As filed with the Securities and Exchange Commission on November 17, 1995
Registration No. 33-_______
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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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Crestar Financial Corporation
(Exact name of registrant as specified in its charter)
Virginia 54-0722175
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification No.)
919 East Main Street
P. O. Box 26665
Richmond, Virginia 23261-6665
(804) 782-5000
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive
offices)
John C. Clark, III
Corporate Senior Vice President, General Counsel and Secretary
Crestar Financial Corporation
919 East Main Street
P. O. Box 26665
Richmond, Virginia 23261-6665
(804) 782-7445
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------------
Copies to:
Lathan M. Ewers, Jr.
Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
(804) 788-8269
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
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 )
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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. ( )
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. ( )
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed maximum Proposed maximum
Title of each class Amount to be offering price per aggregate offering Amount of
of securities to be registered(1) registered(2)(3) unit(3)(4) price(4)(5) registration fee
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<S> <C> <C> <C> <C>
Debt Securities, Preferred Stock, Depositary
Shares,(6) Common Stock and Preferred Share
Purchase Rights(7)............................. --- --- $300,000,000(8) $60,000
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Capital Securities(9).......................... --- --- --- ---
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</TABLE>
(1) This Registration Statement also covers such indeterminate amount of
securities as may be issued in exchange for, or upon conversion of, as the
case may be, the securities registered hereunder. In addition, any other
securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
(2) If any Debt Securities are issued at an original issue discount, then such
greater principal amount as shall result in an aggregate initial offering
price of $300,000,000. In no event will the aggregate initial offering
price of Debt Securities, Preferred Stock, Depositary Shares, Preferred
Share Purchase Rights and Common Stock issued under this Registration
Statement and not previously registered under the Securities Act of 1933,
as amended (the "Securities Act"), exceed $300,000,000.
(3) Not specified as to each class of securities to be registered pursuant to
General Instruction II.D of Form S-3 under the Securities Act.
(4) The proposed maximum offering price per unit will be determined from time
to time by the Registrant in connection with, and at the time of, the
issuance by the Registrant of the securities registered hereunder.
(5) Estimated solely for the purposes of computing the registration fee
pursuant to Rule 457(o) of the Rules and Regulations of the Securities and
Exchange Commission (the "Commission") under the Securities Act.
(6) Such indeterminate number of Depositary Shares to be evidenced by
Depositary Receipts issued pursuant to a Deposit Agreement. In the event
the Registrant elects to offer to the public fractional interests in shares
of the Preferred Stock registered hereunder, Depositary Receipts will be
distributed to those persons purchasing such fractional interests and such
shares will be issued to the Depositary Bank under the Deposit Agreement.
(7) The Rights to purchase Participating Cumulative Preferred Stock, Series C,
will be attached to and trade with shares of the Common Stock.
(8) No separate consideration will be received for any securities registered
hereunder that are issued in exchange for, or upon conversion of, other
securities registered hereunder.
(9) The maximum amount of Capital Securities to be registered with respect to a
series of Debt Securities is equal to the aggregate principal amount of the
Debt Securities of such series divided by the Market Value (as defined in
the applicable Indenture) of the Capital Securities on the date of
issuance. No additional consideration will be paid for the Capital
Securities registered hereunder.
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 the Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act, or until the Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may
determine.
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<PAGE>
PROSPECTUS
$300,000,000
Crestar Financial Corporation
Debt Securities
Preferred Stock
Common Stock
----------------------
Crestar Financial Corporation ("Crestar" or the "Company") intends to
issue from time to time in one or more series up to $300,000,000 of its (i)
unsecured subordinated debt securities (the "Debt Securities"), (ii) shares of
preferred stock (the "Preferred Stock"), which may be issued in the form of
depositary shares evidenced by depositary receipts (the "Depositary Shares"), or
(iii) shares of common stock (the "Common Stock"), on terms to be determined at
the time of sale (the Debt Securities, Preferred Stock, Depositary Shares and
Common Stock, collectively, the "Securities"). The Securities offered hereby
(collectively, the "Offered Securities") may be offered separately or as units
with other Offered Securities, in separate series in amounts, at prices and on
terms to be determined at the time of sale and to be set forth in a supplement
to this Prospectus (a "Prospectus Supplement").
The Debt Securities will be subordinate to all existing and future
Senior Indebtedness, as defined in the Indenture (as defined herein). The
holders of Debt Securities of any series may be obligated at maturity to
exchange such Debt Securities for Capital Securities of the Company. Unless
otherwise indicated in the applicable Prospectus Supplement, the maturity of the
Debt Securities will be subject to acceleration only in the event of certain
events of bankruptcy or reorganization of the Company. See "Description of Debt
Securities."
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered, such as, where applicable, (i) in the case of
Debt Securities, the specific designation, aggregate principal amount, currency,
denomination, maturity, priority, interest rate (which may be variable or
fixed), time of payment of interest, terms for optional redemption or repayment
or for sinking fund payments, terms for conversion into or exchange for Capital
Securities or other Offered Securities, and the initial public offering price;
(ii) in the case of Preferred Stock, the specific title and stated value, number
of shares or fractional interests therein, and the dividend, liquidation,
redemption, conversion, voting and other rights, the initial public offering
price, and whether interests in the Preferred Stock will be represented by
Depositary Shares; (iii) in the case of Common Stock, the initial offering
price; and (iv) in the case of all Offered Securities, whether such Offered
Security will be offered separately or as a unit with other Offered Securities,
will be set forth in a Prospectus Supplement. The Prospectus Supplement will
also contain information, where applicable, about certain United States federal
income tax considerations relating to, and any listing on a securities exchange
of, the Offered Securities covered by the Prospectus Supplement.
The Offered Securities may be sold for public offering to underwriters
or dealers, which may be a group of underwriters represented by one or more
managing underwriters, or through such firms or other firms acting alone or
through dealers. The Offered Securities may also be sold through agents to
investors. See "Plan of Distribution." The names of any agents, dealers or
managing underwriters, and of any underwriters, involved in the sale of the
Offered Securities in respect of which this Prospectus is being delivered and
the applicable agent's commission, dealer's purchase price or underwriter's
discount will be set forth in the Prospectus Supplement. The net proceeds to the
Company from such sale will also be set forth in the Prospectus Supplement. Any
underwriters, dealers or agents participating in the offering of Offered
Securities may be deemed "underwriters" within the meaning of the Securities Act
of 1933, as amended (the "Securities Act").
----------------------
This Prospectus may not be used to consummate the sale of the
Securities unless accompanied by a Prospectus Supplement.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------
The date of this Prospectus is , 1995.
<PAGE>
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company or any underwriter, agent or dealer.
Neither the delivery of this Prospectus nor any sale made hereunder shall under
any circumstances create an implication that there has been no change in the
affairs of the Company since the date hereof. This Prospectus does not
constitute an offer or solicitation by anyone in any jurisdiction in which such
offer or solicitation is not authorized or in which the person making such offer
or solicitation is not qualified to do so or to anyone to whom it is unlawful to
make such offer or solicitation.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549; Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and 7 World Trade Center, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Such reports, proxy statements and other information concerning the
Company may also be inspected at the offices of the New York Stock Exchange,
Inc. at 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission in Washington, D.C. a
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act with respect to
the Securities to which this Prospectus relates. As permitted by the rules and
regulations of the Commission, this Prospectus does not contain all the
information set forth in the Registration Statement, including the exhibits
thereto, which may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 upon payment of the
prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission under
Section 13 of the Exchange Act are hereby incorporated by reference in this
Prospectus: (i) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994, including Crestar's Form 10-K/A Amendment No. 1 to Form
10-K for the year ended December 31, 1994, and Crestar's Form 10-K/A Amendment
No. 2 to Form 10-K for the year ended December 31, 1994 annual reports for the
Crestar Employees' Thrift and Profit Sharing Plan and the Crestar Merger Plan
for Transferred Employees, respectively; (ii) the Company's Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1995, June 30, 1995 and September 30,
1995; (iii) the section entitles "Pro Forma Condensed Financial Information"
contained in the Company's Registration Statement on Form S-4 No. 33-60637 and
the Proxy Statement/Prospectus dated September 14, 1995 included therein; (iv)
the description of Crestar Common Stock in Crestar's registration statement
filed under the Exchange Act with respect to Crestar Common Stock on July 1,
1993; and (v) the description of the Rights in Crestar's registration statement
on Form 8-A filed under the Exchange Act with respect to the Rights on June 26,
1989.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which is
deemed to be incorporated by reference herein modifies or supersedes such
earlier statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus or the Prospectus Supplement.
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<PAGE>
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the foregoing documents incorporated herein by reference
(other than exhibits to such documents). Written or telephone requests should be
directed to Crestar Financial Corporation, 919 East Main Street, P.O. Box 26665,
Richmond, Virginia 23261-6665, Attention: Eugene S. Putnam, Jr., Senior Vice
President, (804) 782-5619.
BUSINESS OF CRESTAR
Crestar is the holding company for Crestar Bank, Crestar Bank N.A. of
Washington, D.C. and Crestar Bank MD of Maryland (collectively, the "Bank
Subsidiaries"). At September 30, 1995, Crestar had approximately $14.762 billion
in total assets, $10.871 billion in total deposits and $1.258 billion in total
stockholders' equity.
In 1963, six Virginia banks combined to form United Virginia Bankshares
Incorporated ("UVB"), a bank holding company formed under the Bank Holding
Company Act of 1956 (the "BHCA"). UVB (parent company of United Virginia Bank)
extended its operations into the District of Columbia by acquiring NS&T Bank,
N.A. on December 27, 1985 and into Maryland by acquiring Bank of Bethesda on
April 1, 1986. On September 1, 1987, UVB became Crestar Financial Corporation
and its bank subsidiaries adopted their present names.
Crestar serves customers through a network of 332 banking offices and
296 automated teller machines (as of September 30, 1995). The Bank Subsidiaries
offer a broad range of banking services, including various types of deposit
accounts and instruments, commercial and consumer loans, trust and investment
management services, bank credit cards and international banking services.
Crestar's subsidiary, Crestar Insurance Agency, Inc., offers a variety of
personal and business insurance products. Securities brokerage and investment
banking services, including mutual funds and annuities, are offered by Crestar's
subsidiary, Crestar Securities Corporation. Mortgage loan origination, servicing
and wholesale lending are offered by Crestar Mortgage Corporation, and
investment advisory services are offered by Capitoline Investment Services
Incorporated, both of which are subsidiaries of Crestar Bank. These various
Crestar subsidiaries provide banking and non-banking services throughout
Virginia, Maryland and Washington, D.C., as well as certain non-banking services
to customers in other states.
On May 16, 1995, Crestar entered into an Agreement and Plan of Merger
providing for the acquisition of Loyola Capital Corporation, the holding company
for Loyola F.S.B., a federally chartered stock savings bank headquartered in
Baltimore, Maryland. This acquisition is expected to close by year-end 1995.
The executive offices of Crestar are located in Richmond, Virginia at
Crestar Center, 919 East Main Street. Crestar's Operations Center is located in
Richmond. Regional headquarters are located in Norfolk and Roanoke, Virginia and
in Washington, D.C.
USE OF PROCEEDS
The net proceeds from the sale of the Securities will be used for
general corporate purposes, including Crestar's working capital needs, the
funding of investments in, or extensions of credit to, Crestar's banking and
nonbanking subsidiaries, possible acquisitions of other financial institutions
or their assets, possible acquisitions of failed financial institutions offered
for sale by regulatory authorities, possible acquisitions of, or investments in,
other businesses of a type eligible for bank holding companies and possible
reduction of outstanding indebtedness or repurchase of outstanding equity
securities of Crestar. Pending such use, Crestar may temporarily invest the net
proceeds in investment grade securities. Based upon its historical and
anticipated future growth, including future acquisitions, and the financial
needs of its subsidiaries, Crestar may engage in additional financings of a
character and in amounts to be determined as the need arises.
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<PAGE>
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following are the consolidated ratios of earnings to fixed charges
and the ratios of earnings to combined fixed charges and preferred stock
dividend requirements for each of the periods indicated:
<TABLE>
<CAPTION>
Nine Months
Ended Year Ended
September 30, December 31,
--------------- ---------------------------------------------
1995 1994 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings to fixed charges:
Excluding interest on deposits............. 3.6 4.7 4.4 4.0 2.6 1.3 1.4
Including interest on deposits............. 1.7 1.7 1.7 1.7 1.3 1.1 1.1
Earnings to combined fixed charges
and preferred stock dividend
requirements:
Excluding interest on deposits........... 3.6 4.7 4.4 3.9 2.5 1.3 1.3
Including interest on deposits........... 1.7 1.7 1.7 1.6 1.2 1.1 1.1
</TABLE>
For purposes of computing the preceding ratios, earnings represent
pre-tax income from continuing operations plus fixed charges. Fixed charges
represent interest expense (exclusive of interest on deposits in one case and
inclusive of such interest in the other), capitalized interest, amortization of
debt issuance costs, and one-third (the amount deemed to represent an
appropriate interest factor) of rent expense (net of income from subleases)
under lease commitments. Preferred stock dividend requirements represent pre-tax
earnings that would be required to cover preferred stock dividends on
outstanding preferred stock.
SUPERVISION AND REGULATION OF CRESTAR
Bank holding companies and banks operate in a highly regulated
environment and are regularly examined by federal and state regulators. The
following description briefly discusses certain provisions of federal and state
laws and certain regulations and the potential impact of such provisions on
Crestar and its Bank Subsidiaries. To the extent that the following information
describes statutory or regulatory provisions, it is qualified in its entirety by
reference to the particular statutory or regulatory provisions.
Bank Holding Companies
As a bank holding company registered under the BHCA, Crestar is subject
to regulation by the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"). The Federal Reserve Board has jurisdiction under the
BHCA to approve any bank or nonbank acquisition, merger or consolidation
proposed by a bank holding company. The BHCA generally limits the activities of
a bank holding company and its subsidiaries to that of banking, managing or
controlling banks, or any other activity which is so closely related to banking
or to managing or controlling banks as to be a proper incident thereto.
The BHCA currently prohibits the Federal Reserve Board from approving
an application from a bank holding company to acquire shares of a bank located
outside the state in which the operations of the holding company's banking
subsidiaries are principally conducted, unless such an acquisition is
specifically authorized by statute of the state in which the bank whose shares
are to be acquired is located. Under recently enacted federal legislation, the
restriction on interstate acquisitions will be abolished effective September 29,
1995 and thereafter. Bank holding companies from any state will then be able to
acquire banks and bank holding companies located in any other state. Effective
June 1, 1997, the law will allow interstate bank mergers, subject to earlier
"opt-in" or "opt-out" action by individual states. The law also allows
interstate branch acquisitions and de novo branching if permitted by the host
state. Virginia and Maryland have recently adopted early "opt-in" legislation
that will allow interstate bank mergers, effective July 1, 1995 and September
29, 1995, respectively. These laws also permit
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<PAGE>
interstate branch acquisitions and de novo branching in Virginia and Maryland by
out-of-state banks if reciprocal treatment is accorded Virginia and Maryland
banks (as the case may be) in the state of the acquiror.
There are a number of obligations and restrictions imposed on bank
holding companies and their depository institution subsidiaries by federal law
and regulatory policy that are designed to reduce potential loss exposure to the
depositors of such depository institutions and to the Federal Deposit Insurance
Corporation (the "FDIC") insurance fund in the event the depository institution
becomes in danger of default or in default. For example, under a policy of the
Federal Reserve Board with respect to bank holding company operations, a bank
holding company is required to serve as a source of financial strength to its
subsidiary depository institutions and to commit resources to support such
institutions in circumstances where it might not do so otherwise. In addition,
the "cross-guarantee" provisions of federal law require insured depository
institutions under common control to reimburse the FDIC for any loss suffered or
reasonably anticipated by either the Savings Association Insurance Fund ("SAIF")
or the Bank Insurance Fund ("BIF") as a result of the default of a commonly
controlled insured depository institution or for any assistance provided by the
FDIC to a commonly controlled insured depository institution in danger of
default. The FDIC may decline to enforce the cross-guarantee provisions if it
determines that a waiver is in the best interest of the SAIF or the BIF or both.
The FDIC's claim for reimbursement is superior to claims of stockholders of the
insured depository institution or its holding company but is subordinate to
claims of depositors, secured creditors and holders of subordinated debt (other
than affiliates) of the commonly controlled insured depository institution.
The Federal Deposit Insurance Act ("FDIA") also provides that amounts
received from the liquidation or other resolution of any insured depository
institution by any receiver must be distributed (after payment of secured
claims) to pay the deposit liabilities of the institution prior to payment of
any other general or unsecured senior liability, subordinated liability, general
creditor or stockholder. This provision would give depositors a preference over
general and subordinated creditors and stockholders in the event a receiver is
appointed to distribute the assets of any of the Bank Subsidiaries.
Crestar also is registered under the bank holding company laws of
Virginia. Accordingly, Crestar and its Bank Subsidiaries are subject to further
regulation and supervision by the State Corporation Commission of Virginia.
Capital Requirements
The Federal Reserve Board, the Office of the Comptroller of the
Currency (the "OCC") and the FDIC have issued substantially similar risk-based
and leverage capital guidelines applicable to United States banking
organizations. In addition, those regulatory agencies may from time to time
require that a banking organization maintain capital above the minimum levels
because of its financial condition or actual or anticipated growth. Under the
risk-based capital requirements of these federal bank regulatory agencies,
Crestar and its Bank Subsidiaries are required to maintain a minimum ratio of
total capital to risk-weighted assets of at least 8%. At least half of the total
capital is required to be "Tier 1 capital", which consists principally of common
and certain qualifying preferred stockholders' equity, less certain intangibles
and other adjustments. The remainder "Tier 2 capital" consists of a limited
amount of subordinated and other qualifying debt (including certain hybrid
capital instruments) and a limited amount of the general loan loss allowance.
The Tier 1 and total capital to risk-weighted asset ratios of Crestar Financial
Corporation as of September 30, 1995 were 9.2% and 12.9% respectively, exceeding
the minimums required. In addition, each of the federal regulatory agencies has
established a minimum leverage capital ratio (Tier 1 capital to average tangible
assets). These guidelines provide for a minimum ratio of 3% for banks and bank
holding companies that meet certain specified criteria, including that they have
the highest regulatory examination rating and are not contemplating significant
growth or expansion. All other institutions are expected to maintain a leverage
ratio of at least 100 to 200 basis points above the minimum. The Tier 1 capital
leverage ratio of Crestar as of September 30, 1995, was 7.6% The guidelines also
provide that banking organizations experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels, without significant reliance on intangible
assets.
-5-
<PAGE>
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") requires each federal banking agency to revise its risk-based capital
standards to ensure that those standards take adequate account of interest rate
risk, concentration of credit risk and the risks of nontraditional activities,
as well as reflect the actual performance and expected risk of loss on
multi-family mortgages. Rules have been promulgated with respect to
concentration of credit risk and the risks of non-traditional activities, and
also as to the risk of loss on multi-family mortgages. A proposed rule with
respect to interest rate risk is still under consideration. The proposal would
require institutions to use a regulator risk model to measure interest rate risk
and would require additional capital of institutions identified as having excess
interest rate risk. Crestar does not expect any of these rules, either
individually or in the aggregate, to have a material impact on its capital
requirements.
Limits on Dividends and Other Payments
Crestar is a legal entity separate and distinct from its subsidiary
institutions. Most of the revenues of Crestar result from dividends paid to
Crestar by its Bank Subsidiaries. There are various limitations applicable to
the payment of dividends to Crestar as well as the payment of dividends by
Crestar to its respective stockholders. Under federal law applicable to the Bank
Subsidiaries, prior approval from the bank regulatory agencies is required if
cash dividends declared in any given year exceed net income for that year plus
retained earnings of the two preceding years. Under these supervisory practices,
at September 30, 1995, the Bank Subsidiaries could have paid additional
dividends to Crestar of approximately $223.0 million, without obtaining prior
regulatory approval. The payment of dividends by the Bank Subsidiaries or
Crestar may also be limited by other factors, such as requirements to maintain
capital above regulatory guidelines. Bank regulatory agencies have authority to
prohibit any Bank Subsidiary or Crestar from engaging in an unsafe or unsound
practice in conducting their business. The payment of dividends, depending upon
the financial condition of the Bank Subsidiary in question, or Crestar, could be
deemed to constitute such an unsafe or unsound practice. The Federal Reserve
Board has stated that, as a matter of prudent banking, a bank or bank holding
company should not maintain its existing rate of cash dividends on common stock
unless (1) the organization's net income available to common stockholders over
the past year has been sufficient to fund fully the dividends and (2) the
prospective rate of earnings retention appears consistent with the
organization's capital needs, asset quality, and overall financial condition.
Under the FDIA, insured depository institutions such as the Bank
Subsidiaries are prohibited from making capital distributions, including the
payment of dividends, if, after making such distribution, the institution would
become "undercapitalized," (as such term is used in the statute). Based on the
Bank Subsidiaries' current financial condition, Crestar does not expect that
this provision will have any impact on its ability to obtain dividends from its
Bank Subsidiaries.
In addition to limitations on dividends, the Bank Subsidiaries are
limited in the amount of loans and other extensions of credit that may be
extended to Crestar, and any such loans or extensions of credit are subject to
collateral security requirements. Generally, up to 10% of the Bank Subsidiaries'
regulatory capital, surplus, undivided profits, allowance for loan losses and
contingency reserves may be loaned to Crestar. As of September 30, 1995,
approximately $148 million of credit was available to Crestar under this
limitation, although no extensions of credit were outstanding.
Banks
The Bank Subsidiaries are supervised and regularly examined by the
Federal Reserve Board, the State Corporation Commission, the Maryland Bank
Commissioner and the Office of the Comptroller of the Currency, as the case may
be. The Bank Subsidiaries are also subject to various requirements and
restrictions under federal and state law such as limitations on the types of
services that they may offer, the nature of investments that they make, and the
amounts of loans that may be granted. Various consumer and compliance laws and
regulations also affect the operations of the Bank Subsidiaries. In addition to
the impact of regulation, the Bank Subsidiaries are affected significantly by
actions of the Federal Reserve Board in attempting to control the money supply
and the availability of credit.
-6-
<PAGE>
The Bank Subsidiaries also are subject to the requirements of the
Community Reinvestment Act (the "CRA"). The CRA imposes on financial
institutions an affirmative and ongoing obligation to meet the credit needs of
their local communities, including low- and moderate-income neighborhoods,
consistent with the safe and sound operation of those institutions. Each
financial institution's efforts in meeting community credit needs currently are
evaluated as part of the examination process pursuant to twelve assessment
factors. These factors also are considered in evaluating mergers, acquisitions
and applications to open branches. The Bank Subsidiaries have attained either an
"outstanding" or "satisfactory"rating on their most recent CRA performance
evaluations.
In April, 1995, each of the federal banking agencies, recently approved
a final rule establishing a new framework for the implementation of CRA. The new
rule, which will become fully effective on July 1, 1997, will emphasize an
institution's performance in meeting community credit needs. Institutions will
be evaluated on the basis of a three pronged lending, investment and service
test, with lending being of primary importance. CRA ratings will continue to be
a matter of public record, and CRA performance will continue to be evaluated in
connection with mergers, acquisitions and branch applications. Although the new
rule is likely to have some impact on Crestar's business practices, it is not
anticipated that any changes will be material.
As institutions with deposits insured by BIF and SAIF, the Bank
Subsidiaries also are subject to insurance assessments imposed by the FDIC based
on a risk-based assessment. The actual assessment paid is based on the
institution's assessment risk classification, which is determined based on
whether the institution is considered "well capitalized," "adequately
capitalized" or "undercapitalized," as such terms have been defined in
applicable federal regulations, and whether such institution is considered by
its supervisory agency to be financially sound or to have supervisory concerns.
The Bank Subsidiaries currently pay at a rate of 0.04% on their BIF deposits and
at a rate of 0.23% on their SAIF deposits.
There is currently pending in Congress a proposal to recapitalize SAIF
by imposing a one-time assessment on SAIF deposits. The assessment is expected
to be in the range of 75 basis points and would be based on SAID deposits as of
March 31, 1995. Banks with SAIF deposits ("Oakar institutions"), such as the
Bank Subsidiaries, would be entitled to a 20% reduction in the assessment. Under
the current language of the proposal, Loyola would pay the full assessment. A 75
basis point assessment would, after the 20% Oakar reduction for the Bank
Subsidiaries' SAIF deposits, negatively affect Crestar's earnings by $15
million, and Loyola's earnings by $7 million, on an after-tax basis. Conversely,
future earnings of Crestar and Loyola should be augmented by a lower SAIF
assessment rate. Absent a one-time SAIF assessment, the Bank Subsidiaries and
Loyola F.S.B. will continue to pay a higher premium rate on SAIF-insured
deposits. Loyola F.S.B. deposits acquired by Crestar as part of the proposed
transaction will remain SAIF-insured subject to the SAIF-assessment rate,
regardless of whether or when Loyola F.S.B. is merged into one of the Bank
Subsidiaries, unless and until there is a legislated merger of BIF and SAIF.
Other Safety and Soundness Regulations
The federal banking agencies have broad powers under current federal
law to take prompt corrective action to resolve problems of insured depository
institutions. The extent of these powers depends upon whether the institutions
in question are "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized," as such terms are defined under uniform regulations defining
such capital levels issued by each of the federal banking agencies.
In addition, FDIC regulations now require that management report
annually on its institution's responsibility for preparing financial statements,
and establishing and maintaining an internal control structure and procedures
for financial reporting and compliance with designated laws and regulations
concerning safety and soundness; and that independent auditors attest to and
report separately on assertions in management's reports concerning compliance
with such laws and regulations, using FDIC-approved audit procedures. Such
reports are available for public inspection.
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The 1991 FDICIA law, as amended by the Riegle Community Development Act
of 1994, requires the Federal bank regulators to develop standards for a wide
variety of internal bank operating procedures and grants regulators discretion
to develop standards on asset quality, earnings and stock valuation. Recently,
the federal bank regulatory agencies issued safety and soundness standards for
insured depository institutions relating to internal controls, information and
internal audit systems, loan documentation, credit underwriting, interest rate
exposure and asset growth, as well as for compensation, fees, and benefits.
Proposed standards for asset quality and earnings have been published for
comment and will probably be added to the guidelines at a later time. The
guidelines set forth broad, principle-based standards but leave the methods for
achieving those objectives to each institution. For institutions that fail to
meet the guidelines, the agencies may establish deadlines for submission and
review of safety and soundness guidelines. Crestar believes that it is in
compliance with the new and proposed guidelines in all material respects.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture, dated as of
September 1, 1993 (the "Indenture"), between the Company and Chemical Bank, as
Trustee (the "Trustee"). A copy of the Indenture is an exhibit to the
Registration Statement of which this Prospectus forms a part. The following
summaries of certain provisions of the Indenture do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all the
provisions of the Indenture, including the definitions therein of certain terms.
Whenever particular Sections, Articles or defined terms of the Indenture are
referred to, it is intended that such Sections, Articles or defined terms shall
be incorporated herein by reference. The following sets forth certain general
terms and provisions of the Debt Securities offered hereby. Further terms of the
Offered Securities will be set forth in the applicable Prospectus Supplement.
General
The Debt Securities to be offered by this Prospectus are limited to
$300,000,000 in aggregate principal amount of unsecured subordinated debt
obligations of the Company. However, the Indenture does not limit the aggregate
principal amount of Debt Securities which may be issued thereunder and provides
that Debt Securities may be issued thereunder from time to time in one or more
series. (Section 301) $150,000,000 principal amount of 8-3/4% Subordinated Notes
due November 15, 2004 are currently issued and outstanding under the Indenture,
and the Company has $175,000,000 aggregate principal amount of subordinated debt
securities outstanding under an Indenture, dated as of February 1, 1985 (the
"Prior Indenture"), as supplemented by a First Supplemental Indenture dated as
of March 1, 1986, a Second Supplemental Indenture dated as of September 1, 1986,
and a Third Supplemental Indenture dated as of July 1, 1992, between the Company
and the Trustee. Neither the Indenture nor the Debt Securities will limit or
otherwise restrict the amount of other indebtedness which may be incurred or the
other Debt Securities which may be issued by the Company or any of its
Subsidiaries. The Debt Securities will not be deposits or other obligations of a
bank and will not be insured by the FDIC.
Because the Company is a holding company, its rights and the rights of
its creditors, including any Holder of the Securities offered hereby, to
participate in any distribution of the assets of any subsidiary of the Company
upon the latter's liquidation or recapitalization will be subject to the prior
claims of such subsidiary's creditors (including, in the case of a Bank
Subsidiary, its depositors), except to the extent that the Company may itself be
a creditor with recognized claims against such subsidiary. Claims on
subsidiaries of the Company by creditors other than the Company include claims
with respect to long-term debt and substantial obligations with respect to
deposit liabilities, federal funds purchased, securities sold under repurchase
agreements and other short-term borrowings.
Unless otherwise indicated in the applicable Prospectus Supplement, the
maturity of the Debt Securities will be subject to acceleration only in the
event of certain events of bankruptcy or reorganization of the Company. See "-
Events of Default and Rights of Acceleration."
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The holders of Debt Securities of a specified series that are
convertible into Common Stock ("Convertible Debt Securities") will be entitled
at certain times specified in the Prospectus Supplement relating to such
Convertible Debt Securities, subject to prior redemption, repayment or
repurchase, to convert any Convertible Debt Securities of such series into
Common Stock, at the conversion price set forth in such Prospectus Supplement,
subject to adjustment and to such other terms as are set forth in such
Prospectus Supplement.
The holders of Debt Securities of any series may be obligated at
maturity, or at any earlier time as set forth in the Prospectus Supplement
relating to such series, to exchange them for Capital Securities of the Company.
The terms of any such exchange and the Capital Securities issuable upon such
exchange will be described in the Prospectus Supplement relating to such series
of Debt Securities. (Article Thirteen) Capital Securities may consist of Common
Stock, perpetual preferred stock or other capital securities of the Company
acceptable to its primary federal banking regulator. Currently, the Company's
primary federal banking regulator is the Federal Reserve Board. Whenever Debt
Securities are exchangeable for Capital Securities, the Company will be
obligated to deliver Capital Securities with a market value equal to the
principal amount of such Debt Securities. In addition, the Company will
unconditionally undertake, at the expense of the Company, to sell the Capital
Securities in a sale (the "Secondary Offering") on behalf of any holders who
elect to receive cash for the Capital Securities. The Common Stock is described
below under "Description of Common Stock." A general description of the
preferred stock of the Company is set forth below under "Description of
Preferred Stock."
The staff of the Commission has advised the Company that Rule 13e-4 of
the Commission's rules and regulations relating to tender offers by issuers, as
currently in effect and interpreted, would be applicable to the exchange of Debt
Securities of any series for Capital Securities and to any Secondary Offering.
If, at the time of the exchange of Debt Securities of any series for Capital
Securities and the Secondary Offering, Rule 13e-4 (or any successor rule or
rules) applies to such transactions, the Company will comply with such rule (or
any successor rule or rules) and will afford holders of such Debt Securities all
rights and will make all filings required by such rule (or successor rule or
rules). If fewer than all of the Debt Securities of a series may be exchanged
for Capital Securities pursuant to the terms of such Debt Securities, the
particular Debt Securities to be exchanged shall be selected by the Trustee
utilizing a method the Trustee deems fair and equitable, provided that such
method shall comply with the requirements of applicable law, including federal
securities law.
Reference is made to the applicable Prospectus Supplement for the
specific terms of the series of Debt Securities offered thereby including (1)
the title of the Debt Security; (2) the aggregate principal amount and
denominations; (3) the maturity or maturities; (4) the price to be received by
the Company from the sale of such Debt Securities; (5) the interest rate or
rates (or the method of calculation thereof) to be established for the Debt
Securities, which rate or rates may vary from time to time; (6) the date or
dates on which principal of the Debt Securities is payable; (7) the date or
dates from which interest on the Debt Securities shall accrue and the payment
and record date or dates for payments of interest or the methods by which any
such dates will be determined; (8) the place or places where principal of
(premium, if any) and interest, if any, on the Debt Securities is payable; (9)
the terms of any sinking fund and analogous provisions with respect to the Debt
Securities; (10) the respective redemption and repayment rights, if any, of the
Company and of the holders of the Debt Securities and the related redemption and
repayment prices and any limitations on such redemption or repayment rights;
(11) any provisions relating to the conversion or exchange of the Debt
Securities; (12) any addition to or change in the affirmative or negative
covenants, if any, to be imposed upon the Company relating to any of the Debt
Securities; (13) any trustee or fiscal or authenticating or payment agent,
issuing and paying agent, transfer agent or registrar or any other person or
entity to act in connection with such Debt Securities for or on behalf of the
holders thereof or the Company or an affiliate; (14) whether such Debt
Securities are to be issuable initially in temporary global form and whether any
such Debt Securities are to be issuable in permanent global form and, if so,
whether beneficial owners of interests in any such permanent global security may
exchange such interests for Debt Securities of like tenor of any authorized form
and denomination and the circumstances under which any such exchanges may occur;
(15) the listing of the Debt Securities on any securities exchange or inclusion
in any other market or quotation or trading system; and (16) any other specific
terms, conditions and provisions of the Debt Securities.
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Unless otherwise provided in the Prospectus Supplement, principal of
and any premium and interest on the Debt Securities shall be payable, and the
transfer of the Debt Securities will be registrable, at the office of the
Trustee, except that, at the option of the Company, interest may be paid by
mailing a check to the address of the person entitled thereto as it appears on
the register for the Debt Securities. (Sections 305 and 1002)
Unless otherwise indicated in the Prospectus Supplement, the Debt
Securities will be issued only in fully registered form without coupons and in
denominations of $1,000 or any integral multiple thereof. (Section 302) No
service charge will be made for any registration of transfer or exchange of the
Debt Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
(Sections 302 and 305)
Debt Securities may be issued as Original Issue Discount Securities (as
defined in the Indenture) to be sold at a substantial discount below their
principal amount. Special federal income tax and other considerations applicable
thereto will be described in the Prospectus Supplement relating thereto.
Global Securities
The Debt Securities of a series may be issued in the form of one or
more fully registered securities in global form (each, a "Global Security") that
will be deposited with, or on behalf of, a depositary (the "Depositary")
identified in the Prospectus Supplement relating to such series and will be
registered in the name of the Depositary or its nominee. In such case, one or
more Global Securities will be issued in a denomination or aggregate
denominations equal to the aggregate principal amount of outstanding Debt
Securities of the series represented by such Global Security or Securities.
Unless and until any such Global Security is exchanged in whole or in part for
Debt Securities in definitive certificated form, such Global Security may not be
transferred except as a whole by the Depositary for such Global Security to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor of such Depositary or a nominee of such successor and except as
described in the applicable Prospectus Supplement.
(Section 303)
The specific terms of the depositary arrangement with respect to a
series of Debt Securities to be represented by a Global Security will be
described in the Prospectus Supplement relating to such series. The Company
anticipates that the following provisions will apply to all depositary
arrangements.
Upon the issuance of any Global Security, and the deposit of such
Global Security with or on behalf of the Depositary for such Global Security,
the Depositary will credit, on its book-entry registration and transfer system,
the respective principal amounts of the Debt Securities represented by such
Global Security to the accounts of institutions ("participants") that have
accounts with such Depositary or its nominee. The accounts to be credited will
be designated by the underwriters or agents engaging in the distribution or
placement of such Debt Securities or by the Company, if such Debt Securities are
offered and sold directly by the Company. Ownership of beneficial interests in
such Global Security will be limited to participants or persons that may hold
interests through participants. Ownership of beneficial interests by
participants in such Global Security will be shown by bookkeeping entries on,
and the transfer of that ownership interest will be effected only through
book-keeping entries to, records maintained by the Depositary or its nominee for
such Global Security. Ownership of beneficial interests in such Global Security
by persons that hold through participants will be shown by book-keeping entries
on, and the transfer of that ownership interest among or through such
participants will be effected only through book-keeping entries to, records
maintained by such participants. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive certificated form rather than book-entry form. Such laws may impair
the ability to own, transfer or pledge beneficial interests in any Global
Security.
So long as the Depositary for a Global Security or its nominee is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as set forth below
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<PAGE>
or otherwise specified in the applicable Prospectus Supplement, owners of
beneficial interests in a Global Security will not be entitled to have Debt
Securities of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of Debt
Securities of such series in definitive certificated form and will not be
considered the holders thereof for any purposes under the Indenture.
Accordingly, each person owning a beneficial interest in such Global Security
must rely on the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person
directly or indirectly owns its interest, to exercise any rights of a holder
under the Indenture. The Indenture provides that the Depositary may grant
proxies and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a holder is entitled to give or take under the Indenture. (Section 104) The
Company understands that under existing industry practices, if the Company
requests any action of holders or any owner of a beneficial interest in such
Global Security desires to give any notice or take any action that a holder is
entitled to give or take under the Indenture, the Depositary for such Global
Security would authorize the participants holding the relevant beneficial
interest to give such notice or take such action, and such participants would
authorize beneficial owners owning through such participants to give such notice
or take such action or would otherwise act upon the instructions of beneficial
owners owning through them.
Principal and any premium and interest payments on Debt Securities
represented by a Global Security registered in the name of a Depositary or its
nominee will be made to such Depositary or its nominee, as the case may be, as
the registered owner of such Global Security. None of the Company, the Trustee
or any paying agent 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 any Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. (Section 308)
The Company expects that the Depositary for any series of Debt
Securities represented by a Global Security, upon receipt of any payment of
principal, premium or interest, will credit immediately participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of such Global Security as shown on the records of such
Depositary. The Company also expects that payments by participants to owners of
beneficial interests in such Global Security or Securities held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers registered
in "street name," and will be the responsibility of such participants.
If the Depositary for any series of Debt Securities represented by a
Global Security is at any time unwilling or unable to continue as Depositary and
a successor Depositary is not appointed by the Company within 90 days, the
Company will issue such Debt Securities in definitive certificated form in
exchange for such Global Security. In addition, the Company may at any time and
in its sole discretion determine not to have the Debt Securities of a series
represented by one or more Global Securities and, in such event, will issue Debt
Securities of such series in definitive certificated form in exchange for the
Global Security representing such series of Debt Securities.
(Section 305)
Further, an owner of a beneficial interest in a Global Security
representing Debt Securities of a series may, on terms acceptable to the Company
and the Depositary for such Global Security, receive Debt Securities of such
series in definitive certificated form, if the Company so specifies with respect
to the Debt Securities of such series. In any such instance, an owner of a
beneficial interest in a Global Security will be entitled to have Debt
Securities of the series represented by such Global Security equal in principal
amount to such beneficial interest registered in its name and will be entitled
to physical delivery of such Debt Securities in definitive certificated form.
Debt Securities of such series so issued in definitive certificated form will,
except as set forth in the applicable Prospectus Supplement, be issued in
denominations of $1,000 and integral multiples thereof and will be issued in
registered form. (Section 305)
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<PAGE>
Subordination of Debt Securities
The obligations of the Company to make any payment on account of the
principal of and premium, if any, and interest on the Debt Securities will be
subordinate and junior in right of payment, to the extent set forth in the
Indenture, to all Senior Indebtedness (as defined in the Indenture) of the
Company. (Article 15) In the event that the Company shall default in the payment
of any principal of or any premium or interest on any Senior Indebtedness when
the same becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration of acceleration or otherwise, then, unless and
until such default shall have been cured or waived or shall have ceased to
exist, no direct or indirect payment (in cash, property, securities by set-off
or otherwise) will be made or agreed to be made for principal of or any premium
or interest on the Debt Securities, or in respect of any redemption, retirement,
purchase or other acquisition of any of the Debt Securities. (Section 1501)
Senior Indebtedness is defined in the Indenture generally as any debt for
borrowed money other than that which is expressly made pari passu or subordinate
to the Debt Securities, together with certain obligations of general creditors.
The Indenture does not limit or prohibit the incurrence of Senior
Indebtedness. As of September 30, 1995, the Company had approximately $166
million of outstanding indebtedness within the definition of Senior Indebtedness
and $325 million of indebtedness subordinated to Senior Indebtedness.
In the event of (1) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceeding relating to the Company, its creditors or its property; (2) any
proceeding for the liquidation, dissolution or other winding up of the Company,
voluntary or involuntary, whether or not involving insolvency or bankruptcy
proceedings; (3) any assignment by the Company for the benefit of creditors; or
(4) any other marshalling of the assets of the Company, all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, is made to any holder of any of
the Debt Securities on account thereof. In such event, any payment or
distribution on account of the principal of or any premium or interest on the
Debt Securities, whether in cash, securities or other property (other than
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the Debt
Securities, to the payment of all Senior Indebtedness at the time outstanding,
and to any securities issued in respect thereof under any such plan of
reorganization or readjustment), which would otherwise (but for the
subordination provisions) be payable or deliverable in respect of the Debt
Securities, shall be paid or delivered directly to the holders of Senior
Indebtedness in accordance with the priorities then existing among such holders
until all Senior Indebtedness (including any interest thereon accruing after the
commencement of any such proceedings) has been paid in full. In the event of any
such proceeding, after payment in full of all sums owing with respect to Senior
Indebtedness, the Holder or Holders of Debt Securities, together with the
holders of any obligations of the Company ranking on a parity with the Debt
Securities, shall be entitled to be paid from the remaining assets of the
Company the amounts at the time due and owing on account of unpaid principal of
(and premium, if any) and interest on the Debt Securities and such other
obligations before any payment or other distribution, whether in cash, property
or otherwise, shall be made on account of any capital stock or obligations of
the Company ranking junior to the Debt Securities and such other obligations. If
any payment or distribution on account of the principal of or any premium or
interest on the Debt Securities of any character, whether in cash, securities or
other property (other than securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in the subordination provisions
with respect to the Debt Securities, to the payment of all Senior Indebtedness
at the time outstanding and to any securities issued in respect thereof under
any such plan of reorganization or readjustment), or any security shall be
received by the Trustee or any Holder of any Debt Securities in contravention of
any of the terms of the Indenture and before all the Senior Indebtedness shall
have been paid in full, such payment or distribution or security will be
received in trust for the benefit of, and will be paid over or delivered and
transferred to, the holders of the Senior Indebtedness at the time outstanding
in accordance with the priorities then existing among such holders for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all such Senior Indebtedness in full. (Section 1501)
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By reason of such subordination, in the event of the insolvency of the
Company, holders of Senior Indebtedness may receive more, ratably, and any
Holder or Holders of the Debt Securities having a claim pursuant to such Debt
Securities may receive less, ratably, than the other creditors of the Company.
Such subordination will not prevent the occurrence of an Event of Default in
respect of the Debt Securities. See "- Events of Default and Rights of
Acceleration" for limitations on the right of acceleration.
No Restriction on Sale or Issuance of Stock of Crestar Bank
The Indenture contains no covenant that the Company will not sell,
transfer or otherwise dispose of any shares of, or securities convertible into,
or options, warrants, or rights to subscribe for or purchase shares of, voting
stock of any of its subsidiaries, including Bank Subsidiaries, nor does it
prohibit any subsidiary from issuing any shares of, securities convertible into,
or options, warrants or rights to subscribe for or purchase shares of, voting
stock of such subsidiary.
However, the Prior Indenture prohibits the issuance, sale, assignment,
transfer or other disposition of shares of, or securities convertible into, or
options, warrants or rights to subscribe for, or purchase shares of, Voting
Stock (as defined below) of the Bank (as defined below) if, after giving effect
to any such transaction and to the issuance of the maximum number of shares of
Voting Stock of the Bank issuable upon the exercise of all such convertible
securities, options, warrants or rights, the Company would own, directly or
indirectly, 80% or less of the shares of the Bank, except that the covenant does
not prohibit such sales, assignments, transfers or dispositions (1) made in
compliance with an order of a court or regulatory authority of competent
jurisdiction or made as a condition imposed by such court or authority to the
acquisition by the Company, directly or indirectly, of any other corporation or
entity or (2) when the proceeds are within 270 days, or such longer period of
time as may be necessary to obtain regulatory approval in connection therewith,
to be invested pursuant to an understanding or agreement in principle reached at
the time of such sale, assignment, transfer or disposition in a Controlled
Subsidiary (as defined below) (including any person which upon such investment
becomes a Controlled Subsidiary) engaged in a banking business or any other
business then legally permissible for bank holding companies. The Prior
Indenture also prohibits (1) the merger or consolidation of the Bank with or
into any other corporation unless the surviving corporation is, or upon
consummation of the merger or consolidation will become, a Controlled Subsidiary
and (2) the lease, sale or transfer of all or substantially all of the
properties and assets of the Bank to any corporation or other person, except to
a Controlled Subsidiary or a person that, upon such lease, sale or transfer,
will become a Controlled Subsidiary. The term "Bank" is defined in the Prior
Indenture to mean Crestar Bank of Virginia and (i) any successor or successors
to all or substantially all the business of Crestar Bank of Virginia as
presently constituted and (ii) any surviving corporation or transferee
corporation described in the foregoing covenant. The term "Controlled
Subsidiary" is defined in the Prior Indenture to mean a Subsidiary more than 80%
of the outstanding shares of Voting Stock of which is owned by the Company
and/or other Controlled Subsidiaries. The term "Voting Stock" is defined to mean
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
Consolidation, Merger and Sale of Assets
The Company, without the consent of the Holder or Holders of any of the
outstanding Debt Securities, may consolidate or merge with or into, or convey,
transfer or lease its properties and assets substantially as an entirety, to any
corporation organized under the laws of any domestic jurisdiction, provided that
the successor corporation assumes the Company's obligations on the Debt
Securities and under the Indenture and that after giving effect to the
transaction no Event of Default, and no event which, after notice or lapse of
time would become an Event of Default, has occurred and is continuing, and that
certain other conditions are met. (Section 801)
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Events of Default and Rights of Acceleration
Events of Default. The Indenture defines an Event of Default with
respect to any series of Debt Securities as being certain events involving the
bankruptcy or reorganization of the Company and such other events as may be
established for the Debt Securities of a particular series. (Section 501) No
Event of Default with respect to a particular series of Debt Securities issued
under the Indenture necessarily constitutes an Event of Default with respect to
any other series of Debt Securities issued thereunder. If an Event of Default
with respect to Debt Securities of any series at the time outstanding occurs and
is continuing, either the Trustee or the Holder or Holders of at least 25% in
aggregate principal amount of the outstanding Debt Securities of that series may
declare the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the terms 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 with respect to Debt Securities of any series has been made, but
before a judgment or decree based on acceleration has been obtained, the Holder
or 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)
Limited Rights of Acceleration. The Indenture does not provide for any
right of acceleration of the payment of principal of the Debt Securities upon a
default in the payment of principal or any premium or interest or in the
performance of any covenant or agreement in the Debt Securities or Indenture. In
the event of a default in the payment of principal or any premium or interest or
the performance of any covenant or agreement in the Indenture, the Trustee may,
subject to certain limitations and conditions, seek to enforce payment of such
principal, premium, if any, or interest (including the delivery of any Capital
Securities in exchange for Debt Securities), or the performance of such covenant
or agreement. (Section 503)
The Indenture provides that, subject to the duty of the Trustee in the
case of an Event of Default to act with the required standard of care, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any of the Holders, unless
such Holder or Holders shall have offered to the Trustee reasonable indemnity.
(Sections 601 and 603) Subject to such provisions for the indemnification of the
Trustee, the Holder or 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 Trustee, or exercising any trust or power conferred on the Trustee with
respect to the Debt Securities of that series. (Section 512)
The Company is required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (Section 1007)
Modification and Waiver
Modifications and amendments of the Indenture may be made by the
Company and the Trustee with the consent of the Holder or Holders of a majority
in principal amount of the Debt Securities of all affected series; provided,
however, that no such modification or amendment may, without the consent of the
Holder or Holders of all of the outstanding Debt Securities affected thereby,
(i) change the stated maturity date of the principal of, or any installment of
principal of (or premium, if any) or any interest on, any Debt Security; (ii)
reduce the principal amount of (or premium, if any), or interest on, any Debt
Security, change the method of calculation thereon or reduce the amount payable
on redemption thereof; (iii) reduce the amount of principal of a Debt Security
payable upon acceleration of the maturity thereof; (iv) change the place or
currency of payment of principal of (or premium, if any), or interest on, any
Debt Security; (v) impair the rights of any Holder of any Debt Securities to
conversion rights; (vi) impair the right to institute suit for the enforcement
of any payment on or with respect to any Debt Security; or (vii) reduce the
percentage in principal amount of the Debt Security, the consent of whose Holder
or Holders is required for modification or amendment of the Indenture or for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults. (Sections 901 and 902)
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The Holder or Holders of a majority in principal amount of the Debt
Securities of all affected series may, on behalf of the Holder or Holders of
such Debt Securities, waive compliance by the Company with certain restrictive
provisions of the Indenture. The Holder or Holders of a majority in principal
amount of the Debt Securities of all affected series also may, on behalf of the
Holder or Holders of all such Debt Securities, waive any past default under the
Indenture with respect to such Debt Securities, except a default in the payment
of the principal (or premium, if any), or interest on, any Debt Security or in
respect of a provision which under the Indenture cannot be modified or amended
without the consent of the Holder or Holders of all of the outstanding Debt
Securities affected thereby. (Section 513)
Regarding the Trustee
Chemical Bank is the Trustee under the Indenture. Notice to Chemical
Bank should be directed to its Corporate Trust Office, 55 Water Street, New
York, New York 10041, Attention: Corporate Trustee Administration Department.
Chemical Bank serves as trustee with respect to $50,000,000 aggregate principal
amount of the Company's 8 5/8% Subordinated Notes due 1998, $125,000,000
aggregate principal amount of the Company's 8 1/4% Subordinated Notes due 2002
and $150,000,000 aggregate principal amount of the Company's 8 3/4% Subordinated
Notes due 2004. The Company and certain of the Company's subsidiaries maintain
deposit accounts and banking relations with the Trustee.
DESCRIPTION OF PREFERRED STOCK
General
The following summary does not purport to be complete and is subject in
all respects to applicable Virginia law, the Company's Restated Articles of
Incorporation and Bylaws.
The Company is authorized by its Restated Articles of Incorporation to
issue 2,000,000 shares of Preferred Stock. Preferred Stock of the Company may be
issued in series which may vary as to title and stated value, number of shares
or fractional interests therein, and the dividend, liquidation, redemption,
conversion, voting and other rights, the initial public offering price and
whether interests in the Preferred Stock will be represented by Depositary
Shares. The Board of Directors may fix such terms of any new series of Preferred
Stock from time to time. The ability of the Board of Directors to issue
Preferred Stock, while providing flexibility in connection with possible
acquisitions and other corporate purposes, could, among other things, adversely
affect the voting powers of holders of Common Stock and, under certain
circumstances, may discourage an attempt by others to gain control of the
Company. The Company may amend from time to time its Restated Articles of
Incorporation to increase the number of authorized shares of preferred stock.
Any such amendment would require the approval of the holders of a majority of
the outstanding shares of Common Stock, and the approval of the holders of a
majority of the outstanding shares of all series of preferred stock voting
together as a single class without regard to series. As of the date of this
Prospectus, the Company has no series of preferred stock outstanding.
Pursuant to Crestar's Restated Articles of Incorporation, the Board of
Directors has designated a series of 100,000 shares of Participating Cumulative
Preferred Stock, Series C (the "Series C Preferred Stock"), no shares of which
have been issued. The Series C Preferred Stock was created in connection with
Crestar's shareholder rights plan. See "Description of Common Stock."
The Prospectus Supplement relating to each series of the Preferred
Stock will describe the following terms thereof:
(a) title and stated value of such series;
(b) the number of shares in such series;
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(c) the dividend payment dates and the dividend rate or
method of determination or calculation of such terms applicable to the
series;
(d) applicable redemption provisions, if any;
(e) sinking fund or purchase fund provisions, if any;
(f) the fixed liquidation price and fixed liquidation
premium, if any, applicable to the series;
(g) the rate or basis of exchange or conversion into
other securities or method of determination thereof applicable to the
series, if any;
(h) the conversion rights, if any;
(i) applicable voting rights; and
(j) any other terms applicable thereto.
Redemption
A series of the Preferred Stock may be redeemable, in whole or in part,
at the option of the Company, and may be subject to mandatory redemption
pursuant to a sinking fund, in each case upon terms, at the times and at the
redemption prices set forth in the Prospectus Supplement relating to such
series.
The Prospectus Supplement relating to a series of Preferred Stock that
is subject to mandatory redemption shall specify the number of shares of such
series of Preferred Stock which shall be redeemed by the Company in each year
commencing after a date to be specified, at a redemption price per share to be
specified, together with an amount equal to any accrued and unpaid dividends
thereon to the date of redemption. The redemption price may be payable in cash,
capital stock or in cash received from the net proceeds of the issuance of
capital stock of the Company, as specified in the Prospectus Supplement relating
to such series of Preferred Stock. If the redemption price is payable only from
the net proceeds of the issuance of capital stock of the Company, the terms of
such series may provide that, if no such capital stock shall have been issued or
to the extent the net proceeds from any issuances are insufficient to pay in
full the aggregate redemption price then due, the applicable shares of such
series of Preferred Stock shall automatically and mandatorily be converted into
shares of the applicable capital stock of the Company pursuant to conversion
provisions specified in the Prospectus Supplement relating to such series of
Preferred Stock.
If fewer than all the outstanding shares of any series of the Preferred
Stock are to be redeemed, whether by mandatory or optional redemption, the
selection of the shares to be redeemed shall be determined by lot or pro rata as
may be determined by the Board of Directors or a duly authorized committee
thereof, or by any other method which may be determined by the Board of
Directors or such committee to be equitable. From and after the date of
redemption (unless default shall be made by the Company in providing for the
payment of the redemption price), dividends shall cease to accrue on the shares
of Preferred Stock called for redemption and all rights of the holders thereof
(except the right to receive the redemption price) shall cease.
Conversion Rights
The Prospectus Supplement for any series of Preferred Stock will state
the terms, if any, on which shares of that series are convertible into shares of
Common Stock or another series of preferred stock of the Company. As described
under "Redemption" above, under certain circumstances, the Preferred Stock may
be mandatorily converted into Common Stock or another series of preferred stock
of the Company. The Preferred Stock will have no preemptive rights.
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Dividend Rights
The holders of the Preferred Stock of each series shall be entitled to
receive, if and when declared payable by the Board of Directors, out of assets
available therefor, dividends at, but not exceeding, the dividend rate for such
series (which may be fixed or variable), payable at such intervals and on such
dates as are provided in the resolution of the Board of Directors creating such
series. If such intervals and dividend payment dates shall vary from time to
time for such series, such resolution shall set forth the method by which such
intervals and such dates shall be determined. Such dividends on Preferred Stock
shall be paid before any dividends, other than a dividend payable in Common
Stock of the Company, may be paid upon or set apart for any shares of capital
stock ranking junior to the Preferred Stock in respect of dividends or
liquidation rights (referred to in this Prospectus as "stock ranking junior to
the Preferred Stock").
Voting Rights
Except as indicated below or in the Prospectus Supplement relating to a
particular series of Preferred Stock, or except as expressly required by the
laws of the Commonwealth of Virginia or other applicable law, the holders of the
Preferred Stock will not be entitled to vote. Except as indicated in the
Prospectus Supplement relating to a particular series of Preferred Stock, each
such share will be entitled to one vote on matters on which holders of such
series of the Preferred Stock are entitled to vote. However, as more fully
described below under "- Depositary Shares," if the Company elects to issue
Depositary Shares representing a fraction of a share of a series of Preferred
Stock, each such Depositary Share will, in effect, be entitled to such fraction
of a vote, rather than a full vote. Since each full share of any series of
Preferred Stock shall be entitled to one vote, the voting power of such series,
on matters on which holders of such series and holders of other series of
preferred stock are entitled to vote as a single class, shall depend on the
number of shares in such series, not the aggregate liquidation preference or
initial offering price of the shares of such series of Preferred Stock.
In addition to the foregoing voting rights, under the Virginia Stock
Corporation Act as now in effect, the holders of Preferred Stock will have the
voting rights set forth under "- General" above with respect to amendments to
the Company's Restated Articles of Incorporation which would increase the number
of authorized shares of preferred stock of the Company.
Liquidation Rights
In the event of any liquidation, dissolution or winding up of the
Company, the holders of the Preferred Stock shall be entitled to receive, for
each share thereof, the fixed liquidation or stated value for the respective
series together in all cases with all dividends accrued or in arrears thereon,
before any distribution of the assets shall be made to the holders of any stock
ranking junior to the Preferred Stock. If the assets distributable among the
holders of the Preferred Stock should be insufficient to permit the payment of
the full preferential amounts fixed for all series, then the distribution shall
be made among the holders of each series ratably in proportion to the full
preferential amounts to which they are respectively entitled.
Depositary Shares
General. The Company may, at its option, elect to offer fractional
shares of Preferred Stock, rather than full shares of Preferred Stock. In the
event such option is exercised, the Company will issue to the public receipts
for Depositary Shares, each of which will represent a fraction (to be set forth
in the Prospectus Supplement relating to a particular series of Preferred Stock)
of a share of a particular series of Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement")
between the Company and a bank or trust company selected by the Company having
its principal office in the United States and having a combined capital and
surplus of at least
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$50,000,000 (the "Depositary Bank"). Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, in proportion to
the applicable fraction of a share of Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Preferred Stock
represented thereby (including dividend, voting, redemption and liquidation
rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of the offering. If Depositary
Shares are issued, copies of the forms of Deposit Agreement and Depositary
Receipt will be incorporated by reference to the Registration Statement of which
this Prospectus is a part, and the following summary is qualified in its
entirety by reference to such documents.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary Bank may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Company's expense.
Dividends and Other Distributions. The Depositary Bank will distribute
all cash dividends or other cash distributions received in respect of the
Preferred Stock to the record holders of Depositary Shares relating to such
Preferred Stock in proportion to the number of such Depositary Shares owned by
such holders.
In the event of a distribution other than in cash, the Depositary Bank
will distribute property received by it to the record holders of Depositary
Shares entitled thereto, unless the Depositary Bank determines that it is not
feasible to make such distribution, in which case the Depositary Bank may, with
the approval of the Company, sell such property and distribute the net proceeds
from such sale to such holders.
Redemption of Depositary Shares. If a series of Preferred Stock
represented by Depositary Shares is subject to redemption, the Depositary Shares
will be redeemed from the proceeds received by the Depositary Bank resulting
from the redemption, in whole or in part, of such series of Preferred Stock held
by the Depositary Bank. The redemption price per Depositary Share will be equal
to the applicable fraction of the redemption price per share payable with
respect to such series of the Preferred Stock. Whenever the Company redeems
shares of Preferred Stock held by the Depositary Bank, the Depositary Bank will
redeem as of the same redemption date the number of Depositary Shares
representing the shares of Preferred Stock so redeemed. If fewer than all the
Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will
be selected by lot or pro rata as may be determined by the Depositary Bank.
Voting the Preferred Stock. Upon receipt of notice of any meeting at
which the holders of the Preferred Stock are entitled to vote, the Depositary
Bank will mail the information contained in such notice of meeting to the record
holders of the Depositary Shares relating to such Preferred Stock. Each record
holder of such Depositary Shares on the record date (which will be the same date
as the record date for the Preferred Stock) will be entitled to instruct the
Depositary Bank as to the exercise of the voting rights pertaining to the amount
of the Preferred Stock represented by such holder's Depositary Shares. The
Depositary Bank will endeavor, insofar as practicable, to vote the amount of the
Preferred Stock represented by such Depositary Shares in accordance with such
instructions, and the Company will agree to take all action which may be deemed
necessary by the Depositary Bank in order to enable the Depositary Bank to do
so. The Depositary Bank may abstain from voting shares of the Preferred Stock to
the extent it does not receive specific instructions from the holders of
Depositary Shares representing such Preferred Stock.
Amendment and Termination of the Depositary Agreement. The form of
Depositary Receipt evidencing the Depositary Shares and any provision of the
Deposit Agreement may at any time be amended by agreement between
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the Company and the Depositary Bank. However, any amendment that materially and
adversely alters the rights of the holders of Depositary Shares will not be
effective unless such amendment has been approved by the holders of at least a
majority of the Depositary Shares then outstanding. The Deposit Agreement may be
terminated by the Company or the Depositary only if (i) all outstanding
Depositary Shares have been redeemed or (ii) there has been a final distribution
in respect of the Preferred Stock in connection with any liquidation,
dissolution or winding up of the Company and such distribution has been
distributed to the holders of Depositary Receipts.
Charges of Depositary Bank. The Company will pay all transfer and other
taxes and governmental charges arising solely from the existence of the
depositary arrangements. The Company will pay charges of the Depositary Bank in
connection with the initial deposit of the Preferred Stock and any redemption of
the Preferred Stock. Holders of Depositary Receipts will pay other transfer and
other taxes and governmental charges and such other charges, including a fee for
the withdrawal of shares of Preferred Stock upon surrender of Depositary
Receipts, as are expressly provided in the Deposit Agreement to be for their
accounts.
Miscellaneous. The Depositary Bank will forward to holders of
Depository Receipts all reports and communications from the Company that are
delivered to the Depositary Bank and that the Company is required to furnish to
the holders of the Preferred Stock.
Neither the Depositary Bank nor the Company will be liable if it is
prevented or delayed by law or any circumstance beyond its control in performing
its obligations under the Deposit Agreement. The obligations of the Company and
the Depositary Bank under the Deposit Agreement will be limited to performance
in good faith of their duties thereunder and they will not be obligated to
prosecute or defend any legal proceeding in respect of any Depositary Shares or
Preferred Stock unless satisfactory indemnity is furnished. They may rely upon
written advice of counsel or accountants, or upon information provided by
persons presenting Preferred Stock for deposit, holders of Depositary Receipts
or other persons believed to be competent and on documents believed to be
genuine.
Resignation and Removal of Depositary Bank. The Depositary Bank may
resign at any time by delivering to the Company notice of its election to do so,
and the Company may at any time remove the Depositary Bank, any such resignation
or removal to take effect upon the appointment of a successor Depositary Bank
and its acceptance of such appointment. Such successor Depositary Bank must be
appointed within 60 days after delivery of the notice of resignation or removal
and must be a bank or trust company having its principal office in the United
States and having a combined capital and surplus of at least $50,000,000.
Miscellaneous
The Preferred Stock when issued and full consideration is received for
such Preferred Stock will be fully paid and nonassessable.
DESCRIPTION OF COMMON STOCK
General
The following summary does not purport to be complete and is subject in
all respects to applicable Virginia law, the Company's Restated Articles of
Incorporation and Bylaws, and the Rights Agreement dated June 23, 1989.
The Company is authorized by its Restated Articles of Incorporation to
issue 100,000,000 shares of Common Stock. The Company had 37,709,106 shares of
Common Stock outstanding at September 30, 1995. Each share of Common Stock is
entitled to one vote on all matters submitted to a vote of shareholders. Holders
of Common Stock are entitled to receive dividends when and as declared by the
Board of Directors of the Company out of funds legally available therefor.
Dividends may be paid on the Common Stock only if all dividends on any
outstanding Preferred Stock have been paid or provided for.
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The issued and outstanding shares of Common Stock are fully paid and
nonassessable. Holders of Common Stock have no preemptive or conversion rights
and are not subject to further calls or assessments by the Company.
In the event of the voluntary or involuntary dissolution, liquidation
or winding up of the Company, holders of Common Stock are entitled to receive,
pro rata, after satisfaction in full of the prior rights of creditors and
holders of Preferred Stock, if any, all the remaining assets of the Company
available for distribution.
Directors are elected by a vote of the holders of Common Stock. Holders
of Common Stock are not entitled to cumulative voting rights.
Mellon Bank, N.A. acts as the transfer agent and registrar for the
Common Stock.
Rights
In 1989, pursuant to the Company's shareholder rights plan, the Company
distributed as a dividend one Right for each outstanding share of Common Stock.
Each Right entitles the holder to buy one one-thousandth of a share of Junior
Preferred Stock at an exercise price of $115, subject to adjustment. The Rights
will become exercisable only if a person or group acquires or announces a tender
offer for 10% or more of the outstanding Common Stock. When exercisable, Crestar
may issue a share of Common Stock in exchange for each Right other than those
held by such person or group. If a person or group acquires 30% or more of the
outstanding Common Stock, each Right will entitle the holder, other than the
acquiring person, upon payment of the exercise price, to acquire Series C
Preferred Stock or, at the option of the Company, Common Stock, having a value
equal to twice the Right's exercise price. If Crestar is acquired in a merger or
other business combination or if 50% of its earnings power is sold, each Right
will entitle the holder, other than the acquiring person, to purchase securities
of the surviving company having a market value equal to twice the exercise price
of the Right. The Rights will expire on June 23, 1999, and may be redeemed by
the Company at any time prior to the tenth day after an announcement that a 10%
position has been acquired, unless such time period has been extended by the
Board of Directors.
Until such time as a person or group acquires or announces a tender
offer for 10% or more of the Common Stock, (i) the Rights will be evidenced by
the Common Stock certificates and will be transferred with and only with such
Common Stock certificates, and (ii) the surrender for transfer of any
certificate for Common Stock will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. Rights may not
be transferred, directly or indirectly (i) to any person or group that has
acquired, or obtained the right to acquire, beneficial ownership of 10% or more
of the Rights (an "Acquiring Person"); (ii) to any person in connection with a
transaction in which such person becomes an Acquiring Person; or (iii) to any
affiliate or associate of any such person. Any Right that is the subject of a
purported transfer to any such person will be null and void.
The Rights may have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that acquires more than 10% of
the outstanding shares of Common Stock of the Company if certain events
thereafter occur without the Rights having been redeemed. However, the Rights
should not interfere with any merger or other business combination approved by
the Board of Directors and the shareholders because the Rights are redeemable
under certain circumstances.
Virginia Stock Corporation Act
The Virginia Stock Corporation Act contains provisions governing
"Affiliated Transactions." These provisions, with several exceptions discussed
below, require approval of material acquisition transactions between a Virginia
corporation and any holder of more than 10% of any class of its outstanding
voting shares (an "Interested Shareholder") by the holders of at least
two-thirds of the remaining voting shares. Affiliated Transactions subject to
this approval requirement include mergers, share exchanges, material
dispositions of corporate assets not in the ordinary course of business, any
dissolution of the corporation proposed by or on behalf of an Interested
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Shareholder, or any reclassification, including reverse stock splits,
recapitalization or merger of the corporation with its subsidiaries which
increases the percentage of voting shares owned beneficially by an Interested
Shareholder by more than 5%.
For three years following the time that an Interested Shareholder
becomes an owner of 10% of the outstanding voting shares, a Virginia corporation
cannot engage in an Affiliated Transaction with such Interested Shareholder
without approval of two-thirds of the voting shares other than those shares
beneficially owned by the Interested Shareholder, and majority approval of the
"Disinterested Directors." A Disinterested Director means, with respect to a
particular Interested Shareholder, a member of the Company's Board of Directors
who was (1) a member on the date on which an Interested Shareholder became an
Interested Shareholder and (2) recommended for election by, or was elected to
fill a vacancy and received the affirmative vote of, a majority of the
Disinterested Directors then on the Board. At the expiration of the three year
period, the statute requires approval of Affiliated Transactions by two-thirds
of the voting shares other than those beneficially owned by the Interested
Shareholder.
The principal exceptions to the special voting requirement apply to
transactions proposed after the three year period has expired and require either
that the transaction be approved by a majority of the corporation's
Disinterested Directors or that the transaction satisfy the fair-price
requirements of the statute. In general, the fair-price requirement provides
that in a two-step acquisition transaction, the Interested Shareholder must pay
the shareholders in the second step either the same amount of cash or the same
amount and type of consideration paid to acquire the Virginia corporation's
shares in the first step.
None of the foregoing limitations and special voting requirements
applies to a transaction with an Interested Shareholder whose acquisition of
shares making such person an Interested Shareholder was approved by a majority
of the Virginia corporation's Disinterested Directors.
These provisions were designed to deter certain takeovers of Virginia
corporations. In addition, the statute provides that, by affirmative vote of a
majority of the voting shares other than shares owned by any Interested
Shareholder, a corporation can adopt an amendment to its articles of
incorporation or bylaws providing that the Affiliated Transactions provisions
shall not apply to the corporation. The Company has not "opted out" of the
Affiliated Transactions provisions.
Virginia law also provides that shares acquired in a transaction that
would cause the acquiring person's voting strength to meet or exceed any of
three thresholds (20%, 33 1/3% or 50%) have no voting rights unless granted by a
majority vote of shares not owned by the acquiring person or any officer or
employee-director of the Virginia corporation. This provision empowers an
acquiring person to require the Virginia corporation to hold a special meeting
of shareholders to consider the matter within 50 days of its request.
PLAN OF DISTRIBUTION
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered, such as, where applicable, (i) in the case of
Debt Securities, the specific designation, aggregate principal amount, currency,
denomination, maturity, priority, interest rate (which may be variable or
fixed), time of payment of interest, terms for optional redemption or repayment
or for sinking fund payments, terms for conversion into or exchange for Capital
Securities or other Offered Securities, and the initial public offering price;
(ii) in the case of Preferred Stock, the specific title and stated value, number
of shares or fractional interests therein, and the dividend, liquidation,
redemption, conversion, voting and other rights, the initial public offering
price, and whether interests in the Preferred Stock will be represented by
Depositary Shares; (iii) in the case of Common Stock, the initial offering
price; and (iv) in the case of all Offered Securities, whether such Offered
Security will be offered separately or as a unit with other Offered Securities,
will be set forth in a Prospectus Supplement. The Prospectus Supplement will
also contain information, where applicable, about certain United States federal
income tax
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considerations relating to, and any listing on a securities exchange of, the
Offered Securities covered by the Prospectus Supplement.
The Offered Securities may be sold for public offering to underwriters
or dealers, which may be a group of underwriters represented by one or more
managing underwriters, or through such firms or other firms acting alone or
through dealers. The Offered Securities may also be sold through agents to
investors. The names of any agents, dealers or managing underwriters, and of any
underwriters, involved in the sale of the Offered Securities in respect of which
this Prospectus is being delivered and the applicable agent's commission,
dealer's purchase price or underwriter's discount will be set forth in the
Prospectus Supplement. The net proceeds to the Company from such sale will also
be set forth in the Prospectus Supplement. Any underwriters, dealers or agents
participating in the offering of Offered Securities may be deemed "underwriters"
within the meaning of the Securities Act.
Any underwriting compensation paid by the Company to underwriters or
agents in connection with the offering of Offered Securities and any discounts,
concessions or commissions allowed by underwriters to participating dealers will
be set forth in the Prospectus Supplement. Underwriters, dealers and agents
participating in the distribution of the Offered Securities may be deemed to be
underwriters, and any discounts and commissions received by them and any profit
realized by them on resale of the Offered Securities may be deemed to be
underwriting discounts and commissions under the Securities Act.
If an underwriter or underwriters are utilized in the sale of the
Offered Securities, the Company will execute an underwriting agreement with such
underwriter or underwriters at the time an agreement for such sale is reached.
The underwriter or underwriters with respect to an underwritten offering of
Offered Securities will be set forth in the Prospectus Supplement relating to
such offering and, if an underwriting syndicate is used, the managing
underwriter or underwriters will be set forth on the cover of such Prospectus
Supplement. If any underwriter or underwriters are utilized in the sale of the
Offered Securities, the underwriting agreement will provide that the obligations
of the underwriters are subject to certain conditions precedent and that the
underwriters with respect to a sale of Offered Securities will be obligated to
purchase all such Offered Securities if any are purchased. In connection with
the sale of Offered Securities, underwriters may be deemed to have received
compensation from the Company in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Offered
Securities for whom they may act as agent. Underwriters may sell Offered
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agent. Under such
underwriting agreements, underwriters, dealers and agents who participate in the
distribution of the Offered Securities, may be entitled to indemnification by
the Company against certain civil liabilities, including liabilities under the
Securities Act or contribution with respect to payments which the underwriters,
dealers or agents may be required to make in respect thereof.
Certain of the underwriters and their affiliates may be customers of,
engage in transactions with, and perform services for, the Company and its
Subsidiaries and the Trustee in the ordinary course of business.
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for
the Company by Hunton & Williams, Richmond, Virginia, counsel for the Company.
Gordon F. Rainey, Jr., a member of Crestar's Board of Directors, is a partner
with Hunton & Williams.
EXPERTS
The consolidated financial statements of the Company incorporated in
this Prospectus by reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994 have been so incorporated in reliance upon the
report of KPMG Peat Marwick LLP, independent auditors, incorporated herein by
reference, and
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upon the authority of said firm as experts in accounting and auditing. The
report of KPMG Peat Marwick LLP covering the December 31, 1994 consolidated
financial statements refers to a change in accounting for certain investments in
debt and equity securities. To the extent that KPMG Peat Marwick LLP audit and
report on future consolidated financial statements of the Company and consent to
the use of their reports thereon, such future consolidated financial statements
also will be incorporated by reference in the Registration Statement in reliance
upon their reports and said authority.
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PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting compensation, are as
follows:
Securities and Exchange Commission registration fee............... $ 60,000
Blue Sky fees and expenses........................................ 20,000
Legal fees........................................................ 100,000
Accounting fees................................................... 30,000
Rating agency fees................................................ 165,000
Trustee fees...................................................... 30,000
Printing, engraving and postage expenses.......................... 25,000
Miscellaneous expenses ........................................... 10,000
--------
Total..................................................... $440,000
========
Item 15. Indemnification of Directors and Officers
The Company's Restated Articles of Incorporation implement the
provisions of the Virginia Stock Corporation Act, which provide for the
indemnification of the Company's directors and officers in a variety of
circumstances, which may include indemnification for liabilities under the
Securities Act. Under sections 13.1-697 and 13.1-702 of the Virginia Stock
Corporation Act, a Virginia corporation generally is authorized to indemnify its
directors and officers in civil or criminal actions if they acted in good faith
and believed their conduct to be in the best interests of the corporation and,
in the case of criminal actions, had no reasonable cause to believe that the
conduct was unlawful. The Company's Restated Articles of Incorporation require
indemnification of directors and officers with respect to certain liabilities,
expenses and other amounts imposed upon them by reason of having been a director
or officer, except in the case of willful misconduct or a knowing violation of
criminal law. The Company also carries insurance on behalf of directors,
officers, employees or agents that may cover liabilities under the Securities
Act. In addition, the Virginia Stock Corporation Act and the Company's Restated
Articles of Incorporation eliminate the liability of a director or officer of
the Company in a shareholder or derivative proceeding. This elimination of
liability will not apply in the event of willful misconduct or a knowing
violation of the criminal law or any federal or state securities law. Sections
13.1-692.1 and 13.1-696 to -704 of the Virginia Stock Corporation Act are hereby
incorporated herein by reference.
Item 16. Exhibits
1 --Proposed Form of Underwriting Agreement to be entered into
between the Company and the Underwriters*
3.1 --Restated Articles of Incorporation (incorporated herein by
reference to Exhibit 3(a) of the Company's Annual Report on
Form 10-K for the year ended December 31, 1990)
3.2 --Amendment to Restated Articles of Incorporation dated May 13, 1993
(incorporated herein by reference to Exhibit 3.2 of the Company's
Registration Statement on Form S-3 No. 33-50387
3.3 --Bylaws (incorporated herein by reference to Exhibit 3(b) of the
Company's Annual Report on Form 10-K for the year ended December
31, 1992)
II-1
<PAGE>
4.1 --Indenture between the Company and Chemical Bank (incorporated herein
by reference to Exhibit 4.1 of the Company's Registration
Statement on Form S-3 No. 33-50387)
4.2 --Rights Agreement dated June 23, 1989 between the Company and Mellon
Bank, N.A., as Rights Agent (incorporated herein by reference
to Exhibit 4.1 of the Company's Current Report on Form 8-K
dated June 23, 1989)
4.3 --Proposed Form of Deposit Agreement to be entered into by the Company*
4.4 --Proposed Form of Deposit Receipt*
5 --Opinion of Hunton & Williams
12 --Statement re computation of Ratios
23.1 --Consent of KPMG Peat Marwick
23.2 --Consent of Hunton & Williams (included in Exhibit 5)
24 --Powers of Attorney of Directors and Officers of the Company (included
on signature pages)
25 --Statement of Eligibility and Qualification on Form T-1 of Chemical
Bank, as the Trustee, under the Trust Indenture Act of 1939
(incorporated herein by reference to the Company's Registration
Statement on Form S-3 No. 33-50387)
- --------------
*To be filed subsequent to the effectiveness of this Registration Statement
and incorporated by reference pursuant to a Report on Form 8-K.
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;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange
II-2
<PAGE>
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Exchange Act) 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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, 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 the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes to file an application for
the purpose of determining the eligibility of a trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act of 1939 in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Trust Indenture Act of 1939.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Richmond,
Commonwealth of Virginia, on November 16, 1995.
CRESTAR FINANCIAL CORPORATION
(Registrant)
By: /s/ Richard G. Tilghman
-------------------------------
Richard G. Tilghman
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on November 16, 1995. Each of the directors and/or officers
of Crestar Financial Corporation whose signature appears below hereby appoints
John C. Clark, III, Lathan M. Ewers, Jr. and David M. Carter, and each of them
severally, as his attorney-in-fact to sign in his name and behalf, in any and
all capacities stated below and to file with the Commission, any and all
amendments, including post-effective amendments to this registration statement,
making such changes in the registration statement as appropriate, and generally
to do all such things in their behalf in their capacities as officers and
directors to enable Crestar Financial Corporation to comply with the provisions
of the Securities Act of 1933, and all requirements of the Securities and
Exchange Commission.
Signature Title
/s/ Richard G. Tilghman Chairman of the Board and Chief
- -------------------------- Executive Officer and Director
Richard G. Tilghman (Principal Executive Officer)
/s/ James M. Wells, III President and Director
- --------------------------
James M. Wells, III
/s/ Richard F. Katchuk Corporate Executive Vice President
- -------------------------- and Chief Financial Officer
Richard F. Katchuk (Principal Financial Officer)
/s/ James D. Barr Group Executive Vice President,
- -------------------------- Controller and Treasurer
James D. Barr (Principal Accounting Officer)
- -------------------------- Director
Richard M. Bagley
- -------------------------- Director
J. Carter Fox
II-4
<PAGE>
- -------------------------- Director
Bonnie Guiton Hill
/s/ Gene A. James Director
- --------------------------
Gene A. James
/s/ H. Gordon Leggett, Jr. Director
- --------------------------
H. Gordon Leggett, Jr.
- -------------------------- Director
Charles R. Longsworth
/s/ Patrick J. Maher Director
- --------------------------
Patrick J. Maher
/s/ Frank E. McCarthy Director
- --------------------------
Frank E. McCarthy
- -------------------------- Director
Paul D. Miller
- -------------------------- Director
G. Gilmer Minor, III
/s/ Gordon F. Rainey, Jr. Director
- --------------------------
Gordon F. Rainey, Jr.
/s/ Frank S. Royal, M.D. Director
- --------------------------
Frank S. Royal, M.D.
/s/ Eugene P. Trani Director
- --------------------------
Eugene P. Trani
- -------------------------- Director
L. Dudley Walker
/s/ Karen Hastie Williams Director
- --------------------------
Karen Hastie Williams
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Exhibit Page
<S> <C>
1 --Proposed Form of Underwriting Agreement to be entered into between
the Company and the Underwriters*
3.1 --Restated Articles of Incorporation (incorporated herein by reference
to Exhibit 3(a) of the Company's Annual Report on Form 10-K for the
year ended December 31, 1990)
3.2 --Amendment to Restated Articles of Incorporation dated May 13, 1993
(incorporated herein by reference to Exhibit 3.2 of the Company's
Registration Statement on Form S-3 No. 33-50387
3.3 --Bylaws (incorporated herein by reference to Exhibit 3(b) of the
Company's Annual Report on Form 10-K for the year ended December 31,
1992)
4.1 --Indenture between the Company and Chemical Bank (incorporated
herein by reference to Exhibit 4.1 of the Company's
Registration Statement on Form S-3 No. 33-50387)
4.2 --Rights Agreement dated June 23, 1989 between the Company and Mellon
Bank, N.A., as Rights Agent (incorporated herein by reference to
Exhibit 4.1 of the Company's Current Report on Form 8-K dated June 23,
1989)
4.3 --Proposed Form of Deposit Agreement to be entered into
by the Company*
4.4 --Proposed Form of Deposit Receipt*
5 --Opinion of Hunton & Williams
12 --Statement re computation of Ratios
23.1 --Consent of KPMG Peat Marwick
23.2 --Consent of Hunton & Williams (included in Exhibit 5)
24 --Powers of Attorney of Directors and Officers of the Company
(included on signature pages)
25 --Statement of Eligibility and Qualification on Form T-1 of
Chemical Bank, as the Trustee, under the Trust Indenture
Act of 1939 (incorporated herein by reference to the
Company's Registration Statement on Form S-3 No. 33-50387)
</TABLE>
- --------------
*To be filed subsequent to the effectiveness of this Registration Statement and
incorporated by reference pursuant to a Report on Form 8-K.
II-6
EXHIBIT 5
HUNTON & WILLIAMS
951 East Byrd Street
Richmond, Virginia 23219
FILE NO.: 33411.001109
November 16, 1995
Crestar Financial Corporation
919 East Main Street
P.O. Box 26665
Richmond, Virginia 23261-6665
Crestar Financial Corporation --
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Crestar Financial Corporation, a
Virginia corporation (the "Company"), in connection with the registration by the
Company of (a) an aggregate of $300,000,000 of its (i) unsecured subordinated
debt securities (the "Debt Securities"), (ii) shares of its preferred stock (the
"Preferred Stock"), and (iii) shares of its common stock (the "Common Stock"),
and (b) an indeterminate number of (i) preferred depositary shares of the
Company to be evidenced by depositary receipts (the "Depositary Shares") and
(ii) shares of Common Stock (the Debt Securities, the Preferred Stock, the
Common Stock and the Depositary Shares, collectively, the "Securities"), as set
forth in the Registration Statement on Form S-3 (the "Registration Statement")
that is being filed on the date hereof with the Securities and Exchange
Commission (the "Commission") by the Company pursuant to the Securities Act of
1933, as amended. The Securities are to be issued in one or more series and are
to be sold from time to time as set forth in the Registration Statement, the
Prospectus contained therein (the "Prospectus") and any amendments or
supplements thereto.
In rendering this opinion, we have relied upon, among other things, our
examination of such records of the Company and certificates of its officers and
of public officials as we have deemed necessary.
Based upon the foregoing and the further qualifications stated below,
we are of the opinion that:
1. The Company is duly incorporated, validly existing and in good
standing under the laws of the Commonwealth of Virginia; and
2. When (a) the terms of any class or series of the Securities have
been authorized by appropriate corporate action of the Company and (b) the
Securities have been issued and sold upon the terms and conditions set forth in
the Registration Statement, the Prospectus and the applicable supplement to the
Prospectus, and with respect to the Debt Securities, such Debt Securities have
been duly executed, authenticated and delivered in
<PAGE>
accordance with the Indenture, dated as of September 1, 1993, between the
Company and Chemical Bank, then (x) the Debt Securities will be validly
authorized and issued and binding obligations of the Company and (y) the
Preferred Stock and the Common Stock will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement and to the statement made in reference
to this firm under the caption "Legal Matters" in the Registration Statement.
Very truly yours,
HUNTON & WILLIAMS
EXHIBIT 12
CRESTAR FINANCIAL CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
($ in thousands)
<TABLE>
<CAPTION>
Nine Months
Ended Year Ended
September 30, December 31,
--------------- ---------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
(A) Income before income taxes $214,707 $190,031 $254,698 $203,480 $ 99,490 $ 39,821 $ 71,093
(B) Interest capitalized 410 0 107 0 -- -- --
Fixed charges (excluding interest
capitalized):
Amortization of debt issuance costs 200 192 261 171 128 104 224
Interest component of net rent
expense 4,837 4,286 5,791 5,412 5,673 5,063 4,375
Interest on short-term borrowing 51,917 33,190 48,169 43,787 38,096 101,164 179,883
Interest on long-term debt 24,075 13,399 19,507 17,489 17,197 16,021 16,972
-------- -------- -------- -------- -------- -------- --------
(C) Fixed charges excluding interest on
deposits 81,029 51,066 73,728 66,859 61,094 122,982 201,453
Interest on deposits 245,341 203,420 276,542 244,341 326,240 440,196 486,790
-------- -------- -------- -------- -------- -------- --------
(D) Fixed charges including interest on
deposits 326,370 264,486 350,270 311,200 387,334 563,178 688,243
Preferred stock dividends 0 0 0 2,221 2,475 2,576 2,661
Income tax rate 34.2% 33.3% 33.6% 31.0% 19.8% 15.2% 14.0%
(E) Pre-tax earnings required to
cover preferred stock dividends 0 0 0 3,217 3,086 3,038 3,094
EARNINGS TO FIXED CHARGES:
Excluding interest on deposits
(A+C)/(B+C) 3.6 4.7 4.4 4.0 2.6 1.3 1.4
Including interest on deposits
(A+D)/(B+D) 1.7 1.7 1.7 1.7 1.3 1.1 1.1
EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDEND
REQUIREMENTS:
Excluding interest on deposits
(A+C)/(B+C+E) 3.6 4.7 4.4 3.9 2.5 1.3 1.3
Including interest on deposits
(A+D)/(B+D+E) 1.7 1.7 1.7 1.6 1.2 1.1 1.1
</TABLE>
EXHIBIT 23.1
The Board of Directors
Crestar Financial Corporation:
We consent to the use of our report included in Crestar Financial
Corporation's Annual Report on Form 10-K for the year ended December 31, 1994
incorporated herein by reference and to the reference to our firm under the
heading "Experts" in the Prospectus. Our report refers to a change in accounting
for certain investments in debt and equity securities.
KPMG Peat Marwick LLP
Richmond, Virginia
November 16, 1995
