Bank One Corporation - Page 12

                                        -101-                                         
          issuances, letters of credit, loans, financial derivative                   
          transactions).                                                              
                    5.  Credit Officers                                               
               An FNBC credit officer was assigned to each swap                       
          counterparty.  Before a swap could be entered into with that                
          counterparty, the credit officer had to approve the                         
          counterparty’s credit and give the counterparty a credit exposure           
          limit (credit line).  Credit officers did not work in the swap              
          department and were not part of the group that included swap                
          traders and marketers.  Nor was the credit approval process a               
          function of the swap traders and marketers.                                 
               The credit line for financial derivative products was known            
          as the variable exposure product (VEP) limit (VEPL).  If a VEPL             
          had already been established for a counterparty, and a new swap             
          was within that limit, then no additional credit approval was               
          needed.  If the credit exposure of a swap exceeded the available            
          VEPL, or if no VEPL had been approved, then the trader had to               
          obtain credit approval from the credit officer.                             
               D.  Weak Credit Rating                                                 
               FNBC was a major participant in the swaps market during the            
          relevant years but was considered in that market to have weak               
          credit.  FNBC’s credit rating was downgraded to A- in or about              
          the fall of 1990.  This downgrade was generally viewed poorly               
          among persons or entities dealing with or considering dealing               






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Last modified: May 25, 2011