Document:

exv10w2

 

Exhibit 10.2

UNITED STATES OF AMERICA

DEPARTMENT OF THE TREASURY

OFFICE OF THE COMPTROLLER OF THE CURRENCY

	 	 	 	 	 	 	 
	

	 	 	 	 	 	 
	In the Matter of:

	 	 	)	 	 	 
	

	 	 	)	 	 	 
	Riggs Bank N.A.,

	 	 	)	 	 	          AA-EC-04-54
	McLean, Virginia

	 	 	)	 	 	 
	

	 	 	 	 	 	 

MODIFICATION OF EXISTING CONSENT ORDER DATED MAY 13, 2004

     The Comptroller of the Currency of the United States of America (“Comptroller”) and Riggs Bank
N.A., McLean, Virginia (“Bank”) hereby agree to the following modifications to the existing Consent
Order dated May 13, 2004 (“Consent Order”). The Bank, by and through its duly elected and acting
Board of Directors (“Board”), has executed a “Stipulation and Consent to the Issuance of a
Modification of the Consent Order,” dated January 27, 2005 (“Modified Order”), which is accepted by
the Comptroller. By this Stipulation and Consent, which is incorporated by reference, the Bank has
consented to the issuance of this Modification Order by the Comptroller. This Modified Order
supplements, but does not replace, the Consent Order. Specifically, Articles III, V, and VI of the
Consent Order shall remain in effect without modification; Articles I and IV of the Consent Order
shall be replaced as set forth below; Article II of the Consent Order shall be supplemented as set
forth below; and Articles IV and V of this Modified Order shall be additional obligations as set
forth below.

     Pursuant to the authority vested in her by the Federal Deposit Insurance Act, as amended, 12
U.S.C. § 1818, the Comptroller hereby orders that:

ARTICLE I

BOARD TO ENSURE COMPETENT MANAGEMENT

     This Article shall replace Article I of the Consent Order to read as follows:

 

 

     (1) Within sixty (60) days, the Bank’s Board shall cause the Bank to complete an updated
written report regarding the staffing skills and levels required to fulfill the Bank’s continuing
obligations pursuant to the Consent Order, to fulfill its continuing obligations pursuant to the
Consent Order dated July 16, 2003, and to implement the Bank’s Capital Plan, Strategic Plan, and
Contingency Plan required by this Modified Order, as set forth below. The Report shall also
include a listing of positions that are open and need to be filled; a listing of positions that are
open, but do not need to be filled, with documentation supporting the reasons those positions do
not need to be filled; a methodology for filling vacant positions, timeframes, and a methodology
for identifying and retaining current employees, especially employees necessary to ensure
compliance with the Consent Order and this Modified Order.

     (2) Within thirty (30) days of completion of the updated written report, the Board shall: (i)
evaluate the report; (ii) determine whether to adopt the report in part or in full; (iii) determine
whether management or staff changes should be made, including the need for additions to or
deletions from current management or staffing; (iv) determine whether the skills of management and
staff need improvement; and (v) cause the Bank to develop an action plan to implement the Board’s
determinations about the report (“Action Plan”).

     (3) Upon completion of the Action Plan, a copy of the written report and the Action Plan shall
be submitted to Assistant Deputy Comptroller John F. Curtis (“Assistant Deputy Comptroller”),
Office of the Comptroller of the Currency, 250 E St., S.W., Washington, D.C. 20219, for his prior
written determination of no supervisory objection to the Action Plan.

     (4) Upon receipt of a written determination of no supervisory objection, the Board shall
immediately implement and thereafter ensure adherence to the Action Plan.

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     (5) The Bank’s management shall provide a monthly, written progress report to the Assistant
Deputy Comptroller and the Board, or its Executive Committee, regarding the Bank’s efforts to meet
the goals and objectives of the Action Plan, and shall update the Action Plan as needed. Prior to
making any changes that will cause, result or bring about a significant deviation or material
change to the Action Plan adopted pursuant to this Article, the Board shall submit the changes to
the Assistant Deputy Comptroller for prior written determination of no supervisory objection.

     (6) The Board shall ensure that the Bank has processes, personnel, and control systems to
ensure implementation of and adherence to the Action Plan developed pursuant to this Article.

     (7) The Board shall ensure that any third party consultants, i.e., auditors and/or attorneys,
are subject to oversight and coordination by Bank management and are subject to appropriate
contractual arrangements and applicable OCC guidance related to third-party relationships. The
Bank shall ensure that all third-party relationships have appropriate documentation to segregate
expenses between the Bank and its affiliates, including the Bank’s parent company.

ARTICLE II

BOOKS AND RECORDS 

     This Article shall supplement Article II of the Consent Order as an additional paragraph as
follows:

     (1) The Bank shall take all steps necessary to ensure the maintenance and availability to
supervisory authorities of all records of the Bank and its subsidiaries (including the books and
records of Riggs International Banking Corporation, Riggs Bank Europe Limited, Riggs &

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Company International, Limited, and Riggs Bank & Trust Company (Channel Islands), Limited, in
the possession, custody or control of the Bank).

ARTICLE III

CAPITAL PLAN AND DIVIDEND POLICY

     This Article shall replace Article IV of the Consent Order to read as follows:

     (1) Within thirty (30) days, the Board shall cause the Bank to develop a capital plan that
includes:

	 	(a)  	The Bank’s current and future capital requirements;
	 
	 	(b)  	Projections for growth and capital requirements based upon a
detailed analysis of the Bank’s risk profile and its assets, liabilities,
earnings and off-balance sheet activities; and
	 
	 	(c)  	The sources and timing of additional capital to meet the Bank’s
current and future needs.

     (2) Upon completion, the Bank’s Capital Plan shall be submitted to the Assistant Deputy
Comptroller for his prior written determination of no supervisory objection.

     (3) Upon receipt of a written determination of no supervisory objection, the Bank shall
immediately implement and thereafter ensure adherence to the Capital Plan.

     (4) The Board shall review and update the Bank’s Capital Plan on a quarterly basis, or more
frequently if necessary. Copies of the reviews and updates shall be submitted to the Assistant
Deputy Comptroller. Prior to making any changes that will cause, result or bring about a
significant deviation or material change to the Capital Plan, the Board shall submit the changes to
the Assistant Deputy Comptroller for prior written determination of no supervisory objection.

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     (5) The Board shall ensure that the Bank has processes, personnel, and control systems to
ensure implementation of and adherence to the Capital Plan developed pursuant to this Article.

     (6) The Bank shall declare and pay a dividend only:

	 	(a)  	When the Bank is in compliance with its Capital Plan, following
supervisory non-objection of the Capital Plan and all changes to the Plan;
	 
	 	(b)  	When the Bank is in compliance with 12 U.S.C. §§ 56 and 60; and
	 
	 	(c)  	With the prior written determination of no supervisory
objection from the Assistant Deputy Comptroller.

ARTICLE IV

STRATEGIC PLAN

     This Article shall supplement the Consent Order as an additional Article, as follows:

     (1) Within sixty (60) days, the Board shall cause the Bank to develop a strategic plan that
includes:

	 	(a)  	A detailed analysis of the Bank’s current financial condition,
strategic goals, product lines, market demand, competition and economic
conditions;
	 
	 	(b)  	Provisions for maintenance and growth of the Bank’s earnings,
capital and liquidity, consistent with the Capital and Contingency Plans
required by this Order; and
	 
	 	(c)  	Strategies to address significant external risks, including
actions to be taken in response to varying contingencies that might affect the
Bank’s ability to implement its strategic goals.

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     (2) Upon completion, the Bank’s Strategic Plan shall be submitted to the Assistant Deputy
Comptroller for prior written determination of no supervisory objection.

     (3) Upon receipt of a written determination of no supervisory objection, the Bank shall
immediately implement and thereafter ensure adherence to the Strategic Plan. Prior to making any
changes that will cause, result or bring about a significant deviation or material change to the
Strategic Plan adopted pursuant to this Article, the Board shall submit the changes to the
Assistant Deputy Comptroller for prior written determination of no supervisory objection.

ARTICLE V

CONTINGENCY PLANNING

     This Article shall supplement the Consent Order as an additional article as follows:

     (1) Within sixty (60) days, the Board shall cause the Bank to develop a contingency plan to
address the Bank’s current and future liquidity and funding requirements (“Contingency Plan”). The
Contingency Plan shall address, at a minimum:

	 	(a)  	The Bank’s current and future liquidity and funding
requirements, under various scenarios;
	 
	 	(b)  	Projections of the sources and timing of additional liquidity
and funding to meet the Bank’s current and future needs, including the
resolution of issues relating to compliance, internal controls, risk
management, the Consent Order, and any actual or potential litigation on
related matters; and
	 
	 	(c)  	The source(s) from which the Bank will seek to increase its
liquidity and funding to meet the Bank’s needs, including an analysis of the
volatility and availability of funding sources.

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     (2) Upon completion, the Bank’s Contingency Plan shall be submitted to the Assistant Deputy
Comptroller for prior written determination of no supervisory objection.

     (3) Upon receipt of a written determination of no supervisory objection, the Bank shall
immediately implement and thereafter ensure adherence to the Contingency Plan. Prior to making any
changes that will cause, result or bring about a significant deviation or material change to the
Contingency Plan adopted pursuant to this Article, the Board shall submit the changes to the
Assistant Deputy Comptroller for prior written determination of no supervisory objection.

ARTICLE VI

CLOSING

     (1) Although the Board is by this Modified Order required to submit certain proposed actions
and programs for the review or prior written determination of no supervisory objection of the
Assistant Deputy Comptroller, the Board has the ultimate responsibility for proper and sound
management of the Bank.

     (2) It is expressly and clearly understood that if, at any time, the Comptroller deems it
appropriate in fulfilling the responsibilities placed upon her by the several laws of the United
States of America to undertake any action affecting the Bank, nothing in this Modified Order shall
in any way inhibit, estop, bar or otherwise prevent the Comptroller from so doing.

     (3) Any time limitations imposed by this Modified Order shall begin to run from the effective
date of this Modified Order. Any time limitations imposed by the Consent Order shall remain in
effect unless specifically amended by this Modified Order. Any time limitations may be extended in
writing by the Assistant Deputy Comptroller for good cause upon written application by the Board.

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     (4) The provisions of this Modified Order are effective upon issuance of this Modified Order
by the Comptroller, through her authorized representative whose hand appears below, and shall
remain effective and enforceable, except to the extent that, and until such time as, any provisions
of this Modified Order shall have been amended, suspended, waived, or terminated in writing by the
Comptroller; provided however, that the provisions of this Modified Order will not be
assumed by an entity which acquires all or substantially all of the assets and liabilities of the
Bank or to any successor in interest in a merger or acquisition of the Bank..

     (5) In each instance in this Modified Order in which the Board is required to ensure adherence
to, and undertake to perform certain obligations of the Bank, it is intended to mean that the Board
shall:

	 	(a)  	Authorize and adopt such actions on behalf of the Bank as may
be necessary for the Bank to perform its obligations and undertakings under
the terms of this Modified Order;
	 
	 	(b)  	Require the timely reporting by Bank management of such
actions directed by the Board to be taken under the terms of this Modified
Order;
	 
	 	(c)  	Follow-up on any non-compliance with such actions in a timely
and appropriate manner; and
	 
	 	(d)  	Require corrective action be taken in a timely manner of any
non-compliance with such actions.

     (6) In the event of an inconsistency between this Modified Order, the Consent Order or the
Consent Order dated July 16, 2003, the terms of this Modified Order shall control.

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     (7) This Modified Order is intended to be, and shall be construed to be, a final order issued
pursuant to 12 U.S.C. § 1818(b), and expressly does not form, and may not be construed to form, a
contract binding on the Comptroller or the United States.

     (8) The terms of this Modified Order, including this paragraph, are not subject to amendment
or modification by any extraneous expression, prior agreements or prior arrangements between the
parties, whether oral or written.

IT IS SO ORDERED, this 27th day of January, 2005.

	 	 	 
	/s/ Timothy W. Long

	 	1/27/05
	

	 	

	Timothy W. Long

	 	Date
	Senior Deputy Comptroller
	 	 

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UNITED STATES OF AMERICA

DEPARTMENT OF THE TREASURY

OFFICE OF THE COMPTROLLER OF THE CURRENCY

	 	 	 
	

	 	 
	In the Matter of:

	 	) 
	

	 	) 
	Riggs Bank N.A.

	 	) 
	McLean, Virginia

	 	) 
	

	 	 

STIPULATION AND CONSENT TO THE ISSUANCE

OF MODIFICATION OF EXISTING CONSENT ORDER

     The Comptroller of the Currency of the United States of America (“Comptroller”) has initiated
proceedings against Riggs Bank N.A., McLean, Virginia (“Bank”) pursuant to 12 U.S.C. § 1818(b).

     The Bank, in the interest of compliance and cooperation, consented to the issuance of a
Consent Order, dated May 13, 2004 (“Consent Order”);

     In consideration of the above premises, the Comptroller, through his authorized
representative, and the Bank, through its duly elected and acting Board of Directors, hereby
stipulate and agree to the following:

ARTICLE I

JURISDICTION

     (1) The Bank is a national banking association chartered and examined by the Comptroller
pursuant to the National Bank Act of 1864, as amended, 12 U.S.C. § 1 et seq.

     (2) The Comptroller is “the appropriate Federal banking agency” regarding the Bank pursuant to
12 U.S.C. §§ 1813(q) and 1818(b).

     (3) The Bank is an “insured depository institution” within the meaning of 12 U.S.C. §
1818(b)(1).

 

 

ARTICLE II

AGREEMENT

     (1) The Bank hereby consents and agrees to the issuance of the Modification of the Existing
Consent Order by the Comptroller (“Modified Order”).

     (2) The Bank further agrees that said Modified Order shall be deemed an “order issued with the
consent of the depository institution” as defined in 12 U.S.C. § 1818(h)(2), and consents and
agrees that said Modified Order shall become effective upon its issuance and shall be fully
enforceable by the Comptroller under the provisions of 12 U.S.C. § 1818(i). Notwithstanding the
absence of mutuality of obligation, or of consideration, or of a contract, the Comptroller may
enforce any of the commitments or obligations herein undertaken by the Bank under its supervisory
powers, including 12 U.S.C. § 1818(i), and not as a matter of contract law. The Bank expressly
acknowledges that neither the Bank nor the Comptroller has any intention to enter into a contract.

     (3) The Bank also expressly acknowledges that no officer or employee of the Office of the
Comptroller of the Currency has statutory or other authority to bind the United States, the U.S.
Treasury Department, the Comptroller, or any other federal bank regulatory agency or entity, or any
officer or employee of any of those entities to a contract affecting the Comptroller’s exercise of
its supervisory responsibilities.

ARTICLE III

WAIVERS

     (1) The Bank, by signing this Stipulation and Consent, hereby waives:

	 	(a)  	The issuance of a Notice of Charges pursuant to 12 U.S.C. § 1818(b);

- 2 -

 

	 	(b)  	Any and all procedural rights available in connection with the
issuance of the Modified Order;
	 
	 	(c)  	All rights to seek any type of administrative or judicial review of the Modified
Order; and
	 
	 	(d)  	Any and all rights to challenge or contest the validity of the Modified Order.

ARTICLE IV

OTHER ACTION

     (1) The Bank agrees that the provisions of this Stipulation and Consent shall not inhibit,
estop, bar, or otherwise prevent the Comptroller from taking any other action affecting the Bank
if, at any time, he deems it appropriate to do so to fulfill the responsibilities placed upon her
by the several laws of the United States of America.

     IN TESTIMONY WHEREOF, the undersigned, authorized by the Comptroller as her representative,
has hereunto set his hand on behalf of the Comptroller.

	 	 	 
	/s/ Timothy W. Long

	 	1/27/05
	

	 	

	Timothy W. Long

	 	Date
	Senior Deputy Comptroller
	 	 

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     IN TESTIMONY WHEREOF, the undersigned, as the duly elected and acting Board of Directors of
the Bank, have hereunto set their hands on behalf of the Bank.

	 	 	 
	/s/ Robert L. Allbritton

	 	1/27/05
	

	 	

	Robert L. Allbritton

	 	Date
	 
	 	 
	/s/ Nathan D. Baxter

	 	1/27/05
	

	 	

	Nathan D. Baxter

	 	Date
	 
	 	 
	/s/ Jacqueline C. Duchange

	 	1/27/05
	

	 	

	Jacqueline C. Duchange

	 	Date
	 
	 	 
	/s/ Thomas F. Fitzgerald

	 	1/27/05
	

	 	

	Thomas F. Fitzgerald

	 	Date
	 
	 	 
	/s/ Heather S. Foley

	 	1/27/05
	

	 	

	Heather S. Foley

	 	Date
	 
	 	 
	/s/ Lawrence I. Hebert

	 	1/27/05
	

	 	

	Lawrence I. Hebert

	 	Date
	 
	 	 
	/s/ Frederick J. Ryan, Jr.

	 	1/27/05
	

	 	

	Frederick J. Ryan, Jr.

	 	Date
	 
	 	 
	/s/ John A. Sargent

	 	1/27/05
	

	 	

	John A. Sargent

	 	Date
	 
	 	 
	/s/ Stephen J. Trachtenberg

	 	1/27/05
	

	 	

	Stephen J. Trachtenberg

	 	Date
	 
	 	 
	/s/ Stuart Yarbrough

	 	1/27/05
	

	 	

	Stuart Yarbrough

	 	Date

- 4 -exv10w3

 

Exhibit 10.3

UNITED STATES OF AMERICA

BEFORE THE

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

WASHINGTON, D.C.

	 	 	 	 	 	 	 
	

	 	 	 	 	 	 
	In the Matter of

	 	 	)	 	 	 
	

	 	 	)	 	 	 
	RIGGS NATIONAL CORPORATION

	 	 	)	 	 	          Docket No.       05-003-B-HC
	Washington, D.C.

	 	 	)	 	 	 
	

	 	 	)	 	 	 
	

	 	 	)	 	 	 
	

	 	 	 	 	 	 

     WHEREAS, it is the common goal of Riggs National Corporation, Washington, D.C. (“Riggs”), a
registered bank holding company, and the Board of Governors of the Federal Reserve System (“Board
of Governors”) to maintain the financial condition and the continued safe and sound operation of
Riggs and its consolidated organization;

     WHEREAS, Riggs is continuing to implement provisions of the consent Order to Cease and Desist
issued on May 14, 2004 by the Board of Governors against Riggs and Riggs International Banking
Corporation, Miami, Florida (“RIBC”), an Edge corporation organized under Section 25A of the
Federal Reserve Act (12 U.S.C. 611 et seq.), which is a wholly-owned subsidiary of Riggs Bank,
N.A., Washington, D.C. (the “May 2004 Order”);

     WHEREAS, RIBC ceased to exist as a separate entity as of December 31, 2004, and all of RIBC’s
remaining operations, accounts, property, and records have been transferred to Riggs Bank, N.A.;

     WHEREAS, to reflect RIBC’s closure and developments in the condition of the Riggs consolidated
organization since the issuance of the May 2004 Order, the May 2004 Order is being terminated, and
Riggs is consenting to the issuance of this new Cease and Desist Order (the “Order”) by the Board
of Governors; and

 

 

     WHEREAS, on January 26, 2005 the board of directors of Riggs, at a duly constituted meeting,
adopted a resolution:

          (1) authorizing and directing Robert L. Allbritton, Chief Executive Officer, to enter into
this Order on behalf of Riggs and consenting to compliance by Riggs and its institution-affiliated
parties, as defined in sections 3(u) and 8(b)(3) of the Federal Deposit Insurance Act, as amended
(12 U.S.C. 1813(u) and 1818(b)(3)) (the “FDI Act”), with each and every provision of this Order;
and

          (2) waiving any and all rights that Riggs may have pursuant to section 8 of the FDI Act and 12
C.F.R. part 263 or otherwise to the issuance of a notice of charges; to a hearing for the purpose
of taking evidence with respect to any matter implied by or set forth in this Order; to judicial
review of this Order; or to challenge or contest, in any manner, the basis, issuance, validity,
terms, effectiveness or enforceability of this Order or any provision hereof.

     NOW, THEREFORE, IT IS HEREBY ORDERED, pursuant to section 8(b) of the FDI Act, that Riggs
shall cease and desist and take affirmative action as follows:

Management, Board Oversight, and Risk Management

     1. Riggs shall continue to implement the plans required by the May 2004 Order to strengthen
management, board oversight and risk management. Riggs shall, at a minimum:

          (a) Within 90 days of this Order, fully implement all recommendations and address all
criticisms of the management review required by paragraph 1 of the May 2004 Order;

          (b) within 90 days of this Order, fully implement the board oversight plan required by
paragraph 2 of the May 2004 Order;

          (c) within 90 days of this Order, fully implement the risk management plan required by
paragraph 3 of the May 2004 Order;

2

 

          (d) track the implementation of the recommendations and the plans; and

          (e) within 180 days of this Order, validate the effectiveness of the aforementioned
implementation and submit a written report to the Federal Reserve Bank of Richmond (the “Reserve
Bank”) that (i) summarizes the actions taken to fully comply with the relevant provisions of the
May 2004 Order and (ii) describes the actions taken to validate compliance.

     2. Within 60 days of this Order, Riggs shall submit to the Reserve Bank an acceptable plan
that shall, at a minimum, address, consider, and include:

          (a) Recommendations in the report of the inspection of Riggs commenced on August 2, 2004 (the
“Report of Inspection”) and any criticisms from prior inspections that have not yet been addressed;

          (b) procedures designed to ensure that services provided to the Riggs consolidated
organization by retained third party consultants and attorneys (i) are subject to oversight and
coordination by Riggs management, and (ii) are conducted under appropriate contractual
arrangements;

          (c) such steps as are necessary to identify and retain critical employees within the Riggs
consolidated organization and, where necessary, to recruit and hire additional qualified personnel;

and

          (d) existing and emerging operational, compliance, and structural concerns noted in the Report
of Inspection.

3

 

Capital Plan

     3. Within 30 days of this Order, Riggs shall submit to the Reserve Bank an acceptable written
plan to achieve and maintain sufficient capital at the consolidated organization. The plan shall,
at a minimum, address, consider, and include:

          (a) The consolidated organization’s current and future capital requirements, including
compliance with the Capital Adequacy Guidelines for Bank Holding Companies: Risk-Based Measures and
Tier 1 Leverage Measures, Appendices A and D of Regulation Y of the Board of Governors;

          (b) the anticipated level of retained earnings;

          (c) the risk profile of the consolidated organization;

          (d) the source and timing of additional funds to fulfill the future capital and reserve needs
of the consolidated organization, including any requirements imposed by the Office of the
Comptroller of the Currency;

          (e) the requirement of section 225.4(a) of Regulation Y of the Board of Governors that Riggs
serve as a source of strength to Riggs Bank, N.A.; and

          (f) provision to the Reserve Bank of regular reports on compliance with all capital
requirements imposed on the consolidated organization.

Contingency Funding Plan

     4. Within 60 days of this Order, Riggs shall submit to the Reserve Bank an acceptable written
contingency plan to address the liquidity position of the consolidated organization. The plan
shall address, at a minimum:

4

 

          (a) Fulfillment of current and future liquidity and funding needs of the consolidated
organization, and the identification of potential funding sources under various scenarios;

          (b) adequate analysis of volatility and availability of current funding sources;

          (c) the continuing effect on the organization’s cash flow on the resolution of issues relating
to compliance, internal controls, and risk management;

          (d) funding needs arising in connection with the resolution of issues addressed in the May
2004 Order and any potential litigation on related matters; and

          (e) Riggs’s ability to provide financial support to Riggs Bank, N.A.

Strategic Plan

     5. Within 60 days of this Order, Riggs shall submit to the Reserve Bank an acceptable written
strategic plan to address significant risks that may affect the operating performance of the
consolidated organization. The strategic plan shall set forth measures to be taken in response to
varying contingencies that may affect the organization’s ability to implement its business
initiatives and achieve its financial goals.

Internal Audit

     6. Riggs shall continue to implement the internal audit program for the consolidated
organization required by paragraph 4 of the May 2004 Order.

     7. Within 60 days of this Order, Riggs shall submit to the Reserve Bank acceptable written
enhancements to the consolidated organization’s internal audit program. The enhancements shall, at
a minimum, address, consider, and include:

5

 

          (a) Oversight by the audit committee and senior management of all outsourced audit
arrangements to ensure that any weaknesses and deficiencies are promptly identified and addressed;

          (b) procedures to track the effectiveness of oversight of outsourced audit work and evaluate
the services provided to Riggs;

          (c) such steps as are necessary to ensure that Riggs’s outside audit firm(s), at a minimum:
(i) identifies and reports any internal control and management information system weakness; (ii)
documents the result of engagement(s) with comprehensive work papers; (iii) tracks the status and resolution of identified deficiencies; and (iv) effectively executes
the annual audit plan agreed to by Riggs’s audit committee;

          (d) board and senior management oversight of the information technology audit function, the
quality assurance function, and audits of foreign operations;

          (e) completion of an internal audit plan and the engagement of an internal auditor for 2005;
and

          (f) all other internal audit recommendations in the Report of Inspection.

Dividends, Interest Payments, Debt and Stock Redemption

     8. (a) Riggs shall not declare or pay any dividends without the prior written approval of the
Reserve Bank and the Director of the Division of Banking Supervision and Regulation of the Board of
Governors (the “Director”).

          (b) Riggs shall not make any distributions of interest, principal, or other sums with respect
to the debentures issued in connection with its trust preferred securities without the prior
written approval of the Reserve Bank and the Director.

6

 

          (c) Riggs shall not purchase, redeem, or otherwise acquire, directly or indirectly, any of its
stock or its debt without the prior written approval of the Reserve Bank and the Director.

          (d) All requests for prior written approval shall be received by the Reserve Bank at least 60
days prior to the proposed dividend declaration date, payment date, or repurchase date, and shall
contain, but not be limited to, current and projected information on consolidated capital, asset
quality, earnings, liquidity, and cash flow.

Maintenance of Records

     9. Riggs shall take such steps as are necessary to ensure the maintenance and availability to
supervisory authorities of all records of RIBC, including, without limitation, all records
generated or reviewed in connection with the transaction review at RIBC required by paragraph 8 of
the May 2004 Order.

Termination of Prior Order

     10. The May 2004 Order is terminated.

Submissions to the Reserve Bank

     11. The plans and enhancements required by paragraphs 2, 3, 4, 5, and 7 of this Order shall be
submitted to the Reserve Bank for review and approval. Acceptable plans and enhancements shall be
submitted to the Reserve Bank within the time periods set forth in this Order. Riggs shall adopt
the approved plans and enhancements within 15 days of approval by the Reserve Bank and then shall
fully comply with them. During the term of this Order, the approved plans and enhancements shall
not be amended or rescinded without the prior written approval of the Reserve Bank.

7

 

     12. Within 30 days after the end of each quarter following the date of this Order, Riggs shall
submit to the Reserve Bank written progress reports detailing the form and manner of all actions
taken to secure compliance with the provisions of this Order and the results thereof. The Reserve
Bank may, in writing, discontinue the requirement for progress reports or modify the reporting
schedule.

Notices

     13. All communications regarding this Order shall be sent to:

	 	 	 
	(a)

	 	James Barnes
	

	 	Vice President

Federal Reserve Bank of Richmond

Post Office Box 27622

Richmond, VA 23261
	 
	 	 
	(b)

	 	Robert L. Allbritton
	

	 	Chief Executive Officer

Riggs National Corporation

800 17th Street, NW

Washington, DC 20006-3944

Miscellaneous

     14. The provisions of this Order shall be binding on Riggs and its institution-affiliated
parties in their capacities as such, and their successors and assigns.

     15. Each provision of this Order shall remain effective and enforceable until stayed,
modified, terminated or suspended in writing by the Board of Governors.

     16. Notwithstanding any provision of this Order, the Reserve Bank may, in its sole discretion,
grant written extensions of time to Riggs to comply with any provision of this Order.

     17. The provisions of this Order shall not bar, estop or otherwise prevent the Board of
Governors, the Reserve Bank, or any federal or state agency from taking any further or other

8

 

action affecting Riggs or any of its current or former institution-affiliated parties or their
successors or assigns.

     By order of the Board of Governors of the Federal Reserve System this 27th day of January,
2005.

	 	 	 	 	 	 	 	 	 	 	 
	RIGGS NATIONAL CORPORATION	 	BOARD OF GOVERNORS OF THE
	 	 	 	 	 	 	  FEDERAL RESERVE SYSTEM
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	/s/
	Robert L. Allbritton
	 	By:
	/s/
	Jennifer J. Johnson
	

	 	 
	 	 	 	 
	

	 	Robert L. Allbritton
	 	 	 	Jennifer J. Johnson
	

	 	Chief Executive Officer
	 	 	 	Secretary of the Board

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}]]