<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 6, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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FLEET FINANCIAL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
RHODE ISLAND 05-0341324
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION
NO.)
</TABLE>
ONE FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
(617) 292-2000
(ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF THE
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
WILLIAM C. MUTTERPERL, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
FLEET FINANCIAL GROUP, INC.
One Federal Street
Boston, Massachusetts 02110
(617) 292-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
--------------------------
COPIES TO:
<TABLE>
<CAPTION>
LAURA N. WILKINSON, ESQ. B. ROBBINGS KIESSLING, ESQ.
<S> <C>
EDWARDS & ANGELL CRAVATH, SWAINE & MOORE
One Hospital Trust Plaza Worldwide Plaza, 825 Eighth Avenue
Providence, Rhode Island 02903 New York, New York 10019
(401) 274-9200 (212) 474-1000
</TABLE>
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registrations statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
CALCULATION OF REGISTRATION FEE
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<CAPTION>
<S> <C> <C>
PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE
OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1)
<S> <C> <C>
Debt Securities(3)......................................... (4) (4)
Preferred Stock, par value $1.00 per share(5)(6)........... (4) (4)
Depositary Shares(6)....................................... (4) (4)
Common Stock, par value $0.01 per share(7)................. (4) (4)
Warrants(8)................................................ (4) (4)
Total................................................ $2,000,000,000(9) 100%
<CAPTION>
PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS AGGREGATE OFFERING REGISTRATION
OF SECURITIES TO BE REGISTERED PRICE(2) FEE
<S> <C> <C>
Debt Securities(3)......................................... (4) (4)
Preferred Stock, par value $1.00 per share(5)(6)........... (4) (4)
Depositary Shares(6)....................................... (4) (4)
Common Stock, par value $0.01 per share(7)................. (4) (4)
Warrants(8)................................................ (4) (4)
Total................................................ $2,000,000,000(9) $ 606,061
</TABLE>
(1) The proposed maximum offering price per unit will be determined from time
to time by the Registrant in connection with the issuance by the Registrant
of the securities registered hereunder.
(2) The proposed maximum aggregate offering price has been estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457(o)
under the Securities Act of 1933.
(3) Subject to note (9) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities.
(4) Not applicable pursuant to General Instructions II.D. of Form S-3.
(5) Subject to note (9) below, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from time
to time, by the Registrant.
(6) Subject to note (9) below, there is being registered hereunder an
indeterminate number of Depositary Shares to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement. In the event the Registrant
elects to offer to the public fractional interests in shares of Preferred
Stock registered hereunder, Depositary Receipts will be distributed to those
persons purchasing such fractional interests and the shares of Preferred
Stock will be issued to the Depositary under the Deposit Agreement.
(7) Subject to note (9) below, there is being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from time to
time, by the Registrant. There are also being registered hereunder an
indeterminate number of shares of Common Stock as shall be issuable upon
conversion or redemption of Preferred Stock or Debt Securities registered
hereunder. Such Common Stock includes preferred share purchase rights.
(8) Subject to note (9) below, there is being registered hereunder an
indeterminate amount and number of Warrants, representing rights to purchase
Debt Securities, Preferred Stock or Common Stock registered hereunder.
(9) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$2,000,000,000 or the equivalent thereof in one or more foreign currencies,
foreign currency units, or composite currencies. If Debt Securities are
issued at original issue discount, Fleet may issue such higher principal
amount as may be sold for an initial public offering price of up to
$2,000,000,000 (less the dollar amount of any securities previously issued
hereunder), or the equivalent thereof in one or more foreign currencies,
foreign currency units, or composite currencies. The aggregate amount of
Common Stock registered hereunder is further limited to that which is
permissible under Rule 415(a)(4) under the Securities Act of 1933. The
securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
----------------------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
EXPLANATORY NOTE
This Registration Statement contains two forms of Prospectus: one to be used
in connection with the offering and sale of Debt Securities, and Warrants to
purchase Debt Securities, including any Preferred Stock, Depositary Shares and
Common Stock into which the Debt Securities may be convertible, and one to be
used in connection with the offering and sale of Preferred Stock, Depositary
Shares and Common Stock, and Warrants to purchase such Securities, including any
such shares into which the Preferred Stock or Depositary Shares may be
convertible.
<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER 6, 1997
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<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
$2,000,000,000 (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 $2,000,000,000 (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 , 1997.
<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 or by accessing the Commission's World Wide Web site
at http://www.sec.gov. 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, 1996.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997
and June 30, 1997.
3. Current Reports on Form 8-K dated January 15, 1997, February 4, 1997,
April 16, 1997 and July 16, 1997.
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.
2
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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 June 30, 1997, Fleet was the 12th largest bank
holding company in the United States, with total assets of $83.4 billion, total
deposits of $63.2 billion and stockholders' equity of $7.0 billion.
Fleet is engaged in a general commercial banking and trust business
throughout the states of Connecticut, Massachusetts, New Jersey, New York, Rhode
Island, Maine, New Hampshire and Florida through its six banking subsidiaries,
and also provides, through its nonbanking subsidiaries and its credit card bank
subsidiary, a variety of financial services, including mortgage banking,
asset-based lending, consumer finance, real estate financing, securities
brokerage services, investment banking, investment advice and management, data
processing and student loan servicing.
The principal office of Fleet is located at One Federal Street, Boston,
Massachusetts 02110, telephone number (617) 292-2000.
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.
There are various statutory and regulatory limitations on the extent to
which banking subsidiaries of Fleet can finance or otherwise transfer funds to
Fleet or its nonbanking subsidiaries, whether in the form of loans, extensions
of credit, investments or asset purchases. Such transfers by any subsidiary bank
to Fleet or any nonbanking subsidiary are limited in amount to 10% of the bank's
capital and surplus and, with respect to Fleet and all such nonbanking
subsidiaries, to an aggregate of 20% of each such bank's capital and surplus.
Furthermore, loans and extensions of credit are required to be secured in
specified amounts and are required to be on terms and conditions consistent with
safe and sound banking practices.
In addition, there are regulatory limitations on the payment of dividends
directly or indirectly to Fleet from its banking subsidiaries. Under applicable
banking statutes, at June 30, 1997, Fleet's banking subsidiaries could have
declared additional dividends of approximately $246 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
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(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 June 30, 1997, 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 "significantly
higher" than the 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 were adopted by the federal banking agencies. As of October
1, 1996, standards for asset quality and earnings have been incorporated into
the Interagency Guidelines Establishing Standards for Safety and Soundness. The
three standards for Safety and Soundness established by the guidelines are (1)
operational and managerial; (2) compensation; and (3) asset quality, earnings
and stock valuation. 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
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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. Effective January 1,
1997, with compliance by January 1, 1998, national banks with significant
exposure to market risk must maintain adequate capital to support that exposure.
The Office of Comptroller of the Currency ("OCC") may apply this provision to
any national bank if the OCC deems it appropriate for safe and sound practices.
As of June 30, 1997, 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.
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. In 1996, Fleet merged its banking subsidiaries in Connecticut,
Massachusetts and Rhode Island, and has recently filed applications to merge the
resulting bank with one of its banking subsidiaries in New York 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
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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. The FDIC has
indicated that it is maintaining the decreased rate schedule for assessments
paid to the BIF through the end of 1997. This will be reviewed on a semi-annual
basis. 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. In May, 1997, the FDIC announced that
the BIF had a reserve ratio of 1.34% at the end of 1996. The FDIC projects the
reserve ratio to be within a range of 1.29 to 1.42 by the end of 1997. On May 6,
1997, the Board of Directors voted to retain the existing assessment rate
schedule applicable to members of the SAIF for the second half of 1997.
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,
QUARTER ENDED -----------------------------------------------------
JUNE 30, 1997 1996 1995 1994 1993 1992
--------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding Interest on Deposits...................... 4.77x 3.62x 1.78x 2.33x 2.36x 1.90x
Including Interest on Deposits...................... 2.01 1.78 1.34 1.62 1.56 1.26
</TABLE>
- ------------------------
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 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 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 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
8
<PAGE>
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 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.
9
<PAGE>
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
office of the Trustee, who will also be the transfer agent of the Debt
Securities, 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).
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest, if any, on Debt Securities in
bearer form will be made, subject to any applicable laws and regulations, at
such office outside the United States as specified in the applicable Prospectus
Supplement and as Fleet may designate from time to time, at the option of the
Holder, by check or by transfer to an account maintained by the payee with a
bank located outside the United States. Unless otherwise indicated in the
applicable Prospectus Supplement, payment of interest on Debt Securities in
bearer form will be made only against surrender of the coupon relating to such
Interest Payment Date. No payment with respect to any Debt Security in bearer
form will be made at any office or agency of Fleet in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States.
10
<PAGE>
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 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
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<PAGE>
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.
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
12
<PAGE>
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)
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
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<PAGE>
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 National Bank 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 National Bank) 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 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)
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"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") 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
15
<PAGE>
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).
As of the date of this Prospectus, Fleet had an aggregate of $2,049,000,000
in Subordinated Debt outstanding, of which $934,000,000 is subordinated to
Fleet's Senior Indebtedness and $1,115,000,000 is subordinated to 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 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.
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<PAGE>
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 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
17
<PAGE>
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)
18
<PAGE>
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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<PAGE>
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 incorporated by reference in
Fleet's Annual Report on Form 10-K for the fiscal year ended December 31, 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.
20
<PAGE>
LEGAL OPINIONS
The validity of the Securities offered hereby will be passed upon for Fleet
by Edwards & Angell, One Hospital Trust Plaza, Providence, Rhode Island 02903.
V. Duncan Johnson, a partner of Edwards & Angell, is a director of Fleet
National Bank, a wholly-owned subsidiary of Fleet, and beneficially owns 4,052
shares of Common Stock.
21
<PAGE>
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY FLEET OR BY ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL
UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF FLEET SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
PROSPECTUS
Available Information.......................... 2
Incorporation of Certain Documents by
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......................... 12
Subordinated Debt Securities................... 15
Description of Warrants........................ 19
Plan of Distribution........................... 20
Experts........................................ 20
Legal Opinions................................. 21
</TABLE>
$2,000,000,000
[LOGO]
FLEET FINANCIAL
GROUP, INC.
----------
DEBT SECURITIES
PROSPECTUS
-------------------
, 1997
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<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER 6, 1997
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS
COMMON STOCK, COMMON STOCK WARRANTS, PREFERRED STOCK, DEPOSITARY SHARES, AND
PREFERRED STOCK WARRANTS
FLEET FINANCIAL GROUP, INC.
Fleet Financial Group, Inc., a Rhode Island corporation ("Fleet"), may offer
from time to time (a) shares of Common Stock, par value $0.01 per share,
including the associated Preferred Share Purchase Rights (the "Common Stock"),
(b) shares of preferred stock, par value $1.00 per share (the "Preferred
Stock"), including, at its option, depositary shares (the "Depositary Shares")
evidenced by depositary receipts (the "Depositary Receipts") each representing a
fractional interest in such Preferred Stock and (c) warrants to purchase Common
Stock (the "Common Stock Warrants") or Preferred Stock (the "Preferred Stock
Warrants", together with the Common Stock Warrants, the "Warrants"), having a
public offering price of up to an aggregate of $2,000,000,000 (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")). The Common
Stock, Preferred Stock, Depositary Shares 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"). Pursuant to the
terms of the Registration Statement of which this Prospectus constitutes a part,
Fleet may also offer and sell its unsecured debt securities, which may be either
senior or subordinated, or warrants to purchase debt securities (the "Debt
Securities"). Any such Debt Securities will be offered and issued pursuant to
the terms of a separate Prospectus contained in such Registration Statement. The
aggregate amount of Securities that may be offered and sold pursuant hereto is
subject to reduction as the result of the sale of any Debt Securities 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 Preferred Stock, the specific number of shares, title, stated
value and liquidation preference of each share, issuance price, dividend rate
(or method of calculation), dividend payment dates, any redemption or sinking
fund provisions, any conversion or exchange provisions and whether fractional
interests in shares of Preferred Stock will be represented by Depositary Shares;
(ii) in the case of Common Stock, the specific number of shares and issuance
price for such shares; (iii) in the case of Warrants, the duration, offering
price, exercise price and detachability of any such warrants; and (iv) 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 , 1997.
<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 or by accessing the Commission's World Wide Web site
at http://www.sec.gov. 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, 1996.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997
and June 30, 1997.
3. Current Reports on Form 8-K dated January 15, 1997, February 4, 1997,
April 16, 1997 and July 16, 1997.
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 June 30, 1997, Fleet was the 12th largest bank
holding company in the United Sates, with total assets of $83.4 billion, total
deposits of $63.2 billion and stockholders' equity of $7.0 billion.
Fleet is engaged in a general commercial banking and trust business
throughout the states of Connecticut, Massachusetts, New Jersey, New York, Rhode
Island, Maine, New Hampshire and Florida through its six banking subsidiaries,
and also provides, through its nonbanking subsidiaries and its credit card bank
subsidiary, a variety of financial services, including mortgage banking,
asset-based lending, consumer finance, real estate financing, securities
brokerage services, investment banking, investment advice and management, data
processing and student loan servicing.
The principal office of Fleet is located at One Federal Street, Boston,
Massachusetts 02110, telephone number (617) 292-2000.
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.
There are various statutory and regulatory limitations on the extent to
which banking subsidiaries of Fleet can finance or otherwise transfer funds to
Fleet or its nonbanking subsidiaries, whether in the form of loans, extensions
of credit, investments or asset purchases. Such transfers by any subsidiary bank
to Fleet or any nonbanking subsidiary are limited in amount to 10% of the bank's
capital and surplus and, with respect to Fleet and all such nonbanking
subsidiaries, to an aggregate of 20% of each such bank's capital and surplus.
Furthermore, loans and extensions of credit are required to be secured in
specified amounts and are required to be on terms and conditions consistent with
safe and sound banking practices.
In addition, there are regulatory limitations on the payment of dividends
directly or indirectly to Fleet from its banking subsidiaries. Under applicable
banking statutes, at June 30, 1997, Fleet's banking subsidiaries could have
declared additional dividends of approximately $246 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
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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 June 30, 1997, 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 "significantly
higher" than the 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 were adopted by the federal banking agencies. As of October
1, 1996, standards for asset quality and earnings have been incorporated into
the Interagency Guidelines Establishing Standards for Safety and Soundness. The
three standards for Safety and Soundness established by the guidelines are (1)
operational and managerial; (2) compensation; and (3) asset quality, earnings
and stock valuation. 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
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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. Effective January 1,
1997, with compliance by January 1, 1998, national banks with significant
exposure to market risk must maintain adequate capital to support that exposure.
The Office of Comptroller of the Currency ("OCC") may apply this provision to
any national bank if the OCC deems it appropriate for safe and sound practices.
As of June 30, 1997, 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.
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. In 1996, Fleet merged its banking subsidiaries in Connecticut,
Massachusetts and Rhode Island, and has recently filed applications to merge the
resulting bank with one of its banking subsidiaries in New York 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
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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. The FDIC has indicated that it
is maintaining the decreased rate schedule for assessments paid to the BIF
through the end of 1997. This will be reviewed on a semi-annual basis. 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. In May, 1997, the FDIC announced that
the BIF had a reserve ratio of 1.34% at the end of 1996. The FDIC projects the
reserve ratio to be within a range of 1.29 to 1.42 by the end of 1997. On May 6,
1997, the Board of Directors voted to retain the existing assessment rate
schedule applicable to members of the SAIF for the second half of 1997.
Fleet's subsidiary banks do not hold significant amounts of deposits insured
by the SAIF.
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CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND DIVIDENDS
ON PREFERRED STOCK
Fleet's consolidated ratios of earnings to fixed charges and dividends on
preferred stock were as follows for the years and periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
QUARTER ENDED ------------------------------------------
JUNE 30, 1997 1996 1995 1994 1993
----------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges and Dividends on Preferred
Stock:
Excluding interest on deposits........................... 4.18x 3.26x 1.74x 2.27x 2.27x
Including interest on deposits........................... 1.96 1.74 1.33 1.61 1.54
<CAPTION>
1992
---------
<S> <C>
Ratio of Earnings to Fixed Charges and Dividends on Preferred
Stock:
Excluding interest on deposits........................... 1.82x
Including interest on deposits........................... 1.25
</TABLE>
For purposes of computing the consolidated ratios, earnings consist of
income before income taxes plus fixed charges (excluding capitalized interest)
and, where indicated, the pretax equivalents of dividends on preferred stock.
Fixed charges consist of interest on short-term debt and long-term debt
(including interest related to capitalized leases and capitalized interest) and
one-third of rent expense, which approximates the interest component of such
expense. In addition, where indicated, fixed charges include interest on
deposits.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, Fleet
intends to use the net proceeds from the sale of the Securities for general
corporate purposes, principally to extend credit to, or fund investments in, its
subsidiaries. The precise amounts and timing of extensions of credit to, and
investments in, such subsidiaries will depend upon the subsidiaries' funding
requirements and the availability of other funds. Pending such applications, the
net proceeds may be temporarily invested in marketable securities or applied to
the reduction of Fleet's short-term indebtedness. Based upon the historic and
anticipated future growth of Fleet and the financial needs of its subsidiaries,
Fleet may engage in additional financings of a character and amount to be
determined as the need arises.
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DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any series of the
Preferred Stock offered by any Prospectus Supplement will be described in the
Prospectus Supplement relating to such series of the Preferred Stock. If so
indicated in the applicable Prospectus Supplement, the terms of any such series
may differ from the terms set forth below. The description of the provisions of
the Preferred Stock set forth below and in any Prospectus Supplement does not
purport to be complete and is subject to and qualified in its entirety by
reference to the Certificate of Designation relating to the applicable series of
the Preferred Stock.
GENERAL
Under Fleet's Restated Articles of Incorporation (the "Articles"), the Board
of Directors of Fleet is authorized, without further shareholder action, to
provide for the issuance of up to 16,000,000 shares of preferred stock, $1 par
value ("Fleet $1 Par Preferred Stock"), in one or more series, with such voting
powers, dividends, designations, preferences, rights, qualifications,
limitations and restrictions as shall be set forth in the resolutions providing
for the issuance thereof adopted by the Board of Directors. As of June 30, 1997,
Fleet had outstanding five series of Fleet $1 Par Preferred Stock as follows:
(i) 575,000 shares of 9.30% Cumulative Preferred Stock (the "9.30% Preferred"),
having a liquidation value of $250 per share, plus accrued and unpaid dividends,
were designated and 575,000 were outstanding, (ii) 500,000 shares of 9.35%
Cumulative Preferred Stock (the "9.35% Preferred"), having a liquidation value
of $250 per share, plus accrued and unpaid dividends, were designated and
500,000 were outstanding, (iii) 1,265,000 shares of Series V 7.25% Perpetual
Preferred Stock (the "Series V Preferred"), having a liquidation value of $250
per share, plus accrued and unpaid dividends, were designated and 765,010 were
issued and outstanding, (iv) 690,000 shares of Series VI 6.75% Perpetual
Preferred Stock (the "Series VI Preferred"), having a liquidation value of $250
per share, plus accrued and unpaid dividends, were designated and 600,000 were
issued and outstanding, (v) 805,000 shares of Series VII Fixed/Adjustable Rate
Cumulative Preferred Stock (the "Series VII Preferred"), having a liquidation
value of $250 per share, plus accrued and unpaid dividends, were designated and
700,000 were issued and outstanding, and (vi) 200,000 shares of Series VIII
Fixed/Adjustable Rate Noncumulative Preferred Stock (the "Series VIII
Preferred"), having a liquidation value of $250 per share, plus accrued and
unpaid dividends, were designated and 200,000 were issued and outstanding. In
addition, as of December 31, 1995, the Board of Directors of Fleet had
established a series of 3,000,000 shares of Cumulative Participating Junior
Preferred Stock (the "Junior Preferred Stock") issuable upon exercise of the
preferred share purchase rights described below, of which no shares were issued
and outstanding as of such date. On September 12, 1997, Fleet called for
redemption all of the 9.30% Preferred effective October 15, 1997. Each such
outstanding series and class is described below under "Description of Existing
Preferred Stock".
Under regulations adopted by the Federal Reserve Board, if the holders of
any series of the Preferred Stock are or become entitled to vote for the
election of directors because dividends on such series are in arrears, such
series may then be deemed a "class of voting securities" and a holder of 25% or
more of such series (or a holder of 5% or more if it otherwise exercises a
"controlling influence" over Fleet) may then be subject to regulation as a bank
holding company in accordance with the Bank Holding Company Act of 1956, as
amended. In addition, at such time as such series is deemed a class of voting
securities, (i) any other bank holding company may be required to obtain the
approval of the Federal Reserve Board to acquire or retain 5% or more of such
series and (ii) any person other than a bank holding company may be required to
obtain the approval of the Federal Reserve Board to acquire or retain 10% or
more of such series.
The Preferred Stock shall have the dividend, liquidation, redemption, voting
and conversion rights set forth below unless otherwise provided in the
Prospectus Supplement relating to a particular series of the Preferred Stock.
Reference is made to the Prospectus Supplement relating to the particular series
of the
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Preferred Stock offered thereby for specific terms, including: (i) the title,
stated value and liquidation preference of such Preferred Stock and the number
of shares offered; (ii) the initial public offering price at which such
Preferred Stock will be issued; (iii) the dividend rate or rates (or method of
calculation), the dividend periods, the dates on which dividends shall be
payable and whether such dividends shall be cumulative or noncumulative and, if
cumulative, the dates from which dividends shall commence to accumulate; (iv)
any redemption or sinking fund provisions; (v) any conversion provisions; (vi)
whether Fleet has elected to offer Depositary Shares as described under
"Description of Depositary Shares"; and (vii) any other rights, preferences,
privileges, limitations and restrictions on such Preferred Stock.
The Preferred Stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the Prospectus Supplement relating to a particular
series of the Preferred Stock, each series of the Preferred Stock will rank on a
parity in all respects with the outstanding preferred stock of Fleet and each
other series of the Preferred Stock (except for the Junior Preferred Stock) and
will rank senior in all respects to any outstanding shares of Junior Preferred
Stock and the Common Stock. See "Description of Existing Preferred Stock". The
Preferred Stock will have no preemptive rights to subscribe for any additional
securities which may be issued by Fleet.
Unless otherwise specified in the applicable Prospectus Supplement, the
depositary, transfer agent, registrar, dividend disbursing agent and redemption
agent for shares of the Preferred Stock will be First Chicago Trust Company
("First Chicago").
As described under "Description of Depositary Shares", Fleet may, at its
option, with respect to any series of the Preferred Stock, elect to offer
fractional interests in shares of Preferred Stock, and provide for the issuance
by a Depositary (as defined below) of depositary receipts ("Depositary
Receipts") representing depositary shares ("Depositary Shares"), each of which
will represent a fractional interest (to be specified in the applicable
Prospectus Supplement relating to a particular series of the Preferred Stock) in
a share of such series of the Preferred Stock.
DIVIDENDS
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of Fleet, out of any funds
legally available therefor, cash dividends at such rates and on such dates as
are set forth in the Prospectus Supplement relating to such series of the
Preferred Stock. Such rates may be fixed or adjustable or both. If adjustable,
the formula or other method used for determining the applicable dividend rate
for each dividend period will be set forth in the applicable Prospectus
Supplement. Dividends will be calculated on the basis of a 360-day year
consisting of twelve 30-day months.
Dividends on any series of the Preferred Stock may be cumulative or
noncumulative, as provided in the applicable Prospectus Supplement. If the Board
of Directors of Fleet fails to declare a dividend payable on a dividend payment
date on any series of the Preferred Stock for which dividends are noncumulative
("Noncumulative Preferred Stock"), then the holders of such series of the
Preferred Stock will have no right to receive a dividend in respect of the
dividend period ending on such dividend payment date, and Fleet will have no
obligation to pay the dividend accrued for such period, whether or not dividends
on such series are declared payable on any future dividend payment dates.
When dividends are not paid in full upon any series of the Preferred Stock
and any other series of Fleet's preferred stock ranking on a parity as to
dividends with such series of Preferred Stock, all dividends declared upon
shares of such series of Preferred Stock and any other series of Fleet's
preferred stock ranking on a parity as to dividends shall be declared pro rata
so that the amount of dividends declared per share on such series of Preferred
Stock and such other preferred stock shall in all cases bear to each other the
same ratio that accrued dividends per share on the shares of such series of
Preferred Stock (which shall not, if such Preferred Stock is Noncumulative
Preferred Stock, include any accumulation in respect of unpaid dividends for
prior dividend periods) and such other preferred stock bear to each other.
Except as
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provided in the preceding sentence, unless (i) with respect to any series of
Preferred Stock for which dividends are cumulative ("Cumulative Preferred
Stock"), full cumulative dividends have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set apart for
such payment on such Preferred Stock for all dividend periods terminating on or
prior to the date of payment of any such dividends on such other series of
preferred shares of Fleet or (ii) with respect to any series of Noncumulative
Preferred Stock, full dividends for the then-current dividend period on such
Preferred Stock have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payment, no
dividends (other than in Common Stock or another stock ranking junior to such
series of Preferred Stock as to dividends and upon liquidation) shall be
declared or paid or set aside for payment, nor shall any other distribution be
made on the Common Stock or on any other stock of Fleet ranking junior to or on
a parity with such series of Preferred Stock as to dividends or upon
liquidation. Unless full dividends on the Cumulative Preferred Stock of any
series have been paid for the then-current and all past dividend periods and
full dividends for the then-current dividend period on the Noncumulative
Preferred Stock of any series have been declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment, no Common Stock
or any other stock of Fleet ranking junior to or on a parity with such series of
Preferred Stock as to dividends or upon liquidation may be redeemed, purchased
or otherwise acquired for any consideration (or any moneys paid to or made
available for a sinking fund for the redemption of any shares of any such stock)
by Fleet (except by conversion into or exchange for stock of Fleet ranking
junior to such series of Preferred Stock as to dividends and upon liquidation).
See "Fleet Financial Group, Inc." with respect to certain limitations on the
ability of Fleet and its banking subsidiaries to pay dividends.
LIQUIDATION RIGHTS
In the event of any voluntary or involuntary dissolution, liquidation or
winding up of Fleet, the holders of each series of the Preferred Stock will be
entitled to receive and to be paid out of assets of Fleet available for
distribution to its stockholders, before any payment or distribution is made to
holders of Common Stock or any other class of stock ranking junior to such
series of the Preferred Stock upon liquidation, liquidating distributions in an
amount per share as set forth in the Prospectus Supplement relating to such
series of the Preferred Stock, plus accrued and unpaid dividends (whether or not
earned or declared) for the then-current dividend period and, if such series of
the Preferred Stock is Cumulative Preferred Stock, for all dividend periods
prior thereto. If, upon any voluntary or involuntary dissolution, liquidation or
winding up of Fleet, the amounts payable with respect to the Preferred Stock of
any series and any other shares of stock of Fleet ranking as to any such
distribution on a parity with the Preferred Stock of such series are not paid in
full, the holders of the Preferred Stock of such series and of such other shares
will share ratably in any such distribution of assets of Fleet in proportion to
the full respective distributable amounts to which they are entitled. After
payment of the full amount of the liquidating distributions to which they are
entitled, the holders of shares of such series of the Preferred Stock will not
be entitled to any further participation in any distribution of assets by Fleet.
Neither the sale of all or substantially all the property or business of Fleet,
nor the merger or consolidation of Fleet into or with any other corporation
shall be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, of Fleet.
REDEMPTION
Any series of the Preferred Stock may be redeemable, in whole or in part, at
the option of Fleet, and may be subject to mandatory redemption pursuant to a
sinking fund or otherwise, in each case upon the terms, at the times and at the
redemption prices set forth in the Prospectus Supplement relating to such series
and subject to the rights of holders of other securities of Fleet. Preferred
Stock redeemed by Fleet will be restored to the status of authorized but
unissued preferred shares.
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The Prospectus Supplement relating to a series of the Preferred Stock which
is subject to mandatory redemption will specify the number of shares of such
series of the Preferred Stock which shall be redeemed by Fleet in each year
commencing after a date to be specified, at a redemption price per share and on
one or more dates to be specified, together with an amount equal to all accrued
and unpaid dividends thereon (which shall not, if such Preferred Stock is
Noncumulative Preferred Stock, include any accumulation in respect of unpaid
dividends for prior dividend periods) to the date of redemption. The redemption
price may be payable in cash or other property, as specified in the Prospectus
Supplement relating to such series of Preferred Stock.
If fewer than all of the outstanding shares of any series of the Preferred
Stock are to be redeemed, the number of shares to be redeemed will be determined
by the Board of Directors of Fleet and such shares shall be redeemed pro rata
from the holders of record of such shares in proportion to the number of such
shares held by such holders (with adjustments to avoid redemption of fractional
shares) or by lot in a manner determined by the Board of Directors of Fleet.
Notwithstanding the foregoing, if any dividends, including any accumulation
on shares of Cumulative Preferred Stock, of any series are in arrears, no shares
of Preferred Stock of such series shall be redeemed unless all outstanding
shares of Preferred Stock of such series are simultaneously redeemed, and Fleet
shall not purchase or otherwise acquire any shares of Preferred Stock of such
series; provided, however, that the foregoing shall not prevent the purchase or
acquisition of shares of Preferred Stock of such series pursuant to a purchase
or exchange offer made on the same terms to all holders of such series of the
Preferred Stock.
Notice of redemption shall be given by mailing the same to each record
holder of the shares to be redeemed, not less than 30 nor more than 60 days
prior to the date fixed for redemption thereof, to the respective addresses of
such holders as the same shall appear on the stock books of Fleet. Each such
notice shall state: (i) the redemption date; (ii) the number of shares and
series of the Preferred Stock to be redeemed; (iii) the redemption price; (iv)
the place or places where certificates for such shares of Preferred Stock are to
be surrendered for payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue or accumulate on such redemption
date; and (vi) the date upon which the holders' conversion rights, if any, as to
such shares, shall terminate. If fewer than all shares of any series of the
Preferred Stock held by any holder are to be redeemed, the notice mailed to such
holder shall also specify the number of shares to be redeemed from such holder.
If notice of redemption has been given, dividends on the shares of Preferred
Stock so called for redemption shall cease to accrue or accumulate from and
after the redemption date for the shares of the series of the Preferred Stock
called for redemption (unless default shall be made by Fleet in providing money
for the payment of the redemption price of the shares so called for redemption),
and such shares shall no longer be deemed to be outstanding, and all rights of
the holders thereof as stockholders of Fleet (except the right to receive the
redemption price) shall cease. Upon surrender in accordance with such notice of
the certificates representing any shares of the Preferred Stock so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of Fleet
shall so require and the notice shall so state), the redemption price set forth
above shall be paid out of funds provided by Fleet. If fewer than all of the
shares of the Preferred Stock represented by any such certificate are redeemed,
a new certificate shall be issued representing the unredeemed shares without
cost to the holder thereof.
VOTING RIGHTS
Except as indicated below or in the Prospectus Supplement relating to a
particular series of the Preferred Stock, or except as expressly required by
applicable law, the holders of the Preferred Stock will not be entitled to vote.
In the event Fleet issues shares of a series of the Preferred Stock, each share
will be entitled to one vote on matters on which holders of such series of the
Preferred Stock are entitled to vote. However, as more fully described below
under "Description of Depositary Shares", if Fleet elects to
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provide for the issuance of Depositary Shares representing interests in a
fraction of a share of a series of the Preferred Stock, the holders of each such
Depositary Share will, in effect, be entitled through the Depositary to such
fraction of a vote, rather than a full vote. Since each full share of any series
of the Preferred Stock shall be entitled to one vote, the voting power of such
series, on matters on which holders of such series and holders of any other
series of the Preferred Stock or another series of preferred stock of Fleet are
entitled to vote as a single class, will depend on the number of shares in such
series, not the aggregate stated value, liquidation preference or initial
offering price of the shares of such series of the Preferred Stock.
If the equivalent of six quarterly dividends payable on any series of the
Preferred Stock or any other class or series of preferred stock are in default,
the number of directors of Fleet will be increased by two (without duplication
of any increase made pursuant to the terms of any other series of preferred
stock of Fleet), and the holders of all outstanding series of preferred stock,
including holders of any series of the Preferred Stock, voting as a single class
without regard to series, will be entitled at Fleet's next annual meeting of
stockholders (and at each subsequent annual meeting of stockholders) to elect
such additional two directors until full cumulative dividends for all
then-current and past dividend periods on all preferred shares of Fleet so
entitled to vote, including any shares of the Preferred Stock, have been paid or
declared and set apart for payment. Any such elected directors shall serve until
Fleet's next annual meeting of stockholders or until their respective successors
shall be elected and qualified. If a vacancy in the office of such director
shall occur during the continuance of a default in dividends on preferred shares
of Fleet so entitled to vote prior to the end of the term of such director, such
vacancy shall be filled for the unexpired term of such director by the remaining
director elected by the preferred shares so entitled to vote.
The affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of the Preferred Stock of any series at the time outstanding,
voting as a class, will be required for any amendment of the Articles (or any
certificate supplemental thereto) which will adversely affect the powers,
preferences, privileges or rights of such series of Preferred Stock. The
affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of any series of Preferred Stock and any other series of
preferred stock of Fleet ranking on a parity with any series of Preferred Stock
as to dividends or upon liquidation, voting as a single class without regard to
series, will be required to issue, authorize or increase the authorized amount
of, or issue or authorize any obligation or security convertible into or
evidencing a right to purchase, any additional class or series of stock ranking
prior to any series of Preferred Stock as to dividends or upon liquidation, but
such vote will not be required to take any such actions with respect to any
stock ranking on a parity with or junior to the Preferred Stock of such series.
Subject to such affirmative vote or consent of the holders of the
outstanding shares of the Preferred Stock of any series, Fleet may, by
resolution of its Board of Directors or as otherwise permitted by law, from time
to time alter or change the preferences, rights or powers of the Preferred Stock
of such series. The holders of the Preferred Stock of such series shall not be
entitled to participate in any such vote if, at or prior to the time when any
such alteration or change is to take effect, provision is made for the
redemption of all the Preferred Stock of such series at the time outstanding.
Nothing in this section shall be taken to require a class vote or consent in
connection with the authorization, designation, increase or issuance of any
shares of any class or series (including additional Preferred Stock of any
series) ranking junior to or on a parity with the Preferred Stock of such series
as to dividends and liquidation rights or in connection with the authorization,
designation, increase or issuance of any bonds, mortgages, debentures or other
obligations of Fleet.
CONVERSION RIGHTS
The Prospectus Supplement relating to any series of the Preferred Stock that
is convertible will state the terms on which shares of such series are
convertible into Common Stock of Fleet or another series of Preferred Stock.
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DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts does not purport to be complete and is subject to
and qualified in its entirety by reference to the Deposit Agreement and
Depositary Receipts relating to the applicable series of the Preferred Stock,
forms of which will be filed as an exhibit to the Registration Statement of
which this Prospectus forms a part.
GENERAL
Fleet may, at its option, elect to offer fractional interests in shares of
Preferred Stock, rather than full shares of Preferred Stock. In the event such
option is exercised, Fleet will provide for the issuance by a Depositary of
Depositary Receipts evidencing Depositary Shares, each of which will represent a
fractional interest (to be set forth in the Prospectus Supplement relating to a
particular series of the Preferred Stock) in a share of a particular series of
the Preferred Stock as described below.
The shares of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between Fleet and a bank or trust company selected by Fleet (which
may be affiliated with Fleet) having its principal office in the United States
and having a combined capital and surplus of at least $50,000,000 (the
"Depositary"). The Prospectus Supplement relating to a series of Depositary
Shares will set forth the name and address of the Depositary. Unless otherwise
specified in the applicable Prospectus Supplement, the Depositary for shares of
the Preferred Stock will be First Chicago. Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, in proportion to
the applicable fractional interest in a share of Preferred Stock underlying such
Depositary Share, to all the rights and preferences of the Preferred Stock
underlying such Depositary Share (including dividend, voting, redemption,
conversion and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement. Pending the preparation of definitive
engraved Depositary Receipts, the Depositary may, upon the written order of
Fleet, issue temporary Depositary Receipts substantially identical to, and
entitling the holders thereof to all the rights pertaining to, the definitive
Depositary Receipts but not in definitive form. Definitive Depositary Receipts
will be prepared thereafter without unreasonable delay, and temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts at Fleet's
expense.
Upon surrender of Depositary Receipts at the principal office of the
Depositary (unless the related Depositary Shares have previously been called for
redemption) and upon payment of the charges provided in the Deposit Agreement
and subject to the terms thereof, a holder of Depositary Shares is entitled to
have the Depositary deliver to, or upon the order of, such holder the whole
shares of Preferred Stock underlying, and any money or other property
represented by, the Depositary Shares evidenced by the surrendered Depositary
Receipts.
Partial shares of Preferred Stock will not be issued. If the Depositary
Receipts delivered by the holder evidence a number of Depositary Shares in
excess of the number of Depositary Shares representing the number of whole
shares of Preferred Stock to be withdrawn, the Depositary will deliver to such
holder at the same time a new Depositary Receipt evidencing such excess number
of Depositary Shares. Holders of shares of Preferred Stock thus withdrawn will
not thereafter be entitled to deposit such shares under the Deposit Agreement or
to receive Depositary Shares therefor. Fleet does not expect that there will be
any public trading market for the Preferred Stock except as represented by the
Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. The
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Depositary shall distribute only such amount, however, as can be distributed
without attributing to any holder of Depositary Shares a fraction of one cent,
and any balance not so distributed shall be added to and treated as part of the
next sum received by the Depositary for distribution to record holders of
Depositary Shares.
In the event of a distribution other than in cash (including, without
limitation, distributions resulting from stock dividends, splits or plans of
reorganization), the Depositary will distribute property received by it to the
record holders of Depositary Shares entitled thereto, unless the Depositary
determines that it is not feasible to make such distribution, in which case the
Depositary may, with the approval of Fleet, sell such property and distribute
the net proceeds from such sale to such holders.
The Deposit Agreement will also contain provisions relating to the manner in
which any subscription or similar rights offered by Fleet to holders of the
Preferred Stock shall be made available to holders of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If any Preferred Stock deposited under a Deposit Agreement is subject to
redemption, the related Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever Fleet redeems shares of Preferred Stock held by
the Depositary, the Depositary will redeem as of the same redemption date the
number of Depositary Shares relating to shares of Preferred Stock so redeemed.
If less than all the Depositary Shares are to be redeemed, the Depositary Shares
to be redeemed will be selected pro rata or by lot as may be determined by the
Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the number of shares of Preferred Stock
underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
underlying such Depositary Shares in accordance with such instructions, and
Fleet will agree to take all action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of Preferred Stock to the extent it does not receive
specific instructions from the holders of Depositary Shares relating to such
Preferred Stock.
TAXATION
Owners of Depositary Shares will be treated for Federal income tax purposes
as if they were owners of the Preferred Stock represented by such Depositary
Shares and, accordingly, will be required to take into account for Federal
income tax purposes income received with respect to their Depositary Shares in
the same manner as if they were holders of such underlying Preferred Stock. In
addition, (i) no gain or loss will
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be recognized for Federal income tax purposes upon the withdrawal of Preferred
Stock in exchange for Depositary Shares as provided in the Deposit Agreement,
(ii) the aggregate tax basis of the Preferred Stock received by an exchanging
owner of Depositary Shares will, upon such exchange, be the same as the
aggregate tax basis of the Depositary Shares exchanged therefor and (iii) the
holding period for shares of the Preferred Stock in the hands of an exchanging
owner of Depositary Shares who held such Depositary Shares as a capital asset at
the time of the exchange will include the period during which such person owned
such Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between Fleet and the Depositary. However, any amendment which materially and
adversely alters the rights of the existing holders of Depositary Shares will
not be effective unless such amendment has been approved by the record holders
of at least a majority of the Depositary Shares then outstanding. A Deposit
Agreement may be terminated by Fleet or the Depositary only if (i) all
outstanding Depositary Shares relating thereto have been redeemed or (ii) there
has been a final distribution in respect of the Preferred Stock of the relevant
series in connection with any liquidation, dissolution or winding up of Fleet
and such distribution has been distributed to the holders of the related
Depositary Shares.
CHARGES OF DEPOSITARY
Fleet will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. Fleet will pay charges
of the Depositary in connection with the initial deposit of the Preferred Stock
and any redemption of the Preferred Stock. Holders of Depositary Shares will pay
other transfer and other taxes and governmental charges and such other charges
as are expressly provided in the Deposit Agreement to be for their accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all notices,
reports and other communications (including proxy solicitation materials) from
Fleet which are delivered to the Depositary and which Fleet is required to
furnish to the holders of the Preferred Stock.
Neither the Depositary nor Fleet will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of Fleet and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, on information provided by persons presenting
Preferred Stock for deposit, holders of Depositary Shares or other persons
believed to be competent and on documents believed to be genuine.
Any record holder of Depositary Shares who has been a holder for at least
six months or who holds at least five percent of the outstanding shares of
capital stock of Fleet will be entitled to inspect the transfer books relating
to the Depositary Shares and the list of record holders of Depositary Shares
upon certification to the Depositary that such holder is acting in good faith
and that such inspection is for a proper purpose.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to Fleet notice of the
Depositary's election to do so, and Fleet may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000.
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DESCRIPTION OF EXISTING PREFERRED STOCK
GENERAL
The following summary does not purport to be complete and is subject in all
respects to the applicable provisions of the Rhode Island Business Corporation
Act (the "RIBCA") and the Articles and By-laws of Fleet.
FLEET $1 PAR PREFERRED STOCK
Fleet $1 Par Preferred Stock (which includes the Preferred Stock), is
issuable in series, with such relative rights, preferences and limitations of
each series (including dividend rights, dividend rate, liquidation preference,
voting rights, conversion rights and terms of redemption (including sinking fund
provisions), redemption price or prices and the number of shares constituting
any series) as may be fixed by the Board of Directors.
9.35% PREFERRED. Dividends on the outstanding 9.35% Preferred are
cumulative and are payable quarterly at the rate of 9.35% per annum. So long as
any shares of the 9.35% Preferred are outstanding, Fleet may not redeem,
repurchase or otherwise acquire any shares of the Common Stock or any other
class of Fleet stock ranking junior to or on a parity with the Fleet 9.35%
Preferred either as to dividends or upon liquidation unless full cumulative
dividends on all outstanding shares of 9.35% Preferred are paid for all past
dividend payment periods. Further, if any dividends on the 9.35% Preferred are
in arrears, Fleet may not redeem, purchase or otherwise acquire any shares of
the 9.35% Preferred unless all outstanding shares of such class are
simultaneously redeemed, purchased or otherwise acquired, except pursuant to a
purchase or exchange offer made on the same terms to holders of all outstanding
shares of the 9.35% Preferred.
Except as indicated below or except as expressly required by applicable law,
the holders of the 9.35% Preferred are not entitled to vote. If the equivalent
of six quarterly dividends payable on any of the 9.35% Preferred are in default,
the number of directors of Fleet will be increased by two and the holders of all
outstanding classes and series of Fleet preferred stock, voting as a single
class without regard to series, will be entitled to elect two additional
directors until all accrued dividends have been paid. In addition, the vote of
the holders of two-thirds of the 9.35% Preferred, voting as a separate class, is
required in order to amend or alter the Articles in a manner which would
adversely affect the preferences, rights, powers or privileges of the 9.35%
Preferred; and the vote of two-thirds of the 9.35% Preferred, and all of the
classes and series of Fleet preferred stock ranking on a parity, either as to
dividends or upon liquidation, with the 9.35% Preferred, voting together as a
single class, is required in order to reclassify stock of Fleet into stock
ranking prior, either as to dividends or upon liquidation, to the 9.35%
Preferred, or to authorize the creation or issuance of stock, or of a security
convertible into or evidencing a right to purchase stock, ranking prior, either
as to dividends or upon liquidation, to the 9.35% Preferred.
In the event of any liquidation, dissolution or winding up of Fleet, the
holders of the 9.35% Preferred are entitled to receive $250.00 per share plus
accrued and unpaid dividends.
The 9.35% Preferred is redeemable on at least 30 but not more than 60 days
notice, at the option of Fleet, as a whole or in part, at any time on and after
January 15, 2000 at a redemption price equal to $250 per share plus accrued and
unpaid dividends.
SERIES V PREFERRED. In the event of the dissolution, liquidation or winding
up of Fleet, holders of shares of the outstanding Series V Preferred are
entitled to receive a distribution of $250 per share, plus accrued and unpaid
dividends, if any.
The holders of Series V Preferred are entitled to receive dividends at the
rate of 7.25% per annum computed on the basis of the issue price thereof of $250
per share, payable quarterly, before any dividend shall be declared or paid upon
the Common Stock or the Junior Preferred Stock. The dividends on Series V
Preferred are cumulative. The Series V Preferred is redeemable, in whole or in
part, at Fleet's option, on and after April 15, 2001, at $250 per share, plus
accrued and unpaid dividends, if any. So long as any shares of the Series V
Preferred are outstanding, Fleet may not redeem, repurchase or otherwise acquire
any shares of the Common Stock or any other class of Fleet preferred stock
ranking junior to or on a parity with the Series V Preferred either as to
dividends or upon liquidation unless full cumulative dividends on
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all outstanding shares of Series V Preferred are paid for all past dividend
payment periods. Further, if any dividends on the Series V Preferred are in
arrears, Fleet may not redeem, purchase or otherwise acquire any shares of the
Series V Preferred unless all outstanding shares of such class are
simultaneously redeemed, purchased or otherwise acquired, except pursuant to a
purchase or exchange offer made on the same terms to holders of all outstanding
shares of the Series V Preferred.
Except as indicated below or except as expressly required by applicable law,
the holders of the Series V Preferred are not entitled to vote. If the
equivalent of six quarterly dividends payable on the Series V Preferred or any
other class or series of preferred stock (other than any other class of
preferred stock expressly entitled to elect additional directors by a separate
and distinct vote) are in default, the number of directors of Fleet will be
increased by two (without duplication of any increase made pursuant to the terms
of any other series of preferred stock of Fleet), and the holders of the Series
V Preferred, voting as a single class with the holders of shares of any one or
more other series of Preferred Stock (other than any other class of preferred
stock expressly entitled to elect additional directors by a separate and
distinct vote) and any other class of Fleet preferred stock ranking on a parity
with the Series V Preferred either as to dividends or distribution of assets and
upon which like voting rights have been conferred and are exercisable, will be
entitled to elect two directors to fill each of the two newly-created
directorships. Such right shall continue until full cumulative dividends for all
past dividend periods on all preferred shares of Fleet (other than any other
class of preferred stock expressly entitled to elect additional directors by a
separate and distinct vote), including any shares of the Series V Preferred,
have been paid or declared and set apart for payment. Any such elected directors
shall serve until Fleet's next annual meeting of stockholders (notwithstanding
that prior to the end of such term the dividend default shall cease to exist) or
until their respective successors shall be elected and qualify.
The affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of the Series V Preferred is required for any amendment of
the Articles (or any certificate supplemental thereto) which will adversely
affect the powers, preferences, privileges or rights of the Series V Preferred.
The affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of the Series V Preferred and any other series of preferred
stock ranking on a parity with the Series V Preferred either as to dividends or
upon liquidation, voting as a single class without regard to series, is required
to issue, authorize or increase the authorized amount of, or issue or authorize
any obligation or security convertible into or evidencing a right to purchase,
any additional class or series of stock ranking prior to the Series V Preferred
as to dividends or upon liquidation, or to reclassify any authorized stock of
Fleet into such prior shares.
SERIES VI PREFERRED. In the event of the dissolution, liquidation or
winding up of Fleet, holders of shares of the outstanding Series VI Preferred
are entitled to receive a distribution of $250 per share, plus accrued and
unpaid dividends, if any.
The holders of Series VI Preferred are entitled to receive dividends at the
rate of 6.75% per annum computed on the basis of the issue price thereof of $250
per share, payable quarterly, before any dividend shall be declared or paid upon
the Common Stock or the Junior Preferred Stock. The dividends on Series VI
Preferred are cumulative. The amount of dividends payable in respect of the
Series VI Preferred will be adjusted in the event of certain amendments to the
Internal Revenue Code of 1986, as amended (the "Code"), in respect of the
dividends received deduction. The Series VI Preferred is redeemable, in whole or
in part, at Fleet's option, on and after April 15, 2006, at $250 per share, plus
accrued and unpaid dividends, if any. The Series VI Preferred may also be
redeemed prior to April 15, 2006, in whole, at the option of Fleet, in the event
of certain amendments to the Code in respect of the dividends received
deduction. So long as any shares of the Series VI Preferred are outstanding,
Fleet may not redeem, repurchase or otherwise acquire any shares of the Common
Stock or any other class of Fleet preferred stock ranking junior to or on a
parity with the Series VI Preferred either as to dividends or upon liquidation
unless full cumulative dividends on all outstanding shares of Series VI
Preferred are paid for all past dividend payment periods. Further, if any
dividends on the Series VI Preferred are in arrears, Fleet may not redeem,
purchase or otherwise acquire any shares of the Series VI Preferred unless all
outstanding shares of such class are simultaneously redeemed, purchased or
otherwise acquired, except
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pursuant to a purchase or exchange offer made on the same terms to holders of
all outstanding shares of the Series VI Preferred.
Except as indicated below or except as expressly required by applicable law,
the holders of the Series VI Preferred are not entitled to vote. If the
equivalent of six quarterly dividends payable on the Series VI Preferred or any
other class or series of preferred stock (other than any other class of
preferred stock expressly entitled to elect additional directors by a separate
and distinct vote) are in default, the number of directors of Fleet will be
increased by two (without duplication of any increase made pursuant to the terms
of any other series of preferred stock of Fleet), and the holders of the Series
VI Preferred, voting as a single class with the holders of shares of any one or
more other series of Preferred Stock (other than any other class of preferred
stock expressly entitled to elect additional directors by a separate and
distinct vote) and any other class of Fleet preferred stock ranking on a parity
with the Series VI Preferred either as to dividends or distribution of assets
and upon which like voting rights have been conferred and are exercisable, will
be entitled to elect two directors to fill each of the two newly-created
directorships. Such right shall continue until full cumulative dividends for all
past dividend periods on all preferred shares of Fleet (other than any other
class of preferred stock expressly entitled to elect additional directors by a
separate and distinct vote), including any shares of the Series VI Preferred,
have been paid or declared and set apart for payment. Any such elected directors
shall serve until Fleet's next annual meeting of stockholders (notwithstanding
that prior to the end of such term the dividend default shall cease to exist) or
until their respective successors shall be elected and qualify.
The affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of the Series VI Preferred is required for any amendment of
the Articles (or any certificate supplemental thereto) which will adversely
affect the powers, preferences, privileges or rights of the Series VI Preferred.
The affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of the Series VI Preferred and any other series of preferred
stock ranking on a parity with the Series VI Preferred either as to dividends or
upon liquidation, voting as a single class without regard to series, is required
to issue, authorize or increase the authorized amount of, or issue or authorize
any obligation or security convertible into or evidencing a right to purchase,
any additional class or series of stock ranking prior to the Series VI Preferred
as to dividends or upon liquidation, or to reclassify any authorized stock of
Fleet into such prior shares.
SERIES VII PREFERRED. In the event of the dissolution, liquidation or
winding up of Fleet, holders of shares of the outstanding Series VII Preferred
are entitled to receive a distribution of $250 per share, plus accrued and
unpaid dividends, if any.
Through April 1, 2006, the holders of Series VII Preferred are entitled to
receive dividends at the rate of 6.60% per annum computed on the basis of the
issue price thereof of $250 per share, payable quarterly, before any dividend
shall be declared or paid upon the Common Stock or the Junior Preferred Stock.
Thereafter the dividend rate on the Series VII Preferred will be a rate per
annum equal to .50% plus the highest of the Treasury Bill Rate, the Ten Year
Constant Maturity Rate and the Thirty Year Constant Maturity Rate, each as
defined in the Certificate of Designation establishing the Series VII Preferred.
The Applicable Rate per annum for any dividend period beginning on or after
April 1, 2006 will not be less than 7.0% nor greater than 13.0%. The dividends
on Series VII Preferred are cumulative. The amount of dividends payable in
respect of the Series VII Preferred will be adjusted on the event of certain
amendments to the Code, in respect of the dividends received deduction. The
Series VII Preferred is redeemable, in whole or in part, at Fleet's option, on
and after April 1, 2006, at $250 per share, plus accrued and unpaid dividends,
if any. The Series VII Preferred may also be redeemed prior to April 1, 2006, in
whole, at the option of Fleet, in the event of certain amendments to the Code in
respect of the dividends received deduction. So long as any shares of the Series
VII Preferred are outstanding, Fleet may not redeem, repurchase or otherwise
acquire any shares of the Common Stock or any other class of Fleet preferred
stock ranking junior to or on a parity with the Series VII Preferred either as
to dividends or upon liquidation unless full cumulative dividends on all
outstanding shares of Series VII Preferred are paid for all past dividend
payment periods. Further, if any dividends on the Series VII Preferred are in
arrears, Fleet may not redeem, purchase or otherwise acquire any shares of the
Series VII Preferred unless all
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outstanding shares of such class are simultaneously redeemed, purchased or
otherwise acquired, except pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding shares of the Series VII Preferred.
Except as indicated below or except as expressly required by applicable law,
the holders of the Series VII Preferred are not entitled to vote. If the
equivalent of six quarterly dividends payable on the Series VII Preferred or any
other class or series of preferred stock (other than any other class of
preferred stock expresssly entitled to elect additional directors by a separate
and distinct vote) are in default, the number of directors of Fleet will be
increased by two (without duplication of any increase made pursuant to the terms
of any other series of preferred stock of Fleet), and the holders of the Series
VII Preferred, voting as a single class with the holders of shares of any one or
more other series of Preferred Stock (other than any other class of preferred
stock expressly entitled to elect additional directors by a separate and
distinct vote) and any other class of Fleet preferred stock ranking on a parity
with the Series VII Preferred either as to dividends or distribution of assets
and upon which like voting rights have been conferred and are exercisable, will
be entitled to elect two directors to fill each of the two newly-created
directorships. Such right shall continue until full cumulative dividends for all
past dividend periods on all preferred shares of Fleet (other than any other
class of preferred stock expressly entitled to elect additional directors by a
separate and distinct vote), including any shares of the Series VII Preferred,
have been paid or declared and set apart for payment. Any such elected directors
shall serve until Fleet's next annual meeting of stockholders (notwithstanding
that prior to the end of such term the dividend default shall cease to exist) or
until their respective successors shall be elected and qualify.
The affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of the Series VII Preferred is required for any amendment of
the Articles (or any certificate supplemental thereto) which will adversely
affect the powers, preferences, privileges or rights of the Series VII
Preferred. The affirmative vote or consent of the holders of at least 66 2/3% of
the outstanding shares of the Series VII Preferred and any other series of
preferred stock ranking on a parity with the Series VII Preferred either as to
dividends or upon liquidation, voting as a single class without regard to
series, is required to issue, authorize or increase the authorized amount of, or
issue or authorize any obligation or security convertible into or evidencing a
right to purchase, any additional class or series of stock ranking prior to the
Series VII Preferred as to dividends or upon liquidation, or to reclassify any
authorized stock of Fleet into such prior shares.
SERIES VIII PREFERRED. In the event of the dissolution, liquidation or
winding up of Fleet, holders of shares of the outstanding Series VIII Preferred
are entitled to receive a distribution of $250 per share, plus accrued and
unpaid dividends (whether or not earned or declared) for the then-current
dividend period (without accumulation of accrued and unpaid dividends for prior
dividend periods), if any.
Through October 1, 2001, the holders of Series VIII Preferred are entitled
to receive dividends at the rate of 6.59% per annum computed on the basis of the
issue price thereof of $250 per share, payable quarterly, before any dividend
shall be declared or paid upon the Common Stock or the Junior Preferred Stock.
Thereafter the dividend rate on the Series VIII Preferred will be a rate per
annum equal to .45% plus the highest of the Treasury Bill Rate, the Ten Year
Constant Maturity Rate and the Thirty Year Constant Maturity Rate, each as
defined in the Certificate of Designations establishing the Series VIII
Preferred. The Applicable Rate per annum for any dividend period beginning on or
after October 1, 2001 will not be less than 7.0% nor greater than 13.0%. The
dividends on Series VIII Preferred are noncumulative. The amount of dividends
payable in respect of the Series VIII Preferred will be adjusted in the event of
certain amendments to the Code in respect of the dividends received deduction.
The Series VIII Preferred is redeemable, in whole or in part, at Fleet's option
on and after October 1, 2001, at $250 per share, plus accrued and unpaid
dividends for the then-current dividend period (without accumulation of accrued
and unpaid dividends for prior dividend periods), if any. The Series VIII
Preferred may also be redeemed prior to October 1, 2001, in whole, at the option
of Fleet, in the event of certain amendments to the Code in respect of the
dividends received deduction. So long as any shares of the Series VIII Preferred
are outstanding, Fleet may not redeem, repurchase or otherwise acquire any
shares of the Common Stock or any other class of Fleet preferred stock ranking
junior to or on a parity with the Series VIII Preferred either as to dividends
or upon liquidation unless full dividends on all outstanding shares of Series
VIII
19
<PAGE>
Preferred are paid for the then-current dividend period. Further, if dividends
on the Series VIII Preferred have not been paid for the then-current dividend
period, Fleet may not redeem, purchase or otherwise acquire any shares of the
Series VIII Preferred unless all outstanding shares of such class are
simultaneously redeemed, purchased or otherwise acquired, except pursuant to a
purchase or exchange offer made on the same terms to holders of all outstanding
shares of the Series VIII Preferred.
Except as indicated below or except as expressly required by applicable law,
the holders of the Series VIII Preferred are not entitled to vote. If the
equivalent of six quarterly dividends payable on the Series VIII Preferred or
any other class or series of preferred stock (other than any other class of
preferred stock expressly entitled to elect additional directors by a separate
and distinct vote) are in default, the number of directors of Fleet will be
increased by two (without duplication of any increase made pursuant to the terms
of any other series of preferred stock of Fleet), and the holders of the Series
VIII Preferred, voting as a single class with the holders of shares of any one
or more other series of Preferred Stock (other than any other class of preferred
stock expressly entitled to elect additional directors by a separate and
distinct vote) and any other class of Fleet preferred stock ranking on a parity
with the Series VIII Preferred either as to dividends or distribution of assets
and upon which like voting rights have been conferred and are exercisable, will
be entitled to elect two directors to fill each of the two newly-created
directorships. Such right of the holders of Series VIII Preferred shall continue
until dividends on the Series VIII Preferred have been paid or declared and set
apart for payment regularly for at least one year. Any such elected directors
shall serve until Fleet's next annual meeting of stockholders (notwithstanding
that prior to the end of such term the dividend default shall cease to exist) or
until their successors shall be elected and qualify.
The affirmative vote or consent of the holders of at least 66 2/3% of the
outstanding shares of the Series VIII Preferred is required for any amendment of
the Articles (or any certificate supplemental thereto) which will adversely
affect the powers, preferences, privileges or rights of the Series VIII
Preferred. The affirmative vote or consent of the holders of at least 66 2/3% of
the outstanding shares of the Series VIII Preferred and any other series of
preferred stock ranking on a parity with the Series VIII Preferred either as to
dividends or upon liquidation, voting as a single class without regard to
series, is required to issue, authorize or increase the authorized amount of, or
issue or authorize any obligation or security convertible into or evidencing a
right to purchase, any additional class or series of stock ranking prior to the
Series VIII Preferred as to dividends or upon liquidation, or to reclassify any
authorized stock of Fleet into such prior shares.
JUNIOR PREFERRED STOCK. The Junior Preferred Stock will be issued upon the
exercise of a Right (as hereinafter defined) issued to holders of the Common
Stock. As of the date of this Prospectus, there were 3,000,000 shares of Fleet
$1 Par Preferred Stock reserved for issuance upon the exercise of the Rights.
See "--Description of Common Stock--Preferred Share Purchase Rights". Shares of
Junior Preferred Stock purchasable upon exercise of the Rights will rank junior
to the Fleet $1 Par Preferred Stock and the Fleet $20 Par Adjustable Rate
Preferred Stock and will not be redeemable. Each share of Junior Preferred Stock
will, subject to the rights of such senior securities of Fleet, be entitled to a
preferential cumulative quarterly dividend payment equal to the greater of $1.00
per share or, subject to certain adjustments, 100 times the dividend declared
per share of Common Stock. Upon the liquidation, dissolution or winding up of
Fleet, the holders of the Junior Preferred Stock will, subject to the rights of
such senior securities, be entitled to a preferential liquidation payment equal
to the greater of $1.00 per share plus all accrued and unpaid dividends or 100
times the payment made per share of Common Stock. Finally, in the event of any
merger, consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Junior Preferred Stock will, subject to the rights of
such senior securities, be entitled to receive 100 times the amount received per
share of Common Stock. Each share of Junior Preferred Stock will have 100 votes,
voting together with the Common Stock. The rights of the Junior Preferred Stock
are protected by customary antidilution provisions.
20
<PAGE>
DESCRIPTION OF COMMON STOCK
GENERAL
Holders of the Common Stock are entitled to receive dividends when, as and
if declared by the Board of Directors out of any funds legally available
therefor, and are entitled upon liquidation, after claims of creditors and
preferences of the Preferred Stock, and any other class or series of preferred
stock at the time outstanding, to receive pro rata the net assets of Fleet.
Dividends are paid on the Common Stock only if all dividends on the outstanding
series of Preferred Stock, and any other class or series of preferred stock at
the time outstanding, for the then-current period and, in the case of Cumulative
Preferred Stock, all prior periods have been paid or provided for.
Fleet $1 Par Preferred Stock and any other class of preferred stock have, or
upon issuance will have, preference over the Common Stock with respect to the
payment of dividends and the distribution of assets in the event of liquidation
or dissolution of Fleet and such other preferences as may be fixed by the Board
of Directors.
The holders of the Common Stock are entitled to one vote for each share held
and are vested with all of the voting power except as the Board of Directors has
provided with respect to outstanding preferred stock or may provide, in the
future, with respect to Preferred Stock or any other class or series of
preferred stock which it may hereafter authorize. See "Description of Existing
Preferred Stock". Shares of Common Stock are not redeemable and have no
subscription, conversion or preemptive rights.
The affirmative vote of not less than 80% of Fleet's outstanding voting
stock, voting separately as a class, is required for certain Business
Combinations between Fleet and/or its subsidiaries and persons owning 10% or
more of its voting stock. See "Selected Provisions in the Articles of Fleet;
Business Combinations with Related Persons".
The Common Stock is listed on the New York Stock Exchange. The outstanding
shares of Common Stock are, and the shares to be issued in connection with any
offering hereunder will be, validly issued, fully paid and non-assessable and
the holders thereof are not, and will not be, subject to any liability as
stockholders.
TRANSFER AGENT AND REGISTRAR.
The Transfer Agent and Registrar for the Common Stock is First Chicago.
RESTRICTIONS ON OWNERSHIP.
The Bank Holding Company Act (the "BHCA") requires any "bank holding
company", as such term is defined therein, to obtain the approval of the Federal
Reserve Board prior to the acquisition of 5% or more of the Common Stock. Any
person other than a bank holding company is required to obtain prior approval of
the Federal Reserve Board to acquire 10% or more of the Common Stock under the
Change in Bank Control Act (the "CBCA"). Any holder of 25% or more of the Common
Stock (or a holder of 5% or more if such holder otherwise exercises a
"controlling influence" over Fleet) is subject to regulation as a bank holding
company under the BHCA.
PREFERRED SHARE PURCHASE RIGHTS
On November 21, 1990, the Board of Directors of Fleet declared a dividend of
one Preferred Share Purchase Right (a "Right") for each outstanding share of
Common Stock of Fleet. The dividend was paid on December 4, 1990 to the
shareholders of record on that date. Each Right, when exercisable, will entitle
the registered holder to purchase from Fleet one one-hundredth of a share of
Junior Preferred Stock at an exercise price of $50 per one one-hundredth of a
share of Junior Preferred Stock (the "Purchase Price"), subject to certain
adjustments. Until the Distribution Date (as hereinafter defined), Fleet will
issue one Right with each share of Common Stock. The following summary does not
purport to be complete and is
21
<PAGE>
subject to, and is qualified in its entirety by reference to, all of the
provisions of the Rights Agreement dated as of November 21, 1990 between Fleet
and the Rights Agent, a copy of which was filed as an exhibit to the
Registration Statement on Form 8-A filed with the Commission on December 4,
1990, as amended by a First Amendment to Rights Agreement dated March 28, 1991
and a Second Amendment to Rights Agreement dated July 12, 1991, copies of which
were filed as exhibits to Fleet's Amendment to Application or Report on Form 8
dated September 6, 1991 and a Third Amendment to Rights Agreement dated February
20, 1995, a copy of which was filed as an exhibit to Fleet's Form 8-A/A dated
March 17, 1995 (as amended, the "Rights Agreement").
The Rights are not represented by separate certificates and are not
exercisable or transferable apart from the Common Stock until the earlier to
occur of (i) the tenth day after a public announcement by Fleet (x) that a
person or group of affiliated or associated persons has acquired, or obtained
the right to acquire, beneficial ownership (as defined in the Rights Agreement)
of 10% or more (or, in the case of an institutional investor, acting in the
ordinary course of business and not with the purpose of changing or influencing
control of Fleet (a "Qualifying Investor"), 15% or more) of the outstanding
shares of Common Stock, (y) that any person or group of affiliated or associated
persons, which beneficially owned 10% or more (or, in the case of a Qualifying
Investor, 15% or more) of the outstanding shares on the Declaration Date, or
which acquired beneficial ownership of 10% or more (or, in the case of a
Qualifying Investor, 15% or more) of the outstanding shares as a result of any
repurchase of shares by Fleet, thereafter acquired beneficial ownership of
additional shares constituting 1% or more of the outstanding shares, or (z) that
any person who was a Qualifying Investor owning 10% or more of the outstanding
shares of Common Stock ceased to qualify as a Qualifying Investor and thereafter
acquired beneficial ownership of additional shares constituting 1% or more of
the outstanding shares (any person described in clause (x), (y) or (z) being an
"Acquiring Person"); and (ii) the tenth day (or such later day as may be
determined by action of the Board of Directors of Fleet prior to such time as
any person becomes an Acquiring Person) after the date of the commencement of a
tender or exchange offer by any person (other than Fleet) to acquire (when added
to any shares as to which such person is the beneficial owner immediately prior
to such commencement) beneficial ownership of 10% or more of the issued and
outstanding shares of Common Stock (the earlier of such dates being called the
"Distribution Date"). On March 28, 1991 and July 12, 1991, the Rights Agreement
was amended to change the definition of an "Acquiring Person" (i) to permit the
sale of Fleet's Dual Convertible Preferred Stock and issuance of rights to
purchase Common Stock to the partnerships which purchased such stock and (ii) to
permit the Board of Directors of Fleet to determine that a person who would
otherwise be an "Acquiring Person" had become such inadvertently and therefore
allow divestiture of a sufficient number of shares to avoid such designation.
The Rights Agreement was further amended on February 20, 1995 to amend the
definition of "Acquiring Person" to permit the execution and delivery by Fleet
of the merger agreement with Shawmut National Corporation ("Shawmut") and the
option agreement in connection therewith without Shawmut becoming an Acquiring
Person under the Rights Agreement.
The Rights will first become exercisable on the Distribution Date and could
then begin trading separately from the Common Stock. The Rights will expire on
November 21, 2000 (the "Final Expiration Date"), unless the Final Expiration
Date is extended or unless the Rights are earlier redeemed by Fleet.
In the event any person becomes an Acquiring Person, the Rights would give
holders (other than such Acquiring Person and its transferees) the right to buy,
for the Purchase Price, Common Stock (or, under certain circumstances, cash,
property or other debt or equity securities ("Common Stock equivalents")) with a
market value of twice the Purchase Price. In addition, at any time after any
person becomes an Acquiring Person, the Board may, at its option and in lieu of
any transaction described in the preceding sentence, exchange the outstanding
and exercisable Rights (other than Rights held by such Acquiring Person and its
transferees) for shares of Common Stock or Common Stock equivalents at an
exchange ratio of one share of Common Stock per Right, subject to certain
adjustments.
In any merger or consolidation involving Fleet after the Rights become
exercisable, each Right will be converted into the right to purchase, for the
Purchase Price, common stock of the surviving corporation
22
<PAGE>
(which may be Fleet) with a market value of twice the Purchase Price. The Board
of Directors of Fleet may amend the Rights Agreement or redeem the Rights for
$.01 each at any time until there is an Acquiring Person. Thereafter, the Board
of Directors can amend the Rights Agreement only to eliminate ambiguities or to
provide additional benefits to the holders of the Rights (other than the
Acquiring Person).
Until a Right is exercised, the holder thereof, as such, will have no rights
as a shareholder of Fleet, including, without limitation, the right to vote or
to receive dividends.
The Purchase Price payable, and the number of shares of Junior Preferred
Stock or other securities or property issuable, upon exercise of the Rights, and
the number of outstanding Rights, are subject to customary antidilution
adjustments.
The Rights have certain "anti-takeover" effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire Fleet on
terms not approved by the Board of Directors of Fleet, except pursuant to an
offer conditioned on a substantial number of Rights being acquired. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors prior to the time that there is an Acquiring Person (at
which time holders of the Rights become entitled to exercise their Rights for
shares of Common Stock at one-half the market price), since until such time the
Rights generally may be redeemed by the Board of Directors of Fleet at $.01 per
Right.
SELECTED PROVISIONS IN THE ARTICLES OF FLEET
BUSINESS COMBINATIONS WITH RELATED PERSONS
The Articles require that neither Fleet nor any of its subsidiaries may
engage in a Business Combination with a Related Person unless such Business
Combination (a) was approved by an 80% vote of the Board of Directors prior to
the time the Related Person became such; (b) is approved by a vote of 80% of the
Continuing Directors and a majority of the entire Board and certain conditions
as to price and procedure are complied with; or (c) is approved by a vote of 80%
of Fleet's outstanding shares of Fleet capital stock entitled to vote generally
in the election of directors, voting as a single class. Under the Articles, a
"Business Combination" includes any merger or consolidation of Fleet or any of
its subsidiaries into or with a Related Person or any of its affiliates or
associates; any sale, exchange, lease, transfer or other disposition to or with
a Related Person of all, substantially all or any Substantial Part (defined as
assets having a value of more than 5% of the total consolidated assets of Fleet)
of the assets of Fleet or any of its subsidiaries; any purchase, exchange, lease
or other acquisition by Fleet or any of its subsidiaries of all or any
Substantial Part of the assets or business of a Related Person or any of its
affiliates or associates; any reclassification of securities, recapitalization
or other transaction which has the effect, directly or indirectly, of increasing
the proportionate amount of voting shares of Fleet or any subsidiary which are
beneficially owned by a Related Person; and the acquisition by a Related Person
of beneficial ownership of voting securities, securities convertible into voting
securities or any rights, warrants or options to acquire voting securities of a
subsidiary of Fleet; a "Related Person" includes any person who is the
beneficial owner of 10% or more of Fleet's voting shares prior to the
consummation of a Business Combination or any person who is an affiliate of
Fleet and was the beneficial owner of 10% or more of Fleet's voting shares at
any time within the five years preceding the date on which a binding agreement
providing for a Business Combination is authorized by the Board of Directors;
and the "Continuing Directors" are those individuals who were members of the
Fleet Board of Directors prior to the time a Related Person became the
beneficial owner of 10% or more of Fleet's voting stock or those individuals
designated as Continuing Directors (prior to their initial election as
directors) by a majority of the then Continuing Directors. To amend these
provisions, a super majority vote (80%) of the Board of Directors, a majority
vote of the Continuing Directors and a super majority vote (80%) of the
stockholders is required unless the amendment is recommended to the stockholders
by a majority of the Board of Directors and not less than 80% of the Continuing
Directors, in which event only the vote provided under Rhode Island law is
required.
23
<PAGE>
DIRECTORS
The Articles contain a number of additional provisions which are intended to
delay an insurgent's ability to take control of Fleet's Board of Directors, even
after an insurgent has obtained majority ownership of the Common Stock. The
Articles provide for a classified Board of Directors, consisting of three
classes of directors serving staggered three-year terms. Directors of Fleet may
only be removed for cause and only (a) by a vote of the holders of 80% of the
outstanding shares of Fleet stock entitled to vote thereon voting separately as
a class at a meeting called for that purpose or (b) by a vote of a majority of
the Continuing Directors and a majority of the Board of Directors as constituted
at that time. Vacancies on the Board of Directors, whether due to resignation,
death, incapacity or an increase in the number of directors, may only be filled
by the Board, acting by a vote of 80% of the directors then in office. The
Articles provide that the number of directors of Fleet (exclusive of directors
to be elected by the holders of any one or more series of the Preferred Stock
voting separately as a class or classes) that shall constitute the Board of
Directors shall be 13, unless otherwise determined by resolution adopted by a
super majority vote (80%) of the Board of Directors and a majority of the
Continuing Directors. Pursuant to such an adopted resolution, the number of
directors that may serve is currently fixed at 20, except in the event that
quarterly dividends are not paid on non-voting Preferred Stock as described
above, and may only be increased by the affirmative vote of 80% of the Board of
Directors and a majority of the Continuing Directors. A super majority vote
(80%) of the Board of Directors, a majority vote of the Continuing Directors and
a super majority vote (80%) of the outstanding shares of Fleet stock entitled to
vote thereon voting separately as a class are required to amend any of these
provisions.
DESCRIPTION OF WARRANTS
Fleet may issue Warrants for the purchase of Preferred Stock or Common
Stock. Warrants may be issued independently or together with Preferred Stock or
Common Stock offered by any Prospectus Supplement and may be attached to or
separate from any such Securities. Each series of Warrants will be issued under
a separate warrant agreement (a "Warrant Agreement") to be entered into between
Fleet and a bank or trust company, as warrant agent (the "Warrant Agent"). The
Warrant Agent will act solely as an agent of the Company in connection with the
Warrants and will not assume any obligation or relationship of agency or trust
for or with any holders or beneficial owners of Warrants. The following summary
of certain provisions of the Warrants does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the provisions of the
Warrant Agreement that will be filed with the Commission in connection with the
offering of such Warrants.
The Prospectus Supplement relating to any particular issue of Preferred
Stock Warrants or Common Stock Warrants will describe the terms of such
Warrants, including the following: (a) the title of such Warrants; (b) the
offering price for such Warrants, if any; (c) the aggregate number of such
Warrants; (d) the designation and terms of the Common Stock or Preferred Stock
purchasable upon exercise of such Warrants; (e) if applicable, the designation
and terms of the Securities with which such Warrants are issued and the number
of such Warrants issued with each such Security; (f) if applicable, the date
from and after which such Warrants and any Securities issued therewith will be
separately transferable; (g) the number of shares of Common Stock or Preferred
Stock purchasable upon exercise of a Warrant and the price at which such shares
may be purchased upon exercise; (h) the date on which the right to exercise such
Warrants shall commence and the date on which such right shall expire; (i) if
applicable, the minimum or maximum amount of such Warrants that may be exercised
at any one time; (j) information with respect to book-entry procedures, if any;
(k) the currency or currency units in which the offering price, if any, and the
exercise price are payable; (l) if applicable, a discussion of material United
States federal income tax considerations; (m) the antidilution provisions of
such Warrants, if any; (n) the redemption or call provisions, if any, applicable
to such Warrants; and (o) any additional terms of the Warrants, including terms,
procedures, and limitations relating to the exchange and exercise of such
Warrants.
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<PAGE>
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 Preferred Stock, Depositary Shares 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 Preferred Stock, Depositary Shares 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 Preferred Stock, Depositary Shares or
Warrants are also being sold to underwriters acting as principals for their own
account, the underwriters shall have purchased such Preferred Stock, Depositary
Shares 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 incorporated by reference in
Fleet's Annual Report on Form 10-K for the fiscal year ended December 31, 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.
25
<PAGE>
LEGAL OPINIONS
The validity of the Securities offered hereby will be passed upon for Fleet
by Edwards & Angell, One Hospital Trust Plaza, Providence, Rhode Island 02903.
V. Duncan Johnson, a partner of Edwards & Angell, is a director of Fleet
National Bank, a wholly-owned subsidiary of Fleet, and beneficially owns 4,052
shares of Common Stock.
26
<PAGE>
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY FLEET OR BY ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL
UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF FLEET SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
PROSPECTUS
Available Information.......................... 2
Incorporation of Certain Documents by
Reference.................................... 2
Fleet Financial Group, Inc. ................... 3
Consolidated Ratios of Earnings to Fixed
Charges and Dividends on Preferred Stock..... 7
Use of Proceeds................................ 7
Description of Preferred Stock................. 8
Description of Depositary Shares............... 13
Description of Existing Preferred Stock........ 16
Description of Common Stock.................... 21
Selected Provisions in the Articles of Fleet... 23
Description of Warrants........................ 24
Plan of Distribution........................... 25
Experts........................................ 25
Legal Opinions................................. 26
</TABLE>
$2,000,000,000
[LOGO]
FLEET FINANCIAL
GROUP, INC.
----------
PREFERRED STOCK
COMMON STOCK
PROSPECTUS
-----------------
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered other than underwriting compensation are:
<TABLE>
<S> <C>
Filing Fee for Registration Statement............................. $ 606,061
Legal Fees and Expenses........................................... 50,000
Accounting Fees and Expenses...................................... 25,000
Printing and Engraving Fees....................................... 50,000
Miscellaneous..................................................... 1,939
---------
$ 733,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's By-laws provide for indemnification to the extent permitted
by Section 7-1.1-4.1 of the Rhode Island Business Corporation Law. Such section,
as adopted by the By-laws, requires the Registrant to indemnify directors,
officers, employees or agents against judgments, fines, reasonable costs,
expenses and counsel fees paid or incurred in connection with any proceeding to
which such director, officer, employee or agent or his legal representative may
be a party (or for testifying when not a party) by reason of his being a
director, officer, employee or agent, provided that such director, officer,
employee or agent shall have acted in good faith and shall have reasonably
believed (a) if he was acting in his official capacity that his conduct was in
the Registrant's best interests, (b) in all other cases that his conduct was at
least not opposed to its best interests, and (c) in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful. The
Registrant's By-laws provide that such rights to indemnification are contract
rights and that the expenses incurred by an indemnified person shall be paid in
advance of a final disposition of any proceeding, provided, however, that if
required under applicable law, such person must deliver a written affirmation
that he has met the standards of care required under such provisions to be
entitled to indemnification and provides an undertaking by or on behalf of such
person to repay all amounts advanced if it is ultimately determined that such
person is not entitled to indemnification. With respect to possible
indemnification of directors, officers and controlling persons of the Registrant
for liabilities arising under the Securities Act of 1933 (the "Act") pursuant to
such provisions, the Registrant is aware that the Securities and Exchange
Commission has publicly taken the position that such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1(a) --Proposed form of Underwriting Agreement for Debt Securities (incorporated by
reference to Exhibit 1(a) of Registration Statement No. 33-63631).
1(b) --Proposed form of Underwriting Agreement for Preferred Stock and Common Stock
(incorporated by reference to Exhibit 1(b) of Registration Statement No.
33-63631).
1(c) --Proposed form of Selling Agency Agreement for Debt Securities (incorporated by
reference to Exhibit 1(b) of Registration Statement No. 33-45137).
4(a) --Senior Indenture dated October 1, 1992 between the Registrant and The First
National Bank of Chicago, as Trustee (incorporated by reference to Exhibit 4(a)
or Registration Statement No. 33-50216).
4(b) --Form of Warrant Agreement for Warrants attached to Debt Securities (incorporated
by reference to Exhibit 4(b)(1) of Registration Statement No. 33-3573).
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
4(c) --Form of Warrant Agreement for Warrants not attached to Debt Securities
(incorporated by reference to Exhibit 4(b)(2) of Registration Statement No.
33-3573).
4(d) --Form of Note for Senior Debt Securities (included in Exhibit 4(a) on pages 18
through 27).
4(e) --Subordinated Indenture dated October 1, 1992 between the Registrant and The First
National Bank of Chicago, as Trustee (incorporated by reference to Exhibit 4(d)
of Registration Statement No. 33-50216), as supplemented by a First Supplemental
Indenture dated November 30, 1992 (incorporated by reference to Exhibit 4 to the
Registrant's Current Report on Form 8-K dated November 30, 1992).
4(f) --Form of Note for Subordinated Debt Securities (incorporated by reference to
Exhibit 4(c) of Registration Statement No. 33-40965).
4(g) --Form of Medium-Term Note (incorporated by reference to Exhibit 4(f) of
Registration Statement No. 33-50216).
4(h) --Restated Articles of Incorporation of the Registrant (incorporated by reference
to Exhibit 1 of Fleet's Registration Statement on Form 8-A dated February 27,
1996).
4(i) --Bylaws of the Registrant (incorporated by reference to Exhibit 2 of Fleet's
Registration Statement on Form 8-A dated February 27, 1996).
4(j) --Form of Certificate of Designations (incorporated by reference to Exhibit 4(a) of
Registration Statement No. 33-40967).
4(k) --Form of Deposit Agreement (incorporated by reference to Exhibit 4(b) of
Registration Statement No. 33-40967).
4(l) --Form of Warrant Agreement for Warrants attached to Common Stock or Preferred
Stock (incorporated by reference to Exhibit 4(j) of Registration Statement No.
33-55555).
4(m) --Form of Warrant Agreement for Warrants not attached to Common Stock or Preferred
Stock (incorporated by reference to Exhibit 4(k) of Registration Statement No.
33-55555).
4(n) --Rights Agreement dated as of November 21, 1990 between the Registrant and Fleet
National Bank, as amended by a First Amendment thereto dated as of March 28, 1991
and a Second Amendment thereto dated as of July 12, 1991 and a Third Amendment
thereto dated as of February 20, 1995 (incorporated by reference to Exhibit 1 to
the Registrant's Current Report on Form 8-K dated November 21, 1990, Exhibits
4(a) and 4(b) to the Registrant's Current Report on Form 8-K dated March 28, 1991
and Exhibit 99.3 to the Registrant's Current Report on Form 8-K dated February
20, 1995).
4(o) --Instruments defining the rights of security holders, including indentures
(Registrant has no instruments defining the rights of holders of equity or debt
securities where the amount of securities authorized thereunder exceeds 10% of
the total assets of Registrant and its subsidiaries on a consolidated basis.
Registrant hereby agrees to furnish a copy of any such instrument to the
Commission upon request).
4(p) --Form of Rights Certificate for stock purchase rights issued to Whitehall
Associates, L.P., and KKR Partners II, L.P. (incorporated by reference to Exhibit
4(c) of Fleet's Current Report on Form 8-K dated July 12, 1991).
5 --Opinion of Edwards & Angell as to legality (to be filed by amendment).
12(a) --Computation of Ratio of Earnings to Fixed Charges.
12(b) --Computation of Ratio of Earnings to Fixed Charges and Dividends on Preferred
Stock.
23(a) --Consent of KPMG Peat Marwick LLP.
23(b) --Consent of Edwards & Angell (included in Exhibit 5).
24 --Power of Attorney of certain officers and directors (included on signature
pages).
25 --Form T-1 Statement of Eligibility and Qualification of the Senior Trustee and the
Subordinated Trustee (to be filed by amendment).
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
II-2
<PAGE>
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933 unless the information required to be included in such
post-effective amendment is contained in a periodic report filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 and incorporated
herein by reference:
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement unless the information required to be included
in such post-effective amendment is contained in a periodic report filed
with or furnished to the Commission by the Registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 and
incorporated herein by reference. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement:
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial
bona fide offering thereof: and
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to Item 15 of this Registration Statement, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against policy as expressed in the Securities Act
of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
II-3
<PAGE>
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective; and
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all
requirements for filing on Form S-3 and has duly caused this Form S-3
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Boston, and Commonwealth of Massachusetts, on
October 6, 1997.
FLEET FINANCIAL GROUP, INC.
By: /s/ TERRENCE MURRAY
------------------------------------------
TERRENCE MURRAY
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Each person whose signature appears below hereby constitutes and appoints
the Chairman and Chief Executive Officer, the Vice Chairman and Chief Financial
Officer or the Secretary, or any of them, acting alone, as his true and lawful
attorney-in-fact, with full power and authority to execute in the name, place
and stead of each such person in any and all capacities and to file, an
amendment or amendments to the Registration Statement (and all exhibits thereto)
and any documents relating thereto, which amendments may make such changes in
the Registration Statement as said officer or officers so acting deem(s)
advisable.
Pursuant to the requirements of the Securities Act of 1933, this Form S-3
Registration Statement has been signed by the following persons in the
capacities indicated on October 6, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------- --------------------------------------------------------
<C> <S>
/s/ TERRENCE MURRAY Chairman, Chief Executive
------------------------------------------ Officer and Director
TERRENCE MURRAY
/s/ EUGENE M. MCQUADE Vice Chairman and
------------------------------------------ Chief Financial Officer
EUGENE M. MCQUADE
/s/ ROBERT C. LAMB, JR. Controller
------------------------------------------
ROBERT C. LAMB, JR.
/s/ JOEL ALVORD Director
------------------------------------------
JOEL ALVORD
/s/ WILLIAM BARNET, III Director
------------------------------------------
WILLIAM BARNET, III
/s/ BRADFORD R. BOSS Director
------------------------------------------
BRADFORD R. BOSS
/s/ STILLMAN B. BROWN Director
------------------------------------------
STILLMAN B. BROWN
/s/ PAUL J. CHOQUETTE, JR. Director
------------------------------------------
PAUL J. CHOQUETTE, JR.
/s/ JOHN T. COLLINS Director
------------------------------------------
JOHN T. COLLINS
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------- --------------------------------------------------------
<C> <S>
/s/ JAMES F. HARDYMON Director
------------------------------------------
JAMES F. HARDYMON
/s/ ROBERT M. KAVNER Director
------------------------------------------
ROBERT M. KAVNER
/s/ RAYMOND C. KENNEDY Director
------------------------------------------
RAYMOND C. KENNEDY
/s/ ROBERT J. MATURA Director
------------------------------------------
ROBERT J. MATURA
/s/ ARTHUR C. MILOT Director
------------------------------------------
ARTHUR C. MILOT
/s/ THOMAS D. O'CONNOR Director
------------------------------------------
THOMAS D. O'CONNOR
/s/ MICHAEL B. PICOTTE Director
------------------------------------------
MICHAEL B. PICOTTE
/s/ LOIS D. RICE Director
------------------------------------------
LOIS D. RICE
/s/ JOHN R. RIEDMAN Director
------------------------------------------
JOHN R. RIEDMAN
/s/ THOMAS M. RYAN Director
------------------------------------------
THOMAS M. RYAN
/s/ SAMUEL O. THIER Director
------------------------------------------
SAMUEL O. THIER
/s/ PAUL R. TREGURTHA Director
------------------------------------------
PAUL R. TREGURTHA
</TABLE>
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBITS
- ---------
<C> <S>
1(a) --Proposed form of Underwriting Agreement for Debt Securities (incorporated by reference to Exhibit 1(a)
of Registration Statement No. 33-63631).
1(b) --Proposed form of Underwriting Agreement for Preferred Stock and Common Stock (incorporated by
reference to Exhibit 1(b) of Registration Statement No. 33-63631).
1(c) --Proposed form of Selling Agency Agreement for Debt Securities (incorporated by reference to Exhibit
1(b) of Registration Statement No. 33-45137).
4(a) --Senior Indenture dated October 1, 1992 between the Registrant and The First National Bank of Chicago,
as Trustee (incorporated by reference to Exhibit 4(a) or Registration Statement No. 33-50216).
4(b) --Form of Warrant Agreement for Warrants attached to Debt Securities (incorporated by reference to
Exhibit 4(b)(1) of Registration Statement No. 33-3573).
4(c) --Form of Warrant Agreement for Warrants not attached to Debt Securities (incorporated by reference to
Exhibit 4(b)(2) of Registration Statement No. 33-3573).
4(d) --Form of Note for Senior Debt Securities (included in Exhibit 4(a) on pages 18 through 27).
4(e) --Subordinated Indenture dated October 1, 1992 between the Registrant and The First National Bank of
Chicago, as Trustee (incorporated by reference to Exhibit 4(d) of Registration Statement No.
33-50216), as supplemented by a First Supplemental Indenture dated November 30, 1992 (incorporated by
reference to Exhibit 4 to the Registrant's Current Report on Form 8-K dated November 30, 1992).
4(f) --Form of Note for Subordinated Debt Securities (incorporated by reference to Exhibit 4(c) of
Registration Statement No. 33-40965).
4(g) --Form of Medium-Term Note (incorporated by reference to Exhibit 4(f) of Registration Statement No.
33-50216).
4(h) --Restated Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 1 of
Fleet's Registration Statement on Form 8-A dated February 27, 1996).
4(i) --Bylaws of the Registrant (incorporated by reference to Exhibit 2 of Fleet's Registration Statement on
Form 8-A dated February 27, 1996).
4(j) --Form of Certificate of Designations (incorporated by reference to Exhibit 4(a) of Registration
Statement No. 33-40967).
4(k) --Form of Deposit Agreement (incorporated by reference to Exhibit 4(b) of Registration Statement No.
33-40967).
4(l) --Form of Warrant Agreement for Warrants attached to Common Stock or Preferred Stock (incorporated by
reference to Exhibit 4(j) of Registration Statement No. 33-55555).
4(m) --Form of Warrant Agreement for Warrants not attached to Common Stock or Preferred Stock (incorporated
by reference to Exhibit 4(k) of Registration Statement No. 33-55555).
4(n) --Rights Agreement dated as of November 21, 1990 between the Registrant and Fleet National Bank, as
amended by a First Amendment thereto dated as of March 28, 1991 and a Second Amendment thereto dated
as of July 12, 1991 and a Third Amendment thereto dated as of February 20, 1995 (incorporated by
reference to Exhibit 1 to the Registrant's Current Report on Form 8-K dated November 21, 1990,
Exhibits 4(a) and 4(b) to the Registrant's Current Report on Form 8-K dated March 28, 1991 and Exhibit
99.3 to the Registrant's Current Report on Form 8-K dated February 20, 1995).
4(o) --Instruments defining the rights of security holders, including indentures (Registrant has no
instruments defining the rights of holders of equity or debt securities where the amount of securities
authorized thereunder exceeds 10% of the total assets of Registrant and its subsidiaries on a
consolidated basis. Registrant hereby agrees to furnish a copy of any such instrument to the
Commission upon request).
4(p) --Form of Rights Certificate for stock purchase rights issued to Whitehall Associates, L.P., and KKR
Partners II, L.P. (incorporated by reference to Exhibit 4(c) of Fleet's Current Report on Form 8-K
dated July 12, 1991).
5 --Opinion of Edwards & Angell as to legality (to be filed by amendment).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS
- ---------
<C> <S>
12(a) --Computation of Ratio of Earnings to Fixed Charges.
12(b) --Computation of Ratio of Earnings to Fixed Charges and Dividends on Preferred Stock.
23(a) --Consent of KPMG Peat Marwick LLP.
23(b) --Consent of Edwards & Angell (included in Exhibit 5).
24 --Power of Attorney of certain officers and directors (included on signature pages).
25 --Form T-1 Statement of Eligibility and Qualification of the Senior Trustee and the Subordinated Trustee
(to be filed by amendment).
</TABLE>
<PAGE>
EXHIBIT 12(A)
FLEET FINANCIAL GROUP, INC.
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
EXCLUDING INTEREST ON DEPOSITS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, -----------------------------------------------------
1997 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Income before income taxes,
extraordinary credit and cumulative
effect of change in method of
accounting............................ $1,074,366 $1,930,598 $1,033,756 $1,379,639 $1,094,456 $ 617,369
Adjustments:
(a) Fixed charges:
(1) Interest on borrowed funds........ 265,530 685,056 1,278,598 990,395 751,754 638,430
(2) 1/3 of Rent....................... 24,544 52,264 49,921 50,597 52,254 49,197
--------- --------- --------- --------- --------- ---------
(b) Adjusted earnings................... $1,364,440 $2,667,918 $2,362,275 $2,420,631 $1,898,464 $1,304,996
--------- --------- --------- --------- --------- ---------
Fixed Charges............................. $ 290,074 $ 737,320 $1,328,519 $1,040,992 $ 804,008 $ 687,627
--------- --------- --------- --------- --------- ---------
Adjusted earnings/fixed charges........... 4.70x 3.62x 1.78x 2.33x 2.36x 1.90x
--------- --------- --------- --------- --------- ---------
</TABLE>
INCLUDING INTEREST ON DEPOSITS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, -----------------------------------------------------
1997 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Income before income taxes,
extraordinary credit and cumulative
effect of change in method of
accounting............................ $1,074,366 $1,930,598 $1,033,756 $1,379,639 $1,094,456 $ 617,369
Adjustments:
(a) Fixed charges:
(1) Interest on borrowed funds........ 265,530 685,056 1,278,598 990,395 751,754 638,430
(2) 1/3 of Rent....................... 24,544 52,264 49,921 50,597 52,254 49,197
(3) Interest on deposits.............. 823,414 1,753,723 1,726,403 1,170,532 1,165,046 1,698,804
--------- --------- --------- --------- --------- ---------
(b) Adjusted earnings................... $2,187,854 $4,421,641 $4,088,678 $3,591,163 $3,063,510 $3,003,800
--------- --------- --------- --------- --------- ---------
Fixed charges............................. $1,113,488 $2,491,043 $3,054,922 $2,211,524 $1,969,054 $2,386,431
--------- --------- --------- --------- --------- ---------
Adjusted earnings/fixed charges........... 1.96x 1.78x 1.34x 1.62x 1.56x 1.26x
--------- --------- --------- --------- --------- ---------
</TABLE>
<PAGE>
EXHIBIT 12(B)
FLEET FINANCIAL GROUP, INC.
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED DIVIDENDS
EXCLUDING INTEREST ON DEPOSITS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
-----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- ---------
Earnings:
Income before income taxes, extra-
ordinary credit and cumulative effect of
change in method of accounting........................... $1,074,366 $1,930,598 $1,033,756 $1,379,639 $1,094,456 $ 617,369
Adjustments:
(a) Fixed charges:
(1) Interest on borrowed funds......................... 265,530 685,056 1,278,598 990,395 751,754 638,430
(2) 1/3 of Rent........................................ 24,544 52,264 49,921 50,597 52,254 49,197
(b) Preferred dividends.................................... 55,788 117,676 62,064 48,859 60,365 65,658
--------- --------- --------- --------- --------- ---------
(c) Adjusted earnings...................................... $1,420,228 $2,785,594 $2,424,339 $2,469,490 $1,958,829 $1,370,654
--------- --------- --------- --------- --------- ---------
Fixed charges and preferred dividends.......................... $ 345,862 $ 854,996 $1,390,583 $1,089,851 $ 864,373 $ 753,285
--------- --------- --------- --------- --------- ---------
Adjusted earnings/fixed charges................................ 4.11x 3.26x 1.74x 2.27x 2.27x 1.82x
--------- --------- --------- --------- --------- ---------
</TABLE>
INCLUDING INTEREST ON DEPOSITS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
-----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993 1992
----------- --------- --------- --------- --------- ---------
Earnings:
Income before income taxes, extra-
ordinary credit and cumulative effect of
change in method of accounting........................... $1,074,366 $1,930,598 $1,033,756 $1,379,639 $1,094,456 $ 617,369
Adjustments:
(a) Fixed charges:
(1) Interest on borrowed funds......................... 265,530 685,056 1,278,598 990,395 751,754 638,430
(2) 1/3 of Rent........................................ 24,544 52,264 49,921 50,597 52,254 49,197
(3) Interest on deposits............................... 823,414 1,753,723 1,726,403 1,170,532 1,165,046 1,698,804
(b) Preferred dividends.................................... 55,788 117,676 62,064 48,859 60,365 65,658
----------- --------- --------- --------- --------- ---------
(c) Adjusted earnings...................................... $2,243,642 $4,539,317 $4,150,742 $3,640,022 $3,123,875 $3,069,458
----------- --------- --------- --------- --------- ---------
Fixed charges and preferred dividends.......................... $1,169,276 $2,608,719 $3,116,986 $2,260,383 $2,029,419 $2,452,089
----------- --------- --------- --------- --------- ---------
Adjusted earnings/fixed charges................................ 1.92x 1.74x 1.33x 1.61x 1.54x 1.25x
----------- --------- --------- --------- --------- ---------
</TABLE>
<PAGE>
EXHIBIT 23(A)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Fleet Financial Group, Inc.:
We consent to the use of our report incorporated by reference in the Annual
Report on Form 10-K of Fleet Financial Group, Inc. for the year ended December
31, 1996, which is incorporated herein by reference, and to the reference to our
firm under the heading "Experts".
/s/ KPMG PEAT MARWICK LLP
Boston, Massachusetts
October 3, 1997
