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MINUTES OF SPECIAL MEETfNG
OF
BoARD
OF
Of
RECTORS
OF
BANK OF AMERICA CORPORATION
December 30. 2008
Pursuant to due notice, a special
m ~ ~ t i n g o f t h e
Bqard
of
Directors
of
Bank
elf
America Corporation was held al4:OQp,m.
em
T u e s d ~ Y i
O e c ~ i i l b e t
39,
2 0 0 8 ~
The following
Direct()JS
were
present
c o n s ~ i t u t i n 9 .
a quorum:. Messrs.
WiI1iam
Barnet;
llli
FrankP.Bramble,
St.,
Jotm,T.
Collin$,
G ~ ~
LCQUntrymarl.
Tommy
R.
Franks,
CharlesK.
Gifford, Kenneth
D.
LeWiS,
WalterE
M"!5Sey.
T h o m ~ $ J . M a y .
O.
Temple
Sloan,
Jr.,
RobertL. Tillman,
and
Mmes.
MonicaC
..
Lozano, P!illricia E.Mitchell,
Meredlth
R.
Spangler and
J a c k l e ~ M . , W a r c t
Also l'r-esent were: Messrs. Brian
To
M O Y J l i h a n ~
~ t 1 < i
JOe
l
..
Price.
and Mmes.
Amy
Woods
Brin1dey.
and
Alice
A
Herald,officersof
tl'le,CorporatiQri.
Mr.·
Lewis called and chaired
t h e s p e c i ~ ! : r n ~ ~ i n g ~ M s . l - l e r a J d
kept
the
minutes.
Mr.
Lewis
advisedthe
Board that
he
wished to fully inform
the
Board
regardingdiscussions between management
of
the Corporation and federal regulators
which
had
oc:GUITedsincethe Board meeting
of
December
22,2008,
including
the
Jederaf
regulators'dlm
viE!W
()fthe
economy
•.
Mr. Lewis (eported
thatJhe
Board.had requested.
thatmanagementobtair
g r ~ a t e r
~ 1 ~ J . : i t y
regarding
the
assurances provided'to,himb¥ Mr. Ber:nanke
..
C h a i r m ~ n
cBhe
E3pardof GpvernOf$
ofthe
Federal
R e s ~ e ( " F e d j a n d · M r .
Paulson.
Secretary
o f 1 h e T f ~ a s u r y
("Tre!3suryit) and to
a d v a n ~
the
completion
of
the
,commitment
to
the Corporation
frOI1l
thEt
federal reguJators
","which
the
Board
and
m a n ~ e m e n t w o u l d
retyto consummate
the
s c t l E ~ d u l e d
acquisition
of
Merrill
lynch
~ C o .
("MerriU
l ~ J l ( : f n .
He reported
that
ll1anagement
had
requested that
the
Treasury aodtheFed.confirrn.tl1e terms
andcondttjons
ot'theitcommitment before the closing
date
of
the
acquisition
of
Merrill L)'nchoJ'l January
1,2009. He
FOIL
Confidential Treatment Requested
By
Bank
Of
BAC-ML-NYAGOOO03877America Corporation
further
reported
that
managementhad
engaged
in
a series
of
telephone calls
and
communications
with
the
federal regulators
to
obtain
greater
certainty
with
reg;;Jrdto the
terms
and
conditions
01
the federal regulators' commitment.
Mr.
lewis
reported
thatinhis.conversatjol'ls with
the federal regulators
regarding
'the
Corporation's pendingacquisitiori of MertillLynch. he
had stated
that,wereit
not
for
the
..
serious
concerns
regarding
the
status··oflhe United States financial
servicessystem
andtbe
adverse
consequences
oHhat
situation
tathe
Corporation
articulated
by
the
fed,era'.regulators(the
-adverse
situatioo">'
the
Corporationwould,lnlight ofthedeterioration
oftheoperating
results and
capital
po!?itibn
of
Merrill
Lynch.assert·thematerial
adverse.change clause
in
its
merger
agreementwith
Merlill
Lynch
ancl
would
seek
to
renegotiate
the
transaction;
Further;
ML
Lewis reported
that
it
'was
also.
made
clear
talbe
federal regulatorsthat,
because
of
the
federal
r ~ u l a t o r s ' e x p r e s s
concerns regarding:fhe
adyerse
situation
that
\N(juld
ocCur
if
theC(l[poration
fSlted to
acquire
Mertil1
Lynch.
i f i s ~ p p r o p r i a t e
tha,
t,tle
federal
,government
make
the
Corporation
whole
forthe,d¢t,erioratkm
in
MerOll
Lyncn's
OPfarating
results
and
financial-condition.
Mr.
L e w l s d e s c ; r l b e r ; j t h e _ c o r w e r s a t i ~
t h ~ f h a d
o ~ w r e d
p r e d o m i n a ~ 1 y
wtthMr.
Warsh.
with
whom
Mr.
Bernanke
had-direCted
management
tOCORJmurUCCite,
HeJeporte.d",e
purpose
of
such
conv.ersations
wasta
s u l f i c i e m l y - d ~ t c l i l - t h e n e e d s
. a n c l e x p ~ c t a t l o n s
dtNil.
Corporation
to
the
1ederal regulators before the effective
date of
the
acquisition
of
Merrin
Lynch.
REDACTED
Mr.
l e w l s s t s t e d t h a t t h e - c o r p o r a t i o n ~ d i d n q t
have
a
w r i t t e n a g r ~ ~ n t
W i ! h . t p ~ :
federal
regulators
and
thaHhe
Corpgrapon
couldonlyretyQA the
orcal<:ommitments:ofMt!!$srs.
......
Bemanke
and
Paulson
and
their
s ~ n i 9 f T e p r e s e n t a t i v e s
catthe
Treasl.lf)i
and
Fed,
i n c l u d i ~
¥r,
Warsh. Mr. Lewis explained
t ~ I ~ I i t t e ~ a ? s u f a n c e s ~ o u l d
not
b ~
received
before
Janua!y
t.
2009:
because any
written assurangeswould
require
formalacljon
by
the
Fed anq
T r e ~ ~ ;
whiCh
format action·wOUld
require,pul;)lic
..
cHsclosure.
Mr:.
Lewjsal$o
reported
thata.ce0rdjngtfS,theJederal regulators
any
written
C ! s s u r ~ n c e s
deliY-erect
prior
to
Januafy
1.
2009,WOUld
nc:>t.
in
any
event.
providesufficient
detail
topfPvidecomfortlo.the
Board
and
management
of
the
commitment
by
t h e f e d e r ~ l
r ~ 9 u 1 ~ t Q r . s ,
FOIL
Confidential
Treatment Requested
By
Bank
Of
BAC-ML-NY
AGOOOO3878
A
ml'!rir.;::l
C:ornoration
I
n
accordance with the
r e c o m m e n d ~ t i o n
Of
the
Boar:d
at the preceding meeting.
ML
Lewis reported that management has obtained detaited oral assurances from the federalregulators with regard to their commitment and has documented those assurances with e-mailsand
detailed notes
of
management'sconversationswith
t h e f e d e r ~ r e g u l a t o ~ .
Mr,
Lewis
..
r e p o r t e ~ ·
tt)e
dates
and times
of
certain of
the
communications an(j the
significant
extent-of
m a n a g e ~ n t ' s
e f f ( ) r t s ~
Mr.
lewis
then discussed
in
delailseven:lloftheconversationsbetween
Mr.
Pnceand
Mr.
Warshestablishingessent4al
elementsofthe
cQmmifmentofthe
fecjeral
...
. . .
...
....
regulCitors, i
I1
cludinQ:
(i)
an
agreementfrom thefederal tegu{atorsthat
lhek
commitment
be·fully docuTTientedonQr Pefore January2<l,.·
2009;.
O ~ ' a
confirmation
of
the
continuing·.and strongadmonition
of
the
f e d e r a l r ~ g u l a t o r s
thaHaiture
afthe
Corporationte
consummate
theacquisition
of
MerrilLLYl1chwould
c a u s e s j ~ n i f i c a n t
systemic
riskJothennanciat
system and
tfle
economY·
of
the
U n i t ~
S ~ a t ~ s
and would
be
specifically
a d v e r $ e t c t t h e C o r ~ o r a t i o n ;
and
(Iii)
the
commJtment
of
the.
feqerClI
regufators to deliver assistance
'ihthe
form
of
<:apitiit.and assetprotection
to
the
COrPOration.
~ . .
..
'
.....
-
. ..
Mr, Lewis
noted
thatMr.pnce
has,shared
wilhtne
g o v e r n m ~ n t
management'sexpecta,tiO!"s
as
to
the amount
ofcapifal
expected
to
.
beprovideq'lothe,Corporation
and
the
geJ)erafconstrLtcrofany
e90itypositiorrtobe
received
by
the federal regulators, as well
asthe
,Corporation's efforts Wfthcounsel and
l h e C o r f . > O ! ' a t i o n · S c ~ u n t a n t : S .
with
.
r ~ C i ! d .
'thereto. Mr.
Lewis
also
.
noted
thatMr;'Pricehad
,been
:clear
in.
h i ~
d i s P u $ S K l n S ( e g a f ( : : f j n ~ , t l l e
Corpo(atiOI1'sl;0Dc;erns
about
pteventinQ dJiulionQflhe,intere5ts
of
the
e ) ( i s t i n g ~ h a r : e h < > l d . , e ~
of
the
Corporation.
Mr.
Lewis shared
l h ~
C o r p o r a t l o n ' s e ~ p e c t a t i ( ) n s
presentec(
t().
t!1e
teperalregulatorsregard1Ag1he,a
mo
unt ofpJQPosed
pr1Jtection
1rom
t h ~
f ~ : d e t i : d
r-e94
1
a'ti::irs
against
the
.
_.
-
. .. ..
-
.
.'
.....
~ .
impact
of
the.
on:and ·offbalance
s h e e t . a s ~ e t s
QfMerrillLynch.ttte:spe9ific
: a s s e t $ f d e ( i t ~ a e d ~
•.
current carrying vatues and
r e l a t ~ i t e m s . i n c l u d t n g t h e g ( ) \ l e r n r n e l i t · s , ! ~ t e , ~ n d
o . r d e r ) ~ f
-
absorption oflosses·uponreductiQA9f market values and
s l J b s t a n t i a r d f s ~ o u n l s : t Q O r i 9 ~ f .
•
•
•••
__
M _
••••
market values.
He
reported thalmaf1agement
h a ~ a f s o a s s e r t e d
c ~ r l y i l 1 d i S ¢ ~ s s j Q t l s
Withthe.federal regulatofS-thal
any
·premium-
~ h a r g e d
byUle
governmel1tJor $uchinsur.clrtee snO!Jld
be·
modest.
He
also'slated'the Corporation's proposal insulates the
l 1 ) o S t : t r o U b l i n 9 ~ r j : i t l
Lynch
assets,
and
retainsupside,potentlalforthe Corporation.
Mr.
Lewis
sta1edthat management has been
i n s i s ~ [ l t w i l h .
the federal regulators·thalc1arity
e x ~ s t
wilh regard
to
their
commitment He
reported.
t h a t m a n ~ g e m e r i t i ~
confident
3
FOIL Confidential Treatment Requested
By
Bank
Of
BAC-ML-NYAGOOO03879America Corporation
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