Filed Pursuant to Rule 424(b)(5)
Registration No. 333-00701
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH 25, 1996)
$300,000,000
FLEET FINANCIAL GROUP, INC.
RETAIL MEDIUM-TERM NOTESM SECURITIES
SENIOR RETAIL MEDIUM-TERM NOTES, SERIES J
SUBORDINATED RETAIL MEDIUM-TERM NOTES, SERIES K
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
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Fleet Financial Group, Inc., a Rhode Island corporation ("Fleet"), may offer
from time to time up to $300,000,000 aggregate initial public offering price of
Retail Medium-Term NoteSM securities as a class of its debt securities entitled
the Senior Retail Medium-Term Notes, Series J (the "Senior Notes") and the
Subordinated Retail Medium-Term Notes, Series K (the "Subordinated Notes", and
together with the Senior Notes, collectively, (the "Notes" or the "Retail
Medium-Term Notes"). Each Note will mature nine months or longer from its date
of issue, as agreed to by the purchaser and Fleet.
The payment of the principal of and interest on the Subordinated Notes will,
to the extent set forth in the Subordinated Indenture (as hereinafter defined)
be subordinated in right of payment to the prior payment in full of all Senior
Indebtedness (as defined in the Subordinated Indenture). Fleet's obligations
under the Subordinated Notes shall rank pari passu in right of payment with
other Subordinated Debt Securities and with the Existing Subordinated
Indebtedness, subject to the obligations of the Holders of Subordinated Notes to
pay over any Excess Proceeds to Entitled Persons in respect of Other Financial
Obligations as provided in the Subordinated Indenture (see "Description of Debt
Securities--Subordinated Debt Securities" in the Prospectus). Indebtedness of
Fleet senior to the Subordinated Notes, at December 31, 1995, totalled
approximately $1,815,100,000. Payment of principal of the Subordinated Notes may
be accelerated only in case of bankruptcy, insolvency or reorganization of
Fleet. There is no right of accleration of the payment of principal of the
Subordinated Notes upon a default in the payment of principal of or interest on
such Subordinated Notes or in the performance of any covenant of Fleet contained
in the Subordinated Indenture. See "Description of Debt Securities--Subordinated
Debt Securities" in the Prospectus.
(continued on next page)
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THE NOTES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK
OR NON-BANK SUBSIDIARY OF FLEET AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION BANK INSURANCE FUND
OR ANY OTHER GOVERNMENT AGENCY.
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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, THE PROSPECTUS OR ANY SUPPLEMENT HERETO. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO AGENTS' DISCOUNTS PROCEEDS TO
PUBLIC(1) AND COMMISSIONS(2) COMPANY(2)(3)
<S> <C> <C> <C>
Per Note............... 100% .20%-3.00% 99.80%-97.00%
Total.................. $300,000,000 $600,000-$9,000,000 $299,400,000-$291,000,000
</TABLE>
(1) Unless otherwise specified in the applicable Pricing Supplement, each Note
will be issued at 100% of its principal amount.
(2) Fleet will pay Smith Barney Inc., as agent (the "Agent"), a commission (or
grant a discount) ranging from .20% to 3.00% of the principal amount of any
Note, depending on its maturity, sold through the Agent (or sold to the
Agent as principal in circumstances in which no other discount is agreed).
The Company also may sell Notes to the Agent, as principal, for resale to
one or more investors and other purchasers at varying prices relating to
prevailing market prices at the time of resale, as determined by the Agent,
or if so agreed, at a fixed public offering price.
(3) Before deducting expenses payable by Fleet estimated at $100,000.
--------------
SMITH BARNEY INC.
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THE DATE OF THIS PROSPECTUS SUPPLEMENT IS MARCH 27, 1996.
SMSERVICEMARK OF SMITH BARNEY INC.
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(continued from previous page)
Unless otherwise indicated in the applicable Pricing Supplement to this
Prospectus Supplement (a "Pricing Supplement"), a Note may not be redeemed at
the option of Fleet or be repaid at the option of the registered holder thereof
prior to its stated maturity. Unless otherwise specified in the applicable
Pricing Supplement, the Notes will be issued in denominations of $1,000 or
integral multiples thereof (see "Description of Retail Medium-Term Notes--
General" in this Prospectus Supplement).
Unless otherwise indicated in the applicable Pricing Supplement, interest on
the Notes will be payable monthly on the 15th day of each month and at the
Maturity Date.
The interest rate or interest rate formula for each Note will be established
by Fleet at the time of issuance of such Note (the "Original Issue Date") and
will be set forth therein and specified in a Pricing Supplement. Interest rates
and interest rate formulas are subject to change by Fleet, but no change will
affect any Note already issued or as to which an offer to purchase has been
accepted by Fleet. Unless otherwise indicated in the applicable Pricing
Supplement, each Note will bear interest at a fixed rate ("Fixed Rate Notes"),
or at a floating rate ("Floating Rate Notes"). See "Description of Retail
Medium-Term Notes" in this Prospectus Supplement and "Description of Debt
Securities" in the Prospectus.
The Notes will be issued in fully registered form and will be represented by
a global security registered in the name of a nominee of The Depository Trust
Company ("DTC"). Beneficial interests in Notes in book-entry form will be shown
on, and transfers thereof will be effected only through, records maintained by
DTC. Except as described in "Description of Retail Medium-Term Notes--Book-Entry
Notes" in this Prospectus Supplement, owners of beneficial interests in Notes
issued in book-entry form will not be entitled to physical delivery of Notes in
certificated form and will not be considered the holders thereof.
In addition to the offering of the Notes made hereby, Fleet may offer other
series of its Medium-Term Notes or other Securities, and the sale of such
Medium-Term Notes or other Securities may reduce the amount of Notes that may be
sold hereunder.
The Notes are being offered on a continuous basis by Fleet through the
Agent. Fleet may also sell Notes directly to investors and other purchasers on
its own behalf in those jurisdictions where it is authorized to do so. The Notes
will not be listed on any securities exchange, and there can be no assurance
that the Notes offered by this Prospectus Supplement will be sold or that there
will be a secondary market for the Notes. Fleet reserves the right to withdraw,
cancel or modify any offer to sell Notes without notice and may reject orders in
whole or in part whether placed directly with Fleet or through the Agent. The
Agent will have the right, in its descretion reasonably exercised, to reject, in
whole or in part, any offer to purchase Notes received by it on an agency basis.
See "Plan of Distribution of Retail Medium-Term Notes" in this Prospectus
Supplement. The Agent, whether acting as agent or principal, may be deemed to be
an "underwriter" within the meaning of the Securities Act of 1933, as amended.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
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The following information supplements, and to the extent inconsistent
therewith, replaces, the information set forth in the Basic Prospectus under the
caption "Fleet Financial Group, Inc.-- General".
FLEET FINANCIAL GROUP, INC.
GENERAL
Fleet is a diversified financial services company organized under the laws
of the State of Rhode Island. At December 31, 1995, Fleet had total assets of
$84.4 billion, total deposits of $57.1 billion and stockholders' equity of $6.4
billion.
Fleet is engaged in a general commercial banking and trust business
throughout the states of New York, Rhode Island, Connecticut, Massachusetts,
Maine, New Hampshire and Florida through its banking subsidiaries, Fleet Bank
("Fleet-NY"); Fleet Bank of New York, National Association ("FBNY"); Fleet
National Bank ("Fleet-RI"); Fleet Bank, National Association ("Fleet-CT"); Fleet
National Bank of Connecticut ("FNB-CT"); Fleet Bank of Massachusetts, National
Association ("Fleet-MA"); Fleet National Bank of Massachusetts ("FNB-MA"); Fleet
Bank of Maine, Fleet Bank-NH and Fleet Bank, F.S.B.
Fleet provides, through its nonbanking subsidiaries, a variety of financial
services, including mortgage banking, asset-based lending, equipment leasing,
consumer finance, real estate financing, securities brokerage services,
investment banking, investment advice and management, data processing and
student loan servicing.
On November 30, 1995, Fleet and Shawmut National Corporation ("Shawmut")
consummated the merger of Shawmut with and into Fleet (the "Shawmut Merger").
For additional information regarding the Shawmut Merger and Fleet's supplemental
consolidated financial statements giving effect thereto, see Fleet's Current
Reports on Form 8-K dated February 20, 1995, February 21, 1995, April 13, 1995,
May 17, 1995, June 21, 1995, August 11, 1995, August 23, 1995, November 18,
1995, November 30, 1995 and January 19, 1996, which are incorporated by
reference herein. Unless otherwise noted, all of Fleet's historical financial
information set forth in this Prospectus Supplement has been restated to give
effect to the Shawmut Merger for all periods presented.
On December 19, 1995, Fleet entered into an Agreement and Plan of Merger
(the "NatWest Merger Agreement") with National Westminster Bank Plc providing
for the merger (the "NatWest Merger") of FBNY with and into NatWest Bank, N.A.
("NatWest Bank"), a national bank operating in New York and New Jersey. NatWest
Bank will continue its existence following the closing under the name "Fleet
Bank of New York, National Association". For additional information regarding
the NatWest Merger, including a copy of the NatWest Merger Agreement and certain
pro forma and historical financial information related thereto, see Fleet's
Current Reports on Form 8-K dated December 19, 1995, February 8, 1996, March 15,
1996 and March 25, 1996, which are incorporated by reference herein.
The principal office of Fleet is located at One Federal Street, Boston,
Massachusetts 02110, telephone number (617) 292-2000.
DESCRIPTION OF RETAIL MEDIUM-TERM NOTES
The following description of the particular terms of the Notes offered
hereby (referred to in the Basic Prospectus as the "Debt Securities", the
"Senior Debt Securities" or the "Subordinated Debt Securities") supplements, and
to the extent inconsistent therewith replaces, the description of the
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general terms and provisions of the Debt Securities, Senior Debt Securities and
Subordinated Debt Securities set forth in the Basic Prospectus, to which
description reference is hereby made. The terms and conditions set forth herein
will apply to each Note unless otherwise specified in the applicable Pricing
Supplement and the related Note. Fleet may from time to time sell additional
Securities and additional series of Debt Securities, including additional series
of medium-term notes.
GENERAL
The Senior Notes will constitute a single series of Debt Securities to be
issued under an Indenture dated as of October 1, 1992, (the "Senior Indenture")
between Fleet and The First National Bank of Chicago, as trustee (the
"Trustee"). The Subordinated Notes will constitute a single series of Debt
Securities to be issued under an Indenture dated as of October 1, 1992, between
Fleet and the Trustee, as amended by a First Supplemental Indenture dated as of
November 30, 1992, between the Company and the Trustee (such indenture, as
amended, the "Subordinated Indenture" and, collectively with the Senior
Indenture, the "Indentures").
The Senior Notes will be unsecured and unsubordinated obligations of the
Company and will rank pari passu with all other senior indebtedness of Fleet
("Senior Indebtedness"). The Subordinated Notes will be unsecured and will be
subordinate and junior in the right of payment, to the extent and in the manner
set forth in the Subordinated Indenture, to all Senior Indebtedness and Other
Financial Obligations (each as defined in the Subordinated Indenture) of Fleet.
There is no limitation on the issuance of additional Senior Indebtedness or
Other Financial Obligations of Fleet. See "Subordinated Debt Securities" in the
Basic Prospectus. As of December 31, 1995, the aggregate principal amount of
Fleet's Senior Indebtedness was $1.8 billion and Fleet's obligations under Other
Financial Obligations was $15.1 million, respectively. The Notes may be issued
in an aggregate principal amount of up to $300,000,000. The aggregate principal
amount of Notes that may be issued and sold may be reduced as a result of the
sale by Fleet of other securities including other medium term notes. See "Plan
of Distribution". The statements herein concerning the Notes and the Indentures
do not purport to be complete. They are qualified in their entirety by reference
to the provisions of the Indentures, including the definitions of certain terms
used herein without definition.
The Notes will be offered on a continuing basis and will mature on any day
nine months or more from the date of issue, as selected by the purchaser and
agreed to by Fleet, and may be subject to redemption at the option of Fleet or
repayment at the option of the Holder prior to maturity at a price or prices, as
specified in the applicable Pricing Supplement, plus accrued interest to the
date of redemption or repayment. The Notes will not be subject to any sinking
fund.
Unless otherwise indicated in the Pricing Supplement, the Notes will bear
interest at a fixed rate, or at floating rates determined by reference to an
interest rate index or formula which will be set forth in the applicable Pricing
Supplement, or any combination of fixed and floating rates until the principal
thereof is paid or made available for payment. See "Fixed Rate Notes" and
"Floating Rate Notes" below. Notes may be issued as discounted securities
(bearing no interest or interest at rates which at the time of issuance are
below market rates), at prices below their stated principal amounts, which
securities will provide that upon redemption or acceleration of the maturity
thereof, amounts less than the principal amounts thereof shall become due and
payable, or as other Notes which for United States Federal income tax purposes
would be considered to have original issue discount ("Discount Notes"). See
"Certain United States Federal Income Tax Consequences" in this Prospectus
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, if the
principal of any Discount Note is declared to be due and payable immediately as
described in the accompanying Prospectus under "Description of Debt
Securities--Senior Debt Securities" and "--Subordinated Debt Securities", the
amount of principal due and payable with respect to such Note shall be its
Amortized Face Amount (as hereinafter defined). See "Optional Redemption and
Optional Repayment" below.
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Interest, if any, will be payable as specified under "Fixed Rate Notes" and
"Floating Rate Notes" below. Interest payable and punctually paid or duly
provided for on any date on which interest is payable (an "Interest Payment
Date") and on the stated maturity date or upon earlier redemption or repayment
(such stated maturity date or date of redemption or repayment, as the case may
be, being collectively hereinafter referred to as the "Maturity Date"), or on a
later date on which payment may be made hereunder in respect of such Interest
Payment Date, will be paid to the person in whose name a Note is registered at
the close of business on the Regular Record Date (as hereinafter defined) next
preceding such Interest Payment Date; provided, however, that the first payment
of interest on any Note with an Original Issue Date (as set forth in the Pricing
Supplement) between a Regular Record Date and an Interest Payment Date or on an
Interest Payment Date will be made on an Interest Payment Date following the
next succeeding Regular Record Date to the registered holder on such next
succeeding Regular Record Date; provided, further, that interest payable at
maturity or upon earlier redemption or repayment will be payable to the person
to whom principal shall be payable.
The Notes will be issued in denominations of $1,000 or integral multiples
thereof. The minimum denomination of each Note will be $1,000.
The Company will pay any administrative costs imposed by banks in connection
with transmitting payments of principal, interest or premium, by wire transfer,
but any tax, assessment or governmental charge imposed upon payments will be
borne by owners of beneficial interest in Notes issued in book-entry form in
respect of which payments are made.
All references herein to "registered holders" or "holders" will be to DTC or
its nominee and not to owners of beneficial interests in such Notes, except as
otherwise provided. See "Book-Entry System" below.
BOOK-ENTRY SYSTEM
The Notes will be issued in the form of one or more fully registered global
securities (collectively, the "Global Note") which will be deposited with, or on
behalf of, the Depository and registered in the name of the Depository's
nominee. Except as set forth below, the Global Note may be transferred, in whole
or in part, only by the Depository to a nominee of the Depository or by a
nominee of such Depository to such Depository or another nominee of such
Depository or by the Depository or any nominee to a successor depository or any
nominee of such successor.
The Depository has advised as follows: The Depository is a limited-purpose
trust company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. The Depository holds securities that its
participants ("Participants") deposit with the Depository. The Depository also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers (including the Agent), banks, trust
companies, clearing corporations and certain other organizations. The Depository
is owned by a number of its direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., and the National Association
of Securities Dealers, Inc. Access to the Depository's system is also available
to others, such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Participant, either directly
or indirectly ("indirect participants"). Persons who are not Participants may
own beneficial interests in securities held by the Depository only through
Participants or indirect participants. The Rules applicable to the Depository
and its Participants are on file with the Commission.
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The Depository has advised that pursuant to procedures established by it (i)
upon issuance of the Global Note by Fleet, the Depository will credit the
accounts of the Participants designated by the Agent with the principal amount
of the Notes purchased by the Agent and (ii) ownership of beneficial interests
in the Global Note will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the Depository (with respect to
Participants' interests), the Participants and the indirect participants (with
respect to the owners of beneficial interests in such Global Note). The laws of
some states may require that certain persons take physical delivery in
definitive form of securities which they own. Consequently, such persons may be
prohibited from purchasing beneficial interests in the Global Note from any
beneficial owner or otherwise.
So long as the Depository's nominee is the registered owner of the Global
Note, such nominee for all purposes will be considered the sole owner or holder
of the Notes represented by such Global Note for all purposes under the
applicable Indenture. Except as provided below, owners of beneficial interests
in the Global Note will not be entitled to have any of the Notes represented by
such Global Note registered in their names, will not receive or be entitled to
receive physical delivery of the Notes in definitive form and will not be
considered the owners or holders thereof under the applicable Indenture.
Accordingly, each person owning a beneficial interest in the Global Note must
rely on the procedures of the Depository and, if such person is not a
Participant, on the procedures of the Participant and, if applicable, the
indirect participant, through which such person owns its interest, to exercise
any rights of a holder under the applicable Indenture. Fleet understands that
under existing practice, in the event that Fleet requests any action of the
holders or a beneficial owner desires to take any action a holder is entitled to
take, the Depository would act upon the instructions of, or authorize, the
Participant to take such action.
Principal and interest payments on the Global Note registered in the name of
the Depository's nominee will be made to the Depository's nominee as the
registered owner of such Global Note. Fleet and the Trustee will treat the
person in whose name the Global Note is registered as the owner of such Global
Note for the purpose of receiving payment of principal and interest on the Notes
and for all other purposes whatsoever. None of Fleet, the Trustee, the Paying
Agent or the Security Registrar has any responsibility or liability for the
payment of principal or interest on the Registered Notes to owners of beneficial
interests in the Global Note. The Depository has advised that upon receipt of
any payment of principal or interest in respect of the Global Note, it will
immediately credit the accounts of the Participants with such payment in amounts
proportionate to their respective beneficial interests in such Global Note as
shown on the records of the Depository. Payments by Participants and indirect
participants to owners of beneficial interests in the Global Note will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of the Participants or indirect
participants.
None of Fleet, the Trustee, the Paying Agent or the Security Registrar will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in the Global
Note, of for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Global Note representing all but not part of the Notes being offered
hereby is exchangeable for Notes in definitive form of like tenor and terms if
(i) the Depository notifies Fleet that it is unwilling or unable to continue as
depository for such Global Note or if at any time the Depository ceases to be a
clearing agency registered under the Exchange Act, and, in either case, a
successor depository is not appointed by Fleet within 90 days of receipt by
Fleet of such notice or of Fleet becoming aware of such ineligibility, (ii)
Fleet in its discretion at any time determines not to have all of the Notes
represented by the Global Note and notifies the Trustee thereof, or (iii) an
Event of Default has occurred and is continuing with respect to the Notes. The
Global Note exchangeable pursuant to the preceding sentence shall be
exchangeable for Notes issuable in authorized denominations and registered in
such names as
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the Depository holding such Global Note shall direct. Subject to the foregoing,
a Global Note is not exchangeable, except for a Note or Notes of the same
aggregate denomination to be registered in the name of the depository or its
nominee or in the name of a successor or the Depository or a nominee of such
successor.
A further description of the Depository's procedures with respect to Global
Notes representing Book-Entry Notes is set forth in the Basic Prospectus under
"Description of Debt Securities--Global Securities". The Depository has
confirmed that it intends to follow such procedures.
PAYING AGENT, REGISTRAR AND TRANSFER AGENT
The initial Paying Agent, Registrar and Transfer Agent is the Trustee,
acting through its principal corporate trust offices in the City of New York.
Fleet reserves the right at any time to vary or terminate the appointment of the
Paying Agent, Registrar and the Transfer Agent and to appoint additional Paying
Agents, Registrars and Transfer Agents and to approve any change in the office
through which the Paying Agent, Registrar or Transfer Agent acts, provided that,
so long as any Notes remain outstanding, there will at all times be a Paying
Agent in the City of New York and Fleet will maintain in the City of New York
one or more offices or agencies where Notes may be presented for registration of
transfer and exchange.
OPTIONAL REDEMPTION AND OPTIONAL REPAYMENT
If set forth in the applicable Pricing Supplement, the Notes will be subject
to redemption by Fleet on and after the initial redemption date fixed at the
time of sale (the "Initial Redemption Date"). If no Initial Redemption Date is
indicated with respect to a Note, such Note will not be redeemable prior to the
stated maturity date. On and after the Initial Redemption Date with respect to
any Note, such Note will be redeemable in whole or in part in increments of
$1,000 (provided that any remaining principal amount of such Note shall be at
least $1,000) at the option of Fleet at a redemption price (the "Redemption
Price") determined in accordance with the following paragraph, together with
interest thereon payable to the date of redemption, on notice given to a holder
of a Note not less than 30 nor more than 60 days prior to the date of
redemption.
The Redemption Price for each Note subject to redemption may initially be
equal to a certain premium (the "Initial Redemption Percentage") in excess of
100% of the principal amount of such Note to be redeemed, which may decline at
each anniversary of the Initial Redemption Date with respect to such Note by a
percentage (the "Annual Redemption Percentage Reduction") of the principal
amount to be redeemed until the Redemption Price equals 100% of such principal
amount. Any Initial Redemption Percentage and Annual Redemption Percentage
Reduction with respect to each Note subject to redemption prior to the stated
maturity date will be fixed at the time of sale and set forth in the applicable
Pricing Supplement and in the applicable Note.
If set forth in the applicable Pricing Supplement, the Notes will be subject
to repayment at the option of the holders thereof in accordance with the terms
of the Notes on their respective optional repayment dates fixed at the time of
sale (each, an "Optional Repayment Date"). If no Optional Repayment Date is
indicated with respect to a Note, such Note will not be repayable at the option
of the holder thereof prior to the stated maturity date. On any Optional
Repayment Date with respect to any Note, such Note will be repayable in whole or
in part in increments of $1,000 (provided that any remaining principal amount of
such Note shall be at least $1,000) at the option of such holder at a price
equal to 100% of the principal amount to be repaid, together with interest
thereon accrued to the date of repayment, on notice to the paying Agent, given
not less than 30 nor more than 60 days prior to the Optional Repayment Date.
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While the Notes are represented by the Global Note and registered in the
name of the Depository or its nominee, the option for repayment may be exercised
by a Participant, on behalf of the beneficial owners of the Global Note, by
delivering a written notice to the Paying Agent at its corporate trust office
(or such other address of which Fleet shall from time to time notify the
Holders), not less than 30 nor more than 60 days prior to the date of repayment.
Notices of elections from Participants on behalf of beneficial owners of the
Global Note to exercise their option to have such Book-Entry Notes repaid must
be received by the Paying Agent by 5:00 P.M., New York City time, on the last
day for giving such notice. In order to ensure that a notice is received by the
Paying Agent on a particular day, the beneficial owner of the Global Note must
direct its Participant before such Participant's deadline for accepting
instructions for that day. Different Participants may have different deadlines
for accepting instructions from their customers. Accordingly, beneficial owners
of the Global Note should consult the Participant through which they own their
interest therein for the respective deadlines for such Participant. All notices
shall be executed by a duly authorized officer of such Participant (with
signature guaranteed) and shall be irrevocable. In addition, beneficial owners
of the Global Note shall effect delivery by causing the applicable Participant
to transfer such beneficial owner's interest in the Global Note, on the
Depository's records, to the Paying Agent. See "Book-Entry System" in this
Prospectus Supplement.
If applicable, Fleet will comply with the requirements of Rule 14a-1 under
the Securities Exchange Act of 1934, as amended, and any other securities laws
or regulations in connection with any such repayment.
Fleet may at any time purchase Notes at any price or prices in the open
market or otherwise. Notes so purchased by Fleet may be held or resold or, at
the discretion of Fleet, may be surrendered to the Trustee for cancellation.
Notwithstanding anything in this Prospectus Supplement to the contrary, if a
Note is a Discount Note, the amount payable on such Note in the event of
redemption or repayment prior to the stated maturity date shall be the Amortized
Face Amount of such Note as of the date of redemption or the date of repayment,
as the case may be. The "Amortized Face Amount" of a Discount Note shall be the
amount equal to (i) the issue price set forth in the applicable Pricing
Supplement plus (ii) that portion of the difference between the issue price and
the principal amount of such Note that has accrued at the yield to maturity
(computed in accordance with generally accepted United States bond yield
computation principles) by such date of redemption or repayment, as calculated
by the Calculation Agent (as hereinafter defined), but in no event shall the
Amortized Face Amount of an Original Issue Discount Note exceed its principal
amount.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from the Original Issue Date at the
rate per annum stated on the face thereof (which may be zero) until the
principal amount thereof is paid or duly made available for payment. Unless
otherwise provided in the applicable Pricing Supplement, interest on Fixed Rate
Notes will be computed on the basis of a 360-day year consisting of twelve
30-day months. Unless otherwise specified in the applicable Pricing Supplement,
interest on Fixed Rate Notes will be payable on the 15th day of each month
during the term of the Notes (each an "Interest Payment Date") and on the
Maturity Date. Unless otherwise provided in the applicable Pricing Supplement,
the "Regular Record Date" for Fixed Rate Notes will be the first day of each
month or if the Interest Payment Dates are other than the 15th day of the month,
the calendar day fifteen days preceding each Interest Payment Date whether or
not such day is a Business Day (as hereinafter defined). If any Interest Payment
Date or the Maturity Date on a Fixed Rate Note falls on a day that is not a
Business Day, the payment shall be made on the next succeeding day that is a
Business Day as if it were made on the date such payment was due and no
additional interest will accrue on the amount so payable for the period from and
after such Interest Payment Date or the Maturity Date, as the case may be.
Interest
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payments will be in the amount of interest accrued from and including the next
preceding Interest Payment Date in respect of which interest has been paid or
duly provided for (or from and including the Original Issue Date if no interest
has been paid or duly provided for with respect to such Note) to but excluding
the Interest Payment Date or the Maturity Date, as the case may be.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest from the Original Issue Date at
the interest rate index or formula which will be set forth in the applicable
Pricing Supplement until the principal amount thereof is paid or duly made
available for payment. The interest rate on each Floating Rate Note will be
calculated by reference to the specified interest rate index or formula plus or
minus the Spread and/or multiplied by the Spread Multiplier, if any. The
interest rate index or formula will be based upon the Index Maturity (as
hereinafter defined) and adjusted by a Spread and/or Spread Multiplier, if any,
as specified in the applicable Pricing Supplement. The "Spread" is the number of
basis points above or below the interest rate applicable to such Floating Rate
Note, and the "Spread Multiplier" is the percentage applicable to the interest
rate for such Floating Rate Note. The "Index Maturity" is the period to maturity
of the instrument or obligation with respect to which the interest rate index or
formula is calculated. The Spread, Spread Multiplier, Index Maturity and other
variable terms of the Floating Rate Notes are subject to change by Fleet from
time to time, but no such change will affect any Floating Rate Note theretofore
issued or as to which an offer to purchase has been accepted by Fleet.
The applicable Pricing Supplement will specify for each Floating Rate Note
the following terms: Original Issue Date, the interest rate index or formula,
Initial Interest Rate (as hereinafter defined), Initial Interest Rate Reset
Date, Interest Payment Dates, Index Maturity, Maturity Date, Maximum Interest
Rate (as hereinafter defined) and/or Minimum Interest Rate (as hereinafter
defined), if any, Spread and/or Spread Multiplier, if any, Initial Redemption
Date, if any, Initial Redemption Percentage, if any, Annual Redemption
Percentage Reduction, if any, defeasance provisions, if any, and Optional
Repayment Dates, if any. Unless otherwise specified in the applicable Pricing
Supplement, the "Regular Record Date" for Floating Rate Notes with respect to
any Interest Payment Date will be the fifteenth calendar day, whether or not
such day is a Business Day, prior to such Interest Payment Date.
The rate of interest on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semi-annually or annually (each, an "Interest Rate Reset
Date"), as specified in the applicable Pricing Supplement. If any Interest Rate
Reset Date for any Floating Rate Note would be a day that is not a Business Day,
such Interest Rate Reset Date will be postponed to the next succeeding day that
is a Business Day. Unless otherwise specified in the applicable Pricing
Supplement, "Business Day" means any day other than a Saturday, Sunday, legal
holiday or other day on which banking institutions in The City of New York are
authorized or required by law, regulation or executive order to close.
A Floating Rate Note may also have either or both of the following: (i) a
maximum limit, or ceiling (the "Maximum Interest Rate"), on the rate of interest
that may accrue during any period; and (ii) a minimum limit, or floor (the
"Minimum Interest Rate"), on the rate of interest which may accrue during any
period. Notwithstanding any Maximum Interest Rate which may be applicable to any
Floating Rate Note pursuant to the above provisions, the interest rate on
Floating Rate Notes will in no event be higher than the maximum rate permitted
by New York law as the same may be modified by United States law of general
application. Under present New York law, the maximum rate of interest, subject
to certain exceptions, for any loan in an amount less than $250,000 is 16%, and
for any loan in the amount of $250,000 or more but less than $2,500,000 is 25%,
per annum on a simple interest basis. These limits do not apply to loans of
$2,500,000 or more.
Unless otherwise indicated in the applicable Pricing Supplement, the
interest rate in effect with respect to a Floating Rate Note during the period
commencing on an Interest Rate Reset Date will be
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the rate determined on the second Business Day preceding such Interest Rate
Reset Date (the "Interest Determination Date").
Unless otherwise indicated in the applicable Pricing Supplement, the
interest rate in effect with respect to a Floating Rate Note on each day that is
not an Interest Rate Reset Date will be the interest rate determined as of the
Interest Determination Date pertaining to the immediately preceding Interest
Rate Reset Date, and the interest rate in effect on any day that is an Interest
Rate Reset Date will be the interest rate determined as of the Interest
Determination Date pertaining to such Interest Rate Reset Date, subject in
either case to any Maximum or Minimum Interest Rate limitation referred to
above; provided, however, that the interest rate in effect with respect to a
Floating Rate Note for the period from the Original Issue Date to the Initial
Interest Rate Reset Date (the "Initial Interest Rate") will be specified in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, interest
payments will be the amount of interest accrued from and including the next
preceding Interest Payment Date in respect of which interest has been paid or
duly provided for (or from and including the Original Issue Date if no interest
has been paid or duly provided for with respect to such Note) to but excluding
the Interest Payment Date or the Maturity Date, as the case may be.
Unless otherwise indicated in the applicable Pricing Supplement, if any
Interest Payment Date for any Floating Rate Note (other than an Interest Payment
Date that occurs on the Maturity Date) would otherwise fall on a day that is not
a Business Day with respect to such Note, such Interest Payment Date shall be
the next succeeding day that is a Business Day. If the Maturity Date of any
Floating Rate Note shall fall on a day that is not a Business Day with respect
to such Note, the payment of interest, principal or premium (if any) due on such
date shall be made on the next succeeding day that is a Business Day and no
additional interest on such amounts shall accrue from the Maturity Date to and
including the date on which any such payment is required to be made.
Unless otherwise indicated in the applicable Pricing Supplement, the Trustee
will be the Calculation Agent. Upon the request of the holder of a Floating Rate
Note, the Calculation Agent will provide the interest rate then in effect and,
if determined, the interest rate that will become effective as a result of a
determination made for the next Interest Rate Reset Date with respect to such
Floating Rate Note. The Calculation Agent will also make certain calculations,
specified below, on or prior to the "Calculation Date." Unless otherwise
specified in the applicable Pricing Supplement, the "Calculation Date," where
applicable, pertaining to any Interest Determination Date will be the earlier of
(i) the tenth calendar day after such Interest Determination Date or, if any
such day is not a Business Day, the next succeeding Business Day, or (ii) the
Business Day next preceding the applicable Interest Payment Date or Maturity
Date, as the case may be.
Unless otherwise indicated in the applicable Pricing Supplement, accrued
interest on any Floating Rate Note will be determined by multiplying the face
amount of such Floating Rate Note by an accrued interest factor. Such accrued
interest factor will be computed by adding the interest factor calculated for
each day from and including the Original Issue Date, or from but excluding the
last date to which interest has been paid, as the case may be, to and including
the date for which accrued interest is being calculated. Unless otherwise
indicated in the applicable Pricing Supplement, the interest factor for each
such day will be computed by dividing the interest rate applicable to such day
by 360.
Unless otherwise indicated in the applicable Pricing Supplement, all
percentages resulting from any calculation of the rate of interest on Floating
Rate Notes will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) will be rounded upward to 9.87655% (or
.0987655)), and to the nearest cent (with one-half cent being rounded upward).
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GOVERNING LAW
The Indentures and the Notes will be governed by, and construed in
accordance with, the laws of the State of New York.
OTHER PROVISIONS AND ADDENDA
Any provisions with respect to the Notes may be modified as specified under
"Other Provisions" on the face of such Note or in an Addendum relating thereto,
if so specified on the face of such Note and in the applicable Pricing
Supplement.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the Notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change (including changes in effective dates) or possible differing
interpretations. It deals only with Notes held as capital assets and does not
purport to deal with persons in special tax situations, such as financial
institutions, insurance companies, regulated investment companies, dealers in
securities or currencies, persons holding Notes as a hedge against currency
risks or as a position in a "straddle" for tax purposes, or persons whose
functional currency is not the United States dollar. It also does not deal with
holders other than original purchasers (except where otherwise specifically
noted). Persons considering the purchase of the Notes should consult their own
tax advisors concerning the application of United States Federal income tax laws
to their particular situations as well as any consequences of the purchase,
ownership and disposition of the Notes arising under the laws of any other
taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a Note
that is for United States Federal income tax purposes (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, (iii) an estate or trust the income of which is subject to
United States Federal income taxation regardless of its source, or (iv) any
other person whose income or gain in respect of a Note is effectively connected
with the conduct of a United States trade or business. As used herein, the term
"non-U.S. Holder" means a holder of a Note that is not a U.S. Holder.
U.S. HOLDERS
Payments of Interest. Payments of interest on a Note generally will be
taxable to a U.S. Holder as ordinary interest income at the time such payments
are accrued or are received (in accordance with the U.S. Holder's regular method
of tax accounting).
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Original Issue Discount. The following summary is a general discussion of
the United States Federal income tax consequences to U.S. Holders of the
purchase, ownership and disposition of Discount Notes. The following summary is
based upon final Treasury regulations (the "OID Regulations") issued by the
Internal Revenue Service ("IRS") on January 27, 1994 under the original issue
discount provisions of the Internal Revenue Code of 1986, as amended (the
"Code"). The OID Regulations, which replaced certain proposed original issue
discount regulations that were issued on December 21, 1992, generally apply to
debt instruments issued on or after April 4, 1994. In addition, taxpayers may
rely on the OID Regulations for debt instruments issued after December 21, 1992.
For United States Federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a Note over its issue
price, if such excess equals or exceeds a de minimis amount (generally 1/4 of 1%
of the Note's stated redemption price at maturity multiplied by the number of
complete years to its maturity from its issue date). The issue price of an issue
of Notes equals the first price at which a substantial amount of such Notes has
been sold other than to underwriters, placement agents or wholesalers. The
stated redemption price at maturity of a Note is the sum of all payments
provided by the Note other than "qualified stated interest" payments. The term
"qualified stated interest" generally means stated interest that is
unconditionally payable in cash or property (other than debt instruments of the
issuer) at least annually at a single fixed rate or at certain floating rates.
In addition, under the OID Regulations, if a Note bears interest for one or more
accrual periods at a rate below the rate applicable for the remaining term of
such Note (e.g., Notes with teaser rates or interest holidays), and if the
greater of either the resulting foregone interest on such Note or any "true"
discount on such Note (i.e., the excess of the Note's stated principal amount
over its issue price) equals or exceeds a specified de minimis amount, then the
stated interest on the Note would be treated as original issue discount rather
than qualified stated interest.
Payments of qualified stated interest on a Note are taxable to a U.S. Holder
as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of a Discount Note must include original issue
discount in income as ordinary interest for United States Federal income tax
purposes as it accrues under a constant yield method in advance of receipt of
the cash payments attributable to such income, regardless of such U.S. Holder's
regular method of tax accounting. In general, the amount of original issue
discount included in income by the initial U.S. Holder of a Discount Note is the
sum of the daily portions of original issue discount with respect to such
Discount Note for each day during the taxable year (or portion of the taxable
year) on which such U.S. Holder held such Discount Note. The "daily portion" of
original issue discount on any Discount Note is determined by allocating to each
day in any accrual period a ratable portion of the original issue discount
allocable to that accrual period. An "accrual period" may be of any length and
the accrual periods may vary in length over the term of the Discount Note,
provided that each accrual period is no longer than one year and each scheduled
payment of principal or interest occurs either on the final day of an accrual
period or on the first day of an accrual period. The amount of original issue
discount allocable to each accrual period is generally equal to the difference
between (i) the product of the Discount Note's adjusted issue price at the
beginning of such accrual period and its yield to maturity (determined on the
basis of compounding at the close of each accrual period and appropriately
adjusted to take into account the length of the particular accrual period) and
(ii) the amount of any qualified stated interest payments allocable to such
accrual period. The "adjusted issue price" of a Discount Note at the beginning
of any accrual period is the sum of the issue price of the Discount Note plus
the amount of original issue discount allocable to all prior accrual periods
minus the amount of any prior payments on the Discount Note that were not
qualified stated interest payments. Under these rules, U.S. Holders generally
will have to include in income increasingly greater amounts of original issue
discount in successive accrual periods.
If a portion of the initial purchase price of a Note is attributable to
interest that accrued prior to the Note's issue date, the first stated interest
payment on the Note is to be made within one year of the Note's issue date and
such payment will equal or exceed the amount of pre-issuance accrued interest,
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then the issue price will be decreased by the amount of pre-issuance accrued
interest, in which case a portion of the first stated interest payment will be
treated as a return of the excluded pre-issuance accrued interest and not as an
amount payable on the Note.
The OID Regulations contain certain special rules that generally allow any
reasonable method to be used in determining the amount of OID allocable to a
short initial accrual period (if all other accrual periods are of equal length)
and require that the amount of OID allocable to the final accrual period equal
the excess of the amount payable at the maturity of the Discount Note (other
than any payment of qualified stated interest) over the Discount Note's adjusted
issue price as of the beginning of such final accrual period. In addition, if an
interval between payments of qualified stated interest on a Discount Note
contains more than one accrual period, then the amount of qualified stated
interest payable at the end of such interval is allocated pro rata (on the basis
of their relative lengths) between the accrual periods contained in the
interval.
A U.S. Holder who purchases a Discount Note for an amount that is greater
than its adjusted issue price as of the purchase date and less than or equal to
its stated redemption price at maturity will be considered to have purchased the
Discount Notes at an "acquisition premium." Under the acquisition premium rules,
the amount of original issue discount which such U.S. Holder must include in its
gross income with respect to such Discount Note for any taxable year (or portion
thereof in which the U.S. Holder holds the Discount Note) will be reduced (but
not below zero) by the portion of the acquisition premium properly allocable to
the period.
Under the OID Regulations, Floating Rate Notes ("Variable Notes") are
subject to special rules whereby a Variable Note will qualify as a "variable
rate debt instrument" if (a) its issue price does not exceed the total
noncontingent principal payments due under the Variable Note by more than a
specified de minimis amount and (b) it provides for stated interest, paid or
compounded at least annually, at current values of (i) one or more qualified
floating rates, (ii) a single fixed rate and one or more qualified floating
rates, (iii) a single objective rate, or (iv) a single fixed rate and single
objective rate that is a qualified inverse floating rate.
A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Variable Note is denominated. Although a multiple of a qualified floating rate
will generally not itself constitute a qualified floating rate, a variable rate
equal to the product of a qualified floating rate and a fixed multiple that is
greater than zero but not more than 1.35 will constitute a qualified floating
rate. A variable rate equal to the product of a qualified floating rate and a
fixed multiple that is greater than zero but not more than 1.35, increased or
decreased by a fixed rate, will also constitute a qualified floating rate. In
addition, under the OID Regulations, two or more qualified floating rates that
can reasonably be expected to have approximately the same values throughout the
term of the Variable Note (e.g., two or more qualified floating rates with
values within 25 basis points of each other as determined on the Variable Note's
issue date) will be treated as a single qualified floating rate. Notwithstanding
the foregoing, a variable rate that would otherwise constitute a qualified
floating rate but which is subject to one or more restrictions such as a maximum
numerical limitation (i.e., a cap) or a minimum numerical limitation (i.e., a
floor) may, under certain circumstances, fail to be treated as a qualified
floating rate under the OID Regulations. An "objective rate" is a rate that is
not itself a qualified floating rate but which is determined using a single
fixed formula and which is based upon (i) one or more qualified floating rates,
(ii) one or more rates where each rate would be a qualified floating rate for a
debt instrument denominated in a currency other than the currency in which the
Variable Note is denominated, (iii) either the yield or changes in the price of
one or more items of actively traded personal property or (iv) a combination of
objective rates. The OID Regulations also provide that other variable interest
rates may be treated as objective rates if so designated by the IRS in the
future. Despite the foregoing, a variable rate of interest on a Variable Note
will not constitute an objective rate if it is reasonably expected that the
average value of such rate during the
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first half of the Variable Note's term will be either significantly less than or
significantly greater than the average value of the rate during the final half
of the Variable Note's term. A "qualified inverse floating rate" is any
objective rate where such rate is equal to a fixed rate minus a qualified
floating rate, as long as variations in the rate can reasonably be expected to
inversely reflect contemporaneous variations in the cost of newly borrowed
funds. The OID Regulations also provide that if a Variable Note provides for
stated interest at a fixed rate for an initial period of less than one year
followed by a variable rate that is either a qualified floating rate or an
objective rate and if the variable rate on the Variable Note's issue date is
intended to approximate the fixed rate (e.g., the value of the variable rate on
the issue date does not differ from the value of the fixed rate by more than 25
basis points), then the fixed rate and the variable rate together will
constitute either a single qualified floating rate or objective rate, as the
case may be.
If a Variable Note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term thereof
qualifies as a "variable rate debt instrument" under the OID Regulations, then
any stated interest on such Note which is unconditionally payable in cash or
property (other than debt instruments of the issuer) at least annually will
constitute qualified stated interest and will be taxed accordingly. Thus, a
Variable Note that provides for stated interest at either a single qualified
floating rate or a single objective rate throughout the term thereof and that
qualifies as a "variable rate debt instrument" under the OID Regulations will
generally not be treated as having been issued with original issue discount
unless the Variable Note is issued at a "true" discount (i.e., at a price below
the Note's stated principal amount) in excess of a specified de minimis amount.
Original issue discount on such a Variable Note arising from "true" discount is
allocated to an accrual period using the constant yield method described above.
In general, any other Variable Note that qualifies as a "variable rate debt
instrument" will be converted into an "equivalent" fixed rate debt instrument
for purposes of determining the amount and accrual of original issue discount
and qualified stated interest on the Variable Note. The OID Regulations
generally require that such a Variable Note be converted into an "equivalent"
fixed rate debt instrument by substituting any qualified floating rate or
qualified inverse floating rate provided for under the terms of the Variable
Note with a fixed rate equal to the value of the qualified floating rate or
qualified floating rate, as the case may be, as of the Variable Note's issue
date. Any objective rate (other than a qualified inverse floating rate) provided
for under the terms of the Variable Note is converted into a fixed rate that
reflects the yield that is reasonably expected for the Variable Note. In the
case of a Variable Note that qualifies as a "variable rate debt instrument" and
provides for stated interest at a fixed rate in addition to either one or more
qualified floating rates or a qualified inverse floating rate, the fixed rate is
initially converted into a qualified floating rate (or a qualified inverse
floating rate, if the Variable Note provides for a qualified inverse floating
rate). Under such circumstances, the qualified floating rate or qualified
inverse floating rate that replaces the fixed rate must be such that the fair
market value of the Variable Note as of the Variable Note's issue date is
approximately the same as the fair market value of an otherwise identical debt
instrument that provides for either the qualified floating rate or qualified
inverse floating rate rather than the fixed rate. Subsequent to converting the
fixed rate into either a qualified floating rate or a qualified inverse floating
rate, the Variable Note is then converted into an "equivalent" fixed rate debt
instrument in the manner described above.
Once the Variable Note is converted into an "equivalent" fixed rate debt
instrument pursuant to the foregoing rules, the amount of original issue
discount and qualified stated interest, if any, are determined for the
"equivalent" fixed rate debt instrument by applying the general original issue
discount rules to the "equivalent" fixed rate debt instrument and a U.S. Holder
of the Variable Note will account for such original issue discount and qualified
stated interest as if the U.S. Holder held the "equivalent" fixed rate debt
instrument. Each accrual period appropriate adjustments will be made to the
amount of qualified stated interest or original issue discount assumed to have
been accrued or paid with respect to the "equivalent" fixed rate debt instrument
in the event that such amounts differ from the actual amount of interest accrued
or paid on the Variable Note during the accrual period.
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If a Variable Note does not qualify as a "variable rate debt instrument"
under the OID Regulations, then the Variable Note would be treated as a
contingent payment debt obligation. It is not entirely clear under current law
how a Variable Note would be taxed if such Variable Note were treated as a
contingent payment debt obligation. The proper United States Federal income tax
treatment of Variable Notes that are treated as contingent payment debt
obligations will be more fully described in the applicable Pricing Supplement.
Certain of the Notes (i) may be redeemable at the option of Fleet prior to
their stated maturity (a "call option") and/or (ii) may be repayable at the
option of the holder prior to their stated maturity (a "put option"). Notes
containing such features may be subject to rules that differ from the general
rules discussed above. Investors intending to purchase Notes with such features
should consult their own tax advisors, since the original issue discount
consequences will depend, in part, on the particular terms and features of the
purchased Notes.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, de
minimis original issue discount, market discount, de minimis market discount,
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions. This election is only available for debt instruments
issued on or after April 4, 1994. In applying the constant yield method to a
Note with respect to which this election has been made, the issue price of the
Note will equal the electing U.S. Holder's adjusted basis in the Note
immediately after its acquisition, the issue date of the Note will be the date
of its acquisition by the electing U.S. Holder, and no payments on the Note will
be treated as payments of qualified stated interest. This election is generally
applicable only to the Note with respect to which it is made and may not be
revoked without the consent of the IRS. If this election is made with respect to
a Note with amortizable bond premium, the electing U.S. Holder will be deemed to
have elected to apply amortizable bond premium against interest with respect to
all debt instruments with amortizable bond premium (other than debt instruments
the interest on which is excludible from gross income) held by such electing
U.S. Holder as of the beginning of the taxable year in which the election is
made or any debt instruments acquired thereafter. The deemed election with
respect to amortizable bond premium may not be revoked without the consent of
the IRS.
If the election described above to apply the constant yield method to all
interest on a Note is made with respect to a Market Discount Note, as defined
above, then the electing U.S. Holder will be treated as having made the election
discussed above under "Notes Purchased at a Market Discount" to include market
discount in income currently over the life of all debt instruments held or
thereafter acquired by such U.S. Holder.
Short-Term Notes. Notes that have a fixed maturity of one year or less
("Short-Term Notes") will be treated as having been issued with original issue
discount. In general, an individual or other cash method U.S. Holder is not
required to accrue such original issue discount unless the U.S. Holder elects to
do so. If such an election is not made, any gain recognized by the U.S. Holder
on the sale, exchange or maturity of the Short-Term Note will be ordinary income
to the extent of the original issue discount accrued on a straight-line basis,
or upon election under the constant yield method (based on daily compounding),
through the date of sale or maturity, and a portion of the deductions otherwise
allowable to the U.S. Holder for interest on borrowings allocable to the
Short-Term Note will be deferred until a corresponding amount of income is
realized. U.S. Holders who report income for United States Federal income tax
purposes under the accrual method, and certain other holders including banks and
dealers in securities, are required to accrue original issue discount on a
Short-Term Note on a straight-line basis unless an election is made to accrue
the original issue discount under a constant yield method (based on daily
compounding).
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Any U.S. Holder of a Short-Term Note can elect to apply the rules in the
preceding paragraph taking into account the amount of "acquisition discount", if
any, with respect to the Short-Term Note (rather than the OID with respect to
such Short-Term Note). Acquisition discount is the excess of the stated
redemption price at maturity of the Short-Term Note over the U.S. Holder's
purchase price therefor. Acquisition discount will be treated as accruing on a
ratable basis or, at the election of the U.S. Holder, on a constant-yield basis.
For purposes of determining the amount of OID subject to these rules, the
OID Regulations provide that no interest payments on a Short-Term Note are
qualified stated interest, but instead such interest payments are included in
the Short-Term Note's stated redemption price at maturity.
Market Discount. If a U.S. Holder purchases a Note, other than a Discount
Note, for an amount that is less than its issue price (or, in the case of a
subsequent purchaser, its stated redemption price at maturity) or, in the case
of a Discount Note, for an amount that is less than its adjusted issue price as
of the purchase date, the amount of the difference will be treated as "market
discount," unless such difference is less than a specified de minimis amount.
The market discount rules do not apply to Short-Term Notes.
Under the market discount rules, a U.S. Holder will be required to treat any
partial principal payment (or, in the case of a Discount Note, any payment that
does not constitute qualified stated interest) on, or any gain realized on the
sale, exchange, retirement or other disposition of, a Note as ordinary income to
the extent of the lesser of (i) the amount of such payment or realized gain or
(ii) the market discount which has not previously been included in income and is
treated as having accrued on such Note at the time of such payment or
disposition. Market discount will be considered to accrue ratably during the
period from the date of acquisition to the maturity date of the Note, unless the
U.S. Holder elects to accrue market discount on the basis of semiannual
compounding. Such an election is applicable only to the Market Discount Note
with respect to which it is made and is irrevocable.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a Note with market discount until the maturity of the Note or
its earlier disposition in a taxable transaction, because a current deduction is
only allowed to the extent the interest expense exceeds an allocable portion of
market discount. A U.S. Holder may elect to include market discount in income
currently as it accrues (on either a ratable or semiannual compounding basis),
in which case the rules described above regarding the treatment as ordinary
income of gain upon the disposition of the Note and upon the receipt of certain
cash payments and regarding the deferral of interest deductions will not apply.
Generally, such currently included market discount is treated as ordinary
interest for United States Federal income tax purposes. Such an election applies
to all debt instruments with market discount acquired by the electing U.S.
Holder on or after the first day of the first taxable year to which the election
applies and may not be revoked without the consent of the IRS.
Premium. If a U.S. Holder purchases a Note for an amount that is greater
than its stated redemption price at maturity, such U.S. Holder will be
considered to have purchased the Note with "amortizable bond premium" equal in
amount to such excess. A U.S. Holder may elect to amortize such premium using a
constant yield method over the remaining term of the Note and may offset
interest otherwise required to be included in respect of the Note during any
taxable year by the amortized amount of such excess for the taxable year.
However, if the Note may be optionally redeemed after the U.S. Holder acquires
it at a price in excess of its stated redemption price at maturity, special
rules would apply which could result in a deferral of the amortization of some
bond premium until later in the term of the Note. Any election to amortize bond
premium is applicable to all bonds (other than bonds the interest on which is
excludible from gross income) held by the U.S. Holder at the beginning of the
first taxable year to which the election applies or thereafter acquired by the
U.S. Holder, and may
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not be revoked without the consent of the IRS. See also "Original Issue
Discount--Election to Treat All Interest as Original Issue Discount".
Disposition of a Note. Except as discussed above, upon the sale, exchange or
retirement of a Note, a U.S. Holder generally will recognize taxable gain or
loss equal to the difference between the amount realized on the sale, exchange
or retirement and such U.S. Holder's adjusted tax basis in the Note. A U.S.
Holder's adjusted tax basis in a Note generally will equal such U.S. Holder's
initial investment in the Note increased by any original issue discount included
in income (and accrued market discount (or acquisition discount, in the case of
a Short-Term Note), if any, if the U.S. Holder has included such market discount
in income) and decreased by the amount of any payments, other than qualified
stated interest payments, received and amortizable bond premium taken with
respect to such Note. Such gain or loss generally will be long-term capital gain
or loss if the Note were held for more than one year.
NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to United States Federal income taxes
on payments of principal, premium (if any) or interest (including original issue
discount, if any) on a Note, unless such non-U.S. Holder is a direct or indirect
10% or greater shareholder of Fleet, a controlled foreign corporation related to
Fleet or a bank receiving interest described in section 881(c)(3)(A) of the
Code. To qualify for the exemption from taxation, the last United States payor
in the chain of payment prior to payment to a non-U.S. Holder (the "Withholding
Agent") must have received in the year in which a payment of interest or
principal occurs, or in either of the two preceding calendar years, a statement
that (i) is signed by the beneficial owner of the Note under penalties of
perjury, (ii) certifies that such owner is not a U.S. Holder, and (iii) provides
the name and address of the beneficial owner. The statement may be made on an
IRS Form W-8 or a substantially similar form, and the beneficial owner must
inform the Withholding Agent of any change in the information on the statement
within 30 days of such change. If a Note is held through a securities clearing
organization or certain other financial institutions, the organization or
institution may provide a signed statement to the Withholding Agent. However, in
such case, the signed statement must be accompanied by a copy of the IRS Form
W-8 or the substitute form provided by the beneficial owner to the organization
or institution. The Treasury Department is considering implementation of further
certification requirements aimed at determining whether the issuer of a debt
obligation is related to holders thereof.
If a non-U.S. Holder is engaged in a trade or business in the United States
and interest (including OID) on the Note is effectively connected with the
conduct of such trade or business, the non-U.S. Holder, although exempt from the
withholding tax discussed in the preceding paragraph (provided that such holder
furnishes a properly executed IRS Form 4224 on or before any payment date to
claim such exemption), may be subject to U.S. Federal income tax on such
interest (or OID) in the same manner as if it were a U.S. Holder. In addition,
if the non-U.S. Holder is a foreign corporation, it may be subject to a branch
profits tax equal to 30% of its effectively connected earnings and profits for
the taxable year, subject to certain adjustments. For purposes of the branch
profits tax, interest (including OID) on a Note will be included in the earnings
and profits of such holder if such interest (or OID) is effectively connected
with the conduct by such holder of a trade or business in the United States. In
lieu of the certificate described in the preceding paragraph, such a holder must
provide the payor with a properly executed IRS Form 4224 to claim an exemption
from U.S. Federal withholding tax.
Any capital gain, market discount or exchange gain realized on the sale,
exchange, retirement or other disposition of a Note by a non-U.S. Holder will
not be subject to U.S. Federal income or withholding taxes if (i) such gain is
not effectively connected with a U.S. trade or business of the non-U.S. Holder
and (ii) in the case of an individual, such non-U.S. Holder (A) is not present
in the United States for 183 days or more in the taxable year of the sale,
exchange, retirement or other disposition or (B) does not have a tax home (as
defined in Section 911(d)(3) of the Code) in the United States in the
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taxable year of the sale, exchange, retirement or other disposition and the gain
is not attributable to an office or other fixed place of business maintained by
such individual in the United States.
PURCHASERS OF NOTES THAT ARE NON-U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE POSSIBLE APPLICABILITY OF UNITED STATES WITHHOLDING
AND OTHER TAXES UPON INCOME REALIZED IN RESPECT OF THE NOTES.
The Notes will not be includible in the estate of a non-U.S. Holder unless
the individual is a direct or indirect 10% or greater shareholder of Fleet or,
at the time of such individual's death, payments in respect of the Notes would
have been effectively connected with the conduct by such individual of a trade
or business in the United States.
BACKUP WITHHOLDING
Backup withholding of United States Federal income tax at a rate of 31% may
apply to payments made in respect of the Notes to registered owners who are not
"exempt recipients" and who fail to provide certain identifying information
(such as the registered owner's taxpayer identification number) in the required
manner. Generally, individuals are not exempt recipients, whereas corporations
and certain other entities generally are exempt recipients. Payments made in
respect of the Notes to a U.S. Holder must be reported to the IRS, unless the
U.S. Holder is an exempt recipient or establishes an exemption. Compliance with
the identification procedures described in the preceding section would establish
an exemption from backup withholding for those non-U.S. Holders who are not
exempt recipients.
In addition, upon the sale of a Note to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either (i) the broker
determines that the seller is a corporation or other exempt recipient or (ii)
the seller provides, in the required manner, certain identifying information
and, in the case of a non-U.S. Holder, certifies that such seller is a non-U.S.
Holder (and certain other conditions are met). Such a sale must also be reported
by the broker to the IRS, unless either (i) the broker determines that the
seller is an exempt recipient or (ii) the seller certifies its non-U.S. status
(and certain other conditions are met). Certification of the registered owner's
non-U.S. status would be made normally on an IRS Form W-8 under penalties of
perjury, although in certain cases it may be possible to submit other
documentary evidence.
Payment of the proceeds from the sale of a Note to or through a foreign
office of a broker will not be subject to information reporting or backup
withholding, except that if the broker is a United States person, a controlled
foreign corporation for United States tax purposes or a foreign person 50
percent or more of whose gross income from all sources for the three-year period
ending with the close of its taxable year preceding the payment was effectively
connected with a U.S. trade or business, information reporting may apply to such
payments. Payment of the proceeds from a sale of a Note to or through the U.S.
office of a broker is subject to information reporting and backup withholding
unless the holder or beneficial owner certifies as to its taxpayer
identification number or otherwise establishes an exemption from information
reporting and backup withholding.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
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PLAN OF DISTRIBUTION OF RETAIL MEDIUM-TERM NOTES
The Notes are being offered on a continuous basis for sale by Fleet through
Smith Barney Inc. (the "Agent"). If agreed to by Fleet and the Agent, the Agent
may utilize its best efforts on an agency basis to solicit offers to purchase
the Notes at 100% of the principal amount thereof, unless otherwise specified in
an applicable Pricing Supplement. Fleet will pay the Agent a commission which,
depending on the maturity of the Notes, will range from .20% to 3.00% of the
principal amount of any Note sold through the Agent. Commissions and discounts
with respect to Notes with maturities in excess of 30 years will be negotiated
between Fleet and the Agent at the time of such sale. Fleet may also sell Notes
directly to investors and other purchasers on its own behalf in those
jurisdictions where it is authorized to do so.
In addition, the Agent may offer the Notes it has purchased as principal to
other dealers for resale to investors, and may allow any portion of the discount
received in connection with such purchases from Fleet to such dealers. After the
initial public offering of Notes to be resold to investors and other purchasers,
the public offering price (in case of Notes to be resold on a fixed public
offering price basis), concession and discount may be changed.
Fleet reserves the right to withdraw, cancel or modify any offer to sell
Notes without notice and may reject orders in whole or in part whether placed
directly with Fleet or through the Agent. The Agent will have the right, in its
discretion reasonably exercised, to reject, in whole or in part, any offer to
purchase Notes received by it on an agency basis.
Unless otherwise provided in a Pricing Supplement, payment of the purchase
price of the Notes will be required to be made in immediately available funds in
The City of New York on the date of settlement.
The Agent, whether acting as agent or principal, may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). Fleet has agreed to indemnify the Agent against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that the Agent may be required to make in respect thereof. The Agent
may engage in transactions with, or perform services for, Fleet in the ordinary
course of business.
The Agent may from time to time purchase and sell Notes in the secondary
market, but it is not obligated to do so, and there can be no assurance that
there will be a secondary market for the Notes or liquidity in the secondary
market if one develops. From time to time, the Agent may make a market in the
Notes, but the Agent is not obligated to do so and may discontinue any
market-making at any time.
In addition to Notes being offered through the Agent as described herein,
other series of notes (including other series of Medium-Term Notes) that may
have terms identical or similar to the terms of the Notes may be concurrently
offered by Fleet on a continuous basis both inside and outside the United States
pursuant to one or more separate distribution agreements with the Agent or other
agents. Pursuant to such agreements, such agents may also purchase notes as
principal for their own account or for resale, and Fleet may make direct sales
of notes on its own behalf. Any notes so offered and sold in excess of certain
amounts will reduce correspondingly the maximum aggregate principal amount of
Notes that may be offered by this Prospectus Supplement and the accompanying
Prospectus.
EXPERTS
This section replaces the section entitled "Experts" in the accompanying
Prospectus.
The consolidated financial statements of Fleet appearing in Fleet's Current
Report on Form 8-K dated March 15, 1996, incorporated by reference herein (and
elsewhere in the Registration Statement) have been incorporated by reference
herein (and elsewhere in the Registration Statement) in reliance
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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 Bancorp appearing in Fleet's
Current Report on Form 8-K dated March 25, 1996, incorporated by reference
herein, 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 postretirement benefits other than pensions.
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<PAGE>
PROSPECTUS
DEBT SECURITIES AND WARRANTS TO PURCHASE DEBT SECURITIES
FLEET FINANCIAL GROUP, INC.
Fleet Financial Group, Inc., a Rhode Island corporation ("Fleet"), may offer
from time to time debt securities (the "Debt Securities"), which may be either
senior (the "Senior Debt Securities") or subordinated (the "Subordinated Debt
Securities") in priority of payment, and warrants to purchase Debt Securities
(the "Warrants"), having a public offering price of up to an aggregate of
$1,488,400,000 (or the equivalent thereof if any of the Securities are
denominated in a foreign currency or a foreign currency unit, such as European
Currency Units ("ECU")). If Debt Securities are issued at original issue
discount, Fleet may issue such higher principal amount as may be sold for an
initial public offering price of up to $1,488,400,000 (less the dollar amount of
any securities previously issued hereunder), or the equivalent thereof in one or
more foreign currencies, foreign currency units, or composite currencies. The
Debt Securities and Warrants (collectively, the "Securities") may be offered
separately or as units with other securities, in separate series, in amounts and
at prices and terms to be set forth in an accompanying Prospectus Supplement (a
"Prospectus Supplement"). In addition, the Debt Securities may be convertible
into shares of Fleet's preferred stock (the "Preferred Stock"), depositary
shares representing Preferred Stock (the "Depositary Shares") or common stock
(the "Common Stock") on terms to be set forth in the accompanying Prospectus
Supplement. Pursuant to the terms of the Registration Statement of which this
Prospectus constitutes a part, Fleet may also offer and sell shares of its
Preferred Stock, which may be represented by Depositary Shares, shares of its
Common Stock or warrants to purchase Preferred Stock or Common Stock (the
"Equity Warrants"). Any such Preferred Stock, Depositary Shares, Common Stock or
Equity Warrants will be offered and issued pursuant to the terms of a separate
Prospectus contained in such Registration Statement. The aggregate amount of
Debt Securities and Warrants that may be offered and sold pursuant hereto is
subject to reduction as the result of the sale of any Preferred Stock,
Depositary Shares, Common Stock or Equity Warrants pursuant to such separate
Prospectus.
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the accompanying Prospectus Supplement,
together with the terms of the offering of the Securities and the initial price
and net proceeds to Fleet from the sale thereof. The Prospectus Supplement will
include, with regard to the particular Securities, the following information:
(i) in the case of Debt Securities, the specific designation, priority,
aggregate principal amount, denominations, currency or currency unit for which
Debt Securities may be purchased, currency or currency unit in which the
principal and any interest on Debt Securities is payable, location of the
offering, maturity, rate (which may be fixed or variable) and time of payment of
interest, if any, terms for redemption, if any, at the option of Fleet or the
holder, terms for sinking or purchase fund payments, if any, whether any Debt
Securities which are Subordinated Debt Securities will be subordinated to other
indebtedness of Fleet, the initial public offering price, if any, of the Debt
Securities, terms relating to temporary or permanent global securities, special
provisions relating to Debt Securities in bearer form, provisions regarding
registration of transfer or exchange, provisions relating to the payment of any
additional amounts, any conversion or exchange provisions and provisions
regarding original issue discount securities; (ii) in the case of Warrants, the
duration, offering price, exercise price and detachability of any such warrants;
and (iii) in the case of all Securities, whether such Securities will be offered
separately or as a unit with other securities. The Prospectus Supplement will
also contain information, where applicable, about certain United States federal
income tax considerations relating to, and any listing on a securities exchange
of, the Securities covered by the Prospectus Supplement.
Fleet may sell Securities to or through underwriters or dealers, and also
may sell Securities directly to other purchasers or through agents. See "Plan of
Distribution". If any agents or underwriters are involved in the sale of any of
the Securities, their names, any applicable fee, commission, purchase price or
discount arrangements with them will be set forth, or will be calculable from
the information set forth, in the Prospectus Supplement. Fleet may sell
Securities in an offering within the United States ("United States Offering") or
outside the United States ("International Offering").
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALE OF SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
THE SECURITIES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF
ANY BANK OR NONBANK SUBSIDIARY OF FLEET AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, BANK INSURANCE FUND OR ANY OTHER GOVERNMENT
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is March 25, 1996.
<PAGE>
AVAILABLE INFORMATION
Fleet is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Proxy statements, reports
and other information concerning Fleet can be inspected and copied at the
Commission's office at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and the Commission's Regional Offices in New York (Suite
1300, Seven World Trade Center, New York, New York 10048) and Chicago
(Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661), and copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Common Stock is listed on the New York Stock
Exchange. Reports, proxy material and other information concerning Fleet also
may be inspected at the offices of the New York Stock Exchange, 20 Broad Street,
New York, New York 10005. This Prospectus does not contain all the information
set forth in the Registration Statement and Exhibits thereto which Fleet has
filed with the Commission under the Securities Act of 1933, as amended (the
"Act"), which may be obtained from the Public Reference Section of the
Commission at its principal office at 450 Fifth Street, N.W., Washington, D.C.
20549, upon payment of the prescribed fees, and to which reference is hereby
made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Fleet are incorporated
in this Prospectus by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1994, as
amended by a Form 10-K/A dated April 28, 1995.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995,
June 30, 1995 and September 30, 1995.
3. Current Reports on Form 8-K dated January 18, 1995, January 27, 1995,
February 20, 1995, February 21, 1995, April 13, 1995, May 11, 1995,
May 17, 1995, June 21, 1995, August 11, 1995, August 23, 1995, October
18, 1995, October 26, 1995, November 15, 1995, November 30, 1995,
December 19, 1995, January 17, 1996, January 19, 1996, February 8,
1996, February 21, 1996 and March 15, 1996.
4. The description of the Common Stock contained in a Registration
Statement filed by Industrial National Corporation (predecessor to
Fleet) on Form 8-B dated May 29, 1970, and any amendment or report
filed for the purpose of updating such description.
5. The description of the Preferred Share Purchase Rights contained in
Fleet's Registration Statement on Form 8-A dated November 29, 1990,
and any amendment or report filed for the purpose of updating such
description.
Such incorporation by reference shall not be deemed to specifically
incorporate by reference the information referred to in Item 402(a)(8) of
Regulation S-K.
All documents filed with the Commission by Fleet pursuant to Sections 13, 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Securities offered hereby are
incorporated herein by reference and such documents shall be deemed to be a part
hereof from the date of filing of such documents. Any statement contained in
this Prospectus or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
ANY PERSON RECEIVING A COPY OF THIS PROSPECTUS MAY OBTAIN, WITHOUT CHARGE,
UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OF THE DOCUMENTS INCORPORATED BY
REFERENCE HEREIN (OTHER THAN THE EXHIBITS TO SUCH DOCUMENTS). WRITTEN REQUESTS
SHOULD BE MAILED TO INVESTOR RELATIONS DEPARTMENT, FLEET FINANCIAL GROUP, INC.,
ONE FEDERAL STREET, BOSTON, MASSACHUSETTS 02110. TELEPHONE REQUESTS MAY BE
DIRECTED TO (617) 292-2000.
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FLEET FINANCIAL GROUP, INC.
GENERAL
Fleet is a diversified financial services company organized under the laws
of the State of Rhode Island. At December 31, 1995, Fleet had total assets of
$84.4 billion, total deposits of $57.1 billion and stockholders' equity of $6.4
billion.
Fleet is engaged in a general commercial banking and trust business
throughout the states of New York, Rhode Island, Connecticut, Massachusetts,
Maine, New Hampshire and Florida through its banking subsidiaries, Fleet Bank
("Fleet-NY"); Fleet Bank of New York, National Association ("FBNY"); Fleet
National Bank ("Fleet-RI"); Fleet Bank, National Association ("Fleet-CT"); Fleet
National Bank of Connecticut ("FNB-CT"); Fleet Bank of Massachusetts, National
Association ("Fleet-MA"); Fleet National Bank of Massachusetts ("FNB-MA"); Fleet
Bank of Maine; Fleet Bank-NH and Fleet Bank, F.S.B.
Fleet provides, through its nonbanking subsidiaries, a variety of financial
services, including mortgage banking, asset-based lending, equipment leasing,
consumer finance, real estate financing, securities brokerage services,
investment banking, investment advice and management, data processing and
student loan servicing.
On February 20, 1995, Fleet and Shawmut National Corporation ("Shawmut")
entered into an Agreement and Plan of Merger (the "Merger Agreement") providing
for the merger of Shawmut with and into Fleet (the "Shawmut Merger"). The
Shawmut Merger was consummated on November 30, 1995. For additional information
regarding the Shawmut Merger and Fleet's supplemental consolidated financial
statements giving effect thereto, see Fleet's Current Reports on Form 8-K dated
February 20, 1995, February 21, 1995, April 13, 1995, May 17, 1995, June 21,
1995, August 11, 1995, August 23, 1995, November 15, 1995, November 30, 1995 and
January 19, 1996, which are incorporated by reference herein. Unless otherwise
noted, all of Fleet's historical financial information set forth in this
Prospectus Supplement has been restated to give effect to the Shawmut Merger for
all periods presented.
On December 19, 1995, Fleet entered into an Agreement and Plan of Merger
(the "NatWest Merger Agreement") with National Westminster Bank Plc ("NatWest
Plc") providing for the merger (the "NatWest Merger") of FBNY with and into
NatWest Bank, N.A. ("NatWest Bank"), a national bank operating in New York and
New Jersey. NatWest Bank will continue its existence following the closing under
the name "Fleet Bank of New York, National Association" (the "Surviving Bank").
See "Recent Developments--NatWest Merger". For additional information regarding
the NatWest Merger, including a copy of the NatWest Merger Agreement and certain
historical and pro forma financial information related thereto, see Fleet's
Current Reports on Form 8-K dated December 19, 1995, February 8, 1996 and March
15, 1996, which are incorporated by reference herein.
The principal office of Fleet is located at One Federal Street, Boston,
Massachusetts 02110, telephone number (617) 292-2000.
REGULATORY MATTERS
General. 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.
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There are various statutory and regulatory limitations on the extent to
which banking subsidiaries of Fleet can finance or otherwise transfer funds to
Fleet or its nonbanking subsidiaries, whether in the form of loans, extensions
of credit, investments or asset purchases. Such transfers by any subsidiary bank
to Fleet or any nonbanking subsidiary are limited in amount to 10% of the bank's
capital and surplus and, with respect to Fleet and all such nonbanking
subsidiaries, to an aggregate of 20% of each such bank's capital and surplus.
Furthermore, loans and extensions of credit are required to be secured in
specified amounts and are required to be on terms and conditions consistent with
safe and sound banking practices.
In addition, there are regulatory limitations on the payment of dividends
directly or indirectly to Fleet from its banking subsidiaries. Under applicable
banking statutes, at December 31, 1995, Fleet's banking subsidiaries could have
declared additional dividends of approximately $559 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 will be assumed by the bankruptcy trustee and
entitled to a priority of payment.
FIRREA.
As a result of the enactment of the Financial Institutions Reform, Recovery
and Enforcement Act ("FIRREA") on August 9, 1989, any or all of Fleet's
subsidiary banks can be held liable for any loss incurred by, or reasonably
expected to be incurred by, the FDIC after August 9, 1989, in connection with
(a) the default of any other of Fleet's subsidiary banks or (b) any assistance
provided by the FDIC to any other of Fleet's subsidiary banks in danger of
default. "Default" is defined generally as the appointment of a conservator or
receiver and "in danger of default" is defined generally as the existence of
certain conditions indicating that a "default" is likely to occur without
regulatory assistance.
FDICIA.
The Federal Deposit Insurance Corporation Improvement Act of 1991 (the
"FDICIA") provides for, among other things, increased funding for the Bank
Insurance Fund (the "BIF") of the FDIC and expanded regulation of depository
institutions and their affiliates, including parent holding companies. A summary
of certain provisions of FDICIA and its implementing regulations is provided
below.
Prompt Corrective Action. The FDICIA provides the federal banking agencies
with broad powers to take prompt corrective action to resolve problems of
insured depository institutions, depending upon a particular institution's level
of capital. The FDICIA establishes five tiers of capital measurement for
regulatory purposes ranging from "well-capitalized" to "critically
undercapitalized." A depository institution may be deemed to be in a
capitalization category that is lower than is indicated by its actual capital
position under certain circumstances. At December 31, 1995, each of Fleet's
subsidiary depository institutions was classified as "well-capitalized" under
the prompt corrective action regulations described above.
Brokered Deposits. Under the FDICIA, a depository institution that is
well-capitalized may accept brokered deposits. A depository institution that is
adequately capitalized may accept brokered deposits only if it obtains a waiver
from the FDIC, and may not offer interest rates on deposits
4
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"significantly higher" than those prevailing rate in its market. An
undercapitalized depository institution may not accept brokered deposits. In
Fleet's opinion, these limitations do not have a material effect on Fleet.
Safety and Soundness Standards. The FDICIA, as amended, directs each federal
banking agency to prescribe safety and soundness standards for depository
institutions relating to internal controls, information systems, internal audit
systems, loan documentation, credit underwriting, interest rate exposure, asset
growth, compensation, asset-quality, earnings and stock valuation. Final
interagency regulations to implement these new safety and soundness standards
have recently been adopted by the federal banking agencies. In July 1995, the
federal banking agencies published proposed guidelines establishing safety and
soundness standards concerning asset quality and earnings. If adopted in final
form, these proposed guidelines will be incorporated into the Interagency
Guidelines Establishing Standards for Safety and Soundness. The ultimate
cumulative effect of these standards cannot currently be forecast.
The FDICIA also contains a variety of other provisions that may affect
Fleet's operations, including new reporting requirements, regulatory standards
for real estate lending, "truth in savings" provisions, and the requirement that
a depository institution give 90 days' prior notice to customers and regulatory
authorities before closing any branch.
Capital Guidelines
Under the Federal Reserve Board's capital guidelines, the minimum ratio of
total capital to risk-adjusted assets (including certain off-balance sheet
items, such as standby letters of credit) is 8%. At least half of the total
capital is to be comprised of common equity, retained earnings, minority
interests in the equity accounts of consolidated subsidiaries and a limited
amount of cumulative and noncumulative perpetual preferred stock, less
deductible intangibles ("Tier 1 capital"). The remainder may consist of
perpetual debt, mandatory convertible debt securities, a limited amount of
subordinated debt, other preferred stock and a limited amount of loan loss
reserves ("Tier 2 capital"). In addition, the Federal Reserve Board requires a
leverage ratio (Tier 1 capital to average quarterly assets, net of goodwill) of
3% for bank holding companies that meet certain specified criteria, including
that they have the highest regulatory rating. The rule indicates that the
minimum leverage ratio should be 1% to 2% higher for holding companies
undertaking major expansion programs or that do not have the highest regulatory
rating. Fleet's banking subsidiaries are subject to similar capital requirements
except that preferred stock must be noncumulative to qualify as Tier 1 capital.
The federal banking agencies continue to consider capital requirements
applicable to banking organizations. Effective September 1, 1995, the federal
banking agencies adopted amendments to their risk-based capital regulations to
provide for the consideration of interest rate risk in the determination of a
bank's minimum capital requirements. The amendments require that banks
effectively measure and monitor their interest rate risk and that they maintain
capital adequate for that risk. Under the amendments, banks with excess interest
rate risk would be required to maintain additional capital beyond that generally
required. In addition, effective January 17, 1995, the federal banking agencies
adopted amendments to their risk-based capital standards to provide for the
concentration of credit risk and certain risks arising from nontraditional
activities, as well as a bank's ability to manage these risks, as important
factors in assessing a bank's overall capital adequacy.
As of December 31, 1995, Fleet's capital ratios on a historical basis
exceeded all minimum regulatory capital requirements.
Under federal banking laws, failure to meet the minimum regulatory capital
requirements could subject a banking institution to a variety of enforcement
remedies available to federal regulatory authorities, including the termination
of deposit insurance by the FDIC and seizure of the institution.
5
<PAGE>
Interstate Banking and Branching Legislation
On September 29, 1994, President Clinton signed the Riegle-Neal Interstate
Banking and Branching Efficiency Act of 1994 (the "Interstate Act") into law.
The Interstate Act facilitates the interstate expansion and consolidation of
banking organizations by permitting (i) beginning one year after enactment of
the legislation, bank holding companies that are adequately capitalized and
managed to acquire banks located in states outside their home states regardless
of whether such acquisitions are authorized under the law of the host state,
(ii) the interstate merger of banks after June 1, 1997, subject to the right of
individual states to "opt in" or "opt out" of this authority prior to such date,
(iii) banks to establish new branches on an interstate basis provided that such
action is specifically authorized by the law of the host state, (iv) foreign
banks to establish, with approval of the appropriate regulators in the United
States, branches outside their home states to the same extent that national or
state banks located in such state would be authorized to do so and (v) beginning
September 29, 1995, banks to receive deposits, renew time deposits, close loans,
service loans and receive payments on loans and other obligations as agent for
any bank or thrift affiliate, whether the affiliate is located in the same or
different state. Connecticut and Rhode Island, which are two states in which
Fleet subsidiaries conduct banking operations, have adopted legislation opting
into the interstate provisions of the Interstate Act. Fleet has recently filed
applications for approval by the Office of the Comptroller of the Currency to
merge its banking subsidiaries in Connecticut, Massachusetts and Rhode Island in
order to achieve cost savings and to increase convenience to its customers in
those states.
DEPOSIT INSURANCE ASSESSMENTS
The deposits of each of Fleet's subsidiary banks are insured up to
regulatory limits by the FDIC and, accordingly, are subject to deposit insurance
assessments to maintain the Bank Insurance Fund ("BIF") administered by the
FDIC. The FDIC has adopted regulations establishing a permanent risk-related
deposit insurance assessment system. Under this system, the FDIC places each
insured bank in one of nine risk categories based on (a) the bank's
capitalization and (b) supervisory evaluations provided to the FDIC by the
institution's primary federal regulator. Each insured bank's insurance
assessment rate is then determined by the risk category in which it is
classified by the FDIC. On November 14, 1995, the FDIC voted to decrease
premiums effective January 1, 1995. The decrease lowered the rate of deposit
insurance premiums by $.04 per $100 of deposits for banks in each risk
assessment category. As a result, banks in the highest capital and supervisory
evaluation categories have an assessment rate of $0.00, and pay only the minimum
assessment of $2,000 per year for deposit insurance. Banks in the lowest capital
and supervisory evaluation categories are subject to a rate of $0.27 per $100 of
deposits. There is no guarantee that the rate of deposit insurance premiums will
not increase in the future.
These assessment rates also reflect the amount the FDIC has determined is
necessary to maintain the reserve ratio of BIF of 1.25% of total insured bank
deposits. The FDIC has announced that this reserve ratio was achieved during
1995. However, due primarily to the fact that the reserve ratio of the FDIC's
Savings Association Insurance Fund ("SAIF") is not projected to reach the
required level of 1.25% for several years, the FDIC has made a proposal to
Congress to (1) capitalize the SAIF through a special up-front cash assessment
on SAIF deposits; (2) spread the responsibility for payment to the Financing
Corporation created under Title III of the Competitive Equality Banking Act of
1987 proportionally over all FDIC-insured institutions; and (3) as soon as
practicable, merge the BIF and the SAIF. On November 14, 1995, the Board of
Directors of the FDIC voted to retain the existing assessment rate schedule
applicable to members of the SAIF for the first half of 1996.
Fleet's subsidiary banks do not hold significant amounts of deposits insured
by the SAIF.
6
<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>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1995 1994 1993 1992 1991*
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding Interest on Deposits...................... 1.78x 2.33x 2.36x 1.90x *
Including Interest on Deposits...................... 1.34 1.62 1.56 1.26 *
</TABLE>
- ------------
* 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
Unless otherwise indicated in the applicable Prospectus Supplement, Fleet
intends to use the net proceeds from the sale of the Securities for general
corporate purposes, principally to extend credit to, or fund investments in, its
subsidiaries. The precise amounts and timing of extensions of credit to, and
investments in, such subsidiaries will depend upon the subsidiaries' funding
requirements and the availability of other funds. Pending such applications, the
net proceeds may be temporarily invested in marketable securities or applied to
the reduction of Fleet's short-term indebtedness. Based upon the historic and
anticipated future growth of Fleet and the financial needs of its subsidiaries,
Fleet may engage in additional financings of a character and amount to be
determined as the need arises.
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<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will constitute either Senior Debt Securities or
Subordinated Debt Securities of Fleet. The Senior Debt Securities will be issued
under an indenture dated as of October 1, 1992 (the "Senior Indenture"), between
Fleet and The First National Bank of Chicago as Senior Trustee (the "Senior
Trustee"). The Subordinated Debt Securities will be issued under an indenture
dated as of October 1, 1992 (as supplemented by a First Supplemental Indenture
dated November 30, 1992, the "Subordinated Indenture"), between Fleet and The
First National Bank of Chicago as Subordinated Trustee (the "Subordinated
Trustee"). The Senior Indenture and Subordinated Indenture are collectively
referred to herein as the "Indentures". A copy of each of the Indentures are
exhibits to the Registration Statement of which this Prospectus forms a part.
The following description of Debt Securities relates to Debt Securities to be
issued in connection with either a United States Offering or an International
Offering, except, in the case of an International Offering, as otherwise
specified in the Prospectus Supplement relating thereto.
The following is a summary of all material terms set forth in the
Indentures. Such summaries do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, all the provisions of the
Indentures, including the definitions therein of certain terms. Wherever
particular Sections or defined terms of the Indentures are referred to, it is
intended that such Sections or definitions shall be incorporated herein by
reference. The following sets forth certain general terms and provisions of the
Debt Securities to which any Prospectus Supplement may relate. The particular
terms of the Debt Securities offered by any Prospectus Supplement and the
extent, if any, to which such general provisions may apply to the Debt
Securities so offered, will be described in the Prospectus Supplement relating
to such Offered Securities.
Because Fleet is a holding company, its rights and the rights of its
creditors, including the Holders of the Debt Securities offered hereby, to
participate in the assets of any subsidiary upon the latter's liquidation or
reorganization will be subject to the prior claims of the subsidiary's creditors
except to the extent that Fleet may itself be a creditor with recognized claims
against the subsidiary.
GENERAL
The Debt Securities to be offered by this Prospectus are limited to the
amounts described on the cover of this Prospectus. Fleet expects from time to
time to incur additional indebtedness constituting Senior Indebtedness and Other
Financial Obligations (each as defined in the Subordinated Indenture). The
Indentures, however, do not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provide that Debt Securities may
be issued from time to time in one or more series. The Debt Securities will be
unsecured obligations of Fleet. Neither the Indentures nor the Debt Securities
will limit or otherwise restrict the amount of other indebtedness (including
Other Financial Obligations) which may be incurred or other securities which may
be issued by Fleet or any of its subsidiaries. The Senior Debt Securities will
rank on a parity with all other unsecured unsubordinated indebtedness of Fleet
while the indebtedness represented by the Subordinated Debt Securities will be
subordinated as described below under "Subordinated Debt Securities".
As used herein, Debt Securities shall include securities denominated in U.S.
dollars or, at the option of Fleet if so specified in the applicable Prospectus
Supplement, in any other currency, including composite currencies such as the
ECU. Debt Securities of a series may be issuable in individual registered form
without coupons, in the form of one or more global securities, or, in bearer
form with or without coupons. Such bearer securities will be offered only to
non-United States persons and to offices located outside of the United States of
certain United States financial institutions.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for the following terms, where
applicable, of the Debt Securities in respect of which this
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<PAGE>
Prospectus is being delivered: (1) the title of the Debt Securities; (2) the
limit, if any, on the aggregate principal amount or initial public offering
price of the Debt Securities; (3) the priority of payment of such Debt
Securities; (4) the price or prices (which may be expressed as a percentage of
the aggregate principal amount thereof) at which the Debt Securities will be
issued; (5) the date or dates on which the Debt Securities will mature; (6) the
rate or rates (which may be fixed or variable) per annum at which the Debt
Securities will bear interest, if any, or the method of determining the same;
(7) the date from which such interest, if any, on the Debt Securities will
accrue, the date or dates on which such interest, if any, will be payable, the
date on which payment of such interest, if any, will commence and the Regular
Record Dates for such Interest Payment Dates, if any; (8) the extent to which
any of the Debt Securities will be issuable in temporary or permanent global
form and, if so, the identity of the depositary for such global Debt Security,
or the manner in which any interest payable on a temporary or permanent global
Debt Security will be paid; (9) the dates, if any, on which, and the price or
prices at which, the Debt Securities will, pursuant to any mandatory sinking
fund provisions, or may, pursuant to any optional sinking fund or to any
purchase fund provisions, be redeemed by Fleet, and the other detailed terms and
provisions of such sinking and/or purchase funds; (10) the date, if any, after
which, and the price or prices at which, the Debt Securities may, pursuant to
any optional redemption provisions, be redeemed at the option of Fleet or of the
Holder thereof and the other detailed terms and provisions of such optional
redemption; (11) the denomination or denominations in which such Debt Securities
are authorized to be issued; (12) the currency, currencies or units (including
ECU) in which the Debt Securities are denominated, which may be in United States
dollars, a foreign currency or units of two or more foreign currencies; (13) the
currency, currencies or units (including ECU) for which the Debt Securities may
be purchased and in which principal, premium, if any, and interest may be
payable; (14) whether any of the Debt Securities will be issued in bearer form
and, if so, any limitations on issuance of such bearer Debt Securities
(including exchange for registered Debt Securities of the same series); (15)
information with respect to book-entry procedures; (16) whether any of the Debt
Securities will be issued as Original Issue Discount Securities; (17) any index
used to determine the amount of payments of principal of, premium, if any, and
interest on such Debt Securities; (18) each office or agency where, subject to
the terms of the applicable Indenture, such Debt Securities may be presented for
registration of transfer or exchange; (19) whether any of the Debt Securities
will be subject to defeasance in advance of the Redemption Date or Stated
Maturity thereof; (20) whether the subordination provisions summarized below or
different subordination provisions, including a different definition of "Senior
Indebtedness", "Entitled Persons", "Existing Subordinated Indebtedness", or
"Other Financial Obligations", shall apply to the Debt Securities; (21) whether
any of the Debt Securities will be convertible or exchangeable into other
securities of Fleet and the terms of such conversion or exchange, including the
conversion price and applicable conversion or expiration dates and (22) any
other terms of the series (which will not be inconsistent with the provisions of
the applicable Indenture).
Special federal income tax and other considerations relating to Debt
Securities denominated in foreign currencies or units of two or more foreign
currencies will be described in the applicable Prospectus Supplement. In the
event Fleet offers Debt Securities denominated in foreign currencies or units of
two or more foreign currencies, an opinion with respect to tax matters and
consent of counsel will be filed in a Form 8-K or as an amendment to the
Registration Statement of which this Prospectus forms a part.
Debt Securities may be issued as Original Issue Discount Securities (bearing
no interest or interest at a rate which at the time of issuance is below market
rates) to be sold at a substantial discount below their principal amount. In the
event of an acceleration of the maturity of any Original Issue Discount
Security, the amount payable to the Holder of such Original Issue Discount
Security upon such acceleration will be determined in accordance with the
applicable Prospectus Supplement, the terms of such security and the relevant
Indenture, but will be an amount less than the amount payable at the
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<PAGE>
maturity of the principal of such Original Issue Discount Security. Special
federal income tax and other considerations relating thereto will be described
in the applicable Prospectus Supplement.
REGISTRATION AND TRANSFER
Unless otherwise indicated in the applicable Prospectus Supplement, each
series of Debt Securities will be issued in registered form only, without
coupons. The Indentures, however, provide that Fleet may also issue Debt
Securities in bearer form only, or in both registered and bearer form. Debt
Securities issued in bearer form shall have interest coupons attached, unless
issued as zero coupon securities. Debt Securities in bearer form shall not be
offered, sold, resold or delivered in connection with their original issuance in
the United States or to any United States person (as defined below) other than
offices located outside the United States of certain United States financial
institutions. As used above, "United States person" means any citizen or
resident of the United States, any corporation, partnership or other entity
created or organized in or under the laws of the United States, or any estate or
trust, the income of which is subject to United States federal income taxation
regardless of its source, and "United States" means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction. Purchasers of Debt
Securities in bearer form will be subject to certification procedures and may be
affected by certain limitations under United States tax laws. Such procedures
and limitations will be described in the Prospectus Supplement relating to the
offering of the Debt Securities in bearer form.
Debt Securities in registered form may be presented for transfer or exchange
(with form of transfer duly endorsed thereon) for other Debt Securities of the
same series at the offices of the Trustee according to the terms of the
applicable Indenture. In no event, however, will Debt Securities in registered
form be exchangeable for Debt Securities in bearer form. Fleet may designate the
main office of Fleet-RI, 111 Westminster Street, Providence, Rhode Island 02903,
as an office where the transfer of the Debt Securities may be registered.
Unless otherwise indicated in the applicable Prospectus Supplement, Debt
Securities issued in bearer form will be issued in denominations of $10,000 and
$50,000.
Unless otherwise indicated in the applicable Prospectus Supplement, the Debt
Securities issued in fully registered form will be issued without coupons and in
denominations of $1,000 or integral multiples thereof.
No service charge will be made for any transfer or exchange of the Debt
Securities but Fleet may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
PAYMENT AND PLACE OF PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest, if any, on, Debt Securities in
registered form will be made at the office of the Trustee, except that at the
option of Fleet, interest may be paid by mailing a check to the address of the
person entitled thereto as it appears on the Security Register (Sections 301,
305 and 1002 in the Senior Indenture; Sections 3.01, 3.05 and 5.02 in the
Subordinated Indenture). Fleet may designate the main office of Fleet-RI, 111
Westminster Street, Providence, Rhode Island 02903, as an office where
principal, premium, if any, and interest, if any, may be paid.
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest, if any, on Debt Securities in
bearer form will be made, subject to any applicable laws and regulations, at
such office outside the United States as specified in the applicable Prospectus
Supplement and as Fleet may designate from time to time, at the option of the
Holder, by check or by transfer to an account maintained by the payee with a
bank located outside the United
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<PAGE>
States. Unless otherwise indicated in the applicable Prospectus Supplement,
payment of interest on Debt Securities in bearer form will be made only against
surrender of the coupon relating to such Interest Payment Date. No payment with
respect to any Debt Security in bearer form will be made at any office or agency
of Fleet in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities ("Global Securities") that will be
deposited with, or on behalf of, a depository (the "Depository") identified in
the Prospectus Supplement relating to such series. Global Securities may be
issued in either registered or bearer form and in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for individual
certificates evidencing Debt Securities in definitive form represented thereby,
a Global Security may not be transferred except as a whole by the Depository for
such Global Security to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository or by such
Depository or any such nominee to a successor of such Depository or a nominee of
such successor.
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series.
MODIFICATION AND WAIVER
Each Indenture provides that modifications and amendments thereof may be
made by Fleet and the Trustees with the consent of the Holders of 66 2/3% in
aggregate principal amount of the Outstanding Securities of each series under
such Indenture affected by such modification or amendment; provided, however,
that no such modification or amendment may, without the consent of the Holder of
each Outstanding Security affected thereby, (a) change the stated maturity date
of the principal of, or any installment of principal or interest on, any
Outstanding Security, (b) reduce the principal amount of, the rate of interest
thereon, or any premium payable upon the redemption thereof, (c) reduce the
amount of principal of an Original Issue Discount Security payable upon
acceleration of the maturity thereof, (d) change the place or currency of
payment of principal of, or any premium or interest on, any Outstanding
Security, (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Outstanding Security, or (f) reduce the
percentage in principal amount of Outstanding Securities of any series, the
consent of whose Holders is required for modification or amendment of the
Indenture or for waiver of compliance with certain provisions of the Indenture
or for waiver of certain defaults.
The Holders of 50% in aggregate principal amount of the Outstanding
Securities of each series may, on behalf of all Holders of Debt Securities of
that series, waive, insofar as that series is concerned, compliance by Fleet
with certain restrictive provisions of the applicable Indenture. The Holders of
a majority in aggregate principal amount of the Outstanding Securities of each
series may, on behalf of all Holders of Debt Securities of that series, waive
any past default under the applicable Indenture with respect to Debt Securities
of that series, except a default in the payment of principal or any premium or
any interest or in respect of a provision which under the applicable Indenture
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of that series affected.
Modification and amendment of the Indentures may be made by Fleet and the
Trustee without the consent of any Holder for any of the following purposes: (i)
to evidence the succession of another Person to Fleet; (ii) to add to the
covenants of Fleet for the benefit of the Holders of all or any series of
Securities; (iii) to add Events of Default; (iv) to add or change any provisions
of any of the Indentures to facilitate the issuance of bearer securities; (v) to
change or eliminate any of the provisions of the applicable Indenture, provided
that any such change or elimination shall become effective only when
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<PAGE>
there is no Outstanding Security of any series which is entitled to the benefit
of such provision; (vi) to establish the form or terms of Securities of any
series; (vii) to evidence and provide for the acceptance of appointment by a
successor Trustee; (viii) to cure any ambiguity, to correct or supplement any
provision in the applicable Indenture, or to make any other provisions with
respect to matters or questions arising under such Indenture, provided such
action shall not adversely affect the interests of Holders of Debt Securities of
any series in any material respect under such Indenture; (ix) to convey,
transfer, assign, mortgage or pledge any property to or with the Trustee or (x)
to provide for conversion rights of the Holders of the Securities of any series
to enable such Holders to convert such Securities into other securities of
Fleet.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Unless otherwise set forth in the applicable Prospectus Supplement, each
Indenture provides that Fleet may consolidate or merge with or into, or transfer
its assets substantially as an entirety to, any corporation organized under the
laws of any domestic jurisdiction, provided that the successor corporation
assumes Fleet's obligations on the Debt Securities under such Indenture, and
that after giving effect to the transaction no Event of Default, and no event
which, after notice or lapse of time, would become an Event of Default, shall
have occurred and be continuing, and that certain other conditions are met.
Neither Indenture provides for any right of acceleration in the event of a
consolidation, merger, sale of all or substantially all of the assets,
recapitalization or change in stock ownership of Fleet. In addition, the
Indentures do not contain any provision which would protect the Holders of Debt
Securities against a sudden and dramatic decline in credit quality resulting
from takeovers, recapitalizations or similar restructurings.
REGARDING THE TRUSTEE
Fleet maintains banking relations with the Trustee. In addition, Fleet's
banking subsidiaries maintain deposit accounts and correspondent banking
relations with the Trustee.
INTERNATIONAL OFFERING
If specified in the applicable Prospectus Supplement, Fleet may issue Debt
Securities in an International Offering. Such Debt Securities may be issued in
bearer form and will be described in the applicable Prospectus Supplement. If
such Debt Securities are Senior Debt Securities, such Debt Securities will be
issued pursuant to a supplement to the Senior Indenture. If Debt Securities are
issued in bearer form, the applicable Prospectus Supplement will contain the
relevant provisions.
In connection with any such International Offering, Fleet will designate
paying agents, registrars or other agents with respect to the Debt Securities,
as specified in the applicable Prospectus Supplement.
Debt Securities issued in an International Offering may be subject to
certain selling restrictions which will be described in the applicable
Prospectus Supplement. Such Debt Securities may be listed on one or more foreign
stock exchanges as described in the applicable Prospectus Supplement. Special
United States tax and other considerations, if any, applicable to an
International Offering will be described in the applicable Prospectus
Supplement.
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<PAGE>
SENIOR DEBT SECURITIES
The Senior Debt Securities will be direct, unsecured obligations of Fleet
and will rank pari passu with all outstanding senior indebtedness of Fleet.
EVENTS OF DEFAULT
The following are Events of Default under the Senior Indenture with respect
to Senior Debt Securities of any series: (a) failure to pay principal of or any
premium on any Senior Debt Security of that series when due; (b) failure to pay
any interest on any Senior Debt Security of that series when due, continued for
30 days; (c) failure to deposit any sinking fund payment, when due, in respect
of any Senior Debt Security of that series; (d) failure to perform any other
covenant of Fleet in the Senior Indenture (other than any covenant included in
the Indenture solely for the benefit of a Series of Debt Securities other than
that Series), continued for 60 days after written notice as provided in the
Senior Indenture; (e) certain events in bankruptcy, insolvency or
reorganization; and (f) any other Event of Default provided with respect to
Senior Debt Securities of that series. (Section 501) If an Event of Default with
respect to Senior Debt Securities of any series at the time outstanding occurs
and is continuing, either the Senior Trustee or the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities of that series may
declare the principal amount (or, if the Senior Debt Securities of that series
are Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of that series) of all the Senior Debt Securities
of that series to be due and payable immediately. At any time after a
declaration of acceleration with respect to Senior Debt Securities of any series
has been made, but before a judgment or decree based on acceleration has been
obtained, the Holders of a majority in aggregate principal amount of Outstanding
Securities of that series may, on behalf of all Holders of that series, under
certain circumstances, rescind and annul such acceleration. (Section 502)
The Senior Indenture provides that, subject to the duty of the Senior
Trustee during default to act with the required standard of care, the Senior
Trustee will be under no obligation to exercise any of its rights or powers
under the Senior Indenture at the request or direction of any of the Holders,
unless such Holders shall have offered to the Senior Trustee reasonable
indemnity. (Section 603) Subject to such provisions for the indemnification of
the Senior Trustee, the Holders of a majority in aggregate principal amount of
the Outstanding Senior Debt Securities of any series will have the right to
direct the time, method and place of conducting any proceedings for any remedy
available to the Senior Trustee, or exercising any trust or power conferred on
the Senior Trustee, with respect to the Senior Debt Securities of that series.
(Section 512)
No Holder of any Senior Debt Security of any series will have any right to
institute any proceeding with respect to the Senior Indenture or for any remedy
thereunder, unless (a) such Holder shall have previously given to the Senior
Trustee written notice of a continuing Event of Default with respect to Senior
Debt Securities of that series, (b) the Holders of not less than 25% in
aggregate principal amount of the Outstanding Senior Debt Securities of that
series also shall have made written request and offered reasonable indemnity to
the Senior Trustee to institute such proceeding as trustee, (c) the Senior
Trustee shall not have received from the Holders of a majority in principal
amount of the Outstanding Senior Debt Securities of that series a direction
inconsistent with such request and (d) the Senior Trustee shall have failed to
institute such proceeding within 60 days. (Section 507) However, the Holder of
any Senior Debt Security will have an absolute right to receive payment of the
principal of (and premium, if any) and interest, if any, on such Senior Debt
Security on or after the due dates expressed in such Senior Debt Security and to
institute suit for the enforcement of any such payment. (Section 508)
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<PAGE>
Fleet is required to furnish to the Senior Trustee annually a statement as
to performance by Fleet of certain of its obligations under the Indenture and as
to any default in such performance. (Section 1009)
RESTRICTIVE COVENANTS
Disposition of Voting Stock of Certain Subsidiaries. The Senior Indenture
contains a covenant that Fleet will not, and will not permit any Subsidiary (as
defined in the Senior Indenture) to sell, assign, pledge, transfer or otherwise
dispose of, or permit the issuance of any shares of Voting Stock (as defined in
the Senior Indenture) of, or any securities convertible into, or options,
warrants or rights to subscribe for or purchase shares of Voting Stock of, a
Principal Constituent Bank (as defined below) or any Subsidiary which owns
shares of, or securities convertible into, or options, warrants or rights to
subscribe for or purchase shares of Voting Stock of a Principal Constituent
Bank, provided that dispositions made by Fleet or any Subsidiary (i) acting in a
fiduciary capacity for any person other than Fleet or any Subsidiary or (ii) to
Fleet or any of its wholly-owned (except for directors' qualifying shares)
Subsidiaries, shall not be prohibited. Notwithstanding the limitations described
above, the Senior Indenture provides that Fleet may, and may permit its
Subsidiaries to, sell, assign, pledge, transfer or otherwise dispose of, or
issue such shares or securities (1) if required by law for the qualification of
Directors, (2) for purposes of compliance with an order of a court or regulatory
authority, (3) if in connection with a merger of, or consolidation of, a
Principal Constituent Bank with or into a wholly-owned Subsidiary or a
Constituent Bank (as defined below), provided that Fleet holds, directly or
indirectly, in the entity surviving such merger or consolidation, not less than
the percentage of Voting Stock it held in the Principal Constituent Bank prior
to such action, (4) if such disposition or issuance is for fair market value
(determined by the Board of Directors of Fleet) and, if after giving effect to
such disposition or issuance (and any potential dilution), Fleet and its
wholly-owned Subsidiaries will own directly not less than 80% of the Voting
Stock of such Principal Constituent Bank or Subsidiary, (5) if a Principal
Constituent Bank sells additional shares of Voting Stock to its stockholders at
any price, if, after such sale, Fleet holds directly or indirectly not less than
the percentage of Voting Stock of such Principal Constituent Bank it owned prior
to such sale or (6) if Fleet or a Subsidiary pledges or creates a lien on the
Voting Stock of a Principal Constituent Bank to secure a loan or other extension
of credit by a Constituent Bank subject to Section 23A of the Federal Reserve
Act. A "Constituent Bank" is a Bank which is a Subsidiary. A "Principal
Constituent Bank" is Fleet-RI and any other Constituent Bank designated as a
Principal Constituent Bank. Any designation of a Constituent Bank as a Principal
Constituent Bank with respect to Debt Securities of any series shall remain
effective until the Debt Securities of such series are no longer outstanding. As
of the date of this Prospectus, no Constituent Banks (other than Fleet-RI) have
been designated as Principal Constituent Banks with respect to any series of
Debt Securities.
Limitation Upon Liens on Certain Capital Stock. The Senior Indenture
contains a covenant that Fleet will not at any time, directly or indirectly,
create, assume, incur or suffer to be created, assumed or incurred or to exist
any mortgage, pledge, encumbrance or lien or charge of any kind upon (1) any
shares of capital stock of any Principal Constituent Bank (other than directors'
qualifying shares), or (2) any shares of capital stock of a Subsidiary which
owns capital stock of any Principal Constituent Bank; provided, however, that,
notwithstanding the foregoing, Fleet may incur or suffer to be incurred or to
exist upon such capital stock (a) liens for taxes, assessments or other
governmental charges or levies which are not yet due or are payable without
penalty or of which the amount, applicability or validity is being contested by
Fleet in good faith by appropriate proceedings and Fleet shall have set aside on
its books adequate reserves with respect thereto or (b) the lien of any
judgement, if such judgment shall not have remained undischarged, or unstayed on
appeal or otherwise, for more than 60 days.
DEFEASANCE
Fleet may terminate certain of its obligations under the Senior Indenture
with respect to the Senior Debt Securities of any series on the terms and
subject to the conditions contained in the Senior
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Indenture, by (a) depositing irrevocably with the Senior Trustee as trust funds
in trust (i) in the case of Senior Debt Securities denominated in a foreign
currency, money in such foreign currency or Foreign Government Obligations (as
defined below) of the foreign government or governments issuing such foreign
currency, or (ii) in the case of Senior Debt Securities denominated in U.S.
dollars, U.S. dollars or U.S. Government Obligations (as defined below), in each
case in an amount which through the payment of interest, principal or premium,
if any, in respect thereof in accordance with their terms will provide (without
any reinvestment of such interest, principal or premium), not later than one
business day before the due date of any payment, money or (iii) a combination of
money and U.S. Government Obligations or Foreign Government Obligations, as
applicable, sufficient to pay the principal of or premium, if any, and interest
on, the Senior Debt Securities of such series as such are due and (b) satisfying
certain other conditions precedent specified in the Senior Indenture. Such
deposit and termination is conditioned among other things upon Fleet's delivery
of (a) an opinion of independent counsel that the Holders of the Senior Debt
Securities of such series will have no federal income tax consequences as a
result of such deposit and termination and (b) if the Senior Debt Securities of
such series are then listed on the New York Stock Exchange, an opinion of
counsel that the Senior Debt Securities of such series will not be delisted as a
result of the exercise of this option. Such termination will not relieve Fleet
of its obligation to pay when due the principal of, and interest on, certain of
the Senior Debt Securities as provided in the Indenture. (Section 403)
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof. "Foreign Government Obligations" means securities denominated in a
Foreign Currency that are (i) direct obligations of a foreign government for the
payment of which its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
a foreign government the payment of which is unconditionally guaranteed as a
full faith and credit obligation by such foreign government, which, in either
case, under clauses (i) or (ii) are not callable or redeemable at the option of
the issuer thereof.
SUBORDINATED DEBT SECURITIES
The Subordinated Debt Securities will be direct, unsecured obligations of
Fleet and, unless otherwise specified in the applicable Prospectus Supplement,
will rank pari passu with all outstanding subordinated indebtedness of Fleet.
SUBORDINATION
The payment of the principal of and interest on the Subordinated Debt
Securities will, to the extent set forth in the Subordinated Indenture, be
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness (as defined in the Subordinated Indenture). In certain events of
insolvency, the payment of the principal of and interest on the Subordinated
Debt Securities will, to the extent set forth in the Subordinated Indenture,
also be effectively subordinated in right of payment to the prior payment in
full of all Other Financial Obligations (as defined in the Subordinated
Indenture). Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshalling of assets or any bankruptcy, insolvency or similar
proceedings of the Company, the holders of all Senior Indebtedness will first be
entitled to receive payment in full of all amounts due or to become due thereon
before the Holders of the Subordinated Debt Securities will be entitled to
receive any payment in respect of the principal of or interest on the
Subordinated Debt Securities. If upon any such payment or distribution of assets
to creditors, there remain, after giving effect to such subordination provisions
in favor of the holders of Senior Indebtedness, any amounts of cash, property or
securities available for payment or distribution in respect of Subordinated Debt
Securities (as defined in the Subordinated Indenture, "Excess Proceeds")
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<PAGE>
and if, at such time, any Entitled Persons (as defined in the Subordinated
Indenture) in respect of Other Financial Obligations have not received payment
in full of all amounts due or to become due on or in respect of such Other
Financial Obligations, then such Excess Proceeds shall first be applied to pay
or provide for the payment in full of such Other Financial Obligations before
any payment or distribution may be made in respect of the Subordinated Debt
Securities. In the event of the acceleration of the maturity of any Debt
Securities, the holders of all Senior Indebtedness will first be entitled to
receive payment in full of all amounts due thereon before the Holders of the
Subordinated Debt Securities will be entitled to receive any payment upon the
principal of or interest on the Subordinated Debt Securities.
In addition, no payment may be made of the principal of, premium, if any, or
interest on the Subordinated Debt Securities, or in respect of any redemption,
retirement, purchase or other acquisition of any of the Subordinated Debt
Securities, at any time when (i) there is a default in the payment of the
principal of, premium, if any, interest on or otherwise in respect of any Senior
Indebtedness, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise, or (ii) any event of default with respect to any
Senior Indebtedness has occurred and is continuing, or would occur as a result
of such payment on the Subordinated Debt Securities or any redemption,
retirement, purchase or other acquisition of any of the Subordinated Debt
Securities, permitting the Holders of such Senior Indebtedness (or a trustee on
behalf of the Holders thereof) to accelerate the maturity thereof.
By reason of such subordination in favor of the holders of Senior
Indebtedness, in the event of insolvency, creditors of Fleet who are not holders
of Senior Indebtedness or of the Subordinated Debt Securities may recover less,
ratably, than Holders of Senior Indebtedness and may recover more, ratably, than
the Holders of the Subordinated Debt Securities. By reason of the obligation of
the Holders of Subordinated Debt Securities to pay over any Excess Proceeds to
Entitled Persons in respect of Other Financial Obligations, in the event of
insolvency, holders of Existing Subordinated Indebtedness (as defined in the
Subordinated Indenture) may recover more, ratably, than the Holders of
Subordinated Debt Securities.
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Subordinated Debt Securities offered thereby, Senior
Indebtedness is defined in the Subordinated Indenture as (a) the principal of,
premium, if any, and interest on all of Fleet's indebtedness for money borrowed,
whether outstanding on the date of execution of the Subordinated Indenture or
thereafter created, assumed or incurred, except (i) the Existing Subordinated
Indebtedness and other Subordinated Debt Securities issued under the
Subordinated Indenture, (ii) such indebtedness as is by its terms expressly
stated to be junior in right of payment to the Subordinated Debt Securities and
(iii) such indebtedness as is by its terms expressly stated to rank pari passu
with the Subordinated Debt Securities and (b) any deferrals, renewals or
extensions of any such Senior Indebtedness. (Section 1.01). The Term
"indebtedness for money borrowed" when used with respect to Fleet is defined to
include, without limitation, any obligation of, or any obligation guaranteed by,
Fleet for the repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments, and any deferred obligation of,
or any such obligation guaranteed by, Fleet for the payment of the purchase
price of property or assets. (Section 1.01).
Existing Subordinated Indebtedness means Fleet's Subordinated Notes Due
1997, Floating Rate Subordinated Capital Notes Due 1998, 9.90% Subordinated
Notes Due 2001, 9% Subordinated Notes Due 2001, 8 1/8% Subordinated Notes Due
2004 and 8 5/8% Subordinated Notes Due 2007. As of the date of this Prospectus,
Fleet also had outstanding its 7 5/8% Subordinated Notes Due 1999 and 6 7/8%
Subordinated Notes Due 2003, each of which was issued under the Subordinated
Indenture, and its 9.85% Subordinated Capital Notes Due 1999, 8 5/8%
Subordinated Notes due 1999 and 7.20% Subordinated Notes due 2003, each of which
was issued under indentures assumed by Fleet in connection with the Shawmut
Merger and all of which are junior in right of payment to all of Fleet's Senior
Indebtedness and Other Financial Obligations.
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Subordinated Debt Securities offered thereby, Other
Financial Obligations means all obligations of
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<PAGE>
Fleet to make payment pursuant to the terms of financial instruments, such as
(i) securities contracts and foreign currency exchange contracts, (ii)
derivative instruments, such as swap agreements (including interest rate and
foreign exchange rate swap agreements), cap agreements, floor agreements, collar
agreements, interest rate agreements, foreign exchange rate agreements, options,
commodity futures contracts, commodity option contracts and (iii) in the case of
both (i) and (ii) above, similar financial instruments, other than (A)
obligations on account of Senior Indebtedness and (B) obligations on account of
indebtedness for money borrowed ranking pari passu with or subordinate to the
Subordinated Debt Securities. Unless otherwise specified in the Prospectus
Supplement relating to the particular series of Subordinated Debt Securities
offered thereby, Entitled Persons means any person who is entitled to payment
pursuant to the terms of Other Financial Obligations.
Any Prospectus Supplement relating to a particular series of Subordinated
Debt Securities will set forth the aggregate amount of indebtedness of Fleet
senior to the Subordinated Debt Securities as of a recent practicable date.
Fleet's obligations under the Subordinated Debt Securities shall rank pari
passu in right of payment with each other and with the Existing Subordinated
Indebtedness, subject to the obligations of the Holders of Subordinated Debt
Securities to pay over any Excess Proceeds to Entitled Persons in respect of
Other Financial Obligations as provided in the Subordinated Indenture.
The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Indebtedness or Other Financial Obligations, which may include
indebtedness that is senior to the Subordinated Debt Securities, but subordinate
to other obligations of Fleet.
The Prospectus Supplement may further describe the provisions, if any,
applicable to the subordination of the Subordinated Debt Securities of a
particular series.
Except as described above or in the Subordinated Indenture, the obligation
of Fleet to make payment of the principal of, premium, if any, or interest on
the Subordinated Debt Securities will not be affected by reason of such
subordination. In the event of a distribution of assets upon any dissolution,
winding up, liquidation or reorganization, certain general creditors of Fleet
may recover more, ratably, than Holders of the Subordinated Debt Securities.
Subject to payment in full of all Senior Indebtedness, the rights of the Holders
of Subordinated Debt Securities will be subrogated to the rights of the Holders
of Senior Indebtedness to receive payments or distribution of cash, property or
securities of Fleet applicable to Senior Indebtedness. Subject to the payment in
full of all Other Financial Obligations, the rights of the Holders of
Subordinated Debt Securities will be subrogated to the rights of Entitled
Persons to receive payments or distributions of cash, property or securities of
Fleet applicable to Other Financial Obligations. (Sections 14.02 and 14.10)
LIMITED RIGHTS OF ACCELERATION
Unless otherwise specified in the Prospectus Supplement relating to any
series of Subordinated Debt Securities, payment of principal of the Subordinated
Debt Securities may be accelerated only in case of certain events involving the
bankruptcy, insolvency or reorganization of Fleet which constitutes an Event of
Default (as defined below). There is no right of acceleration in the case of a
default in the payment of principal of, premium, if any, or interest on the
Subordinated Debt Securities or the performance of any other covenant of Fleet
in the Subordinated Indenture.
RESTRICTIVE COVENANTS
The Prospectus Supplement relating to a series of Subordinated Debt
Securities may describe certain restrictive covenants, if any, to which Fleet
may be bound under the Subordinated Indenture.
EVENTS OF DEFAULT, DEFAULTS, WAIVERS
An "Event of Default" with respect to Subordinated Debt Securities of any
series is defined in the Subordinated Indenture as certain events involving the
bankruptcy or reorganization of Fleet and any other Event of Default provided
with respect to Subordinated Debt Securities of such series. (Section
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7.01) A "Default" with respect to Subordinated Debt Securities of any series is
defined in the Subordinated Indenture as (a) an Event of Default with respect to
such series; (b) failure to pay the principal of, or premium, if any, on any
Subordinated Security of such series at its Maturity; (c) failure to pay
interest upon any Subordinated Security of such series when due and payable and
the continuance of such Default for a period of 30 days; (d) failure to perform
any other covenant or agreement of Fleet in the Subordinated Indenture with
respect to Subordinated Debt Securities of such series and continuance of such
Default for 60 days after written notice of such failure, requiring Fleet to
remedy the same; and (e) any other Default provided with respect to Subordinated
Debt Securities of such series. (Section 7.07) If an Event of Default with
respect to any series of Subordinated Debt Securities for which there are
Subordinated Debt Securities outstanding under the Subordinated Indenture occurs
and is continuing, either the Subordinated Trustee or the Holders of not less
than 25% in aggregate principal amount of the Subordinated Debt Securities of
such series may declare the principal amount (or if such Subordinated Debt
Securities are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all Subordinated Debt
Securities of that series to be immediately due and payable. The Holders of a
majority in aggregate principal amount of the Subordinated Debt Securities of
any series outstanding under the Subordinated Indenture may waive, on behalf of
all Holders of such series, an Event of Default resulting in acceleration of
such Subordinated Debt Securities, but only if all Defaults have been remedied
and all payments due (other than those due as a result of acceleration) have
been made. (Section 7.02) If a Default occurs and is continuing, the
Subordinated Trustee may in its discretion, and at the written request of
Holders of not less than a majority in aggregate principal amount of the
Subordinated Debt Securities of any series outstanding under the Subordinated
Indenture and upon reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request and subject to
certain other conditions set forth in the Subordinated Indenture shall, proceed
to protect the rights of the Holders of all the Subordinated Debt Securities of
such series. (Section 7.03) Prior to acceleration of maturity of the
Subordinated Debt Securities of any series outstanding under the Subordinated
Indenture, the Holders of a majority in aggregate principal amount of such
Subordinated Debt Securities may waive any past Default under the Subordinated
Indenture except a Default in the payment of principal of, premium, if any, or
interest on the Subordinated Debt Securities of such series or in respect of a
covenant which cannot be modified or amended without the consent of the Holder
of each Outstanding Security of such series affected. (Section 7.13)
The Subordinated Indenture provides that in the event of a Default specified
in clauses (b) or (c) of the immediately preceding paragraph in payment of
principal of, premium, if any, or interest on any Subordinated Debt Security of
any series, Fleet will, upon demand of the Subordinated Trustee, pay to it, for
the benefit of the holder of any such Subordinated Debt Security, the whole
amount then due and payable on such Subordinated Debt Security for principal,
premium, if any, and interest. The Subordinated Indenture further provides that
if Fleet fails to pay such amount forthwith upon such demand, the Subordinated
Trustee may, among other things, institute a judicial proceeding for the
collection thereof. (Section 7.03)
The Subordinated Indenture also provides that notwithstanding any other
provision of the Subordinated Indenture, the holder of any Subordinated Debt
Security of any series shall have the right to institute suit for the
enforcement of any payment of principal of, premium, if any, and interest on
such Subordinated Debt Security on the respective Stated Maturities (as defined
in the Subordinated Indenture) expressed in such Subordinated Debt Security and
that such right shall not be impaired without the consent of such holder.
(Section 7.08)
Fleet is required to furnish to the Subordinated Trustee annually a
statement as to performance by Fleet of certain of its obligations under the
Subordinated Indenture and as to any Default in such performance. (Section 5.10)
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DESCRIPTION OF WARRANTS
Fleet may issue Warrants for the purchase of Debt Securities. Warrants may
be issued independently or together with Debt Securities offered by any
Prospectus Supplement and may be attached to or separate from any such
Securities. Each series of Warrants will be issued under a separate warrant
agreement (a "Warrant Agreement") to be entered into between Fleet and a bank or
trust company, as warrant agent (the "Warrant Agent"). The Warrant Agent will
act solely as an agent of the Company in connection with the Warrants and will
not assume any obligation or relationship of agency or trust for or with any
holders or beneficial owners of Warrants. The following summary of certain
provisions of the Warrants does not purport to be complete and is subject to,
and qualified in its entirety by reference to, the provisions of the Warrant
Agreement that will be filed with the Commission in connection with the offering
of such Warrants.
The Prospectus Supplement relating to a particular issue of Warrants will
describe the terms of such Warrants, including the following: (a) the title of
such Warrants; (b) the offering price for such Warrants, if any; (c) the
aggregate number of such Warrants; (d) the designation and terms of the Debt
Securities purchasable upon exercise of such Warrants; (e) if applicable, the
designation and terms of the Debt Securities with which such Warrants are issued
and the number of such Warrants issued with each such Debt Security; (f) if
applicable, the date from and after which such Warrants and any Debt Securities
issued therewith will be separately transferable; (g) the principal amount of
Debt Securities purchasable upon exercise of a Warrant and the price at which
such principal amount of Debt Securities may be purchased upon exercise (which
price may be payable in cash, securities, or other property); (h) the date on
which the right to exercise such Warrants shall commence and the date on which
such right shall expire; (i) if applicable, the minimum or maximum amount of
such Warrants that may be exercised at any one time; (j) whether the Warrants
represented by the Warrant certificates or Debt Securities that may be issued
upon exercise of the Warrants will be issued in registered or bearer form; (k)
information with respect to book-entry procedures, if any; (l) the currency or
currency units in which the offering price, if any, and the exercise price are
payable; (m) if applicable, a discussion of material United States Federal
income tax considerations; (n) the antidilution provisions of such Warrants, if
any; (o) the redemption or call provisions, if any, applicable to such Warrants;
and (p) any additional terms of the Warrants, including terms, procedures, and
limitations relating to the exchange and exercise of such Warrants.
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PLAN OF DISTRIBUTION
Fleet may sell Securities to or through underwriters, and also may sell
Securities through agents (which are registered broker-dealers or banks) which
may be affiliates.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices (which may be changed from time
to time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Each Prospectus
Supplement will describe the method of distribution of the Securities. Certain
restrictions relating to the distribution of Securities in connection with an
International Offering will be set forth in the applicable Prospectus
Supplement.
In connection with the sale of Securities, underwriters or agents acting on
Fleet's behalf may receive compensation from Fleet or from purchasers of
Securities for whom they may act as agents, in the form of discounts,
concessions or commissions. The underwriters, dealers and agents that
participate in the distribution of Securities may be deemed to be underwriters
under the Act and any discounts or commissions received by them and any profits
on the resale of Securities by them may be deemed to be underwriting discounts
and commissions under the Act. Any such underwriter will be identified and any
such compensation will be described in the applicable Prospectus Supplement.
Under agreements which may be entered into by Fleet, underwriters, dealers
and agents who participate in the distribution of Securities may be entitled to
indemnification by Fleet against certain liabilities, including liabilities
under the Act, and to certain rights of contribution from Fleet.
If so indicated in the applicable Prospectus Supplement, Fleet will
authorize underwriters or other persons acting as Fleet's agents to solicit
offers by certain institutions to purchase Debt Securities or Warrants from
Fleet pursuant to delayed delivery contracts providing for payment and delivery
on a future date or dates stated in the applicable Prospectus Supplement. Each
such contract will be for an amount not less than, and the aggregate amount of
such securities sold pursuant to such contracts shall not be less nor more than,
the respective amounts stated in the applicable Prospectus Supplement.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by Fleet. The obligations of any purchaser under
any such contract will not be subject to any condition except that (1) the
purchase of the Debt Securities or Warrants shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject, and (2) if the Debt Securities or Warrants are also being sold to
underwriters acting as principals for their own account, the underwriters shall
have purchased such Debt Securities or Warrants not sold for delayed delivery.
The underwriters and such other persons will not have any responsibility in
respect of the validity or performance of such contracts.
Certain of the underwriters and their associates and affiliates may be
customers of, have borrowing relationships with, engage in other transactions
with, and/or perform services, including investment banking services, for, Fleet
or one or more of its affiliates in the ordinary course of business.
EXPERTS
The consolidated financial statements of Fleet appearing in Fleet's Current
Report on Form 8-K dated March 15, 1996, 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.
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The consolidated financial statements of National Westminster Bancorp, Inc.
appearing in Fleet's Current Report on Form 8-K dated February 8, 1996,
incorporated by reference herein, 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 postretirement benefits other
than pensions.
LEGAL OPINIONS
The validity of the Notes offered hereby will be passed upon for Fleet by
Edwards & Angell, One Hospital Trust Plaza, Providence, Rhode Island 02903, and
for the Underwriters by Cravath, Swaine & Moore, 825 Eighth Avenue, New York,
New York 10019. V. Duncan Johnson, a partner of Edwards & Angell, is a director
of Fleet-RI, Fleet-CT, Fleet-MA, FNB-CT and FNB-MA, and beneficially owns 4,052
shares of Common Stock.
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NO DEALER, SALESMAN OR ANY OTHER PERSON HAS $300,000,000
BEEN AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED OR INCORPORATED BY REFERENCE IN FLEET FINANCIAL
THIS PROSPECTUS SUPPLEMENT, ANY PRICING GROUP, INC.
SUPPLEMENT OR THE BASIC PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS
PROSPECTUS SUPPLEMENT, ANY PRICING
SUPPLEMENT AND THE BASIC PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS RETAIL MEDIUM-TERM
HAVING BEEN AUTHORIZED BY FLEET OR BY THE NOTE SM SECURITIES
AGENTS. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT, ANY PRICING SUPPLEMENT AND
THE BASIC PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE SENIOR RETAIL MEDIUM-
HAS BEEN NO CHANGE IN THE AFFAIRS OF FLEET TERM NOTES, SERIES J
SINCE THE DATE HEREOF OR THEREOF.
THIS PROSPECTUS SUPPLEMENT, ANY SUBORDINATED RETAIL
PRICING SUPPLEMENT AND THE BASIC PROSPECTUS MEDIUM-TERM NOTES,
DO NOT CONSTITUTE AN OFFER OR SOLICITATION SERIES K
BY ANYONE IN ANY STATE IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH DUE NINE MONTHS OR MORE FROM
THE PERSON MAKING SUCH OFFER OR SOLICITATION DATE OF ISSUE
IS NOT QUALIFIED TO DO SO OR TO ANYONE TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
-------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
Fleet Financial Group, Inc. .......... S-3 [ logo ]
Description of Retail Medium-Term FINANCIAL GROUP
Notes................................. S-3
Governing Law......................... S-11
Other Provisions and Addenda.......... S-11
Certain United States Federal Income
Tax Consequences.................... S-11
Plan of Distribution of Retail
Medium-Term Notes................... S-19
Experts............................... S-19
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by SMITH BARNEY INC.
Reference............................. 2
Fleet Financial Group, Inc. .......... 3
Consolidated Ratios of Earnings to
Fixed Charges....................... 7
Use of Proceeds....................... 7
Description of Debt Securities........ 8
Senior Debt Securities................ 13
Subordinated Debt Securities.......... 15
Description of Warrants............... 19
Plan of Distribution.................. 20 PROSPECTUS SUPPLEMENT
Experts............................... 20 DATED MARCH 27, 1996
Legal Opinions........................ 21 SM SERVICEMARK OF
SMITH BARNEY INC.
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