Bank One Corporation - Page 214

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          users.25  The meaning of this term is similar to, but is not                
          necessarily the same as that of, the term “fair market value”.              
          “Fair value” is broader than and may include “fair market value”.           
          The objectives of each of these two concepts also are distinct.             
               B.  Mark-to-Market Accounting                                          
               Swaps dealers generally attempted during the relevant years            
          to mark their swap positions to market daily.  The concept of               
          mark-to-market accounting requires that the market value of an              
          asset such as a swap be recorded on the balance sheet at each               
          financial reporting date and that any changes in market value               
          from one reporting date to the next be currently reflected in               
          income or loss.                                                             
               C.  Devon System and the Devon (Midmarket) Value                       
                    1.  Devon System                                                  
               FNBC and most other dealers used the Devon system in order             
          to ascertain their valuations for their mark-to-market accounting           
          systems.  The Devon system was developed and marketed by an                 
          independent software company named Devon Systems International,             
          Inc.26  The Devon system was during the relevant years the most             


          25 Most State statutes also usually define the term for                     
          purposes of valuing dissenting stockholders’ appraisal rights               
          and, sometimes, for purposes of valuing property in cases of                
          marital dissolution.  As discussed below, that definition is not            
          applicable here.                                                            
          26 SunGard Systems International, Inc., a subsidiary of                     
          SunGard Data Systems, Inc., acquired Devon Systems International,           
                                                             (continued...)           




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Last modified: May 25, 2011