<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 13, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
CAPITAL ONE FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 54-1719854
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2980 FAIRVIEW PARK DRIVE
FALLS CHURCH, VIRGINIA 22042-4525
(703) 205-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
JOHN G. FINNERAN, JR.
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND CORPORATE SECRETARY
CAPITAL ONE FINANCIAL CORPORATION
2980 FAIRVIEW PARK DRIVE
FALLS CHURCH, VIRGINIA 22042-4525
(703) 205-1000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time after the effective date of this registration statement, as
determined in light of market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
--------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE(2) FEE
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities..........
Preferred Stock..........
Depositary Shares
Representing Preferred
Stock(3)................
Common Stock.............
Total.................. $925,000,000(4) 100% $925,000,000 $257,150
</TABLE>
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(1) The amount to be registered is not specified as to each class of
securities to be registered pursuant to General Instruction II.D of Form
S-3. Securities registered hereby may be offered for U.S. dollars or the
equivalent thereof in other currencies, including composite currencies, on
the basis of exchange rates on the date an agreement to issue and sell the
applicable Debt Securities is entered into.
(2) Estimated solely for the purpose of computing the registration fee.
(3) Such indeterminate number of Depositary Shares to be evidenced by
Depositary Receipts issued pursuant to a Deposit Agreement. In the event
the Registrant elects to offer to the public fractional interests in
shares of the Preferred Stock registered hereunder, Depositary Receipts
will be distributed to those persons purchasing such fractional interests
and the shares of Preferred Stock will be issued to the Depositary under
the Deposit Agreement. No separate consideration will be received for the
Depositary Shares.
(4) Such amount represents the principal amount of any Debt Securities issued
at their principal amount, the issue price rather than the principal
amount of any Debt Securities issued at an original issue discount, the
liquidation preference of any Preferred Stock, and the initial offering
price of any Common Stock.
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<PAGE>
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS
INCLUDED HEREIN IS A COMBINED PROSPECTUS WHICH ALSO RELATES TO UP TO
$75,000,000 OF UNISSUED DEBT SECURITIES, PREFERRED STOCK, DEPOSITARY SHARES
REPRESENTING PREFERRED STOCK AND COMMON STOCK REGISTERED UNDER REGISTRATION
STATEMENT NO. 333-58577, FOR WHICH THE REQUIRED FILING FEES HAVE BEEN PAID.
THIS REGISTRATION STATEMENT, WHICH IS A NEW REGISTRATION STATEMENT, ALSO
CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 333-
58577, AND SUCH POST-EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE
CONCURRENTLY WITH THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT IN
ACCORDANCE WITH SECTION 8(C) OF THE SECURITIES ACT OF 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus is not complete and may be +
+changed. We may not sell these securities until the registration statement +
+filed with the Securities and Exchange Commission is effective. This +
+preliminary prospectus is not an offer to sell these securities and it is not +
+soliciting an offer to buy these securities in any jurisdiction where the +
+offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED AUGUST 13, 1999
PROSPECTUS
Capital One Financial Corporation
2980 Fairview Park Drive
Suite 1300
Falls Church, Virginia 22042-4525
(703) 205-1000
$1,000,000,000
Debt Securities
Preferred Stock
Common Stock
- --------------------------------------------------------------------------------
We will provide specific terms of these securities in supplements to this
prospectus.
You should read this prospectus and any supplement before you invest.
- --------------------------------------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
This prospectus is dated August 13, 1999
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that Capital One has
filed with the Securities and Exchange Commission utilizing a "shelf"
registration process. Under this shelf process, Capital One may from time to
time sell any combination of the securities described in this prospectus in one
or more offerings up to a total dollar amount of $1,000,000,000. This
prospectus provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and the prospectus
supplement applicable to any offering, together with the additional information
described under the heading "Where To Find More Information."
In this prospectus, the terms "Capital One," "we," "us" and "our" refer to
Capital One Financial Corporation.
WHERE TO FIND MORE INFORMATION
Capital One files annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. Our SEC filings
are available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. For further information on the public reference rooms,
please call the SEC at 1-800-SEC-0330.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
them, which means we can disclose important information to you by referring you
to those documents. The information incorporated by reference is an important
part of this prospectus. Any information that we file with the SEC after this
prospectus will automatically update and supercede the information in this
prospectus. We incorporate by reference our documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 until we sell all of the securities
described in this prospectus.
. Annual Report on Form 10-K for the year ended December 31, 1998;
. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999
and June 30, 1999;
. Current Reports on Form 8-K dated January 19, 1999, April 15, 1999,
April 30, 1999, May 5, 1999, and July 15, 1999; and
. The descriptions of Capital One's common stock and preferred stock
purchase rights, which are contained in Forms 8-A filed on August 24,
1994 and November 16, 1995.
2
<PAGE>
You may request a copy of these filings at no cost by writing or telephoning
the following address:
Capital One Financial Corporation
Suite 1300
2980 Fairview Park Drive
Falls Church, Virginia 22042-4525
Attention: Corporate Secretary
(703) 205-1000
You should rely only on the information incorporated by reference or provided
in this prospectus or any prospectus supplement. We have not authorized anyone
else to provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any prospectus supplement is
accurate as of any date other than the date on the front of those documents.
CAPITAL ONE
Capital One Financial Corporation is a holding company incorporated in
Delaware on July 21, 1994. Its subsidiaries provide a variety of products and
services to consumers using Capital One's proprietary information-based
strategy, which is described in more detail below. Our common stock is listed
on the New York Stock Exchange under the symbol COF and is included in the
Standard and Poor's 500 Index. Our principal executive office is located at
2980 Fairview Park Drive, Suite 1300, Falls Church, Virginia 22042-4525, and
our telephone number is (703) 205-1000.
Capital One's predecessor began its operations in 1953, which is the same
year as the formation of what is now MasterCard International. We are one of
the largest providers of MasterCard and Visa/1/ branded credit cards in the
world and are one of the oldest continually operating bankcard issuers in the
United States. Capital One's historic growth in managed consumer loans and
credit card accounts is due largely to the dynamics of the credit card industry
and the success of our proprietary information-based strategy, which we
launched in 1988. As of June 30, 1999, Capital One had reported total assets of
$10.6 billion and total liabilities of $9.1 billion.
Capital One operates in three business segments: lending, telecommunications
and other non-lending new business initiatives.
CAPITAL ONE BANK
Capital One's principal subsidiary is Capital One Bank, which we call "the
Bank." The Bank is a limited purpose Virginia state chartered bank that offers
credit card products.
- --------
/1/MasterCard and Visa are registered trademarks of MasterCard International
Incorporated and VISA USA, Inc., respectively.
3
<PAGE>
Capital One's principal asset is its equity interest in the Bank. As of June
30, 1999, the Bank's business constituted approximately 83% of the managed
assets of Capital One. The Bank offers a variety of credit card products,
including:
. Visa and MasterCard brands;
. Platinum and other premium label cards;
. Secured and unsecured standard product cards; and
. International offerings, with an initial focus on the United Kingdom.
CAPITAL ONE, F.S.B.
Capital One also has a subsidiary that is a federally chartered savings bank,
Capital One F.S.B., which we call "the Savings Bank." The Savings Bank was
established in June 1996 to offer consumer lending products, including credit
cards, and deposits. The Savings Bank offers, and expects to continue to offer,
multiple financial products and services by using Capital One's information-
based strategy and information technology systems.
CAPITAL ONE'S INFORMATION-BASED STRATEGY
Capital One's information-based strategy allows it to differentiate among
customers based on their credit risk, credit card usage and other
characteristics. This information-based strategy involves:
. developing sophisticated credit models;
. enhancing state of the art information systems;
. recruiting and retaining well-trained personnel to create a flexible
working culture; and
. segmenting potential customer lists based on credit scores,
demographics, customer behavioral characteristics and other criteria.
Capital One uses this strategy to customize products and solicitations for
targeted customer segments. This leads to greater customer response levels and
increased revenues within our risk models.
Capital One applies its information-based strategy to all areas of its
business, including solicitations, account management, credit line management,
pricing strategies, usage stimulation, collections, recoveries, and account and
balance retention. Credit card opportunities include, and are expected to
continue to include, a wide variety of highly customized products with interest
rates, credit lines and other features specifically tailored for numerous
customer segments. We have also expanded our information-based strategies
beyond our credit card business to other financial and non-financial businesses
in order to identify new product opportunities and to make informed investment
decisions regarding our existing products. These products and services include
selected non-credit card consumer lending products, such as automobile
financing and telecommunication services.
4
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the securities will be used for general
corporate purposes, including the reduction of short-term debt, possible
acquisitions, investments in Capital One's subsidiaries, investments in
securities and the possible acquisition of real property for use in our
business.
FINANCIAL RATIOS
Capital One's consolidated ratio of earnings to fixed charges and ratio of
earnings to combined fixed charges and preferred stock dividend requirements
are as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED
JUNE 30, DECEMBER 31,
----------- ------------------------
1999 1998 1998 1997 1996 1995 1994
----- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges:
Including Interest on Deposits......... 2.07 2.07 2.04 1.89 1.83 1.78 2.55
Excluding Interest on Deposits......... 2.33 2.24 2.24 2.01 2.02 1.97 2.59
Earnings to Combined Fixed Charges and
Preferred Stock Dividends:
Including Interest on Deposits......... 2.05 2.05 2.02 1.87 1.83 1.78 2.55
Excluding Interest on Deposits......... 2.31 2.22 2.21 1.99 2.02 1.97 2.59
</TABLE>
The ratio of earnings to fixed charges is computed by dividing (i) income
before income taxes and fixed charges less interest capitalized during the
period, net of amortization of previously capitalized interest, by (ii) fixed
charges. The ratio of earnings to combined fixed charges and preferred stock
dividend requirements is computed by dividing (i) income before income taxes
and fixed charges less interest capitalized during the period, net of
amortization of previously capitalized interest, by (ii) fixed charges and
preferred stock dividend requirements. Fixed charges consist of interest
expense on borrowings, including capitalized interest (including or excluding
deposits, as the case may be) and the portion of rental expense which is deemed
representative of interest. The preferred stock dividend requirements represent
the dividend requirements on the Bank's preferred beneficial interest in
capital income securities. Capital One and its subsidiaries did not have any
preferred stock dividend requirements outstanding during the periods prior to
1997 presented above and, therefore, there were no preferred stock dividend
requirements during those periods.
SUPERVISION, REGULATION AND OTHER MATTERS
The following discussion describes some of the elements of the comprehensive
regulatory framework applicable to Capital One and its subsidiaries.
GENERAL
Capital One Bank is a limited purpose banking corporation chartered under
Virginia law and a member of the Federal Reserve System. The Bank's deposits
are insured by the Bank Insurance Fund, the "BIF," of the Federal Deposit
Insurance Corporation. The Bank is
5
<PAGE>
subject to comprehensive regulation and periodic examination by the Bureau of
Financial Institutions of the Virginia State Corporation Commission, the
Federal Reserve Board and the FDIC. Capital One, however, is not a bank holding
company under the Bank Holding Company Act of 1956 as a result of our ownership
of the Bank because the Bank is not a "bank" as defined under the BHCA. It is
not a "bank" under the BHCA because it:
. engages only in credit card operations;
. does not accept demand deposits or deposits that the depositor may
withdraw by check or similar means for payment to third parties or
others;
. does not accept any savings or time deposits of less than $100,000
other than as permitted as collateral for extensions of credit;
. maintains only one office that accepts deposits; and
. does not engage in the business of making commercial loans.
If the Bank failed to meet these criteria, the Bank's status as an insured
depository institution would make Capital One subject to regulation under the
BHCA, including business activity restrictions. For example, becoming a bank
holding company under the BHCA would limit our ability to enter into businesses
outside of banking. In addition, if the Bank failed to qualify for the credit
card bank exemption, any entity that acquired direct or indirect control of
Capital One could be required to either discontinue any impermissible non-
financial activities or divest itself of control of Capital One.
The Savings Bank is a federal savings bank chartered by the Office of Thrift
Supervision and is a member of the Federal Home Loan Bank System. Its deposits
are insured by the Savings Association Insurance Fund of the FDIC. Under recent
legislation recapitalizing the SAIF, insurance premiums currently paid by SAIF-
insured institutions are now equivalent to the rate paid by BIF-insured
institutions. The Savings Bank is subject to comprehensive regulation and
periodic examination by the OTS and the FDIC. As a result of our ownership of a
single savings association, the Savings Bank, we are a unitary savings and loan
holding company subject to regulation by the OTS and the provisions of the
Savings and Loan Holding Company Act. As a unitary savings and loan holding
company, we generally are not subject to business activity restrictions as long
as the Savings Bank continues to meet the qualified thrift lender test. See "--
Investment Limitations and Qualified Thrift Lender Test" below. If we cease to
be a unitary savings and loan holding company by either acquiring an additional
savings institution or because the Savings Bank failed to meet the qualified
thrift lender test, the types of activities that we and our non-savings
association subsidiaries would be able to engage in would generally be limited
to those eligible for bank holding companies.
We are also registered as a financial institution holding company under
Virginia law and are subject to periodic examination by the Bureau of Financial
Institutions.
The following sections describe in greater detail some regulations that
currently affect our business. Additional legislation and governmental actions
of our regulators, including the Bureau of Financial Institutions, the Federal
Reserve Board, FDIC and the OTS, can from time to time also affect our
business.
6
<PAGE>
Dividends and Transfers of Funds
Capital One is a legal entity separate from its banking and other
subsidiaries. The primary source of cash for us to pay dividends on stock, make
payments on debt securities and meet other obligations, is dividends from the
Bank and the Savings Bank. There are various federal and Virginia law
limitations on the extent to which these two subsidiaries can finance or
otherwise supply funds to us and our affiliates through dividends, loans or
otherwise. These limitations include the following: minimum regulatory capital
requirements; Federal Reserve Board, OTS and Virginia law requirements
concerning the payment of dividends out of net profits or surplus; Sections 23A
and 23B of the Federal Reserve Act governing transactions between an insured
depository institution and its affiliates; and general federal and Virginia
regulatory oversight to prevent unsafe or unsound practices.
In general, federal banking laws do not allow an insured depository
institution, such as the Bank or the Savings Bank, to make dividend
distributions if the distributions are not paid out of available earnings or
would cause the institution to fail to meet applicable capital adequacy
standards. In addition, the Savings Bank must give the OTS at least 30 days
advance notice of any proposed dividend and the OTS, in its discretion, may
object to the dividend. Under OTS regulations, other limitations apply to the
Savings Bank's ability to pay dividends, such as requirements to maintain
adequate regulatory capital. In addition, under Virginia law, the Bureau of
Financial Institutions may limit the payment of dividends by the Bank if the
Bureau determines that this limitation would be in the public interest and
necessary for safety and soundness.
Capital Adequacy
The Bank and the Savings Bank are currently subject to capital adequacy
guidelines adopted by the Federal Reserve Board and the OTS. The most recent
notifications received from the regulators categorized the Bank and the Savings
Bank as "well-capitalized." We do not believe there have been any conditions or
events which have changed either the Bank or the Savings Bank's capital
category since those notifications.
During 1996, the Bank received regulatory approval and established a branch
office in the United Kingdom. In connection with this approval, the Company
committed to the Federal Reserve that, for so long as the Bank maintains a
branch in the United Kingdom, the Company will maintain a minimum Tier 1
leverage ratio of 3.0%.
FDICIA
FDICIA provides for expanded regulation of banks and savings banks. The
expanded regulation includes expanded federal banking agency examinations and
increased powers of federal banking agencies to take corrective action to
resolve the problems of insured depository institutions with capital
deficiencies. Those powers may vary depending on which of several levels of
capitalization a particular institution meets. FDICIA establishes five capital
tiers: well-capitalized, adequately capitalized, undercapitalized,
significantly undercapitalized and critically undercapitalized.
7
<PAGE>
An insured depository institution is considered to be well-capitalized if it
maintains a Tier 1 risk-based capital ratio (or core capital to risk-adjusted
assets in the case of the Savings Bank) of at least 6%, a total risk-based
capital ratio of at least 10% and a Tier 1 leverage capital ratio (or core
capital ratio in the case of the Savings Bank) of at least 5%, and is not
otherwise in a "troubled condition" as specified by its appropriate federal
regulatory agency. An insured depository institution is considered to be
adequately capitalized if it maintains a Tier 1 risk-based capital ratio (or
core capital to risk-adjusted assets in the case of the Savings Bank) of at
least 4%, total risk-based capital ratio of at least 8%, and a Tier 1 leverage
capital ratio (or core capital ratio in the case of the Savings Bank) of at
least 4% (3% for certain highly rated institutions), and does not otherwise
meet the well-capitalized definition. The three undercapitalized categories are
based upon the amount by which the insured depository institution falls below
the ratios applicable to adequately capitalized institutions. The capital
categories are determined solely for the purposes of applying FDICIA's prompt
corrective action provisions and the capital categories may not accurately
represent the overall financial condition or prospects of the Bank or the
Savings Bank.
At June 30, 1999, both the Bank and the Savings Bank met the requirements for
a "well-capitalized" institution. A "well-capitalized" classification should
not necessarily be viewed as describing the condition or future prospects of a
depository institution.
Under FDICIA's prompt corrective action system, an insured depository
institution in the undercapitalized category must submit a capital restoration
plan guaranteed by its parent company. The liability of the parent company
under this guarantee is limited to the lesser of 5% of the insured depository
institution's assets at the time it became undercapitalized, or the amount
needed to comply with the capital restoration plan. An insured depository
institution in the undercapitalized category is also subject to limitations in
numerous areas including, but not limited to, asset growth, acquisitions,
branching, new business lines, acceptance of brokered deposits and borrowings
from the Federal Reserve. Progressively more burdensome restrictions are
applied to insured depository institutions in the undercapitalized category
that fail to submit or implement a capital restoration plan and to insured
depository institutions that are in the significantly undercapitalized or
critically undercapitalized categories. In addition, an insured depository
institution's primary federal banking agency is authorized to downgrade the
institution's capital category to the next lower category upon a determination
that the institution is in an unsafe or unsound condition or is engaged in an
unsafe or unsound practice. An unsafe or unsound practice can include receipt
by the institution of a less than satisfactory rating on its most recent
examination with respect to its asset quality, management, earnings or
liquidity.
"Critically undercapitalized" insured depository institutions, which are
defined to include institutions that still have a positive net worth, generally
may not, beginning 60 days after becoming "critically undercapitalized," make
any payment of principal or interest on their subordinated debt. Thus, in the
event an institution became "critically undercapitalized," it would generally
be prohibited from making payments on its subordinated debt securities. In
addition, "critically undercapitalized" institutions are subject to appointment
of a receiver or conservator.
8
<PAGE>
FDICIA requires federal banking agencies to review the risk-based capital
standards to ensure that they adequately address interest-rate risk,
concentration of credit risk and risks from non-traditional activities. The OTS
amended its risk-based capital rules to incorporate interest-rate risk
requirements under which a savings bank must hold additional capital if it
projects an excessive decline in "net portfolio value" in the event interest
rates increase or decrease by two percentage points. These standards are not
yet in effect.
FDICIA also requires the FDIC to implement a system of risk-based premiums
for deposit insurance pursuant to which the premiums paid by a depository
institution will be based on the probability that the FDIC will incur a loss
due to that institution. The FDIC has since adopted a system that imposes
insurance premiums based upon a matrix that takes into account an institution's
capital level and supervisory rating.
The Bank and the Savings Bank may accept brokered deposits as part of their
funding. Under FDICIA, only "well capitalized" and "adequately capitalized"
institutions may accept brokered deposits. "Adequately capitalized"
institutions, however, must first obtain a waiver from the FDIC before
accepting brokered deposits. These deposits may not pay rates that
significantly exceed the rates paid on deposits of similar maturity from the
institution's normal market area or the national rate on deposits of comparable
maturity, as determined by the FDIC, for deposits from outside the
institution's normal market area.
LIABILITY FOR COMMONLY-CONTROLLED INSTITUTIONS
Under the "cross-guarantee" provision of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, insured depository institutions may be
liable to the FDIC for any loss or anticipated loss incurred by the FDIC
resulting from the default of, or FDIC assistance to, any commonly controlled
insured depository institution. The Bank and the Savings Bank are commonly
controlled within the meaning of the FIRREA cross-guarantee provision.
INVESTMENT LIMITATIONS AND QUALIFIED THRIFT LENDER TEST
As a federally chartered savings bank, the Savings Bank is subject to certain
investment limitations. For example, federal savings banks are permitted to
make consumer loans, such as open-end or closed-end loans for personal, family
or household purposes, such as installment loans, of up to 35% of the savings
bank's assets. Federal savings banks are also required to meet the Qualified
Thrift Lender Test, which generally requires a savings bank to maintain at
least 65% of its "portfolio assets" in certain "qualified thrift investments"
on a monthly basis in nine out of every 12 months. "Portfolio assets" are
defined as total assets less specified liquid assets up to 20% of total assets,
intangibles, including goodwill, and property used to conduct business.
"Qualified thrift investments" include residential mortgages and related
investments, including certain mortgage-backed and mortgage-related
investments, small business related securities, certain state and federal
housing investments, education loans and credit card loans. Failure to qualify
under the Qualified Thrift Lender Test could subject the Savings Bank to
substantial restrictions on its activities and to certain other penalties, and
could subject Capital One to the provisions of the BHCA, including the
9
<PAGE>
activity restrictions that apply generally to bank holding companies and their
affiliates. As of June 30, 1999, 86% of the Savings Bank's portfolio assets
were held in qualified thrift investments, and the Savings Bank was in
compliance with the Qualified Thrift Lender Test.
Lending Activities
The activities of the Bank and the Savings Bank as consumer lenders are also
subject to regulation under various federal laws, including the Truth-in-
Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act,
the Community Reinvestment Act and the Soldiers' and Sailors' Civil Relief Act,
as well as to various state laws. Regulators are authorized to impose penalties
for violations of these statutes and, in some cases, to order the Bank and the
Savings Bank to pay restitution to injured borrowers. Borrowers may also bring
actions for some violations. Federal and state bankruptcy and debtor relief
laws also affect the ability of the Bank and the Savings Bank to collect
outstanding balances owed by borrowers who seek relief under these statutes.
Year 2000
On October 15, 1998, the banking regulators jointly published the Interagency
Guidelines establishing Year 2000 Standards for Safety and Soundness. Among
other things, the standards list requirements and timetables for a review of
mission critical systems for year 2000 readiness, renovation of internal and
external mission critical systems, testing of mission critical systems,
business resumption contingency planning, remediation contingency planning,
customer risk assessment and involvement of the board of directors and
management. Capital One's year 2000 plan is subject to and in compliance with
these standards.
Legislation
Each of the U.S. Senate and House of Representatives have separately adopted
financial system reform legislation enabling greater affiliation amongst
financial services providers, including banks, securities firms and insurance
companies. Among other changes from current law, both bills contain
"grandfather" provisions enabling existing unitary savings and loan holding
companies, like Capital One, to continue to engage in non-financial activities
subject to existing restrictions. Both bills also contain restrictions on
transferring grandfathered status to an acquiror. It is unclear at this time
what form the final legislation, if any, will take and what its impact on
Capital One and our subsidiaries would be.
From time to time, legislation has been proposed in Congress to limit
interest rates and fees that could be charged on credit card accounts or
otherwise restrict the practices of credit card issuers. Various bills have
also been introduced that eliminate a separate savings bank charter, possibly
requiring that existing savings banks become banks. Legislation has also been
proposed to change existing federal bankruptcy laws. It is unclear at this time
whether and in what form any legislation will be adopted or, if adopted, what
its impact on Capital One and our subsidiaries would be. Congress may in the
future consider other legislation that would materially affect the banking or
credit card industries.
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INVESTMENT IN CAPITAL ONE
The acquisition of Capital One's, the Bank's or the Savings Bank's capital
stock may be subject to regulatory approval or notice under federal or Virginia
law. Investors are responsible for insuring that they do not, directly or
indirectly, acquire shares of our capital stock in excess of the amount which
can be acquired without regulatory approval.
The Bank and the Savings Bank are each "insured depository institutions"
within the meaning of the Change in Bank Control Act. Because of this, federal
law and regulations will prohibit any person or company from acquiring control
of Capital One without, in most cases, prior written approval of the Federal
Reserve Board and the OTS, as applicable. Control is conclusively presumed if,
among other things, a person or company acquires more than 25% of any class of
our voting stock. A rebuttable presumption of control arises if a person or
company acquires more than 10% of any class of voting stock and is subject to
any of a number of specified "control factors" as set forth in the applicable
regulations.
Although the Bank is not a "bank" within the meaning of Virginia's reciprocal
interstate banking legislation (Chapter 15 of Title 6.1 of the Code of
Virginia), it is a "bank" within the meaning of Virginia's Financial
Institution Holding Company Act, which governs the acquisition of interests in
Virginia financial institutions. The Financial Institution Holding Company Act
prohibits any person or entity from acquiring or making any public offer to
acquire control of a Virginia financial institution or its holding company
without making application to and receiving the prior approval of the Bureau of
Financial Institutions.
INTERSTATE TAXATION
Several states have passed legislation which attempts to tax the income from
interstate financial activities, including credit cards, derived from accounts
held by local state residents. Based on the volume of our business in these
states and the nature of the legislation passed to date, we currently believe
that this development will not materially affect us or our subsidiaries'
financial condition. Recently, a three-year moratorium has been considered on
new state and local taxes established to tax the Internet, interactive computer
services, or the use of those services. The moratorium, however, does not
prevent states from imposing taxes on or measured by net income derived from
the services, fairly apportioned business license taxes, and sales and use
taxes on interstate commerce that are consistent with taxes on mail order and
telephone transactions. We currently solicit accounts and take account
information via the Internet. It is unclear at this time, however, whether and
in what form any legislation will be adopted or, if adopted, what its impact on
us would be.
DESCRIPTION OF DEBT SECURITIES
Capital One may from time to time offer and sell debt securities which will
be our direct unsecured general obligations. These securities are described
below, and will be either senior debt securities or subordinated debt
securities, both of which are called "Debt Securities." The Debt Securities
will be issued under one or more separate indentures
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between Capital One and Harris Trust and Savings Bank, as Trustee, or the
Trustee named in the applicable prospectus supplement. Senior Debt Securities
will be issued under a "Senior Indenture" and subordinated Debt Securities will
be issued under a "Subordinated Indenture." Together, the Senior Indenture and
the Subordinated Indenture are called the "Indentures" and the Senior Trustee
and the Subordinated Trustee are called the "Trustees."
We have summarized selected provisions of the Indentures and the Debt
Securities below. The summary is not complete. Copies of the Senior Indenture
and the form of the Subordinated Indenture have been filed with the SEC as
exhibits to the registration statement of which this prospectus is a part. You
should read the Indentures for provisions that may be important to you. In the
summary below, we have included references to section numbers so that you can
easily locate these provisions. Unless the section references state otherwise,
these section numbers refer to both the Senior Indenture and the Subordinated
Indenture. Capitalized terms used in the summary have the meanings specified in
the Indentures. As of the date of this prospectus, the following notes have
been issued under the Senior Indenture:
. Notes with a maturity date of 2003, an aggregate principal amount of
$125,000,000 and an interest rate of 7 1/4%;
. Notes with a maturity date of 2006, an aggregate principal amount of
$225,000,000 and an interest rate of 7 1/4%; and
. Notes with a maturity date of 2008, an aggregate principal amount of
$200,000,000 and an interest rate of 7 1/8%.
Capital One has not issued any series of Debt Securities under the
Subordinated Indenture.
GENERAL
The Debt Securities will be Capital One's direct unsecured obligations. The
Indentures do not limit the amount of Debt Securities that may be issued and
further provide that Debt Securities may be issued from time to time in one or
more series. The senior Debt Securities will rank equally with all of our other
unsecured unsubordinated indebtedness. The subordinated Debt Securities will
have a junior position to all of our senior debt.
Capital One's right to participate as a stockholder in any distribution of
assets of any subsidiary upon its liquidation, reorganization or winding-up,
and thus the ability of holders of the Debt Securities to benefit, as creditors
of Capital One, from the distribution, is subject to the prior claims of
creditors of the subsidiary. The Bank and the Savings Bank are subject to
claims by creditors for long-term and short-term debt obligations, including
deposit liabilities, obligations for federal funds purchased and securities
sold under repurchase agreements. There are also various legal limitations on
the extent to which they may pay dividends or otherwise supply funds to Capital
One or its affiliates. See "Supervision, Regulation and Other Matters--
Dividends and Transfer of Funds."
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The Indentures and the Debt Securities generally do not limit or otherwise
restrict the amount of indebtedness that Capital One may incur or the amount of
other securities that Capital One may issue. The Indentures and the Debt
Securities also generally do not require Capital One or an acquiror to
repurchase Debt Securities in the event of a "change in control" or afford
holders any protection in the event of a highly leveraged or similar
transaction involving Capital One or its subsidiaries. You should refer to the
applicable prospectus supplement for information with respect to any changes to
the events of default or covenants which are described below that are
applicable to any series of the Debt Securities.
The prospectus supplement relating to any series of Debt Securities being
offered will include specific terms relating to the offering. These terms will
include some or all of the following:
. the title and type of the offered Debt Securities;
. any limit upon the aggregate principal amount of the offered Debt
Securities;
. the percentage of the principal amount (expressed as a percentage of
the aggregate principal amount) at which the Debt Securities will be
issued;
. the date or dates on which the principal will be payable;
. the interest rate and the interest payment dates;
. any sinking fund or other provisions that would obligate us to
repurchase or otherwise redeem the Debt Securities;
. the detailed terms and provisions of any optional or mandatory
redemption provision;
. any changes to the covenants or additional events of default or
covenants;
. whether the Debt Securities will be convertible into or exchangeable
for our common stock or other securities and, if so, the terms of the
conversion or exchange and the terms of the other securities; and
. any other terms of the offered Debt Securities. (Section 301)
FORM OF THE SECURITIES
The Indentures provide that Capital One may issue Debt Securities in
registered form, in bearer form or in both registered and bearer form. Unless
otherwise indicated in the applicable prospectus supplement, each series of
Debt Securities will be issued in registered form only, without coupons.
Holders of "registered form" securities do not receive a physical certificate
but instead are listed on the Trustee's register for the Debt Securities.
(Section 305)
If we issue the Debt Securities in bearer form, they will have interest
coupons attached, unless issued as original issue discount Debt Securities.
"Bearer form" securities are payable to whomever physically holds them from
time to time. Debt Securities in bearer
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form will not be offered, sold, resold or delivered in connection with their
original issuance in the United States or to any United States person other
than through offices of certain United States financial institutions located
outside the United States. Purchasers of Debt Securities in bearer form will be
subject to certification procedures and may be affected by United States tax
law limitations. These procedures and limitations will be described in the
applicable prospectus supplement.
The Debt Securities may also be issued as original issue discount Debt
Securities. "Original issue discount Debt Securities" are securities sold by us
for substantially less than their stated principal amount. Federal income tax
consequences and other special considerations applicable to any original issue
discount Debt Securities will be described in the applicable prospectus
supplement. (Section 101)
Unless otherwise indicated in the applicable prospectus supplement, Capital
One will issue Debt Securities in registered form in denominations of $1,000 or
any whole number multiple of $1,000. We will issue Debt Securities in bearer
form in denominations of $5,000 or any whole number of $5,000. (Section 302)
There will be no service charge for any transfer, exchange or conversion of the
Debt Securities, but we may require the holder to pay any tax or other
governmental charge payable upon a transfer, exchange or conversion.
REGISTRATION, TRANSFER, PAYMENT AND PAYING AGENT
Unless otherwise described in the applicable prospectus supplement, payments
on the Debt Securities will be made at Capital One's office or agency
maintained for that purpose. We have appointed an agency in New York, New York
to make payments on the Debt Securities; however, we may change our agent from
time to time. (Section 1002) Any transfer of the Debt Securities will be
registerable at the same place. In addition, we may choose to pay interest by
check mailed to the address in the security register of the person in whose
name the Debt Security is registered at the close of business on the regular
record date. (Sections 305 and 307)
Unless otherwise indicated in the applicable prospectus supplement, payments
of principal, premium, if any, and interest on Debt Securities in bearer form
will be made at the office outside the United States specified in the
applicable prospectus supplement and as we may designate from time to time.
Payment can also be made by check or by transfer to an account maintained by
the payee with a bank located outside the United States. Unless otherwise
indicated in the applicable prospectus supplement, payments on Debt Securities
in bearer form will be made only if the holder surrenders the coupon relating
to the interest payment date. We will not make any payments on any Debt
Security in bearer form at any office or agency in the United States, by check
mailed to any address in the United States or by transfer to any account
maintained with a bank located in the United States. (Section 1002)
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in global
form, which means that we will deposit with the depositary identified in the
applicable prospectus
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supplement, one or more certificates representing the entire series. Global
Debt Securities may be issued in either registered or bearer form and in either
temporary or permanent form. Unless it is exchanged in whole or in part for
Debt Securities in definitive form, a global certificate may generally be
transferred only as a whole unless it is being transferred to a nominee of the
depositary. (Section 305)
The applicable prospectus supplement will describe the specific terms of the
depositary agreement governing a series of global Debt Securities and any
limitations and restrictions relating to a series of global Debt Securities.
(Section 305)
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Unless otherwise indicated in the applicable prospectus supplement, the
following provisions will apply to subordinated Debt Securities. Section
references are to sections of the Subordinated Indenture.
Subordinated Debt Securities will be subordinated in right of payment to all
Senior Indebtedness, as defined below. Payments on subordinated Debt Securities
will also be effectively subordinated if:
. we are involved in insolvency, bankruptcy or similar proceedings; or
. we fail to pay the principal, premium, interest, some types of
additional payments or any sinking fund on any Senior Indebtedness when
due. (Section 1601)
Because of this subordination, some of Capital One's creditors may receive
more, ratably, than holders of subordinated Debt Securities if Capital One is
insolvent.
After all payments have been made to the holders of Senior Indebtedness, any
holders of subordinated Debt Securities will be subrogated to the rights of
holders of Senior Indebtedness upon any distribution of assets in any
proceedings out of the distributive shares of subordinated Debt Securities.
(Sections 1601 and 1602)
"Senior Indebtedness" means the principal of and premium, if any, and
interest, on, whether outstanding now or incurred later (a) all indebtedness
for money borrowed by Capital One, including indebtedness of others that
Capital One guarantees, other than the subordinated Debt Securities and
indebtedness that is expressly stated as not senior, and (b) any amendments,
renewals, extensions, modifications and refundings of any indebtedness, unless
in either case the instrument evidencing the indebtedness provides that it is
not senior in right of payment to the subordinated Debt Securities.
CONVERSION AND EXCHANGEABILITY
The holders of Debt Securities that are convertible into common stock or
other securities will be entitled to convert the Debt Securities in some
circumstances. The terms of any conversion will be described in the applicable
prospectus supplement. (Section 1602)
The holders of Debt Securities may be obligated to exchange them for common
stock or other securities of Capital One in some circumstances. The terms of
any exchange will be described in the applicable prospectus supplement.
(Section 305)
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Covenants
Under the Indentures, we agree to the following:
. Corporate Existence. Except as permitted under "--Consolidation, Merger
and Sale of Assets," we will preserve and keep in full force and effect
our corporate existence and the corporate existences of each of our
significant subsidiaries, as defined below. We will also preserve and
keep in full force and effect our and our significant subsidiaries'
charter rights, statutory rights and franchises. Neither Capital One
nor any significant subsidiary will be required to preserve these
rights or franchises if Capital One or the significant subsidiary
determines it is no longer desirable and that the loss is not
disadvantageous in any material respect to the holders. (Section 1007)
. Limitation on Disposition of Significant Subsidiaries. Each of the
Indentures contains a covenant by us limiting our ability to dispose of
the voting stock of a significant subsidiary. A "significant
subsidiary" is any of our subsidiaries that constitutes 20% or more of
our consolidated assets. This covenant generally provides that, as long
as any of the Debt Securities are outstanding, neither Capital One nor
any of its significant subsidiaries will, other than through a
securitization of assets:
. issue stock or securities convertible into stock of a significant
subsidiary unless Capital One will own at least 80% of the
subsidiary's voting stock after the issuance; or
. consolidate with or merge into any other corporation, or convey,
transfer or lease its property and assets substantially as an
entity to any person other than Capital One or one of its
subsidiaries, unless Capital One will own at least 80% of the
surviving successor or other person. (Section 1005)
. Limitation on Creation of Liens. Neither Capital One nor its
subsidiaries will pledge, encumber or grant a lien on a significant
subsidiary's voting stock to secure indebtedness for borrowed money,
unless the Debt Securities are equally and ratably secured by this
pledge, encumbrance or lien, and Capital One would continue to control
the subsidiary if the pledge, encumbrance or lien is exercised.
(Section 1006)
Events of Default
The Indentures define an event of default for any series of Debt Securities
as any of the following events, unless otherwise provided in the applicable
prospectus supplement:
. failure to pay the interest or any additional amounts payable on any
Debt Security when due and continuance of that default for 30 days (in
the case of the Subordinated Indenture, whether or not payment is
prohibited by the subordination provisions);
. failure to pay the principal or any premium on any Debt Security when
due (in the case of the Subordinated Indenture, whether or not payment
is prohibited by the subordination provisions);
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. failure to deposit any sinking fund payment when due (in the case of
the Subordinated Indenture, whether or not payment is prohibited by the
subordination provisions);
. failure to perform any covenant or warranty in the Indenture, other
than a covenant or warranty applicable only to another series of Debt
Securities, that continues for 60 days after Capital One is given
written notice;
. any event of default by Capital One, or any of its significant
subsidiaries, under any mortgage, indenture or other instrument under
which any indebtedness exceeding $10,000,000 becomes due and payable,
if the acceleration is not rescinded or annulled within 30 days after
written notice;
. certain events of bankruptcy, insolvency or reorganization of Capital
One or any of its significant subsidiaries; or
. any other event of default included in any Indenture or supplemental
indenture. (Section 501)
If an event of default occurs with respect to Debt Securities of any series,
the Trustee will give the holders of those Debt Securities notice of the
default under the terms of the applicable Indenture. (Section 501)
If an event of default with respect to any series of Debt Securities occurs
and continues, either the Trustee, or the holders of at least 25% of the
aggregate principal amount of the outstanding Debt Securities of that series,
may declare the principal amount or, if the Debt Securities of that series are
original issue discount Debt Securities, a specified portion of the principal
amount of all the senior Debt Securities of that series, to be due and payable
immediately. (Section 502)
Payment of the principal of subordinated Debt Securities may be accelerated
only in the case of certain events of bankruptcy, insolvency or reorganization.
Subordinated Debt Securities cannot be accelerated if we default in our
performance of any other covenant, including payment of principal or interest.
Any time after a declaration of acceleration has been made, but before a
judgment or decree based on acceleration has been obtained, the majority
holders may, under certain circumstances, void the declaration. "Majority
holders" are the holders of a majority of the aggregate principal amount of
outstanding Debt Securities of that series. (Section 502)
Other than its duties in the case of a default, the Trustee is not obligated
to exercise any of its rights or powers under any Indenture at the request or
direction of any of the holders, unless those holders offer the Trustee
reasonable indemnity. (Section 601) If the holders provide this reasonable
indemnification, the majority holders may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, for the Debt Securities
of that series. (Section 512)
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A holder does not have the right to institute a proceeding, appoint a
receiver or a trustee, or commence any other remedy, unless:
. the holder gives the Trustee written notice of a continuing event of
default;
. the majority holders have made written request, and offered reasonable
indemnity, to the Trustee to institute the proceeding as Trustee; and
. the Trustee has received a consistent request from the majority holders
and failed to institute a proceeding within 60 days. (Section 507)
However, these limitations do not apply to a suit for the enforcement of
payment or conversion rights instituted on or after the respective due dates of
the Debt Securities. (Section 508)
DEFEASANCE
If the applicable prospectus supplement provides for defeasance, we may elect
to pay and discharge our obligations on the Debt Securities if:
. no event of default has occurred and is continuing, or would occur upon
the giving of notice or lapse of time at the time of the satisfaction
and discharge;
. we deposit with the Trustee sufficient cash or government securities to
pay all the principal, any premium and any other sums due through the
stated maturity or redemption date of the Debt Securities of the
series;
. we pay all other sums due with respect to the outstanding securities of
the series;
. we deliver an opinion of counsel to the effect that the holders will
have no federal income tax consequences as a result of the deposit or
defeasance; and
. we deliver a certificate of our independent public accountants as
required by the Indenture. (Section 402)
If this happens, the holders of the Debt Securities of the series will not be
entitled to the benefits of the Indenture, except for the registration of
transfer or exchange of Debt Securities and the replacement of stolen, lost or
mutilated Debt Securities. (Section 306)
DETERMINING THE OUTSTANDING DEBT SECURITIES
We will consider the following factors in determining whether the holders of
the requisite principal amount of outstanding Debt Securities have given the
proper notice under the Indenture:
. the portion of the principal amount of an original issue discount Debt
Security that will be deemed to be outstanding will be the portion of
the principal amount that would be declared to be due and payable on
that date;
. the principal amount of any indexed security will be the principal face
amount of the indexed security determined on the date of its original
issuance;
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. the principal amount of a Debt Security denominated in one or more
foreign currency units shall be the U.S. dollar equivalent based on the
applicable exchange rate or rates at the time of sale; and
. any Debt Security owned by Capital One or any other obligor, or any of
their affiliates, will be treated as not outstanding. (Section 101)
MODIFICATIONS AND WAIVERS UNDER THE INDENTURES
Capital One and the Trustee may modify and amend the Indentures with the
consent of the holders of at least 66 2/3% in aggregate principal amount of the
outstanding Debt Securities of each series issued under the Indenture and
affected by the modification or amendment. However, no modification or
amendment may, without the consent of each holder of Debt Securities affected
by the modification or amendment:
. change the stated maturity of any Debt Security;
. reduce the principal amount of, or the premium, if any, or, except as
otherwise provided in the applicable prospectus supplement, interest
on, any Debt Security, including in the case of an original issue
discount Debt Security, the amount payable upon acceleration of the
maturity of the Debt Security;
. in the case of the Subordinated Indenture, modify the subordination
provisions in a manner adverse to the holders of the Subordinated Debt
Securities;
. reduce the percentage in principal amount of outstanding Debt
Securities of any series; or
. adversely affect the right of any convertible Debt Securities to
convert. (Section 902)
The holders of at least 50% of the aggregate principal amount of the
outstanding Debt Securities of each series may, on behalf of all holders of
that series, waive Capital One's compliance with certain restrictive provisions
of the applicable Indenture. They may also waive any past default under the
applicable Indenture, except a default in the payment of principal, premium or
interest or in the performance of certain covenants. (Sections 513 and 1008)
Capital One and the Trustee may modify and amend the Indentures without the
consent of any holder for any of the following purposes:
. to evidence the succession of another person to Capital One;
. to add to the covenants of Capital One for the benefit of the holders
of all or any series of Debt Securities;
. to add events of default;
. to add or change any provisions of the Indenture to facilitate the
issuance of bearer Debt Securities;
. to change the conditions, limitations and restrictions on the
authorized amount, terms or purposes of issue, authentication and
delivery of Debt Securities;
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. to establish the form or terms of Debt Securities of any series and any
related coupons;
. to evidence and provide for the acceptance of appointment by a
successor Trustee;
. to cure any ambiguity, defect or inconsistency in the Indenture,
provided the action does not materially adversely affect the interests
of the holders of any Debt Securities or related coupons;
. to supplement any of the provisions of the Indenture if necessary to
permit or facilitate the defeasance and discharge of any series of Debt
Securities, as long as the action does not materially adversely affect
the interests of the holders of any Debt Securities or related coupons;
. to secure the Debt Securities; and
. to amend or supplement any provision of the Indenture or any
supplemental indenture, provided that the amendment or supplement does
not materially adversely affect the interests of the holders of
outstanding Debt Securities. (Section 901)
CONSOLIDATION, MERGER AND SALE OF ASSETS
Each Indenture generally permits a consolidation or merger between us and
another corporation. They also permit the sale by us of all or substantially
all of our property or assets. These events do not require the consent of the
holders of any outstanding Debt Securities if:
. the successor or purchaser is a corporation organized under the laws of
the United States of America, any state or the District of Columbia,
and it expressly assumes our obligations on the Debt Securities under
each of the Indentures;
. immediately after giving effect to the transaction, no event of
default, and no event which, after notice or lapse of time or both,
would become an event of default, will have occurred and be continuing;
and
. we have delivered to the Trustee an officers' certificate and an
opinion of counsel stating compliance with these provisions. (Section
801)
CONCERNING THE TRUSTEES
In the normal course of business, Capital One and its subsidiaries conduct
banking transactions with the Trustee, and the Trustee conducts banking
transactions with Capital One and its subsidiaries.
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DESCRIPTION OF PREFERRED STOCK
The following description summarizes the general terms and provisions of our
authorized preferred stock. If we offer preferred stock, we will describe the
specific designations and rights of this stock in a prospectus supplement and
will file the description with the SEC. Terms which could be included in a
prospectus supplement include:
. the designation of the preferred stock and the number of shares
offered;
. the amount of liquidation preference per share;
. the price at which the preferred stock will be issued;
. the dividend rate, or its method of calculation, and the dates on which
dividends will be payable;
. whether the dividends will be cumulative or noncumulative, and if
cumulative, the dates from which dividends will commence to cumulate;
. any redemption or sinking fund provisions of the preferred stock;
. whether we have elected to offer depositary shares, as described below;
. the terms and conditions, if any, upon which the preferred stock will
be convertible into common stock or other securities; and
. any additional voting, dividend, liquidation, redemption, sinking fund
and other rights, preferences, privileges, limitations and restrictions
of the preferred stock.
Preferred stock will have the dividend, liquidation, and voting rights
described below, unless otherwise provided in the applicable prospectus
supplement. You should read the prospectus supplement relating to any series of
preferred stock for the series' specific terms.
General
Capital One's Restated Certificate of Incorporation authorizes our Board of
Directors to issue one or more series of preferred stock, par value $.01 per
share, without the approval of our stockholders. The Board can also determine
the terms, including preferences, conversion and other rights, voting power,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption of any preferred stock. Currently, under our Restated
Certificate of Incorporation, 50,000,000 shares are classified as preferred
stock and no shares of preferred stock are outstanding. We have designated
1,000,000 shares of the preferred stock as cumulative participating junior
preferred stock, which may be issued upon the exercise and conversion of
certain "Rights," as defined below, which are attached to each share of our
common stock. Before issuing a series of preferred stock, the Board will adopt
resolutions creating and designating the series of preferred stock.
The preferred stock will, when issued, be fully paid and non-assessable and
have no preemptive rights. Unless otherwise specified in a prospectus
supplement, each series of the preferred stock will rank equally as to
dividends and liquidation rights in all respects with each other series of the
preferred stock. You should read the applicable prospectus supplement relating
to any series of preferred stock for that series' specific terms.
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DIVIDEND RIGHTS
Holders of preferred stock will receive, when, as and if declared by the
Board, dividends at rates and on the dates described in the applicable
prospectus supplement. Each dividend will be payable to the holders of record
as they appear on the stock record books of Capital One or, if applicable, the
records of the depositary referred to under "Depositary Shares," on the record
dates fixed by the Board or its committee. Dividends on any series of preferred
stock may be cumulative or noncumulative. Capital One's ability to pay
dividends on the preferred stock depends on the ability of the Bank and the
Savings Bank to pay dividends to Capital One. The ability of Capital One, the
Bank and the Savings Bank to pay dividends in the future is subject to bank
regulatory requirements and capital guidelines and policies established by the
Federal Reserve Board. See "Supervision, Regulation and Other Matters."
We will not declare or pay or set apart funds for the payment of dividends on
any securities which rank equally with the preferred stock unless we have paid
or set apart funds for payment of dividends on the preferred stock. If full
dividends are not paid, the preferred stock will share dividends pro rata with
any equally ranked securities.
VOTING RIGHTS
Unless indicated in the applicable prospectus supplement relating to a
particular series of preferred stock or expressly required by law, the holders
of the preferred stock will not have any voting rights.
RIGHTS UPON LIQUIDATION
If we liquidate, dissolve or wind up our affairs, either voluntarily or
involuntarily, the holders of each series of preferred stock will be entitled
to receive liquidating distributions. These will be in the amounts set forth in
the applicable prospectus supplement, plus accrued and unpaid dividends and, if
the series of the preferred stock is cumulative, accrued and unpaid dividends
for all prior dividend periods. If we do not pay in full all amounts payable on
any series of preferred stock, the holders of the preferred stock will share
proportionately with any equally ranked securities in any distribution of our
assets. After the holders of any series of preferred stock are paid in full,
they will not have any further claim to any of our remaining assets.
Because we are a holding company, the rights of our stockholders to
participate in the assets of any subsidiary, including the Bank, upon the
subsidiary's liquidation or recapitalization may be subject to the prior claims
of the subsidiary's creditors, except to the extent that we may ourself be a
creditor with recognized claims against the subsidiary.
REDEMPTION
A series of preferred stock may be redeemable, in whole or in part, at the
option of Capital One or the holder of the stock, and may be subject to
mandatory redemption pursuant to a sinking fund, under the terms included in
any applicable prospectus supplement.
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In the event of partial redemptions of preferred stock, the Board or its
committee will determine the method for selecting the shares to be redeemed,
which may be by lot or pro rata or by any other method the Board or its
committee determines to be equitable.
On and after a redemption date, unless Capital One defaults in the payment of
the redemption price, dividends will cease to accrue on shares of preferred
stock which were called for redemption. In addition, all rights of holders of
the preferred shares will terminate except for the right to receive the
redemption price.
CONVERSION
The applicable prospectus supplement for any series of preferred stock will
state the terms and conditions, if any, on which shares of that series are
convertible into our common stock or other securities, including:
. the number of shares of common stock or other securities into which the
shares of preferred stock are convertible;
. the conversion price or manner of calculation;
. the conversion period;
. provisions as to whether conversion will be at the option of the
holders of the preferred stock or Capital One, if applicable;
. any events requiring an adjustment of the conversion price; and
. provisions affecting conversion in the event of the redemption of the
series of preferred stock.
DEPOSITARY SHARES
We may, at our option, elect to offer fractional shares of preferred stock,
or "depositary shares," rather than full shares of preferred stock. In that
event, we will issue receipts for depositary shares, each of which will
represent a fraction of a share of a particular series of preferred stock as
described in the applicable prospectus supplement.
The shares of any series of preferred stock represented by depositary shares
will be deposited under a deposit agreement between Capital One and the
depositary named in the applicable prospectus supplement. Subject to the terms
of the deposit agreement, each owner of a depositary share will be entitled, in
proportion, to all the rights and preferences of the preferred stock, including
dividend, voting, redemption, subscription and liquidation rights. The terms of
any depositary shares will be set forth in the applicable prospectus supplement
and the provisions of the deposit agreement, which will be filed with the SEC.
23
<PAGE>
DESCRIPTION OF COMMON STOCK
We are authorized to issue 300,000,000 shares of common stock, par value $.01
per share. As of July 31, 1999, 197,480,933 shares were issued and outstanding.
The common stock is traded on the New York Stock Exchange under the symbol
"COF". All outstanding shares of common stock are and will be fully paid and
non-assessable.
The following summary is not complete and you should refer to the applicable
provisions of the Delaware General Corporation Law and our Restated Certificate
of Incorporation and Bylaws for additional information. See "Where You Can Find
More Information."
VOTING AND OTHER RIGHTS
Each share of common stock is entitled to one vote on all matters submitted
to a vote of stockholders. A majority vote is required for all actions to be
taken by stockholders, except that directors are elected by a plurality of the
votes cast. Stockholders do not have cumulative voting rights in the election
of directors, which means that the holders of more than 50% of the shares
voting in an election of directors can elect all of the directors. Shares of
common stock also do not have any preemptive, subscription, redemption, sinking
fund or conversion rights.
DISTRIBUTION
Common stock dividends are subject to preferences, if any, on any outstanding
shares of preferred stock. Dividends must be declared by the Board out of
legally available funds. If Capital One liquidates, dissolves or winds up its
affairs, common stockholders are entitled to share proportionately in the
assets available for distribution to holders of common stock.
ANTI-TAKEOVER LEGISLATION
Capital One is a Delaware corporation and is governed by Section 203 of the
Delaware General Corporation Law. This provision generally states that, subject
to some exceptions, a corporation cannot engage in any business combination
with any "interested stockholder" for three years after the time that the
stockholder became an interested stockholder unless the corporation's
stockholders approve the business combination. Delaware law defines an
interested stockholder to include any person, and its affiliates and
associates, that owns 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 prior to the relevant date.
Under certain circumstances, Section 203 makes it more difficult for a person
who would be an "interested stockholder" to enter into some business
combinations and transactions with a corporation for a three-year period.
Although stockholders may elect to exclude a corporation from Section 203's
restrictions, our Restated Certificate of Incorporation and Bylaws do not
exclude us from Section 203's restrictions. The provisions of Section 203 may
encourage companies interested in acquiring us to negotiate in advance
24
<PAGE>
with the Board, since Section 203 permits the Board, without stockholder
approval, to approve a business combination with an interested stockholder or
the transaction which causes a person to become an interested stockholder.
Business combinations are discussed more fully below.
CAPITAL ONE'S CERTIFICATE OF INCORPORATION AND BYLAW PROVISIONS
Certain provisions in our Restated Certificate of Incorporation and Bylaws
could make more difficult or discourage a tender offer, proxy contest or other
takeover attempt that is opposed by the Board of Directors but which might be
favored by the stockholders. The Restated Certificate of Incorporation and
Bylaws are filed as exhibits to the registration statement, and certain
provisions are summarized below.
Classified Board of Directors. Capital One's Board, other than directors
elected by any series of preferred stock, is 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 is elected for a 3-year term.
Some practical effects of these classification provisions are the following:
. It will take at least two annual meetings of stockholders, instead of
one, to elect a majority of the Board. This delay ensures that Capital
One's directors, if confronted by a stockholder attempting to force a
proxy contest, a tender or exchange offer, or an extraordinary
corporate transaction, would have sufficient time to review the
proposal and any available alternatives before they act in what they
believe to be the best interests of the stockholders. However, even if
a change in the composition of the Board would be beneficial to Capital
One and its stockholders, it will take at least two annual meetings of
stockholders to make this change.
. A classified Board may discourage third party proxy contests, tender
offers or attempts to obtain control of Capital One. This will happen
even if an attempt might be beneficial to Capital One and its
stockholders. Therefore, there is an increased likelihood that
incumbent directors will retain their positions.
. A classified Board discourages accumulations of large blocks of Capital
One's stock by purchasers whose objective is to take control of the
Board. This could reduce the likelihood of fluctuations in the market
price of the common stock that might result from accumulations of large
blocks of stock. Stockholders therefore might not have opportunities to
sell their shares of common stock at the higher market price that an
accumulation of stock could create.
Number of Directors; Removal; Filling Vacancies. Generally speaking, our
Board must consist of between three and seventeen directors and vacancies will
be filled only by the affirmative vote of a majority of the remaining
directors, even if less than a quorum remains in office. Therefore, unless the
Bylaws are amended, the Board could prevent any stockholder from enlarging the
Board of Directors and filling the new directorships with the stockholder's own
nominees.
25
<PAGE>
Under Delaware law, unless otherwise provided in the certificate of
incorporation, directors serving on a classified board may only be removed by
the stockholders for cause. Our Restated Certificate of Incorporation and
Bylaws 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 of the then outstanding shares of stock entitled to vote
generally in the election of directors.
No Stockholder Action by Written Consent; Special Meetings. 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. Under
circumstances described in the Bylaws, special meetings of stockholders can be
called by the Chairman of the Board or by the Board. Stockholders are not
permitted to call a special meeting or to require that the Board call a special
meeting. Moreover, any special meeting of stockholders is limited to the
business in the notice of the special meeting sent to the stockholders before
the meeting.
The provisions prohibiting stockholder action by written consent and
prohibiting stockholders from calling a special meeting could delay
consideration of a stockholder proposal until our next annual meeting. This
would prevent the holders of our stock from unilaterally using the written
consent procedure to take stockholder action. Moreover, a stockholder cannot
force stockholder consideration of a proposal over the opposition of the
Chairman and the Board by calling a special meeting of stockholders.
Advance Notice Provisions for Stockholder Nominations and Stockholder
Proposals. Only people who are nominated by, or at the direction of, the Board,
or by a stockholder who has given proper written notice prior to a meeting at
which directors are to be elected, will be eligible for election as directors.
Business conducted at an annual meeting is limited to the business brought
before the meeting by, or at the direction of, the Chairman, the Board or a
stockholder who has given proper notice. A stockholder's notice to Capital One
proposing to nominate a person for election as a director must also contain
certain information described in the Bylaws. You should refer to Capital One's
Bylaws for more information, including the process and timing requirements for
a stockholder notice.
Some of the effects of the provisions described above and in the Bylaws
include:
. the Board will have a longer period to consider the qualifications of
the proposed nominees and, if deemed necessary or desirable, to inform
stockholders about the qualifications;
. there will be an orderly procedure for conducting annual meetings of
stockholders and informing stockholders, prior to the meetings, of any
business proposed to be conducted at the meetings, including any Board
recommendations; and
. contests for the election of directors or the consideration of
stockholder proposals will be precluded if the procedures are not
followed. Third parties may therefore be discouraged from conducting a
solicitation of proxies to elect their own slate of directors or to
approve their own proposal.
26
<PAGE>
Business Combinations. Certain mergers, share exchanges or sales of Capital
One's assets with or to interested stockholders, as defined below, must be
approved by the affirmative vote of the holders of at least 75% of the voting
stock of Capital One, voting together as a single class. Our Restated
Certificate of Incorporation requires this affirmative vote even if no vote is
required, or a lesser percentage is specified, by law or any national
securities exchange or otherwise. This affirmative vote is not required in two
situations. First, it is not required if the business combination has been
approved by a majority of uninterested, continuing directors. Second, it is not
required if certain price and procedure requirements designed to ensure that
our stockholders receive a "fair price" for their common stock are satisfied.
Our Restated Certificate of Incorporation defines an interested stockholder as
any person, other than Capital One or any subsidiary of Capital One, who or
which:
. beneficially owns, directly or indirectly, 5% or more of the voting
power of the outstanding voting stock;
. is an affiliate of Capital One and at any time within the two-year
period immediately prior to the date in question beneficially owned,
directly or indirectly, 5% or more of the voting power of the then
outstanding voting stock; or
. owns 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 the transfer of ownership
occurred in the course of a non-public transaction or series of
transactions.
Liability of Directors; Indemnification. A director generally will not be
personally liable for monetary damages to Capital One or its stockholders for
breach of fiduciary duty as a director. A director may be held liable, however,
for the following:
. any breach of the director's duty of loyalty to Capital One or its
stockholders;
. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
. paying a dividend or approving a stock repurchase in violation of
Delaware law; or
. any transaction from which the director derived an improper personal
benefit.
Capital One indemnifies its officers and directors against lawsuits by third
parties to the fullest extent of the law. We may agree with any person to
provide an indemnification greater than or different from the indemnification
provided by the Restated Certificate of Incorporation.
Amendments. The Restated Certificate of Incorporation and Bylaws generally
may be amended by a majority vote of the stockholders, but some provisions,
including some of the provisions discussed above, can only be amended by an 80%
vote of the stockholders. This 80% approval requirement prevents a stockholder
with only a majority of the common stock from circumventing the requirements of
these provisions by simply amending or repealing them. The Restated Certificate
of Incorporation further provides that the Bylaws may be amended by our Board.
27
<PAGE>
Rights to Purchase Certain Preferred Shares
Each share of our common stock includes an attached "Right." The Right
entitles a holder of common stock to purchase from Capital One one three-
hundredth of a share of Capital One's cumulative participating junior preferred
stock (the "Junior Preferred Shares") at a price of $200 per one three-
hundredth of a share, subject to adjustment. We have initially authorized and
reserved 1,000,000 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 three-hundredth interest in a Junior
Preferred Share that can be purchased on 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% or more of
Capital One's outstanding common stock or a tender offer or exchange offer is
announced for Capital One's common stock. The Rights expire on November 29,
2005, unless earlier redeemed by Capital One at $0.01 per Right. Capital One
may only redeem the Rights prior to the time that any person or group acquires
15% 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 as a stockholder of Capital One.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire Capital One
on terms not approved by the Board, 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, since
Capital One may redeem the Rights prior to the time that a person or group
acquires 15% of the outstanding common stock.
Dividend Reinvestment Plan
In January 1996, we implemented a dividend reinvestment and stock purchase
plan. The plan provides stockholders with the opportunity to purchase
additional shares of our common stock by reinvesting all or a portion of their
dividends on shares of common stock. It 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 our permission at a discount which will be
from 0% to 3%. We use proceeds from this plan for general corporate purposes.
Transfer Agent
The transfer agent and registrar for the common stock is First Chicago Trust
Company of New York.
28
<PAGE>
PLAN OF DISTRIBUTION
We may sell the offered securities to or through underwriters or dealers,
directly to other purchasers or through agents. Each prospectus supplement will
describe the particular method of distribution.
The distribution may take place from time to time in one or more transactions
at a fixed price or prices, which may be changed, or at market prices
prevailing at the time of sale, at prices related to the prevailing market
prices or at negotiated prices.
In connection with the sale of the securities, underwriters may receive
compensation in the form of discounts, concessions or commissions from us or
from purchasers of securities for whom they may act as agents. Underwriters may
sell the securities to or through dealers, and the dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution
of our securities may be deemed to be underwriters, and any discounts or
commissions received by them from us and any profit on the resale of the
securities by them may be deemed to be underwriting discounts and commissions
under the Securities Act. Any underwriter or agent will be identified, and any
compensation received from us will be described, in the applicable prospectus
supplement.
If indicated in the applicable prospectus supplement, we may authorize
underwriters or other persons acting as our agents to solicit offers by certain
institutions to purchase Debt Securities from us pursuant to contracts
providing for payment and delivery on a future date. Institutions with which
these contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases these institutions must be approved
by us. The obligations of any purchaser under any contract will be subject to
the condition that the purchase of the offered Debt Securities will not at the
time of delivery be prohibited under the laws of the purchaser's jurisdiction.
The underwriters and the other agents will not have any responsibility for the
validity or performance of the contracts.
Underwriters and agents who participate in the distribution of the securities
may be entitled under agreements with us to indemnification by us. Unless
indicated in the applicable prospectus supplement, we do not expect to list the
securities on a securities exchange, except for the common stock, which is
listed on the New York Stock Exchange. We will not require underwriters or
dealers to make a market in the securities. We cannot predict the activity or
liquidity of any trading in the securities.
29
<PAGE>
VALIDITY OF SECURITIES
John G. Finneran, Jr., Capital One's Senior Vice President, General Counsel
and Corporate Secretary, will pass upon the validity of the securities for
Capital One. As of July 31, 1999, Mr. Finneran owned approximately 19,071
shares of Capital One's common stock and held options to purchase 338,571
shares of common stock issued under Capital One's 1994 Stock Incentive Plan.
EXPERTS
Ernst & Young LLP, independent auditors, have audited Capital One's
consolidated financial statements, which are incorporated by reference in
Capital One's Annual Report on Form 10-K for the year ended December 31, 1998,
as set forth in their report which is incorporated by reference in this
prospectus and elsewhere in the registration statement. Capital One's financial
statements are incorporated by reference in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.
30
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Capital One estimates that expenses, other than underwriting compensation, in
connection with the offering described in this Registration Statement will be
as follows:
<TABLE>
<S> <C>
Registration fee................................................. $ 257,150
Trustee's fees and expenses...................................... 45,000
Printing and engraving expenses.................................. 200,000
Legal fees and expenses.......................................... 100,000
Accountants' fees and expenses................................... 100,000
Rating agency fees............................................... 300,000
Blue Sky fees and expenses....................................... 60,000
NASD filing fees................................................. 41,000
NYSE filing fees................................................. 60,000
Miscellaneous.................................................... 36,850
----------
Total.......................................................... $1,200,000
==========
</TABLE>
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law provides, in general, for
indemnification by a corporation of any person threatened with or made a party
to any action, suit or proceeding by reason of the fact that he or she is, or
was, a director, officer, employee or agent of the corporation. Indemnification
is also authorized with respect to a criminal action or proceeding where the
person had no reasonable cause to believe that his conduct was unlawful.
Article XI of Capital One's Restated Certificate of Incorporation and Section
6.7 of Capital One's Bylaws provide, in general, for mandatory indemnification
of directors and officers to the extent permitted by law, against liability
incurred by them in proceedings instituted or threatened against them by third
parties, or by or on behalf of Capital One itself, relating to the manner in
which they performed their duties unless they have been guilty of willful
misconduct or of a knowing violation of the criminal law.
31
<PAGE>
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
------- --------
<C> <S>
1.1(1) Form of Debt Underwriting Agreement
1.2(4) Form of Preferred Stock Purchase Agreement
3.1(2) Restated Certificate of Incorporation of Capital One Financial
Corporation (incorporated by reference to Exhibit 3.1 of Capital One's
Annual Report on Form 10-K for the year ended December 31, 1994)
3.2(2) Restated Bylaws of Capital One Financial Corporation (as amended
January 24, 1995) (incorporated by reference to Exhibit 3.2 of Capital
One's Annual Report on Form 10-K for the year ended December 31, 1994)
4.1(3) Senior Indenture, dated as of November 1, 1996, between Capital One
and Harris Trust and Savings Bank, as trustee
4.2(2) Form of Subordinated Indenture, dated as of [ ], between Capital
One and [ ], as trustee (incorporated by reference to ).
4.3(4) Form of Certificate of Designation relating to each series of
Preferred Stock
4.4(4) Form of Deposit Agreement
5(1) Opinion of John G. Finneran, Jr., Senior Vice President, General
Counsel and Corporate Secretary of Capital One
12(1) Statement re: Computation of Ratios of Earnings to Fixed Charges
23.1(1) Consent of Ernst & Young LLP
23.2 Consent of John G. Finneran, Jr. (included in Exhibit 5)
24 Powers of Attorney (set forth on signature page)
25.1(3) Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of Harris Trust
25.2(4) Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of [ ]
</TABLE>
- --------
(1) Filed herewith.
(2) Previously filed. See Registration Statement No. 333-58577.
(3) Filed as part of Capital One's Current Report on Form 8-K dated November
13, 1996.
(4) To be filed by amendment or incorporated by reference. Capital One will
file as an Exhibit to a Current Report on Form 8-K any related form
utilized in the future and not previously filed by means of an amendment.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment
32
<PAGE>
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
from the low or high and of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to the information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each the post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of the securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under this Item 15, or
otherwise, the registrant has been advised that in the opinion of the
Commission the indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against the liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by the director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court
33
<PAGE>
of appropriate jurisdiction the question whether the indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of the issue.
(d) (1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new Registration Statement relating to the Securities offered
therein, and the offering of the Securities at that time shall be deemed to be
the initial bona fide offering thereof.
34
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Commonwealth of Virginia, on the 13th day of August, 1999.
Capital One Financial Corporation
/s/ David M. Willey
By:
-----------------------------------
David M. Willey
Senior Vice President, Corporate
Financial Management, and
Treasurer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints John G. Finneran, Jr., Esq. and David M. Willey
his true and lawful attorney-in-fact and agent, for him, with full power of
substitution and resubstitution, for him and in his name, place and stand, in
any and all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement, and to file the same with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all interests and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement on Form S-3 has been signed below by the following persons in the
capacities indicated and on the 13th day of August, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Richard D. Fairbank Chairman and Chief Executive
_____________________________________________ Officer (Principal Executive
Richard D. Fairbank Officer)
/s/ Nigel W. Morris Director, President and Chief
_____________________________________________ Operating Officer
Nigel W. Morris
/s/ David M. Willey Senior Vice President,
_____________________________________________ Corporate Financial
David M. Willey Management, and Treasurer
(Principal Accounting and
Financial Officer)
/s/ Ronald W. Dietz Director
_____________________________________________
W. Ronald Dietz
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<C> <S>
/s/ James M. Flick, Jr. Director
_____________________________________________
James M. Flick, Jr.
/s/ Patrick W. Gross Director
_____________________________________________
Patrick W. Gross
/s/ James V. Kimsey Director
_____________________________________________
James V. Kimsey
/s/ Stanley L. Westreich Director
_____________________________________________
Stanley I. Westreich
</TABLE>
36
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Exhibits
------- --------
<C> <S>
1.1(1) Form of Debt Underwriting Agreement
1.2(4) Form of Preferred Stock Purchase Agreement
3.1(2) Restated Certificate of Incorporation of Capital One Financial
Corporation (incorporated by reference to Exhibit 3.1 of Capital One's
Annual Report on Form 10-K for the year ended December 31, 1994)
3.2(2) Restated Bylaws of Capital One Financial Corporation (as amended
January 24, 1995) (incorporated by reference to Exhibit 3.2 of Capital
One's Annual Report on Form 10-K for the year ended December 31, 1994)
4.1(3) Senior Indenture, dated as of November 1, 1996, between Capital One
and Harris Trust and Savings Bank, as trustee
4.2(2) Form of Subordinated Indenture, dated as of [ ], between Capital
One and [ ], as trustee (incorporated by reference to ).
4.3(4) Form of Certificate of Designation relating to each series of
Preferred Stock
4.4(4) Form of Deposit Agreement
5 (1) Opinion of John G. Finneran, Jr., Senior Vice President, General
Counsel and Corporate Secretary of Capital One
12(1) Statement re: Computation of Ratios of Earnings to Fixed Charges
23.1(1) Consent of Ernst & Young LLP
23.2 Consent of John G. Finneran, Jr. (included in Exhibit 5)
24 Powers of Attorney (set forth on signature page)
25.1(3) Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of Harris Trust
25.2(4) Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of [ ]
</TABLE>
- --------
(1) Filed herewith.
(2) Previously filed. See Registration Statement No. 333-58577.
(3) Filed as part of Capital One's Current Report on Form 8-K dated
November 13, 1996.
(4) To be filed by amendment or incorporated by reference. Capital One will
file as an Exhibit to a Current Report on Form 8-K any related form
utilized in the future and not previously filed by means of an amendment.
37
<PAGE>
Exhibit 1.1
<PAGE>
$___________
CAPITAL ONE FINANCIAL CORPORATION
_____% Notes Due ____
UNDERWRITING AGREEMENT
----------------------
[Date]
[Underwriter]
Dear Sirs:
Capital One Financial Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell $___________ principal amount of its
_____% Notes due ____________ (the "Securities") to the several underwriters
named in Schedule I hereto (the "Underwriters"). The Securities are to be issued
pursuant to the provisions of an Indenture dated as of November 1, 1996 (the
"Indenture") between the Company and Harris Trust and Savings Bank, as Trustee
(the "Trustee").
1. Registration Statement and Prospectus. The Company has prepared
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and filed with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 (File No. _______________________________)
under the Securities Act of 1933, as amended (the "Securities Act") both in
respect of its Debt Securities, shares of its Common Stock, $0.01 par value, and
shares of its Preferred Stock, $0.01 par value (the "Registration Statement").
Such registration statement has been declared effective by the Commission. The
prospectus included in the Registration Statement, as supplemented as
contemplated by Section 5(a) to reflect the terms of the Securities and the
terms of the offering thereof, as first filed with the Commission pursuant to
Rule 424(b) under the
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Securities Act, including all documents incorporated by reference therein, is
referred to herein as the "Prospectus".
2. Agreements to Sell and Purchase. On the basis of the
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representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell, and each Underwriter
agrees, severally and not jointly, to purchase from the Company the principal
amount of Securities set forth opposite the name of such Underwriter in Schedule
I hereto, at ______% of the principal amount thereof (the "Purchase Price") plus
accrued interest thereon, if any, from _____________ to the date of payment and
delivery.
3. Terms of Public Offering. The Company is advised by you that the
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Underwriters propose (i) to make a public offering of their respective portions
of the Securities as soon after the execution hereof as in your judgment is
advisable and (ii) initially to offer the Securities upon the terms set forth in
the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and payment
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for the Securities shall be made at 10:00 A.M., New York City time, on the third
business day unless otherwise permitted by the Commission pursuant to Rule 15c6-
1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (the
"Closing Date") following the date of the initial public offering, at such place
as you shall designate. The Closing Date and the location of delivery of and
the form of payment for the Securities may be varied by agreement between you
and the Company.
Certificates for the Securities shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date. Such certificates shall be made
available to you for inspection not later than 9:30 A.M., New York City time, on
the business day next preceding the Closing Date. Certificates in definitive
form evidencing the Securities shall be delivered to you on the Closing Date for
the respective accounts of the several Underwriters, against payment of the
Purchase Price therefor by wire payable in Federal (same-day) funds to the order
of the Company.
5. Agreements of the Company. The Company agrees with you:
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(a) To file the Prospectus with the Commission pursuant to Rule
424(b)(2) (or, if applicable and if consented to by the Underwriters, sub-
paragraph (5) thereof) not later than the second business day following the
execution and delivery of this Agreement.
(b) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to
the Registration Statement or amendments or supplements to the Prospectus
or for additional information, (ii) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of the suspension of
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qualification of the Securities for offering or sale in any jurisdiction,
or the initiation of any proceeding for such purposes, and (iii) of the
happening of any event during the period referred to in paragraph (e) below
which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires the making of any
additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(c) To furnish to you, without charge, signed copies of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you such number
of conformed copies of the Registration Statement as so filed and of each
amendment to it, without exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to the Registration
Statement or to make any amendment or supplement to the Prospectus of which
you shall not previously have been advised or to which you shall reasonably
object; and to prepare and file with the Commission, promptly upon your
reasonable request, any amendment to the Registration Statement or
supplement to the Prospectus which may be necessary or advisable in
connection with the distribution of the Securities by you, and to use its
best efforts to cause any such post-effective amendment to the Registration
Statement to become promptly effective.
(e) For such period as in the opinion of counsel for the Underwriters
a prospectus is required by law to be delivered in connection with sales of
the Securities by an Underwriter or a dealer, to furnish to each
Underwriter and dealer as many copies of the Prospectus (and of any
amendment or supplement to the Prospectus) as such Underwriter or dealer
may reasonably request.
(f) If during the period specified in paragraph (e) any event shall
occur as a result of which, in the opinion of counsel for the Underwriters,
it becomes necessary to amend or supplement the Prospectus in order to make
the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with any law,
forthwith to prepare and, subject to paragraph (d) above, file with the
Commission an appropriate amendment or supplement to the Prospectus so that
the statements in the Prospectus, as so amended or supplemented, will not
in the light of the circumstances when it is so delivered, be misleading,
or so that the Prospectus will comply with law, and to furnish to each
Underwriter and to such dealers as you shall specify, such number of copies
thereof as such Underwriter or dealers may reasonably request.
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(g) Prior to any public offering of the Securities, to cooperate with
you and counsel for the Underwriters in connection with the registration or
qualification of the Securities for offer and sale by the several
Underwriters and by dealers under the state securities or Blue Sky laws of
such jurisdictions as you may request, to continue such qualification in
effect so long as required for distribution of the Securities and to file
such consents to service of process or other documents as may be necessary
in order to effect such registration or qualification.
(h) To make generally available to its security holders as soon as
reasonably practicable an earnings statement covering a period of at least
twelve months after the effective date of the Registration Statement which
shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 under the Securities Act.
(i) If at any time during such period the Company ceases to file
reports with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act, during the period of five years after the date of this Agreement, (i)
to mail as soon as reasonably practicable after the end of each fiscal year
to the record holders of its Securities a financial report of the Company
and its subsidiaries on a consolidated basis (and a similar financial
report of all unconsolidated subsidiaries, if any), all such financial
reports to include a consolidated balance sheet, a consolidated statement
of operations, a consolidated statement of cash flows and a consolidated
statement of changes in stockholders' equity as of the end of and for such
fiscal year, together with comparable information as of the end of and for
the preceding year, certified by independent certified public accountants,
and (ii) to mail and make generally available as soon as practicable after
the end of each quarterly period (except for the last quarterly period of
each fiscal year) to such holders, a consolidated balance sheet, a
consolidated statement of operations and a consolidated statement of cash
flows (and similar financial reports of all unconsolidated subsidiaries, if
any) as of the end of and for such period, and for the period from the
beginning of such year to the close of such quarterly period, together with
comparable information for the corresponding periods of the preceding year.
(j) During the period referred to in paragraph (i), to furnish to you
as soon as available a copy of each report or proxy statement of the
Company mailed to the security holders of the Company or filed with the
Commission and such other publicly available information concerning the
Company and its subsidiaries as you may reasonably request.
(k) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Securities Act of
the Registration Statement (including financial statements and exhibits),
each preliminary prospectus and all amendments and supplements to any of
them prior
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to or during the period specified in paragraph (e), (ii) the printing and
delivery of the Prospectus and all amendments or supplements to it during
the period specified in paragraph (e), (iii) the printing and delivery of
this Agreement, the Preliminary and Supplemental Blue Sky Memoranda and all
other agreements, memoranda, correspondence and other documents printed and
delivered in connection with the offering of the Securities (including in
each case any disbursements of counsel for the Underwriters relating to
such printing and delivery), (iv) the registration or qualification of the
Securities for offer and sale under the securities or Blue Sky laws of the
several states (including in each case the fees and disbursements of
counsel for the Underwriters relating to such registration or qualification
and memoranda relating thereto), (v) filings and clearance with the
National Association of Securities Dealers, Inc. in connection with the
offering, (vi) furnishing such copies of the Registration Statement, the
Prospectus and all amendments and supplements thereto as may be requested
for use in connection with the offering or sale of the Securities by the
Underwriters or by dealers to whom Securities may be sold, (vii) the rating
agencies in connection with the rating of the Securities, and (viii) the
preparation, issuance, execution, authentication and delivery of the
Securities, including any expenses of the Trustee.
(l) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company or warrants to
purchase debt securities of the Company substantially similar to the
Securities (other than (i) the Securities and (ii) commercial paper issued
in the ordinary course of business), without your prior written consent.
(m) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company
prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Securities.
6. Representations and Warranties of the Company. The Company
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represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each part of the Registration Statement, when such part
became effective, did not contain and each such part, as amended or
supplemented, if applicable, as of the date such amendment becomes
effective or such supplement is filed with the Commission, as the case may
be, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) the
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Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, as of the date such amendment becomes
effective or such supplement is filed with the Commission, as the case may
be, will comply in all material respects with the Securities Act and the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
(iii) the Prospectus does not contain and, as amended or supplemented, if
applicable, as of the date such amendment becomes effective or such
supplement is filed with the Commission, as the case may be, will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph (b) do not apply
to statements or omissions in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the Company
in writing by such Underwriter expressly for use therein.
(c) The Company and each of its subsidiaries that is a "Significant
Subsidiary" within the meaning of such term as defined in Rule 1-02 of
Regulation S-X of the Commission and Capital One, F.S.B. (the "Significant
Subsidiaries") has been duly incorporated, is validly existing as a
corporation (or, in the case of Capital One Bank, as a bank chartered under
the laws of Virginia, and in the case of Capital One, F.S.B., as a federal
savings bank chartered under the federal laws of the United States) in good
standing under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as it is currently
being conducted and to own, lease and operate its properties, and each is
duly qualified and is in good standing as a foreign corporation authorized
to do business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(d) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's Significant Subsidiaries have
been duly authorized and validly issued and are fully paid and non-
assessable, and are owned by the Company (other than directors' qualifying
shares of Capital One Bank), free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature.
(e) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to the Underwriters against payment therefor as provided by this
Agreement, will be entitled to the benefits of the Indenture, and will be
valid and binding obligations of the Company, enforceable in accordance
with their terms except as limited by (i) bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) equitable principles of
general applicability.
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(f) This Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company
enforceable in accordance with its terms (except as limited by (i)
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) equitable principles of general applicability and as
rights to indemnity and contribution hereunder may be limited by applicable
law).
(g) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company and
is a valid and binding agreement of the Company, enforceable in accordance
with its terms except as may be limited by (i) bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) equitable
principles of general applicability.
(h) The Securities conform as to legal matters to the description
thereof contained in the Prospectus.
(i) Neither the Company nor any of its Significant Subsidiaries is in
violation of its respective charter or by-laws or in default in any
material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or other evidence of
indebtedness material to the Company and its subsidiaries, taken as a
whole, or in any other agreement, indenture or instrument material to the
conduct of the business of the Company and its subsidiaries, taken as a
whole, to which the Company or any of its Significant Subsidiaries is a
party or by which it or any of its Significant Subsidiaries or their
respective property is bound.
(j) The execution, delivery and performance of this Agreement, the
Indenture and the Securities and compliance by the Company with all the
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body (except as such may be required under the
securities or Blue Sky laws of the various states) and will not conflict
with or constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of the Company or any of its
Significant Subsidiaries or any material indenture, agreement, or other
instrument to which it or any of its subsidiaries is a party or by which it
or any of its subsidiaries or their respective property is bound, or
violate or conflict with any laws, administrative regulations or rulings or
court decrees applicable to the Company, any of its subsidiaries or their
respective property.
(k) Except as otherwise set forth in the Prospectus, there are no
material legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any of their respective
property is the subject,
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and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated. No contract or document of a character
required to be described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement is not so described
or filed as required.
(l) The Company and each of its Significant Subsidiaries are in
compliance in all material respects with all laws administered by and
regulations of the Board of Governors of the Federal Reserve System, the
Federal Deposit Insurance Corporation, the Office of Thrift Supervision,
the Virginia State Corporation Commission and any other federal or state
bank regulatory authority with jurisdiction over the Company or any of its
subsidiaries (the "Bank Regulatory Authorities"), other than where such
failures to comply would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole. Neither the Company nor any of its
subsidiaries is a party to any written agreement or memorandum of
understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, or has adopted any
board resolutions at the request of, any Bank Regulatory Authority which
restricts materially the conduct of its business, or in any manner relates
to its capital adequacy (other than as described in the Prospectus), its
credit policies or its management, nor have any of them been advised by any
Bank Regulatory Authority that it is contemplating issuing or requesting
(or is considering the appropriateness of issuing or requesting) any such
order, decree, agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter or similar submission, or any such
board resolutions.
(m) The Company and each of its subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), as are necessary to own, lease and operate its
respective properties that are material to the Company and its
subsidiaries, taken as a whole, or to the conduct of the business of the
Company and its subsidiaries, taken as a whole; the Company and each of its
subsidiaries has fulfilled and performed all of its material obligations
with respect to such permits and no event has occurred which allows, or
after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the
holder of any such permit; and, except as described in the Prospectus, such
permits contain no restrictions that are materially burdensome to the
Company and its subsidiaries, taken as a whole.
(n) Ernst & Young LLP are independent public accountants with respect
to the Company as required by the Securities Act.
(o) The financial statements, together with related schedules and
notes forming part of the Registration Statement and the Prospectus (and
any amendment or supplement thereto), present fairly the consolidated
financial
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position, results of operations and cash flows of the Company and its
subsidiaries on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) is, in all material respects, accurately presented and prepared on
a basis consistent with such financial statements and the books and records
of the Company.
(p) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act").
7. Indemnification. (a) The Company agrees to indemnify and hold
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harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriters furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use therein; provided,
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however, that the foregoing indemnity agreement with respect to any preliminary
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prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages and liabilities and judgments
purchased Securities, or any person controlling such Underwriter, if a copy of
the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or on
behalf of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Securities
to such person, and if the Prospectus (as so amended and supplemented) would
have cured the defect giving rise to such loss, claim, damage, liability or
judgment.
(b) In case any action shall be brought against any Underwriter or
any person controlling such Underwriter, based upon any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment or supplement
thereto and with respect to which indemnity may be sought against the Company,
such Underwriter shall promptly notify the Company in writing and the Company
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified
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party and payment of all fees and expenses. Any Underwriter or any such
controlling person shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the Company, (ii) the Company shall have failed to
assume the defense and employ counsel or (iii) the named parties to any such
action (including any impleaded parties) include both such Underwriter or such
controlling person and the Company and such Underwriter or such controlling
person shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to those
available to the Company (in which case the Company shall not have the right to
assume the defense of such action on behalf of such Underwriter or such
controlling person, it being understood, however, that the Company shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses (as
are customary for New York City law firms in the case of retention of such a
firm) of more than one separate firm of attorneys (in addition to any local
counsel) for all such Underwriters and controlling persons, which firm shall be
designated in writing by ___________________________________ and that all such
reasonable fees and expenses (as are customary for New York City law firms in
the case of retention of such a firm) shall be reimbursed as they are incurred).
The Company shall not be liable for any settlement of any such action effected
without its written consent but if settled with the written consent of the
Company, the Company agrees to indemnify and hold harmless any Underwriter and
any such controlling person from and against any loss or liability by reason of
such settlement. Notwithstanding the immediately preceding sentence, if in any
case where the reasonable fees and expenses of counsel are at the expense of the
indemnifying party and an indemnified party shall have requested the
indemnifying party to reimburse the indemnified party for such fees and expenses
of counsel as incurred, such indemnifying party agrees that it shall be liable
for any settlement of any action effected without its written consent if (i)
such settlement is entered into more than ten business days after the receipt by
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall have failed to reimburse the indemnified party in accordance with
such request for reimbursement (except to the extent there is a good faith
dispute as to the reasonableness of the legal fees and legal expenses of counsel
retained by such indemnified party (taking into account in such case the
customary fees and expenses of New York City law firms for representations of
this type, if such indemnified party has retained such a firm)) prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement
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and any person controlling the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter but only with reference
to information relating to such Underwriter furnished in writing by or on behalf
of such Underwriter expressly for use in the Registration Statement, the
Prospectus or any preliminary prospectus. You confirm that the statements set
forth in the third paragraph and second sentence of the fourth paragraph under
the heading "Underwriting" in the prospectus supplement and the statements set
forth in the second to the last paragraph of the cover page of the prospectus
supplement constituting part of the Prospectus, were furnished in writing to the
Company by or on behalf of the Underwriters expressly for use therein. In case
any action shall be brought against the Company, any of its directors, any such
officer or any person controlling the Company based on the Registration
Statement, the Prospectus or any preliminary prospectus and in respect of which
indemnity may be sought against any Underwriter, the Underwriter shall have the
rights and duties given to the Company (except that if the Company shall have
assumed the defense thereof, such Underwriter shall not be required to do so,
but may employ separate counsel therein and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), and the Company, its directors, any such officers and any person
controlling the Company shall have the rights and duties given to the
Underwriter, by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Underwriters shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company, and the total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Securities, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
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The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7(d) are several in proportion to the
respective amount of Securities purchased by each of the Underwriters hereunder
and not joint.
8. Conditions of Underwriters' Obligations. The several obligations
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of the Underwriters to purchase the Securities under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date with the
same force and effect as if made on and as of the Closing Date.
(b) The Prospectus shall have been filed with the Commission in
accordance with Section 5(a), and at the Closing Date no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been commenced or
shall be pending before or contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have been any downgrading, nor
shall any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act.
(d) (i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective
material adverse
12
<PAGE>
change, in the condition, financial or otherwise, or in the earnings,
affairs or business prospects, whether or not arising in the ordinary
course of business, of the Company, (ii) since the date of the latest
balance sheet included in the Registration Statement and the Prospectus
there shall not have been any material adverse change, or any development
involving a prospective material adverse change, in the capital stock or in
the long-term debt of the Company from that set forth in the Registration
Statement and Prospectus, (iii) the Company and its subsidiaries shall have
no liability or obligation, direct or contingent, which is material to the
Company and its subsidiaries, taken as a whole, other than those reflected
in the Registration Statement and the Prospectus and (iv) on the Closing
Date you shall have received a certificate dated the Closing Date, signed
by the Chief Financial Officer and the Treasurer of the Company, confirming
the matters set forth in paragraphs (a), (b), (c) and (d) of this Section
8.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of John G. Finneran, Jr., Esq., Senior Vice President, General
Counsel and Corporate Secretary of the Company, to the effect that:
(i) the Company and each of its Significant Subsidiaries
has been duly incorporated, is validly existing as a corporation (or,
in the case of Capital One Bank, as a bank chartered under the laws of
Virginia, and in the case of Capital One, F.S.B., as a federal savings
bank chartered under the federal laws of the United States) in good
standing under the laws of its jurisdiction of incorporation and has
the corporate power and authority required to carry on its business as
it is currently being conducted and to own, lease and operate its
properties;
(ii) the Company and each of its Significant Subsidiaries
is duly qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the nature of
its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(iii) all of the outstanding shares of capital stock of,
or other ownership interests in, each of the Company's Significant
Subsidiaries have been duly and validly authorized and issued and are
fully paid and non-assessable, and are owned of record and, to the
best knowledge of such counsel, beneficially by the Company (other
than directors' qualifying shares of Capital One Bank), free and
clear, to the best of such counsel's knowledge, of any security
interest, claim, lien, encumbrance or adverse interest of any nature;
13
<PAGE>
(iv) the Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Company enforceable in accordance with their terms except as
limited by (a) bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) equitable principles of general
applicability;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as limited by (a)
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (b) equitable principles of general applicability;
(vii) the Registration Statement has become effective
under the Securities Act, no stop order suspending its effectiveness
has been issued and no proceedings for that purpose are, to the
knowledge of such counsel, pending before or contemplated by the
Commission;
(viii) the statements under the captions "Description of
Notes", and "Supervision, Regulation and Other Matters", "Description
of Debt Securities" in the Prospectus, as amended or supplemented, and
Item 15 of Part II of the Registration Statement, insofar as such
statements constitute a summary of legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings;
(ix) to the best of such counsel's knowledge, neither the
Company nor any of its Significant Subsidiaries is in violation of its
respective charter or by-laws or in default in any material respect in
the performance of any obligation, agreement or condition contained in
any bond, debenture, note or other evidence of indebtedness material
to the Company and its subsidiaries, taken as a whole, or in any other
agreement, indenture or instrument material to the conduct of the
business of the Company and its subsidiaries, taken as a whole, to
which the Company or any of its Significant Subsidiaries is a party or
by which it or any of its Significant Subsidiaries or their respective
property is bound;
(x) the execution, delivery and performance of this
Agreement, the Indenture and the Securities and compliance by the
Company with all
14
<PAGE>
the provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not require any
consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body
(except as such may be required under the securities or Blue Sky laws
of the various states) and will not conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the
charter or by-laws of the Company or any of its subsidiaries or any
material agreement, indenture or other instrument known to such
counsel to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or their respective
properties is bound, or materially violate or conflict with any laws,
administrative regulations or rulings or court decrees applicable to
the Company or any of its subsidiaries or their respective properties;
(xi) such counsel does not know of any legal or
governmental proceeding pending or threatened to which the Company or
any of its subsidiaries is a party or to which any of their respective
property is subject which is required to be described in the
Registration Statement or the Prospectus and is not so described, or
of any contract or other document which is required to be described in
the Registration Statement or the Prospectus or is required to be
filed as an exhibit to the Registration Statement which is not
described or filed as required;
(xii) to the best of such counsel's knowledge, the
Company and each of its Significant Subsidiaries are in compliance in
all material respects with all laws administered by applicable Bank
Regulatory Authorities, other than where such failures to comply would
not have a material adverse effect on the Company and its
subsidiaries, taken as a whole, and neither the Company nor any of its
subsidiaries is a party to any written agreement or memorandum of
understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, or has adopted
any board resolutions at the request of, any Bank Regulatory Authority
which restricts materially the conduct of its business, or in any
manner relates to its capital adequacy (other than as described in the
Prospectus), its credit policies or its management, nor have any of
them been advised by any Bank Regulatory Authority that it is
contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree,
agreement, memorandum of understanding, extraordinary supervisory
letter, commitment letter or similar submission, or any such board
resolutions.
(xiii) the Company and each of its subsidiaries has such
permits as are necessary to own, lease and operate its respective
properties that are material to the Company and its subsidiaries,
taken as a whole, or to the
15
<PAGE>
conduct of the business in the manner described in the Prospectus; to
the best of such counsel's knowledge, the Company and each of its
subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of
the rights of the holder of any such permit, subject in each case to
such qualification as may be set forth in the Prospectus; and, except
as described in the Prospectus, such permits contain no restrictions
that are materially burdensome to the Company and its subsidiaries,
taken as a whole;
(xiv) the Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act;
(xv) (1) the Registration Statement and the Prospectus and
any supplement or amendment thereto (except for financial statements
and other financial and statistical information contained therein as
to which no opinion need be expressed) comply as to form in all
material respects with the Securities Act, and (2) such counsel has no
reason to believe that (except for financial statements and other
financial and statistical information contained therein, as aforesaid,
and except for that part of the Registration Statement that
constitutes the Form T-1) the Registration Statement and the
prospectus included therein at the time the Registration Statement
became effective contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus, as amended or supplemented, if applicable (except for
financial statements and other financial and statistical information
contained therein, as aforesaid) contained any untrue statement of a
material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In giving such opinion with respect to the matters covered by clause
(xv) such counsel may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified.
The opinion of John G. Finneran, Jr., Esq., described in paragraph (e)
above shall be rendered to you at the request of the Company and shall so
state therein.
16
<PAGE>
(f) You shall have received on the Closing Date an opinion, dated the
Closing Date, of __________________________, counsel for the Underwriters,
as to the matters referred to in clauses (iv), (v), (vi), (viii) (but only
with respect to the statements under the caption "Description of Notes" and
"Description of Debt Securities") and (xv) of the foregoing paragraph (e).
In giving such opinion with respect to the matters covered by clause (xv)
such counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified.
(g) You shall have received a letter on and as of the Closing Date,
in form and substance satisfactory to you, from Ernst & Young LLP,
independent public accountants, with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus and substantially in the form and substance of the
letter delivered to you by Ernst & Young LLP on the date of this Agreement.
(h) The Company shall not have failed at or prior to the Closing Date
to perform or comply with any of the agreements herein contained and
required to be performed or complied with by the Company at or prior to the
Closing Date.
9. Effective Date of Agreement and Termination. This Agreement shall
-------------------------------------------
become effective upon the execution of this Agreement.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change (including, without
limitation, the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority) in the condition, financial or otherwise, of the Company
and its subsidiaries or the earnings, affairs, or business prospects of the
Company or any of its subsidiaries taken as a whole, whether or not arising in
the ordinary course of business, which would, in your judgment, make it
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus, (ii) any outbreak or escalation of hostilities
or other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in your judgment, is material and adverse and would, in your judgment, make it
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus, (iii) the suspension or material limitation of
trading in securities on the New York Stock Exchange, the American Stock
Exchange or the NASDAQ National Market System, or limitation on prices on any
such exchange or National Market System or (iv) the taking of any action by any
federal, state or local government or agency in respect of
17
<PAGE>
its monetary or fiscal affairs which in your opinion has a material adverse
effect on the financial markets in the United States.
If on the Closing Date any one or more of the Underwriters shall fail
or refuse to purchase the Securities which it or they have agreed to purchase
hereunder on such date and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters, as the case may be, agreed but
failed or refused to purchase is not more than one-tenth of the total principal
amount of Securities to be purchased on such date by all Underwriters, each non-
defaulting Underwriter shall be obligated severally, in the proportion which the
principal amount of Securities set forth opposite its name in Schedule I bears
to the total principal amount of Securities which all the non-defaulting
Underwriters, as the case may be, have agreed to purchase, or in such other
proportion as you may specify, to purchase the Securities which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the principal amount of
--------
Securities which any Underwriter has agreed to purchase pursuant to Section 2
hereof be increased pursuant to this Section 9 by an amount in excess of one-
ninth of such principal amount of Securities without the written consent of such
Underwriter. If on the Closing Date any Underwriter or Underwriters shall fail
or refuse to purchase Securities and the aggregate principal amount of
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Securities to be purchased on such date by all
Underwriters and arrangements satisfactory to you and the Company for purchase
of such Securities are not made within 48 hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter and the Company. In any such case which does not result in
termination of this Agreement, either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of any such Underwriter under this
Agreement.
10. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (a) if to the Company, to Capital One
Financial Corporation, 2980 Fairview Park Drive, Falls Church, Virginia 22042-
4525, Attention: Director of Capital Markets, and (b) if to any Underwriter, to
you c/o _____________________________________________________________________,
Attention: ____________________, or in any case to such other address as the
person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and directors and
of the several Underwriters set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive delivery
of and payment for the Securities, regardless of (i) any investigation, or
statement as to the results thereof, made
18
<PAGE>
by or on behalf of any Underwriter or by or on behalf of the Company, the
officers or directors of the Company or any controlling person of the Company,
(ii) acceptance of the Securities and payment for them hereunder and (iii)
termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Company to comply with the terms or
to fulfill any of the conditions of this Agreement, the Company agrees to
reimburse the several Underwriters for all out-of-pocket expenses (including the
fees and disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Securities from any of the several Underwriters merely because of
such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
19
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
CAPITAL ONE FINANCIAL CORPORATION
By: ________________________________
Name: _________________________
Title: _________________________
[Underwriter]
Acting on behalf of
itself and the several
Underwriters named in
Schedule I hereto
By: [Underwriter]
By: __________________________
Name:
Title:
20
<PAGE>
SCHEDULE I
----------
<TABLE>
<CAPTION>
Principal Amount of
Underwriters Securities to be Purchased
- --------------------------------------- --------------------------
<S> <C>
_______________________________________ $ __________
_______________________________________ $ __________
_______________________________________ $ __________
_______________________________________ $ __________
____________
Total $___________
============
</TABLE>
21
<PAGE>
Exhibit 5
August 12, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
I am General Counsel of Capital One Financial Corporation, a Delaware
corporation (the "Company"), and am delivering this opinion in connection with
the Company's Registration Statement on Form S-3 (the "Registration Statement")
filed with the Securities Exchange Commission pursuant to the Securities Act of
1933, as amended (the "Act"). The Registration Statement relates to
$1,000,000,000 in maximum aggregate offering price of (i) debt securities ("Debt
Securities"), which may be either senior unsecured debt securities ("Senior Debt
Securities") or subordinated unsecured debt securities ("Subordinated Debt
Securities"), (ii) shares of preferred stock, par value $.01 per share
("Preferred Stock"), which may be issued in the form of depositary shares
evidenced by depositary receipts ("Depositary Shares"), and (iii) shares of
common stock, par value $0.01 per share (the "Common Stock").
In arriving at the opinions expressed below, I have reviewed the originals
or copies, certified or otherwise identified to my satisfaction, of such
corporate records, agreements, documents and other instruments, and of
certificates of public officials, officers and representatives of the Company
and have made such inquiries of such officers and representatives, and I have
made such investigations of law, as I have deemed appropriate as the basis for
the opinions hereinafter set forth.
Based upon the foregoing and subject to the qualifications stated herein, I
am of the opinion that:
(1) The Company has authority pursuant to its Restated Certificate of
Incorporation to issue the shares of Common Stock to be registered under the
Registration Statement and (a) upon the adoption by the Board of Directors of a
resolution in form and content required by applicable law, (b) upon compliance
with the applicable provisions of the Act and such state "blue sky" or
securities laws as may be applicable and (c) upon issuance and delivery of and
<PAGE>
payment for such shares in the manner contemplated by the Registration Statement
and/or the applicable prospectus supplement, such shares of Common Stock will be
legally issued, fully paid and nonassessable.
(2) The Company has authority pursuant to its Restated Certificate of
Incorporation to issue the shares of Preferred Stock to be registered under the
Registration Statement and (a) upon the adoption by the Board of Directors of a
resolution in form and content required by applicable law, (b) upon compliance
with the applicable provisions of the Act and such state "blue sky" or
securities laws as may be applicable, (c) upon the adoption by the Company's
Board of Directors and the due execution and filing by the Company with the
Delaware Secretary of State of the Certificate of Designations establishing the
preferences, limitations, and relative voting and other rights of each series of
Preferred Stock prior to issuance thereof and (d) upon issuance and delivery of
and payment for such shares in the manner contemplated by the Registration
Statement and/or the applicable prospectus supplement, such shares of Preferred
Stock will be legally issued, fully paid and nonassessable.
(3) The Company has authority pursuant to its Restated Certificate of
Incorporation to issue Depositary Shares to be registered under the Registration
Statement and when (a) a deposit agreement substantially as described in the
Registration Statement has been duly executed and delivered by the Company and a
depositary, (b) the depositary receipts representing the Depositary Shares in
the form contemplated and authorized by such deposit agreement have been duly
executed and delivered by such depositary and delivered to and paid for by the
purchasers thereof in the manner contemplated by the Registration Statement
and/or the applicable prospectus supplement, (c) all corporate action necessary
for the issuance of such Depositary Shares and the underlying Preferred Stock
has been taken (including but not limited to action establishing the
preferences, limitations, and relative voting and other rights of such Preferred
Stock prior to issuance thereof) and (d) the applicable provisions of the Act
and such state "blue sky" or securities laws as may be applicable have been
complied with, such Depositary Shares will be legally issued and will entitle
the holders thereof to the rights specified in the deposit agreement relating to
such Depositary Shares.
(4) The Company has authority to issue the Debt Securities to be registered
under the Registration Statement and when (a) the applicable provisions of the
Act and such state "blue sky" or securities laws as may be applicable have been
complied with and (b) the Debt Securities have been issued and delivered for
value as contemplated by the Registration Statement and/or the applicable
prospectus supplement, such Debt Securities will be legally issued and will be
binding obligations of the Company.
To the extent that the obligations of the Company under the deposit
agreement or the obligations of the Company as obligor under an indenture may be
<PAGE>
dependent upon such matters, I have assumed for purposes of this opinion (i)
that the applicable depositary or trustee, as the case may be, is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and is duly qualified to engage in the activities
contemplated by the applicable deposit agreement or indenture, as the case may
be, (ii) that such deposit agreement or indenture, as the case may be, has been
duly authorized, executed and delivered by and constitutes the legal, valid and
binding obligation of such depositary or trustee, as the case may be,
enforceable in accordance with its respective terms, (iii) that such depositary
or trustee, as the case may be, is in compliance, generally and with respect to
acting as a depositary or trustee, respectively, under the applicable deposit
agreement or indenture, with all applicable laws and regulations and (iv) that
such depositary or trustee, as the case may be, has the requisite organizational
and legal power and authority to perform its obligations under the applicable
deposit agreement or indenture, as the case may be.
The opinions set forth above are subject to the following exceptions,
limitations and qualifications: (i) the effect of bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights and remedies of
creditors; (ii) the effect of general principles of equity, whether enforcement
is considered in a proceeding in equity or law, in the discretion of the court
before which any proceeding therefor may be brought; (iii) the unenforceability
under certain circumstances under law or court decisions of provisions providing
for the indemnification of or contribution to a party with respect to a
liability where such indemnification or contribution is contrary to public
policy; (iv) I express no opinion concerning the enforceability of the waiver of
rights or defenses contained in Section 514 of the Indenture; and (v) I express
no opinion with respect to whether acceleration of Debt Securities may affect
the collectibility of any portion of the stated principal amount thereof which
might be determined to constitute unearned interest thereon.
I am furnishing this opinion letter in connection with the Company's
registration of the Debt Securities, the Preferred Stock, including the
Depositary Shares, and the Common Stock under the Registration Statement. This
opinion is not to be used, circulated, quoted or otherwise referred to for any
other purpose.
Very truly yours,
/s/ John G. Finneran, Jr.
John G. Finneran, Jr.
Senior Vice President, General Counsel
and Corporate Secretary
<PAGE>
Exhibit 12
Capital One Financial Corporation
Computation of Earnings to Fixed Charges Ratios
For the Six Months Ended June 30, 1999 and 1998 and the
Years Ended December 31, 1998, 1997, 1996, 1995 and 1994
(dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30 Year Ended December 31
--------------------- ---------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
--------------------- ---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings
Income before income taxes (a) $ 273,963 $ 213,800 $ 443,921 $ 305,453 $ 248,480 $ 197,731 $ 146,827
Fixed Charges:
Interest expense 246,850 194,934 416,754 334,847 294,999 249,396 93,695
Amortization of debt discount
Rent representative of interest 10,005 4,676 10,095 9,430 4,123 4,050 1,121
Preferred stock dividends 3,427 3,765 7,530 7,002
--------------------- ---------------------------------------------------------
Total fixed charges (b) 260,282 203,375 434,379 351,279 299,122 253,446 94,816
Less: Interest expense on deposits 50,380 27,773 67,479 41,932 56,272 49,547 2,364
--------------------- ---------------------------------------------------------
Total fixed charges excluding interest
on deposits (c) 209,902 175,602 366,900 309,347 242,850 203,899 92,452
Total fixed charges excluding preferred
stock dividends (d) 256,855 199,610 426,849 344,277 299,122 253,446 94,816
Total fixed charges excluding interest
on deposits and preferred stock
dividends (e) 206,475 171,837 359,370 302,345 242,850 203,899 92,452
Earnings to fixed charges [(a)+(b)]/(b) 2.05 2.05 2.02 1.87 1.83 1.78 2.55
Earnings to fixed charges excluding deposits
[(a)+(c)]/(c) 2.31 2.22 2.21 1.99 2.02 1.97 2.59
Earnings to fixed charges excluding preferred
stock dividends [(a)+(d)]/(d) 2.07 2.07 2.04 1.89 1.83 1.78 2.55
Earnings to fixed charges excluding deposits
and preferred stock dividends (a) 2.33 2.24 2.24 2.01 2.02 1.97 2.59
</TABLE>
<PAGE>
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-XXXX) and Post-Effective Amendment No.
1 to the Registration Statement (No. 333-58577) and related Prospectuses of
Capital One Financial Corporation pertaining to the registration of Debt
Securities, Preferred Stock (including Depositary Shares) and Common Stock of
Capital One Financial Corporation and to the incorporation by reference therein
of our report dated January 19, 1999, with respect to the consolidated
financial statements of Capital One Financial Corporation incorporated by
reference in its Annual Report (Form 10-K) for the year ended December 31, 1998,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Washington, D.C.
August 12, 1999
