<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 6, 1996
REGISTRATION NO. 333-15435
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C> <C>
FLEET FINANCIAL GROUP, INC. RHODE ISLAND 05-0341324
Fleet Capital Trust I Delaware To be applied for
Fleet Capital Trust II Delaware To be applied for
Fleet Capital Trust III Delaware To be applied for
Fleet Capital Trust IV Delaware To be applied for
Fleet Capital Trust V Delaware To be applied for
(Exact name of issuer as (State or other jurisdiction (I.R.S. Employer
specified in its charter) of Identification No.)
incorporation or
organization)
</TABLE>
ONE FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
(617) 292-2000
(Address, including zip code, and telephone number, including area code, of
principal executive offices)
WILLIAM C. MUTTERPERL, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
FLEET FINANCIAL GROUP, INC.
ONE FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
LAURA N. WILKINSON, ESQ. VINCENT J. PISANO, ESQ.
EDWARDS & ANGELL SKADDEN, ARPS, SLATE,
One Hospital Trust Plaza MEAGHER & FLOM LLP
Providence, Rhode Island 02903 919 Third Avenue
(401) 274-9200 New York, NY 10022 (212) 735-3000
</TABLE>
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
------------------------
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
------------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT IS SUBJECT TO COMPLETION
PURSUANT TO RULE 424 UNDER THE SECURITIES ACT OF 1933. A REGISTRATION STATEMENT
RELATING TO THESE SECURITIES HAS BEEN DECLARED EFFECTIVE BY THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF 1933. A
FINAL PROSPECTUS SUPPLEMENT WILL BE DELIVERED TO PURCHASERS OF THESE SECURITIES.
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BY ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED NOVEMBER 6, 1996
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED NOVEMBER , 1996)
PREFERRED SECURITIES
% TRUST ORIGINATED PREFERRED SECURITIES-SM- ("TOPRS-SM- ")
FLEET CAPITAL TRUST I
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED BY
FLEET FINANCIAL GROUP, INC.
---------------
The % Trust Originated Preferred Securities (the "Preferred Securities")
offered hereby represent undivided preferred beneficial interests in the assets
of Fleet Capital Trust I, a statutory business trust formed under the laws of
the State of Delaware ("Fleet Capital" or the "Trust"). Fleet Financial Group,
Inc., a Rhode Island corporation ("Fleet"), will own all of the common
securities (the "Common Securities", and together with the Preferred Securities,
the "Trust Securities") representing undivided beneficial interests in the
assets of Fleet Capital. Fleet Capital exists for the sole purpose of issuing
the Trust Securities and investing the proceeds thereof in an equivalent amount
of % Junior Subordinated Deferrable Interest Debentures due 2026 (the "Junior
Subordinated Debentures") of Fleet. The Junior Subordinated Debentures will
mature on , 2026, which date may be (i) shortened to a date not
earlier than , 2001 or (ii) extended to a date not later than
, 2045, (such date, the "Stated Maturity"), in each
(CONTINUED ON NEXT PAGE)
------------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE S-4 OF THIS PROSPECTUS SUPPLEMENT FOR
CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES,
INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF
DISTRIBUTIONS ON THE PREFERRED SECURITIES MAY BE DEFERRED AND THE RELATED UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES OF SUCH DEFERRAL.
Application has been made to list the Preferred Securities on the New York
Stock Exchange, Inc. (the "New York Stock Exchange"). If so approved, trading of
the Preferred Securities on the New York Stock Exchange is expected to commence
within a 30-day period after the initial delivery of the Preferred Securities.
See "Underwriting."
--------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) COMMISSION(2) TRUST(3)(4)
<S> <C> <C> <C>
Per Preferred Security................................ $ (3) $
Total................................................. $ (3) $
</TABLE>
(1) Plus accrued distributions, if any, from November , 1996.
(2) Fleet Capital and Fleet have agreed to indemnify the several Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."
(3) In view of the fact that the proceeds of the sale of the Preferred
Securities will be invested in the Junior Subordinated Debentures, Fleet has
agreed to pay to the Underwriters as compensation (the "Underwriters'
Compensation") for their arranging the investment therein of such proceeds
$ per Preferred Security (or $ in the aggregate); provided, that such
compensation for sales of 10,000 or more Preferred Securities to a single
purchaser will be $ per Preferred Security. Therefore, to the extent of
such sales, the actual amount of Underwriters' Compensation will be less
than the aggregate amount specified in the preceding sentence. See
"Underwriting."
(4) Before deducting expenses of the offering which are payable by Fleet
estimated at $ .
--------------------------
The Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that delivery of the Preferred Securities will be made only in book-entry form
through the facilities of The Depository Trust Company, on or about ,
1996.
--------------------------
MERRILL LYNCH & CO.
---------------
The date of this Prospectus Supplement is November , 1996.
-SM- "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
case subject to satisfying certain conditions, including, in the event of a
shortening of the maturity date, the prior approval of the Board of Governors of
the Federal Reserve System (the "Federal Reserve Board"), if such approval is
then required under applicable law, rules, guidelines or policies. The Junior
Subordinated Debentures when issued will be unsecured obligations of Fleet and
will be subordinate and junior in right of payment to certain other indebtedness
of Fleet, as described herein. Upon an event of default under the Declaration
(as defined herein), the holders of Preferred Securities will have a preference
over the holders of the Common Securities with respect to payments of
distributions and payments upon redemption, liquidation and otherwise.
Holders of the Preferred Securities are entitled to receive cumulative cash
distributions at an annual rate of % of the liquidation amount of $25 per
Preferred Security, accruing from the date of original issuance and payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing ("distributions"). The payment of
distributions out of moneys held by Fleet Capital and payments on liquidation of
Fleet Capital or the redemption of Preferred Securities, as set forth below, are
guaranteed by Fleet (the "Guarantee") to the extent described herein and under
"Description of Preferred Securities Guarantees" in the accompanying Prospectus.
The Guarantee covers payments of distributions and other payments on the
Preferred Securities if and to the extent that Fleet Capital has funds available
therefor which will not be the case unless Fleet has made a payment of interest
or principal or other payments on the Junior Subordinated Debentures held by
Fleet Capital as its sole asset. The Guarantee, when taken together with Fleet's
obligations under the Junior Subordinated Debentures and the Indenture (as
defined below) and its obligations under the Declaration (as defined below),
including its liabilities to pay costs, expenses, debts and obligations of Fleet
Capital (other than with respect to the Trust Securities), provide a full and
unconditional guarantee of amounts due on the Preferred Securities. See "Risk
Factors--Rights Under the Guarantee" herein. The obligations of Fleet under the
Guarantee are subordinate and junior in right of payment to all other
liabilities of Fleet and rank pari passu with the most senior preferred stock
issued, from time to time, if any, by Fleet. The obligations of Fleet under the
Junior Subordinated Debentures are subordinate and junior in right of payment to
all present and future Senior Indebtedness and Other Financial Obligations (each
as defined herein) of Fleet, which aggregated approximately $3.3 billion at
September 30, 1996, and rank pari passu with Fleet's other general unsecured
creditors. The Junior Subordinated Debentures purchased by Fleet Capital may be
subsequently distributed pro rata to holders of the Preferred Securities and
Common Securities in connection with the dissolution of Fleet Capital, upon the
occurrence of certain events.
The distribution rate and the distribution payment date and other payment
dates for the Preferred Securities will correspond to the interest rate and
interest payment date and other payment dates on the Junior Subordinated
Debentures, which will be the sole assets of Fleet Capital. As a result, if
principal or interest is not paid on the Junior Subordinated Debentures, no
amounts will be paid on the Preferred Securities. If Fleet does not make
principal or interest payments on the Junior Subordinated Debentures, Fleet
Capital will not have sufficient funds to make distributions on the Preferred
Securities. In such event, the Guarantee will not apply to such distributions
until Fleet Capital has sufficient funds available therefor.
So long as Fleet shall not be in default in the payment of interest on the
Junior Subordinated Debentures, Fleet has the right to defer payments of
interest on the Junior Subordinated Debentures by extending the interest payment
period on the Junior Subordinated Debentures at any time for up to 20
consecutive quarters (each, an "Extension Period"), provided that an Extension
Period may not extend beyond the Stated Maturity of the Junior Subordinated
Debentures. If interest payments are so deferred, distributions on the Preferred
Securities will also be deferred. During such Extension Period, distributions
will continue to accrue with interest thereon (to the extent permitted by
applicable law) at an annual rate of % percent per annum compounded
quarterly, and during any Extension Period, holders of Preferred Securities will
be required to include deferred interest income in their gross income for United
States
S-2
<PAGE>
federal income tax purposes in advance of receipt of the cash distributions with
respect to such deferred interest payments. There could be multiple Extension
Periods of varying lengths throughout the term of the Junior Subordinated
Debentures. See "Description of the Junior Subordinated Debentures--Option to
Extend Interest Payment Period;" "Risk Factors--Option to Extend Interest
Payment Period" and "United States Federal Income Taxation--Interest Income and
Original Issue Discount."
The Junior Subordinated Debentures are redeemable by Fleet, in whole or in
part, from time to time, on or after , 2001, or, in whole but not in
part, prior to , 2001, upon the occurrence of a Tax Event (as defined
herein). If Fleet redeems Junior Subordinated Debentures, Fleet Capital must
redeem Trust Securities on a pro rata basis having an aggregate liquidation
amount equal to the aggregate principal amount of the Junior Subordinated
Debentures so redeemed at $25 per Preferred Security plus accrued and unpaid
distributions thereon (the "Redemption Price") to the date fixed for redemption.
See "Description of the Preferred Securities-- Mandatory Redemption." The
Preferred Securities will be redeemed upon maturity of the Junior Subordinated
Debentures.
Fleet will have the right at any time to liquidate Fleet Capital and cause
the Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities. If the Junior Subordinated Debentures are distributed to the holders
of the Preferred Securities, Fleet will use its best efforts to have the Junior
Subordinated Debentures listed on the New York Stock Exchange or on such other
exchange as the Preferred Securities are then listed. See "Description of the
Preferred Securities--Tax Event Redemption or Distribution" and "Description of
the Junior Subordinated Debentures."
Any such redemption or distribution of the Junior Subordinated Debentures
may require the prior approval of the Federal Reserve Board if such approval is
then required under applicable law, rules, guidelines or policies.
In the event of the involuntary or voluntary dissolution, winding-up or
termination of Fleet Capital, the holders of the Preferred Securities will be
entitled to receive for each Preferred Security a liquidation amount of $25 plus
accrued and unpaid distributions thereon (including interest thereon) to the
date of payment, unless, in connection with such dissolution, the Junior
Subordinated Debentures are distributed to the holders of the Preferred
Securities. See "Description of the Preferred Securities--Liquidation
Distribution Upon Dissolution."
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING TRANSACTIONS, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-3
<PAGE>
RISK FACTORS
Prospective purchasers of Preferred Securities should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following matters.
ABSENCE OF PRIOR PUBLIC MARKET
Prior to this offering, there has been no public market for the Preferred
Securities. Although application has been made to list the Preferred Securities
on the New York Stock Exchange, there can be no assurance that, once listed, an
active trading market will develop for the Preferred Securities or that, if such
market develops, the market price will equal or exceed the public offering price
set forth on the cover page of this Prospectus Supplement.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND JUNIOR SUBORDINATED
DEBENTURES
Fleet's obligations under the Guarantee are subordinate and junior in right
of payment to all liabilities of Fleet and rank pari passu with the most senior
preferred stock issued, if any, from time to time by Fleet. The obligations of
Fleet under the Junior Subordinated Debentures are subordinate and junior in
right of payment to all present and future Senior Indebtedness and Other
Financial Obligations of Fleet and rank pari passu with obligations to or rights
of Fleet's other general unsecured creditors. No payment may be made of the
principal of, premium, if any, or interest on the Junior Subordinated
Debentures, or in respect of any redemption, retirement, purchase or other
acquisition of any of the Junior Subordinated Debentures, at any time when (i)
there is a default in the payment of the principal of, premium, if any, interest
on or otherwise in respect of any Senior Indebtedness, whether at maturity or at
a date fixed for prepayment or by declaration or otherwise, or (ii) any event of
default with respect to any Senior Indebtedness has occurred and is continuing,
or would occur as a result of such payment on the Junior Subordinated Debentures
or any redemption, retirement, purchase or other acquisition of any of the
Junior Subordinated Debentures, permitting the holders of such Senior
Indebtedness (or a trustee on behalf of the holders thereof) to accelerate the
maturity thereof. As of September 30, 1996, Senior Indebtedness and Other
Financial Obligations of Fleet aggregated approximately $3.3 billion. In
addition, because Fleet is a holding company, the Junior Subordinated Debentures
are effectively subordinated to all existing and future liabilities of Fleet's
subsidiaries, including depositors. There are no terms in the Preferred
Securities, the Junior Subordinated Debentures or the Guarantee that limit
Fleet's ability to incur additional indebtedness, including indebtedness which
ranks senior to the Junior Subordinated Debentures and the Guarantee. See
"Description of the Preferred Securities Guarantees--Status of the Preferred
Securities Guarantees" and "Description of the Junior Subordinated Debentures"
in the accompanying Prospectus, and "Description of the Junior Subordinated
Debentures--Subordination" herein.
RIGHTS UNDER THE GUARANTEE
The Guarantee will be qualified as an indenture under the Trust Indenture
Act. The First National Bank of Chicago will act as indenture trustee under the
Guarantee for the purposes of compliance with the provisions of the Trust
Indenture Act (the "Guarantee Trustee"). The Guarantee Trustee will hold the
Guarantee for the benefit of the holders of the Preferred Securities.
The Guarantee guarantees to the holders of the Preferred Securities the
payment of (i) any accrued and unpaid distributions that are required to be paid
on the Preferred Securities, to the extent Fleet Capital has funds available
therefor, (ii) the Redemption Price, including all accrued and unpaid
distributions with respect to Preferred Securities called for redemption by
Fleet Capital, to the extent Fleet Capital has funds available therefor, and
(iii) upon a voluntary or involuntary dissolution, winding-up or termination of
Fleet Capital (other than in connection with the distribution of Junior
Subordinated Debentures to the holders of Preferred Securities or a redemption
of all the Preferred Securities), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on the Preferred
Securities to the date of the payment to the extent Fleet Capital has funds
available therefor or (b) the amount of assets of Fleet Capital remaining
available for distribution to holders of the Preferred Securities in liquidation
of Fleet Capital. The holders of a majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee or
to direct the exercise of any trust or power conferred upon the Guarantee
Trustee under the Guarantee. Notwithstanding the foregoing, any holder of
Preferred Securities may institute a legal
S-4
<PAGE>
proceeding directly against Fleet to enforce such holders' rights under the
Guarantee without first instituting a legal proceeding against Fleet Capital,
the Guarantee Trustee or any other person or entity. If Fleet were to default on
its obligation to pay amounts payable on the Junior Subordinated Debentures or
otherwise, Fleet Capital would lack available funds for the payment of
distributions or amounts payable on redemption of the Preferred Securities or
otherwise, and, in such event, holders of the Preferred Securities would not be
able to rely upon the Guarantee for payment of such amounts. Instead, holders of
the Preferred Securities would rely on the enforcement (1) by the Institutional
Trustee (as defined in "Fleet Capital" herein) of its rights as registered
holder of the Junior Subordinated Debentures against Fleet pursuant to the terms
of the Junior Subordinated Debentures or (2) by such holder of its right against
Fleet to enforce payments on the Junior Subordinated Debentures. See
"Description of the Preferred Securities Guarantees" and "Description of the
Junior Subordinated Debentures" in the accompanying Prospectus. The Declaration
provides that each holder of Preferred Securities, by acceptance thereof, agrees
to the provisions of the Guarantee, including the subordination provisions
thereof, and the Indenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Declaration Event of Default (as defined herein) occurs and is
continuing, then the holders of Preferred Securities would rely on the
enforcement by the Institutional Trustee of its rights as a holder of the Junior
Subordinated Debentures against Fleet. In addition, the holders of a majority in
liquidation amount of the Preferred Securities will have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Institutional Trustee or to direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee to exercise the remedies available to
it as a holder of the Junior Subordinated Debentures. If the Institutional
Trustee fails to enforce its rights under the Junior Subordinated Debentures, a
holder of Preferred Securities may institute a legal proceeding directly against
Fleet to enforce the Institutional Trustee's rights under the Junior
Subordinated Debentures without first instituting any legal proceeding against
the Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing, and
such event is attributable to the failure of Fleet to pay interest or principal
on the Junior Subordinated Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such holder of the principal of or interest on the
Junior Subordinated Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such holder (a "Direct
Action") on or after the respective due date specified in the Junior
Subordinated Debentures. In connection with such Direct Action, Fleet will be
subrogated to the rights of such holder of Preferred Securities under the
Declaration to the extent of any payment made by Fleet to such holder of
Preferred Securities in such Direct Action. The holders of Preferred Securities
will not be able to exercise directly any other remedy available to the holders
of the Junior Subordinated Debentures. See "Description of the Preferred
Securities--Declaration Events of Default."
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Fleet has the right under the Indenture (as such term is defined in
"Description of the Junior Subordinated Debentures" herein) to defer payments of
interest on the Junior Subordinated Debentures by extending the interest payment
period at any time, and from time to time, on the Junior Subordinated
Debentures. As a consequence of such an extension, quarterly distributions on
the Preferred Securities would be deferred (but would continue to accrue,
despite such deferral, with interest thereon compounded quarterly) by Fleet
Capital during any such Extension Period. Such right to extend the interest
payment period for the Junior Subordinated Debentures is limited to a period not
exceeding 20 consecutive quarters, but no such Extension Period may extend
beyond the Stated Maturity of the Junior Subordinated Debentures. During any
Extension Period, (a) Fleet shall not declare or pay dividends on, or make a
distribution with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of the common stock, par value $0.01 per
share, of Fleet (the "Fleet Common Stock") in connection with the satisfaction
by Fleet of its obligations under any employee benefit plans or any other
contractual obligation of Fleet (other than a contractual obligation ranking
pari passu with or junior to the Junior Subordinated Debentures), (ii) as a
result of a reclassification of Fleet's capital stock or
S-5
<PAGE>
the exchange or conversion of one class or series of Fleet's capital stock for
another class or series of Fleet capital stock or (iii) the purchase of
fractional interests in shares of Fleet's capital stock pursuant to the
conversion or exchange provisions of such Fleet capital stock or the security
being converted or exchanged), (b) Fleet shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by Fleet that rank pari passu with or junior to the Junior
Subordinated Debentures and (c) Fleet shall not make any guarantee payments with
respect to the foregoing (other than pursuant to the Guarantee). Prior to the
termination of any such Extension Period, Fleet may further extend the interest
payment period; provided, that such Extension Period, together with all such
previous and further extensions thereof, may not exceed 20 consecutive quarters
or extend beyond the maturity of the Junior Subordinated Debentures. Upon the
termination of any Extension Period and the payment of all amounts then due,
Fleet may commence a new Extension Period, subject to the above requirements.
See "Description of the Preferred Securities--Distributions" and "Description of
the Junior Subordinated Debentures--Option to Extend Interest Payment Period."
Should Fleet exercise its right to defer payments of interest by extending
the interest payment period, each holder of Preferred Securities will be
required to accrue income (as original issue discount ("OID")) in respect of the
deferred stated interest allocable to its Preferred Securities for United States
federal income tax purposes, which will be allocated but not distributed to
holders of record of Preferred Securities. As a result, each such holder of
Preferred Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash and will not receive the cash from
Fleet Capital related to such income if such holder disposes of its Preferred
Securities prior to the record date for the date on which distributions of such
amounts are made. Fleet has no current intention of exercising its right to
defer payments of interest by extending the interest payment period on the
Junior Subordinated Debentures. However, should Fleet determine to exercise such
right in the future, the market price of the Preferred Securities is likely to
be affected. A holder that disposes of its Preferred Securities during an
Extension Period, therefore, might not receive the same return on its investment
as a holder that continues to hold its Preferred Securities. In addition, as a
result of the existence of Fleet's right to defer interest payments, the market
price of the Preferred Securities (which represent an undivided beneficial
interest in the Junior Subordinated Debentures) may be more volatile than other
securities on which OID accrues that do not have such rights. See "United States
Federal Income Taxation--Sales of Preferred Securities."
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed certain tax law changes that
would, among other things, generally deny corporate issuers a deduction for
interest in respect of certain debt obligations issued on or after December 7,
1995 (the "Proposed Legislation") if such debt obligations have a maximum term
in excess of twenty years and are not shown as indebtedness on the issuer's
applicable consolidated balance sheet. On March 29, 1996, Senate Finance
Committee Chairman William V. Roth, Jr. and House Ways and Means Committee
Chairman Bill Archer issued a joint statement (the "Joint Statement") indicating
their intent that the Proposed Legislation, if adopted by either of the
tax-writing committees of Congress, would have an effective date that is no
earlier than the date of "appropriate Congressional action." In addition,
subsequent to the publication of the Joint Statement, Senator Daniel Patrick
Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote letters
to Treasury Department officials concurring with the view expressed in the Joint
Statement (the "Democrat Letters"). If the principles contained in the Joint
Statement and the Democrat Letters were followed and if the Proposed Legislation
were enacted, such legislation would not apply to the Junior Subordinated
Debentures. There can be no assurance, however, that the effective date guidance
contained in the Joint Statement will be incorporated into the Proposed
Legislation, if enacted, or that other legislation enacted after the date hereof
will not otherwise adversely affect the ability of Fleet to deduct the interest
payable on the Junior Subordinated Debentures. Accordingly, there can be no
assurance that a Tax Event will not occur. The occurrence of a Tax Event may
result in the redemption of the Junior Subordinated Debentures for cash, in
which event the holders of the Preferred Securities would receive cash in
redemption of their Preferred Securities. See "Description of the Preferred
Securities--Tax Event Redemption or Distribution."
S-6
<PAGE>
REDEMPTION OR DISTRIBUTION OF THE JUNIOR SUBORDINATED DEBENTURES
Fleet will have the right at any time to terminate Fleet Capital and, after
satisfaction of claims of creditors as provided by applicable law, to cause the
Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities. In certain circumstances, Fleet shall have the right to redeem the
Junior Subordinated Debentures, in whole or in part, in which event Fleet
Capital will redeem the Trust Securities on a pro rata basis to the same extent
as the Junior Subordinated Debentures are redeemed by Fleet. Any such
distribution or redemption may require prior approval of the Federal Reserve
Board if then required under applicable law, rules, guidelines or policies. See
"Description of the Preferred Securities--Tax Event Redemption."
Under current United States federal income tax law, a distribution of Junior
Subordinated Debentures upon the dissolution of Fleet Capital would not be a
taxable event to holders of the Preferred Securities. If, however, Fleet Capital
is characterized for United States federal income tax purposes as an association
taxable as a corporation at the time of dissolution of Fleet Capital, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to holders of Preferred Securities. Moreover, upon occurrence of a Tax
Event, a dissolution of Fleet Capital in which holders of the Preferred
Securities receive cash would be a taxable event to such holders. See "United
States Federal Income Taxation--Receipt of Junior Subordinated Debentures or
Cash Upon Liquidation of Fleet Capital."
There can be no assurance as to the market prices for the Preferred
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for Preferred Securities if a dissolution or liquidation of Fleet
Capital were to occur. Accordingly, the Preferred Securities or the Junior
Subordinated Debentures may trade at a discount to the price that the investor
paid to purchase the Preferred Securities offered hereby. Because holders of
Preferred Securities may receive Junior Subordinated Debentures, prospective
purchasers of Preferred Securities are also making an investment decision with
regard to the Junior Subordinated Debentures and should carefully review all the
information regarding the Junior Subordinated Debentures contained herein and in
the accompanying Prospectus. See "Description of the Preferred Securities--Tax
Event Redemption or Distribution" and "Description of the Junior Subordinated
Debentures--General."
SHORTENING OR EXTENDING THE STATED MATURITY OF THE JUNIOR SUBORDINATED
DEBENTURES
Fleet will have the right at any time to shorten the maturity of the Junior
Subordinated Debentures to a date not earlier than , 2001. The
exercise of such right may require the prior approval of the Federal Reserve
Board if such approval is then required under applicable law, rules, guidelines
or policies.
Fleet will also have the right to extend the maturity of the Junior
Subordinated Debentures to a date no later than , 2045, so long as at
the time such election is made and at the time such extension commences (i)
Fleet is not in bankruptcy, otherwise insolvent or in liquidation, (ii) Fleet is
not in default in the payment of any interest or principal or the Junior
Subordinated Debentures, (iii) Fleet Capital is not in arrears on payments of
distributions on the Preferred Securities and no deferred distributions are
accumulated and (iv) the Junior Subordinated Debentures are rated at least BBB-
by Standard & Poor's Ratings Services, at least Baa3 by Moody's Investors
Service, Inc., or at least the equivalent by any other nationally recognized
statistical rating organization.
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and will not
be entitled to vote to appoint, remove or replace, or to increase or decrease
the number of, Fleet Trustees, which voting rights are vested exclusively in the
holder of the Common Securities. See "Description of Preferred Securities--
Voting Rights."
TRADING PRICE
The Preferred Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying Junior
Subordinated Debentures. A holder who uses the accrual method of accounting for
tax purposes (and a cash method holder, if the Junior Subordinated Debentures
are deemed to have been issued with OID) and who disposes of his Preferred
Securities between record dates for payments of distributions thereon will be
required to include accrued but unpaid interest on the Junior Subordinated
Debentures through the date of disposition in income as ordinary
S-7
<PAGE>
income (i.e., interest or, possibly, OID), and to add such amount to his
adjusted tax basis in his PRO RATA share of the underlying Junior Subordinated
Debentures deemed disposed of. To the extent the selling price is less than the
holder's adjusted tax basis (which will include all accrued but unpaid
interest), a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes. See "United States Federal Income
Taxation--Original Issue Discount" and "Sales of Preferred Securities."
CONSEQUENCES OF HIGHLY LEVERAGED TRANSACTION
The Indenture does not contain provisions that afford holders of the Junior
Subordinated Debentures protection in the event of a highly leveraged
transaction, including a change of control, or other similar transactions
involving Fleet that may adversely affect such holders. See "Description of the
Junior Subordinated Debentures--General."
FLEET FINANCIAL GROUP, INC.
GENERAL
Fleet is a diversified financial services company organized under the laws
of the State of Rhode Island. Fleet was the 11th largest bank holding company in
the United States as of June 30, 1996, in terms of total assets, with total
assets of $87.7 billion, total deposits of $68.1 billion and stockholders'
equity of $7.1 billion.
Fleet is engaged in a general commercial banking and trust business
throughout the states of Connecticut, Massachusetts, New Jersey, New York, Rhode
Island, Maine, New Hampshire and Florida through its six banking subsidiaries,
and also provides, through its nonbanking subsidiaries and its credit card
banking subsidiary, a variety of financial services, including mortgage banking,
asset-based lending, consumer finance, real estate financing, securities
brokerage services, investment banking, investment advice and management, data
processing and student loan servicing.
The principal office of Fleet is located at One Federal Street, Boston,
Massachusetts 02110, telephone number (617) 292-2000.
HOLDING COMPANY
Fleet is a legal entity separate and distinct from its subsidiaries. The
ability of holders of debt and equity securities of Fleet, including the holders
of the securities offered hereby, to benefit from the distribution of assets of
any subsidiary upon the liquidation or reorganization of such subsidiary is
subordinate to prior claims of creditors of the subsidiary (including depositors
in the case of banking subsidiaries) except to the extent that a claim of Fleet
as a creditor may be recognized.
There are various statutory and regulatory limitations on the extent to
which banking subsidiaries of Fleet can finance or otherwise transfer funds to
Fleet or its nonbanking subsidiaries, whether in the form of loans, extensions
of credit, investments or asset purchases. Such transfers by any subsidiary bank
to Fleet or any nonbanking subsidiary are limited in amount to 10% of the bank's
capital and surplus and, with respect to Fleet and all such nonbanking
subsidiaries, to an aggregate of 20% of each such bank's capital and surplus.
Furthermore, loans and extensions of credit are required to be secured in
specified amounts and are required to be on terms and conditions with safe and
sound banking practices.
In addition, there are regulatory limitations on the payment of dividends
directly or indirectly to Fleet from its banking subsidiaries. Under applicable
banking statutes, at June 30, 1996, Fleet's banking subsidiaries could have
declared additional dividends of approximately $275 million. Federal and state
regulatory agencies also have the authority to limit further Fleet's banking
subsidiaries' payment of dividends based on other factors, such as the
maintenance of adequate capital for such subsidiary bank.
Under the policy of the Federal Reserve Board, Fleet is expected to act as a
source of financial strength to each subsidiary bank and to commit resources to
support such subsidiary bank in circumstances where it might not do so absent
such policy. In addition, any subordinated loans by Fleet to any of the
subsidiary banks would also be subordinate in right of payment to deposits and
obligations to general creditors of such subsidiary bank. Further, the Crime
Control Act of 1990 amended the federal bankruptcy laws to provide that in the
event of the bankruptcy of Fleet, any commitment by Fleet to its regulators to
maintain the capital of a banking subsidiary would be assumed by the bankruptcy
trustee and entitled to a priority of payment.
S-8
<PAGE>
FLEET CAPITAL
Fleet Capital is a statutory business trust formed under Delaware law
pursuant to (i) a declaration of trust, dated as of November 4, 1996, executed
by Fleet, as sponsor (the "Sponsor"), and the trustees of Fleet Capital (the
"Fleet Capital Trustees") and (ii) the filing of a certificate of trust with the
Secretary of State of the State of Delaware on November 4, 1996. Such
declaration will be amended and restated in its entirety (as so amended and
restated, the "Declaration") substantially in the form filed as an exhibit to
the Registration Statement of which this Prospectus Supplement and the
accompanying Prospectus form a part. The Declaration will be qualified as an
indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). Upon issuance of the Preferred Securities, the purchasers
thereof will own all of the Preferred Securities. See "Description of the
Preferred Securities--Book-Entry Only Issuance--The Depository Trust Company."
Fleet will directly or indirectly acquire Common Securities in an aggregate
liquidation amount equal to at least 3 percent of the total capital of Fleet
Capital. Fleet Capital exists for the exclusive purposes of (i) issuing the
Trust Securities representing undivided beneficial interests in the assets of
Fleet Capital, (ii) investing the gross proceeds of the Trust Securities in the
Junior Subordinated Debentures and (iii) engaging in only those other activities
necessary or incidental thereto.
Pursuant to the Declaration, the number of Fleet Capital Trustees will
initially be five. Three of the Fleet Capital Trustees (the "Regular Trustees")
will be persons who are employees or officers of, or who are affiliated with,
Fleet. The fourth trustee will be a financial institution that is unaffiliated
with Fleet, which trustee will serve as institutional trustee under the
Declaration and as indenture trustee for the purposes of compliance with the
provisions of the Trust Indenture Act (the "Institutional Trustee"). Initially,
The First National Bank of Chicago will be the Institutional Trustee until
removed or replaced by the holder of the Common Securities. For purposes of
compliance with the provisions of the Trust Indenture Act, The First National
Bank of Chicago will act as trustee (the "Guarantee Trustee") under the
Guarantee and as Debt Trustee (as defined herein) under the Indenture (as
defined herein). The fifth trustee will be an entity that maintains its
principal place of business in the state of Delaware (the "Delaware Trustee").
Initially, First Chicago Delaware Inc., an affiliate of the Institutional
Trustee, will act as Delaware Trustee. See "Description of the Preferred
Securities Guarantees" in the accompanying Prospectus and "Description of the
Preferred Securities--Voting Rights" herein.
The Institutional Trustee will hold title to the Junior Subordinated
Debentures for the benefit of the holders of the Trust Securities and will have
the power to exercise all rights, powers and privileges under the Indenture as
the holder of the Junior Subordinated Debentures. In addition, the Institutional
Trustee will maintain exclusive control of a segregated non-interest bearing
bank account (the "Property Account") to hold all payments made in respect of
the Junior Subordinated Debentures for the benefit of the holders of the Trust
Securities. The Institutional Trustee will make payments of distributions and
payments on liquidation, redemption and otherwise to the holders of the Trust
Securities out of funds from the Property Account. The Guarantee Trustee will
hold the Guarantee for the benefit of the holders of the Preferred Securities.
Fleet, as the direct or indirect holder of all the Common Securities, will have
the right to appoint, remove or replace any Fleet Capital Trustee and to
increase or decrease the number of Fleet Capital Trustees. Fleet will pay all
fees and expenses related to Fleet Capital and the offering of the Trust
Securities. See "Description of the Junior Subordinated
Debentures--Miscellaneous."
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Delaware Business Trust Act (the "Trust Act") and the Trust
Indenture Act. See "Description of the Preferred Securities."
S-9
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
FLEET FINANCIAL GROUP, INC.
The following unaudited consolidated summary sets forth selected financial
data for Fleet and its subsidiaries for the six months ended June 30, 1996 and
1995 and for each of the years in the five-year period ending December 31, 1995.
The following summary should be read in conjunction with the financial
information incorporated herein by reference to other documents. See
"Incorporation of Certain Documents by Reference". The summary for the six
months ended June 30, 1996 and 1995 is based on unaudited financial statements
which include all adjustments that, in the opinion of management of Fleet, are
necessary for a fair presentation of the results of the respective interim
periods. The results of operations for the six months ended June 30, 1996 are
not necessarily indicative of the results expected for 1996 or any other interim
period. All per share information shown below has been adjusted to reflect stock
splits and stock dividends as applicable.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1996 1995 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ----------
<CAPTION>
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated Summary of
Operations:
Interest income (fully taxable
equivalent)................... $2,830 $3,012 $6,069 $5,260 $5,086 $5,318 $5,425
Interest expense................ 1,235 1,466 3,005 2,161 1,917 2,337 3,142
Net interest income............. 1,595 1,546 3,064 3,099 3,169 2,981 2,283
Provision for credit losses..... 84 48 101 65 327 728 995
Net interest income after
provision for credit losses... 1,511 1,498 2,963 3,034 2,842 2,253 1,288
Noninterest income.............. 1,069 880 1,850 1,555 1,883 1,897 1,627
Noninterest expense............. 1,643 1,563 3,735 3,145 3,579 3,479 2,864
Net income (loss)............... 542 480 610(a) 849 817(b) 366(b) (76)
Earnings (loss) per common share:
Fully diluted................... $1.89 $1.73 $1.57(a) $3.09 $3.03(b) $1.40(b) $(0.44)
Weighted average fully diluted
shares outstanding............ 269,275,176 266,757,158 265,886,363 264,828,469 257,373,073 237,116,784 204,024,214
Book value per common share..... $23.25 $23.96 $22.71 $20.68 $21.76 $17.65 $16.81
Cash dividends declared per
common share.................. 0.86 0.80 1.63 1.40 1.025 0.825 0.80
Common dividends declared as a
percentage of earnings per
share......................... 45.5% 46.2% 103.8% 45.3% 33.8% 58.9% --(g)
Ratio of Earnings to Fixed
Charges:
Excluding interest on
deposits...................... 3.14x 2.18x 1.78x 2.33x 2.36x 1.90x --(e)
Including interest on
deposits...................... 1.73 1.53 1.34 1.62 1.56 1.26 --(e)
Ratio of Earnings to Fixed Charges
and Dividends on Preferred Stock:
Excluding interest on
deposits...................... 2.90 2.13 1.74 2.27 2.27 1.82 --(f)
Including interest on
deposits...................... 1.70 1.52 1.33 1.61 1.54 1.25 --(f)
Consolidated Balance Sheet--
Average Balances:
Total Assets.................... $79,903 $81,827 $82,727 $79,561 $75,286 $71,633 $65,099
Securities held to
maturity(c)................... 861 8,721 7,736 8,787 7,735 4,300 12,358
Securities available for
sale(c)....................... 10,944 12,922 12,779 16,923 14,140 14,061 1,597
Loans and leases, net of
unearned income............... 52,716 49,935 51,043 44,102 43,283 43,029 40,986
Interest-bearing deposits....... 44,331 42,536 43,120 40,113 39,766 42,031 40,867
Short-term borrowings........... 7,500 14,114 14,046 15,355 12,807 8,848 6,520
Long-term debt/subordinated
notes and debentures.......... 5,976 6,498 6,581 5,383 5,039 4,116 3,947
Dual Convertible Preferred
Stock......................... -- -- -- -- -- 283 134
Stockholders' Equity............ 6,791 6,320 6,545 5,782 5,311 4,118 3,596
Consolidated Ratios:
Net interest margin (fully
taxable equivalent)........... 4.60% 4.21% 4.12% 4.30% 4.63% 4.57% 3.85%
Return (loss) on average
assets........................ 1.36 1.18 0.74(a) 1.07 1.09(b) 0.51(b) (0.12)
Return (loss) on average common
stockholders' equity.......... 17.09(d) 16.47(d) 9.32(a (d) 15.66(d) 17.11(b) 9.12(b) (2.73)
Average stockholders' equity to
average assets................ 8.50 7.72 7.91 7.27 7.05 6.14 5.52
Tier 1 risk-based capital
ratio......................... 6.85 8.22 7.62 9.14 10.44 9.89 7.38
Total risk-based capital
ratio......................... 10.61% 12.01% 11.29% 12.92% 14.89% 14.61% 11.27%
</TABLE>
S-10
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------------- ----------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Period-end reserve for credit
losses to period-end loans and
leases, net of unearned
income........................ 2.70% 2.85% 2.56% 3.25% 3.82% 4.43% 4.73%
Net charge-offs to average loans
and leases, net of unearned
income........................ 0.51 0.54 0.59 0.54 1.35 2.15 2.02
Period-end nonperforming assets
to period-end loans and
leases, net of unearned
income, and other real estate
owned 1.26(h) 1.47 0.97(h) 1.65 2.35 4.53 7.05
</TABLE>
- ------------------------
(a) Includes impact of the loss on assets held for sale or accelerated
disposition ($175 million pretax) and merger-related charges ($490 million
pretax) recorded in 1995. Excluding these special charges, return on average
common stockholders' equity and return on average assets would have been
16.29% and 1.26%, respectively, while net income and earnings per share
would have been $1,039 million and $3.77, respectively.
(b) Includes impact of cumulative effect of change in accounting method of $53
million in 1993 and extraordinary credit of $18 million in 1992.
(c) For a discussion of Fleet's reclassification in 1992 of its "securities held
to maturity" to "securities held for sale", see Fleet's Current Report on
Form 8-K dated October 21, 1992. Effective January 1, 1994, Fleet adopted
FASB Statement No. 115, "Accounting for Certain Investments in Debt and
Equity Securities." The standard requires that securities available for sale
be reported at fair value, with unrealized gains or losses reflected as a
separate component of stockholders' equity. In connection with the adoption
of FASB Statement No. 115, Fleet transferred securities netting to $345
million from the held to maturity portfolio to the available for sale
portfolio. During the fourth quarter of 1995, Fleet reclassified
substantially all of its securities held to maturity to securities available
for sale as the FASB permitted a one-time opportunity for institutions to
reassess the appropriateness of the designations of all securities.
(d) Fleet's return on average common stockholders' equity includes the average
unrealized gains and losses on securities available for sale. Excluding the
impact of FASB Statement No. 115, Fleet's return on average common
stockholders' equity would have been 17.08%, 16.11%, 9.25% and 15.35%,
respectively, for the six months ended June 30, 1996 and 1995 and the years
ended December 31, 1995 and 1994.
(e) Fixed charges exceeded earnings by $16 million for both the ratio excluding
and including interest on deposits.
(f) The sum of fixed charges and dividends exceeded earnings by $16 million for
both the ratio excluding and including interest on deposits.
(g) For the year ended December 31, 1991, Fleet reported a $76 million net loss
and therefore the ratio is not applicable.
(h) Excludes $365 million and $317 million of nonperforming assets reclassified
to held for sale or accelerated disposition at June 30, 1996 and December
31, 1995, respectively. Including the $365 million and $317 million, the
ratios would have been 1.88% and 1.58% at June 30, 1996 and December 31,
1995, respectively.
S-11
<PAGE>
RECENT DEVELOPMENTS
THIRD QUARTER RESULTS
Fleet reported net income of $295 million for the third quarter of 1996, or
$1.02 per common share, an increase of 10%, compared to $268 million, or $0.96
per common share, earned in the third quarter of 1995. Return on average assets
and return on average common equity for the third quarter of 1996 were 1.35% and
17.83%, respectively, as compared to 1.27% and 16.86%, respectively, for the
third quarter of 1995. Earnings for the first nine months of 1996 were $836
million, or $2.91 per common share, an increase of 12%, compared to $748
million, or $2.69 per common share, for the first nine months of 1995.
Net interest income totaled $934 million during the third quarter of 1996,
an increase of $70 million from the second quarter of 1996 and $162 million from
the third quarter of 1995. The increase in net interest income is primarily
attributable to the inclusion of the NatWest franchise as a result of the
acquisition of National Westminster Bancorp, Inc. ("NatWest") in May 1996 (the
"NatWest Acquisition"), as well as an increase of 25 basis points in net
interest margin to 5.01%, as compared to 4.76% for the second quarter of 1996,
reflecting the NatWest Acquisition, which added higher yielding loans and lower
cost core deposits.
The provision for credit lossses in the third quarter of 1996 was $65
million, compared to $48 million in the second quarter of 1996 and $27 million
for the third quarter of 1995. The increase in the provision is primarily
attributable to an increase in charge-offs as a result of the additional loans
from NatWest, coupled with increased charge-offs in the credit card portfolio.
Net charge-offs for the third quarter of 1996 were $110 million, compared to $71
million for the third quarter of 1995. Nonperforming assets increased by $14
million in the third quarter of 1996 to $759 million from $745 million in the
second quarter of 1996. The reserve for loan losses was $1.5 billion, $1.6
billion and $1.4 billion at September 30, 1996, June 30, 1996 and September 30,
1995, respectively. The reserve for loan losses represented 2.6%, 2.7% and 2.8%
of loans at September 30, 1996, June 30, 1996 and September 30, 1995,
respectively.
Noninterest income in the third quarter of 1996 totaled $555 million, an
increase of $107 million, or 24%, over the third quarter of 1995. This increase
in noninterest income is primarily attributable to a $76 million contribution
from NatWest and a 7% revenue increase in Fleet's business lines. Revenues
during the third quarter of 1996 at Fleet Private Equity, Fleet's venture
capital business, increased $28 million to $41 million as compared to the same
period of the prior year due to increasing values in equity capital investments
managed. Investment management revenue increased by $13 million, or 16%, from
the third quarter of 1995 to the third quarter of 1996 due to growth in the
levels of managed assets fueled by the strong equity market. Student loan
servicing revenue during the third quarter of 1996 increased $6 million, or 37%,
compared to the prior year, due to an increase in the volume of loans serviced
as a result of the extension of Fleet's direct loan servicing contracts with the
federal government.
Noninterest expense in the third quarter of 1996 totaled $911 million,
including $189 million related to the NatWest Acquisiton, compared to $747
million during the third quarter of 1995. Excluding the incremental impact of
the NatWest Acquisition, noninterest expense declined $39 million from the
second quarter of 1996, a reduction of $160 million on an annualized basis. This
decrease was primarily the result of cost savings associated with the
acquisition of Shawmut National Corporation in November 1995.
Total assets at September 30, 1996 were $87.2 billion, substantially
equivalent to the $87.7 billion at September 30, 1995. Total loans increased 7%
on an annualized basis, to $60.1 billion at September 30, 1996, as a result of
growth in the commercial, real estate and credit card portfolios during the
quarter. Stockholder's equity amounted to $7.27 billion at September 30, 1996,
an increase of $141 million from June 30, 1996. Additionally, during the third
quarter Fleet redeemed its 10.12% Series III preferred stock, which resulted in
a one-time charge to earnings per share of $.01, and replaced it with Series
VIII preferred stock at an initial rate of 6.59%. Common equity to assets and
tangible common equity to tangible assets were 7.19% and 5.30%, respectively, at
September 30, 1996.
S-12
<PAGE>
CAPITALIZATION
The following table sets forth the actual capitalization of Fleet at June
30, 1996, and Fleet's capitalization as of such date as adjusted to reflect the
application of the estimated net proceeds from the sale of the Preferred
Securities. See "Use of Proceeds." The table should be read in conjunction with
Fleet's consolidated financial statements and notes thereto included in the
documents incorporated by reference herein. See "Incorporation of Certain
Documents by Reference" in the accompanying Prospectus.
<TABLE>
<CAPTION>
ACTUAL AS ADJUSTED
---------- -----------
<S> <C> <C>
AT JUNE 30, 1996
-----------------------
<CAPTION>
(DOLLARS IN MILLIONS)
<S> <C> <C>
Long-Term Debt........................................................................... 5,303 5,303
Company-Obligated Mandatorily Redeemable Preferred Securities of Fleet Capital Trust I
(1)..................................................................................... --
STOCKHOLDERS' EQUITY
Preferred stock.......................................................................... 1,003
Common Stock at $.01 par value........................................................... 3 3
Common surplus........................................................................... 3,142 3,142
Retained Earnings........................................................................ 3,023 3,023
Net unrealized gain (loss) on securities................................................. (44) (44)
Total stockholders' equity............................................................... 7,127
Total.................................................................................... 12,430 12,430
</TABLE>
- ------------------------
(1) As described herein, the sole assets of Fleet Capital will be the Junior
Subordinated Debentures with a principal amount of approximately $ .
Upon redemption of the Junior Subordinated Debentures, the Preferred
Securities will be mandatorily redeemable.
S-13
<PAGE>
ACCOUNTING TREATMENT
The financial statements of Fleet Capital will be consolidated into Fleet's
consolidated financial statements, with the Preferred Securities treated as
minority interest and shown in Fleet's balance sheet as "Company-Obligated
Mandatorily Redeemable Preferred Securities of Fleet Capital Trust I." The
financial statement footnotes of Fleet will reflect that the sole asset of Fleet
Capital will be the Junior Subordinated Debentures. See "Capitalization."
USE OF PROCEEDS
Fleet Capital will use all proceeds received from the sale of the Preferred
Securities to purchase Junior Subordinated Debentures from Fleet. Fleet intends
to use the net proceeds from the sale of the Junior Subordinated Debentures to
retire outstanding preferred stock. Fleet intends to use any net proceeds from
the sale of the Junior Subordinated Debentures not used for such purpose for
general corporate purposes, principally to extend credit to, or fund investments
in, its subsidiaries. The precise amounts and timing of extensions of credit to,
and investments in, such subsidiaries will depend upon the subsidiaries' funding
requirements and the availability of other funds. Pending such applications, the
net proceeds may be temporarily invested in marketable securities or applied to
the reduction of Fleet's short-term indebtedness. Based upon the historic and
anticipated future growth of Fleet and the financial needs of its subsidiaries,
Fleet may engage in additional financings of a character and amount to be
determined as the need arises.
S-14
<PAGE>
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Institutional Trustee, The First National Bank of Chicago,
will act as indenture trustee for the Preferred Securities under the Declaration
for purposes of compliance with the provisions of the Trust Indenture Act. The
terms of the Preferred Securities will include those stated in the Declaration
and those made part of the Declaration by the Trust Indenture Act. The following
summary of the material terms and provisions of the Preferred Securities, which
supplements, and to the extent inconsistent, replaces, the description set forth
under the caption "Description of the Preferred Securities" in the accompanying
Prospectus, does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the Declaration, a copy of which is filed as an
exhibit to the Registration Statement of which this Prospectus Supplement is a
part, the Trust Act and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Regular Trustees to issue on behalf of Fleet
Capital the Trust Securities, which represent undivided beneficial interests in
the assets of Fleet Capital. All of the Common Securities will be owned,
directly or indirectly, by Fleet. The Common Securities rank pari passu, and
payments will be made thereon on a pro rata basis, with the Preferred
Securities, except that upon the occurrence and during the continuance of a
Declaration Event of Default, the rights of the holders of the Common Securities
to receive payment of periodic distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Preferred Securities. The Declaration does not permit the issuance by Fleet
Capital of any securities other than the Trust Securities or the incurrence of
any indebtedness by Fleet Capital. Pursuant to the Declaration, the
Institutional Trustee will own the Junior Subordinated Debentures purchased by
Fleet Capital for the benefit of the holders of the Trust Securities. The
payment of distributions out of money held by Fleet Capital, and payments upon
redemption of the Preferred Securities or liquidation of Fleet Capital, are
guaranteed by Fleet to the extent described under "Description of the Preferred
Securities Guarantees" in the accompanying Prospectus. The Guarantee will be
held by The First National Bank of Chicago, the Guarantee Trustee, for the
benefit of the holders of the Preferred Securities. The Guarantee does not cover
payment of distributions when Fleet Capital does not have sufficient available
funds to pay such distributions. In such event, the remedy of a holder of
Preferred Securities is to vote to direct the Institutional Trustee to enforce
the Institutional Trustee's rights under the Junior Subordinated Debentures
except in the limited circumstances in which the holder may take Direct Action.
See "Voting Rights" and "Declaration Events of Default."
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per annum
of % of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears for more than one quarter will bear interest thereon at
such rate compounded quarterly. The term "distribution" as used herein includes
any such interest payable unless otherwise stated. The amount of distributions
payable for any period will be computed on the basis of a 360-day year of twelve
30-day months.
Distributions on the Preferred Securities will be cumulative, will accrue
from , and, except as otherwise described below, will be payable quarterly
in arrears on March 31, June 30, September 30 and December 31 of each year,
commencing , when, as and if available for payment.
Fleet has the right under the Indenture to defer payments of interest on the
Junior Subordinated Debentures by extending the interest payment period from
time to time on the Junior Subordinated Debentures, which, if exercised, would
defer quarterly distributions on the Preferred Securities (though such
distributions would continue to accrue with interest since interest would
continue to accrue on the
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Junior Subordinated Debentures) during any such Extension Period. Such right to
extend the interest payment period for the Junior Subordinated Debentures is
limited to a period not exceeding 20 consecutive quarters and such period may
not extend beyond the maturity of the Junior Subordinated Debentures. In the
event that Fleet exercises this right, then (a) Fleet shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
(other than (i) purchases or acquisitions of shares of Fleet Common Stock in
connection with the satisfaction by Fleet of its obligations under any employee
benefit plans or any other contractual obligation of Fleet (other than a
contractual obligation ranking pari passu with or junior to the Junior
Subordinated Debentures), (ii) as a result of a reclassification of Fleet
capital stock or the exchange or conversion of one class or series of Fleet's
capital stock for another class or series of Fleet capital stock or (iii) the
purchase of fractional interests in shares of Fleet's capital stock pursuant to
the conversion or exchange provisions of such Fleet capital stock or the
security being converted or exchanged), (b) Fleet shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by Fleet that rank pari passu with or junior to such
Junior Subordinated Debentures and (c) Fleet shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Guarantee).
Prior to the termination of any such Extension Period, Fleet may further extend
the interest payment period; provided, that such Extension Period, together with
all such previous and further extensions thereof, may not exceed 20 consecutive
quarters or extend beyond the maturity of the Junior Subordinated Debentures.
Upon the termination of any Extension Period and the payment of all amounts then
due, Fleet may select a new Extension Period, subject to the above requirements.
See "Description of the Junior Subordinated Debentures--Interest" and "--Option
to Extend Interest Payment Period." If distributions are deferred, the deferred
distributions and accrued interest thereon shall be paid to holders of record of
the Preferred Securities as they appear on the books and records of the Trust on
the record date next following the termination of such Extension Period.
Distributions on the Preferred Securities must be paid on the dates payable
to the extent that Fleet Capital has funds available for the payment of such
distributions in the Property Account. Fleet Capital's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received from Fleet on the Junior Subordinated Debentures. See
"Description of the Junior Subordinated Debentures." The payment of
distributions out of moneys held by Fleet Capital is guaranteed by Fleet to the
extent set forth under "Description of the Preferred Securities Guarantees" in
the accompanying Prospectus.
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the books and records of Fleet Capital on the relevant
record dates, which, as long as the Preferred Securities remain in book-entry
only form, will be one Business Day (as defined below) prior to the relevant
payment dates. Such distributions will be paid through the Institutional Trustee
who will hold amounts received in respect of the Junior Subordinated Debentures
in the Property Account for the benefit of the holders of the Trust Securities.
Subject to any applicable laws and regulations and the provisions of the
Declaration, each such payment will be made as described under "Book-Entry Only
Issuance--The Depository Trust Company" below. In the event that the Preferred
Securities do not continue to remain in book-entry only form, the record dates
for payment of distributions will be March 15, June 15, September 15 and
December 15. In the event that any date on which distributions are to be made on
the Preferred Securities is not a Business Day, then payment of the
distributions payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such record date.
A "Business Day" shall mean any day other than Saturday, Sunday or any other day
on which banking institutions in New York City (in the State of New York) are
permitted or required by any applicable law to close.
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MANDATORY REDEMPTION
The Junior Subordinated Debentures will mature on , 2026, which
date may be shortened or extended as provided herein. Moreover, the Junior
Subordinated Debentures are redeemable, in whole or in part, at any time on or
after , 2001, or in whole but not in part, prior to , 2001, upon the
occurrence of a Tax Event. See "Description of the Junior Subordinated
Debentures." Upon the repayment of the Junior Subordinated Debentures, whether
at maturity or upon redemption, the proceeds from such repayment or payment
shall simultaneously be applied to redeem Trust Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Junior
Subordinated Debentures so repaid or redeemed at the Redemption Price; provided,
that holders of Trust Securities shall be given not less than 30 nor more than
60 days' notice of such redemption. See "Description of the Junior Subordinated
Debentures--Optional Redemption." In the event that fewer than all of the
outstanding Preferred Securities are to be redeemed, the Preferred Securities
will be redeemed pro rata as described under "Book-Entry Only Issuance--The
Depository Trust Company" below. Any such distribution or redemption may require
prior approval of the Federal Reserve Board if such approval is then required
under applicable law, rules, guidelines or policies.
TAX EVENT REDEMPTION
If, at any time, a Tax Event (as defined below) shall occur and be
continuing, Fleet shall have the right, upon not less than 30 and no more than
60 days notice, to redeem the Junior Subordinated Debentures, in whole (but not
in part), for cash within 90 days following the occurrence of such Tax Event.
Following such redemption, all Trust Securities shall be redeemed by Fleet
Capital at 100% of the liquidation amount thereof plus accrued and unpaid
distributions through the redemption date.
"Tax Event" means that the Regular Trustees shall have received an opinion
of nationally recognized independent tax counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws or any regulations thereunder of the
United States or any political subdivision or taxing authority thereof or
therein or (b) any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement or decision is announced on or after the date of
original issuance of the Preferred Securities, there is more than an
insubstantial risk that interest payable on the Junior Subordinated Debentures
is not, or within 90 days of the date thereof will not be, deductible, in whole
or in part, by Fleet for United States federal income tax purposes.
DISTRIBUTION OF THE JUNIOR SUBORDINATED DEBENTURES
Fleet will have the right at any time to liquidate Fleet Capital and cause
the Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities, subject to the prior approval of the Federal Reserve Board if such
approval is then required under applicable law, rules, guidelines or policies.
If the Junior Subordinated Debentures are distributed to the holders of the
Preferred Securities, Fleet will use its best efforts to cause the Junior
Subordinated Debentures to be listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities are then listed.
After the date for any distribution of Junior Subordinated Debentures upon
dissolution of Fleet Capital, (i) the Preferred Securities will no longer be
deemed to be outstanding, (ii) the Depositary (as defined herein) or its
nominee, as the record holder of the Preferred Securities, will receive a
registered global certificate or certificates representing the Junior
Subordinated Debentures to be delivered upon such distribution, and (iii) any
certificates representing Preferred Securities not held by the Depositary or its
nominee will be deemed to represent Junior Subordinated Debentures having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the distribution rate of, and accrued and
unpaid interest equal to accrued and unpaid distributions on, such Preferred
Securities until such certificates are presented to Fleet or its agent for
transfer or reissuance.
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There can be no assurance as to the market prices for either the Preferred
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for the Preferred Securities if a dissolution and liquidation of Fleet
Capital were to occur. Accordingly, the Preferred Securities or the Junior
Subordinated Debentures may trade at a discount to the price that the investor
paid to purchase the Preferred Securities offered hereby.
REDEMPTION PROCEDURES
Fleet Capital may not redeem fewer than all of the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If Fleet Capital gives a notice of redemption in respect of Preferred
Securities (which notice will be irrevocable), then, by 12:00 noon, New York
City time, on the redemption date, provided that Fleet has paid to the
Institutional Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Junior Subordinated Debentures, Fleet Capital will
irrevocably deposit with the Depositary funds sufficient to pay the applicable
Redemption Price and will give the Depositary irrevocable instructions and
authority to pay the Redemption Price to the holders of the Preferred
Securities. See "Book-Entry Only Issuance--The Depository Trust Company." If
notice of redemption shall have been given and funds deposited as required,
then, immediately prior to the close of business on the date of such deposit,
distributions will cease to accrue and all rights of holders of such Preferred
Securities so called for redemption will cease, except the right of the holders
of such Preferred Securities to receive the Redemption Price but without
interest on such Redemption Price. In the event that any date fixed for
redemption of Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (without any interest or other payment in respect of any
such delay), except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day. In the
event that payment of the Redemption Price in respect of Preferred Securities is
improperly withheld or refused and not paid either by Fleet Capital, or by Fleet
pursuant to the Guarantee, distributions on such Preferred Securities will
continue to accrue at the then applicable rate from the original redemption date
to the date of payment, in which case the actual payment date will be considered
the date fixed for redemption for purposes of calculating the Redemption Price.
In the event that fewer than all of the outstanding Preferred Securities are
to be redeemed, the Preferred Securities will be redeemed pro rata as described
below under "Book-Entry Only Issuance--The Depository Trust Company."
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws and the regulations of the Federal Reserve
Board), Fleet or its subsidiaries may at any time, and from time to time,
purchase outstanding Preferred Securities by tender, in the open market or by
private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of Fleet Capital (each a "Liquidation"), the then
holders of the Preferred Securities will be entitled to receive out of the
assets of Fleet Capital, after satisfaction of liabilities to creditors,
distributions in an amount equal to the aggregate of the stated liquidation
amount of $25 per Preferred Security plus accrued and unpaid distributions
thereon to the date of payment (the "Liquidation Distribution"), unless, in
connection with such Liquidation, Junior Subordinated Debentures in an aggregate
stated principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the distribution rate of, and accrued and
unpaid interest equal to accrued and unpaid distributions on, the Preferred
Securities have been distributed on a pro rata basis to the holders of the
Preferred Securities.
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If, upon any such Liquidation, the Liquidation Distribution can be paid only
in part because Fleet Capital has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by
Fleet Capital on the Preferred Securities shall be paid on a pro rata basis. The
holders of the Common Securities will be entitled to receive distributions upon
any such dissolution pro rata with the holders of the Preferred Securities,
except that if a Declaration Event of Default has occurred and is continuing,
the Preferred Securities shall have a preference over the Common Securities with
regard to such distributions.
Pursuant to the Declaration, Fleet Capital shall terminate (i) on
, 2050, the expiration of the term of Fleet Capital, (ii) upon the
bankruptcy of Fleet, (iii) upon the filing of a certificate of dissolution or
its equivalent with respect to Fleet, the filing of a certificate of
cancellation with respect to Fleet Capital after obtaining the consent of the
holders of at least a majority in liquidation amount of the Trust Securities
affected thereby, voting together as a single class to file such certificate of
cancellation, or the revocation of the charter of Fleet and the expiration of 90
days after the date of revocation without a reinstatement thereof, (iv) upon the
distribution of Junior Subordinated Debentures to the holders of the Preferred
Securities, (v) upon the entry of a decree of a judicial dissolution of Fleet or
Fleet Capital, or (vi) upon the redemption of all the Trust Securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Indenture Event of Default")
constitutes an event of default under the Declaration with respect to the Trust
Securities (a "Declaration Event of Default"); provided, that pursuant to the
Declaration, the holder of the Common Securities will be deemed to have waived
any Declaration Event of Default with respect to the Common Securities until all
Declaration Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated. Until such Declaration Events of Default
with respect to the Preferred Securities have been so cured, waived or otherwise
eliminated, the Institutional Trustee will be deemed to be acting solely on
behalf of the holders of the Preferred Securities and only the holders of the
Preferred Securities will have the right to direct the Institutional Trustee
with respect to certain matters under the Declaration, and therefore the
Indenture. If the Institutional Trustee fails to enforce its rights under the
Junior Subordinated Debentures after a holder of Preferred Securities has made a
written request, such holder of record of Preferred Securities may institute a
legal proceeding against Fleet to enforce the Institutional Trustee's rights
under the Junior Subordinated Debentures without first instituting any legal
proceeding against the Institutional Trustee or any other person or entity.
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing and such event is attributable to the failure of Fleet to pay
interest or principal on the Junior Subordinated Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption, the
redemption date), then a holder of Preferred Securities may institute a Direct
Action for enforcement of payment to such holder directly of the principal of,
or interest on, Junior Subordinated Debentures having a principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such holder
on or after the respective due date specified in the Junior Subordinated
Debentures. In connection with such Direct Action, Fleet will be subrogated to
the rights of such holder of Preferred Securities under the Declaration to the
extent of any payment made by Fleet to such holder of Preferred Securities in
such Direct Action. The holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Junior
Subordinated Debentures.
Upon the occurrence of a Declaration Event of Default, the Institutional
Trustee as the sole holder of the Junior Subordinated Debentures will have the
right under the Indenture to declare the principal of and interest on the Junior
Subordinated Debentures to be immediately due and payable. Fleet and Fleet
Capital are each required to file annually with the Institutional Trustee an
officer's certificate as to its compliance with all conditions and covenants
under the Declaration.
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VOTING RIGHTS
Except as described herein, under the Trust Act, the Trust Indenture Act and
under "Description of the Preferred Securities Guarantees--Modification of the
Preferred Securities Guarantees; Assignment" in the accompanying Prospectus, and
as otherwise required by law and the Declaration, the holders of the Preferred
Securities will have no voting rights.
Subject to the requirement of the Institutional Trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of this
paragraph, the holders of a majority in aggregate liquidation amount of the
Preferred Securities, have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Institutional Trustee,
or direct the exercise of any trust or power conferred upon the Institutional
Trustee under the Declaration including the right to direct the Institutional
Trustee, as holder of the Junior Subordinated Debentures, to (i) exercise the
remedies available to it under the Indenture as a holder of the Junior
Subordinated Debentures, (ii) waive any past Indenture Event of Default that is
waivable under the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Junior Subordinated Debentures shall
be due and payable or (iv) consent to any amendment, modification or termination
of the Indenture or the Junior Subordinated Debentures where such consent shall
be required; provided, however, that, where a consent or action under the
Indenture would require the consent or act of holders of more than a majority in
principal amount of the Junior Subordinated Debentures (a "Super-Majority")
affected thereby, only the holders of at least such Super-Majority in aggregate
liquidation amount of the Preferred Securities may direct the Institutional
Trustee to give such consent or take such action. If the Institutional Trustee
fails to enforce its rights under the Junior Subordinated Debentures after a
holder of record of Preferred Securities has made a written request, such holder
of record of Preferred Securities may institute a legal proceeding directly
against Fleet to enforce the Institutional Trustee's rights under the Junior
Subordinated Debentures without first instituting any legal proceeding against
the Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of Fleet to pay interest or principal
on the Junior Subordinated Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
holder of Preferred Securities may institute a Direct Action for enforcement of
payment to such holder of the principal of, or interest on, the Junior
Subordinated Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such holder on or after the
respective due date specified in the Junior Subordinated Debentures. The
Institutional Trustee shall notify all holders of the Preferred Securities of
any notice of default received from the Debt Trustee with respect to the Junior
Subordinated Debentures. Such notice shall state that such Indenture Event of
Default also constitutes a Declaration Event of Default. Except with respect to
directing the time, method and place of conducting a proceeding for a remedy,
the Institutional Trustee shall not take any of the actions described in clauses
(i), (ii) or (iii) above unless the Institutional Trustee has obtained an
opinion of a nationally recognized tax counsel experienced in such matters to
the effect that, as a result of such action, Fleet Capital will not fail to be
classified as a grantor trust for United States federal income tax purposes.
In the event the consent of the Institutional Trustee, as the holder of the
Junior Subordinated Debentures, is required under the Indenture with respect to
any amendment, modification or termination of the Indenture, the Institutional
Trustee shall request the direction of the holders of the Trust Securities with
respect to such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by a majority
in liquidation amount of the Trust Securities voting together as a single class;
provided, however, that where a consent under the Indenture would require the
consent of a Super-Majority, the Institutional Trustee may only give such
consent at the direction of the holders of at least the proportion in
liquidation amount of the Trust Securities which the relevant Super-Majority
represents of the aggregate principal amount of the Junior Subordinated
Debentures outstanding. The Institutional Trustee shall not take any such action
in accordance with the directions of the holders of the Trust Securities unless
the Institutional Trustee has obtained an opinion of a
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nationally recognized tax counsel experienced in such matters to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities may be
given at a separate meeting of holders of Preferred Securities convened for such
purpose, at a meeting of all of the holders of Trust Securities or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Preferred Securities. Each such notice will
include a statement setting forth the following information: (i) the date of
such meeting or the date by which such action is to be taken; (ii) a description
of any resolution proposed for adoption at such meeting on which such holders
are entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the holders of Preferred Securities will be required for Fleet Capital to
redeem and cancel Preferred Securities or distribute Junior Subordinated
Debentures in accordance with the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned at such time by Fleet or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, Fleet, shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if such Preferred Securities
were not outstanding.
The procedures by which holders of Preferred Securities may exercise their
voting rights are described below. See "Book-Entry Only Issuance--The Depository
Trust Company" below.
Holders of the Preferred Securities will have no rights to appoint or remove
the Fleet Capital Trustees, who may be appointed, removed or replaced solely by
Fleet as the holder of all of the Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by the Regular
Trustees (and in certain circumstances the Institutional Trustee), provided
that, if any proposed amendment provides for, or the Regular Trustees otherwise
propose to effect, (i) any action that would adversely affect the powers,
preferences or special rights of the Trust Securities, whether by way of
amendment to the Declaration or otherwise or (ii) the dissolution, winding-up or
termination of Fleet Capital other than pursuant to the terms of the
Declaration, then the holders of the Trust Securities voting together as a
single class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of at
least a majority in liquidation amount of the Trust Securities affected thereby;
provided, that, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or the Common Securities,
then only the affected class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of a majority in liquidation amount of such class of Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause Fleet Capital
to be classified for purposes of United States federal income taxation as other
than a grantor trust, (ii) reduce or otherwise adversely affect the powers of
the Institutional Trustee or (iii) cause Fleet Capital to be deemed an
"investment company" which is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
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MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
Fleet Capital may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body, except as
described below. Fleet Capital may, with the consent of the Regular Trustees and
without the consent of the holders of the Trust Securities, the Institutional
Trustee or the Delaware Trustee, consolidate, amalgamate, merge with or into, or
be replaced by a trust organized as such under the laws of any State of the
United States; provided, that (i) if Fleet Capital is not the survivor, such
successor entity either (x) expressly assumes all of the obligations of Fleet
Capital under the Trust Securities or (y) substitutes for the Preferred
Securities other securities having substantially the same terms as the Trust
Securities (the "Successor Securities"), so long as the Successor Securities
rank the same as the Trust Securities rank with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) Fleet expressly
acknowledges a trustee of such successor entity possessing the same powers and
duties as the Institutional Trustee as the holder of the Junior Subordinated
Debentures, (iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with another organization on
which the Preferred Securities are then listed or quoted, (iv) such merger,
consolidation, amalgamation or replacement does not cause the Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation or replacement does not adversely affect the rights,
preferences and privileges of the holders of the Trust Securities (including any
Successor Securities) in any material respect (other than with respect to any
dilution of the holders' interest in the new entity), (vi) such successor entity
has a purpose identical to that of Fleet Capital, (vii) prior to such merger,
consolidation, amalgamation or replacement, Fleet has received an opinion of a
nationally recognized independent counsel to Fleet Capital experienced in such
matters to the effect that, (A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the holders of the Trust Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the holders'
interest in the new entity), and (B) following such merger, consolidation,
amalgamation or replacement, neither Fleet Capital nor such successor entity
will be required to register as an investment company under the 1940 Act and
(viii) Fleet guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee and the
Common Securities Guarantee (as described in the accompanying Prospectus).
Notwithstanding the foregoing, Fleet Capital shall not, except with the consent
of holders of 100 percent in liquidation amount of the Trust Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if such consolidation, amalgamation, merger or replacement would
cause Fleet Capital or the Successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes.
BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depositary (the
"Depositary") for the Preferred Securities. The Preferred Securities will be
issued only as fully-registered securities registered in the name of Cede & Co.
(DTC's nominee). One or more fully-registered global Preferred Securities
certificates, representing the total aggregate number of Preferred Securities,
will be issued and will be deposited with DTC.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in the global Preferred Securities
as represented by a global certificate.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a
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"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). DTC holds
securities that its participants ("Participants") deposit with DTC. DTC also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Participants in DTC
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of its
Participants and by the New York Stock Exchange, the American Stock Exchange,
Inc., and the National Association of Securities Dealers, Inc. Access to the DTC
system is also available to others, such as securities brokers and dealers,
banks and trust companies that clear transactions through, or maintain a direct
or indirect custodial relationship with, a Direct Participant either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Participants, which will receive a credit for the Preferred Securities
on DTC's records. The ownership interest of each actual purchaser of each
Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Participants' and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchases, but Beneficial Owners
are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the Direct
or Indirect Participants through which the Beneficial Owners purchased Preferred
Securities. Transfers of ownership interests in the Preferred Securities are to
be accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Preferred Securities, except in the event that
use of the book-entry system for the Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities. DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Certificate, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Preferred Securities represented thereby for all
purposes under the Declaration and the Preferred Securities. No beneficial owner
of an interest in a Global Certificate will be able to transfer that interest
except in accordance with DTC's applicable procedures, in addition to those
provided for under the Declaration.
DTC has advised Fleet that it will take any action permitted to be taken by
a holder of Preferred Securities (including the presentation of Preferred
Securities for exchange as described below) only at the direction of one or more
Participants to whose account the DTC interests in the Global Certificates are
credited and only in respect of such portion of the aggregate liquidation amount
of Preferred Securities as to which such Participant or Participants has or have
given such direction. However, if there is a Declaration Event of Default under
the Preferred Securities, DTC will exchange the Global Certificates for
Certificated Securities, which it will distribute to its Participants and which
will be legended as set forth under the heading "Notices to Investors."
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants, and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Redemption notices in respect of the Preferred Securities held in book-entry
form will be sent to Cede & Co. If less than all of the Preferred Securities are
being redeemed, DTC will determine the amount of the interest of each
Participant to be redeemed in accordance with its procedures.
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Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Trust as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Participants to whose accounts the Preferred Securities
are credited on the record date (identified in a listing attached to the Omnibus
Proxy).
Distributions on the Preferred Securities held in book-entry form will be
made to DTC in immediately available funds. DTC's practice is to credit
Participants' accounts on the relevant payment date in accordance with their
respective holdings shown on DTC's records unless DTC has reason to believe that
it will not receive payments on such payment date. Payments by Participants and
Indirect Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Participants and Indirect Participants and not of DTC, Fleet Capital or Fleet,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of distributions to DTC is the responsibility of Fleet
Capital, disbursement of such payments to Participants is the responsibility of
DTC, and disbursement of such payments to the Beneficial Owners is the
responsibility of Participants and Indirect Participants.
Except as provided herein, a Beneficial Owner of an interest in a Global
Certificate will not be entitled to receive physical delivery of Preferred
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Preferred Securities.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Certificates among Participants of DTC, DTC
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. Neither Fleet, Fleet Capital
nor the Trustee will have any responsibility for the performance by DTC or its
Participants or Indirect Participants under the rules and procedures governing
DTC. DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving notice to Fleet
Capital. Under such circumstances, in the event that a successor securities
depositary is not obtained, Preferred Security certificates are required to be
printed and delivered. Additionally, Fleet Capital (with the consent of Fleet)
may decide to discontinue use of the system of book-entry transfers through DTC
(or a successor depositary). In that event, certificates for the Preferred
Securities will be printed and delivered. In each of the above circumstances,
Fleet will appoint a paying agent with respect to the Preferred Securities.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in the global Preferred Securities
as represented by a Global Certificate.
PAYMENT
Payments in respect of the Preferred Securities represented by the Global
Certificates shall be made to DTC, which shall credit the relevant accounts at
DTC on the applicable distribution dates or, in the case of Certificated
Securities, such payments shall be made by check mailed to the address of the
holder entitled thereto as such address shall appear on the Register.
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
Fleet National Bank will act as registrar, transfer agent and paying agent
for the Preferred Securities. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Regular Trustees. In the event
that Fleet National Bank shall no longer be the Paying Agent, the Regular
Trustees shall appoint a successor to act as Paying Agent (which shall be a bank
or trust company).
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Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of Fleet Capital, but upon payment (with the giving of
such indemnity as Fleet Capital or Fleet may require) in respect of any tax or
other government charges which may be imposed in relation to it.
Fleet Capital will not be required to register or cause to be registered the
transfer of Preferred Securities after such Preferred Securities have been
called for redemption.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
The Institutional Trustee, prior to the occurrence of a default with respect
to the Trust Securities and after the curing of any defaults that may have
occurred, undertakes to perform only such duties as are specifically set forth
in the Declaration and, after default, shall exercise the same degree of care as
a prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provisions, the Institutional Trustee is under no obligation to
exercise any of the powers vested in it by the Declaration at the request of any
holder of Preferred Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The holders of Preferred Securities will not be required to offer such
indemnity in the event such holders, by exercising their voting rights, direct
the Institutional Trustee to take any action it is empowered to take under the
Declaration following a Declaration Event of Default. The Institutional Trustee
also serves as trustee under the Guarantee and the Indenture. Fleet and certain
of its subsidiaries conduct certain banking transactions with the Institutional
Trustee in the ordinary course of their business.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate Fleet Capital in
such a way so that Fleet Capital will not be required to register as an
"investment company" under the 1940 Act or characterized as other than a grantor
trust for United States federal income tax purposes. Fleet is authorized and
directed to conduct its affairs so that the Junior Subordinated Debentures will
be treated as indebtedness of Fleet for United States federal income tax
purposes. In this connection, Fleet and the Regular Trustees are authorized to
take any action, not inconsistent with applicable law, the certificate of trust
of Fleet Capital or the certificate of incorporation of Fleet, that each of
Fleet and the Regular Trustees determine in their discretion to be necessary or
desirable to achieve such end, as long as such action does not adversely affect
the interests of the holders of the Preferred Securities or vary the terms
thereof.
Holders of the Preferred Securities have no preemptive rights.
DESCRIPTION OF THE GUARANTEE
Pursuant to the Guarantee, Fleet will irrevocably and unconditionally agree,
to the extent set forth therein, to pay in full to the holders of the Preferred
Securities issued by Fleet Capital, the Guarantee Payments (as defined in the
accompanying Prospectus) (except to the extent paid by Fleet Capital), as and
when due, regardless of any defense, right of setoff or counterclaim which Fleet
Capital may have or assert. Fleet's obligation to make a Guarantee Payment may
be satisfied by direct payment of the required amounts by Fleet to the holders
of Preferred Securities or by causing Fleet Capital to pay such amounts to such
holders. The Guarantee will be qualified as an indenture under the Trust
Indenture Act. The First National Bank of Chicago will act as Guarantee Trustee.
The terms of the Guarantee will be those set forth in such Guarantee and those
made part of such Guarantee by the Trust Indenture Act. The Guarantee will be
held by the Guarantee Trustee for the benefit of the holders of the Preferred
Securities. A summary description of the Guarantee appears in the accompanying
Prospectus under the caption "Description of the Preferred Securities
Guarantees."
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<PAGE>
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
Set forth below is a description of the specific terms of the Junior
Subordinated Debentures in which Fleet Capital will invest the proceeds from the
issuance and sale of the Trust Securities. This description supplements the
description of the general terms and provisions of the Junior Subordinated
Debentures set forth in the accompanying Prospectus under the caption
"Description of the Junior Subordinated Debentures." The following description
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, the description in the accompanying Prospectus and the
Indenture, dated as of (the "Base Indenture"), between Fleet
and The First National Bank of Chicago as Trustee (the "Debt Trustee"), as
supplemented by a First Supplemental Indenture, dated as of
(the Base Indenture, as so supplemented, is hereinafter referred to as the
"Indenture"), the forms of which are filed as Exhibits to the Registration
Statement of which this Prospectus Supplement and the accompanying Prospectus
form a part. Certain capitalized terms used herein are defined in the Indenture.
Fleet will have the right at any time to liquidate Fleet Capital and cause
the Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities. If the Junior Subordinated Debentures are distributed to the holders
of the Preferred Securities, Fleet will use its best efforts to have the Junior
Subordinated Debentures listed on the New York Stock Exchange or on such other
national securities exchange or similar organization on which the Preferred
Securities are then listed or quoted.
GENERAL
The Junior Subordinated Debentures will be issued as unsecured indebtedness
of Fleet under the Indenture. The Junior Subordinated Debentures will be limited
in aggregate principal amount to approximately $ , such amount being the
sum of the aggregate stated liquidation value of the Trust Securities.
The Junior Subordinated Debentures are not subject to a sinking fund
provision. The entire principal amount of the Junior Subordinated Debentures
will mature and become due and payable, together with any accrued and unpaid
interest thereon including Compound Interest (as defined herein) and Additional
Interest (as defined herein), if any, on , 2026, subject to the
right of Fleet to shorten the maturity date to a date no earlier than
, 2001 and to extend the maturity date to a date no later than
, 2045, subject in each case to certain conditions.
If Junior Subordinated Debentures are distributed to holders of Preferred
Securities in liquidation of such holders' interests in Fleet Capital, such
Junior Subordinated Debentures will initially be issued as a Global Security (as
defined herein). As described herein, Junior Subordinated Debentures may be
issued in certificated form in exchange for a Global Security. See "Book-Entry
and Settlement" below. In the event that Junior Subordinated Debentures are
issued in certificated form, such Junior Subordinated Debentures will be in
denominations of $25 and integral multiples thereof and may be transferred or
exchanged at the offices described below. Payments on Junior Subordinated
Debentures issued as a Global Security will be made to DTC, a successor
depositary or, in the event that no depositary is used, to a Paying Agent for
the Junior Subordinated Debentures. In the event Junior Subordinated Debentures
are issued in certificated form, principal and interest will be payable, the
transfer of the Junior Subordinated Debentures will be registrable and Junior
Subordinated Debentures will be exchangeable for Junior Subordinated Debentures
of other denominations of a like aggregate principal amount, at the corporate
trust office of the Institutional Trustee in New York, New York; provided, that
payment of interest may be made at the option of Fleet by check mailed to the
address of the holder entitled thereto or by wire transfer to an account
appropriately designated by the holder entitled thereto. Notwithstanding the
foregoing, so long as the holder of any Junior Subordinated Debentures is the
Institutional Trustee, the payment of principal and interest on the Junior
Subordinated Debentures held by the Institutional Trustee will be made at such
place and to such account as may be designated by the Institutional Trustee.
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<PAGE>
The Indenture does not contain provisions that afford holders of the Junior
Subordinated Debentures protection in the event of a highly leveraged
transaction or other similar transaction involving Fleet that may adversely
affect such holders.
SUBORDINATION
The Indenture provides that the Junior Subordinated Debentures are
subordinated and junior in right of payment to all present and future Senior
Indebtedness and Other Financial Obligations of Fleet (each as defined herein)
and rank pari passu and are equivalent to creditor obligations of those holding
general unsecured claims not entitled to statutory priority under the United
States Bankruptcy Code or otherwise. In addition, no payment may be made of the
principal of, premium, if any, or interest on the Junior Subordinated
Debentures, or in respect of any redemption, retirement, purchase or other
acquisition of any of the Junior Subordinated Debentures, at any time when (i)
there is a default in the payment of the principal of, premium, if any, interest
on or otherwise in respect of any Senior Indebtedness, whether at maturity or at
a date fixed for prepayment or by declaration or otherwise, or (ii) any event of
default with respect to any Senior Indebtedness has occurred and is continuing,
or would occur as a result of such payment on the Junior Subordinated Debentures
or any redemption, retirement, purchase or other acquisition of any of the
Junior Subordinated Debentures, permitting the holders of such Senior
Indebtedness (or a trustee on behalf of the holders thereof) to accelerate the
maturity thereof. Upon any distribution of assets of Fleet to creditors upon any
dissolution, winding-up, liquidation or reorganization, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings,
the payment of the principal of, and interest on, the Junior Subordinated
Debentures will, to the extent set forth in the Indenture, be subordinated in
right of payment to the prior payment in full of all Senior Indebtedness and
Other Financial Obligations of Fleet. Upon any payment or distribution of assets
of Fleet to creditors upon any liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors, marshalling of assets
or any bankruptcy, insolvency or similar proceedings of Fleet, the holders of
all Senior Indebtedness and the holders of Other Financial Obligations will
first be entitled to receive payment in full of all amounts due or to become due
thereon before the holders of the Junior Subordinated Debentures will be
entitled to receive and retain any payment in respect of the principal of, or
interest on, the Junior Subordinated Debentures.
The term "Senior Indebtedness" means, with respect to Fleet, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by such obligor, (ii) all
capital lease obligations of such obligor, (iii) all obligations of such obligor
issued or assumed as the deferred purchased price of property, all conditional
sale obligations of such obligor and all obligations of such obligor under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction, (v) all obligations of the type referred
to in clauses (i) through (iv) above of other persons for the payment of which
such obligor is responsible or liable as obligor, guarantor or otherwise and
(vi) all obligations of the type referred to in clauses (i) through (v) above of
other persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except that Senior
Indebtedness shall not include (i) any such indebtedness that is by its terms
subordinated to or ranks pari passu with the Junior Subordinated Debentures and
(ii) any indebtedness between and among such obligor or its affiliates,
including all other debt securities and guarantees in respect to those debt
securities, issued to (a) any other Fleet Capital Trust (as defined in the
accompanying Prospectus) or a trustee of such Fleet Capital Trust and (b) any
other trust, or a trustee of such trust, partnership or other entity affiliated
with Fleet that is a financing vehicle of Fleet (a "financing entity") in
connection with the issuance by such financial entity of Preferred Securities or
other securities that rank pari passu with, or junior to, the Preferred
Securities.
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<PAGE>
The term "Other Financial Obligations" means all obligations of Fleet to
make payment pursuant to the terms of financial instruments, such as (i)
securities contracts and foreign currency exchange contracts, (ii) derivative
instruments, such as swap agreements (including interest rate and foreign
exchange rate swap agreements), cap agreements, floor agreements, collar
agreements, interest rate agreements, foreign exchange rate agreements, options,
commodity futures contracts, commodity option contracts and (iii) in the case of
both (i) and (ii) above, similar financial instruments, other than (A)
obligations on account of Senior Indebtedness and (B) obligations on account of
indebtedness for money borrowed ranking pari passu with or subordinate to the
Junior Subordinated Debentures.
Upon satisfaction of all claims of all Senior Indebtedness and Other
Financial Obligations then outstanding, the rights of the holders of the Junior
Subordinated Debentures will be subrogated to the rights of the holders of
Senior Indebtedness and Other Financial Obligations of Fleet to receive payments
or distributions applicable to Senior Indebtedness and Other Financial
Obligations until all amounts owing on the Junior Subordinated Debentures are
paid in full. Such Senior Indebtedness and Other Financial Obligations shall
continue to be Senior Indebtedness and Other Financial Obligations and be
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of such Senior Indebtedness or
Other Financial Obligations.
The Indenture does not limit the aggregate amount of Senior Indebtedness or
Other Financial Obligations that may be issued or entered into by Fleet. As of
September 30, 1996, Senior Indebtedness and Other Financial Obligations of Fleet
aggregated approximately $3.3 billion. In addition, because Fleet is a holding
company, the Junior Subordinated Debentures are effectively subordinated to all
existing and future liabilities of Fleet's subsidiaries, including depositors.
OPTIONAL REDEMPTION
Fleet shall have the right to redeem the Junior Subordinated Debentures, in
whole or in part, from time to time, on or after , 2001, or, in whole
but not in part, prior to , 2001, upon the occurrence of a Tax Event;
in either case, upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest, including Additional Interest, if any, to the
redemption date.
OPTION TO CHANGE MATURITY DATE
Fleet will have the right at any time to shorten the maturity of the Junior
Subordinated Debentures to a date not earlier than , 2001. The
exercise of such right is subject to the prior approval of the Federal Reserve
Board if such approval is then required under applicable law, rules, guidelines
or policies.
Fleet will also have the right to extend the maturity of the Junior
Subordinated Debentures to a date no later than , 2045, so long as
at the time such election is made and at the time such extension commences (i)
Fleet is not in bankruptcy, otherwise insolvent or in liquidation, (ii) Fleet is
not in default in the payment of any interest or principal on the Junior
Subordinated Debentures, (iii) Fleet Capital is not in arrears on payments of
distributions on the Preferred Securities and no deferred distributions on the
Preferred Securities are accumulated and (iv) the Junior Subordinated Debentures
are rated at least BBB- by Standard & Poor's Ratings Services, at least Baa3 by
Moody's Investors Service, Inc. or at least the equivalent by any other
nationally recognized statistical rating organization. In the event that Fleet
elects to shorten or extend the maturity date of the Junior Subordinated
Debentures, it shall give notice to the Debt Trustee, and the Debt Trustee shall
give notice of such shortening or extension to the holders of the Junior
Subordinated Debentures no more than 90 and no less than 30 days prior to the
effectiveness thereof.
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<PAGE>
INTEREST
The Junior Subordinated Debentures shall bear interest at the rate of %
per annum from the original date of issuance, payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year (each an "Interest
Payment Date"), commencing , to the person in whose name such Junior
Subordinated Debentures is registered, subject to certain exceptions, at the
close of business on the Business Day next preceding such Interest Payment Date.
In the event the Junior Subordinated Debentures shall not continue to remain in
book-entry only form, the record dates shall be the March 15, June 15, September
15 and December 15 prior to the applicable Interest Payment Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full quarterly period for which interest is computed,
will be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable on the Junior
Subordinated Debentures is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, then
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Fleet shall have the right at any time, and from time to time, during the
term of the Junior Subordinated Debentures to defer payments of interest by
extending the interest payment period for a period not exceeding 20 consecutive
quarters or extending beyond the Stated Maturity, at the end of which Extension
Period, Fleet shall pay all interest then accrued and unpaid (including any
Additional Interest, as herein defined) together with interest thereon
compounded quarterly at the rate specified for the Junior Subordinated
Debentures to the extent permitted by applicable law ("Compound Interest");
provided, that during any such Extension Period, (a) Fleet shall not declare or
pay dividends on, make any distribution with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to any of its capital stock
(other than (i) purchases or acquisitions of shares of Fleet Common Stock in
connection with the satisfaction by Fleet of its obligations under any employee
benefit plans or any other contractual obligation of Fleet (other than a
contractual obligation ranking pari passu with or junior to the Junior
Subordinated Debentures (ii) as a result of a reclassification of Fleet capital
stock or the exchange or conversion of one class or series of Fleet's capital
stock for another class or series of Fleet capital stock or (iii) the purchase
of fractional interests in shares of Fleet's capital stock pursuant to the
conversion or exchange provisions of such Fleet capital stock or the security
being converted or exchanged), (b) Fleet shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by Fleet that rank pari passu with or junior to the Junior
Subordinated Debentures, and (c) Fleet shall not make any guarantee payments
with respect to the foregoing (other than pursuant to the Guarantee). Prior to
the termination of any such Extension Period, Fleet may further defer payments
of interest by extending the interest payment period; provided, however, that,
such Extension Period, including all such previous and further extensions, may
not exceed 20 consecutive quarters or beyond the maturity of the Junior
Subordinated Debentures. Upon the termination of any Extension Period and the
payment of all amounts then due, Fleet may commence a new Extension Period,
subject to the terms set forth in this section. No interest during an Extension
Period, except at the end thereof, shall be due and payable. Fleet has no
present intention of exercising its right to defer payments of interest by
extending the interest payment period on the Junior Subordinated Debentures. If
the Institutional Trustee shall be the sole holder of the Junior Subordinated
Debentures, Fleet shall give the Regular Trustees and the Institutional Trustee
notice of its selection of such Extension Period one Business Day prior to the
earlier of (i) the date distributions on the Preferred Securities are payable or
(ii) the date the Regular Trustees are required to give notice to the New York
Stock Exchange (or other applicable self-regulatory
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organization) or to holders of the Preferred Securities of the record date or
the date such distribution is payable. The Regular Trustees shall give notice of
Fleet's selection of such Extension Period to the holders of the Preferred
Securities. If the Institutional Trustee shall not be the sole holder of the
Junior Subordinated Debentures, Fleet shall give the holders of the Junior
Subordinated Debentures notice of its selection of such Extension Period ten
Business Days prior to the earlier of (i) the Interest Payment Date or (ii) the
date upon which Fleet is required to give notice to the New York Stock Exchange
(or other applicable self-regulatory organization) or to holders of the Junior
Subordinated Debentures of the record or payment date of such related interest
payment.
ADDITIONAL INTEREST
If at any time Fleet Capital shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
such case, Fleet will pay as additional interest ("Additional Interest") such
additional amounts as shall be required so that the net amounts received and
retained by Fleet Capital after paying any such taxes, duties, assessments or
other governmental charges will be not less than the amounts Fleet Capital would
have received had no such taxes, duties, assessments or other governmental
charges been imposed.
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed the Proposed Legislation,
which would, among other things, generally deny corporate issuers a deduction
for interest in respect of certain debt obligations, such as the Junior
Subordinated Debentures, issued on or after December 7, 1995. On March 29, 1996,
Senate Finance Committee Chairman William V. Roth, Jr. and House Ways and Means
Committee Chairman Bill Archer issued the Joint Statement indicating their
intent that the Proposed Legislation, if adopted by either of the tax-writing
committees of Congress, would have an effective date that is no earlier than the
date of "appropriate Congressional action." In addition, subsequent to the
publication of the Joint Statement, Senator Daniel Patrick Moynihan and
Representatives Sam M. Gibbons and Charles B. Rangel wrote the Democrat Letters,
which concurred with the view expressed in the Joint Statement. If the
principles contained in the Joint Statement and the Democrat Letters were
followed and if the Proposed Legislation were enacted, such legislation would
not apply to the Junior Subordinated Debentures. There can be no assurance,
however, that the effective date guidance contained in the Joint Statement will
be incorporated into the Proposed Legislation, if enacted, or that other
legislation enacted after the date hereof will not otherwise adversely affect
the ability of Fleet to deduct the interest payable on the Junior Subordinated
Debentures. Accordingly, there can be no assurance that a Tax Event will not
occur. The occurrence of a Tax Event may result in the redemption of the Junior
Subordinated Debentures for cash, in which event the holders of the Preferred
Securities would receive cash in redemption of their Preferred Securities. See
"Description of the Preferred Securities--Tax Event Redemption or Distribution."
INDENTURE EVENTS OF DEFAULT
If any Indenture Event of Default shall occur and be continuing, the
Institutional Trustee, as the holder of the Junior Subordinated Debentures, will
have the right to declare the principal of and the interest on the Junior
Subordinated Debentures (including any Compound Interest and Additional
Interest, if any) and any other amounts payable under the Indenture to be
forthwith due and payable and to enforce its other rights as a creditor with
respect to the Junior Subordinated Debentures. See "Description of Subordinated
Debt Securities--Events of Default, Waiver and Notice" in the accompanying
Prospectus for a description of Indenture Events of Default. An Indenture Event
of Default also constitutes a Declaration Event of Default. The holders of
Preferred Securities in certain circumstances have the right to direct the
Institutional Trustee to exercise its rights as the holder of the Junior
Subordinated Debentures. See "Description of the Preferred
Securities--Declaration Events of Default"
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<PAGE>
and "Voting Rights." Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing and such event is attributable to the failure of
Fleet to pay interest or principal on the Junior Subordinated Debentures on the
date such interest or principal is otherwise payable, Fleet acknowledges that a
holder of Preferred Securities may then institute a Direct Action for payment on
or after the respective due date specified in the Junior Subordinated
Debentures. Notwithstanding any payments made to such holder of Preferred
Securities by Fleet in connection with a Direct Action, Fleet shall remain
obligated to pay the principal of or interest on the Junior Subordinated
Debentures held by Fleet Capital or the Institutional Trustee of Fleet Capital,
and Fleet shall be subrogated to the rights of the holder of such Preferred
Securities with respect to payments on the Preferred Securities to the extent of
any payments made by Fleet to such holder in any Direct Action. The holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Junior Subordinated Debentures.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with the
involuntary or voluntary dissolution, winding-up or liquidation of Fleet Capital
as a result of the occurrence of a Tax Event, the Junior Subordinated Debentures
will be issued in the form of one or more global certificates (each a "Global
Security") registered in the name of the depositary or its nominee. Except under
the limited circumstances described below, Junior Subordinated Debentures
represented by the Global Security will not be exchangeable for, and will not
otherwise be issuable as, Junior Subordinated Debentures in definitive form. The
Global Securities described above may not be transferred except by the
depositary to a nominee of the depositary or by a nominee of the depositary to
the depositary or another nominee of the depositary or to a successor depositary
or its nominee.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in such a Global Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Junior
Subordinated Debentures in definitive form and will not be considered the
holders (as defined in the Indenture) thereof for any purpose under the
Indenture, and no Global Security representing Junior Subordinated Debentures
shall be exchangeable, except for another Global Security of like denomination
and tenor to be registered in the name of the Depositary or its nominee or to a
successor Depositary or its nominee. Accordingly, each Beneficial Owner must
rely on the procedures of the Depositary or if such person is not a Participant,
on the procedures of the Participant through which such person owns its interest
to exercise any rights of a holder under the Indenture.
THE DEPOSITARY
If Junior Subordinated Debentures are distributed to holders of Preferred
Securities in liquidation of such holders' interests in Fleet Capital, DTC will
act as securities depositary for the Junior Subordinated Debentures. For a
description of DTC and the specific terms of the depositary arrangements, see
"Description of the Preferred Securities--Book-Entry Only Issuance--The
Depository Trust Company." As of the date of this Prospectus Supplement, the
description therein of DTC's book-entry system and DTC's practices as they
relate to purchases, transfers, notices and payments with respect to the
Preferred Securities apply in all material respects to any debt obligations
represented by one or more Global Securities held by Fleet. Fleet may appoint a
successor to DTC or any successor depositary in the event DTC or such successor
depositary is unable or unwilling to continue as a depositary for the Global
Securities.
None of Fleet, Fleet Capital, the Institutional Trustee, any paying agent
and any other agent of Fleet, or the Debt Trustee will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in a Global Security for such Junior
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<PAGE>
Subordinated Debentures or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Junior Subordinated Debentures
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies Fleet that it is unwilling or unable to continue
as a depositary for such Global Security and no successor depositary shall have
been appointed, (ii) the Depositary, at any time, ceases to be a clearing agency
registered under the Exchange Act at which time the Depositary is required to be
so registered to act as such depositary and no successor depositary shall have
been appointed, (iii) Fleet, in its sole discretion, determines that such Global
Security shall be so exchangeable or (iv) there shall have occurred an Indenture
Event of Default with respect to such Junior Subordinated Debentures. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Junior Subordinated Debentures registered in such names as the
Depositary shall direct. It is expected that such instructions will be based
upon directions received by the Depositary from its Participants with respect to
ownership of beneficial interests in such Global Security.
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by,
and construed in accordance with, the internal laws of the State of New York.
MISCELLANEOUS
The Indenture will provide that Fleet will pay all fees and expenses related
to (i) the offering of the Trust Securities and the Junior Subordinated
Debentures, (ii) the organization, maintenance and dissolution of Fleet Capital,
(iii) the retention of the Fleet Trustees and (iv) the enforcement by the
Institutional Trustee of the rights of the holders of the Preferred Securities.
The payment of such fees and expenses will be fully and unconditionally
guaranteed by Fleet.
Fleet will have the right at all times to assign any of its respective
rights or obligations under the Indenture to a direct or indirect wholly-owned
subsidiary of Fleet; provided that, in the event of any such assignment, Fleet
will remain liable for all of their respective obligations. Subject to the
foregoing, the Indenture will be binding upon and inure to the benefit of the
parties thereto and their respective successors and assigns. The Indenture
provides that it may not otherwise be assigned by the parties thereto.
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<PAGE>
EFFECT OF OBLIGATIONS UNDER THE
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of Fleet Capital is to
issue the Trust Securities evidencing undivided beneficial interests in the
assets of Fleet Capital, and to invest the proceeds from such issuance and sale
in the Junior Subordinated Debentures.
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debentures, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because of the following
factors: (i) the aggregate principal amount of Junior Subordinated Debentures
will be equal to the sum of the aggregate stated liquidation amount of the Trust
Securities; (ii) the interest rate and the interest and other payment dates on
the Junior Subordinated Debentures will match the distribution rate and
distribution and other payment dates for the Preferred Securities; (iii) Fleet
shall pay all, and Fleet Capital shall not be obligated to pay, directly or
indirectly, all costs, expenses, debt, and obligations of Fleet Capital (other
than with respect to the Trust Securities); and (iv) the Declaration further
provides that the Regular Trustees shall not take or cause or permit Fleet
Capital to, among other things, engage in any activity that is not consistent
with the purposes of Fleet Capital.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Preferred Securities (to the extent funds therefor are
available) are guaranteed by Fleet as and to the extent set forth under
"Description of the Preferred Securities Guarantees" in the accompanying
Prospectus. If Fleet does not make interest payments on the Junior Subordinated
Debentures purchased by Fleet Capital, Fleet Capital will not have sufficient
funds to pay distributions on the Preferred Securities. The Guarantee does not
apply to any payment of distributions unless and until the Trust has sufficient
funds for the payment of such distributions. The Guarantee covers the payment of
distributions and other payments on the Preferred Securities if and to the
extent that Fleet has made a payment of interest or principal on the Junior
Subordinated Debentures held by Fleet Capital as its sole asset. The Guarantee,
when taken together with Fleet's obligations under the Junior Subordinated
Debentures and the Indenture and its obligations under the Declaration,
including its obligations to pay costs, expenses, debts and liabilities of Fleet
Capital (other than with respect to the Trust Securities), provide a full and
unconditional guarantee of amounts on the Preferred Securities.
If Fleet fails to make interest or other payments on the Junior Subordinated
Debentures when due (taking account of any Extension Period), the Declaration
provides a mechanism whereby the holders of the Preferred Securities, using the
procedures described in "Description of the Preferred Securities-- Book-Entry
Only Issuance--The Depository Trust Company" and "Voting Rights," may direct the
Institutional Trustee to enforce its rights under the Junior Subordinated
Debentures. If the Institutional Trustee fails to enforce its rights under the
Junior Subordinated Debentures, a holder of Preferred Securities may institute a
legal proceeding against Fleet to enforce the Institutional Trustee's rights
under the Junior Subordinated Debentures without first instituting any legal
proceeding against the Institutional Trustee or any other person or entity.
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing and such event is attributable to the failure of Fleet to pay
interest or principal on the Junior Subordinated Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption on the
redemption date), then a holder of Preferred Securities may institute a Direct
Action for payment on or after the respective due date specified in the Junior
Subordinated Debentures. In connection with such Direct Action, Fleet will be
subrogated to the rights of such holder of Preferred Securities under the
Declaration to the extent of any payment made by Fleet to such holder of
Preferred Securities in such Direct Action. Fleet, under the Guarantee,
acknowledges that the Guarantee Trustee shall enforce the Guarantee on behalf of
the holders of the Preferred Securities. If Fleet fails to make payments under
the Guarantee, any holder of Preferred Securities may institute a Direct Action
against Fleet to enforce the Guarantee Trustee's rights under the Guarantee
without first instituting a legal proceeding against Fleet Capital, the
Guarantee Trustee, or any other person or entity.
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<PAGE>
UNITED STATES FEDERAL INCOME TAXATION
GENERAL
In the opinion of Edwards & Angell, counsel to Fleet and Fleet Capital ("Tax
Counsel"), the following is a summary of certain of the material United States
federal income tax consequences of the purchase, ownership and disposition of
Preferred Securities held as capital assets by a holder who purchases such
Preferred Securities upon initial issuance. It does not deal with special
classes of holders such as banks, thrifts, real estate investment trusts,
regulated investment companies, insurance companies, dealers in securities or
currencies, tax-exempt investors, or persons that will hold the Preferred
Securities as a position in a "straddle," as part of a "synthetic security" or
"hedge," as part of a "conversion transaction" or other integrated investment,
or as other than a capital asset. This summary also does not address the tax
consequences to persons that have a functional currency other than the U.S.
Dollar or the tax consequences to shareholders, partners or beneficiaries of a
holder of Preferred Securities. Further, it does not include any description of
any alternative minimum tax consequences or the tax laws of any state or local
government or of any foreign government that may be applicable to the Preferred
Securities. This summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury regulations thereunder and administrative and
judicial interpretations thereof, as of the date hereof, all of which are
subject to change, possibly on a retroactive basis.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
In connection with the issuance of the Junior Subordinated Debentures, Tax
Counsel will render its opinion generally to the effect that under then current
law and assuming full compliance with the terms of the Indenture (and certain
other documents), and based on certain facts and assumptions contained in such
opinion, the Junior Subordinated Debentures will be classified for United States
federal income tax purposes as indebtedness of Fleet.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Preferred Securities, Tax Counsel
will render its opinion generally to the effect that, under then current law and
assuming full compliance with the terms of the Declaration and the Indenture
(and certain other documents), and based on certain facts and assumptions
contained in such opinion, Fleet Capital will be classified for United States
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation. Accordingly, for United States federal income tax purposes,
each holder of Preferred Securities generally will be considered the owner of an
undivided interest in the Junior Subordinated Debentures, and each holder will
be required to include in its gross income any interest (or OID accrued) with
respect to its allocable share of those Junior Subordinated Debentures.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations (the "Regulations") applicable to
debt instruments issued on or after August 13, 1996, a "remote" contingency that
stated interest will not be timely paid will be ignored in determining whether a
debt instrument is issued with OID. Fleet believes that the likelihood of its
exercising its option to defer payments of interest is "remote" since exercising
that option would prevent Fleet from declaring dividends on any class of its
equity securities. Accordingly, Fleet intends to take the position, based on the
advice of Tax Counsel, that the Junior Subordinated Debentures will not be
considered to be issued with OID and, accordingly, stated interest on the Junior
Subordinated Debentures generally will be taxable to a holder as ordinary income
at the time it is paid or accrued in accordance with such holder's method of
accounting.
Under the Regulations, if Fleet were to exercise its option to defer
payments of interest, the Junior Subordinated Debentures would at that time be
treated as issued with OID, and all stated interest on the
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<PAGE>
Junior Subordinated Debentures would thereafter be treated as OID as long as the
Junior Subordinated Debentures remain outstanding. In such event, all of a
holder's taxable interest income with respect to the Junior Subordinated
Debentures would thereafter be accounted for on an economic accrual basis
regardless of such holder's method of tax accounting, and actual distributions
of stated interest would not be reported as taxable income. Consequently, a
holder of Preferred Securities would be required to include in gross income OID
even though Fleet would not make actual cash payments during an Extension
Period.
The Regulations have not yet been addressed in any rulings or other
interpretations by the Internal Revenue Service (the "IRS"), and it is possible
that the IRS could take a position contrary to Tax Counsel's interpretation
herein.
Because income on the Preferred Securities will constitute interest or OID,
corporate holders of the Preferred Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Preferred Securities.
RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF FLEET
CAPITAL
Fleet will have the right at any time to liquidate Fleet Capital and cause
the Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities. Under current law, such a distribution, for United States federal
income tax purposes, would be treated as a nontaxable event to each holder, and
each holder would receive an aggregate tax basis in the Junior Subordinated
Debentures equal to such holder's aggregate tax basis in its Preferred
Securities. A holder's holding period in the Junior Subordinated Debentures so
received in liquidation of Fleet Capital would include the period during which
the Preferred Securities were held by such holder. If, however, Fleet Capital is
characterized for United States federal income tax purposes as an association
taxable as a corporation at the time of its dissolution, the distribution of the
Junior Subordinate Debentures may constitute a taxable event to holders of
Preferred Securities.
Under certain circumstances described herein (see "Description of the
Preferred Securities"), the Junior Subordinated Debentures may be redeemed for
cash and the proceeds of such redemption distributed to holders in redemption of
their Preferred Securities. Under current law, such a redemption would, for
United States federal income tax purposes, constitute a taxable disposition of
the redeemed Preferred Securities, and a holder could recognize gain or loss as
if it sold such redeemed Preferred Securities for cash. See "United States
Federal Income Taxation--Sales of Preferred Securities."
SALES OF PREFERRED SECURITIES
A holder that sells Preferred Securities will recognize gain or loss equal
to the difference between its adjusted tax basis in the Preferred Securities and
the amount realized on the sale of such Preferred Securities (other than with
respect to accrued and unpaid interest which has not yet been included in
income, which will be treated as ordinary income). A holder's adjusted tax basis
in the Preferred Securities generally will be its initial purchase price
increased by OID (if any) previously includable in such holder's gross income to
the date of disposition and decreased by payments received on the Preferred
Securities. Such gain or loss generally will be a capital gain or loss and
generally will be a long-term capital gain or loss if the Preferred Securities
have been held for more than one year.
The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A holder who uses the accrual method of
accounting for tax purposes (and a cash method holder, if the Junior
Subordinated Debentures are deemed to have been issued with OID) and who
disposes of his Preferred Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest on
the Junior Subordinated Debentures through the date of disposition in income as
ordinary income (i.e., interest or, possibly, OID), and to add such amount to
his adjusted tax basis in his pro rata
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<PAGE>
share of the underlying Junior Subordinated Debentures deemed disposed of. To
the extent the selling price is less than the holder's adjusted tax basis (which
will include all accrued but unpaid interest) a holder will recognize a capital
loss. Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, as to the United
States, a foreign corporation, a non-resident alien individual, a foreign
partnership, or a non-resident fiduciary of a foreign estate or trust.
Under present United States federal income tax law: (i) payments by Fleet
Capital or any of its paying agents to any holder of a Preferred Security who or
which is a United States Alien Holder will not be subject to United States
federal withholding tax; provided that, (a) the beneficial owner of the
Preferred Security does not actually or constructively own 10 percent or more of
the total combined voting power of all classes of stock of Fleet entitled to
vote, (b) the beneficial owner of the Preferred Security is not a controlled
foreign corporation that is related to Fleet through stock ownership, and (c)
either (A) the beneficial owner of the Preferred Security certifies to Fleet
Capital or its agent, under penalties of perjury, that it is not a United States
holder and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Preferred Security in such capacity, that certifies
to Fleet Capital or its agent, under penalties of perjury, that such statement
has been received from the beneficial owner by it or by a Financial Institution
between it and the beneficial owner and furnishes Fleet Capital or its agent
with a copy thereof; and (ii) a United States Alien Holder of a Preferred
Security will not be subject to United States federal withholding tax on any
gain realized upon the sale or other disposition of a Preferred Security.
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed the Proposed Legislation,
which would, among other things, generally deny corporate issuers a deduction
for interest in respect of certain debt obligations, such as the Junior
Subordinated Debentures, issued on or after December 7, 1995. On March 29, 1996,
Senate Finance Committee Chairman William V. Roth, Jr. and House Ways and Means
Committee Chairman Bill Archer issued the Joint Statement indicating their
intent that the Proposed Legislation, if adopted by either of the tax-writing
committees of Congress, would have an effective date that is no earlier than the
date of "appropriate Congressional action." In addition, subsequent to the
publication of the Joint Statement, Senator Daniel Patrick Moynihan and
Representatives Sam M. Gibbons and Charles B. Rangel wrote the Democrat Letters,
which concurred with the view expressed in the Joint Statement. If the
principles contained in the Joint Statement and the Democrat Letters were
followed and if the Proposed Legislation were enacted, such legislation would
not apply to the Junior Subordinated Debentures. There can be no assurance,
however, that the effective date guidance contained in the Joint Statement will
be incorporated into the Proposed Legislation, if enacted, or that other
legislation enacted after the date hereof will not otherwise adversely affect
the ability of Fleet to deduct the interest payable on the Junior Subordinated
Debentures. Accordingly, there can be no assurance that a Tax Event will not
occur. The occurrence of a Tax Event may result in the redemption of the Junior
Subordinated Debentures for cash, in which event the holders of the Preferred
Securities would receive cash in redemption of their Preferred Securities. See
"Description of the Preferred Securities--Tax Event Redemption or Distribution."
INFORMATION REPORTING TO HOLDERS
Generally, income on the Preferred Securities will be reported to holders on
Forms 1099, which forms should be mailed to holders of Preferred Securities by
January 31 following each calendar year.
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BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Preferred Securities
may be subject to a "backup" withholding tax of 31 percent unless the holder
complies with certain identification requirements. Any withheld amounts will be
allowed as a credit against the holder's United States federal income tax,
provided the required information is provided to the Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL
OR OTHER TAX LAWS.
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<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement"), Fleet Capital has agreed to sell to each of the
Underwriters named below, and each of the Underwriters, for whom Merrill Lynch,
Pierce, Fenner & Smith Incorporated are acting as representatives (the
"Representatives"), has severally agreed to purchase the number of Preferred
Securities set forth opposite its name below. In the Underwriting Agreement, the
several Underwriters have agreed, subject to the terms and conditions set forth
therein, to purchase all the Preferred Securities offered hereby if any of the
Preferred Securities are purchased. In the event of default by an Underwriter,
the Underwriting Agreement provides that, in certain circumstances, the purchase
commitments of the non-defaulting Underwriters may be increased or the
Underwriting Agreement may be terminated.
<TABLE>
<S> <C>
NUMBER OF PREFERRED
UNDERWRITERS SECURITIES
-------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..............................................................
-----------
-----------
</TABLE>
The Underwriters propose to offer the Preferred Securities, in part,
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement, and, in part, to certain securities
dealers at such price less a concession of $ per Preferred Security. The
Underwriters may allow, and such dealers may reallow, a concession not in excess
of $ per Preferred Security to certain brokers and dealers. After the
Preferred Securities are released for sale to the public, the offering price and
other selling terms may from time to time be varied by the Representative.
In view of the fact that the proceeds of the sale of the Preferred
Securities will ultimately be used to purchase the Junior Subordinated
Debentures of Fleet, the Underwriting Agreement provides that Fleet will pay as
compensation ("Underwriters' Compensation") to the Underwriters arranging the
investment therein of such proceeds, an amount in immediately available funds of
$ per Preferred Security (or $ in the aggregate) for the accounts of
the several Underwriters; provided that, such compensation for sales of 10,000
or more Preferred Securities to any single purchaser will be $ per
Preferred Security. Therefore, to the extent of such sales, the actual amount of
Underwriters' Compensation will be less than the aggregate amount specified in
the preceding sentence.
During a period of days from the date of the Prospectus Supplement,
neither Fleet Capital nor Fleet will, without the prior written consent of the
Underwriters, directly or indirectly, sell, offer to sell, grant any option for
sale of, or otherwise dispose of, any Preferred Securities, any security
convertible into or exchangeable into or exercisable for Preferred Securities or
Junior Subordinated Debentures or any debt securities substantially similar to
the Junior Subordinated Debentures or equity securities substantially similar to
the Preferred Securities (except for the Junior Subordinated Debentures and the
Preferred Securities offered hereby).
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<PAGE>
Application has been made to list the Preferred Securities on the New York
Stock Exchange. If so approved, trading of the Preferred Securities on the New
York Stock Exchange is expected to commence within a 30-day period after the
initial delivery of the Preferred Securities. The Representatives have advised
Fleet Capital that they intend to make a market in the Preferred Securities
prior to the commencement of trading on the New York Stock Exchange. The
Representatives will have no obligation to make a market in the Preferred
Securities, however, and may cease market making activities, if commenced, at
any time.
Prior to this offering there has been no public market for the Preferred
Securities. In order to meet one of the requirements for listing the Preferred
Securities on the New York Stock Exchange, the Underwriters will undertake to
sell lots of 100 or more Preferred Securities to a minimum of 400 beneficial
holders.
Fleet Capital and Fleet have agreed to indemnify the Underwriters against,
or contribute to payments that the Underwriters may be required to make in
respect of, certain liabilities, including liabilities under the Securities Act
of 1933, as amended.
Certain of the Underwriters engage in transactions with, and, from time to
time, have performed services for, Fleet and its subsidiaries in the ordinary
course of business.
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<PAGE>
SUBJECT TO COMPLETION, DATED NOVEMBER 6, 1996
PROSPECTUS
FLEET FINANCIAL GROUP, INC.
JUNIOR SUBORDINATED DEBENTURES
FLEET CAPITAL TRUST I
FLEET CAPITAL TRUST II
FLEET CAPITAL TRUST III
FLEET CAPITAL TRUST IV
FLEET CAPITAL TRUST V
PREFERRED SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED BY
FLEET FINANCIAL GROUP, INC.
Fleet Financial Group, Inc. ("Fleet" or the "Company"), a Rhode Island
corporation, may from time to time offer its subordinated debentures, notes or
other evidence of indebtedness (the "Junior Subordinated Debentures") in one or
more series and in amounts, at prices and on terms to be determined at the time
of the offering. The Junior Subordinated Debentures when issued will be
unsecured obligations of the Company. The Company's obligations under the Junior
Subordinated Debentures will be subordinate and junior in right of payment to
certain other indebtedness of Fleet, as may be described in an accompanying
Prospectus Supplement (the "Prospectus Supplement").
Fleet Capital Trust I, Fleet Capital Trust II, Fleet Capital Trust III,
Fleet Capital Trust IV and Fleet Capital Trust V (each, a "Fleet Capital
Trust"), each a statutory business trust formed under the laws of the State of
Delaware, may offer, from time to time, preferred securities representing
undivided beneficial interests in the assets of the respective Fleet Capital
Trust ("Preferred Securities"). The payment of periodic cash distributions
("distributions") with respect to Preferred Securities of each of the Fleet
Capital Trusts out of moneys held by each of the Fleet Capital Trusts, and
payment on liquidation, redemption or otherwise with respect to such Preferred
Securities, will be guaranteed by Fleet to the extent described herein (each a
"Preferred Securities Guarantee"). See "Description of the Preferred Securities
Guarantees" below. Fleet's obligations under the Preferred Securities Guarantees
will be subordinate and junior in right of payment to all other liabilities of
Fleet and will rank pari passu with the most senior preferred stock, if any,
issued from time to time by Fleet. Junior Subordinated Debentures may be issued
and sold from time to time in one or more series to a Fleet Capital Trust, or a
trustee of such Fleet Capital Trust, in connection with the investment of the
proceeds from the offering of Preferred Securities and Common Securities (as
defined herein, together the "Trust Securities") of such Fleet Capital Trust.
The Junior Subordinated Debentures purchased by a Fleet Capital Trust may be
subsequently distributed pro rata to holders of Preferred Securities and Common
Securities in connection with the dissolution of such Fleet Capital Trust upon
the occurrence of certain events as may be described in an accompanying
Prospectus Supplement. The Junior Subordinated Debentures and the Preferred
Securities and the related Preferred Securities Guarantees are sometimes
collectively referred to hereafter as the "Offered Securities."
Specific terms of the Junior Subordinated Debentures of any series or the
Preferred Securities of any Fleet Capital Trust, the terms of which will mirror
the terms of the Junior Subordinated Debentures held by the Fleet Capital Trust,
in respect of which this prospectus (the "Prospectus") is being delivered, will
be set forth in a Prospectus Supplement with respect to such securities, which
will describe, without limitation and where applicable, the following: (i) in
the case of Junior Subordinated Debentures, the specific designation, aggregate
principal amount, denomination, currency or currency unit for which Junior
Subordinated Debentures may be purchased, currency or currency unit in which the
principal and any interest on Junior Subordinated Debentures is payable,
maturity, the right of Fleet, if any, to extend or shorten the maturity after
issuance, premium, if any, any exchange, conversion or redemption provisions, if
any, interest rate (which may be fixed or variable), if any, the time and method
of calculating interest payments, if any, dates on which premium, if any, and
interest, if any, will be payable, the right of Fleet, if any, to defer payment
of interest on the Junior Subordinated Debentures and the maximum length of such
deferral period, the initial public offering price, subordination terms, and any
listing on a securities exchange and other specific terms of the offering; and
(ii) in the case of Preferred Securities, the designation, number of securities,
liquidation preference per security, initial public offering price, any listing
on a securities exchange, distribution rate (or method of calculation thereof),
dates on which distributions shall be payable and dates from which distributions
shall accrue, any voting rights, terms for any conversion or exchange into other
securities, any redemption, exchange or sinking fund provisions, any other
rights, preferences, privileges, limitations or restrictions relating to the
Preferred Securities and the terms upon which the proceeds of the sale of the
Preferred Securities shall be used to purchase a specific series of Junior
Subordinated Debentures of Fleet.
The Offered Securities may be offered in amounts, at prices and on terms to
be determined at the time of offering. The Prospectus Supplement relating to any
series of Offered Securities will contain information concerning the United
States federal income tax considerations applicable to purchasers of the Offered
Securities.
Fleet and/or each of the Fleet Capital Trusts may sell the Offered
Securities directly, through agents designated from time to time, or through
underwriters or dealers. See "Plan of Distribution" below. If any agents of
Fleet and/or any Fleet Capital Trust or any underwriters or dealers are involved
in the sale of the Offered Securities, the names of such agents, underwriters or
dealers and any applicable commissions and discounts will be set forth in any
related Prospectus Supplement.
This Prospectus and related Prospectus Supplements may be used by direct or
indirect subsidiaries of Fleet in connection with offers and sales related to
secondary market transactions in the Offered Securities. Such subsidiaries may
act as principal or agent in such transactions. Such sales will be made at
prices related to prevailing market prices at the time of sale.
This Prospectus may not be used to consummate sales of securities unless
accompanied by a Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
--------------------------
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY
OF FLEET (OTHER THAN THE FLEET CAPITAL TRUSTS)
AND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, BANK INSURANCE FUND
OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
The date of this Prospectus is , 1996
<PAGE>
FOR NORTH CAROLINA RESIDENTS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
AVAILABLE INFORMATION
This Prospectus constitutes a part of a combined Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") filed by Fleet and the Fleet Capital Trusts with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Offered Securities. This
Prospectus does not contain all of the information set forth in such
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission, although it does include a summary
of the material terms of the Indenture and the Declarations of Trust (each as
defined herein). Reference is made to such Registration Statement and to the
exhibits relating thereto for further information with respect to the Company,
the Fleet Capital Trusts and the Offered Securities. Any statements contained
herein concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission or incorporated by
reference herein are not necessarily complete, and, in each instance, reference
is made to the copy of such document so filed for a more complete description of
the matter involved. Each such statement is qualified in its entirety by such
reference.
Fleet is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Commission. Reports, proxy statements and other information concerning Fleet can
be inspected and copied at prescribed rates at the Commission's Public Reference
Room, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, as well
as the following Regional Offices of the Commission: 7 World Trade Center, 13th
Floor, New York, New York 10048; and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material may be obtained by
mail from the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. If available, such reports and
other information may also be accessed through the Commission's electronic data
gathering, analysis and retrieval system ("EDGAR") via electronic means,
including the Commission's web set on the Internet (http://www.sec.gov). Such
reports, proxy statements and other information may also be inspected at the
offices of the New York Stock Exchange.
No separate financial statements of any of the Fleet Capital Trusts have
been included herein. Fleet does not consider that such financial statements
would be material to holders of the Preferred Securities because (i) all of the
voting securities of each of the Fleet Capital Trusts will be owned, directly or
indirectly, by Fleet, a reporting company under the Exchange Act, (ii) each of
the Fleet Capital Trusts has no independent operations but exists for the sole
purpose of issuing securities representing undivided beneficial interests in the
assets of such Fleet Capital Trust and investing the proceeds thereof in Junior
Subordinated Debentures issued by Fleet, and (iii) Fleet's obligations described
herein and in any accompanying Prospectus Supplement to provide certain
indemnities in respect of, and be responsible for, certain costs, expenses,
debts and liabilities of each of the Fleet Capital Trusts under the Indenture
and any supplemental indenture thereto and pursuant to the Declarations of each
Trust, the guarantee issued with respect to Preferred Securities issued by that
Trust, the Junior Subordinated Debentures purchased by that Trust and the
related Indenture, taken together, constitute a full and unconditional guarantee
of payments due on the Preferred Securities. See "Description of the Junior
Subordinated Debentures" and "Description of the Preferred Securities
Guarantees."
The Fleet Capital Trusts are not currently subject to the information
reporting requirements of the Exchange Act. The Fleet Capital Trusts will become
subject to such requirements upon the effectiveness of the Registration
Statement, although they intend to seek and expect to receive exemptions
therefrom.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Fleet pursuant to
Section 13 of the Exchange Act are incorporated by reference in this Prospectus:
(a) Annual Report on Form 10-K for the fiscal year ended December 31, 1995;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996 and
June 30, 1996; and
(c) Current Reports on Form 8-K dated January 17, 1996, January 19, 1996,
February 8, 1996, February 21, 1996, March 15, 1996 (as amended by a Form 8-K/A
dated April 5, 1996), March 25, 1996, March 26, 1996, March 27, 1996, April 1,
1996, April 15, 1996, April 17, 1996, May 1, 1996, May 15, 1996 (as amended by a
Form 8-K/A dated August 5, 1996), July 17, 1996, August 15, 1996, August 23,
1996, September 27, 1996 and October 16, 1996.
Such incorporation by reference shall not be deemed to specifically
incorporate by reference the information referred to in Item 402(a)(8) of
Regulation S-K.
All documents filed by Fleet pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Offered Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in this Prospectus or
in a document incorporated or deemed to be incorporated by reference herein or
in any Prospectus Supplement shall be deemed to be modified or superseded for
purposes of this Prospectus or any Prospectus Supplement to the extent that a
statement contained herein or therein (or in any subsequently filed document
that also is or is deemed to be incorporated by reference herein or therein)
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus or any Prospectus Supplement.
Fleet will provide without charge to each person to whom a copy of this
Prospectus has been delivered, upon the written or oral request of such person,
a copy of any or all of the documents referred to above which have been or may
be incorporated by reference herein (other than exhibits to such documents
unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to Investor Relations
Department, Fleet Financial Group, Inc., One Federal Street, Boston,
Massachusetts 02110, (617) 292-2000.
3
<PAGE>
FLEET FINANCIAL GROUP, INC.
GENERAL
Fleet is a diversified financial services company organized under the laws
of the State of Rhode Island. Fleet was the 11th largest bank holding company in
the United States as of June 30, 1996, in terms of total assets, with total
assets of $87.7 billion, total deposits of $68.1 billion and stockholders'
equity of $7.1 billion.
Fleet is engaged in a general commercial banking and trust business
throughout the states of Connecticut, Massachusetts, New Jersey, New York, Rhode
Island, Maine, New Hampshire and Florida through its six banking subsidiaries,
and also provides, through its nonbanking subsidiaries and its credit card
banking subsidiary, a variety of financial services, including mortgage banking,
asset-based lending, consumer finance, real estate financing, securities
brokerage services, investment banking, investment advice and management, data
processing and student loan servicing.
The principal office of Fleet is located at One Federal Street, Boston,
Massachusetts 02110, telephone number (617) 292-2000.
HOLDING COMPANY
Fleet is a holding company with no independent operations and thus its
ability to make payments on its obligations, including payments on the Junior
Subordinated Debentures, is dependent on its ability to obtain funds from its
subsidiaries.
Fleet is a legal entity separate and distinct from its subsidiaries. The
ability of holders of debt and equity securities of Fleet, including the holders
of the Offered Securities, to benefit from the distribution of assets of any
subsidiary upon the liquidation or reorganization of such subsidiary is
subordinate to prior claims of creditors of the subsidiary (including depositors
in the case of banking subsidiaries) except to the extent that a claim of Fleet
as a creditor may be recognized.
There are various statutory and regulatory limitations on the extent to
which banking subsidiaries of Fleet can finance or otherwise transfer funds to
Fleet or its nonbanking subsidiaries, whether in the form of loans, extensions
of credit, investments or asset purchases. Such transfers by any subsidiary bank
to Fleet or any nonbanking subsidiary are limited in amount to 10% of the bank's
capital and surplus and, with respect to Fleet and all such nonbanking
subsidiaries, to an aggregate of 20% of each such bank's capital and surplus.
Furthermore, loans and extensions of credit are required to be secured in
specified amounts and are required to be on terms and conditions with safe and
sound banking practices.
In addition, there are regulatory limitations on the payment of dividends
directly or indirectly to Fleet from its banking subsidiaries. Under applicable
banking statutes, at June 30, 1996, Fleet's banking subsidiaries could have
declared additional dividends of approximately $275 million. Federal and state
regulatory agencies also have the authority to limit further Fleet's banking
subsidiaries' payment of dividends based on other factors, such as the
maintenance of adequate capital for such subsidiary bank.
Under the policy of the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board"), Fleet is expected to act as a source of financial
strength to each subsidiary bank and to commit resources to support such
subsidiary bank in circumstances where it might not do so absent such policy. In
addition, any subordinated loans by Fleet to any of the subsidiary banks would
also be subordinate in right of payment to deposits and obligations to general
creditors of such subsidiary bank. Further, the Crime Control Act of 1990
amended the federal bankruptcy laws to provide that in the event of the
bankruptcy of Fleet, any commitment by Fleet to its regulators to maintain the
capital of a banking subsidiary would be assumed by the bankruptcy trustee and
entitled to a priority of payment.
4
<PAGE>
THE TRUSTS
Each of the Trusts is a statutory business trust formed under Delaware law
pursuant to (i) a separate declaration of trust (each a "Declaration") executed
by Fleet, as sponsor for such trust (the "Sponsor") and the Fleet Capital
Trustees (as defined herein) for such trust and (ii) the filing of a certificate
of trust with the Delaware Secretary of State. Each Fleet Capital Trust exists
for the exclusive purposes of (i) issuing the Preferred Securities and common
securities representing undivided beneficial interests in the assets of such
Trust (the "Common Securities" and, together with the Preferred Securities, the
"Trust Securities"), (ii) investing the gross proceeds of the Trust Securities
in Junior Subordinated Debentures, and (iii) engaging in only those other
activities necessary or incidental thereto. All of the Common Securities will be
directly or indirectly owned by Fleet. The Common Securities of each Trust will
rank pari passu, and payments will be made thereon pro rata, with the Preferred
Securities of such Trust except that upon an event of default under the
Declaration with respect thereto, the rights of the holders of the Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Preferred Securities. Fleet will, directly or indirectly, acquire Common
Securities of each Trust in an aggregate liquidation amount equal to at least 3
percent of the total capital of each Fleet Capital Trust. Each Fleet Capital
Trust has a term of approximately 55 years, but may terminate earlier as
provided in the applicable Declaration. Each Fleet Capital Trust's business and
affairs will be conducted by the trustees (the "Fleet Capital Trustees")
appointed by Fleet, as the direct or indirect holder of all the Common
Securities. The holder of the Common Securities will be entitled to appoint,
remove or replace any of, or increase or reduce the number of, the Fleet Capital
Trustees of a Fleet Capital Trust. The duties and obligations of the Fleet
Capital Trustees shall be governed by the Declaration of such Fleet Capital
Trust. One or more of the Fleet Capital Trustees for each Trust will be persons
who are employees or officers of or affiliated with Fleet (the "Regular
Trustees"). One Fleet Capital Trustee of each Fleet Capital Trust will be a
financial institution which will be unaffiliated with Fleet and which shall act
as institutional trustee under the Declaration and as indenture trustee for
purposes of the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), pursuant to the terms set forth in a Prospectus Supplement (the
"Institutional Trustee"). In addition, unless the Institutional Trustee
maintains a principal place of business in the State of Delaware, and otherwise
meets the requirements of applicable law, one Fleet Capital Trustee of each
Fleet Capital Trust will have its principal place of business or reside in the
State of Delaware (the "Delaware Trustee"). Fleet will pay all fees and expenses
related to the Fleet Capital Trusts and the offering of Trust Securities. The
office of the Delaware Trustee for each Fleet Capital Trust in the State of
Delaware, and its principal place of business is, First Chicago Delaware Inc.,
300 King Street, Wilmington, Delaware 19801. The principal place of business of
each Fleet Capital Trust shall be c/o Fleet Financial Group, Inc., One Federal
Street, Boston, Massachusetts 02110.
5
<PAGE>
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Fleet's consolidated ratios of earnings to fixed charges were as follows for
the years and periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
-------------------- ------------------------------------------
1996 1995 1995 1994 1993 1992
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
RATIO OF EARNINGS TO FIXED CHARGES:
Excluding interest on deposits.............................. 3.14x 2.18x 1.78x 2.33x 2.36x 1.90x
Including interest on deposits.............................. 1.73 1.53 1.34 1.62 1.56 1.26
<CAPTION>
1991
-----------
<S> <C>
RATIO OF EARNINGS TO FIXED CHARGES:
Excluding interest on deposits.............................. *
Including interest on deposits.............................. *
</TABLE>
- ------------------------
* The sum of fixed charges exceeded earnings by $16 million for both the ratio
excluding and including interest on deposits for the year ended December 31,
1991.
For purposes of computing the consolidated ratios, earnings consist of
income before income taxes plus fixed charges (excluding capitalized interest).
Fixed charges consist of interest on short-term debt and long-term debt
(including interest related to capitalized leases and capitalized interest) and
one-third of rent expense, which approximates the interest component of such
expense. In addition, where indicated, fixed charges include interest on
deposits.
USE OF PROCEEDS
Each Trust will use the proceeds of the sale of the Trust Securities to
acquire Junior Subordinated Debentures from Fleet. Unless otherwise indicated in
the applicable Prospectus Supplement, Fleet intends to use the net proceeds from
the sale of the Junior Subordinated Debentures for general corporate purpose,
principally to extend credit to, or fund investments in, its subsidiaries. The
precise amounts and timing of extensions of credit to, and investments in, such
subsidiaries will depend upon the subsidiaries' funding requirements and the
availability of other funds. Pending such applications, the net proceeds may be
temporarily invested in marketable securities or applied to the reduction of
Fleet's short-term indebtedness. Based upon the historic and anticipated future
growth of Fleet and the financial needs of its subsidiaries, Fleet may engage in
additional financings of a character and amount to be determined as the need
arises.
6
<PAGE>
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
Junior Subordinated Debentures may be issued from time to time in one or
more series under an Indenture (the "Indenture"), between the Company and The
First National Bank of Chicago, as Trustee (the "Debt Trustee"). The terms of
the Junior Subordinated Debentures will include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act.
The following summary of the material terms does not purport to be complete and
is subject in all respects to the provisions of, and is qualified in its
entirety by reference to, the Indenture, which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and the Trust
Indenture Act. Whenever particular provisions or defined terms in the Indenture
are referred to herein, such provisions or defined terms are incorporated by
reference herein. Section and Article references used herein are references to
provisions of the Indenture unless otherwise noted.
GENERAL
The Junior Subordinated Debentures will be unsecured, fully subordinated
obligations of the Company. The Indenture does not limit the aggregate principal
amount of Junior Subordinated Debentures which may be issued thereunder and
provides that the Junior Subordinated Debentures may be issued from time to time
in one or more series. The Junior Subordinated Debentures are issuable in one or
more series pursuant to an indenture supplemental to the Indenture or a
resolution of the Company's Board of Directors or a special committee appointed
thereby (each, a "Supplemental Indenture"). (Section 2.03)
In the event Junior Subordinated Debentures are issued to a Fleet Capital
Trust or a trustee of such trust in connection with the issuance of Trust
Securities by such Fleet Capital Trust, such Junior Subordinated Debentures
subsequently may be distributed PRO RATA to the holders of such Trust Securities
in connection with the dissolution of such Fleet Capital Trust upon the
occurrence of certain events described in the Prospectus Supplement relating to
such Trust Securities. Only one series of Junior Subordinated Debentures will be
issued to a Fleet Capital Trust or a trustee of such trust in connection with
the issuance of Trust Securities by such Fleet Capital Trust.
Reference is made to the Prospectus Supplement relating to the particular
Junior Subordinated Debentures being offered thereby for the following terms:
(1) the designation of such Junior Subordinated Debentures; (2) the aggregate
principal amount of such Junior Subordinated Debentures; (3) the percentage of
their principal amount at which such Junior Subordinated Debentures will be
issued; (4) the date or dates on which such Junior Subordinated Debentures will
mature and the right, if any, to shorten or extend such date or dates; (5) the
rate or rates, if any, per annum, at which such Junior Subordinated Debentures
will bear interest, or the method of determination of such rate or rates; (6)
the date or dates from which such interest shall accrue, the interest payment
dates on which such interest will be payable or the manner of determination of
such interest payment dates and the record dates for the determination of
holders to whom interest is payable on any such interest payment dates; (7) the
right, if any, to extend the interest payment periods and the duration of such
extension; (8) provisions for a sinking purchase or other analogous fund; (9)
the period or periods, if any, within which, the price or prices of which, and
the terms and conditions upon which such Junior Subordinated Debentures may be
redeemed, in whole or in part, at the option of Fleet or the holder; (10) the
form of such Junior Subordinated Debentures; and (11) any other specific terms
of the Junior Subordinated Debentures. Principal, premium, if any, and interest,
if any, will be payable, and the Junior Subordinated Debentures offered hereby
will be transferable, at the corporate trust office of the Debt Trustee in New
York, New York, provided that payment of interest, if any, may be made at the
option of Fleet by check mailed to the address of the person entitled thereto as
it appears in the Security Register. (Sections 3.01 and 3.02).
If a Prospectus Supplement specifies that a series of Junior Subordinated
Debentures is denominated in a currency or currency unit other than United
States dollars, such Prospectus Supplement shall also specify the denomination
in which such Junior Subordinated Debentures will be issued and the coin or
7
<PAGE>
currency in which the principal, premium, if any, and interest, if any, on such
Junior Subordinated Debentures will be payable, which may be United States
dollars based upon the exchange rate for such other currency or currency unit
existing on or about the time a payment is due.
The covenants contained in the Indenture would not necessarily afford
protection to holders of the Junior Subordinated Debentures in the event of a
decline in credit quality resulting from takeovers, recapitalizations or similar
restructurings.
FORM, EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Junior Subordinated Debentures will be issued in fully registered form without
coupons and in denominations of $1,000 and multiples of $1,000. No service
charge will be made for any transfer or exchange of the Junior Subordinated
Debentures, but the Company or the Debt Trustee may require payment of a sum
sufficient to cover any tax or other government charge payable in connection
therewith.
Unless otherwise provided in the applicable Prospectus Supplement, principal
and premium, if any, or interest, if any, will be payable and the Junior
Subordinated Debentures may be surrendered for payment or transferred at the
offices of the Debt Trustee as paying and authenticating agent, provided that
payment of interest on registered securities that are not issued to a Fleet
Capital Trust may be made at the option of Fleet by check mailed to the address
of the person entitled thereto as it appears in the Security Register.
BOOK-ENTRY JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures of a series may be issued in whole or in
part in the form of one or more Global Securities that will be deposited with,
or on behalf of, a depositary (the "Global Depositary"), or its nominee,
identified in the Prospectus Supplement relating to such series. In such a case,
one or more Global Securities will be issued in a denomination or aggregate
denomination equal to the portion of the aggregate principal amount of
Outstanding Junior Subordinated Debentures of the series to be represented by
such Global Security or Securities. Unless and until it is exchanged in whole or
in part for Junior Subordinated Debentures in definitive registered form, a
Global Security may not be registered for transfer or exchange except as a whole
by the Global Depositary for such Global Security to a nominee for such Global
Depositary and except in the circumstances described in the applicable
Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any portion
of a series of Junior Subordinated Debentures to be represented by a Global
Security and a description of the Global Depositary will be provided in the
applicable Prospectus Supplement.
SUBORDINATION
The Junior Subordinated Debentures will be subordinated and junior in right
of payment to certain other indebtedness of Fleet to the extent set forth in the
applicable Prospectus Supplement.
CERTAIN COVENANTS OF FLEET
If Junior Subordinated Debentures are issued to a Fleet Capital Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
such Fleet Capital Trust and (i) there shall have occurred any event that would
constitute an Event of Default (as defined herein) or (ii) Fleet shall be in
default with respect to its payment of any obligations under the related
Preferred Securities Guarantee or Common Securities Guarantee, or (iii) Fleet
shall have given notice of its election to defer payments of interest on such
Junior Subordinated Debentures by extending the interest payment period as
provided in the Indenture and such period, or any extension thereof, shall be
continuing, then (a) Fleet shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase or make a
8
<PAGE>
liquidation payment with respect to, any of its capital stock (other than (x)
purchases or acquisitions of shares of common stock, par value $0.01 per share,
of Fleet (the "Fleet Common Stock") in connection with the satisfaction by Fleet
of its obligations under any employee benefit plans or any other contractual
obligation of Fleet (other than a contractual obligation ranking pari passu with
or junior to the Junior Subordinated Debentures), (y) as a result of a
reclassification of Fleet capital stock or the exchange or conversion of one
class or series of Fleet capital stock for another class or series of Fleet
capital stock or (z) the purchase of fractional interests in shares of Fleet
capital stock pursuant to the conversion or exchange provisions of such Fleet
capital stock or the security being converted or exchanged) or make any
guarantee payments with respect to the foregoing, and (b) Fleet shall not make
any payment of interest, principal or premium, if any, on or repay, repurchase
or redeem any debt securities (including guarantees) issued by Fleet which rank
pari passu with or junior to such Junior Subordinated Debentures.
In the event Junior Subordinated Debentures are issued to a Fleet Capital
Trust or a trustee of such trust in connection with the issuance of Trust
Securities of such Fleet Capital Trust, for so long as such Trust Securities
remain outstanding, Fleet will covenant (i) to directly or indirectly maintain
100 percent ownership of the Common Securities of such Fleet Capital Trust;
provided, however, that any permitted successor of Fleet under the Indenture may
succeed to Fleet's ownership of such Common Securities, (ii) to use its
reasonable efforts to cause such Fleet Capital Trust (a) to remain a statutory
business trust, except in connection with the distribution of Junior
Subordinated Debentures to the holders of Trust Securities in liquidation of
such Fleet Capital Trust, the redemption of all of the Trust Securities of such
Fleet Capital Trust, or certain mergers, consolidations or amalgamations, each
as permitted by the Declaration of such Fleet Capital Trust, and (b) to continue
not to be classified as an association taxable as a corporation or a partnership
for United States federal income tax purposes and (iii) to use its reasonable
efforts to cause each holder of Trust Securities to be treated as owning an
undivided beneficial interest in the Junior Subordinated Debentures. (Section
3.09)
LIMITATION ON MERGERS AND SALES OF ASSETS
Fleet shall not consolidate with, or merge into, any corporation or convey
or transfer its properties and assets substantially as an entirety to any Person
unless (a) the successor entity shall be a corporation organized under the laws
of any domestic jurisdiction and shall expressly assume the obligations of Fleet
under the Indenture and (b) after giving effect thereto, no Default shall have
occurred and be continuing under the Indenture. (Section 10.01)
EVENTS OF DEFAULT, WAIVER AND NOTICE
The Indenture provides that any one or more of the following described
events which has occurred and is continuing constitutes an "Indenture Event of
Default" with respect to each series of Junior Subordinated Debentures:
(a) default for 30 days in payment of any interest on the Junior
Subordinated Debentures of that series, including any Additional
Interest in respect thereof, when due; provided, however, that a
valid extension of the interest payment period by the Company
shall not constitute a default in the payment of interest for this
purpose; or
(b) default in payment of principal and premium, if any, on the
Junior Subordinated Debentures of that series when due either at
maturity, upon redemption, by declaration or otherwise; provided,
however, that a valid extension of the maturity of such Junior
Subordinated Debentures shall not constitute a default for this
purpose; or
(c) default by the Company in the performance of any other of the
covenants or agreements in the Indenture which shall not have been
remedied for a period of 90 days after notice; or
9
<PAGE>
(d) certain events of bankruptcy, insolvency or reorganization of
Fleet; or
(e) in the event Junior Subordinated Debentures are issued to a
Fleet Capital Trust or a trustee of such trust in connection with
the issuance of Trust Securities by such Fleet Capital Trust, the
voluntary or involuntary dissolution, winding-up or termination of
such Fleet Capital Trust, except in connection with the
distribution of Junior Subordinated Debentures to the holders of
Trust Securities in liquidation of such Fleet Capital Trust, the
redemption of all of the Trust Securities of such Fleet Capital
Trust, or certain mergers, consolidations or amalgamations, each
as permitted by the Declaration of such Fleet Capital Trust.
The Indenture provides that, if an Indenture Event of Default on any series
of Junior Subordinated Debentures shall have occurred and be continuing, either
the Debt Trustee or the holders of not less than 25 percent in aggregate
principal amount of the Junior Subordinated Debentures of such series then
outstanding may declare the principal of all such Junior Subordinated Debentures
of such series to be due and payable immediately. The holders of a majority in
aggregate outstanding principal amount of such series of Junior Subordinated
Debentures may annul such declaration and waive the default if the default
(other than the non-payment of the principal of such series of Junior
Subordinated Debentures which has become due solely by such acceleration) has
been cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by accleration has been deposited with the Debt
Trustee. (Section 5.01).
The holders of a majority in principal amount of the Junior Subordinated
Debentures of any and all series affected and then outstanding shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Debt Trustee under the Indenture, provided that the
holders of the Junior Subordinated Debentures shall have offered to the Debt
Trustee reasonable indemnity against expenses and liabilities. (Sections 5.07
and 5.04). Notwithstanding the foregoing, subject to the subordination
provisions set forth in a Prospectus Supplement, the right of any holder of
Junior Subordinated Debentures to receive payment of the principal of and
interest on such Junior Subordinated Debentures on or after the due dates
therefor, as the same may be extended in accordance with the terms of such
Junior Subordinated Debentures, or to institute suit for the enforcement of any
such payment provisions, shall not be impaired or affected without the consent
of such holder.
The Indenture requires the annual filing by Fleet with the Debt Trustee of a
certificate as to the absence of certain defaults under the Indenture. (Section
3.07)
The Indenture provides that the Debt Trustee may withhold notice of an
Indenture Event of Default from the holders of a series of Junior Subordinated
Debentures (except an Indenture Event of Default in payment of principal of, or
of interest or premium on, the Junior Subordinated Debentures) if the Trustee
considers it in the interest of such holders to do so. (Section 5.08)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Debt
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Junior Subordinated Debentures of all series affected by
such modification at the time outstanding, to modify the Indenture or any
supplemental indenture or the rights of the holders of the Junior Subordinated
Debentures; provided that no such modification shall (i) extend the fixed
maturity of any Security, or reduce the principal amount thereof (including in
the case of a discounted Security the amount payable thereon in the event of
acceleration or the amount provable in bankruptcy) or any redemption premium
thereon, or reduce the rate or extend the time of payment of interest thereon,
or make the principal of, or interest or premium on, the Junior Subordinated
Debentures payable in any coin or currency other than that provided in the
Junior Subordinated Debentures, or impair or affect the right of any holder of
Junior Subordinated Debentures to institute suit for the payment thereof or the
right of prepayment, if any, at the option of the holder,
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without the consent of the holder of each Security so affected, or (ii) reduce
the aforesaid percentage of Junior Subordinated Debentures the consent of the
holders of which is required for any such modification without the consent of
the holders of each Security affected. (Section 9.02)
DEFEASANCE AND DISCHARGE
The Indenture provides that Fleet, at Fleet's option: (a) will be Discharged
from any and all obligations in respect of the Junior Subordinated Debentures of
a series (except for certain obligations to register the transfer or exchange of
Junior Subordinated Debentures, replace stolen, lost or mutilated Junior
Subordinated Debentures, maintain paying agencies and hold moneys for payment in
trust) or (b) need not comply with certain restrictive covenants of the
Indenture (including those described herein under "Certain Covenants of Fleet"),
in each case if Fleet deposits, in trust with the Debt Trustee or the Defeasance
Agent, money or U.S. Government Obligations which through the payment of
interest thereon and principal thereof in accordance with their terms will
provide money, in an amount sufficient to pay all the principal (including any
mandatory sinking fund payments) of, and interest and premium, if any, on, the
Junior Subordinated Debentures of such series on the dates such payments are due
in accordance with the terms of such Junior Subordinated Debentures. To exercise
any such option, Fleet is required to deliver to the Debt Trustee and the
Defeasance Agent, if any, an opinion of counsel to the effect that (i) the
deposit and related defeasance would not cause the holders of the Junior
Subordinated Debentures of such series to recognize income, gain or loss for
U.S. federal income tax purposes and, in the case of a Discharge pursuant to
clause (a), such opinion shall be accompanied by a private letter ruling to the
effect received by Fleet from the United States Internal Revenue Service or a
revenue ruling pertaining to a comparable form of transaction to the effect
published by the United States Internal Revenue Service, and (ii) if listed on
any national securities exchange, such Junior Subordinated Debentures would not
be delisted from such exchange as a result of the exercise of such option.
(Section 11.05)
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by,
and construed in accordance with, the internal laws of the State of New York.
(Section 13.05)
THE DEBT TRUSTEE
Fleet or its affiliates maintain certain accounts and other banking
relationships with the Debt Trustee and its affiliates in the ordinary course of
business.
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DESCRIPTION OF THE PREFERRED SECURITIES
Each Fleet Capital Trust may issue, from time to time, only one series of
Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each Fleet Capital Trust authorizes the
Regular Trustees of such Fleet Capital Trust to issue on behalf of such Fleet
Capital Trust one series of Preferred Securities. The Declaration will be
qualified as an indenture under the Trust Indenture Act. The First National Bank
of Chicago will act as Indenture Trustee for purposes of the Trust Indenture
Act. The Preferred Securities will have such terms, including distributions,
redemption, voting, liquidation rights and such other preferred, deferred or
other special rights or such restrictions as shall be set forth in the
Declaration or made part of the Declaration by the Trust Indenture Act and which
will mirror the terms of the Junior Subordinated Debentures held by the Fleet
Capital Trust and described in the Prospectus Supplement relating thereto.
Reference is made to the Prospectus Supplement relating to the Preferred
Securities of the Fleet Capital Trust for specific terms, including (i) the
distinctive designation of such Preferred Securities; (ii) the number of
Preferred Securities issuable by such Fleet Capital Trust; (iii) the annual
distribution rate (or method of determining such rate) for Preferred Securities
issued by such Fleet Capital Trust and the date or dates upon which such
distributions shall be payable; (iv) whether distributions on Preferred
Securities issued by such Fleet Capital Trust shall be cumulative, and, in the
case of Preferred Securities having such cumulative distribution rights, the
date or dates or method of determining the date or dates from which
distributions on Preferred Securities issued by such Fleet Capital Trust shall
be cumulative; (v) the amount or amounts which shall be paid out of the assets
of such Fleet Capital Trust to the holders of Preferred Securities of such Fleet
Capital Trust upon voluntary or involuntary dissolution, winding-up or
termination of such Fleet Capital Trust; (vi) the obligation, if any, of such
Fleet Capital Trust to purchase or redeem Preferred Securities issued by such
Fleet Capital Trust and the price or prices at which, the period or periods
within which, and the terms and conditions upon which, Preferred Securities
issued by such Fleet Capital Trust shall be purchased or redeemed, in whole or
in part, pursuant to such obligation; (vii) the voting rights, if any, of
holders of Preferred Securities issued by such Fleet Capital Trust in addition
to those required by law, including the number of votes per Preferred Security
and any requirement for the approval by the holders of Preferred Securities, or
of Preferred Securities issued by one or more Fleet Capital Trusts, or of both,
as a condition to specified action or amendments to the Declaration of such
Fleet Capital Trust; (viii) the terms and conditions, if any, upon which the
Junior Subordinated Debentures owned by such Fleet Capital Trust may be
distributed to holders of Preferred Securities of such Trust; (ix) if
applicable, any securities exchange upon which the Preferred Securities shall be
listed; and (x) any other relevant rights, preferences, privileges, limitations
or restrictions of Preferred Securities issued by such Fleet Capital Trust not
inconsistent with the Declaration of such Fleet Capital Trust or with applicable
law. All Preferred Securities offered hereby will be guaranteed by Fleet to the
extent set forth below under "Description of the Preferred Securities
Guarantees." Certain United States federal income tax considerations applicable
to any offering of Preferred Securities will be described in the Prospectus
Supplement relating thereto.
In connection with the issuance of Preferred Securities, each Fleet Capital
Trust will issue one series of Common Securities. The Declaration of each Fleet
Capital Trust authorizes the Regular Trustees of such trust to issue on behalf
of such Fleet Capital Trust one series of Common Securities having such terms
including distributions, redemption, voting, liquidation rights or such
restrictions as shall be set forth therein. Except for voting rights, the terms
of the Common Securities issued by a Fleet Capital Trust will be substantially
identical to the terms of the Preferred Securities issued by such Trust and the
Common Securities will rank pari passu, and payments will be made thereon pro
rata, with the Preferred Securities except that, upon an event of default under
the Declaration, the rights of the holders of the Common Securities to payment
in respect of distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the Preferred
Securities. Except in certain limited circumstances, the Common Securities of a
Fleet Capital Trust will also carry the right to vote to appoint, remove or
replace any of the Fleet Capital Trustees of such Trust. All of the Common
Securities of each Fleet Capital Trust will be directly or indirectly owned by
Fleet.
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ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF TRUST PREFERRED SECURITIES
If an Event of Default under the Declaration of a Fleet Capital Trust occurs
and is continuing, then the holders of Preferred Securities of such Fleet
Capital Trust would rely on the enforcement by the Institutional Trustee of its
rights as a holder of the applicable series of Junior Subordinated Debentures
against Fleet. In addition, the holders of a majority in liquidation amount of
the Preferred Securities of such Fleet Capital Trust will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Institutional Trustee or to direct the exercise of any trust or
power conferred upon the Institutional Trustee under the applicable Declaration,
including the right to direct the Institutional Trustee to exercise the remedies
available to it as a holder of Junior Subordinated Debentures. If the
Institutional Trustee fails to enforce its rights under the applicable series of
Junior Subordinated Debentures, a holder of Preferred Securities of such Fleet
Capital Trust may institute a legal proceeding directly against Fleet to enforce
the Institutional Trustee's rights under the applicable series of Junior
Subordinated Debentures without first instituting any legal proceeding against
the Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if an Event of Default under the applicable Declaration has occurred
and is continuing and such event is attributable to the failure of Fleet to pay
interest or principal on the applicable series of Junior Subordinated Debentures
on the date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a holder of Preferred Securities of
such Fleet Capital Trust may directly institute a proceeding for enforcement of
payment to such holder of the principal of or interest on the applicable series
of Junior Subordinated Debentures having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such holder (a
"Direct Action") on or after the respective due date specified in the applicable
series of Junior Subordinated Debentures. In connection with such Direct Action,
Fleet will be subrogated to the rights of such holder of Preferred Securities
under the applicable Declaration to the extent of any payment made by Fleet to
such holder of Preferred Securities in such Direct Action.
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DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
Set forth below is a summary of information concerning the Preferred
Securities Guarantees which will be executed and delivered by Fleet for the
benefit of the holders from time to time of Preferred Securities. Each Preferred
Securities Guarantee will be qualified as an indenture under the Trust Indenture
Act. The First National Bank of Chicago will act as indenture trustee under each
Preferred Securities Guarantee for purposes of the Trust Indenture Act (the
"Preferred Guarantee Trustee"). The terms of each Preferred Securities Guarantee
will be those set forth in such Preferred Securities Guarantee and those made
part of such Preferred Securities Guarantee by the Trust Indenture Act. The
summary of the material terms of the Preferred Securities Guarantees does not
purport to be complete and is subject in all respects to the provisions of, and
is qualified in its entirety by reference to, the form of Preferred Securities
Guarantee, which is filed as an exhibit to the Registration Statement of which
this Prospectus forms a part, and the Trust Indenture Act. Each Preferred
Securities Guarantee will be held by the Preferred Guarantee Trustee for the
benefit of the holders of the Preferred Securities of the applicable Fleet
Capital Trust.
GENERAL
Pursuant to each Preferred Securities Guarantee, Fleet will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full, to the
holders of the Preferred Securities issued by a Fleet Capital Trust, the
Guarantee Payments (as defined herein) (except to the extent paid by such Fleet
Capital Trust), as and when due, regardless of any defense, right of set-off or
counterclaim which such Fleet Capital Trust may have or assert. The following
payments with respect to Preferred Securities issued by a Fleet Capital Trust,
to the extent not paid by such Fleet Capital Trust (the "Guarantee Payments"),
will be subject to the Preferred Securities Guarantee thereon (without
duplication): (i) any accrued and unpaid distributions which are required to be
paid on such Preferred Securities, to the extent such Fleet Capital Trust shall
have funds available therefor; (ii) the redemption price, including all accrued
and unpaid distributions to the date of payment (the "Redemption Price"), to the
extent such Fleet Capital Trust has funds available therefor with respect to any
Preferred Securities called for redemption by such Fleet Capital Trust; and
(iii) upon a voluntary or involuntary dissolution, winding-up or termination of
such Fleet Capital Trust (other than in connection with the distribution of
Junior Subordinated Debentures to the holders of Preferred Securities or the
redemption of all of the Preferred Securities), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid distributions on such
Preferred Securities to the date of payment, to the extent such Fleet Capital
Trust has funds available therefor and (b) the amount of assets of such Fleet
Capital Trust remaining available for distribution to holders of such Preferred
Securities in liquidation of such Fleet Capital Trust. The redemption price and
liquidation amount will be fixed at the time the Preferred Securities are
issued. Fleet's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by Fleet to the holders of Preferred
Securities or by causing the applicable Fleet Capital Trust to pay such amounts
to such holders.
The Preferred Securities Guarantees will not apply to any payment of
distributions except to the extent a Fleet Capital Trust shall have funds
available therefor. If Fleet does not make interest payments on the Junior
Subordinated Debentures purchased by a Fleet Capital Trust, such Fleet Capital
Trust will not pay distributions on the Preferred Securities issued by such
Fleet Capital Trust and will not have funds available therefor.
The Preferred Securities Guarantees, when taken together with Fleet's
obligations under the Junior Subordinated Debentures, the Indenture and the
Declarations, including its obligations to pay costs, expenses, debts and
liabilities of the Fleet Capital Trusts (other than with respect to the Trust
Securities), will provide a full and unconditional guarantee on a subordinated
basis by Fleet of payments due on the Preferred Securities.
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Fleet has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Fleet Capital Trusts with respect to the Common
Securities (the "Common Securities Guarantees") to the same extent as the
Preferred Securities Guarantees, except that upon an event of default under the
Indenture, holders of Preferred Securities shall have priority over holders of
Common Securities with respect to distributions and payments on liquidation,
redemption or otherwise.
CERTAIN COVENANTS OF FLEET
In each Preferred Securities Guarantee, Fleet will covenant that, so long as
any Preferred Securities issued by the applicable Fleet Capital Trust remain
outstanding, if there shall have occurred any event that would constitute an
event of default under such Preferred Securities Guarantee or the Declaration of
such Fleet Capital Trust, then (a) Fleet shall not declare or pay any dividend
on, make any distributions with respect to, or redeem, purchase or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of Fleet Common Stock in connection with the
satisfaction by Fleet of its obligations under any employee benefit plans or any
other contractual obligation of Fleet (other than a contractual obligation
running pari passu with or junior to the Junior Subordinated Debentures), (ii)
as a result of a reclassification of Fleet capital stock or the exchange or
conversion of one class or series of Fleet capital stock for another class or
series of Fleet capital stock or, (iii) the purchase of fractional interests in
shares of Fleet capital stock pursuant to the conversion or exchange provisions
of such Fleet capital stock or the security being converted or exchanged) or
make any guarantee payments with respect to the foregoing and (b) Fleet shall
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by Fleet
which rank pari passu with or junior to such Junior Subordinated Debentures.
MODIFICATION OF THE PREFERRED SECURITIES GUARANTEES; ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of Preferred Securities (in which case no vote will be required),
each Preferred Securities Guarantee may be amended only with the prior approval
of the holders of not less than a majority in liquidation amount of the
outstanding Preferred Securities issued by the applicable Fleet Capital Trust.
The manner of obtaining any such approval of holders of such Preferred
Securities will be as set forth in an accompanying Prospectus Supplement. All
guarantees and agreements contained in a Preferred Securities Guarantee shall
bind the successors, assigns, receivers, trustees and representatives of Fleet
and shall inure to the benefit of the holders of the Preferred Securities of the
applicable Fleet Capital Trust then outstanding.
TERMINATION
Each Preferred Securities Guarantee will terminate as to the Preferred
Securities issued by the applicable Fleet Capital Trust (a) upon full payment of
the Redemption Price of all Preferred Securities of such Fleet Capital Trust,
(b) upon distribution of the Junior Subordinated Debentures held by such Fleet
Capital Trust to the holders of the Trust Securities of such Fleet Capital Trust
or (c) upon full payment of the amounts payable in accordance with the
Declaration of such Fleet Capital Trust upon liquidation of such Fleet Capital
Trust. Each Preferred Securities Guarantee will continue to be effective or will
be reinstated, as the case may be, if at any time any holder of Preferred
Securities issued by the applicable Fleet Capital Trust must restore payment of
any sums paid under such Preferred Securities or such Preferred Securities
Guarantee.
EVENTS OF DEFAULT
An event of default under a Preferred Securities Guarantee will occur upon
the failure of the Company to perform any of its payment obligations thereunder.
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The holders of a majority in liquidation amount of the Preferred Securities
relating to such Preferred Securities Guarantee have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee in respect of the Preferred Securities Guarantee
or to direct the exercise of any trust or power conferred upon the Preferred
Guarantee Trustee under such Preferred Securities. Any holder of Preferred
Securities relating to such Preferred Securities Guarantee may institute a legal
proceeding directly against Fleet to enforce the Preferred Guarantee Trustee's
rights under such Preferred Securities Guarantee, without first instituting a
legal proceeding against the relevant Fleet Capital Trust, the Preferred
Guarantee Trustee or any other person or entity.
STATUS OF THE PREFERRED SECURITIES GUARANTEES
The Preferred Securities Guarantees will constitute unsecured obligations of
Fleet and will rank (i) subordinate and junior in right of payment to all other
liabilities of Fleet, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by Fleet and with any guarantee now or
hereafter entered into by Fleet in respect of any preferred or preference stock
of any affiliate of Fleet, and (iii) senior to Fleet Common Stock. The terms of
the Preferred Securities provide that each holder of Preferred Securities issued
by the applicable Fleet Capital Trust by acceptance thereof agrees to the
subordination provisions and other terms of the Preferred Securities Guarantee
relating thereto.
The Preferred Securities Guarantees will constitute a guarantee of payment
and not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the guarantor to enforce its rights under the
Preferred Securities Guarantee without instituting a legal proceeding against
any other person or entity).
INFORMATION CONCERNING THE PREFERRED GUARANTEE TRUSTEE
The Preferred Securities Guarantee Trustee, prior to the occurrence of a
default with respect to a Preferred Securities Guarantee, undertakes to perform
only such duties as are specifically set forth in such Preferred Securities
Guarantee and, after default, shall exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provisions, the Preferred Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by a Preferred Securities
Guarantee at the request of any holder of Preferred Securities, unless offered
reasonable indemnity against the costs, expenses and liabilities which might be
incurred thereby.
Fleet or its affiliates maintain certain accounts and other banking
relationships with the Preferred Guarantee Trustee and its affiliates in the
ordinary course of business.
GOVERNING LAW
The Preferred Securities Guarantees will be governed by and construed in
accordance with the internal laws of the State of New York.
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EFFECT OF OBLIGATIONS UNDER THE
JUNIOR SUBORDINATED DEBENTURES AND THE PREFERRED SECURITIES GUARANTEE
As set forth in the Declaration, the sole purpose of each of the Fleet
Capital Trusts is to issue the Trust Securities evidencing undivided beneficial
interests in the assets of each of the Fleet Capital Trusts, and to invest the
proceeds from such issuance and sale in Junior Subordinated Debentures.
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debentures held by a Fleet Capital Trust, such payments will
be sufficient to cover distributions and payments due on the Trust Securities of
such Trust because of the following factors: (i) the aggregate principal amount
of such Junior Subordinated Debentures will be equal to the sum of the aggregate
stated liquidation amount of the Trust Securities; (ii) the interest rate and
the interest and other payment dates on such Junior Subordinated Debentures will
match the distribution rate and distribution and other payment dates for the
Preferred Securities; (iii) Fleet shall pay all, and the Fleet Capital Trust
shall not be obligated to pay, directly or indirectly, all costs, expenses, debt
and obligations of such Fleet Capital Trust (other than with respect to the
Trust Securities); and (iv) the Declaration further provides that the Fleet
Capital Trustees shall not take or cause or permit the Fleet Capital Trust to,
among other things, engage in any activity that is not consistent with the
purposes of such Fleet Capital Trust. Payments of distributions (to the extent
funds therefor are available) and other payments due on the Preferred Securities
(to the extent funds therefor are available) are guaranteed by Fleet as and to
the extent set forth under "Description of the Preferred Securities Guarantees."
If Fleet does not make interest payments on the Junior Subordinated Debentures
purchased by the applicable Fleet Capital Trust, the applicable Fleet Capital
Trust will not have sufficient funds to pay distributions on the Preferred
Securities. The Preferred Securities Guarantee does not apply to any payment of
distributions unless and until the applicable Fleet Capital Trust has sufficient
funds for the payment of such distributions. The Preferred Securities Guarantee
covers the payment of distributions and other payments on the Preferred
Securities only if and to the extent that Fleet has made a payment of interest
or principal on the Junior Subordinated Debentures held by the applicable Fleet
Capital Trust as its sole asset. The Preferred Securities Guarantee, when taken
together with Fleet's obligations under the Junior Subordinated Debentures and
the Indenture and its obligations under the Declaration, including its
obligations to pay costs, expenses, debts and liabilities of the applicable
Fleet Capital Trust (other than with respect to the Trust Securities), provide a
full and unconditional guarantee of amounts on the Preferred Securities.
If Fleet fails to make interest or other payments on a series of Junior
Subordinated Debentures when due (taking account of any Extension Period), the
Declarations provide a mechanism whereby the holders of the Preferred Securities
affected thereby, using the procedures described in any accompanying Prospectus
Supplement, may direct the Institutional Trustee to enforce its rights under the
Junior Subordinated Debentures. If the Institutional Trustee fails to enforce
its rights under the Junior Subordinated Debentures, a holder of Preferred
Securities of a Trust may institute a legal proceeding against Fleet to enforce
the Institutional Trustee's rights under the Junior Subordinated Debentures
owned by such Trust without first instituting any legal proceeding against the
Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of Fleet to pay interest or principal
on Junior Subordinated Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption on the redemption date), then a
holder of Preferred Securities of a Trust may institute a Direct Action for
payment on or after the respective due date specified in the Junior Subordinated
Debentures owned by such Trust. In connection with such Direct Action, Fleet
will be subrogated to the rights of such holder of Preferred Securities under
the Declaration to the extent of any payment made by Fleet to such holder of
Preferred Securities in such Direct Action. Fleet, under the Preferred
Securities Guarantee, acknowledges that the Guarantee Trustee shall enforce the
Preferred Securities Guarantee on behalf of the holders of the Preferred
Securities. If Fleet fails to make payments under the Preferred Securities
Guarantee, the Preferred Securities Guarantee provides a mechanism whereby the
holders of the Preferred Securities may
17
<PAGE>
direct the Guarantee Trustee to enforce its rights thereunder. Any holder of
Preferred Securities may institute a legal proceeding directly against Fleet to
enforce the Guarantee Trustee's rights under the Preferred Securities Guarantee
without first instituting a legal proceeding against the applicable Fleet
Capital Trust, the Guarantee Trustee, or any other person or entity.
Fleet and each of the Fleet Capital Trusts believe that the above mechanisms
and obligations, taken together, provide a full and unconditional guarantee by
Fleet of payments due on the Preferred Securities. See "Description of the
Preferred Securities Guarantees--General."
PLAN OF DISTRIBUTION
Fleet may sell the Junior Subordinated Debentures and any Fleet Capital
Trust may sell Preferred Securities in any of, or any combination of, the
following ways: (i) directly to purchasers, (ii) through agents and (iii)
through underwriters or dealers. Such underwriters, dealers or agents may be
affiliates of Fleet, and offers or sales of such securities may include
secondary market transactions by affiliates of Fleet.
Offers to purchase Offered Securities may be solicited directly by Fleet
and/or any Fleet Capital Trust, as the case may be, or by agents designated by
Fleet and/or any Fleet Capital Trust, as the case may be, from time to time. Any
such agent, who may be deemed to be an underwriter as that term is defined in
the Securities Act, involved in the offer or sale of the Offered Securities in
respect of which this Prospectus is delivered will be named, and any commissions
payable by Fleet to such agent will be set forth, in the Prospectus Supplement.
Unless otherwise indicated in the Prospectus Supplement, any such agency will be
acting on a best efforts basis for the period of its appointment (ordinarily
five business days or less). Agents, dealers and underwriters may be customers
of, engage in transactions with, or perform services for Fleet in the ordinary
course of business.
If an underwriter or underwriters are utilized in the sale, Fleet will
execute an underwriting agreement with such underwriters at the time of sale to
them and the names of the underwriters and the terms of the transaction will be
set forth in the Prospectus Supplement, which will be used by the underwriters
to make releases of the Offered Securities in respect of which this Prospectus
is delivered to the public.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, Fleet and/or any Fleet Capital Trust, as the
case may be, will sell such Offered Securities to the dealer, as principal. The
dealer may then resell such Offered Securities to the public at varying prices
to be determined by such dealer at the time of resale. The name of the dealer
and the terms of the transaction will be set forth in the Prospectus Supplement.
Agents, underwriters, and dealers may be entitled under the relevant agreements
to indemnification by Fleet and/or any Fleet Capital Trust, as the case may be,
against certain liabilities, including liabilities under the Securities Act.
This Prospectus and related Prospectus Supplement may be used by direct or
indirect subsidiaries of Fleet in connection with offers and sales related to
secondary market transactions. Such subsidiaries may act as principal or agent
in such transactions. Such sales may be made at prices related to prevailing
market prices at the time of sale.
The participation of an affiliate or subsidiary of Fleet in the offer and
sale of the Offered Securities will comply with the requirements of Rule 2720 of
the By-laws of the National Association of Securities Dealers, Inc. (the "NASD")
regarding underwriting securities of the affiliate. No NASD member participating
in offers and sales will execute a transaction in the Securities in a
discretionary account without the prior written specific approval of the
member's customer.
Underwriters, agents or their controlling persons may engage in transactions
with and perform services for Fleet in the ordinary course of business.
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LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon on behalf of the Trust by Skadden, Arps, Slate,
Meagher & Flom (Delaware), special Delaware counsel to the Trust. The validity
of the Junior Subordinated Debentures and the Guarantee and certain matters
relating thereto will be passed upon for Fleet and certain United States federal
income taxation matters will be passed upon for Fleet and the Fleet Capital
Trusts by Edwards & Angell, One Hospital Trust Plaza, Providence, Rhode Island
02903. V. Duncan Johnson, a partner of Edwards & Angell, is a director of Fleet
National Bank and beneficially owns 4,052 shares of Fleet Common Stock. Certain
legal matters will be passed upon for the Underwriters by Skadden, Arps, Slate,
Meagher & Flom LLP, New York, New York.
EXPERTS
The consolidated financial statements of Fleet appearing in Fleet's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995, incorporated by
reference herein (and elsewhere in the Registration Statement) have been
incorporated by reference herein (and elsewhere in the Registration Statement)
in reliance upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, and upon the authority of said firm as experts in accounting
and auditing. The report of KPMG Peat Marwick LLP refers to changes in the
methods of accounting for mortgage servicing rights, investments in debt and
equity securities and income taxes.
The consolidated financial statements of National Westminster Bancorp, Inc.
(as of December 31, 1995 and 1994 and for each of the years in the three-year
period ended December 31, 1995) appearing in Fleet's Current Report on Form 8-K
dated March 25, 1996, have been incorporated by reference herein in reliance
upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, and upon the authority of said firm as experts in accounting and
auditing. The report of KPMG Peat Marwick LLP refers to changes in the methods
of accounting for investments and accounting for post-retirement benefits other
than pensions.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY FLEET FINANCIAL GROUP, INC., THE TRUSTS OR THE
UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF FLEET FINANCIAL GROUP, INC. OR THE TRUSTS SINCE THE DATE HEREOF. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Risk Factors.............................................................. S-4
Fleet Financial Group, Inc................................................ S-8
Fleet Capital............................................................. S-9
Selected Consolidated Financial Data
Fleet Financial Group, Inc.............................................. S-10
Recent Developments....................................................... S-12
Capitalization............................................................ S-13
Accounting Treatment...................................................... S-14
Use of Proceeds........................................................... S-14
Description of the Preferred Securities................................... S-15
Description of the Guarantee.............................................. S-26
Description of the Junior Subordinated Debentures......................... S-27
Effect of Obligations Under the Junior Subordinated Debentures and the
Guarantee............................................................... S-33
United States Federal Income Taxation..................................... S-34
Underwriting.............................................................. S-38
PROSPECTUS
Available Information..................................................... 2
Incorporation of Documents by Reference................................... 3
Fleet Financial Group, Inc................................................ 4
The Trusts................................................................ 5
Consolidated Ratio of Earnings to Fixed Charges........................... 6
Use of Proceeds........................................................... 6
Description of the Junior Subordinated Debentures......................... 7
Description of the Preferred Securities................................... 12
Description of the Preferred Securities Guarantees........................ 14
Effect of Obligations Under the Junior Subordinated Debentures and the
Preferred Securities Guarante........................................... 17
Plan of Distribution...................................................... 18
Legal Matters............................................................. 19
Experts................................................................... 19
</TABLE>
PREFERRED SECURITIES
FLEET CAPITAL TRUST I
FLEET CAPITAL TRUST II
FLEET CAPITAL TRUST III
FLEET CAPITAL TRUST IV
FLEET CAPITAL TRUST V
% TRUST ORIGINATED
PREFERRED SECURITIES-SM- ("TOPRS-SM-")
FULLY AND UNCONDITIONALLY
GUARANTEED BY
FLEET FINANCIAL GROUP, INC.
---------------------
PROSPECTUS SUPPLEMENT
---------------------
MERRILL LYNCH & CO.
NOVEMBER , 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to the Registration Statement on Form S-3
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Boston, The Commonwealth of Massachusetts, on November 6, 1996.
FLEET FINANCIAL GROUP, INC.
By: /s/ WILLIAM C. MUTTERPERL
-----------------------------------------
William C. Mutterperl
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement on Form S-3 has been signed by the following
persons in the capacities indicated on November 6, 1996.
SIGNATURE TITLE
- ------------------------------ ---------------------------
* Chairman and Director
- ------------------------------
Joel Alvord
* President, Chief Executive
- ------------------------------ Officer and Director
Terrence Murray
* Executive Vice President
- ------------------------------ and Chief Financial
Eugene M. McQuade Officer
* Chief Accounting Officer
- ------------------------------ and Controller
Robert C. Lamb, Jr.
* Director
- ------------------------------
William Barnet, III
Director
- ------------------------------
Bradford R. Boss
* Director
- ------------------------------
Stillman B. Brown
* Director
- ------------------------------
Paul J. Choquette, Jr.
* Director
- ------------------------------
John T. Collins
II-1
<PAGE>
SIGNATURE TITLE
- ------------------------------ ---------------------------
* Director
- ------------------------------
Bernard M. Fox
* Director
- ------------------------------
James F. Hardymon
* Director
- ------------------------------
Robert M. Kavner
* Director
- ------------------------------
Raymond C. Kennedy
* Director
- ------------------------------
Robert J. Matura
* Director
- ------------------------------
Arthur C. Milot
* Director
- ------------------------------
Thomas D. O'Connor
* Director
- ------------------------------
Michael B. Picotte
* Director
- ------------------------------
Lois D. Rice
* Director
- ------------------------------
John R. Riedman
* Director
- ------------------------------
John S. Scott
* Director
- ------------------------------
Samuel O. Thier
* Director
- ------------------------------
Paul R. Tregurtha
/s/ WILLIAM C. MUTTERPERL
----------------------------------------
William C. Mutterperl, Secretary
*By: ATTORNEY-IN-FACT
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Trust has
duly caused this Amendment No. 1 to the Registration Statement on Form S-3 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boston, The Commonwealth of Massachusetts, on November 6, 1996.
<TABLE>
<S> <C> <C>
FLEET CAPITAL TRUST I
FLEET CAPITAL TRUST II
FLEET CAPITAL TRUST III
FLEET CAPITAL TRUST IV
FLEET CAPITAL TRUST V
By: /s/ JOHN R. RODEHORST
------------------------------------------
John R. Rodehorst
Trustee
</TABLE>
II-3
