SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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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GEORGIA 58-1575035
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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)
COPIES TO:
MARY A. BERNARD SUSAN J. SUTHERLAND
KING & SPALDING SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
1185 AVENUE OF THE AMERICAS FOUR TIMES SQUARE
NEW YORK, NEW YORK 10036 NEW YORK, NEW YORK 10036
(212) 556-2100 (212) 735-3000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement, as determined
by 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, please 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
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(3) OFFERING PRICE(3) FEE
Debt securities........... $1,000,000,000 100% $1,000,000,000 $92,000
(1)(2)
(1) Plus such additional principal amount as may be necessary such that, if
debt securities are issued with an original issue discount, the aggregate
initial offering price of all debt securities will equal $1,000,000,000.
(2) Does not include an additional $300,000,000 of debt securities that remain
unsold under the registrant's registration statement (No. 333-61583). A
registration fee of $75,000 for such unsold debt securities was previously
paid upon the filing of such registration statement.
(3) Estimated pursuant to Rule 457 under the Securities Act of 1933 solely for
the purpose of calculating the registration fee.
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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS
INCLUDED IN THIS REGISTRATION STATEMENT IS A COMBINED PROSPECTUS RELATING ALSO
TO REGISTRATION STATEMENT NO. 333-61583 PREVIOUSLY FILED BY THE REGISTRANT ON
FORM S-3 AND DECLARED EFFECTIVE ON NOVEMBER 13, 1998 (AS AMENDED BY
POST-EFFECTIVE AMENDMENT NO. 1 THERETO, WHICH WAS DECLARED EFFECTIVE ON JUNE 19,
2000). THIS REGISTRATION STATEMENT, WHICH IS A NEW REGISTRATION STATEMENT, ALSO
CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 2 TO REGISTRATION STATEMENT NO.
333-61583, AND SUCH POST-EFFECTIVE AMENDMENT NO. 2 SHALL HEREAFTER BECOME
EFFECTIVE CONCURRENTLY WITH THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT.
SUBJECT TO COMPLETION, DATED APRIL 16, 2002
$1,300,000,000
SUNTRUST BANKS, INC.
DEBT SECURITIES
We may offer from time to time up to $1,300,000,000 of debt securities. We
will provide the specific terms of these securities in supplements to this
prospectus. You should read this prospectus and the accompanying prospectus
supplement carefully before you invest.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The debt securities will be our unsecured obligations, will not be saving
accounts, deposits or other obligations of ours or any of our subsidiaries and
will not be insured by the Federal Deposit Insurance Corporation, the bank
insurance fund or any other governmental agency or instrumentality.
The date of this prospectus is __________
ABOUT THIS PROSPECTUS
This prospectus is a part of a registration statement that we filed with the
SEC using a "shelf" registration process. Under this shelf process, we may sell
debt securities in one or more offerings up to a total dollar amount of
$1,300,000,000. This prospectus provides you with a general description of the
debt securities. Each time we sell debt securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read this prospectus and the applicable
prospectus supplement together with the additional information described under
the heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file with the SEC at its public reference facilities at 450
Fifth Street, N.W., Washington, D.C. 20549, 233 Broadway, New York, New York
10279 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. You can also obtain copies of the documents at prescribed
rates by writing to the Public Reference Section of the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference facilities. Our SEC filings
are also available at the office of the New York Stock Exchange. For further
information on obtaining copies of our public filings at the New York Stock
Exchange, you should call (212) 656-5060.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with them, which means that we can disclose important
information to you by referring to those documents. The information incorporated
by reference is an important part of this prospectus and information that we
subsequently file with the SEC will automatically update and supercede
information in this prospectus and in our other filings with the SEC. We
incorporate by reference the documents listed below, which we have already filed
with the SEC, and any future filings we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until we sell all the
debt securities offered by this prospectus:
- Annual Report on Form 10-K for the year ended December 31, 2001;
- Annual Report on Form 10-K/A for the year ended December 31, 2001;
- Current Report on Form 8-K dated February 19, 2002; and
- Current Report on Form 8-K/A dated March 20, 2002.
You may request a copy of these filings (other than an exhibit to a filing
unless that exhibit is specifically incorporated by reference into that filing)
at no cost, by writing or calling us at the following address:
SunTrust Banks, Inc.
303 Peachtree Street, N.E.
Atlanta, Georgia 30308
(404) 658-4879
Attention: Gary Peacock, Jr.
Senior Vice President
We have also filed a registration statement (No. 333-_____) with the SEC
relating to the debt securities offered by this prospectus. This prospectus is
part of the registration statement. You may obtain from the SEC a copy of the
registration statement and exhibits that we filed with the SEC when we
registered the debt securities. The registration statement may contain
additional information that may be important to you.
You should rely only on the information contained or incorporated by
reference in this prospectus and the applicable prospectus supplement. We have
not authorized anyone else to provide you with additional or different
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information. We may only use this prospectus to sell debt securities if it is
accompanied by a prospectus supplement. We are only offering these debt
securities in states where the offer is permitted. You should not assume that
the information in this prospectus or the applicable prospectus supplement is
accurate as of any date other than the dates on the front of those documents.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements within the meaning of
the federal securities laws. We may also make forward-looking statements in
reports filed with the SEC that we incorporate by reference in this prospectus
or in the accompanying prospectus supplement. Statements that are not historical
facts, including statements about our beliefs and expectations, are
forward-looking statements. Forward-looking statements include statements
preceded by, followed by or that include the words "believes," "expects,"
"anticipates," "plans," "estimates" or similar expressions. These statements are
based on beliefs and assumptions of our management, and on information currently
available to our management.
Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties and assumptions. We caution you that a number of important
factors could cause actual results to differ materially from those contained in
any forward-looking statement. Many of these factors are beyond our ability to
control or predict. Such factors include, but are not limited to, the following:
- competitive pressures among depository and other financial
institutions may increase significantly;
- changes in the interest rate environment may reduce margins;
- changes in general economic or business conditions in the geographic
regions and industries in which we operate may lead to a deterioration
in credit quality or reduced demand for credit;
- domestic or international military or terrorist activities or
conflicts may adversely impact general economic conditions in affected
areas;
- legislative or regulatory changes, including changes in accounting
standards, may adversely affect the business in which we are engaged;
- changes may occur in the securities markets;
- our competitors may have greater financial resources and develop
products that enable them to compete more successfully than we do;
- our ability to develop competitive new products and services and the
acceptance of such products and services by our customers may impact
our results of operations;
- changes in consumer spending and saving habits may impact demand for
our products and services;
- changes in competitors' pricing policies may affect our business;
- our ability to manage the costs associated with expanding existing
distribution channels and developing new ones and to increase revenues
from such distribution channels may affect our margins; and
- the effect of corporate restructurings, mergers, acquisition and/or
dispositions on our business, including, without limitation, related
charges against our earnings, our ability to successfully integrate
acquisitions and our ability to realize expected revenue growth and/or
expense savings from such corporate restructurings, mergers,
acquisitions and/or dispositions.
We believe these forward-looking statements are reasonable; however, undue
reliance should not be placed on any forward-looking statements, which are based
on current expectations. Further, forward-looking statements speak
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only as of the date they are made, and we undertake no obligation to update
publicly any of them in light of new information or future events.
SUNTRUST BANKS, INC.
SunTrust is the ninth largest commercial banking organization in the U.S.
with assets of approximately $104.7 billion at December 31, 2001. SunTrust
provides a full line of consumer and commercial banking services to more than
5.5 million customers through over 1,100 branches and 1,990 ATMs in Alabama,
Florida, Georgia, Maryland, Tennessee, Virginia and the District of Columbia.
SunTrust's primary businesses include traditional deposit and credit services as
well as trust and investment services. SunTrust also provides, through various
subsidiaries, credit cards, mortgage banking credit-related insurance, discount
brokerage and investment banking services. As of December 31, 2001, SunTrust had
total deposits of approximately $67.5 billion, discretionary trust assets of
approximately $89.5 billion and a mortgage servicing portfolio of approximately
$47.6 billion.
Under the long-standing policy of 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 these banks. As a result of this
policy, we may be required to commit resources to our subsidiary banks in
circumstances where we might not otherwise do so.
Because we are a bank holding company, our rights and the rights of our
creditors, including the holders of any of the debt securities offered by this
prospectus, to participate in the distribution and payment of assets of any of
our subsidiaries upon the subsidiary's liquidation or recapitalization would be
subject to the prior claims of such subsidiary's creditors except to the extent
that we may be a creditor with recognized claims against the subsidiary.
We are incorporated under the laws of the State of Georgia. Our principal
executive offices are located at 303 Peachtree Street, N.E., Atlanta, Georgia
30308. Our general information telephone number is 404-588-7711.
USE OF PROCEEDS
Unless the applicable prospectus supplement states otherwise, we will use
the net proceeds from the sale of any debt securities for general corporate
purposes. These purposes may include the following:
- the repayment of long-term debt;
- the repayment of short-term debt, including commercial paper;
- the purchase of equity securities, including repurchase of our common
stock pursuant to our on-going stock repurchase plan;
- investments at the holding company level;
- investments in, or extensions of credit to, our banking and other
subsidiaries and other banks and companies engaged in other financial
service activities;
- possible acquisitions; and
- the purchase of investment securities.
Until we use the net proceeds from the sale of any debt securities, we may
temporarily invest the net proceeds in short-term marketable securities.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table shows the ratio of earnings to fixed charges of our
company, which includes our subsidiaries, on a consolidated basis. The ratio of
earnings to fixed charges has been computed by dividing:
- net income plus all applicable income taxes plus fixed charges, by
- fixed charges.
Fixed charges represent interest expense, either including or excluding interest
on deposits as set forth below, and the portion of net rental expense 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. For 1999, the ratio of earnings to fixed charges has been
computed excluding extraordinary gains.
YEAR ENDED DECEMBER 31,
1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Including interest on deposits.......................... 1.60 1.54 1.59 1.51 1.66
Excluding interest on deposits.......................... 2.74 2.31 2.38 2.45 2.61
DESCRIPTION OF THE DEBT SECURITIES
As used in this prospectus, debt securities means the debentures, notes,
bonds and other evidences of indebtedness that we may issue from time to time.
The debt securities will either be senior debt securities or subordinated debt
securities and will be issued under one or more separate indentures between us
and a trustee. Senior debt securities will be issued under a senior indenture
and subordinated debt securities will be issued under a subordinated indenture.
We sometimes refer to the senior indenture and the subordinated indenture in
this prospectus collectively as the "indentures." Unless the applicable
prospectus supplement states otherwise, the trustee under the senior indenture
will be J.P. Morgan Trust Company, National Association, as successor in
interest to PNC Bank, National Association, and the trustee under the
subordinated indenture will be Bank One, N.A., as successor in interest to The
First National Bank of Chicago.
We have summarized selected provisions of the indentures below. The summary
is not complete. You should read the following summary together with the
applicable indenture to help you understand the terms of the debt securities.
The forms of the indentures have been filed as exhibits to the registration
statement of which this prospectus forms a part. In the summary below, we have
included references to section numbers of the applicable indenture so that you
can easily locate these provisions. You can obtain copies of the indentures by
following the directions under the caption "Where You Can Find More Information"
beginning on page 2 of this prospectus.
GENERAL
The indentures do not limit the aggregate principal amount of debt
securities that we may issue and provide that we may issue debt securities from
time to time in one or more series, in each case with the same or various
maturities, at par or at a discount. We may issue additional debt securities of
a particular series without the consent of the holders of the debt securities of
such series outstanding at the time of the issuance. Any such additional debt
securities, together with all other outstanding debt securities of that series,
will constitute a single series of debt securities under the applicable
indenture. The indentures also do not limit our ability to incur other debt and
do not contain financial or similar restrictive covenants.
A prospectus supplement relating to a series of debt securities being
offered will include specific terms relating to the offering. These terms may
include some or all of the following:
- the title of the debt securities;
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- whether the debt securities are senior debt securities or subordinated
debt securities;
- any limit on the total principal amount of the debt securities;
- the maturity date or dates of the debt securities;
- the rate or rates of interest, which may be fixed or variable, per
annum at which the debt securities will bear interest, or the method
of determining such rate or rates, if any;
- the date or dates from which interest, if any, will accrue;
- the dates on which interest will be payable and the related record
dates;
- whether payments of principal or interest will be determined by any
index, formula or other method and the manner of determining the
amount of such payments;
- the place or places where the principal of, premium, if any, and
interest on the debt securities will be payable if other than the
location specified in this prospectus;
- any redemption dates, prices, rights, obligations and restrictions on
the debt securities;
- any mandatory or optional sinking fund, purchase fund or analogous
provisions;
- the denominations in which the debt securities will be issuable if
other than denominations of $1,000 and integral multiples thereof;
- the portion of the principal amount of the debt securities payable
upon the acceleration of the maturity of the debt securities if other
than the principal amount;
- the currency or currency unit in which principal of, premium, if any,
and interest will be paid if other than U.S. dollars;
- whether we will issue the debt securities in permanent global form and
the circumstances under which such permanent global debt security may
be exchanged;
- whether the subordination provisions summarized below or different
subordination provisions will apply to the debt securities;
- if such debt securities are senior debt securities, whether the
defeasance provisions of the senior indenture will apply to such
series of debt securities;
- any special tax implications of the debt securities;
- any deletions from, changes in or additions to the events of default
or the covenants specified in the applicable indenture; and
- any other material terms of the debt securities not specified in this
prospectus (Section 301).
We may issue both senior debt securities and subordinated debt securities at
a substantial discount below their stated principal amount. We refer to these
securities as "original issue discount securities," which means any security
that provides for an amount less than its principal amount to be due and payable
upon the acceleration of its maturity. We will describe the federal income tax
consequences and other special considerations applicable to any original issue
discount securities in the applicable prospectus supplement.
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Unless the applicable prospectus supplement states otherwise, we will issue
debt securities only in fully registered form, without coupons, and in
denominations of $1,000 and any integral multiple thereof. Holders of debt
securities will not pay any service charge for any registration of transfer or
exchange of the debt securities. We may, however, require payment of a sum
sufficient to cover any tax or other government charge payable in connection
with such registration or transfer.
PAYMENT; TRANSFER
Unless the applicable prospectus supplement states otherwise, 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 in Atlanta, Georgia, except that interest may be paid at our
option by check mailed to the address of the holder entitled thereto as it
appears on the security register. We will have the right to require a holder of
any debt security, in connection with any payment on such debt security, to
certify information to us or, in the absence of such certification, we will be
entitled to rely on any legal presumption to enable us to determine our
obligation, if any, to deduct or withhold taxes, assessments or governmental
charges from such payment.
RANKING
General. The debt securities will be our direct unsecured obligations. The
senior debt securities will rank equally with our other unsecured and
unsubordinated indebtedness. The subordinated debt securities will rank junior
to all senior indebtedness (as defined below) and, in certain circumstances, to
all additional senior obligations (as defined below).
As of December 31, 2001, we had an aggregate of approximately $1.018 billion
of long-term senior indebtedness outstanding and an aggregate of approximately
$341 million of short-term senior indebtedness outstanding, which consisted
primarily of master notes. As of December 31, 2001, we had no additional senior
obligations outstanding. We expect from time to time to incur additional 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 December 31, 2001, we had an aggregate of approximately $900
million of long-term subordinated debt securities outstanding and an aggregate
of $1.450 billion of trust preferred securities outstanding.
Because we are a holding company, our right and the rights of our creditors,
including holders of debt securities, to participate in any distribution of
assets of any of our subsidiaries upon its liquidation, reorganization or
otherwise would be subject to the prior claims of creditors of that subsidiary,
except to the extent that we are 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.
Our subsidiaries have significant outstanding 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 protect the holders of the debt securities against a sudden
and dramatic decline in credit quality resulting from a takeover,
recapitalization or similar restructuring of our company or other event
involving us that may adversely affect our credit quality.
Subordination of the Subordinated Securities. The subordinated debt
securities will be subordinate and junior in right of payment to all of our
senior indebtedness and, in certain circumstances relating to the dissolution,
winding-up, liquidation of or reorganization of our company, to all additional
senior obligations (Article 13).
Under the subordinated indenture "senior indebtedness" means
(1) all indebtedness of our company for money borrowed, whether now
outstanding or subsequently created, assumed or incurred, other than:
- the subordinated debt securities;
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- any obligation ranking equally with the subordinated debt securities;
or
- any obligation ranking junior to the subordinated debt securities, and
(2) any deferrals, renewals or extensions of any such senior indebtedness.
The subordinated indenture defines the term "indebtedness for money
borrowed" to mean:
- any obligation of ours, or any obligation guaranteed by us, 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 purchase price of
property or assets acquired other than in the ordinary course of
business.
The subordinated indenture defines "additional senior obligations" to mean
all of our indebtedness, 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:
(1) any claims in respect of senior indebtedness; or
(2) any obligations ranking junior to or equally with the subordinated
debt securities.
As a result of these subordination provisions, no payment on account of the
principal of, premium, if any, or interest on the subordinated debt securities
may be made if a payment default with respect to senior indebtedness exists and
any applicable grace period has expired or the maturity of any senior
indebtedness has been accelerated. 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 our company as a
whole, whether voluntary or involuntary,
(1) 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, premium, if any, or interest on the subordinated debt
securities; and
(2) if after giving effect to the operation of clause (1) above:
- any assets remain available for payment or distribution in respect of
the subordinated debt securities, and
- creditors in respect of additional senior obligations have not
received payment in full;
then the amounts referred to in the first bullet above will 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 any payment at a time
when they know 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).
As a result of these subordination provisions, in the event of our
insolvency, holders of subordinated debt securities may recover less, ratably,
than holders of senior indebtedness and additional senior obligations. In
addition, in the event of insolvency, our creditors that do not hold senior
indebtedness or who hold subordinated debt securities may recover less, ratably,
than holders of senior indebtedness and may recover more, ratably, than holders
of the subordinated debt securities.
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RESTRICTION ON DISPOSITION OF VOTING STOCK OF CERTAIN SUBSIDIARIES
Under the senior indenture, we have agreed not to 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:
(1) a principal constituent bank; or
(2) a subsidiary which owns shares of voting stock or any securities
convertible into voting stock of a principal constituent bank.
Notwithstanding the foregoing, this covenant does not prohibit:
- any dispositions made by us or any subsidiary (A) acting in a
fiduciary capacity for any person other than us or any subsidiary or
(B) to us or any of our wholly owned (except for directors' qualifying
shares) subsidiaries; or
- the merger or consolidation of a principal constituent bank with and
into a principal constituent bank.
This covenant also does not prohibit sales, assignments, pledges, transfers
or other dispositions of shares of voting stock of a corporation referred to in
clause (1) or (2) above where:
(1) 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
(2) 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 us, directly or indirectly, of any other
corporation or entity; or
(3) 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 clause (2) above, the sales, assignments, pledges,
transfers or other dispositions are:
- for fair market value as determined by our board of directors or the
board of directors of 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), we
and our directly or indirectly wholly owned subsidiaries will own
directly not less than 80% of the voting stock of such principal
constituent bank or subsidiary; or
(4) a constituent bank sells additional shares of voting stock to its
shareholders at any price, so long as immediately after such sale we own,
directly or indirectly, at least as great a percentage of the voting stock
of such constituent bank as we owned prior to such sale of additional
shares; or
(5) 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 that has total assets equal to 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 December 31, 2001, SunTrust Bank
was the only constituent bank that is a principal constituent bank under the
senior indenture.
The subordinated indenture does not contain the foregoing covenant.
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EVENTS OF DEFAULT
Definition. Under the indentures, the following events will constitute an
event of default with respect to debt securities of any series:
(1) we fail for 30 days to pay any interest on any debt security of
that series when due and payable;
(2) we fail to pay principal of or any premium on any debt security of
that series when due;
(3) we fail to deposit any sinking fund payment in respect of any debt
security of that series when due;
(4) we fail to perform any other covenant in the applicable indenture
(other than a covenant included in such indenture solely for the benefit of
series of debt securities other than that series), for 90 days after written
notice as provided in the applicable indenture;
(5) a decree or order for relief in respect of our company is entered by
a court having jurisdiction in an involuntary case under federal or state
bankruptcy laws, and continues unstayed and in effect for 60 consecutive
days;
(6) we commence a voluntary case under federal or state bankruptcy laws
or consent to the entry of a decree or order for relief in an involuntary
case under any such law; and
(7) any other event of default provided with respect to debt securities
of that series (Section 501).
Remedies. If an event of default:
- with respect to senior debt securities of any series occurs and is
continuing, or
- described in clause (5) or clause (6) with respect to subordinated
debt securities of any series occurs and is continuing,
then either the relevant 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 writing to us 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 declaration of acceleration 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).
Accordingly, unless the applicable prospectus supplement states otherwise,
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
(5) or clause (6) of the preceding paragraph and may not be accelerated upon a
payment or covenant default. In the event of a payment or covenant default with
respect to subordinated debt securities, the trustee, subject to certain
limitations and conditions, may institute judicial proceedings to enforce the
payment of any amount due or the performance of such covenant or any other
proper remedy (Section 503). Under certain circumstances, the trustee may
withhold notice to the holders of the subordinated debt securities of a default
if the trustee determines in good faith that the withholding of such notice is
in the best interest of such holders, and the trustee shall withhold such notice
for certain defaults for a period of 30 days (Section 602).
Obligations of Trustee. The indentures provide that, subject to the duty of
the relevant trustee during an event of default to act with the required
standard of care, such trustee will be under no obligation to exercise any of
its rights or powers under the applicable indenture at the request or direction
of any of the holders, unless such holders shall have offered to such trustee
reasonable security or indemnity (Section 603). Subject to such provisions for
the indemnification of the 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 relevant trustee, or
exercising any trust or power conferred on such
10
trustee, with respect to the debt securities of that series. However, such
trustee may decline to act if the holders' direction is contrary to law or the
applicable indenture, would unduly prejudice the right of other holders or would
involve such 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 applicable indenture, or for the
appointment of a receiver or trustee or for any remedy, unless:
- such holder has given the relevant trustee written notice of a
continuing event of default with respect to the debt securities of
that series;
- the holders of not less than 25% in aggregate principal amount of the
outstanding debt securities of that series have made written request,
and offered reasonable indemnity, to the relevant trustee to institute
such proceeding as trustee;
- such trustee has not received an inconsistent direction from the
holders of a majority in principal amount of the outstanding debt
securities of that series; and
- the trustee has failed to institute the requested 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, 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).
Under the indentures we must furnish to the relevant trustee annually a
statement regarding our performance of certain of our obligations under the
applicable indenture and as to any default in such performance (Senior
Indenture Section 1006; Subordinated Indenture Section 1005).
DEFEASANCE AND COVENANT DEFEASANCE
The senior indenture provides that, to the extent indicated in the
applicable prospectus supplement, we may deposit in trust with the relevant
trustee cash and/or government securities in an amount sufficient, without
reinvestment, to pay all sums due on any series of senior debt securities. If we
make this deposit, then, at our option, we:
(1) will be deemed to have satisfied and paid all of our obligations in
respect of the senior debt securities of that particular series; or
(2) will not need to comply with certain restrictive covenants contained
in the senior indenture and the occurrence of a covenant default will no
longer be an event of default with respect to such series of senior debt
securities, which we refer to as "covenant defeasance."
Such a trust may only be established if, among other things,
- no event of default exists or occurs as a result of such deposit; and
- we deliver 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 deposit.
If we exercise our covenant defeasance option with respect to any series of
senior debt securities and the maturity of that series is accelerated upon an
event of default, the amount of cash and government securities on deposit with
the trustee may not be sufficient to pay amounts due on such senior debt
securities at the time of the acceleration. However, we will remain liable with
respect to such payments (Article 13).
The subordinated indenture does not contain defeasance and covenant
defeasance provisions.
11
MODIFICATION AND WAIVER
We and the relevant trustee may modify and amend the applicable indenture
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. However, we may not, without the consent of the holder of each debt
security affected:
- change the maturity date of the principal of, or interest on, any debt
security,
- reduce the principal amount of, or any premium or rate of interest on,
any debt security,
- reduce the amount of principal of an original issue discount security
payable upon acceleration of the maturity thereof,
- change the place or currency of payment of principal of, or any
premium or interest on, any debt security,
- impair the right to institute suit for the enforcement of any payment
on or with respect to any debt security, or
- reduce the percentage in principal amount of outstanding debt
securities of any series required to modify or amend either indenture
or to waive compliance with certain provisions of, or defaults under,
either indenture (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, our
compliance with certain restrictive provisions of the applicable indenture.
(Senior Indenture Section 1007; Subordinated Indenture Section 1006).
The holders of at least a majority in aggregate 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 such
indenture cannot be modified or amended without the consent of the
holder of each debt security of the series affected (Section 513).
CONSOLIDATION, MERGER AND TRANSFER OF ASSETS
We may consolidate with or merge into, or transfer our assets substantially
as an entirety to, any corporation organized under the laws of the U.S, any
state thereof or the District of Columbia, provided that:
- the successor corporation assumes our obligations on the debt
securities and under the indentures,
- 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
- 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).
12
In the normal course of business, we and our subsidiaries conduct banking
transactions with the trustees and/or their affiliates, and the trustees and/or
their affiliates conduct banking transactions with us and our subsidiaries.
BOOK-ENTRY SECURITIES
We may issue debt securities 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, we will
issue one or more book-entry securities in denominations equal to the portion of
the aggregate principal amount of debt securities of the series to be
represented by such book-entry 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 its nominee or by its nominee 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. We anticipate 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 debt securities
represented by such book-entry security to the accounts of persons that have
accounts with such depositary, which we refer to as "participants." Such
accounts will be designated by the underwriters or agents with respect to such
debt securities or by us if we offer and sell such debt securities directly.
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 other persons, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly, which we refer
to as "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, the 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 represented by such
book-entry security registered in their names, will not 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, premium, if any, 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. We expect that the
depositary 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. We also expect 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 we, 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 a book-entry
security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests (Section 311).
13
If the depositary for debt securities of a series notifies us 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 Securities Exchange Act of
1934, we have agreed to appoint a successor depositary. If we have not appointed
a successor within 90 days, we 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, we may at any time and in our 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 and, in such event, will issue debt securities of such
series in definitive registered form in exchange for such book-entry securities.
Further, if we so specify with respect to the debt securities of a series, we
may issue debt securities in definitive registered form in exchange for
book-entry securities 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. In any such instance,
an owner of a beneficial interest in a book-entry security will be entitled to
physical delivery of debt securities in definitive registered form of the series
represented by such book-entry security which are equal in aggregate principal
amount to such beneficial interest and to have such debt securities registered
in its name (Section 305).
PLAN OF DISTRIBUTION
We may sell any series of debt securities:
- through underwriters or dealers;
- through agents; or
- directly to one or more purchasers.
Any such underwriters, dealers or agents may include any of our
broker-dealer subsidiaries, including SunTrust Capital Markets, Inc. and
SunTrust Securities, Inc.
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.
For each series of debt securities, the prospectus supplement will set forth
the terms of the offering including:
- the initial public offering price;
- the names of any underwriters, dealers or agents;
- the purchase price of the debt securities;
- our proceeds from the sale of the debt securities;
- any underwriting discounts, agency fees, or other compensation payable
to underwriters or agents;
- any discounts or concessions allowed or reallowed or repaid to
dealers; and
- the securities exchanges on which the debt securities will be listed,
if any.
14
If we use underwriters in the sale, they will buy the debt securities for
their own account. The underwriters may then resell the debt securities in one
or more transactions at a fixed public offering price or at varying prices
determined at the time of sale or thereafter. The obligations of the
underwriters to purchase the debt securities will be subject to certain
conditions. The underwriters will be obligated to purchase all the debt
securities offered if they purchase any debt securities. Any initial public
offering price and any discounts or concessions allowed or re-allowed or paid to
dealers may be changed from time to time. In connection with an offering,
underwriters and selling group members and their affiliates may engage in
transactions to stabilize, maintain or otherwise affect the market price of the
debt securities in accordance with applicable law.
If we use dealers in the sale, we will sell debt securities to such dealers
as principals. The dealers may then resell the debt securities to the public at
varying prices to be determined by such dealers at the time of resale. If we use
agents in the sale, they will use their reasonable best efforts to solicit
purchases for the period of their appointment. If we sell directly, no
underwriters or agents would be involved. We are not making an offer of debt
securities in any state that does not permit such an offer.
Underwriters, dealers and agents that participate in the debt securities
distribution may be deemed to be underwriters as defined in the Securities Act
of 1933. Any discounts, commissions, or profit they receive when they resell the
debt securities may be treated as underwriting discounts and commissions under
the Securities Act of 1933. We may have agreements with underwriters, dealers
and agents to indemnify them against certain civil liabilities, including
certain liabilities under the Securities Act of 1933, or to contribute with
respect to payments that they may be required to make.
We may authorize underwriters, dealers or agents to solicit offers from
certain institutions whereby the institution contractually agrees to purchase
the debt securities from us on a future date at a specific price. This type of
contract may be made only with institutions that we specifically approve. Such
institutions could include banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. The underwriters, dealers
or agents will not be responsible for the validity or performance of these
contracts.
The debt securities will be new issues of securities with no established
trading market and unless otherwise specified in the applicable prospectus
supplement, will not be listed 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 the underwriters make a market in the debt
securities, 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.
Our broker-dealer subsidiaries are members of the NASD and may participate
in distributions of debt securities. Accordingly, offerings of debt securities
in which our broker-dealer subsidiaries participate will conform with the
provisions of Rule 2720 of the Conduct Rules of the NASD.
This prospectus, together with any applicable prospectus supplement, may
also be used by any of our broker-dealer subsidiaries in connection with offers
and sales of debt securities in market-making transactions at negotiated prices
related to prevailing market prices at the time of sale. Any of our
broker-dealer subsidiaries, including SunTrust Capital Markets, Inc. and
SunTrust Securities, Inc., may act as principal or agent in such transactions.
None of our broker-dealer subsidiaries has any obligation to make a market in
any of the debt securities and may discontinue any market-making activities at
any time without notice, at its sole discretion.
Underwriters, dealers or agents may be customers of, engage in transactions
with, or perform services for, us and our subsidiaries in the ordinary course of
business.
LEGAL MATTERS
Certain legal matters with respect to the debt securities will be passed
upon for us by Raymond D. Fortin, Senior Vice President, General Counsel and
Secretary, and by King & Spalding, and for any underwriters by Skadden, Arps,
Slate, Meagher & Flom LLP. As of April 12, 2002, Mr. Fortin beneficially owned
7,800 shares of our common stock and 20,800 restricted shares, and held options
to purchase 28,400 shares.
15
EXPERTS
The audited consolidated financial statements of SunTrust Banks, Inc.
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.
16
NO DEALER, SALES PERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS OR THE
ACCOMPANYING PROSPECTUS SUPPLEMENT. YOU MUST NOT RELY ON ANY UNAUTHORIZED
INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS
SUPPLEMENT IS AN OFFER TO SELL ONLY THE SECURITIES OFFERED HEREBY, BUT ONLY
UNDER CIRCUMSTANCES AND IN JURISDICTIONS WHERE IT IS LAWFUL TO DO SO. THE
INFORMATION CONTAINED IN THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS
SUPPLEMENT IS CURRENT ONLY AS OF ITS DATE
---------------
TABLE OF CONTENTS
PROSPECTUS
PAGE
----
About this Prospectus .................. 2
Where You Can Find More Information .... 2
Forward-Looking Statements ............. 3
SunTrust Banks, Inc. ................... 4
Use of Proceeds ........................ 4
Ratio of Earnings to Fixed Charges ..... 5
Description of the Debt Securities ..... 5
Plan of Distribution ................... 14
Legal Matters .......................... 15
Experts ................................ 16
SUNTRUST BANKS, INC.
---------------
PROSPECTUS
, 2002
---------------
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
debt securities being registered, other than underwriting compensation, are as
follows:
Securities and Exchange Commission registration fee........... $ 92,000
Attorneys' fees and expenses.................................. 100,000
Accounting fees and expenses.................................. 150,000
Printing and engraving expenses............................... 50,000
Fees of indenture trustees.................................... 25,000
Rating Agency fees............................................ 25,000
Miscellaneous expenses........................................ 25,000
---------
Total....................................................... $ 467,000
=========
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:
II-1
(A) When used with respect to a director, the office of director in a
corporation; and
(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)(2)(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
or she was adjudged liable on the basis that personal benefit was improperly
received by him or her, whether or not involving action in his or her
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.
II-2
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.
II-3
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 a 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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(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 a 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.
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(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 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
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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.
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, authorization of indemnification and
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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
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or threatened proceeding that would be covered by the authorization may not be
voted on the authorization. The Corporation shall not indemnify 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.
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UNDERWRITING AGREEMENT
Pursuant to the form of underwriting agreement incorporated by reference as
Exhibit 1.1 to this registration statement, the Corporation has agreed to
indemnify the underwriters, if any, against certain liabilities under federal
and state securities laws.
INSURANCE
The registrant 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
EXHIBIT
NUMBER DESCRIPTION
------ -----------
1.1 -- Form of Underwriting Agreement (incorporated by reference to
Exhibit 1 to SunTrust Banks, Inc.'s Registration Statement
on Form S-3 (Registration No. 333-46093)).
4.1 -- Indenture, dated as of May 1, 1993, between the Corporation
and J.P. Morgan Trust Company, National Association (as
successor in interest to PNC Bank, National Association), as
trustee (incorporated by reference to Exhibit 4(a) to SunTrust
Banks, Inc.'s Registration Statement on Form S-3 (Registration
No. 33-62162)).
4.2 -- Indenture, dated as of May 1, 1993, between the Corporation and
Bank One, N.A. (as successor in interest to The First National
Bank of Chicago), as trustee (incorporated by reference to
Exhibit 4(b) to SunTrust Banks, Inc.'s Registration Statement on
Form S-3 (Registration No. 33-62162)).
5.1 -- Opinion of Raymond D. Fortin, General Counsel of SunTrust Banks,
Inc., as to the legality of the securities being registered.
12.1 -- Statement setting forth computation of ratios of earnings to
fixed charges.
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Raymond D. Fortin, Counsel of the Corporation
(included in Exhibit 5.1).
25.1 -- Statement of eligibility of J.P. Morgan Trust Company, National
Association, as trustee, on Form T-1.
25.2 -- Statement of eligibility of Bank One, N.A., as trustee, on
Form T-1.
99.1 -- Acknowledgement of Letter from Arthur Andersen LLP.
ITEM 17. UNDERTAKINGS
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 the volume of securities offered (if the total dollar value of
securities
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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 and 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 (1)(i) and (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 with or furnished to the
Commission 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.
(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.
(4) 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 Section 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.
(5) 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
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
any registrant of expenses incurred or paid by a director, officer or
controlling person of such 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 Securities Act of 1933 and will be governed
by the final adjudication of such issue.
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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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia, on the 16th day of April,
2002.
SUNTRUST BANKS, INC.
By: /s/ L. Phillip Humann
----------------------------------
L. Phillip Humann
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints L. PHILLIP HUMANN, Chairman of the Board,
President, Chief Executive Officer and a Director of the Company, JOHN W.
SPIEGEL, Vice Chairman and Chief Financial Officer of the Company, RAYMOND D.
FORTIN, Senior Vice President and Secretary of the Company, and MARK A. CHANCY,
Senior Vice President and Treasurer of the Company, or any one of them, and any
agent for service named in this registration statement and each of them, his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any registration statements filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended and any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agents or any of them, their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
II-13
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed by the following persons in the
capacities with SunTrust Banks, Inc. and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ L. Phillip Humann Chairman of the Board, President, April 16, 2002
-------------------------------- Chief Executive Officer and Director
L. Phillip Humann
/s/ John W. Spiegel Vice Chairman and April 16, 2002
-------------------------------- Chief Financial Officer
John W. Spiegel (Principal Financial Officer)
/s/ William P. O'Halloran Senior Vice President and Controller April 16, 2002
-------------------------------- (Chief Accounting Officer)
William P. O'Halloran
/s/ J. Hyatt Brown Director April 16, 2002
--------------------------------
J. Hyatt Brown
/s/ Alston D. Correll Director April 16, 2002
--------------------------------
Alston D. Correll
/s/ Douglas N. Daft Director April 16, 2002
--------------------------------
Douglas N. Daft
/s/ A. W. Dahlberg Director April 16, 2002
--------------------------------
A. W. Dahlberg
/s/ Patricia C. Frist Director April 16, 2002
--------------------------------
Patricia C. Frist
/s/ David H. Hughes Director April 16, 2002
--------------------------------
David H. Hughes
/s/ M. Douglas Ivester Director April 16, 2002
--------------------------------
M. Douglas Ivester
/s/ Summerfield K. Johnston, Jr. Director April 16, 2002
--------------------------------
Summerfield K. Johnston, Jr.
II-14
SIGNATURE TITLE DATE
--------- ----- ----
/s/ G. Gilmer Minor, III Director April 16, 2002
--------------------------------
G. Gilmer Minor, III
/s/ Larry L. Prince Director April 16, 2002
--------------------------------
Larry L. Prince
/s/ R. Randall Rollins Director April 16, 2002
--------------------------------
R. Randall Rollins
/s/ Frank S. Royal, M.D. Director April 16, 2002
--------------------------------
Frank S. Royal, M.D.
/s/ James B. Williams Director April 16, 2002
--------------------------------
James B. Williams
/s/ Karen Hastie Williams Director April 16, 2002
--------------------------------
Karen Hastie Williams
II-15