Filed Pursuant to Rule 424(b)(5)
Registration No. 333-203125
CALCULATION OF REGISTRATION FEE
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Title Of Each Class Of
Securities To Be Registered |
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Amount
To Be
Registered(1) |
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Proposed
Maximum Offering
Price Per Unit(2) |
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Proposed
Maximum Aggregate
Offering Price(2) |
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Amount of Registration Fee(3) |
Common Stock |
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7,333,393 |
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$79.95 |
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$586,304,770.35 |
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$68,128.61 |
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(1) |
Pursuant to Rule 416 under the Securities Act, this registration statement shall include any additional shares that may become issuable as a result of any stock split, stock dividend, recapitalization or other similar
transaction effected without the receipt of consideration that results in an increase in the number of Capital Ones outstanding common stock (the Common Stock). |
(2) |
Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(c) under the Securities Act. The price and fee are computed based upon the average of the high and low sale prices
of the Common Stock on April 1, 2015, as reported on the New York Stock Exchange. |
(3) |
Calculated in accordance with Section 6 of the Securities Act and Rule 457 under the Securities Act by multiplying .00011620 and the proposed maximum aggregate offering price. |
7,500,000 Shares
Common Stock, Par Value $.01 Per Share
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
To the holders of Capital One Financial Corporation common stock:
We are pleased to send you this prospectus supplement describing our Dividend Reinvestment and Stock Purchase Plan (the Plan). The Plan provides
you with a simple and convenient method to purchase additional shares of Capital One common stock.
Significant Plan Features
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Automatically reinvest your cash dividends to purchase additional shares of Capital One common stock. |
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Purchase additional shares through monthly optional cash investments of $50 to $10,000. We may permit greater optional cash investments. |
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Generally, no processing fees or service fees for purchases under the Plan. |
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Participate if you hold shares either in your name or through a broker or nominee. |
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Receive regular statements of your account to simplify your recordkeeping. |
This prospectus
supplement contains complete information in an easy-to-read, question-and-answer format, and we urge you to read it carefully. You should keep this prospectus supplement for future reference.
Your participation is entirely voluntary, and you may begin or discontinue your participation at any time.
Capital One Financial Corporations common stock is listed on the New York Stock Exchange under the symbol COF.
As of April 8, 2015, we have sold 166,607 shares under the Plan. Accordingly, we may offer and sell up to 7,333,393 shares of our common
stock under the Plan.
Thank you for your continued interest in Capital One.
Neither the Securities and Exchange Commission nor any state securities commission has approved these securities or determined that this Prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is April 9, 2015
You should rely only on the information contained or incorporated by reference in this
prospectus supplement. We have not authorized anyone to provide you with different information.
We are not offering our common
stock in any state where the offer is not permitted.
TABLE OF CONTENTS
Prospectus
ABOUT THIS PROSPECTUS SUPPLEMENT
We provide information to you about the common stock in two separate documents: (1) this prospectus supplement, which describes the
specific terms of the Plan and also adds to and updates information contained in the accompanying prospectus and the documents incorporated by reference in that prospectus and (2) the accompanying prospectus, which provides general information
about securities we may offer from time to time, including securities other than the common stock being offered by this prospectus supplement. If information in this prospectus supplement is inconsistent with the accompanying prospectus, you should
rely on this prospectus supplement. It is important for you to read and consider all of the information contained in this prospectus supplement and the accompanying prospectus in making your investment decision.
Unless the context requires otherwise, references to Capital One, we, our, or us in this
prospectus supplement refer to Capital One Financial Corporation, a Delaware corporation.
DESCRIPTION OF THE
PLAN
PURPOSE
1. What is the purpose of the Plan?
The primary purpose of the Plan is to provide Capital One shareholders with a convenient and economical method of investing cash dividends or
making optional cash investments in additional shares of Capital One common stock, generally without payment of any processing fees or service fees in connection with such purchases. In addition, purchases of shares directly from Capital One
pursuant to the Plan will provide Capital One with additional capital for general corporate purposes.
PARTICIPATION OPTIONS
2. What options are available under the Plan?
If you are a registered holder or a beneficial owner of Capital One common stock and elect to participate in the Plan (a
Participant), you may have cash dividends on all or a portion of your shares automatically reinvested in Capital One common stock. If you wish, you may also make optional cash investments to purchase Capital One common stock, subject to
a minimum investment of $50 per month and a maximum investment of $10,000 per month. Capital One may permit greater optional cash investments. See Question 13. You may make optional cash investments even if you do not elect to reinvest dividends on
shares of common stock credited to your account under the Plan.
ADVANTAGES AND DISADVANTAGES
3. What are the advantages and disadvantages of the Plan?
The primary advantages of the Plan are:
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You may have the cash dividends on all or a portion of your Capital One common stock automatically reinvested in additional shares of Capital One common stock. |
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You may invest in additional shares of Capital One common stock by making optional cash investments, subject to an individual minimum investment of $50 per month and an individual maximum investment of $10,000 per
month. |
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Optional cash investments in excess of $10,000 per month may be made with the permission of Capital One at a discount which will be from 0% to 5%. |
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Generally, you pay no processing fees or service fees in connection with your purchases under the Plan. See Question 24. |
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Your reinvested cash dividends and optional cash investments will be fully invested because the Plan provides for fractional shares to be credited to your account. Additionally, dividends on such fractional shares, as
well as whole shares held by you in certificated form or credited to your account, will be automatically reinvested in additional shares and credited to your account. |
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You will avoid cumbersome safekeeping of stock certificates for shares credited to your account and you may also deposit certificated shares, represented by stock certificates, held by you and registered in your name,
thereby avoiding the need for safekeeping of certificates. |
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Periodic statements reflecting all current activity, including shares purchased and your latest Plan account balance, will simplify your recordkeeping. |
The primary disadvantages of the Plan are:
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Because the date by which the Plan administrator must receive your optional cash investment is two business days prior to the Investment Date (as defined herein) for such investments, your investments may be exposed to
changes in market conditions. See Question 12. |
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The Purchase Price (as defined herein) for shares under the Plan may exceed the price of acquiring shares of Capital One common stock (including transaction costs) on the open market at any particular time on the
related Investment Date. See Questions 9 and 11. |
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No interest will be paid on funds held by the administrator of the Plan pending investment. See Question 12. |
ADMINISTRATION
4. Who
will administer the Plan?
The Plan will be administered by Computershare Trust Company, N.A., or such successor administrator as
Capital One may designate (Computershare or the Administrator). The Administrator acts as agent for Participants, keeps records of Participants accounts, sends regular account statements to Participants, and performs
other duties relating to the Plan. Shares purchased for each Participant under the Plan will be recorded in uncertificated form in each Participants account by the Administrator, unless and until a Participant requests that a stock certificate
for his or her shares be issued. See Question 16. Computershare also serves as dividend disbursement agent, transfer agent, and registrar for Capital Ones common stock. Correspondence concerning the Plan should be sent to:
Computershare
Capital One Dividend Reinvestment and Stock Purchase Plan
P.O. Box 43078
Providence, Rhode Island 02940-3078
Optional cash investments of checks should be mailed to:
Computershare
Computershare Investor Services
P.O. Box 6006
Carol Stream, IL 60197-6006
or, if using overnight courier service:
Computershare
Computershare Investor Services
Mail Stop 1A
250 Royall Street
Canton, Massachusetts 02021
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Please indicate Capital One and your account number in all correspondence.
For general questions about the Plan, the sale of Plan shares and issuance of stock certificates, you may contact Computershare at
1-888-985-2057 (inside the U.S. and Canada) or 1-781-575-2726 (outside the U.S. and Canada).
An automated phone system is available 24
hours a day, 7 days a week. Customer service representatives are available from 9:00 a.m. to 5:00 p.m. Eastern time each business day.
TDD: 1-800-952-9245. A telecommunications device for the hearing impaired is available.
Foreign language translation service for more than 140 languages is available.
Unless you are participating in the Plan through your bank, broker or nominee, you can obtain information about your Capital One account via
the Internet on Computershares web site at www.computershare.com/investor. Through Computershares web site, you can access your share balance, sell shares, request a stock certificate and obtain on-line forms and other information
about your account. To gain access, you will be required to use a password, which is included on your dividend statement, or you can request your password by calling 1-888-985-2057.
If you wish to contact Capital One directly, you may write or call:
Capital One Financial Corporation
Investor Relations Department
1680 Capital One Drive
Suite 1300
McLean, Virginia 22102-3491
1-703-720-1000
PARTICIPATION
5. Who is eligible to participate?
You may participate in the Plan if you qualify as either of the following: (a) you are a registered holder, i.e., a
shareholder whose shares of Capital One common stock are registered in the stock transfer books of Capital One in your name or (b) you are a beneficial owner, a shareholder who has beneficial ownership of shares of Capital One
common stock that are registered in a name other than your name (for example, in the name of a broker, bank or other nominee). Registered holders may participate in the Plan directly. If you are a beneficial owner, you must either become a
registered holder by having such shares transferred into your own name or make arrangements with your broker, bank or other nominee to participate on your behalf. See Question 6.
If you hold shares with a broker, you can participate by instructing the broker to reregister some or all of the shares into your name. Simply
instruct your broker to move all or some of your shares electronically through the Direct Registration System from your brokerage account to a new book-entry account at Computershare. Please contact your broker for more information. Once your broker
transfers your shares into your name electronically, your Direct Registration account is automatically set up and you can participate in the Plan. You may also instruct your broker to participate in the Plan on your behalf.
Your right to participate in the Plan is not transferable to another person apart from a transfer of your underlying shares of Capital One
common stock. Capital One reserves the right to exclude from participation in the Plan persons who utilize the Plan to engage in short-term trading activities which cause aberrations in the trading volume of Capital One common stock.
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Shareholders who reside in jurisdictions in which it is unlawful for Capital One to permit their
participation are not eligible to participate in the Plan.
ENROLLMENT
6. How do I enroll in the Plan and become a Participant?
If you are a registered holder of Capital One common stock, you may enroll in the Plan and become a Participant by completing and signing an
Enrollment Form and returning it to the Administrator at the address set forth in Question 4. An Enrollment Form and copies of this prospectus supplement may also be obtained at any time at your request to the Administrator at the same address.
Registered holders may also enroll in the Plan through the Internet by accessing their account at www.computershare.com/investor. If
you have your shares registered in more than one name (i.e., joint tenants, trustees), all registered holders of such shares must sign the Enrollment Form exactly as their names appear on the account registration.
If you are a beneficial owner of Capital One common stock, you must either become a registered holder by having such shares transferred into
your own name or instruct your broker, bank or other nominee in whose name your shares are held to participate in the Plan on your behalf.
You may enroll in the Plan at any time. Once enrolled, you remain enrolled without further action on your part until you discontinue your
participation or until the Plan is terminated. See Question 20 regarding discontinuing dividend reinvestment under the Plan and Question 27 regarding termination of the Plan. However, if there is any subsequent change in the manner in which your
name appears on your certificate(s), you should contact the Administrator for further instructions. If you wish to change your participation at any time, please contact the Administrator as described in Question 4.
7. What does the Enrollment Form provide?
The Enrollment Form appoints the Administrator as your agent for purposes of the Plan. It also directs Capital One to pay dividends to the
Administrator for purchase of additional shares of Capital One common stock as you elect from the three options shown on the Enrollment Form and explained below. You must place an X in the appropriate box to indicate your investment
election. Under each of these options, you may make optional cash investments at any time. You may change your reinvestment election at any time by submitting a revised Enrollment Form to the Administrator or by accessing your account online at
www.computershare.com/investor. If you return a properly executed Enrollment Form to the Administrator without electing an investment option, you will be enrolled as having selected Full Dividend Reinvestment.
(1) Full Dividend Reinvestment
This option directs the Administrator to reinvest, in accordance with the Plan, all cash dividends on all shares of Capital One common stock
then or subsequently registered in your name and held by you in certificated form or credited to your account in book-entry form.
(2) Partial Dividends Paid in Cash
This option directs the Administrator to pay to you, in accordance with the Plan, cash dividends on the number of shares of Capital One common
stock which you designate in the appropriate space on the Enrollment Form. Dividends paid on all other shares registered in your name and credited to your account will be reinvested in accordance with the Plan.
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(3) All Dividends Paid in Cash (No Dividend Reinvestment)
This option directs the Administrator to send you, in accordance with the Plan, cash dividends in the usual manner on all of your shares of
Capital One common stock registered in your name and credited to your account, including shares subsequently purchased through optional cash investments.
8. When will my participation in the Plan begin?
Participation as to dividend reinvestment will commence with the next dividend Investment Date (as defined below) after receipt of the
Enrollment Form, provided it is received by the Administrator by the Record Date (as defined below) for such dividend Investment Date. If the Enrollment Form is received after such Record Date, participation as to dividend reinvestment will be
delayed until the following dividend Investment Date.
Participation as to optional cash investments will commence with the next
Investment Date after receipt of the authorization therefor and the funds to be invested. See Question 9 to determine the applicable Record Date for dividend reinvestments and the applicable Investment Dates for dividend reinvestments and optional
cash investments.
PURCHASES
9. When will shares be purchased under the Plan?
When there is a cash dividend declared by the Board of Directors, reinvested dividends under the Plan will be used to purchase shares of
Capital One common stock beginning on the dividend payment date declared by the Board of Directors or if such day is not a trading day, the first trading day immediately following such date (in such case, the Investment Date). The
Record Date for such dividend payments will be the record date declared by the Board of Directors. Optional cash investments of $10,000 or less will be invested monthly, beginning on the 20th of each month, or if such day is not a
trading day, the first trading day following the 20th, or, in the case of shares of Capital One common stock purchased on the open market, as soon thereafter as determined by the Administrator (in each such case, the Investment Date).
If Capital One approves a Request for Waiver (as defined below) for an optional cash investment of more than $10,000, then such cash
investment will be used to purchase shares of Capital One common stock on one or more dates and at a Purchase Price (as defined below) calculated as specified in the Request for Waiver (in each such case, an Investment Date), subject to
any Threshold Price (as defined below) that Capital One may set. See Questions 11 and 13 for more information on Requests for Waiver, Purchase Price and Threshold Prices.
Dividend payment dates historically have occurred on or about the 20th day of each February, May, August, and November. It is expected that
the past pattern with respect to timing of dividend payment dates generally will be followed in the future if the Board of Directors elects to declare dividends in a given quarter.
There can be no assurance as to the declaration or payment of dividends, and nothing contained in the Plan obligates Capital One to declare or pay any
dividends. The Plan does not represent a change in Capital Ones dividend policy or a guarantee of future dividends, which will continue to be determined by the Board of Directors based upon Capital Ones earnings, financial condition, and
other factors.
10. What is the source of shares to be purchased under the Plan?
All dividends reinvested through the Plan and all optional cash investments will be used to purchase newly issued shares directly from Capital
One, treasury shares held by Capital One, shares through open market purchases, or a combination of the above. Newly issued shares purchased directly from Capital One will consist of authorized but unissued shares of Capital One common
stock.
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11. At what price will shares be purchased?
All shares acquired directly from Capital One with reinvested dividends or optional cash investments of $10,000 or less will be acquired at a
price to you (in such case, the Purchase Price) of the average of the daily high and low sales prices, computed up to six decimal places, if necessary, of Capital Ones common stock as reported on the New York Stock Exchange (the
Exchange) on the Investment Date. In such case, the Pricing Period is the Investment Date.
Shares of Capital One
common stock purchased pursuant to a Request for Waiver for optional cash investments of more than $10,000 will be acquired at a price to you (in such case, the Purchase Price) equal to the average of the high and low sales prices,
computed up to six decimal places, if necessary, of Capital Ones common stock on the Exchange for each day during the Pricing Period on which trades are reported on the Exchange (each a Trading Day). The Pricing Period for optional
investments made pursuant to an approved Request for Waiver will be the day or days set forth in the Request for Waiver, which may be the Investment Date or up to ten Trading Days prior to and including an Investment Date. A Request for Waiver may
specify one or more Investment Dates. Shares purchased with optional cash investments of more than $10,000 pursuant to a Request for Waiver may be purchased at a discount from the Purchase Price and may be subject to a Threshold Price, as more fully
described in Question 13.
All shares purchased under the Plan through open market purchases will be acquired as soon as practicable
beginning on the Investment Date at a price (in such case, the Purchase Price) to you of the weighted average purchase price, computed up to six decimal places, if necessary, paid by the Administrator for Capital One common stock
purchased by the Plan through such open market purchases. Purchases on the open market will begin on the Investment Date and will be completed no later than 30 days from such date for reinvestment of dividends and 35 days from such date for optional
cash investments, except where completion at a later date is necessary or advisable under any applicable federal securities laws. Such purchases may be made on any securities exchange where such shares are traded, in the over-the-counter market, or
by negotiated transactions and may be subject to such terms with respect to price, delivery, etc. to which the Administrator may agree. Neither Capital One nor the Participant shall have any authority or power to direct the time or price at which
shares may be purchased, or the selection of the broker or dealer through or from whom purchases are to be made.
While Capital One will
pay all processing fees on shares purchased on the open market, for tax purposes, these fees will be considered as additional dividend income to you. These fees and the resulting additional dividend income are expected to amount to less than 1/4th
of 1% of the purchase price of the shares (that is, less than 25 cents per $100 invested). See Question 21. Processing fees include any applicable brokerage commissions the Administrator is required to pay.
12. How are optional cash investments made?
All registered holders, including brokers, banks, and other nominees with respect to shares registered in their name on behalf of a beneficial
owner, who have submitted a signed Enrollment Form are eligible to make optional cash investments. A broker, bank or other nominee, as holder on behalf of a beneficial owner, may utilize an Enrollment Form for optional cash investments unless it
holds the shares in the name of a securities depository.
You may make optional cash investments in Capital One common stock by sending to
Computershare a check for the purchase of additional shares. All optional cash investments made by check should be made payable to ComputershareCapital One in U.S. dollars and drawn on a U.S. bank. If you are not in the U.S.,
contact your bank to verify that they can provide you with a check that clears through a U.S. bank and can print the dollar amount in U.S. funds. Due to the longer clearance period, we are unable to accept checks clearing through non-U.S. banks. The
Administrator will not accept cash, money orders, travelers checks or third party checks. All checks should be sent to the Administrator at the address listed on the tear-off form section attached to each account statement you receive, or if
making an investment when enrolling, with your enrollment form.
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The Administrator will apply all optional cash investments which are received at least two
business days prior to the commencement of the Pricing Period for the relevant Investment Date to the purchase of shares of Capital One common stock on such Investment Date, or if shares are acquired on the open market, as soon as practicable on or
after such Investment Date. NO INTEREST WILL BE EARNED ON OPTIONAL CASH INVESTMENTS HELD PENDING INVESTMENT. IF YOU HAVE ANY QUESTIONS REGARDING THE INVESTMENT DATE, YOU SHOULD CONTACT THE ADMINISTRATOR AT THE ADDRESS OR PHONE NUMBER SET FORTH IN
QUESTION 4.
At any time, Participants who are registered owners of Capital One common stock may make optional cash investments through
the Administrators website, www.computershare.com/investor, by authorizing a one-time online bank debit from an account at a U.S. bank or financial institution. You should refer to the online confirmation for the account debit
date and investment date.
Participants who are registered owners of Capital One common stock may also make optional cash investments by
automatic monthly investments of a specified amount (not less than $50 or more than $10,000 per month) by electronic funds transfer from a predesignated U.S. bank account. A $1.00 transaction fee will be deducted from the amount withdrawn from the
account prior to each investment. To initiate automatic monthly deductions, the Participant must complete and sign a Direct Debit Authorization form and return it to the Administrator together with a voided blank check or a deposit form for the
account from which funds are to be drawn. Direct Debit Authorization forms may be obtained from the Administrator. You may also initiate automatic monthly investments by accessing your account through the Internet at
www.computershare.com/investor. Forms will be processed and become effective as promptly as practicable; however, you should allow four to six weeks for the first investment to be initiated using the automatic investment feature.
Once automatic monthly investment is initiated, funds will be drawn from the Participants designated bank account on the 15th of each
month (or the next banking business day if the 15th is not a banking business day) for optional cash investments of $10,000 or less. Participants may change their automatic monthly investment by completing and submitting to the Administrator a new
Direct Debit Authorization form or by accessing their account through the Internet at www.computershare.com/investor. To be effective with respect to a particular Investment Date, however, the new instructions must be received by the
Administrator at least six business days prior to such Investment Date. Automatic deductions will continue indefinitely until you notify the Administrator in writing or through the Internet that the automatic deductions are to stop.
You should be aware that since investments under the Plan are made as of specified dates, you lose any advantage that otherwise might be
available from being able to select the timing of your investment. Neither the Capital One nor the Administrator can assure a profit or protect against a loss on shares of Capital One common stock purchased under the Plan.
When corresponding with the Administrator, please be sure to include your daytime telephone number and area code.
In the event that any check, draft or electronic funds transfer a Participant may tender or order as payment to the Administrator to purchase
Capital One common stock is dishonored, refused or returned, the Participant agrees that the purchased shares when credited to such Participants account may be sold, on the Administrators order without the Participants consent or
approval, to satisfy the amount owing on the purchase. The amount owing will include the purchase price paid, any purchase and sale transaction fees, any brokerage commissions and the Administrators returned check or failed
electronic payment fee of $20.00. If the sale proceeds of purchased shares are insufficient to satisfy the amount owing, the Participant authorizes the Administrator to sell additional shares then credited to the Participants account as
necessary to cover the amount owing, without further consent or authorization from the Participant. The Administrator may sell shares to cover an amount owing as a result of a Participants order in any manner consistent with applicable
securities laws. Any sale for that purpose in a national securities market would be commercially reasonable. The Participant grants the Administrator a security interest in
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all shares credited to the Participants account including securities subsequently acquired and held or tendered for deposit, for purposes of securing any amount owing as described in this
paragraph.
13. What limitations apply to optional cash investments?
Minimum/Maximum Limits. Optional cash investments are subject to a $50 minimum per month, and Capital One reserves the right to
refuse to accept any optional cash investment in excess of $10,000 per month from any Participant or any related or associated group of Participants. Optional cash investments of less than $50 and that portion of any optional cash investment which
exceeds the $10,000 monthly purchase limit, unless such limit has been waived, are subject to return to the Participant, without interest. Capital One reserves the right to waive such limits on optional cash investments in its sole discretion.
Request for Waiver. Optional cash investments in excess of $10,000 per month may only be made pursuant to a written request for
waiver (a Request for Waiver) approved by Capital One. There is no pre-established maximum limit applicable to optional cash investments that may be made pursuant to approved Requests for Waiver. Capital One expects to grant Requests for
Waiver to financial intermediaries, including brokers and dealers, and other Participants from time to time. To submit an optional cash payment in excess of $10,000 for any monthly period, a Participant must submit a written Request for Waiver,
specifying the proposed investment amount(s), Pricing Period(s), calculation of the Purchase Price(s) and Investment Date(s), no later than two (2) business days prior to the commencement of the requested Pricing Period(s). It is solely within
Capital Ones discretion as to whether any such approval in excess of the allowable maximum amounts will be granted. In deciding whether to approve such a request, Capital One will consider relevant factors including, but not limited to
(a) whether it is then selling newly issued shares of common stock and/or treasury shares or acquiring shares for the Plan through open market purchases or privately negotiated transactions, (b) Capital Ones need for additional
funds, (c) the attractiveness of obtaining such funds by the sale of common stock by comparison to other sources of funds, (d) the purchase price likely to apply to any sale of common stock, (e) the Participant submitting the request,
including the extent and nature of such Participants prior participation in the Plan, and the number of shares of Capital One common stock held of record and/or beneficially by such Participant, and (f) the aggregate amount, if any, of
optional cash investments in excess of the allowable maximum amounts for which requests have been submitted by all Participants. If such requests are submitted for any monthly period for an aggregate amount in excess of the amount Capital One is
willing to accept, Capital One may honor such requests in order of receipt, pro rata or by any other method which Capital One determines to be appropriate.
To obtain a Request for Waiver form, please contact Capital One at 1-703-720-2218. Completed Requests for Waiver should be sent to Capital One
at 1680 Capital One Drive, McLean, VA 22102, Attention: Treasurer or by facsimile to 1-703-720-2165. If Capital One approves your Request for Waiver, then you must send the Administrator a copy of the written waiver approval, together with your
optional cash investment in good funds, by 2:00 p.m., Eastern time, on or before the business day prior to the first day of the relevant Pricing Period described in the approved Request for Waiver.
The Plan may also be used by Capital One to raise additional capital through the sale each month of a portion of the shares available for
issuance under the Plan to owners of shares (including brokers or dealers) who, in connection with any resales of such shares, may be deemed to be underwriters. These sales will be effected through Capital Ones ability to approve Requests for
Waiver. To the extent shares are purchased from Capital One under the Plan, Capital One will receive additional funds for general corporate purposes. The Plan is intended for the benefit of investors in Capital One and not for individuals or
investors who engage in transactions which may cause aberrations in the price or trading volume of Capital One common stock.
Capital One
reserves the rights to modify, suspend or discontinue participation in the Plan by otherwise eligible holders or beneficial owners of Capital One common stock in order to eliminate practices which are not consistent with the purposes of the Plan.
Threshold Price. Unless it waives its right to do so, Capital One may establish for any Investment Date a minimum price (the
Threshold Price) for purchasing shares with optional cash investments made pursuant to
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written Requests for Waiver. Capital One will, at least two (2) business days prior to the commencement of the Pricing Period for an Investment Date, determine whether to establish a
Threshold Price and, if a Threshold Price is established, its amount and so notify the Administrator. The determination whether to establish a Threshold Price and, if a Threshold Price is established, its amount will be made by Capital One at its
discretion after a review of current market conditions, the level of participation in the Plan, and current and projected capital needs.
The Threshold Price for optional cash investments made pursuant to written Requests for Waiver, if established for any Investment Date, will
be a stated dollar amount that the average of the high and low sales prices of Capital Ones common stock on the Exchange for each Trading Day of the relevant Pricing Period (not adjusted for discounts, if any) must equal or exceed. If the
Threshold Price is not satisfied for a Trading Day in the Pricing Period, then that Trading Day and the trading prices for that day will be excluded from that Pricing Period and a pro rata portion of the Participants cash will be returned,
without interest. Thus, for example, if an approved Request for Waiver specifies that the Pricing Period is one day (that is, the Investment Date) and the Threshold Price is not satisfied on that day, then no investment will be made and the
Participants cash will be returned in full. Likewise, if the Threshold Price is not satisfied for two of the five Trading Days in a particular Pricing Period, then the average sales price for purchases and the amount of optional cash
investments which may be invested will be based upon the remaining three Trading Days when the Threshold Price is satisfied. In such case, for each Trading Day on which the Threshold Price is not satisfied, one-fifth of the optional cash investment
made by a Participant pursuant to a Request for Waiver would be returned to such Participant, without interest, as soon as practicable after the applicable Investment Date. Similarly, a pro rata portion of the Participants cash will be
returned if there are fewer Trading Days prior to the Investment Date than are specified as the Pricing Period in the Request for Waiver or if no trades in Capital One common stock are reported on the Exchange for a Trading Day during the Pricing
Period, due to a market disruption or for any other reason.
The Threshold Price concept and return procedure discussed above apply only
to optional cash investments made pursuant to written Requests for Waiver. Setting a Threshold Price for an Investment Date shall not affect the setting of a Threshold Price for any subsequent Investment Date.
For any particular Investment Date, Capital One may waive its right to set a Threshold Price for optional cash investments that exceed
$10,000. Neither Capital One nor the Administrator shall be required to provide any written notice to Participants as to the Threshold Price for any Investment Date. Participants, however, may ascertain whether the Threshold Price applicable to an
Investment Date pursuant to a Request for Waiver has been set or waived, as applicable, by telephoning Capital One at 1-703-720-2218.
Waiver Discount. At least two (2) business days prior to the commencement of each Pricing Period, Capital One may, in its
sole discretion, establish a discount from the Purchase Price applicable to optional cash investments made pursuant to written Requests for Waiver. Such discount (the Waiver Discount) will be between 0% and 5% of the Purchase Price and
may vary for each Investment Date, but once established will apply uniformly to the full amount of all optional cash investments made pursuant to Requests for Waiver for that Investment Date. The Waiver Discount will be established in Capital
Ones sole discretion after a review of current market conditions, the level of participation in the Plan, and current and projected capital needs. Participants may ascertain whether a Waiver Discount is applicable to an Investment Date by
telephoning Capital One at 1-703-720-2218. Setting a Waiver Discount for a particular Investment Date shall not affect the setting of a Waiver Discount for any subsequent Investment Date. The Waiver Discount feature discussed above applies only to
optional cash investments made pursuant to written Requests for Waiver and does not apply to the reinvestment of cash dividends or optional cash investments of $10,000 or less.
14. Under what circumstances will optional cash investments be returned?
Optional cash investments of less than $50 and that portion of any optional cash investment which exceeds the allowable maximum amount (unless
the subject of a Request for Waiver that has been granted by Capital One) will be returned promptly without interest. See Question 13 regarding the minimum/maximum monthly
S-11
purchase limits and the return of payments if those limits are not satisfied. In addition, the portion of any optional cash investments in excess of $10,000 pursuant to Requests for Waiver will
be returned following any Investment Date on which the Threshold Price is not satisfied. See Question 13 regarding the Threshold Price and the return of such investments.
15. What if I have more than one account?
For the purpose of the limitations discussed in Question 13, Capital One may aggregate all reinvestment dividends and optional cash investments
for Participants with more than one account using the same Social Security or Taxpayer Identification Number. Participants unable to supply a Social Security or Taxpayer Identification Number may be limited by Capital One to only one account.
Also for the purpose of such limitations, all accounts which Capital One believes to be under common control or management or to have common
ultimate beneficial ownership may be aggregated. Unless Capital One has determined that reinvestment of dividends and optional cash investments for each such account would be consistent with the purposes of the Plan, Capital One will have the right
to aggregate all such accounts and to return, without interest, within 30 days of receipt, any amounts in excess of the investment limitations applicable to a single account received in respect of all such accounts. See Question 13.
CERTIFICATES
16. Will
certificates be issued for share purchases?
All shares purchased on behalf of a Participant through the Plan will be recorded in
uncertificated form in each Participants account. A Participant can, however, at any time and without charge, obtain a certificate for all or part of the whole shares of common stock credited to the Participants Plan account by accessing
his or her account through the Internet at www.computershare.com/investor, or by writing or calling the Administrator. No certificates for fractional shares will be issued. If you request a certificate for all full shares credited to your
account, a certificate will be issued for the whole shares and a cash payment will be made for any remaining fractional share. That cash payment will be based upon the then-current market value of the shares, less any service charge and processing
fees. Issuance of stock certificates may be subject to an additional fee. Please contact the Administrator to determine if there is a certificate issuance fee.
Receiving certificated shares from your account does not affect your dividend reinvestment option. For example, if you authorized full
dividend reinvestment, cash dividends with respect to shares issued in certificate form will continue to be reinvested.
17. May I add shares of
Capital One common stock to my account by transferring stock certificates in my possession?
You also may send the Administrator your
other Capital One common stock certificates for safekeeping free of charge. By making such a deposit, you will be relieved of the responsibility for loss, theft or destruction of the certificates. If you wish to deposit your Capital One common stock
certificates, you must mail them along with a request to the Administrator to hold your certificates for safekeeping. The certificates should not be endorsed. You should mail the certificates to the Administrator at the address provided in Question
4. Certificates should be mailed by registered or certified mail, return receipt requested, or some other form of traceable mail, and properly insured. The Administrator will promptly send you a statement confirming each deposit of your common stock
certificates.
You may withdraw shares deposited for safekeeping by accessing your account online at www.computershare.com/investor
or by making a request in writing or by telephone to the Administrator as described in Question 20. The Administrator will issue new, differently numbered certificates whenever certificates are issued to you, either upon your request or upon
discontinuation of participation. Shares acquired
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by the reinvestment of dividends on any such withdrawn shares (and on any other shares subsequently acquired by you) will continue to be reinvested or paid out, as previously directed, unless you
provide contrary written instructions or a new Enrollment Form as described in Question 7. Issuance of stock certificates may be subject to an additional fee. Please contact the Administrator to determine if there is a certificate issuance fee.
SALE OF SHARES
18. Can I sell shares credited to my account?
You can sell some or all of the shares credited to your account by contacting the Administrator. You have four choices when making a sale,
depending on how you submit your sale request, as follows:
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Market Order: A market order is a request to sell shares promptly at the current market price. Market order sales are only available at www.computershare.com/investor through Investor Centre or by calling the
Administrator directly at 1-888-985-2057. Market order sale requests received at www.computershare.com/investor through Investor Centre or by telephone will be placed promptly upon receipt during market hours (normally 9:30 a.m. to 4:00 p.m.
Eastern Time). Any orders received after 4:00 p.m. Eastern Time will be placed promptly on the next day the market is open. Depending on the number of shares being sold and current trading volume in the shares, a market order may only be partially
filled or not filled at all on the trading day in which it is placed, in which case the order, or remainder of the order, as applicable, will be cancelled at the end of such day. To determine if your shares were sold, you should check your
account online at www.computershare.com/investor or call the Administrator directly at 1-888-985-2057. If your market order sale was not filled and you still want the shares sold, you will need to re-enter the sale request. The
price shall be the market price of the sale obtained by the Administrators broker, less a service fee of $25 and a processing fee of $0.12 per share sold. |
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Batch Order: A batch order is an accumulation of all sales requests for a security submitted together as a collective request. Batch orders are submitted on each market day, assuming there are sale requests to be
processed. Sale instructions for batch orders received by the Administrator will be processed no later than five business days after the date on which the order is received (except where deferral is required under applicable federal or state laws or
regulations), assuming the applicable market is open for trading and sufficient market liquidity exists. All sales requests received in writing will be submitted as batch order sales. To maximize cost savings for batch order sale requests, the
Administrator will seek to sell shares in round lot (100 shares) transactions. For this purpose the Administrator may combine each selling Participants shares with those of other selling Participants. In every case of a batch order sale, the
price to each selling Participant shall be the weighted average sale price obtained by the Administrators broker for each aggregate order placed by the Administrator and executed by the broker, less a service fee of $15 and a processing fee of
$0.12 per share sold. |
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Day Limit Order: A day limit order is an order to sell securities when and if they reach a specific trading price on a specific day. The order is automatically cancelled if the price is not met by the end of that day
(or, for orders placed after-market hours, the next day the market is open). Depending on the number of securities being sold and the current trading volume in the securities, such an order may only be partially filled, in which case the remainder
of the order will be cancelled. The order may be cancelled by the applicable stock exchange, by the Administrator at its sole discretion or, if the Administrators broker has not filled the order, at your request made online at
www.computershare.com/investor or by calling the Administrator directly at 1-888-985-2057. Each day limit order sale will incur a service fee of $25 per sale and a processing fee of $0.12 for each share sold. |
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Good-Til-Cancelled (GTC) Limit Order: A GTC limit order is an order to sell securities when and if the securities reach a specific trading
price at any time while the order remains open (generally up to 30 days). Depending on the number of securities being sold and current trading volume in the securities, sales may be executed in multiple transactions and over more than one day. If an
order remains open |
S-13
|
for more than one day during which the market is open, a separate fee will be charged for each such day. The order (or any unexecuted portion thereof) is automatically cancelled if the trading
price is not met by the end of the order period. The order may be cancelled by the applicable stock exchange, by the Administrator at its sole discretion or, if the Administrators broker has not filled the order, at your request made online at
www.computershare.com/investor or by calling Computershare directly at 1-888-985-2057. Each GTC limit order sale will incur a service fee of $25 per sale and a processing fee of $0.12 for each
share sold |
Processing fees include any applicable brokerage commissions the Administrator is required to pay. Any
fractional share will be rounded up to a whole share for purposes of calculating the processing fee. The Administrator may, for various reasons, require a sales request to be submitted in writing. Please contact the Administrator to determine if
there are any limitations applicable to your particular sale request. An additional fee of $15 will be charged if the assistance of a Customer Service Representative is required when selling shares. Proceeds are normally paid by check and generally
are distributed within 24 hours after your transaction has settled.
The Administrator reserves the right to decline to process a sale if
it determines, in its sole discretion, that supporting legal documentation is required. In addition, no one will have any authority or power to direct the time or price at which shares for the Plan are sold (except for prices specified for day limit
orders or GTC limit orders) and no one, other than the Administrator, will select the broker(s) or dealer(s) through or from whom sales are to be made.
You should be aware that the price of Capital One common stock may rise or fall during the period between a request for sale, its receipt by
the Administrator and the ultimate sale on the open market. Instructions sent to the Administrator for a market order or batch sale are binding and may not be rescinded. If you prefer to have complete control as to the exact timing and sales prices,
you can transfer the shares to a broker.
If you elect to sell shares online at www.computershare.com/investor through the
Investor Centre, you may utilize the Administrators international currency exchange service to convert your sale proceeds to your local currency prior to being sent to you. Receiving your sales proceeds in a local currency and having your
check drawn on a local bank avoids the time consuming and costly collection process required for cashing U.S. dollar checks. This service is subject to additional terms and conditions and fees, which you must agree to online.
REPORTS
19. What
reports will be sent to me if I participate in the Plan?
Unless you are participating in the Plan through your broker, bank or
nominee, you will receive from the Administrator a detailed statement of your account following each dividend reinvestment and account transaction. These detailed statements will show total cash dividends received, total optional cash investments
received, total shares purchased (including fractional shares), price paid per share, and total shares credited to your account. For market order sales, the time of the sale will be provided. Specific cost basis information will also be included in
your statement in accordance with applicable law. These statements should be retained by you to determine your tax cost basis for shares purchased. See Question 21. If you are participating in the Plan through your broker, bank or other
nominee, you should contact such party regarding a statement of your interests in the Plan.
WITHDRAWAL
20. How may I discontinue dividend reinvestment?
You may discontinue reinvestment of cash dividends under the Plan at any time by telephone or written notice to the Administrator or by
accessing your account through the Internet at www.computershare.com. If a
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notice to discontinue is received by the Administrator after the Record Date for a dividend payment, the Administrator, in its sole discretion, may either pay such dividend in cash or reinvest it
in shares on behalf of the discontinuing Participant. If such dividend is reinvested, the Administrator may sell the shares purchased and remit the proceeds to the Participant, less any processing fee, any service fee and any applicable taxes. After
processing your request to discontinue dividend reinvestment, any shares credited to your Plan account will continue to be held in book-entry form. Dividends on any shares held in book-entry form, and on any shares held in certificated form, will be
paid in cash.
TAXES
21. What are the federal income tax consequences of participating in the Plan?
The following is a summary of certain U.S. federal income tax consequences regarding the Plan. This summary is based on current law and may be
affected by future legislation, Internal Revenue Service rulings and other administrative pronouncements, income tax regulations, and court decisions. This discussion does not purport to deal with all aspects of taxation that may be relevant to you
in light of your circumstances, or if you are a type of investor who is subject to special treatment under U.S. federal income tax law (including, without limitation, insurance companies, partnerships, tax-exempt organizations, financial
institutions, broker dealers, foreign corporations and persons who are not citizens or residents of the United States). You should consult with your own tax advisor regarding the specific tax consequences (including the federal, state, local,
foreign and other tax consequences) of participating in the Plan, and of potential changes in applicable tax laws.
In general, the
amount of cash dividends paid by Capital One will be includable in your income even though reinvested under the Plan. When your dividends are reinvested to acquire shares (including any fractional share) directly from us, you will be treated as
having received on the dividend payment date a taxable dividend in an amount equal to the fair market value of our common stock purchased for your account under the Plan. When your dividends are reinvested to acquire shares (including any fractional
share) purchased in market transactions, you will be treated as having received a taxable dividend equal to the amount of cash dividends used to make those purchases, plus the amount of any processing fees paid by us in connection with those
purchases. You should be aware that, when we pay processing fees on your behalf for shares purchased in market transactions, the taxable income recognized by you as a participant in the Plan will be greater than the taxable income that would have
resulted solely from the receipt of the dividend in cash. Processing fees include any applicable brokerage commissions the Administrator is required to pay.
If you make optional investments that are subject to a waiver discount, you may be treated as having received an additional dividend
distribution equal to the excess, if any, of the fair market value of the shares acquired on the Investment Date over the amount of your optional investment. Although the Internal Revenue Service has issued private letter rulings on plans similar to
the Plan which ruled that shareholders making optional investments will not be treated as having received such dividend income if the shareholders are not also participants in the dividend reinvestment aspect of the plan, private letter rulings are
not precedent and may not be relied upon by persons other than the taxpayers to which they are issued. Participants who make optional cash investments to purchase Capital One common stock subject to a waiver discount should consult with their own
tax advisors regarding consequences of the investment.
We will report to you for tax purposes the dividends to be credited to your
account as well as brokerage costs incurred by us on your behalf. Such information will also be furnished to the Internal Revenue Service to the extent required by law.
The tax basis of shares acquired through the reinvestment of dividends pursuant to the Plan will generally equal the amount of distributions
you are treated as receiving, as described above. The tax basis of shares purchased with optional investments will be equal to the amount of those investments increased by the amount of any additional dividend that you are treated as having received
as a result of a waiver discount. The tax basis of
S-15
shares purchased in the open market to satisfy Plan requirements will be increased by the amount of any processing fees incurred by the Plan on your behalf. The holding period for shares acquired
under the Plan (including any fractional share) generally will begin on the date after the date on which the shares are purchased and credited to your Plan account, regardless of the source of purchase. Consequently, shares of our common stock
acquired at different times will have different holding periods.
Upon the sale of either a portion or all of your shares from the Plan,
you may recognize a capital gain or loss based on the difference between the sales proceeds and the tax basis in the shares sold, including any fractional share. Such capital gain or loss will be long-term capital gain or loss if your holding period
for your shares or fractional share exceeded the Internal Revenue Codes applicable period (currently one year) at the time of disposition.
The Administrator may be required to withhold from dividends paid or proceeds from the disposition of shares the appropriate amount determined
in accordance with Internal Revenue Code and applicable Treasury Regulations. Plan participants who are not United States persons for U.S. federal income tax purposes generally are subject to a withholding tax on dividends that are reinvested in the
Plan. In addition, Plan participants may be subject to certain backup withholding on dividends reinvested in the Plan and proceeds from the disposition of the shares, unless the Plan participant provides us or the Administrator with a correct
taxpayer identification number and otherwise complies with applicable certification requirements (e.g., completing an IRS form W-9 or other applicable IRS form which can be obtained from the Administrator) and we have not been informed by the
Internal Revenue Service that the participant is subject to backup withholding. If you are subject to withholding taxes, we will withhold the required taxes from the gross dividends and from the proceeds from the sale of shares. The dividends and
proceeds received by you, or dividends reinvested on your behalf, will be net of the required taxes.
OTHER PROVISIONS
22. What happens if I sell or transfer shares of stock or acquire additional shares of stock?
If you have elected the Full Dividend Reinvestment option under the Plan and subsequently sell or transfer all or any part of the
shares registered in your name (either held in certificated form or credited to your account), automatic reinvestment will continue as long as there are shares registered in your name or until discontinuation of dividend reinvestment. Similarly, if
you have elected the Full Dividend Reinvestment option under the Plan and subsequently acquire additional shares, dividends paid on such shares will automatically be reinvested until discontinuation of dividend reinvestment. If you have
elected the Partial Dividends Paid in Cash option and subsequently acquire additional shares, dividends paid on such shares will be automatically reinvested under the Plan. See Question 7.
23. How will my shares be voted?
In
connection with the exercise of shareholder voting rights, you will receive a proxy card representing any shares you hold and/or any full shares credited to your account. All such shares will be voted as designated by you on the proxy card. If you
do not vote by proxy or in person, then your shares will not be voted.
24. Who pays the expenses of the Plan?
There are no processing fees or service fees on newly issued shares or treasury shares purchased from Capital One for your account. Processing
fees include the applicable brokerage commissions that the Administrator is required to pay. Processing fees on shares purchased on the open market for your account will be paid by Capital One and, for tax purposes, these fees will be considered as
additional dividend income to you. All costs of administering the Plan will be paid by Capital One. If you elect to make optional cash investments through automatic monthly deductions from a U.S. bank account, you will have a $1.00 service fee
deducted from the amount withdrawn prior to each investment. If you elect to sell shares credited to your account via a
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batch order sale, you will incur a service fee of $15 per sale and a processing fee of $0.12 per share sold. If you elect to sell shares credited to your account via a market order sale, day
limit order sale or GTC limit order sale, you will incur a service fee of $25 per sale and a processing fee of $0.12 per share sold. An additional fee of $15 will be charged if the assistance of a Customer Service Representative is required when
selling shares. Any fractional share will be rounded up to a whole share for purposes of calculating the processing fee.
25. What are the
responsibilities of Capital One or the Administrator under the Plan?
Neither Capital One nor the Administrator will be liable for any
act done in good faith or for any good faith omission to act, including, without limitation, any claims of liability arising out of a failure to cease dividend reinvestment for your account upon your death or adjudicated incompetence prior to the
receipt of notice in writing of such death or adjudicated incompetence, the prices at which shares are purchased or sold for your account, the times when purchases or sales are made or fluctuations in the market value of Capital Ones common
stock. Neither Capital One nor the Administrator has any duties, responsibilities or liabilities except those expressly set forth in the Plan. The Plan does not limit your right to sue under the Securities Act of 1933, as amended (the
Securities Act) or the Securities Exchange Act of 1934, as amended (the Exchange Act).
YOU SHOULD RECOGNIZE THAT
CAPITAL ONE CANNOT ASSURE A PROFIT OR PROTECT AGAINST A LOSS ON SHARES YOU PURCHASED UNDER THE PLAN.
26. What happens if Capital One issues a
stock dividend or declares a stock split?
Any common stock distributed by Capital One as a result of a stock dividend or a stock split
on shares credited to your account or held by you in certificated form will be credited to your account.
27. May the Plan be changed or
terminated?
While the Plan is intended to continue indefinitely, Capital One reserves the right to amend, modify, suspend or terminate
the Plan at any time. You will be notified in writing of any modifications made to the Plan.
The Plan Administrator also may terminate
your Plan account if you do not own at least one whole share. In the event that your Plan account is terminated for this reason, a check for the cash value of the fractional share based upon the then-current market price, less any processing fee,
any service fee and any applicable taxes will be sent to you and your account will be closed.
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USE OF PROCEEDS
The proceeds to Capital One from the issuance of shares of common stock pursuant to the Plan will be used for general corporate purposes.
INDEMNIFICATION UNDER THE SECURITIES ACT
Except in limited circumstances, Capital One is required by provisions in its Restated Certificate of Incorporation to indemnify its directors
and officers against liability incurred by them as a result of their service in those capacities. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling Capital One
pursuant to the foregoing provisions, Capital One has been informed that in the opinion of the Securities and Exchange Commission (the SEC) such indemnification is against public policy as expressed in the Securities Act and is therefore
unenforceable.
COMMON STOCK DIVIDENDS AND PRICE RANGE
Capital One has paid cash dividends on its common stock for each full quarter since the common stock became publicly held on November 22,
1994. Such dividends were paid in the following quarterly amounts per share for the last year:
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2014 |
|
|
|
|
First Quarter |
|
$ |
0.30 |
|
Second Quarter |
|
$ |
0.30 |
|
Third Quarter |
|
$ |
0.30 |
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Fourth Quarter |
|
$ |
0.30 |
|
The following table shows the high and low closing sales prices of the common stock during the past three
years as reported on the New York Stock Exchanges composite tape by The Wall Street Journal.
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|
|
|
|
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|
Year |
|
High |
|
|
Low |
|
2012 |
|
|
|
|
|
|
|
|
First Quarter |
|
|
57.15 |
|
|
|
43.75 |
|
Second Quarter |
|
|
56.36 |
|
|
|
48.40 |
|
Third Quarter |
|
|
59.37 |
|
|
|
53.36 |
|
Fourth Quarter |
|
|
61.40 |
|
|
|
54.77 |
|
2013 |
|
|
|
|
|
|
|
|
First Quarter |
|
|
62.88 |
|
|
|
50.80 |
|
Second Quarter |
|
|
62.81 |
|
|
|
52.76 |
|
Third Quarter |
|
|
69.70 |
|
|
|
63.59 |
|
Fourth Quarter |
|
|
76.61 |
|
|
|
67.83 |
|
2014 |
|
|
|
|
|
|
|
|
First Quarter |
|
|
78.49 |
|
|
|
67.86 |
|
Second Quarter |
|
|
83.89 |
|
|
|
73.06 |
|
Third Quarter |
|
|
85.39 |
|
|
|
77.70 |
|
Fourth Quarter |
|
|
83.96 |
|
|
|
75.08 |
|
2015 |
|
|
|
|
|
|
|
|
First Quarter |
|
|
79.26 |
|
|
|
77.96 |
|
Second Quarter (as of April 8, 2015) |
|
|
80.53 |
|
|
|
79.30 |
|
The last reported sales price of the common stock on the Exchange on April 8, 2015 was $80.19 per share.
The price of common stock varies over time and neither the price of the common stock nor the dividends paid upon the common stock are
guaranteed by any governmental authority or otherwise.
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LEGAL MATTERS
Certain legal matters with regard to the common stock have been passed upon by Gibson, Dunn & Crutcher LLP.
EXPERTS
Ernst & Young LLP, an independent registered public accounting firm, has audited our consolidated financial statements included in
our Annual Report on Form 10-K for the year ended December 31, 2014, and the effectiveness of our internal control over financial reporting as of December 31, 2014, as set forth in their reports, which are incorporated by reference in this
prospectus supplement and elsewhere in the registration statement. Our financial statements are incorporated by reference in reliance on Ernst & Young LLPs report, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus supplement is part of a registration statement (File No. 333-203125) we have filed with the SEC under the Securities Act.
The registration statement, including the attached exhibits and schedules, contains additional relevant information about us and the securities described in this prospectus supplement. The SECs rules and regulations allow us to omit certain
information included in the registration statement from this prospectus supplement. The registration statement may be inspected by anyone without charge at the SECs principal office at 100 F Street, N.E., Washington, D.C. 20549.
In addition, we file annual, quarterly, and special reports, proxy statements and other information with the SEC under the Exchange Act. You
may read and copy this information at the following SEC location:
Public Reference Room
100 F Street, N.E.
Washington,
D.C. 20549
You may also obtain copies of this information by mail from the SECs Public Reference Room, 100 F Street, N.E.,
Washington, D.C. 20549, at rates determined by the SEC. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-732-0330. You may also inspect reports, proxy statements and other information that we have
filed electronically with the SEC at the SECs website at http://www.sec.gov. These documents can also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005.
The SECs rules allow us to incorporate by reference information into this prospectus supplement. This means that we can
disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be a part of this prospectus supplement. Any information incorporated by reference
in this prospectus supplement that we file with the SEC after the date of this prospectus supplement will automatically update and supersede information contained in this prospectus supplement. Our SEC file number is 001-13300.
We are incorporating by reference in this prospectus supplement the documents listed below and any future filings that we make with the SEC
under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this offering, provided, however, that we are not incorporating by reference any information furnished (but not filed) under Item 2.02 or
Item 7.01 of any Current Report on Form 8-K, except as specified below:
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our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed on February 24, 2015; and |
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our Current Reports on Form 8-K filed on February 2, 2015 and February 5, 2015. |
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You can obtain copies of documents incorporated by reference in this prospectus supplement,
without charge, by requesting them in writing or by telephone from us at Capital One Financial Corporation, Investor Relations Department, 1680 Capital One Drive, McLean, Virginia 22102, telephone (703) 720-2455. You should rely only on the
information incorporated by reference or provided in this prospectus supplement or the accompanying prospectus. 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 supplement, the accompanying prospectus or any document incorporated by reference is accurate as of any date other than the date of the applicable
document.
Our principal executive office is located at 1680 Capital One Drive, McLean, Virginia 22102 (telephone number
(703) 720-1000). We maintain a website at www.capitalone.com. The information on our website is not part of this prospectus supplement nor is it incorporated by reference. Documents available on our website include our (1) Code of
Business Conduct and Ethics, (2) Corporate Governance Principles; and (3) charters for the Audit and Risk, Compensation, Finance and Trust Oversight, and Governance and Nominating Committees.
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PROSPECTUS
Capital One Financial Corporation
Senior Debt Securities
Subordinated Debt Securities
Preferred Stock
Depositary Shares
Common Stock
Purchase
Contracts
Warrants
Units
Capital One Financial Corporation from time to time may issue and offer to sell, and selling securityholders may offer to resell, the senior
or subordinated debt securities, preferred stock, either separately or represented by depositary shares, common stock, purchase contracts, warrants or units described in this prospectus, which we refer to collectively as our securities.
We will provide specific terms of these securities in supplements to this prospectus. You should read this prospectus and the accompanying
prospectus supplement carefully before you make your investment decision.
Our common stock is listed on the New York Stock Exchange under
the symbol COF.
Investing in our securities involves a high degree of risk. See the Risk Factors section of
our filings with the Securities and Exchange Commission and the applicable prospectus supplement.
This prospectus
may not be used to sell any of the securities unless it is accompanied by a prospectus supplement.
These
securities are not deposits or savings accounts or other obligations of a bank. These securities are not insured by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of
this prospectus is March 31, 2015.
TABLE OF CONTENTS
i
ABOUT THIS PROSPECTUS
In this prospectus, we, our, us, or the Corporation, each refer to Capital One Financial
Corporation.
This prospectus is part of a registration statement
(No. 333- ) that we have filed with the Securities and Exchange Commission, or the SEC, utilizing a shelf
registration process. This prospectus provides you with a general description of the securities that we may issue and sell, and that selling securityholders may resell, from time to time. Each time we issue and sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may add, update or change information in this prospectus. If there is any inconsistency between the information in this
prospectus and the prospectus supplement, you should rely on the information in the prospectus supplement. You should read both this prospectus and the prospectus supplement applicable to any offering, together with the additional information
described under the heading Where You Can Find More Information below.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this prospectus contain forward-looking statements. Statements that are not historical facts, including statements about our beliefs and
expectations, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the
Exchange Act). Forward-looking statements include, among other things, information relating to our strategies, goals, outlook or other non-historical matters; projections, revenues, income, returns, expenses, capital measures, accruals
for claims in litigation and for other claims against us; earnings per share or other financial measures for us; future financial and operating results; our plans, objectives, expectations and intentions; and the assumptions that underlie these
matters. Forward-looking statements also include statements using words such as expect, anticipate, hope, intend, plan, believe, estimate, will or
similar expressions. We have based these forward-looking statements on our current plans, estimates and projections, and you should not unduly rely on them.
Numerous factors could cause our actual results to differ materially from those described in forward-looking statements, including, among other things:
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general economic and business conditions in the United States, the United Kingdom, Canada or our local markets, including conditions affecting
employment levels, interest rates, collateral values, consumer income and confidence, spending and savings that may affect consumer bankruptcies, defaults, charge-offs and deposit activity; |
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an increase or decrease in credit losses (including increases due to a worsening of general economic conditions in the credit environment);
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financial, legal, regulatory, tax or accounting changes or actions, including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection
Act and the regulations promulgated thereunder and regulations governing bank capital and liquidity standards, including Basel-related initiatives and potential changes to financial accounting and reporting standards; |
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developments, changes or actions relating to any litigation matter involving us; |
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the inability to sustain revenue and earnings growth; |
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increases or decreases in interest rates; |
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our ability to access the capital markets at attractive rates and terms to capitalize and fund our operations and future growth;
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the success of our marketing efforts in attracting and retaining customers; |
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increases or decreases in our aggregate loan balances or the number of customers and the growth rate and composition thereof, including increases or
decreases resulting from factors such as shifting product mix, amount of actual marketing expenses we incur and attrition of loan balances; |
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the level of future repurchase or indemnification requests we may receive, the actual future performance of mortgage loans relating to such requests,
the success rates of claimants against us, any developments in litigation and the actual recoveries we may make on any collateral relating to claims against us; |
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the amount and rate of deposit growth; |
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changes in the reputation of, or expectations regarding, the financial services industry or us with respect to practices, products or financial
condition; |
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any significant disruption in our operations or technology platform; |
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our ability to maintain a compliance and technology infrastructure suitable for the nature of our business; |
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our ability to develop digital technology that addresses the needs of our customers; |
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our ability to control costs; |
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the amount of, and rate of growth in, our expenses as our business develops or changes or as it expands into new market areas;
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our ability to execute on our strategic and operational plans; |
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any significant disruption of, or loss of public confidence in, the United States mail service affecting our response rates and consumer payments;
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any significant disruption of, or loss of public confidence in, the internet affecting the ability of our customers to access their accounts and
conduct banking transactions; |
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our ability to recruit and retain talented and experienced personnel to assist in the development, management and operation of new products and
services; |
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changes in the labor and employment markets; |
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fraud or misconduct by our customers, employees or business partners; |
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competition from providers of products and services that compete with our businesses; and |
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other risk factors listed from time to time in reports that we file with the SEC. |
You should carefully consider the factors referred to above in evaluating these forward-looking statements.
When considering these forward-looking statements, you should keep in mind these risks, uncertainties and other cautionary statements
made in this prospectus, any accompanying prospectus supplement and in the documents incorporated by reference. See the factors set forth under the caption Risk Factors in any prospectus supplement and in any other documents incorporated
or deemed to be incorporated by reference therein or herein, including our Annual Report on Form 10-K for the year ended December 31, 2014, for additional information that you should consider
carefully in evaluating these forward-looking statements.
Forward-looking statements are not guarantees of future
performance. They involve risks, uncertainties and assumptions, including the risk factors referred to above. Our future performance and actual results may differ materially from those expressed in forward-looking statements. Many of the factors
that will determine these results and values are beyond our ability to control or predict. Forward-looking statements speak only as of the date that they are made, and except as required by law we undertake no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future events or otherwise.
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WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement we have filed with the SEC under the Securities Act. The registration statement,
including the attached exhibits and schedules, contains additional relevant information about us and the securities described in this prospectus. The SECs rules and regulations allow us to omit certain information included in the registration
statement from this prospectus. The registration statement may be inspected by anyone without charge at the SECs principal office at 100 F Street, N.E., Washington, D.C. 20549.
In addition, we file annual, quarterly and special reports, proxy statements and other information with the SEC under the Exchange Act.
You may read and copy this information at the following SEC location:
Public Reference Room
100 F Street, N.E.
Washington, D.C. 20549
You may also obtain copies of this information by mail from the SECs Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549, at rates determined by the SEC. You may obtain information on
the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also inspect reports, proxy statements
and other information that we have filed electronically with the SEC at the SECs web site at http://www.sec.gov/.
The
SECs rules allow us to incorporate by reference information into this prospectus and any prospectus supplement. This means that we can disclose important information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is considered to be a part of this prospectus and any prospectus supplement. Any information incorporated by reference in this prospectus that we file with the SEC after the date of this prospectus
and any information incorporated by reference in any prospectus supplement will automatically update and supersede information contained in this prospectus and any prospectus supplement. Our SEC file number is
001-13300.
We are incorporating by reference in this prospectus the documents
listed below and any future filings that we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this offering, provided, however, that we are not incorporating by reference any information
furnished (but not filed) under Item 2.02 or Item 7.01 of any Current Report on Form 8-K:
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our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed on
February 24, 2015; |
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our Current Reports on Form 8-K filed on February 2, 2015, February 5, 2015 and March 11, 2015; and |
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the description of our common stock on Amendment No. 1 to Form 8-A, dated October 17, 1994.
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You can obtain copies of documents incorporated by reference in this prospectus, without charge, by
requesting them in writing or by telephone from us at Capital One Financial Corporation, Investor Relations Department, 1680 Capital One Drive, McLean, Virginia 22102, telephone (703) 720-2455.
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,
any prospectus supplement or any document incorporated by reference is accurate as of any date other than the date of the applicable document.
Our principal executive office is located at 1680 Capital One Drive, McLean, Virginia 22102 (telephone number (703) 720-1000). We maintain a website at
http://www.capitalone.com. The information on our website is not part of this prospectus nor is it incorporated by reference. Documents available on our website include our (i) Code of Business Conduct and Ethics, (ii) Corporate Governance
Guidelines, and (iii) charters for each of the Audit, Risk, Compensation, and Governance and Nominating Committees.
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RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth our ratios of (1) earnings to
fixed charges and (2) earnings to combined fixed charges and preferred stock dividends for each of the periods indicated.
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Ratio of Earnings to Fixed Charges: |
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Years Ended December 31, |
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2014 |
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2013 |
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2012(1) |
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2011 |
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2010 |
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Including Interest on Deposits |
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5.14 |
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4.65 |
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3.17 |
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3.08 |
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2.52 |
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Excluding Interest on Deposits |
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14.19 |
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12.82 |
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6.30 |
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5.41 |
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4.07 |
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Including Preferred Stock Dividends (and Including Interest on Deposits) |
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4.84 |
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4.46 |
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3.15 |
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3.08 |
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2.52 |
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Including Preferred Stock Dividends (and Excluding Interest on Deposits) |
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11.82 |
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11.26 |
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6.17 |
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5.41 |
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4.07 |
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(1) |
On February 17, 2012, we acquired ING Direct. On May 1, 2012, we closed the 2012 HSBC U.S. card acquisition. Each of these transactions was accounted for
under the acquisition method of accounting, and their respective results of operations are included in our results from each respective transaction date. |
We compute the ratio of earnings to fixed charges by dividing earnings by the sum of fixed charges. The term earnings is the amount resulting from adding (a) income from continuing
operations before income taxes, (b) fixed charges, and (c) equity in undistributed loss (gain) of unconsolidated subsidiaries. The term fixed charges includes the sum of the following: (a) interest expense on deposits and
borrowing and (b) interest factor in rent expense.
We compute the ratio of earnings to combined fixed charges and
preferred stock dividends by dividing earnings by the sum of fixed charges and preferred stock dividends.
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USE OF PROCEEDS
Except as otherwise described in the applicable prospectus supplement, we intend to use the net proceeds from the sale of our securities
for general corporate purposes in the ordinary course of our business. General corporate purposes may include, repayment of debt, acquisitions, additions to working capital, capital expenditures and investments in our subsidiaries.
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DESCRIPTION OF DEBT SECURITIES
We may from time to time issue debt securities which will be our direct unsecured general obligations. These debt securities are
described below and will be senior debt securities or subordinated debt securities and any senior or subordinated debt securities that may be part of a unit, all of which are called debt securities. The senior debt securities will be issued under an
indenture between us and The Bank of New York Mellon Trust Company, N.A., formerly known as The Bank of New York Trust Company, N.A. (as successor to Harris Trust and Savings Bank), as trustee, dated as of November 1, 1996, and the subordinated
debt securities will be issued under an indenture dated as of August 29, 2006 between us and The Bank of New York Mellon Trust Company, N.A., as trustee, subject in each case to such amendments or supplemental indentures as may be adopted from
time to time. Together, the senior indenture and the subordinated indenture are called the indentures, and the senior indenture trustee and the subordinated indenture trustee are called the indenture trustees.
We have summarized selected provisions of the indentures below. The summary is not complete and does not describe every aspect of the
indentures. A copy of each of the senior indenture and the subordinated indenture has been filed as an exhibit to the registration statement of which this prospectus is a part and has been qualified as an indenture under the Trust Indenture Act of
1939, as amended, or the Trust Indenture Act. You should read the more detailed provisions of the applicable indenture, including the defined terms, for provisions that may be important to you. You should also consider applicable provisions of the
Trust Indenture Act. In the summary below, we have included references to section numbers so that you can easily locate these provisions. The particular terms of any debt securities we offer will be described in the related prospectus supplement,
along with any applicable modifications of or additions to the general terms of the debt securities described below and in the indentures. For a description of the terms of any series of debt securities, you should also review both the prospectus
supplement relating to that series and the description of the debt securities set forth in this prospectus before making an investment decision. Capitalized terms used in the summary have the meanings specified in the applicable indenture.
As of December 31, 2014, we had $18.7 billion in senior and subordinated notes outstanding that mature in varying
amounts from 2015 to 2024, of which $16.0 billion in aggregate principal amount was senior debt securities and $2.7 billion in aggregate principal was subordinated debt securities. $6.1 billion and $3.9 billion in senior and subordinated debt
securities were issued by our consolidated subsidiaries, Capital One Bank (USA), National Association (COBNA) and Capital One, National Association (CONA), respectively.
General
The debt
securities will be our direct unsecured obligations. The indentures do not significantly limit our operations. In particular, they do not:
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limit the amount of debt securities that we can issue under the indentures; |
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limit the number of series of debt securities that we can issue from time to time; |
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limit or otherwise restrict the total amount of debt that we or our subsidiaries may incur or the amount of other securities that we may issue;
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require us or an acquiror to repurchase debt securities in the event of a change in control; or |
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contain any covenant or other provision that is specifically intended to afford any holder of the debt securities any protection in the event of highly
leveraged transactions or similar transactions involving us or our subsidiaries. |
The senior debt securities
will rank equally with all of our other unsecured unsubordinated indebtedness. The subordinated debt securities will have a position junior to all of our senior indebtedness.
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Because we are a holding company, dividends and fees from our subsidiaries are our principal
source of revenues from which to repay the debt securities. Our subsidiaries engaged in the banking or credit card business can only pay dividends if they are in compliance with applicable United States federal and state regulatory requirements. Our
right to participate in any asset distribution of any of our subsidiaries, including COBNA and CONA, on liquidation, reorganization or otherwise, will rank junior to the rights of all creditors of that subsidiary (except to the extent that we may
ourselves be an unsubordinated creditor of that subsidiary). As a result, the rights of holders of debt securities to benefit from those distributions will also be junior to the rights of all creditors of our subsidiaries. Consequently, the debt
securities will be effectively subordinated to all liabilities of our subsidiaries. COBNA and CONA 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 COBNA and CONA may pay dividends or otherwise supply funds to us or our other affiliates.
Terms
A prospectus
supplement relating to the offering of any series of debt securities will include specific terms relating to the offering. These terms will include some or all of the following (unless specified otherwise or in context, section references are to
sections of both the senior indenture and subordinated indenture):
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the title, series, form and type of the offered debt securities; |
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whether the offered debt securities will be senior or subordinated debt; |
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the indenture under which the offered debt securities are being issued; |
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whether the offered debt securities are to be issued in registered form, bearer form or both; |
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the aggregate principal amount of the offered debt securities and any limit upon the aggregate principal amount of the debt securities of such title or
series; |
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the date or dates (including the maturity date) or method, if any, for determining such dates, on which the principal of the offered debt securities
will be payable (and any provisions relating to extending or shortening the date on which the principal of the offered debt securities is payable); |
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the interest rate, or method, if any, for determining the interest rate, the date or dates from which interest will accrue, or method, if any, for
determining such dates, the interest payment dates, if any, on which interest will be payable, and whether and under what circumstances additional amounts on the offered debt securities will be payable; the manner in which payments with respect to
the offered debt securities will be made; and the place or places where principal of, premium, if any, interest on and additional amount, if any, will be payable; |
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whether the offered debt securities are redeemable at our option, and if so, the periods, prices, and other terms regarding such optional redemption;
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whether we are obligated to redeem or repurchase the offered debt securities pursuant to any sinking fund or at the option of any holder thereof and,
if so, the periods, prices, and other terms regarding such repurchase or redemption; |
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the denominations in which the offered debt securities will be issuable; |
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if other than the principal amount, the portion of the principal amount of the offered debt securities payable upon the acceleration of the maturity
date or the method by which such portion is to be determined; |
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the currency for payment of principal, premium, interest and any additional amount with respect to the offered debt securities, whether the principal
of, premium, if any, interest on or additional amount, if any, with respect to the offered debt securities are to be payable, at our election or any holders |
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election, in a currency other than that in which the offered debt securities are denominated, the period in which that election may be made and the time and manner of determining the applicable
exchange rate; |
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the percentage of the principal amount or price at which the offered debt securities will be issued; |
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whether the amount of payments of principal of, premium, if any, interest on, or additional amount, if any, with respect to the offered debt securities
may be determined by reference to an index, formula or other method, and if so, the terms and conditions and the manner in which such amounts will be determined and paid or payable; |
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any changes to the covenants or additional events of default or covenants; |
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whether and upon what terms the offered debt securities may be defeased (which means that we would be discharged from our obligations by depositing
sufficient cash or government securities to pay the principal of, premium, if any, interest on, or additional amount, if any, due to the stated maturity date or a redemption date of the offered debt securities); |
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whether the offered debt securities will be convertible into our common stock and, if so, the initial conversion price, the periods and terms of the
conversion or exchange; and |
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any other terms not inconsistent with the provisions of the indentures. (Section 301) |
Form of the Debt Securities
The indentures provide that we may issue senior and subordinated debt securities in registered form, in bearer form or in both registered and bearer form. Unless we indicate otherwise in the applicable
prospectus supplement, each series of senior and subordinated debt securities will be issued in registered form, without coupons. Holders of registered form securities will be listed on the applicable indenture trustees register
for the applicable debt securities. (Sections 201 and 305)
Unless we indicate otherwise in the applicable prospectus
supplement, we will issue senior and subordinated debt securities in registered form, without coupons, in denominations of $1,000 or any integral multiple of $1,000. Unless we indicate otherwise in the applicable prospectus supplement, we will issue
senior and subordinated debt securities in bearer form in denominations of $5,000 or any integral multiple of $5,000. There will be no service charge for any registration of transfer, exchange, redemption, or conversion of senior and subordinated
debt securities, but we or the applicable indenture trustee may require the holder to pay any tax or other governmental charge that may be imposed in connection with any registration of a transfer or exchange of the senior or subordinated debt
securities, other than certain exchanges not involving any transfer. (Sections 302 and 305)
If we issue the debt
securities in bearer form, the debt securities will have interest coupons attached. Bearer form securities are payable to whomever physically holds them from time to time. Debt securities in bearer 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.
Registration, Transfer, Payment and Paying Agent
Unless we indicate otherwise in the applicable prospectus supplement, payments on the debt securities will be made at our 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. 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
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the close of business on the applicable record date. (Sections 1002 and 307) Unless we indicate otherwise in the applicable prospectus supplement, any interest and any additional amounts
with respect to any debt securities which is payable, but not punctually paid or duly provided for, may be paid to the holders as of a special record date fixed by the trustee or in any other lawful manner. (Section 307)
Unless we indicate otherwise in the applicable prospectus supplement, payments of principal of, 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 we indicate otherwise in the applicable prospectus supplement, payment 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. (Sections 1001 and 1002)
Global Debt Securities
Unless we indicate otherwise in the applicable prospectus supplement for a series of debt securities, each series of debt securities will
be issued in global form, which means that we will deposit with the depositary identified in the applicable prospectus supplement (or its custodian) one or more certificates representing the entire series, as described below under Book-Entry
Procedures and Settlement. Global debt securities may be issued in either temporary or permanent form. (Sections 201 and 203)
The applicable prospectus supplement will describe any limitations and restrictions relating to a series of global senior or subordinated debt securities.
Covenants
Under the
senior indenture, we agree to the following:
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Except as permitted as described in this prospectus under Description of Debt SecuritiesConsolidation, Merger and Sale of Assets, we
will preserve and keep in full force and effect our corporate existence and the corporate existence of each of our significant subsidiaries (as defined below) and our rights (charter and statutory) and franchises and those of each of our significant
subsidiaries. However, neither we nor any of our significant subsidiaries will be required to preserve any of these rights or franchises if we or the significant subsidiary, as the case may be, determine that the preservation of these rights or
franchises is no longer desirable in the conduct of our or its business, as applicable, and that the loss of these rights or franchises is not disadvantageous in any material respect to the holders of the senior debt securities. (Section 1007)
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The senior indenture 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 majority-owned subsidiaries the consolidated assets of which (as reflected on our consolidated balance sheet) constitute 20% or more of our consolidated assets. This covenant generally provides that, except as
permitted as described in this prospectus under Description of Debt SecuritiesConsolidation, Merger and Sale of Assets, as long as any of the senior debt securities are outstanding: |
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neither we nor any of our significant subsidiaries will sell, assign, transfer or otherwise dispose of the voting stock of a significant subsidiary or
securities convertible into or options, warrants or rights to subscribe for or purchase such voting stock, and we will not permit a significant subsidiary to issue voting stock, or securities convertible into or options, warrants or rights to
subscribe for or purchase such voting stock, in each case if, after giving effect to such transaction and to the issuance of the maximum number of shares of voting stock of the significant subsidiary issuable upon the exercise of all such
convertibles securities, options, warrants or rights, such significant subsidiary would cease to be a controlled subsidiary (as defined below); and |
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we will not permit a significant subsidiary to merge or consolidate with or into any corporation unless the survivor is us or is, or upon consummation
of the merger or consolidation will become, a controlled subsidiary, or to lease, sell or transfer all or substantially all of its properties and assets except to us or a controlled subsidiary or a person that upon such lease, sale or transfer will
become a controlled subsidiary. (Section 1005) |
A controlled subsidiary is a significant
subsidiary at least 80% of the voting stock of which is owned by us and/or one or more of our controlled subsidiaries.
The
limitations described above do not apply to certain transactions required by law, rule, regulation or governmental order (including as a condition to an acquisition of another entity by us) or to any sale or transfer of assets in a securitization
transaction.
Under the subordinated indenture, we agree to the following:
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Except as permitted as described in this prospectus under Description of Debt SecuritiesConsolidation, Merger and Sale of Assets, we
will preserve and keep in full force and effect our corporate existence and our rights (charter and statutory) and franchises. However, we will not be required to preserve any of these rights or franchises if we determine that the preservation of
these rights or franchises is no longer desirable in the conduct of our business and that the loss of these rights or franchises is not disadvantageous in any material respect to the holders of the subordinated debt securities. (Section 1007)
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In addition, the senior indenture contains a covenant by us limiting our ability to create liens on the
voting stock of a significant subsidiary. This covenant generally provides that, as long as any of the senior debt securities are outstanding, neither we nor any of our subsidiaries will create, assume or incur any pledge, encumbrance or lien upon a
significant subsidiarys voting stock, or upon securities convertible into or options, warrants or rights to subscribe for or purchase, a significant subsidiarys voting stock, directly or indirectly, to secure indebtedness for borrowed
money, if, treating such pledge, encumbrance or lien as a transfer of the significant subsidiarys voting stock or securities convertible into or options, warrants or rights to subscribe for or purchase the significant subsidiarys voting
stock to the secured party (in each case after giving effect to such transaction and to the issuance of the maximum number of shares of voting stock of the significant subsidiary issuable upon the exercise of all such convertible securities,
options, warrants or rights), the significant subsidiary would not continue to be a controlled subsidiary, unless the senior debt securities are equally and ratably secured with any and all such indebtedness by this pledge, encumbrance or lien.
(Section 1006)
Subordination of Subordinated Debt Securities
Unless we indicate otherwise 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 also will be effectively subordinated if:
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we are involved in insolvency, bankruptcy or similar proceedings; |
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the maturity of any series of our subordinated debt securities is accelerated because of certain events of bankruptcy, insolvency or reorganization of
us or a major depositary institution subsidiary; or |
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we fail to pay the principal of, premium, if any, or interest on any senior indebtedness when due, or an event of default occurs and is continuing with
respect to any senior indebtedness permitting the holders of such senior indebtedness to declare the senior indebtedness due and payable prior to the date on which it would otherwise have become due and payable. (Section 1601)
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Because of this subordination, some of our creditors may receive more, ratably, than holders
of subordinated debt securities if we are 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 to receive payments or distributions of cash, property or securities from us applicable to such senior indebtedness until all amounts
owing on the subordinated debt securities have been paid in full. (Section 1602)
Senior indebtedness
includes: (1) the principal of, premium, if any, and interest on, whether outstanding now or incurred later, (a) all indebtedness for money borrowed by us, including indebtedness of others that we guarantee, other than the subordinated
debt securities and the junior subordinated debt securities and other 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; (2) all our capital lease obligations and any synthetic lease or tax retention operating lease; (3) all our
obligations issued or assumed as the deferred purchase price of property, and all conditional sale or title retention agreements, but excluding trade accounts payable in the ordinary course of business; (4) all our obligations, contingent or
otherwise, in respect of any letters of credit, bankers acceptances, security purchase facilities and similar credit transactions; (5) all our obligations in respect of interest rate swap, cap or similar agreements, interest rate future or
options contracts, currency swap agreements, currency future or option contracts, commodity contracts and other similar agreements; (6) all obligations of the type referred to in clauses (1) through (5) of other persons for the
payment of which we are responsible or liable as obligor, guarantor or otherwise; and (7) all obligations of the type referred to in clauses (1) through (6) of other persons secured by any lien on any of our property or assets whether
or not such obligation is assumed by us.
Senior indebtedness does not include: (1) subordinated debt securities;
(2) any indebtedness that by its terms is subordinated to, or ranks on an equal basis with, subordinated debt securities; and (3) any indebtedness between or among us and our affiliates, including (a) any junior subordinated debt
securities, (b) trust preferred securities guarantees and (c) all other debt securities and guarantees in respect of those debt securities, issued to any trust, or a trustee of such trust, partnership or other entity affiliated with us
which is our financing vehicle in connection with the issuance by such financing vehicle of trust preferred securities or other securities guaranteed by us pursuant to an instrument that ranks on an equal basis with, or junior to, the trust
preferred securities guarantees.
Consolidation, Merger and Sale of Assets
Each indenture generally permits a consolidation or merger between us and another corporation and the conveyance, transfer or lease by us
of all or substantially all of our property or assets, in each case without the consent of the holders of any outstanding debt securities. However, each indenture requires that:
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the successor or purchaser is a corporation organized under the laws of the United States of America, any state thereof or the District of Columbia and
expressly assumes our obligations on the debt securities under the applicable indenture; |
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immediately after giving effect to the transaction, no event which, after notice or lapse of time, would become an event of default, will have occurred
and be continuing pursuant to the applicable indenture; and |
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either we or the successor person has delivered to the applicable indenture trustee an officers certificate and an opinion of counsel stating the
consolidation, merger, transfer or lease, as applicable, complied with these provisions and all conditions precedent of the applicable indenture. (Section 801) |
The successor shall be substituted for us as if it had been an original party to the indentures and the debt securities. Thereafter, the
successor may exercise our rights and powers under the indentures and the debt securities and, except in the case of a lease, we will be released from all of our obligations and covenants under those documents. (Section 802)
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Exchange of Debt Securities
Registered debt securities may be exchanged for an equal aggregate principal amount of registered debt securities of the same series containing identical terms and provisions in authorized denominations
requested by the holders upon surrender of the registered debt securities at an office or agency that we maintain for that purpose and upon fulfillment of all other requirements set forth in the indentures. (Section 305)
Conversion and Exchangeability
The holders of debt securities that are convertible into our common stock or exchangeable into other securities will be entitled to convert or exchange the debt securities under some circumstances. The
terms of any conversion or exchange will be described in the applicable prospectus supplement.
Events of Default
Unless we indicate otherwise in the applicable prospectus supplement for any series of debt securities, events of default with respect to
any series of debt securities are:
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failure to pay the interest or any additional amount payable on any debt security of such series when due and continuance of that default for 30 days;
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failure to pay the principal of or any premium on any debt security of such series when due and payable; |
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failure to deposit any sinking fund payment when and as due by the terms of any debt security of such series; |
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failure to perform or the breach of any covenant or warranty in the applicable indenture or the debt securities (other than a covenant or warranty
included solely for the benefit of a series of debt securities other than such series) that continues for 60 days after we are given written notice by the trustee or we and the trustee are given written notice by the holders of at least 25% of the
outstanding debt securities of such series; |
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in the case of the senior debt securities, any event of default under any mortgage, indenture or other instrument securing or evidencing any
indebtedness of us or any significant subsidiary for money borrowed, resulting in such indebtedness in principal amount exceeding $10,000,000 becoming or being declared due and payable prior to the date on which it would otherwise become due and
payable, if the acceleration is not rescinded or annulled within 30 days after written notice; |
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in the case of the senior debt securities, certain events of bankruptcy, insolvency or reorganization of us or any of our significant subsidiaries and
in the case of the subordinated debt securities, certain events of bankruptcy, insolvency or reorganization of us or a major depositary institution subsidiary; or |
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any other event of default included in any indenture or supplemental indenture. (Section 501) |
If a default occurs with respect to any series of senior or subordinated debt securities, the applicable indenture trustee will give the
holders of those debt securities notice of the default as and to the extent provided by the Trust Indenture Act. (Section 501)
If an event of default with respect to any series of senior debt securities occurs and continues, either the senior indenture trustee or the holders of not less than 25% of the aggregate principal amount
of the outstanding senior debt securities of that series may declare the principal amount (or such lesser amount as may be provided for the senior debt securities of such series) of all the senior debt securities of that series to be due and payable
immediately. Payment of the principal of subordinated debt securities may be accelerated only in the case of certain events of bankruptcy, insolvency or reorganization of us or one of our major depositary institution subsidiaries. Subordinated debt
securities cannot be accelerated if we default in our performance of any other covenant, including payment of principal or interest. (Section 502)
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Any time after a declaration of acceleration has been made and before a judgment or decree
for payment of the money due 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 senior or
subordinated debt securities of that series. (Section 502)
The majority holders may direct the time, method and place of
conducting any proceeding for any remedy available to the applicable indenture trustee, or exercising any trust or power conferred on the applicable indenture trustee, for the senior or subordinated debt securities of that series.
(Section 512). The applicable indenture trustee generally is not obligated to exercise any of its rights or powers under any senior or subordinated indenture at the request or direction of any of the holders, unless those holders offer the
applicable indenture trustee reasonable indemnity. (Section 601)
A holder does not have the right to institute a
proceeding with respect to the indenture, for the appointment of a receiver or a trustee, or for any other remedy, unless:
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the holder has previously given written notice to the applicable indenture trustee of a continuing event of default; |
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the holders of not less than 25% of the aggregate principal amount of the outstanding debt securities of the applicable series have made a written
request to the applicable indenture trustee to institute proceedings in respect of such event of default in its own name as trustee under the applicable indenture, and such holders have offered to the applicable indenture trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; |
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the applicable indenture trustee has failed to institute a proceeding within 60 days after receipt of such notice, request and offer of indemnity; and
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the applicable indenture trustee has not received an inconsistent direction from the majority holders within such
60-day period. (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 senior and subordinated debt securities of the applicable series. (Section 508)
Waivers of Certain Covenants and Past Defaults
The holders of not less than a majority of the aggregate principal amount of the outstanding senior and subordinated debt securities of each series may, on behalf of all holders of that series, waive our
compliance with certain restrictive provisions of the applicable indenture. They also may waive any past default with respect to that series under the applicable indenture, except (1) a default in the payment of principal of, premium, if any,
interest on or any additional amount, or (2) a default in the performance of certain covenants which cannot be modified without the consent of all of the holders of the applicable series. (Sections 513 and 1008)
Amendments to the Indentures
Supplemental Indentures with Consent of Holders
Unless we indicate otherwise in the applicable prospectus supplement, we and the applicable trustee may modify or amend an indenture, with the consent of the holders of at least 66-2/3% in principal amount of each series of the senior or subordinated debt securities affected by the modification or amendment. However, no modification or amendment may, without the consent of each holder
affected by the modification or amendment:
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change the due date of the principal of, or any premium or installment of interest on, or any additional amounts with respect to any debt security;
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reduce the principal amount of, or the rate of interest on, or any additional amounts or premium, if any, payable with respect to any debt security,
or, except as otherwise permitted, change an obligation to pay additional amounts with respect to any debt security, or adversely affect the right of repayment at the option of any holder, if any; |
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change the place of payment, the currency in which the principal of, any premium, if any, or interest on, or any additional amounts with respect to any
debt security is payable or impair the right to institute suit for the enforcement of any such payment on or after the due date thereof (or, in the case of redemption, on or after the redemption date or, in the case of repayment at the option of the
holder, on or after the date for repayment); |
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reduce the percentage in principal amount of outstanding debt securities of any series the consent of whose holders is required for any supplemental
indenture, or the consent of whose holders is required for any waiver (of compliance with certain provisions of the applicable indenture or certain defaults thereunder and their consequences) under the applicable indenture or reduce requirements for
quorum or voting; |
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modify any of the provisions in the applicable indenture provisions described above under Waivers of Certain Covenants and Past Defaults
and in this section Amendments to the IndenturesSupplemental Indentures with Consent of Holders, except to increase any percentage in principal amount of outstanding debt securities of any series the consent of whose holders is
required for a supplemental indenture or waiver, or to provide that certain other provisions of the applicable indenture cannot be modified or waived without the consent of the holders of each outstanding debt security affected thereby;
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adversely affect the right of any holder to convert any convertible debt securities; or |
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in the case of the subordinated indenture, modify the subordination provisions in a manner adverse to the holders of the subordinated debt securities.
(Section 902) |
Supplemental Indentures without Consent of Holders
Except as otherwise provided in the applicable prospectus supplement, we and the applicable indenture trustee may modify and amend an
indenture without the consent of any holder for any of the following purposes:
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to evidence the succession of another person to us, and the assumption by the successor of our covenants in the applicable indenture and in the debt
securities; |
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to add to our covenants for the benefit of the holders of all or any series of debt securities or to surrender any right or power conferred upon us in
the applicable indenture; |
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to add or change any provisions of the applicable indenture to provide that bearer debt securities may be registrable as to principal, to change or
eliminate restrictions on payments with respect to debt securities, to permit registered securities to be exchanged for bearer securities, to permit bearer securities to be exchanged for bearer securities of other authorized denominations or to
permit or facilitate the issuance of securities in uncertificated form, provided any such action does not adversely affect the interests of the holders of any debt securities or related coupons in any material respect; |
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to establish the form or terms of debt securities of any series and any related coupons; |
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to evidence and provide for the acceptance of appointment by a successor trustee and to add to or change any provisions of the applicable indenture as
necessary to provide for or facilitate the administration of the trusts under the applicable indenture by more than one trustee; |
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to cure any ambiguity or to correct or supplement any provision in the applicable indenture that may be defective or inconsistent with any other
provision of the applicable indenture, or to make any other provisions with respect to matters or questions arising under the applicable indenture which do not adversely affect the interests of the holders of any debt securities or related coupons
in any material respect; |
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to modify 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 add additional events of default with respect to all or any series of debt securities; |
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to supplement any of the provisions of the applicable indenture to the extent necessary to permit or facilitate the defeasance and discharge of any
series of debt securities, provided the action does not adversely affect the interests of the holders of any debt securities of that series or related coupons or any other debt securities or related coupons in any material respect;
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to secure the debt securities; |
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to amend or supplement any provision of the applicable 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; and |
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to make certain provisions with respect to conversion rights. (Section 901) |
Legal Defeasance and Covenant Defeasance
If the applicable prospectus supplement provides for defeasance, we may at any time elect to defease and will be deemed to have paid and discharged our obligations on the applicable debt securities if:
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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; |
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either (1) we have irrevocably deposited with the applicable indenture trustee sufficient cash or government securities to pay when due all the
principal of, premium, if any, interest on and additional amounts, if any, with respect to the applicable debt securities, through the stated maturity or redemption date of the applicable debt securities (or, in the case of debt securities which
have become due and payable, through the date of such deposit), or (2) we have properly fulfilled such other means of satisfaction and discharge as is provided in or pursuant to the applicable indenture for the applicable debt securities;
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we have paid all other sums payable under the applicable indenture with respect to the applicable debt securities and any related coupons;
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we have delivered to the applicable trustee a certificate of our independent public accountants certifying as to the sufficiency of the amounts
deposited by us, and an officers certificate and opinion of counsel as required by the applicable indenture; and |
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we have delivered to the applicable trustee an opinion of counsel to the effect that the holders will have no federal income tax consequences as a
result of the deposit or termination and if the applicable debt securities are listed on the New York Stock Exchange, an opinion of counsel that the applicable debt securities will not be delisted. |
In the case of a defeasance, the holders of the applicable debt securities of the series will not be entitled to the benefits of the
applicable indenture, except for the registration of transfer or exchange and the replacement of stolen, lost or mutilated applicable debt securities and the requirements regarding the maintenance of an office or agency where the applicable debt
securities can be surrendered for payment or registration of transfer or exchange and the right of the holders of the applicable debt securities to receive from the deposited funds payment of the principal of, premium, if any, interest on, and any
additional amounts, if any, with respect to the applicable debt securities when due. (Section 402)
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Determining the Outstanding Debt Securities
Unless otherwise provided in or pursuant to the applicable indenture, we will consider the following factors in determining whether the
holders of the requisite principal amount of outstanding debt securities have given any request, demand, authorization, direction, notice, consent or waiver under the applicable indenture or are present at a meeting of holders of debt securities for
quorum purposes:
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in the case of any debt security that by its terms provides for declaration of a principal amount less than the principal face amount of the debt
security to be due and payable upon acceleration, the principal amount that will be deemed to be outstanding will be the principal amount that would be declared to be due and payable upon a declaration of acceleration thereof at the time of such
determination; |
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in the case of any indexed security, the principal amount that will be deemed to be outstanding will be the principal face amount of the indexed
security at original issuance; |
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in the case of any debt security denominated in one or more foreign currency units, the principal amount that will be deemed to be outstanding will be
the U.S. dollar equivalent based on the applicable exchange rate or rates at the time of sale; and |
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any debt securities owned by us or any other obligor upon the debt securities or any of our or such other obligors affiliates, will be
disregarded and deemed not to be outstanding. (Section 101) |
Governing Law
The indentures will be governed by, and construed in accordance with, the laws of the State of New York.
Regarding the Indenture Trustees
In the normal course of business, we and our subsidiaries conduct banking transactions with the indenture trustees, and the indenture trustees conduct banking transactions with us and our subsidiaries.
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DESCRIPTION OF PREFERRED STOCK
Our Restated Certificate of Incorporation authorizes our Board of Directors, or the Board, to create and provide for the issuance of 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 the designations, powers, preferences and rights (including conversion, voting and other rights)
and the qualifications, limitations or restrictions, of any preferred stock. Currently, 50,000,000 shares of our capital stock are classified as preferred stock under our Restated Certificate of Incorporation. As of December 31, 2014, 1,875,000
shares of preferred stock were issued and outstanding.
General
The following description summarizes the general terms and provisions of our authorized preferred stock. The particular terms of any
series of preferred stock we offer will be described in the related prospectus supplement. You should read the particular terms of any series of preferred stock we offer described in the related prospectus supplement, together with the more detailed
provisions of our Restated Certificate of Incorporation and the certificate of designation relating to the particular series of preferred stock, for provisions that may be important to you. Our Restated Certificate of Incorporation has been filed as
an exhibit to the registration statement of which this prospectus is a part. The certificate of designation relating to the particular series of preferred stock will be filed as an exhibit to a document incorporated by reference in the registration
statement. The prospectus supplement will also state whether any of the terms summarized below do not apply to the series of preferred stock being offered. Terms which could be included in a prospectus supplement include:
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the designation of the preferred stock and the number of shares offered; |
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the amount of liquidation preference per share; |
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the price at which the preferred stock will be issued; |
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the dividend rate, or its method of calculation, and the dates on which dividends will be payable; |
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whether the dividends will be cumulative or noncumulative, and, if cumulative, the dates from which dividends will commence to cumulate;
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any redemption or sinking fund provisions of the preferred stock; |
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whether we have elected to offer depositary shares, as described below; |
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the terms and conditions, if any, upon which the preferred stock will be convertible into or exchangeable for common stock or other securities; and
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any additional voting, dividend, liquidation, redemption, sinking fund and other rights, preferences, privileges, limitations and restrictions of the
preferred stock. |
The preferred stock will, when issued, be fully paid and nonassessable and have no
preemptive rights. Preferred stock will have the dividend, liquidation, and voting rights described below, unless we indicate otherwise in the applicable prospectus supplement relating to a particular series of preferred stock. You should read the
prospectus supplement relating to any series of preferred stock for the series specific terms.
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 our stock record books of the Corporation or, if applicable, the records of the depositary on the record dates fixed by the Board or its
committee. Dividends on any series of preferred stock may be cumulative or noncumulative. The Corporations ability to pay dividends on the preferred stock depends on the ability of COBNA and CONA to pay dividends to the Corporation. The
ability of the Corporation, COBNA and CONA to pay dividends in the future is subject to bank regulatory requirements and capital guidelines and policies established by the Federal Reserve Board.
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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 the 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 we indicate otherwise 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 liquidation 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 the Corporation is a holding company, the
rights of its stockholders to participate in the assets of any subsidiary, including COBNA and CONA, upon the subsidiarys liquidation or recapitalization may be subject to the prior claims of the subsidiarys creditors, except to the
extent that the Corporation may itself be a creditor with recognized claims against the subsidiary.
Redemption
A series of preferred stock may be redeemable, in whole or in part, at our option or at the option of the holder of the stock, and may be
subject to mandatory redemption pursuant to a sinking fund, under the terms described in any applicable prospectus supplement.
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 we default 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 and Exchange
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 or exchangeable for our common stock or other securities, including:
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the number of shares of common stock or other securities into which the shares of preferred stock are convertible or for which the shares of preferred
stock may be exchanged; |
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the conversion price or exchange price or manner of calculation; |
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the conversion period or exchange period; |
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provisions as to whether conversion or exchange will be at the option of the holders of the preferred stock or at our option, if applicable;
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any events requiring an adjustment of the conversion price or exchange price; and |
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provisions affecting conversion or exchange in the event of the redemption of the series of preferred stock. |
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DESCRIPTION OF COMMON STOCK
The Corporation is authorized to issue 1,000,000,000 shares of common stock, par value $.01 per share. As of December 31, 2014,
553,391,311 shares of common stock 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 nonassessable.
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 Amended and Restated 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. Except as otherwise provided by law, the Restated Certificate of Incorporation or the Amended and Restated Bylaws, a majority of the votes cast is required for all actions to be taken by
stockholders. Directors in uncontested elections shall be elected by a majority of votes cast; however, in contested elections, a plurality standard shall apply. 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.
The foregoing rights may be subject to voting and other rights that we may grant from time to time to the holders of other classes of our
securities.
For a more detailed description of the terms of these and similar rights granted to the holders of other classes
of our securities, please refer to the applicable prospectus supplement for any offering of our common stock pursuant to this registration statement and to the documents and other information that we incorporate by reference elsewhere in this
prospectus. See Where You Can Find More Information.
Distribution
To the extent outstanding preferred stock provides for a dividend preference, any dividends payable on our common stock are subject to
such preference. Dividends must be declared by the Board out of legally available funds. If we liquidate, dissolve or wind up our affairs, common stockholders are entitled to share proportionately in the assets available for distribution to common
stockholders.
Anti-Takeover Provisions of the Restated Certificate of Incorporation and Amended and Restated Bylaws
Certain provisions in our Restated Certificate of Incorporation and Amended and Restated Bylaws could make more difficult or discourage a
tender offer, proxy contest or other takeover attempt that is opposed by the Board but which might be favored by the stockholders. The Restated Certificate of Incorporation and Amended and Restated Bylaws are filed as exhibits to the registration
statement, and certain provisions are summarized below.
Board of Directors. Our Restated Certificate of Incorporation
and Amended and Restated Bylaws provide that, other than directors elected by any series of preferred stock, directors will be elected annually to one-year terms in office.
Number of Directors; Removal; Filling Vacancies. Generally, 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 Amended and Restated Bylaws are further amended, the Board could prevent any
stockholder from enlarging the Board of Directors and filling the new directorships with the stockholders own nominees.
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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 provides that directors may be removed without cause, except that directors serving the remainder of a three-year term in
office may be removed only for cause. It also provides that directors may only be removed, whether for or without cause, upon the affirmative vote of holders of at least a majority 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.
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 Amended and Restated Bylaws, special meetings of stockholders can be called by the
Chair of the Board or by the Board pursuant to a resolution adopted by a majority of 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 Chair of
the Board 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 Chair of the Board, the Board or a stockholder who has given proper notice. A stockholders
notice to us proposing to nominate a person for election as a director must also contain certain information described in the Amended and Restated Bylaws.
In October 2013, the Board approved changes to the Corporations Amended and Restated Bylaws. The amendments included the following changes, among others:
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clarifying that the advance notice bylaw represents the exclusive means for a stockholder to bring nominations or other business proposals before a
meeting of stockholders; |
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changing the advance notice period for stockholder nominations or business proposals at annual meetings of stockholders from 70 to 90 days before the
first anniversary of the preceding years annual meeting to 90 to 120 days before such anniversary; |
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expanding the scope of disclosures required of a stockholder seeking to bring a nomination or other business proposal before a stockholder meeting and
requiring the stockholder to update such disclosure as needed so that it remains accurate as of 10 business days prior to the meeting date; and |
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adding that the Corporation may require proposed nominees for director to furnish additional information regarding the eligibility of the nominee to
serve as an independent director. |
You should refer to our Amended and Restated 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 Amended and Restated Bylaws include:
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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; |
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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 |
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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. |
Business Combinations. Certain mergers, share exchanges or sales of our assets with or to interested stockholders, as defined below, must be approved by the affirmative vote of the holders of at
least 75% of our voting stock, voting together as a single class, including 75% of our voting stock not owned directly or indirectly by any interested stockholder or any affiliate of any interested stockholder. 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 us or any of our subsidiaries, who or which:
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itself or along with its affiliates beneficially owns, directly or indirectly, more than 5% of the then-outstanding voting stock;
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is an affiliate of us and at any time within the two-year period immediately prior to the date in question itself or along with its affiliates
beneficially owned, directly or indirectly, 5% or more of the then-outstanding voting stock; or |
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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 non-public transactions. |
Liability of Directors; Indemnification. A director generally will not be personally liable for monetary damages to us or our stockholders for breach of fiduciary duty as a director. A director may
be held liable, however, for the following:
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any breach of the directors duty of loyalty to us or our stockholders; |
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acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
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paying a dividend or approving a stock repurchase in violation of Delaware law; or |
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any transaction from which the director derived an improper personal benefit. |
We indemnify our 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 generally may be amended with a majority vote of the stockholders, but some provisions, including some of the provisions discussed above, can
only be amended with an affirmative vote of the holders at least 80% of the then-outstanding voting stock, including the affirmative vote of the holders of 80% of the then-outstanding voting stock not owned directly or indirectly by any interested
stockholder or any affiliate of any interested stockholder. The Amended and Restated Bylaws generally may be amended by the Board or by the stockholders; provided that in the case of amendments by the stockholders the affirmative vote of at least a
majority of the then-outstanding voting stock is required. These vote requirements prevent a stockholder with less than a majority of the common stock from circumventing the requirements of the Amended and Restated Bylaws or a stockholder with only
a majority of the common stock from circumventing certain provisions of the Restated Certificate of Incorporation by simply amending or repealing them.
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Anti-Takeover Legislation
We are a Delaware corporation and are 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 business combination is approved by the board of directors and authorized by the
affirmative vote of at least 66-2/3% of the outstanding voting stock of the corporation which is not owned by the interested stockholder. 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 that is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation
at any time within three years immediately prior to the relevant date.
Although stockholders may elect to exclude a
corporation from Section 203s restrictions, our Restated Certificate of Incorporation and Amended and Restated Bylaws do not exclude us from Section 203s restrictions. The provisions of Section 203 may encourage companies
interested in acquiring us to negotiate in advance with the Board, since Section 203 does not require stockholder approval for a corporation to engage in any business combination with any interested stockholder, if the board of directors prior
to the time that such stockholder became an interested stockholder approved either the business combination or the transaction in which the stockholder became an interested stockholder. Business combinations are discussed more fully above.
Dividend Reinvestment Plan
Our dividend reinvestment and stock purchase plan (as amended and supplemented, the DRIP Program) 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 $10,000.
Optional cash investments in excess of $10,000 may be made only with our express permission, and, in our sole discretion, we may grant a discount for such optional cash investments (from 0% to 5%). We use proceeds from the DRIP Program for general
corporate purposes.
Transfer Agent
The transfer agent and registrar for the common stock is Computershare Trust Company, N.A.
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DESCRIPTION OF OTHER SECURITIES
We will set forth in the applicable prospectus supplement a description of any preferred stock, depositary shares, purchase contracts,
warrants or units issued by us that may be offered pursuant to this prospectus.
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RESALE BY SELLING SECURITYHOLDERS
Selling securityholders may use this prospectus in connection with offering our securities for resale. The applicable prospectus
supplement will identify the selling securityholders and the terms of the securities offered for resale. Selling securityholders may be deemed to be underwriters in connection with the securities they resell and any profits on the resales may be
deemed to be underwriting discounts and commissions under the Securities Act. The selling securityholders will receive all the proceeds from the resale of our securities. We will not receive any proceeds from resales by selling securityholders.
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BOOK-ENTRY PROCEDURES AND SETTLEMENT
Unless we indicate otherwise in the applicable prospectus supplement, the debt securities, common stock, preferred stock or other
securities described herein, which we refer to collectively as the securities, will be book-entry securities. All book-entry securities of the same issue initially will be represented by one or more fully registered global securities. Each global
security will be deposited upon issuance with, or on behalf of, The Depository Trust Company, as depositary (DTC), and will be registered in the name of DTC or a nominee of DTC, in each case for credit to an account of a direct or
indirect participant in DTC as described below. DTC will thus be the only registered holder of the securities and will be considered the sole owner of the securities for purposes of any indenture, warrant agreement, unit agreement, purchase
contract, or similar agreement governing the terms of such securities, as applicable, which we refer to as a governing agreement.
Global securities may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the global securities may be held through
the Euroclear System, or Euroclear, and Clearstream Banking, S.A., or Clearstream, each as indirect participants in DTC. Transfers of beneficial interests in the global securities will be subject to the applicable rules and procedures of DTC and its
direct and indirect participants, including, if applicable, those of Euroclear and Clearstream, which may change from time to time. DTC has advised us as follows: it is a limited-purpose trust company organized under the New York Banking Law, a
banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds and provides asset servicing for securities that its participants deposit with it. DTC also facilitates the post-trade settlement among participants of sales
and other securities transactions in deposited securities through electronic computerized book entry transfers and pledges between participants accounts, thereby eliminating the need for physical movement of securities certificates.
Direct participants in DTCs system include both U.S. and non-U.S. securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. Access to DTCs system also is available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear
through or maintain a custodial relationship with a direct participant, either directly or indirectly, which we collectively call indirect participants. Persons that are not participants may beneficially own securities held by or on behalf of DTC
only through the participants or the indirect participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the participants and the indirect participants.
The rules applicable to DTC and its participants are on file with the Securities and Exchange Commission. More information about DTC can be found at http://www.dtcc.com/ and http://www.dtc.org/.
DTC has also advised us that, upon the issuance of a global security evidencing any securities, it will credit, on its book-entry
registration and transfer system, the respective principal or face amounts of the securities evidenced thereby to the designated accounts of participants. Ownership of beneficial interests in the global securities will be limited to participants or
persons that may hold interests through participants. Ownership of beneficial interests in the global securities will be shown on, and the transfer of those ownership interests may be effected only through, records maintained by DTC or its nominee
(with respect to participants) and the records of participants and indirect participants (with respect to other owners of beneficial interests in the global securities).
Investors in the global securities that are participants may hold their interests therein directly through DTC. Investors in the global securities that are not participants may hold their interests
therein indirectly through organizations (including Euroclear and Clearstream) that are participants in such system. Euroclear and Clearstream will hold interests in the global securities on behalf of their participants through customers
securities accounts in their respective names on the books of their respective depositaries. All interests in a global security, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those
interests held through Euroclear or Clearstream may also be subject to the procedures and requirements of such systems.
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The laws of some states require that certain purchasers of securities take physical delivery
of those securities in definitive form. These laws may impair the ability of holders to transfer beneficial interests in global securities to certain purchasers. Because DTC can act only on behalf of the participants, which in turn act on behalf of
the indirect participants, the ability of a person having beneficial interests in a global security to pledge such interests to persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be
affected by the lack of a physical certificate evidencing such interests.
So long as DTC or any successor depositary for a
global security, or any nominee, is the registered holder of such global security, DTC or such successor depositary or nominee will be considered the sole owner or holder of the securities represented by such global security for all purposes under
the governing agreement applicable to that global security. Except as set forth below, owners of beneficial interests in a global security will not be entitled to have the securities represented by such global security registered in their names,
will not receive or be entitled to receive physical delivery of such securities in definitive form, and will not be considered the owners or holders thereof for any purpose under the governing agreement applicable to that global security.
Accordingly, each person owning a beneficial interest in a global security must rely on the procedures of DTC and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any
rights of a holder of securities under the governing agreement applicable to that global security. We understand that, under existing industry practices, in the event that we request any action of holders or that an owner of a beneficial interest in
a global security desires to give any consent or take any action under the governing agreement applicable to that global security, DTC or any successor depositary would authorize the participants holding the relevant beneficial interests to give or
take such action or consent, and such participants would authorize beneficial owners owning through such participants to give or take such action or consent or would otherwise act upon the instructions of beneficial owners owning through them.
Unless we indicate otherwise in the applicable prospectus supplement, any payments due with respect to any securities
(including payments of principal and interest with respect to debt securities and dividends with respect to equity securities) that are registered in the name of or held by DTC or any successor depositary or nominee will be payable to DTC or such
successor depositary or nominee, as the case may be, in its capacity as registered holder of the global securities representing the securities. Neither we, nor any trustee, registrar, paying agent or other agent in respect of the securities, nor any
other agent of us or any such person will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the global securities, for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests, or for any other matter relating to the actions and practices of DTC or any of its participants or indirect participants.
We have been advised by DTC that its current practice, upon receipt of any payment in respect of a global security, is to credit
participants accounts with payments on the payment date, unless DTC has reason to believe it will not receive payments on such payment date. Each relevant participant is credited with an amount proportionate to its beneficial ownership of an
interest in the principal or face amount of the relevant security as shown on the records of DTC. Payments by participants and indirect participants to owners of beneficial interests in a global security held through such participants and indirect
participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such
participants or indirect participants, and will not be the responsibility of us, any trustee, registrar, paying agent or other agent in respect of the securities, nor any agent of us or of any such person. Neither we nor any such person or agent
will be liable for any delay by DTC or by any participant or indirect participant in identifying the beneficial owners of the securities, and we and any such person or agent may conclusively rely on and will be protected in relying on instructions
from DTC or its nominee for all purposes.
Crossmarket transfers between the participants in DTC, on the one hand, and
Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTCs rules on behalf of Euroclear or Clearstream, as the case may be, by its depositary; however, such cross-market transactions will
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require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established
deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its
behalf by delivering or receiving interests in the relevant global security in DTC, and making or receiving payment in accordance with normal procedures for same- day funds settlement applicable to DTC. Euroclear participants and Clearstream
participants may not deliver instructions directly to the depositories for Euroclear or Clearstream. DTC has advised us that it will take any action permitted to be taken by a holder of securities only at the direction of one or more participants to
whose account DTC has credited the interests in the applicable global security and only in respect of such portion of the aggregate principal or face amount of the securities as to which such participant or participants has or have given such
direction.
Except as provided in the applicable prospectus supplement, owners of beneficial interests in a global security
will not be entitled to receive physical delivery of the related securities in certificated form and will not be considered the holders of the related securities for any purpose under the governing agreement applicable to that global security, and
no global security will be exchangeable, except for another global security of the same denomination and tenor to be registered in the name of DTC or a successor depositary or nominee. Accordingly, each beneficial owner must rely on the procedures
of DTC and, if the beneficial owner is not a participant, on the procedures of the participant or indirect participant through which the beneficial owner owns its interest to exercise any rights of a holder under the applicable governing agreement.
However, if there is an event of default under any applicable governing agreement, DTC reserves the right to exchange the relevant global securities for securities in certificated form, and to distribute such securities to the participants.
Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the
global securities among participants in DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform such procedures, and may discontinue such procedures at any time. Neither we, nor any indenture trustee, nor
any agent of us or of any such person will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures
governing their operations.
The information in this section, including any description of the operations and procedures of
DTC, Euroclear and Clearstream, has been provided solely as a matter of convenience. We do not take any responsibility for the accuracy of this information, and this information is not intended to serve as a representation, warranty or contract
modification of any kind. The operations and procedures of DTC, Euroclear and Clearstream are solely within the control of such settlement systems and are subject to changes by them. We urge investors to contact such systems or their participants
directly to discuss these matters.
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CERTAIN LEGAL MATTERS
Gibson, Dunn & Crutcher LLP will pass upon certain legal matters in connection with the securities. Gibson, Dunn &
Crutcher LLP has from time to time acted as counsel for us and our subsidiaries and affiliates and may do so in the future. Morrison & Foerster LLP will pass upon certain legal matters for the underwriters.
EXPERTS
Ernst & Young LLP, an independent registered public accounting firm, has audited our consolidated financial statements included in our Annual Report on
Form 10-K for the year ended December 31, 2014, and the effectiveness of our internal control over financial reporting as of December 31, 2014, as set forth in their reports, which are
incorporated by reference in this prospectus and elsewhere in the registration statement. Our financial statements are incorporated by reference in reliance on Ernst & Young LLPs reports, given on their authority as experts in
accounting and auditing.
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7,500,000 Shares
Common Stock
($0.01 Par Value)
PROSPECTUS
SUPPLEMENT
DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
April 9, 2015
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