AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 27, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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BANKBOSTON CORPORATION BANKBOSTON CAPITAL TRUST IV
(Exact name of Registrant BANKBOSTON CAPITAL TRUST V
as specified in its (Exact name of Registrants
charter) as specified
in their trust
agreements)
MASSACHUSETTS DELAWARE
(State or other (State or other
jurisdiction of jurisdiction of
incorporation or incorporation or
organization) organization)
_________ _________
04-2471221 TO BE APPLIED FOR
(I.R.S. Employer (I.R.S. Employer
Identification No.) Identification No.)
------------
100 FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
(617) 434-2200
--------------
(Address, including zip code, and telephone number, including area code, of
Registrants' principal executive offices)
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GARY A. SPIESS, ESQ. JANICE B. LIVA, ESQ.
GENERAL COUNSEL AND CLERK ASSISTANT GENERAL COUNSEL
BANKBOSTON CORPORATION AND
100 FEDERAL STREET ASSISTANT CLERK
BOSTON, MASSACHUSETTS BANKBOSTON CORPORATION
02110 100 FEDERAL STREET
(617) 434-2870 BOSTON, MASSACHUSETTS
02110
(617) 434-8630
(Name, address, including zip code, and telephone number, including area
code, of agents for service)
-------------------
COPIES TO:
EDWARD F. PETROSKY, ESQ. GREGORY A. FERNICOLA, ESQ.
BROWN & WOOD LLP SKADDEN, ARPS, SLATE,
ONE WORLD TRADE CENTER MEAGHER & FLOM LLP
NEW YORK, NEW YORK 10048 919 THIRD AVENUE
NEW YORK, NEW YORK 10022
Approximate Date of Commencement of Proposed Sale to the Public:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered
in connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933 ("Securities Act"), check the following box. /x/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act, please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED UNIT(1) PRICE(1) FEE(2)
- ----------------------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Capital Securities of $500,000,000 100% $500,000,000 $147,500
BankBoston Capital
Trust IV and BankBoston
Capital Trust V . . . .
Junior Subordinated
Deferrable Interest
Debentures of
BankBoston Corporation
(2)(3) . . . . . . . .
BankBoston Corporation
Guarantees with respect
to Capital Securities
(4) . . . . . . . . . .
Total . . . . . . $500,000,000(5) 100% $500,000,000 $147,500
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee.
(2) Calculated pursuant to Rule 457. No separate consideration will be
received for the Junior Subordinated Deferrable Interest Debentures of
BankBoston Corporation (the "Junior Subordinated Debentures")
distributed upon any liquidation of BankBoston Capital Trust IV or
BankBoston Capital Trust V, as the case may be.
(3) The Junior Subordinated Debentures will be purchased by BankBoston
Capital Trust IV or BankBoston Capital Trust V, as the case may be, in
part, with the proceeds of the sale of Capital Securities.
(4) No separate consideration will be received for the BankBoston
Corporation Guarantees.
(5) This Registration Statement is deemed to cover the rights of holders of
the Junior Subordinated Debentures under the applicable Indenture, the
rights of the holders of the Capital Securities of BankBoston Capital
Trust IV and BankBoston Capital Trust V under their respective Trust
Agreements, the rights of holders of Capital Securities under the
applicable BankBoston Corporation Guarantee and certain backup
undertakings as described herein.
-------------------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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EXPLANATORY NOTE
This Registration Statement contains a form of Prospectus to be used in
connection with offerings of preferred securities (referred to herein
generically as "Capital Securities") of BankBoston Capital Trust IV and
BankBoston Capital Trust V (each, a "Trust"), together with the related
issuances by BankBoston Corporation (the "Corporation") of junior
subordinated deferrable interest debentures and guarantees, in each case as
described herein. The form of Prospectus includes bracketed provisions
relating to fixed rate or floating rate offerings and retail or institutional
offerings. At the time of any offering, the Prospectus will be completed,
which will include the identity of the relevant Trust, the names, compensation
and commitment(s) of the underwriter(s) and the disclosure of pricing
information and all other variable terms, and will be filed with the
Securities and Exchange Commission pursuant to Rule 424 under the Securities
Act of 1933, as amended.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. The prospectus shall not constitute an offer to sell or
the solicitation of any offer to buy nor shall there be any sale of these
securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction.
PROSPECTUS
- ----------
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS, DATED FEBRUARY 27, 1998
$___,000,000
BANKBOSTON CAPITAL TRUST ___
CAPITAL SECURITIES
(LIQUIDATION AMOUNT $_____ PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
BANKBOSTON CORPORATION
----------------
The Capital Securities (the "Capital Securities") offered hereby will
represent beneficial interests in BankBoston Capital Trust ___, a statutory
business trust formed under the laws of the State of Delaware (the "Trust").
BankBoston Corporation, a Massachusetts corporation (the "Corporation"), will
be 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 Deferrable Interest Debentures (the "Junior Subordinated
Debentures") of the Corporation, which are scheduled to mature on ----------,
20__ (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 Capital Securities--Subordination of
Common Securities."
The Capital Securities will be represented by global Capital Securities
in fully registered form, deposited with a custodian for and registered in
the name of a nominee of The Depository Trust Company ("DTC"). Beneficial
interests in such global Capital Securities will be shown on, and transfers
thereof will be effected through, records maintained by DTC and its
participants. Beneficial interests in such 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. See
"Description of Capital Securities--Form, Denomination, Book-Entry Procedures
and Transfer."
(CONTINUED ON NEXT PAGE)
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SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN EVALUATING AN
INVESTMENT IN THE CAPITAL SECURITIES.
______________
(The Capital Securities have been authorized for listing on the --------,
subject to official notice of issuance. Trading of the Capital Securities is
expected to commence within a 30-day period after the initial delivery
thereof.)
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THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENTAL AGENCY.
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 ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) COMMISSION (2) TRUST(3)(4)
--------- -------------- -----------
<S> <C> <C> <C>
Per Capital Security . $ (4) $
Total . . . . . . . . $ (4) $
</TABLE>
(1) Plus accumulated Distributions, if any, from ____________.
(2) The Corporation and the Trust have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933, as amended. See "Underwriting."
(3) Without giving effect to estimated expenses of $__________ incurred by
the Corporation.
(4) In view of the fact that the proceeds of the sale of the Capital
Securities will be invested in the Junior Subordinated Debentures, the
Corporation has agreed to pay to the Underwriters, as compensation,
$______ per Capital Security (or $____________ in the aggregate). See
"Underwriting."
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The Capital Securities are offered by the several Underwriters, subject
to prior sale, when, as and if issued to and accepted by the Underwriters and
subject to approval of certain legal matters by counsel for the Underwriters
and to certain other conditions. The Underwriters reserve the right to
withdraw, cancel or modify such offer and to reject orders in whole or in
part. It is expected that delivery of the Capital Securities will be made
through the facilities of DTC, on or about _______, against payment therefor
in immediately available funds.
----------------
[Names of Underwriters]
----------------
The date of this Prospectus is ____________.
CERTAIN PERSONS PARTICIPATING IN THE OFFERING OF THE CAPITAL SECURITIES MAY
ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE
PRICE OF THE CAPITAL SECURITIES. SUCH TRANSACTIONS MAY INCLUDE STABILIZING,
THE PURCHASE OF THE CAPITAL SECURITIES TO COVER SYNDICATE SHORT POSITIONS AND
THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."
_____________
(Continued from the previous page)
Holders of the Trust Securities will be entitled to receive cumulative
cash distributions arising from the payment of interest on the Junior
Subordinated Debentures, accumulating from the date of original issuance and
payable ________ in arrears on _______ and _______ of each year, commencing
___________, at a rate per annum (equal to __%) (reset ________ equal to
LIBOR (as defined herein) plus ___%) (the "Distribution Rate") on the
Liquidation Amount of $_____ per Trust 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 __ consecutive _________ periods with respect to each deferral
period (each, an "Extension Period"), provided that no Extension Period may
extend beyond the Stated Maturity Date. Upon 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
herein. 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
continue to accumulate) at the (applicable periodic) Distribution Rate,
compounded ________ from the relevant payment date for such interest, and
holders of Trust Securities will be required to accrue interest income for
United States federal income tax purposes. See "Description of Junior
Subordinated Debentures--Option to Extend Interest Payment Date" and "Certain
Federal Income Tax Consequences--Interest Income and Original Issue
Discount."
The Corporation will, through the Guarantee, the Common Guarantee, the
Trust Agreement, the Junior Subordinated Debentures and the Indenture (each
as defined herein), taken together, fully, irrevocably and unconditionally
guarantee all of the Trust's obligations under the Trust Securities. See
"Relationship Among the Capital Securities, the Junior Subordinated
Debentures and the Guarantee--Full and Unconditional Guarantee." The
Guarantee and the Common 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 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 Junior Subordinated Debentures--Enforcement of Certain Rights
by Holders of 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 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
(the "Special Event Redemption Price") equal to the Special Event Prepayment
Price (as defined below), and (iii) in whole or in part, on or after
____________, contemporaneously with the optional prepayment by the
Corporation of the Junior Subordinated Debentures, at a redemption price (the
"Optional Redemption Price") equal to the Optional Prepayment Price (as
defined below). 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 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
________, in whole or in part, at a prepayment price (the "Optional
Prepayment Price") equal to [100%] [___%] of the principal amount thereof (on
______________, declining ratably on each _____ thereafter to 100% on or
after __________,] 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 "Optional
Prepayment Price") equal to (the greater of (a)) 100% of the principal amount
thereof (or (b) the sum, as determined by the 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
____ basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate (as defined herein)), plus accrued interest thereon to
the date of prepayment. See "Description of 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 the 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 $_____ per Capital Security plus accumulated
Distributions thereon to the date of payment. See "Description of Capital
Securities--Liquidation of the Trust and Distribution of Junior Subordinated
Debentures."
____________
As used herein, (i) the "Indenture" means the Indenture, to be dated as
of __________, as amended and supplemented from time to time, between the
Corporation and The Bank of New York, as trustee (the "Debenture Trustee"),
relating to the Junior Subordinated Debentures, (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"), (iii) the "Guarantee" means the Capital Securities
Guarantee Agreement between the Corporation and The Bank of New York, as
trustee (the "Guarantee Trustee") and (iv) the "Common Guarantee" means the
Common Securities Guarantee Agreement of the Corporation.
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 Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information may be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's
regional offices at 7 World Trade Center, 13th Floor, Suite 1300, New York,
New York 10048 and Suite 1400, Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661. Copies of such material may also be obtained by
mail from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates. 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 may 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 certain 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 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, issuing the Trust Securities and engaging in necessary, advisable
or incidental activities. See "BankBoston Capital Trust ___", "Description
of Capital Securities", "Description of Junior Subordinated Debentures" and
"Description of Guarantee". In addition, the Corporation does not expect
that the Trust will file reports, proxy statements and other information
under the Exchange Act with the Commission.
This Prospectus constitutes a part of a registration statement on Form
S-3 (the "Registration Statement") filed by the Corporation and the Trust
with the Commission under the Securities Act of 1933, as amended (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 Trust 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, 1996;
2. The Corporation's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997, June 30, 1997 and September 30, 1997; and
3. The Corporation's Current Reports on Form 8-K dated January 16,
1997, April 17, 1997, July 17, 1997, October 16, 1997, November 25, 1997
and January 15, 1998.
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 offering of the Capital Securities offered hereby
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, BankBoston, 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.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus or incorporated herein by
reference.
BANKBOSTON 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, in certain cases, 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. As of December 31, 1997, the
Corporation, together with its subsidiaries, operated a network of offices
across the United States and more than 100 offices in 23 countries in Latin
America, Asia, Europe and Africa. The major banking subsidiaries of the
Corporation are BankBoston, N.A. and Rhode Island Hospital Trust National
Bank.
BANKBOSTON CAPITAL TRUST ___
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, and The Bank of New York
(Delaware), as Delaware Trustee and the three individual Administrative
Trustees named therein, and (ii) the filing of a certificate of trust with
the Delaware Secretary of State. The Trust's business and affairs are
conducted by the Issuer Trustees: the Property Trustee, the Delaware Trustee,
and the three individual Administrative Trustees who are employees or
officers of or affiliated with the Corporation. The Trust exists for the
exclusive purposes of (i) issuing and selling the Trust Securities, (ii)
using the proceeds from the sale of the Trust Securities to acquire the
Junior Subordinated Debentures issued by the Corporation and (iii) engaging
in only those other activities necessary, advisable or incidental thereto.
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 will be owned by
the Corporation.
THE OFFERING
Securities Offered. . . . . . . . . _______ Capital Securities (Liquidation
Amount $_____ per Capital Security).
Offering Price. . . . . . . . . . . $_____ per Capital Security plus
accumulated Distributions, if any, from
_________.
Distribution Dates. . . . . . . . . ________ on _________ and ________ of
each year, commencing _________.
Extension Periods . . . . . . . . . Distributions on 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 Junior Subordinated
Debentures. No Extension Period will
exceed __ consecutive _______ periods
or extend beyond the Stated Maturity
Date. See "Description of Junior
Subordinated Debentures--Option to
Extend Interest Payment Date" and
"Certain Federal Income Tax
Consequences--Interest Income and
Original Issue Discount."
Ranking. . . . . . . . . . . . . . . The Capital Securities will rank pari
passu, and payments thereon will be
made pro rata, with the Common
Securities except as described under
"Description of Capital Securities--
Subordination of Common Securities."
The Junior Subordinated Debentures will
rank pari passu with the $257,732,000
aggregate principal amount of 8.25%
Junior Subordinated Deferrable Interest
Debentures due December 15, 2026, the
$257,732,000 aggregate principal amount
of 73/4% Junior Subordinated Deferrable
Interest Debentures due December 15,
2026, the $257,732,000 aggregate
principal amount of Floating Rate
Junior Subordinated Deferrable Interest
Debentures due June 15, 2027 and all
other junior subordinated debentures to
be issued by the Corporation
(collectively, "Other Debentures"),
which will be issued and sold to other
trusts to be established by the
Corporation, in each case similar to
the Trust ("Other Trusts"), and will be
unsecured 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
Indenture. See "Description of Junior
Subordinated Debentures." The
Guarantee will rank pari passu with the
guarantees issued by the Corporation
with respect to the 250,000 8.25%
Capital Securities (Liquidation Amount
$1,000 per security) of BankBoston
Capital Trust I, the 250,000 73/4%
Capital Securities (Liquidation Amount
$1,000 per security) of BankBoston
Capital Trust II, the 250,000 Floating
Rate Capital Securities (Liquidation
Amount $1,000 per security) of
BankBoston Capital Trust III and all
other guarantees to be issued by the
Corporation with respect to capital
securities issued or to be issued by
Other Trusts (collectively, "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. See
"Description of Guarantee."
Redemption. . . . . . . . . . . . . . The Trust Securities will be
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, on or
after _________, contemporaneously
with the optional prepayment by the
Corporation of the Junior
Subordinated Debentures, in each
case at the applicable Redemption
Price. See "Description of Capital
Securities--Redemption."
(Absence of Market for the
Capital Securities. . . . . . . . The Capital Securities will be a new
issue of securities for which there
currently is no market. Although the
Underwriters have informed the Trust
and the Corporation that they each
currently intend to make a market in
the Capital Securities, the
Underwriters 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 Capital
Securities. The Trust and the
Corporation do not intend to apply for
listing of the Capital Securities on
any securities exchange or for
quotation through the NASD Automated
Quotation System. See "Underwriting.")
(Listing. . . . . . . . . . . . . . The Capital Securities will be a new
issue of securities and have been
authorized for listing on the
_____________________, subject to
official notice of issuance. Trading
of the Capital Securities is expected
to commence within a 30-day period
after the initial delivery thereof.
Although the Underwriters have informed
the Trust and the Corporation that they
each currently intend to make a market
in the Capital Securities prior to the
commencement of trading on the
___________________, the Underwriters
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 Capital Securities.
See "Underwriting.")
Form of Capital
Securities. . . . . . . . . . . . The Capital Securities will be
represented by a global certificate
or certificates registered in the
name of Cede & Co., as nominee for
DTC. Beneficial interests in the
Capital Securities will be
evidenced by, and transfers thereof
will be effected only through,
records maintained by the
participants in DTC. Except as
described herein, Capital
Securities in certificated form
will not be issued in exchange for
the global certificate or
certificates. See "Description of
Capital Securities--Form,
Denomination, Book-Entry Procedures
and Transfer."
Use of Proceeds. . . . . . . . . . . . The proceeds to the Trust from the
sale of the Capital Securities will
be invested by the Trust in the
Junior Subordinated Debentures.
The Corporation intends to use the
net proceeds from the sale of the
Junior Subordinated Debentures for
general corporate purposes. The
Capital Securities will be eligible
to qualify as Tier 1 capital under
the capital guidelines of the
Federal Reserve. See "Use of
Proceeds."
RISK FACTORS
Prospective purchasers of the Capital Securities should carefully review
the information contained elsewhere in this Prospectus and should
particularly consider the following matters.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES
The obligations of the Corporation under the Guarantee issued by it 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 to the extent and in the manner
set forth in the Guarantee or the Indenture, as applicable. 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 December 31, 1997, the aggregate principal amount of
outstanding Senior Indebtedness was approximately $610 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 December 31, 1997, the subsidiaries of the
Corporation had total liabilities (excluding liabilities owed to the
Corporation) of approximately $62 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 or its subsidiaries. See "Description of
Guarantee--Status of the Guarantee" and "Description of 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 __ consecutive
_________ 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, _________ 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 (applicable)Interest Rate (as defined
herein), compounded _______, 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 Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed __ consecutive _________ 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
applicable Interest Rate, compounded _______, 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 Capital Securities--Distributions" and "Description of 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 Federal Income Tax Consequences--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.
SPECIAL EVENT REDEMPTION
Upon the occurrence and continuation of a Special Event (as defined
under "Description of 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 Special
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 Capital Securities--Redemption."
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, have generally denied
corporate issuers a deduction for interest in respect of certain debt
obligations, such as the Junior Subordinated Debentures, if such debt
obligations have a maximum term in excess of 15 years and are not shown as
indebtedness on the issuer's applicable consolidated balance sheet. As of
the date of this Prospectus, no such legislation has been enacted.
Furthermore, no similar legislation was proposed as part of President
Clinton's Fiscal 1999 Budget Proposal. No assurance can be given that a
similar proposal will not be enacted in the future that may give rise to a
Tax Event, in which event the Corporation would be permitted, upon approval
of the Federal Reserve if then required under applicable capital guidelines
or policies of the Federal Reserve, 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 Capital Securities--Redemption" and "Description of Junior
Subordinated Debentures--Special Event Prepayment."
POSSIBLE ADVERSE EFFECT ON MARKET PRICES
There can be no assurance as to the market prices for Capital Securities
or Junior Subordinated Debentures distributed to the holders of Capital
Securities if a termination of the Trust were to occur. Accordingly, the
Capital Securities or the Junior Subordinated Debentures may trade at a
discount from the price that the investor paid to purchase the Capital
Securities offered hereby. 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 Capital Securities are also making an
investment decision with regard to the Junior Subordinated Debentures and
should carefully review all the information regarding the Junior Subordinated
Debentures contained herein. See "Description of Junior Subordinated
Debentures."
RIGHTS UNDER THE GUARANTEE
The Guarantee is qualified as an indenture under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"). The Bank of New York will
act as Guarantee Trustee for the purpose of compliance with the Trust
Indenture Act 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
Guarantee will guarantee 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 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 Junior Subordinated
Debentures--Enforcement of Certain Rights by Holders of Capital Securities,"
"Description of Junior Subordinated Debentures--Debenture Events of Default"
and "Description of Guarantee." The Trust Agreement will provide 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 Capital
Securities--Voting Rights; Amendment of the Trust Agreement" and "--Removal
of Issuer Trustees."
(ABSENCE OF PUBLIC MARKET
The Corporation does not intend to have the Capital Securities listed on
the New York Stock Exchange or any other securities exchange or for quotation
through the NASD Automated Quotation System. There is no existing market for
the Capital Securities and there can be no assurance as to the liquidity of
any market that may develop for the Capital Securities, the ability of the
holders to sell their Capital Securities or at what price holders of the
Capital Securities may be able to sell their Capital Securities, as the case
may be. Future trading prices of the Capital Securities will depend on many
factors including, among other things, prevailing interest rates, the
Corporation's operating results, and the market for similar securities. The
Underwriters have informed the Trust and the Corporation that the
Underwriters intend to make a market in the Capital Securities. However, the
Underwriters are not obligated to do so and any such market making activity
may be terminated at any time without notice to the holders of the Capital
Securities. In addition, such market making activity will be subject to the
limits of the Securities Act.)
TRADING PRICE
The Capital Securities may trade at a price that does not fully 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) and who
disposes of its 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 its adjusted tax basis in its 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. See "Certain
Federal Income Tax Considerations--Interest Income and Original Issue
Discount" and "--Sales of Capital Securities."
BANKBOSTON 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, in certain cases, 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. As of December 31, 1997, the
Corporation, together with its subsidiaries, operated a network of offices
across the United States and more than 100 offices in 23 countries in Latin
America, Asia, Europe and Africa. The major banking subsidiaries of the
Corporation are BankBoston, N.A. and Rhode Island Hospital Trust National
Bank.
As of December 31, 1997, on a consolidated basis, the Corporation had
total assets of $69.3 billion, total deposits of $45.8 billion and total
stockholders' equity of $4.6 billion. The Corporation's banking subsidiaries
maintained more than 460 branches in Massachusetts, Rhode Island, Connecticut
and New Hampshire as of December 31, 1997. The Corporation's loans were
diversified geographically, with approximately 72 percent of its total loan
volume consisting of loans and leases made to domestic borrowers and the
balance made overseas. As of December 31, 1997, the Corporation's subsidiaries
employed, in the aggregate, approximately 21,500 full-time equivalent
employees in their domestic and foreign operations.
USE OF PROCEEDS
The proceeds to the Trust from the offering of the Capital Securities
will be $___________. All of the proceeds from the sale of Capital
Securities will be invested by the Trust in the Junior Subordinated
Debentures. The Corporation intends that the net proceeds from the sale of
the 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 repurchase or redemption of certain of the
Corporation's outstanding 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.
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 Years Ended December 31,
September 30,
__________________________________
1997 1996 1995 1994 1993 1992
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges:
Excluding interest on
deposits . . . . . . . 2.33x 2.24x 2.08x 1.90x 2.44x 2.17x
Including interest on
deposits . . . . . . . 1.53 1.44 1.42 1.41 1.38 1.22
</TABLE>
For purposes of computing the ratios of earnings to fixed charges,
earnings represent net income 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.
BANKBOSTON CAPITAL TRUST __
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 Administrative Trustees named therein, and (ii)
the filing of a certificate of trust with the Delaware Secretary of State.
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). The Junior Subordinated
Debentures will be the sole assets of the Trust and, accordingly, payments
under the Junior Subordinated Debentures will be the sole revenues of the
Trust. All of the Common Securities will be 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 Capital
Securities--Subordination of Common Securities." The Corporation will acquire
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 will be 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 Guarantee" and "Description of 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 with respect to the payment of
principal, interest and premium, if any, on the Trust Securities) related to
the Trust and the offering of the Capital Securities and will pay, directly
or indirectly, all ongoing costs, expenses and liabilities of the Trust
(other than payment of principal, interest and premium, if any, on the Trust
Securities). The principal executive office of the Trust is c/o BankBoston,
P.O. Box 2016, Boston, Massachusetts 02106-2016.
DESCRIPTION OF CAPITAL SECURITIES
The Capital Securities will represent preferred beneficial interests in
the Trust and the holders thereof 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 is
qualified under the Trust Indenture Act and is subject to and governed by the
Trust Indenture Act. This summary of certain terms and provisions of the
Capital Securities, the Common 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, and those made a part of the Trust
Agreement by the Trust Indenture Act.
GENERAL
The Capital Securities will be limited to $____,000,000 aggregate
Liquidation Amount at any one time outstanding. The Capital Securities will
rank pari passu, and payments will be made thereon pro rata, with 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 Guarantee will not guarantee payment
of Distributions or amounts payable on redemption of the Capital Securities
or liquidation of the Trust when the Trust does not have funds on hand
legally available for such payments. See "Description of Guarantee."
DISTRIBUTIONS
Distributions on the Capital Securities will be cumulative, will
accumulate from ________ __, and will be payable _______ in arrears on
_________ and __________ of each year, commencing ___________ (each, a
"Distribution Date"), at a rate per annum (equal to __%) (reset _______
equal to LIBOR plus ___%)(the "Distribution Rate") on the Liquidation Amount
of $_____, to the holders of the Capital Securities on the relevant record
dates. The record dates will be the ____ day of the month in which the
relevant Distribution Date falls. The amount of Distributions payable for
any period will be computed on the basis of (a 360-day year consisting of
twelve 30-day months) (the actual number of days in such period and a year of
360 days). In the event that any Distribution Date is not a Business Day (as
defined below), then (such Distribution Date shall be postponed to the next
succeeding Business Day (and without any interest or other payment in respect
of any such delay), except that if such Business Day falls in the next
succeeding calendar month then such Distribution Date shall be the
immediately preceding Business Day. If the Stated Maturity Date or earlier
prepayment date for the Junior Subordinated Debentures falls on a day that is
not a Business Day,) payment of any Distributions payable on such date will
be made on the next succeeding Business Day, and no interest or other payment
will accumulate for the period from and after such 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 Junior Subordinated Debentures at any time or
from time to time for a period not exceeding __ consecutive _________ periods
with respect to each Extension Period, provided that no Extension Period may
extend beyond the Stated Maturity Date. Upon any such election, _______
Distributions on the Capital Securities will be deferred by the Trust during
any such Extension Period. Distributions to which holders of the Capital
Securities are entitled during any such Extension Period will accumulate
additional Distributions thereon at the (applicable periodic) Distribution
Rate, compounded _______ from the relevant Distribution Date, but not
exceeding the interest rate then accruing on the 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 __ consecutive _________ 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 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 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 Junior Subordinated Debentures--Option to Extend Interest
Payment Period" and "Certain Federal Income Tax Consequences--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 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 Junior Subordinated
Debentures in which the Trust will invest the proceeds from the issuance and
sale of the Trust Securities. See "Description of Junior Subordinated
Debentures--General." If the Corporation does not make interest payments on
the Junior Subordinated Debentures, the Property Trustee will not have funds
available to pay Distributions on the Capital Securities. The payment of
Distributions on the 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 Guarantee."
(DISTRIBUTION RATE
LIBOR, the Distribution period and the amount of Distributions payable
in respect of each Distribution period will be calculated by
_____________________, as Calculation Agent, in the same manner as LIBOR, the
interest period and the interest payable in respect of each interest period
for the Junior Subordinated Debentures, as described under "Description of
Junior Subordinated Debentures--Interest Rate.")
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 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 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 __________, at the
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 Depositor); (iii) redemption of all of the
Trust Securities as described under "--Redemption"; (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 of $_____ per Trust Security 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
________.
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 The
Depository Trust Company ("DTC" or the "Depositary") 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 Capital
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for the Trust Securities if a dissolution and liquidation of the
Trust were to occur. Accordingly, the Capital Securities that an investor
may purchase, or the Junior Subordinated Debentures that the investor may
receive on dissolution and liquidation of the Trust, may trade at a discount
to the price that the investor paid to purchase such Capital Securities.
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 is not a Business Day, then the required payments payable
on such date will be made on the next succeeding Business Day, and no
interest or other payment will accumulate for the period from and after 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 Guarantee as described under "Description of
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, on and after the Redemption Date, Distributions will
cease to accrue on the Trust Securities called for redemption.
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
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 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 the 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 Guarantee--
Amendments and Assignment" and as otherwise required by law and the Trust
Agreement, the holders of the 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 of a majority in
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.
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 Capital Securities initially will be represented by one or more
Capital Securities in registered, global form (collectively, the "Global
Capital Securities"). The Global Capital Securities will be deposited upon
issuance with the Property Trustee as custodian for DTC, in The City of 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. See "--Exchange of
Book-Entry Capital Securities for Certificated Capital Securities".
Transfer of beneficial interests in the Global Capital Securities will
be subject to the applicable rules and procedures of DTC and its direct or
indirect participants, which may change from time to time.
Depositary Procedures
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 Underwriters), 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 designated by the
Underwriters 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
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
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 Capital Securities,
and the Trust or 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 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 legended 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.
Exchange of Book-Entry Capital Securities for Certificated Capital Securities
A Global Capital Security is exchangeable for 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 Capital Security
or (y) has ceased to be a clearing agency registered under the Exchange Act,
and the Trust thereupon fails to appoint a successor Depositary within 90
days, (ii) the Corporation in its sole discretion elects to cause the
issuance of the 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 Capital Security
may be exchanged for certificated 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 Capital Securities delivered in exchange for any Global 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 Global Capital Securities shall be made to DTC,
which shall credit the relevant accounts at DTC on the applicable
Distribution Dates, while payments in respect of Capital Securities in
certificated form 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
Capital Securities.
Registration of transfers of the 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 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 JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued under an Indenture,
as supplemented from time to time (as so supplemented, the "Indenture"),
between the Corporation and the Debenture Trustee. The Indenture is
qualified under the Trust Indenture Act. This summary of certain terms and
provisions of the Junior Subordinated Debentures and the Indenture does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all of the provisions of the Indenture, including the
definitions therein of certain terms, and those terms made a part of the
Indenture by the Trust Indenture Act.
GENERAL
Concurrently with the issuance of the Trust Securities, the Trust will
invest the proceeds thereof, together with the consideration paid by the
Corporation for the Common Securities, in Junior Subordinated Debentures
issued by the Corporation. The Junior Subordinated Debentures will bear
interest at a rate per annum (equal to __%) (reset _______ equal to LIBOR
plus ___%) (the "Interest Rate") on the principal amount thereof, payable
_______ in arrears on _______ of each year, commencing (each, an "Interest
Payment Date"), to the person in whose name each Junior Subordinated
Debenture is registered, subject to certain exceptions, at the close of
business on the _____ day of the month in which the relevant Interest
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 consisting of twelve 30-day months)
(the actual number of days elapsed in such period and a year of 360 days).
In the event that any Interest Payment Date (is not a Business Day, then such
Interest Payment Date shall be postponed to the next succeeding Business Day,
except that if such Business Day falls in the next succeeding calendar month
then such Interest Payment Date shall be the immediately preceding Business
Day. If) or the Stated Maturity Date or earlier prepayment date for the
Junior Subordinated Debentures falls on a day that is not a Business Day,
then payment of interest on such date will be made on the next succeeding
Business Day, and no interest or other payment will accrue for the period
from and after 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 Interest Rate, compounded
_______. The term "interest", as used herein, shall include _______
interest payments, interest on _______ interest payments not paid on the
applicable Interest Payment Date and Additional Sums (as defined below), as
applicable.
The Junior Subordinated Debentures will be issued in denominations of
$_____ and integral multiples thereof. The Junior Subordinated Debentures
will mature on __________, 20__ (the "Stated Maturity Date").
The Junior Subordinated Debentures will rank pari passu 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 subsidiary 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 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. The Indenture does not limit the incurrence or
issuance of other secured or unsecured debt, including Senior Indebtedness,
of the Corporation or its subsidiaries. See "--Subordination."
(INTEREST RATE
The interest period with respect to the Junior Subordinated Debentures
is each successive period from and including the immediately preceding
Interest Payment Date (or the date of original issuance, in the case of the
initial interest period) to but excluding the applicable Interest Payment
Date. ____________________, as Calculation Agent (the "Calculation Agent"),
will calculate the Interest Rate for each interest period based on LIBOR
determined as of two London Business Days (defined as any day, other than a
Saturday or Sunday, on which banks are open for business in London) prior to
the first day of such interest period (each, a "Determination Date").
"LIBOR" means, with respect to an interest period relating to an Interest
Payment Date (in the following order of priority):
(1) the rate (expressed as a percentage per annum) for Eurodollar
deposits having a _____-month maturity that appears on Telerate Page
3750 as of 11:00 a.m. (London time) on the related Determination Date;
(2) if such rate does not appear on Telerate page 3750 as of 11:00
a.m. (London time) on the related Determination Date, LIBOR will be the
arithmetic mean (if necessary rounded upwards to the nearest whole
multiple of 0.00001%) of the rates (expressed as percentages per annum)
for Eurodollar deposits having a _____-month maturity that appear on
Reuters Monitor Money Rates Page LIBO ("Reuters Page LIBO") as of 11:00
a.m. (London time) on such Determination Date;
(3) if such rate does not appear on Reuters Page LIBO as of 11:00
a.m. (London time) on the related Determination Date, the Calculation
Agent will request the principal London offices of four leading banks in
the London interbank market to provide such banks' offered quotations
(expressed as percentages per annum) to prime banks in the London
interbank market for Eurodollar deposits having a _____-month maturity
as of 11:00 a.m. (London time) on such Determination Date and, if at
least two quotations are so provided, LIBOR will be the arithmetic mean
(if necessary rounded upwards to the nearest whole multiple of 0.00001%)
of such quotations;
(4) if fewer than two such quotations are provided as requested in
clause (3) above, the Calculation Agent will request four major New York
City banks to provide such banks' offered quotations (expressed as
percentages per annum) to leading European banks for loans in
Eurodollars having a _____-month maturity as of 11:00 a.m. (London time)
on the related Determination Date and, if at least two such quotations
are so provided, LIBOR will be the arithmetic mean (if necessary rounded
upwards to the nearest whole multiple of 0.00001%) of such quotations;
and
(5) if fewer than two such quotations are provided as requested in
clause (4) above, LIBOR will be LIBOR as determined on the immediately
preceding Determination Date.
If the rate for Eurodollar deposits having a _____-month maturity that
initially appears on Telerate Page 3750 or Reuters Page LIBO, as the case may
be, as of 11:00 a.m. (London time) on the related Determination Date is
superseded on Telerate Page 3750 or Reuters Page LIBO, as the case may be, by
a corrected rate before 12:00 noon (London time) on such Determination Date,
such corrected rate will be the applicable LIBOR for such Determination Date.
Absent manifest error, the Calculation Agent's determination of LIBOR
and its calculation of the applicable Interest Rate for each interest period
will be final and binding. Investors may obtain the interest rates for the
current and preceding interest period by writing or calling the
__________________________ of the Calculation Agent at (INSERT ADDRESS)
(telephone _____________________).)
FORM, REGISTRATION AND TRANSFER
If the Junior Subordinated Debentures are distributed to the holders of
the Trust Securities, the 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 Junior Subordinated
Debentures are expected to be substantially similar to those in effect for
the 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 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 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 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 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 Junior Subordinated
Debenture will be made to the Person in whose name such 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 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 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 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 __
consecutive _______ 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 (applicable)
Interest Rate, compounded _______, 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 Federal Income Tax
Consequences--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 __ consecutive _________ 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 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 ____________, 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
(100% of the principal amount of the Junior Subordinated Debentures so
prepaid) (the percentage of the outstanding principal amount of the Junior
Subordinated Debentures specified below so prepaid), plus accrued interest
thereon to the date of prepayment (if redeemed during the 12-month period
beginning _____________ of the years indicated below:)
<TABLE>
<CAPTION>
[Year] [Percentage]
---- ----------
<S> <C>
</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 the Junior Subordinated
Debentures (or (ii) the sum, as determined by the Quotation Agent, of the
present values of the remaining scheduled payments of principal and the
interest thereon discounted to the prepayment date on a ___________ basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate), plus 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 which pronouncement or decision is announced on or after
____________ __, 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) the 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 which pronouncement or
decision is announced on or after _____________ __, 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 _________________ 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) ____% if such
prepayment date occurs on or prior to _______________ and (ii) _____% 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 Junior Subordinated
Debentures.]
["Quotation Agent" means the Reference Treasury Dealer appointed by the
Corporation. "Reference Treasury Dealer" means: (i) _______________ 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 Quotation" 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 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 such 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
Date, 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) on 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 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 principal of the Junior Subordinated Debentures on
the due date, a holder of 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 Capital Securities outstanding. If the right to bring a Direct Action
is removed, the Trust may become subject to the reporting obligations under
the Exchange Act. 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 (or premium, if
any) or 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.
The holders of the 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 Junior Subordinated Debentures unless there
shall have been an Event of Default under the Trust Agreement. See
"Description of 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 the 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 issued thereunder 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, (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 and (iii) all trade accounts payable arising in the ordinary
course of business.
"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 Indenture places no limitation on the amount of secured or unsecured
debt, including Senior Indebtedness, that may be incurred by the Corporation
or its subsidiaries. The Corporation and its subsidiaries expect from time
to time to incur additional indebtedness, including Senior Indebtedness.
GOVERNING LAW
The Indenture and the 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
The Debenture Trustee is 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 GUARANTEE
The Guarantee will be executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Capital Securities for the
benefit of the holders from time to time of the Capital Securities. The Bank
of New York will act as indenture trustee ("Guarantee Trustee") under the
Guarantee. The Guarantee is qualified as an indenture under the Trust
Indenture Act. The Guarantee Trustee will act as the Guarantee Trustee for
the purposes of compliance with the Trust Indenture Act and will hold the
Guarantee for the benefit of the holders of the Capital Securities. This
summary of certain terms and provisions of the 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 Guarantee, including the definitions therein of
certain terms, and those made a part of the Guarantee by 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 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 Capital Securities, to the extent not paid by or on behalf of
the Trust (the "Guarantee Payments"), will be subject to the Guarantee: (i)
any accumulated and unpaid Distributions required to be paid on 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
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 (unless the
Junior Subordinated Debentures are distributed to holders of the Capital
Securities), the lesser of (a) the Liquidation Distribution and (b) the
amount of assets of the Trust remaining available for distribution to holders
of 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 Capital Securities or by causing the Trust
to pay such amounts to such holders.
The Corporation will, through the Guarantee, the Trust Agreement, the
Junior Subordinated Debentures and the Indenture, taken together, fully,
irrevocably and unconditionally guarantee all of the Trust's obligations
under the 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 Capital Securities. See "Relationship Among
the Capital Securities, the Junior Subordinated Debentures and the
Guarantee."
STATUS OF THE GUARANTEE
The 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 Junior Subordinated Debentures, except in
the case of a bankruptcy or insolvency proceeding in respect of the
Corporation, in which case the Guarantee will rank subordinate and junior in
right of payment to all liabilities (other than Other Guarantees) of the
Corporation. The Guarantee will rank pari passu with all Other Guarantees
issued by the Corporation.
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 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 the Junior
Subordinated Debentures--General." The Guarantee does not limit the
incurrence or issuance of debt of the Corporation's subsidiaries.
The 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 Guarantee
without first instituting a legal proceeding against any other person or
entity). The Guarantee will be held for the benefit of the holders of the
Capital Securities. The 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 Capital Securities of the Junior
Subordinated Debentures. The 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 Capital Securities (in which case no vote or
consent will be required), the Guarantee may not be amended without the prior
approval of the holders of a majority of the Liquidation Amount of such
outstanding Capital Securities. The manner of obtaining any such approval
will be as set forth under "Description of the Capital Securities--Voting
Rights; Amendment of the Trust Agreement." All guarantees and agreements
contained in the Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Corporation and shall inure to
the benefit of the holders of the Capital Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the 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 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 or power
conferred upon the Guarantee Trustee under the Guarantee.
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.
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 Guarantee.
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 Guarantee, will
undertake to perform only such duties as are specifically set forth in the
Guarantee and, after default with respect to the 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 Guarantee at the request of any holder of the Capital
Securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the applicable Redemption Price of the Capital Securities,
upon full payment of the Liquidation Amount payable upon liquidation of the
Trust or upon distribution of Junior Subordinated Debentures to the holders
of the Capital Securities. The Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of the
Capital Securities must restore payment of any sums paid under the Capital
Securities or the Guarantee.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the 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 Guarantee."
Taken together, the Corporation's obligations under the Junior Subordinated
Debentures, the Indenture, the Trust Agreement and the Guarantee will
provide, in the aggregate, a full, irrevocable and unconditional guarantee of
payments of Distributions and other amounts due on the 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 Capital Securities. If and to the extent that the Corporation does
not make the required payments on the Junior Subordinated Debentures, the
Trust will not have sufficient funds to make the related payments, including
Distributions, on the Capital Securities. The 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 Capital
Securities is to institute a Direct Action. The obligations of the
Corporation under the Guarantee will rank 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 Junior Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Capital Securities, primarily
because: (i) the aggregate principal amount or Prepayment Price of the Junior
Subordinated Debentures will be equal to the sum of the Liquidation Amount or
Redemption Price, as applicable, of the Capital Securities and related Common
Securities; (ii) the Interest Rate and interest and other payment dates on
the Junior Subordinated Debentures will match the Distribution Rate and
Distribution and other payment dates for the Trust 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
such Trust Securities; and (iv) the Trust Agreement will provide 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 CAPITAL SECURITIES
A holder of any Capital Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the 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 will provide that no payments may be made in respect of the 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 Junior Subordinated Debentures would constitute an Event
of Default under the Trust Agreement.
LIMITED PURPOSE OF THE TRUST
The Capital Securities will represent beneficial interests in the Trust,
and 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. A principal
difference between the rights of a holder of a Capital Security and a holder
of a Junior Subordinated Debenture is that a holder of a Junior Subordinated
Debenture will be entitled to receive from the Corporation the principal
amount of (and premium, if any) and interest on Junior Subordinated
Debentures held, while a holder of Capital Securities is entitled to receive
Distributions from the Trust (or, in certain circumstances, from the
Corporation under the 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 Capital Securities--Liquidation of
the Trust and Distribution of Junior Subordinated Debentures." Upon any
voluntary or involuntary liquidation or bankruptcy of the Corporation, the
Property Trustee, as holder of the 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 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 Capital Securities and a holder of 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 FEDERAL INCOME TAX CONSEQUENCES
GENERAL
In the opinion of Brown & Wood LLP, counsel to the Corporation and the
Trust ("Tax Counsel"), the following is a summary of certain material United
States federal income tax consequences of the purchase, ownership and
disposition of Capital Securities held as capital assets by a holder who
purchases such Capital Securities upon initial issuance. 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 promulgated thereunder, the administrative and judicial
interpretations thereof, as of the date hereof, all of which are subject to
change, possibly on a retroactive basis.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
In connection with the issuance of the Junior Subordinated Debentures,
Tax Counsel will render 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 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 Capital Securities, Tax Counsel
will render 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 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.
Prospective investors should be aware that 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, 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. 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
Capital Securities"), the Junior Subordinated Debentures may be prepaid for
cash and the proceeds of such prepayment 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 would 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 (including a redemption of such
Capital Securities by the Corporation) 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 includible 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 Taxpayer Relief Act of 1997 reduces the maximum rates on long-term
capital gains recognized on capital assets held by individual taxpayers for
more than eighteen months as of the date of disposition to 20% (and would
further reduce the maximum rates on such gains in the year 2001 and
thereafter for certain individual taxpayers who meet specified conditions).
Gain recognized by individual taxpayers on assets held more than twelve but
not more than eighteen months continue to be taxed at a 28% rate.
Prospective investors should consult their tax advisors concerning these tax
law changes.
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.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "U.S. 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 (i) a citizen or individual
resident (or is treated as a citizen or individual resident) of the United
States for federal income tax purposes, (ii) 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 state thereof
or the District of Columbia (unless, in the case of a partnership, Treasury
regulations provide otherwise), (iii) an estate the income of which is
includible in its gross income for federal income tax purposes without regard
to its source or (iv) a trust if, and only if, (a) a court within the United
States is able to exercise primary supervision over the administration of the
trust and (b) one or more United States persons have the authority to control
all substantial decisions of the trust). Notwithstanding the preceding
sentence, to the extent provided in Treasury regulations, certain trusts in
existence on August 20, 1996, and treated as United States persons prior to
such date, that elect to continue to be treated as United States persons will
also be a U.S. Holder.
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 U.S. 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 U.S. 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 U.S. 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.
NEW WITHHOLDING REGULATIONS
On October 6, 1997, the Treasury Department issued new regulations (the
"New Regulations") which make certain modifications to the withholding,
backup withholding and information reporting rules described above. The New
Regulations attempt to unify certification requirements and modify reliance
standards. The New Regulations will generally be effective for payments made
after December 31, 1998, subject to certain transition rules. Prospective
investors are urged to consult their own tax advisors regarding the New
Regulations.
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 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 Capital Securities with assets of any Plan
should consult with its counsel. The purchase and/or holding of 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 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 96-23 (an
exemption for certain transactions determined by an in-house manager). In
addition, a Plan fiduciary considering the purchase of 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
purchase 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 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 Junior
Subordinated Debentures, the Property Trustee will have only limited
custodial and ministerial authority with respect to Trust assets.)
UNDERWRITING
Subject to the terms and conditions set forth in the Purchase Agreement
(the "Purchase Agreement") among the Corporation, the Trust and
________________________________________ (collectively, the "Underwriters"),
the Corporation and the Trust have agreed that the Trust will sell to the
Underwriters, and the Underwriters have agreed, severally and not jointly, to
purchase from the Trust, the respective number of Capital Securities set
forth below opposite their respective names.
Number of
Underwriter Capital Securities
----------- ------------------
Total. . . . . . . . . . . .
The Underwriters propose to offer the Capital Securities initially at
the price to public set forth on the cover of this Prospectus and to certain
dealers at such price less a concession of not more than $___ per Capital
Security. The Underwriters may allow and such dealers may reallow a
concession of not more than $___ per Capital Security to certain other
dealers. After the initial offering, the price to public, concession and
reallowance may be changed.
The Purchase Agreement provides that the obligation of the Underwriters
to pay for and accept delivery of the Capital Securities is subject to
certain conditions, including delivery of certain legal opinions by counsel
for the Underwriters.
In view of the fact that the proceeds of the sale of the Capital
Securities will be invested in the Junior Subordinated Debentures, the
Purchase Agreement provides that the Corporation will pay, as compensation to
the Underwriters, an amount of $____ per Capital
Security.
(The Capital Securities constitute a new issue of securities with no
established trading market. The Underwriters have advised the Corporation
and the Trust that they intend to make a market in the Capital Securities,
but they are not obligated to do so, and any such market making may be
discontinued at any time without notice. No assurance can be given as to the
development or liquidity of any trading market for the Capital Securities.
Because the National Association of Securities Dealers, Inc. ("NASD") is
expected to view the Capital Securities offered hereby as interests in a
direct participation program, the offering is being made in compliance with
Rule 2810 of the NASD's Conduct Rules. Offers and sales of Capital
Securities will be made only to (i) "qualified institutional buyers," as
defined in Rule 144A under the Securities Act or (ii) institutional
"accredited investors," as defined in Rule 501(a)(1), (2) or (3) of
Regulation D under the Securities Act, for whom an investment in the Capital
Securities is appropriate. The Underwriters may not confirm sales to any
accounts over which they exercise discretionary authority without the prior
written approval of the transaction by the customer.)
(The Capital Securities will be a new issue of securities and have been
authorized for listing on the __________________, subject to official notice
of issuance. Trading of the Capital Securities is expected to commence
within a 30-day period after the initial delivery thereof. In order to meet
one of the requirements for listing the Capital Securities on the
_________________, the Underwriters have undertaken to sell the Capital
Securities to a minimum of 400 beneficial owners. The Underwriters have
advised the Corporation and the Trust that they intend to make a market in
the Capital Securities prior to the commencement of trading on the
__________________, but they are not obligated to do so, and any such market
making may be discontinued at any time without notice. No assurance can be
given as to the development or liquidity of any trading market for the
Capital Securities.)
The Corporation and the Trust have agreed in the Purchase Agreement
that, subject to certain conditions, prior to the settlement of the Capital
Securities under the Purchase Agreement, neither will offer, sell, contract
to sell or otherwise dispose of any securities that are substantially similar
to the Capital Securities or that are convertible into or exchangeable for,
or otherwise represent a right to acquire, any such securities, except in the
offering or with the prior written consent of ______________ (the
"Representative").
In order to facilitate the offering of the Capital Securities, the
Underwriters may engage in transactions that stabilize, maintain or otherwise
affect the price of the Capital Securities. Specifically, the Underwriters
may overallot in connection with the offering, creating a short position in
the Capital Securities for their own account. In addition, to cover
overallotments or to stabilize the price of the Capital Securities, the
Underwriters may bid for, and purchase, the Capital Securities in the open
market. Finally, the underwriting syndicate may reclaim selling concessions
allowed to an underwriter or a dealer for distributing the Capital Securities
in the offering, if the syndicate repurchases previously distributed Capital
Securities in transactions to cover syndicate short positions, in
stabilization transactions or otherwise. Any of these activities may
stabilize or maintain the market price of the Capital Securities above
independent market levels. The Underwriters are not required to engage in
these activities, and may end any of these activities at any time.
None of the Corporation, the Trust or any of the Underwriters makes any
representation or prediction as to the direction or magnitude of any effect
that the transactions described above may have on the price of the Capital
Securities. In addition, none of the Corporation, the Trust or any of the
Underwriters makes any representation that the Representative will engage in
such transactions or that such transactions, once commenced, will not be
discontinued without notice.
The Corporation and the Trust have agreed to indemnify the Underwriters
and certain other persons against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments the Underwriters may
be required to make in respect thereof.
(BancBoston Securities Inc., one of the Underwriters, is a subsidiary of
the Corporation. Pursuant to Rule 2720 of the Conduct Rules of the NASD,
when an NASD member, such as BancBoston Securities Inc., participates in the
distribution of an affiliated company's securities, the offering must be
conducted in accordance with the applicable provisions of Rule 2720. The
Corporation and the Trust are considered to be "affiliates" (as such term is
defined in Rule 2720) of BancBoston Securities Inc. Accordingly, the offer
and sale of any Capital Securities by BancBoston Securities Inc. will comply
with the requirements of Rule 2720 regarding the distributions of securities
of affiliates. Pursuant to Rule 2720(1), no NASD member participating in
offers and sales of the Capital Securities may execute a transaction in the
Capital Securities in a discretionary account without specific prior written
approval of the member's customer.)
Any or all of the Underwriters (have in the past and) may (in the
future) serve as a financial advisor to the Corporation.
VALIDITY OF SECURITIES
The validity of the Capital Securities, the Guarantee and the Junior
Subordinated Debentures will be passed upon for the Corporation and the Trust
by Brown & Wood LLP, New York, New York and for the Underwriters by Skadden,
Arps, Slate, Meagher & Flom LLP, New York, New York. Certain matters
relating to United States federal income tax considerations will be passed
upon for the Corporation and the Trust by Brown & Wood LLP, New York, New
York.
EXPERTS
The consolidated financial statements of the Corporation and subsidiaries,
included by reference into the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1996, have been incorporated herein by reference
in reliance upon the report, which report includes an explanatory paragraph
that the consolidated financial statements of BayBanks, Inc., as of December
31, 1995 and 1994 were audited by other auditors, set forth therein of
Coopers & Lybrand L.L.P., independent auditors, and upon the authority of
such firm as experts in accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution
of the securities being registered, other than underwriting compensation,
are:
Securities Act Registration Fee................................. $147,500
Printing and Engraving Expenses................................. 10,000
Legal Fees and Expenses......................................... 120,000
Accounting Fees and Expenses.................................... 70,000
Trustee Expenses................................................ 12,000
Rating Agency Fees and Expenses................................. 362,500
Miscellaneous................................................... 8,000
-------
Total...................................................... $730,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 67 of Chapter 156B of the Massachusetts General Laws authorizes
a corporation to indemnify any director, officer, employee or other agent of
the corporation to whatever extent specified in or authorized by (i) the
articles of organization, (ii) a by-law adopted by the stockholders or
(iii) a vote adopted by the holders of a majority of the shares of stock
entitled to vote on the election of directors.
The Corporation's By-laws provide indemnity to the Corporation's
directors and officers in such capacity or as directors or officers of a
wholly-owned subsidiary of the Corporation, and to directors of wholly-owned
subsidiaries of the Corporation, for liability resulting from judgments,
fines, expenses or settlement amounts incurred in connection with any action,
including an action by or in the right of the Corporation, brought against
such person in such capacity. Under Massachusetts law and the By-laws, no
indemnification may be provided for any person with respect to any matter as
to which he or she shall have been adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that his or her action was in
the best interest of the Corporation or of such subsidiary. The By-laws also
provide that, with respect to any matter disposed of by a compromise payment
by such director or officer pursuant to a consent decree or otherwise, no
indemnification shall be provided unless such compromise shall be ordered by
a court or shall be approved as being in the best interest of the
Corporation, after notice that it involves such indemnification: (a) by a
disinterested majority of the directors then in office or (b) by a majority
of the disinterested directors then in office, provided that there has been
obtained an opinion in writing of independent counsel to the effect that such
person does not appear not to have acted in good faith in the reasonable
belief that his or her action was in the best interests of the Corporation or
(c) by the holders of a majority of the outstanding stock at the time
entitled to vote for directors, exclusive of any stock owned by any
interested director or officer. Under Massachusetts law, a court may uphold
indemnification in connection with a suit in which there is a recovery or by
in the right of a corporation.
The By-laws also provide for indemnification for all other officers of
the Corporation's wholly-owned subsidiaries to the extent authorized by the
Board of Directors in each individual case, based on the same statutory
standard set forth in the preceding paragraph. Where such a person is wholly
successful in defending the claim, he or she shall be entitled to
indemnification. Directors and officers of other subsidiaries and employees
and agents of the Corporation and any subsidiaries may be indemnified as
determined by the Board from time to time.
In addition, as permitted under Massachusetts law, the Corporation
maintains liability insurance covering directors and officers of the
Corporation and its subsidiaries.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT
1 Form of Purchase Agreement*
4.1 Form of Indenture of BankBoston Corporation relating to the
Junior Subordinated Debentures*
4.2 Form of Junior Subordinated Debenture (included as Exhibit A to
Exhibit 4.1)*
4.3 Certificate of Trust of BankBoston Capital Trust IV*
4.4 Declaration of Trust of BankBoston Capital Trust IV*
4.5 Certificate of Trust of BankBoston Capital Trust V*
4.6 Declaration of Trust of BankBoston Capital Trust V*
4.7 Form of Amended and Restated Declaration of Trust for each Trust*
4.8 Form of Capital Security Certificate for each Trust (included as
Exhibit D to Exhibit 4.7)*
4.9 Form of Guarantee of BankBoston Corporation relating to the
Capital Securities*
5.1 Opinion and consent of Brown & Wood LLP, special counsel to
BankBoston Corporation as to legality of the Junior Subordinated
Debentures and the Guarantees to be issued by BankBoston
Corporation*
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom (Delaware),
special Delaware counsel to each Trust, as to legality of the
Capital Securities to be issued by each Trust*
8 Opinion of Brown & Wood LLP, special tax counsel, as to certain
federal income tax matters*
12.1 Computation of BankBoston Corporation's consolidated ratio of
earnings to fixed charges (excluding interest on deposits)
(Incorporated by reference to Exhibit 12(a) to the
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997 of BankBoston Corporation)
12.2 Computation of ratio of earnings to fixed charges (including
interest on deposits) (Incorporated by reference to Exhibit
12Ib) to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997 of BankBoston Corporation)
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Brown & Wood LLP (included in Exhibits 5.1 and 8)*
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom (Delaware)
(included in Exhibit 5.2)*
24 Power of Attorney of certain officers and directors of
BankBoston Corporation
25.1 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Indenture of BankBoston Corporation
relating to BankBoston Capital Trust IV
25.2 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Amended and Restated Declaration of
Trust of BankBoston Capital Trust IV
25.3 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Guarantee of BankBoston Corporation
for the benefit of the holders of the Capital Securities of
BankBoston Capital Trust IV
25.4 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Indenture of BankBoston Corporation
relating to BankBoston Capital Trust V
25.5 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Amended and Restated Declaration of
Trust of BankBoston Capital Trust V
25.6 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Guarantee of BankBoston Corporation
for the benefit of the holders of the Capital Securities of
BankBoston Capital Trust V
- -----------------------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS
Each of the undersigned Registrants hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this registration statement: (i) to include any prospectus
required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the
prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in
the information set forth in the registration statement (notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement); and (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement; provided, however, that paragraphs
(1)(i) and (1)(ii) herein do not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by each of the
undersigned Registrants pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration
statement; (2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and (3) to remove from registration by
means of a post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
Each of the undersigned Registrants hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of a
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of each
undersigned Registrant pursuant to the foregoing provisions, or otherwise,
each Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by each
undersigned Registrant of expenses incurred or paid by a director, officer of
controlling person of each Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, each
Registrant will, unless in the opinion of its counsel the matter has been
settled by the controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Corporation
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, and Commonwealth of Massachusetts, on the
26th day of February, 1998.
BANKBOSTON CORPORATION
By /s/ GARY A. SPIESS
------------------------------------------
(Gary A. Spiess)
(General Counsel and Clerk)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ CHARLES K. GIFFORD* Chairman and Chief Executive February 26, 1998
- --------------------------- Officer and Director (Chief
(Charles K. Gifford) Executive Officer)
/s/ HENRIQUE DE CAMPOS President and Chief February 26, 1998
MEIRELLES* Operating Officer and
- --------------------------- Director
(Henrique de Campos
Meirelles)
/s/ SUSANNAH M. SWIHART* Chief Financial Officer and February 26, 1998
- --------------------------- Treasurer (Chief Financial
(Susannah M. Swihart) Officer)
/s/ ROBERT T. JEFFERSON* Comptroller (Chief February 26, 1998
- --------------------------- Accounting Officer)
(Robert T. Jefferson)
/s/ WAYNE A BUDD* Director February 26, 1998
- ---------------------------
(Wayne A. Budd)
/s/ JOHN A. CERVIERI JR.* Director February 26, 1998
- ---------------------------
(John A. Cervieri Jr.)
/s/ WILLIAM F. CONNELL* Director February 26, 1998
- ---------------------------
(William F. Connell)
/s/ GARY L. COUNTRYMAN* Director February 26, 1998
- ---------------------------
(Gary L. Countryman)
/s/ WILLIAM M. CROZIER, JR.* Director February 26, 1998
- ---------------------------
(William M. Crozier, Jr.)
/s/ ALICE F. EMERSON* Director February 26, 1998
- ---------------------------
(Alice F. Emerson)
/s/ THOMAS J. MAY* Director February 26, 1998
- ---------------------------
(Thomas J. May)
/s/ DONALD F. McHENRY* Director February 26, 1998
- ---------------------------
(Donald F. McHenry)
/s/ PAUL C. O'BRIEN* Director February 26, 1998
- ---------------------------
(Paul C. O'Brien)
/s/ THOMAS R. PIPER* Director February 26, 1998
- ---------------------------
(Thomas R. Piper)
/s/ FRANCENE S. RODGERS* Director February 26, 1998
- ---------------------------
(Francene S. Rodgers)
/s/ JOHN W. ROWE* Director February 26, 1998
- ---------------------------
(John W. Rowe)
/s/ GLENN P. STREHLE* Director February 26, 1998
- ---------------------------
(Glenn P. Strehle)
/s/ WILLIAM C. VAN FAASEN* Director February 26, 1998
- ---------------------------
(William C. Van Faasen)
/s/ THOMAS B. WHEELER* Director February 26, 1998
- ---------------------------
(Thomas B. Wheeler)
/s/ ALFRED M. ZEIEN* Director February 26, 1998
- ---------------------------
(Alfred M. Zeien)
</TABLE>
* By: /s/ GARY A. SPIESS
-------------------------
ATTORNEY-IN-FACT
Pursuant to the requirements of the Securities Act, BankBoston Capital
Trust IV certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston, and Commonwealth of
Massachusetts, on the 26th day of February, 1998.
BANKBOSTON CAPITAL TRUST IV
By: /s/ ROBERT T. JEFFERSON
------------------------------------------
Robert T. Jefferson,
as Administrative Trustee
By: /s/ CRAIG V. STARBLE
------------------------------------------
Craig V. Starble,
as Administrative Trustee
By: /s/ KATHLEEN M. McGILLYCUDDY
------------------------------------------
Kathleen M. McGillycuddy,
as Administrative Trustee
Pursuant to the requirements of the Securities Act, BankBoston Capital
Trust V certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, and Commonwealth of Massachusetts, on the
26th day of February, 1998.
BANKBOSTON CAPITAL TRUST V
By: /s/ ROBERT T. JEFFERSON
------------------------------------------
Robert T. Jefferson,
as Administrative Trustee
By: /s/ CRAIG V. STARBLE
------------------------------------------
Craig V. Starble,
as Administrative Trustee
By: /s/ KATHLEEN M. McGILLYCUDDY
------------------------------------------
Kathleen M. McGillycuddy,
as Administrative Trustee
EXHIBIT INDEX
PAGE EXHIBIT NO. DESCRIPTION
1 Form of Purchase Agreement*
4.1 Form of Indenture of BankBoston Corporation relating to the
Junior Subordinated Debentures*
4.2 Form of Junior Subordinated Debenture (included as Exhibit A to
Exhibit 4.1)*
4.3 Certificate of Trust of BankBoston Capital Trust IV*
4.4 Declaration of Trust of BankBoston Capital Trust IV*
4.5 Certificate of Trust of BankBoston Capital Trust V*
4.6 Declaration of Trust of BankBoston Capital Trust V*
4.7 Form of Amended and Restated Declaration of Trust for each Trust*
4.8 Form of Capital Security Certificate for each Trust (included as
Exhibit D to Exhibit 4.7)*
4.9 Form of Guarantee of BankBoston Corporation relating to the
Capital Securities*
5.1 Opinion and consent of Brown & Wood LLP, special counsel to
BankBoston Corporation as to legality of the Junior Subordinated
Debentures and the Guarantees to be issued by BankBoston
Corporation*
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom (Delaware),
special Delaware counsel to each Trust, as to legality of the
Capital Securities to be issued by each Trust*
8 Opinion of Brown & Wood LLP, special tax counsel, as to certain
federal income tax matters*
12.1 Computation of BankBoston Corporation's consolidated ratio of
earnings to fixed charges (excluding interest on deposits)
(Incorporated by reference to Exhibit 12(a) to the Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997
of BankBoston Corporation)
12.2 Computation of ratio of earnings to fixed charges (including
interest on deposits) (Incorporated by reference to Exhibit
12(b) to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997 of BankBoston Corporation)
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Brown & Wood LLP (included in Exhibits 5.1 and 8)*
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom (Delaware)
(included in Exhibit 5.2)*
24 Power of Attorney of certain officers and directors of
BankBoston Corporation
25.1 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Indenture of BankBoston Corporation
relating to BankBoston Capital Trust IV
25.2 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Amended and Restated Declaration of
Trust of BankBoston Capital Trust IV
25.3 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Guarantee of BankBoston Corporation
for the benefit of the holders of Capital Securities of
BankBoston Capital Trust IV
25.4 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Indenture of BankBoston Corporation
relating to BankBoston Capital Trust V
25.5 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Amended and Restated Declaration of
Trust of BankBoston Capital Trust V
25.6 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Guarantee of BankBoston Corporation
for the benefit of the holders of the Capital Securities of
BankBoston Capital Trust V
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* To be filed by amendment.
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No dealer, salesman or any other
individual has been authorized to
give any information or to make any $___,000,000
representations other than those
contained or incorporated by
reference in this Prospectus in
connection with the offer made by BANKBOSTON
this Prospectus and, if given or CAPITAL TRUST ___
made, such information or
representations must not be relied
upon as having been authorized by
the Corporation, the Trust or the Capital Securities
Underwriters. Neither the delivery (Liquidation Amount $_____ per
of this Prospectus nor any sale Capital Security)
made hereunder shall under any
circumstance create an implication
that there has been no change in fully and unconditionally
the affairs of the Corporation or guaranteed, as described herein, by
the Trust since the date hereof.
This Prospectus does not constitute
an offer or solicitation by anyone BANKBOSTON
in any jurisdiction in which such CORPORATION
offer or solicitation is not
authorized or in which the person
making such offer or solicitation
is not qualified to do so or to
anyone to whom it is unlawful to PROSPECTUS
make such offer or solicitation.
TABLE OF CONTENTS
Page
Available Information . . . . . . . (NAMES OF UNDERWRITERS)
Incorporation of Certain Documents
by Reference . . . . . . . . . .
Prospectus Summary . . . . . . . .
Risk Factors . . . . . . . . . . .
BankBoston Corporation . . . . . .
Use of Proceeds . . . . . . . . . .
Ratios of Earnings to Fixed Charges
BankBoston Capital Trust ___ . . .
Description of Capital Securities .
Description of Junior Subordinated
Debentures . . . . . . . . . . .
Description of Guarantee . . . . .
Relationship Among the Capital
Securities, the Junior
Subordinated Debentures
and the Guarantee . . . . . . . .
Certain Federal Income Tax
Consequences . . . . . . . . . . .
(ERISA Considerations ) . . . . .
Underwriting . . . . . . . . . . .
Validity of Securities . . . . . .
Experts . . . . . . . . . . . . . .
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