Filed pursuant to Rule 424(b)(1)
Registration No. 333-60831
PROSPECTUS
Capital One Financial Corporation
476,427 Shares of Common Stock
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This Prospectus relates to the offering of up to 476,427
shares (each a "Share" and, collectively, the "Shares") of the
common stock, par value $0.01 per share (the "Common Stock"), of
Capital One Financial Corporation (the "Company"), by certain
stockholders of the Company (each a "Selling Shareholder" and,
collectively, the "Selling Shareholders"). On July 31, 1998, the
Company issued the Shares to the Selling Shareholders as
consideration in connection with the Company's acquisition (the
"Acquisition") of Summit Acceptance Corporation, a Texas
corporation ("Summit") and a provider of consumer automobile
financing. The Company issued the Shares to the Selling
Shareholders in a transaction that did not involve a public
offering of securities and therefore was exempt from the
registration and prospectus delivery requirements of the
Securities Act of 1933, as amended (the "Securities Act"). The
Shares are "restricted securities" under the Securities Act as of
the date hereof. All Shares which the Selling Shareholders have
received in connection with the Acquisition are registered for
offer and sale hereunder. See "Selling Shareholders."
The Selling Shareholders (or, subject to certain
conditions, their transferees, donees, pledgees or successors)
may offer and sell all or a portion of the Shares hereunder from
time to time directly to one or more purchasers, including
pledgees, or through broker/dealers or other agents who may
receive compensation in the form of concessions or commissions
from the Selling Shareholders and/or the purchasers of the Shares
for whom they may act as agents, and such compensation in any
given case may be in excess of customary compensation. The offer
and sale of the Shares by the Selling Shareholders from time to
time may be made at fixed prices, at market prices prevailing at
the time of sale, at prices relating to such prevailing market
prices, at varying prices determined at the time of sale or at
negotiated prices, and may be effected in one or more
transactions (which may involve crosses or block transactions)
(i) on any national securities exchange or quotation service on
which the Shares may be listed or quoted at the time of sale,
(ii) in the over-the-counter market, (iii) in privately
negotiated transactions otherwise than on such exchanges or in
the over-the-counter market, (iv) through the writing of options
or through hedging transactions, or (v) by any other legally
available means. See "Selling Shareholders" and "Plan of
Distribution."
None of the proceeds from the sale of the Shares by the
Selling Shareholders will be received by the Company. The Company
will bear all expenses related to the registration of the Shares
by the Company as described herein. The Selling Shareholders will
bear all selling commissions, transfer taxes, and fees and
expenses of any counsel, accountants and other representatives
and agents retained by the Selling Shareholders in connection
with the registration and sale of the Shares. The Company and the
Selling Shareholders have agreed to indemnify each other against
certain liabilities, including certain liabilities under the
Securities Act, or will be entitled to contribution in connection
therewith. See "Use of Proceeds" and "Plan of Distribution."
The Common Stock is listed on the New York Stock Exchange
under the Symbol "COF." On August 11, 1998, the last reported
sale price of the Common Stock on the New York Stock Exchange
Composite Transaction Tape was $114 1/16 per share.
THE SHARES 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.
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The date of this Prospectus is August 12, 1998
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THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF
THE SHARES 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.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS
AND ANY ACCOMPANYING PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE
OFFERING DESCRIBED HEREIN AND THEREIN, AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THIS PROSPECTUS
NOR ANY PROSPECTUS SUPPLEMENT SHALL CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OFFERED
HEREUNDER IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OR SALE IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER IMPLIES THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY AT ANY
TIME SUBSEQUENT TO THE DATE HEREOF.
AVAILABLE INFORMATION
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, including the documents incorporated by
reference herein, can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Commission's
regional offices at Seven World Trade Center, 13th Floor, New
York, New York 10048 and Citicorp Center, Suite 1400, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material
can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Such information, when available, also may be
accessed through the Commission's electronic data gathering,
analysis and retrieval system ("EDGAR") via electronic means,
including the Commission's home page on the Internet at
http://www.sec.gov. Such material also can be inspected at the
office of the New York Stock Exchange, 20 Broad Street, New York,
New York 10005. Information on the operation of the Commission's
Public Reference Room may be obtained by calling the Commission
at 1-800-SEC-0330.
This Prospectus, which constitutes a part of the
registration statement (Registration No. 333-60831) to which it
relates (the "Registration Statement"), does not contain all of
the information set forth in the Registration Statement and in
the exhibits and schedules thereto. For further information with
respect to the Company and the Shares reference is hereby made to
the Registration Statement and such exhibits and schedules. Any
statements contained herein concerning a provision of any
document are not necessarily complete, and, in each instance,
reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by
such reference.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
There are hereby incorporated by reference in this
Prospectus the following documents and information heretofore
filed with the Commission:
1. The Company's Annual Report on Form 10-K for the year
ended December 31, 1997;
2. The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998;
3. The Company's Current Reports on Form 8-K dated January
15, 1998, April 16, 1998, June 12, 1998, July 16, 1998, July 22,
1998 and July 31, 1998; and
4. The descriptions of the Company's Common Stock which are
contained in the registration statements on Form 8-A filed on
August 24, 1994 and November 16, 1995 by the Company to register
such securities under Section 12 of the Exchange Act, including
any amendment or report filed for the purpose of updating such
descriptions.
All documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of
this Prospectus and prior to the termination of the offering of
the Shares hereby, shall be deemed to be incorporated herein by
reference. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which is also incorporated or deemed
to be incorporated by reference herein modifies or supersedes
such 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 undertakes to provide without charge to each
person, including any beneficial owner of Shares, to whom a copy
of this Prospectus has been delivered, upon written or oral
request of such person, a copy of any or all of the documents
which have been or may be incorporated herein by reference, other
than exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents).
Requests for such copies should be directed to Capital One
Financial Corporation, Suite 1300, 2980 Fairview Park Drive,
Falls Church, Virginia 22042-4525, Attention: Corporate
Secretary, telephone (703) 205-1000.
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THE COMPANY
Capital One Financial Corporation (the "Company") is a
holding company, incorporated in Delaware on July 21, 1994, whose
subsidiaries provide a variety of products and services to
consumers. The Company's principal subsidiary, Capital One Bank,
a Virginia state chartered bank, offers credit card products.
Capital One F.S.B., a federally chartered savings bank, provides
certain consumer lending and deposit services. The Company's
Common Stock is listed on the New York Stock Exchange under the
symbol "COF." The Company's principal executive office is located
at 2980 Fairview Park Drive, Suite 1300, Falls Church, Virginia
22042-4525, (telephone number (703) 205-1000).
The Company (including its subsidiaries and the operations
of its predecessor) is one of the oldest continually operating
bank card issuers in the U.S., having commenced operations in
1953, the same year as the formation of what is now MasterCard
International. The growth in managed loans and credit card
accounts achieved by the Company in recent years was due largely
to credit card industry dynamics and the success of the Company's
proprietary information-based strategy initiated in 1988. As of
June 30, 1998, the Company had total assets of $7.7 billion,
total liabilities of $6.5 billion and total equity of $1.1
billion. As of June 30, 1998, the Company had 13.6 million
customers and $15.0 billion in managed consumer loans outstanding
and was one of the largest providers of MasterCard and Visa
credit cards in the world.1
USE OF PROCEEDS
This Prospectus relates to the Shares being offered for the
accounts of the Selling Shareholders. The Company will not
receive any proceeds from the sale of the Shares. As required
pursuant to the Registration Rights Agreement, dated July 31,
1998, among the Company and the Selling Shareholders (the
"Registration Rights Agreement"), the Company will bear all
expenses related to the registration of the Shares by the Company
as described herein. The Selling Shareholders will bear all
selling commissions, transfer taxes and fees and expenses of any
counsel, accountants and other representatives and agents
retained by the Selling Shareholders in connection with the
registration and sale of the Shares.
See "Plan of Distribution."
DESCRIPTION OF COMMON STOCK
The Company is authorized to issue 300,000,000 shares of
Common Stock, par value $.01 per share, of which 65,488,447 were
issued and outstanding at June 30, 1998. The Common Stock is
traded on the New York Stock Exchange under the symbol "COF." All
outstanding shares of Common Stock, including the Shares, have
been validly issued and are fully paid and nonassessable.
Voting and Other Rights
Holders of Common Stock are entitled to one vote for each
share held on all matters submitted to a vote of stockholders and
except as described below, a majority vote is required for all
action to be taken by stockholders. Directors are elected by a
plurality of the votes cast, and stockholders do not have
cumulative voting rights in the election of directors. Shares of
Common Stock do not have any preemptive, subscription,
redemption, sinking fund or conversion rights.
Dividends and Distributions
Subject to preferences that may be applicable to holders of
any outstanding shares of Preferred Stock, holders of Common
Stock are entitled to only such dividends as may be declared by
the Board of Directors of the Company (the "Board of Directors")
out of funds legally available therefor. Upon liquidation,
dissolution or winding-up of the Company, the assets legally
available for distribution to stockholders will be distributable
ratably among the holders of Common Stock at that time
outstanding, subject to prior distribution rights of creditors of
the Company and to the preferential rights of any outstanding
shares of the Company's preferred stock (the "Preferred Stock").
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1 MasterCard and Visa are registered trademarks of MasterCard
International Incorporated and VISA USA, Inc., respectively.
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Antitakeover Legislation
Section 203 of the General Corporation Law of the State of
Delaware (the "Delaware Law") provides that, subject to certain
exceptions specified therein, a corporation shall not engage in
any business combination with any "interested stockholder" for a
three-year period following the time that such stockholder
becomes an interested stockholder unless (i) prior to such time,
the board of directors of the corporation approved either the
business combination or the transaction which resulted in the
stockholder becoming an interested stockholder; (ii) upon
consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding
certain shares); or (iii) at or subsequent to such time, the
business combination is approved by the board of directors of the
corporation and by the affirmative vote of at least 66 2/3% of
the outstanding voting stock which is not owned by the interested
stockholder. Except as otherwise specified in Section 203 of the
Delaware Law, an interested stockholder is defined to include (x)
any person that is the owner of 15% or more of the outstanding
voting stock of the corporation, or is an affiliate or associate
of the corporation and was the owner of 15% or more of the
outstanding voting stock of the corporation, at any time within
three years immediately prior to the relevant date, and (y) the
affiliates and associates of any such person.
Under certain circumstances, Section 203 of the Delaware
Law makes it more difficult for a person who would be an
"interested stockholder" to effect various business combinations
with a corporation for a three-year period. Although the
stockholders may elect to exclude a corporation from the
restrictions imposed thereunder, neither the Restated Certificate
of Incorporation nor the Bylaws of the Company exclude the
Company from the restrictions imposed under Section 203 of the
Delaware Law. It is anticipated that the provisions of Section
203 of the Delaware Law may encourage entities interested in
acquiring the Company to negotiate in advance with the Board of
Directors, since the stockholder approval requirement would be
avoided if a majority of the directors then in office approves
either the business combination or the transaction which results
in the stockholder becoming an interested stockholder.
Certificate of Incorporation and Bylaw Provisions
Certain of the provisions of the Restated Certificate of
Incorporation and Bylaws of the Company discussed below may have
the effect, either alone or in combination with the provisions of
Section 203 of the Delaware Law discussed above, the Rights
discussed below, and certain banking laws and regulations, of
making more difficult or discouraging a tender offer, proxy
contest or other takeover attempt that is opposed by the Board of
Directors but that a stockholder might consider to be in such
stockholder's best interest. Those provisions include (i)
restrictions on the rights of stockholders to remove directors,
(ii) prohibitions against stockholders calling a special meeting
of stockholders or acting by unanimous written consent in lieu of
a meeting, (iii) a "fair price" provision for business
combinations and (iv) requirements for advance notice of actions
proposed by stockholders for consideration at meetings of the
stockholders.
The summary set forth below describes certain provisions of
the Restated Certificate of Incorporation and Bylaws of the
Company and is qualified in its entirety by reference to the
provisions of the Restated Certificate of Incorporation and
Bylaws which have been filed with the Commission.
Classified Board of Directors. The Restated Certificate of
Incorporation and Bylaws of the Company provide that the Board of
Directors, other than those elected by any series of Preferred
Stock, will be divided into three classes of directors, with the
classes to be as nearly equal in number as possible. The class of
directors elected at each annual meeting are elected for a term
expiring at the annual meeting of stockholders held in the third
year following their election and until their successors are
elected and qualified.
The classification of directors will have the effect of
making it more difficult for stockholders to change the
composition of the Board of Directors. At least two annual
meetings of stockholders, instead of one, will generally be
required to effect a change in a majority of the Board of
Directors. Such a delay may be held to ensure that the Company's
directors, if confronted by a holder attempting to force a proxy
contest, a tender or exchange offer, or an extraordinary
corporate transaction, would have sufficient time to review the
proposal as well as any available alternatives to the proposal
and to act in what they believe to be the best interest of the
stockholders. The classification provisions will apply to every
election of directors, however, regardless of whether a change in
the composition of the Board of Directors would be beneficial to
the Company and its stockholders and whether or not a majority of
the Company's stockholders believe that such a change would be
desirable.
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The classification provisions could also have the effect of
discouraging a third party from initiating a proxy contest,
making a tender offer or otherwise attempting to obtain control
of the Company, even though such an attempt might be beneficial
to the Company and its stockholders. The classification of the
Board of Directors could thus increase the likelihood that
incumbent directors will retain their positions. In addition,
because the classification provisions may discourage
accumulations of large blocks of the Company's stock by
purchasers whose objective is to take control of the Company and
remove a majority of the Board of Directors, the classification
of the Board of Directors could tend to reduce the likelihood of
fluctuations in the market price of the Common Stock that might
result from accumulations of large blocks. Accordingly,
stockholders could be deprived of certain opportunities to sell
their shares of Common Stock at a higher market price than might
otherwise be the case.
Number of Directors; Removal; Filling Vacancies. The
Restated Certificate of Incorporation of the Company provides
that, subject to any rights of holders of Preferred Stock to
elect additional directors under specified circumstances, the
number of directors will be fixed in the manner provided in the
Bylaws. The Bylaws provide that, subject to any rights of holders
of Preferred Stock to elect directors under specified
circumstances, the number of directors will be fixed from time to
time exclusively pursuant to a resolution adopted by directors
constituting a majority of the total number of directors that the
Company would have if there were no vacancies on the Board of
Directors (the "Whole Board"), but must consist of not more than
seventeen nor less than three directors. In addition, the Bylaws
provide that, subject to any rights of holders of Preferred
Stock, and unless the Board of Directors otherwise determines,
any vacancies will be filled only by the affirmative vote of a
majority of the remaining directors, even if less than a quorum.
Accordingly, absent an amendment to the Bylaws, the Board of
Directors could prevent any stockholder from enlarging the Board
of Directors and filling the new directorships with such
stockholder's own nominees.
In order to be qualified to serve as a director, a person
must (a) not have attained the age of seventy years and (b)
either (i) be an officer or employee of the Company and not (A)
have voluntarily resigned from the position or office he held at
the time of his election as a director, (B) have retired or been
retired pursuant to the requirements of a pension, profit
sharing, or similar plan or (C) have, at the time of his election
as a director, held a position or office in the Company which has
been changed, other than by an upward or expanded promotion or
(ii) in the case of any person who is not an officer or employee
of the Company, not (A) have retired from or severed his
connection with the organization with which he was affiliated at
the time of his election as a director or (B) have held a
position or office with an organization with which he was
affiliated at the time of his election as a director which has
been changed, other than by an upward or expanded promotion, and
(C) not have a material conflict of interest with the Company (1)
as defined by applicable laws and regulations and (2) the
existence and materiality of which may be determined by a
majority of the remaining directors. Whenever any director shall
cease to be qualified to serve as a director his term shall
expire, but such director shall continue to serve until his
successor is elected and qualified; provided, however, that no
director's term shall so expire if the Board of Directors shall
have waived such qualification.
Under the Delaware Law, unless otherwise provided in the
certificate of incorporation of a company, directors serving on a
classified board may only be removed by the stockholders for
cause. The Restated Certificate of Incorporation and Bylaws of
the Company provide that, subject to the rights of holders of
Preferred Stock to elect directors under specified circumstances,
directors may be removed only for cause and only upon the
affirmative vote of holders of at least 80% of the voting power
of all the then outstanding shares of stock entitled to vote
generally in the election of directors ("Voting Stock"), voting
together as a single class.
No Stockholder Action by Written Consent; Special Meetings.
The Restated Certificate of Incorporation and Bylaws of the
Company provide that, subject to the rights of any holders of
Preferred Stock to elect additional directors under specified
circumstances, stockholder action can be taken only at an annual
or special meeting of stockholders and cannot be taken by written
consent in lieu of a meeting. The Bylaws provide that, subject to
the rights of holders of any series of Preferred Stock to elect
additional directors under specified circumstances, special
meetings of stockholders can be called only by the Chairman of
the Board of Directors or by the Board of Directors pursuant to a
resolution adopted by a majority of the Whole Board. Stockholders
are not permitted to call a special meeting or to require that
the Board of Directors call a special meeting of stockholders.
Moreover, the business permitted to be conducted at any special
meeting of stockholders is limited to the business brought before
the meeting pursuant to the notice of meeting given by the
Company.
The provisions of the Restated Certificate of Incorporation
and Bylaws of the Company prohibiting stockholder action by
written consent may have the effect of delaying consideration of
a stockholder proposal until the next annual
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meeting unless a special meeting is called by the Chairman or at
the request of a majority of the Whole Board. The provisions
would also prevent the holders of a majority of the voting power
of the Voting Stock from unilaterally using the written consent
procedure to take stockholder action and from taking action by
consent. Moreover, a stockholder could not force stockholder
consideration of a proposal over the opposition of the Chairman
and the Board of Directors by calling a special meeting of
stockholders prior to the time the Chairman or a majority of the
Whole Board believes such consideration to be appropriate.
Advance Notice Provisions for Stockholder Nominations and
Stockholder Proposals. The Bylaws establish an advance notice
procedure for stockholders to make nominations of candidates for
election as directors, or bring other business before an annual
meeting of stockholders of the Company (the "Stockholder Notice
Procedure").
The Stockholder Notice Procedure provides that only persons
who are nominated by, or at the direction of, the Board of
Directors, or by a stockholder who has given timely written
notice to the Secretary of the Company prior to the meeting at
which directors are to be elected, will be eligible for election
as directors of the Company. The Stockholder Notice Procedure
provides that at an annual meeting only such business may be
conducted as has been brought before the meeting by, or at the
direction of, the Chairman or the Board of Directors or by a
stockholder who has given timely written notice to the Secretary
of the Company of such stockholder's intention to bring such
business before such meeting. Under the Stockholder Notice
Procedure, for notice of stockholder nominations or proposals to
be made at an annual meeting to be timely, such notice must be
received by the Company not less than 70 days nor more than 90
days prior to the first anniversary of the previous year's annual
meeting (or in the event that the date of the annual meeting is
advanced by more than 30 days, or delayed by more than 70 days,
from such anniversary date, not earlier than the 90th day prior
to such meeting and not later than the later of (x) the 70th day
prior to such meeting and (y) the 10th day after public
announcement of the date of such meeting is first made).
Notwithstanding the foregoing, in the event that the number of
directors to be elected is increased and there is no public
announcement naming all of the nominees for director or
specifying the size of the increased Board of Directors made by
the Company at least 80 days prior to the first anniversary of
the preceding year's annual meeting, a stockholder's notice will
be timely, but only with respect to nominees for any new
positions created by such increase, if it is received by the
Company not later than the 10th day after such public
announcement is first made by the Company. Under the Stockholder
Notice Procedure, for notice of a stockholder nomination to be
made at a special meeting at which directors are to be elected to
be timely, such notice must be received by the Company not
earlier than the 90th day before such meeting and not later than
the later of (x) the 70th day prior to such meeting and (y) the
10th day after public announcement of the date of such meeting is
first made.
Under the Stockholder Notice Procedure, a stockholder's
notice to the Company proposing to nominate a person for election
as a director must contain certain information, including,
without limitation, the identity and address of the nominating
stockholder, the class and number of shares of stock of the
Company which are owned by such stockholder, and all information
regarding the proposed nominee that would be required to be
included in a proxy statement soliciting proxies for the proposed
nominee. Under the Stockholder Notice Procedure, a stockholder's
notice relating to the conduct of business other than the
nomination of directors must contain certain information about
such business and about the proposing stockholder, including,
without limitation, a brief description of the business the
stockholder proposes to bring before the meeting, the reasons for
conducting such business at such meeting, the name and address of
such stockholder, the class and number of shares of stock of the
Company beneficially owned by such stockholder, and any material
interest of such stockholder in the business so proposed. If the
Chairman of the Board or other officer presiding at a meeting
determines that a person was not nominated, or other business was
not brought before the meeting, in accordance with the
Stockholder Notice Procedure, such person will not be eligible
for election as a director, or such business will not be
conducted at such meeting, as the case may be.
By requiring advance notice of nominations by stockholders,
the Stockholder Notice Procedure will afford the Board of
Directors an opportunity to consider the qualifications of the
proposed nominees and, to the extent deemed necessary or
desirable by the Board of Directors, to inform stockholders about
such qualifications. By requiring advance notice of proposed
business, the Stockholder Notice Procedure will also provide a
more orderly procedure for conducting annual meetings of
stockholders and, to the extent deemed necessary or desirable by
the Board of Directors, will provide the Board of Directors with
an opportunity to inform stockholders, prior to such meetings, of
any business proposed to be conducted at such meetings, together
with any recommendations as to the Board's position regarding
action to be taken with respect to such business, so that
stockholders can better decide whether to attend such a meeting
or to grant a proxy regarding the disposition of such business.
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Although the Bylaws do not give the Board of Directors any
power to approve or disapprove stockholder nominations for the
election of directors or proposals for action, they have the
effect of precluding a contest for the election of directors or
the consideration of stockholder proposals if the procedures are
not followed, and of discouraging or deterring a third party from
conducting a solicitation of proxies to elect its own slate of
directors or to approve its own proposal, without regard to
whether consideration of such nominees or proposals might be
harmful or beneficial to the Company and its stockholders.
Business Combinations. The Restated Certificate of
Incorporation of the Company requires that certain Business
Combinations (as defined therein) with Interested Stockholders
(as defined below) or affiliates thereof be approved by the
affirmative vote of the holders of at least 75% of the Voting
Stock of the Company, voting together as a single class. Such
affirmative vote is required notwithstanding the fact that no
vote may be required, or that a lesser percentage may be
specified, by law or in any agreement with or rule of any
national securities exchange or otherwise. The requirement that a
Business Combination with an Interested Stockholder be approved
by the affirmative vote of 75% of the voting power of the
outstanding Voting Stock does not apply if either (i) the
Business Combination has been approved by a majority of the
Continuing Directors (as defined below), or (ii) certain price
and procedure requirements designated to ensure that the
Company's stockholders receive a "fair price" for their Common
Stock are satisfied. An "Interested Stockholder" is any person
(other than the Company or any subsidiary of the Company) who or
which: (i) is the beneficial owner, directly or indirectly, of 5%
or more of the voting power of the outstanding Voting Stock; (ii)
is an affiliate of the Company and at any time within the
two-year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of 5% or more of the
voting power of the then outstanding Voting Stock; or (iii) is an
assignee of or has otherwise succeeded to any shares of Voting
Stock which were at any time within the two-year period
immediately prior to the date in question beneficially owned by
any Interested Stockholder, if such assignment or succession
shall have occurred in the course of a transaction or series of
transactions not involving a public offering within the meaning
of the Securities Act. A "Continuing Director" is any member of
the Board of Directors who was unaffiliated with the Interested
Stockholder and was a member of the Board of Directors prior to
the time that the Interested Stockholder became an Interested
Stockholder, and any successor director who is unaffiliated with
the Interested Stockholder and is recommended or elected to
succeed a Continuing Director by a majority of Continuing
Directors then on the Board of Directors.
Liability of Directors; Indemnification. The Restated
Certificate of Incorporation of the Company provides that a
director will not be personally liable for monetary damages to
the Company or its stockholders for breach of fiduciary duty as a
director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for
paying a dividend or approving a stock repurchase in violation of
Section 174 of the Delaware Law, or (iv) for any transaction from
which the director derived an improper personal benefit. The
Restated Certificate of Incorporation also provides that each
person who is or was or had agreed to become a director or
officer of the Company, or each such person who is or was serving
or had agreed to serve at the request of the Board of Directors
as an employee or agent of the Company or as director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise (including the heirs,
executors, administrators or estate of such person), will be
indemnified by the Company, in accordance with the Bylaws, to the
full extent permitted by the Delaware Law, as the same exists or
may in the future be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the
Company to provide broader indemnification rights than said law
permitted the Company to provide prior to such amendment). The
Restated Certificate of Incorporation of the Company also
specifically authorizes the Company to enter into agreements with
any person providing for indemnification greater or different
than that provided by the Restated Certificate of Incorporation.
Amendments. The Restated Certificate of Incorporation and
Bylaws of the Company state that any amendment to certain
provisions, including those provisions discussed above, be
approved by the holders of at least 80% of the Voting Stock. This
requirement will prevent a stockholder with only a majority of
the Common Stock from avoiding the requirements of the provisions
discussed above by simply repealing such provisions. The Restated
Certificate of Incorporation further provides that the Bylaws may
be amended by the Board of Directors.
Rights to Purchase Certain Preferred Shares
Each share of Common Stock issued and outstanding, or to be
issued and outstanding, includes, or upon issuance will include,
an attached "Right." Each Right entitles the registered holder to
purchase from the Company one
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one-hundredth of a share of the Company's Cumulative
Participating Junior Preferred Stock, par value $0.01 per share
(the "Junior Preferred Shares"), at a price of $150 per one
one-hundredth of a share (the "Purchase Price"), subject to
adjustment. The Company has initially authorized and reserved
1,000,000 shares of Junior Preferred Shares for issuance upon
exercise of the Rights. Because of the nature of the Junior
Preferred Shares' dividend and liquidation rights, the value of
the one one-hundredth interest in a Junior Preferred Shares
purchasable upon exercise of each Right should approximate the
value of one share of Common Stock. Initially, the Rights are not
exercisable and trade automatically with the Common Stock. The
Rights generally become exercisable, however, and separate
certificates representing the Rights will be distributed, if any
person or group acquires 15 percent or more of the Company's
outstanding Common Stock or a tender offer or exchange offer is
announced for the Company's Common Stock. The Rights expire on
November 29, 2005, unless earlier redeemed by the Company at
$0.01 per Right prior to the time any person or group acquires 15
percent of the outstanding Common Stock. Until the Rights become
exercisable, the Rights have no dilutive effect on earnings per
share. Prior to exercise, a Right will not create any rights in
the holder thereof as a stockholder of the Company, including,
without limitation, the right to vote or receive dividends.
The Rights will have certain antitakeover effects. The
Rights will cause substantial dilution to a person or group that
attempts to acquire the Company on terms not approved by the
Board of Directors, except pursuant to an offer conditioned on a
substantial number of Rights being acquired. The Rights should
not interfere with any merger or other business combination
approved by the Board of Directors, since the Rights may be
redeemed by the Company for $0.01 per Right prior to the time
that a person or group acquires 15 percent of the outstanding
Common Stock.
The foregoing summary description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Form 8-A of the Company filed on November 16,
1995, which is incorporated herein by reference, and the
Certificate of Designations for the Junior Preferred Shares.
Dividend Reinvestment Plan
In January 1996, the Company implemented a dividend
reinvestment and stock purchase plan (the "DRIP"). The DRIP
provides stockholders with the opportunity to purchase additional
shares of the Company's Common Stock by reinvesting all or a
portion of their dividends on shares of Common Stock. The DRIP
also provides existing stockholders with the option to make cash
investments monthly (subject to a minimum monthly limit of $50
and a maximum monthly limit of $5,000). Optional cash investments
in excess of $5,000 may be made with the permission of the
Company at a discount which will be from 0% to 3%. The Company
uses proceeds from the DRIP for general corporate purposes.
Transfer Agent
The transfer agent and registrar for the Common Stock is
First Chicago Trust Company of New York.
SELLING SHAREHOLDERS
Until the Acquisition of Summit by the Company, the Selling
Shareholders held all the outstanding capital stock and warrants
of Summit (collectively, the "Summit Stock"). On July 31, 1998,
the Company effected the Acquisition by way of a merger (the
"Merger") of S-Acquisition Corp., a Texas corporation and a
wholly-owned subsidiary of the Company, with and into Summit.
Summit was the surviving corporation of the Merger and is
currently being operated as a wholly-owned subsidiary of the
Company. The Company issued the Shares to the Selling
Shareholders as part of the Acquisition consideration pursuant to
the Agreement and Plan of Merger, dated as of July 13, 1998,
among the Company, Summit, S-Acquisition Corp. and the Selling
Shareholders (the "Merger Agreement"). The Shares were issued in
exchange for the outstanding capital stock and warrants of Summit
on the terms set forth in the Merger Agreement. Reference is
hereby made to the Merger Agreement, a copy of which has been
filed with the Commission as an exhibit to the Registration
Statement and is available as described under "Available
Information." Pursuant to the Merger Agreement, the Shares were
issued at an implied price per share of approximately $112.46,
the average closing price of a share of Common Stock as reported
on the New York Stock Exchange Composite Transaction Tape over
the five consecutive trading days ending on July 30, 1998. All
shares of Common Stock which the Selling Shareholders received as
consideration in connection with the Merger are registered for
offer and sale hereunder.
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The following table provides the name of each Selling
Shareholder and the number of Shares held by each Selling
Shareholder as of the date hereof. Some or all of the Shares held
by a Selling Shareholder may be offered for sale from time to
time pursuant to this Prospectus.
No. of Shares Held by
Selling Shareholder Selling Shareholder
- ------------------- -------------------
David R. Lawson 37,940
G. Fulton Collins, III Management Trust 11,693
Suzanne McCabe Collins, Jr.
1990 Qualified Subchapter S Trust 37,906
Catherine Elizabeth Collins
1990 Qualified Subchapter S Trust 37,906
George Fulton Collins, IV
1990 Qualified Subchapter S Trust 16,862
George Fulton Collins, IV 1997 Trust 79,008
Suzanne McCabe Collins, Jr. 1994 Trust 57,964
Catherine Elizabeth Collins 1994 Trust 57,964
Capital Resource Lenders III, L.P. 62,168
The Lincoln National Life Insurance
Company 33,242
Lincoln National Income Fund, L.P. 1,843
J.P. Morgan Capital Corporation 39,835
Sixty Wall Street Fund, L.P. 2,096
-------
Total 476,427
From May 1995 until the consummation of the Merger, David
R. Lawson and certain trusts (the "Collins Trusts") established
for the benefit of G. Fulton Collins IV, Suzanne M. Collins, Jr.
and Catherine Elizabeth Collins, the children of Suzanne M.
Collins and G. Fulton Collins III, owned all the outstanding
capital stock of Summit. Specifically, Mr. Lawson owned 562,500
shares of the common stock, $0.01 par value per share (the
"Summit Common Stock"), of Summit, and the Collins Trusts owned
4,437,500 shares of Summit Common Stock. On July 31, 1998, all
the outstanding shares of Summit Common Stock were converted into
Common Stock pursuant to the Merger Agreement. G. Fulton Collins
III served as a member of the Board of Directors of Summit from
December 15, 1994 until July 31, 1998. G. Fulton Collins IV has
served as President and Chief Operating Officer of Summit since
May 21, 1998. Following consummation of the Merger, pursuant to
an employment agreement between G. Fulton Collins IV and Summit,
G. Fulton Collins IV continues to serve as President and Chief
Operating Officer of Summit. In addition to Shares listed above,
on July 31, 1998, pursuant to such employment agreement, G.
Fulton Collins IV was granted options to purchase 8,000 shares of
Common Stock at a price of $115.57 per share. In addition, in
connection with the Merger, G. Fulton Collins IV's existing
options to purchase Summit Common Stock were converted into
options to purchase 2,067 shares of Common Stock at a price
$22.49 per share pursuant to the Merger Agreement. The shares of
Common Stock underlying such options are not registered for offer
or sale hereunder. From February 1995 until the consummation of
the Merger, David R. Lawson served as Chief Executive Officer of
Summit and a member of the Board of Directors of Summit.
Following consummation of the Merger, pursuant to an employment
agreement between Mr. Lawson and Summit, Mr.
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Lawson continues to serve as Chief Executive Officer of Summit
and is a member of the Board of Directors of Summit. In addition
to the Shares listed above, on July 31, 1998, pursuant to such
employment agreement, Mr. Lawson was granted options to purchase
16,000 shares of Common Stock at a price of $115.57 per share.
The shares of Common Stock underlying such options are not
registered for offer or sale hereunder.
Pursuant to the Merger Agreement, concurrently with the
consummation of the Merger, the Company paid $12,631,377 in full
satisfaction of a debenture, dated as of April 9, 1998 (the
"Collins Debenture"), evidencing indebtedness of Summit to
Collins Investments, Inc., an Oklahoma corporation. All of the
outstanding capital stock of Collins Investments, Inc. is owned
by G. Fulton Collins III.
Prior to the consummation of the Merger, Capital Resource
Lenders III, L.P. ("CRL"), The Lincoln National Life Insurance
Company ("Life"), Lincoln National Income Fund, L.P. ("Income"),
J.P. Morgan Capital Corporation ("Morgan Capital") and Sixty Wall
Street Fund, L.P. ("Wall Street," and collectively, the
"Lenders") held $42,000,000 in aggregate principal amount of
Summit's Senior Subordinated Notes (the "Notes") and exercisable
warrants (the "Exercisable Warrants") to purchase a total of
2,146,971 shares of Summit Common Stock at a price of $0.01 per
share. Pursuant to the Merger Agreement, concurrently with the
consummation of the Merger, the Company paid approximately
$49,973,611 in full satisfaction of the Notes ($17,167,056 to
CRL, $9,594,722 to Life, $505,167 to Income, $14,372,708 to
Morgan Capital and $756,458 to Wall Street), and the Exercisable
Warrants were converted into shares of Common Stock on the terms
set forth in the Merger Agreement all of which shares are
registered hereunder. Certain warrants to purchase Summit Common
Stock held by the Lenders which were not exercisable at the time
of the Merger were canceled in connection with the Merger and no
consideration was paid in respect thereof. Mr. Stephen Jenks, an
Investment Partner of CRL, served as a member of the Board of
Directors of Summit from April 1997 until July 31, 1998. Mr.
Meryl D. Hartzband, a Managing Director of Morgan Capital and
Wall Street, served as a member of the Board of Directors of
Summit from April 1998 until July 31, 1998. Affiliates of Morgan
Capital and Wall Street from time to time have rendered
investment banking services to the Company and Summit for which
they received customary fees.
In connection with the Merger, Capital One Services, Inc.,
a wholly-owned subsidiary of the Company ("Services"), acquired
all the outstanding capital stock of SAC Receivables Investment
Corp., a Delaware corporation ("Receivables"), from Mr. Lawson
and the Collins Trusts. Receivables held notes of Mr. Lawson and
the Collins Trusts with an aggregate outstanding principal amount
of $400,000. In connection with its acquisition of Receivables,
Services assumed all obligations of Mr. Lawson and the Collins
Trusts under such notes.
Each Selling Shareholder has represented to the Company
that any Shares which it has received or may receive in
connection with the Acquisition have been or will be acquired for
its own account for the purpose of investment and not for resale
or distribution, and that any offer, transfer, sale, pledge or
other disposition of such Selling Shareholder's Shares will be
conducted in compliance with the Securities Act and the rules and
regulations promulgated thereunder. Based on certain other
representations made by the Selling Shareholders to the Company,
the Company reasonably believes that each Selling Shareholder is
an "accredited investor" as defined in Rule 501 under the
Securities Act. Although the Shares have been or will be acquired
by the Selling Shareholders for investment purposes, the Company
recognizes that the Selling Shareholders may wish to be legally
permitted to sell the Shares when they deem appropriate.
Accordingly, in connection with the Acquisition, the Selling
Shareholders and the Company entered into the Registration Rights
Agreement, pursuant to which the Company agreed to file and
maintain the effectiveness of the Registration Statement, of
which this Prospectus forms a part. See "Plan of Distribution."
Reference is hereby made to the Registration Rights Agreement, a
copy of which has been filed with the Commission as an exhibit to
the Registration Statement and is available as described under
"Available Information."
Assuming all the Shares offered hereby are sold, no Selling
Shareholder will hold any securities of the Company after the
completion of this offering other than those securities which a
Selling Shareholder may acquire as an employee of the Company
pursuant to the Company's standard employee benefit plans or
pursuant to options granted such employee by the Company or which
a Selling Shareholder may acquire or have previously acquired
from third parties through independent, privately negotiated
transactions. However, no assurance can be given that any of the
Selling Shareholders will sell any or all of the Shares. Under
certain circumstances, in connection with a transfer of Shares, a
Selling Shareholder may assign its rights under the Registration
Rights Agreement to sell Shares hereunder.
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<PAGE>
PLAN OF DISTRIBUTION
The Selling Shareholders (or, subject to certain
conditions, their transferees, donees, pledgees or successors)
may offer and sell all or a portion of the Shares from time to
time directly to one or more purchasers, including pledgees, or
through broker/dealers or other agents. The offer and sale of the
Shares by the Selling Shareholders from time to time may be made
at fixed prices, at market prices prevailing at the time of sale,
at prices relating to such prevailing market prices, at varying
prices determined at the time of sale or at negotiated prices,
and may be effected in one or more transactions (which may
involves crosses or block transactions) (i) on any national
securities exchange or quotation service on which the Shares may
be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in privately negotiated
transactions otherwise than on such exchanges or in the
over-the-counter market, (iv) through the writing of options or
through hedging transactions, or (v) by any other legally
available means. Shares which qualify for sale pursuant to Rule
144 of the Securities Act or any other exemption may be sold
under Rule 144 or another exemption rather than pursuant to this
Prospectus. The aggregate net proceeds received by the Selling
Shareholders from the sale of the Shares will be the purchase
price of such Shares less any commissions, fees or other
expenses.
Any broker/dealer or agent may act on behalf of one or more
of the Selling Shareholders in connection with the offering of
the Shares for sale by the Selling Shareholders. Any such
brokers/dealers or agents may receive compensation in the form of
concessions or commissions from the Selling Shareholders and/or
the purchasers of the Shares for whom they may act as agents and
such compensation in any given case may be in excess of customary
compensation. The Selling Shareholders and any broker/dealers or
agents that participate in the distribution of Shares may be
deemed to be "underwriters" within the meaning of the Securities
Act, and any profit on the sale of such securities and any
commissions, concessions or other compensation received by any
such underwriter, broker/dealer or agent may be deemed to be
underwriting discounts and commissions under the Securities Act.
A Selling Shareholder may transfer, devise or gift his, her
or its Shares by other means not described herein and no
assurance can be given that any of the Selling Shareholders will
sell any or all of the Shares. Under certain circumstances, in
connection with a transfer of Shares, a Selling Shareholder may
assign its rights under the Registration Rights Agreement to sell
Shares hereunder. The Company knows of no existing arrangements
between any Selling Shareholder and any other Selling
Shareholder, underwriter, broker/dealer or other agent relating
to the sale or distribution of the Shares. No underwriter,
broker/dealer or agent has been engaged by the Company in
connection with the distribution of the Shares.
The Company has agreed under the Registration Rights
Agreement to pay all expenses related to the registration of the
Shares by the Company including (i) all registration and filing
fees, and any other fees and expenses associated with filings
required to be made with the Commission, (ii) all fees and
expenses of compliance with state securities or "Blue Sky" laws,
(iii) all printing expenses incurred by the Company in connection
with the Registration Statement and this Prospectus, (iv) all
fees and disbursements of counsel for the Company and the
independent certified public accountants of the Company, and (v)
all fees and expenses incurred in connection with the listing of
the Shares on the New York Stock Exchange. The Selling
Shareholders will bear all selling commissions, transfer taxes
and fees and expenses of any counsel, accountants and other
representatives and agents retained by the Selling Shareholders
in connection with the registration and sale of the Shares. The
Company has also agreed to prepare and file such amendments and
supplements to the Registration Statement as may be necessary to
keep the Registration Statement effective until the earlier of
July 31, 1999 and the date on which all Shares covered by the
Registration Statement have been sold thereunder. The Company and
each Selling Shareholder have agreed pursuant to the Registration
Rights Agreement to indemnify each other against certain civil
liabilities, including certain liabilities under the Securities
Act, or will be entitled to contribution in connection therewith.
Reference is hereby made to the Registration Rights Agreement, a
copy of which has been filed with the Commission as an exhibit to
the Registration Statement and is available as described under
"Available Information."
Under applicable rules and regulation under the Exchange
Act, any person engaged in a distribution of any of the Shares
may not, subject to certain exceptions, simultaneously engage in
certain market activities with respect to the Common Stock for
the applicable period under Regulation M of the Exchange Act
prior to the commencement of such distribution. In addition, and
without limiting the foregoing, the Selling Shareholders will be
subject to applicable provisions of the Exchange Act and the
rules and regulations thereunder, including without limitation
Regulation M, which provisions may limit the timing of purchases
and sales of any of the Shares by the Selling Shareholders. All
of the foregoing may affect the marketability of the Common
Stock.
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To comply with the securities laws of certain
jurisdictions, if applicable, the Shares will be offered or sold
in such jurisdictions only through registered or licensed
broker/dealers. In addition, in certain jurisdictions the Shares
may not be offered or sold unless they have been registered or
qualified for sale in such jurisdictions or an exemption from
registration or qualification is available and is complied with.
LEGAL MATTERS
The validity of the Shares will be passed upon for the
Company by John G. Finneran, Jr., Esq., Senior Vice President,
General Counsel and Corporate Secretary of the Company. Mr.
Finneran owns approximately 2,674 shares of Common Stock of the
Company and holds options to purchase 178,704 shares of Common
Stock issued under the Company's 1994 Stock Incentive Plan.
EXPERTS
The consolidated financial statements of Capital One
Financial Corporation incorporated by reference in the Annual
Report [Form 10-K] for the year ended December 31, 1997, have
been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon incorporated by reference therein
and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in
accounting and auditing.
---------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS
AND ANY ACCOMPANYING PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE
OFFERING DESCRIBED HEREIN AND THEREIN, AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THIS PROSPECTUS
NOR ANY PROSPECTUS SUPPLEMENT SHALL CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OFFERED
HEREUNDER IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OR SALE IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER IMPLIES THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY AT ANY
TIME SUBSEQUENT TO THE DATE HEREOF.
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