RW - Shareholder Initiatives: FleetBoston 2002

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Status

Annual meeting held Apr. 16, 2002.

% voting YES: 13%

Shareholder resolutions face a variety of obstacles. For this reason, it is considered significant if a resolution garners at least 5% of the vote. Votes over 10% indicate exceptional shareholder support for an issue.

Filers of "social-issue" resolutions generally don't expect their resolution to receive a majority vote and be adopted by management. Rather, filers use these resolutions to get management's attention, and to raise the issue with other shareholders. They hope to achieve a vote sufficient to allow them to return the next year.

According to SEC rules, a resolution must receive 3% of the vote the first year it is filed, 6% in year two and 10% thereafter in order to be included on the proxy the following year

FleetBoston

Executive Compensation Review

WHEREAS, last year’s annual meeting focused on improving FleetBoston’s customer service record and in May, 2001 FleetBoston committed $50 million to improving customer service. In addition, in a speech to a financial services conference, FleetBoston President Chad Gifford noted that the bank would begin evaluating division heads on measurable targets in areas including customer attrition, customer satisfaction, and employee turnover. Despite this position, FleetBoston urged shareholders at last year’s annual meeting to oppose a shareholder resolution calling upon the Directors to link CEO pay to measures of employee and customer satisfaction and to freeze CEO pay during periods of significant downsizing. More than 14% of shareholders supported that resolution.

WHEREAS, since the Fleet-Bank Boston merger, our company has developed a reputation for poor customer service. A May, 2001 study published by American Banker, the daily trade newspaper of the banking industry, found that FleetBoston finished dead last in a survey comparing the reputations of 40 leading financial services firms in the United States. The survey focused on seven factors, including products and services, workplace environment, and social responsibility.

WHEREAS, FleetBoston, like many companies, has followed large layoffs with large compensation increases for senior executives. In early 2000, FleetBoston announced the layoff of 4,000 workers, representing 14% of the company’s workforce. Within days of the layoff announcement, FleetBoston announced that CEO Terrance Murray received a 13% increase in cash compensation and a special bonus of $20 million for completing the BankBoston merger.

WHEREAS, we believe that asking employees to sacrifice, while at the same time rewarding executives, sends a mixed signal to employees, customers and shareholders. We believe that business success over the long term is enhanced when business is viewed as a shared enterprise in which both the rewards and sacrifices are equitably shared among all employees.

WHEREAS, positive employee morale contributes to good customer service and enhanced productivity. We believe mass layoffs, such as those initiated by FleetBoston in 2000, carry with them a heightened risk of diminished customer service and overall performance. It is therefore appropriate to withhold executive pay increases during times of large layoffs until it is clear that the layoff strategy has not impaired the business.

WHEREAS, as shareholders, we applaud our company’s leaders, commitment to improving customer and employee satisfaction, and believe it is time to link executive compensation to improvements in customer, employee and community satisfaction so that positive aspirations result in meaningful change.

THEREFORE, BE IT RESOLVED, shareholders request that the Board institute a special Executive Compensation Review which shall: 1) evaluate the merits of adding customer, employee and community satisfaction surveys as factors in determining a portion of executive pay; and 2) consider whether adopting a policy of freezing executive pay during periods of significant downsizing would improve employee morale and customer service. A summary of this review, including any recommended changes in executive compensation policy, shall be available to shareholders within six months of the 2002 annual meeting.

PLEASE VOTE FOR THIS RESOLUTION!

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