<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 28, 1994
REGISTRATION NO. 33-55555
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
FLEET FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
RHODE ISLAND 05-0341324
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
50 KENNEDY PLAZA
PROVIDENCE, RHODE ISLAND 02903
(401) 278-5800
(Address including zip code, and telephone number, including area code, of the
Registrant's principal executive offices)
WILLIAM C. MUTTERPERL, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
FLEET FINANCIAL GROUP, INC.
50 Kennedy Plaza
Providence, Rhode Island 02903
(401) 278-5880
(Names, addresses and telephone number of agent for service)
------------------------
Copies to:
<TABLE>
<S> <C>
LAURA N. WILKINSON, ESQ. B. ROBBINS KIESSLING, ESQ.
EDWARDS & ANGELL CRAVATH, SWAINE & MOORE
One Hospital Trust Plaza Worldwide Plaza, 825 Eighth Avenue
Providence, Rhode Island 02903 New York, New York 10019
(401) 274-9200 (212) 474-1000
</TABLE>
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
<TABLE>
CALCULATION OF REGISTRATION FEE
==================================================================================================================================
<CAPTION>
Proposed maximum Proposed maximum Amount of
Title of each class Amount to be offering price aggregate offering registration
of securities to be registered(1) registered per unit(2) price(3) fee
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities(5)................................. (4) (4) (4) (4)
Preferred Stock, par value $1.00 per share(6)(7)... (4) (4) (4) (4)
Depositary Shares(7)............................... (4) (4) (4) (4)
Common Stock, par value $1.00 per share(8)......... (4) (4) (4) (4)
Warrants(9)........................................ (4) (4) (4) (4)
- ----------------------------------------------------------------------------------------------------------------------------------
Total........................................... $1,126,900,000(10) 100% $1,126,900,000(10) N/A(11)
==================================================================================================================================
<FN>
(1) This Registration Statement also covers contracts which may be issued by the Registrant under which the counterparty may be
required to purchase Debt Securities, Preferred Stock, Depositary Shares or Warrants. Such contracts would be issued with the
Debt Securities, Preferred Stock, Depositary Shares and/or Warrants. In addition, any other securities registered hereunder
may be sold separately or as units with other securities registered hereunder.
(2) The proposed maximum offering price per unit will be determined from time to time by the Registrant in connection with the
issuance by the Registrant of the securities registered hereunder.
(3) The proposed maximum aggregate offering price has been estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933.
(4) Not applicable pursuant to General Instructions II.D. of Form S-3.
(5) Subject to note (10) below, there is being registered hereunder an indeterminate principal amount of Debt Securities.
(6) Subject to note (10) below, there is being registered hereunder an indeterminate number of shares of Preferred Stock as may be
sold, from time to time, by the Registrant.
(7) Subject to note (10) below, there is being registered hereunder an indeterminate number of Depositary Shares to be evidenced
by Depositary Receipts issued pursuant to a Deposit Agreement. In the event the Registrant elects to offer to the public
fractional interests in shares of Preferred Stock registered hereunder, Depositary Receipts will be distributed to those persons
purchasing such fractional interests and the shares of Preferred Stock will be issued to the Depositary under the Deposit
Agreement.
(8) Subject to note (10) below, there is being registered hereunder an indeterminate number of shares of Common Stock as may be
sold, from time to time, by the Registrant. There are also being registered hereunder an indeterminate number of shares of
Common Stock as shall be issuable upon conversion or redemption of Preferred Stock or Debt Securities registered hereunder.
Such Common Stock includes preferred share purchase rights.
(9) Subject to note (10) below, there is being registered hereunder an indeterminate amount and number of Warrants, representing
rights to purchase Debt Securities, Preferred Stock or Common Stock registered hereunder.
(10) In no event will the aggregate initial offering price of all securities issued from time to time pursuant to this Registration
Statement exceed $1,126,900,000 or the equivalent thereof in one or more foreign currencies, foreign currency units, or
composite currencies. If Debt Securities are issued at original issue discount, Fleet may issue such higher principal amount as
may be sold for an initial public offering price of up to $1,126,900,000 (less the dollar amount of any securities previously
issued hereunder), or the equivalent thereof in one or more foreign currencies, foreign currency units, or composite
currencies. The aggregate amount of Common Stock registered hereunder is further limited to that which is permissible
under Rule 415(a)(4) under the Securities Act of 1933. The securities registered hereunder may be sold separately or as units
with other securities registered hereunder.
(11) The registration fee of $172,414 was previously paid with the original filing of the Form S-3 relating to $500,000,000 of new
securities registered. The remaining amount of securities included in this amendment ($626,900,000) relate to Registration
Statement Nos. 33-50214 and 33-50216 (see below).
</TABLE>
Pursuant to Rule 429 of the rules and regulations of the Securities and
Exchange Commission under the Securities Act of 1933, as amended, the Prospectus
contained herein also relates to $181,900,000 of Debt Securities and Warrants
previously registered under Registration Statement No. 33-50216 and $445,000,000
of Preferred Stock previously registered under Registration Statement No.
33-50214, and this constitutes Post-Effective Amendment No. 1 to each such
Registration Statement.
------------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
===============================================================================
<PAGE> 2
INTRODUCTORY NOTE
This Registration Statement contains a form of Basic Prospectus relating to
the Securities and a form of Prospectus Supplement relating to the offering by
Fleet Financial Group, Inc. ("Fleet") of Senior Debt Securities. This Prospectus
Supplement relates only to such Senior Debt Securities, and is a form which may
be used, among others, by Fleet to offer its Securities under the Registration
Statement.
<PAGE> 3
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. THIS PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED OCTOBER 28, 1994
PROSPECTUS
COMMON STOCK, COMMON STOCK WARRANTS, PREFERRED STOCK, DEPOSITARY SHARES,
PREFERRED STOCK WARRANTS, DEBT SECURITIES AND DEBT WARRANTS
FLEET FINANCIAL GROUP, INC.
Fleet Financial Group, Inc., a Rhode Island corporation ("Fleet") may offer
from time to time (a) shares of Common Stock, par value $1.00 per share,
including the associated Preferred Share Purchase Rights (the "Common Stock"),
(b) shares of preferred stock, par value $1.00 per share (the "Preferred
Stock"), including, at its option, depositary shares (the "Depositary Shares")
evidenced by depositary receipts (the "Depositary Receipts") each representing a
fractional interest in such Preferred Stock, (c) warrants to purchase Common
Stock (the "Common Stock Warrants") or Preferred Stock (the "Preferred Stock
Warrants"), (d) debt securities (the "Debt Securities"), which may be either
senior (the "Senior Debt Securities") or subordinated (the "Subordinated Debt
Securities") in priority of payment, and (e) warrants to purchase Debt
Securities (the "Debt Warrants", together with the Common Stock Warrants and the
Preferred Stock Warrants, the "Warrants"), having a public offering price of up
to an aggregate of $1,126,900,000 (or the equivalent thereof if any of the
Securities are denominated in a foreign currency or a foreign currency unit,
such as European Currency Units ("ECU")). If Debt Securities are issued at
original issue discount, Fleet may issue such higher principal amount as may be
sold for an initial public offering price of up to $1,126,900,000 (less the
dollar amount of any securities previously issued hereunder), or the equivalent
thereof in one or more foreign currencies, foreign currency units, or composite
currencies. The Common Stock, Preferred Stock, Depositary Shares, Debt
Securities and Warrants (collectively, the "Securities") may be offered
separately or as units with other Securities, in separate series, in amounts and
at prices and terms to be set forth in an accompanying Prospectus Supplement (a
"Prospectus Supplement").
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in the accompanying Prospectus
Supplement, together with the terms of the offering of the Securities and the
initial price and net proceeds to Fleet from the sale thereof. The Prospectus
Supplement will include, with regard to the particular Offered Securities, the
following information: (i) in the case of Debt Securities, the specific
designation, priority, aggregate principal amount, denominations, currency or
currency unit for which Debt Securities may be purchased, currency or currency
unit in which the principal and any interest on Debt Securities is payable,
location of the offering, maturity, rate (which may be fixed or variable) and
time of payment of interest, if any, terms for redemption, if any, at the option
of Fleet or the holder, terms for sinking or purchase fund payments, if any,
whether any Debt Securities which are Subordinated Debt Securities will be
subordinated to other indebtedness of Fleet, the initial public offering price,
if any, of the Debt Securities, terms relating to temporary or permanent global
securities, special provisions relating to Debt Securities in bearer form,
provisions regarding registration of transfer or exchange, provisions relating
to the payment of any additional amounts, any conversion or exchange provisions
and provisions regarding original issue discount securities; (ii) in the case of
Preferred Stock, the specific number of shares, title, stated value and
liquidation preference of each share, issuance price, dividend rate (or method
of calculation), dividend payment dates, any redemption or sinking fund
provisions, any conversion or exchange provisions and whether fractional
interests in shares of Preferred Stock will be represented by Depositary Shares;
(iii) in the case of Common Stock, the specific number of shares and issuance
price for such shares; (iv) in the case of Warrants, the duration, offering
price, exercise price and detachability of any such warrants; and (v) in the
case of all Securities, whether such Securities will be offered separately or as
a unit with other Securities. The Prospectus Supplement will also contain
information, where applicable, about certain United States federal income tax
considerations relating to, and any listing on a securities exchange of, the
Securities covered by the Prospectus Supplement.
Fleet may sell Securities to or through underwriters or dealers, and also
may sell Securities directly to other purchasers or through agents. See "Plan of
Distribution". If any agents or underwriters are involved in the sale of any of
the Securities, their names, any applicable fee, commission, purchase price or
discount arrangements with them will be set forth, or will be calculable from
the information set forth, in the Prospectus Supplement. Fleet may also issue
contracts under which the counterparty may be required to purchase Debt
Securities, Preferred Stock, Depositary Shares or Warrants. Such contracts would
be issued with the Debt Securities, Preferred Stock, Depositary Shares and/or
Warrants in amounts, at prices and on terms to be set forth in the Prospectus
Supplement. Fleet may sell Securities in an offering within the United States
("United States Offering") or outside the United States ("International
Offering").
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALE OF OFFERED SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
THE SECURITIES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF
ANY BANK OR NONBANK SUBSIDIARY OF FLEET AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, BANK INSURANCE FUND OR ANY OTHER GOVERNMENT
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.
The date of this Prospectus is , 1994.
<PAGE> 4
AVAILABLE INFORMATION
Fleet is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Proxy statements, reports and other information
concerning Fleet can be inspected and copied at the Commission's office at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and the
Commission's Regional Offices in New York (Suite 1300, Seven World Trade Center,
New York, New York 10048) and Chicago (Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661), and copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Common
Stock is listed on the New York Stock Exchange. Reports, proxy material and
other information concerning Fleet also may be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005. This
Prospectus does not contain all the information set forth in the Registration
Statement and Exhibits thereto which Fleet has filed with the Commission under
the Securities Act of 1933, as amended (the "Act"), which may be obtained from
the Public Reference Section of the Commission at its principal office at 450
Fifth Street, N.W., Washington, D.C. 20549, upon payment of the prescribed fees,
and to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Fleet are incorporated
in this Prospectus by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1993.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31,
1994 and June 30, 1994 (as amended by a Form 10-Q/A dated October 26,
1994).
3. Current Reports on Form 8-K dated March 10, 1994, May 9, 1994,
August 15, 1994, September 7, 1994, October 19, 1994 and October 21, 1994.
4. The description of the Common Stock contained in a Registration
Statement filed by Industrial National Corporation (predecessor to Fleet)
on Form 8-B dated May 29, 1970, and any amendment or report filed for the
purpose of updating such description.
5. The description of the Preferred Share Purchase Rights contained in
Fleet's Registration Statement on Form 8-A dated November 29, 1990, and any
amendment or report filed for the purpose of updating such description.
Such incorporation by reference shall not be deemed to specifically
incorporate by reference the information referred to in Item 402(a)(8) of
Regulation S-K.
All documents filed with the Commission by Fleet pursuant to Sections 13,
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Securities offered hereby are
incorporated herein by reference and such documents shall be deemed to be a part
hereof from the date of filing of such documents. Any statement contained in
this Prospectus 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.
ANY PERSON RECEIVING A COPY OF THIS PROSPECTUS MAY OBTAIN, WITHOUT CHARGE,
UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OF THE DOCUMENTS INCORPORATED BY
REFERENCE HEREIN (OTHER THAN THE EXHIBITS TO SUCH DOCUMENTS). WRITTEN REQUESTS
SHOULD BE MAILED TO CORPORATE COMMUNICATIONS DEPARTMENT, FLEET FINANCIAL GROUP,
INC., 50 KENNEDY PLAZA, PROVIDENCE, RHODE ISLAND 02903. TELEPHONE REQUESTS MAY
BE DIRECTED TO (401) 278-5879.
2
<PAGE> 5
FLEET FINANCIAL GROUP, INC.
GENERAL
Fleet is a diversified financial services company organized under the laws
of the State of Rhode Island. At June 30, 1994, Fleet was the 17th largest
banking institution in the United States in terms of total assets, with total
assets of $48.2 billion, total deposits of $31.8 billion and stockholders'
equity of $3.5 billion.
Fleet is engaged in a general commercial banking and trust business
throughout the states of New York, Rhode Island, Connecticut, Massachusetts,
Maine and New Hampshire through its banking subsidiaries, Fleet Bank
("Fleet-NY"); Fleet National Bank ("Fleet-RI"); Fleet Bank, National Association
("Fleet-CT"); Fleet Bank of Massachusetts, National Association ("Fleet-MA");
Fleet Bank of Maine and Fleet Bank-NH.
Fleet provides, through its nonbanking subsidiaries, a variety of financial
services, including mortgage banking, asset-based lending, equipment leasing,
consumer finance, real estate financing, credit-related life and accident/health
insurance, securities brokerage services, investment banking, investment advice
and management, data processing and student loan servicing.
Fleet is a legal entity separate and distinct from its subsidiaries. The
ability of holders of debt and equity securities of Fleet, including the holders
of the Securities offered hereby, to benefit from the distribution of assets of
any subsidiary upon the liquidation or reorganization of such subsidiary is
subordinate to prior claims of creditors of the subsidiary except to the extent
that a claim of Fleet as a creditor may be recognized.
There are various statutory and regulatory limitations on the extent to
which banking subsidiaries of Fleet can finance or otherwise transfer funds to
Fleet or its nonbanking subsidiaries, whether in the form of loans, extensions
of credit, investments or asset purchases. Such transfers by any subsidiary bank
to Fleet or any nonbanking subsidiary are limited in amount to 10% of the bank's
capital and surplus and, with respect to Fleet and all such nonbanking
subsidiaries, to an aggregate of 20% of each such bank's capital and surplus.
Furthermore, loans and extensions of credit are required to be secured in
specified amounts and are required to be on terms and conditions consistent with
safe and sound banking practices.
In addition, there are regulatory limitations on the payment of dividends
directly or indirectly to Fleet from its banking subsidiaries. Under applicable
banking statutes, at June 30, 1994, Fleet's banking subsidiaries could have
declared additional dividends of approximately $528 million, of which $264
million could have been declared by Fleet-MA and Fleet-CT. Holders of Fleet's
dual convertible preferred stock are entitled to dividends equal to one-half of
the total dividends declared (after the first $15 million in dividends) to
Fleet, if any, by Fleet Banking Group, Inc. ("Fleet Banking Group"), a
wholly-owned subsidiary of Fleet and the holder of all of the outstanding common
stock of each of Fleet-MA and Fleet-CT. As of the date of the Prospectus
Supplement, Fleet Banking Group has not paid any dividends on its common stock
to Fleet. Federal and state regulatory agencies also have the authority to limit
further Fleet's banking subsidiaries' payment of dividends based on other
factors, such as the maintenance of adequate capital for such subsidiary bank.
Under the policy of the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board"), Fleet is expected to act as a source of financial
strength to each subsidiary bank and to commit resources to support such
subsidiary bank in circumstances where it might not do so absent such policy. In
addition, any subordinated loans by Fleet to any of the subsidiary banks would
also be subordinate in right of payment to deposits and obligations to general
creditors of such subsidiary bank. Further, the Crime Control Act of 1990
provides that in the event of the bankruptcy of Fleet, any commitment by Fleet
to its regulators to maintain the capital of a banking subsidiary will be
assumed by the bankruptcy trustee and entitled to a priority of payment.
For a discussion of various other regulatory matters, including the Federal
Deposit Insurance Corporation Improvement Act of 1991 (the "FDICIA") enacted in
December of 1991, and the cross-guaranty provisions imposed on Fleet's banking
subsidiaries by Section 206 of the Financial Institutions Reform, Recovery, and
Enforcement Act ("FIRREA"), see "Management's Analysis of Financial Statements
- -- Certain Regulatory Considerations" in the accompanying Prospectus Supplement.
The principal office of Fleet is located at 50 Kennedy Plaza, Providence,
Rhode Island 02903, telephone number (401) 278-5800.
3
<PAGE> 6
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
FIXED CHARGES AND DIVIDENDS ON PREFERRED STOCK
Fleet's consolidated ratios of earnings to fixed charges and earnings to
fixed charges and dividends on preferred stock were as follows for the years and
periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------
1994 1993 1992 1991 1990 1989
---------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding Interest on Deposits................. 2.80x 2.81x 2.22x 1.32x * 1.93x
Including Interest on Deposits................. 1.80 1.68 1.34 1.08 * 1.29
Ratio of Earnings to Fixed Charges and Dividends on
Preferred Stock:
Excluding interest on deposits................. 2.73x 2.67x 2.09x 1.31x * 1.91x
Including interest on deposits................. 1.79 1.66 1.33 1.08 * 1.29
</TABLE>
- ---------------
* Fixed charges exceeded earnings by $164 million (excluding interest on
deposits) and by $164 million (including interest on deposits) for the year
ended December 31, 1990. The sum of fixed charges and dividends on preferred
stock exceeded earnings by $164 million (excluding interest on deposits) and
by $164 million (including interest on deposits) for the year ended December
31, 1990.
For purposes of computing the consolidated ratios, earnings consist of
income before income taxes plus fixed charges (excluding capitalized interest)
and, where indicated, the pretax equivalents of dividends on preferred stock.
Fixed charges consist of interest on short-term debt and long-term debt
(including interest related to capitalized leases and capitalized interest) and
one-third of rent expense, which approximates the interest component of such
expense. In addition, where indicated, fixed charges include interest on
deposits.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, Fleet
intends to use the net proceeds from the sale of the Securities for general
corporate purposes, principally to extend credit to, or fund investments in, its
subsidiaries. The precise amounts and timing of extensions of credit to, and
investments in, such subsidiaries will depend upon the subsidiaries' funding
requirements and the availability of other funds. Pending such applications, the
net proceeds may be temporarily invested in marketable securities or applied to
the reduction of Fleet's short-term indebtedness. Based upon the historic and
anticipated future growth of Fleet and the financial needs of its subsidiaries,
Fleet may engage in additional financings of a character and amount to be
determined as the need arises.
4
<PAGE> 7
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will constitute either Senior Debt Securities or
Subordinated Debt Securities of Fleet. The Senior Debt Securities will be issued
under an indenture dated as of October 1, 1992 (the "Senior Indenture"), between
Fleet and The First National Bank of Chicago as Senior Trustee (the "Senior
Trustee"). The Subordinated Debt Securities will be issued under an indenture
dated as of October 1, 1992 (as supplemented by a First Supplemental Indenture
dated November 30, 1992, the "Subordinated Indenture"), between Fleet and The
First National Bank of Chicago as Subordinated Trustee (the "Subordinated
Trustee"). The Senior Indenture and Subordinated Indenture are collectively
referred to herein as the "Indentures". A copy of each of the Indentures are
exhibits to the Registration Statement of which this Prospectus forms a part.
The following description of Debt Securities relates to Debt Securities to be
issued in connection with either a United States Offering or an International
Offering, except, in the case of an International Offering, as otherwise
specified in the Prospectus Supplement relating thereto.
The following summaries of certain provisions of the Indentures do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Indentures, including the definitions
therein of certain terms. Wherever particular Sections or defined terms of the
Indentures are referred to, it is intended that such Sections or definitions
shall be incorporated herein by reference. The following sets forth certain
general terms and provisions of the Debt Securities to which any Prospectus
Supplement may relate. The particular terms of the Debt Securities offered by
any Prospectus Supplement and the extent, if any, to which such general
provisions may apply to the Debt Securities so offered, will be described in the
Prospectus Supplement relating to such Offered Securities.
Because Fleet is a holding company, its rights and the rights of its
creditors, including the Holders of the Debt Securities offered hereby, to
participate in the assets of any subsidiary upon the latter's liquidation or
reorganization will be subject to the prior claims of the subsidiary's creditors
except to the extent that Fleet may itself be a creditor with recognized claims
against the subsidiary.
GENERAL
The Debt Securities to be offered by this Prospectus are limited to the
amounts described on the cover of this Prospectus. Fleet expects from time to
time to incur additional indebtedness constituting Senior Indebtedness and Other
Financial Obligations (each as defined in the Subordinated Indenture). The
Indentures, however, do not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provide that Debt Securities may
be issued from time to time in one or more series. The Debt Securities will be
unsecured obligations of Fleet. Neither the Indentures nor the Debt Securities
will limit or otherwise restrict the amount of other indebtedness (including
Other Financial Obligations) which may be incurred or other securities which may
be issued by Fleet or any of its subsidiaries. The Senior Debt Securities will
rank on a parity with all other unsecured unsubordinated indebtedness of Fleet
while the indebtedness represented by the Subordinated Debt Securities will be
subordinated as described below under "Subordinated Debt Securities".
As used herein, Debt Securities shall include securities denominated in
U.S. dollars or, at the option of Fleet if so specified in the applicable
Prospectus Supplement, in any other currency, including composite currencies
such as the ECU. Debt Securities of a series may be issuable in individual
registered form without coupons, in the form of one or more global securities,
or, in bearer form with or without coupons. Such bearer securities will be
offered only to non-United States persons and to offices located outside of the
United States of certain United States financial institutions.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for the following terms, where
applicable, of the Debt Securities in respect of which this Prospectus is being
delivered: (1) the title of the Debt Securities; (2) the limit, if any, on the
aggregate principal amount or initial public offering price of the Debt
Securities; (3) the priority of payment of such Debt Securities; (4) the price
or prices (which may be expressed as a percentage of the aggregate principal
amount thereof) at which the Debt Securities will be issued; (5) the date or
dates on which the Debt Securities will mature; (6) the rate or rates (which may
be fixed or variable) per annum at which the Debt
5
<PAGE> 8
Securities will bear interest, if any, or the method of determining the same;
(7) the date from which such interest, if any, on the Debt Securities will
accrue, the date or dates on which such interest, if any, will be payable, the
date on which payment of such interest, if any, will commence and the Regular
Record Dates for such Interest Payment Dates, if any; (8) the extent to which
any of the Debt Securities will be issuable in temporary or permanent global
form and, if so, the identity of the depositary for such global Debt Security,
or the manner in which any interest payable on a temporary or permanent global
Debt Security will be paid; (9) the dates, if any, on which, and the price or
prices at which, the Debt Securities will, pursuant to any mandatory sinking
fund provisions, or may, pursuant to any optional sinking fund or to any
purchase fund provisions, be redeemed by Fleet, and the other detailed terms and
provisions of such sinking and/or purchase funds; (10) the date, if any, after
which, and the price or prices at which, the Debt Securities may, pursuant to
any optional redemption provisions, be redeemed at the option of Fleet or of the
Holder thereof and the other detailed terms and provisions of such optional
redemption; (11) the denomination or denominations in which such Debt Securities
are authorized to be issued; (12) the currency, currencies or units (including
ECU) in which the Debt Securities are denominated, which may be in United States
dollars, a foreign currency or units of two or more foreign currencies; (13) the
currency, currencies or units (including ECU) for which the Debt Securities may
be purchased and in which principal, premium, if any, and interest may be
payable; (14) whether any of the Debt Securities will be issued in bearer form
and, if so, any limitations on issuance of such bearer Debt Securities
(including exchange for registered Debt Securities of the same series); (15)
information with respect to book-entry procedures; (16) whether any of the Debt
Securities will be issued as Original Issue Discount Securities; (17) any index
used to determine the amount of payments of principal of, premium, if any, and
interest on such Debt Securities; (18) each office or agency where, subject to
the terms of the applicable Indenture, such Debt Securities may be presented for
registration of transfer or exchange; (19) whether any of the Debt Securities
will be subject to defeasance in advance of the Redemption Date or Stated
Maturity thereof; (20) whether the subordination provisions summarized below or
different subordination provisions, including a different definition of "Senior
Indebtedness", "Entitled Persons", "Existing Subordinated Indebtedness", or
"Other Financial Obligations", shall apply to the Debt Securities; (21) whether
any of the Debt Securities will be convertible or exchangeable into other
securities of Fleet and the terms of such conversion or exchange; and (22) any
other terms of the series (which will not be inconsistent with the provisions of
the applicable Indenture).
Special federal income tax and other considerations relating to Debt
Securities denominated in foreign currencies or units of two or more foreign
currencies will be described in the applicable Prospectus Supplement. In the
event Fleet offers Debt Securities denominated in foreign currencies or units of
two or more foreign currencies, an opinion with respect to tax matters and
consent of counsel will be filed in a Form 8-K or as an amendment to the
Registration Statement of which this Prospectus forms a part.
Debt Securities may be issued as Original Issue Discount Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) to be sold at a substantial discount below their principal
amount. In the event of an acceleration of the maturity of any Original Issue
Discount Security, the amount payable to the Holder of such Original Issue
Discount Security upon such acceleration will be determined in accordance with
the applicable Prospectus Supplement, the terms of such security and the
relevant Indenture, but will be an amount less than the amount payable at the
maturity of the principal of such Original Issue Discount Security. Special
federal income tax and other considerations relating thereto will be described
in the applicable Prospectus Supplement.
REGISTRATION AND TRANSFER
Unless otherwise indicated in the applicable Prospectus Supplement, each
series of Debt Securities will be issued in registered form only, without
coupons. The Indentures, however, provide that Fleet may also issue Debt
Securities in bearer form only, or in both registered and bearer form. Debt
Securities issued in bearer form shall have interest coupons attached, unless
issued as zero coupon securities. Debt Securities in bearer form shall not be
offered, sold, resold or delivered in connection with their original issuance in
the United States or to any United States person (as defined below) other than
offices located outside the United States of certain United States financial
institutions. As used above, "United States person" means any citizen or
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resident of the United States, any corporation, partnership or other entity
created or organized in or under the laws of the United States, or any estate or
trust, the income of which is subject to United States federal income taxation
regardless of its source, and "United States" means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction. Purchasers of Debt
Securities in bearer form will be subject to certification procedures and may be
affected by certain limitations under United States tax laws. Such procedures
and limitations will be described in the Prospectus Supplement relating to the
offering of the Debt Securities in bearer form.
Debt Securities in registered form may be presented for transfer or
exchange (with form of transfer duly endorsed thereon) for other Debt Securities
of the same series at the offices of the Trustee according to the terms of the
applicable Indenture. In no event, however, will Debt Securities in registered
form be exchangeable for Debt Securities in bearer form. Fleet may designate the
main office of Fleet-RI, 111 Westminster Street, Providence, Rhode Island 02903,
as an office where the transfer of the Debt Securities may be registered.
Unless otherwise indicated in the applicable Prospectus Supplement, Debt
Securities issued in bearer form will be issued in denominations of $10,000 and
$50,000.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities issued in fully registered form will be issued without coupons
and in denominations of $1,000 or integral multiples thereof.
No service charge will be made for any transfer or exchange of the Debt
Securities but Fleet may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
PAYMENT AND PLACE OF PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest, if any, on, Debt Securities in
registered form will be made at the office of the Trustee, except that at the
option of Fleet, interest may be paid by mailing a check to the address of the
person entitled thereto as it appears on the Security Register (Sections 301,
305 and 1002 in the Senior Indenture; Sections 3.01, 3.05 and 5.02 in the
Subordinated Indenture). Fleet may designate the main office of Fleet-RI, 111
Westminster Street, Providence, Rhode Island 02903, as an office where
principal, premium, if any, and interest, if any, may be paid.
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest, if any, on Debt Securities in
bearer form will be made, subject to any applicable laws and regulations, at
such office outside the United States as specified in the applicable Prospectus
Supplement and as Fleet may designate from time to time, at the option of the
Holder, by check or by transfer to an account maintained by the payee with a
bank located outside the United States. Unless otherwise indicated in the
applicable Prospectus Supplement, payment of interest on Debt Securities in
bearer form will be made only against surrender of the coupon relating to such
Interest Payment Date. No payment with respect to any Debt Security in bearer
form will be made at any office or agency of Fleet in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities ("Global Securities") that will be
deposited with, or on behalf of, a depository (the "Depository") identified in
the Prospectus Supplement relating to such series. Global Securities may be
issued in either registered or bearer form and in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for individual
certificates evidencing Debt Securities in definitive form represented thereby,
a Global Security may not be transferred except as a whole by the Depository for
such Global Security to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository or by such
Depository or any such nominee to a successor of such Depository or a nominee of
such successor.
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The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series.
MODIFICATION AND WAIVER
Each Indenture provides that modifications and amendments thereof may be
made by Fleet and the Trustees with the consent of the Holders of 66 2/3% in
aggregate principal amount of the Outstanding Securities of each series under
such Indenture affected by such modification or amendment; provided, however,
that no such modification or amendment may, without the consent of the Holder of
each Outstanding Security affected thereby, (a) change the stated maturity date
of the principal of, or any installment of principal or interest on, any
Outstanding Security, (b) reduce the principal amount of, the rate of interest
thereon, or any premium payable upon the redemption thereof, (c) reduce the
amount of principal of an Original Issue Discount Security payable upon
acceleration of the maturity thereof, (d) change the place or currency of
payment of principal of, or any premium or interest on, any Outstanding
Security, (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Outstanding Security, or (f) reduce the
percentage in principal amount of Outstanding Securities of any series, the
consent of whose Holders is required for modification or amendment of the
Indenture or for waiver of compliance with certain provisions of the Indenture
or for waiver of certain defaults.
The Holders of 50% in aggregate principal amount of the Outstanding
Securities of each series may, on behalf of all Holders of Debt Securities of
that series, waive, insofar as that series is concerned, compliance by Fleet
with certain restrictive provisions of the applicable Indenture. The Holders of
a majority in aggregate principal amount of the Outstanding Securities of each
series may, on behalf of all Holders of Debt Securities of that series, waive
any past default under the applicable Indenture with respect to Debt Securities
of that series, except a default in the payment of principal or any premium or
any interest or in respect of a provision which under the applicable Indenture
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of that series affected.
Modification and amendment of the Indentures may be made by Fleet and the
Trustee without the consent of any Holder for any of the following purposes: (i)
to evidence the succession of another Person to Fleet; (ii) to add to the
covenants of Fleet for the benefit of the Holders of all or any series of
Securities; (iii) to add Events of Default; (iv) to add or change any provisions
of any of the Indentures to facilitate the issuance of bearer securities; (v) to
change or eliminate any of the provisions of the applicable Indenture, provided
that any such change or elimination shall become effective only when there is no
Outstanding Security of any series which is entitled to the benefit of such
provision; (vi) to establish the form or terms of Securities of any series;
(vii) to evidence and provide for the acceptance of appointment by a successor
Trustee; (viii) to cure any ambiguity, to correct or supplement any provision in
the applicable Indenture, or to make any other provisions with respect to
matters or questions arising under such Indenture, provided such action shall
not adversely affect the interests of Holders of Debt Securities of any series
in any material respect under such Indenture; (ix) to convey, transfer, assign,
mortgage or pledge any property to or with the Trustee or (x) to provide for
conversion rights of the Holders of the Securities of any series to enable such
Holders to convert such Securities into other securities of Fleet.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Unless otherwise set forth in the applicable Prospectus Supplement, each
Indenture provides that Fleet may consolidate or merge with or into, or transfer
its assets substantially as an entirety to, any corporation organized under the
laws of any domestic jurisdiction, provided that the successor corporation
assumes Fleet's obligations on the Debt Securities under such Indenture, and
that after giving effect to the transaction no Event of Default, and no event
which, after notice or lapse of time, would become an Event of Default, shall
have occurred and be continuing, and that certain other conditions are met.
Neither Indenture provides for any right of acceleration in the event of a
consolidation, merger, sale of all or substantially all of the assets,
recapitalization or change in stock ownership of Fleet. In addition, the
Indentures do not contain any provision which would protect the Holders of Debt
Securities against a sudden and dramatic decline in credit quality resulting
from takeovers, recapitalizations or similar restructurings.
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REGARDING THE TRUSTEE
Fleet maintains banking relations with the Trustee. In addition, Fleet's
banking subsidiaries maintain deposit accounts and correspondent banking
relations with the Trustee.
INTERNATIONAL OFFERING
If specified in the applicable Prospectus Supplement, Fleet may issue Debt
Securities in an International Offering. Such Debt Securities may be issued in
bearer form and will be described in the applicable Prospectus Supplement. If
such Debt Securities are Senior Debt Securities, such Debt Securities will be
issued pursuant to a supplement to the Senior Indenture. If Debt Securities are
issued in bearer form, the applicable Prospectus Supplement will contain the
relevant provisions.
In connection with any such International Offering, Fleet will designate
paying agents, registrars or other agents with respect to the Debt Securities,
as specified in the applicable Prospectus Supplement.
Debt Securities issued in an International Offering may be subject to
certain selling restrictions which will be described in the applicable
Prospectus Supplement. Such Debt Securities may be listed on one or more foreign
stock exchanges as described in the applicable Prospectus Supplement. Special
United States tax and other considerations, if any, applicable to an
International Offering will be described in the applicable Prospectus
Supplement.
SENIOR DEBT SECURITIES
The Senior Debt Securities will be direct, unsecured obligations of Fleet
and will rank pari passu with all outstanding senior indebtedness of Fleet.
EVENTS OF DEFAULT
The following are Events of Default under the Senior Indenture with respect
to Senior Debt Securities of any series: (a) failure to pay principal of or any
premium on any Senior Debt Security of that series when due; (b) failure to pay
any interest on any Senior Debt Security of that series when due, continued for
30 days; (c) failure to deposit any sinking fund payment, when due, in respect
of any Senior Debt Security of that series; (d) failure to perform any other
covenant of Fleet in the Senior Indenture (other than any covenant included in
the Indenture solely for the benefit of a Series of Debt Securities other than
that Series), continued for 60 days after written notice as provided in the
Senior Indenture; (e) certain events in bankruptcy, insolvency or
reorganization; and (f) any other Event of Default provided with respect to
Senior Debt Securities of that series. (Section 501) If an Event of Default with
respect to Senior Debt Securities of any series at the time outstanding occurs
and is continuing, either the Senior Trustee or the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities of that series may
declare the principal amount (or, if the Senior Debt Securities of that series
are Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of that series) of all the Senior Debt Securities
of that series to be due and payable immediately. At any time after a
declaration of acceleration with respect to Senior Debt Securities of any series
has been made, but before a judgment or decree based on acceleration has been
obtained, the Holders of a majority in aggregate principal amount of Outstanding
Securities of that series may, on behalf of all Holders of that series, under
certain circumstances, rescind and annul such acceleration. (Section 502)
The Senior Indenture provides that, subject to the duty of the Senior
Trustee during default to act with the required standard of care, the Senior
Trustee will be under no obligation to exercise any of its rights or powers
under the Senior Indenture at the request or direction of any of the Holders,
unless such Holders shall have offered to the Senior Trustee reasonable
indemnity. (Section 603) Subject to such provisions for the indemnification of
the Senior Trustee, the Holders of a majority in aggregate principal amount of
the Outstanding Senior Debt Securities of any series will have the right to
direct the time, method and place of conducting any proceedings for any remedy
available to the Senior Trustee, or exercising any trust or power conferred on
the Senior Trustee, with respect to the Senior Debt Securities of that series.
(Section 512)
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No Holder of any Senior Debt Security of any series will have any right to
institute any proceeding with respect to the Senior Indenture or for any remedy
thereunder, unless (a) such Holder shall have previously given to the Senior
Trustee written notice of a continuing Event of Default with respect to Senior
Debt Securities of that series, (b) the Holders of not less than 25% in
aggregate principal amount of the Outstanding Senior Debt Securities of that
series also shall have made written request and offered reasonable indemnity to
the Senior Trustee to institute such proceeding as trustee, (c) the Senior
Trustee shall not have received from the Holders of a majority in principal
amount of the Outstanding Senior Debt Securities of that series a direction
inconsistent with such request and (d) the Senior Trustee shall have failed to
institute such proceeding within 60 days. (Section 507) However, the Holder of
any Senior Debt Security will have an absolute right to receive payment of the
principal of (and premium, if any) and interest, if any, on such Senior Debt
Security on or after the due dates expressed in such Senior Debt Security and to
institute suit for the enforcement of any such payment. (Section 508)
Fleet is required to furnish to the Senior Trustee annually a statement as
to performance by Fleet of certain of its obligations under the Indenture and as
to any default in such performance. (Section 1009)
RESTRICTIVE COVENANTS
Disposition of Voting Stock of Certain Subsidiaries. The Senior Indenture
contains a covenant that Fleet will not, and will not permit any Subsidiary (as
defined in the Senior Indenture) to sell, assign, pledge, transfer or otherwise
dispose of, or permit the issuance of any shares of Voting Stock (as defined in
the Senior Indenture) of, or any securities convertible into, or options,
warrants or rights to subscribe for or purchase shares of Voting Stock of, a
Principal Constituent Bank (as defined below) or any Subsidiary which owns
shares of, or securities convertible into, or options, warrants or rights to
subscribe for or purchase shares of Voting Stock of a Principal Constituent
Bank, provided that dispositions made by Fleet or any Subsidiary (i) acting in a
fiduciary capacity for any person other than Fleet or any Subsidiary or (ii) to
Fleet or any of its wholly-owned (except for directors' qualifying shares)
Subsidiaries, shall not be prohibited. Notwithstanding the limitations described
above, the Senior Indenture provides that Fleet may, and may permit its
Subsidiaries to, sell, assign, pledge, transfer or otherwise dispose of, or
issue such shares or securities (1) if required by law for the qualification of
Directors, (2) for purposes of compliance with an order of a court or regulatory
authority, (3) if in connection with a merger of, or consolidation of, a
Principal Constituent Bank with or into a wholly-owned Subsidiary or a
Constituent Bank (as defined below), provided that Fleet holds, directly or
indirectly, in the entity surviving such merger or consolidation, not less than
the percentage of Voting Stock it held in the Principal Constituent Bank prior
to such action, (4) if such disposition or issuance is for fair market value
(determined by the Board of Directors of Fleet) and, if after giving effect to
such disposition or issuance (and any potential dilution), Fleet and its
wholly-owned Subsidiaries will own directly not less than 80% of the Voting
Stock of such Principal Constituent Bank or Subsidiary, (5) if a Principal
Constituent Bank sells additional shares of Voting Stock to its stockholders at
any price, if, after such sale, Fleet holds directly or indirectly not less than
the percentage of Voting Stock of such Principal Constituent Bank it owned prior
to such sale or (6) if Fleet or a Subsidiary pledges or creates a lien on the
Voting Stock of a Principal Constituent Bank to secure a loan or other extension
of credit by a Constituent Bank subject to Section 23A of the Federal Reserve
Act. A "Constituent Bank" is a Bank which is a Subsidiary. A "Principal
Constituent Bank" is Fleet-RI and any other Constituent Bank designated as a
Principal Constituent Bank. Any designation of a Constituent Bank as a Principal
Constituent Bank with respect to Debt Securities of any series shall remain
effective until the Debt Securities of such series are no longer outstanding. As
of the date of this Prospectus, no Constituent Banks (other than Fleet-RI) have
been designated as Principal Constituent Banks with respect to any series of
Debt Securities.
Limitation Upon Liens on Certain Capital Stock. The Senior Indenture
contains a covenant that Fleet will not at any time, directly or indirectly,
create, assume, incur or suffer to be created, assumed or incurred or to exist
any mortgage, pledge, encumbrance or lien or charge of any kind upon (1) any
shares of capital stock of any Principal Constituent Bank (other than directors'
qualifying shares), or (2) any shares of capital stock of a Subsidiary which
owns capital stock of any Principal Constituent Bank; provided, however, that,
notwithstanding the foregoing, Fleet may incur or suffer to be incurred or to
exist upon such capital stock
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(a) liens for taxes, assessments or other governmental charges or levies which
are not yet due or are payable without penalty or of which the amount,
applicability or validity is being contested by Fleet in good faith by
appropriate proceedings and Fleet shall have set aside on its books adequate
reserves with respect thereto or (b) the lien of any judgement, if such judgment
shall not have remained undischarged, or unstayed on appeal or otherwise, for
more than 60 days.
DEFEASANCE
Fleet may terminate certain of its obligations under the Senior Indenture
with respect to the Senior Debt Securities of any series on the terms and
subject to the conditions contained in the Senior Indenture, by (a) depositing
irrevocably with the Senior Trustee as trust funds in trust (i) in the case of
Senior Debt Securities denominated in a foreign currency, money in such foreign
currency or Foreign Government Obligations (as defined below) of the foreign
government or governments issuing such foreign currency, or (ii) in the case of
Senior Debt Securities denominated in U.S. dollars, U.S. dollars or U.S.
Government Obligations (as defined below), in each case in an amount which
through the payment of interest, principal or premium, if any, in respect
thereof in accordance with their terms will provide (without any reinvestment of
such interest, principal or premium), not later than one business day before the
due date of any payment, money or (iii) a combination of money and U.S.
Government Obligations or Foreign Government Obligations, as applicable,
sufficient to pay the principal of or premium, if any, and interest on, the
Senior Debt Securities of such series as such are due and (b) satisfying certain
other conditions precedent specified in the Senior Indenture. Such deposit and
termination is conditioned among other things upon Fleet's delivery of (a) an
opinion of independent counsel that the Holders of the Senior Debt Securities of
such series will have no federal income tax consequences as a result of such
deposit and termination and (b) if the Senior Debt Securities of such series are
then listed on the New York Stock Exchange, an opinion of counsel that the
Senior Debt Securities of such series will not be delisted as a result of the
exercise of this option. Such termination will not relieve Fleet of its
obligation to pay when due the principal of, and interest on, the Senior Debt
Securities of such series if the Senior Debt Securities of such series are not
paid from the money, Foreign Government Obligations or U.S. Government
Obligations held by the Senior Trustee for payment thereof. (Section 403)
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof. "Foreign Government Obligations" means securities denominated in a
Foreign Currency that are (i) direct obligations of a foreign government for the
payment of which its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
a foreign government the payment of which is unconditionally guaranteed as a
full faith and credit obligation by such foreign government, which, in either
case, under clauses (i) or (ii) are not callable or redeemable at the option of
the issuer thereof.
SUBORDINATED DEBT SECURITIES
The Subordinated Debt Securities will be direct, unsecured obligations of
Fleet and, unless otherwise specified in the applicable Prospectus Supplement,
will rank pari passu with all outstanding subordinated indebtedness of Fleet.
SUBORDINATION
The payment of the principal of and interest on the Subordinated Debt
Securities will, to the extent set forth in the Subordinated Indenture, be
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness (as defined in the Subordinated Indenture). In certain events of
insolvency, the payment of the principal of and interest on the Subordinated
Debt Securities will, to the extent set forth in the Subordinated Indenture,
also be effectively subordinated in right of payment to the prior payment in
full of all Other Financial Obligations (as defined in the Subordinated
Indenture). Upon any payment or distribution of
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assets to creditors upon any liquidation, dissolution, winding up,
reorganization, assignment for the benefit of creditors, marshalling of assets
or any bankruptcy, insolvency or similar proceedings of the Company, the holders
of all Senior Indebtedness will first be entitled to receive payment in full of
all amounts due or to become due thereon before the Holders of the Subordinated
Debt Securities will be entitled to receive any payment in respect of the
principal of or interest on the Subordinated Debt Securities. If upon any such
payment or distribution of assets to creditors, there remain, after giving
effect to such subordination provisions in favor of the holders of Senior
Indebtedness, any amounts of cash, property or securities available for payment
or distribution in respect of Subordinated Debt Securities (as defined in the
Subordinated Indenture, "Excess Proceeds") and if, at such time, any Entitled
Persons (as defined in the Subordinated Indenture) in respect of Other Financial
Obligations have not received payment in full of all amounts due or to become
due on or in respect of such Other Financial Obligations, then such Excess
Proceeds shall first be applied to pay or provide for the payment in full of
such Other Financial Obligations before any payment or distribution may be made
in respect of the Subordinated Debt Securities. In the event of the acceleration
of the maturity of any Debt Securities, the holders of all Senior Indebtedness
will first be entitled to receive payment in full of all amounts due thereon
before the Holders of the Subordinated Debt Securities will be entitled to
receive any payment upon the principal of or interest on the Subordinated Debt
Securities.
In addition, no payment may be made of the principal of, premium, if any,
or interest on the Subordinated Debt Securities, or in respect of any
redemption, retirement, purchase or other acquisition of any of the Subordinated
Debt Securities, at any time when (i) there is a default in the payment of the
principal of, premium, if any, interest on or otherwise in respect of any Senior
Indebtedness, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise, or (ii) any event of default with respect to any
Senior Indebtedness has occurred and is continuing, or would occur as a result
of such payment on the Subordinated Debt Securities or any redemption,
retirement, purchase or other acquisition of any of the Subordinated Debt
Securities, permitting the Holders of such Senior Indebtedness (or a trustee on
behalf of the Holders thereof) to accelerate the maturity thereof.
By reason of such subordination in favor of the holders of Senior
Indebtedness, in the event of insolvency, creditors of Fleet who are not holders
of Senior Indebtedness or of the Subordinated Debt Securities may recover less,
ratably, than Holders of Senior Indebtedness and may recover more, ratably, than
the Holders of the Subordinated Debt Securities. By reason of the obligation of
the Holders of Subordinated Debt Securities to pay over any Excess Proceeds to
Entitled Persons in respect of Other Financial Obligations, in the event of
insolvency, holders of Existing Subordinated Indebtedness (as defined in the
Subordinated Indenture) may recover more, ratably, than the Holders of
Subordinated Debt Securities.
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Subordinated Debt Securities offered thereby, Senior
Indebtedness is defined in the Subordinated Indenture as (a) the principal of,
premium, if any, and interest on all of Fleet's indebtedness for money borrowed,
whether outstanding on the date of execution of the Subordinated Indenture or
thereafter created, assumed or incurred, except (i) the Existing Subordinated
Indebtedness and other Subordinated Debt Securities issued under the
Subordinated Indenture, (ii) such indebtedness as is by its terms expressly
stated to be junior in right of payment to the Subordinated Debt Securities and
(iii) such indebtedness as is by its terms expressly stated to rank pari passu
with the Subordinated Debt Securities and (b) any deferrals, renewals or
extensions of any such Senior Indebtedness. (Section 1.01). The Term
"indebtedness for money borrowed" when used with respect to Fleet is defined to
include, without limitation, any obligation of, or any obligation guaranteed by,
Fleet for the repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments, and any deferred obligation of,
or any such obligation guaranteed by, Fleet for the payment of the purchase
price of property or assets. (Section 1.01).
Existing Subordinated Indebtedness means Fleet's Subordinated Notes Due
1997, Floating Rate Subordinated Capital Notes Due 1998, 9.90% Subordinated
Notes Due 2001, 9% Subordinated Notes Due 2001, 8 1/8% Subordinated Notes Due
2004 and 8 5/8% Subordinated Notes Due 2007. As of the date of this Prospectus,
Fleet also had issued its 7 5/8% Subordinated Notes Due 1999 and 6 7/8%
Subordinated Notes Due 2003, each of which was issued under the Subordinated
Indenture and is junior in right of payment to all of Fleet's Senior
Indebtedness and Other Financial Obligations.
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Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Subordinated Debt Securities offered thereby, Other
Financial Obligations means all obligations of Fleet to make payment pursuant to
the terms of financial instruments, such as (i) securities contracts and foreign
currency exchange contracts, (ii) derivative instruments, such as swap
agreements (including interest rate and foreign exchange rate swap agreements),
cap agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange rate agreements, options, commodity futures contracts,
commodity option contracts and (iii) in the case of both (i) and (ii) above,
similar financial instruments, other than (A) obligations on account of Senior
Indebtedness and (B) obligations on account of indebtedness for money borrowed
ranking pari passu with or subordinate to the Subordinated Debt Securities.
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Subordinated Debt Securities offered thereby, Entitled
Persons means any person who is entitled to payment pursuant to the terms of
Other Financial Obligations.
Any Prospectus Supplement relating to a particular series of Subordinated
Debt Securities will set forth the aggregate amount of indebtedness of Fleet
senior to the Subordinated Debt Securities as of a recent practicable date.
Fleet's obligations under the Subordinated Debt Securities shall rank pari
passu in right of payment with each other and with the Existing Subordinated
Indebtedness, subject to the obligations of the Holders of Subordinated Debt
Securities to pay over any Excess Proceeds to Entitled Persons in respect of
Other Financial Obligations as provided in the Subordinated Indenture.
The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Indebtedness or Other Financial Obligations, which may include
indebtedness that is senior to the Subordinated Debt Securities, but subordinate
to other obligations of Fleet.
The Prospectus Supplement may further describe the provisions, if any,
applicable to the subordination of the Subordinated Debt Securities of a
particular series.
Except as described above or in the Subordinated Indenture, the obligation
of Fleet to make payment of the principal of, premium, if any, or interest on
the Subordinated Debt Securities will not be affected by reason of such
subordination. In the event of a distribution of assets upon any dissolution,
winding up, liquidation or reorganization, certain general creditors of Fleet
may recover more, ratably, than Holders of the Subordinated Debt Securities.
Subject to payment in full of all Senior Indebtedness, the rights of the Holders
of Subordinated Debt Securities will be subrogated to the rights of the Holders
of Senior Indebtedness to receive payments or distribution of cash, property or
securities of Fleet applicable to Senior Indebtedness. Subject to the payment in
full of all Other Financial Obligations, the rights of the Holders of
Subordinated Debt Securities will be subrogated to the rights of Entitled
Persons to receive payments or distributions of cash, property or securities of
Fleet applicable to Other Financial Obligations. (Sections 14.02 and 14.10)
LIMITED RIGHTS OF ACCELERATION
Unless otherwise specified in the Prospectus Supplement relating to any
series of Subordinated Debt Securities, payment of principal of the Subordinated
Debt Securities may be accelerated only in case of certain events involving the
bankruptcy, insolvency or reorganization of Fleet which constitutes an Event of
Default (as defined below). There is no right of acceleration in the case of a
default in the payment of principal of, premium, if any, or interest on the
Subordinated Debt Securities or the performance of any other covenant of Fleet
in the Subordinated Indenture.
RESTRICTIVE COVENANTS
The Prospectus Supplement relating to a series of Subordinated Debt
Securities may describe certain restrictive covenants, if any, to which Fleet
may be bound under the Subordinated Indenture.
EVENTS OF DEFAULT, DEFAULTS, WAIVERS
An "Event of Default" with respect to Subordinated Debt Securities of any
series is defined in the Subordinated Indenture as certain events involving the
bankruptcy or reorganization of Fleet and any other
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Event of Default provided with respect to Subordinated Debt Securities of such
series. (Section 7.01) A "Default" with respect to Subordinated Debt Securities
of any series is defined in the Subordinated Indenture as (a) an Event of
Default with respect to such series; (b) failure to pay the principal of, or
premium, if any, on any Subordinated Security of such series at its Maturity;
(c) failure to pay interest upon any Subordinated Security of such series when
due and payable and the continuance of such Default for a period of 30 days; (d)
failure to perform any other covenant or agreement of Fleet in the Subordinated
Indenture with respect to Subordinated Debt Securities of such series and
continuance of such Default for 60 days after written notice of such failure,
requiring Fleet to remedy the same; and (e) any other Default provided with
respect to Subordinated Debt Securities of such series. (Section 7.07) If an
Event of Default with respect to any series of Subordinated Debt Securities for
which there are Subordinated Debt Securities outstanding under the Subordinated
Indenture occurs and is continuing, either the Subordinated Trustee or the
Holders of not less than 25% in aggregate principal amount of the Subordinated
Debt Securities of such series may declare the principal amount (or if such
Subordinated Debt Securities are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of that series)
of all Subordinated Debt Securities of that series to be immediately due and
payable. The Holders of a majority in aggregate principal amount of the
Subordinated Debt Securities of any series outstanding under the Subordinated
Indenture may waive, on behalf of all Holders of such series, an Event of
Default resulting in acceleration of such Subordinated Debt Securities, but only
if all Defaults have been remedied and all payments due (other than those due as
a result of acceleration) have been made. (Section 7.02) If a Default occurs and
is continuing, the Subordinated Trustee may in its discretion, and at the
written request of Holders of not less than a majority in aggregate principal
amount of the Subordinated Debt Securities of any series outstanding under the
Subordinated Indenture and upon reasonable indemnity against the costs, expenses
and liabilities to be incurred in compliance with such request and subject to
certain other conditions set forth in the Subordinated Indenture shall, proceed
to protect the rights of the Holders of all the Subordinated Debt Securities of
such series. (Section 7.03) Prior to acceleration of maturity of the
Subordinated Debt Securities of any series outstanding under the Subordinated
Indenture, the Holders of a majority in aggregate principal amount of such
Subordinated Debt Securities may waive any past Default under the Subordinated
Indenture except a Default in the payment of principal of, premium, if any, or
interest on the Subordinated Debt Securities of such series or in respect of a
covenant which cannot be modified or amended without the consent of the Holder
of each Outstanding Security of such series affected. (Section 7.13)
The Subordinated Indenture provides that in the event of a Default
specified in clauses (b) or (c) of the immediately preceding paragraph in
payment of principal of, premium, if any, or interest on any Subordinated Debt
Security of any series, Fleet will, upon demand of the Subordinated Trustee, pay
to it, for the benefit of the holder of any such Subordinated Debt Security, the
whole amount then due and payable on such Subordinated Debt Security for
principal, premium, if any, and interest. The Subordinated Indenture further
provides that if Fleet fails to pay such amount forthwith upon such demand, the
Subordinated Trustee may, among other things, institute a judicial proceeding
for the collection thereof. (Section 7.03)
The Subordinated Indenture also provides that notwithstanding any other
provision of the Subordinated Indenture, the holder of any Subordinated Debt
Security of any series shall have the right to institute suit for the
enforcement of any payment of principal of, premium, if any, and interest on
such Subordinated Debt Security on the respective Stated Maturities (as defined
in the Subordinated Indenture) expressed in such Subordinated Debt Security and
that such right shall not be impaired without the consent of such holder.
(Section 7.08)
Fleet is required to furnish to the Subordinated Trustee annually a
statement as to performance by Fleet of certain of its obligations under the
Subordinated Indenture and as to any Default in such performance. (Section 5.10)
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DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any series of the
Preferred Stock offered by any Prospectus Supplement will be described in the
Prospectus Supplement relating to such series of the Preferred Stock. If so
indicated in the applicable Prospectus Supplement, the terms of any such series
may differ from the terms set forth below. The description of the provisions of
the Preferred Stock set forth below and in any Prospectus Supplement does not
purport to be complete and is subject to and qualified in its entirety by
reference to the Certificate of Designation relating to the applicable series of
the Preferred Stock.
GENERAL
Under Fleet's Restated Articles of Incorporation (the "Articles"), the
Board of Directors of Fleet is authorized, without further shareholder action,
to provide for the issuance of up to 16,000,000 shares of preferred stock, $1
par value ("Fleet $1 Par Preferred Stock"), in one or more series, with such
voting powers, dividends, designations, preferences, rights, qualifications,
limitations and restrictions as shall be set forth in the resolutions providing
for the issuance thereof adopted by the Board of Directors. As of June 30, 1994,
Fleet had outstanding three series of Fleet $1 Par Preferred Stock as follows:
(i) 1,100,000 shares of Series III 10.12% Perpetual Preferred Stock (the "Series
III Preferred"), having a liquidation value of $100 per share, plus accrued and
unpaid dividends, were designated and 519,758 shares were issued and
outstanding, (ii) 1,000,000 shares of Series IV 9.375% Perpetual Preferred Stock
(the "Series IV Preferred"), having a liquidation value of $100 per share, plus
accrued and unpaid dividends, were designated and 478,838 shares were issued and
outstanding and (iii) 1,415,000 shares of Dual Convertible Preferred Stock (the
"Dual Convertible Preferred Stock"), having a liquidation preference of $200 per
share, plus accrued and unpaid dividends, were designated and 1,415,000 shares
were issued and outstanding. In addition, as of June 30, 1994, the Board of
Directors of Fleet had established a series of 1,500,000 shares of Cumulative
Participating Junior Preferred Stock, par value $1 per share (the "Junior
Preferred Stock") issuable upon exercise of the preferred share purchase rights
described below, of which no shares were issued and outstanding as of such date.
Each such outstanding series and class is described below under "Description of
Existing Preferred Stock".
Under regulations adopted by the Federal Reserve Board, if the holders of
any series of the Preferred Stock are or become entitled to vote for the
election of directors because dividends on such series are in arrears, such
series may then be deemed a "class of voting securities" and a holder of 25% or
more of such series (or a holder of 5% or more if it otherwise exercises a
"controlling influence" over Fleet) may then be subject to regulation as a bank
holding company in accordance with the Bank Holding Company Act of 1956, as
amended. In addition, at such time as such series is deemed a class of voting
securities, (i) any other bank holding company may be required to obtain the
approval of the Federal Reserve Board to acquire or retain 5% or more of such
series and (ii) any person other than a bank holding company may be required to
obtain the approval of the Federal Reserve Board to acquire or retain 10% or
more of such series.
The Preferred Stock shall have the dividend, liquidation, redemption,
voting and conversion rights set forth below unless otherwise provided in the
Prospectus Supplement relating to a particular series of the Preferred Stock.
Reference is made to the Prospectus Supplement relating to the particular series
of the Preferred Stock offered thereby for specific terms, including: (i) the
title, stated value and liquidation preference of such Preferred Stock and the
number of shares offered; (ii) the initial public offering price at which such
Preferred Stock will be issued; (iii) the dividend rate or rates (or method of
calculation), the dividend periods, the dates on which dividends shall be
payable and whether such dividends shall be cumulative or noncumulative and, if
cumulative, the dates from which dividends shall commence to accumulate; (iv)
any redemption or sinking fund provisions; (v) any conversion provisions; (vi)
whether Fleet has elected to offer Depositary Shares as described under
"Description of Depositary Shares"; and (vii) any other rights, preferences,
privileges, limitations and restrictions on such Preferred Stock.
The Preferred Stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the Prospectus Supplement relating to a particular
series of the Preferred Stock, each series of the Preferred Stock
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<PAGE> 18
will rank on a parity in all respects with the outstanding preferred stock of
Fleet and each other series of the Preferred Stock (except for the Junior
Preferred Stock) and will rank senior in all respects to any outstanding shares
of Junior Preferred Stock and the Common Stock. See "Description of Existing
Preferred Stock". The Preferred Stock will have no preemptive rights to
subscribe for any additional securities which may be issued by Fleet.
Unless otherwise specified in the applicable Prospectus Supplement, the
depositary, transfer agent, registrar, dividend disbursing agent and redemption
agent for shares of the Preferred Stock will be Fleet-RI.
As described under "Description of Depositary Shares", Fleet may, at its
option, with respect to any series of the Preferred Stock, elect to offer
fractional interests in shares of Preferred Stock, and provide for the issuance
by a Depositary (as defined below) of depositary receipts ("Depositary
Receipts") representing depositary shares ("Depositary Shares"), each of which
will represent a fractional interest (to be specified in the applicable
Prospectus Supplement relating to a particular series of the Preferred Stock) in
a share of such series of the Preferred Stock.
DIVIDENDS
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of Fleet, out of any funds
legally available therefor, cash dividends at such rates and on such dates as
are set forth in the Prospectus Supplement relating to such series of the
Preferred Stock. Such rates may be fixed or adjustable or both. If adjustable,
the formula or other method used for determining the applicable dividend rate
for each dividend period will be set forth in the applicable Prospectus
Supplement. Dividends will be calculated on the basis of a 360-day year
consisting of twelve 30-day months.
Dividends on any series of the Preferred Stock may be cumulative or
noncumulative, as provided in the applicable Prospectus Supplement. If the Board
of Directors of Fleet fails to declare a dividend payable on a dividend payment
date on any series of the Preferred Stock for which dividends are noncumulative
("Noncumulative Preferred Stock"), then the holders of such series of the
Preferred Stock will have no right to receive a dividend in respect of the
dividend period ending on such dividend payment date, and Fleet will have no
obligation to pay the dividend accrued for such period, whether or not dividends
on such series are declared payable on any future dividend payment dates.
When dividends are not paid in full upon any series of the Preferred Stock
and any other series of Fleet's preferred stock ranking on a parity as to
dividends with such series of Preferred Stock, all dividends declared upon
shares of such series of Preferred Stock and any other series of Fleet's
preferred stock ranking on a parity as to dividends shall be declared pro rata
so that the amount of dividends declared per share on such series of Preferred
Stock and such other preferred stock shall in all cases bear to each other the
same ratio that accrued dividends per share on the shares of such series of
Preferred Stock (which shall not, if such Preferred Stock is Noncumulative
Preferred Stock, include any accumulation in respect of unpaid dividends for
prior dividend periods) and such other preferred stock bear to each other.
Except as provided in the preceding sentence, unless (i) with respect to any
series of Preferred Stock for which dividends are cumulative ("Cumulative
Preferred Stock"), full cumulative dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for such payment on such Preferred Stock for all dividend periods
terminating on or prior to the date of payment of any such dividends on such
other series of preferred shares of Fleet or (ii) with respect to any series of
Noncumulative Preferred Stock, full dividends for the then-current dividend
period on such Preferred Stock have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for such
payment, no dividends (other than in Common Stock or another stock ranking
junior to such series of Preferred Stock as to dividends and upon liquidation)
shall be declared or paid or set aside for payment, nor shall any other
distribution be made on the Common Stock or on any other stock of Fleet ranking
junior to or on a parity with such series of Preferred Stock as to dividends or
upon liquidation. Unless full dividends on the Cumulative Preferred Stock of any
series have been paid for the then-current and all past dividend periods and
full dividends for the then-current dividend period on the Noncumulative
Preferred Stock of any series have been declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment, no Common Stock
or any
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other stock of Fleet ranking junior to or on a parity with such series of
Preferred Stock as to dividends or upon liquidation may be redeemed, purchased
or otherwise acquired for any consideration (or any moneys paid to or made
available for a sinking fund for the redemption of any shares of any such stock)
by Fleet (except by conversion into or exchange for stock of Fleet ranking
junior to such series of Preferred Stock as to dividends and upon liquidation).
See "Fleet Financial Group, Inc." with respect to certain limitations on
the ability of Fleet and its banking subsidiaries to pay dividends.
LIQUIDATION RIGHTS
In the event of any voluntary or involuntary dissolution, liquidation or
winding up of Fleet, the holders of each series of the Preferred Stock will be
entitled to receive and to be paid out of assets of Fleet available for
distribution to its stockholders, before any payment or distribution is made to
holders of Common Stock or any other class of stock ranking junior to such
series of the Preferred Stock upon liquidation, liquidating distributions in an
amount per share as set forth in the Prospectus Supplement relating to such
series of the Preferred Stock, plus accrued and unpaid dividends (whether or not
earned or declared) for the then-current dividend period and, if such series of
the Preferred Stock is Cumulative Preferred Stock, for all dividend periods
prior thereto. If, upon any voluntary or involuntary dissolution, liquidation or
winding up of Fleet, the amounts payable with respect to the Preferred Stock of
any series and any other shares of stock of Fleet ranking as to any such
distribution on a parity with the Preferred Stock of such series are not paid in
full, the holders of the Preferred Stock of such series and of such other shares
will share ratably in any such distribution of assets of Fleet in proportion to
the full respective distributable amounts to which they are entitled. After
payment of the full amount of the liquidating distributions to which they are
entitled, the holders of shares of such series of the Preferred Stock will not
be entitled to any further participation in any distribution of assets by Fleet.
Neither the sale of all or substantially all the property or business of Fleet,
nor the merger or consolidation of Fleet into or with any other corporation
shall be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, of Fleet.
REDEMPTION
Any series of the Preferred Stock may be redeemable, in whole or in part,
at the option of Fleet, and may be subject to mandatory redemption pursuant to a
sinking fund or otherwise, in each case upon the terms, at the times and at the
redemption prices set forth in the Prospectus Supplement relating to such series
and subject to the rights of holders of other securities of Fleet. Preferred
Stock redeemed by Fleet will be restored to the status of authorized but
unissued preferred shares.
The Prospectus Supplement relating to a series of the Preferred Stock which
is subject to mandatory redemption will specify the number of shares of such
series of the Preferred Stock which shall be redeemed by Fleet in each year
commencing after a date to be specified, at a redemption price per share and on
one or more dates to be specified, together with an amount equal to all accrued
and unpaid dividends thereon (which shall not, if such Preferred Stock is
Noncumulative Preferred Stock, include any accumulation in respect of unpaid
dividends for prior dividend periods) to the date of redemption. The redemption
price may be payable in cash or other property, as specified in the Prospectus
Supplement relating to such series of Preferred Stock.
If fewer than all of the outstanding shares of any series of the Preferred
Stock are to be redeemed, the number of shares to be redeemed will be determined
by the Board of Directors of Fleet and such shares shall be redeemed pro rata
from the holders of record of such shares in proportion to the number of such
shares held by such holders (with adjustments to avoid redemption of fractional
shares) or by lot in a manner determined by the Board of Directors of Fleet.
Notwithstanding the foregoing, if any dividends, including any accumulation
on shares of Cumulative Preferred Stock, of any series are in arrears, no shares
of Preferred Stock of such series shall be redeemed unless all outstanding
shares of Preferred Stock of such series are simultaneously redeemed, and Fleet
shall not purchase or otherwise acquire any shares of Preferred Stock of such
series; provided, however, that the
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foregoing shall not prevent the purchase or acquisition of shares of Preferred
Stock of such series pursuant to a purchase or exchange offer made on the same
terms to all holders of such series of the Preferred Stock.
Notice of redemption shall be given by mailing the same to each record
holder of the shares to be redeemed, not less than 30 nor more than 60 days
prior to the date fixed for redemption thereof, to the respective addresses of
such holders as the same shall appear on the stock books of Fleet. Each such
notice shall state: (i) the redemption date; (ii) the number of shares and
series of the Preferred Stock to be redeemed; (iii) the redemption price; (iv)
the place or places where certificates for such shares of Preferred Stock are to
be surrendered for payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue or accumulate on such redemption
date; and (vi) the date upon which the holders' conversion rights, if any, as to
such shares, shall terminate. If fewer than all shares of any series of the
Preferred Stock held by any holder are to be redeemed, the notice mailed to such
holder shall also specify the number of shares to be redeemed from such holder.
If notice of redemption has been given, dividends on the shares of
Preferred Stock so called for redemption shall cease to accrue or accumulate
from and after the redemption date for the shares of the series of the Preferred
Stock called for redemption (unless default shall be made by Fleet in providing
money for the payment of the redemption price of the shares so called for
redemption), and such shares shall no longer be deemed to be outstanding, and
all rights of the holders thereof as stockholders of Fleet (except the right to
receive the redemption price) shall cease. Upon surrender in accordance with
such notice of the certificates representing any shares of the Preferred Stock
so redeemed (properly endorsed or assigned for transfer, if the Board of
Directors of Fleet shall so require and the notice shall so state), the
redemption price set forth above shall be paid out of funds provided by Fleet.
If fewer than all of the shares of the Preferred Stock represented by any such
certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
VOTING RIGHTS
Except as indicated below or in the Prospectus Supplement relating to a
particular series of the Preferred Stock, or except as expressly required by
applicable law, the holders of the Preferred Stock will not be entitled to vote.
In the event Fleet issues shares of a series of the Preferred Stock, each share
will be entitled to one vote on matters on which holders of such series of the
Preferred Stock are entitled to vote. However, as more fully described below
under "Description of Depositary Shares", if Fleet elects to provide for the
issuance of Depositary Shares representing interests in a fraction of a share of
a series of the Preferred Stock, the holders of each such Depositary Share will,
in effect, be entitled through the Depositary to such fraction of a vote, rather
than a full vote. Since each full share of any series of the Preferred Stock
shall be entitled to one vote, the voting power of such series, on matters on
which holders of such series and holders of any other series of the Preferred
Stock or another series of preferred stock of Fleet are entitled to vote as a
single class, will depend on the number of shares in such series, not the
aggregate stated value, liquidation preference or initial offering price of the
shares of such series of the Preferred Stock.
If the equivalent of six quarterly dividends payable on any series of the
Preferred Stock or any other class or series of preferred stock are in default,
the number of directors of Fleet will be increased by two (without duplication
of any increase made pursuant to the terms of any other series of preferred
stock of Fleet), and the holders of all outstanding series of preferred stock,
including holders of any series of the Preferred Stock, voting as a single class
without regard to series, will be entitled at Fleet's next annual meeting of
stockholders (and at each subsequent annual meeting of stockholders) to elect
such additional two directors until full cumulative dividends for all
then-current and past dividend periods on all preferred shares of Fleet so
entitled to vote, including any shares of the Preferred Stock, have been paid or
declared and set apart for payment. Any such elected directors shall serve until
Fleet's next annual meeting of stockholders or until their respective successors
shall be elected and qualify. If a vacancy in the office of such director shall
occur during the continuance of a default in dividends on preferred shares of
Fleet so entitled to vote prior to the end of the term of such director, such
vacancy shall be filled for the unexpired term of such director by the remaining
director elected by the preferred shares so entitled to vote.
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The affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of the Preferred Stock of any series at the time outstanding,
voting as a class, will be required for any amendment of the Articles (or any
certificate supplemental thereto) which will adversely affect the powers,
preferences, privileges or rights of such series of Preferred Stock. The
affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of any series of Preferred Stock and any other series of
preferred stock of Fleet ranking on a parity with any series of Preferred Stock
as to dividends or upon liquidation, voting as a single class without regard to
series, will be required to issue, authorize or increase the authorized amount
of, or issue or authorize any obligation or security convertible into or
evidencing a right to purchase, any additional class or series of stock ranking
prior to any series of Preferred Stock as to dividends or upon liquidation, but
such vote will not be required to take any such actions with respect to any
stock ranking on a parity with or junior to the Preferred Stock of such series.
Subject to such affirmative vote or consent of the holders of the
outstanding shares of the Preferred Stock of any series, Fleet may, by
resolution of its Board of Directors or as otherwise permitted by law, from time
to time alter or change the preferences, rights or powers of the Preferred Stock
of such series. The holders of the Preferred Stock of such series shall not be
entitled to participate in any such vote if, at or prior to the time when any
such alteration or change is to take effect, provision is made for the
redemption of all the Preferred Stock of such series at the time outstanding.
Nothing in this section shall be taken to require a class vote or consent in
connection with the authorization, designation, increase or issuance of any
shares of any class or series (including additional Preferred Stock of any
series) ranking junior to or on a parity with the Preferred Stock of such series
as to dividends and liquidation rights or in connection with the authorization,
designation, increase or issuance of any bonds, mortgages, debentures or other
obligations of Fleet.
CONVERSION RIGHTS
The Prospectus Supplement relating to any series of the Preferred Stock
that is convertible will state the terms on which shares of such series are
convertible into Common Stock of Fleet or another series of Preferred Stock.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts does not purport to be complete and is subject to
and qualified in its entirety by reference to the Deposit Agreement and
Depositary Receipts relating to the applicable series of the Preferred Stock,
forms of which will be filed as an exhibit to the Registration Statement of
which this Prospectus forms a part.
GENERAL
Fleet may, at its option, elect to offer fractional interests in shares of
Preferred Stock, rather than full shares of Preferred Stock. In the event such
option is exercised, Fleet will provide for the issuance by a Depositary of
Depositary Receipts evidencing Depositary Shares, each of which will represent a
fractional interest (to be set forth in the Prospectus Supplement relating to a
particular series of the Preferred Stock) in a share of a particular series of
the Preferred Stock as described below.
The shares of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between Fleet and a bank or trust company selected by Fleet (which
may be affiliated with Fleet) having its principal office in the United States
and having a combined capital and surplus of at least $50,000,000 (the
"Depositary"). The Prospectus Supplement relating to a series of Depositary
Shares will set forth the name and address of the Depositary. Unless otherwise
specified in the applicable Prospectus Supplement, the Depositary for shares of
the Preferred Stock will be Fleet-RI. Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, in proportion to
the applicable fractional interest in a share of Preferred Stock underlying such
Depositary Share, to all the rights and preferences of the Preferred Stock
underlying such Depositary Share (including dividend, voting, redemption,
conversion and liquidation rights).
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The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement. Pending the preparation of definitive
engraved Depositary Receipts, the Depositary may, upon the written order of
Fleet, issue temporary Depositary Receipts substantially identical to, and
entitling the holders thereof to all the rights pertaining to, the definitive
Depositary Receipts but not in definitive form. Definitive Depositary Receipts
will be prepared thereafter without unreasonable delay, and temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts at Fleet's
expense.
Upon surrender of Depositary Receipts at the principal office of the
Depositary (unless the related Depositary Shares have previously been called for
redemption) and upon payment of the charges provided in the Deposit Agreement
and subject to the terms thereof, a holder of Depositary Shares is entitled to
have the Depositary deliver to, or upon the order of, such holder the whole
shares of Preferred Stock underlying, and any money or other property
represented by, the Depositary Shares evidenced by the surrendered Depositary
Receipts.
Partial shares of Preferred Stock will not be issued. If the Depositary
Receipts delivered by the holder evidence a number of Depositary Shares in
excess of the number of Depositary Shares representing the number of whole
shares of Preferred Stock to be withdrawn, the Depositary will deliver to such
holder at the same time a new Depositary Receipt evidencing such excess number
of Depositary Shares. Holders of shares of Preferred Stock thus withdrawn will
not thereafter be entitled to deposit such shares under the Deposit Agreement or
to receive Depositary Shares therefor. Fleet does not expect that there will be
any public trading market for the Preferred Stock except as represented by the
Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a fraction of
one cent, and any balance not so distributed shall be added to and treated as
part of the next sum received by the Depositary for distribution to record
holders of Depositary Shares.
In the event of a distribution other than in cash (including, without
limitation, distributions resulting from stock dividends, splits or plans of
reorganization), the Depositary will distribute property received by it to the
record holders of Depositary Shares entitled thereto, unless the Depositary
determines that it is not feasible to make such distribution, in which case the
Depositary may, with the approval of Fleet, sell such property and distribute
the net proceeds from such sale to such holders.
The Deposit Agreement will also contain provisions relating to the manner
in which any subscription or similar rights offered by Fleet to holders of the
Preferred Stock shall be made available to holders of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If any Preferred Stock deposited under a Deposit Agreement is subject to
redemption, the related Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever Fleet redeems shares of Preferred Stock held by
the Depositary, the Depositary will redeem as of the same redemption date the
number of Depositary Shares relating to shares of Preferred Stock so redeemed.
If less than all the Depositary Shares are to be redeemed, the Depositary Shares
to be redeemed will be selected pro rata or by lot as may be determined by the
Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to
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receive the moneys payable upon such redemption and any money or other property
to which the holders of such Depositary Shares were entitled upon such
redemption upon surrender to the Depositary of the Depositary Receipts
evidencing such Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the number of shares of Preferred Stock
underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
underlying such Depositary Shares in accordance with such instructions, and
Fleet will agree to take all action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of Preferred Stock to the extent it does not receive
specific instructions from the holders of Depositary Shares relating to such
Preferred Stock.
TAXATION
Owners of Depositary Shares will be treated for Federal income tax purposes
as if they were owners of the Preferred Stock represented by such Depositary
Shares and, accordingly, will be entitled to take into account for Federal
income tax purposes income and deductions to which they would be entitled if
they were holders of such Preferred Stock. In addition, (i) no gain or loss will
be recognized for Federal income tax purposes upon the withdrawal of Preferred
Stock in exchange for Depositary Shares as provided in the Deposit Agreement,
(ii) the tax basis of each share of Preferred Stock to an exchanging owner of
Depositary Shares will, upon such exchange, be the same as the aggregate tax
basis of the Depositary Shares exchanged therefor and (iii) the holding period
for shares of the Preferred Stock in the hands of an exchanging owner of
Depositary Shares who held such Depositary Shares as a capital asset at the time
of the exchange thereof for Preferred Stock will include the period during which
such person owned such Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between Fleet and the Depositary. However, any amendment which materially and
adversely alters the rights of the existing holders of Depositary Shares will
not be effective unless such amendment has been approved by the record holders
of at least a majority of the Depositary Shares then outstanding. A Deposit
Agreement may be terminated by Fleet or the Depositary only if (i) all
outstanding Depositary Shares relating thereto have been redeemed or (ii) there
has been a final distribution in respect of the Preferred Stock of the relevant
series in connection with any liquidation, dissolution or winding up of Fleet
and such distribution has been distributed to the holders of the related
Depositary Shares.
CHARGES OF DEPOSITARY
Fleet will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. Fleet will pay
charges of the Depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of Depositary
Shares will pay other transfer and other taxes and governmental charges and such
other charges as are expressly provided in the Deposit Agreement to be for their
accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all
notices, reports and other communications (including proxy solicitation
materials) from Fleet which are delivered to the Depositary and which Fleet is
required to furnish to the holders of the Preferred Stock.
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Neither the Depositary nor Fleet will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of Fleet and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, on information provided by persons presenting
Preferred Stock for deposit, holders of Depositary Shares or other persons
believed to be competent and on documents believed to be genuine.
Any record holder of Depositary Shares who has been a holder for at least
six months or who holds at least five percent of the outstanding shares of
capital stock of Fleet will be entitled to inspect the transfer books relating
to the Depositary Shares and the list of record holders of Depositary Shares
upon certification to the Depositary that such holder is acting in good faith
and that such inspection is for a proper purpose.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to Fleet notice of the
Depositary's election to do so, and Fleet may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000.
DESCRIPTION OF EXISTING PREFERRED STOCK
GENERAL
The following summary does not purport to be complete and is subject in all
respects to the applicable provisions of the Rhode Island Business Corporation
Act (the "RIBCA") and the Articles and By-laws of Fleet.
FLEET $1 PAR PREFERRED STOCK
Fleet $1 Par Preferred Stock (which includes the Preferred Stock), is
issuable in series, with such relative rights, preferences and limitations of
each series (including dividend rights, dividend rate, liquidation preference,
voting rights, conversion rights and terms of redemption (including sinking fund
provisions), redemption price or prices and the number of shares constituting
any series) as may be fixed by the Board of Directors.
Series III Preferred. In the event of the dissolution, liquidation or
winding up of Fleet, holders of shares of the outstanding Series III Preferred
are entitled to receive a distribution of $100 per share, plus accrued and
unpaid dividends, if any.
The holders of Series III Preferred are entitled to receive dividends at
the rate of 10.12% per annum computed on the basis of the issue price thereof of
$100 per share, payable quarterly, before any dividend shall be declared or paid
upon the Common Stock or the Junior Preferred Stock. The dividends on Series III
Preferred are cumulative. The Series III Preferred is redeemable, in whole or in
part, at Fleet's option, on and after June 1, 1996, commencing at $105.06 per
share and declining ratably on June 1 of each year to $100 per share on or after
June 1, 2001, plus, in each case, accrued and unpaid dividends, if any.
Except as indicated below or except as expressly required by applicable
law, the holders of the Series III Preferred are not entitled to vote. If the
equivalent of six quarterly dividends payable on the Series III Preferred or any
other class or series of preferred stock (other than any other class of
preferred stock expressly entitled to elect additional directors by a separate
and distinct vote) are in default, the number of directors of Fleet will be
increased by two (without duplication of any increase made pursuant to the terms
of any other series of preferred stock of Fleet), and the holders of the Series
III Preferred, voting as a single class with the holders of shares of any one or
more other series of Fleet $1 Par Preferred Stock (other than any other class of
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preferred stock expressly entitled to elect additional directors by a separate
and distinct vote) and any other class of Fleet preferred stock ranking on a
parity with the Series III Preferred either as to dividends or distribution of
assets and upon which like voting rights have been conferred and are
exercisable, will be entitled to elect two directors to fill each of the two
newly-created directorships. Such right shall continue until full cumulative
dividends for all past dividend periods on all preferred shares of Fleet (other
than any other class of preferred stock expressly entitled to elect additional
directors by a separate and distinct vote), including any shares of the Series
III Preferred, have been paid or declared and set apart for payment. Any such
elected directors shall serve until Fleet's next annual meeting of stockholders
(notwithstanding that prior to the end of such term the dividend default shall
cease to exist) or until their respective successors shall be elected and
qualify.
The affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of the Series III Preferred is required for any amendment of
the Articles (or any certificate supplemental thereto) which will adversely
affect the powers, preferences, privileges or rights of the Series III
Preferred. The affirmative vote or consent of the holders of at least 66 2/3% of
the outstanding shares of the Series III Preferred and any other series of Fleet
$1 Par Preferred Stock ranking on a parity with the Series III Preferred either
as to dividends or upon liquidation, voting as a single class without regard to
series, is required to issue, authorize or increase the authorized amount of, or
issue or authorize any obligation or security convertible into or evidencing a
right to purchase, any additional class or series of stock ranking prior to the
Series III Preferred as to dividends or upon liquidation, or to reclassify any
authorized stock of Fleet into such prior shares.
Series IV Preferred. In the event of the dissolution, liquidation or
winding up of Fleet, holders of shares of the outstanding Series IV Preferred
are entitled to receive a distribution of $100 per share, plus accrued and
unpaid dividends, if any.
The holders of Series IV Preferred are entitled to receive dividends at the
rate of 9.375% per annum computed on the basis of the issue price thereof of
$100 per share, payable quarterly, before any dividend shall be declared or paid
upon the Common Stock or the Junior Preferred Stock. The dividends on Series IV
Preferred are cumulative. The Series IV Preferred is redeemable, in whole or in
part, at Fleet's option, on and after December 1, 1996, at $100 per share, plus
accrued and unpaid dividends, if any.
Except as indicated below or except as expressly required by applicable
law, the holders of the Series IV Preferred are not entitled to vote. If the
equivalent of six quarterly dividends payable on the Series IV Preferred or any
other class or series of preferred stock are in default (other than any other
class of preferred stock expressly entitled to elect additional directors by a
separate and distinct vote), the number of directors of Fleet will be increased
by two (without duplication of any increase made pursuant to the terms of any
other series of preferred stock of Fleet), and the holders of the Series IV
Preferred, voting as a single class with the holders of shares of any one or
more other series of Fleet $1 Par Preferred Stock (other than any other class of
preferred stock expressly entitled to elect additional directors by a separate
and distinct vote) and any other class of Fleet preferred stock ranking on a
parity with the Series IV Preferred either as to dividends or distribution of
assets and upon which like voting rights have been conferred and are
exercisable, will be entitled to elect such directors to fill each of the two
newly-created directorships. Such right shall continue until full cumulative
dividends for all past dividend periods on all preferred shares of Fleet (other
than any other class of preferred stock expressly entitled to elect additional
directors by a separate and distinct vote), including any shares of the Series
IV Preferred, have been paid or declared and set apart for payment. Any such
elected directors shall serve until Fleet's next annual meeting of stockholders
(notwithstanding that prior to the end of such term the dividend default shall
cease to exist) or until their respective successors shall be elected and
qualify.
The affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of the Series IV Preferred is required for any amendment of
the Articles (or any certificate supplemental thereto) which will adversely
affect the powers, preferences, privileges or rights of the Series IV Preferred.
The affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of the Series IV Preferred and any other series of Fleet $1
Par Preferred Stock ranking on a parity with the Series IV Preferred either as
to dividends or upon liquidation, voting as a single class without regard to
series, is required to issue, authorize or increase the
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authorized amount of, or issue or authorize any obligation or security
convertible into or evidencing a right to purchase, any additional class or
series of stock ranking prior to the Series IV Preferred as to dividends or upon
liquidation, or to reclassify any authorized stock of Fleet into such prior
shares.
Dual Convertible Preferred Stock. The Dual Convertible Preferred Stock has
no voting rights except as provided by Rhode Island law or as indicated below.
The Dual Convertible Preferred Stock is not entitled to vote for the election of
directors in any circumstances, including dividend arrearages, and the holders
thereof have agreed to vote the Dual Convertible Preferred Stock as directed by
Fleet's board of directors on any matters upon which the shares are entitled to
vote under Rhode Island law, except on those matters adversely affecting the
rights of holders of Dual Convertible Preferred Stock. The affirmative vote or
consent of the holders of at least 66 2/3% of the outstanding shares of Dual
Convertible Preferred Stock, voting as a class, given in person or by proxy,
either in writing or by resolution adopted at a special meeting called for the
purpose, is required to authorize any new class of equity securities of Fleet to
which the Dual Convertible Preferred Stock ranks junior, whether with respect to
dividends or upon liquidation, dissolution, winding up or otherwise. In
addition, the affirmative vote or consent of the holders of at least 66 2/3% of
the outstanding shares of Dual Convertible Preferred Stock, voting as a class,
given in person or by proxy, either in writing or by resolution adopted at a
special meeting called for the purpose, shall be required for any amendment of
Fleet's Articles (or the certificate of designation of the Dual Convertible
Preferred Stock), which would affect materially and adversely the specified
rights, preferences, privileges or voting rights of shares of Dual Convertible
Preferred Stock.
The holders of Dual Convertible Preferred Stock are entitled to dividends
equal to one-half of the total dividends declared (after the first $15 million
in dividends), if any, by Fleet Banking Group on its common stock. Such
dividends, if accrued and unpaid, will be cumulative. In the event of the
liquidation, dissolution or winding up of Fleet, the holders of the outstanding
Dual Convertible Preferred Stock are entitled to receive a distribution of $200
per share, plus accrued and unpaid dividends, if any.
On July 31, 1991, the date of issuance of the Dual Convertible Preferred
Stock, Fleet granted to the partnerships which purchased the Dual Convertible
Preferred Stock (the "Partnerships") rights (the "DCP Rights") to purchase
6,500,000 shares of Common Stock at $17.65 per share.
The Dual Convertible Preferred Stock is convertible into Common Stock at a
conversion price of $17.65 per share at any time. The total number of shares
issuable upon such conversion is 16,033,994 shares, subject to customary
anti-dilution adjustments. If any of such stock is converted prior to July 12,
2001, all of such stock must be converted. After July 12, 2001, any holder of
Dual Convertible Preferred Stock may convert its stock into Common Stock
independently of any other holder.
The Dual Convertible Preferred Stock is also convertible into 50% of the
common stock of Fleet Banking Group at any time after the later of (i) July 12,
1995 and (ii) the date on which the Partnerships distribute all the shares of
Dual Convertible Preferred Stock then held by them to the partners therein
(which distribution date will be July 12, 1997 unless the Federal Reserve Board
consents to an alternative distribution date, but in no event earlier than July
12, 1995). The Dual Convertible Preferred Stock is also convertible into Fleet
Banking Group common stock on an earlier date in the event that the quotient of
(i) Fleet's Tier 1 capital as of the date of determination (adjusted to include
goodwill of Fleet as of July 12, 1991) divided by (ii) total assets, falls below
3%. The Dual Convertible Preferred Stock is not convertible into Fleet Banking
Group common stock after July 12, 2001 or at any time while it is held by the
Partnerships. After the Dual Convertible Preferred Stock becomes convertible
into Fleet Banking Group common stock, the holders of the Dual Convertible
Preferred Stock will have the right to obtain an appraisal of the fair value of
the common stock of Fleet Banking Group (the "Appraisal") as if all such shares
were to be sold to a third party in a transaction reflecting a control premium.
If such Appraisal is acceptable to the holders of the Dual Convertible Preferred
Stock, the Dual Convertible Preferred Stock may be converted into 50% of the
common stock of Fleet Banking Group on or after the date that is six months
after such acceptance or, in the case of the earlier date due to the capital
deficiency described above, on or after the date that is 60 days after the
notice of such deficiency. During the period after acceptance but prior to the
date on which such shares become convertible, Fleet will have the option to
redeem the Dual Convertible Preferred Stock at a redemption price
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equal to 50% of the Appraisal price less the sum of (i) the market value of the
shares of Common Stock into which the Dual Convertible Preferred Stock is then
convertible (and such shares of Common Stock shall be distributed to the holders
of Dual Convertible Preferred Stock) and (ii) the value of the DCP Rights. Fleet
has the option to pay such redemption price in cash or in any combination of
Fleet securities having a realizable market value equal to such redemption
price. If Fleet does not exercise this option, the holders of the Dual
Convertible Preferred Stock may convert their shares into 50% of the common
stock of Fleet Banking Group. Any such conversion must be for all of the Dual
Convertible Preferred Stock.
Junior Preferred Stock. The Junior Preferred Stock will be issued upon the
exercise of a Right (as hereinafter defined) issued to holders of the Common
Stock. As of the date of this Prospectus, there were 1,500,000 shares of Fleet
$1 Par Preferred Stock reserved for issuance upon the exercise of the Rights.
See "-- Description of Common Stock -- Preferred Share Purchase Rights". Shares
of Junior Preferred Stock purchasable upon exercise of the Rights will rank
junior to the Fleet $1 Par Preferred Stock and the Fleet $20 Par Adjustable Rate
Preferred Stock and will not be redeemable. Each share of Junior Preferred Stock
will, subject to the rights of such senior securities of Fleet, be entitled to a
preferential cumulative quarterly dividend payment equal to the greater of $1.00
per share or, subject to certain adjustments, 100 times the dividend declared
per share of Common Stock. Upon the liquidation, dissolution or winding up of
Fleet, the holders of the Junior Preferred Stock will, subject to the rights of
such senior securities, be entitled to a preferential liquidation payment equal
to the greater of $1.00 per share plus all accrued and unpaid dividends or 100
times the payment made per share of Common Stock. Finally, in the event of any
merger, consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Junior Preferred Stock will, subject to the rights of
such senior securities, be entitled to receive 100 times the amount received per
share of Common Stock. Each share of Junior Preferred Stock will have 100 votes,
voting together with the Common Stock. The rights of the Junior Preferred Stock
are protected by customary antidilution provisions.
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DESCRIPTION OF COMMON STOCK
GENERAL
Holders of the Common Stock are entitled to receive dividends when, as and
if declared by the Board of Directors out of any funds legally available
therefor, and are entitled upon liquidation, after claims of creditors and
preferences of the Preferred Stock, and any other class or series of preferred
stock at the time outstanding, to receive pro rata the net assets of Fleet.
Dividends are paid on the Common Stock only if all dividends on the outstanding
series of Preferred Stock, and any other class or series of preferred stock at
the time outstanding, for the then-current period and, in the case of Cumulative
Preferred Stock, all prior periods have been paid or provided for.
Fleet $1 Par Preferred Stock and any other class of preferred stock have,
or upon issuance will have, preference over the Common Stock with respect to the
payment of dividends and the distribution of assets in the event of liquidation
or dissolution of Fleet and such other preferences as may be fixed by the Board
of Directors.
The holders of the Common Stock are entitled to one vote for each share
held and are vested with all of the voting power except as the Board of
Directors has provided with respect to outstanding preferred stock or may
provide, in the future, with respect to Preferred Stock or any other class or
series of preferred stock which it may hereafter authorize. See "Description of
Existing Preferred Stock". Shares of Common Stock are not redeemable and have no
subscription, conversion or preemptive rights.
The affirmative vote of not less than 80% of Fleet's outstanding voting
stock, voting separately as a class, is required for certain Business
Combinations between Fleet and/or its subsidiaries and persons owning 10% or
more of its voting stock. See "Selected Provisions in the Articles of Fleet;
Business Combinations with Related Persons".
The Common Stock is listed on the New York Stock Exchange. The outstanding
shares of Common Stock are, and the shares to be issued in connection with any
offering hereunder will be, validly issued, fully paid and non-assessable and
the holders thereof are not, and will not be, subject to any liability as
stockholders.
TRANSFER AGENT AND REGISTRAR.
The Transfer Agent and Registrar for the Fleet Common Stock is Fleet-RI.
RESTRICTIONS ON OWNERSHIP.
The Bank Holding Company Act (the "BHCA") requires any "bank holding
company", as such term is defined therein, to obtain the approval of the Federal
Reserve Board prior to the acquisition of 5% or more of the Common Stock. Any
person other than a bank holding company is required to obtain prior approval of
the Federal Reserve Board to acquire 10% or more of the Common Stock under the
Change in Bank Control Act (the "CBCA"). The Partnerships which purchased the
Dual Convertible Preferred Stock made a filing under the CBCA because of their
acquisition of such stock. Any holder of 25% or more of the Common Stock (or a
holder of 5% or more if such holder otherwise exercises a "controlling
influence" over Fleet) is subject to regulation as a bank holding company under
the BHCA.
PREFERRED SHARE PURCHASE RIGHTS
On November 21, 1990, the Board of Directors of Fleet declared a dividend
of one Preferred Share Purchase Right (a "Right") for each outstanding share of
Common Stock of Fleet. The dividend was paid on December 4, 1990 to the
shareholders of record on that date. Each Right, when exercisable, will entitle
the registered holder to purchase from Fleet one one-hundredth of a share of
Junior Preferred Stock at an exercise price of $50 per one one-hundredth of a
share of Junior Preferred Stock (the "Purchase Price"), subject to certain
adjustments. Until the Distribution Date (as hereinafter defined), Fleet will
issue one Right with each share of Common Stock. The following summary 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 Rights Agreement dated as of November
21,
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1990 between Fleet and Fleet-RI, as Rights Agent, as amended by a First
Amendment to Rights Agreement dated March 28, 1991 and a Second Amendment to
Rights Agreement dated July 12, 1991 (as amended, the "Rights Agreement"), a
copy of which was filed as an exhibit to the Registration Statement on Form 8-A
filed with the Commission on December 4, 1990 and as exhibits to Fleet's
Amendment to Application or Report on Form 8 dated September 6, 1991.
The Rights are not represented by separate certificates and are not
exercisable or transferable apart from the Common Stock until the earlier to
occur of (i) the tenth day after a public announcement by Fleet (x) that a
person or group of affiliated or associated persons has acquired, or obtained
the right to acquire, beneficial ownership (as defined in the Rights Agreement)
of 10% or more (or, in the case of an institutional investor, acting in the
ordinary course of business and not with the purpose of changing or influencing
control of Fleet (a "Qualifying Investor"), 15% or more) of the outstanding
shares of Common Stock, (y) that any person or group of affiliated or associated
persons, which beneficially owned 10% or more (or, in the case of a Qualifying
Investor, 15% or more) of the outstanding shares on the Declaration Date, or
which acquired beneficial ownership of 10% or more (or, in the case of a
Qualifying Investor, 15% or more) of the outstanding shares as a result of any
repurchase of shares by Fleet, thereafter acquired beneficial ownership of
additional shares constituting 1% or more of the outstanding shares, or (z) that
any person who was a Qualifying Investor owning 10% or more of the outstanding
shares of Common Stock ceased to qualify as a Qualifying Investor and thereafter
acquired beneficial ownership of additional shares constituting 1% or more of
the outstanding shares (any person described in clause (x), (y) or (z) being an
"Acquiring Person"); and (ii) the tenth day (or such later day as may be
determined by action of the Board of Directors of Fleet prior to such time as
any person becomes an Acquiring Person) after the date of the commencement of a
tender or exchange offer by any person (other than Fleet) to acquire (when added
to any shares as to which such person is the beneficial owner immediately prior
to such commencement) beneficial ownership of 10% or more of the issued and
outstanding shares of Common Stock (the earlier of such dates being called the
"Distribution Date"). On March 28, 1991 and July 12, 1991 the Rights Agreement
was amended to change the definition of an "Acquiring Person" (i) to permit the
sale of the Dual Convertible Preferred Stock and issuance of rights to purchase
Common Stock to the Partnerships and (ii) to permit the Board of Directors of
Fleet to determine that a person who would otherwise be an "Acquiring Person"
had become such inadvertently and therefore allow divestiture of a sufficient
number of shares to avoid such designation.
The Rights will first become exercisable on the Distribution Date and could
then begin trading separately from the Common Stock. The Rights will expire on
November 21, 2000 (the "Final Expiration Date"), unless the Final Expiration
Date is extended or unless the Rights are earlier redeemed by Fleet.
In the event any person becomes an Acquiring Person, the Rights would give
holders (other than such Acquiring Person and its transferees) the right to buy,
for the Purchase Price, Common Stock (or, under certain circumstances, cash,
property or other debt or equity securities ("Common Stock equivalents")) with a
market value of twice the Purchase Price. In addition, at any time after any
person becomes an Acquiring Person, the Board may, at its option and in lieu of
any transaction described in the preceding sentence, exchange the outstanding
and exercisable Rights (other than Rights held by such Acquiring Person and its
transferees) for shares of Common Stock or Common Stock equivalents at an
exchange ratio of one share of Common Stock per Right, subject to certain
adjustments.
In any merger or consolidation involving Fleet after the Rights become
exercisable, each Right will be converted into the right to purchase, for the
Purchase Price, common stock of the surviving corporation (which may be Fleet)
with a market value of twice the Purchase Price. The Board of Directors of Fleet
may amend the Rights Agreement or redeem the Rights for $.01 each at any time
until there is an Acquiring Person. Thereafter, the Board of Directors can amend
the Rights Agreement only to eliminate ambiguities or to provide additional
benefits to the holders of the Rights (other than the Acquiring Person).
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of Fleet, including, without limitation, the right to
vote or to receive dividends.
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The Purchase Price payable, and the number of shares of Junior Preferred
Stock or other securities or property issuable, upon exercise of the Rights, and
the number of outstanding Rights, are subject to customary antidilution
adjustments.
The Rights have certain "anti-takeover" effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire Fleet on
terms not approved by the Board of Directors of Fleet, except pursuant to an
offer conditioned on a substantial number of Rights being acquired. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors prior to the time that there is an Acquiring Person (at
which time holders of the Rights become entitled to exercise their Rights for
shares of Common Stock at one-half the market price), since until such time the
Rights generally may be redeemed by the Board of Directors of Fleet at $.01 per
Right.
SELECTED PROVISIONS IN THE ARTICLES OF FLEET
BUSINESS COMBINATIONS WITH RELATED PERSONS
The Articles require that neither Fleet nor any of its subsidiaries may
engage in a Business Combination with a Related Person unless such Business
Combination (a) was approved by an 80% vote of the Board of Directors prior to
the time the Related Person became such; (b) is approved by a vote of 80% of the
Continuing Directors and a majority of the entire Board and certain conditions
as to price and procedure are complied with; or (c) is approved by a vote of 80%
of Fleet's outstanding shares of Fleet capital stock entitled to vote generally
in the election of directors, voting as a single class. Under the Articles, a
"Business Combination" includes any merger or consolidation of Fleet or any of
its subsidiaries into or with a Related Person or any of its affiliates or
associates; any sale, exchange, lease, transfer or other disposition to or with
a Related Person of all, substantially all or any Substantial Part (defined as
assets having a value of more than 5% of the total consolidated assets of Fleet)
of the assets of Fleet or any of its subsidiaries; any purchase, exchange, lease
or other acquisition by Fleet or any of its subsidiaries of all or any
Substantial Part of the assets or business of a Related Person or any of its
affiliates or associates; any reclassification of securities, recapitalization
or other transaction which has the effect, directly or indirectly, of increasing
the proportionate amount of voting shares of Fleet or any subsidiary which are
beneficially owned by a Related Person; and the acquisition by a Related Person
of beneficial ownership of voting securities, securities convertible into voting
securities or any rights, warrants or options to acquire voting securities of a
subsidiary of Fleet; a "Related Person" includes any person who is the
beneficial owner of 10% or more of Fleet's voting shares prior to the
consummation of a Business Combination or any person who is an affiliate of
Fleet and was the beneficial owner of 10% or more of Fleet's voting shares at
any time within the five years preceding the date on which a binding agreement
providing for a Business Combination is authorized by the Board of Directors;
and the "Continuing Directors" are those individuals who were members of the
Fleet Board of Directors prior to the time a Related Person became the
beneficial owner of 10% or more of Fleet's voting stock or those individuals
designated as Continuing Directors (prior to their initial election as
directors) by a majority of the then Continuing Directors. To amend these
provisions, a super majority vote (80%) of the Board of Directors, a majority
vote of the Continuing Directors and a super majority vote (80%) of the
stockholders is required unless the amendment is recommended to the stockholders
by a majority of the Board of Directors and not less than 80% of the Continuing
Directors, in which event only the vote provided under Rhode Island law is
required.
DIRECTORS
The Articles contain a number of additional provisions which are intended
to delay an insurgent's ability to take control of Fleet's Board of Directors,
even after an insurgent has obtained majority ownership of the Fleet Common
Stock. The Articles provide for a classified Board of Directors, consisting of
three classes of directors serving staggered three-year terms. Directors of
Fleet may only be removed for cause and only (a) by a vote of the holders of 80%
of the outstanding shares of Fleet stock entitled to vote thereon voting
separately as a class at a meeting called for that purpose or (b) by a vote of a
majority of the Continuing Directors and a majority of the Board of Directors as
constituted at that time. Vacancies on the Board of Directors, whether
28
<PAGE> 31
due to resignation, death, incapacity or an increase in the number of directors,
may only be filled by the Board, acting by a vote of 80% of the directors then
in office. The Articles provide that the number of directors of Fleet (exclusive
of directors to be elected by the holders of any one or more series of the
Preferred Stock voting separately as a class or classes) that shall constitute
the Board of Directors shall be 13, unless otherwise determined by resolution
adopted by a super majority vote (80%) of the Board of Directors and a majority
of the Continuing Directors. Pursuant to such an adopted resolution, the number
of directors that may serve is currently fixed at twenty-two, except in the
event that quarterly dividends are not paid on non-voting Preferred Stock as
described above, and may only be increased by the affirmative vote of 80% of the
Board of Directors and a majority of the Continuing Directors. A super majority
vote (80%) of the Board of Directors, a majority vote of the Continuing
Directors and a super majority vote (80%) of the outstanding shares of Fleet
stock entitled to vote thereon voting separately as a class are required to
amend any of these provisions.
DESCRIPTION OF WARRANTS
Fleet may issue Warrants for the purchase of Debt Securities, Preferred
Stock, or Common Stock. Warrants may be issued independently or together with
Debt Securities, Preferred Stock, or Common Stock offered by any Prospectus
Supplement and may be attached to or separate from any such Securities. Each
series of Warrants will be issued under a separate warrant agreement (a "Warrant
Agreement") to be entered into between Fleet and a bank or trust company, as
warrant agent (the "Warrant Agent"). The Warrant Agent will act solely as an
agent of the Company in connection with the Warrants and will not assume any
obligation or relationship of agency or trust for or with any holders or
beneficial owners of Warrants. The following summary of certain provisions of
the Warrants does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the provisions of the Warrant Agreement that will
be filed with the Commission in connection with the offering of such Warrants.
DEBT WARRANTS
The Prospectus Supplement relating to a particular issue of Debt Warrants
will describe the terms of such Debt Warrants, including the following: (a) the
title of such Debt Warrants; (b) the offering price for such Debt Warrants, if
any; (c) the aggregate number of such Debt Warrants; (d) the designation and
terms of the Debt Securities purchasable upon exercise of such Debt Warrants;
(e) if applicable, the designation and terms of the Debt Securities with which
such Debt Warrants are issued and the number of such Debt Warrants issued with
each such Debt Security; (f) if applicable, the date from and after which such
Debt Warrants and any Debt Securities issued therewith will be separately
transferable; (g) the principal amount of Debt Securities purchasable upon
exercise of a Debt Warrant and the price at which such principal amount of Debt
Securities may be purchased upon exercise (which price may be payable in cash,
securities, or other property); (h) the date on which the right to exercise such
Debt Warrants shall commence and the date on which such right shall expire; (i)
if applicable, the minimum or maximum amount of such Debt Warrants that may be
exercised at any one time; (j) whether the Debt Warrants represented by the Debt
Warrant certificates or Debt Securities that may be issued upon exercise of the
Debt Warrants will be issued in registered or bearer form; (k) information with
respect to book-entry procedures, if any; (l) the currency or currency units in
which the offering price, if any, and the exercise price are payable; (m) if
applicable, a discussion of material United States Federal income tax
considerations; (n) the antidilution provisions of such Debt Warrants, if any;
(o) the redemption or call provisions, if any, applicable to such Debt Warrants;
and (p) any additional terms of the Debt Warrants, including terms, procedures,
and limitations relating to the exchange and exercise of such Debt Warrants.
STOCK WARRANTS
The Prospectus Supplement relating to any particular issue of Preferred
Stock Warrants or Common Stock Warrants will describe the terms of such
Warrants, including the following: (a) the title of such Warrants; (b) the
offering price for such Warrants, if any; (c) the aggregate number of such
Warrants; (d) the designation and terms of the Common Stock or Preferred Stock
purchasable upon exercise of such Warrants; (e) if applicable, the designation
and terms of the Securities with which such Warrants are issued
29
<PAGE> 32
and the number of such Warrants issued with each such Security; (f) if
applicable, the date from and after which such Warrants and any Securities
issued therewith will be separately transferable; (g) the number of shares of
Common Stock or Preferred Stock purchasable upon exercise of a Warrant and the
price at which such shares may be purchased upon exercise; (h) the date on which
the right to exercise such Warrants shall commence and the date on which such
right shall expire; (i) if applicable, the minimum or maximum amount of such
Warrants that may be exercised at any one time; (j) the currency or currency
units in which the offering price, if any, and the exercise price are payable;
(k) if applicable, a discussion of material United States federal income tax
considerations; (l) the antidilution provisions of such Warrants, if any; (m)
the redemption or call provisions, if any, applicable to such Warrants; and (n)
any additional terms of the Warrants, including terms, procedures, and
limitations relating to the exchange and exercise of such Warrants.
30
<PAGE> 33
PLAN OF DISTRIBUTION
Fleet may sell Securities to or through underwriters, and also may sell
Securities through agents (which are registered broker-dealers or banks) which
may be affiliates.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices (which may be changed from time
to time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Each Prospectus
Supplement will describe the method of distribution of the Securities. Certain
restrictions relating to the distribution of Securities in connection with an
International Offering will be set forth in the applicable Prospectus
Supplement.
In connection with the sale of Securities, underwriters or agents acting on
Fleet's behalf may receive compensation from Fleet or from purchasers of
Securities for whom they may act as agents, in the form of discounts,
concessions or commissions. The underwriters, dealers and agents that
participate in the distribution of Securities may be deemed to be underwriters
under the Act and any discounts or commissions received by them and any profits
on the resale of Securities by them may be deemed to be underwriting discounts
and commissions under the Act. Any such underwriter will be identified and any
such compensation will be described in the applicable Prospectus Supplement.
Under agreements which may be entered into by Fleet, underwriters, dealers
and agents who participate in the distribution of Securities may be entitled to
indemnification by Fleet against certain liabilities, including liabilities
under the Act, and to certain rights of contribution from Fleet.
If so indicated in the applicable Prospectus Supplement, Fleet will
authorize underwriters or other persons acting as Fleet's agents to solicit
offers by certain institutions to purchase Debt Securities, Preferred Stock,
Depositary Shares or Debt Warrants from Fleet pursuant to delayed delivery
contracts providing for payment and delivery on a future date or dates stated in
the applicable Prospectus Supplement. Each such contract will be for an amount
not less than, and the aggregate amount of such securities sold pursuant to such
contracts shall not be less nor more than, the respective amounts stated in the
applicable Prospectus Supplement. Institutions with which such contracts may be
made include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others, but in
all cases such institutions must be approved by Fleet. The obligations of any
purchaser under any such contract will not be subject to any condition except
that (1) the purchase of the Debt Securities, Preferred Stock, Depositary Shares
or Debt Warrants shall not at the time of delivery be prohibited under the laws
of the jurisdiction to which such purchaser is subject, and (2) if the Debt
Securities, Preferred Stock, Depositary Shares or Debt Warrants are also being
sold to underwriters acting as principals for their own account, the
underwriters shall have purchased such Debt Securities, Preferred Stock,
Depositary Shares or Debt Warrants not sold for delayed delivery. The
underwriters and such other persons will not have any responsibility in respect
of the validity or performance of such contracts.
Certain of the underwriters and their associates and affiliates may be
customers of, have borrowing relationships with, engage in other transactions
with, and/or perform services, including investment banking services, for, Fleet
or one or more of its affiliates in the ordinary course of business.
EXPERTS
The consolidated financial statements of Fleet appearing in Fleet's 1993
Annual Report to Stockholders and incorporated by reference in Fleet's 1993
Annual Report on Form 10-K for the year ended December 31, 1993, incorporated by
reference herein (and elsewhere in the Registration Statement) have been
incorporated by reference herein (and elsewhere in the Registration Statement)
in reliance upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, and upon the authority of said firm as experts in accounting
and auditing.
31
<PAGE> 34
LEGAL OPINIONS
The validity of the Notes offered hereby will be passed upon for Fleet by
Edwards & Angell, One Hospital Trust Plaza, Providence, Rhode Island 02903, and
for the Underwriters by Cravath, Swaine & Moore, 825 Eighth Avenue, New York,
New York 10019. V. Duncan Johnson, a partner of Edwards & Angell, is a director
of Fleet-RI, Fleet-MA and Fleet-CT and beneficially owns 4,052 shares of Common
Stock.
32
<PAGE> 35
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS SHALL
NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
OCTOBER 28, 1994
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1994)(LOGO)
$
FLEET FINANCIAL GROUP, INC.
% NOTES DUE
------------------------
Interest on the Notes offered hereby is payable semiannually on
and of each year, commencing The Notes will mature on
, and may not be redeemed prior to maturity. See "Description of
Notes".
The Notes will be represented by Global Securities registered in the name
of the nominee of The Depository Trust Company (the "Depository"). Interests in
the Global Securities will be shown on, and transfers thereof will be effected
only through, records maintained by the Depository and its participants. Except
as provided herein, Notes in definitive form will not be issued. Settlement for
the Notes will be made in immediately available funds. The Notes will trade in
the Depository's Same-Day Funds Settlement System until maturity, and secondary
market trading activity for the Notes will therefore settle in immediately
available funds. All payments of principal and interest will be made by Fleet
Financial Group, Inc. ("Fleet") in immediately available funds. See "Description
of Notes -- Same-Day Settlement and Payment".
THE NOTES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY
BANK OR NONBANK SUBSIDIARY OF FLEET AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, BANK INSURANCE FUND OR ANY OTHER GOVERNMENT 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 NOR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) FLEET(1)(3)
- -----------------------------------------------------------------------------------------------
Per Note........................... % % %
Total.............................. $ $ $
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from , 1994.
(2) Fleet has agreed to indemnify the several Underwriters against certain
liabilities under the Securities Act of 1933. See "Underwriting".
(3) Before deducting expenses payable by Fleet estimated at $175,000.
------------------------
The Notes are offered by the several Underwriters, subject to prior sale,
when, as and if issued to and accepted by them, subject to approval of certain
legal matters by counsel for the Underwriters and 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 the Notes will be
delivered in book-entry form only, on or about , 1994, through the
facilities of The Depository Trust Company.
------------------------
The date of this Prospectus Supplement is , 1994.
<PAGE> 36
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
RECENT DEVELOPMENTS
Fleet reported net income for the quarter ended September 30, 1994, of 164
million, or $1.01 per fully diluted share, compared to $127 million, or $.78 per
fully diluted share for the third quarter of 1993. For the first nine months of
1994, net income was $448 million, or $2.70 per fully diluted share, an increase
of 27% from the $352 million, or $2.16 per fully diluted share, for the first
nine months of 1993.
Net interest income for the third quarter decreased to $505 million from
the $512 million recorded in the second quarter as a result of the impact of
rising short-term interest rates on Fleet's investment portfolio. The net
interest margin for the third quarter was 4.45% compared to 4.66% in the second
quarter of 1994. The effect of the narrower margin on net interest income, also
the result of rising interest rates, was substantially offset by growth in
Fleet's earning assets.
Noninterest income for the third quarter was $288 million compared to $318
million, excluding $127 million of securities gain, in the corresponding quarter
in the prior year. The decrease is due primarily to a reduction in mortgage
banking income as a result of a continuing decline in mortgage refinancings.
Noninterest expense totaled $501 million in the third quarter, compared to
$562 million for the third quarter of 1993, prior to a $125 million
restructuring charge in 1993. This $61 million decrease is primarily
attributable to reductions resulting from Fleet's efficiency improvement program
and a reduction in mortgage servicing amortization resulting from a significant
decline in mortgage refinancings. Included in noninterest expense is the
previously announced $7 million restructuring charge recorded at Fleet Mortgage
Group, Inc., Fleet's mortgage banking subsidiary ("FMG").
Fleet's provision for credit losses was $11 million in the third quarter.
Net charge-offs for the quarter totaled $19 million, compared to $71 million in
1993. Both of these items reflect a 29% decrease in nonperforming assets over
the past year to $526 million at September 30, 1994.
Fleet's reserve for credit losses was $969 million at September 30, 1994,
representing 3.58% of loans, compared to $977 million, or 3.65% of loans at June
30, 1994.
At September 30, 1994, Fleet had total assets of $47.0 billion, while total
loans and leases were $27.0 billion at the same date, compared with $46.9
billion of total assets and $26.3 billion of total loans and leases at September
30, 1993. Average loans and leases increased more than $600 million from the
second quarter primarily in commercial and consumer loans, as average loan
growth was noted in all Fleet banking markets, especially the Massachusetts, New
York and Rhode Island franchises. Stockholders' equity totaled $3.4 billion at
September 30, 1994, compared to $3.6 billion at June 30, 1994. The decrease
reflects the previously announced repurchase of common shares in connection with
the NBB Bancorp, Inc. transaction.
All 1994 financial information set forth above has been restated to include
the acquisition of Sterling Bancshares Corporation as if it had occurred on
January 1, 1994.
S-2
<PAGE> 37
SUMMARY CONSOLIDATED FINANCIAL DATA
The following unaudited consolidated summary sets forth selected financial
data for Fleet and its subsidiaries for the six months ended June 30, 1994 and
1993 and for each of the years in the five-year period ending December 31, 1993.
The following summary should be read in conjunction with the financial
information appearing elsewhere in this Prospectus and Prospectus Supplement
incorporated herein by reference to other documents. See "Incorporation of
Certain Documents by Reference" in the accompanying Prospectus. The summary data
for the six months ended June 30, 1994 and 1993 is based on unaudited financial
statements which include all adjustments that, in the opinion of management of
Fleet, are necessary for a fair presentation of the results of the respective
interim periods. The results of operations for the six months ended June 30,
1994 are not necessarily indicative of the results for any other period. Certain
amounts in prior periods have been reclassified to conform to current year
presentation.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1994(1) 1993 1993 1992 1991(2) 1990(3) 1989
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated Summary of
Operations:
Interest income............. $ 1,565 $ 1,616 $ 3,212 $ 3,416 $ 3,329 $ 3,279 $ 3,068
Interest expense............ 575 601 1,161 1,463 1,930 2,126 1,816
Net interest income......... 990 1,015 2,051 1,953 1,399 1,153 1,252
Provision for credit
losses.................... 34 155 271 486 509 762 160
Net interest income after
provision for credit
losses.................... 956 860 1,780 1,467 890 391 1,092
Noninterest income.......... 575 700 1,465 1,368 1,082 735 576
Noninterest expense......... 1,050 1,184 2,424 2,318 1,819 1,289 1,128
Income (loss) before income
taxes..................... 481 376 821 517 153 (163) 540
Income tax expense
(benefit)................. 191 153 327 228 55 (89) 169
Net income (loss) before
minority interest......... 290 223 494 289 98 (74) 371
Minority interest in FMG
(after-tax)(4)............ 5 (2) 6 9 0 0 0
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)........... $ 285 $ 225 $ 488 $ 280 $ 98 $ (74) $ 371
========== ========== ========== ========== ========== ========== ==========
Earnings (loss) per common
share (5):
Primary..................... $ 1.74 $ 1.39 $ 3.01 $ 1.78 $ .67 $ (.75) $ 3.34
Fully diluted............... 1.74 1.38 3.01 1.77 .67 (.75) 3.30
Weighted average primary
shares outstanding........ 157,920,587 152,621,535 154,666,307 141,469,658 124,966,226 109,415,386 108,706,377
Weighted average fully
diluted shares
outstanding............... 158,139,767 152,936,904 154,899,995 142,778,665 127,092,029 111,259,336 111,025,858
Book value per common
share(6).................... $ 22.82 $ 21.50 $ 22.84 $ 19.50 $ 18.15 $ 17.65 $ 19.87
Cash dividends declared per
common share................ .65 .475 1.025 .825 .80 1.25 1.31
Common dividend payout
ratio(7).................... 31.4% 28.8% 28.7% 36.1% 96.7% --(7) 38.3%
Ratio of Earnings to Fixed
Charges(8):
Excluding interest on
deposits.................. 2.80x 2.73x 2.81x 2.22x 1.32x --(8) 1.93x
Including interest on
deposits.................. 1.80 1.61 1.68 1.34 1.08 --(8) 1.29
Ratio of Earnings to Fixed
Charges and Dividends on
Preferred Stock(9):
Excluding interest on
deposits.................. 2.73 2.62 2.67 2.09 1.31 --(9) 1.91
Including interest on
deposits.................. 1.79 1.60 1.66 1.33 1.08 --(9) 1.29
Consolidated Balance Sheet --
Average Balances:
Total assets................ $ 47,636 $ 45,207 $ 45,966 $ 45,166 $ 38,839 $ 34,363 $ 29,798
Securities held to
maturity(10).............. 855 1,969 2,496 650 6,787 7,127 4,894
Securities available for
sale...................... 14,334 10,482 10,442 11,059 1,376 -- --
Loans and leases, net of
unearned income........... 25,823 26,127 26,144 26,615 23,995 21,027 20,371
Interest-bearing deposits... 24,487 25,411 25,173 26,551 24,248 18,607 16,914
Short-term borrowings(11)... 8,002 5,141 5,971 4,753 3,284 6,366 4,260
Long-term debt/subordinated
notes and
debentures(12)............ 3,364 3,788 3,718 3,127 3,020 2,544 1,809
</TABLE>
S-3
<PAGE> 38
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1994(1) 1993 1993 1992 1991(2) 1990(3) 1989
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Dual Convertible Preferred
Stock(13)................. -- -- -- 283 134 -- --
Stockholders' equity........ 3,634 3,375 3,453 2,611 2,269 2,197 2,182
Consolidated Ratios(14):
Net interest margin (fully
taxable equivalent)....... 4.74% 5.05% 5.02% 4.80% 4.09% 3.92% 4.96%
Return (loss) on average
assets.................... 1.21 1.00 1.06 .62 .25 (.21) 1.25
Return (loss) on average
common stockholders' equity.. 17.25(15) 15.38 16.07 11.01 4.02 (3.93) 17.70
Return (loss) on average
stockholders' equity...... 15.83(15) 13.44 14.14 10.72 4.31 (3.35) 17.02
Average stockholders' equity
to average assets......... 7.63(15)(16) 7.47(16) 7.51(16) 5.78(16) 5.84(16) 6.39 7.32
Tier 1 risk-based capital
ratio(17)................. 11.82 11.57 11.76 10.44 9.77 7.58 7.26
Total risk-based capital
ratio(17)................. 16.59 16.70 16.62 15.38 13.79 11.19 10.70
Period-end reserve for
possible loan and lease
losses to period-end loans
and leases, net of
unearned income........... 3.69 3.94 3.80 3.86 3.81 3.42 1.58
Net charge-offs to average
loans and leases, net of
unearned income........... .41 1.17 1.11 2.05 1.65 1.92 .72
Period-end nonperforming
assets to period-end loans
and leases, net of
unearned income, and other
real estate owned(18)..... 2.12 3.24 2.27 3.68 5.89 6.64 1.84
---------------
<FN>
(1) Effective January 1, 1994, Fleet adopted Financial Accounting Standards
Board (FASB) Statement No. 115, "Accounting for Certain Investments in Debt
and Equity Securities." The standard requires that securities available for
sale be reported at fair value, with unrealized gains or losses reflected
as a separate component of stockholders' equity. Previously, these
securities were recorded at the lower of amortized cost or fair value with
any net unrealized loss included in earnings. In connection with the
adoption of FASB Statement No. 115, Fleet transferred securities netting to
$767 million from the held to maturity portfolio to the available for sale
portfolio. Fleet's Tier 1 capital and total capital ratios do not include
any adjustments for unrealized gains or losses relating to securities
available for sale.
(2) Data for the year ended December 31, 1991 includes results of the banks
acquired in the Bank of New England acquisition from July 14, 1991.
(3) Results for the year ended December 31, 1990 reflect the restatement of
earnings relating to Fleet's accounting for declines in the market value of
its marketable equity securities discussed in Fleet's Current Reports on
Form 8-K dated May 3, 1991 and August 16, 1991 and its Annual Report on
Form 10-K for the year ended December 31, 1991.
(4) For the year ended December 31, 1992, the minority interest deduction for
Fleet Mortgage Group, Inc. ("FMG") totalled approximately 19% of FMG's
earnings from the date of the initial public offering (August 7, 1992) to
the end of the period.
(5) Earnings used in the calculation of primary and fully diluted earnings per
share are adjusted by the dividend requirements of all outstanding
preferred stock. Weighted average primary shares outstanding have been
computed using the historical weighted average shares outstanding and
common stock equivalents relating to stock options, Fleet's Dual
Convertible Preferred Stock and rights to acquire Common Stock issued to
holders of the Dual Convertible Preferred Stock, each outstanding at period
end, and the exercise of stock options as may be appropriate as of the
beginning of the earliest period presented, adjusted to the equivalent
number of shares of Common Stock using the average closing price of Common
Stock for the respective periods presented. Weighted average fully diluted
shares outstanding have been computed as described above using the higher
of the average closing price or closing price of Common Stock for the
respective periods presented to compute the equivalent number of shares of
Common Stock.
(6) Common stockholders' equity (used to compute book value per common share)
is equal to the difference between total assets and total liabilities less
total preferred stockholders' equity. Total assets of Fleet for each
relevant period-end include goodwill and core deposit intangible. Such
goodwill and core deposit intangible amounted to $331 million, $361
million, $341 million, $212 million and $229 million, at December 31, 1993,
1992, 1991, 1990 and 1989, respectively, and $336 million and $354 million
at June 30, 1994 and 1993, respectively. Fleet adopted FASB Statement No.
115 effective January 1, 1994. Fleet's book value per common share for the
six months ended June 30, 1994 includes the average unrealized gains and
losses on securities available for sale. Excluding the impact of FASB
Statement No. 115, Fleet's book value per common share would have been
$24.20 for the six months ended June 30, 1994.
(7) The common dividend payout ratio is equal to the ratio of aggregate common
dividends declared during the indicated period to the consolidated net
income of Fleet during such period. For the year ended December 31, 1990,
common dividends aggregated $137 million and the net loss was $74 million.
(8) Earnings consist of income before income taxes plus fixed charges
(excluding capitalized interest). Fixed charges consist of interest on
short-term debt and long-term debt (including interest related to
capitalized leases and capitalized interest) and one-third of
</TABLE>
S-4
<PAGE> 39
[FN]
rent expense, which approximates the interest component of such expense. In
addition, where indicated, fixed charges include interest on deposits.
Fixed charges exceeded earnings by $164 million (excluding interest on
deposits) and by $164 million (including interest on deposits) for the year
ended December 31, 1990.
(9) Earnings consist of income before income taxes plus fixed charges
(excluding capitalized interest) and the pretax equivalent of dividends on
preferred stock. Fixed charges and dividends on preferred stock consist of
interest on short-term debt and long-term debt (including interest related
to capitalized leases and capitalized interest) and one-third of rent
expense, which approximates the interest component of such expense, plus
the pretax equivalent of dividends on preferred stock. In addition, where
indicated, fixed charges include interest on deposits. The sum of fixed
charges and dividends exceeded earnings by $164 million (excluding interest
on deposits) and by $164 million (including interest on deposits) for the
year ended December 31, 1990.
(10) For a discussion of Fleet's reclassification in 1992 of its "portfolio
securities" to "securities held for sale", see Fleet's Current Report on
Form 8-K dated October 21, 1992.
(11) Short-term borrowings consist mainly of federal funds purchased, securities
sold under agreements to repurchase, commercial paper and bank debt.
(12) Fleet issued $200 million of 7 1/4% Notes due 1999 on September 7, 1994 and
$200 million of 7 1/4% Senior Notes due October 15, 1997 on October 21,
1994.
(13) The Dual Convertible Preferred Stock was issued in 1991 and reclassified to
stockholders' equity as of December 31, 1992.
(14) Interim financial percentages have been annualized, where appropriate.
(15) Fleet adopted FASB Statement No. 115 effective January 1, 1994. Fleet's
return on average common stockholders' equity, return on average
stockholders' equity and average stockholders' equity to average assets
ratios includes the average unrealized gains and losses on securities
available for sale. Excluding the impact of FASB Statement No. 115, Fleet's
return on average common stockholders' equity, return on average
stockholders' equity and average stockholders' equity to average assets
ratios would have been 17.31%, 15.88% and 7.61%, respectively for the six
months ended June 30, 1994.
(16) Excludes $283 million of Fleet's Dual Convertible Preferred Stock at
December 31, 1992 and December 31, 1991 and includes $283 million of
Fleet's Dual Convertible Preferred Stock at June 30, 1994, June 30, 1993
and December 31, 1993. Including the $283 million of Dual Convertible
Preferred Stock, this ratio would be 6.41% and 6.19% at December 31, 1992
and December 31, 1991, respectively. The Dual Convertible Preferred Stock
was reclassified to stockholders' equity as of December 31, 1992.
(17) Calculated using final 1992 risk-based capital guidelines.
(18) Nonperforming assets include loans and leases on a nonaccrual basis, loans
renegotiated due to the financial deterioration of the borrower and OREO,
defined as insubstance foreclosures and other real estate owned.
S-5
<PAGE> 40
MANAGEMENT'S ANALYSIS OF FINANCIAL STATEMENTS
OVERALL PERSPECTIVE
Fleet reported net income for the first six months of 1994 of $285 million,
or $1.74 per fully diluted share, compared to net income of $225 million, or
$1.38 per fully diluted share, for the first six months of 1993. Return on
average assets was 1.21% for the six months ended June 30, 1994, compared to
1.00% in the comparable period of 1993, while return on average common
stockholders' equity was 17.25% and 15.38% for these respective periods. Return
on average assets and return on realized common equity for the second quarter of
1994 were at their highest levels since the first quarter of 1989.
The improved results reflect successful implementation of numerous
efficiency enhancement initiatives during the second quarter, as well as a
continued reduction in asset quality costs. In addition, total loans increased
more than $800 million from the first quarter of 1994, primarily due to the
growth in commercial loans of nearly $500 million. Additional areas of loan
growth during the second quarter of 1994 included commercial real estate and
consumer loans, with increases of $131 million and $180 million, respectively.
On a quarter-to-quarter basis, Fleet recorded earnings of $152 million for
the second quarter of 1994, compared to $119 million for the same period in
1993. Fully diluted earnings per share for the quarter were $0.95, versus $0.72
for the second quarter of 1993. Return on average assets was 1.28% for the
second quarter of 1994, compared to 1.05% for the same period in 1993, while
return on average common stockholders' equity was 19.24% and 15.51% for these
respective periods.
NET INTEREST INCOME
Net interest income on a fully taxable equivalent basis for the six months
ended June 30, 1994 totaled $1,009 million, a decrease of $22 million from the
same period in 1993.
The net interest margin for the six months ended June 30, 1994 was 4.74%,
compared to 5.05% for the first six months of 1993, and 4.70% and 5.06%,
respectively, for the second quarters of 1994 and 1993. The decrease was due in
part to the restructuring of Fleet's bond portfolio at the beginning of the
second quarter of 1994 to shorten the average life of securities in anticipation
of a rising rate environment. The net interest margin was also impacted by
Fleet's decision in 1993 to mitigate its interest rate exposure on
higher-yielding mortgage-backed securities and long-term fixed-rate securities
by selling some of these securities and replacing them with lower-yielding and
shorter maturity securities.
The net interest margin was also negatively impacted by the rising interest
rate environment. In an increasing interest rate environment, Fleet's net
interest margin will initially be negatively impacted as Fleet's
interest-bearing liabilities reprice more rapidly than its interest-earning
assets. This was evident during the first six months of 1994 when the Federal
Reserve Board increased short-term borrowing rates by 125 basis points. While
Fleet increased its prime rate by the same amount, the net interest margin was
negatively impacted since the repricing of Fleet's prime-based interest-earning
assets lagged behind the repricing of its interest-bearing liabilities.
Average interest-earning assets increased $1.8 billion from June 30, 1993
due to net purchases of approximately $2.2 billion of securities, primarily U.S.
Treasury securities, in the first half of 1994. The increase in average
interest-earning assets was primarily funded by increases in short-term
borrowings.
The net interest rate spread decreased 28 basis points in the first six
months of 1994 compared to the first six months of 1993, and 34 basis points in
the quarter ended June 30, 1994 versus the comparable period in 1993.
NONINTEREST INCOME
Noninterest income totaled $575 million for the first six months of 1994
compared to $700 million for the first six months of 1993. Operating noninterest
income (excluding securities available for sale gains and trading income)
totaled $549 million for the first six months of 1994, a 1% decrease from the
$556 million
S-6
<PAGE> 41
reported for the comparable period in 1993, and $250 million for the three
months ended June 30, 1994, an 8% decrease from the $271 million reported for
the same period in 1993.
Mortgage banking revenue decreased from $196 million in the first six
months of 1993 to $184 million in the first six months of 1994 and from $92
million in the second quarter of 1993 to $84 million in the second quarter of
1994. The decrease was largely due to lower mortgage production revenue
(primarily the component relating to gains on sales of loans) as a result of a
less favorable interest rate environment. In addition, FMG recognized $67
million in gains on sales of loans in the first half of 1993 compared to $24
million in the first half of 1994, a 64% decline.
Net loan servicing revenue, which had been adversely affected throughout
1993 by prepayments, increased $25 million, or 24%, in the first six months of
1994 compared to the same period in 1993 and $19 million, or 44%, in the second
quarter of 1994, compared to the second quarter of 1993. These increases were
primarily due to accelerated amortization charges on capitalized excess
servicing fees taken during the second quarter of 1993 and an 8% growth in FMG's
loan servicing portfolio from $68.2 billion at June 30, 1993 to $73.4 billion at
June 30, 1994.
Other operating noninterest income decreased $16 million on a
quarter-to-quarter basis primarily due to a decline in the value of investments
at Fleet Equity Partners, coupled with a $9 million decline in consumer finance
servicing income at Fleet Finance, Inc. caused by a lower amount of average
loans being serviced. These decreases were offset by a $6 million increase in
FDIC loan administration fees due to a higher volume of principal collections
during the second quarter of 1994.
The decrease in gains recognized by Fleet on securities available for sale
is primarily due to the sale of approximately $2.4 billion of mortgage-backed
securities during the second quarter of 1993 in order to reduce prepayment
sensitivity and shorten the maturity of the portfolio. The $19 million of
securities gains recognized in the second quarter of 1994 resulted from the sale
of U.S. Treasury securities ($10 million) and the sale of equity securities ($9
million). The U.S. Treasury securities were sold as part of a restructuring of
the Corporation's bond portfolio early in the quarter to shorten the average
life of securities in anticipation of a rising interest rate environment.
NONINTEREST EXPENSE
Noninterest expense for the first six months of 1994 totaled $1,050
million, an 11.3% decrease from the $1,184 million reported for the same period
in 1993. These results reflect two significant items, the $25 million
restructuring charge recorded in the first quarter of 1994 and the accelerated
mortgage servicing rights amortization of $90 million incurred in the second
quarter of 1993. Excluding these items, noninterest expense was $1,025 million
and $1,094 million for the six months ended June 30, 1994 and June 30, 1993,
respectively, a 6.3% decrease. Noninterest expense in the second quarter of 1994
totaled $500 million, compared to $551 million for the second quarter of 1993,
excluding the accelerated mortgage servicing rights amortization of $90 million
incurred in the second quarter of 1993, a decrease of 9.3%. These decreases are
mainly attributable to the initial results from Fleet Focus, Fleet's efficiency
improvement program, as several initiatives were implemented during the second
quarter of 1994, and a decrease in OREO expense, as foreclosed property and
repossessed equipment decreased from $218 million at June 30, 1993 to $115
million at June 30, 1994, a 47% decline.
In addition, FDIC assessment fees decreased from the six-month period ended
June 30, 1993 to the same period in 1994 due to upgrades in Fleet's banking
subsidiaries' ratings based upon the strength of their capital positions and
other factors. Included in noninterest expense was a $5 million charge recorded
in the second quarter of 1994 relating to the sale of certain
short-to-intermediate-term instruments held in three proprietary money market
funds. The proceeds of such sale were reinvested in instruments considered more
appropriate for these types of funds.
LOANS AND LEASES
Total loans and leases increased $823 million from March 31, 1994,
primarily due to a $488 million increase in commercial loans (including both new
loans and seasonal advances) principally at Fleet-MA,
S-7
<PAGE> 42
Fleet-CT and Fleet-RI. Consumer loans increased $180 million, including a $98
million increase in credit card receivables and a $110 million increase in
residential real estate loans, offset by decreases in home equity loans and
student loans.
Commercial loans and commercial real estate loans decreased $103 million
and $45 million, respectively, over the first six months of 1994 partially due
to significant paydowns, including $378 million of principal collected during
the first half of 1994 on loans subject to federal financial assistance, and $66
million of loans put back to the FDIC under federal financial assistance
agreements. In addition, the sale of Fleet Factors in the first quarter of 1994
resulted in a $333 million decrease in commercial loans.
The federal financial assistance agreement with the FDIC relating to loans
acquired as part of the Bank of New England acquisition in 1991 expired on July
14, 1994. Subsequent to June 30, 1994, less than $25 million of commercial and
commercial real estate loans, out of a $2.0 billion portfolio, were put back to
the FDIC.
NONPERFORMING ASSETS
Nonperforming assets totaled $560 million at June 30, 1994, compared to
$601 million at December 31, 1993. At June 30, 1994, nonperforming assets
decreased $49 million, or 8.1% from March 31, 1994 and $292 million, or 34% from
June 30, 1993. The largest decreases were noted at Fleet-NY, Fleet-RI and Fleet
Credit Corporation, a wholly-owned subsidiary of Fleet. Nonperforming assets, as
a percentage of total loans, leases, OREO and insubstance foreclosures ("ISFs"),
and as a percentage of total assets, were 2.12% and 1.16%, respectively, at June
30, 1994, compared to 2.27% and 1.25%, respectively, at December 31, 1993.
Fleet's nonperforming loans and leases totaled $445 million at June 30, 1994, a
$20 million decrease from December 31, 1993.
The following table shows the balance of nonperforming assets at June 30,
1994:
<TABLE>
<CAPTION>
JUNE 30, 1994
---------------------------------------------
COMMERCIAL AND COMMERCIAL CONSUMER/
INDUSTRIAL REAL ESTATE OTHER TOTAL
-------------- ----------- --------- -----
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Nonperforming loans and leases:
Current or less than 90 days past due............... $ 70 $ 36 $ 11 $117
Noncurrent.......................................... 88 74 166 328
OREO/ISF................................................ 9 61 45 115
---- ---- ----- ----
Total nonperforming assets at June 30, 1994(a)...... $167 $171 $222 $560
==== ==== ==== ====
Total nonperforming assets at December 31, 1993(a).. $231 $159 $211 $601
==== ==== ==== ====
<FN>
(a) Throughout this Prospectus Supplement, nonperforming assets and related
ratios do not include loans greater than 90 days past due and still accruing
interest ($101 million and $77 million at June 30, 1994 and December 31,
1993, respectively, which include approximately $68 million and $62 million
of consumer loans, respectively), or assets subject to federal financial
assistance ($90 million and $118 million at June 30, 1994 and December 31,
1993, respectively).
</TABLE>
RESERVE FOR CREDIT LOSSES
Fleet's reserve for credit losses decreased by $30 million from $1.0
billion at December 31, 1993 to $970 million at June 30, 1994, as loans and
leases charged off during the period exceeded the amount of the provision and
recoveries recognized during the period. Net charge-offs as a percentage of
average loans and leases decreased from 1.17% for the six months ended June 30,
1993 to 0.41% for the same period in 1994. Fleet's ratios of reserve for credit
losses to nonperforming assets and reserve for credit losses to nonperforming
loans were 173% and 218%, respectively, at June 30, 1994, compared to 166% and
215%, respectively, at December 31, 1993.
S-8
<PAGE> 43
SECURITIES
The following table shows the amortized cost and market value of Fleet's
securities portfolio as of June 30, 1994 and December 31, 1993:
<TABLE>
<CAPTION>
JUNE 30, 1994 DECEMBER 31, 1993
------------------- -------------------
AMORTIZED MARKET AMORTIZED MARKET
COST VALUE COST VALUE
-------- ------- -------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Securities Available for Sale:
U.S. Treasury and government agencies............ $ 7,851 $ 7,739 $ 5,775 $ 5,950
Mortgage-backed securities....................... 7,010 6,802 5,739 5,878
State and municipal.............................. 0 0 733 747
Other debt securities............................ 192 193 250 257
------- ------- ------- -------
Total debt securities....................... 15,053 14,734 12,497 12,832
------- ------- ------- -------
Marketable equity securities..................... 78 94 64 83
Other securities................................. 98 98 16 16
-------- ------- -------- -------
Total Securities Available for Sale................... $15,229 $14,926 $12,577 $12,931
======= ======= ======= =======
Total Securities Held to Maturity..................... $ 748 $ 751 $ 1,546 $ 1,580
======= ======= ======= =======
Total Securities...................................... $15,977 $15,677 $14,123 $14,511
======= ======= ======= =======
</TABLE>
U.S. Treasury and government agencies securities increased $2.1 billion
from December 31, 1993 to June 30, 1994 on an amortized cost basis due primarily
to net purchases of $2.2 billion of U.S. Treasury securities during the first
six months of 1994 as part of Fleet's restructuring of its portfolio to shorten
the average life of securities in anticipation of a rising rate environment.
Total sales of U.S. Treasury securities during the first half of 1994 generated
securities gains of $10 million. During the second quarter of 1994, Fleet also
sold approximately $23 million of equity securities which resulted in gains of
$9 million.
RESULTS OF SUBSIDIARIES
For a discussion of the performance of Fleet's subsidiaries, see Fleet's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1994, which report
is incorporated by reference herein.
FUNDING SOURCES
Fleet's funding sources consist primarily of deposits, borrowed funds
(including federal funds purchased, securities sold under agreements to
repurchase and commercial paper) and notes and debentures. Total deposits
increased $685 million, or 2.2%, from December 31, 1993 to June 30, 1994, due
primarily to the purchase of twenty-nine branches in the state of New York
formerly owned by Chemical Bank. Fleet's mix of total deposits shifted slightly
as time deposits increased by $1.3 billion from December 31, 1993 to June 30,
1994, while regular savings, NOW and money market deposits decreased by $649
million during the same period.
Federal funds purchased and securities sold under agreements to repurchase
increased by $1,167 million and $626 million, respectively, from December 31,
1993 to June 30, 1994, as these funding sources offered more favorable interest
rates during this period compared to other borrowing sources. These funds were
primarily used to fund securities purchases during the second quarter of 1994.
Commercial paper and other borrowed funds decreased by $606 million and $992
million, respectively, from December 31, 1993 to June 30, 1994. These decreases
were primarily at FMG as these borrowings are used to fund mortgages held for
resale which declined by $1.7 billion during the same period.
LIQUIDITY
The following liquidity discussion focuses primarily on developments since
December 31, 1993. Accordingly, it should be read in conjunction with the
liquidity section on pages 19-20 of the Corporation's 1993 Annual Report to
Stockholders included as an exhibit to Fleet's Annual Report on Form 10-K, which
report is incorporated by reference herein.
S-9
<PAGE> 44
Fleet's primary sources of liquidity are interest and dividends from
subsidiaries and access to the capital and money markets. Fleet's subsidiaries
rely on cash flows from operations, core deposits, borrowings, short-term
high-quality liquid assets, and in the case of nonbanking subsidiaries,
excluding FMG, funds from Fleet for liquidity. During the first six months of
1994, Fleet received $231.9 million in interest and dividends from its
subsidiaries and paid $167.6 million in interest and dividends to third parties.
Dividends paid by Fleet's banking subsidiaries are limited by various regulatory
requirements related to capital adequacy and historic earnings. See "Fleet
Financial Group, Inc."
Cash and cash equivalents decreased by $26 million during the six month
period ended June 30, 1994. This decrease primarily reflected the use of $2.51
billion for investing activities offset in part by $2.04 billion of net cash
provided by operating activities and $441 million provided by financing
activities. Net cash used for investing activities included net purchases of
securities available for sale and securities held to maturity coupled with net
increases in loans and leases at the banking subsidiaries. Cash provided by
operating activities was mainly attributable to proceeds from the sale of
mortgages held for resale, offset in part by originations and purchases of
mortgages held for resale. Cash provided by financing activities primarily
included increases in deposits offset in part by repayments of long-term debt.
At June 30, 1994 and December 31, 1993, Fleet and its subsidiaries had
$2.55 billion in confirmed lines of credit of which $700 million and $940
million were outstanding at June 30, 1994 and December 31, 1993, respectively.
The amounts outstanding under the lines of credit relate to FMG at both June 30,
1994 and December 31, 1993. On August 1, 1994, FMG increased its available lines
of credit from $1.75 billion to $2.20 billion. At June 30, 1994, Fleet had
commercial paper outstanding of $731 million compared to $1.3 billion at
December 31, 1993. Fleet maintains back-up lines of credit to ensure funding
will not be interrupted if commercial paper cannot be issued.
Fleet has filed shelf registration statements with the Commission that
provide for the issuance of senior or subordinated debt securities and warrants
to purchase senior or subordinated debt securities. The total amount of funds
available under the shelf registrations was $1.8 billion. As of June 30, 1994,
$1.1 billion of debt securities has been issued under this shelf, leaving $629
million in debt securities available for future issuance. In addition, Fleet has
filed a preferred stock shelf registration with the Commission that permits the
issuance of $445 million in preferred stock, all of which remains available for
issuance at June 30, 1994.
ASSET AND LIABILITY MANAGEMENT
The asset/liability management process at Fleet ensures that the risk to
earnings fluctuations from changes in interest rates is prudently managed. To
measure and monitor interest-rate risk, management uses various tools, which
include an interest-rate sensitivity "gap" analysis, a "rate shock" analysis,
and an interest-rate risk reporting schedule, as well as simulation models of
balance sheet and interest-rate scenarios under alternative conditions. Internal
parameters have been established as guidelines for monitoring these
measurements. These guidelines serve as benchmarks for determining actions to
balance the current position against overall strategic goals. As of June 30,
1994, management believes Fleet was in a relatively neutral interest-rate
sensitivity position.
As part of Fleet's interest-rate risk management strategy, Fleet increased
its usage of interest-rate swaps over the past year, as the use of interest-rate
swaps for asset/liability management can have substantial advantages compared to
on-balance-sheet alternatives. These advantages include improved control of
interest-rate risks and enhanced balance sheet liquidity. Fleet expects to
continue its prudent use of this valuable tool.
S-10
<PAGE> 45
On a consolidated basis, Fleet had $6.6 billion (notional amount) of
interest-rate risk management swaps with external counterparties at June 30,
1994, as summarized in the following table:
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED AVERAGE
AVERAGE RATE
NOTIONAL MATURITY FAIR ------------------
VALUE (YEARS) VALUE RECEIVE PAY
------ --------- ----- ------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Interest-rate risk management swaps:
Receive fixed/pay variable............. $2,503 1.3 $ 9 7.04% 4.99%
Pay fixed/receive variable............. 1,296 4.3 62 4.56 5.82
Basis swaps............................ 80 2.4 (3) (a) (a)
Index-amortizing swaps receive
fixed/pay variable................... 2,770 1.2(b) (96) 5.29 5.58
------ --- ---- ---- ----
TOTAL............................. $6,649 1.9 $(28) 5.81% 5.40%
====== ==== ===== ==== ====
<FN>
(a) Basis swaps are interest-rate swaps in which both amounts paid and received
are based on floating rates.
(b) $2.6 billion of index-amortizing swaps have the potential to extend one
additional year, while one five-year $200-million swap has the potential to
extend an additional two years.
</TABLE>
The interest-rate risk management swap activity for the six months ended
June 30, 1994 is summarized in the following table:
<TABLE>
<CAPTION>
RECEIVE PAY INDEX- TOTAL
NOTIONAL AMOUNTS FIXED FIXED BASIS AMORTIZING SWAPS
- --------------------------------------------- ------ ----- ----- ---------- -----
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1993................. $2,249 $ 985 $-- $2,770 $6,004
Additions............................... 624 311 80 -- 1,015
Maturities.............................. (370) -- -- -- (370)
Terminations............................ -- -- -- -- --
------ ------ --- ------ ------
Balance at June 30, 1994..................... $2,503 $1,296 $80 $2,770 $6,649
====== ====== === ====== ======
</TABLE>
The total notional amount of all interest-rate swaps at June 30, 1994 was
$7.4 billion compared to $6.6 billion at December 31, 1993. These amounts
include $739 million and $614 million, respectively, of customer swaps. The
customer swap portfolio is carried at market value. Customer swaps contributed
$1.5 million of trading revenue for the second quarter of 1994.
CAPITAL
As of June 30, 1994 and December 31, 1993, Fleet's capital ratios, which
exceeded all minimum regulatory requirements, were as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1994 1993
------- ------------
<S> <C> <C>
(DOLLARS IN MILLIONS)
Tier 1 capital.................................. $ 3,540 $ 3,495
Total capital................................... 4,966 4,939
Risk adjusted assets............................ 29,936 29,713
Tier 1 risk-based capital....................... 11.82% 11.76%
Total risk-based capital........................ 16.59 16.62
Leverage ratio.................................. 7.44 7.48
Common equity/assets............................ 6.53 6.55
Total equity/assets............................. 7.31 7.59
</TABLE>
Fleet exceeded the required minimum Tier 1 risk-based capital ratio of 4%
and the required total risk-based capital ratio of 8% by approximately $2.3
billion and $2.6 billion, respectively, at both June 30, 1994 and December 31,
1993. Fleet exceeded the 3% minimum leverage ratio of the Federal Reserve Board
by approximately $1.6 billion at both June 30, 1994 and December 31, 1993. See
"Certain Regulatory Considerations -- Capital Guidelines" for a discussion of
the Federal Reserve Board's requirement that bank holding companies maintain a
leverage ratio in excess of 3% in certain circumstances. The June 30, 1994 and
S-11
<PAGE> 46
December 31, 1993, Tier 1 capital, total capital and leverage ratios do not
include any adjustments for unrealized gains or losses relating to securities
available for sale.
CERTAIN REGULATORY CONSIDERATIONS
General
As a bank holding company, Fleet is subject to regulation by the Federal
Reserve Board. Fleet Bank of Maine, Fleet Bank-NH and Fleet-NY are
state-chartered banks that are members of the Federal Reserve System; as such,
they are subject to regulation by the Federal Reserve Board and bank regulators
in their respective states. Fleet-RI, Fleet-CT and Fleet-MA are national banks
subject to regulation and supervision by the Office of the Comptroller of the
Currency (the "OCC"). Each subsidiary bank's deposits are insured by the FDIC
and is therefore subject to FDIC supervision and regulation. Fleet is also
subject to the reporting and other requirements of the Exchange Act.
The credit quality of the assets held by certain of Fleet's subsidiaries is
subject to periodic review by the state and federal bank regulatory agencies
noted above. While Fleet believes its present reserve for credit losses is
adequate in light of prevailing economic conditions and the current regulatory
environment, there can be no assurance that Fleet's subsidiaries will not be
required to make certain adjustments to their reserves for credit losses and
charge-off policies in response to changing economic conditions or regulatory
examinations. At the request of its regulators, Fleet and its subsidiaries
continue to evaluate and refine oversight and reporting systems and procedures
to enhance the ability of such companies to respond to the changing economic
environment.
In addition to extensive existing government regulation, Federal and state
statutes and regulations are subject to changes that may have significant impact
on the way in which banks may conduct business. The likelihood and potential
effects of any such changes cannot be predicted. Legislation enacted in recent
years has substantially increased the level of competition among commercial
banks, thrift institutions and non-banking institutions, including insurance
companies, brokerage firms, mutual funds, investment banks and major retailers.
In addition, the enactment of recent banking legislation such as the FIRREA and
the FDICIA have affected the banking industry by, among other things, broadening
the regulatory powers of the federal banking agencies in a number of areas.
FIRREA
As a result of the enactment of FIRREA on August 9, 1989, any or all of
Fleet's subsidiary banks can be held liable for any loss incurred by, or
reasonably expected to be incurred by, the FDIC after August 9, 1989, in
connection with (a) the default of any other of Fleet's subsidiary banks or (b)
any assistance provided by the FDIC to any other of Fleet's subsidiary banks in
danger of default. "Default" is defined generally as the appointment of a
conservator or receiver and "in danger of default" is defined generally as the
existence of certain conditions indicating that a "default" is likely to occur
without regulatory assistance.
FDICIA
The FDICIA, which was enacted on December 19, 1991, provides for, among
other things, increased funding for the Bank Insurance Fund (the "BIF") of the
FDIC and expanded regulation of depository institutions and their affiliates,
including parent holding companies. A summary of certain provisions of FDICIA
and its implementing regulations is provided below.
Risk Based Deposit Insurance Assessments. A significant portion of the
additional funding to BIF is in the form of borrowings to be repaid by insurance
premiums assessed on BIF members. In addition, the FDICIA provides for an
increase in the ratio of the reserves to insured deposits of the BIF to 1.25% by
the end of the 15-year period that began with the semi-annual assessment period
ending December 31, 1991, also to be financed by insurance premiums. The FDICIA
also provides authority for special assessments against insured deposits and for
the development of a general risk-based assessment system. The FDIC has set
assessment rates for BIF-insured institutions ranging from 0.23% to 0.31%, based
on a risk assessment of the institution. Each financial institution is assigned
to one of three capital groups -- "well capitalized", "adequately capitalized"
or "undercapitalized" -- and
S-12
<PAGE> 47
further assigned to one of three subgroups within each capital group, on the
basis of supervisory evaluations by the institution's primary federal and, if
applicable, state supervisors and other information relevant to the
institution's financial condition and the risk posed to the applicable insurance
fund. For purposes of the risk-based assessment system, a well-capitalized
institution is one that has a total risk-based capital ratio of 10% or more, a
Tier 1 risk-based capital of 6% or more, and a leverage ratio of 5% or more. An
adequately capitalized institution has a total risk-based capital ratio of 8% or
more, a Tier 1 risk-based capital ratio of 4% or more, and a leverage ratio of
4% or more. An undercapitalized institution is one that does not meet either of
the foregoing definitions. The actual assessment rate applicable to a particular
institution, therefore, depends in part upon the risk assessment classification
so assigned to the institution by the FDIC. At June 30, 1994, each of Fleet's
banking subsidiaries was classified as "well-capitalized" under these
provisions.
Prompt Corrective Action. The FDICIA also provides the federal banking
agencies with broad powers to take prompt corrective action to resolve problems
of insured depository institutions, depending upon a particular institution's
level of capital. The FDICIA establishes five tiers of capital measurement for
regulatory purposes ranging from "well-capitalized" to "critically
undercapitalized." Under prompt corrective action regulations adopted by the
federal banking agencies in December 1992, a depository institution is (a)
"well-capitalized" if it has a total risk-based capital ratio of 10% or more, a
Tier 1 risk-based ratio of 6% or more, a leverage ratio of 5% or more and is not
subject to any written agreement, order or capital directive or prompt
corrective action directive issued by the primary regulator to meet and maintain
a specific capital measure; (b) "adequately capitalized" if it has a total
risk-based capital ratio of 8% or more, a Tier 1 risk-based capital ratio of 4%
or more and a leverage ratio of 4% or more (3% if the bank is rated composite 1
under the CAMEL rating system in its most recent examination and is not
experiencing or anticipating significant growth) and does not qualify as
"well-capitalized"; (c) "undercapitalized" if it has a total risk-based capital
ratio that is less than 8%, a Tier 1 risk-based capital ratio that is less than
4% or a leverage ratio that is less than 4% (3% if the bank is rated composite 1
under the CAMEL rating system in its most recent examination and is not
experiencing or anticipating significant growth); (d) "significantly
undercapitalized" if the bank has a total risk-based capital ratio that is less
than 6%, a Tier 1 risk-based capital ratio that is less than 3% or a leverage
ratio that is less than 3%; and (e) "critically undercapitalized" if the
depository institution has a ratio of tangible equity to total assets that is
equal to or less than 2% of total assets, or otherwise fails to meet certain
established critical capital levels. A depository institution may be deemed to
be in a capitalization category that is lower than is indicated by its actual
capital position under certain circumstances. At June 30, 1994, each of Fleet's
subsidiary depository institutions was classified as "well-capitalized" under
the prompt corrective action regulations described above.
Any depository institution that is undercapitalized and which fails to meet
regulatory capital requirements specified in the FDICIA must submit a capital
restoration plan guaranteed by the bank holding company controlling such
institution, and the regulatory agencies may place limits on the asset growth
and restrict activities of the institution (including transactions with
affiliates), require the institution to raise additional capital, dispose of
subsidiaries or assets or to be acquired and, ultimately, require the
appointment of a receiver. The guarantee of a controlling bank holding company
under the FDICIA of performance of a capital restoration plan is limited to the
lower of 5% of an undercapitalized banking subsidiary's assets or the amount
required for the bank to be classified as adequately capitalized. Federal
banking agencies may not accept a capital restoration plan without determining,
among other things, that the plan is based on realistic assumptions and is
likely to succeed in restoring the depository institution's capital. If a
depository institution fails to submit an acceptable plan within the time
required (generally 45 days after receiving notice that the institution is
undercapitalized, significantly undercapitalized or critically
undercapitalized), it is treated as if it is significantly undercapitalized. If
the controlling bank holding company fails to fulfill its guaranty obligations
under the FDICIA and files (or has filed against it) a petition under the
federal Bankruptcy Code, the applicable regulatory agency would have a claim as
a general creditor of the bank holding company and, if the capital restoration
plan were deemed to be a commitment to maintain capital under the Federal
Bankruptcy Code, the claim would be entitled to a priority in such bankruptcy
proceeding over unsecured third party creditors of the bank holding company.
In addition to the requirement of mandatory submission of a capital
restoration plan, under the FDICIA, an undercapitalized institution may not pay
management fees to any person having control of the institution
S-13
<PAGE> 48
nor may an institution, except under certain circumstances and with prior
regulatory approval, make any capital distribution if, after making such payment
or distribution, the institution would be undercapitalized. Further,
undercapitalized depository institutions are subject to restrictions on
borrowing from the Federal Reserve System.
Undercapitalized and significantly undercapitalized depository institutions
may be subject to a number of requirements and restrictions, including orders to
sell sufficient voting stock to become adequately capitalized, requirements to
reduce total assets and cessation of receipt of deposits from correspondent
banks. In addition, significantly undercapitalized depository institutions also
are prohibited from awarding bonuses or increasing compensation of senior
executive officers until approval of a capital restoration plan. Critically
undercapitalized depository institutions are subject to appointment of a
receiver or conservator.
Brokered Deposits and Pass-Through Deposit Insurance Limitation. Under the
FDICIA, a depository institution that is well-capitalized may accept brokered
deposits and offer interest rates on deposits "significantly higher" than the
prevailing rate in its market. A depository institution that is adequately
capitalized may accept brokered deposits if it obtains the prior approval of the
FDIC. An undercapitalized depository institution may not accept brokered
deposits. The definitions of "well-capitalized", "adequately capitalized" and
"undercapitalized" conform to the definitions described above for prompt
corrective action, except that the term "undercapitalized" also includes an
institution that is "significantly undercapitalized" or "critically
undercapitalized" under the prompt corrective action requirements. In addition,
"pass-through" insurance coverage may not be available for certain employee
benefit accounts. In Fleet's opinion, these limitations do not have a material
effect on Fleet.
Safety and Soundness Standards. The FDICIA directs each federal banking
agency to prescribe safety and soundness standards for depository institutions
and depository institution holding companies relating to internal controls,
information systems, internal audit systems, loan documentation, credit
underwriting, interest rate exposure, asset growth, compensation, a maximum
ratio of classified assets to capital, minimum earnings sufficient to absorb
losses without impairing capital and, to the extent feasible, a minimum ratio of
market value to book value for publicly traded shares. Proposed regulations to
implement the safety and soundness standards were issued in November 1993. The
ultimate cumulative effect of these standards cannot currently be forecast.
The FDICIA also contains a variety of other provisions that may affect
Fleet's operations, including new reporting requirements, regulatory standards
for real estate lending, "truth in savings" provisions, and the requirement that
a depository institution give 90 days' prior notice to customers and regulatory
authorities before closing any branch. Many of the provisions in the FDICIA have
recently been or will be implemented through the adoption of regulations by the
various federal banking agencies and, therefore, the precise impact on Fleet
cannot be assessed at this time.
Capital Guidelines. In January 1989, the Federal Reserve Board issued
final risk-based capital guidelines for bank holding companies such as Fleet and
state-chartered member banks. The new regulatory minimum capital requirements,
which became effective in March 1989, have been phased in over the past four
years. Under the requirements as fully phased in, the minimum ratio of total
capital to risk-adjusted assets (including certain off-balance sheet items, such
as standby letters of credit) is 8%. At least half of the total capital is to be
comprised of common equity, retained earnings, minority interests in the equity
accounts of consolidated subsidiaries and a limited amount of perpetual
preferred stock, less goodwill ("Tier 1 capital"). The remainder may consist of
perpetual debt, mandatory convertible debt securities, a limited amount of
subordinated debt, other preferred stock and a limited amount of loan loss
reserves ("Tier 2 capital"). In addition, on August 2, 1990, the Federal Reserve
Board adopted a leverage ratio (Tier 1 capital to total assets, net of goodwill)
of 3% for bank holding companies that meet certain specified criteria, including
that they have the highest regulatory rating. The rule indicates that the
minimum leverage ratio should be 1% to 2% higher for holding companies
undertaking major expansion programs or that do not have the highest regulatory
rating. Fleet's national banking subsidiaries are subject to similar capital
requirements adopted by the OCC.
The federal banking agencies continue to indicate their desire to raise
capital requirements applicable to banking organizations, and recently proposed
amendments to their risk-based capital regulations to provide for
S-14
<PAGE> 49
the consideration of interest rate risk in the determination of a bank's minimum
capital requirements. The proposed amendments are intended to require that banks
effectively measure and monitor their interest rate risk and that they maintain
capital adequate for that risk. Under the proposed amendments, banks with
interest rate risk in excess of a defined supervisory threshold would be
required to maintain additional capital beyond that generally required. In
addition, the federal banking agencies recently proposed amendments to their
risk-based capital standards to provide for the concentration of credit risk and
certain risks arising from nontraditional activities, as well as a bank's
ability to manage these risks, as important factors in assessing a bank's
overall capital adequacy.
As of June 30, 1994, Fleet's capital ratios exceeded all minimum regulatory
capital requirements.
Under FIRREA and the FDICIA, failure to meet the minimum regulatory capital
requirements could subject a banking institution to a variety of enforcement
remedies available to federal regulatory authorities, including the termination
of deposit insurance by the FDIC and seizure of the institution.
INTERSTATE BANKING AND BRANCHING LEGISLATION
On September 29, 1994, President Clinton signed into law the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994 (the "Interstate Act").
The Interstate Act generally authorizes bank holding companies to acquire banks
located in any state commencing one year after its enactment. In addition, it
generally authorizes national and state chartered banks to merge across state
lines (and to thereby create interstate branches) commencing June 1, 1997. Under
the provisions of the Interstate Act, states are permitted to opt out of this
latter interstate branching authority by taking action prior to the commencement
date. States may also "opt in" early (i.e., prior to June 1, 1997) to the
interstate merger provisions. Further, the Interstate Act provides that states
may act affirmatively to permit de novo branching by banking institutions across
state lines. Fleet does not currently have any plans to consolidate its banking
subsidiaries or to take any other actions as a result of this new statute.
However, Fleet is considering the potential benefits in cost savings and
convenience to its customers that might be achieved through combinations of two
or more of its existing banking subsidiaries.
DESCRIPTION OF NOTES
The following description of the Notes offered hereby (referred to herein
as the "Notes" and in the accompanying Prospectus as the "Senior Debt
Securities") supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Senior Debt Securities
set forth in the accompanying Prospectus, to which description reference is
hereby made.
GENERAL
The Notes will be issued under an indenture dated as of October 1, 1992,
between Fleet and The First National Bank of Chicago, as Trustee. The Notes will
be limited to $ aggregate principal amount and will mature on
. Interest on the Notes will be payable at the rate per annum
shown on the cover page of this Prospectus Supplement from , or
from the most recent Interest Payment Date to which interest has been paid or
provided for, semiannually on and of each
year, commencing on , to the persons in whose names the Notes
are registered at the close of business on the and , as the
case may be, next preceding such Interest Payment Date. The Notes are not
redeemable prior to maturity and are subject to defeasance as provided in the
Indenture.
BOOK-ENTRY, DELIVERY AND FORM
The Notes will be issued in the form of fully registered Global Securities.
The Global Securities will be deposited with, or on behalf of, the Depository
and registered in the name of the Depository's nominee. The Depository currently
limits the maximum denomination of any global security to $150,000,000.
Therefore, for purposes of this Prospectus Supplement, "Global Security" refers
to the Global Securities representing the entire issue of Notes offered hereby.
S-15
<PAGE> 50
The Depository has advised as follows: The Depository is a limited-purpose
trust company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. The Depository holds securities that its
participants ("Participants") deposit with the Depository. The Depository also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers (including the Underwriters named in this
Prospectus Supplement), banks, trust companies, clearing corporations and
certain other organizations. The Depository is owned by a number of its direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the Depository's system is also available to others such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly ("indirect
participants"). Persons who are not Participants may own beneficial interests in
securities held by the Depository only through Participants or indirect
participants. The Rules applicable to the Depository and its Participants are on
file with the Commission.
The Depository has advised that pursuant to procedures established by it
(i) upon issuance of the Global Security by Fleet, the Depository will credit
the accounts of the Participants designated by the Underwriters with the
principal amount of the Notes purchased by the Underwriters and (ii) ownership
of beneficial interests in the Global Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the Depository (with respect to Participants' interests), the Participants and
the indirect participants (with respect to the owners of beneficial interests in
such Global Security). The laws of some states may require that certain persons
take physical delivery in definitive form of securities which they own.
Consequently, such persons may be prohibited from purchasing beneficial
interests in the Global Security from any beneficial owner or otherwise.
So long as the Depository's nominee is the registered owner of the Global
Security, such nominee for all purposes will be considered the sole owner or
holder of the Notes represented by such Global Security for all purposes under
the Indenture. Except as provided below, owners of beneficial interests in the
Global Security will not be entitled to have any of the Notes represented by
such Global Security registered in their names, will not receive or be entitled
to receive physical delivery of the Notes in definitive form and will not be
considered the owners or holders thereof under the Indenture. Accordingly, each
person owning a beneficial interest in the Global Security must rely on the
procedures of the Depository and, if such person is not a Participant, on the
procedures of the Participant and, if applicable, the indirect participant,
through which such person owns its interest, to exercise any rights of a holder
under the Indenture. Fleet understands that under existing practice, in the
event that Fleet requests any action of the holders or a beneficial owner
desires to take any action a holder is entitled to take, the Depository would
act upon the instructions of, or authorize, the Participant to take such action.
Principal and interest payments on the Global Security registered in the
name of the Depository's nominee will be made to the Depository's nominee as the
registered owner of such Global Security. Fleet and the Trustee will treat the
person in whose name the Global Security is registered as the owner of such
Global Security for the purpose of receiving payment of principal and interest
on the Notes and for all other purposes whatsoever. None of Fleet, the Trustee,
the Paying Agent or the Security Registrar has any responsibility or liability
for the payment of principal or interest on the Notes to owners of beneficial
interests in the Global Security. The Depository has advised that upon receipt
of any payment of principal or interest in respect of the Global Security, it
will immediately credit the accounts of the Participants with such payment in
amounts proportionate to their respective beneficial interests in such Global
Security as shown on the records of the Depository. Payments by Participants and
indirect participants to owners of beneficial interests in the Global Security
will be governed by standing instructions and customary practices, as is now the
case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of the Participants
or indirect participants.
S-16
<PAGE> 51
None of Fleet, the Trustee, the Paying Agent or the Security Registrar will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in the Global
Security, or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Global Security representing all but not part of the Notes being
offered hereby is exchangeable for Notes in definitive form of like tenor and
terms if (i) the Depository notifies Fleet that it is unwilling or unable to
continue as depository for such Global Security or if at any time the Depository
ceases to be a clearing agency registered under the Exchange Act, and, in either
case, a successor depository is not appointed by Fleet within 90 days of receipt
by Fleet of such notice or of Fleet becoming aware of such ineligibility, (ii)
Fleet in its discretion at any time determines not to have all of the Notes
represented by the Global Security and notifies the Trustee thereof, or (iii) an
Event of Default has occurred and is continuing with respect to the Notes. The
Global Security exchangeable pursuant to the preceding sentence shall be
exchangeable for Notes issuable in authorized denominations and registered in
such names as the Depository holding such Global Security shall direct. Subject
to the foregoing, a Global Security is not exchangeable, except for a Note or
Notes of the same aggregate denomination to be registered in the name of the
depository or its nominee or in the name of a successor of the Depository or a
nominee of such successor.
A further description of the Depository's procedures with respect to the
Global Security representing the Notes is set forth in the Prospectus under
"Description of Debt Securities -- Global Securities". The Depository has
confirmed that it intends to follow such procedures.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by Fleet in
immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, the Notes
will trade in the Depository's Same-Day Funds Settlement System until maturity,
and secondary market trading activity in the Notes will therefore be required by
the Depository to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the Notes.
S-17
<PAGE> 52
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement"), Fleet has agreed to sell to each of the
Underwriters named below, and each of the Underwriters has severally agreed to
purchase, the principal amount of the Notes set forth opposite its name below.
In the Underwriting Agreement, the several Underwriters have agreed, subject to
the terms and conditions set forth therein, to purchase all the Notes offered
hereby, if any of the Notes are purchased. In the event of default by an
Underwriter, the Underwriting Agreement provides that, in certain circumstances,
purchase commitments of the non-defaulting Underwriters may be increased or the
Underwriting Agreement may be terminated.
<TABLE>
<Caption
PRINCIPAL
UNDERWRITER AMOUNT
------------ ---------
<S> <C>
$
--------
Total..............................................
========
</TABLE>
The Underwriters have advised Fleet that they propose initially to offer
the Notes to the public at the public offering price set forth on the cover page
of this Prospectus Supplement, and to certain dealers at such price less a
concession not in excess of % of the principal amount of the Notes. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of % of the principal amount of the Notes to certain other dealers. After the
initial public offering, the public offering price, concession and discount may
be changed.
All secondary trading in the Notes will settle in immediately available
funds. See "Description of Notes -- Same-Day Settlement and Payment".
The Underwriting Agreement provides that Fleet will indemnify the several
Underwriters against certain civil liabilities, including liabilities under the
Securities Act of 1933, as amended, or contribute to payments which the
Underwriters may be required to make in respect thereof.
Fleet does not intend to apply for listing of the Notes on a national
securities exchange, but has been advised by the Underwriters that the
Underwriters presently intend to make a market in the Notes, as permitted by
applicable laws and regulations. The Underwriters are not obligated, however, to
make a market in the Notes and any such market making may be discontinued at any
time at the sole discretion of the Underwriters. Accordingly, no assurance can
be given as to the liquidity of, or trading markets for, the Notes.
Certain of the Underwriters and their associates and affiliates may be
customers of, have borrowing relationships with, engage in other transactions
with, and/or perform services, including investment banking services, for, Fleet
and its subsidiaries in the ordinary course of business.
S-18
<PAGE> 53
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY FLEET OR BY THE UNDERWRITERS. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF FLEET SINCE THE DATE HEREOF. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PROSPECTUS SUPPLEMENT
Recent Developments................... S-2
Summary Consolidated Financial Data... S-3
Management's Analysis of Financial
Statements.......................... S-6
Description of Notes.................. S-15
Underwriting.......................... S-18
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Fleet Financial Group, Inc............ 3
Consolidated Ratios of Earnings to
Fixed Charges and Earnings to
Combined Fixed Charges and Preferred
Stock Dividends..................... 4
Use of Proceeds....................... 4
Description of Debt Securities........ 5
Senior Debt Securities................ 9
Subordinated Debt Securities.......... 11
Description of Preferred Stock........ 15
Description of Depositary Shares...... 19
Description of Existing Preferred
Stock............................... 22
Description of Common Stock........... 26
Selected Provisions in the Articles of
Fleet............................... 28
Description of Warrants............... 29
Plan of Distribution.................. 31
Experts............................... 31
Legal Opinions........................ 32
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$
(LOGO)
FLEET FINANCIAL
GROUP, INC.
% NOTES DUE
------------------------
PROSPECTUS SUPPLEMENT
------------------------
, 1994
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 54
<TABLE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS.
<C> <S>
1(a) -- Proposed form of Underwriting Agreement for Debt Securities (incorporated by
reference to Exhibit 1(a) of Registration Statement No. 33-40965).
1(b) -- Proposed form of Underwriting Agreement for Preferred Stock and Common Stock
(incorporated by reference to Exhibit 1(a) of Registration Statement No.
33-40967).
1(c) -- Proposed form of Selling Agency Agreement for Debt Securities (incorporated
by reference to Exhibit 1(b) of Registration Statement No. 33-45137).
4(a) -- Senior Indenture dated October 1, 1992 between the Registrant and The First
National Bank of Chicago, as Trustee (incorporated by reference to Exhibit
4(a) of Registration Statement No. 33-50216).
4(b) -- Form of Warrant Agreement for Warrants attached to Debt Securities
(incorporated by reference to Exhibit 4(b)(1) of Registration Statement No.
33-3573).
4(c) -- Form of Warrant Agreement for Warrants not attached to Debt Securities
(incorporated by reference to Exhibit 4(b)(2) of Registration Statement No.
33-3573).
4(d) -- Form of Note for Senior Debt Securities (included in Exhibit 4(a) on pages 18
through 27).
4(e) -- Subordinated Indenture dated October 1, 1992 between the Registrant and The
First National Bank of Chicago, as Trustee (incorporated by reference to
Exhibit 4(d) of Registration Statement No. 33-50216), as supplemented by a
First Supplemental Indenture dated November 30, 1992 (incorporated by
reference to Exhibit 4 to the Registrant's Current Report on Form 8-K dated
November 30, 1992).
4(f) -- Form of Note for Subordinated Debt Securities (incorporated by reference to
Exhibit 4(e) of Registration Statement No. 33-40965).
4(g) -- Form of Medium-Term Note (incorporated by reference to Exhibit 4(f) of
Registration Statement No. 33-50216).
4(h) -- Form of proposed Certificate of Designations (incorporated by reference to
Exhibit 4(a) of Registration Statement No. 33-40967).
4(i) -- Form of proposed Deposit Agreement (incorporated by reference to Exhibit 4(b)
of Registration Statement No. 33-40967).
4(j) -- Form of Warrant Agreement for Warrants attached to Common Stock or Preferred
Stock.
4(k) -- Form of Warrant Agreement for Warrants not attached to Common Stock or
Preferred Stock.
4(l) -- Rights Agreement dated as of November 21, 1990 between the Registrant and
Fleet National Bank, as amended by a First Amendment thereto dated as of
March 28, 1991 and a Second Amendment thereto dated as of July 12, 1991
(incorporated by reference to Exhibit 1 to the Registrant's Current Report on
Form 8-K dated November 21, 1990 and Exhibits 4(a) and 4(b) to the
Registrant's Current Report on Form 8-K dated March 28, 1991).
5 -- Opinion of Edwards & Angell as to legality (previously filed).
12(a) -- Computation of Ratio of Earnings to Fixed Charges (previously filed).
12(b) -- Computation of Ratio of Earnings to Fixed Charges and Dividends on Preferred
Stock (previously filed).
23(a) -- Consent of KPMG Peat Marwick LLP.
23(b) -- Consent of Edwards & Angell (previously filed).
24 -- Power of Attorney of certain officers and directors (previously filed).
25 -- Form T-1 Statement of Eligibility and Qualification of The First National
Bank of Chicago, as Senior Trustee and as Subordinated Trustee.
</TABLE>
II-1
<PAGE> 55
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has duly caused this Amendment No. 1 to Form S-3 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Providence, and State of Rhode Island, on October 28,
1994.
FLEET FINANCIAL GROUP, INC.
By: /s/ WILLIAM C. MUTTERPERL
............................
WILLIAM C. MUTTERPERL
Senior Vice President,
General Counsel and Secretary
<TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Form S-3 Registration Statement has been signed by the following
persons in the capacities indicated on October 28, 1994.
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* Chairman and President
...................................... Chief Executive Officer
TERRENCE MURRAY and Director
* Executive Vice President
...................................... and Chief Financial
EUGENE M. MCQUADE Officer
* Controller
......................................
ROBERT C. LAMB, JR.
* Director
......................................
WILLIAM BARNET, III
* Director
......................................
BRADFORD R. BOSS
* Director
......................................
PAUL J. CHOQUETTE, JR.
* Director
......................................
JAMES F. HARDYMON
Director
......................................
ROBERT M. KAVNER
* Director
......................................
LAFAYETTE KEENEY
</TABLE>
II-2
<PAGE> 56
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* Director
......................................
RAYMOND C. KENNEDY
* Director
......................................
RUTH R. MCMULLIN
* Director
......................................
ARTHUR C. MILOT
Director
......................................
THOMAS D. O'CONNOR
* Director
......................................
MICHAEL B. PICOTTE
* Director
......................................
JOHN A. REEVES
* Director
......................................
JOHN R. RIEDMAN
* Director
......................................
JOHN S. SCOTT
*By /s/ WILLIAM C. MUTTERPERL
..................................
WILLIAM C. MUTTERPERL
Senior Vice President,
General Counsel and Secretary
Attorney-in-Fact
</TABLE>
II-3
<PAGE> 1
EXHIBIT 4(J)
FLEET FINANCIAL GROUP, INC.
Form of Warrant Agreement
[for warrants sold attached to equity
securities]1/*
--
THIS WARRANT AGREEMENT is dated as of between
Fleet Financial Group, Inc., a Rhode Island corporation
(hereinafter called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred
to) and , as Warrant Agent
(herein called the "Warrant Agent").
WHEREAS, the Company proposes to sell [title of Equity
Securities being offered] (the "Offered Securities") with
warrant certificates evidencing one or more warrants (the
"Warrants" or individually a "Warrant") representing the right
to purchase [title of Equity Securities purchasable through
exercise of Warrants] (the "Warrant Securities"), such warrant
certificates and other warrant certificates issued pursuant to
this Agreement being herein called the "Warrant Certificates";
and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company in connection with the issuance,
exchange, exercise and replacement of the Warrant Certificates,
and in this Agreement wishes to set forth, among other things,
the form and provisions of the Warrant Certificates and the
terms and conditions on which they may be issued, exchanged,
exercised and replaced;
NOW THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as
follows:
ARTICLE I.
ISSUANCE OF WARRANTS AND EXECUTION
AND DELIVERY OF WARRANT CERTIFICATES
Section 1.01. Issuance of Warrants. Warrants shall be
initially issued in connection with the issuance of the Offered
Securities [but shall be separately transferable on and after
, 19 . (the "Detachable Date")] [and shall not be
separately transferable] and each Warrant Certificate shall
evidence one or more Warrants. Each Warrant evidenced thereby
shall represent the right, subject to the provisions
1 *Complete or modify the provisions of this Form as
- -- appropriate to reflect the terms of the Warrants and
Warrant Securities.
<PAGE> 2
contained herein and therein, to purchase Warrant
Securities. Warrant Certificates shall be initially issued in
units with the Offered Securities and each Warrant Certificate
included in such a unit shall evidence Warrants for
Offered Securities included in such unit.
Section 1.02. Execution and Delivery of Warrant
Certificates. Each Warrant Certificate, whenever issued, shall
be in [bearer] [registered] form substantially in the form set
forth in Exhibit A hereto, shall be dated and may
have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed,
lithographed or engraved thereon as the officers of the Company
executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Agreement, or as may
be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Warrants may be listed, or
to conform to usage. The Warrant Certificates shall be signed
on behalf of the Company by its Chairman of the Board, its
President, one of its Vice Presidents, its Treasurer or one of
its Assistant Treasurers under its corporate seal and attested
by its Secretary or one of its Assistant Secretaries. Such
signatures may be manual or facsimile signatures of such
authorized officers and may be imprinted or otherwise
reproduced on the Warrant Certificates. The seal of the
Company may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the
Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no
Warrant evidenced thereby shall be exercisable, until such
Warrant Certificate has been countersigned by the manual
signature of the Warrant Agent. Such signature by the Warrant
Agent upon any Warrant Certificate executed by the Company
shall be conclusive evidence that the Warrant Certificate so
countersigned has been duly issued hereunder.
In case any officer of the Company who shall have signed any
of the Warrant Certificates either manually or by facsimile
signature shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned and
delivered by the Warrant Agent, such Warrant Certificates may
be countersigned and delivered notwithstanding that the person
who signed such Warrant Certificates ceased to be such officer
of the Company; and any Warrant Certificate may be signed on
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<PAGE> 3
behalf of the Company by such persons as, at the actual date of
the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution
of this Agreement any such person was not such officer.
[If bearer Warrant - The term "holder" or "holder of a
Warrant Certificate" as used herein shall mean [If Offered
Securities with Warrants which are not immediately detachable -
prior to the Detachable Date, the registered owner of the
Offered Security to which such Warrant Certificate was
initially attached, and after such Detachable Date] the bearer
of such Warrant Certificate.]
If registered Warrants - The term "holder" or "holder of a
Warrant Certificate" as used herein shall mean any person in
whose name at the time any Warrant Certificate shall be
registered upon the books to be maintained by the Warrant Agent
for that purpose. [If Offered Securities with Warrants which
are not immediately detachable - or upon the register of the
Offered Securities prior to the Detachable Date. The Company
will or will cause the registrar of the Offered Securities to
make available at all times to the Warrant Agent such
information as to holders of the Offered Securities with
Warrants as may be necessary to keep the Warrant Agent's
records up to date.]]
Section 1.03. Issuance of Warrant Certificates. Warrant
Certificates evidencing the right to purchase Warrant Securities
(except as provided in Sections 2.03(c), 3.02 and 4.01) may be
executed by the Company and delivered to the Warrant Agent upon
the execution of this Warrant Agreement or from time to time
thereafter. The Warrant Agent shall, upon receipt of Warrant
Certificates duly executed on behalf of the Company, countersign
Warrant Certificates evidencing Warrants representing the right to
purchase up to Warrant Securities and shall deliver
such Warrant Certificates to or upon the order of the Company.
Subsequent to such original issuance of the Warrant Certificates,
the Warrant Agent shall countersign a Warrant Certificate only if
the Warrant Certificate is issued in exchange or substitution for
one or more previously countersigned Warrant Certificates [If
registered Warrants - or in connection with their transfer], as
hereinafter provided or as provided in Section 2.03(c).
ARTICLE II.
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section 2.01. Warrant Price. On , 19 , the
exercise price of each Warrant is $ . During the
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<PAGE> 4
period from , 19 through and including
, 19 the exercise price of each Warrant will
be $ . On , 19 , the exercise
price of each Warrant will be $ . Such purchase
price of Warrant Securities is referred to in this Agreement
as the "Warrant Price." The Warrant Price and the number
and kind of shares of capital stock for which a Warrant may
be exercised is subject to adjustment from time to time as
set forth in Article V hereof.
Section 2.02. Duration of Warrants. Each Warrant may be
exercised in whole at any time, as specified herein, on or
after [the date thereof] [ , 19 ] and at or before 5
p.m. New York time on , 19 ,(the "Expiration
Date"). Each Warrant not exercised at or before 5 pm. New York
time on the Expiration Date shall become void, and all rights
of the holder of the Warrant Certificate evidencing such
Warrant under this Agreement shall cease.
Section 2.03. Exercise of Warrants. (a) During the period
specified in Section 2.02. any whole number of Warrants may be
exercised by providing certain information set forth on the
reverse side of the Warrant Certificate and by paying in full
[in lawful money of the United States of America] [in cash or
by certified check or official bank check or by bank wire
transfer, in each case] [by bank wire transfer], in immediately
available funds, the Warrant Price for each Warrant exercised,
to the Warrant Agent at its corporate trust office [or at
], provided that such exercise is subject to receipt
within five business days of such [payment] [wire transfer] by
the Warrant Agent of the Warrant Certificate with the form of
election to purchase Warrant Securities set forth on the
reverse side of the Warrant Certificate properly completed and
duly executed. The date on which payment in full of the
Warrant Price is received by the Warrant Agent shall, subject
to receipt of the Warrant Certificate as aforesaid, be deemed
to be the date on which the Warrant is exercised. The Warrant
Agent shall deposit all funds received by it in payment of the
Warrant Price in an account of the Company maintained with it
and shall advise the Company by telephone at the end of each
day on which a [payment] [wire transfer] for the exercise of
Warrants is received of the amount so deposited to its account.
The Warrant Agent shall promptly confirm such telephone advice
to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly
as practicable, advise the Company of (i) the number of Warrants
exercised, (ii) the instructions of each holder of the Warrant
Certificates evidencing such Warrants with respect to delivery
of the Warrant Securities to which such holder is entitled upon
such exercise, (iii) delivery of Warrant Certificate evidencing
the balance, if any, of the Warrants remaining after such
exercise, and (iv) such other information as the Company shall
reasonably require.
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<PAGE> 5
(c) As soon as practicable after the exercise of any
Warrant, the Company shall issue to or upon the order of the
holder of the Warrant Certificate evidencing such Warrant, the
Warrant Securities to which such holder is entitled in fully
registered form, registered in such name or names as may be
directed by such holder. Such certificate or certificates
evidencing the Common Stock shall be deemed to have been issued
and any persons who are designated to be named therein shall be
deemed to have become the holder of record of such Warrant
Securities as of the close of business on the exercise date.
No fractional shares of Warrant Securities will be issued upon
exercise of any Warrant. For each fractional share that would
otherwise be issued, the Company will pay by company check in
an amount equal to such fraction multiplied by the closing
sales price of the Warrant Securities on the New York Stock
Exchange (or if not so listed, another equivalent means
reasonably determined by the Company) on the business day
immediately preceding the exercise date. If fewer than all of
the Warrants evidenced by such Warrant Certificate are
exercised, the Company shall execute, and an authorized officer
of the Warrant Agent shall manually countersign and deliver, a
new Warrant Certificate evidencing the number of such Warrants
remaining unexercised.
(d) The Company shall not be required to pay any stamp or
other tax or other governmental change required to be paid in
connection with any transfer involved in the issue of the
Warrant Securities and in the event that any such transfer is
involved, the Company shall not be required to issue or deliver
any Warrant Security until such tax or other charge shall have
been paid or it has been established to the Company's
satisfaction that no such tax or other charge is due.
ARTICLE III.
OTHER PROVISIONS RELATING TO RIGHTS OF
HOLDERS
OF WARRANT CERTIFICATES
SECTION 3.01. No Rights as Stockholder Conferred by Warrants
or Warrant Certificates. No Warrant Certificate or Warrant
evidenced thereby shall entitle the holder thereof to any of
the rights of a holder of Warrant Securities, including,
without limitation, the right to receive dividends, vote,
receive notice of any meeting of stockholders or otherwise have
any right as stockholder of the Company.
SECTION 3.02. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. Upon receipt by the Warrant Agent of evidence
reasonably satisfactory to it of the ownership of and the loss,
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<PAGE> 6
theft, destruction or mutilation of any Warrant Certificate and
of indemnity reasonably satisfaction to it and, in the case of
mutilation, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or
the Warrant Agent that such Warrant Certificate has been
acquired by a bona fide purchaser, the Company shall execute,
and an authorized officer of the Warrant Agent shall manually
countersign and deliver, in exchange for or in lieu of the
lost, stolen, destroyed or mutilated Warrant Certificate, a new
Warrant Certificate of the same tenor and evidencing a like
number of Warrants. Upon the issuance of any new Warrant
Certificate under this Section, the Company may require the
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the
Warrant Agent) in connection therewith. Every substitute
Warrant Certificate executed and delivered pursuant to this
Section in lieu of any lost, stolen or destroyed Warrant
Certificate shall represent an additional contractual
obligation of the Company, whether or not the lost, stolen or
destroyed Warrant Certificate shall be at any time enforceable
by anyone, and shall be entitled to the benefits of this
Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder. The
provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect
to the replacement of mutilated, lost, stolen or destroyed
Warrant Certificates.
SECTION 3.03. Holder of Warrant Certificate May Enforce
Rights. Notwithstanding any of the provisions of this
Agreement any holder of a Warrant Certificate without the
consent of the Warrant Agent, the holder of any Warrant
Securities or the holder of any other Warrant Certificate, may,
in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against
the Company suitable to enforce or otherwise in respect of, his
right to exercise the Warrants evidenced by his Warrant
Certificate in the manner provided in his Warrant Certificate
and in this Agreement.
ARTICLE IV.
EXCHANGE AND TRANSFER OF WARRANT CERTIFICATE
SECTION 4.01. Exchange and Transfer of Warrant Certificates.
[If Offered Securities with Warrants which are immediately
detachable - Upon] [If Offered Securities with Warrants which
are not immediately detachable - Prior to the Detachable Date,
a Warrant Certificate may be exchanged or
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<PAGE> 7
transferred only together with the Offered Securities to which
the Warrant Certificate was initially attached and only for the
purpose of effecting or in conjunction with an exchange or
transfer of such Offered Securities. Prior to the Detachable
Date, each transfer of the Offered Securities [or the register
of the Offered Securities] shall operate also to transfer the
related Warrant Certificates. After the Detachable Date upon]
surrender at the corporate trust office of the Warrant Agent
[or ], Warrant Certificate evidencing Warrants may
be exchanged for Warrant Certificates in other denominations
evidencing such Warrants [If registered Warrants; or the
transfer thereof may be registered in whole or in part];
provided that such other Warrant Certificates evidence the same
aggregate number of Warrants as the Warrant Certificates so
surrendered. [If registered Warrants - The Warrant Agent shall
keep, at its corporate trust office [and at ],
books in which, subject to such reasonable regulations as it
may prescribe, it shall register Warrant Certificates and
exchanges and transfers of outstanding Warrant Certificates,
upon surrender of the Warrant Certificates to the Warrant Agent
at its corporate trust office [or ] for exchange
[or registration of transfer], properly endorsed or accompanied
by appropriate instruments of registration of transfer and
written instructions for transfer, all in form satisfactory to
the Company and the Warrant Agent.] No service charge shall be
made for any exchange [or registration of transfer] of Warrant
Certificates, but the Company may require payment of a sum
sufficient to cover any stamp or other tax or other governmental
charge that may be imposed in connection with any such exchange
[or registration of transfer]. Whenever any Warrant Certificates
are so surrendered for exchange [or registration of transfer] an
authorized officer of the Warrant Agent shall manually countersign
and deliver to the person or persons entitled thereto a Warrant
Certificate or Warrant Certificates duly authorized and executed
by the Company as so requested. The Warrant Agent shall not be
required to effect any exchange [or registration of transfer]
which will result in the issuance of a Warrant Certificate
evidencing a fraction of a Warrant or a number of full Warrants
and a fraction of a Warrant. All Warrant Certificates issued upon
any exchange [or registration of transfer] of Warrant Certificates
shall be the valid obligations of the Company, evidencing the same
obligations, and entitled to the same benefits under this Agreement,
as the Warrant Certificates surrendered for such exchange [or
registration of transfer].
SECTION 4.02. Treatment of Holders of Warrant Certificates.
[If Offered Securities with bearer Warrants which are not
immediately detachable - Subject to Section 4.01, each] [If
Offered Securities with bearer Warrants which are
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<PAGE> 8
immediately detachable - Each] Warrant Certificate shall be
transferable by delivery and shall be deemed negotiable and the
bearer of each Warrant Certificate may be treated by the
Company, the Warrant Agent and all other persons dealing with
such bearer as the absolute owner thereof for any purpose and
as the person entitled to exercise the rights represented by
the Warrants evidenced thereby, any notice to the contrary
notwithstanding.] [If registered Warrants which are not
immediately detachable - Every holder of a Warrant Certificate,
by accepting the same, consents and agrees with the Company,
the Warrant Agent and with every subsequent holder of such
Warrant Certificate that until the transfer of the Warrant
Certificate is registered on the books of the Warrant Agent [or
the registrar of the Offered Securities prior to the Detachable
Date], the Company and the Warrant Agent [or the registrar of
the Offered Securities prior to the Detachable Date] may treat
the registered holder as the absolute owner thereof for any
purpose and as the person entitled to exercise the rights
represented by the Warrants evidenced thereby, any notice to
the contrary notwithstanding.]
SECTION 4.03. Cancellation of Warrant Certificates. Any
Warrant Certificate surrendered for exchange [registration of
transfer] or exercise of the Warrants evidenced thereby shall,
if surrendered to the Company, be delivered to the Warrant
Agent and all Warrant Certificates surrendered or so delivered
to the Warrant Agent shall be promptly cancelled by the Warrant
Agent and shall not be reissued and, except as expressly
permitted by this Agreement, no Warrant Certificate shall be
issued hereunder in exchange or in lieu thereof. The Warrant
Agent shall deliver to the Company from time to time or
otherwise dispose of cancelled Warrant Certificates in a manner
satisfactory to the Company.
ARTICLE V
ADJUSTMENTS.
SECTION 5.01. ADJUSTMENT OF WARRANT PRICE. The Warrant
Price shall be subject to adjustment from time to time upon the
happening of certain events as hereinafter described.
5.01 MANDATORY ADJUSTMENTS. The Warrant Securities shall be
subject to adjustment as follows:
(a) If the Company shall (i) declare or pay a dividend
on its outstanding Warrant Securities in shares of Warrant
Securities or make a distribution to holders of its Warrant
Securities in shares of Warrant Securities, (ii) subdivide
its outstanding shares of Warrant Securities into
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<PAGE> 9
a greater number of shares of Warrant Securities, (iii)
combine its outstanding shares of Warrant Securities into a
smaller number of shares of Warrant Securities, or (iv)
issue by reclassification of its shares of Warrant
Securities other securities of the Company, then the
Warrant Securities in effect immediately prior thereto
shall be adjusted so that the holder of any Warrants
thereafter exercised shall be entitled to receive the
number and kind of shares of Warrant Securities or other
securities that the holder would have owned or been
entitled to receive after the happening of any of the
events described above had such Warrants been exercised
immediately prior to the happening of such event or any
record date with respect thereto. An adjustment made
pursuant to this paragraph 5.01(a) shall become effective
on the date of the dividend payment, subdivision,
combination or issuance retroactive to the record date with
respect thereto, if any, for such event. Such adjustment
shall be made successively.
(b) If the Company shall issue to all holders of its
Warrant Securities rights, options, warrants or convertible
or exchangeable securities expiring within 60 days
containing the right to subscribe for or purchase shares of
Warrant Securities at a price per share that is lower than
the then Quoted Price per share (as hereinafter defined) of
Warrant Securities, then the Warrant Securities shall be
adjusted in accordance with the following formula:
(N X P)
-----
AE = E x O + ( M )
-----------
O + N
where
AE = the adjusted Warrant Price.
E = the current Warrant Price.
O = the number of shares of Warrant Securities outstanding
on the record date.
N = the number of additional shares of Warrant Securities
offered.
P = the offering price per share of the additional shares.
M = the Quoted Price per share of Warrant Securities on the
record date.
The adjustment shall be made successively whenever any such
rights, options, warrants or convertible or exchangeable
securities are issued and shall become effective immediately
after the record date for the determination of shareholders
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<PAGE> 10
entitled to receive the rights, options, warrants or convertible
or exchangeable securities. Upon the expiration of any such
rights, options, warrants or convertible or exchangeable
securities, if any thereof shall not have been exercised, the
Warrant Price shall be increased by the amount of the initial
adjustment of the Warrant Price made pursuant to this Section
5.01(b) in respect of such expired rights, options, warrants or
convertible or exchangeable securities. For the purposes of
this Section 5.01, the "Quoted Price" per share of Warrant
Securities at any date shall be deemed to be the average of the
daily closing prices for the 20 consecutive trading days
commencing on the 30th trading day prior to the date in
question. The closing price for each day shall be (i) if the
Warrant Securities are listed or admitted to trading on a
national securities exchange, the closing price on the New York
Stock Exchange Consolidated Tape (or any successor composite
tape reporting transactions on national securities exchanges)
or, if such a composite tape shall not be in use or shall not
report transactions in the Warrant Securities, the last
reported sales price regular way on the principal national
securities exchange on which the Warrant Securities are listed
or admitted to trading (which shall be the national securities
exchange on which the greatest number of shares of Warrant
Securities has been traded during such 20 consecutive trading
days), or, if there is no transaction on any such day in any
such situation, the mean of the bid and asked prices on such
day, or (ii) if the Warrant Securities are not listed or
admitted to trading on any such exchange, the closing price, if
reported, or, if the closing price is not reported, the average
of the closing bid and asked prices as reported by NASDAQ, or
(iii) if bid and asked prices for the Warrant Securities on
each such day shall not have been reported through NASDAQ, the
average of the bid and asked prices for such date as furnished
by any three New York Stock Exchange member firms regularly
making a market in the Warrant Securities and not affiliated
with the Company selected for such purpose by the Board of
Directors of the Company, or (iv) if no such quotations are
available, the fair market value of the Warrant Securities as
determined by a New York Stock Exchange member firm regularly
making a market in the Warrant Securities selected for such
purpose by such Board.
(c) If the Company shall distribute to all holders of its
outstanding Warrant Securities any shares of capital stock of
the Company (other than Warrant Securities) or evidences of
indebtedness or assets (excluding ordinary cash dividends,
other cash distributions from current or retained earnings and
dividends or distributions referred to in Sections 5.01(a) and
(b)) or rights or warrants to subscribe for or purchase any of
its securities (excluding those referred to in Section 5.01(b)
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<PAGE> 11
above) (any of the foregoing being hereinafter in this Section
5.01(c) called the "Securities or Assets"), then in each such
case, unless the Company elects to reserve shares or other
units of such Securities or Assets for distribution to each
holder of a Warrant upon the exercise of the Warrants so that
such holder will receive upon such exercise, in addition to the
shares of the Warrant Securities to which such holder is
entitled, the amount and kind of such Securities or Assets
which such holder would have received if such holder had,
immediately prior to the record date for the distribution of
the Securities or Assets, exercised the Warrants and received
Warrant Securities, the Warrant Price shall be adjusted so that
the same shall equal the price determined by multiplying the
Warrant Price in effect immediately prior to the date of such
distribution by a fraction, the numerator of which shall be the
Quoted Price per share of the Warrant Securities on the record
date mentioned below less the then fair market value (as
determined in good faith by the Board of Directors of the
Company), of the portion of the Securities or Assets so
distributed or of such rights or warrants applicable to one
share of Warrant Securities, and the denominator of which shall
be the Quoted Price per share of the Warrant Securities on such
record date; PROVIDED, HOWEVER, that if the then fair market
value (as so determined) of the portion of the Securities or
Assets so distributed applicable to one Warrant Security equals
or exceeds the Quoted Price per Warrant Security on the record
date mentioned above, in lieu of the foregoing adjustment,
adequate provision shall be made so that the holder of the
Warrants shall have the right to receive the amount and kind of
Securities and Assets such holder would have received had such
holder exercised each such Warrant immediately prior to the
record date for the distribution of the Securities or Assets.
Such adjustment shall become effective immediately after the
record date for the determination of shareholders entitled to
receive such distribution.
(d) No adjustment in the Warrant Price shall be required
unless such adjustment would require an increase or decrease of
at least 1% of such price. All calculations under this
Section 5.01 shall be made to the nearest one-hundredth of a
cent or to the nearest one-hundredth of a share, as the case
may be.
(e) If the Company shall be a party to any transaction,
including without limitation a merger, consolidation, sale of
all or substantially all of the Corporation's assets,
liquidation or recapitalization of the Warrant Securities (each
of the foregoing being referred to as a "Transaction"), in each
case [Insert for Common Stock: (except in the case of a
Warrant Securities Fundamental Change (as hereinafter
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<PAGE> 12
defined))] as a result of which shares of Warrant Securities
shall be converted into the right to receive stock, securities
or other property (including cash or any combination thereof),
each Warrant shall thereafter be exercisable into the kind and
amount of shares of stock and other securities and property
receivable (including cash) upon the consummation of such
Transaction by a holder of that number of shares of Warrant
Securities issuable upon the exercise of one Warrant
immediately prior to such Transaction. The Company shall not
be a party to any Transaction unless the terms of such
Transaction are consistent with the provisions of this Section
5.01(e) and it shall not consent or agree to the occurrence of
any Transaction until the Company has entered into an agreement
with the successor or purchasing entity, as the case may be,
for the benefit of the holders of the Warrants, which shall
contain provisions enabling the holders of the Warrants to
exercise such Warrants for the consideration received by
holders of Warrant Securities at the Warrant Price immediately
after such Transaction. The provisions of this Section 5.01(e)
shall similarly apply to successive Transactions.
[Insert for Common Stock: (f) In the event of a common
stock Fundamental Change, each Warrant shall be exercisable
into Common Stock of the kind received by holders of Common
Stock as the result of such Common Stock Fundamental Change.
The Warrant Price immediately following such Common Stock
Fundamental Change shall be the Warrant Price in effect
immediately prior to such Common Stock Fundamental Change
multiplied by a fraction, the numerator of which is the
Purchaser Stock Price (as hereinafter defined) and the
denominator of which is the Applicable Price (as hereinafter
defined). The Company shall not consent or agree to the
occurrence of any Common Stock Fundamental Change until the
Company has entered into an agreement with the successor or
purchasing entity, as the case may be, for the benefit of the
holders of the Warrants which shall contain provisions enabling
the holders of the Warrants to exercise such Warrants for the
consideration received by holders of Common Stock at the
Warrant Price immediately after such Common Stock Fundamental
Change. The provisions of this Section 5.01(f) shall similarly
apply to successive Common Stock Fundamental Changes.
(g) As used herein:
(i) The term "Applicable Price" means the Quoted Price
for one share of the Common Stock on the record date for
the determination of the holders of Common Stock entitled
to receive Common Stock in connection with such Common
Stock Fundamental Change, or, if there is no such
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<PAGE> 13
record date, on the date upon which the holders of Common
Stock shall have the right to receive such Common Stock.
(ii) The term "Common Stock Fundamental Change" shall
mean the occurrence of any transaction or event in
connection with which all or substantially all the Common
Stock shall be exchanged for, converted into, acquired for
or shall constitute solely the right to receive Common
Stock that, for the ten consecutive trading days
immediately prior to such Common Stock Fundamental Change,
has been admitted for listing on a national securities
exchange or quoted on the National Market System of NASDAQ
(whether by means of an exchange offer, liquidation, tender
offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise).
(iii) The term "Purchaser Stock Price" shall mean, with
respect to any Common Stock Fundamental Change, the Quoted
Price for one share of the Common Stock received by holders
of Common Stock in such Common Stock Fundamental Change
(determined as if the definition of Quoted Price contained
in this Agreement were applicable to such Common Stock) on
the record date for the determination of the holders of
Common Stock entitled to receive such common stock or, if
there is no such record date, on the date upon which the
holders of Common Stock shall have the right to receive
such Common Stock.]
(h) For the purposes of this Section 5.01, the term "shares
of Warrant Securities" shall mean (i) the class of stock
designated as the Warrant Securities of the Company at the date
hereof or (ii) any other class of stock resulting from
successive changes or reclassifications of such shares
consisting solely of changes in par value, or from no par value
to par value. If at any time, as a result of an adjustment
made pursuant to Sections 5.01(a), (c), (e) or (f) the Holder
shall become entitled to receive any securities other than
shares of Warrant Securities, thereafter the number of such
other securities so issuable upon the exercise of the Warrants
shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the
provisions with respect to the rights contained in this Section
5.01.
(i) Notwithstanding the foregoing, in any case which this
Section 5.01 provides that an adjustment shall become effective
immediately after a record date for an event, the Company may
defer until the occurrence of such event (i) issuing to the
holder of any Warrant exercised after such record date and
before the occurrence of such event the additional shares of
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<PAGE> 14
Warrant Securities issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such holder any
amount in cash by company check in lieu of any fraction
pursuant to Section 2.03.
(j) If the Company shall take any action affecting the
Warrant Securities, other than action described in this Section
5.01, which in the opinion of the Board of Directors of the
Company would materially adversely affect the exercise rights
of the holders of the Warrants, the Warrant Price for the
Warrants may be adjusted, to the extent permitted by law, in
such manner, if any, and at such time, as such Board may
determine in good faith to be equitable in the circumstances.
Failure of the Board of Directors of the Company to provide for
any such adjustment prior to the effective date of any such
action by the Company affecting the Warrant Securities shall be
evidence that the Board of Directors of the Company has
determined that it is equitable to make no adjustments in the
circumstances.
SECTION 5.02. VOLUNTARY ADJUSTMENT BY THE COMPANY. The
Company may at its option, at any time during the term of the
Warrants, reduce the then current Warrant Price to any amount
deemed appropriate by the Board of Directors of the Company;
PROVIDED, THAT, if the Company elects so to reduce the then
current Warrant Price, such reduction shall remain in effect
for at least 20 Business Days, after which time the Company
may, at its option, reinstate the Warrant Price in effect prior
to such reduction.
SECTION 5.03. NOTICE OF ADJUSTMENT. Whenever the
Warrant Price is adjusted as herein provided, the Chief
Financial Officer of the Company shall compute the adjusted
Warrant Price in accordance with the foregoing provisions and
shall prepare a certificate setting forth such adjusted Warrant
Price and showing in reasonable detail the facts upon which
such adjustment is based. A copy of such certificate shall be
filed promptly with the Warrant Agent. Promptly after delivery
of such certificate, the Company shall prepare a notice of such
adjustment of the Warrant Price setting forth the adjusted
Warrant Price and the date on which such adjustment becomes
effective and shall mail, or cause the Warrant Agent to mail at
the Company's expense, such notice of such adjustment of the
Warrant Price to each holder of a Warrant at his last address
as shown on the Warrants Register.
SECTION 5.04. NO ADJUSTMENT FOR DIVIDENDS. Except as
provided in Section 5.01 hereof, no adjustment in respect of
any dividends or other payments or distributions made to
holders of securities issuable upon exercise of Warrants shall
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<PAGE> 15
be made during the term of a Warrant or upon the exercise of a
Warrant.
SECTION 5.05. STATEMENT ON WARRANTS CERTIFICATE.
Irrespective of any adjustments in the number or kind of
securities purchasable upon the exercise of the Warrants or the
Warrant Securities, any Warrant Certificate theretofore or
thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrant
Certificate initially issuable pursuant to this Agreement.
SECTION 5.06. WARRANT AGENT'S ADJUSTMENT DISCLAIMER.
The Warrant Agent has no duty to determine when an adjustment
under this Article V should be made, how it should be made or
what it should be. The Warrant Agent shall not be accountable
for and makes no representation as to the validity or value of
any securities or assets issued upon exercise of Warrants. The
Warrant Agent shall not be responsible for the Company's
failure to comply with this Article V.
ARTICLE VI.
CONCERNING THE WARRANT AGENT
SECTION 6.01. Warrant Agent. The Company hereby appoints
as Warrant Agent of the Company in respect of
the Warrants and the Warrant Certificates upon the terms and
subject to the conditions herein set forth; and
hereby accepts such appointment. The Warrant Agent shall have
the powers and authority granted to and conferred upon it in
the Warrant Certificates and hereby and such further powers and
authority to act on behalf of the Company as the Company may
hereafter grant to or confer upon it. All of the terms and
provisions with respect to such powers and authority contained
in the Warrant Certificates are subject to and governed by the
terms and provisions hereof.
SECTION 6.02. Conditions of Warrant Agent's Obligations.
The Warrant Agent accepts its obligations herein set forth upon
the terms and conditions hereof including the following, to all
of which the Company agrees and to all of which the rights
hereunder of the holders from time to time of the Warrant
Certificates shall be subject.
(a) The Company agrees promptly to pay the Warrant
Agent the compensation to be agreed upon with the Company
for all services rendered by the Warrant Agent and to
reimburse the Warrant Agent for reasonable out-of-pocket
expenses (including counsel fees) incurred by the Warrant
Agent in connection with the services rendered hereunder by
the Warrant Agent. The Company also agrees to indemnify
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<PAGE> 16
the Warrant Agent for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or
bad faith on the part of the Warrant Agent, arising out of
or in connection with its acting as Warrant Agent
hereunder, as well as the costs and expenses of defending
against any claim of such liability.
(b) In acting under this Warrant Agreement and in
connection with the Warrant Certificates, the Warrant Agent
is acting solely as agent of the Company and does not
assume any obligation or relationship of agency or trust
for or with any of the holders of Warrant Certificates or
beneficial owners of Warrants.
(c) The Warrant Agent may consult with counsel
satisfactory to it, and the advice of such counsel shall be
full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in
good fait and in accordance with the advice of such counsel.
(d) The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken or
thing suffered by it in reliance upon any Warrant
Certificate, notice, direction, consent, certificate,
affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or
signed by the proper parties.
(e) The Warrant Agent, and its officers, director and
employees, may become the owner of or acquire any interest
in, Warrants, with the same rights that it or they would
have if it were not the Warrant Agent hereunder, and, to
the extent permitted by applicable law, it or they may
engage or be interested in any financial or other
transaction with the Company and any act on, or as
depositary, trustee or agent for, any committee or body of
holders of Warrant Securities or other obligations of th
Company as freely as if it were not the Warrant Agent
hereunder.
(f) The Warrant Agent shall have no liability for
interest on any monies at any time received by it pursuant
to any of the provisions of this Agreement or of the
Warrant Certificates.
(g) The Warrant Agent shall have no liability with
respect to any invalidity of this Agreement or any of the
Warrant Certificates.
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<PAGE> 17
(h) The Warrant Agent shall not be responsible for any
of the recitals or representations herein or in the Warrant
Certificates (except as to the Warrant Agent's
countersignature thereon), all of which are made solely by
the Company.
(i) The Warrant Agent shall be obligated to perform
only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties
or obligations shall be read into this Agreement or the
Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be under any obligation to take any
action hereunder which may tend to involve it in any
expense or liability, the payment of which within a
reasonable time is not in its reasonable opinion, assured
to it. The Warrant Agent shall not be accountable or under
any duty or responsibility for the use by the Company of
any of the Warrant Certificates authenticated by the
Warrant Agent and delivered by it to the Company pursuant
to this Agreement or for the application by the Company of
the proceeds of the Warrant Certificates. The Warrant
Agent shall have no duty or responsibility in case of any
default by the Company in the performance of its covenants
or agreements contained herein or in the Warrant
Certificates or in the case of the receipt of any written
demand from a holder of a Warrant Certificate with respect
to such default, including, without limiting the generality
of the foregoing, any duty or responsibility to initiate or
attempt to initiate any proceedings at law or otherwise or,
except as provided in Section 6.02 to make any demand upon
the Company.
(j) The Warrant Agent is hereby authorized to obtain
from time to time from the present transfer agent for the
Warrant Securities (the "Transfer Agent"), and any
successor Transfer Agent, stock certificates required to
honor outstanding Warrants. The Company hereby authorizes
its present and any successor Transfer Agent to comply with
all such requests. The Company will supply such Transfer
Agent with duly executed stock certificates for such
purpose and will provide or otherwise make available any
cash which may be payable as provided in Section 2.03
hereof, and the Warrant Agent shall not be responsible for
any delay or failure by such Transfer Agent in supplying
such stock certificates.
SECTION 6.03. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders of the
Warrant Certificates, that there shall at all times be a
Warrant Agent hereunder until all the Warrant Certificates are
not longer exercisable.
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<PAGE> 18
(b) The Warrant Agent may at any time resign as such agent
by giving written notice to the Company of such intention on
its part, specifying the date on which its desired resignation
shall become effective provided that such date shall not be
less than three months after the date on which such notice is
given unless the Company otherwise agrees. The Warrant Agent
hereunder may be removed at any time by the filing with it of
an instrument in writing signed by or on behalf of the Company
and specifying such removal and the date when it shall become
effective. Such resignation or removal shall take effect upon
the appointment by the Company, as hereinafter provided, of a
successor Warrant Agent (which shall be a bank or trust company
authorized under the laws of the jurisdiction of its
organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent.
The obligation of the Company under Section 6.02(a) shall
continue to the extent set forth therein notwithstanding the
resignation or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or
shall be removed or shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent or shall file a petition
seeking relief under the Federal Bankruptcy Code, as now
constituted or hereafter amended or under any other applicable
Federal or State bankruptcy law or similar law or make an
assignment for the benefit of its creditors or consent to the
appointment of a receiver or custodian of all of any
substantial part of its property, or shall admit in writing its
inability to pay or meet its debts as they mature, or if a
receiver or custodian of it or of all or any substantial part
of its property shall be appointed, or if an order of any court
shall be entered for relief against it under the provisions of
the Federal Bankruptcy Code, as now constituted or hereafter
amended, or under any other applicable Federal or State
bankruptcy or similar law, or if any public officer shall have
taken charge or control of the Warrant Agent or of its property
or affairs, for the purpose of rehabilitation, conservation or
liquidation, a successor Warrant Agent, qualified aforesaid,
shall be appointed by the Company by an instrument in writing,
filed with the successor Warrant Agent. Upon the appointment
as aforesaid of a successor Warrant Agent and acceptance by the
successor Warrant Agent of such appointment, the Warrant Agent
shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the
Company an instrument accepting such appointment hereunder, and
thereupon such successor Warrant Agent, without any further
act, deed or conveyance, shall become vested with all the
authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if
-18-
<PAGE> 19
originally named as Warrant Agent hereunder, and such
predecessor, upon payment of its charges and disbursements then
unpaid, shall thereupon become obligated to transfer, deliver
and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property
on deposit with or held by such predecessor, as Warrant Agent
hereunder.
(e) Any corporation into which the Warrant Agent hereunder
may be merged or converted or any corporation with which the
Warrant Agent may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the
Warrant Agent shall be a party, or any corporation to which the
Warrant Agent shall sell or otherwise transfer all or
substantially all the assets and business of the Warrant Agent,
provided that it shall be qualified as aforesaid, shall be the
successor Warrant Agent under this Agreement without the
execution or filing of any paper or any further act on the part
of any of the parties hereto.
ARTICLE VII.
MISCELLANEOUS
SECTION 7.01. Amendment. This Agreement may be amended by
the parties hereto, without the consent of the holder of any
Warrant Certificate, for the purpose of curing any ambiguity,
or of curing, correcting or supplementing any defective
provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement as
the Company and the Warrant Agent may deem necessary or
desirable; provided that such action shall not adversely affect
the interests of the holders of the Warrant Certificates.
SECTION 7.02. Notices and Demands to the Company and Warrant
Agent. If the Warrant Agent shall receive any notice or demand
addressed to the Company by the holder of a Warrant Certificate
pursuant to the provisions of the Warrant Certificates, the
Warrant Agent shall promptly forward such notice or demand to
the Company.
SECTION 7.03. Addresses. Any communication from the Company
to the Warrant Agent with respect to this Agreement shall be
addressed to , Attention: ,
and any communication from the Warrant Agent to the Company
with respect to this Agreement shall be addressed to Fleet
Financial Group, Inc., 50 Kennedy Plaza, Providence, Rhode
Island 02903. Attention: (or such other
address as shall be specified in writing by the Warrant Agent
or by the Company).
-19-
<PAGE> 20
SECTION 7.04. Applicable Law. The validity, interpretation
and performance of this Agreement and each Warrant Certificate
issued hereunder and of the respective terms and provisions
thereof shall be governed by, and construed in accordance with,
the laws of the State of New York.
SECTION 7.05. Delivery of Prospectus. The Company will
furnish to the Warrant Agent sufficient copies of a prospectus
relating to the Warrant Securities deliverable upon exercise of
Warrants (the "Prospectus"), and the Warrant Agent agrees that
upon the exercise of any Warrant, the Warrant Agent will
deliver to the holder of the Warrant Certificate evidencing
such Warrant, prior to or concurrently with, the delivery of
the Warrant Securities issue upon such exercise, a Prospectus.
SECTION 7.06. Obtaining of Governmental Approvals. The
Company will from time to time take all action which may be
necessary to obtain and keep effective any and all permits,
consents and approvals of governmental agencies and authorities
and securities acts filings under United States Federal and
State laws (including, without limitation, a registration
statement in respect of the Warrants and Warrant Securities Act
of 1933), which may be or become requisite in connection with
the issuance, sale, transfer, and delivery of the Warrant
Certificates, the exercise of the Warrants, the issuance, sale,
transfer and delivery of the Warrant Securities issued upon
exercise of the Warrants or upon the expiration of the period
during which the Warrants are exercisable.
SECTION 7.07. Persons Having Rights under Warrant Agreement.
Nothing in this Agreement shall give to any person other than
the Company, the Warrant Agent and the holders of the Warrant
Certificates any right, remedy or claim under or by reason of
this Agreement.
SECTION 7.08. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted
for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
SECTION 7.09. Counterparts. This Agreement may be executed
in any number of counterparts, each of which as so executed
shall be deemed to be an original, but such counterparts shall
together constitute but one and the same instrument.
SECTION 7.10. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the
principal corporate trust office of the Warrant Agent for
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<PAGE> 21
inspection by the holder of any Warrant Certificate. The
Warrant Agent may require such holder to submit his Warrant
Certificate for inspection by it.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be affixed hereunto, and the same to be attested, all
as of the day and year first above written.
FLEET FINANCIAL GROUP, INC.
Attest: By __________________________
__________________________ [NAME OF WARRANT AGENT],
As Warrant Agent
Attest: By __________________________
__________________________
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<PAGE> 22
<TABLE>
EXHIBIT A
(FORM OF WARRANT CERTIFICATE)
[Face of Warrant Certificate]
<S> <C>
[Form of Legend of Prior to ,
Equity Securities with this Warrant Certificate
Warrants which are not cannot be transferred or
immediately detachable: exchanged unless attached to a
[Title of Offerred
Securities].]
</TABLE>
EXERCISABLE ONLY IF COUNTERSIGNED BY THE
WARRANT
AGENT AS PROVIDED HEREIN
FLEET FINANCIAL GROUP, INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
VOID AFTER 5 P.M. NEW YORK TIME ON , 19
[No.] Warrants
This certifies that [the bearer is the] [
or registered assigns is the registered] owner of the above
indicated number of Warrants, each Warrant entitling such
[bearer] [owner] to purchase, at any time [after 5 p.m. New
York time on , 19 , and] on or before 5 p.m. New
York time on , 19 , [Title of Warrant
Securities] (the "Warrant Securities"), of Fleet Financial
Group, Inc. (the "Company"), on the following basis: [on
, 19 the exercise price of each Warrant is $ ;
during the period from , 19 , through and
including , 19 , the exercise price of each
Warrant will be $ ; from , 19 ; on
, 19 the exercise price of each Warrant will be $ ;
during the period from , 19 , through and
including , 19 , the exercise price of each Warrant
will be $ (the "Warrant Price"). The holder may
exercise the Warrants evidenced hereby by providing certain
information set forth in the back hereof and by paying in full
[in lawful money of the United States of America] [in cash or
by certified check of official bank check or by bank wire
transfer, in each case] [by bank wire transfer], in immediately
available funds, the Warrant Price for each Warrant exercised
to the Warrant Agent (as hereinafter defined) and by
surrendering this Warrant Certificate with the purchase form on
the back hereof duly executed, at the corporate trust office of
[name of Warrant Agent] , or its successor as warrant agent
<PAGE> 23
(the "Warrant Agent"), [or ] currently at the
address specified on the reverse hereof, and upon compliance
with and subject to the conditions set forth herein and in the
Warrant Agreement (as hereinafter defined).
Any whole number of Warrants evidenced by this Warrant
Certificate may be exercised to purchase Warrant Securities in
registered form. Upon any exercise of fewer than all of the
Warrants evidenced by this Warrant Certificate, there shall be
issued to the holder hereof a new Warrant Certificate
evidencing the number of Warrants remaining unexercised.
The Company will not be required to issue fractional shares
of Warrant Securities upon exercise of the Warrants or
distribute stock certificates that evidence fractional shares
of Warrant Securities. In lieu of fractional shares of Warrant
Securities, there shall be paid by the Company to the
registered holder of this Warrant Certificate at the time such
Warrant Certificate is exercised an amount in cash payable by
company check equal to the closing sales price of the Warrant
Securities on the New York Stock Exchange (or if not so listed,
another equivalent means reasonably determined by the Company)
on the business day immediately preceding the exercise date,
multiplied by such fraction.
This Warrant Certificate is issued under and in accordance
with the Warrant Agreement dated as of , 19 ,
(the "Warrant Agreement") between the Company and the Warrant
Agent and is subject to the terms and provisions contained in
the Warrant Agreement, to all of which terms and provisions of
this Warrant Certificate consents by acceptance hereof. Copies
of the Warrant Agreement and the form of the Warrant Securities
are on file at the above mentioned office of the Warrant Agent
[and at ].
[If Offered Securities with bearer Warrants which are not
immediately detachable - Prior to , 19 , this
Warrant Certificate may be exchanged or transferred only
together with the [Title of Offered Securities] ("Offered
Securities") to which this Warrant Certificate was initially
attached, and only for the purpose of effecting, or in
conjunction with, an exchange or transfer of such Offered
Securities. After such date, this [If Offered Securities with
bearer Warrants which are immediately detachable - This]
Warrant Certificate, and all rights hereunder, may be
transferred by delivery and the Company and the Warrant Agent
may treat the bearer hereof as the owner for all purposes.]
[If Offered Securities with registered Warrants which are not
immediately detachable - Prior to , 19 , this
Warrant Certificate may be exchanged or transferred only
together with the [Title of Offered Securities] ("Offered
Securities") to which this Warrant Certificate was initially
-2-
<PAGE> 24
attached, and only for the purpose of effecting, or in
conjunction with, an exchange or transfer of such Offered
Securities. After such date, this [If Offered Securities with
registered Warrants which are immediately detachable - Transfer
of this] Warrant Certificate may be registered when this
Warrant Certificate is surrendered at the corporate trust
office of the Warrant Agent [or ] by the registered
owner or his assigns, in person or by an attorney duly
authorized in writing, in the manner and subject tot he
limitations provided in the Warrant Agreement.]
[If Offered Securities with Warrants which are not
immediately detachable - Except as provided in the immediately
preceding paragraph, after] [If Offered Securities with
Warrants which are immediately detachable - After]
countersignature by the Warrant Agent and prior to the
expiration of this Warrant Certificate, this Warrant
Certificate may be exchanged at the corporate trust office of
the Warrant Agent for Warrant Certificates representing the
same aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof
to any of the rights as a holder of the Warrant Securities,
including, without limitation, the right to receive dividends,
vote, receive notice of any meeting of stockholders or
otherwise have any right as a stockholder of the Company.
This Warrant Certificate shall not be valid or obligatory for
any purpose until countersigned by the Warrant Agent.
Dated as of , 19 .
Fleet Financial Group, Inc.
By __________________________
Attest:
_____________________________
Countersigned:
_____________________________
As Warrant Agent
By __________________________
Authorized Signature
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<PAGE> 25
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder may pay
[in cash or by certified bank check or by bank wire transfer] [by
bank wire transfer], in immediately available funds, the
Warrant Price in full for Warrants exercised to [insert name of
Warrant Agent] Corporate Trust Department, [insert address of
Warrant Agent], Attn: [or ], which
[payment] [wire transfer] must specify the name of the holder
and the number of Warrants exercised by such holder. In
addition, the holder must complete the information required
below and present this Warrant Certificate in person or by mail
(registered mail is recommended) to the Warrant Agent at the
addresses set forth below. This Warrant Certificate, completed
and duly executed, must be received by the Warrant Agent within
five business days of the [payment] [wire transfer].
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise
Warrants evidenced by this Warrant Certificate, to purchase
[Title of Warrant Securities] (the "Warrant
Securities") of Fleet Financial Group, Inc. and represents that
he has tendered payment for such Warrant Securities [in cash or
by certified check or official bank check or by bank wire
transfer, in each case] [by bank wire transfer], in immediately
available funds, to the order of Fleet Financial Group, Inc.,
c/o [insert name and address of Warrant Agent], in the amount of
$ in accordance with the terms hereof. The undersigned requests
that said principal amount of Warrant Securities be in fully registered
form in the authorized denominations, registered in such names and
delivered all as specified in accordance with the instructions
set forth below.
If the number of Warrants exercised is less than all of the
Warrant evidenced hereby, the undersigned requests that a new
Warrant Certificate representing the remaining Warrants
evidenced hereby be issued and delivered to the undersigned
unless otherwise specified in the instructions below.
Dated: Name ____________________________
(Please Print)
________________________________ Address _________________________
Social Security Number or Other _________________________
Identifying Number of Holder _________________________
Signature _______________________
<PAGE> 26
The Warrant evidenced hereby may be exercised at the
following addresses:
By hand at _____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
By mail at _____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
[Instructions as to form and delivery of Warrant
Securities and, if applicable, Warrant Certificates evidencing
unexercised Warrants-complete as appropriate.]
*Certificate for Delivery of Bearer Warrant Securities
FLEET FINANCIAL GROUP, INC.
Warrant Securities
TO: Fleet Financial Group. Inc.
c/o
as Trustee
This certificate is submitted in connection with our request
that you deliver to us Warrant Securities in bearer
form upon exercise of Warrants. We hereby certify that either
(a) none of such Warrant Securities will be held by or on
behalf of a United States Person or (b) if a United States
Person will have a beneficial interest in such Warrant
Securities, such person is described in Section 165(j)(3)(A),
(B) of (C) of the United States Internal Revenue Code of 1954,
as amended and the regulations thereunder. As used herein,
"United States Person" means a citizens or resident of the
United States, a corporation, partnership or other entity
created or organized in or resident under the laws or the
United States or any political subdivision thereof or an estate
or trust whose income from sources without the United States is
includible in gross income for Unites States Federal income tax
purpose regardless of its connection with the conduct of a
trade or business within the United States.
We understand that this certificate is required in connection
with certain tax legislation in the United States. If
administrative or legal proceedings are commenced or threatened
in connection with which this certificate is or would be
relevant we irrevocably authorize you to produce this
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<PAGE> 27
certificate or a copy thereof to any interested party in such
proceedings.
Dated: __________________________
(Please print name)
[If Registered Warrant]
Assignment
(Form of Assignment to be Executed if Holder Desires
to Transfer Warrants Evidenced Hereby)
For value received hereby sells, assigns and
transfers unto
___________________________________________________ _________________________
(Please print name and address of assignee, Social Security
including zip code) Number or other
identifying number
______________________________________________________________________________
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint Attorney, to transfer said Warrant
Certificate on the books of the Warrant Agent with full power of substitution in
the premises.
Dated: ______________________________________
Signature
(Signature must conform in all
respect to name of holder as
specified on the face of this
Warrant Certificate and must bear
a signature guarantee of a
commercial bank, trust company, or
member broker of the New York,
American, Midwest or Pacific Stock
Exchange.)
Signature Guaranteed:
_____________________________
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<PAGE> 1
EXHIBIT 4(K)
FLEET FINANCIAL GROUP, INC.
Form of Warrant Agreement [for warrants sold alone]*
THIS WARRANT AGREEMENT is dated as of between Fleet
Financial Group, Inc., a Rhode Island corporation (hereinafter called the
"Company" which term includes any successor corporation under the Indenture
hereinafter referred to) and , as Warrant
Agent (herein called the "Warrant Agent").
WHEREAS, the Company proposes to sell warrant certificates evidencing
one or more warrants (the "Warrants" or, individually a "Warrant") representing
the right to purchase [title of Equity Securities purchasable through exercise
of Warrants] (the "Warrant Securities"), such warrant certificates and other
warrant certificates issued pursuant to this Agreement being herein called the
"Warrant Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company in connection with the issuance, exchange, exercise and replacement of
the Warrant Certificates, and in this Agreement wishes to set forth among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced:
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained the parties hereto agree as follows:
________________________________
* Complete or modify the provisions of this Form as appropriate
to reflect the terms of the Warrants and Warrant Securities.
<PAGE> 2
ARTICLE I.
Issuance of Warrants and Execution and
Delivery of Warrant Certificates.
Section 1.01. Issuance of Warrants. Each Warrant Certificate shall
evidence one or more Warrants. Each Warrant evidenced thereby shall represent
the right, subject to the provisions contained herein and therein, to purchase
Warrant Securities.
Section 1.02. Execution and Delivery of Warrant Certificates. Each
Warrant Certificate, whenever issued, shall be in [bearer] [registered] form
substantially in the form set forth in Exhibit A hereto, shall be dated
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of the Company executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which the Warrants may be
listed, or to conform to usage. The Warrant Certificates shall be signed on
behalf of the Company by its Chairman of the Board, its President, one of its
Vice Presidents, its Treasurer or one of its Assistant Treasurers under its
corporate seal and attested by its Secretary or one of its Assistant
Secretaries. Such signatures may be manual or facsimile signatures of such
authorized officers and may be imprinted or otherwise reproduced on the Warrant
Certificates. The seal of the Company may be in the form of a facsimile
thereof and may be impressed, affixed, imprinted or otherwise reproduced on the
Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence that the Warrant Certificate so countersigned has been duly
issued hereunder.
In case any officer of the Company who shall have signed any of the
Warrant Certificates either manually or by facsimile signature shall cease to
be such officer before the Warrant Certificates so signed shall have been
countersigned and delivered by the Warrant Agent, such Warrant Certificates may
be countersigned and delivered notwithstanding that the person who signed such
Warrant Certificates ceased to be such persons
-2-
<PAGE> 3
as, at the actual date of the execution of such Warrant Certificate, shall be
the proper officers of the Company, although at the date of the execution
of this Agreement any such person was not such officer.
[If bearer Warrants -- The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean the bearer of such Warrant Certificate.]
[If registered Warrants -- The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean any person in whose name at the time any
Warrant Certificate shall be registered upon the books to be maintained by the
Warrant Agent for that purpose.]
SECTION 1.03. Issuance of Warrant Certificates. Warrant Certificates
evidencing the right to purchase Warrant Securities (except as provided in
Section 2.03(c), 3.02 and 4.01) may be executed by the Company and delivered to
the Warrant Agent upon the execution of this Warrant Agreement or from time to
time thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates
duly executed on behalf of the Company, countersign Warrant Certificates
evidencing Warrants representing the right to purchase up to Warrant
Securities and shall deliver such Warrant Certificates to or upon the order of
the Company. Subsequently to such original issuance of the Warrant
Certificates, the Warrant Agent shall countersign a Warrant Certificate only if
the Warrant Certificate is issued in exchange or substitution for one or more
previously countersigned Warrant Certificates [If registered Warrants -- or in
connection with their transfer], as hereinafter provided or as provided in
Section 2.03(c).
ARTICLE II.
Warrant Price, Duration and Exercise of Warrants.
SECTION 2.01. Warrant Price. On , 19 , the exercise price
of each Warrant is $ . During the period from , 19 , through
and including , 19 , the exercise price of each Warrant will be
$ . On , 19 , the exercise price of each Warrant will be $ . Such
purchase price of Warrant Securities is referred to in this Agreement as the
"Warrant Price." The Warrant Price and the numbers and kind of shares of
capital stock for which a Warrant may be exercised is subject to adjustment
from time to time as set forth in Article V hereof.
SECTION 2.02. Duration of Warrants. Each Warrant may be exercised in
whole at any time, as specified herein, on or after [the date thereof]
[ , 19 ,] and at or before 5 p.m. New York time on , 19 , (the
"Expiration
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<PAGE> 4
Date"). Each Warrant not exercised at or before 5 p.m. New York time on the
Expiration Date shall become void, and all rights of the holder of the
Warrant Certificate evidencing such Warrant under this Agreement shall cease.
Section 2.03. Exercise of Warrants. (a) During the period specified
in Section 2.02, any whole number of Warrants may be exercised by providing
certain information set forth on the reverse side of the Warrant Certificate
and by paying in full, [in lawful money of the United States of America] [in
cash or by certified check or official bank check or by bank wire transfer, in
each case] [by bank wire transfer] in immediately available funds, the Warrant
Price for each Warrant exercised, to the Warrant Agent at its corporate trust
office [or at ], provided that such exercise is subject to receipt within
five business days of such [payment] [wire transfer] by the Warrant Agent of the
Warrant Certificate with the form of election to purchase Warrant Securities
set forth on the reverse side of the Warrant Certificate properly completed and
duly executed. The date on which payment in full of the Warrant Price is
received by the Warrant Agent shall, subject to receipt of the Warrant
Certificate as aforesaid, be deemed to be the date on which the Warrant is
exercised. The Warrant Agent shall deposit all funds received by it in payment
of the Warrant Price in account of the Company maintained with it and shall
advise the Company by telephone at the end of each day on which a [payment]
[wire transfer] for the exercise of Warrants is received of the amount so
deposited to its account. The Warrant Agent shall promptly confirm such
telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company of (i) the number of Warrants exercised, (ii)
the instructions of each holder of the Warrant Certificates evidencing such
Warrants with respect to delivery of the Warrant Securities to which such
holder is entitled upon such exercise, (iii) delivery of Warrant Certificate
evidencing the balance, if any, of the Warrants remaining after such exercise,
and (iv) such other information as the Company shall reasonably require.
(c) As soon as practicable after the exercise of any Warrant, the
Company shall issue to or upon the order of the holder of the Warrant
Certificate evidencing such Warrant, the Warrant Securities to which such
holder is entitled in fully registered form, registered in such name or names
as may be directed by such holder. Such certificate or certificates evidencing
the Common Stock shall be deemed to have been issued and any persons who are
designated to be named therein shall be deemed to have become the holder of
record of such Warrant Securities as of the close of business on the exercise
date. No fractional shares of Warrant Securities will be issued upon
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<PAGE> 5
exercise of any Warrant. For each fractional share that would otherwise be
issued, the Company will pay by company check in an amount equal to such
fraction multiplied by the closing sales price of the Warrant Securities on the
New York Stock Exchange (or if not so listed, another equivalent means
reasonably determined by the Company) on the business day immediately preceding
the exercise date. If fewer than all of the Warrants evidenced by such Warrant
Certificate are exercised, the Company shall execute and an authorized officer
of the Warrant Agent shall manually countersign and deliver, a new Warrant
Certificate evidencing the numbers of such Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or other tax or
other governmental charge required to be paid in connection with any transfer
involved in the issue of the Warrant Securities and in the event that any such
transfer is involved, the Company shall not be required to issue or deliver any
Warrant Security until such tax or other charge shall have been paid or it has
been established to the Company's satisfaction that no such tax or other charge
is due.
ARTICLE III.
OTHER PROVISIONS RELATING TO RIGHTS OF
HOLDERS OF WARRANT CERTIFICATES.
Section 3.01. No Rights as Stockholder Conferred by Warrants or
Warrant Certificates. No Warrant Certificate or Warrant evidenced thereby
shall entitled the holder thereof to any of the rights of a holder of Warrant
Securities, including, without limitation the right to receive the payment of
principal of, premium, if any, or interest on Warrant Securities or to enforce
any of the covenants in the Indenture.
Section 3.02. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. Upon receipt by the Warrant Agent of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of any Warrant Certificate and of indemnity reasonably satisfactory
to it, and, in the case of mutilation, upon surrender thereof to the Warrant
Agent for cancellation, then, in the absence of notice to the Company or the
Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Company shall execute, and an authorized officer of the Warrant
Agent shall manually countersign and deliver, in exchange for or in lieu of the
lost, stolen, destroyed or mutilated Warrant Certificate, a new Warrant
Certificate of the same tenor and evidencing a like number of Warrants. Upon
the issuance of any new Warrant Certificate under this Section, the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other
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<PAGE> 6
expenses (including the fees and expenses of the Warrant Agent) in connection
therewith. Every substitute Warrant Certificate executed and delivered
pursuant to this Section in lieu of any lost, stolen or destroyed Warrant
Certificate shall represent an additional contractual obligation of the
Company, whether or not the lost, stolen or destroyed Warrant Certificate
shall be at any time enforceable by anyone, and shall be entitled to the
benefits of this Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder. The provisions of
this Section are exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement of mutilated, lost, stolen
or destroyed Warrant Certificates.
Section 3.03. Holder of Warrant Certificate May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any holder of a
Warrant Certificate, without the consent of the Warrant Agent, the holder of
any Warrant Securities or the holder of any other Warrant Certificate, may in
his own behalf and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company suitable to enforce or
otherwise in respect of his right to exercise the Warrants evidenced by his
Warrant Certificate in the manner provided in his Warrant Certificate and in
this Agreement.
ARTICLE IV.
EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES.
Section 4.01. Exchange and Transfer of Warrant Certificates. Upon
surrender at the corporate trust office of the Warrant Agent [or ],
Warrant Certificates evidencing Warrants may be exchanged for Warrant
Certificates in other denominations evidencing such Warrants [If registered
Warrants or the transfer thereof may be registered in whole or in part];
provided that such other Warrant Certificates evidence the same aggregate
number of Warrants as the Warrant Certificates so surrendered. [If registered
Warrants - The Warrant Agent shall keep at its corporate trust office
[and at ], books in which subject to such reasonable regulations as it
may prescribe, it shall register Warrant Certificates and exchanges and
transfers of outstanding Warrant Certificates, upon surrender of the Warrant
Certificates to the Warrant Agent as its corporate trust office [or ]
for exchange [or registration of transfer], properly endorsed or accompanied
by appropriate instruments of registration of transfer and written instructions
for transfer, all in form satisfactory to the Company and the Warrant Agent.]
No service charge shall be made for any exchange [or registration of transfer]
of Warrant Certificates but the Company may require payment of a sum sufficient
to cover any stamp or other tax or
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<PAGE> 7
other governmental charge that may be imposed in connection with any such
exchange [or registration of transfer]. Whenever any Warrant Certificates are
so surrendered for exchange [or registration of transfer] an authorized officer
of the Warrant Agent shall manually countersign and deliver to the person or
persons entitled thereto a Warrant Certificate or Warrant Certificates duly
authorized and executed by the Company, as so requested. The Warrant Agent
shall not be required to effect any exchange [or registration of transfer]
which will result in the issuance of a Warrant Certificate evidencing a
fraction of a Warrant or a number of full Warrants and a fraction of a Warrant.
All Warrant Certificates issued upon any exchange [or registration of transfer]
of Warrant Certificates shall be the valid obligations of the Company,
evidencing the same obligations, and entitled to the same benefits under this
Agreement, as the Warrant Certificates surrendered for such exchange [or
registration of transfer].
Section 4.02. Treatment of Holders of Warrant Certificates. [Bearer
warrants - Each Warrant Certificate shall be transferable by delivery and shall
be deemed negotiable and the bearer of each Warrant Certificate may be treated
by the Company, the Warrant Agent and all other persons dealing with such
bearer as the absolute owner thereof for any purpose and as the person entitled
to exercise the rights represented by the Warrants evidenced thereby, any
notice to the contrary notwithstanding.] [Registered Warrants - The Company
and the Warrant Agent may treat the registered holder as the absolute owner
thereof for any purpose and as the person entitled to exercise the rights
represented by the Warrants evidenced thereby any notice to the contrary
notwithstanding.]
Section 4.03. Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered for exchange [registration of transfer] or exercise of
the Warrants evidenced thereby shall, if surrendered to the Company, be
delivered to the Warrant Agent and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued and, except as expressly permitted by this Agreement,
no Warrant Certificate shall be issued hereunder in exchange or in lieu
thereof. The Warrant Agent shall deliver to the Company from time to time or
otherwise dispose of cancelled Warrant Certificates in a manner satisfactory to
the Company.
ARTICLE V
ADJUSTMENTS.
SECTION 5.01. ADJUSTMENT OF WARRANT PRICE. The Warrant Price shall be
subject to adjustment from time to time upon the happening of certain events as
hereinafter described.
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<PAGE> 8
5.01 MANDATORY ADJUSTMENTS. The Warrant Securities shall be subject
to adjustment as follows:
(a) If the Company shall (i) declare or pay a dividend on its
outstanding Warrant Securities in shares of Warrant Securities or make
a distribution to holders of its Warrant Securities in shares of
Warrant Securities, (ii) subdivide its outstanding shares of Warrant
Securities into a greater number of shares of Warrant Securities,
(iii) combine its outstanding shares of Warrant Securities into a
smaller number of shares of Warrant Securities, or (iv) issue by
reclassification of its shares of Warrant Securities other securities
of the Company, then the Warrant Securities in effect immediately
prior thereto shall be adjusted so that the holder of any Warrants
thereafter exercised shall be entitled to receive the number and kind
of shares of Warrant Securities or other securities that the holder
would have owned or been entitled to receive after the happening of
any of the events described above had such Warrants been exercised
immediately prior to the happening of such event or any record date
with respect thereto. An adjustment made pursuant to this paragraph
5.01(a) shall become effective on the date of the dividend payment,
subdivision, combination or issuance retroactive to the record date
with respect thereto, if any, for such event. Such adjustment shall be
made successively.
(b) If the Company shall issue to all holders of its Warrant
Securities rights, options, warrants or convertible or exchangeable
securities expiring within 60 days containing the right to subscribe
for or purchase shares of Warrant Securities at a price per share that
is lower than the then Quoted Price per share (as hereinafter defined)
of Warrant Securities, then the Warrant Securities shall be adjusted
in accordance with the following formula:
(N X P)
-----
AE = E x O + ( M )
-----------
O + N
where
AE = the adjusted Warrant Price.
E = the current Warrant Price.
O = the number of shares of Warrant Securities outstanding
on the record date.
N = the number of additional shares of Warrant Securities
offered.
P = the offering price per share of the additional shares.
M = the Quoted Price per share of Warrant Securities on the
record date.
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<PAGE> 9
The adjustment shall be made successively whenever any such rights, options,
warrants or convertible or exchangeable securities are issued and shall become
effective immediately after the record date for the determination of
shareholders entitled to receive the rights, options, warrants or convertible
or exchangeable securities. Upon the expiration of any such rights, options,
warrants or convertible or exchangeable securities, if any thereof shall not
have been exercised, the Warrant Price shall be increased by the amount of the
initial adjustment of the Warrant Price made pursuant to this Section 5.01(b)
in respect of such expired rights, options, warrants or convertible or
exchangeable securities. For the purposes of this Section 5.01, the "Quoted
Price" per share of Warrant Securities at any date shall be deemed to be the
average of the daily closing prices for the 20 consecutive trading days
commencing on the 30th trading day prior to the date in question. The closing
price for each day shall be (i) if the Warrant Securities are listed or
admitted to trading on a national securities exchange, the closing price on the
New York Stock Exchange Consolidated Tape (or any successor composite tape
reporting transactions on national securities exchanges) or, if such a
composite tape shall not be in use or shall not report transactions in the
Warrant Securities, the last reported sales price regular way on the principal
national securities exchange on which the Warrant Securities are listed or
admitted to trading (which shall be the national securities exchange on which
the greatest number of shares of Warrant Securities has been traded during such
20 consecutive trading days), or, if there is no transaction on any such day in
any such situation, the mean of the bid and asked prices on such day, or (ii)
if the Warrant Securities are not listed or admitted to trading on any such
exchange, the closing price, if reported, or, if the closing price is not
reported, the average of the closing bid and asked prices as reported by
NASDAQ, or (iii) if bid and asked prices for the Warrant Securities on each
such day shall not have been reported through NASDAQ, the average of the bid
and asked prices for such date as furnished by any three New York Stock
Exchange member firms regularly making a market in the Warrant Securities and
not affiliated with the Company selected for such purpose by the Board of
Directors of the Company, or (iv) if no such quotations are available, the fair
market value of the Warrant Securities as determined by a New York Stock
Exchange member firm regularly making a market in the Warrant Securities
selected for such purpose by such Board.
(c) If the Company shall distribute to all holders of its outstanding
Warrant Securities any shares of capital stock of the Company (other than
Warrant Securities) or evidences of indebtedness or assets (excluding ordinary
cash dividends, other cash distributions from current or retained earnings and
dividends or distributions referred to in Sections 5.01(a) and (b)) or rights
or warrants to subscribe for or purchase any of
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<PAGE> 10
its securities (excluding those referred to in Section 5.01(b) above) (any of
the foregoing being hereinafter in this Section 5.01(c) called the "Securities
or Assets"), then in each such case, unless the Company elects to reserve
shares or other units of such Securities or Assets for distribution to each
holder of a Warrant upon the exercise of the Warrants so that such holder will
receive upon such exercise, in addition to the shares of the Warrant
Securities to which such holder is entitled, the amount and kind of such
Securities or Assets which such holder would have received if such holder had,
immediately prior to the record date for the distribution of the Securities or
Assets, exercised the Warrants and received Warrant Securities, the Warrant
Price shall be adjusted so that the same shall equal the price determined by
multiplying the Warrant Price in effect immediately prior to the date of such
distribution by a fraction, the numerator of which shall be the Quoted Price
per share of the Warrant Securities on the record date mentioned below less the
then fair market value (as determined in good faith by the Board of Directors
of the Company), of the portion of the Securities or Assets so distributed or
of such rights or warrants applicable to one share of Warrant Securities, and
the denominator of which shall be the Quoted Price per share of the Warrant
Securities on such record date; PROVIDED, HOWEVER, that if the then fair market
value (as so determined) of the portion of the Securities or Assets so
distributed applicable to one Warrant Security equals or exceeds the Quoted
Price per Warrant Security on the record date mentioned above, in lieu of the
foregoing adjustment, adequate provision shall be made so that the holder of
the Warrants shall have the right to receive the amount and kind of Securities
and Assets such holder would have received had such holder exercised each such
Warrant immediately prior to the record date for the distribution of the
Securities or Assets. Such adjustment shall become effective immediately after
the record date for the determination of shareholders entitled to receive such
distribution.
(d) No adjustment in the Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least 1% of such price.
All calculations under this Section 5.01 shall be made to the nearest
one-hundredth of a cent or to the nearest one-hundredth of a share, as the case
may be.
(e) If the Company shall be a party to any transaction, including
without limitation a merger, consolidation, sale of all or substantially all of
the Corporation's assets, liquidation or recapitalization of the Warrant
Securities (each of the foregoing being referred to as a "Transaction"), in
each case [Insert for Common Stock: (except in the case of a Warrant
Securities Fundamental Change (as hereinafter defined))] as a result of which
shares of Warrant Securities shall be converted into the right to receive
stock, securities
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<PAGE> 11
or other property (including cash or any combination thereof), each Warrant
shall thereafter be exercisable into the kind and amount of shares of stock and
other securities and property receivable (including cash) upon the consummation
of such Transaction by a holder of that number of shares of Warrant Securities
issuable upon the exercise of one Warrant immediately prior to such
Transaction. The Company shall not be a party to any Transaction unless the
terms of such Transaction are consistent with the provisions of this Section
5.01(e) and it shall not consent or agree to the occurrence of any Transaction
until the Company has entered into an agreement with the successor or
purchasing entity, as the case may be, for the benefit of the holders of the
Warrants, which shall contain provisions enabling the holders of the Warrants
to exercise such Warrants for the consideration received by holders of Warrant
Securities at the Warrant Price immediately after such Transaction. The
provisions of this Section 5.01(e) shall similarly apply to successive
Transactions.
[Insert for Common Stock: (f) In the event of a common stock
Fundamental Change, each Warrant shall be exercisable into Common Stock of the
kind received by holders of Common Stock as the result of such Common Stock
Fundamental Change. The Warrant Price immediately following such Common Stock
Fundamental Change shall be the Warrant Price in effect immediately prior to
such Common Stock Fundamental Change multiplied by a fraction, the numerator of
which is the Purchaser Stock Price (as hereinafter defined) and the denominator
of which is the Applicable Price (as hereinafter defined). The Company shall
not consent or agree to the occurrence of any Common Stock Fundamental Change
until the Company has entered into an agreement with the successor or
purchasing entity, as the case may be, for the benefit of the holders of the
Warrants which shall contain provisions enabling the holders of the Warrants to
exercise such Warrants for the consideration received by holders of Common
Stock at the Warrant Price immediately after such Common Stock Fundamental
Change. The provisions of this Section 5.01(f) shall similarly apply to
successive Common Stock Fundamental Changes.
(g) As used herein:
(i) The term "Applicable Price" means the Quoted Price for one
share of the Common Stock on the record date for the determination of
the holders of Common Stock entitled to receive Common Stock in
connection with such Common Stock Fundamental Change, or, if there is
no such record date, on the date upon which the holders of Common
Stock shall have the right to receive such Common Stock.
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<PAGE> 12
(ii) The term "Common Stock Fundamental Change" shall mean the
occurrence of any transaction or event in connection with which all or
substantially all the Common Stock shall be exchanged for, converted
into, acquired for or shall constitute solely the right to receive
Common Stock that, for the ten consecutive trading days immediately
prior to such Common Stock Fundamental Change, has been admitted for
listing on a national securities exchange or quoted on the National
Market System of NASDAQ (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise).
(iii) The term "Purchaser Stock Price" shall mean, with respect
to any Common Stock Fundamental Change, the Quoted Price for one share
of the Common Stock received by holders of Common Stock in such Common
Stock Fundamental Change (determined as if the definition of Quoted
Price contained in this Agreement were applicable to such Common
Stock) on the record date for the determination of the holders of
Common Stock entitled to receive such common stock or, if there is no
such record date, on the date upon which the holders of Common Stock
shall have the right to receive such Common Stock.]
(h) For the purposes of this Section 5.01, the term "shares of Warrant
Securities" shall mean (i) the class of stock designated as the Warrant
Securities of the Company at the date hereof or (ii) any other class of stock
resulting from successive changes or reclassifications of such shares
consisting solely of changes in par value, or from no par value to par value.
If at any time, as a result of an adjustment made pursuant to Sections 5.01(a),
(c), (e) or (f) the Holder shall become entitled to receive any securities
other than shares of Warrant Securities, thereafter the number of such other
securities so issuable upon the exercise of the Warrants shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the rights contained in this
Section 5.01.
(i) Notwithstanding the foregoing, in any case which this Section 5.01
provides that an adjustment shall become effective immediately after a record
date for an event, the Company may defer until the occurrence of such event (i)
issuing to the holder of any Warrant exercised after such record date and
before the occurrence of such event the additional shares of Warrant Securities
issuable upon such conversion before giving effect to such adjustment and (ii)
paying to such holder any amount in cash by company check in lieu of any
fraction pursuant to Section 2.03.
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<PAGE> 13
(j) If the Company shall take any action affecting the Warrant
Securities, other than action described in this Section 5.01, which in the
opinion of the Board of Directors of the Company would materially adversely
affect the exercise rights of the holders of the Warrants, the Warrant Price
for the Warrants may be adjusted, to the extent permitted by law, in such
manner, if any, and at such time, as such Board may determine in good faith to
be equitable in the circumstances. Failure of the Board of Directors of the
Company to provide for any such adjustment prior to the effective date of any
such action by the Company affecting the Warrant Securities shall be evidence
that the Board of Directors of the Company has determined that it is equitable
to make no adjustments in the circumstances.
SECTION 5.02. VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may at
its option, at any time during the term of the Warrants, reduce the then
current Warrant Price to any amount deemed appropriate by the Board of
Directors of the Company; PROVIDED, THAT, if the Company elects so to reduce
the then current Warrant Price, such reduction shall remain in effect for at
least 20 Business Days, after which time the Company may, at its option,
reinstate the Warrant Price in effect prior to such reduction.
SECTION 5.03. NOTICE OF ADJUSTMENT. Whenever the Warrant Price is
adjusted as herein provided, the Chief Financial Officer of the Company shall
compute the adjusted Warrant Price in accordance with the foregoing provisions
and shall prepare a certificate setting forth such adjusted Warrant Price and
showing in reasonable detail the facts upon which such adjustment is based. A
copy of such certificate shall be filed promptly with the Warrant Agent.
Promptly after delivery of such certificate, the Company shall prepare a notice
of such adjustment of the Warrant Price setting forth the adjusted Warrant
Price and the date on which such adjustment becomes effective and shall mail,
or cause the Warrant Agent to mail at the Company's expense, such notice of
such adjustment of the Warrant Price to each holder of a Warrant at his last
address as shown on the Warrants Register.
SECTION 5.04. NO ADJUSTMENT FOR DIVIDENDS. Except as provided in
Section 5.01 hereof, no adjustment in respect of any dividends or other
payments or distributions made to holders of securities issuable upon exercise
of Warrants shall be made during the term of a Warrant or upon the exercise of
a Warrant.
SECTION 5.05. STATEMENT ON WARRANTS CERTIFICATE. Irrespective of any
adjustments in the number or kind of securities purchasable upon the exercise
of the Warrants or the Warrant Securities, any Warrant Certificate theretofore
or
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<PAGE> 14
thereafter issued may continue to express the same price and number and kind
of shares as are stated in the Warrant Certificate initially issuable pursuant
to this Agreement.
SECTION 5.06. WARRANT AGENT'S ADJUSTMENT DISCLAIMER. The Warrant Agent
has no duty to determine when an adjustment under this Article V should be
made, how it should be made or what it should be. The Warrant Agent shall not
be accountable for and makes no representation as to the validity or value of
any securities or assets issued upon exercise of Warrants. The Warrant Agent
shall not be responsible for the Company's failure to comply with this Article
V.
ARTICLE VI.
Concerning the Warrant Agent
Section 6.01. Warrant Agent. The Company hereby appoints , as
Warrant Agent of the Company in respect of the Warrants and the Warrant
Certificates upon the terms and subject to the conditions herein set forth; and
hereby accepts such appointment. The Warrant Agent shall have the powers
and authority granted to and conferred upon it in the Warrant Certificates and
hereby and such further powers and authority to act on behalf of the Company as
the Company may hereafter grant to or confer upon it. All of the terms and
provisions with respect to such powers and authority contained in the Warrant
Certificates are subject to and governed by the terms and provisions hereof.
Section 6.02. Conditions of Warrant Agent's Obligations. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following, to all of which the Company agrees and to all
of which the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:
(a) The Company agrees promptly to pay the Warrant Agent the
compensation to be agreed upon with the Company for all services
rendered by the Warrant Agent and to reimburse the Warrant Agent for
reasonable out-of-pocket expenses (including counsel fees) incurred by
the Warrant Agent in connection with the services rendered hereunder
by the Warrant Agent. The Company also agrees to indemnify the
Warrant Agent for and to hold it harmless against any loss liability
or expense incurred without negligence or bad faith on the part of the
Warrant Agent, arising out of or in connection with its acting as
Warrant Agent hereunder, as well as the costs and expenses of
defending against any claim of such liability.
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<PAGE> 15
(b) In acting under this Warrant Agreement and in connection
with the Warrant Certificates, the Warrant Agent is acting solely as
agent of the Company and does not assume any obligation or
relationship of agency or trust for or with any of the holders of
Warrant Certificates or beneficial owners of Warrants.
(c) The Warrant Agent may consult with counsel satisfactory to
it, and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with the
advice of such counsel.
(d) The Warrant Agent shall be protected and shall incur no
liability for or in respect of any action taken or thing suffered by
it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, statement or other paper or document
reasonably believed by it to be genuine and to have been presented or
signed by the proper parties.
(e) The Warrant Agent, and its officers, directors and
employees, may become the owner of or acquire any interest in
Warrants, with the same rights that it or they would have if it were
not the Warrant Agent hereunder, and, to the extent permitted by
applicable law, it or they may engage or be interested in any
financial or other transaction with the Company and may act on or as
depositary, trustee or agent for any committee or body of holders of
Warrant Securities or other obligations of the Company as freely as if
it were not the Warrant Agent hereunder.
(f) The Warrant Agent shall have no liability for interest on
any monies at any time received by it pursuant to any of the
provisions of this Agreement or of the Warrant Certificates.
(g) The Warrant Agent shall have no liability with respect to
any invalidity of this Agreement or any of the Warrant Certificates.
(h) The Warrant Agent shall not be responsible for any of the
recitals or representations herein or in the Warrant Certificates
(except as to the Warrant Agent's countersignature thereon), all of
which are made solely by the Company.
-15-
<PAGE> 16
(i) The Warrant Agent shall be obligated to perform only such
duties as are herein and in the Warrant Certificates specifically set
forth and no implied duties or obligations shall be read into this
Agreement or the Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be under obligation to take any action
hereunder which may tend to involve it is any expense or liability,
the payment of which within a reasonable time is not in its reasonable
opinions assured to it. The Warrant Agent shall not be accountable or
under any duty or responsibility for the use by the Company of any of
the Warrant Certificates authenticated by the Warrant Agent and
delivered by it to the Company pursuant to this Agreement or for the
application by the Company of the proceeds of the Warrant
Certificates. The Warrant Agent shall have no duty or responsibility
in case of any default by the Company in the performance of its
covenants or agreements contained herein or in the Warrant
Certificates or in the case of the receipt of any written demand from
a holder of a Warrant Certificate with respect to such default,
including without limiting the generality of the foregoing, any duty
or responsibility to initiate or attempt to initiate any proceedings
at law or otherwise or except as provided in Section 6.02, to make any
demand upon the Company.
(j) The Warrant Agent is hereby authorized to obtain from time
to time from the present transfer agent for the Warrant Securities (the
"Transfer Agent"), and any successor Transfer Agent, stock certificates
required to honor outstanding Warrants. The Company hereby authorizes
its present and any successor Transfer Agent to comply with all such
requests. The Company will supply such Transfer Agent with duly
executed stock certificates for such purpose and will provide or
otherwise make available any cash which may be payable as provided in
Section 2.03 hereof, and the Warrant Agent shall not be responsible for
any delay or failure by such Transfer Agent in supplying such stock
certificates.
Section 6.03. Resignation and Appointment of Successor. (a) The
Company agrees, for the benefit of the holders of the Warrant Certificates, that
there shall at all times be a Warrant Agent hereunder until all the Warrant
Certificates are no longer exercisable.
-16-
<PAGE> 17
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part, specifying the date
on which its desired resignation shall become effective provided that such date
shall not be less than three months after the date on which such notice is given
unless the Company otherwise agrees. The Warrant Agent hereunder may be removed
at any time by the filing with it of an instrument in writing signed by or on
behalf of the Company and specifying such removal and the date when it shall
become effective. Such resignation or removal shall take effect upon the
appointment by the Company, as hereinafter provided, of a successor Warrant
Agent (which shall be a bank or trust company authorized under the laws of the
jurisdiction of its organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent. The obligation
of the Company under Section 6.02(a) shall continue to the extent set forth
therein notwithstanding the resignation or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or shall be
removed, or shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or shall file a petition seeking relief under the Federal Bankruptcy
Code, as now constituted or hereafter amended, or under any other applicable
Federal or State bankruptcy law or similar law or make an assignment for the
benefit of its creditors or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if a receiver
or custodian of it or of all or any substantial part of its property shall be
appointed, or if an order of any court shall be entered for relief against it
under the provisions of the Federal Bankruptcy Code, as now constituted or
hereafter amended, or under any other applicable Federal or State bankruptcy or
similar law, or if any public officer shall have taken charge or control of the
Warrant Agent or of its property or affairs, for the purpose of rehabilitation,
conservation or liquidation, a successor Warrant Agent qualified as aforesaid
shall be appointed by the Company, by an instrument in writing. filed with the
successor Warrant Agent. Upon the appointment as aforesaid of a successor
Warrant Agent and acceptance by the successor Warrant Agent of such appointment
the Warrant Agent shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and
-17-
<PAGE> 18
obligations of such predecessor with like effect as if originally named as
Warrant Agent hereunder, and such predecessor, upon payment of its charges and
disbursements then unpaid shall thereupon become obligated to transfer, deliver
and pay over, and such successor Warrant Agent shall be entitled to receive all
monies, securities and other property on deposit with or held by such
predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be
merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially
all the assets and business of the Warrant Agent, provided that it shall be
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VII.
Miscellaneous
Section 7.01. Amendment. This Agreement may be amended by the parties
hereto, without the consent of the holder of any Warrant Certificate for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement as the Company and
the Warrant Agent may deem necessary or desirable; provided, that such action
shall not adversely affect the interests of the holders of the Warrant
Certificates.
Section 7.02. Notices and Demands to the Company and Warrant Agent. If
the Warrant Agent shall receive any notice or demand addressed to the Company by
the holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.
Section 7.03. Addresses. Any communication from the Company to the
Warrant Agent with respect to this Agreement shall be addressed to ,
Attention:
and any communication from the Warrant Agent to the Company with respect
to this Agreement shall be addressed to Fleet Financial Group, Inc., 50 Kennedy
Plaza, Providence, Rhode
-18-
<PAGE> 19
Island 02903, Attention: (or such other address as shall be
specified in writing by the Warrant Agent or by the Company).
Section 7.04. Applicable Law. The validity, interpretation and
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by and
construed in accordance with, the laws of the State of New York.
Section 7.05. Delivery of Prospectus. The Company will furnish to the
Warrant Agent sufficient copies of a prospectus relating to the Warrant
Securities deliverable upon exercise of Warrants (the "Prospectus"), and the
Warrant Agent agrees that upon the exercise of any Warrant, the Warrant Agent
will deliver to the holder of the Warrant Certificate evidencing such Warrant,
prior to or concurrently with, the delivery of the Warrant Securities issued
upon such exercise, a Prospectus.
Section 7.06. Obtaining of Governmental Approvals. The Company will
from time to time take all action which may be necessary to obtain and keep
effective any and all permits, consents and approvals of governmental agencies
and authorities and securities acts filings under United States Federal and
State laws (including, without limitation, a registration statement in respect
of the Warrants and Warrant Securities under the Securities Act of 1933), which
may be or become requisite in connection with the issuance, sale, transfer, and
delivery of the Warrant Certificates, the exercise of the Warrants, the
issuance, sale, transfer, and delivery of the Warrant Securities issued upon
exercise of the Warrants or upon the expiration of the period during which the
Warrants are exercisable.
Section 7.07. Persons Having Rights under Warrant Agreement. Nothing in
this Agreement shall give to any person other than the Company, the Warrant
Agent and the holders of the Warrant Certificates any right, remedy or claim
under or by reason of this Agreement.
Section 7.08. Headings. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
Section 7.09. Counterparts. This Agreement may be executed in any
number of counterparts, each of which as so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
-19-
<PAGE> 20
Section 7.10. Inspection of Agreement. A copy of this Agreement shall
be available at all reasonable times at the principal corporate trust office of
the Warrant Agent for inspection by the holder of any Warrant Certificate. The
Warrant Agent may require such holder to submit his Warrant Certificates for
inspection by it.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be affixed hereunto, and
the same to be attested, all as of the day and year first above written.
FLEET FINANCIAL GROUP, INC.
By ___________________________
Attest:
_________________________ [Name of Warrant Agent],
as Warrant Agent
Attest: By ___________________________
_________________________
-20-
<PAGE> 21
Exhibit A
(FORM OF WARRANT CERTIFICATE)
[Face of Warrant Certificate]
Exercisable Only if Countersigned by the
Warrant
Agent as Provided Herein
FLEET FINANCIAL GROUP, INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
Void After 5:00 P.M. New York Time on , 19
[No.] Warrants
This certifies that [the bearer is the ] [ or registered
assigns is the registered] owner of the above indicated number of Warrants,
each Warrant entitling such [bearer] [owner] to purchase, at any time [after 5
p.m. New York time on , 19 , and] on or before 5 p.m. New York time
on , 19 , [Title of Warrant Securities] (the "Warrant
Securities"), of Fleet Financial Group, Inc. (the "Company"), issued and to be
issued on the following basis: [on , 19 , the exercise price of
each Warrant will be $ ; during the period from , 19 ,
through and including , 19 , the exercise price of each Warrant
will be $ . The holder may exercise the Warrants evidenced hereby by
providing certain information set forth on the back hereof and by paying in
full, [in lawful money of the United States of America] [in cash or by
certified check or official bank check or by bank wire transfer, in each case]
[by bank wire transfer], in immediately available funds, the Warrant Price of
each Warrant exercised to the Warrant Agent (as hereinafter defined) and by
surrendering this Warrant Certificate, with the purchase form on the back
hereof duly executed, at the corporate trust office of [name of Warrant Agent],
or its successors as warrant agent (the "Warrant Agent"), [or ]
currently at the address specified on the reverse hereof, and upon compliance
with and subject to the conditions set forth herein and in the Warrant
Agreement (as hereinafter defined).
Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase Warrant Securities in registered form. Upon any
exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the holder hereof a new Warrant
Certificate
<PAGE> 22
evidencing the number of Warrants remaining unexercised.
The Company will not be required to issue fractional shares of Warrant
Securities upon exercise of the Warrants or distribute stock certificates that
evidence fractional shares of Warrant Securities. In lieu of fractional shares
of Warrant Securities, there shall be paid by the Company to the registered
holder of this Warrant Certificate at the time such Warrant Certificate is
exercised an amount in cash payable by company check equal to the closing sales
price of the Warrant Securities on the New York Stock Exchange (or if not so
listed, another equivalent means reasonably determined by the Company) on the
business day immediately preceding the exercise date, multiplied by such
fraction.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of , 19 , (the "Warrant Agreement")
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the holder of this Warrant Certificate consents by acceptance
hereof. Copies of the Warrant Agreement and the form of Warrant Securities are
on file at the above-mentioned office of the Warrant Agent [and at ].
[Bearer Warrants -- This Warrant Certificate, and all rights hereunder,
may be transferred by delivery and the Company and the Warrant Agent may treat
the bearer hereof as the owner for all purposes.]
[Registered Warrants -- This Warrant Certificate may be transferred when
surrendered at the corporate trust office of the Warrant Agent [or ]
by the registered owner or his appointed person or by an attorney duly
authorized in writing, in the manner and subject to the terms provided in the
Warrant Agreement.]
After countersignature by the Warrant Agent and prior to the expiration
of this Warrant Certificate, this Warrant Certificate may be exchanged at the
corporate trust office of the Warrant Agent for Warrant Certificates
representing the same aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof to any of
the rights of a holder of Warrant Securities, including, without limitation, the
right to receive dividends, vote, receive notice of any meeting of stockholders
or otherwise have any right as a stockholder of the Company.
-2-
<PAGE> 23
This Warrant Certificate shall not be valid for any purpose until
countersigned by the Warrant Agent.
Dated as of , 19 .
FLEET FINANCIAL GROUP, INC.
By _____________________________
Attest:
_________________________________
Countersigned
_________________________________
As Warrant Agent
By ______________________________
Authorized Signature
-3-
<PAGE> 24
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must pay [in cash
or by certified check or official bank check or by bank wire transfer] [by bank
wire transfer], in immediately available funds, the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent] Corporate Trust Department
[insert address of Warrant Agent], Attn: [or ],
which [payment] [wire transfer] must specify the name of the holder and the
number of Warrants exercised by such holder. In addition, the holder must
complete the information required below and present this Warrant Certificate in
person or by mail (registered mail is recommended) to the Warrant Agent at the
addresses set forth below. This Warrant Certificate, completed and duly
executed, must be received by the Warrant Agent within five business days of the
[payment] [wire transfer].
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise Warrants
evidenced by this Warrant Certificate, to purchase [Title of Warrant
Securities] (the "Warrant Securities") of Fleet Financial Group, Inc. and
represents that he has tendered payment for such Warrant Securities [in cash or
by certified check or official bank check or by bank wire transfer, in each
case] [by bank wire transfer], in immediately available funds, to the order of
Fleet Financial Group, Inc., c/o [insert name and address of Warrant Agent], in
the amount of $ in accordance with the terms hereof. The undersigned
requests that said principal amount of Warrant Securities be in fully
registered form and in the authorized denominations, registered in such names
and delivered, all as specified in accordance with the instructions set forth
below.
If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instructions below.
Dated: Name __________________________
(Please Print)
___________________________________ Address _______________________
Social Security Number or _______________________
Other Identifying Number of _______________________
Holder
Signature _____________________
<PAGE> 25
The Warrants evidenced hereby may be exercised at the following
addresses:
By hand at ____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
By mail at ____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
[Instructions as to form and delivery of Warrant Securities and, if
applicable, Warrant Certificates evidencing unexercised Warrants -- complete as
appropriate.]
*Certificate for Delivery of Bearer Warrant Securities
FLEET FINANCIAL GROUP, INC.
Warrant Securities
TO: Fleet Financial Group. Inc.
c/o
as Trustee
This certificate is submitted in connection with our request
that you deliver to us Warrant Securities in bearer
form upon exercise of Warrants. We hereby certify that either
(a) none of such Warrant Securities will be held by or on
behalf of a United States Person or (b) if a United States
Person will have a beneficial interest in such Warrant
Securities, such person is described in Section 165(j)(3)(A),
(B) of (C) of the United States Internal Revenue Code of 1954,
as amended and the regulations thereunder. As used herein,
"United States Person" means a citizens or resident of the
United States, a corporation, partnership or other entity
created or organized in or resident under the laws or the
United States or any political subdivision thereof or an estate
or trust whose income from sources without the United States is
includible in gross income for Unites States Federal income tax
purpose regardless of its connection with the conduct of a
trade or business within the United States.
We understand that this certificate is required in connection
with certain tax legislation in the United States. If
administrative or legal proceedings are commenced or threatened
in connection with which this certificate is or would be
relevant we irrevocably authorize you to produce this
certificate or a copy thereof to any interested party in such
proceedings.
Dated: __________________________
(Please print name)
-2-
<PAGE> 26
[If Registered Warrant]
Assignment
(Form of Assignment to be Executed if Holder Desires
to Transfer Warrants Evidenced Hereby)
For value received hereby sells, assigns and
transfers unto
___________________________________________________ _________________________
(Please print name and address of assignee, Social Security
including zip code) Number or other
identifying number
______________________________________________________________________________
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint Attorney, to transfer said Warrant
Certificate on the books of the Warrant Agent with full power of substitution in
the premises.
Dated: ______________________________________
Signature
(Signature must conform in all
respect to name of holder as
specified on the face of this
Warrant Certificate and must bear
a signature guarantee of a
commercial bank, trust company, or
member broker of the New York,
American, Midwest or Pacific Stock
Exchange.)
Signature Guaranteed:
_____________________________
-3-
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Fleet Financial Group, Inc.:
We consent to the use of our report incorporated by reference in the Fleet
Financial Group, Inc. Annual Report on Form 10-K for the year ended December 31,
1993 which is incorporated by reference herein and to the reference to our Firm
under the heading "Experts" in the prospectus.
/S/ KPMG PEAT MARWICK LLP
Providence, Rhode Island
October 27, 1994
<PAGE> 1
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2) _____
___________________________
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
_________________
FLEET FINANCIAL GROUP, INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
RHODE ISLAND 05-0341324
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
50 KENNEDY PLAZA 02903
PROVIDENCE, RHODE ISLAND (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Senior and Subordinated Debt Securities
(Title of Indenture Securities)
<PAGE> 2
Item 1. GENERAL INFORMATION. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C., The Board of Governors of the Federal
Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. AFFILIATIONS WITH THE OBLIGOR. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. LIST OF EXHIBITS. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise corporate
trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority.
8. Not applicable.
9. Not applicable.
-2-
<PAGE> 3
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, The First National Bank of Chicago, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this Statement of Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Chicago and State of
Illinois, on the 25th day of October, 1994.
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee,
By: /s/John R. Prendiville
------------------------------
John R. Prendiville
Vice President
__________________________
* Exhibits 1, 2, 3, and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26(b) to the Registration Statement on
Form S-3 of Dow Capital B.V. and The Dow Chemical Company, filed with the
Securities and Exchange Commission on June 3, 1991
(Registration No. 33-36314).
-3-
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
October 25, 1994
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Fleet
Financial Group, Inc. and The First National Bank of Chicago, the undersigned,
in accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/John R. Prendiville
------------------------------
John R. Prendiville
Vice President
-4-
<PAGE> 5
EXHIBIT 7
---------
A copy of the latest report of conditions of the trustee published
pursuant to law or the requirements of its supervising or examining authority.
<PAGE> 6
<TABLE>
EXHIBIT 7 TO EXHIBIT 25
Legal Title of Bank: The First National Bank of Chicago Call Date: 6/30/94 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1994
All schedules are to reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding on the last business day of the
quarter.
SCHEDULE RC-BALANCE SHEET
<CAPTION>
DOLLAR AMOUNTS IN C400 <-
THOUSANDS RCFD BIL MIL THOU ----
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository
institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1)......... 0081 2,999,432 1.a.
b. Interest-bearing balances (2) ................................ 7,408,337 1.b.
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A) ... 1754 114,178 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D).. 1773 354,495 2.b.
3. Federal funds sold and securities purchased under agreements
to resell in domestic offices of the bank and its Edge and
Agreement subsidiaries, and in IBFs:
a. Federal Funds sold ........................................... 0276 3,997,507 3.a.
b. Securities purchased under agreements to resell............... 0277 756,008 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income
(from Schedule RC-C).......................................... RCFD 2122 14,441,302 4.a.
b. LESS: Allowance for loan and lease losses..................... RCFD 3123 336,826 4.b.
c. LESS: Allocated transfer risk reserve......................... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c).......................... 2125 14,104,476 4.d.
5. Assets held in trading accounts.................................. 3545 9,635,521 5.
6. Premises and fixed assets (including capitalized leases)......... 2145 489,446 6.
7. Other real estate owned (from Schedule RC-M)..................... 2150 59,331 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)................................... 2130 6,886 8.
9. Customers' liability to this bank on acceptances outstanding..... 2155 445,848 9.
10. Intangible assets (from Schedule RC-M)........................... 2143 131,253 10.
11. Other assets (from Schedule RC-F)................................ 2160 1,283,273 11.
12. Total assets (sum of items 1 through 11)........................ 2170 41,785,991 12.
<FN>
______
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
</TABLE>
6
<PAGE> 7
<TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 6/30/94 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
SCHEDULE RC-CONTINUED
<CAPTION>
DOLLAR AMOUNTS IN C400 <-
THOUSANDS RCFD BIL MIL THOU ----
----------------- ---- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns
A and C from Schedule RC-E, part 1)............... RCON 2200 14,100,202 13.a.
(1) Noninterest-bearing(1).......................... RCON 6631 5,795,942 13.a.(1)
(2) Interest bearing................................ RCON 6636 8,304,260 13.a.(2)
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs (from Schedule RC-E,
part II).......................................... RCFN 2200 9,752,314 13.b.
(1) Noninterest-bearing(1).......................... RCFN 6631 459,474 13.b.(1)
(2) Interest bearing................................ RCFN 6636 9,292,840 13.b.(2)
14. Federal funds purchased and securities sold
under agreements to repurchase in domestic
offices of the bank and of its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal funds purchased.......................... RCFD 0278 2,766,451 14.a.
b. Securities sold under agreements to repurchase... RCFD 0279 355,648 14.b.
15. a. Demand notes issued to the U.S. Treasury......... RCON 2840 101,744 15.a.
b. Trading Liabilities.............................. RCFD 3548 6,864,567 15.b.
16. Other borrowed money:
a. With original maturity of one year or less....... RCFD 2332 1,955,477 16.a.
b. With original maturity of more than one year..... RCFD 2333 488,023 16.b.
17. Mortgage indebtedness and Obligations under
capitalized leases.................................. RCFD 2910 273,578 17.
18. Bank's liability on acceptance executed and
outstanding......................................... RCFD 2920 445,848 18.
19. Subordinated notes and debentures................... RCFD 3200 1,175,000 19.
20. Other liabilities (from Schedule RC-G).............. RCFD 2930 765,341 20.
21. Total liabilities (sum of items 13 through 20)...... RCFD 2948 39,044,193 21.
22. Limited-Life preferred stock and related surplus.... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus....... RCFD 3838 0 23.
24. Common stock........................................ RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to
preferred stock).................................... RCFD 3839 2,254,940 25.
26. a. Undivided profits and capital reserves........... RCFD 3632 287,009 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities.................... RCFD 8434 (38) 26.b.
27. Cumulative foreign currency translation adjustments. RCFD 3284 (971) 27.
28. Total equity capital (sum of items 23 through 27)... RCFD 3210 2,741,798 28.
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21, 22 and 28)..... RCFD 3300 41,785,991 29.
<FN>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external Number
auditors as of any date during 1993 | RCFD 6724 N/A | M.1.
</TABLE>
1 = Independent audit of the bank 4 = Directors' examination of the
conducted in accordance with bank performed by other external
generally accepted auditing auditors (may be required by state
standards by a certified public chartering authority)
accounting firm which submits a
report on the bank 5 = Review of the bank's financial
statements by external auditors
2 = Independent audit of the bank's
parent holding company conducted 6 = Compilation of the bank's
in accordance with generally financial statements by external
accepted auditing standards by a auditors
certified public accounting firm
which submits a report on the 7 = Other audit procedures (excluding
consolidated holding company (but tax preparation work)
not on the bank separately)
8 = No external audit work
3 = Director's examination of the
bank conducted in accordance with
generally accepted auditing
standards by a certified public
accounting firm (may be required
by state chartering authority)
___________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
7
