Summary of Objectives

We have instituted this Exempt Solicitation campaign with the following objectives:

  1. Highlight the recent governance failures of the management and board of the Company;
  2. Bring attention to what we believe are securities law violations committed by the management and board of directors under Section 14 (a) of the Exchange Act of 1934 and Rule 14a-9(a) promulgated thereunder;
  3. Mobilize the shareholder base of Bank of America to examine the Company’s situation carefully and critically;
  4. Focus the management and board of directors of the Company on their duty to protect and build shareholder value; and
  5. Be an agent of change with respect to the corporate governance of Bank of America.

Industry Evaluation Criteria for Shareholder Vote

We understand that institutional investors, pension funds, index funds and other constituents have various metrics that they utilize when evaluating the governance of a corporation. Many of these criteria include:

  1. Independence of Directors
  2. Majority Voting
  3. Annual Election of Directors
  4. Separation of Chairman and Chief Executive Positions
  5. Proper Compensation Criteria and Practices
  6. Board Attendance Policies
  7. Multiple or Overlapping Board of Directors positions
  8. Proper Committee Structure and Governance

Our Evaluation Criteria for Shareholder Vote

We believe all of the above criteria are important. But those criteria are just a starting point, and they do not measure whether a management and board are fulfilling their primary duty to shareholders. They simply measure whether some basic governance structures are in place that might prevent management or board misconduct. Those criteria do not measure where the loyalties of management and the board lie.

We believe those who hold the power to vote shares should look beyond simple criteria and look at how a management team and board of directors function with respect to their most important duty – their duty to shareholders. Their duty is to first protect the shareholders through:

  1. Proper allocation of capital through dividend policy, share repurchase policies, strategic investments of capital and acquisitions. Has management and the board been good stewards of shareholder’s capital?
  2. Proper disclosure of material information to shareholders. Has management and board been honest and straightforward with shareholders? Have they disclosed information that could be material with respect to the investment decisions of shareholders? Have they treated shareholders with respect and as the owners of the Company?
  3. Holding Management Accountable for their decisions. While Delaware law will protect management teams and the directors from making bad capital allocation decisions, that does not mean people should not be held accountable. Has the board of directors held its management team accountable for their performance – with respect to capital allocation decisions, with respect to taking undue business risk and exposing the company and its shareholders to significant risk of loss?

We would strongly argue that the Management and the Board of Directors of Bank of America has failed with respect to the three questions set forth above, and that the answer to each is NO.

Therefore, we would humbly ask that management and the board certainly be graded based on the corporate governance structures that they have implemented to ostensibly protect the shareholders, but we also ask to be graded upon whether those measures alone were effective in this case in protecting the interests of shareholders??

Evaluation Materials

Set forth below are links to (i) our Open Letter to Shareholders, and (ii) a Powerpoint Presentation which attempts to summarize our position with respect to the performance of this management team and the board of directors, which has overseen and approved the actions of this management team.

If you do not have time to review the materials, we will summarize our opinion here:

We believe this management team, with the apparent support and consent of the board of directors has pursued a strategy of overpriced and poorly structured acquisitions that have resulted in the permanent destruction of shareholder value.

We know that management and the board of directors will defend the strategic value of the acquisitions they have pursued, and they may be correct from a strategic standpoint, but from a return on equity standpoint and a return to shareholder standpoint, they have failed miserably.