corporation by
King & Spalding, New York, New York. Certain other legal matters will be passed
upon by Raymond D. Fortin, Esq., Senior Vice President and Corporate Secretary
of the Corporation, and for the Underwriters by Skadden, Arps, Slate, Meagher &
Flom LLP, New York, New York. As of March 31, 1998, Mr. Fortin was the record
and beneficial owner of 20,800 shares of the common stock of SunTrust and held
options to purchase 3,000 shares of the common stock of SunTrust. Skadden, Arps,
Slate, Meagher & Flom LLP will rely upon the opinion of King & Spalding and of
Mr. Fortin as to matters of Georgia law, and Mr. Fortin will rely upon the
opinion of King & Spalding as to matters of New York law.
S-7
<PAGE> 8
PROSPECTUS
$500,000,000
SUNTRUST BANKS, INC.
DEBT SECURITIES
---------------------
SunTrust Banks, Inc., a Georgia corporation (the "Corporation"), from time
to time may offer and sell debt securities consisting of debentures, notes or
other evidences of indebtedness in one or more series in an aggregate initial
offering price not to exceed $500,000,000 or its equivalent based on the
applicable exchange rate at the time of the offering if denominated in foreign
currencies (the "Debt Securities"). The Debt Securities may be unsecured and
unsubordinated Debt Securities (the "Senior Debt Securities") or unsecured and
subordinated Debt Securities (the "Subordinated Debt Securities"). The Debt
Securities may be offered as separate series in amounts, at maturities, at
prices and on terms to be determined at the time of the sale as set forth in the
applicable prospectus supplement to this Prospectus (each, a "Prospectus
Supplement"). Although the aggregate initial offering price of the Debt
Securities is limited as set forth above, the respective indentures pursuant to
which the Senior Debt Securities and the Subordinated Debt Securities are to be
issued do not contain any limitation on the aggregate principal amount of the
debt securities covered thereby. The Senior Debt Securities when issued will
rank on a parity with all other unsecured and unsubordinated indebtedness of the
Corporation, and the Subordinated Debt Securities will be unsecured and will be
subordinate to Senior Indebtedness of the Corporation and, under certain
circumstances, to Additional Senior Obligations of the Corporation, each as
defined herein. Unless specifically stated in a Prospectus Supplement, payment
of principal of the Subordinated Debt Securities may be accelerated only in the
case of the bankruptcy of the Corporation. There is no right of acceleration in
the case of a default in the payment of the principal of, or any premium or
interest on, the Subordinated Debt Securities or in the performance of any
covenant or agreement of the Corporation. See "Description of the Debt
Securities."
When a particular series of Debt Securities is offered, a Prospectus
Supplement will be delivered setting forth the terms of such Debt Securities,
including the specific designation, aggregate principal amount, denominations,
maturity, premium, if any, interest rate (which may be fixed or variable) and
time of payment of interest, if any, terms for redemption at the option of the
Corporation or the holder, if any, terms for sinking fund payments, if any,
subordination terms, if any, and any other terms of such Debt Securities, or
otherwise in connection with the offering and sale of the Debt Securities in
respect of which the Prospectus Supplement is being delivered. In addition, the
Prospectus Supplement will set forth the initial public offering price, the
names of any underwriters or agents, the principal amounts, if any, to be
purchased by underwriters, the compensation of such underwriters and agents, if
any, and the net proceeds to the Corporation. The Debt Securities of a series
may be issued in definitive registered form without coupons ("Registered
Securities") or in the form of one or more book-entry securities in registered
form ("Book-Entry Securities").
The Debt Securities may be sold directly by the Corporation to the public
or through agents designated from time to time, through underwriting syndicates
led by one or more managing underwriters or through one or more underwriters
acting alone. If the Corporation, directly or through agents, solicits offers to
purchase the Debt Securities, the Corporation reserves the sole right to accept
and, together with its agents, to reject in whole or in part any proposed
purchase of Debt Securities. See "Plan of Distribution." Any underwriters,
dealers or agents participating in the offering may be deemed "underwriters"
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"). See "Plan of Distribution" for possible indemnification arrangements for
underwriters, agents and their controlling persons.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE THE SALE OF DEBT SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT. THE DEBT SECURITIES WILL BE
UNSECURED OBLIGATIONS OF THE CORPORATION, WILL NOT BE SAVINGS ACCOUNTS, DEPOSITS
OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF THE CORPORATION, AND
WILL NOT BE INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY OR INSTRUMENTALITY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS FEBRUARY 24, 1998.
<PAGE> 9
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and at the Commission's
Regional Offices in New York (13th Floor, 7 World Trade Center, New York, New
York 10048) and Chicago (Suite 1400, 500 West Madison Street, Chicago, Illinois
60661-2511). The Commission also maintains a Web site at http://www.sec.gov that
contains reports, proxy statements and other information regarding registrants
that file electronically with the Commission. In addition, such reports, proxy
statements and other information concerning the Corporation can be inspected at
the offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005. This Prospectus does not contain all the information set forth in the
Registration Statement on Form S-3 of which this Prospectus is a part (together
with all exhibits and amendments, the "Registration Statement"), which the
Corporation has filed with the Commission under the Securities Act and to which
reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation hereby incorporates by reference in this Prospectus the
following reports filed with the Commission pursuant to the Exchange Act: (a)
its Annual Report on Form 10-K for the year ended December 31, 1996, (b) its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997, June 30,
1997 and September 30, 1997 and (c) its Current Reports on Form 8-K filed on May
12, 1997 and January 16, 1998.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date hereof and prior to the
termination of the offering of the Debt Securities offered hereby shall be
deemed to be incorporated by reference into this Prospectus and shall be deemed
a part hereof from the respective dates of filing of such documents. Any
statement contained in this Prospectus or any accompanying Prospectus Supplement
or in a document incorporated or deemed to be incorporated by reference herein
or therein shall be deemed to be modified or superseded for purposes of this
Prospectus or such accompanying Prospectus Supplement to the extent that a
statement contained herein or therein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein or
therein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
The Corporation will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents incorporated by reference herein,
except for exhibits to such documents unless such exhibits are specifically
incorporated by reference into such documents. Written requests should be sent
to: James C. Armstrong, First Vice President -- Investor Relations, SunTrust
Banks, Inc., 303 Peachtree Street, N.E., Atlanta, Georgia 30308. Telephone
requests may be directed to 404-588-7425.
THE CORPORATION
The Corporation is a regional bank holding company with three principal
subsidiaries: SunTrust Banks of Florida, Inc., headquartered in Orlando, Florida
("STB of Florida"); SunTrust Banks of Georgia, Inc., headquartered in Atlanta,
Georgia ("STB of Georgia"); and SunTrust Banks of Tennessee, Inc., headquartered
in Nashville, Tennessee ("STB of Tennessee").
The Corporation, through its subsidiary banks (the "Subsidiary Banks"),
conducts a broad range of commercial banking activities, including accepting
demand, time and savings deposits, making both secured and unsecured business
and consumer loans and leases, extending commercial lines of credit, issuing and
servicing credit cards and certain other types of revolving credit accounts,
providing commercial factoring services, cash management services, investment
counseling, safe deposit services, personal and corporate trust
2
<PAGE> 10
and other fiduciary services and engaging in leasing, mortgage banking,
correspondent banking, international banking, investment banking, trading in
U.S. government securities and municipal bonds and underwriting certain types of
securities.
Under the longstanding policy of the Board of Governors of the Federal
Reserve System (the "Federal Reserve"), a bank holding company is expected to
act as a source of financial strength for its subsidiary banks and to commit
resources to support such banks. As a result of this policy, the Corporation may
be required to commit resources to the Subsidiary Banks in circumstances where
it might not otherwise do so.
Because the Corporation is a bank holding company, its rights and the
rights of its creditors, including the holders of the Offered Debt Securities
(as defined herein), to participate in the distribution and payment of assets of
any subsidiary upon the subsidiary's liquidation or recapitalization would be
subject to the prior claims of such subsidiary's creditors except to the extent
that the Corporation may itself be a creditor with recognized claims against the
subsidiary.
The Corporation's principal executive offices are located at 303 Peachtree
Street, N.E., Atlanta, Georgia 30308, and its telephone number is 404-588-7711.
USE OF PROCEEDS
The Corporation currently intends to use the net proceeds from the sale of
any Debt Securities for general corporate purposes, which may include
refinancing of debt, including outstanding commercial paper and other short-term
indebtedness, redemption or repurchase of shares of its outstanding common and
preferred stock (including repurchases by the Corporation of its common stock
pursuant to its ongoing stock repurchase program), investments at the holding
company level, investments in, or extensions of credit to, its banking and other
subsidiaries and other banks and companies engaged in other financial service
activities, possible acquisitions and such other purposes as may be stated in
any Prospectus Supplement. Pending such use, the net proceeds may be temporarily
invested. The precise amounts and timing of the application of proceeds will
depend upon the funding requirements of the Corporation and its subsidiaries and
the availability of other funds. Except as may be described in any Prospectus
Supplement, specific allocations of the proceeds to such purposes will not have
been made at the date of such Prospectus Supplement.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following table presents the consolidated ratio of earnings to fixed
charges of the Corporation. The consolidated ratio of earnings to fixed charges
has been computed by dividing (i) net income plus all applicable income taxes
plus fixed charges by (ii) fixed charges. Fixed charges represent interest
expense (ratios are presented both including and excluding interest on
deposits), and the portion of net rental expense which is deemed to be
equivalent to interest on long-term debt. Interest expense (other than on
deposits) includes interest on long-term debt, federal funds purchased and
securities sold under agreements to repurchase, mortgages, commercial paper and
other funds borrowed.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- --------------------------------
1997 1996 1996 1995 1994 1993 1992
----- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Including interest on deposits................. 1.60x 1.61x 1.61x 1.61x 1.83x 1.87x 1.58x
Excluding interest on deposits................. 2.86x 3.41x 3.30x 3.20x 4.24x 5.07x 4.70x
</TABLE>
3
<PAGE> 11
CERTAIN REGULATORY CONSIDERATIONS
The following discussion sets forth certain of the elements of the
comprehensive regulatory framework applicable to bank holding companies and
banks and provides certain specific information relevant to the Corporation and
its subsidiaries. Federal and state regulation of financial institutions such as
the Corporation and the Subsidiary Banks is intended primarily for the
protection of depositors and the Federal deposit insurance funds rather than
shareholders or other creditors.
GENERAL
As a bank holding company, the Corporation is subject to the regulation and
supervision of the Federal Reserve. The Corporation's Subsidiary Banks are
subject to regulation, supervision and examination by applicable state and
federal banking agencies, including the Federal Reserve, the Office of the
Comptroller of the Currency (the "Comptroller") and the Federal Deposit
Insurance Corporation (the "FDIC").
The federal banking agencies have broad enforcement powers over depository
institutions, including the power to terminate deposit insurance, to impose
substantial fines and other civil and criminal penalties, and to appoint a
conservator or receiver if certain conditions are met. The federal banking
agencies also have broad enforcement powers over bank holding companies,
including the power to impose substantial fines and other civil and criminal
penalties.
Almost every aspect of the operations and financial condition of the
Subsidiary Banks is subject to extensive regulation and supervision and to
various requirements and restrictions under federal and state law, including
requirements governing capital adequacy, liquidity, earnings, dividends,
reserves against deposits, management practices, branching, loans, investments,
and the provision of services. Various consumer protection laws and regulations
also affect the operations of the Subsidiary Banks. The activities and
operations of the Corporation also are subject to extensive federal supervision
and regulation which, among other things, limit non-banking activities, impose
minimum capital requirements and require approval to acquire more than 5% of any
class of voting shares or substantially all of the assets of a bank. In addition
to the impact of regulation, banks and bank holding companies may be
significantly affected by legislation, which can change banking statutes in
substantial and unpredictable ways, and by the actions of the Federal Reserve as
it attempts to control the money supply and credit availability in order to
influence the economy.
PAYMENT OF DIVIDENDS AND OTHER RESTRICTIONS
The Corporation is a legal entity separate and distinct from its
subsidiaries, including the Subsidiary Banks. There are various legal and
regulatory limitations under federal and state law on the extent to which the
Corporation's subsidiaries, including its bank and bank holding company
subsidiaries, can finance or otherwise supply funds to the Corporation.
The principal source of the Corporation's cash revenues is dividends from
its subsidiaries and there are certain limitations under federal, Georgia,
Florida, Tennessee and Alabama law on the payment of dividends by such
subsidiaries. The approval of the Federal Reserve or the Comptroller, as the
case may be, is required if the total of all dividends declared by any state
member bank of the Federal Reserve or any national bank in any calendar year
exceeds the bank's net income for that year combined with its retained net
income for the preceding two years, less any required transfers to surplus or a
fund for the retirement of any preferred stock. In addition, a dividend may not
be paid if a bank's losses equal or exceed its undivided profits, and a dividend
may not be paid in excess of a bank's undivided profits. The relevant federal
and state regulatory agencies also have authority to prohibit a bank holding
company, which would include STB of Florida, STB of Georgia and STB of
Tennessee, or a state or national bank from engaging in what, in the opinion of
such regulatory body, constitutes an unsafe or unsound practice in conducting
its business. The payment of dividends could, depending upon the financial
condition of the subsidiary, be deemed to constitute such an unsafe or unsound
practice.
Under Georgia law (which would apply to any payment of dividends by the
Corporation's largest subsidiary, SunTrust Bank, Atlanta, to STB of Georgia) the
prior approval of the Georgia Department of
4
<PAGE> 12
Banking and Finance is required before any cash dividends may be paid by a state
bank if: (i) total classified assets at the most recent examination of such bank
exceed 80% of the equity capital (as defined, which includes the reserve for
loan losses) of such bank; (ii) the aggregate amount of dividends declared or
anticipated to be declared in the calendar year exceeds 50% of the net profits,
after taxes but before dividends, for the previous calendar year; or (iii) the
ratio of equity capital to adjusted total assets is less than 6%.
Retained earnings of the Corporation's banking subsidiaries available for
payment of cash dividends under all applicable regulations without obtaining
governmental approval were approximately $441.8 million as of December 31, 1996.
In addition, the Subsidiary Banks and their subsidiaries are subject to
limitations under Sections 23A and 23B of the Federal Reserve Act with respect
to extensions of credit to, investments in, and certain other transactions with,
the Corporation and its other subsidiaries. Furthermore, such loans and
extensions of credit, as well as certain other transactions, are also subject to
various collateral requirements.
CAPITAL ADEQUACY
The Federal Reserve has adopted minimum risk-based and leverage capital
guidelines for bank holding companies. The minimum required risk-based capital
ratio of qualifying total capital to risk-weighted assets (including certain
off-balance-sheet items, such as standby letters of credit) is 8%, of which 4%
must consist of Tier 1 capital. As of September 30, 1997, the Corporation's
total risk-based capital ratio was 11.17%, including 7.58% of Tier 1 capital.
The minimum required leverage capital ratio (Tier 1 capital to average total
assets) is 3% for bank holding companies that meet certain specified criteria,
including that they have the highest regulatory rating. As of September 30,
1997, the Corporation's leverage capital ratio was 6.63%. Higher risk-based and
leverage ratios may apply under certain circumstances.
The Subsidiary Banks are subject to similar risk-based and leverage capital
requirements adopted by the federal banking agencies.
Failure to meet capital requirements can subject a bank to a variety of
enforcement remedies, including additional substantial restrictions on its
operations and activities, termination of deposit insurance by the FDIC, and
under certain conditions the appointment of a receiver or conservator.
Federal banking regulations establish five capital categories for
depository institutions ("well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" and "critically
undercapitalized"), and impose significant restrictions on the operations of an
institution that is not at least adequately capitalized. Under certain
circumstances, an institution may be downgraded to a category lower than that
warranted by its capital levels, and subjected to the supervisory restrictions
applicable to institutions in the lower capital category. A depository
institution is generally prohibited from making capital distributions (including
paying dividends) or paying management fees to a holding company if the
institution would thereafter be undercapitalized.
An undercapitalized depository institution is subject to restrictions in a
number of areas, including asset growth, acquisitions, branching, new lines of
business, and borrowing from the Federal Reserve. In addition, an
undercapitalized depository institution is required to submit a capital
restoration plan. A depository institution's holding company must guarantee the
capital plan up to an amount equal to the lesser of 5% of the depository
institution's assets at the time it becomes undercapitalized or the amount
needed to restore the capital of the institution to the levels required for the
institution to be classified as adequately capitalized at the time the
institution fails to comply with the plan and any such guarantee would be
entitled to a priority of payment in bankruptcy. A depository institution is
treated as if it is significantly undercapitalized if it fails to submit a
capital plan that is based on realistic assumptions and is likely to succeed in
restoring the depository institution's capital.
Significantly undercapitalized depository institutions may be subject to a
number of additional significant requirements and restrictions, including
requirements to sell sufficient voting stock to become adequately capitalized,
to replace or improve management, to reduce total assets, to cease acceptance of
correspondent bank deposits, to restrict senior executive compensation and to
limit transactions with affiliates. Critically
5
<PAGE> 13
undercapitalized depository institutions are further subject to restrictions on
paying principal or interest on subordinated debt, making investments,
expanding, acquiring or selling assets, extending credit for highly-leveraged
transactions, paying excessive compensation, amending their charters or bylaws
and making any material changes in accounting methods. In general, a receiver or
conservator must be appointed for a depository institution within 90 days after
the institution is deemed to be critically undercapitalized.
SUPPORT OF SUBSIDIARY BANKS
Under Federal Reserve policy, the Corporation is expected to serve as a
source of financial strength to, and to commit resources to support, each of the
Subsidiary Banks. This support may be required at times when, absent such
Federal Reserve policy, the Corporation may not be inclined to provide it. In
the event of a bank holding company's bankruptcy, any commitment by the bank
holding company to a federal bank regulatory agency to maintain the capital of a
subsidiary bank will be assumed by the bankruptcy trustee and entitled to a
priority of payment.
A depository institution insured by the FDIC can be held liable for any
loss incurred by, or reasonably expected to be incurred by, the FDIC in
connection with the default of a commonly controlled FDIC-insured depository
institution or any assistance provided by the FDIC to any commonly controlled
FDIC-insured depository institution "in danger of default". "Default" is defined
generally as the appointment of a conservator or receiver and "in danger of
default" is defined generally as the existence of certain conditions indicating
that a default is likely to occur in the absence of regulatory assistance.
Liability for the losses of commonly-controlled depository institutions can lead
to the failure of some or all depository institutions in a holding company
structure, if the remaining institutions are unable to pay the liability
assessed by the FDIC. Any obligation or liability owed by a subsidiary bank to
its parent company or to an affiliate of the subsidiary bank is subordinate to
the subsidiary bank's cross-guarantee liability for losses of
commonly-controlled depository institutions.
DESCRIPTION OF THE DEBT SECURITIES
GENERAL
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
and the extent, if any, to which general provisions may apply to such Debt
Securities (the "Offered Debt Securities") will be described in the Prospectus
Supplement relating to such Offered Debt Securities (the "Applicable Prospectus
Supplement").
Senior Debt Securities will be issued from time to time in series under an
Indenture, dated as of May 1, 1993 (the "Senior Indenture"), between the
Corporation and PNC Bank, National Association, as Trustee (the "Senior
Trustee"). Subordinated Debt Securities will be issued under an Indenture, dated
as of May 1, 1993 (the "Subordinated Indenture"), between the Corporation and
The First National Bank of Chicago, as Trustee (the "Subordinated Trustee"). The
Senior Indenture and the Subordinated Indenture are sometimes herein referred to
collectively as the "Indentures" and the Senior Trustee and the Subordinated
Trustee are sometimes herein referred to collectively as the "Trustees". The
Indentures are incorporated by reference as exhibits to the Registration
Statement of which this Prospectus is a part.
The following summaries of certain provisions of the Senior Debt
Securities, the Subordinated Debt Securities, the Senior Indenture and the
Subordinated Indenture, as modified or superseded by the Applicable Prospectus
Supplement, are brief summaries of certain provisions thereof, do not purport to
be complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indenture applicable to a particular series of
Debt Securities (the "Applicable Indenture"), including the definitions therein
of certain terms. Whenever particular provisions or defined terms in one or both
of the Indentures are referred to, such provisions or defined terms are
incorporated herein by reference. Numerical references in parentheses below are
references to the Applicable Indenture. Capitalized terms not otherwise defined
herein shall have the meanings given to them in the Applicable Indenture.
6
<PAGE> 14
The Debt Securities will be limited to an aggregate initial offering price
of $500,000,000 or its equivalent based on the applicable exchange rate at the
time of the offering if denominated in foreign currencies and will be direct,
unsecured obligations of the Corporation. The Debt Securities will not be
deposits or other obligations of any bank or nonbank subsidiary of the
Corporation and will not be insured by the FDIC, the Bank Insurance Fund or any
other government agency or instrumentality. The Indentures do not limit the
aggregate principal amount of Debt Securities or of any particular series of
Debt Securities which may be issued thereunder and provide that Debt Securities
issued thereunder may be issued from time to time in one or more series, in each
case with the same or various maturities, at par or at a discount.
The Indentures do not limit the amount of other debt that may be issued by
the Corporation and do not contain financial or similar restrictive covenants.
As of September 30, 1997, the Corporation had an aggregate of $680.0 million of
long-term Senior Indebtedness (as defined below under "Subordination of the
Subordinated Debt Securities") outstanding and an aggregate of approximately
$1830.9 million of short-term Senior Indebtedness outstanding which consisted
primarily of commercial paper. As of September 30, 1997, the Corporation had no
Additional Senior Obligations (as defined below) outstanding. The Corporation
expects from time to time to incur additional indebtedness constituting Senior
Indebtedness and Additional Senior Obligations. The Indentures do not prohibit
or limit the incurrence of additional Senior Indebtedness or Additional Senior
Obligations. As of September 30, 1997, the Corporation had an aggregate of
$1294.5 million of long-term Subordinated Debt Securities outstanding.
The Senior Debt Securities will be unsecured and will rank on a parity with
all other unsecured and unsubordinated indebtedness of the Corporation. The
Subordinated Debt Securities will be unsecured and will be subordinated and
junior to all Senior Indebtedness and, in certain circumstances relating to the
dissolution, winding-up, liquidation or reorganization of the Corporation, to
all Additional Senior Obligations to the extent set forth below under
"Subordination of the Subordinated Debt Securities". Because the Corporation is
a holding company and a legal entity separate and distinct from its
subsidiaries, the rights of the Corporation to participate in any distribution
of assets of any subsidiary upon its liquidation of assets or reorganization or
otherwise (and thus the ability of Holders of Debt Securities to benefit
indirectly from such distribution) would be subject to the prior claims of
creditors of that subsidiary, except to the extent that the Corporation itself
may be a creditor of that subsidiary with recognized claims. However, in the
event of a liquidation or other resolution of an insured depository institution,
the claims of depositors and other general or subordinated creditors are
entitled to a priority of payment over the claims of holders of any obligation
of the institution to its shareholders, including any depository institution
holding company or any shareholder or creditor thereof. Claims on the
Corporation's subsidiary banks by creditors other than the Corporation include
long-term debt and substantial obligations with respect to deposit liabilities
and federal funds purchased, securities sold under repurchase agreements, other
short-term borrowings and various other financial obligations. In addition, the
Indentures and the Debt Securities will not contain any provision that would
provide protection to the Holders of the Debt Securities against a sudden and
dramatic decline in credit quality resulting from a takeover, recapitalization
or similar restructuring of the Corporation or other event involving the
Corporation that may adversely affect the credit quality of the Corporation.
Reference is made to the Applicable Prospectus Supplement for the following
terms of the Offered Debt Securities offered thereby: (i) the title of the
Offered Debt Securities; (ii) whether the Offered Debt Securities are Senior
Debt Securities or Subordinated Debt Securities; (iii) any limit upon the
aggregate principal amount of the Offered Debt Securities and the percentage of
such principal amount at which such Offered Debt Securities may be issued; (iv)
the date or dates on which the principal of the Offered Debt Securities is
payable (the "Stated Maturity"); (v) the rate or rates of interest (which may be
fixed or variable) per annum at which the Offered Debt Securities will bear
interest, or the method of determining such rate or rates, if any; (vi) the date
or dates from which such interest, if any, will accrue, the Interest Payment
Dates on which any such interest will be payable, the Regular Record Date for
the interest payable on any Interest Payment Date, the Person to whom any
Offered Debt Security of such series will be payable, if other than the Person
in whose name that Offered Debt Security (or one or more predecessor Debt
Securities) is registered at the close of business on the Regular Record Date
for such interest, and the extent to which, or the manner in which, any interest
payable on a permanent global Offered Debt Security on an
7
<PAGE> 15
Interest Payment Date will be paid; (vii) if other than the location specified
in this Prospectus, the place or places where the principal of and premium, if
any, and interest on the Offered Debt Securities will be payable; (viii) the
period or periods within which, the price or prices at which and the terms and
conditions upon which the Offered Debt Securities will, pursuant to any
mandatory sinking fund provisions or otherwise, or may, pursuant to any optional
sinking fund provisions or otherwise, be redeemed in whole or in part by the
Corporation; (ix) if applicable, the period or periods within which, the price
or prices at which and the terms and conditions upon which the Offered Debt
Securities may be repaid, in whole or in part, at the option of the Holders
thereof; (x) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which the Offered Debt Securities shall be
issuable; (xi) if other than the principal amount thereof, the portion of the
principal amount of the Offered Debt Securities which shall be payable upon
declaration of acceleration of the Stated Maturity thereof; (xii) if other than
U.S. dollars, the currency or currency unit of payment of principal and premium,
if any, and interest on such Offered Debt Securities, and any index used to
determine the amount of payment of principal or premium, if any, and interest on
such Offered Debt Securities; (xiii) whether the Offered Debt Securities are to
be issuable in permanent global form and, in such case, the initial depository
with respect thereto and the circumstances under which such permanent global
Offered Debt Security may be exchanged; (xiv) whether the subordination
provisions summarized below or different subordination provisions, including a
different definition of "Senior Indebtedness", "Entitled Persons", "Existing
Subordinated Indebtedness" or "Additional Senior Obligations", shall apply to
the Offered Debt Securities; (xv) any Events of Default applicable to such
Offered Debt Securities (if not set forth in the applicable Indenture), and any
additional restrictive covenants (if not set forth in the applicable Indenture)
or different restrictive covenants, but not inconsistent with the restrictive
covenants contained in the applicable Indenture; (xvi) if such Offered Debt
Securities are Senior Debt Securities, whether the provisions of the Senior
Indenture relating to "Defeasance and Covenant Defeasance" will be applicable to
such series of Offered Debt Securities; and (xvii) any other terms of the
Offered Debt Securities not specified in this Prospectus.
Unless otherwise indicated in the Applicable Prospectus Supplement,
principal, premium, if any, and interest, if any, on the Debt Securities will be
payable, and the Debt Securities will be transferable, at the Corporate Trust
Office of SunTrust Bank, Atlanta in Atlanta, Georgia, except that interest may
be paid at the option of the Corporation by check mailed to the address of the
Holder entitled thereto as it appears on the Security Register. The Corporation
will have the right to require a holder of any Debt Security, in connection with
the payment of the principal, premium, if any, and interest, if any, on such
Debt Security, to certify information to the Corporation or, in the absence of
such certification, the Corporation will be entitled to rely on any legal
presumption to enable the Corporation to determine its duties and liabilities,
if any, to deduct or withhold taxes, assessments or governmental charges from
such payment.
If the principal, premium, if any, or interest, if any, on any Debt
Securities are to be payable in any currency other than U.S. dollars or, at the
election of the Corporation or a holder thereof, in one or more currencies or
composite currencies, or if any index is used to determine the amount of
payments of principal, premium, if any, or interest, if any, on any series of
Debt Securities, any special Federal income tax, accounting and other
considerations applicable thereto will be described in the Prospectus Supplement
relating thereto.
Unless otherwise indicated in the Applicable Prospectus Supplement, the
Debt Securities will be issued only in fully registered form, without coupons,
in denominations of $1,000 and any integral multiple thereof. No service charge
will be made for any registration of transfer or exchange of the Debt
Securities, but the Corporation may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Both Senior Debt Securities and Subordinated Debt Securities may be issued
as Original Issue Discount Securities to be offered and sold at a substantial
discount below their stated principal amount. Federal income tax consequences
and other special considerations applicable to any such Original Issue Discount
Securities will be described in the Applicable Prospectus Supplement. "Original
Issue Discount Security" means any security which provides for an amount less
than the principal amount thereof to be due and payable upon the
8
<PAGE> 16
declaration of acceleration of the Stated Maturity thereof in accordance with
the terms of the related Indenture.
Reference is made to the Applicable Prospectus Supplement relating to any
series of Offered Debt Securities that are Original Issue Discount Securities
for the particular provisions relating to acceleration of the maturity of a
portion of the principal amount of such series of Original Issue Discount
Securities upon the occurrence of an Event of Default and the continuation
thereof.
The Corporation has various credit agreements (as amended, the "Credit
Agreements"), between the Corporation and various credit banks, which contain
certain covenants of the Corporation, including a covenant that limits the
Corporation's Total Debt (as defined in the Credit Agreements) to an amount no
greater than its Net Worth (as defined in the Credit Agreements). As of
September 30, 1997, the Corporation's Net Worth was approximately $5.0 billion.
As of September 30, 1997, the Corporation had no indebtedness outstanding under
the Credit Agreements.
BOOK-ENTRY SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Book-Entry Securities that will be deposited with a Depositary or its nominee
identified in the Applicable Prospectus Supplement (Section 301). In such a
case, one or more Book-Entry Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of Offered Debt Securities of the series to be represented by such Book-Entry
Security or Securities. Unless and until it is exchanged in whole or in part for
Debt Securities in definitive registered form, a Book-Entry Security may not be
transferred except as a whole by the Depositary for such Book-Entry Security to
a nominee of such Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee to
a successor of the Depositary or a nominee of such successor (Section 305).
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Book-Entry
Security will be described in the Applicable Prospectus Supplement. The
Corporation anticipates that the following provisions will apply to all
depositary arrangements.
Upon the issuance of a Book-Entry Security, the Depositary for such
Book-Entry Security or its nominee will credit, on its book-entry registration
and transfer system, the respective principal amounts of the Securities
represented by such Book-Entry Security to the accounts of persons that have
accounts with such Depositary ("participants"). Such accounts shall be
designated by the underwriters or agents with respect to such Debt Securities or
by the Corporation if such Debt Securities are offered and sold directly by the
Corporation. Participants include securities brokers and dealers, banks and
trust companies, clearing corporations and certain other organizations. Access
to the Depositary's system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly ("indirect
participants"). Persons who are not participants may beneficially own Book-Entry
Securities held by the Depositary only through participants or indirect
participants.
Ownership of beneficial interests in any Book-Entry Security will be shown
on, and the transfer of that ownership will be effected only through, records
maintained by the Depositary or its nominee (with respect to interests of
participants) for such Book-Entry Security and on the records of participants
(with respect to interests of indirect participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such laws, as well as the limits on participation
in the Depositary's book-entry system, may impair the ability to transfer
beneficial interests in a Book-Entry Security.
So long as the Depositary or its nominee is the registered owner of a
Book-Entry Security, such Depositary or such nominee will be considered the sole
owner or holder of the Debt Securities represented by such Book-Entry Security
for all purposes under the Applicable Indenture. Except as provided below,
owners of beneficial interests in Debt Securities represented by Book-Entry
Securities will not be entitled to have Debt Securities of the series
represented by such Book-Entry Security registered in their names, will not
9
<PAGE> 17
receive or be entitled to receive physical delivery of such Debt Securities in
definitive form, and will not be considered the owners or holders thereof under
the Applicable Indenture.
Payments of principal of and any premium and interest on Debt Securities
registered in the name of the Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of the
Book-Entry Security representing such Debt Securities. The Corporation expects
that the Depositary for a series of Debt Securities or its nominee, upon receipt
of any payment of principal, premium or interest, will immediately credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Book-Entry
Security for such Debt Securities, as shown on the records of such Depositary or
its nominee. The Corporation also expects that payments by participants and
indirect participants to owners of beneficial interests in such Book-Entry
Security held through such persons will be governed by standing instructions and
customary practices, as is now the case with securities registered in "street
name", and will be the responsibility of such participants and indirect
participants. Neither the Corporation, the Trustee, any Authenticating Agent,
any Paying Agent, nor the Security Registrar for such Debt Securities will have
any responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the Book-Entry
Security for such Debt Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests (Section 311).
If the Depositary for Debt Securities of a series notifies the Corporation
that it is unwilling or unable to continue as Depositary or if at any time the
Depositary ceases to be a clearing agency registered under the Exchange Act, the
Corporation has agreed to appoint a successor depositary. If such a successor is
not appointed by the Corporation within 90 days, the Corporation will issue Debt
Securities of such series in definitive registered form in exchange for the
Book-Entry Security representing such series of Debt Securities. In addition,
the Corporation may at any time and in its sole discretion determine that the
Debt Securities of any series issued in the form of one or more Book-Entry
Securities shall no longer be represented by such Book-Entry Security or
Securities and, in such event, will issue Debt Securities of such series in
definitive registered form in exchange for such Book-Entry Security or
Securities representing such series of Debt Securities. Further, if the
Corporation so specifies with respect to the Debt Securities of a series, or if
an Event of Default, or an event which with notice, lapse of time or both would
be an Event of Default with respect to the Debt Securities of such series has
occurred and is continuing, an owner of a beneficial interest in a Book-Entry
Security representing Debt Securities of such series may receive Debt Securities
of such series in definitive registered form. In any such instance, an owner of
a beneficial interest in a Book-Entry Security will be entitled to physical
delivery in definitive registered form of Debt Securities of the series
represented by such Book-Entry Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name
(Section 305). Debt Securities so issued in definitive form will be issued in
denominations of $1,000 and integral multiples thereof and will be issued in
registered form only, without coupons.
SUBORDINATION OF THE SUBORDINATED DEBT SECURITIES.
The obligations of the Corporation to make any payment on account of the
principal of and premium, if any, and interest, if any, on any Subordinated Debt
Securities will, to the extent set forth in the Subordinated Indenture, be
subordinate and junior in right of payment to all Senior Indebtedness of the
Corporation and, in certain circumstances relating to the dissolution,
winding-up, liquidation of or reorganization of the Corporation, to all
Additional Senior Obligations (Article 13).
"Senior Indebtedness" is defined in the Subordinated Indenture to mean (a)
all indebtedness of the Corporation for money borrowed, whether now outstanding
or subsequently created, assumed or incurred, other than (i) the Subordinated
Debt Securities, (ii) any obligation Ranking on a Parity with the Subordinated
Debt Securities, or (iii) any obligation Ranking Junior to the Subordinated Debt
Securities and (b) any deferrals, renewals or extensions of any such Senior
Indebtedness. The term "indebtedness of the Corporation for money borrowed" is
defined in the Subordinated Indenture to mean any obligation of, or any
obligation guaranteed by, the Corporation for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments, and any deferred obligation for the payment of the
10
<PAGE> 18
purchase price of property or assets acquired other than in the ordinary course
of business. "Additional Senior Obligations" is defined in the Subordinated
Indenture to mean all indebtedness of the Corporation, whether now outstanding
or subsequently created, assumed or incurred, for claims in respect of
derivative products such as interest and foreign exchange rate contracts,
commodity contracts and similar arrangements; provided, however, that Additional
Senior Obligations do not include (a) any claims in respect of Senior
Indebtedness, or (b) any obligations (i) Ranking Junior to the Subordinated Debt
Securities, or (ii) Ranking on a Parity with the Subordinated Debt Securities.
For purposes of this definition, "claims" shall have the meaning assigned
thereto in Section 101(4) of the United States Bankruptcy Code of 1978. The
Subordinated Indenture does not limit or prohibit the incurrence of Senior
Indebtedness or Additional Senior Obligations.
The term "Ranking Junior to the Subordinated Debt Securities" is defined in
the Subordinated Indenture to mean any obligation of the Corporation which (a)
ranks junior to and not equally with or prior to the Subordinated Debt
Securities in right of payment upon the happening of any insolvency,
receivership, conservatorship, reorganization, readjustment of debt, marshalling
of assets and liabilities or similar proceedings or any liquidation or
winding-up of or relating to the Corporation as a whole, whether voluntary or
involuntary, and (b) is specifically designated as ranking junior to the
Subordinated Debt Securities by express provisions in the instrument creating or
evidencing such obligation (Section 101).
The term "Ranking on a Parity with the Subordinated Debt Securities" is
defined in the Subordinated Indenture to mean any obligation of the Corporation
which (a) ranks equally with and not prior to the Subordinated Debt Securities
in right of payment upon the happening of any insolvency, receivership,
conservatorship, reorganization, readjustment of debt, marshalling of assets and
liabilities or similar proceedings or any liquidation or winding-up of or
relating to the Corporation as a whole, whether voluntary or involuntary, and
(b) is specifically designated as ranking on a parity with the Subordinated Debt
Securities by express provisions in the instrument creating or evidencing such
obligation (Section 101).
The Subordinated Debt Securities will be subordinate in right of payment to
all Senior Indebtedness, as provided in the Subordinated Indenture. No payment
on account of the principal of and premium, if any, or interest in respect of
the Subordinated Debt Securities may be made if there shall have occurred and be
continuing a default in payment with respect to Senior Indebtedness or an event
of default with respect to any Senior Indebtedness resulting in the acceleration
of the maturity thereof. Upon any payment or distribution of assets to creditors
upon any insolvency, receivership, conservatorship, reorganization, readjustment
of debt, marshalling of assets and liabilities or similar proceedings or any
liquidation or winding-up of or relating to the Corporation as a whole, whether
voluntary or involuntary, (a) the holders of all Senior Indebtedness will first
be entitled to receive payment in full before the Holders of the Subordinated
Debt Securities will be entitled to receive any payment in respect of the
principal of and premium, if any, or interest on the Subordinated Debt
Securities, and (b) if after giving effect to the operation of clause (a) above,
(i) any amount of cash, property or securities remains available for payment or
distribution in respect of the Subordinated Debt Securities ("Excess Proceeds"),
and (ii) creditors in respect of Additional Senior Obligations have not received
payment in full of amounts due or to become due thereon or payment of such
amounts has not been duly provided for, then such Excess Proceeds shall first be
applied to pay or provide for the payment in full of all such Additional Senior
Obligations before any payment may be made on the Subordinated Debt Securities.
If the Holders of Subordinated Debt Securities receive payment and are aware at
the time of receiving payment that all Senior Indebtedness and Additional Senior
Obligations have not been paid in full, then such payment shall be held in trust
for the benefit of the holders of Senior Indebtedness and/or Additional Senior
Obligations, as the case may be (Section 1301).
By reason of such subordination, in the event of insolvency, Holders of
Subordinated Debt Securities may recover less, ratably, than holders of Senior
Indebtedness and holders of Additional Senior Obligations. In addition, in the
event of insolvency, creditors of the Corporation who are not holders of Senior
Indebtedness or Holders of the Subordinated Debt Securities may recover less,
ratably, than the holders of Senior Indebtedness and may recover more, ratably,
than the Holders of the Subordinated Debt Securities.
The Applicable Prospectus Supplement may further describe the provisions,
if any, applicable to the subordination of the Subordinated Debt Securities of a
particular series.
11
<PAGE> 19
RESTRICTION ON DISPOSITION OF VOTING STOCK OF CERTAIN SUBSIDIARIES
The Senior Indenture contains a covenant that, except as otherwise provided
below, the Corporation will not sell, assign, pledge, transfer or otherwise
dispose of, or permit the issuance of, or permit a Subsidiary to sell, assign,
pledge, transfer or dispose of, any shares of Voting Stock of any Subsidiary or
any securities convertible into Voting Stock of any Subsidiary which is: (a) a
Principal Constituent Bank; or (b) a Subsidiary which owns shares of Voting
Stock or any securities convertible into Voting Stock of a Principal Constituent
Bank; provided, however, that such covenant does not prohibit (i) any
dispositions made by the Corporation or any Subsidiary (A) acting in a fiduciary
capacity for any Person other than the Corporation or any Subsidiary or (B) to
the Corporation or any of its wholly owned (except for directors' qualifying
shares) Subsidiaries or (ii) the merger of a Principal Constituent Bank with and
into a Principal Constituent Bank or the consolidation of any Principal
Constituent Bank into a Principal Constituent Bank. Such covenant also does not
prohibit sales, assignments, pledges, transfers or other dispositions of shares
of Voting Stock of a corporation referred to in (a) or (b) above where: (i) the
sales, assignments, pledges, transfers or other dispositions are made, in the
minimum amount required by law, to any Person for the purpose of the
qualification of such Person to serve as a director; or (ii) the sales,
assignments, pledges, transfers or other dispositions are made in compliance
with an order of a court or regulatory authority of competent jurisdiction or as
a condition imposed by any such court or authority to the acquisition by the
Corporation, directly or indirectly, of any other corporation or entity; or
(iii) in the case of a disposition of shares of Voting Stock or any securities
convertible into Voting Stock of a Principal Constituent Bank, or sales of
Voting Stock or any securities convertible into Voting Stock of any Subsidiary
included in (b) above, the sales, assignments, pledges, transfers or other
dispositions are for fair market value (as determined by the Board of Directors
of the Corporation and the Subsidiary disposing of such shares or securities)
and, after giving effect to such disposition and to any potential dilution (if
the shares or securities are convertible into Voting Stock), the Corporation and
its directly or indirectly wholly owned (except for directors' qualifying
shares) Subsidiaries, will own directly not less than 80% of the Voting Stock of
such Principal Constituent Bank or Subsidiary; or (iv) a Constituent Bank sells
additional shares of Voting Stock to its shareholders at any price, so long as
immediately after such sale the Corporation owns, directly or indirectly, at
least as great a percentage of the Voting Stock of such Constituent Bank as it
owned prior to such sale of additional shares; or (v) a pledge is made or a lien
is created to secure loans or other extensions of credit by a Constituent Bank
subject to Section 23A of the Federal Reserve Act (Section 1005). Any
Constituent Bank the total assets of which equal more than 15% of the total
assets of all Constituent Banks is defined in the Senior Indenture to be a
"Principal Constituent Bank" (Section 101). As of September 30, 1997, SunTrust
Bank, Atlanta was the only Constituent Bank which is a Principal Constituent
Bank.
The foregoing covenant is not a covenant for the benefit of the
Subordinated Debt Securities.
EVENTS OF DEFAULT
The Senior Indenture. The following are Events of Default under the Senior
Indenture with respect to Senior Debt Securities of any series: (a) failure to
pay any interest on any Debt Security of that series when due and payable,
continued for 30 days; (b) failure to pay principal of or any premium on any
Debt Security of that series when due; (c) failure to deposit any sinking fund
payment, when due, in respect of any Debt Security of that series; (d) failure
to perform any other covenant of the Corporation in the Senior Indenture (other
than a covenant included in the Senior Indenture solely for the benefit of
series of Debt Securities other than that series), continued for 90 days after
written notice as provided in the Senior Indenture; (e) the entry of a decree or
order for relief in respect of the Corporation by a court having jurisdiction in
the premises in an involuntary case under Federal or state bankruptcy laws and
the continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; (f) the commencement by the Corporation of a voluntary
case under Federal or state bankruptcy laws or the consent by the Corporation to
the entry of a decree or order for relief in an involuntary case under any such
law; and (g) any other Event of Default provided with respect to Debt Securities
of that series (Section 501). If an Event of Default with respect to Debt
Securities of any series occurs and is continuing either the Senior Trustee or
the Holders of at least 25% in aggregate principal amount of the Outstanding
Debt Securities of that series may declare by notice in
12
<PAGE> 20
writing to the Corporation the principal amount (or, if the Debt Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Debt Securities of that series to be due and payable immediately. At any time
after a judgment or decree based on acceleration has been obtained, the Holders
of a majority in aggregate principal amount of Outstanding Debt Securities of
that series may, under certain circumstances, rescind and annul such
acceleration (Section 502).
Reference is made to the Applicable Prospectus Supplement relating to any
series of Offered Debt Securities that are Original Issue Discount Securities
for the particular provisions relating to acceleration of the Stated Maturity of
a portion of the principal amount of such series of Original Issue Discount
Securities upon the occurrence of an Event of Default and the continuation
thereof.
The Senior Indenture provides that, subject to the duty of the Senior
Trustee during default to act with the required standard of care, the Senior
Trustee will be under no obligation to exercise any of its rights or powers
under the Senior Indenture at the request or direction of any of the Holders,
unless such Holders shall have offered to the Senior Trustee reasonable security
or indemnity (Section 603). Subject to such provisions for the indemnification
of the Senior Trustee and to certain other conditions, the Holders of a majority
in aggregate principal amount of the Outstanding Debt Securities of any series
will have the right to direct the time, method and place of conducting any
proceedings for any remedy available to the Senior Trustee, or exercising any
trust or power conferred on the Senior Trustee, with respect to the Debt
Securities of that series provided that the Senior Trustee may decline to act if
such direction is contrary to law or the Senior Indenture, would unduly
prejudice the rights of other Holders or would involve the Senior Trustee in
personal liability (Section 512).
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Senior Indenture, or for the
appointment of a receiver or trustee or for any remedy thereunder, unless such
Holder shall have previously given to the Senior Trustee written notice of a
continuing Event of Default with respect to the Debt Securities of that series
and unless the Holders of not less than 25% in aggregate principal amount of the
Outstanding Debt Securities of that series shall have made written request, and
offered reasonable indemnity, to the Senior Trustee to institute such proceeding
as trustee, and the Senior Trustee shall not have received from the Holders of a
majority in principal amount of the Outstanding Debt Securities of that series a
direction inconsistent with such request and shall have failed to institute such
proceeding within 60 days (Section 507). However, the Holder of any Debt
Security will have an absolute right to receive payment of the principal of (and
premium, if any) and interest on such Debt Security on the due dates expressed
in such Debt Security and to institute suit for the enforcement of any such
payment (Section 508).
The Corporation is required to furnish to the Senior Trustee annually a
statement as to performance by the Corporation of certain of its obligations
under the Senior Indenture and as to any default in such performance (Section
1006).
The Subordinated Indenture. The Subordinated Indenture (with respect to
any series of Subordinated Debt Securities) defines an "Event of Default" as any
one of the following events (whatever the reason and whether it be occasioned by
the subordination provisions or be voluntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administration or governmental body): (a) failure to pay any
interest on any Debt Security of that series when due and payable, continued for
30 days; (b) failure to pay principal of or any premium on any Debt Security of
that series when due; (c) failure to deposit any sinking fund payment, when due,
in respect of any Debt Security of that series; (d) failure to perform any other
covenant of the Corporation in the Subordinated Indenture (other than a covenant
included in the Subordinated Indenture solely for the benefit of series of Debt
Securities other than that series), continued for 90 days after written notice
as provided in the Subordinated Indenture; (e) the entry of a decree or order
for relief in respect of the Corporation by a court having jurisdiction in the
premises in an involuntary case under Federal or state bankruptcy laws and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days; (f) the commencement by the Corporation of a voluntary case
under Federal or state bankruptcy laws or the consent by the Corporation to the
entry of a
13
<PAGE> 21
decree or order for relief in an involuntary case under any such law; and (g)
any other Event of Default provided with respect to Debt Securities of that
series (Section 501).
Unless specifically stated in the Applicable Prospectus Supplement for a
particular series of Subordinated Debt Securities, the payment of the principal
of the Subordinated Debt Securities may be accelerated only upon the occurrence
of an Event of Default described in clause (e) or clause (f) of the preceding
paragraph (a "Bankruptcy Event of Default") and there is no right of
acceleration of the payment of principal of the Subordinated Debt Securities of
such series upon a default in the payment of principal, premium, if any, or
interest, if any, or in the performance of any covenant or agreement in the
Subordinated Debt Securities or Subordinated Indenture. In the event of a
default in the payment of principal, premium, if any, or interest, if any, or in
the performance of any covenant or agreement in the Subordinated Debt Securities
or Subordinated Indenture, the Subordinated Trustee, subject to certain
limitations and conditions, may institute judicial proceedings to enforce
payment of such principal, premium, if any, or interest, if any, or to obtain
the performance of such covenant or agreement or any other proper remedy
(Section 503). Under certain circumstances, the Subordinated Trustee may
withhold notice to the Holders of the Subordinated Debt Securities of a default
if the Subordinated Trustee in good faith determines that the withholding of
such notice is in the best interest of such Holders, and the Subordinated
Trustee shall withhold such notice for certain defaults for a period of 30 days
(Section 602).
If a Bankruptcy Event of Default with respect to the Debt Securities of any
series at the time outstanding occurs and is continuing, either the Subordinated
Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of that series may declare the principal amount (or,
if the Debt Securities of that series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms thereof)
of all the Debt Securities of that series to be due and payable immediately. At
any time after a declaration of acceleration with respect to Debt Securities of
any series has been made, but before a judgment or decree based on acceleration
has been obtained, the Holders of a majority in aggregate principal amount of
Outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration (Section 502).
Reference is made to the Applicable Prospectus Supplement relating to any
series of Offered Debt Securities that are Original Issue Discount Securities
for the particular provisions relating to acceleration of the Stated Maturity of
a portion of the principal amount of such series of Original Issue Discount
Securities upon the occurrence of an Event of Default and the continuation
thereof.
The Subordinated Indenture provides that, subject to the duty of the
Subordinated Trustee during default to act with the required standard of care,
the Subordinated Trustee will be under no obligation to exercise any of its
rights or powers under the Subordinated Indenture at the request or direction of
any of the Holders, unless such Holders shall have offered to the Subordinated
Trustee reasonable security or indemnity (Section 603). Subject to such
provisions for the indemnification of the Subordinated Trustee and to certain
other conditions, the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Subordinated Trustee, or exercising any trust or power conferred on the
Subordinated Trustee, with respect to the Debt Securities of that series,
provided that the Subordinated Trustee may decline to act if such direction is
contrary to law or the Subordinated Indenture, would unduly prejudice the right
of other Holders or would involve the Subordinated Trustee in personal liability
(Section 512).
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Subordinated Indenture, or for the
appointment of a receiver or trustee or for any remedy thereunder, unless such
Holder shall have previously given the Subordinated Trustee written notice of a
continuing Event of Default with respect to the Debt Securities of that series
and unless the Holders of not less than 25% in aggregate principal amount of the
Outstanding Debt Securities of that series shall have made written request, and
offered reasonable indemnity, to the Subordinated Trustee to institute such
proceeding as trustee, and the Subordinated Trustee shall not have received from
the Holders of a majority in principal amount of the Outstanding Debt Securities
of that series a direction inconsistent with such request and shall have failed
to institute such proceeding within 60 days (Section 507). However, the Holder
of any Debt Security will have
14
<PAGE> 22
an absolute right to receive payment of the principal of (and premium, if any)
and interest on such Debt Security on the due dates expressed in such Debt
Security and to institute suit for the enforcement of any such payment (Section
508).
The Corporation is required to furnish to the Subordinated Trustee annually
a statement as to performance by the Corporation of certain of its obligations
under the Subordinated Indenture and as to any default in such performance
(Section 1005).
DEFEASANCE AND COVENANT DEFEASANCE
The Senior Indenture provides that, to the extent indicated in the
Applicable Prospectus Supplement, the Corporation, at the Corporation's option,
(a) will be discharged from any and all obligations in respect of the Senior
Debt Securities of a particular series (except for certain obligations to
register the transfer or exchange of Senior Debt Securities of such series, to
replace stolen, lost or mutilated Senior Debt Securities of such series, to
maintain paying agencies and to hold money for payment in trust) or (b) need not
comply with certain restrictive covenants of the Senior Indenture, including
those described under "Restrictions on Disposition of Voting Stock of Certain
Subsidiaries" and "Consolidation, Merger and Transfer of Assets" and the
occurrence of an event described in clause (d) under "Events of Default" under
the Senior Indenture shall no longer be an Event of Default with respect to such
series of Senior Debt Securities, in each case, if the Corporation deposits, in
trust, with the Senior Trustee money and/or Government Obligations, which
through the payment of interest thereon and principal thereof in accordance with
their terms will provide money in an amount sufficient, without reinvestment, to
pay all the principal of and any premium and interest on the Senior Debt
Securities of such series and any mandatory sinking fund payments or analogous
payments on the dates such payments are due in accordance with the terms of the
Senior Debt Securities of such series and the Senior Indenture. Such a trust may
only be established if, among other things, (i) no Event of Default or event
which with the giving of notice or lapse of time, or both, would become an Event
of Default with respect to such series under the Senior Indenture shall have
occurred and be continuing on the date of such deposit, (ii) such defeasance
will not cause the Senior Trustee to have any conflicting interest with respect
to other securities of the Corporation and (iii) the Corporation shall have
delivered an Opinion of Counsel to the effect that the Holders will not
recognize income, gain or loss for federal income tax purposes as a result of
such defeasance and will be subject to federal income tax on the same amounts,
in the same manner, and at the same times as if such defeasance had not
occurred. In the event the Corporation exercises its option to omit compliance
with certain covenants of the Senior Indenture with respect to the Senior Debt
Securities of any series and the Senior Debt Securities of such series are
declared due and payable because of the occurrence of any Event of Default under
the Senior Indenture, the amount of money and Government Obligations on deposit
with the Trustee will be sufficient to pay amounts due on the Senior Debt
Securities of such series at the time of their Stated Maturity but may not be
sufficient to pay amounts due on the Senior Debt Securities of such series at
the time of the acceleration resulting from such Event of Default under the
Senior Indenture. However, the Corporation will remain liable with respect to
such payments (Article 13).
The foregoing defeasance and covenant defeasance provisions are not for the
benefit of the Subordinated Debt Securities.
MODIFICATION AND WAIVER
Modifications to and amendments of the Indentures may be made by the
Corporation and the Trustees with the consent of the Holders of 66 2/3% in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may without the consent of the Holder of each
Outstanding Debt Security affected thereby (a) change the stated maturity date
of the principal of, or any installment of principal or interest on, any Debt
Security, (b) reduce the principal amount of, or any premium or rate of interest
on, any Debt Security, (c) reduce the amount of principal of an Original Issue
Discount Security payable upon acceleration of the maturity thereof, (d) change
the place or currency of payment of principal of, or any premium or interest on,
any Debt Security, (e) impair the right to institute suit for the enforcement of
any payment on or with respect to any Debt Security, or (f) reduce the
percentage in principal amount of Outstanding Debt Securities of any
15
<PAGE> 23
series, the consent of whose Holders is required for modification or amendment
of the Indentures or for waiver of compliance with certain provisions of the
Indentures or for waiver of certain defaults (Section 902).
The Holders of at least 66 2/3% in aggregate principal amount of the
Outstanding Debt Securities of each series may, on behalf of all Holders of Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Corporation with certain restrictive provisions of the
Indentures, including with respect to Senior Debt Securities those provisions
described above under "Restriction on Disposition of Voting Stock of Certain
Subsidiaries" (Senior Indenture Section 1007; Subordinated Indenture Section
1006). The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may, on behalf of all Holders of Debt
Securities of that series, waive any past default under the Applicable
Indenture, except a default in the payment of principal of, or any premium or
interest on, any Debt Security of that series or a default in respect of a
covenant or provision which under the Indentures cannot be modified or amended
without the consent of the Holder of each Outstanding Debt Security of the
series affected (Section 513).
CONSOLIDATION, MERGER AND TRANSFER OF ASSETS
The Corporation may consolidate with or merge into, or transfer its assets
substantially as an entirety to, any corporation organized under the laws of the
United States, any state thereof or the District of Columbia, provided that the
successor corporation assumes the Corporation's obligations on the Debt
Securities and under the Indentures, that after giving effect to the transaction
no Event of Default, and no event which, after notice or lapse of time, would
become an Event of Default, shall have occurred and be continuing, and that
certain other conditions are met (Section 801).
TRUSTEES
Either or both of the Trustees may resign or be removed with respect to one
or more series of Debt Securities and a successor Trustee may be appointed to
act with respect to such series (Section 610). In the event that two or more
persons are acting as Trustee with respect to different series of Debt
Securities, each such Trustee shall be a Trustee of a trust under the related
Indenture separate and apart from the trust administered by any other such
Trustee, and any action described herein to be taken by the "Trustee" may then
be taken by each such Trustee with respect to, and only with respect to, the one
or more series of Debt Securities for which it is Trustee (Section 611).
In the normal course of business, the Corporation and its subsidiaries
conduct banking transactions with the Trustees, and the Trustees conduct banking
transactions with the Corporation and its subsidiaries.
PLAN OF DISTRIBUTION
The Corporation may sell Debt Securities to or through underwriters to be
designated from time to time, and also may sell Debt Securities directly to
other purchasers or through agents. The distribution of the Debt Securities may
be effected from time to time in one or more transactions at a fixed price or
prices, which may be changed from time to time, at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices. Each Prospectus Supplement will describe the method of
distribution of the Offered Debt Securities.
The Debt Securities will be new issues of securities with no established
trading market and unless otherwise specified in the applicable Prospectus
Supplement, the Corporation will not list any series of the Debt Securities on
any exchange. It has not presently been established whether the underwriters, if
any, of the Debt Securities will make a market in the Debt Securities. If a
market in the Debt Securities is made by any such underwriters, such market
making may be discontinued at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Debt Securities.
In connection with the sale of Debt Securities, underwriters or agents
acting on behalf of the Corporation may receive compensation from the
Corporation or from purchasers of Debt Securities for whom they may act as
agents in the form of discounts, concessions or commissions. Underwriters may
sell Debt Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or
16
<PAGE> 24
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that participate
in the distribution of Debt Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Corporation and any profit on
the trade of Debt Securities by them may be deemed to be underwriting discounts
and commissions, under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Corporation will be
described, in the Prospectus Supplement relating to such Debt Securities.
Under agreements which may be entered into by the Corporation,
underwriters, dealers, agents and their controlling persons who participate in
the distribution of Debt Securities may be entitled to indemnification by the
Corporation against certain liabilities, including liabilities under the
Securities Act, and to certain rights of contribution from the Corporation.
If so indicated in the Prospectus Supplement relating to any Offered Debt
Securities, the Corporation will authorize underwriters or other persons acting
as the Corporation's agents to solicit offers by certain institutions to
purchase any Offered Debt Securities from the Corporation pursuant to delayed
delivery contracts providing for payment and delivery on a future date.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Corporation. The obligations of any
purchaser under any such contract will be subject to the condition that the
purchase of any Offered Debt Securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject. The underwriters and such other agents will not have any responsibility
in respect of the validity or performance of such contracts.
The participation of any affiliate of the Corporation in the offer and sale
of Offered Debt Securities will be made pursuant to and will conform with the
provisions of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc.
Underwriters or agents and their associates may be customers of (including
borrowers from), engage in transactions with, and/or perform services for, the
Corporation and its subsidiaries, the Senior Trustee and the Subordinated
Trustee, in the ordinary course of business.
LEGAL MATTERS
Certain legal matters with respect to the Offered Debt Securities will be
passed upon for the Corporation by Raymond D. Fortin, Senior Vice
President -- Legal and Corporate Secretary, and by King & Spalding, and for any
underwriters by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York. As
of December 31, 1997, Mr. Fortin beneficially owned 20,800 shares of common
stock of the Corporation and held options to purchase 3,000 shares of common
stock of the Corporation. Skadden, Arps, Slate, Meagher & Flom LLP will rely
upon the opinion of Mr. Fortin and of King & Spalding as to matters of Georgia
law.
EXPERTS
The audited consolidated financial statements incorporated by reference in
this Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated herein in reliance upon the
authority of said firm as experts in giving said report.
17
<PAGE> 25
======================================================
NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
CORPORATION OR ANY AGENT OR UNDERWRITER. THIS PROSPECTUS AND THE ACCOMPANYING
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT NOR
ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION
SINCE THE DATE HEREOF.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Corporation....................... S-2
Use of Proceeds....................... S-2
Selected Historical Financial Data.... S-3
Consolidated Ratio of Earnings to
Fixed Charges....................... S-4
Description of Senior Notes........... S-4
Underwriting.......................... S-6
Legal Matters......................... S-7
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Corporation....................... 2
Use of Proceeds....................... 3
Consolidated Ratio of Earnings to
Fixed Charges....................... 3
Certain Regulatory Considerations..... 4
Description of the Debt Securities.... 6
Plan of Distribution.................. 16
Legal Matters......................... 17
Experts............................... 17
</TABLE>
======================================================
======================================================
$300,000,000
SUNTRUST BANKS, INC.
6.25% SENIOR NOTES
DUE JUNE 1, 2008
------------
PROSPECTUS SUPPLEMENT
MAY 28, 1998
(INCLUDING PROSPECTUS
DATED FEBRUARY 24, 1998)
------------
SALOMON SMITH BARNEY
CITICORP SECURITIES, INC.
ABN AMRO INCORPORATED
SUNTRUST EQUITABLE
SECURITIES
EVEREN SECURITIES, INC.
======================================================
