<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 24, 1996
REGISTRATION NO. 333-16001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
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FLEET FINANCIAL GROUP, INC. RHODE ISLAND 05-0341324 6711
FLEET CAPITAL TRUST I DELAWARE 04-3337370 6749
(Exact name of issuer as (State or other jurisdiction (I.R.S. Employer (Primary Standard
specified in its charter) of Identification No.) Industrial
incorporation or Classification Number)
organization)
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ONE FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
(617) 292-2000
(Address, including zip code, and telephone number, including area code, of
principal executive offices)
WILLIAM C. MUTTERPERL, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
FLEET FINANCIAL GROUP, INC.
ONE FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
(617) 292-2000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------------
Copies to:
Laura N. Wilkinson, Esq. Vincent J. Pisano, Esq.
EDWARDS & ANGELL SKADDEN, ARPS, SLATE,
One Hospital Trust Plaza MEAGHER & FLOM LLP
Providence, Rhode Island 02903 919 Third Avenue
(401) 274-9200 New York, NY 10022
(212) 735-3000
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE AND ALL OTHER
CONDITIONS TO THE EXCHANGE OFFER (THE "OFFER") DESCRIBED IN THE ENCLOSED
PROSPECTUS HAVE BEEN SATISFIED OR WAIVED.
--------------------------
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: / /
--------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
[LOGO]
PROSPECTUS
FLEET FINANCIAL GROUP, INC.
FLEET CAPITAL TRUST I
OFFER TO EXCHANGE
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Fleet Capital Trust I
8.00% Trust Originated Preferred
Securities-SM- 11,000,000
("TOPrS-SM- ") Depositary Shares
(Liquidation Amount $25.00 for each representing a 1/10
per Preferred Security interest in a share of Series V
and guaranteed to the extent set forth 7.25% Perpetual Preferred Stock
herein by Fleet Financial Group, Inc.) CUSIP 338915 79 6
</TABLE>
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, JANUARY 30, 1997, UNLESS THE OFFER IS EXTENDED.
Fleet Financial Group, Inc., a Rhode Island corporation ("Fleet"), and Fleet
Capital Trust I, a Delaware statutory business trust (the "Trust"), hereby
offer, upon the terms and subject to the conditions set forth in this Prospectus
and the accompanying Letters of Transmittal, to exchange 8.00% Trust Originated
Preferred Securities-SM-, representing preferred undivided beneficial interests
in the assets of the Trust (the "Preferred Securities"), for any and all of
Fleet's depositary shares ("Depositary Shares"), each representing a 1/10
interest in a share of Series V 7.25% Perpetual Preferred Stock, $1.00 par
value, of Fleet (the "Preferred Stock") not owned by Fleet (this Prospectus and
the Letter of Transmittal for the Depositary Shares together constitute the
"Offer"). Exchanges will be made on the basis of one Preferred Security for each
Depositary Share, in each case validly tendered and accepted for exchange in the
Offer. As of the date of this Prospectus, there are 11,000,000 Depositary Shares
outstanding and not owned by Fleet.
Concurrently with the issuance of Preferred Securities in exchange for
Depositary Shares validly tendered in the Offer, Fleet will deposit in the Trust
as trust assets its 8.00% Junior Subordinated Deferrable Interest Debentures due
2027 (the "Junior Subordinated Debentures"), having an aggregate principal
amount equal to the aggregate stated liquidation amount of the Preferred
Securities and the proceeds received upon issuance of the common securities to
be issued by the Trust. The Junior Subordinated Debentures will mature
(Continued on next page)
--------------------------
SEE "RISK FACTORS AND SPECIAL CONSIDERATIONS RELATING TO THE OFFER" STARTING
ON PAGE 23 FOR A DISCUSSION OF CERTAIN FACTORS RELATING TO THE PREFERRED
SECURITIES THAT SHOULD BE CONSIDERED BY INVESTORS, INCLUDING THE PERIOD AND
CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS ON THE PREFERRED
SECURITIES MAY BE DEFERRED AND THE RELATED FEDERAL INCOME TAX CONSEQUENCES.
--------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY 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.
--------------------------
MERRILL LYNCH & CO. AND SMITH BARNEY INC. HAVE BEEN RETAINED AS DEALER
MANAGERS TO SOLICIT EXCHANGES OF DEPOSITARY SHARES FOR PREFERRED SECURITIES. SEE
"THE OFFER--DEALER MANAGERS; SOLICITING DEALERS." FLEET NATIONAL BANK HAS BEEN
RETAINED AS EXCHANGE AGENT IN CONNECTION WITH THE OFFER. GEORGESON & COMPANY
INC. HAS BEEN RETAINED TO ACT AS INFORMATION AGENT TO ASSIST IN CONNECTION WITH
THE OFFER.
--------------------------
THE DEALER MANAGERS FOR THE OFFER ARE:
MERRILL LYNCH & CO. SMITH BARNEY INC.
The date of this Prospectus is December 24, 1996.
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- -SM- "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co.
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(Continued from previous page)
on February 15, 2027, which may be (i) shortened to a date not earlier than
April 15, 2001 or (ii) extended to a date not later than February 15, 2046 (such
date, as so shortened or extended, the "Stated Maturity"), in each case subject
to satisfying certain conditions, including, in the event of a shortening of the
maturity date, the prior approval of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), if such approval is then required
under applicable law, rules, guidelines or policies.
NONE OF FLEET, THE BOARD OF DIRECTORS OF FLEET, THE TRUSTEES NOR THE TRUST
MAKES ANY RECOMMENDATION TO HOLDERS (AS DEFINED HEREIN) OF DEPOSITARY SHARES AS
TO WHETHER TO EXCHANGE OR REFRAIN FROM EXCHANGING THEIR DEPOSITARY SHARES IN THE
OFFER. HOLDERS OF DEPOSITARY SHARES ARE URGED TO CONSULT THEIR FINANCIAL AND TAX
ADVISORS IN MAKING THEIR DECISIONS ON WHAT ACTION TO TAKE IN LIGHT OF THEIR OWN
PARTICULAR CIRCUMSTANCES.
IN ORDER TO PARTICIPATE IN THE OFFER, HOLDERS OF DEPOSITARY SHARES MUST
SUBMIT A LETTER OF TRANSMITTAL AND COMPLY WITH THE OTHER PROCEDURES FOR
TENDERING IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED HEREIN AND IN THE LETTER
OF TRANSMITTAL PRIOR TO THE EXPIRATION DATE (AS DEFINED HEREIN). SEE "THE
OFFER--PROCEDURES FOR TENDERING."
For a description of the other terms of the Offer, see "The Offer--Terms of
the Offer,"
"--Expiration Date; Extensions; Amendments; Termination," and "--Withdrawal of
Tenders." Application will be made to list the Preferred Securities on the New
York Stock Exchange (the "NYSE"). In order to satisfy the NYSE listing
requirements, acceptance of Depositary Shares validly tendered in the Offer is
subject to the condition that as of the Expiration Date there be at least 400
record or beneficial holders of at least 1,000,000 Preferred Securities to be
issued in exchange for such Depositary Shares (the "Minimum Distribution
Condition"), which condition may not be waived. See "The Offer--Expiration Date;
Extensions; Amendments; Termination" and "--Conditions to the Offer."
The Trust expressly reserves the right, in its sole discretion, subject to
applicable law, to (i) terminate the Offer, not accept for exchange the
Depositary Shares and promptly return the Depositary Shares upon the failure of
any condition specified above or in "The Offer--Conditions to the Offer," (ii)
waive any condition to the Offer (other than the Minimum Distribution Condition)
and accept all Depositary Shares previously tendered pursuant to the Offer,
(iii) extend the Expiration Date (as defined herein) of the Offer and retain all
Depositary Shares tendered pursuant to the Offer until the Expiration Date,
subject, however, to all withdrawal rights of holders, see "The
Offer--Withdrawal of Tenders," (iv) amend the terms of the Offer, (v) modify the
form of the consideration to be paid pursuant to the Offer or (vi) not accept
for exchange the Depositary Shares at any time on or prior to the Expiration
Date, for any reason, including, without limitation, if fewer than 100,000
Depositary Shares would remain outstanding upon acceptance of those tendered
(which condition may be waived by the Trust). Any amendment applicable to the
Offer will apply to all Depositary Shares tendered pursuant to the Offer. The
minimum period during which the Offer must remain open following material
changes in the terms of the Offer or the information concerning the Offer, other
than a change in the percentage of securities sought or the price, depends upon
the facts and circumstances, including the relative materiality of such terms or
information. See "The Offer--Expiration Date; Extensions; Amendments;
Termination."
Fleet will own directly or indirectly all of the securities representing
common undivided beneficial interests in the assets of the Trust (the "Common
Securities" and, together with the Preferred Securities, the "Trust
Securities"). The Trust exists for the sole purpose of (i) issuing (a) the
Preferred Securities in exchange for the Depositary Shares validly tendered in
the Offer and delivering the Depositary Shares to Fleet in consideration for the
deposit by Fleet in the Trust as trust assets of Junior Subordinated Debentures
having an aggregate stated principal amount equal to the aggregate stated
liquidation amount of the Preferred Securities and (b) the Common Securities to
Fleet in exchange for cash and investing the
2
<PAGE>
proceeds thereof in an equal aggregate principal amount of the Junior
Subordinated Debentures and (ii) engaging in only those other activities as are
necessary and incidental thereto. The Preferred Securities and the Common
Securities will rank pari passu with each other and will have equivalent terms,
except that (i) if an event of default under the Declaration (as defined herein)
occurs and is continuing, the holders of Preferred Securities will have a
priority over holders of the Common Securities with respect to payments in
respect of distributions and payments upon liquidation, redemption or otherwise
and (ii) the holders of Common Securities have the exclusive right (subject to
the terms of the applicable Declaration) to appoint, replace or remove the
Trustees (as defined herein) of the Trust and to increase or decrease the number
of Trustees upon the occurrence of certain events described herein. See
"Prospectus Summary--Description of Preferred Securities and Junior Subordinated
Debentures."
Holders of the Preferred Securities are entitled to receive cumulative cash
distributions at an annual rate of 8.00% of the liquidation amount of $25 per
Preferred Security, accruing from the first date following the Expiration Date
(the "Accrual Date"), and payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing March 31, 1997
("distributions"), subject to any Extension Periods (as defined herein). In
addition, holders of the Preferred Securities will be entitled to an additional
cash distribution at the rate of 7.25% per annum of the liquidation amount
thereof from January 15, 1997 through the Expiration Date ("Pre-Issuance Accrued
Distribution") in lieu of dividends accumulating and unpaid from January 15,
1997 on their Depositary Shares accepted for exchange, such additional
distribution to be made on March 31, 1997 to holders of the Preferred Securities
on the record date for such distribution. The distribution rate and the
distribution and other payment dates for the Preferred Securities will
correspond to the interest rate and the interest and other payment dates on the
Junior Subordinated Debentures. As a result, if principal or interest is not
paid on the Junior Subordinated Debentures, including as a result of Fleet's
election to extend the interest payment period on the Junior Subordinated
Debentures as described below, the Trust will not make payments on the Trust
Securities.
The payment of distributions out of moneys held by the Trust and payments on
liquidation of the Trust or the redemption of Preferred Securities, as set forth
below, are guaranteed by Fleet (the "Preferred Securities Guarantee") to the
extent described herein and under "Description of the Preferred Securities
Guarantee." The Preferred Securities Guarantee covers payments of distributions
and other payments on the Preferred Securities if and to the extent that the
Trust has funds available therefor, which will not be the case unless Fleet has
made a payment of interest or principal or other payments on the Junior
Subordinated Debentures held by the Trust as its sole asset. The Preferred
Securities Guarantee, when taken together with Fleet's obligations under the
Junior Subordinated Debentures, the Indenture (as defined herein) and the
Declaration, including its liabilities to pay costs, expenses, debts and
obligations of the Trust (other than with respect to the Trust Securities),
provides a full and unconditional guarantee of amounts due on the Preferred
Securities. See "Risk Factors and Special Considerations Relating to the
Offer--Rights Under the Preferred Securities Guarantee" herein. The obligations
of Fleet under the Preferred Securities Guarantee are subordinate and junior in
right of payment to all other liabilities of Fleet and rank pari passu with the
most senior preferred stock issued, from time to time, if any, by Fleet.
The obligations of Fleet under the Junior Subordinated Debentures are
subordinate and junior in right of payment to all present and future Senior
Indebtedness and Other Financial Obligations (each as defined herein) of Fleet,
which aggregated approximately $4.0 billion (holding company only) at September
30, 1996, and rank pari passu with Fleet's other general unsecured creditors. In
addition, because Fleet is a holding company, the Junior Subordinated Debentures
are effectively subordinated to all existing and future liabilities of Fleet's
subsidiaries, including depositors.
So long as Fleet shall not be in default in the payment of interest on the
Junior Subordinated Debentures, Fleet has the right to defer payments of
interest on the Junior Subordinated Debentures by extending the interest payment
period on the Junior Subordinated Debentures at any time for up to 20
consecutive quarters (each, an "Extension Period"), provided that an Extension
Period may not extend beyond the Stated Maturity of the Junior Subordinated
Debentures. If interest payments are so deferred,
3
<PAGE>
distributions on the Preferred Securities will also be deferred. During such
Extension Period, distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at an annual rate of 8.00% percent
per annum compounded quarterly, and during any Extension Period, holders of
Preferred Securities will be required to include deferred interest income in
their gross income for United States federal income tax purposes in advance of
receipt of the cash distributions with respect to such deferred interest
payments. There could be multiple Extension Periods of varying lengths
throughout the term of the Junior Subordinated Debentures. See "Risk Factors and
Special Considerations Relating to the Offer," "Description of the Preferred
Securities--Distributions," "Description of the Junior Subordinated
Debentures--Interest" and "--Option to Extend Interest Payment Period."
The Junior Subordinated Debentures are redeemable by Fleet, (i) in whole or
in part, from time to time, on or after April 15, 2001, at a prepayment price
(the "Optional Prepayment Price") equal to 100% of the principal amount thereof
or (ii) in whole but not in part, prior to April 15, 2001, upon the occurrence
of a Special Event (as defined herein), at a prepayment price (the "Special
Event Prepayment Price" and, together with the Optional Prepayment Price, the
"Prepayment Price") equal to 104% of the principal amount thereof from the
Expiration Date through April 14, 1998, declining ratably on each April 15
thereafter to 100% on or after April 15, 2001, plus, in either case, accrued
interest thereon to the date of prepayment. If Fleet redeems the Junior
Subordinated Debentures, the Trust must redeem Trust Securities on a pro rata
basis having an aggregate liquidation amount equal to the aggregate principal
amount of the Junior Subordinated Debentures so redeemed at a redemption price
equal to (i) the Optional Prepayment Price (the "Optional Redemption Price") if
redeemed on or after April 15, 2001 or (ii) the Special Event Prepayment Price
(the "Special Event Redemption Price" and, together with the Optional Redemption
Price, the "Redemption Price") if redeemed prior to April 15, 2001, upon the
occurrence of a Special Event, plus, in either case, accrued and unpaid
distributions thereon to the date fixed for redemption. See "Risk Factors and
Special Considerations Relating to the Offer," "Description of the Preferred
Securities--Mandatory Redemption and "--Special Event Redemption." The Preferred
Securities will be redeemed upon maturity of the Junior Subordinated Debentures.
See "Risk Factors and Special Considerations Relating to the Offer,"
"Description of the Preferred Securities--Distributions," "Description of the
Junior Subordinated Debentures--Interest" and "--Option to Extend Interest
Payment Period."
Fleet will have the right at any time to liquidate the Trust and cause the
Junior Subordinated Debentures held by the Trust to be distributed to the
holders of the Trust Securities. If the Junior Subordinated Debentures are
distributed to the holders of the Preferred Securities, Fleet will use its best
efforts to have the Junior Subordinated Debentures listed on the NYSE or on such
other exchange as the Preferred Securities are then listed. See "Description of
the Preferred Securities--Distribution of the Junior Subordinated Debentures"
and "Description of the Junior Subordinated Debentures."
Any such redemption or distribution of the Junior Subordinated Debentures
may require the prior approval of the Federal Reserve Board if such approval is
then required under applicable law, rules, guidelines or policies.
In the event of the involuntary or voluntary dissolution, winding-up or
termination of the Trust, the holders of the Preferred Securities will be
entitled to receive for each Preferred Security a liquidation amount of $25 plus
accrued and unpaid distributions thereon (including interest thereon) to the
date of payment, unless, in connection with such dissolution, the Junior
Subordinated Debentures are distributed to the holders of the Preferred
Securities. See "Description of the Preferred Securities--Liquidation
Distribution Upon Dissolution."
The Depositary Shares are listed and principally traded on the NYSE under
the symbol "FLT F". On November 12, 1996, the last full day of trading prior to
the filing of the Form S-4 registration statement to which this Prospectus forms
a part, the closing sales price of the Depositary Shares on the NYSE was $25.88
per share. The closing sales price of the Depositary Shares on the NYSE on
December 20, 1996 was
4
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$26.25 per share. HOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE
DEPOSITARY SHARES. To the extent that Depositary Shares are tendered and
accepted in the Offer, the terms on which untendered Depositary Shares could
subsequently be sold could be adversely affected. To the extent that the
aggregate number of Depositary Shares tendered and accepted in the Offer results
in the number of outstanding Depositary Shares to be less than 100,000, Fleet
would be required to delist the Depositary Shares from the NYSE pursuant to NYSE
rules and regulations, and the trading market for untendered Depositary Shares
could be adversely affected. In addition, following the Expiration Date, and in
accordance with and subject to applicable law, Fleet may from time to time
acquire Depositary Shares in the open market, by tender offer, subsequent
exchange offer or otherwise. Fleet's decision to make such acquisitions is
dependent on many factors, including market conditions in effect at the time of
any contemplated acquisition. Accordingly, Fleet cannot predict whether and to
what extent it will acquire any additional Depositary Shares and the
consideration to be paid therefor. See "Listing and Trading of Preferred
Securities and Depositary Shares."
Fleet will pay to Soliciting Dealers (as defined herein) designated by the
record or beneficial owner, as appropriate, of Depositary Shares a solicitation
fee of $0.50 per Depositary Share ($0.25 per Depository Share with respect to
the solicitation of beneficial holders of 10,000 or more shares) validly
tendered and accepted for exchange pursuant to the Offer, subject to certain
conditions. Soliciting Dealers are not entitled to a solicitation fee for
Depositary Shares beneficially owned by such Soliciting Dealer. See "The
Offer--Dealer Managers; Soliciting Dealers."
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS SHOULD NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY FLEET, THE TRUST, THE TRUSTEES OR THE
DEALER MANAGERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY EXCHANGE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF FLEET OR THE TRUST SINCE THE RESPECTIVE DATES
AS OF WHICH INFORMATION IS GIVEN HEREIN. THE OFFER IS NOT BEING MADE TO (NOR
WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS OF DEPOSITARY SHARES IN
ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF
WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. HOWEVER, FLEET
AND THE TRUST MAY, AT THEIR DISCRETION, TAKE SUCH ACTION AS THEY MAY DEEM
NECESSARY TO MAKE THE OFFER IN ANY SUCH JURISDICTION AND EXTEND THE OFFER TO
HOLDERS OF DEPOSITARY SHARES IN SUCH JURISDICTION. IN ANY JURISDICTION THE
SECURITIES LAWS OR BLUE SKY LAWS OF WHICH REQUIRE THE OFFER TO BE MADE BY A
LICENSED BROKER OR DEALER, THE OFFER IS BEING MADE ON BEHALF OF THE TRUST BY THE
DEALER MANAGERS OR ONE OR MORE REGISTERED BROKERS OR DEALERS WHICH ARE LICENSED
UNDER THE LAWS OF SUCH JURISDICTION.
5
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TABLE OF CONTENTS
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Available Information...................................................................................... 7
Incorporation of Certain Documents by Reference............................................................ 8
Prospectus Summary......................................................................................... 9
Risk Factors and Special Considerations Relating to the Offer.............................................. 23
Comparison of Preferred Securities and Depositary Shares................................................... 29
Fleet Financial Group, Inc................................................................................. 34
Selected Consolidated Financial Data of Fleet Financial Group, Inc......................................... 35
Recent Developments........................................................................................ 37
Capitalization............................................................................................. 38
Accounting Treatment....................................................................................... 38
The Trust.................................................................................................. 39
The Offer.................................................................................................. 42
Listing and Trading of Preferred Securities and Depositary Shares.......................................... 50
Transactions and Arrangements Concerning the Offer......................................................... 51
Fees and Expenses; Transfer Taxes.......................................................................... 51
Price Range of Depositary Shares........................................................................... 51
Description of the Preferred Securities.................................................................... 52
Description of the Preferred Securities Guarantee.......................................................... 64
Description of the Junior Subordinated Debentures.......................................................... 67
Description of the Preferred Stock and Depositary Shares................................................... 76
Relationship Between the Preferred Securities, the Junior Subordinated Debentures
and the Preferred Securities Guarantee.................................................................... 81
United States Federal Income Taxation...................................................................... 82
Legal Matters.............................................................................................. 86
Experts.................................................................................................... 86
ERISA Considerations....................................................................................... 86
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6
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AVAILABLE INFORMATION
This Prospectus constitutes a part of a Registration Statement on Form S-4
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by Fleet and the Trust with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered hereby. This
Prospectus does not contain all of the information set forth in such
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. Reference is made to such
Registration Statement and to the exhibits relating thereto for further
information with respect to Fleet, the Trust and such securities. Any statements
contained herein concerning the provisions of any document filed as an exhibit
to the Registration Statement or otherwise filed with the Commission or
incorporated by reference herein are not necessarily complete, and, in each
instance, reference is made to the copy of such document so filed for a more
complete description of the matter involved. Each such statement is qualified in
its entirety by such reference.
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, proxy statements and other information with the
Commission. Reports, proxy statements and other information concerning Fleet can
be inspected and copied at prescribed rates at the Commission's Public Reference
Room, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, as well
as the following Regional Offices of the Commission: 7 World Trade Center, 13th
Floor, New York, New York 10048; and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material may be obtained by
mail from the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. If available, such reports and
other information may also be accessed through the Commission's electronic data
gathering, analysis and retrieval system ("EDGAR") via electronic means,
including the Commission's web site on the Internet (http://www.sec.gov). Such
reports, proxy statements and other information may also be inspected at the
offices of the NYSE, 20 Broad Street, New York, New York 10005.
No separate financial statements of the Trust have been included herein.
Fleet does not consider that such financial statements would be material to
holders of the Preferred Securities because (i) all of the voting securities of
the Trust will be owned, directly or indirectly, by Fleet, a reporting company
under the Exchange Act, (ii) the Trust has no independent operations but exists
for the sole purpose of issuing (a) its Preferred Securities in exchange for
Depositary Shares validly tendered in the Offer and delivering such Depositary
Shares to Fleet in consideration of the deposit by Fleet as trust assets of
Junior Subordinated Debentures having an aggregate stated principal amount equal
to the aggregate stated liquidation amount of such Preferred Securities, and (b)
its Common Securities to Fleet in exchange for cash and investing the proceeds
thereof in an equivalent amount of Junior Subordinated Debentures, and (iii)
Fleet's obligations described herein to provide certain indemnities in respect
of, and be responsible for, certain costs, expenses, debts and liabilities of
the Trust under the Indenture and pursuant to the Declaration of the Trust, the
Preferred Securities Guarantee issued with respect to Preferred Securities
issued by the Trust, the Junior Subordinated Debentures purchased by the Trust
and the Indenture, taken together, constitute a full and unconditional guarantee
of payments due on the Preferred Securities. See "Description of the Preferred
Securities Guarantee" and "Description of the Junior Subordinated Debentures."
The Trust is not currently subject to the information reporting requirements
of the Exchange Act. The Trust will become subject to such requirements upon the
effectiveness of the Registration Statement, although it intends to seek and
expects to receive exemptions therefrom.
7
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Fleet pursuant to
Section 13 of the Exchange Act are incorporated by reference in this Prospectus:
(a) Annual Report on Form 10-K for the fiscal year ended December 31, 1995;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, June
30, 1996 and September 30, 1996;
(c) Current Reports on Form 8-K dated January 17, 1996, January 19, 1996,
February 8, 1996, February 21, 1996, March 15, 1996 (as amended by a Form
8-K/A dated April 5, 1996), March 25, 1996, March 26, 1996, March 27, 1996,
April 1, 1996, April 15, 1996, April 17, 1996, May 1, 1996, May 15, 1996 (as
amended by a Form 8-K/A dated August 5, 1996), July 17, 1996, August 15,
1996, August 23, 1996, September 27, 1996, October 16, 1996, November 14,
1996, December 5, 1996 and December 6, 1996; and
(d) The description of the Preferred Stock and Depositary Shares contained in a
Registration Statement on Form 8-A dated February 27, 1996, 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 by Fleet pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and 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 therein (or in any subsequently filed document
that also is or is deemed to be incorporated by reference herein or therein)
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.
Fleet will provide without charge to each person to whom a copy of this
Prospectus has been delivered, upon the written or oral request of such person,
a copy of any or all of the documents referred to above which have been or may
be incorporated by reference herein (other than exhibits to such documents
unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to Investor Relations
Department, Fleet Financial Group, Inc., One Federal Street, Boston,
Massachusetts 02110, (617) 292-2000.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
THE INVESTOR RELATIONS DEPARTMENT, FLEET FINANCIAL GROUP, INC., ONE FEDERAL
STREET, BOSTON, MASSACHUSETTS 02110, (617) 292-2000. IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY JANUARY 23, 1997.
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PROSPECTUS SUMMARY
The following summary does not purport to be complete and is qualified in
its entirety by the detailed information contained elsewhere in, or incorporated
by reference in, this Prospectus.
FLEET FINANCIAL GROUP, INC.
Fleet is a diversified financial services company organized under the laws
of the State of Rhode Island. Fleet was the 11th largest bank holding company in
the United States as of September 30, 1996, in terms of total assets, with total
assets of $87.2 billion, total deposits of $67.6 billion and stockholders'
equity of $7.3 billion.
Fleet is engaged in a general commercial banking and trust business
throughout the states of Connecticut, Massachusetts, New Jersey, New York, Rhode
Island, Maine, New Hampshire and Florida through its six banking subsidiaries,
and also provides, through its nonbanking subsidiaries and its credit card
banking subsidiary, a variety of financial services, including mortgage banking,
asset-based lending, consumer finance, real estate financing, securities
brokerage services, investment banking, investment advice and management, data
processing and student loan servicing.
The principal office of Fleet is located at One Federal Street, Boston,
Massachusetts 02110, telephone number (617) 292-2000.
THE TRUST
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) a declaration of trust, dated as of November 1, 1996, executed by Fleet,
as sponsor (the "Sponsor"), and the trustees of the Trust (respectively, the
"Trustees") and (ii) the filing of a certificate of trust with the Secretary of
State of the State of Delaware on November 1, 1996. The declaration will be
amended and restated in its entirety (as so amended and restated, the
"Declaration") substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. The Declaration will be
qualified as an indenture under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). Upon issuance of the Preferred Securities, the
purchasers thereof will own all of the issued and outstanding Preferred
Securities. See "Description of the Preferred Securities--Book-Entry; Delivery
and Form." Fleet will directly or indirectly acquire all of the Common
Securities of the Trust in an aggregate liquidation amount equal to at least 3
percent of the total capital of the Trust. The Trust exists for the sole purpose
of (i) issuing (a) its Preferred Securities in exchange for Depositary Shares
validly tendered in the Offer and delivering such Depositary Shares to Fleet in
consideration of the deposit by Fleet as trust assets Junior Subordinated
Debentures having an aggregate stated principal amount equal to the aggregate
stated liquidation amount of such Preferred Securities, and (b) its Common
Securities to Fleet in exchange for cash and investing the proceeds thereof in
an equal aggregate principal amount of Junior Subordinated Debentures and (ii)
engaging in only those other activities necessary or incidental thereto.
Pursuant to the Declaration, the number of Trustees will initially be five.
Three of the Trustees (the "Regular Trustees") will be persons who are employees
or officers of, or who are affiliated with, Fleet. The fourth trustee will be a
financial institution that is unaffiliated with Fleet, which trustee will serve
as institutional trustee under the Declaration and as indenture trustee for the
purposes of compliance with the provisions of the Trust Indenture Act (the
"Institutional Trustee"). Initially, The First National Bank of Chicago will be
the Institutional Trustee until removed or replaced by the holder of the Common
Securities. For purposes of compliance with the provisions of the Trust
Indenture Act, The First National Bank of Chicago will act as trustee (the
"Guarantee Trustee") under the Preferred Securities Guarantee and as Debt
Trustee (as defined herein) under the Indenture (as defined herein). The fifth
trustee will be an entity that maintains its principal place of business in the
state of Delaware (the "Delaware Trustee"). Initially, First Chicago Delaware
Inc., an affiliate of the Institutional Trustee, will act as Delaware Trustee.
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<PAGE>
See "Description of the Preferred Securities Guarantee" and "Description of the
Preferred Securities-- Voting Rights" herein.
The Institutional Trustee will hold title to the Junior Subordinated
Debentures for the benefit of the holders of the Trust Securities and will have
the power to exercise all rights, powers and privileges under the Indenture as
the holder of the Junior Subordinated Debentures. In addition, the Institutional
Trustee will maintain exclusive control of a segregated non-interest bearing
bank account (the "Institutional Account") to hold all payments made in respect
of the Junior Subordinated Debentures for the benefit of the holders of the
Trust Securities. The Institutional Trustee will make payments of distributions
and payments on liquidation, redemption and otherwise to the holders of the
Trust Securities out of funds from the Institutional Account. The Guarantee
Trustee will hold the Preferred Securities Guarantee for the benefit of the
holders of the Preferred Securities. Fleet, as the direct or indirect holder of
all the Common Securities, will have the right to appoint, remove or replace any
Trustee and to increase or decrease the number of Trustees. Fleet will pay all
fees and expenses related to the Trust and the offering of the Trust Securities.
See "Description of the Junior Subordinated Debentures--Miscellaneous."
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Delaware Business Trust Act (the "Business Trust Act") and the
Trust Indenture Act. See "Description of the Preferred Securities."
CERTAIN POTENTIAL BENEFITS AND RISKS TO INVESTORS
Prospective investors should carefully review the information contained
elsewhere in this Prospectus prior to making a decision regarding the Offer and
should particularly consider the following matters:
POTENTIAL BENEFITS TO EXCHANGING HOLDERS
- The cash distributions rate on the Preferred Securities will be 75 basis
points greater than the dividend rate on the Depositary Shares. See
"Comparison of Preferred Securities and Depositary Shares."
- Although the obligations of Fleet under the Junior Subordinated Debentures
are unsecured and will be subordinated and junior in right of payment to
all Senior Indebtedness and Other Financial Obligations of Fleet, they
will rank pari passu with Fleet's other general unsecured creditors and
will be senior to all capital stock of Fleet now or hereafter issued by
Fleet (including the Preferred Stock underlying the Depositary Shares).
- While no dividends are required to be paid with respect to the Depositary
Shares, interest payments on the Junior Subordinated Debentures and
therefore distributions on the Preferred Securities may not be deferred
for more than 20 consecutive quarterly interest periods. Moreover, during
any such Extension Period, (i) Fleet shall not declare or pay any dividend
on, make a distribution with respect to, or redeem, purchase or acquire,
or make a liquidation payment with respect to, any of its capital stock
(other than (a) purchases or acquisitions of shares of the common stock,
par value $0.01 per share, of Fleet (the "Fleet Common Stock") in
connection with the satisfaction by Fleet of its obligations under any
employee benefit plans or any other contractual obligation of Fleet (other
than a contractual obligation ranking pari passu with or junior to the
Junior Subordinated Debentures), (b) as a result of a reclassification of
Fleet's capital stock or the exchange or conversion of one class or series
of Fleet's capital stock for another class or series of Fleet's capital
stock or (c) the purchase of fractional interests in shares of Fleet's
capital stock pursuant to the conversion or exchange provisions of such
Fleet capital stock or the security being converted or exchanged), (ii)
Fleet shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities issued by Fleet
that rank pari passu with or junior to the Junior Subordinated Debentures
and (iii) Fleet shall not make any guarantee payments with respect to the
foregoing (other than pursuant to the Preferred Securities Guarantee).
Fleet has no
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present intention of exercising its right to defer payments of interest on
the Junior Subordinated Debentures. However, should Fleet determine to
exercise such right in the future, the market price of the Preferred
Securities is likely to be affected. See "Description of the Preferred
Securities." To date, Fleet has made each quarterly dividend payment with
respect to the Depositary Shares on the scheduled dividend payment date,
and dividends on the Preferred Stock accrue whether or not such dividends
are declared. See "Description of the Preferred Stock and Depositary
Shares--Preferred Stock--Dividends."
- The Offer will allow Fleet to achieve certain tax efficiencies because, in
contrast to dividend payments with respect to the Depositary Shares which
are not deductible by Fleet, Fleet will be able to deduct interest
payments on the Junior Subordinated Debentures for United States federal
income tax purposes. Such tax efficiencies may give rise to an incremental
increase in cash flow to Fleet. See "The Offer--Reason and Purpose of the
Offer."
- So long as payments of interest and other payments are made when due on
the Junior Subordinated Debentures, such payments will be sufficient to
cover cash distributions and other payments made on the Trust Securities
because (i) the aggregate principal amount of Junior Subordinated
Debentures deposited as trust assets in the Trust will be equal to the sum
of (a) the aggregate stated liquidation amount of the Preferred Securities
issued by the Trust in exchange for the Depositary Shares accepted in the
Offer and (b) the amount of proceeds received by the Trust from the
issuance of the Common Securities to Fleet, which proceeds will be used by
the Trust to purchase an equal principal amount of Junior Subordinated
Debentures, (ii) interest rate and interest and other payment dates on the
Junior Subordinated Debentures will match the distribution rate and
distribution and other payment dates for the Trust Securities, (iii) the
Declaration provides that Fleet, as issuer of the Junior Subordinated
Debentures, shall pay for all debts and obligations (other than payments
of interest and principal with respect to the Trust Securities) and all
costs and expenses of the Trust, and (iv) the Declaration further provides
that the Trustees shall not permit the Trust to, among other things,
engage in any activity that is not consistent with the purposes of the
Trust. See "The Trust," "Description of the Preferred Securities,"
"Description of the Junior Subordinated Debentures" and "Relationship
Between the Preferred Securities, the Junior Subordinated Debentures and
the Preferred Securities Guarantee."
- The Trust will have no independent operations and will exist for the sole
purpose of effecting the Offer and issuing the Trust Securities as
described herein and owning and holding the Junior Subordinated
Debentures. See "The Trust."
- If a Declaration Event of Default (as defined herein) occurs and is
continuing under the Declaration, then the holders of Preferred Securities
would be able to rely on the enforcement by the Institutional Trustee of
its rights as a holder of the Junior Subordinated Debentures against
Fleet. In addition, the holders of a majority in liquidation amount of the
Preferred Securities will have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the
Institutional Trustee or to direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration, including
the right to direct the Institutional Trustee to exercise the remedies
available to it as a holder of the Junior Subordinated Debentures. If the
Institutional Trustee fails to enforce its rights under the Junior
Subordinated Debentures, a holder of Preferred Securities may institute a
legal proceeding directly against Fleet to enforce the Institutional
Trustee's rights under the Junior Subordinated Debentures without first
instituting any legal proceeding against the Institutional Trustee or any
other person or entity. Notwithstanding the foregoing, if a Declaration
Event of Default has occurred and is continuing, and such event is
attributable to the failure of Fleet to pay interest or principal on the
Junior Subordinated Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date),
then a holder of Preferred Securities may directly institute a proceeding
for enforcement of payment to such holder of the principal of or interest
on the Junior
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Subordinated Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such holder (a "Direct
Action") on or after the respective due date specified in the Junior
Subordinated Debentures. In connection with such Direct Action, Fleet will
be subrogated to the rights of such holder of Preferred Securities under
the Declaration to the extent of any payment made by Fleet to such holder
of Preferred Securities in such Direct Action. The holders of Preferred
Securities will not be able to exercise directly any other remedy
available to the holders of the Junior Subordinated Debentures. See
"Description of the Preferred Securities--Declaration Events of Default."
POTENTIAL RISKS TO EXCHANGING HOLDERS
- Participation in the Offer will be a taxable event for holders of
Depositary Shares. See "Risk Factors and Special Considerations Relating
to the Offer--Exchange of Depositary Shares for Preferred Securities is a
Taxable Event."
- The obligations of Fleet under the Junior Subordinated Debentures are
subordinate and junior in right of payment to all present and future
Senior Indebtedness and Other Financial Obligations of Fleet, which
aggregated approximately $4.0 billion at September 30, 1996 (holding
company only), and rank pari passu with Fleet's other general unsecured
creditors. In addition, because Fleet is a holding company, the Junior
Subordinated Debentures are effectively subordinated to all existing and
future liabilities of Fleet's subsidiaries, including depositors. The
obligations of Fleet under the Preferred Securities Guarantee and the
Preferred Securities are subordinate and junior in right of payment to all
other liabilities of Fleet and rank pari passu with the most senior
preferred stock issued, from time to time, if any, by Fleet. See "Risk
Factors and Special Considerations Relating to the Offer--Ranking of
Subordinated Obligations Under the Preferred Securities Guarantee and
Junior Subordinated Debentures."
- If Fleet were to default in its obligation to pay amounts payable on the
Junior Subordinated Debentures, the Trust would lack available funds for
the payment of distributions or amounts payable on redemption of the
Preferred Securities or otherwise. In addition, the interest payment
period on the Junior Subordinated Debentures may be extended from time to
time under certain circumstances by Fleet, in its sole discretion, for up
to 20 consecutive quarters, such period not to extend beyond the Stated
Maturity of the Junior Subordinated Debentures. See "Risk Factors and
Special Considerations Relating to the Offer--Ranking of Subordinated
Obligations Under the Preferred Securities Guarantee and Junior
Subordinated Debentures" and "--Option to Extend Interest Payment Period."
- Should Fleet not make interest or other payments on the Junior
Subordinated Debentures for any reason, including as a result of Fleet's
election to defer payments of interest on the Junior Subordinated
Debentures by extending the interest payment period thereon, the Trust
will not make distributions or other payments on the Trust Securities. In
such an event, holders of the Preferred Securities would not be able to
rely on the Preferred Securities Guarantee since the Preferred Securities
Guarantee covers distributions and other payments on the Preferred
Securities only if and to the extent that Fleet has made a payment to the
Trust of interest or principal on the Junior Subordinated Debentures
deposited in the Trust as trust assets. See "Risk Factors and Special
Considerations Relating to the Offer--Rights Under the Preferred
Securities Guarantee."
- If Fleet elects to defer payments of interest on the Junior Subordinated
Debentures by extending the interest period thereon, distributions on the
Preferred Securities would also be deferred but the Trust would continue
to accrue income (as original issue discount ("OID")) in respect of the
Junior Subordinated Debentures which would be taxable to beneficial owners
of Preferred Securities. As a result, beneficial owners of Preferred
Securities during an Extension Period would include their pro rata share
of such deferred interest in gross income in advance of the receipt of
cash. See "Risk
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Factors and Special Considerations Relating to the Offer--Option to Extend
Interest Payment Period."
- Holders of Preferred Securities will have limited voting rights and will
not be able to appoint, remove or replace, or to increase or decrease the
number of, Trustees of the Trust, which rights are vested exclusively in
the Common Securities. See "Risk Factors and Special Considerations
Relating to the Offer--Limited Voting Rights" and "Description of the
Preferred Securities-- Voting Rights." Holders of Depositary Shares also
have limited voting rights. However, with certain exceptions, in the event
that dividends on any or all series of Fleet's preferred stock, including
the Preferred Stock, are in arrears and unpaid for six quarterly dividend
periods, whether or not consecutive, the Board of Directors of Fleet (the
"Fleet Board") is required to be increased by two directors and the
holders of Preferred Stock, together with the holders of all other series
of preferred stock then entitled to vote thereon, would be entitled to
elect two directors of the expanded Fleet Board. See "Description of the
Preferred Stock and Depositary Shares--Preferred Stock--Voting Rights."
- The Depositary Shares and the underlying Preferred Stock are redeemable at
the option of Fleet on or after April 15, 2001, in whole or in part. The
Junior Subordinated Debentures, and as a result, the Preferred Securities,
are redeemable by Fleet, in whole or in part, from time to time, on or
after April 15, 2001, or, in whole but not in part, prior to April 15,
2001, upon the occurrence of a Special Event. See "Risk Factors and
Special Considerations Relating to the Offer--Proposed Tax Legislation"
and "Description of the Preferred Securities--Mandatory Redemption" and
"--Special Event Redemption."
Fleet also will have the right at any time to shorten the maturity of the
Junior Subordinated Debentures to a date not earlier than April 15, 2001.
The exercise of such right is subject to the prior approval of the Federal
Reserve Board, if such approval is then required under applicable law,
rules, guidelines or policies. Fleet also will have the right to extend
the maturity of the Junior Subordinated Debentures to a date no later than
February 15, 2046, so long as at the time such election is made and at the
time such extension commences (i) Fleet is not in bankruptcy, otherwise
insolvent or in liquidation, (ii) Fleet is not in default in the payment
of any interest or principal on the Junior Subordinated Debentures, (iii)
the Trust is not in arrears on payments of distributions on the Preferred
Securities and no deferred distributions on the Preferred Securities are
accumulated and (iv) the Junior Subordinated Debentures, or, if the
Preferred Securities are rated, the Preferred Securities, are rated at
least BBB- by Standard & Poor's Ratings Services, at least Baa3 by Moody's
Investors Service, Inc. or at least the equivalent by any other nationally
recognized statistical rating organization. In the event that Fleet elects
to shorten or extend the maturity date of the Junior Subordinated
Debentures, it shall give notice to the Debt Trustee, and the Debt Trustee
shall give notice of such shortening or extension to the holders of the
Junior Subordinated Debentures no more than 90 and no less than 30 days
prior to the effectiveness thereof.
- Unlike dividends paid on Depositary Shares, distributions made on the
Preferred Securities are not eligible for the dividends received deduction
for corporate holders.
- While application will be made to list the Preferred Securities on the
NYSE, the Preferred Securities is a new issue of securities with no
established trading market. In addition, liquidity of the Preferred
Securities will be affected by the number of Depositary Shares exchanged
in the Offer. See "Risk Factors and Special Considerations Relating to the
Offer--Lack of Established Trading Market for Preferred Securities" and
"--Reduced Trading Market for Depositary Shares."
- Fleet will have the right at any time to liquidate the Trust and cause the
Junior Subordinated Debentures held by the Trust to be distributed to the
holders of Trust Securities. While Fleet will use its best efforts in such
a situation to have the Junior Subordinated Debentures listed on the NYSE,
there is no guarantee that such listing will take place or that a market
will exist for the
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<PAGE>
Junior Subordinated Debentures. See "Risk Factors and Special
Considerations Relating to the Offer--Redemption or Distribution of the
Junior Subordinated Debentures."
POTENTIAL RISKS TO NON-EXCHANGING HOLDERS
- The liquidity and trading market for untendered Depositary Shares could be
adversely affected to the extent Depositary Shares are tendered and
accepted in the Offer. In addition, following the Expiration Date, and in
accordance with and subject to applicable law, Fleet may from time to time
acquire Depositary Shares in the open market, by tender offer, subsequent
exchange offer or otherwise. Fleet's decision to make such acquisitions is
dependent on many factors, including market conditions in effect at the
time of any contemplated acquisition. Accordingly, Fleet cannot predict
whether and to what extent it will acquire any additional Depositary
Shares and the consideration to be paid therefor. See "Risk Factors and
Special Considerations Relating to the Offer--Reduced Trading Market for
Depositary Shares."
- The Junior Subordinated Debentures and the Preferred Securities Guarantee
will rank senior in right of payment to the untendered Depositary Shares.
See "Risk Factors and Special Considerations Relating to the
Offer--Ranking of Subordinated Obligations Under the Preferred Securities
Guarantee and Junior Subordinated Debentures."
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THE OFFER
REASON AND PURPOSE OF THE OFFER
On October 21, 1996, the Federal Reserve Board issued a press release (the
"Federal Reserve Press Release") announcing that it had approved the use of
certain cumulative preferred stock instruments, such as the Preferred
Securities, as "Tier 1 capital" for purposes of the Federal Reserve Board's
capital guidelines for bank holding companies ("Tier 1 capital"). Fleet intends
to treat the Preferred Securities as Tier 1 capital. Moreover, under current
United States federal tax law, the interest payable on the Junior Subordinated
Debentures, unlike the dividends payable on the Depositary Shares, is
deductible.
TERMS OF THE OFFER
Upon the terms and subject to the conditions set forth herein and in the
Letter of Transmittal, the Trust hereby offers to exchange Preferred Securities
for any and all of the Depositary Shares not owned by Fleet. Exchanges will be
made on the basis of one Preferred Security for each Depositary Share validly
tendered and accepted for exchange in the Offer. See "The Offer--Terms of the
Offer."
EXPIRATION DATE; WITHDRAWALS
Upon the terms and conditions of the Offer, the Trust will accept for
exchange any and all Depositary Shares validly tendered and not withdrawn prior
to 12:00 Midnight, New York City time, on Thursday, January 30, 1997, or if the
Offer is extended by the Trust, in its sole discretion, the latest date and time
to which the Offer has been extended (the "Expiration Date"). Tenders of
Depositary Shares pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date and, unless accepted for exchange by the Trust, may be
withdrawn at any time after 40 Business Days (as defined herein) after the date
of this Prospectus. A "Business Day" shall mean any day other than Saturday,
Sunday or any other day on which banking institutions in New York City (in the
State of New York) or Chicago, Illinois are permitted or required by any
applicable law to close. See "The Offer--Expiration Date; Extensions;
Amendments; Termination" and "--Withdrawal of Tenders." Tenders must be made to
the Exchange Agent in order to be valid.
CONDITIONS TO THE OFFER; EXTENSIONS; AMENDMENTS; TERMINATION
Consummation of the Offer is conditioned on, among other things, tenders by
a sufficient number of holders of Depositary Shares to meet the Minimum
Distribution Condition, which condition may not be waived. See "The
Offer--Conditions to the Offer" and "--Expiration Date; Extensions; Amendments;
Termination."
The Trust expressly reserves the right, in its sole discretion, subject to
applicable law, to (i) terminate the Offer, and not accept for exchange any
Depositary Shares and promptly return the Depositary Shares, upon the failure of
any condition specified above or under "The Offer--Conditions to the Offer,"
(ii) waive any condition to the Offer (other than the Minimum Distribution
Condition) and accept all Depositary Shares previously tendered pursuant to the
Offer, (iii) extend the Expiration Date of the Offer and retain all Depositary
Shares tendered pursuant to the Offer until the Expiration Date, subject,
however, to all withdrawal rights of holders, see "The Offer--Withdrawal of
Tenders," (iv) amend the terms of the Offer, (v) modify the form of the
consideration to be paid pursuant to the Offer, or (vi) not accept for exchange
the Depositary Shares at any time on or prior to the Expiration Date, for any
reason, including, without limitation, if fewer than 100,000 Depositary Shares
would remain outstanding upon acceptance of those tendered (which condition may
be waived by the Trust). Any amendment applicable to the Offer will apply to all
Depositary Shares tendered pursuant to the Offer. The minimum period during
which the Offer must remain open following material changes in the terms of the
Offer or the information concerning the Offer, other than a change in the
percentage of securities sought or the price, depends upon the facts and
circumstances, including the relative materiality of such terms or information.
See "The Offer--Conditions to the Offer" and "--Expiration Date; Extensions;
Amendments; Termination."
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PROCEDURES FOR TENDERING
Each Holder of Depositary Shares wishing to participate in the Offer must
(i) properly complete and sign the Letter of Transmittal (or where appropriate,
an Agent's Message (as defined herein)) or a facsimile thereof (all references
in this Prospectus to the Letter of Transmittal shall be deemed to include a
facsimile thereof) in accordance with the instructions contained herein and in
the Letter of Transmittal, together with any required signature guarantees, and
deliver the same to Fleet National Bank, as Exchange Agent, at one of its
addresses forth on the back cover page hereof, prior to the Expiration Date and
either (a) certificates for the Depositary Shares must be received by the
Exchange Agent at such address or (b) such Depositary Shares must be transferred
pursuant to the procedures for book-entry transfer described herein and a
confirmation of such book-entry transfer must be received by the Exchange Agent,
in each case prior to the Expiration Date, or (ii) comply with the guaranteed
delivery procedures described herein. See "The Offer--Procedures for Tendering."
IN ORDER TO PARTICIPATE IN THE OFFER, HOLDERS OF DEPOSITARY SHARES MUST
SUBMIT THE LETTER OF TRANSMITTAL AND COMPLY WITH THE OTHER PROCEDURES FOR
TENDERING IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED HEREIN AND IN THE LETTER
OF TRANSMITTAL PRIOR TO THE EXPIRATION DATE.
LETTERS OF TRANSMITTAL, DEPOSITARY SHARES AND ANY OTHER REQUIRED DOCUMENTS
SHOULD BE SENT ONLY TO THE EXCHANGE AGENT--NOT TO FLEET, THE TRUST, THE DEALER
MANAGERS OR THE INFORMATION AGENT.
SPECIAL PROCEDURE FOR BENEFICIAL OWNERS
Any beneficial owner whose Depositary Shares are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender such Depositary Shares should contact such registered Holder promptly
and instruct such registered Holder to tender on such beneficial owner's behalf.
If such beneficial owner wishes to tender on its own behalf, such owner must,
prior to completing and executing the Letter of Transmittal and delivering its
Depositary Shares, either make appropriate arrangements to register ownership of
the Depositary Shares in such owner's name or obtain a properly completed stock
power from the registered Holder. The transfer of registered ownership may take
considerable time and may not be able to be completed prior to the Expiration
Date. See "The Offer--Procedures for Tendering--Special Procedure for Beneficial
Owners."
GUARANTEED DELIVERY PROCEDURES
If a Holder desires to accept the Offer and time will not permit the Letter
of Transmittal or Depositary Shares to reach the Exchange Agent before the
Expiration Date or the procedure for book-entry transfer cannot be completed on
a timely basis, a tender may be effected in accordance with the guaranteed
delivery procedures set forth in "The Offer--Procedures for
Tendering--Guaranteed Delivery."
ACCEPTANCE OF SHARES
Upon the terms and subject to the conditions of the Offer, including the
Minimum Distribution Condition, the Trust will accept for exchange any and all
Depositary Shares validly tendered and not withdrawn prior to the Expiration
Date. The Trust expressly reserves the right, in its sole discretion, to delay
acceptance for exchange of Depositary Shares tendered under the Offer and the
delivery of the Preferred Securities with respect to the Depositary Shares
accepted for exchange (subject to Rules 13e-4 and 14e-1 under the Exchange Act,
which require that Fleet and the Trust consummate the Offer or return the
Depositary Shares deposited by or on behalf of the Holders thereof promptly
after the termination or withdrawal of the Offer), or to amend, withdraw or
terminate the Offer, at any time prior to the Expiration Date for any of the
reasons set forth in "The Offer--Conditions to the Offer" and "--Expiration
Date; Extensions; Amendments; Termination."
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If the Trust decides, in its sole discretion, to decrease the number of
Depositary Shares sought in the Offer or to increase or decrease the
consideration offered to holders of Depositary Shares, and if the Offer is
scheduled to expire less than ten Business Days from and including the date that
notice of such increase or decrease is first published, sent or given in the
manner specified in "The Offer--Terms of the Offer" and "--Expiration Date;
Extensions; Amendments; Termination," then the Offer will remain open for a
minimum of ten Business Days from and including the date of such notice.
All Depositary Shares not accepted pursuant to the Offer will be returned to
the tendering Holders at the Trust's expense as promptly as practicable
following the Expiration Date.
DELIVERY OF PREFERRED SECURITIES
Subject to the terms and conditions of the Offer, the delivery of the
Preferred Securities to be issued pursuant to the Offer will occur as promptly
as practicable following the Expiration Date. See "The Offer--Terms of the
Offer" and "--Expiration Date; Extensions; Amendments; Termination."
DESCRIPTION OF PREFERRED SECURITIES AND JUNIOR SUBORDINATED DEBENTURES
The Preferred Securities evidence preferred undivided beneficial interests
in the assets of the Trust and will have terms equivalent to the Common
Securities, except that upon the occurrence and during the continuance of a
Declaration Event of Default, the rights of the holders of the Common Securities
to receive payment of periodic distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Preferred Securities. The Declaration does not permit the issuance by the
Trust of any securities other than the Trust Securities or the incurrence of any
indebtedness by the Trust. Pursuant to the Declaration, the Institutional
Trustee will own the Junior Subordinated Debentures purchased by the Trust for
the benefit of the holders of the Trust Securities. The payment of distributions
out of money held by the Trust, and payments upon redemption of the Preferred
Securities or liquidation of the Trust, are guaranteed by Fleet to the extent
described under "Description of the Preferred Securities Guarantee." The
Declaration defines an event of default with respect to the Trust Securities (a
"Declaration Event of Default") as the occurrence and continuance of an "event
of default" under the Indenture with respect to the Junior Subordinated
Debentures (an "Indenture Event of Default").
Distributions on the Preferred Securities will be fixed at a rate per annum
of 8.00% of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears for more than one quarter will bear interest thereon at
the rate of 8.00% per annum, compounded quarterly to the extent permitted by
law. The term "distribution" as used herein includes any such interest payable
unless otherwise stated. The amount of distributions payable for any period will
be computed on the basis of a 360-day year of twelve 30-day months.
Distributions on the Preferred Securities will be cumulative, will accrue from
the Accrual Date ,which is the first date following the Expiration Date, and,
except as otherwise described below, will be payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year, commencing March
31, 1997, when, as and if available for payment. In addition, holders of
Preferred Securities will be entitled to an additional cash distribution at the
rate of 7.25% per annum of the liquidation amount thereof from January 15, 1997
through the Expiration Date in lieu of dividends accumulating and unpaid from
January 15, 1997 on their Depositary Shares accepted for exchange, such
additional distribution to be made on March 31, 1997 to holders of the Preferred
Securities on the record date for such distribution.
The distribution rate and the distribution and other payment dates for the
Preferred Securities will correspond to the interest rate and the interest and
other payment dates on the Junior Subordinated Debentures deposited in the Trust
as trust assets. As a result, if principal or interest is not paid on the Junior
Subordinated Debentures, including as a result of Fleet's election to extend the
interest payment period on the Junior Subordinated Debentures as described
below, the Trust will not make payments on the Trust Securities. Fleet has the
right under the Indenture to defer payments of interest on the Junior
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Subordinated Debentures by extending the interest payment period from time to
time on the Junior Subordinated Debentures, which, if exercised, would defer
quarterly distributions on the Preferred Securities (though such distributions
would continue to accrue with interest since interest would continue to accrue
on the Junior Subordinated Debentures) during any such Extension Period. Such
right to extend the interest payment period for the Junior Subordinated
Debentures is limited to a period not exceeding 20 consecutive quarters and such
period may not extend beyond the Stated Maturity of the Junior Subordinated
Debentures. In the event that Fleet exercises this right, then (i) Fleet shall
not declare or pay any dividend on, make a distribution with respect to, or
redeem, purchase or acquire, or make a liquidation payment with respect to, any
of its capital stock (other than (a) purchases or acquisitions of shares of
Fleet Common Stock in connection with the satisfaction by Fleet of its
obligations under any employee benefit plans or any other contractual obligation
of Fleet (other than a contractual obligation ranking pari passu with or junior
to the Junior Subordinated Debentures), (b) as a result of a reclassification of
Fleet capital stock or the exchange or conversion of one class or series of
Fleet's capital stock for another class or series of Fleet capital stock or (c)
the purchase of fractional interests in shares of Fleet's capital stock pursuant
to the conversion or exchange provisions of such Fleet capital stock or the
security being converted or exchanged), (ii) Fleet shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by Fleet that rank pari passu with or junior to the
Junior Subordinated Debentures and (iii) Fleet shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Preferred
Securities Guarantee). Prior to the termination of any such Extension Period,
Fleet may further extend the interest payment period; provided, that such
Extension Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters or extend beyond the Stated
Maturity of the Junior Subordinated Debentures. Upon the termination of any
Extension Period and the payment of all amounts then due, Fleet may select a new
Extension Period, subject to the above requirements. If distributions are
deferred, the deferred distributions and accrued interest thereon shall be paid
to holders of record of the Preferred Securities as they appear on the books and
records of the Trust on the record date next following the termination of such
Extension Period. See "Risk Factors and Special Considerations Relating to the
Offer," "--Rights Under the Preferred Securities Guarantee" and "--Option to
Extend Interest Payment Period" and "Description of the Junior Subordinated
Debentures--Interest" and "--Option to Extend Interest Payment Period." If Fleet
elects to defer payments of interest on the Junior Subordinated Debentures by
extending the interest period thereon, distributions on the Preferred Securities
would also be deferred but the Trust would continue to accrue income (as OID) in
respect of the Junior Subordinated Debentures which would be taxable to
beneficial owners of Preferred Securities. As a result, beneficial owners of
Preferred Securities during an Extension Period would include their pro rata
share of such deferred interest in gross income in advance of the receipt of
cash. See "Risk Factors and Special Considerations Relating to the Offer--
Option to Extend Interest Payment Period."
If the Institutional Trustee shall be the sole holder of the Junior
Subordinated Debentures, Fleet shall give the Regular Trustees and the
Institutional Trustee notice of its selection of such Extension Period one
Business Day prior to the earlier of (i) the date distributions on the Preferred
Securities are payable or (ii) the date the Regular Trustees are required to
give notice to the NYSE (or other applicable self-regulatory organization) or to
holders of the Preferred Securities of the record date or the date such
distribution is payable. The Regular Trustees shall give notice of Fleet's
selection of such Extension Period to the holders of the Preferred Securities.
If the Institutional Trustee shall not be the sole holder of the Junior
Subordinated Debentures, Fleet shall give the holders of the Junior Subordinated
Debentures notice of its selection of such Extension Period ten Business Days
prior to the earlier of (i) the Interest Payment Date (as defined herein) or
(ii) the date upon which Fleet is required to give notice to the NYSE (or other
applicable self-regulatory organization) or to holders of the Junior
Subordinated Debentures of the record or payment date of such related interest
payment. See "Description of the Junior Subordinated Debentures--Option to
Extend Interest Payment Period."
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There will be deposited in the Trust as trust assets Junior Subordinated
Debentures having an aggregate principal amount equal to the aggregate stated
liquidation amount of (i) the Preferred Securities issued by the Trust in
exchange for the Depositary Shares accepted in the Offer and (ii) the amount of
proceeds received by the Trust from the sale of the Common Securities to Fleet.
Distributions on the Preferred Securities must be paid on the dates payable to
the extent that the Trust has funds available for the payment of such
distributions in the Institutional Account. The Trust's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received from Fleet on the Junior Subordinated Debentures. See
"Description of the Junior Subordinated Debentures." The payment of
distributions out of moneys held by the Trust is guaranteed by Fleet on a
subordinated basis as and to the extent set forth under "Description of the
Preferred Securities Guarantee." The Preferred Securities Guarantee covers
distributions and other payments on the Preferred Securities only if and to the
extent that Fleet has made a payment to the Trust of interest or principal on
the Junior Subordinated Debentures deposited in the Trust as trust assets. The
Preferred Securities Guarantee, when taken together with Fleet's obligations
under the Junior Subordinated Debentures, the Indenture and the Declaration,
including its obligation to pay costs, expenses and certain liabilities of the
Trust, constitutes a full and unconditional guarantee of amounts due on the
Preferred Securities.
The Junior Subordinated Debentures will mature on February 15, 2027, which
date may be shortened to a date not earlier than April 15, 2001 or extended to a
date not later than February 15, 2046 as provided herein. Moreover, the Junior
Subordinated Debentures are redeemable, in whole or in part, at any time on or
after April 15, 2001, or in whole but not in part, prior to April 15, 2001, upon
the occurrence of a Special Event. See "Description of the Junior Subordinated
Debentures--Optional Redemption." Upon the repayment of the Junior Subordinated
Debentures, whether at maturity or upon redemption, the proceeds from such
repayment or payment shall simultaneously be applied to redeem Trust Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Junior Subordinated Debentures so repaid or redeemed at the applicable
Redemption Price, plus accrued and unpaid distributions through the redemption
date; provided, that holders of Trust Securities shall be given not less than 30
nor more than 60 days' notice of such redemption. See "Description of the
Preferred Securities-- Special Event Redemption." In the event that fewer than
all of the outstanding Preferred Securities are to be redeemed, the Preferred
Securities will be redeemed pro rata as described under "Description of the
Preferred Securities--Book-Entry; Delivery and Form." Any such distribution or
redemption may require prior approval of the Federal Reserve Board if such
approval is then required under applicable law, rules, guidelines or policies.
If, at any time, a Special Event shall occur and be continuing, Fleet shall
have the right, upon not less than 30 and no more than 60 days notice, at its
option and subject to receipt of prior approval of the Federal Reserve Board if
such approval is then required under applicable law, rules, guidelines or
policies, to redeem the Junior Subordinated Debentures, in whole (but not in
part), for cash within 90 days following the occurrence of such Special Event at
the Special Event Prepayment Price, plus accrued interest thereon to the date of
prepayment. Following such redemption, all Trust Securities shall be redeemed by
the Trust at the Special Event Redemption Price, plus accrued and unpaid
distributions through the redemption date.
A "Special Event" means a Tax Event or a Regulatory Capital Event (each as
defined herein), as the case may be.
A "Tax Event" means that the Regular Trustees shall have received an opinion
of nationally recognized independent tax counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws or any regulations thereunder of the
United States or any political subdivision or taxing authority thereof or
therein, or (b) any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement or decision is announced on or after the date of
original issuance of the Junior Subordinated Debentures, there is more than an
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insubstantial risk that (i) the Trust is, or will be within 90 days of the date
of such opinion, subject to United States federal income tax with respect to
income received or accrued on the Junior Subordinated Debentures, (ii) interest
payable by Fleet on the Junior Subordinated Debentures is not, or within 90 days
of the date of such opinion will not be, deductible by Fleet, in whole or in
part, for United States federal income tax purposes, or (iii) the Trust is, or
will be within 90 days of the date of such opinion, subject to more than a DE
MINIMIS amount of other taxes, duties or other governmental charges.
A "Regulatory Capital Event" means that Fleet shall have received an opinion
of independent bank regulatory counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, or change (including any announced
prospective change) in the laws (or any regulations thereunder) of the United
States or any rules, guidelines or policies of the Federal Reserve Board or (b)
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the date of original
issuance of the Preferred Securities, the Preferred Securities do not
constitute, or within 90 days of the date thereof, will not constitute, Tier 1
capital (or its then equivalent); provided, however, that the distribution of
the Junior Subordinated Debentures in connection with the liquidation of the
Trust by Fleet and the treatment thereafter of the Junior Subordinated
Debentures as other than Tier 1 capital shall not in and of itself constitute a
Regulatory Capital Event unless such liquidation shall have occurred in
connection with a Tax Event.
See "Description of the Preferred Securities--Special Event Redemption."
Fleet will have the right at any time to liquidate the Trust and cause the
Junior Subordinated Debentures held by the Trust to be distributed to the
holders of the Trust Securities. If the Junior Subordinated Debentures are
distributed to the holders of the Preferred Securities, Fleet will use its best
efforts to have the Junior Subordinated Debentures listed on the NYSE or on such
other exchange as the Preferred Securities are then listed. See "Description of
the Preferred Securities--Distribution of the Junior Subordinated Debentures"
and "Description of the Junior Subordinated Debentures."
The Junior Subordinated Debentures will be issued pursuant to an Indenture,
dated as of December 11, 1996 (the "Base Indenture"), between Fleet and The
First National Bank of Chicago as Trustee (the "Debt Trustee"), as supplemented
by a Second Supplemental Indenture (the Base Indenture, as so supplemented, is
hereinafter referred to as the "Indenture"). See "Description of the Junior
Subordinated Debentures." The Junior Subordinated Debentures will bear interest
from the Accrual Date at an annual rate of 8.00%. Interest will be payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing on March 31, 1997; provided that, as described above, so long
as Fleet shall not be in default in the payment of interest on the Junior
Subordinated Debentures, Fleet shall have the right to extend the interest
payment period from time to time for a period not exceeding 20 consecutive
quarterly interest periods, provided that an Extension Period may not extend
beyond the Stated Maturity of the Junior Subordinated Debentures. Fleet has no
current intention of exercising its right to extend an interest payment period.
However, should Fleet determine to exercise such right in the future, the market
price of the Preferred Securities is likely to be affected. See "Risk Factors
and Special Considerations Relating to the Offer" and "Description of the Junior
Subordinated Debentures--Option to Extend Interest Payment Period."
The Junior Subordinated Debentures will also accrue interest at the rate of
7.25% per annum of the principal amount thereof from January 15, 1997 through
the Expiration Date, payable on March 31, 1997 to holders of the Junior
Subordinated Debentures on the record date for such distribution. No deferral of
interest will be permitted with respect to interest accruing from January 15,
1997 through the Expiration Date.
The obligations of Fleet under the Junior Subordinated Debentures are
subordinate and junior in right of payment to all present and future Senior
Indebtedness and Other Financial Obligations of Fleet and rank pari passu with
obligations to or rights of Fleet's other general unsecured creditors. No
payment may be made of the principal of, premium, if any, or interest on the
Junior Subordinated Debentures, or in
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respect of any redemption, retirement, purchase or other acquisition of any of
the Junior Subordinated Debentures, 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 Junior Subordinated Debentures or any
redemption, retirement, purchase or other acquisition of any of the Junior
Subordinated Debentures, permitting the holders of such Senior Indebtedness (or
a trustee on behalf of the holders thereof) to accelerate the maturity thereof.
As of September 30, 1996, Senior Indebtedness and Other Financial Obligations of
Fleet aggregated approximately $4.0 billion (holding company only). In addition,
because Fleet is a holding company, the Junior Subordinated Debentures are
effectively subordinated to all existing and future liabilities of Fleet's
subsidiaries, including depositors. There are no terms in the Preferred
Securities, the Junior Subordinated Debentures or the Preferred Securities
Guarantees that limit Fleet's ability to incur additional indebtedness,
including indebtedness which ranks senior to the Junior Subordinated Debentures
and the Preferred Securities Guarantee. See "Description of the Preferred
Securities Guarantee--Status of the Preferred Securities Guarantee" and
"Description of the Junior Subordinated Debentures--Subordination."
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The exchange of Depositary Shares for Preferred Securities pursuant to the
Offer will be a taxable event. Gain or loss generally will be recognized in an
amount equal to the difference between the fair market value on the Expiration
Date of the holder's pro rata share of the Junior Subordinated Debentures
represented by the Preferred Securities received in the exchange and the
exchanging holder's tax basis in the Depositary Shares surrendered. For this
purpose, the fair market value of the Junior Subordinated Debentures deemed
issued in exchange for Depositary Shares on the Expiration Date will equal the
fair market value of the Preferred Securities on that date. See "United States
Federal Income Taxation-- Exchange of Depositary Shares for Preferred
Securities."
Unlike dividends paid on Depositary Shares, distributions made on the
Preferred Securities are not eligible for the dividends received deduction for
corporate holders.
The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A holder who uses the accrual method of
accounting for tax purposes (and a cash method holder, if the Junior
Subordinated Debentures are deemed to have been issued with OID) and who
disposes of his Preferred Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest on
the Junior Subordinated Debentures through the date of disposition in income as
ordinary income (i.e., interest or, possibly, OID), and to add such amount to
his adjusted tax basis in his pro rata share of the underlying Junior
Subordinated Debentures deemed disposed of. To the extent the selling price is
less than the holder's adjusted tax basis (which will include all accrued but
unpaid interest) a holder will recognize a capital loss. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for United States federal income tax purposes.
If the issue price of Preferred Securities received by a holder exceeds the
liquidation amount of such Preferred Securities, such excess will be treated as
"amortizable bond premium." A holder which receives Preferred Securities with
amortizable bond premium may elect to deduct such amortizable bond premium over
the life of the Preferred Securities (i.e., 30 years) on an economic accrual
basis. Such deduction shall be applied against (and operate to reduce) the
amount of interest (or OID) taxable as ordinary income on the Preferred
Securities. A holder receiving Preferred Securities with amortizable bond
premium should consult its tax advisor with respect to the manner of making such
election. If the issue price of the Preferred Securities received by a holder is
less than the liquidation amount of such Preferred Securities by a de minimis
amount, a holder will be required to include such difference in income at the
time such Preferred Securities are redeemed.
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ACCOUNTING FOR EXCHANGE
The refinancing of the Preferred Stock with the Preferred Securities will
decrease Fleet's stockholders' equity and may increase or decrease earnings
applicable to common stockholders depending upon the difference between the fair
market value of the Preferred Stock represented by the Depositary Shares and the
liquidation price of the Preferred Stock at the time of the exchange. The
financial statements of the Trust will be consolidated into Fleet's consolidated
financial statements, with the Preferred Securities treated as minority interest
and shown in Fleet's balance sheet as "Company-Obligated Mandatorily Redeemable
Preferred Securities of Fleet Capital Trust I." The financial statement
footnotes of Fleet will reflect that the sole asset of the Trust will be the
Junior Subordinated Debentures. See "Capitalization" and "Accounting Treatment."
Holders of Depositary Shares who do not tender their Depositary Shares in the
Offer or whose Depositary Shares are not accepted for exchange will continue to
hold such Depositary Shares and will be entitled to all the rights and
preferences, and will be subject to all of the limitations, applicable thereto.
To the extent that Depositary Shares are tendered and accepted in the Offer,
the terms on which untendered Depositary Shares could subsequently be sold could
be adversely affected. See "Risk Factors and Special Considerations Relating to
the Offer--Reduced Trading Market for Depositary Shares."
EXCHANGE AGENT AND INFORMATION AGENT
Fleet National Bank has been appointed as Exchange Agent in connection with
the Offer. Questions and requests for assistance, requests for additional copies
of this Prospectus or a Letter of Transmittal and requests for Notices of
Guaranteed Delivery should be directed to Georgeson & Company Inc. which has
been retained by Fleet and the Trust to act as Information Agent for the Offer.
The addresses and telephone numbers of the Exchange Agent and the Information
Agent are set forth in "The Offer-- Exchange Agent and Information Agent" and on
the outside back cover of this Prospectus.
DEALER MANAGERS
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Smith Barney Inc.
have been retained as Dealer Managers in connection with the Offer. For
information regarding fees payable to the Dealer Managers and Soliciting Dealers
(as defined herein), see "The Offer--Dealer Managers; Soliciting Dealers."
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RISK FACTORS AND SPECIAL CONSIDERATIONS RELATING TO THE OFFER
Prospective exchanging holders of Depositary Shares who plan to participate
in the Offer should carefully consider, in addition to the other information set
forth elsewhere in this Prospectus, the following:
EXCHANGE OF DEPOSITARY SHARES FOR PREFERRED SECURITIES IS A TAXABLE EVENT
The exchange of Depositary Shares for Preferred Securities pursuant to the
Offer will be a taxable event. Generally, gain or loss will be recognized in an
amount equal to the difference between the fair market value on the Expiration
Date of the holder's pro rata share of the Junior Subordinated Debentures
represented by the Preferred Securities received in the exchange and the
exchanging holder's tax basis in the Depositary Shares exchanged therefor. See
"United States Federal Income Taxation--Exchange of Depositary Shares for
Preferred Securities." ALL HOLDERS OF DEPOSITARY SHARES ARE ADVISED TO CONSULT
THEIR TAX ADVISORS REGARDING THE UNITED STATES FEDERAL, STATE, LOCAL AND FOREIGN
TAX CONSEQUENCES OF THE EXCHANGE OF DEPOSITARY SHARES AND THE ISSUANCE OF
PREFERRED SECURITIES.
See "Price Range of Depositary Shares."
CORPORATE HOLDERS OF PREFERRED SECURITIES NOT ENTITLED TO DIVIDENDS RECEIVED
DEDUCTION
Unlike dividends paid on Depositary Shares, distributions on the Preferred
Securities are not eligible for the dividends received deduction for corporate
holders.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE PREFERRED SECURITIES GUARANTEE AND
JUNIOR SUBORDINATED DEBENTURES
Fleet's obligations under the Preferred Securities Guarantee are subordinate
and junior in right of payment to all liabilities of Fleet and rank pari passu
with the most senior preferred stock issued, if any, from time to time by Fleet.
The obligations of Fleet under the Junior Subordinated Debentures are
subordinate and junior in right of payment to all present and future Senior
Indebtedness and Other Financial Obligations of Fleet and rank pari passu with
obligations to or rights of Fleet's other general unsecured creditors. No
payment may be made of the principal of, premium, if any, or interest on the
Junior Subordinated Debentures, or in respect of any redemption, retirement,
purchase or other acquisition of any of the Junior Subordinated Debentures, 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 Junior Subordinated Debentures or any redemption, retirement, purchase or
other acquisition of any of the Junior Subordinated Debentures, permitting the
holders of such Senior Indebtedness (or a trustee on behalf of the holders
thereof) to accelerate the maturity thereof. As of September 30, 1996, Senior
Indebtedness and Other Financial Obligations of Fleet aggregated approximately
$4.0 billion (holding company only). In addition, because Fleet is a holding
company, the Junior Subordinated Debentures are effectively subordinated to all
existing and future liabilities of Fleet's subsidiaries, including depositors.
There are no terms in the Preferred Securities, the Junior Subordinated
Debentures or the Preferred Securities Guarantee that limit Fleet's ability to
incur additional indebtedness, including indebtedness which ranks senior to the
Junior Subordinated Debentures and the Preferred Securities Guarantee. See
"Description of the Preferred Securities Guarantee--Status of the Preferred
Securities Guarantee" and "Description of the Junior Subordinated
Debentures--Subordination" herein.
RIGHTS UNDER THE PREFERRED SECURITIES GUARANTEE
The Preferred Securities Guarantee will be qualified as an indenture under
the Trust Indenture Act. The First National Bank of Chicago will act as
Guarantee Trustee for the purposes of compliance with the
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provisions of the Trust Indenture Act. The Guarantee Trustee will hold the
Preferred Securities Guarantee for the benefit of the holders of the Preferred
Securities.
The Preferred Securities Guarantee guarantees to the holders of the
Preferred Securities the payment of (i) any accrued and unpaid distributions
that are required to be paid on the Preferred Securities, to the extent the
Trust has funds available therefor, (ii) the Redemption Price, including all
accrued and unpaid distributions with respect to Preferred Securities called for
redemption by the Trust, to the extent the Trust has funds available therefor,
and (iii) upon a voluntary or involuntary dissolution, winding-up or termination
of the Trust (other than in connection with the distribution of Junior
Subordinated Debentures to the holders of Preferred Securities or a redemption
of all the Preferred Securities), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on the Preferred
Securities to the date of the payment to the extent the Trust has funds
available therefor or (b) the amount of assets of the Trust remaining available
for distribution to holders of the Preferred Securities in liquidation of the
Trust. The holders of a majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee or to direct the
exercise of any trust or power conferred upon the Guarantee Trustee under the
Preferred Securities Guarantee. Notwithstanding the foregoing, any holder of
Preferred Securities may institute a legal proceeding directly against Fleet to
enforce such holder's rights under the Preferred Securities Guarantee without
first instituting a legal proceeding against the Trust, the Guarantee Trustee or
any other person or entity. If Fleet were to default on its obligation to pay
amounts payable on the Junior Subordinated Debentures or otherwise, the Trust
would lack available funds for the payment of distributions or amounts payable
on redemption of the Preferred Securities or otherwise, and, in such event,
holders of the Preferred Securities would not be able to rely upon the Preferred
Securities Guarantee for payment of such amounts. Instead, holders of the
Preferred Securities would rely on the enforcement (i) by the Institutional
Trustee of its rights as registered holder of the Junior Subordinated Debentures
against Fleet pursuant to the terms of the Junior Subordinated Debentures or
(ii) by such holder of its right against Fleet to enforce payments on the Junior
Subordinated Debentures. See "Description of the Preferred Securities Guarantee"
and "Description of the Junior Subordinated Debentures." The Declaration
provides that each holder of Preferred Securities, by acceptance thereof, agrees
to the provisions of the Preferred Securities Guarantee, including the
subordination provisions thereof, and the Indenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Declaration Event of Default occurs and is continuing, then the holders
of Preferred Securities would rely on the enforcement by the Institutional
Trustee of its rights as a holder of the Junior Subordinated Debentures against
Fleet. In addition, the holders of a majority in liquidation amount of the
Preferred Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Institutional Trustee
or to direct the exercise of any trust or power conferred upon the Institutional
Trustee under such Declaration, including the right to direct the Institutional
Trustee to exercise the remedies available to it as a holder of the Junior
Subordinated Debentures. If the Institutional Trustee fails to enforce its
rights under the Junior Subordinated Debentures, a holder of Preferred
Securities may institute a legal proceeding directly against Fleet to enforce
the Institutional Trustee's rights under the Junior Subordinated Debentures
without first instituting any legal proceeding against the Institutional Trustee
or any other person or entity. Notwithstanding the foregoing, if a Declaration
Event of Default has occurred and is continuing, and such event is attributable
to the failure of Fleet to pay interest or principal on the Junior Subordinated
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then a holder of Preferred
Securities may directly institute a proceeding for enforcement of payment to
such holder of the principal of or interest on the Junior Subordinated
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such holder (a "Direct Action") on or after the
respective due date specified in the Junior Subordinated Debentures. In
connection with
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such Direct Action, the right of Fleet, as holder of the Common Securities, will
be subrogated to the rights of such holder of Preferred Securities under the
Declaration to the extent of any payment made by Fleet to such holder of
Preferred Securities in such Direct Action. The holders of Preferred Securities
will not be able to exercise directly any other remedy available to the holders
of the Junior Subordinated Debentures. See "Description of the Preferred
Securities--Declaration Events of Default."
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Fleet has the right under the Indenture to defer payments of interest on the
Junior Subordinated Debentures by extending the interest payment period at any
time, and from time to time, on the Junior Subordinated Debentures. As a
consequence of such an extension, quarterly distributions on the Preferred
Securities would be deferred (but would continue to accrue, despite such
deferral, with interest thereon compounded quarterly) by the Trust during any
such Extension Period. Such right to extend the interest payment period for the
Junior Subordinated Debentures is limited to a period not exceeding 20
consecutive quarters, but no such Extension Period may extend beyond the Stated
Maturity of the Junior Subordinated Debentures. During any Extension Period, (i)
Fleet shall not declare or pay any dividend on, or make a distribution with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock (other than (a) purchases or acquisitions
of shares of the Fleet Common Stock in connection with the satisfaction by Fleet
of its obligations under any employee benefit plans or any other contractual
obligation of Fleet (other than a contractual obligation ranking pari passu with
or junior to the Junior Subordinated Debentures), (b) as a result of a
reclassification of Fleet's capital stock or the exchange or conversion of one
class or series of Fleet's capital stock for another class or series of Fleet
capital stock or (c) the purchase of fractional interests in shares of Fleet's
capital stock pursuant to the conversion or exchange provisions of such Fleet
capital stock or the security being converted or exchanged), (ii) Fleet shall
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by Fleet that rank pari passu
with or junior to the Junior Subordinated Debentures and (iii) Fleet shall not
make any guarantee payments with respect to the foregoing (other than pursuant
to the Preferred Securities Guarantee). Prior to the termination of any such
Extension Period, Fleet may further extend the interest payment period;
provided, that such Extension Period, together with all such previous and
further extensions thereof, may not exceed 20 consecutive quarters or extend
beyond the Stated Maturity of the Junior Subordinated Debentures. Upon the
termination of any Extension Period and the payment of all amounts then due,
Fleet may commence a new Extension Period, subject to the above requirements.
See "Description of the Preferred Securities-- Distributions" and "Description
of the Junior Subordinated Debentures--Option to Extend Interest Payment
Period."
Should Fleet exercise its right to defer payments of interest by extending
the interest payment period, each holder of Preferred Securities will be
required to accrue income (as OID) in respect of the deferred stated interest
allocable to its Preferred Securities for United States federal income tax
purposes, which will be allocated but not distributed to holders of record of
Preferred Securities. As a result, each such holder of Preferred Securities will
recognize income relating to such deferred interest for United States federal
income tax purposes in advance of the receipt of cash and will not receive from
the Trust the cash related to such income if such holder disposes of its
Preferred Securities prior to the record date for the date on which
distributions of such amounts are made. Fleet has no current intention of
exercising its right to defer payments of interest by extending the interest
payment period on the Junior Subordinated Debentures. However, should Fleet
determine to exercise such right in the future, the market price of the
Preferred Securities is likely to be affected. A holder that disposes of its
Preferred Securities during an Extension Period, therefore, might not receive
the same return on its investment as a holder that continues to hold its
Preferred Securities. In addition, as a result of the existence of Fleet's right
to defer interest payments, the market price of the Preferred Securities (which
represent an undivided beneficial interest in the Junior Subordinated
Debentures) may be more volatile than other securities on which OID accrues that
do not have such rights. See "United States Federal Income Taxation--Sales of
Preferred Securities."
25
<PAGE>
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed certain tax law changes that
would, among other things, generally deny corporate issuers a deduction for
interest in respect of certain debt obligations, such as the Junior Subordinated
Debentures, issued on or after December 7, 1995 (the "Proposed Legislation") if
such debt obligations have a maximum term in excess of forty years or a maximum
term in excess of twenty years and are not shown as indebtedness on the issuer's
applicable consolidated balance sheet. On March 29, 1996, Senate Finance
Committee Chairman William V. Roth, Jr. and House Ways and Means Committee
Chairman Bill Archer issued a joint statement (the "Joint Statement") indicating
their intent that the Proposed Legislation, if adopted by either of the
tax-writing committees of Congress, would have an effective date that is no
earlier than the date of "appropriate Congressional action." In addition,
subsequent to the publication of the Joint Statement, Senator Daniel Patrick
Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote letters
to Treasury Department officials concurring with the view expressed in the Joint
Statement (the "Democrat Letters"). If the principles contained in the Joint
Statement and the Democrat Letters were followed and if the Proposed Legislation
were enacted, such legislation would not apply to the Junior Subordinated
Debentures. There can be no assurance, however, that the effective date guidance
contained in the Joint Statement will be incorporated into the Proposed
Legislation, if enacted, or that other legislation enacted after the date hereof
will not otherwise adversely affect the ability of Fleet to deduct the interest
payable on the Junior Subordinated Debentures. Accordingly, there can be no
assurance that a Tax Event will not occur. The occurrence of a Tax Event may
result in the redemption of the Junior Subordinated Debentures for cash, in
which event the holders of the Preferred Securities would receive cash in
redemption of their Preferred Securities. See "Description of the Preferred
Securities--Special Event Redemption."
REDEMPTION OR DISTRIBUTION OF THE JUNIOR SUBORDINATED DEBENTURES
Fleet will have the right at any time to terminate the Trust and, after
satisfaction of claims of creditors as provided by applicable law, to cause the
Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities. See "Description of the Preferred Securities--Distribution of the
Junior Subordinated Debentures." In certain circumstances, Fleet shall have the
right to redeem the Junior Subordinated Debentures, in whole or in part, in
which event the Trust will redeem the Trust Securities on a pro rata basis to
the same extent as the Junior Subordinated Debentures are redeemed by Fleet. Any
such distribution or redemption may require prior approval of the Federal
Reserve Board if then required under applicable law, rules, guidelines or
policies. See "Description of the Preferred Securities--Special Event
Redemption."
Under current United States federal income tax law, a distribution of Junior
Subordinated Debentures upon the dissolution of the Trust would not be a taxable
event to holders of the Preferred Securities. If, however, the Trust is
characterized for United States federal income tax purposes as an association
taxable as a corporation at the time of dissolution of the Trust, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to holders of Preferred Securities. Moreover, upon the occurrence of a Tax
Event, a dissolution of the Trust in which holders of the Preferred Securities
receive cash would be a taxable event to such holders. See "United States
Federal Income Taxation--Receipt of Junior Subordinated Debentures or Cash Upon
Liquidation of the Trust."
There can be no assurance as to the market prices for the Preferred
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for Preferred Securities if a dissolution or liquidation of the Trust
were to occur. Accordingly, the Preferred Securities or the Junior Subordinated
Debentures may trade at a discount to the price that the investor paid to
purchase the Preferred Securities offered hereby. Because holders of Preferred
Securities may receive Junior Subordinated Debentures, prospective exchanging
holders are also making an investment decision with regard to the Junior
26
<PAGE>
Subordinated Debentures and should carefully review all the information
regarding the Junior Subordinated Debentures contained herein. See "Description
of the Preferred Securities--Special Event Redemption" and "Description of the
Junior Subordinated Debentures--General."
SHORTENING OR EXTENDING THE STATED MATURITY OF THE JUNIOR SUBORDINATED
DEBENTURES
Fleet will have the right at any time to shorten the maturity of the Junior
Subordinated Debentures to a date not earlier than April 15, 2001. The exercise
of such right may require the prior approval of the Federal Reserve Board if
such approval is then required under applicable law, rules, guidelines or
policies.
Fleet will also have the right to extend the maturity of the Junior
Subordinated Debentures to a date no later than February 15, 2046, so long as at
the time such election is made and at the time such extension commences (i)
Fleet is not in bankruptcy, otherwise insolvent or in liquidation, (ii) Fleet is
not in default in the payment of any interest or principal on the Junior
Subordinated Debentures, (iii) the Trust is not in arrears on payments of
distributions on the Preferred Securities and no deferred distributions on the
Preferred Securities are accumulated and (iv) the Junior Subordinated
Debentures, or, if the Preferred Securities are rated, the Preferred Securities,
are rated at least BBB- by Standard & Poor's Ratings Services, at least Baa3 by
Moody's Investors Service, Inc. or at least the equivalent by any other
nationally recognized statistical rating organization.
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and will not
be entitled to vote to appoint, remove or replace, or to increase or decrease
the number of, Trustees, which voting rights are vested exclusively in the
holder of the Common Securities. See "Description of the Preferred Securities--
Voting Rights."
Holders of Depositary Shares also have limited voting rights. However, in
the event that dividends on any series of preferred stock, including the
Preferred Stock, are in arrears and unpaid for six quarterly dividend periods,
whether or not consecutive, the Fleet Board is required to be increased by two
directors and the holders of Preferred Stock, together with the holders of all
other series of preferred stock then entitled to vote thereon, would be entitled
to elect two directors of the expanded Fleet Board with certain exceptions. See
"Description of the Preferred Stock and Depositary Shares--Preferred
Stock--Voting Rights."
TRADING PRICE
The Preferred Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying Junior
Subordinated Debentures. A holder who uses the accrual method of accounting for
tax purposes (and a cash method holder, if the Junior Subordinated Debentures
are deemed to have been issued with OID) and who disposes of his Preferred
Securities between record dates for payments of distributions thereon will be
required to include accrued but unpaid interest on the Junior Subordinated
Debentures through the date of disposition in income as ordinary income (i.e.,
interest or, possibly, OID), and to add such amount to his adjusted tax basis in
his pro rata share of the underlying Junior Subordinated Debentures deemed
disposed of. To the extent the selling price is less than the holder's adjusted
tax basis (which will include all accrued but unpaid interest), a holder will
recognize a capital loss. Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States federal income tax
purposes. See "United States Federal Income Taxation--Interest Income and
Original Issue Discount" and "--Sales of Preferred Securities."
CONSEQUENCES OF HIGHLY LEVERAGED TRANSACTION
The Indenture does not contain provisions that afford holders of the Junior
Subordinated Debentures protection in the event of a highly leveraged
transaction, including a change of control, or other similar
27
<PAGE>
transactions involving Fleet that may adversely affect such holders. See
"Description of the Junior Subordinated Debentures--General."
LACK OF ESTABLISHED TRADING MARKET FOR PREFERRED SECURITIES
The Preferred Securities constitute a new issue of securities of the Trust
with no established trading market. While application will be made to list the
Preferred Securities on the NYSE, there can be no assurance that an active
market for the Preferred Securities will develop or be sustained in the future
on such exchange. Although the Dealer Managers have indicated to Fleet and the
Trust that they intend to make a market in the Preferred Securities following
the Expiration Date, as permitted by applicable laws and regulations prior to
the commencement of trading on the NYSE, they are not obligated to do so and may
discontinue any such market-making at any time without notice. Accordingly, no
assurance can be given as to the liquidity of, or trading markets for, the
Preferred Securities. In order to satisfy the NYSE listing requirements,
acceptance of Depositary Shares validly tendered in the Offer is subject to the
Minimum Distribution Condition which condition may not be waived by Fleet or the
Trust. See "Listing and Trading of Preferred Securities and Depositary Shares."
REDUCED TRADING MARKET FOR DEPOSITARY SHARES
To the extent Depositary Shares are tendered and accepted in the Offer, the
liquidity and trading market for the Depositary Shares to be outstanding
following the Offer, and the terms upon which such Depositary Shares could be
sold, could be adversely affected. In addition, if the Offer is substantially
subscribed, there would be a significant risk that round lot holdings of the
Depositary Shares outstanding following the Offer would be limited. Further,
following the Expiration Date, and in accordance with and subject to applicable
law, Fleet may from time to time acquire Depositary Shares in the open market,
by tender offer, subsequent exchange offer or otherwise. Fleet's decision to
make such acquisitions is dependent on many factors, including market conditions
in effect at the time of any contemplated acquisition. Accordingly, Fleet cannot
predict whether and to what extent it will acquire any additional Depositary
Shares and the consideration to be paid therefor. See "Listing and Trading of
Preferred Securities and Depositary Shares."
Under the rules of the NYSE, preferred securities such as the Depositary
Shares are subject to delisting if (i) the aggregate value of publicly-held
shares is less than $2 million and (ii) the number of publicly-held shares is
less than 100,000. There can be no assurance that the Depository Shares will
continue to meet the NYSE listing standards following the Offer.
28
<PAGE>
COMPARISON OF PREFERRED SECURITIES AND DEPOSITARY SHARES
The following is a brief summary of certain terms of the Preferred
Securities and the Depositary Shares. For a more complete description of the
Preferred Securities, see "Description of the Preferred Securities." For a
description of the Junior Subordinated Debentures which will be deposited in the
Trust as trust assets and will represent the sole source for the payment of
distributions and other payments on the Preferred Securities, see "Description
of the Junior Subordinated Debentures." For a description of the Depositary
Shares, see "Description of the Preferred Stock and Depositary Shares."
<TABLE>
<CAPTION>
PREFERRED SECURITIES DEPOSITARY SHARES/PREFERRED STOCK
-------------------------------------------- --------------------------------------------
<S> <C> <C>
Issuer............... The Trust. Payment of distributions and on Fleet.
liquidation or redemption is guaranteed on a
subordinated basis, as and to the extent
described herein, by Fleet.
Distribution/
Dividend Rate........ 8.00% per annum distribution, payable 7.25% per annum dividend payable on the
quarterly in arrears on March 31, June 30, Preferred Stock on January 15, April 15,
September 30 and December 31 of each year, July 15 and October 15 of each year, in each
commencing March 31, 1997 from and including case out of funds legally available
the Accrual Date, but only if and to the therefor, when, as and if declared by the
extent that interest payments are made in Fleet Board. Dividends are cumulative.
respect of the Junior Subordinated Dividends accrue whether or not Fleet has
Debentures held by the Trust. earnings, whether or not there are funds
In addition, holders of Preferred Securities legally available for the payment of such
will be entitled to an additional cash dividends and whether or not such dividends
distribution at the rate of 7.25% per annum are declared. Fleet has made each quarterly
of the liquidation amount thereof from dividend payment with respect to the
January 15, 1997 through the Expiration Date Depositary Shares on the scheduled dividend
in lieu of dividends accumulating and unpaid payment date.
from January 15, 1997 on their Depositary
Shares accepted for exchange, such
additional distribution to be made on March
31, 1997 to holders of the Preferred
Securities on the record date for such
distribution.
Interest Accrual..... During any Extension Period on the Junior Accrued but unpaid dividends do not bear
Subordinated Debentures, distribution interest.
payments on the Preferred Securities will
not be made but would continue to accrue,
and, in the case of distributions in
arrears, would bear interest at the rate of
8.00% per annum, compounded quarterly to the
extent permitted by applicable law.
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
PREFERRED SECURITIES DEPOSITARY SHARES/PREFERRED STOCK
-------------------------------------------- --------------------------------------------
<S> <C> <C>
Maturity/ Mandatory
and
Optional
Redemption........... The Preferred Securities will be redeemed No maturity or mandatory redemption. The
upon the maturity or earlier redemption of Depositary Shares are redeemable at the
the Junior Subordinated Debentures, at a option of Fleet on and after April 15, 2001,
redemption price equal to $25 per Preferred in whole or in part, at a redemption price
Security to be redeemed upon maturity or the equivalent to $25 per Depositary Share to be
applicable Redemption Price per Preferred redeemed, plus accrued and unpaid dividends
Security to be redeemed upon earlier thereon to the date fixed for redemption.
redemption, plus any accrued and unpaid Holders of Depositary Shares have no right
distributions to the redemption date, to require Fleet to redeem the Depositary
including distributions accrued as a result Shares.
of Fleet's election to defer payments of
interest on the Junior Subordinated
Debentures. The Junior Subordinated
Debentures are redeemable by Fleet, in whole
or in part, from time to time on or after
April 15, 2001, or, in whole but not in
part, prior to April 15, 2001, upon the
occurrence of a Special Event, in each case
at the applicable Prepayment Price plus
accrued and unpaid interest thereon to the
redemption date. In the event that the
Junior Subordinated Debentures are redeemed
or upon the repayment of the Junior
Subordinated Debentures, upon maturity, upon
redemption or otherwise, the proceeds
thereof will be promptly applied to redeem
the Preferred Securities and the Common
Securities. The Junior Subordinated
Debentures mature on February 15, 2027,
which date may be shortened or extended as
provided herein, in each case subject to
certain conditions. See "Description of the
Preferred Securities--Mandatory Redemption"
and "--Special Event Redemption." Holders of
Preferred Securities have no right to
require Fleet to redeem the Preferred
Securities at the option of the holders.
Subordination........ Subordinated to claims of creditors of the Subordinated to claims of creditors of Fleet
Trust, if any. The Preferred Securities and including the Junior Subordinated
the Common Securities Debentures, PARI PASSU
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
PREFERRED SECURITIES DEPOSITARY SHARES/PREFERRED STOCK
-------------------------------------------- --------------------------------------------
will have equivalent terms; provided that with Fleet's other preferred stock and
(i) if a Declaration Event of Default occurs senior to all other shares of capital stock
and is continuing, the holders of the of Fleet.
Preferred Securities will have a priority
over holders of the Common Securities with
respect to payments in respect of
distributions and payments upon liquidation,
redemption or otherwise and (ii) holders of
Common Securities have the exclusive right
(subject to the terms of the Declaration) to
appoint, remove or replace Trustees and to
increase or decrease the number of Trustees.
<S> <C> <C>
The Trust is not permitted to issue any
securities other than the Trust Securities
or to incur any indebtedness. Fleet will pay
all fees and expenses related to the Trust
and the offering of the Trust Securities.
The Junior Subordinated Debentures will rank
subordinate and junior to all present and
future Senior Indebtedness and Other
Financial Obligations of Fleet, pari passu
with Fleet's other general unsecured
creditors and senior to all capital stock
now or hereafter issued by Fleet and to any
guarantee now or hereafter entered into by
Fleet in respect of any of its capital
stock.
As of September 30, 1996, Fleet had Senior
Indebtedness and Other Financial Obligations
of approximately $4.0 billion (holding
company only). In addition, because Fleet is
a holding company, the Junior Subordinated
Debentures are effectively subordinated to
all existing and future liabilities of
Fleet's subsidiaries, including depositors.
Listing.............. Application will be made to list the The Depositary Shares are listed on the NYSE
Preferred Securities on the NYSE under the under the symbol "FLT F."
symbol "FLT pfH." In order to satisfy the
NYSE listing requirements, acceptance of
Depositary Shares validly tendered in the
Offer is subject to the Minimum Distribution
Condition, which condition may not be
waived.
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
PREFERRED SECURITIES DEPOSITARY SHARES/PREFERRED STOCK
-------------------------------------------- --------------------------------------------
<S> <C> <C>
Dividends Received
Deduction............ Distributions on the Preferred Securities Dividends are eligible for the dividends
are not eligible for the dividends received received deduction for corporate holders.
deduction for corporate holders.
Voting Rights/
Enforcement.......... Holders of Preferred Securities have no If dividends shall be in arrears for six
voting rights other than as provided under quarterly dividend periods, whether or not
the Business Trust Act or the Trust consecutive, the Fleet Board shall be
Indenture Act, except in the limited increased by two directors and holders have
circumstances discussed below. The the right (together with other classes or
Institutional Trustee has the power to series of preferred stock ranking on a
exercise all rights under the Indenture with parity with the Preferred Stock either as to
respect to the Junior Subordinated dividends or on the distribution of assets
Debentures and is also authorized to enforce upon liquidation with similar rights) to
the Preferred Securities Guarantee on behalf elect two directors.
of holders of the Preferred Securities. If
the Trust's failure to make distributions is
a consequence of Fleet's exercise of its
right to extend the interest payment period
for the Junior Subordinated Debentures as
described under "Description of the
Preferred Securities--Distributions," the
Institutional Trustee will have no right to
enforce the payment of distributions until a
Declaration Event of Default shall have
occurred. Until such Declaration Events of
Default with respect to the Preferred
Securities have been cured, waived or
otherwise eliminated, the Institutional
Trustee will be deemed to be acting solely
on behalf of the holders of the Preferred
Securities and only the holders of the
Preferred Securities will have the right to
direct the Institutional Trustee with
respect to certain matters under the
Declaration, and therefore the Indenture. If
the Institutional Trustee fails to enforce
its rights under the Junior Subordinated
Debentures after a holder of Preferred
Securities has made a written request, such
holder of record of Preferred Securities may
institute a legal proceeding against Fleet
to enforce the Institutional
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
PREFERRED SECURITIES DEPOSITARY SHARES/PREFERRED STOCK
-------------------------------------------- --------------------------------------------
<S> <C>
Trustee's rights under the Junior
Subordinated Debentures without first
instituting any legal proceeding against the
Institutional Trustee or any other person or
entity. Notwithstanding the foregoing, if a
Declaration Event of Default has occurred
and is continuing and such event is
attributable to the failure of Fleet to pay
interest or principal on the Junior
Subordinated Debentures on the date such
interest or principal is otherwise payable
(or in the case of redemption, the
redemption date), then a holder of Preferred
Securities may institute a Direct Action for
enforcement of payment to such holder
directly of the principal of, or interest
on, Junior Subordinated Debentures having a
principal amount equal to the aggregate
liquidation amount of the Preferred
Securities of such holder on or after the
respective due date specified in the Junior
Subordinated Debentures. See "Description of
the Preferred Securities," "Description of
the Preferred Securities Guarantee" and
"Description of the Junior Subordinated
Debentures".
</TABLE>
33
<PAGE>
FLEET FINANCIAL GROUP, INC.
GENERAL
Fleet is a diversified financial services company organized under the laws
of the State of Rhode Island. Fleet was the 11th largest bank holding company in
the United States as of September 30, 1996, in terms of total assets, with total
assets of $87.2 billion, total deposits of $67.6 billion and stockholders'
equity of $7.3 billion.
Fleet is engaged in a general commercial banking and trust business
throughout the states of Connecticut, Massachusetts, New Jersey, New York, Rhode
Island, Maine, New Hampshire and Florida through its six banking subsidiaries,
and also provides, through its nonbanking subsidiaries and its credit card
banking subsidiary, a variety of financial services, including mortgage banking,
asset-based lending, consumer finance, real estate financing, securities
brokerage services, investment banking, investment advice and management, data
processing and student loan servicing.
The principal office of Fleet is located at One Federal Street, Boston,
Massachusetts 02110, telephone number (617) 292-2000.
HOLDING COMPANY
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 (including depositors
in the case of banking subsidiaries) 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 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 September 30, 1996, Fleet's banking subsidiaries could have
declared additional dividends of approximately $399 million. 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 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 amended the federal bankruptcy laws to provide that in the
event of the bankruptcy of Fleet, any commitment by Fleet to its regulators to
maintain the capital of a banking subsidiary would be assumed by the bankruptcy
trustee and entitled to a priority of payment.
34
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
FLEET FINANCIAL GROUP, INC.
The following unaudited consolidated summary sets forth selected financial
data for Fleet and its subsidiaries for the nine months ended September 30, 1996
and 1995 and for each of the years in the five-year period ending December 31,
1995. The following summary should be read in conjunction with the financial
information incorporated herein by reference to other documents. See
"Incorporation of Certain Documents by Reference". The summary for the nine
months ended September 30, 1996 and 1995 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 nine months ended September
30, 1996 are not necessarily indicative of the results expected for 1996 or any
other interim period. All per share information shown below has been adjusted to
reflect stock splits and stock dividends as applicable.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
<S> <C> <C>
1996 1995
----------- -----------
<CAPTION>
(DOLLARS IN
MILLIONS,
EXCEPT PER
SHARE DATA)
<S> <C> <C>
Consolidated Summary of
Operations:
Interest income (fully
taxable equivalent)....... $4,379 $4,562
Interest expense............ 1,850 2,244
Net interest income......... 2,529 2,318
Provision for credit
losses.................... 148 75
Net interest income after
provision for credit
losses.................... 2,381 2,243
Noninterest income.......... 1,624 1,329
Noninterest expense......... 2,556 2,311
Net income (loss)........... 836 748
Earnings (loss) per common
share:
Fully diluted............... $2.91 $2.69
Weighted average fully
diluted shares
outstanding............... 269,259,878 267,644,122
Book value per common
share..................... $23.90 $24.47
Cash dividends declared per
common share.............. 1.29 1.20
Common dividends declared as
a percentage of earnings
per share................. 44.4% 44.6%
Ratio of Earnings to Fixed
Charges:
Excluding interest on
deposits.................. 3.41x 2.21x
Including interest on
deposits.................. 1.75 1.54
Ratio of Earnings to Fixed
Charges and Dividends on
Preferred Stock:
Excluding interest on
deposits.................. 3.10 2.16
Including interest on
deposits.................. 1.72 1.53
Consolidated Balance Sheet--
Average Balances:
Total Assets................ $82,220 $82,425
Securities held to
maturity(c)............... 980 8,504
Securities available for
sale(c)................... 10,836 12,476
Loans and leases, net of
unearned income........... 55,004 50,563
Interest-bearing deposits... 46,489 42,930
Short-term borrowings....... 6,497 14,355
Long-term debt/subordinated
notes and debentures...... 5,669 6,365
Dual Convertible Preferred
Stock..................... -- --
Stockholders' Equity........ 6,905 6,468
Consolidated Ratios:
Net interest margin (fully
taxable equivalent)....... 4.75% 4.18%
Return (loss) on average
assets.................... 1.36 1.21
Return (loss) on average
common stockholders'
equity.................... 17.34(d) 16.65(d)
Average stockholders' equity
to average assets......... 8.40 7.85
Tier 1 risk-based capital
ratio..................... 7.13 8.36
Total risk-based capital
ratio..................... 10.91 12.20
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
----------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Consolidated Summary of
Operations:
Interest income (fully
taxable equivalent)....... $6,069 $5,260 $5,086 $5,318 $5,425
Interest expense............ 3,005 2,161 1,917 2,337 3,142
Net interest income......... 3,064 3,099 3,169 2,981 2,283
Provision for credit
losses.................... 101 65 327 728 995
Net interest income after
provision for credit
losses.................... 2,963 3,034 2,842 2,253 1,288
Noninterest income.......... 1,850 1,555 1,883 1,897 1,627
Noninterest expense......... 3,735 3,145 3,579 3,479 2,864
Net income (loss)........... 610(a) 849 817(b) 366(b) (76)
Earnings (loss) per common
share:
Fully diluted............... $1.57(a) $3.09 $3.03(b) $1.40(b) $(0.44)
Weighted average fully
diluted shares
outstanding............... 265,886,363 264,828,469 257,373,073 237,116,784 204,024,214
Book value per common
share..................... $22.71 $20.68 $21.76 $17.65 $16.81
Cash dividends declared per
common share.............. 1.63 1.40 1.025 0.825 0.80
Common dividends declared as
a percentage of earnings
per share................. 103.8% 45.3% 33.8% 58.9% --(g)
Ratio of Earnings to Fixed
Charges:
Excluding interest on
deposits.................. 1.78x 2.33x 2.36x 1.90x --(e)
Including interest on
deposits.................. 1.34 1.62 1.56 1.26 --(e)
Ratio of Earnings to Fixed
Charges and Dividends on
Preferred Stock:
Excluding interest on
deposits.................. 1.74 2.27 2.27 1.82 --(f)
Including interest on
deposits.................. 1.33 1.61 1.54 1.25 --(f)
Consolidated Balance Sheet--
Average Balances:
Total Assets................ $82,727 $79,561 $75,286 $71,633 $65,099
Securities held to
maturity(c)............... 7,736 8,787 7,735 4,300 12,358
Securities available for
sale(c)................... 12,779 16,923 14,140 14,061 1,597
Loans and leases, net of
unearned income........... 51,043 44,102 43,283 43,029 40,986
Interest-bearing deposits... 43,120 40,113 39,766 42,031 40,867
Short-term borrowings....... 14,046 15,355 12,807 8,848 6,520
Long-term debt/subordinated
notes and debentures...... 6,581 5,383 5,039 4,116 3,947
Dual Convertible Preferred
Stock..................... -- -- -- 283 134
Stockholders' Equity........ 6,545 5,782 5,311 4,118 3,596
Consolidated Ratios:
Net interest margin (fully
taxable equivalent)....... 4.12% 4.30% 4.63% 4.57% 3.85%
Return (loss) on average
assets.................... 0.74(a) 1.07 1.09(b) 0.51(b) (0.12)
Return (loss) on average
common stockholders'
equity.................... 9.32(a)(d) 15.66(d) 17.11(b) 9.12(b) (2.73)
Average stockholders' equity
to average assets......... 7.91 7.27 7.05 6.14 5.52
Tier 1 risk-based capital
ratio..................... 7.62 9.14 10.44 9.89 7.38
Total risk-based capital
ratio..................... 11.29 12.92 14.89 14.61 11.27
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
1996 1995
----------- -----------
(DOLLARS IN
MILLIONS,
EXCEPT PER
SHARE DATA)
<S> <C> <C>
Period-end reserve for
credit losses to
period-end loans and
leases, net of unearned
income.................... 2.58% 2.76%
Net charge-offs to average
loans and leases, net of
unearned income........... 0.60 0.55
Period-end nonperforming
assets to period-end loans
and leases, net of
unearned income, and other
real estate owned 1.26(h) 1.47
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------
1995 1994 1993 1992 1991
----------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Period-end reserve for
credit losses to
period-end loans and
leases, net of unearned
income.................... 2.56% 3.25% 3.82% 4.43% 4.73%
Net charge-offs to average
loans and leases, net of
unearned income........... 0.59 0.54 1.35 2.15 2.02
Period-end nonperforming
assets to period-end loans
and leases, net of
unearned income, and other
real estate owned 0.97(h) 1.65 2.35 4.53 7.05
</TABLE>
- ------------------------
(a) Includes impact of the loss on assets held for sale or accelerated
disposition ($175 million pretax) and merger-related charges ($490 million
pretax) recorded in 1995. Excluding these special charges, return on average
common stockholders' equity and return on average assets would have been
16.29% and 1.26%, respectively, while net income and earnings per share
would have been $1,039 million and $3.77, respectively.
(b) Includes impact of cumulative effect of change in accounting method of $53
million in 1993 and extraordinary credit of $18 million in 1992.
(c) For a discussion of Fleet's reclassification in 1992 of its "securities held
to maturity" to "securities held for sale", see Fleet's Current Report on
Form 8-K dated October 21, 1992. Effective January 1, 1994, Fleet adopted
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. In connection with the adoption
of FASB Statement No. 115, Fleet transferred securities netting to $345
million from the held to maturity portfolio to the available for sale
portfolio. During the fourth quarter of 1995, Fleet reclassified
substantially all of its securities held to maturity to securities available
for sale as the FASB permitted a one-time opportunity for institutions to
reassess the appropriateness of the designations of all securities.
(d) Fleet's return on average common stockholders' equity 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 would have been 17.29%, 16.46%, 9.25% and 15.35%,
respectively, for the nine months ended September 30, 1996 and 1995 and the
years ended December 31, 1995 and 1994.
(e) Fixed charges exceeded earnings by $16 million for both the ratio excluding
and including interest on deposits.
(f) The sum of fixed charges and dividends exceeded earnings by $16 million for
both the ratio excluding and including interest on deposits.
(g) For the year ended December 31, 1991, Fleet reported a $76 million net loss
and therefore the ratio is not applicable.
(h) Excludes $287 million and $317 million of nonperforming assets reclassified
to held for sale or accelerated disposition at September 30, 1996 and
December 31, 1995, respectively. Including the $287 million and $317
million, the ratios would have been 1.74% and 1.58% at September 30, 1996
and December 31, 1995, respectively.
36
<PAGE>
RECENT DEVELOPMENTS
Fleet reported net income of $295 million for the third quarter of 1996, or
$1.02 per common share, an increase of 10%, compared to $268 million, or $0.96
per common share, earned in the third quarter of 1995. Return on average assets
and return on average common equity for the third quarter of 1996 were 1.35% and
17.83%, respectively, as compared to 1.27% and 16.86%, respectively, for the
third quarter of 1995. Earnings for the first nine months of 1996 were $836
million, or $2.91 per common share, an increase of 12%, compared to $748
million, or $2.69 per common share, for the first nine months of 1995.
Net interest income totaled $934 million during the third quarter of 1996,
an increase of $70 million from the second quarter of 1996 and $162 million from
the third quarter of 1995. The increase in net interest income is primarily
attributable to the inclusion of the NatWest franchise as a result of the
acquisition of National Westminster Bancorp, Inc. ("NatWest") in May 1996 (the
"NatWest Acquisition"), as well as an increase of 25 basis points in net
interest margin to 5.01%, as compared to 4.76% for the second quarter of 1996,
reflecting the NatWest Acquisition, which added higher yielding loans and lower
cost core deposits.
The provision for credit losses in the third quarter of 1996 was $65
million, compared to $48 million in the second quarter of 1996 and $27 million
for the third quarter of 1995. The increase in the provision is primarily
attributable to an increase in charge-offs as a result of the additional loans
from NatWest, coupled with increased charge-offs in the credit card portfolio.
Net charge-offs for the third quarter of 1996 were $110 million, compared to $71
million for the third quarter of 1995. Nonperforming assets increased by $14
million in the third quarter of 1996 to $759 million from $745 million in the
second quarter of 1996. The reserve for loan losses was $1.5 billion, $1.6
billion and $1.4 billion at September 30, 1996, June 30, 1996 and September 30,
1995, respectively. The reserve for loan losses represented 2.6%, 2.7% and 2.8%
of loans at September 30, 1996, June 30, 1996 and September 30, 1995,
respectively.
Noninterest income in the third quarter of 1996 totaled $555 million, an
increase of $107 million, or 24%, over the third quarter of 1995. This increase
in noninterest income is primarily attributable to a $76 million contribution
from NatWest and a 7% revenue increase in Fleet's business lines. Revenues
during the third quarter of 1996 at Fleet Private Equity, Fleet's venture
capital business, increased $28 million to $41 million as compared to the same
period of the prior year due to increasing values in equity capital investments
managed. Investment management revenue increased by $13 million, or 16%, from
the third quarter of 1995 to the third quarter of 1996 due to growth in the
levels of managed assets fueled by the strong equity market. Student loan
servicing revenue during the third quarter of 1996 increased $6 million, or 37%,
compared to the prior year, due to an increase in the volume of loans serviced
as a result of the extension of Fleet's direct loan servicing contracts with the
federal government.
Noninterest expense in the third quarter of 1996 totaled $911 million,
including $189 million related to the NatWest Acquisiton, compared to $747
million during the third quarter of 1995. Excluding the incremental impact of
the NatWest Acquisition, noninterest expense declined $39 million from the
second quarter of 1996, a reduction of $160 million on an annualized basis. This
decrease was primarily the result of cost savings associated with the
acquisition of Shawmut National Corporation in November 1995.
Total assets at September 30, 1996 were $87.2 billion, substantially
equivalent to the $87.7 billion at September 30, 1995. Total loans increased 7%
on an annualized basis, to $60.1 billion at September 30, 1996, as a result of
growth in the commercial, real estate and credit card portfolios during the
quarter. Stockholder's equity amounted to $7.27 billion at September 30, 1996,
an increase of $141 million from June 30, 1996. Additionally, during the third
quarter Fleet redeemed its 10.12% Series III preferred stock, which resulted in
a one-time charge to earnings per share of $.01, and replaced it with Series
VIII preferred stock at an initial rate of 6.59%. Common equity to assets and
tangible common equity to tangible assets were 7.19% and 5.30%, respectively, at
September 30, 1996.
37
<PAGE>
CAPITALIZATION
The following table sets forth the actual capitalization of Fleet and its
subsidiaries at September 30, 1996, and Fleet's capitalization as of such date
as adjusted to reflect the consummation of the Offer and the issuance and sale
by Fleet Capital Trust II of Capital Securities on December 11, 1996, assuming
that all of the Depositary Shares are validly tendered and accepted by Fleet in
exchange for the Preferred Securities. See "The Offer--Reason and Purpose of the
Offer." The table should be read in conjunction with Fleet's consolidated
financial statements and notes thereto included in the documents incorporated by
reference herein. See "Incorporation of Certain Documents by Reference" in the
accompanying Prospectus.
<TABLE>
<CAPTION>
ACTUAL AS ADJUSTED
---------- -----------
<S> <C> <C>
AT SEPTEMBER 30, 1996
-----------------------
<CAPTION>
(DOLLARS IN MILLIONS)
<S> <C> <C>
Long-term debt........................................................................... 4,923 4,923
---------- -----------
Company-obligated mandatorily redeemable preferred securities of Fleet Capital Trust I
(1)..................................................................................... -- 275
Company-obligated mandatorily redeemable capital securities of Fleet Capital Trust II
(2)..................................................................................... -- 250
---------- -----------
STOCKHOLDERS' EQUITY
Preferred stock.......................................................................... 1,001 476
Common stock at $.01 par value........................................................... 3 3
Common surplus........................................................................... 3,142 3,142
Retained earnings........................................................................ 3,186 3,186
Net unrealized gain (loss) on securities................................................. (17) (17)
Treasury stock........................................................................... (47) (47)
---------- -----------
Total stockholders' equity............................................................... 7,268 6,743
---------- -----------
Total.................................................................................... 12,191 12,191
---------- -----------
---------- -----------
</TABLE>
- ------------------------
(1) As described herein, the sole assets of the Trust will be the Junior
Subordinated Debentures with a principal amount equal to the aggregate
stated liquidation amount of the Preferred Securities and the Common
Securities. The Junior Subordinated Debentures will bear interest at the
rate of 8.00% per annum and will mature on February 15, 2027, which may be
(i) shortened to a date not earlier than April 15, 2001 or (ii) extended to
a date not later than February 15, 2046. Fleet owns all of the Common
Securities of the Trust. Upon redemption of the Junior Subordinated
Debentures, the Preferred Securities will be mandatorily redeemable.
(2) Issued on December 11, 1996. The sole assets of Fleet Capital Trust II are
7.92% Junior Subordinated Deferrable Interest Debentures due 2026 with a
principal amount of approximately $257.7 million. Such debentures mature on
December 11, 2026. Fleet owns all of the common securities of such trust.
Upon redemption of such debentures, the capital securities are mandatorily
redeemable. As adjusted reflects the assumed application of the estimated
net proceeds from the sale of such capital securities to retire outstanding
preferred stock of Fleet.
ACCOUNTING TREATMENT
The financial statements of the Trust will be consolidated into Fleet's
consolidated financial statements, with the Preferred Securities treated as
minority interest and shown in Fleet's consolidated balance sheet as
"Company-Obligated Mandatorily Redeemable Preferred Securities of Subsidiary
Fleet Capital Trust I Holding Solely Junior Subordinated Debentures of the
Company." The financial statement footnotes of Fleet will reflect that the sole
asset of the Trust will be the principal amount of the Junior
38
<PAGE>
Subordinated Debentures equal to the aggregate stated liquidation amount of the
Preferred Securities and the Common Securities, bearing interest at 8.00% and
maturing on February 15, 2027, which may be (i) shortened to a date not earlier
than April 15, 2001 or (ii) extended to a date not later than February 15, 2046.
All future reports filed by Fleet under the Exchange Act will present
information regarding the Trust and other similar Fleet trusts in the manner
described above. In addition, if Staff Accounting Bulletin 53 treatment is
sought, a footnote to Fleet's audited financial statements will be added to
reflect that (i) the Trust and such other trusts are wholly-owned by Fleet; (ii)
the sole assets of the Trust are the Junior Subordinated Debentures and the sole
assets of such other trusts will be junior subordinated debentures, in each case
specifying as to each trust the principal amount, interest rate and maturity
date of the junior subordinated debentures held, and (iii) the Preferred
Securities Guarantee, when taken together with Fleet's obligations under the
Junior Subordinated Debentures and the Indenture and its obligations under the
Declaration, including its obligations to pay costs, expenses, debts and
liabilities of the Trust (other than with respect to the Trust Securities), and
the corresponding obligations of Fleet with respect to such other trusts,
provide a full and unconditional guarantee of amounts on the Preferred
Securities and the preferred securities issued by such other trusts. See
"Capitalization."
THE TRUST
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) a declaration of trust, dated as of November 1, 1996, executed by Fleet,
as Sponsor, and the Trustees and (ii) the filing of a certificate of trust with
the Secretary of State of the State of Delaware on November 1, 1996. The
declaration will be amended and restated in its entirety (as so amended and
restated, the "Declaration") substantially in the form filed as an exhibit to
the Registration Statement of which this Prospectus forms a part. The
Declaration will be qualified as an indenture under the Trust Indenture Act.
Upon issuance of the Preferred Securities, the purchasers thereof will own all
of such Preferred Securities. See "Description of the Preferred
Securities--Book-Entry; Delivery and Form." Fleet will directly or indirectly
acquire all of the Common Securities of the Trust in an aggregate liquidation
amount equal to at least 3 percent of the total capital of the Trust.
Pursuant to the Declaration, the number of Trustees will initially be five.
Three of the Trustees (the "Regular Trustees") will be persons who are employees
or officers of, or who are affiliated with, Fleet. The fourth trustee will be a
financial institution that is unaffiliated with Fleet, which trustee will serve
as the Institutional Trustee. Initially, The First National Bank of Chicago will
be the Institutional Trustee under the Trust until removed or replaced by the
holder of the Common Securities of the Trust. For purposes of compliance with
the provisions of the Trust Indenture Act, The First National Bank of Chicago
will act as the Guarantee Trustee under the Preferred Securities Guarantee and
as Debt Trustee under the Indenture. The fifth trustee will be the Delaware
Trustee. Initially, First Chicago Delaware Inc., an affiliate of the
Institutional Trustee, will act as Delaware Trustee. See "Description of the
Preferred Securities Guarantee" and "Description of the Preferred
Securities--Voting Rights" herein.
The Institutional Trustee will hold title to the Junior Subordinated
Debentures for the benefit of the holders of the Trust Securities and will have
the power to exercise all rights, powers and privileges under the Indenture as
the holder of the Junior Subordinated Debentures. In addition, the Institutional
Trustee will maintain exclusive control of the Property Account to hold all
payments made in respect of the Junior Subordinated Debentures for the benefit
of the holders of the Trust Securities. The Institutional Trustee will make
payments of distributions and payments on liquidation, redemption and otherwise
to the holders of the Trust Securities out of funds from the Property Account.
The Guarantee Trustee will hold the Preferred Securities Guarantee for the
benefit of the holders of the Preferred Securities. Fleet, as the direct or
indirect holder of all the Common Securities of a Trust, will have the right to
appoint, remove or replace any Trustee and to increase or decrease the number of
Trustees. Fleet will pay all fees and expenses related to the Trust and the
offering of the Trust Securities. See "Description of the Junior Subordinated
Debentures--Miscellaneous."
39
<PAGE>
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Business Trust Act and the Trust Indenture Act. See
"Description of the Preferred Securities."
The Trust exists for the sole purpose of (i) issuing (a) its Preferred
Securities in exchange for Depositary Shares validly tendered in the Offer and
delivering such Depositary Shares to Fleet in consideration of the deposit by
Fleet as trust assets of Junior Subordinated Debentures having an aggregate
stated principal amount equal to the aggregate stated liquidation amount of such
Preferred Securities, and (b) its Common Securities to Fleet in exchange for
cash and investing the proceeds thereof in an equal aggregate principal amount
of Junior Subordinated Debentures and (ii) engaging in only those other
activities as are necessary or incidental thereto.
Under the Declaration, the Trust shall not, and the Trustees (including the
Institutional Trustee) shall cause the Trust not to, engage in any activity
other than in connection with the purposes of the Trust or other than as
required or authorized by the Declaration. In particular, the Trust shall not
and the Trustees (including the Institutional Trustee) shall not (i) invest any
proceeds received by the Trust from holding the Junior Subordinated Debentures
but shall promptly distribute all such proceeds to holders of the Trust
Securities pursuant to the terms of the Declaration and of the Trust Securities;
(ii) acquire any assets other than as expressly provided in the Declaration;
(iii) possess Trust property for other than a Trust purpose; (iv) make any
investments, other than investments represented by the Junior Subordinated
Debentures; (v) possess any power or otherwise act in such a way as to vary
trust assets or the terms of its Trust Securities in any way whatsoever; (vi)
issue any securities or other evidences of beneficial ownership of, or
beneficial interests in, the Trust other than its Trust Securities; (vii) incur
any indebtedness for borrowed money or (viii)(a) direct the time, method and
place of exercising any trust or power conferred upon the Debt Trustee with
respect to the Junior Subordinated Debentures held in the Trust, (b) waive any
past default that is waivable under Section 5.7 of the Indenture, (c) exercise
any right to rescind or annul any declaration that the principal of all of the
Junior Subordinated Debentures held in the Trust shall be due and payable or (d)
consent to any amendment, modification or termination of the Indenture or the
Junior Subordinated Debentures held in the Trust or the Declaration, in each
case where such consent shall be required, if such action would cause the Trust
to be classified for United States federal income tax purposes as other than a
grantor trust or would cause the Trust to be deemed an "investment company"
which is required to be registered under the Investment Company Act of 1940, as
amended (the "1940 Act").
The Declaration may be modified and amended if approved by the Regular
Trustees (and in certain circumstances the Institutional Trustee), provided
that, if any proposed amendment provides for, or the Regular Trustees otherwise
propose to effect, (i) any action that would adversely affect the powers,
preferences or special rights of the Trust Securities, whether by way of
amendment to the Declaration or otherwise or (ii) the dissolution, winding-up or
termination of the Trust other than pursuant to the terms of the Declaration,
then the holders of the Trust Securities voting together as a single class will
be entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of at least a majority in
liquidation amount of the Trust Securities affected thereby; provided, that, if
any amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or the Common Securities, then only the affected
class will be entitled to vote on such amendment or proposal and such amendment
or proposal shall not be effective except with the approval of a majority in
liquidation amount of such class of Securities.
The books and records of the Trust will be maintained at the principal
office of the Trust and will be open for inspection by a holder of Preferred
Securities or the duly authorized representative of such holder for any purpose
reasonably related to its interest in the Trust during normal business hours.
The Trust anticipates that it will not be required to file with the Commission
or distribute to holders of Preferred Securities periodic reports regarding the
Trust.
40
<PAGE>
The Declaration provides that the Trustees may treat the person in whose
name a Preferred Security is registered on the books and records of the Trust as
the sole holder thereof and of the Preferred Securities represented thereby for
purposes of receiving distributions and for all other purposes and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest in
such certificate or in the Preferred Securities represented thereby on the part
of any person, whether or not the Trust shall have actual or other notice
thereof. Preferred Securities will be issued in fully registered form. Investors
may elect to hold their Preferred Securities directly or, subject to the rules
and procedures of The Depository Trust Company (the "Depository Institution")
described under "Description of the Preferred Securities-- Book-Entry; Delivery
and Form," hold interests in a global certificate registered on the books and
records of the Trust in the name of a Depository Institution or its nominee.
Under the Declaration:
(i) the Trust and the Trustees shall be entitled to deal with a Depository
Institution (or any successor depositary) for all purposes, including the
payment of distributions and receiving approvals, or consents under the
Declaration, and except as set forth in the Declaration, shall have no
obligation to persons owning Preferred Securities ("Preferred Security
Beneficial Owners") registered in the name of and held by a Depository
Institution or its nominee; and
(ii) the rights of Preferred Security Beneficial Owners shall be exercised
only through a Depository Institution (or any successor depository) and shall be
limited to those established by law and agreements between such Preferred
Security Beneficial Owners and a Depository Institution and/or its participants.
See "Description of the Preferred Securities--Book-Entry; Delivery and Form."
With respect to Preferred Securities registered in the name of and held by a
Depository Institution or its nominee, all notices and other communications
required under the Declaration shall be given to, and all distributions on such
Preferred Securities shall be given or made to, a Depository Institution (or its
successor).
THE FOREGOING SUMMARY OF CERTAIN PROVISIONS OF THE DECLARATION IS A
DISCUSSION OF ALL MATERIAL TERMS OF THE DECLARATION, BUT DOES NOT PURPORT TO BE
COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE DECLARATION WHICH
HAS BEEN FILED AS AN EXHIBIT TO THE REGISTRATION STATEMENT OF WHICH THIS
PROSPECTUS IS A PART.
The business address of the Trust is c/o Fleet Financial Group, Inc., One
Federal Street, Boston, Massachusetts 02110, telephone number (617) 292-2000.
41
<PAGE>
THE OFFER
REASON AND PURPOSE OF THE OFFER
On October 21, 1996, the Federal Reserve Board issued the Federal Reserve
Press Release announcing that it had approved the use of certain cumulative
preferred stock instruments, such as the Preferred Securities, as Tier 1 capital
for purposes of the Federal Reserve Board's capital guidelines for bank holding
companies. Fleet intends to treat the Preferred Securities as Tier 1 capital.
Moreover, under current United States federal tax law, the interest payable on
the Junior Subordinated Debentures, unlike the dividends payable on the
Depositary Shares, is deductible.
GENERAL
PARTICIPATION IN THE OFFER IS VOLUNTARY AND HOLDERS OF DEPOSITARY SHARES
SHOULD CAREFULLY CONSIDER WHETHER TO ACCEPT. NONE OF FLEET, THE BOARD OF
DIRECTORS OF FLEET, THE TRUSTEES NOR THE TRUST MAKES ANY RECOMMENDATION TO
HOLDERS AS TO WHETHER TO EXCHANGE OR REFRAIN FROM EXCHANGING THEIR DEPOSITARY
SHARES IN THE OFFER. HOLDERS OF DEPOSITARY SHARES ARE URGED TO CONSULT THEIR
FINANCIAL AND TAX ADVISORS IN MAKING THEIR DECISIONS ON WHAT ACTION TO TAKE IN
LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES. SEE "PRICE RANGE OF DEPOSITARY
SHARES."
Unless the context requires otherwise, the term "Holder" with respect to the
Offer means (i) any person in whose name any Depositary Shares are registered on
the books of Fleet or (ii) any other person who has obtained a properly
completed stock power from the registered holder, or (iii) any person whose
Depositary Shares are held of record by a Depository Institution.
TERMS OF THE OFFER
Upon the terms and subject to the conditions set forth herein and in the
Letter of Transmittal, the Trust will exchange Preferred Securities for any and
all of the Depositary Shares not owned by Fleet. The Offer will be effected on a
basis of one Preferred Security for each Depositary Share validly tendered and
accepted for exchange, as applicable. See "--Procedures for Tendering." Upon the
terms and subject to the conditions set forth herein and in the Letter of
Transmittal, the Trust will accept Depositary Shares validly tendered and not
withdrawn prior to the Expiration Date and, unless the Offer has been withdrawn
or terminated, will deliver Preferred Securities in exchange therefor to
tendering Holders of Depositary Shares as promptly as practicable following the
Expiration Date. The Trust expressly reserves the right, in its sole discretion,
to delay acceptance for exchange of Depositary Shares tendered under the Offer
and the delivery of the Preferred Securities with respect to the Depositary
Shares accepted for exchange (subject to Rules 13e-4 and 14e-1 under the
Exchange Act, which require that Fleet and the Trust consummate the Offer or
return the Depositary Shares deposited by or on behalf of the Holders thereof
promptly after the termination or withdrawal of the Offer), or to amend,
withdraw or terminate the Offer, at any time prior to the Expiration Date for
any of the reasons set forth in "--Conditions to the Offer" and "--Expiration
Date; Extensions; Amendments; Termination."
In all cases, except to the extent waived by the Trust, delivery of
Preferred Securities issued with respect to the Depositary Shares accepted for
exchange pursuant to the Offer will be made only after timely receipt by the
Exchange Agent of Depositary Shares (or confirmation of book-entry transfer
thereof), a properly completed and duly executed Letter of Transmittal and any
other documents required thereby.
As of the date of this Prospectus, there are 11,000,000 Depositary Shares
not owned by Fleet. This Prospectus, together with the applicable Letter of
Transmittal, is being sent to all registered Holders on or about the date of
this Prospectus. The Trust shall be deemed to have accepted validly tendered
Depositary
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Shares (or defectively tendered Depositary Shares with respect to which the
Trust has waived such defect) when, as and if the Trust has given oral or
written notice thereof to the Exchange Agent. The Exchange Agent will act as
agent for the tendering Holders for the purpose of receiving Depositary Shares
from, and remitting Preferred Securities to, tendering Holders who are
participating in the Offer. Upon the terms and subject to the conditions of the
Offer, delivery of Preferred Securities to tendering Holders will be made as
promptly as practicable following the Expiration Date.
If any tendered Depositary Shares are not accepted for exchange because of
an invalid tender, the occurrence of certain other events set forth herein or
otherwise, unless otherwise requested by the Holder under "Special Delivery
Instructions" in the Letter of Transmittal, such Depositary Shares will be
returned, without expense, to the tendering Holder thereof (or in the case of
Depositary Shares tendered by book-entry transfer into the Exchange Agent's
account at a Depository Institution, such Depositary Shares will be credited to
an account maintained at the Depository Institution designated by the
participant therein who so delivered such Depositary Shares), as promptly as
practicable after the Expiration Date or the withdrawal or termination of the
Offer.
Holders of Depositary Shares will not have any appraisal or dissenters'
rights under the Delaware General Corporation Law in connection with the Offer.
Fleet and the Trust intend to conduct the Offer in accordance with the
applicable requirements of the Exchange Act and the rules and regulations of the
Commission thereunder.
Holders who tender Depositary Shares in the Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the Letter
of Transmittal, transfer taxes with respect to the exchange of Depositary Shares
pursuant to the Offer. See "Fees and Expenses; Transfer Taxes."
Holders tendering Depositary Shares held in global form shall receive
Preferred Securities in global form and holders tendering Depositary Shares held
directly in certificated form shall receive Preferred Securities in certificated
form, in each case unless otherwise specified in the Letter of Transmittal.
CONDITIONS TO THE OFFER
Notwithstanding any other provisions of the Offer, or any extension of the
Offer, the Trust will not be required to deliver Preferred Securities in respect
of any properly tendered Depositary Shares and may terminate the Offer by oral
or written notice to the Exchange Agent and the holders of the Depositary
Shares, or, at its option, may modify or otherwise amend the Offer (other than
with respect to the Minimum Distribution Condition) with respect to the
Depositary Shares if the condition in clause (a) below is not satisfied at or
prior to the Expiration Date or if any of the events specified in clauses (b)
through (d) occurs at or prior to the exchange date for the Depositary Shares:
(a) tenders by a sufficient number of holders of Depositary Shares to
satisfy the Minimum Distribution Condition for the Offer;
(b) any action has been taken or threatened, or any statute, rule,
regulation, judgment, order, stay, decree or injunction has been
promulgated, enacted, entered, enforced or deemed applicable to the
Offer, by or before any court or governmental regulatory or
administrative agency or authority or tribunal, domestic or foreign,
which (i) challenges the making of the Offer, or might directly or
indirectly prohibit, prevent, restrict or delay consummation of the
Offer, or otherwise and adversely affects in any material manner the
Offer or (ii) could materially adversely affect the business, condition
(financial or otherwise), income, operations, properties, assets,
liabilities or prospects of Fleet and its subsidiaries, taken as a whole,
or materially impair the contemplated benefits of the Offer to Fleet,
including any such action, statute, rule, regulation, judgment, order,
stay, decree or injunction which would constitute a Special Event if it
occurred after the Expiration Date;
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(c) any event has occurred or is likely to occur affecting the business or
financial affairs of Fleet that would or might prohibit, prevent,
restrict or delay consummation of the Offer or that will, or is
reasonably likely to, materially impair the contemplated benefits of the
Offer or might be material to holders of Depositary Shares in deciding
whether to accept the Offer; and
(d) any of the following events shall have occurred (i) any general
suspension of or limitation on trading in securities on the NYSE or in
the over-the-counter market (whether or not mandatory), (ii) any
significant adverse change in the price of the Depositary Shares or in
the United States securities or financial markets, (iii) a material
impairment in the trading market for debt or equity securities on the
NYSE or in the over-the counter market (whether or not mandatory), (iv) a
declaration of a banking moratorium or any suspension of payments in
respect of banks by federal or state authorities in the United States
(whether or not mandatory), (v) a commencement of a war, armed
hostilities or other national or international crisis directly or
indirectly relating to the United States, (vi) any limitation (whether or
not mandatory) by any governmental authority on, or other event having a
reasonable likelihood of affecting, the extension of credit by banks or
other lending institutions in the United States, or (vii) any significant
adverse change in United States securities or financial markets generally
or in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof.
The foregoing conditions are for the sole benefit of the Trust and Fleet
and, except for the Minimum Distribution Condition, may be waived by the Trust
and Fleet, in whole or in part, in their sole discretion. Any determination made
by Fleet or the Trust concerning an event, development or circumstance described
or referred to above will be final and binding on all parties.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION
The Offer will expire on the Expiration Date. The Trust expressly reserves
the right, as to the Offer, in its sole discretion, subject to applicable law,
to (i) terminate the Offer, and not accept for exchange any Depositary Shares
and promptly return such Depositary Shares upon the failure of any of the
conditions specified above in "--Conditions to the Offer," (ii) waive any
condition to the Offer (other than the Minimum Distribution Condition) and
accept all Depositary Shares previously tendered pursuant to the Offer, (iii)
extend the Expiration Date of the Offer and retain all Depositary Shares
tendered pursuant to the Offer until the Expiration Date, subject, however, to
all withdrawal rights of holders, see "-- Withdrawal of Tenders," (iv) amend the
terms of the Offer, (v) modify the form of the consideration to be paid pursuant
to the Offer, or (vi) not accept for exchange the Depositary Shares at any time
on or prior to the Expiration Date, for any reason, including, without
limitation, if fewer than 100,000 of the Depositary Shares would remain
outstanding upon acceptance of those tendered (which condition may be waived by
the Trust). Any amendment applicable to the Offer will apply to all Depositary
Shares tendered pursuant to the Offer. During any extension of the Offer, all
Depositary Shares previously tendered pursuant to the Offer and not withdrawn
will remain subject to the Offer.
If the Trust makes a material change in the terms of the Offer, the Trust
will extend the Offer. The minimum period for which the Offer must remain open
following material changes in the terms of the Offer or the information
concerning the Offer, other than a change in the amount of Depositary Shares
sought for exchange or an increase or decrease in the consideration offered to
Holders of the Depositary Shares, will depend upon the facts and circumstances,
including the relative materiality of the change or information. With respect to
a decrease in the number of Depositary Shares sought in the Offer or an increase
or decrease in the consideration offered to Holders of the Depositary Shares, if
required, the Offer will remain open for a minimum of ten (10) Business Days
following public announcement of such change. In the case of any amendment,
withdrawal or termination of the Offer, a public announcement will be issued no
later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date of the Offer. If the Trust withdraws or
terminates the Offer, it will give
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immediate notice to the Exchange Agent, and all Depositary Shares theretofore
tendered pursuant to the Offer will be returned promptly to the tendering
Holders thereof. See "--Withdrawal of Tenders." In order to satisfy the NYSE
listing requirements, acceptance of Depositary Shares validly tendered in the
Offer is subject to the Minimum Distribution Condition, which condition may not
be waived.
PROCEDURES FOR TENDERING
The tender of Depositary Shares by a Holder thereof pursuant to one of the
procedures set forth below will constitute an agreement between such Holder and
the Trust in accordance with the terms and subject to the conditions set forth
herein and in the related Letter of Transmittal and the Trust's right to
terminate or withdraw the Offer at any time for any reason.
EACH HOLDER OF DEPOSITARY SHARES WISHING TO PARTICIPATE IN THE OFFER MUST
(I) PROPERLY COMPLETE AND SIGN THE LETTER OF TRANSMITTAL IN ACCORDANCE WITH THE
INSTRUCTIONS CONTAINED HEREIN AND IN THE LETTER OF TRANSMITTAL (EXCEPT WHEN AN
AGENT'S MESSAGE IS APPROPRIATE AND UTILIZED), TOGETHER WITH ANY REQUIRED
SIGNATURE GUARANTEES, AND DELIVER THE SAME TO THE EXCHANGE AGENT AT ONE OF ITS
ADDRESSES SET FORTH ON THE BACK COVER PAGE HEREOF PRIOR TO THE EXPIRATION DATE
AND EITHER (A) CERTIFICATES FOR THE DEPOSITARY SHARES MUST BE RECEIVED BY THE
EXCHANGE AGENT AT SUCH ADDRESS OR (B) SUCH DEPOSITARY SHARES MUST BE TRANSFERRED
PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER DESCRIBED BELOW AND A
CONFIRMATION OF SUCH BOOK-ENTRY TRANSFER MUST BE RECEIVED BY THE EXCHANGE AGENT,
IN EACH CASE PRIOR TO THE EXPIRATION DATE, OR (II) COMPLY WITH THE GUARANTEED
DELIVERY PROCEDURES DESCRIBED BELOW. LETTERS OF TRANSMITTAL, DEPOSITARY SHARES
AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT ONLY TO THE EXCHANGE AGENT, NOT
TO THE TRUST, FLEET, THE DEALER MANAGERS OR THE INFORMATION AGENT.
SPECIAL PROCEDURE FOR BENEFICIAL OWNERS. Any beneficial owner whose
Depositary Shares are registered in the name of a broker, dealer, commercial
bank, trust company or other nominee and who wishes to tender such Depositary
Shares should contact such registered Holder promptly and instruct such
registered Holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on its own behalf, such owner must, prior to
completing and executing the Letter of Transmittal and delivering its Depositary
Shares, either make appropriate arrangements to register ownership of the
Depositary Shares in such owner's name or obtain a properly completed stock
power from the registered Holder. The transfer of registered ownership may take
considerable time and may not be able to be completed prior to the Expiration
Date.
THE METHOD OF DELIVERY OF DEPOSITARY SHARES AND ALL OTHER DOCUMENTS IS AT
THE ELECTION AND RISK OF THE HOLDER. IF SENT BY MAIL, IT IS RECOMMENDED THAT (1)
REGISTERED MAIL, RETURN RECEIPT REQUESTED, BE USED, (2) INSURANCE BE OBTAINED,
AND (3) THE MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO
PERMIT DELIVERY TO THE EXCHANGE AGENT ON OR BEFORE THE EXPIRATION DATE.
SIGNATURE GUARANTEES. If tendered Depositary Shares are registered in the
name of the signer of the Letter of Transmittal and the Preferred Securities to
be issued in exchange therefor are to be issued (and any untendered Depositary
Shares are to be reissued) in the name of the registered Holder, the signature
of such signer need not be guaranteed. If the tendered Depositary Shares are
registered in the name of someone other than the signer of the Letter of
Transmittal, or if Preferred Securities issued in exchange therefor are to be
issued in the name of any person other than the signer of the Letter of
Transmittal, such tendered Depositary Shares must be endorsed or accompanied by
written instruments of transfer in form
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satisfactory to the Trust and duly executed by the registered Holder, and the
signature on the endorsement or instrument of transfer must be guaranteed by a
financial institution (including most banks, savings and loans associations and
brokerage houses) that is a participant in the Security Transfer Agents
Medallion Program or the Stock Exchange Medallion Program (any of the foregoing
hereinafter referred to as an "Eligible Institution"). If the Preferred
Securities and/or the Depositary Shares are not exchanged or are to be delivered
to an address other than that of the registered Holder appearing on the register
for the Depositary Shares, the signature in the Letter of Transmittal must be
guaranteed by an Eligible Institution.
BOOK-ENTRY TRANSFER. The Trust understands that the Exchange Agent will
make a request promptly after the date of this Prospectus to establish accounts
with respect to the Depositary Shares at a Depository Institution for the
purpose of facilitating the Offer, and subject to the establishment thereof, any
financial institution that is a participant in a Depository Institution's system
may make book-entry delivery of Depositary Shares by causing the Depository
Institution to transfer such Depositary Shares into the Exchange Agent's account
with respect to the Depositary Shares in accordance with such Depository
Institution's Automated Tender Offer Program ("ATOP") procedures for such
book-entry transfers. However, the exchange for the Depositary Shares so
tendered will only be made after timely confirmation (a "Book-Entry
Confirmation") of such Book-Entry Transfer of Depositary Shares into the
Exchange Agent's account, and timely receipt by the Exchange Agent of an Agent's
Message (as such term is defined in the next paragraph) and any other documents
required by the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by a Depository
Institution and received by the Exchange Agent and forming a part of a
Book-Entry Confirmation, which states that such Depository Institution has
received an express acknowledgment from a participant tendering Depositary
Shares that is the subject of such Book-Entry Confirmation, that such
participant has received and agrees to be bound by the terms of the Letter of
Transmittal, and that the Trust may enforce such agreement against such
participant.
GUARANTEED DELIVERY. If a Holder desires to participate in the Offer and
time will not permit a Letter of Transmittal or Depositary Shares to reach the
Exchange Agent before the Expiration Date or the procedure for book-entry
transfer cannot be completed on a timely basis, a tender may be effected if the
Exchange Agent has received at one of its addresses on the back cover page
hereof prior to the Expiration Date, a letter, telegram or facsimile
transmission from an Eligible Institution setting forth the name and address of
the tendering Holder, the name(s) in which the Depositary Shares are registered
and, if the Depositary Shares are held in certificated form, the certificate
numbers of the Depositary Shares to be tendered, and stating that the tender is
being made thereby and guaranteeing that within three NYSE trading days after
the date of execution of such letter, telegram or facsimile transmission by the
Eligible Institution, the Depositary Shares in proper form for transfer,
together with a properly completed and duly executed Letter of Transmittal (and
any other required documents), or, in the case of a Depositary Institution, an
Agent's Message, will be delivered by such Eligible Institution. Unless the
Depositary Shares being tendered by the above-described method are deposited
with the Exchange Agent within the time period set forth above (accompanied or
preceded by a properly completed Letter of Transmittal and any other required
documents) or, in the case of a Depositary Institution, in accordance with such
Depository Institution's ATOP procedures (along with a Letter of Transmittal or
an Agent's Message) is received, the Trust may, at its option, reject the
tender. In addition to the copy being transmitted herewith, copies of a Notice
of Guaranteed Delivery which may be used by Eligible Institutions for the
purposes described in this paragraph are available from the Exchange Agent and
the Information Agent.
MISCELLANEOUS. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance for exchange of any tender of
Depositary Shares will be determined by the Trust, whose determination will be
final and binding. The Trust reserves the absolute right to reject any or all
tenders not in proper form or the acceptance for exchange of which may, in the
opinion of the Trust's counsel, be unlawful. The Trust also reserves the
absolute right to waive any defect or irregularity in the tender of any
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Depositary Shares, and the Trust's interpretation of the terms and conditions of
the Offer (including the instructions in the applicable Letter of Transmittal)
will be final and binding. None of the Trust, the Exchange Agent, the Dealer
Manager, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
Tenders of Depositary Shares involving any irregularities will not be deemed
to have been made until such irregularities have been cured or waived.
Depositary Shares received by the Exchange Agent that are not validly tendered
and as to which the irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering Holder (or in the case of
Depositary Shares tendered by book-entry transfer into the Exchange Agent's
account at a Depository Institution, such Depositary Shares will be credited to
an account maintained at the Depository Institution designated by the
participant therein who so delivered such Depositary Shares), unless otherwise
requested by the Holder in the Letter of Transmittal, as promptly as practicable
after the Expiration Date or the withdrawal or termination of the Offer.
LETTER OF TRANSMITTAL
The Letter of Transmittal contains, among other things, the following terms
and conditions, which are part of the Offer. The party tendering the Depositary
Shares for exchange (the "Transferor") exchanges, assigns and transfers the
Depositary Shares to the Trust, and irrevocably constitutes and appoints the
Exchange Agent as the Transferor's agent and attorney-in-fact to cause such
Depositary Shares to be assigned, transferred and exchanged. The Transferor
represents and warrants that it has full power and authority to tender,
exchange, assign and transfer such Depositary Shares and the underlying
Preferred Stock and to acquire Preferred Securities issuable upon the exchange
of such tendered Depositary Shares and that, when such Transferor's Depositary
Shares are accepted for exchange, the Trust will acquire good and unencumbered
title to such tendered Depositary Shares and the underlying Preferred Stock,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim. The Transferor also warrants that it will, upon
request, execute and deliver any additional documents deemed by the Trust to be
necessary or desirable to complete the exchange, assignment and transfer of
tendered Depositary Shares or transfer ownership of such Depositary Shares on
the account books maintained by the Depository Institution. All authority
conferred by the Transferor will survive the death, bankruptcy or incapacity of
the Transferor and every obligation of the Transferor shall be binding upon the
heirs, legal representatives, successors, assigns, executors and administrators
of such Transferor.
WITHDRAWAL OF TENDERS
Tenders of Depositary Shares pursuant to the Offer may be withdrawn at any
time prior to the Expiration Date and, unless accepted for exchange by the
Trust, may be withdrawn at any time after 40 Business Days after the date of
this Prospectus.
To be effective, a written notice of withdrawal delivered by mail, hand
delivery or facsimile transmission must be timely received by the Exchange Agent
at one of its addresses set forth on the back cover page hereof. The method of
notification is at the risk and election of the Holder. Any such notice of
withdrawal must specify (i) the Holder named in the Letter of Transmittal as
having tendered Depositary Shares to be withdrawn, (ii) if the Depositary Shares
are held in certificated form, the certificate numbers of the Depositary Shares
to be withdrawn, (iii) that such Holder is withdrawing his election to have such
Depositary Shares exchanged and (iv) the name of the registered Holder of such
Depositary Shares. In addition, the notice of withdrawal must be signed by the
Holder in the same manner as the original signature on the Letter of Transmittal
(including any required signature guarantees) or be accompanied by evidence
satisfactory to the Trust that the person withdrawing the tender has succeeded
to the beneficial ownership of the Depositary Shares being withdrawn. The
Exchange Agent will return the properly withdrawn Depositary Shares promptly
following receipt of notice of withdrawal. If Depositary Shares have been
tendered pursuant to the procedure for book-entry transfer, any notice of
withdrawal must
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specify the name and number of the account at a Depository Institution to be
credited with the withdrawn Depositary Shares and otherwise comply with such
Depository Institution procedures. All questions as to the validity of notice of
withdrawal, including time of receipt, will be determined by the Trust, and such
determination will be final and binding on all parties. Withdrawals of tenders
of Depositary Shares may not be rescinded and any Depositary Shares withdrawn
will thereafter be deemed not validly tendered for purposes of the Offer.
Properly withdrawn Depositary Shares, however, may be retendered by following
the procedures therefor described elsewhere herein at any time prior to the
Expiration Date. See "-- Procedures for Tendering."
Upon the terms and subject to the conditions of the Offer, including the
Minimum Distribution Condition, the Trust will accept for exchange any and all
Depositary Shares that have been validly tendered and not withdrawn prior to the
Expiration Date.
The Trust expressly reserves the right, in its sole discretion, to delay
acceptance for exchange of Depositary Shares tendered under the Offer and the
delivery of the Preferred Securities with respect to the Depositary Shares
accepted for exchange (subject to Rules 13e-4 and 14e-1 under the Exchange Act,
which require that Fleet and the Trust consummate the Offer or return the
Depositary Shares deposited by or on behalf of the Holders thereof promptly
after the termination or withdrawal of the Offer), or to amend, withdraw or
terminate the Offer, at any time prior to the Expiration Date for any of the
reasons set forth in "--Conditions to the Offer" and "--Expiration Date;
Extensions; Amendments; Termination."
If the Trust decides, in its sole discretion, to decrease the number of
Depositary Shares sought in the Offer or to increase or decrease the
consideration offered to Holders of Depositary Shares, and if the Offer is
scheduled to expire less than ten (10) Business Days from and including the date
that notice of such increase or decrease is first published, sent or given in
the manner specified in "--Expiration Date; Extensions; Amendments;
Termination," then the Offer will be extended for a minimum of ten (10) Business
Days from and including the date of such notice.
All Depositary Shares not accepted pursuant to the Offer will be returned to
the tendering Holders at the Trust's expense as promptly as practicable
following the Expiration Date.
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EXCHANGE AGENT AND INFORMATION AGENT.
Fleet National Bank has been appointed as Exchange Agent for the Offer.
THE EXCHANGE AGENT IS:
FLEET NATIONAL BANK
<TABLE>
<S> <C>
BY HAND: BY MAIL (REGISTERED OR CERTIFIED MAIL
Fleet National Bank RECOMMENDED):
Corporate Trust Operations Fleet National Bank
CT/OP/TO6D Corporate Trust Operations
One Talcott Plaza, 5th Floor CT/OP/TO6D
Hartford, CT 06103 P.O. Box 1440
Hartford, CT 06143
or BY OVERNIGHT COURIER:
Fleet Bank Fleet National Bank
Corporate Trust Department Corporate Trust Operations
14 Wall Street CT/OP/TO6D
8th Floor, Window # 2 150 Windsor Street
New York, NY 10005 Hartford, CT 06120
BY FACSIMILE:
(For Eligible Institutions Only)
(860) 986-7908
CONFIRM RECEIPT OF NOTICE OF GUARANTEED DELIVERY BY TELEPHONE:
(860) 986-1271
Attn: REORG
</TABLE>
Georgeson & Company Inc. has been retained as the Information Agent to
assist in connection with the Offer. Questions and requests for assistance
regarding the Offer, requests for additional copies of this Prospectus, the
Letter of Transmittal and requests for Notice of Guaranteed Delivery may be
directed to the Information Agent.
THE INFORMATION AGENT IS:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
(800) 223-2064 (Toll-Free)
Banks and Brokers Call Collect:
(212) 440-9800
Fleet will pay the Exchange Agent and Information Agent reasonable and
customary fees for their services and will reimburse them for all their
reasonable out-of-pocket expenses in connection therewith.
DEALER MANAGERS; SOLICITING DEALERS
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Smith Barney Inc., as
Dealer Managers, have agreed to solicit exchanges of Depositary Shares for
Preferred Securities. The maximum fee payable to the Dealer Managers is
approximately $1,375,000 plus any amount that the Dealer Managers may be
entitled to pursuant to the next paragraph. Fleet will also reimburse the Dealer
Managers for certain reasonable out-of-pocket expenses in connection with the
Offer and will indemnify the Dealer Managers against certain liabilities,
including liabilities under the Securities Act. The Dealer Managers engage in
transactions with, and from time to time has performed services for, Fleet,
including acting as underwriter for the issuance of the Depositary Shares.
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Fleet will pay to a Soliciting Dealer a solicitation fee of $0.50 per
Depositary Share ($0.25 per Depositary Share with respect to the solicitation of
beneficial holders of 10,000 or more shares) validly tendered and accepted for
exchange pursuant to the Offer. As used in this Prospectus, "Soliciting Dealer"
includes (i) any broker or dealer in securities, including the Dealer Managers
in their capacity as a broker or dealer, who is a member of any national
securities exchange or of the National Association of Securities Dealers, Inc.
(the "NASD"), (ii) any foreign broker or dealer not eligible for membership in
the NASD who agrees to conform to the NASD's Rules of Fair Practice in
soliciting tenders outside the United States to the same extent as though it
were an NASD member, or (iii) any bank or trust company, any one of whom has
solicited and obtained a tender pursuant to the Offer. No solicitation fee shall
be payable to a Soliciting Dealer with respect to the tender of depositary
receipts evidencing Depositary Shares by a Holder unless the Letter of
Transmittal accompanying such tender designates such Soliciting Dealer as such
in the box captioned "Solicited Tenders."
If tendered Depositary Shares are being delivered by book-entry transfer
made to an account maintained by the Exchange Agent with Depository
Institutions, the Soliciting Dealer must return a Notice of Solicited Tenders
(included in the materials provided to brokers and dealers) to the Exchange
Agent within three trading days after the Expiration Date in order to receive a
solicitation fee. No solicitation fee shall be payable to a Soliciting Dealer in
respect of Depositary Shares (i) beneficially owned by such Soliciting Dealer or
(ii) registered in the name of such Soliciting Dealer unless such Depositary
Shares are held by such Soliciting Dealer as nominee and such Depositary Shares
are being tendered for the benefit of one or more beneficial owners identified
on the Letter of Transmittal or the Notice of Solicited Tenders. No solicitation
fee shall be payable to the Soliciting Dealer with respect to the tender of
Depositary Shares by the Holder of record, for the benefit of the beneficial
owner, unless the beneficial owner has designated such Soliciting Dealer.
No solicitation fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer any portion of such fee
to a tendering Holder (other than itself). No broker, dealer, bank, trust
company or fiduciary shall be deemed to be the agent of Fleet, the Trust, the
Trustees, the Exchange Agent, the Information Agent or the Dealer Managers for
purposes of the Offer.
Other than as described above, Fleet will not pay any solicitation fees to
any broker, dealer, bank, trust company or other person for any Depositary
Shares exchanged in connection with the Offer. Fleet will reimburse such persons
for customary handling and mailing expenses incurred in connection with the
Offer.
Additional solicitations may be made by telephone, in person or otherwise by
officers and regular employees of Fleet and its affiliates. No additional
compensation will be paid to any such officers and employees who engage in
soliciting tenders.
LISTING AND TRADING OF PREFERRED SECURITIES AND DEPOSITARY SHARES
The Preferred Securities constitute a new issue of securities of the Trust
with no established trading market. While application will be made to list the
Preferred Securities on the NYSE, there can be no assurance that an active
market for the Preferred Securities will develop or be sustained in the future
on such exchange. Although the Dealer Managers have indicated to the Trust that
they intend to make a market in the Preferred Securities following the
Expiration Date as permitted by applicable laws and regulations prior to the
commencement of trading on the NYSE, it is not obligated to do so and may
discontinue any such market-making at any time without notice. Accordingly, no
assurance can be given as to the liquidity of, or trading markets for, the
Preferred Securities. In order to satisfy the NYSE listing requirements,
acceptance of Depositary Shares validly tendered in the Offer is subject to the
Minimum Distribution Condition, which condition may not be waived.
To the extent that a certain number of Depositary Shares are tendered and
accepted in the Offer and/ or the number of holders of Depositary Shares is
reduced to below certain levels, Fleet, pursuant to NYSE
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rules and regulations, would be required to delist the Depositary Shares from
the NYSE, and the trading market for untendered Depositary Shares could be
adversely affected. Fleet does not believe that the Offer has a reasonable
likelihood of causing the Depositary Shares to be delisted from the NYSE.
However, following the Expiration Date, and in accordance with and subject to
applicable law, Fleet may from time to time acquire Depositary Shares in the
open market, by tender offer, subsequent exchange offer or otherwise. Fleet's
decision to make such acquisitions is dependent on many factors, including
market conditions in effect at the time of any contemplated acquisition.
Accordingly, Fleet cannot predict whether and to what extent it will acquire any
additional Depositary Shares and the consideration to be paid therefor. In
addition, if the Offer is substantially subscribed, there would be a significant
risk that round lot holdings of Depositary Shares outstanding following the
Offer would be limited. See "Risk Factors and Special Considerations Relating to
the Offer--Lack of Established Trading Market for Preferred Securities" and
"--Reduced Trading Market for Depositary Shares."
TRANSACTIONS AND ARRANGEMENTS CONCERNING THE OFFER
Except as described herein, there are no contracts, arrangements,
understandings or relationships in connection with the Offer between Fleet or
any of its directors or executive officers, the Trust or the Trustees and any
person with respect to any securities of Fleet or the Trust, including the
Junior Subordinated Debentures, the Preferred Stock, the Depositary Shares and
the Preferred Securities.
FEES AND EXPENSES; TRANSFER TAXES
The expenses of soliciting tenders of the Depositary Shares will be borne by
Fleet. For compensation to be paid to the Dealer Managers and Soliciting
Dealers, see "The Offer--Dealer Managers; Soliciting Dealers." The total cash
expenditures to be incurred in connection with the Offer, other than fees
payable to the Dealer Managers and Soliciting Dealers, but including the
expenses of the Dealer Managers, printing, accounting and legal fees, and the
fees and expenses of the Exchange Agent, the Information Agent, the
Institutional Trustee and the Delaware Trustee, are estimated to be
approximately $175,000. Fleet will pay all transfer taxes, if any, applicable to
the exchange of Depositary Shares pursuant to the Offer. If, however,
certificates representing Preferred Securities or Depositary Shares not tendered
or accepted for exchange are to be delivered to, or are to be issued in the name
of, any person other than the registered Holder of the Depositary Shares
tendered or if a transfer tax is imposed for any reason other than the exchange
of Depositary Shares pursuant to the Offer, then the amount of any such transfer
taxes (whether imposed on the registered Holder or any other persons) will be
payable by the tendering Holder. If satisfactory evidence of payment of such
taxes or exemption therefrom is not submitted with the Letter of Transmittal,
the amount of such transfer taxes will be billed directly to such tendering
Holder.
PRICE RANGE OF DEPOSITARY SHARES
The Depositary Shares are listed and principally traded on the NYSE. The
following table sets forth, for each period shown, the high and low sales prices
of the Depositary Shares as reported on the NYSE Composite Tape. The Depositary
Shares were issued on February 21, 1996. For recent closing prices of the
Depositary Shares, see the cover page of this Prospectus.
<TABLE>
<CAPTION>
DEPOSITARY SHARES
---------------------------------------
DIVIDENDS
DECLARED PER
HIGH LOW DEPOSITARY SHARE
--------- --------- -----------------
<S> <C> <C> <C>
1996
1st Quarter................................................................... $ 24.75 $ 23.75 $ .4531
2nd Quarter................................................................... 24.75 23.44 .4531
3rd Quarter................................................................... 24.75 23.75 .4531
4th Quarter
(through December 20, 1996)................................................. 26.63 24.13 .4531*
</TABLE>
- ------------------------
* Dividends are payable on January 15, 1997 to stockholders of record on
December 29, 1996.
51
<PAGE>
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Institutional Trustee, The First National Bank of Chicago,
will act as indenture trustee for the Preferred Securities under the Declaration
for purposes of compliance with the provisions of the Trust Indenture Act. The
terms of the Preferred Securities will include those stated in the Declaration
and those made part of the Declaration by the Trust Indenture Act. The following
summary of the material terms and provisions of the Preferred Securities does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, the Declaration, a copy of which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part, the Business Trust
Act and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Regular Trustees to issue on behalf of the
Trust the Trust Securities, which represent undivided beneficial interests in
the assets of the Trust. All of the Common Securities will be owned, directly or
indirectly, by Fleet. The Common Securities rank pari passu, and payments will
be made thereon on a pro rata basis, with the Preferred Securities, except that
upon the occurrence and during the continuance of a Declaration Event of
Default, the rights of the holders of the Common Securities to receive payment
of periodic distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the Preferred
Securities. The Declaration does not permit the issuance by the Trust of any
securities other than the Trust Securities or the incurrence of any indebtedness
by the Trust. Pursuant to the Declaration, the Institutional Trustee will own
the Junior Subordinated Debentures purchased by the Trust for the benefit of the
holders of the Trust Securities. The payment of distributions out of money held
by the Trust, and payments upon redemption of the Preferred Securities or
liquidation of the Trust, are guaranteed by Fleet to the extent described under
"Description of the Preferred Securities Guarantee". The Preferred Securities
Guarantee will be held by The First National Bank of Chicago, the Guarantee
Trustee, for the benefit of the holders of the Preferred Securities. The
Preferred Securities Guarantee does not cover payment of distributions when the
Trust does not have sufficient available funds to pay such distributions. In
such event, the remedy of a holder of Preferred Securities is to vote to direct
the Institutional Trustee to enforce the Institutional Trustee's rights under
the Junior Subordinated Debentures except in the circumstances in which there is
a default in the payment of distributions, including when the Trust does not
have sufficient available funds to pay such distribution, in which case the
holder may take Direct Action. See "--Voting Rights" and "--Declaration Events
of Default."
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per annum
of 8.00% of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears for more than one quarter will bear interest thereon at
the rate per annum of 8.00%, compounded quarterly. The term "distribution" as
used herein includes any such interest payable unless otherwise stated. The
amount of distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months.
In addition, holders of Preferred Securities will be entitled to an
additional cash distribution at the rate of 7.25% per annum of the liquidation
amount thereof from January 15, 1997 through the Expiration Date in lieu of
dividends accumulating and unpaid from January 15, 1997 on their Depositary
Shares accepted for exchange, such additional distribution to be made on March
31, 1997 to holders of the Preferred Securities on the record date for such
distribution.
Distributions on the Preferred Securities will be cumulative, will accrue
from the Accrual Date, and, except as otherwise described below, will be payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing March 31, 1997, when, as and if available for payment.
52
<PAGE>
Fleet has the right under the Indenture to defer payments of interest on the
Junior Subordinated Debentures by extending the interest payment period from
time to time on the Junior Subordinated Debentures, which, if exercised, would
defer quarterly distributions on the Preferred Securities (though such
distributions would continue to accrue with interest since interest would
continue to accrue on the Junior Subordinated Debentures) during any such
Extension Period. Such right to extend the interest payment period for the
Junior Subordinated Debentures is limited to a period not exceeding 20
consecutive quarters and such period may not extend beyond the Stated Maturity
of the Junior Subordinated Debentures. In the event that Fleet exercises this
right, then (i) Fleet shall not declare or pay any dividend on, make a
distribution with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (a)
purchases or acquisitions of shares of Fleet Common Stock in connection with the
satisfaction by Fleet of its obligations under any employee benefit plans or any
other contractual obligation of Fleet (other than a contractual obligation
ranking pari passu with or junior to the Junior Subordinated Debentures), (b) as
a result of a reclassification of Fleet capital stock or the exchange or
conversion of one class or series of Fleet's capital stock for another class or
series of Fleet capital stock or (c) the purchase of fractional interests in
shares of Fleet's capital stock pursuant to the conversion or exchange
provisions of such Fleet capital stock or the security being converted or
exchanged), (ii) Fleet shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
Fleet that rank pari passu with or junior to such Junior Subordinated Debentures
and (iii) Fleet shall not make any guarantee payments with respect to the
foregoing (other than pursuant to the Preferred Securities Guarantee). Prior to
the termination of any such Extension Period, Fleet may further extend the
interest payment period; provided, that such Extension Period, together with all
such previous and further extensions thereof, may not exceed 20 consecutive
quarters or extend beyond the Stated Maturity of the Junior Subordinated
Debentures. Upon the termination of any Extension Period and the payment of all
amounts then due, Fleet may select a new Extension Period, subject to the above
requirements. See "Description of the Junior Subordinated Debentures--Interest"
and "--Option to Extend Interest Payment Period." If distributions are deferred,
the deferred distributions and accrued interest thereon shall be paid to holders
of record of the Preferred Securities as they appear on the books and records of
the Trust on the record date next following the termination of such Extension
Period.
Distributions on the Preferred Securities must be paid on the dates payable
to the extent that the Trust has funds available for the payment of such
distributions in the Institutional Account. The Trust's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received from Fleet on the Junior Subordinated Debentures. See
"Description of the Junior Subordinated Debentures." The payment of
distributions out of moneys held by the Trust is guaranteed by Fleet to the
extent set forth under "Description of the Preferred Securities Guarantee."
Distributions on the Preferred Securities will be made to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which will be 15 days prior to the relevant distribution dates.
The Declaration provides that the payment dates or record dates for the
Preferred Securities shall be the same as the payment dates and record dates for
the Junior Subordinated Debentures. Distributions payable on any Preferred
Securities that are not punctually paid on any distribution date as a result of
Fleet having failed to make the corresponding interest payment on the Junior
Subordinated Debentures will forthwith cease to be payable to the person in
whose name such Preferred Security is registered on the relevant record date,
and such defaulted distribution will instead be payable to the person in whose
name such Preferred Security is registered on the special record date
established by the Regular Trustees, which record date shall correspond to the
special record date or other specified date determined in accordance with the
Indenture; provided, however, that distributions shall not be considered payable
on any distribution payment date falling within an Extension Period unless Fleet
has elected to make a full or partial payment of interest accrued on the Junior
Subordinated Debentures on such distribution payment date. Distributions on the
Preferred Securities will be paid by the Trust. All distributions paid with
respect to the Trust Securities shall be paid on a pro rata basis to the holders
53
<PAGE>
thereof entitled thereto. If any date on which distributions are to be made on
the Preferred Securities is not a Business Day, then payment of the distribution
to be made on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. A "Business
Day" shall mean any day other than Saturday, Sunday or any other day on which
banking institutions in New York City (in the State of New York) or Chicago,
Illinois are permitted or required by any applicable law to close.
MANDATORY REDEMPTION
The Junior Subordinated Debentures will mature on February 15, 2027, which
date may be shortened or extended as provided herein. Upon the repayment of the
Junior Subordinated Debentures at maturity, the proceeds from such repayment
shall simultaneously be applied to redeem Trust Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Junior
Subordinated Debentures so repaid at a redemption price of $25 per Trust
Security, plus accrued and unpaid distributions thereon. Moreover, the Junior
Subordinated Debentures are redeemable, in whole or in part, at any time on or
after April 15, 2001, at the Optional Prepayment Price or in whole but not in
part, prior to April 15, 2001, upon the occurrence of a Special Event at the
Special Event Prepayment Price. See "--Special Event Redemption" and
"Description of the Junior Subordinated Debentures." Upon the repayment of the
Junior Subordinated Debentures prior to their Stated Maturity, the proceeds from
such repayment shall simultaneously be applied to redeem Trust Securities having
an aggregate liquidation amount equal to the aggregate principal amount of the
Junior Subordinated Debentures so redeemed at the applicable Redemption Price,
plus accrued and unpaid distributions through the redemption date; provided,
that holders of Trust Securities shall be given not less than 30 nor more than
60 days' notice of such redemption. See "Description of the Junior Subordinated
Debentures--Optional Redemption." In the event that fewer than all of the
outstanding Preferred Securities are to be redeemed, the Preferred Securities
will be redeemed pro rata. Any such redemption may require prior approval of the
Federal Reserve Board if such approval is then required under applicable law,
rules, guidelines or policies.
SPECIAL EVENT REDEMPTION
If, prior to April 15, 2001, a Special Event (as defined below) shall occur
and be continuing, Fleet shall have the right, upon not less than 30 and no more
than 60 days notice, at its option and subject to receipt of prior approval of
the Federal Reserve Board if such approval is then required under applicable
law, rules, guidelines or policies, to redeem the Junior Subordinated
Debentures, in whole (but not in part), for cash within 90 days following the
occurrence of such Special Event at a prepayment price (the "Special Event
Prepayment Price") equal to (i) 104% of the principal amount of the Debentures
if prepaid during the period commencing on the Accrual Date through and
including April 14, 1998 and (ii) the percentage of the principal amount of the
Junior Subordinated Debentures specified below, if prepaid during the 12-month
period beginning April 15 of the years indicated below plus, in each case,
accrued and unpaid interest thereon to the date of prepayment:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- --------------------------------------------------------------------------------------- -----------
<S> <C>
1998................................................................................... 103%
1999................................................................................... 102
2000................................................................................... 101
2001 and thereafter.................................................................... 100
</TABLE>
Following such redemption, all Trust Securities shall be redeemed by the
Trust at a redemption price equal to the Special Event Prepayment Price (the
"Special Event Redemption Price") plus accrued and unpaid distributions through
the redemption date.
54
<PAGE>
A "Special Event" means a Tax Event or a Regulatory Capital Event (each as
defined herein), as the case may be.
A "Tax Event" means that the Regular Trustees shall have received an opinion
of nationally recognized independent tax counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws or any regulations thereunder of the
United States or any political subdivision or taxing authority thereof or
therein, or (b) any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement or decision is announced on or after the date of
original issuance of the Junior Subordinated Debentures, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the date
of such opinion, subject to United States federal income tax with respect to
income received or accrued on the Junior Subordinated Debentures, (ii) interest
payable by Fleet on the Junior Subordinated Debentures is not, or within 90 days
of the date of such opinion will not be, deductible by Fleet, in whole or in
part, for United States federal income tax purposes, or (iii) the Trust is, or
will be within 90 days of the date of such opinion, subject to more than a DE
MINIMIS amount of other taxes, duties or other governmental charges.
A "Regulatory Capital Event" means that Fleet shall have received an opinion
of independent bank regulatory counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, or change (including any announced
prospective change) in the laws (or any regulations thereunder) of the United
States or any rules, guidelines or policies of the Federal Reserve Board or (b)
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the date of original
issuance of the Preferred Securities, the Preferred Securities do not
constitute, or within 90 days of the date thereof, will not constitute, Tier 1
capital (or its then equivalent); provided, however, that the distribution of
the Junior Subordinated Debentures in connection with the liquidation of the
Trust by Fleet and the treatment thereafter of the Junior Subordinated
Debentures as other than Tier 1 capital shall not in and of itself constitute a
Regulatory Capital Event unless such liquidation shall have occurred in
connection with a Tax Event.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Preferred Securities
(which notice will be irrevocable), then immediately prior to the close of
business on the redemption date, provided that Fleet has paid to the Trust a
sufficient amount of cash in connection with the related redemption or maturity
of the Junior Subordinated Debentures, distributions will cease to accrue on the
Preferred Securities called for redemption, such Preferred Securities shall no
longer be deemed to be outstanding and all rights of holders of such Preferred
Securities so called for redemption will cease, except the right of the holders
of such Preferred Securities to receive the Redemption Price, but without
interest on such Redemption Price. Neither the Trustees nor the Trust shall be
required to register or cause to be registered the transfer of any Preferred
Securities which have been so called for redemption. If any date fixed for
redemption of Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If Fleet fails to repay Junior Subordinated Debentures on maturity
or on the date fixed for a redemption or if payment of the Redemption Price in
respect of Preferred Securities is improperly withheld or refused and not paid
by the Trust or by Fleet pursuant to the Preferred Securities Guarantee
described under "Description of the Preferred Securities Guarantee,"
55
<PAGE>
distributions on such Preferred Securities will continue to accrue from the
original redemption date of the Preferred Securities to the date of payment, in
which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
The Trust shall not be required to (i) issue, or register the transfer or
exchange of, any Trust Securities during a period beginning at the opening of
business 15 days before the mailing of a notice of redemption of Trust
Securities and ending at the close of business on the day of the mailing of the
relevant notice of redemption and (ii) register the transfer or exchange of any
Trust Securities so selected for redemption, in whole or in part, except the
unredeemed portion of any Trust Securities being redeemed in part.
In the event that fewer than all of the outstanding Preferred Securities are
to be redeemed, the Preferred Securities will be redeemed pro rata.
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws and the regulations of the Federal Reserve
Board), Fleet or its subsidiaries may at any time, and from time to time,
purchase outstanding Preferred Securities by tender, in the open market or by
private agreement.
DISTRIBUTION OF THE JUNIOR SUBORDINATED DEBENTURES
Fleet will have the right at any time to liquidate the Trust and cause the
Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities, subject to the prior approval of the Federal Reserve Board if such
approval is then required under applicable law, rules, guidelines or policies.
If the Junior Subordinated Debentures are distributed to the holders of the
Preferred Securities, Fleet will use its best efforts to cause the Junior
Subordinated Debentures to be listed on the NYSE or on such other exchange as
the Preferred Securities are then listed.
On the date for any distribution of Junior Subordinated Debentures upon
dissolution of the Trust, (i) the Preferred Securities will no longer be deemed
to be outstanding, (ii) the Depository Institution or its nominee, as the record
holder of the Trust Securities, will receive a registered global certificate or
certificates representing the Junior Subordinated Debentures to be delivered
upon such distribution, and (iii) any certificates representing Trust Securities
not held by the Depository Institution or its nominee will be deemed to
represent Junior Subordinated Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the distribution rate of, and accrued and unpaid interest equal to
accrued and unpaid distributions on, such Preferred Securities until such
certificates are presented to Fleet or its agent for transfer or reissuance.
There can be no assurance as to the market prices for either the Preferred
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for the Preferred Securities if a dissolution and liquidation of the
Trust were to occur. Accordingly, the Preferred Securities or the Junior
Subordinated Debentures may trade at a discount to the price that the investor
paid to purchase the Preferred Securities offered hereby.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Fleet will have the right at any time to liquidate the Trust and cause the
Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities, subject to the prior approval of the Federal Reserve Board if such
approval is then required under applicable law, rules, guidelines or policies.
If the Junior Subordinated Debentures are distributed to the holders of the
Preferred Securities, Fleet will use its best efforts to cause the Junior
Subordinated Debentures to be listed on the NYSE or on such other exchange as
the Preferred Securities are then listed.
In the event of any other voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation"), the then holders
of the Trust Securities will be entitled to receive out of the assets of the
Trust, after satisfaction of liabilities to creditors, distributions in an
amount equal to the
56
<PAGE>
aggregate of the stated liquidation amount of $25 per Trust Security plus
accrued and unpaid distributions thereon to the date of payment (the
"Liquidation Distribution"), unless, in connection with such Liquidation, Junior
Subordinated Debentures in an aggregate stated principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
distribution rate of, and accrued and unpaid interest equal to accrued and
unpaid distributions on, the Trust Securities have been distributed on a pro
rata basis to the holders of the Trust Securities. If, upon any such
Liquidation, the Liquidation Distribution can be paid only in part because the
Trust has insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the Preferred Securities shall have a preference over the
Common Securities with regard to such distributions.
Pursuant to the Declaration, the Trust shall terminate (i) on February 15,
2051, the expiration of the term of the Trust, (ii) upon the bankruptcy of Fleet
or the Trust, (iii) upon the filing of a certificate of dissolution or its
equivalent with respect to Fleet, the filing of a certificate of cancellation
with respect to the Trust after obtaining the consent of the holders of at least
a majority in liquidation amount of the Trust Securities affected thereby,
voting together as a single class to file such certificate of cancellation, or
the revocation of the charter of Fleet and the expiration of 90 days after the
date of revocation without a reinstatement thereof, (iv) upon the distribution
of Junior Subordinated Debentures to the holders of the Preferred Securities,
(v) upon the entry of a decree of a judicial dissolution of Fleet or the Trust,
or (vi) upon the redemption of all the Trust Securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Indenture Event of Default")
constitutes an event of default under the Declaration with respect to the Trust
Securities (a "Declaration Event of Default"); provided, that pursuant to the
Declaration, the holder of the Common Securities will be deemed to have waived
any Declaration Event of Default with respect to the Common Securities until all
Declaration Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated. Until such Declaration Events of Default
with respect to the Preferred Securities have been so cured, waived or otherwise
eliminated, the Institutional Trustee will be deemed to be acting solely on
behalf of the holders of the Preferred Securities and only the holders of the
Preferred Securities will have the right to direct the Institutional Trustee
with respect to certain matters under the Declaration, and therefore the
Indenture. If a Declaration Event of Default with respect to the Preferred
Securities is waived by holders of Preferred Securities, such waiver will also
constitute the waiver of such Declaration Event of Default with respect to the
Common Securities for all purposes under the Declaration, without any further
act, vote or consent of the holders of the Common Securities. If the
Institutional Trustee fails to enforce its rights under the Junior Subordinated
Debentures after a holder of Preferred Securities has made a written request,
such holder of record of Preferred Securities may institute a legal proceeding
against Fleet to enforce the Institutional Trustee's rights under the Junior
Subordinated Debentures without first instituting any legal proceeding against
the Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of Fleet to pay interest or principal
on the Junior Subordinated Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, the redemption date), then a
holder of Preferred Securities may institute a Direct Action for enforcement of
payment to such holder directly of the principal of, or interest on, Junior
Subordinated Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such holder on or after the
respective due date specified in the Junior Subordinated Debentures. In
connection with such Direct Action, Fleet will be subrogated to the rights of
such holder of Preferred Securities under the Declaration to the extent of any
payment made by Fleet to such holder of Preferred Securities in such Direct
Action. The holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Junior Subordinated
Debentures.
57
<PAGE>
Upon the occurrence of a Declaration Event of Default, the Institutional
Trustee as the sole holder of the Junior Subordinated Debentures will have the
right under the Indenture to declare the principal of and interest on the Junior
Subordinated Debentures to be immediately due and payable. Fleet and the Trust
are each required to file annually with the Institutional Trustee an officer's
certificate as to its compliance with all conditions and covenants under the
Declaration.
VOTING RIGHTS
Except as described herein, under the Business Trust Act, the Trust
Indenture Act and under "Description of the Preferred Securities
Guarantee--Modification of the Preferred Securities Guarantee; Assignment", and
as otherwise required by law and the Declaration, the holders of the Preferred
Securities will have no voting rights.
Subject to the requirement of the Institutional Trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of this
paragraph, the holders of a majority in aggregate liquidation amount of the
Preferred Securities, voting separately as a class, have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Institutional Trustee, or direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee, as holder of the Junior Subordinated
Debentures, to (i) exercise the remedies available to it under the Indenture as
a holder of the Junior Subordinated Debentures, (ii) waive any past Indenture
Event of Default that is waivable under the Indenture, (iii) exercise any right
to rescind or annul a declaration that the principal of all the Junior
Subordinated Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the Junior
Subordinated Debentures where such consent shall be required; provided, however,
that, where a consent or action under the Indenture would require the consent or
act of holders of more than a majority in principal amount of the Junior
Subordinated Debentures (a "Super-Majority") affected thereby, only the holders
of at least such Super-Majority in aggregate liquidation amount of the Preferred
Securities may direct the Institutional Trustee to give such consent or take
such action; and provided, further, that where a consent or action under the
Indenture is only effective against each holder of Junior Subordinated
Debentures who has consented thereto, such consent or action will only be
effective against a holder of Preferred Securities who directs the Institutional
Trustee to give such consent or take such action. If the Institutional Trustee
fails to enforce its rights under the Junior Subordinated Debentures after a
holder of record of Preferred Securities has made a written request, such holder
of record of Preferred Securities may institute a legal proceeding directly
against Fleet to enforce the Institutional Trustee's rights under the Junior
Subordinated Debentures without first instituting any legal proceeding against
the Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of Fleet to pay interest or principal
on the Junior Subordinated Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
holder of Preferred Securities may institute a Direct Action for enforcement of
payment to such holder of the principal of, or interest on, the Junior
Subordinated Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such holder on or after the
respective due date specified in the Junior Subordinated Debentures. The
Institutional Trustee shall notify all holders of the Preferred Securities of
any notice of default received from the Debt Trustee with respect to the Junior
Subordinated Debentures. Such notice shall state that such Indenture Event of
Default also constitutes a Declaration Event of Default. Except with respect to
directing the time, method and place of conducting a proceeding for a remedy,
the Institutional Trustee shall not take any of the actions described in clauses
(i), (ii) or (iii) above unless the Institutional Trustee has obtained an
opinion of a nationally recognized tax counsel experienced in such matters to
the effect that, as a result of such action, the Trust will not fail to be
classified as a grantor trust for United States federal income tax purposes.
58
<PAGE>
In the event the consent of the Institutional Trustee, as the holder of the
Junior Subordinated Debentures, is required under the Indenture with respect to
any amendment, modification or termination of the Indenture, the Institutional
Trustee shall request the direction of the holders of the Trust Securities with
respect to such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by a majority
in liquidation amount of the Trust Securities voting together as a single class;
provided, however, that where a consent under the Indenture would require the
consent of a Super-Majority, the Institutional Trustee may only give such
consent at the direction of the holders of at least the proportion in
liquidation amount of the Trust Securities which the relevant Super-Majority
represents of the aggregate principal amount of the Junior Subordinated
Debentures outstanding; and provided, further, that where a consent or action
under the Indenture is only effective against each holder of Junior Subordinated
Debentures who has consented thereto, such consent or action will only be
effective against a holder of Preferred Securities who directs the Institutional
Trustee to give such consent or take such action. The Institutional Trustee
shall not take any such action in accordance with the directions of the holders
of the Trust Securities unless the Institutional Trustee has obtained an opinion
of a nationally recognized tax counsel experienced in such matters to the effect
that for the purposes of United States federal income tax, the Trust will not be
classified as other than a grantor trust.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities may be
given at a separate meeting of holders of Preferred Securities convened for such
purpose, at a meeting of all of the holders of Trust Securities or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Preferred Securities. Each such notice will
include a statement setting forth the following information: (i) the date of
such meeting or the date by which such action is to be taken; (ii) a description
of any resolution proposed for adoption at such meeting on which such holders
are entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the holders of Preferred Securities will be required for the Trust to redeem
and cancel Preferred Securities or distribute Junior Subordinated Debentures in
accordance with the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned at such time by Fleet or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, Fleet, shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if such Preferred Securities
were not outstanding.
The procedures by which holders of Preferred Securities may exercise their
voting rights are described below. See "--Book-Entry; Delivery and Form."
Holders of the Preferred Securities will have no rights to appoint or remove
the Regular Trustees, who may be appointed, removed or replaced solely by Fleet
as the holder of all of the Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by the Regular
Trustees (and in certain circumstances the Institutional Trustee), provided
that, if any proposed amendment provides for, or the Regular Trustees otherwise
propose to effect, (i) any action that would adversely affect the powers,
preferences or special rights of the Trust Securities, whether by way of
amendment to the Declaration or otherwise or (ii) the dissolution, winding-up or
termination of the Trust other than pursuant to the terms of the Declaration,
then the holders of the Trust Securities voting together as a single class will
be entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with
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the approval of at least a majority in liquidation amount of the Trust
Securities affected thereby; provided, that, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Preferred
Securities or the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a majority in liquidation
amount of such class of Trust Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for purposes of United States federal income taxation as other
than a grantor trust, (ii) reduce or otherwise adversely affect the powers of
the Institutional Trustee or (iii) cause the Trust to be deemed an "investment
company" which is required to be registered under the 1940 Act.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body, except as
described below. The Trust may, with the consent of the Regular Trustees and
without the consent of the holders of the Trust Securities, the Institutional
Trustee or the Delaware Trustee, consolidate, amalgamate, merge with or into, or
be replaced by a trust organized as such under the laws of any State of the
United States; provided, that (i) if the Trust is not the survivor, such
successor entity either (a) expressly assumes all of the obligations of the
Trust under the Trust Securities or (b) substitutes for the Preferred Securities
other securities having substantially the same terms as the Trust Securities
(the "Successor Securities"), so long as the Successor Securities rank the same
as the Trust Securities rank with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) Fleet expressly acknowledges a
trustee of such successor entity possessing the same powers and duties as the
Institutional Trustee as the holder of the Junior Subordinated Debentures, (iii)
the Preferred Securities or any Successor Securities are listed, or any
Successor Securities will be listed upon notification of issuance, on any
national securities exchange or with another organization on which the Preferred
Securities are then listed or quoted, (iv) such merger, consolidation,
amalgamation or replacement does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the holders of the Trust Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the holders'
interest in the new entity), (vi) such successor entity has a purpose identical
to that of the Trust, (vii) prior to such merger, consolidation, amalgamation or
replacement, Fleet has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect that,
(a) such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities (including any Successor Securities) in any material respect (other
than with respect to any dilution of the holders' interest in the new entity),
and (b) following such merger, consolidation, amalgamation or replacement,
neither the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act and (viii) Fleet guarantees the
obligations of such successor entity under the Successor Securities at least to
the extent provided by the Preferred Securities Guarantee and the Common
Securities Guarantee (as defined herein). Notwithstanding the foregoing, the
Trust shall not, except with the consent of holders of 100 percent in
liquidation amount of the Trust Securities, consolidate, amalgamate, merge with
or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if such
consolidation, amalgamation, merger or replacement would cause the Trust or the
successor entity to be classified as other than a grantor trust for United
States federal income tax purposes.
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BOOK-ENTRY; DELIVERY AND FORM
Preferred Securities will be issued in fully registered form. Investors may
elect to hold their Preferred Securities directly or, subject to the rules and
procedures of a Depository Institution described below, hold their interest in a
global certificate (the "Preferred Securities Global Certificate") registered in
the name of a Depository Institution or its nominee. However, tendering holders
of Depositary Shares held in global form shall initially receive an interest in
the Preferred Securities Global Certificate and tendering holders of Depositary
Shares held directly in certificated form shall initially receive Preferred
Securities in certificated form, in each case unless otherwise specified in the
Letter of Transmittal. See "The Offer-- Procedures for Tendering."
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interest in a global Preferred Security.
A Depository Institution holds securities that its participants
("Participants") deposit with the Depository Institution. A Depository
Institution 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, banks, trust companies,
clearing corporations, and certain other organizations ("Direct Participants").
A Depository Institution is owned by a number of its Direct Participants and by
the NYSE, the American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the Depository Institution's system is also
available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants"'). The rules
applicable to a Depository Institution and its Participants are on file with the
Commission.
Upon issuance of a Preferred Securities Global Certificate, the Depository
Institution will credit on its book-entry registration and transfer system the
number of Preferred Securities represented by such Preferred Securities Global
Certificate to the accounts of institutions that have accounts with the
Depository Institution. Ownership of beneficial interests in a Preferred
Securities Global Certificate will be limited to Participants or persons that
may hold interests through Participants. The ownership interest of each actual
purchaser of each Preferred Security ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from the Depository Institution of their
purchases, but Beneficial Owners are expected to receive written confirmations
providing details of the transactions, as well as periodic statements of their
holdings, from the Direct or Indirect Participants through which the Beneficial
Owners purchased Preferred Securities. Transfers of ownership interests in the
Preferred Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners.
A Depository Institution has no knowledge of the actual Beneficial Owners of
the Preferred Securities; a Depository Institution's records reflect only the
identity of the Direct Participants to whose accounts such Preferred Securities
are credited, which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on behalf of their
customers. So long as a Depository Institution, or its nominee, is the owner of
a Preferred Securities Global Certificate, a Depository Institution or such
nominee, as the case may be, will be considered the sole owner and holder of
record of the Preferred Securities represented by such Preferred Securities
Global Certificate for all purposes.
Conveyance of notices and other communications by a Depository Institution
to Direct Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
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Redemption notices shall be sent to the Depository Institution. If less than
all of the Preferred Securities are being redeemed, the Depository Institution
will reduce pro rata (subject to adjustment to eliminate fractional Preferred
Securities) the amount of interest of each Direct Participant in the Preferred
Securities to be redeemed.
Although voting with respect to the Preferred Securities is limited, in
those instances in which a vote is required, the Depository Institution will not
consent or vote with respect to Preferred Securities. Under its usual
procedures, the Depository Institution would mail an Omnibus Proxy to the Trust
as soon as possible after the record date. The Omnibus Proxy assigns the
Depository Institution's consenting or voting rights to those Direct
Participants to whose accounts the Preferred Securities are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
Distribution payments on the Preferred Securities represented by a Preferred
Securities Global Certificate will be made by the Trust to the Depository
Institution. The Depository Institution's practice is to credit Direct
Participants' accounts on the relevant payment date in accordance with their
respective holdings shown on a Depository Institution's records unless the
Depository Institution has reason to believe that it will not receive payments
on such payment date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices and will be the
responsibility of such Participants and not of a Depository Institution, the
Trust or Fleet, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of distributions to a Depository Institution
is the responsibility of the Trust, disbursement of such payments to Direct
Participants is the responsibility of the Depository Institution, and
disbursement of such payments to the Beneficial Owners is the responsibility of
Direct and Indirect Participants.
A Depository Institution may discontinue providing its services as
securities depository with respect to the Preferred Securities at any time by
giving reasonable notice to the Trust. Under such circumstances, if a successor
securities depository is not obtained, Preferred Security certificates will be
required to be printed and delivered. Additionally, the Trust may decide to
discontinue use of the system of book-entry transfers through the Depository
Institution (or a successor depository). In that event, certificates for the
Preferred Securities will be printed and delivered.
The information in this section concerning the Depository Institution and
the Depository Institution's book-entry system has been obtained from sources
that the Trust and Fleet believe to be reliable, but the Trust and Fleet take no
responsibility for the accuracy thereof.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
The Institutional Trustee, prior to the occurrence of a default with respect
to the Trust Securities and after the curing of any defaults that may have
occurred, undertakes to perform only such duties as are specifically set forth
in the Declaration and, after default, shall exercise the same degree of care as
a prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provisions, the Institutional Trustee is under no obligation to
exercise any of the powers vested in it by the Declaration at the request of any
holder of Preferred Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The holders of Preferred Securities will not be required to offer such
indemnity in the event such holders, by exercising their voting rights, direct
the Institutional Trustee to take any action it is empowered to take under the
Declaration following a Declaration Event of Default. The Institutional Trustee
also serves as trustee under the Preferred Securities Guarantee and the
Indenture. Fleet or its affiliates conduct certain banking transactions with the
Institutional Trustee and its affiliates in the ordinary course of their
business.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
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MISCELLANEOUS
The Regular Trustees are authorized and directed to operate the Trust in
such a way so that the Trust will not be required to register as an "investment
company" under the 1940 Act or characterized as other than a grantor trust for
United States federal income tax purposes. Fleet is authorized and directed to
conduct its affairs so that the Junior Subordinated Debentures will be treated
as indebtedness of Fleet for United States federal income tax purposes. In this
connection, Fleet and the Regular Trustees are authorized to take any action,
not inconsistent with applicable law, the certificate of trust of the Trust or
the articles of incorporation of Fleet, that each of Fleet and the Regular
Trustees determine in their discretion to be necessary or desirable to achieve
such end, as long as such action does not adversely affect the interests of the
holders of the Preferred Securities or vary the terms thereof.
Holders of the Preferred Securities have no preemptive rights.
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DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Preferred
Securities Guarantee which will be executed and delivered by Fleet for the
benefit of the holders from time to time of Preferred Securities. The Preferred
Securities Guarantee will be qualified as an indenture under the Trust Indenture
Act. The First National Bank of Chicago will act as the Guarantee Trustee under
the Preferred Securities Guarantee for purposes of the Trust Indenture Act. The
terms of the Preferred Securities Guarantee will be those set forth in the
Preferred Securities Guarantee and those made part of the Preferred Securities
Guarantee by the Trust Indenture Act. The summary of the material terms of the
Preferred Securities Guarantee does not purport to be complete and is subject in
all respects to the provisions of, and is qualified in its entirety by reference
to, the form of Preferred Securities Guarantee, which is filed as an exhibit to
the Registration Statement of which this Prospectus forms a part, and the Trust
Indenture Act. Each Preferred Securities Guarantee will be held by the Guarantee
Trustee for the benefit of the holders of the Preferred Securities of the Trust.
GENERAL
Pursuant to the Preferred Securities Guarantee, Fleet will agree, to the
extent set forth therein, to pay in full to the holders of the Preferred
Securities issued by the Trust, the Guarantee Payments (as defined herein)
(except to the extent paid by the Trust), as and when due, regardless of any
defense, right of set-off or counterclaim which the Trust may have or assert.
The following payments with respect to Preferred Securities issued by the Trust,
to the extent not paid by the Trust (the "Guarantee Payments"), will be subject
to the Preferred Securities Guarantee thereon (without duplication): (i) any
accrued and unpaid distributions which are required to be paid on the Preferred
Securities, to the extent the Trust shall have funds available therefor; (ii)
the Redemption Price, to the extent the Trust has funds available therefor with
respect to any Preferred Securities called for redemption by the Trust; and
(iii) upon a voluntary or involuntary dissolution, winding-up or termination of
the Trust (other than in connection with the distribution of Junior Subordinated
Debentures to the holders of Preferred Securities or the redemption of all of
the Preferred Securities), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid distributions on the Preferred Securities to
the date of payment, to the extent the Trust has funds available therefor and
(b) the amount of assets of the Trust remaining available for distribution to
holders of such Preferred Securities in liquidation of the Trust. Fleet's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by Fleet to the holders of Preferred Securities or by causing
the Trust to pay such amounts to such holders.
The Preferred Securities Guarantee will not apply to any payment of
distributions except to the extent the Trust shall have funds available
therefor. If Fleet does not make interest payments on the Junior Subordinated
Debentures purchased by the Trust, the Trust will not pay distributions on the
Preferred Securities issued by the Trust and will not have funds available
therefor.
The Preferred Securities Guarantee, when taken together with Fleet's
obligations under the Junior Subordinated Debentures, the Indenture and the
Declaration, including its obligations to pay costs, expenses, debts and
liabilities of the Trust (other than with respect to the Trust Securities),
provides a full and unconditional guarantee on a subordinated basis by Fleet of
payments due on the Preferred Securities.
Fleet has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Trust with respect to the Common Securities
(the "Common Securities Guarantee") to the same extent as the Preferred
Securities Guarantee, except that upon an event of default under the Indenture,
holders of Preferred Securities shall have priority over holders of Common
Securities with respect to distributions and payments on liquidation, redemption
or otherwise.
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CERTAIN COVENANTS OF FLEET
In the Preferred Securities Guarantee, Fleet will covenant that, so long as
any Preferred Securities issued by the Trust remain outstanding, if there shall
have occurred any event that would constitute an event of default under the
Preferred Securities Guarantee or the Indenture, or if Fleet has exercised its
option to defer interest payments on the Junior Subordinated Debentures by
extending the interest payment period and such period or extension thereof shall
be continuing, then (i) Fleet shall not declare or pay any dividend on, make a
distribution with respect to, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (a)
purchases or acquisitions of shares of Fleet Common Stock in connection with the
satisfaction by Fleet of its obligations under any employee benefit plans or any
other contractual obligation of Fleet (other than a contractual obligation
ranking pari passu with or junior to the Junior Subordinated Debentures), (b) as
a result of a reclassification of Fleet capital stock or the exchange or
conversion of one class or series of Fleet capital stock for another class or
series of Fleet capital stock, or (c) the purchase of fractional interests in
shares of Fleet capital stock pursuant to the conversion or exchange provisions
of such Fleet capital stock or the security being converted or exchanged), (ii)
Fleet shall not make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities issued by Fleet which rank
pari passu with or junior to the Junior Subordinated Debentures and (iii) Fleet
shall not make any guarantee payments with respect to the foregoing (other than
pursuant to the Preferred Securities Guarantee).
MODIFICATION OF THE PREFERRED SECURITIES GUARANTEE; ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of Preferred Securities (in which case no vote will be required), the
Preferred Securities Guarantee may be amended only with the prior approval of
the holders of not less than a majority in liquidation amount of the outstanding
Preferred Securities issued by the Trust. All guarantees and agreements
contained in the Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of Fleet and shall inure to the
benefit of the holders of the Preferred Securities of the Trust then
outstanding. Except in connection with any merger or consolidation of Fleet with
or into another entity or any sale, transfer or lease of Fleet's assets to
another entity, each as permitted by the Indenture, Fleet may not assign its
rights or delegate its obligations under such Preferred Securities Guarantee
without the prior approval of the holders of at least a majority in liquidation
amount of the outstanding Preferred Securities issued by the Trust.
TERMINATION
The Preferred Securities Guarantee will terminate as to the Preferred
Securities issued by the Trust (a) upon full payment of the Redemption Price of
all Preferred Securities of the Trust, (b) upon distribution of the Junior
Subordinated Debentures held by the Trust to the holders of the Trust Securities
of the Trust or (c) upon full payment of the amounts payable in accordance with
the Declaration upon liquidation of the Trust. Notwithstanding the foregoing,
the Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of Preferred
Securities issued by the Trust must restore payment of any sums paid under the
Preferred Securities or the Preferred Securities Guarantee.
EVENTS OF DEFAULT
An event of default under the Preferred Securities Guarantee will occur upon
the failure of Fleet to perform any of its payment obligations thereunder.
The holders of a majority in liquidation amount of the Preferred Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Preferred Guarantee Trustee in respect of the
Preferred Securities Guarantee or to direct the exercise of any trust or power
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conferred upon the Guarantee Trustee under the Preferred Securities. Any holder
of Preferred Securities may institute a legal proceeding directly against Fleet
to enforce the Guarantee Trustee's rights under the Preferred Securities
Guarantee, without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity.
STATUS OF THE PREFERRED SECURITIES GUARANTEE
The Preferred Securities Guarantee will constitute an unsecured obligation
of Fleet and will rank (i) subordinate and junior in right of payment to all
other liabilities of Fleet, except those made pari passu or subordinate by their
terms, (ii) pari passu with the most senior preferred or preference stock now or
hereafter issued by Fleet and with any guarantee now or hereafter entered into
by Fleet in respect of any preferred or preference stock of any affiliate of
Fleet, and (iii) senior to Fleet Common Stock. The terms of the Preferred
Securities provide that each holder of Preferred Securities issued by the Trust
by acceptance thereof agrees to the subordination provisions and other terms of
the Preferred Securities Guarantee.
The Preferred Securities Guarantee will constitute a guarantee of payment
and not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the guarantor to enforce its rights under the
Preferred Securities Guarantee without instituting a legal proceeding against
any other person or entity).
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
the Preferred Securities Guarantee, undertakes to perform only such duties as
are specifically set forth in the Preferred Securities Guarantee and, after
default, shall exercise the same degree of care as a prudent individual would
exercise in the conduct of his or her own affairs. Subject to such provisions,
the Guarantee Trustee is under no obligation to exercise any of the powers
vested in it by the Preferred Securities Guarantee at the request of any holder
of Preferred Securities, unless offered reasonable indemnity against the costs,
expenses and liabilities which might be incurred thereby.
Fleet or its affiliates conduct certain banking transactions with the
Guarantee Trustee and its affiliates in the ordinary course of business.
GOVERNING LAW
The Preferred Securities Guarantee will be governed by and construed in
accordance with the internal laws of the State of New York.
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DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
Set forth below is a description of the specific terms of the Junior
Subordinated Debentures which will be deposited in the Trust as trust assets.
The following description of the material terms of the Indenture, dated as of
December 11, 1996 (the "Base Indenture"), between Fleet and The First National
Bank of Chicago as Trustee (the "Debt Trustee"), as supplemented by a Second
Supplemental Indenture (the Base Indenture, as so supplemented, is hereinafter
referred to as the "Indenture"), does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, the description in the
Indenture and the Supplemental Indenture, the forms of which are filed as
Exhibits to the Registration Statement of which this Prospectus forms a part.
Certain capitalized terms used herein are defined in the Indenture.
The Indenture provides for the issuance of debentures, notes (including the
Junior Subordinated Debentures) or other evidences of indebtedness by Fleet in
an unlimited amount from time to time. The Junior Subordinated Debentures
constitute a separate series under the Base Indenture.
Fleet will have the right at any time to liquidate the Trust and cause the
Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities. If the Junior Subordinated Debentures are distributed to the holders
of the Preferred Securities, Fleet will use its best efforts to have the Junior
Subordinated Debentures listed on the NYSE or on such other national securities
exchange or similar organization on which the Preferred Securities are then
listed or quoted.
GENERAL
The Junior Subordinated Debentures are unsecured, subordinated obligations
of Fleet, limited in aggregate principal amount to the aggregate liquidation
preference of (i) the Preferred Securities issued by the Trust in the Offer and
(ii) the amount of proceeds received by the Trust from the sale of the Common
Securities to Fleet.
The Junior Subordinated Debentures are not subject to any sinking fund
provision. The entire principal amount of the Junior Subordinated Debentures
will mature and become due and payable, together with any accrued and unpaid
interest thereon including Compound Interest (as defined herein) and Additional
Interest (as defined herein), if any, on February 15, 2027, subject to the right
of Fleet to shorten the maturity date to a date no earlier than April 15, 2001
and to extend the maturity date to a date no later than February 15, 2046,
subject in each case to certain conditions.
If Junior Subordinated Debentures are distributed to holders of Preferred
Securities in liquidation of such holders' interests in the Trust, such Junior
Subordinated Debentures will be so issued in fully registered certificated form
in denominations of $25 and integral multiples thereof and may be transferred or
exchanged at the offices described below. Payments of principal and interest on
Junior Subordinated Debentures will be payable, the transfer of the Junior
Subordinated Debentures will be registrable, and Junior Subordinated Debentures
will be exchangeable for Junior Subordinated Debentures of other denominations
of a like aggregate principal amount, at the corporate trust office of the
Institutional Trustee in New York, New York; provided, that payment of interest
may be made at the option of Fleet by check mailed to the address of the holder
entitled thereto or by wire transfer to an account appropriately designated by
the holder entitled thereto. Notwithstanding the foregoing, so long as the
holder of any Junior Subordinated Debentures is the Institutional Trustee, the
payment of principal and interest on the Junior Subordinated Debentures held by
the Institutional Trustee will be made at such place and to such account as may
be designated by the Institutional Trustee.
The Indenture does not limit the aggregate principal amount of securities
which may be issued thereunder and does not contain provisions that afford
holders of the Junior Subordinated Debentures protection in the event of a
highly leveraged transaction or other similar transaction involving Fleet that
may adversely affect such holders.
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SUBORDINATION
The Indenture provides that the Junior Subordinated Debentures are
subordinated and junior in right of payment to all present and future Senior
Indebtedness and Other Financial Obligations of Fleet (each as defined herein)
and rank pari passu with and are equivalent to creditor obligations of those
holding general unsecured claims not entitled to statutory priority under the
United States Bankruptcy Code or otherwise. In addition, no payment may be made
of the principal of, premium, if any, or interest on the Junior Subordinated
Debentures, or in respect of any redemption, retirement, purchase or other
acquisition of any of the Junior Subordinated Debentures, 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 Junior Subordinated Debentures
or any redemption, retirement, purchase or other acquisition of any of the
Junior Subordinated Debentures, permitting the holders of such Senior
Indebtedness (or a trustee on behalf of the holders thereof) to accelerate the
maturity thereof. Upon any distribution of assets of Fleet to creditors upon any
dissolution, winding-up, liquidation or reorganization, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings,
the payment of the principal of, and interest on, the Junior Subordinated
Debentures will, to the extent set forth in the Indenture, be subordinated in
right of payment to the prior payment in full of all Senior Indebtedness and
Other Financial Obligations of Fleet. Upon any payment or distribution of assets
of Fleet 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 Fleet, the holders of
all Senior Indebtedness and the holders of Other Financial Obligations will
first be entitled to receive payment in full of all amounts due or to become due
thereon before the holders of the Junior Subordinated Debentures will be
entitled to receive and retain any payment in respect of the principal of, or
interest on, the Junior Subordinated Debentures.
The term "Senior Indebtedness" means, with respect to Fleet, (i) the
principal, premium, if any, and interest in respect of (a) indebtedness of Fleet
for money borrowed and (b) indebtedness evidenced by securities, debentures,
bonds or other similar instruments issued by Fleet, (ii) all capital lease
obligations of Fleet, (iii) all obligations of Fleet issued or assumed as the
deferred purchased price of property, all conditional sale obligations of Fleet
and all obligations of Fleet under any title retention agreement (but excluding
trade accounts payable arising in the ordinary course of business), (iv) all
obligations of Fleet for the reimbursement of any letter of credit, banker's
acceptance, security purchase facility or similar credit transaction, (v) all
obligations of the type referred to in clauses (i) through (iv) above of other
persons for the payment of which Fleet is responsible or liable as obligor,
guarantor or otherwise and (vi) all obligations of the type referred to in
clauses (i) through (v) above of other persons secured by any lien on any
property or asset of Fleet (whether or not such obligation is assumed by Fleet),
except that Senior Indebtedness shall not include (i) any such indebtedness that
is by its terms subordinated to or ranks pari passu with the Junior Subordinated
Debentures and (ii) any indebtedness between and among Fleet or its affiliates,
including all other debt securities and guarantees in respect to those debt
securities, issued to any other trust, or a trustee of such trust, partnership
or other entity affiliated with Fleet that is a financing vehicle of Fleet (a
"financing entity") in connection with the issuance by such financing entity of
preferred securities or other securities that rank pari passu with, or junior
to, the Preferred Securities.
The term "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
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Senior Indebtedness and (b) obligations on account of indebtedness for money
borrowed ranking pari passu with or subordinate to the Junior Subordinated
Debentures.
Upon satisfaction of all claims of all Senior Indebtedness and Other
Financial Obligations then outstanding, the rights of the holders of the Junior
Subordinated Debentures will be subrogated to the rights of the holders of
Senior Indebtedness and Other Financial Obligations of Fleet to receive payments
or distributions applicable to Senior Indebtedness and Other Financial
Obligations until all amounts owing on the Junior Subordinated Debentures are
paid in full. Such Senior Indebtedness and Other Financial Obligations shall
continue to be Senior Indebtedness and Other Financial Obligations and be
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of such Senior Indebtedness or
Other Financial Obligations.
The Indenture does not limit the aggregate amount of Senior Indebtedness or
Other Financial Obligations that may be issued or entered into by Fleet. As of
September 30, 1996, Senior Indebtedness and Other Financial Obligations of Fleet
aggregated approximately $4.0 billion (holding company only). In addition,
because Fleet is a holding company, the Junior Subordinated Debentures are
effectively subordinated to all existing and future liabilities of Fleet's
subsidiaries, including depositors.
OPTIONAL REDEMPTION
Fleet shall have the right to redeem the Junior Subordinated Debentures, (i)
in whole or in part, from time to time, on or after April 15, 2001, at a
prepayment price (the "Optional Prepayment Price") equal to 100% of the
principal amount thereof or, (ii) in whole but not in part, prior to April 15,
2001, upon the occurrence of a Special Event at the Special Event Prepayment
Price specified below; in either case, upon not less than 30 nor more than 60
days' notice, plus any accrued and unpaid interest, including Additional
Interest, if any, to the redemption date. Such redemption may require prior
approval of the Federal Reserve Board if such approval is then required under
applicable law, rules, guidelines or policies. If, prior to April 15, 2001, a
Special Event (as defined below) shall occur and be continuing, Fleet shall have
the right, upon not less than 30 and no more than 60 days notice, at its option
and subject to receipt of prior approval of the Federal Reserve Board if such
approval is then required under applicable law, rules, guidelines or policies,
to redeem the Junior Subordinated Debentures, in whole (but not in part), for
cash within 90 days following the occurrence of such Special Event at a
prepayment price (the "Special Event Prepayment Price") equal to (i) 104% of the
principal amount of the Debentures if prepaid during the period commencing on
the Accrual Date through and including April 14, 1998 and (ii) the percentage of
the principal amount of the Junior Subordinated Debentures specified below, if
prepaid during the 12-month period beginning April 15 of the years indicated
below plus, in each case, accrued interest thereon to the date of prepayment:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- --------------------------------------------------------------------------------------- -----------
<S> <C>
1998................................................................................... 103%
1999................................................................................... 102
2000................................................................................... 101
2001 and thereafter.................................................................... 100
</TABLE>
Following such redemption, all Trust Securities shall be redeemed by the
Trust at a redemption price equal to the Special Event Prepayment Price (the
"Special Event Redemption Price") plus accrued and unpaid distributions through
the redemption date.
A "Special Event" means a Tax Event or a Regulatory Capital Event (each as
defined herein), as the case may be.
A "Tax Event" means that the Regular Trustees shall have received an opinion
of nationally recognized independent tax counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws or any regulations
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thereunder of the United States or any political subdivision or taxing authority
thereof or therein, or (b) any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or such pronouncement or decision is announced on or after
the date of original issuance of the Junior Subordinated Debentures, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90 days
of the date of such opinion, subject to United States federal income tax with
respect to income received or accrued on the Junior Subordinated Debentures,
(ii) interest payable by Fleet on the Junior Subordinated Debentures is not, or
within 90 days of the date of such opinion will not be, deductible by Fleet, in
whole or in part, for United States federal income tax purposes, or (iii) the
Trust is, or will be within 90 days of the date of such opinion, subject to more
than a DE MINIMIS amount of other taxes, duties or other governmental charges.
A "Regulatory Capital Event" means that Fleet shall have received an opinion
of independent bank regulatory counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, or change (including any announced
prospective change) in the laws (or any regulations thereunder) of the United
States or any rules, guidelines or policies of the Federal Reserve Board or (b)
any official amendment or change is effective or such pronouncement or decision
is announced on or after the date of original issuance of the Preferred
Securities, the Preferred Securities do not constitute, or within 90 days of the
date thereof, will not constitute, Tier 1 capital (or its then equivalent);
provided, however, that the distribution of the Junior Subordinated Debentures
in connection with the liquidation of the Trust by Fleet and the treatment
thereafter of the Junior Subordinated Debentures as other than Tier 1 capital
shall not and of itself constitute a Regulatory Capital Event unless such
liquidation shall have occurred in connection with a Tax Event.
OPTION TO CHANGE MATURITY DATE
Fleet will have the right at any time to shorten the maturity of the Junior
Subordinated Debentures to a date not earlier than April 15, 2001. The exercise
of such right is subject to the prior approval of the Federal Reserve Board if
such approval is then required under applicable law, rules, guidelines or
policies.
Fleet will also have the right to extend the maturity of the Junior
Subordinated Debentures to a date no later than February 15, 2046, so long as at
the time such election is made and at the time such extension commences (i)
Fleet is not in bankruptcy, otherwise insolvent or in liquidation, (ii) Fleet is
not in default in the payment of any interest or principal on the Junior
Subordinated Debentures, (iii) the Trust is not in arrears on payments of
distributions on the Preferred Securities and no deferred distributions on the
Preferred Securities are accumulated and (iv) the Junior Subordinated
Debentures, or, if the Preferred Securities are rated, the Preferred Securities,
are rated at least BBB- by Standard & Poor's Ratings Services, at least Baa3 by
Moody's Investors Service, Inc. or at least the equivalent by any other
nationally recognized statistical rating organization. In the event that Fleet
elects to shorten or extend the maturity date of the Junior Subordinated
Debentures, it shall give notice to the Debt Trustee, and the Debt Trustee shall
give notice of such shortening or extension to the holders of the Junior
Subordinated Debentures no more than 90 and no less than 30 days prior to the
effectiveness thereof.
INTEREST
The Junior Subordinated Debentures shall bear interest at the rate of 8.00%
per annum from the Accrual Date, payable quarterly in arrears on March 31, June
30, September 30 and December 31 of each year (each an "Interest Payment Date"),
commencing March 31, 1997, to the person in whose name such Junior Subordinated
Debentures is registered on the March 15, June 15, September 15 and December 15
prior to the applicable Interest Payment Date.
The Junior Subordinated Debentures will also accrue interest at the rate of
7.25% per annum of the principal amount thereof from January 15, 1997 through
the Expiration Date, payable on March 31, 1997 to holders of the Junior
Subordinated Debentures on the record date for such distribution. No deferral of
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interest will be permitted with respect to interest accruing from January 15,
1997 through the Expiration Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full quarterly period for which interest is computed,
will be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable on the Junior
Subordinated Debentures is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, then
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as Fleet shall not be in default in the payment of interest on the
Junior Subordinated Debentures, Fleet shall have the right at any time, and from
time to time, during the term of the Junior Subordinated Debentures to defer
payments of interest by extending the interest payment period for a period not
exceeding 20 consecutive quarters or extending beyond the Stated Maturity, at
the end of which Extension Period, Fleet shall pay all interest then accrued and
unpaid (including any Additional Interest, as defined herein) together with
interest thereon compounded quarterly at the rate specified for the Junior
Subordinated Debentures to the extent permitted by applicable law ("Compound
Interest"); provided, that during any such Extension Period, (i) Fleet shall not
declare or pay any dividend on, make any distribution with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to any of
its capital stock (other than (a) purchases or acquisitions of shares of Fleet
Common Stock in connection with the satisfaction by Fleet of its obligations
under any employee benefit plans or any other contractual obligation of Fleet
(other than a contractual obligation ranking pari passu with or junior to the
Junior Subordinated Debentures), (b) as a result of a reclassification of Fleet
capital stock or the exchange or conversion of one class or series of Fleet's
capital stock for another class or series of Fleet capital stock or (c) the
purchase of fractional interests in shares of Fleet's capital stock pursuant to
the conversion or exchange provisions of such Fleet capital stock or the
security being converted or exchanged), (ii) Fleet shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by Fleet that rank pari passu with or junior to the
Junior Subordinated Debentures, and (iii) Fleet shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Preferred
Securities Guarantee). Prior to the termination of any such Extension Period,
Fleet may further defer payments of interest by extending the interest payment
period; provided, however, that, such Extension Period, including all such
previous and further extensions, may not exceed 20 consecutive quarters or
beyond the Stated Maturity of the Junior Subordinated Debentures. Upon the
termination of any Extension Period and the payment of all amounts then due,
Fleet may commence a new Extension Period, subject to the terms set forth in
this section. No interest during an Extension Period, except at the end thereof,
shall be due and payable. Fleet has no present intention of exercising its right
to defer payments of interest by extending the interest payment period on the
Junior Subordinated Debentures. If the Institutional Trustee shall be the sole
holder of the Junior Subordinated Debentures, Fleet shall give the Regular
Trustees and the Institutional Trustee notice of its selection of such Extension
Period one Business Day prior to the earlier of (i) the date distributions on
the Preferred Securities are payable or (ii) the date the Regular Trustees are
required to give notice to the NYSE (or other applicable self-regulatory
organization) or to holders of the Preferred Securities of the record date or
the date such distribution is payable. The Institutional Trustee shall give
notice of Fleet's selection of such Extension Period to the holders of the
Preferred Securities. If the Institutional Trustee shall not be the sole holder
of the Junior Subordinated Debentures, Fleet shall give the holders of the
Junior Subordinated Debentures notice of its selection of such Extension Period
ten Business Days prior to the earlier of (i) the Interest Payment Date or (ii)
the date upon which Fleet is required to give notice to the NYSE (or other
applicable
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self-regulatory organization) or to holders of the Junior Subordinated
Debentures of the record or payment date of such related interest payment.
ADDITIONAL INTEREST
If, at any time while the Institutional Trustee is the holder of any Junior
Subordinated Debentures, the Trust or the Institutional Trustee shall be
required to pay any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States, or
any other taxing authority, then, in any such case, Fleet will pay as additional
interest ("Additional Interest") on the Junior Subordinated Debentures such
additional amounts as shall be required so that the net amounts received and
retained by the Trust and by the Institutional Trustee after paying any such
taxes, duties, assessments or other governmental charges will be not less than
the amounts the Trust and the Institutional Trustee would have received had no
such taxes, duties, assessments or other governmental charges been imposed.
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed the Proposed Legislation,
which would, among other things, generally deny corporate issuers a deduction
for interest in respect of certain debt obligations, such as the Junior
Subordinated Debentures, issued on or after December 7, 1995 if such debt
obligations have a maximum term in excess of forty years or a maximum term in
excess of twenty years and are not shown as indebtedness on the issuer's
applicable consolidated balance sheet. On March 29, 1996, Senate Finance
Committee Chairman William V. Roth, Jr. and House Ways and Means Committee
Chairman Bill Archer issued the Joint Statement indicating their intent that the
Proposed Legislation, if adopted by either of the tax- writing committees of
Congress, would have an effective date that is no earlier than the date of
"appropriate Congressional action." In addition, subsequent to the publication
of the Joint Statement, Senator Daniel Patrick Moynihan and Representatives Sam
M. Gibbons and Charles B. Rangel wrote the Democrat Letters, which concurred
with the view expressed in the Joint Statement. If the principles contained in
the Joint Statement and the Democrat Letters were followed and if the Proposed
Legislation were enacted, such legislation would not apply to the Junior
Subordinated Debentures. There can be no assurance, however, that the effective
date guidance contained in the Joint Statement will be incorporated into the
Proposed Legislation, if enacted, or that other legislation enacted after the
date hereof will not otherwise adversely affect the ability of Fleet to deduct
the interest payable on the Junior Subordinated Debentures. Accordingly, there
can be no assurance that a Tax Event will not occur. The occurrence of a Tax
Event may result in the redemption of the Junior Subordinated Debentures for
cash, in which event the holders of the Preferred Securities would receive cash
in redemption of their Preferred Securities. See "Description of the Preferred
Securities--Special Event Redemption."
INDENTURE EVENTS OF DEFAULT
If any Indenture Event of Default shall occur and be continuing, the
Institutional Trustee, as the holder of the Junior Subordinated Debentures, will
have the right to declare the principal of and the interest on the Junior
Subordinated Debentures (including any Compound Interest and Additional
Interest, if any) and any other amounts payable under the Indenture to be
forthwith due and payable and to enforce its other rights as a creditor with
respect to the Junior Subordinated Debentures.
The Indenture provides that any one or more of the following described
events which has occurred and is continuing constitutes an "Indenture Event of
Default" with respect to the Junior Subordinated Debentures:
(a) default for 30 days in payment of any interest on the Junior
Subordinated Debentures, including any Additional Interest in
respect thereof, when due; provided, however, that a valid
extension of the interest payment period by Fleet shall not
constitute a default in the payment of interest for this purpose;
or
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(b) default in payment of principal and premium, if any, on the
Junior Subordinated Debentures when due either at maturity, upon
redemption, by declaration or otherwise; provided, however, that a
valid extension of the maturity of such Junior Subordinated
Debentures shall not constitute a default for this purpose; or
(c) default by Fleet in the performance of any other of the
covenants or agreements in the Indenture which shall not have been
remedied for a period of 90 days after notice; or
(d) certain events of bankruptcy, insolvency or reorganization of
Fleet; or
(e) the voluntary or involuntary dissolution, winding-up or
termination of the Trust, except in connection with the
distribution of Junior Subordinated Debentures to the holders of
Trust Securities in liquidation of the Trust, the redemption of
all of the Trust Securities of the Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the
Declaration.
The Indenture provides that, if an Indenture Event of Default shall have
occurred and be continuing, either the Debt Trustee or the holders of not less
than 25 percent in aggregate principal amount of the Junior Subordinated
Debentures then outstanding may declare the principal of all the Junior
Subordinated Debentures to be due and payable immediately. The holders of a
majority in aggregate outstanding principal amount of the Junior Subordinated
Debentures may annul such declaration and waive the default if the default
(other than the non-payment of the principal of the Junior Subordinated
Debentures which has become due solely by such acceleration) has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by accleration has been deposited with the Debt Trustee.
An Indenture Event of Default also constitutes a Declaration Event of
Default. The holders of Preferred Securities in certain circumstances have the
right to direct the Institutional Trustee to exercise its rights as the holder
of the Junior Subordinated Debentures. See "Description of the Preferred
Securities-- Declaration Events of Default" and "--Voting Rights." If the
Institutional Trustee fails to enforce its rights under the Junior Subordinated
Debentures after a holder of record of Preferred Securities has made a written
request, such holder of record of Preferred Securities may institute a legal
proceeding directly against Fleet to enforce the Institutional Trustee's rights
under the Junior Subordinated Debentures without first instituting any legal
proceeding against the Institutional Trustee or any other person or entity.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of Fleet to pay
interest or principal on the Junior Subordinated Debentures on the date such
interest or principal is otherwise payable, Fleet acknowledges that a holder of
Preferred Securities may then institute a Direct Action for payment on or after
the respective due date specified in the Junior Subordinated Debentures.
Notwithstanding any payments made to such holder of Preferred Securities by
Fleet in connection with a Direct Action, Fleet shall remain obligated to pay
the principal of or interest on the Junior Subordinated Debentures held by the
Trust or the Institutional Trustee of the Trust, and Fleet shall be subrogated
to the rights of the holder of such Preferred Securities with respect to
payments on the Preferred Securities to the extent of any payments made by Fleet
to such holder in any Direct Action. Except as provided in the preceding
sentence and in the Preferred Securities Guarantee, the holders of Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of the Junior Subordinated Debentures.
CERTAIN COVENANTS OF FLEET
If (i) there shall have occurred any event that would constitute an
Indenture Event of Default or (ii) Fleet shall be in default with respect to its
payment of any obligations under the Preferred Securities Guarantee or the
Common Securities Guarantee or (iii) Fleet shall have given notice of its
election to defer payments of interest on the Junior Subordinated Debentures by
extending the interest payment period and such period, or any extension thereof,
shall be continuing, then (a) Fleet shall not declare or
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pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock (other than (x) purchases or acquisitions or shares of Common
Stock in connection with the satisfaction by Fleet of its obligations under any
employee benefit plans or any other contractual obligation of Fleet (other than
a contractual obligation ranking pari passu with or junior to the Junior
Subordinated Debentures), (y) as a result of a reclassification of Fleet capital
stock or the exchange or conversion of one class or series of Fleet capital
stock for another class or series of Fleet capital stock or (z) the purchase of
fractional interests in shares of Fleet capital stock pursuant to the conversion
or exchange provisions of such Fleet capital stock or the security being
converted or exchanged), (b) Fleet shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by Fleet which rank pari passu with or junior to such Junior
Subordinated Debentures and (c) Fleet shall not make any guarantee payments with
respect to the foregoing (other than pursuant to the Preferred Securities
Guarantee).
For so long as such Trust Securities remain outstanding, Fleet will covenant
(i) to directly or indirectly maintain 100 percent ownership of the Common
Securities of the Trust; provided, however, that any permitted successor of
Fleet under the Indenture may succeed to Fleet's ownership of the Common
Securities, (ii) to use its reasonable efforts to cause the Trust (a) to remain
a statutory business trust, except in connection with the distribution of Junior
Subordinated Debentures to the holders of Trust Securities in liquidation of the
Trust, the redemption of all of the Trust Securities of the Trust, or certain
mergers, consolidations or amalgamations, each as permitted by the Declaration,
and (b) to otherwise continue not to be treated as an association taxable as a
corporation or a partnership for United States federal income tax purposes and
(iii) to use its reasonable efforts to cause each holder of Trust Securities to
be treated as owning an undivided beneficial interest in the Junior Subordinated
Debentures. (Section 3.08)
BOOK-ENTRY AND SETTLEMENT
If any Junior Subordinated Debentures are distributed to holders of Trust
Securities (see "Description of the Preferred Securities"), such Junior
Subordinated Debentures will be issued in fully registered form. In such event,
investors may elect to hold their Junior Subordinated Debentures directly or,
subject to the rules and procedures of a Depository Institution, hold interests
in a global certificate registered in the name of a Depository Institution or
its nominee.
For a description of a Depository Institution and a Depository Institution's
book-entry system, see "Description of the Preferred Securities--Book-Entry;
Delivery and Form." As of the date of this Prospectus, the description herein of
a Depository Institution's book-entry system and Depository Institution's
practices as they relate to purchases, transfers, notices and payments with
respect to the Preferred Securities apply in all material respects to any Junior
Subordinated Debentures registered in the name of and held by a Depository
Institution or its nominee.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting Fleet and the Debt Trustee,
with the consent of the holders of not less than a majority in principal amount
of the Junior Subordinated Debentures of all series affected by such
modification at the time outstanding, and, in the case of the Junior
Subordinated Debentures, the holders of a majority in aggregate liquidation
amount of the Preferred Securities, to modify the Indenture or the Supplemental
Indenture or the rights of the holders of the Junior Subordinated Debentures;
provided that no such modification shall, without the consent of the holders of
each Junior Subordinated Debenture (and each Preferred Security, if applicable)
affected thereby, (i) extend the fixed maturity of the Junior Subordinated
Debentures, or reduce the principal amount thereof or any premium thereon, or
reduce any amount payable on redemption thereof, or reduce the rate or extend
the time of payment of interest thereon, or make the principal of, or interest
or premium on, the Junior Subordinated Debentures payable in any coin or
currency other than that provided in the Junior Subordinated Debentures, or
impair or affect the right of any holder of Junior Subordinated Debentures
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to institute suit for the payment thereof or the right of prepayment, if any, at
the option of the holder, (ii) reduce the aforesaid percentage of Junior
Subordinated Debentures the consent of the holders of which is required for any
such modification or (iii) otherwise materially adversely affect the interest of
the holders of any series of Junior Subordinated Debentures. (Section 9.02)
DEFEASANCE AND DISCHARGE
The Indenture provides that Fleet, at Fleet's option: (i) will be discharged
from any and all obligations in respect of the Junior Subordinated Debentures
(except for certain obligations to register the transfer or exchange of Junior
Subordinated Debentures, replace stolen, lost or mutilated Junior Subordinated
Debentures, maintain paying agencies and hold moneys for payment in trust) or
(ii) need not comply with certain restrictive covenants of the Indenture
(including those described herein under "Certain Covenants of Fleet"), in each
case if Fleet deposits, in trust with the Debt Trustee or a defeasance agent,
money or U.S. government obligations which through the payment of interest
thereon and principal thereof in accordance with their terms will provide money,
in an amount sufficient to pay all the principal of, and interest and premium,
if any, on, the Junior Subordinated Debentures on the dates such payments are
due in accordance with the terms of the Junior Subordinated Debentures. To
exercise any such option, Fleet is required to deliver to the Debt Trustee and
the defeasance agent, if any, an opinion of counsel to the effect that (a) the
deposit and related defeasance would not cause the holders of the Junior
Subordinated Debentures to recognize income, gain or loss for U.S. federal
income tax purposes and, in the case of a discharge pursuant to clause (i), such
opinion shall be accompanied by a private letter ruling to that effect received
by Fleet from the United States Internal Revenue Service or a revenue ruling
pertaining to a comparable form of transaction to that effect published by the
United States Internal Revenue Service, and (b) if listed on any national
securities exchange, such Junior Subordinated Debentures would not be delisted
from such exchange as a result of the exercise of such option. (Section 11.05)
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by,
and construed in accordance with, the internal laws of the State of New York.
MISCELLANEOUS
The Indenture will provide that Fleet will pay all fees and expenses related
to (i) the offering of the Trust Securities and the Junior Subordinated
Debentures, (ii) the organization, maintenance and dissolution of the Trust,
(iii) the retention of the Regular Trustees and (iv) the enforcement by the
Institutional Trustee of the rights of the holders of the Preferred Securities.
Fleet will have the right at all times to assign any of its respective
rights or obligations under the Indenture to a direct or indirect wholly-owned
subsidiary of Fleet; provided that, in the event of any such assignment, Fleet
will remain liable for all of their respective obligations. Subject to the
foregoing, the Indenture will be binding upon and inure to the benefit of the
parties thereto and their respective successors and assigns. The Indenture
provides that it may not otherwise be assigned by the parties thereto.
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DESCRIPTION OF THE PREFERRED STOCK AND DEPOSITARY SHARES
The summary of the terms of the Preferred Stock and the Depositary Shares
set forth below does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, the provisions of Fleet's Restated
Articles of Incorporation, as amended (the "Fleet Articles"), and the
Certificate of Designation for the Preferred Stock and the Deposit Agreement (as
defined herein) for the Depositary Shares. Whenever defined terms in the
applicable Deposit Agreement are referred to in this "Description of the
Preferred Stock and Depositary Shares," such defined terms are incorporated by
reference herein.
PREFERRED STOCK
GENERAL
The Preferred Stock presently consists of 1,100,000 shares, none of which
are owned by Fleet. The holders of the Preferred Stock do not have any
preemptive rights with respect to any shares of capital stock of Fleet or any
other securities of Fleet convertible into or carrying rights or options to
purchase any such shares. The Preferred Stock is not subject to any sinking fund
or other obligation of Fleet to redeem or retire the Preferred Stock.
RANKING
The Preferred Stock ranks senior with respect to payment of dividends and
amounts payable upon liquidation, dissolution or winding up to the Common Stock
of Fleet or any other class or series of stock of Fleet ranking junior to the
Preferred Stock upon liquidation.
While any shares of Preferred Stock are outstanding, Fleet may not authorize
the creation or issue of any class or series of stock that ranks senior to the
Preferred Stock as to dividends or upon liquidation, dissolution or winding up
without the consent of the holders of 66 2/3% of the outstanding shares of
Preferred Stock and any other series of Fleet's $1 par preferred stock ranking
on a parity with the Preferred Stock either as to dividends or upon liquidation.
Fleet may create additional classes or series of preferred stock or authorize,
or increase the authorized amount of, any shares of any class or series of
preferred stock ranking on a parity with or junior to the Preferred Stock
without the consent of any holder of Preferred Stock. See "--Voting Rights."
DIVIDENDS
Holders of shares of Preferred Stock are entitled to receive, when, as and
if declared by the Fleet Board out of assets of Fleet legally available
therefor, cumulative cash dividends at a rate per annum that has been fixed at
7.25% of the $250 liquidation preference of the Preferred Stock (or $1.8125 per
Depositary Share). Dividends on the Preferred Stock are payable quarterly in
arrears on January 15, April 15, July 15 and October 15 of each year (and, in
the case of any accrued but unpaid dividends, at such additional times and for
such interim periods, if any, as determined by the Fleet Board), at such annual
rate. Each such dividend is payable to holders of record as they appear on the
stock records of Fleet at the close of business on the respective record dates,
which is not more than 30 days preceding the payment dates corresponding
thereto, as may be fixed by the Fleet Board. Dividends are cumulative from
February 21, 1996, whether or not in any dividend period or periods there are
assets of Fleet legally available for the payment of such dividends. Any share
of Preferred Stock that is issued after the record date with respect to any
dividend payment and before such dividend is paid is not entitled to receive the
dividend paid to holders of Preferred Stock as of such record date.
Accumulations of dividends on shares of Preferred Stock do not bear
interest. Dividends payable on the Preferred Stock is computed on the basis of a
360-day year consisting of twelve 30-day months.
Except as provided in the next sentence, no dividend can be declared or paid
or set apart for payment on any Parity Stock (as defined below) unless full
cumulative dividends have been or contemporaneously
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are declared, paid or declared and set apart for payment on the Preferred Stock
for all prior dividend periods. If accrued dividends on the Preferred Stock for
all prior dividend periods have not been paid in full or a sum sufficient for
such payment has not been set apart, then any dividend declared on the Preferred
Stock for any dividend period and on any Parity Stock shall be declared ratably
in proportion to accrued and unpaid dividends on the Preferred Stock and such
Parity Stock.
Fleet cannot (i) declare, pay or set apart funds for the payment of any
dividend or other distribution with respect to any Junior Stock (as defined
below) or (ii) redeem, purchase or otherwise acquire for consideration any
Junior Stock or Parity Stock through a sinking fund or otherwise (except by
conversion into or exchange for shares of Junior Stock), unless all accrued and
unpaid dividends with respect to the Preferred Stock and any Parity Stock at the
time such dividend or other distribution is payable or such redemption, purchase
or acquisition is to occur have been paid or funds have been set apart for
payment of such dividends.
For purposes of the description of the Preferred Stock, (i) the term
"dividend" does not include dividends payable solely in shares of Junior Stock
on Junior Stock, or in options, warrants or rights to holders of Junior Stock to
subscribe for or purchase any Junior Stock, (ii) the term "Parity Stock" means
any class or series of preferred stock ranking on a parity with the Preferred
Stock as to the payment of dividends and amounts payable upon liquidation,
dissolution or winding up and (iii) the term "Junior Stock" means the Common
Stock of Fleet or any other class or series of stock of Fleet ranking junior to
the Preferred Stock as to the payment of dividends and amounts payable upon
liquidation, dissolution or winding up.
OPTIONAL REDEMPTION
The Preferred Stock is not redeemable prior to April 15, 2001. On and after
such date, the Preferred Stock is redeemable at the option of Fleet, in whole or
in part, at the redemption price of $250 per share ($25 per Depositary Share),
plus, in each case, all dividends accrued and unpaid thereon up to the date
fixed for redemption, upon giving notice as provided below.
If fewer than all of the outstanding shares of Preferred Stock are to be
redeemed, the shares to be redeemed will be determined pro rata or by lot or in
such other manner as is prescribed by the Fleet Board.
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 of
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 and (v) that dividends on the
shares to be redeemed will cease to accrue or accumulate on such redemption
date. If fewer than all shares of 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 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 Fleet Board 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
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represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without cost to the holder thereof.
LIQUIDATION PREFERENCE
The holders of shares of Preferred Stock are entitled to receive, in the
event of any liquidation, dissolution or winding up of Fleet, $250 per share
($25 per Depositary Share) plus an amount per share equal to all dividends
(whether or not earned or declared) accrued and unpaid thereon to the date of
final distribution to such holders (the "Liquidation Preference"), and no more.
Until the holders of Preferred Stock have been paid the Liquidation
Preference in full, no payment may be made to any holder of Junior Stock upon
the liquidation, dissolution or winding up of Fleet. If, upon any liquidation,
dissolution or winding up of Fleet, the assets of Fleet or proceeds thereof
distributable among the holders of the shares of Preferred Stock are
insufficient to pay in full the Liquidation Preference and the liquidation
preference with respect to any other shares of Parity Stock, then such assets,
or the proceeds thereof, will be distributed among the holders of shares of
Preferred Stock and any such Parity Stock ratably in accordance with the
respective amounts that would be payable on such shares of Preferred Stock and
any such Parity Stock if all amounts payable thereon were paid in full. 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.
VOTING RIGHTS
Except in the limited circumstances indicated below, or except as otherwise
from time to time required by applicable law, the holders of shares of Preferred
Stock do not have the right to vote for directors or have any other voting
rights, and their consent is not required for taking any corporate action. When
and if the holders of the Preferred Stock are entitled to vote, each share will
be entitled to one vote per share.
If the equivalent of six quarterly dividends payable on 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 the Preferred Stock, voting as a single class with the holders of
shares of any one or more other series and class of Fleet preferred stock
ranking on a parity with the Preferred Stock 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 two directors to fill such
newly-created directorships. Such right shall continue until full cumulative
dividends for all past dividend periods on all preferred shares of Fleet,
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 (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 Preferred Stock is required for any amendment of the
Fleet Articles (or any certificate supplemental thereto) which will adversely
affect the powers, preferences, privileges or rights of the Preferred Stock. The
affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of the Preferred Stock and Parity Stock, 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 Preferred Stock as to dividends or upon
liquidation, or to reclassify any authorized stock of Fleet into such prior
shares, but such vote will not be required for Fleet to take any such actions
with respect to any stock ranking on a parity with or junior to the Preferred
Stock.
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TRANSFER AGENT, REGISTRAR, DIVIDEND DISBURSING AGENT AND REDEMPTION AGENT
The transfer agent, registrar, dividend agent and redemption agent for the
shares of Preferred Stock is Fleet National Bank (the "Transfer Agent"). Fleet
National Bank also acts as the Depositary (the "Depositary") for the Depositary
Shares.
DEPOSITARY SHARES
The Depositary Shares are issued under a Deposit Agreement (the "Deposit
Agreement") between Fleet, Fleet National Bank, as the Depositary, and the
holders from time to time of the related Deposit Receipts.
GENERAL
Each Depositary Share represents one-tenth of a share of the Preferred Stock
(the equivalent of $25 liquidation preference of Preferred Stock).
Subject to the terms of the Deposit Agreement, each owner of a Depositary
Share is entitled, in proportion to the one-tenth of a share of the Preferred
Stock represented by such Depositary Share, to all the rights and preferences of
the shares of the Preferred Stock represented thereby (including dividend,
voting, redemption and liquidation rights).
The Depositary Shares are listed on the NYSE.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary distributes all cash dividends or other cash distributions
received in respect of the shares of the Preferred Stock to the record holders
of Depositary Shares relating to the Preferred Stock in proportion to the number
of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares in
an equitable manner in proportion to the number of such Depositary Shares owned
by such holders, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may sell such property and
distribute the net proceeds from such sale to such holders.
REDEMPTION OF DEPOSITARY SHARES
If the shares of the Preferred Stock are redeemed, the Depositary Shares
will be redeemed from the proceeds received by the Depositary resulting from the
redemption, in whole or in part, of such shares of the Preferred Stock held by
the Depositary. The redemption price per Depositary Share will be equal to
one-tenth of the redemption price per share payable with respect to the
Preferred Stock. Whenever Fleet redeems shares of the Preferred Stock held by
the Depositary, the Depositary will redeem as of the same redemption date the
number of Depositary Shares representing shares of the Preferred Stock so
redeemed. If fewer than all of the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot, pro rata or by any
other equitable method as may be determined by the Depositary.
VOTING THE SHARES OF THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary is obligated to mail the information
contained in such notice of meeting to the record holders of the Depositary
Shares relating to such shares of the 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 shares of the Preferred Stock) is entitled to instruct the
Depositary as to the exercise of the voting rights pertaining to
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the fraction of the shares of the Preferred Stock represented by such holder's
Depositary Shares. The Depositary will endeavor, insofar as practicable, to vote
the number of shares of the Preferred Stock represented by such Depositary
Shares in accordance with such instructions, and Fleet will agree to take all
reasonable action that may be deemed necessary by the Depositary in order to
enable the Depositary to do so. The Depositary will abstain from voting the
shares of the Preferred Stock to the extent it does not receive specific
instructions from the holder of Depositary Shares representing such shares of
the Preferred Stock.
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 that materially and
adversely alters the rights of the holders of Depositary Shares will not be
effective unless the holders of at least a majority of the Depositary Shares
then outstanding approve such amendment. The Deposit Agreement will only
terminate if (i) all outstanding Depositary Shares of such series have been
redeemed or (ii) there has been a final distribution in respect of the shares of
the Preferred Stock in connection with any liquidation, dissolution or winding
up of Fleet and such distribution has been distributed to the holders of the
Depositary Shares.
CHARGES OF DEPOSITARY
Fleet is required to pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary arrangements. Fleet
paid charges of the Depositary in connection with the initial deposit of the
shares of the Preferred Stock and issuance of Depositary Shares, and is required
to pay charges of the Depositary in connection with all withdrawals of shares of
the Preferred Stock by owners of Depositary Shares and any redemption of the
shares of the Preferred Stock. Holders of Depositary Shares are required to 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.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to Fleet notice of its
election to do so. Fleet may at any time remove the Depositary. Any such
resignation or removal shall 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.
MISCELLANEOUS
The Depositary is required to forward all reports and communications from
Fleet that are delivered to the Depositary and that Fleet is required or
otherwise determines to furnish to the holders of the shares of the Preferred
Stock.
Neither the Depositary nor Fleet is liable under the Deposit Agreement to
holders of Depositary Receipts other than for gross negligence or willful
misconduct. Neither the Depositary nor Fleet is obligated to prosecute or defend
any legal proceeding in respect of any Depositary Shares or Preferred Stock
unless satisfactory indemnity is furnished. Fleet and the Depositary may rely
upon written advice of counsel or accountants, or upon information provided by
persons presenting shares of the Preferred Stock for deposit, holders of
Depositary Receipts or other persons believed to be competent and on documents
believed to be genuine.
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RELATIONSHIP BETWEEN THE PREFERRED SECURITIES, THE JUNIOR SUBORDINATED
DEBENTURES AND THE PREFERRED SECURITIES GUARANTEE
As set forth in the Declaration, the Trust exists for the purpose of (i)
issuing (a) its Preferred Securities in exchange for Depositary Shares validly
tendered in the Offer and delivering such Depositary Shares to Fleet in
consideration of the deposit by Fleet as trust assets of Junior Subordinated
Debentures having an aggregate stated principal amount equal to the aggregate
stated liquidation amount of such Preferred Securities, and (b) its Common
Securities to Fleet in exchange for cash and investing the proceeds thereof in
an equivalent amount of Junior Subordinated Debentures.
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debentures, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because of the following
factors: (i) the aggregate principal amount of Junior Subordinated Debentures
will be equal to the sum of the aggregate stated liquidation amount of the Trust
Securities; (ii) the interest rate and the interest and other payment dates on
the Junior Subordinated Debentures will match the distribution rate and
distribution and other payment dates for the Preferred Securities; (iii) Fleet
shall pay all, and the Trust shall not be obligated to pay, directly or
indirectly, any costs, expenses, debts, and obligations of the Trust (other than
with respect to the Trust Securities); and (iv) the Declaration further provides
that the Regular Trustees shall not take or cause or permit the Trust to, among
other things, engage in any activity that is not consistent with the purposes of
the Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Preferred Securities (to the extent funds therefor are
available) are guaranteed by Fleet as and to the extent set forth under
"Description of the Preferred Securities Guarantee." If Fleet does not make
interest payments on the Junior Subordinated Debentures purchased by the Trust,
the Trust will not have sufficient funds to pay distributions on the Preferred
Securities. The Preferred Securities Guarantee does not apply to any payment of
distributions unless and until the Trust has sufficient funds for the payment of
such distributions. The Preferred Securities Guarantee covers the payment of
distributions and other payments on the Preferred Securities if and to the
extent that Fleet has made a payment of interest or principal on the Junior
Subordinated Debentures held by the Trust as its sole asset. The Preferred
Securities Guarantee, when taken together with Fleet's obligations under the
Junior Subordinated Debentures and the Indenture and its obligations under the
Declaration, including its obligations to pay costs, expenses, debts and
liabilities of the Trust (other than with respect to the Trust Securities),
provide a full and unconditional guarantee of amounts on the Preferred
Securities.
If Fleet fails to make interest or other payments on the Junior Subordinated
Debentures when due (taking account of any Extension Period), the Declaration
provides a mechanism whereby the holders of the Preferred Securities, using the
procedures described in "Description of the Preferred Securities-- Voting
Rights" and "--Book-Entry; Delivery and Form," may direct the Institutional
Trustee to enforce its rights under the Junior Subordinated Debentures. If the
Institutional Trustee fails to enforce its rights under the Junior Subordinated
Debentures, a holder of Preferred Securities may institute a legal proceeding
against Fleet to enforce the Institutional Trustee's rights under the Junior
Subordinated Debentures without first instituting any legal proceeding against
the Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of Fleet to pay interest or principal
on the Junior Subordinated Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption on the redemption date), then a
holder of Preferred Securities may institute a Direct Action for payment on or
after the respective due date specified in the Junior Subordinated Debentures.
In connection with such Direct Action, Fleet will be subrogated to the rights of
such holder of Preferred Securities under the Declaration to the extent of any
payment made by Fleet to such holder of Preferred Securities in such Direct
Action. Fleet, under the Preferred Securities Guarantee, acknowledges that the
Guarantee Trustee shall enforce the Preferred Securities Guarantee on behalf of
the holders of the Preferred Securities. If Fleet fails to make payments under
the Preferred Securities Guarantee, any holder
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of Preferred Securities may institute a Direct Action against Fleet to enforce
the Guarantee Trustee's rights and the obligations of Fleet under the Preferred
Securities Guarantee without first instituting a legal proceeding against the
Trust, the Guarantee Trustee, or any other person or entity.
UNITED STATES FEDERAL INCOME TAXATION
The following is a general summary of the material United States federal
income tax consequences of the issuance of Preferred Securities in exchange for
the Depositary Shares pursuant to the Offer, and of the ownership and
disposition of Preferred Securities. To the extent it relates to matters of law
or legal conclusions, this summary constitutes the opinion of Edwards & Angell,
counsel to Fleet and the Trust ("Tax Counsel"). Unless otherwise stated, this
summary deals only with Preferred Securities held as capital assets by a holder
who receives such Preferred Securities pursuant to the Offer (an "Initial
Holder") and who holds the Depositary Shares as capital assets. This summary
does not discuss all the tax consequences that may be relevant to a particular
Initial Holder in light of the Initial Holder's particular circumstances and it
is not intended to be applicable in all respects to all categories of Initial
Holders, some of whom (such as insurance companies, tax-exempt persons,
financial institutions, regulated investment companies, dealers in securities or
currencies, persons that hold Depositary Shares or Preferred Securities received
in the exchange as a position in a "straddle," as part of a "synthetic
security," "hedge," "conversion transaction" or other integrated investment or
persons whose functional currency is other than United States dollars) may be
subject to different rules not discussed below. In addition, this summary does
not address any state, local or foreign tax considerations that may be relevant
to a Initial Holder's decision to exchange Depositary Shares for Preferred
Securities pursuant to the Offer. This summary is based on the Internal Revenue
Code of 1986, as amended (the "Code"), Treasury Regulations thereunder and
administrative and judicial interpretations thereof, as of the date hereof, all
of which are subject to change (possibly on retroactive basis).
ALL HOLDERS OF DEPOSITARY SHARES ARE ADVISED TO CONSULT THEIR TAX ADVISORS
AS TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OF
DEPOSITARY SHARES FOR PREFERRED SECURITIES AND OF THE OWNERSHIP AND DISPOSITION
OF PREFERRED SECURITIES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS
THE EFFECT OF ANY STATE, LOCAL OR OTHER TAX LAWS.
EXCHANGE OF DEPOSITARY SHARES FOR PREFERRED SECURITIES
The exchange of Depositary Shares for Preferred Securities pursuant to the
Offer will be a taxable transaction. In the case of an Initial Holder who
actually or constructively owns solely Depositary Shares, or who actually or
constructively owns Depository Shares and a minimal percentage of any other
class of Fleet stock, and who does not exercise any control over the affairs of
Fleet, gain or loss will be recognized in an amount equal to the difference
between the fair market value on the Expiration Date of the Preferred Securities
(representing an undivided interest in the Junior Subordinated Debentures)
received in the exchange and the exchanging holder's tax basis in the Depositary
Shares exchanged therefor and will be long-term capital gain or loss if the
Depositary Shares have been held for more than one year as of such date. Fleet
will provide information concerning such fair market value to the Exchange
Agent, which will provide such information to holders of record who exchange
Depositary Shares for Preferred Securities. It is anticipated that persons who
hold such Depositary Shares as nominees for beneficial holders will provide such
information to such beneficial holders. A holder's aggregate tax basis (and such
holder's issue price) in his or her pro rata share of the underlying Junior
Subordinated Debentures will be equal to the fair market value of the Preferred
Securities received on the Expiration Date.
Holders of Depositary Shares who are not Initial Holders or who actually or
constructively own more than a minimal percentage of any other class of Fleet
stock are advised to consult their tax advisors as to the income tax
consequences of exchanging Depositary Shares.
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CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
In connection with the issuance of the Junior Subordinated Debentures, Tax
Counsel will render its opinion generally to the effect that under then current
law and assuming full compliance with the terms of the Indenture (and certain
other documents), and based on certain facts and assumptions contained in such
opinion, the Junior Subordinated Debentures will be classified for United States
federal income tax purposes as indebtedness of Fleet.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Preferred Securities, Tax Counsel
will render its opinion generally to the effect that, under then current law and
assuming full compliance with the terms of the Declaration and the Indenture
(and certain other documents), and based on certain facts and assumptions
contained in such opinion, the Trust will be classified for United States
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation. Accordingly, for United States federal income tax purposes,
each holder of Preferred Securities generally will be considered the owner of an
undivided interest in the Junior Subordinated Debentures, and each holder will
be required to include in its gross income any interest (or OID accrued) with
respect to its allocable share of those Junior Subordinated Debentures.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations (the "Regulations") applicable to
debt instruments issued on or after August 13, 1996, a "remote" contingency that
stated interest will not be timely paid will be ignored in determining whether a
debt instrument is issued with OID. Fleet believes that the likelihood of its
exercising its option to defer payments of interest is "remote" since exercising
that option would prevent Fleet from declaring dividends on any class of its
equity securities. Accordingly, Fleet intends to take the position, based on the
advice of Tax Counsel, that the Junior Subordinated Debentures will not be
considered to be issued with OID and, accordingly, stated interest on the Junior
Subordinated Debentures generally will be taxable to a holder as ordinary income
at the time it is paid or accrued in accordance with such holder's method of
accounting.
Moreover, if the issue price of Preferred Securities received by a holder
exceeds the liquidation amount of such Preferred Securities, such excess will be
treated as "amortizable bond premium." A holder which receives Preferred
Securities with amortizable bond premium may elect to deduct such amortizable
bond premium over the life of the Preferred Securities (i.e., 30 years) on an
economic accrual basis. Such deduction shall be applied against (and operate to
reduce) the amount of interest taxable as ordinary income on the Preferred
Securities. A holder receiving Preferred Securities with amortizable bond
premium should consult its tax advisor with respect to the manner of making such
election. If the issue price of the Preferred Securities received by a holder is
less than the liquidation amount of such Preferred Securities by a de minimis
amount, a holder will be required to include such difference in income at the
time such Preferred Securities are redeemed.
Under the Regulations, if Fleet were to exercise its option to defer
payments of interest, the Junior Subordinated Debentures would at that time be
treated as issued with OID, and all stated interest on the Junior Subordinated
Debentures would thereafter be treated as OID as long as the Junior Subordinated
Debentures remain outstanding. In such event, all of a holder's taxable interest
income with respect to the Junior Subordinated Debentures would thereafter be
accounted for on an economic accrual basis regardless of such holder's method of
tax accounting, and actual distributions of stated interest would not be
reported as taxable income. Consequently, a holder of Preferred Securities would
be required to include in gross income OID even though Fleet would not make
actual cash payments during an Extension Period.
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The Regulations have not yet been addressed in any rulings or other
interpretations by the Internal Revenue Service (the "IRS"), and it is possible
that the IRS could take a position contrary to Tax Counsel's interpretation
herein.
Because income on the Preferred Securities will constitute interest or OID,
corporate holders of the Preferred Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Preferred Securities.
RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF THE TRUST
Fleet will have the right at any time to liquidate the Trust and cause the
Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities. Under current law, such a distribution, for United States federal
income tax purposes, would be treated as a nontaxable event to each holder, and
each holder would receive an aggregate tax basis in the Junior Subordinated
Debentures equal to such holder's aggregate tax basis in its Preferred
Securities. A holder's holding period in the Junior Subordinated Debentures so
received in liquidation of the Trust would include the period during which the
Preferred Securities were held by such holder. If, however, the Trust is
characterized for United States federal income tax purposes as an association
taxable as a corporation at the time of its dissolution, the distribution of the
Junior Subordinate Debentures may constitute a taxable event to holders of
Preferred Securities.
Under certain circumstances described herein (see "Description of the
Preferred Securities"), the Junior Subordinated Debentures may be redeemed for
cash and the proceeds of such redemption distributed to holders in redemption of
their Preferred Securities. Under current law, such a redemption would, for
United States federal income tax purposes, constitute a taxable disposition of
the redeemed Preferred Securities, and a holder could recognize gain or loss as
if it sold such redeemed Preferred Securities for cash. See "--Sales of
Preferred Securities."
SALES OF PREFERRED SECURITIES
A holder that sells Preferred Securities (including any redemption of the
Preferred Securities by Fleet) will recognize gain or loss equal to the
difference between its adjusted tax basis in the Preferred Securities and the
amount realized on the sale of such Preferred Securities (other than with
respect to accrued and unpaid interest which has not yet been included in
income, which will be treated as ordinary income). A holder's adjusted tax basis
in the Preferred Securities generally will, if the Preferred Securities are
received in exchange for Depositary Shares in the Offer, be equal to the fair
market value of such securities on the Expiration Date, increased by OID (if
any) previously includable in such holder's gross income to the date of
disposition and decreased by (i) payments received on the Preferred Securities
(except for payments of stated interest) and (ii) amounts deducted by the holder
as amortizable bond premium. Such gain or loss generally will be a capital gain
or loss and generally will be a long-term capital gain or loss if the Preferred
Securities have been held for more than one year, which holding period will not
include the period such holder held the Depositary Shares.
The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A holder who uses the accrual method of
accounting for tax purposes (and a cash method holder, if the Junior
Subordinated Debentures are deemed to have been issued with OID) and who
disposes of his Preferred Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest on
the Junior Subordinated Debentures through the date of disposition in income as
ordinary income (i.e., interest or, possibly, OID), and to add such amount to
his adjusted tax basis in his pro rata share of the underlying Junior
Subordinated Debentures deemed disposed of. To the extent the selling price is
less than the holder's adjusted tax basis (which will include all accrued but
unpaid interest) a holder
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will recognize a capital loss. Subject to certain limited exceptions, capital
losses cannot be applied to offset ordinary income for United States federal
income tax purposes.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, as to the United
States, a foreign corporation, a non-resident alien individual, a foreign
partnership, or a non-resident fiduciary of a foreign estate or trust.
Under present United States federal income tax law: (i) payments by the
Trust or any of its paying agents to any holder of a Preferred Security who or
which is a United States Alien Holder will not be subject to United States
federal withholding tax; provided that, (a) the beneficial owner of the
Preferred Security does not actually or constructively own 10 percent or more of
the total combined voting power of all classes of stock of Fleet entitled to
vote, (b) the beneficial owner of the Preferred Security is not a controlled
foreign corporation that is related to Fleet through stock ownership, and (c)
either (A) the beneficial owner of the Preferred Security certifies to the Trust
or its agent, under penalties of perjury, that it is not a United States holder
and provides its name and address or (B) a securities clearing organization,
bank or other financial institution that holds customers' securities in the
ordinary course of its trade or business (a "Financial Institution"), and holds
the Preferred Security in such capacity, that certifies to the Trust or its
agent, under penalties of perjury, that such statement has been received from
the beneficial owner by it or by a Financial Institution between it and the
beneficial owner and furnishes the Trust or its agent with a copy thereof; and
(ii) a United States Alien Holder of a Preferred Security will not be subject to
United States federal withholding tax on any gain realized upon the sale or
other disposition of a Preferred Security.
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed the Proposed Legislation,
which would, among other things, generally deny corporate issuers a deduction
for interest in respect of certain debt obligations, such as the Junior
Subordinated Debentures, issued on or after December 7, 1995 if such debt
obligations have a maximum term in excess of forty years or a maximum term in
excess of twenty years and are not shown as indebtedness on the issuer's
applicable consolidated balance sheet. On March 29, 1996, Senate Finance
Committee Chairman William V. Roth, Jr. and House Ways and Means Committee
Chairman Bill Archer issued the Joint Statement indicating their intent that the
Proposed Legislation, if adopted by either of the tax-writing committees of
Congress, would have an effective date that is no earlier than the date of
"appropriate Congressional action." In addition, subsequent to the publication
of the Joint Statement, Senator Daniel Patrick Moynihan and Representatives Sam
M. Gibbons and Charles B. Rangel wrote the Democrat Letters, which concurred
with the view expressed in the Joint Statement. If the principles contained in
the Joint Statement and the Democrat Letters were followed and if the Proposed
Legislation were enacted, such legislation would not apply to the Junior
Subordinated Debentures. There can be no assurance, however, that the effective
date guidance contained in the Joint Statement will be incorporated into the
Proposed Legislation, if enacted, or that other legislation enacted after the
date hereof will not otherwise adversely affect the ability of Fleet to deduct
the interest payable on the Junior Subordinated Debentures. Accordingly, there
can be no assurance that a Tax Event will not occur. The occurrence of a Tax
Event may result in the redemption of the Junior Subordinated Debentures for
cash, in which event the holders of the Preferred Securities would receive cash
in redemption of their Preferred Securities. See "Description of the Preferred
Securities--Special Event Redemption."
INFORMATION REPORTING TO HOLDERS
Generally, income on the Preferred Securities will be reported to holders on
Forms 1099, which forms should be mailed to holders of Preferred Securities by
January 31 following each calendar year.
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BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Preferred Securities
may be subject to a "backup" withholding tax of 31 percent unless the holder
complies with certain identification requirements. Any withheld amounts will be
allowed as a credit against the holder's United States federal income tax,
provided the required information is provided to the Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL
OR OTHER TAX LAWS.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon on behalf of the Trust by Skadden, Arps, Slate,
Meagher & Flom (Delaware), special Delaware counsel to the Trust. The validity
of the Junior Subordinated Debentures and the Preferred Securities Guarantee and
certain matters relating thereto and certain United States federal income
taxation matters will be passed upon for Fleet and the Trust by Edwards &
Angell, One Hospital Trust Plaza, Providence, Rhode Island 02903. V. Duncan
Johnson, a partner of Edwards & Angell, is a director of Fleet National Bank and
beneficially owns 4,052 shares of Fleet Common Stock. Certain legal matters will
be passed upon for the Dealer Manager by Skadden, Arps, Slate, Meagher & Flom
LLP, New York, New York.
EXPERTS
The consolidated financial statements of Fleet incorporated by reference in
Fleet's Annual Report on Form 10-K for the fiscal year ended December 31, 1995,
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. The report of KPMG Peat Marwick LLP refers to changes
in the methods of accounting for mortgage servicing rights, investments in debt
and equity securities and income taxes.
The consolidated financial statements of National Westminster Bancorp, Inc.
as of December 31, 1995 and 1994 and for each of the years in the three-year
period ended December 31, 1995 appearing in Fleet's Current Report on Form 8-K
dated March 25, 1996, have been incorporated by reference herein 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. The report of KPMG Peat Marwick LLP refers to changes in the methods
of accounting for investments and accounting for post-retirement benefits other
than pensions.
ERISA CONSIDERATIONS
Generally, employee benefit plans that are subject to the Employee
Retirement Income Security Act of 1974 ("ERISA"), or Section 4975 of the Code
("Plans"), may purchase Preferred Securities, subject to the investing
fiduciary's determination that the investment in Preferred Securities satisfies
ERISA's fiduciary standards and other requirements applicable to investments by
the Plan.
In any case, Fleet and/or any of its affiliates and the Trustees may be
considered a "party in interest" (within the meaning of ERISA) or a
"disqualified person" (within the meaning of Section 4975 of the
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<PAGE>
Code) with respect to certain Plans. The acquisition and ownership of Preferred
Securities by a Plan (or by an individual retirement arrangement or other Plans
described in Section 4975(e)(i) of the Code) with respect to which Fleet, the
Trustees or any affiliate is considered a party in interest or a disqualified
person, may constitute or result in a prohibited transaction under ERISA or
Section 4975 of the Code, unless such Preferred Securities are acquired pursuant
to and in accordance with an applicable exemption such as Prohibited Transaction
Class Exemption ("PTCE") 84-14 (an exemption for certain transactions determined
by an independent qualified professional asset manager), PTCE 91-38 (an
exemption for certain transactions involving bank collective investment funds),
PTCE 90-1 (an exemption for certain transactions involving insurance company
pooled separate accounts) or PTCE 95-60 (an exemption for transactions involving
insurance company general accounts).
As a result, Plans with respect to which Fleet, the Trustees or any
affiliate is a party in interest or a disqualified person should not acquire
Preferred Securities. Any other Plans or other entities whose assets include
Plan assets subject to ERISA or the Code proposing to acquire Preferred
Securities should consult with their own ERISA counsel.
87
<PAGE>
Facsimile copies of Letters of Transmittal will be accepted. Letters of
Transmittal, certificates representing Depositary Shares and any other required
documents should be sent by each Holder of Depositary Shares or his broker,
dealer, commercial bank, trust company or other nominee to the Exchange Agent at
one of the addresses as set forth below:
THE EXCHANGE AGENT IS:
FLEET NATIONAL BANK
<TABLE>
<S> <C>
BY HAND: BY MAIL (REGISTERED OR CERTIFIED MAIL
RECOMMENDED):
Fleet National Bank Fleet National Bank
Corporate Trust Operations Corporate Trust Operations
CT/OP/TO6D CT/OP/TO6D
One Talcott Plaza, 5th Floor P.O. Box 1440
Hartford, CT 06103 Hartford, CT 06143
or
Fleet Bank BY OVERNIGHT COURIER:
Corporate Trust Department Fleet National Bank
14 Wall Street Corporate Trust Operations
8th Floor, Window #2 CT/OP/TO6D
New York, NY 10005 150 Windsor Street
Hartford, CT 06120
</TABLE>
BY FACSIMILE:
(For Eligible Institutions Only)
(860) 986-7908
CONFIRM RECEIPT OF NOTICE OF GUARANTEED DELIVERY BY TELEPHONE:
(860) 986-1271
Attn: REORG
Georgeson & Company Inc. has been retained as the Information Agent to
assist in connection with the Offer. Questions and requests for assistance
regarding the Offer, requests for additional copies of this Prospectus, the
Letters of Transmittal and requests for Notice of Guaranteed Delivery may be
directed to the Information Agent.
THE INFORMATION AGENT IS:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
(800) 223-2064 (Toll-Free)
Banks and Brokers Call Collect
(212) 440-9800
Any questions or requests for assistance or additional copies of this
Prospectus, the Letter of Transmittal or for copies of the Notice of Guaranteed
Delivery may be directed to the Information Agent as its telephone number and
location set forth above. You may also contact your broker, dealer, commercial
bank or trust company or other nominee for assistance concerning the Offer.
THE DEALER MANAGERS FOR THE OFFER ARE:
<TABLE>
<S> <C>
MERRILL LYNCH & CO. SMITH BARNEY INC.
World Financial Center 388 Greenwich Street
North Tower--Seventh Floor New York, New York 10013
New York, New York 10281 (800) 655-4811 (Toll-Free)
(888) ML4-TNDR (Toll-Free) Attn: Paul S. Galant
(888) 654-8637 (Toll-Free)
Attn: Susan L. Weinberg
</TABLE>
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
A list of exhibits included as part of this Registration Statement is set
forth in an Exhibit Index which immediately precedes such exhibits.
(b) The following financial statement schedules are filed as part of this
Registration Statement:
None.
All other schedules are omitted because they are not applicable, or not
required, or because the required information is included in the Financial
Statements of the Registrant or Notes thereto.
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 2 to Form S-4 Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boston, The Commonwealth of Massachusetts, on December 24, 1996.
FLEET FINANCIAL GROUP, INC.
By: /s/ WILLIAM C. MUTTERPERL
-----------------------------------------
William C. Mutterperl
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Form S-4 Registration Statement has been signed by the following
persons in the capacities indicated on December 24, 1996.
SIGNATURE TITLE
- ---------------------------------------- --------------------------------------
*
- ---------------------------------------- Chairman and Director
Joel Alvord
* President, Chief Executive Officer and
- ---------------------------------------- Director
Terrence Murray
* Executive Vice President and Chief
- ---------------------------------------- Financial Officer
Eugene M. McQuade
* Chief Accounting Officer and
- ---------------------------------------- Controller
Robert C. Lamb, Jr.
*
- ---------------------------------------- Director
William Barnet, III
*
- ---------------------------------------- Director
Bradford R. Boss
*
- ---------------------------------------- Director
Stillman B. Brown
*
- ---------------------------------------- Director
Paul J. Choquette, Jr.
*
- ---------------------------------------- Director
John T. Collins
*
- ---------------------------------------- Director
Bernard M. Fox
II-2
<PAGE>
SIGNATURE TITLE
- ---------------------------------------- --------------------------------------
*
- ---------------------------------------- Director
James F. Hardymon
*
- ---------------------------------------- Director
Robert M. Kavner
*
- ---------------------------------------- Director
Raymond C. Kennedy
*
- ---------------------------------------- Director
Robert J. Matura
*
- ---------------------------------------- Director
Arthur C. Milot
*
- ---------------------------------------- Director
Thomas D. O'Connor
*
- ---------------------------------------- Director
Michael B. Picotte
*
- ---------------------------------------- Director
Lois D. Rice
*
- ---------------------------------------- Director
John R. Riedman
*
- ---------------------------------------- Director
John S. Scott
*
- ---------------------------------------- Director
Samuel O. Thier
*
- ---------------------------------------- Director
Paul R. Tregurtha
/s/ WILLIAM C. MUTTERPERL
--------------------------------------
William C. Mutterperl
SECRETARY
*By: ATTORNEY-IN-FACT
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 2 to Form S-4 Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boston, The Commonwealth of Massachusetts, on December 24, 1996.
FLEET CAPITAL TRUST I
By: /s/ John R. Rodehorst
-----------------------------------------
John R. Rodehorst
TRUSTEE
II-4
<PAGE>
INDEX OF EXHIBITS
<TABLE>
<C> <S>
1(a) --Form of Dealer Manager Agreement.
4(a) --Certificate of Trust of Fleet Capital Trust I. (2)
4(b) --Declaration of Trust of Fleet Capital Trust I. (3)
4(c) --Form of Amended and Restated Declaration of Trust to be used in connection with the
issuance of the Preferred Securities. (1)
4(d) --Form of Indenture between Fleet and The First National Bank of Chicago, as Trustee.
(4)
4(e) --Form of Supplemental Indenture to be used in connection with the issuance of the
Junior Subordinated Debentures and Preferred Securities. (1)
4(f) --Form of Preferred Security (included in Exhibit 4(c)).
4(g) --Form of Junior Subordinated Debenture (included in Exhibit 4(e)).
4(h) --Form of Preferred Securities Guarantee. (1)
5(a) --Opinion of Edwards & Angell.
5(b) --Opinion of Skadden, Arps, Slate, Meagher & Flom (Delaware).
8 --Tax Opinion of Edwards & Angell.
12(a) --Computation of Ratio of Earnings to Fixed Charges. (4)
12(b) --Computation of Ratio of Earnings to Fixed Charges and Dividends on Preferred Stock
(4).
23(a) --Consent of KPMG Peat Marwick LLP as to Fleet.
23(b) --Consent of KPMG Peat Marwick LLP as to National Westminster Bancorp, Inc.
23(c) --Consent of Edwards & Angell (included in Exhibit 5(a)).
23(d) --Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5(b)).
24(a) --Powers of Attorney for Fleet (included on signature page).
24(b) --Powers of Attorney for Fleet Capital Trust I (included in Exhibit 4(b)).
25(a) --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The
First National Bank of Chicago, as Debt Trustee under the Indenture and as Preferred
Security Guarantee Trustee under the Preferred Securities Guarantee. (4)
25(b) Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The
First National Bank of Chicago, as Trustee under the Amended and Restated
Declaration of Trust. (4)
99(a) --Form of Letter of Transmittal. (1)
99(b) --Form of Notice of Guaranteed Delivery. (1)
99(c) --Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees. (1)
99(d) --Form of Letter to Clients. (1)
99(e) --Form of Exchange Agent Agreement.
99(f) --Form of Information Agent Agreement.
99(g) --Form of Fleet Letter to Holders of Depositary Shares. (1)
99(h) --Form of Questions and Answers Regarding Preferred Securities. (1)
99(i) --Form of Notice of Offer to Exchange. (1)
</TABLE>
- ------------------------
(1) Previously filed.
(2) Incorporated by reference to Exhibit 4(a)(i) of Fleet's Registration
Statement on Form S-3 (No. 333-15435).
(3) Incorporated by reference to Exhibit 4(b)(i) of Fleet's Registration
Statement on Form S-3 (No. 333-15435).
(4) Incorporated by reference to the exhibit with the same exhibit number of
Fleet's Registration Statement on Form S-3 (No. 333-15435).
<PAGE>
Exhibit 1(a)
FORM OF DEALER MANAGER AGREEMENT
December [ ], 1996
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1329
SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Fleet Capital Trust I (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12 of the Delaware Code, 12 Del. C. Section 3801 ET.
SEQ.), pursuant to the Amended and Restated Declaration of Trust of the Trust,
to be dated as of the Exchange Date (as defined herein) (the "Declaration"),
among Fleet Financial Group, Inc. (the "Company"), as Sponsor, The First
National Bank of Chicago, as institutional trustee (the "Institutional
Trustee"), First Chicago Delaware Inc., as Delaware trustee (the "Delaware
Trustee"), and Eugene M. McQuade, Douglas L. Jacobs and John R. Rodehorst, as
regular trustees (the "Regular Trustees" and together with the Institutional
Trustee and the Delaware Trustee, the "Trustees"), and the holders from time to
time of undivided beneficial interests in the assets of the Trust, proposes to
issue its % Trust Originated Preferred Securities-SERVICE MARK- ("TOPrS -
SERVICE MARK-") (the "Preferred Securities") in exchange for up to 11,000,000
depositary shares (the "Target Securities"), each representing 1/10 of a share
of Series 7.25% Perpetual Preferred Stock (liquidation preference equivalent to
$25 per depositary share) ("Preferred Stock") of the Company. The Preferred
Securities will be guaranteed (the "Guarantee") by the Company
- ---------------
- -SERVICE MARK- "Trust Originated Preferred Securities" and "TOPrS" are service
marks of Merrill Lynch & Co., Inc.
<PAGE>
to the extent described in the Prospectus (as hereinafter defined). The
exchange described above is herein referred to as the "Exchange Offer" and any
exchange of Preferred Securities for Target Securities pursuant to the Exchange
Offer is herein referred to as an "Exchange". In connection with the Exchange
Offer, the Company will deposit in the Trust as trust assets its % Junior
Subordinated Deferrable Interest Debentures due , 2027 (the
"Debentures") as set forth in the Prospectus, to be issued pursuant to an
Indenture, dated December 11, 1996, between the Company and The First National
Bank of Chicago as trustee (the "Indenture Trustee"), as supplemented by a
Supplemental Indenture to be dated as of the Exchange Date (the "Supplemental
Indenture"), between the Company and the Indenture Trustee (collectively, the
"Indenture").
Each of the Company and the Trust hereby confirms its agreement with
Merrill Lynch & Co. and Smith Barney Inc. (the "Dealer Managers") as follows:
1. REGISTRATION STATEMENT, PROSPECTUS AND OFFERING MATERIALS. The
Company and the Trust have prepared and filed with the Securities and Exchange
Commission (the "Commission"), under the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations of the Commission promulgated
thereunder (the "Securities Act Regulations"), a registration statement on Form
S-4 covering the registration of the Preferred Securities, the Guarantee and the
Debentures, including the related preliminary prospectus, and will prepare and
file, on or prior to the effective date of such registration statement,
amendments to such registration statement, including a final prospectus. Each
prospectus used before the time such registration statement becomes effective is
herein called a "preliminary prospectus". Such registration statement,
including the exhibits thereto and any documents incorporated by reference
therein, as amended at the time it becomes effective or as thereafter amended or
supplemented from time to time, is herein called the "Registration Statement".
The final prospectus included in the Registration Statement (including any
documents incorporated in the prospectus by reference) is herein called the
"Prospectus", except that if the final prospectus furnished to the Dealer
Managers for use in connection with the Exchange Offer differs from the
prospectus set forth in the Registration Statement (whether or not such
prospectus is required to be filed pursuant to Rule 424 (b)), the term
"Prospectus" shall refer to the final prospectus furnished to the Dealer
Managers for such use. The terms "supplement" and "amendment" or "amend" as
used herein with respect to the Prospectus shall include all documents deemed to
be incorporated by reference in the Prospectus that are filed subsequent to the
date of the Prospectus and prior to the termination of the Exchange Offer by the
Company and the Trust with the Commission pursuant to the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder (collectively, the "Exchange Act").
The Registration Statement, Prospectus and the related letters from
the Dealer Managers to securities brokers, dealers, commercial banks, trust
companies and other nominees, letters to beneficial owners of Target Securities,
letters of transmittal (the "Letters
2
<PAGE>
of Transmittal"), notices of guaranteed delivery (the "Notices of Guaranteed
Delivery") and any newspaper announcements, press releases and other offering
materials and information the Company may use or prepare, approve or authorize
for use in connection with the Exchange Offer, as amended or supplemented from
time to time, are herein collectively referred to as the "Offering Materials".
2. EXCHANGE OFFER; AGREEMENT TO ACT AS DEALER MANAGERS. (a) The
Company and the Trust intend to commence the Exchange Offer as soon as
practicable after the Registration Statement becomes effective under the
Securities Act by publicly announcing its commencement and by mailing, or
causing to be mailed on its behalf, copies of the Prospectus, the related
Letters of Transmittal and such of the other Offering Materials as is required
or as the Company and the Trust elect to each holder of Target Securities (the
date of the commencement of such distribution being herein called the
"Commencement Date").
(b) The Company hereby retains the Dealer Managers to advise the
Company and the Trust with respect to the terms and timing of the Exchange Offer
and to assist them in the preparation of the Offering Materials and retains and
authorizes the Dealer Managers to act as dealer managers and to assist the
Company and the Trust with the solicitation of Exchanges (each a "Solicitation"
and collectively the "Solicitations"). On the basis of the representations and
warranties and agreements of the Company and the Trust herein contained and
subject to and in accordance with the terms and conditions hereof and of the
Offering Materials, the Dealer Managers agree to advise the Company and the
Trust with respect to the terms and timing of the Exchange Offer, to assist them
in the preparation of the Offering Materials, to act as dealer managers in
connection with the Exchange Offer and to assist the Company and the Trust with
the Solicitations. The Dealer Managers agree to use their reasonable best
efforts to solicit Exchanges.
(c) The Company shall furnish the Dealer Managers, or cause the
transfer agent or registrar for the Target Securities (respectively, the
"Transfer Agent" and "Registrar") to furnish the Dealer Managers, as soon as
practicable after the date hereof (to the extent not previously furnished), with
cards or lists in reasonable quantities or copies thereof showing the names of
persons who were the holders of record or, to the extent available to the
Company, the beneficial owners of the Target Securities as of a recent date,
together with their addresses, and the number of shares of Target Securities
held by them. Additionally, the Company shall use its reasonable best efforts
to update, or to cause the Transfer Agent or Registrar to update, such
information from time to time during the term of this Agreement as may be
reasonably requested by the Dealer Managers. Except as otherwise provided
herein, the Dealer Managers agree to use such information only in connection
with the Solicitations. The Dealer Managers shall act hereunder as independent
contractors and nothing herein contained shall make the Dealer Managers agents
of the Company or any of its subsidiaries or the Trust in connection with any
Solicitation. Nothing contained in this Agreement shall constitute the Dealer
Managers partners of or joint venturers with the Company or any of their
subsidiaries or the Trust.
3
<PAGE>
(d) The Company and the Trust authorize the Dealer Managers to use
the Offering Materials in connection with the Solicitations and for such period
of time as any Offering Materials are required by law to be delivered in
connection therewith. The Dealer Managers shall not have any obligation to
cause any Offering Materials to be transmitted generally to the holders of the
Target Securities. The Dealer Managers agree not to give any written
information and not to make any representations to holders of the Target
Securities in connection with any Solicitation other than as contained in the
Offering Materials.
(e) The Company and the Trust authorize the Dealer Managers to
communicate with any information agent (the "Information Agent") or exchange
agent (the "Exchange Agent") appointed by the Company and/or the Trust to act in
such capacity in connection with the Exchange Offer with respect to matters
relating to the Exchange Offer.
(f) The Company and the Trust agree that any reference to the Dealer
Managers in any Offering Materials or in any newspaper announcement or press
release or other public document or communication is subject to the Dealer
Managers' prior consent, which consent shall not be unreasonably withheld.
3. COMPENSATION. (a) The Company hereby agrees to pay to the
Dealer Managers for services rendered and to be rendered by them in connection
with the Exchange Offer a fee (the "Management Fee") equal to [$ ] per share
of Target Securities validly submitted for exchange and not withdrawn in
connection with the Exchange Offer. The Management Fee shall be paid only if
the Exchange Offer is consummated, and shall be paid within one week of the
consummation of the Exchange Offer. The Management Fee shall be divided [ %]
to Merrill Lynch and [ %] to Smith Barney Inc. (as to each, its "Proportionate
Share").
(b) The Company agrees to pay, or cause to be paid to, each
soliciting dealer (including any Dealer Managers acting as a soliciting dealer)
whose name has been inserted in the space provided in the Letter of Transmittal
for that purpose a fee (the "Soliciting Dealer Fee") equal to [$ ] per share
of Target Securities validly submitted for exchange and not withdrawn in
connection with the Exchange Offer; provided, however, that no such fee shall be
paid with respect to Target Securities tendered, directly or indirectly, by
soliciting dealers for their own account and such fee shall not be remitted, in
whole or in part, to the beneficial owner of such Target Securities. The
Soliciting Dealer Fee shall be paid only if the Exchange Offer is consummated
and shall be paid to the soliciting dealers within one week of the consummation
of the Exchange Offer.
4. EXPENSES, REIMBURSEMENT. The Company agrees to reimburse the
Dealer Managers directly for all of their reasonable out-of-pocket expenses
incurred in connection with the Exchange Offer, including, without limitation,
the reasonable fees and expenses of the law firm acting as legal counsel for the
Dealer Managers.
4
<PAGE>
5. CERTAIN COVENANTS OF THE TRUST AND THE COMPANY. Each of the
Company and the Trust covenants jointly and severally with the Dealer Managers:
(a) To use reasonable efforts to cause the Registration Statement,
including any post-effective amendment thereto, to become effective and will
notify the Dealer Managers as soon as practicable and, if requested by the
Dealer Managers, will confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall have become effective, or any
supplement to the Prospectus or any amended Prospectus or any amended or
additional Offering Materials shall have been filed, (ii) of the receipt of any
comments from the Commission relating to the Exchange Offer, (iii) of any
request by the Commission to amend the Registration Statement or amend or
supplement the Prospectus or the other Offering Materials or for additional
information relating to the Exchange Offer and (iv) of (A) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or (B) the issuance by the Commission of any order preventing or
suspending the use of any of the Offering Materials or (C) the suspension of the
qualification of the Preferred Securities for offering or sale in connection
with the Exchange Offer in any jurisdiction or (D) the institution or
threatening of any proceedings for any of such purposes or (E) the occurrence of
any event which could cause the Company or the Trust to withdraw, rescind,
terminate or modify the Exchange Offer or would permit the Company or the Trust
to exercise any right not to accept the Target Securities tendered pursuant to
the Exchange Offer. The Company and the Trust will make every reasonable effort
to prevent the issuance of any such stop order, the issuance of any order
preventing or suspending such use and the suspension of any such qualification
and, if any such order is issued or qualification suspended, to obtain the
lifting of such order or suspension at the earliest practicable time.
(b) Prior to the termination of the Exchange Offer, before amending
or supplementing the Registration Statement or the Prospectus, to furnish copies
of drafts to, and consult with, the Dealer Managers and their counsel within a
reasonable time in advance of filing with the Commission of any amendment or
supplement to the Registration Statement, the Prospectus or the other Offering
Materials. Neither the Company nor the Trust shall file any such amendment or
supplement to which the Dealer Managers shall reasonably object in writing;
PROVIDED, HOWEVER, that the foregoing shall not apply to any of the Company's
filings with the Commission required to be filed pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, copies of which such filings the Company
will cause to be delivered to the Dealer Managers promptly after being
transmitted for filing with the Commission.
(c) To furnish promptly to each of the Dealer Managers, without
charge, one signed copy of the Registration Statement, all amendments thereto
and any other filing with the Commission in connection with the Exchange Offer,
whether filed before or after the Registration Statement becomes effective.
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(d) To furnish promptly to the Dealer Managers, without charge, from
time to time until the effective date of the Registration Statement, as many
copies of each preliminary prospectus as the Dealer Managers may reasonably
request, and the Company and the Trust hereby consent to the use of such copies
for purposes permitted by the Securities Act and the Exchange Act. The Company
will furnish promptly to the Dealer Managers, without charge, as soon as the
Registration Statement shall have become effective and during the period
mentioned in the second sentence of paragraph (e) below such number of copies of
the Prospectus and the other Offering Materials (as supplemented or amended) as
the Dealer Managers may reasonably request and will cause all amendments and
supplements filed with the Commission to be distributed to holders of Target
Securities as may be required by the Securities Act and the Exchange Act.
(e) To comply in all material respects with the Securities Act, the
Exchange Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), in connection with the Offering Materials, the Exchange Offer
and the transactions contemplated hereby and thereby, as applicable. If at any
time when the Prospectus is required by the Securities Act or Exchange Act to be
delivered in connection with any Solicitation or Exchange any event shall occur
or condition shall exist as a result of which it is necessary, in the reasonable
opinion of counsel for the Dealer Managers or counsel for the Company and the
Trust, to amend the Registration Statement or amend or supplement the Prospectus
or any other Offering Materials in order that the Prospectus or such other
Offering Materials will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements in the
Prospectus or such other Offering Materials, in the light of the circumstances
under which they were made, not misleading or if, in the reasonable opinion of
either such counsel, it shall be necessary to amend the Registration Statement
or amend or supplement the Prospectus or any other Offering Materials to comply
with the requirements of the Securities Act or Exchange Act, the Company and the
Trust will promptly prepare, file with the Commission, subject to Section 5(b)
of this Agreement, and furnish, at its own expense, to the Dealer Managers and
to the dealers (whose names and address will be furnished to the Company by the
Dealer Managers) to which Preferred Securities may have been exchanged, such
amendment or supplement as may be necessary to correct such untrue statement or
omission or to make the Registration Statement or the Prospectus or such other
Offering Materials comply with such requirements.
(f) To endeavor, in cooperation with the Dealer Managers, to qualify
the Preferred Securities for offering and sale in connection with the Exchange
Offer under the applicable securities or Blue Sky laws of such jurisdictions as
the Company and the Trust may elect and to maintain such qualifications in
effect for such time as may be required for the consummation of the Exchange
Offer; PROVIDED, HOWEVER, that neither the Company nor the Trust shall be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in
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which it is not otherwise so subject;PROVIDED FURTHER that the Dealer Managers
shall not be obligated to solicittenders in jurisdictions where the Preferred
Securities are not qualified for offer and sale. The Company and the Trust
will file such statements and reports as may be required by the laws of each
jurisdiction in which the Preferred Securities have been qualified as above
provided.
(g) To make generally available to the holders of the Preferred
Securities and the Debentures as soon as practicable, but in any event not
later than 45 days after the end of the fiscal quarter of the Company during
which the first anniversary of the effective date of the Registration Statement
occurs (or 90 days in case the period covered corresponds to a fiscal year of
the Company) an earnings statement of the Company (in form complying with the
provisions of Rule 158 of the Securities Act) covering such twelve-month period.
(h) To use its reasonable best efforts to effect the listing of the
Preferred Securities on the New York Stock Exchange ("NYSE"), subject to
official notice of issuance, as soon as practicable after the date hereof.
(i) To timely file any report or other document required to be filed
by the Company or the Trust with the Commission pursuant to Section 13, 14 or 15
of the Exchange Act during the period of time referred to in the second sentence
of Section 5(e) hereof.
(j) Subject to Section 4(a) of this Agreement, to pay all costs and
expenses incurred in connection with the performance of its obligations in
connection with this Agreement and the Solicitations including, without
limitation, (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits), as originally filed and
as amended, the preliminary prospectuses, the Prospectus and the other Offering
Materials and any amendments or supplements to any of the foregoing, and the
cost of furnishing copies thereof to the Dealer Managers, (ii) the preparation
and distribution of this Agreement and any Blue Sky surveys and the printing of
certificates for the Preferred Securities, (iii) the distribution of the
Offering Materials to the holders of the Target Securities, (iv) the fees and
disbursements of counsel to the Company and the Trust, counsel to the Dealer
Managers and the Company's and the Trust's accountants, (v) the qualification of
the Preferred Securities under the applicable securities laws in accordance with
Section 5(f) of this Agreement and any filing for review of the Exchange Offer
with the NASD (including filing fees and fees and disbursements of counsel for
the Dealer Managers in connection with such filing with the NASD), (vi) the fees
and expenses of the Transfer Agent, the Registrar, the Trustees, the Indenture
Trustee (as defined herein), the trustee under the Guarantee (the "Guarantee
Trustee"), the Information Agent and the Exchange Agent and (vii) all other
costs and expenses incident to the Solicitations incurred by the Trust and the
Company and its subsidiaries. The Company agrees to pay all of the
aforementioned costs and expenses whether or not the Exchange Offer is
consummated.
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(k) To advise or cause the Exchange Agent to advise the Dealer
Managers at 5:00 P.M., New York City time, or as promptly as practicable
thereafter, daily (or more frequently if requested), by telephone or facsimile
transmission, as of 4:00 P.M. on such day with respect to Target Securities
tendered as follows:
(i) the number of shares of Target Securities validly tendered
represented by certificates physically held by the Exchange Agent (or for which
the Exchange Agent has received confirmation of receipt of book-entry transfer
of such Target Securities into the Exchange Agent's account at a Depository
Institution (as defined in the Prospectus) pursuant to the procedures set forth
in the Exchange Offer) on such day;
(ii) the number of shares of Target Securities represented by
Notices of Guaranteed Delivery on such day;
(iii) the number of shares of Target Securities properly
withdrawn on such day;
(iv) the cumulative number of shares of Target Securities in
categories (i) through (iii) above.
On the day following such oral communication, the Company shall
furnish or cause the Exchange Agent to furnish to the Dealer Managers a written
report confirming the above information which has been communicated orally. The
Company shall furnish or cause the Exchange Agent to furnish to the Dealer
Managers such reasonable information on the tendering holders of Targeted
Securities as may be requested from time to time.
(l) To give the Dealer Managers notice of any change of the
expiration time of the Exchange Offer (the "Expiration Time").
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE TRUST.
Each of the Company and the Trust jointly and severally represent and warrant to
and agrees with each of the Dealer Managers that:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each preliminary
prospectus filed as part of the Registration Statement as originally filed or as
part of any amendment thereto, or filed pursuant to Rule 424 of the Securities
Act, will comply when so filed, in all material respects, as to form with the
Securities Act and the Exchange Act; the Registration Statement at the time it
becomes effective and the Prospectus and any other Offering Materials, on the
Commencement Date and on the date on which the Company commences delivery of the
Preferred Securities for exchange of the Target Securities pursuant to the
Exchange Offer (such date, the "Exchange Date"), will comply, in all material
respects, as to form with the Securities Act and the Exchange Act; each part of
the Registration Statement when such part becomes effective will not contain,
and each such
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<PAGE>
part, as amended, if applicable, will not contain, any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and as of the
Commencement Date and the Exchange Date, none of the Prospectus or the other
Offering Materials or any amendments or supplements to such Offering Materials
will contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this Section 6 (a) do not apply (A)
to statements or omissions made based upon and in conformity with information
supplied in writing by either of the Dealer Managers through Merrill Lynch,
Pierce, Fenner & Smith Incorporated expressly for use in the Registration
Statement, Prospectus, any other Offering Materials or any amendments or
supplements to any of the foregoing or (B) to that part of the Registration
Statement that constitutes the Statements of Eligibility and Qualification on
Form T-1 (the "Forms T-1") under the Trust Indenture Act of the trustee (the
"Indenture Trustee") under the Indenture (as defined herein), as institutional
trustee under the Declaration (as defined herein) and as trustee under the
Guarantee.
(b) INCORPORATED DOCUMENTS. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the Prospectus,
at the time they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder (the "Exchange Act
Regulations") and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective, at the date
hereof, at the time the Prospectus was issued and at the Exchange Date, did not
and will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(c) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the Securities Act
and the Securities Act Regulations.
(d) FINANCIAL STATEMENTS. The financial statements included in the
Registration Statement and the Prospectus, together with the related schedules
and notes, present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement present
fairly in accordance with GAAP the information required to be stated therein.
The selected financial data and the summary financial information included in
the Prospectus present fairly the information shown therein
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<PAGE>
and have been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(e) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock, except for dividends paid by the Company in the
ordinary course of business consistent with past practice.
(f) GOOD STANDING OF THE COMPANY. Each of the Company and the
subsidiaries of the Company listed on Schedule A hereto, (the "Significant
Subsidiaries") has been duly incorporated and is validly existing as a
corporation or national banking association in good standing under the laws of
the jurisdiction in which it is chartered or organized, with full corporate
power and authority to own its properties and conduct its business as described
in the Prospectus; the Company is duly qualified to do business as a foreign
corporation under the laws of the State of New York and the laws of the
Commonwealth of Massachusetts; and neither the Company nor any Significant
Subsidiary is required to be qualified to do business as a foreign corporation
under the laws of any other jurisdiction, and the Company is duly registered as
a bank holding company under the Bank Holding Company Act of 1956, as amended.
(g) EXISTENCE OF TRUST. The Trust has been duly created and is
validly existing in good standing as a business trust under the Delaware Act, is
and will be treated as a "grantor trust" for federal income tax purposes under
existing law, has the business trust power and authority to conduct its business
as presently conducted and as described in the Prospectus, and is not required
to be authorized to do business in any other jurisdiction.
(h) ABSENCE OF DEFAULTS AND CONFLICTS. The execution and delivery by
the Company and the Trust of, and the performance by the Company and the Trust
of their obligations under, this Agreement, the execution and delivery by the
Company of, and the performance by the Company of its obligations under, the
Declaration, the Guarantee and the Indenture, the issuance and delivery by the
Trust of the Common Securities and Preferred Securities and the consummation of
the Exchange Offer and the fulfillment of the terms herein contemplated will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under (in each case material to the Company and its
subsidiaries (including the Trust) considered as a whole or as to the Trust
separately), any
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indenture, mortgage, deed of trust, loan agreement, guarantee, lease, financing
agreement or other similar agreement or instrument to which the Company or any
of its subsidiaries (including the Trust) is a party or by which the Company or
any of its subsidiaries (including the Trust) is bound or to which any of the
property or assets of the Company or any of its subsidiaries (including the
Trust) is subject, nor will such actions result in any violation of the
provisions of the certificate of incorporation or by-laws of the Company or the
Declaration of the Trust, nor will such actions result in any violation (in each
case material to the Company and its subsidiaries (including the Trust)
considered as a whole or as to the Trust separately) of any statute or any
order, rule or regulation of any court or regulatory authority or other
governmental body having jurisdiction over the Trust or the Company or any of
its subsidiaries or any of their properties; and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for, and the absence of which would materially affect, the
performance by the Company and the Trust of their obligations under this
Agreement, the issuance and delivery of the Preferred Securities and the
consummation of the Exchange Offer, except such approvals as will be obtained
under the Securities Act, the Exchange Act or the Trust Indenture Act and as may
be required by the securities or Blue Sky laws of the various states or the
securities laws of non-U.S. jurisdictions in connection with the Exchange Offer.
(i) COMMON SECURITIES. The Common Securities have been duly
authorized by the Declaration and, when issued and delivered by the Trust to the
Company in accordance with the terms of the Declaration and against payment
therefor as described in the Prospectus, will be validly issued and (subject to
the terms of the Declaration) fully paid and nonassessable undivided beneficial
interests in the assets of the Trust; the issuance of the Common Securities is
not subject to preemptive or other similar rights; no holder thereof will be
subject to personal liability by reason of being such a holder; and at the
Exchange Date, all of the issued and outstanding Common Securities of the Trust
will be directly owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(j) AUTHORIZATION OF DECLARATION. The Declaration has been duly
authorized by the Company and duly qualified under the Trust Indenture Act and,
when validly executed and delivered by the Company and the Regular Trustees, and
assuming the due authorization, execution and delivery of the Declaration by the
Delaware Trustee and the Institutional Trustee, the Declaration will constitute
a valid and binding obligation of the Company and the Regular Trustees,
enforceable against the Company and the Regular Trustees in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
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(k) GUARANTEE. The Guarantee has been duly authorized by the Company
and duly qualified under the Trust Indenture Act and, when validly executed and
delivered by the Company, and assuming due authorization, execution and delivery
of the Guarantee by the Guarantee Trustee, will constitute a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
(l) PREFERRED SECURITIES. The Preferred Securities to be issued
pursuant to the Exchange Offer have been duly authorized by the Declaration and,
when authenticated in the manner provided for in the Declaration and issued and
delivered in exchange for Target Securities pursuant to the Exchange Offer and
this Agreement against payment of the consideration set forth herein, will be
validly issued and (subject to the terms of the Declaration) fully paid and
nonassessable undivided beneficial interests in the assets of the Trust; the
issuance of the Preferred Securities is not subject to preemptive or other
similar rights; and holders of Preferred Securities will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit incorporated under the General Corporation Law of the
State of Delaware.
(m) AUTHORIZATION OF INDENTURE. The Indenture has been duly
authorized by the Company and duly qualified under the Trust Indenture Act and,
when duly executed and delivered by the Company and assuming the due
authorization, execution and delivery of the Indenture by the Indenture Trustee,
will constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(n) AUTHORIZATION OF DEBENTURES. The Debentures to be deposited in
the Trust as trust assets in connection with the Exchange Offer have been duly
authorized by the Company, and when executed, authenticated and issued in the
manner provided for in the Indenture and delivered, sold and paid for pursuant
to the terms of the Exchange Offer and as provided in this Agreement, the
Debentures will constitute valid and binding obligations of the Company entitled
to the benefits of the Indenture and enforceable against the Company in
accordance with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors'
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rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(o) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company and the Trust.
(p) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the Company
or the Trust, threatened, against or affecting the Company or any subsidiary,
which is required to be disclosed in the Registration Statement (other than as
disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets of the Company and its subsidiaries
taken as a whole or the consummation of the transactions contemplated in this
Agreement or the performance by the Company or the Trust of its obligations
hereunder; the aggregate of all pending legal or governmental proceedings to
which the Company or any subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(q) POSSESSION OF LICENSES AND PERMITS. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them, except for such Governmental Licenses
the absence of which would not cause a Material Adverse Effect; the Company and
its subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not, singly
or in the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the invalidity of
such Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(r) COMPLIANCE WITH CUBA ACT. The Company and the Trust have
complied with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with Cuba, codified
as Section 517.075 of the Florida statutes, and the rules and regulations
thereunder (collectively, the "Cuba Act") or is exempt therefrom.
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(s) INVESTMENT COMPANY ACT. Neither the Company nor the Trust is,
and after giving effect to the consummation of the Exchange Offer as herein
contemplated and the application of the net proceeds therefrom as described in
the Prospectus neither will be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
7. INDEMNIFICATION AND CONTRIBUTION. (a) Each of the Company and
the Trust jointly and severally agrees: (A) to indemnify and hold the Dealer
Managers harmless against any loss, damage, expense, liability or claim (i)
which (1) with respect to the Registration Statement, is caused by any untrue
statement or alleged untrue statement of a material fact contained therein or
which is caused by the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or (2) with respect to the Offering Materials or in any
amendment or supplement thereto, is caused by any untrue statement or alleged
untrue statement of a material fact contained in such Offering Materials or
which is caused by the omission or alleged omission to state therein a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except, in any such
case, as to any of the Dealer Managers insofar as such loss, damage, expense,
liability or claim is caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to such Dealer
Manager furnished to the Company or the Trust in writing through Merrill Lynch,
Pierce, Fenner & Smith Incorporated expressly for use in the Registration
Statement or in such Offering Materials or (ii) which arises out of or is based
upon a withdrawal, rescission or modification of or a failure to make or
consummate the Exchange Offer; and (B) to indemnify and hold each of the Dealer
Managers harmless against any other loss, damage, expense, liability or claim
which otherwise arises out of or is related to this Agreement or the Exchange
Offer or the services provided by the Dealer Managers in connection with this
Agreement or the Exchange Offer, except to the extent any such loss, damage,
expense, liability or claim referred to in this clause (B) is found by a final
judgment of a court of competent jurisdiction to have resulted from such Dealer
Manager's gross negligence, bad faith or willful misconduct. The Company and
the Trust each jointly and severally agree to indemnify and hold each of the
Dealer Managers harmless against and reimburse each of the Dealer Managers for
any and all reasonable expenses (including reasonable legal fees and expenses)
as such expenses are incurred by it in connection with investigating, preparing
for or defending against any such loss, damage, expense, liability or claim,
whether or not resulting in any liability, whether or not such person is a named
party in connection therewith and whether or not such loss, damage, expense,
liability or claim results from action initiated or brought by or on behalf of
the Company or any of its subsidiaries (including the Trust), and any amount
paid in settlement of any litigation, commenced or threatened, or of any claim
whatsoever as set forth herein if such settlement is effected with the prior
written consent of the Company; PROVIDED, HOWEVER, with respect to clause (B)
above, that neither the Company nor the Trust shall be liable for any of the
foregoing expenses and any amounts previously paid shall be promptly repaid to
the extent that any
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loss, damage, liability or claim is found by a final judgment of a court of
competent jurisdiction to have resulted from such Dealer Manager's gross
negligence, bad faith or willful misconduct. In the event that you become
involved in any capacity in any action, proceeding or investigation brought by
or against any person, including stockholders of the Company, in connection with
any matter referred to in this Agreement or arising out of the Exchange Offer
for which you would be entitled to indemnification pursuant to the preceding
sentence, the Company and the Trust also agree to indemnify and hold you
harmless against and to reimburse you for any amount paid in settlement of any
litigation commenced or threatened or of any claim whatsoever as set forth
herein if such settlement is effected with the written consent of the Company
and the Trust, which shall not be unreasonably withheld. The Company and Trust
also agree that none of the Dealer Managers shall have any liability (whether
direct or indirect, in tort, contract or otherwise) to the Company or any of its
subsidiaries (including the Trust) or its or their security holders or creditors
related to or arising out of this Agreement or the Exchange Offer or the
services provided by such Dealer Manager in connection with this Agreement or
the Exchange Offer, except (i) for failure to perform its obligations under this
Agreement, (ii) to the extent such liability is found by a final judgment of a
court of competent jurisdiction to have resulted from such Dealer Manager's
gross negligence, bad faith or willful misconduct or (iii) as expressly provided
in the next succeeding paragraph.
Each of the Dealer Managers agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Trust to the same extent as the
foregoing indemnity from the Company and the Trust to the Dealer Managers
contained in Section 7(a)(A)(i) above, but only with reference to information
relating to the Dealer Managers furnished to the Company in writing through
Merrill Lynch, Pierce, Fenner & Smith Incorporated expressly for use in the
Registration Statement or the Offering Materials.
(b) Promptly after receipt by a person indemnified under this Section
7 of notice of any suit, action, proceeding or investigation with respect to
which an indemnified party may be entitled to indemnification hereunder, such
indemnified person shall notify the person against whom such indemnity may be
sought in writing of the commencement or the written assertion thereof; but the
omission so to notify such indemnifying person shall not relieve such
indemnifying person from any liability which it may have to such indemnified
person unless the indemnifying person has been materially prejudiced by such
omission. Following such notification, such indemnifying person may elect in
writing to assume the defense of such suit, action, proceeding or investigation
and, upon such election, such indemnifying person shall not be liable for any
legal costs subsequently incurred by such indemnified person (other than
reasonable costs of investigation and providing evidence) in connection
therewith, unless (i) such indemnifying person has failed to provide counsel
reasonably satisfactory to such indemnified person in a timely manner, (ii)
counsel which has been provided by such indemnifying person reasonably
determines that its representation of such indemnified person would present it
with a conflict of interest or (iii) such indemnified person reasonably
determines that there
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may be legal defenses available to it which are different from or in addition to
those available to such indemnifying person. In the event of a determination
pursuant to clause (i), (ii) or (iii) above, such indemnified person shall be
entitled to retain separate counsel of their choice and the fees and expenses of
such separate counsel shall be borne by such indemnifying person. Such
indemnifying person shall not in any event be liable for the fees and expenses
of more than one separate firm of attorneys (in addition to any local counsel)
for all the Dealer Managers in any one action or group of related actions,
except as provided in the immediately preceding sentence. Whether or not such
indemnifying person shall have assumed the defense of any suit, action,
proceeding or investigation, the Company, the Trust, and the Dealer Managers
agree to cooperate in the defense thereof and shall furnish such records,
information and testimony, and attend such conferences, discovery proceedings,
hearings, trials and appeals, as may be reasonably requested in connection
therewith.
(c) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified person to the
extent provided under subsection (a) above in respect of any losses, damages,
expenses, liabilities or claims referred to therein, then the indemnifying
person shall contribute to the amount paid or payable by such indemnified person
as a result of such losses, damages, expenses, liabilities or claims (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and its subsidiaries (including the Trust) on the one hand and such
Dealer Manager on the other from the Exchange Offer or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) but also the relative fault of the Company and its subsidiaries
(including the Trust) on the one hand and such Dealer Manager on the other in
connection with any statements or omissions or any other matters which resulted
in such losses, damages, expenses, liabilities or claims, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and its subsidiaries (including the Trust) on the one hand and such
Dealer Manager on the other shall be deemed to be in the same proportion as the
maximum aggregate liquidation preference of the Preferred Securities issuable
pursuant to the Exchange Offer bears to the maximum amount of fees payable to
such Dealer Manager. The relative fault of the Company and its subsidiaries
(including the Trust) on the one hand and such Dealer Manager on the other (i)
in the case of any untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact, shall be determined by
reference to, among other things, whether such statement or omission relates to
information supplied by the Company or any of its subsidiaries (including the
Trust) or their affiliates or such Dealer Manager, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission and (ii) in the case of any other action or omission,
shall be determined by reference to, among other things, whether such action or
omission was taken or omitted to be taken by the Company or any of its
subsidiaries (including the Trust) or their affiliates or by the Dealer Manager,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or
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prevent such action or omission. The Company and the Dealer Managers agree that
it would not be just and equitable if contribution pursuant to this subsection
(c) were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in this
subsection (c). Notwithstanding the provisions of this Section 7(c), no Dealer
Manager shall be required to contribute any amount in excess of the fee paid to
such Dealer Manager as provided in Section 3 hereof. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act of 1933, as amended) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
8. CONDITIONS TO DEALER MANAGERS' OBLIGATIONS. The obligations of
the Dealer Managers hereunder are subject as of the Commencement Date and as of
the Exchange Date to the accuracy of the representations and warranties of the
Company and the Trust contained herein or in certificates of any officer of the
Company or Trustee of the Trust delivered pursuant to the provisions hereof, to
the performance, in all material respects, by the Company and the Trust of their
obligations hereunder to be performed, and to the following additional
conditions:
(a) On the Commencement Date and the Exchange Date, the Registration
Statement shall have become effective under the Securities Act; no stop order
suspending the effectiveness of the Registration Statement shall be in effect,
and no proceedings for such purpose shall be pending before or, to the Company's
or the Trust's knowledge, threatened by the Commission.
(b) On the Commencement Date and the Exchange Date, since the
respective dates as of which information is given in the Prospectus as amended
or supplemented, there shall not have occurred any material adverse change, or
any development involving a prospective material adverse change, in or affecting
particularly the business or assets of the Company and its subsidiaries
considered as a whole, or any material adverse change in the financial position
or results of operations of the Company and its subsidiaries considered as a
whole, otherwise than as set forth or contemplated in the Prospectus as amended
or supplemented.
(c) The Dealer Managers shall have received on the Commencement Date
and the Exchange Date a certificate, dated such date and signed by an executive
officer of the Company, to the effect set forth in clause (b) above and to the
effect that the representations and warranties of the Company contained in this
Agreement are true and correct in all material respects as of such date and that
the Company has complied in all material respects with all of the agreements and
satisfied in all material respects all of the conditions on its part to be
performed or satisfied on or before such date. The officer signing and
delivering such certificate may rely upon the best of such officer's knowledge
as to proceedings threatened.
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(d) On the Commencement Date and the Exchange Date, there shall not
have been since the respective dates as of which information is given in the
Registration Statement, any material adverse change, or any development
involving a prospective material adverse change, in the financial condition or
results of operations of the Trust.
(e) The Dealer Managers shall have received on the Commencement Date
and the Exchange Date a certificate, dated such date and signed by a trustee of
the Trust, to the effect set forth in clause (d) above and to the effect that
the representations and warranties of the Trust contained in this Agreement are
true and correct in all material respects as of such date and that the Trust has
complied in all material respects with all of the agreements and satisfied in
all material respects all of the conditions on its part to be performed or
satisfied on or before such date. The trustee signing and delivering such
certificate may rely upon knowledge as to proceedings threatened.
(f) On the Exchange Date and on the Commencement Date, the Dealer
Managers shall receive a signed opinion of Skadden, Arps, Slate, Meagher & Flom
(Delaware), special counsel for the Trust, dated as of such date, to the effect
that:
(i) the Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act; all filings required
under the laws of the State of Delaware with respect to the creation and valid
existence of the Trust as a business trust have been made; and the Trust has the
trust power and authority to conduct its business, as described in the
Prospectus;
(ii) assuming due authorization, execution and delivery of the
Declaration by the Company and the Trustees, the Declaration is a valid and
binding obligation of the Company and the Trustees, enforceable against the
Company and the Trustees in accordance with its terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency (including
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law) and
except to the extent that the rights to indemnity and contribution contained
therein may be limited by state or securities laws or the public policy
underlying such laws;
(iii) under the Declaration and the Delaware Act, the Trust has
the requisite trust power and authority to execute and deliver this Agreement,
and to perform its obligations under this Agreement and in the Exchange Offer.
This Agreement has been duly authorized, executed and delivered by the Trust;
(iv) the Preferred Securities have been duly authorized for
issuance in accordance with the Declaration and, subject to the qualifications
set forth below, when certificates therefor in the form examined by us are
issued, executed and authenticated
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<PAGE>
in accordance with the Declaration and delivered and paid for in accordance with
this Agreement, will be validly issued, fully paid and non-assessable undivided
beneficial interests in the assets of the Trust and will entitle the holders of
the Preferred Securities to the benefits of the Declaration except to the extent
that enforcement of the Declaration may be limited by (i) bankruptcy, insolvency
(including without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law) and except to the extent that the rights to indemnity and contribution
contained therein may be limited by state or securities laws or the public
policy underlying such laws; and the holders of the Preferred Securities will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We bring to your attention, however, that the holders
of Preferred Securities may be obligated, pursuant to the Declaration, to make
payments, including (i) to provide indemnity and/or security in connection with
and pay taxes or governmental charges arising from transfers of Preferred
Securities and the issuance of replacement Preferred Securities, and (ii) to
provide security and indemnity in connection with requests of or directions to
the Institutional Trustee to exercise its rights and powers under the
Declaration;
(v) the issuance of the Preferred Securities is not subject to
preemptive or other similar rights under the Delaware Act or the Declaration;
and
(vi) the statements made in the Prospectus under the caption
"Description of the Preferred Securities" insofar as such statements constitute
summaries of Delaware law are accurate in all material respects.
(g) On the Exchange Date and on the Commencement Date (provided,
however, that the opinions in paragraphs (iv), (v), (vi) and (vii) below may be
appropriately modified with respect to the Commencement Date), the Dealer
Managers shall have received a signed opinion of Edwards & Angell, counsel for
the Company, dated as of such date, to the effect that:
(i) each of the Company and the subsidiaries of the Company
listed on Schedule A hereto, (the "Significant Subsidiaries") has been duly
incorporated and is validly existing as a corporation or national banking
association in good standing under the laws of the jurisdiction in which it is
chartered or organized, with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus; the Company
is duly qualified to do business as a foreign corporation under the laws of the
State of New York; and neither the Company nor any Significant Subsidiary is
required to be qualified to do business as a foreign corporation under the laws
of any other jurisdiction, and the Company is duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended;
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(ii) All the outstanding shares of the capital stock of the
Significant Subsidiaries have been duly and validly authorized and issued and
are fully paid and (except as provided in 12 U.S.C. Section 55 in the case of
Fleet National Bank and Fleet Bank, National Association) nonassessable, and,
except as otherwise set forth in the Prospectus, all outstanding shares of
capital stock of the Significant Subsidiaries are owned by the Company, free and
clear of any perfected security interest and, to the knowledge of such counsel,
after due inquiry, any other security interests claims, liens or encumbrances;
(iii)this Agreement has been duly authorized by the Company and
has been duly executed and delivered by each of the Company and the Trust;
(iv) the Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law);
(v) the Debentures have been duly authorized, executed and
delivered by the Company and when the Debentures have been duly authenticated by
the Indenture Trustee in accordance with the provisions of the Indenture and
delivered to and paid for by the Trust in exchange for the Target Securities and
money pursuant to terms of the Exchange Offer, the Debentures will constitute
valid and binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law);
(vi) the Declaration has been duly authorized, executed and
delivered by the Company; and, assuming the due authorization, execution and
delivery of the Declaration by First Chicago Delaware Inc. and The First
National Bank of Chicago, the Declaration constitutes a valid and binding
obligation of the Company and is enforceable against the Company in accordance
with its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law);
20
<PAGE>
(vii) the Guarantee has been duly authorized, executed and
delivered by the Company, and is a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law);
(viii) the Indenture, Guarantee and the Declaration have each
been duly qualified under the Trust Indenture Act;
(ix) the holders of outstanding shares of capital stock of the
Company are not entitled to any preemptive rights under the Articles of
Incorporation or By-Laws of the Company or the laws of the State of Rhode Island
to subscribe for the Preferred Securities or the Debentures;
(x) the documents incorporated by reference in the Prospectus or
any further amendment or supplement thereto made by the Company or the Trust
prior to the Exchange Date (other than the financial statements and supporting
schedules included therein or omitted therefrom, as to which such counsel need
express no opinion), when they were filed with the Commission complied as to
form in all material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder;
(xi) the statements made in the Prospectus under the captions
"Description of the Preferred Securities", "Description of the Preferred
Securities Guarantee", "Description of the Junior Subordinated Debentures",
"Description of the Preferred Stock and Depositary Shares" and "Relationship
Between the Preferred Securities, the Junior Subordinated Debentures and the
Preferred Securities Guarantee", insofar as such statements purport to summarize
certain provisions of the Preferred Securities, the Common Securities, the
Debentures, the Guarantee, the Indenture, the Declaration, the Preferred Stock,
the Depositary Shares and the Articles of Incorporation of the Company, to the
extent that they constitute matters of law or legal conclusions, have been
reviewed by such counsel and fairly summarize the information required to be
disclosed therein;
(xii) neither the issue and sale by the Trust of the Preferred
Securities, nor the consummation of the Exchange Offer and any other of the
transactions contemplated by this Agreement nor the fulfillment of the terms in
this Agreement will conflict with, result in a breach of, or constitute a
default under the charter or by-laws of the Company or the organizational
documents or Declaration of the Trust or the terms of any indenture or other
agreement or instrument known to such counsel and to which the Company or any of
its subsidiaries is a party or bound, or any order or regulation known
21
<PAGE>
to such counsel to be applicable to the Company or any of its subsidiaries of
any governmental body or arbitrator having jurisdiction over the Company or any
of its subsidiaries;
(xiii) neither the Company nor the Trust is required to be
registered under the Investment Company Act of 1940, as amended;
(xiv) there is no pending or, to the best knowledge of such
counsel, threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its
subsidiaries, of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus, and there is no
franchise, contract or other document of a character required to be described in
the Registration Statement or Prospectus, or to be filed as an exhibit, which is
not described or filed as required;
(xv) such counsel has been orally advised by the Commission that
the Registration Statement was declared effective under the Securities Act on
December __, 1996; any required filing of the Prospectus pursuant to Rule 424(b)
under the Securities Act has been made in the manner and within the time period
required by Rule 424(b) and, such counsel has been orally advised by the
Commission that no stop order suspending the effectiveness of the Registration
Statement has been issued by the Commission and, no proceeding for that purpose
is pending or, to such Counsel's knowledge, threatened by the Commission;
(xvi) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement, except such as have been obtained
under the Securities Act and such as may be required under the blue sky laws of
any jurisdiction in connection with the purchase and distribution of the
Preferred Securities by the Dealer Managers and such other approvals (specified
in such opinion) as have been obtained;
(xvii) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement; and
(xviii) the Registration Statement, as of its effective date, and
the Prospectus, as of its date, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Securities Act
and the Securities Act Regulations, except that in each case such counsel need
not express an opinion as to the financial statements, schedules and other
financial and statistical data included therein or excluded therefrom or the
exhibits to the Registration Statement, and such counsel need not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus except for those made
under the captions "Description of the Preferred Securities", "Description of
the Preferred Securities
22
<PAGE>
Guarantee", "Description of the Junior Subordinated Debentures", "Relationship
Between the Preferred Securities, the Junior Subordinated Debentures and the
Preferred Securities Guarantee", and "Description of the Preferred Stock and
Depositary Shares" in the Prospectus insofar as they relate to provisions of
documents therein described.
Additionally, in giving its opinion, such counsel shall state that
such counsel has participated in conferences with representatives of the Dealer
Managers, officers and other representatives of the Company and representatives
of the independent certified public accountants of the Company, at which
conferences the contents of the Registration Statement and the Prospectus and
related matters were discussed, and although such counsel does not pass upon and
does not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement and the Prospectus
(except and only to the extent as set forth in paragraphs (xviii) above), on the
basis of the foregoing (relying as to materiality to a large extent upon the
discussions with and representations and opinions of officers and other
representatives of the Company), no facts have come to the attention of such
counsel which lead such counsel to believe that the Registration Statement at
the time it became effective or at the date hereof contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date or the date of such opinion, included an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; PROVIDED that such counsel does not
express any comment with respect to the financial statements including the notes
thereto and supporting schedules, or any other financial and statistical data
set forth or referred to in the Registration Statement or the Prospectus.
In rendering such opinion, such counsel may indicate that they are
members of the bar of the State of Rhode Island and that they express no opinion
as to the laws of any jurisdiction other than the federal laws of the United
States and the laws of the State of Rhode Island. Such counsel may also state
that, insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials. In addition, such counsel
shall state that such counsel have participated in the preparation of the
Registration Statement, the Prospectus and the documents incorporated by
reference therein and no facts have come to such counsel's attention that leads
them to believe that the Registration Statement (including the documents
incorporated by reference therein pursuant to Item 11 of Form S-4) at the time
such Registration Statement became effective, or if an amendment to the
Registration Statement or an Annual Report on Form 10-K has been filed with the
Commission subsequent to the effectiveness of the Registration Statement, then
at the time such amendment became effective or at the time of the most recent
such filing, contained an untrue statement of a material fact omitted to state a
material fact required to be stated therein or necessary to make the statements
contained therein not misleading, or that the Prospectus as of its date and the
date of such opinion (including the documents incorporated
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<PAGE>
by reference therein pursuant to Item 11 of Form S-4) or any amendment or
supplement thereto, contained or contains an untrue statement of a material fact
or omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that such counsel need express no
belief with respect to the financial statements and schedules and other
financial data included or incorporated by reference in the Registration
Statement, or the Prospectus or any amendment thereto or the Statement of
Eligibility on Form T-1 of the Trustee.
(h) On the Commencement Date and on the Exchange Date, the Dealer
Managers shall have received a signed opinion of Edwards & Angell, tax counsel
to the Trust, confirming their opinion under the caption "United States Federal
Income Taxation" in the Prospectus.
(i) The Dealer Managers shall have received the favorable opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Dealer Managers, dated
as of the Commencement Date and the Exchange Date, with respect to the validity
of the Preferred Securities, the Registration Statement, the Prospectus and
other related matters as the Dealer Managers may reasonably require. In giving
such opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and Delaware, and the
federal law of the United States, upon the opinions of counsel satisfactory to
the Dealer Managers. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company, trustees of the Trust and certificates
of public officials.
(j) On the Commencement Date, the Dealer Managers shall have received
from the Company's independent public accountants, in form and substance
reasonably satisfactory to the Dealer Managers and dated as of such date,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to dealer managers with respect to the financial
statements and certain financial information contained in or incorporated by
reference into the Prospectus.
(k) At the Exchange Date, the Dealer Managers shall have received
from the Company's independent public accountants, in form and substance
reasonably satisfactory to the Dealer Managers and dated as of such dates, to
the effect that such accountants reaffirm the statements made in the letter
furnished pursuant to Section 8(j).
(l) At the Exchange Date, the Preferred Securities shall have been
duly listed, subject to official notice of issuance, on the NYSE.
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(m) By the Exchange Date, the Company shall have entered into
appropriate agreements with the Information Agent and the Exchange Agent for
purposes of the Exchange Offer.
9. TERMINATION.
(a) This Agreement shall terminate upon the earliest to occur of (i)
the Exchange Date, (ii) the date on which the Dealer Managers give notice to the
Company and the Trust that any of the conditions specified in Section 8 have not
been fulfilled as of any date such conditions are required to be fulfilled
pursuant to Section 8 or (iii) the date on which the Company terminates or
withdraws the Exchange Offer for any reason (the earliest to occur of clauses
(i), (ii) or (iii) being referred to as the "Termination Date ").
(b) Notwithstanding termination of this Agreement pursuant to
subsection (a) of this Section 9, the obligations of the Company to compensate
and/or reimburse, as applicable, the Dealer Managers pursuant to Section 3, 4 or
5, the representations and warranties contained in Section 6 and the provisions
of Section 7 shall survive any termination of this Agreement.
10. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the Dealer Managers shall
be directed to Merrill Lynch at North Tower, World Financial Center, New York,
New York 10281-1201, attention of Syndicate Operations; notices to the Trust
shall be directed to it at The First National Bank of Chicago, One North State
Street, 9th Floor, Chicago, Illinois, attention of Corporate Trust Administrator
and notices to the Company shall be directed to it at Fleet Financial Group,
Inc., One Federal Street, Boston, Massachusetts, 02110, attention of General
Counsel.
11. TOMBSTONE. The Company and the Trust acknowledge that the Dealer
Managers may, with the prior review and approval of the Company, which approval
shall not be unreasonably withheld, place an announcement in such newspapers and
periodicals as the Dealer Managers may choose, stating that the Dealer Managers
are or were acting as dealer manager and financial advisors to the Company and
the Trust in connection with the Exchange Offer. The costs relating to any such
tombstone shall be borne by the Dealer Managers.
12. SURVIVAL OF CERTAIN PROVISIONS. The representations, warranties,
indemnities and agreements of the Company and the Trust will remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any of the Dealer Managers or any affiliate or controlling person
thereof and, subject to Section 9(b), will survive the consummation of the
Exchange Offer.
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13. GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the internal laws of the State of New York.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute one and
the same Agreement.
15. SUCCESSORS. This Agreement is made solely for the benefit of the
Dealer Managers, the Company and the Trust and, to the extent expressed, the
parties indemnified pursuant to Section 7, and no other persons shall acquire or
have any right under or by virtue of this Agreement. Nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective successors and assigns, and, to the extent expressly
set forth herein, the parties indemnified pursuant to Section 7 hereof, any
rights or remedies under or by reason of this Agreement. Without limiting the
generality of the foregoing, the parties acknowledge that nothing in this
Agreement, expressed or implied, is intended to confer on holders of the
securities of the Trust, the Company or any of its subsidiaries or creditors of
the Company or any of its subsidiaries or the respective successors and assigns
of such creditors, any rights or remedies under or by reason of this Agreement.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement among the Company, the Trust and the
Dealer Managers in accordance with its terms.
Very truly yours,
FLEET FINANCIAL GROUP, INC.
By:
-------------------------------------
FLEET CAPITAL TRUST II
By:
-------------------------------------
Name:
Title: Regular Trustee
By:
-------------------------------------
Name:
Title: Regular Trustee
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Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
SMITH BARNEY INC.
By: MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
--------------------------------
Authorized Signatory
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SCHEDULE A
LIST OF SIGNIFICANT SUBSIDIARIES
Fleet National Bank
Fleet Bank
Fleet Bank, National Association
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EXHIBIT 5(a)
EDWARDS & ANGELL
2700 Hospital Trust Tower
Providence, RI 02903
December 24, 1996
Fleet Financial Group, Inc.
One Federal Street
Boston, Massachusetts 02110
Fleet Capital Trust I,
c/o Fleet Financial Group, Inc.
One Federal Street
Boston, Massachusetts 02110
Re: Registration Statement on Form S-4
Registration Number 333-16001
-----------------------------
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-4 (333-16001) filed
by Fleet Financial Group, Inc., a Rhode Island corporation ("Fleet"), and
Fleet Capital Trust I, a Delaware business trust (the "Trust"), with the
Securities and Exchange Commission (the "Commission") on November 13, 1996,
as amended by Amendment No. 1 filed with the Commission on December 17, 1996
and Amendment No. 2 filed with the Commission on December 24, 1996 (as
amended, the "Registration Statement"), in connection with the registration
under the Securities Act of 1933, as amended (the "Securities Act"), of (i)
8.00% Trust Originated Preferred Securities of the Trust (the "Preferred
Securities") and (ii) 8.00% Junior Subordinated Debentures due 2027 of Fleet
(the "Junior Subordinated Debentures") pursuant to the offer (the "Offer") by
Fleet and the Trust to exchange the Preferred Securities for any and all of
Fleet's depositary shares, each representing a 1/10 interest in a share of
Series V 7.25% Perpetual Preferred Stock, $1.00 par value, of Fleet not owned
by Fleet. The Junior Subordinated Debentures will be issued in accordance
with the provisions of an indenture, to be supplemented by a Second
Supplemental Indenture (as so supplemented, the "Indenture") each executed by
Fleet and The First National Bank of Chicago, as trustee (the "Trustee"), the
forms of which are exhibits to the Registration Statement. The Preferred
Securities will be guaranteed by Fleet in the manner and to the extent set
forth in a Guarantee Agreement (the "Preferred Securities Guarantee"), the
form of which is an exhibit to the Registration Statement.
<PAGE>
We have served as counsel for Fleet and the Trust and in so acting, we have
examined the following documents and records:
(1) The Registration Statement, including the prospectus (the
"Prospectus") contained therein;
(2) The form of the Indenture;
(3) The form of the Junior Subordinated Debentures;
(4) The form of the Preferred Securities Guarantee; and
(5) All corporate minutes and proceedings of Fleet relating to the
issuance of the Preferred Securities and the Junior Subordinated Debentures.
We have also examined such further documents, records and proceedings as we
have deemed pertinent in connection with the issuance of the Junior Subordinated
Debentures and the execution of the Preferred Securities Guarantee. In our
examination, we have assumed the genuineness of all signatures, the legal
capacity of natural persons, the completeness and authenticity of all documents
submitted to us as originals, and the conformity to the originals of all
documents submitted to us as certified, photostatic or conformed copies, and the
validity of all laws and regulations. We also are familiar with the additional
proceedings proposed to be taken by Fleet in connection with the authorization,
registration and issuance of the Junior Subordinated Debentures and the
execution of the Preferred Securities Guarantee, and have assumed that all
documents relating thereto are duly executed and delivered in substantially the
forms reviewed by us. As to all questions of fact material to this opinion that
have not been independently established, we have replied upon certificates or
comparable documents of officers and representatives of Fleet and the Trust.
We express no opinion with respect to matters involving the Delaware
Business Trust Act, as amended, and the rules and regulations thereunder.
Based on the foregoing, and subject to the qualifications stated herein, it
is our opinion that:
1. The Junior Subordinated Debentures have been duly and validly authorized
by Fleet and, when executed, authenticated, issued and delivered in the manner
contemplated in the Indenture, will constitute legal, valid and binding
obligations of Fleet, entitled to the benefits of the Indenture and enforceable
against it in accordance with their terms except as enforcement may be limited
by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws or equitable principles relating to or limiting creditors' rights
and remedies generally and except to the extent that rights to indemnification
thereunder may be limited by federal or state securities laws or public policy
relating thereto. We express no opinion as the availability of equitable
remedies.
-2-
<PAGE>
2. The Preferred Securities Guarantee has been duly and validly authorized
byFleet and, when executed and delivered by Fleet, will constitute the legal,
valid and binding obligation of Fleet except as enforcement may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws or equitable principles relating to or limiting creditors' rights
and remedies generally. We express no opinion as to the availability of
equitable remedies.
We are qualified to practice law in the State of Rhode Island and we do not
purport to express any opinion herein concerning any law other than the laws of
the State of Rhode Island and the federal law of the United States.
The opinions expressed herein are rendered solely for your benefit in
connection with the transactions described herein. These opinions may not be
used or relied upon by any other person, nor may this letter or any copies
thereof be furnished to a third party, filed with a governmental agency, quoted,
cited or otherwise referred to without our prior written consent.
V. Duncan Johnson, a partner of Edwards & Angell, is a director of Fleet
National Bank, a subsidiary of Fleet.
This opinion is furnished to you solely for your benefit in connection
with the filing of the Registration Statement and, except as set forth below,
is not to be used, circulated, quoted or otherwise referred to for any other
purpose or relied upon by any other person for any purpose without our prior
written consent. We hereby consent to the use of our name under the heading
"Legal Matters" in the Prospectus. We also hereby consent to the filing of
this opinion with the Commission as an exhibit to the Registration Statement.
In giving this consent, we do not thereby admit that we are within the
category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission promulgated thereunder. This
opinion is expressed as of the date hereof unless otherwise expressly stated,
and we disclaim any undertaking to advise you of any subsequent changes in
the facts stated or assumed herein or of any subsequent changes in applicable
law.
Very truly yours,
/s/ Edwards & Angell
-------------------------------------------
Edwards & Angell
-3-
<PAGE>
EXHIBIT 5(b)
[Letterhead of Skadden, Arps, Slate,
Meagher & Flom (Delaware)]
December 24, 1996
Fleet Financial Group, Inc.
Fleet Capital Trust I
c/o Fleet Financial Group, Inc.
One Federal Street
Boston, Massachusetts 02110
Re: Fleet Financial Group, Inc.;
Fleet Capital Trust I
Registration Statement on Form S-4
(Registration No. 333-16001)
------------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to (1) Fleet Capital Trust I
(the "TRUST"), a statutory business trust formed under the laws of the State of
Delaware, and (2) Fleet Financial Group, Inc., a corporation organized under the
laws of the State of Rhode Island (the "COMPANY"), in connection with the
preparation of a Registration Statement on Form S-4 (Registration No.
333-16001), filed by the Company and the Trust with the Securities and Exchange
Commission (the "COMMISSION") on November 13, 1996 under the Securities Act of
1933, as amended (the "ACT"), Amendment No. 1 thereto filed with the
Commission on December 17, 1996 and Amendment No. 2 thereto filed
with the Commission on December 24, 1996 (such Registration Statement, as so
amended, being hereinafter referred to as the "REGISTRATION STATEMENT"),
in connection with the issuance of 8.00% Trust Originated Pre-
<PAGE>
Fleet Capital Trust I
Fleet Financial Group, Inc.
December 24, 1996
Page 2
ferred Securities by the Trust (the "PREFERRED SECURITIES -SM- or "TOPrS -SM-")
to be exchanged for any and all of the 11,000,000 depositary shares not owned by
the Company, each representing one-tenth of a share of 7.25% Series V Perpetual
Preferred Stock (liquidation preference equivalent to $25 per depositary share)
of the Company. In connection with the issuance of the Preferred Securities, the
Trust is also issuing common securities (the "COMMON SECURITIES") to the
Company.
The Preferred Securities and Common Securities are to be issued
pursuant to the Amended and Restated Declaration of Trust of the Trust, to be
dated the Exchange Date (the "DECLARATION"), among the Company, as sponsor,
First Chicago Delaware Inc., as Delaware trustee, The First National Bank of
Chicago, as institutional trustee (the "INSTITUTIONAL TRUSTEE"), and Eugene M.
McQuade, Douglas J. Jacobs and John R. Rodehurst, as trustees.
The entire proceeds from the sale of the Preferred Securities and the
Common Securities are to be used by the Trust to purchase Junior Subordinated
Debentures (the "DEBENTURES") due 2026, to be issued by the Company. The
Debentures are to be issued pursuant to an indenture, dated as of December 11,
1996 (the "BASE INDENTURE"), between the Company and The First National Bank of
Chicago, as debt trustee, as supplemented by a Second Supplemental Indenture
(the Base Indenture, as so supplemented, is hereinafter referred to as the
"INDENTURE").
This opinion is being delivered in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Act. Capitalized terms used but not
otherwise
- -------------------
- -SM- "Trust Originated Preferred Securities" and "TOPrS are service marks of
Merrill Lynch & Co., Inc.
<PAGE>
Fleet Capital Trust I
Fleet Financial Group, Inc.
December 24, 1996
Page 3
defined herein have the meanings ascribed to them in the Registration Statement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the certificate of
trust of the Trust, filed with the Secretary of State of the State of Delaware
on November 1, 1996; (ii) the form of the Declaration; (iii) the form of the
Preferred Securities; and (iv) the Registration Statement. We have also
examined originals or copies, certified or otherwise identified to our
satisfaction, of such other documents, certificates and records as we have
deemed necessary or appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Trust, we have assumed that such
parties had the power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such parties
of such documents and that such documents constitute valid and binding
obligations of such parties. In addition, we have assumed that the Declaration
and the Preferred Securities, when executed, will be executed in substantially
the forms reviewed by us. As to any facts material to the opinions expressed
herein which were not independently established or verified, we have relied upon
oral or written statements and representations of officers, trustees and other
representatives of the Company, the Trust and others.
Members of our firm are admitted to the bar in the State of Delaware,
and we do not express any opinion
<PAGE>
Fleet Capital Trust I
Fleet Financial Group, Inc.
December 24, 1996
Page 4
as to the laws of any jurisdiction other than the laws of the State of Delaware.
Based on and subject to the foregoing and to the other qualifications
and limitations set forth herein, we are of the opinion that the Preferred
Securities, when the Declaration is duly executed and delivered by the parties
thereto and the terms of the Preferred Securities are established in accordance
with the terms of the Declaration, will be duly authorized for issuance and,
when issued, executed and authenticated in accordance with the Declaration and
delivered as contemplated by the Registration Statement, will be validly issued,
fully paid and nonassessable, representing undivided beneficial interests in the
assets of the Trust; and the holders of the Preferred Securities will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We bring to your attention, however, that the holders
of Preferred Securities may be obligated, pursuant to the Declaration, to (i)
provide indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers of the Preferred Securities and (ii)
provide security and indemnity in connection with the requests of or directions
to the Institutional Trustee to exercise its rights and powers under the
Declaration.
This opinion is furnished to you solely for your benefit in connection
with the filing of the Registration Statement and, except as set forth below, is
not to be used, circulated, quoted or otherwise referred to for any other
purpose or relied upon by any other person for any purpose without our prior
written consent. We hereby consent to the use of our name under the heading
"Legal Matters" in the prospectus which forms a part of the Registration
Statement. We also hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. In giving this
<PAGE>
Fleet Capital Trust I
Fleet Financial Group, Inc.
December 24, 1996
Page 5
consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission promulgated thereunder. This opinion is expressed
as of the date hereof unless otherwise expressly stated, and we disclaim any
undertaking to advise you of any subsequent changes in the facts stated or
assumed herein or of any subsequent changes in applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher &
Flom (Delaware)
<PAGE>
EXHIBIT 8
EDWARDS & ANGELL
2700 Hospital Trust Tower
Providence, RI 02903
December 24, 1996
Fleet Financial Group, Inc.
One Federal Street
Boston, Massachusetts 02110
Fleet Capital Trust I,
c/o Fleet Financial Group, Inc.
One Federal Street
Boston, Massachusetts 02110
Re: Registration Statement on Form S-4
Registration No. 333-16001
--------------------------
Ladies and Gentlemen:
We have acted as counsel to Fleet Financial Group, Inc., a Rhode Island
corporation ( "Fleet"), and Fleet Capital Trust I, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), in connection
with the above-captioned registration statement on Form S-4 filed with the
Securities and Exchange Commission (the "Commission") on November 13, 1996,
as amended by Amendment No. 1 filed with the Commissioner on December 17,
1996 and Amendment No. 2 filed into the Commission on December 24, 1996 (as
amended, the "Registration Statement") for the purpose of registering under
the Securities Act of 1933, as amended, the (i) 8.00% Trust Originated
Preferred Securities representing undivided beneficial interests in the
assets of the Trust and (ii) 8.00% Junior Subordinated Deferrable Interest
Debentures due 2027 issued by Fleet to the Trust, in connection with an offer
(the "Offer") by Fleet and the Trust to exchange the Preferred Securities for
any and all of Fleet's depositary shares, each representing a 1/10 interest
in a share of Series V 7.25% Perpetual Preferred Stock, $1.00 par value, of
Fleet not owned by Fleet. All capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Registration
Statement.
We hereby confirm that, although the discussion set forth under the heading
"UNITED STATES FEDERAL INCOME TAXATION" in the Registration Statement does not
purport to discuss all possible United States federal income tax consequences of
the purchase, ownership and disposition of Preferred Securities, in our opinion,
such discussion constitutes, in all material respects, a fair and accurate
summary of the United States federal income tax consequences of the purchase,
ownership and disposition of Preferred Securities, based upon current law. It
is possible that contrary positions may be taken by the Internal Revenue Service
and that a court may agree with such contrary positions.
<PAGE>
This opinion is furnished to you solely for your benefit in connection with
the filing of the Registration Statement and, except as set forth below, is not
to be used, circulated, quoted or otherwise referred to for any other purpose or
relied upon by any other person for any purpose without our prior written
consent. We hereby consent to the use of our name under the heading "Legal
Matters" in the Registration Statement and the filing of this opinion with the
Commission as Exhibit 8 to the Registration Statement. In giving this consent,
we do not thereby admit that we are within the category of persons whose consent
is required under Section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the Commission promulgated thereunder. This opinion is
expressed as of the date hereof unless otherwise expressly stated and applies
only to the disclosure under the heading "UNITED STATES FEDERAL INCOME TAXATION"
set forth in the Registration Statement. We disclaim any undertaking to advise
you of any subsequent changes to the facts stated or assumed herein or any
subsequent changes in applicable law.
Very truly yours,
/s/ Edwards & Angell
EDWARDS & ANGELL
-2-
<PAGE>
EXHIBIT 23(a)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Fleet Financial Group, Inc.:
We consent to the use of our report incorporated by reference in the Annual
Report on Form 10-K of Fleet Financial Group, Inc. for the year ended December
31, 1995, which is incorporated herein by reference, and to the reference to our
firm under the heading "Experts" in the Prospectus. Our report refers to changes
in the methods of accounting for mortgage servicing rights, investment in debt
and equity securities and income taxes.
KPMG PEAT MARWICK LLP
Boston, Massachusetts
December 23, 1996
<PAGE>
EXHIBIT 23(b)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Fleet Bank, National Association
We consent to the incorporation by reference herein in Amendment No. 2 to
Form S-4 of Fleet Financial Group, Inc. of our report dated January 18, 1996
relating to the consolidated statement of condition of National Westminster
Bancorp, Inc. and Subsidiaries as of December 31, 1995 and 1994 and the related
consolidated statement of operations, statement of changes in equity capital and
statement of cash flows for each of the years in the three-year period ended
December 31, 1995, which report appears in the Current Report on Form 8-K of
Fleet Financial Group, Inc. dated March 25, 1996 and to the reference to our
Firm under the heading "Experts" in the Registration Statement. Our report
refers to changes in the methods of accounting for investments and accounting
for postretirement benefits other than pensions.
KPMG PEAT MARWICK LLP
New York, New York
December 23, 1996
<PAGE>
EXHIBIT 99(E)
December 30, 1996
Fleet National Bank
Corporate Trust Operations
One Talcott Plaza, 5th Floor
Hartford, CT 06106
Attn: Ms. Rosemarie Pavao
Re: Fleet Financial Group, Inc. ("Fleet") and Fleet Capital Trust I
(the "Trust" and, together with Fleet, the "Offerors")
Ladies and Gentlemen:
Pursuant to "The Offer" section of the Prospectus dated December 30, 1996
(the "Prospectus"), we appoint you as Exchange Agent subject to the terms
hereof. Capitalized terms used herein without definition shall have the meanings
ascribed thereto in the Prospectus.
The Offerors have delivered to you or will deliver to you (i) a copy of the
Letter of Transmittal, (ii) copies of all other documents or materials to be
forwarded to the Holders and (iii) a copy of the resolutions adopted by the
Board of Directors of Fleet or a duly constituted committee thereof authorizing
the Offer and your appointment as Exchange Agent. Fleet has delivered or will
deliver to you (i) a list showing the names and addresses of the Holders as of
the close of business on December 30, 1996, and the number of Depositary Shares
held by each such Holder as of such date and (ii) a list of certificates (giving
the certificate number), stating which Depositary Shares have been or are, as of
such date, lost, stolen, destroyed or replaced or restricted as to transfer
(noting the text of the restrictive legends applicable thereto) or with respect
to which a stop transfer order has been noted.
1. APPOINTMENT OF THE EXCHANGE AGENT.
This will confirm the Offerors' appointment of Fleet National Bank as the
Exchange Agent provided for in the Prospectus and, in that capacity,
authorization to act solely as agent for the Offerors hereunder for the purpose
of receiving from the Holders the Depositary Shares tendered in exchange for
Preferred Securities of the Trust upon satisfaction of the conditions set forth
herein and in the Prospectus. You will not owe fiduciary duties to any other
person by reason of this appointment.
2. DUTIES AND OBLIGATIONS OF THE EXCHANGE AGENT.
As Exchange Agent, you are hereby instructed to perform the specific
exchange agency duties set forth in "The Offer" section of the Prospectus and in
the related Letter of Transmittal and to perform such duties as are specifically
set forth herein, and no implied covenants or obligations should be read into
your appointment as Exchange Agent against you. Without limiting and in
furtherance of the foregoing, you shall not be liable or responsible for any of
the provisions of the Prospectus except for those expressly referred to herein
above. Further, as Exchange Agent you:
(i) will, at the request of Fleet, orally advise the Dealer Managers by
5:00 p.m. on each Business Day during the term of the Offer as of 4:00 p.m.
on such day with respect to the Depositary Shares tendered as follows: (a)
the number of Depositary Shares validly tendered represented by certificates
physically held by you (or for which you have received confirmation of
receipt of book-entry transfer into your account at The Depository Trust
Company pursuant to the procedures set forth in "The Offer" section of the
Prospectus) on such day; (b) the number of Depositary Shares represented by
Notices of Guaranteed Delivery on such day; (c) the number of Depositary
Shares properly withdrawn on such day; and (d) the cumulative number of
Depositary Shares in categories (a) through (c) above;
<PAGE>
(ii) will, by 5:00 p.m. on the Business Day following such oral
communication, furnish to the Dealer Managers a written report confirming
the above information and furnish to the Dealer Managers such reasonable
information on the tendering holders of Depositary Shares as may be
requested from time to time;
(iii) will be regarded as making no representations or warranties and
having no responsibilities regarding the validity or adequacy of the
Offerors' power to make this appointment or the Offer;
(iv) will not be responsible in any manner whatsoever for the
correctness of the statements made in the Prospectus, the Letter of
Transmittal or in any document furnished to you by the Offerors;
(v) shall not be liable for any action taken, suffered or omitted or
for any error of judgment made by you in the performance of your duties
hereunder, in the absence of willful misconduct or negligence on your part,
nor shall you be liable for any error of judgment made in good faith unless
you shall have been negligent in ascertaining the pertinent facts;
(vi) will, within one week following the consummation of the Offer and
upon receipt of sufficient funds therefor from Fleet, pay or arrange for
payment of the fees due and owing to the Soliciting Dealers as described in
the Prospectus.
(vii) may rely and shall be protected in acting or refraining from
acting upon any communication authorized hereby and upon any oral or written
instruction, notice, request, direction, consent, report, certificate, form
of bond certificate or other instrument, paper or document in good faith
reasonably believed by you to be genuine;
(viii) may consult with counsel of your choice, and the advice of such
counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by you hereunder in good faith and
in reasonable reliance thereon; and
(ix) may perform your duties and exercise your rights hereunder
directly or by or through agents or attorneys.
3. MAINTENANCE OF RECORDS.
You will keep and maintain complete and accurate records and ledgers showing
all Depositary Shares exchanged by you and payments made by you. Letters of
Transmittal, Notices of Guaranteed Delivery and telegrams, telexes, facsimile
transmissions and other materials submitted to you shall be preserved by you
until delivered to, or otherwise disposed of in accordance with the instructions
of, the Offerors.
4. INDEMNIFICATION, COMPENSATION AND EXPENSES.
(a) In consideration of your acceptance of the foregoing appointment by
the Offerors, Fleet hereby agrees:
(i) to indemnify you for, and to hold you harmless against, any loss,
liability or expense incurred without negligence or willful misconduct on
your part, arising out of or in connection with the acceptance or
administration of the agency created under the foregoing appointment,
including the costs and expenses (including the reasonable fees and expenses
of your counsel) of defending yourself against any claim or liability in
connection with the exercise or performance of any of your duties thereunder
and of enforcing this indemnification provision;
(ii) to pay to you a fee for all services rendered by you under the
foregoing appointment as agreed between Fleet and you; and
(iii) to reimburse you upon your request for all reasonable expenses,
disbursements and advances incurred or made by you in accordance with any of
your agency duties (including the reasonable compensation and the reasonable
expenses and disbursements of your agents and counsel), except any such
expenses, disbursements or advances as may be attributable to your
negligence or willful misconduct.
<PAGE>
(b) You shall not be required to advance, expend or risk your own funds
or otherwise incur or become exposed to financial liability in the
performance of your duties hereunder.
5. INTERNAL REVENUE SERVICE FILINGS.
You shall arrange to comply with all requirements under the tax laws of the
United States, including those relating to missing Taxpayer Identification
Numbers, and shall file any appropriate reports with the Internal Revenue
Service (e.g., 1099, 1099B, etc.).
6. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.
7. GOVERNING LAW.
This agreement shall be construed and enforced in accordance with the laws
of the State of Rhode Island.
Please confirm your acceptance of your appointment as Exchange Agent and the
arrangements herein provided by signing and returning to us the enclosed
duplicate of this letter.
[The rest of this page is left blank intentionally]
<PAGE>
Sincerely,
FLEET FINANCIAL GROUP, INC.
By: ___________________________
Name:
Title:
FLEET CAPITAL TRUST I
By: ___________________________
Name:
Title:
ACCEPTED:
FLEET NATIONAL BANK
By: ____________________________________
Name:
Title:
<PAGE>
EXHIBIT 99(F)
December 2, 1996
Fleet Financial Group, Inc.
50 Kennedy Plaza
Providence, RI 02903
LETTER OF AGREEMENT
This Letter of Agreement (the "Agreement") sets forth the terms and
conditions under which Georgeson & Company Inc. ("Georgeson") has been retained
by Fleet Financial Group, Inc. ("Fleet") as Information Agent for its exchange
offer for shares of Fleet's Series V 7.25% Perpetual Preferred Stock. The term
of the Agreement shall be the term of the Offer, including any extensions
thereof.
1. During the term of the Agreement, Georgeson will: provide advice and
consultation with respect to the planning and execution of the Offer;
assist in the preparation and placement of newspaper ads; assist in the
distribution of Offer documents to brokers, banks, nominees,
institutional investors, and other shareholders and investment community
accounts; answer collect telephone inquiries from shareholders and their
representatives; and, if requested, call individuals who are registered
holders.
2. Fleet will pay Georgeson a fee of $15,000.00, of which half is payable
in advance per the enclosed invoice and the balance at the expiration of
the Offer, plus an additional fee to be mutually agreed upon if the Offer
is extended more than thirty days beyond the initial expiration date. In
addition Georgeson will charge a fee of $5.00 per call for each incoming
or outgoing telephone call made to or received from individual
shareholders of record or beneficial shareholders.
3. In connection with our services under this agreement, you agree to
reimburse us, or pay directly, or, where requested by us, advance
sufficient funds to us for payment for the following costs and expenses:
--expenses incidental to the Offer, including typesetting, printing,
distribution, mailing, postage and freight charges incurred by us on your
behalf;
--expenses we incur in working with your agents or other parties,
including bank threshold lists, data processing, charges for facsimile
transmissions or other forms of electronic communications, charges of
courier, and other such services authorized by you;
--expenses we incur at your request or for your convenience, including
printing additional and/or supplemental material, copying, and travel
expenses of our executives;
--fees and expenses authorized by you resulting from extraordinary
contingencies during the solicitation, including advertising, media
relations, stock watch and analytical services.
4. If requested, we will check, itemize and pay, on your behalf, from funds
provided by you, the charges of brokers and banks, with the exception of
ADP Proxy Services which will bill you directly, for forwarding Offer
material to beneficial owners. To ensure that we have sufficient funds in
your account to pay these bills promptly, you agree to provide us, at the
time we complete the initial delivery of this material, with a
preliminary payment equal to 75% of the anticipated broker and bank
charges for distributing this material. For this service, you will pay us
five dollars and fifty cents ($5.50) for each broker and bank invoice
paid by us. If you prefer to pay these bills directly, please strike out
and initial this clause before returning the Agreement to us.
5. Georgeson hereby agrees not to make any representations not included in
the Offer documents.
6. Fleet agrees to indemnify and hold Georgeson harmless against any loss,
damage, expense (including, without limitation, legal and other related
fees and expenses), liability or claim arising
<PAGE>
out of Georgeson's fulfillment of the Agreement (except for any loss,
damage, expense, liability or claim arising out of Georgeson's own
negligence or misconduct). At its election, Fleet may assume the defense
of any such action. Georgeson hereby agrees to advise Fleet of any such
liability or claim promptly after receipt of any notice thereof. The
indemnification contained in this paragraph will survive the term of the
Agreement.
7. Georgeson agrees to preserve the confidentiality of all non-public
information provided by Fleet or its agents for our use in providing
services under this Agreement, or information developed by Georgeson
based upon such non-public information.
If the above is agreed to by you, please sign and return the enclosed
duplicate of this Agreement to Georgeson & Company Inc., Wall Street Plaza, New
York, New York 10005, Attention: Marcy Roth, Contract Administrator.
<TABLE>
<S> <C>
ACCEPTED: Sincerely,
FLEET FINANCIAL GROUP, INC. GEORGESON & COMPANY INC.
</TABLE>
<TABLE>
<S> <C>
By:
Kay DeAngelis
By: Senior Managing Director
Title:
Date:
</TABLE>
