INDEX OF DEFINED TERMS - Banca di Legnano

Level: 2 – From: 2 – Wednesday, July 21, 2010 – 13:20 – eprint6 – 4247 Section 10
General Information
On January 12, 2010, the SEC filed a second complaint against the Issuer, entitled SEC v. Bank of
America Corp., in the U.S. District Court for the Southern District of New York alleging that the Issuer
violated the federal proxy rules for failing to disclose information concerning ML&Co.’s known and
estimated losses prior to the shareholder vote on December 5, 2008, to approve the Acquisition. The SEC
alleges that the Issuer was required to describe in its proxy and registration statement any material changes
in ML&Co.’s affairs that were not already reflected in ML&Co.’s quarterly reports or certain other public
filings, and to update shareholders on any “fundamental change” arising after the effective date of the
registration statement. The SEC alleges that the Issuer’s failure to provide such an update violated Section
14(a) of the Exchange Act and Rule 14a-9 thereunder. The SEC is seeking an injunction against the Issuer
to prohibit any future violations of Section 14(a) and Rule 14a-9, as well as an unspecified civil monetary
penalty.
On February 1, 2010, the Issuer entered into a proposed settlement with the SEC to resolve all cases
filed by the SEC relating to the Acquisition. Also, on February 4, 2010, the Issuer entered into an
agreement with the Office of the Attorney General for the State of North Carolina (“NC AG”) to resolve
all matters that are the subject of an investigation by that Office relating to the Acquisition. Under the
terms of the proposed settlements, the Issuer agreed, without admitting or denying any wrongdoing, to pay
US$150 million as a civil penalty to be distributed to former Bank of America shareholders as part of the
SEC’s Fair Fund program and a payment of US$1 million to be made to the NC AG for its consumer
protection purposes. The payment to the NC AG is not a penalty or a fine. As part of the settlements, the
Issuer also agreed to implement a number of additional undertakings for a period of three years, including:
engaging an independent auditor to perform an assessment and provide an attestation report on the
effectiveness of the Issuer’s disclosure controls and procedures; furnishing management certifications
signed by the CEO and CFO with respect to proxy statements; retaining disclosure counsel to the Audit
Committee of the Issuer’s Board; adopting independence requirements beyond those already applicable for
all members of the Compensation and Benefits Committee of the Board; continuing to retain an
independent compensation consultant to the Compensation and Benefits Committee; implementing and
disclosing written incentive compensation principles on the Issuer’s website and providing the Issuer’s
shareholders with an advisory vote concerning any proposed changes to such principles; and providing the
Issuer’s shareholders with an annual “say on pay” advisory vote regarding the compensation of senior
executives. These proposed undertakings may be amended or modified in light of any new regulation or
requirement that comes into effect during the three-year period and is applicable to the Issuer with respect
to the same subject matter. On February 22, 2010, the District Court approved the settlement subject to the
Issuer and the SEC making certain modifications to the settlement to require agreement between the SEC
and the Issuer on the selection of the independent auditor and disclosure counsel and to clarify certain
issues regarding the distribution of the civil penalty. The parties made the modifications and on February
24, 2010, the District Court entered the Consent Judgment encompassing the settlement terms.
On February 4, 2010, the Office of the New York State Attorney General (“NY AG”) filed a civil
complaint in the Supreme Court of New York State, entitled People of the State of New York v. Bank of
America, et al. The complaint names as defendants the Issuer and the Issuer’s former chief executive and
chief financial officers, Kenneth D. Lewis, and Joseph L. Price, and alleges violations of Sections 352,
352-c(1)(a), 352-c(1)(c), and 353 of the New York General Business Law, commonly known as the Martin
Act, and Section 63(12) of the New York Executive Law. The complaint is based on, among other things,
alleged false statements and omissions and fraudulent practices related to: (i) the disclosure of ML&Co.’s
financial condition and its interim and projected losses during the fourth quarter of 2008; (ii) the Issuer’s
contacts with federal government officials regarding the Issuer’s consideration of invoking the material
adverse effect clause in the merger agreement and the possibility of obtaining additional government
assistance; (iii) the disclosure of the payment and timing of year-end incentive compensation to ML&Co.
employees; and (iv) public statements regarding the due diligence conducted in connection with the
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