BANK OF BOSTON CORP, 424B3, 1997-03-13

BANK OF BOSTON CORP
424B3, 1997-03-13
NATIONAL COMMERCIAL BANKS

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PROSPECTUS
BANKBOSTON CAPITAL TRUST II

OFFER TO EXCHANGE ITS
73/4% SERIES B CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
73/4% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY

BANK OF BOSTON CORPORATION

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON APRIL 8, 1997, UNLESS EXTENDED.
____________________

BankBoston Capital Trust II, a trust formed under the laws of the State
of Delaware (the "Trust"), hereby offers, upon the terms and subject to the
conditions set forth in this Prospectus (as the same may be amended or
supplemented from time to time, the "Prospectus") and in the accompanying
Letter of Transmittal (which together constitute the "Exchange Offer"), to
exchange up to $250,000,000 aggregate Liquidation Amount of its 73/4% Series
B Capital Securities (the "New Capital Securities") which have been
registered under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to a Registration Statement (as defined herein) of which this
Prospectus constitutes a part, for a like Liquidation Amount of its
outstanding 73/4% Series A Capital Securities (the "Old Capital Securities"),
of which $250,000,000 aggregate Liquidation Amount is outstanding. Pursuant
to the Exchange Offer, Bank of Boston Corporation, a Massachusetts
corporation (the "Corporation"), is also offering to exchange (i) its
guarantee of payments of cash distributions and payments on liquidation of
the Trust or redemption of the New Capital Securities (the "New Guarantee")
for a like guarantee in respect of the Old Capital Securities (the "Old
Guarantee") and (ii) all of its 73/4% Series B Junior Subordinated Deferrable
Interest Debentures due December 15, 2026 (the "Old Junior Subordinated
Debentures") for a like aggregate principal amount of its 73/4% Series A
Junior Subordinated Deferrable Interest Debentures due December 15, 2026 (the
"New Junior Subordinated Debentures"), which New Guarantee and New Junior
Subordinated Debentures also have been registered under the Securities Act.
The Old Capital Securities, the Old Guarantee and the Old Junior Subordinated
Debentures are collectively referred to herein as the "Old Securities" and
the New Capital Securities, the New Guarantee and the New Junior Subordinated
Debentures are collectively referred to herein as the "New Securities."

The terms of the New Securities are identical in all material respects
to the respective terms of the Old Securities, except that (a) the New
Securities have been registered under the Securities Act and therefore will
not be subject to certain restrictions on transfer applicable to the Old
Securities, (b) the New Capital Securities will not contain the $100,000
minimum Liquidation Amount transfer restriction, (c) the New Capital
Securities will not provide for any increase in the Distribution rate
thereon, (d) the New Junior Subordinated Debentures will not contain the
$100,000 minimum principal amount transfer restriction and (v) the New Junior
Subordinated Debentures will not provide for any increase in the interest
rate thereon. See "Description of New Securities" and "Description of Old
Securities." The New Capital Securities are being offered for exchange in
order to satisfy certain obligations of the Corporation and the Trust under
the Registration Rights Agreement dated as of December 10, 1996 (the
"Registration Rights Agreement") among the Corporation, the Trust and the
Initial Purchasers (as defined herein). In the event that the Exchange Offer
is consummated, any Old Capital Securities which remain outstanding after
consummation of the Exchange Offer and the New Capital Securities issued in
the Exchange Offer will vote together as a single class for purposes of
determining whether holders of the requisite percentage in outstanding
Liquidation Amount thereof have taken certain actions or exercised certain
rights under the Trust Agreement.
(Continued on the following page)

This Prospectus and the Letter of Transmittal are first being mailed to
all holders of Old Capital Securities on March 10, 1997.

SEE "RISK FACTORS" COMMENCING ON PAGE 16 FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED BY HOLDERS IN DECIDING WHETHER TO TENDER OLD CAPITAL
SECURITIES IN THE EXCHANGE OFFER.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR AD-
EQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus is March 10, 1997.

The New Capital Securities and the Old Capital Securities (collectively,
the "Capital Securities") represent beneficial interests in the assets of the
Trust. The Corporation is the owner of all of the beneficial interests
represented by common securities of the Trust (the "Common Securities," and
together with the Capital Securities, the "Trust Securities"). The Bank of
New York is the Property Trustee of the Trust. The Trust exists for the sole
purpose of issuing the Trust Securities and investing the proceeds thereof in
the Junior Subordinated Debentures (as defined herein). The Junior
Subordinated Debentures will mature on December 15, 2026 (the "Stated
Maturity Date"). The Capital Securities will have a preference over the
Common Securities under certain circumstances with respect to cash
distributions and amounts payable on liquidation, redemption or otherwise.
See "Description of New Securities--Description of New Capital Securities--
Subordination of Common Securities."

As used herein, (i) the "Indenture" means the Indenture, dated as of
December 10, 1996, as amended and supplemented from time to time, between the
Corporation and The Bank of New York, as Debenture Trustee (the "Debenture
Trustee"), (ii) the "Trust Agreement" means the Amended and Restated
Declaration of Trust relating to the Trust among the Corporation, as Sponsor,
The Bank of New York, as Property Trustee (the "Property Trustee"), The Bank
of New York (Delaware), as Delaware Trustee (the "Delaware Trustee"), and the
Administrative Trustees named therein (collectively, with the Property
Trustee and Delaware Trustee, the "Issuer Trustees"). In addition, as the
context may require, unless otherwise expressly stated, (i) the term "Junior
Subordinated Debentures" includes the Old Junior Subordinated Debentures and
the New Junior Subordinated Debentures and (ii) the term "Guarantee" includes
the Old Guarantee and the New Guarantee.

Holders of the New Capital Securities will be entitled to receive
preferential cumulative cash distributions arising from the payment of
interest on the Junior Subordinated Debentures, accruing from December 10,
1996, and payable semi-annually in arrears on June 15 and December 15 of each
year, commencing June 15, 1997, at the annual rate of 73/4% of the
Liquidation Amount of $1,000 per New Capital Security ("Distributions"). The
Corporation will have the right to defer payments of interest on the Junior
Subordinated Debentures at any time and from time to time for a period not
exceeding 10 consecutive semi-annual periods with respect to each deferral
period (each, an "Extension Period"), provided that no Extension Period may
extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due, the Corporation may
elect to begin a new Extension Period, subject to the requirements set forth
in the Indenture. If and for so long as interest payments on the Junior
Subordinated Debentures are so deferred, Distributions on the Trust
Securities will also be deferred and the Corporation will not be permitted,
subject to certain exceptions described herein, to declare or pay any cash
distributions with respect to the Corporation's capital stock (which includes
common and preferred stock) or to make any payment with respect to debt
securities of the Corporation that rank pari passu with or junior to the
Junior Subordinated Debentures. During an Extension Period, interest on the
Junior Subordinated Debentures will continue to accrue (and the amount of
Distributions to which holders of the Trust Securities are entitled will
accumulate) at the rate of 73/4% per annum, compounded semi-annually, and
holders of Trust Securities will be required to accrue interest income for
United States federal income tax purposes. See "Description of New
Securities--Description of New Junior Subordinated Debentures--Option to
Extend Interest Payment Date" and "Certain United States Federal Income Tax
Considerations--Interest Income and Original Issue Discount."

Through the Guarantee, the guarantee agreement of the Corporation
relating to the Common Securities (the "Common Guarantee"), the Trust
Agreement, the Junior Subordinated Debentures and the Indenture, taken
together, the Corporation has guaranteed or will guarantee, as the case may
be, fully, irrevocably and unconditionally, all of the Trust's obligations
under the Trust Securities. See "Relationship Among the New Capital
Securities, the New Junior Subordinated Debentures and the New Guarantee--
Full and Unconditional Guarantee." The Old Guarantee and the Common
Guarantee guarantees, and the New Guarantee will guarantee, payments of
Distributions and payments on liquidation of the Trust or redemption of the
Trust Securities, but in each case only to the extent that the Trust holds
funds on hand legally available therefor and has failed to make such
payments, as described herein. See "Description of New Securities--
Description of New Guarantee." If the Corporation fails to make a required
payment on the Junior Subordinated Debentures, the Trust will not have
sufficient funds to make the related payments, including Distributions, on
the Trust Securities. The Guarantee and the Common Guarantee will not cover
any such payment when the Trust does not have sufficient funds on hand
legally available therefor. In such event, a holder of Capital Securities
may institute a legal proceeding directly against the Corporation to enforce
its rights in respect of such payment. See "Description of New Securities--
Description of New Junior Subordinated Debentures--Enforcement of Certain
Rights By Holders of New Capital Securities." The obligations of the
Corporation under the Guarantee, the Common Guarantee and the Junior
Subordinated Debentures will rank subordinate and junior in right of payment
to all Senior Indebtedness (as defined in "Description of New Securities--
Description of New Junior Subordinated Debentures--Subordination").

The Trust Securities will be subject to mandatory redemption in a Like
Amount (as defined herein), (i) in whole but not in part, on the Stated
Maturity Date upon repayment of the Junior Subordinated Debentures at a
redemption price equal to the principal amount of, plus accrued interest on,
the Junior Subordinated Debentures (the "Maturity Redemption Price"), (ii) in
whole but not in part, at any time, contemporaneously with the optional
prepayment of the Junior Subordinated Debentures, upon the occurrence and
continuation of a Special Event (as defined herein) at a redemption price
equal to the Special Event Prepayment Price (as defined below) (the "Special
Event Redemption Price"), and (iii) in whole or in part, on or after December
15, 2006, contemporaneously with the optional prepayment by the Corporation
of the Junior Subordinated Debentures, at a redemption price equal to the
Optional Prepayment Price (as defined below) (the "Optional Redemption
Price"). Any of the Maturity Redemption Price, the Special Event Redemption
Price and the Optional Redemption Price may be referred to herein as the
"Redemption Price." See "Description of New Securities--Description of New
Capital Securities--Redemption." Subject to the Corporation having received
prior approval of the Board of Governors of the Federal Reserve System (the
"Federal Reserve") to do so if then required under applicable capital
guidelines or policies of the Federal Reserve, the Junior Subordinated
Debentures will be prepayable prior to the Stated Maturity Date at the option
of the Corporation (i) on or after December 15, 2006, in whole or in part, at
a prepayment price (the "Optional Prepayment Price") equal to 103.875% of the
principal amount thereof on December 15, 2006, declining ratably on each
December 15 thereafter to 100% on or after December 15, 2016, plus accrued
interest thereon to the date of prepayment, or (ii) at any time, in whole but
not in part, upon the occurrence and continuation of a Special Event, at a
prepayment price (the "Special Event Prepayment Price") equal to the greater
of (a) 100% of the principal amount thereof or (b) the sum, as determined by
a Quotation Agent (as defined herein), of the present values of the remaining
scheduled payments of principal and the interest thereon discounted to the
prepayment date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (as defined herein) plus,
in either case, accrued interest thereon to the date of prepayment. Either of
the Optional Prepayment Price or the Special Event Prepayment Price may be
referred to herein as the "Prepayment Price." See "Description of New
Securities--Description of New Junior Subordinated Debentures--Optional
Prepayment" and "--Special Event Prepayment."

The Corporation will have the right at any time to terminate the Trust
and cause a Like Amount of the Junior Subordinated Debentures to be
distributed to the holders of the Trust Securities in liquidation of the
Trust, subject to (i) the Corporation having received an opinion of counsel
to the effect that such distribution will not be a taxable event to holders
of Capital Securities and (ii) the prior approval of the Federal Reserve to
do so if then required under applicable capital guidelines or policies of the
Federal Reserve. Unless the Junior Subordinated Debentures are distributed to
the holders of the Trust Securities, in the event of a liquidation of the
Trust as described herein, after satisfaction of liabilities to creditors of
the Trust as required by applicable law, the holders of the Capital
Securities generally will be entitled to receive a Liquidation Amount of
$1,000 per Capital Security plus accumulated Distributions thereon to the
date of payment. See "Description of New Securities--Description of New
Capital Securities--Liquidation of the Trust and Distribution of Junior
Subordinated Debentures."

--------------

The Trust is making the Exchange Offer of the New Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance
of the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other
transactions. However, neither the Corporation nor the Trust has sought its
own interpretive letter and there can be no assurance that the staff of the
Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
staff of the Division of Corporation Finance of the Commission, and subject
to the two immediately following sentences, the Corporation and the Trust
believe that New Capital Securities issued pursuant to this Exchange Offer in
exchange for Old Capital Securities may be offered for resale, resold and
otherwise transferred by a holder thereof (other than a holder who is a
broker-dealer) without further compliance with the registration and
prospectus delivery requirements of the Securities Act, provided that such
New Capital Securities are acquired in the ordinary course of such holder's
business and that such holder is not participating, and has no arrangement or
understanding with any person to participate, in a distribution (within the
meaning of the Securities Act) of such New Capital Securities. However, any
holder of Old Capital Securities who is an "affiliate", as such term is
defined in Rule 405 under the Securities Act (an "Affiliate") of the
Corporation or the Trust or who intends to participate in the Exchange Offer
for the purpose of distributing New Capital Securities, or any broker-dealer
who purchased Old Capital Securities from the Trust for resale pursuant to
Rule 144A under the Securities Act ("Rule 144A") or any other available
exemption under the Securities Act, (a) will not be able to rely on the
interpretations of the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned interpretive letters, (b) will
not be permitted or entitled to tender such Old Capital Securities in the
Exchange Offer and (c) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or
other transfer of such Old Capital Securities unless such sale is made
pursuant to an exemption from such requirements. In addition, as described
below, if any broker-dealer holds Old Capital Securities acquired for its own
account as a result of market-making or other trading activities and
exchanges such Old Capital Securities for New Capital Securities, then such
broker-dealer must deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of such New Capital Securities.

Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required
to represent that (i) it is not an "affiliate" of the Corporation or the
Trust, (ii) any New Capital Securities to be received by it are being
acquired in the ordinary course of its business, (iii) it has no arrangement
or understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such New Capital Securities, and (iv) if
such holder is not a broker-dealer, such holder is not engaged in, and does
not intend to engage in, a distribution (within the meaning of the Securities
Act) of such New Capital Securities. In addition, the Corporation and the
Trust may require such holder, as a condition to such holder's eligibility to
participate in the Exchange Offer, to furnish to the Corporation and the
Trust (or an agent thereof) in writing information as to the number of
"beneficial owners" (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) on behalf of whom such holder holds the
Capital Securities to be exchanged in the Exchange Offer. Each broker-dealer
that receives New Capital Securities for its own account pursuant to the
Exchange Offer must acknowledge that it acquired the Old Capital Securities
for its own account as the result of market-making activities or other
trading activities and must agree that it will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of such
New Capital Securities. The Letter of Transmittal states that, by so
acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. Based on the position taken by the staff of the Division of
Corporation Finance of the Commission in the interpretive letters referred to
above, the Corporation and the Trust believe that broker-dealers who acquired
Old Capital Securities for their own accounts, as a result of market-making
activities or other trading activities ("Participating Broker-Dealers"), may
fulfill their prospectus delivery requirements with respect to the New
Capital Securities received upon exchange of such Old Capital Securities
(other than Old Capital Securities which represent an unsold allotment from
the original sale of the Old Capital Securities) with a prospectus meeting
the requirements of the Securities Act, which may be the prospectus prepared
for an exchange offer so long as it contains a description of the plan of
distribution with respect to the resale of such New Capital Securities.
Accordingly, this Prospectus, as it may be amended or supplemented from time
to time, may be used by a Participating Broker-Dealer during the period
referred to below in connection with resales of New Capital Securities
received in exchange for Old Capital Securities where such Old Capital
Securities were acquired by such Participating Broker-Dealer for its own
account as a result of market-making or other trading activities. Subject to
certain provisions set forth in the Registration Rights Agreement, the
Corporation and the Trust have agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New Capital Securities for a
period ending 90-days after the Expiration Date (as defined herein) (subject
to extension under certain limited circumstances described below) or, if
earlier, when all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution." However, a
Participating Broker-Dealer who intends to use this Prospectus in connection
with the resale of New Capital Securities received in exchange for Old
Capital Securities pursuant to the Exchange Offer must notify the Corporation
or the Trust, or cause the Corporation or the Trust to be notified, on or
prior to the Expiration Date, that it is a Participating Broker-Dealer. Such
notice may be given in the space provided for that purpose in the Letter of
Transmittal or may be delivered to the Exchange Agent at one of the addresses
set forth herein under "The Exchange Offer--Exchange Agent." Any
Participating Broker-Dealer who is an Affiliate of the Corporation or the
Trust may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. See "The Exchange Offer--Resales of
New Capital Securities."

In that regard, each Participating Broker-Dealer who surrenders Old
Capital Securities pursuant to the Exchange Offer will be deemed to have
agreed, by execution of the Letter of Transmittal, that, upon receipt of
notice from the Corporation or the Trust of the occurrence of any event or
the discovery of any fact which makes any statement contained or incorporated
by reference in this Prospectus untrue in any material respect or which
causes this Prospectus to omit to state a material fact necessary in order to
make the statements contained or incorporated by reference herein, in light
of the circumstances under which they were made, not misleading or of the
occurrence of certain other events specified in the Registration Rights
Agreement, such Participating Broker-Dealer will suspend the sale of New
Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) pursuant to this Prospectus until the Corporation
or the Trust has amended or supplemented this Prospectus to correct such
misstatement or omission and has furnished copies of the amended or
supplemented Prospectus to such Participating Broker-Dealer or the
Corporation or the Trust has given notice that the sale of the New Capital
Securities (or the New Guarantee or the New Junior Subordinated Debentures,
as applicable) may be resumed, as the case may be. If the Corporation or the
Trust gives such notice to suspend the sale of the New Capital Securities (or
the New Guarantee or the New Junior Subordinated Debentures, as applicable),
it shall extend the 90-day period referred to above during which
Participating Broker-Dealers are entitled to use this Prospectus in
connection with the resale of New Capital Securities by the number of days
during the period from and including the date of the giving of such notice to
and including the date when Participating Broker-Dealers shall have received
copies of the amended or supplemented Prospectus necessary to permit resales
of the New Capital Securities or to and including the date on which the
Corporation or the Trust has given notice that the sale of New Capital
Securities (or the New Guarantee or the New Junior Subordinated Debentures,
as applicable) may be resumed, as the case may be.

Prior to the Exchange Offer, there has been only a limited secondary
market and no public market for the Old Capital Securities. The New Capital
Securities will be a new issue of securities for which there currently is no
market. Although the Initial Purchasers have informed the Corporation and
the Trust that they each currently intend to make a market in the New Capital
Securities, they are not obligated to do so, and any such market making may
be discontinued at any time without notice. Accordingly, there can be no
assurance as to the development or liquidity of any market for the New
Capital Securities. The Corporation and the Trust currently do not intend to
apply for listing of the New Capital Securities on any securities exchange or
for quotation through the National Association of Securities Dealers
Automated Quotation System ("NASDAQ").

Any Old Capital Securities not tendered and accepted in the Exchange
Offer will remain outstanding and will be entitled to all the same rights and
will be subject to the same limitations applicable thereto under the Trust
Agreement (except for those rights which terminate upon consummation of the
Exchange Offer). Following consummation of the Exchange Offer, the holders
of Old Capital Securities will continue to be subject to all of the existing
restrictions upon transfer thereof and neither the Corporation nor the Trust
will have any further obligation to such holders (other than under certain
limited circumstances) to provide for registration under the Securities Act
of the Old Capital Securities held by them. To the extent that Old Capital
Securities are tendered and accepted in the Exchange Offer, a holder's
ability to sell untendered Old Capital Securities could be adversely
affected. See "Risk Factors--Consequences of a Failure to Exchange Old
Capital Securities."

THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS
PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING
WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE
OFFER.

Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on April 8, 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is
extended by the Corporation or the Trust (in which case the term "Expiration
Date" shall mean the latest date and time to which the Exchange Offer is
extended). Tenders of Old Capital Securities may be withdrawn at any time on
or prior to the Expiration Date. The Exchange Offer is not conditioned upon
any minimum Liquidation Amount of Old Capital Securities being tendered for
exchange. However, the Exchange Offer is subject to certain events and
conditions which may be waived by the Corporation or the Trust and to the
terms and provisions of the Registration Rights Agreement. Old Capital
Securities may be tendered in whole or in part having an aggregate
Liquidation Amount of not less than $100,000 (100 Capital Securities) or any
integral multiple of $1,000 Liquidation Amount (one Capital Security) in
excess thereof. The Corporation has agreed to pay all expenses of the
Exchange Offer. See "The Exchange Offer--Fees and Expenses." Holders of the
Old Capital Securities whose Old Capital Securities are accepted for exchange
will not receive Distributions on such Old Capital Securities and will be
deemed to have waived the right to receive any Distributions on such Old
Capital Securities accumulated from and including December 10, 1996.
Accordingly, holders of New Capital Securities as of the record date for the
payment of Distributions on June 15, 1997 will be entitled to receive
Distributions accumulated from and including December 10, 1996. See "The
Exchange Offer--Distributions on New Capital Securities."

Neither the Corporation nor the Trust will receive any cash proceeds
from the issuance of the New Capital Securities offered hereby. No dealer-
manager is being used in connection with this Exchange Offer. See "Use of
Proceeds" and "Plan of Distribution."

---------------

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE TRUST.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY EXCHANGE MADE PURSUANT HERETO
SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE CORPORATION OR THE TRUST SINCE THE DATE HEREOF.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN
ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO
OR ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.

---------------

TABLE OF CONTENTS
Page
----

Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . 8
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Ratios of Earnings to Fixed Charges . . . . . . . . . . . . . . . . . . . 20
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Summary Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . 22
BankBoston Capital Trust II . . . . . . . . . . . . . . . . . . . . . . . 23
Bank of Boston Corporation . . . . . . . . . . . . . . . . . . . . . . . 23
The Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Description of New Securities . . . . . . . . . . . . . . . . . . . . . . 32
Description of Old Securities . . . . . . . . . . . . . . . . . . . . . . 50
Relationship Among the New Capital Securities, the
New Junior Subordinated Debentures and the New Guarantee . . . . . . . 50
Certain United States Federal Income Tax Considerations . . . . . . . . . 52
ERISA Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Validity of New Securities . . . . . . . . . . . . . . . . . . . . . . . 57
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

AVAILABLE INFORMATION

The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information
can be inspected and copied at the public reference facilities of the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and
at the regional offices of the Commission located at 7 World Trade Center,
13th Floor, Suite 1300, New York, New York 10048 and Suite 1400, Citicorp
Center, 14th Floor, 500 West Madison Street, Chicago, Illinois 60661. Copies
of such material can also be obtained at prescribed rates by writing to the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such information may also be accessed electronically
by means of the Commission's home page on the Internet (http://www.sec.gov.).
In addition, such reports, proxy statements and other information concerning
the Corporation can be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005 and the Boston
Stock Exchange Incorporated, One Boston Place, Boston, Massachusetts 02108,
on which exchanges securities of the Corporation are listed.

No separate financial statements of the Trust have been included herein.
The Corporation and the Trust do not consider that such financial statements
would be material to holders of the New Capital Securities because the Trust
is a newly formed special purpose entity, has no operating history or
independent operations and is not engaged in and does not propose to engage
in any activity other than holding as trust assets the Junior Subordinated
Debentures and issuing the Trust Securities. See "BankBoston Capital Trust
II" and "Description of New Securities." In addition, the Corporation does
not expect that the Trust will file reports under the Exchange Act with the
Commission.

This Prospectus constitutes a part of a registration statement on Form
S-4 (the "Registration Statement") filed by the Corporation and the Trust
with the Commission under the Securities Act. This Prospectus does not
contain all the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of
the Commission, and reference is hereby made to the Registration Statement
and to the exhibits relating thereto for further information with respect to
the Corporation, the Trust and the New Securities. Any statements contained
herein concerning the provisions of any document are not necessarily
complete, and, in each instance, reference is made to the copy of such
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission. Each such statement is qualified in its entirety by
such reference.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Corporation with the Commission are
incorporated into this Prospectus by reference:

1. The Corporation's Annual Report on Form 10-K for the year ended
December 31, 1995;

2. The Corporation's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996, June 30, 1996 and September 30, 1996; and

3. The Corporation's Current Reports on Form 8-K dated January 16,
1996, January 18, 1996, April 18, 1996, May 16, 1996, July 18, 1996,
July 25, 1996, September 6, 1996, October 17, 1996 and January 16, 1997.

All documents subsequently filed by the Corporation pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior
to the termination of the Exchange Offer shall be deemed to be incorporated
by reference into this Prospectus and to be a part of this Prospectus from
the date of filing of such document. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.

As used herein, the terms "Prospectus" and "herein" mean this Prospectus
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified
from time to time. Statements contained in this Prospectus as to the contents
of any contract or other document referred to herein do not purport to be
complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document. The
Corporation will provide without charge to any person to whom this Prospectus
is delivered, on the written or oral request of such person, a copy of any or
all of the foregoing documents incorporated by reference herein (other than
exhibits not specifically incorporated by reference into the texts of such
documents). Requests for such documents should be directed to: Investor
Relations, Bank of Boston, P.O. Box 2016, MA BOS 01-20-02, Boston,
Massachusetts 02106-2016. Telephone requests may be directed to Investor
Relations at (617) 434-7858.

SUMMARY

The following is a summary of certain information contained elsewhere in
this Prospectus. Reference is made to, and this summary is qualified in its
entirety by, the more detailed information and financial statements,
including the notes thereto, contained elsewhere in this Prospectus.

BANKBOSTON CAPITAL TRUST II

BANK OF BOSTON CORPORATION

The Corporation is a registered bank holding company organized in 1970
under Massachusetts law with both national and international operations. The
Corporation, through its subsidiaries and joint ventures, is engaged in
providing a wide variety of personal, corporate and global banking services
to individuals, corporate and institutional customers, governments, and other
financial institutions. These services include personal banking, consumer
finance, private banking, trust, mortgage origination and servicing, domestic
corporate and investment banking, leasing, global banking, commercial real
estate lending, correspondent banking, and securities and payments
processing. The major banking subsidiaries of the Corporation include The
First National Bank of Boston, BayBank, N.A., Bank of Boston Connecticut,
Rhode Island Hospital Trust National Bank and BayBank, NH, N.A.

THE EXCHANGE OFFER

The Exchange Offer . . . . . . . . Up to $250,000,000 aggregate
Liquidation Amount of New Capital
Securities are being offered in
exchange for a like aggregate
Liquidation Amount of Old Capital
Securities. Old Capital Securities
may be tendered for exchange in
whole or in part in a Liquidation
Amount of $100,000 (100 Capital
Securities) or any integral
multiple of $1,000 (one Capital
Security) in excess thereof. The
Corporation and the Trust are
making the Exchange Offer in order
to satisfy their obligations under
the Registration Rights Agreement
relating to the Old Capital
Securities. For a description of
the procedures for tendering Old
Capital Securities, see "The
Exchange Offer--Procedures for
Tendering Old Capital Securities."

Expiration Date . . . . . . . . . . 5:00 p.m., New York City time, on
April 8, 1997, unless the Exchange
Offer is extended by the
Corporation or the Trust (in which
case the Expiration Date will be
the latest date and time to which
the Exchange Offer is extended).
See "The Exchange Offer--Terms of
the Exchange Offer."

Conditions to the Exchange Offer . The Exchange Offer is subject to
certain conditions, which may be
waived by the Corporation and the
Trust in their sole discretion.
The Exchange Offer is not
conditioned upon any minimum
Liquidation Amount of Old Capital
Securities being tendered. See
"The Exchange Offer--Conditions to
the Exchange Offer."

Offer . . . . . . . . . . . . . . . The Corporation and the Trust
reserve the right in their sole and
absolute discretion, subject to
applicable law, at any time and
from time to time, (i) to delay the
acceptance of the Old Capital
Securities for exchange, (ii) to
terminate the Exchange Offer if
certain specified conditions have
not been satisfied, (iii) to extend
the Expiration Date of the Exchange
Offer and retain all Old Capital
Securities tendered pursuant to the
Exchange Offer, subject, however,
to the right of holders of Old
Capital Securities to withdraw
their tendered Old Capital
Securities, or (iv) to waive any
condition or otherwise amend the
terms of the Exchange Offer in any
respect. See "The Exchange Offer--
Terms of the Exchange Offer."

Withdrawal Rights . . . . . . . . . Tenders of Old Capital Securities
may be withdrawn at any time on or
prior to the Expiration Date by
delivering a written notice of such
withdrawal to the Exchange Agent in
conformity with certain procedures
set forth below under "The Exchange
Offer--Withdrawal Rights."

Procedures for Tendering Old Tendering holders of Old Capital
Capital Securities . . . . . . . . Securities must complete and sign a
Letter of Transmittal in accordance
with the instructions contained
therein and forward the same by
mail, facsimile or hand delivery,
together with any other required
documents, to the Exchange Agent,
either with the Old Capital
Securities to be tendered or in
compliance with the specified
procedures for guaranteed delivery
of Old Capital Securities. Certain
brokers, dealers, commercial banks,
trust companies and other nominees
may also effect tenders by book-
entry transfer. Holders of Old
Capital Securities registered in
the name of a broker, dealer,
commercial bank, trust company or
other nominee are urged to contact
such person promptly if they wish
to tender Old Capital Securities
pursuant to the Exchange Offer.
See "The Exchange Offer--Procedures
for Tendering Old Capital
Securities."

Letters of Transmittal and
certificates representing Old
Capital Securities should not be
sent to the Corporation or the
Trust. Such documents should only
be sent to the Exchange Agent.

Resales of New Capital Securities . The Corporation and the Trust are
making the Exchange Offer in
reliance on the position of the
staff of the Division of
Corporation Finance of the
Commission as set forth in certain
interpretive letters addressed to
third parties in other
transactions. However, neither the
Corporation nor the Trust has
sought its own interpretive letter
and there can be no assurance that
the staff of the Division of
Corporation Finance of the
Commission would make a similar
determination with respect to the
Exchange Offer as it has in such
interpretive letters to third
parties. Based on these
interpretations by the staff of the
Division of Corporation Finance of
the Commission, and subject to the
two immediately following
sentences, the Corporation and the
Trust believe that New Capital
Securities issued pursuant to this
Exchange Offer in exchange for Old
Capital Securities may be offered
for resale, resold and otherwise
transferred by a holder thereof
(other than a holder who is a
broker-dealer) without further
compliance with the registration
and prospectus delivery
requirements of the Securities Act,
provided that such New Capital
Securities are acquired in the
ordinary course of such holder's
business and that such holder is
not participating, and has no
arrangement or understanding with
any person to participate, in a
distribution (within the meaning of
the Securities Act) of such New
Capital Securities. However, any
holder of Old Capital Securities
who is an Affiliate of the
Corporation or the Trust or who
intends to participate in the
Exchange Offer for the purpose of
distributing the New Capital
Securities, or any broker-dealer
who purchased the Old Capital
Securities from the Trust for
resale pursuant to Rule 144A or any
other available exemption under the
Securities Act, (a) will not be
able to rely on the interpretations
of the staff of the Division of
Corporation Finance of the
Commission set forth in the above-
mentioned interpretive letters, (b)
will not be permitted or entitled
to tender such Old Capital
Securities in the Exchange Offer
and (c) must comply with the
registration and prospectus
delivery requirements of the
Securities Act in connection with
any sale or other transfer of such
Old Capital Securities unless such
sale is made pursuant to an
exemption from such requirements.
In addition, as described below, if
any broker-dealer holds Old Capital
Securities acquired for its own
account as a result of market-
making or other trading activities
and exchanges such Old Capital
Securities for New Capital
Securities, then such broker-dealer
must deliver a prospectus meeting
the requirements of the Securities
Act in connection with any resales
of such New Capital Securities.

Each holder of Old Capital
Securities who wishes to exchange
Old Capital Securities for New
Capital Securities in the Exchange
Offer will be required to represent
that (i) it is not an Affiliate of
the Corporation or the Trust, (ii)
any New Capital Securities to be
received by it are being acquired
in the ordinary course of its
business, (iii) it has no
arrangement or understanding with
any person to participate in a
distribution (within the meaning of
the Securities Act) of such New
Capital Securities, and (iv) if
such holder is not a broker-dealer,
such holder is not engaged in, and
does not intend to engage in, a
distribution (within the meaning of
the Securities Act) of such New
Capital Securities. Each broker-
dealer that receives New Capital
Securities for its own account
pursuant to the Exchange Offer must
acknowledge that it acquired the
Old Capital Securities for its own
account as the result of market-
making activities or other trading
activities and must agree that it
will deliver a prospectus meeting
the requirements of the Securities
Act in connection with any resale
of such New Capital Securities.
The Letter of Transmittal states
that, by so acknowledging and by
delivering a prospectus, a broker-
dealer will not be deemed to admit
that it is an "underwriter" within
the meaning of the Securities Act.
Based on the position taken by the
staff of the Division of
Corporation Finance of the
Commission in the interpretive
letters referred to above, the
Corporation and the Trust believe
that Participating Broker-Dealers
who acquired Old Capital Securities
for their own accounts as a result
of market-making activities or
other trading activities may
fulfill their prospectus delivery
requirements with respect to the
New Capital Securities received
upon exchange of such Old Capital
Securities (other than Old Capital
Securities which represent an
unsold allotment from the original
sale of the Old Capital Securities)
with a prospectus meeting the
requirements of the Securities Act,
which may be the prospectus
prepared for an exchange offer so
long as it contains a description
of the plan of distribution with
respect to the resale of such New
Capital Securities. Accordingly,
this Prospectus, as it may be
amended or supplemented from time
to time, may be used by a
Participating Broker-Dealer in
connection with resales of New
Capital Securities received in
exchange for Old Capital Securities
where such Old Capital Securities
were acquired by such Participating
Broker-Dealer for its own account
as a result of market-making or
other trading activities. Subject
to certain provisions set forth in
the Registration Rights Agreement
and to the limitations described
below under "The Exchange Offer--
Resales of New Capital Securities,"
the Corporation and the Trust have
agreed that this Prospectus, as it
may be amended or supplemented from
time to time, may be used by a
Participating Broker-Dealer in
connection with resales of such New
Capital Securities for a period
ending 90-days after the Expiration
Date (subject to extension under
certain limited circumstances) or,
if earlier, when all such New
Capital Securities have been
disposed of by such Participating
Broker-Dealer. See "Plan of
Distribution." Any Participating
Broker-Dealer who is an Affiliate
of the Corporation or the Trust may
not rely on such interpretive
letters and must comply with the
registration and prospectus
delivery requirements of the
Securities Act in connection with
any resale transaction. See "The
Exchange Offer--Resales of New
Capital Securities."

Exchange Agent . . . . . . . . . . The exchange agent with respect to
the Exchange Offer is The Bank of
New York (the "Exchange Agent").
The applicable addresses, and
telephone and facsimile numbers, of
the Exchange Agent are set forth in
"The Exchange Offer--Exchange
Agent" and in the Letter of
Transmittal.

Use of Proceeds . . . . . . . . . . Neither the Corporation nor the
Trust will receive any cash
proceeds from the issuance of the
New Capital Securities offered
hereby. See "Use of Proceeds."

Certain United States Federal
Income Tax Considerations; ERISA Holders of Old Capital Securities
Considerations. . . . . . . . . . . should review the information set
forth under "Certain United States
Federal Income Tax Considerations"
and "ERISA Considerations" prior to
tendering Old Capital Securities in
the Exchange Offer.

THE NEW CAPITAL SECURITIES

Securities Offered . . . . . . . . Up to $250,000,000 aggregate
Liquidation Amount of the Trust's
New Capital Securities which have
been registered under the
Securities Act (Liquidation Amount
$1,000 per New Capital Security).
The New Capital Securities will be
issued, and the Old Capital
Securities were issued, under the
Trust Agreement. The New Capital
Securities and any Old Capital
Securities which remain outstanding
after consummation of the Exchange
Offer will vote together as a
single class for purposes of
determining whether holders of the
requisite percentage in outstanding
Liquidation Amount thereof have
taken certain actions or exercised
certain rights under the Trust
Agreement. See "Description of New
Securities--Description of New
Capital Securities--Voting Rights;
Amendment of the Trust Agreement."
The terms of the New Capital
Securities are identical in all
material respects to the terms of
the Old Capital Securities, except
that the New Capital Securities
have been registered under the
Securities Act and will not be
subject to the $100,000 minimum
Liquidation Amount transfer
restriction and certain other
restrictions on transfer applicable
to the Old Capital Securities and
will not provide for any increase
in the Distribution rate thereon.
See "The Exchange Offer--Purpose of
the Exchange Offer," "Description
of New Securities" and "Description
of Old Securities."

Distribution Dates . . . . . . . . June 15 and December 15 of each
year, commencing June 15, 1997.

Extension Periods . . . . . . . . . Distributions on the New Capital
Securities will be deferred for the
duration of any Extension Period
elected by the Corporation with
respect to the payment of interest
on the New Junior Subordinated
Debentures. No Extension Period
will exceed 10 consecutive semi-
annual periods or extend beyond the
Stated Maturity Date. See
"Description of New Securities--
Description of New Junior
Subordinated Debentures--Option to
Extend Interest Payment Date" and
"Certain United States Federal
Income Tax Considerations--Interest
Income and Original Issue
Discount."

Ranking . . . . . . . . . . . . . . The New Capital Securities will
rank pari passu, and payments
thereon will be made pro rata, with
the Old Capital Securities and the
Common Securities except as
described under "Description of New
Securities--Description of New
Capital Securities--Subordination
of Common Securities." The New
Junior Subordinated Debentures will
rank pari passu with the Old Junior
Subordinated Debentures,
$257,732,000 aggregate principal
amount of 8.25% Junior Subordinated
Deferrable Interest Debentures due
December 15, 2026 (the "8.25%
Junior Subordinated Debentures")
and all other junior subordinated
debentures issued by the
Corporation (collectively, with the
8.25% Junior Subordinated
Debentures, the "Other Debentures")
and sold to other trusts (including
BankBoston Capital Trust I)
established or to be established by
the Corporation, in each case
similar to the Trust (collectively,
with BankBoston Capital Trust I,
the "Other Trusts"), and will be
unsecured and subordinate and
junior in right of payment to all
Senior Indebtedness to the extent
and in the manner set forth in the
Indenture. See "Description of New
Securities--Description of New
Junior Subordinated Debentures."
The New Guarantee will rank pari
passu with the Old Guarantee, the
guarantee issued by the Corporation
with respect to 250,000 8.25%
Capital Securities (Liquidation
Amount $1,000 per security) of
BankBoston Capital Trust I (the
"Capital Trust I Capital
Securities") and all other
guarantees issued by the
Corporation with respect to capital
securities issued or to be issued
by Other Trusts (collectively, with
the guarantee issued with respect
to the Capital Trust I Capital
Securities, the "Other Guarantees")
and will constitute an unsecured
obligation of the Corporation and
will rank subordinate and junior in
right of payment to all Senior
Indebtedness to the extent and in
the manner set forth in the
Guarantee Agreement. See
"Description of New Securities--
Description of New Guarantee."

Redemption . . . . . . . . . . . . The Trust Securities are subject to
mandatory redemption in a Like
Amount, (i) in whole but not in
part, on the Stated Maturity Date
upon repayment of the Junior
Subordinated Debentures, (ii) in
whole but not in part, at any time
contemporaneously with the optional
prepayment of the Junior
Subordinated Debentures by the
Corporation upon the occurrence and
continuation of a Special Event and
(iii) in whole or in part, at any
time on or after December 15, 2006
contemporaneously with the optional
prepayment by the Corporation of
the Junior Subordinated Debentures,
in each case at the applicable
Redemption Price. See "Description
of New Securities--Description of
New Capital Securities--
Redemption."

Rating . . . . . . . . . . . . . . The New Capital Securities are
expected to be rated "BBB" by
Standard & Poor's Ratings Services
and "baa1" by Moody's Investors
Service, Inc.

Absence of Market for the New The New Capital Securities will be
Capital Securities . . . . . . . . a new issue of securities for which
there currently is no market.
Although Morgan Stanley & Co.
Incorporated and UBS Securities
LLC, the initial purchasers of the
Old Capital Securities (the
"Initial Purchasers"), have
informed the Corporation and the
Trust that they each currently
intend to make a market in the New
Capital Securities, they are not
obligated to do so, and any such
market making may be discontinued
at any time without notice.
Accordingly, there can be no
assurance as to the development or
liquidity of any market for the New
Capital Securities. The Trust and
the Corporation do not intend to
apply for listing of the New
Capital Securities on any
securities exchange or for
quotation through NASDAQ. See
"Plan of Distribution."

RISK FACTORS

Prospective investors should consider carefully, in addition to the
other information contained in this Prospectus, the following factors in
connection with the Exchange Offer and the New Capital Securities offered
hereby.

RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES

The obligations of the Corporation under the Guarantee issued for the
benefit of the holders of Capital Securities, as well as under the Junior
Subordinated Debentures, will be unsecured and rank subordinate and junior in
right of payment to all Senior Indebtedness. In addition, in the case of a
bankruptcy or insolvency proceeding, the Corporation's obligations under the
Guarantee will also rank subordinate and junior in right of payment to all
liabilities (other than Other Guarantees) of the Corporation. At September
30, 1996, the aggregate principal amount of outstanding Senior Indebtedness
was approximately $400 million. Because the Corporation is a bank holding
company, the right of the Corporation to participate in any distribution of
assets of any subsidiary upon such subsidiary's liquidation or reorganization
or otherwise (and thus the ability of holders of the Capital Securities to
benefit indirectly from such distribution) is subject to the prior claims of
creditors of that subsidiary, except to the extent that the Corporation may
itself be recognized as a creditor of that subsidiary. At September 30,
1996, the subsidiaries of the Corporation had total liabilities (excluding
liabilities owed to the Corporation) of approximately $55.6 billion.
Accordingly, the Junior Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders of Junior Subordinated Debentures should look only
to the assets of the Corporation for payments on the Junior Subordinated
Debentures. None of the Indenture, the Guarantee or the Trust Agreement
places any limitation on the amount of secured or unsecured debt, including
Senior Indebtedness, that may be incurred by the Corporation. See
"Description of New Securities--Description of New Guarantee--Status of New
Guarantee" and "--Description of New Junior Subordinated Debentures--
Subordination."

The ability of the Trust to pay amounts due on the Capital Securities is
solely dependent upon the Corporation making payments on the Junior
Subordinated Debentures as and when required.

OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSIDERATIONS

So long as no Debenture Event of Default (as defined herein) shall have
occurred and be continuing, the Corporation will have the right under the
Indenture to defer payments of interest on the Junior Subordinated Debentures
at any time or from time to time for a period not exceeding 10 consecutive
semi-annual periods with respect to each Extension Period, provided that no
Extension Period may extend beyond the Stated Maturity Date. As a
consequence of any such deferral, semi-annual Distributions on the Capital
Securities by the Trust will be deferred (and the amount of Distributions to
which holders of the Capital Securities are entitled will accumulate
additional Distributions thereon at the rate of 73/4% per annum, compounded
semi-annually, but not exceeding the interest rate then accruing on the
Junior Subordinated Debentures) from the relevant payment date for such
Distributions during any such Extension Period.

Prior to the termination of any such Extension Period, the Corporation
may further extend such Extension Period, provided that such extension does
not cause such Extension Period to exceed 10 consecutive semi-annual periods
or to extend beyond the Stated Maturity Date. Upon the termination of any
Extension Period and the payment of all interest then accrued and unpaid on
the Junior Subordinated Debentures (together with interest thereon at the
annual rate of 73/4%, compounded semi-annually, to the extent permitted by
applicable law), the Corporation may elect to begin a new Extension Period,
subject to the above requirements. There is no limitation on the number of
times that the Corporation may elect to begin an Extension Period. See
"Description of New Securities--Description of New Capital Securities--
Distributions" and "--Description of New Junior Subordinated Debentures--
Option to Extend Interest Payment Date."

Should the Corporation exercise its right to defer payments of interest
on the Junior Subordinated Debentures, each holder of Trust Securities will
be required to accrue income (as original issue discount ("OID")) in respect
of the deferred stated interest allocable to its Trust Securities for United
States federal income tax purposes, which will be allocated but not
distributed to holders of Trust Securities. As a result, each such holder of
Capital Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash and will not receive the cash
related to such income from the Trust if the holder disposes of the Capital
Securities prior to the record date for the payment of Distributions
thereafter. See "Certain United States Federal Income Tax Considerations--
Interest Income and Original Issue Discount" and "--Sales of Capital
Securities."

Should the Corporation elect to exercise its right to defer payments of
interest on the Junior Subordinated Debentures in the future, the market
price of the Capital Securities is likely to be affected. A holder that
disposes of its Capital Securities during an Extension Period, therefore,
might not receive the same return on its investment as a holder that
continues to hold its Capital Securities. In addition, merely as a result of
the existence of the Corporation's right to defer payments of interest on the
Junior Subordinated Debentures, the market price of the Capital Securities
may be more volatile than the market prices of other securities on which OID
accrues and that are not subject to such deferrals.

TAX EVENT REDEMPTION; POSSIBLE TAX LAW CHANGES AFFECTING THE CAPITAL
SECURITIES

Upon the occurrence and continuation of a Tax Event (as defined under
"Description of New Securities--Description of New Junior Subordinated
Debentures--Special Event Prepayment"), the Corporation will have the right
to prepay the Junior Subordinated Debentures in whole (but not in part) at
the Special Event Prepayment Price within 90 days following the occurrence of
such Tax Event and therefore cause a mandatory redemption of the Trust
Securities at the Special Event Redemption Price. The exercise of such right
is subject to the Corporation having received prior approval of the Federal
Reserve to do so if then required under applicable guidelines or policies of
the Federal Reserve. See "Description of New Securities--Description of New
Capital Securities--Redemption."

On February 6, 1997, as part of the Clinton Administration's Fiscal 1998
Budget Proposal, the Treasury Department proposed legislation (the "Proposed
Legislation") which would, among other things, generally deny corporate
issuers a deduction for interest in respect of certain debt obligations, such
as the New Junior Subordinated Debentures, issued on or after the date "of
first committee action," if such debt obligations had a maximum term in
excess of 15 years and are not shown as indebtedness on the issuer's
applicable consolidated balance sheet. The Proposed Legislation has not yet
been introduced by any member of the 105th Congress. If other legislation is
enacted by Congress and if it gives rise to a Tax Event, the Trust would be
permitted to cause a redemption of the Trust Securities at the Special Event
Redemption Price by electing to prepay the Junior Subordinated Debentures at
the Special Event Prepayment Price. See "Description of New Securities --
Description of New Capital Securities -- Redemption," "-- Description of New
Junior Subordinated Debentures -- Special Event Prepayment" and "Certain
Federal Income Tax Considerations -- Proposed Tax Legislation."

POSSIBLE ADVERSE EFFECT ON MARKET PRICES

There can be no assurance as to the market prices for New Capital
Securities or New Junior Subordinated Debentures distributed to the holders
of New Capital Securities if a termination of the Trust were to occur.
Accordingly, the New Capital Securities or the New Junior Subordinated
Debentures may trade at a discount from the price that the investor paid to
purchase the New Capital Securities. Because holders of Capital Securities
may receive Junior Subordinated Debentures in liquidation of the Trust and
because Distributions are otherwise limited to payments on the Junior
Subordinated Debentures, prospective purchasers of New Capital Securities are
also making an investment decision with regard to the New Junior Subordinated
Debentures and should carefully review all the information regarding the New
Junior Subordinated Debentures contained herein. See "Description of New
Securities--Description of New Junior Subordinated Debentures."

RIGHTS UNDER THE GUARANTEE

The Bank of New York will act as Guarantee Trustee and will hold the
Guarantee for the benefit of the holders of the Capital Securities. The Bank
of New York will also act as Property Trustee and as Debenture Trustee under
the Indenture. The Bank of New York (Delaware) will act as Delaware Trustee
under the Trust Agreement. The Old Guarantee guarantees, and the New
Guarantee will guarantee, as the case may be, to the holders of the Capital
Securities the following payments, to the extent not paid by the Trust: (i)
any accumulated and unpaid Distributions required to be paid on the Capital
Securities, to the extent that the Trust has funds on hand legally available
therefor at such time, (ii) the applicable Redemption Price with respect to
any Capital Securities called for redemption, to the extent that the Trust
has funds on hand legally available therefor at such time, and (iii) upon a
voluntary or involuntary termination and liquidation of the Trust (unless the
Junior Subordinated Debentures are distributed to holders of the Capital
Securities), the lesser of (a) the aggregate of the Liquidation Amount and
all accumulated and unpaid Distributions to the date of payment, to the
extent that the Trust has funds on hand legally available therefor at such
time and (b) the amount of assets of the Trust remaining available for
distribution to holders of the Capital Securities upon a termination and
liquidation of the Trust. The holders of a majority in Liquidation Amount of
the Capital Securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of the Guarantee or to direct the exercise of any trust
power conferred upon the Guarantee Trustee. Any holder of the Capital
Securities may institute a legal proceeding directly against the Corporation
to enforce its rights under the Guarantee without first instituting a legal
proceeding against the Trust, the Guarantee Trustee or any other person or
entity. If the Corporation defaults on its obligation to pay amounts payable
under the Junior Subordinated Debentures, the Trust will not have sufficient
funds for the payment of Distributions or amounts payable on liquidation of
the Trust or redemption of the Capital Securities or otherwise, and, in such
event, holders of the Capital Securities will not be able to rely upon the
Guarantee for payment of such amounts. Instead, in the event a Debenture
Event of Default shall have occurred and be continuing and such event is
attributable to the failure of the Corporation to pay principal of (or
premium, if any) or interest on the Junior Subordinated Debentures on the
payment date on which such payment is due and payable, then a holder of
Capital Securities may institute a legal proceeding directly against the
Corporation for enforcement of payment to such holder of the principal of (or
premium, if any) or interest on such Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Capital Securities of
such holder (a "Direct Action"). Notwithstanding any payments made to a
holder of Capital Securities by the Corporation in connection with a Direct
Action, the Corporation shall remain obligated to pay the principal of (and
premium, if any) and interest on the Junior Subordinated Debentures, and the
Corporation shall be subrogated to the rights of the holder of such Capital
Securities with respect to payments on the Capital Securities to the extent
of any payments made by the Corporation to such holder in any Direct Action.
Except as described herein, holders of Capital Securities will not be able to
exercise directly any other remedy available to the holders of the Junior
Subordinated Debentures or to assert directly any other rights in respect of
the Junior Subordinated Debentures. See "Description of New Securities--
Description of New Junior Subordinated Debentures--Enforcement of Certain
Rights by Holders of Capital Securities," "--Description of New Junior
Subordinated Debentures--Debenture Events of Default" and "--Description of
New Guarantee." The Trust Agreement provides that each holder of Capital
Securities by acceptance thereof agrees to the provisions of the Indenture.

LIMITED VOTING RIGHTS

Holders of Capital Securities will generally have limited voting rights
relating only to the modification of the Capital Securities, the termination
or liquidation of the Trust, and the exercise of the Trust's rights as holder
of Junior Subordinated Debentures. Holders of Capital Securities will not be
entitled to vote to appoint, remove or replace the Property Trustee or the
Delaware Trustee, and such voting rights are vested exclusively in the holder
of the Common Securities except upon the occurrence of certain events
described herein. The Property Trustee, the Administrative Trustees and the
Corporation may amend the Trust Agreement without the consent of holders of
Capital Securities to ensure that the Trust will be classified for United
States federal income tax purposes as a grantor trust even if such action
adversely affects the interests of such holders. See "Description of New
Securities--Description of New Capital Securities--Voting Rights; Amendment
of the Trust Agreement" and "--Removal of Issuer Trustees."

CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES

The Old Capital Securities have not been registered under the Securities
Act or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements
of the Securities Act and any other applicable securities laws, or pursuant
to an exemption therefrom or in a transaction not subject thereto, and in
each case in compliance with certain other conditions and restrictions. Old
Capital Securities which remain outstanding after consummation of the
Exchange Offer will continue to bear a legend reflecting such restrictions on
transfer. In addition, upon consummation of the Exchange Offer, holders of
Old Capital Securities which remain outstanding will not be entitled to any
rights to have such Old Capital Securities registered under the Securities
Act or to any similar rights under the Registration Rights Agreement (subject
to certain limited exceptions). The Corporation and the Trust do not intend
to register under the Securities Act any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer (subject to such limited
exceptions, if applicable). To the extent that Old Capital Securities are
tendered and accepted in the Exchange Offer, a holder's ability to sell
untendered Old Capital Securities could be adversely affected.

The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain
actions or exercised certain rights under the Trust Agreement. See
"Description of New Securities--Description of New Capital Securities--Voting
Rights; Amendment of the Trust Agreement."

The Old Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been filed by
May 9, 1997 and declared effective by June 8, 1997, the Distribution rate
borne by the Old Capital Securities commencing on June 9, 1997 will increase
by 0.25% per annum until the Exchange Offer is consummated. Upon
consummation of the Exchange Offer, holders of Old Capital Securities will
not be entitled to any increase in the Distribution rate thereon or any
further registration rights under the Registration Rights Agreement, except
under limited circumstances. See "Description of Old Capital Securities."

ABSENCE OF PUBLIC MARKET

The Old Capital Securities were issued to, and the Corporation believes
the Old Capital Securities are currently owned by, a relatively small number
of beneficial owners. The Old Capital Securities have not been registered
under the Securities Act and will be subject to restrictions on
transferability if they are not exchanged for the New Capital Securities.
Although the New Capital Securities generally may be resold or otherwise
transferred by the holders (who are not affiliates of the Corporation or the
Trust) without compliance with the registration requirements under the
Securities Act, they will constitute a new issue of securities with no
established trading market. Old Capital Securities may be transferred by the
holders thereof only in blocks having a Liquidation Amount of not less than
$100,000 (100 Old Capital Securities). New Capital Securities may be
transferred by the holders thereof in blocks having a Liquidation Amount of
$1,000 (one New Capital Security) or integral multiples thereof. The
Corporation and the Trust have been advised by the Initial Purchasers that
the Initial Purchasers presently intend to make a market in the New Capital
Securities. However, the Initial Purchasers are not obligated to do so and
any market-making activity with respect to the New Capital Securities may be
discontinued at any time without notice. In addition, such market-making
activity will be subject to the limits imposed by the Securities Act and the
Exchange Act and may be limited during the Exchange Offer. Accordingly, no
assurance can be given that an active public or other market will develop for
the New Capital Securities or the Old Capital Securities or as to the
liquidity of or the trading market for the New Capital Securities or the Old
Capital Securities. If an active public market does not develop, the market
price and liquidity of the New Capital Securities may be adversely affected.

If a public trading market develops for the New Capital Securities,
future trading prices will depend on many factors, including, among other
things, prevailing interest rates, the Corporation's results and the market
for similar securities. Depending on prevailing interest rates, the market
for similar securities and other factors, including the financial condition
of the Corporation, the New Capital Securities may trade at a discount.

Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of
the Securities Act) of the Corporation or the Trust may publicly offer for
sale or resell the New Capital Securities only in compliance with the
provisions of Rule 144 under the Securities Act.

Each broker-dealer that receives New Capital Securities for its own
account in exchange for Old Capital Securities, where such Old Capital
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver
a prospectus in connection with any resale of such New Capital Securities.
See "Plan of Distribution."

RATIOS OF EARNINGS TO FIXED CHARGES

The following table sets forth the ratios of earnings to fixed charges
of the Corporation for the respective periods indicated.

<TABLE>
<CAPTION>
Nine Months
Ended
September 30,
1996 Years Ended December 31,
------------- ----------------------------------------------
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits . . . . . . . . 2.16x 2.08x 1.90x 2.44x 2.17x .62x
Including interest on deposits . . . . . . . . 1.41x 1.42x 1.41x 1.38x 1.22x .94x

</TABLE>

For purposes of computing the ratios of earnings to fixed charges,
earnings represent net income (loss) before extraordinary items and
cumulative effect of changes in accounting principles plus applicable income
taxes and fixed charges. Fixed charges, excluding interest on deposits,
include gross interest expense (other than on deposits) and the proportion
deemed representative of the interest factor of rent expense, net of income
from subleases. Fixed charges, including gross interest on deposits, include
all interest expense and the proportion deemed representative of the interest
factor of rent expense, net of income from subleases. For the year ended
December 31, 1991, earnings were insufficient to cover fixed charges.
Additional earnings necessary for the year ended December 31, 1991 to bring
the ratio of earnings to fixed charges to a one-to-one basis on both an
excluding and including interest on deposits basis are $162 million.

USE OF PROCEEDS

Neither the Corporation nor the Trust will receive any cash proceeds
from the issuance of the New Capital Securities. In consideration for
issuing the New Capital Securities in exchange for the Old Capital Securities
as described in this Prospectus, the Trust will receive Old Capital
Securities in like Liquidation Amount. The Old Capital Securities
surrendered in exchange for the New Capital Securities will be retired and
cancelled.

The proceeds to the Trust (without giving effect to expenses of the
offering payable by the Corporation) from the offering of the Old Capital
Securities was $250,000,000. All of the proceeds from the sale of Old
Capital Securities was invested by the Trust in the Junior Subordinated
Debentures. The Corporation intends that the net proceeds from the sale of
the Old Junior Subordinated Debentures will be used for general corporate
purposes, which may include, but not be limited to, one or more of the
following: investments in and advances to the Corporation's subsidiaries;
financing future acquisitions of financial institutions, as well as banking
and other assets; and the redemption of certain of the Corporation's
outstanding debt securities. The precise amount and timing of the
application of such net proceeds used for such corporate purposes will depend
on the funding requirements and the availability of other funds to the
Corporation and its subsidiaries. Pending such application by the
Corporation, such net proceeds may be temporarily invested in short-term
interest bearing securities.

The Capital Securities will be eligible to qualify as Tier 1 Capital
under the capital guidelines of the Federal Reserve.

CAPITALIZATION

The following table sets forth the unaudited consolidated capitalization
of the Corporation as of September 30, 1996, as adjusted to give effect to
the issuance of the Old Securities and as further adjusted to give effect to
the issuance of the Capital Trust I Capital Securities on November 26, 1996
and, in each case, to the application of the proceeds thereof. The following
data should be read in conjunction with the financial information included in
the Corporation's 1995 Annual Report on Form 10-K and its Current Report on
Form 8-K dated September 6, 1996, which are incorporated herein by reference.
See "Incorporation of Certain Documents by Reference." The issuance of the
New Securities in the Exchange Offer will have no effect on the
capitalization of the Corporation.

<TABLE>
<CAPTION>
September 30, 1996(1)
-------------------------------------------------------------
Actual As Adjusted(2) As Adjusted (2)(3)
------ -------------- ------------------
(in millions)
<S> <C> <C> <C>
Total long-term debt . . . . . . . . . . . . . . . . . . $2,191 $2,191 $2,191
------ ------ ------
Obligated mandatory redeemable preferred
securities of subsidiary trusts holding
solely parent debentures(4) . . . . . . . . . . . . -- 250 500
------ ------ ------
Stockholders' equity:
Preferred stock . . . . . . . . . . . . . . . . . . 508 508 508
Common stock--$1.50 par value--
300,000,000 shares authorized,
152,634,188 shares issued . . . . . . . . . . . 229 229 229
Surplus . . . . . . . . . . . . . . . . . . . . . . 1,181 1,181 1,181
Retained earnings . . . . . . . . . . . . . . . . . 2,789 2,789 2,789
Net unrealized gains on securities available
for sale, net of tax . . . . . . . . . . . . . 53 53 53
Cumulative translation adjustments, net
of tax . . . . . . . . . . . . . . . . . . . . (6) (6) (6)
------ ------ ------
Total stockholders' equity . . . . . . . . . . . 4,754 4,754 4,754
------ ------ ------
Total capitalization . . . . . . . . . . . . . $6,945 $7,195 $7,445
------ ------ ------

</TABLE>
___________
(1) On July 29, 1996, the Corporation acquired BayBanks, Inc.
("BayBanks"). This acquisition was accounted for as a
pooling of interests and, accordingly, this financial
information reflects the Corporation and BayBanks as if they
had operated as a combined entity for all periods presented.
Also, the Corporation's Current Report on Form 8-K dated
September 6, 1996 presents the combined financial position
and results of operations of the Corporation and BayBanks on
the same basis.
(2) Reflects the issuance of the Old Securities.
(3) Reflects the effect of the issuance of the Capital Trust I
Capital Securities on November 26, 1996.
(4) Reflects the Old Capital Securities and the Capital Trust I
Capital Securities. The Trust and BankBoston Capital Trust
I are each subsidiaries of the Corporation and hold the Old
Junior Subordinated Debentures and the 8.25% Junior
Subordinated Debentures, respectively, as their sole assets.

SUMMARY FINANCIAL DATA

The summary below should be read in connection with the financial
information included in the Corporation's 1995 Annual Report on Form 10-K and
its Current Report on Form 8-K dated September 6, 1996. The summary below
should also be read in conjunction with the financial information contained
in the Corporation's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996. Interim unaudited data for the nine months ended
September 30, 1996 and 1995 reflect, in the opinion of management of the
Corporation, all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of such data. Results for the
nine months ended September 30, 1996 are not necessarily indicative of
results which may be expected for any other interim period or for the year as
a whole.

<TABLE>
<CAPTION>
Nine Months Ended
September 30,(1) Years Ended December 31,(1)
-------------------- ----------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
----------- ------- ---- ---- ---- ---- ----
(unaudited)
(dollars in millions, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net interest revenue . . . . . . . . $ 1,728 $1,676 $ 2,249 $ 2,037 $ 1,769 $ 1,672 $ 1,512
Provision for credit losses . . . . . 171 194 275 154 107 288 684
Net interest revenue after provision
for credit losses . . . . . . . . . . 1,557 1,482 1,974 1,883 1,662 1,384 828
Noninterest income . . . . . . . . . 1,005 942 1,309 1,035 945 1,020 974
Noninterest expense . . . . . . . . . 1,772 1,531 2,076 1,947 2,002 1,949 1,964
Income (Loss) before income taxes,
extraordinary items & cumulative
effect of changes in accounting
principles 790 893 1,207 971 605 455 (162)
Provision for (Benefit from) income
taxes . . . . . . . . . . . . . . . . 341 395 529 422 262 190 (51)
Income (Loss) before extraordinary
items & cumulative effect of changes
in accounting principles. . . . . . 449 498 678 549 343 265 (111)
Extraordinary items, net of tax . . . -- -- -- (7) -- 73 8
Cumulative effect of changes in
accounting principles, net . . . . -- -- -- -- 24 -- --
Net income (loss) . . . . . $ 449 $ 498 $ 678 $ 542 $ 367 $ 338 $ (103)

Per common share:
Income (Loss) before extraordinary
items & cumulative effect of
changes in accounting principles:
Primary . . . . . . . . . . . . . $2.74 $3.07 $4.17 $3.44 $2.09 $1.77 $( .95)
Fully diluted . . . . . . . . . . 2.69 3.00 4.09 3.36 2.05 1.73 (.95)
Net income (loss):
Primary . . . . . . . . . . . . . 2.74 3.07 4.17 3.39 2.26 2.30 (.89)
Fully diluted . . . . . . . . . . 2.69 3.00 4.09 3.31 2.21 2.24 (.89)
Book value . . . . . . . . . . . . 27.81 25.69 27.01 23.07 21.13 18.98 16.98
Cash dividends declared(2) . . . . 1.25 .91 1.28 .93 .40 .10 .10
Average number of common shares (in
thousands):
Primary . . . . . . . . . . . . . . 153,715 153,086 153,856 148,913 147,033 138,444 129,978
Fully diluted . . . . . . . . . . . 156,300 156,407 156,768 153,616 152,067 144,044 130,313

AVERAGE BALANCE SHEET DATA: $40,176 $37,920 $38,283 $36,017 $32,565 $31,568 $33,001
Loans and lease financing . . . . . .
Total earning assets . . . . . . . . 52,941 48,985 49,567 47,517 42,880 41,658 43,322
Total assets . . . . . . . . . . . . 59,010 55,053 55,744 53,389 47,937 46,290 47,590
Deposits . . . . . . . . . . . . . . 41,460 37,902 38,406 37,919 37,163 37,643 38,534
Notes payable . . . . . . . . . . . . 2,560 2,137 2,142 2,123 1,797 1,252 1,607
Stockholders' equity . . . . . . . . 4,718 4,216 4,304 3,766 3,390 2,762 2,438

</TABLE>
_______________
(1) On July 29, 1996, the Corporation acquired BayBanks. This
acquisition was accounted for as a pooling of interests and,
accordingly, this financial information reflects the
Corporation and BayBanks as if they had operated as a
combined entity for all periods presented. Also, the
Corporation's Current Report on Form 8-K dated September 6,
1996 presents the combined financial position and results of
operations of the Corporation and BayBanks on the same
basis.
(2) Amounts represent the historical cash dividends of the
Corporation.

BANKBOSTON CAPITAL TRUST II

The Trust is a statutory business trust formed under Delaware law
pursuant to (i) the Trust Agreement executed by the Corporation, as Sponsor,
The Bank of New York, as Property Trustee, The Bank of New York (Delaware),
as Delaware Trustee, and the three Administrative Trustees named therein, and
(ii) the filing of a certificate of trust with the Delaware Secretary of
State on December 3, 1996. The Trust exists for the exclusive purposes of (i)
issuing and selling the Trust Securities, (ii) using the proceeds from the
sale of Trust Securities to acquire the Junior Subordinated Debentures and,
(iii) engaging in only those other activities necessary, advisable or
incidental thereto (such as registering the transfer of the Trust
Securities). Accordingly, the Junior Subordinated Debentures will be the
sole assets of the Trust, and payments under the Junior Subordinated
Debentures will be the sole revenues of the Trust. All of the Common
Securities are owned by the Corporation. The Common Securities will rank
pari passu, and payments will be made thereon pro rata, with the Capital
Securities, except that upon the occurrence and continuance of an event of
default under the Trust Agreement resulting from a Debenture Event of
Default, the rights of the Corporation as holder of the Common Securities to
payments in respect of Distributions and payments upon liquidation,
redemption or otherwise will be subordinated to the rights of the holders of
the Capital Securities. See "Description of New Securities--Description of
New Capital Securities--Subordination of Common Securities." The Corporation
has acquired Common Securities in a Liquidation Amount equal to at least 3%
of the total capital of the Trust. The Trust has a term of 31 years, but may
terminate earlier as provided in the Trust Agreement. The Trust's business
and affairs are conducted by its trustees, each appointed by the Corporation
as holder of the Common Securities. The trustees for the Trust are The Bank
of New York, as the Property Trustee (the "Property Trustee"), The Bank of
New York (Delaware), as the Delaware Trustee (the "Delaware Trustee"), and
three individual trustees (the "Administrative Trustees") who are employees
or officers of or affiliated with the Corporation (collectively, the "Issuer
Trustees"). The Bank of New York, as Property Trustee, will act as sole
indenture trustee under the Trust Agreement. The Bank of New York will also
act as indenture trustee under the Guarantee and the Indenture. See
"Description of New Securities--Description of New Guarantee" and "--
Description of New Junior Subordinated Debentures." The holder of the Common
Securities of the Trust or, if an Event of Default under the Trust Agreement
has occurred and is continuing, the holders of a majority in Liquidation
Amount of the Capital Securities will be entitled to appoint, remove or
replace the Property Trustee and/or the Delaware Trustee. In no event will
the holders of the Capital Securities have the right to vote to appoint,
remove or replace the Administrative Trustees; such voting rights will be
vested exclusively in the holder of the Common Securities. The duties and
obligations of each Issuer Trustee are governed by the Trust Agreement. The
Corporation will pay all fees, expenses, debts and obligations (other than
the Trust Securities) related to the Trust and the offering and exchange of
the Capital Securities and will pay, directly or indirectly, all ongoing
costs, expenses and liabilities of the Trust. The principal executive office
of the Trust is c/o Bank of Boston, P.O. Box 2016, Boston, Massachusetts
02106-2016.

BANK OF BOSTON CORPORATION

As of September 30, 1996, on a consolidated basis, the Corporation had
total assets of $62.0 billion, total deposits of $43.3 billion and total
stockholders' equity of $4.8 billion. The Corporation's banking subsidiaries
maintained 547 branches in Massachusetts, Rhode Island, Connecticut and New
Hampshire as of September 30, 1996 and had a presence in 36 states of the
United States and in 24 foreign countries. The Corporation's loans were
diversified geographically, with approximately 77 percent of its total loan
volume consisting of loans and leases made to domestic borrowers and the
balance made overseas. As of September 30, 1996, the Corporation's
subsidiaries employed, in the aggregate, approximately 22,600 full-time
equivalent employees in their domestic and foreign operations.

THE EXCHANGE OFFER

PURPOSE OF THE EXCHANGE OFFER

In connection with the sale of the Old Capital Securities, the
Corporation and the Trust entered into the Registration Rights Agreement with
the Initial Purchasers, pursuant to which the Corporation and the Trust
agreed to file and to use their best efforts to cause to become effective
with the Commission a registration statement with respect to the exchange of
the Old Capital Securities for the New Capital Securities. A copy of the
Registration Rights Agreement has been filed as an Exhibit to the
Registration Statement of which this Prospectus is a part.

The Exchange Offer is being made to satisfy the contractual obligations
of the Corporation and the Trust under the Registration Rights Agreement.
The form and terms of the New Capital Securities are the same as the form and
terms of the Old Capital Securities except that the New Capital Securities
have been registered under the Securities Act and will not be subject to the
$100,000 minimum Liquidation Amount transfer restriction and certain other
restrictions on transfer applicable to the Old Capital Securities and will
not provide for any increase in the Distribution rate thereon. In that
regard, the Old Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been filed by
May 9, 1997 and declared effective by June 8, 1997, the Distribution rate
borne by the Old Capital Securities commencing on June 9, 1997 will increase
by 0.25% per annum until the Exchange Offer is consummated. Upon
consummation of the Exchange Offer, holders of Old Capital Securities will
not be entitled to any increase in the Distribution rate thereon or any
further registration rights under the Registration Rights Agreement, except
under limited circumstances. See "Risk Factors--Consequences of a Failure to
Exchange Old Capital Securities" and "Description of Old Capital Securities."

The Exchange Offer is not being made to, nor will the Trust accept
tenders for exchange from, holders of Old Capital Securities in any
jurisdiction in which the Exchange Offer or the acceptance thereof would not
be in compliance with the securities or blue sky laws of such jurisdiction.

Unless the context requires otherwise, the term "holder" with respect to
the Exchange Offer means any person in whose name the Old Capital Securities
are registered on the books of the Trust or any other person who has obtained
a properly completed bond power from such holder, or any person whose Old
Capital Securities are held of record by The Depository Trust Company ("DTC")
who desires to deliver such Old Capital Securities by book-entry transfer at
DTC.

Pursuant to the Exchange Offer, promptly after the Expiration Date, the
Corporation will exchange, the Old Guarantee for the New Guarantee and the
Old Junior Subordinated Debentures, in an amount corresponding to the Old
Capital Securities accepted for exchange, for a like aggregate principal
amount of the New Junior Subordinated Debentures. The New Guarantee and New
Junior Subordinated Debentures have been registered under the Securities Act.

TERMS OF THE EXCHANGE OFFER

The Trust hereby offers, upon the terms and subject to the conditions
set forth in this Prospectus and in the accompanying Letter of Transmittal,
to exchange up to $250,000,000 aggregate Liquidation Amount of New Capital
Securities for a like aggregate Liquidation Amount of Old Capital Securities
properly tendered on or prior to the Expiration Date and not properly
withdrawn in accordance with the procedures described below. The Trust will
issue, promptly after the Expiration Date, an aggregate Liquidation Amount of
up to $250,000,000 of New Capital Securities in exchange for a like principal
amount of outstanding Old Capital Securities tendered and accepted in
connection with the Exchange Offer. Holders may tender their Old Capital
Securities in whole or in part in a Liquidation Amount of not less than
$100,000 (100 Capital Securities) or any integral multiple of $1,000
Liquidation Amount (one Capital Security) in excess thereof.

The Exchange Offer is not conditioned upon any minimum Liquidation
Amount of Old Capital Securities being tendered. As of the date of this
Prospectus, $250,000,000 aggregate Liquidation Amount of the Old Capital
Securities is outstanding.

Holders of Old Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Old Capital
Securities which are not tendered for or are tendered but not accepted in
connection with the Exchange Offer will remain outstanding and be entitled to
the benefits of the Trust Agreement, but will not be entitled to any further
registration rights under the Registration Rights Agreement, except under
limited circumstances. See "Risk Factors--Consequences of a Failure to
Exchange Old Capital Securities" and "Description of Old Securities."

If any tendered Old Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set
forth herein or otherwise, certificates for any such unaccepted Old Capital
Securities will be returned, without expense, to the tendering holder thereof
promptly after the Expiration Date.

Holders who tender Old Capital Securities in connection with the
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Old Capital Securities in connection with the
Exchange Offer. The Corporation will pay all charges and expenses, other
than certain applicable taxes described below, in connection with the
Exchange Offer. See "--Fees and Expenses."

NEITHER THE CORPORATION, THE BOARD OF DIRECTORS OF THE CORPORATION NOR
ANY ISSUER TRUSTEE OF THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF OLD
CAPITAL SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR
ANY PORTION OF THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
IN ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION.
HOLDERS OF OLD CAPITAL SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO
TENDER PURSUANT TO THE EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD
CAPITAL SECURITIES TO TENDER BASED ON SUCH HOLDERS OWN FINANCIAL POSITION AND
REQUIREMENTS.

The term "Expiration Date" means 5:00 p.m., New York City time, on April
8, 1997 unless the Exchange Offer is extended by the Corporation or the
Trust (in which case the term "Expiration Date" shall mean the latest date
and time to which the Exchange Offer is extended).

The Corporation and the Trust expressly reserve the right in their sole
and absolute discretion, subject to applicable law, at any time and from time
to time, (i) to delay the acceptance of the Old Capital Securities for
exchange, (ii) to terminate the Exchange Offer (whether or not any Old
Capital Securities have theretofore been accepted for exchange) if the Trust
determines, in its sole and absolute discretion, that any of the events or
conditions referred to under "--Conditions to the Exchange Offer" have
occurred or exist or have not been satisfied, (iii) to extend the Expiration
Date of the Exchange Offer and retain all Old Capital Securities tendered
pursuant to the Exchange Offer, subject, however, to the right of holders of
Old Capital Securities to withdraw their tendered Old Capital Securities as
described under "--Withdrawal Rights," and (iv) to waive any condition or
otherwise amend the terms of the Exchange Offer in any respect. If the
Exchange Offer is amended in a manner determined by the Corporation and the
Trust to constitute a material change, or if the Corporation and the Trust
waive a material condition of the Exchange Offer, the Corporation and the
Trust will promptly disclose such amendment by means of a prospectus
supplement that will be distributed to the holders of the Old Capital
Securities, and the Corporation and the Trust will extend the Exchange Offer
to the extent required by Rule 14e-1 under the Exchange Act.

Any such delay in acceptance, extension, termination or amendment will
be followed promptly by oral or written notice thereof to the Exchange Agent
and by making a public announcement thereof, and such announcement in the
case of an extension will be made no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration
Date. Without limiting the manner in which the Corporation and the Trust may
choose to make any public announcement and subject to applicable law, the
Corporation and the Trust shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a
release to an appropriate news agency.

ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES

Upon the terms and subject to the conditions of the Exchange Offer, the
Trust will exchange, and will issue to the Exchange Agent, New Capital
Securities for Old Capital Securities validly tendered and not withdrawn
promptly after the Expiration Date.

In all cases, delivery of New Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the
Exchange Offer will be made only after timely receipt by the Exchange Agent
of (i) Old Capital Securities or a book-entry confirmation of a book-entry
transfer of Old Capital Securities into the Exchange Agent's account at DTC,
(ii) the Letter of Transmittal (or facsimile thereof), properly completed and
duly executed, with any required signature guarantees, and (iii) any other
documents required by the Letter of Transmittal.

The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's
account at DTC.

Subject to the terms and conditions of the Exchange Offer, the Trust
will be deemed to have accepted for exchange, and thereby exchanged, Old
Capital Securities validly tendered and not withdrawn as, if and when the
Trust gives oral or written notice to the Exchange Agent of the Trust's
acceptance of such Old Capital Securities for exchange pursuant to the
Exchange Offer. The Exchange Agent will act as agent for the Trust for the
purpose of receiving tenders of Old Capital Securities, Letters of
Transmittal and related documents, and as agent for tendering holders for the
purpose of receiving Old Capital Securities, Letters of Transmittal and
related documents and transmitting New Capital Securities to validly
tendering holders. Such exchange will be made promptly after the Expiration
Date. If for any reason whatsoever, acceptance for exchange or the exchange
of any Old Capital Securities tendered pursuant to the Exchange Offer is
delayed (whether before or after the Trust's acceptance for exchange of Old
Capital Securities) or the Trust extends the Exchange Offer or is unable to
accept for exchange or exchange Old Capital Securities tendered pursuant to
the Exchange Offer, then, without prejudice to the Trust's rights set forth
herein, the Exchange Agent may, nevertheless, on behalf of the Trust and
subject to Rule 14e-1(c) under the Exchange Act, retain tendered Old Capital
Securities and such Old Capital Securities may not be withdrawn except to the
extent tendering holders are entitled to withdrawal rights as described under
"--Withdrawal Rights."

Pursuant to the Letter of Transmittal, a holder of Old Capital
Securities will warrant and agree in the Letter of Transmittal that it has
full power and authority to tender, exchange, sell, assign and transfer Old
Capital Securities, that the Trust will acquire good, marketable and
unencumbered title to the tendered Old Capital Securities, free and clear of
all liens, restrictions, charges and encumbrances, and the Old Capital
Securities tendered for exchange are not subject to any adverse claims or
proxies. The holder also will warrant and agree that it will, upon request,
execute and deliver any additional documents deemed by the Trust or the
Exchange Agent to be necessary or desirable to complete the exchange, sale,
assignment, and transfer of the Old Capital Securities tendered pursuant to
the Exchange Offer.

PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES

VALID TENDER. Except as set forth below, in order for Old Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees and any other required documents, must
be received by the Exchange Agent at one of its addresses set forth under "--
Exchange Agent," and either (i) tendered Old Capital Securities must be
received by the Exchange Agent, or (ii) such Old Capital Securities must be
tendered pursuant to the procedures for book-entry transfer set forth below
and a book-entry confirmation must be received by the Exchange Agent, in each
case on or prior to the Expiration Date, or (iii) the guaranteed delivery
procedures set forth below must be complied with.

If less than all of the Old Capital Securities are tendered, a tendering
holder should fill in the amount of Old Capital Securities being tendered in
the appropriate box on the Letter of Transmittal. The entire amount of Old
Capital Securities delivered to the Exchange Agent will be deemed to have
been tendered unless otherwise indicated.

THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

BOOK-ENTRY TRANSFER. The Exchange Agent will establish an account with
respect to the Old Capital Securities at DTC for purposes of the Exchange
Offer within two business days after the date of this Prospectus. Any
financial institution that is a participant in DTC's book-entry transfer
facility system may make a book-entry delivery of the Old Capital Securities
by causing DTC to transfer such Old Capital Securities into the Exchange
Agent's account at DTC in accordance with DTC's procedures for transfers.
However, although delivery of Old Capital Securities may be effected through
book-entry transfer into the Exchange Agent's account at DTC, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees and any other required documents, must
in any case be delivered to and received by the Exchange Agent at its address
set forth under "--Exchange Agent" on or prior to the Expiration Date, or the
guaranteed delivery procedure set forth below must be complied with.

DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES
NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

SIGNATURE GUARANTEES. Certificates for the Old Capital Securities need
not be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (a) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the
certificate or (b) such holder completes the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" in the Letter of
Transmittal. In the case of (a) or (b) above, such certificates for Old
Capital Securities must be duly endorsed or accompanied by a properly
executed bond power, with the endorsement or signature on the bond power and
on the Letter of Transmittal guaranteed by a firm or other entity identified
in Rule 17Ad-15 under the Exchange Act as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii)
a broker, dealer, municipal securities broker or dealer or government
securities broker or dealer; (iii) a credit union; (iv) a national securities
exchange, registered securities association or clearing agency; or (v) a
savings association that is a participant in a Securities Transfer
Association (each of the foregoing, an "Eligible Institution"), unless
surrendered on behalf of such Eligible Institution. See Instruction 1 to the
Letter of Transmittal.

GUARANTEED DELIVERY. If a holder desires to tender Old Capital
Securities pursuant to the Exchange Offer and the certificates for such Old
Capital Securities are not immediately available or time will not permit all
required documents to reach the Exchange Agent on or prior to the Expiration
Date, or the procedure for book-entry transfer cannot be completed on a
timely basis, such Old Capital Securities may nevertheless be tendered,
provided that all of the following guaranteed delivery procedures are
complied with:

(a) such tenders are made by or through an Eligible Institution;

(b) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form accompanying the Letter of Transmittal, is received
by the Exchange Agent, as provided below, on or prior to the Expiration Date;
and

(c) the certificates (or a book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees and any other documents
required by the Letter of Transmittal, are received by the Exchange Agent
within three New York Stock Exchange trading days after the date of execution
of such Notice of Guaranteed Delivery.

The Notice of Guaranteed Delivery may be delivered by hand, or
transmitted by facsimile or mail to the Exchange Agent and must include a
guarantee by an Eligible Institution in the form set forth in such notice.

Notwithstanding any other provision hereof, the delivery of New Capital
Securities in exchange for Old Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a book-
entry confirmation with respect to such Old Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees and any other
documents required by the Letter of Transmittal. Accordingly, the delivery
of New Capital Securities might not be made to all tendering holders at the
same time, and will depend upon when Old Capital Securities, book-entry
confirmations with respect to Old Capital Securities and other required
documents are received by the Exchange Agent.

The Trust's acceptance for exchange of Old Capital Securities tendered
pursuant to any of the procedures described above will constitute a binding
agreement between the tendering holder and the Trust upon the terms and
subject to the conditions of the Exchange Offer.

DETERMINATION OF VALIDITY. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange
of any tendered Old Capital Securities will be determined by the Corporation
and the Trust, in their sole discretion, whose determination shall be final
and binding on all parties. The Corporation and the Trust reserve the
absolute right, in their sole and absolute discretion, to reject any and all
tenders determined by them not to be in proper form or the acceptance of
which, or exchange for, may, in the opinion of counsel to the Corporation and
the Trust, be unlawful. The Corporation and the Trust also reserve the
absolute right, subject to applicable law, to waive any of the conditions of
the Exchange Offer as set forth under "--Conditions to the Exchange Offer" or
any condition or irregularity in any tender of Old Capital Securities of any
particular holder whether or not similar conditions or irregularities are
waived in the case of other holders.

The interpretation by the Corporation and the Trust of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Neither the
Corporation, the Trust, any affiliates or assigns of the Corporation or the
Trust, the Exchange Agent nor any other person shall be under any duty to
give any notification of any irregularities in tenders or incur any liability
for failure to give any such notification.

If any Letter of Transmittal, endorsement, bond power, power of
attorney, or any other document required by the Letter of Transmittal is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
unless waived by the Corporation and the Trust, proper evidence satisfactory
to the Corporation and the Trust, in their sole discretion, of such person's
authority to so act must be submitted.

A beneficial owner of Old Capital Securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.

RESALES OF NEW CAPITAL SECURITIES

The Trust is making the Exchange Offer for the New Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance
of the Commission as set forth in certain interpretive letters addressed to
third parties in other transactions. However, neither the Corporation nor
the Trust sought its own interpretive letter and there can be no assurance
that the staff of the Division of Corporation Finance of the Commission would
make a similar determination with respect to the Exchange Offer as it has in
such interpretive letters to third parties. Based on these interpretations
by the staff of the Division of Corporation Finance of the Commission, and
subject to the two immediately following sentences, the Corporation and the
Trust believe that New Capital Securities issued pursuant to this Exchange
Offer in exchange for Old Capital Securities may be offered for resale,
resold and otherwise transferred by a holder thereof (other than a holder who
is a broker-dealer) without further compliance with the registration and
prospectus delivery requirements of the Securities Act, provided that such
New Capital Securities are acquired in the ordinary course of such holder's
business and that such holder is not participating, and has no arrangement or
understanding with any person to participate, in a distribution (within the
meaning of the Securities Act) of such New Capital Securities. However, any
holder of Old Capital Securities who is an Affiliate of the Corporation or
the Trust or who intends to participate in the Exchange Offer for the purpose
of distributing New Capital Securities, or any broker-dealer who purchased
Old Capital Securities from the Trust for resale pursuant to Rule 144A or any
other available exemption under the Securities Act, (a) will not be able to
rely on the interpretations of the staff of the Division of Corporation
Finance of the Commission set forth in the above-mentioned interpretive
letters, (b) will not be permitted or entitled to tender such Old Capital
Securities in the Exchange Offer and (c) must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
any sale or other transfer of such Old Capital Securities unless such sale is
made pursuant to an exemption from such requirements. In addition, as
described below, if any broker-dealer holds Old Capital Securities acquired
for its own account as a result of market-making or other trading activities
and exchanges such Old Capital Securities for New Capital Securities, then
such broker-dealer must deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of such New Capital Securities.

Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required
to represent that (i) it is not an Affiliate of the Corporation or the Trust,
(ii) any New Capital Securities to be received by it are being acquired in
the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such New Capital Securities, and (iv) if
such holder is not a broker-dealer, such holder is not engaged in, and does
not intend to engage in, a distribution (within the meaning of the Securities
Act) of such New Capital Securities. In addition, the Corporation and the
Trust may require such holder, as a condition to such holder's eligibility to
participate in the Exchange Offer, to furnish to the Corporation and the
Trust (or an agent thereof) in writing information as to the number of
"beneficial owners" (within the meaning of Rule 13d-3 under the Exchange Act)
on behalf of whom such holder holds the Capital Securities to be exchanged in
the Exchange Offer. Each broker-dealer that receives New Capital Securities
for its own account pursuant to the Exchange Offer must acknowledge that it
acquired the Old Capital Securities for its own account as the result of
market-making activities or other trading activities and must agree that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Capital Securities. The Letter of
Transmittal states that, by so acknowledging and by delivering a prospectus,
a broker-dealer will not be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act. Based on the position taken by the
staff of the Division of Corporation Finance of the Commission in the
interpretive letters referred to above, the Corporation and the Trust believe
that Participating Broker-Dealers who acquired Old Capital Securities for
their own accounts as a result of market-making activities or other trading
activities may fulfill their prospectus delivery requirements with respect to
the New Capital Securities received upon exchange of such Old Capital
Securities (other than Old Capital Securities which represent an unsold
allotment from the original sale of the Old Capital Securities) with a
prospectus meeting the requirements of the Securities Act, which may be the
prospectus prepared for an exchange offer so long as it contains a
description of the plan of distribution with respect to the resale of such
New Capital Securities. Accordingly, this Prospectus, as it may be amended
or supplemented from time to time, may be used by a Participating Broker-
Dealer during the period referred to below in connection with resales of New
Capital Securities received in exchange for Old Capital Securities where such
Old Capital Securities were acquired by such Participating Broker-Dealer for
its own account as a result of market-making or other trading activities.
Subject to certain provisions set forth in the Registration Rights Agreement,
the Corporation and the Trust have agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New Capital Securities for a
period ending 90-days after the Expiration Date (subject to extension under
certain limited circumstances described below) or, if earlier, when all such
New Capital Securities have been disposed of by such Participating Broker-
Dealer. See "Plan of Distribution." However, a Participating Broker-Dealer
who intends to use this Prospectus in connection with the resale of New
Capital Securities received in exchange for Old Capital Securities pursuant
to the Exchange Offer must notify the Corporation or the Trust, or cause the
Corporation or the Trust to be notified, on or prior to the Expiration Date,
that it is a Participating Broker-Dealer. Such notice may be given in the
space provided for that purpose in the Letter of Transmittal or may be
delivered to the Exchange Agent at one of the addresses set forth herein
under "--Exchange Agent." Any Participating Broker-Dealer who is an
"affiliate" of the Corporation or the Trust may not rely on such interpretive
letters and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.

WITHDRAWAL RIGHTS

Except as otherwise provided herein, tenders of Old Capital Securities
may be withdrawn at any time on or prior to the Expiration Date.

In order for a withdrawal to be effective, a written, telegraphic, telex
or facsimile transmission of such notice of withdrawal must be timely
received by the Exchange Agent at one of its addresses set forth under "--
Exchange Agent" on or prior to the Expiration Date. Any such notice of
withdrawal must specify the name of the person who tendered the Old Capital
Securities to be withdrawn, the aggregate principal amount of Old Capital
Securities to be withdrawn, and (if certificates for such Old Capital
Securities have been tendered) the name of the registered holder of the Old
Capital Securities as set forth on the Old Capital Securities, if different
from that of the person who tendered such Old Capital Securities. If Old
Capital Securities have been delivered or otherwise identified to the
Exchange Agent, then prior to the physical release of such Old Capital
Securities, the tendering holder must submit the serial numbers shown on the
particular Old Capital Securities to be withdrawn and the signature on the
notice of withdrawal must be guaranteed by an Eligible Institution, except in
the case of Old Capital Securities tendered for the account of an Eligible
Institution. If Old Capital Securities have been tendered pursuant to the
procedures for book-entry transfer set forth in "--Procedures for Tendering
Old Capital Securities," the notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawal of Old
Capital Securities, in which case a notice of withdrawal will be effective if
delivered to the Exchange Agent by written, telegraphic, telex or facsimile
transmission. Withdrawals of tenders of Old Capital Securities may not be
rescinded. Old Capital Securities properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time on or prior to the Expiration Date by following any of
the procedures described above under "--Procedures for Tendering Old Capital
Securities."

All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by the Trust, in
its sole discretion, whose determination shall be final and binding on all
parties. Neither the Corporation, the Trust, any affiliates or assigns of
the Corporation or the Trust, the Exchange Agent nor any other person shall
be under any duty to give any notification of any irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification. Any Old Capital Securities which have been tendered but which
are withdrawn will be returned to the holder thereof promptly after
withdrawal.

DISTRIBUTIONS ON NEW CAPITAL SECURITIES

Holders of Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive Distributions on such Old Capital
Securities and will be deemed to have waived the right to receive any
Distributions on such Old Capital Securities accumulated from and including
December 10, 1996. Accordingly, holders of New Capital Securities as of the
record date for the payment of Distributions on June 15, 1997 will be
entitled to receive Distributions accumulated from and including December 10,
1996.

CONDITIONS TO THE EXCHANGE OFFER

Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Corporation and the Trust will not be
required to accept for exchange, or to exchange, any Old Capital Securities
for any New Capital Securities, and, as described below, may terminate the
Exchange Offer (whether or not any Old Capital Securities have theretofore
been accepted for exchange) or may waive any conditions to or amend the
Exchange Offer, if any of the following conditions have occurred or exists or
have not been satisfied:

(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the New Capital Securities issued
pursuant to the Exchange Offer in exchange for Old Capital Securities to be
offered for resale, resold and otherwise transferred by holders thereof
(other than broker-dealers and any such holder which is an Affiliate of the
Corporation or the Trust) without compliance with the registration and
prospectus delivery provisions of the Securities Act provided that such New
Capital Securities are acquired in the ordinary course of such holders'
business and such holders have no arrangement or understanding with any
person to participate in the distribution of such New Capital Securities; or

(b) any law, statute, rule or regulation shall have been adopted or
enacted which, in the judgment of the Corporation or the Trust, would
reasonably be expected to impair its ability to proceed with the Exchange
Offer; or

(c) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
the Corporation or the Trust, threatened for that purpose or any governmental
approval has not been obtained, which approval the Corporation or the Trust
shall, in its sole discretion, deem necessary for the consummation of the
Exchange Offer as contemplated hereby.

If the Corporation or the Trust determines in its sole and absolute
discretion that any of the foregoing events or conditions has occurred or
exists or has not been satisfied, it may, subject to applicable law,
terminate the Exchange Offer (whether or not any Old Capital Securities have
theretofore been accepted for exchange) or may waive any such condition or
otherwise amend the terms of the Exchange Offer in any respect. If such
waiver or amendment constitutes a material change to the Exchange Offer, the
Corporation or the Trust will promptly disclose such waiver or amendment by
means of a prospectus supplement that will be distributed to the registered
holders of the Old Capital Securities and will extend the Exchange Offer to
the extent required by Rule 14e-1 under the Exchange Act.

EXCHANGE AGENT

The Bank of New York has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other
required documents, questions, requests for assistance, and requests for
additional copies of this Prospectus or of the Letter of Transmittal should
be directed to the Exchange Agent as follows:

BY REGISTERED OR CERTIFIED MAIL: BY HAND OR OVERNIGHT DELIVERY:
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 New York, New York 10286
Attention: Reorganization Department, Attention: Reorganization Department,
George Johnson George Johnson

Confirm By Telephone:
(212) 815-4997

Facsimile Transmissions:
(ELIGIBLE INSTITUTIONS ONLY)
(212) 571-3080

Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.

FEES AND EXPENSES

The Corporation has agreed to pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable out-
of-pocket expenses in connection therewith. The Corporation will also pay
brokerage houses and other custodians, nominees and fiduciaries the
reasonable out-of-pocket expenses incurred by them in forwarding copies of
this Prospectus and related documents to the beneficial owners of Old Capital
Securities, and in handling or tendering for their customers.

Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however,
New Capital Securities are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the Old Capital
Securities tendered, or if a transfer tax is imposed for any reason other
than the exchange of Old Capital Securities in connection with the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.

Neither the Corporation nor the Trust will make any payment to brokers,
dealers or other nominees soliciting acceptances of the Exchange Offer.

DESCRIPTION OF NEW SECURITIES

DESCRIPTION OF NEW CAPITAL SECURITIES

Pursuant to the terms of the Trust Agreement, the Trust has issued the
Old Capital Securities and the Common Securities and will issue the New
Capital Securities pursuant to the Exchange Offer. The New Capital
Securities will represent preferred beneficial interests in the Trust and the
holders of the New Capital Securities and the Old Capital Securities will be
entitled to a preference over the Common Securities in certain circumstances
with respect to Distributions and amounts payable on redemption of the Trust
Securities or liquidation of the Trust. See "--Subordination of Common
Securities." The Trust Agreement has been qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). This summary
of certain provisions of the New Capital Securities and the Trust Agreement
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the Trust Agreement,
including the definitions therein of certain terms.

GENERAL. The Capital Securities (including the Old Capital Securities
and the New Capital Securities) are limited to $250,000,000 aggregate
Liquidation Amount at any one time outstanding. The New Capital Securities
will rank pari passu, and payments will be made thereon pro rata, with the
Old Capital Securities and the Common Securities except as described under "-
- - - -Subordination of Common Securities." Legal title to the Junior Subordinated
Debentures will be held by the Property Trustee in trust for the benefit of
the holders of the Capital Securities and Common Securities. The New
Guarantee will be a guarantee on a subordinated basis but will not guarantee
payment of Distributions or amounts payable on redemption of the New Capital
Securities or on liquidation of the Trust when the Trust does not have funds
on hand legally available for such payments. See "--Description of New
Guarantee."

DISTRIBUTIONS. Distributions on the New Capital Securities will be
cumulative, will accumulate from December 10, 1996 and will be payable
semi-annually in arrears on June 15 and December 15 of each year, commencing
June 15, 1997, at the annual rate of 73/4% of the Liquidation Amount to the
holders of the New Capital Securities on the relevant record dates. The
record dates will be the first day of the month in which the relevant
Distribution Date (as defined below) falls. The amount of Distributions
payable for any period will be computed on the basis of a 360-day year of
twelve 30-day months. In the event that any date on which Distributions are
payable on the New Capital Securities is not a Business Day (as defined
below), payment of the Distribution payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect to any such delay), in each case with the same force and
effect as if made on such date (each date on which Distributions are payable
in accordance with the foregoing, a "Distribution Date"). A "Business Day"
shall mean any day other than a Saturday or a Sunday, or a day on which
banking institutions in The City of New York or Boston, Massachusetts are
authorized or required by law or executive order to remain closed.

So long as no Debenture Event of Default shall have occurred and be
continuing, the Corporation will have the right under the Indenture to defer
the payment of interest on the New Junior Subordinated Debentures at any time
or from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period, provided that no Extension
Period may extend beyond the Stated Maturity Date. Upon any such election,
semi-annual Distributions on the New Capital Securities will be deferred by
the Trust during any such Extension Period. Distributions to which holders of
the New Capital Securities are entitled during any such Extension Period will
accumulate additional Distributions thereon at the rate per annum of 73/4%
thereof, compounded semi-annually from the relevant Distribution Date, but
not exceeding the interest rate then accruing on the New Junior Subordinated
Debentures. The term "Distributions," as used herein, shall include any such
additional Distributions.

Prior to the termination of any Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or
to extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due, and subject to the
foregoing limitations, the Corporation may elect to begin a new Extension
Period. The Corporation must give the Property Trustee, the Administrative
Trustees and the Debenture Trustee notice of its election of any such
Extension Period at least five Business Days prior to the earlier of (i) the
date the Distributions on the New Capital Securities would have been payable
except for the election to begin such Extension Period or (ii) the date the
Administrative Trustees are required to give notice to any securities
exchange or to holders of such New Capital Securities of the record date or
the date such Distributions are payable but in any event not less than five
Business Days prior to such record date. There is no limitation on the number
of times that the Corporation may elect to begin an Extension Period. See "--
Description of New Junior Subordinated Debentures--Option to Extend Interest
Payment Period" and "Certain United States Federal Income Tax Considerations-
- - - -Interest Income and Original Issue Discount."

During any Extension Period, the Corporation may not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Corporation's capital stock
(which includes common and preferred stock) or (ii) make any payment of
principal of or premium, if any, or interest on or repay, repurchase or
redeem any debt securities of the Corporation (including Other Debentures)
that rank pari passu with or junior in right of payment to the Junior
Subordinated Debentures or (iii) make any guarantee payments with respect to
any guarantee by the Corporation of the debt securities of any subsidiary of
the Corporation (including Other Guarantees) if such guarantee ranks pari
passu with or junior in right of payment to the Junior Subordinated
Debentures (other than (a) dividends or distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of, common
stock of the Corporation, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of
stock under any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto, (c) payments under the Guarantee, (d) as a
result of a reclassification of the Corporation's capital stock or the
exchange or conversion of one class, or series of the Corporation's capital
stock for another class or series of the Corporation's capital stock, (e) the
purchase of fractional interests in shares of the Corporation's capital stock
pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, and (f) purchases of common stock
related to the issuance of common stock or rights under any of the
Corporation's benefit plans for its directors, officers or employees or any
of the Corporation's dividend reinvestment plans).

Although the Corporation may in the future exercise its option to defer
payments of interest on the New Junior Subordinated Debentures, the
Corporation has no such current intention.

The revenue of the Trust available for distribution to holders of the
Capital Securities will be limited to payments under the New Junior
Subordinated Debentures. See "--Description of New Junior Subordinated
Debentures--General." If the Corporation does not make interest payments on
the New Junior Subordinated Debentures, the Property Trustee will not have
funds available to pay Distributions on the New Capital Securities. The
payment of Distributions on the New Capital Securities (if and to the extent
the Trust has funds on hand legally available for the payment of such
Distributions) will be guaranteed by the Corporation on a limited basis as
set forth herein under "--Description of New Guarantee."

REDEMPTION. Upon the repayment on the Stated Maturity Date or
prepayment prior to the Stated Maturity Date of the Junior Subordinated
Debentures, the proceeds from such repayment or prepayment shall be applied
by the Property Trustee to redeem a Like Amount (as defined below) of the
Trust Securities, upon not less than 30 nor more than 60 days notice of a
date of redemption (the "Redemption Date"), at the applicable Redemption
Price, which shall be equal to (i) in the case of the repayment of the Junior
Subordinated Debentures on the Stated Maturity Date, the Maturity Redemption
Price (equal to the principal of, and accrued interest on, the New Junior
Subordinated Debentures), (ii) in the case of the optional prepayment of the
Junior Subordinated Debentures upon the occurrence and continuation of a
Special Event, the Special Event Redemption Price (equal to the Special Event
Prepayment Price in respect of the Junior Subordinated Debentures) and (iii)
in the case of the optional prepayment of the Junior Subordinated Debentures
other than as contemplated in clause (ii) above, the Optional Redemption
Price (equal to the Optional Prepayment Price in respect of the Junior
Subordinated Debentures). See "--Description of New Junior Subordinated
Debentures--Optional Prepayment" and "--Special Event Prepayment."

"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the
principal amount of Junior Subordinated Debentures to be paid in accordance
with their terms and (ii) with respect to a distribution of Junior
Subordinated Debentures upon the liquidation of the Trust, Junior
Subordinated Debentures having a principal amount equal to the Liquidation
Amount of the Trust Securities of the holder to whom such Junior Subordinated
Debentures are distributed.

The Corporation will have the option to prepay the Junior Subordinated
Debentures, (i) in whole or in part, on or after December 15, 2006, at the
applicable Optional Prepayment Price and (ii) in whole but not in part, at
any time, upon the occurrence of a Special Event, at the Special Event
Prepayment Price, in each case subject to receipt of prior approval by the
Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve.

LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED
DEBENTURES. The Corporation will have the right at any time to terminate the
Trust and cause the Junior Subordinated Debentures to be distributed to the
holders of the Trust Securities in liquidation of the Trust. Such right is
subject to (i) the Corporation having received an opinion of counsel to the
effect that such distribution will not be a taxable event to holders of
Capital Securities and (ii) the prior approval of the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal
Reserve.

The Trust shall automatically terminate upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Corporation;
(ii) the distribution of a Like Amount of the Junior Subordinated Debentures
to the holders of the Trust Securities, if the Corporation, as Sponsor, has
given written direction to the Property Trustee to terminate the Trust (which
direction is optional and, except as described above, wholly within the
discretion of the Corporation, as Sponsor); (iii) redemption of all of the
Trust Securities in accordance with their terms; (iv) expiration of the term
of the Trust; and (v) the entry of an order for the dissolution of the Trust
by a court of competent jurisdiction.

If a termination occurs as described in clause (i), (ii), (iv), or (v)
above, the Trust shall be liquidated by the Issuer Trustees as expeditiously
as the Issuer Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of the Trust as provided by
applicable law, to the holders of the Trust Securities a Like Amount of the
Junior Subordinated Debentures, unless such distribution is determined by the
Property Trustee not to be practicable, in which event such holders will be
entitled to receive out of the assets of the Trust legally available for
distribution to holders, after satisfaction of liabilities to creditors of
the Trust as provided by applicable law, an amount equal to the aggregate of
the Liquidation Amount plus accumulated and unpaid Distributions thereon to
the date of payment (such amount being the "Liquidation Distribution"). If
such Liquidation Distribution can be paid only in part because the Trust has
insufficient assets on hand legally available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on
the Capital Securities and the Common Securities shall be paid on a pro rata
basis, except that if a Debenture Event of Default has occurred and is
continuing, the Capital Securities shall have a priority over the Common
Securities. See "--Subordination of Common Securities." If an early
termination occurs as described in clause (v) above, the Junior Subordinated
Debentures will be subject to optional prepayment, in whole but not in part,
on or after December 15, 2006.

If the Corporation elects not to prepay the Junior Subordinated
Debentures prior to maturity in accordance with their terms and either elects
not to or is unable to liquidate the Trust and distribute the Junior
Subordinated Debentures to holders of the Trust Securities, the Trust
Securities will remain outstanding until the repayment of the Junior
Subordinated Debentures on the Stated Maturity Date.

After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities, (i) the Trust
Securities will no longer be deemed to be outstanding, (ii) each registered
global certificate, if any, representing Trust Securities and held by DTC or
its nominee will be exchanged for a registered global certificate or
certificates representing the Junior Subordinated Debentures to be delivered
upon such distribution and (iii) any certificates representing Trust
Securities not held by DTC or its nominee will be deemed to represent Junior
Subordinated Debentures having a principal amount equal to the Liquidation
Amount of such Trust Securities, and bearing accrued and unpaid interest in
an amount equal to the accumulated and unpaid Distributions on such Trust
Securities until such certificates are presented to the Administrative
Trustees or their agent for cancellation, whereupon the Corporation will
issue to such holder, and the Debenture Trustee will authenticate, a
certificate representing such Junior Subordinated Debentures.

There can be no assurance as to the market prices for the New Capital
Securities or the New Junior Subordinated Debentures that may be distributed
in exchange for the Trust Securities if a termination and liquidation of the
Trust were to occur. Accordingly, the New Capital Securities that an investor
may purchase, or the New Junior Subordinated Debentures that the investor may
receive on termination and liquidation of the Trust, may trade at a discount
to the price that the investor paid to purchase the New Capital Securities
offered hereby.

REDEMPTION PROCEDURES. If applicable, Trust Securities shall be
redeemed at the applicable Redemption Price with the proceeds from the
contemporaneous repayment or prepayment of the Junior Subordinated
Debentures. Any redemption of Trust Securities shall be made and the
applicable Redemption Price shall be payable on the Redemption Date only to
the extent that the Trust has funds legally available for the payment of such
applicable Redemption Price. See also "--Subordination of Common Securities."

If the Trust gives a notice of redemption in respect of the Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date,
to the extent funds are legally available, with respect to the Capital
Securities held by DTC or its nominees, the Property Trustee will deposit
irrevocably with DTC funds sufficient to pay the applicable Redemption Price.
See "--Form, Denomination, Book-Entry Procedures and Transfer." With respect
to the Capital Securities held in certificated form, the Property Trustee, to
the extent funds are legally available, will irrevocably deposit with the
paying agent for the Capital Securities funds sufficient to pay the
applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the applicable Redemption Price to the
holders thereof upon surrender of their certificates evidencing the Capital
Securities. See "--Payment and Paying Agency." Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date shall be payable to
the holders of such Capital Securities on the relevant record dates for the
related Distribution Dates. If notice of redemption shall have been given and
funds deposited as required, then upon the date of such deposit, all rights
of the holders of the Capital Securities will cease, except the right of the
holders of the Capital Securities to receive the applicable Redemption Price,
but without interest on such Redemption Price, and the Capital Securities
will cease to be outstanding. In the event that any Redemption Date of
Capital Securities is not a Business Day, then the applicable Redemption
Price payable on such date will be paid on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any
such delay), in each case with the same force and effect as if made on such
date. In the event that payment of the applicable Redemption Price is
improperly withheld or refused and not paid either by the Trust or by the
Corporation pursuant to the New Guarantee as described under "--Description
of New Guarantee," Distributions on Capital Securities will continue to
accumulate at the then applicable rate, from the Redemption Date originally
established by the Trust to the date such applicable Redemption Price is
actually paid, in which case the actual payment date will be the Redemption
Date for purposes of calculating the applicable Redemption Price.

Subject to applicable law (including, without limitation, United States
federal securities law), the Corporation or its subsidiaries may at any time
and from time to time purchase outstanding Capital Securities by tender, in
the open market or by private agreement.

Notice of any redemption will be mailed at least 30-days but not more
than 60-days prior to the Redemption Date to each holder of Trust Securities
at its registered address. Unless the Corporation defaults in payment of the
applicable Prepayment Price on, or in the repayment of, the Junior
Subordinated Debentures, Distributions will cease to accrue on the Trust
Securities called for redemption on and after the Redemption Date.

SUBORDINATION OF COMMON SECURITIES. Payment of Distributions on, and
the Redemption Price of, the Capital Securities and Common Securities, as
applicable, shall be made pro rata based on the Liquidation Amount of the
Capital Securities and Common Securities; provided, however, that if on any
Distribution Date or Redemption Date a Debenture Event of Default shall have
occurred and be continuing, no payment of any Distribution on, or applicable
Redemption Price of, any of the Common Securities, and no other payment on
account of the redemption, liquidation or other acquisition of the Common
Securities, shall be made unless payment in full in cash of all accumulated
and unpaid Distributions on all of the outstanding Capital Securities for all
Distribution periods terminating on or prior thereto, or in the case of
payment of the applicable Redemption Price the full amount of such Redemption
Price, shall have been made or provided for, and all funds available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions on, or Redemption Price of, the Capital Securities then due and
payable.

In the case of any Event of Default, the Corporation as holder of the
Common Securities will be deemed to have waived any right to act with respect
to such Event of Default until the effect of such Event of Default shall have
been cured, waived or otherwise eliminated. Until any such Event of Default
has been so cured, waived or otherwise eliminated, the Property Trustee shall
act solely on behalf of the holders of the Capital Securities and not on
behalf of the Corporation as holder of the Common Securities, and only the
holders of the Capital Securities will have the right to direct the Property
Trustee to act on their behalf.

EVENTS OF DEFAULT; NOTICE. The occurrence of a Debenture Event of
Default (see "Description of New Junior Subordinated Debentures--Debenture
Events of Default") constitutes an "Event of Default" under the Trust
Agreement.

Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Corporation, as Sponsor, unless such Event of
Default shall have been cured or waived. The Corporation, as Sponsor, and the
Administrative Trustees are required to file annually with the Property
Trustee a certificate as to whether or not they are in compliance with all
the conditions and covenants applicable to them under the Trust Agreement.

If a Debenture Event of Default has occurred and is continuing, the
Capital Securities shall have a preference over the Common Securities as
described under "--Liquidation of the Trust and Distribution of New Junior
Subordinated Debentures" and "--Subordination of Common Securities."

REMOVAL OF ISSUER TRUSTEES. Unless a Debenture Event of Default shall
have occurred and be continuing, any Issuer Trustee may be removed at any
time by the holder of the Common Securities. If a Debenture Event of Default
has occurred and is continuing, the Property Trustee and the Delaware Trustee
may be removed at such time by the holders of a majority in Liquidation
Amount of the outstanding Capital Securities. In no event will the holders of
the Capital Securities have the right to vote to appoint, remove or replace
the Administrative Trustees, which voting rights are vested exclusively in
the Corporation as the holder of the Common Securities. No resignation or
removal of an Issuer Trustee and no appointment of a successor trustee shall
be effective until the acceptance of appointment by the successor trustee in
accordance with the provisions of the Trust Agreement.

MERGER OR CONSOLIDATION OF ISSUER TRUSTEES. Any corporation into which
the Property Trustee, the Delaware Trustee or any Administrative Trustee that
is not a natural person may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which such Issuer Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust
business of such Issuer Trustee, shall be the successor of such Issuer
Trustee under the Trust Agreement, provided such corporation shall be
otherwise qualified and eligible.

MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST.
The Trust may not merge with or into, consolidate, amalgamate, or be replaced
by, or convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any corporation or other Person, except as
described below. The Trust may, at the request of the Corporation, as
Sponsor, with the consent of the Administrative Trustees but without the
consent of the holders of the Capital Securities, merge with or into,
consolidate, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to a
trust organized as such under the laws of any State; provided, that (i) such
successor entity either (a) expressly assumes all of the obligations of the
Trust with respect to the Capital Securities or (b) substitutes for the
Capital Securities other securities having substantially the same terms as
the Capital Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Capital Securities rank in priority with
respect to distributions and payments upon liquidation, redemption and
otherwise, (ii) the Corporation expressly appoints a trustee of such
successor entity possessing the same powers and duties as the Property
Trustee with respect to the Junior Subordinated Debentures, (iii) the
Successor Securities are listed, or any Successor Securities will be listed
upon notification of issuance, on any national securities exchange or other
organization on which Capital Securities are then listed, if any, (iv) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not cause the Capital Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Capital Securities
(including any Successor Securities) in any material respect, (vi) such
successor entity has a purpose identical to that of the Trust, (vii) prior to
such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease, the Corporation has received an opinion from independent counsel to
the Trust experienced in such matters to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of the holders of
the Capital Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such
successor entity will be required to register as an investment company under
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and (viii) the Corporation or any permitted successor or assignee owns
all of the common securities of such successor entity and guarantees the
obligations of such successor entity under the Successor Securities at least
to the extent provided by the Guarantee. Notwithstanding the foregoing, the
Trust shall not, except with the consent of holders of 100% in Liquidation
Amount of the Trust Securities, consolidate, amalgamate, merge with or into,
or be replaced by or convey, transfer or lease its properties and assets as
an entirety or substantially as an entirety to any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger, replacement, conveyance, transfer
or lease would cause the Trust or the successor entity not to be classified
as a grantor trust for United States federal income tax purposes.

VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT. Except as provided
below and under "--Mergers, Consolidations, Amalgamations or Replacements of
the Trust" and "--Description of New Guarantee--Amendments and Assignment"
and as otherwise required by law and the Trust Agreement, the holders of the
New Capital Securities will have no voting rights.

The Trust Agreement may be amended from time to time by the Corporation,
the Property Trustee and the Administrative Trustees, without the consent of
the holders of the Trust Securities (i) to cure any ambiguity, correct or
supplement any provisions in the Trust Agreement that may be inconsistent
with any other provision, or to make any other provisions with respect to
matters or questions arising under the Trust Agreement, which shall not be
inconsistent with the other provisions of the Trust Agreement, or (ii) to
modify, eliminate or add to any provisions of the Trust Agreement to such
extent as shall be necessary to ensure that the Trust will be classified for
United States federal income tax purposes as a grantor trust at all times
that any Trust Securities are outstanding or to ensure that the Trust will
not be required to register as an "investment company" under the Investment
Company Act; provided, however, that in the case of clause (i), such action
shall not adversely affect in any material respect the interests of the
holders of the Trust Securities, and any amendments of the Trust Agreement
shall become effective when notice thereof is given to the holders of the
Trust Securities. The Trust Agreement may be amended by the Issuer Trustees
and the Corporation (i) with the consent of holders representing a majority
(based upon Liquidation Amount) of the outstanding Trust Securities, and (ii)
upon receipt by the Issuer Trustees of an opinion of counsel to the effect
that such amendment or the exercise of any power granted to the Issuer
Trustees in accordance with such amendment will not affect the Trust's status
as a grantor trust for United States federal income tax purposes or the
Trust's exemption from status as an "investment company" under the Investment
Company Act, provided that, without the consent of each holder of Trust
Securities, the Trust Agreement may not be amended to (i) change the amount
or timing of any Distribution on the Trust Securities or otherwise adversely
affect the amount of any Distribution required to be made in respect of the
Trust Securities as of a specified date or (ii) restrict the right of a
holder of Trust Securities to institute suit for the enforcement of any such
payment on or after such date; it being understood that the New Capital
Securities and any Old Capital Securities which remain outstanding after
consummation of the Exchange Offer will vote together as a single class for
purposes of determining whether holders of the requisite percentage in
outstanding Liquidation Amount thereof have taken certain actions or
exercised certain rights under the Trust Agreement.

So long as any Junior Subordinated Debentures are held by the Property
Trustee, the Issuer Trustees shall not (i) direct the time, method and place
of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on such Property Trustee
with respect to the Junior Subordinated Debentures, (ii) waive certain past
defaults under the Indenture, (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Junior
Subordinated Debentures or (iv) consent to any amendment, modification or
termination of the Indenture or the Junior Subordinated Debentures, where
such consent shall be required, without, in each case, obtaining the prior
approval of the holders of a majority in Liquidation Amount of all
outstanding Capital Securities; provided, however, that where a consent under
the Indenture would require the consent of each holder of Junior Subordinated
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior approval of each holder of the Capital Securities.
The Issuer Trustees shall not revoke any action previously authorized or
approved by a vote of the holders of the Capital Securities except by
subsequent vote of such holders. The Property Trustee shall notify each
holder of Capital Securities of any notice of default with respect to the
Junior Subordinated Debentures. In addition to obtaining the foregoing
approvals of such holders of the Capital Securities, prior to taking any of
the foregoing actions, the Issuer Trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation for United States
federal income tax purposes on account of such action.

Any required approval of holders of Capital Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be given
to each holder of record of Capital Securities in the manner set forth in the
Trust Agreement.

No vote or consent of the holders of Capital Securities will be required
for the Trust to redeem and cancel the Capital Securities in accordance with
the Trust Agreement.

Notwithstanding that holders of the Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Corporation, the Issuer Trustees or
any affiliate of the Corporation or any Issuer Trustees, shall, for purposes
of such vote or consent, be treated as if they were not outstanding.

FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER. The New Capital
Securities may be represented by one or more New Capital Securities in
registered, global form (collectively, the "Global New Capital Securities"
and together with the Old Capital Securities in registered global form, the
"Global Capital Securities"). The Global New Capital Securities will be
deposited upon issuance with the Property Trustee as custodian for DTC, in
New York, New York, and registered in the name of DTC or its nominee, in each
case for credit to an account of a direct or indirect participant in DTC as
described below.

Except as set forth below, the Global Capital 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 Capital
Securities may not be exchanged for Capital Securities in certificated form
except in the limited circumstances described below.

DTC has advised the Trust and the Corporation that DTC is a limited
purpose trust company created to hold securities for its participating
organizations (collectively, the "Participants") and to facilitate the
clearance and settlement of transactions in those securities between
Participants through electronic book-entry changes in accounts of its
Participants. The Participants include securities brokers and dealers
(including the Initial Purchasers), banks, trust companies, clearing
corporations and certain other organizations. Access to DTC's system is also
available to other entities such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may beneficially own
securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interest and transfer of ownership
interest of each actual purchaser of each security held by or on behalf of
DTC are recorded on the records of the Participants and Indirect
Participants.

DTC has also advised the Trust and the Corporation that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital
Securities, DTC will credit the accounts of Participants with portions of the
Liquidation Amount of the Global Capital Securities and (ii) ownership of
such interests in the Global Capital Securities will be shown on, and the
transfer of ownership thereof will be effected only through, records
maintained by DTC (with respect to the Participants) or by the Participants
and the Indirect Participants (with respect to other owners of beneficial
interests in the Global Capital Securities).

Except as described below, owners of beneficial interests in the Global
Capital Securities will not have Capital Securities registered in their name,
will not receive physical delivery of Capital Securities in certificated form
and will not be considered the registered owners or holders thereof under the
Trust Agreement for any purpose.

Payments in respect of the Global Capital Security registered in the
name of DTC or its nominee will be payable by the Property Trustee to DTC in
its capacity as the registered holder under the Trust Agreement. Under the
terms of the Trust Agreement, the Property Trustee will treat the persons in
whose names the Capital Securities, including the Global Capital Securities,
are registered as the owners thereof for the purpose of receiving such
payments and for any and all other purposes whatsoever. Consequently, neither
the Property Trustee nor any agent thereof has or will have any
responsibility or liability for (i) any aspect of DTC's records or any
Participant's or Indirect Participant's records relating to or payments made
on account of beneficial interests in the Global Capital Securities, or for
maintaining, supervising or reviewing any of DTC's records or any
Participant's or Indirect Participant's records relating to the beneficial
interests in the Global Capital Securities or (ii) any other matter relating
to the actions and practices of DTC or any of its Participants or Indirect
Participants. DTC has advised the Trust and the Corporation that its current
practice, upon receipt of any payment in respect of securities such as the
Global Capital Securities, is to credit the accounts of the relevant
Participants with the payment on the payment date, in amounts proportionate
to their respective holdings in Liquidation Amount of beneficial interests in
the relevant security as shown on the records of DTC unless DTC has reason to
believe it will not receive payment on such payment date. Payments by the
Participants and the Indirect Participants to the beneficial owners of the
Global Capital Securities will be governed by standing instructions and
customary practices and will be the responsibility of the Participants or the
Indirect Participants and will not be the responsibility of DTC, the Property
Trustee, the Trust or the Corporation. Neither the Trust or the Corporation
nor the Property Trustee will be liable for any delay by DTC or any of its
Participants in identifying the beneficial owners of the Global Capital
Securities, and the Trust, the Corporation and the Property Trustee may
conclusively rely on and will be protected in relying on instructions from
DTC or its nominee for all purposes.

Beneficial interests in the Global Capital Securities will trade in
DTC's Same-Day Funds Settlement System and secondary market trading activity
in such interests will therefore settle in immediately available funds,
subject in all cases to the rules and procedures of DTC and its participants.

DTC has advised the Trust and the Corporation that it will take any
action permitted to be taken by a holder of Capital Securities only at the
direction of one or more Participants to whose account with DTC interests in
the Global Capital Securities are credited and only in respect of such
portion of the Liquidation Amount of the New Capital Securities as to which
such Participant or Participants has or have given such direction. However,
if there is an Event of Default under the Trust Agreement, DTC reserves the
right to exchange the Global Capital Securities for Capital Securities in
certificated form and to distribute such Capital Securities to its
Participants.

The information in this section concerning DTC and its book-entry system
has been obtained from sources that the Trust and the Corporation believe to
be reliable, but neither the Trust nor the Corporation takes responsibility
for the accuracy thereof.

A Global New Capital Security is exchangeable for New Capital Securities
in registered certificated form if (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as Depositary for the Global New Capital
Security and the Trust thereupon fails to appoint a successor Depositary
within 90-days or (y) has ceased to be a clearing agency registered under the
Exchange Act, (ii) the Corporation in its sole discretion elects to cause the
issuance of the New Capital Securities in certificated form or (iii) there
shall have occurred and be continuing an Event of Default or any event which
after notice or lapse of time or both would be an Event of Default under the
Trust Agreement. In addition, beneficial interests in a Global New Capital
Security may be exchanged for certificated New Capital Securities upon
request but only upon at least 20 days prior written notice given to the
Property Trustee by or on behalf of DTC in accordance with customary
procedures. In all cases, certificated New Capital Securities delivered in
exchange for any Global New Capital Security or beneficial interests therein
will be registered in the names, and issued in any approved denominations,
requested by or on behalf of the Depositary (in accordance with its customary
procedures), unless the Property Trustee determines otherwise in compliance
with applicable law.

PAYMENT AND PAYING AGENCY. Payments in respect of the New Capital
Securities held in global form shall be made to the Depositary, which shall
credit the relevant accounts at the Depositary on the applicable Distribution
Dates or in respect of the New Capital Securities that are not held by the
Depositary, such payments shall be made by check mailed to the address of the
holder entitled thereto as such address shall appear on the register. The
paying agent (the "Paying Agent") shall initially be the Property Trustee and
any co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Corporation. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days written notice to the
Property Trustee and the Corporation. In the event that the Property Trustee
shall no longer be the Paying Agent, the Administrative Trustees shall
appoint a successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Corporation) to act as Paying Agent.

REGISTRAR AND TRANSFER AGENT. The Property Trustee will act as
registrar and transfer agent for the New Capital Securities.

Registration of transfers of the New Capital Securities will be effected
without charge by or on behalf of the Trust, but upon payment of any tax or
other governmental charges that may be imposed in connection with any
transfer or exchange. The Trust will not be required to register or cause to
be registered the transfer of the New Capital Securities after they have been
called for redemption.

INFORMATION CONCERNING THE PROPERTY TRUSTEE. The Property Trustee,
other than during the occurrence and continuance of an Event of Default,
undertakes to perform only such duties as are specifically set forth in the
Trust Agreement and, after such Event of Default, must exercise the same
degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision, the Property
Trustee is under no obligation to exercise any of the powers vested in it by
the Trust Agreement at the request of any holder of Trust Securities unless
it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby. If no Event of Default has
occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the
Trust Agreement or is unsure of the application of any provision of the Trust
Agreement, and the matter is not one on which holders of the Capital
Securities or the Common Securities are entitled under the Trust Agreement to
vote, then the Property Trustee shall take such action as is directed by the
Corporation and if not so directed, shall take such action as it deems
advisable and in the best interests of the holders of the Trust Securities
and will have no liability except for its own bad faith, negligence or
willful misconduct.

MISCELLANEOUS. The Administrative Trustees are authorized and directed
to conduct the affairs of and to operate the Trust in such a way that the
Trust will not be deemed to be an "investment company" required to be
registered under the Investment Company Act or classified as an association
taxable as a corporation for United States federal income tax purposes and so
that the Junior Subordinated Debentures will be treated as indebtedness of
the Corporation for United States federal income tax purposes. In this
connection, the Corporation and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the certificate of
trust of the Trust or the Trust Agreement, that the Corporation and the
Administrative Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the Trust Securities.

Holders of the Trust Securities have no preemptive or similar rights.

The Trust may not borrow money, issue debt, execute mortgages or pledge
any of its assets.

DESCRIPTION OF NEW JUNIOR SUBORDINATED DEBENTURES

The Old Junior Subordinated Debentures were issued, and the New Junior
Subordinated Debentures will be issued, as separate series under the
Indenture. The Indenture has been qualified under the Trust Indenture Act.
This summary of certain terms and provisions of the New Junior Subordinated
Debentures and the Indenture does not purport to be complete, and where
reference is made to particular provisions of the Indenture, such provisions,
including the definitions of certain terms, some of which are not otherwise
defined herein, are qualified in their entirety by reference to all of the
provisions of the Indenture and those terms made a part of the Indenture by
the Trust Indenture Act.

GENERAL. Concurrently with the issuance of the Capital Securities, the
Trust invested the proceeds thereof, together with the consideration paid by
the Corporation for the Common Securities, in Old Junior Subordinated
Debentures issued by the Corporation. Pursuant to the Exchange Offer, the
Corporation will exchange the Old Junior Subordinated Debentures, in an
amount corresponding to the Old Capital Securities accepted for exchange, for
a like aggregate principal amount of the New Junior Subordinated Debentures
promptly after the Expiration Date.

The New Junior Subordinated Debentures will bear interest at the annual
rate of 73/4% of the principal amount thereof, payable semi-annually in
arrears on June 15 and December 15 of each year (each, an "Interest Payment
Date"), commencing June 15, 1997, to the person in whose name each Junior
Subordinated Debenture is registered, subject to certain exceptions, at the
close of business on the first day of the month in which the relevant payment
date falls. It is anticipated that, until the liquidation, if any, of the
Trust, each Junior Subordinated Debenture will be held in the name of the
Property Trustee in trust for the benefit of the holders of the Trust
Securities. The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any
date on which interest is payable on the New Junior Subordinated Debentures
is not a Business Day, then payment of the interest payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), in each case with
the same force and effect as if made such date. Accrued interest that is not
paid on the applicable Interest Payment Date will bear additional interest on
the amount thereof (to the extent permitted by law) at the rate per annum of
73/4% thereof, compounded semi-annually. The term "interest", as used herein,
shall include semi-annual interest payments, interest on semi-annual interest
payments not paid on the applicable Interest Payment Date and Additional Sums
(as defined below), as applicable.

The New Junior Subordinated Debentures will mature on December 15, 2026
(the "Stated Maturity Date"). The New Junior Subordinated Debentures will
rank pari passu with the Old Junior Subordinated Debentures and with all
Other Debentures and will be unsecured and subordinate and junior in right of
payment to the extent and in the manner set forth in the Indenture to all
Senior Indebtedness. See "--Subordination." The Corporation is a
non-operating holding company and almost all of the operating assets of the
Corporation and its consolidated subsidiaries are owned by such subsidiaries.
The Corporation relies primarily on dividends from such subsidiaries to meet
its obligations. The Corporation is a legal entity separate and distinct from
its banking and non-banking affiliates. The principal sources of the
Corporation's income are dividends, interest and fees from its banking and
non-banking affiliates. The bank subsidiaries of the Corporation (the
"Banks") are subject to certain restrictions imposed by federal law on any
extensions of credit to, and certain other transactions with, the Corporation
and certain other affiliates, and on investments in stock or other securities
thereof. Such restrictions prevent the Corporation and such other affiliates
from borrowing from the Banks unless the loans are secured by various types
of collateral. Further, such secured loans, other transactions and
investments by any of the Banks are generally limited in amount as to the
Corporation and as to each of such other affiliates to 10% of such Bank's
capital and surplus and as to the Corporation and all of such other
affiliates to an aggregate of 20% of such Bank's capital and surplus. In
addition, payment of dividends to the Corporation by the Banks is subject to
ongoing review by banking regulators and is subject to various statutory
limitations and in certain circumstances requires approval by banking
regulatory authorities. Because the Corporation is a holding company, the
right of the Corporation to participate in any distribution of assets of any
subsidiary upon such subsidiary's liquidation or reorganization or otherwise,
is subject to the prior claims of creditors of the subsidiary, except to the
extent the Corporation may itself be recognized as a creditor of that
subsidiary. Accordingly, the New Junior Subordinated Debentures will be
effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and holders of New Junior Subordinated Debentures
should look only to the assets of the Corporation for payments on the New
Junior Subordinated Debentures. The Indenture does not limit the incurrence
or issuance of other secured or unsecured debt of the Corporation, including
Senior Indebtedness. See "--Subordination."

FORM, REGISTRATION AND TRANSFER. If the New Junior Subordinated
Debentures are distributed to holders of the New Capital Securities, such New
Junior Subordinated Debentures may be represented by one or more global
certificates registered in the name of Cede & Co. as the nominee of DTC. The
depositary arrangements for such New Junior Subordinated Debentures are
expected to be substantially similar to those in effect for the New Capital
Securities. For a description of DTC and the terms of the depositary
arrangements relating to payments, transfers, voting rights, prepayments,
notices and other matters, see "--Description of New Capital Securities--
Form, Denomination, Book-Entry Procedures and Transfer."

PAYMENT AND PAYING AGENTS. Payment of principal of (and premium, if
any) and any interest on New Junior Subordinated Debentures will be made at
the office of the Debenture Trustee in The City of New York or at the office
of such Paying Agent or Paying Agents as the Corporation may designate from
time to time, except that at the option of the Corporation payment of any
interest may be made except in the case of New Junior Subordinated Debentures
in global form, (i) by check mailed to the address of the Person entitled
thereto as such address shall appear in the register for New Junior
Subordinated Debentures or (ii) by transfer to an account maintained by the
Person entitled thereto as specified in such register, provided that proper
transfer instructions have been received by the relevant Record Date. Payment
of any interest on any New Junior Subordinated Debenture will be made to the
Person in whose name such New Junior Subordinated Debenture is registered at
the close of business on the record date for such interest, except in the
case of defaulted interest. The Corporation may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent;
however the Corporation will at all times be required to maintain a Paying
Agent in each Place of Payment for the New Junior Subordinated Debentures.

Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Corporation in trust, for the payment of the principal of
(and premium, if any) or interest on any New Junior Subordinated Debenture
and remaining unclaimed for two years after such principal (and premium, if
any) or interest has become due and payable shall, at the request of the
Corporation, be repaid to the Corporation and the holder of such New Junior
Subordinated Debenture shall thereafter look, as a general unsecured
creditor, only to the Corporation for payment thereof.

OPTION TO EXTEND INTEREST PAYMENT DATE. So long as no Debenture Event
of Default has occurred and is continuing, the Corporation will have the
right under the Indenture at any time during the term of the Junior
Subordinated Debentures to defer the payment of interest at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods
with respect to each Extension Period, provided that no Extension Period may
extend beyond the Stated Maturity Date. At the end of such Extension Period,
the Corporation must pay all interest then accrued and unpaid (together with
interest thereon at the annual rate of 73/4%, compounded semi-annually, to
the extent permitted by applicable law). During an Extension Period, interest
will continue to accrue and holders of Junior Subordinated Debentures (and
holders of the Trust Securities while Trust Securities are outstanding) will
be required to accrue interest income for United States federal income tax
purposes prior to the receipt of cash attributable to such income. See
"Certain United States Federal Income Tax Considerations--Interest Income and
Original Issue Discount."

During any Extension Period, the Corporation may not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Corporation's capital stock
(which includes common and preferred stock) or (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Corporation (including any Other Debentures) that rank
pari passu with or junior in right of payment to the Junior Subordinated
Debentures or (iii) make any guarantee payments with respect to any guarantee
by the Corporation of the debt securities of any subsidiary of the
Corporation (including any Other Guarantees) if such guarantee ranks pari
passu with or junior in right of payment to the Junior Subordinated
Debentures (other than (a) dividends or distributions in shares of or
options, warrants or rights to subscribe for or purchase shares of, common
stock of the Corporation, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of
stock under any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto, (c) payments under the Guarantee, (d) as a
result of a reclassification of the Corporation's capital stock or the
exchange or conversion of one class or series of the Corporation's capital
stock for another class or series of the Corporation's capital stock, (e) the
purchase of fractional interests in shares of the Corporation's capital stock
pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, and (f) purchases of common stock
related to the issuance of common stock or rights under any of the
Corporation's benefit plans for its directors, officers or employees or any
of the Corporation's dividend reinvestment plans).

Prior to the termination of any Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or
to extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due on any Interest
Payment Date, the Corporation may elect to begin a new Extension Period,
subject to the above requirements. No interest shall be due and payable
during an Extension Period, except at the end thereof. The Corporation must
give the Property Trustee, the Administrative Trustees and the Debenture
Trustee notice of its election of any Extension Period (or an extension
thereof) at least five Business Days prior to the earlier of (i) the date the
Distributions on the Trust Securities would have been payable except for the
election to begin or extend such Extension Period or (ii) the date the
Administrative Trustees are required to give notice to any securities
exchange or to holders of New Capital Securities of the record date or the
date such Distributions are payable, but in any event not less than five
Business Days prior to such record date. The Debenture Trustee shall give
notice of the Corporation's election to begin or extend a new Extension
Period to the holders of the Capital Securities. There is no limitation on
the number of times that the Corporation may elect to begin an Extension
Period.

OPTIONAL PREPAYMENT. The Junior Subordinated Debentures will be
prepayable, in whole or in part, at the option of the Corporation on or after
December 15, 2006, subject to the Corporation having received prior approval
of the Federal Reserve if then required under applicable capital guidelines
or policies of the Federal Reserve, at a prepayment price (the "Optional
Prepayment Price") equal to the percentage of the outstanding principal
amount of the Junior Subordinated Debentures specified below, plus, in each
case, accrued interest thereon to the date of prepayment if redeemed during
the 12-month period beginning December 15 of the years indicated below:

<TABLE>
<CAPTION>
Year Percentage
<S> <C>
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.875%
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.488%
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.100%
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.713%
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.325%
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.938%
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.550%
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.163%
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.775%
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.388%
2016 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.000%

</TABLE>

SPECIAL EVENT PREPAYMENT. If a Special Event shall occur and be
continuing, the Corporation may, at its option and subject to receipt of
prior approval of the Federal Reserve if then required under applicable
capital guidelines or policies of the Federal Reserve, prepay the Junior
Subordinated Debentures in whole (but not in part) at any time within 90-days
of the occurrence of such Special Event, at a prepayment price (the "Special
Event Prepayment Price") equal to the greater of (i) 100% of the principal
amount of such Junior Subordinated Debentures or (ii) the sum, as determined
by a Quotation Agent, of the present values of the remaining scheduled
payments of principal and interest thereon discounted to the prepayment date
on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate, plus, in each case, accrued interest
thereon to the date of prepayment.

A "Special Event" means a Tax Event or a Regulatory Capital Event (as
defined below), as the case may be.

A "Tax Event" means the receipt by the Corporation and the Trust of an
opinion of counsel experienced in such matters to the effect that, as a
result of any amendment to, or change (including any announced prospective
change) in, the laws or any regulations thereunder of the United States or
any political subdivision or taxing authority thereof or therein, or as a
result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change
is effective or such pronouncement or decision is announced on or after
December 10, 1996, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90-days of the date of such opinion, subject to
United States federal income tax with respect to income received or accrued
on the Junior Subordinated Debentures, (ii) interest payable by the
Corporation on the Junior Subordinated Debentures is not, or within 90-days
of the date of such opinion will not be, deductible by the Corporation, in
whole or in part, for United States federal income tax purposes, or (iii) the
Trust is, or will be within 90-days of the date of such opinion, subject to
more than a de minimis amount of other taxes, duties or other governmental
charges.

A "Regulatory Capital Event" means that the Corporation shall have
received an opinion of independent bank regulatory counsel experienced in
such matters to the effect that, as a result of (a) any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any rules, guidelines or
policies of the Federal Reserve or (b) any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or such pronouncement or
decision is announced on or after December 10, 1996, the Capital Securities
do not constitute, or within 90-days of the date thereof, will not
constitute, Tier I Capital (or its then equivalent); provided, however, that
the distribution of the Junior Subordinated Debentures in connection with the
liquidation of the Trust by the Corporation shall not in and of itself
constitute a Regulatory Capital Event unless such liquidation shall have
occurred in connection with a Tax Event.

"Adjusted Treasury Rate" means, with respect to any prepayment date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such prepayment date plus (i) 1.00% if such prepayment
date occurs on or prior to December 31, 1997 and (ii) 0.50% in all other
cases.

"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
remaining term of the Junior Subordinated Debentures to be prepaid that would
be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the New Junior Subordinated
Debentures.

"Quotation Agent" means the Reference Treasury Dealer appointed by the
Corporation. "Reference Treasury Dealer" means: (i) Morgan Stanley & Co.
Incorporated and its respective successors; provided, however, that if the
foregoing shall cease to be a primary U.S. Government securities dealer in
New York City (a "Primary Treasury Dealer"), the Corporation shall substitute
therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury
Dealer selected by the Corporation.

"Comparable Treasury Price" means, with respect to any prepayment date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or (ii) if such release (or any successor
release) is not published or does not contain such prices on such Business
Day, (A) the average of the Reference Treasury Dealer Quotations for such
prepayment date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Debenture Trustee obtains fewer
than three such Reference Treasury Dealer Quotations, the average of all such
Quotations.

"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined
by the Debenture Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Debenture Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third Business Day preceding
such prepayment date.

"Additional Sums" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by the Trust on
the outstanding Capital Securities and Common Securities shall not be reduced
as a result of any additional taxes, duties and other governmental charges to
which the Trust has become subject as a result of a Tax Event.

Notice of any prepayment will be mailed at least 30 days but not more
than 60-days before the redemption date to each holder of Junior Subordinated
Debentures to be prepaid at its registered address. Unless the Corporation
defaults in payment of the prepayment price, on and after the prepayment date
interest ceases to accrue on such Junior Subordinated Debentures called for
prepayment.

If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the New Junior Subordinated Debentures the Additional
Sums.

RESTRICTIONS ON CERTAIN PAYMENTS. The Corporation will also covenant
that it will not, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Corporation's capital stock (which includes common and preferred
stock) or (ii) make any payment of principal, interest or premium, if any, on
or repay or repurchase or redeem any debt securities of the Corporation
(including Other Debentures) that rank pari passu with or junior in right of
payment to the Junior Subordinated Debentures or (iii) make any guarantee
payments with respect to any guarantee by the Corporation of the debt
securities of any subsidiary of the Corporation (including under Other
Guarantees) if such guarantee ranks pari passu or junior in right of payment
to the Junior Subordinated Debentures (other than (a) dividends or
distributions in shares of, or options, warrants or rights to subscribe for
or purchase shares of, common stock of the Corporation, (b) any declaration
of a dividend in connection with the implementation of a stockholder's rights
plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, (c) payments
under the Guarantee, (d) as a result of a reclassification of the
Corporation's capital stock or the exchange or conversion of one class or
series of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in
shares of the Corporation's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, and (f) purchases of common stock related to the issuance of
common stock or rights under any of the Corporation's benefit plans for its
directors, officers or employees or any of the Corporation's dividend
reinvestment plans) if at such time (1) there shall have occurred any event
of which the Corporation has actual knowledge that (a) is, or with the giving
of notice or the lapse of time, or both, would be, a Debenture Event of
Default and (b) in respect of which the Corporation shall not have taken
reasonable steps to cure, (2) if Junior Subordinated Debentures are held by
the Trust, the Corporation shall be in default with respect to its payment of
any obligations under the Guarantee or (3) the Corporation shall have given
notice of its election of an Extension Period as provided in the Indenture
and shall not have rescinded such notice, and such Extension Period, or any
extension thereof, shall have commenced.

MODIFICATION OF INDENTURE. From time to time the Corporation and the
Debenture Trustee may, without the consent of the holders of Junior
Subordinated Debentures, amend, waive or supplement the Indenture for
specified purposes, including, among other things, curing ambiguities,
defects or inconsistencies (provided that any such action does not materially
adversely affect the interest of the holders of Junior Subordinated
Debentures) and qualifying, or maintaining the qualification of, the
Indenture under the Trust Indenture Act. The Indenture contains provisions
permitting the Corporation and the Debenture Trustee, with the consent of the
holders of a majority in principal amount of Junior Subordinated Debentures,
to modify the Indenture in a manner affecting the rights of the holders of
Junior Subordinated Debentures; provided, that no such modification may,
without the consent of the holders of each outstanding Junior Subordinated
Debenture so affected, (i) change the Stated Maturity, or reduce the
principal amount of the Junior Subordinated Debentures or reduce the rate or
extend the time of payment of interest thereon or (ii) reduce the percentage
of principal amount of Junior Subordinated Debentures, the holders of which
are required to consent to any such modification of the Indenture.

DEBENTURE EVENTS OF DEFAULT. The Indenture provides that any one or
more of the following described events with respect to the Junior
Subordinated Debentures constitutes a "Debenture Event of Default" (whatever
the reason for such Debenture Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):

(i) failure for 30-days to pay any interest on the Junior Subordinated
Debentures or any Other Debentures when due (subject to the deferral of any
due date in the case of an Extension Period); or

(ii) failure to pay any principal or premium, if any, on the Junior
Subordinated Debentures or any Other Debentures when due whether at maturity,
upon redemption, by declaration of acceleration of maturity or otherwise; or

(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90-days after written notice
to the Corporation from the Debenture Trustee or the holders of at least 25%
in aggregate outstanding principal amount of Junior Subordinated Debentures;
or

(iv) certain events in bankruptcy, insolvency or reorganization of the
Corporation.

The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debentures have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Debenture Trustee. The Debenture Trustee or the holders of not less than 25%
in aggregate outstanding principal amount of the Junior Subordinated
Debentures may declare the principal due and payable immediately upon a
Debenture Event of Default. The holders of a majority in aggregate
outstanding principal amount of the Junior Subordinated Debentures may annul
such declaration and waive the default if the default (other than the
non-payment of the principal of the Junior Subordinated Debentures which has
become due solely by such acceleration) has been cured and a sum sufficient
to pay all matured installments of interest and principal due otherwise than
by acceleration has been deposited with the Debenture Trustee.

The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debentures affected thereby may, on behalf of the
holders of all the Junior Subordinated Debentures, waive any past default,
except a default in the payment of principal (or premium, if any) or interest
(unless such default has been cured and a sum sufficient to pay all matured
installments of interest (and premium, if any) and principal due otherwise
than by acceleration has been deposited with the Debenture Trustee) or a
default in respect of a covenant or provision which under the Indenture
cannot be modified or amended without the consent of the holder of each
outstanding Junior Subordinated Debenture.

ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF NEW CAPITAL SECURITIES. If
a Debenture Event of Default shall have occurred and be continuing and shall
be attributable to the failure of the Corporation to pay interest (or
premium, if any) on or principal of the New Junior Subordinated Debentures on
the due date, a holder of New Capital Securities may institute a Direct
Action. The Corporation may not amend the Indenture to remove the foregoing
right to bring a Direct Action without the prior written consent of the
holders of all of the New Capital Securities. Notwithstanding any payments
made to a holder of New Capital Securities by the Corporation in connection
with a Direct Action, the Corporation shall remain obligated to pay the
principal of (or premium, if any) or interest on the New Junior Subordinated
Debentures, and the Corporation shall be subrogated to the rights of the
holder of such New Capital Securities with respect to payments on the New
Capital Securities to the extent of any payments made by the Corporation to
such holder in any Direct Action.

The holders of the New Capital Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the New Junior Subordinated Debentures unless
there shall have been an Event of Default under the Trust Agreement. See "--
Description of New Capital Securities--Events of Default; Notice."

CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS. The
Indenture provides that the Corporation shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets
as an entirety or substantially as an entirety to any Person, and no Person
shall consolidate with or merge into the Corporation or convey, transfer or
lease its properties and assets as an entirety or substantially as an
entirety to the Corporation, unless: (i) in case the Corporation consolidates
with or merges into another Person or conveys or transfers its properties and
assets substantially as an entirety to any Person, the successor Person is
organized under the laws of the United States or any State or the District of
Columbia, and such successor Person expressly assumes the Corporation's
obligations on the Junior Subordinated Debentures; (ii) immediately after
giving effect thereto, no Debenture Event of Default, and no event which,
after notice or lapse of time or both, would become a Debenture Event of
Default, shall have occurred and be continuing; and (iii) certain other
conditions as prescribed in the Indenture are met.

The general provisions of the Indenture do not afford holders of the
Junior Subordinated Debentures protection in the event of a highly leveraged
or other transaction involving the Corporation that may adversely affect
holders of Junior Subordinated Debentures.

SATISFACTION AND DISCHARGE. The Indenture provides that when, among
other things, all Junior Subordinated Debentures not previously delivered to
the Debenture Trustee for cancellation (i) have become due and payable or
(ii) will become due and payable at maturity within one year, and the
Corporation deposits or causes to be deposited with the Debenture Trustee
funds, in trust, for the purpose and in an amount sufficient to pay and
discharge the entire indebtedness on the Junior Subordinated Debentures not
previously delivered to the Debenture Trustee for cancellation, for the
principal (and premium, if any) and interest to the date of the deposit or to
the Stated Maturity Date, as the case may be, then the Indenture will cease
to be of further effect (except as to the Corporation's obligations to pay
all other sums due pursuant to the Indenture and to provide the officers'
certificates and opinions of counsel described therein), and the Corporation
will be deemed to have satisfied and discharged the Indenture.

SUBORDINATION. In the Indenture, the Corporation has covenanted and
agreed that any Junior Subordinated Debentures will be subordinate and junior
in right of payment to all Senior Indebtedness to the extent provided in the
Indenture. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshaling of assets or any bankruptcy, insolvency,
debt restructuring or similar proceedings in connection with any insolvency
or bankruptcy proceeding of the Corporation, the holders of Senior
Indebtedness will first be entitled to receive payment in full of all
Allocable Amounts (as defined below) in respect of such Senior Indebtedness
before the holders of Junior Subordinated Debentures will be entitled to
receive or retain any payment in respect thereof.

In the event of the acceleration of the maturity of Junior Subordinated
Debentures, the holders of all Senior Indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full of all
Allocable Amounts in respect of such Senior Indebtedness before the holders
of Junior Subordinated Debentures will be entitled to receive or retain any
payment in respect of the Junior Subordinated Debentures.

No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Junior Subordinated Debentures may be made if there
shall have occurred and be continuing a default in any payment with respect
to Senior Indebtedness, or an event of default with respect to any Senior
Indebtedness resulting in the acceleration of the maturity thereof, or if any
judicial proceeding shall be pending with respect to any such default.

"Allocable Amounts," when used with respect to any Senior Indebtedness,
means all amounts due or to become due on such Senior Indebtedness less, if
applicable, any amount which would have been paid to, and retained by, the
holders of such Senior Indebtedness (whether as a result of the receipt of
payments by the holders of such Senior Indebtedness from the Corporation or
any other obligor thereon or from any holders of, or trustee in respect of,
other indebtedness that is subordinate and junior in right of payment to such
Senior Indebtedness pursuant to any provision of such indebtedness for the
payment over of amounts received on account of such indebtedness to the
holders of such Senior Indebtedness or otherwise) but for the fact that such
Senior Indebtedness is subordinate or junior in right of payment to (or
subject to a requirement that amounts received on such Senior Indebtedness be
paid over to obligees on) trade accounts payable or accrued liabilities
arising in the ordinary course of business.

"Indebtedness for Money Borrowed" shall mean any obligation of, or any
obligation guaranteed by, the Corporation for the repayment of borrowed
money, whether or not evidenced by bonds, debentures, notes or other written
instruments.

"Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures" shall mean (i) Indebtedness for Money Borrowed, whether
outstanding on the date of execution of the Indenture or thereafter created,
assumed or incurred, which specifically by its terms ranks equally with and
not prior to the Junior Subordinated Debentures in the right of payment upon
the happening of the dissolution or winding-up or liquidation or
reorganization of the Corporation and (ii) all other debt securities, and
guarantees in respect of those debt securities, issued to any other trust, or
a trustee of such trust, partnership or other entity affiliated with the
Corporation that is a financing vehicle of the Corporation (a "financing
entity") in connection with the issuance by such financing entity of equity
securities or other securities guaranteed by the Corporation pursuant to an
instrument that ranks pari passu with or junior in right of payment to the
Guarantee.

"Indebtedness Ranking Junior to the Junior Subordinated Debentures"
shall mean any Indebtedness for Money Borrowed, whether outstanding on the
date of execution of the Indenture or thereafter created, assumed or
incurred, which specifically by its terms ranks junior to and not equally
with or prior to the Junior Subordinated Debentures (and any other
Indebtedness Ranking on a Parity with the Junior Subordinated Debentures) in
right of payment upon the happening of the dissolution or winding-up or
liquidation or reorganization of the Corporation. The securing of any
Indebtedness for Money Borrowed, otherwise constituting Indebtedness Ranking
on a Parity with the Junior Subordinated Debentures or Indebtedness Ranking
Junior to the Junior Subordinated Debentures, as the case may be, shall not
be deemed to prevent such Indebtedness for Money Borrowed from constituting
Indebtedness Ranking on a Parity with the Junior Subordinated Debentures or
Indebtedness Ranking Junior to the Junior Subordinated Debentures, as the
case may be.

"Senior Indebtedness" shall mean all Indebtedness for Money Borrowed,
whether outstanding on the date of execution of the Indenture or thereafter
created, assumed or incurred, except Indebtedness Ranking on a Parity with
the Junior Subordinated Debentures or Indebtedness Ranking Junior to the
Junior Subordinated Debentures, and any deferrals, renewals or extensions of
such Senior Indebtedness.

The Corporation is a non-operating holding company and almost all of the
operating assets of the Corporation are owned by the Corporation's
subsidiaries. The Corporation relies primarily on dividends from such
subsidiaries to meet its obligations for payment of principal and interest on
its outstanding debt obligations and corporate expenses. The Corporation is a
legal entity separate and distinct from its banking and non-banking
affiliates. The principal sources of the Corporation's income are dividends,
interest and fees from its banking and non-banking affiliates. The Banks are
subject to certain restrictions imposed by federal law on any extensions of
credit to, and certain other transactions with, the Corporation and certain
other affiliates, and on investments in stock or other securities thereof.
Such restrictions prevent the Corporation and such other affiliates from
borrowing from the Banks unless the loans are secured by various types of
collateral. Further, such secured loans, other transactions and investments
by any of the Banks are generally limited in amount as to the Corporation and
as to each of such other affiliates to 10% of such Bank's capital and surplus
and as to the Corporation and all of such other affiliates to an aggregate of
20% of such Bank's capital and surplus. In addition, payment of dividends to
the Corporation by the Banks is subject to ongoing review by banking
regulators and is subject to various statutory limitations and in certain
circumstances requires approval by banking regulatory authorities.
Accordingly, the New Junior Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries. Holders of New Junior Subordinated Debentures should look only
to the assets of the Corporation for payments of interest and principal and
premium, if any.

The Indenture places no limitation on the amount of additional Senior
Indebtedness that may be incurred by the Corporation. The Corporation expects
from time to time to incur additional indebtedness constituting Senior
Indebtedness.

GOVERNING LAW. The Indenture and the New Junior Subordinated Debentures
will be governed by and construed in accordance with the laws of the State of
New York.

INFORMATION CONCERNING THE DEBENTURE TRUSTEE. Following the Exchange
Offer and the qualification of the Indenture under the Trust Indenture Act,
the Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the
Trust Indenture Act. Subject to such provisions, the Debenture Trustee is
under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Junior Subordinated Debentures,
unless offered reasonable indemnity by such holder against the costs,
expenses and liabilities which might be incurred thereby. The Debenture
Trustee is not required to expend or risk its own funds or otherwise incur
personal financial liability in the performance of its duties if the
Debenture Trustee reasonably believes that repayment or adequate indemnity is
not reasonably assured to it.

DESCRIPTION OF NEW GUARANTEE

The Old Guarantee was executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Old Capital Securities for
the benefit of the holders from time to time of the Old Capital Securities.
Promptly after the Expiration Date, the New Guarantee will be issued by the
Corporation for the benefit of the holders from time to time of the New
Capital Securities. The New Guarantee has been qualified under the Trust
Indenture Act. This summary of certain provisions of the New Guarantee does
not purport to be complete and is subject to, and qualified in its entirety
by reference to, all of the provisions of the New Guarantee, including the
definitions therein of certain terms, and the Trust Indenture Act.

GENERAL. The Corporation will irrevocably agree to pay in full on a
subordinated basis, to the extent set forth herein, the Guarantee Payments
(as defined below) to the holders of the New Capital Securities, as and when
due, regardless of any defense, right of set-off or counterclaim that the
Trust may have or assert other than the defense of payment. The following
payments with respect to the New Capital Securities, to the extent not paid
by or on behalf of the Trust (the "Guarantee Payments"), will be subject to
the New Guarantee: (i) any accumulated and unpaid Distributions required to
be paid on New Capital Securities, to the extent that the Trust has funds on
hand legally available therefor at such time, (ii) the applicable Redemption
Price with respect to New Capital Securities called for redemption, to the
extent that the Trust has funds on hand legally available therefor at such
time, or (iii) upon a voluntary or involuntary termination and liquidation of
the Trust, the lesser of (a) the Liquidation Distribution and (b) the amount
of assets of the Trust remaining available for distribution to holders of New
Capital Securities. The Corporation's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Corporation
to the holders of the New Capital Securities or by causing the Trust to pay
such amounts to such holders.

The New Guarantee will rank subordinate and junior in right of payment
to all Senior Indebtedness to the extent provided therein. See "--Status of
New Guarantee". Because the Corporation is a holding company, the right of
the Corporation to participate in any distribution of assets of any
subsidiary upon such subsidiary's liquidation or reorganization or otherwise,
is subject to the prior claims of creditors of that subsidiary, except to the
extent the Corporation may itself be recognized as a creditor of that
subsidiary. Accordingly, the Corporation's obligations under the New
Guarantee will be effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries, and claimants should look only
to the assets of the Corporation for payments thereunder. See "--Description
of New Junior Subordinated Debentures--General." The New Guarantee does not
limit the incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior Indebtedness, whether under the Indenture, any
other indenture that the Corporation may enter into in the future or
otherwise.

The Corporation will, through the New Guarantee, the Trust Agreement,
the New Junior Subordinated Debentures and the Indenture, taken together,
fully, irrevocably and unconditionally guarantee all of the Trust's
obligations under the New Capital Securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Trust's obligations under the New Capital
Securities. See "Relationship Among the New Capital Securities, the New
Junior Subordinated Debentures and the New Guarantee."

STATUS OF NEW GUARANTEE. The New Guarantee will constitute an unsecured
obligation of the Corporation and will rank subordinate and junior in right
of payment to all Senior Indebtedness in the same manner as New Junior
Subordinated Debentures, except in the case of a bankruptcy or insolvency
proceeding in respect of the Corporation, in which case the New Guarantee
will rank subordinate and junior in right of payment to all liabilities
(other than Other Guarantees) of the Corporation.

The New Guarantee will rank pari passu with the Old Guarantee and with
all Other Guarantees issued by the Corporation. The New Guarantee will
constitute a guarantee of payment and not of collection (i.e., the guaranteed
party may institute a legal proceeding directly against the Corporation to
enforce its rights under the New Guarantee without first instituting a legal
proceeding against any other person or entity). The New Guarantee will be
held for the benefit of the holders of the New Capital Securities. The New
Guarantee will not be discharged except by payment of the Guarantee Payments
in full to the extent not paid by the Trust or upon distribution to the
holders of the New Capital Securities of the New Junior Subordinated
Debentures. The New Guarantee does not place a limitation on the amount of
additional Senior Indebtedness that may be incurred by the Corporation. The
Corporation expects from time to time to incur additional indebtedness
constituting Senior Indebtedness.

AMENDMENTS AND ASSIGNMENT. Except with respect to any changes that do
not materially adversely affect the rights of holders of the New Capital
Securities (in which case no consent will be required), the New Guarantee may
not be amended without the prior approval of the holders of a majority of the
Liquidation Amount of such outstanding New Capital Securities. The manner of
obtaining any such approval will be as set forth under "--Description of New
Capital Securities--Voting Rights; Amendment of the Trust Agreement." All
guarantees and agreements contained in the New Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the
Corporation and shall inure to the benefit of the holders of the New Capital
Securities then outstanding.

EVENTS OF DEFAULT. An event of default under the New Guarantee will
occur upon the failure of the Corporation to perform any of its payment or
other obligations thereunder. The holders of a majority in Liquidation Amount
of the New Capital Securities will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of the New Guarantee or to direct the exercise
of any trust or power conferred upon the Guarantee Trustee under the New
Guarantee.

Any holder of the New Capital Securities may institute a legal
proceeding directly against the Corporation to enforce its rights under the
New Guarantee without first instituting a legal proceeding against the Trust,
the Guarantee Trustee or any other person or entity.

The Corporation, as guarantor, will be required to file annually with
the Guarantee Trustee a certificate as to whether or not the Corporation is
in compliance with all the conditions and covenants applicable to it under
the New Guarantee.

TERMINATION OF THE NEW GUARANTEE. The New Guarantee will terminate and
be of no further force and effect upon full payment of the applicable
Redemption Price of the New Capital Securities, upon full payment of the
Liquidation Amount payable upon liquidation of the Trust or upon distribution
of New Junior Subordinated Debentures to the holders of the New Capital
Securities. The New Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the New Capital
Securities must restore payment of any sums paid under the New Capital
Securities or the New Guarantee.

GOVERNING LAW. The New Guarantee will be governed by and construed in
accordance with the laws of the State of New York.

INFORMATION CONCERNING THE GUARANTEE TRUSTEE. The Guarantee Trustee,
other than during the occurrence and continuance of a default by the
Corporation in performance of the New Guarantee, will undertake to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the New Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of
his or her own affairs. Subject to this provision, the Guarantee Trustee will
be under no obligation to exercise any of the powers vested in it by the New
Guarantee at the request of any holder of the New Capital Securities unless
it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby.

DESCRIPTION OF OLD SECURITIES

The terms of the Old Securities are identical in all material respects
to the New Securities, except that (i) the Old Securities have not been
registered under the Securities Act, are subject to certain restrictions on
transfer and are entitled to certain rights under the applicable Registration
Rights Agreement (which rights will terminate upon consummation of the
Exchange Offer, except under limited circumstances), (ii) the New Capital
Securities will not contain the $100,000 minimum Liquidation Amount transfer
restriction and certain other restrictions on transfer applicable to Old
Capital Securities, (iii) the New Capital Securities will not provide for any
increase in the Distribution rate thereon, (iv) the New Junior Subordinated
Debentures will not contain the $100,000 minimum principal amount transfer
restriction and (v) the New Junior Subordinated Debentures will not provide
for any increase in the interest rate thereon. The Old Securities provide
that, in the event that a registration statement relating to the Exchange
Offer has not been filed by May 9, 1997 and been declared effective by June
8, 1997 or, in certain limited circumstances, in the event a shelf
registration statement (the "Shelf Registration Statement") with respect to
the resale of the Old Capital Securities is not declared effective by June 8,
1997, then interest will accrue (in addition to the stated interest rate on
the Old Junior Subordinated Debentures) at the rate of 0.25% per annum on the
principal amount of the Old Junior Subordinated Debentures and Distributions
will accumulate (in addition to the stated Distribution rate on the Old
Capital Securities) at the rate of 0.25% per annum on the Liquidation Amount
of the Old Capital Securities, for the period from the occurrence of such
event until such time as such required Exchange Offer is consummated or any
required Shelf Registration Statement is effective. The New Securities are
not, and upon consummation of the Exchange Offer the Old Securities will not
be, entitled to any such additional interest or Distributions. Accordingly,
holders of Old Capital Securities should review the information set forth
under "Risk Factors--Certain Consequences of a Failure to Exchange Old
Capital Securities" and "Description of New Securities."

RELATIONSHIP AMONG THE NEW CAPITAL SECURITIES, THE
NEW JUNIOR SUBORDINATED DEBENTURES AND THE NEW GUARANTEE

FULL AND UNCONDITIONAL GUARANTEE

Payments of Distributions and other amounts due on the New Capital
Securities (to the extent the Trust has funds on hand legally available for
the payment of such Distributions) will be irrevocably guaranteed by the
Corporation as and to the extent set forth under "Description of New
Securities--Description of New Guarantee." Taken together, the Corporation's
obligations under the New Junior Subordinated Debentures, the Indenture, the
Trust Agreement and the New Guarantee will provide, in the aggregate, a full,
irrevocable and unconditional guarantee of payments of Distributions and
other amounts due on the New Capital Securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Trust's obligations under the New Capital
Securities. If and to the extent that the Corporation does not make the
required payments on the New Junior Subordinated Debentures, the Trust will
not have sufficient funds to make the related payments, including
Distributions, on the New Capital Securities. The New Guarantee will not
cover any such payment when the Trust does not have sufficient funds on hand
legally available therefor. In such event, the remedy of a holder of New
Capital Securities is to institute a Direct Action. The obligations of the
Corporation under the New Guarantee will be subordinate and junior in right
of payment to all Senior Indebtedness.

SUFFICIENCY OF PAYMENTS

As long as payments of interest and other payments are made when due on
the New Junior Subordinated Debentures, such payments will be sufficient to
cover Distributions and other payments due on the New Capital Securities,
primarily because: (i) the aggregate principal amount or Prepayment Price of
the New Junior Subordinated Debentures will be equal to the sum of the
Liquidation Amount or Redemption Price, as applicable, of the New Capital
Securities and related Common Securities; (ii) the interest rate and interest
and other payment dates on the New Junior Subordinated Debentures will match
the Distribution rate and Distribution and other payment dates for the New
Capital Securities; (iii) the Corporation shall pay for all and any costs,
expenses and liabilities of the Trust except the Trust's obligations to
holders of Trust Securities under the Trust Agreement; and (iv) the Trust
Agreement provides that the Trust is not authorized to engage in any activity
that is not consistent with the limited purposes thereof.

ENFORCEMENT RIGHTS OF HOLDERS OF NEW CAPITAL SECURITIES

A holder of any New Capital Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the New
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the Trust or any other person or entity. A default or event of
default under any Senior Indebtedness would not constitute a default or Event
of Default under the Trust Agreement. However, in the event of payment
defaults under, or acceleration of, Senior Indebtedness, the subordination
provisions of the Indenture provide that no payments may be made in respect
of the New Junior Subordinated Debentures until such Senior Indebtedness has
been paid in full or any payment default thereunder has been cured or waived.
Failure to make required payments on New Junior Subordinated Debentures would
constitute an Event of Default under the Trust Agreement.

LIMITED PURPOSE OF THE TRUST

The Trust exists for the sole purpose of issuing and selling the Trust
Securities, using the proceeds from the sale of the Trust Securities to
acquire the Junior Subordinated Debentures and engaging in only those other
activities necessary, advisable or incidental thereto. The New Capital
Securities will represent preferred beneficial interests in the Trust. A
principal difference between the rights of a holder of a New Capital Security
and a holder of a New Junior Subordinated Debenture is that a holder of a New
Junior Subordinated Debenture will be entitled to receive from the
Corporation the principal amount of (and premium, if any) and interest on New
Junior Subordinated Debentures held, while a holder of New Capital Securities
is entitled to receive Distributions from the Trust (or, in certain
circumstances, from the Corporation under the New Guarantee) if and to the
extent the Trust has funds on hand legally available for the payment of such
Distributions.

RIGHTS UPON TERMINATION

Unless the Junior Subordinated Debentures are distributed to holders of
the Trust Securities, upon any voluntary or involuntary termination and
liquidation of the Trust, the holders of the Trust Securities will be
entitled to receive, out of assets held by the Trust, the Liquidation
Distribution in cash. See "Description of New Securities--Description of New
Capital Securities--Liquidation of the Trust and Distribution of New Junior
Subordinated Debentures." Upon any voluntary or involuntary liquidation or
bankruptcy of the Corporation, the Property Trustee, as holder of the New
Junior Subordinated Debentures, would be a subordinated creditor of the
Corporation, subordinated in right of payment to all Senior Indebtedness as
set forth in the Indenture, but entitled to receive payment in full of
principal (and premium, if any) and interest, before any stockholders of the
Corporation receive payments or distributions. Since the Corporation will be
the guarantor under the New Guarantee and will agree to pay for all costs,
expenses and liabilities of the Trust (other than the Trust's obligations to
the holders of its Trust Securities), the positions of a holder of New
Capital Securities and a holder of New Junior Subordinated Debentures
relative to stockholders of the Corporation in the event of liquidation or
bankruptcy of the Corporation are expected to be substantially the same.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

GENERAL

In the opinion of Brown & Wood LLP, counsel to the Corporation and the
Trust ("Tax Counsel"), the following is a summary of certain of the material
United States federal income tax consequences of the purchase, ownership and
disposition of Capital Securities held as capital assets by a holder. This
summary only addresses the tax consequences to a holder that acquired the Old
Capital Securities upon initial issuance at their original offering price. It
does not deal with special classes of holders such as banks, thrifts, real
estate investment trusts, regulated investment companies, insurance
companies, dealers in securities or currencies, tax-exempt investors, or
persons that will hold the Capital Securities as a position in a "straddle,"
as part of a "synthetic security" or "hedge," as part of a "conversion
transaction" or other integrated investment, or as other than a capital
asset. This summary also does not address the tax consequences to persons
that have a functional currency other than the U.S. dollar or the tax
consequences to shareholders, partners or beneficiaries of a holder of
Capital Securities. Further, it does not include any description of any
alternative minimum tax consequences or the tax laws of any state or local
government or of any foreign government that may be applicable to the Capital
Securities. This summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury regulations thereunder, the administrative and
judicial interpretations thereof, as of the date hereof, all of which are
subject to change, possibly on a retroactive basis.

EXCHANGE OF CAPITAL SECURITIES

The exchange of Old Capital Securities for New Capital Securities should
not be a taxable event to holders for United States federal income tax
purposes. The exchange of Old Capital Securities for New Capital Securities
pursuant to the Exchange Offer should not be treated as an "exchange" for
United States federal income tax purposes because the New Capital Securities
should not be considered to differ materially in kind or extent from the Old
Capital Securities and because the exchange will occur by operation of the
terms of the Old Capital Securities. If, however, the exchange of the Old
Capital Securities for the New Capital Securities were treated as an exchange
for United States federal income tax purposes, such exchange should
constitute a recapitalization for United States federal income tax purposes.
Accordingly, the New Capital Securities should have the same issue price as
the Old Capital Securities, and a holder should have the same adjusted tax
basis and holding period in the New Capital Securities as the holder had in
the Old Capital Securities immediately before the exchange.

CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES

In connection with the issuance of the Old Junior Subordinated
Debentures, Tax Counsel has rendered its opinion generally to the effect
that, under then current law and assuming full compliance with the terms of
the Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Old Junior Subordinated Debentures
will be classified for United States federal income tax purposes as
indebtedness of the Corporation. An opinion of Tax Counsel, however, is not
binding on the Internal Revenue Service (the "IRS") or the courts.
Prospective investors should note that no rulings have been or are expected
to be sought from the IRS with respect to any of these issues and no
assurance can be given that the IRS will not take contrary positions.
Moreover, no assurance can be given that any of the opinions expressed herein
will not be challenged by the IRS or, if challenged, that such a challenge
would not be successful.

CLASSIFICATION OF THE TRUST

In connection with the issuance of the Old Capital Securities, Tax
Counsel has rendered its opinion generally to the effect that, under then
current law and assuming full compliance with the terms of the Trust
Agreement and the Indenture (and certain other documents), and based on
certain facts and assumptions contained in such opinion, the Trust will be
classified for United States federal income tax purposes as a grantor trust
and not as an association taxable as a corporation. Accordingly, for United
States federal income tax purposes, each holder of Capital Securities
generally will be considered the owner of an undivided interest in the Junior
Subordinated Debentures, and each holder will be required to include in its
gross income any interest (or OID accrued) with respect to its allocable
share of those Junior Subordinated Debentures.

INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT

Under recently issued Treasury regulations (the "Regulations")
applicable to debt instruments issued on or after August 13, 1996, a "remote"
contingency that stated interest will not be timely paid will be ignored in
determining whether a debt instrument is issued with OID. The Corporation
believes that the likelihood of its exercising its option to defer payments
of interest is "remote" since exercising that option would prevent the
Corporation from declaring dividends on any class of its equity securities.
Accordingly, the Corporation intends to take the position, based on the
advice of Tax Counsel, that the Junior Subordinated Debentures will not be
considered to be issued with OID and, accordingly, stated interest on the
Junior Subordinated Debentures generally will be taxable to a holder as
ordinary income at the time it is paid or accrued in accordance with such
holder's method of accounting.

Under the Regulations, if the Corporation were to exercise its option to
defer payments of interest, the Junior Subordinated Debentures would at that
time be treated as issued with OID, and all stated interest on the Junior
Subordinated Debentures would thereafter be treated as OID as long as the
Junior Subordinated Debentures remain outstanding. In such event, all of a
holder's taxable interest income with respect to the Junior Subordinated
Debentures would thereafter be accounted for on an economic accrual basis
regardless of such holder's method of tax accounting, and actual
distributions of stated interest would not be reported as taxable income.
Consequently, a holder of Capital Securities would be required to include in
gross income OID even though the Corporation would not make actual cash
payments during an Extension Period. Moreover, under the Regulations, if the
option to defer the payment of interest was determined not to be "remote",
the Junior Subordinated Debentures would be treated as having been originally
issued with OID. In such event, all of a holder's taxable interest income
with respect to the Junior Subordinated Debentures would be accounted for on
an economic accrual basis regardless of such holder's method of tax
accounting, and actual distributions of stated interest would not be reported
as taxable income.

The Regulations have not yet been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to Tax Counsel's interpretation herein.

Because income on the Capital Securities will constitute interest or
OID, corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with
respect to the Capital Securities.

RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF THE
TRUST

The Corporation will have the right at any time to liquidate the Trust
and cause the Junior Subordinated Debentures to be distributed to the holders
of the Trust Securities. Under current law, such a distribution, for United
States federal income tax purposes, would be treated as a nontaxable event to
each holder, and each holder would receive an aggregate tax basis in the
Junior Subordinated Debentures equal to such holder's aggregate tax basis in
its Capital Securities. A holder's holding period in the Junior Subordinated
Debentures so received in liquidation of the Trust would include the period
during which the Capital Securities were held by such holder. If, however,
the Trust is characterized for United States federal income tax purposes as
an association taxable as a corporation at the time of its dissolution, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to holders of Capital Securities and a holder's holding period in
Junior Subordinated Debentures would begin on the date such Junior
Subordinated Debentures were received.

Under certain circumstances described herein (see "Description of New
Securities--Description of New Capital Securities"), the Junior Subordinated
Debentures may be redeemed for cash and the proceeds of such redemption
distributed to holders in redemption of their Capital Securities. Under
current law, such a redemption would, for United States federal income tax
purposes, constitute a taxable disposition of the redeemed Capital
Securities, and a holder could recognize gain or loss as if it sold such
redeemed Capital Securities for cash. See "--Sales of Capital Securities."

SALES OF CAPITAL SECURITIES

A holder that sells Capital Securities will recognize gain or loss equal
to the difference between its adjusted tax basis in the Capital Securities
and the amount realized on the sale of such Capital Securities (other than
with respect to accrued and unpaid interest which has not yet been included
in income, which will be treated as ordinary income). A holder's adjusted tax
basis in the Capital Securities generally will be its initial purchase price
increased by OID (if any) previously includable in such holder's gross income
to the date of disposition and decreased by payments (if any) received on the
Capital Securities in respect of OID. Such gain or loss generally will be a
capital gain or loss and generally will be a long-term capital gain or loss
if the Capital Securities have been held for more than one year.

The Capital Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the
underlying Junior Subordinated Debentures. A holder who uses the accrual
method of accounting for tax purposes (and a cash method holder, if the
Junior Subordinated Debentures are deemed to have been issued with OID) who
disposes of his Capital Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest
on the Junior Subordinated Debentures through the date of disposition in
income as ordinary income (i.e., interest or, possibly, OID), and to add such
amount to his adjusted tax basis in his pro rata share of the underlying
Junior Subordinated Debentures deemed disposed of. To the extent the selling
price is less than the holder's adjusted tax basis (which will include all
accrued but unpaid interest) a holder will recognize a capital loss. Subject
to certain limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes.

PROPOSED TAX LEGISLATION

On February 6, 1997, as part of the Clinton Administration's Fiscal 1998
Budget Proposal, the Treasury Department proposed legislation (the "Proposed
Legislation") which would, among other things, generally deny corporate
issuers a deduction for interest in respect of certain debt obligations, such
as the New Junior Subordinated Debentures, issued on or after the date "of
first committee action," if such debt obligations had a maximum term in
excess of 15 years and are not shown as indebtedness on the issuer's
applicable consolidated balance sheet. The Proposed Legislation has not yet
been introduced by any member of the 105th Congress. If other legislation is
enacted by Congress and if it gives rise to a Tax Event, the Trust would be
permitted to cause a redemption of the Trust Securities at the Special Event
Redemption Price by electing to prepay the Junior Subordinated Debentures at
the Special Event Prepayment Price. See "Description of New Securities--
Description of New Capital Securities--Redemption" and "--Description of New
Junior Subordinated Debentures--Special Event Prepayment."

UNITED STATES ALIEN HOLDERS

For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a U.S.
Holder for United States federal income tax purposes. A "U.S. Holder" is a
holder of Capital Securities who or which is a citizen or individual resident
(or is treated as a citizen or individual resident) of the United States for
federal income tax purposes, a corporation or partnership created or
organized (or treated as created or organized for federal income tax
purposes) in or under the laws of the United States or any political
subdivision thereof, or a trust or estate the income of which is includible
in its gross income for federal income tax purposes without regard to its
source. (For taxable years beginning after December 31, 1996 (or for the
immediately preceding taxable year, if the trustee of a trust so elects), a
trust is a U.S. Holder for federal income tax purposes if, and only if, (i) a
court within the United States is able to exercise primary supervision over
the administration of the trust and (ii) one or more United States trustees
have the authority to control all substantial decisions of the trust.)
Under present United States federal income tax laws: (i) payments by the
Trust or any of its paying agents to any holder of a Capital Security who or
which is a United States Alien Holder will not be subject to United States
federal withholding tax; provided that, (a) the beneficial owner of the
Capital Security does not actually or constructively own 10 percent or more
of the total combined voting power of all classes of stock of the Corporation
entitled to vote, (b) the beneficial owner of the Capital Security is not a
controlled foreign corporation that is related to the Corporation through
stock ownership, and (c) either (A) the beneficial owner of the Capital
Security certifies to the Trust or its agent, under penalties of perjury,
that it is not a United States holder and provides its name and address or
(B) a securities clearing organization, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or
business (a "Financial Institution"), and holds the Capital Security in such
capacity, certifies to the Trust or its agent, under penalties of perjury,
that such statement has been received from the beneficial owner by it or by a
Financial Institution between it and the beneficial owner and furnishes the
Trust or its agent with a copy thereof; and (ii) a United States Alien Holder
of a Capital Security will not be subject to United States federal
withholding tax on any gain realized upon the sale or other disposition of a
Capital Security.

INFORMATION REPORTING TO HOLDERS

Generally, income on the Capital Securities will be reported to holders
on Forms 1099, which forms should be mailed to holders of Capital Securities
by January 31 following each calendar year.

BACKUP WITHHOLDING

Payments made on, and proceeds from the sale of, the Capital Securities
may be subject to a "backup" withholding tax of 31 percent unless the holder
complies with certain identification requirements. Any withheld amounts will
be allowed as a credit against the holder's United States federal income tax,
provided the required information is provided to the IRS.

THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING
UPON A HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX
ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE,
OWNERSHIP AND DISPOSITION OF THE CAPITAL SECURITIES, INCLUDING THE TAX
CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE
EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER TAX LAWS.

ERISA CONSIDERATIONS

The Corporation, the obligor with respect to the New Junior Subordinated
Debentures held by the Trust, and its affiliates and the Property Trustee may
be considered a "party in interest" (within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) or a
"disqualified person" (within the meaning of Section 4975 of the Code) with
respect to many employee benefit plans ("Plans") that are subject to ERISA.
Any purchaser proposing to acquire New Capital Securities with assets of any
Plan should consult with its counsel. The purchase and/or holding of New
Capital Securities by a Plan that is subject to the fiduciary responsibility
provisions of ERISA or the prohibited transaction provisions of Section 4975
of the Code (including individual retirement arrangements and other plans
described in Section 4975(e)(1) of the Code) and with respect to which the
Corporation, the Property Trustee or any affiliate is a service provider (or
otherwise is a party in interest or a disqualified person) may constitute or
result in a prohibited transaction under ERISA or Section 4975 of the Code,
unless such New Capital Securities are acquired pursuant to and in accordance
with an applicable exemption, such as Prohibited Transaction Class Exemption
("PTCE") 84-14 (an exemption for certain transactions determined by an
independent qualified professional asset manager), PTCE 91-38 (an exemption
for certain transactions involving bank collective investment funds), PTCE
90-1 (an exemption for certain transactions involving insurance company
pooled separate accounts), PTCE 95-60 (an exemption for transactions
involving certain insurance company general accounts) or PTCE 95-23 (an
exemption for certain transactions determined by an in-house manager). In
addition, as described below, a Plan fiduciary considering the acquisition of
New Capital Securities should be aware that the assets of the Trust may be
considered "plan assets" for ERISA purposes. Therefore, a Plan fiduciary
should consider whether the acquisition of Capital Securities could result in
a delegation of fiduciary authority to the Property Trustee, and, if so,
whether such a delegation of authority is permissible under the Plan's
governing instrument or any investment management agreement with the Plan. In
making such determination, a Plan fiduciary should note that the Property
Trustee is a U.S. bank qualified to be an investment manager (within the
meaning of section 3(38) of ERISA) to which such a delegation of authority
generally would be permissible under ERISA. Further, prior to an Event of
Default with respect to the New Junior Subordinated Debentures, the Property
Trustee will have only limited custodial and ministerial authority with
respect to Trust assets.

Under the U.S. Department of Labor regulations defining "plan assets"
for ERISA purposes (the "Plan Assets Regulations"), the assets of the Trust
will be considered plan assets of Plans owning New Capital Securities unless
the aggregate investment in New Capital Securities by "benefit plan
investors" is not deemed "significant" or the New Capital Securities qualify
as "publicly offered securities" as defined in such Regulations. For this
purpose, equity participation by benefit plan investors will not be
considered "significant" on any date only if, immediately after the most
recent acquisition of Capital Securities, the aggregate interest in the New
Capital Securities held by benefit plan investors will be less than 25% of
the value of the New Capital Securities. Although it is possible that the
equity participation by benefit plan investors in New Capital Securities on
any date will not be "significant" for purposes of the Plan Assets
Regulations, such result cannot be assured.

The New Capital Securities may qualify as "publicly offered securities"
under the Plan Assets Regulations if at the time of the Exchange Offer they
are also "widely held" and "freely transferable." Under the Regulations, a
class of securities is "widely held" only if it is a class of securities that
is owned by 100 or more investors independent of the issuer and of one
another. Although it is possible that at the time of the Exchange Offer the
New Capital Securities will be "widely held," such result cannot be assured.
Whether a security is "freely transferable" for purposes of the Regulations
is a factual question to be determined on the basis of all relevant facts and
circumstances. If at the time of the Exchange Offer the New Capital
Securities qualify as "publicly offered securities," the assets of the Trust
should not be "plan assets" with respect to Plans acquiring New Capital
Securities. If at the time of the Exchange Offer the New Capital Securities
do not qualify as "publicly offered securities," the "plan asset"
considerations discussed in the preceding paragraphs could be applicable in
connection with the investment by Plans in the New Capital Securities.

PLAN OF DISTRIBUTION

Each broker-dealer that receives New Capital Securities for its own
account in connection with the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such New Capital
Securities. This Prospectus, as it may be amended or supplemented from time
to time, may be used by Participating Broker-Dealers during the period
referred to below in connection with resales of New Capital Securities
received in exchange for Old Capital Securities if such Old Capital
Securities were acquired by such Participating Broker-Dealers for their own
accounts as a result of market-making activities or other trading activities.
The Corporation and the Trust have agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New Capital Securities for a
period ending 90 days after the Expiration Date (subject to extension under
certain limited circumstances described herein) or, if earlier, when all such
New Capital Securities have been disposed of by such Participating Broker-
Dealer. However, a Participating Broker-Dealer who intends to use this
Prospectus in connection with the resale of New Capital Securities received
in exchange for Old Capital Securities pursuant to the Exchange Offer must
notify the Corporation or the Trust, or cause the Corporation or the Trust to
be notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such notice may be given in the space provided for that
purpose in the Letter of Transmittal or may be delivered to the Exchange
Agent at one of the addresses set forth herein under "The Exchange Offer--
Exchange Agent." See "The Exchange Offer--Resales of New Capital
Securities."

The Corporation or the Trust will not receive any cash proceeds from the
issuance of the New Capital Securities offered hereby. New Capital
Securities received by broker-dealers for their own accounts in connection
with the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Capital Securities or a combination
of such methods of resale, at market prices prevailing at the time of resale,
at prices related to such prevailing market prices or at negotiated prices.
Any such resale may be made directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such New
Capital Securities.

Any broker-dealer that resells New Capital Securities that were received
by it for its own account in connection with the Exchange Offer and any
broker or dealer that participates in a distribution of such New Capital
Securities may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any profit on any such resale of New Capital Securities
and any commissions or concessions received by any such persons may be deemed
to be underwriting compensation under the Securities Act. The Letter of
Transmittal states that, by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.

VALIDITY OF NEW SECURITIES

The validity of the New Guarantee and the New Junior Subordinated
Debentures will be passed upon for the Corporation by Brown & Wood LLP, New
York, New York. Certain matters relating to United States federal income tax
considerations also will be passed upon for the Corporation by Brown & Wood
LLP, New York, New York. Certain matters of Delaware law relating to the
validity of the New Capital Securities will be passed upon on behalf of the
Trust by Skadden, Arps, Slate, Meagher & Flom (Delaware), special Delaware
counsel to the Trust.

EXPERTS

The consolidated financial statements of the Corporation and
subsidiaries, contained in and incorporated by reference into the
Corporation's Annual Report on Form 10-K for the year ended December 31,
1995, and the supplemental consolidated financial statements of the
Corporation and subsidiaries, contained in the Corporation's Current Report
on Form 8-K dated September 6, 1996, have been incorporated herein by
reference in reliance upon the reports set forth therein of Coopers & Lybrand
L.L.P., independent auditors, and upon the authority of such firm as experts
in accounting and auditing.

The consolidated financial statements of BayBanks, Inc. and subsidiaries
as of December 31, 1995 and 1994, and for each of the years in the three-year
period ended December 31, 1995 incorporated by reference in the Joint Proxy
Statement-Prospectus of the Corporation and BayBanks, Inc. dated March 19,
1996, and in the Corporation's Current Report on Form 8-K dated September 6,
1996, have been incorporated herein by reference in reliance upon the reports
set forth therein of KPMG Peat Marwick LLP, independent certified public
accountants and upon the authority of said firm as experts in accounting and
auditing.