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General Q&A
SouthTrust Shareholders
Wachovia Shareholders
What was the rationale for the merger?
SouthTrust offered Wachovia a unique strategic fit because of the two organizations’ geographic overlap in a number of key states with high growth rates. We believe the merger will allow the combined company to have greater potential for growth than either company would have likely achieved on a stand-alone basis. After the merger is complete, Wachovia will have the #1 deposit market share in the southeastern United States and immediate scale in Texas.
Who is going to run the combined company?
Ken Thompson, Wachovia’s chairman and chief executive officer, will run the combined company. Wallace Malone, SouthTrust’s chairman and chief executive officer, along with two other members of SouthTrust’s board of directors joined Wachovia’s board of directors after the transaction closed. Mr. Malone is serving as Vice Chairman. Additionally, key executives and managers from both companies make up the balance of the management team.
When will the merger transaction close?
The merger was completed on November 1, 2004.
What will happen to my stock as a result of the merger?
Upon completion of the merger, SouthTrust common stock will no longer be traded. SouthTrust shareholders will receive 0.89 shares of Wachovia common stock for each share of SouthTrust common stock. We refer to this 0.89 ratio as the “exchange ratio.” Wachovia will not issue fractional shares in the merger. Instead, we will pay cash for fractional common shares based on the NYSE closing price per Wachovia share on the trading day before the merger is completed.
How do I exchange my shares?
If you own your stock through a broker (i.e. in “street” name) at the close of the merger, your broker will handle the exchange of your shares (generally within five days of the close of the merger).
If you were listed on the books of SouthTrust’s transfer agent as a registered shareholder at the close of the merger, November 1, 2004, you should have received a Letter of Transmittal from the Exchange Agent. The Letter of Transmittal provides instructions on how to exchange your certificates. You will be required to send your certificates to the Exchange Agent.
When you deliver your SouthTrust stock certificates to the Exchange Agent along with a properly executed Letter of Transmittal and any other required documents, your SouthTrust stock certificates will be canceled, and your new shares of Wachovia common stock will automatically be issued in Direct Registration System (“DRS”) book-entry form. You will receive a statement reporting the number of shares you received in the exchange, and any fractional cash payment you may be due, no sooner than 15 business days after receipt of your certificates, completed Letter of Transmittal and any other necessary documentation.
SouthTrust common stock certificates should not be forwarded to the Exchange Agent unless and until you receive the Letter of Transmittal.
Will I receive a physical certificate from the exchange of my SouthTrust common stock certificates upon completion of the merger?
No, you will not automatically receive a physical certificate for your Wachovia common stock. We are using the Direct Registration System (“DRS”) and will electronically credit your Wachovia common shares to an account that will be created for you at our Exchange Agent, Wachovia Bank, N.A. You will receive an account statement confirming the credit of shares after you deliver your SouthTrust stock certificates to the Exchange Agent along with a properly executed Letter of Transmittal and any other required documents. DRS book-entry offers a number of benefits for shareholders, including safekeeping and the ability to easily transfer your shares to a broker to execute a sale.
While we expect the great majority of shareholders will prefer the advantages of holding their shares in DRS book-entry form, you may request a physical certificate for your shares of Wachovia common stock by indicating your preference in the space provided on the Letter of Transmittal.
How long will it take the Exchange Agent to exchange my SouthTrust shares?
Following completion of the merger, you should expect to receive your statement reflecting DRS book-entry ownership of your Wachovia common stock no sooner than 15 business days after the Exchange Agent receives ALL of your SouthTrust certificates along with a properly executed Letter of Transmittal and any other required documents.
It is very important that you send in all of your certificates with your Letter of Transmittal. If you have lost any certificates, you should send in the completed Letter of Transmittal and any certificates that you do have, but you will not be eligible to receive Wachovia dividend payments payable to holders of record of Wachovia common stock after the merger completion date until any lost certificates have been replaced.
Are there any fees are associated with exchanging my shares?
There are no fees associated with the exchange of your SouthTrust shares. You may incur expenses if you need to replace missing certificates or choose to purchase insurance from the U.S. Post Office for your package. We recommend that when sending your certificates to the Exchange Agent, you purchase insurance from the U.S. Post Office. You should insure your package for the cost of a bond to have your certificates replaced, which is currently two percent of the fair market value of the resulting Wachovia shares to be issued with a minimum fee of $25. If your certificates are not insured and are lost in route to the Exchange Agent, you will have to pay the cost of a bond to have the certificates replaced.
What if I have not received my Letter of Transmittal?
If you have not received your Letter of Transmittal, please call the Exchange Agent at 888-257-9919.
Can I exchange my shares at a branch or financial center?
Unfortunately, we cannot offer our shareholders this service for legal reasons. Please follow the instructions on the Letter of Transmittal that you will receive following the completion of the merger and return your properly completed Letter of Transmittal and certificates to the Exchange Agent. If you have not received your Letter of Transmittal, please call the Exchange Agent at 888-257-9919.
How do I determine whether or not I am in possession of all of my SouthTrust stock certificates?
The Letter of Transmittal will indicate how many shares are registered in your name. If you have questions regarding this number, please call the Exchange Agent at 888-257-9919.
What if I have lost some or all of my certificates?
If you cannot locate all or some of your certificates, you will be asked to indicate this on the Letter of Transmittal, which you should return to the Exchange Agent along with any certificates which you are able to locate. The Exchange Agent will forward information to you regarding the replacement of lost certificates. You will need to complete an affidavit of loss (sent to you by the Exchange Agent) and you will need to pay the cost of a bond to have your certificates replaced. The cost of the bond is two percent of the current market value of the resulting Wachovia shares represented by the certificates (with a $25 minimum fee).
It is important to note that a shareholder of SouthTrust will not receive their Wachovia shares or future Wachovia dividends payable to the holders of record of Wachovia common stock after the merger completion date until ALL of the shares of SouthTrust common stock owned by that shareholder are delivered to the Exchange Agent together with the completed Letter of Transmittal and any other required documents. For example, if you own 100 shares of SouthTrust common stock and can find certificates for only 60 shares, you will not receive any Wachovia shares or dividends until you have returned to the Exchange Agent your certificates for the 60 shares along with a properly completed affidavit of loss and payment of the bond to replace the missing 40 shares.
Is there a cost for lost certificates?
If you have lost certificates, you will need to pay the cost of a bond to have your certificates replaced. The cost of the bond is two percent of the current market value of the resulting Wachovia shares represented by the certificates (with a $25 minimum fee). For example, if you have lost a certificate for 40 SouthTrust shares, this certificate is the equivalent of 35.6 Wachovia shares (based on the 0.89 exchange ratio). If the current price of Wachovia shares was $40, then the value of the resulting Wachovia shares represented by the lost certificate would be $1424 (35.6 x $40) and you would need to purchase a bond in the amount of $28.48 (2% of $1424).
Please call the Exchange Agent at 888-257-9919 for assistance with replacing lost certificates.
What happens if my certificates are lost in the mail?
We cannot be responsible for certificates that are lost in the mail in route to the Exchange Agent. We recommend that you use registered or certified mail, return receipt requested and insured, to return your Letter of Transmittal and certificates. You should insure your certificates for the cost of a bond to have them replaced. The cost of the bond is two percent of the current market value of the resulting Wachovia shares represented by the certificates (with a $25 minimum fee).
Are there any tax consequences associated with exchanging my shares?
Generally, the merger will be tax-free to you, other than with respect to cash you receive for any fractional shares. However, because your tax consequences will depend on your individual situation, we urge you to consult your tax advisor for a full understanding of the particular tax consequences of the merger to you.
How do I exchange the shares in my 401(k)?
The 401(k) plan administrator will handle the exchange of shares.
What will happen to my dividend?
Based on the 0.89 exchange ratio, as well as the current Wachovia quarterly dividend of $0.46 per common share and the current SouthTrust quarterly dividend of $0.24 per common share, following the completion of the proposed merger, holders of SouthTrust common stock will receive an anticipated dividend rate increase of approximately 71% (from $0.24 to $0.409 quarterly dividend per share of SouthTrust common stock equivalent).
Wachovia has historically paid its shareholders a dividend four times a year. These dividends are subject to approval by Wachovia’s board of directors and depend on, among other things, Wachovia’s financial condition and applicable legal and regulatory considerations. Subject to the foregoing, Wachovia’s payment dates have historically been on or about the 15th of March, June, September and December.
Following the completion of the merger, in order to receive any future Wachovia quarterly dividend payments, you will need to exchange all of your SouthTrust shares for Wachovia shares. You will not receive any future Wachovia dividends payable to the holders of record of Wachovia common stock after the merger completion date until you return to the Exchange Agent all of your SouthTrust shares, together with the properly completed Letter of Transmittal and all other required documents. Dividends on unexchanged shares will be accrued without interest beginning with the first quarter following the close of the merger.
What will happen to SouthTrust’s Dividend Reinvestment Plan (DRIP)?
Current participants in SouthTrust’s DRIP will be automatically enrolled in Wachovia’s Dividend Reinvestment and Stock Purchase Plan once the proposed merger is completed. Further information regarding Wachovia’s Dividend Reinvestment and Stock Purchase Plan can be found in the Plan’s Prospectus.
Who do I call if I have questions?
The Exchange Agent is available to answer questions regarding the following issues:
Customer service representatives are available from 9 a.m. to 5 p.m. ET, Monday through Friday at 888-257-9919.
What happens to my Wachovia shares?
If you are a Wachovia shareholder, your shares of Wachovia common stock will remain outstanding and unchanged by the merger. You do not need to surrender your shares or your stock certificates.
What will happen to my dividend?
Wachovia’s common stock dividend policy will continue after the merger, but this policy is subject to, among other things, approval of Wachovia’s board of directors and may change at any time.
Who do I call if I have questions?
The Exchange Agent is available to answer questions regarding the following issues:
Customer service representatives are available from 9 a.m. to 5 p.m. ET, Monday through Friday at 888-257-9919.
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Additional Information Regarding Proposed Merger with SouthTrust
The proposed merger between Wachovia and SouthTrust will be
submitted to Wachovia's and SouthTrust's shareholders for
their consideration. Shareholders are urged to read the
definitive joint proxy statement/prospectus regarding the
proposed transaction and any other relevant documents filed
with the SEC, as well as any amendments or supplements to
those documents, because they will contain important
information. You will be able to obtain copies of all
documents filed with the SEC regarding the proposed merger,
free of charge, at the SEC's Internet site
www.sec.gov. You will also be able to obtain
these documents, free of charge, at www.wachovia.com or at
www.southtrust.com.
About Wachovia