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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 13, 1998
REGISTRATION NO. 333-61575
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SUNTRUST BANKS, INC.
(Exact name of registrant as specified in its charter)
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<S> <C>
GEORGIA 58-1575035
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
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303 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30308
(404) 588-7711
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
RAYMOND D. FORTIN, ESQ.
SENIOR VICE PRESIDENT
SUNTRUST BANKS, INC.
303 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30308
(404) 588-7165
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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WITH COPIES TO:
MARY A. BERNARD
KING & SPALDING
1185 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 556-2100
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement, as determined
in light of market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TO BE OFFERING PRICE AGGREGATE REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PER SECURITY(1) OFFERING PRICE(1) FEE
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Common Stock, $1.00 par value 3,000,000 $69.97 $209,910,000 $46,760(2)
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(1) Estimated pursuant to Rule 457 under the Securities Act of 1933, solely for
purposes of calculating the registration fee.
(2) The registrant has previously paid a fee of $11,594 in connection with the
initial filing of this Registration Statement. This registration fee
represents the difference between the fee previously paid and the total
registration fee due for the securities registered pursuant to this
Registration Statement.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER 13, 1998
PROSPECTUS
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SUNTRUST BANKS, INC.
COMMON STOCK
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SunTrust Banks, Inc., a Georgia corporation (the "Corporation"), may from
time to time offer and sell up to an aggregate of 3,000,000 shares of its common
stock, $1.00 par value per share ("Common Stock"). See "Description of Capital
Stock." The accompanying Prospectus Supplement sets forth, with respect to the
offering of Common Stock in respect of which this Prospectus is being delivered,
the specific number of shares of Common Stock and the issuance price per share.
The Common Stock may be sold directly by the Corporation to the public or
through agents, underwriters or dealers, or though a combination of such
methods. The accompanying Prospectus Supplement sets forth the names of any
agents, underwriters or dealers involved in the sale of the Common Stock in
respect of which this Prospectus is being delivered, the number of shares, if
any, to be purchased by any such agents, underwriters or dealers and any
applicable discounts, concessions or commitments. See "Plan of Distribution." If
the Corporation, directly or through agents, solicits offers to purchase the
Common Stock, the Corporation reserves the sole right to accept and, together
with its agents, to reject in whole or in part any proposed purchase of the
Common Stock. Any agents or underwriters, dealers participating in any 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 agents, underwriters, dealers and their
controlling persons.
The Common Stock is listed on the New York Stock Exchange under the symbol
"STI." On November 11, 1998, the last sale price of the Common Stock as reported
on the New York Stock Exchange Composite Tape was $68.88 per share. Any Common
Stock offered pursuant to this Prospectus and the accompanying Prospectus
Supplement will be listed on the New York Stock Exchange, subject to notice of
official issuance.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE THE SALE OF COMMON STOCK
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
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 NOVEMBER , 1998.
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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). Information regarding the operation of the public reference
facilities of the Commission may be obtained by calling the Commission at
1-800-SEC-0330. 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.
The Corporation has filed a registration statement on Form S-3 (together
with all amendments and exhibits thereto, the "Registration Statement") under
the Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is made to the Registration Statement and the exhibits
filed as part thereof. Statements contained herein concerning any document filed
as an exhibit are not necessarily complete and, in each instance, reference is
made to the copy of such document filed as an exhibit to the Registration
Statement. Each such statement is qualified in its entirety by such reference.
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, 1997, as amended
on November 13, 1998, (b) its Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1998, as amended on November 13, 1998, June 30, 1998, as amended
on November 13, 1998, and September 30, 1998, and (c) its Current Reports on
Form 8-K dated January 16, 1998, March 10, 1998, July 20, 1998, August 12, 1998
and November 13, 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 Common Stock made 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.
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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 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.
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.
RECENT DEVELOPMENTS
In connection with the review by the Staff of the Securities and Exchange
Commission of documents relating to the Corporation's proposed acquisition of
Crestar Financial Corporation ("Crestar"), and the Staff's comments thereon, the
Corporation has lowered its provision for loan losses in 1996, 1995 and 1994 by
$40 million, $35 million and $25 million, respectively. The effect of this
action was to increase the Corporation's net income in those years by $24.4
million, $21.4 million and $15.3 million, respectively. Further, as of December
31, 1997 and 1996, the reserve for loan losses has been decreased by a total of
$100 million and shareholders' equity has been increased by a total of $61
million. All amounts included or incorporated by reference herein have been
restated to give effect to the above adjustments. The Corporation has amended
certain of its reports filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, to reflect, among
other things, the adjustments to its historical financial statements resulting
from the foregoing. See "Available Information". All historical financial
information for the Corporation and all pro forma financial information for the
Corporation and Crestar combined included or incorporated by reference herein
have been adjusted to reflect the adjustments to the Corporation's loan loss
provision discussed above.
USE OF PROCEEDS
The Corporation currently intends to use the net proceeds from the sale of
any Common Stock for general corporate purposes, which may include refinancing
of debt, including outstanding commercial paper and other short-term
indebtedness, 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.
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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
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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 $540.1 million as of December 31, 1997.
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, 1998, the Corporation's
total risk-based capital ratio was 12.83%, including 7.49% 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,
1998, the Corporation's leverage capital ratio was 7.10%. 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
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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 CAPITAL STOCK
The Corporation is authorized by its Articles of Incorporation to issue up
to 500,000,000 shares of Common Stock, par value $1.00 per share, of which
209,568,155 shares were issued and outstanding as of October 30, 1998 and up to
50,000,000 shares of Preferred Stock, no par value, none of which were issued
and outstanding as of October 30, 1998.
COMMON STOCK
Holders of Common Stock are entitled to cast one vote for each share held
of record on all matters submitted to a vote of the Corporation's shareholders
and are not entitled to cumulate votes for the election of directors. Holders of
the Corporation's Common Stock do not have preemptive rights to subscribe for or
to purchase any additional shares of the Corporation. In the event of
liquidation, holders of Common Stock are entitled to share in the distribution
of assets remaining after payment of debts and expenses and after required
payments to holders of Preferred Stock, if any. Holders of the Corporation's
Common Stock are entitled to receive dividends when declared by the
Corporation's Board of Directors out of funds legally available therefor,
subject to the rights of the holders of Preferred Stock.
The transfer agent and registrar for the Corporation's Common Stock is
SunTrust Bank, Atlanta, Post Office Box 4625, Atlanta, Georgia 30302-4625.
PREFERRED STOCK
The Board of Directors is empowered by the Corporation's Articles of
Incorporation to designate and issue from time to time one or more series of
Preferred Stock without shareholder approval. The Board of Directors may fix and
determine the preferences, limitations and relative rights of each series of
Preferred Stock so issued. Because the Board of Directors has the power to
establish the preferences and rights of each series of Preferred Stock, it may
afford the holders of any series of Preferred Stock preferences, powers and
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rights, voting or otherwise, senior to the rights of holders of Common Stock.
The issuance of Preferred Stock could have the effect of delaying or preventing
a change in control of the Company. The Board of Directors has no present plans
to issue any shares of Preferred Stock.
CHARTER AND BYLAW PROVISIONS
Shareholders' rights and related matters are governed by the Georgia
Business Corporation Code, the Corporation's Articles of Incorporation and its
Bylaws. Certain provisions of the Articles of Incorporation and Bylaws of the
Corporation, which are summarized below, may discourage or make more difficult
any attempt by a person or group to obtain control of the Corporation.
Classified Board of Directors. The Corporation's Board of Directors is
divided into three classes of directors serving staggered three-year terms. As a
result, it will be more difficult to change the composition of the Corporation's
Board of Directors, which may discourage or make more difficult any attempt by a
person or group of persons to obtain control of the Corporation.
Shareholder Nominations. The Corporation's Bylaws require notice to the
Chairman of the Board of the Corporation, in advance of any shareholders'
meeting, of nominations by any shareholders of candidates for election as
directors. In addition, shareholders that wish to make director nominations must
provide the Corporation with certain specified information. These requirements
may have the effect of precluding director nominations if the proper procedures
are not followed and may discourage or deter a third party from conducting a
solicitation of proxies to consider matters, including issues relating to the
control of the Corporation.
Ability to Consider Other Constituencies. The Corporation's Articles of
Incorporation permit the Board of Directors, in determining what it believes to
be in the best interests of the Corporation when facing a proposed acquisition
or merger, to consider the social and economic effects on the employees,
customers, suppliers and other constituents of the Corporation, the communities
in which offices or other establishments of the Corporation are located and the
desirability of maintaining independence from any other entity, in addition to
considering the effects of any action on the Corporation or its shareholders.
Supermajority Voting Requirement. Under the Corporation's Articles of
Incorporation, certain business combinations, amendments to certain provisions
of the Corporation's Articles of Incorporation and Bylaws or the adoption or
contrary provisions and certain other matters may not be adopted or approved by
the shareholders without the affirmative vote of at least 75% of the outstanding
shares of the Common Stock, subject, in some cases, to certain further
limitations. These provisions may render it more difficult to effect a change of
control of the Corporation and, as a result, may have the effect of deterring a
tender offer or other acquisition proposal involving the Corporation.
LIMITATION OF DIRECTORS' LIABILITY
The Corporation's Articles of Incorporation eliminate, to the fullest
extent permitted by applicable law, the personal liability of directors to the
Corporation or its shareholders for monetary damages for breaches of such
Directors' duty of care or other duties as a director. This provision of the
Articles of Incorporation will limit the remedies available to a shareholder in
the event of breaches of any director's duties to such shareholder or the
Corporation. Under current Georgia law, the Articles of Incorporation do not
provide for the elimination of or any limitation on the personal liability of a
director for (i) any appropriation, in violation of the director's duties, of
any business opportunity of the Corporation, (ii) acts or omissions which
involve intentional misconduct or a knowing violation of law, (iii) unlawful
corporate distributions or (iv) any transactions from which the director
received an improper personal benefit.
GEORGIA ANTI-TAKEOVER STATUTES
The Georgia Business Corporation Code restricts certain business
combinations with interested shareholders and contains fair price requirements
applicable to certain mergers with certain "interested
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shareholders" that are summarized below. In accordance with the provisions of
these statutes, the Corporation has elected to be covered by the restrictions
imposed by these statutes.
The Georgia business combination statute regulates business combinations
such as mergers, consolidations, share exchanges and asset purchases where the
acquired business has at least 100 shareholders residing in Georgia and has its
principal office in Georgia, as the Corporation does, and where the acquiror
became an "interested shareholder" of the corporation, unless either (i) the
transaction resulting in such acquiror becoming an "interested shareholder" or
the business combination received the approval of the corporation's board of
directors prior to the date on which the acquiror became an interested
shareholder or (ii) the acquiror became the owner of at least 90% of the
outstanding voting stock of the corporation (excluding shares held by directors,
officers and affiliates of the corporation and shares held by certain other
persons) in the same transaction in which the acquiror became an interested
shareholder. For purposes of this statute, an "interested shareholder" generally
is any person who directly or indirectly, alone or in concert with others,
beneficially owns or controls 10% or more of the voting power of the outstanding
voting shares of the corporation. The law prohibits business combinations with
an unapproved interested shareholder for a period of five years after the date
on which such person became an interested shareholder. The law restricting
business combinations is broad in its scope and is designed to inhibit
unfriendly acquisitions.
The Georgia fair price statute prohibits certain business combinations
between a Georgia business corporation and an interested shareholder unless (i)
certain "fair price" criteria are satisfied, (ii) the business combination is
unanimously approved by the continuing directors, (iii) the business combination
is recommended by at least two-thirds of the continuing directors and approved
by a majority of the votes entitled to be cast by holders of voting shares,
other than voting shares beneficially owned by the interested shareholder or
(iv) the interested shareholder has been such for at least three years and has
not increased his ownership position in such three-year period by more than one
percent in any twelve month period. The fair price statute is designed to
inhibit unfriendly acquisitions that do not satisfy the specified "fair price"
requirements.
PLAN OF DISTRIBUTION
The Corporation may sell the Common Stock directly to purchasers or through
agents, underwriters or dealers. The distribution of the Common Stock may be
effected from time to time in one or more transactions at a fixed price or
prices, which may be changed, 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 Common
Stock.
In connection with the sale of the Common Stock, agents or underwriters
acting on behalf of the Corporation may receive compensation from the
Corporation or from purchasers of the Common Stock for whom they may act as
agents in the form of discounts, concessions or commissions. Underwriters may
sell the Common Stock to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agents. Agents, underwriters and dealers that participate in the distribution of
the Common Stock may be deemed to be underwriters for purposes of the Securities
Act, and any discounts, concessions or commissions received by them from the
Corporation and any profit on the resale of Common Stock 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
Common Stock.
Under agreements which may be entered into by the Corporation, agents,
underwriters, dealers and their controlling persons who participate in the
distribution of the Common Stock 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.
8
<PAGE> 10
The participation of any affiliate of the Corporation in the offer and sale
of the Common Stock 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.
Agents, underwriters or dealers and their respective affiliates may be
customers of (including borrowers from), engage in transactions with, and/or
perform services for, the Corporation and its subsidiaries in the ordinary
course of business.
LEGAL MATTERS
The validity of the Common Stock will be passed upon for the Corporation by
Raymond D. Fortin, Senior Vice President -- Legal and Corporate Secretary. As of
September 30, 1998, Mr. Fortin beneficially owned 23,000 shares of Common Stock
and held options to purchase 4,800 shares of Common Stock.
EXPERTS
The audited consolidated financial statements of the Corporation
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.
The consolidated financial statements of Crestar Financial Corporation and
Subsidiaries as of December 31, 1997 and 1996, and for each of the years in the
three-year period ended December 31, 1997, have been incorporated by reference
herein and in the Registration Statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing. The report of KPMG Peat Marwick LLP refers to their reliance on
another auditors' report with respect to amounts related to Citizens Bancorp for
1996 and 1995 included in the aforementioned consolidated financial statements.
9
<PAGE> 11
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NO DEALER, SALESMAN 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
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Corporation....................... 3
Recent Developments................... 3
Use of Proceeds....................... 3
Certain Regulatory Considerations..... 4
Description of Capital Stock.......... 6
Plan of Distribution.................. 8
Legal Matters......................... 9
Experts............................... 9
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
SUNTRUST
BANKS, INC.
------------------------------
PROSPECTUS
NOVEMBER , 1998
------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Estimated expenses in connection with the issuance and distribution of the
Common Stock being registered, other than underwriting compensation, are as
follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 58,354
Blue Sky fees and expenses.................................. 1,000
Attorneys' fees and expenses................................ 30,000
Accounting fees and expenses................................ 15,000
Printing and engraving expenses............................. 25,000
Miscellaneous expenses...................................... 12,406
--------
Total............................................. $141,760
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
PART 5 OF ARTICLE 8 OF THE GEORGIA BUSINESS CORPORATION CODE STATES:
14-2-850. PART DEFINITIONS
As used in this part, the term:
(1) "Corporation" includes any domestic or foreign predecessor entity
of a corporation in a merger or other transaction in which the
predecessor's existence ceased upon consummation of the transaction.
(2) "Director" or "officer" means an individual who is or was a
director or officer, respectively, of a corporation or who, while a
director or officer of the corporation, is or was serving at the
corporation's request as a director, officer, partner, trustee, employee,
or agent of another domestic or foreign corporation, partnership, joint
venture, trust, employee benefit plan, or other entity. A director or
officer is considered to be serving an employee benefit plan at the
corporation's request if his or her duties to the corporation also impose
duties on, or otherwise involve services by, the director or officer to the
plan or to participants in or beneficiaries of the plan. Director or
officer includes, unless the context otherwise requires, the estate or
personal representative of a director or officer.
(3) "Disinterested director" means a director who at the time of a
vote referred to in subsection (c) of Code Section 14-2-853 or a vote or
selection referred to in subsection (b) or (c) of Code Section 14-2-855 or
subsection (a) of Code Section 14-2-856 is not:
(A) A party to the proceeding; or
(B) An individual who is a party to a proceeding having a familial,
financial, professional, or employment relationship with the director
whose indemnification or advance for expenses is the subject of the
decision being made with respect to the proceeding, which relationship
would, in the circumstances, reasonably be expected to exert an
influence on the director's judgment when voting on the decision being
made.
(4) "Expenses" include counsel fees.
(5) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an employee
benefit plan), or reasonable expenses incurred with respect to a
proceeding.
(6) "Official capacity" means:
(A) When used with respect to a director, the office of director in
a corporation; and
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(B) When used with respect to an officer, as contemplated in Code
Section 14-2-857, the office in a corporation held by the officer.
Official capacity does not include service for any other domestic or
foreign corporation or any partnership, joint venture, trust, employee benefit
plan, or other entity.
(7) "Party" means an individual who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(8) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, arbitrative,
or investigative and whether formal or informal.
14-2-851. AUTHORITY TO INDEMNIFY
(a) Except as otherwise provided in this Code section, a corporation may
indemnify an individual who is a party to a proceeding because he or she is or
was a director against liability incurred in the proceeding if:
(1) Such individual conducted himself or herself in good faith; and
(2) Such individual reasonably believed:
(A) In the case of conduct in his or her official capacity, that
such conduct was in the best interests of the corporation;
(B) In all other cases, that such conduct was at least not opposed
to the best interests of the corporation; and
(C) In the case of any criminal proceeding, that the individual had
no reasonable cause to believe such conduct was unlawful.
(b) A director's conduct with respect to an employee benefit plan for a
purpose he or she believed in good faith to be in the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of subparagraph (a)(1)(B) of this Code section.
(c) The termination of a proceeding by judgment, order, settlement, or
conviction or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of conduct
described in this Code section.
(d) A corporation may not indemnify a director under this Code section:
(1) In connection with a proceeding by or in the right of the
corporation, except for reasonable expenses incurred in connection with the
proceeding if it is determined that the director has met the relevant
standard of conduct under this Code section; or
(2) In connection with any proceeding with respect to conduct for
which he was adjudged liable on the basis that personal benefit was
improperly received by him, whether or not involving action in his official
capacity.
14-2-852. MANDATORY INDEMNIFICATION
A corporation shall indemnify a director who was wholly successful, on the
merits or otherwise, in the defense of any proceeding to which he or she was a
party because he or she was a director of the corporation against reasonable
expenses incurred by the director in connection with the proceeding.
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<PAGE> 14
14-2-853. ADVANCE FOR EXPENSES
(a) A corporation may, before final disposition of a proceeding, advance
funds to pay for or reimburse the reasonable expenses incurred by a director who
is a party to a proceeding because he or she is a director if he or she delivers
to the corporation:
(1) A written affirmation of his or her good faith belief that he or
she has met the relevant standard of conduct described in Code Section
14-2-851 or that the proceeding involves conduct for which liability has
been eliminated under a provision of the articles of incorporation as
authorized by paragraph (4) of subsection (b) of Code Section 14-2-202; and
(2) His or her written undertaking to repay any funds advanced if it
is ultimately determined that the director is not entitled to
indemnification under this part.
(b) The undertaking required by paragraph (2) of subsection (a) of this
Code section must be an unlimited general obligation of the director but need
not be secured and may be accepted without reference to the financial ability of
the director to make repayment.
(c) Authorizations under this Code section shall be made:
(1) By the board of directors:
(A) When there are two or more disinterested directors, by a
majority vote of all the disinterested directors (a majority of whom
shall for such purpose constitute a quorum) or by a majority of the
members of a committee of two or more disinterested directors appointed
by such a vote; or
(B) When there are fewer than two disinterested directors, by the
vote necessary for action by the board in accordance with subsection (c)
of Code Section 14-2-824, in which authorization directors who do not
qualify as disinterested directors may participate; or
(2) By the shareholders, but shares owned or voted under the control
of a director who at the time does not qualify as a disinterested director
with respect to the proceeding may not be voted on the authorization.
14-2-854. COURT-ORDERED INDEMNIFICATION AND ADVANCES FOR EXPENSES
(a) A director who is a party to a proceeding because he or she is a
director may apply for indemnification or advance for expenses to the court
conducting the proceeding or to another court of competent jurisdiction. After
receipt of an application and after giving any notice it considers necessary,
the court shall:
(1) Order indemnification or advance for expenses if it determines
that the director is entitled to indemnification under this part; or
(2) Order indemnification or advance for expenses if it determines, in
view of all the relevant circumstances, that it is fair and reasonable to
indemnify the director or to advance expenses to the director, even if the
director has not met the relevant standard of conduct set forth in
subsections (a) and (b) of Code Section 14-2-851, failed to comply with
Code Section 14-2-853, or was adjudged liable in a proceeding referred to
in paragraph (1) or (2) of subsection (d) of Code Section 14-2-851, but if
the director was adjudged so liable, the indemnification shall be limited
to reasonable expenses incurred in connection with the proceeding.
(b) If the court determines that the director is entitled to
indemnification or advance for expenses under this part, it may also order the
corporation to pay the director's reasonable expenses to obtain court-ordered
indemnification or advance for expenses.
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<PAGE> 15
14-2-855. DETERMINATION AND AUTHORIZATION OF INDEMNIFICATION
(a) A corporation may not indemnify a director under Code Section 14-2-851
unless authorized thereunder and a determination has been made for a specific
proceeding that indemnification of the director is permissible in the
circumstances because he or she has met the relevant standard of conduct set
forth in Code Section 14-2-851.
(b) The determination shall be made:
(1) If there are two or more disinterested directors, by the board of
directors by a majority vote of all the disinterested directors (a majority
of whom shall for such purpose constitute a quorum) or by a majority of the
members of a committee of two or more disinterested directors appointed by
such a vote;
(2) By special legal counsel:
(A) Selected in the manner prescribed in paragraph (1) of this
subsection; or
(B) If there are fewer than two disinterested directors, selected
by the board of directors (in which selection directors who do not
qualify as disinterested directors may participate); or
(3) By the shareholders, but shares owned by or voted under the
control of a director who at the time does not qualify as a disinterested
director may not be voted on the determination.
(c) Authorization of indemnification or an obligation to indemnify and
evaluation as to reasonableness of expenses shall be made in the same manner as
the determination that indemnification is permissible, except that if there are
fewer than two disinterested directors or if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under subparagraph
(b)(2)(B) of this Code section to select special legal counsel.
14-2-856. SHAREHOLDER APPROVED INDEMNIFICATION
(a) If authorized by the articles of incorporation or a bylaw, contract, or
resolution approved or ratified by the shareholders by a majority of the votes
entitled to be cast, a corporation may indemnify or obligate itself to indemnify
a director made a party to a proceeding including a proceeding brought by or in
the right of the corporation, without regard to the limitations in other Code
sections of this part, but shares owned or voted under the control of a director
who at the time does not qualify as a disinterested director with respect to any
existing or threatened proceeding that would be covered by the authorization may
not be voted on the authorization.
(b) The corporation shall not indemnify a director under this Code section
for any liability incurred in a proceeding in which the director is adjudged
liable to the corporation or is subjected to injunctive relief in favor of the
corporation:
(1) For any appropriation, in violation of the director's duties, of
any business opportunity of the corporation;
(2) For acts or omissions which involve intentional misconduct or a
knowing violation of law;
(3) For the types of liability set forth in Code Section 14-2-832; or
(4) For any transaction from which he or she received an improper
personal benefit.
(c) Where approved or authorized in the manner described in subsection (a)
of this Code section, a corporation may advance or reimburse expenses incurred
in advance of final disposition of the proceeding only if:
(1) The director furnishes the corporation a written affirmation of
his or her good faith belief that his or her conduct does not constitute
behavior of the kind described in subsection (b) of this Code section; and
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<PAGE> 16
(2) The director furnishes the corporation a written undertaking,
executed personally or on his or her behalf, to repay any advances if it is
ultimately determined that the director is not entitled to indemnification
under this Code section.
14-2-857. INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND AGENTS
(a) A corporation may indemnify and advance expenses under this part to an
officer of the corporation who is a party to a proceeding because he or she is
an officer of the corporation:
(1) To the same extent as a director; and
(2) If he or she is not a director, to such further extent as may be
provided by the articles of incorporation, the bylaws, a resolution of the
board of directors, or contract except for liability arising out of conduct
that constitutes:
(A) Appropriation, in violation of his or her duties, of any
business opportunity of the corporation;
(B) Acts or omissions which involve intentional misconduct, or a
knowing violation of law;
(C) The types of liability set forth in Code Section 14-2-832; or
(D) Receipt of an improper personal benefit.
(b) The provisions of paragraph (2) of subsection (a) of this Code section
shall apply to an officer who is also a director if the sole basis on which he
or she is made a party to the proceeding is an act or omission solely as an
officer.
(c) An officer of the corporation who is not a director is entitled to
mandatory indemnification under Code Section 14-2-852, and may apply to a court
under Code Section 14-2-854 for indemnification or advances for expenses, in
each case to the same extent to which a director may be entitled to
indemnification or advances for expenses under those provisions.
(d) A corporation may also indemnify and advance expenses to an employee or
agent who is not a director to the extent, consistent with public policy, that
may be provided by its articles of incorporation, bylaws, general or specific
action of its board of directors, or contract.
14-2-858. INSURANCE
A corporation may purchase and maintain insurance on behalf of an
individual who is a director, officer, employee, or agent of the corporation or
who, while a director, officer, employee, or agent of the corporation, serves at
the corporation's request as a director, officer, partner, trustee, employee, or
agent of another domestic or foreign corporation, partnership, joint venture,
trust, employee benefit plan, or other entity against liability asserted against
or incurred by him or her in that capacity or arising from his or her status as
a director, officer, employee, or agent, whether or not the corporation would
have power to indemnify or advance expenses to him or her against the same
liability under this part.
14-2-859. APPLICATION OF PART
(a) A corporation may, by a provision in its articles of incorporation or
bylaws or in a resolution adopted or a contract approved by its board of
directors or shareholders, obligate itself in advance of the act or omission
giving rise to a proceeding to provide indemnification or advance funds to pay
for or reimburse expenses consistent with this part. Any such obligatory
provision shall be deemed to satisfy the requirements for authorization referred
to in subsection (c) of Code Section 14-2-853 or subsection (c) of Code Section
14-2-855. Any such provision that obligates the corporation to provide
indemnification to the fullest extent permitted by law shall be deemed to
obligate the corporation to advance funds to pay for or reimburse expenses in
accordance with Code Section 14-2-853 to the fullest extent permitted by law,
unless the provision specifically provides otherwise.
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(b) Any provision pursuant to subsection (a) of this Code section shall not
obligate the corporation to indemnify or advance expenses to a director of a
predecessor of the corporation, pertaining to conduct with respect to the
predecessor, unless otherwise specifically provided. Any provision for
indemnification or advance for expenses in the articles of incorporation,
bylaws, or a resolution of the board of directors or shareholders, partners, or,
in the case of limited liability companies, members or managers of a predecessor
of the corporation or other entity in a merger or in a contract to which the
predecessor is a party, existing at the time the merger takes effect, shall be
governed by paragraph (3) of subsection (a) of Code Section 14-2-1106.
(c) A corporation may, by a provision in its articles of incorporation,
limit any of the rights to indemnification or advance for expenses created by or
pursuant to this part.
(d) This part does not limit a corporation's power to pay or reimburse
expenses incurred by a director or an officer in connection with his or her
appearance as a witness in a proceeding at a time when he or she is not a party.
(e) Except as expressly provided in Code Section 14-2-857, this part does
not limit a corporation's power to indemnify, advance expenses to, or provide or
maintain insurance on behalf of an employee or agent.
ARTICLES OF INCORPORATION AUTHORITY
Article 14 of the Corporation's Articles of Incorporation provides:
In addition to any powers provided by law, in the Bylaws, or
otherwise, the Corporation shall have the power to indemnify any person who
becomes a party or who is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including any action by or in the right of
the Corporation), by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise.
BYLAW AUTHORITY
Article VII of the Corporation's Bylaws provides:
SECTION 1. DEFINITIONS As used in this Article, the term:
(A) "Corporation" includes any domestic or foreign predecessor entity
of this Corporation in a merger or other transaction in which the
predecessor's existence ceased upon consummation of the transaction.
(B) "Director" means an individual who is or was a director of the
Corporation or an individual who, while a director of the Corporation, is
or was serving at the Corporation's request as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or
other entity. A "director" is considered to be serving an employee benefit
plan at the Corporation's request if his duties to the Corporation also
impose duties on, or otherwise involve services by, him to the plan or to
participants in or beneficiaries of the plan. "Director" includes, unless
the context requires otherwise, the estate or personal representative of a
director.
(C) "Disinterested director" means a director who at the time of a
vote referred to in Section 3(C) or a vote or selection referred to in
Section 4(B), 4(C) or 7(A) is not: (i) a party to the proceeding; or (ii)
an individual who is a party to a proceeding having a familial, financial,
professional, or employment relationship with the director whose
indemnification or advance for expenses is the subject of the decision
being made with respect to the proceeding, which relationship would, in the
circumstances, reasonably be expected to exert an influence on the
director's judgment when voting on the decision being made.
(D) "Employee" means an individual who is or was an employee of the
Corporation or an individual who, while an employee of the Corporation, is
or was serving at the Corporation's request as a
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<PAGE> 18
director, officer, partner, trustee, employee, or agent of another foreign
or domestic corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise. An "Employee" is considered to be
serving an employee benefit plan at the Corporation's request if his duties
to the Corporation also impose duties on, or otherwise involve services by,
him to the plan or to participants in or beneficiaries of the plan.
"Employee" includes, unless the context requires otherwise, the estate or
personal representative of an employee.
(E) "Expenses" includes counsel fees.
(F) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an employee
benefit plan), or reasonable expenses incurred with respect to a
proceeding.
(G) "Officer" means an individual who is or was an officer of the
Corporation which for purposes of this Article VII shall include an
assistant officer, or an individual who, while an Officer of the
Corporation, is or was serving at the Corporation's request as a director,
officer, partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, employee benefit
plan, or other entity. An "Officer" is considered to be serving an employee
benefit plan at the Corporation's request if his duties to the Corporation
also impose duties on, or otherwise involve services by, him to the plan or
to participants in or beneficiaries of the plan. "Officer" includes, unless
the context requires otherwise, the estate or personal representative of an
Officer.
(H) "Official capacity" means: (i) when used with respect to a
director, the office of a director in a corporation; and (ii) when used
with respect to an Officer, the office in a corporation held by the
Officer. Official capacity does not include service for any other domestic
or foreign corporation or any partnership, joint venture, trust, employee
benefit plan, or other entity.
(I) "Party" means an individual who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(J) "Proceeding" means any threatened, pending or completed action,
suit, or proceeding, whether civil, criminal, administrative, arbitrative
or investigative and whether formal or informal.
SECTION 2. BASIC INDEMNIFICATION ARRANGEMENT
(A) Except as provided in subsections 2(D) and 2(E) below and, if
required by Section 4 below, upon a determination pursuant to Section 4 in
the specific case that such indemnification is permissible in the
circumstances under this subsection because the individual has met the
standard of conduct set forth in this subsection (A), the Corporation shall
indemnify an individual who is made a party to a proceeding because he is
or was a director or Officer against liability incurred by him in the
proceeding if he conducted himself in good faith and, in the case of
conduct in his official capacity, he reasonably believed such conduct was
in the best interest of the Corporation, or in all other cases, he
reasonably believed such conduct was at least not opposed to the best
interests of the Corporation and, in the case of any criminal proceeding,
he had no reasonable cause to believe his conduct was unlawful.
(B) A person's conduct with respect to an employee benefit plan for a
purpose he believes in good faith to be in the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of subsection 2(A) above.
(C) The termination of a proceeding by judgment, order, settlement, or
conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the proposed indemnitee did not meet the
standard of conduct set forth in subsection 2(A) above.
(D) The Corporation shall not indemnify a person under this Article in
connection with (i) a proceeding by or in the right of the Corporation,
except for reasonable expenses incurred in connection with the proceeding
if it is determined that such person has met the relevant standard of
conduct under this section, or (ii) with respect to conduct for which such
person was adjudged liable on the basis that personal benefit was
improperly received by him, whether or not involving action in his official
capacity.
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SECTION 3. ADVANCES FOR EXPENSES
(A) The Corporation may advance funds to pay for or reimburse the
reasonable expenses incurred by a director or Officer who is a party to a
proceeding because he is a director or Officer in advance of final
disposition of the proceeding if: (i) such person furnishes the Corporation
a written affirmation of his good faith belief that he has met the relevant
standard of conduct set forth in subsection 2(A) above or that the
proceeding involves conduct for which liability has been eliminated under
the Corporation's Articles of Incorporation; and (ii) such person furnishes
the Corporation a written undertaking meeting the qualifications set forth
below in subsection 3(B), executed personally or on his behalf, to repay
any funds advanced if it is ultimately determined that he is not entitled
to any indemnification under this Article or otherwise.
(B) The undertaking required by subsection 3(A)(ii) above must be an
unlimited general obligation of the director or Officer but need not be
secured and shall be accepted without reference to financial ability to
make repayment.
(C) Authorizations under this Section shall be made: (i) By the Board
of Directors: (a) when there are two or more disinterested directors, by a
majority vote of all disinterested directors (a majority of whom shall for
such purpose constitute a quorum) or by a majority of the members of a
committee of two or more disinterested directors appointed by such a vote;
or (b) when there are fewer than two disinterested directors, by a majority
of the directors present, in which authorization directors who do not
qualify as disinterested directors may participate; or (ii) by the
shareholders, but shares owned or voted under the control of a director who
at the time does not qualify as a disinterested director with respect to
the proceeding may not be voted on the authorization.
SECTION 4. AUTHORIZATION OF AND DETERMINATION OF ENTITLEMENT TO
INDEMNIFICATION
(A) The Corporation shall not indemnify a director or Officer under
Section 2 above unless authorized thereunder and a determination has been
made for a specific proceeding that indemnification of such person is
permissible in the circumstances because he has met the relevant standard
of conduct set forth in subsection 2(A) above; provided, however, that
regardless of the result or absence of any such determination, to the
extent that a director or Officer has been wholly successful, on the merits
or otherwise, in the defense of any proceeding to which he was a party
because he is or was a director or Officer, the Corporation shall indemnify
such person against reasonable expenses incurred by him in connection
therewith.
(B) The determination referred to in subsection 4(A) above shall be
made:
(i) If there are two or more disinterested directors, by the board
of directors by a majority vote of all the disinterested directors (a
majority of whom shall for such purpose constitute a quorum) or by a
majority of the members of a committee of two or more disinterested
directors appointed by such a vote;
(ii) by special legal counsel:
(1) selected by the Board of Directors or its committee in the
manner prescribed in subdivision (i); or
(2) if there are fewer than two disinterested directors,
selected by the Board of Directors (in which selection directors who
do not qualify as disinterested directors may participate); or
(iii) by the shareholders; but shares owned by or voted under the
control of a director who at the time does not qualify as a
disinterested director may not be voted on the determination.
(C) Authorization of indemnification or an obligation to indemnify and
evaluation as to reasonableness of expenses of a director or Officer in the
specific case shall be made in the same manner as the determination that
indemnification is permissible, as described in subsection 4(B) above,
except that if there are fewer than two disinterested directors or if the
determination is made by special legal counsel,
II-8
<PAGE> 20
authorization of indemnification and evaluation as to reasonableness of
expenses shall be made by those entitled under subsection 4(B)(ii)(2) above
to select counsel.
(D) The Board of Directors, a committee thereof, or special legal
counsel acting pursuant to subsection (B) above or Section 5 below, shall
act expeditiously upon an application for indemnification or advances, and
cooperate in the procedural steps required to obtain a judicial
determination under Section 5 below.
(E) The Corporation may, by a provision in its Articles of
Incorporation or Bylaws or in a resolution adopted or a contract approved
by its Board of Directors or shareholders, obligate itself in advance of
the act or omission giving rise to a proceeding to provide indemnification
or advance funds to pay for or reimburse expenses consistent with this
part. Any such obligatory provision shall be deemed to satisfy the
requirements for authorization referred to in Section 3(C) or Section 4(C).
SECTION 5. COURT-ORDERED INDEMNIFICATION AND ADVANCES FOR EXPENSES. A
director or Officer who is a party to a proceeding because he is a director or
Officer may apply for indemnification or advances for expenses to the court
conducting the proceeding or to another court of competent jurisdiction. After
receipt of an application and after giving any notice it considers necessary,
the court shall order indemnification or advances for expenses if it determines
that:
(i) The director is entitled to indemnification under this part; or
(ii) In view of all the relevant circumstances, it is fair and
reasonable to indemnify the director or Officer or to advance expenses to
the director or Officer, even if the director or Officer has not met the
relevant standard of conduct set forth in subsection 2(A) above, failed to
comply with Section 3, or was adjudged liable in a proceeding referred to
in subsections (i) or (ii) of Section 2(D), but if the director or Officer
was adjudged so liable, the indemnification shall be limited to reasonable
expenses incurred in connection with the proceeding, unless the Articles of
Incorporation of the Corporation or a Bylaw, contract or resolution
approved or ratified by shareholders pursuant to Section 7 below provides
otherwise.
If the court determines that the director or Officer is entitled to
indemnification or advance for expenses, it may also order the Corporation to
pay the director's or Officer's reasonable expenses to obtain court-ordered
indemnification or advance for expenses.
SECTION 6. INDEMNIFICATION OF OFFICERS AND EMPLOYEES
(A) Unless the Corporation's Articles of Incorporation provide
otherwise, the Corporation shall indemnify and advance expenses under this
Article to an employee of the Corporation who is not a director or Officer
to the same extent, consistent with public policy, as to a director or
Officer.
(B) The Corporation may indemnify and advance expenses under this
Article to an Officer of the Corporation who is a party to a proceeding
because he is an Officer of the Corporation: (i) to the same extent as a
director; and (ii) if he is not a director, to such further extent as may
be provided by the Articles of Incorporation, the Bylaws, a resolution of
the Board of Directors, or contract except for liability arising out of
conduct that is enumerated in subsections (A)(i) through (A)(iv) of Section
7.
The provisions of this Section shall also apply to an Officer who is also a
director if the sole basis on which he is made a party to the proceeding is an
act or omission solely as an Officer.
SECTION 7. SHAREHOLDER APPROVED INDEMNIFICATION
(A) If authorized by the Articles of Incorporation or a Bylaw,
contract or resolution approved or ratified by shareholders of the
Corporation by a majority of the votes entitled to be cast, the Corporation
may indemnify or obligate itself to indemnify a person made a party to a
proceeding, including a proceeding brought by or in the right of the
Corporation, without regard to the limitations in other sections of this
Article, but shares owned or voted under the control of a director who at
the time does not qualify as a disinterested director with respect to any
existing or threatened proceeding that would be covered by the
authorization may not be voted on the authorization. The Corporation shall
not indemnify
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<PAGE> 21
a person under this Section 7 for any liability incurred in a proceeding in
which the person is adjudged liable to the Corporation or is subjected to
injunctive relief in favor of the Corporation:
(i) for any appropriation, in violation of his duties, of any
business opportunity of the Corporation;
(ii) for acts or omissions which involve intentional misconduct or
a knowing violation of law;
(iii) for the types of liability set forth in Section 14-2-832 of
the Georgia Business Corporation Code; or
(iv) for any transaction from which he received an improper
personal benefit.
(B) Where approved or authorized in the manner described in subsection
7(A) above, the Corporation may advance or reimburse expenses incurred in
advance of final disposition of the proceeding only if:
(i) the proposed indemnitee furnishes the Corporation a written
affirmation of his good faith belief that his conduct does not
constitute behavior of the kind described in subsection 7(A)(i)-(iv)
above; and
(ii) the proposed indemnitee furnishes the Corporation a written
undertaking, executed personally, or on his behalf, to repay any
advances if it is ultimately determined that he is not entitled to
indemnification.
SECTION 8. LIABILITY INSURANCE. The Corporation may purchase and maintain
insurance on behalf of an individual who is a director, officer, employee, or
agent of the Corporation or who, while a director, officer, employee, or agent
of the Corporation, is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, employee benefit plan,
or other entity against liability asserted against or incurred by him in that
capacity or arising from his status as a director, officer, employee, or agent,
whether or not the Corporation would have power to indemnify him against the
same liability under Section 2 or Section 3 above.
SECTION 9. WITNESS FEES. Nothing in this Article shall limit the
Corporation's power to pay or reimburse expenses incurred by a person in
connection with his appearance as a witness in a proceeding at a time when he is
not a party.
SECTION 10. REPORT TO SHAREHOLDERS. If the Corporation indemnifies or
advances expenses to a director in connection with a proceeding by or in the
right of the Corporation, the Corporation shall report the indemnification or
advance, in writing, to shareholders with or before the notice of the next
shareholders' meeting.
SECTION 11. SEVERABILITY. In the event that any of the provisions of this
Article (including any provision within a single section, subsection, division
or sentence) is held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, the remaining provisions of this Article shall remain
enforceable to the fullest extent permitted by law.
SECTION 12. INDEMNIFICATION NOT EXCLUSIVE. The rights of indemnification
provided in this Article VII shall be in addition to any rights which any such
director, Officer, employee or other person may otherwise be entitled by
contract or as a matter of law.
UNDERWRITING AGREEMENT
Pursuant to the form of underwriting agreement, incorporated by reference
as Exhibit 1 to this Registration Statement, the Corporation has agreed to
indemnify the underwriters, if any, against certain liabilities under federal
and state securities laws.
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<PAGE> 22
INSURANCE
The Corporation has purchased a policy of directors and officers liability
(including company reimbursement coverage) insurance that provides certain
coverage for the Registrant and its subsidiaries and their respective directors
and officers with respect to, among other things, liability under federal and
state securities laws.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S> <C>
1** -- Form of Underwriting Agreement.
5 -- Opinion of Raymond D. Fortin, General Counsel of the
Corporation, as to the legality of the securities being
registered.
23.1* -- Consent of Arthur Andersen LLP.
23.2* -- Consent of KPMG Peat Marwick LLP.
23.3* -- Consent of Deloitte & Touche LLP.
23.4 -- Consent of Raymond D. Fortin, Counsel of the Corporation
(included in Exhibit 5).
24.1* -- Power of Attorney (set forth on the signature page of the
Registration Statement).
</TABLE>
- ---------------
* Previously filed
** To be filed by amendment or incorporated by reference
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar volume of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume or price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-11
<PAGE> 23
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, SunTrust Banks,
Inc. certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Amendment No. 1
to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Atlanta, State of Georgia, on the 13th
day of November, 1998.
SUNTRUST BANKS, INC.
By: /s/ L. PHILLIP HUMANN
------------------------------------
L. Phillip Humann
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Chairman of the Board and November 13, 1998
- ----------------------------------------------------- Chief Executive Officer
L. Phillip Humann
* Executive Vice President and November 13, 1998
- ----------------------------------------------------- Chief Financial Officer
John W. Spiegel
* Senior Vice President and November 13, 1998
- ----------------------------------------------------- Chief Accounting Officer
William P. O'Halloran
* Director November 13, 1998
- -----------------------------------------------------
J. Hyatt Brown
* Director November 13, 1998
- -----------------------------------------------------
A.W. Dahlberg
* Director November 13, 1998
- -----------------------------------------------------
Alston D. Correll
* Director November 13, 1998
- -----------------------------------------------------
Summerfield K. Johnston, Jr.
* Director November 13, 1998
- -----------------------------------------------------
David H. Hughes
* Director November 13, 1998
- -----------------------------------------------------
M. Douglas Invester
* Director November 13, 1998
- -----------------------------------------------------
Joseph L. Lanier, Jr.
</TABLE>
II-13
<PAGE> 25
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director November 13, 1998
- -----------------------------------------------------
Larry L. Prince
* Director November 13, 1998
- -----------------------------------------------------
Scott L. Probasco, Jr.
* Director November 13, 1998
- -----------------------------------------------------
R. Randall Rollins
* Director November 13, 1998
- -----------------------------------------------------
James B. Williams
*By: /s/ RAYMOND D. FORTIN
-----------------------------------------------
Raymond D. Fortin
Attorney-in-Fact
</TABLE>
II-14
<PAGE> 1
EXHIBIT 5
November 13, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Registration of 3,000,000 Shares of Common Stock
Ladies and Gentlemen:
I have acted as counsel for SunTrust Banks, Inc., a Georgia corporation
("SunTrust"), in connection with the registration pursuant to a registration
statement (No. 333-61575) on Form S-3 (the "Registration Statement") filed on
August 14, 1998 by SunTrust with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Act"), of 3,000,000 shares of
common stock, par value $1.00 per share, of SunTrust (the "Common Stock"), to
be sold directly by SunTrust to the public or through agents, underwriters or
dealers, or through a combination of such methods.
In so acting, I have examined and relied upon the accuracy of original,
certified, conformed or photographic copies of such records, agreements,
certificates and other documents as I have deemed necessary or appropriate to
enable me to render the opinions set forth below. In all such examination, I
have assumed the genuineness of signatures on original documents and the
conformity to such original documents of all copies submitted to me as
certified, conformed or photographic copies and, as to certificates of public
officials, I have assumed the same to have been properly given and to be
accurate.
This opinion is limited in all respects to the laws of the State of
Georgia, and no opinion is expressed with respect to the laws of any other
jurisdiction or any effect that such laws may have on the opinions expressed
herein. This opinion is limited to the matters stated herein, and no opinion is
implied or may be inferred beyond the matters expressly stated herein.
Based upon the foregoing, I am of the opinion that:
(i) SunTrust has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Georgia; and
<PAGE> 2
(ii) The shares of Common Stock to be issued and sold by SunTrust
are duly authorized and, when such shares are issued against payment
therefor, will be validly issued, fully paid and nonassessable.
This opinion is given as of the date hereof, and I assume no obligation to
update this opinion to reflect any fact or circumstance that may hereafter come
to my attention or any change in any law or regulation that may hereafter occur.
I consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to me under the caption "Legal Matters" in the
prospectus that forms a part thereof. In giving such consent, I do not thereby
admit that I am in the category of persons whose consent is required under
Section 7 of the Act.
Sincerely,
/s/ Raymond D. Fortin
----------------------------------------
Name: Raymond D. Fortin
Title: Senior Vice President and
Corporate Secretary
2
