Excerpt From Questioning Of John A. Thain

021909JT.txt THE WITNESS:

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o

Certain individual numbers get

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approved at a final Comp Committee meeting, which

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was sometime in December.

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Q.

Did Andrea smith ever sit down with you

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before the end of 2008 and indicate to you what certain

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types of employees make at Bank of America in certain

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types of positions?

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A.

Yes.

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Q.

For example, a Bank of America equity analyst 109

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would make about this kind of money -- that type of a

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thing.

3 4

A.

Yes.

It wasn't equity analyst -- but Bank of

America HR person, Bank of America Risk person.

Yes.

5

Q.

which categories did she go through with you?

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A.

I don't recall specifically, but it was

7 8

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things like HR, Risk, Legal. Q.

mind with what -- strike that. Did you share with Andrea Smith what the

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And did you then compare that in your own

comparable people at Merrill

made in those positions?

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A.

Yes.

13

Q.

And how did it shake out?

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A.

This discussion is what led to certain

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changes in the comp numbers where we typically brought

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the Merrill number down to be more in line with the Bank

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of America number -- I'm sorry, one other area which I

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just remembered is the communications and PR area.

19 20

Q.

But in each of the areas, as a general

matter, the Merrill employees in the same positions were page 95

021909JT.txt 21

earning more than the Bank of America people in the same

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positions?

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o

A.

You can't make that blanket statement, but in

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the infrastructure parts of the business that was

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generally true. 110 MR. LAWSKY:

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Did Andrea Smith focus in on any

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particular people, do you recall, whose numbers she

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thought were too big?

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THE WITNESS:

She did -­

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MR. LAWSKY:

Or too small?

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THE WITNESS:

I don't recall any of them

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being too small.

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individuals who she thought were high, who we

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changed and brought down. MR. LAWSKY:

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Yes.

she did have some

who do you remember of those

people? MR.

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LEVANDER:

I've been directed not to

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disclose by the company individual names other than

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the names of the top people who are under Section

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16.

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If you want to get on the phone with Mr. Liman -­

we were directed by Bank of America counsel. MR.

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LAWSKY:

If you don't want to tell us

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the names, you can just say "I don't want to tell

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you the names."

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MR. LEVANDER:

He has no problem telling the

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names.

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America, and I'm following that direction.

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We were directed by counsel for Bank of MR. LAWSKY:

us the names?

I'm asking, DO you want to give

page 96

021909JT.txt MR. LEVANDER:

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He's given you the category -­

IJ

111 MR. LAWSKY:

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I'm not asking you for the

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numbers that

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Smith asked numbers to come down for.

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telling me Bank of America doesn't want you to

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disclose that?

people got.

I'm asking who Andrea Are you

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MR. LEVANDER:

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I'll tell you what.

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find out if that's what the direction was. MR. LAWSKY:

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That's my understanding, but At the next break I'll try to Let the record reflect the

witness is refusing to answer.

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MR. LEVANDER:

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At direction of counsel -­ at

the direction of Bank of America's counsel. MR. LAWSKY:

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I'm not calling Mr. Liman

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because it's your deal with him, but if you can

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work that out it would be great. (Exhibit 4 was marked for identification.)

16 17 18 19

Q.

I'm handing you what's been marked as Exhibit

4 -­

MR. LAWSKY:

Let me follow up with one thing:

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was it your understanding that Miss smith was

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speaking with, if you know, with Mr. Alfin

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regularly based on your conversations with her?

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THE WITNESS:

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MR. LAWSKY:

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THE WITNESS:

It was was my understanding. How about Mr. Lewis? I don't know.

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112 page 97

021909JT.txt 18

DO you know anyone who had the title

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Executive vice president regardless of whether it fits

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into the definition of whatever is being talked about in

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Exhibit 5?

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that had the title at Merrill Lynch, Executive vice

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president?

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o

Q.

A.

Anyone you worked with until December 2008

I believe that MR. LEVANDER:

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Don't guess, only what you 125

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know

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A.

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well, I don't recall who has that title. MR. LAWSKY:

Can we go back to my Andrea

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smith question now?

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MR. LEVANDER:

Yes.

I've been told that

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counsel for the company has taken your request

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under advisement and is consulting with his client.

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At the moment, I'm directed to not read

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individuals' names into the

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MR. LAWSKY:

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asserting a privilege?

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Bank of America?

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under what grounds?

Are you

Does Mr. Thain work for

I don't think he does.

MR. LEVANDER:

That's correct.

But there are

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confidentiality obligations.

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a position of getting shot at.

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Liman can get it worked out, I sure will be happy

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to give you the information.

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MR. LAWSKY:

I don't want to be in If you and Mr.

I have nothing to work out with

Mr. Liman. I feel bad for you because you're getting caught in between this. page 109

I just -- we're going to

021909JT.txt 22 23 24

o

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end up back here doing this all over again. MR. LEVANDER:

Maybe yes, maybe no.

Maybe

I'll tell you, The three names are x. MR. LAWSKY:

All I can say to you is that 126

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this is a relevant question for an ongoing

2

investigation that we need an answer to.

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need an answer over the phone; we need an answer on

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the record.

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compel and contempt of -- I don't even know what we

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would do.

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refusing to answer because an employer who fired

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him is directing him not to answer for

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non-privileged reasons.

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We don't

I don't want to get into motions to But I've never heard of a witness

MR. LEVANDER:

If you want to have a

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discussion on the record, we can have the

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discussion on the record.

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answer questions.

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and so I suggest we go on.

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have him sued by the company for their saying that

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he's violating someone's privacy -- I don't knpw

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what Mr. Liman's objections are.

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he's given me a direction.

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confidentiality obligations even though he's an

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ex-employee.

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AS you said, it's not his fault,

Those exist.

MR. LAWSKY:

The witness is here to But I don't want to

All I know is,

Mr. Thain has Therefore, let's go on.

Let me try to understand a few

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things.

Have you entered into any type of

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severance agreement with Bank of America.

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THE WITNESS: I have not.

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MR. LAWSKY: So with respect to -- and page 110

021909JT.txt

o

127 1

earlier, were you, in fact, asked to leave?

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that the correct characterization?

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THE WITNESS:

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MR. LAWSKY:

Yes. Post departure, has there been

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any -- even if not in writing -- any sort of

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agreements or joint agreements or any kind of

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cooperation agreement with Bank of America? THE WITNESS:

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Q.

IS

Not with me.

I want to switch gears a little bit and go

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back to the fourth quarter losses.

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whether Merrill Lynch should disclose its losses to its

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investors?

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MR. LEVANDER:

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MR. MARKOWITZ:

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A.

Did you ever consider

In what period of time?

The fourth quarter of 2008.

Merrill Lynch, as a policy, doesn't make

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projections; doesn't give guidance and doesn't disclose

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interim results.

18

Q.

And a lot of firms have that and depart from

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that policy in times when there's a serious deviation,

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and given the deviation that was occurring in the fourth

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quarter of 2008, did you consider whether or not it was

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appropriate to make a disclosure?

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A.

The market conditions were generally known,

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and we would not have disclosed interim results in that

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fourth quarter.

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128 1

Q.

So you did not consider doing that? page 111

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021909JT.txt in this time period in December -- as all of wall

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Street was virtually.

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are headed in a downward direction in general at

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Merrill, do you think an investor would want to

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know that you were going to make bonus decisions

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before the end of the month when it looked like

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things were going to be worse?

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o

THE WITNESS:

The question is:

If things

I don't think it's necessarily

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the case that we can predict what was going to

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happen between December 8 and December 31.

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I'm going to repeat what I said, that bonuses were

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determined based upon the performance and the

Again,

132

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retention of the people, and there is nothing that

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happened in the world or the economy that would

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make you say that those were not the right thing to

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do for the retention and the reward of the people

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who were performing.

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MR. LAWSKY:

That goes back to the earlier

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question where you could not answer whether you

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would have done anything differently had you done

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the bonuses in early January versus early December.

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THE WITNESS:

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MR. LAWSKY:

Correct. I was going to ask questions

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about particular bonus numbers that particular

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people got.

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objections and ongoing arguments that put you in

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the middle of lawyers, is it safe to assume that

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under direction of Bank of America you are not

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going to answer questions about individual bonuses

Rather than do that and have

page 115

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021909JT.txt that particular individuals at Merrill Lynch

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received? MR. LEVANDER:

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And the answer is yes, except

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to the extent that they are the top five publicly

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disclosed people, he'll answer those questions.

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He'll answer any questions about his own bonus or

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lack thereof.

25

Q.

who are the top five people that we're 133

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talking -- who are the people that you're saying we can

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address?

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A.

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Berkery and Bob McCann. (Recess was taken.)

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It's me; Greg Flemming; Nelson chai; Rosemary

Q.

Prior to December 31, 2008, did you have

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discussions with Bank of America staff regarding

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reductions as a result of the merger?

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MR. LEVANDER:

Reductions of?

10

Q.

staff layoffs as a result of redundancies?

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A.

Yes.

12

Q.

Did you start to identify where those

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reductionss would take place?

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A.

when?

15

Q.

Before the end of the year.

was a plan

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formulated on who is going to get laid off as a result of

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the merger?

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A.

There was and is an integration process that

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Bank of America goes through, and that integration

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process had begun before December 31.

21

Q.

Were bonuses paid to any of the individuals page 116