<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 30, 1995
REGISTRATION NO. 33-55311
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO.1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CENTRAL FIDELITY BANKS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
VIRGINIA 54-1091649
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (IRS EMPLOYER IDENTIFICATION NUMBER)
</TABLE>
1021 EAST CARY STREET
RICHMOND, VIRGINIA 23219
(804) 782-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
WILLIAM N. STOYKO, ESQ.
CORPORATE EXECUTIVE OFFICER AND SECRETARY
CENTRAL FIDELITY BANKS, INC.
1021 EAST CARY STREET
RICHMOND, VIRGINIA 23219
(804) 697-7145
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
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<S> <C>
WILLIAM H. SCHWARZSCHILD, III, ESQ. ROBERT H. CRAFT, JR., ESQ.
ROBERT E. SPICER, JR., ESQ. SULLIVAN & CROMWELL
WILLIAMS, MULLEN, CHRISTIAN & DOBBINS 1701 PENNSYLVANIA AVENUE, N.W.
1021 EAST CARY STREET, 16TH FLOOR WASHINGTON, D.C. 20006
RICHMOND, VIRGINIA 23219 (202) 956-7500
(804) 643-1991
</TABLE>
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, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. []
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. []
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 30, 1995 [LOGO]
$500,000,000
CENTRAL FIDELITY BANKS, INC.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
Central Fidelity Banks, Inc. ("Central Fidelity" or the "Corporation") may
offer from time to time (i) debt securities of the Corporation (the "Debt
Securities"), consisting of debentures, notes or other unsecured evidences of
indebtedness, which may be senior (the "Senior Debt Securities") or subordinated
(the "Subordinated Debt Securities"), and which may be convertible, at the
option of the holder, into common stock of the Corporation, (ii) shares of
preferred stock, consisting of Preferred Stock, par value $100.00 per share, and
1983 Preferred Stock, par value $25.00 per share, of the Corporation (together,
the "Preferred Stock"), which may be convertible, at the option of the holder,
into common stock of the Corporation, or (iii) common stock, par value $5.00 per
share, of the Corporation (the "Common Stock"), at prices and on terms to be
determined at the time of sale. Each share of Common Stock also represents one
preferred share purchase right under the Corporation's Shareholder Rights Plan.
See "Description of Capital Stock -- Shareholder Rights Plan." The Debt
Securities, Preferred Stock and Common Stock are collectively referred to herein
as the "Securities". The Debt Securities will be unsecured obligations of the
Corporation. The Senior Debt Securities will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Corporation, and the
Subordinated Debt Securities will be subordinated as described herein under
"Description of Debt Securities -- Subordination". The Debt Securities,
Preferred Stock and Common Stock may be offered, separately or together, in
separate series, up to an aggregate principal amount and initial offering price
of $500,000,000, at prices and on terms to be set forth in a Prospectus
Supplement.
The accompanying Prospectus Supplement sets forth with regard to the
particular Securities in respect of which this Prospectus is being delivered (i)
in the case of Debt Securities, such terms as, including but not limited to,
maturity, any subordination, redemption, conversion or rate of interest (which
may be fixed or floating), time of payment of any interest, principal amount,
the initial public offering price, any restrictive covenants and the terms of
the offering thereof, (ii) in the case of Preferred Stock, such terms as,
including but not limited to, the series designation, number of shares to be
issued, any dividend, liquidation, redemption, conversion, voting or other
rights, the initial public offering price and the terms of the offering thereof,
and (iii) in the case of Common Stock, the number of shares to be issued, the
initial public offering price and the terms of the offering thereof.
The Common Stock is quoted on the Nasdaq National Market under the symbol
"CFBS". The Prospectus Supplement will also contain information, where
applicable, as to any listing on a securities exchange or approval for quotation
in the over-the-counter market of the Securities covered by such Prospectus
Supplement.
The Corporation may sell Securities to or through underwriters acting as
principals for their own account or as agents, and also may sell Securities
directly to other purchasers or through agents designated from time to time. The
accompanying Prospectus Supplement sets forth the names of any underwriters or
agents involved in the sale of the Securities in respect of which this
Prospectus is being delivered, the amounts of Securities, if any, to be
purchased by underwriters and the compensation, if any, of such underwriters or
agents. See "Plan of Distribution".
THE SECURITIES OFFERED HEREBY (I) ARE NOT GUARANTEED OR INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY, (II) ARE
NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED BY ANY BANK, INCLUDING ANY
SUBSIDIARY OF THE CORPORATION, AND (III) INVOLVE INVESTMENT RISK, INCLUDING
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
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.
[RED HERRING]
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
AVAILABLE INFORMATION
Central Fidelity is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the offices of
the Commission, at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and
at regional offices of the Commission at the following locations: 500 West
Madison Street, Chicago, Illinois 60661-2511; and 7 World Trade Center, 13th
Floor, 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.
This Prospectus constitutes a part of a registration statement on Form S-3
(the "Registration Statement") filed by Central Fidelity with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"). As
permitted by the rules and regulations of the Commission, this Prospectus omits
certain information contained in the Registration Statement. For further
information, reference is hereby made to the Registration Statement and to the
exhibits thereto, which may be inspected and copied in the manner and at the
locations described above. Statements contained herein concerning provisions of
any document filed as an exhibit to the Registration Statement, incorporated by
reference herein or otherwise filed with the Commission are not necessarily
complete, and each such statement is qualified in its entirety by reference to
the copy of such document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by Central
Fidelity are incorporated herein by reference:
(a) Annual Report on Form 10-K for the year ended December 31, 1994;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1995; and
(c) Current Reports on Form 8-K dated February 7, 1995 and June 12, 1995.
All documents filed by Central Fidelity pursuant to Sections 13 (a), 13
(c), 14 and 15 (d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering contemplated hereby shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained herein or 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
also is or is deemed to be incorporated by reference herein modifies or
supersedes such earlier statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
CENTRAL FIDELITY 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 CERTAIN EXHIBITS TO SUCH DOCUMENTS). REQUESTS SHOULD BE DIRECTED TO:
CENTRAL FIDELITY BANKS, INC., P.O. BOX 27602, RICHMOND, VIRGINIA 23261,
ATTENTION: SUSAN L. MISTR, TELEPHONE NUMBER (804) 697-7261.
2
<PAGE>
THE CORPORATION
Central Fidelity, a Virginia corporation headquartered in Richmond,
Virginia, is a bank holding company which traces its origin to 1865. As of March
31, 1995, Central Fidelity had assets of $10.1 billion, deposits of $7.3
billion, loans of $5.8 billion and shareholders' equity of $744.7 million (prior
to adjustment as required by Statement of Financial Accounting Standards No.
115). Based on total assets as of that date, Central Fidelity was the third
largest bank holding company headquartered in Virginia.
Central Fidelity serves only Virginia markets, primarily through its
wholly-owned banking subsidiary Central Fidelity National Bank, a national
banking association (the "Bank"). The Bank operates through a statewide network
of 230 branch offices and 194 automated teller machines located in five regions:
Eastern Region, including Norfolk and the Hampton Roads area; Capital Region,
including the Richmond area; Northern Region, including Fredericksburg and
northern Virginia; Southwestern Region, including Roanoke and southwestern
Virginia; and Western Region, including Lynchburg, Charlottesville and
Harrisonburg.
Central Fidelity provides a wide range of banking and related financial
services to a broad customer base of individuals, corporations, institutions and
governments located primarily in Virginia. In addition to accepting funds for
deposits and making loans, the Bank offers credit cards, investment services,
cash management services and international banking services, and makes available
annuities and mutual fund products. Through the Bank's Financial Services Group,
Central Fidelity generates additional non-interest income by sales of trust and
fiduciary services.
At March 31, 1995, the Bank's loan portfolio was approximately 60% retail,
including residential mortgages, and 40% commercial. Central Fidelity places
particular emphasis on retail and middle market business customers.
Central Fidelity strives to provide superior customer service and
satisfaction through highly trained professionals. Senior management has an
average of 17 years of service with the Corporation and an average age of 47.
The Corporation's executive offices are located at 1021 East Cary Street,
Richmond, Virginia 23219. Its mailing address is P.O. Box 27602, Richmond,
Virginia 23261, and its telephone number is (804)782-4000.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the periods indicated. Earnings are comprised of income before federal income
taxes plus fixed charges. Fixed charges include interest expense (including the
interest factor of capitalized leases and amortization of deferred debt expense)
plus the portion of rental payments under operating leases deemed to be
interest. There were no shares of Preferred Stock outstanding during any of the
periods below indicated, and therefore, the ratios of earnings to combined fixed
charges and preferred stock dividend requirements are the same as those
presented in the table. Separate ratios are presented based on the inclusion or
exclusion of interest on deposits in the calculation of fixed charges.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEARS ENDED DECEMBER 31,
1995 1994 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges:
Excluding interest on deposits............. 2.23x 3.55x 2.37x 3.72x 3.98x 2.70x 2.21x
Including interest on deposits............. 1.36x 1.61x 1.37x 1.50x 1.38x 1.25x 1.21x
</TABLE>
USE OF PROCEEDS
The net proceeds from the sale of the Securities will be used for general
corporate purposes, including investments in, or extensions of credit to, the
Bank and other subsidiaries, and for such other uses as may be set forth in the
accompanying Prospectus Supplement.
3
<PAGE>
REGULATORY MATTERS
THE FOLLOWING DISCUSSION SETS FORTH CERTAIN OF THE ELEMENTS OF THE
COMPREHENSIVE REGULATORY FRAMEWORK APPLICABLE TO BANK HOLDING COMPANIES AND
BANKS AND PROVIDES CERTAIN SPECIFIC INFORMATION RELEVANT TO THE CORPORATION AND
ITS SUBSIDIARIES. FEDERAL REGULATION OF FINANCIAL INSTITUTIONS SUCH AS THE
CORPORATION AND ITS SUBSIDIARIES IS INTENDED PRIMARILY FOR THE PROTECTION OF
DEPOSITORS AND THE DEPOSIT INSURANCE FUNDS OF THE FEDERAL DEPOSIT INSURANCE
CORPORATION BANK INSURANCE FUND RATHER THAN SHAREHOLDERS OR OTHER CREDITORS. SEE
ALSO "AVAILABLE INFORMATION" AND "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE".
GENERAL
As a bank holding company, the Corporation is subject to the regulation and
supervision of the Board of Governors of the Federal Reserve System (the
"Federal Reserve") under the Bank Holding Company Act of 1956, as amended (the
"BHCA"). Under the BHCA, bank holding companies may not in general directly or
indirectly acquire the ownership or control of more than 5% of the voting shares
or substantially all of the assets of any company, including a bank, without the
prior approval of the Federal Reserve. The BHCA also restricts the types of
activities in which a bank holding company and its subsidiaries may engage.
Generally, activities are limited to banking and activities found by the Federal
Reserve to be so closely related to banking as to be proper incidents thereto.
On September 29, 1994, the Riegel-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Interstate Banking Act"), which eliminates the
federal restrictions on interstate banking, was enacted. This legislation
generally authorizes interstate acquisitions of banks by bank holding companies
without geographic limitations commencing September 29, 1995 and authorizes
interstate mergers of banks after May 31, 1997, subject to the ability of states
to opt-out. In addition, the Interstate Banking Act recognizes state legislation
which accelerates the implementation of interstate branching and mergers under
certain circumstances. Legislation was enacted by Virginia effective July 1,
1995 which authorizes certain interstate branching and merger transactions
contemplated by the Interstate Banking Act. The elimination of interstate
banking restrictions will have no immediate effect on the Corporation's
long-standing strategy to serve only Virginia markets. It is uncertain at this
time what effect the elimination of interstate banking restrictions will have on
the competitive environment in Virginia in the future.
The Bank is subject to supervision and examination by applicable federal
and state banking agencies. The Bank is a national banking association subject
to regulation and supervision by the Comptroller of the Currency (the
"Comptroller"). In addition, the Bank's deposits are insured by the Federal
Deposit Insurance Corporation (the "FDIC"). The Bank is subject to various
requirements and restrictions under federal and state law, including
requirements to maintain reserves against deposits, restrictions on the types
and amounts of loans that may be granted and the interest that may be charged
thereon and limitations on the types of investments that may be made, activities
that may be engaged in, and types of services that may be offered. Various
consumer laws and regulations also affect the operations of the Bank. In
addition to the impact of such regulation, commercial banks are affected
significantly by the actions of the Federal Reserve as it attempts to control
the money supply and credit availability in order to influence the economy.
PAYMENT OF DIVIDENDS
The Corporation is a legal entity separate and distinct from its banking
and other subsidiaries. The principal source of cash flow of the Corporation,
including cash flow to pay dividends on its stock or principal (premium, if any)
and interest on debt securities, is dividends from the Bank. There are statutory
and regulatory limitations on the payment of dividends by the Bank to the
Corporation, as well as by the Corporation to its shareholders.
The Bank, as a national bank, is required by federal law to obtain the
prior approval of the Comptroller for the payment of dividends if the total of
all dividends declared by the board of directors of the Bank in any year will
exceed the total of (i) its net profits (as defined and interpreted by
regulation) for that year plus (ii) the retained net profits (as defined and
interpreted by regulation) for the preceding two years, less any required
transfers to surplus. A national bank also can pay dividends only to the extent
that retained net profits (including the portion transferred to surplus) exceed
bad debts (as defined by regulation).
If, in the opinion of the applicable federal bank regulatory authority, a
depository institution or a holding company is engaged in or is about to engage
in an unsafe or unsound practice, such authority may require, after notice and
hearing, that such institution or holding company cease and desist from such
practice. The federal banking agencies have indicated that paying dividends that
deplete a depository institution's or holding company's capital base to an
inadequate level would be
4
<PAGE>
such an unsafe and unsound banking practice. Moreover, the Federal Reserve, the
Comptroller and the FDIC have issued policy statements which provide that bank
holding companies and insured depository institutions generally should only pay
dividends out of current operating earnings.
In addition, under the Federal Deposit Insurance Corporation Improvement
Act of 1991 ("FDICIA"), an FDIC-insured depository institution may not make
capital distributions (including the payment of dividends) or pay any management
fees to its holding company or pay any dividend if it is undercapitalized or if
such payment would cause it to become undercapitalized. See " -- FDICIA".
At March 31, 1995, under dividend restrictions imposed under applicable
federal and state laws, the Bank, without obtaining regulatory approval, could
declare aggregate dividends of approximately $115 million.
The payment of dividends by the Corporation and the Bank may also be
affected or limited by other factors, such as the requirement to maintain
adequate capital above regulatory guidelines.
TRANSACTIONS WITH AFFILIATES
There are various legal restrictions on the extent to which the Corporation
and its nonbank subsidiaries can borrow or otherwise obtain credit from the
Bank. There are also legal restrictions on the Bank's purchases of or
investments in the securities of and purchases of assets from the Corporation
and its nonbank subsidiaries; the Bank's loans or extensions of credit to third
parties collateralized by the securities or obligations of the Corporation and
its nonbank subsidiaries; the issuance of guarantees, acceptances and letters of
credit on behalf of the Corporation and its nonbank subsidiaries; and certain
bank transactions with, or for the benefit of, the Corporation and its nonbank
subsidiaries. Subject to certain limited exceptions, the Bank (including for
purposes of this paragraph all subsidiaries of the Bank) may not extend credit
to the Corporation or to any other affiliate (other than certain exempted
affiliates) in an amount which exceeds 10% of the Bank's capital stock and
surplus and may not extend credit in the aggregate to such affiliates in an
amount which exceeds 20% of its capital stock and surplus. Further, there are
legal requirements as to the type, amount and quality of collateral which must
secure such extensions of credit by the Bank to the Corporation or to such other
affiliates. Finally, extensions of credit and other transactions between the
Bank and the Corporation or other such affiliates must be on terms and under
circumstances, including credit standards, that are substantially the same or at
least as favorable to the Bank as those prevailing at the time for comparable
transactions with non-affiliated companies.
CAPITAL ADEQUACY
The Federal Reserve has adopted risk-based capital guidelines for bank
holding companies. The minimum guideline for the ratio of total capital ("Total
Capital") to risk-weighted assets (including certain off-balance-sheet items,
such as standby letters of credit) is 8%. At least half of the Total Capital
must be composed of common stock, minority interests in the equity accounts of
consolidated subsidiaries, noncumulative perpetual preferred stock and a limited
amount of cumulative perpetual preferred stock, less goodwill and certain other
intangible assets ("Tier 1 Capital"). The remainder may consist of qualifying
subordinated debt, mandatory convertible securities, other preferred stock and a
limited amount of loan loss reserves. At March 31, 1995, the Corporation's
consolidated Tier 1 Capital and Total Capital ratios were 10.53% and 14.00%,
respectively.
In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and certain other
intangible assets (the "Leverage Ratio"), of 3% for bank holding companies that
meet certain specific criteria, including having the highest regulatory rating.
All other bank holding companies generally are required to maintain a Leverage
Ratio of at least 3%, plus an additional cushion of at least 100 to 200 basis
points. The Corporation's Leverage Ratio at March 31, 1995 was 7.21%. The
guidelines also provide that bank holding companies 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. Furthermore, the Federal Reserve has indicated that it
will consider a "tangible Tier 1 Capital leverage ratio" (deducting all
intangibles) and other indicia of capital strength in evaluating proposals for
expansion or new activities. At March 31, 1995, the Corporation's tangible Tier
1 Capital leverage ratio was 7.20%.
The Bank is subject to risk-based and leverage capital requirements similar
to those described above adopted by the Comptroller. The Corporation believes
that the Bank was in compliance with applicable minimum capital requirements as
of March 31, 1995. Neither the Corporation nor the Bank has been advised by any
federal banking agency of any specific minimum Leverage Ratio requirement
applicable to it.
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Failure to meet capital guidelines could subject a bank to a variety of
enforcement remedies, including the termination of deposit insurance by the
FDIC, and to certain restrictions on its business. See " -- FDICIA".
The federal banking agencies have proposed the adoption of regulations that
would add an additional risk-based capital requirement based upon the amount of
an institution's exposure to interest rate risk.
HOLDING COMPANY STRUCTURE AND SUPPORT OF THE BANK
Because the Corporation is a holding company, its right to participate in
the assets of any subsidiary upon the latter's liquidation or reorganization
will be subject to the prior claims of the subsidiary's creditors (including
depositors in the case of the Bank) except to the extent that the Corporation
may itself be a creditor with recognized claims against the subsidiary. In
addition, depositors of the Bank, and the FDIC as their subrogee, would be
entitled to priority over other creditors in the event of liquidation of a bank
subsidiary.
Under Federal Reserve policy, the Corporation is expected to act as a
source of financial strength to, and to commit resources to support, the Bank
and other subsidiaries. This support may be required at times when, absent such
Federal Reserve policy, the Corporation may not be inclined to provide it. In
addition, any capital loans by a bank holding company to any of its subsidiary
banks are subordinate in right of payment to deposits and to certain other
indebtedness of such subsidiary bank. In the event of a bank holding company's
bankruptcy, any commitment by the bank holding company to a federal bank
regulatory agency to maintain the capital of a subsidiary bank will be assumed
by the bankruptcy trustee and entitled to a priority of payment.
CROSS-GUARANTEE LIABILITY
Under the Federal Deposit Insurance Act (the "FDIA"), a depository
institution insured by the FDIC can be held liable for any loss incurred by, or
reasonably expected to be incurred by, the FDIC after August 9, 1989 in
connection with (i) the default of a commonly controlled FDIC-insured depository
institution or (ii) any assistance provided by the FDIC to any commonly
controlled FDIC-insured depository institution "in danger of default". "Default"
is defined generally as the appointment of a conservator or receiver, and "in
danger of default" is defined generally as the existence of certain conditions
indicating that a default is likely to occur in the absence of regulatory
assistance. The FDIC's claim for damages is superior to claims of shareholders
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.
FDICIA
FDICIA, which was enacted on December 19, 1991, substantially revised the
depository institution regulatory and funding provisions of the FDIA and made
revisions to several other federal banking statutes. Among other things, FDICIA
requires the federal banking regulators to take "prompt corrective action" in
respect of FDIC-insured depository institutions that do not meet minimum capital
requirements. FDICIA establishes five capital tiers: "well capitalized",
"adequately capitalized", "undercapitalized", "significantly undercapitalized"
and "critically undercapitalized." Under applicable regulations, an FDIC-insured
depository institution is defined to be well capitalized if it maintains a
Leverage Ratio of at least 5%, a risk-adjusted Tier 1 Capital Ratio of at least
6% and a risk-adjusted Total Capital Ratio of at least 10% and is not subject to
a directive, order or written agreement to meet and maintain specific capital
levels. An insured depository institution is defined to be adequately
capitalized if it meets all of its minimum capital requirements as described
above. An insured depository institution will be considered undercapitalized if
it fails to meet any minimum required measure, significantly undercapitalized if
it has a risk-adjusted Total Capital Ratio of less than 6%, risk-adjusted Tier 1
Capital Ratio of less than 3% or a Leverage Ratio of less than 3% and critically
undercapitalized if it fails to maintain a level of tangible equity equal to at
least 2% of total assets. An insured depository institution may be deemed to be
in a capitalization category that is lower than is indicated by its actual
capital position if it receives an unsatisfactory examination rating.
FDICIA generally prohibits an FDIC-insured depository institution from
making any capital distribution (including payment of dividends) or paying any
management fee to its holding company if the depository institution would
thereafter be undercapitalized. Undercapitalized insured depository institutions
are subject to restrictions on borrowing from the Federal Reserve System. In
addition, undercapitalized insured depository institutions are subject to growth
limitations and are required to submit capital restoration plans. The depository
institution's holding company must guarantee the capital plan, up to an amount
equal to the lesser of 5% of the depository institution's assets at the time it
becomes undercapitalized or the amount of the capital deficiency when the
institution fails to comply with the plan. The federal banking agencies may not
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accept a capital plan without determining, among other things, that the plan is
based on realistic assumptions and is likely to succeed in restoring the
depository institution's capital. If a depository institution fails to submit an
acceptable plan, it is treated as if it is significantly undercapitalized.
Significantly undercapitalized depository institutions may be subject to a
number of requirements and restrictions, including orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce total
assets and cessation of receipt of deposits from correspondent banks. Critically
undercapitalized depository institutions are subject to appointment of a
receiver or conservator, generally within 90 days of the date on which they
become critically undercapitalized.
The Corporation believes that at March 31, 1995 the Bank was well
capitalized under the criteria discussed above.
Various other legislation, including proposals to revise the bank
regulatory system and to limit the investments that a depository institution may
make with insured funds, is from time to time introduced in Congress.
BROKERED AND "PASS-THROUGH" DEPOSITS
The FDIC has adopted regulations under FDICIA governing the receipt of
brokered and "pass-through" deposits. Under the regulations, a bank cannot
accept or rollover or renew brokered deposits unless (i) it is well capitalized
or (ii) it is adequately capitalized and receives a waiver from the FDIC. A bank
that cannot receive brokered deposits also cannot offer "pass-through" insurance
on certain employee benefit accounts. Whether or not it has obtained such a
waiver, an adequately capitalized bank may not pay an interest rate on any
deposits in excess of 75 basis points over certain prevailing market rates
specified by regulation. There are no such restrictions on a bank that is well
capitalized. Because it believes that the Bank was well capitalized as of March
31, 1995, the Corporation believes the brokered deposits regulation will have no
present effect on the funding or liquidity of the Bank.
FDIC INSURANCE PREMIUMS
The Bank is required to pay semiannual FDIC deposit insurance assessments.
As required by FDICIA, the FDIC adopted a risk-based premium schedule which has
increased the assessment rates for most FDIC-insured depository institutions.
Under the new schedule, the premiums initially range from $.23 to $.31 for every
$100 of deposits. Each financial institution is assigned to one of three capital
groups -- well capitalized, adequately capitalized or undercapitalized -- and
further assigned to one of three subgroups within a capital group, on the basis
of supervisory evaluations by the institution's primary federal and, if
applicable, state supervisors and other information relevant to the
institution's financial condition and the risk posed to the applicable FDIC
deposit insurance fund. The actual assessment rate applicable to a particular
institution will, therefore, depend in part upon the risk assessment
classification so assigned to the institution by the FDIC.
The FDIC is authorized by federal law to raise insurance premiums in
certain circumstances. Any increase in premiums would have an adverse effect on
the Bank's and the Corporation's earnings.
Under the FDIA, insurance of deposits may be terminated by the FDIC upon a
finding that the institution has engaged in unsafe and unsound practices, is in
an unsafe or unsound condition to continue operations or has violated any
applicable law, regulation, rule, order or condition imposed by a federal bank
regulatory agency.
DEPOSITOR PREFERENCE
The Omnibus Budget Reconciliation Act of 1993 provides that deposits and
certain claims for administrative expenses and employee compensation against an
insured depositary institution would be afforded a priority over other general
unsecured claims against such an institution, including the Debt Securities, in
the "liquidation or other resolution" of such an institution by any receiver.
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DESCRIPTION OF CAPITAL STOCK
The following summary description of the capital stock of the Corporation
is qualified in its entirety by reference to applicable provisions of Virginia
law and the Corporation's Restated Articles of Incorporation, as amended (the
"Articles"), and By-Laws, which are on file with the Commission and are included
or incorporated by reference as an exhibit to the Registration Statement of
which this Prospectus is a part.
COMMON STOCK
The Corporation is authorized to issue 100,000,000 shares of Common Stock,
par value $5.00 per share, of which 39,543,285 shares were outstanding at March
31, 1995. All of the outstanding shares of Common Stock are fully paid and
nonassessable.
Holders of Common Stock are entitled to receive dividends when and as
declared by the Board of Directors out of funds legally available therefor. See
"Regulatory Matters". In the event of liquidation, holders of Common Stock will
be entitled to receive pro rata any assets distributable to holders of Common
Stock in respect of the number of shares held by them. The dividend and
liquidation rights of holders of Common Stock are subject to the rights of
holders of any Preferred Stock of the Corporation which may be issued and
outstanding. See " -- Preferred Stock".
Holders of Common Stock are entitled to one vote per share on all matters
submitted to shareholders. There are no cumulative voting rights in the election
of directors. Holders of Common Stock have no conversion or redemption rights.
Each share of Common Stock also represents one preferred share purchase right
under the Corporation's Shareholder Rights Plan. See " -- Shareholder Rights
Plan". The Bank is the transfer agent and registrar for the Common Stock.
PREFERRED STOCK
The Corporation is authorized to issue two classes of Preferred Stock:
200,000 shares of Preferred Stock, par value $100.00 per share; and 4,000,000
shares of 1983 Preferred Stock, par value $25.00 per share. No shares of either
class are outstanding.
Under the Corporation's Articles, the Board of Directors, without
shareholder approval, is authorized to issue shares of either class of Preferred
Stock in one or more series and to designate, with respect to each such series
of Preferred Stock: (i) the number of shares in each such series; (ii) the
dividend rates, preferences and date of payment; (iii) whether dividends on any
floating or variable rate series of Preferred Stock shall be cumulative and, if
cumulative, the date or dates from which the same shall be cumulative; (iv) the
extent of participation rights, if any; (v) the terms and conditions of
redemption and the prices at which it may occur; (vi) the sinking fund
provisions, if any, for redemption or purchase of shares; (vii) voluntary and
involuntary liquidation preferences; (viii) the rights, if any, and the terms
and conditions on which shares can be converted into or exchanged for shares of
any other class or series; and (ix) the voting rights, if any, in addition to
such voting rights as are or may be required by law.
The Corporation's Articles also provide that, with respect to any series of
Preferred Stock as to which the Board of Directors of the Corporation shall have
specified a fixed rate of dividend, the holders of any such series of Preferred
Stock shall be entitled to cumulative dividends. No dividends may be declared or
paid on the Common Stock, or on any shares of Preferred Stock which are entitled
to participate with the Common Stock, until full dividends on any outstanding
fixed rate Preferred Stock is paid, or declared and set apart for payment, with
respect to all past dividend periods and any current dividend period. Interest
will not accrue on cumulative dividend arrearages payable on fixed rate
Preferred Stock.
Specific terms of any series of Preferred Stock offered by the applicable
Prospectus Supplement will be established by the Board of Directors of the
Corporation in accordance with the Articles and set forth in a Certificate of
Designation to be described in such Prospectus Supplement. The description of
the Preferred Stock set forth herein and any description of the terms of any
series of Preferred Stock set forth in the applicable Prospectus Supplement is
subject to and qualified in its entirety by reference to the Corporation's
Articles and the Certificate of Designation for such series.
The Board of Directors may authorize the issuance of one or more series of
Preferred Stock of either class which may have voting and conversion rights
which could adversely affect the voting power of the holders of Common Stock.
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The Board of Directors has authorized and initially reserved 200,000 shares
of Series A Junior Participating Preferred Stock, par value $25.00 per share,
for issuance upon the exercise of the preferred share purchase rights described
below. See " -- Shareholder Rights Plan". Such reservation may be increased by
resolution of the Board of Directors from time to time.
The creation and issuance of any additional series of Preferred Stock, and
the relative rights and preferences of such series, if and when established,
will depend upon, among other things, the future capital needs of the
Corporation, then existing market conditions and other factors that, in the
judgment of the Board of Directors of the Corporation, might warrant the
issuance of Preferred Stock.
PREEMPTIVE RIGHTS
No holder of any shares of Common Stock or Preferred Stock has any
preemptive right to purchase or subscribe to any additional shares of any class
or series of the capital stock of the Corporation.
SHAREHOLDER RIGHTS PLAN
The Corporation has adopted a Shareholder Rights Plan which is intended to
protect shareholders in the event of unsolicited offers or attempts to acquire
the Corporation, including offers that do not treat all shareholders equally,
acquisitions in the open market of shares constituting control without offering
fair value to all shareholders, and other coercive or unfair takeover tactics
that could impair the ability of the Board of Directors to represent
shareholders' interests fully. Pursuant to the Shareholder Rights Plan, the
Board of Directors declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of Common Stock to shareholders of record at
the close of business on May 18, 1989 (the "Record Date") and authorized the
issuance of one Right for each share of Common Stock issued between the Record
Date and the Distribution Date (as hereinafter defined). As adjusted for the
three-for-two stock splits in the form of a dividend in July 1991 and February
1993, each Right entitles the holder to purchase from the Corporation
four-ninths of one one-hundredth of a share of Series A Junior Participating
Preferred Stock, par value $25.00 per share (the "Junior Preferred Shares"), at
a price of $110.00 per one one-hundredth of a Junior Preferred Share. The
description and terms of the Rights are set forth in an Amended and Restated
Rights Agreement (the "Rights Agreement"), dated November 9, 1994, between the
Corporation and Central Fidelity National Bank, as Rights Agent. One Right will
be attached to each share of Common Stock offered hereby.
The Rights Agreement provides that the Rights attach to and will be
transferred with the Common Stock until the earlier of (i) the tenth business
day (or such earlier or later date as the Board of Directors may determine)
after public announcement by the Corporation that any person or group has
acquired 10% or more of the outstanding Common Stock of the Corporation or (ii)
the tenth business day (or such later date as the Board of Directors may
determine) after any person or group commences a tender or exchange offer that
would result in such person or group owning 10% or more of the outstanding
Common Stock (the "Distribution Date").
The Rights will become exercisable on the first business day following the
Distribution Date. Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Corporation, including without
limitation, the right to vote or to receive dividends. The Rights will expire on
November 9, 2004, unless the Rights are earlier exchanged or redeemed by the
Corporation or upon the merger of the Corporation into another corporation under
circumstances set forth in the Rights Agreement.
In the event that the Corporation is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, each holder of a Right will have thereafter the right to
purchase, upon the exercise thereof at the then-current exercise price of the
Right, that number of shares of common stock of the acquiring company which at
the time of such transaction will have a market value of two times the exercise
price of the Right.
In the event that any person or group acquires 10% or more of the
outstanding Common Stock and thereafter engages in certain specified
transactions, each holder of a Right (other than Rights held by such person or
group) will have thereafter the right to purchase from the Corporation, upon
exercise of the Right, that number of shares of Common Stock having a market
value of two times the exercise price of the Right.
At any time after the acquisition by a person or group of beneficial
ownership of 10% or more of the outstanding Common Stock and prior to the
acquisition by such person or group of 50% or more of the outstanding Common
Stock, the Board of Directors of the Corporation may exchange the Rights (other
than Rights owned by such person or group which have become void), in whole or
in part, at an exchange ratio, as adjusted for the three-for-two stock splits in
the form of a dividend in July 1991 and February 1993, of four-ninths of a share
of Common Stock, or four-ninths of one one-hundredth of
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a Junior Preferred Share (or of a share of a class or series of the
Corporation's Preferred Stock having equivalent rights, preferences and
privileges), per Right.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person that attempts to acquire the Corporation
without the approval of the Board of Directors unless the offer is conditioned
upon a substantial number of Rights being acquired or redeemed by the
Corporation. The Rights, however, should not affect offers for all outstanding
shares of Common Stock at a fair price and otherwise in the best interests of
the Corporation and its shareholders as determined by the Board of Directors,
since the Board of Directors may, at its option, redeem all, but not fewer than
all, of the then outstanding Rights at a price of $.01 per Right.
CERTAIN PROVISIONS WHICH MAY HAVE AN ANTI-TAKEOVER EFFECT
The Corporation's Articles and By-Laws contain provisions which may have
the effect of delaying or preventing a change in control of the Corporation. The
Articles and By-Laws provide (i) for division of the Board of Directors into
three classes, with one class elected each year to serve a three-year term; (ii)
that directors may be removed only upon the affirmative vote of the holders of
80% of the outstanding voting stock; (iii) that any vacancy on the Board may be
filled by the remaining directors, (iv) that advance notification is required
for a shareholder to bring business before a shareholders' meeting or to
nominate a person for election as a director; and (v) that the affirmative vote
of the holders of 80% of the outstanding voting stock is required to alter,
amend or repeal the foregoing provisions.
The Articles also contain a "fair price" provision that requires the
affirmative vote of the holders of 80% of the outstanding voting stock as a
condition for certain mergers or business combinations, unless the transaction
is either approved by a majority of the disinterested directors or certain
minimum fair price and procedural requirements are met, in which case the
transaction will require only the affirmative vote of the holders of outstanding
voting stock as required by law or any other provision of the Articles. A
"disinterested director" is defined as any member of the Corporation's Board of
Directors who is (i) unaffiliated with an interested shareholder (as defined
below) and was a member of the Board prior to the time the interested
shareholder became such, or (ii) is so unaffiliated and is recommended to
succeed a disinterested director by a majority of the disinterested directors
then on the Board. An "interested shareholder" is defined to mean any entity
(other than the Corporation or a subsidiary) or affiliate of the Corporation
beneficially owning more than 20% of the Corporation's stock, or any shareholder
beneficially owning shares of the Corporation's stock by reason of assignment
by, or succession to, an interested shareholder.
The foregoing provisions of the Articles and By-Laws are intended to
prevent inequitable shareholder treatment in a two-tier takeover and to reduce
the possibility that a third party could effect a sudden or surprise change in
majority control of the Board of Directors without the support of the incumbent
Board, even if such a change were desired by, or would be beneficial to, a
majority of the Corporation's shareholders. Such provisions therefore may have
the effect of discouraging certain unsolicited offers for the Corporation's
capital stock.
The Corporation has employment agreements with certain key officers that
would become effective upon a change in control of the Corporation. These
agreements provide that the Corporation or its successor will continue those
officers in its employ for a term of three years after the date of any such
change in control and with commensurate responsibilities and compensation. The
Corporation's Executive Supplemental Retirement Plan also has a provision which
provides for the acceleration of the payment of benefits thereunder upon a
change in control of the Corporation.
AFFILIATED TRANSACTIONS
The Virginia Stock Corporation Act contains provisions governing
"Affiliated Transactions". Affiliated Transactions include certain mergers and
share exchanges, certain material dispositions of corporate assets not in the
ordinary course of business, any dissolution of a corporation proposed by or on
behalf of an Interested Shareholder (as defined below), and reclassifications,
including reverse stock splits, recapitalizations or mergers of a corporation
with its subsidiaries or distributions or other transactions which have the
effect of increasing the percentage of voting shares beneficially owned by an
Interested Shareholder by more than 5%. For purposes of the Act, an Interested
Shareholder is defined as any beneficial owner of more than 10% of any class of
the voting securities of a Virginia corporation.
Subject to certain exceptions discussed below, the provisions governing
Affiliated Transactions require that, for three years following the date upon
which any shareholder becomes an Interested Shareholder, any Affiliated
Transaction be approved by the affirmative vote of two-thirds of the voting
shares of a corporation, other than the shares beneficially owned by the
Interested Shareholder, and by a majority (but not less than two) of the
Disinterested Directors (as defined below). A
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Disinterested Director means a member of a corporation's board of directors who
(i) was a member before the later of January 1, 1988 and the date on which an
Interested Shareholder became an Interested Shareholder and (ii) was 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, these provisions require approval of
Affiliated Transactions by the affirmative vote of the holders of two-thirds of
the voting shares of a corporation, other than those beneficially owned by the
Interested Shareholder.
The principal exceptions to the special voting requirement apply to
Affiliated Transactions occurring after the three-year period has expired and
require either that the transaction be approved by a majority of the
Disinterested Directors or that the transaction satisfy certain fair price
requirements of the statute. In general, the fair price requirements provide
that the shareholders must receive the highest per share price for their shares
as was paid by an Interested Shareholder for his shares or the fair market value
of their shares, whichever is higher. They also require that, during the three
years preceding the announcement of the proposed Affiliated Transaction, all
required dividends have been paid and no special financial accommodations have
been accorded an Interested Shareholder unless approved by the majority of the
Disinterested Directors.
None of the foregoing limitations and special voting requirements applies
to a transaction with an Interested Shareholder who has been an Interested
Shareholder since the effective date of the statute (January 26, 1988) or who
became an Interested Shareholder by gift or inheritance from such a person or
whose acquisition of shares making such person an Interested Shareholder was
approved by a majority of the 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 may adopt, by meeting certain voting requirements, an
amendment to its articles of incorporation or bylaws providing that the
Affiliated Transactions provisions shall not apply to the corporation. The
Corporation has not adopted such an amendment.
CONTROL SHARE ACQUISITIONS
The Virginia Stock Corporation Act also contains provisions regulating
certain "control share acquisitions", which are transactions causing the voting
strength of any person acquiring beneficial ownership of shares of a public
corporation in Virginia to meet or exceed certain threshold percentages (20%,
33 1/3% or 50%) of the total votes entitled to be cast for the election of
directors. Shares acquired in a control share acquisition have no voting rights
unless: (i) the voting rights are granted by a majority vote of all outstanding
shares other than those held by the acquiring person or any officer or employee
director of the corporation, or (ii) the articles of incorporation or bylaws of
the corporation provide that these Virginia law provisions do not apply to
acquisitions of its shares. The acquiring person may require that a special
meeting of the shareholders be held to consider the grant of voting rights to
the shares acquired in the control share acquisition. The Corporation has
adopted an amendment to its By-Laws making these provisions inapplicable to
acquisitions of its shares.
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DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities are to be issued under an Indenture (the "Senior
Indenture"), between the Corporation and the trustee named in the applicable
Prospectus Supplement as the trustee therefor (the "Senior Trustee"). The
Subordinated Debt Securities are to be issued under the Indenture, dated as of
November 25, 1992, (the "Subordinated Indenture"), between the Corporation and
Chemical Bank, as the trustee (the "Subordinated Trustee"). A copy of the form
of the Senior Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The Subordinated Indenture has
been previously filed with the Commission and is incorporated by reference
herein. The Senior Indenture and the Subordinated Indenture are sometimes herein
referred to collectively as the "Indentures" and the Senior Trustee and the
Subordinated Trustee are sometimes herein referred collectively as the
"Trustees".
The Debt Securities may be issued from time to time in one or more series.
The particular terms of each series, or of Debt Securities forming a part of a
series, which are offered by a Prospectus Supplement will be described in such
Prospectus Supplement.
The following summaries of certain provisions of the Indentures do not
purport to be complete and are subject, and are qualified in their entirety by
reference, to all the provisions of the Indentures, including the definitions
therein of certain terms, and, with respect to any particular Debt Securities,
to the description of the terms thereof included in the Prospectus Supplement
relating thereto. Wherever particular Sections or defined terms of the
Indentures are referred to herein or in a Prospectus Supplement, such Sections
or defined terms are incorporated by reference herein or therein, as the case
may be.
As a holding company, the Corporation conducts its operations principally
through its subsidiaries and, therefore, its principal source of cash, other
than its investing and financing activities, is dividends from the Bank and the
Corporation's other subsidiaries. The availability of such dividends will
directly affect the ability of the Corporation to meet its obligations under the
Indentures. However, there are legal limitations on the source and amount of
dividends that national banks are permitted to pay their parent companies. See
"Regulatory Matters". In addition, because the Corporation is a holding company
and a legal entity separate and distinct from its subsidiaries, the rights of
the Corporation to participate in any distribution of assets of any subsidiary
upon its liquidation of assets or reorganization or otherwise (and thus the
ability of Holders of Debt Securities to benefit indirectly from such
distribution) would be subject to the prior claims of creditors of that
subsidiary, except to the extent that the Corporation itself may be a creditor
of that subsidiary with recognized claims. Claims on the Bank by creditors other
than the Corporation include substantial obligations with respect to deposit
liabilities (who have priority in liquidation) and federal funds purchased,
securities sold under repurchase agreements, other short-term borrowing and
various other financial obligations.
GENERAL
The Subordinated Indenture provides, and the Senior Indenture will provide,
that Debt Securities in separate series may be issued thereunder from time to
time without limitation as to aggregate principal amount. The Corporation may
specify a maximum aggregate principal amount for the Debt Securities of any
series. (Subordinated Indenture Section 2.01 and Senior Indenture Section 301).
The Debt Securities are to have such terms and provisions which are not
inconsistent with the Indentures, including as to maturity, principal and
interest, as the Corporation may determine. The Debt Securities will be
unsecured obligations of the Corporation. The Senior Debt Securities will rank
on a parity with all other unsecured and unsubordinated indebtedness of the
Corporation while the Subordinated Debt Securities will be subordinated to other
indebtedness of the Corporation as described below under " -- Subordination".
The applicable Prospectus Supplement will set forth the price or prices at
which the Debt Securities to be offered will be issued. If Debt Securities are
offered, the applicable Prospectus Supplement will describe the following terms,
where applicable: (1) the title of such Debt Securities; (2) any limit on the
aggregate principal amount of such Debt Securities or the series of which they
are a part; (3) the date or dates on which the principal of any of such Debt
Securities will be payable; (4) the rate or rates at which any of such Debt
Securities will bear interest, if any, or if the interest may be determined with
reference to an index or pursuant to a formula, the manner in which such amounts
will be determined, the date or dates from which any such interest will accrue,
the Interest Payment Dates on which any such interest will be payable and the
Regular Record Date for any such interest payable on any Interest Payment Date;
(5) the place or places where the principal of and any premium and interest on
any of such Debt Securities will be payable; (6) the period or periods within
which, the price or prices at which and the terms and conditions on which any of
such Debt Securities may be redeemed, in whole or in part, at the option of the
Corporation; (7) the obligation, if any, of the Corporation to redeem or
purchase any of such Debt Securities pursuant to any sinking fund or analogous
provision or at the option of the Holder thereof, and the period or periods
within which, the price or prices at which and the terms and conditions on which
any of such Debt Securities will be redeemed or purchased, in
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whole or in part, pursuant to any such obligation; (8) the denominations in
which any of such Debt Securities will be issuable, if other than denominations
of $1,000 and any integral multiple thereof; (9) if the amount of principal of
or any premium on any of such Senior Debt Securities may be determined with
reference to an index or pursuant to a formula, the manner in which such amounts
will be determined; (10) if other than the currency of the United States of
America, the currency, currencies or currency units in which the principal of or
any premium or interest on any of such Senior Debt Securities will be payable
(and the manner in which the equivalent of the principal amount thereof in the
currency of the United States of America is to be determined for any purpose,
including for the purpose of determining the principal amount deemed to be
Outstanding at any time); (11) if the principal of or any premium or interest on
any of such Senior Debt Securities is to be payable, at the election of the
Corporation or the Holder thereof, in one or more currencies or currency units
other than those in which such Senior Debt Securities are stated to be payable,
the currency, currencies or currency units in which payment of any such amount
as to which such election is made will be payable, the periods within which and
the terms and conditions upon which such election is to be made and the amount
so payable (or the manner in which such amount is to be determined); (12) if
other than the entire principal amount thereof, the portion of the principal
amount of any of such Senior Debt Securities which will be payable upon
declaration of acceleration of the Maturity thereof; (13) if the principal
amount payable at the Stated Maturity of any of such Senior Debt Securities will
not be determinable as of any one or more dates prior to the Stated Maturity,
the amount which will be deemed to be such principal amount as of any such date
for any purpose, including the principal amount thereof which will be due and
payable upon any Maturity other than the Stated Maturity or which will be deemed
to be Outstanding as of any such date (or, in any such case, the manner in which
such deemed principal amount is to be determined); (14) if applicable, that such
Senior Debt Securities, in whole or any specified part, are defeasible pursuant
to the provisions of the Senior Indenture described under "Defeasance and
Covenant Defeasance -- Defeasance and Discharge" or "Defeasance and Covenant
Defeasance -- Covenant Defeasance", or under both such captions; (15) whether
any of such Debt Securities will be issuable in whole or in part in the form of
one or more Global Debt Securities and, if so, the respective Depositaries for
such Global Debt Securities, the form of any legend or legends to be borne by
any such Global Debt Security in addition to or in lieu of the legend referred
to under "Form, Exchange and Transfer -- Global Debt Securities" and, if
different from those described under such caption, any circumstances under which
any such Global Debt Security may be exchanged in whole or in part for Debt
Securities registered, and any transfer of such Global Debt Security in whole or
in part may be registered, in the names of Persons other than the Depository for
such Global Debt Security or its nominee; (16) any addition to or change in the
Events of Default applicable to any of such Debt Securities and any change in
the right of the Trustee or the Holders to declare the principal amount of any
of such Debt Securities due and payable; (17) any additional restrictive
covenants in the Indentures applicable to any of such Debt Securities; and (18)
any other terms of such Senior Debt Securities not inconsistent with the
provisions of the Indenture. (Subordinated Indenture Section 2.01 and Senior
Indenture Section 301).
In addition, if Subordinated Debt Securities are offered, the following
additional terms will be described in the applicable Prospectus Supplement,
where applicable: (1) whether Subordinated Debt Securities of the series are to
be issuable as Registered Securities, Bearer Securities or both, whether
Securities of the series are to be issuable with or without coupons or both and,
in the case of Bearer Securities, the date as of which such Bearer Securities
shall be dated if other than the date of original issuance of the first Security
of such series of like tenor and term to be issued; (2) if Subordinated Debt
Securities of the series are to be issuable initially in the form of one or more
temporary Global Securities, the circumstances under and the manner in which
such temporary Global Securities can be exchanged for definitive Securities of
the series and whether such definitive Securities will be Registered Securities,
Bearer Securities or both and will be in global form; (3) the denominations in
which Bearer Securities of such series, if any, shall be issuable if other than
the denomination of $5,000; and (4) if warrants for Subordinated Debt Securities
of the series are to be issued, the form of such warrants, the circumstances and
the manner in which such warrants may be exercised, any obligation of the
Corporation concerning any Subordinated Debt Securities underlying such
warrants, and any other terms and conditions regarding such warrants and
Subordinated Debt Securities.
Debt Securities, including Original Issue Discount Securities, may be sold
at a substantial discount below their principal amount. Certain special United
States federal income tax considerations (if any) applicable to Securities sold
at an original issue discount may be described in the applicable Prospectus
Supplement. In addition, certain special United States federal income tax or
other considerations (if any) applicable to any Securities which are denominated
in a currency or currency unit other than United States dollars may be described
in the applicable Prospectus Supplement.
FORM, EXCHANGE AND TRANSFER
The Senior Debt Securities of each series will be issuable only in fully
registered form, without coupons, and, unless otherwise specified in the
applicable Prospectus Supplement, only in denominations of $1,000 and integral
multiples thereof.
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(Senior Indenture Section 302). Subordinated Debt Securities may be issued as
Bearer Securities. (Subordinated Indenture Section 2.01). The Corporation, the
applicable Trustee and any Paying Agent are entitled to treat the registered
Holder of any Registered Security as the absolute owner of such Registered
Security for all purposes, and to treat the bearer of any Bearer Security or any
coupon appertaining thereto as the absolute owner of such Bearer Security or
coupon for all purposes, notwithstanding any notice to the contrary.
At the option of the Holder, subject to the terms of the applicable
Indenture and the limitations applicable to Global Securities, registered Debt
Securities of each series will be exchangeable for other registered Debt
Securities of the same series of any authorized denomination and of a like tenor
and aggregate principal amount. (Subordinated Indenture Section 2.06 and Senior
Indenture Section 305).
Subject to the terms of the applicable Indenture and the limitations
applicable to Global Securities, Debt Securities may be presented for exchange
as provided above or for registration of transfer (duly endorsed or with the
form of transfer endorsed thereon duly executed) at the office of the Security
Registrar or at the office of any transfer agent designated by the Corporation
for such purpose. No service charge will be made for any registration of
transfer or exchange of Debt Securities (or registration of any Subordinated
Debt Securities), but the Corporation may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith. Such
transfer or exchange will be effected upon the Security Registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. The Corporation will appoint the
Trustee as Security Registrar. Subordinated Debt Securities (other than a Global
Security) may be presented for registration of transfer at the office of the
Subordinated Trustee. The Corporation also may designate the corporate trust
department of the Bank as an office where the transfer of the Subordinated Debt
Securities may be registered. Any transfer agent (in addition to the Security
Registrar) initially designated by the Corporation for any Senior Debt
Securities will be named in the applicable Prospectus Supplement. (Senior
Indenture Section 305). The Corporation may at any time designate additional
transfer agents or rescind the designation of any transfer agent or approve a
change in the office through which any transfer agent acts, except that the
Corporation will be required to maintain a transfer agent in each Place of
Payment for the Senior Debt Securities of each series. (Senior Indenture Section
1002).
If the Senior Debt Securities of any series (or of any series and specified
terms) are to be redeemed in part, the Corporation will not be required to (i)
issue, register the transfer of or exchange any Senior Debt Security of that
series (or of that series and specified terms, as the case may be) during a
period beginning at the opening of business 15 days before the day of mailing of
a notice of redemption of any such Senior Debt Security that may be selected for
redemption and ending at the close of business on the day of such mailing or
(ii) register the transfer of or exchange any Senior Debt Security so selected
for redemption, in whole or in part, except the unredeemed portion of any such
Security being redeemed in part. (Senior Indenture Section 305).
GLOBAL SECURITIES
Some or all of the Debt Securities of any series may be represented, in
whole or in part, by one or more Global Securities which will have an aggregate
principal amount equal to that of the Debt Securities represented thereby. Each
Global Security will be registered in the name of a Depositary or a nominee
thereof identified in the applicable Prospectus Supplement, will be deposited
with such Depositary or a nominee or custodian therefor and will bear a legend
regarding the restrictions on exchanges and registration of transfer thereof
referred to below and any such other matters as may be provided for pursuant to
the applicable Indenture.
Notwithstanding any provision of the Indentures or any Debt Security
described herein, no Global Security may be exchanged in whole or in part for
Debt Securities registered, and no transfer of a Global Security in whole or in
part may be registered, in the name of any Person other than the Depositary for
such Global Security or any nominee of such Depositary unless (i) the Depositary
has notified the Corporation that it is unwilling or unable to continue as
Depositary for such Global Security or has ceased to be qualified to act as such
as required by the Indentures, (ii) in the case of Senior Debt Securities, there
shall have occurred and be continuing an Event of Default with respect to the
Senior Debt Securities represented by such Global Security or (iii) there shall
exist such circumstances, if any, in addition to or in lieu of those described
above as may be described in the applicable Prospectus Supplement. All Senior
Debt Securities issued in exchange for a Global Security or any portion thereof
will be registered in such names as the Depositary may direct. (Senior Indenture
Sections 204 and 305).
As long as the Depositary, or its nominee, is the registered Holder of a
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner and Holder of such Global Security and the Debt
Securities represented thereby for all purposes under the Debt Securities and
the applicable Indenture. Except in the limited circumstances referred to above,
owners of beneficial interests in a Global Security will not be entitled to have
such Global Security or any Debt
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Securities represented thereby registered in their names, will not receive or be
entitled to receive physical delivery of certificated Debt Securities in
exchange therefor and will not be considered to be the owners or Holders of such
Global Security or any Debt Securities represented thereby for any purpose under
the Debt Securities or the applicable Indenture. All payments of principal of
and any premium and interest on a Global Security will be made to the Depositary
or its nominee, as the case may be, as the Holder thereof. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. These laws may impair the
ability to transfer beneficial interests in a Global Security.
Ownership of beneficial interests in a Global Security will be limited to
institutions that have accounts with the Depositary or its nominee
("participants") and to persons that may hold beneficial interests through
participants. In connection with the issuance of any Global Security, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of Debt Securities represented by the Global
Security to the accounts of its participants. Ownership of beneficial interests
in a Global Security will be shown only on, and the transfer of those ownership
interests will be effected only through, records maintained by the Depositary
(with respect to participants' interests) or any such participant (with respect
to interests of persons held by such participants on their behalf). Payments,
transfers, exchanges and others matters relating to beneficial interests in a
Global Security may be subject to various policies and procedures adopted by the
Depositary from time to time. None of the Corporation, the Trustee or any agent
of the Corporation or the Trustee will have any responsibility or liability for
any aspect of the Depositary's or any participant's records relating to, or for
payments made on account of, beneficial interests in a Global Security, or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
Secondary trading in notes and debentures of corporate issuers is generally
settled in clearing-house or next-day funds. In contrast, beneficial interests
in a Global Security, in some cases, may trade in the Depositary's same-day
funds settlement system, in which secondary market trading activity in those
beneficial interests would be required by the Depositary to settle in
immediately available funds. There is no assurance as to the effect, if any,
that settlement in immediately available funds would have on trading activity in
such beneficial interests. Also, settlement for purchases of beneficial
interests in a Global Security upon the original issuance thereof may be
required to be made in immediately available funds.
The Depositary, upon receipt of any payment of principal or interest in
respect of a permanent Global Security, immediately will credit 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 or its nominee. The Corporation also expects that
payments by participants to owners of beneficial interests in such Global
Security 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 in bearer form or registered in "street name", and
will be the responsibility of such participants.
If the Depositary is at any time unwilling, unable or ineligible to
continue as Depositary and a successor Depositary is not appointed by the
Corporation within 90 days, the Corporation will issue Subordinated Debt
Securities in definitive form in exchange for the Global Security or Securities
representing the Subordinated Debt Securities. In addition, the Corporation at
any time and in its sole discretion may determine not to have any Subordinated
Debt Securities represented by one or more Global Securities and, in such event,
will issue Subordinated Debt Securities in definitive form in exchange for the
Global Securities or Securities representing such Subordinated Debt Securities.
Further, if the Corporation so specifies, an owner of a beneficial interest in a
Global Security representing Subordinated Debt Securities may receive, on terms
acceptable to the Corporation and the Depositary for such Global Security,
Subordinated Debt Securities in definitive form in exchange for such beneficial
interest. In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery in definitive form of
Subordinated Debt Securities represented by such Global Security equal in
principal amount to such beneficial interest and to have such Subordinated Debt
Securities registered in its name. Subordinated Debt Securities so issued in
definitive form will be issued as registered Subordinated Debt Securities in
denominations, unless otherwise specified by the Corporation, of $1,000 or
integral multiples thereof.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of interest on a registered Debt Security on any Interest Payment Date will be
made to the Person in whose name such Debt Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest. (Subordinated Indenture Section 2.09 and Senior Indenture
Section 307). Unless otherwise indicated in the applicable Prospectus
Supplement, principal of and any premium and interest on the registered Debt
Securities of a particular series will be payable at the office of such Paying
Agent or Paying Agents as the Corporation may designate for such purpose from
time to time, except that at the
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option of the Corporation payment of any interest may be made by check mailed to
the address of the Person entitled thereto as such address appears in the
Security Register.
Unless otherwise indicated in the applicable Prospectus Supplement, the
corporate trust office of the applicable Trustee in The City of New York will be
designated as the Corporation's sole Paying Agent for payments with respect to
Debt Securities of each series. Any other Paying Agents initially designated by
the Corporation for the Debt Securities of a particular series will be named in
the applicable Prospectus Supplement. The Corporation may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except that
the Corporation will be required to maintain a Paying Agent in each Place of
Payment for the Debt Securities of a particular series. (Subordinated Indenture
Section 4.02 and Senior Indenture Section 1002). Under the Indentures, the
Corporation also may designate the corporate trust department of the Bank as an
office where principal and any interest may be paid.
All moneys paid by the Corporation to a Paying Agent for the payment of the
principal of or any premium or interest on any Debt Security which remain
unclaimed at the end of two years after such principal, premium or interest has
become due and payable will be repaid to the Corporation, and the Holder of such
Debt Security thereafter may look only to the Corporation for payment thereof.
(Subordinated Indenture Section 14.04 and Senior Indenture Section 1003).
SUBORDINATION
The obligation of the Corporation to make any payment of principal or
interest on the Subordinated Debt Securities, to the extent set forth in the
Subordinated Indenture, will be subordinate and junior in right of payments to
the prior payment in full of all existing and future Senior Indebtedness (as
defined below). Upon any distribution of assets of the Corporation in any
dissolution, winding up, liquidation or reorganization of the Corporation, the
holders of Senior Indebtedness are entitled to receive payment in full of
principal and interest before the holders of the Subordinated Debt Securities
are entitled to receive any payment on account of principal or any premium or
interest on the Subordinated Debt Securities (except that holders of the
Subordinated Debt Securities, in a reorganization or readjustment of the
Corporation, may receive securities of the Corporation or any other corporation
provided for by a plan of reorganization or readjustment, which securities are
subordinated to the payment of all Senior Indebtedness and any securities
received in lieu thereof, except to the extent that any securities so received
are by their terms expressly not superior in right of payment to the
Subordinated Debt Securities). (Subordinated Indenture Section 3.03). The
dissolution, winding up, liquidating or reorganization of the Corporation
following a conveyance, transfer or lease of its properties and assets
substantially as an entirety in compliance with the terms described below under
"Consolidation, Merger and Sale of Assets" will not be deemed to be a
dissolution, winding up, liquidation or reorganization for this purpose.
(Subordinated Indenture Section 3.03(d)). In addition, the Corporation may not
pay principal of, or interest on, the Subordinated Debt Securities and may not
acquire any Subordinated Debt Securities for cash or property other than capital
stock of the Corporation if: (1) a default on Senior Indebtedness occurs and is
continuing that permits holders of such Senior Indebtedness to accelerate its
maturity; and (2) such default is the subject of judicial proceedings or the
Corporation receives written notice of such default from a representative of the
holders of such Senior Indebtedness. If the Corporation receives any such
notice, a similar notice received within 360 days thereafter relating to the
same default on the same issue of Senior Indebtedness shall not be effective for
such purpose. The Corporation may resume payments on the Subordinated Debt
Securities and may acquire them when (i) such default is cured or waived or
shall have ceased to exist or the Senior Indebtedness to which such default
relates shall have been paid in full in cash or cash equivalent; or (ii) if such
default is not the subject of judicial proceedings, 120 days pass after such
written notice is received by the Corporation, but only if such payment or
acquisition is not otherwise prohibited by the terms of the Subordinated
Indenture. (Subordinated Indenture Section 3.02(b)).
By reason of subordination, in the event of the Corporation's insolvency,
holders of Senior Indebtedness may receive more, ratably, and holders of the
Subordinated Debt Securities may receive less, ratably, than other creditors of
the Corporation. However, such subordination will not prevent the occurrence of
any Event of Default. (Subordinated Indenture Section 3.12).
The Subordinated Indenture does not restrict the incurrence of additional
Senior Indebtedness.
"Senior Indebtedness" means (a) the principal of, and premium, if any, and
interest on all indebtedness of the Corporation for money borrowed, whether
outstanding on the date of execution of the Indenture or thereafter created,
assumed or incurred, (b) all obligations to make payment pursuant to the terms
of financial instruments, such as (i) securities contracts and foreign currency
exchange contracts, (ii) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreement, options, commodity futures contracts and commodity
options contracts, and (iii) similar financial
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instruments; except, in the case of both (a) and (b) above, such indebtedness
and obligations that are expressly stated to rank junior in right of payment to,
or PARI PASSU in right of payment with the Subordinated Debt Securities, (c) any
indebtedness or obligations of others of the kind described in both (a) and (b)
above for payment of which the Corporation is responsible or liable as guarantor
or otherwise, and (d) any deferrals, renewals or extensions of any such Senior
Indebtedness.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Under each of the Indentures, the Corporation may not consolidate with or
merge into, or convey, transfer or lease its properties and assets substantially
as an entirety to, any Person (a "successor Person"), UNLESS (i) the successor
Person (if any) is a corporation, partnership, trust or other entity organized
and validly existing under the laws of any domestic jurisdiction and assumes the
Corporation's obligations on the Securities and under such Indenture, (ii)
immediately after giving effect to the transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing and (iii) certain other
conditions are met. (Subordinated Indenture Section 10.01 and Senior Indenture
Section 801). The Senior Indenture also will not allow a Person to merge into,
or convey, transfer or lease its properties and assets substantially as an
entirety to the Corporation unless the aforementioned requirements are met.
COVENANTS OF CENTRAL FIDELITY
The Indentures do not restrict Central Fidelity from incurring, assuming or
becoming liable for any type of debt nor from creating, assuming, incurring or
permitting to exist any mortgage, pledge, encumbrance, lien or charge on its
property. In addition, the Indentures do not require Central Fidelity to
maintain any financial ratios or specified levels of net worth or liquidity and
do not contain any other provisions which would provide protection to Holders
due to a sudden or dramatic decline in the credit quality of the Debt Securities
caused by change in control, recapitalization or other capital restructuring of
Central Fidelity.
EVENTS OF DEFAULT
SENIOR INDENTURE
Each of the following will constitute an Event of Default under the Senior
Indenture with respect to Senior Debt Securities of any series: (a) failure to
pay principal of or any premium on any Senior Debt Security of that series when
due; (b) failure to pay any interest on any Senior Debt Securities of that
series when due, continued for 30 days; (c) failure to deposit any sinking fund
payment, when due, in respect of any Senior Debt Security of that series; (d)
failure to perform any other covenant of the Corporation in the Senior Indenture
(other than a covenant included in the Indenture solely for the benefit of a
series other than that series), continued for 60 days after written notice has
been given to the Corporation by the Senior Trustee, or the Holders of at least
10% in principal amount of the Outstanding Securities of that series, as
provided in the Senior Indenture; (e) failure to pay when due (subject to any
applicable grace period) the principal of, or acceleration of, any indebtedness
for money borrowed by the Corporation having an aggregate principal amount
outstanding of at least $2,000,000, if, in the case of any such failure, such
indebtedness has not been discharged or, in the case of any such acceleration,
such indebtedness has not been discharged or such acceleration has not been
rescinded or annulled, in each case within 10 days after written notice has been
given to the Corporation by the Senior Trustee, or the Holders of at least 10%
in principal amount of the Outstanding Securities of that series, as provided in
the Senior Indenture; (f) certain events in bankruptcy, insolvency or
reorganization; and (g) any additional events of default applicable to such Debt
Securities as described in the applicable Prospectus Supplement. (Senior
Indenture Section 501).
If an Event of Default (other than an Event of Default described in clause
(f) above) with respect to the Senior Debt Securities of any series at the time
Outstanding shall occur and be continuing, either the Senior Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of that series by notice as provided in the Senior Indenture may
declare the principal amount of the Senior Debt Securities of that series (or,
in the case of any Senior Debt Security that is an Original Issue Discount
Security or the principal amount of which is not then determinable, such portion
of the principal amount of such Senior Debt Security, or such other amount in
lieu of such principal amount, as may be specified in the terms of such Senior
Debt Security) to be due and payable immediately. If an Event of Default
described in clause (f) above with respect to the Senior Debt Securities of any
series at the time Outstanding shall occur, the principal amount of all the
Senior Debt Securities of that series (or, in the case of any such Original
Issue Discount Security or other Senior Debt Security, such specified amount)
will automatically, and without any action by the Senior Trustee or any Holder,
become immediately due and payable. After any such acceleration, but before a
judgment or decree based on acceleration, the Holders of a majority in aggregate
principal amount of the Outstanding Securities of that series may, under certain
circumstances,
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rescind and annul such acceleration if all Events of Default, other than the
non-payment of accelerated principal (or other specified amount), have been
cured or waived as provided in the Senior Indenture. (Senior Indenture Section
502). For information as to waiver of defaults, see "Modification and Waiver".
Subject to the provisions of the Senior Indenture relating to the duties of
the Senior Trustee in case an Event of Default shall occur and be continuing,
the Senior Trustee will be under no obligation to exercise any of its rights or
powers under the Senior Indenture at the request or direction of any of the
Holders, unless such Holders shall have offered to the Senior Trustee reasonable
indemnity. (Senior Indenture Section 603). Subject to such provisions for the
indemnification of the Senior Trustee, the Holders of a majority in aggregate
principal amount of the Outstanding 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 Senior Trustee or exercising any trust or power conferred on
the Senior Trustee with respect to the Senior Debt of that series. (Senior
Indenture Section 512).
No Holder of a Senior Debt Security of any series will have any right to
institute any proceeding with respect to the Senior Indenture, or for the
appointment of a receiver or a trustee, or for any other remedy thereunder,
unless (i) such Holder has previously given to the Senior Trustee written notice
of a continuing Event of Default with respect to the Securities of that series,
(ii) the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series have made written request, and such Holder
or Holders have offered reasonable indemnity, to the Senior Trustee to institute
such proceeding as trustee and (iii) the Senior Trustee has failed to institute
such proceeding, and has not received from the Holders of a majority in
aggregate principal amount of the Outstanding Securities of that series a
direction inconsistent with such request, within 60 days after such notice,
request and offer. (Senior Indenture Section 507). However, such limitations do
not apply to a suit instituted by a Holder of a Senior Debt Security for the
enforcement of payment of the principal of or any premium or interest on such
Senior Debt Security on or after the applicable due date specified in such
Senior Debt Security. (Senior Indenture Section 508).
The Corporation will be required to furnish to the Senior Trustee annually
a statement by certain of its officers as to whether or not the Corporation, to
their knowledge, is in default in the performance or observance of any of the
terms, provisions and conditions of the Indenture and, if so, specifying all
such known defaults. (Senior Indenture Section 1004).
SUBORDINATED INDENTURE
The Subordinated Indenture defines an Event of Default with respect to the
Subordinated Debt Securities as being any one of the following events: (a)
default for 30 days in the payment of any interest on any of the Subordinated
Debt Securities; (b) default in the payment when due of the principal (including
any sinking fund installment or analogous obligation) on any of the Subordinated
Debt Securities; (c) a default or event of default under any instrument under
which there may be issued, or by which there may be secured or evidenced, any
indebtedness of the Corporation (other than the Subordinated Debt Securities or
indebtedness to a Subsidiary) or of any Subsidiary (other than indebtedness of
any Subsidiary owing to the Corporation or to another Subsidiary) shall happen
and not less than $2,000,000 of such indebtedness shall be past due, or become
due by acceleration, and such indebtedness or acceleration is not discharged or
rescinded within 15 days after notice by the Subordinated Trustee or holders of
at least 25% in aggregate principal amount of the outstanding Subordinated Debt
Securities; (d) final judgment(s) or order(s) for the payment of money in excess
of $2,000,000 is entered against Central Fidelity or the Bank and within 90 days
of entry is not discharged or the execution thereof is not stayed pending appeal
or within 90 days after the expiration of the stay, the judgment(s) or order(s)
is not discharged; (e) default in the observance or performance of any other
covenant in the Subordinated Debt Securities or the Subordinated Indenture for
90 days after notice by the Subordinated Trustee or holders of at least 25% in
aggregate principal amount of the outstanding Subordinated Debt Securities; or
(f) certain events of bankruptcy, insolvency or reorganization of the
Corporation or the Bank (other than the appointment of a conservator with
respect to the Bank). (Subordinated Indenture Section 5.01). Rights of
acceleration in case an Event of Default occurs are limited. Payment of
principal of the Subordinated Debt Securities may be accelerated only in the
case of an "Acceleration Event" which is defined in the Subordinated Indenture
as any of the bankruptcy, insolvency or reorganization events with respect to
Central Fidelity or the Bank that constitute an Event of Default. There is no
right of acceleration in the case of a default in the payment of principal of or
any interest on the Subordinated Debt Securities or the performance of any other
covenant of the Corporation in the Subordinated Indenture.
In case an Acceleration Event shall have occurred and be continuing, the
Subordinated Trustee or the holders of not less than 25% in aggregate principal
amount of the outstanding Subordinated Debt Securities may declare the principal
of all the securities of such series to be due and payable. (Subordinated
Indenture Section 5.01). The Subordinated Indenture provides that the
Subordinated Trustee, within 90 days after the occurrence of a default with
respect to Subordinated Debt Securities, shall mail to the holders of the
Subordinated Debt Securities notice of all uncured defaults known to it that
have not been
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waived (the term defaults to include events specified above which, after notice
or lapse of time or both, would become an Event of Default); provided that,
except in the case of default in the payment of principal of or any interest on
any of the Subordinated Debt Securities, the Subordinated Trustee may withhold
such notice if it in good faith determines that withholding such notice is in
the interest of the holders of the Subordinated Debt Securities. (Subordinated
Indenture Section 5.08).
Subject to the provisions of the Subordinated Indenture relating to the
duties of the Subordinated Trustee in case an Event of Default shall occur and
be continuing, the Subordinated Trustee is under no obligation to exercise any
of the rights or powers under the Subordinated Indenture at the request, order
or direction of any of the holders of the Subordinated Debt Securities, unless
such holder offers to the Subordinated Trustee reasonable indemnity.
(Subordinated Indenture Section 6.02(d)). Subject to certain limitations
contained in the Subordinated Indenture (including among other limitations that
the Subordinated Trustee will not be exposed to personal liability), the holders
of a majority in aggregate principal amount of the outstanding Subordinated Debt
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Subordinated Trustee, or exercising
any trust or power conferred on the Subordinated Trustee. (Subordinated
Indenture Section 5.07).
No holder of any Subordinated Debt Securities will have any right to
institute any proceeding with respect to the Subordinated Indenture or for any
remedy thereunder unless such holder previously shall have given to the
Subordinated Trustee written notice of a continuing Event of Default and unless
also the holders of not less than 25% in aggregate principal amount of the
outstanding Subordinated Debt Securities shall have made written request, and
offered reasonable indemnity, to the Subordinated Trustee to institute such
proceeding as trustee, and the Subordinated Trustee shall not have received from
the holders of a majority in principal amount of the outstanding Subordinated
Debt Securities a direction inconsistent with such request and shall have failed
to institute such proceeding within 60 days. (Subordinated Indenture Section
5.04). However, the holder of any Subordinated Debt Security will have an
absolute right to receive payment of the principal of and any interest on such
Subordinated Debt Security on or after the due dates expressed in such
Subordinated Debt Security and to institute suit for the enforcement of any such
payment. (Subordinated Indenture Section 5.04).
The Corporation is obligated to furnish to the Subordinated Trustee
annually a statement as to the performance by the Corporation of its obligations
under the Subordinated Indenture and as to any default in such obligations.
(Subordinated Indenture Section 4.04).
MODIFICATION AND WAIVER
SENIOR INDENTURE
Modifications and amendments of the Senior Indenture may be made by the
Corporation and the Senior Trustee with the consent of the Holders of 66 2/3% in
aggregate principal amount of the Outstanding Securities of each series affected
by such modification or amendment; PROVIDED, HOWEVER, that no such modification
or amendment may, without the consent of the Holder of each Outstanding Security
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, (b) reduce the
principal amount of, or any premium or interest on, any Security, (c) reduce the
amount of principal of an Original Issue Discount Security or any other Security
payable upon acceleration of the Maturity thereof, (d) change the place or
currency of payment of principal of, or any premium or interest on, any
Security, (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Security, (f) reduce the percentage in
principal amount of Outstanding Securities of any series, the consent of whose
Holders is required for modification or amendment of the Senior Indenture, (g)
reduce the percentage in principal amount of Outstanding Securities of any
series necessary for waiver of compliance with certain provisions of the Senior
Indenture or for waiver of certain defaults or (h) modify such provisions with
respect to modification and waiver. (Senior Indenture Section 902).
The Holders of 66 2/3% in principal amount of the Outstanding Securities of
any series may waive compliance by the Corporation with certain restrictive
provisions of the Senior Indenture. (Senior Indenture Section 1008). The Holders
of a majority in principal amount of the Outstanding Securities of any series
may waive any past default under the Senior Indenture, except a default in the
payment of principal, premium or interest and certain covenants and provisions
of the Senior Indenture which cannot be amended without the consent of the
Holder of each Outstanding Security of such series affected. (Senior Indenture
Section 513).
The Senior Indenture provides that in determining whether the Holders of
the requisite principal amount of the Outstanding Securities have given or taken
any direction, notice, consent, waiver or other action under the Senior
Indenture as of any date, (i) the principal amount of an Original Issue Discount
Security that will be deemed to be Outstanding will be the amount of the
principal thereof that would be due and payable as of such date upon
acceleration of the Maturity thereof to such date, (ii) if, as of such date, the
principal amount payable at the Stated Maturity of a Senior Debt Security is not
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determinable (for example, because it is based on an index), the principal
amount of such Senior Debt Security deemed to be Outstanding as of such date
will be an amount determined in the manner prescribed for such Senior Debt
Security and (iii) the principal amount of a Senior Debt Security denominated in
one or more foreign currencies or currency units that will be deemed to be
Outstanding will be the U.S. dollar equivalent, determined as of such date in
the manner prescribed for such Security, of the principal amount of such Senior
Debt Security (or, in the case of a Senior Debt Security described in clause (i)
or (ii) above, of the amount described in such clause). Certain Securities,
including those for whose payment or redemption money has been deposited or set
aside in trust for the Holders and those that have been fully defeased pursuant
to Section 1302, will not be deemed to be Outstanding. (Senior Indenture Section
101).
Except in certain limited circumstances, the Corporation will be entitled
to set any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give or take any direction,
notice, consent, waiver or other action under the Senior Indenture, in the
manner and subject to the limitations provided in the Senior Indenture. In
certain limited circumstances, the Senior Trustee will be entitled to set a
record date for action by Holders. If a record date is set for any action to be
taken by Holders of a particular series, such action may be taken only by
persons who are Holders of Outstanding Securities of that series on the record
date. To be effective, such action must be taken by Holders of the requisite
principal amount of such Senior Debt Securities within a specified period
following the record date. For any particular record date, this period will be
180 days or such shorter period as may be specified by the Corporation (or the
Senior Trustee, if it set the record date), and may be shortened or lengthened
(but not beyond 180 days) from time to time. (Senior Indenture Section 104).
SUBORDINATED INDENTURE
The Subordinated Indenture contains provisions permitting the Corporation
and the Subordinated Trustee to modify the Subordinated Indenture with the
consent of the holders of not less than a majority in aggregate principal amount
of the outstanding Subordinated Debt Securities, except that, without the
consent of the holder of each Subordinated Debt Security, no such modification
may, among other things: (a) change the stated maturity date of the principal
of, or any installment of principal or interest on, any outstanding Subordinated
Debt Security; (b) reduce the principal amount of, or any interest on, any
outstanding Subordinated Debt Security; (c) change the place of payment of
principal of, or any interest on, any outstanding Subordinated Debt Security;
(d) impair the right to institute suit for the enforcement of any payment on or
with respect to any outstanding Subordinated Debt Securities; (e) make any
change in the subordination provisions that adversely affects the rights of any
holder of Subordinated Debt Securities; or (f) reduce the percentage in
principal amount of outstanding Subordinated Debt Securities, the consent of
which is required for modification or amendment of the Subordinated Indenture or
for waiver of compliance with certain provisions of the Subordinated Indenture
or for waiver of certain defaults.
Prior to any acceleration of the Subordinated Debt Securities, the holders
of a majority in aggregate principal amount of the outstanding Subordinated Debt
Securities may waive any past default or Event of Default under the Subordinated
Indenture, except a default under a covenant that cannot be modified without the
consent of each holder of a Subordinated Debt Security. (Subordinated Indenture
Section 5.07(b)). In addition, the holders of a majority in aggregate principal
amount of the outstanding Subordinated Debt Securities may rescind a declaration
of acceleration of the Subordinated Debt Securities before any judgment has been
obtained if (i) the Corporation pays the Subordinated Trustee certain amounts
due the Subordinated Trustee plus all matured installments of principal of and
any interest on the Subordinated Debt Securities (other than installments due by
acceleration) and interest on the overdue installments to the extent provided in
the Subordinated Indenture and (ii) all other defaults with respect to the
Subordinated Debt Securities under the Subordinated Indenture have been cured or
waived. (Subordinated Indenture Section 5.01).
DEFEASANCE AND COVENANT DEFEASANCE FOR SENIOR DEBT SECURITIES
If and to the extent indicated in the applicable Prospectus Supplement, the
Corporation may elect, at its option at any time, to have the provisions of
Section 1302 of the Senior Indenture, relating to defeasance and discharge of
indebtedness, or Section 1303 of the Senior Indenture, relating to defeasance of
certain restrictive covenants in the Senior Indenture, applied to the Senior
Debt Securities of any series, or to any specified part of a series. (Senior
Indenture Section 1301).
DEFEASANCE AND DISCHARGE. The Senior Indenture provides that, upon the
Corporation's exercise of its option (if any) to have Section 1302 applied to
any Senior Debt Securities, the Corporation will be discharged from all its
obligations with respect to such Senior Debt Securities (except for certain
obligations to exchange or register the transfer of Senior Debt Securities, to
replace stolen, lost or mutilated Senior Debt Securities, to maintain paying
agencies and to hold moneys for payment in trust) upon the deposit in trust for
the benefit of the Holders of such Senior Debt Securities of money or U.S.
Government Obligations, or both, which, through the payment of principal and
interest in respect thereof in accordance with
20
<PAGE>
their terms, will provide money in an amount sufficient to pay the principal of
and any premium and interest on such Senior Debt Securities on the respective
Stated Maturities in accordance with the terms of the Senior Indenture and such
Senior Debt Securities. Such defeasance or discharge may occur only if, among
other things, the Corporation has delivered to the Senior Trustee an Opinion of
Counsel to the effect that the Corporation has received from, or there has been
published by, the United States Internal Revenue Service a ruling, or there has
been a change in tax law, in either case to the effect that Holders of such
Senior Debt Securities will not recognize gain or loss for federal income tax
purposes as a result of such deposit, defeasance and discharge and will be
subject to federal income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit, defeasance and discharge
were not to occur. (Senior Indenture Sections 1302 and 1304).
DEFEASANCE OF CERTAIN COVENANTS. The Senior Indenture provides that, upon
the Corporation's exercise of its option (if any) to have Section 1303 of the
Senior Indenture applied to any Senior Debt Securities, the Corporation may omit
to comply with certain restrictive covenants, including any that may be
described in the applicable Prospectus Supplement, the occurrence of certain
Events of Default, which are described above in clause (d) (with respect to such
restrictive covenants) and clause (e) under "Events of Default" and any that may
be described in the applicable Prospectus Supplement, will be deemed not to be
or result in an Event of Default, in each case with respect to such Senior Debt
Securities. The Corporation, in order to exercise such option, will be required
to deposit, in trust for the benefit of the Holders of such Senior Debt
Securities, money or U.S. Government Obligations, or both, which, through the
payment of principal and interest in respect thereof in accordance with their
terms, will provide money in an amount sufficient to pay the principal of and
any premium and interest on such Senior Debt Securities on the respective Stated
Maturities in accordance with the terms of the Senior Indenture and such Senior
Debt Securities. The Corporation will also be required, among other things, to
deliver to the Senior Trustee an Opinion of Counsel to the effect that Holders
of such Senior Debt Securities will not recognize gain or loss for federal
income tax purposes as a result of such deposit and defeasance of certain
obligations and will be subject to federal income tax on the same amount, in the
same manner and at the same times as would have been the case if such deposit
and defeasance were not to occur. In the event the Corporation exercised this
option with respect to any Senior Debt Securities and such Senior Debt
Securities were declared due and payable because of the occurrence of any Event
of Default, the amount of money and U.S. Government Obligations so deposited in
trust would be sufficient to pay amounts due on such Senior Debt Securities at
the time of their respective Stated Maturities but may not be sufficient to pay
amounts due on such Senior Debt Securities upon any acceleration resulting from
such Event of Default. In such case, the Corporation would remain liable for
such payments. (Senior Indenture Sections 1303 and 1304).
NOTICES
Notices to Holders of the Debt Securities will be given by mail to the
addresses of such Holders as they may appear in the Security Register
(Subordinated Indenture Sections 5.08 and 8.02 and Senior Indenture Sections 101
and 106) and by general publication with respect to Holders of Bearer
Securities. (Subordinated Indenture Sections 5.08 and 8.02).
TITLE
The Corporation, the Trustees and any agent of the Corporation or the
Trustees may treat the Person in whose name a Debt Security is registered (and
with respect to a Bearer Security, the bearer of such security or coupon) as the
absolute owner thereof (whether or not such Debt Security may be overdue) for
the purpose of making payment and for all other purposes. (Subordinated
Indenture Section 7.03 and Senior Indenture Section 308).
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed
in accordance with, the law of the State of New York. (Subordinated Indenture
Section 16.04 and Senior Indenture Section 112).
REGARDING THE TRUSTEE
Any Trustee may resign or be removed with respect to one or more series of
Debt Securities and a successor Trustee may be appointed to act with respect to
such series. In the event that two or more persons are acting as Trustee with
respect to different series of Debt Securities, each such Trustee shall be a
Trustee of a trust under the related Indenture separate and apart from the trust
administered by any other such Trustee, and any action described herein to be
taken by the "Trustee" may then be taken by each such Trustee with respect to,
and only with respect to, the one or more series of Debt Securities for which it
is Trustee.
21
<PAGE>
PLAN OF DISTRIBUTION
The Corporation may sell the Securities to one or more underwriters for
public offering and sale by them or may sell the Securities to investors
directly or through agents. The applicable Prospectus Supplement will set forth
the terms of the offering of the Securities offered thereby, including the names
of any underwriters, agents or dealers, the purchase price of such Securities
and the proceeds to the Corporation from any sale, any underwriting discounts
and other items constituting underwriters' compensation and any discounts and
commissions allowed or reallowed or paid to dealers or agents.
Underwriters may offer and sell the Securities at a fixed price or prices
that may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The
Corporation also may, from time to time, authorize dealers, acting as the
Corporation's agents, to offer and sell the Securities upon such terms and
conditions as set forth in the related Prospectus Supplement. In connection with
the sale of the Securities, underwriters may receive compensation from the
Corporation in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of the Securities for whom they may act as
agent. Underwriters may sell the 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 agents.
Any underwriting compensation paid by the Corporation to underwriters or
agents in connection with the offering of the Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the related Prospectus Supplement. Dealers and agents
participating in the distribution of the 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 Securities may be deemed to be underwriting
discounts and commissions. Underwriters, dealers and agents may be entitled,
under agreements entered into with the Corporation, to indemnification against
and contribution towards certain liabilities, including liabilities under the
Securities Act.
Any Securities issued hereunder (other than Common Stock) will be new
issues of securities with no established trading market. Any underwriters or
agents to or through whom such Securities are sold by the Corporation for public
offering and sale may make a market in such Securities, but such underwriters or
agents will not be obligated to do so and may discontinue any market at any time
without notice. No assurance can be given as to the liquidity of the trading
market for any such Securities.
Certain of the underwriters, dealers or agents and their associates may be
customers of, engage in transactions with, and perform services for, the
Corporation and certain of its affiliates in the ordinary course of business.
Except as otherwise stated in the applicable Prospectus Supplement, any loans
and outstanding commitments to such underwriters, dealers or agents and their
associates will be made on terms, including interest rates and collateral, no
more favorable than those prevailing at the time for comparable transactions
with other persons and will not involve more than normal risk of collectibility.
VALIDITY OF THE SECURITIES
The validity of the Securities will be passed upon for the Corporation by
the counsel for the Corporation named in the applicable Prospectus Supplement,
and for any underwriters by the counsel for such underwriters named in the
applicable Prospectus Supplement.
EXPERTS
The consolidated financial statements of the Corporation and its
subsidiaries incorporated in this Prospectus by reference to the Corporation'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 upon the authority of said firm
as experts in accounting and auditing.
22
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS
The following exhibits are filed on behalf of the Registrant as part of
this Registration Statement:
<TABLE>
<S> <C>
4.8 Amended and Restated Rights Agreement, dated as of November 9, 1994, between Central Fidelity Banks, Inc. and Central
Fidelity National Bank, as Rights Agent, incorporated by reference to Exhibit 1 to Form 8 Amendment No.1 to
Registration Statement on Form 8-A, File No. 0-8829.
12 Computation of Ratios of Earnings to Fixed Charges.
23.1 Consent of KPMG Peat Marwick LLP.
25.1 Statement of Eligibility of Trustee for Subordinated Indenture.*
</TABLE>
*To be filed by post-effective amendment or by current report on Form 8-K
pursuant to the Securities Exchange Act of 1934, as amended, as appropriate.
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of Richmond, Commonwealth of Virginia, on June 30,
1995.
CENTRAL FIDELITY BANKS, INC.
By /s/ LEWIS N. MILLER, JR.
Lewis N. Miller, Jr.
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registration Statement has been signed by the following persons in the
capacities indicated on June 30, 1995.
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <S>
/s/ LEWIS N. MILLER, JR. Chairman of the Board, Chief Executive Officer and Director
Lewis N. Miller, Jr.
/s/ CHARLES W. TYSINGER Corporate Executive Officer and Treasurer (Principal Financial
Charles W. Tysinger Officer)
/s/ JAMES F. CAMPBELL Senior Vice President and Controller (Principal Accounting
James F. Campbell Officer)
* Director
James F. Betts
* Director
Alvin R. Clements
Director
Phyllis L. Cothran
* Director
Jack H. Ferguson
* Director
Robert L. Freeman
* Director
Thomas R. Glass
Director
Minnie Bassett Lane
* Director
George R. Lewis
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C>
* Director
G. Bruce Miller
* Director
T. Justin Moore, Jr.
* Director
Richard L. Morrill
* Director
Lloyd U. Noland, III
* Director
William G. Reynolds, Jr.
* Director
Kenneth S. White
</TABLE>
* William N. Stoyko, by signing his name hereto, signs this document on behalf
of each of the persons indicated by an asterisk above pursuant to powers of
attorney duly executed by such persons and filed herewith with the Securities
and Exchange Commission.
/s/ WILLIAM N. STOYKO
William N. Stoyko
Attorney-in-Fact
II-3
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
4.8 Amended and Restated Rights Agreement, dated as of November 9,
1994, between Central Fidelity Banks, Inc. and Central Fidelity
National Bank, as Rights Agent, incorporated by reference to
Exhibit 1 to Form 8 Amendment No.1 to Registration Statement on
Form 8-A, File No. 0-8829.
12 Computation of Ratios of Earnings to Fixed Charges.
23.1 Consent of KPMG Peat Marwick LLP.
25.1 Statement of Eligibility of Trustee for Subordinated Indenture.*
*To be filed by post-effective amendment or by current report on Form 8-K
pursuant to the Securities Exchange Act of 1934, as amended, as appropriate.
<TABLE>
Exhibit 12
CENTRAL FIDELITY BANKS, INC.
RATIO OF EARNINGS TO FIXED CHARGES
FOR THE PERIODS INDICATED
<CAPTION>
Three Months ended
March 31 Year ended December 31,
1995 1994 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
Net income $25,720 $29,291 $84,864 $102,917 $78,516 $60,435 $55,753
Income tax expense 11,804 14,230 39,056 44,334 30,782 18,909 13,609
Pretax income $37,524 $43,521 $123,920 $147,251 $109,298 $79,344 $69,362
Fixed charges:
Interest on borrowings $29,669 $16,181 $87,059 $50,553 $33,364 $43,620 $54,353
Amortization of debt
issuance expenses 35 29 123 125 44 42 42
Interest portion of rental expense 877 862 3,454 3,377 3,253 3,047 2,938
Excluding interest on deposits $30,581 $17,072 $90,636 $54,055 $36,661 $46,709 $57,333
Interest on deposits $72,671 $54,348 $243,632 $239,178 $252,333 $275,745 $271,749
Including interest on deposits $103,252 $71,420 $334,268 $293,233 $288,994 $322,454 $329,082
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits 2.23 3.55 2.37 3.72 3.98 2.70 2.21
Including interest on deposits 1.36 1.61 1.37 1.50 1.38 1.25 1.21
</TABLE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Central Fidelity Banks, Inc.:
We consent to the use of our report incorporated herein and to the reference to
our firm under the heading "Experts" in the prospectus.
/s/ KPMG PEAT MARWICK LLP
Richmond, Virginia
June 30, 1995
