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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------------
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR QUARTERLY PERIOD ENDED JUNE 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD _________ TO ________
COMMISSION FILE NUMBER 1-6366
FLEET FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
RHODE ISLAND 05-0341324
(State or other jurisdiction of incorporation (IRS Employer
or organization) Identification No.)
ONE FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
(Address of principal executive office) (Zip Code)
(617) 292-2000
Registrant's telephone number, including area code
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for each shorter period that the Registrant was
required to file reports), and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
----------------- ---------------
The number of shares of common stock of the Registrant outstanding as of July
31, 1996 was 262,518,541.
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<PAGE>
FLEET FINANCIAL GROUP, INC.
FORM 10-Q FOR QUARTER ENDED JUNE 30, 1996
TABLE OF CONTENTS OF INFORMATION REQUIRED IN REPORT
PAGE
----
PART I. ITEM 1. FINANCIAL INFORMATION
Consolidated Statements of Income
Three Months Ended June 30, 1996 and 1995 3
Six Months Ended June 30, 1996 and 1995 4
Consolidated Balance Sheets
June 30, 1996 and December 31, 1995 5
Consolidated Statements of Changes in Stockholders' Equity
Six Months Ended June 30, 1996 and 1995 6
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1996 and 1995 7
Condensed Notes to Consolidated Financial Statements 8
PART I. ITEM 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II. 27
SIGNATURES 30
EXHIBITS 31
<PAGE>
FLEET FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE><CAPTION>
- -------------------------------------------------------------------------------------
For the three months ended June 30
Dollars in millions, except share data 1996 1995
- -------------------------------------------------------------------------------------
<S> <C> <C>
Interest and fees on loans and leases $1,283 $1,197
Interest on taxable securities 185 330
Interest on tax-exempt securities 9 12
- -------------------------------------------------------------------------------------
Total interest income 1,477 1,539
- -------------------------------------------------------------------------------------
Interest expense:
Deposits 429 432
Short-term borrowings 89 222
Long-term debt 104 121
- -------------------------------------------------------------------------------------
Total interest expense 622 775
- -------------------------------------------------------------------------------------
Net interest income 855 764
- -------------------------------------------------------------------------------------
Provision for credit losses 48 28
- -------------------------------------------------------------------------------------
Net interest income after provision for credit 807 736
losses
- -------------------------------------------------------------------------------------
Noninterest income:
Service charges, fees, and commissions 146 124
Mortgage banking 133 140
Investment services revenue 93 78
Student loan servicing fees 22 15
Securities available for sale gains 20 4
Gain from branch divestitures 32 ---
Other 103 115
- -------------------------------------------------------------------------------------
Total noninterest income 549 476
- -------------------------------------------------------------------------------------
Noninterest expense:
Employee compensation and benefits 411 365
Occupancy 75 61
Equipment 68 51
Mortgage servicing rights amortization 48 46
Legal and other professional 35 21
Intangible asset amortization 30 26
Marketing 24 22
Telephone 23 16
Printing and mailing 17 14
FDIC assessment 2 29
Merger-related charges --- 14
Other 152 132
- -------------------------------------------------------------------------------------
Total noninterest expense 885 797
- -------------------------------------------------------------------------------------
Income before income taxes 471 415
Applicable income taxes 193 161
- -------------------------------------------------------------------------------------
Net income $ 278 $ 254
- -------------------------------------------------------------------------------------
Net income applicable to common shares $ 258 $ 244
- -------------------------------------------------------------------------------------
Fully diluted weighted average common shares 269,463,179 268,924,178
outstanding $ 0.96 $ 0.91
Fully diluted earnings per share 0.43 0.40
Dividends declared
- -------------------------------------------------------------------------------------
See accompanying Condensed Notes to Consolidated Financial Statements.
</TABLE>
3
<PAGE>
FLEET FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
For the six months ended June 30
Dollars in millions, except share data 1996 1995
- -------------------------------------------------------------------------------------
<S> <C> <C>
Interest and fees on loans and leases $2,427 $2,300
Interest on taxable securities 369 663
Interest on tax-exempt securities 18 23
- -------------------------------------------------------------------------------------
Total interest income 2,814 2,986
- -------------------------------------------------------------------------------------
Interest expense:
Deposits 831 822
Short-term borrowings 196 408
Long-term debt 208 236
- -------------------------------------------------------------------------------------
Total interest expense 1,235 1,466
- -------------------------------------------------------------------------------------
Net interest income 1,579 1,520
- -------------------------------------------------------------------------------------
Provision for credit losses 84 48
- -------------------------------------------------------------------------------------
Net interest income after provision for credit losses 1,495 1,472
- -------------------------------------------------------------------------------------
Noninterest income:
Service charges, fees, and commissions 265 247
Mortgage banking 257 243
Investment services revenue 181 157
Student loan servicing fees 44 30
Securities available for sale gains 38 5
Gain from branch divestitures 92 ---
Other 192 198
- -------------------------------------------------------------------------------------
Total noninterest income 1,069 880
- -------------------------------------------------------------------------------------
Noninterest expense:
Employee compensation and benefits 758 726
Occupancy 136 124
Equipment 125 101
Mortgage servicing rights amortization 89 70
Legal and other professional 58 40
Intangible asset amortization 56 48
Marketing 45 42
Telephone 39 31
Printing and mailing 34 28
FDIC assessment 4 58
Merger-related charges --- 50
Other 299 245
- -------------------------------------------------------------------------------------
Total noninterest expense 1,643 1,563
- -------------------------------------------------------------------------------------
Income before income taxes 921 789
Applicable income taxes 379 309
- -------------------------------------------------------------------------------------
Net income $ 542 $ 480
- -------------------------------------------------------------------------------------
Net income applicable to common shares $ 510 $ 462
- -------------------------------------------------------------------------------------
Fully diluted weighted average common shares 269,275,176 266,757,158
outstanding $ 1.89 $ 1.73
Fully diluted earnings per share 0.86 0.80
Dividends declared
- -------------------------------------------------------------------------------------
</TABLE>
See accompanying Condensed Notes to Consolidated Financial Statements.
4
<PAGE>
FLEET FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
June 30, December 31,
Dollars in millions, except share data 1996 1995
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash, due from banks and interest-bearing deposits $ 7,048 $ 4,566
Securities available for sale 10,452 18,533
Securities held to maturity (market value: $950 and $782) 963 798
Loans and leases 59,093 51,525
Reserve for credit losses (1,597) (1,321)
- ---------------------------------------------------------------------------------------------------
Net loans and leases 57,496 50,204
- ---------------------------------------------------------------------------------------------------
Mortgages held for resale 1,860 2,005
Intangible assets 1,773 1,116
Mortgage servicing rights 1,543 1,276
Premises and equipment 1,295 991
Other assets 5,298 4,943
- ---------------------------------------------------------------------------------------------------
Total assets $87,728 $84,432
- ---------------------------------------------------------------------------------------------------
LIABILITIES
Deposits:
Demand $17,527 $12,305
Regular savings, NOW, money market 28,801 22,835
Time 21,817 21,982
- ---------------------------------------------------------------------------------------------------
Total deposits 68,145 57,122
- ---------------------------------------------------------------------------------------------------
Federal funds purchased and securities sold under agreements 2,756 7,425
to repurchase
Other short-term borrowings 1,881 5,144
Accrued expenses and other liabilities 2,516 1,895
Long-term debt 5,303 6,481
- ---------------------------------------------------------------------------------------------------
Total liabilities 80,601 78,067
- ---------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock 1,003 399
Common stock (shares issued: 263,401,007 in 1996 and
262,864,257 in 1995; shares outstanding: 263,401,007
in 1996 and 262,721,926 in 1995) 3 3
Common surplus 3,142 3,149
Retained earnings 3,023 2,768
Net unrealized gain (loss) on securities (44) 52
Less: Treasury stock, at cost, 142,331 shares in 1995 --- (6)
- ---------------------------------------------------------------------------------------------------
Total stockholders' equity 7,127 6,365
- ---------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $87,728 $84,432
- ---------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Condensed Notes to Consolidated Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
FLEET FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
------------------------------------------------------------------------------------------------------------
Common Net
Stock Unrealized
Six months ended June 30 Preferred $.01(a) Common Retained Gain(Loss) Treasury
Dollars in millions, except share data Stock Par SurplusEarnings on Securities Stock Total
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1995
- ------
Balance at December 31, 1994 $557 $244 $2,612 $2,719 $(411) $(250) $5,471
Net income 480 480
Cash dividends declared on common stock
($0.80 per share) (113) (113)
Cash dividends declared on preferred stock (5) (5)
Cash dividends declared by pooled company
prior to merger (68) (68)
Issuance of preferred stock 125 125
Common stock issued in connection with:
Employee benefit plans 47 (4) 27 70
Acquisition of Northeast Federal Corp 6 187 193
Treasury stock issued in connection with
the acquisition of NBB Bancorp, Inc. (17) (21) 234 196
Adjustment of valuation reserve for
securities available for sale 447 447
Treasury stock purchased (106) (106)
Other, net (3) 5 (54) (6) (58)
- --------------------------------------------------------------------------------------------------------------
Balance at June 30, 1995 $682 $250 $2,826 $2,993 $ (18) $(101) $6,632
- --------------------------------------------------------------------------------------------------------------
1996
- ----
Balance at December 31, 1995 $399 $ 3 $3,149 $2,768 $ 52 $ (6) $6,365
Net income 542 542
Cash dividends declared on common stock
($0.86 per share) (226) (226)
Cash dividends declared on preferred stock (32) (32)
Issuance of preferred stock, net of
issuance cost 600 (15) 585
Common stock issued in connection with:
Employee benefit plans 36 (21) 16 31
Warrants 15 15
Adjustment of valuation reserve for
securities available for sale (96) (96)
Other, net 4 (43) (8) (10) (57)
- --------------------------------------------------------------------------------------------------------------
Balance at June 30, 1996 $1,003 $ 3 $3,142 $3,023 $(44) $ --- $7,127
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(a) During the fourth quarter of 1995, the corporation changed the par value of
its common stock from $1 per share to $.01 per share.
See accompanying Condensed Notes to Consolidated Financial Statements.
6
<PAGE>
FLEET FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Six months ended June 30
Dollars in millions 1996 1995
- --------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 542 $ 480
Adjustments for noncash items:
Depreciation and amortization of premises and equipment 90 81
Amortization of mortgage servicing rights and other
intangible assets 145 118
Provision for credit losses 84 48
Deferred income tax expense 122 80
Securities gains (38) (5)
Gain from branch divestitures (92) ---
Merger-related charges --- 50
Originations and purchases of mortgages held for resale (10,367) (3,714)
Proceeds from sales of mortgages held for resale 11,332 2,789
(Increase) decrease in trading account assets (58) 32
(Increase) decrease in accrued receivables, net (127) 9
Increase (decrease) in accrued liabilities, net 7 (438)
Other, net 1,081 215
- --------------------------------------------------------------------------------------
Net cash provided (used) by operating activities 2,721 (255)
- --------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities available for sale (4,960) (7,500)
Proceeds from sales of securities available for sale 13,037 8,861
Proceeds from maturities of securities available for sale 3,597 695
Purchases of securities held to maturity (622) (415)
Proceeds from maturities of securities held to maturity 504 1,027
Loans made to customers, nonbanking subsidiaries (773) (519)
Principal collected on loans made to customers,
nonbanking subsidiaries 497 415
Net cash and cash equivalents received (paid) for
businesses acquired 2,386 (2,816)
Loans purchased from third parties (268) (272)
Proceeds from sales of loans 307 117
Divestiture of loans 1,773 ---
Net (increase) decrease in loans and leases, banking
subsidiaries 1,826 (1,541)
Acquisition of minority interest in subsidiary --- (158)
Purchases of premises and equipment (62) (79)
Purchases of mortgage servicing rights (146) (262)
- --------------------------------------------------------------------------------------
Net cash provided (used) by investing activities 17,096 (2,447)
- --------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in deposits (5,066) (4,662)
Divestiture of deposits (2,349) ---
Net increase (decrease) in short-term borrowings (9,094) 3,292
Proceeds from issuance of long-term debt 446 1,909
Repayments of long-term debt (1,669) (1,158)
Proceeds from the issuance of common stock 46 70
Proceeds from the issuance of preferred stock 585 125
Cash dividends paid (234) (181)
- --------------------------------------------------------------------------------------
Net cash used by financing activities (17,335) (605)
- --------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 2,482 (3,307)
- --------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of the period 4,566 8,570
- --------------------------------------------------------------------------------------
Cash and cash equivalents at end of the period $ 7,048 $ 5,263
- --------------------------------------------------------------------------------------
</TABLE>
See accompanying Condensed Notes to Consolidated Financial Statements
7
<PAGE>
FLEET FINANCIAL GROUP, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
NOTE 1. FINANCIAL STATEMENTS
The unaudited consolidated financial information included herein has been
prepared in conformity with the accounting principles and practices in Fleet
Financial Group, Inc.'s ("Fleet", "FFG", or "corporation") consolidated
financial statements included in the Annual Report on Form 10-K filed with the
Securities and Exchange Commission ("SEC") for the year ended December 31,
1995. The accompanying interim consolidated financial statements contained
herein are unaudited. However, in the opinion of the corporation, all
adjustments consisting of normal recurring items necessary for a fair statement
of the operating results for the periods shown have been made. The results of
operations for the six months ended June 30, 1996 may not be indicative of
operating results for the year ending December 31, 1996. Certain prior period
amounts have been reclassified to conform to current classifications.
NOTE 2. ACQUISITIONS
On May 1, 1996, the corporation purchased from National Westminster Plc,
the three main operating subsidiaries of NatWest Bancorp; NatWest Bank, N.A.,
NatWest (Delaware), and NatWest Services, Inc. These three operating entities
comprised NatWest Bank, National Association ("NatWest Bank"). The agreement
also specified that certain assets and liabilities of NatWest Bank be retained
by NatWest Bancorp. NatWest Bank continues its existence under the name Fleet
Bank, National Association ("Fleet Bank, N.A."). In accordance with the NatWest
Merger Agreement, Fleet may pay a purchase price of up to $3.26 billion
consisting of an immediate payment of $2.7 billion and an earnout payment (the
"Earnout") of up to $560 million over the next eight years. The Earnout will be
based on the level of earnings of Fleet Bank, N.A. during such period. The
acquisition of NatWest Bank contributed approximately $12.9 billion and $17.5
billion of loans and deposits, respectively, and was accounted for using the
purchase method of accounting. Goodwill of approximately $660 million was
recorded in connection with this transaction and is being amortized on a
straight-line basis over 15 years.
In connection with the NatWest acquisition, Fleet substantially
restructured its balance sheet to replace lower-yielding assets, primarily
securities, with higher-earning assets, primarily loans, acquired from NatWest
and replaced higher-cost purchased funding with lower-cost core deposits
acquired from NatWest. The acquisition of NatWest added approximately 300
branches in New York and New Jersey.
As previously disclosed in Form 10-K filed with the Securities and Exchange
Commission for the year ended December 31, 1995, the merger of Shawmut National
Corporation (the "Shawmut Merger") with and into Fleet was completed on November
30, 1995, and was accounted for as a pooling of interests. The financial
information for all prior periods presented has been restated to present the
combined financial condition and results of operations of both companies as if
the Shawmut Merger had been in effect for all periods presented.
The corporation completed the purchases of NBB Bancorp, Inc. ("NBB"), the
Business Finance Division of Barclays Business Credit, Inc. ("Barclays"), Plaza
Home Mortgage Corporation ("Plaza"), and the repurchase of the 19% publicly-held
shares of Fleet Mortgage Group, Inc., ("FMG") during the first quarter of 1995,
and Northeast Federal Corp. ("Northeast") in June 1995. All of these
transactions were accounted for under the purchase method of accounting.
The information below presents, on a pro forma basis, certain historical
financial information for the corporation, adjusted for each of the NatWest,
NBB, Barclays, Plaza, FMG and Northeast transactions as if such transactions had
been consummated on January 1, 1995.
8
<PAGE>
FLEET FINANCIAL GROUP, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
PRO FORMA RESULTS
- ------------------------------------------------------
Six months ended June 30, 1996
(Dollars in millions,
except per share data) 1996(a) 1995
- ------------------------------------------------------
PRO FORMA-FLEET, NATWEST, NBB,
BARCLAYS, PLAZA, FMG AND NORTHEAST
Net income $484 $567
Net income applicable to common
stockholders 445 527
Net income per common share 1.65 1.95
- ------------------------------------------------------
CORPORATION AS REPORTED
Net income $ 542 $ 480
Net income applicable to common
stockholders 510 462
Net income per common share 1.89 1.73
- ------------------------------------------------------
(a) Includes $119 million (after-tax) of special charges recorded by NatWest
prior to the consummation of the NatWest acquisition.
NOTE 3. SALE OF FLEET FINANCE
On July 1, the corporation announced that it had entered into a definitive
agreement with Associates First Capital Corporation to sell certain assets of
Fleet Finance, the corporation's consumer finance subsidiary. On July 31, the
corporation completed the sale of certain assets, including a loan portfolio of
approximately $1.2 billion. The corporation does not anticipate realizing any
further losses on this transaction.
NOTE 4. PREFERRED STOCK
On April 1, the corporation issued $175 million of fixed/adjustable rate
preferred stock with an initial rate of 6.60% for the first ten years, after
which the rate will adjust based on a U.S. Treasury securities rate. The
corporation used the proceeds from this transaction for the purchase of NatWest.
On July 31, the corporation redeemed all of its Series III 10.12% Perpetual
Preferred Stock. The stock was redeemed at $26.265 per share resulting in a
premium of $2.6 million which will result in a decrease to retained earnings and
an approximate $.01 reduction in earnings per share for the third quarter.
On August 1, the corporation completed a $50 million fixed/adjustable rate
preferred stock offering. The preferred stock has an initial rate of 6.59% for
the first five years, after which the rate will adjust based on a U.S. Treasury
securities rate. This issue will settle on September 27, 1996. The corporation
will use the proceeds to replace the Series III preferred stock.
NOTE 5. LONG-TERM DEBT
During the second quarter, the corporation issued $300 million of 7.125%
subordinated notes and $100 million of medium-term notes with interest rates
ranging from 7.30% to 7.75%. The corporation simultaneously entered into
interest-rate swap agreements which effectively converted the $400 million of
notes into floating rate notes with initial current rates between 5.65% and
5.85%. The corporation used the proceeds from this transaction for the purchase
of NatWest.
NOTE 6. SUPPLEMENTAL DISCLOSURE FOR STATEMENTS OF CASH FLOWS
CASH-FLOW DISCLOSURE
- -----------------------------------------------------
Six months ended June 30
Dollars in millions 1996 1995
- -----------------------------------------------------
Supplemental disclosure for cash paid
during the period for:
Interest expense $1,179 $1,403
Income taxes, net of
refunds 164 236
- -----------------------------------------------------
- -----------------------------------------------------
Supplemental disclosure of noncash
investing and financial activities:
Transfer of loans to foreclosed
property and repossessed
equipment 12 47
Securitization of
residential loans 1,998 ---
Adjustment to unrealized
gain/(loss) on securities (96) 393
available for sale
Retirement of common stock 34 ---
- -----------------------------------------------------
- -----------------------------------------------------
Assets acquired and liabilities
assumed in business combinations
were as follows:
Assets acquired, net of
cash and cash equivalents
received/(paid) 17,848 8,920
Net cash and cash equivalents
received/(paid) 2,386 (2,816)
Liabilities assumed 20,234 5,715
Common stock issued --- 193
Treasury stock reissued --- 196
- -----------------------------------------------------
9
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERALL PERSPECTIVE
- -----------------------------------------------------------------------
Three months Six months
Dollars in millions, ended June 30 ended June 30
except per share data 1996 1995 1996 1995
- -----------------------------------------------------------------------
EARNINGS
Net income $ 278 $ 254 $ 542 $ 480
Net interest income
(FTE)(a) 863 778 1,595 1,546
- -----------------------------------------------------------------------
PER COMMON SHARE
Fully diluted 0.96 0.91 1.89 1.73
earnings
Cash dividends
declared 0.43 0.40 0.86 0.80
Book value 23.25 23.96 23.25 23.96
- -----------------------------------------------------------------------
OPERATING RATIOS
Return on average
assets 1.32 % 1.22 % 1.36 % 1.18 %
Return on common
equity 17.20 16.79 17.09 16.47
Efficiency ratio 62.7 62.6 61.7 62.3
Equity to assets
(period-end) 8.12 7.61 8.12 7.61
- -----------------------------------------------------------------------
AT JUNE 30
Total assets $87,728 $87,168 $87,728 $87,168
Stockholders' equity 7,127 6,632 7,127 6,632
Nonperforming
assets(b) 745 773 745 773
- -----------------------------------------------------------------------
(a) Prepared on a fully taxable equivalent (FTE) basis. The FTE adjustment
included in net interest income was $8 million and $14 million for the
three months ended and $16 million and $26 million for the six months ended
June 30, 1996 and 1995, respectively.
(b) Nonperforming assets and related ratios at June 30, 1996 do not include $365
million of nonperforming assets classified as held for sale or accelerated
disposition.
Fleet reported net income of $278 million, or $0.96 per fully diluted
share, for the quarter ended June 30, 1996, compared to $254 million, or $0.91
per fully diluted share, in the second quarter of 1995, an increase of 9%. The
corporation's first half of 1996 net income was $542 million, or $1.89 per fully
diluted share, compared with $480 million, or $1.73 per fully diluted share, in
the first half of 1995, an increase of 13%. Return on average assets and return
on equity improved to 1.32% and 17.20%, respectively, for the second quarter of
1996, from 1.22% and 16.79%, respectively, for the second quarter of 1995. These
results reflect the impact of the corporation's acquisition of NatWest Bank,
National Association ("NatWest") subsequent to its consummation on May 1, 1996,
as well as cost reductions related to the Shawmut merger. Additionally, the
corporation recognized $32 million of branch divestitures gains, as well as $20
million of gains on sales of securities, during the quarter ended June 30, 1996.
INCOME STATEMENT ANALYSIS
The results for the second quarter of 1996 include the effect of NatWest
for the period subsequent to the May 1, 1996 acquisition date.
NET INTEREST INCOME
- --------------------------------------------------------------------
Three months Six months
FTE Basis ended June 30 ended June 30
Dollars in millions 1996 1995 1996 1995
- --------------------------------------------------------------------
Interest income $1,477 $1,539 $2,814 $2,986
Tax-equivalent adjustment 8 14 16 26
Interest expense 622 775 1,235 1,466
- --------------------------------------------------------------------
Net interest income $ 863 $ 778 $1,595 $1,546
- --------------------------------------------------------------------
Net interest income on a fully taxable equivalent basis totaled $863
million for the quarter ended June 30, 1996, compared to $778 million for the
same period in 1995. The $85 million increase was principally related to the
NatWest acquisition. This increase was partially offset by decreased net
interest income related to the divestitures of core deposits and loans as a
result of the Shawmut merger.
NET INTEREST MARGIN AND INTEREST-RATE SPREAD
- -------------------------------------------------------------------------
Three months ended June 30 1996 1995
- -------------------------------------------------------------------------
Taxable equivalent rates Average Average
Dollars in millions Balance Rate Balance Rate
- -------------------------------------------------------------------------
Money market instruments $ 1,428 5.12 % $ 1,093 6.32 %
Securities 11,481 6.32 21,517 6.22
Loans and leases 55,935 8.58 51,052 9.21
Mortgages held for sale 2,190 7.79 1,086 8.85
Other 1,814 10.97 104 ---
- -------------------------------------------------------------------------
Total interest-earning assets 72,848 8.18 74,852 8.29
- -------------------------------------------------------------------------
Deposits 47,414 3.65 42,905 4.04
Short-term borrowings 6,941 5.10 15,045 5.90
Long-term debt 5,871 7.10 6,682 7.29
- -------------------------------------------------------------------------
Interest-bearing liabilities 60,226 4.15 64,632 4.81
- -------------------------------------------------------------------------
Interest-rate spread 4.03 3.48
Interest-free sources of funds 12,622 10,220
- -------------------------------------------------------------------------
Total sources of funds $72,848 3.42 % $74,852 4.14 %
- -------------------------------------------------------------------------
Net interest margin 4.76 % 4.15 %
- -------------------------------------------------------------------------
The net interest margin for the second quarter of 1996 increased 61 basis
points to 4.76% from the second quarter of 1995. The increase in net interest
margin is primarily attributable to a more favorable mix of interest-earning
assets and interest-bearing liabilities as a result of the $10.0 billion
decrease in lower yielding average securities and the resultant $8.1 billion
decrease in higher-cost average short-term borrowings. The securities and
short-term borrowings were replaced by more favorable yielding loans and
10
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
core deposits from NatWest. The corporation expects the net interest margin to
increase during the third quarter of 1996 compared to the second quarter of 1996
reflecting a full quarter's impact of the NatWest acquisition.
SECURITIES PORTFOLIO
- --------------------------------------------------------------------
June 30, Dec. 31, June 30,
Dollars in millions 1996 1995 1995
- --------------------------------------------------------------------
Carrying value $11,415 $19,331 $20,644
Average maturity(a) 2.9 years 1.3 years 1.5 years
Yield(b) 6.67% 6.10% 6.35%
- --------------------------------------------------------------------
(a) Average maturity relates to debt securities only and is calculated using
repricing dates rather than contract maturities.
(b) Relates to debt securities only.
The average balance of securities decreased from $21.5 billion, or 29% of
average interest earning assets, for the second quarter of 1995 to $11.5
billion, or 16% of average interest earning assets, for the same period of 1996.
This $10.0 billion decrease reflects the corporation's balance sheet
restructuring program in connection with the NatWest acquisition.
Average loans and leases increased $4.9 billion to $55.9 billion for the
second quarter of 1996, when compared with the second quarter of 1995, due to
the NatWest acquisition, as well as loan growth during the second half of 1995.
Offsetting these items were the divestiture of $1.8 billion of loans in the
first quarter of 1996, the securitization of $1.7 billion of average residential
real estate loans during the first six months of 1996, as well as the
reclassification of $1.7 billion of loans, primarily consumer loans, to assets
held for sale or accelerated disposition during the fourth quarter of 1995. The
decrease in the yield on loans and leases from 9.21% for the second quarter of
1995 to 8.58% for the second quarter of 1996 corresponds to the approximately 75
basis point decline in the average prime rate from the second quarter of 1995
compared to the same period in 1996.
Average interest bearing deposits increased $4.5 billion to $47.4 billion
for the second quarter of 1996 due to the NatWest acquisition which contributed
$8.6 billion in average interest bearing deposits. This increase was partially
offset by several factors, including: the divestiture of $2.4 billion of
deposits in connection with the Shawmut Merger; proceeds generated from
securities sold as part of the balance sheet restructuring program which were
used to reduce higher-cost wholesale time deposits; and deposit runoff that was
anticipated as a result of acquisitions completed during 1995. The net interest
rate paid on average deposits decreased to 3.65% for the second quarter of 1996
compared to 4.04% for the same period of 1995. The decrease in cost of deposits
reflects the NatWest acquisition which increased the level of lower cost core
deposits and an overall decline in interest rates for the first six months of
1996 in comparison to the same period in 1995.
The $8.1 billion decrease in average short-term borrowings is attributable
to the use of proceeds from the sales of securities to paydown short-term
borrowings and the acquisition of NatWest which enabled the corporation to
replace short-term borrowings with low-cost core deposits.
The contribution to the net interest margin of interest-free sources of
funds during the second quarter of 1996 was 73 basis points compared to 67 basis
points for the second quarter of 1995. This increase is primarily due to the
increase in demand deposits acquired from NatWest, which resulted in a higher
percentage of interest-free sources of funds as a percentage of total sources of
funds.
NONINTEREST INCOME
- --------------------------------------------------------------------
Three months Six months
ended June 30 ended June 30
Dollars in millions 1996 1995 1996 1995
- --------------------------------------------------------------------
Service charges, fees and
commissions $146 $124 $ 265 $247
Mortgage banking revenue 133 140 257 243
Investment services revenue 93 78 181 157
Venture capital revenue 26 6 53 14
Student loan servicing fees 22 15 44 30
Brokerage fees and
commissions 6 5 12 10
Trading revenue 5 5 7 11
Insurance 4 4 8 7
Securities available for sale
gains 20 4 38 5
Gain from branch divestitures 32 --- 92 ---
Other noninterest income 62 95 112 156
- --------------------------------------------------------------------
Total noninterest income $549 $476 $1,069 $880
- --------------------------------------------------------------------
Noninterest income for the second quarter and the first six months of 1996
totaled $549 million and $1,069 million, respectively, compared to $476 million
and $880 million for the same periods in 1995. The increase of $73 million over
the prior year quarter was due primarily to the NatWest merger, which
contributed $46 million of noninterest income, as well as increases in venture
capital revenue, student loan servicing fees, investment services revenue, gains
from branch divestitures, and securities gains.
11
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Excluding NatWest's contribution of $32 million, service charges, fees and
commissions decreased $10 million from the second quarter of 1995 due to the
regulatory required divestiture of $2.4 billion in deposits during the first
quarter. Investment services revenue increased $15 million, or 19%, from the
second quarter of 1995, due to continued strong sales of mutual funds and
annuity products and an increase in the overall value of assets managed.
MORTGAGE BANKING REVENUE
- ---------------------------------------------------------------------
Three months Six months
ended June 30 ended June 30
Dollars in millions 1996 1995 1996 1995
- ---------------------------------------------------------------------
Net loan servicing revenue $ 95 $ 87 $189 $165
Mortgage production revenue 38 25 64 26
Gains on sales of mortgage
servicing --- 28 4 52
- ---------------------------------------------------------------------
Total mortgage banking
revenue $133 $140 $257 $243
- ---------------------------------------------------------------------
Mortgage banking revenue of $133 million in the second quarter of 1996
decreased $7 million over the $140 million recorded in the same period of 1995.
Excluding the $28 million gain on sales of mortgage servicing recorded in the
second quarter of 1995, mortgage banking revenue increased $21 million,
reflecting a $13 million increase in mortgage production revenue coupled with a
9% increase in loan servicing revenue from $87 million in the second quarter of
1995 to $95 million in the second quarter of 1996. Mortgage production revenue,
which includes income derived from the loan origination process and net gains on
sales of mortgage loans, has been positively impacted by a more favorable
interest-rate environment in the first six months of 1996 when compared with the
same period of 1995. Loan servicing revenue represents fees received for
servicing residential mortgage loans. The 9% increase in loan servicing revenue
is attributable to the $7 billion increase in the corporation's servicing
portfolio from $111 billion at June 30, 1995 to $118 billion at June 30, 1996.
Venture capital revenue increased $20 million to $26 million for the
quarter ended June 30, 1996 when compared to the same quarter of 1995 as Fleet
Private Equity, the corporation's venture capital business, continued to
experience increases in the value of their equity capital investments. The
corporation's ability to continue to experience increases in the value of these
investments depends on a variety of factors, including the state of the economy
and equity markets. Thus, the likelihood of such gains in the future cannot be
predicted.
The $7 million increase in student loan servicing fees from 1995 to 1996 is
attributable to increased levels of servicing and originations over the prior
year period at AFSA Data Corp., the corporation's student loan servicing
subsidiary.
As a condition to the regulatory approval of the Shawmut Merger, the
corporation divested certain branches, loans and deposits. The corporation
realized $32 million of gains from these divestitures during the second quarter
and $92 million on a year to date basis. Through June 30, 1996, the corporation
has realized all branch divestiture gains related to the Shawmut merger.
Securities gains increased $16 million for the second quarter of 1996 over
the same period of 1995 as the corporation realized higher gains on sales of
marketable equity securities. The likelihood of profitability of any such sales
in the future cannot be predicted.
Other noninterest income decreased $33 million, due primarily to the $25
million gain on interest rate contracts used to manage prepayment risk at Fleet
Mortgage during the second quarter of 1995.
12
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NONINTEREST EXPENSE
- ---------------------------------------------------------------------
Three months Six months
ended June 30 ended June 30
Dollars in millions 1996 1995 1996 1995
- ---------------------------------------------------------------------
Employee compensation $411 $365 $ 758 $ 726
Occupancy 75 61 136 124
Equipment 68 51 125 101
Mortgage servicing rights
amortization 48 46 89 70
Legal and other professional 35 21 58 40
Intangible asset
amortization 30 26 56 48
Marketing 24 22 45 42
Telephone 23 16 39 31
Printing and mailing 17 14 34 28
Office supplies 17 14 31 25
Travel and entertainment 14 11 23 20
Credit card 9 5 16 9
OREO expense 3 3 6 8
FDIC assessment 2 29 4 58
Merger-related charges --- 14 --- 50
Other 109 99 223 183
- ---------------------------------------------------------------------
Total noninterest expense $885 $797 $1,643 $1,563
- ---------------------------------------------------------------------
Noninterest expense for the second quarter and the first six months of 1996
totaled $885 million and $1,643 million, respectively, compared to $797 million
and $1,563 million for the same periods of 1995. The increase of $88 million
over the prior year quarter was primarily due to the acquisition of NatWest,
which added $131 million of noninterest expense during the second quarter of
1996. Excluding NatWest, noninterest expense declined $43 million from the
second quarter of 1995. This decrease was primarily the result of ongoing
integration of the Shawmut merger and other smaller acquisitions completed
during 1995.
Excluding NatWest, employee compensation and benefits decreased $20
million, or 6%, as a result of ongoing successful integration of Shawmut.
Although the number of full-time employees increased to 35,250 at June 30, 1996
compared to 30,500 at June 30, 1995, the increase was primarily due to the
acquisition of NatWest, which accounted for 7,700 full-time equivalent employees
at June 30, 1996. Excluding NatWest, there was an approximate reduction of 3,000
full-time equivalent employees.
Equipment expense, excluding NatWest, increased $8 million from the prior
year's quarter primarily due to capital expenditures for technological upgrades
and improvements.
Mortgage servicing rights (MSR) amortization remained consistent
at $48 million for the second quarter of 1996 as compared to $46 million for the
same period of 1995. The level of amortization is relatively consistent with the
growth in the size of the servicing portfolio which was $118 billion at June 30,
1996 compared with $111 billion at June 30, 1995. At June 30, 1996, the carrying
value and fair value of the corporation's mortgage servicing rights were $1.5
billion and $1.9 billion, respectively.
Legal and other professional expense increased $12 million over the second
quarter of 1995, excluding NatWest, due to contract programming costs and merger
integration expenses as a result of the Shawmut merger and various strategic
initiatives. Intangible asset amortization increased to $30 million in the
second quarter of 1996 from $26 million in the second quarter of 1995 as a
result of the Northeast acquisition in June 1995 and the NatWest acquisition on
May 1, 1996. NatWest contributed $7 million of intangible asset amortization
during the second quarter of 1996. FDIC assessments decreased $27 million as the
assessment was virtually eliminated on all deposits except for thrift deposits
insured by the Savings Association Insurance Fund (SAIF).
During the first and second quarters of 1995, the corporation incurred
merger-related charges of $36 million and $14 million, respectively, relating to
the Shawmut Merger.
In connection with the NatWest acquisition, the corporation recorded a
restructuring liability of $250 million, which was included as a component of
goodwill recorded as part of the transaction. The following table
illustrates the separate components of this restructuring liability:
NATWEST RESTRUCTURING LIABILITY
- ---------------------------------------------------
Dollars in millions
- ---------------------------------------------------
Personnel $ 130
Facilities 42
Data processing 27
Other 51
- ---------------------------------------------------
Total $250
- ---------------------------------------------------
Personnel charges relate primarily to the costs of employee severance,
termination of certain employee benefit plans, and employee assistance for
separated employees. Facilities charges are the result of the consolidation of
back-office operations, and consist of lease-termination costs, writedowns of
owned properties, and other facilities-related costs. Data processing costs
consist primarily of the write-off of duplicate or incompatible systems
hardware and software. Other merger expenses consist primarily of
13
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
transaction-related costs, such as professional and other fees.
The following table presents a summary of activity with respect to the
corporation's merger-related charges pertaining to Shawmut and the NatWest
related restructuring liability for the six months ended June 30, 1996. The
merger accrual was established in the fourth quarter of 1995 in connection with
the Shawmut Merger.
MERGER ACCRUAL
- --------------------------------------------------------------
Six Months Ended
June 30, 1996
Dollars in millions Shawmut NatWest Total
- --------------------------------------------------------------
Balance at beginning of year $335 $--- $335
Restructuring liability --- 250 250
Cash outlays (92) (66) (158)
Non-cash writedowns (3) (48) (51)
- --------------------------------------------------------------
Balance at end of period $240 $136 $376
- --------------------------------------------------------------
The cash outlays made during the first half of 1996 relate primarily to
severance costs. The corporation's liquidity has not been significantly affected
by these cash outlays, and future cash outlays are not anticipated to
significantly impact the corporation's liquidity. During the first half of 1996,
$26 million of incremental costs have been incurred relating to the Shawmut
Merger and NatWest acquisition and have not been charged against the merger
accrual. It is anticipated that approximately $30 million of additional
incremental costs will be incurred in 1996. The corporation expects that the
remaining accrual balance of $376 million at June 30, 1996 will be sufficient to
absorb the remaining merger-related costs.
INCOME TAXES
For the second quarter of 1996, the corporation recognized income tax
expense of $193 million, an effective tax rate of 40.9%. Tax expense for the
same period of 1995 was $161 million, an effective tax rate of 38.8%. The
increase in the effective tax rate is attributable to a higher proportion of
income being realized in higher tax rate jurisdictions, principally as a result
of NatWest, and the nondeductibility of goodwill.
EARNINGS BY SUBSIDIARY
- ---------------------------------------------------------------------------
Three months Six months
ended June 30 ended June 30
Dollars in millions 1996 1995 1996 1995
- ---------------------------------------------------------------------------
BANKING GROUP
New England $175 $207 $393 $403
New York-Upstate 31 33 62 78
New York-Metro 29 --- 29 ---
- --------------------------------------------------------------------------
TOTAL BANKING GROUP 235 240 484 481
- --------------------------------------------------------------------------
FINANCIAL SERVICES
GROUP
Fleet Mortgage 12 30 30 46
Fleet Private Equity 14 2 29 6
Fleet Capital-Leasing 6 5 11 11
Fleet Capital 5 6 9 8
AFSA 4 2 7 3
Other Financial Services 4 4 7 7
- --------------------------------------------------------------------------
TOTAL FINANCIAL
SERVICES GROUP 45 49 93 81
- --------------------------------------------------------------------------
PARENT (2) (26) (35) (50)
- --------------------------------------------------------------------------
MERGER RELATED
CHARGES --- (9) --- (32)
- --------------------------------------------------------------------------
TOTAL $278 $254 $542 $480
- --------------------------------------------------------------------------
The Banking Group generated $235 million and $240 million of net income for
the second quarter of 1996 and 1995, respectively. The second quarter of 1996
includes the impact of the acquired NatWest franchise which was combined with
the corporation's existing downstate New York franchise to form the New
York-Metro Group. Excluding the impact of NatWest, the Banking Group's results
for the second quarter of 1996 were negatively impacted by lower revenues as a
result of deposit and loan divestitures related to the Shawmut merger, as well
as increased provision expense of $13 million. In addition, noninterest income
declined due to lower securities gains and FDIC loan administration fees as the
contract with the FDIC expired on December 31, 1995. Offsetting these negative
items were lower FDIC assessments of $27 million, branch divestiture gains of
$32 million, and other expense reductions, as the Banking Group generated cost
savings from the Shawmut merger integration efforts.
The Financial Services Group's net income decreased $4 million to $45
million for the quarter ended June 30, 1996 primarily due to the decrease at
Fleet Mortgage. Fleet Mortgage, the corporation's mortgage banking subsidiary,
contributed $12 million to the corporation's earnings for the second quarter of
1996, compared to $30 million in the second quarter of 1995. The second quarter
of 1995 included a $25 million gain on interest rate contracts used to manage
prepayment risk of mortgage servicing assets and the
14
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
second quarter of 1996 reflected a $6 million increase in operating expenses
over the prior year period
Fleet Private Equity, the corporation's venture capital business, reported
net income of $14 million for the second quarter of 1996 compared to $2 million
for the second quarter of 1995. Results for the second quarter of 1996 included
$26 million of gains on equity capital investments compared to $6 million for
the same period in 1995.
AFSA Data Corporation contributed net income of $4 million for the second
quarter of 1996, doubling the $2 million recorded in the same period in 1995.
This increase reflects the additional volume of loans serviced as a result of
the extension of the corporation's direct loan servicing contracts with the
government.
LINES OF BUSINESS
The financial performance of the corporation is monitored by an internal
profitability measurement system, which provides line of business results and
key performance measures. The corporation is managed along the following
business lines: Financial Services and National Consumer, Commercial Financial
Services, Consumer Banking, Investment Services, Treasury, New York Metro, and
All Other Banking.
Management accounting policies are in place for assigning expenses that are
not directly incurred by businesses, such as overhead, operations and technology
expense. Additionally, equity, loan loss provision and loan loss reserves are
assigned on an economic basis. The corporation has developed a risk-adjusted
methodology that quantifies risk types (i.e. credit , operating, market,
fiduciary, etc.) within business units and assigns capital accordingly. Within
each unit, assets and liabilities are match-funded utilizing similar maturity,
liquidity, and repricing information. Management accounting concepts are
periodically refined and results may be restated from time to time to reflect
methodological enhancements and/or management organization changes. Results by
line of business for the first and second quarter of 1996 are presented below.
SELECTED FINANCIAL HIGHLIGHTS BY LINES OF BUSINESS
<TABLE><CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Net Average
Dollars in millions Revenues(a) Income ROE ROA Assets
- ---------------------------------------------------------------------------------------------------------------------------------
2nd 1st 2nd 1st 2nd 1st 2nd 1st 2nd 1st
Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr.
1996 1996 1996 1996 1996 1996 1996 1996 1996 1996
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Financial Services and National
Consumer $ 230 $ 223 $ 28 $ 32 18.9 % 21.2 % 1.40 % 1.73 % $ 7,928 $ 7,313
Commercial Financial Services 237 247 51 53 14.6 15.8 0.82 0.82 24,841 25,935
Consumer Banking 473 486 64 64 17.6 17.8 1.79 1.74 14,366 14,891
Investment Services 109 110 19 20 47.2 48.0 4.70 4.87 1,635 1,629
Treasury 85 90 39 38 44.3 34.4 0.82 0.66 18,993 23,143
New York-Metro (b) 224 --- 29 --- 8.4 --- 0.72 --- 16,258 ---
All Other 54 95 48 57 NM NM NM NM 759 2,115
- ---------------------------------------------------------------------------------------------------------------------------------
Total $1,412 $1,251 $278 $264 17.2 % 17.0 % 1.32 % 1.41 % $84,780 $75,026
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------
Average
Loans
Dollars in millions and Leases
- ---------------------------------------------------
2nd 1st
Qtr. Qtr.
1996 1996
- ---------------------------------------------------
<S> <C> <C>
Financial Services and National
Consumer $ 1,019 $ 1,000
Commercial Financial Services 23,196 24,376
Consumer Banking 12,129 12,430
Investment Services 1,399 1,413
Treasury 7,853 10,141
New York-Metro 10,259 ---
All Other 80 137
- ---------------------------------------------------
Total $55,935 $49,497
- ---------------------------------------------------
</TABLE>
(a) Includes net interest income (calculated on an FTE basis)
and noninterest income.
(b) New York-Metro is a business unit formed in the second quarter of 1996
comprised of all financial services to retail and wholesale clients in
the Metropolitan area surrounding New York City.
15
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL SERVICES AND NATIONAL CONSUMER
Financial Services and National Consumer is comprised of Fleet's Government
Banking, Global Services, Mortgage Banking and Student Loan Services businesses.
Fleet is a recognized leader in national and regional government banking
activities, providing deposit gathering activities, tax processing, cash
management and securities underwriting for local and state municipalities.
Global Services provides multiple products, encompassing corporate trust,
bankruptcy proceedings, and domestic and international transaction processing
to the insurance industry, mutual fund companies and commercial banking
customers.
Fleet's Mortgage Banking business originates, sells and services first and
second mortgage products spanning all customer segments. This business services
a mortgage portfolio of $118 billion and 1.5 million loans. Student loan
processing, through the AFSA Data Corporation subsidiary, services 4.0 million
accounts nationwide and is the largest third-party servicer in the U.S. with $18
billion in loans serviced.
Financial Services and National Consumer reported second quarter earnings
of $28 million and a return on equity of 18.9% as compared to net income of $32
million and an ROE of 21.2% in the prior quarter. Revenues increased $7 million
quarter to quarter due to growth in the mortgage servicing portfolio and
production revenue. This was offset by higher mortgage servicing rights
amortization expense. The decrease in quarterly net income is primarily due to
gains related to the sale of mortgage servicing rights reported in the first
quarter.
COMMERCIAL FINANCIAL SERVICES
Commercial Financial Services provides a full range of credit and banking
services to over 40,000 corporate, middle market, real estate and leasing
customers. In addition to traditional credit products, cash management, trade
services, corporate trust, foreign exchange, interest rate protection and
investment products are provided to Fleet's commercial customers. The client
base is strongly rooted in the Northeast, where it holds the leading positions
in most core markets. Additionally, the Commercial Financial Services unit has
several speciality businesses with national scope. The diversified commercial
and industrial loan portfolio at Fleet is the fourth largest in the nation.
Also, Fleet is the nation's sixth largest middle market lender. Fleet
Capital-Leasing, Fleet's leasing subsidiary, is one of the nation's top five
bank lessors in domestic equipment leasing. In addition, Fleet Capital is a
leading national asset based lending company.
The recently formed Corporate Finance group provides full-service financial
solutions to wholesale customers. Offering a broad array of products, this group
provides capital markets financing, mergers and acquisition advisory services,
private placements, securitized debt, loan syndications and balance sheet
restructuring.
Commercial Financial Services contributed $51 million of earnings in the
second quarter of 1996, as compared to $53 million in the first quarter. The
slight decline in earnings from the prior quarter was primarily driven by the
transfer of Fleet's metropolitan New York commercial banking franchise to the
newly formed New York-Metro business unit in the second quarter.
CONSUMER BANKING
Consumer Banking includes Retail Banking, Small Business Banking and Direct
Financial Services. Retail Banking offers consumers products and services to
conveniently access, move and manage their money. Small Business Banking
provides a full range of accounts and services aimed at businesses with sales of
up to $5 million. Direct Financial Services encompasses credit card lending and
alternate delivery vehicles including ATMs, the telephone answer center, and
Fleet's Internet web site.
Consumer Banking financial results for the second quarter of 1996 were $64
million, equal to the prior quarter's earnings. Second quarter results reflect
reduced expense levels driven by Shawmut merger integration efforts including
branch consolidations. These expense reductions offset the impact of lower
earnings due to branch divestitures completed in the first quarter.
INVESTMENT SERVICES
Investment Services is comprised of Personal Financial Services, Retirement
Plan Services, Fleet Brokerage Services, Retail Investment Services and Fleet
Investment Advisors. Personal Financial Services targets high net worth clients
and offers a broad array of asset management, estate settlement, deposit and
credit products. Retirement Plan Services focuses on investment management and
fiduciary activities with special emphasis on 401K plans. Fleet Brokerage
Service is one of the nation's largest bank-owned discount brokerage firms.
Retail Investment Services
16
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
manages Fleet's mutual fund product set, including the Galaxy Funds and
annuities sold to consumers. Fleet Investment Advisors manages in excess of $46
billion of assets supporting the investment service business.
Investment Services reported net income of $19 million and an ROE of 47% in
the second quarter of 1996, compared to $20 million and 48% in the first
quarter.
TREASURY
Treasury is responsible for managing the corporation's securities and
residential mortgage portfolios, trading operations, asset/liability management
function and wholesale funding needs of the corporation.
The Treasury unit earned $39 million in the second quarter as compared to
$38 million in the prior quarter. Second quarter earnings include securities
gains of $12 million compared to $10 million in the first quarter. Excluding
securities gains, net income declined primarily due to the impact of reductions
in the unit's earning assets resulting from the corporation's balance sheet
downsizing program and branch divestitures completed in the first quarter.
NEW YORK-METRO
New York-Metro is a business unit formed in the second quarter of 1996
comprised of all financial services to retail and wholesale clients in the
metropolitan area surrounding New York City. Fleet offices located in Long
Island, New York City and Westchester combined with acquired business from
NatWest Bank, N.A. make Fleet the third-ranked banking institution in New York
and fourth-ranked in New Jersey.
The acquisition of NatWest Bank, N.A. on May 1, 1996 added approximately
$13 billion of loans and $17 billion of deposits, 300 branches in the New York
and New Jersey market, and enhancement of product capabilities to consumer,
commercial, and government banking customers.
New York-Metro's net income in the second quarter was $29 million
reflecting financial results of the acquired NatWest operation as well as
Fleet's existing metropolitan New York franchise for the two months since
acquisition. Prior period results for Fleet's existing business in the
metropolitan New York market are reported as part of the appropriate business
unit.
ALL OTHER
All Other includes the parent company, Fleet Equity Partners, and certain
transactions not allocable to any specific business activity. In addition, the
impact of methodology allocations such as loan loss provision, credit reserve
and equity, and the unit which offsets transfer pricing is reported in this
unit. All Other earned $48 million the second quarter of 1996 compared to $57
million in the first quarter. This unit's earnings include branch divestiture
gains of $19 million in the second quarter and $24 million in the first quarter.
Fleet Equity Partners represents the corporation's venture capital
business, which earned $14 million in the second quarter as compared to $15
million earned in the prior quarter. Strong quarterly earnings resulted from
rising values in this units' equity investments. The corporation's ability to
continue to experience increases in the value of these investments depends on
a variety of factors, including the state of both the economy and equity
markets. Thus, the likelihood of such gains in the future cannot be predicted.
17
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BALANCE SHEET ANALYSIS
Total assets increased from $84.4 billion at December 31, 1995 to $87.7
billion at June 30, 1996, primarily due to the NatWest acquisition offset by the
aforementioned balance sheet restructuring. The balance sheet restructuring,
implemented in anticipation of the NatWest acquisition, reduced securities as
well as wholesale time deposits and short-term debt. Additionally, the
divestitures of both deposits and loans also contracted the balance sheet. The
corporation acquired approximately $12.9 billion of loans and $17.5 billion of
deposits in connection with the NatWest transaction.
SECURITIES
<TABLE><CAPTION>
- -------------------------------------------------------------------------------------------------------
June 30, 1996 March 31, 1996 December 31, 1995
------------- -------------- -----------------
Amortized Market Amortized Market Amortized Market
Dollars in millions Cost Value Cost Value Cost Value
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Securities available for sale:
US Treasury and government
agencies $ 1,853 $ 1,823 $ 1,723 $ 1,704 $ 7,891 $ 7,889
Mortgage-backed securities 8,150 8,100 7,011 7,005 8,457 8,470
Other debt securities --- --- --- --- 1,621 1,662
- -------------------------------------------------------------------------------------------------------
Total debt securities 10,003 9,923 8,734 8,709 17,969 18,021
- -------------------------------------------------------------------------------------------------------
Marketable equity securities 341 348 359 389 359 393
Other securities 181 181 145 145 119 119
- -----------------------------------------------------------------------------------------------------
Total securities
available for sale $10,525 $10,452 $ 9,238 $ 9,243 $18,447 $18,533
- -------------------------------------------------------------------------------------------------------
Securities held to maturity:
State and municipal $ 842 $ 847 $ 736 $ 741 $ 687 $ 695
Other debt securities 121 103 112 83 111 87
- -------------------------------------------------------------------------------------------------------
Total securities held to
maturity $ 963 $ 950 $ 848 $ 824 $ 798 $ 782
- -------------------------------------------------------------------------------------------------------
Total securities $11,488 $11,402 $10,086 $10,067 $19,245 $19,315
- -------------------------------------------------------------------------------------------------------
</TABLE>
The amortized cost of securities available for sale decreased from $18.4
billion at December 31, 1995 to $10.5 billion at June 30, 1996, as the
corporation executed its balance sheet restructuring program, primarily during
the first quarter of 1996, designed to sell lower-yielding securities and use
the proceeds to pay down higher-cost wholesale funds. During the first quarter
of 1996, the corporation sold approximately $5.8 billion of U.S. Agency
securities, $1.4 billion of mortgage-backed securities, and approximately $2.4
billion of other securities. The $1.1 billion increase in mortgage-backed
securities from March 31, 1996 to June 30, 1996 is attributable to the
securitization during the second quarter of $1.5 billion of residential real
estate loans.
The corporation recognized $18 million of gains during the first quarter as
a result of these transactions. During the second quarter of 1996, the
corporation realized approximately $20 million of securities gains, primarily on
sales of marketable equity securities.
The valuation reserve on securities available for sale declined to an
unrealized loss level of $73 million at June 30, 1996 from an unrealized gain
level of $86 million at December 31, 1995, due to unfavorable bond market
conditions in the first half of 1996 and gains realized on sales of securities
during the same period.
18
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LOANS AND LEASES
- --------------------------------------------------------------------
June 30, March 31, Dec. 31,
Dollars in millions 1996 1996 1995
- --------------------------------------------------------------------
Commercial and industrial $29,996 $21,931 $23,251
Lease financing 2,323 2,282 2,223
Commercial real estate:
Construction 907 645 606
Interim/permanent 5,486 4,007 4,414
Residential real estate 8,222 9,370 11,475
Consumer 12,159 9,324 9,556
- --------------------------------------------------------------------
Total loans and leases $59,093 $47,559 $51,525
- --------------------------------------------------------------------
Total loans and leases increased $7.6 billion from $51.5 billion at
December 31, 1995 to $59.1 billion at June 30, 1996, primarily due to the
NatWest acquisition which added $12.9 billion of loans and leases. The increase
related to NatWest was partially offset by the securitization of $2.0 billion of
residential real estate loans which have been reclassified to securities for
liquidity and collateral purposes, as well as the $1.8 billion of divestitures
as a result of the Shawmut Merger. In addition, the corporation experienced the
impact of several other programs designed to reduce industry and product
concentrations as a result of both the Shawmut and NatWest transactions, as well
as portfolio runoff.
Commercial and industrial (C&I) loans increased $6.7 billion from December
31, 1995 to June 30, 1996, due primarily to the NatWest addition of $8.1 billion
in C&I loans. The increase was partially offset by $450 million of divestitures
and several large paydowns during the first six months of 1996. Lease financing
increased $100 million from December 31, 1995 to June 30, 1996, as a result of
new lease originations. Commercial real estate (CRE) loans increased $1.4
billion from December 31, 1995 to June 30, 1996 due to NatWest's contribution of
$1.9 billion in commercial real estate.
Outstanding residential real estate loans secured by one- to four-family
residences decreased $3.3 billion to $8.2 billion at June 30, 1996, compared to
$11.5 billion at December 31, 1995. The decrease was primarily due to $1.1
billion of divestitures and the impact of other programs designed to decrease
the corporation's level of residential mortgages in anticipation of the NatWest
acquisition in the first quarter of 1996, as well as the securitization of $2.0
billion of residential real estate loans in the first six months of 1996. The
NatWest acquisition contributed $650 million in residential loans.
CONSUMER LOANS
- --------------------------------------------------------------------
June 30, March 31, Dec. 31,
Dollars in millions 1996 1996 1995
- --------------------------------------------------------------------
Home equity $ 5,108 $4,467 $4,791
Credit card 2,815 1,674 1,588
Student loans 1,188 1,226 1,179
Installment/Other 3,048 1,957 1,998
- --------------------------------------------------------------------
Total $12,159 $9,324 $9,556
- --------------------------------------------------------------------
Consumer loans of $12.2 billion at June 30, 1996 increased $2.6 billion
when compared to a portfolio of $9.6 billion at December 31, 1995. Excluding the
addition of NatWest, which accounted for $2.4 billion, consumer loans increased
$250 million. The increase from December 31, 1995 is principally attributed to
increased credit card loans of $621 million due to the purchase of a $250
million credit card portfolio and continued strong growth related to several
promotions aimed at attracting new customers. Offsetting the increase in the
credit card portfolio was decreased home equity loans of $440 million primarily
due to divestitures in the first quarter of 1996.
NONPERFORMING ASSETS(a)
- ----------------------------------------------------------------------
Dollars in millions C&I CRE Consumer Total
- ----------------------------------------------------------------------
Nonperforming loans and
leases:
Current or less than 90
days past due $187 $ 72 $ 9 $268
Noncurrent 208 82 133 423
OREO 4 34 16 54
- ----------------------------------------------------------------------
Total NPAs
June 30, 1996 $399 $188 $158 $745
- ----------------------------------------------------------------------
Total NPAs
March 31, 1996 $267 $126 $160 $553
- ----------------------------------------------------------------------
Total NPAs
December 31, 1995 $244 $112 $143 $499
- ----------------------------------------------------------------------
(a) Throughout this document, NPAs and related ratios do not include loans
greater than 90 days past due and still accruing interest ($221 million,
$180 million and $168 million at June 30, 1996, March 31, 1996, and
December 31, 1995, respectively). Included in these amounts were $182
million, $132 million, and $132 million of consumer loans at
June 30, 1996, March 31, 1996, and December 31, 1995, respectively. NPAs
and related ratios at June 30, 1996, March 31, 1996, and December 31,
1995 do not include $365 million, $307 million and $317 million,
respectively, of NPAs classified as held for sale or accelerated
disposition.
19
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Nonperforming assets (NPAs) increased $81 million from December 31, 1995 to
June 30, 1996, excluding $165 million of nonperforming assets obtained in
connection with the NatWest acquisition. The increase was primarily due to
increases in the commercial and industrial, and commercial real estate
portfolios, as well as the expiration of a portion of loans subject to federal
financial assistance. NPAs at June 30, 1996, as a percentage of total loans,
leases and OREO, and as a percentage of total assets were 1.26% and 0.85%,
respectively, compared to 0.97% and 0.59%, respectively, at December 31, 1995.
The increase in these ratios is attributable to increases in NPAs both in the
commercial and industrial, and commercial real estate portfolios.
At June 30, 1996, the recorded investment in impaired loans was $538
million, substantially all of which were on nonaccrual status, compared to $323
million at March 31, 1996. Loans, as defined by Statement of Financial
Accounting Standards No. 114 (SFAS No. 114) "Accounting by Creditors for
Impairment of a Loan", and as amended by SFAS No. 118, are considered impaired
when it is probable that the corporation will be unable to collect all amounts
due according to the terms of the loan agreement. Included in this quarter's
amount is $334 million of impaired loans for which the related impairment
reserve is $107 million, and $204 million of impaired loans that, due
primarily to charge-offs, do not have an impairment reserve. The average
recorded investment in impaired loans during the quarter was $461 million.
ACTIVITY IN NONPERFORMING ASSETS
- --------------------------------------------------------------------
2nd 1st 2nd
Quarter Quarter Quarter
Dollars in millions 1996 1996 1995
- --------------------------------------------------------------------
Balance at beginning
of period $553 $499 $819
Additions 221 221 235
NatWest acquisition 165 --- ---
Reductions:
Payments/interest applied (98) (88) (129)
Returned to accrual (19) (17) (31)
Charge-offs/writedowns (57) (37) (80)
Sales/other (20) (25) (41)
- --------------------------------------------------------------------
Total reductions (194) (167) (281)
- --------------------------------------------------------------------
Balance at end of period $745 $553 $773
- --------------------------------------------------------------------
NPA totals and related ratios do not include nonperforming assets
classified as held for sale or accelerated disposition. At June 30, 1996, NPAs
classified as held for sale or accelerated disposition totaled $365 million as
follows:
NONPERFORMING ASSETS HELD FOR SALE OR ACCELERATED DISPOSITION(a)
- -----------------------------------------------------------------------
Commer- Commer-
cial and cial Real
Dollars in millions Industrial Estate Consumer Total
- -----------------------------------------------------------------------
Nonaccrual loans
and leases $123 $75 $133 $331
OREO 6 2 26 34
- -----------------------------------------------------------------------
June 30, 1996 $129 $77 $159 $365
- -----------------------------------------------------------------------
March 31, 1996 $46 $63 $198 $307
- -----------------------------------------------------------------------
December 31, 1995 $46 $77 $194 $317
- -----------------------------------------------------------------------
(a) Nonperforming assets held for sale or accelerated disposition do not
include loans greater than 90 days past due and still accruing interest
($14 million, $19 million and $30 million at June 30, 1996, March 31,
1996, and December 31, 1995, respectively).
Nonperforming assets held for sale or accelerated disposition increased
from $307 million at March 31, 1996 to $365 million at June 30, 1996. The
increase of $58 million is due primarily to the acquisition of NatWest which
accounted for $133 million of additional nonperforming assets held for sale or
accelerated disposition offset by loan sales and payoffs. The commercial and
industrial, and commercial real estate loans included as nonperforming assets
held for sale or accelerated disposition are primarily loans originated by the
corporation's banking franchise, while consumer loans were predominantly loans
originated by Fleet Finance, the corporation's consumer finance subsidiary.
RESERVE FOR CREDIT LOSS ACTIVITY
- ----------------------------------------------------------------
Six months ended June 30
Dollars in millions 1996 1995
- ----------------------------------------------------------------
Balance at beginning of year $1,321 $1,496
Provision charged against income 84 48
Loans and leases charged off (190) (192)
Recoveries of loans and leases charged
off 55 56
Acquisitions/other 327 84
- ----------------------------------------------------------------
Balance at end of period $1,597 $1,492
- ------------------------------------------------------------------
Ratio of net charge-offs to average
loans and leases 0.51 % 0.54 %
- ------------------------------------------------------------------
Ratio of reserve for credit losses to
period-end loans and leases 2.70 2.85
- ------------------------------------------------------------------
Ratio of reserve for credit losses to
period-end NPAs 214 193
- ------------------------------------------------------------------
Ratio of reserve for credit losses to
period-end nonperforming loans and
leases 231 219
- ------------------------------------------------------------------
Fleet's reserve for credit losses increased $105 million from June 30,
1995, to $1,597 million at June 30, 1996 which included $335 million of acquired
reserves related to NatWest. The second quarter 1996 provision for credit losses
was $84 million, $36 million higher than the prior year's second quarter. The
20
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
increase is due to $18 million of provision for credit losses related to the
NatWest franchise and higher provision being recorded primarily as a result of
increased net charge-offs in the credit card portfolio as the credit card
portfolio has increased to $2.8 billion at June 30, 1996 from $1.6 billion at
June 30, 1995. Net charge-offs of $135 million remained relatively unchanged for
the first six months of 1996 when compared to the same period in 1995, despite
$17 million of net charge-offs pertaining to NatWest. Fleet's credit quality
ratios were relatively consistent when comparing the first six months of 1996
results to the same period of 1995 due to the acquisition of NatWest offset by
the reclassification of certain nonperforming assets to held for sale or
accelerated disposition.
FUNDING SOURCES
- --------------------------------------------------------------------
June 30, March 31, Dec. 31,
Dollars in millions 1996 1996 1995
- --------------------------------------------------------------------
Deposits:
Demand $17,527 $10,485 $12,305
Regular savings, NOW,
money market 28,801 21,783 22,835
Time:
Domestic 19,832 16,163 17,554
Foreign 1,985 1,690 4,428
- --------------------------------------------------------------------
Total deposits 68,145 50,121 57,122
- --------------------------------------------------------------------
Short-term borrowed funds:
Federal funds purchased 452 552 4,461
Securities sold under agree-
ments to repurchase 2,304 3,258 2,964
Commercial paper 1,611 1,399 2,138
Other 270 1,964 3,006
- --------------------------------------------------------------------
Total short-term borrowed
funds 4,637 7,173 12,569
- --------------------------------------------------------------------
Long-term debt 5,303 6,000 6,481
- --------------------------------------------------------------------
Total $78,085 $63,294 $76,172
- --------------------------------------------------------------------
Total deposits increased $11 billion to $68 billion at June 30, 1996, when
compared to December 31, 1995. The increase was primarily due to the NatWest
contribution of $17.5 billion in total deposits, partially offset by the
reduction of $3.2 billion of higher-rate wholesale time deposits related to the
balance sheet restructuring program and $2.4 billion of deposits divested as a
condition to regulatory approval of the Shawmut merger. Deposits were divested
across all deposit categories and included approximately $300 million of demand
deposits, $1.1 billion of savings deposits, and $900 million of time deposits.
Total short-term borrowed funds decreased $7.9 billion at June 30, 1996,
when compared to December 31, 1995, primarily due to the aforementioned balance
sheet restructuring program which replaced the corporation's higher cost
short-term borrowings with NatWest's lower cost core deposits.
ASSET AND LIABILITY MANAGEMENT
The corporation manages its interest rate risk sensitivity using a
combination of on and off-balance sheet instruments. Interest rate risk is
analyzed and measured using simulation and valuation models as well as interest
rate gap analysis. Together these tools provide a dynamic view of the earnings
sensitivity of the corporation over both relatively short-term and long-term
horizons.
Simulation analysis and interest rate gap analysis are used to analyze the
sensitivity of corporate net interest income over a relatively short (i.e. 1-2
years) time horizon. Simulation analysis involves dynamically modeling the
corporation's interest rate position over a specified time period under various
interest rate scenarios and balance sheet structures. Simulation analyses are
used to examine the impact on earnings of immediate interest rate "shocks,"
gradual interest rate "ramps," yield curve "twists," as well as numerous other
forecasted interest rate scenarios. Each scenario incorporates what management
believes to be the most reasonable assumptions about such variables as volumes,
prepayment rates for mortgage assets, and repricing characteristics of
noncontractual deposits.
The corporation's limits on interest rate risk specify that if interest
rates were to shift immediately up or down 200 basis points, estimated net
interest income for the next 12 months should decline by less than 7.5%.
Assuming an immediate 200 basis point decline in interest rates as of June 30,
1996, the estimated exposure to the corporation's net interest income was 2.0%.
Valuation analysis is also used to analyze the sensitivity of corporate net
interest and noninterest income. Valuation analysis involves projecting future
cash flows from the corporation's assets, liabilities, and off-balance sheet
positions and then discounting such cash flows at appropriate interest rates.
The corporation's economic value of equity is the estimated net present value of
its assets, liabilities, and off-balance sheet positions. The interest rate
sensitivity of economic value of equity is a measure of the sensitivity of
long-term earnings. The corporation's limits on
21
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
interest rate risk specify that if interest rates were to shift immediately up
or down 200 basis points, the estimated economic value of equity should decline
by less than 10%. Assuming an immediate 200 basis point decline in interest
rates as of June 30, 1996, the estimated exposure to the economic value of
equity was 5.6%.
Interest rate gap analysis provides a static view of the maturity and
repricing characteristics of the on and off-balance sheet positions. The
interest rate gap is prepared by scheduling all assets, liabilities, and
off-balance sheet positions according to scheduled repricing or maturity.
The following table represents the corporation's interest rate gap position
on June 30, 1996.
INTEREST-RATE GAP ANALYSIS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Repriced Within
- ---------------------------------------------------------------------------------------------------------------------------------
June 30, 1996 3 months 4 to 12 12 to 24 2 to 5 After 5
Dollars in millions by repricing date or less months months years years Total
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total Assets $42,783 $11,329 $5,841 $13,413 $14,362 $87,728
Total Liabilities and Stockholders'
Equity 32,239 16,027 9,063 8,085 22,314 87,728
Net Off Balance Sheet (7,312) 2,002 1,085 3,582 643
- ---------------------------------------------------------------------------------------------------------------------------------
Periodic Gap 3,232 (2,696) (2,137) 8,910 (7,309)
Cumulative Gap 3,232 536 (1,601) 7,309 ---
Cumulative Gap as a percent of Total
Assets 3.7 % 0.6 % (1.8)% 8.3 %
- ---------------------------------------------------------------------------------------------------------------------------------
Cumulative Gap as a percent of Total
Assets at March 31, 1996 0.6 % (0.9) % (1.3) % 10.5 %
- ---------------------------------------------------------------------------------------------------------------------------------
Cumulative Gap as a percent of Total
Assets at December 31, 1995 2.4 % 2.1 % 1.4 % 9.6 %
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The corporation's limits on interest rate risk specify that the cumulative
one-year gap should be less than 10% of total assets. As of June 30, 1996, the
estimated exposure was 0.6%.
The most significant factors affecting the interest rate risk position in
the second quarter were the acquisition of NatWest and related funding and
hedging transactions. In its management of these and other factors influencing
the current environment, the corporation has attempted to maintain an
approximately neutral position relative to the level of interest rates. The
change from December 31, 1995 reflects this strategy as the gap position remains
narrow despite significant balance sheet restructuring.
Derivative instruments totaling $15.9 billion (notional amount) at June 30,
1996 are being used for interest-rate risk-management purposes. These derivative
instruments consist primarily of interest-rate swaps, which total approximately
$15.1 billion.
22
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTEREST-RATE RISK-MANAGEMENT INSTRUMENT ANALYSIS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Weighted
Assets/ Average Weighted Average
June 30, 1996 Notional Liabilities Maturity Fair Rate
----
Dollars in millions Value Hedged (Years) Value Receive Pay
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest-rate risk management swaps:
Receive fixed/pay variable $4,705 Variable rate loans
1,992 Fixed rate deposits
914 Long-term debt
610 Short-term borrowings
------------
8,221 2.6 $(56.1) 6.71 % 6.17 %
- -----------------------------------------------------------------------------------------------------------------------------------
Pay fixed/receive variable 1,535 Short-term borrowings 2.1 (16.0) 5.51 6.66
- -----------------------------------------------------------------------------------------------------------------------------------
Basis swaps 2,735 Fixed rate deposits
1,064 Securities
380 Long-term debt
------------
4,179 2.2 (5.2) 5.55 ` 5.57
- -----------------------------------------------------------------------------------------------------------------------------------
Index-amortizing swaps receive
fixed/pay variable 1,137 Variable rate loans 0.9 (1.7) 5.12 5.81
- -----------------------------------------------------------------------------------------------------------------------------------
Total interest-rate swaps $15,072 2.3 $(79.0) 6.15 % 6.03 %
- -----------------------------------------------------------------------------------------------------------------------------------
Total other instruments(a) 850 Short-term borrowings 1.0 8.1 --- (b) --- (b)
- -----------------------------------------------------------------------------------------------------------------------------------
Total interest-rate instruments $15,922 2.2 $(70.9) 6.15 % 6.03 %
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Other instruments include interest rate caps and floors.
(b) Average rates are not meaningful for interest rate caps and floors.
In addition to interest-rate swap agreements, the corporation utilizes
interest-rate cap and floor agreements to manage interest-rate risk.
Interest-rate cap and floor agreements are similar to interest-rate swap
agreements except that interest payments are only made or received if current
interest rates rise above/below a predetermined interest rate. At June 30, 1996,
the corporation had approximately $850 million in notional amounts of purchased
interest-rate cap and floor agreements.
The periodic net settlement of interest-rate risk-management instruments is
recorded as an adjustment to net interest income. As of June 30, 1996, the
corporation has net deferred income of $33.9 million relating to terminated
interest-rate contracts, which will be amortized over the remaining life of the
underlying interest-rate contracts of approximately three years.
The interest-rate risk-management instrument activity for the three months
ended June 30, 1996 is summarized in the following table (all amounts are
notional amounts):
<TABLE><CAPTION>
INTEREST-RATE RISK-MANAGEMENT INSTRUMENT ACTIVITY
- ----------------------------------------------------------------------------------------------
Interest-Rate Swaps
----------------------------------------
Receive- Pay- Index- Other
Dollars in millions Fixed Fixed Basis Amortizing Instruments Total
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at March 31, 1996 $8,178 $1,785 $4,292 $1,467 $962 $16,684
Additions 373 --- 1,300 --- 40 1,713
Maturities (330) (250) (385) (330) (152) (1,447)
Terminations --- --- (1,028) --- --- (1,028)
- ---------------------------------------------------------------------------------------------
Balance at June 30, 1996 $8,221 $1,535 $4,179 $1,137 $850 $15,922
- ---------------------------------------------------------------------------------------------
</TABLE>
During the second quarter of 1996, there was a net decrease of
approximately $800 million of interest-rate risk-management instruments as
additions of $1.7 billion were more than offset by maturities of approximately
$1.5 billion and terminations of $1.0 billion. Basis swaps declined $113
million, reflecting the termination of a $1.028 billion hedge of variable rate
securities, $385 million of maturities, and $1.3 billion of additions which
hedge fixed rate deposits. Other instruments decreased $112 million as a result
of
23
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
$152 million of maturities offset by $40 million acquired from NatWest.
The maturities of the interest-rate risk-management instruments are shown
in the following table:
MATURITIES OF THE INTEREST-RATE RISK-MANAGEMENT INSTRUMENTS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
June 30, 1996 Within 1 to 2 2 to 3 3 to 4 4 to 5 After 5
Dollars in millions 1 Year Years Years Years Years Years Total
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Notional amounts:
INTEREST-RATE SWAPS
Receive-fixed $ 574 $2,348 $3,453 $ 474 $682 $690 $ 8,221
Pay-fixed 205 660 --- 650 --- 20 1,535
Basis 350 795 2,734 300 --- --- 4,179
Index-amortizing 909 28 200 --- --- --- 1,137
- -----------------------------------------------------------------------------------------------------------------------------------
Total interest-rate swaps $2,038 $3,831 $6,387 $1,424 $682 $710 $15,072
- -----------------------------------------------------------------------------------------------------------------------------------
OTHER INTEREST-RATE INSTRUMENTS 664 --- 150 2 --- 34 850
- -----------------------------------------------------------------------------------------------------------------------------------
Total interest-rate instruments $2,702 $3,831 $6,537 $1,426 $682 $744 $15,922
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
MORTGAGE SERVICING RIGHTS PREPAYMENT RISK-MANAGEMENT. The corporation also
uses interest-rate contracts to manage the prepayment risk associated with the
corporation's mortgage servicing portfolio. The value of the corporation's
mortgage servicing portfolio may be adversely impacted if mortgage interest
rates decline and actual or estimated loan prepayments increase. As a result,
the carrying value of the corporation's mortgage servicing rights are subject to
a great degree of volatility in the event of unanticipated prepayments or
defaults. To attempt to mitigate the risk related to adverse changes in interest
rates and the potential resultant impairment to MSRs, the corporation holds
interest-rate contracts (primarily purchased interest-rate floor contracts).
Such contracts are designated as hedges, and changes in the value, net of
amortization, are recorded as adjustments to the carrying value of the
underlying assets. At June 30, 1996, unrecognized losses of $53 million had been
recorded as adjustments to the carrying value of the underlying assets. At June
30, 1996, the carrying value and fair value of the corporation's mortgage
servicing rights were $1.5 billion and $1.9 billion, respectively. Investments
in interest-rate contracts are amortized over the life of the contracts and are
included as a component of mortgage servicing rights amortization.
MORTGAGE SERVICING RIGHTS PREPAYMENT RISK-MANAGEMENT INSTRUMENTS
- ---------------------------------------------------------------------
Interest- Interest-
June 30, 1996 Rate Rate Call
Dollars in millions Floors Caps Options Total
- ---------------------------------------------------------------------
Balance at
March 31, 1996 $6,960 $ 200 $880 $8,040
Additions 1,360 --- 630 1,990
Maturities --- --- (880) (880)
Terminations --- --- (180) (180)
- ---------------------------------------------------------------------
Balance at June 30,
1996 $8,320 $ 200 $450 $8,970
- ---------------------------------------------------------------------
Fair value $ 18.3 $ (1.2) $ 2.6 $ 19.7
- ---------------------------------------------------------------------
Average maturity
(years) 4.1 4.0 0.25 3.9
- ---------------------------------------------------------------------
The above instruments are used in an effort to protect the economic value
of the corporation's mortgage servicing rights. Interest-rate caps and floors
have strike prices that are indexed to the 3, 5, and 10-year constant maturity
treasury rate. Call options consist of purchased and written call option
contracts on long-term US Treasury securities. The following table presents the
maturity of the mortgage servicing rights prepayment risk-management
instruments.
24
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MATURITIES OF THE MORTGAGE SERVICING RIGHTS PREPAYMENT RISK-MANAGEMENT
INSTRUMENTS
- -----------------------------------------------------------------------
June 30, 1996 Within 3 to 4 4 to 5
Dollars in millions 1 Year Years Years Total
- -----------------------------------------------------------------------
Interest-rate floors $ --- $2,875 $5,445 $8,320
Interest-rate caps --- --- 200 200
Call options 450 --- --- 450
- -----------------------------------------------------------------------
Total $450 $2,875 $5,645 $8,970
- -----------------------------------------------------------------------
LIQUIDITY
The primary sources of liquidity at the parent level are interest and
dividends from subsidiaries and access to the capital and money markets. The
corporation's subsidiaries rely on cash flows from operations, core deposits,
borrowings, short-term high-quality liquid assets, and in the case of nonbanking
subsidiaries, funds from the parent for liquidity. During the first six months
of 1996, the parent received $2.1 billion in interest and dividends from
subsidiaries and paid $403 million in interest and dividends to third parties.
The $1.7 billion difference between interest and dividends received from
subsidiaries over interest and dividends paid to third parties is primarily the
result of the subsidiaries paying cash dividends to the parent company in order
to assist in the funding of the NatWest acquisition. Dividends paid by the
corporation's banking subsidiaries are limited by various regulatory
requirements related to capital adequacy and historical earnings.
As shown in the consolidated statement of cash flows, cash and cash
equivalents increased by $2.5 billion during the six month period ended June 30,
1996. This increase was due to cash provided by investing activities of $17.1
billion and cash provided by operating activities of $2.7 million, offset by
cash used in financing activities of $17.3 billion. Net cash provided by
investing activities was attributable to a net decrease in securities, primarily
due to balance sheet restructuring in preparation for the NatWest acquisition
and a net decrease in loans. Net cash provided by operating activities was
attributable to net income of $542 million and net proceeds provided from sales
of mortgages held for resale of $965 million. Net cash used in financing
activities was due to a decrease in deposits of $7.4 billion relating primarily
to balance sheet restructuring and divestitures, and a $9.1 billion paydown of
short-term borrowings from cash generated from the balance sheet restructuring,
offset by the corporation issuing $600 million in preferred stock to assist in
the funding of the NatWest acquisition.
On May 1, 1996, FMG became a subsidiary of a Fleet bank affiliate, and as a
result it is anticipated that substantially all future funding of FMG will be
provided by such bank. FMG's existing shelf registration was canceled, the
revolving credit agreement was paid off and canceled, and all other debt is
expected to be paid as it matures.
At June 30, 1996 and December 31, 1995, the corporation had commercial
paper outstanding of $1.6 billion and $2.1 billion, respectively. The
corporation has backup lines of credit to ensure that funding is not interrupted
if commercial paper is not available. The total amount of funds available under
these agreements was $1.7 billion at June 30, 1996, with no outstanding balance
under these lines of credit.
Fleet has a universal shelf registration that provides for the issuance of
common and preferred stock, senior or subordinated debt securities, and other
securities with total amount of funds available of approximately $913.4 million
at June 30, 1996.
CAPITAL
- -----------------------------------------------------------------------
June 30, March 31, June 30,
1996 1996 1995
- -----------------------------------------------------------------------
Risk-adjusted assets $80,351 $63,591 $68,403
Tier 1 risk-based capital
(4% minimum) 6.85 % 9.18 % 8.22 %
Total risk-based capital
(8% minimum) 10.61 13.03 12.01
Leverage ratio 6.59 7.88 6.81
Common equity-to-
assets 6.98 8.35 6.83
Total equity-to-assets 8.12 9.49 7.61
Tangible equity-to-assets 6.23 8.12 6.36
Capital in excess of
minimum requirements:
Tier 1 risk-based $2,292 $3,297 $2,863
Total risk-based 2,094 3,199 2,736
Leverage 2,167 2,875 2,296
- -----------------------------------------------------------------------
At June 30, 1996, the corporation exceeded all regulatory required minimum
capital ratios as Fleet's preliminary Tier 1 and Total risk based capital ratios
were 6.85 percent and 10.61 percent, respectively, at June 30, 1996, compared
with 9.18 percent and 13.03 percent, respectively, at March 31, 1996. The
leverage ratio, a measure of Tier 1 capital to average quarterly assets, was
6.59 percent at June 30, 1996, compared with 7.88 percent at March 31, 1996. The
corporation's ratios decreased compared to March 31, 1996 as a result of
increased risk adjusted assets obtained in the NatWest acquisition.
25
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RECENT ACCOUNTING DEVELOPMENTS
In October, 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation," which establishes a fair value based method of accounting for
employee stock options and similar equity instruments. This statement also
permits companies to continue to measure compensation costs for these plans
using the current accounting method which is intrinsic value based. Companies
that elect to continue to use the intrinsic value method must provide pro forma
disclosure of net income and earnings per share as if the fair value method of
accounting had been applied. This standard is effective for the year ended
December 31, 1996. The corporation continues to use the intrinsic value based
method of accounting and will provide the additional disclosure on the pro forma
impact of the fair value based method under SFAS No. 123 in the 1996 annual
report for awards granted in both 1995 and 1996.
The FASB issued SFAS No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities," which will be effective
for transactions occurring after December 31, 1996. This Statement requires
that, after a transfer of financial assets, an entity recognize the financial
and servicing assets it controls and the liabilities it has incurred, and
derecognize financial assets when control has been surrendered. The transferor
has surrendered control over financial assets only if such assets have been
isolated from the transferor, the transferee obtains the right to pledge or
exchange the transferred assets, and any agreement to repurchase the transferred
assets can be satisfied by delivery of assets that are readily obtainable.
Liabilities and derivatives incurred or obtained in exchange for transferred
assets are initially measured at fair value. Servicing assets and other retained
interests in the transferred assets are measured by allocating the carrying
amount between the assets and the retained interests based on their relative
fair values. It is management's belief that the adoption of this Statement will
not have a material impact on the corporation or its results of operations.
26
<PAGE>
PART II. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The corporation held its Annual Meeting of Stockholders on April 17, 1996.
(b) Not applicable.
(c) A brief description of each matter voted upon at the meeting, and the
number of votes cast for, against or withheld, as well as the number of
abstentions and broker non-votes, as to each such matter, follows. A
separate tabulation with respect to each nominee for office is also
included.
Three matters were voted on at the Annual Meeting.
1. ELECTION OF DIRECTORS
All ten nominees for election as directors were elected. There were
no abstentions or broker non-votes for any of the nominees.
TERM
NAME OF DIRECTOR FOR AGAINST EXPIRATION
---------------- --- ------- ----------
Paul J. Choquette, Jr. 222,076,608 2,686,690 1999
Bernard M. Fox 222,051,581 2,711,717 1999
Robert J. Kavner 222,130,649 2,632,649 1999
Thomas D. O'Connor 222,135,720 2,627,578 1999
Michael B. Picotte 222,211,890 2,551,408 1999
John S. Scott 222,009,959 2,753,339 1999
Paul R. Tregurtha 222,178,047 2,585,251 1999
Stillman B. Brown 222,146,817 2,616,481 1998
Lois D. Rice 222,098,581 2,664,717 1998
Robert J. Matura 222,124,389 2,638,909 1997
The following directors will continue in office and were not up for
re-election.
TERM
NAME OF DIRECTOR EXPIRATION
---------------- ----------
William Barnet, III 1997
John T. Collins 1997
Raymond C. Kennedy 1997
Terrence Murray 1997
Samuel O. Thier 1997
Joel B. Alvord 1997
Bradford R. Boss 1998
James F. Hardymon 1998
Arthur C. Milot 1998
John R. Riedman 1998
<PAGE>
PART II. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - (CONT'D)
2. APPROVE THE AMENDED AND RESTATED 1992 STOCK OPTION AND RESTRICTED
STOCK PLAN
The second proposal voted on by the stockholders of the corporation, to
approve the Amended and Restated 1992 Stock Option and Restricted Stock
Plan, was approved with 208,560,549 votes cast for, 13,929,345 votes
cast against, and 2,273,404 abstentions. There were no broker non-votes.
3. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The third proposal voted on by stockholders of the corporation, to
approve the appointment of KPMG Peat Marwick LLP to serve as independent
auditors of the corporation for the current fiscal year ended December
31, 1996, was approved with 223,023,809 votes cast for, 1,052,821 votes
cast against, and 686,668 abstentions. There were no broker non-votes.
(d) Not applicable
<PAGE>
PART II. ITEM 6.
<TABLE>
<CAPTION>
(a) Exhibit Index
Exhibit
Number
- ----------
<S> <C>
3(a) Restated Articles of Incorporation of Registrant, as amended
3(b) By-laws of Registrant, as amended
4 Instruments defining the right of security holders, including debentures*
10(a) Fleet Financial Group, Inc. Executive Deferred Compensation Plan No. 1 (1996
Restatement)
10(b) Fleet Financial Group, Inc. Executive Deferred Compensation Plan No. 2 (1996
Restatement)
10(c) Fleet Financial Group, Inc. Executive Supplemental Plan (1996 Restatement)
10(d) Fleet Financial Group, Inc. Supplemental Executive Retirement Plan (1996 Restatement)
10(e) Fleet Financial Group, Inc. Retirement Income Assurance Plan (1996 Restatement)
10(f) Fleet Financial Group, Inc. Trust Agreement for Executive Deferred Compensation
Plans No. 1 and 2
10(g) Fleet Financial Group, Inc. Trust Agreement for the Executive Supplemental Plan
10(h) Fleet Financial Group, Inc. Trust Agreement for the Retirement Income Assurance Plan
and the Supplemental Executive Retirement Plan
11 Statement re-computation of per share earnings
12 Statement re-computation of ratios
27(a) Financial data schedules
27(b) Restated Financial data Schedule
</TABLE>
*Registrant has no instruments defining the rights of holders of equity or debt
securities where the amount of securities authorized thereunder exceeds 10% of
the total assets of the registrant and its subsidiaries on a consolidated basis.
Registrant hereby agrees to furnish a copy of any such instrument to the
Commission upon request.
(b) Eight Form 8-K's and Form 8-K/A's were filed during the period from
April 1, 1996 to the date of this report.
- Current Report on Form 8-K dated April 1, 1996, reporting the merger of
the southern New England national banks.
- Amendment to Current Report on Form 8-K/A dated April 5, 1996, amending
the Current Report on Form 8-K dated March 15, 1996, filing the
Unaudited Pro Forma Combined Financial Statements as of December 31,
1995, and notes thereto, in connection with the NatWest Merger, and the
Registrant's 1995 historical financial statements and notes thereto,
management's discussion and analysis, and selected financial
highlights.
- Current Report on Form 8-K dated April 15, 1996, reporting the
issuance and sale of $300 million 7 1/8% Subordinated Notes due
April 15, 2006.
- Current Report on Form 8-K dated April 17, 1996 announcing 1996 first
quarter earnings. - Current Report on Form 8-K dated May 1, 1996,
reporting the merger of Fleet Bank of New York, National Association
with and into NatWest Bank, National Association on May 1, 1996.
- Current Report on Form 8-K dated May 15, 1996, filing the Unaudited
Pro Forma Combined Financial Statements and NatWest historical
financial statements, both as of March 31, 1996, and notes thereto, in
connection with the NatWest Merger.
- Current Report on Form 8-K dated July 17, 1996 announcing second
quarter earnings.
- Amendment to Current Report on Form 8-K/A dated August 5,
1996, amending the Current Report on Form 8-K dated May 15, 1996,
filing the Unaudited Pro Forma Combined Financial Statements and
NatWest historical financial statements, both as of March 31, 1996,
and notes thereto, in connection with the NatWest Merger.
29
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Fleet Financial Group, Inc.
---------------------------
(Registrant)
/s/ Eugene M. McQuade
---------------------
Eugene M. McQuade
Executive Vice President
Chief Financial Officer
/s/ Robert C. Lamb, Jr.
-----------------------
Robert C. Lamb, Jr.
Chief Accounting Officer
Controller
Date: August 14, 1996
30
<PAGE>
Exhibit Index
<TABLE><CAPTION>
Exhibit
Number Description
- ---------- -----------
<S> <C>
3(a) Restated Articles of Incorporation of Registrant, as amended
3(b) Bylaws of Registrant, as amended
10(a) Fleet Financial Group, Inc. Executive Deferred Compensation Plan No. 1 (1996
Restatement)
10(b) Fleet Financial Group, Inc. Executive Deferred Compensation Plan No. 2 (1996
Restatement)
10(c) Fleet Financial Group, Inc. Executive Supplemental Plan (1996 Restatement)
10(d) Fleet Financial Group, Inc. Supplemental Executive Retirement Plan (1996 Restatement)
10(e) Fleet Financial Group, Inc. Retirement Income Assurance Plan (1996 Restatement)
10(f) Fleet Financial Group, Inc. Trust Agreement for Executive Deferred Compensation
Plans No. 1 and 2
10(g) Fleet Financial Group, Inc. Trust Agreement for the Executive Supplemental Plan
10(h) Fleet Financial Group, Inc. Trust Agreement for the Retirement Income Assurance Plan
and the Supplemental Executive Retirement Plan
11 Statement re-computation of per share earnings
12 Statement re-computation of ratios
27(a) Financial data schedules
27(b) Restated Financial data Schedule
</TABLE>
EXHIBIT 3.(a)
STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS
BUSINESS CORPORATION
RESTATED ARTICLES OF INCORPORATION
OF
FLEET FINANCIAL GROUP, INC.
-------------------
Pursuant to the provisions of Section 7-1.1-59 of the General Laws, 1956, as
amended, the undersigned corporation adopts the following Restated Articles of
Incorporation:
FIRST: The name of the corporation (hereinafter called the Corporation) is
FLEET FINANCIAL GROUP, INC.
SECOND: The period of its duration is perpetual.
THIRD: The nature of the business of the Corporation and the objects or
purposes to be transacted, promoted or carried on by it are as follows:
1. To purchase or otherwise acquire and to hold, pledge, sell, exchange or
otherwise dispose of securities (which term includes any shares of stock, bonds,
debentures, notes, mortgages or other instruments representing rights to
receive, purchase or subscribe for the same or representing any other rights or
interest therein or in any property or assets) created or issued by any person,
firm, association, corporation (including, to the extent permitted by the laws
of the State of Rhode Island, the Corporation) or government or subdivision,
agency or instrumentality thereof; to make payment therefor in any lawful
manner; and to exercise, as owner or holder thereof, any and all rights, powers
and privileges in respect thereof (to the extent aforesaid).
2. To make, manufacture, produce, prepare, process, purchase or otherwise
acquire, and to hold, use, sell, import, export, or otherwise trade or deal in
and with, goods, wares, products, merchandise, machines, machinery, appliances
and apparatus, of every kind, nature and any manufacturing or other business of
any kind or character whatsoever, including, but not by way of limitation,
importing, exporting, mining, quarrying, producing, farming, agriculture,
forestry, construction, management, advisory, mercantile, financial or
investment business, any business engaged in rendering any manner of services
and any business of buying, selling, leasing or dealing in properties of any and
all kinds, whether any such business is located in the United States of America
or any foreign country, and whether or not related to, conducive to, incidental
to, or in any way connected with, the foregoing business.
3. To engage in research, exploration, laboratory and development work
relating to any material, substance, compound or mixture now known or which may
hereafter be known, discovered or developed and to perfect, develop,
manufacture, use, apply and generally to deal in and with any such material,
substance, compound or mixture.
4. To purchase, lease or otherwise acquire, to hold, own, use, develop,
maintain, manage and operate, to sell, transfer, lease, assign, convey,
exchange, or otherwise turn to account or dispose of, and, generally, to deal in
and with, personal and real property, tangible or intangible, of every kind and
description, wheresoever situated, and any and all rights, concessions,
interests and privileges therein.
5. To adopt, apply for, obtain, register, purchase, lease or otherwise
acquire, to maintain, protect, hold, use, own, exercise, develop, manufacture
under, operate and introduce and to sell and grant licenses or other rights in
respect of, assign or otherwise dispose of, turn to account, or in any manner
deal with, and contract with reference to, any trademarks, trade names, patents,
patent rights, concessions, franchises, designs, copyrights and distinctive
marks and rights analogous thereto and inventions, devices, improvements,
processes, recipes, formulae and the like, including, but not by way of
limitation, such thereof as may be covered by, used in connection with, or
secured or received under,
1
<PAGE>
Letters Patent of the United States of America or elsewhere, and any licenses
and rights in respect thereof, in connection therewith or appertaining thereto.
6. To make, enter into, perform and carry out contracts of every kind and
description with any person, firm, association, corporation or government or
subdivision, agency or instrumentality thereof; to endorse or guarantee the
payment of principal, interest or dividends upon, and to guarantee the
performance of sinking fund or other obligations of, any securities or the
payment of a certain amount per share in liquidation of the capital stock of any
other corporation; and to guarantee in any way permitted by law the performance
of any of the contracts or other undertakings of any person, firm, association,
corporation or government or subdivision, agency or instrumentality thereof.
7. To acquire by purchase, exchange or otherwise, all, or any part of, or
any interest in, the properties, assets, business and good will of any one or
more persons, firms, associations or corporations heretofore or hereafter
engaged in any business whatsoever; to pay for the same in cash, property or its
own or other securities; to hold, operate, lease, reorganize, liquidate, sell or
in any manner dispose of the whole or any part thereof; to assume or guarantee,
in connection therewith, the performance of any liabilities, obligations or
contracts of such persons, firms, associations or corporations; and to conduct
the whole or any part of any business thus acquired.
8. To lend its uninvested funds from time to time to such extent, to such
persons, firms, associations, corporations or governments or subdivisions,
agencies or instrumentalities thereof, and on such terms and on such security,
if any, as the Board of Directors of the Corporation (hereinafter called the
Board of Directors) may determine.
9. To borrow money for any of the purposes of the Corporation, from time to
time, and without limits as to amount; to issue and sell from time to time its
own securities in such amounts, on such terms and conditions, for such purposes
and for such consideration, as may now be or hereafter shall be permitted by the
laws of the State of Rhode Island; and to secure such securities by mortgage
upon, or the pledge of, or the conveyance or assignment in trust of, the whole
or any part of the properties, assets, business and good will of the Corporation
then owned or thereafter acquired.
10. To promote, organize, manage, aid or assist, financially or otherwise,
persons, firms, associations or corporations engaged in any business whatsoever;
and to assume or underwrite the performance of all or any of their obligations.
11. To organize or cause to be organized under the laws of the State of
Rhode Island, any other state or states of the United States of America, the
District of Columbia, any territory, dependency, colony or possession of the
United States of America, or of any foreign country, a corporation or
corporations for the purpose of transacting, promoting or carrying on any or all
objects or purposes for which the Corporation is organized; to dissolve, wind
up, liquidate, merge or consolidate any such corporation or corporations or to
cause the same to be dissolved, wound up, liquidated, merged or consolidated;
and, subject to the laws of the State of Rhode Island, to consolidate or merge
with or into one or more other corporations organized under the laws of the
State of Rhode Island or under the laws of any other state or states in the
United States of America, the District of Columbia, any territory, dependency,
colony or possession of the United States of America or of any foreign country
if the laws under which said other corporation or corporations are formed shall
permit such consolidation or merger.
12. To conduct its business in any and all of its branches and maintain
offices both within and without the State of Rhode Island in any and all states
of the United States of America, in the District of Columbia, in any or all
territories, dependencies, colonies or possessions of the United States of
America and in foreign countries.
13. To such extent as a business corporation organized under the laws of the
State of Rhode Island may now or hereafter lawfully do, to do, either as
principal or agent and either alone or through subsidiaries or in connection
with other persons, firms, associations or corporations, all and everything
2
<PAGE>
necessary, suitable, convenient or proper for, or in connection with, or
incident to, the accomplishment of any of the purposes or the attainment of any
one or more of the objects herein enumerated or designed directly or indirectly
to promote the interests of the Corporation or to enhance the value of its
properties and in general to engage in any lawful act or activity for which
corporations may be organized under the General Laws of Rhode Island; and to do
any and all things and exercise all powers, rights and privileges which a
business corporation may now or hereafter be organized or authorized to do or to
exercise under the laws of the State of Rhode Island.
14. Whenever the context permits, the following provisions shall govern the
construction of the paragraphs of these purposes: no specified enumeration shall
be construed as restricting in any way any general language; any word, whether
in the singular or plural shall be construed to mean both the singular and the
plural; any phrase in the conjunctive or in the disjunctive shall include both
the conjunctive and disjunctive; the mention of the whole shall include any part
or parts; any one or more or all of the purposes set forth may be pursued from
time to time and whenever deemed desirable; verbs in the present or future tense
shall be construed to include both the present and future tenses or either of
them.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 616,000,000, of which 16,000,000
shares of the par value of $1 each are to be of a class designated "Preferred
Stock" and 600,000,000 of the par value of $0.01 each are to be of a class
designated "Common Stock".
The voting powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereof, of the classes of stock of the Corporation which are fixed
by these Articles of Incorporation, and the authority vested in the Board of
Directors to fix by vote or votes providing for the issue of Preferred Stock,
the voting powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereof, of the shares of Preferred Stock which are not fixed by
these Articles of Incorporation, are as follows:
(a) The Preferred Stock may be issued from time to time in one or more
series of any number of shares; provided that the aggregate number of shares
issued and not canceled of any and all such series shall not exceed the total
number of shares of Preferred Stock hereinabove authorized. Each series of
Preferred Stock shall be distinctively designated by letter or descriptive
words. All series of Preferred Stock shall rank equally and be identical in all
respects except as permitted by the provisions of paragraph (b) of this Article
FOURTH.
(b) Authority is hereby vested in the Board of Directors from time to time
to issue the Preferred Stock of any series and in connection with the creation
of each such series to fix by vote or votes providing for the issue of shares
thereof the voting powers, if any, the designation, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of such series to the full extent now or
hereafter permitted by these Articles of Incorporation and the laws of the State
of Rhode Island, in respect of the matters set forth in the following
subparagraphs (1) to (8), inclusive:
(1) The distinctive designation of such series and the number of shares
which shall constitute such series, which number may be increased or
decreased (but not below the number of shares thereof then outstanding) from
time to time by action of the Board of Directors;
(2) The dividend rate of such series, any preferences to or provisions
in relation to the dividends payable on any other class or classes or of any
other series of stock, and any limitations, restrictions or conditions on
the payment of dividends;
(3) The price or prices at which, and the terms and conditions on which,
the shares of such series may be redeemed by the Corporation;
3
<PAGE>
(4) The amount or amounts payable upon the shares of such series in the
event of any liquidation, dissolution or winding up of the Corporation;
(5) Whether or not the shares of such series shall be entitled to the
benefit of a sinking fund to be applied to the purchase or redemption of
shares of such series and, if so entitled, the amount of such fund and the
manner of its application;
(6) Whether or not the shares of such series shall be made convertible
into, or exchangeable for, shares of any other class or classes of stock of
the Corporation or shares of any other series of Preferred Stock, and, if
made so convertible or exchangeable, the conversion price or prices, or the
rate or rates of exchange, and the adjustments thereof, if any, at which
such conversion or exchange may be made, and any other terms and conditions
of such conversion or exchange;
(7) Whether or not the shares of such series shall have any voting
powers and, if voting powers are so granted, the extent of such voting
powers; and
(8) Whether or not the issue of any additional shares of such series or
of any future series in addition to such series shall be subject to
restrictions in addition to the restrictions, if any, on the issue of
additional shares imposed in the vote or votes fixing the terms of any
outstanding series of Preferred Stock theretofore issued pursuant to this
Article FOURTH and, if subject to additional restrictions, the extent of
such additional restrictions.
(c) The holders of Preferred Stock of each series shall be entitled to
receive, when and as declared by the Board of Directors, dividends in cash at
the rate for such series fixed by the Board of Directors as provided in
paragraph (b) of this Article FOURTH, and no more, payable quarterly on the
first days of January, April, July and October or of such other months as may be
designated by the Board of Directors (each of the quarterly periods ending on
the first day of January, April, July and October in each year, or on the first
days of such other months, respectively, being hereinafter called a dividend
period), in each case from the date of cumulation (as defined in paragraph (h)
of this Article FOURTH) of such series. Except as may otherwise be provided in
the vote or votes providing for the issue of any given series of Preferred
Stock, dividends on Preferred Stock shall be cumulative (whether or not there
shall be net profits or net assets of the Corporation legally available for the
payment of such dividends), so that, if at any time full cumulative dividends
(as defined in paragraph (h) of this Article FOURTH) upon the Preferred Stock of
all series to the end of the last completed dividend period shall not have been
paid or declared and a sum sufficient for payment thereof set apart, the amount
of the deficiency shall be fully paid, but without interest, or dividends in
such amount shall have been declared on each such series and a sum sufficient
for the payment thereof shall have been set apart for such payment, before any
sum or sums shall be set aside for or applied to the purchase or redemption of
Preferred Stock of any series (either pursuant to any applicable sinking fund
provisions or any redemptions authorized pursuant to paragraph (g) of this
Article FOURTH or otherwise) or set aside for or applied to the purchase of
Common Stock and before any dividend shall be declared or paid or any other
distribution ordered or made upon the Common Stock (other than a dividend
payable in Common Stock); provided, however, that any moneys deposited in the
sinking fund provided for any series of Preferred Stock in the vote or votes
providing for the issue of shares of said series, in compliance with the
provisions of such sinking fund and of this paragraph (c), may thereafter be
applied to the purchase or redemption of Preferred Stock in accordance with the
terms of such sinking fund, whether or not at the time of such application full
cumulative dividends upon the outstanding Preferred Stock of all series to the
end of the last completed dividend period shall have been paid or declared and
set apart for payment. All dividends declared upon the Preferred Stock of the
respective series outstanding shall be declared pro rata, so that the amounts of
dividends declared per share on the Preferred Stock of different series shall in
all cases bear to each other the same ratio that accrued dividends per share on
the shares of such respective series bear to each other.
(d) Before any sum or sums shall be set aside for or applied to the purchase
of Common Stock and before any dividends shall be declared or paid or any
distribution ordered or made upon the Common
4
<PAGE>
Stock (other than a dividend payable in Common Stock), the Corporation shall
comply with the sinking fund provisions, if any, of any vote or votes providing
for the issue of any series of Preferred Stock any shares of which shall at the
time be outstanding.
(e) Subject to the provisions of paragraphs (c) and (d) of this Article
FOURTH, the holders of Common Stock shall be entitled, to the exclusion of the
holders of Preferred Stock of any and all series, to receive such dividends as
from time to time may be declared by the Board of Directors.
(f) In the event of any liquidation, dissolution or winding up of the
Corporation, the holders of Preferred Stock of each series then outstanding
shall be entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any payment shall be made to the holders of Common Stock, an amount
determined as provided in paragraph (b) of this Article FOURTH for every share
of their holdings of Preferred Stock of such series. If upon any liquidation,
dissolution or winding up of the Corporation the assets of the Corporation
available for distribution to its stockholders shall be insufficient to pay the
holders of Preferred Stock of all series the full amounts to which they
respectively shall be entitled, the holders of Preferred Stock of all series
shall share ratably in any distribution of assets according to the respective
amounts which would be payable in respect of the shares of Preferred Stock held
by them upon such distribution if all amounts payable on or with respect to
Preferred Stock of all series were paid in full. In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, after payment shall have been made to the holders of Preferred
Stock of the full amount to which they shall be entitled as aforesaid, the
holders of Common Stock shall be entitled, to the exclusion of the holders of
Preferred Stock of any and all series, to share, ratably according to the number
of shares of Common Stock held by them, in all remaining assets of the
Corporation available for distribution to its stockholders. Neither the merger
or consolidation of the Corporation into or with another corporation nor the
merger or consolidation of any other corporation into or with the Corporation,
nor the sale, transfer or lease of all or substantially all the assets of the
Corporation, shall be deemed to be a liquidation, dissolution or winding up of
the Corporation.
(g) Subject to any requirements which may be applicable to the redemption of
any given series of Preferred Stock as provided in any vote or votes providing
for the issue of such series of Preferred Stock, the Preferred Stock of all
series, or of any series thereof, or any part of any series thereof, at any time
outstanding, may be redeemed by the Corporation, at its election expressed by
vote of the Board of Directors, any time or from time to time, upon not less
than 30 days previous notice to the holders of record of Preferred Stock to be
redeemed, given by mail in such manner as may be prescribed by vote or votes of
the Board of Directors,
(1) If such redemption shall be otherwise than by the application of
moneys in any sinking fund referred to in paragraph (d) of this Article
FOURTH, at the redemption price, fixed as provided in paragraph (b) of this
Article FOURTH, at which shares of Preferred Stock of the particular series
may then be redeemed at the option of the Corporation and
(2) If such redemption shall be by the application of moneys in any
sinking fund referred to in paragraph (d) of this Article FOURTH, at the
redemption price, fixed as provided in paragraph (b) of this Article FOURTH,
at which shares of Preferred Stock of the particular series may then be
redeemed for such sinking fund;
provided, however, that, before any Preferred Stock of any series shall be
redeemed at said redemption price thereof specified in clause (1) of this
paragraph (g), all moneys at the time in the sinking fund, if any, for Preferred
Stock of that series shall first be applied, as nearly as may be, to the
purchase or redemption of Preferred Stock of that series as provided in the vote
or votes of the Board of Directors providing for such sinking fund. If less than
all the outstanding shares of Preferred Stock of any series are to be redeemed,
the redemption may be made either by lot or pro rata in such manner as may be
prescribed by vote of the Board of Directors. The Corporation may, if it shall
so elect, provide moneys for the payment of the redemption price by depositing
the amount thereof for the account of the holders
5
<PAGE>
of Preferred Stock entitled thereto with a bank or trust company doing business
in the City of New York, in the State of New York, or in the City of Providence,
in the State of Rhode Island, and having capital and surplus of at least
$5,000,000. The date upon which such deposit may be made by the Corporation
(hereinafter called the "date of deposit") shall be prior to the date fixed as
the date of redemption. In any such case there shall be included in the notice
of redemption a statement of the date of deposit and of the name and address of
the bank or trust company with which the deposit has been or will be made. On
and after the date fixed in any such notice of redemption as the date of
redemption (unless default shall be made by the Corporation in providing moneys
for the payment of the redemption price pursuant to such notice) or, if the
Corporation shall have made such deposit on or before the date specified
therefor in the notice, then on and after the date of deposit all rights of the
holders of the Preferred Stock to be redeemed as stockholders of the
Corporation, except the right to receive the redemption price as hereinafter
provided, and, in the case of such deposit, any conversion rights not
theretofore expired, shall cease and terminate. Such conversion rights, however,
in any event shall cease and terminate upon the date fixed for redemption or
upon any earlier date fixed by the Board of Directors pursuant to paragraph (b)
of this Article FOURTH for termination of such conversion rights. Anything
herein contained to the contrary notwithstanding, said redemption price shall
include an amount equal to accrued dividends on the Preferred Stock to be
redeemed to the date fixed for the redemption thereof and the Corporation shall
not be required to declare or pay on such Preferred Stock to be redeemed, and
the holders thereof shall not be entitled to receive, any dividends in addition
to those thus included in the redemption price, provided, however, that the
Corporation may pay in regular course any dividends thus included in the
redemption price either to the holders of record on the record date fixed for
the determination of stockholders entitled to receive such dividends (in which
event, anything herein to the contrary notwithstanding, the amount so deposited
need not include any dividends so paid or to be paid) or as part of the
redemption price upon surrender of the certificates for the shares redeemed. At
any time on or after the date fixed as aforesaid for such redemption or, if the
Corporation shall elect to deposit the money for such redemption as herein
provided, then at any time on or after the date of deposit and without awaiting
the date fixed as aforesaid for such redemption, the respective holders of
record of the Preferred Stock to be redeemed shall be entitled to receive the
redemption price upon actual delivery to the Corporation, or, in the event of
such deposit, to the bank or trust company with which such deposit shall be
made, of certificates for the shares to be redeemed, such certificates, if
required, to be properly stamped for transfer and duly endorsed in blank or
accompanied by proper instruments of assignment and transfer thereof duly
executed in blank. Any moneys so deposited which shall remain unclaimed by the
holders of such Preferred Stock at the end of five years after the redemption
date shall be paid by such bank or trust company to the Corporation and any
interest accrued on moneys so deposited shall belong to the Corporation and
shall be paid to it from time to time. Preferred Stock redeemed pursuant to the
provisions of this paragraph (g) shall be canceled and shall thereafter have the
status of authorized and unissued shares of Preferred Stock.
(h) The term "date of cumulation" as used with reference to any series of
Preferred Stock shall be deemed to mean the date fixed by the Board of Directors
as the date of cumulation of such series at the time of creation thereof or, if
no date shall have been fixed, the date on which shares of such series are first
issued. Whenever used with reference to any share of any series of Preferred
Stock, the term "full cumulative dividends" shall be deemed to mean (whether or
not in any dividend period, or any part thereof, in respect of which such term
is used there shall have been net profits or net assets of the Corporation
legally available for the payment of such dividends) that amount which shall be
equal to dividends at the full rate fixed for such series as provided in
paragraph (b) of this Article FOURTH for the period of time elapsed from the
date of cumulation of such series to the date as of which full cumulative
dividends are to be computed (including an amount equal to the dividend at such
rate for any fraction of a dividend period included in such period of time); and
the term "accrued dividends" shall be deemed to mean full cumulative dividends
to the date as of which accrued dividends are to be computed, less the amount of
all dividends paid, or deemed paid as hereinafter in this paragraph (h)
provided, upon said share. In the event of the issue of additional shares of
Preferred Stock of any series
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after the original issue of shares of Preferred Stock of such series, all
dividends paid or accrued on Preferred Stock of such series prior to the date of
issue of such additional Preferred Stock shall be deemed to have been paid on
the additional Preferred Stock so issued.
(i) No holder of stock of any class of the Corporation, whether now or
hereafter authorized, shall have any preemptive, preferential or other rights to
subscribe for or purchase or acquire any shares of any class or any other
securities of the Corporation, whether now or hereafter authorized, and whether
or not convertible into, or evidencing or carrying the right to purchase, shares
of any class or any other securities now or hereafter authorized, and whether
the same shall be issued for cash, services or property, or by way of dividend
or otherwise.
(j) Subject to the provisions of these Articles of Incorporation and except
as otherwise provided by law, the shares of stock of the Corporation, regardless
of class, may be issued for such consideration and for such corporate purposes
as the Board of Directors may from time to time determine.
(k) Except as otherwise provided by law, or these Articles of Incorporation,
or by the vote or votes providing for the issue of any series of Preferred
Stock, the holders of shares of Preferred Stock as such holders, shall not have
any right to vote, and are hereby specifically excluded from the right to vote,
in the election of directors or for any other purpose. Except as aforesaid, the
holders of Preferred Stock, as such holders, shall not be entitled to notice of
any meeting of stockholders.
(l) Subject to the provisions of any applicable law, or of the Bylaws of the
Corporation as from time to time amended, with respect to the closing of the
transfer books or the fixing of a record date for the determination of
stockholders entitled to vote and except as otherwise provided by law or by
these Articles of Incorporation, or by the vote or votes providing for the issue
of any series of Preferred Stock, the holders of outstanding shares of Common
Stock shall exclusively possess voting power for the election of directors and
for all other purposes, each holder of record of shares of Common Stock being
entitled to one vote for each share of Common Stock standing in his name on the
books of the Corporation.
(As of the date of these Restated Articles of Incorporation, the following
series of Preferred Stock have been authorized by the Board of Directors of the
Corporation: (i) Series III 10.12% Perpetual Preferred Stock, the terms and
provisions of which are set forth in Exhibit A hereto, (ii) Series IV 9.375%
Perpetual Preferred Stock, the terms and provisions of which are set forth in
Exhibit B hereto, (iii) Dual Convertible Preferred Stock, the terms and
provisions of which are set forth in Exhibit C hereto, (iv) Cumulative
Participating Junior Preferred Stock, the terms and provisions of which are set
forth in Exhibit D hereto, (v) Preferred Stock with Cumulative and Adjustable
Dividends, the terms and provisions of which are set forth in Exhibit E hereto,
(vi) 9.30% Cumulative Preferred Stock, the terms and provisions of which are set
forth in Exhibit F hereto, (vii) 9.35% Cumulative Preferred Stock, the terms and
provisions of which are set forth in Exhibit G hereto, (viii) Series V 7.25%
Perpetual Preferred Stock, the terms and provisions of which are set forth in
Exhibit H hereto and (ix) Series VI 6.75% Perpetual Preferred Stock, the terms
and provisions of which are set forth in Exhibit I hereto, said Exhibits A
through I being hereby incorporated by reference in this Article FOURTH as if
set forth herein. As of the date of these Restated Articles of Incorporation,
there were issued and outstanding (i) 519,758 shares of Series III 10.12%
Perpetual Preferred Stock, (ii) 478,838 shares of Series IV 9.375% Perpetual
Preferred Stock, (iii) no shares of Dual Convertible Preferred Stock, (iv) no
shares of Cumulative Participating Junior Preferred Stock, (v) 688,700 shares of
Preferred Stock with Cumulative and Adjustable Dividends, (vi) 575,000 shares of
9.30% Cumulative Preferred Stock, (vii) 500,000 shares of 9.35% Cumulative
Preferred Stock, (viii) 1,100,000 shares of Series V 7.25% Perpetual Preferred
Stock and (ix) 600,000 shares of Series VI 6.75% Perpetual Preferred Stock.)
FIFTH: The private property of the stockholders of the Corporation shall not
be subject to the payment of corporate debts to any extent whatsoever.
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SIXTH: Whenever the vote of stockholders at a meeting thereof is required or
permitted to be taken for or in connection with any corporate action, the
meeting and vote of stockholders may be dispensed with and such action may be
taken with the written consent of stockholders having not less than the minimum
percentage of the total vote required by statute for the proposed corporate
action, and provided that prompt notice of such action be given to all
stockholders who would have been entitled to vote upon the action if such
meeting were held.
SEVENTH: (a) Directors of the Corporation need not be stockholders, but no
person shall be elected a Director who has attained the age of 72 and no person
shall continue to serve as Director after the date of the first meeting of the
stockholders of the Corporation held on or after the date on which such person
attained the age of 72.
The powers and authorities herein conferred upon the Board of Directors are
in furtherance and not in limitation of those conferred by the laws of the State
of Rhode Island. In addition to the powers and authorities herein or by statute
expressly conferred upon it, the Board of Directors may exercise all such powers
and do all such acts and things as may be exercised or done by the Corporation,
subject, nevertheless, to the provisions of the laws of the State of Rhode
Island, of these Articles of Incorporation and of the Bylaws of the Corporation.
(b) The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors. The number of directors of the
Corporation (exclusive of directors to be elected by the holders of any one or
more series of the Preferred Stock voting separately as a class or classes) that
shall constitute the Board of Directors shall be 13, unless otherwise determined
from time to time by resolution adopted by the affirmative vote of:
(1) At least 80% of the Board of Directors, and
(2) A majority of the Continuing Directors.
(c) Subject to applicable law, the Directors shall be divided into three (3)
classes, each class to be as nearly equal in number as possible. The term of
office of Directors of the first class shall expire at the annual meeting of
stockholders to be held in 1984 and until their respective successors are duly
elected and qualified. The term of office of Directors of the second class shall
expire at the annual meeting of stockholders to be held in 1985 and until their
respective successors are duly elected and qualified. The term of office of
Directors of the third class shall expire at the annual meeting of stockholders
to be held in 1986 and until their respective successors are duly elected and
qualified. Subject to the foregoing, at each annual meeting of stockholders,
commencing at the annual meeting to be held in 1984, the successors to the class
of directors whose term shall then expire shall be elected to hold office for a
term expiring at the third succeeding annual meeting and until their successors
shall be duly elected and qualified. Any vacancies in the Board of Directors for
any reason, and any newly created directorships resulting from any increase in
the number of directors, may be filled only by the Board of Directors, acting by
vote of 80% of the directors then in office, although less than a quorum, and
any directors so chosen shall hold office until the next election of the class
for which such directors shall have been chosen and until their respective
successors shall be duly elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director. Notwithstanding the
foregoing, and except as otherwise required by law, whenever the holders of any
one or more series of Preferred Stock shall have the right, voting separately as
a class, to elect one or more directors of the Corporation, (i) the terms of the
director or directors elected by such holders shall expire at the next
succeeding annual meeting of stockholders and vacancies created with respect to
any directorship of the directors so elected may be filled in the manner
specified by such Preferred Stock, and (ii) this Article SEVENTH shall be deemed
to be construed and/or modified so as to permit the full implementation of the
terms and conditions relating to election of directors of any series of
Preferred Stock that has been or will be designated by the Board of Directors.
(d) Notwithstanding any other provisions of these Articles of Incorporation
or the Bylaws of the Corporation (and notwithstanding the fact that some lesser
percentage may be specified by law, these
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Articles of Incorporation or the Bylaws of the Corporation), any one or more
directors of the Corporation may be removed at any time, but only for cause and
only by either (1) the affirmative vote of a majority of the Continuing
Directors and a majority of the Board of Directors or (2) the affirmative vote,
at a meeting of the stockholders called for that purpose, as to all stock held
by the holders of 80% or more of the outstanding Voting Shares, voting
separately as a class.
Notwithstanding the foregoing, and except as otherwise required by law,
whenever the holders of any one or more series of Preferred Stock shall have the
right, voting separately as a class, to elect one or more directors of the
Corporation, the provisions of this Section (d) shall not apply with respect to
the director or directors elected by such holders of Preferred Stock.
(e) For purposes of this Article SEVENTH, the following definitions shall
apply:
(1) Affiliate. An "Affiliate" of, or a Person "affiliated with", a
specified Person, means a Person that directly or indirectly, through one or
more intermediaries, controls, or is controlled by, or is under common
control with, the Person specified.
(2) Associate. The term "Associate" used to indicate a relationship with
any Person means:
(A) Any corporation or organization (other than the Corporation or a
Subsidiary of the Corporation) of which such Person is an officer or
partner or is, directly or indirectly, the beneficial owner of ten
percent or more of any class of equity securities;
(B) Any trust or other estate in which such Person has a ten percent
or greater beneficial interest or as to which such Person serves as
trustee or in a similar fiduciary capacity;
(C) Any relative or spouse of such Person, or any relative of such
spouse, who has the same home as such Person; or
(D) Any investment company registered under the Investment Company
Act of 1940 for which such Person or any Affiliate or Associate of such
Person serves as investment adviser.
(3) Beneficial Owner. A Person shall be considered the "Beneficial
Owner" of any shares of stock (whether or not owned of record):
(A) With respect to which such Person or any Affiliate or Associate
of such Person directly or indirectly has or shares (i) voting power,
including the power to vote or to direct the voting of such shares of
stock, and/or (ii) investment power, including the power to dispose of or
to direct the disposition of such shares of stock;
(B) Which such Person or any Affiliate or Associate of such Person
has (i) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, and/or (ii) the right
to vote pursuant to any agreement, arrangement or understanding (whether
such right is exercisable immediately or only after the passage of time);
or
(C) Which are Beneficially Owned within the meaning of (A) or (B) of
this Section (3) by any other Person with which such first mentioned
Person or any of its Affiliates or Associates has any agreement,
arrangement or understanding, written or oral, with respect to acquiring,
holding, voting or disposing of any shares of stock of the Corporation or
any Subsidiary of the Corporation or acquiring, holding or disposing of
all or substantially all, or any Substantial Part, of the assets or
business of the Corporation or a Subsidiary of the Corporation.
For the purpose only of determining whether a Person is the Beneficial Owner
of a percentage specified in this Article SEVENTH of the outstanding Voting
Shares, such shares shall be deemed to include any Voting Shares which may be
issuable pursuant to any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants, options or otherwise
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and which are deemed to be beneficially owned by only such Person pursuant to
the foregoing provisions of this Section (3).
(4) Business Combination. A "Business Combination" means:
(A) The sale, exchange, lease, transfer or other disposition to or
with a Related Person or any Affiliate or Associate of such Related
Person by the Corporation or any of its Subsidiaries (in a single
transaction or a series of related transactions) of all or substantially
all, or any Substantial Part, of its or their assets or businesses
(including, without limitation, any securities issued by a Subsidiary);
(B) The purchase, exchange, lease or other acquisition by the
Corporation or any of its Subsidiaries (in a single transaction or a
series of related transactions) of all or substantially all, or any
Substantial Part, of the assets or business of a Related Person or any
Affiliate or Associate of such Related Person;
(C) Any merger or consolidation of the Corporation or any Subsidiary
thereof into or with a Related Person or any Affiliate or Associate of
such Related Person, irrespective of which Person is the surviving entity
in such merger or consolidation;
(D) Any reclassification of securities, recapitalization or other
transaction (other than a redemption in accordance with the terms of the
security redeemed) which has the effect, directly or indirectly, of
increasing the proportionate amount of Voting Shares of the Corporation
or any Subsidiary thereof which are Beneficially Owned by a Related
Person, or any partial or complete liquidation, spinoff, split off or
split up of the Corporation or any Subsidiary thereof; provided however,
that this Section (4)(D) shall not relate to any transaction of the types
specified herein that has been approved by (i) a majority of the Board of
Directors, and (ii) 80% of the Continuing Directors; or
(E) The acquisition upon the issuance thereof of Beneficial Ownership
by a Related Person of Voting Shares or securities convertible into
Voting Shares or any voting securities or securities convertible into
voting securities of any Subsidiary of the Corporation, or the
acquisition upon the issuance thereof of Beneficial Ownership by a
Related Person of any rights, warrants or options to acquire any of the
foregoing or any combination of the foregoing Voting Shares or voting
securities of a Subsidiary of the Corporation.
As used in this definition, a "series of related transactions" shall be
deemed to include not only a series of transactions with the same Related Person
but also a series of separate transactions with a Related Person or any
Affiliate or Associate of such Related Person.
Anything in this definition to the contrary notwithstanding, this definition
shall not be deemed to include any transaction of the type set forth in Sections
(4)(A) through (4)(C) above between or among any two or more Subsidiaries of the
Corporation or the Corporation and one or more Subsidiaries of the Corporation
if such transaction has been approved by the affirmative vote of at least 80% of
the Board of Directors and a majority of the Continuing Directors on or prior to
the Date of Determination.
(5) Continuing Director. A "Continuing Director" shall mean:
(A) An individual who was a member of the Board of Directors of the
Corporation first elected by the stockholders or by the Board of
Directors prior to April 13, 1983 or prior to the time that a Related
Person became the Beneficial Owner of in excess of 10% of the Voting
Shares of the Corporation entitled to vote in the election of directors;
or
(B) An individual designated (before such individual's initial
election as a director) as a Continuing Director by a majority of the
then Continuing Directors.
(6) Date of Determination. The term "Date of Determination" means:
(A) The date on which a binding agreement (except for the fulfillment
of conditions precedent, including, without limitation, votes of
stockholders to approve such transaction) is
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entered into by the Corporation, as authorized by its Board of Directors,
and another Person providing for any Business Combination; or
(B) If such an agreement as referred to in Section (6)(A) above is
amended so as to make it less favorable to the Corporation and its
stockholders, the date on which such amendment is approved by the Board
of Directors of the Corporation; or
(C) In cases where neither Section (6)(A) or (6)(B) above shall be
applicable, the record date for the determination of stockholders of the
Corporation entitled to notice of and to vote upon the transaction in
question. A majority of the Continuing Directors shall have the power and
duty to determine the Date of Determination as to any transaction under
this Article SEVENTH. Any such determination shall be conclusive and
binding for all purposes of this Article.
(7) Person. The term "Person" shall mean any individual, partnership,
corporation, group or other entity (other than the Corporation, any
Subsidiary of the Corporation for itself or as a fiduciary for customers in
the ordinary course, or a trustee holding stock for the benefit of employees
of the Corporation or its Subsidiaries, or any one of them, pursuant to one
or more employee benefit plans or arrangements). When two or more Persons
act as a partnership, limited partnership, syndicate, association or other
group for the purpose of acquiring, holding or disposing of shares of stock,
such partnership, syndicate, association or group shall be deemed a
"Person".
(8) Related Person. "Related Person" means any Person which is the
Beneficial Owner, as of the Date of Determination or immediately prior to
the consummation of a Business Combination, or both, of 10% or more of the
Voting Shares, or any Person who is an Affiliate of the Corporation and at
any time within five years preceding the Date of Determination was the
Beneficial Owner of 10% or more of the then outstanding Voting Shares, but
does not include any one group of more than one Continuing Director.
(9) Substantial Part. The term "Substantial Part" as used with reference
to the assets of the Corporation, of any Subsidiary or of any Related Person
means assets having a value of more than five percent of the total
consolidated assets of the Corporation and its Subsidiaries as of the end of
the Corporation's most recent fiscal year ending prior to the time the
determination is being made.
(10) Subsidiary. "Subsidiary" shall mean any corporation or entity of
which the Person in question owns not less than 50% of any class of equity
securities, directly or indirectly.
(11) Voting Shares. "Voting Shares" shall mean shares of the
Corporation's capital stock entitled to vote generally in the election of
directors.
(12) Certain Determinations With Respect to Article SEVENTH. (A) A
majority of the Continuing Directors shall have the conclusive power and
authority to determine, for the purposes of this Article SEVENTH, on the
basis of information known to them: (i) the number of Voting Shares of which
any Person is the Beneficial Owner, (ii) whether a Person is an Affiliate or
Associate of another, (iii) whether a Person has an agreement, arrangement
or understanding with another as to the matters referred to in the
definition of "Beneficial Owner" as hereinabove defined, (iv) whether the
assets subject to any Business Combination constitute a "Substantial Part"
as hereinabove defined, (v) whether two or more transactions constitute a
"series of related transactions" as hereinabove defined, (vi) any matters
referred to in subsection (12)(B) below, and (vii) such other matters with
respect to which a determination is required under this Article SEVENTH. Any
such determination shall be final and binding for all purposes hereunder.
(B) A Related Person shall be deemed to have acquired a Voting Share of
the Corporation at the time when such Related Person became the Beneficial
Owner thereof. With respect to Voting Shares owned by Affiliates, Associates
or other Persons whose ownership is attributed to a Related Person under the
foregoing definition of Beneficial Owner, if the price paid by such Related
Person for such shares is not determinable, the price so paid shall be
deemed to be the higher of (i) the price paid upon acquisition thereof by
the Affiliate, Associate or other Person or (ii) the market price of the
shares in question (as determined by a majority of the Continuing Directors)
at the time when the Related Person became the Beneficial Owner thereof.
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(f) Notwithstanding any other provisions of these Articles of Incorporation
or the Bylaws of the Corporation (and notwithstanding the fact that some lesser
percentage may be specified by law, these Articles of Incorporation or the
Bylaws of the Corporation), and in addition to such additional vote of the
Preferred Stock as may be required by the provisions of any series thereof or by
applicable law, this Article SEVENTH shall not be amended, altered, changed or
repealed without:
(1) The affirmative vote of 80% of the Board of Directors and of a
majority of Continuing Directors, and
(2) The affirmative vote as to all stock held by the holders of 80% or
more of the outstanding Voting Shares, voting separately as a class.
EIGHTH: (a) The Corporation reserves the right at any time and from time to
time to amend, alter, change or repeal any provision contained in these Articles
of Incorporation, and other provisions authorized by the laws of the State of
Rhode Island at the time in force may be added or inserted in these Articles of
Incorporation, in the manner (i) now or hereafter prescribed by law, and (ii) as
has otherwise been provided in Articles SEVENTH and NINTH of these Articles of
Incorporation; and all rights, preferences and privileges of whatsoever nature
conferred upon stockholders, directors or any other persons whomsoever by and
pursuant to these Articles of Incorporation in their present form or as
hereafter amended are granted subject to the right reserved in this Article
EIGHTH.
(b) Notwithstanding any other provisions of these Articles of Incorporation
or the Bylaws of the Corporation (and notwithstanding the fact that some lesser
percentage may be specified by law, these Articles of Incorporation or the
Bylaws of the Corporation), and in addition to such additional vote of the
Preferred Stock as may be required by the provisions of any series thereof or by
applicable law, this Article EIGHTH shall not be amended, altered, changed or
repealed without the affirmative vote as to all stock held by the holders of 80%
or more of the outstanding shares of the Corporation's capital stock entitled to
vote generally in the election of directors, voting separately as class.
NINTH: (a) Definitions and Related Matters as to Certain Business
Combinations.
1.1 Affiliate. An "Affiliate" of, or a Person "affiliated with", a specified
Person, means a Person that directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Person specified.
1.2 Associate. The term "Associate" used to indicate a relationship with any
Person means:
(1) Any corporation or organization (other than the Corporation or a
Subsidiary of the Corporation) of which such Person is an officer or partner
or is, directly or indirectly, the beneficial owner of ten percent or more
of any class of equity securities;
(2) Any trust or other estate in which such Person has a ten percent or
greater beneficial interest or as to which such Person serves as trustee or
in a similar fiduciary capacity;
(3) Any relative or spouse of such Person, or any relative of such
spouse, who has the same home as such Person; or
(4) Any investment company registered under the Investment Company Act
of 1940 for which such Person or any Affiliate or Associate of such Person
serves as investment adviser.
1.3 Beneficial Owner. A Person shall be considered the "Beneficial Owner" of
any shares of stock (whether or not owned of record):
(1) With respect to which such Person or any Affiliate or Associate of
such Person directly or indirectly has or shares (i) voting power, including
the power to vote or to direct the voting of such shares of stock, and/or
(ii) investment power, including the power to dispose of or to direct the
disposition of such shares of stock;
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(2) Which such Person or any Affiliate or Associate of such Person has
(i) the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, and/or (ii) the right to vote pursuant to
any agreement, arrangement or understanding (whether such right is
exercisable immediately or only after the passage of time); or
(3) Which are Beneficially Owned within the meaning of (1) or (2) of
this Section 1.3 by any other Person with which such first-mentioned Person
or any of its Affiliates or Associates has any agreement, arrangement or
understanding, written or oral, with respect to acquiring, holding, voting
or disposing of any shares of stock of the Corporation or any Subsidiary of
the Corporation or acquiring, holding or disposing of all or substantially
all, or any Substantial Part, of the assets or business of the Corporation
or a Subsidiary of the Corporation.
For the purpose only of determining whether a Person is the Beneficial Owner
of a percentage specified in this Article NINTH of the outstanding Voting
Shares, such shares shall be deemed to include any Voting Shares which may be
issuable pursuant to any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants, options or otherwise
and which are deemed to be beneficially owned by only such Person pursuant to
the foregoing provisions of this Section 1.3.
1.4 Business Combination. A "Business Combination" means:
(1) The sale, exchange, lease, transfer or other disposition to or with
a Related Person or any Affiliate or Associate of such Related Person by the
Corporation or any of its Subsidiaries (in a single transaction or a series
of related transactions) of all or substantially all, or any Substantial
Part, of its or their assets or business (including, without limitation, any
securities issued by a Subsidiary);
(2) The purchase, exchange, lease or other acquisition by the
Corporation or any of its Subsidiaries (in a single transaction or a series
of related transactions) of all, or any Substantial Part, of the assets or
business of a Related Person or any Affiliate or Associate of such Related
Person;
(3) Any merger or consolidation of the Corporation or any Subsidiary
thereof into or with a Related Person or any Affiliate or Associate of such
Related Person, irrespective of which Person is the surviving entity in such
merger or consolidation;
(4) Any reclassification of securities, recapitalization or other
transaction (other than a redemption in accordance with the terms of the
security redeemed) which has the effect, directly or indirectly, of
increasing the proportionate amount of Voting Shares of the Corporation or
any Subsidiary thereof which are Beneficially Owned by a Related Person, or
any partial or complete liquidation, spin-off, split-off or split-up of the
Corporation or any Subsidiary thereof; provided, however, that this Section
1.4(4) shall not relate to any transaction of the types specified herein
that has been approved by (i) a majority of the Board of Directors and (ii)
80% of the Continuing Directors; or
(5) The acquisition upon the issuance thereof of Beneficial Ownership by
a Related Person of Voting Shares or securities convertible into Voting
Shares or any voting securities or securities convertible into voting
securities of any Subsidiary of the Corporation, or the acquisition upon the
issuance thereof of Beneficial Ownership by a Related Person of any rights,
warrants or options to acquire any of the foregoing or any combination of
the foregoing Voting Shares or voting securities of a Subsidiary of the
Corporation.
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As used in this definition, a "series of related transactions" shall be
deemed to include not only a series of transactions with the same Related
Person but also a series of separate transactions with a Related Person or
any Affiliate or Associate of such Related Person.
Anything in this definition to the contrary notwithstanding, this
definition shall not be deemed to include any transaction of the type set
forth in Section 1.4(1) through 1.4(3) above between or among any two or
more Subsidiaries of the Corporation or the Corporation and one or more
Subsidiaries of the Corporation if such transaction has been approved by the
affirmative vote of at least 80% of the Board of Directors and a majority of
the Continuing Directors on or prior to the Date of Determination.
1.5 Continuing Director. A "Continuing Director" shall mean:
(1) An individual who was a member of the Board of Directors of the
Corporation first elected by the stockholders or by the Board of Directors
prior to April 13, 1983 or prior to the time that a Related Person became
the Beneficial Owner of in excess of 10% of the Voting Shares of the
Corporation entitled to vote in the election of directors; or
(2) An individual designated (before such individual's initial election
as a director) as a Continuing Director by a majority of the then Continuing
Directors.
1.6 Date of Determination. The term "Date of Determination" means:
(1) The date on which a binding agreement (except for the fulfillment of
conditions precedent, including, without limitation, votes of stockholders
to approve such transaction) is entered into by the Corporation, as
authorized by its Board of Directors, and another Person providing for any
Business Combination; or
(2) If such an agreement as referred to in Section 1.6(1) above is
amended so as to make it less favorable to the Corporation and its
stockholders, the date on which such amendment is approved by the Board of
Directors of the Corporation; or
(3) In cases where neither Section 1.6(1) or (2) above shall be
applicable, the record date for the determination of stockholders of the
Corporation entitled to notice of and to vote upon the transaction in
question.
A majority of the Continuing Directors shall have the power and duty to
determine the Date of Determination as to any transaction under this Article
NINTH. Any such determination shall be conclusive and binding for all purposes
of this Article.
1.7 Person. The term "Person" shall mean any individual, partnership,
corporation, group or other entity (other than the Corporation, any Subsidiary
of the Corporation for itself or as a fiduciary for customers in the ordinary
course, or a trustee holding stock for the benefit of employees of the
Corporation or its Subsidiaries, or any one of them, pursuant to one or more
employee benefit plans or arrangements). When two or more Persons act as a
partnership, limited partnership, syndicate, association or other group for the
purpose of acquiring, holding or disposing of shares of stock, such partnership,
syndicate, association or group shall be deemed a "Person".
1.8 Related Person. "Related Person" means any Person which is the
Beneficial Owner, as of the Date of Determination or immediately prior to the
consummation of a Business Combination or both, of 10% or more of the Voting
Shares, or any Person who is an Affiliate of the Corporation and at any time
within five years preceding the Date of Determination was the Beneficial Owner
of 10% or more of the then outstanding Voting Shares, but does not include any
one or group of more than one Continuing Director.
1.9 Substantial Part. The term "Substantial Part" as used with reference to
the assets of the Corporation, of any Subsidiary or of any Related Person means
assets having a value of more than five
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percent of the total consolidated assets of the Corporation and its Subsidiaries
as of the end of the Corporation's most recent fiscal year ending prior to the
time the determination is being made.
1.10 Subsidiary. "Subsidiary" shall mean any corporation or entity of which
the Person in question owns not less than 50% of any class of equity securities,
directly or indirectly.
1.11 Voting Shares. "Voting Shares" shall mean shares of the Corporation's
capital stock entitled to vote generally in the election of directors.
1.12 Certain Determinations With Respect to Article NINTH.
(1) A majority of the Continuing Directors shall have the conclusive
power and authority to determine, for the purposes of this Article NINTH, on
the basis of information known to them: (i) the number of Voting Shares of
which any Person is the Beneficial Owner, (ii) whether a Person is an
Affiliate or Associate of another, (iii) whether a Person has an agreement,
arrangement or understanding with another as to the matters referred to in
the definition of "Beneficial Owner" as hereinabove defined, (iv) whether
the assets subject to any Business Combination constitute a "Substantial
Part" as hereinabove defined, (v) whether two or more transactions
constitute a "series of related transactions" as hereinabove defined, (vi)
any matters referred to in subsection 1.12(2) below, and (vii) such other
matters with respect to which a determination is required under this Article
NINTH. Any such determination shall be final and binding for all purposes
hereunder.
(2) A Related Person shall be deemed to have acquired a Voting Share of
the Corporation at the time when such Related Person became the Beneficial
Owner thereof. With respect to Voting Shares owned by Affiliates, Associates
or other Persons whose ownership is attributed to a Related Person under the
foregoing definition of Beneficial Owner, if the price paid by such Related
Person for such shares is not determinable, the price so paid shall be
deemed to be the higher of (i) the price paid upon acquisition thereof by
the Affiliate, Associate or other Person or (ii) the market price of the
shares in question (as determined by a majority of the Continuing Directors)
at the time when the Related Person became the Beneficial Owner thereof.
(b) Approval of Certain Business Combinations.
Whether or not a vote of the stockholders is otherwise required in
connection with the transaction, neither the Corporation nor any of its
Subsidiaries shall become a party to any Business Combination without prior
compliance with the provisions of Section 1.1 or 1.2 or 1.3 hereinbelow, in
addition to such additional vote of the Preferred Stock as may be required by
the provisions of any series thereof or by applicable law.
1.1 Prior Approval by the Board of Directors. Such Business Combination was
approved by the Board of Directors of the Corporation by the affirmative vote of
at least 80% of the Board of Directors of the Corporation either (a) at a time
prior to the acquisition of 10% or more of the outstanding Voting Shares of the
Corporation by the Related Person, or (b) after such acquisition, but only so
long as such Related Person sought and obtained the approval, by the affirmative
vote of at least 80% of the Board of Directors of the Corporation, of the
acquisition of 10% or more of the outstanding Voting Shares prior to such
acquisition being consummated.
1.2 Approval by Continuing Directors and Additional Requirements.
Such Business Combination (a) shall be approved at a meeting of the Board of
Directors by the affirmative vote of 80% of the Continuing Directors and a
majority of the Board of Directors, and (b) all of the conditions hereinafter
set forth in subsections (1) through (5) shall be satisfied:
(1) The ratio of (i) the aggregate amount of the cash and the fair
market value of other consideration to be received per share of Common Stock
in such Business Combination by holders of Common Stock other than the
Related Person involved in such Business Combination, to (ii) the market
price per share of the Common Stock immediately prior to the announcement of
the
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proposed Business Combination, is at least as great as the ratio of (x) the
highest per share price (including brokerage commissions, transfer taxes and
soliciting dealers' fees) which such Related Person has theretofore paid in
acquiring any Common Stock prior to such Business Combination, to (y) the
market price per share of Common Stock immediately prior to the initial
acquisition by such Related Person of any shares of Common Stock; and
(2) The aggregate amount of the cash and the fair market value of other
consideration to be received per share of Common Stock in such Business
Combination by holders of Common Stock, other than the Related Person
involved in such Business Combination, (i) is not less than the highest per
share price (including brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by such Related Person in acquiring any of its holdings
of Common Stock, (ii) is not less than the earnings per share of Common
Stock for the four consecutive fiscal quarters of the Corporation
immediately preceding the Date of Determination of such Business Combination
multiplied by the then price/earnings multiple (if any) of such Related
Person as customarily computed and reported in the financial community;
provided, that for the purposes of this clause (ii), if more than one Person
constitutes the Related Person involved in the Business Combination, the
price/earnings multiple (if any) of the Person having the highest
price/earnings multiple shall be used for the computation in this clause
(ii), and (iii) is not less than the book value of a share of the Common
Stock, as reflected in the balance sheet of the Corporation as of the last
day of the last fiscal quarter of the Corporation preceding the Date of
Determination; and
(3) The consideration (if any) to be received in such Business
Combination by holders of Common Stock other than the Related Person
involved shall, except to the extent that a stockholder agrees otherwise as
to all or part of the shares which he or she owns, be in the same form and
of the same kind as the consideration paid by the Related Person in
acquiring Common Stock already owned by it; and
(4) After such Related Person became a Related Person and prior to the
consummation of such Business Combination: (i) such Related Person shall
have taken steps to ensure that the Board of Directors of the Corporation
included at all times representation by Continuing Directors proportionate
to the ratio that the number of Voting Shares of the Corporation from time
to time owned by stockholders who are not Related Persons bears to all
Voting Shares of the Corporation outstanding at the time in question (with a
Continuing Director to occupy any resulting fractional position among the
directors); (ii) such Related Person shall not have acquired from the
Corporation, directly or indirectly, any shares of the Corporation (except
(x) upon conversion of convertible securities acquired by it prior to
becoming a Related Person or (y) as a result of a pro rata stock dividend,
stock split or division of shares or (z) in a transaction consummated after
this Article NINTH was added to these Articles of Incorporation and which
satisfied all applicable requirements of this Article NINTH); (iii) such
Related Person shall not have acquired any additional Voting Shares of the
Corporation or securities convertible into or exchangeable for Voting Shares
except as a part of the transaction which resulted in such Related Person's
becoming a Related Person; and (iv) such Related Person shall not have (x)
received the benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or other financial
assistance or tax credits provided by the Corporation or any Subsidiary, or
(y) made any major change in the Corporation's business or equity capital
structure or entered into any contract, arrangement or understanding with
the Corporation except any such change, contract, arrangement or
understanding as may have been approved by the favorable vote of not less
than 80% of the Continuing Directors and a majority of the Board of
Directors of the Corporation; and
(5) A proxy statement complying with the requirements of the Securities
Exchange Act of 1934 shall have been mailed to all holders of Voting Shares
for the purpose of soliciting stockholder approval of such Business
Combination. Such proxy statement shall contain at the front thereof, in a
prominent place, any recommendations as to the advisability (or
inadvisability) of the Business Combination which the Continuing Directors,
or any of them, may have furnished in writing and, if
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deemed advisable by two thirds of the Continuing Directors, an opinion of a
reputable investment banking firm as to the fairness (or lack of fairness)
of the terms of such Business Combination from the point of view of the
holders of Voting Shares other than any Related Person (such investment
banking firm to be selected by two thirds of the Continuing Directors, to be
furnished with all information it reasonably requests, and to be paid by the
Corporation a reasonable fee for its services upon receipt by the
Corporation of such opinion).
For purposes of Sections 1.1 (1) and (2) hereof, in the event of a
Business Combination upon consummation of which the Corporation would be the
surviving corporation or company or would continue to exist (unless it is
provided, contemplated or intended that as part of such Business Combination
or within one year after consummation thereof a plan of liquidation or
dissolution of the Corporation will be effected), the term "other
consideration to be received" shall include (without limitation) Common
Stock retained by stockholders of the Corporation other than Related Persons
who are parties to such Business Combination.
1.3 Approval by Stockholders. If there is not full compliance with the
provisions of Section 1.1 or 1.2 of paragraph (b) of this Article, such Business
Combination shall be approved by the affirmative vote of 80% of the Voting
Shares, voting as a single class; provided that a proxy statement complying with
the requirements of the Securities Exchange Act of 1934 shall have been mailed
to all holders of Voting Shares for the purpose of soliciting stockholder
approval of such Business Combination. Such proxy statement shall contain at the
front thereof, in a prominent place, any recommendations as to the advisability
(or inadvisability) of the Business Combination which the Continuing Directors,
or any of them, may have furnished in writing and, if deemed advisable by two
thirds of the Continuing Directors, an opinion of a reputable investment banking
firm as to the fairness (or lack of fairness) of the terms of such Business
Combination from the point of view of the holders of Voting Shares other than
any Related Person (such investment banking firm to be selected by two thirds of
the Continuing Directors, to be furnished with all information it reasonably
requests, and to be paid a reasonable fee by the Corporation for its services
upon receipt by the Corporation of such opinion).
(c) Amendments to this Article NINTH.
Notwithstanding any other provisions of these Articles of Incorporation or
the Bylaws of the Corporation (and notwithstanding the fact that some lesser
percentage may be specified by law, these Articles of Incorporation or the
Bylaws of the Corporation), and in addition to such additional vote of the
Preferred Stock as may be required by the provisions of any series thereof or by
applicable law, this Article NINTH shall not be amended, altered, changed or
repealed without:
(1) The affirmative vote of 80% of the Board of Directors and a majority
of the Continuing Directors, and
(2) The affirmative vote as to all stock held by the holders of 80% or
more of the outstanding Voting Shares, voting separately as a class.
(d) Amendments Recommended by Directors.
The provisions of paragraph (c) of this Article NINTH shall not apply to,
and the vote referred to therein shall not be required for, any amendment,
addition, alteration or repeal of any provision of this Article NINTH that is
recommended to the stockholders by the favorable vote of (1) a majority of the
Board of Directors, and (2) not less than 80% of the Continuing Directors, and
any such amendment, addition, alteration or repeal so recommended shall require
only the vote, if any, required under the applicable provisions of the Rhode
Island Business Corporation Law.
TENTH: (a) No director of the Corporation shall be liable to the Corporation
or to its stockholders for monetary damages for breach of the director's duty as
a director; provided, however, that this Article TENTH shall not eliminate or
limit the liability of a director: (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders; (ii) for acts or omissions not
in good faith or which
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involve intentional misconduct or a knowing violation of law; (iii) the
liability imposed pursuant to the provisions of R.I.G.L. Section 7-1.1-43 (as in
effect or as hereafter amended); or (iv) for any transaction from which the
director derived an improper personal benefit unless said transaction is
permitted by R.I.G.L. Section 7-1.1-37.1 (as in effect or as hereafter amended).
If the Rhode Island General Laws are amended after the adoption of this Article
TENTH to authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of each director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Rhode
Island General Laws, as so amended. Neither the amendment nor repeal of this
Article TENTH nor the adoption of any provision of these Articles of
Incorporation inconsistent with this Article TENTH shall eliminate or reduce the
effect of this Article TENTH in respect of any matter occurring, or any cause of
action, suit or claim that, but for this Article TENTH, would occur or arise,
prior to such amendment, repeal or adoption of an inconsistent provision.
(b) Notwithstanding any other provision of these Articles of Incorporation,
including Section EIGHTH (a), or the Bylaws of the Corporation (and
notwithstanding the fact that some lesser percentage may be specified by law,
these Articles of Incorporation or the Bylaws of the Corporation), and in
addition to such additional vote of the Preferred Stock as may be required by
the provisions of any series thereof or by applicable law, this Article TENTH
shall not be amended, altered, changed or repealed without:
(1) the affirmative vote of 80% of the Board of Directors and a majority
of Continuing Directors (as defined in Article SEVENTH of these Articles of
Incorporation), and
(2) the affirmative vote as to all stock held by the holders of 80% or
more of the outstanding Voting Shares (as defined in Article SEVENTH of
these Articles of Incorporation), voting separately as a class.
ELEVENTH: The Restated Articles of Incorporation correctly set forth without
change the corresponding provisions of the Articles of Incorporation as
heretofore amended, and supersede the original Articles of Incorporation and all
amendments thereto.
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EXHIBIT A
FLEET FINANCIAL GROUP, INC.
SERIES III 10.12% PERPETUAL PREFERRED STOCK
(a) Designation. The designation of the series of Preferred Stock shall be
"Series III 10.12% Perpetual Preferred Stock" (hereinafter called this "Series")
and the number of shares constituting this Series is One Million One Hundred
Thousand (1,100,000).
(b) Dividend Rate.
(1) The holders of shares of this Series shall be entitled to receive
dividends thereon at a rate of 10.12% per annum computed on the basis of an
issue price thereof of $100 per share, and no more, payable quarterly out of
the funds of the Corporation legally available for the payment of dividends.
Such dividends shall be cumulative from the date of original issue of such
shares and shall be payable, when, as and if declared by the Board, on March
1, June 1, September 1 and December 1 of each year, commencing September 1,
1991. Each such dividend shall be paid to the holders of record of shares of
this Series as they appear on the stock register of the Corporation on such
record date, not exceeding 30 days preceding the payment date thereof, as
shall be fixed by the Board. Dividends on account of arrears for any past
quarters may be declared and paid at any time, without reference to any
regular dividend payment date, to holders of record on such date, not
exceeding 45 days preceding the payment date thereof, as may be fixed by the
Board.
(2) No full dividends shall be declared or paid or set apart for payment
on the Preferred Stock of any series ranking, as to dividends, on a parity
with or junior to this Series for any period unless full cumulative
dividends have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payment on
this Series for all dividend payment periods terminating on or prior to the
date of payment of such full cumulative dividends. When dividends are not
paid in full, as aforesaid, upon the shares of this Series and any other
preferred stock ranking on a parity as to dividends with this Series, all
dividends declared upon shares of this Series and any other class or series
of preferred stock of the Corporation ranking on a parity as to dividends
with this Series shall be declared pro rata so that the amount of dividends
declared per share on this Series and such other preferred stock shall in
all cases bear to each other the same ratio that accrued dividends per share
on the shares of this Series and such other preferred stock bear to each
other. Holders of shares of this Series shall not be entitled to any
dividend, whether payable in cash, property or stocks, in excess of full
cumulative dividends, as herein provided, on this Series. No interest, or
sum of money in lieu of interest, shall be payable in respect of any
dividend payment or payments on this Series which may be in arrears.
(3) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior
to this Series as to dividends and upon liquidation and other than as
provided in paragraph (2) of this Section (b)) shall be declared or paid or
set aside for payment or other distribution declared or made upon the Common
Stock or upon any other stock ranking junior to or on a parity with this
Series as to dividends or upon liquidation, nor shall any Common Stock nor
any other stock of the Corporation ranking junior to or on a parity with
this Series as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such
stock) by the Corporation (except by conversion into or exchange for stock
of the Corporation ranking junior to this Series as to dividends and upon
liquidation) unless, in each case, the full cumulative dividends on all
outstanding shares of this Series shall have been paid for all past dividend
payment periods.
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(4) Dividends payable on this Series for any period, including the
period from the original issue of such shares until September 1, 1991, shall
be computed on the basis of a 360-day year consisting of twelve 30-day
months.
(c) Redemption.
(1) The shares of this Series shall not be redeemable prior to June 1,
1996. On and after June 1, 1996, the Corporation, at its option, may redeem
shares of this Series, as a whole or in part, at any time or from time to
time, at a redemption price per share as follows:
If redeemed during the twelve-month period beginning June 1, 1996-- $105.060 per
share
If redeemed during the twelve-month period beginning June 1, 1997-- $104.048 per
share
If redeemed during the twelve-month period beginning June 1, 1998-- $103.036 per
share
If redeemed during the twelve-month period beginning June 1, 1999-- $102.024 per
share
If redeemed during the twelve-month period beginning June 1, 2000-- $101.012 per
share
If redeemed at any time from and after June 1, 2001--$100.000 per share
plus, in each case, accrued and unpaid dividends thereon to the date fixed
for redemption.
(2) In the event that fewer than all the outstanding shares of this
Series are to be redeemed, the number of shares to be redeemed shall be
determined by the Board and the shares to be redeemed shall be determined by
lot or pro rata as may be determined by the Board or by any other method as
may be determined by the Board in its sole discretion to be equitable.
(3) In the event the Corporation shall redeem shares of this Series,
notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the
redemption date, to each holder of record of the shares to be redeemed, at
such holder's address as the same appears on the stock register of the
Corporation. Each such notice shall state: (i) the redemption date; (ii) the
number of shares of this Series to be redeemed and, if fewer than all the
shares held by such holder are to be redeemed, the number of such shares to
be redeemed from such holder; (iii) the redemption price; (iv) the place or
places where certificates for such shares are to be surrendered for payment
of the redemption price; and (v) that dividends on the shares to be redeemed
will cease to accrue on such redemption date.
(4) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price) dividends on the
shares of this Series so called for redemption shall cease to accrue, and
said shares shall no longer be deemed to be outstanding, and all rights of
the holders thereof as stockholders of the Corporation (except the right to
receive from the Corporation the redemption price) shall cease. Upon
surrender in accordance with said notice of the certificates for any shares
so redeemed (properly endorsed or assigned for transfer, if the Board shall
so require and the notice shall so state), such shares shall be redeemed by
the Corporation at the aforesaid redemption price. In case fewer than all
the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost
to the holder thereof.
(5) Notwithstanding the foregoing provisions of this Section (c), if any
dividends on this Series are in arrears, no shares of this Series shall be
redeemed unless all outstanding shares of this Series are simultaneously
redeemed, and the Corporation shall not purchase or otherwise acquire any
shares of this Series; provided, however, that the foregoing shall not
prevent the purchase or acquisition of shares of this Series pursuant to a
purchase or exchange offer made on the same terms to holders of all
outstanding shares of this Series.
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(d) Liquidation Rights.
(1) Upon the dissolution, liquidation or winding up of the Corporation,
the holders of the shares of this Series shall be entitled to receive and be
paid out of the assets of the Corporation available for distribution to its
stockholders, before any payment or distribution shall be made on the Common
Stock or on any other class of stock ranking junior to the shares of this
Series upon liquidation, the amount of $100 per share, plus a sum equal to
all dividends (whether or not earned or declared) on such shares accrued and
unpaid thereon to the date of final distribution.
(2) Neither the sale of all or substantially all the property or
business of the Corporation nor the merger or consolidation of the
Corporation into or with any other corporation or the merger or
consolidation of any other corporation into or with the Corporation, shall
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section (d).
(3) After the payment to the holders of the shares of this Series of the
full preferential amounts provided for in this Section (d), the holders of
this Series as such shall have no right or claim to any of the remaining
assets of the Corporation.
(4) In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to paragraph (1) of this Section (d), no such
distribution shall be made on account of any shares of any other class or
series of Preferred Stock ranking on a parity with the shares of this Series
upon such dissolution, liquidation or winding up unless proportionate
distributive amounts shall be paid on account of the shares of this Series,
ratably, in proportion to the full distributable amounts for which holders
of all such parity shares are respectively entitled upon such dissolution,
liquidation or winding up.
(e) Conversion or Exchange. The holders of shares of this Series shall not
have any rights herein to convert such shares into or exchange such shares for
shares of any other class or classes or of any other series of any class or
classes of capital stock of the Corporation.
(f) Voting. The shares of this Series shall not have any voting powers,
either general or special, except that:
(1) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the shares of this Series at the time outstanding, given
in person or by proxy, either in writing or by a vote at a meeting called
for the purpose at which the holders of shares of this Series shall vote
together as a separate class, shall be necessary for authorizing, effecting
or validating the amendment, alteration or repeal of any of the provisions
of the Articles of Incorporation or of any certificate amendatory thereof or
supplemental thereto (including any Certificate of the Voting Powers,
Designations, Preferences and Relative, Participating, Optional or Other
Special Rights, and the Qualifications, Limitations or Restrictions thereof,
or any similar document relating to any series of Preferred Stock) which
would adversely affect the preferences, rights, powers or privileges of this
Series;
(2) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the shares of this Series and all other series of
Preferred Stock ranking on a parity with shares of this Series, either as to
dividends or upon liquidation, at the time outstanding, given in person or
by proxy, either in writing or by a vote at a meeting called for the purpose
at which the holders of shares of this Series and such other series of
Preferred Stock shall vote together as a single class without regard to
series, shall be necessary for authorizing, effecting, increasing or
validating the creation, authorization or issue of any shares of any class
of stock of the Corporation ranking prior to the shares of this Series
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as to dividends or upon liquidation, or the reclassification of any
authorized stock of the Corporation into any such prior shares, or the
creation, authorization or issue of any obligation or security convertible
into or evidencing the right to purchase any such prior shares.
(3) If, at the time of any annual meeting of stockholders for the
election of directors, a default in preference dividends on any series of
the Preferred Stock or any other class or series of preferred stock of the
Corporation (other than the Corporation's Series II 6 1/2% Cumulative
Convertible Preferred Stock (the "Series II Preferred") and any other class
or series of the Corporation's preferred stock expressly entitled to elect
additional directors to the Board by a vote separate and distinct from the
vote provided for in this paragraph (3) ("Voting Preferred")) shall exist,
the number of directors constituting the Board shall be increased by two
(without duplication of any increase made pursuant to the terms of any other
class or series of the Corporation's preferred stock other than the Series
II Preferred and any Voting Preferred) and the holders of the Corporation's
preferred stock of all classes and series (other than the Series II
Preferred and any such Voting Preferred) shall have the right at such
meeting, voting together as a single class without regard to class or
series, to the exclusion of the holders of Common Stock, the Series II
Preferred and the Voting Preferred, to elect two directors of the
Corporation to fill such newly created directorships. Such right shall
continue until there are no dividends in arrears upon shares of any class or
series of the Corporation's preferred stock ranking prior to or on a parity
with shares of this Series as to dividends (other than the Series II
Preferred and any Voting Preferred). Each director elected by the holders of
shares of any series of the Preferred Stock or any other class or series of
the Corporation's preferred stock in an election provided for by this
paragraph (3) (herein called a "Preferred Director") shall continue to serve
as such director for the full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default in preference
dividends shall cease to exist. Any Preferred Director may be removed by,
and shall not be removed except by, the vote of the holders of record of the
outstanding shares of the Corporation's preferred stock entitled to have
originally voted for such director's election, voting together as a single
class without regard to class or series, at a meeting of the stockholders,
or of the holders of shares of the Corporation's preferred stock, called for
that purpose. So long as a default in any preference dividends on any series
of the Preferred Stock or any other class or series of preferred stock of
the Corporation shall exist (other then the Series II Preferred and any
Voting Preferred) (A) any vacancy in the office of a Preferred Director may
be filled (except as provided in the following clause (B)) by an instrument
in writing signed by the remaining Preferred Director and filed with the
Corporation and (B) in the case of the removal of any Preferred Director,
the vacancy may be filled by the vote of the holders of the outstanding
shares of the Corporation's preferred stock entitled to have originally
voted for the removed director's election, voting together as a single class
without regard to class or series, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid shall be deemed for all
purposes hereto to be a Preferred Director. Whenever the term of office of
the Preferred Directors shall end and a default in preference dividends
shall no longer exist, the number of directors constituting the Board shall
be reduced by two. For purposes hereof, a "default in preference dividends"
on any series of the Preferred Stock or any other class or series of
preferred stock of the Corporation shall be deemed to have occurred whenever
the amount of accrued dividends upon such class or series of the
Corporation's preferred stock shall be equivalent to six full quarterly
dividends or more, and, having so occurred, such default shall be deemed to
exist thereafter until, but only until, all accrued dividends on all such
shares of the Corporation's preferred stock of each and every series then
outstanding (other than the Series II Preferred, any Voting Preferred or
shares of any class or series ranking junior to shares of this Series as to
dividends) shall have been paid to the end of the last preceding quarterly
dividend period.
(g) Reacquired Shares. Shares of this Series which have been issued and
reacquired through redemption or purchase shall, upon compliance with an
applicable provision of the Rhode Island
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Business Corporation Act, have the status of authorized and unissued shares of
Preferred Stock and may be reissued, but only as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board.
(h) Relation to Existing Preferred Classes of Stock. Shares of this Series
are equal in rank and preference with all other series of the Preferred Stock
outstanding on the date of original issue of the shares of this Series and the
Preferred Stock with Cumulative and Adjustable Dividends, $20.00 par value, and
are senior in rank and preference to the Common Stock and the Cumulative
Participating Junior Preferred Stock of the Corporation.
(i) Relation to Other Preferred Classes of Stock. For purposes of this
resolution, any stock of any class or classes of the Corporation shall be deemed
to rank:
(1) prior to the shares of this Series, either as to dividends or
upon liquidation, if the holders of such class or classes shall be
entitled to the receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the Corporation, as the case
may be, in preference or priority to the holders of shares of this
Series;
(2) on a parity with shares of this Series, either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share or sinking fund
provisions, if any, be different from those of this Series, if the
holders of such stock shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in proportion to their respective
dividend rates or liquidation prices, without preference or priority, one
over the other, as between the holders of such stock and the holders of
shares of this Series; and
(3) junior to the shares of this Series, either as to dividends or
upon liquidation, if such class shall be Common Stock or if the holders
of shares of this Series shall be entitled to receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the holders
of shares of such class or classes.
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EXHIBIT B
FLEET FINANCIAL GROUP, INC.
SERIES IV 9.375% PERPETUAL PREFERRED STOCK
(a) Designation. The designation of the series of Preferred Stock shall be
"Series IV 9.375% Perpetual Preferred Stock" (hereinafter called this "Series")
and the number of shares constituting this Series is One Million (1,000,000).
(b) Dividend Rate.
(1) The holders of shares of this Series shall be entitled to receive
dividends thereon at a rate of 9.375% per annum computed on the basis of an
issue price thereof of $100 per share, and no more, payable quarterly out of
the funds of the Corporation legally available for the payment of dividends.
Such dividends shall be cumulative from the date of original issue of such
shares and shall be payable, when, as and if declared by the Board, on March
1, June 1, September 1 and December 1 of each year, commencing March 1,
1992. Each such dividend shall be paid to the holders of record of shares of
this Series as they appear on the stock register of the Corporation on such
record date, not exceeding 30 days preceding the payment date thereof, as
shall be fixed by the Board. Dividends on account of arrears for any past
quarters may be declared and paid at any time, without reference to any
regular dividend payment date, to holders of record on such date, not
exceeding 45 days preceding the payment date thereof, as may be fixed by the
Board.
(2) No full dividends shall be declared or paid or set apart for payment
on the Preferred Stock of any series ranking, as to dividends, on a parity
with or junior to this Series for any period unless full cumulative
dividends have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payment on
this Series for all dividend payment periods terminating on or prior to the
date of payment of such full cumulative dividends. When dividends are not
paid in full, as aforesaid, upon the shares of this Series and any other
preferred stock ranking on a parity as to dividends with this Series, all
dividends declared upon shares of this Series and any other class or series
of preferred stock of the Corporation ranking on a parity as to dividends
with this Series shall be declared pro rata so that the amount of dividends
declared per share on this Series and such other preferred stock shall in
all cases bear to each other the same ratio that accrued dividends per share
on the shares of this Series and such other preferred stock bear to each
other. Holders of shares of this Series shall not be entitled to any
dividend, whether payable in cash, property or stocks, in excess of full
cumulative dividends, as herein provided, on this Series. No interest, or
sum of money in lieu of interest, shall be payable in respect of any
dividend payment or payments on this Series which may be in arrears.
(3) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior
to this Series as to dividends and upon liquidation and other than as
provided in paragraph (2) of this Section (b)) shall be declared or paid or
set aside for payment or other distribution declared or made upon the Common
Stock or upon any other stock ranking junior to or on a parity with this
Series as to dividends or upon liquidation, nor shall any Common Stock nor
any other stock of the Corporation ranking junior to or on a parity with
this Series as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such
stock) by the Corporation (except by conversion into or exchange for stock
of the Corporation ranking junior to this Series as to dividends and upon
liquidation) unless, in each case, the full cumulative dividends on all
outstanding shares of this Series shall have been paid for all past dividend
payment periods.
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(4) Dividends payable on this Series for any period, including the
period from the original issue of such shares until March 1, 1992, shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
(c) Redemption.
(1) The shares of this Series shall not be redeemable prior to December
1, 1996. On and after December 1, 1996, the Corporation, at its option, may
redeem shares of this Series, in whole or in part, at any time or from time
to time, at a redemption price of $100 per share, plus accrued and unpaid
dividends thereon to the date fixed for redemption.
(2) In the event that fewer than all the outstanding shares of this
Series are to be redeemed, the number of shares to be redeemed shall be
determined by the Board and the shares to be redeemed shall be determined by
lot or pro rata as may be determined by the Board or by any other method as
may be determined by the Board in its sole discretion to be equitable.
(3) In the event the Corporation shall redeem shares of this Series,
notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the
redemption date, to each holder of record of the shares to be redeemed, at
such holder's address as the same appears on the stock register of the
Corporation. Each such notice shall state: (i) the redemption date; (ii) the
number of shares of this Series to be redeemed and, if fewer than all the
shares held by such holder are to be redeemed, the number of such shares to
be redeemed from such holder; (iii) the redemption price; (iv) the place or
places where certificates for such shares are to be surrendered for payment
of the redemption price; and (v) that dividends on the shares to be redeemed
will cease to accrue on such redemption date.
(4) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price) dividends on the
shares of this Series so called for redemption shall cease to accrue, and
said shares shall no longer be deemed to be outstanding, and all rights of
the holders thereof as stockholders of the Corporation (except the right to
receive from the Corporation the redemption price) shall cease. Upon
surrender in accordance with said notice of the certificates for any shares
so redeemed (properly endorsed or assigned for transfer, if the Board shall
so require and the notice shall so state), such shares shall be redeemed by
the Corporation at the aforesaid redemption price. In case fewer than all
the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost
to the holder thereof.
(5) Notwithstanding the foregoing provisions of this Section (c), if any
dividends on this Series are in arrears, no shares of this Series shall be
redeemed unless all outstanding shares of this Series are simultaneously
redeemed, and the Corporation shall not purchase or otherwise acquire any
shares of this Series; provided, however, that the foregoing shall not
prevent the purchase or acquisition of shares of this Series pursuant to a
purchase or exchange offer made on the same terms to holders of all
outstanding shares of this Series.
(d) Liquidation Rights.
(1) Upon the dissolution, liquidation or winding up of the Corporation,
the holders of the shares of this Series shall be entitled to receive and be
paid out of the assets of the Corporation available for distribution to its
stockholders, before any payment or distribution shall be made on the Common
Stock or on any other class of stock ranking junior to the shares of this
Series upon liquidation, the amount of $100 per share, plus a sum equal to
all dividends (whether or not earned or declared) on such shares accrued and
unpaid thereon to the date of final distribution.
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(2) Neither the sale of all or substantially all the property or
business of the Corporation nor the merger or consolidation of the
Corporation into or with any other corporation or the merger or
consolidation of any other corporation into or with the Corporation, shall
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section (d).
(3) After the payment to the holders of the shares of this Series of the
full preferential amounts provided for in this Section (d), the holders of
this Series as such shall have no right or claim to any of the remaining
assets of the Corporation.
(4) In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to paragraph (1) of this Section (d), no such
distribution shall be made on account of any shares of any other class or
series of Preferred Stock ranking on a parity with the shares of this Series
upon such dissolution, liquidation or winding up unless proportionate
distributive amounts shall be paid on account of the shares of this Series,
ratably, in proportion to the full distributable amounts for which holders
of all such parity shares are respectively entitled upon such dissolution,
liquidation or winding up.
(e) Conversion or Exchange. The holders of shares of this Series shall not
have any rights herein to convert such shares into or exchange such shares for
shares of any other class or classes or of any other series of any class or
classes of capital stock of the Corporation.
(f) Voting. The shares of this Series shall not have any voting powers,
either general or special, except that:
(1) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the shares of this Series at the time outstanding, given
in person or by proxy, either in writing or by a vote at a meeting called
for the purpose at which the holders of shares of this Series shall vote
together as a separate class, shall be necessary for authorizing, effecting
or validating the amendment, alteration or repeal of any of the provisions
of the Articles of Incorporation or of any certificate amendatory thereof or
supplemental thereto (including any Certificate of the Voting Powers,
Designations, Preferences and Relative, Participating, Optional or Other
Special Rights, and the Qualifications, Limitations or Restrictions thereof,
or any similar document relating to any series of Preferred Stock) which
would adversely affect the preferences, rights, powers or privileges of this
Series;
(2) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the shares of this Series and all other series of
Preferred Stock ranking on a parity with shares of this Series, either as to
dividends or upon liquidation, at the time outstanding, given in person or
by proxy, either in writing or by a vote at a meeting called for the purpose
at which the holders of shares of this Series and such other series of
Preferred Stock shall vote together as a single class without regard to
series, shall be necessary for authorizing, effecting, increasing or
validating the creation, authorization or issue of any shares of any class
of stock of the Corporation ranking prior to the shares of this Series as to
dividends or upon liquidation, or the reclassification of any authorized
stock of the Corporation into any such prior shares, or the creation,
authorization or issue of any obligation or security convertible into or
evidencing the right to purchase any such prior shares.
(3) If, at the time of any annual meeting of stockholders for the
election of directors, a default in preference dividends on any series of
the Preferred Stock or any other class or series of preferred stock of the
Corporation (other than the Corporation's Series II 6 1/2% Cumulative
Convertible Preferred Stock (the "Series II Preferred") and any other class
or series of the Corporation's preferred stock expressly entitled to elect
additional directors to the Board by a vote separate and
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distinct from the vote provided for in this paragraph (3) ("Voting
Preferred")) shall exist, the number of directors constituting the Board
shall be increased by two (without duplication of any increase made pursuant
to the terms of any other class or series of the Corporation's preferred
stock other than the Series II Preferred and any Voting Preferred) and the
holders of the Corporation's preferred stock of all classes and series
(other than the Series II Preferred and any such Voting Preferred) shall
have the right at such meeting, voting together as a single class without
regard to class or series, to the exclusion of the holders of Common Stock,
the Series II Preferred and the Voting Preferred, to elect two directors of
the Corporation to fill such newly created directorships. Such right shall
continue until there are no dividends in arrears upon shares of any class or
series of the Corporation's preferred stock ranking prior to or on a parity
with shares of this Series as to dividends (other than the Series II
Preferred and any Voting Preferred). Each director elected by the holders of
shares of any series of the Preferred Stock or any other class or series of
the Corporation's preferred stock in an election provided for by this
paragraph (3) (herein called a "Preferred Director") shall continue to serve
as such director for the full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default in preference
dividends shall cease to exist. Any Preferred Director may be removed by,
and shall not be removed except by, the vote of the holders of record of the
outstanding shares of the Corporation's preferred stock entitled to have
originally voted for such director's election, voting together as a single
class without regard to class or series, at a meeting of the stockholders,
or of the holders of shares of the Corporation's preferred stock, called for
that purpose. So long as a default in any preference dividends on any series
of the Preferred Stock or any other class or series of preferred stock of
the Corporation shall exist (other than the Series II Preferred and any
Voting Preferred) (A) any vacancy in the office of a Preferred Director may
be filled (except as provided in the following clause (B)) by an instrument
in writing signed by the remaining Preferred Director and filed with the
Corporation and (B) in the case of the removal of any Preferred Director,
the vacancy may be filled by the vote of the holders of the outstanding
shares of the Corporation's preferred stock entitled to have originally
voted for the removed director's election, voting together as a single class
without regard to class or series, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid shall be deemed for all
purposes hereto to be a Preferred Director.
Whenever the term of office of the Preferred Directors shall end and a
default in preference dividends shall no longer exist, the number of
directors constituting the Board shall be reduced by two. For purposes
hereof, a "default in preference dividends" on any series of the Preferred
Stock or any other class or series of preferred stock of the Corporation
shall be deemed to have occurred whenever the amount of accrued dividends
upon such class or series of the Corporation's preferred stock shall be
equivalent to six full quarterly dividends or more, and, having so occurred,
such default shall be deemed to exist thereafter until, but only until, all
accrued dividends on all such shares of the Corporation's preferred stock of
each and every series then outstanding (other than the Series II Preferred,
any Voting Preferred or shares of any class or series ranking junior to
shares of this Series as to dividends) shall have been paid to the end of
the last preceding quarterly dividend period.
(g) Reacquired Shares. Shares of this Series which have been issued and
reacquired through redemption or purchase shall, upon compliance with an
applicable provision of the Rhode Island Business Corporation Act, have the
status of authorized and unissued shares of Preferred Stock and may be reissued
but only as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board.
(h) Relation to Existing Preferred Classes of Stock. Shares of this Series
are equal in rank and preference with all other series of the Preferred Stock
outstanding on the date of original issue of the shares of this Series and the
Preferred Stock with Cumulative and Adjustable Dividends, $20.00 par
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value, and are senior in rank and preference to the Common Stock and the
Cumulative Participating Junior Preferred Stock of the Corporation.
(i) Relation to Other Preferred Classes of Stock. For purposes of this
resolution, any stock of any class or classes of the Corporation shall be deemed
to rank:
(1) prior to the shares of this Series, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to
the receipt of dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may be, in
preference or priority to the holders of shares of this Series;
(2) on a parity with shares of this Series, either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share or sinking fund provisions, if
any, be different from those of this Series, if the holders of such stock
shall be entitled to the receipt of dividends or of amounts distributable
upon dissolution, liquidation or winding up of the Corporation, as the case
may be, in proportion to their respective dividend rates or liquidation
prices, without preference or priority, one over the other, as between the
holders of such stock and the holders of shares of this Series; and
(3) junior to the shares of this Series, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of shares
of this Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the holders of
shares of such class or classes.
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EXHIBIT C
FLEET FINANCIAL GROUP, INC.
DUAL CONVERTIBLE PREFERRED STOCK
(a) Designation. The designation of this series of Preferred Stock created
by this resolution shall be "Dual Convertible Preferred Stock" (the "Dual
Convertible Preferred Stock") consisting of 1,415,000 shares. The stated value
of the Dual Convertible Preferred Stock shall be $200 per share.
(b) Rank. The Dual Convertible Preferred Stock shall, with respect to
dividend rights and rights on liquidation, winding up and dissolution, rank
prior to the Common Stock, par value $1.00 per share (the "Common Stock"), of
the Corporation. (All equity securities of the Corporation to which the Dual
Convertible Preferred Stock ranks prior with respect to dividend rights and
rights on liquidation, winding up and dissolution, including the Common Stock,
are collectively referred to herein as the "Junior Securities", all equity
securities of the Corporation with which the Dual Convertible Preferred Stock
ranks on a parity with respect to dividend rights and rights on liquidation,
winding up and dissolution are collectively referred to herein as the "Parity
Securities" and all equity securities of the Corporation to which the Dual
Convertible Preferred Stock ranks junior, whether with respect to dividends or
upon liquidation, dissolution, winding-up or otherwise, are collectively
referred to herein as the "Senior Securities.") The Dual Convertible Preferred
Stock shall be subject to the creation of Junior Securities, Parity Securities
and Senior Securities, subject, in the case of Senior Securities, to obtaining
the approval of the holders of the shares of the Dual Convertible Preferred
Stock in accordance with paragraph (h).
(c) Dividends.
(i) The holders of the shares of Dual Convertible Preferred Stock shall
be entitled to receive, out of funds legally available for the payment of
dividends, cumulative dividends in an amount equal to 50% of the dividends
declared on the common stock, par value $.01 per share ("Holding Common
Stock"), of Fleet/Norstar Holding Company, Inc., a Rhode Island corporation
("Holding"), and its successor or assign; provided, however, that dividends
shall not become payable on the shares of the Dual Convertible Preferred
Stock until an aggregate of $15 million of dividends have been declared by
Holding and shall only become payable to the extent of dividends declared by
Holding in excess of such amount; and, provided further, that the amount of
such dividends shall be subject to reduction in accordance with paragraph
(f) (iv); and, provided further, that dividends shall not become payable on
the shares of the Dual Convertible Preferred Stock as a result of the
declaration of the Dividend Note (as hereinafter defined) or other amounts
payable as dividends by Holding to the Corporation pursuant to the Tax
Allocation Agreement (as hereinafter defined). Such dividends shall be
payable from time to time as declared by the Board (each of such dates being
a "dividend payment date"), in preference to dividends on the Junior
Securities. Such dividends shall be paid to the holders of record at the
close of business on the tenth business day immediately preceding each
dividend payment date (each of such dates being a "dividend payment record
date"). Each of such dividends shall be fully cumulative and shall accrue
without interest, until paid.
(ii) All dividends paid with respect to shares of the Dual Convertible
Preferred Stock pursuant to paragraph (c)(i) shall be paid pro rata to the
holders entitled thereto.
(iii) No full dividends shall be declared by the Board of Directors or
paid or set apart for payment by the Corporation on any Parity Securities
for any period unless full cumulative accrued dividends have been or
contemporaneously are declared and paid or declared and a sum set apart
sufficient for such payment on the Dual Convertible Preferred Stock. If any
dividends are not paid
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in full upon the shares of the Dual Convertible Preferred Stock and any
other Parity Securities, all dividends declared upon shares of the Dual
Convertible Preferred Stock and any other Parity Securities shall be
declared pro rata so that the amount of dividends declared per share of the
Dual Convertible Preferred Stock and such Parity Securities shall in all
cases bear to each other the same ratio that accrued dividends per share on
the Dual Convertible Preferred Stock and such Parity Securities bear to each
other. No interest, or sum of money in lieu of interest, shall be payable in
respect of any dividend payment or payments on the Dual Convertible
Preferred Stock or any other Parity Securities which may be in arrears. Any
dividend not paid pursuant to paragraph (c)(i) hereof or this paragraph
(c)(iii) shall be fully cumulative and shall accrue (whether or not
declared), without interest, as set forth in paragraph (c)(i) hereof.
(iv) (A) Holders of shares of the Dual Convertible Preferred Stock shall
be entitled to receive the dividends provided for in paragraph (c)(i) hereof
in preference to and in priority over any dividends upon any of the Junior
Securities.
(B) So long as any shares of the Dual Convertible Preferred Stock are
outstanding, the Board of Directors shall not declare, and the Corporation
shall not pay or set apart for payment, any dividend on any of the Junior
Securities or make any payment on account of, or set apart for payment money
for a sinking or other similar fund for, the repurchase, redemption or other
retirement of, any of the Junior Securities or Parity Securities or any
warrants, rights or options exercisable for or convertible into any of the
Junior Securities or Parity Securities, or make any distribution in respect
of the Junior Securities, either directly or indirectly, and whether in
cash, obligations or shares of the Corporation or other property (other than
distributions or dividends in Junior Securities to the holders of Junior
Securities), and shall not permit any corporation or other entity directly
or indirectly controlled by the Corporation to purchase or redeem any of the
Junior Securities or Parity Securities or any warrants, rights, calls or
options exercisable for or convertible into any of the Junior Securities or
Parity Securities unless prior to or concurrently with such declaration,
payment, setting apart for payment, repurchase, redemption or other
retirement or distribution, as the case may be, all accrued and unpaid
dividends on shares of the Dual Convertible Preferred Stock not paid on the
dates provided for in paragraph (c) (i) hereof shall have been or be paid;
provided, however, that the foregoing restriction shall not prohibit the
Corporation from redeeming the rights outstanding under that certain Rights
Agreement dated as of November 21, 1990, as amended, between the Corporation
and Fleet National Bank, for a redemption price not in excess of $.01 per
right.
(d) Payment in Liquidation.
(i) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holders of
shares of Dual Convertible Preferred Stock then outstanding shall be
entitled to be paid out of the assets of the Corporation available for
distribution to its shareholders an amount in cash equal to $200 for each
share outstanding, plus an amount in cash equal to all accrued but unpaid
dividends thereon to the date of liquidation, dissolution or winding up,
before any payment shall be made or any assets distributed to the holders of
any of the Junior Securities. If the assets of the Corporation are not
sufficient to pay in full the liquidation payments payable to the holders of
outstanding shares of the Dual Convertible Preferred Stock and any Parity
Securities, then the holders of all such shares shall share ratably in such
distribution of assets in accordance with the amount which would be payable
on such distribution if the amounts to which the holders of outstanding
shares of Dual Convertible Preferred Stock and the holders of outstanding
shares of such Parity Securities are entitled were paid in full.
(ii) For the purposes of this paragraph (d), neither the voluntary sale,
conveyance, lease, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or
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substantially all of the property or assets of the Corporation nor the
consolidation or merger of the Corporation with or into one or more other
corporations nor the consolidation or merger of one or more corporations
with or into the Corporation shall be deemed to be a voluntary or
involuntary liquidation, dissolution or winding up.
(e) Common Stock Conversion.
(i) Upon the terms and in the manner set forth in this paragraph (e) and
subject to the provisions for adjustment contained in paragraph (e) (vii),
(A) the shares of the Dual Convertible Preferred Stock shall be convertible,
in whole, but not in part, at the option of the holders thereof, at any time
after the date that is one year after the Issue Date (as hereinafter
defined) and (B) each share of the Dual Convertible Preferred Stock shall be
convertible, from time to time in part, after the date that is ten years
after the Issue Date, or such earlier date as provided in paragraph (e)(ii),
in either case, upon surrender to the Corporation of the certificates for
the shares to be converted, into a number of fully paid and nonassessable
shares of Common Stock equal to the aggregate stated value of the Dual
Convertible Preferred Stock to be converted divided by a conversion price
(the "Conversion Price") of $17.65. As used herein, the term "Issue Date"
shall mean the date of initial issuance of the Dual Convertible Preferred
Stock.
(ii) If, prior to the date that is one year after the Issue Date, there
occurs a sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the
property or assets of the Corporation or a consolidation or merger of the
Corporation with or into another corporation in which the shares of Common
Stock are converted into cash, assets or securities (other than shares of
Common Stock where the Corporation is the surviving corporation), the time
when the conversion rights of holders of shares of Dual Convertible
Preferred Stock into Common Stock become effective shall be accelerated and
such conversion rights shall be effective at and after a time at least 20
business days prior to the consummation of such transaction.
(iii) In order to convert shares of the Dual Convertible Preferred Stock
into Common Stock, (x) if such shares are converted in whole, but not in
part, pursuant to paragraph (e)(i)(A) above, there shall be delivered to the
Corporation written evidence reasonably satisfactory to it that the holders
of a majority of the shares of Dual Convertible Preferred Stock have elected
to convert the Dual Convertible Preferred Stock into Common Stock (the
"Common Stock Conversion Election"), and (y) if such shares are converted in
part, the holder thereof shall deliver a properly completed and duly
executed written notice of election to convert specifying the number (in
whole shares) of the shares of the Dual Convertible Preferred Stock to be
converted. In either case, each holder of shares of the Dual Convertible
Preferred Stock shall (A) deliver a written notice to the Corporation at its
principal office or at the office of the agency which may be maintained for
such purpose (the "Common Stock Conversion Agent") specifying the name or
names in which such holder wishes the certificate or certificates for shares
of Common Stock to be issued, (B) surrender the certificate for such shares
of Dual Convertible Preferred Stock to the Corporation or the Common Stock
Conversion Agent, accompanied, if so required by the Corporation or the
Common Stock Conversion Agent, by a written instrument or instruments of
transfer in form reasonably satisfactory to the Corporation or the Common
Stock Conversion Agent duly executed by the holder or his attorney duly
authorized in writing, and (C) pay any transfer or similar tax required by
paragraph (e)(ix).
(iv) (A) A "Common Stock Conversion" shall be deemed to have been
effected at the close of business on the date (the "Common Stock Conversion
Date") on which the Corporation or the Common Stock Conversion Agent shall
have received (x) the written notice of Common Stock Conversion Election or
(y) a notice of election to convert, a surrendered certificate, any required
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payments contemplated by paragraph (e) (ix) below, and all other required
documents. Immediately upon conversion, the rights of the holders of
converted shares of Dual Convertible Preferred Stock shall cease and the
persons entitled to receive the shares of Common Stock upon the conversion
of such shares of Dual Convertible Preferred Stock shall be treated for all
purposes as having become the beneficial owners of such shares of Common
Stock; provided, however, that such persons shall be entitled to receive
when paid dividends accrued on such shares of Dual Convertible Preferred
Stock to the last preceding dividend payment date and unpaid as of the date
of such conversion. A Common Stock Conversion shall be at the Conversion
Price in effect on such date, unless the stock transfer books of the
Corporation shall be closed on that date, in which event such person or
persons shall be deemed to have become such holder or holders of record of
the Common Stock at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be at
the Conversion Price in effect on the Common Stock Conversion Date.
(B) As promptly as practicable after the Common Stock Conversion Date,
the Corporation shall deliver or cause to be delivered at the office or
agency of the Common Stock Conversion Agent, to or upon the written order of
the holders of the surrendered shares of Dual Convertible Preferred Stock, a
certificate or certificates representing the number of fully paid and
nonassessable shares of Common Stock, with no personal liability attaching
to the ownership thereof, free of all taxes with respect to the issuance
thereof, liens, charges and security interests and not subject to any
preemptive rights, into which such shares of Dual Convertible Preferred
Stock have been converted in accordance with the provisions of this
paragraph (e), and any cash payable in respect of fractional shares as
provided in paragraph (e)(v).
(C) Upon the surrender of a certificate representing shares of Dual
Convertible Preferred Stock that is converted in part, the Corporation shall
issue or cause to be issued for the holder a new certificate representing
shares of Dual Convertible Preferred Stock equal in number to the
unconverted portion of the shares of Dual Convertible Preferred Stock
represented by the certificate so surrendered.
(v) No fractional shares or scrip representing fractional shares of
Common Stock shall be issued upon the conversion or redemption of any shares
of Dual Convertible Preferred Stock. Instead of any fractional interest in a
share of Common Stock which would otherwise be deliverable upon the
conversion or redemption of a share of Dual Convertible Preferred Stock, the
Corporation shall pay to the holder of such share (a "Fractional
Shareholder") an amount in cash (computed to the nearest cent) equal to the
current market price (as defined in paragraph (e)(vii)(E) below) thereof on
the business day next preceding the day of conversion or redemption. If more
than one share shall be surrendered for conversion or redemption at one time
by the same holder, the number of full shares of Common Stock issuable upon
conversion or redemption thereof shall be computed on the basis of the
aggregate stated value of the shares of Dual Convertible Preferred Stock so
surrendered.
(vi) The holders of shares of Dual Convertible Preferred Stock at the
close of business on a dividend payment record date shall be entitled to
receive the dividend payable on such shares on the corresponding dividend
payment date notwithstanding the conversion thereof or the Corporation's
default in payment of the dividend due on such dividend payment date.
(vii) The Conversion Price shall be subject to adjustment as follows:
(A) If the Corporation shall (1) declare or pay a dividend on its
outstanding Common Stock in shares of Common Stock or make a distribution
to holders of its Common Stock in shares of Common Stock, (2) subdivide
its outstanding shares of Common Stock into a greater number of shares of
Common Stock, (3) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (4) issue by reclassification
of its shares
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<PAGE>
of Common Stock other securities of the Corporation, then the Conversion
Price in effect immediately prior thereto shall be adjusted so that the
holder of any shares of Dual Convertible Preferred Stock thereafter
converted shall be entitled to receive the number and kind of shares of
Common Stock or other securities that the holder would have owned or have
been entitled to receive after the happening of any of the events
described above had such shares of Dual Convertible Preferred Stock been
converted immediately prior to the happening of such event or any record
date with respect thereto. An adjustment made pursuant to this paragraph
(e)(vii)(A) shall become effective on the date of the dividend payment,
subdivision, combination or issuance retroactive to the record date with
respect thereto, if any, for such event. Such adjustment shall be made
successively.
(B) If the Corporation shall issue to all holders of its Common Stock
rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase shares of Common Stock
at a price per share that is lower than the then current market price per
share of Common Stock (as defined in paragraph (e)(vii)(E) below), then
the Conversion Price shall be adjusted in accordance with the following
formula:
(N x P)
0 + -------
(M)
AC = C x -------------
0 + N
where:
<TABLE>
<S> <C> <C>
AC = the adjusted Conversion Price.
C = the current Conversion Price.
0 = the number of shares of Common Stock outstanding on the
record date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock on the
record date.
</TABLE>
The adjustment shall be made successively whenever any such rights,
options, warrants or convertible or exchangeable securities are issued, and
shall become effective immediately after the record date for the
determination of shareholders entitled to receive the rights, options,
warrants or convertible or exchangeable securities.
(C) Upon the expiration of any rights, options, warrants or convertible
or exchangeable securities issued by the Corporation to all holders of its
Common Stock which caused an adjustment to the Conversion Price pursuant to
paragraph (e) (vii) (B), if any thereof shall not have been exercised, then
the Conversion Price shall be increased by the amount of the initial
adjustment of the Conversion Price pursuant to paragraph (e) (vii) (B) in
respect of such expired rights, options, warrants or convertible or
exchangeable securities.
(D) If the Corporation shall distribute to all holders of its
outstanding Common Stock any shares of capital stock of the Corporation
(other than Common Stock) or evidences of indebtedness or assets (excluding
ordinary cash dividends and dividends or distributions referred to in
paragraphs (e) (vii) (A) and (B) above) or rights or warrants to subscribe
for or purchase any of its securities (excluding those referred to in
paragraph (e) (vii) (B) above), (any of the foregoing being hereinafter in
this paragraph (e) (vii) (D) called the "Securities or Assets"), then in
each such case, unless the Corporation elects to reserve shares or other
units of such Securities or Assets for distribution to the holders of the
Dual Convertible Preferred Stock upon the conversion of the shares of Dual
Convertible Preferred Stock so that any such holder converting shares of
Dual Convertible Preferred Stock will receive upon such conversion, in
addition to the shares of the Common Stock to which such holder is entitled,
the amount and kind of such Securities or Assets which such holder would
have received if such holder had, immediately prior to the record date for
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<PAGE>
the distribution of the Securities or Assets, converted its shares of Dual
Convertible Preferred Stock into Common Stock, the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to the date of such
distribution by a fraction of which the numerator shall be the current
market price per share (as defined in paragraph (e) (vii) (E) below) of the
Common Stock on the record date mentioned below less the then fair market
value (as determined by the Board in good faith) of the portion of the
capital stock or assets or evidences of indebtedness so distributed or of
such rights or warrants applicable to one share of Common Stock, and of
which the denominator shall be the current market price per share of the
Common Stock on such record date; provided, however, that if the then fair
market value (as so determined) of the portion of the Securities or Assets
so distributed applicable to one share of Common Stock is equal to or
greater than the current market price per share of the Common Stock on the
record date mentioned above, in lieu of the foregoing adjustment, adequate
provision shall be made so that each holder of shares of the Dual
Convertible Preferred Stock shall have the right to receive the amount and
kind of Securities and Assets such holder would have received had such
holder converted each such share of the Dual Convertible Preferred Stock
immediately prior to the record date for the distribution of the Securities
or Assets. Such adjustment shall become effective immediately after the
record date for the determination of shareholders entitled to receive such
distribution.
(E) For the purposes of any computation under paragraph (e) (vii), and
for the purposes of paragraphs (e) (v) and (g)(ii), the current market price
per share of Common Stock at any date shall be deemed to be the average of
the daily closing prices for the 20 consecutive trading days commencing on
the 30th trading day prior to the date in question. The closing price for
each day shall be (i) if the Common Stock is listed or admitted to trading
on a national securities exchange, the closing price on the New York Stock
Exchange Consolidated Tape (or any successor composite tape reporting
transactions on national securities exchanges) or, if such a composite tape
shall not be in use or shall not report transactions in the Common Stock,
the last reported sales price regular way on the principal national
securities exchange on which the Common Stock is listed or admitted to
trading (which shall be the national securities exchange on which the
greatest number of shares of Common Stock has been traded during such 20
consecutive trading days), or, if there is no transaction on any such day in
any such situation, the mean of the bid and asked prices on such day or,
(ii) if the Common Stock is not listed or admitted to trading on any such
exchange, the closing price, if reported, or, if the closing price is not
reported, the average of the closing bid and asked prices as reported by the
National Association of Securities Dealers Automated Quotation System
("NASDAQ") or, (iii) if bid and asked prices for the Common Stock on each
such day shall not have been reported through NASDAQ, the average of the bid
and asked prices for such date as furnished by any three New York Stock
Exchange member firms regularly making a market in the Common Stock and not
affiliated with the Corporation selected for such purpose by the Board or,
(iv) if no such quotations are available, the fair market value of the
Common Stock as determined by a New York Stock Exchange member firm
regularly making a market in the Common Stock selected for such purpose by
the Board.
(F) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% of such
price; provided, however, that any adjustments which by reason of this
paragraph (e) (vii) (F) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under
this paragraph (e) (vii) shall be made to the nearest one hundredth of a
cent or to the nearest one-hundredth of a share, as the case may be.
(G) If the Corporation shall be a party to any transaction, including
without limitation a merger, consolidation, sale of all or substantially all
of the Corporation's assets, liquidation or recapitalization of the Common
Stock (each of the foregoing being referred to as a "Transaction"), in each
case (except in the case of a Common Stock Fundamental Change (as
hereinafter defined))
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<PAGE>
as a result of which shares of Common Stock shall be converted into the
right to receive stock, securities or other property (including cash or any
combination thereof), in addition to the right to exchange the Dual
Convertible Preferred Stock for Holding Common Stock, which shall survive
the consummation of any such Transaction, each share of Dual Convertible
Preferred Stock shall thereafter be convertible into the kind and amount of
shares of stock and other securities and property receivable (including
cash) upon the consummation of such Transaction by a holder of that number
of shares of Common Stock into which one share of Dual Convertible Preferred
Stock was convertible immediately prior to such Transaction. The Corporation
shall not be a party to any Transaction unless the terms of such Transaction
are consistent with the provisions of this paragraph (e) (vii) (G) and it
shall not consent or agree to the occurrence of any Transaction until the
corporation has entered into an agreement with the successor or purchasing
entity, as the case may be, for the benefit of the holders of the Dual
Convertible Preferred Stock, which shall contain provisions (i) enabling the
holders of the Dual Convertible Preferred Stock to convert into the
consideration received by holders of Common Stock at the Conversion Price
immediately after such Transaction and (ii) acknowledging the right of the
Dual Convertible Preferred Stock to be exchanged for Holding Common Stock
and assuming any obligations with respect thereto. The provisions of this
paragraph (e) (vii) (G) shall similarly apply to successive Transactions.
(H) In the event of a Common Stock Fundamental Change, in addition to
the right to exchange the Dual Convertible Preferred Stock for Holding
Common Stock, which shall survive the consummation of any such Common Stock
Fundamental Change, each share of Dual Convertible Preferred Stock shall be
convertible into common stock of the kind received by holders of Common
Stock as the result of such Common Stock Fundamental Change. The Conversion
Price immediately following such Common Stock Fundamental Change shall be
the Conversion Price in effect immediately prior to such Common Stock
Fundamental Change multiplied by a fraction, the numerator of which is the
Purchaser Stock Price (as hereinafter defined) and the denominator of which
is the Applicable Price (as hereinafter defined). The Corporation shall not
consent or agree to the occurrence of any Common Stock Fundamental Change
until the Corporation has entered into an agreement with the successor or
purchasing entity, as the case may be, for the benefit of the holders of the
Dual Convertible Preferred Stock, which shall contain provisions (i)
enabling the holders of the Dual Convertible Preferred Stock to convert into
the consideration received by holders of Common Stock at the Conversion
Price immediately after such Fundamental Change and (ii) acknowledging the
right of the Dual Convertible Preferred Stock to be exchanged for Holding
Common Stock and assuming any obligations with respect thereto. The
provisions of this paragraph (e)(vii)(H) shall similarly apply to successive
Common Stock Fundamental Changes.
(I) As used herein:
(1) The term "Applicable Price" means the current market price for
one share of the Common Stock (determined in accordance with paragraph
(e)(vii)(E)) on the record date for the determination of the holders of
Common Stock entitled to receive common stock in connection with such
Common Stock Fundamental Change, or, if there is no such record date, on
the date upon which the holders of Common Stock shall have the right to
receive such common stock.
(2) The term "Common Stock Fundamental Change" shall mean the
occurrence of any transaction or event in connection with which all or
substantially all the Common Stock shall be exchanged for, converted
into, acquired for or shall constitute solely the right to receive common
stock that, for the ten consecutive trading days immediately prior to
such Common Stock Fundamental Change, has been admitted for listing on a
national securities exchange or quoted on the National Market System of
NASDAQ (whether by means of an exchange order, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise).
C-7
<PAGE>
(3) The term "Purchaser Stock Price" shall mean, with respect to any
Common Stock Fundamental Change, the current market price for one share
of the common stock received by holders of Common Stock in such Common
Stock Fundamental Change (determined in accordance with paragraph
(e)(vii)(E) as if such paragraph were applicable to such common stock) on
the record date for the determination of the holders of Common Stock
entitled to receive such common stock or, if there is no such record
date, on the date upon which the holders of Common Stock shall have the
right to receive such common stock.
(J) For the purposes of this paragraph (e)(vii) and paragraph (e)(x),
the term "shares of Common Stock" shall mean (i) the class of stock
designated as the Common Stock of the Corporation at the date hereof or (ii)
any other class of stock resulting from successive changes or
reclassifications of such shares consisting solely of changes in par value,
or from no par value to par value. If at any time, as a result of an
adjustment made pursuant to paragraphs (e) (vii) (A), (D), (G) or (H) above,
the holders of Dual Convertible Preferred Stock shall become entitled to
receive any securities other than shares of Common Stock, thereafter the
number of such other securities so issuable upon conversion of the shares of
Dual Convertible Preferred Stock shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Dual Convertible Preferred Stock
contained in this paragraph (e) (vii).
(K) Notwithstanding the foregoing, in any case which this paragraph (e)
(vii) provides that an adjustment shall become effective immediately after a
record date for an event, the Corporation may defer until the occurrence of
such event (i) issuing to the holder of any share of Dual Convertible
Preferred Stock converted after such record date and before the occurrence
of such event the additional shares of Common Stock issuable upon such
conversion before giving effect to such adjustment and (ii) paying to such
holder any amount in cash in lieu of any fraction pursuant to paragraph
(e)(v).
(L) If the Corporation shall take any action affecting the Common Stock,
other than action described in this paragraph (e) (vii), which in the
opinion of the Board would materially adversely affect the conversion rights
of the holders of the shares of Dual Convertible Preferred Stock, the
Conversion Price for the Dual Convertible Preferred Stock may be adjusted,
to the extent permitted by law, in such manner, if any, and at such time, as
the Board may determine in good faith to be equitable in the circumstances.
Failure of the Board to provide for any such adjustment prior to the
effective date of any such action by the Corporation affecting the Common
Stock shall be evidence that such Board has determined that it is equitable
to make no adjustments in the circumstances.
(viii) Whenever the Conversion Price is adjusted as herein provided, the
Chief Financial Officer of the Corporation shall compute the adjusted
Conversion Price in accordance with the foregoing provisions and shall
prepare a certificate setting forth such adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is based.
A copy of such certificate shall be filed promptly with the Common Stock
Conversion Agent. Promptly after delivery of such certificate, the
Corporation shall prepare a notice of such adjustment of the Conversion
Price setting forth the adjusted Conversion Price and the date on which such
adjustment becomes effective and shall mail such notice of such adjustment
of the Conversion Price to the holder of each share of Dual Convertible
Preferred Stock at his last address as shown on the stock books of the
Corporation.
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<PAGE>
(ix) The Corporation will pay any and all documentary, stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock on the conversion of shares of Dual Convertible
Preferred Stock pursuant to this paragraph (e); provided, however, that the
Corporation shall not be required to pay any tax which may be payable in
respect of any registration or transfer involved in the issue or delivery of
shares of Common Stock in a name other than that of the registered holder of
Dual Convertible Preferred Stock converted or to be converted, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation, that such tax has been
paid.
(x) (A) The Corporation shall at all times reserve and keep available,
free from all liens, charges and security interests and not subject to any
preemptive rights, out of the aggregate of its authorized but unissued
Common Stock or its issued Common Stock held in its treasury, or both, for
the purpose of effecting the conversion of the Dual Convertible Preferred
Stock, the full number of shares of Common Stock then deliverable upon the
conversion of all outstanding shares of the Dual Convertible Preferred
Stock.
(B) Before taking any action which would cause an adjustment reducing
the Conversion Price below the then par value (if any) of the Common Stock
issuable upon conversion of the Dual Convertible Preferred Stock, the
Corporation will take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly and legally
issue fully paid and nonassessable shares of such Common Stock at such
adjusted Conversion Price.
(xi) If (A) the Corporation shall declare a dividend on its outstanding
Common Stock (excluding ordinary cash dividends) or make a distribution to
holders of its Common Stock; (B) the Corporation shall authorize the
granting to the holders of the Common Stock of rights, options, warrants or
convertible or exchangeable securities containing the right to subscribe for
or purchase any shares of Common Stock or any of its securities; (C) there
shall be any reclassification of the Common Stock or any consolidation or
merger to which the Corporation is a party and for which approval of any
shareholders of the Corporation is required, or the sale or transfer of all
or substantially all of the assets of the Corporation; or (D) there shall be
any Common Stock Fundamental Change; then the Corporation shall cause to be
mailed to the holders of shares of the Dual Convertible Preferred Stock at
their addresses as shown on the stock books of the Corporation, as promptly
as possible, but at least 15 days, prior to the applicable date hereinafter
specified, a notice stating (l) the date on which a record is to be taken
for the purpose of such dividend or distribution, or, if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend or distribution are to be determined or (2) the
date on which such reclassification, consolidation, merger, sale, transfer
or Common Stock Fundamental Change is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall
be entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger,
sale, transfer or Common Stock Fundamental Change.
(f) Holding Exchange.
(i) Upon the terms and in the manner set forth in this paragraph (f),
the shares of Dual Convertible Preferred Stock shall be exchangeable, in
whole, but not in part, at the option of the holders thereof, upon surrender
to the Corporation of the certificates representing such shares of Dual
Convertible Preferred Stock, for a number of fully paid and nonassessable
shares of Holding Common Stock equal to 50% of the shares of Holding Common
Stock on a fully diluted basis on the Holding Exchange Date (as hereinafter
defined).
(ii) On the Issue Date, all of the shares of Dual Convertible Preferred
Stock will be issued to one or more limited partnerships (the
"Partnerships"), for which Kohlberg Kravis Roberts & Co. or one of its
affiliates acts as sole general partner. The Partnerships shall distribute
all shares of
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<PAGE>
Dual Convertible Preferred Stock then owned by the Partnerships to the
partners thereof (the "Distribution") upon the earlier to occur of (A) the
date of the Automatic Early Distribution (as hereinafter defined) or (B) the
date that is six years after the Issue Date, unless the Partnerships shall
have received the consent of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board") to an alternative date on which to
effect the Distribution (which shall not be earlier than the date that is
four years after the Issue Date). The Partnerships shall promptly notify the
Corporation of the Distribution.
(iii) The shares of Dual Convertible Preferred Stock shall be
exchangeable for Holding Common Stock, in whole, but not in part, in
accordance with this paragraph (f), (A) at any time after the Automatic
Early Distribution shall have been effected and before the date that is ten
years after the Issue Date, or (B) from time to time after the date that is
(x) four years after the Issue Date or at any time after such date, if the
Partnerships do not own any shares of Dual Convertible Preferred Stock on
any such date and before the date that is ten years after the Issue Date, or
(y) the date that the Distribution shall have been effected, which shall be
six years after the Issue Date unless the Partnerships shall have received
the consent of the Federal Reserve Board to an alternative date on which to
effect the Distribution (which shall not be earlier than the date that is
four years after the Issue Date) and before the date that is ten years after
the Issue Date (the period of time set forth in either clause (x) or (y) of
this paragraph (f)(iii)(B) is referred to herein as the "Exchange Period").
(iv) At any time and from time to time during the Exchange Period, the
holders of a majority of the shares of the Dual Convertible Preferred Stock
shall have the right to have an independent nationally recognized investment
banking firm render an opinion (an "Appraisal") of the fair price for all
the outstanding shares of Holding Common Stock as if all such shares were to
be sold to a third party in their entirety reflecting a full control premium
(the "Appraised Price"). The fees and expenses of such investment banking
firm shall be paid by the Corporation. The Corporation shall be entitled to
reduce the amount of dividends that would otherwise be payable on the Dual
Convertible Preferred Stock pursuant to paragraph (c) (i) by the amount of
such fees and expenses paid by the Corporation. The investment banking firm
that performs each Appraisal shall be selected by the Corporation but shall
be reasonably acceptable to the holders of a majority of the shares of the
Dual Convertible Preferred Stock. The holders of a majority of the shares of
the Dual Convertible Preferred Stock shall have 30 days to accept or reject
the Appraised Price set by any Appraisal. The Dual Convertible Preferred
Stock will become exchangeable for Holding Common Stock for a period of 90
days commencing on the date that is six months after the written acceptance
by the holders of a majority of the shares of the Dual Convertible Preferred
Stock of the Appraised Price set by an Appraisal. If the holders of the Dual
Convertible Preferred Stock do not elect to exchange their shares of the
Dual Convertible Preferred Stock for Holding Common Stock during any such
90-day period, in addition to their other rights hereunder, the holders
shall be entitled to have additional Appraisals rendered and to otherwise
comply with the requirements hereof to have the Dual Convertible Preferred
Stock again become exchangeable for Holding Common Stock.
(v) The right to exchange the Dual Convertible Preferred Stock for
Holding Common Stock may also be exercised at any time on or after the 60th
day after the Corporation shall have given notice to the holders of the
shares of the Dual Convertible Preferred Stock that the Corporation's
consolidated Tier 1 capital leverage ratio, based on the rules and
regulations of the Federal Reserve Board as currently in effect (using
year-end 1992 standards) as disclosed in any report of condition filed by
the Corporation with any bank regulatory authority, adjusted to include the
Corporation's goodwill existing at the Issue Date, shall be less than 3%.
The Corporation shall give the holders of the shares of the Dual Convertible
Preferred Stock immediate notice if its consolidated Tier 1 capital leverage
ratio as reported in any such regulatory filing, adjusted to include its
goodwill existing at the Issue Date, falls below 3%. Prior to the fifth day
after the Partnerships shall have
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<PAGE>
received such notice, unless the Partnerships shall have received the
consent of the Federal Reserve Board to an extension of such date, the
Partnerships shall effect the Distribution with respect to all shares of
Dual Convertible Preferred Stock then owned by the Partnerships (the
"Automatic Early Distribution"). The Corporation shall cause an Appraisal to
be prepared at the Corporation's expense and delivered to the holders of the
shares of the Dual Convertible Preferred Stock within 20 days after the
Corporation's notice of capital deficiency. The holders of a majority of the
shares of the Dual Convertible Preferred Stock shall have 20 days to accept
or reject such Appraisal. If such Appraisal is accepted, the Corporation may
redeem at its option, with the prior approval of the Federal Reserve Board,
the Dual Convertible Preferred Stock in whole, but not in part, for the
Gross Redemption Price, determined and payable in accordance with paragraph
(g) below.
(vi) In order to exchange shares of the Dual Convertible Preferred Stock
into Holding Common Stock, there shall be delivered to the Corporation
written evidence reasonably satisfactory to it that the holders of a
majority of the shares of Dual Convertible Preferred Stock have elected to
exchange the Dual Convertible Preferred Stock into Holding Common Stock (the
"Holding Exchange Election"), which election shall be binding on all the
holders of the shares of the Dual Convertible Preferred Stock. Each holder
of shares of the Dual Convertible Preferred Stock shall (A) deliver a
written notice of the name or names in which such holder wishes the
certificate or certificates for shares of Holding Common Stock to be issued
to the Corporation at its principal office or at the office of the agency
which may be maintained for such purpose (the "Holding Exchange Agent"), (B)
surrender the certificate for such shares of Dual Convertible Preferred
Stock to the Corporation or the Holding Exchange Agent, accompanied, if so
required by the Corporation or the Holding Exchange Agent, by a written
instrument or instruments of transfer in form reasonably satisfactory to the
Corporation or the Holding Exchange Agent duly executed by the holder or his
attorney duly authorized in writing, and (C) pay any transfer or similar tax
required by paragraph (f)(x)(A).
(vii) (A) The "Holding Exchange" shall be deemed to have been effected
at the close of business on the fifth business day after the date (the
"Holding Exchange Date") on which the Corporation shall have received the
written notice of the Holding Exchange Election. Immediately upon exchange,
the rights of all the holders of Dual Convertible Preferred Stock shall
cease and the persons entitled to receive the shares of Holding Common Stock
upon the exchange of Dual Convertible Preferred Stock shall be treated for
all purposes as having become the beneficial owners of such shares of
Holding Common Stock; provided, however, that such persons shall be entitled
to receive when paid dividends accrued on such shares of Dual Convertible
Preferred Stock to the last preceding dividend payment date and unpaid as of
the date of such exchange.
(B) As promptly as practicable after the Holding Exchange Date subject
to the provisions of paragraph (f) (x), the Corporation shall deliver or
cause to be delivered at the office or agency of the Holding Exchange Agent,
to or upon the written order of the holders of the surrendered shares of
Dual Convertible Preferred Stock, a certificate or certificates representing
the number of fully paid and nonassessable shares of Holding Common Stock
into which such shares of Dual Convertible Preferred Stock have been
exchanged in accordance with the provisions of this paragraph (f).
(viii) No fractional shares or scrip representing fractional shares of
Holding Common Stock shall be issued upon the exchange of the Dual
Convertible Preferred Stock for Holding Common stock. The Corporation shall
cause Holding to effect a stock split or reverse stock split so that no
fractional shares become deliverable pursuant to the Holding Exchange.
(ix) The holders of shares of Dual Convertible Preferred Stock at the
close of business on a dividend payment record date shall be entitled to
receive the dividend payable on such shares on the corresponding dividend
payment date notwithstanding the exchange thereof or the Corporation's
default in payment of the dividend due on such dividend payment date.
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(x) (A) The Corporation will pay any and all documentary, stamp or
similar issue or transfer taxes payable in respect of the issue or delivery
of shares of Holding Common Stock on the exchange of shares of Dual
Convertible Preferred Stock pursuant to this paragraph (f); provided,
however, that the Corporation shall not be required to pay any tax which may
be payable in respect of any registration or transfer involved in the issue
or delivery of shares of Holding Common Stock in a name other than that of
the registered holder or Dual Convertible Preferred Stock exchanged or to be
exchanged, and no such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Corporation the amount of any
such tax or has established, to the satisfaction of the Corporation, that
such tax has been paid.
(B) If the Board of Directors of Holding determines in good faith that
(i) the declaration and payment of the dividend note (the "Dividend Note")
described in Section 3 of the Supplemental Tax Allocation Agreement between
the Corporation and Holding, dated the Issue Date (the "Tax Allocation
Agreement"), would cause Holding to be unable to comply with regulatory
capital maintenance requirements and policies then in effect or with safe
and sound banking practices or (ii) Holding will have insufficient cash to
pay the Dividend Note, then the Corporation may condition the issuance of
Holding Common Stock to any holder of the Dual Convertible Preferred Stock
upon the receipt of a cash capital contribution (a "Capital Contribution")
from such holder to Holding concurrently with such issuance equal to the
product of a fraction, the numerator of which equals the number of shares of
Holding Common Stock for which such holder's Dual Convertible Preferred
Stock may be exchanged and the denominator of which equals the total number
of shares of Holding Common Stock that will be outstanding (on a fully
diluted basis) after all of the shares of Dual Convertible Preferred Stock
have been exchanged, multiplied by the amount of the Dividend Note and, in
such event, the declaration and payment of the Dividend Note to the
Corporation will be conditioned upon Holding's receipt of a Capital
Contribution from the Corporation equal to 50% of the amount of the Dividend
Note. Except as provided in this paragraph (f) (x), the holders of the Dual
Convertible Preferred Stock shall have no obligation to make any capital
contribution, including, without limitation, with respect to the obligations
of Holding to the Corporation under the Tax Allocation Agreement.
(C) The Board of Directors of Holding shall give written notice of its
determination to require a Capital Contribution to each holder of record of
the shares of the Dual Convertible Preferred Stock, which notice shall state
the amount of such holder's required Capital Contribution and the
consequences of failing to make such Capital Contribution. If any holder of
the Dual Convertible Preferred Stock fails to make such holder's Capital
Contribution within 90 days of such notice, the shares of Holding Common
Stock for which such holder's shares of the Dual Convertible Preferred Stock
may be exchanged (the "Escrowed Shares") shall be deposited by the
Corporation in escrow with an independent trustee (the "Trustee") that is
not affiliated with the Corporation. The Trustee shall be empowered and
directed to sell such of the Escrowed Shares as will be sufficient to
realize net proceeds (after the payment of the fees and expenses of the
Trustee) equal to such holder's required Capital Contribution, together with
interest on such amount at the prime rate then in effect at the
Corporation's banking subsidiaries commencing on the 90th day after the
notice of such Capital Contribution ("Interest"). The holder of the shares
of the Dual Convertible Preferred Stock to which such Escrowed Shares relate
may obtain the release of such Escrowed Shares from the Trustee at any time
prior to the Trustee's disposition thereof by paying the amount of the
Capital Contribution, together with Interest thereon, to the Trustee. The
Trustee shall have the right to sell such of the Escrowed Shares in a public
offering or in one or more private sales as will result in the receipt of
sufficient proceeds, after the payment of the fees and expenses of the
Trustee therefrom, to pay the required Capital Contribution, together with
Interest thereon, with respect to such Escrowed Shares. The Trustee shall
use its best efforts to obtain the highest price for the Escrowed Shares to
be sold. The Trustee shall not be prohibited from selling, and shall be
specifically authorized to sell, any of the Escrowed Shares to the
Corporation provided that the Corporation purchases such shares for a
consideration at least equal to the book value thereof.
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Upon the receipt of sufficient proceeds to pay the required Capital
Contribution, together with Interest thereon, the balance of such Escrowed
Shares will be released to the holder of the Dual Convertible Preferred
Stock to which such Escrowed Shares relate in exchange for the Dual
Convertible Preferred Stock held by such holder.
(g) Optional Redemption.
(i) The Corporation may redeem at its option, with the prior approval of
the Federal Reserve Board, the Dual Convertible Preferred Stock, in whole,
but not in part, at any time during the period after the acceptance of any
Appraisal by the holders of a majority of the shares of Dual Convertible
Preferred Stock but before the 90-day period following the acceptance of any
Appraisal during which the Dual Convertible Preferred Stock becomes
exchangeable for Holding Common Stock in accordance with paragraph (f) (iv)
or before the Dual Convertible Preferred Stock becomes exchangeable for
Holding Common Stock in accordance with paragraph (f)(v) above (the
"Optional Redemption Period"), at a redemption price equal to 50% of the
Appraised Price (the "Gross Redemption Price"), together with accrued and
unpaid dividends thereon to the date of redemption. The Appraised Price that
is applicable to any Optional Redemption Period shall be the Appraised Price
set forth in the Appraisal, the acceptance of which gave rise to such
Optional Redemption Period.
(ii) The Gross Redemption Price shall be reduced by the aggregate of (A)
the aggregate current market price of the shares of Common Stock into which
the Dual Convertible Preferred Stock would then be convertible, regardless
of whether such shares are actually convertible at such time (which current
market price shall be determined in accordance with paragraph (e) (vii) (E)
and the date in question for purposes thereof shall be the date that the
Optional Redemption Notice (as hereinafter defined) is mailed in accordance
with paragraph (g)(iii) below) or, if any Transaction has been effected in
which shares of Common Stock were converted into the right to receive stock,
securities or other property (including cash or any combination thereof)
(the "Transaction Consideration") and the Common Stock is no longer
outstanding, the value of the Transaction Consideration into which the Dual
Convertible Preferred Stock would then be convertible, and (B) the value of
the rights to purchase Common Stock (the "Rights") issued to the
Partnerships on the Issue Date. The value of the Rights shall be determined
as follows:
(1) with respect to any portion of the Rights that has been exercised
and the holder of such Rights received Common Stock upon the exercise
thereof, the value of such Rights shall be equal to the aggregate current
market price of the Common Stock received upon the exercise of the Rights on
the date of exercise less the aggregate exercise price paid for such Common
Stock (which current market price shall be determined in accordance with
paragraph (e) (vii) (E) and the date in question for purposes thereof shall
be the date of exercise);
(2) with respect to any portion of the Rights that has not been
exercised, the value of such Rights shall be equal to the aggregate current
market price of the Common Stock that the holders of such Rights would then
be entitled to receive upon the exercise thereof in their entirety less the
aggregate exercise price that would then be payable upon such exercise
(which current market price shall be determined in accordance with paragraph
(e) (vii) (E) and the date in question for purposes thereof shall be the
date that the Optional Redemption Notice is mailed); and
(3) with respect to any portion of the Rights that has been exercised
and the Corporation exercised its option to purchase such Rights rather than
issue Common Stock upon the exercise thereof, the value of such Rights shall
be equal to the aggregate purchase price received by the holders thereof
upon the Corporation's purchase of such Rights.
The value of the Transaction Consideration shall be determined as follows:
(1) with respect to any portion of the Transaction Consideration that
consists of stock or securities, the value of such stock or securities shall
be equal to the aggregate current market price
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of such stock or securities (determined in accordance with paragraph (e)
(vii) (E) as if such paragraph were applicable to such stock or securities
and the date in question for purposes thereof shall be the date that the
Optional Redemption Notice is mailed); and
(2) with respect to any portion of the Transaction Consideration that
consists of other property, the value of such other property shall be equal
to its then aggregate fair market value as determined by the Board in good
faith.
If the Corporation certifies in the Optional Redemption Notice that it must
report gain, and that it will do so on its tax return for the taxable year of
the redemption, that will result in an actual income tax liability or an actual
reduction in income tax refund (or combination thereof) on the income tax return
of the Corporation for the taxable year of the redemption as a direct result of
the actual redemption of the Dual Convertible Preferred Stock for cash and/or
the issuance of Common Stock or debt securities of the Corporation pursuant to
paragraph (g) (i), the Gross Redemption Price shall be reduced by one-half of
the amount of the total income tax liability actually to be incurred as a result
of, and/or the actual reduction in income tax refund to occur caused by, such
redemption, as will be reported on the income tax return of the Corporation to
be filed for the taxable year of the redemption, including any income tax for
which the Corporation is liable as a result of such reduction. If the
Corporation does not expect to incur an actual tax liability or reduction in
refund (or combination thereof) in the year of the redemption, the Gross
Redemption Price shall be reduced by one-half of the amount determined by the
Board of Directors of the Corporation in good faith, equal to the projected tax
liability to be incurred by the Corporation in future years as a result of the
redemption appropriately discounted to take into account the period of time
before such tax liability will actually be paid by the Corporation. The
Corporation will not provide the certification in the Optional Redemption Notice
unless there is substantial authority that requires gain to be recognized by the
Corporation on the redemption and no substantial authority supporting the
position that gain is not recognized by the Corporation on the redemption.
If the Corporation subsequently receives a refund of all or any portion of
the taxes paid or has a reduction in the tax liability that resulted in a
reduction of the Gross Redemption Price, the Corporation shall promptly pay the
former holders of the Dual Convertible Preferred Stock their respective
proportionate share of 50% of such refund or reduction in tax liability,
together with any interest at the underpayment rate set forth in Section 6621(a)
(2) of the Internal Revenue Code of 1986, as amended. The Gross Redemption Price
reduced by the value of the Rights in accordance with clause (B) above and any
reduction pursuant to the three preceding sentences shall be referred to herein
as the "Net Redemption Price", and further reduced by the aggregate current
market price of the Common Stock or the aggregate value of the Transaction
Consideration in accordance with clause (A) above shall be referred to herein as
the "Balance".
(iii) The Net Redemption Price shall be payable to the holders of the
shares of Dual Convertible Preferred Stock as follows:
(A) certificates representing the number of shares of Common Stock or,
if any Transaction has been effected, certificates representing the number
of shares of stock or securities together with any other property, into
which the Dual Convertible Preferred Stock would then be convertible,
regardless of whether such shares are actually convertible at such time, and
any cash payable in respect of fractional shares as provided in paragraph
(e)(v), shall be delivered to the holders of the Dual Convertible Preferred
Stock in accordance with the procedures for effecting a Common Stock
Conversion; and
(B) the Balance shall be payable, at the Corporation's option, in any
combination of cash or the Corporation's capital and other securities having
a realizable market value (as determined by an independent nationally
recognized investment banking firm selected and paid for by the Corporation
and reasonably acceptable to the holders of at least a majority of the
shares of the Dual Convertible Preferred Stock) equal to the Balance.
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(iv) The Corporation shall have the obligation to redeem, with the prior
approval of the Federal Reserve Board, the Dual Convertible Preferred Stock,
in whole, but not in part, if (A) the Corporation offers to redeem (the
"Redemption Offer") the Dual Convertible Preferred Stock at a redemption
price other than the Gross Redemption Price, which offer, if made after the
Distribution shall have been effected, may only be made during an Optional
Redemption Period or during the period after an Appraisal has been received
and prior to the acceptance or rejection thereof by the holders of the
shares of the Dual Convertible Preferred Stock, and (B) the holders of a
majority of the outstanding shares of the Dual Convertible Preferred Stock
shall have elected to accept the Redemption Offer, which election shall be
binding on all the holders of the shares of the Dual Convertible Preferred
Stock. Written notice of every Redemption Offer shall be given by first
class mail, postage prepaid, to each holder of record of the shares of the
Dual Convertible Preferred Stock at such holder's address as the same
appears on the stock register of the Corporation. Each Redemption Offer
shall state: (A) the consideration offered by the Corporation for all the
shares of the Dual Convertible Preferred Stock (the "Alternative Redemption
Price"); (B) the proposed date on and the manner in which the Alternative
Redemption Price would be payable; and (C) the Gross Redemption Price, the
Net Redemption Price and the Balance, together with a certificate of the
Chief Financial Officer of the Corporation setting forth in reasonable
detail the facts upon and the manner in which each was determined.
(v) If the Corporation shall redeem shares of Dual Convertible Preferred
Stock pursuant to this paragraph (g), written notice of such redemption (the
"Optional Redemption Notice") shall be given by first class mail, postage
prepaid, mailed not less than 10 days nor more than 30 days prior to the
redemption date, to each holder of record of the shares of the Dual
Convertible Preferred Stock at such holder's address as the same appears on
the stock register of the Corporation. The Optional Redemption Notice shall
state: (A) the redemption date; (B) the Gross Redemption Price, the Net
Redemption Price and the Balance, together with a certificate of the Chief
Financial Officer of the Corporation setting forth in reasonable detail the
facts upon and the manner in which each was determined or the Alternative
Redemption Price, as the case may be; (C) that shares of Dual Convertible
Preferred Stock called for redemption may be converted in accordance with,
and subject to the terms of, paragraph (e) hereof at any time prior to the
date fixed for redemption (unless the Corporation shall default in payment
of the Net Redemption Price or the Alternative Redemption Price, in which
case such right shall not terminate at such date); (D) the place or places
where certificates for such shares are to be surrendered for payment of the
Net Redemption Price or the Alternative Redemption Price; (E) the amount of
any accrued and unpaid dividends; and (F) that dividends on the shares to be
redeemed will cease to accrue on such redemption date.
(vi) The Optional Redemption Notice having been mailed as aforesaid,
from and after the redemption date (unless default shall be made by the
Corporation in providing money for the payment of the Net Redemption Price
or the Alternative Redemption Price) dividends on the shares of Dual
Convertible Preferred Stock shall cease to accrue and said shares shall no
longer be deemed to be outstanding and shall have the status of authorized
but unissued shares of Preferred Stock, undesignated as to series, and all
rights of the holders thereof as shareholders of the Corporation (except the
right to receive from the Corporation the Net Redemption Price or the
Alternative Redemption Price and any accrued and unpaid dividends) shall
cease. Upon surrender in accordance with the Optional Redemption Notice of
any certificates for the shares so redeemed (properly endorsed or assigned
for transfer, if the Board of Directors of the Corporation shall so require
and the Optional Redemption Notice shall so state), such shares shall be
redeemed by the Corporation at the Net Redemption Price or the Alternative
Redemption Price, as the case may be, plus any accrued and unpaid dividends
thereon.
(h) Voting Rights.
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(i) The holders of record of shares of Dual Convertible Preferred Stock
shall not be entitled to any voting rights except as hereinafter provided in
this paragraph (h) or as otherwise provided by law.
(ii)(A) Whenever any matter is required to be acted upon herein by the
holders of a majority of the Dual Convertible Preferred Stock, the
affirmative vote of the holders of a majority of the outstanding Dual
Convertible Preferred Stock, whether at a special meeting of such holders
called as hereinafter provided, or by the written consent of such holders
pursuant to Section 7-1.1-30.3 of the Rhode Island Business Corporation Act,
shall be required to adopt such matter, which adoption shall be binding on
all the holders of the shares of Dual Convertible Preferred Stock.
(B) Upon the written request of the holders of at least 10% of the
shares of the Dual Convertible Preferred Stock, addressed to the Secretary
of the Corporation, a proper officer of the Corporation shall call a special
meeting of holders of Dual Convertible Preferred Stock. Such meeting shall
be held at the earliest practicable date upon the notice required for
special meetings of shareholders at a place designated by the holders of at
least 10% of the shares of the Dual Convertible Preferred Stock. If such
meeting shall not be called by the proper officers of the Corporation within
5 days after the personal service of such written request upon the Secretary
of the Corporation, or within 10 days after mailing the same within the
United States, by registered mail, addressed to the Secretary of the
Corporation at its principal office (such mailing to be evidenced by the
registry receipt issued by the postal authorities), then the holders of at
least 10% of the shares of Dual Convertible Preferred Stock may designate in
writing a holder of Dual Convertible Preferred Stock to call such meeting at
the expense of the Corporation, and such meeting may be called by such
person designated upon the notice required for special meetings of
shareholders and shall be held at the same place as is elsewhere provided in
this paragraph (h)(ii)(B). Any holder of Dual Convertible Preferred Stock
that would be entitled to vote at such meeting shall have access to the
stock books of the Corporation relating to the Dual Convertible Preferred
Stock and the right to examine and to make extracts therefrom, in person or
by agent or attorney, at any reasonable time or times, for the purpose of
causing a meeting of shareholders to be called pursuant to the provisions of
this paragraph or otherwise communicating with the holders of the Dual
Convertible Preferred Stock or for any other proper purpose.
(C) At any meeting of the holders of the Dual Convertible Preferred
Stock, the presence in person or by proxy of the holders of a majority of
the then outstanding shares of Dual Convertible Preferred Stock shall be
required and be sufficient to constitute a quorum of such holders for the
action to be taken by such class. At any such meeting or adjournment thereof
in the absence of a quorum of the holders of shares of Dual Convertible
Preferred Stock, the holders of a majority of such shares present in person
or by proxy shall have the power to adjourn the meeting from time to time,
without notice (except as required by law) other than announcement at the
meeting, until a quorum shall be present.
(D) At any meeting of the holders of the Dual Convertible Preferred
Stock, the holders of a majority of the outstanding shares of the Dual
Convertible Preferred Stock shall be entitled to designate a committee (the
"Committee") consisting of as many holders of the Dual Convertible Preferred
Stock as the holders of a majority of such shares may determine to be
appropriate. The Committee may be empowered to act on behalf of all holders
of the Dual Convertible Preferred Stock with respect to certain matters
affecting the exchangeability of the Dual Convertible Preferred Stock
specified in paragraphs (f) (iv) and (f) (v) and the acceptability of the
Corporation's selection of an investment banking firm hereunder if so
designated by the holders of the Dual Convertible Preferred Stock pursuant
to this paragraph (h)(ii)(D); provided, however, that in no event may the
Committee be empowered to elect to convert the Dual Convertible Preferred
Stock into Common Stock, to accept any Redemption Offer or to exchange the
Dual Convertible Preferred Stock for Holding Common Stock on behalf of the
holders thereof.
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<PAGE>
(iii) So long as any shares of the Dual Convertible Preferred Stock are
outstanding, the Corporation shall not, without the affirmative vote or
consent of the holders of at least 66 2/3% of the outstanding shares of Dual
Convertible Preferred Stock, voting as a class, given in person or by proxy,
either in writing or by resolution adopted at a special meeting called for
the purpose, authorize any new class of Senior Securities.
(iv) So long as any shares of the Dual Convertible Preferred Stock are
outstanding, the Corporation shall not, without the affirmative vote or
consent of the holders of at least 66 2/3% of the outstanding shares of Dual
Convertible Preferred Stock, voting as a class, given in person or by proxy,
either in writing or by resolution adopted at a special meeting called for
the purpose, amend the Certificate of Incorporation or this Certificate of
Designation so as to affect materially and adversely the specified rights,
preferences, privileges or voting rights of shares of Dual Convertible
Preferred Stock.
(i) Other Redemption Rights.
(i) If less than 10% of the shares of the Dual Convertible Preferred
Stock originally issued is then outstanding, the Corporation may redeem at
its option, with the prior approval of the Federal Reserve Board, the Dual
Convertible Preferred Stock, in whole, but not in part, at any time on or
after the date that is ten years after the Issue Date, at a redemption price
of $200 per share (the "Stated Value Redemption Price"), together with
accrued and unpaid dividends thereon to the date of redemption, without
interest.
(ii) The Corporation may redeem at its option, with the prior approval
of the Federal Reserve Board, the Dual Convertible Preferred Stock, in
whole, but not in part, at any time on or after the date that is 12 years
after the Issue Date, at a redemption price in cash equal to the Fair Market
Value (as hereinafter defined) of such shares. The Corporation shall have
the right to have an independent nationally recognized investment banking
firm render an opinion of the fair market value for all the outstanding
shares of the Dual Convertible Preferred Stock as if all such shares were to
be sold to a third party (the "Fair Market Value"). The investment banking
firm that renders such opinion shall be selected by the Corporation but
shall be reasonably acceptable to the holders of a majority of the
outstanding shares of the Dual Convertible Preferred Stock. Such
determination of Fair Market Value shall be binding and conclusive on the
Corporation and the holders of the Dual Convertible Preferred Stock. The
fees and expenses of such investment banking firm shall be paid by the
Corporation.
(iii) If the Corporation shall redeem shares of Dual Convertible
Preferred Stock pursuant to this paragraph (i), written notice of such
redemption shall be given by first class mail, postage prepaid, mailed not
less than 90 days nor more than 120 days prior to the redemption date, to
each holder of record of the shares of the Dual Convertible Preferred Stock
at such holder's address as the same appears on the stock register of the
Corporation. Each such notice shall state: (A) the redemption date; (B) the
number of shares of Dual Convertible Preferred Stock to be redeemed; (C) the
Stated Value Redemption Price or the Fair Market Value of such holder's
shares, as the case may be; (D) that shares of Dual Convertible Preferred
Stock called for redemption may be converted in accordance with, and subject
to the terms of, paragraph (e) hereof at any time prior to the date fixed
for redemption (unless the Corporation shall default in payment of the
Stated Value Redemption Price or the Fair Market Value of such shares, in
which case such right shall not terminate at such date); (E) the place or
places where certificates for such shares are to be surrendered for payment
of the Stated Value Redemption Price or the Fair Market Value of such
shares; and (F) that dividends on the shares to be redeemed will cease to
accrue on such redemption date.
(iv) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in
providing money for the payment of the Stated Value Redemption Price or the
Fair Market Value of such shares) dividends on the shares of Dual
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Convertible Preferred Stock shall cease to accrue and said shares shall no
longer be deemed to be outstanding and shall have the status of authorized
but unissued shares of Preferred Stock, undesignated as to series, and all
rights of the holders thereof as shareholders of the Corporation (except the
right to receive from the Corporation the Stated Value Redemption Price and
any accrued and unpaid dividends or the Fair Market Value of such shares)
shall cease. Upon surrender in accordance with said notice of any
certificates for the shares so redeemed (properly endorsed or assigned for
transfer, if the Board of Directors of the Corporation shall so require and
the notice shall so state), such shares shall be redeemed by the Corporation
at the Stated Value Redemption Price plus any accrued and unpaid dividends
thereon or the Fair Market Value of such shares, as the case may be.
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<PAGE>
EXHIBIT D
FLEET FINANCIAL GROUP, INC.
CUMULATIVE PARTICIPATING JUNIOR PREFERRED STOCK
Section 1. Designation and Amount. The shares of such series shall be
designated as "Cumulative Participating Junior Preferred Stock" (the "Junior
Preferred Stock") and the number of shares constituting the Junior Preferred
Stock shall be 1,500,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Junior Preferred Stock to a number less than the number
of shares then outstanding plus the number of shares reserved for issuance upon
the exercise of outstanding options, rights or warrants or upon the conversion
of any outstanding securities issued by the Corporation convertible into Junior
Preferred Stock.
Section 2. Dividends and Distributions.
(A) The holders of shares of Junior Preferred Stock, in preference to the
holders of Common Stock, par value $1.00 per share (the "Common Stock"), of the
Corporation, and of any other junior stock, but subject to the rights of holders
of any senior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first days of January, April, July and October
in each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Junior Preferred Stock,
in an amount per share (rounded to the nearest cent) equal to the greater of (a)
$1.00 or (b) subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Junior Preferred Stock. In the event the Corporation shall at any time after
November 21, 1990 declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock), then in each such case the
amount to which holders of shares of Junior Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Junior
Preferred Stock as provided in paragraph (A) of this Section immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Junior
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares
of Junior Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or
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unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the Record Date for the determination of holders of shares of Junior Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of Junior
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Junior Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 50 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Junior Preferred Stock
shall have the following voting rights:
(A) Each share of Junior Preferred Stock shall entitle the holder thereof to
one hundred votes (subject to adjustment as set forth below) on all matters
submitted to a vote of the stockholders of the Corporation (including, without
limitation, the election of directors). In the event the Corporation shall at
any time after November 21, 1990, declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock), then in
each such case the number of votes to which holders of shares of Junior
Preferred Stock were entitled to immediately prior to such event shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Restated Articles of
Incorporation, or by law, the holders of shares of Junior Preferred Stock, the
holders of shares of Common Stock and the holders of any other capital stock of
the Corporation having general voting rights shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Junior Preferred Stock shall be in
arrears in an amount equal to the full accrued dividends for six (6) or more
quarterly dividend periods, whether or not consecutive, shall not have been paid
or declared and a sum sufficient for the payment thereof irrevocably set aside
in trust for the holders of all of such shares, the Board of Directors of the
Corporation shall promptly take all necessary actions to increase the authorized
number of directors of the Corporation by one (1) and the holders of the shares
of the Junior Preferred Stock then outstanding shall be entitled (by series,
voting as a single class) to elect one (1) person director to the Board of
Directors of the Corporation (such right to elect one (1) director being
hereinafter sometimes referred to as the "special voting rights"), each
outstanding share having such right being entitled for such purpose to one vote;
provided, however, that at such time as the arrearage in payment of dividends
which gave rise to the exercise of the special voting rights has been cured with
regard to the Junior Preferred Stock by waiver or payment of all accrued
dividends, the right of the holders of such shares so to vote as provided in
this paragraph (C)(i) of this Section 3 shall cease (subject to renewal from
time to time upon the same terms and conditions) and the term of office of the
person who is at that time a director elected by such holders shall terminate
and the number of directors of the Corporation shall be automatically reduced by
one (1).
(ii) At any time after the special voting rights shall have become vested in
the holders of the shares of the Junior Preferred Stock as provided in paragraph
(C)(i) of this Section 3, the Secretary of the Corporation, as promptly as
possible but in any event within twenty (20) days after receipt of the written
request of the holders of 10% of the shares of the Junior Preferred Stock then
outstanding, addressed to the Corporation at its principal office, shall call a
special meeting of the holders of the
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shares of the Junior Preferred Stock for the purpose of electing such additional
director, such meeting to be held at any place as provided by the Bylaws of the
Corporation for meetings of the Corporation's stockholders, and upon not less
than ten (10) nor more than twenty (20) days notice. If such meeting shall not
be so called within twenty (20) days after receipt of the request by the
Secretary of the Corporation, then the holders of 10% of the shares of the
Junior Preferred Stock then outstanding may, by written notice to the Secretary
of the Corporation, designate any person to call such meeting, and the person so
designated may call such meeting, at any such place as provided above and upon
not less than ten (10) nor more than twenty (20) days notice and for that
purpose shall have access to the stockholder record books of the Corporation. No
such special meeting of the holders of the shares of the Junior Preferred Stock
and no adjournment thereof shall be held on a date later than thirty (30) days
before the annual meeting of stockholders of the Corporation. At any meeting so
called or at any annual meeting held at any time when the special voting rights
are in effect, the holders of a majority of the shares of the Junior Preferred
Stock then outstanding, present in person or by proxy, shall be sufficient to
constitute a quorum for the election of such additional director, and such
additional director, together with any and all other directors who are then
members of the Board of Directors, shall constitute the duly elected directors
of the Corporation.
(iii) With respect to a vacancy arising in the directorship referred to in
paragraph (C)(i) of this Section 3 at any time when the special voting rights
are in effect pursuant to paragraph (C)(i) of this Section 3, upon the written
request of the holders of 10% of the shares of the Junior Preferred Stock then
outstanding, addressed to the Corporation at its principal office, the Secretary
of the Corporation shall give notice of a special meeting of holders of the
shares of the Junior Preferred Stock of the election of a director to fill such
vacancy caused by the death, resignation or other inability to serve as a
director elected by such holders, to be held not less than ten (10) nor more
than twenty (20) days following receipt by the Secretary of the Corporation of
such written request. So long as special voting rights are in effect pursuant to
paragraph (i) of this Section 3(c), any director who shall have been so elected
by the holders of the Junior Preferred Stock may be removed at any time, either
with or without cause, only by the affirmative vote of the holders of the shares
at the time entitled to cast a majority of the votes entitled to be cast for the
election of such director at a special meeting of such holders called for that
purpose, and any vacancy thereby created may be filled by the vote of such
holders.
(D) Except as set forth herein, or as otherwise provided by the Restated
Articles of Incorporation or by law, holders of Junior Preferred Stock shall
have no special voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
(E) Holders of Junior Preferred Stock shall be entitled to such notice of
each meeting of stockholders as is furnished to the holders of Common Stock with
respect to such meeting.
Section 4. Certain Restrictions.
(A) Subject to the provisions of the Restated Articles of Incorporation,
whenever quarterly dividends or other dividends or distributions payable on the
Junior Preferred Stock as provided in Section 2 are in arrears as of any
Quarterly Dividend Payment Date, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of Junior
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Junior Preferred Stock,
except dividends paid ratably on the Junior Preferred Stock and all such
parity
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stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of
any such junior stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends and upon dissolution, liquidation or
winding up) to the Junior Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Junior Preferred Stock, or any shares of stock ranking on a parity
with the Junior Preferred Stock, except in accordance with the terms of the
Restated Articles of Incorporation and with a purchase offer made in writing
or by publication (as determined by the Board of Directors) to all holders
of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall determine
in good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Junior Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject to
the conditions and restrictions on issuance set forth herein, in the Restated
Articles of Incorporation, or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock unless, prior thereto, the holders of shares of Junior
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Junior Preferred Liquidation Preference").
Following the payment of the full amount of the Junior Preferred Liquidation
Preference, no additional distributions shall be made to the holders of shares
of Junior Preferred Stock unless, prior thereto, the holders of shares of Common
Stock shall have received an amount per share (the "Common Adjustment") equal to
the quotient obtained by dividing (i) the Junior Preferred Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph
(C) below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii)
immediately above being referred to as the "Adjustment Number"). Following the
payment of the full amount of the Junior Preferred Liquidation Preference and
the Common Adjustment in respect of all outstanding shares of Junior Preferred
Stock and Common Stock, respectively, holders of Junior Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to one (1) with respect to such Junior Preferred Stock and Common Stock,
on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available to
permit payment in full of the Junior Preferred Liquidation Preference and the
liquidation preferences of all other series of
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preferred stock, if any, which rank on a parity with the Junior Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after November 21, 1990,
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, Etc. In case the Corporation should enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Junior Preferred Stock shall at the same time be similarly exchanged or changed
into an amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time after November 21, 1990 declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding sentence with respect to
the exchange of change of shares of Junior Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. Ranking. The Junior Preferred Stock shall rank junior, as to
dividends and upon liquidation, dissolution or winding up, to (a) the Common
Stock, (b) the Preferred Stock with Cumulative and Adjustable Dividends, $20 par
value, (c) any other class of capital stock of the Corporation unless the terms
of such class shall expressly provide otherwise, and (d), to the extent
permitted by the Restated Articles of Incorporation, all other series of
Preferred Stock issued by the Corporation.
Section 9. No Redemption. The shares of Junior Preferred Stock shall not be
redeemable.
Section 10. Fractional Shares. The Junior Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of shares of Junior Preferred Stock.
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EXHIBIT E
FLEET FINANCIAL GROUP, INC.
PREFERRED STOCK WITH CUMULATIVE AND ADJUSTABLE DIVIDENDS
(a) Designation. The designation of this series of Preferred Stock shall be
"Preferred Stock with Cumulative and Adjustable Dividends" (hereinafter called
this "Series") and the number of shares constituting this Series is 688,700.
Shares of this Series shall have a stated value of $50 per share. The number of
authorized shares of this Series may be reduced by further resolution duly
adopted by the Board and by the filing of a certificate pursuant to the
provisions of the Rhode Island Business Corporation Act stating that such
reduction has been so authorized, but the number of authorized shares of this
Series shall not be increased.
(b) Dividend Rate.
(1) The dividend rate on the shares of this Series shall be $.8875 per
share for the period (the "Initial Dividend Period") from the date of their
original issue to and including March 31, 1988. Dividend rates on the shares
of this Series shall be for each quarterly dividend period (hereinafter
referred to as a "Quarterly Dividend Period"; and the Initial Dividend
Period or any Quarterly Dividend Period being hereinafter individually
referred to as a "Dividend Period" and collectively referred to as "Dividend
Periods") thereafter, which Quarterly Dividend Periods shall commence on
January 1, April 1, July 1, and October 1, in each year and shall end on and
include the day next preceding the first day of the next Quarterly Dividend
Period, at a rate per annum of the stated value thereof of 2.25% below the
Applicable Rate (as defined in paragraph (2) of this Section (b)) in respect
of such Quarterly Dividend Period. Anything to the contrary herein
notwithstanding, the dividend rate for any Quarterly Dividend Period shall
in no event be less than 6% or greater than 12% per annum. Such dividends
shall be cumulative from the date of original issue of such shares and shall
be payable, when and as declared by the Board, on January 1, April 1, July
1, and October 1, of each year, commencing on April 1, 1988. Each such
dividend shall be paid to the holders of record of shares of this Series as
they appear on the stock register of the Corporation on such record date,
not exceeding 30 days preceding the payment date thereof, as shall be fixed
by the Board. Dividends on account of arrears for any past Dividend Periods
may be declared and paid at any time, without reference to any regular
dividend payment date, to holders of record on such date, not exceeding 45
days preceding the payment date thereof, as may be fixed by the Board.
(2) Except as provided below in this paragraph, the "Applicable Rate"
for any Quarterly Dividend Period shall be the highest of the Treasury Bill
Rate, the Ten Year Constant Maturity Rate or the Twenty Year Constant
Maturity Rate (each as hereinafter defined) for such Dividend Period. In the
event that the Corporation determines in good faith that for any reason one
or more of such rates cannot be determined for any Quarterly Dividend
Period, then the Applicable Rate for such Quarterly Dividend Period shall be
the higher of whichever of such rates can be so determined. In the event
that the Corporation determines in good faith that none of such rates can be
determined for any Quarterly Dividend Period, then the Applicable Rate in
effect for the preceding Dividend Period shall be continued for such
Dividend Period.
(3) Except as provided below in this paragraph, the "Treasury Bill Rate"
for each Quarterly Dividend Period shall be the arithmetic average of the
two most recent weekly per annum market discount rates (or the one weekly
per annum market discount rate, if only one such rate shall be published
during the relevant Calendar Period as provided below) for three-month U.S.
Treasury bills, as published weekly by the Federal Reserve Board during the
Calendar Period immediately prior to the last ten calendar days of the
March, June, September or December, as the case may be, prior to the
Quarterly Dividend Period for which the dividend rate on this Series is
being
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determined. In the event that the Federal Reserve Board does not publish
such a weekly per annum market discount rate during such Calendar Period,
then the Treasury Bill Rate for such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum market discount rates (or
the one weekly per annum market discount rate, if only one such rate shall
be published during the relevant Calendar Period as provided below) for
three-month U.S. Treasury bills, as published weekly during such Calendar
Period by any Federal Reserve Bank or by any U.S. Government department or
agency selected by the Corporation. In the event that a per annum market
discount rate for three-month U.S. Treasury bills shall not be published by
the Federal Reserve Board or by any Federal Reserve Bank or by any U.S.
Government department or agency during such Calendar Period, then the
Treasury Bill Rate for such Dividend Period shall be the arithmetic average
of the two most recent weekly per annum market discount rates (or the one
weekly per annum market discount rate, if only one such rate shall be
published during the relevant Calendar Period as provided below) for all of
the U.S. Treasury bills then having maturities of not less than 80 nor more
than 100 days, as published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board shall not publish such rates,
by any Federal Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event that the Corporation determines in
good faith that for any reason no such U.S. Treasury Bill Rates are
published as provided above during such Calendar Period, then the Treasury
Bill Rate for such Dividend Period shall be the arithmetic average of the
per annum market discount rates based upon the closing bids during such
Calendar Period for each of the issues of marketable noninterest-bearing
U.S. Treasury securities with a maturity of not less than 80 nor more than
100 days from the date of each such quotation, as quoted daily for each
business day in New York City (or less frequently if daily quotations shall
not be generally available) to the Corporation by at least three recognized
U.S. Government securities dealers selected by the Corporation. In the event
that the Corporation determines in good faith that for any reason the
Corporation cannot determine the Treasury Bill Rate for any Quarterly
Dividend Period as provided above in this paragraph, the Treasury Bill Rate
for such Dividend Period shall be the arithmetic average of the per annum
market discount rates based upon the closing bids during such Calendar
Period for each of the issues of marketable interest-bearing U.S. Treasury
securities with a maturity of not less than 80 nor more than 100 days from
the date of each such quotation, as quoted daily for each business day in
New York City (or less frequently if daily quotations shall not be generally
available) to the Corporation by at least three recognized U.S. Government
securities dealers selected by the Corporation.
(4) Except as provided in this paragraph, the "Ten Year Constant
Maturity Rate" for each Quarterly Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Ten Year Average Yields (or
the one weekly per annum Ten Year Average Yield, if only one such Yield
shall be published during the relevant Calendar Period as provided below),
as published weekly by the Federal Reserve Board during the Calendar Period
immediately prior to the last ten calendar days of the March, June,
September or December, as the case may be, prior to the Quarterly Dividend
Period for which the dividend rate on this Series is being determined. In
the event that the Federal Reserve Board does not publish such a weekly per
annum Ten Year Average Yield during such Calendar Period, then the Ten Year
Constant Maturity Rate for such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Ten Year Average Yields (or
the one weekly per annum Ten Year Average Yield, if only one such Yield
shall be published during the relevant Calendar Period as provided below),
as published weekly during such Calendar Period by any Federal Reserve Bank
or by any U.S. Government department or agency selected by the Corporation.
In the event that a per annum Ten Year Average Yield shall not be published
by the Federal Reserve Board or by any Federal Reserve Bank or by any U.S.
Government department or agency during such Calendar Period, then the Ten
Year Constant Maturity Rate for such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum average yields to maturity
(or the one weekly average yield to maturity, if only
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one such yield shall be published during the relevant Calendar Period as
provided below) for all of the actively traded marketable U.S. Treasury
fixed interest rate securities (other than Special Securities) then having
maturities of not less than eight nor more than twelve years, as published
during such Calendar Period by the Federal Reserve Board or, if the Federal
Reserve Board shall not publish such yields, by any Federal Reserve Bank or
by any U.S. Government department or agency selected by the Corporation. In
the event that the Corporation determines in good faith that for any reason
the Corporation cannot determine the Ten Year Constant Maturity Rate for any
Quarterly Dividend Period as provided above in this paragraph, then the Ten
Year Constant Maturity Rate for such Dividend Period shall be the arithmetic
average of the per annum average yields to maturity based upon the closing
bids during such Calendar Period for each of the issues of the actively
traded marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) with a final maturity date not less than eight nor more
than twelve years from the date of each such quotation, as quoted daily for
each business day in New York City (or less frequently if daily quotations
shall not be generally available) to the Corporation by at least three
recognized U.S. Government securities dealers selected by the Corporation.
(5) Except as provided below in the paragraph, the "Twenty Year Constant
Maturity Rate" for each Quarterly Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Twenty Year Average Yields
(or the one weekly per annum Twenty Year Average Yield, if only one such
Yield shall be published during the relevant Calendar Period as provided
below), as published weekly by the Federal Reserve Board during the Calendar
Period immediately prior to the last ten calendar days of the March, June,
September or December, as the case may be, prior to the Quarterly Dividend
Period for which the dividend rate on this Series is being determined. In
the event that the Federal Reserve Board does not publish such a weekly per
annum Twenty Year Average Yield during such Calendar Period, then the Twenty
Year Constant Maturity Rate for such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Twenty Year Average Yields
(or the one weekly per annum Twenty Year Average Yield, if only one such
Yield shall be published during the relevant Calendar Period as provided
below), as published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency selected by the
Corporation. In the event that a per annum Twenty Year Average Yield shall
not be published by the Federal Reserve Board or by any Federal Reserve Bank
or by any U.S. Government department or agency during such Calendar Period,
then the Twenty Year Constant Maturity Rate for such Dividend Period shall
be the arithmetic average of the two most recent weekly per annum average
yields to maturity (or the one weekly average yield to maturity, if only one
such yield shall be published during the relevant Calendar Period as
provided below) for all of the actively trade marketable U.S. Treasury fixed
interest securities (other than Special Securities) then having maturities
of not less than eighteen nor more than twenty-two years, as published
during such Calendar Period by the Federal Reserve Board or, if the Federal
Reserve Board shall not publish such yields, by any Federal Reserve Bank or
by any U.S. Government department or agency selected by the Corporation. In
the event that the Corporation determines in good faith that for any reason
the Corporation cannot determine the Twenty Year Constant Maturity Rate for
any Quarterly Dividend Period as provided above in this paragraph, then the
Twenty Year Constant Maturity Rate for such Dividend Period shall be the
arithmetic average of the per annum average yields to maturity based upon
the closing bids during such Calendar Period for each of the issues of
actively traded marketable U.S. Treasury fixed interest rate securities
(other than Special Securities) with a final maturity date not less than
eighteen nor more than twenty-two years from the date of each such
quotation, as quoted daily for each business day in New York City (or less
frequently if daily quotations shall not be generally available) to the
Corporation by at least three recognized U.S. Government securities dealers
selected by the Corporation.
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(6) The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the
Twenty Year Constant Maturity Rate shall each be rounded to the nearest five
hundredths of a percentage point.
(7) The dividend rate with respect to each Quarterly Dividend Period
will be calculated as promptly as practicable by the Corporation according
to the appropriate method described herein. The mathematical accuracy of
each such calculation will be confirmed in writing by independent
accountants of recognized standing. The Corporation will cause each dividend
rate to be published in a newspaper of general circulation in New York City
prior to the commencement of the new Quarterly Dividend Period to which it
applies and will cause notice of such dividend rate to be enclosed with the
dividend payment checks next mailed to the holders of shares of this Series.
(8) For purposes of this Section (b), the term
(i) "Calendar Period" shall mean 14 calendar days;
(ii) "Special Securities" shall mean securities which can, at the
option of the holder, be surrendered at face value in payment of any
Federal estate tax or which provide tax benefits to the holder and are
priced to reflect such tax benefits or which were originally issued at a
deep or substantial discount.
(iii) "Ten Year Average Yield" shall mean the average yield to
maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of ten years); and
(iv) "Twenty Year Average Yield" shall mean the average yield to
maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of 20 years).
(9) No full dividends shall be declared or paid or set apart for payment
on Preferred Stock of any series ranking, as to dividends, on a parity with
or junior to this Series for any period unless full cumulative dividends
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on this Series
for all dividend payment periods terminating on or prior to the date of
payment of such full cumulative dividends. When dividends are not paid in
full, as aforesaid, upon the shares of this Series and any other Preferred
Stock ranking on a parity as to dividends with this Series, all dividends
declared upon shares of this Series and any other Preferred Stock ranking on
a parity as to dividends with this Series shall be declared pro rata so that
the amount of dividends declared per share on this Series and such other
Preferred Stock shall in all cases bear to each other the same ratio that
accrued dividends per share on the shares of this Series and such other
Preferred Stock bear to each other. Holders of shares of this Series shall
not be entitled to any dividend, whether payable in cash, property or
stocks, in excess of full cumulative dividends, as herein provided, on this
Series. No interest, or sum of money in lieu of interest, shall be payable
in respect of any dividend payment or payments on this Series which may be
in arrears.
(10) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior
to this Series as to dividends and upon liquidation and other than as
provided in paragraph (9) of this Section (b)) shall be declared or paid or
set aside for payment or other distribution declared or made upon the Common
Stock or upon any other stock ranking junior to or on a parity with this
Series as to dividends or upon liquidation, nor shall any Common Stock nor
any other stock of the Corporation ranking junior to or on a parity with
this Series as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys paid to or made
available for a sinking fund for the redemption of any shares of any such
stock) by the Corporation (except by conversion into or exchange for stock
of the Corporation ranking junior to this Series as to dividends and upon
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liquidation) unless, in each case, the full cumulative dividends on all
outstanding shares of this Series shall have been paid for all past dividend
payment periods.
(11) Dividends payable on each share of this Series for each full
Quarterly Dividend Period shall be computed by dividing the dividend rate
for such Quarterly Dividend Period by four and applying such rate against
the stated value, per share of this Series. Dividends payable on this Series
for any period less than a full Quarterly Dividend Period shall be computed
on the basis of a 360-day year consisting of 30-day months.
(c) Redemption.
(1) The shares of this Series shall not be redeemable prior to April 1,
1988. On and after April 1, 1988, the Corporation, at its option, may redeem
shares of this Series, as a whole or in part, at any time or from time to
time, at a redemption price (i) in the case of any redemption on a
redemption date occurring on or after April 1, 1988, and prior to April 1,
1993, of $51.50 per share, and (ii) in the case of any redemption on a
redemption date occurring on or after April 1, 1993, of $50.00 per share,
plus, in each case, accrued and unpaid dividends thereon to the date fixed
for redemption.
(2) In the event that fewer than all the outstanding shares of this
Series are to be redeemed, the number of shares to be redeemed shall be
determined by the Board and the shares to be redeemed shall be determined by
lot or pro rata as may be determined by the Board or by any other method as
may be determined by the Board in its sole discretion to be equitable.
(3) In the event the Corporation shall redeem shares of this Series,
notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the
redemption date, to each holder of record of the shares to be redeemed, at
such holder's address as the same appears on the stock register of the
Corporation. Each such notice shall state: (i) the redemption date; (ii) the
number of shares of this Series to be redeemed and, if fewer than all the
shares held by such holder are to be redeemed, the number of such shares to
be redeemed from such holder; (iii) the redemption price; (iv) the place or
places where certificates for such shares are to be surrendered for payment
of the redemption price; and (v) that dividends on the shares to be redeemed
will cease to accrue on such redemption date.
(4) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price) dividends on the
shares of this Series so called for redemption shall cease to accrue, and
said shares shall no longer be deemed to be outstanding, and all rights of
the holders thereof as stockholders of the Corporation (except the right to
receive from the Corporation the redemption price) shall cease. Upon
surrender in accordance with said notice of the certificates for any shares
so redeemed (properly endorsed or assigned for transfer, if the Board shall
so require and the notice shall so state), such shares shall be redeemed by
the Corporation at the redemption price aforesaid. In case fewer than all
the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost
to the holder thereof.
(5) Any shares of this Series which shall at any time have been redeemed
shall, after such redemption, have the status of authorized but unissued
shares of Preferred Stock, without designation as to series until such
shares are once more designated as part of a particular series by the Board.
(6) Notwithstanding the foregoing provisions of this Section (c), if any
dividends on this Series are in arrears, no shares of this Series shall be
redeemed unless all outstanding shares of this Series are simultaneously
redeemed, and the Corporation shall not purchase or otherwise acquire any
shares of this Series; provided, however, that the foregoing shall not
prevent the purchase or
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acquisition of shares of this Series pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding shares of this
Series.
(d) Conversion or Exchange. The holders of shares of this Series shall not
have any rights herein to convert such shares into or exchange such shares for
shares of any other class or classes or of any other series of any class or
classes of capital stock of the Corporation.
(e) Voting. The shares of this Series shall not have any voting powers
either general or special, except that
(1) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the shares of this Series at the time outstanding, given
in person or by proxy, either in writing by a vote at a meeting called for
the purpose at which the holders of shares of this Series shall vote
together as a separate class, shall be necessary for authorizing, effecting
or validating the amendment, alteration or repeal of any of the provisions
of the Articles of Incorporation of the Corporation or of any certificate
amendatory thereof or supplemental thereto (including any Certificate of
Designation, Preferences and Rights or any similar document relating to any
series of Preferred Stock) which would adversely affect the preferences,
rights, powers or privileges of this Series;
(2) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the shares of this Series and all other series of
Preferred Stock ranking on a parity with shares of this Series, either as to
dividends or upon liquidation, at the time outstanding, given in person or
by proxy, either in writing or by a vote at a meeting called for the purpose
at which the holders of shares of this Series and such other series of
Preferred Stock shall vote together as a single class without regard to
series, shall be necessary for authorizing, effecting or validating the
creation, authorization or issue of any shares of any class of stock of the
Corporation ranking prior to the shares of this Series as to dividends or
upon liquidation, or the reclassification or any authorized stock of the
Corporation into any such prior shares, or the creation, authorization or
issue of any obligation or security convertible into or evidencing the right
to purchase any such prior shares;
(3) If at the time of any annual meeting of stockholders for the
election of directors a default in preference dividends on the Preferred
Stock shall exist, the number of directors constituting the Board of the
Corporation shall be increased by two, and the holders of the Preferred
Stock of all series shall have the right at such meeting, voting together as
a single class without regard to series, to the exclusion of the holders of
Common Stock, to elect two directors of the Corporation to fill such newly
created directorships. Such right shall continue until there are no
dividends in arrears upon the Preferred Stock. Each director elected by the
holders of shares of Preferred Stock (herein called a "Preferred Director")
shall continue to serve as such director for the full term for which he
shall have been elected, notwithstanding that prior to the end of such term
a default in preference dividends shall cease to exist. Any Preferred
Director may be removed by, and shall not be removed except by, the vote of
the holders of record of the outstanding shares of Preferred Stock, voting
together as a single class without regard to series, at a meeting of the
stockholders, or of the holders of shares of Preferred Stock, called for
that purpose. So long as a default in any preference dividends on the
Preferred Stock shall exist, (A) any vacancy in the office of a Preferred
Director may be filled (except as provided in the following clause (B)) by
an instrument in writing signed by the remaining Preferred Director and
filed with the Corporation and (B) in the case of the removal of any
Preferred Director, the vacancy may be filled by the vote of the holders of
the outstanding shares of Preferred Stock, voting together as a single class
without regard to series, at the same meeting at which such removal shall be
voted. Each director appointed as aforesaid by the remaining Preferred
Director shall be deemed, for all purposes hereof, to be a Preferred
Director. Whenever the term of office of the Preferred Directors shall end
and a default in preference
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dividends shall no longer exist, the number of directors constituting the
Board of the Corporation shall be reduced by two. For the purposes hereof, a
"default in preference dividends" on the Preferred Stock shall be deemed to
exist whenever the amount of accrued dividends upon any series of the
Preferred Stock shall be equivalent to six full quarter-yearly dividends or
more, and, having so occurred, such default shall be deemed to exist
thereafter until, but only until, all accrued dividends on all shares of
Preferred Stock of each and every series then outstanding shall have been
paid to the end of the last preceding quarterly dividend period.
(f) Liquidation Rights.
(1) Upon the dissolution, liquidation or winding up of the Corporation,
the holders of the shares of this Series shall be entitled to receive out of
the assets of the Corporation, before any payment or distribution shall be
made on the Common Stock or on any other class of stock ranking junior to
the Preferred Stock upon liquidation, the amount of $50.00 per share, plus a
sum equal to all dividends (whether or not earned or declared) on such
shares accrued and unpaid thereon to the date of final distribution.
(2) Neither the sale of all or substantially all the property or
business of the Corporation, nor the merger or consolidation of the
Corporation into or with any other corporation or the merger or
consolidation of any other corporation into or with the Corporation, shall
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purpose of this Section (f).
(3) After the payment to the holders of the shares of this Series of the
full preferential amounts provided for in this Section (f), the holders of
this Series as such shall have no right or claim to any of the remaining
assets of the Corporation.
(4) In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to paragraph 1 of this Section (f), no such
distribution shall be made on account of any shares of any other class or
series of Preferred Stock ranking on a parity with the shares of this Series
upon such dissolution, liquidation or winding up unless proportionate
distributive amounts shall be paid on account of the shares of this Series,
ratably, in proportion to the full distributable amounts for which holders
of all such parity shares are respectively entitled upon such dissolution,
liquidation or winding up.
(5) Upon the dissolution, liquidation or winding up of the Corporation,
the holders of the shares of this Series then outstanding shall be entitled
to be paid out of the assets of the Corporation available for distribution
to its stockholders all amounts to which such holders are entitled pursuant
to paragraph (1) of this Section (f) before any payment shall be made to the
holders of any class of capital stock of the Corporation ranking junior upon
liquidation of this Series.
(g) Ranking of Classes of Stock. Any stock of any class or classes of the
Corporation shall be deemed to rank:
(1) prior to the shares of this Series, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to
the receipt of dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may be, in
preference or priority to the holders of shares of this Series;
(2) on a parity with shares of this Series, either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share or sinking fund provisions, if
any, be different from those of this Series, if the holders of such stock
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shall be entitled to the receipt of dividends or of amounts distributable
upon dissolution, liquidation or winding up of the Corporation, as the case
may be, in proportion to their respective dividend rates or liquidation
prices, without preference or priority, one over the other, as between the
holders of such stock and the holders of shares of this Series; and
(3) junior to shares of this Series, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of shares
of this Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the holders of
shares of such class or classes.
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EXHIBIT F
FLEET FINANCIAL GROUP, INC.
9.30% CUMULATIVE PREFERRED STOCK
(a) Designation. The designation of this series of Preferred Stock shall be
"9.30% Cumulative Preferred Stock" (hereinafter called the "Preferred Shares")
and the number of shares constituting this series shall be 575,000. Such
Preferred Shares shall have a stated value of $250 per share. The number of
authorized Preferred Shares may be reduced by further resolution duly adopted by
the Board and by the filing of a certificate pursuant to the provisions of the
Rhode Island Business Corporation Act stating that such reduction has been so
authorized, but the number of authorized Preferred Shares shall not be
increased.
(b) Dividends.
(1) Dividend periods ("Dividend Periods") shall commence on January 1,
April 1, July 1 and October 1 in each year and shall end on and include the
day next preceding the first day of the next Dividend Period. The dividend
rate on the Preferred Shares from November 3, 1992 to and including December
31, 1992 (the "Initial Dividend Period") and for each Dividend Period
thereafter will be 9.30% per annum of the stated value thereof. Such
dividends shall be cumulative from November 3, 1992 and shall be payable
when and as declared by the Board, on January 15th, April 15th, July 15th
and October 15th of each year, commencing January 15, 1993. Each such
dividend shall be paid to the holders of record of Preferred Shares as they
appear on the stock register of the Corporation on such record date, not
exceeding 30 days preceding the payment date thereof, as shall be fixed by
the Board. Dividends on account of arrears for any past Dividend Periods may
be declared and paid at any time, without reference to any regular dividend
payment date, to holders of record on such date, not exceeding 45 days
preceding the payment date thereof, as may be fixed by the Board.
(2) No full dividends shall be declared or paid or set apart for payment
on Preferred Stock of any series ranking, as to dividends, on a parity with
or junior to the Preferred Shares for any period unless full cumulative
dividends have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payment on
the Preferred Shares for all dividend payment periods terminating on or
prior to the date of payment of such full cumulative dividends. When
dividends are not paid in full, as aforesaid, upon the Preferred Shares and
any other Preferred Stock ranking on a parity as to dividends with the
Preferred Shares, all dividends declared upon shares of the Preferred Shares
and any other Preferred Stock ranking on a parity as to dividends with the
Preferred Shares shall be declared pro rata so that the amount of dividends
declared per share on the Preferred Shares and such other Preferred Stock
shall in all cases bear to each other the same ratio that accrued dividends
per share on the Preferred Shares and such other Preferred Stock bear to
each other. Holders of the Preferred Shares shall not be entitled to any
dividend, whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided, on the Preferred Shares. No
interest, or sum of money in lieu of interest, shall be payable in respect
of any dividend payment or payments on the Preferred Shares which may be in
arrears.
(3) So long as any of the Preferred Shares are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior
to the Preferred Shares as to dividends and upon liquidation and other than
as provided in paragraph (2) of this Section (b)) shall be declared or paid
or set aside for payment or other distribution declared or made upon the
Common Stock or upon any other stock ranking junior to or on a parity with
the Preferred Shares as to dividends or upon liquidation, nor shall any
Common Stock nor any other stock of the Corporation ranking
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junior to or on a parity with the Preferred Shares as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any shares of any such stock) by the Corporation
(except by conversion into or exchange for stock of the Corporation ranking
junior to the Preferred Shares as to dividends and upon liquidation) unless,
in each case, the full cumulative dividends on all outstanding Preferred
Shares shall have been paid for all past dividend payment periods.
(4) Dividends payable on each Preferred Share for each Dividend Period
shall be computed by annualizing the applicable dividend rate and dividing
by four. Dividends payable on the Preferred Shares for any period less than
a full Dividend Period shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.
(c) Redemption.
(1) The Preferred Shares shall not be redeemable prior to October 15,
1997. On and after October 15, 1997, the Corporation, at its option, may
redeem the Preferred Shares, as a whole or in part, at any time or from time
to time at a redemption price equal to $250 per share plus accrued and
unpaid dividends thereon to the date fixed for redemption.
(2) In the event that fewer than all the outstanding Preferred Shares
are to be redeemed, the number of shares to be redeemed shall be determined
by the Board and the shares to be redeemed shall be determined by lot or pro
rata as may be determined by the Board of the Corporation or by any duly
authorized committee thereof or by any other method as may be determined by
the Board of the Corporation or by any duly authorized committee thereof in
its sole discretion to be equitable, provided that such method satisfies any
applicable requirements of any securities exchange on which the Preferred
Shares are listed.
(3) In the event the Corporation shall redeem Preferred Shares, notice
of such redemption shall be given by first class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the redemption date,
to each holder of record of the shares to be redeemed, at such holder's
address as the same appears on the stock register of the Corporation. Each
such notice shall state: (i) the redemption date; (ii) the number of
Preferred Shares to be redeemed and, if fewer than all the shares held by
such holder are to be redeemed, the number of such shares to be redeemed
from such holder; (iii) the redemption price; (iv) the place or places where
certificates for such shares are to be surrendered for payment of the
redemption price; and (v) that dividends on the shares to be redeemed will
cease to accrue on such redemption date.
(4) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price) dividends on the
Preferred Shares so called for redemption shall cease to accrue, and said
shares shall no longer be deemed to be outstanding, and all rights of the
holders thereof as stockholders of the Corporation (except the right to
receive from the Corporation the redemption price) shall cease. Upon
surrender in accordance with said notice of the certificates for any shares
so redeemed (properly endorsed or assigned for transfer, if the Board of the
Corporation or any duly authorized committee thereof shall so require and
the notice shall so state), such shares shall be redeemed by the Corporation
at the redemption price aforesaid. In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without cost to the holder
thereof.
(5) Any of the Preferred Shares which shall at any time have been
redeemed shall, after such redemption, have the status of authorized but
unissued shares of Preferred Stock, without designation as to series until
such shares are once more designated as part of a particular series by the
Board of the Corporation or any duly authorized committee thereof.
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<PAGE>
(6) Notwithstanding the foregoing provisions of this Section (c), if any
dividends on the Preferred Shares are in arrears, no Preferred Shares shall
be redeemed unless all outstanding Preferred Shares of this series are
simultaneously redeemed, and the Corporation shall not purchase or otherwise
acquire any Preferred Shares; provided, however, that the foregoing shall
not prevent the purchase or acquisition of Preferred Shares pursuant to a
purchase or exchange offer made on the same terms to holders of all
outstanding Preferred Shares.
(d) Conversion or Exchange. The holders of the Preferred Shares shall not
have any rights herein to convert such shares into or exchange such shares for
shares of any other class or classes or of any other series of any class or
classes of capital stock of the Corporation.
(e) Voting. The Preferred Shares shall not have any voting powers, either
general or special, except that
(i) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the Preferred Shares at the time outstanding, given in
person or by proxy, either in writing or by a vote at a meeting called for
the purpose at which the holders of Preferred Shares shall vote together as
a separate class, shall be necessary for authorizing, effecting or
validating the amendment, alteration or repeal of any of the provisions of
the Articles of Incorporation or of any certificate amendatory thereof or
supplemental thereto (including any Certificate of Designation, Preferences
and Rights or any similar document relating to any series of Preferred
Stock) which would adversely affect the preferences, rights, powers or
privileges of the Preferred Shares;
(ii) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the Preferred Shares and all other series of Preferred
Stock ranking on a parity with the Preferred Shares, either as to dividends
or upon liquidation, at the time outstanding, given in person or by proxy,
either in writing or by a vote at a meeting called for the purpose at which
the holders of Preferred Shares and such other series of Preferred Stock
shall vote together as a single class without regard to series, shall be
necessary for authorizing, effecting or validating the creation,
authorization or issue of any shares of any class of stock of the
Corporation ranking prior to the Preferred Shares as to dividends or upon
liquidation, or the reclassification of any authorized stock of the
Corporation into any such prior shares, or the creation, authorization or
issue of any obligation or security convertible into or evidencing the right
to purchase any such prior shares;
(iii) If at the time of any annual meeting of stockholders for the
election of directors a default in preference dividends (as defined below)
on the Preferred Stock shall exist, the number of directors constituting the
Board of the Corporation shall be increased by two, and the holders of the
Preferred Stock of all series shall have the right at such meeting, voting
together as a single class without regard to series, to the exclusion of the
holders of common stock, to elect two directors of the Corporation to fill
such newly created directorships. Such right shall continue until there are
no dividends in arrears upon the Preferred Stock. Each director elected by
the holders of shares of Preferred Stock (herein called a "Preferred
Director") shall continue to serve as such director for the full term for
which he or she shall have been elected, notwithstanding that prior to the
end of such term a default in preference dividends shall cease to exist. Any
Preferred Director may be removed by, and shall not be removed except by,
the vote of the holders of record of the outstanding shares of Preferred
Stock, voting together as a single class without regard to series, at a
meeting of the stockholders, or of the holders of shares of Preferred Stock,
called for the purpose. So long as a default in any preference dividends on
the Preferred Stock shall exist, (a) any vacancy in the office of a
Preferred Director may be filled (except as provided in the following clause
(b)) by an instrument in writing signed by the remaining Preferred Director
and filed with the Corporation and (b) in case of the removal of any
Preferred Director, the vacancy may be filled by the vote of
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the holders of the outstanding shares of Preferred Stock, voting together as
a single class without regard to series, at the same meeting at which such
removal shall be voted. Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for all purposes hereof, to be
a Preferred Director. Whenever the term of office of the Preferred Directors
shall end and a default in preference dividends shall no longer exist, the
number of directors constituting the Board of the Corporation shall be
reduced by two. For the purposes hereof, a "default in preference dividends"
on the Preferred Stock shall be deemed to exist whenever the amount of
accrued dividends upon any series of Preferred Stock shall be equivalent to
six full quarter-yearly dividends or more, and, having so occurred, such
default shall be deemed to exist thereafter until, but only until, all
accrued dividends on all shares of Preferred Stock of each and every series
then outstanding shall have been paid to the end of the last preceding
quarterly dividend period.
(f) Liquidation Rights.
(1) Upon the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation, the holders of the Preferred Shares shall be
entitled to receive, before any payment or distribution shall be made on the
Common Stock or on any other class of stock ranking junior to the Preferred
Shares upon liquidation, the amount of $250 per share, plus a sum equal to
all dividends (whether or not earned or declared) on such shares accrued and
unpaid thereon to the date of final distribution.
(2) Neither the sale of all or substantially all of the property or
business of the Corporation, nor the merger or consolidation of the
Corporation into or with any other corporation, nor the merger or
consolidation of any other corporation into or with the Corporation, shall
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purpose of this Section (f).
(3) After the payment to the holders of the Preferred Shares of the full
preferential amounts provided for in this Section (f), the holders of the
Preferred Shares as such shall have no right or claim to any of the
remaining assets of the Corporation.
(4) In the event the assets of the Corporation available for
distribution to the holders of the Preferred Shares upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to paragraph (l) of this Section (f), no such
distribution shall be made on account of any shares of any other class or
series of Preferred Stock ranking on a parity with the Preferred Shares upon
such dissolution, liquidation or winding up unless proportionate
distributive amounts shall be paid on account of the Preferred Shares,
ratably, in proportion to the full distributable amounts for which holders
of all such parity shares are respectively entitled upon such dissolution,
liquidation or winding up.
(5) Upon the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation, the holders of the Preferred Shares then
outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders all amounts to
which such holders are entitled pursuant to paragraph (1) of this Section
(f) before any payment shall be made to the holders of any class of capital
stock of the Corporation ranking junior upon liquidation to the Preferred
Shares.
(g) Ranking of Classes of Stock. For purposes of this resolution, any stock
of any class or classes of the Corporation shall be deemed to rank:
(1) prior to the Preferred Shares, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to
the receipt of dividends or of amounts distributable upon
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voluntary or involuntary dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the holders of
the Preferred Shares;
(2) on a parity with the Preferred Shares, either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share or sinking fund provisions, if
any, be different from those of the Preferred Shares, if the holders of such
stock shall be entitled to the receipt of dividends or of amounts
distributable upon voluntary or involuntary dissolution, liquidation or
winding up of the Corporation, as the case may be, in proportion to their
respective dividend rates or liquidation prices, without preference or
priority, one over the other, as between the holders of such stock and the
holders of the Preferred Shares; and
(3) junior to the Preferred Shares, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of the
Preferred Shares shall be entitled to receipt of dividends or of amounts
distributable upon voluntary or involuntary dissolution, liquidation or
winding up of the Corporation, as the case may be, in preference or priority
to the holders of shares of such class or classes.
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<PAGE>
EXHIBIT G
FLEET FINANCIAL GROUP, INC.
9.35% CUMULATIVE PREFERRED STOCK
(a) Designation. The designation of this series of Preferred Stock shall be
"9.35% Cumulative Preferred Stock" (hereinafter called the "Preferred Shares")
and the number of shares constituting this series shall be 500,000. Such
Preferred Shares shall have a stated value of $250 per share. The number of
authorized Preferred Shares may be reduced by further resolution duly adopted by
the Board and by the filing of a certificate pursuant to the provisions of the
Rhode Island Business Corporation Act stating that such reduction has been so
authorized, but the number of authorized Preferred Shares shall not be
increased.
(b) Dividends.
(1) Dividend periods ("Dividend Periods") shall commence on January 15,
April 15, July 15 and October 15 in each year and shall end on and include
the day next preceding the first day of the next Dividend Period. The
dividend rate on the Preferred Shares from January 26, 1995 to and including
April 14, 1995 (the "Initial Dividend Period") and for each Dividend Period
thereafter will be 9.35% per annum of the stated value thereof. Such
dividends shall be cumulative from January 26, 1995 and shall be payable
when and as declared by the Board, on January 15, April 15, July 15 and
October 15 of each year, commencing April 15, 1995. Each such dividend shall
be paid to the holders of record of Preferred Shares as they appear on the
stock register of the Corporation on such record date, not exceeding 30 days
preceding the payment date thereof, as shall be fixed by the Board.
Dividends on account of arrears for any past Dividend Periods may be
declared and paid at any time, without reference to any regular dividend
payment date, to holders of record on such date, not exceeding 45 days
preceding the payment date thereof, as may be fixed by the Board.
(2) No full dividends shall be declared or paid or set apart for payment
on Preferred Stock of any series ranking, as to dividends, on a parity with
or junior to the Preferred Shares for any period unless full cumulative
dividends have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payment on
the Preferred Shares for all dividend payment periods terminating on or
prior to the date of payment of such full cumulative dividends. When
dividends are not paid in full, as aforesaid, upon the Preferred Shares and
any other Preferred Stock ranking on a parity as to dividends with the
Preferred Shares, all dividends declared upon shares of the Preferred Shares
and any other Preferred Stock ranking on a parity as to dividends with the
Preferred Shares shall be declared pro rata so that the amount of dividends
declared per share on the Preferred Shares and such other Preferred Stock
shall in all cases bear to each other the same ratio that accrued dividends
per share on the Preferred Shares and such other Preferred Stock bear to
each other. Holders of the Preferred Shares shall not be entitled to any
dividend, whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided, on the Preferred Shares. No
interest, or sum of money in lieu of interest, shall be payable in respect
of any dividend payment or payments on the Preferred Shares which may be in
arrears.
(3) So long as any of the Preferred Shares are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior
to the Preferred Shares as to dividends and upon liquidation and other than
as provided in paragraph (2) of this Section (b)) shall be declared or paid
or set aside for payment or other distribution declared or made upon the
Common Stock or upon any other stock ranking junior to or on a parity with
the Preferred Shares as to dividends or upon liquidation, nor shall any
Common Stock nor any other stock of the Corporation ranking
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junior to or on a parity with the Preferred Shares as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any shares of any such stock) by the Corporation
(except by conversion into or exchange for stock of the Corporation ranking
junior to the Preferred Shares as to dividends and upon liquidation) unless,
in each case, the full cumulative dividends on all outstanding Preferred
Shares shall have been paid for all past dividend payment periods.
(4) Dividends payable on each Preferred Share for each Dividend Period
shall be computed by annualizing the applicable dividend rate and dividing
by four. Dividends payable on the Preferred Shares for any period less than
a full Dividend Period shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.
(c) Redemption.
(1) The Preferred Shares shall not be redeemable prior to January 15,
2000. On and after January 15, 2000, the Corporation, at its option, may
redeem the Preferred Shares, as a whole or in part, at any time or from time
to time at a redemption price equal to $250 per share plus accrued and
unpaid dividends thereon to the date fixed for redemption. Notwithstanding
the foregoing, to the extent applicable law requires, the Preferred Shares
may not be redeemed by the Corporation without the prior approval of the
Board of Governors of the Federal Reserve System.
(2) In the event that fewer than all the outstanding Preferred Shares
are to be redeemed, the number of shares to be redeemed shall be determined
by the Board and the shares to be redeemed shall be determined by lot or pro
rata as may be determined by the Board of the Corporation or by any duly
authorized committee thereof or by any other method as may be determined by
the Board of the Corporation or by any duly authorized committee thereof in
its sole discretion to be equitable, provided that such method satisfies any
applicable requirements of any securities exchange on which the Preferred
Shares are listed.
(3) In the event the Corporation shall redeem Preferred Shares, notice
of such redemption shall be given by first class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the redemption date,
to each holder of record of the shares to be redeemed, at such holder's
address as the same appears on the stock register of the Corporation. Each
such notice shall state: (i) the redemption date; (ii) the number of
Preferred Shares to be redeemed and, if fewer than all the shares held by
such holder are to be redeemed, the number of such shares to be redeemed
from such holder; (iii) the redemption price; (iv) the place or places where
certificates for such shares are to be surrendered for payment of the
redemption price; and (v) that dividends on the shares to be redeemed will
cease to accrue on such redemption date.
(4) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price) dividends on the
Preferred Shares so called for redemption shall cease to accrue, and said
shares shall no longer be deemed to be outstanding, and all rights of the
holders thereof as stockholders of the Corporation (except the right to
receive from the Corporation the redemption price) shall cease. Upon
surrender in accordance with said notice of the certificates for any shares
so redeemed (properly endorsed or assigned for transfer, if the Board of the
Corporation or any duly authorized committee thereof shall so require and
the notice shall so state), such shares shall be redeemed by the Corporation
at the redemption price aforesaid. In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without cost to the holder
thereof.
(5) Any of the Preferred Shares which shall at any time have been
redeemed shall, after such redemption, have the status of authorized but
unissued shares of Preferred Stock, without
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designation as to series until such shares are once more designated as part
of a particular series by the Board of the Corporation or any duly
authorized committee thereof.
(6) Notwithstanding the foregoing provisions of this Section (c), if any
dividends on the Preferred Shares are in arrears, no Preferred Shares shall
be redeemed unless all outstanding Preferred Shares of this series are
simultaneously redeemed, and the Corporation shall not purchase or otherwise
acquire any Preferred Shares; provided, however, that the foregoing shall
not prevent the purchase or acquisition of Preferred Shares pursuant to a
purchase or exchange offer made on the same terms to holders of all
outstanding Preferred Shares.
(d) Conversion or Exchange. The holders of the Preferred Shares shall not
have any rights herein to convert such shares into or exchange such shares for
shares of any other class or classes or of any other series of any class or
classes of capital stock of the Corporation.
(e) Voting. The Preferred Shares shall not have any voting powers, either
general or special, except that
(i) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the Preferred Shares at the time outstanding, given in
person or by proxy, either in writing or by a vote at a meeting called for
the purpose at which the holders of Preferred Shares shall vote together as
a separate class, shall be necessary for authorizing, effecting or
validating the amendment, alteration or repeal of any of the provisions of
the Articles of Incorporation or of any certificate amendatory thereof or
supplemental thereto (including any Certificate of Designation, Preferences
and Rights or any similar document relating to any series of Preferred
Stock) which would adversely affect the preferences, rights, powers or
privileges of the Preferred Shares;
(ii) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the Preferred Shares and all other series of Preferred
Stock ranking on a parity with the Preferred Shares, either as to dividends
or upon liquidation, at the time outstanding, given in person or by proxy,
either in writing or by a vote at a meeting called for the purpose at which
the holders of Preferred Shares and such other series of Preferred Stock
shall vote together as a single class without regard to series, shall be
necessary for authorizing, effecting or validating the creation,
authorization or issue of any shares of any class of stock of the
Corporation ranking prior to the Preferred Shares as to dividends or upon
liquidation, or the reclassification of any authorized stock of the
Corporation into any such prior shares, or the creation, authorization or
issue of any obligation or security convertible into or evidencing the right
to purchase any such prior shares;
(iii) If at the time of any annual meeting of stockholders for the
election of directors a default in preference dividends (as defined below)
on the Preferred Stock shall exist, the number of directors constituting the
Board of the Corporation shall be increased by two, and the holders of the
Preferred Stock of all series shall have the right at such meeting, voting
together as a single class without regard to series, to the exclusion of the
holders of common stock, to elect two directors of the Corporation to fill
such newly created directorships. Such right shall continue until there are
no dividends in arrears upon the Preferred Stock. Each director elected by
the holders of shares of Preferred Stock (herein called a "Preferred
Director") shall continue to serve as such director for the full term for
which he or she shall have been elected, notwithstanding that prior to the
end of such term a default in preference dividends shall cease to exist. Any
Preferred Director may be removed by, and shall not be removed except by,
the vote of the holders of record of the outstanding shares of Preferred
Stock, voting together as a single class without regard to series, at a
meeting of the stockholders, or of the holders of shares of Preferred Stock,
called for the purpose. So long as a default in any preference dividends on
the Preferred Stock shall exist, (a) any vacancy in the office
G-3
<PAGE>
of a Preferred Director may be filled (except as provided in the following
clause (b)) by an instrument in writing signed by the remaining Preferred
Director and filed with the Corporation and (b) in the case of the removal
of any Preferred Director, the vacancy may be filled by the vote of the
holders of the outstanding shares of Preferred Stock, voting together as a
single class without regard to series, at the same meeting at which such
removal shall be voted. Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for all purposes hereof, to be
a Preferred Director. Whenever the term of office of the Preferred Directors
shall end and a default in preference dividends shall no longer exist, the
number of directors constituting the Board of the Corporation shall be
reduced by two. For the purposes hereof, a "default in preference dividends"
on the Preferred Stock shall be deemed to exist whenever the amount of
accrued dividends upon any series of Preferred Stock shall be equivalent to
six full quarter-yearly dividends or more, and, having so occurred, such
default shall be deemed to exist thereafter until, but only until, all
accrued dividends on all shares of Preferred Stock of each and every series
then outstanding shall have been paid to the end of the last preceding
quarterly dividend period.
(f) Liquidation Rights.
(1) Upon the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation, the holders of the Preferred Shares shall be
entitled to receive, before any payment or distribution shall be made on the
Common Stock or on any other class of stock ranking junior to the Preferred
Shares upon liquidation, the amount of $250 per share, plus a sum equal to
all dividends (whether or not earned or declared) on such shares accrued and
unpaid thereon to the date of final distribution.
(2) Neither the sale of all or substantially all of the property or
business of the Corporation, nor the merger or consolidation of the
Corporation into or with any other corporation, nor the merger or
consolidation of any other corporation into or with the Corporation, shall
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purpose of this Section (f).
(3) After the payment to the holders of the Preferred Shares of the full
preferential amounts provided for in this Section (f), the holders of the
Preferred Shares as such shall have no right or claim to any of the
remaining assets of the Corporation.
(4) In the event the assets of the Corporation available for
distribution to the holders of the Preferred Shares upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to paragraph (1) of this Section (f), no such
distribution shall be made on account of any shares of any other class or
series of Preferred Stock ranking on a parity with the Preferred Shares upon
such dissolution, liquidation or winding up unless proportionate
distributive amounts shall be paid on account of the Preferred Shares,
ratably, in proportion to the full distributable amounts for which holders
of all such parity shares are respectively entitled upon such dissolution,
liquidation or winding up.
(5) Upon the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation, the holders of the Preferred Shares then
outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders all amounts to
which such holders are entitled pursuant to paragraph (1) of this Section
(f) before any payment shall be made to the holders of any class of capital
stock of the Corporation ranking junior upon liquidation to the Preferred
Shares.
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<PAGE>
(g) Ranking of Classes of Stock. For purposes of this resolution, any stock
of any class or classes of the Corporation shall be deemed to rank:
(1) prior to the Preferred Shares, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to
the receipt of dividends or of amounts distributable upon voluntary or
involuntary dissolution, liquidation or winding up of the Corporation, as
the case may be, in preference or priority to the holders of the Preferred
Shares;
(2) on a parity with the Preferred Shares, either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share or sinking fund provisions, if
any, be different from those of the Preferred Shares, if the holders of such
stock shall be entitled to the receipt of dividends or of amounts
distributable upon voluntary or involuntary dissolution, liquidation or
winding up of the Corporation, as the case may be, in proportion to their
respective dividend rates or liquidation prices, without preference or
priority, one over the other, as between the holders of such stock and the
holders of the Preferred Shares; and
(3) junior to the Preferred Shares, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of the
Preferred Shares shall be entitled to receipt of dividends or of amounts
distributable upon voluntary or involuntary dissolution, liquidation or
winding up of the Corporation, as the case may be, in preference or priority
to the holders of shares of such class or classes.
G-5
<PAGE>
EXHIBIT H
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR
OTHER SPECIAL RIGHTS, AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF, WHICH HAVE
NOT BEEN SET FORTH IN THE ARTICLES OF INCORPORATION
OR IN ANY AMENDMENT THERETO, OF THE
SERIES V 7.25% PERPETUAL PREFERRED STOCK
OF
FLEET FINANCIAL GROUP, INC.
-------------------
PURSUANT TO SECTION 7-1.1-15 OF THE
RHODE ISLAND BUSINESS CORPORATION ACT
-------------------
We, the undersigned, William C. Mutterperl and Marc C. Leslie, the Senior
Vice President and the Assistant Secretary, respectively, of FLEET FINANCIAL
GROUP, INC., a Rhode Island corporation (hereinafter called the "Corporation"),
DO HEREBY CERTIFY that the following resolution was duly adopted by the Board of
Directors of the Corporation at a meeting duly convened and held on February 21,
1996, at which a quorum was present and acting throughout.
"RESOLVED, that pursuant to authority conferred upon the Board of Directors
(the "Board") of Fleet Financial Group, Inc., a Rhode Island corporation (the
"Corporation"), by the Restated Articles of Incorporation, as amended, (the
"Articles of Incorporation") of the Corporation, the Board hereby creates a
series of Preferred Stock of the Corporation to consist of 1,265,000 shares, and
hereby fixes the voting powers, designations, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of the shares of such series (in addition
to the designations, preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or restrictions thereof, set
forth in the Articles of Incorporation which are applicable to the Preferred
Stock of all classes or series) as follows:
(a) Designation. The designation of the series of Preferred Stock shall be
"Series V 7.25% Perpetual Preferred Stock" (hereinafter called this "Series")
and the number of shares constituting this Series is one million two hundred
sixty-five thousand (1,265,000).
(b) Dividend Rate.
(1) The holders of shares of this Series shall be entitled to receive
dividends thereon at a rate of 7.25% per annum computed on the basis of an
issue price thereof of $250 per share, and no more, payable quarterly out of
the funds of the Corporation legally available for the payment of dividends.
Such dividends shall be cumulative from the date of original issue of such
shares and shall be payable, when, as and if declared by the Board, on
January 15, April 15, July 15 and October 15 of each year, commencing April
15, 1996 (a "Dividend Payment Date"). Each such dividend shall be paid to
the holders of record of shares of this Series as they appear on the stock
register of the Corporation on such record date, not exceeding 30 days
preceding the payment date thereof, as shall be fixed by the Board.
Dividends on account of arrears for any past quarters may be declared and
paid at any time, without reference to any regular dividend payment date, to
holders of record on such date, not exceeding 45 days preceding the payment
date thereof, as may be fixed by the Board.
H-1
<PAGE>
(2) No full dividends shall be declared or paid or set apart for payment
on the Preferred Stock of any series ranking, as to dividends, on a parity
with or junior to this Series for any period unless full cumulative
dividends have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payment on
this Series for all dividend payment periods terminating on or prior to the
date of payment of such full cumulative dividends. When dividends are not
paid in full, as aforesaid, upon the shares of this Series and any other
preferred stock ranking on a parity as to dividends with this Series, all
dividends declared upon shares of this Series and any other class or series
of preferred stock of the Corporation ranking on a parity as to dividends
with this Series shall be declared pro rata so that the amount of dividends
declared per share on this Series and such other preferred stock shall in
all cases bear to each other the same ratio that accrued dividends per share
on the shares of this Series and such other preferred stock bear to each
other. Holders of shares of this Series shall not be entitled to any
dividend, whether payable in cash, property or stocks, in excess of full
cumulative dividends, as herein provided, on this Series. No interest, or
sum of money in lieu of interest, shall be payable in respect of any
dividend payment or payments on this Series which may be in arrears.
(3) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior
to this Series as to dividends and upon liquidation and other than as
provided in paragraph (2) of this Section (b)) shall be declared or paid or
set aside for payment or other distribution declared or made upon the Common
Stock or upon any other stock ranking junior to or on a parity with this
Series as to dividends or upon liquidation, nor shall any Common Stock nor
any other stock of the Corporation ranking junior to or on a parity with
this Series as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such
stock) by the Corporation (except by conversion into or exchange for stock
of the Corporation ranking junior to this Series as to dividends and upon
liquidation) unless, in each case, the full cumulative dividends on all
outstanding shares of this Series shall have been paid for all past dividend
payment periods.
(4) Dividends payable on this Series for any period, including the
period from the original issue of such shares until April 15, 1996, shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
(c) Redemption.
(1) The shares of this Series shall not be redeemable prior to April 15,
2001. On and after April 15, 2001, the Corporation, at its option, may
redeem shares of this Series, in whole or in part, at any time or from time
to time, at a redemption price of $250 per share, plus accrued and unpaid
dividends thereon to the date fixed for redemption.
(2) In the event that fewer than all the outstanding shares of this
Series are to be redeemed pursuant to subsection (1), the number of shares
to be redeemed shall be determined by the Board and the shares to be
redeemed shall be determined by lot or pro rata as may be determined by the
Board or by any other method as may be determined by the Board in its sole
discretion to be equitable.
(3) In the event the Corporation shall redeem shares of this Series
pursuant to subsections (1) or (2), notice of such redemption shall be given
by first class mail, postage prepaid, mailed not less than 30 nor more than
60 days prior to the redemption date, to each holder of record of the shares
to be redeemed, at such holder's address as the same appears on the stock
register of the Corporation. Each such notice shall state: (i) the
redemption date; (ii) the number of shares of this Series to be redeemed
and, if fewer than all the shares held by such holder are to be redeemed,
the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or
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<PAGE>
places where certificates for such shares are to be surrendered for payment
of the redemption price; and (v) that dividends on the shares to be redeemed
will cease to accrue on such redemption date.
(4) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price) dividends on the
shares of this Series so called for redemption under either subsection (1)
or (2) above shall cease to accrue, and said shares shall no longer be
deemed to be outstanding, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease. Upon surrender in accordance
with said notice of the certificates for any shares so redeemed (properly
endorsed or assigned for transfer, if the Board shall so require and the
notice shall so state), such shares shall be redeemed by the Corporation at
the applicable redemption price. In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without cost to the holder
thereof.
(5) Notwithstanding the foregoing provisions of this Section (c), if any
dividends on this Series are in arrears, no shares of this Series shall be
redeemed unless all outstanding shares of this Series are simultaneously
redeemed, and the Corporation shall not purchase or otherwise acquire any
shares of this Series; provided, however, that the foregoing shall not
prevent the purchase or acquisition of shares of this Series pursuant to a
purchase or exchange offer made on the same terms to holders of all
outstanding shares of this Series.
(d) Liquidation Rights.
(1) Upon the dissolution, liquidation or winding up of the Corporation,
the holders of the shares of this Series shall be entitled to receive and be
paid out of the assets of the Corporation available for distribution to its
stockholders, before any payment or distribution shall be made on the Common
Stock or on any other class of stock ranking junior to the shares of this
Series upon liquidation, the amount of $250 per share, plus a sum equal to
all dividends (whether or not earned or declared) on such shares accrued and
unpaid thereon to the date of final distribution.
(2) Neither the sale of all or substantially all the property or
business of the Corporation nor the merger or consolidation of the
Corporation into or with any other corporation or the merger or
consolidation of any other corporation into or with the Corporation, shall
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section (d).
(3) After the payment to the holders of the shares of this Series of the
full preferential amounts provided for in this Section (d), the holders of
this Series as such shall have no right or claim to any of the remaining
assets of the Corporation.
(4) In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to paragraph (1) of this Section (d), no such
distribution shall be made on account of any shares of any other class or
series of Preferred Stock ranking on a parity with the shares of this Series
upon such dissolution, liquidation or winding up unless proportionate
distributive amounts shall be paid on account of the shares of this Series,
ratably, in proportion to the full distributable amounts for which holders
of all such parity shares are respectively entitled upon such dissolution,
liquidation or winding up.
(e) Conversion or Exchange. The holders of shares of this Series shall not
have any rights herein to convert such shares into or exchange such shares for
shares of any other class or classes or of any other series of any class or
classes of capital stock of the Corporation.
H-3
<PAGE>
(f) Voting. The shares of this Series shall not have any voting powers,
either general or special, except that:
(1) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the shares of this Series at the time outstanding, given
in person or by proxy, either in writing or by a vote at a meeting called
for the purpose at which the holders of shares of this Series shall vote
together as a separate class, shall be necessary for authorizing, effecting
or validating the amendment, alteration or repeal of any of the provisions
of the Articles of Incorporation or of any certificate amendatory thereof or
supplemental thereto (including any Certificate of the Voting Powers,
Designations, Preferences and Relative, Participating, Optional or Other
Special Rights, and the Qualifications, Limitations or Restrictions thereof,
or any similar document relating to any series of Preferred Stock) which
would adversely affect the preferences, rights, powers or privileges of this
Series;
(2) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the shares of this Series and all other series of
Preferred Stock ranking on a parity with shares of this Series, either as to
dividends or upon liquidation, at the time outstanding, given in person or
by proxy, either in writing or by a vote at a meeting called for the purpose
at which the holders of shares of this Series and such other series of
Preferred Stock shall vote together as a single class without regard to
series, shall be necessary for authorizing, effecting, increasing or
validating the creation, authorization or issue of any shares of any class
of stock of the Corporation ranking prior to the shares of this Series as to
dividends or upon liquidation, or the reclassification of any authorized
stock of the Corporation into any such prior shares, or the creation,
authorization or issue of any obligation or security convertible into or
evidencing the right to purchase any such prior shares.
(3) If, at the time of any annual meeting of stockholders for the
election of directors, a default in preference dividends on any series of
the Preferred Stock or any other class or series of preferred stock of the
Corporation (other than any other class or series of the Corporation's
preferred stock expressly entitled to elect additional directors to the
Board by a vote separate and distinct from the vote provided for in this
paragraph (3) ("Voting Preferred")) shall exist, the number of directors
constituting the Board shall be increased by two (without duplication of any
increase made pursuant to the terms of any other class or series of the
Corporation's preferred stock other than any Voting Preferred) and the
holders of the Corporation's preferred stock of all classes and series
(other than any such Voting Preferred) shall have the right at such meeting,
voting together as a single class without regard to class or series, to the
exclusion of the holders of Common Stock and the Voting Preferred, to elect
two directors of the Corporation to fill such newly created directorships.
Such right shall continue until there are no dividends in arrears upon
shares of any class or series of the Corporation's preferred stock ranking
prior to or on a parity with shares of this Series as to dividends (other
than any Voting Preferred). Each director elected by the holders of shares
of any series of the Preferred Stock or any other class or series of the
Corporation's preferred stock in an election provided for by this paragraph
(3) (herein called a "Preferred Director") shall continue to serve as such
director for the full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default in preference
dividends shall cease to exist. Any Preferred Director may be removed by,
and shall not be removed except by, the vote of the holders of record of the
outstanding shares of the Corporation's preferred stock entitled to have
originally voted for such director's election, voting together as a single
class without regard to class or series, at a meeting of the stockholders,
or of the holders of shares of the Corporation's preferred stock, called for
that purpose. So long as a default in any preference dividends on any series
of the Preferred Stock or any other class or series of preferred stock of
the Corporation shall exist (other than any Voting Preferred) (A) any
vacancy in the office of a Preferred Director may be filled (except as
provided in the following clause (B)) by an instrument in writing signed by
the remaining Preferred Director and filed with the Corporation and (B) in
the case of the removal of any Preferred
H-4
<PAGE>
Director, the vacancy may be filled by the vote of the holders of the
outstanding shares of the Corporation's preferred stock entitled to have
originally voted for the removed director's election, voting together as a
single class without regard to class or series, at the same meeting at which
such removal shall be voted. Each director appointed as aforesaid shall be
deemed for all purposes hereto to be a Preferred Director.
Whenever the term of office of the Preferred Directors shall end and a
default in preference dividends shall no longer exist, the number of
directors constituting the Board shall be reduced by two. For purposes
hereof, a "default in preference dividends" on any series of the Preferred
Stock or any other class or series of preferred stock of the Corporation
shall be deemed to have occurred whenever the amount of accrued dividends
upon such class or series of the Corporation's preferred stock shall be
equivalent to six full quarterly dividends or more, and, having so occurred,
such default shall be deemed to exist thereafter until, but only until, all
accrued dividends on all such shares of the Corporation's preferred stock of
each and every series then outstanding (other than any Voting Preferred or
shares of any class or series ranking junior to shares of this Series as to
dividends) shall have been paid to the end of the last preceding quarterly
dividend period.
(g) Reacquired Shares. Shares of this Series which have been issued and
reacquired through redemption or purchase shall, upon compliance with an
applicable provision of the Rhode Island Business Corporation Act, have the
status of authorized and unissued shares of Preferred Stock and may be reissued
but only as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board.
(h) Relation to Existing Preferred Classes of Stock. Shares of this Series
are equal in rank and preference with all other series of the Preferred Stock
outstanding on the date of original issue of the shares of this Series and are
senior in rank and preference to the Common Stock and the Cumulative
Participating Junior Preferred Stock of the Corporation.
(i) Relation to Other Preferred Classes of Stock. For purposes of this
resolution, any stock of any class or classes of the Corporation shall be deemed
to rank:
(1) prior to the shares of this Series, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to
the receipt of dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may be, in
preference or priority to the holders of shares of this Series;
(2) on a parity with shares of this Series, either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share or sinking fund provisions, if
any, be different from those of this Series, if the holders of such stock
shall be entitled to the receipt of dividends or of amounts distributable
upon dissolution, liquidation or winding up of the Corporation, as the case
may be, in proportion to their respective dividend rates or liquidation
prices, without preference or priority, one over the other, as between the
holders of such stock and the holders of shares of this Series; and
(3) junior to the shares of this Series, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of shares
of this Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the holders of
shares of such class or classes.
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<PAGE>
IN WITNESS WHEREOF, this Certificate has been made under the seal of Fleet
Financial Group, Inc., and has been signed by the undersigned, William C.
Mutterperl, its Senior Vice President, and Marc C. Leslie, its Assistant
Secretary, respectively, this 21st day of February, 1996.
FLEET FINANCIAL GROUP, INC.
[SEAL]
By
...................................
(Senior Vice President)
By
...................................
(Assistant Secretary)
STATE OF MASSACHUSETTS
COUNTY OF SUFFOLK
In said County and State on this 21st day of February, 1996, personally
appeared before me William C. Mutterperl and Marc C. Leslie, the Senior Vice
President and the Assistant Secretary, respectively, of Fleet Financial Group,
Inc., to me known and known by me to be the parties executing the foregoing
instrument, and they acknowledged said instrument by them executed to be their
free act and deed and the free act and deed of said Fleet Financial Group, Inc.
By
...................................
Notary Public
My Commission Expires:
H-6
<PAGE>
EXHIBIT I
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND
THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF, WHICH HAVE NOT BEEN SET
FORTH IN THE ARTICLES OF INCORPORATION OR IN ANY AMENDMENT THERETO, OF THE
SERIES VI 6.75% PERPETUAL PREFERRED STOCK
OF
FLEET FINANCIAL GROUP, INC.
-------------------
PURSUANT TO SECTION 7-1.1-15 OF THE
RHODE ISLAND BUSINESS CORPORATION ACT
-------------------
We, the undersigned, William C. Mutterperl and Marc C. Leslie, the Senior
Vice President and the Assistant Secretary, respectively, of FLEET FINANCIAL
GROUP, INC., a Rhode Island corporation (hereinafter called the "Corporation"),
DO HEREBY CERTIFY that the following resolution was duly adopted by the Board of
Directors of the Corporation at a meeting duly convened and held on February 21,
1996, at which a quorum was present and acting throughout.
"RESOLVED, that pursuant to authority conferred upon the Board of Directors
(the "Board") of Fleet Financial Group, Inc., a Rhode Island corporation (the
"Corporation"), by the Restated Articles of Incorporation, as amended (the
"Articles of Incorporation"), of the Corporation, the Board hereby creates a
series of Preferred Stock of the Corporation to consist of 690,000 shares, and
hereby fixes the voting powers, designations, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of the shares of such series (in addition
to the designations, preferences and relative, participating, option or other
special rights, and the qualifications, limitations or restrictions thereof, set
forth in the Articles of Incorporation which are applicable to the Preferred
Stock of all classes or series) as follows:
(a) Designation. The designation of the series of Preferred Stock shall be
"Series VI 6.75% Perpetual Preferred Stock" (hereinafter called this "Series")
and the number of shares constituting this Series is Six Hundred Ninety Thousand
(690,000).
(b) Dividend Rate.
(1) The holders of shares of this Series shall be entitled to receive
dividends thereon at a rate of 6.75% per annum computed on the basis of an
issue price thereof of $250 per share, and no more, payable quarterly out of
the funds of the Corporation legally available for the payment of dividends.
Such dividends shall be cumulative from the date of original issue of such
shares and shall be payable, when, as and if declared by the Board, on
January 15, April 15, July 15 and October 15 of each year, commencing April
15, 1996 (a "Dividend Payment Date"). Each such dividend shall be paid to
the holders of record of shares of this Series as they appear on the stock
register of the Corporation on such record date, not exceeding 30 days
preceding the payment date thereof, as shall be fixed by the Board.
Dividends on account of arrears for any past quarters may be declared and
paid at any time, without reference to any regular dividend payment date, to
holders of record on such date, not exceeding 45 days preceding the payment
date thereof, as may be fixed by the Board.
(2) If one or more amendments to the Internal Revenue Code of 1986, as
amended (the "Code"), are enacted that change the percentage of the
dividends received deduction (currently 70%) as specified in Section
243(a)(1) of the Code or any successor provision (the "Dividends
I-1
<PAGE>
Received Percentage"), the amount of each dividend payable per share of this
Series for dividend payments made on or after the date of enactment of such
change shall be adjusted by multiplying the amount of the dividend payable
determined as described above (before adjustment) by a factor which shall be
the number determined in accordance with the following formula (the "DRD
Formula"), and rounding the result to the nearest cent:
1 - .35 (1 - .70)
-------------------
1 - .35 (1 - DRP)
For the purposes of the DRD Formula, "DRP" means the Dividends Received
Percentage applicable to the dividend in question. No amendment to the Code,
other than a change in the percentage of the dividends received deduction
set forth in Section 243(a)(1) of the Code or any successor provision, will
give rise to an adjustment. Notwithstanding the foregoing provisions, in the
event that, with respect to any such amendment, the Corporation shall
receive either an unqualified opinion of independent recognized tax counsel
or a private letter ruling or similar form of authorization from the
Internal Revenue Service to the effect that such an amendment would not
apply to dividends payable on shares of this Series, then any such amendment
shall not result in the adjustment provided for pursuant to the DRD Formula.
The Corporation's calculation of the dividends payable as so adjusted and as
certified accurate as to calculation and reasonable as to method by the
independent certified public accountants then regularly engaged by the
Corporation shall be final and not subject to review.
If any amendment to the Code which reduces the Dividends Received
Percentage is enacted after a dividend payable on a Dividend Payment Date
has been declared, the amount of dividend payable on such Dividend Payment
Date will not be increased; but instead, an amount, equal to the excess of
(x) the product of the dividends paid by the Corporation on such Dividend
Payment Date and the DRD Formula (where the DRP used in the DRD Formula
would be equal to the reduced Dividends Received Percentage) and (y) the
dividends paid by the Corporation on such Dividend Payment Date, will be
payable to holders of record on the next succeeding Dividend Payment Date in
addition to any other amounts payable on such date.
In addition, if prior to May 16, 1996, an amendment to the Code is
enacted that reduces the Dividends Received Percentage and such reduction
retroactively applies to a Dividend Payment Date as to which the Corporation
previously paid dividends on shares of this Series (each an "Affected
Dividend Payment Date"), the Corporation will pay (if declared) additional
dividends (the "Additional Dividends") on the next succeeding Dividend
Payment Date (or if such amendment is enacted after the dividend payable on
such Dividend Payment Date has been declared, on the second succeeding
Dividend Payment Date following the date of enactment) to holders of record
on such succeeding Dividend Payment Date in an amount equal to the excess of
(x) the product of the dividends paid by the Corporation on each Affected
Dividend Payment Date and the DRD Formula (where the DRP used in the DRD
Formula would be equal to the Dividends Received Percentage applied to each
Affected Dividend Payment Date) and (y) the dividends paid by the
Corporation on each Affected Dividend Payment Date.
Additional Dividends will not be paid in respect of the enactment of any
amendment to the Code on or after May 16, 1996 which retroactively reduces
the Dividends Received Percentage, or if prior to May 16, 1996, such
amendment would not result in an adjustment due to the Corporation having
received either an opinion of counsel or tax ruling referred to in the third
preceding paragraph. The Corporation will only make one payment of
Additional Dividends.
In the event that the amount of dividend payable per share of this
Series shall be adjusted pursuant to the DRD Formula and/or Additional
Dividends are to be paid, the Corporation will
I-2
<PAGE>
cause notice of each such adjustment and, if applicable, any Additional
Dividends, to be sent to each holder of record of the shares of this Series
at such holder's address as the same appears on the stock register of the
Corporation.
(3) No full dividends shall be declared or paid or set apart for payment
on the Preferred Stock of any series ranking, as to dividends, on a parity
with or junior to this Series for any period unless full cumulative
dividends have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payment on
this Series for all dividend payment periods terminating on or prior to the
date of payment of such full cumulative dividends. When dividends are not
paid in full, as aforesaid, upon the shares of this Series and any other
preferred stock ranking on a parity as to dividends with this Series, all
dividends declared upon shares of this Series and any other class or series
of preferred stock of the Corporation ranking on a parity as to dividends
with this Series shall be declared pro rata so that the amount of dividends
declared per share on this Series and such other preferred stock shall in
all cases bear to each other the same ratio that accrued dividends per share
on the shares of this Series and such other preferred stock bear to each
other. Holders of shares of this Series shall not be entitled to any
dividend, whether payable in cash, property or stocks, in excess of full
cumulative dividends, as herein provided, on this Series. No interest, or
sum of money in lieu of interest, shall be payable in respect of any
dividend payment or payments on this Series which may be in arrears.
(4) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior
to this Series as to dividends and upon liquidation and other than as
provided in subsection (3) of this Section (b)) shall be declared or paid or
set aside for payment or other distribution declared or made upon the Common
Stock or upon any other stock ranking junior to or on a parity with this
Series as to dividends or upon liquidation, nor shall any Common Stock nor
any other stock of the Corporation ranking junior to or on a parity with
this Series as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such
stock) by the Corporation (except by conversion into or exchange for stock
of the Corporation ranking junior to this Series as to dividends and upon
liquidation) unless, in each case, the full cumulative dividends on all
outstanding shares of this Series shall have been paid for all past dividend
payment periods.
(5) Dividends payable on this Series for any period, including the
period from the original issue of such shares until April 15, 1996, shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
(c) Redemption.
(1) (A) The shares of this Series shall not be redeemable prior to April
15, 2006. On and after April 15, 2006, the Corporation, at its option, may
redeem shares of this Series, in whole or in part, at any time or from time
to time, at a redemption price of $250 per share, plus accrued and unpaid
dividends thereon to the date fixed for redemption.
(B) In the event that fewer than all the outstanding shares of this
Series are to be redeemed pursuant to subsection (1)(A), the number of
shares to be redeemed shall be determined by the Board and the shares to be
redeemed shall be determined by lot or pro rata as may be determined by the
Board or by any other method as may be determined by the Board in its sole
discretion to be equitable.
(2) (A) Notwithstanding subsection (1) above, if the Dividends Received
Percentage is equal to or less than 40% and, as a result, the amount of
dividends on the shares of this Series payable on any Dividend Payment Date
will be or is adjusted upwards as described in Section (b)(2) above, the
Corporation, at its option, may redeem all, but not less than all, of the
outstanding shares of this
I-3
<PAGE>
Series; provided, that within sixty days of the date on which an amendment
to the Code is enacted which reduces the Dividends Received Percentage to
40% or less, the Corporation sends notice to holders of shares of this
Series of such redemption in accordance with subsection (3) below.
(B) Any redemption of the Perpetual Preferred Stock in accordance with
this subsection (2) shall be at the applicable redemption price set forth in
the following table, in each case plus accrued and unpaid dividends (whether
or not declared) thereon to the date fixed for redemption, including any
changes in dividends payable due to changes in the Dividends Received
Percentage and Additional Dividends, if any.
<TABLE>
<CAPTION>
REDEMPTION PRICE
---------------------------------
REDEMPTION PERIOD PER SHARE PER DEPOSITARY SHARE
- ------------------------------------------------------------ --------- --------------------
<S> <C> <C>
February 21, 1996 to April 14, 1997......................... $262.50 $52.50
April 15, 1997 to April 14, 1998............................ 261.25 52.25
April 15, 1998 to April 14, 1999............................ 260.00 52.00
April 15, 1999 to April 14, 2000............................ 258.75 51.75
April 15, 2000 to April 14, 2001............................ 257.50 51.50
April 15, 2001 to April 14, 2002............................ 256.25 51.25
April 15, 2002 to April 14, 2003............................ 255.00 51.00
April 15, 2003 to April 14, 2004............................ 253.75 50.75
April 15, 2004 to April 14, 2005............................ 252.50 50.50
April 15, 2005 to April 14, 2006............................ 251.25 50.25
On or after April 15, 2006.................................. 250.00 50.00
</TABLE>
(3) In the event the Corporation shall redeem shares of this Series
pursuant to subsections (1) or (2) above, notice of such redemption shall be
given by first class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as the same appears on the
stock register of the Corporation. Each such notice shall state: (i) the
redemption date; (ii) the number of shares of this Series to be redeemed
and, if fewer than all the shares held by such holder are to be redeemed,
the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such
shares are to be surrendered for payment of the redemption price; and (v)
that dividends on the shares to be redeemed will cease to accrue on such
redemption date.
(4) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price) dividends on the
shares of this Series so called for redemption under either subsection (1)
or (2) above shall cease to accrue, and said shares shall no longer be
deemed to be outstanding, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease. Upon surrender in accordance
with said notice of the certificates for any shares so redeemed (properly
endorsed or assigned for transfer, if the Board shall so require and the
notice shall so state), such shares shall be redeemed by the Corporation at
the applicable redemption price. In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without cost to the holder
thereof.
(5) Notwithstanding the foregoing provisions of this Section (c), if any
dividends on this Series are in arrears, no shares of this Series shall be
redeemed unless all outstanding shares of this Series are simultaneously
redeemed, and the Corporation shall not purchase or otherwise acquire any
shares of this Series; provided, however, that the foregoing shall not
prevent the purchase or acquisition of shares of this Series pursuant to a
purchase or exchange offer made on the same terms to holders of all
outstanding shares of this Series.
I-4
<PAGE>
(d) Liquidation Rights.
(1) Upon the dissolution, liquidation or winding up of the Corporation,
the holders of the shares of this Series shall be entitled to receive and be
paid out of the assets of the Corporation available for distribution to its
stockholders, before any payment or distribution shall be made on the Common
Stock or on any other class of stock ranking junior to the shares of this
Series upon liquidation, the amount of $250 per share, plus a sum equal to
all dividends (whether or not earned or declared) on such shares accrued and
unpaid thereon to the date of final distribution.
(2) Neither the sale of all or substantially all the property or
business of the Corporation nor the merger or consolidation of the
Corporation into or with any other corporation or the merger or
consolidation of any other corporation into or with the Corporation, shall
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section (d).
(3) After the payment to the holders of the shares of this Series of the
full preferential amounts provided for in this Section (d), the holders of
this Series as such shall have no right or claim to any of the remaining
assets of the Corporation.
(4) In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to paragraph (1) of this Section (d), no such
distribution shall be made on account of any shares of any other class or
series of Preferred Stock ranking on a parity with the shares of this Series
upon such dissolution, liquidation or winding up unless proportionate
distributive amounts shall be paid on account of the shares of this Series,
ratably, in proportion to the full distributable amounts for which holders
of all such parity shares are respectively entitled upon such dissolution,
liquidation or winding up.
(e) Conversion or Exchange. The holders of shares of this Series shall not
have any rights herein to convert such shares into or exchange such shares for
shares of any other class or classes or of any other series of any class or
classes of capital stock of the Corporation.
(f) Voting. The shares of this Series shall not have any voting powers,
either general or special, except that:
(1) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the shares of this Series at the time outstanding, given
in person or by proxy, either in writing or by a vote at a meeting called
for the purpose at which the holders of shares of this Series shall vote
together as a separate class, shall be necessary for authorizing, effecting
or validating the amendment, alteration or repeal of any of the provisions
of the Articles of Incorporation or of any certificate amendatory thereof or
supplemental thereto (including any Certificate of the Voting Powers,
Designations, Preferences and Relative, Participating, Optional or Other
Special Rights, and the Qualifications, Limitations or Restrictions thereof,
or any similar document relating to any series of Preferred Stock) which
would adversely affect the preferences, rights, powers or privileges of this
Series;
(2) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the shares of this Series and all other series of
Preferred Stock ranking on a parity with shares of this Series, either as to
dividends or upon liquidation, at the time outstanding, given in person or
by proxy, either in writing or by a vote at a meeting called for the purpose
at which the holders of shares of this Series and such other series of
Preferred Stock shall vote together as a single class without regard to
series, shall be necessary for authorizing, effecting, increasing or
validating the creation, authorization or issue of any shares of any class
of stock of the Corporation ranking prior to the shares of this Series
I-5
<PAGE>
as to dividends or upon liquidation, or the reclassification of any
authorized stock of the Corporation into any such prior shares, or the
creation, authorization or issue of any obligation or security convertible
into or evidencing the right to purchase any such prior shares.
(3) If, at the time of any annual meeting of stockholders for the
election of directors, a default in preference dividends on any series of
the Preferred Stock or any other class or series of preferred stock of the
Corporation (other than any other class or series of the Corporation's
preferred stock expressly entitled to elect additional directors to the
Board by a vote separate and distinct from the vote provided for in this
paragraph (3) ("Voting Preferred")) shall exist, the number of directors
constituting the Board shall be increased by two (without duplication of any
increase made pursuant to the terms of any other class or series of the
Corporation's preferred stock other than any Voting Preferred) and the
holders of the Corporation's preferred stock of all classes and series
(other than any such Voting Preferred) shall have the right at such meeting,
voting together as a single class without regard to class or series, to the
exclusion of the holders of Common Stock and the Voting Preferred, to elect
two directors of the Corporation to fill such newly created directorships.
Such right shall continue until there are no dividends in arrears upon
shares of any class or series of the Corporation's preferred stock ranking
prior to or on a parity with shares of this Series as to dividends (other
than any Voting Preferred). Each director elected by the holders of shares
of any series of the Preferred Stock or any other class or series of the
Corporation's preferred stock in an election provided for by this paragraph
(3) (herein called a "Preferred Director") shall continue to serve as such
director for the full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default in preference
dividends shall cease to exist. Any Preferred Director may be removed by,
and shall not be removed except by, the vote of the holders of record of the
outstanding shares of the Corporation's preferred stock entitled to have
originally voted for such director's election, voting together as a single
class without regard to class or series, at a meeting of the stockholders,
or of the holders of shares of the Corporation's preferred stock, called for
that purpose. So long as a default in any preference dividends on any series
of the Preferred Stock or any other class or series of preferred stock of
the Corporation shall exist (other than any Voting Preferred) (A) any
vacancy in the office of a Preferred Director may be filled (except as
provided in the following clause (B)) by an instrument in writing signed by
the remaining Preferred Director and filed with the Corporation and (B) in
the case of the removal of any Preferred Director, the vacancy may be filled
by the vote of the holders of the outstanding shares of the Corporation's
preferred stock entitled to have originally voted for the removed director's
election, voting together as a single class without regard to class or
series, at the same meeting at which such removal shall be voted. Each
director appointed as aforesaid shall be deemed for all purposes hereto to
be a Preferred Director.
Whenever the term of office of the Preferred Directors shall end and a
default in preference dividends shall no longer exist, the number of
directors constituting the Board shall be reduced by two. For purposes
hereof, a "default in preference dividends" on any series of the Preferred
Stock or any other class or series of preferred stock of the Corporation
shall be deemed to have occurred whenever the amount of accrued dividends
upon such class or series of the Corporation's preferred stock shall be
equivalent to six full quarterly dividends or more, and, having so occurred,
such default shall be deemed to exist thereafter until, but only until, all
accrued dividends on all such shares of the Corporation's preferred stock of
each and every series then outstanding (other than any Voting Preferred or
shares of any class or series ranking junior to shares of this Series as to
dividends) shall have been paid to the end of the last preceding quarterly
dividend period.
(g) Reacquired Shares. Shares of this Series which have been issued and
reacquired through redemption or purchase shall, upon compliance with an
applicable provision of the Rhode Island Business Corporation Act, have the
status of authorized and unissued shares of Preferred Stock and may be reissued
but only as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board.
I-6
<PAGE>
(h) Relation to Existing Preferred Classes of Stock. Shares of this Series
are equal in rank and preference with all other series of the Preferred Stock
outstanding on the date of original issue of the shares of this Series and are
senior in rank and preference to the Common Stock and the Cumulative
Participating Junior Preferred Stock of the Corporation.
(i) Relation to Other Preferred Classes of Stock. For purposes of this
resolution, any stock of any class or classes of the Corporation shall be deemed
to rank:
(1) prior to the shares of this Series, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to
the receipt of dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may be, in
preference or priority to the holders of shares of this Series;
(2) on a parity with shares of this Series, either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share or sinking fund provisions, if
any, be different from those of this Series, if the holders of such stock
shall be entitled to the receipt of dividends or of amounts distributable
upon dissolution, liquidation or winding up of the Corporation, as the case
may be, in proportion to their respective dividend rates or liquidation
prices, without preference or priority, one over the other, as between the
holders of such stock and the holders of shares of this Series; and
(3) junior to the shares of this Series, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of shares
of this Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the holders of
shares of such class or classes.
IN WITNESS WHEREOF, this Certificate has been made under the seal of Fleet
Financial Group, Inc., and has been signed by the undersigned, William C.
Mutterperl, its Senior Vice President, and Marc C. Leslie, its Assistant
Secretary, respectively, this 21st day of February, 1996.
FLEET FINANCIAL GROUP, INC.
[SEAL]
By
...................................
(Senior Vice President)
By
...................................
(Assistant Secretary)
STATE OF MASSACHUSETTS
COUNTY OF SUFFOLK
In said County and State on this 21st day of February, 1996, personally
appeared before me William C. Mutterperl and Marc C. Leslie, the Senior Vice
President and Assistant Secretary, respectively, of Fleet Financial Group, Inc.,
to me known and known by me to be the parties executing the foregoing
instrument, and they acknowledged said instrument by them executed to be their
free act and deed and the free act and deed of said Fleet Financial Group, Inc.
By
...................................
Notary Public
My Commission Expires:
I-7
<PAGE>
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF, WHICH HAVE NOT BEEN SET FORTH IN THE
ARTICLES OF INCORPORATION OR IN ANY AMENDMENT THERETO OF THE
SERIES VII FIXED/ADJUSTABLE RATE CUMULATIVE PREFERRED STOCK
OF
FLEET FINANCIAL GROUP, INC.
-------------------
PURSUANT TO SECTION 7-1.1-15 OF THE
RHODE ISLAND BUSINESS CORPORATION ACT
-------------------
We, the undersigned, William C. Mutterperl and Marc C. Leslie, the Senior
Vice President and the Assistant Secretary, respectively, of FLEET FINANCIAL
GROUP, INC., a Rhode Island corporation (hereinafter called the "Corporation"),
DO HEREBY CERTIFY that the following resolution was duly adopted by the Board of
Directors of the Corporation at a meeting duly convened and held on March 28,
1996, at which a quorum was present and acting throughout.
"RESOLVED, that pursuant to authority conferred upon the Board of Directors
(the "Board") of Fleet Financial Group, Inc., a Rhode Island corporation (the
"Corporation"), by the Restated Articles of Incorporation, as amended (the
"Articles of Incorporation"), of the Corporation, the Board hereby creates a
series of Preferred Stock of the Corporation to consist of 805,000 shares, and
hereby fixes the voting powers, designations, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of the shares of such series (in addition
to the designations, preferences and relative, participating, option or other
special rights, and the qualifications, limitations or restrictions thereof, set
forth in the Articles of Incorporation which are applicable to the Preferred
Stock of all classes or series) as follows:
(a) Designation. The designation of the series of Preferred Stock shall be
"Series VII Fixed/Adjustable Rate Cumulative Preferred Stock" (hereinafter
called this "Series") and the number of shares constituting this Series is Eight
Hundred Five Thousand (805,000).
(b) Dividend Rate.
(1) The holders of shares of this Series shall be entitled to receive
dividends thereon at a rate of 6.60% per annum computed on the basis of an
issue price thereof of $250 per share, and no more, payable quarterly out of
the funds of the Corporation legally available for the payment of dividends.
Such dividends shall be cumulative from the date of original issue of such
shares and shall be payable, when, as and if declared by the Board, on
January 1, April 1, July 1 and October 1 of each year, commencing July 1,
1996 (a "Dividend Payment Date") through April 1, 2006. Each such dividend
shall be paid to the holders of record of shares of this Series as they
appear on the stock register of the Corporation on such record date, not
exceeding 30 days preceding the payment date thereof, as shall be fixed by
the Board. Dividends on account of arrears for any past quarters may be
declared and paid at any time, without reference to any regular dividend
payment date, to holders of record on such date, not exceeding 45 days
preceding the payment date thereof, as may be fixed by the Board.
After April 1, 2006, dividends on this Series will be payable quarterly,
as, if and when declared by the Board of Directors or a duly authorized
committee thereof on each Dividend Payment Date at the Applicable Rate from
time to time in effect. The Applicable Rate per annum for any dividend
period beginning on or after April 1, 2006 will be equal to .50% plus the
highest of the Treasury Bill Rate, the Ten Year Constant Maturity Rate and
the Thirty Year Constant
<PAGE>
Maturity Rate (each as defined below under "Adjustable Rate Dividends"), as
determined in advance of such dividend period. The Applicable Rate per annum
for any dividend period beginning on or after April 1, 2006 will not be less
than 7.0% nor greater than 13.0% (without taking into account any
adjustments as described below in subsection (3) of this Section (b)).
(2) Except as provided below in this paragraph, the "Applicable Rate"
per annum for any dividend period beginning on or after April 1, 2006 will
be equal to .50% plus the Effective Rate (as defined below), but not less
than 7.0% nor greater than 13.0% (without taking into account any
adjustments as described below in subsection (3) of this Section (b)). The
"Effective Rate" for any dividend period beginning on or after April 1, 2006
will be equal to the highest of the Treasury Bill Rate, the Ten Year
Constant Maturity Rate and the Thirty Year Constant Maturity Rate (each as
defined below) for such dividend period. In the event that the Corporation
determines in good faith that for any reason:
(i) any one of the Treasury Bill Rate, the Ten Year Constant Maturity
Rate or the Thirty Year Constant Maturity Rate cannot be determined for
any dividend period, then the Effective Rate for such dividend period
will be equal to the higher of whichever two of such rates can be so
determined;
(ii) only one of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate or the Thirty Year Constant Maturity Rate can be determined
for any dividend period, then the Effective Rate for such dividend period
will be equal to whichever such rate can be so determined; or
(iii) none of the Treasury Bill Rate, the Ten Year Constant Maturity
Rate or the Thirty Year Constant Maturity Rate can be determined for any
dividend period, then the Effective Rate for the preceding dividend
period will be continued for such dividend period.
Except as described below in this paragraph, the "Treasury Bill Rate"
for each dividend period will be the arithmetic average of the two most
recent weekly per annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate is published during the relevant
Calendar Period (as defined below)) for three-month U.S. Treasury bills, as
published weekly by the Federal Reserve Board (as defined below) during the
Calendar Period immediately preceding the last ten calendar days preceding
the dividend period for which the dividend rate on this Series is being
determined. In the event that the Federal Reserve Board does not publish
such a weekly per annum market discount rate during any such Calendar
Period, then the Treasury Bill Rate for such dividend period will be the
arithmetic average of the two most recent weekly per annum market discount
rates (or the one weekly per annum market discount rate, if only one such
rate is published during the relevant Calendar Period) for three-month U.S.
Treasury bills, as published weekly during such Calendar Period by any
Federal Reserve Bank or by any U.S. Government department or agency selected
by the Corporation. In the event that a per annum market discount rate for
three-month U.S. Treasury bills is not published by the Federal Reserve
Board or by any Federal Reserve Bank or by any U.S. Government department or
agency during such Calendar Period, then the Treasury Bill Rate for such
dividend period will be the arithmetic average of the two most recent weekly
per annum market discount rates (or the one weekly per annum market discount
rate, if only one such rate is published during the relevant Calendar
Period) for all of the U.S. Treasury bills then having remaining maturities
of not less than 80 nor more than 100 days, as published during such
Calendar Period by the Federal Reserve Board or, if the Federal Reserve
Board does not publish such rates, by any Federal Reserve Bank or by any
U.S. Government department or agency selected by the Corporation. In the
event that the Corporation determines in good faith that for any reason no
such U.S. Treasury Bill Rates are published as provided above during such
Calendar Period, then the Treasury Bill Rate for such dividend period will
be the arithmetic average of the per annum market discount rates based upon
2
<PAGE>
the closing bids during such Calendar Period for each of the issues of
marketable non-interest-bearing U.S. Treasury securities with a remaining
maturity of not less than 80 nor more than 100 days from the date of each
such quotation, as chosen and quoted daily for each business day in New York
City (or less frequently if daily quotations are not generally available) to
the Corporation by at least three recognized dealers in U.S. Government
securities selected by the Corporation. In the event that the Corporation
determines in good faith that for any reason the Corporation cannot
determine the Treasury Bill Rate for any dividend period as provided above
in this paragraph, the Treasury Bill Rate for such dividend period will be
the arithmetic average of the per annum market discount rates based upon the
closing bids during such Calendar Period for each of the issues of
marketable interest-bearing U.S. Treasury securities with a remaining
maturity of not less than 80 nor more than 100 days, as chosen and quoted
daily for each business day in New York City (or less frequently if daily
quotations are not generally available) to the Corporation by at least three
recognized dealers in U.S. Government securities selected by the
Corporation.
Except as described below in this paragraph, the "Ten Year Constant
Maturity Rate" for each dividend period will be the arithmetic average of
the two most recent weekly per annum Ten Year Average Yields (as defined
below) (or the one weekly per annum Ten Year Average Yield, if only one such
yield is published during the relevant Calendar Period), as published weekly
by the Federal Reserve Board during the Calendar Period immediately
preceding the last ten calendar days preceding the dividend period for which
the dividend rate on this Series is being determined. In the event that the
Federal Reserve Board does not publish such a weekly per annum Ten Year
Average Yield during such Calendar Period, then the Ten Year Constant
Maturity Rate for such dividend period will be the arithmetic average of the
two most recent weekly per annum Ten Year Average Yields (or the one weekly
per annum Ten Year Average Yield, if only such yield is published during the
relevant Calendar Period), as published weekly during such Calendar Period
by any Federal Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event that a per annum Ten Year Average
Yield is not published by the Federal Reserve Board or by any Federal
Reserve Bank or by any U.S. Government department or agency during such
Calendar Period, then the Ten Year Constant Maturity Rate for such dividend
period will be the arithmetic average of the two most recent weekly per
annum average yields to maturity (or the one weekly per annum average yield
to maturity, if only one such yield is published during the relevant
Calendar Period) for all of the actively traded marketable U.S. Treasury
fixed interest rate securities (other than Special Securities (as defined
below)) then having remaining maturities of not less than eight nor more
than twelve years, as published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board does not publish such yields,
by any Federal Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. In the event that the Corporation determines in
good faith that for any reason the Corporation cannot determine the Ten Year
Constant Maturity Rate for any dividend period as provided above in this
paragraph, then the Ten Year Constant Maturity Rate for such dividend period
will be the arithmetic average of the per annum average yields to maturity
based upon the closing bids during such Calendar Period for each of the
issues of actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities) with a final maturity date not
less than eight nor more than twelve years from the date of each such
quotation, as chosen and quoted daily for each business day in New York City
(or less frequently if daily quotations are not generally available) to the
Corporation by at least three recognized dealers in U.S. Government
securities selected by the Corporation.
Except as described below in this paragraph, the "Thirty Year Constant
Maturity Rate" for each dividend period will be the arithmetic average of
the two most recent weekly per annum Thirty Year Average Yields (as defined
below) (or the one weekly per annum Thirty Year Yield, if only one such
yield is published during the relevant Calendar Period), as published weekly
by the
3
<PAGE>
Federal Reserve Board during the Calendar Period immediately preceding the
last ten calendar days preceding the dividend period for which the dividend
rate on this Series is being determined. In the event that the Federal
Reserve Board does not publish such a weekly per annum Thirty Year Average
Yield during such Calendar Period, then the Thirty Year Constant Maturity
Rate for such dividend period will be the arithmetic average of the two most
recent weekly per annum Thirty Year Average Yields (or the one weekly per
annum Thirty Year Average Yield, if only one such yield is published during
the relevant Calendar Period), as published weekly during such Calendar
Period by any Federal Reserve Bank or by any U.S. Government department or
agency selected by the Corporation. In the event that a per annum Thirty
Year Average Yield is not published by the Federal Reserve Board or by any
Federal Reserve Bank or by any U.S. Government department or agency during
such Calendar Period, then the Thirty Year Constant Maturity Rate for such
dividend period will be the arithmetic average of the two most recent weekly
per annum average yields to maturity (or the one weekly per annum average
yield to maturity, if only one such yield is published during the relevant
Calendar Period) for all of the actively traded marketable U.S. Treasury
fixed interest rate securities (other than Special Securities) then having
remaining maturities of not less than twenty-eight nor more than thirty
years, as published during such Calendar Period by the Federal Reserve Board
or, if the Federal Reserve Board does not publish such yields, by any
Federal Reserve Bank or by any U.S. Government department or agency selected
by the Corporation. In the event that the Corporation determines in good
faith that for any reason the Corporation cannot determine the Thirty Year
Constant Maturity Rate for any dividend period as provided above in this
paragraph, then the Thirty Year Constant Maturity Rate for such dividend
period will be the arithmetic average of the per annum average yields to
maturity based upon the closing bids during such Calendar Period for each of
the issues of actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities) with a final maturity date not
less than twenty-eight nor more than thirty years from the date of such
quotation, as chosen and quoted daily for each business day in New York City
(or less frequently if daily quotations are not generally available) to the
Corporation by at least three recognized dealers in U.S. Government
securities selected by the Corporation.
The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the
Thirty Year Constant Maturity Rate will each be rounded to the nearest five
hundredths of a percent.
The Applicable Rate with respect to each dividend period beginning on or
after April 1, 2006 will be calculated as promptly as practicable by the
Corporation according to the appropriate method described above. The
Corporation will cause notice of each Applicable Rate to be enclosed with
the dividend payment checks next mailed to the holders of this Series.
As used above, the term "Calendar Period" means a period of fourteen
calendar days; the term "Federal Reserve Board" means the Board of Governors
of the Federal Reserve System; the term "Special Securities" means
securities which can, at the option of the holder, be surrendered at face
value in payment of any Federal estate tax or which provide tax benefits to
the holder and are priced to reflect such tax benefits or which were
originally issued at a deep or substantial discount; the term "Ten Year
Average Yield" means the average yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate securities (adjusted to
constant maturities of ten years); and the term "Thirty Year Average Yield"
means the average yield to maturity for actively traded marketable U.S.
Treasury fixed interest rate securities (adjusted to constant maturities of
thirty years.)
(3) If one or more amendments to the Internal Revenue Code of 1986, as
amended (the "Code"), are enacted that change the percentage of the
dividends received deduction (currently 70%) as specified in Section
243(a)(1) of the Code or any successor provision (the "Dividends Received
Percentage"), the amount of each dividend payable per share of this Series
for dividend payments made on or after the date of enactment of such change
shall be adjusted by multiplying
4
<PAGE>
the amount of the dividend payable determined as described above (before
adjustment) by a factor which shall be the number determined in accordance
with the following formula (the "DRD Formula"), and rounding the result to
the nearest cent:
1-.35 (1-.70)
-------------
1-.35 (1-DRP)
For the purposes of the DRD Formula, "DRP" means the Dividends Received
Percentage applicable to the dividend in question. No amendment to the Code,
other than a change in the percentage of the dividends received deduction
set forth in Section 243(a)(1) of the Code or any successor provision, will
give rise to an adjustment. Notwithstanding the foregoing provisions, in the
event that, with respect to any such amendment, the Corporation shall
receive either an unqualified opinion of independent recognized tax counsel
or a private letter ruling or similar form of authorization from the
Internal Revenue Service to the effect that such an amendment would not
apply to dividends payable on shares of this Series, then any such amendment
shall not result in the adjustment provided for pursuant to the DRD Formula.
The Corporation's calculation of the dividends payable as so adjusted and as
certified accurate as to calculation and reasonable as to method by the
independent certified public accountants then regularly engaged by the
Corporation shall be final and not subject to review.
If any amendment to the Code which reduces the Dividends Received
Percentage is enacted after a dividend payable on a Dividend Payment Date
has been declared, the amount of dividend payable on such Dividend Payment
Date will not be increased; but instead, an amount, equal to the excess of
(x) the product of the dividends paid by the Corporation on such Dividend
Payment Date and the DRD Formula (where the DRP used in the DRD Formula
would be equal to the reduced Dividends Received Percentage) and (y) the
dividends paid by the Corporation on such Dividend Payment Date, will be
payable to holders of record on the next succeeding Dividend Payment Date in
addition to any other amounts payable on such date.
In addition, if prior to October 2, 1996, an amendment to the Code is
enacted that reduces the Dividends Received Percentage and such reduction
retroactively applies to a Dividend Payment Date as to which the Corporation
previously paid dividends on shares of this Series (each an "Affected
Dividend Payment Date"), the Corporation will pay (if declared) additional
dividends (the "Additional Dividends") on the next succeeding Dividend
Payment Date (or if such amendment is enacted after the dividend payable on
such Dividend Payment Date has been declared, on the second succeeding
Dividend Payment Date following the date of enactment) to holders of record
on such succeeding Dividend Payment Date in an amount equal to the excess of
(x) the product of the dividends paid by the Corporation on each Affected
Dividend Payment Date and the DRD Formula (where the DRP used in the DRD
Formula would be equal to the Dividends Received Percentage applied to each
Affected Dividend Payment Date) and (y) the dividends paid by the
Corporation on each Affected Dividend Payment Date.
Additional Dividends will not be paid in respect of the enactment of any
amendment to the Code on or after October 2, 1996 which retroactively
reduces the Dividends Received Percentage, or if prior to October 2, 1996,
such amendment would not result in an adjustment due to the Corporation
having received either an opinion of counsel or tax ruling referred to in
the third preceding paragraph. The Corporation will only make one payment of
Additional Dividends.
In the event that the amount of dividend payable per share of this
Series shall be adjusted pursuant to the DRD Formula and/or Additional
Dividends are to be paid, the Corporation will cause notice of each such
adjustment and, if applicable, any Additional Dividends, to be sent to each
holder of record of the shares of this Series at such holder's address as
the same appears on the stock register of the Corporation.
5
<PAGE>
(4) No full dividends shall be declared or paid or set apart for payment
on the Preferred Stock of any series ranking, as to dividends, on a parity
with or junior to this Series for any period unless full cumulative
dividends have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payment on
this Series for all dividend payment periods terminating on or prior to the
date of payment of such full cumulative dividends. When dividends are not
paid in full, as aforesaid, upon the shares of this Series and any other
preferred stock ranking on a parity as to dividends with this Series, all
dividends declared upon shares of this Series and any other class or series
of preferred stock of the Corporation ranking on a parity as to dividends
with this Series shall be declared pro rata so that the amount of dividends
declared per share on this Series and such other preferred stock shall in
all cases bear to each other the same ratio that accrued dividends per share
on the shares of this Series and such other preferred stock bear to each
other. Holders of shares of this Series shall not be entitled to any
dividend, whether payable in cash, property or stocks, in excess of full
cumulative dividends, as herein provided, on this Series. No interest, or
sum of money in lieu of interest, shall be payable in respect of any
dividend payment or payments on this Series which may be in arrears.
(5) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior
to this Series as to dividends and upon liquidation and other than as
provided in subsection (4) of this Section (b)) shall be declared or paid or
set aside for payment or other distribution declared or made upon the Common
Stock or upon any other stock ranking junior to or on a parity with this
Series as to dividends or upon liquidation, nor shall any Common Stock nor
any other stock of the Corporation ranking junior to or on a parity with
this Series as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such
stock) by the Corporation (except by conversion into or exchange for stock
of the Corporation ranking junior to this Series as to dividends and upon
liquidation) unless, in each case, the full cumulative dividends on all
outstanding shares of this Series shall have been paid for all past dividend
payment periods.
(6) Dividends payable on this Series for any period, including the
period from the original issue of such shares until July 1, 1996, shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
(c) Redemption.
(1) (A) The shares of this Series shall not be redeemable prior to April
1, 2006. On and after April 1, 2006, the Corporation, at its option, may
redeem shares of this Series, in whole or in part, at any time or from time
to time, at a redemption price of $250 per share, plus accrued and unpaid
dividends thereon to the date fixed for redemption.
(B) In the event that fewer than all the outstanding shares of this
Series are to be redeemed pursuant to subsection (1)(A), the number of
shares to be redeemed shall be determined by the Board and the shares to be
redeemed shall be determined by lot or pro rata as may be determined by the
Board or by any other method as may be determined by the Board in its sole
discretion to be equitable.
(2) (A) Notwithstanding subsection (1) above, if the Dividends Received
Percentage is equal to or less than 40% and, as a result, the amount of
dividends on the shares of this Series payable on any Dividend Payment Date
will be or is adjusted upwards as described in Section (b)(2) above, the
Corporation, at its option, may redeem all, but not less than all, of the
outstanding shares of this Series; provided, that within sixty days of the
date on which an amendment to the Code is enacted which reduces the
Dividends Received Percentage to 40% or less, the Corporation sends notice
to holders of shares of this Series of such redemption in accordance with
subsection (3) below.
6
<PAGE>
(B) Any redemption of this Series in accordance with this subsection (2)
shall be at the applicable redemption price set forth in the following
table, in each case plus accrued and unpaid dividends (whether or not
declared) thereon to the date fixed for redemption, including any changes in
dividends payable due to changes in the Dividends Received Percentage and
Additional Dividends, if any.
<TABLE><CAPTION>
REDEMPTION PERIOD REDEMPTION PRICE
----------------- ----------------
<S> <C>
April 1, 1996 to March 31, 1997............................. $ 262.50
April 1, 1997 to March 31, 1998............................. 261.25
April 1, 1998 to March 31, 1999............................. 260.00
April 1, 1999 to March 31, 2000............................. 258.75
April 1, 2000 to March 31, 2001............................. 257.50
April 1, 2001 to March 31, 2002............................. 256.25
April 1, 2002 to March 31, 2003............................. 255.00
April 1, 2003 to March 31, 2004............................. 253.75
April 1, 2004 to March 31, 2005............................. 252.50
April 1, 2005 to March 31, 2006............................. 251.25
On or after April 1, 2006................................... 250.00
</TABLE>
(3) In the event the Corporation shall redeem shares of this Series
pursuant to subsections (1) or (2) above, notice of such redemption shall be
given by first class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the redemption date, to each holder of record of the
shares to be redeemed, at such holder's address as the same appears on the
stock register of the Corporation. Each such notice shall state: (i) the
redemption date; (ii) the number of shares of this Series to be redeemed
and, if fewer than all the shares held by such holder are to be redeemed,
the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such
shares are to be surrendered for payment of the redemption price; and (v)
that dividends on the shares to be redeemed will cease to accrue on such
redemption date.
(4) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price) dividends on the
shares of this Series so called for redemption under either subsection (1)
or (2) above shall cease to accrue, and said shares shall no longer be
deemed to be outstanding, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease. Upon surrender in accordance
with said notice of the certificates for any shares so redeemed (properly
endorsed or assigned for transfer, if the Board shall so require and the
notice shall so state), such shares shall be redeemed by the Corporation at
the applicable redemption price. In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without cost to the holder
thereof.
(5) Notwithstanding the foregoing provisions of this Section (c), if any
dividends on this Series are in arrears, no shares of this Series shall be
redeemed unless all outstanding shares of this Series are simultaneously
redeemed, and the Corporation shall not purchase or otherwise acquire any
shares of this Series; provided, however, that the foregoing shall not
prevent the purchase or acquisition of shares of this Series pursuant to a
purchase or exchange offer made on the same terms to holders of all
outstanding shares of this Series.
(d) Liquidation Rights.
(1) Upon the dissolution, liquidation or winding up of the Corporation,
the holders of the shares of this Series shall be entitled to receive and be
paid out of the assets of the Corporation available for distribution to its
stockholders, before any payment or distribution shall be made on
7
<PAGE>
the Common Stock or on any other class of stock ranking junior to the shares
of this Series upon liquidation, the amount of $250 per share, plus a sum
equal to all dividends (whether or not earned or declared) on such shares
accrued and unpaid thereon to the date of final distribution.
(2) Neither the sale of all or substantially all the property or
business of the Corporation nor the merger or consolidation of the
Corporation into or with any other corporation or the merger or
consolidation of any other corporation into or with the Corporation, shall
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section (d).
(3) After the payment to the holders of the shares of this Series of the
full preferential amounts provided for in this Section (d), the holders of
this Series as such shall have no right or claim to any of the remaining
assets of the Corporation.
(4) In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to paragraph (1) of this Section (d), no such
distribution shall be made on account of any shares of any other class or
series of Preferred Stock ranking on a parity with the shares of this Series
upon such dissolution, liquidation or winding up unless proportionate
distributive amounts shall be paid on account of the shares of this Series,
ratably, in proportion to the full distributable amounts for which holders
of all such parity shares are respectively entitled upon such dissolution,
liquidation or winding up.
(e) Conversion or Exchange. The holders of shares of this Series shall not
have any rights herein to convert such shares into or exchange such shares for
shares of any other class or classes or of any other series of any class or
classes of capital stock of the Corporation.
(f) Voting. The shares of this Series shall not have any voting powers,
either general or special, except that:
(1) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the shares of this Series at the time outstanding, given
in person or by proxy, either in writing or by a vote at a meeting called
for the purpose at which the holders of shares of this Series shall vote
together as a separate class, shall be necessary for authorizing, effecting
or validating the amendment, alteration or repeal of any of the provisions
of the Articles of Incorporation or of any certificate amendatory thereof or
supplemental thereto (including any Certificate of the Voting Powers,
Designations, Preferences and Relative, Participating, Optional or Other
Special Rights, and the Qualifications, Limitations or Restrictions thereof,
or any similar document relating to any series of Preferred Stock) which
would adversely affect the preferences, rights, powers or privileges of this
Series;
(2) Unless the vote or consent of the holders of a greater number of
shares shall then be required by law, the consent of the holders of at least
66 2/3% of all of the shares of this Series and all other series of
Preferred Stock ranking on a parity with shares of this Series, either as to
dividends or upon liquidation, at the time outstanding, given in person or
by proxy, either in writing or by a vote at a meeting called for the purpose
at which the holders of shares of this Series and such other series of
Preferred Stock shall vote together as a single class without regard to
series, shall be necessary for authorizing, effecting, increasing or
validating the creation, authorization or issue of any shares of any class
of stock of the Corporation ranking prior to the shares of this Series as to
dividends or upon liquidation, or the reclassification of any authorized
stock of the Corporation into any such prior shares, or the creation,
authorization or issue of any obligation or security convertible into or
evidencing the right to purchase any such prior shares.
8
<PAGE>
(3) If, at the time of any annual meeting of stockholders for the
election of directors, a default in preference dividends on any series of
the Preferred Stock or any other class or series of preferred stock of the
Corporation (other than any other class or series of the Corporation's
preferred stock expressly entitled to elect additional directors to the
Board by a vote separate and distinct from the vote provided for in this
paragraph (3) ("Voting Preferred")) shall exist, the number of directors
constituting the Board shall be increased by two (without duplication of any
increase made pursuant to the terms of any other class or series of the
Corporation's preferred stock other than any Voting Preferred) and the
holders of the Corporation's preferred stock of all classes and series
(other than any such Voting Preferred) shall have the right at such meeting,
voting together as a single class without regard to class or series, to the
exclusion of the holders of Common Stock and the Voting Preferred, to elect
two directors of the Corporation to fill such newly created directorships.
Such right shall continue until there are no dividends in arrears upon
shares of any class or series of the Corporation's preferred stock ranking
prior to or on a parity with shares of this Series as to dividends (other
than any Voting Preferred). Each director elected by the holders of shares
of any series of the Preferred Stock or any other class or series of the
Corporation's preferred stock in an election provided for by this paragraph
(3) (herein called a "Preferred Director") shall continue to serve as such
director for the full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default in preference
dividends shall cease to exist. Any Preferred Director may be removed by,
and shall not be removed except by, the vote of the holders of record of the
outstanding shares of the Corporation's preferred stock entitled to have
originally voted for such director's election, voting together as a single
class without regard to class or series, at a meeting of the stockholders,
or of the holders of shares of the Corporation's preferred stock, called for
that purpose. So long as a default in any preference dividends on any series
of the Preferred Stock or any other class or series of preferred stock of
the Corporation shall exist (other than any Voting Preferred) (A) any
vacancy in the office of a Preferred Director may be filled (except as
provided in the following clause (B)) by an instrument in writing signed by
the remaining Preferred Director and filed with the Corporation and (B) in
the case of the removal of any Preferred Director, the vacancy may be filled
by the vote of the holders of the outstanding shares of the Corporation's
preferred stock entitled to have originally voted for the removed director's
election, voting together as a single class without regard to class or
series, at the same meeting at which such removal shall be voted. Each
director appointed as aforesaid shall be deemed for all purposes hereto to
be a Preferred Director.
Whenever the term of office of the Preferred Directors shall end and a
default in preference dividends shall no longer exist, the number of direc
tors constituting the Board shall be reduced by two. For purposes hereof, a
"default in preference dividends" on any series of the Preferred Stock or
any other class or series of preferred stock of the Corporation shall be
deemed to have occurred whenever the amount of accrued dividends upon such
class or series of the Corporation's preferred stock shall be equivalent to
six full quarterly dividends or more, and, having so occurred, such default
shall be deemed to exist thereafter until, but only until, all accrued
dividends on all such shares of the Corporation's preferred stock of each
and every series then outstanding (other than any Voting Preferred or shares
of any class or series ranking junior to shares of this Series as to
dividends) shall have been paid to the end of the last preceding quarterly
dividend period.
(g) Reacquired Shares. Shares of this Series which have been issued and
reacquired through redemption or purchase shall, upon compliance with an
applicable provision of the Rhode Island Business Corporation Act, have the
status of authorized and unissued shares of Preferred Stock and may be reissued
but only as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board.
(h) Relation to Existing Preferred Classes of Stock. Shares of this Series
are equal in rank and preference with all other series of the Preferred Stock
outstanding on the date of original issue of the
9
<PAGE>
shares of this Series and are senior in rank and preference to the Common Stock
and the Cumulative Participating Junior Preferred Stock of the Corporation.
(i) Relation to Other Preferred Classes of Stock. For purposes of this
resolution, any stock of any class or classes of the Corporation shall be deemed
to rank:
(1) prior to the shares of this Series, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to
the receipt of dividends or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the case may be, in
preference or priority to the holders of shares of this Series;
(2) on a parity with shares of this Series, either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share or sinking fund provisions, if
any, be different from those of this Series, if the holders of such stock
shall be entitled to the receipt of dividends or of amounts distributable
upon dissolution, liquidation or winding up of the Corporation, as the case
may be, in proportion to their respective dividend rates or liquidation
prices, without preference or priority, one over the other, as between the
holders of such stock and the holders of shares of this Series; and
(3) junior to the shares of this Series, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of shares
of this Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the holders of
shares of such class or classes.
IN WITNESS WHEREOF, this Certificate has been made under the seal of Fleet
Financial Group, Inc., and has been signed by the undersigned, William C.
Mutterperl, its Senior Vice President, and Marc C. Leslie, its Assistant
Secretary, respectively, this 28th day of March, 1996.
FLEET FINANCIAL GROUP, INC.
[SEAL]
By /s/ William C. Mutterperl
...................................
(Senior Vice President)
By /s/ Marc C. Leslie
...................................
(Assistant Secretary)
STATE OF MASSACHUSETTS
COUNTY OF SUFFOLK
In said County and State on this 28th day of March, 1996, personally
appeared before me William C. Mutterperl and Marc C. Leslie, the Senior
Vice President and Assistant Secretary, respectively, of Fleet Financial
Group, Inc., to me known and known by me to be the parties executing the
foregoing instrument, and they acknowledged said instrument by them executed
to be their free act and deed and the free act and deed of said Fleet Financial
Group, Inc.
By /s/ Jean K. Donnelly
...................................
Notary Public
My Commission Expires: 1/31/2003
10
EXHIBIT 3(b)
FLEET FINANCIAL GROUP, INC.
-------------------
BYLAWS
ARTICLE 1.
OFFICES.
SECTION 1.01. Registered Office. The registered office of the Corporation in
the State of Rhode Island shall be at No. 50 Kennedy Plaza, City of Providence,
County of Providence. The name of the resident agent in charge thereof shall be
William C. Mutterperl.
SECTION 1.02. Other Offices. The Corporation may also have an office or
offices in such other place or places either within or without the State of
Rhode Island as the Board of Directors may from time to time determine or the
business of the Corporation require.
ARTICLE 2.
MEETINGS OF STOCKHOLDERS.
SECTION 2.01. Place of Meetings. All meetings of the stockholders of the
Corporation shall be held at such place either within or without the State of
Rhode Island as shall be fixed by the Board of Directors and specified in the
respective notices or waivers of notice of said meetings.
SECTION 2.02. Annual Meetings. (a) The annual meeting of the stockholders
for the election of directors and for the transaction of such other business as
may come before the meeting shall be held at the principal office of the
Corporation in the State of Rhode Island or such place as shall be fixed by the
Board of Directors, as eleven o'clock in the forenoon, local time, on the second
Wednesday in April in each year, if not a legal holiday at the place where such
meeting is to be held, and, if a legal holiday, then on the next succeeding
business day not a legal holiday at the same hour. (b) In respect of the annual
meeting for any particular year the Board of Directors may, by resolution fix a
different day, time or place (either within or without the State of Rhode
Island) for the annual meeting. (c) If the election of directors shall not be
held on the day designated herein or the day fixed by the Board, as the case may
be, for any annual meeting, or on the day of any adjourned session thereof, the
Board of Directors shall cause the election to be held at a special meeting as
soon thereafter as conveniently may be. At such special meeting the stockholders
may elect the directors and transact other business with the same force and
effect as at an annual meeting duly called and held.
SECTION 2.03. Special Meetings. A special meeting of the stockholders for
any purpose or purposes properly brought before such meeting may be called at
any time by the Chairman of the Board or President or by order of the Board of
Directors pursuant to a resolution adopted by a majority of the Board.
SECTION 2.04. Notice of Meetings. (a) Except as otherwise required by
statute, notice of each annual or special meeting of the stockholders shall be
given to each stockholder of record entitled to vote at such meeting not less
than 10 days or more than 50 days before the day on which the meeting is to be
held by delivering written notice thereof to him personally or by mailing such
notice, postage prepaid, addressed to him at his post-office address last shown
in the records of the Corporation or by transmitting notice thereof to him at
such address by telegraph, cable or any other available method.
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Every such notice shall state the time and place of the meeting and, in case of
a special meeting, shall state briefly the purposes thereof. (b) Notice of any
meeting of stockholders shall not be required to be given to any stockholder who
shall attend such meeting in person or by proxy or who shall, in person or by
attorney thereunto authorized, waive such notice in writing or by telegraph,
cable or any other available method either before or after such meeting. Notice
of any adjourned meeting of the stockholders shall not be required to be given
except when expressly required by law.
SECTION 2.05. Quorum. (a) At each meeting of the stockholders, except where
otherwise provided by statute, the Articles of Incorporation or these Bylaws,
the holders of record of a majority of the issued and outstanding shares of
stock of the Corporation entitled to vote at such meeting, present in person or
represented by proxy, shall constitute a quorum for the transaction of business.
(b) In the absence of a quorum a majority in interest of the stockholders of the
Corporation entitled to vote, present in person or represented by proxy, or, in
the absence of all such stockholders, any officer entitled to preside at, or act
as secretary of, such meeting, shall have the power to adjourn the meeting from
time to time, until stockholders holding the requisite amount of stock shall be
present or represented. At any such adjourned meeting at which a quorum shall be
present any business may be transacted which might have been transacted at the
meeting as originally called.
SECTION 2.06. Organization. At each meeting of the stockholders the Chairman
of the Board, the President, any Vice President, or any other officer designated
by the Board of Directors, shall act as chairman, and the Secretary or an
Assistant Secretary of the Corporation, or in the absence of the Secretary and
all Assistant Secretaries, a person whom the chairman of such meeting shall
appoint shall act as secretary of the meeting and keep the minutes thereof.
SECTION 2.07. Voting. (a) Except as otherwise provided by law or by the
Articles of Incorporation or these Bylaws, at every meeting of the stockholders
each stockholder shall be entitled to one vote, in person or by proxy, for each
share of capital stock of the Corporation registered in his name on the books of
the Corporation:
(i) on the date fixed pursuant to Section 9.03 of these Bylaws as the
record date for the determination of stockholders entitled to vote at such
meeting; or
(ii) if no record date shall have been fixed, then the record date shall
be at the close of business on the day next preceding the day on which
notice of such meeting is given.
(b) Persons holding stock in a fiduciary capacity shall be entitled to vote
the shares so held. In the case of stock held jointly by two or more executors,
administrators, guardians, conservators, trustees or other fiduciaries, such
fiduciaries may designate in writing one or more of their number to represent
such stock and vote the shares so held, unless there is a provision to the
contrary in the instrument, if any, defining their powers and duties. (c)
Persons whose stock is pledged shall be entitled to vote thereon until such
stock is transferred on the books of the Corporation to the pledgee, and
thereafter only the pledgee shall be entitled to vote. (d) Any stockholder
entitled to vote may do so in person or by his proxy appointed by an instrument
in writing subscribed by such stockholder or by his attorney thereunto
authorized, or by a telegram, cable or any other available method delivered to
the secretary of the meeting; provided, however, that no proxy shall be voted
after 11 months from its date, unless said proxy provides for a longer period.
(e) At all meetings of the stockholders, all matters (except where other
provision is made by law or by the Articles of Incorporation or these Bylaws)
shall be decided by the vote of a majority in interest of the stockholders
entitled to vote thereon, present in person or by proxy, at such meeting, a
quorum being present.
SECTION 2.08. Inspectors. The chairman of the meeting may at any time
appoint two or more inspectors to serve at a meeting of the stockholders. Such
inspectors shall decide upon the qualifications of voters, accept and count the
vote for and against the questions presented, report the results of such
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votes, and subscribe and deliver to the secretary of the meeting a certificate
stating the number of shares of stock issued and outstanding and entitled to
vote thereon and the number of shares voted for and against the questions
presented. The inspectors need not be stockholders of the Corporation, and any
director or officer of the Corporation may be an inspector on any question other
an a vote for or against his election to any position with the Corporation or on
any other question in which he may be directly interested. Before acting as
herein provided each inspector shall subscribe an oath faithfully to execute the
duties of an inspector with strict impartiality and according to the best of his
ability.
SECTION 2.09. List of Stockholders. (a) It shall be the duty of the
Secretary or other officer of the Corporation who shall have charge of its stock
ledger to prepare and make, or cause to be prepared and made, at least 10 days
before every meeting of the stockholders, a complete list of stockholders
entitled to vote thereat, arranged in alphabetical order and showing the address
of each stockholder and the number of shares registered in the name of
stockholder. Such list shall be open during ordinary business hours to the
examination of any stockholder for any purpose germane to the meeting for a
period of at least 10 days prior to the election, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting or, if not so specified, at the place where the meeting is
to be held. (b) Such list shall be produced and kept at the time and place of
the meeting during the whole time thereof and may be inspected by any
stockholder who is present. (c) Upon the willful neglect or refusal of the
directors to produce such list at any meeting for the election of directors,
they shall be ineligible for election to any office at such meeting. (d) The
stock ledger shall be conclusive evidence as to who are the stockholders
entitled to examine the stock ledger and the list of stockholders required by
this Section 2.09 on the books of the Corporation or to vote in person or by
proxy at any meeting of stockholders.
SECTION 2.10. Introduction of Business at a Meeting of Stockholders. (a) At
an annual or special meeting of stockholders, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been
properly brought before an annual or special meeting of stockholders. To be
properly brought before an annual or special meeting of stockholders, business
must be (i) in the case of a special meeting, specified in the notice of the
special meeting (or any supplement thereto) given by the officer of the
Corporation calling such meeting or by or at the direction of the Board, or (ii)
in the case of an annual meeting, properly brought before the meeting by or at
the director of the Board, or otherwise properly brought before the annual
meeting by a stockholder. For business to be properly brought before an annual
meeting of stockholders by a stockholder, the stockholder must have given timely
notice thereof in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice must be delivered to the Secretary of the Corporation, or
mailed to and received at the principal executive offices of the Corporation, or
mailed to and received at the principal executive officers of the Corporation by
the Secretary, not less than 30 days prior to the date of the annual meeting;
provided, however, that if less than 40 days' notice or prior public disclosures
of the date of the annual meeting is given or made to stockholders, notice by
the stockholder to be timely must be so delivered or received not later than the
close of business on the 7th day following the earlier of (i) the day on which
such notice of the date of the meeting was mailed, or (ii) the day on which such
public disclosure was made.
(b) A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before an annual meeting stockholders
(i) a brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, (ii)
the name and address, as they appear on the Corporation's books, of the
stockholder proposing such business and any other stockholders known by such
stockholder to be supporting such proposal, (iii) the class and number of shares
of the Corporation which are beneficially owned by such stockholder on the date
of such stockholder's notice and by any other stockholders known by such
stockholder to be supporting such proposal on the date of such stockholder's
notice, and (iv) any material interest of the stockholder in such proposal.
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(c) Notwithstanding anything in the Bylaws to the contrary, no business
shall be conducted at a meeting of stockholders except in accordance with the
procedures set forth in this Section 2.10. The Chairman of the meeting shall, if
the facts warrant, determine and declare to the meeting that the business was
not properly brought before the meeting in accordance with the procedures
prescribed by the Bylaws, and if he should so determine, he shall so declare to
the meeting and any such business not properly brought before the meeting shall
not be transacted.
ARTICLE 3.
BOARD OF DIRECTORS.
SECTION 3.01. General Powers. The business, property and affairs of the
Corporation shall be managed by the Board of Directors.
SECTION 3.02. Number and Qualifications. (a) The number of directors of the
Corporation, which shall constitute the whole Board of Directors, shall be
determined in accordance with the provisions of Article SEVENTH of the Articles
of Incorporation. (b) A director need not be a stockholder. (c) No person shall
be elected a director who has attained the age of 68 and no person shall
continue to serve as a director after the date of the first meeting of the
stockholders of the Corporation held on or after the date on which such person
attains the age of 68; provided, however, any director serving on the Board as
of December 20, 1995 who has attained the age of 65 on or prior to such date
shall be permitted to continue to serve as a director until the date of the
first meeting of the stockholders of the Corporation held on or after the date
on which such person attains the age of 70.
SECTION 3.03. Classes, Elections and Term. The Board of Directors shall be
divided into three classes, shall be nominated in accordance with the provisions
of Section 3.15 of this Article 3, and shall be elected and shall serve terms in
accordance with the provisions of Article SEVENTH of the Articles of
Incorporation.
SECTION 3.04. Quorum and Manner of Acting. (a) Except as otherwise provided
by statute or by the Articles of Incorporation, a majority of the directors at
the time in office shall constitute a quorum for the transaction of business at
any meeting and the affirmative action of a majority of the directors present at
any meeting at which a quorum is present shall be required for the taking of any
action by the Board of Directors. (b) In the event the Secretary is informed
that one or more of the directors shall be disqualified to vote at such meeting,
then the required quorum shall be reduced by one for each such director so
absent or disqualified; provided, however, that in no event shall the quorum as
adjusted be less than one-third of the total number of directors. (c) In the
absence of a quorum at any meeting of the Board such meeting need not be held;
or a majority of the directors present thereat or, if no director be present,
the Secretary may adjourn such meeting from time to time until a quorum shall be
present. Notice of any adjourned meeting need not be given.
SECTION 3.05. Offices, Place of Meetings and Records. The Board of Directors
may hold meetings, have an office or offices and keep the books and records of
the Corporation at such place or places within or without the State of Rhode
Island as the Board may from time to time determine. The place of meeting shall
be specified or fixed in the respective notices or waivers of notice thereof,
except where otherwise provided by statute by the Articles of Incorporation or
these Bylaws. Meetings of the Board of Directors or any committee of Directors,
including without limitation the Executive Committee, may be held by means of a
telephone conference circuit and connection with such circuit shall constitute
presence at such meetings.
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SECTION 3.06. Annual Meeting. The Board of Directors shall meet for the
purpose of organization, the election of officers and the transaction of other
business, as soon as practicable following each annual election of directors.
Such meeting shall be called and held at the place and time specified in the
notice or waiver of notice thereof as in the case of a special meeting of the
Board of Directors.
SECTION 3.07. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such places and at such times as the Board shall from time to
time by resolution determine. If any day fixed for a regular meeting shall be a
legal holiday at the place where the meeting is to be held, then the meeting
which would otherwise be held on that day shall be held at said place at the
same hour on the next succeeding business day. Notice of regular meetings need
not be given.
SECTION 3.08. Special Meetings; Notice. Special meetings of the Board of
Directors shall be held whenever called by the Chairman of the Board or the
President or by any five of the directors. Notice of each said meeting shall be
mailed to each director, addressed to him at his residence or usual place of
business, at least two days before the day on which the meeting is to be held,
or shall be sent to him at his residence or at such place of business by
telegraph, cable or other available means, or shall be delivered personally or
by telephone, not later than one day before the day on which the meeting is to
be held. Each such notice shall state the time and place of the meeting but need
not state the purposes thereof except as otherwise herein expressly provided.
Notice of any such meeting need not be given to any director, however, if waived
by him in writing or by telegraph, cable or otherwise, whether before or after
such meeting shall be held, or if he shall be present at such meeting.
SECTION 3.09. Organization. At each meeting of the Board of Directors, the
Chairman of the Board or, in his absence, the President, or in the absence of
each of them, a director chosen by a majority of the directors present shall act
as chairman. The Secretary or, in his absence, an Assistant Secretary or, in the
absence of the Secretary and all Assistant Secretaries, a person whom the
chairman of such meeting shall appoint shall act as secretary of such meeting
and keep the minutes thereof.
SECTION 3.10. Order of Business. At all meetings of the Board of Directors
business shall be transacted in the order determined by the Board.
SECTION 3.11. Removal of Directors. Any one or more directors of the
Corporation may be removed at any time, but only in accordance with the
provisions of Article SEVENTH of the Articles of Incorporation.
SECTION 3.12. Resignation. Any director of the Corporation may resign at any
time by giving written notice of his resignation to the Board of Directors, to
the Chairman of the Board, the President, any Vice President or the Secretary of
the Corporation. Such resignation shall take effect at the date of receipt of
such notice or at any later time specified therein; and, unless otherwise
specified therein, in acceptance of such resignation shall not be necessary to
make it effective.
SECTION 3.13. Vacancies and Newly Created Directorships. Vacancies and newly
created directorships shall be filled only in accordance with the provisions of
Article SEVENTH of the Articles of Incorporation.
SECTION 3.14. Compensation. Each director, in consideration of his serving
as such, shall be entitled to receive from the Corporation such amount per annum
or such fees for attendance at directors' meetings, or both, as the Board of
Directors shall from time to time determine, together with reimbursement for the
reasonable expenses incurred by him in connection with the performance of his
duties; provided that nothing herein contained shall be construed to preclude
any director from serving the Corporation or its subsidiaries in any other
capacity and receiving proper compensation therefor.
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SECTION 3.15. Nomination of Directors. (a) Only persons nominated in
accordance with the procedures set forth in this Section shall be eligible for
election as directors. Nominations of persons for election to the Board may be
made at a meeting of stockholders (i) by or at the direction of the Board, or
(ii) by any stockholder of the Corporation entitled to vote for the election of
directors at such meeting who complies with the notice procedures set forth in
this Section 3.15. Such nominations, other than those made by or at the
direction of the Board, shall be made pursuant to timely notice in writing to
the Secretary of the Corporation. To be timely, a stockholder's notice must be
delivered to the Secretary, or mailed to and received at the principal executive
offices of the Corporation by the Secretary, not less than 30 days prior to the
date of a meeting; provided, however, that if fewer than 40 days' notice or
prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be so delivered or
received not later than the close of business on the 7th day following the
earlier of (i) the day on which such notice of the date of such meeting was
mailed, or (ii) the day on which such public disclosure was made.
(b) A stockholder's notice to the Secretary shall set forth (i) as to each
person whom the stockholder proposes to nominate for election or reelection as a
director (w) the name, age, business address and residence address of such
person, (x) the principal occupation or employment of such person, (y) the class
and number of shares of the Corporation which are beneficially owned by such
person on the date of such stockholder's notice (z) any other information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(including without limitation such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if elected); and
(ii) as to the stockholder giving the notice (x) the name and address, as they
appear on the Corporation's books, of such stockholder and any other
stockholders known by such stockholder to be supporting such nominees and (y)
the class and number of shares of the Corporation which are beneficially owned
by such stockholder on the date of such stockholder's notice and by any other
stockholders known by such stockholder to be supporting such nominees on the
date of such stockholder's notice.
(c) No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section 3.15. The Chairman of the meeting shall, if the facts warrant, determine
and declare to the meeting that a nomination was not made in accordance with the
procedures prescribed by the Bylaws, and if he should so determine, he shall so
declare to the meeting and the defective nomination shall be disregarded.
ARTICLE 4.
COMMITTEES.
SECTION 4.01. Executive Committee. The Board of Directors may, by resolution
or resolutions passed by a majority of the whole Board, appoint an Executive
Committee to consist of not less than three nor more than ten members of the
Board of Directors, including the Chairman of the Board and the President, and
shall designate one of the members as its chairman. Notwithstanding any
limitation on the size of the Executive Committee, the Committee may invite
members of the Board to attend one at a time at its meetings. For the purpose of
the meeting he so attends, the invited director shall be entitled to vote on
matters considered at such meeting and shall receive the Executive Committee fee
for such attendance. At any time one additional director may be invited to an
Executive Committee meeting in addition to the rotational invitee and, in such
case, such additional invitee shall also be entitled to vote on matters
considered at such meeting and shall receive the Executive committee fee for
such attendance.
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Each member of the Executive Committee shall hold office, so long as he
shall remain director, until the first meeting of the Board of Directors held
after the next annual election of directors and until his successor is duly
appointed and qualified. The chairman of the Executive Committee or, in his
absence, a member of the Committee chosen by a majority of the members present
shall preside at meetings of the Executive Committee and the Secretary or an
Assistant Secretary of the Corporation, or such other person as the Executive
Committee shall from time to time determine, shall act as secretary of the
Executive Committee.
The Board of Directors, by action of the majority of the whole Board, shall
fill vacancies in the Executive Committee.
SECTION 4.02. Powers. During the intervals between the meetings of the Board
of Directors, the Executive Committee shall have and may exercise all of the
powers of the Board of Directors in all cases in which specific directions shall
not have been given by the Board of Directors.
SECTION 4.03. Procedure; Meetings; Quorum. The Executive Committee shall fix
its own rules of procedure subject to the approval of the Board of Directors,
and shall meet at such times and at such place or places as may be provided by
such rules. At every meeting of the Executive Committee the presence of a
majority of all the members shall be necessary to constitute a quorum and the
affirmative vote of a majority of the members present shall be necessary for the
adoption by it of any resolution. In the absence of a quorum at any meeting of
the Executive Committee such meeting need not be held; or a majority of the
members present thereat or, if no members be present, the secretary of the
meting may adjourn such meeting from time to time until a quorum be present.
SECTION 4.04. Compensation. Each member of the Executive Committee shall be
entitled to receive from the Corporation such fee, if any, as shall be fixed by
the Board of Directors, together with reimbursement for the reasonable expenses
incurred by him in connection with the performance of his duties.
SECTION 4.05. Other Board Committees. The Board of Directors may, from time
to time, by resolution passed by a majority of the whole Board, designate one or
more committees in addition to the Executive Committee, each committee to
consist of two or more of the directors of the Corporation. Any such committee,
to the extent provided in the resolution or in the Bylaws of the Corporation,
shall have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the Corporation. A majority of all the
members of any such committee may determine its action and fix the time and
place of its meetings, unless the Board of Directors shall otherwise provide.
The Board of Directors shall have power to change the members of any committee
at any time, to fill vacancies and to discharge any such committee, either with
or without cause, at any time.
SECTION 4.06. Alternates. The Chairman of the Board or the President may
designate one or more directors as alternate members of any committee who may
act in the place and stead of members who temporarily cannot attend any such
meeting.
SECTION 4.07. Additional Committees. The Board of Directors may from time to
time create such additional committees of directors, officers, employees or
other persons designated by it (or any combination of such persons) for the
purpose of advising the Board, the Executive Committee and the officers and
employees of the Corporation in all such matters as the Board shall deem
advisable and with such functions and duties as the Board shall by resolutions
prescribe.
A majority of all the members of any such committee may determine its action
and fix the time and place of its meetings, unless the Board of Directors shall
otherwise provide. The Board of Directors shall have power to change the members
of any committee at any time, to fill vacancies and to discharge any such
committee, either with or without cause, at any time.
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ARTICLE 5
ACTIONS BY CONSENT.
SECTION 5.01. Consent by Directors. Any action required or permitted to be
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if prior to such action a written consent thereto is
signed by all members of the Board or of such committee, as the case may be, and
such written consent is filed with the minutes of the proceedings of the Board
of such committee.
SECTION 5.02. Consent by Stockholders. Any action required or permitted to
be taken at any meeting of the stockholders may be taken without a meeting upon
the written consent of the holders of shares of stock entitled to vote who hold
the number of shares which in the aggregate are at least equal to the percentage
of the total vote required by statute or the Articles of Incorporation or these
Bylaws for the proposed corporate action, and provided that prompt notice of
such action shall be given to all stockholders who would have been entitled to
vote upon the action if such meeting were held.
ARTICLE 6.
OFFICERS.
SECTION 6.01. Number. The principal offices of the Corporation shall be a
Chairman of the Board, a President, one or more Vice Presidents (the number
thereof and variations in title to be determined by the Board of Directors), a
Treasurer and a Secretary. In addition, there may be such other or subordinate
officers, agents and employees as may be appointed in accordance with the
provision of Section 6.03. Any two or more offices, except those of President
and Secretary, may be held by the same person.
SECTION 6.02. Election, Qualifications and Term of Office. Each officer of
the Corporation, except such officers as may be appointed in accordance with the
provisions of Section 6.03, shall be elected annually by the Board of Directors
and shall hold office until his successor shall have been duly elected and
qualified, or until his death, or until he shall have resigned or shall have
been removed in the manner herein provided. The Chairman of the Board and the
President shall be and remain directors.
SECTION 6.03. Other Officers. The Corporation may have such other officers,
agents and employees as the Board of Directors may deem necessary, including a
Controller, one or more Assistant Controllers, one or more Assistant Treasurers,
and one or more Assistant Secretaries, each of whom shall hold office for such
period, have such authority, and perform such duties as the Board of Directors
or the President may from time to time determine. The Board of Directors may
delegate to any principal officer the power to appoint or remove any such
subordinate officers, agents or employees.
SECTION 6.04. Mandatory Retirement. No officer of the Corporation shall
continue to hold office beyond the first day of the month following or
coinciding with his attaining age 65, unless the Board of Directors specifically
authorizes such continuance on a year-to-year basis.
SECTION 6.05. Removal. Any officer may be removed, either with or without
cause, by a vote of a majority of the whole Board of Directors or, except in
case of any officer elected by the Board of Directors, by any committee or
officer upon whom the power of removal may be conferred by the Board of
Directors.
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SECTION 6.06. Resignation. Any officer may resign at any time by giving
written notice to the Board of Directors, the Chairman of the Board or the
President. Any such resignation shall take effect at the date of receipt of such
notice or at any later time specified therein; and unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 6.07. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filed for the
unexpired portion of the term in the manner prescribed in these Bylaws for
regular election or appointment to such office.
SECTION 6.08. Chairman of the Board. The Chairman of the Board shall preside
at all meetings of the Board of Directors. Subject to definition by the Board of
Directors, he shall have general executive powers and such specific powers and
duties as from time to time may be conferred upon or assigned to him by the
Board of Directors.
SECTION 6.09. President. The President shall preside at all meetings of the
Board of Directors if there be no Chairman or if the Chairman be absent. Subject
to the definition by the Board of Directors, he shall have general executive
powers and such specific powers and duties as from time to time may be conferred
upon or assigned to him by the Board of Directors.
SECTION 6.10. Vice Presidents. Each Vice President shall have such powers
and perform such duties as the Board of Directors or the Executive Committee may
from time to time prescribe or as shall be assigned to him by the President.
SECTION 6.11. Treasurer. The Treasurer shall have charge and custody of, and
be responsible for, all funds and securities of the Corporation, and shall
deposit all such funds to the credit of the Corporation in such banks, trust
companies or other depositaries as shall be selected in accordance with the
provisions of these Bylaws; he shall disburse the funds of the Corporation as
may be ordered by the Board of Directors or the Executive Committee, making
proper vouchers for such disbursements, and shall render to the Board of
Directors or the stockholders, whenever the Board may require him so to do, a
statement of all his transactions as Treasurer or the financial condition of the
Corporation; and, in general, he shall perform all the duties incident to the
office of Treasurer and such other duties as from time to time may be assigned
to him by the Board of Directors, any committee of the Board designated by it so
to act or the President.
SECTION 6.12. Secretary. The Secretary shall record or cause to be recorded
in books provided for the purpose the minutes of the meetings of the
stockholders, the Board of Directors, and all committees of which a secretary
shall not have been appointed; shall see that all notices are duly given in
accordance with the provisions of these Bylaws and as required by law; shall be
custodian of all corporate records (other than financial) and of the seal of the
Corporation and see that the seal is affixed to all documents the execution of
which on behalf of the Corporation under its seal is duly authorized in
accordance with the provisions of these Bylaws; shall keep, or cause to be kept,
the list of stockholders as required by Section 2.09, which include post-office
addresses of the stockholders and the number of shares held by them,
respectively, and shall make or cause to be made, all proper changes therein,
shall see that the books, reports, statements, certificates and all other
documents and records required by law are properly kept and filed; and, in
general, shall perform all duties incident to the office of Secretary and such
other duties as may from time to time be assigned to him by the Board of
Directors, the Executive Committee or the President.
SECTION 6.13. Salaries. The salaries of the principal officers of the
Corporation shall be fixed from time to time by the Board of Directors or a
special committee thereof, and none of such officers shall be prevented from
receiving a salary by reason of the fact that he is a director of the
Corporation.
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ARTICLE 7.
INDEMNIFICATION
SECTION 7.01. Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter, a "proceeding"), by reason of the fact that such person, or a
person of whom such person is the legal representative, is or was a director,
officer, employee or agent of the Corporation or, while a director, officer,
employee or agent of the Corporation, is or was serving at the request of the
Corporation as a director, officer, employee or agent of any foreign or domestic
corporation, partnership, joint venture, trust, other enterprise or employee
benefit plan, whether the basis of such proceeding is alleged action (or failure
to act) in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest extent
permitted by the Rhode Island General Laws, as the same shall exist from time to
time (but, in the case of an amendment to said General Laws, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said General Laws permitted the Corporation to provide prior to such
amendment) against all expenses, liability and loss (including judgments,
penalties, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees) actually incurred by such person in connection therewith, and
such indemnification shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of such
person's heirs, executors and administrators; provided, however, that the
Corporation shall indemnify any such person seeking indemnity in connection with
a proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the Board of Directors of the Corporation.
Such right shall be a contract right and shall include the right to be paid by
the Corporation for expenses incurred in defending any such proceeding in
advance of its final disposition; provided, however, that, if the Rhode Island
General Laws so require, the payment of such expenses incurred by a director,
officer, employee or agent in such person's capacity as a director, officer,
employee or agent of the Corporation (and not in any other capacity in which
service was or is rendered by such person while a director, officer, employee or
agent, including, without limitation, service to an employee benefit plan) in
advance of the final disposition of such proceeding, shall be made only upon
delivery to the Corporation by the indemnified party of a written affirmation of
such party's good faith belief that such party has met the applicable standards
of conduct and of an undertaking, by or on behalf of such party, to repay all
amounts so advanced if it shall ultimately be determined that such party is not
entitled to be indemnified under this Section 7.01 or otherwise. Determinations
and authorizations of payment under this Section 7.01 shall be made in the same
manner as the determination that indemnification is permissible.
SECTION 7.02. Right of Claimant to Bring Suit. If a claim under Section 7.01
is not paid in full by the Corporation within 90 days after a written claim has
been received by the Corporation, the claimant may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce the claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
written affirmation and undertaking has been tendered to the Corporation) that
the claimant has not met the standards of conduct which make it permissible
under the Rhode Island General Laws for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense by clear
and convincing evidence shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, its stockholders or independent
legal counsel) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances, nor
an actual determination by the Corporation (including its
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Board of Directors, its stockholders or independent legal counsel) that the
claimant has not met such applicable standards of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standards of conduct.
SECTION 7.03. Non-Exclusivity of Rights. The rights conferred on any person
by Sections 7.01 and 7.02 of this Article 7 shall not be exclusive of any other
right which such person may have or hereafter acquire under any statute,
provisions of the Articles of Incorporation, Bylaws, agreement, vote of
stockholders or disinterested directors or otherwise.
SECTION 7.04. Insurance. The Corporation may purchase and maintain
insurance, at its expense, to protect itself and any person who is or was a
director, officer, employee or agent of the Corporation, or who, while a
director, officer, employee or agent of the Corporation, is or was serving at
the request of the Corporation as a director, officer, partner, trustee,
employee or agent of any foreign or domestic corporation, partnership, joint
venture, trust, other enterprise or employee benefit plan, against any such
expenses, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expenses, liability or loss under the
Rhode Island General Laws.
ARTICLE 8.
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 8.01. Execution of Contracts. Unless the Board of Directors or the
Executive Committee shall otherwise determine, the Chairman of the Board, the
President, any Vice President or Treasurer and the Secretary or any Assistant
Secretary may enter into any contracts or execute any contract or other
instrument, the execution of which is not otherwise specifically provided for,
in the name and on behalf of the Corporation. The Board of Directors, or any
committee designated thereby with power so to act, except as otherwise provided
in these Bylaws, may authorize any other or additional officer or officers or
agent or agents of the Corporation to enter into any contract or execute and
deliver any instrument in the name and on behalf of the Corporation, and such
authorized may be general or confined to specific instances. Unless authorized
so to do by these Bylaws or by the Board of Directors or by any such committee,
no officer, agent or employee shall have any power or authority to bind the
Corporation by any contract or engagement or to pledge its credit or to render
it liable pecuniary for any purpose or to any amount.
SECTION 8.02. Loans. No loan shall be contracted on behalf of the
Corporation, and no evidence of indebtedness shall be issued, endorsed or
accepted by its name, unless authorized by the Board of Directors or Executive
Committee or other committee designated by the Board so to act. Such authority
may be general or confined to specific instances. When so authorized, the
officer or officers thereunto authorized may effect loans and advances at any
time for the Corporation from any bank, trust company or other institution, or
from any firm, corporation or individual, and for such loans and advances may
make, executive and deliver promissory notes or other evidences of indebtedness
and liabilities of the Corporation, may mortgage, pledge, hypothecate or
transfer any real or personal property at any time owned or held by the
Corporation, and to that end execute instruments of mortgage or pledge or
otherwise transfer such property.
SECTION 8.03. Checks, Drafts, Etc. All checks, drafts, bills of exchange or
other orders for the payment of money, obligations, notes, or other evidence of
indebtedness, bills of lading, warehouse receipts and insurance certificates of
the Corporation, shall be signed or endorsed by such officer or officers, agent
or agents, attorney or attorneys, employee or employees, of the Corporation as
shall from time to time be determined by resolution of the Board of Directors or
Executive Committee or other committee designated by the Board so to act.
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SECTION 8.04. Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositaries as the Board of Directors or
Executive Committee or other committee designated by the Board so to act may
from time to time designate, or as may be designated by any officer or officers
or agent or agents of the Corporation to whom such power may be delegated by the
Board of Directors or Executive Committee or other committee designated by the
Board so to act and, for the purpose of such deposit and for the purposes of
collection for the account of the Corporation, all checks, drafts and other
orders for the payment of money which are payable to the order of the
Corporation may be endorsed, assigned and delivered by any officer, agent or
employee of the Corporation or in such manner as may from time to time be
designated or determined by resolution of the Board of Directors or Executive
Committee or other committee designated by the Board so to act.
SECTION 8.05. Proxies in Respect of Securities of Other Corporations. Unless
otherwise provided by resolution adopted by the Board of Directors or the
Executive Committee or other committee so designated to act by the Board, the
Chairman of the Board or the President or any Vice President may from time to
time appoint an attorney or attorneys or agent or agents of the Corporation, in
the name and on behalf of the Corporation, to cast votes which the Corporation
may be entitled to cast as the holder of stock or other securities in any other
corporation, association or trust any of whose stock or other securities may be
held by the Corporation, at meetings of the holders of the stock or other
securities of such other corporation, association or trust, or to consent in
writing, in the name of the Corporation as such holder to any action by such
other corporation, association or trust, and may instruct the person or persons
so appointed as to the manner of casting such votes or giving such consent, and
may execute or cause to be executed in the name and on behalf of the Corporation
and under its corporate seal, or otherwise, all such written proxies or other
instruments as he may deem necessary or proper in the premises.
ARTICLE 9.
BOOKS AND RECORDS.
SECTION 9.01. Place. The books and records of the Corporation may be kept at
such places within or without the State of Rhode Island as the Board of
Directors from time to time may determine. The stock record books and the blank
stock certificate books shall be kept by the Secretary or by any other officer
or agent designated by the Board of Directors.
SECTION 9.02. Addresses of Stockholders. Each stockholder shall furnish to
the Secretary of the Corporation or to the transfer agent of the Corporation an
address at which notices of meetings and all other corporate notices may be
served upon or mailed to him, and if any stockholder shall fail to designate
such address, corporate notices may be served upon him by mail, postage prepaid,
to him at his post-office address last known to the Secretary or to the transfer
agent of the Corporation or by transmitting a notice thereof to him at such
address by telegraph, cable or other available method.
SECTION 9.03. Record Dates. The Board of Directors may fix in advance a
date, not exceeding 60 days preceding the date of any meeting of stockholders,
or the date for the payment of any dividend, or the date for the allotment of
any rights, or the date when any change or conversion or exchange of capital
stock of the Corporation shall go into effect, or a date in connection with
obtaining such consent, as a record date for the determination of the
stockholders entitled to notice of, and to vote at, any such meeting or any
adjournment thereof, or entitled to receive payment of any such dividend, or to
any such allotment of rights, or to exercise the rights in respect to any
change, conversion or exchange of capital stock of the Corporation, or to give
such consent, and in each case such stockholders of record on the date so fixed
shall be entitled to notice of, or to vote at, such meeting and any adjournment
thereof, or to
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receive payment of such dividend, or to receive such allotment of rights, or to
exercise such rights or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the Corporation after
any such record date fixed as aforesaid.
SECTION 9.04. Audit of Books and Accounts. The books and accounts of the
Corporation shall be audited at least once in each fiscal year by certified
public accountants of good standing selected by the Board of Directors.
ARTICLE 10.
SHARES AND THEIR TRANSFER.
SECTION 10.01. Certificates of Stock. Every owner of stock of the
Corporation shall be entitled to have a certificate certifying the number of
shares owned by him in the Corporation and designating the class of stock to
which such shares belong, which shall otherwise be in such form as the Board of
Directors shall prescribe. Each such certificate shall be signed by the Chairman
of the Board or the President or a Vice President and the Treasurer or any
Assistant Treasurer or the Secretary or any Assistant Secretary of the
Corporation; provided, however, that where such certificate is signed or
countersigned by a transfer agent or registrar the signatures of such officers
of the Corporation and the seal of the Corporation may be in facsimile form. In
case any officer or officers who shall have signed, or whose facsimile signature
or signatures shall have been used on, any such certificate or certificates
shall cease to be such officer or officers of the Corporation, whether because
of death, resignation or otherwise, before such certificate or certificates
shall have been delivered by the Corporation, such certificate or certificates
may nevertheless be issued and delivered by the Corporation as though the person
or persons who signed such certificate or whose facsimile signature or
signatures shall have been used thereon had not ceased to be such officer or
officers of the Corporation.
SECTION 10.02. Record. A record shall be kept of the name of the person,
firm or corporation owning the stock represented by each certificate for stock
of the Corporation issued, the number of shares represented by each such
certificate, the date thereof, and, in the case of cancellation, the date of
cancellation. The person in whose name shares of stock stand on the books of the
Corporation shall be deemed the owner thereof for all purposes as regards to the
Corporation.
SECTION 10.03. Transfer of Stock. Transfer of shares of stock of the
Corporation shall be made on the books of the Corporation only by the registered
holder thereof, or by his attorney thereunto authorized, and on the surrender of
the certificate or certificates for such shares properly endorsed.
SECTION 10.04. Transfer Agent and Registrar; Regulations. The Corporation
shall, if and whenever the Board of Directors or Executive Committee shall so
determine, maintain one or more transfer offices or agencies, each in charge of
a transfer agent designated by the Board of Directors, where the shares of the
capital stock of the Corporation shall be directly transferable, and also if and
whenever the Board of Directors shall so determine, maintain one or more
registry offices, each in charge of a registrar designated by the Board of
Directors, where such shares of stock shall be registered. The Board of
Directors may make such rules and regulations as it may deem expedient, not
inconsistent with these Bylaws, concerning the issue, transfer and registration
of certificate for shares of the capital stock of the Corporation.
SECTION 10.05. Lost, Destroyed or Mutilated Certificates. In case of the
alleged loss or destruction or the mutilation of a certificate representing
capital stock of the Corporation, a new certificate may be issued in place
thereof, in the manner and upon such terms as the Board of Directors may
prescribe.
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ARTICLE 11.
SEAL.
The Board of Directors shall provide a corporate seal, which shall be in the
form of a circle and shall bear the name of the Corporation and the words and
figures "Incorporated 1970, Rhode Island".
ARTICLE 12
FISCAL YEAR.
The fiscal year of the Corporation shall be the calendar year.
ARTICLE 13.
WAIVER OF NOTICE.
Whenever any notice whatever is required to be given by statute, these
Bylaws or the Articles of Incorporation, a waiver thereof in writing, signed by
the person or persons entitled to said notice, whether before or after the time
state therein, shall be deemed equivalent thereto.
ARTICLE 14.
AMENDMENTS.
These Bylaws may be altered, amended or repeated in whole or in part, and
new Bylaws may be adopted in whole or in part, only by the affirmative vote of
80% of the Board of Directors and a majority of the Continuing Directors (as
defined in Article SEVENTH of the Articles of Incorporation) or by the
stockholders as provided in the Articles of Incorporation and applicable law. No
amendment may be made unless the Bylaw, as amended, is consistent with the
requirements of law and the Articles of Incorporation.
14
FLEET FINANCIAL GROUP, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN NO. 1
(1996 RESTATEMENT)
<PAGE>
SECTION 1. PURPOSE OF THE PLAN; SELECTION OF PARTICIPANTS; PLAN FROZEN
Fleet Financial Group, Inc. (the "Employer") established this
Executive Deferred Compensation Plan No. 1 (the "Plan"), originally
effective as of December 12, 1984, in order to assist it and its
subsidiaries and affiliates in retaining executive level employees by
providing such employees with the opportunity to defer receipt of certain
amounts of compensation; thereby giving them flexibility in their personal
tax and financial planning. The Employer hereby amends and restates the
Plan effective as of January 1, 1996. In addition, amounts of compensation
deferred pursuant to Section 2 of the Plan will provide additional death
and retirement benefits for them. The executives eligible to participate
in the Plan will be selected by the Human Resources and Planning Committee,
or any successor committee, of the Board of Directors of the Employer (the
"Committee") from time to time. When an executive has been designated as
eligible for participation in the Plan, he or she will be promptly notified
by the Committee and given the opportunity to make an election to defer
compensation under Section 2 and/or Section 3 of the Plan. (An executive
who makes such an election is hereinafter referred to as an "Employee").
Notwithstanding any provision contained herein to the contrary, effective
as of April 1, 1989 the Plan was frozen and no subsequent elections to
defer compensation can be made.
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<PAGE>
SECTION 2. RETIREMENT AND DEATH BENEFITS
(a) An Employee may elect to defer receipt of salary, awards under
the Employer's Corporate Executive Incentive Plan and other compensation
over a period not exceeding seven years (the "deferral period") in such
amount as shall be selected by him, but not less than a total of $20,000 or
more than a total of $50,000. The total amount to be deferred during the
deferral period shall be specified by the Employee in his or her deferred
compensation agreement. The commitment made in said agreement shall be
irrevocable unless the Committee, at the request of the Employee, waives
the requirement to defer with respect to amounts which have not been
deferred for the calendar year prior to the date the request is received by
the Committee. The Employee shall have the right to change the amount to
be deferred for any future year, provided such change is made in writing
and delivered to the Committee prior to January 1 of the year in which the
amount of deferred compensation which is to be changed would be earned, and
also provided that no such change may be made if it would reduce the total
amount to be deferred under the Employee's deferred compensation agreement.
Amounts deferred shall be deducted first from any incentive compensation
award which the Employee would otherwise receive in a year for which his or
her deferral election is in effect, and any remaining amount to be deferred
for such year shall be withheld from the Employee's salary in approximately
equal amounts beginning in the month following the month in which incentive
compensation awards are paid.
(b) Interest equivalents, for Employees who became participants in
the Plan prior to December 1, 1986, will be credited monthly to the amounts
of deferred compensation in accordance with the following schedule:
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<PAGE>
Interest Rate on Cumulative
Period of Deferral Deferred Amounts
------------------ ---------------------------
Year 1 6%
Year 2 7 1/2%
Year 3 9%
Year 4 10 1/2%
Year 5 12%
Year 6 13 1/2%
Year 7 15%
Interest equivalents, for Employees who became participants in the
Plan on or after December 1, 1986 and prior to November 1, 1988, will be
credited monthly to the amounts of deferred compensation in accordance with
the following schedule:
Interest Rate on Cumulative
Period of Deferral Deferred Amounts
------------------ ---------------------------
Year 1 5%
Year 2 5 3/4%
Year 3 6 1/2%
Year 4 7 1/4%
Year 5 8%
Year 6 8 3/4%
Year 7 10%
Interest equivalents, for Employees who become participants in the
Plan on or after November 1, 1988, will be credited monthly to the amounts
of deferred compensation in accordance with the following schedule:
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<PAGE>
Interest Rate on Cumulative
Period of Deferral Deferred Amounts
------------------ ---------------------------
Year 1 5%
Year 2 5 3/4%
Year 3 6 1/2%
Year 4 7 1/4%
Year 5 7 3/4%
Year 6 8 1/4%
Year 7 9%
(c) Compensation which is deferred under paragraph (a) shall be paid
by the Employer to the Employee or beneficiary as hereinafter provided:
(i) If the Employee's employment with the Employer is terminated
before all amounts to be deferred under paragraph (a) have been deferred,
the Employee shall receive a lump sum payment equal to the total amount of
compensation deferred at the time of termination plus interest equivalents
credited under paragraph (b) hereof as of the first day of the third month
following the date of the Employee's termination of employment with the
Employer.
(ii) If the Employee's employment with the Employer is terminated
after all amounts which are scheduled to be deferred under paragraph (a)
hereof have been deferred but prior to the expiration of seven years after
the initial amount is deferred, the Employee will receive a lump sum
payment equal to the total amount of his or her deferred compensation plus
interest equivalents as of the first day of the third month following the
date of the Employee's termination of employment with the Employer.
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<PAGE>
(iii) If the Employee's employment with the Employer terminates after
seven years following the date the initial amount is deferred for him or
her hereunder but prior to attaining age 55 and completing five years of
continuous service with the Employer (or its subsidiary or affiliate) and
prior to attaining age 65 will be entitled to receive a lump sum payment
equal to the total amount of compensation deferred plus interest
equivalents at the rate of fifteen percent (15%) (ten percent (10%) for
Employees who become participants in the Plan on or after December 1, 1986
and prior to November 1, 1988, and nine percent (9%) for Employees who
become participants in the Plan on or after November 1, 1988). The lump
sum payment shall be made as soon as reasonably practicable following
termination of the employment; provided, however, the Employee may, with
-------- -------
the prior written approval of the Committee, irrevocably elect prior
to his or her termination of employment to defer receipt of his or her
lump sum payment to a specified date not later than his or her 65th
birthday.
(iv) If the Employee's employment with the Employer terminates after
attaining age 55 and completing five years of continuous service with the
Employer (or its subsidiary or affiliate) or after attaining age 65 will be
entitled to receive retirement income for fifteen years in annual
installments in such amount as shall be set forth in his or her
compensation deferral agreement, the first such installment to be paid
within thirty days after retirement; provided, however, with the prior
-------- -------
written consent of the Committee, an Employee may irrevocably elect prior
to his or her retirement to receive such amount in annual installments for
less than fifteen years or in a lump sum
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<PAGE>
payment. An Employee who retires after attaining age 55 and completing
five years of service with the Employer (or its subsidiary or affiliate)
(or who under a severance or other special arrangement with the Employer is
treated as having attained age 55 and completed five years of service), but
prior to age 65 may, with the prior written approval of the Committee,
irrevocably elect prior to his or her retirement to defer receipt of his or
her benefit to a specified date not later than his or her 65th birthday.
If retirement occurs before or after age 65, the amount of retirement
income will be less or greater than the amount specified in the agreement
but will be calculated as though the amount deferred had been credited with
interest at fifteen percent (15%) (ten percent (10%) for Employees who
become participants in the Plan on or after December 1, 1986 and prior to
November 1, 1988 and nine percent (9%) for Employees who become
participants in the Plan on or after November 1, 1988).
(v) If the Employee's employment with the Employer (or its subsidiary
or affiliate) terminates prior to attaining age 55 and completing ten years
of service with the employer (or its subsidiary or affiliate) due to "Fleet
Focus" reductions, the Employee will be entitled to elect to receive his or
her benefit on a specified date following termination of employment (but
not later than his or her 65th birthday) either in a single payment or, if
the specified date is the attainment of age 55 or later, in a series of up
to fifteen annual installment payments. Such election must be irrevocable
and must be made during the "30 day notice period" specified under the
Fleet Focus program. The amount deferred under this subsection will be
credited with interest at
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<PAGE>
the annual rate of eight percent (8%) or, if less, the rate credited to
Participants who are active Employees under the Plan.
(d) In the event of an Employee's death prior to his or her becoming
entitled to receive retirement income payments or other payment of his or
her deferred compensation under this Section, his or her beneficiary shall
receive a death benefit consisting of fifteen annual installments in such
amount as shall be set forth in the Employee's compensation deferral
agreement or, if greater, in the same amount as the Employee would have
received under paragraph (c)(iv) of this Section if he or she had retired
on the day before he or she died, except as hereinafter provided. If death
occurs within two years after the initial deferral of compensation under
this Section as a result of suicide or a condition which was known but not
disclosed at the time of the initial deferral, the Employee's beneficiary
will not receive the death benefit specified in the compensation deferral
agreement, but will only receive the amount of compensation deferred plus
interest determined in accordance with the schedule in paragraph (b) of
this Section. If the Employee dies after commencing to receive retirement
income or other deferred compensation payments under this Section, the
balance of the installments or payments which would have been made to the
Employee shall be paid to the beneficiary of the Employee in the same
manner as they would have been made to the Employee without any
interruption of payments between the Employee and his or her beneficiary.
A lump sum payment shall be made to the Employee's beneficiary under this
Section to take into account any delay in the payment of benefits to the
beneficiary which shall be included in the first payment received by the
Employee's beneficiary.
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<PAGE>
(e) If as the result of circumstances beyond the control of the
Employee, the Employee has an unanticipated emergency which would result in
severe financial hardship to the Employee if he or she was not allowed to
withdraw some or all of his or her deferred compensation, the Committee may
allow the withdrawal of such amount of the compensation deferred under this
Section as is necessary to meet the emergency. If a hardship withdrawal
distribution is made to the Employee, his or her retirement income or other
deferred compensation payments or his or her death benefit under this
Section shall be reduced to reflect the amount and timing of such
withdrawal.
SECTION 3. DEFERRAL OF MANAGEMENT INCENTIVE AWARDS
(a) An Employee may annually elect to defer receipt of awards under
the Employer's Corporate Executive Incentive Plan, to the extent such
awards are not deferred under Section 2 of this Plan, subject to the
approval of the Committee. The amount of deferral and the period of
deferral shall be set forth in a deferral election form. Amounts deferred
under this Section may be deferred until age 65, provided the Employee
remains in the employ of the Employer until age 65 or retires from the
employ of the Employer prior to age 65.
(b) Payment of deferred incentive awards may be made in a lump sum or
in annual installments or deferred annual installments as requested by the
Employee and approved by the Committee. Once the Committee has approved a
deferred form of payment, its decision and the Employee's election is
irrevocable except to the extent that the Employee has a financial
emergency, as described in paragraph 2(e) above and requests a hardship
withdrawal, which is approved by the Committee.
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<PAGE>
(c) Interest equivalents will be credited on deferred incentive
compensation awards on a monthly basis as if the awards had been invested
in a money market account at Fleet National Bank on the date of the award.
Payment of the deferred incentive awards shall include the interest
equivalents credited to the awards.
(d) In the event of the Employee's termination of employment with the
Employer other than on account of death, disability or retirement, the
entire amount of compensation deferred under this Section shall become due
and payable in one lump sum together with interest credited to the amount
deferred as of the first day of the third month following the date of the
Employee's termination of employment with the Employer.
(e) In the event of the Employee's death prior to his or her
retirement or other termination of employment with the Employer, his or her
beneficiary shall receive the total amount of incentive compensation awards
deferred under this Section with interest in a lump sum or in installments
over a period of years, not exceeding ten, as shall be designated by the
Employee on his or her beneficiary designation form as of the first day of
the third month following the date of the Employee's termination of
employment with the Employer. In the event of an Employee's death after
retirement and before all amounts of incentive compensation awards deferred
under this Section have been paid to him, the remainder of the installments
due to the Employee shall be paid to his or her beneficiary at the same
time they would have been paid to the Employee.
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<PAGE>
SECTION 4. AGREEMENTS AND ELECTIONS TO DEFER COMPENSATION
Each agreement or election to defer compensation under this Plan shall
be made by December 31 of the calendar year prior to the calendar year in
which the compensation to be deferred is earned, except as hereinafter
provided. Notwithstanding the foregoing, within thirty days after the
initial adoption of this Plan, or if later, within thirty days after an
Employee is notified by the Employer of his or her eligibility to
participate in the Plan, an Employee may elect to defer all or any portion
of an incentive compensation award to which he or she might become entitled
for the calendar year in which the election is made.
SECTION 5. ASSIGNMENT OR ALIENATION
Compensation which is deferred under Section 2 or Section 3 of the
Plan and payments which are due under either Section may not be assigned,
alienated, pledged, sold, transferred or encumbered and shall not be
subject to attachment, garnishment or legal process, except as may
otherwise be required by law.
SECTION 6. DESIGNATION OF BENEFICIARY
An Employee shall have the right to designate the beneficiary or
beneficiaries to receive any payments on account of his or her death under
the Plan and shall have the right to change such designation from time to
time.
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<PAGE>
SECTION 7. EMPLOYER INVESTMENTS
Although it is the intention of the Employer to purchase insurance
contracts to provide retirement income and death benefits under Section 2
of the Plan and the Employer may establish money market accounts or other
investments to fund its obligations under Section 3 of the plan, no
Employee shall have any right in or claim to any asset of the Employer
under this Plan other than as a general, unsecured creditor of the
Employer. Any assets purchased by the Employer pursuant to this Section
shall remain available to the Employer without any restriction for use to
provide benefits under the Plan. Notwithstanding the foregoing, the
Employer may establish a trust of which the Employer is treated as the
owner under Subpart E of Subchapter J, Chapter 1 of the Internal Revenue
Code of 1986, as amended (a "grantor trust"), and may deposit funds with
the trustee of the grantor trust sufficient to satisfy the benefits
provided under the Plan. If the Employer establishes such a grantor trust,
and if at the time of a "change of control" as defined in the trust, the
trust has not been fully funded, the Employer shall, within the time and
manner specified under such trust, deposit in such trust amounts sufficient
to satisfy all obligations under the Plan as of the date of deposit.
SECTION 8. ADMINISTRATION
The Plan will be administered by the Committee. The Committee will
have full discretionary authority to interpret the provisions of the Plan
and decide all questions and settle all disputes which may arise in
connection with the Plan, and may establish its own operative and
administrative rules and procedures in connection therewith, provided
such procedures are consistent with the requirements of Section 503 of
ERISA and the regulations
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<PAGE>
thereunder. All interpretations, decisions and determinations made by the
Committee will be binding on all persons concerned. No member of the
Committee who is a participant in the Plan may vote or otherwise
participate in any decision or act with respect to a matter relating solely
to himself or herself (or to his or her beneficiaries).
The Committee in its sole discretion may delegate certain of its
duties and responsibilities to the Corporate Benefits Director of the
Employer. For purposes of the Plan, any action taken by the Corporate
Benefits Director pursuant to such delegation will be considered to have
been taken by the Committee. The Employer agrees to indemnify and to
defend to the fullest possible extent permitted by law any member of the
Committee and the Corporate Benefits Director (including any person who
formerly served as a member of the Committee or as Corporate Benefits
Director) against all liabilities, damages, costs and expenses (including
attorneys' fees and amounts paid in settlement of any claims approved by
the Employer) occasioned by any act or omission to act in connection with
the Plan, if such act or omission is in good faith.
SECTION 9. AMENDMENT OR TERMINATION OF PLAN
The Plan may be altered, amended, revoked or terminated in writing by
the Committee or the Employer, in any manner and at any time; provided,
however, following a "change of control" as defined in the trust referred
to under Section 7, no such alteration, amendment, revocation or
termination shall reduce the amount of an Employee's benefit or his or her
rights to such benefit as determined under the provisions of the Plan in
effect, immediately prior to such change of control, or otherwise adversely
affect the Employee's benefits under the Plan,
-13-
<PAGE>
without the written consent of the Employee; and further provided, however,
following a "change of control" as defined in the trust referred to under
Section 7, the provisions of this Section 9 may not be amended.
SECTION 10. MODIFICATION FOR ADVERSE TAX RULING
If the Internal Revenue Service determines that any amount which an
Employee has elected to defer receiving pursuant to the Plan is taxable in
the year in which such amount would have been paid but for such election,
such amount shall be paid to the Employee immediately and the Employee's
deferral schedule under Section 2 of the Plan shall be modified to increase
future deferrals.
IN WITNESS WHEREOF, Fleet Financial Group, Inc. hereby executes this
Plan by its officer hereunto duly authorized this 19 day of June, 1996.
FLEET FINANCIAL GROUP, INC.
By: /s/
---------------------------
-14-
FLEET FINANCIAL GROUP, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN NO. 2
(1996 Restatement)
<PAGE>
ARTICLE 1. INTRODUCTION
Fleet Financial Group, Inc. (the "Company") hereby amends, restates and
continues the Fleet Financial Group, Inc. Executive Deferred Compensation Plan
No. 2 (the "Plan") effective as of January, 1, 1996. The original effective
date of the Plan is January 1, 1992. The Company established the Plan to
attract, retain and motivate certain of its key employees, as well as those of
its subsidiaries and affiliates, by providing them with the opportunity to defer
receipt of certain amounts of compensation. The Plan is intended to be "a plan
which is unfunded and is maintained by an employer primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees" within the meaning of sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended,
("ERISA"), and shall be administered in a manner consistent with that intent.
ARTICLE 2. ADMINISTRATION
The Plan will be administered by the Human Resources and Planning
Committee, or any successor committee, of the Board of Directors of the Company
(the "Committee"). The Committee will have full discretionary authority to
interpret the provisions of the Plan and decide all questions and settle all
disputes which may arise in connection with the Plan, and may establish its own
operative and administrative rules and procedures in connection therewith,
provided such procedures are consistent with the requirements of Section 503 of
-2-
<PAGE>
ERISA and the regulations thereunder. All interpretations, decisions and
determinations made by the Committee will be binding on all persons concerned.
No member of the Committee who is a Participant in the Plan may vote or
otherwise participate in any decision or act with respect to a matter relating
solely to himself or herself (or to his or her beneficiaries).
The Committee in its sole discretion may delegate certain of its duties and
responsibilities to the Corporate Benefits Director of the Company. For
purposes of the Plan, any action taken by the Corporate Benefits Director
pursuant to such delegation will be considered to have been taken by the
Committee. The Company agrees to indemnify and to defend to the fullest
possible extent permitted by law any member of the Committee and the Corporate
Benefits Director (including any person who formerly served as a member of the
Committee or as Corporate Benefits Director) against all liabilities, damages,
costs and expenses (including attorneys' fees and amounts paid in settlement of
any claims approved by the Company) occasioned by any act or omission to act in
connection with the Plan, if such act or omission is in good faith.
ARTICLE 3. SELECTION OF PARTICIPANTS
The Committee will select, or may establish the applicable criteria for
determining, the employees of the Company or its subsidiaries or affiliates who
are eligible to participate in the Plan. When an executive has been selected to
participate in the Plan, he or she will be notified by the Committee and given
the opportunity to elect to defer compensation under the Plan. (An executive
who makes such an election is hereinafter referred to as a "Participant").
-3-
<PAGE>
ARTICLE 4. ESTABLISHMENT OF ACCOUNT
The Committee will establish separate accounts (the "Accounts") for each
Participant reflecting the amounts due the Participant under the Plan and will
cause the Company to establish on its books an account or accounts reflecting
the Company's obligation to pay Participants amounts due under the Plan.
ARTICLE 5. DEFERRAL ELECTIONS
For each calendar year, a Participant may irrevocably elect to defer
receipt of either or both a specified portion of his or her base salary or the
award for the year to which he or she is entitled under the Corporate Executive
Incentive Plan or other incentive award program; provided, however, that such
deferred amount for the year may not be less than $10,000. A Participant's
election to defer base salary must be made prior to the time the base salary is
earned. A Participant's election to defer an award for a calendar year shall be
made prior to the time the amount of the award is determined under the Corporate
Executive Incentive Plan and, in any event, prior to December 1 of the calendar
year with respect to which the award is made.
ARTICLE 6. INTEREST EQUIVALENT FACTOR
From time to time the Committee will establish an annual interest
equivalent factor to be used to increase the balance of each Participant's
Account. The interest equivalent factor may be changed from time to time by the
Committee, including a change which reduces the factor retroactively because a
Participant terminates employment with the Company or its
-4-
<PAGE>
subsidiary or affiliate prematurely, and may be different for each Participant
based upon his or her entry date into the Plan or other factors.
ARTICLE 7. ADJUSTMENTS TO PARTICIPANT'S ACCOUNT
From time to time the Committee will adjust each Participant's Account to
credit (i) the amount which the Participant has elected to defer under Article 4
and (ii) the interest equivalent factor established under Article 6. A
Participant's Account will continue to be adjusted under this Article 7 until
the entire amount has been paid to the Participant or his or her beneficiary. A
Participant's Account will also be adjusted to reflect benefit payments and
withdrawals under Article 8.
ARTICLE 8. PARTICIPANT BENEFITS
A Participant who terminates employment with the Company (or its subsidiary
or affiliate) prior to attaining age 55 and completing five years of continuous
service with the Company (or its subsidiary or affiliate) and prior to attaining
age 65 will be entitled to receive the balance credited to his or her Account on
a specified date following termination of employment (but not later than his or
her 65th birthday) in a single lump sum payment.
A Participant who terminates employment with the Company (or its subsidiary
or affiliate) after attaining age 55 and completing five years of continuous
service with the Company or its subsidiary or affiliate (or who, under a
severance or other special arrangement, is treated as having attained age 55 and
completing five years of continuous service) or after attaining age 65 will be
entitled to elect to receive the balance credited to his
-5-
<PAGE>
or her Account on a specified date following termination of employment (but not
later than his or her 65th birthday) either in a single payment or in a series
of up to fifteen annual installment payments.
An election under the Plan to defer receipt beyond termination of
employment or to receive installment payments, must be irrevocable, must be made
prior to termination of employment and requires the prior written consent of the
Committee.
A Participant who terminated employment with the Employer (or its
subsidiary or affiliate) prior to attaining age 55 and completing ten years of
continuous service with the Employer (or its subsidiary or affiliate) due to
"Fleet Focus" reductions will be entitled to elect to receive the balance
credited to his or her Account on a specified date following termination of
employment (but not later than his or her 65th birthday) either in a single
payment or, if the specified date is the attainment of age 55 or later, in a
series of up to fifteen annual installment payments. Such election must be
irrevocable and must be made during the "30 day notice period" specified under
the Fleet Focus reduction program. Subject to the Committee's right to change
the annual interest factor from time to time, the annual interest factor on such
deferred amount will be 8%.
A Participant who incurs a severe financial hardship due to circumstances
beyond his or her control may request to withdraw all or a portion of his or her
Account to satisfy his or her financial emergency. The Committee in its sole
discretion will determine whether a severe financial hardship exists and what
amount, if any, may be withdrawn.
At the time a Participant elects to defer amounts under Article 5, a
Participant may also irrevocably elect, in accordance with procedures
established by the Committee, to receive a
-6-
<PAGE>
distribution of the balance credited to his or her Account attributable to such
deferred amount in a single sum on a specified date, or upon the occurrence of a
specified event, if such date or event occurs prior to his or her termination of
employment. A Participant who was formerly a participant in the Shawmut
National Corporation Deferred Compensation Plan who previously made such an
election relating to deferred amounts under said plan will also be entitled to
receive a distribution of the balance credited to his or her Account
attributable to such prior deferred amount in accordance with such prior
election.
Subject to a withdrawal penalty as hereinafter specified, from time to time
a Participant may elect to withdraw in a single sum all or a specified portion
of the balance of his Account in accordance with procedures established by the
Committee. The amount of such withdrawal, however, will be reduced by a
percentage of the withdrawal amount which shall be forfeited by the Participant.
Such percentage will be equal to the annual interest equivalent factor in effect
for such Participant at the time of such withdrawal election, as determined
under Article 6, increased by three percentage points.
ARTICLE 9. BENEFICIARY BENEFITS
A Participant may designate a beneficiary or beneficiaries, or change any
prior designation, on a form approved by the Committee to receive the remaining
balance in his or her Account upon his or her death. Payments to a beneficiary
under this Article will be made, at the election of the Participant, in a
single sum, or in a series of up to fifteen annual installment payments,
commencing as soon as reasonably practicable following the Participant's death.
If no beneficiary is designated (or if a designated beneficiary does not
-7-
<PAGE>
survive the Participant), the remaining balance will be paid to the
Participant's estate in a lump sum.
ARTICLE 10. NATURE OF CLAIM FOR PAYMENTS
Except as herein provided, the Company shall not be required to set aside
or segregate any assets of any kind to meet its obligations hereunder. A
Participant shall have no right on account of the Plan in or to any specific
assets of the Company. Any right to any payment the Participant may have on
account of the Plan shall be that of a general, unsecured creditor of the
Company.
The Company may, but is not required to, establish a trust of which the
Company is treated as the owner under Subpart E of Subchapter J, Chapter 1 of
the Internal Revenue Code of 1986, as amended, (a "grantor trust") and may
deposit funds with the trustee of the grantor trust (the "Trustee") sufficient
to satisfy the benefits provided under the Plan. If the Company establishes
such a grantor trust and, if at the time of a "change of control" as defined in
the trust, the trust has not been fully funded, the Company shall, within the
time and manner specified under such trust, deposit in such trust amounts
sufficient to satisfy all obligations under the Plan as of the date of deposit.
In all events, the Company shall remain ultimately liable for the benefits
payable under this Plan, and to the extent the assets at the disposal of the
Trustee are insufficient to enable the Trustee to satisfy all benefits, the
Company shall pay all such benefits necessary to meet its obligations under this
Plan.
-8-
<PAGE>
The obligations of the Company hereunder shall be binding upon its
successors and assigns, whether by merger, consolidation or acquisition of all
or substantially all of its business or assets.
ARTICLE 11. NO ASSIGNMENT OR ALIENATION
The interest hereunder of any Participant or beneficiary will not be
alienable by the Participant or beneficiary by assignment or any other method
and will not be subject to be taken by his or her creditors by any process
whatsoever, and any attempt to cause such interest to be so subjected will not
be recognized.
ARTICLE 12. NO CONTRACT OF EMPLOYMENT
The Plan will not be deemed to constitute a contract of employment between
the Company and any Participant, or to be consideration for the employment of
any Participant.
ARTICLE 13. AMENDMENT OR TERMINATION OF PLAN
The Plan may be altered, amended, revoked or terminated in writing by the
Committee or the Company, in any manner and at any time; provided, however,
following a "change of control" as defined in the trust referred to under
Article 10, no such alteration, amendment, revocation or termination shall
reduce the amount of a Participant's Account or his or her rights to such
Account as determined under the provisions of the Plan in effect, immediately
prior to such change of control, or otherwise adversely affect the Participant's
benefits under the Plan, without the written consent of the Participant; and
further provided, however,
-9-
<PAGE>
following a "change of control" as defined in the trust referred to under
Article 10, the provisions of this Article 13 may not be amended.
ARTICLE 14. MERGER OF THE SHAWMUT NATIONAL CORPORATION
DEFERRED COMPENSATION PLAN
Each individual who was a participant in the Shawmut National Corporation
Deferred Compensation Plan immediately prior to the date as of which Shawmut
National Corporation merged with Fleet Financial Group, Inc., who became an
employee of the Company or a subsidiary or affiliate as of said merger date, and
who consented in writing to the provisions of the Instrument of Amendment and
Merger of the Shawmut National Corporation Deferred Compensation Plan with the
Fleet Financial Group, Inc. Executive Deferred Compensation Plan No. 2, shall
become a Participant in the Plan as of January 1, 1996. As of January 1, 1996,
the Committee will establish an Account for each such Participant under the Plan
and will credit to such Account as of January 1, 1996 an amount equal to the
value of such Participant's 'Deferral Account' under the Shawmut National
Corporation Deferred Compensation Plan, determined by the Company, immediately
prior to January 1, 1996. To the extent such value is determined with reference
to the value of shares of Fleet Financial Group, Inc. common stock, the value of
each such share shall be equal to the average of the closing prices for Fleet
Financial Group, Inc. common stock for the month of December, 1995, as shown in
The Wall Street Journal.
- --- ---- ------ -------
-10-
<PAGE>
ARTICLE 15. GOVERNING LAW
This Plan will be governed and construed in accordance with the laws of the
State of Rhode Island, to the extent such laws are not preempted by federal law.
IN WITNESS WHEREOF, the Fleet Financial Group, Inc., by its duly authorized
officer, has caused this Plan to be executed this ____ day of ________________,
1996.
FLEET FINANCIAL GROUP, INC.
By: /s/
--------------------------
-11-
FLEET FINANCIAL GROUP, INC.
EXECUTIVE SUPPLEMENTAL PLAN
(1996 RESTATEMENT)
<PAGE>
ARTICLE 1. INTRODUCTION
1.1 Amendment of Plan. Fleet Financial Group, Inc. (the "Company")
--------- -- ----
hereby amends, restates and continues the Fleet Financial Group, Inc.
Executive Supplemental Plan (the "Plan") effective as of January 1, 1996.
The original effective date of the Plan is January 1, 1989.
1.2 Purpose of the Plan. The purpose of the Plan is to provide key
------- -- --- ----
employees of the Company and its subsidiaries and affiliates (the
"Employer"), with the opportunity to defer receipt of certain amounts of
base salary, as well as to receive matching credits, to make up for
benefits they would have received under the Fleet Financial Group, Inc.
Savings Plan (the "Fleet Savings Plan") but for limitations imposed on
contributions under the Fleet Savings Plan by Sections 402(g) and
401(a)(17) of the Internal Revenue Code of 1986 (and the provisions of the
Fleet Savings Plan applying those limitations) (hereinafter referred to as
the "Code Limitations").
1.3 Status. The Plan is intended to be "a plan which is unfunded and
------
is maintained by an employer primarily for the purpose of providing
deferred compensation for a select group of management or highly
compensated employees" within the meaning of sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of 1974, as
amended, ("ERISA"), and shall be administered in a manner consistent with
that intent.
1.4 Terms. Unless defined herein, any word, phrase or term used in
-----
this Plan shall have the meaning given to it under the Fleet Savings Plan.
-2-
<PAGE>
ARTICLE 2. ADMINISTRATION
The Plan will be administered by the Human Resources and Planning
Committee, or any successor committee, of the Board of Directors of the
Company (the "Committee"). The Committee will have full discretionary
authority to interpret the provisions of the Plan and decide all questions
and settle all disputes which may arise in connection with the Plan, and
may establish its own operative and administrative rules and procedures in
connection therewith, provided such procedures are consistent with the
requirements of Section 503 of ERISA and the regulations thereunder. All
interpretations, decisions and determinations made by the Committee will be
binding on all persons concerned. No member of the Committee who is a
Participant in the Plan may vote or otherwise participate in any decision
or act with respect to a matter relating solely to himself or herself (or
to his or her beneficiaries). The Committee in its sole discretion may
delegate certain of its duties and responsibilities to the Corporate
Benefits Director of the Company. For purposes of the Plan, any action
taken by the Corporate Benefits Director pursuant to such delegation will
be considered to have been taken by the Committee. The Company agrees to
indemnify and to defend to the fullest extent permitted by law any member
of the Committee and the Corporate Benefits Director (including any person
who formerly served as a member of the Committee or as Corporate Benefits
Director) against all liabilities, damages, costs and expenses (including
attorneys' fees and amounts paid in settlement of any claims approved by
the Company) occasioned by any act or omission to act in connection with
the Plan, if such act or omission is in good faith.
-3-
<PAGE>
ARTICLE 3. PARTICIPANTS
Each employee of the Employer who is a Participant in the Fleet Savings
Plan is eligible to participate in the Plan provided he or she:
(a) has elected to defer receipt, on a pre-tax basis, of the maximum
percent (currently six percent) of his or her regular base salary
for the year eligible for a matching contribution under the Fleet
Savings Plan, and
(b) is prevented from deferring, in accordance with rules prescribed by
the Committee, receipt of the full amount described in paragraph
(a) above for the year because of the Code Limitations.
When an employee is eligible to participate in the Plan, he or she will be
notified by the Committee and given the opportunity to elect to defer base
salary under the Plan at such time or times as the rules and procedures of
the Committee provide. An employee who makes such an election is
hereinafter referred to as a "Participant".
ARTICLE 4. ESTABLISHMENT OF ACCOUNT
The Committee will establish separate accounts (the "Accounts") for each
Participant reflecting the amounts due the Participant under the Plan and
will cause the Company to establish on its books an account or accounts
reflecting the Company's obligation to pay Participants amounts due under
the Plan.
-4-
<PAGE>
ARTICLE 5. DEFERRAL ELECTIONS
For each calendar year, a Participant may irrevocably elect to defer
receipt of up to six percent of his or her regular base salary payments,
commencing with the first base salary payment due after the Participant has
deferred receipt of the maximum amount of base salary which he or she is
permitted to defer on a pre-tax basis under the Fleet Savings Plan because
of the Code Limitations. Such deferral election must be made prior to the
time such base salary is earned. Such deferred amounts will be credited to
the Participant's Account at the time they would have been paid to the
Participant as regular base salary but for the deferral election.
ARTICLE 6. MATCHING CREDITS
For each calendar year, the Company will credit to each Participant's
Account a matching amount equal to a "matching percentage" of the
Participant's deferral amount for the year under Article 5. Such matching
percentage will equal the matching contribution percentage in effect for
such Participant for such year under the Fleet Savings Plan. Matching
amounts will be credited to the Participant's Account at the same time as
deferral amounts are credited under Article 5.
ARTICLE 7. INVESTMENT ADJUSTMENTS
Investment adjustments will be made to the Participant's Account to
reflect the rate of return on the "measuring investments" selected by the
Participant in accordance with procedures prescribed by the Committee. The
"measuring investments" available for selection
-5-
<PAGE>
by the Participant shall be the Fixed Rate Fund, the Equity Growth Fund,
the High Quality Bond Fund and the Asset Allocation Fund, as defined under
the Fleet Savings Plan.
ARTICLE 8. ADJUSTMENTS TO PARTICIPANT'S ACCOUNT
From time to time the Committee will adjust each Participant's Account
to credit his or her (i) deferral amounts under Article 5, (ii) matching
credits under Article 6, and (iii) the measuring investments under Article
7. A Participant's Account will continue to be adjusted under this Article
8 until the entire Account has been paid to the Participant or his or her
beneficiary. A Participant's Account will also be adjusted to reflect
benefit payments and withdrawals under Article 9.
ARTICLE 9. PARTICIPANT BENEFITS
A Participant who terminates employment with the Employer prior to
attaining age 55 and completing five years of continuous service with the
Employer and prior to attaining age 65 will be entitled to receive the
balance credited to his or her Account on a specified date following
termination of employment (but not later than his or her 65th birthday) in
a single payment.
A Participant who terminates employment with the Employer after
attaining age 55 and completing five years of continuous service with the
Employer (or who, under a severance or other special arrangement, is
treated as having attained age 55 and completed five years of continuous
service) or after attaining age 65 will be entitled to elect to receive the
balance credited to his or her Account on a specified date following
termination of employment (but
-6-
<PAGE>
not later than his or her 65th birthday) either in a single payment or in a
series of up to fifteen annual installment payments .
An election under the Plan to defer receipt beyond termination of
employment or to receive installment payments, must be irrevocable, must be
made prior to termination of employment and requires the prior written
consent of the Committee.
A Participant who incurs a severe financial hardship due to
circumstances beyond his or her control may request to withdraw all or a
portion of his or her Account to the extent necessary to satisfy his or her
financial emergency. The Committee in its sole discretion will determine
whether a severe financial hardship exists and what amount, if any, may be
withdrawn.
ARTICLE 10. BENEFICIARY BENEFITS
A Participant may designate a beneficiary or beneficiaries, or change
any prior designation, on a form approved by the Committee, to receive the
remaining balance in his or her Account upon his or her death. Payments to
a beneficiary under this Article will be made, at the election of the
Participant, in a single sum, or in a series of up to fifteen annual
installment payments, commencing as soon as reasonably practicable
following the Participant's death. If no beneficiary is designated (or if
a designated beneficiary does not survive the Participant), the remaining
balance will be paid to the Participant's estate in a lump sum.
-7-
<PAGE>
ARTICLE 11. NATURE OF CLAIM FOR PAYMENTS
Except as herein provided, the Company shall not be required to set
aside or segregate any assets of any kind to meet its obligations
hereunder. A Participant shall have no right on account of the Plan in or
to any specific assets of the Company. Any right to any payment the
Participant may have on account of the Plan shall be that of a general,
unsecured creditor of the Company.
The Company may but is not required to establish a trust of which the
Company is treated as the owner under Subpart E of Subchapter J, Chapter 1
of the Internal Revenue Code of 1986, as amended, (a "grantor trust") and
may deposit funds with the trustee of the grantor trust (the "Trustee")
sufficient to satisfy the benefits provided under the Plan. If the Company
establishes such a grantor trust and, if at the time of a "change of
control" as defined in the trust, the trust has not been fully funded, the
Company shall, within the time and manner specified under such trust,
deposit in such trust amounts sufficient to satisfy all obligations under
the Plan as of the date of deposit.
In all events, the Company shall remain ultimately liable for the
benefits payable under the Plan, and to the extent the assets at the
disposal of the Trustee are insufficient to enable the Trustee to satisfy
all benefits, the Company shall pay all such benefits necessary to meet its
obligations under the Plan.
The obligations of the Company hereunder shall be binding upon its
successors and assigns, whether by merger, consolidation or acquisition of
all or substantially all of its business or assets.
-8-
<PAGE>
ARTICLE 12. NO ASSIGNMENT OR ALIENATION
The interest hereunder of any Participant or beneficiary will not be
alienable by the Participant or beneficiary by assignment or any other
method and will not be subject to be taken by his or her creditors by any
process whatsoever, and any attempt to cause such interest to be so
subjected will not be recognized.
ARTICLE 13. NO CONTRACT OF EMPLOYMENT
The Plan will not be deemed to constitute a contract of employment
between the Company or the Employer and any Participant, or to be
consideration for the employment of any Participant.
ARTICLE 14. AMENDMENT OR TERMINATION OF THE PLAN
The Plan may be altered, amended, revoked or terminated in writing by
the Committee or the Company in any manner and at any time; provided,
however, following a "change of control" as defined in the trust referred
to under Article 11, no such alteration, amendment, revocation or
termination shall reduce the amount of a Participant's Account or his or
her rights to such Account as determined under the provisions of the Plan
in effect immediately prior to such change of control, or otherwise
adversely affect the Participant's benefits under the Plan, without the
written consent of the Participant; and further provided, however,
following a "change of control" as defined in the trust referred to under
Article 11, the provisions of this Article 14 may not be amended.
-9-
<PAGE>
ARTICLE 15. GOVERNING LAW
This Plan will be governed and construed in accordance with the laws of
the State of Rhode Island, to the extent such laws are not preempted by
federal law.
IN WITNESS WHEREOF, Fleet Financial Group, Inc., by its duly authorized
officer, has caused this restated Plan to be executed this ____ day of
________________, 1996.
FLEET FINANCIAL GROUP, INC.
By: /s/
-------------------------
-10-
FLEET FINANCIAL GROUP, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(1996 Restatement)
<PAGE>
ARTICLE 1. INTRODUCTION
1.1 Amendment of Plan. Fleet Financial Group, Inc. hereby amends,
--------- -- ----
restates and continues the Fleet Financial Group Supplement Executive Retirement
Plan, effective as of January 1, 1996.
1.2 Purpose of Plan. The purpose of the Plan is to facilitate the
------- -- ----
retirement of select key executive employees by further supplementing the
benefits to which they are entitled under the Fleet Financial Group, Inc.
Pension Plan.
1.3 Status. The Plan is intended to be a plan which is unfunded and
------
is maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
within the meaning of sections 201(2), 301(a)(3) and 401(a)(1) of the Employees
Retirement Income Security Act of 1974 (ERISA), and shall be interpreted and
administered accordingly.
ARTICLE 2. DEFINITIONS
Unless defined herein, any word, phrase or term used in this Plan shall have the
meaning given to it in the Basic Plan. However, the following terms have the
following meanings unless a different meaning is clearly required by the
context:
2.1 "Basic Plan" means The Fleet Financial Group, Inc. Pension Plan,
as amended and in effect from time to time.
2.2 "Beneficiary" means any individual other than the Participant
entitled to receive benefits under the terms of the Basic Plan.
2.3 "Code" means the Internal Revenue Code of 1986, as amended.
-2-
<PAGE>
2.4 "Committee" means the Human Resources and Planning Committee, or
any successor committee, of the Board of Directors of the Company or other
person or persons designated to administer the Plan pursuant to Article 6.
2.5 "Company" means Fleet Financial Group, Inc.
2.6"Eligible Employee" means each executive Employee of the Employer who
participates in the Basic Plan.
2.7 "Employer" means the Company and its subsidiaries and affiliates.
2.8 "Participant" means any Eligible Employee selected to participate
in the Plan in accordance with Article 3.
2.9 "Plan" means the Fleet Financial Group, Inc. Supplemental
Executive Retirement Plan as set forth herein and in all subsequent amendments
hereto.
ARTICLE 3. PARTICIPATION
3.1 Selection of Participants. The Chief Executive Officer of the
--------- -- ------------
Company shall select from time to time those Eligible Employees who will be
Participants in the Plan.
3.2 Termination of Participation. The Chief Executive Officer of the
----------- -- -------------
Company may terminate a Participant prospectively or retroactively for any
reason. Any such termination of participation will likewise terminate any right
of the Participant (and his beneficiaries) to receive any benefit under the
Plan.
ARTICLE 4. SOURCE OF BENEFIT PAYMENTS
4.1 Obligation of Company. The Company will establish on its books a
---------- -- -------
liability
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<PAGE>
with respect to its obligation for benefits payable under the Plan to
Participants (and their Beneficiaries). Each Participant and Beneficiary will
be an unsecured general creditor of the Company with respect to all benefits
payable under the Plan.
4.2 No Funding Required. Nothing in the Plan will be construed to
-- ------- --------
obligate the Company to fund the Plan. However, the Company may but shall not
be required to establish a trust of which the Company is treated as the owner
under Subpart E of Subchapter J, Chapter 1 of the Code (a "grantor trust") and
may deposit funds with the trustee of the trust sufficient to satisfy the
benefits provided under the Plan. If the Company establishes such a grantor
trust and, if at the time of a "change of control" as defined in the trust, the
trust has not been fully funded, the Company shall, within the time and manner
specified under such trust, deposit in such trust amounts sufficient to satisfy
all obligations under the Plan as of the date of deposit. In all events the
Company shall remain ultimately liable for the benefits payable under the Plan,
and, to the extent the assets at the disposal of the trustee are insufficient to
enable the trustee to satisfy all benefits, the Company shall pay all such
benefits necessary to meet its obligations under the Plan.
4.3 No Claim to Specific Benefits. Nothing in the Plan will be
-- ----- -- -------- --------
construed to give any individual rights to any specific assets of the Company,
or any other person or entity.
ARTICLE 5. BENEFITS
5.1 Amount of Benefits. The amount of the benefit payable under the
------ -- --------
Plan to a Participant (or to the Participant's Beneficiary, in the event of the
Participant's death) will be equal to (a) minus (b), but not less than zero,
where
-4-
<PAGE>
(a) is the amount of the benefit the Participant (or
Beneficiary) would have been entitled to receive under the Basic Plan
if (i) the term "Compensation" under the Basic Plan included bonus
awards to which the Participant is entitled under the Corporate
Executive Incentive Plan or other incentive award program and (ii) the
limitations of sections 401(a)(17) and 415 of the Code (and provisions
of the Basic Plan applying those limitations) did not exist; and
(b) is the sum of (i) the benefit payable to the
Participant (or Beneficiary) under the Basic Plan and (ii) the benefit payable
to the Participant (or Beneficiary) under the Fleet Financial Group, Inc.
Restated Retirement Income Assurance Plan, as in effect from time to time.
5.2 Calculation and Payment of Benefits. Benefits payable under the
----------- --- ------- -- --------
Plan shall be calculated in the same manner, paid in the same form, commence at
the same time, and paid under the same terms and conditions as the benefits
payable to the Participant (or Beneficiary) under the Basic Plan.
5.3 Death Benefits. In the event of the death of the Participant,
----- --------
benefits under the Plan will become payable to the Participant's Beneficiary,
under the same terms and conditions specified in the Basic Plan.
5.4 Effect of Termination of Benefits under the Basic Plan. If for
------ -- ----------- -- -------- ----- --- ----- ----
any reason a Participant or Beneficiary is not entitled to receive or ceases to
have the right to receive benefits under the Basic Plan, such Participant or
Beneficiary shall also not be entitled to receive and shall cease to have the
right to receive benefits under the Plan.
-5-
<PAGE>
ARTICLE 6. ADMINISTRATION
The Plan will be administered by the Committee. The Committee will
have full discretionary authority to interpret the provisions of the Plan and
decide all questions and settle all disputes which may arise in connection with
the Plan, and may establish its own operative and administrative rules and
procedures in connection therewith, provided such procedures are consistent with
the requirements of Section 503 of ERISA and the regulations thereunder. All
interpretations, decisions and determinations made by the Committee will be
binding on all persons concerned. No member of the Committee who is a
Participant in the Plan may vote or otherwise participate in any decision or act
with respect to a matter relating solely to himself or herself (or to his or her
Beneficiaries).
The Committee in its sole discretion may delegate certain of its
duties and responsibilities to the Corporate Benefits Director of the Company.
For purposes of the Plan, any action taken by the Corporate Benefits Director
pursuant to such delegation will be considered to have been taken by the
Committee. The Company agrees to indemnify and to defend to the fullest
possible extent permitted by law any member of the Committee and the
Corporate Benefits Director (including any person who formerly served as a
member of the Committee or as a Corporate Benefits Director) against all
liabilities, damages, costs and expenses (including attorneys' fees and amounts
paid in settlement of any claims approved by the Company) occasioned by any act
or omission to act in connection with the Plan, if such act or omission is in
good faith.
-6-
<PAGE>
ARTICLE 7. AMENDMENT OR TERMINATION OF PLAN
The Plan may be altered, amended, revoked or terminated in writing by the
Committee or the Company in any manner and at anytime; provided, however,
following a "change of control" as defined in the trust referred to under
Section 4.2 above, no such alteration, amendment, revocation or termination
shall reduce the amounts of a Participant's benefit or his or her rights to such
benefit as determined under the provisions of the Plan in effect immediately
prior to such change of control, or otherwise adversely affect the Participant's
benefits under the Plan, without the written consent of the Participant; and
further provided, however, following a "change of control" as defined in the
trust referred to under Section 4.2, the provisions of this Article 7 may not be
amended.
ARTICLE 8. MISCELLANEOUS
8.1 No Assignment or Alienation. None of the benefits,
-- ---------- -- ----------
payments, proceeds or claims of any Participant or Beneficiary shall be subject
to any claim of any creditor of the Participant or Beneficiary or to attachment
or garnishment or other legal process by any such creditor; nor shall any
Participant or Beneficiary have any right to alienate, anticipate, commute,
pledge, encumber or assign any of the benefits, payments or proceeds which he or
she may expect to receive, contingently or otherwise, under the Plan.
8.2 Limitation of Rights. Neither the establishment of the
---------- -- ------
Plan, nor any amendment thereof, nor the payment of any benefits will be
construed as giving any individual any legal or equitable right against the
Company, the Employer, or the Committee. In no event will the
-7-
<PAGE>
Plan be deemed to constitute a contract between any employee and the Company,
Employer, or the Committee. This Plan shall not be deemed to be consideration
for, or an inducement for the performance of, services by any employee.
8.3 Receipt and Release. Any payment under the Plan to any
------- --- -------
Participant or Beneficiary, or to any individual as described in Section 8.4
shall be in satisfaction of all claims with respect to benefits under the
Plan against the Company, any Employer, and the Committee.
8.4 Payment for the Benefit of an Incapacitated Individual. If
------- --- --- ------- -- -- ------------- ----------
the committee of the Basic Plan determines that payments due to a Participant
under the Basic Plan must be paid to another individual because of a
Participant's incapacitation, benefits under the Plan will be paid to that same
individual designated for that purpose under the applicable provisions of the
Basic Plan.
8.5 Governing Law. The Plan will be construed,
--------- ---
administered, and governed under the laws of the State of Rhode Island, to the
extent not preempted by federal law.
8.6 Severability. If any provision of this Plan is held by
------------
a court of competent jurisdiction to be invalid or unenforceable, the remaining
provisions shall continue to be fully effective.
-8-
<PAGE>
8.7 Headings and Subheadings. Headings and subheading are
-------- --- -----------
inserted for convenience only and are not to be considered in the construction
of the provisions of the Plan.
IN WITNESS WHEREOF, Fleet Financial Group, Inc. has caused this Plan to be
executed by its duly authorized officer this day of , 1996.
FLEET FINANCIAL GROUP, INC.
By: /s/
----------------------------
-9-
FLEET FINANCIAL GROUP, INC.
RETIREMENT INCOME ASSURANCE PLAN
(1996 Restatement)
<PAGE>
ARTICLE 1. INTRODUCTION
1.1 Amendment of Plan. Fleet Financial Group, Inc. hereby amends,
-----------------
restates and continues the Fleet Financial Group, Inc. Retirement Income
Assurance Plan, effective as of January 1, 1996. The original effective
date of the Plan is January 1, 1983.
1.2 Purpose of Plan. The purpose of the Plan is to facilitate the
---------------
retirement of select employees by further supplementing the benefits to
which they are entitled under the Fleet Financial Group, Inc. Pension Plan.
1.3 Status. The Plan is intended to be a plan which is unfunded and
------
is maintained by an employer primarily for the purpose of providing
deferred compensation for a select group of management or highly
compensated employees within the meaning of sections 201(2), 301(a)(3) and
401(a)(1) of the Employees Retirement Income Security Act of 1974 (ERISA),
and shall be interpreted and administered accordingly.
ARTICLE 2. DEFINITIONS
Unless defined herein, any word, phrase or term used in this Plan
shall have the meaning given to it in the Basic Plan. However, the
following terms have the following meanings unless a different meaning is
clearly required by the context:
2.1 "Basic Plan" means the Fleet Financial Group, Inc. Pension Plan
as amended and in effect from time to time.
2.2 "Beneficiary" means any individual other than the Participant
entitled to receive benefits under the terms of the Basic Plan.
-2-
<PAGE>
2.3 "Code" means the Internal Revenue Code of 1986, as amended.
2.4 "Committee" means the Human Resources and Planning Committee, or
any successor committee, of the Board of Directors of the Company or any
other person or persons designated to administer the Plan pursuant to
Article 5.
2.5 "Company" means Fleet Financial Group, Inc.
2.6 "Employer" means the Company and its subsidiaries and affiliates.
2.7 "Participant" means each employee of the Employer whose benefits
under the Basic Plan are limited by Code sections 415 or 401(a)(17).
2.8 "Plan" means the Fleet Financial Group, Inc. Retirement Income
Assurance Plan as set forth herein and in all subsequent amendments hereto.
ARTICLE 3. SOURCE OF BENEFIT PAYMENTS
3.1 Obligation of Company. The Company will establish on its books a
---------------------
liability with respect to its obligation for benefits payable under the
Plan to Participants (and their Beneficiaries). Each Participant and
Beneficiary will be an unsecured general creditor of the Company with
respect to all benefits payable under the Plan.
3.2 No Funding Required. Nothing in the Plan will be construed to
-------------------
obligate the Company to fund the Plan. However, the Company may but shall
not be required to establish a trust of which the Company is treated as the
owner under Subpart E of Subchapter J, Chapter 1 of the Code (a "grantor
trust") and may deposit funds with the trustee of the trust sufficient to
satisfy the benefits provided under the Plan. If the Company establishes
such a grantor trust and, if at the time of a "change of control" as
defined in the trust, the trust has
-3-
<PAGE>
not been fully funded, the Company shall, within the time and manner
specified under such trust, deposit in such trust amounts sufficient to
satisfy all obligations under the Plan as of the date of deposit. In all
events the Company shall remain ultimately liable for the benefits payable
under the Plan, and, to the extent the assets at the disposal of the
Trustee are insufficient to enable the Trustee to satisfy all benefits, the
Company shall pay all such benefits necessary to meet its obligations under
the Plan.
3.3 No Claim to Specific Benefits. Nothing in the Plan will be
-----------------------------
construed to give any individual rights to any specific assets of the
Company, or any other person or entity.
ARTICLE 4. BENEFITS
4.1 Amount of Benefits. The amount of the benefit payable under the
------------------
Plan to a Participant (or to the Participant's Beneficiary, in the event of
the Participant's death) will be equal to (a) minus (b), but not less than
zero, where
(a) is the amount of the benefit the Participant (or
Beneficiary) would have been entitled to receive under the Basic
Plan if the limitations of sections 401(a)(17) and 415 of the
Code (and provisions of the Basic Plan applying those
limitations) did not exist; and
(b) is the benefit payable to the Participant (or Beneficiary)
under the Basic Plan.
4.2 Calculation and Payment of Benefits. Benefits payable under the
-----------------------------------
Plan shall be calculated in the same manner, paid in the same form,
commence at the same time, and paid under the same terms and conditions as
the benefits payable to the Participant (or Beneficiary)
-4-
<PAGE>
under the Basic Plan.
4.3 Death Benefits. In the event of the death of the Participant,
--------------
benefits under the Plan will become payable to the Participant's
Beneficiary, under the same terms and conditions specified in the Basic
Plan.
4.4 Effect of Termination of Benefits under the Basic Plan. If for
------------------------------------------------------
any reason a Participant or Beneficiary is not entitled to receive or
ceases to have the right to receive benefits under the Basic Plan, such
Participant or Beneficiary shall also not be entitled to receive and shall
cease to have the right to receive benefits under the Plan.
ARTICLE 5. ADMINISTRATION
The Plan will be administered by the Committee. The Committee will
have full discretionary authority to interpret the provisions of the Plan,
and decide all questions and settle all disputes which may arise in
connection with the Plan, and may establish its own operative and
administrative rules and procedures in connection therewith, provided such
procedures are consistent with the requirements of Section 503 of ERISA and
the regulations thereunder. All interpretations, decisions and
determinations made by the Committee will be binding on all persons
concerned. No member of the Committee who is a Participant in the Plan may
vote or otherwise participate in any decision or act with respect to a
matter relating solely to himself or herself (or to his or her
Beneficiaries).
The Committee in its sole discretion may delegate certain of its
duties and responsibilities to the Corporate Benefits Director of the
Company. For purposes of the Plan any action taken by the Corporate
Benefits Director pursuant to such delegation will be
-5-
<PAGE>
considered to have been taken by the Committee. The Company agrees to
indemnify and to defend to the fullest possible extent permitted by law any
member of the Committee and the Corporate Benefits Director (including any
person who formerly served as a member of the Committee or as a Corporate
Benefits Director) against all liabilities, damages, costs and expenses
(including attorneys' fees and amounts paid in settlement of any claims
approved by the Company) occasioned by any act or omission to act in
connection with the Plan, if such act or omissions is in good faith.
ARTICLE 6. AMENDMENT OR TERMINATION OF PLAN
The Plan may be altered, amended, revoked, terminated in writing by
the Committee or the Company in any manner and at anytime; provided,
however, following a "change of control" as defined in the trust referred
to under Section 3.2 above, no such alterations, amendments, revocations or
terminations shall reduce the amounts of a Participant's benefit or his or
her rights to such benefit as determined under the provisions of the Plan
in effect immediately prior to such change of control, or otherwise
adversely affect the Participant's benefits under the Plan, without the
written consent of the Participant; and further provided, however,
following a "change of control" as defined in the trust referred to under
Section 3.2, the provisions of this Article 6 may not be amended.
ARTICLE 7. MISCELLANEOUS
7.1 No Assignment or Alienation. None of the benefits, payments,
---------------------------
proceeds or claims of any Participant or Beneficiary shall be subject to
any claim of any creditor of the
-6-
<PAGE>
Participant or Beneficiary or to attachment or garnishment or other legal
process by any such creditor; nor shall any Participant or Beneficiary have
any right to alienate, anticipate, commute, pledge, encumber or assign any
of the benefits, payments or proceeds which he or she may expect to
receive, contingently or otherwise, under the Plan.
7.2 Limitation of Rights. Neither the establishment of the Plan, nor
---------------------
any amendment thereof, nor the payment of any benefits will be construed as
giving any individual any legal or equitable right against the Company, any
Employer, or the Committee. In no event will the Plan be deemed to
constitute a contract between any Employee and the Company, an Employer, or
the Committee. This Plan shall not be deemed to be consideration for, or an
inducement for, the performance of services by any employee of an Employer.
7.3 Receipt and Release. Any payment under the Plan to any
-------------------
Participant or Beneficiary, or to any individual as described in Section
7.4 shall be in satisfaction of all claims with respect to benefits under
the Plan against the Company, any Employer, and the Committee.
7.4 Payment for the Benefit of an Incapacitated Individual. If the
------------------------------------------------------
committee of the Basic Plan determines that payments due to a Participant
under the Basic Plan must be paid to another individual because of a
Participant's incapacitation, benefits under the Plan will be paid to that
same individual designated for that purpose under the applicable provisions
of the Basic Plan.
7.5 Governing Law. The Plan will be construed, administered, and
-------------
governed under the laws of the State of Rhode Island, to the extent not
preempted by federal law.
-7-
<PAGE>
7.6 Severability. If any provision of this Plan is held by a court
------------
of competent jurisdiction to be invalid or unenforceable, the remaining
provisions shall continue to be fully effective.
7.7 Headings and Subheadings. Headings and subheadings are
------------------------
inserted for convenience only and are not to be considered in the
construction of the provisions of the Plan.
IN WITNESS WHEREOF, Fleet Financial Group, Inc. has caused this Plan
to be executed by its duly authorized officer this ____ day of __________,
1996.
FLEET FINANCIAL GROUP, INC.
By: /s/
------------------------
-8-
TRUST AGREEMENT FOR
EXECUTIVE DEFERRED COMPENSATION PLANS NO. 1 AND 2
This Agreement made as of this _____ day of _________, 1996 by and
between Fleet Financial Group, Inc. (the "Company"), whose address is One
Federal Street, Boston, Massachusetts 02110 and Fleet National Bank (the
"Trustee"), of One Monarch Place, Springfield, Massachusetts 01102,
WITNESSETH
WHEREAS the Company has adopted certain unfunded plans and
arrangements providing deferred compensation and supplemental executive
retirement benefits for certain executive employees, former executive
employees and their beneficiaries; and
WHEREAS the Company established a trust (the "Trust") and
transferred to the Trust assets which shall be held therein, subject to the
claims of the Company's creditors in the event of the Company's Insolvency,
as hereinafter defined, until paid to Trust Beneficiaries, as hereinafter
defined, in such manner and at such times as hereinafter specified; and
WHEREAS the Company desires to make additional changes to this Trust
Agreement;
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
SECTION 1. TRUST FUND
(a) Subject to the claims of its creditors as set forth in Section
5, the Company hereby deposits with the Trustee in trust one hundred
dollars ($100) which shall become the principal of the Trust to be held,
administered and disposed of by the Trustee as provided in this Trust
Agreement.
(b) The purpose of the Trust is to pay as they come due benefits
under specified benefit plans and arrangements of the Company and its
subsidiaries. The Company shall specify which of such plans and
arrangements are to be associated with this Trust (the "Benefit Plans") by
designating them on Schedule B to this Agreement as from time to time in
effect. The Company shall also specify on Schedule B, either by name or
otherwise, which of its
<PAGE>
employees and the employees of its subsidiaries, and their beneficiaries,
are eligible to receive benefit payments hereunder (each such person is
referred to herein as a "Trust Beneficiary").
(c) The Trust hereby established shall become irrevocable upon a
Change of Control, as hereinafter defined, as to all amounts held in Trust
as of the Change of Control and all amounts contributed in Trust
thereafter, and earnings on such amounts. Prior to a Change of Control the
Trust may be revoked by the Company at any time by a writing delivered to
the Trustee. Upon such revocation, all amounts held in the Trust shall be
paid to, or upon the direction of, the Company.
(d) The Trust is intended to be a trust of which the Company is
treated as the owner under Subpart E of Subchapter J, Chapter 1 of the
Internal Revenue Code of 1986, as from time to time amended, and shall be
construed accordingly.
(e) The principal of the Trust and any earnings thereon which are
not returned to the Company in accordance with the specific provisions of
this Agreement or used to defray the expenses of the Trust shall be used
exclusively for the benefit of Trust Beneficiaries, subject in every case
to the provisions of Section 5 (relating to Insolvency of the Company).
The Trust Beneficiaries shall not have any preferred claim on, or any
beneficial ownership interest in, any assets of the Trust prior to the time
such assets are distributed hereunder, and all rights of Trust
Beneficiaries created under any of the Benefit Plans or under this Trust
Agreement shall be mere unsecured contractual rights against the Company.
SECTION 2. CHANGE OF CONTROL
For all purposes of this Agreement, "Change of Control" means a
Change of Control, as defined in Schedule A hereto, of the Company.
SECTION 3. CONTRIBUTIONS TO THE TRUST
(a) The Company may at any time and from time to time make
additional deposits of cash or other property in Trust with the Trustee to
augment the principal to be held, administered and disposed of by the
Trustee as provided in this Trust Agreement. Upon a determination by the
Board of Directors of the Company that a Change of Control is imminent, the
Company shall contribute to the Trust, except as the Board of Directors of
the Company shall otherwise specify, the full amount anticipated to be
required under paragraph (c) below. Upon the actual occurrence of a Change
of Control, the Company shall make such additional contributions to the
Trust as are required by paragraph (c). Prior to a Change of Control, the
Company may at any time withdraw from the Trust such amounts as it may
designate in writing to the Trustee.
-2-
<PAGE>
(b) Contributions to the Trust and earnings thereon shall be
allocated, in such manner as the Company shall designate in writing to the
Trustee prior to a Change of Control, among the benefits payable under
specified Benefit Plans. The allocations described in this paragraph shall
not require the segregation or separate investment of any assets held in
Trust, and nothing in this paragraph shall be construed as conferring on
any Trust Beneficiary any rights in specific assets of the Trust.
(c) Within 90 days after a Change of Control (or 180 days, if the
Company delivers to the Trustee evidence satisfactory to the Trustee that
the computations necessary hereunder cannot be completed in 90 days), the
Company shall contribute to the Trust the present value, determined as
hereinafter provided, of all benefits remaining to be paid under the
Benefit Plans designated on Schedule B as in effect immediately prior to
the Change of Control, including benefits in pay status and benefits
payable in the future in respect of persons not yet retired, less amounts
previously contributed to the Trust in respect of each such Benefit Plan
and less any such amounts paid directly to Trust Beneficiaries by the
Company following the Change of Control.
The present value of benefits payable in the future shall be determined
using the interest, mortality or other assumptions used in the applicable
Benefit Plan, or if no such assumptions are provided for, using an interest
rate equal to eight percent compounded annually and (if applicable) the
same mortality assumptions as are used in determining the present value of
benefits under the Company's tax-qualified retirement plan. The Trustee
shall have no responsibility for determining the adequacy of any amount
contributed hereunder.
(d) Amounts transferred to the Trust in respect of the Benefit
Plans above, shall be held in Trust until distributed in accordance with
this Agreement and the provisions of Schedule B.
(e) In addition to the contributions described above in this Section, the
Company shall within 15 days of a Change of Control deposit an amount
determined as hereafter provided for use in helping to defray the legal
expenses of Trust Beneficiaries in enforcing their rights under the Benefit
Plans. The amounts to be deposited in the Trust in accordance with the
immediately preceding sentence shall be the amount fixed by the Human
Resources and Planning Committee of the Board of Directors of the Company,
or any successor committee of said Board (the "Committee"), prior to the
Change of Control; provided, that if no such amount is fixed, the amount to
--------
be deposited shall be 15 percent of the present value of all benefits as
determined under paragraph (c) above of this Section 3.
SECTION 4. PAYMENTS TO TRUST BENEFICIARIES
(a) The Trustee shall make payments of benefits to Trust
Beneficiaries from the assets of the Trust in accordance with the
provisions of Schedule B and the other terms of this
-3-
<PAGE>
Agreement, as from time to time in effect.
(b) Schedule B as from time to time in effect shall specify the
amounts, or the bases for determining the amounts, payable to each Trust
Beneficiary under each Benefit Plan. The Company may at any time and from
time to time modify or supplement the provisions of Schedule B by delivery
of an instrument in writing to the Trustee; provided, however, that
-------- -------
following a Change of Control no such modification or supplement shall
reduce the benefits payable hereunder to any person then designated as a
Trust Beneficiary with respect to a plan or arrangement then specified as a
Benefit Plan below the level specified by the terms of such Benefit Plan as
in effect immediately prior to the Change of Control, except by reason of
the correction of a clear error or unless such Trust Beneficiary consents
in writing to such modification or supplement. Nothing in the preceding
sentence shall require payment hereunder, following a Change of Control, of
benefits that would not be payable (e.g., because of termination for cause)
under the express terms of a Benefit Plan in effect immediately prior to
the Change of Control. Prior to a Change of Control the name of any Trust
Beneficiary and any other benefit information, including the designation of
Benefit Plans, may be added to or deleted from Schedule B in the discretion
of the Company.
(c) Upon receipt of evidence satisfactory to the Trustee that a
benefit otherwise payable hereunder has been paid by the Company directly
to a Trust Beneficiary, the Trustee shall reimburse the Company for such
payment. The Trustee shall not be obligated to make any reimbursement
hereunder unless it receives such evidence of payment by the Company at
least three (3) business days prior to the scheduled date for payment of
the benefit from the Trust.
SECTION 5. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARIES WHEN COMPANY INSOLVENT
(a) The Company shall be considered "Insolvent" for purposes of
this Trust Agreement if (i) the Company is unable to pay its debts as they
mature, or (ii) the Company is subject to a pending proceeding as a debtor
under the Bankruptcy Code.
(b) At all times during the continuance of this Trust, the
principal and income of the Trust shall be subject to claims of general
creditors of the Company, but only to the extent hereinafter set forth. If
at any time the Trustee has actual knowledge, or has determined, that the
Company is Insolvent, the Trustee shall deliver any undistributed principal
and income in the Trust to satisfy such claims as a court of competent
jurisdiction may direct. The Board of Directors and the Chief Executive
Officer, or if he shall have delegated the responsibility to the Chief
Financial Officer, the Chief Financial Officer of the Company shall have
the duty to inform the Trustee of the Company's Insolvency. If the Company
or a person claiming to be a creditor of the Company alleges in writing to
the Trustee that the Company has become Insolvent, the Trustee shall
independently determine, within thirty (30) days after receipt of
-4-
<PAGE>
such notice, whether the Company is Insolvent and, pending such determination,
shall discontinue payments of benefits to Trust Beneficiaries, shall hold the
Trust assets for the benefit of the Company's general creditors, and shall
resume payments of benefits to Trust Beneficiaries in accordance with
Section 4 of this Trust Agreement only after the Trustee has determined
that the Company is not Insolvent (or is no longer Insolvent, if the
Trustee initially determined the Company to be Insolvent). Unless the
Trustee has actual knowledge of the Company's Insolvency or has received an
allegation of Insolvency as provided in the preceding sentence, the Trustee
shall have no duty to inquire whether the Company is Insolvent. The
Trustee may in all events rely on such evidence concerning the Company's
solvency as may be furnished to the Trustee which will give the Trustee a
reasonable basis for making a determination concerning the Company's
solvency. Nothing in this Trust Agreement shall in any way diminish any
rights of any Trust Beneficiary to pursue his or her rights as a general
creditor of the Company with respect to his or her benefits hereunder or
otherwise.
(c) If the Trustee discontinues payments of benefits from the Trust
and subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments which
would have been made to Trust Beneficiaries in accordance with Schedule B
during the period of such discontinuance, less the aggregate amount of
payments made to Trust Beneficiaries by the Company in lieu of the payments
provided for hereunder during any such period of discontinuance (together
with interest on the amount delayed at the prime rate then in effect at the
Trustee on the date of said payment).
SECTION 6. INVESTMENT OF PRINCIPAL AND INCOME
Prior to a Change of Control, the Trustee shall invest the principal
of the Trust and any earnings thereon in accordance with such investment
objectives, policies and restrictions as the Company may from time to time
prescribe, or, if the Company has appointed an investment manager to manage
or direct the investment of some or all of the assets of the Trust, in
accordance with the directions of such investment manager. The Trustee
shall have no duty to inquire into or review the aforesaid investment
objectives, policies, or restrictions, or the investments made pursuant to
the directions of an investment manager. In no event, however, shall
assets held in the Trust be invested in securities or obligations issued by
the Company or any affiliate of the Company. Following a Change of
Control, the Trustee shall invest the assets of the Trust as it determines
in its sole discretion, in any form of tangible or intangible property,
real or personal, or in the securities or obligations of any form of
enterprise wherever it may be located (other than in securities or
obligations of the Company or any affiliate of the Company).
SECTION 7. DISPOSITION OF PRINCIPAL AND INCOME
During the term of this Trust, all principal amounts contributed to
the Trust and all
-5-
<PAGE>
interest thereon, net of expenses, shall be accumulated and reinvested for
the purposes herein provided. Subject to the provisions of Sections 1(c),
3(a), 4 and 12, the Company shall have no right or power to direct the
Trustee to return to the Company or to direct to others any of the Trust
assets before all payments of benefits payable under the Trust, and all
payments in respect of legal expenses incurred to enforce rights to such
benefits, have been made to Trust Beneficiaries. Upon payment of all such
benefits and legal expenses, the Trustee shall return to the Company all
amounts, if any, then remaining in the Trust.
SECTION 8. ACCOUNTING BY THE TRUSTEE
The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required
to be done, including such specific records as shall be agreed upon in
writing between the Company and the Trustee. All such accounts, books and
records shall be open to inspection and audit at all reasonable times by
the Company. Within sixty (60) days following the close of each calendar
year and within sixty (60) days after the removal or resignation of the
Trustee, the Trustee shall deliver to the Company a written account of its
administration of the Trust during such year or during the period from the
close of the last preceding year to the date of such removal or
resignation, setting forth all investments, receipts, disbursements and
other transactions effected by it, including a description of all
securities and investments purchased and sold with the cost or net proceeds
of such purchases or sales (accrued interest paid or receivable being shown
separately), and showing all cash, securities and other property held in
the Trust at the end of such year as the date of such removal or
resignation, as the case may be.
SECTION 9. RESPONSIBILITY OF THE TRUSTEE
(a) The Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person
acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims; provided,
--------
however, that the Trustee shall incur no liability to anyone for any action
- -------
reasonably taken in accordance with a written direction, request, or
approval given by the Company or by an investment manager appointed by the
Company that is contemplated by and complies with the terms of this Trust
Agreement, including distributions made in accordance with Schedule B as
from time to time in effect, and to that extent shall be relieved of the
prudent person rule for investments.
(b) The Company agrees to indemnify the Trustee against all loss or
expense incurred by the Trustee under this Agreement, except that in no
event shall the Company indemnify the Trustee against any loss or expense
incurred by reason of the Trustee's own negligence or misconduct. Without
limiting the foregoing, the Trustee shall not be required to undertake or
to defend on behalf of any person any litigation arising in connection with
this Trust
-6-
<PAGE>
agreement, unless it be first indemnified by the Company against its
prospective costs, expenses and liability.
(c) The Trustee may consult with legal counsel (who may also be
counsel for the Trustee generally) with respect to any of its duties or
obligations hereunder, including any determination as to whether a Change
of Control has occurred or as to whether the Company is Insolvent, and
shall not be held responsible for acting or refraining from acting in
accordance with the advice of any such counsel selected with reasonable
care.
(d) The Trustee may hire agents, legal counsel, accountants,
actuaries, investment managers and financial consultants.
(e) The Trustee shall have, without exclusions, all powers
conferred on trustees by applicable law unless expressly provided otherwise
herein.
(f) Nothing in this Trust Agreement shall be construed as
constituting the Trustee plan "administrator," as that term is defined in
Section 3(16) of ERISA, of any plan or arrangement pursuant to which
benefits are provided hereunder.
SECTION 10. COMPENSATION AND EXPENSES OF THE TRUSTEE
The Trustee shall be entitled to receive such reasonable
compensation for its services as shall be agreed upon by the Company and
the Trustee. The Trustee shall also be entitled to receive its reasonable
expenses incurred with respect to the administration of the Trust. All
such compensation and expenses shall be payable by the Company, but if not
paid by the Company shall be a charge against and may be paid from the
assets of the Trust.
SECTION 11. REPLACEMENT OF THE TRUSTEE
The Trustee may be removed by the Company at any time prior to a
Change of Control, or may resign at any time, in either case by notice in
writing. Upon the removal or the resignation of the Trustee, a new
trustee, which shall be a bank or trust company having a combined capital
and surplus of not less than $50,000,000 shall be appointed by the Company.
Following a Change of Control, the Trustee cannot be removed by the
Company; provided, however, if at the time of a Change of Control the
-------- -------
Trustee is Fleet National Bank, or its successor, or any other entity
affiliated with the Company, the Company shall within 15 days remove said
Trustee and appoint an unaffiliated bank or trust company which meet the
capital and surplus requirements of this Section 11.
-7-
<PAGE>
SECTION 12. AMENDMENT OR TERMINATION
(a) This Trust Agreement may be amended at any time and to any
extent by a written instrument executed by the Committee or the Company;
provided, that no such amendment that would increase the duties or
- --------
responsibilities of the Trustee shall be effective unless the Trustee shall
have consented thereto; and further provided, that following a Change of
--- ------- --------
Control no amendment having an adverse effect on the benefits or legal
expenses payable hereunder to any Trust Beneficiary shall be effective
without the written consent of such Trust Beneficiary; and further
--- -------
provided, that following a Change of Control the provisions of this Section
- --------
12 may not be amended.
(b) The Trust shall not terminate until the date on which the last
Trust Beneficiary ceases to be entitled to benefits payable under the
Trust, unless sooner revoked in writing in accordance with Section 1.
(c) Upon termination of the Trust or upon revocation of the Trust
under Section 1, all assets remaining in the Trust shall be returned to the
Company.
SECTION 13. SEVERABILITY AND ALIENATION
(a) Any provision of this Trust Agreement prohibited by law shall
be ineffective to the extent of any such prohibition without invalidating
the remaining provisions hereof.
(b) To the extent permitted by law, benefits to Trust Beneficiaries
under this Agreement may not be anticipated, assigned (either at law or in
equity), alienated or subject to attachment, garnishment, levy, execution
or other legal or equitable process and no benefit actually paid to Trust
Beneficiaries by the Trustee shall be subject to any claim for repayment by
the Company or the Trustee.
-8-
<PAGE>
SECTION 14. GOVERNING LAW
This Trust Agreement shall be governed by and construed in
accordance with the laws of Rhode Island.
IN WITNESS WHEREOF, the Company and the Trustee have executed this
Agreement as of the date first above written.
FLEET FINANCIAL GROUP, INC.
By /s/
-----------------------------
FLEET NATIONAL BANK
By /s/
-------------------------------
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<PAGE>
SCHEDULE A
-------- -
To The Trust Agreement For
Executive Deferred Compensation Plans No. 1 and 2
Definition of "Change of Control"
---------- -- ------- -- -------
"Change of Control" shall mean:
(a) The acquisition, other than from the Company, by any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 25% or more of the then outstanding
shares of common stock of the Company (the "Outstanding Company Common
Stock"); provided, however, that any acquisition by the Company or its
subsidiaries, or any employee benefit plan (or related trust) of the
Company or its subsidiaries, of 25% or more of the Outstanding Company
Common Stock shall not constitute a Change of Control; and provided,
further that any acquisition by a corporation with respect to which,
following such acquisition, more than 50% of the then outstanding shares of
common stock of such corporation is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners of the Outstanding Company Common Stock
immediately prior to such acquisition in substantially the same proportion
as their ownership immediately prior to such acquisition of the Outstanding
Company Common Stock, shall not constitute a Change of Control; or
(b) Individuals who, as of January 1, 1996, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a director
subsequent to January 1, 1996 whose election, or nomination for election by
the Company's stockholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office is
in connection with an actual or threatened election contest relating to the
election of the directors of the Company (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act); or
(c) Consummation of a reorganization, merger, consolidation,
sale or other disposition of all or substantially all of the assets of the
Company (a"Business Combination"), in each case, with respect to which all
or substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Company Common Stock immediately prior
to such Business Combination do not, following such Business Combination,
beneficially own, directly or indirectly, more than 50% of the then
outstanding shares of common stock of the corporation resulting from such a
Business Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or substantially all
-10-
<PAGE>
of the Company's assets either directly or through one or more
subsidiaries).
(d) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
Anything in this Agreement to the contrary notwithstanding, if an
event that would, but for this paragraph, constitute a Change of Control
results from or arises out of a purchase or other acquisition of the
Company, directly or indirectly, by a corporation or other entity in which
any Trust Beneficiary has a greater than ten percent (10%) direct or
indirect equity interest, such event shall not constitute a Change of
Control solely with respect to such Trust Beneficiary.
-11-
<PAGE>
SCHEDULE B
-------- -
To The Trust Agreement For
Executive Deferred Compensation Plans No. 1 and 2
I.List of Benefit Plans and Arrangements to be Funded by Trust
---- -- ------- ----- --- ------------ -- -- ------ -- -----
Executive Deferred Compensation Plan No. 1
Executive Deferred Compensation Plan No. 2
II. Trust Beneficiaries and Amounts or Basis for Determining
----- ------------- --- ------- -- ----- --- -----------
Amounts Payable to each Trust Beneficiary under each Benefit
------- ------- -- ---- ----- ----------- ----- ---- -------
Plan listed in I above
---- ------ -- - -----
The identification of Trust Beneficiaries (active and
inactive) and their Plan Values may be obtained from the
Director of Corporate Benefits.
-12-
TRUST AGREEMENT FOR THE
EXECUTIVE SUPPLEMENTAL PLAN
This Agreement made as of this _____ day of _________, 1996 by and between
Fleet Financial Group, Inc. (the "Company"), whose address is One Federal
Street, Boston, Massachusetts 02110 and Fleet National Bank (the "Trustee"), of
One Monarch Place, Springfield, Massachusetts 01102,
WITNESSETH
WHEREAS the Company has adopted certain unfunded plans and arrangements
providing deferred compensation and supplemental executive retirement benefits
for certain executive employees, former executive employees and their
beneficiaries; and
WHEREAS the Company had established a trust for the Executive Supplemental
Plan and the Restated Retirement Income Assurance Plan under a Trust Agreement
dated September 13, 1991 (the "Prior Trust"); and
WHEREAS the Company established a new trust (the "Trust") under this
Agreement and transferred to the Trust assets held under the Prior Trust
attributable to the Executive Supplemental Plan as well as other assets which
shall be held therein, subject to the claims of the Company's creditors in the
event of the Company's Insolvency, as hereinafter defined, until paid to Trust
Beneficiaries, as hereinafter defined, in such manner and at such times as
hereinafter specified; and
WHEREAS the Company desires to make additional changes to this Trust
Agreement;
NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:
SECTION 1. TRUST FUND
(a) Subject to the claims of its creditors as set forth in Section 5, the
Company hereby deposits with the Trustee in trust one hundred dollars ($100)
which shall become the principal of the Trust to be held, administered and
disposed of by the Trustee as provided in this Trust
<PAGE>
Agreement.
(b) The purpose of the Trust is to pay as they come due benefits under
specified benefit plans and arrangements of the Company and its subsidiaries.
The Company shall specify which of such plans and arrangements are to be
associated with this Trust (the "Benefit Plans") by designating them on Schedule
B to this Agreement as from time to time in effect. The Company shall also
specify on Schedule B, either by name or otherwise, which of its employees and
the employees of its subsidiaries, and their beneficiaries, are eligible to
receive benefit payments hereunder (each such person is referred to herein as a
"Trust Beneficiary").
(c) The Trust hereby established shall become irrevocable upon a Change of
Control, as hereinafter defined, as to all amounts held in Trust as of the
Change of Control and all amounts contributed in Trust thereafter, and earnings
on such amounts. Prior to a Change of Control the Trust may be revoked by the
Company at any time by a writing delivered to the Trustee. Upon such
revocation, all amounts held in the Trust shall be paid to, or upon the
direction of, the Company.
(d) The Trust is intended to be a trust of which the Company is treated as
the owner under Subpart E of Subchapter J, Chapter 1 of the Internal Revenue
Code of 1986, as from time to time amended, and shall be construed accordingly.
(e) The principal of the Trust and any earnings thereon which are not
returned to the Company in accordance with the specific provisions of this
Agreement or used to defray the expenses of the Trust shall be used exclusively
for the benefit of Trust Beneficiaries, subject in every case to the provisions
of Section 5 (relating to Insolvency of the Company). The Trust Beneficiaries
shall not have any preferred claim on, or any beneficial ownership interest in,
any assets of the Trust prior to the time such assets are distributed hereunder,
and all rights of Trust Beneficiaries created under any of the Benefit Plans or
under this Trust Agreement shall be mere unsecured contractual rights against
the Company.
SECTION 2. CHANGE OF CONTROL
For all purposes of this Agreement, "Change of Control" means a Change of
Control, as defined in Schedule A hereto, of the Company.
SECTION 3. CONTRIBUTIONS TO THE TRUST
(a) The Company may at any time and from time to time make additional
deposits of cash or other property in Trust with the Trustee to augment the
principal to be held, administered and disposed of by the Trustee as provided in
this Trust Agreement. Upon a determination by the Board of Directors of the
Company that a Change of Control is
-2-
<PAGE>
imminent, the Company shall contribute to the Trust, except as the Board of
Directors of the Company shall otherwise specify, the full amount anticipated to
be required under paragraph (c) below. Upon the actual occurrence of a Change
of Control, the Company shall make such additional contributions to the Trust
as are required by paragraph (c). Prior to a Change of Control, the Company may
at any time withdraw from the Trust such amounts as it may designate in writing
to the Trustee.
(b) Contributions to the Trust and earnings thereon shall be allocated, in
such manner as the Company shall designate in writing to the Trustee prior to a
Change of Control, among the benefits payable under specified Benefit Plans.
The allocations described in this paragraph shall not require the segregation or
separate investment of any assets held in Trust, and nothing in this paragraph
shall be construed as conferring on any Trust Beneficiary any rights in specific
assets of the Trust.
(c) Within 90 days after a Change of Control (or 180 days, if the Company
delivers to the Trustee evidence satisfactory to the Trustee that the
computations necessary hereunder cannot be completed in 90 days), the Company
shall contribute to the Trust the present value, determined as hereinafter
provided, of all benefits remaining to be paid under the Benefit Plans
designated on Schedule B as in effect immediately prior to the Change of
Control, including benefits in pay status and benefits payable in the future in
respect of persons not yet retired, less amounts previously contributed to the
Trust in respect of each such Benefit Plan and less any such amounts paid
directly to Trust Beneficiaries by the Company following the Change of Control.
The present value of benefits payable in the future shall be determined using
the interest, mortality or other assumptions used in the applicable Benefit
Plan, or if no such assumptions are provided for, using an interest rate equal
to eight percent compounded annually and (if applicable) the same mortality
assumptions as are used in determining the present value of benefits under the
Company's tax-qualified retirement plan. The Trustee shall have no
responsibility for determining the adequacy of any amount contributed hereunder.
(d) Amounts transferred to the Trust in respect of the Benefit Plans
above, shall be held in Trust until distributed in accordance with this
Agreement and the provisions of Schedule B.
(e)In addition to the contributions described above in this Section, the
Company shall within 15 days of a Change of Control deposit an amount determined
as hereafter provided for use in helping to defray the legal expenses of Trust
Beneficiaries in enforcing their rights under the Benefit Plan. The amounts to
be deposited in the Trust in accordance with the immediately preceding sentence
shall be the amount fixed by the Human Resources and Planning Committee of the
Board of Directors of the Company, or any successor committee of said Board (the
"Committee"), prior to the Change of Control; provided, that if no such amount
--------
is fixed, the amount to be deposited shall be 15 percent of the present value of
-3-
<PAGE>
all benefits as determined under paragraph (c) above of this Section 3.
SECTION 4. PAYMENTS TO TRUST BENEFICIARIES
(a) The Trustee shall make payments of benefits to Trust Beneficiaries
from the assets of the Trust in accordance with the provisions of Schedule B and
the other terms of this Agreement, as from time to time in effect.
(b) Schedule B as from time to time in effect shall specify the amounts,
or the bases for determining the amounts, payable to each Trust Beneficiary
under each Benefit Plan. The Company may at any time and from time to time
modify or supplement the provisions of Schedule B by delivery of an instrument
in writing to the Trustee; provided, however, that following a Change of Control
-------- -------
no such modification or supplement shall reduce the benefits payable hereunder
to any person then designated as a Trust Beneficiary with respect to a plan or
arrangement then specified as a Benefit Plan below the level specified by the
terms of such Benefit Plan as in effect immediately prior to the Change of
Control, except by reason of the correction of a clear error or unless such
Trust Beneficiary consents in writing to such modification or supplement.
Nothing in the preceding sentence shall require payment hereunder, following a
Change of Control, of benefits that would not be payable (e.g., because of
termination for cause) under the express terms of a Benefit Plan in effect
immediately prior to the Change of Control. Prior to a Change of Control the
name of any Trust Beneficiary and any other benefit information, including the
designation of Benefit Plans, may be added to or deleted from Schedule B in the
discretion of the Company.
(c) Upon receipt of evidence satisfactory to the Trustee that a benefit
otherwise payable hereunder has been paid by the Company directly to a Trust
Beneficiary, the Trustee shall reimburse the Company for such payment. The
Trustee shall not be obligated to make any reimbursement hereunder unless it
receives such evidence of payment by the Company at least three (3) business
days prior to the scheduled date for payment of the benefit from the Trust.
SECTION 5. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARIES WHEN COMPANY INSOLVENT
(a) The Company shall be considered "Insolvent" for purposes of this Trust
Agreement if (i) the Company is unable to pay its debts as they mature, or (ii)
the Company is subject to a pending proceeding as a debtor under the Bankruptcy
Code.
(b) At all times during the continuance of this Trust, the principal and
income of the Trust shall be subject to claims of general creditors of the
Company, but only to the extent hereinafter set forth. If at any time the
Trustee has actual knowledge, or has determined, that
-4-
<PAGE>
the Company is Insolvent, the Trustee shall deliver any undistributed principal
and income in the Trust to satisfy such claims as a court of competent
jurisdiction may direct. The Board of Directors and the Chief Executive
Officer, or if he shall have delegated the responsibility to the Chief Financial
Officer, the Chief Financial Officer of the Company shall have the duty to
inform the Trustee of the Company's Insolvency. If the Company or a person
claiming to be a creditor of the Company alleges in writing to the Trustee that
the Company has become Insolvent, the Trustee shall independently determine,
within thirty (30) days after receipt of such notice, whether the Company is
Insolvent and, pending such determination, shall discontinue payments of
benefits to Trust Beneficiaries, shall hold the Trust assets for the benefit of
the Company's general creditors, and shall resume payments of benefits to Trust
Beneficiaries in accordance with Section 4 of this Trust Agreement only after
the Trustee has determined that the Company is not Insolvent (or is no longer
Insolvent, if the Trustee initially determined the Company to be Insolvent).
Unless the Trustee has actual knowledge of the Company's Insolvency or has
received an allegation of Insolvency as provided in the preceding sentence, the
Trustee shall have no duty to inquire whether the Company is Insolvent. The
Trustee may in all events rely on such evidence concerning the Company's
solvency as may be furnished to the Trustee which will give the Trustee a
reasonable basis for making a determination concerning the Company's solvency.
Nothing in this Trust Agreement shall in any way diminish any rights of any
Trust Beneficiary to pursue his or her rights as a general creditor of the
Company with respect to his or her benefits hereunder or otherwise.
(c) If the Trustee discontinues payments of benefits from the Trust and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments which would
have been made to Trust Beneficiaries in accordance with Schedule B during the
period of such discontinuance, less the aggregate amount of payments made to
Trust Beneficiaries by the Company in lieu of the payments provided for
hereunder during any such period of discontinuance (together with interest on
the amount delayed at the prime rate then in effect at the Trustee on the date
of said payment).
SECTION 6. INVESTMENT OF PRINCIPAL AND INCOME
Prior to a Change of Control, the Trustee shall invest the principal of the
Trust and any earnings thereon in accordance with such investment objectives,
policies and restrictions as the Company may from time to time prescribe, or, if
the Company has appointed an investment manager to manage or direct the
investment of some or all of the assets of the Trust, in accordance with the
directions of such investment manager. The Trustee shall have no duty to
inquire into or review the aforesaid investment objectives, policies, or
restrictions, or the investments made pursuant to the directions of an
investment manager. In no event, however, shall assets held in the Trust be
invested in securities or obligations issued by the Company or any affiliate of
the Company. Following a Change of Control, the Trustee shall invest the assets
of the Trust as it determines in its sole discretion, in any form of tangible or
intangible property, real or personal, or in the securities or obligations of
any form of enterprise
-5-
<PAGE>
wherever it may be located (other than in securities or obligations of the
Company or any affiliate of the Company).
SECTION 7. DISPOSITION OF PRINCIPAL AND INCOME
During the term of this Trust, all principal amounts contributed to the
Trust and all interest thereon, net of expenses, shall be accumulated and
reinvested for the purposes herein provided. Subject to the provisions of
Sections 1(c), 3(a), 4 and 12, the Company shall have no right or power to
direct the Trustee to return to the Company or to direct to others any of the
Trust assets before all payments of benefits payable under the Trust, and all
payments in respect of legal expenses incurred to enforce rights to such
benefits, have been made to Trust Beneficiaries. Upon payment of all such
benefits and legal expenses, the Trustee shall return to the Company all
amounts, if any, then remaining in the Trust.
SECTION 8. ACCOUNTING BY THE TRUSTEE
The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be done,
including such specific records as shall be agreed upon in writing between the
Company and the Trustee. All such accounts, books and records shall be open to
inspection and audit at all reasonable times by the Company. Within sixty (60)
days following the close of each calendar year and within sixty (60) days after
the removal or resignation of the Trustee, the Trustee shall deliver to the
Company a written account of its administration of the Trust during such year or
during the period from the close of the last preceding year to the date of such
removal or resignation, setting forth all investments, receipts, disbursements
and other transactions effected by it, including a description of all securities
and investments purchased and sold with the cost or net proceeds of such
purchases or sales (accrued interest paid or receivable being shown separately),
and showing all cash, securities and other property held in the Trust at the end
of such year as the date of such removal or resignation, as the case may be.
SECTION 9. RESPONSIBILITY OF THE TRUSTEE
(a) The Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; provided, however, that the
-------- -------
Trustee shall incur no liability to anyone for any action reasonably taken in
accordance with a written direction, request, or approval given by the Company
or by an investment manager appointed by the Company that is contemplated by and
complies with the terms of this Trust Agreement, including distributions made in
accordance with Schedule B as from time to time in effect, and to that extent
shall be relieved of the prudent person rule
-6-
<PAGE>
for investments.
(b) The Company agrees to indemnify the Trustee against all loss or
expense incurred by the Trustee under this Agreement, except that in no event
shall the Company indemnify the Trustee against any loss or expense incurred by
reason of the Trustee's own negligence or misconduct. Without limiting the
foregoing, the Trustee shall not be required to undertake or to defend on behalf
of any person any litigation arising in connection with this Trust
agreement, unless it be first indemnified by the Company against its prospective
costs, expenses and liability.
(c) The Trustee may consult with legal counsel (who may also be counsel
for the Trustee generally) with respect to any of its duties or obligations
hereunder, including any determination as to whether a Change of Control has
occurred or as to whether the Company is Insolvent, and shall not be held
responsible for acting or refraining from acting in accordance with the advice
of any such counsel selected with reasonable care.
(d) The Trustee may hire agents, legal counsel, accountants, actuaries,
investment managers and financial consultants.
(e) The Trustee shall have, without exclusions, all powers conferred on
trustees by applicable law unless expressly provided otherwise herein.
(f) Nothing in this Trust Agreement shall be construed as constituting the
Trustee plan "administrator," as that term is defined in Section 3(16) of ERISA,
of any plan or arrangement pursuant to which benefits are provided hereunder.
SECTION 10. COMPENSATION AND EXPENSES OF THE TRUSTEE
The Trustee shall be entitled to receive such reasonable compensation for
its services as shall be agreed upon by the Company and the Trustee. The
Trustee shall also be entitled to receive its reasonable expenses incurred with
respect to the administration of the Trust. All such compensation and expenses
shall be payable by the Company, but if not paid by the Company shall be a
charge against and may be paid from the assets of the Trust.
SECTION 11. REPLACEMENT OF THE TRUSTEE
The Trustee may be removed by the Company at any time prior to a Change of
Control, or may resign at any time, in either case by notice in writing. Upon
the removal or the resignation of the Trustee, a new trustee, which shall be a
bank or trust company having a combined capital and surplus of not less than
$50,000,000 shall be appointed by the Company. Following a Change of Control,
the Trustee cannot be removed by the Company; provided,
--------
-7-
<PAGE>
however, if at the time of a Change of Control the Trustee is Fleet National
- -------
Bank, or its successor, or any other entity affiliated with the Company, the
Company shall within 15 days remove said Trustee and appoint an unaffiliated
bank or trust company which meet the capital and surplus requirements of this
Section 11.
SECTION 12. AMENDMENT OR TERMINATION
(a) This Trust Agreement may be amended at any time and to any extent by a
written instrument executed by the Committee or the Company; provided, that no
--------
such amendment that would increase the duties or responsibilities of the Trustee
shall be effective unless the Trustee shall have consented thereto; and further
--- -------
provided, that following a Change of Control no amendment having an adverse
- --------
effect on the benefits or legal expenses payable hereunder to any Trust
Beneficiary shall be effective without the written consent of such Trust
Beneficiary; and further provided, that following a Change of Control, the
--- ------- --------
provisions of this Section 12 may not be amended.
(b) The Trust shall not terminate until the date on which the last Trust
Beneficiary ceases to be entitled to benefits payable under the Trust, unless
sooner revoked in writing in accordance with Section 1.
(c) Upon termination of the Trust or upon revocation of the Trust under
Section 1, all assets remaining in the Trust shall be returned to the Company.
SECTION 13. SEVERABILITY AND ALIENATION
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition without invalidating the
remaining provisions hereof.
(b) To the extent permitted by law, benefits to Trust Beneficiaries under
this Agreement may not be anticipated, assigned (either at law or in equity),
alienated or subject to attachment, garnishment, levy, execution or other legal
or equitable process and no benefit actually paid to Trust Beneficiaries by the
Trustee shall be subject to any claim for repayment by the Company or the
Trustee.
-8-
<PAGE>
SECTION 14. GOVERNING LAW
This Trust Agreement shall be governed by and construed in accordance with
the laws of Rhode Island.
IN WITNESS WHEREOF, the Company and the Trustee have executed this
Agreement as of the date first above written.
FLEET FINANCIAL GROUP, INC.
By /s/
--------------------------
FLEET NATIONAL BANK
By /s/
--------------------------
-9-
<PAGE>
SCHEDULE A
To The Trust Agreement For The
Executive Supplemental Plan
Definition of "Change of Control"
---------- -- ------- -- -------
"Change of Control" shall mean:
(a) The acquisition, other than from the Company, by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 25% or more of the then outstanding shares of common stock of
the Company (the "Outstanding Company Common Stock"); provided, however, that
any acquisition by the Company or its subsidiaries, or any employee benefit plan
(or related trust) of the Company or its subsidiaries, of 25% or more of the
Outstanding Company Common Stock shall not constitute a Change of Control; and
provided, further that any acquisition by a corporation with respect to which,
following such acquisition, more than 50% of the then outstanding shares of
common stock of such corporation is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Company Common Stock immediately prior
to such acquisition in substantially the same proportion as their ownership
immediately prior to such acquisition of the Outstanding Company Common Stock,
shall not constitute a Change of Control; or
(b) Individuals who, as of January 1, 1996, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board, provided that any individual becoming a director subsequent to
January 1, 1996 whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
directors of the Company (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act); or
(c) Consummation of a reorganization, merger, consolidation, sale
or other disposition of all or substantially all of the assets of the Company
(a"Business Combination"), in each case, with respect to which all or
substantially all of the individuals and entities who were the beneficial owners
of the Outstanding Company Common Stock immediately prior to such Business
Combination do not, following such Business Combination, beneficially own,
directly or indirectly, more than 50% of the then outstanding shares of common
stock of the corporation resulting from such a Business Combination (including,
without limitation, a
-10-
<PAGE>
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or
more subsidiaries).
(d) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
Anything in this Agreement to the contrary notwithstanding, if an event
that would, but for this paragraph, constitute a Change of Control results from
or arises out of a purchase or other acquisition of the Company, directly or
indirectly, by a corporation or other entity in which any Trust Beneficiary has
a greater than ten percent (10%) direct or indirect equity interest, such event
shall not constitute a Change of Control solely with respect to such Trust
Beneficiary.
-11-
<PAGE>
SCHEDULE B
To The Trust Agreement For The
Executive Supplemental Plan
I. List of Benefit Plans and Arrangements to be Funded by Trust
---- -- ------- ----- --- ------------ -- -- ------ -- -----
Executive Supplemental Plan
II. Names of Trust Beneficiaries and Amounts or Basis for Determining Amounts
----- -- ----- ------------- --- ------- -- ----- --- ----------- -------
Payable to each Trust Beneficiary under each Benefit Plan listed in I
------- -- ---- ----- ----------- ----- ---- ------- ---- ------ -- -
above.
------
The identification of Trust Beneficiaries (active and inactive) and their
Plan Values may be obtained from the Corporate Benefits Director.
-12-
TRUST AGREEMENT FOR THE
RETIREMENT INCOME ASSURANCE PLAN
AND THE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This Agreement made as of this 19th day of June, 1996 by and between
Fleet Financial Group, Inc. (the "Company"), whose address is One Federal
Street, Boston, Massachusetts 02110 and Fleet National Bank (the"Trustee"), of
One Monarch Place, Springfield, Massachusetts 01102,
WITNESSETH
WHEREAS the Company has adopted certain unfunded plans and arrangements
providing deferred compensation and supplemental executive retirement benefits
for certain executive employees, former executive employees and their
beneficiaries; and,
WHEREAS the Company established a trust for the Restated Executive
Supplemental Plan and the Restated Retirement Income Assurance Plan under a
Trust Agreement dated September 13, 1991; and,
WHEREAS the Company amended, restated and continued said Trust (the
"Trust") under this Agreement for the Retirement Income Assurance Plan and the
Supplemental Executive Retirement Plan, and transferred assets under the Trust
attributable to the Restated Executive Supplemental Plan to a new trust; and
WHEREAS the assets under this Trust shall be held therein, subject to the
claims of the Company's creditors in the event of the Company's Insolvency, as
hereinafter defined, until paid to Trust Beneficiaries, as hereinafter defined,
in such manner and at such times as hereinafter specified; and
WHEREAS the Company desires to make additional changes to this Trust
Agreement;
NOW, THEREFORE, the parties do hereby continue the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:
<PAGE>
SECTION 1. TRUST FUND
(a) Subject to the claims of its creditors as set forth in Section 5, the
Company has deposited with the Trustee in trust certain amounts as the principal
of the Trust to be held, administered and disposed of by the Trustee as provided
in this Trust Agreement.
(b) The purpose of the Trust is to pay as they come due benefits under
specified benefit plans and arrangements of the Company and its subsidiaries.
The Company shall specify which of such plans and arrangements are to be
associated with this Trust (the "Benefit Plans") by designating them on Schedule
B to this Agreement as from time to time in effect. The Company shall also
specify on Schedule B, either by name or otherwise, which of its employees and
the employees of its subsidiaries, and their beneficiaries, are eligible to
receive benefit payments hereunder (each such person is referred to herein as a
"Trust Beneficiary").
(c) The Trust hereby established shall become irrevocable upon a Change of
Control, as hereinafter defined, as to all amounts held in Trust as of the
Change of Control and all amounts contributed in Trust thereafter, and earnings
on such amounts. Prior to a Change of Control the Trust may be revoked by the
Company at any time by a writing delivered to the Trustee. Under such
revocation, all amounts held in the Trust shall be paid to, or upon the
direction of, the Company.
(d) The Trust is intended to be a trust of which the Company is treated as
the owner under Subpart E of Subchapter J, Chapter 1 of the Internal Revenue
Code of 1986, as from time to time amended, and shall be construed accordingly.
(e) The principal of the Trust and any earnings thereon which are not
returned to the Company in accordance with the specific provisions of this
Agreement or used to defray the expenses of the Trust shall be used exclusively
for the benefit of Trust Beneficiaries, subject in every case to the provisions
of Section 5 (relating to Insolvency of the Company). The Trust Beneficiaries
shall not have any preferred claim on, or any beneficial ownership interest in,
any assets of the Trust prior to the time such assets are distributed hereunder,
and all rights of Trust Beneficiaries created under any of the Benefit Plans or
under this Trust Agreement shall be mere unsecured contractual rights against
the Company.
SECTION 2. CHANGE OF CONTROL
For all purposes of this Agreement, "Change of Control" means a Change of
Control, as defined in Schedule A hereto, of the Company.
-2-
<PAGE>
SECTION 3. CONTRIBUTIONS TO THE TRUST
(a) The Company may at any time and from time to time make additional
deposits of cash or other property in Trust with the Trustee to augment the
principal to be held, administered and disposed of by the Trustee as provided in
this Trust Agreement. Upon a determination by the Board of Directors of the
Company that a Change of Control is imminent, the Company shall contribute to
the Trust, except as the Board of Directors of the Company shall otherwise
specify, the full amount anticipated to be required under paragraph (c) below.
Upon the actual occurrence of a Change of Control, the Company shall make such
additional contributions to the Trust as are required by paragraph (c). Prior
to a Change of Control, the Company may at any time withdraw from the Trust such
amounts as it may designate in writing to the Trustee.
(b) Contributions to the Trust and earnings thereon shall be allocated, in
such manner as the Company shall designate in writing to the Trustee prior to a
Change of Control, among the benefits payable under specified Benefit Plans.
The allocations described in this paragraph shall not require the segregation or
separate investment of any assets held in Trust, and nothing in this paragraph
shall be construed as conferring on any Trust Beneficiary any rights in specific
assets of the Trust.
(c) Within 90 days after a Change of Control (or 180 days, if the Company
delivers to the Trustee evidence satisfactory to the Trustee that the
computations necessary hereunder cannot be completed in 90 days), the Company
shall contribute to the Trust the present value, determined as hereinafter
provided, of all benefits remaining to be paid under the Benefit Plans
designated on Schedule B as in effect immediately prior to the Change of
Control, including benefits in pay status and benefits payable in the future in
respect of persons not yet retired, less amounts previously contributed to the
Trust in respect of each such Benefit Plans and less any such amounts paid
directly to Trust Beneficiaries by the Company following the Change of Control.
The present value of benefits payable in the future shall be determined using
the interest, mortality or other assumptions used in the applicable Benefit
Plan, or if no such assumptions are provided for, using an interest rate equal
to eight percent compounded annually and (if applicable) the same mortality
assumptions as are used in determining the present value of benefits under the
Company's tax-qualified retirement plan. The Trustee shall have no
responsibility for determining the adequacy of any amount contributed hereunder.
(d) Amounts transferred to the Trust in respect of the Benefit Plans
above, shall be held in Trust until distributed in accordance with this
Agreement and the provisions of Schedule B.
(e) In addition to the contributions described above in this Section, the
Company shall within 15 days of a Change of Control deposit an amount determined
as hereafter
-3-
<PAGE>
provided for use in helping to defray the legal expenses of Trust Beneficiaries
in enforcing their rights under the Benefit Plans. The amounts to be deposited
in the Trust in accordance with the immediately preceding sentence shall be the
amount fixed by the Human Resources and Planning Committee of the Board of
Directors of the Company, or any successor committee of said Board (the
"Committee"), prior to the Change of Control; provided, that if no such amount
--------
is fixed, the amount to be deposited shall be 15 percent of the present value of
all benefits as determined under paragraph (c) above of this Section 3.
SECTION 4. PAYMENTS TO TRUST BENEFICIARIES
(a) The Trustee shall make payments of benefits to Trust Beneficiaries
from the assets of the Trust in accordance with the provisions of Schedule B and
the other terms of this Agreement, as from time to time in effect.
(b) Schedule B as from time to time in effect shall specify the amounts,
or the bases for determining the amounts, payable to each Trust Beneficiary
under each Benefit Plan. The Company may at any time and from time to time
modify or supplement the provisions of Schedule B by delivery of an instrument
in writing to the Trustee; provided, however, that following a Change of Control
-------- -------
no such modification or supplement shall reduce the benefits payable hereunder
to any person then designated as a Trust Beneficiary with respect to a plan or
arrangement then specified as a Benefit Plan below the level specified by the
terms of such Benefit Plan as in effect immediately prior to the Change of
Control, except by reason of the correction of a clear error or unless such
Trust Beneficiary consents in writing to such modification or supplement.
Nothing in the preceding sentence shall require payment hereunder, following a
Change of Control, of benefits that would not be payable (e.g., because of
termination for cause) under the express terms of a Benefit Plan in effect
immediately prior to the Change of Control. Prior to a Change of Control the
name of any Trust Beneficiary and any other benefit information, including the
designation of Benefit Plans, may be added to or deleted from Schedule B in the
discretion of the Company.
(c) Upon receipt of evidence satisfactory to the Trustee that a benefit
otherwise payable hereunder has been paid by the Company directly to a Trust
Beneficiary, the Trustee shall reimburse the Company for such payment. The
Trustee shall not be obligated to make any reimbursement hereunder unless it
receives such evidence of payment by the Company at least three (3) business
days prior to the scheduled date for payment of the benefit from the Trust.
-4-
<PAGE>
SECTION 5. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARIES WHEN COMPANY INSOLVENT
(a) The Company shall be considered "Insolvent" for purposes of this Trust
Agreement if (i) the Company is unable to pay its debts as they mature, or (ii)
the Company is subject to a pending proceeding as a debtor under the Bankruptcy
Code.
(b) At all times during the continuance of this Trust, the principal and
income of the Trust shall be subject to claims of general creditors of the
Company, but only to the extent hereinafter set forth. If at any time the
Trustee has actual knowledge, or has determined, that the Company is Insolvent,
the Trustee shall deliver any undistributed principal and income in the Trust to
satisfy such claims as a court of competent jurisdiction may direct. The Board
of Directors and the Chief Executive Officer, or if he shall have delegated the
responsibility to the Chief Financial Officer, the Chief Financial Officer of
the Company shall have the duty to inform the Trustee of the Company's
Insolvency. If the Company or a person claiming to be a creditor of the Company
alleges in writing to the Trustee that the Company has become Insolvent, the
Trustee shall independently determine, within thirty (30) days after receipt of
such notice, whether the Company is Insolvent and, pending such determination,
shall discontinue payments of benefits to Trust Beneficiaries, shall hold the
Trust assets for the benefit of the Company's general creditors, and shall
resume payments of benefits to Trust Beneficiaries in accordance with Section 4
of this Trust Agreement only after the Trustee has determined that the Company
is not Insolvent (or is no longer Insolvent, if the Trustee initially determined
the Company to be Insolvent). Unless the Trustee has actual knowledge of the
Company's Insolvency or has received an allegation of Insolvency as provided in
the preceding sentence, the Trustee shall have no duty to inquire whether the
Company is Insolvent. The Trustee may in all events rely on such evidence
concerning the Company's solvency as may be furnished to the Trustee which will
give the Trustee a reasonable basis for making a determination concerning the
Company's solvency. Nothing in this Trust Agreement shall in any way diminish
any rights of any Trust Beneficiary to pursue his or her rights as a general
creditor of the Company with respect to his or her benefits hereunder or
otherwise.
(c) If the Trustee discontinues payments of benefits from the Trust and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments which would
have been made to Trust Beneficiaries in accordance with Schedule B during the
period of such discontinuance, less the aggregate amount of payments made to
Trust Beneficiaries by the Company in lieu of the payments provided for
hereunder during any such period of discontinuance (together with interest on
the amount delayed at the prime rate then in effect at the Trustee on the date
of said payment).
-5-
<PAGE>
SECTION 6. INVESTMENT OF PRINCIPAL AND INCOME
Prior to a Change of Control, the Trustee shall invest the principal of the
Trust and any earnings thereon in accordance with such investment objectives,
policies and restrictions as the Company may from time to time prescribe, or, if
the Company has appointed an investment manager to manage or direct the
investment of some or all of the assets of the Trust, in accordance with the
directions of such investment manager. The Trustee shall have no duty to
inquire into or review the aforesaid investment objectives, policies, or
restrictions, or the investments made pursuant to the directions of an
investment manager. In no event, however, shall assets held in the Trust be
invested in securities or obligations issued by the Company or any affiliate of
the Company. Following a Change of Control, the Trustee shall invest the assets
of the Trust as it determines in its sole discretion, in any form of tangible or
intangible property, real or personal, or in the securities or obligations of
any form of enterprise wherever it may be located (other than in securities or
obligations of the Company or any affiliate of the Company).
SECTION 7. DISPOSITION OF PRINCIPAL AND INCOME
During the term of this Trust, all principal amounts contributed to the
Trust and all interest thereon, net of expenses, shall be accumulated and
reinvested for the purposes herein provided. Subject to the provisions of
Section 1(c), 3(a), 4 and 12, the Company shall have no right or power to direct
the Trustee to return to the Company or to direct to others any of the Trust
assets before all payments of benefits payable under the Trust, and all payments
in respect of legal expenses incurred to enforce rights to such benefits, have
been made to Trust Beneficiaries. Upon payment of all such benefits and legal
expenses, the Trustee shall return to the Company all amounts, if any, then
remaining in the Trust.
SECTION 8. ACCOUNTING BY THE TRUSTEE
The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be done,
including such specific records as shall be agreed upon in writing between the
Company and the Trustee. All such accounts, books and records shall be open to
inspection and audit at all reasonable times by the Company. Within sixty (60)
days following the close of each calendar year and within sixty (60) days after
the removal or resignation of the Trustee, the Trustee shall deliver to the
Company a written account of its administration of the Trust during such year or
during the period from the close of the last preceding year to the date of such
removal or resignation, setting forth all investments, receipts, disbursements
and other transactions effected by it, including a description of all securities
and investments purchased and sold with the cost or net proceeds of such
purchases or sales (accrued interest paid or receivable being shown
-6-
<PAGE>
separately), and showing all cash, securities and other property held in the
Trust at the end of such year as the date of such removal or resignation, as the
case may be.
SECTION 9. RESPONSIBILITY OF THE TRUSTEE
(a) The Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; provided, however, that the
-------- -------
Trustee shall incur no liability to anyone for any action reasonably taken in
accordance with a written direction, request, or approval given by the Company
or by an investment manager appointed by the Company that is contemplated by and
complies with the terms of this Trust Agreement, including distributions made in
accordance with Schedule B as from time to time in effect, and to that extent
shall be relieved of the prudent person rule for investments.
(b) The Company agrees to indemnify the Trustee against all loss or
expense incurred by the Trustee under this Agreement, except that in no event
shall the Company indemnify the Trustee against any loss or expense incurred by
reason of the Trustee's own negligence or misconduct. Without limiting the
foregoing, the Trustee shall not be required to undertake or to defend on behalf
of any person any litigation arising in connection with this Trust agreement,
unless it be first indemnified by the Company against its prospective costs,
expenses and liability.
(c) The Trustee may consult with legal counsel (who may also be counsel
for the Trustee generally) with respect to any of its duties or obligations
hereunder, including any determination as to whether a Change of Control has
occurred or as to whether the Company is Insolvent, and shall not be held
responsible for acting or refraining from acting in accordance with the advice
of any such counsel selected with reasonable care.
(d) The Trustee may hire agents, legal counsel, accountants, actuaries,
investment managers and financial consultants.
(e) The Trustee shall have, without exclusions, all powers conferred on
trustees by applicable law unless expressly provided otherwise herein.
(f) Nothing in this Trust Agreement shall be construed as constituting the
Trustee plan "administrator," as that term is defined in Section 3(16) of ERISA,
of any plan or arrangement pursuant to which benefits are provided hereunder.
-7-
<PAGE>
SECTION 10. COMPENSATION AND EXPENSES OF THE TRUSTEE
The Trustee shall be entitled to receive such reasonable compensation for
its services as shall be agreed upon by the Company and the Trustee. The
Trustee shall also be entitled to receive its reasonable expenses incurred with
respect to the administration of the Trust. All such compensation and expenses
shall be payable by the Company, but if not paid by the Company shall be a
charge against and may be paid from the assets of the Trust.
SECTION 11. REPLACEMENT OF THE TRUSTEE
The Trustee may be removed by the Company at any time prior to a Change of
Control, or may resign at any time, in either case by notice in writing. Upon
the removal or the resignation of the Trustee, a new trustee, which shall be a
bank or trust company having a combined capital and surplus of not less than
$50,000,000 shall be appointed by the Company. Following a Change of Control,
the Trustee cannot be removed by the Company; provided, however, if at the time
-------- -------
of a Change of Control the Trustee is Fleet National Bank, or its successor, or
any other entity affiliated with the Company, the Company shall within 15 days
remove said Trustee and appoint an unaffiliated bank or trust company which meet
the capital and surplus requirements of this Section 11.
SECTION 12. AMENDMENT OR TERMINATION
(a) This Trust Agreement may be amended at any time and to any extent by a
written instrument executed by the Committee or the Company; provided, that no
--------
such amendment that would increase the duties or responsibilities of the Trustee
shall be effective unless the Trustee shall have consented thereto; and further
--- -------
provided, that following a Change of Control no amendment having an adverse
- --------
effect on the benefits or legal expenses payable hereunder to any Trust
Beneficiary shall be effective without the written consent of such Trust
Beneficiary; and further provided, that following a Change of Control, the
--- ------- --------
provisions of this Section 12 may not be amended.
(b) The Trust shall not terminate until the date on which the last Trust
Beneficiary ceases to be entitled to benefits payable under the Trust, unless
sooner revoked in writing in accordance with Section 1.
(c) Upon termination of the Trust or upon revocation of the Trust under
Section 1, all assets remaining in the Trust shall be returned to the Company.
-8-
<PAGE>
SECTION 13. SEVERABILITY AND ALIENATION
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition without invalidating the
remaining provisions hereof.
(b) To the extent permitted by law, benefits to Trust Beneficiaries under
this Agreement may not be anticipated, assigned (either at law or in equity),
alienated or subject to attachment, garnishment, levy, execution or other legal
or equitable process and no benefit actually paid to Trust Beneficiaries by the
Trustee shall be subject to any claim for repayment by the Company or the
Trustee.
SECTION 14. GOVERNING LAW
This Trust Agreement shall be governed by and construed in accordance with
the laws of Rhode Island.
IN WITNESS WHEREOF, the Company and the Trustee have executed this
Agreement as of the date first above written.
FLEET FINANCIAL GROUP, INC.
By /s/
--------------------------
FLEET NATIONAL BANK
By /s/
--------------------------
-9-
<PAGE>
SCHEDULE A
To The Trust Agreement For The
Retirement Income Assurance Plan and
The Supplemental Executive Retirement Plan
Definition of "Change of Control"
---------- -- ------- -- -------
"Change of Control" shall mean:
(a) The acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 25% or more of the then outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock"); provided, however, that any
acquisition by the Company or its subsidiaries, or any employee benefit plan (or
related trust) of the Company or its subsidiaries, of 25% or more of the
Outstanding Company Common Stock shall not constitute a Change of Control; and
provided, further that any acquisition by a corporation with respect to which,
following such acquisition, more than 50% of the then outstanding shares of
common stock of such corporation is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Company Common Stock immediately prior
to such acquisition in substantially the same proportion as their ownership
immediately prior to such acquisition of the Outstanding Company Common Stock,
shall not constitute a Change of Control; or
(b) Individuals who, as of January 1, 1996, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board, provided that any individual becoming a director subsequent to January 1,
1996 whose election, or nomination for election by the Company's stockholders,
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the Company (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or
(c) Consummation of a reorganization, merger, consolidation, sale or
other disposition of all or substantially all of the assets of the Company
(a"Business Combination"), in each case, with respect to which all or
substantially all of the individuals and entities who were the beneficial owners
of the Outstanding Company Common Stock immediately prior to such Business
Combination do not, following such Business Combination, beneficially own,
directly or indirectly, more than 50% of the then outstanding shares of common
stock of the
-10-
<PAGE>
corporation resulting from such a Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the Company
or all or substantially all of the Company's assets either directly or through
one or more subsidiaries).
(d) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
Anything in this Agreement to the contrary notwithstanding, if an event
that would, but for this paragraph, constitute a Change of Control results from
or arises out of a purchase or other acquisition of the Company, directly or
indirectly, by a corporation or other entity in which any Trust Beneficiary has
a greater than ten percent (10%) direct or indirect equity interest, such event
shall not constitute a Change of Control solely with respect to such Trust
Beneficiary.
-11-
<PAGE>
SCHEDULE B
To The Trust Agreement For The
Retirement Income Assurance Plan and
The Supplemental Executive Retirement Plan
I. List of Benefit Plans and Arrangements to be Funded by Trust
---- -- ------- ----- --- ------------ -- -- ------ -- -----
Retirement Income Assurance Plan
Supplemental Executive Retirement Plan
II. Names of Trust Beneficiaries and Amounts or Basis for Determining
----- -- ----- ------------- --- ------- -- ----- --- -----------
Amounts Payable to each Trust Beneficiary under each Benefit Plan
------- ------- -- ---- ----- ----------- ----- ---- ------- ----
listed in I above.
------ -- - ------
The identification of Trust Beneficiaries (active and inactive) and
their Plan Values may be obtained from the Corporate Benefits
Director.
-12-
EXHIBIT 11
<TABLE>
FLEET FINANCIAL GROUP, INC.
COMPUTATION OF EQUIVALENT SHARES AND PER SHARE EARNINGS
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
For the Three Months Ended June 30
--------------------------------------------------------------------
1996 1995
-------------------------------- --------------------------------
FULLY FULLY
PRIMARY DILUTED PRIMARY DILUTED
---------------- --------------- ----------------- -------------
<S> <C> <C> <C> <C>
Equivalent shares:
Average shares outstanding 263,176,421 263,176,421 246,826,417 246,826,417
Additional shares due to:
Stock options 2,316,836 2,419,382 1,784,281 2,116,450
Warrants 3,847,486 3,867,376 3,643,105 3,947,317
Dual convertible preferred stock(a) --- --- 16,033,994 16,033,994
---------------- --------------- ---------------- ----------------
Total equivalent shares 269,340,743 269,463,179 268,287,797 268,924,178
---------------- --------------- ---------------- ----------------
Earnings per share:
Net income $ 277,727 $ 277,727 $ 254,023 $ 254,023
Less: Preferred stock dividends (19,314 ) (19,314 ) (9,698 ) (9,698 )
---------------- --------------- ---------------- ----------------
Adjusted net income $ 258,413 $ 258,413 $ 244,325 $ 244,325
---------------- --------------- ---------------- ----------------
Total equivalent shares 269,340,743 269,463,179 268,287,797 268,924,178
---------------- --------------- ---------------- ----------------
Earnings per share on adjusted net
income $ 0.96 $ 0.96 $ 0.91 $ 0.91
---------------- --------------- ---------------- ----------------
</TABLE>
(a) The dual convertible preferred stock was converted into common stock on
December 31, 1995.
31
<PAGE>
EXHIBIT 11
<TABLE>
FLEET FINANCIAL GROUP, INC.
COMPUTATION OF EQUIVALENT SHARES AND PER SHARE EARNINGS
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
For the Six Months Ended June 30
<CAPTION>
---------------------------------------------------------------------
1996 1995
-------------------------------- -----------------------------------
FULLY FULLY
PRIMARY DILUTED PRIMARY DILUTED
---------------- -------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Equivalent shares:
Average shares outstanding 262,851,155 262,851,155 244,758,681 244,758,681
Additional shares due to:
Stock options 2,208,956 2,556,645 1,731,943 2,075,234
Warrants 3,758,732 3,867,376 3,498,855 3,889,249
Dual convertible preferred stock(a) --- --- 16,033,994 16,033,994
---------------- -------------- ----------------- -----------------
Total equivalent shares 268,818,843 269,275,176 266,023,473 266,757,158
---------------- -------------- ----------------- -----------------
Earnings per share:
Net income $ 541,529 $ 541,529 $ 480,016 $ 480,016
Less: Preferred stock dividends (31,852) (31,852) (18,130) (18,130)
---------------- -------------- ----------------- -----------------
Adjusted net income $ 509,677 $ 509,677 $ 461,886 $ 461,886
---------------- -------------- ----------------- -----------------
Total equivalent shares 268,818,843 269,275,176 266,023,473 266,757,158
---------------- -------------- ----------------- -----------------
Earnings per share on adjusted net
income $ 1.90 $ 1.89 $ 1.74 $ 1.73
---------------- -------------- ----------------- -----------------
</TABLE>
(a) The dual convertible preferred stock was converted into common stock on
December 31, 1995.
32
<TABLE><CAPTION>
EXHIBIT 12
FLEET FINANCIAL GROUP, INC.
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED DIVIDENDS EXCLUDING INTEREST ON DEPOSITS
(THOUSANDS)
Three months Six months
ended ended
June 30 June 30 Year ended December 31
- ---------------------------------------------------------------------------------------------------------------------------
1996 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Earnings:
Income (loss) before income taxes, extra-
ordinary credit and cumulative effect of
change in method of accounting $470,237 $ 920,376 $1,033,756 $1,379,639
Adjustments:
(a) Fixed charges:
(1) Interest on borrowed funds 192,624 403,598 1,278,598 990,395
(2) 1/3 of Rent 13,994 25,890 49,921 50,597
(b) Preferred dividends 32,680 54,170 62,064 48,859
- ---------------------------------------------------------------------------------------------------------------------------
(c) Adjusted earnings $709,535 $1,404,034 $2,424,339 $2,469,490
- ---------------------------------------------------------------------------------------------------------------------------
Fixed charges and preferred dividends $239,298 $ 483,658 $1,390,583 $1,089,851
- ---------------------------------------------------------------------------------------------------------------------------
Adjusted earnings/fixed charges 2.97x 2.90x 1.74x 2.27x
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
1993 1992 1991
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Earnings:
Income (loss) before income taxes, extra-
ordinary credit and cumulative effect of
change in method of accounting $1,094,456 $ 617,369 $(16,375 )
Adjustments:
(a) Fixed charges:
(1) Interest on borrowed funds 751,754 638,430 728,337
(2) 1/3 of Rent 52,254 49,197 42,524
(b) Preferred dividends 60,365 65,658 24,220
- ---------------------------------------------------------------------------------------------------------
(c) Adjusted earnings $1,958,829 $1,370,654 $778,706
- ---------------------------------------------------------------------------------------------------------
Fixed charges and preferred dividends $ 864,373 $ 753,285 $795,081
- ---------------------------------------------------------------------------------------------------------
Adjusted earnings/fixed charges 2.27x 1.82x 0.98x *
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
INCLUDING INTEREST ON DEPOSITS
Three months Six months
ended ended
June 30 June 30 Year ended December 31
- ----------------------------------------------------------------------------------------------------------------------------
1996 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Earnings:
Income (loss) before income taxes, extra-
ordinary credit and cumulative effect of
change in method of accounting $ 470,237 $ 920,376 $1,033,756 $1,379,639
Adjustments:
(a) Fixed charges:
(1) Interest on borrowed funds 192,624 403,598 1,278,598 990,395
(2) 1/3 of Rent 13,994 25,890 49,921 50,597
(3) Interest on deposits 429,174 831,490 1,726,403 1,170,532
(b) Preferred dividends 32,680 54,170 62,064 48,859
- ----------------------------------------------------------------------------------------------------------------------------
(c) Adjusted earnings $1,138,709 $2,235,524 $4,150,742 $3,640,022
- ----------------------------------------------------------------------------------------------------------------------------
Fixed charges and preferred dividends $ 668,472 $1,315,148 $3,116,986 $2,260,383
- ----------------------------------------------------------------------------------------------------------------------------
Adjusted earnings/fixed charges 1.70x 1.70x 1.33x 1.61x
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year ended December 31
- ---------------------------------------------------------------------------------------------------------
1993 1992 1991
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Earnings:
Income (loss) before income taxes, extra-
ordinary credit and cumulative effect of
change in method of accounting $1,094,456 $ 617,369 $ (16,375 )
Adjustments:
(a) Fixed charges:
(1) Interest on borrowed funds 751,754 638,430 728,337
(2) 1/3 of Rent 52,254 49,197 42,524
(3) Interest on deposits 1,165,046 1,698,804 2,414,060
(b) Preferred dividends 60,365 65,658 24,220
- ---------------------------------------------------------------------------------------------------------
(c) Adjusted earnings $3,123,875 $3,069,458 $3,192,766
- ---------------------------------------------------------------------------------------------------------
Fixed charges and preferred dividends $2,029,419 $2,452,089 $3,209,141
- ---------------------------------------------------------------------------------------------------------
Adjusted earnings/fixed charges 1.54x 1.25x 0.99x *
- ---------------------------------------------------------------------------------------------------------
</TABLE>
* Note that adjusted earnings are inadequate to cover fixed charges, the
deficiency being $16,375 for both the ratio excluding and including interest
on deposits.
<PAGE>
<TABLE><CAPTION>
EXHIBIT 12
FLEET FINANCIAL GROUP, INC.
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
EXCLUDING INTEREST ON DEPOSITS
(THOUSANDS)
Three months Six months
ended ended
June 30 June 30 Year ended December 31
- ----------------------------------------------------------------------------------------------------------------------------
1996 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Earnings:
Income (loss) before income taxes, extra-
ordinary credit and cumulative effect of
change in method of accounting $470,237 $ 920,376 $1,033,756 $1,379,639
Adjustments:
(a) Fixed charges:
(1) Interest on borrowed funds 192,624 403,598 1,278,598 990,395
(2) 1/3 of Rent 13,994 25,890 49,921 50,597
- ----------------------------------------------------------------------------------------------------------------------------
(b) Adjusted earnings $676,855 $1,349,864 $2,362,275 $2,420,631
- ----------------------------------------------------------------------------------------------------------------------------
Fixed charges and preferred dividends $206,618 $ 429,488 $1,328,519 $1,040,992
- ----------------------------------------------------------------------------------------------------------------------------
Adjusted earnings/fixed charges 3.28x 3.14x 1.78x 2.33x
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year ended December 31
- ----------------------------------------------------------------------------------------------------
1993 1992 1991
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Earnings:
Income (loss) before income taxes, extra-
ordinary credit and cumulative effect of
change in method of accounting $1,094,456 $ 617,369 $(16,375 )
Adjustments:
(a) Fixed charges:
(1) Interest on borrowed funds 751,754 638,430 728,337
(2) 1/3 of Rent 52,254 49,197 42,524
- ----------------------------------------------------------------------------------------------------
(b) Adjusted earnings $1,898,464 $1,304,996 $754,486
- ----------------------------------------------------------------------------------------------------
Fixed charges and preferred dividends $ 804,008 $ 687,627 $770,861
- ----------------------------------------------------------------------------------------------------
Adjusted earnings/fixed charges 2.36x 1.90x 0.98x *
- ----------------------------------------------------------------------------------------------------
<CAPTION>
INCLUDING INTEREST ON DEPOSITS
Three months Six months
ended ended
June 30 June 30 Year ended December 31
- ---------------------------------------------------------------------------------------------------------------------------
1996 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Earnings:
Income (loss) before income taxes, extra-
ordinary credit and cumulative effect of
change in method of accounting $ 470,237 $ 920,376 $1,033,756 $1,379,639
Adjustments:
(a) Fixed charges:
(1) Interest on borrowed funds 192,624 403,598 1,278,598 990,395
(2) 1/3 of Rent 13,994 25,890 49,921 50,597
(3) Interest on deposits 429,174 831,490 1,726,403 1,170,532
- ---------------------------------------------------------------------------------------------------------------------------
(b) Adjusted earnings $1,106,029 $2,181,354 $4,088,678 $3,591,163
- ---------------------------------------------------------------------------------------------------------------------------
Fixed charges and preferred dividends $ 635,792 $1,260,978 $3,054,922 $2,211,524
- ---------------------------------------------------------------------------------------------------------------------------
Adjusted earnings/fixed charges 1.74x 1.73x 1.34x 1.62x
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year ended December 31
- --------------------------------------------------------------------------------------------------
1993 1992 1991
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Earnings:
Income (loss) before income taxes, extra-
ordinary credit and cumulative effect of
change in method of accounting $1,094,456 $ 617,369 $ (16,375)
Adjustments:
(a) Fixed charges:
(1) Interest on borrowed funds 751,754 638,430 728,337
(2) 1/3 of Rent 52,254 49,197 42,524
(3) Interest on deposits 1,165,046 1,698,804 2,414,060
- --------------------------------------------------------------------------------------------------
(b) Adjusted earnings $3,063,510 $3,003,800 $3,168,546
- --------------------------------------------------------------------------------------------------
Fixed charges and preferred dividends $1,969,054 $2,386,431 $3,184,921
- --------------------------------------------------------------------------------------------------
Adjusted earnings/fixed charges 1.56x 1.26x 0.99x *
- --------------------------------------------------------------------------------------------------
* Note that adjusted earnings are inadequate to cover fixed charges, the deficiency being $16,375 for both the ratio excluding
and including interest on deposits.
</TABLE>
34
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
EXHIBIT 27(A)
FLEET FINANCIAL GROUP
FINANCIAL DATA SCHEDULE
(MILLIONS)
This schedule contains summary financial information extracted from the June 30,
1996 consolidated financial statements and management's discussion and analysis
of financial condition and results of operations contained in the Form 10-Q and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> $6,989
<INT-BEARING-DEPOSITS> 50
<FED-FUNDS-SOLD> 9
<TRADING-ASSETS> 122
<INVESTMENTS-HELD-FOR-SALE> 10,452
<INVESTMENTS-CARRYING> 963
<INVESTMENTS-MARKET> 950
<LOANS> 59,093
<ALLOWANCE> 1,597
<TOTAL-ASSETS> 87,728
<DEPOSITS> 68,145
<SHORT-TERM> 4,637
<LIABILITIES-OTHER> 2,516
<LONG-TERM> 5,303
0
1,003
<COMMON> 3,145
<OTHER-SE> 2,979
<TOTAL-LIABILITIES-AND-EQUITY> 87,728
<INTEREST-LOAN> 2,427
<INTEREST-INVEST> 387
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 2,814
<INTEREST-DEPOSIT> 831
<INTEREST-EXPENSE> 1,235
<INTEREST-INCOME-NET> 1,579
<LOAN-LOSSES> 84
<SECURITIES-GAINS> 38
<EXPENSE-OTHER> 1,643
<INCOME-PRETAX> 921
<INCOME-PRE-EXTRAORDINARY> 921
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 542
<EPS-PRIMARY> 1.90
<EPS-DILUTED> 1.89
<YIELD-ACTUAL> 4.60
<LOANS-NON> $ 691
<LOANS-PAST> 221
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,321
<CHARGE-OFFS> 190
<RECOVERIES> 55
<ALLOWANCE-CLOSE> 1,597
<ALLOWANCE-DOMESTIC> 1,597
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
EXHIBIT 27(B)
FLEET FINANCIAL GROUP
RESTATED FINANCIAL DATA SCHEDULE
(MILLIONS)
This schedule contains restated summary financial information for the six months
ended June 30, 1995 giving effect to the merger of Shawmut National Corporation
with and into Fleet, accounted for as a pooling of interests and consummated on
November 30, 1995.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> $ 3,300
<INT-BEARING-DEPOSITS> 382
<FED-FUNDS-SOLD> 1,581
<TRADING-ASSETS> 89
<INVESTMENTS-HELD-FOR-SALE> 12,380
<INVESTMENTS-CARRYING> 8,264
<INVESTMENTS-MARKET> 8,174
<LOANS> 52,325
<ALLOWANCE> 1,492
<TOTAL-ASSETS> 87,168
<DEPOSITS> 55,715
<SHORT-TERM> 16,507
<LIABILITIES-OTHER> 1,586
<LONG-TERM> 6,728
0
682
<COMMON> 3,076
<OTHER-SE> 2,874
<TOTAL-LIABILITIES-AND-EQUITY> 87,168
<INTEREST-LOAN> 2,300
<INTEREST-INVEST> 686
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 2,986
<INTEREST-DEPOSIT> 822
<INTEREST-EXPENSE> 1,466
<INTEREST-INCOME-NET> 1,520
<LOAN-LOSSES> 48
<SECURITIES-GAINS> 5
<EXPENSE-OTHER> 1,563
<INCOME-PRETAX> 789
<INCOME-PRE-EXTRAORDINARY> 789
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 480
<EPS-PRIMARY> 1.74
<EPS-DILUTED> 1.73
<YIELD-ACTUAL> 4.21
<LOANS-NON> $ 681
<LOANS-PAST> 177
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,496
<CHARGE-OFFS> 192
<RECOVERIES> 56
<ALLOWANCE-CLOSE> 1,492
<ALLOWANCE-DOMESTIC> 1,492
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
