Exhibit 1.1
56,000,000 SHARES OF COMMON
STOCK
OF
CAPITAL ONE FINANCIAL
CORPORATION
UNDERWRITING
AGREEMENT
May 11, 2009
Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
Dear Sirs:
Capital One Financial Corporation, a
Delaware corporation (the “Company”), proposes to issue
and sell 56,000,000 shares (the “Firm Shares”) of its
common stock, par value $0.01 per share (the “Common
Stock”) to you (the “Underwriter”). In addition,
the Company proposes to grant to the Underwriter the option to
purchase from the Company up to an additional 8,400,000 shares of
Common Stock (the “Option Shares”). The Firm Shares and
the Option Shares are hereinafter collectively sometimes referred
to as the “Shares.” The Shares are described in the
Prospectus which is referred to below.
1. Registration Statement and
Prospectus . The Company has prepared and filed with the
Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (File No. 333-159085) under
the Securities Act of 1933, as amended (the “Securities
Act”) in respect of its debt securities, its junior
subordinated debt securities, shares of its preferred stock, $0.01
par value, depositary shares, shares of its Common Stock, its
purchase contracts, units, trust preferred securities that may be
issued by a related trust, and warrants (as amended through the
date of this Agreement, being herein referred to as the
“Registration Statement”). Such Registration Statement
has become effective. The Registration Statement contains a base
prospectus in the form in which it has most recently been filed
with the Commission on or prior to the date of this Agreement (the
“Base Prospectus”), to be used in connection with the
public offering and sale of the Shares. Any preliminary prospectus
supplement to the Base Prospectus that describes the Shares and the
offering thereof and is used prior to filing of the Prospectus is
called, together with the Base Prospectus, a “preliminary
prospectus.” The term “Prospectus” shall mean the
final prospectus supplement relating to the Shares, together with
the Base Prospectus, that is first filed pursuant to Rule 424(b)
under the Securities Act after the date and time that this
Agreement is executed and delivered by the parties hereto but shall
not include any free writing prospectus (as such term is used in
Rule 405 under the Securities Act). Any Prospectus shall be deemed
to refer to and
include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Securities
Act; any reference to any amendment or supplement to any
preliminary prospectus or the Prospectus shall be deemed to refer
to and include any documents filed after the date of such
preliminary prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (collectively, the
“Exchange Act”), and incorporated by reference in such
preliminary prospectus or Prospectus, as the case may be. The
Company also has prepared and filed (or will file) with the
Commission the Issuer Free Writing Prospectuses (as defined below)
set forth on Schedule I hereto. All references in this Agreement to
the Registration Statement, a preliminary prospectus, the
Prospectus, or any amendments or supplements to any of the
foregoing, shall include any copy thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval
System (“EDGAR”).
2. Agreements to Sell and
Purchase . On the basis of the representations and warranties
contained in this Agreement, and subject to its terms and
conditions, the Company agrees to issue and sell, and the
Underwriter agrees to purchase from the Company the Firm Shares at
a purchase price of $26.95 per Share (the “Purchase
Price”).
In addition, the Company agrees to
issue and sell the Option Shares to the Underwriter as provided in
this Agreement, and the Underwriter, on the basis of the
representations and warranties contained in this Agreement, and
subject to its terms and conditions, shall have the option to
purchase from the Company the Option Shares at the Purchase
Price.
The Underwriter may exercise the
option to purchase the Option Shares at any time in whole, or from
time to time in part, on or before the thirtieth day following the
date of this Agreement, by written notice from the Underwriter to
the Company. Such notice shall set forth the aggregate number of
Option Shares as to which the option is being exercised and the
date and time when the Option Shares are to be delivered and paid
for which may be the same date and time as the Closing Date (as
hereinafter defined) but shall not be earlier than the Closing Date
nor later than the tenth full business day after the date of such
notice. Any such notice shall be given at least two business days
prior to the date and time of delivery specified
therein.
3. Terms of Public Offering .
The Company is advised by you that you propose (i) to make a
public offering of their respective portions of the Shares as soon
after the execution hereof as practicable and (ii) initially
to offer the Shares upon the terms set forth in the
Prospectus.
4. Delivery and Payment . The
Company will deliver, or cause to be delivered, the Shares to the
Underwriter for its account against payment by or on behalf of the
Underwriter of the Purchase Price by wire transfer of Federal
(same-day) funds to the account specified by the Company to the
Underwriter at least twenty-four hours in advance, by causing
Computershare Investor Services, LLC, as registrar, to register the
Shares in the name of Cede & Co., or such other nominee as
DTC may designate, and shall cause DTC to credit the Shares to the
account of the Underwriter at DTC. The time
2
and date of such delivery and payment, with
respect to the Firm Shares, shall be 10:00 A.M., New York City time
on the third business day, unless otherwise permitted by the
Commission pursuant to Rule 15c6-1 of the Exchange Act (the
“Closing Date”), following the date of the Prospectus
or such other time and date as the Underwriter and the Company may
agree upon in writing, and with respect to the Option Shares shall
be 10:00 A.M., New York City time, on the date specified by the
Underwriter in the written notice given by the Underwriter of its
election to purchase such Option Shares, or at such other time and
date as the Underwriter and the Company may agree upon in writing
(the “Option Closing Date”).
5. Agreements of the Company
. The Company agrees with you:
(a) To file the Prospectus with the
Commission pursuant to Rule 424(b)(5) not later than the second
business day following the execution and delivery of this
Agreement.
(b) During the period beginning at
the Time of Sale (as defined below) and ending on the later of the
Closing Date or such date as in the opinion of counsel for the
Underwriter, the Prospectus is no longer required by law to be
delivered in connection with sales by the Underwriter or a dealer,
including in circumstances where such requirement may be satisfied
pursuant to Rule 172 (the “Prospectus Delivery
Period”), prior to amending or supplementing the Registration
Statement, the Disclosure Package (as defined below) or the
Prospectus (including any amendment or supplement through
incorporation by reference of any report filed under the Exchange
Act), the Company shall furnish to the Underwriter for review a
copy of each such proposed amendment or supplement.
(c) If, during the Prospectus
Delivery Period, any event or development shall occur or condition
exist as a result of which the Disclosure Package or Prospectus as
then amended and supplemented would include any untrue statement of
a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
shall be necessary to amend or supplement the Disclosure Package or
the Prospectus, or to file under the Exchange Act any document
incorporated by reference in the Disclosure Package or the
Prospectus, in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or
if in the opinion of the Underwriter it is otherwise necessary to
amend or supplement the Registration Statement, the Disclosure
Package or the Prospectus, or to file under the Exchange Act any
document incorporated by reference in the Disclosure Package or the
Prospectus, or to file a new registration statement containing the
Prospectus, in order to comply with law, including in connection
with the delivery of the Prospectus, the Company agrees to
(i) notify the Underwriter of any such event or condition and
(ii) promptly prepare (subject to paragraph (b) above),
file with the Commission (and use its best efforts to have any
amendment to the Registration Statement or any new registration
statement be declared effective) and furnish at its own expense to
the Underwriter and to dealers, amendments or supplements to the
Registration Statement, the Disclosure Package or the Prospectus,
or any new registration statement, necessary in order to make the
statements in the Disclosure
3
Package or the Prospectus as so amended or
supplemented, in light of the circumstances then prevailing or
under which they were made, not misleading or so that the
Registration Statement, the Disclosure Package or the Prospectus,
as amended or supplemented, will comply with law.
(d) The Company represents that it
has not made, and agrees that, unless it obtains the prior written
consent of the Underwriter, it will not make, any offer relating to
the Shares that would constitute an issuer free writing prospectus
as defined in Rule 433 of the Securities Act (each, an
“Issuer Free Writing Prospectus”) or that would
otherwise constitute a “free writing prospectus” as
defined in Rule 405 of the Securities Act) required to be filed by
the Company with the Commission or retained by the Company under
Rule 433 of the Securities Act; provided that the prior written
consent of the Underwriter shall be deemed to have been given in
respect of any Free Writing Prospectus included in Schedule I
hereto. Any such free writing prospectus consented to by the
Underwriter is hereinafter referred to as a “Permitted Free
Writing Prospectus.” The Company agrees that (i) it has
treated and will treat, as the case may be, each Permitted Free
Writing Prospectus as an Issuer Free Writing Prospectus, and
(ii) has complied or will comply, as the case may be, with the
requirements of Rules 164 and 433 of the Securities Act applicable
to any Permitted Free Writing Prospectus, including in respect of
timely filing with the Commission, legending and record keeping.
The Company consents to the use by the Underwriter of (i) a
free writing prospectus that contains no “issuer
information” (as defined in Rule 433(h)(2) under the
Securities Act) that was not included (including through
incorporation by reference) in the Prospectus or a previously filed
Issuer Free Writing Prospectus, (ii) any Issuer Free Writing
Prospectus listed on Schedule I hereto, or (iii) information
describing the preliminary terms of the Shares or their
offering.
(e) To advise you promptly and, if
requested by you, to confirm such advice in writing, (i) of
any request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or the
Disclosure Package or for additional information, (ii) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for such
purposes, and (iii) of the happening of any event during the
Prospectus Delivery Period which makes any statement of a material
fact made in the Registration Statement or the Prospectus untrue or
which requires the making of any additions to or changes in the
Registration Statement or the Prospectus in order to make the
statements therein not misleading. To prepare and file with the
Commission, promptly upon your reasonable request, any amendment or
supplement to the Registration Statement, the Base Prospectus, the
Prospectus or the Disclosure Package which may be necessary or
advisable in connection with the distribution of the Shares by you,
and to use its best efforts to cause any such post-effective
amendment to the Registration Statement to become promptly
effective. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the
Company will make every reasonable effort to obtain the withdrawal
or lifting of such order at the earliest possible time.
4
(f) To furnish to you, without
charge, signed copies of the Registration Statement as first filed
with the Commission and of each amendment to it, including all
exhibits, and to furnish to you such number of conformed copies of
the Registration Statement as so filed and of each amendment to it,
without exhibits, as you may reasonably request.
(g) During the Prospectus Delivery
Period, to furnish to the Underwriter and dealer as many copies of
the Base Prospectus and the Prospectus (each as amended or
supplemented) as the Underwriter or dealer may reasonably
request.
(h) Prior to any public offering of
the Shares, to cooperate with you and counsel for the Underwriter
in connection with the registration or qualification of the Shares
for offer and sale by the Underwriter and by dealers under the
state securities or Blue Sky laws of such jurisdictions as you may
request, to continue such qualification in effect so long as
required for distribution of the Shares and to file such consents
to service of process or other documents as may be necessary in
order to effect such registration or qualification, provided that
in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not so qualified or take
any action that would subject it to service of process in suits
other than those arising out of the offering or sale of the Shares
in any jurisdiction where it is not now so subject.
(i) To make generally available to
its security holders as soon as reasonably practicable an earnings
statement covering a period of at least twelve months after the
effective date of the Registration Statement which shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule
158 under the Securities Act.
(j) If at any time during the five
year period after the date of this Agreement, the Company ceases to
file reports with the Commission pursuant to Section 13 or
15(d) of the Exchange Act, (i) to mail as soon as reasonably
practicable after the end of each fiscal year to the record holders
of its Shares a financial report of the Company and its
subsidiaries on a consolidated basis (and a similar financial
report of all unconsolidated subsidiaries, if any), all such
financial reports to include a consolidated balance sheet, a
consolidated statement of operations, a consolidated statement of
cash flows and a consolidated statement of changes in
stockholders’ equity as of the end of and for such fiscal
year, together with comparable information as of the end of and for
the preceding year, certified by independent certified public
accountants, and (ii) to mail and make generally available as
soon as reasonably practicable after the end of each quarterly
period (except for the last quarterly period of each fiscal year)
to such holders, a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash flows
(and similar financial reports of all unconsolidated subsidiaries,
if any) as of the end of and for such period, and for the period
from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding
periods of the preceding year.
(k) To pay all costs, expenses, fees
and taxes incident to (i) the preparation, printing, filing
and distribution under the Securities Act of the Base Prospectus,
each preliminary prospectus and all amendments and supplements to
any of them prior to or
5
during the Prospectus Delivery Period, any
Issuer Free Writing Prospectus and the Disclosure Package,
(ii) the printing and delivery of the Prospectus and all
amendments or supplements to it during the Prospectus Delivery
Period, (iii) the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of the
several states (including in each case the fees and disbursements
of counsel for the Underwriter relating to such registration or
qualification and memoranda relating thereto), (iv) filings
and clearance with the Financial Industry Regulatory Authority,
Inc. in connection with the offering, (v) furnishing such
copies of the Registration Statement, the Prospectus and all
amendments and supplements thereto as may be requested for use in
connection with the offering or sale of the Shares by the
Underwriter or by dealers to whom Shares may be sold, (vi) the
preparation, issuance, execution and delivery of the Shares and
(vii) the fees and expenses of any transfer agent or registrar
in connection with the Shares.
(l) To apply the net proceeds from
the sale of the Shares in the manner described under the caption
“Use of Proceeds” in the Prospectus.
(m) To use its best efforts to do
and perform all things required or necessary to be done and
performed under this Agreement by the Company prior to the Closing
Date and to satisfy all conditions precedent to the delivery of the
Shares.
(n) For the period ending 75 days
after the date of the Prospectus, the Company will not
(i) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or
(ii) enter into any swap or other agreement that transfers, in
whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise, without the
prior written consent of the Underwriter, other than (v) the
Shares to be sold hereunder, (w) the issuance of shares of
Common Stock upon the exercise of an option or warrant or
conversion of a security outstanding on the date of this Agreement,
(x) grants and issuances of shares of Common Stock, options to
acquire Common Stock or other derivative securities pursuant to
stock-based compensation or incentive plans of the Company,
(y) the issuance of shares of Common Stock pursuant to the
Company’s dividend reinvestment plans or employee stock
purchase plans, and (z) the issuance, offer or sale of a Tier
1 instrument.
(o) Not to take, directly or
indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of
the price of the Shares.
(p) To use its best efforts to list,
subject to notice of issuance, the Shares on the New York Stock
Exchange (“NYSE”) and to maintain such
listing.
6
(q) To maintain a transfer agent
and, if necessary under the jurisdiction of incorporation of the
Company, a registrar for the Common Stock.
6. Representations and Warranties
of the Company . The Company represents and warrants to the
Underwriter that:
(a) The Company meets the
requirements for use of Form S-3 under the Securities Act. The
Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in
effect, and, to the best of the Company’s knowledge, no
proceedings for such purpose are pending before or threatened by
the Commission. No order preventing the use of any preliminary
prospectus or any Issuer Free Writing Prospectus has been issued by
the Commission.
(b) (i) At the time of filing the
Registration Statement, (ii) at the time of the most recent
amendment thereto for the purposes of complying with
Section 10(a)(3) of the Securities Act (whether such amendment
was by post-effective amendment, incorporated report filed pursuant
to Section 13 or 15(d) of the Exchange Act or form of
prospectus), and (iii) at the time the Company or any person
acting on its behalf (within the meaning, for this clause only, of
Rule 163(c)) made any offer relating to the Shares in reliance on
the exemption of Rule 163, the Company was a “well-known
seasoned issuer” as defined in Rule 405, including not having
been an “ineligible issuer” as defined in Rule
405.
(c) The Registration Statement is an
“automatic shelf registration statement” as defined in
Rule 405, that initially became effective within three years of the
date hereof.
(d) The Company has not received
from the Commission any notice pursuant to Rule 401(g) objecting to
the use of the automatic shelf registration statement form. If at
any time during the Prospectus Delivery Period the Company receives
from the Commission a notice pursuant to Rule 401(g)(2) or
otherwise ceases to be eligible to use the automatic shelf
registration statement form, the Company will (i) promptly
notify the Underwriter, (ii) promptly file a new registration
statement or post-effective amendment on the proper form relating
to the Shares, in a form satisfactory to the Underwriter,
(iii) use its best efforts to cause such registration
statement or post-effective amendment to be declared effective as
soon as practicable, and (iv) promptly notify the Underwriter
of such effectiveness. The Company will take all other action
necessary or appropriate to permit the public offering and sale of
the Shares to continue as contemplated in the registration
statement that was the subject of the Rule 401(g)(2) notice or for
which the Company has otherwise become ineligible. References
herein to the Registration Statement shall include such new
registration statement or post-effective amendment, as the case may
be.
(e) The Company agrees to pay the
required Commission filing fees relating to the Shares within the
time required by Rule 456(b)(1) without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and
457(r).
7
(f) (i) At the respective times the
Registration Statement and any post-effective amendment thereto
became or becomes effective prior to the Closing Date, neither the
Registration Statement nor such amendment included or will include
an untrue statement of a material fact or omitted or will omit to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, as of the date such amendment becomes
effective or such supplement is filed with the Commission, as the
case may be, will comply in all material respects with the
Securities Act, (iii) the Prospectus does not contain and, as
amended or supplemented, if applicable, as of the date such
amendment becomes effective or such supplement is filed with the
Commission, as the case may be, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph
(f) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to the Underwriter furnished to the Company in writing by
the Underwriter expressly for use therein, it being understood and
agreed that the only such information furnished by or on behalf of
the Underwriter consists of the information described as such in
Section 8 hereof and (iv) the documents incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3
under the Securities Act, at the time they were or hereafter are
filed with the Commission prior to the Closing Date, complied and
will comply in all material respects with the requirements of the
Exchange Act, and, when read together and with the other
information in the Prospectus, as of the date of the Prospectus and
at all times subsequent thereto up to the Closing Date, did not and
will not contain an untrue statement of material fact or did not
and will not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(g) The term “Disclosure
Package” shall mean (i) the Base Prospectus, including
the preliminary prospectus supplement dated May 11, 2009, as
amended or supplemented at the Time of Sale (as defined below),
(ii) the Issuer Free Writing Prospectuses, if any, identified
on Schedule I hereto and (iii) the public offering price of
the Shares. As of the Time of Sale, the Disclosure Package did not
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to
statements in or omissions from the Disclosure Package based upon
and in conformity with written information furnished to the Company
by the Underwriter through the Underwriter specifically for use
therein, it being understood and agreed that the only such
information furnished by or on behalf of the Underwriter consists
of the information described as such in Section 8 hereof. As
used in this paragraph and elsewhere in this Agreement “Time
of Sale” shall mean 6:15 a.m. on May 11,
2009.
(h) Each Issuer Free Writing
Prospectus does not include any information that conflicts with the
information contained in the Registration Statement, including any
document incorporated by reference therein that has not been
superseded or modified. The foregoing sentence does not apply to
statements in or omissions from any Issuer Free
8
Writing Prospectus based upon and in conformity
with written information furnished to the Company by the
Underwriter specifically for use therein, it being understood and
agreed that the only such information furnished by or on behalf of
the Underwriter consists of the information described as such in
Section 8 hereof.
(i) The Company has not distributed
and will not distribute, prior to the later of the Closing Date and
the completion of the Underwriter’s distribution of the
Shares, any offering materials in connection with the offering and
sale of the Shares other than a preliminary prospectus, the
Prospectus, and any Issuer Free Writing Prospectus reviewed and
consented to by the Underwriter and included in Schedule I
hereto.
(j) The Company and each of its
subsidiaries that is a “Significant Subsidiary” within
the meaning of such term as defined in Rule 1-02 of Regulation S-X
of the Commission (the “Significant Subsidiaries”) is
validly existing as a corporation (or, in the case of each of
Capital One Bank (USA), National Association and Capital One,
National Association, as a national banking association organized
under the laws of the United States) in good standing under the
laws of its jurisdiction of incorporation and has in all material
respects the corporate power and authority to operate its business
as it is currently being conducted and to own, lease and operate
its properties, and each is duly qualified and is in good standing
as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership
or leasing of property requires such qualification, except where
the failure to be so qualified would not have a material adverse
effect on the Company and its subsidiaries, taken as a
whole.
(k) All of the outstanding shares of
capital stock of, or other ownership interests in, each of the
Company’s Significant Subsidiaries have been duly authorized
and validly issued and are fully paid and non-assessable, and are
owned by the Company, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any
nature.
(l) The Company has an authorized
capitalization as set forth under the consolidated balance sheet
data contained in the Company’s Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 2009; all of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable
and are not subject to any preemptive or similar rights; except as
described in the Registration Statement, the Prospectus and the
Disclosure Package, there are no outstanding rights (including,
without limitation, pre-emptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any
shares of capital stock or other equity interest in the Company or
any of its subsidiaries, or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance
of any capital stock of the Company or any such subsidiary, any
such convertible or exchangeable securities or any such rights,
warrants or options; the capital stock of the Company, including
the Shares, conforms in all material
