CENTRAL FIDELITY BANKS, INC.
STOCK PURCHASE PROGRAM
1,500,000 SHARES OF COMMON STOCK
PAR VALUE $5.00 PER SHARE
PROSPECTUS
Dated July 1, 1996
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Table of Contents:
Statement of Available Information [ 2 ]
Incorporation of Certain Documents by Reference [ 2 ]
The Company [ 3 ]
Description of the Stock Purchase Program [ 3 ]
Purpose [ 3 ]
Features [ 4 ]
Administration [ 5 ]
Costs [ 5 ]
Participation [ 5 ]
Enrollment [ 5 ]
Purchase Options [ 6 ]
Automatic Account Debits [ 6 ]
Cash Payments [ 6 ]
Dividend Reinvestment [ 7 ]
Direct Deposit of Cash Dividends [ 7 ]
Price and Timing of Purchases [ 7 ]
Custody and Deposit of Shares [ 8 ]
Transfer of Shares [ 8 ]
Statements [ 8 ]
Voting of Shares [ 9 ]
Withdrawal or Sale of Shares [ 9 ]
Termination [ 9 ]
Liability of the Company and the Bank [ 10 ]
Miscellaneous Matters [ 10 ]
Other Information [ 11 ]
Federal Income Tax Considerations [ 11 ]
Use of Proceeds [ 12 ]
Indemnification [ 12 ]
Legal Matters [ 12 ]
Experts [ 13 ]
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CENTRAL FIDELITY BANKS, INC.
STOCK PURCHASE PROGRAM
1,500,000 SHARES OF COMMON STOCK
PAR VALUE $5.00 PER SHARE
This Prospectus relates to an aggregate of 1,500,000 authorized and unissued
shares of common stock, $5.00 par value per share ("Common Stock"), of Central
Fidelity Banks, Inc. (the "Company") reserved for purchase under, and
participations in, the Central Fidelity Banks, Inc. Stock Purchase Program (the
"Program").
The Program is a means by which investors may conveniently purchase shares of
Common Stock of the Company, either on a monthly basis or from time to time.
Participants in the Program may make monthly investments in Common Stock through
debits against their eligible deposit accounts in banks or other financial
institutions, or may make voluntary cash payments at any time. In addition, the
Program offers participants the opportunity to reinvest all, a portion or none
of cash dividends paid on shares of Common Stock or to have cash dividends
directly deposited to a designated deposit account. Participants incur no
brokerage fees to purchase shares of Common Stock under the Program.
Shareholders not electing to participate in the Program will continue to receive
full payment of cash dividends declared by the Company on Common Stock.
INVESTMENTS IN SHARES OF COMMON STOCK HELD IN CUSTODY FOR INVESTORS UNDER THE
PROGRAM ARE NOT GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY, ARE NOT
DEPOSITS OR OBLIGATIONS OF OR GUARANTEED BY A BANK, AND INVOLVE INVESTMENT RISK,
INCLUDING POSSIBLE LOSS OF PRINCIPAL.
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 JULY 1, 1996
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STATEMENT OF AVAILABLE INFORMATION
The Company's principal executive offices are located at 1021 East Cary Street,
Richmond, Virginia 23219, and its telephone number is (804) 782-4000. The
Company 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, Washing- ton, D.C. 20549 and at regional offices
of the Commission at the following locations: Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and World Trade
Center, New York, New York 10048. Copies of such material can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates.
The Company has filed with the Commission a Registration Statement, as amended,
on Form S-3 under the Securities Act of 1933, as amended, with respect to the
Common Stock offered hereby and participations in the Program. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain items of which have been omitted in accordance with the rules and
regulations of the Commission. For further information pertaining to the
Company, the Program and the Common Stock offered hereby, reference is made to
the Registration Statement and amendments and exhibits thereto, which may be
inspected and copied as described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and Exchange
Commission are incorporated herein by reference as of their respective dates.
1. The Company's Annual Report on Form 10-K for 1995 filed pursuant to
Section 13 of the Exchange Act, which contains audited consolidated
financial statements of the Company.
2. The Company's Quarterly Reports on Form 10-Q for the quarter ended
March 31, 1995 filed pursuant to Section 13 of the Exchange Act.
3. The Company's Current Reports on Form 8-K filed January 24, 1996, March
15, 1996, and May 10, 1996.
4. The Company's Report on Form 10-C filed June 18, 1996.
5. The description of the Common Stock and associated preferred share
purchase rights contained in the Form 8-B filed April 30, 1979; Form
8-A dated May 17, 1989; Amendment No. 1 to Form 8-A dated November 18,
1994; and Amendment No. 1 to Form 8-B filed March 15, 1996.
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All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Common Stock pursuant to the Program covered
by this Prospectus, shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of the 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.
The Company will provide, without charge, to each person to whom this Prospectus
is delivered, on the written or oral request of any such person, a copy of any
or all of the foregoing documents incor- porated 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 Lawrence Mistr; Telephone (804) 697-7261; Telefax (804) 697-7260.
THE COMPANY
Central Fidelity Banks, Inc., a Virginia corporation headquartered in Richmond,
Virginia, is a bank holding company registered with the Board of Governors of
the Federal Reserve System under the Bank Holding Company Act of 1956, as
amended. The Company was formed in the late 1970's through the consolidation of
two bank holding companies, Central National Corporation and Fidelity American
Bankshares, Inc., the earliest predecessors of which were organized in 1911 and
1865, respectively. The Company and its subsidiaries comprise the third largest
commercial banking organization within Virginia, based on core deposit market
share data, having assets of over $10.8 billion, deposits of over $7.9 billion
and shareholders' equity of approximately $826 million at December 31, 1995.
The Company conducts its business primarily through its wholly-owned banking
subsidiary, Central Fidelity National Bank, a national banking association (the
"Bank"). As of December 31, 1995, the Bank operated 244 branch offices and 211
automated teller machines. The Company, through the Bank and its other
subsidiaries, provides a wide variety of financial services to a customer base
consisting of individuals, corporations, institutions and governments, located
primarily in Virginia.
The Common Stock, par value $5.00 per share, of the Company is listed on the
NASDAQ National Market System.
DESCRIPTION OF THE STOCK PURCHASE PROGRAM
Purpose
The purpose of the Program is to provide prospective investors and owners of the
Company's Common Stock with an attractive means of investing in shares of the
Common Stock. Participants in the Program ("Participants") may purchase Common
Stock of the Company through (i) automatic withdrawals from their eligible
deposit accounts at the Bank or other financial institutions, (ii)
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cash payments made by check or money order, (iii) reinvestment of cash dividends
on the Company's Common Stock held under the Program or held by the Participant
in certificated form or (iv) a combination of the foregoing.
Features
Participants may:
o Acquire shares of the Company's Common Stock for the first time.
o Purchase Common Stock under the Program without payment of brokerage
commissions and fees.
o Purchase shares of Common Stock systematically through pre-arranged
monthly debits (within specified limits) from an eligible deposit
account at the Bank or at another financial institution.
o Make cash payments (within specified limits) to purchase the Company's
Common Stock at regular intervals or at anytime.
o Reinvest all, a portion or none of the dividends received on shares of
the Company's Common Stock.
o Elect convenient direct deposit of cash dividends received on shares of
Common Stock.
o Invest any amount of money (within specified limits) in shares of
Common Stock, since the Program provides for fractional interests in
the shares held under the Program.
o Utilize the Program's free safekeeping and custodial service for shares
of the Common Stock.
o Maintain records of holdings of Common Stock, and amounts invested
therein, through the free recordkeeping and reporting services provided
by the Program.
o Receive periodic statements through the mail setting forth all
transactions for the Participant's account under the Program.
o Sell all or a portion of the shares of Common Stock held for the
Participant's account under the Program and receive the proceeds
therefrom, subject to payment of any applicable brokerage fees and
taxes.
o Transfer all or a portion of the shares of Common Stock held for the
Participant's account under the Program to another existing or new
account under the Program.
o Withdraw and obtain certificates for all or a portion of the shares of
Common Stock held for the Participant's account under the Program.
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Administration
Central Fidelity National Bank, Richmond, Virginia, which is a wholly-owned
subsidiary of the Company, administers the Program, arranges on behalf of
Participants with an independent agent (the "Independent Agent") for the
purchase and custody of shares of Common Stock acquired under the Program, keeps
Program records, sends statements of account to Participants and performs other
administrative duties relating to the Program. The Bank may be contacted by
writing to:
Stock Purchase Program
c/o Central Fidelity National Bank
Stock Transfer Department
P.O. Box 27602
Richmond, Virginia 23261
or by calling (804) 697-6836 or toll-free 1-800-293-CFBS (2327) between the
hours of 9 a.m. and 5 p.m., Eastern time, on any day when the Bank is open for
business, or by telefax to (804) 697-6990.
Costs
All costs of establishing and administering the Program, including any
applicable brokerage commissions and fees associated with purchases of Common
Stock under the Program, will be paid by the Company. If a Participant directs
the Bank to sell or withdraw any of such Participant's shares held under the
Program, the Bank may deduct from the proceeds of such sale any applicable
brokerage commissions and taxes. In addition, the Bank reserves the right to
impose a reasonable charge for the issuance of duplicate account statements,
research of account balances or transaction histories and other special services
provided at the request of Participants.
Participation
Any owner of the Company's Common Stock and any other person or entity that
wishes to participate in the Program may do so by submitting a properly
completed Enrollment Form. Persons or entities that are residents or citizens of
countries other than the United States, its territories or its possessions may
enroll in the Program if to do so would not constitute a violation of law.
Enrollment
A person or entity may enroll in the Program at any time by completing and
signing an Enrollment Form and returning it to the Bank. Instructions for the
establishment of Program accounts, including but not limited to joint accounts
and custodial accounts for minors, are provided on the Enrollment Form. A
postage-paid envelope and an Enrollment Form are provided with this Prospectus
for this purpose. Upon receipt and acceptance by the Bank, enrollment in the
Program will become effective. Persons or entities presently participating in
the Company's Dividend Reinvestment Plan need take no further action to continue
the reinvestment of their dividends. However, they must submit a Change of
Status Form if they wish to alter their participation or exercise other
available options under the Program. Additional Enrollment Forms, Change of
Status Forms and copies of this Prospectus may be obtained at any time by
telephone or written request to the Bank.
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Purchase Options
Automatic Account Debits
Automatic account debits for purchases of Common Stock under the Program may be
made from the following eligible deposit accounts: (i) regular or interest
checking accounts, savings accounts, money market accounts or other deposit
accounts accessible by check that are maintained with the Bank or (ii) deposit
accounts at other financial institutions that may be accessed by check and
electronic funds transfer debit. Participants may wish to verify that their
deposit accounts may be electronically debited before enrolling in the Program.
To establish an automatic debit on an eligible deposit account, a Participant
must send the Bank a completed and signed Enrollment Form and a voided check or
deposit slip showing the number of the deposit account to be debited and the
name and ABA routing number of the financial institution where the account is
maintained. If the eligible deposit account is a joint account, all account
owners must execute the Enrollment Form. Automatic account debits must be in the
minimum amount of $25 and, when combined with other cash payments under the Plan
made by a Participant, may not exceed $10,000 per month. A Participant should
allow up to 15 business days for the Bank to establish an automatic debit after
receipt of an Enrollment Form.
Automatic account debits will be made on the 5th and/or the 20th of each month,
as designated on the Participant's Enrollment Form (a "Debit Date"). If such
date falls on a Saturday, Sunday or bank holiday, the Debit Date will be the
next banking day. A Participant may discontinue or alter monthly account debits
by filling out and submitting to the Bank a Change of Status Form or otherwise
notifying the Bank in writing. Participants should allow up to 15 business days
after receipt of such instructions by the Bank for an automatic debit to be
discontinued or altered. If the funds from an automatic account debit are not
received by the Bank in a timely fashion for any reason, the Bank will not
purchase Common Stock for the Participant on the next scheduled Purchase Date
unless it has received funds from another source.
Cash Payments
Any Participant who has enrolled in the Program may make cash payments for the
purchase of Common Stock. Participants are not required to make such payments,
and the amount and timing of such payments may vary. A cash payment for the
initial purchase of shares of Common Stock under the Program by the Participant
may be made by enclosing a check or money order for not less than $100 nor more
than $10,000 with the Enrollment Form. Thereafter, cash payments in an amount
not less than $25 nor more than $10,000 per month (when combined with the
Participant's automatic account debits, if any, under the Program) may be made
by check or money order at any time by sending them to the Bank. Checks and
money orders should be made payable to "Central Fidelity Stock Purchase
Program," and Participants should indicate their Program account number on their
checks. Cash payments made by check or money order are subject to collection by
the Bank in U.S. funds. If collected funds are not received by the Bank in time
to be invested on a scheduled Purchase Date, the Bank will hold such payment for
investment on the following Purchase Date. If a check or money order for an
optional cash payment is returned to the Bank unpaid for any reason, the Bank
will not be obligated to purchase Common Stock for the Participant unless it has
received funds from another source. Any cash payment that cannot be invested
under the Program within 35 days of receipt by the Bank shall be returned to the
Participant.
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Dividend Reinvestment
A Participant having shares of Common Stock held under the Program or holding
shares of Common Stock in certificated form may direct that all, a portion or
none of the dividends on such shares be reinvested. Dividends to be reinvested
in shares of the Common Stock are credited to the Participant's account under
the Program when paid, and are automatically invested in shares of Common Stock
on the next Purchase Date. Any shares representing stock dividends or splits
distributed by the Company on shares of Common Stock held for a Participant's
account under the Program will be credited to the Participant's account. A
Participant must be enrolled in the Program and be the owner of shares of Common
Stock on the record date for a dividend in order to have that dividend
reinvested under the Program. Dividends reinvested are not counted towards the
$10,000 monthly limit for investments under the Program.
Direct Deposit of Cash Dividends
Participants also may arrange for direct deposit of any cash dividends not being
reinvested under the Program. Dividends designated for direct deposit will be
paid by electronic transfer of funds to the Participant's designated deposit
account. To establish direct deposit of cash dividends, Participants must
complete and sign an Enrollment Form or Change of Status Form and submit it to
the Bank with a voided check or deposit slip showing the number of the deposit
account to be credited and the name and ABA routing number of the financial
institution where the account is maintained. A Participant may change the
designated account for direct deposit or discontinue this feature by submitting
a signed Change of Status Form or other written instructions to the Bank.
Participants should allow up to 15 days for a direct deposit authorization or
other instruction to be processed and become effective after receipt by the
Bank.
Price and Timing of Purchases
All purchases of Common Stock under the Program will be made on the first
business day of each calendar month or such other day as the Bank may determine
(or on successive days if sufficient shares are not otherwise available) (the
"Purchase Date"), but not less frequently than once in every calendar month. On
the Purchase Date, the Bank will either (i) forward to the Independent Agent
funds available for the purchase of the Company's Common Stock or (ii) apply
such funds towards the purchase from the Company of authorized but unissued
shares of Common Stock. When authorized but unissued shares of Common Stock are
purchased from the Company, the Company will receive the proceeds and use them
for its general corporate purposes. See "USE OF PROCEEDS" below.
The price of shares of Common Stock purchased from the Company under the Program
will be equal to the average of the high and low sales prices for the Common
Stock on the Purchase Date, excluding brokerage commissions, as quoted on the
NASDAQ National Market System. If no shares of Common Stock are traded on a
Purchase Date, the price will be the average of the high and low prices quoted
on the NASDAQ National Market System on the most recent day when shares of
Common Stock were traded. In the case of shares of Common Stock purchased in the
market, the price will be the average price of all shares of Common Stock
purchased by the Independent Agent on behalf of Participants on the Purchase
Date.
If on any Purchase Date the Independent Agent is unable for any reason to
purchase sufficient shares of Common Stock in the market, it may, at the option
of the Company's management, seek to purchase additional shares in the market on
successive days, acquire authorized and unissued shares from the Company and/or
suspend share purchases and allocate purchased shares to
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Program accounts on a pro rata basis. For purposes of determining the average
purchase price of shares purchased in the market, all such shares shall be
deemed to be purchased on the Purchase Date.
The decision as to whether funds will be forwarded to the Independent Agent for
the purchase of Common Stock in the market or whether authorized and unissued
shares of Common Stock will be acquired for the Program directly from the
Company is within the sole discretion of the Company's management.
Custody and Deposit of Shares
Certificates for shares purchased under the Program will be held by the
Independent Agent for the benefit of Participants. The number of shares of
Common Stock purchased and held for the account of a Participant under the
Program will be shown on an account statement mailed to such Participant at
least quarterly. This feature of the Program protects against possible loss,
theft or destruction of stock certificates.
Upon enrolling in the Program or at any time, a Participant holding one or more
certificates for shares of Common Stock may deposit them with the Program. The
shares will be credited to the Participant's account under the Program and held
in the same manner as shares purchased through the Program. Certificates for
shares of Common Stock to be deposited in a Participant's account under the
Program should be endorsed by the owners exactly as shown on the face of the
certificate and sent to the Bank.
Certificates for any number of whole shares of Common Stock credited to a
Participant's account under the Program will be issued without charge upon the
Participant's written request to the Bank. Certificates representing fractional
shares of Common Stock will not be issued to Participants under any
circumstances. Any remaining whole and fractional shares will continue to be
held in the Participant's Program account.
Transfer of Shares
A Participant is entitled to transfer shares of Common Stock credited to such
Participant's account under the Program to another new or existing account under
the Program. Only whole shares may be transferred, unless all of the shares in
the Participant's account are being transferred. If the transfer is to a new
account under the Program, an Enrollment Form for such account must be
completed, signed and submitted to the Bank. All owners of the transferring
account must endorse the request. In addition, the signatures must be guaranteed
by a bank or brokerage firm.
Statements
At least quarterly, the Bank will mail to each Participant a statement
indicating (i) the amount invested and price per share of Common Stock purchased
and sold for the Participant's account under the Program, (ii) the number of
full and fractional shares of Common Stock purchased and sold for the Partici-
pant's account under the Program, (iii) the total number of full and fractional
shares of Common Stock held for the Participant under the Program and (iv) any
other transactions for the Participant's account under the Program, including
the withdrawal or transfer of shares of Common Stock. Participants should retain
their account statements for future reference and for use in tax preparation, as
they will reflect the cost basis and sales price of shares purchased and sold
under the Program and the dates and amounts of all transactions under the
Program.
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Voting of Shares
All shares of Common Stock credited to a Participant's account under the Program
will be voted by the Bank as the Participant directs in writing, or may be voted
by the Participant in person, upon such matters as are submitted to a vote of
the shareholders of the Company. The Bank will not vote the shares held under
the Program for the account of a Participant from whom no voting directions are
received. Proxy materials will be forwarded to each Participant. In addition,
Participants will receive all other periodic reports and communications mailed
generally to shareholders of the Company.
Withdrawal or Sale of Shares
A Participant may request that the Bank sell, or withdraw and issue to the
Participant, one or more certificates for all or part of the shares held for the
Participant's account under the Program. Proceeds from the sale of whole or
fractional shares, less any applicable brokerage commissions and taxes, will be
paid to the Participant by check. The net proceeds from the sale of whole or
fractional shares held in a Participant's account under the Program, and a
certificate for whole shares withdrawn from a Participant's account, will be
mailed by the Bank directly to the Participant. In no event will certificates
for fractional shares of Common Stock held under the Program be issued to
Participants. Participants should allow up to 15 business days for the issuance
of checks representing the net proceeds of shares sold or certificates for
shares withdrawn from the Program. If a Participant submits a request to
withdraw shares of Common Stock held in an account under the Program, all owners
of the account must sign the request. If any portion of a Participant's shares
of Common Stock held under the Program are to be sold, all owners must sign the
request and their signatures must be guaranteed by a bank or brokerage firm.
Enrollment in the Program will continue notwithstanding the withdrawal or sale
of all shares held for a Participant under the Program, unless the Participant
has notified the Bank in writing of the Participant's intent to terminate
enrollment in the Program.
If all shares held for a Participant's account are withdrawn or sold after an
ex-dividend date for the Common Stock but before the dividend payment date, the
dividend on those shares will be paid by check if the Participant has indicated
to the Bank the intent to terminate enrollment in the Program. Otherwise, the
dividends will continue to be reinvested or deposited as previously directed by
the Participant.
Termination
A Participant may terminate enrollment in the Program at any time by submitting
a properly completed and signed Change of Status Form or other written notice to
the Bank. Upon termination of enrollment, a Participant must designate that (i)
all shares in such Participant's account be sold and a check for the proceeds,
less any applicable brokerage commissions and taxes, be issued or (ii) all whole
shares be issued to the Participant in certificate form together with a check
for the proceeds from the sale of fractional shares, less any applicable
brokerage fees and taxes. Participants should allow up to 15 business days for
the processing of any withdrawal request after receipt by the Bank. There is no
charge by the Bank for closing a Participant's account other than payment of any
applicable brokerage commissions and taxes associated with a sale of the
Participant's shares.
The Company reserves the right, exercisable in its discretion, to terminate,
modify or suspend the Program in whole or in part at any time. The Company will
provide written notice to Participants of any such action. Termination,
modification or suspension of the Program will not affect a Participant's
ownership of shares of Common Stock previously purchased under the Program.
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Participants will retain the right to receive stock certificates for whole
shares of Common Stock held in their accounts under the Program and cash for any
fractional share or to direct that some or all shares of Common Stock in their
accounts under the Program be sold. The Company, in its sole discretion, may
also terminate any Participant's account under the Program due to inactivity,
automatic account debits that are unpaid, returned checks or money orders
representing cash payments, or for any other reason.
Liability of the Company and the Bank
Neither the Company, the Bank, the Independent Agent nor their respective
directors, officers, employees or agents shall be liable for any acts or
omissions done or made by them in good faith in connection with the Program,
including without limitation any claim of liability (i) arising out of a failure
to terminate a Participant's account on the death or incompetency of such
Participant prior to the receipt of written notice by the Bank of such death or
the adjudication of incompetency, (ii) with respect to the price or prices at
which shares of Common Stock are purchased or sold for the Participant's account
in accordance with the terms of the Program, (iii) concerning the times when
purchases or sales of shares of Common Stock are made under the Program or (iv)
with respect to modification, suspension or termination of the Program. In no
event shall the Company, the Bank, the Independent Agent or their respective
directors, officers, employees or agents be liable for any change in the value
of the shares of Common Stock acquired or held for the accounts of Participants
under the Program. This provision for limited liability for the Company, the
Bank, the Independent Agent or their respective directors, officers, employees
or agents does not extend to violations of the federal securities laws.
Miscellaneous Matters
In the event the Company should make available to its shareholders rights to
purchase additional shares of Common Stock or other securities of the Company,
the Independent Agent will sell such rights accruing to the shares of Common
Stock held for the Participant's account under the Program and will apply the
net proceeds of such sales to the purchase of additional shares of Common Stock.
A Participant will be able to exercise such rights only if the shares on which
they are issued have previously been withdrawn from the Program and registered
in the name of the Participant.
All funds held by the Bank after the exercise of a purchase option and before
investment in Common Stock will be held in an account that is insured by the
FDIC, subject to applicable FDIC limitations.
No interest will be paid on funds from any source held under the Program,
including funds held for investment in Common Stock and proceeds from the sale
of shares of Common Stock.
All matters in connection with the Program shall be governed by the laws of the
Commonwealth of Virginia and applicable federal law.
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OTHER INFORMATION
The Company's Common Stock is listed on the NASDAQ National Market System. The
price of the Company's Common Stock varies over time, and dividends thereon are
only paid as and when declared by the Company's Board of Directors.
Participation in the Program is not a guaranty that any dividend on the Common
Stock will be declared and paid in the future.
There can be no assurance that shares of Common Stock purchased under the
Program will be worth more or less, at any particular time, than their purchase
price. Participants should note that purchases of Common Stock under the Program
with dividend reinvestments and automatic debits from eligible deposit accounts
will be made systematically in fixed amounts in accordance with the terms of the
Program, unlike purchases with voluntary cash payments or direct market
purchases of Common Stock which may be made in the Participant's discretion.
Accordingly, the timing and amount of purchases from reinvested dividends or
automatic account debits will not be subject to the Participant's judgment
regarding the market price for the Common Stock or other existing or anticipated
market conditions at the time shares are purchased. The Program, because it
involves only investments in Common Stock of the Company, does not provide
investment diversification.
Depending upon its future needs and circumstances, the Company may engage in
additional financings, including the offering and sale of Common Stock, to
increase its capital or for other general corporate purposes. Such activities
may have an effect on the market price of the Common Stock.
INVESTMENTS IN COMMON STOCK HELD UNDER THE PROGRAM ARE NOT FDIC INSURED, ARE NOT
DEPOSITS OR OBLIGATIONS OF OR GUARANTEED BY THE BANK AND INVOLVE INVESTMENT
RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
FEDERAL INCOME TAX CONSIDERATIONS
For income tax purposes, Participants who reinvest their dividends will be
deemed to have received taxable income equal to the amount of all cash dividends
declared and paid by the Company. To the extent dividends paid by the Company to
its shareholders are treated as having been made from the Company's earnings and
profits, such distributions will be dividends taxable as ordinary income.
Historically, the Company has had sufficient earnings and profits so that
Participants may expect the full amount of any distribution under the Program to
be taxable as a dividend. For corporate shareholders, the full amount of
dividends reinvested under the Program will be eligible for the dividends
received deduction available under the Internal Revenue Code.
The cost basis for federal income tax purposes of shares of Common Stock
purchased by a Participant under the Program generally will be the price at
which the shares are purchased by the Independent Agent in the market or issued
by the Company and credited by the Bank to the Participant's account under the
Program. The holding period for shares acquired through the Program will begin
on the day after the date of purchase.
Participants in the Program that are U.S. citizens subject to backup
withholding, and foreign Participants that are subject to U.S. withholding, will
have withheld from dividends and from the proceeds paid to them from sales of
Common Stock held under the Program the amounts required to be withheld under
applicable federal law. The balance of their dividends will be reinvested or
paid to them by check, as they have designated.
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The Company will send to each individual who is a Participant and to the
Internal Revenue Service a 1099 Information Return showing the total amount of
dividends paid on all shares of Common Stock held under the Program on behalf of
the Participant and all shares held in the Participant's name outside the
Program. The Bank will also send a 1099 Information Return showing the proceeds
of all shares sold by the Bank on the Participant's behalf and the amount of any
taxes withheld or brokerage fees paid.
The foregoing is a general summary of the federal tax consequences to
Participants in the Program as of the date of this Prospectus. Participants
should consult their tax advisors for current federal and state tax implications
applicable to them.
USE OF PROCEEDS
The net proceeds from the sale of any authorized and unissued shares of Common
Stock offered under the Program will be used for the general corporate purposes
of the Company.
INDEMNIFICATION
The Articles of Incorporation of the Company, as well as the statutes of the
Commonwealth of Virginia, contain provisions providing for the indemnification
of the directors and officers of the Company against certain liabilities,
including liabilities arising under the Securities Act of 1933. In addition, the
Company carries insurance protecting those persons against such liability.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is
therefore unenforceable.
LEGAL MATTERS
Certain legal matters with respect to the Program and the validity of the shares
of Common Stock offered hereby have been passed upon for the Company by
Williams, Mullen, Christian & Dobbins, Richmond, Virginia. As of July 1, 1996,
attorneys at Williams, Mullen, Christian & Dobbins were beneficial owners of an
aggregate of approximately 355,337 shares of the Company's Common Stock.
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EXPERTS
The consolidated financial statements of Central Fidelity Banks, Inc. as of
December 31, 1995 and 1994, and for each of the years in the three-year period
ended December 31, 1995, incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K for 1995 have been so incorporated by
reference 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. To the extent that KPMG Peat Marwick LLP
audits and reports on consolidated financial statements of Central Fidelity
Banks, Inc. and subsidiaries issued at future dates, and consents to the use of
their report thereon, such consolidated financial statements also will be
incorporated by reference in the Registration Statement in reliance upon their
report and said authority.
No person has been authorized to give any information or to make any
representation other than those contained or incorporated by reference in this
Prospectus and, if given or made, such information or representation must not be
relied upon as having been authorized by the Company. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the
Company since the date hereof. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, any of the securities offered hereby
to any persons or in any jurisdiction under circumstances where such offer or
solicitation would be unlawful.
