bank of america-merrill lynch merger investigation - exhibit c

8/14/2019 Bank of America-Merrill Lynch Merger Investigation - Exhibit C

1/6

MINUTES OF SPECIAL MEETfNG OF BoARD OF OfRECTORSOF

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 elfAmerica 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. WiI1iamBarnet; 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 andJ 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 theminutes.

Mr. Lewis advisedthe Board that he wished to fully inform the Board regardingdiscussions between management of the Corporation and federal regulators which hadoc:GUITedsincethe Board meeting of December 22,2008, including the Jederaf regulators'dlmviE!W ()fthe economy.

Mr. Lewis (eported thatJhe Board.had requested. thatmanagementobtairg 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 cBheE3pardof 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 thEtfederal reguJators ","which the Board and m a n ~ e m e n t w o u l d retyto consummate thes c t l E ~ d u l e d acquisition ofMerrill lynch ~ C o . ("MerriU l ~ J l ( : f n . He reported that ll1anagementhad requested that the Treasury aodtheFed.confirrn.tl1e terms andcondttjons ot'theitcommitment before the closing date ofthe acquisition ofMerrill L)'nchoJ'l January 1,2009. He

FOIL Confidential Treatment Requested By Bank Of BAC-ML-NYAGOOOAmerica Corporation


2/6

further reported that management had engaged in a series of telephone calls andcommunications with the federal regulators to obtain greater certainty with reg;;Jrdto the termsand 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 statusoflhe United States financial services system andtbeadverse consequences oHhat situation tathe Corporation articulated by the fed,era'.regulators(the -adverse s ituatioo">' the Corporationwould,lnlight ofthedeterioration oftheoperatingresults and capital po!?itibn of Merrill Lynch.assertthematerial adverse.change clause in it smerger 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 Corporationwhole forthe,dt,erioratkm in MerOll Lyncn's OPfaratingresults 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-direCtedmanagement tOCORJmurUCCite, HeJeporte.d",epurpose 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.

REDACTEDMr. 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 orcalt. inany event. provide sufficient detail topfPvidecomfortlo.the Board and management of thecommitment by t h e f e d e r ~ l r ~ 9 u 1 ~ t Q r . s ,

Confidential Treatment Requested By Bank Of BAC-ML-NYAGOOOO3ml'!rir.;::l C:ornoration


3/6

In 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 ofcertain of the communications an(j the significantextent-ofm a n a g e ~ n t ' s e f f ( ) r t s ~ Mr. lewis then discussed in delailseven:lloftheconversationsbetweenMr. Pnceand Mr. Warshestablishingessent4al elementsofthe cQmmifmentofthe fecjeral... . . . . . . . . . . regulCitors, iI1cludinQ: (i) an agreementfrom the federal tegu{atorsthat lhek commitmentbefully docuTTientedonQr Pefore January2


4/6

that Mr. Warsh understands the Corporation's position clearly .. He further confirmed that Mr.Bernanke had assured him the Corporation would not be penalized by accept ing thecommitment .qfthefederal regulators and that acceptance of the commitment would bebeneficiaJ1Dc the Corporatipn and its shareholders, Mr. Lewis also noted. hoWever, that the .details 9fthe commitment were not finalized.

Mr. Lewis explained.that recent discussions had begun to address concerns.raised py -the supervisory regu(atof$of the Fed. These r e g u l a t o f s h a d ~ e x p r e s s e d c o n c e m regarciing'tt}e Corporation's ability to remain stabte in l ight of their ovmviewofthe economy, theCorporatH>n's earnings prospeds and Ihestability of the banking industry. Mr. Lewis reportedthe,Fe9'stJbjectivelsthat the Corpori;ltlon remain above reproach as astabJe member ofthefinanciatsstem a s t h ~ recession continues,

Me Le\Olis described the federal regulators 'djm view of the near term economyandthejr w o j e d i 9 n s o f t ~ econorny'simpact on t h ~ C Q r p Q r a t i o J " i ' s e a r n j n g p r o s p e c t s f o r 2009.H e r e p ( ) r t ~ c l the reglJlators COncern thatweakened earnings anddlvldend payments couldccitise,c(ipital i s s ~ e s fo r the CorpofCitionby early in the secqndquaT1er in view of the lowt a n g j b J ~ c ~ 1 T l m o n ~ u l t y ratio.

Mr. LeVt'ls shared his ang Mr. P r i c e ! S c o n v e f s a t i o n $ : w i t h t h e f e d e r a J f e g l J l a t o r s ~ particularly-Mr. Warsh, who articulated thegovemment's d e s i r e ' o r a n l r i j ~ t i o n of newprivate'capita! into the industry and future offerings of common stoc.k by the Corporation in which thegovernment would participate. He described discussions with the regulators regardingp r o j ~ c t ~ d . t l ; i r g e l c{)mmOn equityratlos! dividends, ring-feOingdf c e r t a j n ~ s s e t s . of1he.c o r . p o r 3 ~ i t ? I J , Ciileita1 cushions fortheCQ(poration and the g o v e r n - m ~ ' $ ~ ( j n 9 t e r m a n ~ t s h o f ' t t ~ r r f \ v i ~ W S J e g a r d i n 9 tne ptovision ~ o r a d c f i t i o n eqUity> Me LeYfis e x p J ~ i n e d t h e g o v ~ m m e n t ! ! i d e ~ r e t 9 $ e e Q f a red.uction o f t " ! ~ G0r-POTation'S d i v i d e n d ~ Q a n o m i l ' l E ! t a m o u n t . perhaps ~ , c e n t s . pet s b ~ r e : p e r q\J3rter lqprotect t C()rpotation's capital.

Mt LeWisstatedthefederal regulators'clearposiJiofj tl1atifthe Corporati


5/6

- - -

Me LeWis discussed the implications of government ownership ofa portion of theCorporation and two potential transactions with the government a capital injection including awrap of certain assets anda capital offering inc1uding ring-fencing of certain aS$ets of theCorporation. He noted that-both potentialtransacdons remain under discussion with theJederaLr ~ L i l a l D r s ;

ML Lewis stated tl1at no definitive agreement has been reached with the federal_r e g u r ~ t Q r s , put that m a n a ~ e m e n t . o t t h e C o r p o r a t i o r : i h a dctearly-explainedto the federal -regulatO(!:;lhe ter.m$l:lncl Cohditionsrequired by the Coiporation to consummatetheacquisftionOft\1letrillLynch on Janyary 1, 2 0 0 9 ~ lnreturn;he,reportedj management has received stronga$suran s ~ s s e t .base..

Mr. Lewis concluded hisremarks b y , s t a t i O ~ t h a t m a n a g e m e n t w i l l continuetowork with the fecieraf regulators toctransform lhe,pnnclplestltat have been discus$edlnto anappropriately documented commitment tobecodifiecl and.impleroentedth conjunction with theCorporation's earning release on January 20, 2 0 0 ~ t

Robust discussion ensued,-includingthe Corporation's recourse should th e f e d e r a l r e ~ u l a t o r s faU to -comply_with.theirassurcaocesQn_which the Boar


6/6

Further discussion ensued including backstops available to the Corporation.capital ratios and dividends.

After summary remarKS by Mr. Lewis, there being no further business to comebefore the Board, the meeting was adjourned.

Kenneth O. LeYJjsChairman of the BParO

AliceA A . e r ~ d Secrelan'

6Bank Of BAC-ML-NYAG00003

bank of america-merrill lynch merger investigation - exhibit c

Documents